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United States of America v. Michael A. Taibi

February 21, 2012


The opinion of the court was delivered by: Honorable Janis L. SammartinoUnited States District Judge


Presently before the Court is Plaintiff United States of America's motion for summary judgment. (ECF No. 23.) Also before the Court are Defendant Michael A. Taibi's opposition (ECF No. 25) and Plaintiff's reply (ECF No. 27). The motion hearing set for February 23, 2012 is HEREBY VACATED, and the matter is taken under submission without oral argument pursuant to Civil Local Rule 7.1(d)(1). Having considered the parties' arguments and the law, Plaintiff's motion is GRANTED.


Plaintiff filed this action on November 1, 2010 pursuant to 28 U.S.C. § 1345 for recovery of a defaulted student loan on behalf of the Department of Education. (Compl. 1, ECF No. 1.) Plaintiff alleges Defendant obtained a student loan in the amount of $36,235.03, which was insured by the Department of Education pursuant to 20 U.S.C. § 1071. Defendant eventually defaulted on the loan, and the Department of Education later assumed all rights to the claim, which had accrued capitalized interest of $9,606.08, increasing the principal due to $45,841.11. (Id. at 2.) Defendant apparently never made any payments on the loan. Plaintiff now seeks judgment against Defendant in the amount of $45,841.11 plus interest at 9 percent from March 28, 1998 to the date of judgment, as well as other costs and penalties. (Id.) As of December 19, 2011, the date of Plaintiff's filing the instant motion for summary judgment, this amount totals $102,448.72. (MSJ 2, ECF No. 23.)

In support of its contentions, Plaintiff attached to the complaint a certificate of indebtedness executed in September, 2010 and apparently mailed to Defendant at an address in La Jolla, California. (Certificate, Compl. 3) The letter describes the history of the debt, beginning when Defendant secured a "Federal Family Education Loan Program Consolidation" loan for $36,235.03 from CitiBank in Rochester, New York on April 21, 1993. The loan obligation was guaranteed by United Student Aid Funds, and then reinsured by the Department of Education under loan guaranty programs authorized by federal statute. Defendant apparently defaulted on the obligation on March 26, 1998, at which point the holder filed a claim on the loan guarantee. After the guarantor was unsuccessful in collecting any amount due, on November 8, 2006, it assigned the loan to the Department of Education. The letter concludes by informing Defendant he owes $97,070.41 as of August 27, 2010, with interest accruing on the principal at a rate of $11.28 per day.

With its motion for summary judgment, Plaintiff additionally produces a copy of a "Loan Consolidation Application and Promissory Note," signed by Michael A. Taibi on April 21, 1993. (MSJ Ex. B.) Plaintiff also provides documentation of what appears to be the record of United Student Aid Funds of Defendant's default (MSJ Ex. C), letters indicating several attempts to collect on the loan by a debt collection company, National Payment Center, on behalf of the Department of Education (MSJ Ex. D), as well as the Declaration of Michael Illes, a loan analyst for the Department of Education (Illes Decl. ISO MSJ, ECF No. 23-3).

On January 5, 2011, Defendant filed an answer in which he denies that he obtained a student loan in the amount of $36,235.03 and denies defaulting on any loan. (Answer 1-2, ECF No. 3.) Defendant claims a lack of sufficient knowledge or information to form a belief as to the truth of the remaining allegations in the complaint and asserts fourteen affirmative defenses, each stated generally and without any factual support in what can only be described as boilerplate fashion. (Answer 2-5.) In opposition to the instant motion for summary judgment, Defendant provides only his own Declaration (Taibi Decl. ISO Def.'s Opp'n, Ex. 1) and the Declaration of Samuel A. Sue, his attorney (Sue Decl. ISO Def.'s Opp'n, Ex. 2).


Federal Rule of Civil Procedure 56 permits a court to grant summary judgment where (1) the moving party demonstrates the absence of a genuine issue of material fact and (2) entitlement to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "Material," for purposes of Rule 56, means that the fact, under governing substantive law, could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir.1997). For a dispute to be "genuine," a reasonable jury must be able to return a verdict for the nonmoving party. Anderson, 477 U.S. at 248.

The initial burden of establishing the absence of a genuine issue of material fact falls on the moving party. Celotex, 477 U.S. at 323. The movant can carry his burden in two ways: (1) by presenting evidence that negates an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof. Id. at 322. "Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment." T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir.1987).

Once the moving party establishes the absence of genuine issues of material fact, the burden shifts to the nonmoving party to set forth facts showing that a genuine issue of disputed fact remains. Celotex, 477 U.S. at 324. The nonmoving party cannot oppose a properly supported summary judgment motion by "rest[ing] upon mere allegation or denials of his pleading." Anderson, 477 U.S. at 256. When ruling on a summary judgment motion, the court must view all inferences drawn from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).


To prevail on its claim to enforce a promissory note in a student loan case, the government must establish: (1) the existence of the note, signed by the defendant; (2) that the government is the current owner or holder of the note; and (3) the defendant's default on the amount due. See United States v. Lawrence, 276 F.3d 193, 197 (5th Cir. 2001); United States v. Freeman, 2002 WL 467688 (N.D.Cal. Mar. 25, 2002). To prove its claim, "the government may introduce evidence of the note and a sworn transcript of the account or certificate of indebtedness." United States v. Petroff-Kline, 557 F.3d 285, 290 (6th Cir. 2009). Once a prima facie case has been made, the burden shifts to the defendant to establish the nonexistence, extinguishment, variance in payment of the obligation, or some other affirmative defense. Id.

Here, Plaintiff has presented a copy of the original Promissory Note, signed by "Michael A. Taibi," a Certificate of Indebtedness attesting to the government's current ownership of the note, Defendant's default and the amount due, and a declaration of a Department of Education loan officer attesting to all of the above. The Court finds this evidence is sufficient to establish Plaintiff's prima facie case. See United States v. Irby, 517 F.2d 1042, 1043 (5th Cir. 1975) (holding the government's prima facie case of loan default was clearly established by introduction of the promissory note, the guaranty agreement, and a sworn transcript of the account by an appropriate government officer, ...

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