112 F.3d 200 (5th Cir. 1997), 96-30692, United States v. Bloom

Docket Nº:96-30692.
Citation:112 F.3d 200
Party Name:UNITED STATES of America, Plaintiff-Appellee, v. Christopher A. BLOOM, Defendant-Appellant.
Case Date:May 12, 1997
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 200

112 F.3d 200 (5th Cir. 1997)

UNITED STATES of America, Plaintiff-Appellee,


Christopher A. BLOOM, Defendant-Appellant.

No. 96-30692.

United States Court of Appeals, Fifth Circuit

May 12, 1997

Page 201

Eneid A. Francis, U.S. Attorney's Office, New Orleans, LA, for Plaintiff-Appellee.

Paul Stephen Adams, New Orleans, LA, for Defendant-Appellant.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before POLITZ, Chief Judge, and WISDOM and KING, Circuit Judges.

WISDOM, Senior Circuit Judge:

Today we consider the applicability of the six-year statute of limitations contained in 28 U.S.C. § 2415(a) to cases involving default on scholarships awarded through the National Health Services Corps. We also examine the

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district court's grant of summary judgment for the government, and its consequent award of damages. For the reasons that follow, we affirm.


In 1979, Christopher A. Bloom was awarded a scholarship through the National Health Services Corps (NHSC) scholarship program to finance all four years of his medical school education. 1 Under the terms of the NHSC agreement signed by Bloom, he incurred a four-year service obligation in return for the four years of financial assistance. The program provided Bloom with an Applicant Information Bulletin which explained the service obligation under the NHSC scholarship program and the penalties for default.

After Bloom completed medical school, his service obligation was deferred for three years while he studied internal medicine. 2 Bloom received an additional one year suspension because of personal problems.

In 1986, Bloom chose to fulfill his service obligation as a salaried employee of the Desire-Florida Neighborhood Health Clinic (the Desire Clinic) under the Private Practice Option rather than as a corps member at a location determined by the NHSC. 3 In September, the NHSC conditionally approved Bloom's placement at the Desire Clinic. Bloom then tendered his resignation effective in November with Baptist Hospital Immediate Care Clinic. In December, final approval for the Desire Clinic placement was granted and Bloom was advised that his tentative starting date was July 1987. Bloom asserts that the NHSC made representations that he could begin immediately.

When Bloom reported to the Desire Clinic on November 1, 1986, he was told that the clinic had not been funded and, therefore, would not be able to hire him at that time. Bloom was unemployed until he obtained a position with the St. Bernard Clinic in January. In July, Bloom again reported to the Desire Clinic. The clinic was experiencing financial difficulties and could offer only part-time employment. As a result, Bloom resigned from the Desire Clinic on December 31, 1987.

From December 1987 through February 1989, Bloom communicated, through many telephone calls and correspondence, with the NHSC regional office in Dallas and the NHSC central office regarding the possibility of transferring to another approved site to complete his NHSC service obligation. After receiving a letter from Bloom dated December 28, 1987, Douglas Mahy, Chief of the Region VI NHSC branch, telephoned Bloom to discuss the transfer policy, a possible return to placement in New Orleans, and a one-year deferment.

Bloom then requested a waiver of his service obligation. In response, Mahy wrote to Bloom on July 21, 1988, advising him to plan to return to service in 1989, following a one-year break in service, or to opt for a buy-out of his scholarship obligation. Mahy requested that Bloom respond in writing by August

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15, 1988, regarding his decision either to request a transfer to another service site or to elect the buy-out option.

On August 30, 1988, after no response was received, Mahy again wrote to Bloom requesting that he respond by September 16, 1988. The letter further advised Bloom that if he did not respond by that date the NHSC would make a recommendation to place him in default. Bloom responded with a letter again requesting a waiver of his scholarship obligation. This was followed by a request for a waiver written by Bloom's attorney. The waiver was denied because Bloom presented no evidence that compliance with either the service or payment obligation was impossible or would cause extreme hardship. Bloom's attorney objected to the denial. The NHSC reiterated its denial and offered Bloom another chance to be transferred to a site in Louisiana. Mahy telephoned and wrote Bloom to inform him that a transfer from the Desire Clinic to the Bayou Comprehensive Medical Center in Lake Charles had been approved. Bloom, through his attorney, responded that he did not intend to accept the assignment.

Dr. John Dyer, Assistant Surgeon General and Regional Health Administrator for Region VI, wrote Bloom to inform him that he was being recommended for default. He was placed in default effective February 21, 1989.

The following year, Bloom sued the NHSC and other entities to prevent further collection on the debt. That suit was dismissed for failure to prosecute.

In September 1990, an IRS offset notice was sent to Bloom notifying him of the Public Health Service's intent to have the IRS offset his income tax refund against his NHSC scholarship debt. The letter incorrectly listed the amount past due as $27,200.70. Bloom telephoned Elvis Davis, Chief of the Accounts Receivable Section of the Health Resources and Services Administration, to verify the amount due. On that date, Davis responded in a letter with instructions for requesting a Repayment Agreement and the deadline for requesting such an agreement. On that same day, Bloom wrote a letter confirming this conversation and requesting a "re-payment schedule." A written repayment agreement was never executed or prepared.

Bloom then made voluntary payments totaling $15,500 toward his NHSC scholarship debt. Bloom twice submitted checks designated "final payment," but these checks were not cashed. In addition, Bloom's 1990 federal income tax refund of $2,868.56 was offset and credited toward his scholarship debt. The Public Health Service calculated his total remaining debt to be $480,191.59.

The United States, for the Department of Health and Human Services, sued Bloom on May 11, 1995 to recover statutory damages due to his default on his NHSC scholarship obligation. The suit sought a principal amount of $152,579.47, plus interest of $345,410.79. On August 18, 1995, Bloom filed a motion to dismiss based upon the statute of limitations. The district court agreed with the United States that the complaint was timely filed and denied the motion to dismiss.

Bloom did not file an answer, but instead filed a counterclaim setting forth numerous defenses and seeking $1.5 million in damages on...

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