Bailey v. Navient Sols. (In re Bailey)
| Decision Date | 22 September 2021 |
| Docket Number | 19-15531-ABA,Adv. 19-1159-ABA |
| Parties | In Re: Shyron Vernice Bailey, v. Navient Solutions, LLC, Defendant. Shyron Vernice Bailey, Plaintiff, |
| Court | U.S. Bankruptcy Court — District of New Jersey |
NOT FOR PUBLICATION
Chapter 7
Plaintiff Shyron Vernice Bailey ("Ms. Bailey"), commenced this adversary proceeding against Navient Solutions, LLC ("Navient") seeking to discharge her student loan debt under section 523(a)(8) of the Bankruptcy Code. After a trial, the court entered a Memorandum Decision that held that under the required test applied in the Third Circuit, Ms Bailey did not qualify for a student loan discharge. Ms Bailey then filed a Motion to Reopen and a Motion to Reconsider. For the reasons stated herein, the Motion to Reopen must be denied.
This matter before the court is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(I), and the court has jurisdiction pursuant to 28 U.S.C. § 1334, 28 U.S.C. § 157(a) and the Standing Order of Reference issued by the United States District Court for the District of New Jersey on July 23, 1984, as amended on September 18, 2012, referring all bankruptcy cases to the bankruptcy court. The following constitutes this court's findings of fact and conclusions of law as required by Federal Rule of Bankruptcy Procedure 7052.
Ms Bailey filed a no asset chapter 7 bankruptcy case on March 19, 2019. She obtained a discharge on June 28, 2019, and the case was closed on July 11, 2019.
On April 3, 2019, Ms. Bailey commenced an adversary proceeding against Navient seeking to discharge her student loan debt under section 523(a)(8) of the Bankruptcy Code. The court held a trial at which both parties participated and submitted evidence. No experts testified and no expert reports were submitted. Ms. Bailey produced no witnesses other than herself. At the close of trial, the court permitted the parties to submit post-trial briefs-which Ms. Bailey did, albeit untimely, and with 65 pages of documents not presented at trial (the "New Evidence") (Doc. No. 46).
On June 30, 2021, the court issued its written Memorandum Decision (Doc. No. 44) finding that under Third Circuit precedent applying the Brunner test, Ms. Bailey could not discharge her student loans. Judgment was entered consistent with the Memorandum Decision the same day (Doc. No. 45) ("Judgment"). No appeal or motion to alter or amend the Judgment under Fed.R.Bankr.P. 9023 was filed, and the adversary proceeding was closed on July 16, 2021.
Nevertheless, on July 19, 2021, Ms. Bailey filed a Motion to Reopen and a Motion to Reconsider the Judgment (the "Motion") (Doc. No. 49). A hearing on the Motion was scheduled for August 24, 2021. On August 13, 2021, Navient filed a Response to the Motion (Doc. No. 52). Ms. Bailey then filed an Affidavit in Support of the Motion ("Affidavit") on August 20, 2021 (Doc. No. 56). As a result of that submission, a steadfast deadline of September 7, 2021 for any and all final submissions was set. Navient submitted a response on August 30, 2021 (Doc. No. 58) and Ms. Bailey submitted a certification (the "Certification") on September 7, 2021 (Doc. No. 59). The parties waived oral argument and asked that the matter be decided on the papers (Doc. No. 54).
With all submissions in, the matter is now ripe for disposition.
The New Evidence included a one-page summary describing lumbar laminectomy surgery with no specific reference to any patient, a recurring payment confirmation letter to Sallie Mae, bank statements and checks from Wells Fargo and Police and Fire Federal Credit Union from 2015-2019, and what appears to be Ms. Bailey's account history with Navient from 2006-2019 (Doc. No. 46). The remainder related to the third prong of the Brunner test, a prong which the court found was satisfied by Ms. Bailey.
In both the Affidavit and Certification, Ms. Bailey asserted new facts and attached documents not presented and/or available at trial (the "Additional New Evidence"). In the Affidavit, Ms. Bailey stated that her husband had Achilles surgery on June 1, 2021 and was scheduled to have lumbar laminectomy surgery on August 10, 2021, but that he was admitted to the hospital on July 21, 2021 due to an infection on his Achilles incision (Doc. No. 56, p. 1-2). She stated that he had to have two emergency surgeries, that home care nurses come to their house a few times a week, and they have a standing doctor's appointment with a plastic surgeon every Wednesday. Id. She included that she had missed several days at work and has had to use Family Medical Leave Act time. She stated that she and her husband were informed at an August 18, 2021 appointment that Mr. Bailey is not healing, requiring a more invasive surgery and physical therapy before the lumbar laminectomy will be scheduled. Id. Ms. Bailey also submitted an After Visit Summary for Mr. Bailey that included a handwritten note that the patient's length of stay was July 21-28, 2021 (Doc. No. 56-1, p. 1). This summary also included information about the admission, a list of providers during the treatment, and discharge instructions. Id., pp. 2-3. Ms. Bailey also submitted what appeared to be an email referencing but not attaching her consecutive and intermittent Family Leave approval letters. Id., p. 4. The rest of the submission included what appears to be medical photos of a person's leg but did not include information about who these photos are of (Doc. No. 56-2, pp. 1-4). The court presumes it to belong to Mr. Bailey given the information included in Ms. Bailey's affidavit, but there is no name listed on the photos or any additional information.
In the Certification, Ms. Bailey also stated that her husband has several medical challenges including an upcoming surgery on his Achilles and then on to his lumbar laminectomy. She also requested that "if a complete discharge is not affirmed, that Your Honor, please consider under the statute, Saxman 325 F.3d at 1175, grant a discharge of the interest and fees associated with this loan." (Doc. No. 59, p. 1 ¶ 2.) Ms. Bailey also included a letter from a Dr. Hamid Abdollahi excusing Mr. Bailey from something[1] in connection with her husband's undergoing a surgical wound prep and debridement of left posterior calf and ankle.
Under 11 U.S.C. § 350(b), a bankruptcy court may reopen a closed case to administer assets, to accord relief to the debtor, or for other cause. In re Holley Performance Prod., Inc., No. 09-13333 (KJC), 2015 WL 4638024, at *1 (Bankr. D. Del. July 31, 2015). A bankruptcy court has broad discretion in determining whether to reopen a case. In re Zinchiak, 406 F.3d 214, 223 (3d Cir. 2005); In re Levy, 256 B.R. 563, 565-66 (Bankr. D.N.J. 2000). In addition, it may consider the merits of the issue sought to be resolved upon reopening to determine whether reopening would be futile. See, e.g., In re Parque San Patricio, Inc., 2004 WL 601729, at *7 (1st Cir. B.A.P. Mar. 14, 2004). Factors for a court to consider, relevant here, include the length of time the case has been closed; whether any parties would be prejudiced were the case reopened or not reopened; the extent of the benefit the debtor seeks to achieve by reopening; and whether it is clear at the outset that the debtor would not be entitled to any relief if the case were reopened (i.e., whether reopening the case would be futile). In re Holley Performance, 2015 WL 4638024, at *2. Accordingly, to determine whether to grant the Motion to Reopen, the court will consider whether Ms. Bailey's Motion for Reconsideration has any merit.
For the sake of brevity, the court's Memorandum Decision, [2] dated June 30, 2021, is incorporated herein as if set forth in full. There, the court concluded that while Ms. Bailey satisfied the first and third prongs of the test for dischargeability set forth in Brunner v. New York State Higher Educ. Servs. Corp., 831 F.2d 395 (2d Cir. 1987), [3] she had not proved that her husband's medical conditions were likely to persist for a significant portion of the repayment period of the student loans, as needed to satisfy Brunner's second prong. See id., 396. Because all three prongs of that test must be satisfied, Ms. Bailey's failure to satisfy the second prong required a finding by the court that the debt to Navient is nondischargeable.
Ms. Bailey seeks reconsideration "on the grounds of it being abundantly clear that the court had not read the additional submissions that were submitted" Doc. No. 49, p. 1, ¶ 1. Since the court ruled in her favor as to the first and third prongs of the Brunner test, the court assumes Ms. Bailey is seeking reconsideration of only that portion of its decision as to the second prong of the test.
A motion for reconsideration is not expressly recognized in the Federal Rules of Civil Procedure. See e.g., In re Drumm, 329 B.R. 23, 30 (Bankr. W.D Pa. 2005) (citing In re Hogan, 79 Fed.Appx. 846 (6th Cir. 2003)). A motion to reconsider is generally considered under Fed.R.Civ.P. 59(e) or Fed.R.Civ.P. 60(b) (). When a reconsideration motion is filed within fourteen (14) days of the judgment, it may be treated as a motion to alter or amend a judgment under Fed.R.Civ.P. 59(e). (See Fed. R. Bankr. P. 9023). Otherwise, a reconsideration motion may treated as being one seeking relief pursuant to Fed.R.Civ.P. 60(b). (See Fed. R. Bankr. P. 9024). While both rules serve a similar function, each has a separate purpose. See U.S. v. Fiorelli, 337 F.3d 282, 288 (3d Cir. 2003); Benson v. Giant Food Stores, LLC, C. A. No. 09-cv-3194, 2011 WL 722256 (E.D. Pa. Feb. 28, 2011). Where the...
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