Conrad v. The Educ. Resources Institute

• Decision Date: 13 August 2009
• Docket Number: Civil Action No. 08-cv-01393-WYD-KMT.
• Citation: 652 F.Supp.2d 1172
• Parties: Michael Paul CONRAD, Plaintiff, v. THE EDUCATION RESOURCES INSTITUTE, a Massachusetts corporation; and Key Bank, N.A., f/k/a Society Bank, f/k/a Ameritrust National Association, an Ohio corporation, Defendants.
• Court: U.S. District Court — District of Colorado

652 F.Supp.2d 1172

Michael Paul CONRAD, Plaintiff, v. THE EDUCATION RESOURCES INSTITUTE, a Massachusetts corporation; and Key Bank, N.A., f/k/a Society Bank, f/k/a Ameritrust National Association, an Ohio corporation, Defendants.

Civil Action No. 08-cv-01393-WYD-KMT.

United States District Court, D. Colorado.

August 13, 2009.

COPYRIGHT MATERIAL OMITTED

Alexis L. Shapiro, Goodwin Procter, LLP, Boston, MA, for The Education Resources Institute.

Carolyn J. Fairless, Jessica Goneau Simbalenko, Wheeler Trigg O'Donnell, LLP, Denver, CO, Courtney Q. Brooks, W. Scott O'Connell, Nixon Peabody, LLP, Manchester, NH, for Defendants.

ORDER AFFIRMING AND ADOPTING RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

WILEY Y. DANIEL, Chief Judge.

I. INTRODUCTION

This matter is before the Court on Defendant KeyBank National Association's Motion to Dismiss Plaintiff's Complaint (Doc. # 18 filed November 24, 2008) [hereinafter referred to as "KeyBank's Motion to Dismiss"]. This motion was referred to Magistrate Judge Tafoya for a recommendation by Order of Reference dated July 18, 2008, and Memorandum of November 24, 2008.

Magistrate Judge Tafoya issued a Recommendation on June 30, 2009, which is incorporated herein by reference. See 28 U.S.C. § 636(b)(1), Fed.R.Civ.P. 72(b), D.C.COLO.LCivR. 72.1. Magistrate Judge Tafoya recommends therein that KeyBank's Motion to Dismiss be granted. (Recommendation at 1183.) On July 23, 2009, Plaintiff filed a timely Objection after having been granted an extension of time to file same. A response to the Objection was filed on July 30, 2009. Plaintiff's Objection necessitates a de novo determination as to those specified proposed findings or recommendations to which objection is made since the nature of the matter is dispositive. Fed.R.Civ.P. 72(b); 28 U.S.C. § 636(b)(1).

II. BACKGROUND

As noted in the Recommendation, this case involves claims for violations of the Colorado Fair Debt Collection Practices Act as well as common law claims of fraud, negligent misrepresentation, abuse of process, defamation, intentional infliction of emotional distress, intentional interference with contractual obligations, breach of contract, malicious prosecution, and conversion. (Recommendation at 1178.) Plaintiff is proceeding pro se. The claims relate to student loans that Plaintiff obtained in the amounts of $13,500 and $3,500 respectively for which Plaintiff executed Promissory Notes in favor of Ameritrust Company National Association (succeeded in interest by KeyBank). (Id. at 1175.)

The Recommendation outlines the history of this case, including efforts to attempt to collect the amounts due from Plaintiff under the loans by The Education Resources Institute ("TERI"). TERI purchased the loans from KeyBank in August 1993, apparently under the terms of a guarantee agreement. A Stipulation was allegedly entered into in December 1998 between Plaintiff and TERI regarding the student loans and court costs. Beginning in May 2000, Plaintiff asserts that he attempted to consolidate his student loans and that TERI's attorney did not send financial records necessary for the consolidation.

Plaintiff alleges ethical violations by TERI's attorney that appear to have nothing to do with KeyBank. Plaintiff further alleges his alleged discoveries of "fraud in the Stipulation" regarding the balance initially represented to be owed by the Plaintiff under the Stipulation. Plaintiff also details the history of the judgment entered against him by TERI for his default on the Stipulation, the garnishment of his bank accounts by Defendants, alleged ethical violations related to the garnishments, and "bank/lending fraud".

Defendant TERI was served on October 3, 2008 (Doc. No. 10). On April 10, 2009, TERI filed a Suggestion of Bankruptcy pursuant to 11 U.S.C. § 101 and in accordance with 11 U.S.C. § 4. (Recommendation at 1179-80.) The case against TERI was stayed by Order filed July 30, 2009 pursuant to title 11 of the United States Code, 11 U.S.C. § 101 et. seq., and in accordance with 11 U.S.C. § 362, the automatic stay provision.

Defendant KeyBank moves to dismiss Plaintiff's Complaint on the bases that (1) Plaintiff does not assert any claims against KeyBank; (2) Plaintiff fails to specifically assert claims against Defendants in a manner sufficient to provide KeyBank fair notice of Plaintiff's claims; (3) the Complaint fails to plead fraud with particularity; (4) the Colorado Fair Debt Collection Practices Act does not apply to original lenders such as KeyBank; and (5) Plaintiff's claims are barred by the statute of limitations. (Recommendation at 1180.) As noted above, Magistrate Judge Tafoya finds that the motion should be granted.

More specifically, Magistrate Judge Tafoya first finds that the Complaint should be dismissed against KeyBank for Plaintiff's failure to comply with Fed.R.Civ.P. 8(a). (Recommendation at 1181.) She notes that Plaintiff references KeyBank and its predecessors Ameritrust National Association and Society Bank (also referred to as the "original lender") seven times in his sixty-five-page Complaint. (Id. at 1182.) She finds these allegations to be "insufficient under Rule 8(a) as they are, at the very least, unspecific." (Id.) "Plaintiff has failed to explain what KeyBank did to him; when KeyBank did it; how KeyBank did it; how the KeyBank's action harmed him; and, what specific legal right the plaintiff believes KeyBank violated." (Id.) In other words, she finds that Plaintiff failed to plead facts which would allow the court to draw the reasonable inference that KeyBank is liable for the misconduct alleged. (Id. at 1182.) Accordingly, Magistrate Judge Tafoya concludes that Plaintiff's claims against KeyBank are properly dismissed for failure to state a claim upon which relief can be granted. (Id.)

Magistrate Judge Tafoya also finds that Plaintiff's fraud claims do not specifically identify any defendants who may have committed fraud sufficient to satisfy Rule 9. (Recommendation at 1183.) "Plaintiff's conclusory allegations that "Defendant" or "Defendants" committed fraud is insufficient." (Id.) Accordingly, the Recommendation concludes that Counts 1 through 3 and 47 asserted as claims for fraud are properly dismissed for failure to state a claim upon which relief can be granted. (Id.)

Finally, Magistrate Judge Tafoya finds that all the claims in the case are barred by the statute of limitations. Specifically, she finds as to the claims under the Colorado Fair Debt Collection Practices Act ["CFDCPA"] that Plaintiff fails to allege any conduct related to these claims that took place later than September 2002. (Recommendation at 1183-84.) Accordingly, she finds that Plaintiff's CFDCPA claims, which are governed by a one year statute of limitations, are barred by the statute of limitations. (Id. at 1183-84.)

As to the fraud claims, which are governed by a three year statute of limitations, Magistrate Judge Tafoya finds that these claims should be dismissed because Plaintiff did not alleged any fraudulent conduct that took place beyond January 6, 2003, the date he admits he discovered the alleged fraud. (Recommendation at 1184-86.) She further finds that Plaintiff's equitable tolling argument should be rejected because "Plaintiff has alleged no wrongful conduct committed by any defendant which may have prevented him from timely filing his fraud claims against them." (Id. at 1184.)

Similar findings were made as to the tort and contract claims, governed by a two and three year statute of limitations, respectively. (Recommendation at 1184-86.) Magistrate Judge Tafoya finds that these claims accrued at the very latest in January or June 2003 and are thus time barred. (Id. at 1185-86.) As to the defamation/libel claim, governed by a one year statute of limitations, the Recommendation finds that the claim expired at the latest in August 2002 and is also time barred. (Id. at 1186.) Finally, the Recommendation finds that because all of the underlying claims for damages are barred by the Colorado statutes of limitations, Plaintiff's outrageous conduct and exemplary damages claim are barred as well. (Id. at 1187.)

"Plaintiff's Responsive Objection to Magistrate Tafoya's Recommendation" [hereinafter "Objection"] was filed on July 23, 2009. As to the statute of limitations, Plaintiff appears to address only the fraud claim. Accordingly, he has waived his right to seek de novo review of the other claims that Magistrate Judge Tafoya found were barred. As to those claims, I find no error in connection with the findings in the Recommendation and affirm the dismissal of those claims on the grounds that they are barred by the statute of limitations.

As to the fraud claim, Plaintiff argues that to the extent the Recommendation states that Plaintiff knew of the fraud in January 2003, "any knowledge was not absolute." (Objection at 1.) He states that after he discovered the "Montana State/Washington University" notations in January 2003, which the Recommendation found commenced the running of the statute of limitations, it took time for Plaintiff to investigate the fraud and build a proper case. (Id. at 2.) He further asserts, among other things, that he was overly diligent and prudent in attempting to resolve this matter without the need for litigation, that there was concealment and non-disclosure of the truth, that the wrongs by Defendants continued through April 2009 when information requested by Plaintiff was finally disclosed, and that KeyBank was given fair notice as early as May 2005 of lending fraud. (Objection at. 3-5, 11.)

I find that these arguments do not toll the statute of limitations or provide a basis to overturn the findings in the Recommendation. As Magistrate Judge Tafoya noted, Plaintiff has not and cannot dispute the fact that he alleges in the Complaint that he discovered the alleged fraud in the stipulation no later than at a hearing on January 6, 2003. (Comp. at 4, 26-30, 33.) He...