Davis v. Conduent (In re Davis)
| Decision Date | 05 December 2019 |
| Docket Number | Case No. 18bk04521,Adversary No. 18ap00185 |
| Citation | 608 B.R. 693 |
| Parties | IN RE: Jeffrey Michael DAVIS, Debtor. Jeffrey Michael Davis, Plaintiff, v. Conduent, National Student Loan Program, Conduit, Amer[ican] St[u]d[e]nt Ass[is]t[a]nce, AccessLex Institute d/b/a Access Group[ ] Inc[.], Dept of ED/Fedloan Servicing (PHEAA), US Dept of Education, AES/PHEAA, Citibank (New York State) SLC, US Bank ELT Graduate Leverage, Brazos Loan Servicing, PNC Bank, Defendants. |
| Court | U.S. Bankruptcy Court — Northern District of Illinois |
Attorney for Jeffrey Michael Davis: Erich G. Monzon, The Law Office of Erich G. Monzon, Northfield, IL
Attorney for the United States Department of Education: David H. DeCelles, United States Attorney's Office, Chicago, IL
Attorney for AccessLex Institute d/b/a Access Group: Monette W. Cope, Weltman, Weinberg & Reis Co., L.P.A., Chicago, IL
Attorney for Educational Credit Management Corporation: Saskia Nora Bryan, Latimer LeVay Fyock LLC, Chicago, IL
Before the court is the Second Amended Adversary Complaint to Determine the Dischargeability of Certain Debts [Adv. Dkt. No. 47]2 (the "Complaint"), filed by the plaintiff-debtor, Jeffrey Michael Davis (the "Plaintiff"), seeking a determination that his outstanding student loan obligations to multiple entities, including the United States Department of Education (the "Department of Education"), Educational Credit Management Corporation ("ECMC")3 and AccessLex Institute d/b/a Access Group ("Access" and collectively with the Department of Education and ECMC, the "Answering Defendants")4 are dischargeable under section 523(a)(8) of title 11 of the United States Code, 11 U.S.C. § 101, et seq. (the "Bankruptcy Code"). For the reasons stated herein, the Plaintiff failed to meet his burden to demonstrate that the repayment of his student loan debt would constitute an undue hardship under section 523(a)(8). Accordingly, the court, finding no just reason for delay, declines the Plaintiff's request to include his student loan obligations to the Answering Defendants in his discharge.
The federal district courts have "original and exclusive jurisdiction" of all cases under the Bankruptcy Code. 28 U.S.C. § 1334(a). The federal district courts also have "original but not exclusive jurisdiction" of all civil proceedings arising under the Bankruptcy Code or arising in or related to cases under the Bankruptcy Code. 28 U.S.C. § 1334(b). District courts may, however, refer these cases to the bankruptcy judges for their districts. 28 U.S.C. § 157(a). In accordance with section 157(a), the District Court for the Northern District of Illinois has referred all of its bankruptcy cases to the Bankruptcy Court for the Northern District of Illinois. N.D. Ill. Internal Operating Procedure 15(a).
A bankruptcy judge to whom a case has been referred may enter final judgment on any core proceeding arising under the Bankruptcy Code or arising in a case under the Bankruptcy Code. 28 U.S.C. § 157(b)(1). Bankruptcy judges must therefore determine, on motion or sua sponte , whether a proceeding is a core proceeding or is otherwise related to a case under the Bankruptcy Code. 28 U.S.C. § 157(b)(3). As to the former, the bankruptcy judge may hear and determine such matters. 28 U.S.C. § 157(b)(1). As to the latter, the bankruptcy judge may hear the matters, but may not decide them without the consent of the parties. 28 U.S.C. §§ 157(b)(1), (c). Instead, the bankruptcy judge must "submit proposed findings of fact and conclusions of law to the district court, and any final order or judgment shall be entered by the district judge after considering the bankruptcy judge's proposed findings and conclusions and after reviewing de novo those matters to which any party has timely and specifically objected." 28 U.S.C. § 157(c)(1).
In addition to the foregoing considerations, the bankruptcy judge must also have constitutional authority to hear and determine a matter. Stern v. Marshall, 564 U.S. 462, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011). Constitutional authority exists when a matter originates under the Bankruptcy Code or, in noncore matters, where the matter is either one that falls within the public rights exception, id. , or where the parties have consented, either expressly or impliedly, to the bankruptcy judge hearing and determining the matter. See Wellness Int'l Network, Ltd. v. Sharif , ––– U.S. ––––, 135 S. Ct. 1932, 1939, 191 L.Ed.2d 911 (2015) (); Richer v. Morehead , 798 F.3d 487, 490 (7th Cir. 2015) ().
The Complaint is based on section 523(a)(8) of the Bankruptcy Code, which provides an exception to discharge for student loan obligations subject to a showing of undue hardship by the debtor. 11 U.S.C. § 523(a)(8). This adversary proceeding, concerning the dischargeability of a particular debt, is therefore expressly a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(I). Further, in accordance with Stern , 564 U.S. at 499, 131 S.Ct. 2594, the bankruptcy court has constitutional authority to decide matters of nondischargeability, as the debtor's discharge and the dischargeability of a particular debt necessarily stem from the bankruptcy itself. Parkway Bank & Tr. v. Casali (In re Casali ), 526 B.R. 271, 274 (Bankr. N.D. Ill. 2015) (Schmetterer, J.) (); see also Bd. of Educ. of City of Chi. v. Monarrez (In re Monarrez ), 588 B.R. 838, 845 (Bankr. N.D. Ill. 2018) (Barnes, J.). Each of the parties has also, in the Joint Pretrial Statement [Adv. Dkt. No. 66] (the "Joint Pretrial Statement"), expressly consented to the bankruptcy court's jurisdiction in this matter. See Joint Pretrial Stmt., at p. 2, ¶ 1.
As a result, the court has jurisdiction, statutory authority and constitutional authority to hear and enter final judgment on this matter.
The court has considered the evidence and arguments presented by the parties at the trial, which took place in this court on September 10, 2019 (the "Trial"), has reviewed the transcript of the Trial, dated September 10, 2019 [Adv. Dkt. No. 71] ("Tr."),5 has reviewed the Complaint and has reviewed each of the following:
The court has also considered the procedural history and previous court filings in the Main Case, including:
The court has also taken into consideration all exhibits submitted with or in conjunction with the above and, as the above is not an exhaustive list of the filings submitted in this adversary proceeding, the court has taken judicial notice of the contents of the dockets in this matter. See Levine v. Egidi , Case No. 93C188, 1993 WL 69146, at *2 (N.D. Ill. Mar. 8, 1993) (); In re Brent , 458 B.R. 444, 455 n.5 (Bankr. N.D. Ill. 2011) (Goldgar, J.) (recognizing same).
The Pretrial Order entered in this matter required the parties to file a pretrial statement with a list of witnesses and a list of exhibits that such party planned to offer into evidence at the Trial. Pretrial Order, at p. 1. The Pretrial Order also allowed each party to file objections to an opposing party's pretrial statement, with such objections, if any, to include objections to the opposing party's witnesses and exhibits in lieu of any motion in limine that the party wished to bring. Id. at pp. 1–2. The Pretrial Order stated that all exhibits to which no objections were raised in the pretrial statements would be admitted into evidence. Id. at p. 2 Under the express terms of the Pretrial Order, the failure to file an objection would result in the waiver of any pretrial or evidentiary objections that could have been raised by such deadline. Id. at pp. 1–2.
The Answering Defendants objected to Plaintiff's Exhibit Nos. 1 and 5 in the Joint Pretrial Statement. Joint Pretrial Stmt., at p. 6. These objections are moot, however, as neither party used or otherwise referenced these exhibits at the Trial and therefore, their relevance has not been demonstrated.
As such, Plaintiff's Exhibit Nos. 1 and 5 are therefore afforded no weight and are not discussed in this Memorandum Decision.6
From the above review and the consideration of the procedural background, as well as of the evidence presented at the Trial, the court determines the salient facts to be and so finds as follows:
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