Florance v. Barnett

• Decision Date: 08 February 2023
• Docket Number: 3:22-CV-399 JD
• Parties: CHARLES W. FLORANCE III, Plaintiff, v. CAROL C. BARNETT, et al., Defendants.
• Court: U.S. District Court — Northern District of Indiana

CHARLES W. FLORANCE III, Plaintiff,
v.
CAROL C. BARNETT, et al., Defendants.

No. 3:22-CV-399 JD

United States District Court, N.D. Indiana, South Bend Division

February 8, 2023

OPINION AND ORDER

JON E. DEGUILIO CHIEF JUDGE

This case arises out of pro se plaintiff Charles Florance's ultimately successful attempts to have his student loans forgiven. Mr. Florance took out a Primary Care Loan (“PCL loan”) for medical school under a federal program offered through the Department of Health and Human Services (“HHS”)^[1]. Mr. Florance defaulted on the debt, and his medical school, Indiana University (“IU”), filed suit to collect the debt in 2019. In 2021, Mr. Florance sent IU a letter requesting cancelation of the debt under 42 U.S.C. 292r(d), which provides for cancelation of the loan if the borrower is permanently and totally disabled. IU did not submit a discretionary recommendation that Mr. Florance's loan be canceled because the school administrators did not think Mr. Florance met the qualifications for total and permanent disability under the statute. HHS initially denied Mr. Florance's forgiveness request. Mr. Florance contacted a number of parties and, within a year, HHS informed IU that it had reversed its decision and instructed IU to cancel the loan. IU canceled the loan and dismissed its collections case against Mr. Florance.

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Nevertheless, Mr. Florance sued four administrators at IU and two of IU's external attorneys, claiming that they engaged in a conspiracy to deprive him of his constitutional due process rights, in violation of § 1983 and § 1985. A prior defendant, an employee of HHS, was dismissed pursuant to a stipulation. (DE 32.) The attorney defendants moved to dismiss (DE 10) and the IU defendants soon followed (DE 22). The Court now GRANTS both motions to dismiss with prejudice, finding Mr. Florance has not stated a claim for relief against any defendant.

A. Facts

The following facts are pulled from Mr. Florance's allegations, except where supplemented or contradicted by exhibits as noted by citations to the record. In the fall of 2016, Mr. Florance attended Indiana University School of Medicine. While a student, he received a Primary Care Loan for $20,000 under a federal program pursuant to the Public Health Services Act and offered through the Department of Health and Human Services. He withdrew in the following spring. In 2016, Mr. Florance pursued an unrelated determination of permanent and total disability from the Veteran's Administration (DE 1-1 at 1.) Several years elapsed, and on April 22, 2019, IU sued to collect the debt. (DE 10-1 at 2.) Again, several years elapsed. The litigation remained pending, and IU twice moved to stay proceedings, (DE 10-1 at 4, 7.) On May 12, 2021, two years after being sued, Mr. Florance informed IU that he had recently received a permanent and total rating of disability from the VA and requested that his student loans be forgiven. The next week, Mr. Florance spoke to IU's attorneys and informed them of his cancelation request. The collections litigation remained pending. On September 30, 2021, IU filed a motion for summary judgment in the collections case. The next day, Mr. Florance emailed IU's attorneys and asked them to withdraw the motion. They did not. On October 5, 2021, Mr. Florance contacted HHS to inquire regarding the status of his student loan cancelation. The HHS employee stated HHS had

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not received a cancelation recommendation from the university. On October 15, 2021, IU sent a letter to Mr. Florance stating the information he submitted to IU “is not consistent with what the university understands to be the applicable law,” and so the representative was not in a position to recommend cancelation.

Not contented with this turn of events, on November 10, 2021, Mr. Florance contacted Senator Mike Braun's office and requested assistance with his loan cancelation. A senatorial staffer contacted HHS and received a reply that HHS had not received a recommendation from IU, but HHS would contact IU. Meanwhile, on November 18, 2021, IU filed a motion to stay the collections proceedings, which the court granted on November 23. (DE 10-1 at 12.) On December 9, 2021, HHS requested information from IU, including a recommendation or explanation why no recommendation was offered. On December 17, 2021, IU responded in a letter to HHS explaining that it was not able to recommend Mr. Florance for cancelation because their research indicated he was engaged in gainful employment and thus did not meet the statutory requirements. (DE 23-1 at 1-2.) Meanwhile, the university requested, and was granted, a stay of the collections case pending HHS's review of Mr. Florance's cancelation request. (DE 10-6 at 2.) Presumably taking the university's recommendation into account, on March 17, 2022, HHS denied Mr. Florance's cancelation request, writing that he was ineligible because he was able to engage in substantial gainful activity despite his medical conditions. (DE 10-8 at 6.) IU communicated this determination to Mr. Florance on March 23, 2022. (DE 1-1 at 6.)

Again dissatisfied, Mr. Florance contacted HHS directly one week later and requested a hearing. On March 30, 2022, HHS wrote to IU informing the university that it was rescinding its earlier denial and re-reviewing the case. (DE 1-1 at 7.) IU communicated this information to Mr. Florance. (DE 1-1 at 8.) On May 26, 2022, HHS informed IU that “Mr. Florance meets the

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statutory requirements for discharge of his loan” and recommended cancelation. (DE 10-6 at 2.) IU began the cancelation and moved to dismiss its collections claims on July 5, 2022. (DE 10-6 at 2). The dismissal was granted a week later.

Mr. Florance has brought this action under 42 U.S.C. § 1983 and 1985(2) and (3), alleging the university administrators, their attorneys, and an HHS employee conspired to deny Mr. Florance's student loan forgiveness application because they were motivated by discriminatory animus against the disabled. This discrimination is allegedly evidenced by the university's refusal to forward his requests verbatim in lieu of making their own determinations and recommendation, the attorneys' filing of a motion for summary judgment in the collections action, all parties' failure to respond to all of Mr. Florance's emails, and one attorney's untimely retirement. The defendants have moved to dismiss Mr. Florance's claims, which the Court now grants.

B. Judicial Notice of Certain Documents

In ruling on a motion to dismiss under Rule 12(b)(6), certain documents may be considered without converting the motion to dismiss into a motion for summary judgment. Hecker v. Deere & Co., 556 F.3d 575, 582-83 (7th Cir. 2009). The “court may consider, in addition to the allegations set forth in the complaint itself, documents that are attached to the complaint, documents that are central to the complaint and are referred to in it, and information that is properly subject to judicial notice.” Williamson v. Curran, 714 F.3d 432, 436 (7th Cir. 2013).

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the docket sheet, court's orders, and stipulated partial dismissal-attached by the attorney defendants in docket entry 10, because they are not subject to reasonable dispute. See Orgone Cap. III, LLC v. Daubenspeck, 912 F.3d 1039, 1048 (7th Cir. 2019). A court may properly take judicial notice of matters of public record, including court records. Gen. Elec. Cap. Corp. v. Lease Resol. Corp., 128 F.3d 1074, 1081 (7th Cir. 1997) (“The most frequent use of judicial notice of ascertainable facts is in noticing the contents of court records.”). Judicial notice allows federal “courts to avoid unnecessary proceedings when an undisputed fact in the public record establishes that the plaintiff cannot satisfy the 12(b)(6) standard.” Id. The court records are thus properly noticed.

The Court additionally considers two letters incorporated by reference to Mr. Florance's complaint: they are IU's December 17, 2021, letter to HHS (DE 23-1) and HHS's March 17, 2022, letter to IU (DE 10-8). “[T]he incorporation-by-reference doctrine provides that, if a plaintiff mentions a document in his complaint, the defendant may then submit the document to the court without converting defendant's 12(b)(6) motion to a motion for summary judgment.” Brownmark Films, LLC v. Comedy Partners, 682 F.3d 687, 690 (7th Cir. 2012). Both letters are properly considered because they are referenced in the complaint. See (DE 1 at ¶ 22) (“Ms. Carol Barnett, of Indiana University's Office of General Counsel, submitted a response to HHS on or around December 17, 2021. This response..”); (DE 1 at ¶ 23) (“After receiving Ms. Barnett's response, HHS denied my PCL cancelation request.”). Further, both letters are central to Mr. Florance's claims; his claims arise entirely from his communications with the university and HHS and their ensuing communications with each other. Cf. Wright v. Associated Ins. Companies Inc., 29 F.3d 1244, 1248 (7th Cir. 1994) (considering agreement allegedly giving rise to property interest in § 1983 due process case on motion to dismiss). Completeness also

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instructs their consideration. See L. Offs. of David Freydin, P.C. v. Chamara, 24 F.4th 1122, 1126 n.1 (7th Cir. 2022) (“Just as a plaintiff cannot prevent a court from considering parts of a contract that doom her claim by including in the complaint only the parts of a contract that support her side, a party's selection of part of a chain of communication does not prevent the court from considering the entire chain.”); Fin. Fiduciaries, LLC v. Gannett Co., 46 F.4th 654, 663 (7th Cir. 2022) (“Incorporation-by-reference doctrine prevents a plaintiff from avoiding dismissal by omitting facts or documents that undermine his own case.”). Mr. Florance attached some of his communications with the university regarding his loan to his complaint and has based his claims on the communications (DE 1-1); fairness...