Hicks v. Harris, No. 77-2593
| Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
| Writing for the Court | Before GODBOLD, GEE and RUBIN; GEE |
| Citation | 606 F.2d 65 |
| Parties | Robert E. HICKS, as Trustee of North American Acceptance Corporation, Plaintiff-Appellant, v. Patricia Roberts HARRIS, Secretary of Health, Education and Welfare, and Dr. Ernest L. Boyer, U. S. Commissioner of Education, Defendants-Appellees. |
| Docket Number | No. 77-2593 |
| Decision Date | 05 November 1979 |
Page 65
Corporation, Plaintiff-Appellant,
v.
Patricia Roberts HARRIS, Secretary of Health, Education and
Welfare, and Dr. Ernest L. Boyer, U. S.
Commissioner of Education, Defendants-Appellees.
Fifth Circuit.
Page 66
Maurice N. Maloof, Robert E. Tritt, Atlanta, Ga., for plaintiff-appellant.
William L. Harper, U. S. Atty., Robert J. Castellani, First Asst. U. S. Atty., Atlanta, Ga., Steven J. Edelstein, ARA, Dept. of H. E. W., Atlanta, Ga., for defendants-appellees.
Appeal from the United States District Court for the Northern District of Georgia.
Before GODBOLD, GEE and RUBIN, Circuit Judges.
GEE, Circuit Judge:
This action was instituted by Robert E. Hicks, as Trustee of North American Acceptance Corporation (NAAC), to seek government repayment of defaulted student loans. NAAC is a financial institution that made loans to students as an eligible lender in the Federally Insured Student Loan Program of the United States Office of Education, Department of Health, Education and Welfare. Under this program, the federal government insures the repayment of student loans that conform to the Higher Education Act of 1965, Title IV, Part B, as amended, §§ 1001-1145 (1968), 20 U.S.C. §§ 1071-1085, and relevant regulations. The dispute in the present case arose when the government rejected 95 of NAAC's claims for government repayment of defaulted student loans on the ground that NAAC disbursed the loan funds before it had received a certificate of insurance for each loan from the Commissioner of Education (the Commissioner) and that NAAC thereby had failed to conform to the statute and relevant regulations.
It is uncontested that NAAC disbursed the student loans after it entered into a "Contract of Insurance" with the Commissioner but before loan applications were individually stamped "approved" by the government. In the district court, NAAC contended that the government waived its requirement that the lender not disburse loan funds before receiving an "issuance of insurance" because subordinate employees of the Office of Guaranteed Student Loans stamped the loan applications for approval after the beginning of the school term for which the funds were to be provided 1 and allegedly made statements approving NAAC's practice of disbursing loan money prior to the stamping of the loans. The loan company claimed, in the alternative,
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that even if the requirement that the lender receive a certificate of insurance before disbursing funds did apply to the 95 disallowed loans, it had complied with the government regulations because the "Contract of Insurance" caused the insurance to be issued retroactive to the date of fund disbursement for each loan.The district court dismissed NAAC's claims for loan repayment by granting the government's motion for summary judgment. Although we believe that the government in this case has not turned square corners in its business dealings with its citizens, 2 we reluctantly find that the applicable law controlling the use of waiver and estoppel against the government compels us to affirm.
Government regulation 45 C.F.R. § 177.42(b), promulgated pursuant to the Higher Education Act of 1965, establishes procedures by which the Commissioner of Education insures student loans. It provides in relevant part that:
Each eligible lender with which the Commissioner has entered into an agreement . . . (under the program) may make application to the Commissioner for Federal loan insurance in connection with each application for a loan which the lender has initially determined to be eligible for such insurance coverage. Upon receipt of such application . . . the Commissioner shall determine whether or not the loan is insurable, and if the loan is determined to be insurable, the Commissioner shall, by affixing to the application evidence thereof, advise the lender that the loan is insurable and the amount of insurance. The insurance shall extend to all disbursements made pursuant to the loan, Except that, unless expressly provided for, no disbursements made on a loan prior to the issuance of insurance shall be covered.
(emphasis added). NAAC's contention that the government waived the requirement of issuance of insurance before loan disbursement, set forth in 45 C.F.R. § 177.42(b), cannot be accepted. It is true that the Higher Education Act of 1965 authorizes the Commissioner to "enforce, pay, compromise, Waive, or release any right . . . ." 20 U.S.C. § 1082(a)(6) (emphasis added). However, none of the persons to whom NAAC seeks to attribute the waiver of the applicable government regulation were empowered to waive or make an express exception to the regulatory provisions of the Federally Insured Student Loan Program, including 45 C.F.R. § 177.42(b).
Federal regulation prohibits any official, agent or employee of the Office of Education from waiving or altering any provision of the office's regulations or of any relevant statute except through amendment by publication in the Federal Register, and specifies that "no action or failure to act on the part of such official, agent, or employee shall operate in derogation of the Commissioner's right to enforcement of said provisions in accordance with their terms." 45 C.F.R. § 100a.483. In addition, the uncontroverted 3 affidavits of the student loan
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program's chief administrative officer, Acting Associate Commissioner of Education Edwin P. Parker, III, and his predecessor in office, Associate Commissioner Kenneth A. Kohl, state that the authority to waive or make an express exception to the program's regulatory provisions was never delegated to subordinate employees below the associate commissioner level and, specifically, was never delegated to the employees named by NAAC as having made statements to it approving its practice of disbursing student loan money prior to having the loans stamped. Therefore, even if government employees purported to waive the requirements for obtaining federal student loan insurance, either by express statements or by stamping the loans "approved," they were acting outside the bounds of their authority and...To continue reading
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Portmann v. U.S., No. 81-1390
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BISCAYNE FED. SAV. & L. v. Fed. Home Loan Bank Bd., No. 83-815-CIV-EPS.
...the Government from acting in its sovereign manner. See Deltona Corporation v. Alexander, 682 F.2d 888 (11th Cir.1982); Hicks v. Harris, 606 F.2d 65 (5th Cir.1979); United States v. Florida, 482 F.2d 205 (5th Cir.1973).32 The Eleventh Circuit has acknowledged that the Ninth Circuit has esto......
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FDIC v. Niblo, Civ. A. No. 1:92-CV-107-C
...41 Mangaroo v. Nelson, 864 F.2d 1202, 1204-5 (5th Cir.1989). 42 See Heckler, 467 U.S. at 65, 104 S.Ct. at 2226-27. 43 Hicks v. Harris, 606 F.2d 65, 68 (5th Cir. 44 FED.R.CIV.P. 8(c). See Ingraham v. United States, 808 F.2d 1075, 1078 (5th Cir.1987). 45 FDIC v. Wheat, 970 F.2d 124, 132 (5th ......
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Portmann v. U.S., No. 81-1390
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BISCAYNE FED. SAV. & L. v. Fed. Home Loan Bank Bd., No. 83-815-CIV-EPS.
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