In re Woodcock

• Decision Date: 06 October 2004
• Docket Number: 02-2039.,No. 92-14916-DEC. No. 02-1924-PAC,92-14916-DEC. No. 02-1924-PAC
• Citation: 315 B.R. 487
• Parties: In re Raymond L. WOODCOCK, Debtor. Raymond L. Woodcock, Plaintiff, v. United States of America on behalf of its Agency the Department of Education, Defendant.
• Court: U.S. Bankruptcy Court — Western District of Missouri

315 B.R. 487

In re Raymond L. WOODCOCK, Debtor.

Raymond L. Woodcock, Plaintiff, v. United States of America on behalf of its Agency the Department of Education, Defendant.

No. 92-14916-DEC. Nos. 02-1924-PAC, 02-2039.

United States Bankruptcy Court, W.D. Missouri.

October 6, 2004.

COPYRIGHT MATERIAL OMITTED

Raymond L. Woodcock, pro se.

David DeTar Newbert, Kansas City, MO, Elizabeth A. Weishaupl, for Defendant.

MEMORANDUM OPINION

DENNIS R. DOW, Bankruptcy Judge.

Before the Court is the Motion to Reopen (and related Motion for Summary Judgment) filed by Debtor Raymond L. Woodcock ("Woodcock"), the latest episode in a saga that has lasted for more than a decade regarding the dischargeability of certain student loans taken out by Woodcock to finance his law school education in the 1980s. As detailed below, this litigation ultimately resulted in the entry of final orders determining, under the previous version of 11 U.S.C. § 523(a)(8), that Woodcock's student loans were nondischargeable for the reason that they did not first become due more than seven years prior to the date of the filing of his bankruptcy petition and that repayment of the obligations would not impose an undue hardship. The case was appealed three times to the United States Court of Appeals for the Tenth Circuit and was the subject of two unsuccessful petitions for certiorari to the United States Supreme Court. Now, approximately 10 years after the rendition of the final judgment and order in that adversary proceeding, Woodcock obtained an order reopening his case and seeks relief under Rule 60(b) of the Federal Rules of Civil Procedure incorporated by Rule 9024 of the Federal Rules of Bankruptcy Procedure on various grounds discussed more fully below. This is a core proceeding, pursuant to 28 U.S.C. § 157(b)(2)(I), over which this Court has jurisdiction pursuant to 28 U.S.C. §§ 1334(b), 157(a) and (b)(1). The following constitutes my Findings of Fact and Conclusions of Law in accordance with Rule 52 of the Federal Rules of Civil Procedure made applicable to this proceeding by Rule 7052 of the Federal Rules of Bankruptcy Procedure.¹ For the reasons set forth below, I find that Woodcock has failed to establish cause for granting him relief from the final judgments previously entered determining his student loans to be nondischargeable.

I. FACTUAL BACKGROUND

Woodcock obtained $20,000 in Stafford student loans from Chemical Bank to attend law school at Columbia University. The loans were guaranteed by the New York State Higher Education Services Corporation ("NYSHESC"). There were four loans of $5,000 each, evidenced by four promissory notes executed by Woodcock on September 24, 1979, May 21, 1980, June 16,1981, and April 7,1982.

On April 21, 1992, Woodcock filed a bankruptcy petition under Chapter 7 of the Bankruptcy Code in the District of Colorado. In August 1992, Woodcock brought an adversary proceeding seeking to determine the dischargeability of his student loan debts. In January 1993, the United States Bankruptcy Court for the District of Colorado ruled that Woodcock's student loans were not dischargeable under 11 U.S.C. § 523(a)(8). Woodcock filed a motion for reconsideration which was denied. He then appealed to the United States District Court for the District of Colorado. On February 17, 1994, the district court affirmed the bankruptcy court's determination that the student loan debts were nondischargeable. Woodcock then appealed to the Tenth Circuit Court of Appeals. On January 6, 1995, the Tenth Circuit affirmed the decision of the district court as to the undue hardship determination, but remanded the case to the bankruptcy court for a determination of whether the NYSHESC had suspended the debtor's repayment period, thus affecting discharge under 11 U.S.C. § 523(a)(8)(A). Woodcock then filed a petition for certiorari with the U.S. Supreme Court as to the undue hardship determination. On October 2, 1995, the Supreme Court denied his petition.

On May 17, 1995, Woodcock file a motion in the bankruptcy court for summary judgment as to the suspension issue. The bankruptcy court granted Woodcock's summary judgment motion in part, holding that his fourth loan was made in an amount which exceeded the maximum loan amount and was therefore subject to discharge. The bankruptcy court otherwise denied Woodcock's motion, holding that there were applicable suspensions of repayment on his first three loans so that they did not become due more than seven years pre-petition, and excepted the loans from discharge. Woodcock appealed to the district court again. The district court denied his motion for a change of venue and dismissed the appeal for failure to prosecute. Woodcock appealed this decision to the Tenth Circuit Court of Appeals, which reversed and remanded based on the failure of the district court to state the reasons for dismissal. On September 18, 1997, on remand, the district court affirmed the order of the bankruptcy court denying discharge on the three remaining student loans. Woodcock appealed this decision to the Tenth Circuit and that court, on June 22, 1998, affirmed. Woodcock filed another petition for certiorari, and on January 11, 1999, the Supreme Court denied the petition.

Woodcock did not make payments on his student loan obligations to NYSHEC, and it filed a claim for assignment with the U.S. Department of Education. On June 13, 2001 and July 26, 2001, Woodcock's student loans were assigned to the U.S. Department of Education.

On April 27, 2001, Woodcock filed a motion to reopen the adversary proceeding. On April 5, 2002, he filed a Motion to Discharge Debts to Specific Parties. Since it was now the holder of the student loans, the U.S. Department of Education moved to be substituted as the defendant in the adversary proceeding. On May 20, 2002, the U.S. Bankruptcy Court for the District of Colorado held a hearing on the motions. In a September 18, 2002 order, the bankruptcy court reopened the adversary proceeding, substituted the Department of Education as the defendant and granted Woodcock's motion to transfer venue to the U.S. Bankruptcy Court for the Western District of Missouri. The Colorado bankruptcy court did not however address Woodcock's motion seeking relief from the final order determining that his three student loans were nondischargeable, leaving that motion for this Court to determine.

After transfer of the case, on February 27, 2003, the Department of Education filed a motion to dismiss the reopened adversary proceeding, arguing that principles of res judicata required dismissal². On June 12, 2003, this Court issued an amended order to show cause why the case should not be dismissed for lack of subject matter jurisdiction³. On July 7, 2003, Woodcock filed a response.

On July 28, 2003, this Court entered an order of dismissal, finding that Woodcock's response did not adequately address the jurisdictional question. On August 4, 2003, Woodcock filed a motion to alter or amend the judgment, and requested that the Court allow him to pursue an independent action or seek relief under Rule 60(b). On August 13, 2003, this Court held that it had no jurisdiction and denied Woodcock's motion. Woodcock appealed this Court's July 28 and August 13, 2003 orders to the U.S. Bankruptcy Appellate Panel for the Eighth Circuit. On November 20, 2003, the Eighth Circuit B.AP. determined that this Court does in fact have jurisdiction over the adversary proceeding and all pending motions, and reversed the order of dismissal. Accordingly, this Court will decide all pending motions in this adversary which are: the Motion to Discharge Debts as to Specific Parties; Motion for Determination of Dischargeability; Motion for Reconsideration of Order of Substitution; Motion for Sanctions; Motion for Summary Judgment; Motion to Strike Motion for Summary Judgment; and the Motion to Reopen. All of the motions except for the Motion to Reopen (and Motion for Summary Judgment) are dealt with in orders issued simultaneously with this Memorandum Opinion.

This opinion examines the motion filed by Woodcock on April 23, 2001, in the U.S. Bankruptcy Court for the District of Colorado entitled "Motion to Reopen." (hereinafter referred to as the "Motion to Reopen"). In the Motion to Reopen, Woodcock requested that his case be reopened pursuant to 11 U.S.C. § 350, which the U.S. Bankruptcy Court of the District of Colorado did. The Motion to Reopen also seeks relief from the final orders determining that the three student loans were nondischargeable pursuant to Rule 9024 and Rule 60(b)(3), (5), and (6). This issue remains pending and is presently before this Court.

II. DISCUSSION AND ANALYSIS

Woodcock seeks relief from the final orders finding his student loans were nondischargeable pursuant to Rule 60(b) on the following grounds: (1) Woodcock's income has been low to nonexistent since one year after the 1992 dischargeability trial causing an undue hardship on him to make the monthly student loan payment that the U.S. Bankruptcy Court for the District of Colorado determined he would be able to make; (2) discharge was denied in part on the basis of a material misrepresentation by NYSHESC as to the total amount due to it on the loans and the amount now sought to be collected by the lender is greatly in excess of the amount that the U.S. Bankruptcy Court for the District of Colorado considered in determining that it was not an undue hardship for Woodcock to repay the loans; (3) the U.S. Bankruptcy Court for the District of Colorado failed to consider and reached no findings on certain of Woodcock's evidence regarding deferments of his student loans, and discharge was denied on the grounds of seven years passage based on the court's determination that deferments tolled the time; and (4) a recent bill received by Woodcock from the lender provides significant new evidence on relevant points not considered by the Colorado court, including that...