MURUNGI v. TEXAS GUARANTEED, Civil Action No. 09-3109.

• Decision Date: 18 February 2010
• Docket Number: Civil Action No. 09-3109.
• Citation: 693 F. Supp.2d 597
• Parties: James H. MURUNGI v. TEXAS GUARANTEED and Sallie Mae.
• Court: U.S. District Court — Eastern District of Louisiana

693 F. Supp.2d 597

James H. MURUNGI v. TEXAS GUARANTEED and Sallie Mae.

Civil Action No. 09-3109.

United States District Court, E.D. Louisiana.

February 18, 2010.

James H. Murungi, Mandeville, LA, pro se.

Elliot Ross Buckley, Jr., Middleberg, Riddle & Gianna, New Orleans, LA, Jonathan M. Herman, Middleberg, Riddle & Gianna, Dallas, TX, for Texas Guaranteed.

ORDER AND REASONS

SARAH S. VANCE, District Judge.

Before the Court are Texas Guaranteed (Guaranteed)'s motion to dismiss (R. Doc. 60), motions for summary judgment (R. Docs. 62, 93), and motion to strike (R. Doc. 71). Also before the Court is Sallie Mae, Inc.'s motion for summary judgment. (R. Doc. 61.) For the following reasons, Guaranteed's motion to dismiss is GRANTED, Guaranteed's motions for summary judgment are GRANTED, and Guaranteed's motion to strike is DENIED. Sallie Mae's motion for summary judgment is GRANTED.

I. BACKGROUND

On August 10, 1994, plaintiff James H. Murungi obtained a consolidated loan from Sallie Mae under section 428C of the Higher Education Act of 1965(HEA). (See R. Doc. 62-4); see also 20 U.S.C. § 1078-3. In a separate Lender Participation Agreement, Guaranteed promised to reimburse Sallie Mae for any losses arising from default on the loan. (See R. Docs. 62-4, 93-3.) Sallie Mae filed a claim for reimbursement with Guaranteed after Murungi defaulted on the loan, and Guaranteed paid the claim on July 8, 2008. (See R. Docs. 62-4, 62-5.) Sallie Mae then assigned Murungi's defaulted loan to Guaranteed, and Guaranteed began attempting to collect the loan by making telephone calls to Murungi and ultimately pursuing administrative wage garnishment proceedings.

On February 5, 2009, Murungi filed a pro se reconventional demand against Sallie Mae and Guaranteed. The action was removed to this Court on March 20, 2009. (R. Doc. 1.) Murungi alleges that Sallie Mae and Guaranteed wrongfully characterized his loan as in default status, harassed him and his family through repeated collection calls, and improperly initiated wage garnishment procedures.

In his original complaint, Murungi brought claims under the HEA, the Federal Debt Collection Practices Act (FDCPA), and state law claims for fraud, defamation and intentional infliction of emotional distress (IIED). (See R. Doc. 1-3.) Defendants moved to dismiss all of these claims. (See R. Docs. 10, 23.) On July 2, 2009, 646 F.Supp.2d 804, the Court dismissed Murungi's HEA claims against both defendants, dismissed his FDCPA claims against Sallie Mae, sustained his state law IIED and defamation claims, and granted him leave to plead his state law fraud claims with further specificity. (See R. Doc. 30.) Murungi filed an amended complaint on September 3, 2009 (see R. Doc. 39) and a supplement to his amended complaint on September 10, 2009 (see R. Doc. 41). The Court treats both as a single amended complaint. On November 25, 2009, the Court granted Sallie Mae's motion to dismiss Murungi's amended fraud claims. (See R. Doc. 48.)

Guaranteed now moves to dismiss Murungi's amended fraud claims for failure to plead them with sufficient particularity. Guaranteed also moves for summary judgment on Murungi's fraud, defamation, IIEA and FDCPA claims. Sallie Mae moves for summary judgment on Murungi's defamation and IIEA claims.

II. LEGAL STANDARD

A. Rule 12(b)(6) Standard: Murungi's Fraud Claims

To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead enough facts "to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 547, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A claim is facially plausible when the plaintiff pleads facts that allow the court to "draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S.Ct. at 1949. "A court must accept all well-pleaded facts as true and must draw all reasonable inferences in favor of the plaintiff. Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 232-33 (5th Cir. 2009); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir.1996). The court is not, however, bound to accept as true legal conclusions couched as factual allegations. Iqbal, 129 S.Ct. at 1949-50. Although pro se plaintiffs are held to less stringent standards than those drafted by lawyers, "conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss." Taylor v. Books A Million, Inc., 296 F.3d 376, 378 (5th Cir.2002).

Under the Federal Rules of Civil Procedure, a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). The complaint must "give the defendant fair notice of what the claim is and the grounds upon which it rests." Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 346, 125 S.Ct. 1627, 161 L.Ed.2d 577 (2005). The allegations "must be simple, concise, and direct." Fed.R.Civ.P. 8(d)(1). In addition to the requirements of Rule 8(a), a complaint that alleges fraud "must state with particularity the circumstances constituting fraud or mistake." Fed.R.Civ.P. 9(b); Dorsey v. Portfolio Equities, Inc., 540 F.3d 333, 339 (5th Cir.2008). The Fifth Circuit "interprets Rule 9(b) strictly, requiring a plaintiff who pleads fraud to specify the statements contended to be fraudulent, identify the speaker, state when and where the statements were made, and explain why the statements were fraudulent." Dorsey, 540 F.3d at 339 (citations omitted). "Put simply, Rule 9(b) requires the complaint to set forth the who, what, where, and how of the events at issue." Id. (citations and quotes omitted).

The second sentence of Rule 9(b) "relaxes the particularity requirement for conditions of the mind such as scienter: `Malice, intent, knowledge, and other conditions of the mind may be alleged generally.'" Id. Although Rule 9(b) allows scienter to be averred generally, "simple allegations that defendants possess fraudulent intent will not satisfy rule 9(b)." Id. The plaintiff instead "must allege specific facts supporting an inference of fraud." Id. (emphasis in original). If facts are "peculiarly within the opposing party's knowledge, fraud pleadings may be based on information and belief." Id. This relaxation of Rule 9(b), however, "must not be mistaken for license to base claims of fraud on speculation and conclusory allegations." United States ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 903 (5th Cir.1998).

B. Summary Judgment Standard: Murungi's Fraud, Defamation, IIEA and FDCPA Claims

Summary judgment is appropriate when "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c)(2); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994). When assessing whether a dispute as to any material fact exists, the Court considers "all of the evidence in the record but refrains from making credibility determinations or weighing the evidence." Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398 (5th Cir. 2008). All reasonable inferences are drawn in favor of the nonmoving party, but a party cannot defeat summary judgment with conclusory allegations or unsubstantiated assertions. Little, 37 F.3d at 1075. A court ultimately must be satisfied that "a reasonable jury could not return a verdict for the nonmoving party." Delta, 530 F.3d at 399.

If the dispositive issue is one on which the moving party will bear the burden of proof at trial, the moving party "must come forward with evidence which would `entitle it to a directed verdict if the evidence went uncontroverted at trial.'" Int'l Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1263-64 (5th Cir.1991). The nonmoving party can then defeat the motion by either countering with sufficient evidence of its own, or "showing that the moving party's evidence is so sheer that it may not persuade the reasonable fact-finder to return a verdict in favor of the moving party." Id. at 1265.

If the dispositive issue is one on which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record is insufficient with respect to an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325, 106 S.Ct. 2548. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See id. at 324, 106 S.Ct. 2548. The nonmovant may not rest upon the pleadings, but must identify specific facts that establish a genuine issue for trial. See, e.g., id. at 325, 106 S.Ct. 2548; Little, 37 F.3d at 1075; Isquith for and on Behalf of Isquith v. Middle South Utils., Inc., 847 F.2d 186, 198 (5th Cir. 1988), cert. denied, 488 U.S. 926, 109 S.Ct. 310, 102 L.Ed.2d 329 (1988).

III. DISCUSSION

A. Fraud

Guaranteed moves to dismiss, and in the alternative for summary judgment against, Murungi's fraud claims. In Louisiana, the elements of delictual fraud or intentional misrepresentation are: (1) misrepresentation of a material fact; (b) made with the intent to deceive; and (3) causing justifiable reliance with resultant injury. Guidry v. U.S. Tobacco Co., Inc., 188 F.3d 619, 627 (5th Cir.1999); Shelton v. Standard/700 Assocs., 798 So.2d 60, 64 (La. 2001) (Fraud is a "misrepresentation or a suppression of the truth made with the intention either to obtain an unjust advantage for one party or to cause a loss or inconvenience to the other."). Fraud "does not vitiate consent when the party against whom the fraud was directed could have ascertained the truth without difficulty, inconvenience, or...