Saint Martin's University v. Flores
| Decision Date | 18 October 2016 |
| Docket Number | 48064-6-II |
| Parties | SAINT MARTIN'S UNIVERSITY, Appellant, v. CARMEN FLORES and the marital community composed of CARMEN FLORES and JOHN DOE FLORES, Respondent. |
| Court | Washington Court of Appeals |
UNPUBLISHED OPINION
St Martin's University appeals the superior court's summary dismissal of its claims to recover debts owed by Carmen Flores, a former St. Martin's student. St Martin's also appeals the superior court's award of attorney fees to Flores. Flores owed two debts to St Martins: $1, 900.00 of unpaid Federal Perkins Loans[1] received in 1997 and 1998, and $642.85 of unpaid tuition stemming from an additional class in 2002.
The superior court dismissed St. Martin's claims as untimely and insufficiently pleaded under CR 8. St. Martin's appeals, arguing that its first claim is not barred by the statute of limitations because federal law preempts state statutes of limitations on suits for recovery on Federal Perkins Loans, and that its second claim was based not on the unpaid tuition balance from 2002, but on a dishonored check written by Flores in 2008 and, therefore, its claim was timely. We reverse the dismissal of the first claim, affirm dismissal of the second claim, reverse the award of attorney fees and remand for further proceedings consistent with this opinion.
Carmen Flores attended St. Martin's University (f/k/a St Martin's College) from 1997 until 2002. During her time there, Flores signed multiple promissory notes for Perkins Loans to help fund her education. In addition, after earning her degree in 2001, Flores took a class at St. Martin's in 2002. Flores owed St. Martin's approximately $500 tuition for that class. Despite several notices and demands to pay, Flores never paid the outstanding tuition balance. As of December 30, 2002, Flores owed St. Martin's over $600 including late charges, collection fees, and interest. On November 18, 2008, Flores wrote a check for the outstanding tuition balance, but the check was rejected for insufficient funds.
On January 3, 2014, St. Martin's filed a complaint against Flores for recovery of the unpaid Perkins Loans and the outstanding tuition balance. St. Martin's complaint characterized its claims as follows:
Clerk's Papers (CP) at 7. Flores answered the complaint and raised the affirmative defense that both claims were barred by Washington's statute of limitations. After submitting to mandatory arbitration, St. Martin's requested a trial de novo.
Flores moved for summary judgment, arguing that both claims were barred by Washington's six-year statute of limitations set out in RCW 4.16.040(2). St. Martin's argued in response that federal law preempts statutes of limitations on suits for recovery on Perkins Loans, and that its second claim was based not on the unpaid tuition balance from 2002, but on a dishonored check written by Flores in 2008 and, therefore, its claim was timely. The superior court granted Flores's motion for summary judgment, concluding that St. Martin's failed to affirmatively plead federal preemption, and that St. Martin's second claim was based on a "ledger balance debt" such that both of St. Martin's claims were susceptible to Washington's six-year statute of limitations.
St. Martin's appeals.
We review a summary judgment order de novo, and perform the same inquiry as the trial court. Kofmehlv. Baseline Lake LLC, 177 Wn.2d 584, 594, 305 P.3d 230 (2013). Summary judgment is appropriate when there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. CR 56(c). A motion for summary judgment accepts all facts and reasonable inferences in the light most favorable to the nonmoving party. Kofinehl, 177 Wn.2d at 594. Considering the facts in the light most favorable to the nonmoving party, the motion for summary judgment should be granted only if, from all the evidence, reasonable persons could reach but one conclusion. Failla v. FixtureOne Corp., 181 Wn.2d 642, 649, 336 P.3d 1112 (2014).
Here, the parties do not dispute the material facts. Accordingly, the only issues are questions of law, which we review de novo.
St. Martin's argues that the superior court erred by granting summary judgment on their first claim pertaining to Flores's unpaid Perkins Loans. Specifically, St. Martin's argues that the Washington statute of limitations, upon which the superior court based its summary judgment dismissal, does not apply to claims involving Perkins Loans because it is federally preempted by the Higher Education Act (HEA) of 1965, as amended at 20 U.S.C. §1001-1161aa-l. We agree.
Flores contends that St. Martin's waived its federal preemption argument by failing to include it in its complaint. Generally, CR 8(c) requires a defendant to adequately plead an affirmative defense in her complaint. CR 8(c). As an affirmative defense, Flores bears the burden to prove Washington's statute of limitations barred St. Martin's claims. Rivas v. Overlake Hosp. Med. Or., 164 Wn.2d 261, 267, 189 P.3d 753 (2008). Conversely, a plaintiff carries the burden of proof if he alleges that the statute of limitations was tolled and does not bar the claim. Overlake Hosp. Med. Ctr., 164 Wn.2d at 267. However, CR 8 does not require a plaintiff to plead a response to an affirmative defense raised in a defendant's answer. See CR 8(d) (). Therefore, we hold that St. Martin's did not waive its argument that the Washington statute of limitations is federally preempted as it pertains to Perkins Loans.
Next, we examine whether Washington's statute of limitations applies to St. Martin's claims, or whether the statute is federally preempted as it pertains to Perkins Loans. Whether the statute of limitations bars a suit is a question of law we review de novo. Bennett v. Computer Task Group, Inc., 112 Wn.App. 102, 106, 47 P.3d 594 (2002).
The parties do not dispute that the loans in question are Perkins Loans made in 1997 and 1998 and are secured by promissory notes.[2] As the loans were made in 1997 and 1998, the Washington six-year statute of limitations, if applicable, would preclude suit for recovery on this claim. RCW 4.16.040(2).
The United States Constitution's Supremacy Clause gives the federal government the power to preempt state law. Snohomish County v. Pollution Control Hearings Bd., 192 Wn.App. 316, 341, 368 P.3d 194 (2016). Congress may preempt state law in three manners, only one of which, express preemption, is at issue here.[3] Campbell v. Dep 't of Soc. and Health Servs., 150 Wn.2d 881, 897, 83 P.3d 999 (2004). "Express preemption" occurs when Congress "states in explicit terms its intent to preempt state law." Peterson v. Kitsap Cmty. Fed. Credit Union, 171 Wn.App. 404, 417 n. 14, 287 P.3d 27 (2012) (quoting Am. Bankers Ass 'n v. Lockyer, 239 F.Supp.2d 1000, 1007 (E.D. Cal. 2002). There is a strong presumption against preemption under Washington law. Pollution Control Hearings Bd., 192 Wn.App. at 341.
Enacted in 1965, the HEA was the first comprehensive government program designed to provide scholarships, grants, work-study funding, and loans for students to attend college. See Pub. L. No. 89-329, 79 Stat. 1219 (Nov. 8, 1965) (codified as amended at 20 U.S.C. §§ 1001-1161aa-l (2008); Julie Margetta Morgan, Consumer-Driven Reform of Higher Education: A Critical Look at New Amendments to the Higher Education Act, 17 JOURNAL OF LAW AND Policy 531, 540 (2009). Title IV of the HEA directs the Secretary of the Department of Education to implement various federal student financial aid programs. De LaMota v. U.S. Dep 't of Educ, 412 F.3d 71, 74, (2d Cir. 2005). The Perkins Loan program is one such program, designed to assist institutions of higher education in financing low interest loans to financially needy students. De LaMota, 412 F.3d at 74; see 20 U.S.C. § 1070; 20 U.S.C. § 1087aa-ii.
In 1991, Congress adopted the Higher Education Technical Amendments codified in part in former 20 U.S.C. § 1091a (1991). The amendments eliminated all statutes of limitation on actions to recover on defaulted student loans for certain classes of lenders. United States v. Phillips, 20 F.3d 1005, 1007 (9th Cir. 1994). Section 1091a(a)(1) states, "It is the purpose of this subsection to ensure that obligations to repay loans and grant overpayments are enforced without regard to any Federal or State statutory, regulatory, or administrative limitation on the period within which debts may be enforced." Section 1091a(a) clearly states Congress's explicit intent to preempt state statutes of limitation pertaining to federally guaranteed educational loans.
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