U.S. v. Citrin

• Decision Date: 07 August 1992
• Docket Number: No. 91-15594,91-15594
• Citation: 972 F.2d 1044
• Parties: 76 Ed. Law Rep. 938 UNITED STATES of America, Plaintiff-Appellee, v. Alan J. CITRIN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1044

972 F.2d 1044

76 Ed. Law Rep. 938

UNITED STATES of America, Plaintiff-Appellee, v. Alan J. CITRIN, Defendant-Appellant.

No. 91-15594.

United States Court of Appeals Ninth Circuit.

Argued and Submitted May 12, 1992.

Decided Aug. 7, 1992.

T. Dawn Farrison, Myers, Barnes & Jenkins, Phoenix, Ariz., for the defendant-appellant.

Michael A. Johns, Asst. U.S. Atty., Phoenix, Ariz., for plaintiff-appellee.

Appeal from the United States District Court for the District of Arizona.

Before CHOY, HUG, and RYMER, Circuit Judges.

HUG, Circuit Judge:

Alan Citrin appeals from a summary judgment in which the district court found the United States entitled to statutorily prescribed damages resulting from Citrin's breach of a scholarship agreement with the United States. Citrin contends that he was excused from performing under the contract and that the damages were improperly calculated. We affirm.

The district court had jurisdiction under 28 U.S.C. § 1345. We have appellate jurisdiction under 28 U.S.C. § 1291. We review a grant of summary judgment de novo. State Farm Fire & Cas. Co. v. Martin, 872 F.2d 319, 320 (9th Cir.1989).

We must decide whether Citrin is excused from serving as a doctor in an underserved area of the country because the Government repudiated the scholarship contract, the Government took away Citrin's vested right to a deferment, or the Government violated the Administrative Procedure Act, 5 U.S.C. § 553. We also must determine whether the damages violate 42 U.S.C. § 2541 (1988), due process, or the Truth in Lending Act, 15 U.S.C. § 1601, et seq. (1988).

I.

In 1976 Congress established the National Health Service Corps ("NHSC") Scholarship Program ("the Program") in order to address the maldistribution of health care professionals in the United States. See Pub.L. No. 94-484, 90 Stat. 2270 (1976) (codified as amended at 42 U.S.C. §§ 254d-254e). The Department of Health and Human Services ("the Agency") has the authority to promulgate rules and regulations necessary to implement the Program. Under the Program, a student in a professional health degree program may receive a scholarship in exchange for the student's agreement to serve in a health manpower shortage area ("HMSA"). 42 U.S.C. §§ 254l(b)(4), 254l(e). The student must serve one year for each year that the student receives a scholarship, or two years, whichever is greater. 42 U.S.C. § 254 l(f)(1)(B)(iv). All applicants must submit signed written contracts agreeing to serve their periods of obligated service in an HMSA. 42 U.S.C. § 254 l(b)(4). The statute specifies the terms to be included in the contract. 42 U.S.C. § 254l(f).

II.

Citrin became a NHSC participant in 1979, at the beginning of his second year in medical school. On August 31, 1979, the Secretary accepted Citrin's contract and awarded the scholarship. On March 18, 1980, Citrin renewed his contract for the 1980-81 school year. He received a total of $22,134.00 in scholarship funds.

Scholarship recipients who are doctors do not begin fulfilling their service obligation immediately after graduating from medical school. Doctors must complete at least one year of post-graduate training before beginning the period of obligated service. 42 C.F.R. § 62.9(b) (1991). It is possible for the doctor to obtain a deferral for more than one year. Under the statute, at the scholarship recipient's request, the Secretary must grant the scholarship recipient a three-year deferment "to complete an internship, residency, or other advanced clinical training." 42 U.S.C. § 254m(b)(5)(A) (1988).

According to Citrin's contract, "[d]eferment is granted for a maximum of three years, and only for completion of internship, residency, or other advanced training." Citrin argues that both the contractual and statutory language entitled him to a three-year deferment for an anesthesiology residency. The American Board of Anesthesiology requires a three-year residency in order to be eligible to take the written examination. Thus, Citrin claims, since he could complete his residency within the three years permitted by the statute and contract, he was entitled to a three-year deferment.

A March 27, 1981 letter from the Program to scholarship recipients informed Citrin that scholarship recipients were entitled to deferments only for

those programs of graduate clinical training which lead to eligibility for board certification and have been approved by the appropriate certifying boards, as determined by the Secretary of Health and Human Services....

Training which leads to eligibility for board certification is considered by the NHSC as that graduate clinical training and years of practice required by the appropriate American specialty board for the candidate to be eligible for, or have taken, all examinations and/or have submitted all necessary documents and other evidence needed by the board to declare that the candidate is board certified.

(Emphasis added.)

A three-year anesthesiology residency is not sufficient for board certification. After passing the written examination, the doctor must also pass an oral examination to become board certified. In order to take the oral exam, one must either complete a one-year fellowship or practice for two years. Thus, since the three-year anesthesiology residency would not be sufficient for board certification, according to the March 27, 1981 letter, Citrin would not be entitled to a three-year deferment.

Citrin argues that the March 27, 1981 letter changed the deferment policy. The Government, however, contends that there was no policy change because Citrin was never entitled to a deferment for an anesthesiology residency; the Government claims that the statute and regulations that existed at the time Citrin signed his contracts required a three-year deferment only if all post-graduate training necessary for board certification could be completed within three years.

After receiving the March 27, 1991 letter, Citrin called the NHSC and was told by someone there that he could not receive a deferment for an anesthesiology residency. Citrin took no action to challenge the policy.

Citrin eventually completed a one-year general internship, a two-year anesthesiology residency, and a one-year fellowship. He never applied for a deferment for the anesthesiology residency.

Scholarship recipients are required to submit annually a Deferment Request Form ("DRF"). Citrin failed to meet the April 30, 1982 deadline for submitting his DRF for his first-year deferment. After an additional three months had gone by, the Program sent him a letter, dated August 3, 1982, instructing him to return the DRF by August 20, 1983.

On November 29, 1982, a NHSC staff member called Citrin, asking him to return the DRF or, alternatively, a letter from his training program director, which would similarly document his chosen specialty and the beginning and ending dates of his internship or residency. Citrin was informed that if he did not return documentation of his training status by December 10, 1982, he would be placed in default of his scholarship agreement. The Program followed up by sending Citrin a letter, dated December 3, 1982, instructing him to return his training documentation by December 15, 1982.

On December 16, 1982, the Program received a letter from Citrin in which he stated that he was participating in a one-year osteopathic internship at Metropolitan Hospital. However, Citrin still failed to provide independent documentation of his activities. The Program made a fourth request for this information. Although Citrin agreed that he would supply a copy of his internship contract, he did not do so.

After waiting more than two additional months for documentation of Citrin's training status, the Program notified him, by letter dated February 23, 1983, that he had breached the terms of his scholarship award. Citrin then submitted a copy of his training contract. Upon the Program's receipt of Citrin's training documentation on March 9, 1983, it notified him, by letter dated March 14, 1983, that his default was rescinded and his deferment reinstated.

Citrin had the opportunity to request that his service obligation be deferred for 1983-84 if he wished to pursue training beyond his one-year internship. The Program notified Citrin that his 1983-84 DRF was due by May 27, 1983. Citrin did not seek a deferment by the stated deadline. Therefore, the Program wrote to him on June 30, 1983, stating that he would be placed in default unless he returned his DRF immediately. Citrin ignored the Program's June 30 letter and did not document his training activities or whereabouts for the 1983-84 years. Based on Citrin's violation of deferment procedures, the Program notified him, by letter dated September 30, 1983, that he was again in default of his scholarship agreement. This letter, however, also advised Citrin that he could request reinstatement of his deferment if he signed a Conditional Service Agreement ("CSA"). The CSA provided that he would be placed at a site selected by the NHSC upon completion of his training.

Citrin did not respond to the Program's September 30, 1983 letter. On January 26, 1984, the Program formally notified him that he had breached the terms and conditions of his deferment, as of September 30, 1983. He was further informed that his debt would become due on January 26, 1985.

During the statutory one-year repayment period following Citrin's default, the Agency sent him letters demanding payment of his debt. These letters also offered him the opportunity to repay his debt through service if he would sign a Forbearance Agreement. Under the Forbearance Agreement, the Government would forbear collection of the debt if Citrin served for two years at a site selected by the NHSC. The Skyline Credit Corporation, a collection agency used by the Agency, also offered Citrin a Forbearance Agreement. Citrin did not sign any of the Forbearance Agreements, make any...