U.S. v. Stoeber, 01-1308-JTM.

• Decision Date: 28 January 2003
• Docket Number: No. 01-1308-JTM.,01-1308-JTM.
• Citation: 242 F.Supp.2d 1026
• Parties: UNITED STATES of America, Plaintiff, v. Troy C. STOEBER, Defendant.
• Court: U.S. District Court — District of Kansas

242 F.Supp.2d 1026

UNITED STATES of America, Plaintiff, v. Troy C. STOEBER, Defendant.

No. 01-1308-JTM.

United States District Court, D. Kansas.

January 28, 2003.

Christina L. Medeiros, Office of United States, Attorney, Kansas City, KS, Tanya S. Wilson Office of United States Attorney, Topeka, KS, for Plaintiff.

Jeffrey P. DeGraffenreid, Foulston Siefkin LLP, Wichita, KS, John F. Reals, Reals & Weber, Wichita, KS, for Defendant.

MEMORANDUM AND ORDER

MARTEN, District Judge.

This matter comes before the Court on the Defendant's motion for summary judgment (Dkt. No. 26) and the Plaintiffs motion for summary judgment (Dkt. No. 28). In this breach of contract case, the Plaintiff seeks reimbursement from the Defendant for the monies it expended on the Defendant's medical education. Both the Defendant's and the Plaintiffs summary judgment motions are fully briefed and ripe for determination. For the reasons set forth below, the Court grants the Plaintiffs motion for summary judgment and denies the Defendant's motion for summary judgment.

I. Statement of Facts

On July 7, 1994, Defendant Troy C. Stoeber executed an F. Edward Hebert Armed Forces Health Professions Scholarship Program and Financial Assistance (AFHPSP/FAP) Contract. Under the Scholarship Agreement, the Defendant agreed to serve four years on active duty and serve four years of sponsorship in the AFHPSP/FAP. Pursuant to the contract, the Defendant began his medical education at Creighton University School of Medicine in August, 1994. In March of 1995, during the Defendant's spring break from Creighton University School of Medicine, he suffered an acute psychotic episode and was hospitalized. His discharge diagnosis was Bipolar Disorder, mixed. The Defendant finished his second semester of medical school.

On August 28, 1995, the United States Air Force recommended that the Defendant be administratively discharged from military service for medical reasons. The recommendation to discharge the Defendant was based on an Air Force physician's determination that the defendant was medically disqualified for continued military service after the Defendant was diagnosed with Bipolar Disorder with Psychotic Episode (Mixed).

On December 15, 1995, the Secretary of the Air Force directed that recoupment action be taken for the funds the Air Force expended on the Defendant's medical training, as the Defendant was being discharged as a result of a permanent medical disqualification without entitlement to disability processing. The Plaintiff does not seek reimbursement on the basis that the Defendant's separation from the Air Force was voluntary or because of misconduct.

On January 22, 1996, the Defendant was honorably discharged from all appointments in the United States Air Force. The Defendant was honorably discharged from the U.S. Air Force Reserve in accordance with Air Force Instruction 36-3209, para. 2.16, Physical Disqualification.

The United States Air Force paid for all of the Defendant's costs to attend Creighton University School of Medicine for the Fall Semester of 1994 and the Spring Semester of 1995.

The Defendant graduated from Creighton University School of Medicine in 1998. The Defendant is now a licensed physician.

If the Court determines that the Defendant must repay the United States under the terms of the AFHPSP/FAP contract, the Court should enter judgment against the Defendant in the total amount of $35,824.93 as of September 17, 2002, which includes principal in the amount of $26,635.44, accrued interest to that date in the amount of $3,670.48, and accrued penalties to that date in the amount of $5, 519.01, plus interest accruing after September 17, 2002, at the rate of $3.65 per day, plus penalties accruing after that date at the rate of $4.38 per day.

Although the Defendant challenges the aforementioned finding, the Defendant does not provide any evidence that would allow the Court to determine if the facts are truly controverted. See also D. Kan. Rule 56.1(d)

II. Summary Judgment Standards

Summary judgment is proper where the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact, and that the moving party is entitled to judgments as a matter of law. Fed.R.Civ.P. 56(c). In considering a motion for summary judgment, the court must examine all of the evidence in a light most favorable to the opposing party. Jurasek v. Utah State Hosp., 158 F.3d 506, 510 (10th Cir. 1998). The party moving for summary judgment must demonstrate its entitlement to summary judgment beyond a reasonable doubt. Baker v. Board of Regents, 991 F.2d 628, 630 (10th Cir.1993). The moving party need not disprove the nonmoving party's claim or defense; it need only establish that the factual allegations have no legal significance. Dayton Hudson Corp. v. Macerich Real Estate Co., 812 F.2d 1319, 1323 (10th Cir.1987).

The party opposing summary judgment must do more than simply show there is some metaphysical doubt as to the material facts. "In the language of the Rule, the nonmoving party must come forward with `specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting Fed.R.Civ.P. 56(e)) (emphasis in Matsushita). The opposing party may not rely upon mere allegations or denials contained in its pleadings or briefs. Rather, the opposing party must present significant admissible probative evidence supporting that party's allegations. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

III. Analysis and Discussion

Plaintiff contends that the Defendant is required to reimburse the Air Force for the monies he received to attend medical school, based on the AFHPSP/FAP Contract signed by the Defendant. The Defendant disputes this reading of the AFHPSP/FAP Contract and contends that reimbursement is not necessary. In the pretrial order, the parties stipulated that 10 U.S.C. § 2005 and Kansas contract law apply to the contract at issue. Thus, the Court's analysis will proceed under these dictates.

Generally, the advance education contracts potential service men and women enter into with the Armed Forces are governed by 10 U.S.C. § 2005. Under Kansas law, "the intent of the parties governs the construction of a contract." United Tunneling Enterprises, Inc., v. Havens Construction Co. Inc., 35 F.Supp.2d 789, 793 (D.Kan.1998) (citing Slawson Exploration Co. v. Vintage Petroleum, Inc., 78 F.3d 1479, 1481 (10th Cir.1996)). "The intention of the parties and the meaning of the contract are to be determined from the [written] instrument itself where the terms are plain and unambiguous." United Tunneling Enterprises, 35 F.Supp.2d at 793 (quoting Wolfgang v. Mid-America Motorsports, Inc., Ill F.3d 1515, 1524 (10th Cir.1997)) (additional citations omitted). "Ambiguity is a question of law to be determined by the court." Nat'l Minority Supplier Dev. Council Bus. Consortium Fund, Inc., v. First Nat'l Bank of Olathe, 83 F.Supp.2d 1200, 1202 (D.Kan.1999) (citations omitted). "A finding of ambiguity is not compelled merely because the parties differ over the meaning of a term." United Tunneling Enterprises, 35 F.Supp.2d at 793 (citations omitted).

The Court also notes that in reading contracts, "reasonable interpretations, rather than unreasonable ones, are favored by the law." United Tunneling Enterprises, 35 F.Supp.2d at 794 (citations omitted). "Results which vitiate the contract's purpose or reduce its terms to an absurdity should be avoided." In re Villa West Associates, 146 F.3d 798, 803 (10th Cir.1998) (citing Kansas State Bank & Trust Co. v. DeLorean, 7 Kan.App.2d 246, 640 P.2d 343, 349 (1982) (quoting Weiner v. Wilshire Oil Co., 192 Kan. 490, 389 P.2d 803, 808 (1964)).

First, considering the provision of the Defendant's AFHPSP/FAP Contract, which permits reimbursement the Court looks to Paragraph 6(c). Paragraph 6(c) states:

[S]hould I become unable to commence the period of ADSC [Active Duty Service Commitment] specified in this contract or become unable to complete my medical education program, I agree to reimburse the United States in one lump sum for the total cost of advanced education paid by the U.S. Government as specified in 10 U.S.C. § 2005.

10 U.S.C. § 2005 provides some general guidance about when the signees of such contracts may be required to reimburse the Armed Forces. § 2005(a)(3) states that "if such person, voluntarily or because of misconduct, fails to complete the period of active duty specified in the agreement, or fails to fulfill any term or condition prescribed pursuant to clause (4)" reimbursement will be required. § 2005(a)(4) is a catch-all provision that allows the Secretary of each military department to prescribe additional terms and conditions that if unfulfilled will require reimbursement.

Both parties agree that the Plaintiff is not seeking reimbursement on the basis that the Defendant's separation from the Air Force was voluntary or was the result of misconduct. Thus, the Plaintiff necessarily must be seeking reimbursement on the basis of the `additional terms and conditions' included in the Defendant's AFHPSP/FAP Contract, added pursuant to § 2005(a)(4). These additional terms are included primarily in Paragraphs 10 and 11 of the Defendant's AFHPSP/FAP Contract. As the Plaintiff has stated that it is not seeking reimbursement based on Paragraph 11, the Court will focus its inquiry on the terms and conditions included in Paragraph 10.

Paragraph 10 states:

10. If I am dropped from any professional school for deficiency in studies or conduct; or if, for other reasons, I must repeat an academic period or discontinue my professional education; or if I refuse to comply with or fail to meet the applicable standards of the United States Air Force ...