US v. Gavilan Joint Community College Dist., 85-8622 SC.
| Decision Date | 11 July 1986 |
| Docket Number | No. 85-8622 SC.,85-8622 SC. |
| Citation | 662 F. Supp. 309 |
| Court | U.S. District Court — Northern District of California |
| Parties | UNITED STATES of America, Plaintiff, v. GAVILAN JOINT COMMUNITY COLLEGE DISTRICT and Gavilan College, Defendants. |
John Russionello, U.S. Atty., Steven Shefler, San Francisco, Cal., for plaintiff.
Michael Tonsing, Oakland, Cal., for defendants.
ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
In 1970 Congress authorized the Veterans Administration (VA) to establish the Predischarge Education Program (PREP). Under this program, about 200 schools provided courses of study for active duty military personnel. In 1972 Congress authorized the Veterans Administration to establish appropriate rates for tuition and fees in the program. Gavilan College provided PREP courses from October 1972 to June 1976. By 1975 it offered courses aboard 80 to 150 ships of the United States Navy. The Veterans Administration approved the rates Gavilan charged servicemen for their PREP courses. The Veterans Administration reimbursed servicemen for these expenses. Gavilan subcontracted with ModuLearn, Inc., an educational consulting corporation, which provided much of the program services. Under their contract, ModuLearn received 50-85% of the PREP payments.
The PREP statute, 38 U.S.C. Section 1695 et seq., provides that a school such as Gavilan may be reimbursed only its reasonable costs of offering PREP courses. In this action the United States maintains that Gavilan charged more than its reasonable costs. The United States sues to recover alleged overpayments of $898,689 plus interest.
The matter is presently before the court on defendants' motion for summary judgment. Summary judgment is proper only where there is no genuine issue of material fact or when, viewing the evidence in the light most favorable to the non-moving party, the movant is clearly entitled to prevail as a matter of law. Bank of California, N.A. v. Opie, 663 F.2d 977, 979 (9th Cir. 1981); State ex rel. Edwards v. Heimann, 633 F.2d 886, 888 (9th Cir.1980). Once a summary judgment motion has been made and properly supported, the adverse party may not rest on the mere allegations of his pleadings, but must set forth specific facts showing that there is a genuine issue for trial. Steckl v. Motorola, Inc., 703 F.2d 392, 393 (9th Cir.1983); Ruffin v. County of Los Angeles, 607 F.2d 1276, 1280 (9th Cir.1979), cert. denied, 445 U.S. 951, 100 S.Ct. 1600, 63 L.Ed.2d 786 (1980).
For the reasons below, the court determines that the statute of limitations bars this action as a matter of law. Therefore the court grants summary judgment for defendants.
28 U.S.C. Section 2415(a) sets a limitation period of six years in an action of contract or quasi-contract brought by the United States. Section 2415(d) also sets a limitation period of six years in an action for recovery of overpayment on behalf of military personnel. The present action falls under either Section 2415(a) or Section 2415(d), and so the limitation period is six years. The cause of action accrued on the dates when the Veterans Administration made overpayments to Gavilan, between 1972 and 1976.
28 U.S.C. Section 2416 reads as follows:
Thus the limitations period begins only when the responsible official knew (or could have known) the material facts that gave rise to the action.
The United States contends that the statutory period began to run on July 20, 1979. On that date the Veterans Administration issued its audit report on Gavilan's PREP program. If the limitations period began on that date, then the government has met the statute of limitations. The parties stipulated to exclude the period from July 19, 1985 to November 25, 1985 in order to conduct settlement negotiations. The United States filed suit on November 22, 1985.
Gavilan contends that the responsible officials knew (or could have known) of Gavilan's alleged surplus at an earlier date. Gavilan advances several pieces of evidence for its contention. The United States disputes the import of this evidence.
First, on March 14, 1975, the Veterans Administration's PREP Director wrote Gavilan that its charges were excessive. Defendants' Ex. B. Thus responsible officials knew of Gavilan's alleged surplus at this time, Gavilan argues. The United States counters, however, that this letter refers primarily to Galivan's failure to make refunds for students who dropped out. This letter did not address the underlying excess fees, the United States argues.
Second, in 1977 the General Accounting Office examined nine schools and two consulting firms which offered PREP programs. The GAO estimated VA payment, cost, and resulting surplus for each. The GAO estimated that Gavilan had received excess payments of $227,000 and that ModuLearn had received excess payments of $595,000 in its association with Gavilan. In a letter dated December 8, 1977 and addressed to the Administrator of the Veterans Administration, the GAO advised the VA to recover the surplus funds.
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U.S. v. Gavilan Joint Community College Dist.
...granted summary judgment to Gavilan, finding that the United States' action was time-barred by the six-year statute of limitations. 662 F.Supp. 309. Gavilan appeals from the district court's denial of attorney's fees under the Equal Access to Justice Act. It also appeals from the denial of ......