Estes v. Ecmc Grp., Inc.

Decision Date26 July 2021
Docket NumberCivil No. 19-cv-822-LM
Citation565 F.Supp.3d 244
Parties Charles R. ESTES, et al. v. ECMC GROUP, INC.
CourtU.S. District Court — District of New Hampshire

Charles R. Estes, Hill, NH, Pro Se.

Alia G. Estes, Hill, NH, Pro Se.

Kevin M. O'Shea , Sulloway & Hollis PLLC, Concord, NH, for ECMC Group, Inc.


Landya McCafferty, United States District Judge.

Pro se plaintiffs Charles R. Estes (d/b/a OEM-Tech) and Alia G. Estes ("Alia") allege that defendant Education Credit Management Corporation ("ECMC") violated federal and state laws in its attempts to collect Alia's student loan debt. Presently before the court are the parties' cross-motions for summary judgment (doc. nos. 53 and 54). Each side contends that it is entitled to judgment as a matter of law on plaintiffs' claims.1 For the reasons stated below, ECMC's motion is granted and plaintiffs' motion is denied.


A movant is entitled to summary judgment if it "shows that there is no genuine dispute as to any material fact and [that it] is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A factual dispute is genuine "if the evidence about the fact is such that a reasonable jury could resolve the point in the favor of the" nonmovant. Rodríguez-Cardi v. MMM Holdings, Inc., 936 F.3d 40, 47 (1st Cir. 2019) (quoting Sánchez v. Alvarado, 101 F.3d 223, 227 (1st Cir. 1996)). A fact is material if it has "the potential to affect the outcome of the suit under the applicable law." Id. at 46 (quoting Cherkaoui v. City of Quincy, 877 F.3d 14, 23 (1st Cir. 2017)). All facts and reasonable inferences are viewed in the light most favorable to the nonmovant. Kelley v. Corr. Med. Servs., Inc., 707 F.3d 108, 115 (1st Cir. 2013). This same standard applies when, as here, the parties file cross-motions for summary judgment. Adria Int'l Grp., Inc v. Ferré Dev. Inc., 241 F.3d 103, 107 (1st Cir. 2001).


ECMC's motion is accompanied by a statement of material facts supported by record citations. See L.R. 56.1. Plaintiffs' objection to ECMC's motion primarily takes aim at the facts set forth in ECMC's factual statement. To provide the reader with pertinent background information, the court will first summarize the relevant facts as set forth by ECMC, provide a brief overview of this case's procedural history, and then address plaintiffs' factual challenges. Finally, the court will address ECMC's arguments in support of its motion.

I. ECMC's Statement of Material Facts

On March 20, 2001, Alia signed a Federal Consolidation Loan Application and Promissory Note ("Application and Note") as part of the Federal Family Educational Loan Program ("FFELP" or "FFEL program"). The Application and Note listed three loans to be consolidated: (1) a "US"2 loan in the amount of $2,000; (2) another "US" loan in the amount of $19,000, and (3) a "PERK" loan in the amount of $1,300. Section F of the Application and Note is entitled "Promissory Note." That section contains a paragraph entitled "Promise to Pay" describing the obligations of the loan's recipient to repay the loan. The paragraph also states that "the amount of the loan will be based on the payoff balance(s) of such loan(s) selected for consolidation as provided by the holder(s) of such loan(s) and may exceed [the applicant's] estimate of such payoff balance(s)." At the conclusion of the paragraph, which is just above where Alia's signature appears, the following text appears in all-capitals: "THIS IS A LOAN THAT MUST BE REPAID." The Application and Note further states that, "[a]t or about the time my former loans are discharged, a disclosure statement and repayment schedule ... will be issued to me identifying the amount of the Federal Consolidation Loan and additional terms of the loan."

On April 20, 2001, Alia signed a "Repayment Schedule and Disclosure" dated April 12, 2001. The Repayment Schedule and Disclosure states that "[t]his document is the repayment schedule which is provided for in the promissory note(s) you signed." It also states that the "Holder of the Loan(s)" is "The Student Loan Corp — Citibank," that the "Annual Percentage Rate (APR) is 8.250," and that the "Repayment Period Start Date" is April 12, 2001. Under the heading "Loans Covered By This Document" is a five-column, two-row table, which reads as follows:

 OUTSANDING LOAN ORIGINAL PRINCIPAL GUARANTOR LOAN DATE LOAN AMOUNT BALANCE TYPE   4/12/01        21,378        21,378            CA         CONS   4/12/01         1,258         1,258            CA         CONS  TOTAL:          22,636        22,636

Alia's Federal Consolidation Loan was distributed on or about April 12, 2001. The original guarantor of the loan was an entity known as the California Student Aid Commission ("CSAC").3 CSAC was a state agency and was the designated guaranty agency for the State of California. ECMC is also a guaranty agency. ECMC has entered into an agreement with the U.S. Department of Education, pursuant to which ECMC functions as a guaranty agency participating in the FFEL program administered and regulated by the Department under the Higher Education Act of 1965 ("HEA"). See 34 C.F.R. § 682.400.

On November 1, 2010, CSAC executed a blanket assignment to ECMC of CSAC's entire portfolio of guaranteed and non-defaulted loans. As of that date, ECMC assumed all responsibilities as the designated guaranty agency for the State of California. Also as of that date, ECMC became the guarantor of Alia's March 20, 2001, Application and Note and of the loans distributed under the April 12, 2001, Repayment Schedule and Disclosure.

The National Student Loan Data System ("NSLDS') is the Department of Education's database for student aid. NSLDS receives data from schools, guaranty agencies, and other Department of Education programs; it provides a centralized location for users to search for information about student loans. As of July 9, 2019, Alia's Loan History in NSLDS showed a total of fourteen student loans. The most recent loan appearing on her loan history is a "CL-FFEL CONSOLIDATED" loan with a "Loan Date" of "4/12/2001" and a loan amount of $22,636. On the "Loan Detail" page associated with this loan, the interest rate is "8.250% FIXED," and the original lender is listed as "CITIBANK (NEW YORK STATE) SLC."

According to the Department of Education's instructions for providers of data to NSLDS, NSLDS uses numeric codes to describe various conditions attached to loans and events associated with loans. This allows the Department to save space in the database and simplifies data processing by describing what can be a whole series of events in just a few numeric or alphabetical characters. The Department's table of "Guaranty Agency Codes" shows that CSAC has an NSLDS code of 706, and that ECMC's code is 951. The National Council of Higher Education Resources ("NCHER")—the nation's largest higher education finance trade association—confirms that that the FFELP guarantor code assigned to CSAC is 706 and that the FFELP guarantor code assigned to ECMC is 951.

NSLDS shows that, from April 12, 2001 through September 29, 2012, the guaranty agency for Alia's Federal Consolidation Loan with a loan date of 4/12/2001 was "ECMC-CA." However, the guaranty agency code listed alongside this guarantor is 706, which is CSAC's code. NSLDS also shows that, beginning September 30, 2012, the guaranty agency for Alia's loan was "Educational Credit Management Corp" with a guaranty agency code of 951.

In a notice dated July 19, 2011, Sallie Mae notified Alia that it was the new servicer of Alia's loan. Specifically, the notice stated that Sallie Mae was now the servicer for Alia's loan bearing a "Loan Date" of "4/12/01," an "Original Loan Amount" of $21,378.10, and an interest rate of "8.250." In a subsequent notice, Sallie Mae informed Alia that Sallie Mae had become "two separate and distinct companies—Sallie Mae and Navient," and that Navient would be the servicer of Alia's loan going forward.

Alia failed to make monthly payments toward her loan's principal balance or accrued interest several times between July 2011 and January 2016. In a notice dated January 13, 2016, ECMC informed Alia that it "is the guarantor of your federal student loan," and that ECMC's "records show that you have been past due on your federal student loan payments for more than six months." See 34 C.F.R. § 682.200(b) (consolidation loan enters default when borrower fails to make installment payment, the failure exists for at least six months, and the "Secretary or guaranty agency finds it reasonable to conclude that the borrower ... no longer intends to honor the obligation to repay"). The last payment credited towards Alia's principal balance or accrued interest on her account with Navient had an effective date of April 22, 2016. NSLDS shows that the loan entered default status on July 6, 2017.

On or about that date, Navient notified ECMC that Alia had defaulted on her loan and demanded, on behalf of the note's holder, that ECMC make payment as the guarantor. ECMC paid the default claim— a total of $14,789.29. See 34 C.F.R. § 682.102(g) ("If a borrower defaults on a loan, the guarantor reimburses the lender for the amount of its loss. The guarantor then collects the amount owed from the borrower."). The lender then assigned Alia's note to ECMC. ECMC capitalized the interest that had accrued on Alia's loan at the time of default and added collections costs to Alia's debt. See 20 U.S.C. § 1091a(b)(1) (requiring borrowers who default on FFELP loans to pay reasonable collection costs); 34 C.F.R. § 682.410(b)(2) (setting forth methods for determining collections costs), § 682.410(b)(4) (requiring the capitalization of outstanding interest at the time of default).

ECMC sent Alia a Notice of Default on July 10, 2017. The Notice informed Alia that ECMC, as her guarantor, had been required to pay a default claim to Alia's lender. ECMC then certified Alia for a tax refund offset and, in...

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