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Peete-Bey v. Educational Credit Management Corporation

United States District Court, D. Maryland

August 29, 2017

JANICE PEETE-BEY
v.
EDUCATIONAL CREDIT MANAGEMENT CORPORATION

          MEMORANDUM

          Catherine C. Blake United States District Judge.

         Janice Peete-Bey has sued Educational Credit Management Corporation (“ECMC”), alleging that it wrongfully seized her assets to satisfy disputed educational debt. Specifically, her amended complaint asserts claims of conversion, violations of the Maryland Consumer Debt Collection Act (“MCDCA”), and violations of the Maryland Consumer Protection Act (“MCPA”). In September 2015, this court dismissed most of Peete-Bey's MCDCA claims and all of her MCPA claims, and it limited the remaining conversion and MCDCA claims to those premised on seizures or communications occurring within the three-year period preceding the initiation of the lawsuit. Now pending is ECMC's motion for summary judgment on the remaining claims (ECF No. 34). The motion has been fully briefed, and no hearing is necessary to its resolution. See Local Rule 105.6. For the reasons explained below, ECMC's motion will be granted.

         BACKGROUND

         On or about August 28, 1989, Peete-Bey enrolled part-time in classes at the PSI Institute (“PSI”), which she describes as a “for-profit trade school.” (See Opp. to Mot. Summary Judgment Ex. 1 (“Peete-Bey Dec.”), ECF No. 37-2, ¶¶ 1, 4, 6.) Between September 1989 and January 1990, four disbursements of federally guaranteed Stafford and Supplemental loans issued in her name. (See Mot. Summary Judgment, Aff. of Kerry Klisch (“Klisch Aff.”), ECF No. 34-2, ¶ 7; see also Peete-Bey Dec. ¶¶ 1-2.) These disbursements totaled $6, 625. (See Klisch Aff. ¶ 7.) A handwritten transcript attached to Peete-Bey's complaint lists her “date started” at PSI as September 11, 1989, and her “last day of attendance” as March 28, 1990, (see Compl. Ex. 2, ECF No. 2-2), but Peete-Bey asserts that she dropped out of PSI after approximately two months, around November of 1989, (Peete-Bey Dec. ¶ 6). All but $1, 313 of the loans issued after Peete-Bey claims that she stopped attending classes at PSI. (See Klisch Aff. ¶ 7.)

         The original lender for Peete-Bey's loans was Crestar Bank, and the original guarantor was the Maryland Higher Education Loan Corporation (“MHELC”). (See Id. ¶ 8.) When Peete-Bey defaulted, MHELC paid a default claim to Crestar Bank, and “all right, title, and interest in the loans transferred to MHELC.” (See Id. ¶ 9.) MHELC then ceased operations, and “the loans along with all [Federal Family Education Loan Program (“FFELP”)] guarantor responsibilities were transferred to United Student Aid Funds (“USAF”).” (See Id. ¶ 10.) Eventually, the loans were transferred to the Department of Education due to “inability to collect.”[1] (See id.) The Department of Education assigned the loans to ECMC on or around December 17, 1997. (See Id. ¶ 11.)

         In the three years prior to the filing of the complaint, ECMC communicated with Peete-Bey regarding her loans both by telephone and in writing. (See Id. ¶ 17; id. Exs. F-H, ECF Nos. 34-8-34-10; Peete-Bey Dec. ¶ 14.) During this time, Peete-Bey did not make any voluntary payments on the loans. (See Klisch Aff. ¶ 19; id. Ex. I, ECF No. 34-11.) In 2012, 2013, and 2014, ECMC certified Peete-Bey's debt to the Department of Education as eligible for federal offset, and the Department of Education subsequently referred it to the Department of Treasury, requesting that the Treasury Department offset funds up to the amount of the debt from any authorized sources. (See Id. ¶¶ 20-21.) Peete-Bey's tax refunds were offset in the amounts of $1, 767.49 in 2012, $4, 686.57 in 2013, and $4, 712 in 2014. (See Id. ¶ 21, Ex. I.) On January 8, 2014, shortly before the third offset, ECMC sent Peete-Bey a letter stating that it had “requested ED notify the Treasury Department to suspend offset action at this time.” (See Peete-Bey Dec. ¶ 21; Opp. to Mot. Summary Judgment Ex. 4, ECF No. 37-5.) ECMC sent Peete-Bey another letter on April 8, 2014, again confirming that it had “requested ED notify the Treasury Department to suspend offset action at this time.” (See Peete-Bey Dec. ¶ 24; Opp. to Mot. Summary Judgment Ex. 4.) Nevertheless, Peete-Bey's tax refund was offset in the amount of $4, 712 on March 26, 2014. (See Klisch Aff. ¶ 21, Ex. I; Peete-Bey Dec. ¶ 22.) ECMC then informed Peete-Bey that she had satisfied her outstanding obligation on the loans. (See Peete-Bey Dec. ¶ 25; see also Klisch Aff. ¶ 22.)

         Peete-Bey filed this lawsuit in the Circuit Court for Baltimore City in November 2014. (See Compl., ECF No. 2.) ECMC removed the case to this court on diversity grounds. (See Notice of Removal, ECF No. 1.) After ECMC moved to dismiss her complaint, Peete-Bey filed an amended complaint, and ECMC filed a motion to dismiss the amended complaint. (See First Mot. Dismiss, ECF No. 11; Am. Compl., ECF No. 13; Second Mot. Dismiss, ECF No. 14.) On September 14, 2015, this court dismissed most of Peete-Bey's MCDCA claims and all of her MCPA claims, and it limited the remaining conversion and MCDCA claims to those premised on seizures or communications occurring within the three-year period preceding the initiation of the lawsuit. (See Mem. and Order, ECF Nos. 21-22.) ECMC now moves for summary judgment on the remaining claims. (See Mot. Summary Judgment, ECF No. 34.)

         STANDARD OF REVIEW

         Federal Rule of Civil Procedure 56(a) provides that summary judgment should be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a) (emphases added). “A dispute is genuine if ‘a reasonable jury could return a verdict for the non-moving party.'” Libertarian Party of Va. v. Judd, 718 F.3d 308, 313 (4th Cir. 2013) (quoting Dulaney v. Packaging Corp. of Am., 673 F.3d 323, 330 (4th Cir. 2012)). “A fact is material if it ‘might affect the outcome of the suit under the governing law.'” Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). Accordingly, “the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment[.]” Anderson, 477 U.S. at 247-48. The court must view the evidence in the light most favorable to the non-moving party, Tolan v. Cotton, 134 S.Ct. 1861, 1866 (2014) (per curiam), and draw all reasonable inferences in that party's favor, Scott v. Harris, 550 U.S. 372, 378 (2007) (citations omitted); see also Jacobs v. N.C. Admin. Office of the Courts, 780 F.3d 562, 568-69 (4th Cir. 2015). At the same time, the court must “prevent factually unsupported claims and defenses from proceeding to trial.” Bouchat v. Balt. Ravens Football Club, Inc., 346 F.3d 514, 526 (4th Cir. 2003) (quoting Drewitt v. Pratt, 999 F.2d 774, 778-79 (4th Cir. 1993)).

         ANALYSIS

         ECMC offers two arguments in support of its motion for summary judgment. First, it contends that Peete-Bey's state-law claims are preempted by federal law-namely, the Higher Education Act (“HEA”) and its implementing regulations. Second, ECMC asserts that there are no disputed issues of material fact and that it is entitled to judgment on both the conversion and MCDCA claims as a matter of law. The court agrees that Peete-Bey cannot prevail on her state-law claims. Thus, it declines to reach the parties' preemption arguments.

         I. Conversion Claim

         ECMC has moved for summary judgment on the conversion claim, arguing that the undisputed facts preclude Peete-Bey from establishing the elements of conversion as a matter of law. In response, Peete-Bey contends that ECMC has misinterpreted the case law and that summary judgment is inappropriate in light of disputed issues of material fact.

         As noted, this court previously limited Peete-Bey's conversion claim to seizures that occurred between November 17, 2011, and November 17, 2014, the three-year period preceding Peete-Bey's initiation of the case. ECMC has provided a “Borrower Transaction History Report” listing transactions associated with Peete-Bey's account from August 18, 1997, to March 26, 2014. (See Klisch Aff. ¶ 19, Ex. I.) The report reflects three adjustments to the account during the relevant period: an IRS offset of $1, 767.49, dated October 3, 2012; an IRS offset of $4, 686.57, dated March 13, 2013; and an IRS offset of $4, 712, dated March 26, 2014. (See Id. Ex. I at 11-13.) Each IRS offset entry includes columns with the notations “J - Adjustment” and “D - Department of Education.” (See id.) Because the column headers are illegible, however, the significance of these notations is not clear. No other adjustments are listed for the relevant period, (see id.), and the parties appear to agree that only tax offsets are at issue, ...


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