United States v. Brenda Carter

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 12-12923
Non-Argument Calendar
________________________
D.C. Docket No. 0:10-cv-61706-WCT
UNITED STATES OF AMERICA,
llllllllllllllllllllllllllllllllllllllll Plaintiff-Appellee,
versus
BRENDA CARTER,
llllllllllllllllllllllllllllllllllllllll Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(January 2, 2013)
Before TJOFLAT, PRYOR and FAY, Circuit Judges.
PER CURIAM:
Brenda Carter, proceeding pro se, appeals a magistrate judge’s grant of
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summary judgment in favor of the government in its civil action to recover on
Carter’s defaulted student loan, 28 U.S.C. § 1345.1 For the reasons set forth
below, we affirm in part and vacate in part the magistrate’s summary judgment and
remand to the district court for further proceedings consistent with this opinion.
I.
The government filed a complaint against Carter regarding her student loan
that was, allegedly, in default, and sought a judgment for the amount owed on the
loan. Following a period of discovery, the government moved for summary
judgment and argued that it had established a prima facie case of debt owed on a
promissory note.
In support of its motion, the government filed a Certificate of Indebtedness
in which a loan analyst for the U.S. Department of Education certified that, as of
July 21, 2009, Carter was indebted to the government in the amount of
$110,461.98, $50,834.54 of which was principal. The loan analyst further
certified that the loan had a 9 percent interest rate, and thus, interest accrued on the
principal at the rate of $12.53 per day. Carter had obtained the loan from Sallie
Mae in 1990, and the loan obligation was guaranteed by a private lender and
1
The parties consented to a magistrate judge hearing the case, pursuant to 28 U.S.C.
§ 636(c).
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reinsured by the U.S. Department of Education under loan guaranty programs.
Carter defaulted on her obligation in 1993, and, eventually, the loan was assigned
to the Department. Since the assignment, the Department had credited a total of
$15,205 in payments to the loan balance. The government also filed a copy of the
promissory note at issue, which showed that Carter had signed the note. However,
most of the terms of the note were illegible. The government also filed an
“Itemization of Payments,” which the government asserted set forth the payments
that Carter had made toward the balance on the loan, as well as the interest that
had accrued on the loan.
Carter responded to the government’s summary judgment motion and
argued that the government had failed to produce an original, legible document
that showed the terms of the loan. Further, the amount of accrued interest on the
loan that the government sought to recover was inconsistent with the accrued
interest set forth in the government’s Itemization of Payments, and thus, the
government had overcharged her in interest. The government had also failed to
credit her the full amount she had paid toward the balance on the loan. She cited
her “Payments to Sallie Mae Chart,” which was attached to her response. The
chart purported to set forth various amounts that she had paid to Sallie Mae from
2006 to 2009, but Carter did not swear to the accuracy of the chart’s contents.
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In reply, the government filed two largely illegible copies of the promissory
note at issue, as well as several other documents related to Carter’s loan. One of
these documents was an amended Itemization of Payments that stated that the
interest on Carter’s loan was $12,236.99, as of August 15, 1996, rather than 0, as
set forth in the original itemization. The amended Itemization of Payments further
provided that, as of September 20, 2007, Carter owed $47,799.72 in interest on the
loan.
On August 17, 2011, Carter filed a motion to strike the government’s reply
to her summary judgment response because it had contained new arguments and
evidence, or in the alternative, a motion to defer ruling on summary judgment until
the government responded to her discovery requests, pursuant to Fed.R.Civ.P.
56(d). Specifically, she requested time for further discovery in order to obtain
documents regarding the assignment of the promissory note, the calculation of the
debt, and the person performing the debt analysis.
The government also filed the affidavit of the government’s attorney, who
attested that she sought an award of attorney’s fees for the work she had
completed on the case. Carter responded that the government’s affidavit for
attorney’s fees violated multiple provisions of the district court’s local rules. The
government conceded that the court’s local rules provided that an affidavit of
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attorney’s fees should not be filed until after entry of judgment. Thus, the
government withdrew its request for attorney’s fees.
On November 7, 2011, the magistrate determined that the government had
established a prima facie case of debt owed on a promissory note. Thus, the
burden shifted to Carter to establish that the amount was not due and owing.
However, all of Carter’s arguments were without merit. First, the magistrate
determined that a new copy of the note clearly set forth the interest rates, the
outstanding balance, Carter’s promise to pay, and her signature. Further, the
Addendum to the note, signed by Carter, correctly listed the principal amount of
the loan, and the existence of the debt owed and promise to pay that debt could be
inferred from Carter’s partial payments. The magistrate rejected Carter’s
argument that she was being over-charged in interest, in light of the government’s
filing of the amended Itemization of Payments. The magistrate further rejected her
assertion that the interest rate was never disclosed to her, in light of evidence in
the record showing the nine percent interest rate. The amended Itemization of
Payments credited Carter for $15,205 in payments she had made, and thus, she had
failed to raise a triable issue of fact with respect to the issue of credits.
Carter filed a motion to reconsider the magistrate’s judgment, reiterating her
arguments in her response to the government’s summary judgment motion, as well
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as her arguments in her motion concerning the government’s reply. She attached
an amended Payments to Sallie Mae Chart that set forth payments she had made to
Sallie Mae from 2004 to 2009, and she certified under penalty of perjury that her
chart was true and correct based on her examination of her bank statements.
The magistrate denied Carter’s motion, noting that Carter had failed to file
the amended Payments to Sallie Mae Chart before the magistrate granted summary
judgment, and the amended chart was not supported by bank statements, credit
card statements, canceled checks, or similar proof to illustrate that the payments
were actually made to pay the account at issue. The magistrate determined that
there was no indication that the government raised any new issues in its reply or
that Carter lacked discovery. Despite the government’s summary judgment
motion being under consideration for months, Carter had not filed a sur-reply, but
rather had relied solely upon the motion to strike the reply.
The final judgment ordered Carter to pay the government $50,834.54 in
principal plus $67,599.42 in interest that had accrued through April 18, 2011. The
magistrate also awarded $4,300 in attorney’s fees to the government and stated
that the award was pursuant to the terms of the promissory note executed by
Carter.
II.
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On appeal, Carter argues that the promissory note at issue is a negotiable
instrument and is subject to Florida’s commercial paper law, which requires the
government, before it can recover on the note, to either produce the original note
or provide an explanation for why the original could not be produced. She notes
that the existence of the loan itself is not in dispute. Carter further asserts that the
magistrate erred in discounting the evidence set forth in her Payments to Sallie
Mae Chart and the amended chart. The government incorrectly calculated the
amount of accrued interest, as it had failed to account for a $3,000 overcharge in
accrued interest.2
We review the district court’s grant of summary judgment de novo, viewing
all evidence and drawing all reasonable factual inferences in favor of the
nonmoving party. Penley v. Eslinger, 605 F.3d 843, 848 (11th Cir. 2010).
Summary judgment is appropriate where there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.
2
In her reply brief, Carter argues that the government failed to authenticate various
documents submitted with its summary judgment motion, that the government failed to give her
notice of the instant lawsuit, and that she had cured the 1993 default on the loan and had made
timely payments ever since. Because she raises these arguments for the first time in her reply
brief, they are abandoned. See Timson v. Sampson, 518 F.3d 870, 874 (11th Cir. 2008)
(providing that issues that a pro se appellant failed to raise in his initial brief were abandoned).
We also reject Carter’s arguments concerning errors in the government’s original Itemization of
Payments, as the government filed an amended Itemization of Payments, and the magistrate only
relied on the amended document in his summary judgment order.
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Fed.R.Civ.P. 56(a). We may affirm the district court’s judgment on any ground
that finds support in the record. Lucas v. W.W. Grainger, Inc., 257 F.3d 1249,
1256 (11th Cir. 2001). The nonmovant must meet the movant’s affidavits with
opposing affidavits setting forth specific facts that show there is an issue for trial.
Leigh v. Warner Bros., Inc., 212 F.3d 1210, 1217 (11th Cir. 2000). Conclusory
allegations without specific supporting facts have no probative value. Id.To recover on a promissory note, the government must show (1) the
defendant signed it, (2) the government is the present owner or holder, and (3) the
note is in default. United States v. Lawrence, 276 F.3d 193, 197 (5th Cir. 2001)
(discussing whether summary judgment was properly granted in an action
involving a defaulted student loan).
The government did not have to produce the original promissory note in
order to recover on the note because, as held in persuasive authority, the note is
not a negotiable instrument subject to Florida’s commercial paper law. See
Armstrong v. Accrediting Council for Continuing Educ. and Training, Inc., 168
F.3d 1362, 1364 (D.C. Cir. 1999) (noting that, although guaranteed student loans
often change hands, they were not considered negotiable instruments, and
assignees could not become holders in due course); Veal v. First Am. Sav. Bank,
914 F.2d 909, 913-14, n.6 (7th Cir. 1990) (providing that Federal Insured Student
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Loans and Federal PLUS loans, which involved the government directly entering
into a guaranty agreement with the lender, were not negotiable instruments); see
also United States v. Petroff-Kline, 557 F.3d 285, 290-91 (6th Cir. 2009)
(rejecting defendant’s argument that the original promissory notes had to be
produced, and noting that photocopies are allowed into evidence as if they were
originals, pursuant to Fed.R.Evid. 1003). A promissory note encompassing a
promise to repay a student loan that is guaranteed by the government is not freely
negotiable, but rather it can only be assigned to eligible lenders. See 34 C.F.R.
§ 682.508(c) (providing that the Secretary’s approval is required prior to the
assignment of a note to an eligible lender). Further, under Florida law, an
instrument is negotiable where it contains an unconditional promise to pay a
certain sum on demand or at a definite time. Fla.Stat. § 673.1041(1). However,
student loan contracts do not contain an unconditional promise or order to pay a
certain sum in money because the loans are dischargeable in the event of death or
disability. See 20 U.S.C. § 1087(a)(1). The time and amount of the eventual
repayment obligation are not conclusively established at the time the student signs
the promissory note due to numerous contingencies that are expressly allowed by
operation of federal law. See, e.g., 34 C.F.R. § 682.210 (authorizing deferments
from repayment); 34 C.F.R. § 682.211 (providing that the secretary or the lender
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may forbear from collecting the loan).
The 1991 Promissory Note Addendum, signed by Carter, demonstrates that
the total principal amount of the loan was $41,065.03, and the addendum and her
handwritten letter acknowledging the debt, all demonstrate her promise to pay the
principal amount. Further, although any interest rate on the loan that is set forth in
the promissory note is illegible, the government submitted several documents
setting forth the interest rate on the loan as nine percent, and Carter does not argue
in her initial brief that there is a genuine dispute of material fact with respect to the
interest rate.
In her reply brief, however, Carter does dispute the nine percent interest rate
on the loan because, according to Carter, an August 1991 letter from Sallie Mae
states that the interest rate was nine percent, but also states that the interest rate
was eight percent for the first four years, and then variable thereafter. Because she
raised this argument for the first time in her reply brief, it is abandoned. See
Timson, 518 F.3d at 874.
Next, Carter had the burden of showing whether the government had
properly credited her past payments. See United States v. Irby, 517 F.2d 1042,
1043 (5th Cir. 1975) (providing that the government did not have the burden of
showing that all appropriate credits on the promissory note had been made).
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Carter did not swear to the accuracy of her original Payments to Sallie Mae Chart
that she had attached to her response to the government’s summary judgment
motion. The chart did not indicate whether the amounts paid were related to the
promissory note at issue. Further, Carter did not attach the actual bank statements
from which she had allegedly obtained her payment information or any other
evidence supporting her chart.3 Thus, Carter’s Payments to Sallie Mae Chart
contained conclusory allegations without specific supporting facts, such that it
lacked probative value.
To the extent Carter asserts that the magistrate erred in denying her motion
to reconsider his judgment in favor of the government, we reject her argument.
Attached to Carter’s Fed.R.Civ.P. 60(b) motion was an amended Payments to
Sallie Mae Chart, which she had not previously filed. Carter swore to the
accuracy of the amended chart. However, this evidence was not new, as required
for Fed.R.Civ.P. 60(b) relief, because she has offered no reason as to why she was
unable to file the amended information before the entry of summary judgment. See
Waddell v. Hendry Cnty. Sheriff’s Office, 329 F.3d 1300, 1310 (11th Cir. 2003)
3
Carter cites to Fed.R.Evid. 1006, asserting that the rule expressly permits summaries of
records. However, this rule may only be used to prove the contents of “voluminous” writings,
and the party must make the original records available for examination or copying. Fed.R.Evid.
1006. Here, even assuming that the original bank statements that Carter used to create her
Payments to Sallie Mae Chart constituted “voluminous” writings, Carter did not ever offer to file
the original records or provide them to the government for examination.
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(holding that plaintiffs had no right to Fed.R.Civ.P. 60(b)(2) relief where they
were aware of the “newly discovered evidence” prior to the district court’s entry of
summary judgment). Further, the amended chart lacked supporting evidence, such
as copies of the actual bank statements that Carter used to create the chart. In the
lack of any evidence connecting her payments to Sallie Mae to the instant
promissory note, she has failed to carry her burden and show that the government
had failed to properly credit her past payments.
Carter also argues that the government overcharged her in interest. The
final judgment provides that $67,599.42 in interest had accrued through April 18,
2011. The government’s Certificate of Indebtedness provides that she owed
$47,799.72 in interest on September 20, 2007. According to the Certificate of
Indebtedness, interest accrued on the principal balance of $50,834.54 at the rate of
$12.53 per day. Thus, between September 20, 2007, and April 18, 2011, which is
1,306 days, $16,364.18 in interest should have accrued during this period, for a
total amount of interest of $64,163.90 ($16,364.18 plus $47,799.72), rather than
the amount set forth in the final judgment. As the government has not indicated
that interest was capitalized at any point during the period, there appears to be a
discrepancy in the amount of interest due. Thus, we remand for further findings as
to the amount of interest that has accrued.
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III.
Carter argues that the magistrate erred in denying her motion to strike the
government’s reply because the government raised new arguments and filed new
evidence in its reply. Further, she lacked an opportunity to rebut the new
documents and arguments, as S.D.Fla. L.R. 7.1 prohibits briefs beyond a motion,
response, and reply. Next, the magistrate abused his discretion in not allowing her
additional discovery concerning (1) the assignment of the promissory note,
(2) calculation of the debt the government claimed was owed, (3) information
concerning the person performing the debt analysis, (4) explanations as to the
documents attached for the first time to the reply brief, and (5) the discrepancy
between the evidence showing that her loan had a nine percent interest rate and the
evidence showing that the interest rate was eight percent for the first four years,
and then variable thereafter.
Carter’s Motion to Strike the Government’s Reply Memorandum
We afford great deference to a district court’s interpretation of its local rules
and review a district court’s application of local rules for an abuse of discretion.
Mann v. Taser Int’l, Inc., 588 F.3d 1291, 1302 (11th Cir. 2009). To show an
abuse of discretion, a party must show that the district court made a clear error of
judgment. Id. Pursuant to S.D. Fla. L.R. 7.1, after a movant files a motion, a
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movant may also serve a reply in support of its motion within seven days after
service of the nonmovant’s response. S.D. Fla. L.R. 7.1(c). The reply is strictly
limited to rebuttal of the matters raised in the nonmovant’s response, and no
additional memoranda shall be filed without leave of court. Id.Our review of the government’s reply demonstrates that it did not violate
S.D. Fla. L.R. 7.1(c), and thus, the magistrate did not abuse his discretion in
denying her motion to strike the government’s reply. The government did,
however, file new evidence that it had not previously filed before. As the
magistrate noted in denying Carter’s motion to reconsider the judgment, Carter did
not seek leave of court to file a sur-reply. The local rules allow for additional
memorandum beyond a reply to be filed with the leave of court. See S.D. Fla. L.R.
7.1(c). Thus, had Carter wished to respond to the government’s reply, she could
have sought the magistrate’s leave to do so, but, as she did not, the magistrate was
free to rely on the evidence the government attached to its reply.
Carter’s Fed.R.Civ.P. 56(d) Motion
We review a district court’s denial of a Fed.R.Civ.P. 56(d), motion for an
abuse of discretion and will only overturn such an order where it is shown that the
ruling caused substantial harm to the case of the party opposing summary
judgment. See Harbert Int’l, Inc. v. James, 157 F.3d 1271, 1277 (11th Cir. 1998);
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Fed.R.Civ.P. 56, advisory committee note to the 2010 amendments (providing that
amended subsection(d) set forth the provisions of former subdivision(f) without
substantial change). Under Fed.R.Civ.P. 56(d), if the party opposing summary
judgment shows by affidavit or declaration, for specified reasons, that he cannot
present facts essential to his opposition, the court may: (1) defer the motion for
summary judgment; (2) allow time to obtain affidavits or declarations or to take
discovery; or (3) issue any other appropriate order. Fed.R.Civ.P. 56(d).
Carter asserts that she sought additional discovery regarding the assignment
of the promissory note and explanations for the documents attached for the first
time to the government’s reply. Carter has failed to provide any argument as to
how further discovery as to these issues caused substantial harm to her case on
appeal. It is also not apparent from the record what evidence Carter seeks in
discovery with respect to the assignment of the loan. Furthermore, in the district
court, Carter did not seek additional discovery to obtain “explanations” for the
documents attached to the government’s reply memoradum. Thus, Carter has not
shown that the magistrate abused his discretion in ruling on the government’s
summary judgment motion before allowing her additional discovery as to these
issues. Harbert Int’l, Inc., 157 F.3d at 1277.
Next, Carter has not shown that her failure to obtain additional discovery as
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to the alleged discrepancy regarding the interest rate on the loan caused substantial
harm to her case. Finally, as it appears that the interest that accrued on the loan
was incorrectly calculated, at least on the record before us, further discovery may
be necessary to resolve the amount of interest that had accrued on the loan. We
leave it to the magistrate’s discretion as to whether further discovery is necessary
for resolution of this issue. IV.
Carter asserts that the magistrate erred in awarding attorney’s fees to the
government where there was no contractual provision providing for attorney’s
fees, the government had withdrawn its request because it violated local rules, and
Carter’s objections to the amount sought were not addressed.
We review a district court’s award of fees for abuse of discretion.
McKenzie v. Cooper, Levins & Pastko, Inc., 990 F.2d 1183, 1184 (11th Cir. 1993).
The district court has great latitude in formulating an award of attorney’s fees, and
this latitude is subject only to the necessity of explaining the court’s reasoning so
that we can undertake our review. Id.Here, the magistrate appears to have adopted, without change, the
government’s draft order concerning an award of attorney’s fees, despite the
government withdrawing its request for attorney’s fees to which the order was
attached. Further, Carter filed numerous objections to an award of attorney’s fees,
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and the magistrate never addressed any of her objections in awarding the fees.
The only explanation provided in the order for the award of attorney’s fees was
that they were provided for in the underlying contract. However, the promissory
note had no legible term concerning an award of attorney’s fees. As there is
nothing else in the record explaining the basis for this award, the magistrate did
not address Carter’s objections to the award, and the government withdrew its
request for attorney’s fees, we remand to the magistrate for further proceedings as
to whether an award of attorney’s fees is warranted.
For the foregoing reasons, we affirm the magistrate’s grant of summary
judgment in favor of the government except to the extent he determined that the
interest on the loan had been correctly calculated, vacate the magistrate’s summary
judgment concerning the accrued interest on the loan and award of attorney’s fees,
and remand to the district court for further proceedings consistent with this
opinion.
AFFIRMED in part, VACATED in part, and REMANDED in part.
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