Hough v. Pennsylvania Higher Education Assistance Agency (In Re Hough)

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
For the Fifth Circuit April 12, 2005
Charles R. Fulbruge III
Clerk
No. 04-10828
Summary Calendar
In the Matter of: MICHAEL CARTER HOUGH,
Debtor,
MICHAEL CARTER HOUGH,
Appellant,
VERSUS
PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY; EDUCATION
RESOURCES INSTITUTE; KEY BANK USA; KEY CORP TRUST/AES; AES
GRADUATE LOAN CENTER,
Appellees.
Appeal from the United States District Court
For the Northern District of Texas
Dallas Division
CA 3:03-CV-2329-R
Before DAVIS, SMITH and DENNIS Circuit Judges.
PER CURIAM:*
Appellant Michael Carter Hough (“Hough”) challenges the
district court’s order affirming the bankruptcy court which held
*
Pursuant to 5TH CIR. R. 47.5, the Court has determined that this
opinion should not be published and is not precedent except under
the limited circumstances set forth in 5TH CIR. R. 47.5.4.
that his student loans owed to the Pennsylvania Higher Education
Assistance Agency (“PHEAA”) were non-dischargeable under 11 U.S.C.
§ 523 (a)(8). Because the bankruptcy court did not clearly err in
finding that Hough failed to show he would suffer an “undue
hardship” if his student loans were not discharged, we AFFIRM the
district court’s judgment.
I.
Hough was diagnosed with bipolar disorder in 1980. Since
his diagnosis, he earned J.D. and Masters in Business
Administration degrees and worked in various professional fields.
Hough graduated from law school in 1995 and passed the Texas Bar
Exam in 1996. While in law school, Hough accumulated $72,837.69
in student loans from PHEAA, some of which were guaranteed by The
Education Resources Institute (“TERI”), a non-profit group that
guarantees student loans. Hough is currently 55 years old and
single with no dependents.
In February 2002, Hough filed for voluntary Chapter 7
bankruptcy protection. He then filed an adversarial proceeding
against PHEAA and TERI seeking to have his student loans
discharged under the “undue hardship” exception in 11 U.S.C. §
523 (a)(8).2 Hough argued that his bipolar disorder prevents
2
Section 523 (a)(8) of the Bankruptcy Code provides in pertinent
part:
(a) A discharge under section 727, 1141, 1228 (a), or 1328
(b), of this title does not discharge an individual
debtor from any debt-
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him, now and in the future, from obtaining and maintaining the
gainful employment necessary to repay his student loans.
Rejecting this argument, the bankruptcy court held that Hough
failed to satisfy his burden of proving “undue hardship” as
interpreted by Brunner v. New York State Higher Education Servs.
Corp., 831 F.2d 395 (2d Cir. 1987).3 To show “undue hardship”
under the Brunner test, a debtor must prove:
(1) that he cannot maintain, based on current
income and expenses, a “minimal” standard of
living for himself and his dependents;
(2) that additional circumstances exist
indicating that this state of affairs is
likely to persist for a significant portion
of the repayment period of his student loans;
(3) that he has made a good faith effort to repay
the loans.
Id. at 396.
II.
The critical issue before the bankruptcy court was whether
(8) for an education benefit overpayment or loan made,
insured, or guaranteed by a governmental unit, or made
under any program funded in whole or in part by a
governmental unit or nonprofit institution, or for an
obligation to repay funds received as an educational
benefit, scholarship, or stipend, unless excepting
such debt from discharge under this paragraph will
impose an undue hardship on the debtor and the
debtor’s dependents.
11 U.S.C. § 523 (a)(8) (West 2003) (Emphasis added).
3
The parties stipulated before the bankruptcy court that
Brunner’s three-part test was controlling in this case.
3
Hough satisfied the second prong of Brunner.4 After a two and a
half day trial, in which Hough represented himself pro se and
presented evidence and expert testimony regarding both his
condition and future employment prospects, the court concluded:
Debtor’s expert and other evidence concerning his
future employment prospects was questionable at best.
The evidence was certainly belied by Debtor’s laudable
courtroom activities. Debtor has legal, evidentiary,
and organizational skills. If he is not able to, or
not interested in, work as a lawyer, he may be able to
use his skills in debt collection, or as a paralegal,
where the stress level would be less. Such a finding
also precludes a finding by the Court of the second
prong of the Brunner test.
R. 61.
On appeal to the district court, Hough challenged this
factual finding as well as other legal findings from the
bankruptcy court, but did not provide the district court with a
transcript of the challenged bankruptcy proceedings. The
district court concluded that, without a transcript, it could not
review the evidence to assess Hough’s argument that the
bankruptcy court made incorrect factual findings. Therefore, the
district court dismissed Hough’s claim that his student loans
were dischargeable.
“If the appellant intends to urge on appeal that a finding
or conclusion is unsupported by the evidence or is contrary to
the evidence, the appellant must include in the record a
transcript of all evidence relevant to that finding or
4
The parties also stipulated before the bankruptcy court that
Hough had satisfied the first prong of Brunner’s three-part test.
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conclusion.” FED. R. APP. P. 10 (b)(2). In addition, we have
held that “[t]he failure of an appellant to provide a transcript
is a proper ground for dismissal of an appeal.” RecoverEdge L.P.
v. Pentecost, 44 F.3d 1284, 1289 (5th Cir. 1995) (internal
citation omitted). Thus, the district court correctly declined
to weigh the sufficiency of the evidence without a transcript.
Appellant also challenges a number of legal conclusions by
the bankruptcy court, such as the finding that, because Hough had
a pre-existing condition in this case, he cannot satisfy the
second prong of the Brunner test. However, if we accept as true
the factual findings of the bankruptcy court, these legal issues
become superfluous. Accordingly, the district court’s judgment
must be affirmed.
III.
For the foregoing reasons, the district court’s judgment is
AFFIRMED.
AFFIRMED.
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