The opinion of the court was delivered by: BLOCK
This case arises out of a conceded default by defendant Kamau Bendele Kokayi, M.D. ("Kokayi") in the repayment of scholarship funds that he received from the National Health Services Corps ("NHSC") Scholarship Program. See 42 U.S.C. § 2541 et seq. Plaintiff United States of America ("United States") moves the Court for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Kokayi cross moves for summary judgment, arguing that this action is barred by the six-year statute of limitations applicable to contract actions. 28 U.S.C. § 2415(a). The Court concludes that this action is not time-barred and that the United States has established that it is entitled to judgment as a matter of law. Accordingly, the United States's motion for summary judgment is granted and Kokayi's cross motion for summary judgment is denied.
In May of 1979, Kokayi applied for participation in the NHSC Scholarship program, which is administered by the United States Department of Health and Human Services ("HHS"), in order to finance his education at the Yale University School of Medicine. Kokayi received scholarship funds for academic years 1979-1980 and 1981-1982. In order to receive these funds, Kokayi signed a contract which, inter alia, obligated him to perform one year of full-time clinical service for each year the scholarship award was provided, with a minimum obligation of two years. Kokayi would be required to perform this service in a geographical area that suffered from a shortage of health care providers. The contract also provided that in the event that Kokayi breached the agreement, the United States would be entitled to recover damages equaling three times the scholarship funds awarded, plus interest thereon.
Kokayi graduated from medical school in May of 1982 and was granted a three-year deferment from NHSC so that he could complete his family practice residency. In 1984, however, NHSC sent Kokayi literature regarding its 1985 placement program. NHSC advised Kokayi that the placement process consisted of three steps. Under the Early Decision Alternative ("EDA"), Kokayi had until October 31, 1984 to select any approved site in the country that was contained on the Health Manpower Shortage Area Placement Opportunity List ("HPOL"). If he failed to take advantage of the EDA, he would be assigned to a specific state based upon his responses to a Site Selection Questionnaire. If he did not obtain employment at a site in the assigned state by April 15, 1985, NHSC itself would assign him to a specific site.
Thereafter, Kokayi requested that he be assigned to a family practice site within New York City. He was advised that NHSC had not approved any positions for family practitioners in New York City and was encouraged to use the EDA to obtain placement as close as possible to New York City. Kokayi took no action, and after the deadline for the EDA had passed, NHSC assigned Kokayi to the State of New York based upon his answers to the Site Selection Questionnaire. He was advised to contact the regional office in order to initiate the process of "matching" with a placement site. NHSC also informed him that if he failed to match with a site in New York by April 15, 1985, NHSC would select a site for him, which site would not necessarily be within New York State.
After Kokayi failed to initiate the matching process by the April 15 deadline, the NHSC assigned him to serve in Gasden, Alabama. Kokayi objected to this placement on social and cultural grounds, and he was subsequently reassigned to Gary, Indiana. In July of 1985, Kokayi advised NHSC that he was declining the Gary, Indiana appointment and would remain in practice in Brooklyn's Bedford-Stuyvesant neighborhood. Thereafter, NHSC notified Kokayi that he had been placed in default of his scholarship service obligation as of July 1, 1985, and that he was consequently liable for damages pursuant to 42 U.S.C. § 254o(b)(1)(A).
In 1986, NHSC twice agreed to execute a forbearance agreement in order to give Kokayi the opportunity to fulfill his obligation through service; however, Kokayi declined. Also in 1986, Kokayi sought a hardship waiver of his scholarship debt, which request for waiver was denied. In 1988, however, Kokayi was offered the opportunity to participate in the Special Repayment Program ("SRP"), which had been authorized by § 204 of Public Law 100-177, 101 Stat. 1000 (1987). Kokayi elected to participate in the SRP and signed a contract in which he agreed to "match to a site on the 1989 [Supplemental Health Manpower Shortage Area Placement Opportunity List] by February 15, 1989, and begin service . . . at that site by October 1, 1989." Thereafter, Kokayi sought to have his then-employer Kings County Hospital Center designated and approved as a SHPOL site. The NHSC declined this request. Kokayi did not match to a site by the May 15, 1989 deadline, and did not accept a subsequent offer to serve pursuant to a forbearance agreement. This action was commenced on June 18, 1993. These motions followed.
The NHSC Scholarship Program is intended "to improve the delivery of medical services in health manpower shortage areas." Rendleman v. Bowen (Rendleman I), 860 F.2d 1537, 1541 (9th Cir. 1988). "The program is not intended 'as a mechanism solely to subsidize health professional education,' but 'as a means to overcome a geographic maldistribution of health professionals.'" Id. (quoting S.Rep. No. 94-887, 94th Cong., 1st Sess. 201 (1975)). Courts considering the issue have held that the Secretary of HHS ("Secretary") has virtually unlimited discretion in determining how to administer the program, including the assignment of physicians to specific sites on the HPOL. See Rendleman v. Shalala (Rendleman II), 21 F.3d 957, 963 (9th Cir. 1993); United States v. Arron, 954 F.2d 249, 252 (5th Cir. 1992).
Preliminarily, the standard for reviewing a motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure is well-established. A motion for summary judgment may not be granted unless the court determines that there is no genuine issue of material fact to be tried and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). The burden is upon the moving party to show that no genuine issue of material fact exists, and all ambiguities must be resolved, and all inferences drawn, in favor of the nonmoving party. See Gallo v. Prudential Residential Servs., 22 F.3d 1219, 1223 (2d Cir. 1994). The Court's role in reviewing a motion for summary judgment is not "to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986).
The United States has produced ample documentary evidence supporting its claim that Kokayi is in default of his service obligations and has failed to repay his scholarship funds. Indeed, Kokayi does not contest that he has defaulted in his repayment obligations. His primary argument in opposition to the United States's motion is that this action is time-barred. The six-year statute of limitations applicable to contract actions has been held to apply to actions based on a default in obligations imposed by an NHSC contract. 28 U.S.C. § 2415(a); see United States v. Bloom, 112 F.3d 200, 204 (5th Cir. 1997); United States v. Westerband-Garcia, 35 F.3d 418, 420-422 (9th Cir. 1994); United States v. Maldonado, 867 F. Supp. 1184, 1190 (S.D.N.Y. 1994). Kokayi's contract provided that money damages based upon his failure to serve were to be paid "within one year of the date the Secretary determines that the applicant has failed to begin or complete the period of obligated service." This provision is based upon 42 U.S.C. § 254o(b)(1)(B)(i), which states, in pertinent part, that "any amount of damages that the United States is entitled to recover under this subsection . . . shall, within the 1-year period beginning on the date of the breach of the written contract (or such longer period beginning on such date as specified by the Secretary), be paid to the United States." Courts considering this issue have held that the United States's right of action for recovery of the debt does not accrue until this one-year grace period has expired. See Maldonado, 867 F. Supp. at 1191. In this case, Kokayi defaulted on his service obligation as of July 1, 1985. Thus, the United States's cause of action accrued on July 1, 1986, when Kokayi's payment became due. As this action was not commenced until June 18, 1993, this action is clearly time-barred, absent some tolling of the statute of limitations.
The United States argues that the statute of limitations was tolled for a period of approximately fourteen months, from March 29, 1988 until May 15, 1989, and that its action is therefore timely. The relevant statutory provisions are contained at Pub. L. No. 100-177, 101 Stat. 1000, §§ 204(a)(3) and 204(a)(4) (1987), which were enacted as part of the SRP. Section 204(a)(3) provides that an individual who is notified by the Secretary of HHS that he or she may participate in the SRP "may notify the Secretary that the individual intends to enter into a written contract with the Secretary to provide service" to the NHSC. More significantly for purposes of this action, § 204(a)(4) provides that "if an individual provides notice under paragraph (3), the statute of limitations established by section 2415 of title 28, United States Code, shall be tolled from the time the Secretary receives ...