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August 1, 2001


The opinion of the court was delivered by: Sweet, D.J.,

  O P I N I O N

Defendant Payco General American Credits, Inc., n/k/a OSI Collection Service, Inc. ("Payco") has moved for summary judgment and attorneys' fees pursuant to Fed.R.Civ.P. 56. Plaintiff Lisa Ayn Padilla ("Padilla"), an attorney proceeding pro se, has opposed the motion and cross filed for summary judgment and "pro se attorney's fees." For the reasons set forth below, the motions will be granted in part and denied in part.

The Parties

Padilla is an attorney who resides in New York and is admitted to the New York bar.

Defendant Payco is a debt collection corporation with headquarters in Ohio which has attempted to collect debt from Padilla arising out of student loans that were guaranteed by non-party, USA Funds ("USAF").


The Loan, Default, and Referral to Payco

The gravamen of the amended complaint is that Payco violated various laws while attempting to collect student loans Padilla used to finance her college and law school education. The relationship between the parties began when Padilla executed a series of promissory notes, which were subsequently consolidated with Sallie Mae.*fn1 She alleges that the notes did not include a rate of interest on the consolidated loans, but did include provisions that simple interest would be calculated on the unpaid principal, and that she could pre-pay principal without penalty. In addition, the notes provided for the assessment of reasonable collection fees in the event of her default.

Padilla alleges that the loans were improperly placed in default on July 24, 1990, while she was attending Boston University's School of Law Taxation Program and taking sufficient credits to warrant loan deferral. Sallie Mae reports that Padilla defa ulted on the loan on August 31, 1991, then in the principal amount of $34,588,45. (Cline Aff.) USAF reimbursed Sallie Mae on or about that date and referred the case to Payco for collection on September 11, 1991. (Id. ; Apr. 27, 2001 Nash Aff.) In October 1990, Padilla was involved in a severe car accident that incapacitated her for a period of time thereafter, during which she made no payments.

Inaccurate Reporting of Loan Status

Although she states that she has timely paid the agreed-upon amount of $231.97 per month since October 1993, Padilla alleges that Payco has inaccurately reported to credit agencies her payment history. Payco contends that it never reported any false information about her debt to anyone. (Nash Aff. Ex. A.)

More over, Payco contends that it notified Padilla repeatedly in 1993 that monthly payments of $231.97 would be insufficient to cover even the interest that continued to accrue, but that she persisted in sending checks for that amount. (May 21, 2001 Nash Aff.)

Improper Contact with Third Parties

In the spring of 1997, Payco contacted Padilla at home regarding the loans, which by June 6 had grown to $42,552.32 plus $8,116.83 in interest. She returned the call from her workplace and requested that Payco not telephone her, but that she would contact them. Payco nonetheless repeatedly called her at work.

She alleges that Payco employees Ron James and Gary Wagner improperly contacted her employer and asked the receptionist to give them information about Padilla's salary and pay schedule. (Amd. Compl.) Her motion alleges that Wagner told the receptionist that Padilla had defaulted on her loan (Pltf. Opp. Br. Ex. C at 9-10), but facts alleged in legal briefs are not appropriately considered. See, e.g., O'Brien v. National Property Analysts Partners, 719 F. Supp. 222, 229 (S.D.N.Y. 1989) (stating that "it is axiomatic that the complaint cannot be amended by the briefs in opposition to a motion to dismiss").

Moreover, Padilla's contention is directly contradicted by the evidence she has submitted. When asked during her deposition to state specifically what Payco agents said to the receptionist, Padilla stated that the receptionist told her the following:

She said, who was this guy who was telling me all this stuff, looking for human resources, wanted to know whether you worked there, whether or not you got paid regularly . . . She told me that Payco called, she told me that whoever it was was looking for information about me, about my position and about payroll time, that he wanted to talk to human resources and I think that's it.

(Pltf. Opp. Br. Ex. E at 77, 78-9.) Padilla has not submitted an affidavit from the receptionist. Payco's records reflect that 5 although Payco agents spoke with the receptionist on several occasions in an attempt to reach Padilla, they did not discuss Padilla's loan in those calls. (Apr. 27, 2001 Nash Aff.; Pltf. Opp. Br. Ex. D.*fn2) The only entries that reflect any substantive conversation were three calls seeking to speak to human resources on July 15 at 8:57am*fn3, 9:59 am*fn4, and 2:17 pm.*fn5


Padilla contends that Payco threatened that her default status authorized them to renege on their agreement and to refer her case for further collection proceedings, and to attach her paycheck and IRS refund, if any. However, they never did so, and Padilla asserts that the threats were made with no intention actually to carry them out, but solely to harass her.

Demanding Post-Dated Checks

Instead, she alleges that during a telephone conversation on June 19, Payco employee Gary Wagner demanded an additional twelve post-dated checks for the monthly amount of $231.97 to cover the $10,000 shortfall in exchange for refraining from further collection efforts. (Amd. Compl.; Pltf. Opp. Br. Ex. E at 96.) Payco has no records reflecting such a demand and notes that all of its employees were aware that such a demand would violate Massachusetts law. (May 21, 2001 Nash Aff.) The telephone log reflects that a Payco employee called Padilla on June 19 to ask whether she had sent in payment in full, but she stated that she did not have the money but thought she might be able to pay $10,000 down in 30 days if she received something in writing, but would continue to make monthly payments. (Pltf. Opp. Br. Ex. D.)*fn6 Padilla's notes of the June 19 conversation reflect that Payco "recommends post dated checks" (Pltf. Opp. Br. Ex. D.)

Oral Agreement to Remit $10,000 Toward Principal

Padilla alleges that in August, 1997, she and Payco orally agreed that she would remit $10,000 toward principal, and that Payco would remove references to the late payment in her credit report to reflect current pay status, and would "zero out" attorneys' and collection fees. At the time of this agreement, Payco allegedly refused to record it in writing until it received the $10,000. Padilla's mother mailed a $10,000 check to Payco the same month stating "applied to principal" on the memo line.*fn7 Padilla alleges that Payco's promise to apply the $10,000 toward principal was a fraudulent misrepresentation, because it later refused to honor the agreement and instead applied the $10,000 toward the overdue interest pursuant to federal laws.*fn8

Payco, on the other hand, contends that by law it must apply payments toward interest before principal, and that Padilla agreed to abide by this practice when she signed the notes. Payco's records do not reflect any agreement to apply the down payment toward principal, but do reflect that Padilla said she wanted to pay $10,000 down on principal only and continue paying $231 thereafter, and needed a letter to that effect before she would make the payment. (Apr. 27, 2001 Nash Aff.; Pltf. Opp. Br. Ex. D*fn9) Padilla's datebook notes ...

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