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Mohammad v. New York State Higher Education Services Corp.

June 1, 2009


The opinion of the court was delivered by: John Gleeson, United States District Judge


Maher Fadel Mohammad brings this action against the New York State Higher Education Services Corporation ("HESC"), Jeffrey S. Doerr and Overton, Russell & Doerr. The case pertains to a 1990 default judgment entered against Mohammad for defaulting on a student loan of approximately $14,000 received in 1983, which Mohammad alleges was "paid in full on 1987, 1989, 1990." Compl., Ex. A, ¶ 1. Mohammad is seeking reimbursement of funds taken from his tax refunds and other accounts to satisfy that judgment and well as "$1,000,000.00 per year starting from November 20, 1990 until the end of This Case for the damages" arising out of alleged discrimination and violation of his rights. Compl. ¶ 4B.

HESC moves to dismiss the complaint for failure to meet the pleading requirement pursuant to Fed. R. Civ. P. 8(a), lack of subject matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1) and failure to state a claim upon which relief may be granted pursuant to Fed. R. Civ. P. 12(b)(6). I heard argument on the motions on May 29, 2009. For the reasons stated below the motion is granted.


A. The Relevant Statutory and Regulatory Framework

HESC is an educational corporation and an agency of the State of New York, created pursuant to § 652 of the New York Education Law to administer the Federal Family Education Loan Program ("FFELP") in New York State. See 20 U.S.C. § 1071, et. seq.; N.Y. Educ. Law § 652. HESC guarantees higher education loans made by private lenders under FFELP to New York State residents and persons attending colleges or vocational schools in the state. See N.Y. Educ. Law. § 680(1)(b); 20 U.S.C. § 1085(j). If a borrower defaults, HESC reimburses the holder of the loan, and is then reimbursed by the U.S. Secretary of Education under a reimbursement agreement. See 20 U.S.C. § 1078(c). HESC is then authorized to collect on the defaulted loan from the debtor. See id.; 34 C.F.R. § 682.410(b)(5)-(6) (noting that the guaranty agency, such as HESC, "must engage in reasonable and documented collection activities on a loan on which it pays a default claim filed by a lender" and is required to report the default to all national credit bureaus).

B. The Facts

The following facts are drawn from Mohammad's pro se complaint, filed December 4, 2008, and documents attached to and incorporated by reference in that complaint, and are assumed to be true for the purposes of this motion.*fn1 In addition, I take judicial notice of certain facts as noted below.

Mohammad borrowed $14,000 in student loans in 1983.*fn2 Compl., Ex. A. These loans were guaranteed by HESC. Dahlberg Decl., Ex. 2.

On May 31, 2008, Mohammad wrote a letter to the HESC explaining the following: In 1987, 1989, and 1990, he paid back in full a loan taken out in 1983 in the amount of $14,000.*fn3 Compl., Ex. A. In 1990, he left New York State for a period of approximately 10 years. In 2000-2001, he opened a wholesale business (presumably in New York), which was destroyed as a result of the terrorist attacks on September 11, 2001, as were the documents demonstrating payment of his student loan. At the end of 2001, Mohammad received a statement from HESC stating that he owed $42,000. During the period of 2001-2006, Mohammad's tax refunds were applied to this debt. Credit agencies learned of the judgment against him, and as a result he was unable to obtain employment, insurance, business loans or mortgages.

In 2002, Mohammad wrote to the HESC and the lawyer responsible for collection of the debt. He argued that the judgment was improper and complained that it was causing him $1,000,000 per year in "damage." In 2007, Mohammad requested to settle the matter with the party responsible for collection, DGS, and to begin to make minimum payments, but he never received any response. He wanted to commence payment after the total amount due was reduced and his name was removed from the public record and "clear[ed] . from all these coolections [sic]." Id. at 2. In addition, Mohammad's May 31, 2008 letter referenced a seemingly unrelated judgment of September 11, 2002, in which he was awarded $18,400, and offered that HESC "collect it and take what ever you want and give me the balance." Id. Mohammad stated that he does not have proof that he satisfied his student loan because he was a victim of September 11, 2001. Finally, Mohammad noted that if it could ever be proven that he had in fact repaid the loan, he would demand damages in the amount of $1,000,000 per year starting from 1990. Id.

In addition to these facts, I take judicial notice of the state action brought by HESC in August 1990 against Mohammad to collect the defaulted student loan, and of the default judgment HESC obtained from the New York Supreme Court, County of Albany, in November 1990 against Mohammad in the amount of $22,148.53 (the principal and accrued interest as of that date). See Dahlberg Decl., Exs. 1 & 2.

Other exhibits attached to the complaint set forth additional information. By letter dated August 22, 2002, Mohammad, (here listed with an alias -- a.k.a. Fadel Kasem) received a letter from attorneys for HESC at Overton, Russell and Doerr, who were acting as debt collectors for HESC. The letter notified Mohammad of the judgment against him in the 1990 case, informed him that money or property belonging to him may have been taken to satisfy that judgment, and advised him of his right to recover "exempt" money. Compl., Ex. E. Overton, Russell and Doerr sent Mohammad another letter dated March 19, 2004, enclosing a subpoena and questionnaire regarding collection of the debt. Compl., Ex. F. Mohammad completed a different "information subpoena questionnaire" form and had it notarized on ...

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