United States District Court, N.D. New York
HON. RICHARD S. HARTUNIAN, U.S. Attorney for the Northern District of New York, WILLIAM F. LARKIN, ESQ., Assistant U.S. Attorney, Syracuse, NY, Counsel for Plaintiff.
CRAIG R. FRITZSCH, ESQ., OFFICE OF CRAIG R. FRITZSCH, Binghamton, NY, Defendant, Pro Se.
GLENN T. SUDDABY, District Judge.
Currently before the Court, in this student-loan recovery action filed by the United States of America ("Plaintiff") against Craig R. Fritzsch ("Defendant"), is Plaintiff's motion for partial summary judgment. (Dkt. No. 11.) For the reasons set forth below, Plaintiff's motion is granted.
I. RELEVANT BACKGROUND
A. Plaintiff's Complaint and Defendant's Answer
Generally, liberally construed, Plaintiff's Complaint alleges that, in 1980 and 1981, Defendant executed promissory notes to secure student loans totaling $15, 000 at seven percent interest per year, paid $3, 383.85 of the principle owed on the loans, and then defaulted on the outstanding principle owed on the loans ($11, 616.15) on July 16, 1990, incurring interest in the amount of $9, 342.42 through the November 24, 2010. ( See generally Dkt. No. 1 [Plf.'s Compl.].) Plaintiff's Complaint also alleges that (1) while the notes were originally issued by the Permanent Savings Bank, they were guaranteed by the New York State Higher Education Services Corporation, and (2) when the guarantor was unable to collect the full amount due, it assigned its right and title to the loans to the U.S. Department of Education on November 2, 2005. ( Id. ) Familiarity with the factual allegations supporting this claim in Plaintiff's Complaint is assumed in this Decision and Order, which is intended primarily for the review of the parties. ( Id. )
Generally, liberally construed, Defendant's Answer denies Plaintiff's allegations, and asserts, inter alia, that (1) Plaintiff's claim is barred by the doctrine of res judicata (because the claim was previously dismissed by the Binghamton City Court on April 15, 1996), and (2) Plaintiff is not a "party in interest" for purposes of this action (because Plaintiff has not alleged that it was assigned the notes by the entity to which the New York State Higher Education Services Corporation assigned the notes, i.e., the Educational Credit Management Corporation). ( See generally Dkt. No. 5 [Def.'s Answer].) Familiarity with the remaining statements in Defendant's Answer, as well as the two counter-claims in that Answer, is assumed in this Decision and Order, which (again) is intended primarily for the review of the parties. ( Id. )
B. Parties' Briefing on Plaintiff's Motion
Generally, in its motion, Plaintiff requests a judgment declaring that the doctrine of res judicata is not available as a defense to Plaintiff's Complaint. ( See generally Dkt. No. 11, Attach. 2 [Plf.'s Memo. of Law].). In support of its motion, Plaintiff argues that the doctrine of res judicata does not apply because (1) one of the elements required for the doctrine to apply is that the prior dismissal was "on the merits, " (2) under New York State law, a dismissal for failure to prosecute is not a dismissal "on the merits" for purposes of res judicata, unless the court's order of dismissal so specifies (a point of law expressly recognized in New York State cases), (3) here, the state court's order of dismissal did not specify that the dismissal was "on the merits, " and (4) indeed, the state court expressly reached this same conclusion in its Decision/Order of January 12, 2012. ( Id. )
Generally, in his response to Plaintiff's motion, Defendant argues that Plaintiff lacks the right to request a ruling that the doctrine of res judicata does not apply because Plaintiff is not the holder in due course of the alleged notes, as evident from the fact that (1) the Certificate of Indebtedness attached to the Complaint indicates that Plaintiff was assigned the notes on a date (i.e., November 2, 2005) that was different than the date of assignment stated on the affidavits submitted by the New York State Higher Education Services Corporation in the action in Binghamton City Court (i.e., May 15, 1997), (2) there is no allegation that the notes were ever assigned to Plaintiff by the entity to which the New York State Higher Education Services Corporation assigned them (i.e., the Educational Credit Management Corporation), (3) the Educational Credit Management Corporation previous agreed "by their positive acts" that it had no basis to pursue collection efforts against Defendant, and (4) the copies of the notes adduced by Plaintiff bear stamps and signatures from unknown individuals on behalf of now-defunct corporations, rather than a corporate resolution authorizing the individuals to assign the notes. ( See generally Dkt. No. 13 [Def.'s Opp'n Papers].)
Generally in its reply, the Government argues that (1) Defendant has failed to submit a Response to Plaintiff's Rule 7.1 Statement as required by the Local Rules of Practice for the Court, thus lightening Plaintiff's burden on its motion, and (2) Defendant's opposition papers should be disregarded because they consist of an "affirm[ation]" that lacks either a verification or notarization, contains legal arguments in violation of Local Rule 7.1(a)(3), and fails to attach any admissible record evidence. ( See generally Dkt. No. 14 [Plf.'s Reply Memo. of Law].)
C. Undisputed Material Facts
Generally, the following facts are asserted in Plaintiff's Statement of Material Fact ("Rule 7.1 Statement") and not expressly denied with a supporting record citation by Defendant in his opposition to Plaintiff's motion. ( Compare Dkt. No. 11, Attach. 5 ...