Touma v. Sallie Mae Inc

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U.S. GOVERNMENT
INFORMATION
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PILED @ ENTERED
NOT FOR PUBLICATION

MAY 01 2015

CLERK U.S. BANKRUPTCY COURT
Central District of Califomia
BY Bever DEPUTY CLERK

UNITED STATES BANKRUPTCY COURT

CENTRAL DISTRICT OF CALIFORNIA

SAN FERNANDO VALLEY DIVISION

In re: Case No.: 1:14-bk-13028-MB
MARILU F. TOUMA, Chapter 7
Debtor. Adv. Proc. No. 1:14-ap-01155-MB

MARILU TOUMA,

MEMORANDUM OF DECISION

Hearing

Plaintiff, Date: April 22, 2015

V.

Time: 10:30 a.m.
Place: Courtroom 303
21041 Burbank Blvd

NAVIENT SOLUTIONS, INC. f/k/a SALLIE Woodland Hills, CA 91367

MAE, INC. and SLM CORPORATION,

Defendants.

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In this Adversary Proceeding, plaintiff Marilu F. Touma (“Plaintiff”), a pro se chapter 7
debtor, seeks a discharge of her educational loan debt under Bankruptcy Code section 523(a)(8),
on the ground that repayment would constitute an “undue hardship” within the meaning of that
statute. 11 U.S.C. § 523(a)(8). Ms. Touma regrets having to seek relief, but contends that her
financial condition and various physical and emotional disabilities render repayment of her
educational loan debt impractical.
The holder of these private educational loans, defendant Navient Solutions, Inc.
(“Navient”), has conceded that repayment of these loans would indeed constitute an “undue
hardship” for Plaintiff and has consented to the relief requested in the Adversary Proceeding, on
behalf of itself and defendant SLM Corporation (together with Navient, “Defendants”).
Accordingly, the Court will enter judgment in favor of Plaintiff. We write, however, to briefly
clarify the procedural posture of the Adversary Proceeding and the disposition of the various
motions pending therein.
* * *
Plaintiff commenced her chapter 7 case on June 18, 2014 (Case Dkt. 1). On July 22, 2014,
the chapter 7 trustee assigned to her case, David Seror, filed a Report of No Distribution (Case
Dkt. 12). On September 5, 2014, Plaintiff filed her complaint commencing this Adversary
Proceeding. (Adv. Dkt. 1). On September 29, 2014, the Court entered a discharge in favor of
Plaintiff (Case Dkt. 15) and, on February 12, 2015, closed her chapter 7 case (Case Dkt. 17).
Defendant answered the original complaint on October 13, 2014 (Adv. Dkt. 6), after which
time Plaintiff filed a series of amended complaints without leave of Court. See Adv. Dkt. 7
(November 4, 2014), 16 (January 26, 2015), 20 (March 19, 2015). None of the amended
complaints substantially altered the relief requested, but instead provided incrementally more and
updated information in support of Plaintiff’s cause of action for a discharge.
The Defendants have identified the four loans as follows, with approximate loan balances
as of the commencement of the Adversary Proceeding (the “Education Loans”):
a. one (1) educational loan disbursed on March 17, 2000, with a balance, as of
September 5, 2004, including principal, interest and fees, totaling $22,829.80;
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b. one (1) educational loan disbursed on September 1, 2005, with a balance, as of
September 5, 2004, including principal and interest, totaling $106,721.00;
c. one (1) educational loan disbursed on July 24, 2006, with a balance, as of
September 5, 2004, including principal and interest, totaling $72,710.74; and
d. one (1) educational loan disbursed on August 10, 2007, with a balance, as of
September 5, 2004, including principal and interest, totaling $49,536.84.
Defendants’ Motion at 2. Based on information provided to Plaintiff by the servicer, these four
loans are administered under Navient account number 9124221298, and are identified respectively
as ID # 1-03, Acc. #5029-3507-0281-4026, Acc. # 5029-3507-0281-4034, Acc. # 5029-3507-
0281-4042. See Amended Complaint filed March 19, 2015.
On April 22, 2015, the Court held a status conference in this Adversary Proceeding and a
hearing on two pending motions: Navient Solutions, Inc.’s Motion to Enter Judgment for the
Plaintiff and For Dismissal of This Adversary Proceeding (Adv. Dkt. 18) (“Defendants’ Motion”)
and Plaintiff’s Motion to Enter Summary Judgment in Favor of the Plaintiff in this Adversary
Proceeding (Adv. Dkt. 40) (“Plaintiff’s Motion”). Plaintiff appeared on her own behalf and
Robert S. Lampl appeared on behalf of the Defendants.
It is evident from both motions and the parties’ representations at the hearing that
Defendants have been attempting to bring this Adversary Proceeding to a conclusion in favor of
Plaintiff , but that the parties have not been able to agree on the terms of a written stipulation.
Plaintiff, for instance, has sought a detailed acknowledgement by Defendants of her physical and
emotional conditions. The Defendants, in turn, have declined to include such an
acknowledgement on the basis that their consent to the relief requested renders any such
acknowledgement unnecessary.
The Court concludes that it is unnecessary to wade through the thicket of allegations and
arguments regarding what should or should not be included in a stipulation between the parties.
The Court does not have the authority to dictate the terms of a settlement. The Court, however,
does have the statutory and constitutional authority to enter final judgment in this matter, a core
matter arising under title 11. See 28 U.S.C. § 1334, 28 U.S.C. § 157(b); 11 U.S.C. § 523(a).
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Moreover, where the Defendants consent to the relief, there is no controversy remaining for the
Court to adjudicate.
On the record of the April 22, 2015 hearing, counsel for Defendants acknowledged and
agreed on behalf of his clients: (i) that the amended complaint filed on March 19, 2015 should be
deemed properly filed, (ii) that Plaintiff satisfies the prerequisites for a “hardship discharge” under
Bankruptcy Code section 523(a)(8), and (iii) that Defendants consent to the discharge of Plaintiff’s
four education loans, as requested in her amended complaint. Based on these acknowledgments,
the Court will separately: (i) enter judgment in favor of Plaintiff, (ii) enter an order denying the
Plaintiff’s Motion as moot, and (iii) enter an order denying the Defendants’ Motion as moot. Each
party is to bear its own costs in respect of this Adversary Proceeding.
Additionally, the Court notes that there is a pending motion by Plaintiff to compel
responses to form interrogatories and impose monetary sanctions. (Adv. Dkt. 25) The Court
concludes that the discovery relief requested is moot and therefore denies the discovery request.
As to the remainder of the relief requested in the Discovery Motion, the motion is denied. A
separate order will be entered. Thereafter, the Clerk of the Court is directed to close this
Adversary Proceeding.
# # #
Date: May 1, 2015
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