in Re: Gerald S. Lepre, Jr v. United States Department of Education, Ecmc

1
GLD-289 NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 13-2226
___________
IN RE: GERALD S. LEPRE, JR.
Appellant
Gerald S. Lepre, Jr.
v.
UNITED STATES DEPARTMENT OF EDUCATION, ECMC;
PHEAA Student Loan Foundation Inc. & Sallie Mae Inc.
____________________________________
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Civil No. 2-12-cv-00545)
District Judge: Honorable Cathy Bissoon
____________________________________
Submitted for Possible Summary Action Pursuant to
Third Circuit LAR 27.4 and I.O.P. 10.6
June 20, 2013
Before: FUENTES, FISHER and VANASKIE, Circuit Judges
(Opinion filed: July 3, 2013)
_________
OPINION
_________

-- 1 of 5 --

2
PER CURIAM
Gerald S. Lepre, Jr., appeals pro se from an order of the United States District
Court for the Western District of Pennsylvania, which affirmed the United States
Bankruptcy Court’s order entering judgment in favor of ECMC and against Lepre in the
adversary proceeding. Because the appeal presents no substantial question, we will
summarily affirm the District Court’s order.
I.
In 2011, Lepre filed for relief pursuant to Chapter 7 of Title 11 of the United
States Code, and filed an adversary complaint against, amongst others, the Pennsylvania
Higher Education Assistance Agency d/b/a American Education Services (“AES”) and
Sallie Mae, Inc., in order to obtain a discharge of his educational loans. Subsequently,
Appellee Educational Credit Management Corporation (“ECMC”) was substituted for
AES, and the Bankruptcy Court dismissed Sallie Mae from the adversary proceeding.1
In his complaint, Lepre sought a discharge of his educational debt pursuant to 11
U.S.C. § 523(a)(8), arguing that he faced an undue burden in repaying it. In March 2012,
the Bankruptcy Court, after a trial on the merits, held that Lepre failed to meet the
standard for undue hardship outlined in Brunner v. New York Higher Education Services
Corp., 831 F.2d 395 (2d Cir. 1987) (adopted by this Court in Pennsylvania Higher
Education Assistance Agency v. Faish (In re Faish), 72 F.3d 298 (3d Cir. 1995)), and
1 The Bankruptcy Court found that it was undisputed that Sallie Mae was not a creditor of Lepre, and therefore no
case existed. While Lepre continued to reference Sallie Mae in his appeal to the District Court and in his responses
to the instant appeal, the District Court order being appealed only concerns ECMC. Lepre did not appeal the order
dismissing Sallie Mae from the adversary proceeding.

-- 2 of 5 --

3
entered judgment in favor of ECMC. Lepre timely appealed the Bankruptcy Court’s
order to the District Court, which rejected Lepre’s arguments in opposition to the
Bankruptcy Court’s decision, and affirmed the Bankruptcy Court’s order. Following the
District Court’s order, Lepre timely appealed to this Court.
II.
We have appellate jurisdiction pursuant to 28 U.S.C. § 158(d)(1).2 “On an appeal
from a bankruptcy case, our review duplicates that of the district court and view[s] the
bankruptcy court decision unfettered by the district court’s determination.” In re Orton,
687 F.3d 612, 614-15 (3d Cir. 2012) (internal quotation and citation omitted). Thus, we
review the Bankruptcy Court’s findings of fact for clear error and apply plenary review to
its legal conclusions. Id. at 615.
III.
Pursuant to 11 U.S.C. § 523(a)(8), student loan debt cannot be discharged in
bankruptcy unless repaying this debt would impose an “undue hardship” on the debtor.
We, along with the majority of our sister courts, assess whether a debtor faces undue
hardship by employing the three-pronged test set forth Brunner v. New York Higher
Education Services Corp., 831 F.2d 395 (2d Cir. 1987). See Pa. Higher Educ. Assistance
2 In its response to Lepre’s appeal, ECMC asks that this Court dismiss the appeal for lack of jurisdiction on the
ground that the notice of appeal was untimely. While Lepre’s notice of appeal was filed 31 days after the District
Court’s order was docketed, the District Court’s order violated the Separate Judgment Rule. “To be independent of
the court's opinion [and comply with Fed. R. Civ. P. 58], an order must be separately titled and captioned, not
paginated consecutively to the opinion or memorandum, not stapled or otherwise attached to the opinion, and must
be docketed separately.” LeBoon v. Lancaster Jewish Cmty. Ctr. Ass'n, 503 F.3d 217, 224 (3d Cir. 2007) (citing In
re Cendant Corp. Sec. Litig., 454 F.3d 235, 241 (3d Cir. 2006); Local Union No. 1992 of Int'l Bhd. of Elec. Workers
v. Okonite Co., 358 F.3d 278, 284–85 (3d Cir. 2004)). Accordingly, the District Court’s order was not deemed
“entered” at the time Lepre filed his notice of appeal, rendering it timely. See Fed. R. Civ. P. 58(c)(2)(B).

-- 3 of 5 --

4
Agency v. Faish (In re Faish), 72 F.3d 298, 306 (3d Cir. 1995) (adopting Brunner test).
Under this test, the debtor must establish:
(1) that the debtor cannot maintain, based on current income and expenses, a
“minimal” standard of living for herself and her dependents if forced to repay the
loans; (2) that additional circumstances exist indicating that this state of affairs is
likely to persist for a significant portion of the repayment period of the student
loans; and (3) that the debtor has made good faith efforts to repay the loans.
Brunner, 831 F.2d at 396. Equitable concerns or other extraneous factors may not be
imported to support a finding of dischargeability. Faish, 72 F.3d at 306. Lepre must
establish each of the three elements by a preponderance of the evidence before a
discharge can be granted. See Faish, 72 F.3d at 306; Brightful v. Pa. Higher Educ.
Assistance Agency (In re Brightful), 267 F.3d 324, 327 (3d Cir. 2001).
As explained in detail by the Bankruptcy Court, Lepre has failed to provide an
accurate accounting of his income and expense and, as a result, has failed to establish by
a preponderance of the evidence that he cannot maintain a “minimal” standard of living if
forced to repay ECMC. Specifically, while Lepre’s schedules suggest that he has a
negative net monthly income, Lepre’s figures are unreliable. Based upon information
Lepre submitted at trial and his testimony, it appears that he underestimated both his
earnings and the total amount of funds he possessed as of the filing of his schedules. In
addition, regarding his expenses, he appeared to have counted at least one expense twice,
and listed expenses that he was not paying and that may not have existed, such as
ongoing payments for college tuition. Accordingly, without belaboring each discrepancy

-- 4 of 5 --

5
in Lepre’s finances that the Bankruptcy Court noted in its memorandum, we agree that
Lepre has failed to satisfy the first prong of the Brunner test. See Faish, 72 F.3d at 306.3
While the Bankruptcy Court’s determination that Lepre also did not satisfy the
second and third prongs of the Brunner test appears well reasoned and correct, Lepre’s
failure to satisfy the first prong alone establishes that he is not entitled to a discharge of
his educational debt pursuant to 11 U.S.C. § 523(a)(8). Accordingly, this appeal presents
us with no substantial question, and we will summarily affirm the District Court’s order
entered on March 25, 2013, affirming the order of the Bankruptcy Court. See 3rd Cir.
LAR 27.4 and I.O.P. 10.6.
3 In addition to his notice of appeal, Lepre filed three separate submissions concerning his appeal and the issues he
believed that this Court needed to address. As none of the challenged issues affect the outcome of this matter, and
all were adequately and correctly addressed by the District Court in its order, we will not repeat the District Court’s
determination here.

-- 5 of 5 --