MATTHEWS v. EDUCATIONAL CREDIT MANAGEMENT CORP.
449 B.R. 265 (2011)
Pamela MATTHEWS, Appellant/Plaintiff
EDUCATIONAL CREDIT MANAGEMENT CORP., Appellee/Defendant.
Civil Action No. 5:10-cv-00232-KS.
United States District Court, E.D. Kentucky, Central Division at Lexington.
March 4, 2011.
Adam R. Kegley, Edward Michael King, Frost Brown Todd LLC, Lexington, KY, Anthony Lavell Brown, Educational Credit Management Corporation, St. Paul, MN, Jeffrey S. Rosenstiel, Frost Brown Todd LLC, Cincinnati, OH, for Appellee/Defendant.
OPINION & ORDER
KARL S. FORESTER, Senior District Judge.
This matter is before the Court on appeal from the June 3, 2010 Order of the United States Bankruptcy Court for the Eastern District of Kentucky granting judgment in favor of the Defendant-Appellee, Educational Credit Management Corporation ("Defendant"). Rather than pursue her appeal before the Bankruptcy Appellate Panel of the Sixth Circuit Court of Appeals, Plaintiff-Appellant Pamela Ileen Matthews ("Plaintiff") elected to have her appeal heard before this Court.
I. RELEVANT FACTS AND PROCEDURAL HISTORY
On March 29, 2009 (the "Petition Date"), Plaintiff filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Kentucky, Lexington Division. The case was subsequently converted from a Chapter 11 case to a Chapter 7 case on June 1, 2009. On July 17, 2009, Plaintiff initiated an adversary proceeding against Sallie Mae, Inc. ("Sallie Mae") seeking to discharge certain student loan obligations. [BR# 1].1 A default judgment was entered against Sallie Mae on September 11, 2009. [BR# 11]. On September 17, 2009, Defendant filed a motion seeking to intervene in Plaintiff's adversary proceeding against Sallie Mae as "the assignee of certain student loan debt formerly owed by [Plaintiff] to Michigan Higher Education Student Loan Authority ("MHESLA"), as guarantor." [BR# 16 at ¶¶ 2, 3]. Defendant also stated that Plaintiff's identification of Sallie Mae as the holder of her student loan indebtedness was erroneous, as Sallie Mae was never the holder of Plaintiff's debt. [Id. ¶ 4]. Plaintiff objected to Defendant's motion to intervene on various grounds, including that the contractual basis upon which Defendant asserted a right to intervene in the case was invalid. [BR# 17]. After a hearing, the Bankruptcy Court entered an Order granting Defendant's motion to intervene on October
26, 2009. [BR# 28]. On January 31, 2010, Plaintiff filed a motion to dismiss Defendant, again challenging Defendant's standing. After a hearing, the Bankruptcy Court entered an Order denying Plaintiff's motion. [BR# 45]. On April 5, 2010, Plaintiff filed a motion for summary judgment, challenging Defendant's standing for a third time. [BR# 47]. After a hearing, the Bankruptcy Court entered an Order denying Plaintiff's motion for summary judgment. [BR# 57]. Although defeated three times, Plaintiff refused to give up and on May 26, 2010, filed a motion for judgment as a matter of law, challenging Defendant's standing yet again. [BR# 75]. After a hearing, the Bankruptcy Court entered an Order denying Plaintiff's motion. [BR# 91].
On May 27, 2010, the matter was tried in front of the Bankruptcy Court. On June 3, 2010, the Bankruptcy Court entered an Order entering judgment in favor of Defendant. [BR# 92]. In its Order (the "Judgment"), the Court found that Plaintiff failed to meet the first two prongs of the test set forth in Brunner v. New York State Higher Education Services Corp., 831 F.2d 395 (2d Cir.1987), as adopted in the Sixth Circuit by Tirch v. Pennsylvania Higher Education Assistance Agency, 409 F.3d 677, 682 (6th Cir. 2005) and Oyler v. Educational Credit Management Corp., 397 F.3d 382 (6th Cir. 2005).2 The Judgment did not address the issue of Defendant's standing, although the Judgment did specifically incorporate by reference the Bankruptcy Court's findings and conclusions provided to the parties from the bench at the conclusion of the May 27, 2010 trial. Although these findings and conclusions mostly addressed the undue hardship issue, at the trial, the Bankruptcy Court briefly addressed Plaintiff's motion for judgment as a matter of law and reaffirmed its prior rulings that Defendant does have standing in the case and that it was proper to allow Defendant to intervene as assignee of the guarantor. [BR# 104 at p. 7-8]. After ruling on the motion orally, the Bankruptcy Court requested that counsel tender an order overruling the motion for judgment as a matter of law. The Bankruptcy Court entered this Order on June 3, 2010. [BR# 91].
On June 10, 2010, Plaintiff filed a Notice of Appeal with the Bankruptcy Court. [BR# 94; DE #1]. In her Notice of Appeal, Plaintiff specifies that she is appealing "from the judgment, order, or decree of the bankruptcy judge (judgment denying Plaintiff undue hardship discharge of student loan indebtedness pursuant to 523(8)(a) of the United States Bankruptcy Code entered in this adversary proceeding on the third (3rd) day of June, 2010 [sic]." Plaintiff attached the Judgment to her Notice of Appeal. Plaintiff's Notice does not refer to any of the Bankruptcy Court's prior orders on Plaintiff's various motions challenging Defendant's standing. However, on June 24, 2010, as required by Federal Rule of Bankruptcy Procedure 8006, Plaintiff filed a Statement of Issues on Appeal with the Bankruptcy Court identifying the issues to be presented on appeal. [BR# 99]. In her Statement of Issues on Appeal, Plaintiff identifies issues related to her previous challenges to Defendant's standing.