Opinion
Civil Action No. 01-6247
August 2, 2002
MEMORANDUM
This action is for recovery of educational expenses the Government advanced under an Air Force Reserve Officers Training Corps ("ROTC") contract. Before the Court are cross-motions for summary judgment.
Background
The salient facts are not in dispute. Kimberly Roetenberg attended college at Rensselaer Polytechnic Institute ("RPI") in Troy, New York. She financed her education by participating in the Air Force ROTC scholarship program. In return for Roetenberg's agreeing to serve a period of active duty as an officer in the Air Force, the Government agreed to pay for her college education. Roetenberg Aff. at ¶ 1.
The record on summary judgment consists of the affidavit of defendant Kimberly Roetenberg, and affidavits of Candace Jenkins, Supervisor, Special Actions Section, Directorate of Debt and Claims Management of DFAS, with supporting documentation. The material facts, which, as we have stated, are not in dispute, we have taken from these affidavits. Also, as we will discuss in more detail, an earlier adjudication between the parties (or their privies), in which summary judgment was granted to the Secretary of the Air Force, see Roetenberg v. Sec'y of the Air Force, 73 F. Supp.2d 631 (E.D. Va. 1999) ("Roetenberg I"), is preclusive on the issue of the validity of Roetenberg's indebtedness under the ROTC contract. We have taken more background detail from the decision in Roetenberg I as well.
A contract between Roetenberg and the United States, executed under the authority of 20 U.S.C. § 2005, spelled out the conditions of the ROTC scholarship. The contract provided, in relevant part, that if Roetenberg did not complete her active duty because of voluntary separation or misconduct separation, she would reimburse the Government proportionately for her education expenses. The contract specified that misconduct separation "may be initiated by the Air Force in accordance with its governing directive for substandard duty performance . . ., unacceptable conduct, moral or professional dereliction, or in the interest of national security." Roetenberg I, 73 F. Supp.2d at 633 n. 2.
Shortly after Roetenberg graduated from RPI and was called to active duty, the Air Force cancelled her active duty orders, pending investigation into possible misconduct. In May of 1992, the Air Force granted Roetenberg a General Discharge. On June 1, 1992, the Defense Finance and Accounting Service ("DFAS") notified Roetenberg that as a consequence of her discharge she was indebted to the Government under the ROTC contract. Roetenberg Aff. at ¶¶ 11-12; Roetenberg I, 73 F. Supp.2d at 634.
Roetenberg appealed the General Discharge and the finding of ROTC indebtedness to the Air Force Board of Corrections of Military Records ("AFBCMR"), which ruled against her. In September of 1998, she initiated an action in the Court of Federal Claims, which was dismissed without prejudice. Roetenberg I, 73 F. Supp.2d at 634.
In July of 1999, Roetenberg filed an action in the United States District Court for the Eastern District of Virginia. The action, which Roetenberg brought pursuant to the Administrative Procedure Act (APA), challenged both her General Discharge and the determination of indebtedness. Id. at 634. The District Court granted summary judgment to the Secretary of the Air Force. Id. at 637. The Court upheld the General Discharge and concluded that because Roetenberg's separation was the result of her own misconduct she was indebted to the Government under the Air Force ROTC contract. Id. Roetenberg did not appeal the decision.
Since furnishing Roetenberg initial notice of her education indebtedness, the Government has sent many letters to her or her counsel demanding payment on the debt, and otherwise trying to collect the debt. For example, at Roetenberg's request, the Government twice offered her reduced payment options. Pl.'s Mot Summ. J., Ex. 2.10-11. Indeed, DFAS sent Roetenberg no less than twelve letters concerning collection of the debt between 1992 and 2000. Id., Ex. 2.
Roetenberg made partial payments on her debt, sending thirteen checks or money orders to the DFAS between 1996 and 1998. Roetenberg Aff. at ¶¶ 18-19; Pl.'s Mot. Summ. J., Ex. 1. Roetenberg insists she only made these payments on the advice of her attorney, who told her it was the only way she could obtain jurisdiction for an action contesting the debt. Roetenberg Aff. at ¶¶ 15-18. Roetenberg noted on every check or money order that the payment was being made "under protest." Id. at ¶ 19.
On December 17, 2001, the Government commenced this action to enforce Roetenberg's repayment obligation under the ROTC contract. The only material issues in dispute between the parties are statute of limitations and laches. Jurisdiction exists pursuant to 10 U.S.C. § 2005 and 28 U.S.C. § 1345.
It is well-established that Summary judgment is appropriate if "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). In considering a motion for summary judgment, the Court must view the evidence, and any inferences from it, in a light most favorable to the nonmoving party. Groman v. Township of Manalapan, 47 F.3d 628, 633 (3d Cir. 1995). The moving party bears the initial burden of proving there is no genuine issue of material fact in dispute. Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585 n. 10 (1986). Once the moving party satisfies this initial burden, the nonmoving party must "come forward with `specific facts showing that there is a genuine issue for trial.'" Id. at 587 (quoting Fed.R.Civ.P. 56(e)). To withstand summary judgment, the nonmoving party cannot produce a "mere scintilla of evidence" but must produce enough evidence to allow a reasonable jury to find in its favor at trial. Groman, 47 F.3d at 633; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).
Cross-motions for summary judgment are treated independently. If there are genuine issues of material fact, both motions must be denied. "But if there is no genuine issue and one or the other party is entitled to prevail as a matter of law, the court will render judgment." 10A Charles Alan Wright, Arthur R. Miller Mary Kay Kane, Federal Practice and Procedure § 2720, at 336-37 (1998).
To begin with, we emphasize what is not before us. The District Court for the Eastern District of Virginia, in Roetenberg I, granted summary judgment for the Secretary of the Air Force, upholding the General Discharge and the ROTC debt. The decision of the District Court is preclusive on these issues. See Del. River Port Auth. v. Fraternal Order of Police, 290 F.3d 567, 573 n. 10 (3d Cir. 2002) (discussing issue preclusion). The only material issues left are the affirmative defenses of statute of limitations and laches. We therefore only consider these dispositive issues.
Statute of Limitations
Section 2415 of Title 28 of the United States Code provides a six-year statute of limitations for breach of contract actions initiated by the United States. Section 2415 states in relevant part:
[E]very action for money damages brought by the United States or an officer or agency thereof which is founded upon any contract express or implied in law or fact, shall be barred unless the complaint is filed within six years after the right of action accrues . . .: Provided, That in the event of later partial payment or written acknowledgment of debt, the right of action shall be deemed to accrue again at the time of each such payment or acknowledgment . . . .28 U.S.C. § 2415 (a).
The parties do not dispute that the statute of limitations began to run in 1992, when the "right of action" accrued shortly after the Government sent Roetenberg the July 1992 demand for payment letter to which Roetenberg did not respond. The Government maintains, however, that under the plain language of the statute of limitations, Roetenberg's partial payments started the limitations period anew. Since the Government filed the action on December 17, 2001, within six years of these partial payments, the action was timely.
Roetenberg responds that the partial payments were ineffective to revive the statute of limitations under 28 U.S.C. § 2415 (a) because the payments were not voluntary and did not bespeak acknowledgment of the validity of the debt. To the contrary, the payments were made under protest. Since the action was filed more than six years after the right of action first accrued, Roetenberg submits the action is untimely. For the reasons that follow, we agree with the Government that Roetenberg's partial payments revived the statute of limitations, rendering the action timely.
Roetenberg first asserts that her payments were not voluntary. Some cases support the notion that a "partial payment . . . of debt" under § 2415(a) must be voluntary. See United States v. Bloom, 112 F.2d 200, 205 (5th Cir. 1997); Richardson, 1990 U.S. Dist. LEXIS 2753, at *2;United States v. Lorince, 773 F. Supp. 1082, 1088 (N.D. Ill. 1991). These cases, however, stand for the unremarkable proposition that a reduction of a debtor's liability by a third party such as a sheriff is not a payment under § 2415(a). Richardson, at *2 (foreclosure sale);Lorince, 773 F. Supp. at 1084 (liquidation auction). Here, Roetenberg herself made the partial payments. Her affidavit admits as much. Roetenberg Aff. at ¶¶ 17-19. Roetenberg's explanation that she made the partial payments in order to establish jurisdiction in the Court of Claims only buttresses our conclusion that she made the payments and made them voluntarily.
The IRS twice applied tax offsets to reduce Roetenberg's debt. Pl.'s Mot. Summ. J., Ex. 1. These involuntary confiscations are analogous to the transactions deemed insufficient in Richardson and Lorince. As the Court in Richardson stated, the touchstone of a partial payment is a "voluntary act." Id. at *5.
Roetenberg next maintains that the partial payments did not acknowledge the validity of the debt. Rather, they made clear that Roetenberg contested the debt. Under 28 U.S.C. § 2415 (a), the statute of limitations period is revived by a "partial payment or written acknowledgment of debt." Id. (emphasis added). Roetenberg collapses the two predicates for renewal of the statute of limitations period into one when she claims that a partial payment must affirm a debt's validity. She never acknowledged her indebtedness. But she need not have, because under § 2415(a), her partial payments were enough. The cases Roetenberg cites for the proposition that a written acknowledgment of debt must affirm a debt's validity and attest a willingness to satisfy it are inapposite.
United States v. Rollinson, 866 F.2d 1463, 1468 (D.C. Cir. 1989);FDIC v. Cardona, 723 F.2d 132 (1st Cir. 1983); United States v. Hughes Ranch, Inc., 33 F. Supp.2d 1157 (D. Neb. 1999).
One case does hold that a partial payment under 28 U.S.C. § 2415 (a) must acknowledge the debt. See United States v. Glen Falls Ins. Co., 546 F. Supp. 643 (N.D.N.Y. 1982). In Glen Falls, the court looked to the legislative history of § 2415(a) and determined that Congress intended to adopt the common law precept that, when a statute of limitations has elapsed, a new promise to pay a debt will be deemed to be supported by "past consideration" and start the limitations period running anew. Thus, the Court concluded, a partial payment of a debt restarts the statute of limitations under § 2415 only if it is "tantamount to a voluntary acknowledgment of the existence of the debt."Id. at 645-46. While we do not necessarily dispute the court's reading of the legislative history, we are unpersuaded by its analysis because we may not look to legislative history to interpret a statute that is clear on its face. Ross v. HERE, 266 F.3d 236, 245 (3d Cir. 2001); United States v. Turkette, 452 U.S. 576, 580 (1981).
Since Roetenberg's partial payments on her debt caused the statute of limitations to run anew, and this action was filed within six years of the partial payments, the action was timely commenced. 28 U.S.C. § 1415; Bloom, 112 F.2d at 204-05; United States v. Milam, 855 F.2d 739, 740 (11th Cir. 1988).
Laches
The affirmative defense of laches is also unavailing. Only in unusual circumstances, if at all, can laches be asserted to bar Government enforcement actions. Costello v. United States, 365 U.S. 265, 281 (1961). The extensive history of this case reveals the persistent efforts of the Government to collect on Roetenberg's education debt.
"Laches requires proof of (1) lack of diligence by the party against whom the defense is asserted, and (2) prejudice to the party asserting the defense." Costello, 365 U.S. at 282. Roetenberg has demonstrated neither, and thus this equitable defense does not apply.
Conclusion
We will grant summary judgment to the Government. An uncontroverted affidavit establishes that, as of August 29, 2001, Roetenberg owes the Government $79,869.47 ($50,491.90 principal balance plus $8,837.98 interest and $20,539.59 penalty), with prejudgment interest accruing at the rate of 3.16%. Pl.'s Mot. Summ. J., Ex. 3. An Order entering judgment follows.
ORDER
AND NOW, this 2nd day of August, 2002, upon consideration of the parties' cross-motions for summary judgment, and in accordance with the foregoing Memorandum, it is hereby ORDERED that:
1. Defendant's motion for summary judgment (Doc. No. 5) is DENIED;
2. Plaintiff's motion for summary judgment (Doc. No. 8) is GRANTED;
3. JUDGMENT IS ENTERED in favor of the United States of America and against Kimberly Roetenberg in the amount of $82,199.72; and
To wit, $79,869.47 plus $2,330.25 interest from August 29, 2001 at 3.16% per annum.
4. The Clerk shall CLOSE this case statistically.