(Bankruptcy No. 11-20563 -- BM) (Adversary No. 11-02076-BM)
The opinion of the court was delivered by: Cercone, J.
Before the Court is an appeal by Thomas A. Kuznicki ("Kuznicki" or "Appellant") from the final judgment of the United States Bankruptcy Court for the Western District of Pennsylvania finding that the student loan debt owed by Kuznicki to Educational Credit Management Corporation ("ECMC") was non-dischargeable. This Court has jurisdiction of the appeal from the final order of the Bankruptcy Court pursuant to 28 U.S.C. § 158(a).
II. STATEMENT OF THE CASE
Kuznicki voluntarily commenced a Chapter 7 bankruptcy proceeding on February 2, 2011, in the United States Bankruptcy Court for the Western District of Pennsylvania at No. 11-20563. Kuznicki filed an adversary complaint at Adversary Proceeding No. 11-02076 seeking to discharge student loans in the amount of $44,331.59, which he owed to ECMC, pursuant to the undue hardship exception set forth in 11 U.S.C. § 523(a)(8)(B).
Kuznicki was employed as a union carpenter until he was injured in May of 2001. Because the physical aspects of his construction work became too demanding, Kuznicki decided to go back to school. Kuznicki originally enrolled at the Community College of Allegheny County in 2002, and from the Spring of 2004 until 2007 he was enrolled in classes at the University of Pittsburgh. When he left the University of Pittsburgh, Kuznicki was thirty (30) credits short of completing a degree in civil engineering. The loans used by Kuznicki to finance his education were federally backed student loans held by ECMC.
At the hearing, Kuznicki asserted that he had been unable to work for the preceding ten (10) years because of severe medical issues, both physical and mental. Though he stated that pain prevented him from standing, sitting, or walking for any period of time, Kuznicki had not been treated by a physical therapist for five (5) or six (6) years and had not seen his family doctor in two (2) years. Kuznicki also contends that he suffers from chronic major depressive disorder, anxiety disorder and concentration problems. Despite these alleged mental issues, Kuznicki is neither seeing a doctor nor is he taking medication for the disorders. Kuznicki's income consists of social security disability benefits and Carpenter's disability benefits totaling $1,700 per month.
Applying the test set forth in Brunner v. New York State Higher Education Services Corp., 831 F.2d 395 (2d Cir. 1987), adopted by the Third Circuit in In re Faish, 72 F.3d 298 (3d Cir. 199), the Bankruptcy Court found that Kuznicki failed to meet the requirements of the "undue hardship" exception provided in 11 U.S.C. § 523(a)(8)(B), and denied his request for discharge of his educational loans.
This Court has jurisdiction to hear an appeal from the Bankruptcy Court pursuant to 28 U.S.C. § 158(a). In undertaking a review of the issues on appeal, a district court reviews the Bankruptcy Court's legal determinations de novo, its factual findings for clear error, and its exercise of discretion for abuse thereof. In re Trans World Airlines, Inc., 145 F.3d 124, 130 (3d Cir. 1998); see also In re Hechinger, 298 F.3d 219, 224 (3d Cir. 2002); In re Telegroup, 281 F.3d 133, 136 (3d Cir. 2002). Review of facts under the "clearly erroneous" standard is significantly deferential and requires a "definite and firm conviction that a mistake has been committed." Concrete Pipe & Prods. v. Constr. Laborers Pension Trust, 508 U.S. 602, 623 (1993). Mixed findings of fact and conclusions of law must be broken down, and the applicable standards - "clearly erroneous" or de novo - must be appropriately applied to each component. Meridian Bank v. Alten, 958 F.2d 1226, 1229 (3d Cir. 1992). A bankruptcy court abuses its discretion when its ruling is founded on an error of law or a misapplication of law to the facts. Marco v. Accent Pub. Co., 969 F.2d 1547, 1548 (3d Cir. 1992).
The Bankruptcy Code excepts from discharge any debt insured or guaranteed by a governmental unit as an educational benefit unless the debtor can show that repayment of the debt will impose an undue hardship on the debtor and the debtor's dependents. 11 U.S.C. §523(a)(8). The Court of Appeals for the Third Circuit adopted the three-pronged test set forth in Brunner v. New York State Higher Education Services Corp. (In re Brunner), 831 F.2d 395 (2d Cir. 1987) to determine whether forced repayment of student loan debt will create "undue hardship" for a debtor. Under Brunner, "undue hardship" is dependent upon three factors:
(1) [whether] the debtor cannot maintain, based on current income and expenses, a "minimal" standard of living for [himself] and [his] ...