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In re Kiel

United States District Court, Third Circuit

August 7, 2013




August 7, 2013 Debtor-Appellant, D. Erik von Kiel, appeals pro se from the Bankruptcy Court’s order dated June 19, 2012. Having considered fully the briefs and the record on appeal, and having determined that oral argument is not necessary in this case, [1] the Court will affirm the order of the Bankruptcy Court for the following reasons.

I. Background

On May 6, 2010, Debtor filed a voluntary bankruptcy petition under Chapter 7 of the United States Bankruptcy Code[2] in the Bankruptcy Court for the Eastern District of Pennsylvania.[3] On November 9, 2010, Debtor filed his first adversary complaint against Appellee, the United States Department of Health and Human Services (“HHS”), seeking to discharge his Health Education Assistance Loans (“HEAL loans”).[4] This complaint was dismissed and then re-filed as fifteen-count complaint against, among others, Appellees HHS and the Department of Justice on February 17, 2011.[5] Nine of the fifteen counts were dismissed, leaving Counts One through Six asserted against Appellees only; these six counts were addressed in the Bankruptcy Court’s June 19, 2012 Opinion that is the subject of this appeal. The June 19 Opinion resolved cross-motions for summary judgment and the accompanying order entered summary judgment in favor of Appellees.[6] This timely filed appeal followed.

II. Jurisdictional Statement

Bankruptcy courts have jurisdiction to hear and determine all core proceedings under Title 11 of the United States Code.[7] An adversary proceeding seeking to discharge a debtor’s student loans under 11 U.S.C. § 523(a)(8) is a core proceeding under 28 U.S.C. § 157(b)(2)(I); therefore, the Bankruptcy Court had jurisdiction under this section to consider and decide the parties’ cross-motions for summary judgment in the underlying adversary proceeding. This Court has jurisdiction to review the Bankruptcy Court’s decision pursuant to 28 U.S.C. § 158(a).[8]

III. Standard of Review

A district court reviews a bankruptcy court’s “order granting summary judgment de novo.”[9] “Factual findings are reviewed for clear error.”[10] “A bankruptcy court may grant summary judgment in an adversary proceeding . . . [if the movant] show[s] that there is no genuine [dispute] as to any material fact and [the movant] is entitled to judgment as a matter of law.”[11]

IV. Statement of Facts

Deferring to the Bankruptcy Court’s credibility determinations, this Court has reviewed the Bankruptcy Court’s factual findings for clear error and finds none. The following facts are taken from the Bankruptcy Court’s June 19, 2012 Opinion granting summary judgment in favor of Appellees. Since the Court writes primarily for the parties who are familiar with the facts at issue, the Court recounts herein only those facts necessary to give context to its decision.[12]

Debtor attended medical school in the 1980s, and financed his education using HEAL loans, insured by the United States Government under the Public Health Service Act.[13] Debtor borrowed money from the First Eastern Bank and First American Bank, N.A., debts that were later purchased by the Student Loan Marketing Association (Sallie Mae, Inc.) (Claim I), and from the Pennsylvania Higher Education Assistance Agency (“PHEAA”) (Claim II). Upon completion of medical school and related internships, Debtor began making payments on both groups of loans in May 1989, and he continued to do so until 1998.

When Debtor stopped making payments, both PHEAA and Sallie Mae declared Debtor in default and each filed a complaint against him in the Lehigh County Court of Common Pleas. As a result, two civil judgments totaling about $187, 000, were entered against Debtor on August 3, 1999 and November 20, 2000. The judgments were registered under Debtor’s alias, D.O. Dennis W. Fluck, in the United States District Court for the Eastern District of Pennsylvania on September 19, 2002.[14] The United States began collection efforts in 2006, applying for and obtaining writs of garnishment from Debtor’s employer. By Order dated April 23, 2010, the Honorable Petrese B. Tucker of this Court ordered Debtor’s employer to pay 25% of Debtor’s net earnings to the United States.[15] Less than two weeks later, Debtor filed his Bankruptcy Petition.[16]

On October 13, 2010, the United States Trustee timely filed a complaint in the Bankruptcy Court (docketed as a separate adversary proceeding), objecting to Debtor’s discharge on three independent statutory grounds.[17] In its January 5, 2012 Opinion denying debtor’s discharge in this separate adversary proceeding, the Bankruptcy Court found that Debtor’s bankruptcy petition “constitute[d] Debtor's ill-concealed and back-door attempt to avoid Judge Tucker’s decision, ” and the reach of his creditors in general.[18] The Bankruptcy Court entered judgment in favor of the United States Trustee and Appellees thereafter filed a motion for summary judgment in the related adversary proceeding at issue in this appeal.[19] Debtor responded by filing a cross-filed a motion for summary judgment.[20] The Bankruptcy Court entered summary judgment in favor of Appellees on all six counts.

Of relevance to the Bankruptcy Court’s decision is Debtor’s earlier, related bankruptcy proceeding. On September 9, 1991, Debtor and his wife filed a Chapter 7 bankruptcy petition also in the United States Bankruptcy Court for the Eastern District of Pennsylvania.[21] Debtor was granted a discharge by order entered February 18, ...

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