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National Collegiate Student Loan Trust 2007-3 v. De Leon

Florida Court of Appeals, Third District

October 10, 2019

National Collegiate Student Loan Trust 2007-3, Appellant,
v.
Delvis De Leon, Appellee.

         Not final until disposition of timely filed motion for rehearing.

          An Appeal from the Circuit Court for Miami-Dade County Lower Tribunal No. 14-11220, Mavel Ruiz, Judge.

          Sessions, Fishman, Nathan & Israel, LLC, and Jocelyn C. Smith and Dayle Van Hoose (Tampa), for appellant.

          Debt Defense Law, and Bruce B. Baldwin, for appellee.

          Before SCALES, LINDSEY and LOBREE, JJ.

          SCALES, J.

         Appellant, plaintiff below, National Collegiate Student Loan Trust 2007-3 ("lender"), appeals a final summary judgment entered in favor of appellee, defendant below, Delvis De Leon ("borrower"). Because the res judicata doctrine is inapplicable in this case, we reverse the summary judgment and remand for further proceedings.

         I. Relevant Background

         In 2007, borrower obtained a $25, 000 student loan from lender. In 2009, borrower filed a Chapter 7 bankruptcy proceeding in the United States Bankruptcy Court for the Southern District of Florida. While lender was a scheduled creditor in borrower's bankruptcy case, lender did not file a proof of claim or initiate an adversarial proceeding regarding the loan in the bankruptcy case. In September 2009, the bankruptcy court granted borrower a discharge of certain of his debts, but the discharge order made clear that "most student loans" are not subject to discharge.

         In April 2014, after borrower had defaulted on the loan, lender brought the instant action against borrower alleging borrower was in breach of his loan agreement. Borrower answered lender's complaint asserting, as affirmative defenses, lender's lack of standing, expiration of the statute of limitations, and res judicata. Borrower's res judicata defense was premised upon borrower's earlier Chapter 7 discharge of "all debts in the bankruptcy estate." Shortly before trial was scheduled to begin in the case, borrower sought summary judgment based on his res judicata defense. On June 21, 2018, the trial court entered an order granting borrower's summary judgment motion. In its order, the trial court concluded:

Pursuant to The Educational Research Institute, Inc. v. Rickard [sic], 924 So.2d 40 (Fla. 3d DCA 2006), Defendant's 2009 federal bankruptcy, in which Plaintiff was a creditor on express notice but filed no proof of claim, precludes the relitigation of the claims that could have been raised in the context of the bankruptcy proceedings.

         Lender appealed the order and the September 18, 2018 final summary judgment entered pursuant to the order.[1] We reverse.

         II. Analysis[2]

         Borrower argues, as he did below, that, irrespective of the dischargeability of the student loan, lender could have brought an adversary proceeding in that Chapter 7 bankruptcy action both to liquidate the amount owed and to confirm the debt's dischargeability. Borrower argues that, because lender did nothing in the bankruptcy action regarding the debt, the doctrine of res judicata precludes lender's instant action to recover the debt.[3] The entirety of borrower's argument is premised upon the following sentence from this Court's decision in Education Resources Institute, Inc. v. Rickard, 924 So.2d 40, 41 (Fla. 3d DCA 2006): "Under the federal law of res judicata, ...


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