Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-00443/USCOURTS-caed-2_05-cv-00443-2/pdf.json

Nature of Suit Code: 152
Nature of Suit: Recovery of Defaulted Student Loans
Cause of Action: 28:1345 Default of Student Loan

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 Because oral argument will not be of material assistance, 1

the Court orders this matter submitted on the briefs. E.D. Cal.

Local Rule 78-230(h). 

1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,

2:05-CV-0443-MCE-KJM

Plaintiff,

v. MEMORANDUM AND ORDER

MICHAEL C. DuPRATT,

Defendant.

----oo0oo----

Through this action, the United States of America

(“Government”) alleges that Defendant Michael C. DuPratt

(“Defendant”) is in default of a contract entered into between he

and the U.S. Public Health Service, Department of Health and

Human Services (“HHS”). Specifically, the Government avers 1

Defendant is in breach of his contractual and statutory

obligations to repay funds awarded him through the National

Health Service Corps Scholarship Program.

Case 2:05-cv-00443-MCE -KJM Document 33 Filed 11/06/06 Page 1 of 8
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2

For the reasons set forth below, the Government’s Motion for

Summary Judgment is GRANTED.

BACKGROUND

Defendant Michael C. DuPratt obtained scholarships from the

National Health Service Corps (“NHSC”) Scholarship Program to

fund his pursuit of a medical degree. While attending the

College of Ostepathic Medicine of the Pacific, Defendant

completed an application and signed a contract to receive a

scholarship award for the 1991-1992 school year. He was awarded

that scholarship and in 1992, Defendant signed a contract to

extend his scholarship through the 1995 school year. During the

four year term of his scholarship, Defendant received funds

totaling $123,337.00 representing tuition, fees, stipends and

other miscellaneous costs.

The foregoing awards were made upon the express condition

that, after completing his education, Defendant would serve in

full time clinical practice as a commissioned officer in the

Regular or Reserve Corps of the Public Health Service, or as a

civilian member of the NHSC. Defendant was to serve one year of

obligated service for each year of scholarship support with a

minimum obligation of two years. Since Defendant received four

years of scholarship awards, he was committed to serve four years

of obligated service as described above. Defendant’s commitment

to begin service was deferred pending a five year residency in

Family Practice and General Psychiatry at the University of

California.

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3

In May 1999, after completing four years of his five year

residency, Defendant was terminated from the University of

California’s residency program. On September 10, 1999, Defendant

alerted NHSC to his termination and requested an immediate

placement in a NHSC facility. On May 24, 2000, HHS/NHSC informed

Defendant he had been placed in service at the Indian Health

Service Hospital (“IHS”) in Lawton, Oklahoma. Defendant accepted

that assignment and relocated to Lawton, Oklahoma. However,

Defendant was ultimately terminated from his assignment at IHS

due to his inability to be granted hospital privileges. 

Defendant served a total of 364 days of obligated service at IHS.

On May 16, 2002, HHS/NHSC reassigned Defendant to the

Federal Correctional Institution in Oakdale, Louisana. That

placement, for various reasons, did not materialize. Despite

numerous requests by Defendant, no further placements were

offered and Defendant thereafter was deemed in default of his

contract. 

 

STANDARD

The Federal Rules of Civil Procedure provide for summary

judgment when “the pleadings, depositions, answers to

interrogatories, and admissions on file, together with

affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to a judgment

as a matter of law.” Fed. R. Civ. P. 56(c). One of the

principal purposes of Rule 56 is to dispose of factually

unsupported claims or defenses. 

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4

Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).

Rule 56 also allows a court to grant summary adjudication on

part of a claim or defense. See Fed. R. Civ. P. 56(a) (“A party

seeking to recover upon a claim ... may ... move ... for a

summary judgment in the party’s favor upon all or any part

thereof.”); see also Allstate Ins. Co. v. Madan, 889 F. Supp.

374, 378-79 (C.D. Cal. 1995); France Stone Co., Inc. v. Charter

Township of Monroe, 790 F. Supp. 707, 710 (E.D. Mich. 1992).

The standard that applies to a motion for summary

adjudication is the same as that which applies to a motion for

summary judgment. See Fed. R. Civ. P. 56(a), 56(c); Mora v.

ChemTronics, 16 F. Supp. 2d. 1192, 1200 (S.D. Cal. 1998).

Under summary judgment practice, the moving party

always bears the initial responsibility of informing

the district court of the basis for its motion, and

identifying those portions of ‘the pleadings,

depositions, answers to interrogatories, and admissions

on file together with the affidavits, if any,’ which it

believes demonstrate the absence of a genuine issue of

material fact.

Celotex Corp. v. Catrett, 477 U.S. at 323(quoting Rule 56(c)).

If the moving party meets its initial responsibility, the

burden then shifts to the opposing party to establish that a

genuine issue as to any material fact actually does exist. 

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,

585-87 (1986); First Nat’l Bank v. Cities Serv. Co., 391 U.S.

253, 288-89 (1968).

In attempting to establish the existence of this factual

dispute, the opposing party must tender evidence of specific

facts in the form of affidavits, and/or admissible discovery

material, in support of its contention that the dispute exists. 

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Fed. R. Civ. P. 56(e). The opposing party must demonstrate that

the fact in contention is material, i.e., a fact that might

affect the outcome of the suit under the governing law, and that

the dispute is genuine, i.e., the evidence is such that a

reasonable jury could return a verdict for the nonmoving party. 

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 251-52

(1986); Owens v. Local No. 169, Assoc. of Western Pulp and Paper

Workers, 971 F.2d 347, 355 (9th Cir. 1987). Stated another way,

“before the evidence is left to the jury, there is a preliminary

question for the judge, not whether there is literally no

evidence, but whether there is any upon which a jury could

properly proceed to find a verdict for the party producing it,

upon whom the onus of proof is imposed.” Anderson, 477 U.S. at

251 (quoting Improvement Co. v. Munson, 14 Wall. 442, 448, 20

L.Ed. 867 (1872)). As the Supreme Court explained, “[w]hen the

moving party has carried its burden under Rule 56(c), its

opponent must do more than simply show that there is some

metaphysical doubt as to the material facts .... Where the record

taken as a whole could not lead a rational trier of fact to find

for the nonmoving party, there is no ‘genuine issue for trial.’” 

Matsushita, 475 U.S. at 586-87.

In resolving a summary judgment motion, the evidence of the

opposing party is to be believed, and all reasonable inferences

that may be drawn from the facts placed before the court must be

drawn in favor of the opposing party. Anderson, 477 U.S. at 255. 

Nevertheless, inferences are not drawn out of the air, and it is

the opposing party’s obligation to produce a factual predicate

from which the inference may be drawn. 

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6

Richards v. Nielsen Freight Lines, 602 F. Supp. 1224, 1244-45

(E.D. Cal. 1985).

ANALYSIS

Pursuant to 42 U.S.C. 254o, the failure by a recipient of an

HHS Scholarship to commence or complete service obligations

entitles the Government to repayment of three times the principle

paid together with the maximum legal prevailing rate of interest. 

42 U.S.C. 254o(b)(1). That sum is to be reduced proportionately,

however, by the percentage of obligated service performed by the

participant. In pertinent part, the statute provides as follows:

“The United States shall be entitled to recover from

the individual an amount determined in accordance with

the formula A = 3 [phi] (T - S/T) in which “A” is the

amount the United States is entitled to recover, [phi]

is the sum of the amounts paid under this subpart to or

on behalf of the individual and the interest on such

amounts which would be payable if at the time the

amounts were paid they were loans bearing interest at

the maximum legal prevailing rate, as determined by the

Treasurer of the United States; “t” is the total number

of months in the individual’s period of obligated

service; and “s” is the number of months of such period

served by him.”

Id.

 It is undisputed that Defendant entered into NHSC

scholarship contracts; that he received scholarship funds

totaling $123,377.00; that he was obligated to complete four

years of obligated service for NHSC; that he did not complete

those years of service and that he has not repaid the scholarship

money he received. 

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7

In response to the Government’s Motion for Summary Judgment,

Defendant’s salient contention is that the Government’s prior

breach of the scholarship contract excuses him from his

obligation to perform thereunder. In reply, the Government

correctly asserts that “the obligations of the Secretary [of

Health and Human Services] are to be based on statutory and not

contractual principles.” Rendleman v. Bowen, 860 F.2d 1537, 1542

(9th Cir. 1988). Thus, contract defenses cannot provide a

defense for Defendant’s undisputed default. United States v.

Citrin, 972 F.2d 1044, 1049 (9th Cir. 1992).

As a secondary basis for opposing the Government’s Motion

for Summary Judgment, Defendant essentially argues his default is

justified as the result of numerous factors outside his control. 

For example, Defendant alleges that HHS failed to timely place

him upon his termination from IHS causing him to resort to

opening his own small practice in an effort to preclude financial

ruin. It was only after Defendant invested heavily in this new

practice that HHS finally offered him an alternative assignment. 

While the Court agrees that Defendant appears to have made some

effort to meet his obligations under the scholarship contract,

that effort does not act to cure his undisputed default. The

default provision of the NHSC Scholarship Program statute is

indifferent to reasons for failing to meet the obligated service

requirement. See 42 U.S.C. 254o(b)(1). 

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8

More precisely, the statute provides that if an individual

breaches his written contract by failing for any reason not

otherwise specified in the statute to either (i)begin such

individual’s service obligation, (ii) complete such service

obligation, or (iii) complete a required residency, the United

States shall be entitled to recover. Here, it is undisputed

Defendant failed to complete his service obligation thereby

entitling the Government to damages.

CONCLUSION

For the foregoing reasons, the Government is entitled to

judgment as a matter of law. With respect to the specific

damages owed, the Government is directed to submit an accurate

accounting consistent with 42 U.S.C. 254o within ten (10) days

twenty (20) days from the date of this order.

IT IS SO ORDERED.

DATED: November 4, 2006

_____________________________

MORRISON C. ENGLAND, JR

UNITED STATES DISTRICT JUDGE

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