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Nature of Suit Code: 422
Nature of Suit: Bankruptcy Appeals Rule 28 USC 158
Cause of Action: 

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PUBLISH . FILE D,A peals Ualted States C~t '! p Tenth CtrtUlt 

UNITED STATES COURT OF APPEALS JAN 0 6 1995 

TENTH CIRCUIT 

In re: RAYMOND L. WOODCOCK, 

Debtor. 

RAYMOND L. WOODCOCK, 

Appellant, 

v. 

CHEMICAL BANK, NYSHESC, as servicing 

agent for Chemical Bank; COLUMBIA 

UNIVERSITY; UNIVERSITY ACCOUNTING, 

as servicing agent for Columbia 

University; U.S. ATTORNEY GENERAL, 

Appellees. 

PATRICK FISHER 

Clerk 

No. 94-1101 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLORADO 

(D.C. No. 93-M-705) 

Submitted on the briefs: 

Raymond L. Woodcock, Appellant, Pro Se. 

Dolores B. Kopel, Denver, Colorado, for Appellees. 

Before ANDERSON, SETH, and BARRETT, Circuit Judges. 

ANDERSON, Circuit Judge. 

Appellate Case: 94-1101 Document: 01019290289 Date Filed: 01/06/1995 Page: 1 
Appellant Raymond L. Woodcock (debtor) graduated from law 

school in 1982. He financed his legal education with four 

guaranteed student loans, each for $5,000. The loans were 

guaranteed by NYSHESC (creditor) . In 1992, debtor filed 

bankruptcy under Chapter 7 of the United States Bankruptcy Code. 

He brought this adversary proceeding to determine the 

dischargeability of his student loans. The bankruptcy court ruled 

the loans are not dischargeable. The district court affirmed and 

debtor now appeals. We exercise jurisdiction under 28 U.S.C. 

§ 158(d) and affirm in part and reverse in part.1 

Generally, student loans are not dischargeable in bankruptcy. 

11 U.S.C. § 523 (a) (8). The Code permits such loans to be 

discharged, however, if they "first became due more than 7 years 

(exclusive of any applicable suspension of the repayment period) 

before the date of the filing of the [bankruptcy] petition," id. 

§ 523(a) (8) (A), or if excepting the loans from discharge "will 

impose an undue hardship on the debtor and the debtor's 

dependents," id. § 523(a) (8) (B). On appeal, debtor contends that 

his loans are dischargeable under either exception. He also 

complains that the bankruptcy court improperly excluded certain 

evidence and improperly allowed creditor to amend its pleadings to 

conform to the evidence. We review the bankruptcy court's legal 

determinations de novo and its factual findings for clear error. 

1 After exam1n1ng the briefs and appellate record, this panel 

has determined unanimously to grant the parties' request for a 

decision on the briefs without oral argument. See Fed. R. App. P. 

34(a); lOth Cir. R. 34.1.9. The case is therefore ordered 

submitted without oral argument. 

2 

Appellate Case: 94-1101 Document: 01019290289 Date Filed: 01/06/1995 Page: 2 
Robinson v. Tenantry (In re Robinson), 987 F.2d 665, 667 (lOth 

Cir. 1993). 

Turning to the first exception, we must determine when 

debtor's loans first became due. A loan becomes due when the 

first installment is due. See Nunn v. Washington (In re Nunn), 

788 F.2d 617, 619 (9th Cir. 1986). The four promissory notes for 

the loans state that repayment begins at "the end of the ninth 

month following the month in which I cease to be matriculated, 

withdraw from, or become less than a half-time student at an 

approved school." R. Vol. V, exhibits AA-1, AA-2, AA-3, AA-4. 

Repayment also begins on the date the borrower fails to "enroll 

for the term and in the educational institution for which the 

application was approved;" fails "to verify [] status as a student 

when requested;" or fails "to make required interest payments." 

Id. At issue is whether debtor ceased to be matriculated, 

withdrew from, or became less than a half-time student before 

April 21, 1985--seven years before he filed bankruptcy. 

The relevant facts are undisputed. After graduating from law 

school in the spring of 1982, debtor attended business school. He 

graduated with his M.B.A. in January 1983. After that, he 

attended college on a part-time basis until 1990, taking a variety 

of courses. Creditor2 concedes that debtor was at least a 

half-time student, without a nine-month break, at all times before 

April 21, 1985. 

2 Creditor NYSHESC is effectively the only appellee. The other 

named appellees did not file briefs and were not parties to the 

district court proceeding. 

3 

Appellate Case: 94-1101 Document: 01019290289 Date Filed: 01/06/1995 Page: 3 
Debtor argues that his loans matured nine months after he 

graduated from business school because after that point he "ceased 

to be matriculated," in the sense that he was not enrolled in a 

degree program. Creditor, on the other hand, claims that the term 

matriculated simply means enrolled. According to creditor, 

debtor's loans did not mature until 1991, nine months after he 

ceased being a half-time student. 

The promissory notes do not define the term matriculate. The 

bankruptcy court noted that the dictionary offers both parties' 

definitions for matriculate: to enroll at a college or university, 

or to be accepted as a student or candidate for a degree. Without 

determining whether the term is ambiguous, the bankruptcy court 

concluded that "to be matriculated" within the meaning of the 

promissory notes, debtor only had to be enrolled in school. 

Alternatively, the court reasoned that even if "matriculated" 

required enrollment in a degree program, debtor had not ceased 

matriculating after he graduated from business school because 

"[w]ith all the courses he was taking he would have eventually 

qualified for some degree .... " R. Vol. I, doc. 29 at 7. In 

its order denying debtor's motion for a new trial, the bankruptcy 

court also concluded that, in any case, debtor is estopped from 

claiming he ceased matriculating because he did not inform 

creditor of that fact, as was required by the promissory notes. 

On appeal, the district court agreed with the bankruptcy court's 

primary holding that matriculate means to enroll in school. 

Interpretation of the promissory notes is governed by state 

law. ~ Butner v. United States, 440 u.s. 48, 54-55 

4 

Appellate Case: 94-1101 Document: 01019290289 Date Filed: 01/06/1995 Page: 4 
(1979) (property interests of the parties to a bankruptcy 

proceeding are "created and defined by state law"). New York law, 

which governs the interpretation of the notes, instructs that the 

terms of a contract should be construed in light of the whole 

contract. See W.W.W. Assocs .. Inc. v. Giancontieri, 566 N.E.2d 

639, 642 (N.Y. 1990). Courts resort to extrinsic evidence only 

when the contract is ambiguous. See id.; see also Vermejo Park 

Corp. v. Kaiser Coal Corp. (In re Kaiser Steel Corp.), 998 F.2d 

783, 789 (lOth Cir. 1993). Whether a contract is ambiguous is a 

question of law. In re Kaiser Steel Corp., 998 F.2d at 789. 

Interpretation of the unambiguous terms of a contract is also a 

question of law. Id. 

We hold that 

"matriculate" to mean 

the bankruptcy court erroneously interpreted 

enroll and that the term unambiguously 

requires enrollment in a degree program. Our interpretation does 

not offend other provisions of the notes. The notes list "failure 

to enroll for the term and in the educational institution for 

which the application was approved" as a separate event which 

triggers repayment. R. Vol. v, doc. AA-1. Moreover, the notes 

explicitly require repayment on the date the borrower fails to 

enroll, which contradicts the requirement to repay nine months 

after the borrower ceases to be matriculated, should matriculated 

be interpreted to mean enrolled. Another provision uses the terms 

matriculate and enroll in the same sentence: "I understand that I 

must report to the lending institution . [i]f I fail to 

enroll, leave school for any reason or cease to be 

matriculated .... " Id., doc. AA-5. These provisions indicate 

5 

Appellate Case: 94-1101 Document: 01019290289 Date Filed: 01/06/1995 Page: 5 
that matriculate is not synonymous with enroll. The wording of 

another provision, whereby the borrower agrees to sign a 

promissory note no later than four months after he or she 

"cease[s] being matriculated or at least a half-time student," 

indicates that matriculation is more than simple enrollment. 

Further, our interpretation is supported by a common-sense 

reading of the phrase "cease to be matriculated, withdraw from, or 

become less than a half-time student at an approved school." The 

first clause of that phrase sets out the general rule that the 

educational loan should be repaid when the borrower, for whatever 

reason, has stopped pursuing a degree. The second and third 

clauses identify circumstances in which the borrower's progress 

toward a degree will be deemed insufficient to delay maturity of 

the loan: the loan will mature if the borrower withdraws from 

school or the borrower pursues the degree too slowly, by enrolling 

less than half time. 

Even if the term matriculate were ambiguous, the extrinsic 

evidence supports 

guaranteed student 

established 

our conclusion. When debtor obtained his 

loans, government-backed student loans 

by Title IV of the Higher Education Act of 1965, 20 

U.S.C. §§ 1070-1097, eligibility was conditioned upon the student 

"maintaining satisfactory progress in the course of study he is 

pursuing." 20 U.S.C. § 1088f(e) (1) (1976); cf. 20 U.S.C. 

§ 1091(a) (1993 Supp.) (current version, conditioning eligibility 

on "enroll[ment] or accept[ance] for enrollment in a degree, 

certificate, or other program . . . leading to a recognized 

educational credential"). See generally In re Pelkowski, 990 F.2d 

6 

Appellate Case: 94-1101 Document: 01019290289 Date Filed: 01/06/1995 Page: 6 
•, 

737, 739-740 (3d Cir. 1993) (discussing guaranteed student loan 

program) . Since debtor had to pursue a course of study to obtain 

the loans, it is not surprising that maturity would be measured by 

whether he continued to pursue a course of study. 

Trial testimony of creditor's employee confirms that the term 

matriculate was meant to require pursuit of a degree. When asked 

what the term meant, as it was used in the promissory notes, 

Frederick Nick, creditor's senior student loan control 

representative, testified that matriculation referred to "whether 

or not a student's intent down the line is to attain a degree." 

R. Vol. III at 18. He explained that educational institutions 

throughout the nineteen seventies and early eighties determined 

whether a student was matriculating, but some schools no longer 

make that determination. Id. at 17-18. He stated that because 

not all schools determine whether students are matriculating, 

creditor stopped gauging maturity of student loans by whether 

students had ceased matriculating. Id. at 18. Matriculation was 

"a standard that ceased to be workable." See id. at 19. 

A party cannot, of course, unilaterally modify even 

unworkable provisions of a contract. Maturity of the loans is 

strictly governed by the terms of the promissory notes. We hold 

as a matter of law that debtor's loans matured nine months after 

he failed to enroll in a degree program. Debtor's uncontradicted 

testimony establishes that after he graduated from business 

school, he did not enroll in a degree program. There is no 

evidence to support the bankruptcy court's speculation that debtor 

would have eventually qualified for a degree, with all the courses 

7 

Appellate Case: 94-1101 Document: 01019290289 Date Filed: 01/06/1995 Page: 7 
he was taking. Therefore, debtor's loans matured in October 1983, 

nine months after he graduated from business school. 

At this juncture, dischargeability turns on the critical 

factor of whether there have been "any applicable suspension[s] of 

the repayment period" which must be excluded when determining 

whether the loans first became due more than seven years before 

the bankruptcy filing. See § 523(a) (8) (A); see. e.g. Huber v. 

Marine Midland Bank. N.A. (In re Huber), 169 B.R. 82 (Bankr. 

W.D.N.Y. 1994) (gauging dischargeability by whether deferments 

which debtor obtained, but for which he was ineligible, 

constituted applicable suspension of repayment period) ; Georgina 

v. Higher Educ. Assistance Found. (In re Georgina), 124 B.R. 562 

(Bankr. W.D. Mo. 1991) (determining whether nine forebearances 

constituted suspension of repayment within meaning of 

§ 523(a) (8) (A)). The bankruptcy court made no findings on this 

issue and the record is not sufficiently developed for this court 

to resolve the issue on appeal. Therefore, we must remand for a 

determination of whether there has been "any applicable suspension 

of the repayment period" within the meaning of§ 523(a) (8) (A). 

Next, we consider whether the loans are dischargeable under 

the undue hardship exception, § 523(a) (8) (B). This is a question 

of law which we review de novo. Cheesman v. Tennessee Student 

Assistance Corp. (In re Cheesman), 25 F.3d 356, 359 (6th Cir. 

1994); In re Roberson, 999 F.2d 1132, 1134 (7th Cir. 1993). 

Debtor bears the burden of demonstrating undue hardship. 

Roberson, 999 F.2d at 1137. 

8 

In re 

Appellate Case: 94-1101 Document: 01019290289 Date Filed: 01/06/1995 Page: 8 
The Code does not define "undue hardship." 

crafted numerous definitions. See. e.g., id. 

Courts have 

at 1134-36 

(discussing the mechanical, good faith, policy, and Brunner [v. 

New York State Higher Educ. Servs. Co£P., 831 F.2d 395 (2d. Cir. 

1987)] tests). The bankruptcy court applied the mechanical test, 

see Craig v. Pennsylvania Higher Educ. Assistance Agency (In re 

Craig), 64 B.R. 854, 856 (Bankr. W.D. Pa.), appeal dismissed, 64 

B.R. 857 (W.D. Pa. 1986), the good faith and policy tests, see 

North Dakota State Bd. of Higher Educ. v. Frech (In re Frech), 62 

B.R. 235, 241-43 & n.9 (Bankr. D. Minn. 1986), and the objective 

test, see In re BkYant, 72 B.R. 913, 915-16 (Bankr. E.D. Pa. 

1987) . The bankruptcy court concluded that debtor had not shown 

undue hardship under any of the tests. The district court agreed. 

After considering debtor's arguments on this issue, we affirm the 

denial of discharge under the undue hardship exception for 

substantially the reasons stated by the district court. 

Finally, we reject debtor's challenges to the bankruptcy 

court's procedural rulings. First, debtor complains that the 

bankruptcy court erred in refusing to admit his 

and the majority of his exhibits into evidence. 

sworn affidavit 

The bankruptcy 

court ruled that the excluded evidence contained offensive and 

irrelevant material. Debtor was allowed to testify at trial and 

the court admitted the exhibits debtor referred to during his 

testimony. Although debtor complains on appeal that the excluded 

evidence was essential to his case and, without it, he was denied 

a fair opportunity to present his position, the alleged unfairness 

is not borne out by the record. Debtor was given an opportunity, 

9 

Appellate Case: 94-1101 Document: 01019290289 Date Filed: 01/06/1995 Page: 9 
subject to the rules of evidence, to present his full testimony at 

trial. He made only a vague objection to the bankruptcy court 

that his "story" would not be complete without the evidence. We 

cannot conclude in this situation that the bankruptcy court abused 

its discretion, see Durtsche v. American Colloid Co., 958 F.2d 

1007, 1011 (lOth Cir. 1992), in excluding the evidence. 

Second, debtor argues that the bankruptcy court improperly 

allowed creditor to amend its position to conform to the evidence. 

Originally, creditor conceded that the loans first became due more 

than seven years before debtor filed bankruptcy and argued that 

debtor had been granted continuous deferments to delay repayment. 

At trial, creditor claimed that the loans did not mature until 

1991, when debtor ceased being a part-time student. Relying on 

Bankruptcy Rule 7015(b), the bankruptcy court amended creditor's 

pleadings to conform to the evidence. That rule, by incorporating 

Fed. R. Civ. P. 15, treats issues not raised by the pleadings, 

which have been tried by express or implied consent of the 

parties, as though they had been raised by the pleadings. See 

Bankruptcy Rule 7015; cf. Fed. R. Civ. P. 15(b). We review the 

bankruptcy court's decision to allow amendment of the pleadings 

for an abuse of discretion. Cf. Hardin v. Manitowoc-Forsythe 

CokP., 691 F.2d 449, 457 (lOth Cir. 1982) (reviewing amendment 

under Fed. R. Civ. P. 15(b) for abuse of discretion). 

Debtor claims that he suffered prejudice by creditor's change 

of position on the day of trial. See Bankruptcy Rule 7015(b). He 

insists that he was surprised by creditor's arguments regarding 

matriculation. As the district court observed, however, debtor 

10 

Appellate Case: 94-1101 Document: 01019290289 Date Filed: 01/06/1995 Page: 10 
himself raised the matriculation argument the day before trial. 

Prior to that, debtor had argued that the loans first became due 

more than seven years ago, but he had not argued that the loans 

matured because he ceased matriculating. Creditor plainly stated 

its disagreement with debtor's theory at trial and, with no 

objection from debtor, presented evidence in support of its view 

that the loans did not mature more than seven years before the 

bankruptcy. Debtor did not request a continuance, once creditor 

presented its evidence. See id. We hold that under these 

circumstances the bankruptcy court did not abuse its discretion in 

concluding that the maturity date of the loans was an issue tried 

by consent of the parties. 

The judgment of the United States District Court for the 

District of Colorado is AFFIRMED IN PART, REVERSED IN PART, and 

REMANDED for a determination of whether there has been "any 

applicable suspension of the repayment period" within the meaning 

§ 523 (a) (8) (A). 

11 

Appellate Case: 94-1101 Document: 01019290289 Date Filed: 01/06/1995 Page: 11 
No. 94-1101 - WOODCOCK v. CHEMICAL BANK 

SETH, Circuit Judge, writing separately: 

I am not prepared to concur in the resolution of the several 

questions included in the majority's disposition, but I concur in 

a remand. 

12 

Appellate Case: 94-1101 Document: 01019290289 Date Filed: 01/06/1995 Page: 12