Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-05391/USCOURTS-cand-3_04-cv-05391-1/pdf.json

Parties Involved:
Educational Credit Management Corporation
Plaintiff
The Front Porch
Defendant
The Front Porch Inc.
Defendant
The Front Porch Telemarketing
Defendant

Document Text:

United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

EDUCATIONAL CREDIT MANAGEMENT

CORPORATION,

Plaintiff,

 v.

THE FRONT PORCH TELEMARKETING

a/k/a THE FRONT PORCH INC.,

Defendant. /

No. C 04-05391 WHA

ORDER DENYING 

PLAINTIFF’S MOTION TO

AMEND JUDGMENT AND

VACATING HEARING

INTRODUCTION

In this wage-garnishment action under the Federal Family Education Loan Program

(“FFELP”), plaintiff Educational Credit Management Corporation (“ECMC”) secured default

judgment in its favor against defendant The Front Porch Telemarketing. Plaintiff now moves

pursuant to FRCP 59 and 60 to amend that judgment to include an award of monetary damages

for the entire amount of the student-loan debt of Karl W. Redmon, an employee of Front Porch. 

Plaintiff has not demonstrated any ground under FRCP 60(b) warranting amendment of the

judgment. Plaintiff’s motion, therefore, is DENIED.

STATEMENT

The facts underlying this litigation are discussed in more detail in the order dated

December 8, 2005, granting default judgment. In brief, plaintiff ECMC is a guaranty agency

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United States District Court

For the Northern District of California

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covered under the FFELP. See 20 U.S.C. 1071(a)(1)(A). As a means of collecting defaulted

student loans, guaranty agencies have the authority to issue withholding orders to employers of

borrowers in default. 20 U.S.C. 1095a. These orders may require the employers to garnish and

remit up to ten percent of the borrowers’ disposable income, except as otherwise limited by

federal law. Ibid.; 15 U.S.C. 1673. Redmon owes student-loan debt to ECMC that is in default. 

The balance of Redmon’s debt was $11,624.55 as of October 23, 2005, with a daily-interest

accrual of $1.25. Front Porch has yet to remit any of Redmon’s wages in compliance with a

withholding order sent to it by ECMC. 

On June 28, 2005, ECMC filed an amended complaint against Front Porch demanding

injunctive relief for its failure to comply with the withholding order in violation of 20 U.S.C.

1095a and damages in the amount that defendant should have withheld from Mr. Redmon’s

wages. ECMC served the summons and first amended complaint on Front Porch on July 25,

2005. After Front Porch failed to respond, ECMC sought and received entry of default by the

Clerk of the Court. ECMC then moved for default judgment, seeking relief for Front Porch’s

alleged violation of 20 U.S.C. 1095a. 

In that motion, plaintiff sought damages equaling the full amount of Redmon’s loan

debt. In the alternative, plaintiff sought injunctive relief against Front Porch requiring it to

comply with ECMC’s withholding order. Plaintiff also sought attorney’s fees, costs and

punitive damages. On December 8, 2005, after reviewing plaintiff’s moving papers and

conducting oral argument, the Court granted plaintiff’s motion and awarded plaintiff injunctive

relief, fees and costs but denied any monetary award. The December order found that the

FFELP did not provide authority for a court to impose damages against an employer for the full

amount of the student debt. Judgment was entered consistent with that ruling. Plaintiff now

moves to amend the judgment to include an award of monetary damages to the full extent of

Redmon’s loan debt.

ANALYSIS

FRCP 60(b)(1) provides that a court may relieve a party from a final judgment for

“mistake, inadvertence, surprise, or excusable neglect.” FRCP 60(b)(6) allows such relief for

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“any other reason justifying relief from the operation of the judgment.” This latter catch-all

provision “has been used sparingly as an equitable remedy to prevent manifest injustice.” 

United States v. Alpine Land & Reservoir Co., 984 F.2d 1047, 1049 (9th Cir. 1993). 

“[A]ttorney error is insufficient grounds for relief under both Rule 60(b)(1) and (6).” Allmerica

Fin. Life Ins. and Annuity Co. v. Llewellyn, 139 F.3d 664, 666 (9th Cir. 1997).

First, plaintiff argues that “[b]ecause the court did not require oral argument, but merely

indicated its intention to grant the motion, counsel did not realize that the moving papers had

stated the request in the alternative” (Br. 2). Plaintiff’s description of the oral argument is not

entirely accurate. The Court held a hearing on December 8, 2005, at which plaintiff’s counsel

was present. The Court did indicate its intention to grant plaintiff’s motion. Yet the Court also

offered the floor to plaintiff’s counsel to make any points counsel wished. Plaintiff’s counsel

made none. Basically, plaintiff’s counsel wishes to undo the mistake of including the

alternative request for injunctive relief in its moving papers. According to plaintiff’s counsel,

this was mere inadvertence. Standing alone, such a purported error by counsel is not sufficient

to warrant relief under FRCP 60(b). Allmerica, 139 F.3d at 666. 

Second, plaintiff also suggests that the December order erred in its application of the law

in denying its request for damages in the amount of Redmon’s full debt. Plaintiff’s arguments

ignore the primary basis of the December order. As noted above, that order found that the

FFELP did not provide courts with the authority to burden employers with the full amount of a

loan debt (December Order at 5):

Yet from the face of 20 U.S.C. 1095a, Congress restricts damages

against non-compliant employers to the amount such an employer

actually failed to withhold. The statute does not support ECMC’s

requests to burden the employer with the entirety of the debt. 20

U.S.C. 1095a(a)(6). Indeed, the statute indicates that “an

employer shall not be required to vary the normal pay and

disbursement cycles in order to comply.” Ibid. Such language

indicates an intent by Congress to encourage employers to

comply, not to saddle the employers with their employees’ debts.

Put simply, no authority exists to grant plaintiff the damages it seeks. Plaintiff makes entirely

tangential arguments which fail to question the accuracy of this legal conclusion. 

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CONCLUSION

For the foregoing reasons, plaintiff’s motion to amend the judgment is DENIED. Finding

further argument unnecessary, the hearing on this motion is VACATED.

IT IS SO ORDERED.

Dated: January 24, 2006 WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

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