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SAVAGE v. SCALES

March 16, 2004.

TONY EDWARD SAVAGE, Plaintiff,
v.
JIM SCALES, CUSTOMER RELATIONS MANAGER, et al., Defendants



The opinion of the court was delivered by: REGGIE WALTON, District Judge

MEMORANDUM OPINION

The pro se plaintiff, Tony Edward Savage, has filed this lawsuit against several defendants, alleging that the defendants violated his civil rights as protected by 42 U.S.C. § 1983 (2000), his due process rights guaranteed by the United States Constitution, and D.C. Code § ll-921(3)(A)(vii), when they garnished his wages to satisfy a student loan he owed to the United States Department of Education without first providing him with notice or a hearing. Currently before the Court are the motions of the defendants for dismissal and plaintiff's motion for summary judgment. For the reasons set forth herein, the Court will grant the defendants' motions for dismissal and dismiss this action with prejudice.

I.

  At the time he filed his complaint, plaintiff was an employee of the District of Columbia Department of Corrections*fn1 and a resident of Virginia. Compl. ¶ 3.*fn2 He was sued by the Page 2 North Carolina State Education Assistance Authority ("NCSEAA" or the "Authority"), one of the defendants in this action, in 1985, in the General District Court of Richmond, Virginia. Id. ¶ 7. The suit was instituted to recover funds plaintiff allegedly owed for a student loan he had acquired. Id. According to plaintiff, he never received any notice of the lawsuit and was never served with the summons or complaint. Id. ¶ 9. As a result of his failure to appear, NCSEAA was granted a default judgment against plaintiff in the amount of $4,100. Id. ¶ 10. Subsequently, in September 1995, plaintiff received a summons to appear in the General District Court to answer the NCSEAA's motion for garnishment of his wages. Id. ¶ 11. Plaintiff appeared in court on September 19, 1995, at which time he orally requested that the default judgment be vacated because he had no prior knowledge that the action had been filed against him. Id. ¶ 13. Plaintiff alleges that the General District Court thereafter "enjoined" the defendant's motions for a default judgment and garnishment, determined that the NCSEAA had failed to effect proper service upon plaintiff, and "ruled that the [m]otion for [g]arnishment [o]rder be dismissed with prejudice on the ground that the statute of limitations had run out from the 1985 action." Id. ¶¶ 14-15.

  Despite the ruling of the Richmond, Virginia Court, plaintiff states that on July 22, 2002, Page 3 his paycheck was garnished in the amount of $141.07*fn3 and his bi-weekly paychecks continued to be garnished in that amount. Id. ¶ 16. Plaintiff contacted the District of Columbia's Office of Pay/Retirement ("D.C. OPR") on July 24, 2002, to inquire about the garnishment of his wages. Id. ¶ 17. At that time, he spoke with defendants Jean Carson, the office supervisor, and Judy Banks, the office director, who informed plaintiff that the office had received an "Administrative Order" from the NCSEAA, authorizing the garnishment of plaintiff's wages. Id. ¶ 18. Carson and Banks faxed plaintiff a copy of this "Administrative Order," which was entitled "Notice of Wage Garnishment and Withholding Order." Id.; see also Compl., Exhibit ("Ex.") A (Notice of Wage Garnishment and Withholding Order dated April 2, 2002). In this Order, the NCSEAA stated that it was "order[ing] and direct[ing]" the D.C. OPR "to withhold income from the debtor's [(plaintiff's)] disposable pay from employment for payment of defaulted student loan(s)." Compl., Ex. A. The NCSEAA stated that it was granted this authority pursuant to federal law, and stated that "a deduction of 10% of disposable pay. . . ." should be paid to the NCSEAA until such time as the NCSEAA informed the office to cease the payments. Id. As of the date of the "Order," plaintiff's outstanding balance was represented to be $9,005.10. Id.

  On July 24, 2002, plaintiff contacted the NCSEAA and spoke with defendant Jim Scales, a NCSEAA employee, about the garnishment order. Compl ¶ 19. Mr. Scales informed plaintiff that he did not have plaintiff's current mailing address and therefore had been Page 4 unable to send plaintiff notice prior to the attachment and garnishment of plaintiffs wages. Id. ¶ 20. Plaintiff then gave Mr. Scales his mailing address. Id. ¶ 21. In a letter addressed to Scales and Banks dated July 24, 2002, and entitled "Claim Demand and/or in Alternative Notice to File Civil Rights Action for Due Process Violations," plaintiff indicated his intention to file a lawsuit for the defendants' alleged unlawful garnishment of his wages without providing him notice prior to the garnishment. Compl., Ex. C (Letter to Jim Scales and Judy Banks from Tony Edward Savage dated July 24, 2002). Plaintiff stated that the garnishment was obtained by "fraudulent representation[s]" made by a NCSEAA employee, Lavave Ennis, and that plaintiff was therefore deprived of due process. Id. at 2. Plaintiff stated he would seek to recover $1,500,000 from the State of North Carolina and the NCSEAA and its employee, in addition to $1,500,000 from the D.C. OPR and its employees. Id. Plaintiff demanded that the State of North Carolina and the NCSEAA rescind the Order of garnishment and return to him all garnished monies. Id. at 3.

  In a letter dated August 12, 2002, the NCSEAA informed plaintiff that
it is apparent that you misunderstand the past sequence of events relative to your defaulted student loan account. You defaulted on your student loans in 1985. The Authority referred your account to outside attorneys who obtained a judgment against you on our behalf in Richmond, Virginia in March 1987. A second action was subsequently initiated against you in 1995 through another outside attorney. It is this second action that was dismissed. However, the judgment on the initial action remained and remains valid.
It appears that judicial garnishment could not be pursued against you in 1995 based on the initial judgment due to your status as an employee of the District of Columbia. However, your debt was not `dismissed' and remains valid. . . .
  The garnishment order that the Authority has recently issued to your employer is not a result of the past judgment. We are not pursuing judicial garnishment. Page 5 Instead, in the time since the judgment was obtained, federal law has changed and now allows the Authority to pursue administrative wage garnishment directly, without the need for judicial involvement. There is no current prohibition against administrative wage garnishment of District of Columbia employees.
 
As a result, your debt is valid and our initiation of administrative wage garnishment to collect this debt on behalf of the U.S. Department of Education is legitimate.
The Authority provided you with due process relative to administrative wage garnishment when we sent you a notice regarding these proceedings in late February.
Compl., Ex. B (Letter to Tony E. Savage from Wayne Johnson, NCSEAA Director of Guaranty Agency Services, dated August 15, 2002).

  Plaintiff filed his complaint in this action in the Superior Court for the District of Columbia on September 17, 2002. On October 10, 2002, the action was removed to this Court based on federal question jurisdiction. Plaintiff argues that pursuant to District of Columbia law, defendants were required to provide him with notice and an administrative hearing prior to garnishing his wages and because defendants failed to do so, they have violated his due process rights protected by the Fifth and Fourteenth Amendments of the United States Constitution. Compl. at 7, ¶ 29.

  II.

  The first issue the Court will address is plaintiff's Motion for Judgment by Default.*fn4 Plaintiff bases his request for a default judgment on the fact that the District of Columbia defendants did not timely file a responsive pleading or a motion to dismiss his complaint in Page 6 accordance with the time limits prescribed by the Federal Rules of Civil Procedure. The District of Columbia defendants did file a Second Motion for Extension of Time on November 26, 2002, the day after their time allotted for a response had expired.*fn5 This motion was subsequently granted on February 7, 2003. Defendants also filed a Motion to Dismiss on November 27, 2002, which is currently pending resolution. No entry of a default has been entered by the Clerk of the Court.

  "When an application is made to the court under Rule 55(b)(2) for the entry of a judgment by default, the district judge is required to exercise sound judicial discretion in determining whether the judgment should be entered." 10A Wright, Miller & Kane, Federal Practice and Procedure § 2685 (3d ed. 1998); see also Jackson v. Beech, 636 F.2d 831, 835 (D.C. Cir. 1980); United States v. Schofield, 197 F.R.D. 6, 8 (D.D.C. 2000). Judicial policy strongly favors deciding cases on their merits rather than by default judgments; therefore, default judgements are usually reserved for totally unresponsive parties. Jackson, 636 F.2d at 835-836. In determining whether the entry of a default judgment is appropriate, the District of Columbia Circuit has announced three criteria to consider: (1) whether the defendant's lack of response was willful; (2) whether not entering a default would prejudice the plaintiff; and (3) whether the defendant will likely assert a meritorious defense. Id. at 836.

  Here there is no evidence of bad faith or willful disregard by the District of Columbia defendants, as they submitted their motion for an extension of time to respond to the Page 7 complaint one day after the response deadline, and before plaintiff filed his motion for a default judgment. In addition, the District of Columbia defendants presented a reasonable, good faith explanation for their slight delay in replying to plaintiffs motion. Plaintiff also sustained no prejudice as a result of the late filing, as his ability to adjudicate his claim on the merits has not been diminished by the delay. Finally, the District of Columbia defendants have asserted a potentially meritorious defense in their motion to dismiss. For all of these reasons, plaintiff's motion for the entry of a default judgment against the District of Columbia defendants is denied.

  III.

  Because the two groups of defendants (the North Carolina defendants and the District of Columbia defendants) have filed separate pleadings seeking dismissal of plaintiffs complaint on slightly different grounds, and plaintiff has filed separate motions for summary judgment against each group of defendants, the Court will separately discuss and resolve each of the motions as they pertain to each of the two groups of defendants.

 A. The North Carolina ...


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