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ECMC v. Acosta-Conniff

United States District Court, M.D. Alabama, Northern Division

January 5, 2018

ECMC, Appellant,
v.
ALEXANDRA ELIZABETH ACOSTA-CONNIFF, Appellee.

          MEMORANDUM OPINION AND ORDER

          W. KEITH WATKINS CHIEF UNITED STATES DISTRICT JUDGE

         This action is before the court on the mandate of the U.S. Court of Appeals for the Eleventh Circuit. (Doc. # 35.) The Eleventh Circuit vacated this court's judgment and remanded this action for further proceedings in accordance with its instructions. (Doc. # 34.) For the reasons that follow, this action will be remanded to the bankruptcy court for additional factual findings and legal determinations.

         I. BACKGROUND

         On review of the bankruptcy court's determination that Appellee Alexandra Elizabeth Acosta-Conniff's (“Ms. Conniff”) student loan debt was dischargeable under 11 U.S.C. § 523(a)(8), this court reversed the judgment of the bankruptcy court. It found that Ms. Conniff failed to demonstrate the requisite “additional circumstances” to satisfy the second prong of the three-part Brunner test, which this circuit has adopted when considering the dischargeability of student loan debt. See Brunner v. N.Y. State Higher Educ. Serv. Corp., 831 F.2d 395, 396 (2d Cir. 1987); Hemar Ins. Corp. of Am. v. Cox (In re Cox), 338 F.3d 1238, 1241-42 (11th Cir. 2003). On appeal, the Eleventh Circuit vacated the decision and remanded with instructions to “apply clear-error review to the bankruptcy court's factual findings as to each prong of the Brunner test and de novo review to any of the bankruptcy court's legal conclusions.” ECMC v. Acosta-Conniff (In re Acosta-Conniff), 686 F. App'x 647, 650 (11th Cir. 2017) (emphasis in original). In its opinion, the Eleventh Circuit noted that it may be necessary for this court to remand this action to the bankruptcy court for additional findings of fact. Id. at 650 & n.1.

         As predicted by the Eleventh Circuit, remand is necessary. When reviewing a bankruptcy court's decision, “the district court . . . is [not] authorized to make independent factual findings.” Equitable Life Assurance Soc'y v. Sublett (In re Sublett), 895 F.2d 1381, 1384 (11th Cir. 1990). “If the bankruptcy court's factual findings are silent or ambiguous as to an outcome determinative factual question, the district court . . . must remand the case to the bankruptcy court for the necessary factual determination.” Id. (citing Wegner v. Grunewaldt, 821 F.2d 1317, 1320 (8th Cir. 1987)). Here, the facts are insufficiently developed for this court to determine whether Ms. Conniff has met her burden of proving Brunner's three requirements, and there are issues of fact that the bankruptcy court must clarify before it can determine-and this court can review-whether Ms. Conniff has satisfied Brunner's requirements.

         II. DISCUSSION

         In its opinion vacating this court's decision reversing the bankruptcy court's discharge order, the Eleventh Circuit set out the elements of the Brunner test that Ms. Conniff must prove to obtain a discharge of her student debts:

         Under the Brunner test, a debtor is entitled to discharge of her student debts if she proves all of the following:

(1) That the debtor cannot maintain, based on current income and living expenses, a “minimal” standard of living for herself and her dependents if forced to repay the loans;
(2) That additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and
(3) That the debtor has made good faith efforts to repay the loans.

In re Acosta-Conniff, 686 F. App'x 647, 648 (11th Cir. 2017) (citing Brunner, 831 F.2d at 396). The Eleventh Circuit reiterated that “[t]he debtor bears the burden of proving each prong of the Brunner test by a preponderance of the evidence.” Id. at 649 (citing Educ. Credit Mgmt. Corp. v. Mosley (In re Mosley), 494 F.3d 1320, 1324 (11th Cir. 2007)).

         A. Minimal Standard of Living

         The first prong of the Brunner test is whether the debtor can maintain a “‘minimal' standard of living for herself and her dependents if forced to repay the loans.” Brunner, 831 F.2d at 396. A “minimal standard of living” is not one of abject poverty, but it does require “more than a showing of tight finances.” Penn. Higher Educ. Assistance Agency v. Faish (In re Faish), 72 F.3d 298, 306 (3d Cir. 1995). When conducting this analysis, courts compare a debtor's disposable income, determined by the difference between monthly income and reasonable and necessary monthly expenses, with the monthly payment necessary to repay the student loans. See Douglas v. Educ. Credit Mgmt. Corp. (In re Douglas), 366 B.R. 241, 253-55 (Bankr. M.D. Ga. 2007). A court making this ...


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