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O'Neal v. United States of America Inc.

United States District Court, N.D. Alabama, Northeastern Division

December 20, 2018




         Before the Court is defendant FedLoan's Motion to Dismiss plaintiff's complaint pursuant to Rule 12(b)(6), Fed. R. Civ. P.[1] For the reasons stated below, this Court finds that the motion to dismiss is due to be granted.


         On August 24, 2018, the plaintiff, Wendell Dwayne O'Neal, filed a pro se complaint in which he made several allegations arising out of student loans he obtained in order to attend one or more online colleges.[2] Over the next two months, O'Neal has filed numerous motions. On August 29, 2018, O'Neal filed a motion for leave to filed an amended complaint to which he attached his amended complaint, an exhibit entitled “Memorandum of Points and Authorities Supporting Falsified Debt Statement, ” a letter from the U.S. Department of Education, and a letter from the University of Phoenix. (Doc. 9). On August 30, 2018, O'Neal filed a “Motion for Reversal of U.S. Secretary of Education Administrative Decision by De Novo Judgment.” (Doc. 8). On September 4, 2018, he filed a “Motion for Judicial Notice and to Permit Non-Attorney Electronic Filing.” (Doc. 10). On September 5, 2018, O'Neal filed a “Motion to Amend Complaint by Adding Claims.” (Doc. 11). On September 18, 2018, he filed a “Motion for Court to Exercise Supplemental Jurisdiction Over State Claims and Judicial Notice.” (Doc. 12). On September 20, 2018, O'Neal filed a “Motion for Judicial Notice of Maricopa First Amended Habeas Corpus Complaint and Borrowers Defense Regulations Decision for Second Complaint Consideration.” (Doc. 14). On October 4, 2018, O'Neal filed a “Motion for Judicial Notice of Arizona Maricopa Superior Court Proceedings.” (Doc. 15). On October 25, 2018, O'Neal filed a “Motion to Withdraw Motion for Leave to File Second Judicial Review and Tort Claim Complaint.” (Doc. 22). However, on November 9, 2018, O'Neal filed a motion to withdraw that motion. (Doc. 27). On November 13, 2018, he filed a “Motion for Required Joinder of Party Based Upon Arizona Maricopa Superior Court Proceedings.” (Doc. 28). Finally, on November 26, 2018, O'Neal filed an “Emergency Motion for Summons Against Remaining Defendants.” (Doc. 32).

         All of the motions that O'Neal filed after his initial complaint appear to be attempts to amend his complaint by adding claims or defendants. O'Neal's filings are somewhat disjointed and difficult to comprehend. Many of his filings are lengthy, repetitive, and contain numerous footnotes that often cite to other cases that O'Neal has filed against the same defendants in other jurisdictions. Nevertheless, this Court has done its best to try and distill the plaintiff's allegations from his pleadings.

         As best this Court can determine, O'Neal has alleged that he obtained student loans from the federal government to attend the University of Phoenix and Axia Online College. Although not entirely clear, O'Neal appears to assert that both colleges are operated by a parent company called Apollo. According to O'Neal, Apollo falsely certified loans for him to enroll in a degree program that he would ultimately not be able to afford. Therefore, O'Neal says, he withdrew from his classes. O'Neal claimed that Apollo returned a portion of the loan to the Department of Education after he failed to complete his coursework. O'Neal repeatedly refers to a “self-management agreement” that he claims to have entered into and appears to claim that, because of that agreement, the money should have been returned to him instead of the Department of Education. According to O'Neal, Apollo's failure to give the money directly to him caused him to default on his student loans. The only claims that O'Neal appears to assert against FedLoan are his contentions that it improperly reported his student loan debt to the credit bureaus, and that it was somehow responsible for his default.

         O'Neal also claimed that his student loan debt was discharged in a Chapter 7 bankruptcy proceeding in Arizona, but, he says, the Department of Education is continuing to attempt to collect the debt through tax offsets and to report negative information to credit bureaus. O'Neal attached a letter from the Department of Education to one of his pleadings which appears to indicate that O'Neal objected to the tax offset on grounds that he was disabled, that when he obtained the loans he had a condition that prevented him from meeting the state requirements for performing the occupation for which the school was to train him, and that he believed the debt was not an enforceable debt. (Doc. 9-3). In the letter, dated August 8, 2018, the Department found that O'Neal's debt was legally enforceable.

         As noted, O'Neal filed several different motions in the months following the filing of his initial complaint. In those filings, O'Neal appears to attempt to add claims as well as additional defendants. In addition to repeating many of the claims raised in his initial filing, O'Neal claimed that a law firm that represented Apollo in a prior proceeding and two of its attorneys engaged in a conspiracy against him by making false allegations to a federal court in Arizona. He also alleged that an entity called Corporate Service Corporation, which O'Neal says is a statutory agent for accepting service of process on Apollo's behalf, fraudulently concealed documents relating to a subpoena that was issued by the Maricopa County Superior Court in Arizona. O'Neal sought to add Corporate Service Corporation and The University of Phoenix, as defendants. (Doc. 28). However, the crux of O'Neal's initial complaint appears to be his contention that the Department of Education improperly denied his objection to its decision to offset his taxes in order to collect a debt that the claims not to owe. (Doc. 1).

         FedLoan's Motion to Dismiss

         In its motion to dismiss, FedLoan points out that O'Neal has filed multiple unsuccessful lawsuits in both state and federal court that arise out of the same set of facts regarding the student loans he obtained in or around 2009. Therefore, FedLoan says, O'Neal's claims are barred by the principles of res judicata and collateral estoppel. In his reply, O'Neal does not dispute that he has filed previous lawsuits regarding his student loans. In fact, he cites to several of the cases and asks this Court to consider allegations and arguments that he made in those complaints. (See e.g., Doc. 15). However, O'Neal contends that the present claim is different because, he says, it arises out of the defendants' disregard for the alleged fact that the debt was discharged in a bankruptcy proceeding in Arizona.

         Standard of Review

         Rule 12(b)(6) enables a defendant to move to dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). A Rule 12(b)(6) motion to dismiss tests the sufficiency of a complaint against the “liberal pleading standards set forth by Rule 8(a)(2).” Erickson v. Pardus, 551 U.S. 89, 94 (2007). When evaluating a Rule 12(b)(6) motion to dismiss, a district court accepts as true the allegations in the complaint and construes the allegations in the light most favorable to the plaintiff. See Brophy v. Jiangbo Pharms. Inc., 781 F.3d 1296, 1301 (11th Cir. 2015). A complaint may be dismissed for failure to state a claim “when its allegations ... show that an affirmative defense bars recovery on the claim.” Marsh v. Butler County, Ala., 268 F.3d 1014, 1022 (11th Cir. 2001)(en banc)(stating that res judicata is an affirmative defense). In reviewing this case, this Court notes that “[p]ro se pleadings are held to a less stringent standard than pleadings drafted by attorneys and will, therefore, be liberally construed.” Tannenbaum v. United States, 148 F.3d 1262, 1263 (11th Cir. 1998)(per curiam)(citation omitted).


         In discussing res judicata and collateral estoppel, the United ...

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