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Morgen v. Student Loan Finance Corporation

United States District Court, W.D. North Carolina, Statesville Division

October 25, 2017




         THIS MATTER is before the Court on defendant Reunion Student Loan Finance Corporation's (“SLFC's”) Motion to Dismiss or to Transfer Venue and Plaintiff's Motion for Leave to File Surreply. While the Court will deny leave to file the Surreply, the Court has considered the substantive arguments in the plaintiff's supporting Brief (#26-1) herein as such Brief sets forth the substance of plaintiff's rebuttal to the Reply. Having considered the parties' motions and reviewed the accompanying pleadings, the Court enters the following Order.


         I. Background

         In this action, plaintiff alleges violations of the Fair Credit Reporting Act (“FCRA”) arising out of three student loans that plaintiff received in 2004. Plaintiff applied for three “Goal II” loans with U.S. Bank through its education loan servicer, SLFC, to assist in payment of tuition, fees, and expenses to the McNally Smith College of Music in St. Paul, Minnesota.

         Plaintiff denies receiving money through loans from SFLC and contends that such defendant has harmed her credit score. She has also sued the three major credit reporting firms. In doing so, plaintiff claims SLFC, and in turn the credit reporting agencies, have cost her housing and employment opportunities, as well as created significant economic and personal stress in her life. In response, SLFC denies wrongdoing and argues that plaintiff did receive money through the aforementioned loans, the proceeds of which went directly to her music school.

         In the instant motion, SLFC asserts that the loan applications and promissory notes contained a forum selection clause identifying the State of South Dakota as the venue for any action arising from the promissory notes. Defendants also argue that any claims against them are barred by an applicable statute of limitations. Defendants have proffered evidence of the loans through exhibits containing loan documentation for every transaction, including records of Electronic Funds Transfers being made to the school by the lender.

         II. Plaintiff's Objection to SLFC's Exhibits

         Before the Court can address SLFC's substantive motions, it must first discuss plaintiff's contention that SLFC's exhibits should not be considered as they are inadmissible as hearsay as they have not been accompanied by affidavits proving their authenticity as business records.

         Clearly, consideration of documents extraneous to the Complaint is well within the discretion of the Court when considering a Motion to Transfer Venue. Jacobs Vehicle Sys., Inc. v. Zhou Yang, 1:12cv181 at *6 (M.D. N.C. Sept. 10, 2013). The Court agrees with plaintiff, however, that SLFC failed to accompany Exhibit A to its Supporting Brief (the loan applications and promissory notes) with an affidavit from the records keeper, see (#17-2), or accompany Exhibits A & B to its Reply (TIL disclosures and EFT records) with affidavits from the records keeper. See (#25-1 and #25-2). Further, this Court is cognizant of the fact that in the context of motions for summary judgment, unsworn, unauthenticated documents cannot be considered, Orsi v. Kirkwood, 999 F.2d 86, 92 (4th Cir. 1993), inasmuch as at the summary judgment stage, “documents must be authenticated by and attached to an affidavit that meets the requirements of Rule 56(e).” 10A Charles A. Wright et al., Federal Practice and Procedure § 2722, at 58-60 (1983 & 1993 Supp.).

         While there is a pending Motion to Dismiss, SLFC's exhibits are being considered only on the Motion to Transfer Venue, which is a non-dispositive motion that does not go to the merits of the claims. Because such exhibits are only being considered in determining venue, they are only offered to prove whether a valid and enforceable agreement exists between these parties as to venue, an agreement which immaterial to the substantive allegations of the Complaint which concern fair credit reporting. Because these exhibits are not offered to prove the truth of the matters asserted in them, they are not inadmissible hearsay under Federal Rule of Evidence 801(c); rather, they are clearly relevant to the Motion to Transfer Venue. Venable v. Rug Renovating Co., Inc., CIV. A. 90-1378, 1990 WL 124294, at *3 (E.D. La. Aug. 9, 1990). In addition, there is no plausible contention that these documents are inauthentic.

         As will be discussed below, the EFTs have only been considered on the issue of where the last act occurred, a determination necessary in considering whether North Carolina's public policy against forum selection clauses applies. The loan applications and promissory notes have been considered only to the extent they evince the forum selection clause at issue and to determine whether requiring litigation in South Dakota creates a grave hardship for plaintiff. The Court will consider these exhibits only for those reasons and has not considered those materials in connection with SLFC's Motion to Dismiss. Plaintiff's objection is, therefore, overruled. Whether a transferee court will consider those exhibits in conjunction with a Motion to Dismiss is not reached by this Court.

         III. Standard of Review

         In reviewing a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), the Fourth Circuit has directed that courts “take facts in the light most favorable to the Plaintiff, ” but has cautioned that courts “need not accept the legal conclusions drawn from the facts” or “unwarranted inferences, unreasonable conclusions, or arguments.” Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008). In order to survive a motion to dismiss, a complaint “must contain sufficient factual ...

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