NATIONAL COLLEGIATE STUDENT LOAN TRUST 2007-2, a Delaware Statutory Trust, Plaintiff/Appellant,
DONNA RAND (aka DONNA SMOCK) and THOMAS SMOCK, a married couple, Defendants/Appellees.
from the Superior Court in Maricopa County No. CV 2013-053254
The Honorable John R. Hannah, Jr., Judge
Sessions Fishman Nathan & Israel, LLP, San Diego, CA By
Damian P. Richard Counsel for Plaintiff/Appellant
Young, PLC, Phoenix By Taylor C. Young, Erin Ford Faulhaber
Counsel for Defendants/Appellees
Patricia A. Orozco delivered the opinion of the Court, in
which Presiding Judge Andrew W. Gould and Judge Peter B.
Patricia A. Orozco, Judge
National Collegiate Student Loan Trust (National) appeals
from a judgment in favor of Donna and Thomas Smock (the
Smocks). National argues the trial court erred in granting
judgment in favor of the Smocks because the debt was a
student loan that was not discharged in the Smocks'
Chapter 7 bankruptcy. For the following reasons, we reverse
and remand for proceedings consistent with this opinion.
AND PROCEDURAL HISTORY
In September 2009, the Smocks sought Chapter 7 bankruptcy
protection. They identified National as a creditor with an
unsecured, non-priority claim. In their petition, the Smocks
contended none of their debts constituted student loan
obligations. They provided notice of their pending Chapter 7
bankruptcy to all creditors, including National. National did
not object or otherwise respond to the Smocks' notice of
pending bankruptcy. The Chapter 7 discharge, specifically
provided that "[d]ebts for most student loans" were
In September 2013, National filed suit against the Smocks
alleging breach of contract. According to National, Donna
applied for a student loan and Thomas co-signed. National
disbursed $26, 000 to the Smocks, who subsequently defaulted.
The Smocks answered the complaint, admitted they incurred the
debt, but contended it was not a "student loan" and
the debt was discharged as part of their 2009 Chapter 7
bankruptcy. The case was arbitrated in June 2014 in favor of
the Smocks. National appealed and requested a bench trial.
The trial court conducted a proceeding at the time set for
trial, but did not swear in any witnesses, admit any exhibits
or receive any evidence. No motions had been filed and the
court held a discussion with the parties. During the
discussion, National admitted the debt was listed among the
debts the Smocks disclosed in their 2009 bankruptcy, but
argued the debt was a non-dischargeable student loan. The
Smocks did not dispute the existence of the debt, instead
contending it was discharged in their bankruptcy. The Smocks
admitted they did not file an adversary proceeding in the
The trial court did not consider whether the debt was a
student loan, and instead determined the Bankruptcy Court
order was "valid on its face, " interpreting the
order as discharging the Smocks' debt to National. The
trial court entered judgment in favor of the Smocks, and
noted that "any relief from [the discharge] order must
come from Bankruptcy Court and not this Court." National
timely appealed. We have jurisdiction pursuant to Article 6,
Section 9, ...