Andrich v. Navient Solutions Inc.

          ORDER

          Honorable Susan M. Brnovich, United States District Judge.

         Pending before the Court is Defendant Pennsylvania Higher Education Assistance Agency's Motion to Dismiss Pursuant to Rule 12(b)(6). (Doc. 55, “Mot.”). Plaintiff Devin Andrich filed a Response, (Doc. 76, “Resp.”), and Defendant filed a Reply, (Doc. 80, “Reply”). Oral argument was held on August 8, 2019. The Court has now considered the Motion, Response, and Reply, along with arguments and relevant case law.

         I. BACKGROUND

         Plaintiff initiated this action on August 31, 2018. (Doc. 1). He filed a Second Amended Complaint on December 28, 2018, (Doc. 39, “SAC”), naming as defendants (1) SLM Corporation, (2) SLM Education Loan Corporation, (3) Navient Solutions, Inc., (4) Navient Solutions, LLC, (5) Pennsylvania Higher Education Assistance Agency (“PHEAA”), (6) Performant Recovery Services, Inc., and (7) DOES I-X, as individuals or entities. Defendant Performant Recovery Services, Inc. was dismissed from the action on January 22, 2019. (Doc. 53). Plaintiff refers to Defendants SLM Corporation and SLM Education Loan Corporation collectively as “Sallie Mae.” (SAC ¶ 4). Plaintiff refers to Defendants Navient Solutions, Inc. and Navient Solutions, LLC collectively as “Navient.” (SAC ¶ 7). However, due to counsels' representations of entity name changes that have occurred over the time period at issue, the Court will refer to Defendants SLM Corporation and SLM Education Loan Corporation collectively as “SLM.” The Court will refer to Navient Solutions, Inc. and Navient Solutions, LLC collectively as “NSL.”

         The following facts are assumed to be true for the purpose of deciding this Motion.^[1]Plaintiff entered into a loan agreement with SLM on or about October 5, 2003 (the “Loan Agreement”). (SAC ¶ 18). SLM identified SallieMae Servicing Corporation as the loan servicer under the Loan Agreement. (SAC ¶ 31). Sometime between 2003 and 2014, NSL informed Plaintiff via writing that Plaintiffs Loan Agreement had been amended or modified to name NSL as SLM's loan servicer under Plaintiffs Loan Agreement. (SAC ¶ 33). SLM and its assignees entered into an agreement with PHEAA regarding the consolidation and servicing of Plaintiffs consolidated student loans (the “Guarantor Agreement”).^[2] (SAC ¶ 39). Plaintiff alleges that he is an intended third-party beneficiary under the terms of the Guarantor Agreement. (SAC ¶ 40). Plaintiff alleges that the terms of the Guarantor Agreement require SLM and its loan servicer to

• deliver notices and correspondence to the borrower's permanent address that the borrower provides to SLM and its loan servicer

• provide the borrower with deferment or forbearance applications upon the borrower's written request to Defendant SLM or its loan servicer

• review the borrower's deferment or forbearance applications, prior to Defendants SLM or its loan servicer declaring a default under the Loan Agreement with the borrower

• report to Defendant PHEAA the results of reviewing a borrower's deferment or forbearance application when declaring a default under the Loan Agreement with the borrower

(SAC ¶¶ 41-44).

         On July 10, 2015, Plaintiff began serving a 3 1/2-year prison sentence at the Arizona Department of Corrections. (SAC ¶¶ 49-50). He alleges that he notified NSL of address changes throughout his time in prison and also requested deferment or forbearance and that NSL did not respond to Plaintiff's then-address.

         After Plaintiff's release from prison, he mailed a letter via United States mail to SLM and NSL updating his permanent address and requesting a student loan payment deferment or forbearance. (SAC ¶¶ 66-67). On November 1, 2017, SLM and NSL mailed a letter to Plaintiff, stating that SLM and NSL could not approve Plaintiff for a student loan payment deferment or forbearance under the Loan Agreement because SLM and NSL declared and entered Plaintiff's default under the Loan Agreement. (SAC ¶ 68). Upon SLM and NSL declaring and entering Plaintiff's default under the Loan Agreement, SLM and NSL subsequently sold or otherwise assigned its rights under the Loan Agreement to Defendant PHEAA, the guarantor of the loan. (SAC ¶¶ 30, 71). Plaintiff alleges that PHEAA made numerous false statements to several credit reporting agencies that Plaintiff defaulted under the Loan Agreement, (SAC ¶ 72), and that PHEAA would not cure SLM and NSL's breaches of the Loan Agreement. (SAC ¶¶ 85, 90).

         In his Second Amended Complaint, Plaintiff brings three causes of action against PHEAA: (1) Violation of the Fair Credit Reporting Act (the “FCRA”), 15 U.S.C. § 1681 et seq. (Count Three); (2) Breach of the Loan Agreement (Count Nine); and (3) Breach of the Guarantor Agreement (Count Ten).

         II. ...