John WASHKOVIAK, et al., Appellants, v. STUDENT LOAN MARKETING ASSOCIATION, Appellee.
No. 05-CV-63
District of Columbia Court of Appeals
Argued Jan. 11, 2006. Decided June 8, 2006.
900 A.2d 168
We followed the Thomas decision in Dozier v. Dep‘t of Employment Servs., 498 A.2d 577 (D.C.1985), where the bottom of a notice contained “the typewritten notation ‘Dated and mailed 4/20/84.‘” Id. at 578. Mr. Dozier denied receiving the notice, and we held that the notation was inadequate to prove that the notice had actually been mailed.
In this case we similarly have a typewritten date inserted at the end of two pre-printed lines designed to be part of a certificate of service. However, no signature has been affixed, so there is no certification of mailing. “Further, the record is devoid of any explanation of the internal agency mailing process.” Thomas, 490 A.2d at 1164. Under these circumstances, OAH‘s conclusion that the determination was “served on January 14, 2004” is “[u]nsupported by substantial evidence in the record of the proceedings before the Court.”
Accordingly, we reverse and remand for further proceedings. In doing so, we do not preclude further consideration of the issue of jurisdiction. It is possible that the Department of Employment Services will be able to establish at an evidentiary hearing that the determination letter was mailed on or about the date indicated. However, the existing record is insufficient to establish that the decision was mailed to petitioner bеfore March 10, 2005.
Reversed and remanded.
Steven S. Rosenthal, with whom Jeffrey A. Tomasevich, and Maria Whitehorn Votsch and Robert S. Lavet, Senior Vice President and General Counsel, and Eric D. Reicin, Vice President and Associate General Counsel for Sallie Mae, Inc., were on the brief for appellee.
Before WASHINGTON, Chief Judge, RUIZ, Associate Judge, and FERREN, Senior Judge.
FERREN, Senior Judge:
Appellants John Washkoviak and Amy Dziondziakowski appeal an order of the trial court dismissing their amended complaint.1 They allege that appellee, the Student Loan Marketing Association (“Sallie Mae“), violated provisions of the
I.
A. The Parties
Appellants were the named plaintiffs in what they characterized as a nationwide class action suit against Sallie Mae. Congress established Sallie Mae as “a private corporation which will be financed by private capital and which will serve as a secondary market and warehousing facility for student loans ... and which will provide liquidity for student loan investments.”
In 1996, Congress enacted the Student Loan Marketing Reorganization Act of
On the reorganization effective date, employees of [Sallie Mae] shall become employees of the Holding Company (or any subsidiary of the Holding Company), and the Holding Company (or any subsidiary of the Holding Company) shall provide all necessary and appropriate management and operational support (including loan servicing) to [Sallie Mae], as requested by [Sallie Mae]. [Sallie Mae], however, may obtain such management and оperational support from persons or entities not associated with the Holding Company.
Accordingly, the statute contemplated an effective date of “reorganization” and a subsequent date for Sallie Mae‘s “dissolution.” But the statute did not specify either date. In fact, the statute required shareholder approval before the reorganization could commence.
B. The 2001 Complaint
On December 21, 2001, appellants filed their original complaint against Sallie Mae. Although they characterized it as a class action complaint, they concede that they never moved for certification as required by
Both Washkoviak and Dziondziakowski signed promissоry notes payable to Sallie Mae. Each listed a Wisconsin address on the note. Washkoviak‘s promissory note indicated that all payments were to be sent to an address in Merrifield, Virginia, while Dziondziakowski‘s note instructed her to send her payments to an office in Wilkes-Barre, Pennsylvania. Although both promissory notes contained the following language—“this application/promissory note will be governed by Federal Law applicable to consolidation loans“—neither included a choice of law provision.
The allegations in the complaint concerned the manner in which Sallie Mae collects and discloses late fees. Appellants’ promissory notes authorize Sallie Mae to collect a six percent fee for each late payment. According to the complaint, Sallie Mae engages in the practice of “pyramiding,” by which it applies pаyments first to all outstanding late fees, and then, only after all late fees have been paid, to the required monthly payment of principal and interest. As a result, if a borrower‘s payment proves sufficient to cover the borrower‘s required monthly payment, but insufficient to cover that payment combined with any late fees owed, an outstanding balance, equal to the amount of the unpaid late fees, remains on the required monthly payment. Accordingly, the borrower is subsequently charged additional late fees for failing to pay the entire required monthly payment (including late fees) on the scheduled date. The complaint also said that Sallie Mae misrepresents the manner in which it collects late fees and misleads borrowers about the amount of late fees they owe.
Appellants then claimed that Sallie Mae‘s actions violated
In the complaint, appellants claimed that the practices in question were “instituted” in July 1998 by Sallie Mae Servicing Corporation, identified as a Delaware Corporation which acted as Sallie Mae‘s agent and “follow[ed] uniform, standardized loan servicing policies, procedures and business practices established and authorized by [Sallie Mae],” whose business was “transacted ... in the District of Columbia.”
Sallie Mae filed a motion to dismiss pursuant to
Even if the Court were not holding that these counts were preempted, it would have grave reservations about the viability of applying the District of Columbia‘s consumer protection law to these transactions, given that Plaintiffs all reside in Wisconsin, attended school there, applied for loans there, executed the promissory notes there, and made payments from there to non-District locations. Plaintiffs would have significant conflicts-of-law hurdles ... and constitutional ones.
On May 6, 2004, we affirmed the trial court‘s decision. Washkoviak v. Sallie Mae (Washkoviak I), 849 A.2d 37 (D.C. 2004). We noted, however, that appellants had failed to rely upon
C. The 2004 Amended Complaint
On September 15, 2004, appellants filed their amended complaint. Although they titled it, “First Amended Class Action Complaint,” they once again failed to move for class-action certification pursuant to
Appellants’ amended complaint omitted the assertion, made in the original complaint, that the challenged policies were instituted in 1998. Unlike the original complaint, moreover, the amended complaint failed to identify the schools that appellants attended and through which appellants obtained their loans. Furthermore, the amended complaint no longer contended merely that Sallie Mae Servicing Corp. had “instituted” the policies in question. This time appellants alleged that Sallie Mae had “instituted and mandated the policies and procedures yielding the violations in the District of Columbia,” and that “all such policies and procedures emanate from the District of Columbia.” Appellants did, however, reassert that Sallie Mae Servicing Corp. “follow[ed] uniform, standardized loan servicing policies, procedures and business practices established and authorized by [Sallie Mae].” And they added that Sallie Mae Servicing Corp. had originally been established by Sallie Mae “as a division,” and that Sallie Mae and Sallie Mae Servicing Corp. were currently “under the same corporate ownership.”9
Again, Sallie Mae filed a motion to dismiss pursuant to
Sallie Mae‘s motion to dismiss referenced the factual assertions appellants had included in their original complaint but omitted from their amended complaint. To demonstrate that appellants lived, attended school, and obtained their loans in Wisconsin, and that appellants’ loans were serviced outside of Washington, D.C., Sallie Mae attached appellants’ promissory notes to its motion to dismiss. Later, as an attachment to its reply to appellants’ opposition to the motion, Sallie Mae supplied an affidavit from Sallie Mae, Inc.‘s Vice President of Policy in which she stated that, to the best of her knowledge, the decision to implement the policy at issue was not made in the District of Columbia, and that neither Sallie Mae, Sallie Mae Serviсing Corporation, nor Sallie Mae, Inc., ever had processed loans or payments in the District of Columbia, received loan applications or payments in the District of Columbia, or mailed statements from the District of Columbia.10 Appel-
On December 27, 2004, the trial court granted Sallie Mae‘s motion to dismiss. In response to appellants’ arguments that Sallie Mae had relied improperly upon factual assertions extrinsic to the pleading, the trial court referred to a comment in its order dismissing appellants’ original complaint. There, the court had reasoned that the promissory notes may “be considered without altering the procedural posture of the Motion” because “they arе documents that are indisputably authentic; are in [appellants‘] possession, and are part of the contracts specifically referenced in the complaint.” The trial court also concluded that it could consider any facts alleged in the first complaint but omitted from the amended complaint. The trial court did not expressly address the propriety of Sallie Mae‘s inclusion of the affidavit.
The trial court analyzed the choice of law issues by applying the modified governmental interest analysis we articulated in District of Columbia v. Coleman, 667 A.2d 811, 816 (D.C. 1995). The trial court examined consumer protection statutes from Wisconsin and the District of Columbia and determined that both jurisdictions “have essentially equal interests in protection of consumers.”11 The trial court also considered “the place where the injury occurred,” “the place where the conduct causing the injury occurred,” “the domicile, residence, nationality, place of incorporation and place of business of the parties,” and “the place where the relationship is centered.”
The trial court first found that “the alleged injury occurred in Wisconsin, where Plaintiffs lived and were forced to make higher payments.” The court then noted that “[t]he conduct causing the injury arguably occurred in Virginia and Pennsylvania, where the loans were processed”12 but acknowledged that “it could also be said to have occurred in the District, where Defendant‘s policy was formulated.” Next, the trial court observed that “[t]he domicile and residence of Plaintiffs is Wisconsin” and that “[b]y statute, defendant‘s principal office is required to be in the
[A]ll of the activity related to [appellants‘] loans occurred in Defendant‘s offices outside the District. In fact [appellants] alleged in their original Complaint that the improper policy of imposing late fees was adopted in 1998, but, under the Student Loan Marketing Association Reorganization Act of 1996, [Sallie Mae] ceased to have any employees before 1998, and all of its functions were transferred to other affiliates, which are not alleged to be located in the District.
Finally, the trial court stated that “the relationship is centered in Wisconsin, where all of the critical activity occurred.” Summarizing the situation, the trial court said that “the only significant point raised by [appellants] in favor of their position is that the federal statute deems [Sallie Mae] a resident of the District for venue and jurisdiction purposes.” In the trial court‘s opinion, “[t]hat is not enough when weighed against the other factors counseling against the application of District law.” Concluding that “the factors militate in favor of not applying the District‘s laws,” the trial court dismissed the statutory counts with prejudice and the common law fraud counts without prejudice, granting appellants permission to “file another amended complaint for fraud and misrepresentation under Wisconsin common law and consumer protection law.” Appellants declined to file another amended complaint, choosing instead to bring this appeal.13
II.
A. The Trial Court Improperly Relied Upon Facts Extrinsic to the Complaint
Appellants argue that “the trial court relied on purported facts extrinsic to the complaint [in concluding] that the loan servicing operations in question have been relocated outside the District of Columbia,” and “impermissibly resolved disputed facts in favor of defendant.” We agree.
We review a “dismissal for failure to state a claim de novo.” Oparaugo v. Watts, 884 A.2d 63, 75 (D.C. 2005) (citing Fingerhut v. Children‘s Nat‘l Med. Ctr., 738 A.2d 799, 803 (D.C. 1999)). “[L]ike the trial court, we must construe the complaint in the light most favorable to the plaintiff, while taking the facts alleged in the complaint as true.” Casco Marina Dev., L.L.C. v. D.C. Redevelopment Land Agency, 834 A.2d 77, 81 (D.C. 2003) (citing Cauman v. George Washington Univ., 630 A.2d 1104, 1105 (D.C. 1993)). “Any uncertainties or ambiguities involving the sufficiency of the complaint must be resolved in favor of the pleader, and generally, the complaint must not be dismissed because the court doubts that plaintiff will prevail.” Atkins v. Industrial Telecommunications Ass‘n, Inc., 660 A.2d 885, 887 (D.C. 1995) (citing McBryde v. Amoco Oil Co., 404 A.2d 200, 203 (D.C. 1979)).
“[A] defendant raising a
The trial court‘s consideration of appellants’ promissory notes, which Sallie Mae attached to its motion to dismiss, was insufficient to convert Sallie Mae‘s
When the trial court found that “all of the activity related to [appellants‘] loans occurred in Defendant‘s offices outside the District” and that appellants loans were processed in Virginia and Pennsylvania, it was, arguably, merely acknowledging that the return addresses on the promissory notes were in Virginia and Pennsylvania. But the court‘s words imply reliance on a more comprehensive set of facts. It does not appear that the trial court could conclude that Sallie Mae conducted no activity related to appellants’ loans in the District without considering the facts alleged in the affidavit of Sallie Mae, Inc.‘s vice-president.
The trial court depended, in part, upon the Student Loan Marketing Association Reorganization Act of 1996,
Earlier, we quoted the statute authorizing Sallie Mae‘s reorganization,
In any event, judicial notice of a reorganization and dissolution—especially one that retains Sallie Mae as a subsidiary of a holding company until dissolution is complete—does not necessarily demonstrate that Sallie Mae, or any other company that provided support for the relevant functions, no longer engaged in any operations nor had any employees in the District of Columbia in 1998. Such a conclusion necessarily would require reference to facts extrinsic to the complaint. Indeed, the statute itself makes clear that the corporate structure was in flux for quite awhile. According to
When the court relied on facts asserted by affidavit, it effectively converted Sallie Mae‘s motion to dismiss into a motion for summary judgment, even though it continued to style its ruling as a dismissal under
B. The Trial Court Erred when it Concluded, Based Solely on the Pleadings, that Wisconsin Law Apрlied to Appellants’ Amended Complaint
Although we have concluded that the trial court erred in considering factual allegations extrinsic to the complaint, we are “free to affirm the dismissal, with respect to any count, if, viewing only the complaint, we were to conclude that the count being examined failed to state a claim upon which relief could be granted.” Id. at 80 n. 6. (citing Sheetz v. District of Columbia, 629 A.2d 515, 519 n. 5 (D.C. 1993)). See also Foretich v. CBS, Inc., 619 A.2d 48, 55 (D.C. 1993) (“The court has applied a harmless error rule where the trial court‘s decision to dismiss under Rule 12 can be justified without reference to the material outside of the pleadings.“) (citation omitted). “However, for this court to affirm such a dismissal, it must be self-evident from the face of the complaint, resolving all doubts in favor of the plaintiff, that the plaintiff is not entitled to any relief.” Kitt, 672 A.2d at 80 n. 6 (quoting Tele-Communications of Key West v. United States, 244 U.S. App. D.C. 335, 340, 757 F.2d 1330, 1335 (1985)). Applying this standard, we cannot say that it is self-evident from the face of the complaint that Wisconsin law applies to appellants’ amended cоmplaint.
“Choice of law issues are normally treated as questions of law subject to de novo review by this court, meaning, we make an independent determination of which state law to apply.” Atkins, 660 A.2d at 888 (internal citation omitted). We employ “a modified ‘governmental interests analysis’ which seeks to identify the jurisdiction with the ‘most significant relationship’ to the dispute.” Moore v. Ronald Hsu Constr. Co., 576 A.2d 734, 737 (D.C. 1990) (quoting Hercules & Co. v. Shama Rest., 566 A.2d 31, 40-41 (D.C. 1989)). Under this analysis,
we evaluate the governmental policies underlying the applicable laws and determine which jurisdiction‘s policy would be more advanced by the application of its law to the facts of the case under review.... As part of this analysis, we also consider the four factors enumerated in the Restatement (Second) of Conflict of Laws § 145:
a) the place where the injury occurred;
b) the place where the conduct causing the injury occurred;
c) the domicile, residence, nationality, place of incorporation and place of business of the parties; and
d) the place where the relationship is centered.
Coleman, 667 A.2d at 816 (citation omitted).
We cannot say that the policies of either jurisdiction would be more advanced than the policies of the other by the application of its law to appellants’ complaint. Wisconsin has a powerful interest in protecting its residents from fraud and misrepresentation,16 while the District of Co-
With regard to the third Restatement factor, Sallie Mae was incorporated in the District of Columbia and was a District of Columbia resident, while appellants are residents of Wisconsin. Finally, as to the fourth factor, the relationship between appellants and Sallie Mae is centered in Wisconsin. See Ivanhoe Fin., Inc. v. Highland Banc Corp., No. 03-C-7336, 2004 WL 546934, at *4, 2004 U.S. Dist. LEXIS 2966, at 12-13 (N.D. Ill. Feb. 26, 2004) (finding that, where borrowers and lenders resided in different jurisdictions, “the parties’ relationship is centered ... where the loan applications were prepared and the borrowers and the property securing the loans are located“). Therefore, two of the Restatement factors favor Wisconsin, one factor favors the District of Columbia, and one factor is split evenly between the two.
“[I]t must be remembered,” however, “that a mere counting of contacts is not what is involved. The weight of a particular state‘s contacts must be measured on a qualitative rather than quantitative scale.” LeJeune v. Bliss-Salem, Inc., 85 F.3d 1069, 1072 (3d Cir. 1996) (citing Cipolla v. Shaposka, 439 Pa. 563, 267 A.2d 854, 856 (1970)); accord Danner v. Staggs, 680 F.2d 427, 431 (5th Cir. 1982); Lange v. Penn Mut. Life Ins. Co., 843 F.2d 1175, 1180 (9th Cir. 1988); St. Paul Fire & Marine Ins. Co. v. Birch, Stewart, Kolasch & Birch, LLP, 233 F. Supp. 2d 171, 178 (D. Mass. 2002). See also RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 145(2) (1971) (“[C]ontacts are to be evaluated according to their relative importance with respect to the particular issue.“). According to the Restatement, moreover, “the place of injury is less significant in the
Given the discounted value of the place of injury in cases, such as this one, involving claims of misrepresentation, we cannot say that a qualitative weighing of the factors clearly favors Wisconsin. Indeed, given the lack of evidence available in the record defining the connections between appellants’ claims and either jurisdiction, it is difficult to make any kind of qualitative judgment at all. However, because we must make our choice of law determination in the context of a
Alternatively, because we cannot determine from the pleadings which jurisdiction has a greater interest in the controversy, in ruling on a motion to dismiss we must apply the law of the forum state, which in this case is the District of Columbia. See Logan v. Providence Hosp. Inc., 778 A.2d 275, 278 (D.C. 2001) (“[W]hen both jurisdictions have an interest in applying their own laws to the facts of the case, the forum law will be applied unless the foreign jurisdiction has a greater interest in the controversy.“) (internal punctuation and citations omitted). Under either approach, therefore, the tie would appear to go to appellants for purposes of ruling on Sallie Mae‘s motion.18
So ordered.
RUIZ, Associate Judge, concurring:
I fully join Judge Ferren‘s opinion for the court holding that, because of the presumptions operative at this early juncture in the litigation, an analysis of the underlying claims’ ties to the District of Columbia favor application of the law of the forum. Our analysis at this point has not required an in-depth review of the corresponding provisions of relevant D.C. and Wisconsin law for the protection of consumer debtors, because we have proceeded from the trial court‘s determination—not challenged by the parties—that both states have “essentially equal interests in protection of consumers.” See ante at 176. Therefore we have not had occasion to consider whether, if Wisconsin‘s interest in consumer protection would be furthеred by application of D.C. law in this instance, this case presents a “false conflict” of laws. See Kaiser-Georgetown Community Health Plan, Inc. v. Stutsman, 491 A.2d 502, 509-11 (D.C. 1985).
Notes
Sallie Mae asserts in its brief that it “was dissolved as of December 2004,” and that “SLM Corporation, the Delaware Corporation created pursuant to the Student Loan Marketing Association Reorganization Act of 1996, succeeded to all of its liabilities. Prior to its dissolution, the Student Loan Marketing Association‘s loan portfolio was serviced by Sallie Mae Servicing L.P., another wholly owned subsidiary of SLM Corporation.” These subsequent developments, however, are not part of the record before us. Nor are they described in
Within 90 days after the filing of a complaint in a case sought to be maintained as a class action, the plaintiff shall move for a certification under Rule 23(c)(1) that the case be maintained as a class action. Such motion shall be supported by a statement of facts which demonstrates that the action meets the requirements for a class action prescribed in Rule 23(a) and (b). With the motion, the plaintiff may file affidavits or other evidence of any or all of the facts stated and may submit that all or certain specified facts are not in genuine dispute.
(a) To simplify, clarify and modernize the law governing consumer transactions;
(b) To protect customers against unfair, deceptive, false, misleading and unconscionable practices by merchants;
(c) To permit and encourage the development of fair and economically sound consumer practices in consumer transactions; and
(d) To coordinate the regulation of consumer credit transactions with the policies of the federal consumer credit protection act.
(1) assure that a just mechanism exists to remedy all improper trade practices and deter the continuing use of such practices;
(2) promote, through effective enforcement, fair business practices throughout the community; and
(3) educate consumers to demand high standards and seek proper redress of grievances.
(a) the place where the plaintiff relied on the defendant‘s misrepresentations;
(b) the place where the plaintiff received the misrepresentations;
(c) the place where the defendant made the misrepresentations;
(d) the domicile and place of incorporation and place of business of the parties;
(e) the place where the tangible thing which is the subject of the transaction between the parties was situated at the time; and
(f) the place where the plaintiff is to render performance under the contract which he has allegedly been induced to enter by fraud.
Id. (quoting RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 148).
Here, the first two factors favor Wisconsin, the third favors the District of Columbia, the fourth would favor neither jurisdiction over the other, and the final two would be of questionable applicability, since no “tangible thing” serves as a subject of the transaction between appellants and Sallie Mae, and appellants do not allege fraud in the inducement of the contract. Although, according to the Restatement, no proscribed rules govern the weighing of these factors, the Restatement offers the following guidance:
If any two of the above-mentioned contacts, apart from the defendant‘s domicil, state of incorporation or place of business, are located wholly in a single state, this will usually be the state of the applicable law with respect to most issues. So when the plaintiff acted in reliance upon the defendant‘s representations in a single state, this state will usually be the state of the applicable law, with respect to most issues, if (a) the defendant‘s representations were received by the plaintiff in this state, or (b) this state is the state of the plaintiff‘s domicil or principal place of business, or ... (d) this state is the place where the plaintiff was to render at least the great bulk of his performance under his contract with the defendant.
§ 148 cmt j. If we were to apply the above formulation mathematically, the factors would weigh heavily in favor of applying Wisconsin law. However, in Hercules, we employed § 148 only as a “useful framework.” We did not adopt it as a test to be mechanically applied. See Emery Corp. v. Century Bancorp., Inc., 588 F. Supp. 15, 18 (D. Mass. 1984) (rejecting a “mechanical application of Restatement standards“). As stated previously, a jurisdiction‘s contacts are to be measured qualitatively rather than quantitatively. LeJeune, 85 F.3d at 1072. Even under the § 148 framework, therefore, we perceive that the result here is, at best, ambiguous, especially given the irrelevancy of two of the factors.