Affirming partial victory for a litigant who defended her own student loan collection case, a state appeals court has ruled that the New Jersey Higher Education Student Assistance Authority is entitled to recover principal and fees, but not interest, because it failed to provide documentation of the borrowing rate originally agreed upon.
The Appellate Division on Tuesday affirmed a trial judgment of $7,576, less than the authority claimed it was owed in the case—in which it relied on print-outs generated right before trial as documentary evidence of the loans’ interest rate.
“We are not persuaded that the loan print outs … filled the void in plaintiff’s proofs; they were prepared just prior to trial and there is no evidence the purported interest rates were ever communicated” to the borrower, Appellate Division Judge Mitchel Ostrer wrote in New Jersey Higher Education Student Assistance Authority v. Siaw, affirming an April 2017 judgment by Middlesex County Superior Court Judge Arthur Bergman.
According to the decision, defendant Abigail Siaw obtained a $16,700 loan in 2007, and a $7,609 loan in 2008, through the NJCLASS program, with a separate co-signor for each loan. Siaw was a Rutgers University student at the time, and graduated in January 2010. The authority is a state agency.
She was first deemed in default in September 2010, but later entered a payment plan. The authority in March 2016 filed an action in the Law Division against Siaw and her co-signors seeking a lump sum payment of $28,318, according to the court: $15,667 on the first loan, $7,397 on the second, and $5,253 for collection costs, in the form of an attorney fee.
The authority admitted as documentation two promissory notes, and the terms and conditions of the NJCLASS program loans, neither of which provided the interest rate. The documents noted that the interest rate was set out in a disclosure statement, but the authority didn’t provide those documents to the court, or provide evidence that it had ever given those documents to Siaw, according to the decision.
In lieu of any disclosure statement, the authority provided print-outs from a “direct loan system” that had been generated shortly before the April 2017 trial before Bergman. The print-outs referred to interest rates ranging from 6.55 percent to 8.67 percent.
As of the time of trial, Siaw had paid back a total of $17,943 on the two loans, the court noted.
Siaw represented herself at trial. She didn’t contest the documents or give testimony, but offered an opening statement in which she asked that she be allowed to continue with monthly payments and said her family was not able to pay back the full debt all at once, according to the decision.
Bergman found that the authority was entitled to loan principal and collection costs, but said the authority failed to meet its burden to prove the interest rates. He applied Siaw’s payments as of that date to the principal, and awarded the authority $4,344 on the first loan, $2,022 on the second, and 19 percent of the total as collection costs. He also awarded post-judgment interest.
The authority appealed, contending that the print-outs sufficed as proof of the agreed-upon interest rate, and so Bergman’s judgment was against the weight of the evidence.
Ostrer was “unpersuaded,” and affirmed Bergman’s ruling. Appellate Division Judge Francis Vernoia joined in Tuesday’s decision, which was unpublished.
The plaintiff “had the burden, as in any contract action, to prove that the authority and defendants ‘entered into a contract containing certain terms,’” Ostrer wrote, quoting from case law.
The court said the print-outs were not good enough because Evidence Rule 1002, the best evidence rule, “requires an original writing to prove its contents, when the writing’s contents are material to the dispute, and production is not otherwise excused.” The court noted that there was no showing that the disclosure statements—the original documents setting forth the interest rates—were unavailable.
The print-outs, even if admissible, “fell short” of proving the interest rate, because they weren’t concurrent with the loan agreements, Ostrer wrote, noting that the print-outs referenced an August 2009 date, but the authority “failed to present any evidence explaining its meaning” and “presented no evidence establishing that disclosure of the interest rates occurred at any time or that Abigail agreed to any particular rates of interest.”
Ostrer noted that, if the two sides failed to agree on an interest rate in the first place, the authority could have, but didn’t, pursue recovery via a quantum meruit claim.
Russell Goldman of the Goldman Law Firm in West Long Branch, counsel to the authority, didn’t respond to a call and email seeking comment.
Siaw didn’t participate in the appeal, the court said. No counsel was listed for Siaw on the opinion or in the case information posted in the judiciary’s online database. She couldn’t be reached directly at a number listed in the case information.