United States Bankruptcy Appellate Panel of the Eighth Circuit
In re: Amy N. Piccinino Debtor
U.S. Department of Education Defendant-Appellee Amy N. Piccinino Plaintiff- Appellant Aspire Resources, Inc. Defendant - Appellee
Submitted: November 7, 2017
from United States Bankruptcy Court for the Eastern District
SALADINO, Chief Judge, SHODEEN and DOW, Bankruptcy Judges.
SHODEEN, BANKRUPTCY JUDGE
Amy Piccinino, appeals from the Bankruptcy
Court's determination that she failed to meet her
burden of proof to establish an undue hardship pursuant to 11
U.S.C. §523(a)(8) to discharge her student loans owing
to the United States Department of Education and Aspire
Resources, Inc. For the reasons that follow, we affirm.
Piccinino obtained a bachelor's degree in anthropology.
Following graduation she participated in a volunteer
internship position in her field of study. From 2011 until
May 2013 Piccinino did not work. Since that time she has only
worked in part-time positions. To finance her education
Piccinino borrowed funds from Department of Education
("DOE"), Aspire Resources, Inc.
("Aspire") and The Scholarship Foundation. No
payments have been made on any of these student loans and at
the time of trial these lenders were owed more than $79, 000.
detailed ruling the Bankruptcy Court concluded that the DOE
and Aspire loans were not eligible for discharge based upon
undue hardship.Piccinino appeals this decision raising two
primary arguments. First, that the Bankruptcy Court engaged
in speculation related to her employment history, search for
employment, future employment and her housing expense.
Second, that the Bankruptcy Court committed error by
misinterpreting, discounting or ignoring the evidence of
Piccinino's unique and unusual circumstances in reaching
its conclusion that she does not qualify for discharge of her
determination of undue hardship is a legal conclusion subject
to de novo review. Long v. Educ. Credit Mgmt. Corp.
(In re Long), 322 F.3d 549, 553 (8th Cir. 2003).
Subsidiary findings of fact underlying any legal conclusions
are reviewed for clear error. Educ. Credit Mgmt. Corp. v.
Jesperson, 571 F.3d 775, 779 (8th Cir. 2009). This
standard requires a reviewing court to conclude that the
trial court made a definite mistake based upon the record as
a whole. United States v. United States Gypsum Co.,
333 U.S. 364, 395 (1948). The trial court's findings of
fact are given deference and when more than one
interpretation of evidence is possible there is no clear
error. Anderson v. Bessemer City, 470 U.S. 564, 574
loans can only be discharged in bankruptcy when repayment
would constitute an "undue hardship on the debtor [or]
the debtor's dependents . . ." 11 U.S.C. §
523(a)(8). It is the plaintiff's burden to prove an undue
hardship by a preponderance of the evidence. Grogan v.
Garner, 498 U.S. 279, 289-91 (1991). The term
"undue hardship" is not defined by the Bankruptcy
Code leaving the courts to develop standards to evaluate
whether such a condition exists. A majority of courts follow
the test adopted by the Second Circuit in Brunner v. New
York State Higher Education Services Corp. 831 F.2d 395,
396 (2d Cir. 1987). The Eighth Circuit expressly rejected the
Brunner analysis in favor of a more flexible
totality of the circumstances test to assess whether
repayment of student loans would constitute an undue
hardship. In re Long, 322 F.3d at 553-54;
Shadwick v. U.S. Dep't of Educ., 341 B.R. 6, 11
(Bankr. W.D. Mo. 2006). This test establishes three areas of
inquiry: "(1) the debtor's past, present, and
reasonably reliable future financial resources; (2) a
calculation of the debtor's and [any] dependent's
reasonable necessary living expenses; and (3) any other
relevant facts and circumstances surrounding each particular
bankruptcy case." In re Long, 322 F.3d at 554.
Past, Present and Future Financial Resources
is a thirty-year-old single mother to a six-year-old daughter
for whom she receives no child support. Her annual income
from 2013 through 2015 ranged from $4, 250 to $9, 674 from
part-time employment. Piccinino's current monthly income
is derived from her employment at $850 per month as a
substitute teacher during the school year and $800 per month
in July and August when she provides childcare. Monthly SNAP
benefits in the amount of $319 supplement her monthly income.
She and her daughter are also qualified for Medicaid
assistance. In 2016 Piccinino received a federal income tax
refund in the amount of $4, 364. The Bankruptcy Court found that
the combination of all of these sources indicate that
Piccinino's annual income is $17, 442, which amounts to
$1, 453.50 a month. Piccinino raises only one issue with this
income finding. She argues that it is incorrect to include a
portion of her tax refund as part of ...