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Servicemembers Civil Relief Act SCRA Presented by:
Danny J Naggiar DJN LAW, P.C.
3340 Peachtree Road NE Suite 1800, Atlanta, Georgia 30326
Biography: Danny J. Naggiar
• Alumni University of California at Santa Barbara
• Alumni Georgetown University Law Center
• Served on AcOve Duty as Judge Advocate in the United States Army JAG Corps achieving the rank of CPT
• Served as Department of the Army Civilian ARorney Chief of Legal Assistance at Fort McPherson
• Sole PracOOoner at DJN LAW PC
History
Servicemembers Civil relief Act (SCRA) used to be Soldiers and Sailors Civil relief Act (SSCRA)
• Roots going back to the Civil War • SSCRA enacted in 1940 based on the 1918 legislaDon • Sweeping reform in 2003 and 2004 giving us the modern version of SCRA
The SCRA strengthens, clarifies, and modernizes the older SSCRA. While there are significant changes, most key concepts, protecDons, and benefits remain.
SERVICEMEMBERS CIVIL RELIEF ACT (“SCRA”) 50 U.S.C. App. §§501-‐597b
Purpose 50 U.S.C. App. §§ 501 et seq.
The purposes of this Act are— • (1)to provide for, strengthen, and expedite the naDonal
defense through protecDon extended by this Act to servicemembers of the United States to enable such persons to devote their enDre energy to the defense needs of the NaDon; and
• (2)to provide for the temporary suspension of judicial and administraDve proceedings and transacDons that may adversely affect the civil rights of servicemembers during their military service.
Boone v. Lightner 319 U.S. 561, 575 (1943)
“Protect those who have been obliged to drop their own affairs to take up the burdens of the nation.”
Le Maistre v. Leffers, 333 U.S. 1, 6 (1948)
“The Act should be read with an eye friendly to those who dropped their affairs to answer their country's call.”
Who the Act Covers
Applicable to: • members of the Armed Forces • commissioned officers of the Public Health Service • commissioned officers of the National Oceanic and
Atmospheric Administration when they are on active duty
Betha v. MarDn, 188 F.Supp. 133 (E.D. Pa. 1960)
“Retired personnel, not on active duty, cannot take advantage of the act and neither can members of the reserves when they are not on active duty”
Guardsman • Act is not applicable to Guardsmen serving full Dme as AcDve Guard Reserve Soldiers and Airmen under Title 32. (perform duty under the state’s command and control), but with federal funding
• It is applicable to Guardsmen acDvated under federal calls to acDve duty
• It is also applicable to Guardsmen, however, when they are in a Title 32 status for periods of more than thirty days in response to a presidenDal declaraDon of naDonal emergency.
Main Theme to Remember
More often then not, one must analyze
whether the whether military service has materially affected the servicemember’s rights
or legal standing.
Use a shield not a sword
ProtecDons Title I -‐ General Provisions, Persons protected, and jurisdicDon Non-‐discriminaDon provision
Title II -‐ General Relief • Default judgments and stays -‐-‐§§521, 522, 524, 525 • Fines & PenalDes in contracts -‐ §523 • Statutes of LimitaDon -‐-‐§526 • Maximum rate of interest -‐ §527
Title III (§§531-‐538) -‐ Major substanDve protecDons against evicDons, terminaDon of installment contracts, foreclosure on mortgages and terminaDon of leases by lessees, protecDon to dependents
Title IV -‐ Life Insurance (§§541-‐549)
Title V -‐ Taxes and Public Lands §571 -‐ Residence for tax purposes
Title VI -‐ AdministraDve Remedies Inappropriate use of act -‐ §581
Title VII -‐ Further Relief AnDcipatory relief -‐ §591 • MalpracDce insurance -‐ §593 • Self-‐funded medical insurance coverage reinstatement -‐ §594 • VoDng residency -‐ §595 • Non-‐availability of non-‐business assets for business or trade obligaDons -‐ §596
Highlights § 512 -‐ JurisdicDon
• (NEW) SCRA applies to all courts & administraDve agencies – federal, state and local -‐ ALL MEANS ALL
• May need to spend Dme educaDng opposing counsel, judges etc.. about SCRA
• SCRA applies to civil cases only
Timing – When does SCRA go into effect for a servicemeber
The term "period of military service" means the period beginning on the date on which a servicemember enters military service and ending on the date on which the servicemember is released from military service or dies while in military service
• The SCRA’s coverage Normally terminates “on the date the servicemember is released from military service or dies while in military service.”
Other secOons of the Act qualify this • “period of military service.” For example, the protecOon calling for the stay of a civil proceeding extends for “90 days acer terminaOon of or release from military service.”
• As to default judgments, “[a]n applicaOon [to set aside a default judgment] . . . must be filed not later than 90 days acer the date of terminaOon of or release from military service.”
§ 521. ProtecOon of Servicemembers against default judgments
Applicability of secOon.
• This secOon applies to any civil acOon or proceeding, including any child custody proceeding, in which the defendant does not make an appearance
Affidavit Requirement PlainDff to file affidavit. In any acDon or proceeding covered by this secDon, the court, before entering judgment for the plainDff, shall require the plainDff to file with the court an affidavit—
(A) staDng whether or not the defendant is in military service and showing necessary facts to support the affidavit; or
(B) if the plainDff is unable to determine whether or not the defendant is in military service, staDng that the plainDff is unable to determine whether or not the defendant is in military service
If defendant is a military member, court cannot enter default judgment unDl alorney is appointed to represent military member
Court SHALL • reopen a default judgment entered while SM on acDve duty or within 60 days thereamer, when SM applies while on acDve duty or within 90 days thereamer, and shows Material affect, plus Meritorious defense
• BONA FIDE purchasers protected
Stay provision of § 521
If defendant is in military, the court SHALL stay proceedings Minimum 90 days on applicaOon of counsel or court’s own moOon. Court must determine that there may be a defense that cannot be presented without presence of defendant; or acer due diligence counsel has been unable to contact defendant or otherwise determine if a meritorious defense exists.
SCRA Stay Request -‐ a Checklist for the IniOal 90-‐Day Stay
Elements of a Valid 90-‐Day Stay Request. Does the request contain... A statement as to how the SM's current military duOes materially affect his ability to appear... and staOng a date when the SM will be available to appear? A statement from the SM=s commanding officer staOng that the SM=s current military duty prevents appearance... and staOng that military leave is not authorized for the SM at the Ome of the statement?
§ 524. Stay or vacaOon of execuOon of judgments, aRachments, and garnishments [Sec. 204]
Court acDon upon material affect determinaDon. If a servicemember, in the opinion of the court, is materially affected by reason of military service in complying with a court judgment or order, the court may on its own moDon and shall on applicaDon by the servicemember— • (1) stay the execuDon of any judgment or order entered against the servicemember; and
• (2)vacate or stay an alachment or garnishment of property, money, or debts in the possession of the servicemember or a third party, whether before or amer judgment.
§ 527. Maximum rate of interest on debts incurred before military service [Sec. 207] Interest rate limitaOon. • (1) LimitaOon to 6 percent. An obligaOon or liability
bearing interest at a rate in excess of 6 percent per year that is incurred by a servicemember, or the servicemember and the servicemember's spouse jointly, before the servicemember enters military service shall not bear interest at a rate in excess of 6 percent –
• (A) during the period of military service and one year thereacer, in the case of an obligaOon or liability consisOng of a mortgage, trust deed, or other security in the nature ofa mortgage; or
• (B) during the period of military service, in the case of any other obligaOon or liability
§ 535. TerminaOon of residenOal or motor vehicle leases 10 [Sec. 305]
TerminaOon by lessee. • (1)In general. The lessee on a lease described in subsecOon
(b) may, at the lessee’s opOon, terminate the lease at any Ome acer –
• (a) the lessee’s entry into military service; or • (b) the date of the lessee’s military orders described as
follows:
• Premises lease: the servicemember, while in military service, executes the lease and thereacer receives military orders for a permanent change of staOon or to deploy with a military unit or as an individual in support of a military operaOon for a period of not less than 90 days.
Motor vehicle leases
• The servicemember, while in military service, executes the lease and thereacer receives military orders –
• for a change of permanent staOon – • from a locaOon in the conOnental United States to a locaOon outside the conOnental United States; or
• to deploy with a military unit or as an individual in support of a military operaOon for a period of not less than 180 days.
Most Frequently Used! • 50 U.S.C. App. §535 is among the most frequently amended secOons in the SCRA. Congress has conOnued to amend the secOon as a result of the conOnuing efforts of landlords and leasing companies to try and defeat purpose of the secOon, which is to allow servicemembers to terminate premises and vehicle leases when they are not in a posiOon to uOlize the premises or vehicles because of their military service. The principal amendments to this secOon have been made by P.L. 108-‐454, effecOve December 10, 2004, and P.L. 111-‐275, effecOve October 13, 2010
§535a. TerminaOon of telephone service contracts 11
TerminaOon by servicemember. TerrminaOon. A servicemember may
terminate a contract at any Ome acer the date the servicemember receives military orders to relocate for a period of not less than 90 days to a locaOon that does not support the contract.
EVICTIONS & DISTRESS §531 • Can ONLY evict upon court order: • no self help • Applies to SM or dependents ResidenOal rent does not exceed $2,400/mo (in 2003) (CPI adjusted to $2,831 in 2008)
• Ability to pay materially affected by service • Court SHALL stay for minimum 90 days, or Adjust the lease obligaOons
• Criminal sancOons for violaOon • Dependents have right to invoke
2010 Improvements §597. Enforcement by the ARorney General 15 [SecOon 801]
• (A) Civil acOon. The ARorney General may commence a civil acOon in any appropriate district court of the United States against any person who –
(1) engages in a paRern or pracOce of violaOng this Act [50 U.S.C. App. §§501 et seq.]; of (2) engages in a violaOon of this Act that raises an issue of significant public importance.
• (B) Relief. In a civil acOon commenced under subsecOon (a), the court may (1) grant any appropriate equitable or declaratory relief with respect to the violaOon of this Act; 15This secOon was added by P.L. 111-‐275, effecOve October 13, 2010. 44 (2) award all other appropriate relief, including monetary damages, to any person aggrieved by the violaOon; and (3) may, to vindicate the public interest, assess a civil penalty – (a) in an amount not exceeding $55,000 for a first violaOon; and (b) in an amount not exceeding $110,000 for any subsequent violaOon.
Sec. 597a. Private right of acOon 16 [SecOon 802]
• (A) In general. Any person aggrieved by a violaOon of this Act [50 U.S.C. App. §§501 et seq.] may in a civil acOon –
(1) obtain any appropriate equitable or declaratory with respect to the violaOon; and (2) recover all other appropriate relief, including monetary damages.
• (B) Costs and aRorney’s fees. The court may award to a person aggrieved by a violaOon of this Act who prevails in an acOon brought under subsecOon (a) the costs of the acOon, including a reasonable aRorney fee.
Recent SCRA AcOvity
• SB -‐61 self-‐storage units & service members • Asked to comment on proposed legislaOon • Prevent Commercial Storage Facility from foreclosing on unit without a court order
• BoRom Line: Beyond State Authority to deny SM SCRA protecOons
• Rep. Holcolmb inserted the following amendment:
Recent SCRA acOvity – cont-‐
• "If the rental agreement is with a service member, the Owner shall comply with all terms of the Servicemembers Civil Relief Act, 50 U.S.C. SecOon 501 et seq."
• The Amendment was passed!
Highlights of SCRA
• ProtecOon of rights, not avoidance of responsibility
• “Material affect”-‐-‐ prerequisite for most SCRA protecOons
• Shield not sword • Private causes of acOon recognized • Great consumer protecOons • Liberal construcOon should sOll be the rule