The Servicemembers Civil Relief Act(SCRA)

Legal Issues and Military Service

PRESENTED BY:

Captain Daniel PapajcikTrial Counsel / Administrative Law Attorney U.S. Military Entrance Processing Command

Margaret Thomas (Captain, USA-IRR)Office of Illinois Attorney General Lisa Madigan

Asst. Bureau Chief, Veterans Rights Bureau

John F. Costello, Jr.Veterans Legal Support Center & Clinic, The John Marshall Law School

Veterans’ Rights Project, Legal Assistance Foundation

June 18, 2008SPONSORED BY:

Chicago Volunteer Legal Services (CVLS)

Objectives of Presentation

• Overview of Statutory Benefits and Protections available to Servicemembers (SMs) and their families under the Servicemembers Civil Relief Act (SCRA) and Illinois law; and

• Recruit you to help…

Outline of Presentation

• OVERVIEW of SCRA benefits and protections

• FOCUS on 50 U.S.C. App. §§ 521 and 522 (stay of proceedings)

• FORMS to be used in support of application for stay

• HOW TO CONTACT servicemember (SM)• WAR STORIES - discussion of specific

situations• DISCUSSION of Circuit Court of Cook

County and CVLS initiative

SCRA Overview

• SCRA provides various legal and financial protections to qualified “servicemember(s),” as defined in 50 U.S.C. App. § 511

• Liberal Construction““Protect those who have been obliged to drop their own affairs to take up Protect those who have been obliged to drop their own affairs to take up

the burdens of the nation.”the burdens of the nation.” Boone v. LightnerBoone v. Lightner, 319 U.S. 561, 575 (1943), 319 U.S. 561, 575 (1943)

• Used as Shield and Not as Sword “Although the Act should be read liberally and afford generous protection

to the Service member, the protection does have its limits.” Le Maistre v. LeffersLe Maistre v. Leffers, 333 U.S. 1, 6 (1948), 333 U.S. 1, 6 (1948)

Codified at 50 U.S.C. App. §§ 501-596• Title I - General Provisions (§§511-519)

– Persons protected– Non-discrimination provision - §518

• Title II - General Relief (§§521-527)– Default judgments and stays - §§521, 522, 524, 525– Statutes of Limitation - §526– Maximum rate of interest - §527

• Title III (§§531-538)– Major substantive protections against evictions, termination of

installment contracts, foreclosure on mortgages and termination of leases by lessees, protection to dependants

• Title IV - Life Insurance (§§541-549)• Title V - Taxes and Public Lands (§§561-571)• Title VI - Administrative Remedies (§§581-583)• Title VII - Further Relief (§§591-596)

SCRA Overview

SCRA Overview

• WHAT:– Suspend Statutes of Limitation– Cap Interest Rates at 6%– Permit Lease Terminations– Protections from Eviction and Mortgage

Foreclosure– Stay of Proceedings– Protections from Default Judgments

SCRA Overview• WHO:

– Active Duty Military - YES• Army, Navy, Air Force, Marines, Coast Guard

– Reserves – MAYBE• if on “active duty” under Title 10 orders

– National Guard –MAYBE• if on “active duty” under Title 10 orders• if under Title 32 Federal orders (ex. Hurricane Katrina response)

– Dependents – MAYBE (limited circumstances)• SM’s spouse or child• Person that SM provided more than 1/2 support for 180 days

preceding application for relief under SCRA– Third Parties – POSSIBLY (limited circumstances)

• If court grants relief (stay, postponement, suspension of obligation) to SM, the relief may also be granted to persons primarily or secondarily liable with the SM, (50 U.S.C. App. §513)

SCRA Overview

• WHEN:– Protections Begin …

• Entry on “active duty”• Receipt of active duty orders for reserve

components– Allows time to get “house in order” (§516)

– Protections End …• Release date from “active duty”

– Exceptions:» Stays: May file application within 90 days after

release» Default Judgments: May file application to set aside

default judgment no later than 90 after release

SCRA Overview

• WHY: – To enable servicemembers to devote

themselves to their missions • Battlemind concept

– Eliminate / mitigate civil legal and financial issues can hinder Military Preparedness, Moral, Retention / Recruiting

– Illinois Army National Guard is deploying 33d Infantry Brigade Combat Team (@2,700 soldiers) to Afghanistan in support of OEF

• Deploying over summer and fall • Largest deployment in Illinois since WWII

SCRA Benefits and Protections

Tolling Statutes of Limitation

• Period of military service “may not be included in computing any period limited by law, regulation, or order for the bringing of any action or proceeding … by or against servicemember or the servicemember’s heirs, executors, administrators, or assigns.”

Six Percent Rule• A SM may reduce pre-service consumer debt and

mortgage interest rates to 6% under certain circumstances– Any interest above 6% is permanently forgiven

• Interest above 6% cannot accrue or become due after service

• Military service has to have materially affected the SM’s ability to pay pre-service debts– Finance company has the burden of proof to prove that the

SM is not materially affected by military service

Six Percent Rule• SM must inform finance company of situation in

writing and provide a copy of orders– If orders are not readily available at time request is made to

creditor, SM has 180 days after release from active duty to provide copy of orders

• The term interest includes service charges, renewal charges, fees, or any other charges with respect to an obligation or liability

Termination of Residential Leases

• Allows termination of lease (dwelling, professional, business, agricultural, or similar) by active duty SMs

• Applies to – All pre-service leases– Leases executed on active duty, if SM

subsequently receive orders for a permanent change of duty or deployment for 90 days or more

• SM’s dependent is entitled to protection under this provision if they are materially affected by the SM’s military service– Landlords cannot hold dependents

liable on joint lease

Termination of Residential Leases

Termination of Automobile Leases

• Allows termination of lease for personal or business use by SM or dependent

• Must provide written notice, copy of orders, and surrender automobile within 15 days of notice

• Applies to – All pre-service leases if entering active duty for more than

180 days– Leases executed on active duty, if SM subsequently receive

orders for a permanent change of duty out of continental US or deployment for 180 days or more

Mortgage and Lien Rights

• If a SM is obligated on real or personal property secured by lien, mortgage, etc., and the obligation originated before the period of active duty, a court must stay the proceeding for an equitable period

• To invoke this SM must be materially affected by military service and file an application during or within 90 days after active duty

• Sale, foreclosure, or seizure of secured property for a breach is not valid if made within 90 days after active duty period, unless a court order was granted

Protection Against Default Judgments

• Court is obligated, before entry of default judgment, to require plaintiff to file an affidavit stating whether or not defendant is in military service, or unable to determine

• Court may not enter default judgment until attorney is appointed to represent defendant– If attorney cannot contact SM, then “actions by the attorney …

shall not waive any defense of the servicemember or otherwise bind the servicemember”

– Court can require posting of bond as condition of default judgment

• If a default judgment is entered, then Court shall reopen the judgment upon application of SM showing ability to appear materially affected by military service and meritorious defense – Must seek to vacate default within 90 days after release from

active duty• Protections for bona fide purchaser for value

SCRA Waiver

• SM may waive SCRA protections SM may waive SCRA protections (50 U.S.C. App. §517)(50 U.S.C. App. §517)– Waiver must be in Waiver must be in writingwriting– Waiver must be made during or

after period of service

SCRA Stay of Proceedings

SCRA Stay of Proceedings

• SCRA applies toSCRA applies to allall courts & administrative agencies – federal, state and local -- ALL ALL MEANS ALLMEANS ALL

• SCRA applies to SCRA applies to civilcivil cases only

– SCRA and ADR?• likely discretionary

SCRA Stay of Proceedings

• SM entitled to protections of the SCRA as either plaintiffs or defendants

• SM SM must requestmust request SCRA SCRA protectionprotection

SCRA Stay of Proceedings

• Where SM Does NOT Have Notice of the proceeding…

• Court cannot enter any judgment until its appoints attorney for SM– If attorney cannot locate SM, “actions by the attorney …

shall not waive any defense of the servicemember or otherwise bind the servicemember,” (§521(b)(2))

• “…Court shall grant a stay of proceedings for a minimum of 90 days… upon application of counsel or on the court’s own motion…” if Court determines:– SM has defense to action– SM cannot be contacted

SCRA Stay of Proceedings

• Where SM Has Notice of the proceeding…• Proper Request must be

– In writing– Contents

• Letter / communication stating necessary facts on (1) how military service materially affects SM’s ability to appear and (2) when SM will be available to appear

• Letter / communication from commanding officer (CO)

• Upon receiving proper request, stay is MANDATORY for a minimum of 90 days– Court can also grant stay sua sponte, (§522(b)(1))

• Additional stay can be granted and is within DISCRETION of judge, magistrate, hearing officer, etc.

SCRA Stay of Proceedings

• LEGAL REPRESENTATIVES • SCRA adds a provision recognizing a legal

representative of the SM as: – An attorney acting on the behalf of a SM; or – An individual possessing a power of attorney

• Legal representative can take the same actions as a SM

• Application for stay “does not constitute an appearance for jurisdictional purposes and does not constitute a waiver of any substantive or procedural defense,” (§522(b)(2))

SCRA Stay of Proceedings

• If assisting SM to invoke SCRA rights and have no intention of being attorney of record, then be certain to state that you are not attorney of record and actions are not to count as appearance for jurisdiction over SM

How to Contact SM• DoD database

– Department of Defense (DoD) hyperlink can be used to quickly check if an individual is in active duty military service, https://www.dmdc.osd.mil/scra/owa/home.  

• Required information includes: last name and Social Security number. 

– A statement of military service can also be requested via:

Defense Manpower Data Center(Attn: Military Verification)1600 Wilson Blvd., Suite 400Arlington, VA 22209-2593703.696.6762 telephone703.696.4156 facsimile

• Joint Legal Assistance Website of the Armed Services– http://legalassistance.law.af.mil/

Army Active Duty:Army Worldwide LocatorUSAEREC8899 E. 56th StreetIndianapolis, IN 46249http://www.erec.army.mil/wwl/

Marine Corps:Headquarters, USMCCode MMSB-172008 Elliot Road, Room 201Quantico, VA 22134-5030(703) 784-3942www.usmc.mil/marinelink

Navy:Navy Personnel Command(PERS 312)5720 Integrity DriveMillington, TN 38055-3120(901) 874-3388

Air Force:HeadquartersARMPC/RMIQL550 C. St. West, Suite 50Randolph AFB, TX 78150http:/www.afpc.randolph.af.mil(210) 565-2660

How to Contact SM

Forms

• Handouts• Sample SCRA letters:

– http://legalassistance.law.af.mil/content/content.php?qrylvl=3&lvl1id=1&lvl1folder=yes&lvl2id=11&lvl2folder=yes

State of Illinois Benefits and Protections

Statutory Benefits and Protections

• Service Member’s Employment Tenure Act (330 ILCS 60/1 et seq.) – Provides employment protection to

service members called into active duty service, 330 ILCS 60/4

– Provides a stay of civil actions while serving on active duty, 330 ILCS 60/5.1 •Similar to Federal Servicemembers Civil

Relief Act (SCRA)

Statutory Benefits and Protections

•  The Illinois Patriot Plan (Public Act 094-0635 )– Residential Lease Protection —

•Amends the Code of Civil Procedure—Provides that in an action for possession of residential premises of a tenant or mobile home park resident who is a service member deployed on active duty or of any member of the tenant's or resident's immediate family, the court may stay the proceedings for a period of 90 days or adjust the rental obligation to preserve the parties' interests.

Statutory Benefits and Protections

•  The Illinois Patriot Plan (Public Act 94-0635 ) cont’d– Termination of Cellular Phone Contracts — Military

Personnel Cellular Phone Contract Termination Act:

• Provides that a service member called into active duty, or the service member’s spouse, may terminate cellular phone contracts without penalty under certain conditions.

Statutory Benefits and Protections

•  The Illinois Patriot Plan (Public Act 094-0635 ) cont’d– Interest Protection —

• Amends the Interest Act—Provides that no creditor shall charge or collect from a service member, or spouse, interest or finance charges exceeding 6% per annum during the period that the member is deployed on active duty.

Resources

• All parts of society are deployed in support of the GWOT.

• Accordingly, the entire Illinois community must serve as the support system for these citizen-soldiers and their families.

• Both the Bench and the Bar can help

Discussion of Cir. Ct. Cook Co. / CVLS Initiative