Steven Fodge v. Trustmark National Bank, et ( 2019 )


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  •      Case: 19-30279   Document: 00515243203    Page: 1   Date Filed: 12/19/2019
    IN THE UNITED STATES COURT OF APPEALS
    FOR THE FIFTH CIRCUIT
    United States Court of Appeals
    Fifth Circuit
    FILED
    No. 19-30279             December 19, 2019
    Summary Calendar
    Lyle W. Cayce
    Clerk
    STEVEN D. FODGE, Individually and as representative on behalf of all
    similarly situated persons; JOSEPH E. CAREY, Individually and as
    representative on behalf of all similarly situated persons; JON A. TOKAY,
    Individually and as representative on behalf of all similarly situated persons;
    PAMELA R. JEFFCOAT, Individually and as representative on behalf of all
    similarly situated persons; ANDREW J. KALTENMARK, Individually and as
    representative on behalf of all similarly situated persons; LANCE K.
    INOVEJAS, Individually and as representative on behalf of all similarly
    situated persons; DEBORAH A. INOVEJAS, Individually and as
    representative on behalf of all similarly situated persons,
    Plaintiffs - Appellants
    v.
    TRUSTMARK NATIONAL BANK; OCWEN LOAN SERVICING, L.L.C.;
    BARKSDALE FEDERAL CREDIT UNION; PENNYMAC LOAN SERVICES,
    L.L.C.; BANK OF AMERICA, N.A.; PHH MORTGAGE CORPORATION,
    Defendants - Appellees
    Appeal from the United States District Court
    for the Western District of Louisiana
    Case: 19-30279    Document: 00515243203     Page: 2   Date Filed: 12/19/2019
    No. 19-30279
    Before KING, GRAVES, and WILLETT, Circuit Judges.
    JAMES E. GRAVES, JR., Circuit Judge:
    Appellants Steven D. Fodge, Joseph E. Carey, Jon. A. Tokay, Pamela R.
    Jeffcoat, Andrew J. Kaltenmark, Lance K. Inovejas, and Deborah A. Inovejas
    appeal from the district court’s orders granting Appellees Ocwen Loan
    Servicing, LLC; Barksdale Federal Credit Union; Pennymac Loan Services,
    L.L.C.; Bank of America, N.A.; and PHH Mortgage Corporation’s motions to
    dismiss and Appellee Trustmark National Bank’s motion for judgment on the
    pleadings. We AFFIRM.
    I.
    Appellants brought a putative class action at the district court, alleging
    that they and similarly situated individuals were on active duty with the
    military when Appellees variously foreclosed on their properties through
    executory proceedings in Louisiana state courts based on mortgage, privilege,
    or security agreements each plaintiff and putative class member had entered
    with one of the defendants. Appellants conceded that each of their agreements
    contained a clause importing a confession of judgment.             Nonetheless,
    Appellants alleged that Appellees’ foreclosure actions were in violation of the
    Servicemembers Civil Relief Act (SCRA), 50 U.S.C. § 3901, et seq., which
    provides active duty servicemembers with protections against default
    judgment absent a waiver that meets certain requirements. 50 U.S.C. §§ 3931
    (setting out protections against default judgment) and 3918 (providing the
    requirements for waiving SCRA protections). Appellants sought damages and
    declaratory and injunctive relief on behalf of themselves and the putative class.
    Each appellee, except for Trustmark National Bank, filed a motion to dismiss
    pursuant to Federal Rule of Civil Procedure 12(b)(6).        The district court
    granted the motions, dismissing the claims against these appellees with
    prejudice.   Subsequently, Trustmark National Bank filed a motion for
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    No. 19-30279
    judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c),
    arguing that the claims against it were nearly identical to the claims filed
    against the other defendants. The district court also granted this motion and
    dismissed the remaining claims with prejudice.
    II.
    “We review dismissals under Rule[s] 12(b)(6) and 12(c) de novo.” Magee
    v. Reed, 
    912 F.3d 820
    , 822 (5th Cir. 2019). The standard for dismissal under
    Rules 12(b)(6) and 12(c) is the same: “To survive a motion to dismiss, a
    complaint must contain sufficient factual matter, accepted as true, to state a
    claim to relief that is plausible on its face.” Edionwe v. Bailey, 
    860 F.3d 287
    ,
    291 (5th Cir. 2017) (quoting Ashcroft v. Iqbal, 
    556 U.S. 662
    , 678 (2009)).
    III.
    Appellants argue that (1) the state court orders authorizing seizure and
    sale of Appellants’ respective properties through executory proceedings
    constitute default judgments under the SCRA and (2) they did not waive their
    right to SCRA protections against default judgment because their confessions
    of judgment do not constitute proper waivers under the SCRA. These are
    matters of first impression in this and other circuits.      We address each
    argument in turn.
    First, Appellants’ argument that the state court orders authorizing
    seizure and sale of Appellants’ respective properties constitute default
    judgments under the SCRA is unavailing. As explained below, 50 U.S.C. §
    3931 does not encompass Louisiana executory proceedings where, as here, the
    debtors confessed judgment.
    Appellants rely on two sections of the SCRA—50 U.S.C. §§ 3931 and
    3911—to support their argument.       Section 3931 is entitled “Protection of
    servicemembers against default judgments” and “applies to any civil action or
    proceeding, including any child custody proceeding, in which the defendant
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    does not make an appearance.” § 3931(a). Section 3931 requires, among other
    things, that a plaintiff file an affidavit stating whether a defendant is in
    military service and that courts appoint an attorney to represent defendants
    in military service. § 3931(b).
    Appellants argue that § 3911’s definition of “judgment” applies to § 3931.
    Section 3911 defines “judgment” as “any judgment, decree, order, or ruling,
    final or temporary.” § 3911(9). 1 This definition, even if relevant to § 3931, is
    unavailing. Section 3931 states that it applies to proceedings “in which the
    defendant does not make an appearance.” § 3931(a). Appellants necessarily
    made an appearance at the respective executory proceedings through their
    confessions of judgment.
    Under Louisiana law, an executory proceeding is an expedited in rem
    civil action. Hood Motor Co., Inc. v. Lawrence, 
    320 So. 2d 111
    , 112–13 (La.
    1975). Louisiana law defines such proceedings as “those which are used to
    effect the seizure and sale of property, without previous citation and judgment,
    to enforce a mortgage or privilege thereon evidenced by an authentic act
    importing a confession of judgment, and in other cases allowed by law.” LA.
    C.C.P. ART. 2631.       By virtue of a confession of judgment, a debtor in an
    executory proceeding “has appeared in the suit, and answered the demand.”
    Marbury v. Pace, 
    29 La. Ann. 557
    , 558–59 (La. 1877); Buckner v. Carmack, 
    272 So. 2d 326
    , 331 (La. 1973) (same). Thus, § 3931 does not apply to Louisiana
    executory proceedings where, as here, the debtors have confessed judgment.
    1 Although the SCRA does not define “default judgment,” see § 3911 (“Definitions”),
    the phrase is generally understood as distinct from “judgment.” “Default judgment” generally
    means “a judgment entered by the Court as a penalty against a party for failure to appear or
    otherwise to perform a procedurally required act.” Anchorage Assocs. v. V.I. Bd. of Tax
    Review, 
    922 F.2d 168
    , 174 n.3 (3d Cir. 1990) (citation and internal quotation marks omitted);
    see also FED. R. CIV. P. 55(a) (“When a party against whom a judgment for affirmative relief
    is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or
    otherwise, the clerk must enter the party’s default.”).
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    In fact, Appellants conceded this. In opposing Bank of America’s motion to
    dismiss, Appellants “agree[d] 100%” that “Section 3931 does not apply to
    proceedings enforcing [valid] confessions of judgments.” For all these reasons,
    Appellants’ first argument is unavailing.
    Second, Appellants argue that they did not waive their right to SCRA
    protections against default judgment because their confessions of judgment do
    not constitute proper waivers under the SCRA, specifically, 50 U.S.C. § 3918,
    which provides the requirements for a valid waiver of SCRA protections. This
    argument is moot. As determined above, § 3931 does not apply to Louisiana
    executory proceedings where the debtor has confessed judgment. 2 SCRA’s
    waiver requirements are therefore inapplicable because there is nothing to
    waive here; Appellants were never protected under § 3931 against seizures and
    sales ordered through Louisiana executory proceedings. 3
    IV.
    For the foregoing reasons, we AFFIRM.
    2 Appellants do not argue that the confessions of judgment are invalid based on a law
    other than the SCRA.
    3 The court need not address Appellees’ additional and alternative arguments in
    support of the dismissal of Appellants’ claims.
    5