Steven Fodge v. Trustmark National Bank, et

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