By Mark E. Sullivan

The current recall of Reserve and National Guard personnel, and the deployment overseas of active duty military personnel, will undoubtedly affect many litigants. The Soldiers’ and Sailors’ Civil Relief Act of 1940¹ (hereinafter referred to as the SSCRA) provides legal protections for those who are called to active duty in the U.S. Armed Forces or who are deployed overseas. Reservists and members of the National Guard may also be protected under the SSCRA. The protection begins on the date of entry on active duty and generally ends within 30 to 90 days after release from active duty. The United States Supreme Court has said that the SSCRA should be read “with an eye friendly to those who dropped their affairs to answer their country’s call.”²This article highlights some of the issues related to the impact of military service on civil litigation, financial obligations, mortgages, family support, leases, and other matters.

OVERVIEW

Stay of Proceedings

The SSCRA allows for the stay of certain cases when a party is in the military. 50 U.S.C.App. 521 provides that a servicemember (hereinafter sometimes referred to as an SM) who is a party in civil judicial proceedings may obtain a stay if the court finds that the member’s ability to prosecute or defend is “materially affected” by reason of his or her active duty service. A “material effect” exists when military duties prevent the member from appearing in court at the designated time and place, or from assisting in the preparation or presentation of the case. The stay remains in force until the “material effect” is removed. An adverse material effect might also be found when military service substantially impairs the member’s ability to pay financial obligations.

Those moving for a stay under the SSCRA should file an affidavit, executed by the SM or the SM’s commander, setting out all the facts and circumstances detailing the SM’s efforts to appear in court and the next court date when he or she would be available. It is important to remember that, while servicemembers get 30 days’ leave annually, accruing at the rate of 2.5 days per month, military necessity may limit when the leave may be taken. For instance, servicemembers who are going through basic or advanced training may be unable to appear in court due to the training schedule. Keep in mind that the judge might request a copy of the servicemember’s Leave and Earnings Statement (the military equivalent of a pay stub) to show his or her Base Pay, Basic Allowance for Housing, Basic Allowance for Subsistence, tax withholdings, voluntary allotments to pay bills or support, and accrued leave.

Default Decrees

When a plaintiff applies for a default judgment against an SM, the SSCRA applies. It requires the movant to file an affidavit with the court stating that the other party is in the military, is not in the military, or the movant does not know, before a decree or judgment can be obtained by default. If the affidavit indicates the other party is in the military or the movant does not know, the SSCRA indicates the court should appoint an attorney to represent the other party; however, if the SM has counsel of record, or has filed pleadings in the case, this provision does not apply.³When the affidavit shows that the party to be defaulted is in the armed forces, no default can be taken until the court has appointed an attorney to represent the servicemember. If the court fails to appoint an attorney, then the judgment or decree is voidable.

Although the SSCRA does not say, the probable role of the appointed attorney is to protect the interests of the absent member by contacting the servicemember to advise that a default is about to be entered and to ask whether that party wants to request a stay of proceedings. No provision of the SSCRA says who pays the appointed attorney.

When a default has already been entered, a servicemember has the right to have it reopened upon certain conditions. If the default is granted during the period of military service or within 30 days thereafter, the SM can apply to have it set aside, provided that the member requests reopening the decree within 90 days after the end of military service, and that no appearance has been entered, either pro se or through an attorney. The SM’s application to set the decree aside should be granted if the SM can show that he or she has a good and legal defense to the claim and can show prejudice resulting from not being able to appear in person to defend or prosecute.

Stay of Execution, Statutes of Limitation

The SSCRA also provides for staying the execution of a judgment.⁴ The court may grant a stay of the execution of a judgment or order entered against the SM, and vacate or stay an attachment or garnishment when the court determines that the SM’s ability to comply with the judgment or order is materially affected by reason of military service.

Regarding statutes of limitation, the SSCRA provides⁵ that the period of military service shall not be included in computing any limitation period for filing suit, either by or against any person in military service. This also includes suit by or against the heirs, executors, administrators, or assigns of the servicemember, when the claim accrues before or during the period of service. Thus this SSCRA section “tolls” statutes of limitation during the military service of any military plaintiff or defendant. Once military service is shown, the period of limitation is automatically tolled for the duration of the service.

Leases and Landlords

The SSCRA also addresses rental agreements and lease terminations, and these sections are found at 50 U.S.C. App. 530. A lease covering property used for dwelling, professional, business, agricultural, or similar purposes may be terminated by a servicemember if: (a) the lease/rental agreement was signed before the SM entered active duty; and (b) the leased premises have been occupied for the above purposes by the SM or his or her dependents.

To terminate the lease, the SM must deliver written notice to the landlord after entry on active duty or receipt of orders for active duty. The effective date of termination for month-to-month rentals is 30 days after the first date on which the next rental payment is due after the termination notice is delivered.⁶ For all other leases, termination becomes effective on the last day of the month after the month in which proper notice is delivered.⁷

If rent was paid in advance, the landlord must refund the unearned portion. If a security deposit was required, it must be refunded to the servicemember upon termination of the lease. The SM is required to pay rent only for those months before the lease is terminated. Even eviction actions can be stayed. If the property is rented for $1,200 per month or less, the court may delay the eviction action for up to three months. The court must grant the stay if the SM requests it and can prove that his or her ability to pay was materially affected by military service.

Financial Obligations

The SSCRA also applies to time payments and installment contracts. Under 50 U.S.C. App. 531, servicemembers who signed an installment contract for the purchase of real or personal property before active duty will be protected if their ability to make the payments is “materially affected” because of active duty service. If the SM has paid, before entry into active duty, a deposit or installment payment under the contract, and the SM is not able to make payments because of his or her military duty, then the SSCRA will apply and the vendor will be prohibited from exercising any right or option under the contract, such as the right to rescind or terminate the contract or to repossess the property, unless authorized by a court order. The court may determine whether an SM’s financial condition is “materially affected” by comparing the servicemember’s financial condition before entry on active duty with his financial condition while on active duty.

The interest rate on debts and mortgage payments can be reduced when there is material effect shown and a member is going on active duty. When an obligation was incurred before entry on active duty, the interest rate goes down to 6% unless the creditor (bank, finance company, credit card issuer, etc.) can prove in court that the member’s ability to pay was not materially affected by military service. The term “interest” includes service charges.

Foreclosure

The SSCRA also protects servicemembers against foreclosures of mortgages, deeds of trust, and similar security devices, provided the following conditions are met: (a) the relief is sought on an obligation secured by a mortgage, deed of trust, or similar security on either real or personal property; (b) the obligation originated prior to entry upon active duty; (c) the property was owned by the servicemember or dependent before entry on active duty status; (d) the property is still owned by the servicemember or dependent at the time relief is sought; and (e) the ability to meet the financial obligation is “materially affected” by the servicemember’s active duty obligation.

Courts can stay proceedings until the servicemember is available to answer. The court can also extend the mortgage maturity date to allow reduced monthly payments, grant foreclosure subject to being reopened if challenged by a servicemember, and extend the period of redemption by a period equal to the servicemember’s military service.

THE NORTH CAROLINA CASE LAW
Several North Carolina cases have ruled on SSCRA issues.

Motion for Stay Properly Denied

In the Matter of the Paper Writing of Sue H. Vestal ⁸ involved a caveat proceeding to challenge the probate of a will. The trial court dismissed the caveat after finding that the caveators had willfully and blatantly ignored the court’s orders for discovery compliance without reasonable excuse. One caveator, Colonel Weaver, contended that he was prevented from responding due to his involvement in the Gulf War.

On appeal, Colonel Weaver alleged that he was not required to respond because of protections afforded him by the SSCRA.⁹ The Court of Appeals found that Weaver had neither filed a motion to stay under the SSCRA nor an affidavit with supporting facts. Without a request for a stay by the caveator, the only remaining issue was whether the court should have granted a stay on its own motion. The court noted that the only information about Weaver’s military service was found in two unverified papers signed by his attorney and that no evidence showed that Weaver had ever requested military leave to answer the interrogatories.

The court quoted with approval an Indiana case which noted that “the man in service must himself exhibit some degree of good faith and his counsel some degree of diligence.”¹⁰ Vestal suggests the following guidelines: (a) always file a motion and an affidavit when seeking a stay; (b) lack of good faith and due diligence on the part of the servicemember are grounds for denial of the motion; and (c) a stay may not be necessary simply to answer interrogatories—phone calls and correspondence can be used to prepare answers most of the time.

Material Effect Demonstrated

The “flip side” of Vestal is found in Cromer v. Cromer.¹¹ The SM was the defendant in a motion to increase child support with the hearing set for November 1979. Prior to the hearing, the SM sought a stay under the SSCRA. His commander wrote a letter to the presiding judge stating that operational requirements prevented the SM from taking leave until January 1980. The commander subsequently signed an affidavit on the SM’s behalf and sent it to the district court, stating that Jack Cromer, the defendant, was “Chief of the Boat,” the sole interface between enlisted men and officers on the nuclear submarine USS Skate, that operations at sea were scheduled for the last two weeks in November 1979, and that he had advised Mr. Cromer that he would not be permitted to take leave. The district court denied the stay and ordered Mr. Cromer to pay increased child support. Defendant appealed.

The Court of Appeals upheld the trial court’s increase in child support but the Supreme Court granted defendant’s petition for discretionary review. The letter and affidavit showed up as part of the petition for discretionary review in the Supreme Court, but were not part of the record on appeal and had not appeared in any lower court file. Regardless of this irregularity—or perhaps because of it—the Supreme Court reversed, stating that “the trial court might have proceeded in another manner had it been aware of these documents.”¹² Cromer suggests that it’s never too late, that the motion and affidavit can still help the SM in the appellate process to show the “material effect” of military service. It also shows the value of a detailed and specific affidavit and motion requesting only a limited—and not an indefinite—stay, about two months in this case.¹³

Requirement of a Meritorious Defense

When considering a request to reopen a default judgment, in addition to finding that his military service had a material effect on his ability to defend himself, the court must decide whether the defendant has a meritorious defense. This was the issue in Smith v. Davis,¹⁴ in which the SM was served with a complaint in May 1985 alleging that he had been paying $100 a month for the support of his child and requesting an increase to at least $150 a month.

In response the SM sent a letter in June 1985 to plaintiff’s attorney admitting receipt of the summons and complaint but asking that plaintiff’s attorney recognize his rights under the SSCRA. The defendant did not appear at the hearing, nor did an attorney on his behalf, and no attorney was appointed to represent him as is required under 50 U.S.C. App. 520. An order was entered that he pay $225 a month in child support.

The defendant filed a motion to reopen the judgment and submitted an affidavit in support of the motion. The affidavit stated that at the time of the support hearing he was on active duty in the Marine Corps, he was stationed in California, his unit was subject to deployment to the western Pacific at any time, and that his military duties made him unavailable to defend at that hearing. He also stated that, upon arrival at the base, he experienced “pay problems” that left him without a paycheck for four months. The trial court denied his motion.

The Court of Appeals, however, reversed that decision after conducting a clear and concise analysis of the “default provisions” of the SSCRA.¹⁵ The court found that the motion of defendant was timely (made no later than 90 days after termination of military service); the trial court had not appointed an attorney for him (as is required by the SSCRA); the defendant showed prejudice stemming from his military service; and the defendant showed that he had a meritorious defense (that is, he lacked the ability to pay support). The defendant in this case based his affidavit on the four D’s—Distance, Deployment, Defense, and Deficit (that is, inability to pay). Smith v. Davis demonstrates the importance of setting up the groundwork early for a later motion to reopen, and following through with detailed factual statements in an affidavit that is filed on a timely basis with the trial court.

Failure to Demonstrate Diligence and Good Faith

Judkins v. Judkins¹⁶ started in August 1988 when the wife filed a lawsuit for divorce from bed and board, custody, child support, alimony, and equitable distribution. The defendant, an Army Lieutenant Colonel stationed at Ft. Bragg, filed an answer that contained counterclaims for custody, child support, and equitable distribution. Discovery was initiated before April 1989 and continued through August 1990, when the invasion of Kuwait started the deployment that led to the Gulf War. At that time “the court continued the matter over because of defendant’s service with the United States Military in that action.”¹⁷

But that didn’t end the dispute. Although combat in the Gulf War was finished in February 1991, the plaintiff continued to attempt to obtain information from defendant through discovery and the defendant continued to resist. The plaintiff filed motions to compel discovery responses in July 1991, December 1991, and February 1992. In February 1992, a year after the Gulf War ended, the judge entered an order requiring the defendant to produce documents to the plaintiff. The defendant failed to comply with the discovery order.

The trial, set for April of 1992, was continued at defendant’s request. The trial judge contacted the Army and was told that defendant was “on a mission” and that he would be available in July 1992. The court ordered a continuance until July 1992. When that date rolled around, defendant’s attorney again requested a continuance, stating that defendant would be available to complete discovery and the pretrial order on or before August 3, 1992, and would be available for trial on August 31, 1992. The court once again granted a continuance, setting the case peremptorily for hearing on August 31, 1992.

Is it hard to guess what happened next? The defendant failed to respond to discovery, failed to complete the pretrial order, and moved for a continuance on August 31, adding (apparently for the first time) a motion for a stay under the SSCRA. The trial court found that the defendant had failed to exercise good faith and proper diligence in appearing and resolving his case and then denied the motions of defendant.

The Court of Appeals framed the issue as whether the trial judge had erred in denying the defendant’s motion for a stay. The court noted that the only evidence of the SM’s unavailability was a letter from the Army stating that the defendant was to depart for Southeast Asia on August 30, 1992, for about 46 days, that there was no evidence in the record as to whether the SM had at any time requested leave to defend the action or whether leave was likely to be granted upon request, and that the defendant made no showing as to how his defense would be prejudiced or his rights materially affected by his absence. The Court of Appeals accepted the trial court’s determination that the SM had failed to exercise good faith and due diligence.¹⁸

The Judkins case teaches that a stay will not be granted without a showing of good faith and proper diligence, and that the courts will usually need to see a statement from the SM as to whether leave was available and had been requested. A stay is not forever. Contrary to the popular notion of many soldiers and some civilian practitioners, a stay of proceedings is not meant to outlast the natural life of the lawsuit or, for that matter, the presiding judge. Military members accrue leave at the rate of 30 days per year, and courts can take judicial notice of this fact.¹⁹ Current overseas postings usually last around three years for an “accompanied tour” (with family members), and much less for unaccompanied tours in such host countries as Turkey, Korea, and Iceland. This showing regarding leave is important in most cases where the SM is proclaiming nonavailability.

The stay is, in fact, intended to last only as long as the material effect lasts. Once this effect is lifted, the opposing party should immediately request the lifting of the stay. In the event of further resistance by the SM, the court should require submissions upon affidavit.

Finding of No Prejudice

The last case is Booker v. Everhart.²⁰ The case arose from “a complex series of proceedings and circumstances involving the divorce of defendant.” In March 1974 the plaintiff, an attorney who had represented the plaintiff-wife, sued for his fees on a note from defendant-husband (guaranteed by his parents). In May 1975 the defendant joined the Navy and was sent to the Philippines, where he remained through trial. In January 1976 the defendants (the husband and his parents) moved that the case be “entirely removed from the trial calendar” pursuant to the SSCRA on the ground that the husband would be absent from trial. The judge denied the motion and set the trial for April 1976. A month after that order and a month before the trial date, the defendants noticed plaintiff for the taking of the deposition of the defendant-husband in the Philippines two weeks before the trial. The judge granted a protective order to plaintiff, and the deposition was not taken. At the trial the court granted a directed verdict for plaintiff and the defendants appealed.

The Court of Appeals, in ruling on defendants’ claim that the trial court erred in denying a stay under 50 U.S.C.App. 521, noted that the Act mandates a continuance where military service would cause a party to be absent, but it also allows the judge to deny a continuance if, in his opinion, the SM’s ability to conduct his defense is not materially affected by reason of his military service. The court then noted the following facts: (a) the defendant-husband, who volunteered for naval service, was sent to the Philippines 14 months after the lawsuit was filed; (b) there was no showing in his affidavit that he requested leave or would not be able to obtain leave to be present at trial; (c) there was no showing in his affidavit, beyond a mere conclusory statement, that his defense would be prejudiced or his rights impaired materially by his absence; (d) his deposition had already been taken in May 1974 by plaintiff in the presence of counsel for the defendants; and (e) defendant-husband, an attorney licensed in North Carolina, took no steps to seek a speedy determination of the case prior to going on active duty. Based on the above, the court upheld the trial judge’s order, which found that the SM’s absence would not materially prejudice his defense. The court noted that the SM’s use of the SSCRA was likely based on policy and strategy, rather than on the necessities of military service.

The lessons of the Booker case are that, once again, there must be more than a vague and conclusory affidavit—there must be a clear and detailed showing that the SM will be prejudiced by his inability to appear and defend. There should, ordinarily, also be a statement as to whether leave was requested and the results of such a request.

SSCRA Resources on the Internet

There are useful resources on the internet for SSCRA research. Visit the home page of the Army JAG School, www.jagcnet. army.mil/TJAGSA. When you get there, click on “Publications” on the left side, then scroll down to “Legal Assistance” and look for JA 260, “Soldiers’ and Sailors’ Civil Relief Act Guide,” a thorough examination of every section of the SSCRA by the faculty of the Army JAG School (updated in July 2000). You can also find useful material at these URL’s:

“Soldiers’ and Sailors’ Civil Relief Act Provides Umbrella of Protection” - Department of Defense article, Armed Forces Information Service: www. defenselink.mil/specials/Relief_Act/

US Coast Guard article on SSCRA: www.uscg.mil/mlclant/LDiv/soldiers1.htm

Air Force Academy article on SSCRA: www.usafa.af.mil/10ja/ssra.htm

Coast Guard Fact Sheet on SSCRA: www.uscg.mil/legal/la/topics/sscra/ SSCRA_Factsheet.htm

Article by Carreon and Associates, Cypress, CA, on SSCRA: www.carreonandassociates.com/soldiersact.html

Office of Child Support Enforcement’s “A Caseworker’s Guide to Child Support Enforcement and Military Personnel” - section on SSCRA: www.acf. dhhs.gov/programs/cse/fct/military guide2000.htm#relief

Legal Services, www.jagcnet.army.mil/ legal, the Army Judge Advocate General’s Corps public preventive legal information site (Soldiers’ & Sailors’ Civil Relief Act information center).

Mark Sullivan is a JAG colonel in the Army Reserve and a Board-Certified Specialist in Family Law. He was the initial director of the State Bar's military committee, 1980-86, and he practices in Raleigh.

Endnotes
1. 50 U.S.C. App. 501-548, 560-593.
2. Le Maistre v. Leffers, 333 U.S. 1, 6 (1948).
3. 50 U.S.C. App. 520 governs default entries and reopening defaults.
4. 50 U.S.C. App. 523.
5. 50 U.S.C. App. 525.
6. For example, if rent is due on the first of the month and notice is mailed on 1 August, then the next rent payment is due on 1 September. Thirty days after that date would be 1 October, the effective date of termination.
7. For example, if the lease calls for a yearly rental, and notice of termination is given on 20 July, the effective date of termination would be 31 August.
8. 104 N.C. App. 739, 411 S.E.2d 167 (1991).
9. Vestal, 104 N.C. App. at 743, 411 S.E.2d at 169.
10. Vestal, 104 N.C. App. at 744, 411 S.E.2d at 170, quoting from Sharp v. Grip Nut Co., 116 Ind. App. 106, 111, 62 N.E.2d 774, 776 (1945).
11. 303 N.C. 307, 278 S.E. 2d 518 (1981).
12. Cromer, 303 N.C. at 311, 278 S.E. 2d at 520.
13. It should also be noted that there is no clear formulation of who has the burden of proof to show a “material effect.” As stated by the U.S. Supreme Court in Boone v. Lightner. supra: “The Act makes no express provision as to who must carry the burden of showing that a party will or will not be prejudiced, in pursuance no doubt of its policy of making the law flexible to meet the great variety of situations no legislator and no court is wise enough to foresee. We, too, refrain from declaring any rigid doctrine of burden of proof in this matter, believing that courts called upon to use discretion will usually have enough sense to know from what direction their information should be expected to come.” Although it is logical to place the burden of proof on the movant (i.e., the SM who is requesting a stay of proceedings), some courts have stated that both parties may be required to produce evidence on the issues. Gates v. Gates, 197 Ga. 11, 25 S.E. 2d 108 (1943).
14. 88 N.C. App. 557, 364 S.E. 2d 156 (1988).
15. 50 U.S.C. App. 520.
16. 113 N.C. App. 734, 441 S.E. 2d 139 (1994).
17. Judkins, 113 N.C. App. at 738, 441 S.E. 2d at 141.
18. The court also dealt with the issue of personal jurisdiction. Under the Uniformed Services Former Spouses’ Protection Act, 10 U.S.C. 1408(c)(4), a court can exercise jurisdiction over the division of military retired pay if a SM consents to the jurisdiction of the court, among other things. The court found that the answer and counterclaims of the defendant constituted a general appearance, and that he had thus consented to the court’s jurisdiction. Thus the SM in a military pension division case is well-advised to object immediately at the start of the case as to jurisdiction over his military pension (as an aspect of equitable distribution). If he fails to do this, he may up the claim of lack of jurisdiction by the trial court.
19. Underhill v. Barnes, 161 Ga. App. 776, 288 S.E. 2d 905 (1982).
20. 33 N.C. App. 1, 234 S.E. 2d 46 (1977).