United States District Court, W.D. Louisiana, Shreveport Division
STEVEN D. FODGE, ET AL.
TRUSTMARK NATIONAL BANK, ET AL.
HORNSBY, MAGISTRATE JUDGE
MAURICE HICKS, JR., UNITED STATES DISTRICT COURT CHIEF JUDGE
the Court are multiple pending Motions to Dismiss filed by
Defendants Barksdale Federal Credit Union
(“Barksdale”), Bank of America, N.A. (“Bank
of America”), Ocwen Loan Servicing, LLC
(“Ocwen”), PennyMac Loan Services, LLC
(“PennyMac”), and PHH Mortgage Corporation
(“PHH”) (collectively “Defendants”)
pursuant to Federal Rule of Civil Procedure 12(b)(6).
See Record Documents 85, 94, 95, 99, and 100. There
is also pending a Motion to Strike filed by Defendant Bank of
America. See Record Document 96. Plaintiffs Steven
D. Fodge (“Fodge”), Joseph E. Carey
(“Carey”), Jon A. Tokay (“Tokay”),
Pamela R. Jeffcoat (“Jeffcoat”), Andrew J.
Kaltenmark (“Kaltenmark”), Lance K. Inovejas and
Deborah A. Inovejas (the “Inovejas”)
(collectively “Plaintiffs”) oppose the motions.
See Record Documents 116, 119, 120, 121, 122, and
125.Defendants seek dismissal of all of
Plaintiffs' claims. For the reasons set forth below,
Defendants' Motions to Dismiss are hereby
GRANTED. Additionally, Bank of America's
Motion to Strike is DENIED AS MOOT.
in this action are five individuals and one married couple
who allege that they separately entered into mortgage
agreements with six separate lenders and were later
foreclosed on through Louisiana's executory process
procedure in Louisiana state courts. See Record
Document 84 at 2-3, 5-6. Plaintiffs allege that they were on
active duty with various branches of the military at the
relevant times and that the foreclosures violated provisions
of the Servicemembers Civil Relief Act (“SCRA”),
50 U.S.C. §§ 3901 et seq., which provides
protections against, inter alia, default judgments
absent a waiver that meets certain requirements. See
also pray for certification of a state-wide class of
servicemembers who, like themselves, obtained
mortgage-secured loans, did not sign valid waivers acceptable
under the SCRA, and who were foreclosed upon by Louisiana
executory process while in active military service, as
defined by the Act. See id. at 5-6,
24-25. Plaintiffs seek damages in addition to
declaratory and injunctive relief on behalf of a class that
they estimate numbers in the thousands. Id. at 25,
responded to the complaint by each filing a motion to
dismiss; additionally, a motion to sever and a motion to
strike were filed by Ocwen and Bank of America, respectively.
See Record Documents 86 and 96. Defendants make
similar arguments against Plaintiffs' suit, including
their assertions that the SCRA does not apply to Louisiana
executory process proceedings and that the SCRA did not
render invalid the confession of judgment provisions
contained in Plaintiffs' mortgage agreements.
See Record Document 137 at 1-2. Several defendants
also raise arguments specific to certain plaintiffs, such as
bankruptcy estoppel or a challenge to whether a plaintiff was
on active duty within the meaning of the SCRA at the relevant
time. See id.
addition, a Motion to Sever was filed by Ocwen, as well as
several Motions to Stay that were filed by Ocwen, PennyMac,
and Bank of America. See Record Documents 86, 97,
and 105. Thereafter, on November 19, 2018, Magistrate Judge
Hornsby, upon consideration of the motions to stay, entered
an order staying the requirement of exchanging initial
disclosures, discovery, and the class certification process
pending the Court's ruling on the instant Motions to
Dismiss and Motion to Strike. See Record Document
137 at 3.
LAW AND ANALYSIS
Pleading and 12(b)(6) Motion to Dismiss Standards
8(a)(2) of the Federal Rules of Civil Procedure governs the
requirements for pleadings that state a claim for relief,
requiring that a pleading contain “a short and plain
statement of the claim showing that the pleader is entitled
to relief.” The standard for the adequacy of complaints
under Rule 8(a)(2) is now a “plausibility”
standard found in Bell Atlantic Corp. v. Twombly and
its progeny. 550 U.S. 544, 127 S.Ct. 1955 (2007). Under this
standard, “factual allegations must be enough to raise
a right to relief above the speculative level . . . on the
assumption that all the allegations in the complaint are true
(even if doubtful in fact).” Id. at 555-56,
127 S.Ct. at 1965. If a pleading only contains “labels
and conclusions” and “a formulaic recitation of
the elements of a cause of action, ” the pleading does
not meet the standards of Rule 8(a)(2). Ashcroft v.
Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949 (2009)
Rule of Civil Procedure 12(b)(6) allows parties to seek
dismissal of a party's pleading for failure to state a
claim upon which relief may be granted. In deciding a Rule
12(b)(6) motion to dismiss, a court generally may not
“go outside the pleadings.” Colle v. Brazos
Cty., Tex., 981 F.2d 237, 243 (5th Cir. 1993). However,
a court may rely upon “documents incorporated into the
complaint by reference and matters of which a court may take
judicial notice” in deciding a motion to dismiss.
Dorsey v. Portfolio Equities, Inc., 540 F.3d 333,
338 (5th Cir. 2008). Additionally, courts must accept all
factual allegations in the complaint as true. See
Iqbal, 556 U.S. at 678, 129 S.Ct. at 1949. However,
courts do not have to accept legal conclusions as facts.
See id. A court does not evaluate a plaintiff's
likelihood for success, but instead determines whether a
plaintiff has pleaded a legally cognizable claim. See
U.S. ex rel. Riley v. St. Luke's Episcopal Hosp.,
355 F.3d 370, 376 (5th Cir. 2004). Courts considering a
motion to dismiss under Rule 12(b)(6) are only obligated to
allow those complaints that are facially plausible under the
Iqbal and Twombly standard to survive such
a motion. See Iqbal, 556 U.S. at 678- 79, 129 S.Ct.
at 1949. If the complaint does not meet this standard, it can
be dismissed for failure to state a claim upon which relief
can be granted. See id. Such a dismissal ends the
case “at the point of minimum expenditure of time and
money by the parties and the court.” Twombly,
550 U.S. at 558, 127 S.Ct. at 1966.
Applicability of SCRA Section 3931 to Louisiana Executory
Plaintiffs bring this action pursuant to the SCRA, their
arguments in support of their claims rely primarily on two of
the Act's provisions, specifically Sections 3931 and
3918. See Record Document 84 at 27. The Court first
addresses their argument relating to Section 3931, which is
titled “Protection of servicemembers against default
judgments.” 50 U.S.C. § 3931. Plaintiffs make
several assertions pursuant to this section, specifically
that Defendants' use of Louisiana's executory process
procedure to ...