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New Orleans Area Attorney Obtains Dismissal of Financial Institution Client in Potential Class Action

Erin F. Lorio of Litchfield Cavo’s Mandeville, Louisiana office recently won the dismissal of a complicated class action case. The case arose out of alleged violations of the Servicemembers Civil Relief Act (“SCRA”), 50 USC § 3901 et seq., the federal statute that protects servicemembers whose military obligations prevent them from appearing and defending themselves in court. Taking a novel statutory view, plaintiffs in Steven Fodge, et al. v. Trustmark National Bank, et al. argued that Louisiana’s executory foreclosure process, wherein a debtor agrees in advance to allow a creditor to foreclose on mortgaged property in the event of a payment default, violated the SCRA.

Specifically, plaintiffs argued that Louisiana executory foreclosure process allowed the defendants to effectively obtain default judgments against them without adhering to the specific procedural requisites of Section 3931 of the SCRA.

Responding on behalf of our financial institution client, Erin filed a Motion to Dismiss, and successfully argued that, as an action against the mortgaged property, Louisiana’s executory foreclosure process did not result in a default judgment against an individual. Thus, Section 3931 of the SCRA did not apply to plaintiffs’ claims.

In a case of first impression, the US District Court for the Western District of Louisiana agreed that the procedural requisites of the SCRA did not apply to Louisiana executory process, and granted our Motion to Dismiss, thereby dismissing plaintiffs’ claims against our financial institution client with prejudice.

To learn more about Erin’s Real Estate and Title Claims practice, please click here.