Lincoln Military Housing SCRA Case: Default Evictions, $35,000 Each

What happened

On August 10, 2016 the United States sued San Diego Family Housing, LLC and Lincoln Military Property Management, LP, which does business as Lincoln Military Housing, in the Southern District of California, and the parties submitted a consent order for entry along with the complaint. The complaint describes San Diego Family Housing as the owner and operator of dozens of on-base and off-base military housing communities throughout San Diego County, home to thousands of servicemembers and their families, with Lincoln managing those properties and contracting with the Navy and other branches. DOJ's release called it the first case the Department had filed alleging the unlawful eviction of servicemembers.

To evict a tenant, the complaint says, Lincoln filed an unlawful detainer action in California state court, as state law requires, and requested a default on Form CIV-100 when the tenant did not respond. From 2008 through 2013, it adds, Lincoln made those requests against multiple active duty servicemembers, told the court they were not servicemembers, did not file an affidavit stating their status with supporting facts or saying that due diligence could not determine it, and obtained default judgments with no attorney appointed for any of them (complaint paragraphs 16 to 22). According to DOJ's release, every servicemember being compensated was in military service when evicted.

The consent order describes the alleged violations as committed through counsel the defendants retained for those unlawful detainer cases, and it reaches that counsel: its injunction against seeking a default judgment without a proper military affidavit binds any lawyer retained to handle a Lincoln eviction (consent order introduction and paragraph 1). For the order's term, Lincoln had to give its eviction lawyers the order and its SCRA policies and require each to acknowledge in writing familiarity with the SCRA and any state counterpart before taking a case (paragraph 9).

DOJ's release says the referral came from the Legal Services Support Team at Marine Corps Air Station Miramar, and that the California Office of the Attorney General filed its own state court case that day under California's Rosenthal Fair Debt Collection Practices Act. The order was entered by the court on November 1, 2016 and ran two years (paragraph 30). The defendants did not admit liability.

The law behind this: 50 U.S.C. § 3931

Protection of servicemembers against default judgments: read the statute , or read § 3931 in plain English, with its enforcement record .

Our servicemembers, who risk their lives to protect our freedom, should never return from duty to find their civil rights violated and their families evicted.

Servicemembers should not have to worry about their families being evicted while they are serving the United States.

Who was covered

Four servicemembers the United States contends were subjected to improper default judgments, named in an exhibit to the order (consent order paragraph 11). For its two-year term, the order protected any tenant in a Lincoln unlawful detainer action who is an SCRA-protected servicemember, a term the order defines through the statute's definitions of servicemember and military service and its provision for reservists ordered to report (footnote 1).

What the settlement paid

• $200,000 payable to the United States within 15 days of entry and administered by the U.S. Attorney's Office for the Southern District of California: $140,000 for the four servicemembers and a $60,000 civil penalty under 50 U.S.C. § 4041(b)(3) (consent order paragraph 10).
• $35,000 to each servicemember within 15 days after the United States receives that person's signed release (paragraph 13). A share not claimed with a signed release and declaration within six months of entry goes instead to the Navy-Marine Corps Relief Society, the organization the defendants selected, which must report within a year how it used the money (paragraph 14).
• Within 45 days the defendants had to move the appropriate courts to vacate any of the four default judgments not already vacated (paragraph 18). DOJ's case page and release describe this as vacating the judgments; the order makes it an obligation to file the motions. The defendants must also request deletion, by all three major credit bureaus, of information tied to the judgments for the servicemembers and any co-tenants, may not pursue a deficiency on those leases, must indemnify them against anyone else who does, and may not offset other debts or refuse payment over an earlier release or an arbitration agreement (paragraphs 15 and 16).
• Within 30 days, written policies requiring a review of any military information or orders the tenant provided and a DMDC search by last name plus Social Security number or birth date before seeking a default; for a servicemember who does not answer, an affidavit saying the defendant is in military service and attaching the latest DMDC report or the orders (paragraph 2).

Why this case matters

The affidavit was the whole case. Section 3931 lets a plaintiff swear that a defendant is serving, is not, or that it cannot tell, and according to DOJ's release Lincoln filed affidavits saying no defendant was in military service when every compensated tenant was. The complaint says that cost the tenants an appointed lawyer and a court's review of whether their evictions should be delayed. The order answered with a database search and a sworn statement before any default, and it put the duty on the eviction lawyers as well as on the landlord.