The North Carolina Servicemembers Civil Relief Act (“NCSCRA”), which took effect on October 1, 2019, expanded the rights of servicemembers and their dependents living in North Carolina. The new law is codified in Article 4 of Chapter 127B, and can be found here.

The NCSCRA incorporates the federal SCRA (codified in Chapter 50 of Title 50 of the United States Code) into North Carolina law. The federal SCRA, originally enacted in 2003 and amended several times since then, provides protections for members of the military who enter active duty, and covers issues such as rental agreements, security deposits, evictions, credit card interest rates, mortgage interest rates and foreclosures, civil judgments and proceedings, automobile leases, life insurance, health insurance, and income tax payments.

The NCSCRA expands beyond the scope of the federal SCRA by extending its protections to include members of the North Carolina National Guard serving on active duty, and members of other states’ National Guard serving on active duty who live in North Carolina.

The NCSCRA also provides dependents (as defined in 50 U.S.C. § 3911(4)) of servicemembers some of the same rights and protections as servicemembers, including protections against default judgments, stays of certain proceedings including child custody, stays of certain fines or penalties under contracts, interest rate limitations, and tolling of statutes of limitations.

Particularly noteworthy is the provision that makes a “knowing violation” of the NCSCRA an unfair or deceptive trade practice under Chapter 75A, meaning that violators may be exposed to the prospect of treble damages.

New protections are also provided for servicemembers and dependents with regard to certain types of prepaid entertainment contracts, including telephone, internet, television, and satellite radio. The NCSCRA allows servicemembers to terminate such contracts if they are ordered to relocate for a period of at least 90 days to a location that does not support the contract, and they provide a copy of that order and a notice of termination to the provider.

The North Carolina Administrative Office of the Courts has already updated its SCRA Affidavit form, which can be found here. Before a default judgment can be obtained, a plaintiff must file this affidavit stating whether the defendant is in military service. The new affidavit also requires a representation about whether the defendant is a dependent of a military servicemember. Although it is possible to check on whether a defendant is a service member on the Servicemembers Civil Relief Act website, there really is no good way to determine whether a defendant is a dependent of a servicemember. The affidavit does include an option to state that the plaintiff is “unable to determine” whether the defendant is a servicemember or dependent.

Now, more than ever, it is essential for plaintiff’s attorneys and attorneys who counsel businesses with consumer contracts to familiarize themselves with the NCSCRA and federal SCRA in order to avoid violations and the potential hammer of treble damages and attorney’s fees.

November 18, 2019/by Litigation