September 26, 2019
A single knock on your door can change the trajectory of your business when it’s followed by the service of papers regarding a lawsuit. Whether it’s a frivolous personal injury lawsuit, a federal complaint filed by a disgruntled employee, or a civil enforcement petition from the IRS, we understand how a lawsuit can easily overwhelm your small business.
Legal complaints must generally be answered within 21 days of service to avoid a default judgment. Even if the lawsuit is factually groundless, defendants must still expend time and resources to quickly find an attorney or risk liability. Rushing the hiring process, however, often results in unnecessary expenses and unintended consequences for Virginia business owners.
Proper “service” of a lawsuit typically means you’ve received, either in-person or via mail, copies of a “summons” and complaint. Sometimes these documents are accompanied by a cover letter from an attorney or exhibits related to the lawsuit, Taken together, these documents answer the basic questions about the who, what, where, when, and how of the lawsuit.
The summons is your official notification that you’ve been sued and must appear and answer the lawsuit before a court of law. The caption of your case provides the following information and should appear on both the summons and the first page of the complaint.
The summons typically sets forth the timeline by which you must answer the complaint, but defendants seldom have to appear in person. Instead, it’s often sufficient to make an appearance on paper by filing (1) an answer to the complaint or (2) a motion requesting the complaint be dismissed, transferred, or clarified.
The complaint itself, also called a pleading, must set forth the following information under most federal and local rules:
Complaints often contain pages of formal legal recitations. It’s not uncommon for the relevant facts describing the heart of the lawsuit to be buried in a single line of a multi-page complaint. For example, “on September 1, 2018, the vehicle owned by Smith’s Contracting Corp. did strike the rear of Mr. Jones’ truck, causing him injury.” This tells you that you’ve been sued for the car accident your employee was involved in on September 1, 2018.
If you’ve been served with a lawsuit, first, take a breath. You are not liable for the relief demanded unless a court of law enters judgment in the plaintiff’s favor, and the burden is on the plaintiff to produce reliable evidence sufficient to prove his or her claims. There are little to no prerequisites to filing a lawsuit. The court did not analyze the complaint before it was filed, and the fact that you have been served with a lawsuit is not an indication of liability. It is simply an indication that the plaintiff will attempt to prove the facts alleged in the complaint before a court of law.
Second, review the summons and complaint. Businesses are often mistakenly served with lawsuits intended for businesses with similar names or intended for former tenants/owners of your building. If you are a proper defendant, check to see where you’ve been sued. You may have been sued in “United States District Court,” which means the lawsuit is federal. You also may have been sued in a state or county in which you do not do business. The law does not favor this, and there are limits to where a plaintiff can file his or her lawsuit. Next, review the complaint to discover why you’ve been sued. The nature of the complaint may dictate whether your insurance company can defend the lawsuit on your behalf.
Third, contact an attorney or your insurance company even if you’re not the proper defendant. Personal injury lawsuits (such as a slip and fall in your store) may be covered by your insurance contract. In such cases, your insurance company is often responsible for responding to the lawsuit, defending you, and even paying any judgment entered against you. You may have to do nothing more than to send a copy of the summons and complaint to your insurance company, but this doesn’t cover every lawsuit. Avoid relying solely on your insurance company only to have it decline to defend you after all responsive deadlines have passed. Contacting a local, private attorney immediately after you’ve been served is often the safest course of action.
If you have been served with papers regarding business litigation, you should speak to an attorney right away. Our experienced business litigation attorneys can review the nature of the complaint and recommend the best course of action for you. This may mean contacting another attorney, sending the complaint to your insurance company, or responding to the lawsuit on your behalf. To schedule a consultation with one of our top-rated business defense lawyers, contact us today at (703) 520-1326 or online.