Nervousness, fear, and doubt are common emotions felt by business owners when they are presented with court papers. Fortunately, you can alleviate these uncomfortable reactions by being prepared for business litigation. Not panicking and not contacting the person who is suing you — or their attorney — are probably the first things to remember when hit with a complaint. Panicking will sap the energy you will need for the controversy ahead. Moreover, anything you say to your adversary or to their attorney can be used against you later in court. Instead, remain calm and begin to prepare!
When you are served with court papers, you should contact your attorney at once and begin organizing your documents. Ignoring the lawsuit will not make it go away. The law mandates a limited amount of time for responding to a summons and complaint – usually within thirty days of service. Parties that do not respond within the allotted time are considered in default and denied the opportunity to defend their interests in court. Barring extenuating circumstances, parties in default can be found liable for all the allegations made against them. Immediately contacting your attorney once you have been notified of a lawsuit and working with your attorney to prepare an answer to the allegations made against you is the best way to avoid a default judgment and its negative consequences.
Under New York law, corporations and LLC’s are required to be represented by an attorney in court1 See FOOTNOTE content at the bottom of this page: CPLR 321(a) provides in relevant part:
A party, other than one specified in section 1201 of this chapter, may prosecute or defend a civil action in person or by attorney, except that a corporation or voluntary association shall appear by attorney.. If you do not have an ongoing relationship with an attorney, you can ask friends and colleagues for referrals, or contact your local bar association. Most lawsuits involve complicated procedures that are best handled by an attorney who has previous experience representing clients involved in similar business litigation disputes. Ideally, you will already have established a relationship with an attorney before being sued. An attorney who you have a long-term relationship with and who is familiar with and understands the intricacies of your business will be better prepared to defend your company’s interests in court.
If you are not already affiliated with an attorney, make sure to hire legal counsel that has prior experience representing the specific issue you are being sued over. Speaking with an attorney’s past clients and soliciting attorney referrals from fellow colleagues and local bar associations can help ensure a suitable choice. Once you have identified an attorney to work with, he or she will in all likelihood ask you to sign a retainer. Once you have done that, you should begin reviewing and collecting the documents you and your attorney will need to defend against the allegations made against you in court and possibly also to bring counterclaims.
The first document you should review in preparation for your lawsuit is the summons and complaint that was delivered to you by the process server. The summons notifies the court of the upcoming lawsuit and the complaint lists the allegations made against you by the opposing party, the basis of the opposing party’s claim or claims, and the relief sought. Your attorney should also have a copy of these documents. Read the complaint and discuss its contents with your attorney. Once you have an understanding of what the lawsuit is about, begin collecting all relevant documents related to the lawsuit and begin making a list of people or witnesses who may also be involved. If possible you should make copies of all documents you collect and, in defining what is relevant, be exhaustive in your collection so as to include documents you believe may be only remotely related to the controversy that is the basis of the lawsuit. Once you have begun strategizing with your attorney and the process of collecting relevant documents, you are now prepared to develop your game plan for the next phases of the lawsuit.
(1) CPLR 321(a) provides in relevant part:
A party, other than one specified in section 1201 of this chapter, may prosecute or defend a civil action in person or by attorney, except that a corporation or voluntary association shall appear by attorney.