Litigation Primer: What to Expect When You or Your Company Faces Litigation Part I: The Early Stages of Litigation

Having worked as a litigator for over twenty years, I have noticed that most clients are unprepared when they become involved in litigation.  This is true regardless of whether the client is the plaintiff (who can choose whether the dispute is one worth litigating over but may not fully grasp what litigation entails), or the defendant (who may have been pulled into litigation it never anticipated and certainly doesn’t want).  And it is true regardless of whether the client is an individual or a company, and regardless of whether the client has been involved in litigation previously or whether this is its first litigation experience.

Although every legal dispute is different, this multi-part article will address some of the common elements of all civil litigation.  This Part I will address the early stages of litigation.  Part II will address discovery.  Part III will address motions practice, trial and appeal.  Finally, Part IV will discuss some of the painful realities of litigation, as well as some strategies for litigation avoidance.

1.  Pre-Litigation Rumblings.

Defendants often tell me that they “didn’t see the litigation coming.”  Although that may be true, in hindsight there are often signs of discontent that the client may either not recognize or choose to ignore.  These signs can be in the form of changes in attitude at work (if the disgruntled party is a co-worker or employee of the defendant), telephone calls, emails or formal letters.  A formal letter sent by certified mail or overnight delivery may register complaints about the defendant company’s performance.  Such a communication may instruct the defendant to alter its conduct; finish performing under a written agreement; pay money damages allegedly incurred by the plaintiff as a result of the defendant’s conduct; or take some other action specified by the plaintiff.  Simply ignoring the communication is unwise.  While there may be strategic reasons not to respond, the plaintiff’s allegations should be discussed with counsel, who can assist the client in assessing the level of risk associated with the allegations.  Counsel can also assist the client in implementing any changes that may be appropriate responses to the allegations and in identifying and gathering documents (including emails) that may support a defense to the allegations.

Sometimes the allegations are such that a brief written response, or even a telephone call, can resolve a misunderstanding and prevent litigation.  In such a situation, a failure to respond may escalate the dispute and result in avoidable litigation, causing the parties to incur unnecessary legal fees.  A classic example is a demand for payment of a bill that the client has already paid.  Ignoring the demand may prompt the party trying to collect to file a lawsuit.  Even though the lawsuit will have no merit, the client will still incur attorney’s fees to defend itself.  In contrast, responding to the demand with a copy of the cancelled check proving that the bill has already been paid may head off the lawsuit.

Another example of a letter that probably should be answered is a letter from a former employer of the client – or a former employer of a corporate client’s current employee – in which the former employer warns the employee not to violate restrictions in an employment agreement the employee signed while still working for the previous employer.  If the restrictions are not enforceable, a letter from counsel explaining that the restrictions are not enforceable may deter litigation.  If the restrictions are enforceable, advice from counsel to discontinue conduct that violates the restrictions may satisfy the former employer and head off litigation.

2.  Litigation Commences.

       a.      Filing and Service of Complaint

 After efforts at a resolution have failed or been abandoned, the plaintiff may file a lawsuit and arrange to have it served on the defendant.  The complaint (specifying what the defendant is accused of doing wrong) will be accompanied by a summons (formally notifying the defendant that it has been “summoned” to court and specifying how much time the defendant has to file an answer with the court).

If the defendant is a company, the summons and complaint usually will be delivered to (“served on”) either the registered agent for service of process or a company officer.  In some circumstances, service can be accomplished by delivery simply to a lower ranking employee of the company.  Because of this possibility, a company should not disregard a summons and complaint simply because it was delivered to someone who was neither a corporate officer nor the designated registered agent for the company.  Some states even allow service to be accomplished by certified mail in certain circumstances.  Again, ignoring a summons and complaint, regardless of how it arrives, is dangerous.  Counsel should be consulted for help creating a system ensuring that any papers that may be related to a lawsuit are timely sent to counsel for a response.

If the defendant is an individual, many states permit the summons and complaint to be delivered to an adult member of the defendant’s household.  Again, it is risky to ignore a summons and complaint, regardless of how it arrives.  Counsel should be consulted to determine whether service has been accomplished in accordance with applicable law.  Counsel can also advise on the best way to challenge any methods of service that raise questions under applicable law. 

      b.      Responding to the Complaint 

Once service has been accomplished, even if there are questions as to whether service was proper under applicable law, the defendant must file an answer or other defensive pleading within the deadline specified in the summons.  In Georgia, this deadline is generally 30 days in the state court system and 20 days in the federal court system, but it is critical that the defendant comply with the deadline set forth on the summons even if the number of days differs from what is stated in this article.

Counsel should be consulted as soon as possible once the lawsuit has been served, so that the defendant will have plenty of time to prepare and file an appropriate and timely answer to the complaint.  The answer to the complaint is the defendant’s chance to state in writing all of the reasons the plaintiff should not win the lawsuit.  The defendant should list all of the defenses he or she can identify.  The defendant should also deny any statements in the complaint that are not true.  By doing this, the defendant identifies both the facts on which the parties can agree and also all of the facts and issues that the parties dispute.  This allows the parties and the court to begin narrowing the list of what the parties are arguing over.

Failure to file a timely answer or other defensive pleading will result in entry of default against the defendant.  Entry of default means that the defendant is found to be liable for whatever the plaintiff has alleged in the complaint.  If the amount of damages sought is spelled out clearly in the complaint, then a judgment for that amount can be entered against the defendant without further litigation and often without the defendant having a right to appeal the judgment.  If the amount of damages sought is not spelled out clearly in the complaint, but instead will have to be proven, the amount of the damages will be the only issue remaining for a trial.

Once a timely answer has been filed, the lawsuit will enter the discovery – information gathering – phase.  That will be the subject of the next article in this series.

The analysis set forth in this article is provided for general understanding only and should not be considered legal advice.  Counsel should always be consulted for advice regarding a specific legal dispute.  Please contact The Myer Law Firm if you are in need of litigation counsel.

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