By Attorney Edward Jesson - Updated 2/29/2024 (Originally Published 3/27/2019)
People and businesses get sued every day, and while no one enjoys being on the receiving end of a lawsuit, there are certain things that should be done to try and make the experience as painless as possible. In North Carolina, a lawsuit is generally started when an individual or a business (also called the “plaintiff”) files a complaint. The clerk of court issues a summons, which must be served on the defendant (the party being sued). This can generally be done by mailing it certified mail, return receipt requested, sending via FedEx or UPS, or having the county sheriff personally deliver a copy of the summons and complaint.
Once the summons and complaint have been served, the defendant has 30 days to respond to the complaint in district and superior courts. In small claims court, when a defendant is served (in some instances this can be achieved by the sheriff leaving a copy of the complaint taped to the front door), they will usually receive a notice of hearing along with the complaint.
Here is the first point that I would like to make clear: if you are served with a lawsuit, please do not wait until day 29 to contact an attorney. Evaluating your position as a defendant in a lawsuit and preparing the correct response takes time. While you can usually get a 30-day extension of time to respond, doing so at the last minute is not always possible, and the extension likely won’t be granted if it is after day 30. If you fail to respond to the complaint in time, the plaintiff may be entitled to a default judgment. It is exactly what it sounds like— they will automatically win “by default”! A default judgment can be hard to overcome once it is entered, and the excuse that you simply “forgot” to respond is usually not enough.
Point number two: Do not answer the complaint without first consulting with an attorney. In an answer, you will generally just admit or deny the allegations to the complaint, but that is not the only response that is available. There are several ways that you may be able to get the lawsuit dismissed (meaning the case is thrown out), but that option is not available if you admit or deny allegations in the answer first. By doing that yourself, you may be preventing an attorney from later dismissing the lawsuit.
For most people who are sued, it is for the first time in their lives (and hopefully the only time). Once the shock, confusion, and anger has worn off, it is important not to bury your head in the sand. Contact a litigation attorney who can help you navigate through the civil system and, hopefully, get your case resolved in the most efficient way possible. If done correctly, you may save a lot of money; however, trying to handle it yourself oftentimes results in the expenditure of more money. If you or anyone you know has been sued, please give the attorneys at Jesson & Rains a call.
By Shayla Martin
We are thrilled to announce the new licensure of attorney Katheryn “Katy” Currie in the state of South Carolina. Katy initially joined our team in November of 2022 with licenses in North Carolina as well as Alabama. Katy has been a dedicated and passionate advocate for her clients for several years, and her expansion into South Carolina is a testament to her commitment to providing exceptional legal services. Her experience and expertise in various areas of the law, including probate administration, estate planning, and business transactions, will undoubtedly benefit individuals and businesses throughout South Carolina.
Along with Katy, our experienced legal team is ready to assist with probate matters, guiding you through the complexities of estate administration and ensuring the smooth transfer of assets to beneficiaries after the death of a loved one. Our estate planning services include wills, trusts, powers of attorneys, and advanced directives, ensuring that your assets are protected and your wishes are honored. Finally, for businesses in South Carolina, we offer a wide range of legal services, including contract drafting, business formation, and more. We're here to help you navigate the complexities of the business world while protecting your interests.
Coming Soon: South Carolina construction and litigation services. We’re also happy to announce that partner Edward Jesson passed the South Carolina bar this fall and is expected to be licensed in SC early next year.
By Attorney Edward Jesson
On January 5, 2023, the Federal Trade Commission (“FTC”) proposed a rule that would, with limited exceptions, bar employers from using non-compete agreement and would further require the rescission of existing non-compete agreements that were in place prior to the implementation of the FTC’s rule.
The FTC’s proposed ban is limited to “pure” non-compete agreements and would likely not apply to customer/employee non-solicitation agreements or others contained in non-employment contracts, such as business sale contracts. It appears as though, from the FTC’s language, that the rule would apply to all employees and all independent contractors.
While the FTC initially intended to make a final decision on the rule at some time in 2023, due to the overwhelming number of comments the agency received during the public comment period (nearly 27,000 comments) it appears as though the FTC will not be making a final decision until sometime in April 2024. Even if the rule is implemented, it is highly likely that the blanket ban on non-compete agreements would be challenged in courts throughout the country.
While North Carolina has not banned non-compete agreements, its courts strongly disfavor non-compete agreements unless they are narrowly tailored and the North Carolina Court system’s treatment of non-competes is constantly evolving. North Carolina’s treatment of non-compete agreements, as well as the FTC’s proposed ban, are both good indicators of how courts throughout the country are trending in their interpretation of such restrictive covenants.
If you think the FTC proposal may affect your business, or you have another non-compete related issue, the attorneys at Jesson & Rains stand ready to assist.
By Attorney Kelly Jesson
There are numerous to-do items and deadlines business owners must keep up with to successfully run a business. However, many business owners forget that they must file an Annual Report with the North Carolina Secretary of State to keep their business in active and good standing with the state.
The Annual Report is used to keep the business records up to date with the Secretary of State. On the Annual Report, you will provide basic information about your business, such as the name and address of the registered agent, the principal address of the business, and the names and signatures of company officials. Most businesses formalized with the Secretary of State’s Office need to file an Annual Report, such as Business Corporations, Limited Liability Companies (LLC), Limited Liability Partnerships (LLP), and Limited Liability Limited Partnerships (LLLP). Non-Profits, Limited Partnerships, Professional Corporations (PCs), and Professional Limited Liability Companies (PLLC’s) do not have to file an Annual Report. There is also a filing fee due with the Annual Report. For LLC’s and partnerships, the fee is $200, and for corporations, the fee is $25.
The due date for your business’s annual report depends upon the type of business, but generally April 15th is the deadline for most businesses. For corporations and partnerships (LLP and LLLP), the annual report is due to the Secretary of State’s Office the 15th day of the fourth month following the entity’s fiscal year’s end. For example, if your fiscal year ends on December 31, your annual report for that year is due on April 15th.
Jesson & Rains offers a yearly plan for businesses that includes serving as our client’s registered agent and filing their annual report, among other things. This plan helps to ensure your privacy (if your business is ever sued, the lawsuit will be delivered to our office’s address); you will be less likely to fall victim to a scam (we will sort through and destroy junk mail); you will be more organized and have less paper (we will scan and forward your mail immediately to your attention after sorting); and we will ensure that corporate records and Secretary of State records are kept up to date.
We also offer an upgraded yearly plan that includes unlimited telephone access to attorneys throughout the year.
The consequence for not filing an Annual Report and/or paying the fee is that the Secretary of State can administratively dissolve your business. This means that you will lose the liability protection you enjoy by being a formal business, and a creditor can come after your personal assets. If you have questions about filing your Annual Report or want to learn more about the annual plan services offered by our firm, you can click HERE, or feel free to reach out to Jesson & Rains directly!
By Associate Attorney Danielle Nodar
Branding your business helps set it apart from your competitors and keeps it present in the minds of consumers. To protect that brand, a business can obtain a trademark that essentially puts the world on notice that you are the owner of the specific mark. A trademark is a “word, phrase, symbol and/or design” that identifies and distinguishes the goods or services of the owner of the mark from another party. Examples of these marks include brand names, slogans, tag lines, logos, and design elements (think, Tiffany blue boxes).
To get a federal registered trademark, the mark must be used in commerce, so normally the owner of the mark is a business. An application can be filed before the mark is used in commerce if the owner intends to use it in commerce, but the United States Patent and Trademark Office (“USPTO”) will not register the trademark until the applicant shows that it is actually being used. A benefit of a trademark is that they do not expire, so long as the mark continues to be used in commerce and the owner files periodic documentation with the USPTO.
The trademark application process is fairly simple, so oftentimes non-lawyer business owners will attempt it themselves, but actually obtaining the registered trademark can be tricky. Applications can be denied for a variety of reasons, such as the mark being “merely descriptive” of the goods or services it applies to, or a mark being considered too similar to an existing trademark in a similar industry (a “likelihood of confusion” according to the USPTO). The strongest trademarks are “fanciful and arbitrary,” meaning they are words that have no relation to the good or service sold (like Apple computers), and the second strongest trademarks are “suggestive” meaning they suggest the good or service without literally describing it (think, Facebook). Unfortunately, most people name their businesses something that describes their goods and services for marketing purposes (for example, “Northwest Construction”), so trademark registration may not possible. Exceptions to this rule are well-known businesses or those that have been in business for many years.
A business can have a common law trademark (indicated by the ™ symbol instead of the ® symbol) without registering it with the USPTO just by using the mark in commerce, but there are benefits to federally registering. Inclusion in the national database deters others from using similar marks in similar industries. Also, there is a legal presumption that registrant was the first to use it, meaning that in a dispute with another business, it would be presumed to be the winner. Damages would also be presumed. A drawback to a common law trademark is that it is limited in geographic area, so you could have a competitor business open up with the same name in an entirely different state, as long as you did not share customers. If a competitor opens in your geographic area, and you sue them for common law trademark infringement, you would have to prove that they did damage to your mark and that you were the first to use the mark.
If you’re thinking of protecting an element of your brand with a trademark, give Jesson & Rains a call!
By Attorney Kelly Jesson
October is National Women’s Small Business Month. Jesson & Rains is proud to represent and work for numerous women-owned businesses.
Charlotte is an exciting place for women entrepreneurs. As we previously reported, in 2018, it was named the “#1 City in America for Female-Owned Business Growth.” Women-owned business growth continued across the country in 2019. Unfortunately, due to the pandemic, Barbara Weltman reports that the number of women-owned businesses fell by 25% from February to April 2020. However, there are plenty of indications that women entrepreneurship is back on the rise.
Participation in women’s networking groups and trade associations is key. Attorneys Kelly Jesson and Danielle Nodar are members of the following groups: National Association of Women Business Owners (NAWBO), Women Lawyers of Charlotte, National Association of Women in Construction (NAWIC), and Women in Networking. Please reach out to Kelly or Danielle if you’d like to drop in on a meeting one day!
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