By Attorney Edward Jesson
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 snow. 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.
In our second installment of Meet Our Team Members, we are interviewing Ed Jesson.
Q: Most of our readers probably know that you and Kelly are both partners in the Jesson & Rains firm, but many of them might not know that you are originally from England.
Ed: If they haven’t heard me talk! (laughs)
Q: What do you miss most about England? And what brought you here to the United States?
Ed: I miss a lot of things--family and the sheer amount of Indian food to name a couple--but I’m certainly very happy over here in the US, too. England and the US are very similar in a lot of ways. I moved over to attend college as I didn’t really know what I wanted to do at university back home. In England, you have to pick your college major while you’re still in high school, and once you do, you’re kind of locked in. My best friend was from the US and moved back after high school in England and told me about how great US colleges are with the ability to take your time to pick a major. I thought that was a good fit for me, and here I am!
Q: So have you always wanted to be a lawyer? What did you eventually choose as your major in college?
Ed: No, I was a sports and entertainment management major at the University of South Carolina and I wanted to work in that industry. It was after working with and getting to know the general counsel at Speedway Motorsports during an internship that my interest in the law was really piqued.
Q: What does your family think of your job as a lawyer?
Ed: My family is very proud of what Kelly and I are building at Jesson & Rains (or at least that’s what they tell me). My dad was a lawyer (solicitor) back home in England. While our practices are completely different, it’s always interesting talking to him about the differences in US v. English practice.
Q: Your focus in practicing law is construction litigation. What qualities does an effective litigation lawyer have?
Ed: In litigation, I think being able to see both sides of the argument is a very valuable skill. It allows you to try and see where the other side is coming from and hopefully help the parties reach an understanding that everyone can live with.
Q: What are your future plans? Where do you see the firm heading in the next couple of years?
Ed: Our firm is still relatively new. We’re in our third year, but Kelly and I definitely are excited to continue to grow and foster good relationships with our clients and others in the local legal community.
Q: What is your favorite type of food?
Ed: Indian food, hands down. The town I grew up in had a population of around 10,000 people and had at least 4 Indian restaurants when I was still living there. Indian take out is England's equivalent of Chinese takeout.
Q: What do you like to do outside of work?
Ed: I’m quite an outdoorsy person. I train pointing dogs, and I like to hunt and fish. People generally don’t expect that from an Englishman.
Q: Do you have any dogs?
Ed: We have two: Jeffrey and Tramp. Jeff is a Pointer. We got him as a rescue when he was 1 and he’s really given me the pointing dog “bug”. We’re getting another pointer this fall, and I’m excited to start training a puppy. Tramp is a border terrier mix and is definitely Kelly’s baby…he doesn’t hunt but he’s fun to have around the house! (laughs)
No one ever wants it to happen, but it happens. The mailman asks you to sign for certified mail, or, even worse, a sheriff’s deputy shows up on your doorstep and “serves” you. Once the dust settles you are left with a summons and complaint, which are the documents showing that someone has sued you. Furthermore, because you signed for the documents when the USPS dropped them off, or because the sheriff’s deputy personally handed them to you, the person suing you (the “Plaintiff”) knows that you received them.
What to do next? The answer is not to ignore these papers! The clock is now ticking.
Under the North Carolina Rules of Civil Procedure, you have 30 days to respond to a lawsuit (whether that response is an “answer,” “motion for extension of time to respond”, “motion to dismiss the lawsuit” or otherwise). If you do not respond to the lawsuit in any way within 30 days, then the Plaintiff has the option to pursue a default judgment against you. A default judgment is a court order granting judgment in the Plaintiff’s favor because you failed to respond. It is the same as a regular judgment, just as if you had gone to trial and lost. You now owe the Plaintiff money. By ignoring these legal papers, you have waived your ability to present any valid defenses to the Plaintiff’s case.
The first step in obtaining a default judgment is to obtain an entry of default from the clerk of court. The clerk (or judge) will look at the court’s records and any affidavits provided by the party seeking a default in deciding whether to enter default. The most important effect of the entry of default is that all allegations in the Plaintiff’s complaint are deemed admitted.
The second step is to obtain a default judgment. The party moving for a default judgment must show the court that complaint and summons were properly served on the defaulting party and that personal jurisdiction exists.
In certain instances, a default judgment can be granted by the clerk without the need for a hearing, but in most cases an evidentiary hearing in front a judge will be required before awarding an amount of damages. Further, the court may not award punitive damages by way of a default judgment.
If you mistakenly fail to respond to a lawsuit, there are ways to set aside the entry of default and/or a default judgment, though it is not certainly not guaranteed that you will be successful. To set aside an entry of default, you need to show the court that there is “good cause shown” for you to fail to respond to the complaint. The North Carolina Rules of Civil Procedure also provide a procedure to have a default judgment set aside, but again, you are only able to do so under a limited set of circumstances. Of course, to set aside a default judgment you must show that there was mistake, excusable neglect, fraud, or other extenuating circumstances. If you received a copy of the summons and complaint but simply ignored the lawsuit, the default judgment will not be set aside.
Because there is no guarantee that a court will set aside an entry of default or default judgment, especially if legal papers are intentionally ignored, if you receive a summons and complaint, be it in the mail or personally delivered to you, the best course of action is to contact a
litigation attorney, like Edward Jesson at Jesson & Rains, who can guide you through the process and make sure to avoid any issues with defaults. If you learn that a default judgment has been entered against you or your business, and you believe you have never been served with any legal papers, please contact Jesson & Rains at once.
Litigation happens. We believe it’s beneficial to all parties involved to amicably resolve disputes before getting the courts involved; but sometimes that just isn’t possible. Litigation costs can be wildly unpredictable, vary on a case by case basis, and can add up quickly.
Take two similar cases: In “Case 1,” the case moves quickly towards trial but resolves early at mediation. In “Case 2,” the case moves slowly through discovery, with all parties objecting to the other party’s discovery requests; there is a day-long mediation where the case doesn’t settle; there are complicated issues of law to be researched and argued before the Court; and then a costly trial. It is obvious that “Case 2” would cost more money; however, what is not always obvious in the beginning is whether a case is going to follow “Case 1” or “Case 2”’s path. We try our best to estimate costs for our clients and be honest (sometimes brutally) about potential cost, but a lot of the cost depends on your opposing party.
For our business clients, and in some limited circumstances, individuals, there may be a cheaper and more predictable way: Alternative Dispute Resolution (“ADR”). ADR has been around for a long time and can be contractually mandated between the parties, usually in the form of mediation and/or arbitration. Mediation is when a neutral third party goes back and forth between the parties in an attempt to negotiate a compromise. Arbitration is a middle ground between mediation and a lawsuit. The parties present their evidence to a neutral third party who will decide the case; however, arbitration is generally far less formal than a lawsuit and costs less time and money because there are no motions filed or discovery exchanged between the parties.
There are other advantages to just saving time and money. For example, disputes that a business may not want made public (which would be a matter of public record should litigation ensue) can be resolved in a confidential nature through ADR. Where ADR really shines is in the resolution of complex disputes, like a complex breach of contract dispute or complex construction defect case. Using ADR, the parties can select an expert in the field to act as the arbitrator or mediator, instead of relying on a jury of average people who likely would not have the necessary specialist knowledge to properly decide your case.
However, businesses should be careful about blindly throwing in arbitration clauses into their contracts without first consulting an attorney. If the arbitration clause in your contract is not enforceable, then you will end up in litigation anyway. For example, there have been many lawsuits filed recently regarding the Samsung “exploding” phones. People who have been injured when the Samsung phones spontaneously combust are finding that, when they file the lawsuit, Samsung is filing a motion to dismiss the case because there is an arbitration clause contained within the phone’s warranty guide. While the consumer has 30 days to opt out of that provision after buying the phone, the majority of people do not do so because they do not know about it! Further, pursuant to the contract, the proceedings between the consumer and Samsung are secret, Samsung has the right to choose the arbitrator, and, if Samsung wins, the consumer may be required to pay Samsung’s costly legal fees.
Seems like a great deal for Samsung, right? However, In January of 2017, a federal appeals court in California ruled that the arbitration clause did not comply with California law and, therefore, the consumers were not bound by the clause. There have been many other cases in recent history where Courts have refused to enforce arbitration clauses against consumers. Frequently, the Court’s reasoning is that the clauses are hidden among other terms (so the consumer is “tricked”), not negotiable, and unfair.
The takeaway from all of this should be that, while ADR is a useful tool to move cases towards a quick and often relatively cheap resolution, the arbitration clause needs to be enforceable. Litigating the issue of whether an arbitration clause is enforceable can be extremely costly. Make sure to consult an attorney who can check to ensure that your arbitration clause is enforceable in the states in which you do business.
Almost everyone has heard of the phrase “double jeopardy” and knows that it means a criminal defendant may only be tried once for a crime. It he is found not guilty, the government cannot try him again for the same offense.
But did you know that the civil justice system has something like “double jeopardy” and it is even more stringent in civil cases? Two similar principles called res judicata and collateral estoppel will prevent you, as a plaintiff, from suing someone for the same claim more than once or even filing a different claim with the same underlying issue as the first case. Also, you cannot sue someone a second time for a completely new issue if you could have included it in the first lawsuit but did not.
Generally, this means that if you were wronged and you file a lawsuit, and if it is dismissed with prejudice by the Court, you cannot refile the same lawsuit or a lawsuit involving the same underlying facts.
For example, let’s say your neighbor’s dead tree fell onto your property, hitting your car and your pet, killing him. You file a lawsuit seeking compensation for your pet. You believe your insurance company will reimburse you for the car. The court dismisses the lawsuit because it found that the tree falling was an act of God and your neighbor was not negligent. Later, you find out that the neighbor knew the tree was dead and had been advised by a tree expert that it was going to fall within the next month. You believe that your neighbor was negligent. Your insurance company does not reimburse you for your car. You file a lawsuit seeking money to compensate you for damage to your car. More than likely, you will be barred from filing that lawsuit. Even though you are seeking money for different damages and because you have new information that may prove your neighbor was at fault, the court has already made a decision that your neighbor was not negligent. You do not get to relitigate the case.
There are many lessons to be learned. First, you should not rush into a lawsuit. You should wait and file the lawsuit after you’ve gathered as much information as possible because if you learn of new information after the case has been dismissed, you’re out of luck. It is very rare that a court will allow a second lawsuit due to newly discovered evidence. However, also be aware of statutes of limitations (limits on the time you can file the claims – normally, about three years).
Second, you should really consider hiring an attorney. A lot of people try to file lawsuits on their own, especially in small claims court, if the money damages sought are not very high. However, if you attempt to navigate the legal system on your own and are unsuccessful, you will not get a second bite at the apple. An attorney can help you with the fact gathering before filing a lawsuit and with identifying all potential claims to make sure they’re all included with the first lawsuit.
Finally, you should not underestimate your opponent. You may quickly file a lawsuit, thinking it is an open and shut case, there’s no way you’re going to lose, and be completely unprepared when the defendant shows up with an attorney who swiftly and successfully gets the case dismissed. You may be blindsided, and there’s nothing you can do about it if it is dismissed with prejudice. A lot of “pro se” plaintiffs (meaning, without an attorney) do not know to ask the court to dismiss a claim “without prejudice” and with leave to amend the complaint, which would allow them to refile the case.
This blog article serves as a cautionary tale for people who try to navigate the system on their own. A lot of people are successful, but for those who are not, it comes at a price. Not only do they lose that particular case, but they may lose their right to bring additional claims or issues before the court in the future.
If you are currently involved with a dispute and are considering filing a lawsuit, please consult with an attorney before doing so, so that you do not unknowingly waive your right to bring claims in the future.
“One size fits all” is the wrong approach to take when dealing with estate planning and business documents. And when you purchase legal forms from the internet, that is exactly what you are getting. For estate planning, no person’s circumstances and wishes is going to be identical to the next. For businesses, while forming the LLC or incorporating may be simply accomplished by using the Secretary of State’s forms (no need to even use RocketLawyer, here, for example), what about the other documents that you may need to go with it? We’ve talked about the importance of operating agreements before. Those are absolutely not one-size-fits-all.
Here are some risks:
1) The document may not be valid at all. I have personally had a client bring me a form he purchased online that was advertised as North Carolina-specific that was NOT valid in North Carolina. He wasted money on that form and then paid me to re-do it, when it could have been done correctly the first time. Attorneys oftentimes say, “Pay us a few hundred dollars now to do it right the first time or a few thousand dollars later to fix it.”
2) While valid, the document may not be the best. Admittedly, the online legal form websites sell forms that are likely valid. They put just enough stuff in there to make them valid. However, they leave out state-specific clauses and references to statutes that may save you and your family or business tremendous time and money in the future. Here are some examples:
a. Attorney’s fees provisions. In North Carolina, these are only valid in some types of contracts and only if reciprocal. Without these clauses, you could be out thousands of dollars if a dispute arises. Or, you could have a false sense of security thinking you will be entitled to attorney’s fees if a dispute arises, only to find out that your type of contract or the way the clause is written does not allow for attorney’s fees.
b. Leases. Did you know that if a tenant breaches a lease, other than for non-payment of rent, you cannot evict the tenant unless the lease specifically provides for such? This has happened to a client of ours – the lease did not provide for it, and he was stuck with that tenant. Also, you can put language in a lease that waives notice requirements prior to evicting them. Online form leases do not contain this language.
c. Wills. We have already discussed the very important language that can be included in a will that will save your executor time, money, and stress when they are handling your estate. It goes without saying, the only way to ensure that your last wishes are accomplished is to hire an attorney. There’s no way of knowing if you use an online form. I have spoken to attorneys who litigate estate cases (after someone has died, for example contesting a will on behalf of a beneficiary, or just asking the court for guidance in interpreting a will) and their business is booming thanks to online legal forms.
d. State laws are different. North Carolina treats non-compete clauses and forum selection clauses differently from Florida, for example. Laws are created by the courts, too. A legal form website is not going to be current on courts’ interpretations of a state’s statutes. Just take a look at LegalZoom’s terms of service: “. . . LegalZoom cannot guarantee that all of the information on the Site or Applications is completely current. The law is different from jurisdiction to jurisdiction, and may be subject to interpretation by different courts. The law is a personal matter, and no general information or legal tool like the kind LegalZoom provides can fit every circumstance. Furthermore, the legal information contained on the Site and Applications is not legal advice and is not guaranteed to be correct, complete or up-to-date. Therefore, if you need legal advice for your specific problem, or if your specific problem is too complex to be addressed by our tools, you should consult a licensed attorney in your area.”
3) While valid, the document may be worse than not having one at all. You may leave language in an online form that actually puts you in a worse position. A business owner may do something that puts him personally liable for the business. The devil is in the details. In a case out of Canada, a poorly placed comma cost a business nearly $1,000,000.
4) No attorney-client relationship. By having personal interaction with an attorney, the attorney can draw information out of you that is important that you did not know was important. As a layperson, you don’t know what you don’t know – and that’s what you pay an attorney for. Hopefully you develop a long-term relationship with your attorney. You can continue to seek advice from someone who knows the ins and outs of your business or knows your family. On a different note, an attorney is a fiduciary who owes a duty to you. If they do something incorrectly which costs you money, you can sue the attorney for malpractice. You cannot do this with online legal forms.
As simple as your legal issue may seem, there is value in consulting with an attorney. The document itself, in my opinion, is free.
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