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.