ProSpeak

What to Do if Your Company Is Sued
Oct 5, 2017
William A. Ramsey, attorney, Barrett McNagny
ProSpeak

The Lawsuit

Your company, a business built through the labor and ingenuity of you and others, has been sued. You probably learned of the lawsuit when you received a Summons and Complaint. The Summons likely states that you must respond to the Complaint within twenty or twenty-three days. The Complaint likely recites various allegations against your company and perhaps other entities. Whatever the plaintiff is claiming, at the end of the Complaint you will see a request for some sort of relief, likely monetary damages. Receiving notice of a lawsuit can trigger many emotions such as anxiety, fear or anger. Receiving this notice should – and for the good of your company must – trigger action. 

Contact an Attorney and your Insurance Company

The two most important things you should do after hearing you are sued are: 1) contact your insurance company; and 2) if there is any chance that the allegations in the lawsuit will not be covered by an insurance policy, contact a lawyer. If your company has purchased an insurance policy that covers the type of claim made against your company, your insurance company should hire an attorney who will represent your company and defend it. If your company does not have insurance that covers the type of allegations made in the Complaint, you should, contact an attorney with experience in litigation. 

Do Not Ignore the Complaint 

Once a Complaint is on file, ignoring the problem and hoping the dispute will blow over is no longer a viable option. Indiana’s Trial Rules contain strict deadlines for responding to Complaints and dictate the form of a response. Failure to respond timely and in accordance with the Trial Rules can lead to a default judgment and ultimately, a money judgment against your company. This judgment, even if based on facts that you believe are false or incomplete, is enforceable, and it may be too late, even with a lawyer’s assistance, to undo the judgment and successfully argue that the plaintiff’s claims lack merit. 

Do Not Attempt to Represent Your Company Yourself  

Indiana law generally prohibits individuals who are not attorneys from appearing in Court and representing a corporation or limited liability company. The law provides a narrow exception for matters filed in Small Claims Court involving less than $1,500. For other lawsuits, however, attempting to represent your company in court would constitute the unauthorized practice of law. The main reason for this rule is that the law considers corporations and LLCs to be separate entities from the individuals who own them. By appearing in Court on behalf of the company, you would be representing a different person and acting as if you were a licensed attorney. The Judge will not allow such representation. Therefore, attempting to represent your company yourself is almost as bad as ignoring the Complaint, and can lead to a default judgment. 

Take the Complaint Seriously 

Whoever filed a lawsuit against your company takes the matter seriously. You should, too. Contact a litigation attorney right away and protect the company you worked so hard to build.

 
Barrett McNagny

Phone: (260) 423-8824,

Email: war@barrettlaw.com

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