If you are served with a civil lawsuit, you will likely feel a range of emotion: anger, frustration, confusion, anxiety, and betrayal.
This is a critical period of time and it requires your full attention. Your next steps could win or lose the case. It is important that you act quickly and respond appropriately.
This article discusses 15 of the worst things that a Defendant can do if served with a civil lawsuit.
1. Doing Nothing.
This is the most common mistake and is generally fatal to a defense of the case. The Defendant may forget about it, lose track of the deadline, or simply choose not to respond.
A Defendant generally must serve an answer within 21 days. If he or she fails to do so, the Plaintiff can get a default judgment and collect on it. A Defendant has some ability to vacate a default judgment, but must have a good excuse for blowing the deadline. The Defendant should assume that if he or she misses the answer deadline, the case will be lost.
Sometimes, the Defendant believes that he or she is the wrong party, that service was improper, or that nothing will ever be collected. While these could be true, it usually makes sense to serve an answer to preserve any defenses.
When in doubt, the Defendant should provide an answer. If the Defendant hires an attorney, make sure the attorney knows when the Complaint was served.
2. Taking Revenge.
Sometimes, Defendants feel compelled to “get even” or seek revenge on the Plaintiff for starting a lawsuit. It may be a threat or assault on the Plaintiff, damage to property, making social media posts about the dispute, or other action.
Resist the temptation. A Defendant can put himself or herself in worse position by taking such action. Evidence of bad behavior could potentially be used at trial. This could hurt the person's credibility, and it may look bad in the eyes of a judge or jury. It also might harm the defenses or messaging that the defense attorney may try to use in the case. Additionally, attempts to intimidate or threaten witnesses might be considered a criminal offense.
If the goal is to preserve a defense to the case, then resist the temptation to use “self-help” remedies.
3. Hiding or Destroying Evidence.
Defendants are sometimes tempted to shred documents or destroy evidence in their possession that might harm their case. This action can backfire.
Generally, a Defendant must put a “litigation hold” on evidence in his or her possession when litigation appears likely. This is also called a "duty to preserve evidence". When a party fails to preserve evidence, “spoliation” occurs. Spoliation can result in sanctions against the party, including exclusion of evidence or default of the claim or defense.
Keep in mind that the Plaintiff could investigate the destruction of evidence by asking questions to the Defendant under oath at a later deposition. If the evidence is in electronic form, the Plaintiff might get a computer forensics expert to re-build the files to see what was deleted.
If the Plaintiff can show that the Defendant tried to destroy evidence, the Defendant will be in hot water. He or she may be sanctioned by the court. And, if this is presented at trial, it will be damaging to that party's credibility.
The better strategy is generally to follow the rules and preserve all evidence related to the dispute.
4. Hiding or Transferring Assets.
A similar problem occurs when the Defendant panics and shifts into “asset protection mode”. The Defendant may think he or she will lose the case, and the Plaintiff will try to collect on a judgment. The Defendant may transfer real estate to relative, wire money into a secret bank account, hide personal property, or otherwise put assets out of reach of a Plaintiff.
This strategy can backfire. As explained above, the Plaintiff will likely have the right to investigate these issues through discovery processes, including depositions and third-party subpoenas. There may be public records of the ownership rights to property, such as land, so such transfers may be easy to track. If the Plaintiff discovers these attempts, it can be damaging to the Defendant's credibility. It can also lead the Plaintiff to amend the complaint to bring civil claims for fraudulent transfers (a/k/a “voidable transfers”). The recipients of the transfer may then be sued, and such persons may be upset with the Defendant's action.
Likewise, these actions may also allow a Plaintiff to get a “prejudgment attachment” to freeze assets while the case is litigated. This would mean significant scrutiny over the Defendant's assets and may even lead a judge to order the assets placed in a third-party's custody pending a trial.
The takeaway is that if your actions are discovered, you will likely be in worse position to defend the case or later collection actions. Therefore, hiding or destroying assets is a risky strategy in response to a lawsuit.
5. Failing to Play Offense.
Many Defendants are not aware that they can bring “counterclaims” against the Plaintiff. If a Defendant can go on the offensive, it can make sense to do so.
A Defendant generally must bring all counterclaims he or she has against the Plaintiff in that same case. “Compulsory” counterclaims, which arise from the same transaction or set of facts, must be brought in the same case or are lost. “Permissive” counterclaims, which do not arise from the facts set forth in the Plaintiff's complaint, can be brought in a later or separate case. It can be difficult to see the difference in some cases When in doubt, a Defendant brings the counterclaim in the same case. As a practical matter, it can make sense to put all issues on the table for resolution at the same time.
“Playing offense” can be significant in certain cases. For example, if a Defendant is sued for breaching a contract, he or she may believe that the Plaintiff breached the contract first. As such, the Defendant should counterclaim for breach of contract. This may put the Plaintiff on the defensive and persuade the Plaintiff to consider a settlement or dismissal.
6. Speaking Without Thinking.
A Defendant may be tempted to fire off a quick response to the Plaintiff or Plaintiff's attorney after being served with the lawsuit. Or start posting something on social media about the dispute.
This can be short-sighted. A party's Answer or first written response to the opposing party can set the tone for the case. A Defendant should carefully consider his or her defenses and craft a coherent message. It helps to prioritize your best defenses and arguments.
Emails, texts, letters, and social media posts can be potential evidence in the case. If you don't want the judge or jury to see the “knee-jerk” reaction, don't post it. If you get an attorney, your posts may also limit the options, defenses, or messaging that the attorney could use to support your case.
The goal is usually to respond with a coherent, supportable message that the Defendant has a viable defense to the case. When in doubt, hold off on any inflammatory rants.
7. Yelling at Process Servers, Attorneys, or Court Staff.
Nobody likes to be sued and it is understandable for the Defendant to be frustrated. However, the Defendant should channel that energy toward a strong response to the Complaint, rather than at non-party participants.
It is unnecessary and often unhelpful to direct anger toward participants in the case. The process server is simply the “messenger” whose job is to make sure the documents are properly served. Sheriff Deputies commonly serve legal documents, and it is unhelpful to get aggressive with the deputy.
It can also be unhelpful to get aggressive with the opposing attorney. While the attorney's duty is to advocate for his or her client, the attorney is also assessing best options for the client. If you can persuade the opposing attorney that you are a reasonable person with a supportable legal position, the attorney may recommend it to the Plaintiff. Instead, if you appear crazy and without a legitimate legal position, the attorney may view your case as weaker. For instance, if credibility is a key issue in the case, the attorney may believe that a judge would discredit your testimony based on your rants to the attorney. Therefore, it can be helpful for the Defendant to present as a professional, credible person with a legitimate legal position. Burning the line of communication with the opposing party can limit your options.
Even if the Defendant is inclined to be harsh with the process server, attorney, or the Plaintiff, he or she should be extra careful to be nice to court staff. If you are rude to them, chances are that the judge may hear about it and it may hurt your credibility (and perhaps your case). Court staff includes judges, court reporters, judicial law clerks, court administrators, bailiffs, and others. You may need info from these court employees and may need their assistance in scheduling for the case. If so, do your best to keep the conversation cordial.
8. Not Seeing the Full Picture.
Some Defendants assume that the case will not affect them or is not worth fighting. In some cases, where the cost of defending the case is more than the case is worth, it may be true. But other times, Defendants may harm their long-term interests by failing to understand the long-term consequences of the case.
Most civil disputes and lawsuits involve money. The Plaintiff wants to get a judgment against a Defendant and collect on it. Sometimes, the Defendant is truly “judgment proof”, meaning that he or she has no assets that the Plaintiff can get to satisfy a judgment. In limited cases, a response might not be impactful.
While there are many “exemptions” that a judgment debtor can use to avoid losing certain assets to collection, these exemptions can be narrow. At the very least, it can be inconvenient to have to disclose your assets, financial information, income, taxes, and other information to a Plaintiff that gets a judgment. Also, there is the possibility that the judgment will show up on a credit report, which could make it harder for the person to get a future mortgage or loan. Further, judgments last for 10 years in Minnesota, and can be renewed. So while you might not have any assets now, the Plaintiff could try to collect at some point over the next 10-20 years. This can be a reason to try and resolve the issue up front.
Even if the Defendant is unlikely to win the case, it can still be useful to respond or to open a conversation with the Plaintiff. Perhaps the Defendant can negotiate a discount from the Plaintiff. Or maybe a professional response may preserve a future relationship with the Plaintiff or preserve the Defendant's reputation. Most cases are resolved by settlement, rather than by a judge or jury. It can be useful to try and resolve the dispute before it escalates further.
The bottom line is that the Defendant's long-term interests can sometimes be better served by an appropriate response to the Plaintiff.
9. Losing Track of the Answer Deadline.
Sometimes, a Defendant intends to respond to the Plaintiff's Complaint but loses track of the deadline. By the time a response is submitted, it is too late.
Usually, the Defendant must serve an answer within 21 days. If there is no timely response, the Plaintiff could potentially file for a default judgment. The court administrator could process it quickly and enter/docket a judgment. Therefore, a Defendant that is a few days late could already be faced with a judgment. While there is a procedure for “vacating” a default judgment, it is not a guarantee and it is not a position that a Defendant wants to be in.
Generally, there is a “Summons” served with the Complaint. The Summons has very basic instructions on what is being served and how to respond. The Summons usually states that an Answer must be served within 21 days of service. The Defendant should note when he or she was “served” with documents (generally when the process server hands them the documents). The Defendant can then calculate the deadline for a response. The Defendant should assume that he, she, or an attorney, will need time to investigate the allegations and draft an appropriate response. Thus, the Defendant has a relatively short period to serve an appropriate response, so he or she could keep close track of the deadline.
10. Failing to Ask for An Extension.
Sometimes, Defendants fail to serve a timely Answer or serve a rushed response with mistakes.
Nothing prevents the Defendant from asking the Plaintiff, Plaintiff's attorney, or the court for an extension to serve an Answer. People are busy and emergencies can come up in life. Extensions are often granted by opposing attorneys, so long as there is a need and the extension request is reasonable.
If the Defendant thinks the deadline will be a problem, the Defendant should ask for the extension soon. Waiting until the deadline, or after it, is risky. The Defendant should assume that an answer must be timely submitted.
The takeaway is that if the Defendant plans to serve a response and needs more time to do it, attempt to get an extension.
11. Failing to Investigate.
When responding to the Complaint, a Defendant's Answer must admit or deny each allegation. Sometimes a Defendant denies allegations on grounds that he or she lacks the information necessary to admit or deny.
However, a Defendant usually cannot deny every allegation on grounds that information is lacking. A Defendant has a basic duty to investigate the allegations in the Plaintiff's Complaint. This is not a high standard, and the investigation does not need to be exhaustive. Minnesota Rule of Civil Procedure 11.02 requires a person signing a pleading to certify several things, including that:
(c) the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery;
(d) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief[.]
Thus, one reason to investigate the allegations is because the rule requires it.
Another reason to investigate is to locate evidence that may be helpful for you, and to develop your best defenses early in the case. Similarly, a basic investigation may give you a basis to bring counterclaims or to sue third parties that may be responsible for the damages claimed by the Plaintiff.
12. Making Frivolous Denials to the Plaintiff's Complaint.
As noted above, a Defendant must admit or deny each allegation in the Plaintiff's Complaint. However, a Defendant must be careful to avoid frivolous denials of allegations that are clearly true.
The Defendant must answer each of the Plaintiff's allegations with an admission, denial, qualification, or statement that he or she has insufficient information to answer. A Defendant cannot generally make a “general denial” of all the Plaintiff's allegations.
The Defendant must instead go through the allegations carefully and explain what parts are being admitted or denied. Also, the Defendant must have some factual basis and perform a reasonable investigation to support any denials. Defendants are generally given latitude to deny allegations if the information is unknown or still needs to be developed. But, denying every allegation that is objectively true can be problematic for Defendants and their attorney.
While it is ok to force the Plaintiff to meet his or her burden of proof, be careful to fairly respond to the allegations in the Complaint.
13. Failing to Coordinate With Other Stakeholders.
Most parties prefer to keep their legal disputes private and confidential. It can also be necessary to keep conversations with a lawyer confidential.
However, in some circumstances it may be necessary to coordinate with other persons as part of a defense in the case. For example, perhaps you have insurance that will cover the Plaintiff's claimed damages and will assign an attorney for you. It may be necessary to give the insurer notice of the Plaintiff's claim, and the policy may require it. This can give the insurer a better opportunity to defend you.
Similarly, it may be useful to coordinate with business partners who are involved with the claim, guarantors that may ultimately be responsible for paying damages, creditors whose interests may be impacted, or others you have a contractual duty to inform of the issue. Since these can be sensitive issues, it may be important to speak with a lawyer to coordinate a proper defense with other stakeholders (and their attorneys).
14. Failing to Plead Affirmative Defenses.
In many cases, the Defendant relies on a “general” defense to the Plaintiff's claim. For example, the Defendant says that he didn't breach the contract. In such a case, the Defendant doesn't generally need to plead anything too special. He can simply deny the allegations and make the Plaintiff prove the claim.
However, some cases involve special defenses called “affirmative defenses". These are fairly common. For example, a breach-of-contract Defendant might argue that there was no valid contract (lack of consideration) or that the Plaintiff waived any right to claim damages (waiver or estoppel). These are affirmative defenses that a Defendant must include in the Answer.
The Defendant has the burden of proof on affirmative defenses, but if proved the Defendant can win the case. The attorney must look to statutes, rules, and cases to understand what types of defenses are “affirmative defenses". You can usually waive the irrelevant ones later in the case, so the Defendant should err on the side of asserting too many affirmative defenses in your Answer. This can preserve defenses the Defendant wishes to assert at trial.
15. Not Speaking to A Lawyer.
Perhaps the biggest mistake by Defendants is not seeking timely advice from a lawyer. It can be hard for non-lawyers to spot technical legal issues.
At the very least, a consultation with a lawyer can help spot some of these legal issues and generate some options for the Defendant. If the Defendant is a corporation, any pleadings and court documents will need to be signed by a licensed attorney.
If the Defendant hires the lawyer, the lawyer can use his or her expertise to draft a proper Answer and carry the Defendant to an outcome in the case. The attorney should speak with the client about the potential costs of the representation relative to the benefits of defending the case. That may help determine the best path forward for the Defendant.
So while the Defendant might ultimately choose not to hire an attorney, it can still be useful to have a consultation and better understand the risks and benefits.
The period after being served with a Complaint is a critical time for a Defendant. He or she must proceed quickly, carefully, and in a disciplined fashion. Any of the mistakes discussed in this article could harm the Defendant's case.
By responding appropriately, the Defendant preserves the right to defend against the Plaintiff and can maximize his or her options.
If you need legal advice or representation on a civil dispute, Contact Us for a free consultation. With offices in Shakopee (Scott County) and Litchfield (Meeker County), we serve clients throughout the Twin Cities and Greater Minnesota.