You have just been visited by a Deputy Sherriff. The Deputy hands you a packet of documents. The first document in the packet is a yellow sheet of paper with a heading that says it is a “Civil Summons.” The Civil Summons states, in bold letters, “You Have Been Sued!”
Or perhaps you received the packet from Federal Express or
a similar delivery service, or from the post office after it notified you that you had some certified mail to pick up. The packet, with the Civil Summons, means that a person or business has served a lawsuit on you that has been filed in one of our state courts. Now what?
Erroneous Reasons Why People Ignore Lawsuits
Receiving a lawsuit is often quite upsetting. Many people have no idea how to respond, or even if they should respond. Many people believe the lawsuit can be ignored – after all, isn’t it like a bill from a creditor? Some people justify ignoring the lawsuit by reasoning:
- I haven’t done anything wrong, so they can’t sue me, or at least they can’t win.
- I have insurance, so they can’t sue me.
- I have no money or property, so I have nothing to lose. You can’t get blood from a stone!
- A lawyer will be appointed to represent me at some point.
All of these reasons for ignoring a lawsuit are erroneous. Ignoring the lawsuit can lead to devastating, irreversible consequences.
So, what’s wrong with the reasons?
“I haven’t done anything wrong, so they can’t sue me, or at least they can’t win.”
In North Carolina, anyone can file a lawsuit against anyone by merely filing the paperwork with the Clerk of Court and paying the filing fee. The Clerk of Court does not review the lawsuit to determine its validity. The determination of validity happens through a court proceeding – a proceeding that is governed
by rigid rules of procedure and often complicated rules of evidence.
One of the important rules of procedure has to do with the idea of default. If a lawsuit is properly filed and served on you, you will lose the case by “default” if you do not respond within strict time deadlines, in the same way that a sports team loses a game by forfeit if it fails to show up to play.
What if the lawsuit is truly frivolous?
North Carolina has laws that sanction people or businesses that file frivolous or malicious lawsuits. However, the court will not make a determination about such sanctions, or about the merits of a suit, on its own. The court does not consider sanctions or the suit’s merits unless a proper response is filed and the case goes forward under the procedural rules.
You cannot ignore
the lawsuit, do nothing, and then expect that a court or a judge will decide the case against the person or business that sued you. Like a lot of things in life, a first step in getting the lawsuit properly disposed of is just showing up. But you must be careful – any response to the suit that you file will
affect your legal position and your ability to protect your money and property. If you try to represent yourself, you will be held to the same rules of procedure and evidence as licensed attorneys – and you will not get a “pass” on those rules because you do not know them or have no training in them. Therefore, at a minimum, consider a conference with a licensed attorney to discuss the claim against you, the defenses you may have, and how to best respond to the suit.
“I have insurance, so they can’t sue me.”
Insurance does not prevent you from being personally sued. In fact, if a person or business has a claim against you that is covered by insurance, often that claimant must sue to get to the insurance money. The suit will be brought against you, not the insurance company. Why is that so?
Your insurance policy is merely a contract between you and the insurance company. Under the contract, you agree to make payments, called “premiums,” to the insurance company. In exchange for the premiums, the insurance company promises to pay claims against you if: (1) the claims are covered by the policy, and (2) you actually owe the claims. If a claim isn’t covered by the policy, or you do not actually owe the claim, then the insurance company has no obligation to pay the claim for you. What happens if a claimant presents a claim against you to your insurance company, and the company believes that you do not owe it, or the company disagrees with the amount being claimed? The company will deny the claim. The claimant then has to establish that you owe the claim and the amount owed, and will file suit against you for those purposes. Remember, if you do not owe the claim, the insurance company is not obligated to pay the claim for you.
If you are sued for a claim that is covered under an insurance policy, the suit triggers another important promise from the insurance company to you: the promise that the company will hire a lawyer to defend you in the lawsuit. This promise, however, comes with a couple of conditions. First, the insurance contract requires that you to immediately notify the insurance company that you have been sued. Secondly, it also requires you to cooperate with the lawyer the company hires for you. The lawyer the company hires for you has to timely respond to the lawsuit so that you do not lose the case by default. If you fail to notify the company of the suit, or you fail to cooperate with the lawyer the company hires for you, the company may say that you have failed to live up to your obligations under the insurance contract. If you fail to live up to those obligations, the company may deny coverage for the claim. If the company denies coverage, you may be held personally responsible for the claim if the claimant proves that you owe it.
Therefore, your purchase of insurance does not keep you from being sued, and you cannot ignore a lawsuit because you have insurance. If you are sued for a claim covered by insurance, you must notify the insurance company immediately, and you must cooperate with the lawyer the company hires to defend you.
“I have no money or property, so I have nothing to lose. You can’t get blood from a stone!”
Civil lawsuits are usually about money. A claimant believes that you owe money for a debt, or believes you owe money because of bodily injuries or damages to property. Through the lawsuit, the claimant is seeking a court order, called a “judgment,” stating that you owe the claimant money. So, if the claimant wins the case, the result is a judgment against you. In the judgment the court costs (filing fees and the like) are typically added to the amount owed, and by law the principal amount owed will accrue interest at the rate of eight per cent per anum until paid. What happens if you do not have the money to pay a judgment?
In North Carolina, once a judgment is entered into the court records, that judgment immediately becomes a lien against any real estate that you own in the county where the judgment is docketed. If you own real estate in other counties, the judgment can be recorded in those places and become a lien against that real estate as well. If you do not own real estate at the time the judgment is entered, but you later become the owner of real estate, the judgment can automatically become a lien against your property.
The law allows a successful claimant to can enforce the judgment lien through a legal process called “execution on the judgment.” The execution process can allow the claimant to have the county Sheriff sell your real estate at auction to generate the money to pay the judgment. Thus, with regard to real property, the entry of a judgment against you will affect your ability to get a mortgage loan, refinance a mortgage loan, or sell your property.
The judgment affects personal property as well. The judgment execution process may allow a claimant to have the county Sheriff seize personal property, including bank accounts and vehicles, to satisfy a judgment. Even if you have no such property when the judgment is entered, the judgment lasts for ten years and can be renewed for successive ten
year terms. Therefore, even if
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you have no money or property when the judgment is entered, the claimant may be able to get the judgment paid if you later acquire money or property.
Additionally, judgments are picked up by the credit reporting agencies, and affect your credit score. Because of this, a judgment will affect your ability to obtain loans and make installment purchases.
So, even if you do not have money or property when you get sued, the legal process can have serious implications for your finances for long periods of your life. Ignoring a lawsuit because you do not currently have money or property is short sighted and may be a grave mistake.
“A lawyer will be appointed to represent me at some point.”
Thinking that the court at some point will appoint a lawyer to defend a case is the worst reason to ignore a civil lawsuit. Under the United States Constitution and U.S. Supreme Court cases, U.S. citizens are guaranteed the right to counsel – in criminal cases. The state will provide a lawyer for a person charged with serious misdemeanors or felonies if that person is financially unable to hire a lawyer.
No similar constitutional right to counsel exists in civil cases. In the usual civil case, no attorney will be ever appointed to represent you if you are sued, and it does not matter that you cannot afford to hire a lawyer. You have the right to represent yourself, but you will be held to the same standards that apply to trained, licensed attorneys.
At a minimum, consider a consultation with a licensed attorney about your defense. Such consultations are usually fairly inexpensive, and many attorneys waive an initial consultation fee if you ultimately hire the attorney for the case.
What To Do If You Are Sued
If you receive a Civil Summons, you must act quickly to protect your rights. Do not delay: contact a licensed attorney to discuss the case. Contact your insurance agent or claims department of your insurance company to report any kind of covered claim. If your insurance company hires a lawyer for you, contact and cooperate with the lawyer. Above all, do not ignore the lawsuit. If you do, the consequences may be far greater that you realize.
David O. Lewis represents individuals and businesses in civil cases in all the state, federal and tribal courts across North Carolina. If you would like more information about civil litigation or to schedule an appointment with David, please contact him at (919) 688-6341 or email him at email@example.com.
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