So you’ve been served with a lawsuit or petition for arbitration. The question is what to do with the documents? Do you get nervous and concerned, and simply respond? No – a response without understanding the law could hurt your defense more than helping. Moreover, except in small claims court, a corporate entity defendant (including LLC’s and the like, and our community association clients) can only represent itself through counsel in Florida. A response filed by a representative - even a director or officer - may be stricken or simply disregarded by the Court or arbitrator, as thought it was never filed.

So, do you instead remain unconcerned and simply take no action? No - this is perhaps even worse. If no response is filed, a default can be entered by the Clerk of Court, Judge, or Arbitrator. Such a default operates as an admission of your opponent’s claims. This means that even if your opponent’s claims are completely untrue and completely frivolous, a judgment could be entered against you based on such a default. Accordingly, we almost always recommend that a response be filed.

There is generally one “right answer” to protect your interests to the extent possible and necessary: send the documents to your attorney to review and discuss with you, immediately after your receive them. For the corporate entities discussed above, we also recommend that your attorney serve as your registered agent, so that any lawsuit or petition for arbitration is served directly to the person who should be receiving it, without delay. See also our January 27, 2018 article regarding Registered Agents.

Your attorney can confirm whether your opponent’s claims are customarily covered by one or more of your insurance policies. If the claim is “covered,” you will generally pay the amount of your insurance deductible, and the insurance carrier will address the cost of defending the case by assigning an attorney to do so. Note that some types of insurance policies do not cover any damages, attorney’s fees, or costs awarded to the other party, meaning that you would still be responsible for those charges regardless of who pays the cost of your defense. Many people seem unaware that you can request that the insurance carrier appoint your law firm of preference to address your defense. If the carrier denies the claim (i.e., declines to pay for your defense), your attorney can review the policy to see if that denial is legally incorrect.

Note that even if the claim is covered, you can still choose to proceed without submitting a claim. However, insurance carriers occasionally contribute toward a quick settlement, rather than paying an attorney to represent you through completion of the case. This can make settlement more likely, rather than spending the next year or more of your life in a legal battle.

In short, a lawsuit is not always cause to “freak out.” However, being served with a lawsuit should elicit an immediate reaction, including communication with counsel. This should allow you some peace of mind, based on in-depth analysis and an informed decision of how to proceed.