If your business is sued, do not ignore the summons and complaint – even if you believe the claims are false, exaggerated, or completely unfair. A lawsuit does not go away because the other side is wrong.

Your first steps should be to record when and how the papers were received, check for emergency deadlines, preserve all relevant documents, notify your insurance company, and speak with a New Jersey business litigation attorney. The decisions you make during the first few days can affect your ability to defend the company, assert claims against the other side, and control the cost of the litigation.

Quick answer: What should I do if my business is sued?

1. Save every document and record when it was received. 2. Check immediately for a hearing or emergency deadline. 3. Do not contact the plaintiff or discuss the case online. 4. Preserve emails, texts, contracts, photographs, and financial records. 5. Notify your insurance company. 6. Review contracts for arbitration, indemnification, and notice requirements. 7. Contact a New Jersey business litigation attorney promptly. A defendant generally has 35 days after service to answer a New Jersey civil complaint, but emergency applications may require action much sooner.

What should I do immediately after my business is served?

1. Write down when and how the papers were received. Keep the envelope and every page that was delivered. The date and method of service may affect the deadline to respond.
2. Read the entire complaint. Identify who filed the lawsuit, which business or individuals were named, what the plaintiff claims happened, and what the plaintiff is asking the court to award.
3. Check every deadline. In most New Jersey civil cases, a defendant generally has 35 days after being served to file an answer. Look separately for a hearing date, order to show cause, temporary restraints, or another emergency deadline.
4. Contact a business litigation attorney. An attorney needs time to investigate the allegations, review contracts and communications, identify defenses, and determine whether the business has counterclaims.
5. Notify your insurance company. Some business insurance policies may provide a defense or coverage for certain claims. Notice should be given promptly, even if you are unsure whether the lawsuit is covered.

Does every New Jersey business lawsuit have a 35-day deadline?

No. Although a defendant generally has 35 days after service to answer a New Jersey civil complaint, some papers require much faster action.

Look immediately for an order to show cause, temporary restraints, an application for an injunction, a hearing date, or any other court order. These documents may require the business to file papers or appear in court within days.

A plaintiff may seek emergency relief to stop a business from using property, contacting customers, transferring money, enforcing a contract, or continuing certain operations. Missing an expedited deadline can cause serious harm before the business ever files its answer.

Never calculate the deadline from memory. Give every document received to an attorney so all response dates can be identified.

How long does a New Jersey business have to answer a lawsuit if the business is sued in New Jersey ?

A defendant in a New Jersey civil lawsuit generally has 35 days from the date of service to file an answer. The correct deadline depends on how service occurred, the court in which the case was filed, and the type of claim involved.

Do not assume that calling the plaintiff, talking with the plaintiff’s attorney, or discussing settlement extends the deadline. Unless an extension has been properly obtained, the original deadline may remain in place.

If the business fails to respond, the plaintiff may ask the court to enter a default and then seek a default judgment. Once a judgment has been entered, the plaintiff may attempt to collect against the business. That can include bank levies, liens, information subpoenas, and other collection remedies.

It may be possible to ask the court to vacate a default or default judgment, but that can require additional legal work and expense. It is usually better to respond before the deadline expires.

Can I represent my own business in court?

It depends on how the business is legally structured.

If you operate as a sole proprietor, you and the business are legally the same person. You may be permitted to represent yourself because you are appearing on your own behalf.

A single-member LLC is different. Even if you are the LLC’s only owner, the LLC is a separate legal entity. In New Jersey, a single-member LLC generally must be represented in court by a licensed attorney. The owner cannot represent the LLC simply because he or she owns the entire company.

The same general rule applies to corporations, partnerships, and other separate business entities. A business owner’s right to represent himself or herself does not include the right to practice law on behalf of the business.

This distinction is important. Many owners believe that a single-member LLC is the same as a sole proprietorship because both may be reported similarly for federal income tax purposes. But a tax classification does not eliminate the LLC’s separate legal existence. If the complaint names your LLC, do not assume you can file an answer or appear in court for the company without an attorney.

Does being sued mean my business is liable?

No. A complaint contains the plaintiff’s allegations. It is not a court decision, and the plaintiff still has to prove the claims.

The business may have factual defenses, legal defenses, insurance coverage, counterclaims, or claims against another responsible party. The amount demanded in the complaint may also be disputed.

The lawsuit must still be taken seriously. Even weak or inaccurate claims can result in a default judgment if the business fails to respond.

Should I call the person who sued my business?

Not before speaking with an attorney.

A business owner’s natural reaction may be to call the customer, former employee, vendor, partner, or competitor and demand an explanation. That conversation can create additional problems. Statements made in anger or frustration may later be used as evidence.

Do not send texts, emails, or social media messages about the lawsuit. Do not post about the dispute online. If communication with the plaintiff could help resolve the case, your attorney can determine when and how that communication should occur.

What documents should I preserve?

Preserve anything that may relate to the dispute, including:

• Contracts, proposals, estimates, and change orders
• Invoices, receipts, and payment records
• Emails, text messages, and internal messages
• Photographs and videos
• Customer or project files
• Employee records
• Accounting records
• Insurance policies
• Recorded calls or voicemail messages
• Electronic calendars and appointment records
• Relevant social media content

Tell employees not to delete or change potentially relevant information. Automatic email deletion and document-destruction practices may need to be suspended.

Deleting unfavorable documents after learning about a lawsuit can seriously damage the company’s defense. Preserve the complete record and allow your attorney to decide what is relevant, protected, or legally required to be disclosed.

Should I discuss the lawsuit with my employees?

Only as necessary and after obtaining legal advice.

Employees should be told to preserve relevant documents, emails, texts, and electronic records. However, they should not conduct their own investigation, contact the plaintiff, compare stories, or speculate about the case in workplace messages.

Casual internal communications may later be requested during discovery. Important factual investigations should be directed by counsel so the business can obtain accurate information while protecting applicable legal privileges.

What contracts should I review after my business is sued?

Locate every contract connected to the dispute. The agreement may contain provisions that affect where and how the case must be handled, including:

• Mandatory arbitration or mediation
• A requirement to provide written notice before filing suit
• A shortened period for bringing a claim
• A choice-of-law or choice-of-court provision
• A limitation on damages
• An obligation to defend or reimburse another party
• A personal guarantee
• A provision requiring the losing party to pay attorneys’ fees

The business may also have a right to demand that another company, contractor, vendor, or insurance carrier provide a defense or contribute to the loss. Those rights can be affected by notice requirements, so the contracts should be reviewed promptly.

Should I notify my insurance company?

Yes. Send the complaint to your insurance broker or carrier promptly and request confirmation that the claim was received.

Depending on the allegations and the policies your business carries, potential coverage may exist under:

• Commercial general liability insurance
• Professional liability insurance
• Errors and omissions coverage
• Employment practices liability insurance
• Directors and officers coverage
• Cyber liability insurance
• An umbrella policy

Do not decide on your own that a claim is not covered. The insurance company should review the policy and the allegations. Delayed notice could create a dispute over coverage.

Even when the insurer agrees to provide an attorney, the business should understand what the policy covers, whether the company has a deductible or self-insured retention, and whether any part of the claim is excluded.

What does an answer to a complaint include?

An answer is the business’s formal response to the lawsuit. It typically admits, denies, or states that the business lacks enough information to answer each allegation.

An answer may also include:

• Legal defenses
• Challenges to the plaintiff’s claims
• Counterclaims against the plaintiff
• Crossclaims against another defendant
• Claims against another person or company that may be responsible
• A demand for a jury trial, when appropriate

An answer should not be treated as a simple form. Defenses or claims that are not raised at the proper time may be lost. Your attorney should review the facts and applicable law before deciding how to respond.

Could the owner be personally responsible?

It depends on who was named, what the complaint alleges, and how the business operated.

Operating through a corporation or limited liability company can provide important protection, but it does not prevent an owner from ever being sued personally. A complaint may allege that the owner:

• Personally guaranteed a business debt
• Committed fraud or made a material misrepresentation
• Participated directly in wrongful conduct
• Mixed personal and business funds
• Failed to maintain the business as a separate entity
• Violated a law that allows individual liability

The inclusion of the owner’s name in the complaint does not automatically mean the plaintiff will succeed. However, claims against both the company and the owner require careful review.

What if the complaint names the wrong business or was served incorrectly?

Do not ignore the lawsuit because the business name is misspelled, the wrong related company was named, or you believe service was improper.

Those issues may provide important defenses, but they must be raised correctly and at the proper time. Filing the wrong response – or taking certain actions without preserving the objection – could affect the business’s ability to challenge service, jurisdiction, or the identity of the proper defendant.

Give the attorney the complaint, summons, envelope, delivery information, and the legal names of all related businesses. Let the attorney determine how the issue should be raised.

Should I move the business’s money or assets after being sued?

Do not transfer, hide, sell, or retitle business assets in an attempt to keep them away from the plaintiff.

Being sued does not automatically prevent a business from paying ordinary expenses or continuing normal operations. However, unusual transfers made after a claim arises may create additional legal problems and could expose the owner or recipient to further claims.

Before making any major transfer, distribution, sale, or change in ownership, speak with an attorney and continue maintaining accurate business records.

Can the lawsuit be settled without going to trial?

Yes. Many business lawsuits are resolved without a trial, but settlement should follow a careful evaluation of the case.

Before making or accepting an offer, the business should understand:

• The strengths and weaknesses of each side’s case
• The available documents and witnesses
• The potential damages
• The likely legal expenses
• Whether insurance coverage is available
• The effect of litigation on business operations
• Whether a settlement requires confidentiality or other nonfinancial terms

An early resolution can sometimes save time, money, and stress. In other cases, an immediate settlement offer may unnecessarily give up leverage. The right approach depends on the facts.

What mistakes should I avoid after my business is sued?

Common mistakes include:

• Putting the papers aside because the claims seem ridiculous
• Waiting until the response deadline is about to expire
• Assuming settlement discussions stop the answer deadline
• Contacting the plaintiff in anger
• Posting about the dispute on social media
• Deleting emails, texts, or business records
• Signing a settlement agreement without legal review
• Assuming the insurance company has been notified
• Preparing an answer without identifying all available defenses
• Allowing employees to discuss the lawsuit with outsiders
• Continuing the conduct that caused the dispute without reviewing business practices

Another mistake is focusing only on defending the current lawsuit. A claim can reveal weaknesses in the company’s contracts, paperwork, employee training, billing practices, or customer communications. Correcting those problems may help prevent the next dispute.

What will a business litigation attorney do?

A New Jersey business litigation attorney can:

• Confirm every deadline to respond
• Review the complaint and supporting documents
• Determine whether service was proper
• Identify defenses and possible counterclaims
• Communicate with the plaintiff’s attorney
• Review potential insurance coverage
• Prepare and file the answer or appropriate motion
• Develop a plan for discovery and document preservation
• Evaluate settlement options
• Represent the business in mediation, court conferences, motions, and trial
• Recommend changes to reduce future legal risk

The earlier counsel becomes involved, the more options the business may have.

Do not let a lawsuit take control of your business

Being sued can feel personal, especially when you have spent years building your company. But an immediate emotional response is rarely the best business response.

The first goal is to protect the company: preserve the evidence, meet every deadline, understand the risks, and develop a strategy. Once the immediate case is under control, the business can decide whether to defend the claims, pursue an early resolution, bring its own claims, or take another approach.

If your New Jersey business has been served with a complaint, Tomes Law Firm can review the allegations, explain your options, and help you develop a practical response.

Call Tomes Law Firm at 732-333-0681 or visit tomeslaw.com to schedule a consultation.