Sal Minella is president and registered agent of Mother Clucking Tasty Chicken, a large poultry processor in East Texas. One afternoon, while flying the coop for a much needed vacation to the Canary Islands, Sal is met by a process server who presents him with a lawsuit. Sal quickly skims the allegations of the lawsuit – yet another food poisoning victim – and hurriedly tosses the papers on his secretary’s desk, fully intending to respond to the meritless claims when he gets back. When Sal returns to the office, he remembers why he doesn’t like vacations, as he is confronted with 721 e-mails and a host of minor emergencies. Not surprisingly, bird-brained Sal completely forgets about the food poisoning lawsuit. Several weeks later Sal receives a default judgment in the mail. Failing to timely answer the meritless lawsuit just cost Sal and Mother Clucking Tasty Chicken a default judgment of almost $9 million. With the plaintiff sitting in the catbird seat, what should Sal do?
Call a lawyer immediately. In this case, Sal has a chance to have the default judgment set aside. In Texas district courts, after being served with a lawsuit a defendant has until the Monday following the expiration of twenty days to file an answer to the lawsuit. If an answer is not timely filed, the Court often grants the Plaintiff a default judgment for the entire amount of the alleged damages without further notice to the defendant. While it is possible to get a default judgment set aside (and have a new trial granted), the defendant must demonstrate, among other things, that the failure to file an answer was an accident or mistake and not intentional or the result of conscious indifference. The defendant must also agree to compensate the plaintiff for certain fees and expenses in obtaining the default judgment.
Tilting the Scales In Your Favor
The Texas case reporters are filled with lawsuits that got buried under papers or lost altogether and never responded to timely. While default judgments can be set aside, the process is costly, extremely stressful and not assured. Never ignore a lawsuit! Every lawsuit, even those you deem completely frivolous, must be timely addressed. If you fail to answer a lawsuit, it will inevitably take care of itself in a most unfavorable way and might permanently deny you the opportunity to defend yourself.
Just last month, the newspapers reported that PepsiCo failed to respond to a lawsuit and suffered a judgment of over $1.2 billion. Although the judgment was subsequently set aside, it was undoubtedly an unpleasant situation for PepsiCo and one that likely could have been avoided. See also Craddock v. Sunshine Bus Lines, Inc., 133 S.W.2d 124 (Tex. 1939).