It’s no secret that some lawsuits are more firmly grounded in reality than others. Unfortunately, it is often difficult to tell initially what litigation can cause serious financial or other damages. For example, you may recall the “McDonalds incident” back in the early 1990s, in which a woman who had spilled hot coffee on herself received a massive award of damages from a jury. In that case, the plaintiff originally sought $20,000 in compensation, an amount McDonalds could easily have paid in settlement. Instead, McDonalds took the case too lightly, assuming that it would simply go away or that a jury would never award significant damages – only to end up with a jury award of $160,000 in compensation as well as an additional $2.7 million in punitive damages.
There is a clear moral to this story: It isn’t wise for a business to assume that a lawsuit is frivolous or inappropriate, or to ignore a lawsuit based on that assumption.
Plaintiffs may file inappropriate lawsuits for a variety of reasons. For instance, they may not understand the law thoroughly enough to know whether they have a legitimate case. They may also have unwittingly based their case on incomplete facts or outright falsehoods. There is also the matter of the frivolous lawsuit. A frivolous lawsuit is a lawsuit making claims and seeking damages blown out of all reasonable proportion. Plaintiffs typically file such lawsuits primarily to hurt or harass the defendant, or to score a huge financial reward from a defendant who clearly has deep enough pockets to pay it in full. Sometimes a plaintiff will even file a frivolous lawsuit simply as a delay tactic.
Let us assume that you receive a questionable or obviously frivolous lawsuit demanding a ridiculous sum in damages for some alleged error, dispute, or injury. You might feel completely justified in ignoring the lawsuit as a stunt or dismissing it as something that could never succeed in a court of law. Nevertheless, you have (depending on service) typically 20-30 days to address the Summons issued. If you haven’t filed your Answer or other responsive pleading by the deadline, the plaintiff can obtain a Default Judgment against you simply because you didn’t defend yourself against the Complaint. As a result, the opposing side may actually receive that ridiculous award. If you can’t persuade the judge to set aside that Default Judgment, the plaintiff may then pursue it via garnishment, seizure of assets, and other tactics.
The first step in addressing any kind of lawsuit, whether it be frivolous or otherwise, is scheduling a consultation with an experienced attorney. An attorney can inform you how well (or poorly) the plaintiff’s case is likely to hold up in litigation and whether it makes sense to go ahead and settle for a minimal amount as “the cost of doing business.” In many circumstances, we can reach a negotiation with the plaintiff and stop the lawsuit in its tracks. If that fails, we may file a Motion to Dismiss based on the nature and allegations of the suit. The plaintiff must then show that it he or she has met the most basic pleading requirements to show that the litigation may proceed. A business might even have a good cause for filing a counterclaim and pursuing damages of your own after a frivolous lawsuit has been dismissed.
Whatever you might need to do about that frivolous or inappropriate lawsuit, you definitely need to take action as quickly as possible. Don’t assume that a court won’t support a plaintiff’s claim or back the plaintiff’s right to collect a default judgment.
© 2019 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved
This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.
