Sued Without Knowing
Have you ever wondered what would happen if you were sued but had no knowledge of it? Surprisingly, this can occur due to various circumstances. If the individual suing you cannot locate you, they can request permission from the court to publish a notice of the lawsuit in a local legal newspaper. If the court deems that reasonable attempts have been made to serve you without success, they may authorize service by publication.
Unfortunately, legal newspapers are not commonly read, and they may not even be available online. Let’s imagine that the notice of the lawsuit against you is published in a legal newspaper, but you remain unaware of it and fail to respond. In such cases, the opposing party can file a motion for default judgment, asking the court to rule against you due to your lack of response. If the court issues a default judgment, you will receive a court document stating that you have lost the lawsuit and are liable for the disputed amount, such as a hundred thousand dollars.
The party who won the case can then take that judgment and initiate actions like placing a lien on your real estate, garnishing your bank accounts and wages, or even seeking a sheriff’s sale or auction of your assets. Often, individuals only discover the existence of the lawsuit when they receive a notice posted on their door about their property being auctioned, or when a sheriff serves them with a notice. Such situations can be emotionally distressing and frustrating, leading individuals to seek urgent legal assistance to protect their rights.
Next Steps
So, what can be done if you find yourself in a situation where you have been sued without your knowledge? The key steps involve filing an action in court and notifying relevant entities such as banks and sheriffs that you dispute any actions being taken against your property. By challenging these actions and filing a motion in court, you can request an emergency hearing, often in the form of a temporary injunction, to halt these proceedings. Simultaneously, you can request the court to reopen the case and reconsider the default judgment. To succeed in reopening the case, you typically need to demonstrate that you were not aware of the lawsuit and present substantial defenses or arguments that were not previously considered.
Conclusion
If you find yourself facing a lawsuit that you were unaware of, it is crucial to take quick action by seeking legal assistance. By promptly filing the necessary motions and challenging the actions being taken against your property, you can have the opportunity to reopen the case and present a defense.
Video Transcript
What Happens If You Get Sued but Never Knew About It?
What happens if you get sued but never knew about it? You might wonder, “How could this possibly happen?” Well, there are a couple of different scenarios. If the person suing you cannot track you down, they can ask the court for permission to post a notice of the lawsuit in the local legal newspaper, and assuming the court determines that they’ve made reasonable attempts to serve you and that’s been unsuccessful, the court may authorize you to be served by publication.
Now, most people don’t read legal newspapers. These newspapers don’t even have to be posted online. So, let’s assume notice of the lawsuit against you is done by publication in a legal newspaper, and you don’t read it and you obviously don’t know about it, so you can’t respond to that lawsuit. When you don’t respond to the lawsuit, the other side can bring a motion for default judgment. That just says they can ask the court to rule that you lose in the case because you failed to respond. Let’s assume that the court issues a default judgment against you, and now what we have is a piece of paper from the court that says, “You are wrong. You lost this lawsuit. You are liable for whatever was at issue in the case.” Let’s say you owe a hundred thousand dollars. The party who won in that case against you can take that judgment and get a lien on your real estate, garnish your bank accounts, garnish your wages, and seek a sheriff’s sale or an auction of most of the assets that you own. And that’s typically when people find out about this.
The case goes on, they never get notice about it, and then all of a sudden they get a notice posted on their door that their home is being auctioned, or the sheriff comes and serves something on them or a sheriff will come and say, “Hey, this is a writ or a notice of a right to take something.”
That’s normally when I get some sort of urgent call from somebody who says, “I don’t know what’s going on here. They say there’s a judgment against me. How can this happen in a country like America? My constitutional rights are being violated. This is extremely egregious. This is injustice. I want you to go to town. I want you to sue everybody involved.” And I’ve had these calls. It’s just an extremely emotional and frustrating situation for somebody who didn’t know about the lawsuit. All right, so what do we do about that? I’ll tell you in just one moment, but there’s one other scenario that can lead to this.
Potential Cause
If you are a company operating in other states, and you have not registered to do business in those states, you may not get notice of those lawsuits. As a company entering into contracts in another state or selling in another state, offering services in another state, hiring employees or independent contractors in that other state, you are required by state law in those states to register as doing business there. It’s called a foreign entity filing, or foreign LLC registration, or foreign corporate registration.
You have to do that with the state agency that manages corporate registrations or incorporation of LLCs and corporations. If you don’t do that, you may never know about a lawsuit because the lawsuit is served on the state agency who manages that and they don’t know who to forward it to. So if that occurs, your company might get sued without your notice.
I’ve had these calls before. They’re extremely frustrating for small business owners because they find out for the first time there was a lawsuit filed against them. They never knew about it. They lost that lawsuit and now their bank accounts are being frozen. You, you might have $150,000 frozen in your bank account, and this is the first time you are hearing about it.
Important Steps
Okay, so what do you do in both of these scenarios where you are hit with a lawsuit you never knew about? We can file in court, and we probably also send a notice to any bank institution or sheriff putting them on notice that we are challenging and disputing any lien, garnishment, replevin, or levy action being brought against you or your property.
So we put everybody on notice who is trying to take action against your stuff, that this is being challenged, and we file in court and we may request an emergency hearing if needed with the judge. Typically, this is in the form of a temporary injunction, which is sometimes called a temporary restraining order, but in the context of property, it’s usually, at least in Minnesota, called a temporary injunction.
And we ask the court first, put a hold on all of these actions that are trying to take our stuff. And then second, we ask the court to reopen the case and consider whether to undo the default judgment. So that is an emergency action typically done so that you can try to get the case reopened.
Usually, you have to show a couple of things in order to get that case reopened. One is that you didn’t have notice of the case, and two, you have substantial defenses or arguments that were not taken into account here.
Summary
So, what happens if you get sued but never knew about it? You file for quick action with the court to ask the judge to put a hold on everything, allow you to be heard, and try to get that case reopened.
Conclusion
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