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Preparing for Business Litigation

Martinez Law Office, Inc July 8, 2022

If you own or operate a business in California, you’re likely to develop multifaceted relationships with people and entities who help you with your operations. You may rely on suppliers to provide you with products to sell or have agreements for professional services such as accounting and bookkeeping.

As you develop these relationships, it’s probably just as likely that disputes will develop. For instance, you can have a contract with a supplier of products for you to sell, and either that person or you may somehow fail to live up to the terms of the contract. A breach of contract lawsuit can ensue.

Then, of course, you’ll also interact with customers and employees. Employees may take legal action against you if they feel discriminated against or are a victim of wage theft – not being paid for overtime. A customer may slip, fall, and become injured in your business and file a personal injury lawsuit. 

Partners can also create waves. One partner may suddenly decide that he or she doesn’t like the direction the business is taking and isn’t being listened to. A lawsuit may ensue.

If you’re involved in a business lawsuit as either plaintiff or defendant – or are facing the potential of a lawsuit because of a dispute – in or around Santa Ana, California, contact me immediately at Martinez Law Office, Inc. I have been helping business people, from mom-and-pop to corporate executives, for more than 40 years resolve disputes and represent their interests should matters go to court.

My firm proudly serves clients throughout Southern California, including the counties of Orange, Los Angeles, and San Diego.

Common Causes of Business Lawsuits

Breach of contract is certainly a common cause for business lawsuits in California. A contract imposes certain responsibilities on each party. Generally, one person will compensate another person – or one entity another entity – for services or goods provided. If your accounting firm fails to pay your payroll taxes on time, and the IRS comes after you, you’ll probably want to hold the accounting firm responsible.

Other causes for business litigation include real estate and commercial lease disputes; trade secret violations and patent infringement; product defects; breach of warranty; insurance coverage disputes; business torts; equipment lease disputes; construction disputes; and loan disputes and lender liability claims, among others.

Federal and state regulatory agencies can also come after your business for violations of employment law, health and safety standards, and even environmental issues.

The Lawsuit Process

If you are served for a lawsuit, remember that time is of the essence. You have 30 days to file a response to give your side of the story. Those 30 days include weekends and holidays. Once you are served, secure the services of an experienced business litigation attorney immediately.

If you do not respond within the 30-day period, the plaintiff – the person or entity suing you – can file a “Request for Default.” The plaintiff can then ask the court to enter a default judgment against you, and you will not be allowed to defend yourself. Once a default judgment is entered, the plaintiff will be awarded the full amount claimed in the lawsuit.

If you do file a response, then the discovery process will begin, and you will be given a series of questions you have to answer and asked to turn over certain documents. If you fail to respond, you can be sanctioned with a monetary penalty.

This is a general outline, and you certainly want to be working with an experienced attorney every step of the way. The longer you wait to get legal guidance, the worse your odds may become.

What to Do If Sued

Even if your first instinct when facing a lawsuit is to try to negotiate a settlement, you need to be careful and don’t begin the process without an attorney’s advice and guidance – or better yet, just let the attorney carry out the negotiations.

We’ve all seen TV dramas where arresting police officers read suspects their rights, which include the statement that “anything you say or do can and will be used against you.” That’s the danger of negotiating on your own. If you slip up and say something that the other side can use against you, you can bet they will.

Also, hold back your emotions. You might want to pull an Elon Musk-style tweet and challenge or denigrate the person or party suing you. Again, be aware that this can be used against you, either in negotiations or in the courtroom.

The same goes for written communications. If you’re emailing, texting, or otherwise communicating with the plaintiff in the pre-trial days, you want to make sure everything is vetted by your attorney. Better yet, just cut off communications and let your attorney handle relationships.

And speaking of written communications and other documents, you want to make sure you preserve and assemble every document that pertains to the lawsuit at hand. You certainly don’t want to hide or even destroy what could be subject to the discovery process or what could be used to help press your case forward.

If there are witnesses, you and your attorney should also begin interrogating them to see what they have to say, whether it’s positive or negative. If it’s positive for your side, great, and if it’s negative, you will at least know how to counter it.

How Martinez Law Office, Inc. Can Help

Again, you want to avoid courtroom litigation as much as possible. If you’re involved in a dispute as either the potential plaintiff or defendant, contact me immediately at Martinez Law Office, Inc. Let me evaluate the situation and devise the proper course for you.

Likewise, if papers have already been served and courtroom action looms, involve me immediately. I will help you weigh your options and formulate the actions needed to strive for the best possible outcome. I proudly serve individuals and businesses throughout Southern California from my office in Santa Ana.