In today’s Freedom Friday blog and email newsletter, I’m going to answer another question that frequently comes up with some of my clients, even when it is too late, and that’s how to avoid (or get out of) a default judgment. In other words, what do you need to do, procedurally, if your small business gets sued, to avoid a default judgment. In today’s Freedom Friday blog and email newsletter, I’m answering the question, “How do you avoid a default judgment in Oklahoma, and how can you get out of one, too?”
First of all, in Oklahoma, if you or your business is sued, you have twenty (20) days to file a response to the lawsuit, which is called an “Answer.” During this time, your first step should be to hire an attorney and not take the law into your own hands and file a pro-se response or Answer. In fact, your business cannot represent itself in court, so it must be represented by an attorney. Depending on the nature of the lawsuit, your insurance carrier may be able to provide you with an attorney and a legal defense. This is often the case with “tort” based claims like car accidents and slips and falls; it is also common in construction defect cases (but not always). If the lawsuit mentions “negligence,” call your insurance company and notify them you were sued so they can hire an attorney for you. However, if the lawsuit is about breach of contract or similar issues, you will need to hire your own attorney to defend your business.
What else is required to avoid a default judgment besides hiring an attorney? Your attorney will need to gather any facts that are necessary and file an “Answer” on your behalf in twenty (20) days from the date your business was served with the lawsuit. An Answer will have two different parts. The first part will deny the allegations in the lawsuit. It’s possible that an Answer may admit certain allegations, but most will need to be outright denied in writing. The second part of the Answer will list out various affirmative defenses.
Alternatively, your attorney might also recommend a motion to dismiss instead of filing an Answer. Sometimes there is something procedurally defective with the way your business was served, or your business was sued in the wrong court, or something else is facially and/or procedurally defective with the lawsuit. In such a case, your attorney can file a “Special Entry of Appearance and Motion to Dismiss” which will be set for hearing. At the hearing, the judge will make a key decision. The judge might grant your motion and allow time for the plaintiff (the person or business that sued your business) to fix their error, or the judge might deny the motion and give you an additional 20 days to file your Answer. In some cases, the judge might also transfer the case to a different court if the plaintiff chose the wrong venue, or other some other relief, such as referring the case to binding arbitration.
So, what can you do to get out of a default judgment, if it’s too late, and a default judgment has already been ordered against you or your business. If you have a valid defense, within thirty (30) days, your attorney can file a motion to vacate the default judgment, and especially if the plaintiff does not oppose it, the motion is likely to be granted. The motion to vacate may be granted anyways because default judgments are, in general, disfavored under Oklahoma law. If it’s been more than thirty (30) days, you are required to file a “Petition to Vacate” and it is more difficult, but not impossible, to vacate the default judgment, especially if you have a valid defense, and especially if there are reasons to have the default judgment vacated (such as defects in service, or other statutory grounds). However, there are time limits on filing a “Petition to Vacate,” and you need to consult with an attorney right away regarding your rights. Nevertheless, default judgments can be avoided by timely hiring an attorney to represent you or your business’s interests, and having your attorney file an Answer as soon as possible after you were served with the lawsuit.
If your business needs strategic and/or aggressive business legal counsel to handle issues with contracts, leases, business partners, collection matters, or assistance overcoming other barriers to growth, please contact me at Jonathan@libertylegalok.com to schedule a FREE strategy session.
For more information about Liberty Legal Solutions, LLC, please visit our website at https://www.libertylegalok.com/