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Contract Cases in Federal Court

When your business is sued in federal court, it can be a strange and surprising experience. A common question that we receive from business owners is, “How can my business be sued in federal court over a contract? Isn’t federal court just for crimes and serious litigation?”

How it Works

In most cases, federal cases over contracts are brought because one party is from a different state than the opposing party and there is more than $75,000 in damages that are at issue in the lawsuit. In other words, your first instinct might be right: a contract case only enters the federal court because it is a pretty big deal. 

Beyond this, contract cases in federal court are much different than contract cases in state court. A breach of contract action requires that the plaintiff (the person bringing the lawsuit) demonstrate that the defendant violated the terms of an agreement. This agreement doesn’t have to necessarily be written (although it usually is when there is a lot of money at stake). 

Several defenses to contract actions exist, including proof that the contract was impossible to perform or that the plaintiff violated the contract first. In rare cases, the contract itself might violate state or federal law, which means it cannot be enforced in court.

More About Federal Court Cases

Cases in federal court should be taken seriously because they tend to move quickly. This is especially true of the Eastern District of Pennsylvania, often referred to as “the rocket docket” because of the speed with which the cases move to trial. In other words, if you are not preparing from day one, you are not going to be ready by the time the case gets to the summary judgement phase and to trial. 

Contact Cornerstone Law Firm

If you or your business has been sued in federal court, it is important to seek litigation attorneys who can handle your case. Contact the Cornerstone Law Firm and speak with our experienced federal litigators to discuss your options in moving forward and how you can best defend your case.

Representation in Federal Court

If you’ve been sued in the Federal District Court for the Eastern District of Pennsylvania, there are a number of questions you will need to confront quickly. These questions include whether you were properly sued in the Eastern District, whether the Commonwealth of Pennsylvania has “personal jurisdiction” over you in a lawsuit, and whether you have any counter-claims or defenses that you will need to raise in your first pleadings.

In federal court, if you have been served with a complaint you typically have only 21 days from the date of service to answer. If you waive service in advance, you will have longer to respond. 

Does Your Case Belong in Federal Court?

In addition to determining counterclaims and affirmative defenses available to you, an important question you should analyze is whether the case belongs in federal court rather than state court. Unlike state courts, federal courts are of limited jurisdiction, which means they can only handle cases specifically authorized by the Constitution and by Congress.

Whether the case you are involved in falls under those categories of cases authorized by Congress and the Constitution is a question requiring legal analysis that needs to be done immediately to determine whether the court has subject-matter jurisdiction over the claim. 

Choosing Your Next Steps

Additionally, like any other case, as a defendant, you need to decide up front whether you wish to fight the case and defend it on its merits or attempt to settle it and avoid the rising costs of defending a lawsuit. This decision can be difficult, but is made easier when you really understand the likelihood of your success in defending a case and the possible risks involved in losing it. This requires an exploration of the facts and law that gave rise to the lawsuit.

The Eastern District of Pennsylvania is sometimes called the “rocket docket” because of the speed with which litigation moves and the promptness of trial dates. Most cases in the Eastern District are set for trial in less than a year from the date the suit is filed. This is remarkably fast for courts of any kind and makes the Eastern District of Pennsylvania one of the most fast-paced courts in the country. 

Contact Cornerstone Law Firm

Perhaps you have heard the expression, “Don’t make a federal case out of it.” This simple expression confirms one truth about federal cases—they are serious and shouldn’t be ignored.

If you have been sued in the Eastern District of Pennsylvania, we welcome you to contact Cornerstone Law Firm. Contact us today for a consultation on your federal case:

Waiving Summons in Federal Court

When you have been sued in federal court, it is customary for the attorney who represents the plaintiff (the person suing you) to reach out to you by email or letter with a copy of a Waiver of Summons. An example of what this document looks like is provided below.

waiver of summons
Sample Waiver of Summons

A Waiver of Summons requests that you sign and accept the service of the Complaint, thus simplifying the process of bringing you in to court to be sued. So why would anyone do this? Why make it easier for the person trying to sue you? There are three good reasons why you should consider waiving service of the Complaint:

1. You have more time to answer

If you are served with a Complaint in federal court, you get only 21 days to answer the Complaint. This is a very quick turnaround, especially when you take into consideration the time it might take to find a litigation attorney you trust who can handle a federal case.

However, if you sign the Waiver of Summons, you get 60 days from the date the waiver was offered to you. With more than double the time to answer, you may also have the opportunity for other procedural maneuvers and even opportunities to resolve the case out of court before undertaking the expense of filing an answer or a motion to dismiss.

2. It costs less to waive summons

Under Federal Rule of Civil Procedure 4, if you refuse to waive service, you are responsible for the cost of service. This can cost hundreds of dollars in some cases and that cost will ultimately be passed on to you, regardless of whether you win or lose the lawsuit. Compared to other litigation costs, this may not seem like much, but when you have the option to waive service and avoid this cost altogether, it certainly seems unnecessary.

3. You can avoid the embarrassment of personal service

Many people do not care about personal service and do not mind if a private process server shows up to hand them a complaint. However, if you run a business, and in many other circumstances, you may prefer not to be embarrassed in front of coworkers, friends, business associates, or relatives by service of the complaint and the announcement in front of those people that you have been sued in court.

Waiver of Summons allows you to avoid living under the constant fear of a process server arriving in your office or at your home, and announcing to everyone within earshot that you have a lawsuit in federal court against you.

To waive or not to wave?

With all that said, there are also some times that it is not wise to waive service of process. Although these situations are relatively rare, a good litigation attorney who handles cases in federal court can help you decide whether it is right to waive service or to force the other side to serve you with the process. And more important than this decision are the many decisions that will immediately follow.

Should you file an answer or a motion to dismiss? Should you be in discovery immediately or is a private, internal investigation the first step? These and a hundred other questions can be worked through with experienced litigation counsel.

Call Cornerstone Law Firm today if you have been sued in federal court to discuss your case and to see if one of our litigation attorneys can help you. 

Why You Shouldn’t Ignore a Writ of Summons

If you’ve been served with a Writ of Summons in Schuylkill County, Pennsylvania or, in any other county in Pennsylvania for that matter, it’s extremely important that you do not ignore it. A Writ of Summons is the beginning of a lawsuit, and it takes care of one of the most difficult and important parts of the process—serving the lawsuit.

In other words, as a Defendant, you’re not going to get another notice about this lawsuit served through official means, such as a sheriff. From now on, everything you get is going to come through the mail. You don’t want to risk receiving this mail while you’re out of town, on vacation, or dealing with the other busy details of life that might keep you distracted.

Pennsylvania Summons
A Writ of Summons is an alternate form of original process in the Commonwealth of Pennsylvania.

What to Do

When you’re served with a Writ of Summons, the first thing to do is to immediately take action to insist that the Plaintiff file a Complaint substantiating their right to a lawsuit. Their failure to do so can result in a complete dismissal of the charges.

What happens if you don’t know what the charges are based on? What happens if you don’t even know the person suing you? Surprisingly, this happens to many defendants.

Regardless, you should still take action to force a Complaint right away. This gives you the chance to gather evidence, prepare your defense, and hopefully push the Plaintiff into a position where the case can be settled or dismissed.

Take Next Steps

The Writ of Summons is part of Pennsylvania’s very complex Rules of Civil Procedure. Failure to abide by the Rules of Civil Procedure can result in very serious waivers of your rights. Contacting a civil litigation attorney is an important first step in the process. Litigation lawyers can help you figure out the rights steps to take in the process.

Contact us at the Cornerstone Law Firm today to discuss your Writ of Summons in Pennsylvania and to see how we can help you navigate the process.

Default Judgment

When you fail to respond to a lawsuit filed against you, the court will grant the other party whatever relief they were seeking in their Complaint. This is known as a “default judgment.” In this post, we’ll discuss default judgments, and what you can do if you’ve found yourself dealing with one.

How Defaults Occur

When you’ve been served with a lawsuit, you typically have about thirty days to respond to that lawsuit (although this time varies depending on whether you are in state or federal court). If you don’t respond during that time, judgment will be entered against you in the amount of money claimed in the Complaint.

So, for example, if the complaint asked for $100,000, and you declined to answer, the court will assume that you had no problem with a $100,000 judgment entered against you. Admittedly, this is unlikely with a number that high, but there are plenty of times that someone may not really care about a complaint against them, because they figure the judgment is too small to fight about. They would rather give up, pay the amount to the person that holds the judgment, and move on with life.

The more common reason for a default judgment, however, is that the Defendant never learned of the lawsuit. For example, in some cases, the lawsuit may not have been properly served. In a common example in Pennsylvania, the person may have been served with a “Writ of Summons” which merely told them they were being sued but did not tell the Defendant what they were being sued for.

Unfortunately, many people allow these to simply sit around for a long time. One day, the Plaintiff mails the Defendant a Complaint or, in some cases, doesn’t mail it and claims that they did, and a default judgment is entered. The default judgment acts just like any other judgment. Once entered, it has binding effect on you and can be used to execute against your possessions. It is a serious and important problem, and you should act quickly upon learning of the judgment in order to avoid forfeiting any more of your rights.

When the judgment is entered, it has binding effect on you and can be used to execute against your possessions. It is a serious problem, and you should act quickly upon learning of the judgment in order to avoid forfeiting any more of your rights.

When No Money is Claimed

Many Complaints never state a claim for a precise amount of damages, however. There is no rule requiring that a Plaintiff calculate their precise damages when they file a suit. Many times, damages are determined during the course of discovery and trial.

Accordingly, most Complaints are filed without a specific claim for the amount of damages at issue. In this case, the Court will award judgment on liability, and then will set a trial for damages. Discovery and other processes will ensue to aid the parties in determining exactly how much is claimed.

Conclusion: Don’t Sit on a Default Judgment

If a default judgment has been entered against you, don’t ignore it. You may be able to move to have the judgment re-opened. In other cases, you may be able to limit the amount of damages, even if the default is irreversible. What you should not do is wait.

Contact an attorney at Cornerstone Law Firm today to discuss your case.

How Much Time Do I Have to Answer a Lawsuit in Pennsylvania?

If you’ve been served with a lawsuit in Pennsylvania state court, you have 30 days to respond to the Complaint. You have only 21 days if you are sued in federal court.

The first documents that you file in court are extremely important because your failure to raise certain defenses might mean that they are lost forever. In fact, even answering a complaint could prejudice you in regards to your rights. But you will almost always want to file something in response to a Complaint, or else it will result in a default judgment.

Answering a Complaint in Pennsylvania State Court

Under state court procedure, after you are served by the sheriff or other authorized process server, you are told that you have twenty days to answer the complaint. This is technically true.

But, on the twenty-first day, you will be mailed what is called a “Ten Day Notice.” This notice warns you that you have failed to answer or properly object to the complaint in a timely manner and are technically in default. After these 10 days elapse, if you still not responded to the complaint, then the Plaintiff may move for a default judgment against you for the amount that they are claiming in their complaint.

In some cases, you may wish to “remove” (that is, transfer) the case to federal court, which must typically be done within 30 days of being served. Not every suit can be removed to federal court.

Answering a Federal Lawsuit

In Federal Court, the rules are a little less forgiving. Within 21 days after being served, you must file an answer or an appropriate Motion to Dismiss. Failure to do so will allow the Plaintiff to move for default judgment on day 22. After that, it will be very difficult for you to get the judgment reopened.

If you believe that a lawsuit is not properly presented in federal court, you are best served to file an appropriate motion before attempting to answer the Complaint.

What happens if I don’t answer a lawsuit in time?

Failing to answer or otherwise respond to a lawsuit in Pennsylvania (or anywhere, for that matter) is a big mistake. The clerk of the court will enter judgment against you and will award the Plaintiff the amount they asked for in the Complaint, even if that amount makes no sense under the facts and the law!

So, if someone sues you for $1,000,000 because they say you insulted them, if you don’t answer, the Court will assume you have no objection to being in debt to this person for $1,000,000. They can seek to collect this judgment against you in a variety of ways. It’s safe to assume you won’t want that.

If you’ve already had judgment entered against you, you can seek to have the judgment “opened” or “stricken.” Under state law, if you have failed to file in a timely manner and received a default judgment against you, you have another 10 days from the entry of default to move for the judgment to be opened as a matter of right.

After that, it is still possible to get it open, but it is much harder. In federal court, it is difficult to get a judgment reopened.

Conclusion: Don’t delay in seeking legal counsel

In all instances, it’s best not to wait at all. Doing nothing about a complaint is the worst possible thing you can do. A good attorney will want time to research your claim and gather documents that are relevant, so it’s important that you move quickly.

At the Cornerstone Law Firm, we defend individuals and companies in lawsuits on a frequent basis. If you’ve been served with a lawsuit in state or federal court in Pennsylvania, we welcome you to call us to discuss your rights.

Don’t delay – call us today!

Sued for Credit Card Debt in the MDJ

If you’ve been served with a lawsuit by a credit card company in a Pennsylvania Magisterial District Court, it’s important for you to act fast. Credit card companies often sell their outstanding balances to investment companies, which purchase the debt and then sue the credit card holders for the debt in Magisterial District Courts in Pennsylvania.

Magisterial District Court 23-2-02
23-2-02 Magisterial District Court, West Reading

Magisterial District Courts are often in unimposing buildings, including strip malls and even old houses. But don’t let their unimposing appearances fool you. These courts are courts of law just like any other court, and they can render binding judgments against you up to the amount of $12,000.

What should you do if you’ve been sued?

First of all, it’s important that you call an attorney right away. An attorney can help you figure out if you’ve properly been served with the lawsuit as well as whether the company suing you actually has a right to proceed against you. In addition to a civil complaint that’s filed against you, you’ll also receive a summons to the Magisterial District Court for a specific date and time. This is the date of your trial in front of a Magisterial District Judge (MDJ). Accordingly, when you receive the Complaint, the clock is ticking for you to develop your defense and prepare to meet the accusations head-on.

If a judgment is obtained against you in the Magisterial District Court, you have a right to appeal within 30 days. If you don’t appeal, this judgment becomes final and binding and can be used to execute against the possessions you own, including any real estate you may own, your car, and even your bank account.

In fact, with a valid judgment in hand, a creditor can even ask a sheriff to come with them and go through your house and sell off personal possessions you own. Obviously, you don’t want any of these things to happen, and it’s extremely important that you take aggressive steps to defend yourself.

We can help.

At Cornerstone Law Firm we help clients who are dealing with credit card and other debts to figure out whether the suit against them is valid, to determine proper defenses and in some cases, even to bring a counter-suit against a credit card or investment company for invalidly pursuing a debt. Finally, bankruptcy can sometimes offer the appropriate relief from credit card debt.

Call the Cornerstone Law Firm today, and let’s discuss how we can help you with your debt situation.

When to Settle Litigation

When you are locked in litigation with a foe, one of the most important things to determine is when the time is appropriate to settle litigation, even if it means compromising your overall claim. When you first file a complaint and start a lawsuit against someone or when you’re first sued, it’s easy to become extreme and say that you’re going to fight to the bitter end no matter the cost! Reality usually sets in fairly quickly, however, as legal bills, costs, and the emotional toll of litigation begin to make you reconsider. There are several factors that you should consider in determining how far to push your lawsuit.

Costs

One factor is the overall amount involved. In lawsuits over small amounts of money, it’s best to decide right up front how much you’re willing to walk away with without having to spend a fortune on the costs that are associated with litigating. One of the reasons this is so important is because litigation ultimately acts sort of like a poker game. The more cards that are revealed, the more you know as to whether you have a strong hand. Furthermore, at the end of the hand, you may be faced with an all-or-nothing proposition.

Will the jury buy your theory of the case, or will they buy your opponent’s? When you factor in the likelihood of winning or losing a suit, settling a case can eliminate the uncertainty and avoid much of the costs.

Emotional Strain

As noted above, the other thing to think about is the emotional strain of litigation. Is this a mere business dispute in which you’re not personally or emotionally invested? Are you part of a large corporation making business decisions and it doesn’t affect your personal life if you have to go and testify in a deposition? Or is this dispute between you and your long-time business partner that has torn your two formerly-close families apart? Would you prefer reconciliation over the money at issue?

There is a cost to litigation that goes far beyond what can be measured in dollars and cents, and it is important to take that into consideration when deciding when to settle.

Your Best Interest Matters to Us

When we represent clients in litigation, we seek to represent their best interests. This means that you are always in the driver’s seat to decide when to settle and when to push forward. It also means that we’re willing to settle early for you, even if it means we’re not going to make as much money in the case. We seek to have your best interests at heart at all times.

If you have questions about your lawsuit, whether it’s ongoing or merely one that you’re considering bringing, call the Cornerstone Law Firm today, and let us discuss with you how we can represent your best interests.