What to Do If Your Business Is Served With a Lawsuit in Nevada
Being served with a lawsuit can be stressful for any business owner. Whether the claim involves an accident, contract dispute, employment issue, or partnership disagreement, how you respond in the first few days can significantly impact the outcome. Understanding what to do and what not to do helps protect your business, your finances, and your legal position.
This guide outlines the key steps Nevada business owners should take after being served with a lawsuit.
Stay Calm and Read the Documents Carefully
The first step is to be prepared. Most lawsuits do not come as a surprise. If there is an incident, such as a car accident involving a company owned vehicle, or a contract dispute with a customer or vendor, you should plan on the possibility that a lawsuit will be filed at some point. Being prepared ahead of time can greatly assist with your case.
Upon receipt of notice of the lawsuit, the first step is to carefully review all documents you receive. These typically include:
- Complaint
- Summons
- Civil cover sheet (in some cases)
- Supporting exhibits
The summons will state where the lawsuit has been filed, and how long you have to respond. In Nevada, businesses usually have 20 days to file a formal response after being served. Your business will need to file a responsive pleading in the case, usually an Answer or a Motion to Dismiss if your attorney believes there are grounds for dismissal such as improper venue, statute of limitations, or failure to state a claim upon which relief can be granted. If the case was filed in state court, your attorney may also choose to remove the matter to federal court if sufficient grounds exist to do so. If you were served with a lawsuit filed in another state, you may wish to contact an attorney licensed to practice in that state.
Ignoring the documents or setting them aside can lead to serious consequences.
Do Not Ignore the Lawsuit
One of the biggest mistakes business owners make is failing to respond. If you ignore a lawsuit:
- The court may enter a default judgment
- You lose the opportunity to defend yourself
- The plaintiff may collect damages
- Bank accounts or assets could be targeted
Even if you believe the lawsuit is frivolous or incorrect, you must still respond within the deadline. Ignoring a lawsuit will not make it go away and could have disastrous consequences for your business.
NEVADA RULES OF CIVIL PROCEDURE
Contact a Business Litigation Attorney Immediately
Time matters. A Nevada business litigation attorney can:
- Review the claims
- Explain your legal options
- Identify defenses
- Prepare your response
- Help avoid procedural mistakes
Early legal guidance often leads to better outcomes, including possible dismissal or early resolution. Note: a business MUST hire an attorney to represent it in court, a business cannot appear pro se (when a non-attorney individual appears on their own on behalf).
Determine How Your Business Was Served
Proper service is required for a lawsuit to move forward. Businesses in Nevada are typically served through:
- A registered agent
- An officer or managing member
- A designated representative
If service was improper, your attorney may challenge the lawsuit or request additional time to respond. Alternatively, if your business has not been formerly served, your attorney could agree to accept service on behalf of the business. Agreeing to accept service saves time and money on having the claim formerly served, the tradeoff is that doing so gives you additional time to file a formal response and possibly negotiate a settlement with the Plaintiff.
Preserve All Relevant Documents
Once you are aware of a lawsuit, you should immediately preserve all related information, including:
- Contracts
- Emails
- Text messages
- Invoices
- Internal communications
- Employee records
- Electronically stored information
Deleting or altering documents, even accidentally, can harm your defense and may result in penalties. Bottom line, retain whatever you can, you never know what evidence might be helpful in your case, and your attorney will need all the information they can to try and help you.
Notify Your Insurance Company
Some business insurance policies cover legal defense costs. You should:
- Review your policy
- Notify your insurance carrier
- Provide copies of the lawsuit
- Follow reporting requirements
If your business has an insurance policy relevant to the lawsuit (e.g., premises liability insurance, or an auto insurance policy), contact your insurer IMMEDIATELY. Your insurance policy is supposed to protect your business from certain claims, if you fail to timely notify your insurer, it could be deemed a violation of your policy and they could deny coverage for an otherwise defendable claim. If there is coverage, your insurance company should provide a defense to the lawsuit, including retaining and paying for attorneys to defend you. This is why you pay your premiums, you expect protection if a lawsuit is filed against your business.
Avoid Contacting the Plaintiff Directly
It may be tempting to call the person or company suing you to “work things out,” but this can create problems. Anything you say could be:
- Used against you in court
- Misinterpreted
- Taken as an admission
Let your attorney handle communications to protect your legal position.
Understand Your Response Options
After reviewing the lawsuit, your attorney may recommend:
Filing an Answer
This responds to each allegation and asserts defenses.
Filing a Motion to Dismiss
This challenges the legal sufficiency of the complaint.
Filing a Counterclaim
This asserts claims your business may have against the plaintiff.
Negotiating Early Settlement
In some cases, resolving the matter early may be beneficial.
Review Your Business Structure Protections
A lawsuit is also a good time to confirm that your business structure is properly maintained. Your attorney may review:
- LLC or corporate formalities
- Separation of personal and business finances
- Operating agreements
- Contracts
Maintaining proper structure helps protect personal assets from claims against the business. You need to keep your business expenses and accounts separate from your personal life to maintain the protection the business structure is meant to provide.
Prepare for the Litigation Process
Business litigation may involve:
- Written discovery
- Depositions
- Motions
- Mediation
- Trial (if necessary)
Not every case goes to trial, but preparation is important from the beginning. The majority of a lawsuit is the discovery phase. Discovery is meant to gather relevant evidence, preserve testimony, and to narrow issues for trial. Your attorney will help prepare your formal written responses to interrogatories, requests for admission and production of evidence. If you are deposed, your attorney will be there with you to defend you during the deposition. Discovery can be a grueling months or years long process, but it is very important to sort out the relevant issues before trial can begin.
Steps to Take Immediately After Being Served
To summarize, take these steps right away:
- Read the lawsuit carefully
- Note your response deadline
- Contact a business litigation attorney
- Preserve documents and communications
- Notify your insurance carrier
- Avoid contacting the plaintiff directly
- Begin preparing your defense
Bottom Line
If your business is served with a lawsuit in Nevada, acting quickly and strategically is critical. Ignoring the lawsuit or delaying action can result in default judgment and serious financial consequences. By consulting with a qualified business litigation attorney, preserving evidence, and responding within the deadline, you can protect your business and position yourself for the best possible outcome.
Frequently Asked Questions
How long does a Nevada business have to respond to a lawsuit?
Most businesses have 20 days after being served to file a response.
What happens if my business ignores a lawsuit in Nevada?
The court may enter a default judgment, which can lead to financial liability.
Can my LLC protect me from a business lawsuit?
An LLC may protect personal assets, but only if properly maintained.
Should I contact the person suing my business?
No. It’s best to let your attorney handle communications.
