“You’ve been served” are three little words that no one wants to hear. But what exactly does that mean and what should you do when you are served with a lawsuit?
Our firm has created a checklist for when you have been served with a lawsuit, which can be located here: https://www.epsten.com/youve-been-served-lawsuits-checklist/. This article is intended to serve as a supplemental article to that checklist.
If you are served with a lawsuit, it is important to note the time, date, and method of how the lawsuit was served on you. It is important to immediately provide this information to your legal counsel, along with copies of all documents that were served on you, so that they can determine first whether service was proper and second when a response to the lawsuit is due. For example, documents served in-person have a thirty (30) day deadline to file a response while documents served via mail will provide you with an additional two (2) days to respond. If the Association does not respond by the deadline, they may not be able to protect their interests in the lawsuit.
Once you have provided your legal counsel with a copy of the documents and a detailed explanation of the date, time, and method of service, you should also provide the same to your insurance carrier. Your insurance carrier is the only one that can determine whether there is insurance coverage for the claim. Among the benefits of tendering the lawsuit to your insurance carrier is that they could accept the claim and provide defense counsel for the Association. This means that the association’s legal fees and costs would be covered by your insurance carrier.
After providing your legal counsel and your insurance carrier with a copy of the documents that you were served with, along with a detailed explanation of the date, time, and method of service, it is important that you preserve potential evidence related to the lawsuit. The Board of Directors, the Community Association Manager, and any and all employees have a duty to preserve related evidence once a lawsuit is filed. This means that you cannot delete, remove, or otherwise destroy related evidence including, but not limited to, emails, Board Meeting Minutes, Invoices, letters, photographs, video, etc. Your attorney likely will send a letter to notify affected parties of their duty to preserve evidence.
In addition to preserving potential evidence, you must also preserve the attorney-client privilege. The attorney-client privilege serves to protect client communication to or from their attorney. This includes oral or written communications whether in person, over the phone, or via email. However, the privilege only applies if it is a communication to or from your attorney. That means you should not forward any emails, documents, or other correspondence from your attorney to anyone who is not the Community Association Manager or a member of the Board of Directors. Additionally, you should not discuss the case with anyone who is not a member of the Board of Directors or your Community Association Manager. Remember, the client holds the privilege; this means the client can waive that privilege by sharing information with a third party. It is important that you do not waive this privilege by including a third party who is not subject to the privilege.
Finally, some owners within the association may request notice or information regarding the lawsuit so that they can determine whether they need to inform or notify any potential buyers or other third parties. Although the association is not required to provide this information, your attorneys can prepare a letter to the membership regarding the litigation that is informative but does not waive the attorney-client privilege.
While the three little words “you’ve been served” may not be as sweet as “I love you”, they should be taken just as seriously. Be sure to utilize the checklist we have provided to assist you if you ever hear those three little words.