December 11, 2006, by John A. Lassey[1]

Your restaurant has been in the family for more than half a century. You took it over when your father retired in 1983; he took it over from your grandmother and grandfather who started it in 1946. Recently, while you were going over the accounts in your office, one of your waitresses knocked on the door and informed you that a deputy sheriff was waiting outside to speak with you. Such announcements usually do not portend good news so, when you left your office to speak with the deputy, it was with some reluctance.

The conversation was brief. The deputy handed you some official-looking papers. After you acknowledged receiving them, he left.

The document you received is entitled “Writ of Summons.” It was signed by the clerk of one of New Hampshire’s eleven superior courts and also by the attorney who prepared it. Additionally, it was verified by Mr. & Mrs. John & Edith Doe, who are identified as “the Plaintiffs.” The pre-printed portion of the document states that it is “returnable the first Tuesday of” the following month, a date that was three weeks away. The rest of the document is entitled “Declaration” and begins as follows: “In a plea of the case, for that on or about August 21, 2005, the defendant XYZ Restaurant, Inc., was the owner of certain premises located at . . ..”

The declaration goes on to relate in somewhat arcane legalese that Mr. Doe, while a customer in your restaurant, was served the special of the day and that it caused him to become violently ill within twelve hours thereafter. After expending much time and treasure upon doctors, hospitals, etc., and losing many weeks from gainful employment, he reached a medical endpoint; however, he was never able to regain the state of health he enjoyed prior to the day when he visited your establishment. In this narrative, you and your company are accused of negligence and of breaching implied warranties of merchantability and of fitness for a particular purpose under the Uniform Commercial Code.[2] Additionally, Mr. Doe claims that your company should be held strictly liable for selling a defective and unreasonably dangerous product. A jury trial on all issues is demanded, and the court is asked to award money damages to compensate Mr. Doe for his medical bills, lost income, pain and suffering and loss of enjoyment of life.

Toward the end of the declaration, Edith Doe makes a claim for “loss of consortium” as a result of all of the problems experienced by her husband.[3]

You vaguely recall having received a letter a couple of years ago from the Does’ attorney. At the time, you reported the contact to your liability insurance carrier and subsequently gave a statement over the telephone to one of its representatives. You understood that the questions and answers were being recorded. You didn’t hear any more about the incident and, after months went by, the matter faded from your memory. Having it brought to your attention in this somewhat dramatic manner has been unnerving. Neither you nor your restaurant has ever been involved in a lawsuit before and you are at a loss concerning what to do next.

The scene just described, while uncommon, is nonetheless something that many businesses experience occasionally. However, because it is not a common occurrence, most business owners are uncertain how to deal with it.

The purpose of this article is to give some guidance to business owners who have been sued. I will try to explain something about the process and hopefully take some of the anxiety out of it.

The general information outlined here can be helpful to gaining a basic understanding of the legal process in New Hampshire, but an article of this nature can only paint a picture of the litigation landscape with a broad brush. The legal principles applicable to an actual case are highly dependent upon the specific facts involved. Therefore, when serious personal or financial issues are at stake there is no substitute for a face to face consultation with a lawyer experienced in similar matters.

Although litigation has been a part of doing business in this state since well before the Revolution,[4] it is more common now than it used to be. When something bad happens nowadays, people are less likely than in earlier times to simply accept the consequences, and are more inclined to look to the courts for resolution of their problems.

The justice system in the United States can be divided roughly into two categories: criminal and civil. Under the criminal justice system, the state enforces statutes against individuals and entities by imposing penalties for infractions. The aim of the civil justice system is redress, rather than punishment, with the state providing a forum for resolution of conflicts rather than acting as an enforcer.

Together, tort law[5] and contract law make up the bulk of cases which occupy the civil justice system. Contract law deals with disputes arising from rights and responsibilities which are set by agreement. Resolution of such cases usually requires interpretation of a written or oral agreement to determine who assumed the risk that things would not go as planned. The focus of this article, however, is on tort law rather than on contract law. Tort law deals with obligations set by law, which arise from the nature of activities or relationships.

Most lawsuits claiming money damages for personal injury will be governed by the principles of tort law. With some exceptions, most such cases require a showing of fault, and involve an allegation of negligence.[6] A plaintiff alleging negligence must prove: (1) that the defendant had a legal duty to the plaintiff to exercise care for his or her safety; (2) the defendant negligently breached that duty; and (3) as a result, the plaintiff was injured.[7] The law that will be applied to these issues has evolved over time on a case-by-case basis. This is the so-called “common law” or judge-made law.

Often these days, the first element of a negligence claim (the duty of care) will be established by statute or local ordinance. For example, drivers of automobiles have always been governed by a common law duty to exercise reasonable care so as to avoid injury to others on the roadway. Drivers are also under a legislatively enacted duty to obey the statutes that govern the operation of motor vehicles – the so-called Rules of the Road.[8] If there is a collision at an intersection controlled by a set of traffic lights, for example, it is usually the driver who had the red light who is held to be primarily responsible for the accident.[9]

Whether the nature of a relationship or activity gives rise to a duty of care under the common law will depend on whether injury to people such as the plaintiff is foreseeable.[10] However, just because it may be foreseeable that an activity will cause harm to one class of people, it may not be foreseeable that the same activity would cause harm to others. In a famous case of the early 20^th Century, the employees of a railroad were accused of negligently causing a passenger to drop a wrapped package he was carrying. Unbeknownst to the railroad employees, the package contained fireworks. The resulting explosion caused a set of scales some distance from the event to become dislodged and to fall on another person (the plaintiff). The court in that case held that since injury to the plaintiff was not foreseeable to the railroad employees, there was no duty of care as to her, even if there might have been a duty of care to the passenger with the package.[11]

“Negligence is the failure to use reasonable care. Reasonable care is the degree of care which an ordinary, prudent person would use under the same or similar circumstances.”[12] Generally speaking, the more an activity has potential for harm, the more effort will be expected of the actor to avoid that harm. For example, while a company hauling milk in tanker trucks must use a certain amount of care to avoid getting into an accident, far more care will be expected if the company hauls tankers full of chlorine gas or liquid propane.[13]

Put in economic terms, the primary purpose of tort law is to properly allocate the cost of risky activities. If operation of your business causes an unreasonable risk of harm to others, the aim of the law is to shift the cost of that harm from the persons who were injured to you – and ultimately to your customers, who must eventually be charged those costs when they purchase your goods or services.[14]

Society recognizes that businesses and their customers must not be forced to bear the costs of all harm that may be related to the business. For example, the fact that one of your trucks happens to be at an intersection at the same time as another vehicle does not, of itself, mean that your company will be held responsible for the collision that takes place as a result. We need to know more to determine who must ultimately bear the cost of the collision. Who had the green light – or the stop sign, for example? It is when there is a dispute concerning the effect of the rules that litigation results. Who should be held responsible, the injured person or someone else?

A company can only act through its people; therefore, the duty of care is, in reality, imposed upon the people associated with the company, whether the company is a sole-proprietorship, a partnership, a limited liability company, or a corporation. A company’s legal responsibility for the actions of its people stems from the doctrine of respondeat superior. This is an ancient Latin phrase meaning “let the superior give answer.” It is the legal principle under which an employer is held responsible for the acts of an employee done within the scope of his or her employment.

The more your company is in contact with the public, the greater the chance that at some time or another an injury will result from that contact. This is something you have to budget for if you run a business. One way or another you have to factor in and plan for the cost of litigation. Most businesses, of course, do this by buying liability insurance; however, it is increasingly common for some of the larger businesses to become self-insured for some or all risks associated with their operation.[15]

The opening paragraphs of this article describe the most common way in which a lawsuit begins in this state. The plaintiff (the person claiming to have been injured by the fault of another) hires an attorney who drafts the writ of summons and causes it to be served on the person he or she claims should be held responsible. If the writ is to be served upon an individual, it must be given to that person in hand or left at that person’s usual place of residence by a deputy sheriff of the county where the person resides.[16] If the writ is brought against a corporation, service is usually made upon one of the company’s officers or directors[17] or upon its registered agent.[18]

If the lawsuit involves a question of federal law,[19] or if the parties are citizens of different states,[20] the lawsuit may be brought in federal court,[21] where the procedure for commencing the action is somewhat different. For one thing, in federal court the document in which all of the allegations are made is called a “complaint.” It may be served upon the defendant by anyone 18 years or older who is not a party to the lawsuit.[22] In common practice, most plaintiffs’ attorneys will have service made by a deputy sheriff of the county where the defendant resides or has its primary place of business, the same as if the matter were brought in state court.

In federal cases, rather than going to the expense of having someone make actual service of process, it is more common for plaintiffs’ attorneys to rely on a provision of the law that allows them to send a copy of the complaint directly to the defendant by mail along with a form to sign waiving further service of process. If the defendant refuses to sign that waiver, he or his company can get stuck with paying the cost of having formal service made by a deputy or someone else.[23]

If the lawsuit could have been brought in federal court, but is instead brought in state court, the defendant may be able to have the matter removed from the state court to federal court.[24] If the only basis for removal, however, is diversity of citizenship, and if any defendant is a citizen of the state where suit is brought, removal is not allowed.[25]

If the defendant is located outside the state, formal service is normally made on the New Hampshire Secretary of State in combination with registered or certified mail directly to the defendant. This is the normal way of making service on a non-resident individual under New Hampshire’s so-called “Long Arm Statute.”[26] Service on an out-of-state corporation requires only that the suit papers be served on the company’s resident agent, if it has one, or sent by registered or certified mail if it does not.[27]

There are specific requirements that must be met concerning service of suit papers, or “process.” Therefore, the first item of business with which you should be concerned after being served is to determine whether the manner of service was adequate under the law. The rules that govern this can be complex, so you should speak with an attorney familiar with civil litigation as quickly as possible.

The trend these days for plaintiffs’ attorneys is to request that the defendant’s attorney, if known, accept service – with the client’s permission, of course. If there is nothing unusual about the situation, it is normally in the defendant’s best interest to agree to this course of action, since it avoids the embarrassment of having a deputy sheriff serve the papers in front of the business’s employees, customers, etc. Your attorney should make sure that none of your rights are waived, except the formality of service.

The mere fact that a plaintiff has brought a lawsuit doesn’t mean that anyone is being held responsible or that anyone will be held responsible for an incident, injuries, or an accident. Nor does it mean that there has been some sort of official stamp of approval on the plaintiff’s cause of action. Nobody needs permission to bring a lawsuit. People can sue anyone for just about anything they want, so long as they can make plausible arguments in support of their claims.[28] The filing of a complaint or writ of summons is just the means, that is, the process for placing a dispute, real or imagined, into the system so that it can be resolved.

On the other hand, this does not mean that a lawsuit is something that you should ever take lightly. A lawsuit is usually commenced only after an attorney on the other side has made a business judgment that filing suit against you is in his or her own and the client’s best interest. Most plaintiffs’ attorneys are paid on a contingency basis. That is, if they win, they are paid a percentage of the money awarded to their clients;[29] if they lose, they are paid nothing. Depending on the experience of that attorney, he or she has usually evaluated the facts and the law and has determined either that there is a reasonable chance of success or that the size of a potential money award for a substantial injury outweighs the risk of failure. The worst thing you can do after receiving a lawsuit is to underestimate your opponent or to brush off the case as meaningless or worthless. You need to get over your shock at having been sued as soon as you are able to do so. You have to be objective and begin to see the lawsuit from the standpoint of your opponent.

Your first reaction at being sued might be (and probably will be) a sense of anger or frustration, particularly if you had no prior warning that it was coming. But you need to get over this emotional reaction quickly. Don’t waste time thinking that “pirates like the plaintiff’s lawyer should be forced to walk their own plank,” or at least legally prevented from bringing groundless lawsuits like the one that was just served on you. Don’t confuse what ought to be with what is. The facts are: (1) that a lawsuit has been brought and (2) it is not likely to go away before you and your insurance company spend a considerable amount of time and money on it.

There are times when your initial reaction to a lawsuit may be entirely justified. A few lawsuits are subject to dismissal at an early stage. Remedies are available by statute to a defendant against a plaintiff and/or his or her attorney who file a clearly frivolous lawsuit. These include, among other things, reimbursement of your legal fees or those of your insurance company.[30] And under the common law, if a plaintiff files a lawsuit that clearly fails to state a cause of action under well settled law, the defendant may be entitled to reimbursement of the costs of litigation up to the time of dismissal.[31]

Dismissal of a lawsuit as frivolous at an early stage of the proceedings, however, is by far the exception rather than the rule. In most cases, judges are reluctant to deny a litigant the right to seek money damages for injuries that are legally the responsibility of someone else – a substantial constitutional right in this state.[32] A lawsuit must normally “go the distance” and be either settled by agreement of the parties or presented to a jury through the mechanism of a court trial before it will finally be resolved. This does not mean that you cannot or should not work through your trade association or your legislators to change the law to make it more difficult for non-meritorious cases to be brought in the first place. While you are doing so, however, your best interests will demand that you concentrate on defending the case at hand based on the law as it exists when the suit is filed. The most effective way to discourage non-meritorious lawsuits is to win them.

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