What Should A Texas Business Do After Being Sued?
A step-by-step guide to responding to a lawsuit in Texas courts.
If your business has been served with a lawsuit in Texas, the most important thing to understand is that deadlines begin running immediately. Texas courts move quickly, and failing to respond in time can result in a default judgment against the company.
The steps below explain the basic process that most Texas civil lawsuits follow and what business owners should do after being served.
Step One: Read the Citation Carefully
A civil lawsuit begins when the defendant is formally served with a citation and petition.
The citation is issued by the court clerk and informs the defendant that a lawsuit has been filed. It also states the deadline for filing an answer.
Many defendants focus only on the petition and overlook the citation. That is a mistake. The citation contains the critical response deadline.
Texas Rule of Civil Procedure 99 governs the issuance and service of citation.
Step Two: Understand the Answer Deadline
In most Texas civil cases, a defendant must file an answer by 10:00 a.m. on the Monday following 20 days after service. As a practical rule of thumb, I often tell clients to think of the deadline as roughly three weeks from the date they were served.
This deadline is set by the Texas Rules of Civil Procedure and is strictly enforced. If a defendant fails to file an answer on time, the plaintiff may request a default judgment under Texas Rule of Civil Procedure 239. A default judgment can allow the plaintiff to recover damages without the defendant ever presenting a defense.
Step Three: Determine Whether Your Business Must Hire an Attorney
See our article: “Can an LLC or Corporation Represent Itself in Court in Texas?”
Texas law generally requires business entities such as corporations and limited liability companies to appear in court through a licensed attorney. A detailed explanation of this rule is available in my article “Can an LLC or Corporation Represent Itself in Court in Texas?”
This rule arises from Texas Government Code § 81.102, which prohibits the unauthorized practice of law.
Because a corporation or LLC is a separate legal entity, a non-lawyer owner, officer, or employee usually cannot represent the company in court. Texas courts have repeatedly enforced this rule. For example, the Texas Supreme Court recognized that corporations must appear through licensed counsel in Kunstoplast of America, Inc. v. Formosa Plastics Corp., 937 S.W.2d 455 (Tex. 1996).
If your business has been sued in district court or county court at law, the company will need an attorney to respond to the lawsuit. Do not attempt to file an answer on the company’s behalf. Doing so can create procedural problems and may be treated as the unauthorized practice of law.
Step Four: File an Answer
An answer is the defendant’s first formal response to the lawsuit.
Texas Rule of Civil Procedure 92 allows a defendant to file a general denial, which requires the plaintiff to prove the allegations in the petition. Once the answer is filed, the case becomes contested and moves into the discovery phase of the litigation process.
Filing and Serving the Answer
Texas courts now require most pleadings to be filed through the electronic filing system (eFile Texas).
When an answer is filed electronically, it should also be served electronically on opposing counsel at the same time. The Texas Rules of Civil Procedure require parties to serve pleadings on the other side. See Texas Rule of Civil Procedure 21 and 21a, which govern service of pleadings and motions.
In my practice, I occasionally see pro se defendants file an answer with the court but fail to serve it on opposing counsel. That creates unnecessary problems. Courts expect parties to both efile and serve their pleadings. This requirement is an important part of the litigation process and should not be overlooked.
Failure to properly serve pleadings can lead to disputes and, in some situations, requests for sanctions. Proper service is a basic but important part of the litigation process.
In my practice, I frequently hear from business owners who waited too long to respond because they assumed the lawsuit would take months to move forward. Texas courts move faster than many people expect. Missing the answer deadline can create significant problems that are far more difficult to fix later.
Default Judgments Do Not Happen Overnight
Many defendants assume that if they miss the answer deadline, a judgment will be entered immediately. That is usually not how the process works.
Even when a defendant fails to answer, a plaintiff still must request a default judgment and obtain a hearing or ruling from the court. Courts typically do not enter default judgments the day after the answer deadline passes , and judges generally expect parties to follow the proper procedures before seeking that relief.
Judges generally expect parties to follow the proper procedures rather than rushing to obtain a default judgment the day after the answer deadline passes.
Another important procedural safeguard involves the return of service.
Under Texas Rule of Civil Procedure 107(h), the return of service must be on file with the court for at least ten days before a default judgment may be taken. In calculating that period, the day the return is filed and the day the judgment is signed are excluded.
This rule exists to ensure that the court has proof that the defendant was properly served before a default judgment is entered. In some cases, failure to comply with this requirement can become an issue when a defendant seeks to challenge a default judgment. I have used this rule successfully to challenge a default judgment.
Step Five: Prepare for Initial Disclosures and Discovery
Texas civil litigation requires parties to exchange information early in the case.
Under Texas Rule of Civil Procedure 194, parties must generally serve initial disclosures within 30 days after the answer is filed unless the court orders otherwise.
Initial disclosures typically include:
the names of individuals with relevant knowledge
documents supporting claims or defenses
a calculation of damages
The case then proceeds through discovery, which may include interrogatories, requests for production, depositions, and expert testimony.
Step Six: Evaluate the Case Early
Not every lawsuit proceeds to trial. Many cases resolve through settlement or dispositive motions.
Once the facts and legal issues are reviewed, a business owner and attorney can determine whether the case should be defended aggressively, resolved through negotiation, or challenged through motions.
Early evaluation is often critical to controlling litigation costs and risk.
Final Thoughts
Being sued does not mean a business will lose the case. However, ignoring a lawsuit or missing the answer deadline can lead to a default judgment and serious financial consequences.
If your business has been served with a lawsuit in Texas, understanding the procedural deadlines and responding promptly is essential to protecting your rights.
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