Another Possible Problem Caused by Covid-19: Check the Accuracy of Your Address for Service of Process with State Authorities and Avoid Default JudgmentsOn August 3, 2020 by Schnader in Litigation
Cary Stewart Sklaren and E. Taylor Hodges published a client alert, “Another Possible Problem Caused by Covid-19: Check the Accuracy of Your Address for Service of Process with State Authorities and Avoid Default Judgments.”
Commercial entities periodically move their facilities around the United States, from one office or factory or retail outlet to another. When such movement – interstate, or even intrastate – involves large companies with in-house legal staff, or headquarters, or major transfers of personnel, it is traditionally rare for the business to fail to alert the old state about the movement to a new, out-of-state address for service of process.
In the time of Covid-19, however, there is enormous disruption of businesses of all sizes, particularly small and medium-sized businesses, and numerous closures of places of business in many locations. It is crucial for such businesses to inform state authorities of the new address, in-state or out-of-state, to which service of process should be sent. If the address of an entity – whether a corporation, limited liability company, or other form of business requiring state authorization – is outdated, and process in a lawsuit is served at the old location, the entity may never get notice of lawsuit and may be subject to a default judgment. The same problem could occur for the change of address of a “registered agent,” whether a service company, a law firm, another entity, or an individual.
While a default judgment can often be vacated in many states, it will unnecessarily result in legal fees and expenses, and even possible disclaimer by carriers if the lawsuit involved an insured matter. A recent intermediate New York appellate opinion, not involving a carrier, is a case in point and a timely reminder of the importance of these issues due to the economic impact of Covid-19.
Please visit our Covid-19 Resource Center for additional guidance.