Mom was just helping out in the business. She didn’t speak much English and she certainly didn’t understand the U.S. legal system. She just wanted her son’s freight business to succeed in America.
Her son, Mukhabbat Vasfieva, had listed himself as the registered agent of his company, USA Freight, LLC. The registered agent’s job is to accept service of process, to properly handle a notice of a lawsuit. It is an important responsibility because you only have 30 days in most states to file an answer to the lawsuit. If no answer is filed a default judgment can be entered, whereby you lose the case without even being heard in court.
Mukhabbat’s mom was at the business the day a certified letter was received. She signed for it and set it aside. It was just more mail. How could she know the letter contained important, time-ticking legal documents?
The letter contained a notice that a lawsuit had been filed by the John W. Judge Company claiming USA Freight hadn’t paid them for $4,405.05 in engineering services. When no one from USA Freight responded to the court a default judgment was entered. USA Freight learned of their mistake when Judge Company started to collect on the judgment pursuant to a court approved writ of execution to take USA Freight’s property.
With two strikes against them – the default judgment and the writ of execution – USA Freight’s attorneys went to court arguing “excusable neglect.” Mom didn’t speak much English and wasn’t really involved in the business. Their neglect in answering Judge Company’s complaint was excusable because of dear old Mom’s mistake.
The trial court agreed but Judge Company didn’t. They appealed the decision up to the next level. The Ohio Court of Appeals (2018-Ohio-2658) didn’t buy the argument of excusable neglect. It didn’t apply to one’s own carelessness. Whose responsibility was it to provide for an address where certified mail could be properly received? You can’t blame Mom for your lax procedures. USA Freight lost.
The lesson here is that you need a responsible and professional registered agent to receive and promptly notify you of a lawsuit. Using your home address is not a good idea for three reasons. First, if you travel at all there is a good chance you won’t get notice. A default judgment will follow. Second, as your own registered agent your home address is listed on the state’s website for all to see. Do you really want your tenants to know your home address? We have some horror stories to prove you do not. Finally, when it is your responsibility to set things up right do you want to blame Mom (or your spouse or your friend) for a default judgement?