Served by Edge Capital? 5 Deadlines That Decide the Case

If Edge Capital has had you served, you have 20 to 30 days to respond. The precise deadline depends on the circumstances. Getting the papers in the case means the deadlines have started. If your response is late, the court can enter a default judgment. The main thing, therefore, is to make sure you have a lawyer to respond as soon as possible.

1. The answer deadline

Which of these applies depends on factors like whether you were served in New York or whether the case is in state or federal court. If a server handed you the summons in New York, you have 20 days. If someone else accepted the papers, or they were nailed to your door, you have 30 days after service is complete. In federal court, you have 21 days.

“Complete” has a special meaning in the legal world. A server can deliver legal papers by leaving them with someone who seems to work there or nailing them to your door plus mailing. But that’s not yet enough to trigger the 30 days. Service isn’t complete until 10 days after the server files proof of service with the court. Negotiations with a funder do not extend this 30-day period.

The papers of the case will say whether the litigation is in state or federal court. Your funder has its own deadline, too. In New York a suit for breach of contract generally must be started within six years.

2. The removal window

If your case was filed in a state court in New York and you want it transferred to federal court, your lawyer has a limited time to file the notice of removal: 30 days after you receive the complaint. This deadline means that getting the documents into a lawyer’s hands as soon as possible is key.

3. The hearing date

Some cases in New York can bypass the normal complaint and summons and start by motion for summary judgment (CPLR 3213). The papers will set a hearing date. Before that date no judgment can be entered against you in a default. That makes marking that date in your calendar critically important.

Make sure to scan all the papers for dates. If a funder has served a New York corporation through the Secretary of State, it must also mail a copy to the company’s last known address. This mailing must happen at least 20 days before any default judgment could be entered.

It’s also a good idea to check your contract for a confession of judgment. Confession of judgment clauses permit someone to file for a judgment that isn’t subject to the normal lawsuit process. Some states don’t allow them, and others restrict their use. So a first step is to find out if the agreement has a confession of judgment, whether any has been filed, and who signed it. In New York, a confession of judgment can be filed only within three years after the affidavit was signed.

4. The one-year clock

Once a judgment is entered in New York, a funder may try to enforce it. For example, it may try to seize your bank accounts. How to fight it depends on the reasons why and how long ago it happened.

How fast you must move depends on whether a written notice of entry of judgment was served. If you were served, you have a year from that date to ask the court to vacate the judgment, on proof of an excusable default. This is not a year from when the judgment was entered. When the clock starts and stops is a technical question, so get the papers to a lawyer promptly.

If you were never personally served and never received notice in time, CPLR 317 lets you ask to defend the lawsuit, within one year after learning the judgment was entered and within five years of entry. You must show a meritorious defense.

The one-year clock can cut the other way. If the funder served the papers but does not take steps to enter a default within a year, the court must dismiss the complaint as abandoned unless the funder shows sufficient cause.

5. The appeal clock

If you lost a judgment or order after the case was fought, in New York you may have a right to appeal and have a state court review the decision. An appeal as of right in New York must be taken within 30 days after you are served with the judgment or order and written notice of its entry. That window is short, so make sure you don’t delay in getting your paperwork to a lawyer.

This Week

This week, consider the following. Gather every page you were served. Then write down the date the papers arrived and how they were delivered. Collect the funding agreement, the statements, and the personal guarantee. Don’t transfer money or close any accounts until you have legal advice. Whatever you do, resist any pressure to sign a new funding or settlement agreement without advice.

A free contract review costs nothing and takes a day or two. Call (888) 837-7053, or send the agreements to Delancey Street for a straight read on your options.