Served by Fora: 8 Documents to Pull Before You Respond

Do not ignore this lawsuit. Wait too long, you may lose your case by default. Before you respond to Fora, pull eight documents and understand them before you pick up the phone. They are the summons and complaint, the court docket, the proof of service, the confession of judgment and its affidavit, your signed agreement and guaranty, your payment records, the offer disclosures, and any bank restraint notice.

1. The summons and complaint

These papers are what you are served with. The summons says who is suing you, where to respond, and how long you have to respond. The complaint explains why they are suing you. In January 2024, Fora Financial Warehouse LLC sued a merchant and its personal guarantor for breach of contract in Nassau County Supreme Court. Check to see whether you are named personally.

A defendant in New York has 20 days to respond if he is handed a summons. If the defendant is served by certain substituted service or the Secretary of State, then it is 30 days after service is complete. If you are not handed a complaint with the summons, you can ask for one in writing. If the plaintiff does not give it to you in 20 days, you can ask the court to dismiss the case for that reason.

2. The court docket

Public records about your case are kept in the court clerk’s office. The docket sheet is the index to the court file. Be sure you get the entire docket. Do not rely on the plaintiff’s copy of the court docket. Call the court clerk or pay for your own copy. It may show when Fora has appeared in court, what filings have been made, what orders have been issued, and whether a default judgment was entered or the case has been dismissed.

3. The proof of service

It is the proof the plaintiff has for how and when you were served with the lawsuit. How and when you are served affects how soon you have to file a response to the lawsuit. The proof should also show when and where the summons was handed to you or left for you, or whether it was mailed to you and when, and whether a complaint was handed to you with it. Do the address and other information match your own information? Service is a technical requirement. If it is not right, you can fight the lawsuit.

4. The confession and its affidavit

The confession of judgment is a powerful tool. The plaintiff often does not have to sue you to get a judgment. In New York, a confession of judgment may be filed only in the county where the signor’s affidavit stated he was living at the time, or where the person lives at the time it is filed. A business lives where it has its place of business. It is important to find out where you were living at the time you signed the document and when it was filed. Look also at the amount of the debt and date of default stated in the affidavit. These may be wrong too.

5. The agreement and guaranty

Is this the agreement and guaranty that you signed? Does it look the same to you? Are the signatures yours? Did Fora cross out or add anything after you signed?

Check to see who signed the agreement and guaranty. Is the person named an officer or owner of the defendant, as described in the contract? If the contract says the signer was a managing member, was he really? That issue can be challenged. Look to see in which county the case was filed. Is it the county where you or the defendant live? Is it the same county named in the contract?

6. Your payment records

Review every transaction from the start to the present, to figure out whether the balance is right. Look at the dates and amounts of your payments. Do they confirm the default date in the affidavit? Also check to see whether your payments have been properly credited.

If the records show that a fixed amount is due no matter what, the advance may be treated as a loan. In New York, the court will probably weigh any reconciliation clause and whether the contract was for a finite term. It may even look at whether the funder has recourse against you if your company files for bankruptcy. These and other features of the contract may be key to showing a merchant cash advance should be treated as a loan.

Why does it matter? A loan finding does not automatically erase a judgment, but it can strengthen attacks on the agreement, the amount claimed, and the right to enforce the confession of judgment. In New York, a corporation cannot raise an usury defense to a civil claim. One exception to this is criminal usury. A person guilty of criminal usury knowingly charges over 25% a year.

7. The offer disclosures

The New York Commercial Finance Disclosure Law covers certain providers of financing up to $2,500,000, including sales-based financing. It requires those providers to give standardized disclosures with the offer. It is worth checking to see if Fora should have given you a disclosure. Get your own copy of this disclosure.

8. Any bank restraint notice

If you receive a bank restraint from Fora, copy it and review it carefully. It is important to act right away.

If your account is frozen, the funder probably already took the first collection step by getting a judgment. You can ask the court for a temporary stay of the freeze. Or ask the court to order the funder to show cause why the bank restraint should not be lifted. Or file a motion to vacate for excusable default within one year after you are served with the judgment and notice of its entry.

Do Not Call Too Soon

Do not call too soon. It is better first to figure out your defenses and take these steps. Then you can ask the funder to start up a new negotiation or workout. The better your grasp of the information, the greater your chance to pick the best next step.

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.