Page 44 - GIADA-Jan-2018-Final

LEGAL

Keep Your Dealerships Corporation/LLC

Information Current

By: J. Eric Gregory, Attorney, Gregory Law Group, LLC, eric.gregory@thegregorylawgroup.com

Many of you have ambitions of getting a lot party does not receive notice of a lawsuit, process should be reasonably calculated to
of the details that slipped through the cracks the court will dismiss the case. This situation apprise interested parties of the pendency of
over the last days, weeks, months or even is not necessarily the case for entities such the action and afford them an opportunity
years as we are starting out 2018. This is as corporations, LLC’s or similar which fail to be heard. The reasonableness of the
not something to procrastinate on. You can to keep their information current with the notice must be considered in light of all the
probably check this off your list in about the secretary of state. circumstances. (Greene v. Lindsey, 456 U.S.
same time it takes to read this short article. 444, 102 S. Ct. 1874, 72 L. Ed. 2d 249 [1982]).
The rewards of doing so could end up Although an individual may be able Here if you fail to provide an accurate address
saving you a default judgment against your to avoid service by evading accepting or a registered agent that can be served the
dealership or even putting your dealership service, generally corporations cannot. For state considers it reasonable in light of the
out of business entirely. corporations or similar entities, service can circumstances to serve the Secretary of State.
be accomplished by "substituted service,"
In Georgia, you need to register your entity which in some cases, for example, is If that’s not bad enough for the entity that
(i.e., your Corporations, LLC, etc.) each year. performed by giving the document(s) to a has an incorrect or outdated address or
When you register, among other things, you responsible adult. This manner of service registered agent information, it gets much
need to make sure that your principal office is probably not a surprise as dealerships worse. Once you get notice of a lawsuit
address and your registered agent information often are served when an officer, manager via the Secretary of State, (without really
is accurate and correct. Go to https://ecorp. or registered agent accepts the documents knowing your dealership was sued), you
sos.ga.gov and click on the “Business Search” for the dealership. In these cases, the idea have to answer the lawsuit. In most cases,
tab and then enter your entity name and that the party being sued is getting notice you must file an answer within 30 days of
check to see if the information is accurate. still plays out in that the person who accepts the service (you didn’t know about). If you
Generally, the person that initially filed to service is likely to turn the documents over fail to answer, the Plaintiff’s lawyer can file
form the entity puts in the data and often the to a responsible person in the dealership. for default judgment and once the default is
filer is listed as the registered agent. When I granted the case is determined without your
was a dealer, I always liked my lawyer to be What may come as a surprise is that Personal being able to defend your dealership, and you
the registered agent as they were the first to Service for a corporation or similar entity will lose on default without a trial. When the
know when problems became litigious. can also be made to the Secretary of State default is entered, a damages hearing is the
in cases for example when the corporation next step to determine how much you will
In addition to many statutory and other can’t be served because the address is not have to pay the Plaintiff. Again, if you cannot
requirements, one good reason to make accurate or the registered agent can’t be be found, the court will award damages.
sure the information is up to date relates to found. Under OCGA 9-11-4(e)(1)(A)
“personal service.” Personal Service from a “Service shall be made by delivering a copy If you don’t have your address, registered
legal perspective is delivering a summons, of the summons attached to a copy of the agent, etc. up to date, all this can happen
complaint, or other legal document or notice complaint as follows: If the action is against before you know it and the next thing you
which must be served by handing it directly a corporation incorporated… under the know you will owe the Plaintiff. If you
to the person named in the document. laws of this state…, to the president or other don’t pay your bond may be called upon to
Dealers think that to get sued and be held officer... provided that when for any reason pay. When your bond pays generally, you
responsible for damages the party being service cannot be had in such manner, the will owe the bondholder, and your bond
sued must know about the lawsuit or other Secretary of State shall be an agent of such contract will likely have a personal guarantee
action (receive notice). This erroneous corporation upon whom any process, notice, and high-interest rates. You can use your
belief is largely accurate because logically or demand may be served…”. What this phone or IOS and go online and check to
any party who is being sued is entitled to means for the owner of a dealership that is see if you are appropriately registered and
advance notice of the suit and subsequently a corporation, LLC or similar is, if you don’t confirm that you can be served so that you
the opportunity to defend themselves. If you have a proper address or a registered agent can defend your dealership in the event you
are being sued as an example, notice consists that can be served, the Secretary of State can have an issue. Better yet call your lawyer or
of a copy of the complaint and a summons to be served as your agent, and your dealership if you don’t have one let me know and list a
appear in court. Where things can get sticky will be construed as having notice when you registered agent that you are confident will
and lead to significant issues is the fact that actually don’t know you were sued. The U.S. be in a position to receive notice on your
for individuals and in most situations, if a Supreme Court has ruled that service of dealerships behalf. n
42 | GIADA Independent Auto Dealer JANUARY 2018