How to Respond to a Lawsuit Against Your Business in Nevada
Whether it arrives by process server or through the company's registered agent, a summons and complaint requires prompt attention. The underlying dispute may involve an unpaid invoice, a disagreement among LLC members, a commercial lease, or a liability claim. In each case, the steps a business takes in the first few weeks after service can significantly affect its position for the remainder of the litigation.
This article outlines the steps Las Vegas and Nevada business owners should take after the company has been served. It provides general information only; the appropriate response in any case depends on the allegations in the complaint and the specific facts involved.
Step 1: Identify the Deadline to Respond
The first priority is the response deadline. In Nevada district court, a defendant generally must serve an answer "within 21 days after being served with the summons and complaint." NRCP 12(a)(1)(A) . A longer period applies if the defendant timely waived formal service, and cases pending in federal court or justice court are governed by their own rules.
Record the date the documents were received, how they were delivered, and who at the company accepted them, and provide the complete set of papers to counsel as soon as possible. That information allows your attorney to evaluate whether service was proper and to calculate the actual deadline. Any extension offered by opposing counsel should be confirmed in writing.
Step 2: Understand the Consequences of Missing the Deadline
If a business fails to respond on time, the plaintiff may request entry of default and then a default judgment. A default judgment allows the plaintiff to prevail without the court hearing the defendant's position, and it may be enforced against the company's bank accounts and other assets.
Nevada courts recognize that "good public policy dictates that cases be adjudicated on their merits." Kahn v. Orme, 835 P.2d 790 (Nev. 1992). In appropriate circumstances, a court may set aside a default, for example where the failure to respond resulted from mistake or excusable neglect and the defendant acted promptly. The same court cautioned, however, that litigants "may not properly be allowed to disregard process or procedural rules with impunity." Id. Relief is discretionary, the time limits for seeking it are strict, and a business that delayed after being served should not expect a favorable result. Meeting the original deadline is generally far less costly than attempting to undo a default.
Step 3: Implement a Litigation Hold
Once litigation is filed or reasonably foreseeable, a business has a duty to preserve evidence relevant to the dispute. Nevada law presumes "[t]hat evidence willfully suppressed would be adverse if produced." NRS 47.250(3). Even the negligent loss of evidence can result in an adverse inference instruction, and serious misconduct can lead to dismissal or default. See Young v. Johnny Ribeiro Bldg., Inc., 106 Nev. 88, 787 P.2d 777 (1990).
The company should consult counsel to evaluate any routine deletion policies and instruct the individuals involved to preserve relevant materials, including:
Email, text messages, and Slack or Microsoft Teams communications
Contracts, invoices, proposals, change orders, and handwritten notes
Accounting records, bank statements, and payment histories
Photographs, video, and data stored on phones, laptops, and cloud accounts
Counsel can prepare a written litigation hold notice for employees, which also documents that the company took its preservation obligations seriously from the outset.
Step 4: Notify Your Insurance Carrier
Many business owners do not consider whether insurance covers a lawsuit. Depending on the nature of the claim, a general liability, professional liability (E&O), directors and officers, or employment practices policy may provide a defense. Under Nevada law, "[t]he duty to defend is broader than the duty to indemnify," and an insurer generally must defend when the facts give rise to a potential for coverage under the policy. United Nat'l Ins. Co. v. Frontier Ins. Co., 120 Nev. 678, 99 P.3d 1153 (2004).
The business should locate its policies and report the lawsuit promptly. Nevada has adopted a notice-prejudice rule, under which an insurer asserting a late-notice defense "must demonstrate that notice was late and that it was prejudiced by the late notice." Las Vegas Metro. Police Dep't v. Coregis Ins. Co., 256 P.3d 958 (Nev. 2011). Prompt notice nonetheless avoids an unnecessary dispute with the carrier. Where an actual conflict of interest exists between the insurer and the insured, the insured may be entitled to independent counsel at the insurer's expense. State Farm Mut. Auto. Ins. Co. v. Hansen, 357 P.3d 338 (Nev. 2015). An attorney should review the policy in light of the allegations in the complaint.
Step 5: Avoid Direct Contact with the Plaintiff and Public Comment
Although it may be tempting to contact the plaintiff directly to resolve the matter, doing so is generally inadvisable. A party's own statements may be offered as evidence against it. Nevada excludes "[e]vidence of conduct or statements made in compromise negotiations" when offered to prove liability, but that protection is subject to exceptions and may not extend to every informal conversation. NRS 48.105. Settlement discussions are best conducted through counsel.
The same caution applies to social media. Owners and employees should refrain from posting about the lawsuit, the plaintiff, or the underlying dispute, and should assume that opposing counsel will review anything published online.
Step 6: Retain Counsel for the Business
An individual may represent himself or herself in a Nevada court, but a business entity generally may not. The Nevada Supreme Court has held that "[n]either a corporation nor a trust may proceed in proper person." Salman v. Newell, 885 P.2d 607 (Nev. 1994). An owner or manager who is not a licensed attorney therefore cannot file papers on behalf of a corporation or LLC in district court. The principal exception is small claims court, where an entity "may be represented by its director, officer or employee" on claims not exceeding $10,000. NRS 73.012 ; NRS 73.010.
Business owners should look for counsel experienced in commercial litigation in the Nevada courts who will take the time to understand how the business operates.
Step 7: Evaluate the Complaint and Available Responses
After reviewing the complaint, counsel can advise on the appropriate response. Common options include:
An answer responding to each allegation and asserting the company's defenses
A motion to dismiss if the complaint fails to state a legally cognizable claim
Counterclaims against the plaintiff, or third-party claims against others who may share responsibility
Early settlement discussions, where resolution makes business sense
A motion to dismiss is not appropriate in every case. Under Nevada's standard, a complaint "should be dismissed only if it appears beyond a doubt that [the plaintiff] could prove no set of facts, which, if true, would entitle it to relief." Buzz Stew, LLC v. City of N. Las Vegas, 124 Nev. 224, 181 P.3d 670 (2008). Because that standard favors the plaintiff, a weak motion may add expense without meaningful benefit. In addition, certain counterclaims and affirmative defenses must be raised in the answer or they may be waived. NRCP 8(c) and 13(a).
The forum also affects timing and cost. In Clark County, certain complex business disputes may be assigned to a dedicated business court. At the other end of the range, most Nevada district court actions in which the amount in issue does not exceed $100,000 per plaintiff must first be submitted to nonbinding arbitration. NRS 38.250(1)(a) [.
How you conduct yourself in the first few days of litigation can often determine the financial future of your business for years to come. Consulting with qualified, experienced counsel should help you to avoid making catastrophic mistakes.
Mike Beede, Partner, Andersen Beede Weisenmiller, Commercial Litigation and Real Estate, and Complex Transactions
Frequently Asked Questions
What happens if I miss the 21-day deadline?
The plaintiff may request entry of default against the business and then seek a default judgment. If the business acts promptly, counsel may be able to move to set aside the default, for example on the ground of mistake or excusable neglect. Relief is within the court's discretion and strict time limits apply. A business that believes a deadline has passed should contact counsel immediately.
Can I represent my business myself in a Nevada lawsuit?
An individual sued in his or her personal capacity may appear without counsel. A corporation or LLC sued in district court generally must be represented by a licensed Nevada attorney. Salman v. Newell, 885 P.2d 607 (Nev. 1994). Small claims matters up to $10,000 are the principal exception.
How much does it cost to defend a business lawsuit?
Cost depends on the type of claim, the amount in controversy, the scope of discovery, and whether the case resolves before trial. As a general proposition, each party in Nevada bears its own attorney's fees, and a court "may not award attorney fees absent authority under a statute, rule, or contract." Albios v. Horizon Cmtys., Inc., 122 Nev. 409, 132 P.3d 1022 (2006). Fee-shifting may be available under a prevailing party clause or by statute, including where a claim was "brought or maintained without reasonable ground or to harass the prevailing party." NRS 18.010(2)(b) . At Andersen Beede Weisenmiller, we aim to provide efficient representation scaled to the needs of each case.
Will my business insurance cover the lawsuit?
Coverage depends on the policy language and the claims asserted. Many commercial policies include a duty to defend, which may obligate the carrier to provide or fund a defense even if some claims are ultimately not covered. The lawsuit should be reported promptly and the policy reviewed by counsel.
Business Lawsuit in Las Vegas? Get Legal Help Now
A lawsuit generally does not suspend the ordinary demands of running a business. ABW Firm represents Las Vegas and Nevada businesses in commercial disputes and keeps the broader business consequences in view as the case proceeds.
If your company has been served, contact our office. We can review the complaint, confirm the applicable deadlines, and discuss the available options.
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