Construction Law Today : Construction Lawyer & Attorney : Joshua Glazov : Design Build Contracts, Construction Bankruptcy

PepsiCo's lawyers are now asking Judge Jacqueline Erwin (Circuit Court of Jefferson County, Wisconsin) to vacate the default judgment so the company can defend the case "on the merits." Among the defenses they'd like to raise, PepsiCo contends that the limitations period expired long before Messrs. Joyce and Voight filed their Complaint.

Prognosis

My money is on Judge Erwin granting Pesico's motion to vacate the default judgment. If she doesn't, PepsiCo's lawyers will appeal and I'll go double-or-nothing on an appeals court reversing her denial. Why? Because, as careless as Ms. Marek's story makes PepsiCo's handling of the Complaint out to be, when put next to a $1.26 Billion judgment, someone in a black robe is going to find PesiCo's neglect excusable. And that's going to be enough for PepsiCo to get Joyce's and Voight's judgment vacated.

Based on what's been reported so far, I'd say Joyce and Voight made a mistake too. They asked for too much. $1.26 Billion is just too big. That's just begging a judge to vacate. Had they gotten a more modest amount, PepsiCo's neglect might look less excusable, making a judge more inclined to let PepsiCo sleep in the bed they made. Pigs get fat, hogs get slaughtered. $1.26 Billion looks hoggish.

How Does This Affect You In The Construction Industry?

Be careful with Complaints! They mean someone is suing you and you must respond on time or else! And in the construction industry, people and companies get sued a lot. If you're a design professional, owner, contractor (prime or sub), or material supplier, you've probably already been sued at least once. If you haven't, don't worry. There's still time; you probably will be.

Set up standard procedures to ensure that when you, someone in your company, or one of your registered agents, gets served with a Summons and Complaint, responding is a priority matter and you quickly get it into the hands of properly licensed, and qualified, lawyers to respond before the response deadline passes. These lawyers usually don't need to respond to everything in a Complaint right away. Before the original deadline expires they can get the deadline extended. But if the deadline passes and you've done nothing, you're in for the world of hurt of a default judgment against you.

At best you have to spend extra money and time trying to get a judge, or judges if you have to appeal, to vacate a default judgment against you. At worst, the judgment is final. That means you have to pay, or the plaintiff (now known as your judgment creditor) can start (a) seizing your assets and (b) imposing liens on your property to then sell it and use the money to satisfy the judgment. You don't want this to happen.

Having your property seized and liened is bad enough. But worse, the judgment, or the liens, could also put you in default under a loan agreement, lease, or some other contract you have with a totally unrelated third-party.

So check your Compliant intake and response procedures. Ensure your personnel (especially receptionists, assistants, and mail-room staff) know how to:

• Recognize a Summons and Complaint
• Treat it with the same care as ticking timebomb
• Deliver it fast to one of two or three specially appointed people (the Complaint Bomb Squad) who know exactly how to get the right lawyer to respond

Then re-check every 3 to 6 months so people don't forget and new people know what to do.

And remember what Eleanor Roosevelt said:

Learn from the mistakes of others. You can't live long enough to make them all yourself.