What to do if someone initiates a lawsuit against you.

At some point, you may encounter an unhappy customer which can sometimes result in a lawsuit, starting with a demand letter.  If you receive a letter like this in mail, don’t ignore it.  It is best to reach out to an attorney for legal advice on what your options are and how you can handle it moving forward.

What is a demand letter?  A demand letter is written correspondence from someone (usually a customer) who is seeking a remedy for a wrongdoing that you or your dealership may be responsible for.  The purpose of the letter is to inform you that there is a problem and allow you time to either dispute it or take action to fix it.  The most common demand is for damages (money) that the sender believes they are entitled to.  Unless specified in the letter, you have 30 days to respond to either meet the demands or dispute it further.

If you feel that the claim in the letter is warranted and wish to remedy it, simply arrange to meet the demand (pay the amount asked for in the letter if specified) plus a surcharge of the lesser of $500 or 10% of the damages in the claim.

However, if you believe the claim in the letter has no basis or is unreasonable, then immediately contact your legal representative so they can assist you.  Keeping diligent records and using up to date forms combined with best dealer practices can help avoid mistakes and errors that could lead to future claims against you and your business.

Keep in mind that a person cannot simply drop off a note or send an email asking for money or they will sue.  A demand letter needs to have specific elements outlined in Section 501.98, Florida Statutes.  These include the proper contact information for you and/or your dealership as and for the person bringing the claim, a clear account of facts around what caused the claim, why they feel entitled to damages, the amount of money they are seeking (or other form of remedy if they are not seeking payment), as well as being delivered by USPS or another nationally recognized carrier with a return receipt requested.

Please note that failing to answer the letter in the specified time frame can result in legal disputes, the initiation of arbitration or a lawsuit and could potentially cost you or your business money in the form of legal fees in addition to any potential claims against you.