How to File a Business Lawsuit in California

William B. Hanley April 10, 2019

As a business owner, you generally want to avoid lawsuits as much as possible in order to save your company time, money, and unnecessary stress. That being said, there are times in which filing a lawsuit is not only necessary but paramount to settling a dispute and protecting your business.

Considerations before Filing a Business Lawsuit

To save yourself from any false starts, let’s begin by clarifying what constitutes a valid claim, as well as any time limit considerations pertaining to your case. Since my law firm, William B. Hanley, Attorney at Law, is located in Irvine, California, please note that these considerations are specific to the Golden State.

Validity of the Claim

In order to successfully sue on behalf of your business, you must effectively demonstrate that the offending party took an action that either directly or indirectly harmed your company. In other words, their actions caused damage to your company’s reputation or business relationships, which has led to (or is anticipated to cause) a negative financial impact.

When this happens, you are entirely within your rights to pursue financial compensation to make up for the lost revenue and/or anticipated loss of future revenue. For instance, the following represent some of the most common and valid reasons to sue on behalf of your business:

  • Breach of contract

  • Misappropriation of trade secrets

  • Commercial real estate disputes

  • Partnership disputes

  • Fraud

  • Securities disputes

  • Shareholder disputes

  • Uniform Commercial Code issues

If you’re unsure whether your particular situation constitutes a valid claim — or if you are sure and are simply ready to get started — your next step should be contacting an experienced commercial litigation attorney.

Time Limits

Business lawsuits fall under the umbrella category of civil lawsuits. In California, civil lawsuits do not have one sole time limit (or “statute of limitations”). Rather, there are a number of variables that determine how much time you have to file your claim. As an example:

  • Breach of written contract cases (which account for the vast majority of business lawsuits) have a 4-year statute of limitations, meaning you have 4 years from the moment the injustice occurred to file suit;

  • Fraud-related cases typically have a 3-year statute of limitations; and

  • Breach of oral contract cases have a 2-year statute of limitations.

Obviously, this list doesn’t account for every possible scenario in which you might consider filing a suit. However, it does demonstrate that time limits vary from case type to case type. Even the most valid of claims will be dismissed if filed too late, so be sure to verify the statute of limitations for your case before heading down to the courthouse.

How to File a Business Lawsuit in California

Assuming you have a valid claim and are still safely within your statute of limitations window, there are two key steps you must take to get your case moving: 1) File your complaint at the appropriate courthouse,  and 2) Serve the defendant.

1. File Your Complaint

Filing a lawsuit begins with paperwork. The first thing you have to do is go down to the courthouse and file a civil complaint. Which courthouse, you ask? It depends. For business suits in California, you can typically file at the trial court in the county where either a) the dispute occurred, b) you conduct business, or c) the defendant conducts business.

Narrowing it down even further, it is important to note that most business disputes that are resolved through means of litigation are resolved through California Superior Court because the disputes in question have more than $7,500 at stake. (Cases valued at $7,500 and under would go through small claims court.)

As for the paperwork itself, it will require details about the reason for your claim, as well as your demand for compensation. To ensure you’re handling all necessary paperwork correctly, it’s best to consult with a seasoned attorney before taking this first step on your own.

2. Serve the Defendant a Copy of the Complaint

Once you have filed your complaint at a courthouse with the appropriate jurisdiction, you have 60 days to notify the defendant that this lawsuit is being brought against them. Under California law, you cannot personally serve the documents to the defendant. Rather, you must send a neutral third party to “serve” them the papers.

What Happens Next?

Once the defendant has been served, they have 30 days to respond. How your case unfolds from that point forward depends entirely on each party’s approach. In truth, most sources agree that about 95% of business lawsuits don’t make it all the way through trial before reaching a resolution. Instead, they are resolved through some form of alternative dispute resolution. Even so, it is extremely important that you take steps to prepare for the various courses your case may take — up to and including trial. The best way to do so is to enlist the counsel of an experienced local lawyer.

Business Litigation Attorney in Irvine, California

As someone who has been handling business lawsuits for more than 45 years, I am proud to act as a legal resource to business owners in the Irvine area. Whether you’re ready to begin the civil lawsuit process or are simply looking to discuss your case one-on-one with a knowledgeable legal professional, I encourage you to contact William B Hanley, Attorney at Law. Together, we can discuss the details of your unique situation, determine the best course of action, and fight for the resolution your business deserves.