North Carolina recently made some big news in the entertainment world when a judge in Winston-Salem found rap star Yo Gotti liable for $6.6 million. Even if you’re not interested in rap music or celebrities, the case is a fabulous cautionary tale about the importance of timely responding to lawsuit papers.
I don’t claim to have personal knowledge about anything that happened between Gotti and the North Carolina man who sued him. But the court records show that Michael Terry and his company Stack Dollar Empire (a record label and talent management company) filed a Complaint against Gotti and others in January 2018. The lawsuit basically alleged that Terry paid $20,000 to have Gotti perform on a song with one of Terry’s artists, Young Fletcher, in order to “jump start” Fletcher’s career. Although the song was performed, the Complaint stated that a related contract was never signed to allow Terry to market the song, despite representations that the documentation would be completed. Terry did not specifically identify any other damages beyond the $20,000, although he did include a claim for “unfair trade practices” which would allow tripling of his damages.
According to a sheriff’s deputy, Gotti was served with the Complaint and a Summons when he was performing in North Carolina in May 2018. After Gotti was served, he never filed any response to the lawsuit and was “defaulted” in the case. In June 2019, the case was called for trial, Gotti did not appear for court, and the judge awarded a $6.6 million judgment. The judge concluded that the inability to “jump start” Fletcher’s career translated into $2.2 million in lost earnings. Then, the judge tripled the award because of unfair trade practices. Specifically, the judge held that Gotti misrepresented his intentions in order to record a similar song first and then have it look like Terry was a copycat. The judge also held that Gotti went behind Terry’s back and offered Fletcher $150,000 to leave Terry’s label and join Gotti’s label.
After the judgment hit the media and got Gotti’s attention, Gotti hired the biggest law firm in North Carolina – including the head of their litigation department – to dig him out of trouble. Gotti’s lawyers filed a motion to overturn the judgment – arguing, among other things, that Gotti was never duly served with the lawsuit papers. According to Gotti (whose real name is apparently Mario Giden and who also goes by Mario Mims), he never received the papers and didn’t authorize anyone to accept them. In an affidavit, Lamont Wynne, a member of Gotti’s security detail, said that the sheriff handed him the papers and that he never provided them to Gotti. At a June hearing, the deputy testified that he spoke directly to Gotti and told Gotti that he was being served. The judge found that Wynne then took the papers out of the deputy’s hands, which was good service on Gotti, and upheld the $6.6 million award.
Gotti is appealing the decision to the N.C. Court of Appeals in Raleigh. Whether the judgment will ultimately stick is an open question. But the case shows the harsh consequences that can arise when lawsuit papers are not properly addressed. If you are ever served with lawsuit papers, remember some important things:
- If ever served with a Complaint or Summons, don’t ignore these documents. Even if you think that a court may not have jurisdiction over you or think that the lawsuit is frivolous, the dangers of not participating in the lawsuit may be huge. Promptly seek legal counsel to determine how to respond.
- If you ever learn that you missed a deadline to respond to a lawsuit and have been defaulted in the case, still consult a lawyer about what to do. All is not necessarily lost. The court might be willing to “set aside” the default and give you another chance to respond. However, it is important to immediately ask for an “entry of default” or “default judgment” to be set aside, as soon as you discover your mistake.
- Don’t assume that there is not “good service” simply because you were not personally handed lawsuit papers, or did not personally sign for them. Sometimes, the law will find good service when papers are served on a member of your household, another person at your office, or another person who appears to be an authorized agent.
Elliot has practiced law for over 20 years and is a member of the Federal, North Carolina and Forsyth County bar associations. He is an experienced litigator with major case experience in state and federal courts and in private arbitrations.