Question 1

Why New York when my business is in another state and the funder is in a third?

Accepted Answer

Because the contract said so, not because anyone is located here. The funder can be in Florida, you can be in Michigan, and the case still gets filed in Brooklyn. Owners lose weeks assuming the case belongs in their state or the funder's state. It is neither.

Question 2

Can I be sued in New York if I have never set foot in the state?

Accepted Answer

Generally yes. Agreeing to a forum selection clause is ordinarily enough to submit to New York jurisdiction, without an office, property, customers, or a single visit. These clauses are presumptively enforceable but not absolute. They can be challenged as unreasonable, unjust, contrary to public policy, procured by fraud or overreaching, or so gravely inconvenient as to deprive a party of its day in court. A clause conflicting with another provision in the same document is also worth examining.

Question 3

Is this the U.S. Supreme Court?

Accepted Answer

No. In New York, the Supreme Court is the general-jurisdiction trial court. The state's highest court is the Court of Appeals, which is the reverse of most other states. Business disputes can also land in New York City Civil Court, which currently handles money claims up to $50,000, or in County, District, or City Court, or in federal court or arbitration.

Question 4

How long do I have to respond if I was served out of state?

Accepted Answer

Generally 30 days from completion of service. Service outside New York under CPLR 313, and several other statutory methods, trigger a 30-day period under CPLR 320(a). The 20-day period applies to personal delivery within the state. The period runs from when service is legally complete, which for some methods happens after an additional filing or mailing step rather than at delivery. The warning printed on the summons does not itself determine your deadline.

Question 5

Can I represent my own company?

Accepted Answer

Not in an ordinary Supreme Court action. Under CPLR 321(a), a corporation or LLC must appear by attorney. You can represent yourself personally if you were sued personally under a guaranty. You cannot represent the business. Narrow exceptions exist in small claims and commercial claims parts. They do not apply to a typical MCA suit. That is a rule about who files papers, not a prediction about how the case ends. A great many of these resolve without a fight. The business owner who gets counsel involved early is usually the one who ends up negotiating from a position that still has options, rather than responding to enforcement after a default judgment. Being required to appear by attorney does not mean you are committed to litigating.

Question 6

My lawyer is not licensed in New York. Can he handle it?

Accepted Answer

Not alone. Appearing requires New York admission, or admission pro hac vice for that case. Under 22 NYCRR 520.11, out-of-state counsel must be associated with a New York lawyer in good standing, and admission is discretionary.

Question 7

Do I have to fly to New York?

Accepted Answer

Usually not. Once counsel appears, conferences and filings are handled by your attorney, and a substantial amount of New York commercial practice is electronic. Appearance format varies by judge and by court.

Question 8

My papers have no index number, or the number returns nothing. What does that mean?

Accepted Answer

Worth investigating. An action is commenced by filing, an index number is assigned then, and CPLR 305(a) requires the summons to bear the index number and filing date. Papers circulating without one raise a real question about whether an action was commenced, though a court may permit amendment of a defect causing no prejudice. Save everything exactly as received, including the envelope. Not every case is publicly visible through the electronic filing system, so check with the County Clerk before concluding no case exists.

Question 9

What happens if I ignore it?

Accepted Answer

A plaintiff can seek a default judgment once your time to appear expires. Under CPLR 3215(c), it generally must take proceedings for entry within one year of the default or face dismissal as abandoned. A default judgment cannot exceed or differ in type from the relief demanded, and the plaintiff must submit proof. Unauthorized fees and unenforceable penalty provisions are not automatically recoverable just because they appear in the agreement.

Question 10

Can a New York judgment reach my business in my state?

Accepted Answer

Yes. Under the full faith and credit statute a valid New York judgment is entitled to recognition elsewhere, and once domesticated the funder can collect where you are. Recognition procedures, notice periods, and available objections vary by state. Jurisdictional and due process objections generally survive, and lack of personal jurisdiction can also be raised in New York under CPLR 5015(a)(4). If an account has already been restrained, see frozen funds.

Question 11

I signed a confession of judgment. Can they use it against me?

Accepted Answer

It depends on residence and timing, and this is widely reported wrong. Under CPLR 3218(b), a confession may be filed in the county the affidavit states was the defendant's residence when executed, or the county where the defendant resides at filing. A business entity resides in every New York county where it has a place of business. So an individual who never resided in New York is in a strong position. A company with any New York place of business may not be. Sources saying the 2019 change bars New York creditors from using confessions against out-of-state debtors have it wrong. It turns on the debtor's residence, not the creditor's location.

Question 12

Can a confession of judgment be vacated?

Accepted Answer

Often, and the three-year limit is the first thing to check. CPLR 3218(b) requires filing within three years after the affidavit was executed. Many of these are signed at funding and held for years. Other grounds: the affidavit fails to state the authorized sum, the residence, or facts showing the sum is justly due; the amount entered exceeds what was authorized; it was signed without authority; or it was filed where the defendant never resided and has no place of business.

Question 13

I have a judgment I never knew about. What now?

Accepted Answer

Move immediately, and which rule applies depends on the ground. Under CPLR 5015(a)(1), relief for excusable default generally must be sought within one year after service of the judgment with written notice of entry, and requires a reasonable excuse plus a potentially meritorious defense. CPLR 317 is often the better route for someone never personally served who never appeared: a motion within one year of learning of the entry and no more than five years after entry, requiring a meritorious defense but not a reasonable excuse. A motion under CPLR 5015(a)(4) for lack of personal jurisdiction is not governed by the one-year period, though a process server's affidavit creates a presumption of proper service that must be overcome.

My business is not in New York. Why am I being sued here?