A long-standing client who’d relied on TRAC registered agent services, telephoned with a request to add a new jurisdiction, North Carolina, to their client profile. Their local employee, Mr. Plantmanager had been fulfilling the North Carolina residency requirement, but they wanted to house all of their registered agent services under the TRAC roof.
TRAC set about the normally uncomplicated process of establishing itself as the company’s North Carolina registered agent, but hit a very serious snag.
Unbeknownst to senior management, Mr. Plantmanager had harassed a female subordinate to the point that she filed a sexual harassment lawsuit against the company and her boss, Mr. Plantmanager. Since he was the NC agent, Mr. Plantmanager had been personally served with her lawsuit, which was seeking significant damages, and did what any person, oblivious to the legal responsibilities of a registered agent, might do: he trashed the lawsuit.
The woman then simply filed for a default judgment with the court. Because no one had bothered to answer the suit, the court assumed there were no objections, and declared a default judgement, awarding the harassed woman the damages she was seeking.
Though they were unlikely going to win in the first place, the company then had to expend time, money and effort to have the default overturned so they could have a chance to properly address the entire situation. But the damage – to the harassed woman, to the company’s reputation, and to its financial health – was substantial.