When to consider small claims court

Is your case worth going to small claims court to settle a dispute? This article offers advice on when and how to file a claim.

Photo Credit: Frances Twitty
By Christina Hamlett

WHEN TO CONSIDER SMALL CLAIMS COURT

Small Claims Court is a civil justice system that was set up in order to allow regular, workaday people to act as their own counsel and to sue other parties for modest amounts of money that they believe are due. The procedures for filing a claim are not only easy for laymen to understand and follow but are also less costly and time-consuming than hiring an attorney to handle one’s case.

The amounts that can be claimed vary from state to state. What potential claimants need to keep in mind is that if they believe their right to payment exceeds the cap amount designated by the local court, they waive the right to initiate subsequent claims in order to recover the difference.

The types of disagreements that are appropriate for the small claims venue relate to contract violations, property and auto damage, bounced checks, and failure to provide payment for the performance of work or the provision of services. Claims can also be filed if an individual discovers that a merchandise purchase is defective and the seller refuses to offer a refund or replacement.

Let’s say, for instance, that Earl buys a new lawnmower from the local hardware store. The first time he goes to use it, however, a loose part flies off and hits him in the head, an injury that requires a trip to the emergency room and a couple of stitches. Earl goes back to the store to tell them what happened and asks that they either refund his money or give him a new lawnmower. The store refuses. Much as Earl might like to turn around and sue them for a gazillion dollars, the most he could receive in a small claims court settlement is $2,500. If his injury were more serious (i.e., the loss of an eye or a limb), Earl would want to take his case higher up the food chain and enlist the services of an attorney. As it is, however, Earl just wants his money back and someone to pay for that trip to the local hospital.

The lawnmower itself was $400. Earl’s urgent care appointment and stitches were $275. Earl will also want to factor in what it will cost him to file the claim, have the store served with a notice of that action, and reimburse him for mileage and lost wages since he will need to take a day off of work to appear in court. Because these items are not likely to exceed the $2,500 cap, small claims court would be a logical step for Earl to resolve his dispute.

One of the things that the court will always take into consideration is whether the filing party made any reasonable attempt to settle the dispute on his or her own. If, for example, Earl never told the store owner what happened, the latter could come back with the argument, “We would happily have made an exchange or refunded his money if we had only known about it.”

Not every disagreement can be settled in small claims. If, for instance, your ex-spouse has been negligent in making alimony or child support payments as ordered by the court during your dissolution, you will need to hire an attorney (or go back to your original attorney) in order to pursue this matter through higher channels. Nor can you use this avenue to sue a medical professional of malpractice, try to orchestrate settlements in a probate case, or settle a domestic squabble (i.e. your visiting in-laws trashed your guest room).

You must be 18 years of age in order to file in small claims court. The person that you are suing needs to be 18 as well. If either party is under the legal age for making a claim, the claim needs to be filed on his or her behalf by a parent or guardian.

Complaint forms available through the offices of the local court can be submitted in person or by mail. It will request the complete names and contact information of both parties, detailed reasons as to why the money is owed, and the specific amount being requested in order to settle the alleged damages. Complaint forms need to be filed in the county in which the opposing party lives (or operates the business) or the county in which the incident took place. Upon completing and signing the form, the person making the claim will be required to pay a nonrefundable fee in order to start the process. This ranges anywhere from $10-$25.

The next step is the service of the complaint on the individual. Simply dropping it in a mailbox isn’t enough. It either needs to be personally delivered by you or your representative or sent by registered mail. Keep in mind that the opposing party has the right to file a counterclaim if they feel that you’re the one who actually owes money to them.

A hearing date is then set up by the court at which time both sides will present their arguments just like in a regular courtroom. In order to prove the validity of your claim, you’ll need to have copies of contracts or agreements, receipts, payment records, cancelled checks, photos of property damage and anything else that you feel will support your case. You are also allowed to have witnesses present to provide additional facts pertinent to your claim. A mediator will attempt to get both parties to reach some kind of accord. If the two of you can’t see eye to eye, the case will advance to hearing by the judge, usually on the same day.

In the event that the opposing party doesn’t show up for the hearing, a judgment by default may be entered by the judge on the claimant’s behalf. Should this occur, the presiding judge will decide what amount should be awarded. Even though you may have won by default, however, that still means you need to collect the debt from the other party. The courts will provide you with brochures and instructions on how to go about doing this.

Suffice it to say, the actual process of collecting your money due whether by a judgment of default or an actual win could conceivably take more money than that which was originally at issue. In that regard, actual businesses tend to be more cooperative than individuals, the bottom line being that they can’t afford bad publicity if it becomes known that they renege on their obligations.