SMALL CLAIMS 101
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Copyright © Mark T. Coffin, Attorney At Law. All rights reserved.
What is there to know about Small Claims Court? In certain situations, it can be a powerful and relatively quick remedy, particularly when you have a low-dollar dispute (less than $10,000). Let’s look at a few “ins and outs” of Small Claims Court in California.
1. DOLLAR LIMITS: The upper limit for a single claim in Small Claims Court is $10,000.00. However, this amount is only available to individuals and sole proprietors. If your business is a corporation or an LLC, the upper limit is $5,000.00. Another restriction is that you can only file two claims exceeding $2,500.00 per calendar year. In other words, file as many claims as you want for $2,500 or less, but only two per year that are over $2,500.
Keep in mind that you can voluntarily choose to sue for the maximum limit available in Small Claims court, and simply “waive” any potential recovery of amounts over that maximum. (It might make sense to do this for the sake of speed and costs, especially if your total potential recovery is only slightly over the limit.)
2. LIMITS ON THE TYPE OF DISPUTE: Typical Small Claims cases involve property damage or personal injury claims from car or bicycle accidents, various purchase and sale contracts, landlord tenant disputes, and disputes with contractors about repairs or home improvement jobs. In addition to monetary damages, in certain cases the Small Claims Court has jurisdiction to order “injunctive” relief (i.e. to order the return of a security deposit, enforce an arbitration award under $5,000, or to rescind (unwind) a contract). Small Claims Court is also available for discrimination claims under the ADA, Fair Housing Act, or California’s Unruh Act.
However, California Small Claims courts do not have jurisdiction over Mechanic lien claims, Stop Payment Notice claims, and some of the more sophisticated contractor collection remedies. Nevertheless, a claim for nonpayment, or repair of workmanship between two contracting parties, can be brought in Small Claims court.
3. NO ATTORNEYS: One of the main benefits of Small Claims Court is that no attorney representation is allowed at the trial. (The main exception is when an attorney is actually a party to the case. Also, parties sometimes use attorneys to “work up” the case for a Small Claims trial, write briefs, etc.) Typically, the parties simply represent themselves, and bring their own witnesses, ask their own questions, and present their own documents. The tradeoff is a huge cost savings to the parties.
4. WHO NEEDS TO ATTEND A SMALL CLAIMS TRIAL: Because an attorney cannot represent you in a Small Claims trial, you must usually attend yourself (assuming that you are one of the parties named in the complaint). Corporations can send a “regular employee,” or an officer or director. Landlords may send a property manager. A homeowner association may send an agent, management company representative, or bookkeeper.
5. TIMELINES: Small Claims Court is designed to be speedy. Cases are usually set for trial within 45 to 60 days after they are filed, and most are heard within 90 days. Certain events can lengthen this time – such as when a cross-complaint is filed, or subpoena procedures are used – but generally Small Claims Court cases are tried much more quickly than general civil cases, which can take up to a year.
6. COSTS: Typical costs include the complaint filing fee (usually between $30 and $75), and service of process fees (under $10 for certified mail by the clerk, up to $100 for service by a law enforcement officer or process server). If you win in Small Claims Court, your judgment can include recovery of these litigation costs.
7. APPEALS: Unfortunately, the plaintiff (claiming party) cannot appeal a Small Claims judgment. A defendant however, has a right to appeal a judgment to the Superior Court, where it is tried “de novo” (as a brand new case) to a new judge. Note that lawyers are allowed (and are usually utilized) in Superior Court cases, including Small Claims appeals.
8. MEDIATION: Most Small Claims Court judges will encourage the parties to settle their case before trial, if possible. Many courts have mediation services, where the parties can speak to an independent neutral third party who will try to assist a negotiated settlement, instead of proceeding with the trial.
9. COLLECTING ON A JUDGMENT: Unfortunately, the court is not a collection agency, and has no responsibility for collecting your judgment from the defendant. However, there are several legal procedures that Small Claims judgment holders can utilize. These include wage garnishment, bank account levies, real property liens, and personal property liens (such as automobiles, for example). You can also have the court order that the judgment debtor appear in court to answer your questions about collectible assets (called a “Debtor’s Exam”). More on this at: http://www.courts.ca.gov/1178.htm.
10. MORE INFORMATION: The State of California provides very helpful information about Small Claims Court at its website: http://www.courts.ca.gov/selfhelp-smallclaims.htm. You can also download many common court forms at: http://www.courts.ca.gov/forms.htm?filter=SC. Many counties have Small Claims clinics and helplines available, so check your local listings.
Mark Coffin is a construction attorney based in Santa Barbara, California. This article is intended to provide general information rather than specific legal advice, and is not intended to create an attorney-client relationship or serve as a substitute for a professional legal consultation.