SMALL CLAIMS - Q&A

Mon, 7/11/11
Bill Carle, Partner

Periodically we receive requests for information about filing a small claims lawsuit. Indeed, certain disputes may be properly filed in small claims court rather than the Superior Court. As a result, in this month's CMPR legal e-mail blast, we will discuss the small claims court option and questions often asked about this procedure.

How much can I collect in small claims?

The ceiling has gone up over the years. As things stand now, it depends on who is bringing the lawsuit (the "plaintiff") and how many times that plaintiff has filed a small claims action that year.

  • Generally an individual, or a business owned by an individual (like a sole proprietorship), can sue for up to $10,000.
  • Generally, a corporation, LLC or other business can use small claims court for disputes up to $5,000.
  • Certain kinds of actions have different limitations on the amount of the claim. For example, some bodily injury actions have a $7,500 limit and the limit is $6,500 when one is sui
  • Note that you cannot break a large claim into pieces and file a different action for different pieces. If your claim is for more than the limit, you have to give up the balance of the claim to sue in small claims court. As an example, a corporation with a claim for $6,000 would only be able to sue for the limit allowed a corporation, $5,000. That corporation could not say that there were two $3,000 claims.

How many times can I file in small claims court?

There are limits on not only the amount of money you can request in a small claims action, but also how many small claims actions someone can bring in a year.

  • Generally an individual or a business owned by an individual (like a sole proprietorship) can sue twice a year.
  • If the suit is for $2,500 or less, there are no numerical limits. There is thus no limit to suits for $2,500 or less, regardless of whether one is an individual, corporation or other business entity.

How much does it cost?

The filing fees differ depending on the amount of money you are seeking by the lawsuit. In addition to filing fees, there are fees for service of the lawsuit; service is when the lawsuit is delivered to the defendant. There may also be costs of collecting any judgment that you may receive from the small claims court if the defendant does not pay willingly.

  • Filing Fees: Currently, filing fees are generally $30 for suits up to $1,500, $50 for up to $5,000 and $75 up to $10,000. In addition, when you reach 12 suits in a year, generally the filing fee goes up to $100. If you win your small claims action, the defendant will be ordered to reimburse you for the cost of the filing fee.
  • Service Fees: You will have to serve the defendant which can add to the cost. Service can be done by the sheriff or a private processing serving company for a fee. Or you can have an adult friend do it for you. But you cannot serve the suit yourself. Note that, once the lawsuit has been served on the defendant, you must file with the court a "proof of service." Judges will dismiss a case they do not feel was properly served, so consider how best to assure a judge that service was done right. While the sheriff or process serving company may cost more, you are less likely to have a problem proving service. If you win your small claims case, the cost of service, like the filing fees, is a recoverable expense.
  • Collection Fees: Collecting on a judgment can sometimes be a difficult process and is beyond the scope of this email. However, collectability is an important concern in deciding whether to file any lawsuit. If the person that you are suing does not have the money to pay you, you may "win" but not necessarily collect any of the collect you are owed. This can be a frustrating experience.

How long do I have to file my small claims action?

This is a very important question and involves knowing the different statutes of limitation. This is because the timing question is answered by the kind of case, not where it is filed.

  • For instance, you must file suit within four years for a breach of a written agreement.
  • You must file within two years for breach of an oral agreement.
  • Personal injury suits must be filed within two years, except if one of the defendants is a governmental agency, where much shorter timelines apply with additional pre-filing requirements (including the presentment of a claim within six months before filing any such action, regardless of the court in which it is filed). We encourage you to seek advice from an attorney with regard to suits involving governmental entities.

No, an attorney cannot go with you to small claims court, but…

  • California does not allow an attorney to represent you in small claims court. That means that you go to court yourself and present your evidence of your claim. You should also be prepared to address issues that the other side may bring up (lateness of the claim, a defense to the claim, or other such issues).
    • If you are an individual suing, you must attend personally.
    • If you are a sole proprietor of a business, you must attend, unless there is a regular employee who is the most knowledgeable about the account, collection or other matter involved, in which case they can represent you. You cannot hire someone as an employee just to do the small claims hearing.
    • For other business entities, a partner, corporate officer, director or the emplo
  • Although an attorney cannot appear for you in small claims court, an attorney can advise you before you go to small claims court or even help you file the paperwork. An attorney or paralegal can meet with you briefly to be sure that you have sufficient evidence, that your presentation will cover the important issues and, of course, to answer any questions you may have about the claims.
  • In addition, an attorney can represent you on any appeal from a small claims case.
  • Other states, like Illinois and New York, do allow an attorney to represent a client in small claims court. This means that you can hire an out of state attorney to present a small claims court action when you are trying to collect against someone who lives out of state. So if you are having trouble collecting from an out of state resident or business, a short internet search will tell you the limits and rules, including whether an attorney or someone else can represent you there.

What if I lose in small claims court?

  • If you are the party bringing the action in small claims court, and you lose your case, there is no right to appeal. The case is over.
  • If you are the party defending the small claims action, and you lose the case, you can appeal. There are specific timing issues as well as certain papers that have to be filed and we suggest that you contact an attorney or your local law library for more information about such an appeal.

What if I win?

  • If you are the party bringing the action in small claims court, and you lose your case, there is no right to appeal. The case is over.
  • After obtaining a small claims judgment, you must still collect on that judgment. As indicated above, there are costs associated with collecting on any judgment as well as certain procedures that must be strictly followed. We encourage you to contact an attorney or your county's public law library for more information in this regard.

When will the hearing be?

  • The court sets the hearing date.
  • The hearing date will be from 20-70 days of filing the action.

Is small claims the right course of action for my claims?

  • Looking solely at cost, if your claim fits into the small claims structure, it is almost always less expensive to use small claims rather than hire an attorney.
  • Remember, however, that many contracts have a section that allows the winner to receive his or her attorney's fees from the losing party. In those kinds of cases, it may be a better choice to hire the attorney and then have the other side pay you back for those costs after you win. However, if you lose that action, you may have to pay the losing party for his or her attorney's fees. Attorney's fees clauses are a two-way street.
  • There are sometimes considerations other than cost. Some clients opt not to use small claims court because they feel their business reputation of being aggressive on collections matters is better served through an attorney-filed lawsuit. Only the business owner can make that judgment.
  • In addition, recall that there are strict limits to the amount you can claim and the number of times you can file in small claims court. Sometimes the facts of the case simply do not allow for the filing of a small claims action: the claim is too large or you have filed other actions in that year's time.

Where can I go for help?

  • Small Claims Advisor: If you are considering small claims, you can obtain free advice from the small claims advisor in the county in which you intend to sue. In Sonoma County that role was taken over by Empire College a few years ago. Under the direction of experienced attorneys, third and fourth year law students can assist you with your questions about small claims court, at no charge. They have walk in advice on Monday and Wednesday and phone advice on Tuesday and Thursday, in both cases from 3:30 to 6:00 pm. Their phone number is 565-6457.
  • Local Public Law Libraries: Most counties have a public law library in or near their courthouse. These libraries are staffed with knowledgeable librarians who can help you find a library book to help you understand more about your claim as well as how to file a small claims action. The librarians are not attorneys however, and cannot answer legal questions. In Sonoma County, the Public Law Library is located at 2604 Ventura Avenue near the courthouse and other county offices and the phone number is 565-2668.
  • Your attorney's office: As indicated above, although an attorney cannot appear at the hearing for you, an attorney can help you evaluate your claim, help to be sure that you are filing within the time limits, and other procedural issues.
  • The internet: For more information, one of the best websites we have found is www.courts.ca.gov/selfhelp-smallclaims.htm. This is a website developed by the State of California specifically to help with small claims matters.

What other options do I have?

Rather than rush to a lawsuit, as long as there is no problem with the statute of limitation, there are less formal ways to resolve differences.

  • One way is to mediate the small claims case. Mediation is where the parties meet before a neutral evaluator who helps the parties reach their own solution. This is often less expensive than small claims court, particularly because collecting on a judgment can be something that is specifically agreed to in the mediation. A Sonoma County business called Recourse Mediation currently does small claims mediations for $25. They can be reached at 525-8545.

In closing:

We encourage our clients to carefully analyze the value of using the small claims court. Sometimes this can be a very cost effective way to resolve small collection or other suits without the need to see an attorney. That is the reason for having small claims courts and they often are a good place to find a legal solution to a problem.

For more information contact Simon Inman at bcarle@cmprlaw.com or at (707) 526-4200.

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