G. Bringing Suit in Small-Claims Court

Before considering filing a lawsuit in small-claims court, attempt to resolve your dispute in a reasonable fashion. It is often best to write a demand letter to your employer or ex-employer and send it certified mail, return receipt requested. In addition to documenting your claim, the letter will advise the company that the matter must be corrected to your immediate satisfaction or you will take additional action. If there is no response to your letter, send a follow-up letter reporting that your initial letter has not been answered. The letter should also state what your next step will be if this letter is ignored.

If you cannot get satisfaction in an employment, financial, or business dispute by personal negotiations, you might consider suing in small-claims court. Small-claims courts, which help you collect wages, commissions, and money in an inexpensive manner without hiring a lawyer, hear over one million cases a year in the U.S. They can be used in many situations. For example, you may wish to sue for money damages when your employer fails to pay you or someone damages your property and refuses to pay for repairs. Many small-claims courts have night sessions and matters are resolved quickly, sometimes within a month from the time an action is filed. The maximum amount of money you can recover varies from state to state. It is usually up to $3,500.

The following guidelines describe the procedures of a typical small-claims court. However, the rules vary in each city and state. Before you contemplate starting a lawsuit, call the clerk of that court and ask for a written explanation of the specific procedural rules to be followed.

Who can be sued? Small-claims court can be used to sue any person, business, partnership, corporation, or government body owing you money. If you sue in small-claims court and recover a judgment, you are precluded from suing again to recover any additional money owed to you. Thus, if your claim greatly exceeds the maximum amount of money that might be awarded in small-claims court consider hiring a lawyer and instituting suit in a higher court.

Do you have a valid claim?In order to be successful, you must have a valid claim. This means that you must:

• identify the person or business that damaged or caused you harm;
• calculate the amount of damages you suffered;
• show that there is some basis in law to have a court award you damages; and
• be sure that you were not the main cause of your own harm, that you haven't waited too long to start the action (statute of limitations), and that you did not sign a written release. Where to sue.Call your local bar association, city hall, or the county courthouse to discover where the nearest small-claims court is located. (In some states small-claims court is called justice court, district court, municipal court, or justice of the peace court.) In most states, suit must be brought in the county in which the person or business you are suing lives or does business. Confirm this with the small-claims court clerk and ask what days and hours the court is in session. Also find out the maximum amount of money you can sue for, what documents are needed to file a complaint, the filing fee, and whether this can be paid by cash, check, or money order. What can you sue for?You can sue only to collect money. Thus, before you begin to sue in small-claims court, estimate the amount of money you wish to collect. When calculating the amount of your claim, include all incurred expenses, including gasoline bills, tolls, telephone costs, losses due to time missed from work, sales tax, and interest, if applicable. Save all your receipts for this purpose. Starting the lawsuit.You begin the lawsuit by paying a small fee (about $5) and either going to the court in person or mailing in a complaint that states the following information:
  • your name and address
  • the complete name and address of the person, business, or company you are suing (the defendant)
  • the amount of money you believe you are owed
  • the facts of your case
  • the reasons you (the plaintiff) are seeking redress. If you are filing a claim on behalf of an individually owned business, you must list the name of the owner in addition to the name of the business. If you are filing a claim on behalf of a partnership, you must list the name of the partnership as the plaintiff. (Note: some states do not allow a corporation to sue someone in small-claims court.)

  Be sure to write the accurate and complete name and address of the defendant on the complaint. Write the corporation's formal name rather than its "doing business as" (d/b/a) name. Thus, if you are suing a corporation, contact the county clerk's office in the county where the corporation does business to obtain its proper name and address. Better still, call the department of corporations in your state to obtain such information.

  At this time, you may also be required to prepare another form called a "summons," which notifies your opponent of the lawsuit. Sometimes the clerk will do this. Ask the clerk whether the court will mailthe summons by registered or first-class mail, personally serve the defendant on your behalf, or whether you must hire a professional process server. If a professional process server is required, ask what is necessary to prove that service was accomplished. You may have to pay the process server an additional fee (between $20 and $50). However, if you win your case, you can ask the judge to include the process server's fee in the award. When the clerk gives you a hearing date, be sure that it is convenient and you have no other commitments. The defendant's response.When the person or company you are suing receives the summons, the defendant or his or her attorney can:
  

• deny your claim by mailing a response to the court
• deny your claim by personally appearing in court on the day of the hearing
• sue you for money you supposedly owe (this is called a "counterclaim")
• contact you to settle the matter out of court.
  
  If an offer of payment is made, ask to be reimbursed for all filing and service costs. Notify the court that you are dismissing the action only after you receive payment. (If you are paid by check, wait until the check clears.) Do not postpone the case. Tell your opponent that unless you are paid before the day of the trial, you are prepared to go to court and either commence with the trial or stipulate the offer of settlement to the judge. If a written denial is mailed to the court, ask the clerk to read it to you over the phone or go to the court and read it yourself. This is your right and may help you prepare for your opponent's defense. The following is an example of a simple denial in an answer: "I deny each and every allegation in the face of the complaint." Now you must prove your allegations in court to recover your claim. Your duties as the moving party.It is up to you to follow the progress of your case. Call the clerk and refer to the docket number to discover whether the defendant received the complaint and whether it was answered. If you discover that the defendant did not receive the complaint by the day of the trial, request that the clerk issue a new complaint to be served by a sheriff or process server. Go to court that day anyway, to be sure that the case is not dismissed because of your failure to appear. If the complaint is personally served and your employer does not appear at the trial, he will be in default and you may be awarded a judgment automatically. In some states you still have to prove your case in order to be successful. Also, defendants sometimes file motions (legal affidavits) requesting the court to remove the default judgment on the grounds that there was a valid reason for not attending the hearing. If this motion is granted, your trial will be rescheduled. If you are unable to come to court on the day of the trial, send a certified letter, return receipt requested, to the clerk, asking for a continuance. The letter should specify the reasons you will be unable to appear and include future dates when you will be able to come to court. Send a copy of this letter to your opponent. When you receive a new date, send your opponent a certified letter, return receipt requested, informing the employer of the revised date. Requests for continuances are sometimes not honored. Call the clerk on the day of the original trial date to be sure that your request has been granted. Be prepared to send a friend or relative to court to ask for a continuance on your behalf if a continuance has not been obtained by the day of the trial. Preparing for trial.You have several weeks to prepare for trial. Use the time wisely. First, be sure that your friendly witnesses, if any, will attend the trial and testify on your behalf. Select witnesses who are believable and who will not say things that will surprise you. In some states, you can present the judge with signed affidavits or statements of witnesses who are unable to appear at the trial. Some states also permit judges to hear testimony via conference telephones. If necessary, the clerk can issue a subpoena to ensure the attendance of important witnesses who you believe may refuse to attend and testify. A subpoena is a document that orders a person to testify or produce books, papers, and other physical objects on a specified date. If the subpoena is issued and the person refuses to appear, a judge can direct a sheriff to bring the witness into court or even impose a jail sentence for a willful violation of the order. When you come to court for the trial, check to see if the clerk has received any subpoenaed documents. If such records are crucial to your case and have not been received, you can ask for a continuance. If you have subpoenaed an individual and do not know what he or she looks like, ask the clerk to call out the name to determine if he or she is present so you can proceed with the trial. To maximize your chances of success, organize your case before the trial. Gather and label all your evidence so that you can produce the documents easily. You may also wish to speak with a lawyer or call a lawyer's referral service for legal advice. Many communities have such advisory organizations, and they are willing to inform you, without charge, about relevant cases and statutes. This may help you know to what damages you are legally entitled. You may cite these laws, if applicable, at the hearing. The trial.Arrive early, locate the correct courtroom, find the name of your case on the court calendar, and check in with the clerk. You should be properly attired, preferably in business clothes. Come prepared with all relevant documents. Examples are:
  
  
  • receipts and canceled checks
  • correspondence
  • contracts
  • letters of protest demanding unpaid wages
  • unpaid invoices
  • contemporaneous memos of promises and statements made to you
  • signed affidavits or statements from friends and witnesses unable to appear at the hearing
  • an accountant's statement of lost wages
  • prior years' tax returns
  • diagrams or charts
  • copies of applicable statutes, cases, and regulations

When your case is called, you and your opponent will be sworn. The judge or court-appointed arbitrator will conduct the hearing and ask you questions. Be relaxed. Keep your presentation brief and to the point. Tell why you are suing the defendant and what monetary damages you are seeking. Show your evidence. Bring along a short written summary of the case. You can refer to it during the trial, and if the judge does not come to an immediate decision, he or she can use your outline for reference. Talk directly to the judge and respond to his or her questions. Show respect. Always refer to him or her as "Your Honor" or "Judge." Listen to the judge's instructions and never argue. If the judge asks you a question while you are speaking, stop immediately. Then answer the question honestly and to the point. Be diplomatic rather than emotional. Also, avoid arguing with your opponent in court and never interrupt his or her presentation.

After both sides finish speaking, you will have the opportunity to refute what your opponent has told the judge. Do not be intimidated if he or she is accompanied by a lawyer. Simply inform the judge that you are not represented by counsel and are not familiar with small-claims court procedures. Ask the judge to intercede on your behalf if you feel that your opponent's attorney is treating you unfairly. Most judges will be sympathetic, since small-claims courts are specially designed for you to present your case without an attorney.

If you are a defendant.Follow the same procedures as the plaintiff; prepare your testimony, contact your witnesses to be sure that they will appear at the trial and testify on your behalf; collect your exhibits and documents; arrive early on the day of the trial and check in with the clerk. If you have any doubts about your case, try to settle with the plaintiff before the judge hears the case. Request that the case be dismissed if your opponent fails to appear. Your opponent will speak first if he or she appears. Wait until he or she is finished speaking before telling your side of the story. Point out any inconsistencies or flaws in your opponent's story. Conclude your remarks by highlighting the important aspects of the case.

Tip:Some states require that you send a "30-day demand letter" before filing a small-claims action. The letter should briefly describe your money loss and what you want the employer to do to remedy the situation. Add that you are giving the employer 30 days to make a good-faith response; otherwise, you will begin legal action. Send the letter certified mail, return receipt requested, and consider sending copies to your state's attorney general's office and your attorney. If the letter is answered and the ex-employer refuses to pay, you may learn what position it intends to take at the trial. If your letter is ignored, that is evidence in court.

Counsel Comments:In certain states, an employer's willful failure to pay earned vacation money, wages, or other accrued compensation or promised benefits may cause it to be liable for extra statutory damages (such as an additional 25%) plus legal costs and expenses. Check your state's law to ascertain whether this applies in your case.

Obtaining judgment.Some small-claims court judges render oral decisions on the spot. Others issue a decision in writing several days after the hearing. This gives them time to weigh the testimony and exhibits. If your opponent failed to attend the hearing, judges usually render a judgment of default immediately after your presentation.

If you win the case, make sure you know how and when payment will be made. Check to see that all your disbursements, including court costs, filing fees, service of process, and applicable witness fees, are added to the amount of your judgment. Send a copy of the decision by certified mail, return receipt requested, to your opponent, together with a letter requesting payment. Some states require that payment be made to the court; others allow payment to be made directly to you.

Do not hesitate to act if you do not receive the money. First, contact the clerk and file a Petition for Notice to Show Cause. This will be sent to the defendant, ordering the employer to come into court and explain why it has not paid. You should also file an Order of Execution with the sheriff's, constable's, or clerk's office in the county where the defendant is located or owns a business. This will enable you to discover where the defendant has assets. The sheriff or other enforcement agent has the power to go out and collect the judgment either by seizing personal property, freezing the defendant's bank accounts, placing a lien on any real estate, or even garnisheeing an individuals' salary where appropriate. The clerk of your small-claims court should tell you exactly what to do to collect your judgment.

Final Counsel Comments:By bringing suit in small-claims court, you usually waive your right to a trial by jury. However, the defendant can surprise you. Some states allow defendants to move a small-claims court case to a higher court and/or obtain a trial by jury. If this occurs, you will need a lawyer to represent you, and his or her services could cost as much as your claim in the dispute.

Some states do not allow losing plaintiffs to appeal. Also, an appeals court will overturn the decision of a small-claims court judge only if there is strong proof that the judge was biased or dishonest. This may be difficult to prove.