If you find yourself at the wrong end of a lawsuit in small claims court, here are your options.
Raise a Procedural Problem
You may believe that you were not properly (legally) sued or served with the plaintiff's court papers. Perhaps the plaintiff's papers were left with a neighbor or you were not given the correct number of days in which to respond to the plaintiff's complaint. Or maybe the plaintiff sued you in the wrong court.
Contact the clerk immediately to explain the problem with the way the plaintiff delivered the court papers or with the court location and ask that the case be delayed ("continued") to a date that is convenient for you or transferred to the correct court.
Do not be tempted to simply not show up in court just because you think theres a procedural defect in the plaintiffs case. A judge can easily overlook even a major technical problem and, as a result, enter a judgment against you by default. If this happens, you will have to go to the trouble of requesting that the judgment be set aside ("vacated").
Out-of-state defendants. If you don't live -- or do business -- in a state where you are sued, a court normally doesn't have power ("jurisdiction," in legalese) to enter a valid judgment against you, unless court papers are served on you while you happen to be in that state. (Exceptions exist for people who live out of state but own land in the state where the lawsuit was filed or got into a traffic accident in that state.) If you are an out-of-state resident and receive small claims papers via the mail, promptly write a letter to the court explaining that you do not believe you are subject to the court's jurisdiction. Stay in touch with the court clerk until you are sure the case has been dismissed.
Try to Negotiate a Compromise
If the plaintiff has some right on his side, but you believe you are being sued for too much, contact the plaintiff and try to work out a compromise settlement. One good approach is to call, write, or email the plaintiff and make an offer. How much to offer depends on the strength of your defense and whether you think the plaintiffs estimate is reasonable or substantially inflated.
Assuming the plaintiff has a strong legal position (that is, you probably are legally responsible for the plaintiff's injuries or damages) and is asking the court for an amount that's, broadly speaking, reasonable, you might begin by making an initial compromise offer to pay about half of the plaintiffs demand. Even with a strong case, the plaintiff may be motivated to accept your lowball offer, if for no other reason than to save the time it takes to prepare for and appear in court.
More likely, your offer will set in motion a little dance of offer and counteroffer, with an eventual compromise of somewhere between 65% and 80% of the plaintiff's original request. If the plaintiff is asking for way too much, or you are not sure that a judge would rule in the plaintiff's favor, you'll want to offer less. (For more negotiating tips, see Nolo's article Try to Compromise Before You Sue.)
Suggest Mediation If Want to Avoid Conflict
If negotiation doesn't solve the problem, mediation is almost always beneficial to the defendant, because the process tends to encourage a compromise settlement for a lower amount than the plaintiffs demand. In addition, mediation gives the defendant a chance to raise issues that are not officially part of the plaintiff's lawsuit. For example, in a dispute between neighbors, businesspeople, or relatives, it's often important to discuss and settle emotional concerns in addition to sorting out how much is owed. (For more information, see Nolo's Mediation, Arbitration & Collaborative Law.)
Ask the small claims court clerk for help with mediation. In some states, small claims courts require parties to try mediation before a judge will hear the case. Elsewhere, mediation is easily accessible on a voluntary basis, either right in the courthouse or at a nearby community mediation project. Ask the small claims court clerk where mediation is available in your area. Then contact the mediation project and enlist their help in bringing the plaintiff to the table.
Don't Show Up ("Default")
Assume you have no valid defense on the merits of the case. Perhaps you borrowed money under the terms of a written contract and haven't paid it back. If you know you'll lose, you may conclude that it makes little sense to fight back in court. Fine, but realize your decision to not show up will almost surely result in a default judgment against you. The judgment will probably be for the dollar amount demanded by the plaintiff, plus the amount of his filing fee and any reasonable costs of serving the papers on you.
Ask for Installment Payments
In a number of states, if you do not dispute the plaintiff's claim, but cannot afford to pay it all at once, the law allows you to request the right to make payments in installments. After checking with the small claims clerk to see that installment payments are an option in your state, your best bet is to show up in court and explain your financial situation to the judge. If you can't be present, write a letter to the court prior to the court hearing (be sure to properly identify the case, using the case number from the Claim of Plaintiff form) explaining why it would be difficult or impossible to pay any judgment all at once.
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