If you are the defendant in a small claims case, here are some of the issues you'll want to be aware of--from making sure you are properly served to fighting back with your own claim.
If You Are Not Properly Served
You may conclude that you were not properly served with the plaintiff's court papers. Perhaps the plaintiff's claim was left with your neighbors, or maybe you weren't given the correct number of days in which to respond. Because there are one or more procedural defects in the plaintiff's case, you may be tempted to not show up in court. This would be a mistake. The judge may be unaware of or overlook the problem and issue a default judgment against you. If this happens, you will have to go to the trouble of requesting that the default be judgment vacated.
When the plaintiff fails to have court papers properly served on you or makes some other procedural error, your best course of action is to contact the court in writing, explain the problem, and ask that the case be dismissed. If the court can't or won't help, show up on the day in question and make your request in person. If the problem involves a failure to serve papers on you properly, chances are the plaintiff will re‑serve you at this time, but at least the case should be delayed to give you a chance to prepare your defense.
If You Are Sued in the Wrong Court
If you think the plaintiff has filed suit in the wrong small claims court or, in legal lingo, "in the wrong venue," you can challenge the court's right to hear the case (challenge the venue).
You can do this in two ways. First, you can go to court on the day your case is scheduled and request that the case be dismissed. If the judge disagrees with you, he or she will simply go ahead and hear the case. However, if the judge agrees that the location is improper, your case will either be dismissed or transferred to a court in the appropriate judicial district.
Your second, and probably easier, option is to write to the court, explaining why you think the claim was brought in the wrong place. Send a copy of your letter to each of the other parties. If the judge agrees that the suit was brought in the wrong place, the case will be dismissed. If the judge disagrees, he or she will postpone the hearing to give you an opportunity to appear. You will receive notification of the court's decision by mail.
Out-of-state defendants should ask for a dismissal. If you don't live–or do business–in the state in which you are sued, the small claims court normally doesn't have power ("jurisdiction") to enter a valid judgment against you, unless court papers are served on you while you happen to be in the state. Exceptions to this rule exist for out-of-staters sued because of a dispute involving their real property located in the state or because of a traffic accident that occurred in the 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. Send a copy of your letter to each of the other parties. Stay in touch with the court until you are sure the case has been dismissed.
If the Statute of Limitations Has Expired
Plaintiffs do not have an indefinite period of time in which to sue someone for a perceived wrong. If the plaintiff is suing you about an event that happened in the hazy past, check to see whether the plaintiff has missed the time deadline (statute of limitations) for suing. The statutes of limitations are different for different types of lawsuits but are never less than one year from the date of the incident. The main exception to this rule is if the plaintiff is suing a government agency, in which case the plaintiff must file an administrative claim form with the government within a shorter period of time.
Filing a Response
In some states, the defendant is required to make a written response to the plaintiff's claim to avoid having a default judgment entered. The deadline for submitting the response differs from state to state.
Filing a Defendant's Claim
Some defendants will not only want to dispute the plaintiff's claim but will also want to sue the plaintiff back. Perhaps you are outraged that the plaintiff sued first, because you are the person who was wronged. To assert your own claim against the plaintiff, promptly file a defendant's claim (sometimes called a counterclaim) for up to the dollar limit for your state's small claims court. If you want to sue for a greater amount, ask the small claims clerk how to transfer the case to formal court.
If you are a defendant who has filed a claim and you are unable to serve the plaintiff, simply show up on the court hearing date with your papers and serve the plaintiff in the hallway (not in the courtroom). Then explain to the judge why it was impossible to locate the plaintiff earlier. The judge will normally delay the case for a few days, unless both you and the plaintiff agree to proceed with your claim that day. Either way, the judge should accept your defendant's claim as having been validly served.
Consider Trying to Compromise or Mediation
f you feel that perhaps the plaintiff is partly right but that you are being sued for too much, your best bet is to try to work out a compromise settlement. One good approach is to call or write the plaintiff and make a settlement offer. How much to offer depends on the relative merits of your case as compared to the plaintiff's, and whether the plaintiff is asking for a reasonable or inflated amount. Assuming the plaintiff has a pretty strong legal position (you probably are legally liable) and is asking the court for an amount that's reasonable, a good starting point is to make an initial offer to pay about half of the request. Remember, even with a strong case, the plaintiff may be motivated to accept your offer if for no other reason than to save the time and trouble it takes to prepare for and appear in court. More likely, your initial offer will set in motion a little dance of offer and counteroffer, ending with the plaintiff accepting a compromise–maybe between 65% and 80% of the original demand. Obviously, if the plaintiff is asking for way too much, or you are not sure that a judge would find that you are liable in the first place, you'll want to offer less or fight the case. Any settlement you make should be set down in writing.
Engaging in mediation is frequently beneficial to the defendant, because mediation tends to encourage a compromise settlement for a lower amount than the plaintiff has demanded. In addition, mediation gives the defendant a chance to raise issues that would not be considered relevant by a small claims court judge. For example, in a dispute between neighbors, local businesspeople, or relatives, mediation affords an opportunity for both legal and emotional concerns to be raised and dealt with.
Mediation of small claims cases works in various ways in different states. In many it can take place in the courthouse itself and is encouraged by the small claims court. In others, it's available at a nearby community mediation project. Ask the small claims court clerk where mediation is available in your area. Then, if necessary, contact the mediation project and enlist their help in bringing the plaintiff to the table.
Don't rely on being judgment-proof. Some defendants who have no money are tempted not to show up and defend a case in small claims court because they figure that, even if they lose, the plaintiff can't collect. If you have a decent defense, this is not a good idea. Judgments are good for anywhere from five to 20 years, depending on the state and can be renewed, if necessary. One possible exception to this "always fight back if you have a decent case" advice is if you plan to declare Chapter 7 bankruptcy. Bankruptcy wipes out most debts, including small claims judgments.
If You Have No Defense
Now let's assume that you were properly served with the plaintiff's papers in a proper court before the deadline, you have no valid defense to the merits of the case, and neither you nor the plaintiff want to compromise. Perhaps you borrowed money under the terms of a written contract and haven't been able to pay it back. Because you know you'll lose, you may conclude that it makes little sense to defend yourself in court. Your decision not to show up will very likely result in a default judgment against you. This judgment will most probably be for the dollar amount demanded by the plaintiff, plus the amount of the filing fee and any reasonable costs to serve the papers on you.
Even if you owe 100% of the plaintiff's demand, it never hurts to make an offer. Especially if you have the money, why not offer to pay 75%-90% of what the plaintiff requests. To save the trouble of going to court–or for some other reason you may never guess–the plaintiff may accept, even though it is almost certain that the person would win a judgment for the whole amount by going to court.
If you do not dispute the amount of the plaintiff's claim but you want to make payments in installments rather than all at once, your best bet is to show up on the day your case is scheduled and explain your situation to the judge. Tell the judge how much you can afford to pay each month. The judge has the discretion to allow you to pay the judgment in installments.
Transferring Your Case to Formal Court
Depending on state law and the facts of your case, you may be able to have your case transferred out of small claims court to a formal court. This may be called municipal, superior, district, county, justice, circuit, city, or civil court. Whatever the name used in your state, this court will allow lawyers and require formal rules of evidence and procedure, including far more paperwork than is required in small claims court.
Transfer rules vary greatly from one state to the next. Some states allow any defendant to transfer any case, while others allow it only if the defendant files his or her own claim (a counterclaim) for an amount greater than the small claims limit or makes a request for a jury trial. Still other states allow a case to be transferred only with the discretionary approval of a judge. And some states don't allow transfers at all.
If you are interested in transferring your case, you absolutely need to consult your state's rules. But first it makes sense to ask yourself why you would want to transfer a case out of small claims court. Because small claims court is cheaper, more user-friendly, and far less time-consuming than formal court, you'll usually want to defend your case right there, unless, of course, you want to file a defendant's claim (counterclaim) for an amount significantly over the small claims limit. Here are some other situations in which it might make sense to transfer your case:
- To get a jury trial (in states where transfer for this reason is allowed).
- Because you know how to navigate in formal court far better than the plaintiff–or are willing to hire a lawyer to represent you.