Imagine that you’ve just moved into a new home in Anchorage and hired a contractor to renovate the bedrooms. The total contract price was $5,000, including the labor and materials necessary for new carpeting, repainted walls, and new light fixtures. You pay 50% up-front. But then, in the middle of the job, your contractor disappears. Wires are hanging from the walls; the old carpet is pulled up; and paint cans are lying around.
Situations like these can be extremely frustrating; even more so when you try to chase down your contractor to get your money back. Like with many small-scale home renovations, the cost of retaining an attorney could quickly exceed the amount the contractor owes you. Fortunately, Alaska’s Small Claims Court provides a convenient way to adjudicate your case. This specialized court hears cases where the amount in controversy is $10,000 or less.
Imagine that you are a contractor operating a small business in Anchorage, where your home is located. Litigation is a nightmare. It distracts you from business opportunities, creates financial uncertainty, and takes time in the form of dealing withsubpoenas, paperwork, and court appearances.
This means that your threat of a lawsuit is something your contractor would likely take seriously. When a dispute develops, therefore, court isn’t always the best first step. Begin by having a conversation with your contractor about the color of the paint, the quality of the materials, or the shoddy work – whatever the problem might be. After reminding your contractor what was promised, listen with open ears to the explanation. Is the job more complicated than anticipated? Does the contractor need more time to finish work (and is able to give you a firm schedule for going forward)? Is there an issue that can be negotiated?
If the conversation doesn’t lead to a resolution, or if it seems like your contractor is ignoring you completely, try sending a demand letter. This tells your contractor in no uncertain terms that, unless a solution can be negotiated with haste, you will sue. Sometimes, putting this in writing will get the attention of a defendant in a more meaningful way than a simple oral complaint -- and it helps your define your claim and start creating a record for use in court.
Not all disputes can be solved by negotiation. Sometimes, you’ll need to actually file a lawsuit. This has several benefits. For starters, it will truly get the contractor's attention for a negotiation. And, of course, it may lead you to a speedy decision on whether your contractor has wronged you and owes you money.
When considering your case, keep in mind the limitations on time and money in the Alaska Small Claims Court. One of the most significant limitations on small claims court is that your claims cannot exceed $10,000. Alaska also has statutes of limitations on when you can file suit. The two most common causes of action against contractors are breach of contract (three-year limit under A.S. § 09.10.053) and property damage (six-year limit under A.S. § 09.10.050). Before filing, make sure that the contractor’s error or breach occurred within that period.
As in other states, filing a lawsuit in Alaska is not free. If your claim is for $2,500 or less, the cost is $50; if your claim is for more than $2,500, the cost is $100 (2015 figures). Note that there will be additional fees along the way, for example if you want to sue multiple defendants (such as subcontractors) or if you need to file subpoenas. It is generally wise to save a couple hundred dollars to spend on these court fees over the course of the case.
If you win, the judge will sometimes award you these fees as part of the judgment, meaning your contractor will reimburse you.
First, you’ll need to select the county for your lawsuit. In Alaska, that can be either the county where you live or the county where your contractor is based. Alaska’s Judiciary provides a helpful list of locations for its courts where you can find contact information. The clerks at the courthouse are extremely useful resources. However, be mindful that the clerks cannot give legal advice or tell you what the judge will decide. That said, the Alaska Judiciary does provide resources where you can learn more about the law affecting your claim, including free public law libraries and bar associations.
After finding the appropriate county, you’ll need to file a Small Claims Complaint, which will also need to be served upon (personally delivered to) your contractor through a process server. This can be filled out online, but must be physically brought to the clerk’s office when you file. (Nolo recommends typing the form if you can, since it makes the document look more professional).
This document is a sworn statement regarding the facts of your case. You can frame it as a story, from the moment you and your contractor first agreed to the scope of work. You might also read this helpful guide from the Judiciary on the process for filing these documents in Alaska.
After filing and serving the Complaint, the defendant will have 15 days to file a document called an Answer, which allows him to state his version of the case. He will likely deny any allegations you make. The clerk will then send a “notice to appear” in court on a specified date to both of you. That will be the date when you each orally present your case to a judge.
Whether you are a lawyer arguing for millions of dollars against a large corporation, or a plaintiff arguing before the Alaska Small Claims Court for a few hundred dollars, preparation is critical. Court is stressful, even when your case is strong. Your contractor will likely be standing right next to you, and will surely disagree with everything you say.
A good way to rehearse is to explain your claim to a friend or family member, trying to get your statement down to roughly one or two minutes. Keep it simple and direct. Remember, judges have large caseloads and see dozens of litigants every single day. Avoid irrelevant facts.
Remember to bring important documents with you to court, including: 1) Any written contracts between you and the contractor outlining the work he promised to perform, the timeline for his performance, and the payment agreed upon; 2) Any proof of payments from you to the contractor, showing how much money you’ve already given him; 3) Any emails or letters you’ve sent to the contractor outlining your dispute; and 4) Photographs of your home before and after the construction work, especially photos that show shoddy workmanship.
First, you can win a case by default. If you sue your contractor and have proof that he was served with the lawsuit, but never filed an Answer or otherwise appeared in court, you can file a Request for Default Judgment. This will give you a “total win” on everything you asked for, as long as the judge approves, since your contractor failed to object.
A second possibility is that your contractor does appear, but you win your lawsuit at trial. In this case, your contractor might immediately pay you whatever the judge ordered. Once he does, you can file a Satisfaction of Judgment to remove the case from the court’s docket.
Finally, you might win your trial, but your contractor will still refuse to pay you. It remains your responsibility to enforce that judgment if the contractor doesn’t willingly pay.
Enforcing a judgment can be time-consuming and costly, as well as stressful. If 20 days have elapsed since the judgment and the contractor has still not paid you, you’ll need to return to the court and speak with the clerk. There, you will fill out Writ of Garnishment, which can allow you to seize non-exempt personal property or money held by the contractor. However, you should first weigh the time and cost of this process against the amount that you won at trial.