Imagine that you’ve just moved into a home in Little Rock and hired a contractor to fix the shabby old roof. The total contract price was $5,000, including the labor and materials (shingles, nails, and so forth). You pay half of that cost up front. But then, in the middle of the job, your contractor disappears. Your roof is barely sealed shut, and rainwater can leak into your home. You need to hire a new contractor, at additional cost, to clean up the mess.
A situation like this is exasperating for a homeowner. Often, the cost of hiring an attorney to pursue a contractor to recover for small-scale projects is greater than the amount you might actually recover (in this example, only perhaps $2,500 plus some amount for property damage). Fortunately, Arkansas’s Small Claims Court provides a convenient way to adjudicate cases where the amount in controversy is $5,000 or less, without the need for an attorney.
When mired in conflict with your contractor, you may feel weak. But the possibility that you might sue actually gives you tremendous strength. Imagine that you’re a small-town contractor in Arkansas trying to run your business. Litigation would be a nightmare. It distracts you from work, creates uncertainty, and takes time in the form of responding to subpoenas, preparing paperwork, and making court appearances. Your threat of a lawsuit is thus something your contractor would likely take seriously.
This creates fertile ground for a negotiation. When a dispute develops, 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 (if so, how much time, exactly)? Is there an issue that can be negotiated?
If this conversation doesn’t lead to a resolution, or if it seems like your contractor is ignoring you completely, try sending a demand letter. This letter 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 prospective defendant in a more meaningful way than a simple oral complaint.
Not all disputes can be solved by negotiation. You may need to actually file a lawsuit. Suing will truly get the contractor's attention, perhaps leading back to a negotiation. A contractor who ignores lawsuit will be held in “default,” meaning you will win your judgment automatically.
When considering what to do about your case, keep in mind the limitations on time and money in the Arkansas Small Claims Court. One of the most significant limitations on small claims court is that your claims cannot exceed $5,000.
Arkansas also has laws called statutes of limitations regarding when you can file suit. The two most common causes of action against contractors are breach of contract (five-year limit under A.C. §16-56-111) and property damage (three-year limit under A.S. §16-56-105). If the contractor’s error or breach did not occur within that period, your claim might be barred even if the judge agrees entirely with your allegations.
Like in other states, filing a lawsuit in Arkansas is not free. The cost will vary depending on your county. In Sebastian County, for example, the filing fee is $65 (as of 2015).
Note that there will be additional fees along the way, for example if you want to sue multiple defendants (such as subcontractors or architects) or if you need to file subpoenas. It is generally smart to save a couple hundred dollars to spend on these court fees – plus the costs of copies and evidence binders – 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 need to reimburse you.
First, you’ll need to select the county for your lawsuit. In Arkansas, that can be either the county where you live or the county where your contractor is based. Arkansas’ Judiciary provides a helpful map of locations for its courts where you can find contact information.
The clerks at the courthouse are extremely useful as resources. The clerks cannot, however give legal advice or tell you what the judge will decide (indeed, most clerks are not attorneys). Nevertheless, they do know the court system very well, and can give you information about the correct filing procedures.
After finding the appropriate county, you’ll need to file a Small Claims Complaint, which will also need to be served upon 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. Arkansas’ Consumer Protection Division also publishes this helpful guide on the process for filing these documents in Arkansas.
After filing and serving the Complaint, the defendant will have 15 days in which to file a document called an Answer, which allows him to state his version of the case. He will likely deny any allegations you made.
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 company, or a plaintiff arguing before the Arkansas 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 most 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 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; 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 he 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. Ask the local clerk about the appropriate procedure for requesting default.
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 pays, you can file a satisfaction of judgment to remove the case from the court’s docket. Again, as the local clerk for the appropriate procedure for formally closing out your case.
Finally, you might win your trial, but find that your contractor still refuses 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 Execution, 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.