Imagine that you hired a contractor to perform some specific renovations on your Chapel Hill, North Carolina home – maybe a new kitchen island, replacing the bathroom counters, or repainting. Now imagine that the contractor failed to perform his duties. He used low quality materials, unevenly installed the countertops, or used the wrong color paint. Or perhaps he failed to complete the project entirely, leaving before it was complete. If you had spent only a few hundred dollars, perhaps you'd “write off” the loss as a lesson learned. If you were wealthy and were talking about hundreds of thousands of dollars, hiring a lawyer might be the obvious path. But you're in the middle -- you might stand to lose a few thousand dollars. For most people, that's too much to take lying down.
Small claims courts are generally a good mechanism for dealing with these types of disputes. For the most part, such courts allow litigants like you to pursue legal claims against businesses or individuals without needing to hire an attorney. Litigation in small claims court is also typically faster than litigation in the state’s regular court of general jurisdiction. How should you pursue such claims against your contractor in small claims court in North Carolina?
When you have a dispute with your North Carolina contractor, even most lawyers will agree that running to court isn’t always the best first step. More often than not, you should begin by having a conversation with your contractor about the issue – the color of the paint, the quality of the materials, or the shoddy work. After reminding your contractor what was promised (perhaps with reference to the written contract, if you have one), give him an opportunity to explain his point of view. Is the job more expensive or complicated than anticipated? Does the contractor need more time? Is there an issue that the two of you can work out?
If this softer strategy gets you nowhere, put your concerns on paper. Write a letter to the contractor explaining what was promised (again with reference to any written contract).
A letter tends to carry more weight than a mere oral complaint. This is especially true if you include a sentence at the end of your letter to the effect that you reserve all your legal rights and remedies. Moreover, sending a letter is strategic if you eventually sue, because it can provide evidence that you did all you could to avoid going to court.
Sometimes called a “good faith letter,” it demonstrates to a busy small claims court judge that you made reasonable efforts to resolve the dispute amicably before burdening the justice system. In other words, it helps make you look like the “good guy.” You wouldn’t want the contractor to be able to tell the judge that your lawsuit was the first time he ever heard that you had complaints about the work; judges generally prefer litigation to be the plaintiff's last resort.
While many – maybe most – disputes with contractors can be solved through negotiation, not all can. Sometimes you’ll need to file a lawsuit. In North Carolina, the amount in controversy in a small claims action may vary from county to county, depending on local rule, and may range from $5,000 to $10,000. Litigants can represent themselves without the need for lawyers; there are also no juries, only judges. There are a few important things to keep in mind when you wish to begin your lawsuit.
One of the most significant limitations on North Carolina Small Claims Court is that your claims cannot exceed $10,000. Under N.C. Gen. Stat. § 7A-210, the primary relief requested must be monetary – that is, you must be seeking money, rather than some other form of relief, like a court order that your contractor must do further work on your home. North Carolina also has statutes of limitations on when you can file suit. The two most common causes of action against contractors are breach of contract (3-year limit under N.C. Gen. Stat. § 1-52(1)) and property damage (3-year limit as well under N.C. Gen. Stat. § 1-52(4)). Before filing, make sure that the contractor’s error or breach occurred within that period.
To formally begin your North Carolina small claims court case, you can file a Complaint for Money Owed in the clerk’s office for the appropriate county. The appropriate county could be where the defendant contractor is based, or (more commonly) where your home is located, since that’s where the harm occurred.
The North Carolina Court System website has a convenient map of all of the counties; each one has a courthouse with a Small Claims division. Filing a lawsuit in Small Claims Court is not free. The current filing fee established by the North Carolina General Assembly for small claims actions is $96, payable to the clerk of the county where you are filing the action. Additionally, you will need to pay a $30 service fee for each defendant (for example, if you’re suing more than one contractor).
Your complaint needs to include a sworn statement regarding the facts of your case. It's often best to frame it as a story, beginning with the moment you and your contractor first agreed to the scope of work. Generally, you should avoid legalese or citations to statutes and legal treatises. There is no expectation that you know the law. Rather, in small claims court, it is the judge’s job to know the law; your job is to present the facts of your case in a clear and compelling fashion. More often than not, a small claims court plaintiff who attempts to write a detailed legal brief with Internet research on legal precedent and statutes will confuse the judge rather than illuminate the important facts.
Once the complaint is filed, the clerk will send a copy to the defendant contractor, along with a “notice to appear” in court on a specified date. That will be the date when you each orally present your case to a judge.
Before you appear in North Carolina small claims court for your trial, do some preparation. Court can be a stressful environment, and it’s natural to be nervous when speaking to a judge – especially with the contractor standing next to you. Practice is key.
A good way to rehearse is in front of a friend or family member. Try to get your statement down to around one or two minutes. Keep it simple and direct. Judges have large caseloads and see dozens of litigants every single day. Avoid irrelevant facts. Make the judge’s job easier.
A second important aspect of convincing the North Carolina judge of the merits of your claim will be the evidence you present. In home improvement litigation, evidence is crucial to avoiding a he-said/she-said situation, where you and your contractor simply disagree on whether or not he properly performed the duties.
Your most important evidence will likely include: 1) Any written contracts between you and the contractor outlining the work he promised to perform, the timeline for performance, and the payment agreed upon; 2) Any proof of payments from you to the contractor, showing how much money you’ve already paid; 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 crummy workmanship. In some circumstances, you might also want to bring witnesses to court to describe elements of the story to the judge.
One of the most frustrating aspects of Small Claims Court (in North Carolina and elsewhere) is that even if you “win” your case against your contractor, you essentially receive a piece of paper (called a judgment). Honorable contractors will see that they’ve lost in court and will pay you what the judge ordered; this is especially true if the contractor is local, and knows that it needs to operate in your community and have relationships with local banks. But not all contractors are so forthcoming. It remains your responsibility to enforce that judgment if the contractor doesn’t willingly pay. Enforcing a judgment can be time-consuming and costly.
North Carolina’s court system provides resources on collecting judgments. If the contractor fails to pay you, you will need to return to court to file additional paperwork. The judge might set a schedule for payment that will be reasonable for the contractor (for example, if cash flow is an issue). Alternatively, the judge might order that the contractor’s bank accounts be garnished.