Wednesday, January 20, 2010

So You Want to go to Small Claims Court...

An unfortunate aspect of life is that sometimes, people owe you money. Whether it’s a friend you gave a loan to and hasn’t paid back or you bought a defective TV and the store won’t let you return it. It’s annoying, frustrating, infuriating, agitating, and even migraine inducing.

So what do you do? You’ve tried making numerous phone calls and pleading with the person but it seems like you’ve tried everything. At this point it may seem like a good idea to sue that person. But unless there is a lot of money at stake, it is probably not worth the money and the hassle to resort to all out litigation to take care of the problem. Civil suits are expensive because of attorney fees and filing costs and could take many months if not years to resolve. Typically, civil litigation suits cost thousands of dollars before anything is accomplished.

Instead of a typical lawsuit, an effective way to resolve a dispute that involves a relatively small amount of money is the Small Claims Court. The cost of filing a case is usually a small and you can have a court make definitive decision on your issue and obtain a legally enforceable judgment to force the person you are suing to pay you (if the court finds him or her liable).

The goal of this guide is to give you a few helpful pointers that will help you present your case clearly and effectively so that you can have the best shot at prevailing on the matter. What follows are a series tips of what to do before filing a small claims and action, how to best present your case at the hearing, and what to do after.

Before the Hearing

Starting the process of small claims action differs from state to state, but most states have some requirement that you take some steps to resolve the dispute without going to court. A good way of doing this is by writing a formal letter to the person you are thinking about suing. In the letter, be sure to state exactly how much money you think that the person owes you and why he or she owes it to you. You should end the letter by stating that you will resort to filing a small claims action if he or she refuses to pay you. In many cases the mere threat of legal action will be enough to get the person to act. But if not, a letter (or email) will be enough to show the court that you made a good-faith effort to try to resolve the matter informally.

After you have done everything required before you file, consult your local court to see what the requirements are to file your complaint with the court. For example, claimants in California should consult where you find a step-by-step process to filing claim including all the necessary forms and instructions on where and how to file it.

After you file a complaint you will be required to serve a copy of that complaint on the person you are suing. In almost all states, you will be required to have someone other than yourself personally serve the complaint on that person. There are service processors companies that will charge you to do this, but having a friend or relative of yours to do this it will work just fine. If you are unable to serve the person successfully after a few attempts, most states afford you the option of substituted service which allows you to give the complaint to that person’s home or office location without actually handing it to him or her.

Lastly, it is a good idea to consult an attorney about your case. One way small claims hearings differ from regular trials is that you cannot have an attorney represent you at the hearing. However, there is nothing wrong with having an attorney help you with your case. An attorney can be helpful in that he or she can offer an opinion on the merit of your case (i.e. whether you will be successful) and can help tell you what exactly you need to prove at the hearing.

During the Hearing

Going in front of a judge can be one of most intimidating things that you will ever do. Public speaking is a difficult task in any circumstance, but usually there is not much at stake. But with a small claims hearing, a lot of the outcome will based on your testimony before the judge. This is an extremely daunting task, especially if you have never testified at court before.

Thankfully, most small claims judges are used to people coming before them that have never been in a court room before. A good judge will tell you what he or she wants to hear and will help you get out story. Unfortunately there are some judges that are impatient, but in my experience these judges are the exception (e.g. Judge Judy) rather than the norm.

A good way to get a feel about how your hearing will play out is to attend other small claim hearings before yours. Seeing a hearing in action will give you an idea of what to expect and you will also see what type of facts the judge finds most relevant and what type of presentation is the most effective. Watching a few hearings will make your own hearing be less stressful because you will have a good idea of what to expect.

As for the hearing itself, I have counseled clients that think it is a good idea to prepare a statement and read from it. These individuals are worried that if they don’t write everything down they will forget a key fact. My advice to these individuals is simple: DON’T READ! While it may seem like a good idea to have every single word down on a piece of paper, the reality is that it is very hard to listen to someone reading a prepared statement. More often than not, people that are reading slip into a monotone, unnatural voice that is completely lacking in any inflection, emphasis, or color. Any person, judge or not, that is listening to another read will inevitably start to tune out and everything you say will sound like “blah, blah, blah.”

A much more effective way of presenting your case at the hearing is to simply tell your story. Start from the beginning; talk about when the trouble started, how you have tried to fix the problem, and anything else that you think is important. If you want to remember everything you want to say then use a series of note cards with bullet points covering the subjects you want to bring up to the court. Just tell the story as if you were telling it to a friend you have not seen in a long time. By telling a story, you will offer a much more compelling presentation of your case that will engage the judge and he or she will be much more likely to remember the key points you are bringing up.

It is very likely that the judge will have questions for you either during your presentation or after. When this happens, answer the judge in straightforward manner and try to keep your responses as short as possible. It is often tempting when answering a question to go off on tangents or give information that wasn’t necessarily asked for. But doing this may try the judge’s patience and may impact your credibility. Listen to the judge’s question and answer it directly as possible. If he asks you a yes-or-no question, don’t answer “yes, but…”, just answer “yes” or “no.”

A lot of what small claims hearings comes down to is credibility, i.e. whose story does the judge believe more? To maximize your credibility and improve your chances at winning your case, you need to be mindful of courtroom etiquette. What I mean by courtroom etiquette is having a certain respect for the court and its role in our society. Courtrooms are supposed to be solemn, respectful places, a place you take seriously. Therefore, be sure to address the judge as “Your Honor,” don’t cuss or use slang (chances are the judge doesn’t know that “scrilla” means money), don’t stare down the defendant, and please, please, PLEASE, dress appropriately (no shorts or basketball jerseys!).

And most of all, stay calm! Don’t get too emotional or lose your cool. Before you start speaking, take a few deep breaths, relax, and speak slowly. You’ll do fine!

After the Hearing

So you case is over and you won! Congratulations! I knew you had it in you. But now what? The court has found that the defendant owes you money and has accordingly entered a legal order to that effect. The question becomes: How do I collect my judgment? If the defendant refuses to pay you after the hearing you will have to figure out how to enforce the court order because in most states it is the responsibility of the winning plaintiff to collect.

Some states, for example California, offer what are called “Debtor’s Examination Hearings.” At these hearings you can compel the defendant to show up at a court hearing and you will be permitted to ask him questions, under oath, about what assets he has. Using this information, you will be able to get a lien on this property to satisfy the judgment. Another option is using a Collections Agency. Collection agencies are an effective way of satisfying your judgment, but they will take a cut of money.

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