Is small claims court the right court for you?
Scenario: You performed services for someone and they owe you $7,00.00.00; or, you sold ABC Co. a bunch of widgets for $7,000.00, and they failed to pay you. What is your next step? After your failed attempts to collect payment, you may want to file suit against the person or entity for collection of the debt.
One choice – File a Lawsuit in the Los Angeles Superior Court (LASC).
The fee to file a lawsuit in LASC for claims under $10,000.00 is $205.00 (for claims between $10,000.00 and $25,000.00, the fee is $330.00). Once filed, you will be placed on a calendar that will hopefully set the matter for trial within 12 months. During that time, parties are given sufficient time to conduct “discovery” (gathering and exchanging of documents and information relating to the case), which can be time consuming and, if you choose to hire an attorney to assist you, somewhat costly. Moreover, absent a written contract that allows for attorneys fees to be awarded to the prevailing party, you would unable to recover a substantial amount of those fees.
Another choice – File a “small claims action.”
If you are a “natural person” (not a business entity such as a corporation or a Limited Liability Company, or LLC) you may claim up to $7,500.00 in a small claims action; a business or public entity may claim up to $5,000.00.
As a natural person, you can bring a claim for $7,500.00 (filing fee: $75.00). If you are owed more than the $7,500.00 limit, you are permitted to waive the excess. The court will generally set your matter for trial within a couple of months. Discovery is limited, and no party can be represented by an attorney (except on appeal by a losing defendant).
On smaller claims, the (aptly named) Small Claims court provides a streamlined legal process which avoids the cost and delays of Superior Court filings. There are limitations; for example, there is no appeals process for the plaintiff, which means if the judge rules against you as plaintiff, you are stuck with that decision.
Keep in mind that you may consult an attorney to help advise you and prepare you for your small claims case; the attorney cannot represent you in the trial. If your claim exceeds the small claims limit, or if your matter involves complex legal issues, then consulting an attorney is often the wiser route.
About The Author: Peter Stavropoulos is a business attorney who represents individuals and small to medium businesses, counseling clients on matters ranging from entity formation, employer/employee relations, contract draft and review, and civil litigation. He is a contributing author to www.rosecitybusiness.com and www.bizeinstein.com. To learn more, please visit www.petestavlaw.com or send an email to Peter at peter [at] petestavlaw.com.