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Some Facts about Small Claims Court
There are clearly many Cows who for one reason or another seem to despise using our legal system to pursue bad debts, but honestly, many of the negative characterizations of Small Claims Court that I’m reading here on this forum seem to be grossly exaggerated, and as one of the leaders of this forum I feel the need to set the record straight before an entire generation of Cows head out into the business world fearful of using one of the great tools of American democracy.
If not overused or abused, small claims court can in fact be one of the most useful and powerful weapons in the arsenal of small business owners. In most jurisdictions, because it prohibits the use of lawyers by all parties, it is truly “the people’s court,” and it can empower anyone to standup to those with more power and more money than themselves.
Contrary to what I’ve read here, filing in small claims court does not take an enormous amount of time, nor does not cost very much money, with the average fees around the country typically falling between $20 to $50. And, the stigma that I so often read about here, that filing in small claims court will somehow ruin your reputation in the business world, is simply overstated. There are many thousands of small claims cases adjudicated every day all over the country, and few people ever hear about them or even care. In this economy, anyone who thinks that others will blackball them simply because they do everything they can to attempt collect on a bad debt, is simply missing the boat. Honestly, how many of you have ever blackballed anyone or any company because you found out they filed a case against a deadbeat client?
Small claims courts are primarily a plaintiff’s court, meaning, the person who typically takes the time and effort to file the case most often prevails, principally because they typically can prove a loss, which is the overriding factor in any civil case. And, contrary to popular belief, in most cases, proving a loss does not require an ironclad written contract. Under basic tenets of law (at least in the U.S.), any exchange of goods, services, or property for monetary consideration establishes a set of reasonable expectations and obligations that are entered into by both parties, which is in fact construed as a binding contract. So, while there can certainly be some very complex and complicated aspects of our business, it’s not very hard to satisfactorily prove a loss if you can show that you delivered the goods and services, but they failed to deliver the money.
As some have mentioned, prevailing in small claims court does not always mean that you will automatically collect on the judgment, however, there are remedies provided for that too, which are also not terribly time-consuming or expensive. So, no one should let that aspect of the process stand in you way either.
I my opinion, the bottom line is, if you decide you’ll feel better going after a deadbeat client rather than taking it on the chin, go for it. I can assure you, the few times I’ve had to do it in the last three decades of running my business, I prevailed in every instance, it took very little of my time, it cost very little of my money, and it didn’t ruin my reputation nor damage my karma. Personally, I found the entire experience to be quite rewarding, very educational, and above all, extremely empowering.
I hope this helps any Cows in the position faced with a debt collection problem. If any Cows decide they do wish to take the small claims route, I’ll be very happy to share my secrets of success, but let me just state for the record, I am not a lawyer, nor do I play one on TV, and any advice I share is purely anecdotal from my own experience and should not be construed in any way as professional and/or legal advice.
Good luck and happy hunting,
DavidDavid Roth Weiss
Director/Editor
David Weiss Productions, Inc.
Los AngelesPOST-PRODUCTION WITHOUT THE USUAL INSANITY ™
A forum host of Creative COW’s Apple Final Cut Pro, Business & Marketing, and Indie Film & Documentary forums.
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17 Replies
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I only go to court when I have to.
lol
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[grinner hester] “I only go to court when I have to.”
Defendants are the only people who ever “have to” go to court. Plaintiffs choose to go to court, each for his/her own reasons, and no one should ever be made to feel badly if they decide to exercise their legal rights.
Sure, there are people who abuse the system, but there are many thousands of people who have no way to collect a debt owed other to file legal claim. Every case should stand upon its own merits, and no one should be made feel guilty because they want what they have rightfully earned.
David Roth Weiss
Director/Editor
David Weiss Productions, Inc.
Los AngelesPOST-PRODUCTION WITHOUT THE USUAL INSANITY ™
A forum host of Creative COW’s Apple Final Cut Pro, Business & Marketing, and Indie Film & Documentary forums.
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I just have to add a few points to this great thread.
The first and most important is that, by NOT suing, you are sending a special kind of message, one that says “walk all over me, I like it.” That message is the collective message our industry has been sending out over the past several decades, and it’s time that we all start walking that back a few notches.
The second point is that ANY client who may frown upon you because you have sued others is a guaranteed grinder. Look at it as though they just saved you a lot of headaches if they walk based on something like this.
The third point is that, in a lot of cases, merely receiving a summons and/or Cease and Desist letter is enough to get them scared and sending cash your way. Either way, I agree with David that small claims is easy (by design) provided that you have your ducks in a row. I don’t entirely agree that you can assume you’ll win without contracts or any documentation, because word-against-word cases are ridiculous. If the defendent was shady enough to rip you off to begin with, you should assume they will be more than happy to lie in court. If you don’t have, at the very least, emails showing they agreed to pay for the work, you probably have a tough case ahead of you.
It’s well worth it no matter how much actual money is on the line. Your reputation, the industry’s reputation and general principals of fair play are ALL on the line whenever someone tries to rip one of us off. Don’t roll over so easily!
Brendan Coots
Splitvision Digital
http://www.splitvisiondigital.com -
[David Roth Weiss] “…and no one should ever be made to feel badly if they decide to exercise their legal rights.”
Only when they haven’t done their mental arithmetic to figure out that they may be one of the people that are costing themselves far more than they will ever make back.
If they are one of those, I would like to mail Bob Zelin to their home or place of business.
They need a severe case of Zelination to bring them to their senses.
Ron Lindeboom
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[Ron Lindeboom] “Only when they haven’t done their mental arithmetic to figure out that they may be one of the people that are costing themselves far more than they will ever make back.”
Call me overly optimistic, but I figure that if a person is smart enough to come to the Creative Cow Business & Marketing Forum seeking advice, they are at least smart enough to know when an a few hours in court will be worth their while. For each of us that may mean something entirely different, but I’d be willing to bet that everyone of us has at least one client we’d sue for just 2-cents, if only to make a point. Ring a bell with anyone???
David Roth Weiss
Director/Editor
David Weiss Productions, Inc.
Los AngelesPOST-PRODUCTION WITHOUT THE USUAL INSANITY ™
A forum host of Creative COW’s Apple Final Cut Pro, Business & Marketing, and Indie Film & Documentary forums.
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[Brendan Coots] “I don’t entirely agree that you can assume you’ll win without contracts or any documentation, because word-against-word cases are ridiculous. “
As I stated in the another earlier thread, in almost every case imaginable, the standard paper trail between ourselves and our clients will almost always clearly establish that we have provided certain goods and/or services, and that attempts to collect on all or part of an invoice has failed. It’s not rocket science…
David Roth Weiss
Director/Editor
David Weiss Productions, Inc.
Los AngelesPOST-PRODUCTION WITHOUT THE USUAL INSANITY ™
A forum host of Creative COW’s Apple Final Cut Pro, Business & Marketing, and Indie Film & Documentary forums.
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[David Roth Weiss] “Call me overly optimistic, but I figure that if a person is smart enough to come to the Creative Cow Business & Marketing Forum seeking advice, they are at least smart enough to know when an a few hours in court will be worth their while.”
Ah, ever the optimist, David. 😉
[David Roth Weiss] “I’d be willing to bet that everyone of us has at least one client we’d sue for just 2-cents, if only to make a point. Ring a bell with anyone???”
Having just finished a nearly-two-year legal battle, me I would not spend a nickel for anything of a legal nature that didn’t make me money.
Yes, I have a company we once worked with that I would like to sue into oblivion, but having had to spend nearly $150,000 to protect the COW trademark, I have had my fill of judges and lawyers.
Final score? Lawyers, 10 – Client, 0 — even though we won the case.
Ron Lindeboom
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[Ron Lindeboom] “I have had my fill of judges and lawyers. “
Completely and udderly understandable Ron… At least in small claims you get to dispense with the lawyers. I’ll tell ya, I’d take a dozen judges over a single lawyer any day.
Oh, and BTW, I’ll take two dozen lawyers over an agent any day…
All the best,
DavidDavid Roth Weiss
Director/Editor
David Weiss Productions, Inc.
Los AngelesPOST-PRODUCTION WITHOUT THE USUAL INSANITY ™
A forum host of Creative COW’s Apple Final Cut Pro, Business & Marketing, and Indie Film & Documentary forums.
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[David Roth Weiss] “There are clearly many Cows who for one reason or another seem to despise using our legal system to pursue bad debts…”
My objection DOES NOT cover the use of Small Claims Court for those instances where it makes perfect sense — in those cases where enough money is owed that the cost to pursue it is less than the money that you will likely recoup.
Where I DO object, Your Honor, is that some people look at Small Claims Court as an emotional arm to hammer the offender when that which they stand to recoup in no way even begins to cover the REAL costs of pursuing it.
As I said, when it makes sense, go for it. When it is not going to break even, why do it? There are few times in life wherein that kind of emotional motivation — that ignores the probability of a profitable outcome — makes business sense.
Business is about profit, not revenge.
So, if it will make you money, use it. If it won’t, find something else to do.
Ron Lindeboom
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I’ll stipulate to that, counselor:-)
My only Small Claims experience was generally a positive one.
One thing I would caution folks about: though they don’t use lawyers, the court and officials are not going to hold your hand thru the process or train you in paralegal. It is very much like traffic court. You are going to have to get some how-to books or read internet archives to learn all the procedural nuances and paperwork, such as it is. No clerk or bailiff or judge will make time to handle that stuff for you. The court has to work as fast as possible, so if you are unprepared, you’re out, next case. And the rules vary by state so invest in a good, specific guidebook.
We won our case: simple enough to prove there was consideration, we proved we delivered a product as agreed, and that he had begun making payments but then stopped. And that he went behind our backs to get more dubs to sell without telling us how many (the dub house tipped us off since he’d paid for the “secret” dubs with a bounced check) and not giving us our agreed cut of the secret dub sales. We proved he’d been served and that it was his choice to not show up to court. ( I think he thought he could get continuances without an excuse as to why, and wait us out). We had the paper trail. We had cancelled checks, purchase orders, registered mail delivery receipts and notarized notices. We didn’t have to offer anything on faith alone, we had facts, which is all a judge goes on, and nothing his side could argue could be proved as anything but lies or opinions. From oathtaking to gavel, I think it took all of twelve minutes to run the whole case and get a verdict. Leading up to that took several days of gathering paperwork and researching the bank, and a month or two waiting on an opening in the trial calendar. All the way up to court day, every three days or so we sent the guy a notice, saying we’d drop the case if he gave us ANY cash flow, as little as ten bucks a week.
The judge ordered the sheriff to authorize papers we took to the defendant’s bank. The papers authorized us to garnish any money this guy had in any account in that bank, up to the amount of the judges’ award, plus court costs. It had been up to us to do the detective work to FIND the accounts or at least his bank. Likely we missed some accounts at other banks we couldn’t find; they don’t give you subpoena powers or search warrants or anything. So we went with the bank from which he’d already paid us and the dub house.
This was for a couple grand, Memory is fuzzy now but it may have been for between fifteen hundred and as much as three grand… and while the bank came up a little short of all we were due, by a few hundred, we let that go as not worth the additional effort/time. Court costs for our paperwork (back in the 80’s) were around a hundred out of pocket to file papers and hire a guy to serve the summons. Frankly, if it had been for less than a grand, I don’t think we’d have bothered, but we (my biz partner and I) were both unemployed at the time and still young kids living at home with our parents, full of youthful anger and insolence, and thus we had plenty of free time and energy to devote to the case.
Same night we pulled his accounts, the scumbag who had been dodging our calls and registered mail for weeks, and who never showed up to court, calls to say he can’t make rent or eat because we’d tapped him dry. I pointed out he still owed us some more, and that the sheriff could come over to his apartment and auction off his new, very expensive Advent coffee table projector TV at a loss for the rest of the balance.( that was an idle threat, though technically true at the time, if there were no cash assets to be found in the bank) And that he could have avoided all this by talking to us and paying as little as ten dollars a week.
It wasn’t very Christian, but we did get a rush of righteous revenge on a bad dude. He had a rich daddy to fall back on, so his pain was mostly in his pride. We got our money and it was enough to hold us over until we got jobs and moved on.
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