“Small” Claim Doesn’t Mean an Unimportant Claim

Many business owners have likely heard of small claims court, but are thankfully unfamiliar with it.  I say “thankfully” because the usual way a business owner experiences small claims court is over an outstanding account receivable, or because a disgruntled customer or employee has a grievance (possibly of a dubious nature).  However, if a company finds itself in small claims—for whatever reason—it should know how the process works and how to achieve the best possible outcome.

What Matters Can Be Heard In Small Claims?

Small claims court is for matters involving a dispute over money or property worth $5,000.00 or less, regardless of costs, interest, and any attorney’s fees that may be owed.  If you need to enforce a non-compete agreement, or if a disgruntled customer is giving you terrible Yelp reviews and trying to ruin your reputation online, those matters can’t be heard in small claims.  But, if you have multiple outstanding invoices that total less than $5,000.00, they can all be heard in one small claims case.  A plaintiff or a defendant can request a jury trial.

What Is The Process For Bringing A “Small” Claim?

A statement of “small” claim is filed and served on the defendant; plaintiffs can use a form from the Florida Small Claims Rules, or they can draft their own complaints.  The defendant is not required to respond to the statement.  When the complaint is served on the defendant, he will also be served with a summons and notice to appear, which provides a date for the pretrial conference.

The pretrial conference occurs at the courthouse and is a time for the parties to come before the judge and briefly explain their sides of the dispute.  The pretrial conference is required to occur within 50 days of filing the claim.  If you are the plaintiff, it can help to have filed a detailed complaint rather than a basic statement of claim, so the judge can have a working idea of your claims.  Similarly, though Defendants are not required to file a response or answer to the statement of claim, it can be helpful so that you can lay out your defenses, or tell the judge why the complaint should be dismissed.  If either party to the suit is a business, then someone with the authority to settle the claim must appear at the pretrial conference.

In an effort to help settle the case, the judge will ask if the claim is disputed and, if it isn’t, will try to facilitate a resolution.  If the claim is disputed, the parties are given the option to immediately mediate their dispute with a court-provided mediator, free of charge.  If the parties choose not to mediate, they are given a trial date.  If the Plaintiff does not appear at the pretrial conference, the case will be dismissed; if the defendant does not appear, a default judgment will be entered against him or her.

Considerations And Issues To Be Aware Of

While small claims are quite obviously “small”, that does not mean they are insignificant, and it can be worth pursuing small claims, especially if, for example, you are trying to collect on invoices that provide for an award of attorney’s fees and costs if you have to initiate legal proceedings to collect on them.  A creditor’s chances of receiving payment on an outstanding $4,000.00 invoice greatly increase if it has a judgment for the amount owed, rather than just an unpaid invoice; if the costs of obtaining the judgment can be included in it, then pursuing the claim through the court becomes even more appealing.

Additionally, if you are a defendant in small claims court in a case brought pro se by a disgruntled customer or former employee, there is usually some chance that the claim against you is without merit.  The claims against you may not even constitute a valid claim under Florida law, or one that is appropriate for small claims court.  It is a good idea to consult an attorney and have representation to defend a small claim, as the attorney can identify problems with the case against you that merit dismissal of the case.

In small claims, if the opposing party is not represented by an attorney and you are, then you cannot initiate discovery against that party unless they serve you with discovery first, or you obtain permission from the court.  This is beneficial because parties will not necessarily have to engage in the discovery process, which can be time consuming and costly.  This also helps the matter progress to trial more quickly.

If you are defendant receiving a small claims complaint, you should consider whether there are any counterclaims you can assert against the plaintiff.  Additionally, if there are available counterclaims, you should consider if their value potentially exceeds the small claims threshold of $5,000.00.  If they do, the case will be transferred out of small claims and into the appropriate court, county or circuit.  This can also be a valuable strategic tool, especially if the other party is trying to avoid the cost of hiring an attorney.  Small claims court is easier for an unrepresented party to navigate than county or circuit court is, so the transfer may force the other side to either hire an attorney, or drop the claim.

Additionally, the Florida Small Claims Rules specifically provide for a more relaxed trial procedure.  The trial may be conducted informally, but the parties are expected to conduct themselves with the same decorum as they would in a circuit or county court case. The rules of evidence will apply, but they’re liberally construed, meaning the judge will give the parties some leeway in their presentation of evidence. At the discretion of the court, parties can have witnesses testify via telephone. Additionally, and also with the court’s approval, an attorney can appear at the trial via telephone as well.

Conclusion

In conclusion, just because claim is “small” does not mean that it should be taken any less seriously, or not vigorously pursued or defended.