Wednesday, March 18, 2009

30-Day Economic Stability Challenge: Having your day in (small claims) court

I couldn't say this any better, so I'll just let freelancer Lorelei Laird speak for herself. Laird is a freelance writer specializing in writing about the law for businesses, marketing and publications.

Unfortunately, some clients just don’t want to honor their commitments. After you’ve tried Kristine Hansen’s collections suggestions with no luck and you’re pretty sure the client has no intention of paying, it may be time for small claims court. Heather asked me to write this post because I had good luck when I filed a small claims case of my own, and perhaps also because I am a freelancer who specializes in writing about legal issues. However, please note that I’m not a lawyer myself and none of this is intended as legal advice!

Luckily, you don’t need a lawyer for small claims court, because it’s specifically designed for people representing themselves. (In fact, here in California, you’re not allowed to have a lawyer in small claims.) The courts usually provide information to help people without much legal experience figure out what to do. I strongly recommend that you follow that advice -- I actually prolonged my own case by not bothering to read their advice on finding the defendant (the person being sued).

The following tips are based on my own experience in Los Angeles Superior Court, but I’ve tried to keep them general enough to apply to any case.

What Do I Need to Sue?
For starters, the amount you need to collect must be less than the maximum for your state -- $7,500 in California. You will also need:
  • Proof that the client owes you money. Your contract should be enough proof, but if you don’t have a contract, don’t worry -- you should still be able to collect if you have other evidence that an agreement between you and the client exists.
  • All of the written documentation of any kind -- including email. Print it out or make photocopies. This is the evidence for your case.
To generate more evidence, consider sending a certified letter demanding your money, so you can show that they definitely received the demand and failed to pay up.

Filing fees are typically low -- I think I paid $25. If you’re not doing well financially, you may be able to get the fee waived.

If you, like me, are not very detail-oriented, suck it up and become detail-oriented for this. It’s very important to follow all the rules when you’re dealing with courts, because one little mistake can get your case dismissed. You’re welcome to re-file, but it’s more time and money that you probably don’t want to spend. So make sure you meet deadlines, use the right legal name for the business, choose the right court, etc. The small claims documentation and any legal advisors the court offers should be able to help you with this.

Where Do I Sue?
If your contract doesn’t specify where disputes will be heard, check with your local court. Los Angeles Superior Court says the right place to sue is the place where the defendant’s business is, or the place where the contract is signed or carried out. I had to go to a courthouse across town because the client was in LA, but in a different part of LA from me.

If your client is out of state, I’m sorry to say that you may be stuck suing there, depending on your state’s rules and the circumstances. If your contract locks you into out-of-state courts, but that contract was clearly violated, you might be able to argue that the whole thing is now void. If you have lots of time, it might be worth filing at home just to see if you can argue that that venue is proper -- but it might be an uphill battle. And if you have to go out of state, you can try to file from a distance and see if they settle before you make plans to fly there.

How Do I Sue?
In short: You go to the courthouse to get the small claims forms, fill them out, attach any relevant documents, and file the forms. In downtown Los Angeles, this involved a lot of waiting in line, sometimes with crazy people. Don’t park at a meter if you can help it and bring a book! Once you’re filed, they’ll give you a court date.

By the way, I strongly recommend that you add the cost of your time and the case itself to your claim. That is, if they owe you $1,000, sue them for $1,000 plus:
  • Court fee;
  • Any process server fees (see below); and
  • Your hourly rate for the time it took you to do all this.
You would never have incurred any of these costs if they had just honored their commitment to you, right?

But that’s the first half. Once everything is filed -- correctly -- you still have to serve the small claims documents on the person you’re suing. The deadline for this in California is 15 to 30 days before your court date, depending on where the defendant is. To serve the claim in California, you can pay a professional process server or a sheriff to do it; pay the clerk of the court to do it by certified mail; or ask a friend who’s not involved in the case and over 18 to do it for free. I used my boyfriend, who, miraculously, did not break up with me over the multiple late-night trips across town.

Tracking down the defendant so we could serve them was by far the most arduous part of my case (well, after parking downtown). The business had closed and the owners had moved across town. Finally, I thought to read the advice in the small claims documents and looked up the owners in county property records. There they were! Use your reporter skills to do public records searches -- business filings, property records, prior court cases. This will help you locate the defendant and learn the proper legal name of the business. And it made me feel like Nancy Drew.

Going to Court
Good news: You may not even have to go to court! In my case, the defendant paid up as soon as we managed to serve it. That’s typical for large-claims lawsuits as well, the vast majority of which settle before trial. However, if you do go to court, take it seriously. Show up on time, dress appropriately (think job interview or religious services), bring all of your documentation and turn off your phone -- judges hate being interrupted by phone calls. Expect to wait a long time for your turn, at least here in LA. When it’s your turn, treat the judge and other court employees respectfully and answer everything you’re asked. You’re welcome to bring someone for moral support, but that person can’t speak for you.

If the other side doesn’t show up, that’s great for you -- the judge may penalize them by deciding for you. I am told that small claims judges are very accustomed to seeing freelancers suing their ex-clients, especially in New York City, home of many freelancers. So if your case is solid, your chances are fairly good.

For More Help
Here in California, we have a Small Claims Advisors program providing advice to people with small claims cases. The number for Los Angeles County is (213) 974-9759, and in San Francisco, it’s (415) 292-2124. New York City seems to have a similar in-person program. Of course, you can also draw on a friend or relative who’s a lawyer for general advice and scary demand letters on law firm letterhead.

Above all, please do not feel guilty about this. If you are legally owed this money and the client has repeatedly refused to pay you, you are not abusing the system or being unkind -- you are enforcing your rights.

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