Small Claims Courts

Small claims courts, designed to provide a fast,
efficient and inexpensive way to resolve claims of individuals against
merchants or large corporations, are potentially a great resource to
consumers. They are one of the best ways for consumers to settle
disputes with a dealer, service station, repair shop, garage, or auto
manufacturer.

Small claims court is just what it sounds like–a forum for
claims not large enough to warrant a full-scale trial, yet worthy of
argument before a judge. Virtually every state has small claims courts,
each generally having county-wide jurisdiction. Claims limits typically
range from $1,000-$7,500, which means that this is not the appropriate
court to seek a buyback or replacement of a lemon, or if you are
seeking considerable damages and expenses. If you win a buyback through
arbitration, however, you are free to file for reimbursement of
incidental expenses such as towing, lodging or rental cars through
small claims court, since these claims are not subject to arbitration
and will usually be under the claims limit.

A major advantage to
small claims court is that they are so simple you don’t have to hire a
lawyer to represent you; in fact, some courts do not permit lawyers.
Even if the auto maker brings in high-priced lawyers to fight your
claim, do not be intimidated or discouraged. Smallclaims court is meant
to provide an informal, simple method of justice where consumers can
easily explain their problem and the remedy they seek. The judge may
help present the case by asking appropriate questions. Formal courtroom
procedures and the use of legal rule are usually ignored, providing an
informal atmosphere in which consumers making claims can more easily
talk out their problems before the judge.

Information and other
resources are available for the consumer to use in preparing to go to
small claims court. A few courts and many consumer groups and agencies
publish guides or consumer manuals on using small claims courts, with
emphasis on the local procedures involved. Even though a lawyer is
usually not necessary in a small claims court suit, some legal
assistance or advice may be helpful. Free legal help may be obtained
from law students who participate in a legal clinic, such as the Law
Students in Court Program in Washington DC. Call the nearest law school
to find out whether there is such a program in your area. Often, legal
assistance is available from neighborhood legal service organizations
or legal aid societies which are set up to help low-income or minority
groups. Where legal assistance is necessary, some courts will provide
indigent consumers with a lawyer at the consumer’s request.

PROCEDURES

FILING A COMPLAINT

Small
claims courts are located in county or other local courthouses in your
state. The plaintiff (person who is suing) usually must file suit in
the area or district where the defendant (person being sued) lives,
works or has his or her place of business; for example, where the
dealership or repair shop is located.

The small claims court in your area will be listed in the
telephone book under Courts for either your city or county government,
or there may be a general information number for Courts.

After
finding the court in your area, ask to speak to the clerk of the small
claims court. Tell the clerk that you wish to file a complaint. Ask the
clerk whether the court can handle your kind of case and whether it has
jurisdiction over the party (or parties) you wish to sue. As a general
rule, the defendant must live, work or do business in the court’s
territory. Since automobile manufacturers do business in all areas of
the country, they can be sued in just about every small claims court.
Thus, choose the court in an area where the dealership is located when
suing the dealer and manufacturer.

The clerk can assist in
filling out the necessary form. The basic and perhaps only form you
need to fill out is the complaint. Many small claims courts will have a
sample, filled out, complaint available. The complaint includes your
name and address, the names and addresses of the person whom you are
suing, the amount of your claim and the reason for your suit.

The
amount of your claim should include the cost of repair in the case of a
defect or accident and the overcharge in the case of a fraudulent or
incomplete repair, as well as any consequential damages arising out of
the problem. For example, suppose a repair shop charged you $200 for a
tune-up which it didn’t do. In the meantime you had to rent a car for
$75 and then you paid another mechanic to perform the tune-up for $250,
then you should sue for $275 ($200 to get back what you paid for no
tune- up and $75 for the rental car while it was in the first shop; do
not ask for the $250 because that is what you are paying the honest
mechanic for the tune-up actually performed. If fraud is involved, you
may be entitled to triple damages.

Be certain the business name
of the organization you are suing (which you write on the complaint) is
the official legal title. John’s GM Shop may not be enough; it may be
legally registered as John Brown’s General Motors Showroom, Inc. Some
courts will dismiss the suit unless the company is identified in the
complaint exactly as it is registered for legal purposes. Ask the court
clerk whether the exact legal name is required, and, if so, how to find
the correct name. This information can usually be checked with the city
or county clerk, or the secretary of state. See if the dealership or
repair shop has an operating license posted on an office wall with the
legal name on it. Auto companies are required to have an agent for
service of process which may be the Secretary of State in which you
live if they do not name an agent. Most auto companies use CT
Corporation Systems for their agent for service of process.

Some
states such as New York have a bad restriction on small claims court
jurisdiction – – i.e., a business can only be sued in a county in which
it has a physical place of business. To get around this, a consumer
could sue a dealer which has a place of business in the county and the
manufacturer. Or the consumer could sue in regular civil court where
the long arm statute of service on out of state corporation applies.

When
you fill out the complaint, be precise. State exactly what part of the
engine, for example, was defective or malfunctioned. Attach a copy of
any repair bill to the complaint as well as any Technical Service
Bulletin that covers the problem which was repaired. This will
encourage an auto company to settle the case. The clerk will give you a
summons to be completed with the complaint. A summons is the official
notification of the case delivered to the party you are suing, which
will be sent to the defendant after you have filed your complaint.

After
you fill out the forms, you will pay a small filing fee which usually
will be returned if you win since the losing party pays it. The clerk
will then give you a copy of the forms and usually a “docket number”
(identifying the case) and a date for the hearing of your case. The
hearing date is usually scheduled for 2-8 weeks from the date of
filing. Some courts notify plaintiffs by mail telling them whether the
defendant was served with the summons. If the defendant cannot be
located, you are responsible for finding the address where they can be
served.

PREPARING YOUR CASE

Try to attend a session of the
court to learn the procedure so you will know what to expect and how to
prepare for your own hearing. At least come to court early on the
hearing date and observe the cases that come up before yours, in order
to become more at ease with the procedure.

In small claims court, a consumer can do a good job by going
before the judge and telling the story of his or her complaint from the
beginning. To do this easily, write down the history of your complaint.
Arrange the events in the order they occurred, checking the dates. Pull
together all the documents related to your claim, such as written
estimates, repair orders and canceled checks. Also bring physical
evidence (broken or defective parts) if possible.

Where possible,
get written statements or affidavits that support your complaint. one
example is a statement in writing from a car mechanic describing what
is wrong with the car and why it would be considered a defect as
opposed to normal wear and tear. If the mechanic is willing, have it
notarized by a notary public. This evidence lends credibility to your
case. Another piece of helpful evidence would be a report from a
diagnostic inspection center in the form of a computer printout or
checklist, listing what is wrong with the vehicle. If your case
involves a manufacturing or design defect, obtain a search of technical service bulletins (TSBs), or consumer complaints
similar to yours from the National Highway Traffic Safety
Administration to help build your case. Although the court may admit
these as a federal record, try to obtain a copy of any TSB from a local
dealer. You may order them from NHTSA’s Technical Information
Service,at 202-366-2768 after you identify them on its Website. Be
advised that NHTSA may take a few weeks to provide documents.

The
vast majority of small claims suits are decided without witnesses. If
you do bring witnesses, make arrangements with them prior to the
hearing. It is best to get a witness to testify at the hearing on a
voluntary basis rather than by court order. If the witness is not
willing to come to the hearing, ask the witness to make a written
statement or affidavit indicating his or her knowledge of the case.

In
the rare case where success depends upon a witness actually appearing
in court, and the witness will not come voluntarily, check with the
court clerk to see if the small claims court has subpoena power
(ability to order a witness to appear in court). For example, a
mechanic at the dealership who repaired the car admitted that the
failure of a part was due to a manufacturing defect. Since the dealer
will not let the mechanic appear at the hearing, a subpoena is the only
way to get the mechanic in court to tell the story. There is a
beneficial side-effect of a subpoena issued in such a case; not only
will you win if the mechanic testifies, but the dealer loses a mechanic
for the day. Confronted with such a situation, the dealer may very well
offer to settle out of court after the subpoena arrives.

SETTLEMENT

Many
small claims suits are settled out of court before they can come to
trial. once a dealer, garage or manufacturer sees that a consumer means
business by going to small claims court or beyond, he or she frequently
agrees to meet the consumer’s demands. You can even settle in the
courtroom on the day of the hearing before court actually begins. Some
courts have clerks, other assistants or even judges available to
expedite this settlement process before trial.

If you want to settle, be prepared to bargain. Make sure you
understand all the terms before you settle and get the terms of the
settlement in writing. Do not settle for anything you feel is unfair.
Upon settlement, file a copy signed by both parties with the court so
that the settlement can be enforced by law. If the court allows,
arrange to appear in court to clarify with the judge the settlement
terms. Try to negotiate reimbursement of court costs as part of the
settlement.

THE HEARING

If there is no settlement, you will
have your day in court. Most small claims courts call the roll of cases
and parties at the beginning before taking each case in order. If a
party is late or does not appear, the case can be decided immediately
in favor of the party who is present, so be on time.

When the clerk calls your case, the judge will ask each party
to tell his or her side of the story. In the course of presenting your
case, give the court copies of any written evidence you have. If you
have any witnesses, call them before the judge and ask them to tell
what they know. The judge will not expect you to have any legal
knowledge; he or she will merely ask you to state the facts as clearly
and concisely as you can. The judge will ask questions to clarify
anything that was not clearly presented. The other party will then be
given an opportunity to present his or her side. Many small claims
courts have cross examination of witnesses only, not the parties. The
following suggestions will help you present your case at the hearing:

  1. Rehearse your presentation before going to court. If
    you know your case well, you should be able to present the facts easily
    and with confidence.
  2. Provide the court and the auto
    manufacturer’s representative with a copy of each repair order (with
    canceled check attached) as you describe each repair attempt to the
    judge. Label each submission with corresponding exhibit letters (A,B,C,
    etc.) so they can be easily referenced.
  3. Bring copies of
    supporting documentation of defects or problems with your car,
    including recalls, service bulletins, studies, articles, fact sheets,
    and similar consumer complaints to present to the judge and the
    opposing party. Label each with exhibit letters as well.
  4. Be
    as organized as possible. Have a summary listing of each breakdown or
    repair, together with the relevant date and mileage indicated in each
    entry. Repair information should include the garage’s diagnosis, the
    repair work actually done, the repair order number, and the amount you
    paid for each repair.
  5. When asked questions during the
    hearing, take a moment to think about how to respond, especially if the
    other party is questioning you. They may try to phrase their questions
    so that the only reply you can give will sound damaging. Rephrase the
    question to expose this tactic and respond accordingly.

The
judge may give a decision at the hearing, or notify the parties of the
decision by mail. If you lose, you may have the right to appeal; if you
win, the defendant may be able to appeal. Check with the clerk about
the appeal procedure.

ARBITRATION

Some court systems
provide for arbitration instead of or in addition to small claims
courts. Both are very similar, with the main difference being that in
arbitration, one goes before an arbitrator rather than a judge

The concept of resolving consumer complaints outside of the
courtroom is becoming more and more popular across the country. The
superior court of Santa Clara County in California has court-ordered
arbitration. Three hundred and fifty lawyers arbitrate cases in their
respective areas of expertise. The program, run according to the rules
of the California Arbitration Practice Guide, has been operating since
1982 at no cost to the consumer. Many other counties in California have
adopted programs similar to this one.

COLLECTING THE JUDGMENT

Unfortunately,
some consumers who win in small claims court do not always collect the
full amount of the award. Some defendants refuse to pay or simply do
not have sufficient funds to pay. The court is not responsible for the
actual collection of judgments but it can help enforce the judgment. In
most auto cases, the winning consumer has little difficulty in
collecting since the losing party is frequently a multi-billion dollar
auto company or well-to-do auto dealer that can scarcely plead lack of
funds to pay the judgment.

At the hearing, ask the judge to order the entire amount to be
paid at one time in a single payment. If notification is by mail,
contact the defendant and ask for the money. If the defendant does not
pay within a reasonable time (2-3 weeks), go back to the small claims
court clerk. Fill out the necessary forms, and the clerk will tell you
how to get a sheriff or marshall to collect the money owed by the
defendant. The cost of a sheriff or marshall can be added to your
judgment. File with the clerk a list of all the costs accumulated in
trying to collect the judgment.

If the sheriff or marshal cannot
collect the money owed to you, ask the court clerk for information
about what to do next. If an oral examination of the defendant is
possible, request a hearing before a judge to decide what action can be
taken to make the defendant pay the judgment. At the hearing, you can
find out >whether or not the defendant actually has the money to pay
you. If he or she does have the money, request an attachment on the
defendant’s wages, money in a bank account, or other property until you
have collected >your money. The clerk can again help you fill out
the necessary forms.

SUING WITHOUT A LAWYER

Even where
nearby small claims courts do exist, some consumers have chosen to file
suit in a higher court because the jurisdictional amount (limit on the
amount you can recover in a given court) is too low in small claims
court. In order to avoid legal fees, some consumers have pursued the
case on their own, without hiring a lawyer. Others did so because they
couldn’t find a lawyer willing to take on an auto manufacturer.

One example is Toby Cagan who took Chrysler Corporation to
court and won–without a lawyer–over her defective Dodge Aspen. She
had complained over and over again about her “lemon” to Chrysler
dealers and to the manufacturer, but Chrysler treated her complaints
callously–responding with form letters and rude, reluctant service.

Before
Cagan signed for her Aspen, she took a test-drive and found many
problems with the car, including difficult steering, sticky windows and
doors, stalling and dents. When she complained to the salesperson, he
told her that, “It’s a new car and these problems have to work
themselves out.” Trusting the salesperson at his word, Cagan drove away
in her new Dodge. When the car developed more problems within a week,
she took the car back to the dealer. For the next several months, Cagan
tried to get six different Chrysler dealerships to repair her car, but
still without satisfaction. She sent letters and made telephone calls
to Chrysler. All she received was the run-around. By this time, the
consumer was quite angry. “The car had been defective since the date of
its purchase. After three government recalls, numerous problems and
defects, I was afraid to drive the car,” she said.

So Toby Cagan
filed a lawsuit against Chrysler Corporation in Civil Court, in the
city of Queens, New York. Planning ahead, she saved all the repair
orders to document her “lemon” story, showing how she had brought the
car into numerous Chrysler service departments again and again with no
success. Chrysler simply could not fix her car. As her story unfolded
in the courtroom, the shabby treatment Chrysler gave the consumer was
exposed. She brought in a mechanic to verify the defects in the engine
and drive-train. A body shop owner testified that her car had formed
rust.

Cagan also brought in reports from the Center for Auto
Safety, describing how the Center had written to Chrysler Chairman
Riccardo about the large number of complaints on the Aspens and the
identical Volares. Most of the complaints, which were similar to those
Cagan had experienced, concerned carburetor, brake, driveline and
steering problems. (Chrysler had earlier denied the Center’s charges,
calling the group’s claims “irresponsible.” But within the next six
months, Chrysler had initiated four large recalls for the very same
defects experienced by consumers writing to the Center and Ralph Nader.

Although
Chrysler brought in an expensive New York City lawyer, its only witness
was a zone official who admitted, incredibly, that the car was
defective, as Cagan claimed, but that given enough opportunities
Chrysler could fix all the defects. After hearing Cagan’s witnesses at
the trial, Chrysler gave in and offered to refund the consumer’s
purchase price minus $500 for the 18 months she had owned the car.

Cagan
and other consumers who do not give up easily prove that you don’t
always need a lawyer to take a giant corporation to court and win. But
you do need persistence and planning.