Consider: Your Liabilities
Before going to court, take a close look at your contract. If it contains an arbitration or mediation clause, skipping it could be cause for the judge to throw out your claim entirely.
“Whether it’s a $5,000 or a $25 million matter, you need to know what your downside is,” says D.S. Berenson, managing partner of Berenson LLP, and a Remodeling columnist. “The vast majority of contractors are using contracts that are illegal, unenforceable, or ineffective in some way. Always do a preventive defensive review with your attorney, and know that even if John Smith clearly owes you $10,000 for windows, if your contract isn’t enforceable, you’re not going to get that money in court.”
Papageorge’s contract did have an arbitration clause, and he also had some liability due to a change in the type of shingle used for the project, which deviated from the contract. The judge did not throw out the case and actually found Papageorge’s favor, but also ordered him and his client to go to arbitration before the client had to pay.
“The cost for arbitration was over $1,000 and would have taken another three to four months,” he says. “Working with my lawyer was another fee, and I knew I had some liability. In the end, we won but it wasn’t worth it to collect.”
Consider: Your Time & Preparation
If small claims court is your best bet, the process is easy. Most courts require a simple form and a small fee (usually $50 or less). Having subpoenas served on witnesses is an additional fee. Small costs can add up, but on the bright side, you won’t rack up legal fees, since representation is not necessary in small claims court, and in some states is prohibited.
Berenson says his firm likes to take the small-claims route when possible particularly because representation isn’t necessary. “If the dispute is over a small amount, you don’t want to pay gobs of money toward litigation,” he says.
But also consider the cost of your time. Most states have adopted a “People’s Court” model in which plaintiffs and defendants face the judge, present their cases, and hear the judge’s decision then and there. The process doesn’t take long—Berenson says a courtroom could move through five or 10 cases an hour— but plan to lose at least one day of work waiting at the courthouse for your case to be heard.
To keep the process moving smoothly, have all your paperwork neatly prepared and ready to present. Papageorge brought copies of the following documents to court, and says the judge asked for most of them:
- State Home Improvement Act
- Signed contract
- Scope of work
- Photos of the completed project
- Project permit
- Certificate of compliance
- Trade license
Berenson adds that contractors need to bring a good attitude to court and leave the theatrics at home. “It may sound simplistic, but the most important thing is your conduct,” he says. “Wear a suit and tie, and have an officer of the company—not a salesperson—who speaks proper English representing your company. Judges are used to seeing uncategorized documents, so have your paperwork ordered, nice and neat, and don’t overwhelm the judge with more information than he or she asks for.”
