CASWELL BELL & HILLISON LLP
FRESNO, CALIFORNIA

SMALL CLAIMS UPDATE

Claim Amount Increased from $5,000 to $7,500

Starting in 2006, California Legislature raised the jurisdiction of small claims court to $7,500.  (The original claim limit, in 1921, was $50.)  This means that more cases can be tried in small claims court.

Of course, this being California, nothing is as simple as it seems. So there are multiple rules governing how much you can sue for in small claims court:

• An individual can sue for up to $7,500.
• A corporation can sue for up to $5,000.
• If you sue more that two times in a calendar year in small claims, you are limited to $2,500.

Unfortunately, the legislature did not raise a similar jurisdictional limit at the same time.  California’s Superior Court recognizes two kinds of cases:  limited civil and unlimited civil.  As the name suggests, a judge or jury in unlimited civil can award any amount of damages, subject to proof by the injured party.

In contrast, the jurisdictional limit for limited civil court is only $25,000.  Which means that a judge or jury in limited civil cannot award damages (not including attorneys’ fees, costs, interest) in excess of $25,000.

The trade-off is that the discovery procedures are radically reduced in limited civil cases.  Each party may take only one deposition, and written discovery (interrogatories, and request for production of documents) is limited to 35 requests total.  In contrast, unlimited civil has no such limitations on the number of depositions or the amount of written discovery.

As a practical matter, attorneys and experienced litigants know that it is not cost-effective to try a case where the damages are in the range of $25,000 to $50,000, where the costs of discovery can often eat up any recovery.

More Changes are Needed

It is important to our legal system that litigants be able to obtain judicial relief without unnecessary cost and expense.  Both small claims court and limited civil court provide these forums to injured parties in California.

The legislature should increase the ceiling on damages in limited civil court from $25,000 to $50,000.  This is a significant issue:  Because of the cost of trial, many cases are forced to compromise.

The legislature should raise the jurisdiction in limited civil to $50,000.  That way, cases with smaller amounts of damages could be tried in a cost-effective way.

Always Use a Written Summary in Court

Consider how you will present your case in court.  This writer always recommends that his clients prepare a one or two-page summary of the case.  You should attach copies of the important documents to the summary as exhibits.

At the start of your presentation, hand a copy of your summary to the judge.  The summary is important, for the following reasons:

●  It forces you to think about what is important, and what is not.

●  It forces you to figure out a concise and coherent way to present your case.

●  It gives you something to fall back on if you get tongue-tied in court.

●  It helps the judge understand your case better.  Studies show that many persons learn more when they can read a text summary during an oral presentation.

●  Finally, when you present your case, you may forget something.  The summary gives the judge a change to ask you about it.

Must Be Able to Serve the Defendant Within the State of California

An action cannot be prosecuted in small claims court if the defendant cannot be served in the state of California.  This does not mean that the defendant needs to reside in California: if the defendant is present in the state, he or she can be served.  But if the defendant resides out of state, and does not travel to California, then an injured party cannot invoke the jurisdiction of small claims court.

Similarly, small claims court does not work well when the defendant is hiding, or does not have a known address.  If you will need to take extra actions to locate a defendant, or if you do not have a mailing address, you may as well sue in limited civil, so as to invoke the Superior Court’s broad powers to effect service on a defendant.

Multiple Lawsuits are Not Permitted

Also be careful to avoid “splitting a cause of action.”  This rule means that an injured party must seek relief for a single wrong in one lawsuit.  If the defendant committed a single wrong (for example, breach of contract), the plaintiff must seek all damages for that wrong in the same cause of action.

Sometimes, litigants think they can recover a portion of their damages in one small claim action, and the balance of their damages for the same wrong in a second small claims action against the same defendant.  This is not permissible, and can certainly be a trap for the unwary.

© Caswell Bell & Hillison LLP          Attorneys and Lawyers, Fresno, California