Litigation is expensive. Between filing fees, process servers, attorney's fees and missed days of work to attend court hearings, any award obtained from a judge or jury can be eaten away to nothing. If the legal claim in question may only amount to a few thousand dollars, then it hardly seems worth going to court at all. How can a plaintiff seek justice and recover smaller judgments in court without paying an arm or a leg to do so?
In every district court in the state, there is a small claims division designed to hear minor civil suits on an informal and accelerated basis. The jurisdiction of the small claims division is confined to cases for the recovery of money in which the amount claimed does not exceed the following:
- Beginning January 1, 2018, $6,000.00. MCL 600.8401(c).
- Beginning January 1, 2021, $6,500.00. MCL 600.8401(d).
- Beginning January 1, 2024, $7,000.00. MCL 600.8401(e).
The small claims division is not permitted to hear actions of fraud, libel, slander, assault, battery, or other intentional torts (except for actions for dishonored checks under MCL 600.2952 or actions under Michigan's Consumer Protection Act). MCL 600.8424(1). In addition, the small claims division may only award money judgments and may NOT issue any decision requiring specific performance (e.g. transferring specific property, recovering possession of premises, etc.).
A plaintiff meeting the jurisdiction requirements may file a claim and affidavit with the district court clerk on pre-approved state court forms. After filing, the clerk will cause a copy of the affidavit to be served on the defendant(s) along with a notice directing the defendant(s) to appear and answer before a magistrate or judge of the small claims division at a particular date and time. This court appearance is the evidentiary hearing where both the plaintiff and defendant must bring any and all books, papers and witnesses to establish any claim or defense.
The filing fees in the small claims division are as follows:
- $25.00 (plus postage for serving claim and affidavit upon each defendant), if the amount in controversy does not exceed $600.00. MCL 600.8420(1)(a).
- $45.00 (plus postage for serving claim and affidavit upon each defendant), if the amount in controversy exceeds $600.00 but does not exceed $1,750.00. MCL 600.8420(1)(b).
- $65.00 (plus postage for serving claim and affidavit upon each defendant), if the amount in controversy exceeds $1,750.00. MCL 600.8420(1)(c).
Small claims court is subject to the following rules:
- "Attorneys (except on the attorney's own behalf), a collection agency or agent or employee of a collection agency, or a person other than the plaintiff and defendant, except as is otherwise provided in this chapter, shall not take part in the filing, prosecution, or defense of litigation in the small claims division." MCL 600.8408(1).
- "The judge shall conduct the trial in an informal manner so as to do substantial justice between the parties according to the rules of substantive law but shall not be bound by the statutory provisions or rules of practice, procedure, pleading, or evidence, except provisions relating to privileged communications, the sole object of such trials is to dispense expeditious justice between the parties." MCL 600.8411(2).
- There shall be no jury nor shall a verbatim record of such proceedings be made." MCL 600.8411(2). A transcript from the hearing will not be available for production.
Before commencement of a trial, the plaintiff or defendant may, upon demand, require that the trial be conducted before a district court judge and not a magistrate, or may remove the case from the small claims division to the general civil division of the district court. MCL 600.8408(4). Once the small claims trial begins, the right to remove is waived. If the small claims hearing was conducted by a district court magistrate, then any party may appeal to the district court judge within 7 days of the decision for a brand new hearing. MCL 600.8427. If the small claims hearing was conducted by the district court judge, then the decision is final and no appeal may be pursued.
The following may be the result of a small claims proceeding:
- If the defendant fails to appear, a default judgment may enter either up to the amount of the claim stated in the affidavit or the jurisdictional amount allowed in small claims proceedings, whichever is less. MCL 600.8404(1)(c). If the plaintiff fails to appear, the lawsuit will be dismissed.
- If settlement of the dispute is made before or at the hearing, the defendant may be charged with costs incurred by the plaintiff in initiating the action. MCL 600.8404(1)(d).
- Even if the defendant has no legal defense to the claim, he or she may appear to request an installment payment plan for the judgment. MCL 600.8410(2).
A small claims proceeding may be the solution to your legal problem. However, if the defendant chooses to elevate your claim to the general civil division of the district court, then your lawsuit may be subject to a jury trial and application of all rules of evidence. Once your claim is removed from the small claims division, you can hire an experienced lawyer to help pursue your judgment. If you have questions about your civil matter or require legal representation, then do not hesitate to contact the attorneys at Kershaw, Vititoe & Jedinak PLC for assistance today.