Discussion:Small Claims Court

I had an attorney as a client and she just refuses to pay her past due bill. She was inherited with the business and my predecessor said she had an outstanding balance owed to him, but he just never collected it. I have only billed for the amounts she owes me and the total due is about $650.

In the past I;ve written off these kind of things because it wasn't worth my time or aggravation, but this one is kind of a principle deal. She is a total PITA and I want her to pay up.

BUT - know that she knows how to play the game. You may end up expending more emotional funds on this than it's worth.

I do have a letter from her complaining about her bills and the fact that she got her stuff late <because she gets me her stuff late and I don't jump through hoops for someone who doesn't pay> and she was worried about possible penalties for that.

So, I have written documentation from her that I have done the work I have billed her for.

Should be good enough I hope.

I'd say just move on with your life and let this be a lesson to accept credit cards if people don't bring their checkbook. In 21 years of practice, I've only had 3 bad checks (that didn't go through the 2nd time), have never had a VISA chargeback, but got stiffed many times when I let the client walk out with the work without paying. Lesson: Don't let them walk out without a check or credit card. They'll figure out how to pay you if you hold the work. File an extension and let it become their problem - not yours.

I do accept credit cards and also have rarely been stiffed by a client. I mean, I may get stiffed for a $75 W-2 return once every other year or so. But nothing major.

Some information from the NY State Guide to small claims court, [1]

"HOW DO I START A SMALL CLAIMS CASE? ... You must sue in a court having Small Claims Court in an area where the defendant lives or works or has a place of business. "

"WHO CAN USE THE SMALL CLAIMS COURT?

Anyone over 18 years of age can bring an action in Small Claims Court. If you are younger than 18, your parents or guardian may file the claim for you. Corporations, partnerships, associations, or assignees cannot sue in Small Claims Court, but they can be sued. "

I would get your town court to clarify the corporations, partnerships, asociations, etc. prohibition if it applies to your business entity because it seems to be contradicted by the phrasing under "What is the small claims court" section of the same document.

Check with the crimnal courts as well, you may be able to file a civil AND a crimnal case agaisnt the attorney for 'theft of service", depending on the amount it may be a felony. Check the statutes.

Many references on the board regaring filing a 1099-C as well, but I digress.

TexCPA 14:47, 26 October 2009 (CDT)

Generally, you always file in the defendant's county. It's usually required, and that's where your lien will get recorded if you win (of course, you can pay to have your judgment lien recorded elsewhere in the state too). It comes in handy to have that lien (Fi.Fa.) recorded where she has a home, or an office.

You called her a "business". You might want to pay a local lawyer to advise you on the wording, but assuming she's a sole practitioner and no other entity, it will be X d/b/a X, Attorney at Law. Check to see how she signed your engagement letter if you have one. Ideally, you want the judgment to be a personal judgement (i.e. you want to be able to sue her individually, and a dba is individually). Sometimes the ideal is not possible.

It might also be instructive to go to the deed room of her county and ask to see the books where the judgment liens are recorded (indexes). These are sometimes referred to as the "General Execution Docket" (GED). See how many people you might be standing behind even if you win. The indexes are usually kept on a yearly basis, by alaphabet. Either that, or it's all computerized.

P.S. Don't be surprised if you get a counterclaim, usually it's just a bargaining chip, but don't be surprised.

She is a sole practitioner, a dba. So, the county drives it, not the town or village? Because she lives and works in the same county my office is, that makes it easier.

I need to hit DMV this week anyhow, so I might as well check the county records as well.

Thanks again.

I don't know about NY. Some states give a higher status to cities.

And I wouldn't do criminal, not really worth my effort for $600.

And, it would go nowhere in a criminal court, they wouldn't even let you file a complaint. "Civil Matter. Next!"

Naw, busy or not, file the Bar complaint. If nothing else, it will show the erstwhile client that you aren't going to just forget about it. And yes, you can file the Bar complaint and the civil complaint.

Also in Michigan there is a 6 year statute of limitations for non payment but only a 2 year statute for malpractice. If the same in your area, keep sending a statement every 3 or 4 months (with additional late fees added on), wait until 2 years is up so they can't counter sue, then take them to small claims.

The same thought NMexEA had regarding pursuit of a disciplinary complaint had occured to me. I went to the NY state bar association website and read the code of conduct. It does state an obligations to adhere to the law in their general conduct. Among the readings I did were at least one which implied the use of disciplinary actions or threats thereof as a tactic between civil litigants is frowned upon by the disiplinary authorities. It seems to me that a disciplinary complaint should not be your first step, but might be useful in enforcing any judgement or court order. She is, after all, an officer of the court.

One of the things I picked up from the Guide link I posted earlier is that the loser in small claims court has the right to appeal, at which point, a lawyer may be required to further represent your interests, but she can represent herself.

Personally, I would make further written attempts to collect from her. When you say late, is it late in that she wanted it for April 15, and got it by all allowable extentions. I presume that your bill and the completed taxes were delivered together. Since this is an inherited client, do you have a written engagement letter, or contract? If so what if anything does it say re: the timing of your work. No written agreement might even work in your favor.

If you are determined to persue a small claims action review:

§ 703. Notice of error and response. If a creditor, having transmitted

 to  a  consumer a statement of the consumer's account, receives from the
 consumer at an address designated therefor by the creditor in accordance
 with section seven hundred five of this article, within  sixty  days  of
 the  mailing  of  said  statement, a written notice, on a document other
 than a document provided by the creditor to accompany  payment,  setting
 forth  sufficient  information  to  enable  the creditor to identify the
 consumer and the account,  the  amount  and  transaction  shown  in  the
 statement  which  the  consumer  in  good faith believes to be a billing
 error, and the facts providing the basis for the consumer's belief  that
 the statement is in error; the creditor shall:
   1.  Not  later  than  thirty  days after receipt of the notice, mail a
 written acknowledgment to the consumer; and
   2. Not later than ninety days after receipt of the notice and prior to
 taking any action to collect the amount believed by the consumer to be a
 billing error, (a) make appropriate corrections in the  account  of  the
 consumer  and  mail  to  the  consumer a written notice stating that the
 amount believed to be in error has been corrected and will be  shown  on
 the  next  statement mailed to the consumer or (b) send a written notice
 to the consumer setting forth the reasons why the creditor believes  the
 account of the consumer was correctly shown in the statement; and
   3.  Not  communicate  unfavorable  credit  information  concerning the
 consumer to any person, including but not limited to credit  bureaus  or
 credit  reporting agencies, based upon the consumer's failure to pay the
 amount believed by him to be a billing error,  until  the  creditor  has
 complied with this section.

from: http://public.leginfo.state.ny.us/menugetf.cgi

This is merely collection advice, not advice about pursuing a legal claim. Having read only your summary of her email to you, it seems to fulfill all of the requirements applicable to a consumer notice to you about a "billing error" except, it probably doesn't set for the apecific "amount" your client believes were billed in error. So ask her to clarify.

Dan 16:14, 26 October 2009 (CDT)

I have letters from her acknowledging the bill and am not really worried about malpractice.

Seems like the calculation regarding potential penalties should be relatively easy to compute, based on the established policies of both taxing authorities. Do the math. Make an offer to settle the bill by said amount contingent on payment in full of the remaining balance in the next two weeks. Point out that you accept credit card payments. If that doesn't result in payment ask her to either acknowledge the debt and provide reasonable assurance of her payment or provide sufficient notice as described above as to the disputed amount, and the reasons therefore. Again, this is collections advice from someone who has dealt with recalcitrant payers, not advice on how to pursue your claim.

Small town and a small claims attempt/victory would be sufficient, even if she doesn't pay. Hey, if she wins, no great loss other than my time. It's kind of like the principle of it at this point. If she has to spend a few hours sitting in small claims court, well, she can't be working and if she doesn't show, I win automatically.

If she's smart, she'll not even wait for court, but instead call you as soon as she gets the papers, and settle the matter with you. If she's beyond embarassment, she may play a game or two before you win anyway.

...and if you're like me, you'll get a neat letter you can keep to show friends from "The People's Court" asking if you'd like to take your case on the show!

jerry