A statute of limitations is the time limit within which a lawsuit must be filed. The limitations period will depend upon the type of case to be filed. If you fail to file your case within the date allowed by the statute then your case will be barred (prevented from suing on claim) by these statutes . Plaintiffs in lawsuits want to make sure their cases are filed in a timely manner. Defendants on the other hand may have a legal defense to a lawsuit if the statute of limitations has run out.
Statute of Limitations: California
The Statute of Limitations periods for various types of actions can be found in the Code of Civil Procedure (CCP) sections 312- 366.
In small claims cases the following are some of the more frequently used statutes:
Personal Injury: Two years from the date of injury or if injury is not immediately discovered, two years from the date it is discovered. CCP 340
Oral Contracts : Two years from the date the contract is breached (broken) CCP 339
Written Contracts: Four years from the date the contract is breached (broken) CCP 337
Remember many things may qualify as a writing.
Damage to Personal Property or Real Property: Three years from the date of the damage. The statute is ten years if the property damage results from latent deficiencies in Planning or Construction of Improvements to Real Property. CCP 337.15
Lawsuits Against Public Entity: Before a lawsuit can be brought against a city, county or state agency or governmental body, you must first file a claim with that agency on their claim form. No small claim can be filed before this is done. The time period for filing the initial claim with the appropriate administrative agency is six months if claim for personal injury and
Lawsuits Involving Domestic Violence: Damages suffered as a result of domestic violence must be commenced within three years from date of last act of domestic violence or within three years from date plaintiff discovers or reasonably should have discovered that an injury or illness resulted from an act of domestic violence.
HOW TO DETERMINE THE DATE THE STATUTE STARTS
After you determine which statute applies to your case , apply that statute as follows:
(a) For personal injury cases the statute starts to run from the date of the injury.
(b) For property damages the statute starts to run from the date of the property
damage.
c For both oral and written contracts the statute starts to run from the date the party you are suing failed to perform according to the terms of the agreement.
1. In the case of installment contracts each installment must be treated as a separate promise to pay. Therefore the statute does not start until that promise to pay has been breached. Each installment must be breached before you will have a right to sue. Each installment will have it own separate statute of limitations
Example: You enter into a written installment contract for $600.00. Written contracts have a four year statute of limitations from the date of the breach Three installments are to be made starting October 1, 2004 for $200.00 January 1 2005 for $200.00 and March 1, 2005 for $200.00 If payment is not made on October 1, 2004 then the statute starts on that date. If the second installment is not paid then the statute starts to run on January 1, 2005, and March payment statute starts on March 1, 2005.
Exceptions to the General Statute Rules for Contracts Cases: If the debtor is a minor, is in prison or insane at the time the creditor has the right to sue, then the statute is suspended until the particular event cease to exist. The statute starts to run again when the event is over.
Defendants should raise statute of limitations as a defense.
The process of collecting on a claim can only commence after certain events in the small claims procedure. The first requisite is that you must have a judgment from the court. The second is the judgment must be final and not subject to any appeal or stay by the court. Once these requites are met a winning party/creditor may seek to collect the judgment from the losing party/debtor.
PLEASE UNDERSTAND THAT THE COURT WILL NOT COLLECT YOUR
JUDGMENT FOR YOU. THE COURT WILL GIVE YOU THE POWER AND
AUTHORITY TO COLLECT AND ENFORCE YOUR JUDGMENT.
If the court judgment awarded you possession of property ask the judgment debtor to return the property to you or seek the assistance of law enforcement to enforce your order for the return of the property. Failure on the part of a debtor to return the property could result in further action being taken by the court such as a contempt of court citation.
Collection of Money Judgment:
Collection of Small Claims judgments can only be commenced after the judgment becomes final. The judgment does not become final until 30 days after the court has mailed its = decision to the parties, and the defendant has failed to file an appeal within that 30 days. If no appeal is filed the winning party may seek collection of the judgment. The losing party is required by law to file a form called Judgment debtor = s Statement of Assets. This form should give you a good indication of what property the debtor has. If the debtor fails to fill out this form or refuses then it is best to wait until the judgment becomes final before you contact the debtor about your money. PLEASE NOTE THAT IF THE JUDGMENT IS APPEALED YOU CAN DO NOTHING TOWARD THE COLLECTION OF YOUR MONEY.
One of the first things you can do after the judgment becomes final is to send the debtor a letter reminding them of your judgment. Give the debtor a time deadline to respond to you in hope of working out some satisfactory arrangement for payment. Remember if the debtor is willing to pay the debt but does not want to communicate directly with you, arrangements can be made to pay the judgment to the court (See form SMC-145).
The debtor may also request of the court to pay the judgment in installments. In such a case you may oppose this request but the court will determine whether to grant such a request.
(See form SC-106). If the court grants the debtor the right to pay the judgment in installments and later the debtor fails to make a payment as agreed then wait thirty days after the payment was due and if no payment is received then file a Declaration Re: Default in Payments
(See form SMC-116)
If there is no response to your request for payment then you start your collection process.
DETERMINE WHAT ASSETS THE DEBTOR HAS
Your first step toward successful collection is to identify the assets of the debtor. This can be done a number of ways. You might have a check from the debtor or know a bank account. You might know that the debtor is buying their home or owns some property which might be subject to levy.
But often you do not know much about the assets of the debtor. In these cases you will need to employ an investigator to do a assets check.. You could file an Order of Examination (See form SMC-134). This procedure requires the debtor to appear back in court and disclose their assets and bring a Statement of Assets to the hearing. The court sets the hearing date and it is best to get the Sheriff or a Certified Process Server to serve the Order to Appear for Examination. Failure on the part of the Debtor to Appear for this hearing will result in a warrant being issued for the person Ordered to Appear. At the hearing you are permitted to ask the debtor or the Ordered person questions related to the debtors assets. The debtor is also required to bring to court a Statement of Assets which is a form issued by the courts to assist the creditors in collecting their judgments.(See SC-133)
DETERMINE BEST WAY TO GET PAID ON JUDGMENT
a. Levy against the Debtors wages (See SC- )
b. Levy against the Bank accounts of Debtor (Checking, Savings, Money Markets)
c. Levy against Real property assets of Debtor
d. Levy against an On Going Business (Till Tap, Keeper)
e. Levy against a vehicle owned by Debtor
f. Levy against Personal Property of Debtor (Boat, Plane, RV)
h Levy on Obligations Owed to Debtor by Third Parties
i. Have Driver license suspended (Auto Accident cases See DMV special rules)
The above methods are the most common ways to collect judgments in small claims. There are other methods of collection but for small claims purposes the ones listed are the most effective and cost efficient means of getting paid on our judgment.
THINGS YOU NEED TO DO TO GET PAID
1. Obtain a Abstract of Judgment to place a lien against Real Property
2. Set a Debtors Examination if you know nothing about the Debtors assets.
3. Obtain a Writ of Execution to levy against the personal property of Debtor.
4. Hire a levying officer (Sheriff or registered Process Server) to carry out your instructions for collecting your judgment.
5. Be prepared to pay the cost of having the levying officer follow your instructions for collection.
Liens
After you have conducted a Debtors Examination, Investigation of Debtor Assets and determined which asset you are going after you must then equip yourself with the right court documents to obtain the money. Sometimes it is not possible to collect money right away therefore you should attempt to place a lien against some property assets of the Debtor until your judgment can be turned into money. A lien is a legal claim against certain property of the debtor for a specific amount. In most cases the lien does not give you the right to the property but rather makes the property subject to the lien if and when such property is sold.
In the case of Real Estate Liens , a property wherein a lien is recorded cannot pass clear title until all liens are removed or satisfied. Thus a debtor who has had a Real Estate lien recorded against their property will have to satisfy all liens before the property can be sold or refinanced.. If you know or find out that the debtor has Real Property in their name then have an Abstract of Judgment issued by the court and file that Abstract with the County Recorders Office where such property is located. This does not give you immediate money but the lien will remain until the judgment is paid. This Lien can attach to any Real Property that is in the name of the Debtor. NOTE AGAIN: The Abstract must be issued by the court that gave you the Judgment. You must file the Abstract in the County where the Property is located.
Personal Property Liens are also ways to get paid on your Judgment. Remember most small claims judgments are money judgments. In order to lien personal property there is a process which you must follow to have such property converted to money at a lien sale. The process involves identifying tangible property of the debtor, determine whether such property is owned by debtor or subject to another party = s lien or is exempt by law.
If you are seeking to lien personal property make sure the property has value , and there are no other liens against the property. Be prepared to incur the cost necessary to seize the property, store the property before it is sold..
Levies
A levy is accomplished when a authorized person (generally a law enforcement officer or a registered process server) takes action pursuant to a Writ of Execution to obtain property or cash belonging to a judgment Debtor to satisfy a judgment. In most places the sheriff, marshal or constable is the responsible levying officer. Often times private persons who are registered process servers can perform these duties.
The levying officer must have a Writ of Execution issued by the court to obtain property from the Debtor. The officer acts upon specific instructions given to them by the judgment creditor. Writs are issued one per county. A Writ is good for a period of 180 days from the date of issuance.
Levying on Wages: If the Debtor is employed then a Wage Garnishment can be an effective means of collection. Along with the Writ of Execution, and an Application for Earnings Withholding Order, give instructions to the levying officer to serve the debtors employer. The Levying officer will prepare a Earning Withholding Order and serve the employer. The employer is required to complete a Employers Return within 15 days. The employer must also indicate whether the debtor is still employed , the rate of pay and payment periods and verify or incorrect information about the employee/debtor. Failure on the part of the employer to send this information to the levying officer can result in certain penalties against the employer including criminal prosecution for non compliance. If the employer objects to the Wage Garnishment attempt to resolve these objections. If the employee objects by way of Debtors Claim of Exemption follow the instructions for filing your opposition to this Exemption Claim.
Levying against a Bank Account: You can have a Bank levy done by obtaining a Writ of Execution and giving instructions to have the levy served at the branch where the Debtor has their account. The account must be in the same name as you have a judgment. The Bank will not levy the account if the account name is not the same as the judgment debtor. You will need the account number. The Debtor may file a Claim of Exemption to you levy. If this happens follow the instructions for seeking a hearing on this matter. You can levy joint accounts which have Debtors name on them.
Levying against a On Going Business : (Till Tap, Placement of Keeper) When you have a
judgment against a owner of a business , a company or corporation then you can levy against the cash/checks the business has on hand. This is called a till tap where the levying officer will seize what property is on hand at the business. If you want the officer to remain at the business and collect all the receipts received over a period of hours then this is called Placement of a Keeper. It is important when filing your claim that you properly name the Defendant owner DBA, company and corporation. The judgment must be in the name of the owner or business you attempt to enforce your judgment against. Simply obtain a Writ of Execution and give instructions to the levying officer where Debtors property can be found .
Levying against the vehicle of the Debtor: This method of levy will only be worth the time and effort if the vehicle is free of lienholders and the vehicle exceeds the cost of seizure, storage sale and the amount of your judgment. Check with the levying officer about the cost involved with this levy. Also keep in mind that under certain circumstances the Debtor can make a Claim of Exemption for certain amount of the vehicle and also if the vehicle is used for work or business purposes. Again you will need a Writ of Execution and instructions to the levying officer.
Levying against Obligations Owed to Debtor: If the Debtor is owed money by a third person then you may be able to intercept this money before it is paid to the Debtor. This normally take some investigation to determine who owes money to Debtor and when it is to be paid to Debtor. If you are not certain if the third person has or might have money for the Debtor then you should set a Third Party Debtors Hearing to determine if money is held by third party.
Once this determination is made a Writ of Execution with instruction will start this process.
An example of this kind of levy is when you levy against the rental receipts of Debtor and have the tenant pay the rents to the levying officer.
Have the Driver' s License of Debtor Suspended: The law gives DMV the power to suspend the driving privileges of a Debtor who has failed to satisfy a judgment under certain conditions.
If the judgment is for property damage in excess of $500.00 or for bodily injury to or death of any person and resulted from the operation of a motor vehicle on a California highway by the Debtors for which Debtor was liable then DMV can take this action. Under certain circumstances the suspension can be terminated if certain things occur. See CCP 116. 870 and CCP116.880
COLLECTION OF COST AND INTEREST AFTER JUDGMENT
Cost that you incur in the collection of your judgment can be added to your judgment . To have these cost added to your judgment you must file a Memorandum of Cost After Judgment, Acknowledgment of Credit, Declaration of Accrued Interest CCP 685.070 . Cost that may be recoverable are clerk = s filing fees for obtaining a Writ of Execution, Abstract of Judgment, fees charged for Debtor = s Examination, fees charged by the levying officer, fees charged for issuance of bench warrant, any fees charged to record your judgment and fees charged by the court to file a motion after the judgment has been entered.. You may not recover for your time spent in the collection of your judgment. All cost must be approved by the court before you can add those amounts to your judgment. You must give the Debtor credit for any amounts paid on the judgment in the Memorandum.
You are entitled to claim interest at the legal rate of 10% per year on the unpaid balance of your judgment. Interest will depend upon the amount of the judgment, and the amount of time the judgment is unpaid. It is best to use 360 days per year to calculate interest. Obtain a daily rate of interest for your judgment and multiply the number of days times the daily rate and enter this amount on Memorandum in appropriate space.
Interest Example:
Judgment debt : $1000.00
Date Judgment was entered: January 15, 2004
Current Date of Calculation of Interest: Oct 10, 2004
Interest on $1000.00 at 10% rate = $100.00 per yr.
$100.00 divided by 360 days = .25 per day
.25 per day times 269 days = $67.25 int.
Guide to Collection of Cost:
Cost
Filing Fee
Service of Process
Statutory Witness Fee
Expert Witness Fee
Surveys, Charts Maps
Investigation
Recoverable
Yes
Yes
Yes
No
No
No
Notes
Fee is recoverable up to
allowed fee to public officer
court may in discretion on party' s application allow actual cost incurred.
Unless Court Appoint Expert
Unless Court Ordered
LANDLORD TENANT CASES: Small claims cases in this area generally involve seeking the return of security deposits by a Tenant or Landlord suing for rent or damages to property.
Tenant Case Notes: The landlord has 21 days after you move out to give you written notice of how your deposit will be returned or withheld .A deposit can be returned either partial or full refund. No interest is due for holding deposit and deposit cannot be used in lieu of payment of rent. If damages are being claimed by landlord an itemized list of those damages should be given to tenant. Take pictures when you move out so there is no dispute about the condition you left in property in. The rule is that the property must be in the same condition as move in. If you do not feel the landlord = s claim for damages is valid or reasonable you can sue landlord for the amount you feel should be returned to you. Willful failure on the part of the landlord to give you notice 21 days after you move out can result in a penalty being imposed on landlord. See CCP 116.
Landlord Case Notes: Make sure you keep accurate records of all rents and deposits. Do not allow tenant to use deposit for rent unless both parties agree to this. Give any notices to tenant in writing avoid verbal agreements. If verbal agreements have been made make sure you follow landlord -tenant law. Always document damages claimed with photos. Take photos of the property before tenant moves in and after moves out. You can sue for rent and damages in the same suit but claim cannot exceed small claims limit. Don = t try to charge tenant for normal wear and tear. There are published schedules for normal wear and tear.
Tenant Help Forms:
SEE HELP FORM LT #1
Landlord Help Forms:
SEE HELP FORM LT#2
BAD CHECK CASES: Suits can be brought in small claims court for non-sufficient funds checks and stop payment checks
Bad Check Case Notes If someone has given you a check which you have made every effort to be paid on then you must give notice to the writer that unless prompt payment is made within the next 30 days then you will seek treble damages (three times the amount of check in a small claims action.) The law requires you give the writer of the check notice via certified mail that the check and bank fees must be paid by way of certified funds or you will have the right to sue for three times the amount of the check. You have four (4) years to sue on a bad check.
Bad Check Help Forms:
SEE HELP FORM BC #1
STOP PAYMENT CHECK CASES: If someone has written you a check and for some reason has ordered a stop payment of that check then you may be able to sue them in small claims court.
Stop payment cases operate a little different than bad check cases in that there may be a dispute about whether the money is owed by the writer to the payee of the check.
CONTRACT CASES: If you entered into a oral or written agreement with someone then this is governed by contract principles of law. The parties to the contract have rights and obligations .
Contract Case Notes: Someone agrees to perform services and someone agrees to pay for those services. If either party fails to do what was agreed then file a Breach of Contract action in small claims court. Damages in small claims breach of contract actions are limited to the amount of the contract . You cannot sue for pain and suffering or damages beyond the scope of the agreement. If you are relying on a oral agreement make sure you can prove what the agreement was. If the agreement is in writing then make sure you can prove non performance by the other party and the terms of the agreement.
Giving Notice of Lawsuit/Service of Process
At the time you file your claim you will be given a court date, time, and place of the hearing.
You must notify the other side of this information. This is what is referred to as service.
A Proof of Service form must be filed and filed with the court at least the hearing date.
The other party must receive notice of the hearing at least 15 days before the hearing date.
The 15 days is actual days not court days.
Notice is given by way of three different methods.
1. COURT CERTIFIED MAIL: The court can send notice by certified mail: You must pay the court a fee and the court will address your claim to a specific person(defendant) and that person and that person only must sign the return receipt which is sent back to the court. If the person rejects the letter or someone other than that person signs the receipt then the service is not effective. If the letter is rejected or not delivered it comes back to the court and you must find alternative means for service of the claim. This method is only about 50% effective.
2. PERSONAL SERVICE: Someone over 18 years old other than a plaintiff or a defendant in the action delivers the claim to the other party. In most cases you need to hire a process server who can be found in the yellow pages under process servers. The person who delivers the claim to the other party is responsible for filling out the Proof of Service. You as a party to the lawsuit are responsible for making sure the Proof of Service is filed with the court at least five days before the hearing.
3. SUBSTITUTED SERVICE: Service of the claim upon the other party may be accomplished by either two methods : (1) If defendant is a corporation or other entity, copies of the summons and complaint may be personally served on a person who is apparently in charge of defendant = s office, with copies thereafter mailed to the defendant at the address where the copies were left.
(2) If defendant is an individual, copies of the summons and complaint may be left at defendant = s
usual place of abode( where person lives) or business in the presence of a competent person (dwelling house) or person who is apparently in charge (business) with copies thereafter mailed to the defendant at the address where the copies were left.
Substituted Service is deemed complete
* On the date of personal service
* On the date that the defendant signs the mail return receipt:
* As established by other competent evidence (such as personal knowledge of service)
* On the tenth day after mailing, of the copies in the case of substituted service methods
NON RESIDENT DEFENDANTS: In all cases of service in small claims cases service must be made within the State except for service of a complaint relating to real property in California on the owner of property who resides in another state and has no lawfully designated agent in the State for service of process.
When a small claims plaintiff has a claim against a nonresident motorist the claim may be served on the non resident motorist if they can be found within the state or the complaint may
be served on the Director of Motor Vehicles in Sacramento and pay a fee. The Code of Civil Procedure 116.340 also authorizes service by registered mail.
When a small claims plaintiff has a claim against an out of state corporation you must serve the corporation within the state pursuant to CCP 416.10 (wherein the corporation has a designated agent for service of process) or the Secretary of State may be used in certain situations such as when the foreign corporation = s designated agent for service of process cannot be found with due diligence, when no agent has been authorized or agent is no longer authorized to act.
Filing a Counter Claim (Defendants Claim)
This form should be used by a Defendant who believes he/she has a claim against the plaintiff.
The Defendants claim need not be about the same case is which the plaintiff sued for.
1. In the plaintiff = s space provide the name, address and telephone of the plaintiff who originally sued defendant. This information in this space should be the same as that inserted on the plaintiffs claim. The information can be obtained from the complaint which was served on the Defendant. which was served on the defendant.
2.The defendant must state their name address and phone number in the space entitled Defendant .
3.. In the space provided in Paragraph1 state the amount you are suing for $ .
4.Give a brief description of your case against the plaintiff
Example of descriptions:
Breach of Contract, (oral or written)
Failed to return deposit
5. You should make a demand on Plaintiff to pay your claim if this has been done mark the box stating a demand has been made. If no demand has been made mark the box stating I have not asked plaintiff for this money and state the reasons why.
6. State whether you have or have not filed more than one small claim anywhere in California during the current calendar year (January-December).
7. You must state whether any plaintiff is currently in the military service. If no plaintiff is in the military leave this space blank.
8.Date , print your name and sign your name to the claim form before you submit for filing.
PLEASE NOTE YOU CANNOT ADD PARTIES TO THE CLAIM YOU CAN ONLY SUE THOSE PLAINTIFFS WHO ARE PARTIES IN THE CLAIM AGAINST YOU