While we do not typically represent clients in small claims court, we often refer potential clients there if we are unable to help them. The information below is intended for information purposes only. Following any of the steps on this page is not intended to constitute representation of you in your claim, and by suggesting small claims court as an avenue for a legal dispute, we do not make any claims or representations about the advisability of such a claim or whether any potential claim has merit.
Requirements for Small Claims Court in North Carolina
North Carolina Small Claims Court, as a branch of the North Carolina Court System, is intended and structured to allow citizens to address legal disputes in a formal setting, but in an expedited fashion and without the need for legal counsel. The rules governing Small Claims Court arise under North Carolina General Statutes Chapter 7A, Sections 210 through 232. The basic requirements for small claims court are: an amount in dispute of not greater than $5,000. Moreover, the only claims that can be heard in Small Claims Court are those involving the collection of money, the recovery of personal property, or landlord/tenant summary ejectment (eviction) proceedings. Lawyers, as you might imagine, can tend to muddy things up, and so are optional in small claims court.
As a plaintiff, to bring the claim, you must be at least 18 years old and competent. The defendant in a small claims action must be sued in the county where the defendant lives or, if it is a North Carolina business or a corporation, in the county where either it has its principal office or where its registered agent is located.
How do I File a Small Claims Case?
Provided you are eligible (see above), then you need to research who and where the defendant is:
- If the defendant is a person – find a good address where the sheriff or the post office can deliver the small claims summons and complaint.
- If the defendant is a business or corporation -You need to research the actual legal name and location of the corporation or business. You can research this by going to the corporations search page on the North Carolina Secretary of State. If the company is a separate “legal” entity (such as a Corporation, LLC, or Limited Partnership, or is an out-of-state version of one of these that is operating in North Carolina), its name should be here. The key information is the name of the “registered agent” and “registered office” for the business. This agent and office address is the person to whom the small claims papers must be served. Note that it is NOT the defendant, but rather the defendant’s legal “agent” that is obligated to accept all service of legal paperwork on behalf of the business. If the office or agent is different county location for the office or agent is different that your own county (for example, you’re in Durham but the company’s agent or office is based in Raleigh, which is Wake County), then you must file your small claim lawsuit in that county.
If the name of the defendant company isn’t with the Secretary of State’s website, then try checking the Register of Deeds to see if an “assumed name certificate” has been filed by the company. Any business operating in the county must file one of these certificates if the business is being run using a trade name or by a partnership, and is not a corporation, LLC, or limited partnership. Some counties have these certificates available online, but you will have to check your individual county Register of Deeds Office.
As a last ditch effort, if none of these permit you to find the correct person or entity, you can try suing the business at its local business address.
The next step after identifying the proper defendant and address is to fill out your complaint form:
Magistrate Summons – Give one of these to each defendant
Fill out these forms, take them to the Clerk of Superior Court in the county where your case will be filed, and bring the appropriate filing fees, plus $15.00 for each defendant to be served with the Summons and Complaint by the County Sheriff. Call the Clerk’s Office ahead of time to find out the applicable filing fees for small claims court, as they change from time to time. Ask the clerk which forms of payment are accepted. If you cannot afford to pay for the filing fees then you may be able to file as an indigent by filling out this form: Petition to Sue as an Indigent.
Upon filing the papers, the Clerk will check your work, fill in the remainder that is needed, and will assign you a court date at that time. The court date will be within 30 days of the filing date, so be prepared!
Trial of Small Claims Cases
When you have filed the lawsuit, the sheriff will serve your summons and complaint on the defendants. The defendants may contact you to try and settle the matter, which is up to you. If you have a lawyer representing you, the defendants must talk to your lawyer. The defendants may also file a written answer to your complaint, but this is not required.
Prepare your case for trial! In order to have the best chance of winning, get your evidence together, which is anything you think helps prove you are entitled to win (receipts, letters, bills, reports, witnesses, etc.) Witnesses have to be present on the day of hearing to testify. Written statements by them do not count.
The judge in small claims court is civil magistrate, and the trial usually takes place in a very informal setting. Arrive on time or early on the day of court. If you cannot make it to court on the court date, you have to contact the magistrate for a continuance. If you don’t show up, and have not spoken to anyone, then your case will be dismissed. If the defendant doesn’t show up, you stand a big chance of winning by ‘default’ if the defendant was properly served.
Presenting your case at a small claims trial is a very informal process. You will get every opportunity to talk and present evidence, so just tell your story in a normal fashion. The magistrate knows you are not an experienced lawyer and will allow you to get your side of the story across without pressure. Be familiar with your complaint, evidence and witnesses. Take notes on the points you want to make or outline your case to reference during the hearing. Like any court you will give your testimony under oath (or affirmation). After (or purhaps during) your testimony, you should be prepared to answer questions from the magistrate and the defendant. You will be allowed to testify and to present the testimony of all of your witnesses before you rest your case. Following this, if the defendant appears, the defendant can present its case and you have the same right to ask them questions during ‘cross examination’.
Following the presentation of all of the evidence, the magistrate will probably make a decision right then about who won or lost. If the issues are complicated, the magistrate may sit on it for a day or so and make a ruling later, but in any event within ten days of the hearing. The ruling will either be for you, in whole or in part, and the magistrate will order the defendant to pay you damages and court costs, or for the defendant, in which case your complaint is dismissed. If you are trying to recover personal property, then the order could force the defendant to return the property to you. The magistrate should answer any questions you have about the order if you are unclear about it in any way, so be sure to speak up.
I Won! So….How Do I Collect?
First, if you won and have to use this section, Congratulations! You have successfully enforced your legal rights in court, which is something to be proud of. Once the magistrate has made a ruling, either side can appeal the judgment to District Court within 10 days of the date the judgment is entered by the magistrate by filling out an appeals form.
The appealing party must file certain costs for the appeal (again, check with the Clerk for this fee). The appeal is ‘de novo’ meaning the District Court Judge hears everything fresh in a new trial proceeding, and is not bound by the magistrate’s ruling. District Courts follow the Rules of Civil Procedure, are presided over by a judge, and are generally much more formal. If you find yourself caught up in an appeal, it is a good idea to talk to a lawyer for help.
Of course, if the judgment is not appealed within the time allowed, then the magistrate’s ruling is final. This is only the beginning of the collection process, however, as many defendants are not going to simply open their checkbooks and write a check (although some might). The collection process can be frustrating with a defendant who is not inclined to pay a judgment or is not able to pay. However, the court system has set up a procedure to collect judgments. If the defendant does happen to pay, then simply notify the Clerk of Court that the ‘judgment has been satisfied’, and he or she will mark in the official docket that the judgment was paid. If the defendant does not pay, then you have to “execute” the judgment. Execution means that, in certain circumstances, the county sheriff can literally go to the defendant’s property and seize non-exempt property (such as a ouse or car) to pay your judgment. A sobering thought, especially if you are on the receiving end of a judgment execution.
Judgments can only be executed after the 10 day appeals process has expired. After that, you must send the defendant a Notice of Right to Have Exemptions Designated and a Motion to Claim Exempt Property.
Send these forms the same way as the Complaint, by sending them to the sheriff for service along with a check for $15.00. The defendant has 20 days after service of the forms to fill them out and return them to the Court Clerk, with a copy to you. If they do not fill them out, then the defendant’s property is fair game for execution. If it is a corporation, LLC, or other legal entity that is the defendant, then it does not get to exempt any property, and you can simply execute on the judgment, and these forms are not needed.
Exemption of property can be a little confusing. North Carolina law permits individual defendants (not a corporation, LLC, etc), to designate certain of their property as “exempt from judgment”. The laws relating to exemption of property are too great to go into here, but generally, if a defendant files an exemption form you think looks incorrect, then you can schedule a hearing before a District Court judge to resolve your concerns.
If the exemption form is completed properly, and there is non-exempt property available, OR in a contested exemption when the District Court judge decides that non-exempt property is available, then the Clerk issues an execution order for the sheriff to execute against the defendant. The Clerks’ offices are generally very helpful in this regard. While they cannot answer any legal questions, they are very knowledgeable about the procedures involved in judgments and execution, and will usually be happy to answer any questions you have. Execution and service fees are added to the total judgment, so any additional fees you pay are taxed to the defendant.
If the sheriff collects money after the execution, he will pay it over to the Clerk of Court and you will be told to come get it. If the sheriff’s execution is not successful, he will let the Court know this and you will be told by the Court. Judgments are good for 10 years, so if at first you don’t succeed, try again! Judgments can be transferred to other counties if the defendant moves or you discover property in another county, and the judgment incurs interest at a rate of 8% per year (not bad, and much better than the stock market these days).
We hope this information has been helpful, and if you find yourself involved in a small claims case to defend your legal rights, consumer or otherwise, good luck!
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