How to Get Additional Money from Your Small Claims Win
After you win your small claims case, you may become a little greedy and start wondering what else you can get out of the defendant. The good news is that you can receive interest or collect some of the money you spent on getting justice. The bad news is that you can’t collect every penny you spent.
How to collect interest and other additional monies
In addition to receiving money as damages, you may also be awarded costs, disbursements, and interest.
The court may award you the statutory costs incurred including the filing fees, and if the court does the mailing of the summons and complaint, the mailing costs.
You may spend additional monies on your case, on such things as paying expert witnesses, copying records, paying a private process server, and the like. In general, you either won’t be compensated for these expenses and disbursements at all, or if a statute or court rule sets out a right to some reimbursement for them, the amount is probably less than the actual expense.
For instance, the process server may have charged you $100 to serve the defendant, but the statute only allows $20 for such an expense. The court can award one of two types of interest:
Any interest that was supposed to be charged as part of the agreement.
Statutory interest, interest the court awards to you as the winner, is the more common of the two.
In a contract action, statutory interest may be calculated from the date of the breach of the contract, because that’s how long you’ve been denied the use of your money or the product value.
The statutory interest rate may be far in excess of any bank rate.
In some cases, the interest is calculated from the date of judgment, which is the date the small claims court case is decided. This is more common in negligence cases, because in these lawsuits the defendant’s fault isn’t established until the trial.
Expenses that aren’t really damages
Invariably every litigant in small claims court — whether it’s the plaintiff or the defendant or the witnesses — wants to be compensated for the time they have to expend in bringing the case or defending the case.
In American jurisprudence, that is, the American court system, each side incurs the expenses of litigating the case.
No one can recover for his time or inconvenience in bringing or defending a small claims suit. This extends to claims for legal fees and other expenses incurred to bring or defend the lawsuit.
The only exceptions are if
There’s a written contract between the parties which specifically allows the recovery of all such costs and expenses by the prevailing party in litigation.
There’s a statute which permits such recovery.
A common clause in contracts is one that permits the non-breaching party to recover “reasonable” attorney’s fees as well as the costs, disbursements, and expenses incurred in bringing any lawsuit to enforce the terms of the contract. But even in these situations, you most likely would be prohibited from collecting any damages for your lost time.
Some cases and statutes say that only the winner, or prevailing party, can collect legal fees and costs. The prevailing party may not be the one who brings the case to court. This applies even to contracts which, by their terms, give the right only to one side in the agreement.
Residential leases often include a clause that says that if the landlord has to bring a lawsuit to enforce the terms of the lease, the landlord can recover legal fees and expenses. The lease is silent as to what happens if the tenant wins the suit or brings his own suit against the landlord for breach.
In many states, by court decision or statute, this clause applies to both the landlord and the tenant. It becomes a mutual right.
Mitigation of damages
As unfair as it may seem, in some cases you, the plaintiff, must take steps to reduce the damages the defendant may be responsible for. This is called mitigation of damages and occurs primarily in contract situations. The following example helps make this clear:
The defendant signs a two-year lease agreeing to rent an apartment for $1,000 a month. The defendant moves after one year. In theory, you, the plaintiff-landlord, can sit and wait another entire year and then sue the defendant-tenant for breaching the lease. You would sue for the balance of $12,000 due on the lease.
Under the idea of mitigation of damages, the law says that you must take steps to try to re-rent the premises to a new tenant before that year is up and reduce the damages you suffered because of the defendant’s breach.
So if you re-rented the premises for $500 a month, then the defendant would only be responsible for $6,000 — the amount left after the defendant gets credit for the $500 a month paid by the new tenant.
If you re-rented the premises for $1,000 a month or more, the defendant would not have any liability because the plaintiff would have no damages.
If you can’t re-rent the premises, you can sue the defendant for the $12,000 lost rent when the year is up. But you would have to show what steps you took to re-rent the apartment, such as listing it with real estate brokers, advertising in newspapers or online, and so on.
Also you couldn’t advertise the apartment for a monthly rental rate, such as $5,000, that makes it impossible to find a tenant. Likewise, if the tenant says he’s breaking the lease and leaving early but gives you 30 days or some other notice and you re-rent the place the next day without any break in receiving rent, you have no damages.
Of course, any expenses you incur in re-renting the premises, such as advertising, are recoverable as damages.