Wednesday, October 01, 2003
by Richard D. Weber, J.D.
MDA Legal Counsel
Published in the October 2003 issue of the Journal
Question: I'm a new dentist and have several delinquent accounts that I want to collect by legal action in small claims court. Since I've never done this before, could you explain the process? Where do I call? What's involved in the process? What are the fees? Do I have to show up in court or can I have my staff go in my place? How do I collect if the judgment is in my favor?
Answer: In Michigan, the small claims courts are an efficient mechanism by which non-attorneys can bring an action to collect small sums of money. Small claims courts have jurisdiction to hear disputes involving amounts not exceeding $3,000. They are informal and tailored to non-attorneys. In fact, attorneys are not even permitted to appear on behalf of small claims litigants. There is no right to a jury in a small claims case. All cases are tried before a judge or attorney magistrate.
Small claims cases may be brought in the district court where the dental service was rendered or where the defendant resides. Once you determine which district court is appropriate, you should communicate with the court clerk. Most clerks are very helpful and will provide you with all of the requisite forms. Alternatively, small claims forms are available online. They can be downloaded and printed at www.courts.michigan.gov. Most forms include filing instructions that are quite helpful. When the complaint is filed, a hearing date will be set. You must serve a copy of the complaint, and file a proof of service with the court. The district court clerk will likely assist you with service for a small fee.
There will also be a filing fee. Contact the district court where you will be filing in order to determine the exact amount. If you receive a judgment in your favor, filing and service fees typically can be included, so don't forget to ask the judge.
Often, the defendant will respond in an effort to settle the dispute out of court. If this is the case, you may voluntarily dismiss your complaint upon receipt of what is owed. Another option is to obtain an enforceable judgment for the settlement amount.
The defendant must answer the complaint and appear in court on the hearing date with his or her evidence. If the defendant does not respond to the complaint, you will be entitled to a default judgment. The defendant also has the right to remove the case out of small claims to the standard docket and obtain an attorney. If this happens, you should consult your attorney for your options.
Both you (the plaintiff) and the defendant are required to appear before the court on the hearing date. If you don't appear, the complaint will likely be dismissed. If the defendant fails to appear, a default judgment may be entered. Take special care to be there on time. If you aren't present when the case is called, the court might not hesitate to rule against you. Since attorneys are not permitted to appear in the small claims cases, you should personally appear at the hearing. If the claim has been brought in the name of a separate entity, such as a professional corporation, a full-time, salaried employee of the entity having authority and knowledge of the facts may appear in your place.
You should bring all the evidence that proves your claim with you to the hearing. This may include dental records, invoices, and other relevant documents. You may also bring witnesses with you to the hearing if necessary. The court will ask you to explain your case and support it with your evidence. The court will also ask the defendant to explain his or her case and support it with evidence. Be sure to pay close attention to the defendant's explanation, perhaps by taking notes, so that you can address any misstatements asserted by the defendant in the courtroom.
A judge's decision in a small claims case is final. Neither party has a right to appeal. Upon petition by either party, however, a judge may reopen the case if necessary. If the case is tried before a magistrate, either party may also appeal the decision. On appeal, the parties will reargue their case before a judge, whose decision will be final.
Collecting the judgment
If you obtain a judgment, the defendant may pay the judgment immediately after the hearing. If the defendant is unable to immediately pay, the court may grant the defendant a reasonable time to pay or even set up a payment schedule.
If the defendant fails to pay the judgment when ordered or defaults in a payment plan, you may garnish the defendant's wages or bank account, or perhaps even have the defendant's property seized.