Taking Your Car Accident Insurance Claims to Small Claims Court

Taking an Injury Case To Small Claims Court

Know Your Rights in small claims insurance cases

By Michael P. Ehline, Esq. – Okay, so many of you are probably asking: “why is a car accident lawyer telling me to send my bodily injury insurance claim to small claims court?” First of all, that is not what I am saying. But if you live in California, and are tired of Farmers, GEICO, State Farm, and Mercury, etc, of treating your soft tissue case like it is worthless, or “worth less”, than what you or your attorney thinks he or she get you, you should definitely consider this option.

Using the avenue of small claims court, allows you settle insurance disputes legally and typically gives you a lot of leverage to get the greedy insurance company to pay more and settle before the case is tried to the judge.

And like anything else in life, when you are prepared, you will have a much better chance of attaining the results you desire. In this article, we will cover basic preparation, the leverage advantages and the disadvantages of handing a low impact, soft tissue insurance claim as a small claims action, instead of regular court, or setting for whatever the offer is.

Advantage 1: Small Claims Court Sets up the Unreasonable Insurance Company For a Bad Faith Lawsuit Against Them

One of the main advantages in filing a small claims action for a soft tissue case, is leverage. The defendant gets no attorney, and neither do you, the plaintiff. It inconveniences the defendant, since now he or she has to take time to litigate their case, instead of their paid insurance defense attorneys. Insurance companies have a duty to settle claims for a reasonable amount. What we have been seeing, is that they really try and settle for MUCH less that these cases are worth. They know that us personal injury attorneys will then be forced to file a lawsuit (about $500.00), do written discovery (10-25 hours), take depositions ($1000.00 plus driving, travel, etc.), then be under pressure to settle for just enough to get the original amount and cover costs. Then you still have to reimburse the attorney their costs and pay them their fee of a third to forty percent.

Their attitude [the insco] is “whatever”. So in a regular case, when they refuse to settle within the liability policy for reasonable amount, and a judgment is rendered for greater than the policy, the defendant, can sue their own insurance company in bad faith. But wait, there is also a bad faith action for having a judgment against the defendant’s credit, if the defendant can prove it was unreasonable to not settle to begin with. So if a small claims judge renders a verdict, any verdict, the defendant can start filing complaints with the California Insurance Commissioner, and raise cane by filing a bad faith lawsuit for the damaged credit score, write negative reviews on Google Places, etc. It can be very bad for the insurance company.

Advantage 2: Avoiding Limited, or Unlimited Civil Court Saves Costs & Defendant’s Credit at Risk

In a small claims action, you, the plaintiff, get to have a judge decide your award. You have no jury, there are really no discovery costs (see supra), and you can do service via mail, instead of paying a process server. There are no attorneys, so there are no attorney’s fees. The damaged credit score is a potential issue that definitely can force these die hard insurance adjustors to pay up. They would rather screw the guy who just stands in line and does nothing. They typically are clock punchers. So make em work.

There Are Some Procedures That Can be Helpful in Achieving the Outcome You Would Like

  • What is Small Claims Court?
  • Who is Permitted to File a Small Claims Lawsuit?
  • When may a Small Claims Lawsuit be Filed?
  • Where is this Type of Lawsuit Filed?
  • How do I File a Claim?
  • What are the Proper Procedures?
  • How does the Defendant get Notified?
  • What will Occur at the Trial?

What is Small Claims Court?

The small claim is a procedure, which is used in resolving civil disputes, when a small amount of money is involved. The amount of money in a small claim action for bodily injuries must be a total of $7,500 or less, excluding court costs, interest and attorneys fees if applicable. This is how civil disputes are solved, when there is a relatively small amount of money is involved and will be heard in the county court, civil division.

116.224. (a) Notwithstanding Section 116.221, the small claims court has jurisdiction in an action brought by a natural person for damages for bodily injuries resulting from an automobile accident if the amount of the demand does not exceed seven thousand five hundred dollars ($7,500).

http://www.leginfo.ca.gov/cgi-bin/displaycode?section=ccp&group=00001-01000&file=116.210-116.270

In the state of California there are rules of procedure, which are used in small claims cases that are referred to as Small Claims Rules. These rules assist in making the small claims process easier, faster and provide more information than the regular civil court process. They are published in the California Rules of Court and the California Statutes Annotated, which can be found at any law library and at almost any public library.

Prior to filing a small claims lawsuit, it is important to read these rules, for your own information about the process.
The aim of the small claims process is to assist in resolving small civil disputes through the court system, without having to go through the more complex and formal court process for a lower amount of money.

Who is Permitted to File a Small Claims Lawsuit?

The person that may file a small claims lawsuit, must be over 18 years of age, if the individual is under that age, they still may sue in small claims, but will require a parent or guardian to file the lawsuit for them.

When may a Small Claims Lawsuit be Filed?

For claims of more that $5,000.00, the filing fee is $75.00. In the event that you are owed money, or someone has your property, without returning it, then you may find a resolution to these issues, by taking your case to small claims. Prior to filing a lawsuit, it is recommended that you attempt to talk with the individual, or send them a letter in the attempt to resolve the dispute. When the attempt to speak with the person or the letter goes unanswered and the issue is not settled satisfactorily, then it will be time to consider going to small claims court. The following are questions you should ask, before filing a small claims lawsuit:

  • Did I try every reasonable way to reach a resolution in this situation?
  • Is this a valid legal claim, against the other individual or party?
  • Do I have or can I obtain the evidence that will be necessary to prove my claim, when it goes to court?
  • Is the amount in question, within the $5,000 or less that is permissible in small claims court?
  • Do you have the name and correct address of the other individual or party?

When the answers to these questions are “yes,” then the chances are you may have a valid small claims lawsuit.
If you are unsure, an attorney could advise you, whether you have a valid claim or not. They can explain the evidence that you will need to prove your claim, which will be necessary. Most cases, you will be able to ask the small claims court to include the attorney’s fees in the amount of the judgment, if you win. This should be one of the questions, you should ask the lawyer. When you would like to discuss your case with an attorney, but do not know one, you can contact the local bar association. The California Bar has a free referral service and if you require an attorney, but are not able to afford one, then you may qualify for free legal service from the lawyers at the local Legal Aid Service.

Where is this Type of Lawsuit Filed?

When you are prepared and believe it is time to file a lawsuit, then you will need to contact the Clerk of Court in:

  • The county where the event or dispute occurred, which led to the lawsuit.
  • The county where the disputed property is located.
  • If the disputed occurrence involves a secured promissory note, then the lawsuit should be filed in the county where the payments are received.
  • If you are unsure which county to file the action in, then you may contact the Clerk’s Office for assistance in making this decision.

How do I File a Claim?

Lawsuits all begin by filing a complaint form, which is referred to as a “Statement of Claim.” Once filled out, this is filed at the clerk’s office and when help is required, when filling out this form or any other form required start the lawsuit, the clerk can assist you. When filling out the “Statement of Claim,” you will be required to provide information in a comprehensible and brief manner about what the case is and the amount you are asking for in the lawsuit.

When you file the “Statement of Claim” form you will be required to have the full name and address of the defendant in the suit. If the claim is based upon written documents, such as promissory notes, a lease, repair bill, sales contract or other document, copies are necessary to attach to the form. There will be a fee that is necessary to pay the court clerk, which is a lawsuit filing fee, and the amount of this fee will be based on the amount of the small claims lawsuit.

What are the Proper Procedures?

Once the Statement of Claim form has been completed, then it will be necessary to officially notify the defendant that a lawsuit has been filed against them. The notification part of the process is referred to as “Service of Process.” The notification will have the Statement of Claim attached and a “Notice to Appear,” which is a summons. These papers will be sent to the defendant, in one of two ways.

  • The first is having the clerk sent the lawsuit papers to the defendant, by registered mail, with a return receipt requested. This will mean, when the party receives the mail, it is restricted delivery to them only and must be signed for, to obtain the letter.

There is a fee to have the clerk send the lawsuit documents by mail, however if you win the case, then it is possible to recover court costs from the defendant.

  • When mail service does not seem like the optimum choice, or when it is unsuccessful, then you have the option to pay the Sheriff’s Office to provide personal service. This means that the sheriff will attempt to locate the defendant and hand deliver the lawsuit papers to them at their home or place of work. If the defendant does not live in the same county, then you will be required to use the Sheriff’s Office in that county. Using the sheriff to hand deliver these documents to the defendant, will involve a fee for the service.

When these two methods are unsuccessful in serving the Statement of Claim and Notice to Appear, there may be other options available if you contact the Clerk’s Office.

Notice to Appear

When filing the small claims lawsuit, you should be notified of the date, time and place of the pretrial hearing. This is often referred to as a pretrial conference, since it is not a trial or final hearing in the case. The reason for the pretrial hearing is to determine what the issues are in the dispute.

Should the defendant fail to appear at the pretrial hearing, it is proved to the judge that the lawsuit was filed in the proper county and the defendant was properly notified, then the court will enter a default against the party. This will mean that a final judgment is entered by the court against the defendant, who defaulted. The judge will make this determination, if they believe there is sufficient evidence to prove that the damages claimed in the lawsuit are valid.

When the defendant appears at the pretrial hearing and does admit they owe the plaintiff money or property, the case can be settled, without going to trial. In the event that the defendant cannot pay right away and the plaintiff agrees to the terms of payment, then the court may enter a stipulation. This stipulation will make clear and legally binding the terms and conditions for settling the case.

When the defendant denies the claim at the pretrial hearing, the judge will question why the defendant does not believe they owe the plaintiff the money or property. Should the defendant not have a valid legal defense why they do not owe what they are being sued for, the judge will tell them, if they do not have a valid defense and advise them a judgment could be entered against them at this point in the pretrial. If the judge believes the defendant does have a valid defense they may then order the parties participate in mediation. When mediation is ordered by the judge in an incident such as this, it will normally take place at the courthouse, at the time of the pretrial hearing, with volunteer mediators. If the case is settled using mediation, the mediators will set the terms of the settlement agreement and this will be signed by the defendant and the plaintiff.

Cases that cannot be settled with mediation, the clerk will enter the case for trial. The next step will be to inform the judge who many witnesses will testify, so the judge will be able to determine how much time will be necessary to set aside to hear from all of the witnesses. If the plaintiff or defendants intend to testify, they will be required to include themselves, along with the witnesses.

What Will Occur at the Trial?

When the date is set for the final hearing / trial, you should be prepared to present your case. This will include having all of the evidence that you are going to present at the trial, any documents and witnesses you intend to call to testify. If you feel that a witness may not show up for court, then you can have that witness subpoenaed. When a witness is not subpoenaed, and does not show up for court to testify, the judge will rule the trial must continue without that witness. The judge will not let you return later with more documents or other witnesses, after the trial.

The judge will request that both the plaintiff and defendant tell the facts, show all of the evidence, and proof. The witnesses will be able to testify and the defendants witnesses. Then the judge will weigh all of the testimony, facts of the case and evidence to decide, who has won the case. After the witnesses, the plaintiff and defendant have told their side of the case, the judge may ask questions to clarify issues, but this does not always happen, sometimes the judge does not ask any questions. The small claims trial is basically informal and the judge will attempt to get all of the facts from both parties to make a fair and accurate decision in the case.

Conducting yourself is important during the trial, and some other suggestions include:

  • Be on time, for court. If the plaintiff shows up late for court and the judge has already called your case it may be dismissed. If the defendant appears late for court, the judge might enter a judgment against them.
  • In presenting your case before the judge, it is crucial to stick to the issues of the dispute and draw the case out.
  • Be courteous; never interrupt the judge, the defendant or any of the witnesses. During the trial, there should never be any name calling or raised voices.
  • When you have the opportunity to speak, if there is something you do not understand, you may ask the judge to explain it.
  • If the defendant offers to settle the dispute during the trial, or a settlement is suggested by the judge, then you should consider it carefully, rather than immediately turning the offer down. It may be in your best interest to accept the settlement, especially if it is recommended by the judge.
  • When the trial comes to a conclusion, usually the judge will announce their decision. In some cases the judge may want to take additional time to review the evidence or research case law before they make a final judgment in the case. If this happens, it is referred to as taking the case “under advisement.” The plaintiff and defendant will receive a copy of the final judgment in the mail, once the judge has ruled on the case.
  • In the event that the defendant is unsatisfied with the court’s decision they will be able to file a written motion for a new hearing, with the court. This will be necessary to do within 10 days after the judgment has been delivered. Then the court will rule on the motion, by determining if there are grounds for a new hearing.

Another step that can be taken is to appeal the judgment to the superior court. In this situation the procedure for appealing a judgment can be complicated and it is recommended to consult an attorney, when considering an filing an appeal.

Conclusion

Even though there is specific information and guidelines that can help in understanding the small claims process, at any time the plaintiff or defendant feels overwhelmed it is important to consult a lawyer. Know what your limitations are, to ensure having the best outcome in your small claims lawsuit. Some motor vehicle injury lawyers will actually do all your evidence books for you in exchange for their regular fee, and their agreement to handle any appeal by the losing defendant. If you have more questions, you can contact Michael P. Ehline, Esq. at Ehline Law Firm PC.