If you feel like you've been wronged by a company, you have the option of suing it to recover your losses. Companies have a legal identity in their own right in the United States, which means you sue the company directly and not an individual officer.
Where Do You Sue?
Every state has a small claims court that is specifically set up to hear low-value cases. This court is ideal, especially if you don't have a lawyer. There's a maximum limit for which you can sue in this court. In New York, for example, the limit is $5,000. In Tennessee, it's $25,000. Search online to find the dollar limit in your jurisdiction. For claims above this amount, it's a good idea to hire an attorney to prepare the case for you. These cases are too high value to be heard in small claims court, and you may find it tough going to navigate the civil litigation process on your own.
Who's the Company?
When you fill out the small claims court paperwork, you must know the exact name of the company you're suing or your claim may not be valid. Here's the rundown:
- For businesses owned as sole proprietorships, write the owner's name and the business name: "Tommy Tompkins dba Tompkins Tow Trucks." DBA stands for "doing business as." Check the county records to find out the true owner's name. A sole proprietorship is a business that is not a legally distinct entity from its owner, and therefore, you're suing the owner as the business.
- For corporations and limited liability companies, write the exact legal name: "Tompkins Tow Trucks Inc., a corporation" or "Tompkins Tow Truck LLC, a limited liability company."
- For partnerships, write the name of the partnership and individual partners: "Peter Taylor and Suzanne Bush, individually and Taylor & Bush, a partnership."
The next step is to find the address of the entity for "service of process." This is the agent that the company has designated to receive legal papers on its behalf. Find this information on the Secretary of State's website for your state.
Why Are You Suing?
You need a legal reason to sue someone. In legal jargon, this is called a "cause of action." The two most common causes of action against a business entity include breach of contract, in which the company broke its contract with you and you suffered loss as a result, and negligence, meaning the company injured you because it was careless. If you didn't receive the goods you bought and paid for, for example, that would be an action for breach of contract. If you slipped and hurt yourself on a restaurant floor, that would be an action in negligence. You can learn the basics of these actions – what you need to prove in order to win your case – on the internet.
Attempt to Resolve the Matter
Before going to court, you might attempt to come to some sort of resolution with the company. The way you do this is by writing a formal letter to the company stating exactly what your claim is about, setting out the legal reasons why you believe your claim is right and explicitly stating what you want the company to do to resolve the matter. Here are some of the phrases you might use:
I am writing to you regarding ..... I am right and you are wrong for the following legal reasons .... To settle this matter, I want ..... If you do not do what I ask by [date], I will take court action against your company.
Give the company a reasonable amount of time to respond to your letter – somewhere in the region of 14 to 21 days should be fine for a small monetary claim. If the company is not willing to settle, your next step is to file a lawsuit. Where you file depends up on your state's laws respecting jurisdiction.
File in the Small Claims Court
Go to the clerk's desk and ask for a packet to file a small claim. Included in the packet should be a complaint form to fill out to get the case rolling. This form is designed to be easy to use for unrepresented claimants: simply fill out your name, the defendant company's legal name and address for service, the amount of financial compensation you're claiming and the factual basis for the claim. Some courts have a small claims adviser to help you figure this stuff out.
Sign the form, return it to the clerk and pay the filing fee. The fee amount normally depends on how much you are suing for. Now, you need to serve the papers on the company's agent. Different states have different laws for how to effect proper service; some states require the sheriff to serve, while others permit a private process server or even service by mail.
Going to Court
Often, filing the claim is enough to prompt the company into reaching out with a settlement offer. If it does not, then you must go to court and argue your case. The process in small claims court is rather like getting a traffic ticket. You and a few others may be in the courtroom, and you'll be given a few minutes to discuss your case. Take all the evidence you have such as invoices, contracts, estimates, letters and witnesses who can back you up. The judge will hear both sides and then make her verdict.
If your case is too big for small claims court and ends up in a court of general jurisdiction, you may not see the inside of a courtroom for months or even years; much of the litigation prior to trial occurs between parties, on paper.
Jayne Thompson earned an LL.B. in Law and Business Administration from the University of Birmingham and an LL.M. in International Law from the University of East London. She practiced in various “Big Law” firms before launching a career as a commercial writer. Her work has appeared on numerous legal blogs including Quittance, Upcounsel and Medical Negligence Experts.