The Conference Room--Answers to Questions on N.C. Law

Update: Changes in Small Claims Court

Starting on August 1, 2013, the amount you can sue for in small claims court doubles from $5000 to $10,000. Other than that, the basic rules remain the same. 

Corporate Pro Se Representation

In North Carolina, a person has a right to represent themselves in court, even if they are not a lawyer. However, even though a corporation or LLC is considered a “person” for many legal issues, they are not capable of representing themselves in court. Even a small corporation that is owned 100% by one individual, that person cannot represent the corporation in court, either as a plaintiff or defendant. The corporation must retain an attorney for any litigation or other proceeding. This rule is the same in North Carolina courts as well as the Federal courts.

There are a few exceptions to the general rule. First, there is some support in the decisions of the appeals courts in North Carolina that a filing from a corporate officer may be sufficient to avoid a default for failure to answer. Second, a corporation may appear through a non-lawyer representative in small claims court. If your small corporation is suing or being sued in small claims court, I recommend you bring a copy of this case. Most of the magistrate judges are aware of this exception, but I have come across some who were not familiar with it and had to be shown why they were able to hear the arguments of a non-lawyer corporate representative.

In most cases, the attorney representing the corporation can be in-house counsel. North Carolina Gen. Stat. 84-5 allows a salaried employee of the corporation who is also an attorney to represent the corporation. When however, the corporation is acting in a fiduciary capacity, the statute provides that it must hire outside independent counsel.

--Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation.  Please contact him at (910) 772-1678.

Small Claims Court Hearings

 

I spent some time in small claims court the other day on a minor collections matter.  The county where I attended had all the people with cases in one courtroom and the magistrate heard everybody one case at a time.  Therefore, I was able to see a few cases in front of the magistrate.  I jotted down a few notes on some of the mistakes that the people made at their hearing. 

First, don’t think that just because she is not wearing a black robe or isn’t a “real” judge that the magistrate doesn’t deserve respect.  I saw the people reacting and overreacting to statements the other side made with loud sighs, eye rolls, hands in the air and head shakes.  I saw people point to the other party and make accusations like “you know you said it!”  This did not help these people’s case at all and could have unconsciously biased the magistrate against them.  The magistrate will give each party time to state their case and make final arguments.  Do not feel the need to interrupt or get your point across without words while the other side is talking or presenting their case.  Also, dress appropriately.  The magistrate doesn’t expect people in this day and age to wear a suit (unless you are an attorney), but frayed work-jeans, baseball cap, and your favorite heavy metal tour T-shirt does not help you.  If you do not show the magistrate that you respect her and take her seriously, why should she respect you and take your claims seriously? 

Second, take a pad and a pen with you.  I could tell (from the previously mentioned head-shakes that the magistrate tried to ignore) that one person had many more problems with the testimony of the other side than he gave when finally allowed to speak.  When that time came though, he had no notes and had forgotten all the points he wanted to make.   

Third, know what you are going to say.  Rehearse at home before you come in.  If you are worried you might forget something, you can take in notes on what you need to tell the Magistrate.  (It is more effective if you don’t read them word for word). 

Fourth, bring witnesses if you need them.  Even with relaxed Rules of Evidence, a Magistrate is not going to consider hearsay.  Hearsay is simply your statement to the Magistrate that somebody else said something.  The Court wants to hear directly from that “somebody else,” not what you say he said.  The major exception is you can say what the other party told you. 

Fifth, have your proof.  If you have documents that show your case, bring them in.  The Plaintiff, the person bringing the claim, is the one that is supposed to prove he is right and should recover money or whatever from the other person, the Defendant.  If the Plaintiff doesn’t satisfy this “burden of proof” then they lose.  I saw one person lose their case because they didn’t bring their documents to prove their claim, and that was in a case where the other side didn’t even show up! 

--Bradley A. Coxe is a practicing attorney in Wilmington, NC who specializes in Personal Injury, Medical Malpractice, Contract and Real Estate disputes and all forms of Civil Litigation.  Please contact him at (910) 772-1678.    

More on Small Claims Court

The Star-News has a nice article on small claims court or magistrate's court here.  I did a post a few months ago on the procedures of this type of court.  The Star-News article personalizes the New Hanover County small claims court with an interview with one of the civil magistrates.  I have helped people with their case before Judge Whitted and can say he does a good job in listening to non-lawyers present their case, ask them the right questions, applying that to North Carolina law, and then taking the time to explain it to the people that have brought the case so even if they lose, they understand why.    

Represent Yourself in Small Claims Court

“Anyone who represents themselves in court has a fool for a client and an idiot for a lawyer!” 

The Courthouse is a pretty intimidating place for someone not familiar with it.  Police in uniform, lawyers in business suits, and judges in dark robes mingle and converse in legal code words that sometimes don’t seem to mean what your Dictionary says they mean.  Running a lawsuit is difficult enough for lawyers, it is much more so for a non-lawyer who wants to represent themselves.  It is like managing a Japanese baseball team where you don’t speak the language or even know what the rules of the game are. 

There is one type of Courtroom in North Carolina that is designed to be user-friendly, Magistrate’s Court or Small Claims Court.  This courtroom operates similar to the “People’s Court” type realty television shows that you might have seen.  As long as what you are asking for is $5000 or less, you can participate in Magistrate’s Court.  Every county in North Carolina has its own Magistrate Court.  Ask the Clerk of Court in the courthouse where the person you are suing lives, for a Magistrate Court Summons and Complaint.  You can fill out the form, listing the name and address of the other party; how much you are seeking; and what type of claim you have.   The clerk will then have you serve the Summons by the sheriff or certified mail, return receipt requested, and will schedule a hearing date for you, usually within 30 days.

On the day of the hearing, you and the other side will sit in front of the judge, called a Magistrate.  There is no jury.  While Magistrate’s Court is designed to operate without lawyers, you may bring a lawyer if you want.    At the hearing, you (the “Plaintiff”) will tell the Magistrate what your claim is and how much or what you should get.  The other side, (the “Defendant”) then gets tell or show why he shouldn’t have to pay you any money or do anything.  It is important to have with you any materials you have that will help you prove your case including things like receipts, photographs, letters, canceled checks, and contracts.  Usually though, the Magistrate can’t consider what somebody other than the Defendant may have told you.  This is called “hearsay.”   Those people who have that information have to tell it directly to the Magistrate.  It is best to have a witness who is willing to help you, but if not, you can force the witness to come to court by having the sheriff deliver a subpoena.

Usually, after the Magistrate has heard both sides and reviewed the documents, he will make his decision, either at the time or within 10 days.  After the decision is made, either side has 10 days to appeal the matter to the North Carolina District Court.  The entire matter starts over again in the District Court.  You must present your evidence and testimony again before a Judge and/or a Jury.  This is a much more time-consuming and formal process and you should seriously consider retaining an attorney. 

For more information on Small Claims Court and copies of the forms needed, Legal Aid of North Carolina, Inc. has an excellent booklet entitled “A Guide to Small Claims Court.”  You can contact them at www.legalaidnc.org or (919) 856-2564.