Aggrieved parties who cannot afford an attorney to handle a controversy involving $6,000.00 or less, may be enticed to file a claim in the small claims division of the district court rather than the district court.
Michigan district courts have exclusive jurisdiction over all civil claims when the amount in controversy is $25,000 or less, as well as summary proceedings for enforcing land contracts and recovery of possession of property.
Whereas, small claims court is a division of the district court and has jurisdiction over civil claims when the amount in controversy does not exceed $6,000. The small claims court, however, does not hear claims for fraud (except dishonored checks and claims under the Consumer Protection Act), libel, slander, assault, battery, and other intentional torts.
Below are some important factors to consider before filing in small claims court rather than district court:
First, unless a case is removed from small claims to district court, it remains in small claims court and all parties waive their rights to (a) have an attorney appear on their behalf, (b) a jury, (c) recover more than the jurisdictional amount, and (d) appeal. Note: An exception to the waiver of appeal rights applies if the original case is heard by a magistrate judge. In that situation, the parties have the right to appeal to a small claims division district judge. For purposes of appeal, it is important to recognize that many small claims magistrate cases will not be recorded and that may or may not be an important factor at the appeal stage.
Second, many times an aggrieved plaintiff chooses small claims court because he or she cannot afford an attorney. Ultimately, though, the opposing party may remove the case to the district court because he or she wants to use an attorney. If proper procedure is followed, then the case may be so removed. Once removed to the district court, both parties are allowed to have attorneys represent them.
Third, generally, the cost of filing the case depends on the amount in controversy; therefore, many times, there is not a big difference in filing fees between the small claims division and the district court. Yet, there is a trade off with the rights that are waived in small claims court.
Ultimately, it may prove beneficial to consult an attorney and learn more about the litigation process before deciding which route is appropriate for your particular case (small claims or district court).
One of my future blogs will discuss Michigan’s new limited representation rules and how that rule offers an economical option for the litigant filing in district court for claims involving $6,000 or less.
Anissa Hudy focuses her practice on general business, real estate and commercial contracting, workout and litigation.
This article as well as the other articles posted on my page are not intended to constitute legal advice and may not be construed to as providing legal advice or forming an attorney-client relationship.