We often get phone calls from perspective clients who have either filed suit in small claims court, or who have been sued in small claims court. The good news for the perspective client is that in theory, the matter about which they are calling should be a low dollar amount dispute as the jurisdictional limit in small claims court is $10,000.00. This means, only matters involving disputes less than $10,000.00 may be brought in small claims court.
Often businesses that are sued in small claims court ask their attorney to appear, even though under North Carolina law small claims court is the only division of the trial courts at which a corporation may represent itself. Regardless of whether a business represents itself in small claims court, or utilizes an attorney, what happens following the disposition of a small claims hearing is quite important. Moreover, the appeal window following a small claims hearing is only ten days. So, taking the appropriate steps following a small claims hearing is important in order to protect your interests, regardless of whether you won or lost before the magistrate.
“After final disposition before the magistrate, the sole remedy for an aggrieved party is an appeal for trial de novobefore a district court judge or jury.” N.C. Gen. Stat. § 7A-228(a) (emphasis added). “Upon appeal noted, the clerk of superior court places the action upon the civil issue docket of the district court division. The district judge before whom the action is tried may order repleading or further pleading by some or all of the parties; may try the action on stipulation as to the issue; or may try it on the pleadings as filed.” N.C. Gen. Stat. § 7A-229 (emphasis added). “Judgment in a small claim action is rendered in writing and signed by the magistrate. The judgment so rendered is a judgment of the district court, and is recorded and indexed as are judgments of the district and superior court generally.” N.C. Gen. Stat. § 7A-224.
“Our Supreme Court has generally defined a “person aggrieved” as a party “adversely affected in respect of legal rights, or suffering from an infringement or denial of legal rights.” J.S. & Assocs. v. Stevenson, 265 N.C. App. 199, 202, 828 S.E. 2d 183, 186 (2019).
Our Supreme Court has held, “under the doctrine of res judicata or ‘claim preclusion,’ a final judgment on the merits on one action precludes a second suit based on the same cause of action between the same parties or their privies.” Intersal, Inc. v. Hamilton, 373 N.C. 89, 107, 834 S.E. 2d, 404, 417 (2019). Thus, a party who receives an adverse ruling in small claims court must file a timely appeal or any subsequent lawsuit filed in district court will likely be met with a successful challenge on the basis of res judicata.
If you or your business have questions about dealing with a small claims matter, or what to do after a ruling in small claims court, one of our attorneys would be glad to speak with you.