Legal Question in Business Law in California
I have a client refusing payment for a few freelance project. The total of all the project is more than $7,000 with I know is the cap for small claims. Individually the projects fall under the $7,000 mark. Can you split them up into individual cases or do they have to be all in the same case sine it is the same client?
9 Answers from Attorneys
There is the single action rule, which tends to say that you cannot split a single wrong into two causes of action. Since this apears to be two wrongs, you should be able to file two differnet lawsuits.
What you "know" is wrong. $7500 limit in small claims.
The cap is $7,500. You can't split your claim. Suit on any part bars a later suit on the balance. "We believe the fact situation before us is governed by the general rule against splitting a single cause of action. It is axiomatic that an entire claim cannot be divided and made the basis of several suits." (Lekse v. Municipal Court (1982) 138 Cal.App.3d. 188, 194.)
No court in its right mind would believe this was two separate lawsuits. You have to make the decision whether to waive the balance over $7,500, or file a limited civil action in the superior court for the full amount.
As others have noted, each separate small-claims case has a $7,500 limit and you can't split a claim into multiple pieces in order to get around that limit. Whether you have a single claim against this client or multiple claims will depend upon the facts of the case. You have not given us enough facts to answer one way or the other.
Well, the issue will turn on whether or not the transaction was a "single" transaction with seperate payment schedules or whether it was a divisible contract, with seperate "services rendered" and "payments made". So, this is one example of where you will want to select an attorney who will quickly review the facts and documents to give you a useful answer.
By Grace...
Shawn Jackson ESQ. (707) 584-4529
Business Development Attorney EMAIL: [email protected]
www.CaliforniaBusinessDevelopmentAttorneys.com
www.CaliforniaBusinessDevelopmentCenter.com
www.CaliforniaBusinessDevelopmentPlans.com
No communication resulting herein shall create an attorney-client relationship unless a separate retainer agreement is signed by attorney and client. The information provided is not legal advice nor is it conveyed in the course of an attorney-client relationship, but is intended merely as a general overview with regard to the subject matter covered. You should not act upon this information without seeking professional counsel such as any attorney in this office in a subsequent email communication (agreement) and the formation of an attorney client relationship.
You will almost certainly be better off asking for $7,500 in a single small-claims suit than asking for $10,000 in a single Superior Court suit, based on time required and costs you will incur.
As a Franchise Attorney I can only add the following, and it's a question. Do you have a written contract with your client and does it have an attorneys fee provision? If the answer to both is yes, then you are in a very strong negotiating position because your client is suddenly facing both the payment amount and attorneys fees - which will likely be a much greater amount. If not, then you need to develop a good contract asap. Consult with a good business or franchise attorney in your area for specific advice.
Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.
Franchise Foundations, a Professional Corporation
Just to complete the answer, your claim cannot be for more than $7,500 if you are a natural person. If you are filing on behalf of a business, the limit of your claim may not exceed $5,000. You may file as many claims as you wish for up to $2,500 in small claims court but are limited to 2 claims for up to $5,000 each calendar year.
Related Questions & Answers
-
I am currently trying to start a mail order beef jerky company and not sure of any... Asked 6/02/11, 12:43 pm in United States California Business Law
-
I bought a business from a corporation that I found out after the sale was... Asked 6/01/11, 3:56 pm in United States California Business Law
-
Do shareholders have the right to company computer and bank passwords? Asked 5/31/11, 3:28 pm in United States California Business Law