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  1. #1

    Default Small Business Filing Countersuit in Small Claims Court

    My question involves court procedures for the state of: CA

    Background:
    I am currently the owner of smog check test only shop. We are a privately owned, sole proprietor small business that is licensed to perform state smog inspections. We DO NOT do any repairs, just state inspections. I have one employee who shares the smog inspection duties.

    What Happened:
    For all changes of ownership, CA requires all vehicles to have a smog inspection, and it must pass the inspection. So, my employee performed an inspection on a vehicle that was brought in on "consignment" from a used car dealership. The vehicle passed with no problems. Then, it was sold it as a "private party" sale. After 3 months, the person who bought it claimed the engine was no good and needed major work. During the time she had possession of it, and after my shop inspected it, she had an unlicensed mechanic, a friend of hers, working on it.

    She asked for her money back and wanted to give the vehicle back to the seller. The seller refused stating that the state "lemon law" was no longer applicable. So, she filed a complaint with the state Bureau of Auto Repair (BAR) which is a branch of state Dept. of Consumer Affairs. They investigated the case, including my shop, and closed the investigation against us and ruled our shop wasn't liable or obligated to pay her anything.

    Then, she mailed all three parties involved, my business included, certified letters. She threatened to file a small claims suit against the other two parties, the used car dealer and the private party seller, and my smog inspection business. We did not respond to the letter and have been served court papers to appear in small claims court in her county, which is 50+ miles from where we all live.

    We appeared once and she didn't provide all defendant parties with proper paperwork, so the judge rescheduled the pretrial hearing for next month.

    My questions:
    We have looked at everything she has given as evidence, and since the state agency didn't rule in her favor, we would like to counter sue for our legal fees, lost wages, lost business, and travel expenses.

    1) How and when can we, as in all three parties named as defendants, file a counter claim or suit against the plaintiff? Or, is it too late at this stage?

    2) Since the plaintiff is suing for $5,000 + another $1,500 in court costs, subpoenas fees, and other misc. items, how much can we counter sue for?

    3) What paperwork do we need to file and how do we go about it? Does it have to be sent certified mail?

    4) Can we file a joint counter suit for all three defendant parties, or can we file separate counter suits?

    5) What evidence do I need to prove my counter suit?

  2. #2
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    Default Re: Small Business Filing Countersuit in Small Claims Court

    Nowhere in your post do you mention what you or the others want to sue her for.

  3. #3
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    Default Re: Small Business Filing Countersuit in Small Claims Court

    Quote Quoting gonzodude
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    , we would like to counter sue for our legal fees, lost wages, lost business, and travel expenses.

    1) How and when can we, as in all three parties named as defendants, file a counter claim or suit against the plaintiff? Or, is it too late at this stage?
    That's not how it works. You don't countersue for damages. You file a motion for sanctions under Section 128.7 of the California Code of Civil Procedure, alleging that the plaintiff filed a meritless and frivolous lawsuit:

    http://leginfo.legislature.ca.gov/fa...r=6.&article=2.

    Unfortunately, you don't get awarded sanctions just because you win. You have to prove that the plaintiff file the lawsuit knowing that it was meritless and did it for the sole purpose of harassing and extorting money from the defendants.

    Being wrong and losing the case is not the criteria for those sanctions. I don't think you will be successful if you tried it.

  4. #4
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    Default Re: Small Business Filing Countersuit in Small Claims Court

    Quote Quoting gonzodude
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    We have looked at everything she has given as evidence, and since the state agency didn't rule in her favor, we would like to counter sue for our legal fees, lost wages, lost business, and travel expenses.
    If by this you mean you want to counter sue for the legal fees incurred in this lawsuit, as well as the lost income (you are a sole proprietor, so you don't have wages), and travel expenses related to the time taken to deal with the lawsuit, you will not succeed in that. The basic rules in American litigation is that each party bears his/her own costs of litigation (apart from certain costs like filing fees, service fees, etc that the prevailing party may recover at the end of the lawsuit). These kinds of expenses are things you just have to deal with as a cost of doing business.

    In order to actually "counter sue" you would have to have a claim against her — that is, be able to state some tort or contract claim that you have against her. I'm not seeing anything her that suggests you have such a claim.

  5. #5
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    Default Re: Small Business Filing Countersuit in Small Claims Court

    Quote Quoting gonzodude
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    I am currently the owner of smog check test only shop. We are a privately owned, sole proprietor
    We? "We" cannot be a sole proprietorship. If it's a sole proprietorship, then it's just you. If it's really "we," then it's a partnership (or some other business entity form).


    Quote Quoting gonzodude
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    she filed a complaint with the state Bureau of Auto Repair (BAR) which is a branch of state Dept. of Consumer Affairs. They investigated the case, including my shop, and closed the investigation against us and ruled our shop wasn't liable or obligated to pay her anything.
    The BAR has no power to make a ruling that someone isn't liable to someone else. The BAR only has the power to find that you're not subject to administrative sanctions for violating the law.


    Quote Quoting gonzodude
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    We did not respond to the letter and have been served court papers to appear in small claims court in her county, which is 50+ miles from where we all live.
    Is the county where you live the same county where your repair shop is located?


    Quote Quoting gonzodude
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    the judge rescheduled the pretrial hearing for next month.
    There are no pretrial hearings in small claims court. Small claims courts will occasionally/rarely schedule hearings for motions, but otherwise, the only hearings are trials.


    Quote Quoting gonzodude
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    How and when can we, as in all three parties named as defendants, file a counter claim or suit against the plaintiff? Or, is it too late at this stage?
    A counterclaim for what? In any event, small claims forms are available here and probably at the website for the court where the case was filed.


    Quote Quoting gonzodude
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    Since the plaintiff is suing for $5,000 + another $1,500 in court costs, subpoenas fees, and other misc. items, how much can we counter sue for?
    You can countersue for whatever amount is warranted by the relevant facts and law. It's worth noting that nothing in your post suggests you have any basis for a countersuit.


    Quote Quoting gonzodude
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    What paperwork do we need to file and how do we go about it? Does it have to be sent certified mail?
    You can read the Small Claims Act here, and the prior link has some helpful "how to" info.


    Quote Quoting gonzodude
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    Can we file a joint counter suit for all three defendant parties, or can we file separate counter suits?
    Again, you've not provided any information that would support any of you having any factual or legal basis for a countersuit.


    Quote Quoting gonzodude
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    What evidence do I need to prove my counter suit?
    This question makes no sense. If you have a valid basis for a countersuit, you need evidence to prove all the elements of whatever your claim is. We have no conceivable way of knowing what evidence might exist.

  6. #6

    Default Re: Small Business Filing Countersuit in Small Claims Court

    Quote Quoting PayrolGuy
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    Nowhere in your post do you mention what you or the others want to sue her for.
    Sorry, you are right. It would be for lost of income, which would total approx $5,000 for 2 days of no revenue from having to close my business down, my employee's wages which he will not receive (because he has to appear as witness and is named in plaintiff's deposition), my legal fees, and my travel expenses.

  7. #7
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    Default Re: Small Business Filing Countersuit in Small Claims Court

    Quote Quoting gonzodude
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    Sorry, you are right. It would be for lost of income, which would total approx $5,000 for 2 days of no revenue from having to close my business down, my employee's wages which he will not receive (because he has to appear as witness and is named in plaintiff's deposition), my legal fees, and my travel expenses.
    Why did your business down? If it is to go to court that isn't recoverable.

  8. #8
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    Default Re: Small Business Filing Countersuit in Small Claims Court

    Quote Quoting adjusterjack
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    That's not how it works. You don't countersue for damages. You file a motion for sanctions under Section 128.7 of the California Code of Civil Procedure, alleging that the plaintiff filed a meritless and frivolous lawsuit
    First of all, CCP 128.5 would be far better than 128.7. Second, I'm highly skeptical that either motion is available in small claims court. The only motions that small claims courts typically entertain are jurisdictional/venue motions and post-judgment motions.

    Quote Quoting gonzodude
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    Sorry, you are right. It would be for lost of income, which would total approx $5,000 for 2 days of no revenue from having to close my business down, my employee's wages which he will not receive (because he has to appear as witness and is named in plaintiff's deposition), my legal fees, and my travel expenses.
    First, there are no legal fees to be incurred in a small claims action. Second, I have no idea what you mean when you refer to "plaintiff's deposition." There are no depositions in small claims cases. Third, lost income and travel expenses are not recoverable.

  9. #9

    Default Re: Small Business Filing Countersuit in Small Claims Court

    Quote Quoting PayrolGuy
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    Why did your business down? If it is to go to court that isn't recoverable.
    Yes, to go to court.

  10. #10
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    Default Re: Small Business Filing Countersuit in Small Claims Court

    Quote Quoting gonzodude
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    Yes, to go to court.
    Yeah, that isn't recoverable.

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