Quote Quoting pg1067
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Please explain what "the right thing to do" means.

If you want to sue for the full amount, you'll need to do so in "regular" court. If you're willing to waive the amount in excess of $3,500, then you can sue in small claims court.
"The right thing to do" means the procedure I would use to get whatever money I can from this person. Sounds like least risky and most efficient would be to forfeit $400 in favor of getting $3500. Thanks for the input.

This is helpful. Thank you