Settling Disputes Using Small Claims Court and/or Early Settlement Mediation

The Small Claims division of Oklahoma's District Court system has evolved into one of the busiest and most successful segments within the state judiciary. Its widespread use and success is due to many factors, many of which reflect its simplicity. The use of Oklahoma's Early Settlement program is also growing, due in part to its low cost and "user friendly" format. Both are options for settling disputes though the use of Oklahoma statutes, one using in-court processes, and one using an out-of-court format.

The following is a typical landlord/tenant scenario, one which is appropriate for both Small Claims Court and/or Settlement services, and exemplifies their applications.

Student A rents an apartment from Landlord B, in which A has signed a written, one-year lease with B. As the tenant, A has paid $250 as a security deposit on the apartment, refundable at the end of the lease period. The lease stimulates the provisions for the refund of the deposit, and bases the amount of the refund on the physical damages attributable to A during the lease.

The landlord/tenant relationship is fine until about six months into the lease period, when A loses interest in college and decides to go back home and work for a while. A gives B two weeks written notice of his intentions to leave, thinking that B can sublease the apartment fairly easily because of its location near campus, and that two weeks is plenty of notice for B to sublease the apartment. But upon learning of A's intentions to move, B tells A that moving out is not acceptable unless B keeps the deposit. A, needing the money to get home, decides to move and deal with that a later date. In the meantime, B is contemplating filing a suit against A to recover lost rental revenue. The relevant question is now, "What are their legal options?"

The local District Court Small Claims division has jurisdiction because the issue falls within the guidelines of the Oklahoma Small Claims Act of 17968, primarily because:

1. the apartment was located and the tenancy relationship was created within the district boundary of the court,
2. the amount sued for is less than the $2500.00 maximum of Small Claims,
3. landlord/tenant cases are acceptable in Small Claims court,
4. the statute of limitations on this case has not run.

EARLY SETTLEMENT

1. Mediation and conciliation services provided through this program of the State Court system are accessible at any time in the dispute, either voluntarily, before a court case is filed, in which the total cost for services rendered is $5.00 for each disputants or after a court case has been filed at the District Court level, in which instance there are no costs to the participants. Judges can court- order participants to mediation after the court acquires Jurisdiction.

2. Decisions reached in mediation sessions are totally the will of the disputants, the mediator does not render a decision or give legal advice. However, in almost all cases, the decision(s) reached by the disputants will meet with the satisfaction of Judges, and in those situations where a court case is pending, the written mediation agreement reached by the disputants can be incorporated into the Judge's Journal Entry of Judgment. That action finalizes the court case and adds the weight of the court to the judgment, i.e, making the negotiated settlement consummated by the disputants a "binding agreement."

3. Mediations, information obtained in the mediation session, and the dialogue within a session is, by law, confidential. No one can obtain information through any court or lawful process to obtain the information, not even the judge in court-referred cases, unless the mediation agreement is incorporated into the Journal Entry of Judgment, in which case the written mediation agreement becomes public record.

4. Early Settlement does not have subpoena power and cannot make disputants respond to any action. However, Judges can order disputants to attend mediation sessions in which court cases have been initiated under current District Court rules, but the Judge cannot order participants to reach a stipulated agreement.

Judges strongly encourage participation in Early Settlement because it can (a) be an interim, pre-court, low-cost step in resolving the dispute, and (b) decisions reached out-of-court in mediation are the decisions of the disputants, not the judge, (c) participants can be "very creative" in their agreement to solve problems and won't take up time and money of the court system, (d) in court cases, the Judge will allow their decision to stand in court, and (e) the Judge won't have to get involved and make a decision for the participants which, potentially, neither will like, but will be made by the Judge because of the legal aspects or technicalities of the law.

Other considerations worth noting:

1. Participation in Early Settlement mediation is voluntary until a Judge orders disputants to use the process. Judges obtain jurisdiction to make that order through a court case filed in the court of authority. However, voluntary, pre-court participation reflects a strong tendency to settle prior to, or out of, court.

2. Early Settlement does not have subpoena power, in other words, they (alone) cannot make anyone respond.

3. Legal rights are not waived by first trying to resolve issues through Early Settlement prior to court action. The $5.00 fee for Early Settlement services can be sued for in court should mediation not be successful.

4. Legal advice cannot be given from the mediator, however, in mediation, even if complete settlement is not consummated, participants discover all the relevant issues to be heard by the Judge.

SMALL CLAIMS

1. Filing fees include a minimum of $37.00 for court costs, plus a minimum of $5.00 for the service of the summons on the defendant. In the above scenario, if the summons is served by the Sheriff's office, court costs will add to $57.00. Court costs vary, dependent on the services provided through the Court Clerk, the amount of the principal sum being sued for, how court papers are served, etc. These costs are origination costs, other actions like transfers, collection procedures such as garnishments and hearings on assets also have specific costs to the plaintiff, usually recoverable through the judgment of the court.

2. The Court's papers, required for the action to commence, are picked up and completed by the plaintiff or their attorney, completed, and then filed with the Court Clerk's office. Court costs are due at. that time, and are not refundable. Court papers list your claim(s) and what you are suing the defendant for. By law, legal advice is not given by either the Court Clerk's personnel or the Judge.

3. The landlord, or the tenant, whoever is filed against and named as the defendant in the initial case, may file a counterclaim to the plaintiff's claim, based on the suit having been filed against them. Counterclaims and set-offs are heard by the judge at the same time the original claim is heard.

4. The Court Clerk's deputy assigns a date certain for trial, usually on the next available regular docket date of Small Claims in that district. Both the plaintiff and the defendant are notified of the date of trial and are advised to attend.

5. In the courtroom, the Judge will call for both the plaintiff and the defendant to see if they are present. If the plaintiff appears and the defendant doesn't, the Judge usually will grant a default judgment to the plaintiff, and, typically, awards court costs and attorney fees, if any, to the plaintiff. The judgment also includes a provision for statutory interest on the amount of the judgment until the judgment is paid.

If both parties appear, the Judge will ask both parties if they would like to try to resolve their issue using a public mediator provided at no cost through the Early Settlement program. If they agree to try mediation, both the plaintiff add the defendant leave the courtroom with the mediator and go to a confidential, closed-door hearing out of the courtroom. Mediation sessions typically last about an hour. The Judge can also court-order the litigants to mediation. As discussed previously, in mediation, the parties decide the issue with the help of the mediator. If mediation is tried and an agreement is not reached, the disputants return to the courtroom and the Judge hears the case in its entirety. If the parties decline voluntary mediation and the Judge does not order them to mediation, the Judge hears their case in the order which the docket was called.

The courtroom hearing takes as long as it takes for the Judge to hear enough testimony and gather enough evidence to reach a decision. The plaintiff has the burden of proof. All testimony must be from principals involved in the issue. Hearsay, third-party evidence or testimony will not be allowed to be presented. Although Small Claims procedures are more relaxed than Civil Court cases, rules of evidence still apply, and all courtroom activity is guided by the Judge.

Attorneys can represent clients in Small Claims, but they are not required. The Judge may provide for the continuance of the case in those situations in which only one party is represented by legal counsel.

The Judge hears all testimony and reviews the evidence and renders a decision. The Judge's decision is based on the preponderance of the evidence and testimony as presented by the parties, or as presented by their legal counsel. Small Claim judgments are appealable directly to the Oklahoma Supreme Court.

Other considerations worth noting:

1. Court actions are serious matters and should only be initiated according to law and evidence. Taking someone to court to harass, threaten, or intimidate them is not wise. Obtaining qualified legal advice before filing a case is almost always money well spent.

2. Being awarded a judgment by the court doesn't necessarily mean that the awarded party will collect on the Judgment. Continuances, collection processes, and process service typically adds considerable additional costs and time to collection. There are no guarantees in court, and there are no refunds.

3. Judgments are often rendered for less than what was sued for. The Judge has total discretion of the award, who wins, and who pays court costs, attorney fees, etc.

4. From the time of filing to the time of hearing is typically two to four weeks, and hearings are always at the convenience of the Judge. Dockets are usually in the mornings.

5. There are always risks associated with a Judge making a decision for litigants based on information that only the Judge will allow to be presented. In other words, litigants have limitations on input, limited time for input, and must convince the Judge toward their understanding of the situation. They must also live with the Judge's decision based on the Judge's perception and willingness to accept the evidence.