Small Claims Court Can Help You Get Back Pay

Posted in Oilfield Family Finances

Small Claims Court Can Help You Get Back Pay

Sadly, many oilfield workers are running into problems by working for smaller “fly by night” companies that treat their employees badly or force them to work in unsafe situations. When workers refuse to put up with shady behavior from these outfits, they might find themselves unable to get back pay once they quit. Unfortunately, I’ve been forced to use small claims courts against a few parties who attempted to rip me off. Small claims courts are a last resort when someone refuses to pay you for services rendered or grant you a refund after selling you a faulty product. With a 100% batting average in small claims cases – I’m four for four – I’d like to think that I know a thing or two about the process. If you feel that an employer, customer, or company has wronged you, small claims courts can solve your legal issues.  Here are some tips for making sure that small claims court can help you get back pay or fix other employment issues:

  • Don’t bother unless you have a legitimate issue. In the case of small claims, the “issue” usually involves a party or employer that refuses to pay you for work which you performed. You may also be dealing with a large corporation that refuses to remedy a flawed product or service. I’ve dealt with both types of issues in small claims courts. While you shouldn’t dismiss the small claims process if you’ve been stiffed; don’t use small claims courts for “questionable” legal pursuits (do a web search on “Gloria Allred” if you want to learn more about what a questionable legal pursuit is.) Avoid filing frivolous lawsuits – even in small claims. Your goal is to right a wrong, period. Don’t be on a mission to screw an honest company that did you no harm. Do, however, recover money that is fairly owed to you, yet payment has not been forthcoming.
  • Try to work it out before going to court. If someone isn’t paying you money that you’re owed, perhaps they have a good reason. Shoddy or unfinished work on your part shouldn’t mean that you’re entitled to what you originally quoted a customer. You may get the other party to agree to issue you a partial payment for services rendered as opposed to your full quote. The goodwill between your business and your local community might be worth it. However, some people are never satisfied no matter how much effort and/or materials you supply them, and these same folks may well have a track record of stiffing small businesses. Go ahead and take the “customer is always right” approach if you like; but at some point, a customer is stealing from you and from others. Encouraging that sort of thing benefits no one. You may have performed honest, satisfactory work, and it might be time to engage the legal system.
  • You don’t need a lawyer. Small claims courts were set up specifically for the “little guy”, especially one that doesn’t have the resources to retain counsel. (Regardless, legal expertise generally isn’t necessary for the average small claims case.) Be aware, however: since you, as the plaintiff, will be filing the small claims case – you will have to do some homework.
  • Request payment in writing and keep detailed records. Do not begin the small claims process without typing up a formal letter, with a detailed bill outlining what you are charging for and why, and sending these via certified mail to the party you wish to get payment (or some other type of remedy) from. You may wish to follow up with a second certified mailing thirty days or so later. Keep copies of all mailing receipts, records, and the documents you send. You’ll need all of these for the small claims process. In most cases, the first thing a small claims referee will ask is: “did you send your client a bill?” If not, you’re probably dead in the water as far as the court is concerned.
  • The fee to file a small claims case should be nominal. For example, in California, the fees are based on the amount of damages being sought, and the maximum dollar amount that can be disputed in small claims is $7,500 (as of this writing). Every state has different fees and maximums on the dollar amounts under dispute. Small claims fees are a bargain in any state, when you consider that the average lawyer charges hourly rates far in excess of small claims court fees. More info (for Texas) is available at Texas Small Claims Court Information. Your own state will have a separate set of fees and procedures.
  • A corporation may settle your matter before the court date. This is a maybe, but it’s possible. My experience involving small claims actions against large corporations (I’ve had two) involved one of the defendants acquiescing to all of my demands (I had a few of them, and I wasn’t going to bend on any of them). This particular entity agreed to my demands, in writing, before our scheduled court date. Had I not gone ahead and filed a small claims case against the corporation in question, I would have received a big bill for unauthorized charges, damage to my credit rating, and absolutely no product and service resolution – bet on it. In another case, the corporation I filed suit against sent a representative to the court on the day of our hearing. As in any small claims matter, I said my piece; the representative – not nearly as familiar with the matter as I was – said his piece. Your mileage may vary, but many larger firms don’t want the hassle of dealing with (to them) a penny-ante inconvenience, and will remedy the situation to make you go away.
  • Show up in court, on the day you are scheduled to do so. This seems obvious, but showing up is crucial, or your case will be thrown out. If the party you are suing is a no-show (very likely if you are seeking damages from a corporate entity), the judge will look more favorably on you, the plaintiff. This does not mean that you will win your case by default (as could happen in a traffic ticket type of situation, where the ticketing officer doesn’t show). It does mean, however, that a judge (or magistrate) will take into consideration that you have a legitimate complaint against the defendant, who clearly isn’t taking your complaint seriously enough to respond to said complaint in a court of law. Folks who sit on the bench don’t look favorably on this sort of thing.
  • A judgment in your favor doesn’t guarantee payment. So, you sent several bills to the party in question, they still haven’t paid you, you filed a case in small claims, the case went to court, both sides showed up and argued their side of the issue, and the judge ruled in your favor. Congratulations! Well, kind of. You still have to collect. The burden of collecting is on you, not the courts. At this point, perhaps you can hire a collection firm if all other means of collecting fail; you can somehow humiliate the offending party via blog, newspaper article, or the like; or call them up every single day until they cave. Good luck with all of that, and remember – you could get in legal trouble yourself for hassling your target. While I have received payments owed to me from every party that I prevailed against in small claims – one of those parties didn’t pay me for a year. In fact, I completely forgot about winning against the particular party in court, and didn’t have the means, time, or desire to pursue the few hundred bucks due me. So while a judgment in your favor may be emotionally rewarding – it doesn’t guarantee you’ll get your money.

I’m no lawyer – but I’ve had success in small claims courts when former employers refused to pay me for my time, former clients tried to rip me off, or corporations attempted to charge me for flawed products and services. Yes, too many people take advantage of the legal system and try to “game” it by filing frivolous lawsuits (please don’t be one of these folks). However, don’t become a doormat for the bullies of the world – corporate or otherwise. If they have created financial harm to you – then take them to small claims court. Below are some additional tips when dealing with large corporations:

Small Claims Courts and Larger Corporations

If you need to file a small claims case against a corporation, start by going to your local small claims office (in most instances). You’ll pay the fee involved which, in most states, shouldn’t exceed $100. After the case is filed, the legal department at the company in question will receive a summons from the court where you filed. You should then receive correspondence from one of the company’s representatives, which will likely be a law intern or paralegal.

The representative might attempt to offer a watered-down solution designed to resolve the small claims suit, so don’t expect too much at this point. You should stand your ground if anything less than a full refund, payment for time lost due to a faulty product, and/or other minor damages are not forthcoming. You should also correspond only in writing – if you use the phone to move things along, at least get any agreements between you and the corporate party in writing, as well. My own experiences with suing large companies in small claims has been: “we’re right, you’re wrong; but we’ll throw you a bone – now please go away”. Both of the companies in question offered me very diluted versions of my original demands. (‘Demand’ is a strong word – but when you’ve tried everything else to get a rather simple problem resolved – it’s time to issue a ‘demand’.) In each situation, I followed up these original (and unsatisfactory) settlement offers with very detailed (and lengthy) letters outlining what I expected from them. These letters stated very clearly what the companies would need to do for me in order to avoid my pursuing legal action. Below is an edited example of one of my letters. A version of this letter was mailed to a specific legal representative – I had a name to deal with at this point – at Acme Megacorp. If you are considering taking a corporation to small claims court, then feel free to edit and use the letter below to fit your needs. Some background on this particular letter and the small claims case it refers to:

  • I’m dealing with a wireless provider (wireless phone companies, big banks, and media companies, i.e. DirecTV, are notorious for providing rotten customer service and then issuing bad credit reports for their customers). Fight these bastards – don’t roll over.
  • There were a handful of correspondences which preceded the letter below – however, I lost the preceding letters long ago.
  • You will note that I documented and supplied precise details as much as possible (very important).
  • You should assume that your first or second letters (not supplied here) will generate a less than desirable response from the corporation. This is why you go to small claims court in the first place (but you still have to go through the process).
  • In the situation depicted here: bad wireless service caused my small business to lose customer calls – and money. I estimated the money lost, and billed the company for this loss. They ultimately paid it.

Below is my letter –

Dear Ms. Goldie Locks:

I am writing in response to your letter concerning the case of ‘James Beam v. Acme Megacorp / Case No. 54321’ generated in the Tinytown Municipal Court recently.

First, please note that I only wish to communicate with Acme Megacorp in writing, rather by phone, for legal reasons. After several attempts to deal with Acme by phone and in previous letters, no one from your company attempted to contact me. As such, the issues spelled out very clearly in my contacts were never addressed. Instead, Acme Megacorp continued to levy fees and charges on my account.

Please be aware that from 2/9/XX – 3/8/XX, 689 minutes were used by my account. Also, 594 minutes were used from 3/9/XX – 4/8/XX. This airtime usage was only that usage generated from outgoing calls concerning my account, not incoming calls (the heart and soul of my incoming business). Also, any service “used” by me up to 5/6/XX was the result of all calls, incoming to my new phone service, which were generated by customers calling my old Acme Megacorp wireless phone number, then forwarded to my new number. I kept the Acme Megacorp service active for as long as I could, in order to retain the small trickle of customers unaware of my new phone number. This is the least that your company could do for my business in response to the utter disregard and lack of communication offered in response to my documented issues. Your offer of removal of your current Acme Megacorp charges of $314.70, plus any negative credit reporting about me is woefully inadequate, for these reasons:

  1. The aforementioned charges include late fees and an early contract cancellation fee (not usage fees) which would never have been generated in the first place had Acme Megacorp done it’s part to resolve my issues.
  2. My original LG phone was never returned.
  3. Nowhere in your letter do you admit to the abysmal customer service given to me by Acme Megacorp; you only mention possible negatives on my part. Your company’s lack of empathy on this matter only give me cause to continue with my court case.
  4. I am well aware that any negatives listed on my credit report(s) can be disputed by me, and then subsequently removed. This is a process that I have gone through before, and the disputes take far less time than 90 days to resolve.
  5. Nowhere in your letter do you address lost revenues to my business as a result of Acme Megacorp incompetence. These lost revenues are outlined in the attached spreadsheet, also mailed to Acme Megacorp in March and May of this year. The enclosed documents, along with any other documents relating to my dealings with Acme Megacorp, will be presented by me to the court on September 17, 20XX.

This matter can be resolved, however, with the following:

  1. Removal of ALL charges from my currently closed Acme Megacorp account.
  2. Cease and desist all collection efforts directed toward me.
  3. Removal of any negative credit reporting, and
  4. a check, in the amount of $605.00, mailed to the above address by September 10, 20XX.

I await your response.

Sincerely, James K. Beam August 29, 20XX

Within a month of mailing the letter above, “Acme” caved and met all four of the demands listed. I filed this particular small claims case in the state of Ohio, and here is the state’s official pamphlet on the subject.

Small claims courts are the legal system at its most accessible to the average American. Like insurance, it’s nice to know that they are there, but one hopes to never need them. So, use them when no other options exist. More and more individuals and companies will begin working in the oilfields as fracking continues to grow. The vast majority of these will be honest, hardworking, and trustworthy. But a few won’t be, unfortunately. If your oilfield experiences put you in contact with unscrupulous employers or individuals, then consider using small claims courts to fix your issues.