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New Mexico Small Claims Court

With a name like Law 4 Small Business, it probably comes as no surprise that we do a lot of work for small businesses, and that some of the matters we help with are, well, small. Small claims usually come with one big problem:  it can cost more to solve a problem in small claims court than the problem is worth.  In this post we look at how small claims are handled in New Mexico and some steps you can take to be in a better position to enforce your rights in smaller disputes.

New Mexico Small Claims Court

In New Mexico, the state courts can hear claims of any size.  However, the legislature has also created a second set of courts specifically to handle claims of $10,000 or less.  These courts offer streamlined procedures intended to allow disputes to be resolved faster and cheaper than the district courts.  They are called the “magistrate” courts or New Mexico Small Claims Court. In Albuquerque they are know as the “metropolitan” court.  To keep this post simple, I will limit my discussion to metro court; however most of this applies to magistrate courts as well.

The metro court hears a variety of cases, including misdemeanor criminal cases, landlord tenant cases, and cases about city or town ordinances.  There are also certain cases the metro court cannot hear, such as cases regarding real property, domestic relations, malicious prosecution, libel, or slander.  But for our purposes, know that metro court (and the magistrate courts) can hear civil cases in which the amount claimed does not exceed $10,000, not including interest or costs.

Metro court offers certain advantages over district court for small cases.  The fees are lower and the process is (generally speaking) much faster. The court is  familiar with and friendly towards parties who represent themselves. They even have a “self help” office that can offer assistance (but cannot, of course, provide legal advice).  Even corporations can appear without counsel in many cases.  The court also offers a free mediation program.

On the other hand, Metro court also has certain disadvantages.  Discovery can be more limited.  Compared to the district courts, the rules are less clear and the case law is almost non-existent.  Appeal from the metro court is typically to the district courts, where a new trial is held.

The Problem:  Attorney Fees

Setting aside the pros and cons of metro court, there is a bigger problem that frequently dictates how a party handles a small claims case:  it usually doesn’t make sense to spend thousands of dollars in attorney fees for the chance to recover less than $10,000.  This problem is exacerbated when one of the parties is pro se. Pro se means that it costs them nothing to keep the lawsuit going. Remember that the longer a case goes, the more attorney fees it generates for the other side.  The high costs of attorney fees relative to the value of a small claim means that it frequently makes more sense financially to settle a winning claim than to pursue a meritorious case or defense.

The Solution:  Prepare Now To Save Money Later

Small claims are yet another an area where a little law now can save a lot later.  One of the most frequent problems we see in small claims are small transactions where there is no contract, or where the contract does not allow for attorney fees.  It may not be worth pursuing that $2,000 unpaid invoice if it will cost $5,000 in attorney fees.  But with a properly drafted contract you can get both.

A little law now can save a lot later, even in relatively small matters.  Contracts, operating agreements, leases, and other documents should be drafted to allow prevailing parties to obtain attorney fees.  When appropriate, they should require mediation or arbitration prior to litigation, with the parties splitting the fees.  A well-drafted legal document can prevent (or at least discourage) a party from racking up thousands in legal bills over a small claim.  Depending on the circumstances, there are many ways a good business attorney can structure your deal to minimize the risks or costs of future litigation.  If you need a lawyer to help you draft, review or negotiate terms to protect you–even for relatively small deals– we are more than happy to help you.

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16 comments

  • Yolanda Marie /

    I had a Roofer give my a quote to replace the roof on my house. My sister and I agreed and signed the Quote and paid the down payment of $9000 + $55.20 for the permit fee. Once he recived the money, he was up front about starting the job, and then soon after, his stories began, about his trunk braking down, he was waiting for weather to clear, etc. A month later, he still hasn’t started, and accouding to his texts, he as been speading the money on his personal things. Would Small Claims Court be the way to go to try to get my money back?

    • Yikes!

      I’m sorry to hear this. Given the amount, you can certainly go to small claims court, but it sounds like you could have what’s called an “Unfair Trade Practices Act” (or UTPA) claim. This would entitle you to 3x’s damages (i.e. the money paid times 3) plus attorneys fees. This would take you out of small claims court.

      You should consult with an attorney, and let the attorney decide which strategy is best.

      This should be a lesson for everyone out there; Be careful about the “down payment.” You want a “services agreement,” “work order” or some other document, issued by the vendor you want to hire, that specifically states when they are going to start work, refund / cancellation policy, and more. A down payment should never be more than 1/2 to 1/3 of the job, and you should check the BBB and references. If they aren’t on the BBB, you may want to take your business elsewhere for a vendor that is more established.

      Good luck to you. Larry.

  • Kayla Gomez /

    So if a contractor stated via text message the amount due for the job. Did the job, but the customer had a problem with one of the walls, the wall was fixed and approved by the customer. Now the customer is not wanting to pay the amount due. Would a lien on the property be the next way to go in order to get payment? The amount is only 1000$

    • Hi, Kayla.

      If a contractor performs work in NM to real property, and is not paid, then they can place a mechanics lien on the property (with some limitations associated with dates and whether you’re the prime or a subcontractor).

      Doesn’t matter how the customer approved the work, although it can always become a proof problem.

      Larry.

  • Angela C Olley /

    Is small claims where one would go if a mediation settlement agreement was breeched that’s under 10000?

  • How much does it cost to have legal help filing a case in Small Claims Court?

    • Hi Joyce —

      Thank you for that question. To be honest and forthright with you, we rarely represent clients in Small Claims Court because the amount of the claim (typically less than $10,000) means our costs and attorneys’ fees could take up a sizable percentage of any recovery you do get. That said, there are some cases where having an attorney on your side is worth the cost — even if those costs amount to some or all of the recovery.

      To get a better sense of what costs might be involved, I’d recommend giving our office a call. We can be reached at (505) 715-5700, Monday through Friday, 8:00am to 5:00pm Mountain Standard Time.

      All the best,

      Ian M. Alden

  • While traveling eastbound on I-40 just west of Santa Rosa we had a Semi-truck attempt to run us off the road causing almost $10,000 worth of damage to our Airstream travel trailer I have the incident on my dash cam (both front and rear views where the truck can be seen repeatedly crossing the lane deliberately). Initially, the trucking company, based on the East coast and well known, admitted fault after viewing the videos and opened a claim with their self insurance company. After promising that the check for damages (I provided the requested estimates from Airstream to repair the damage to them) was in the mail, they just quit responding. No check, no communications. I even had an attorney friend write a letter to them and they got no response. If I turn the incident in on my own insurance, I take the hit. Is this worth pursuing in NM small claims court?

    • Hi, there.

      Probably not. You need to pursue a cause of action where they are located — as the State of New Mexico probably cannot maintain personal jurisdiction over this company. Instead, you should sue them in the state / county where the company is located.

      Good luck to you. Larry.

  • Amanda Carmona /

    Hello, we purchased a shipping container from a large company. They gave us trouble in delivering and exceeded the time frame to be delivered. When we spoke to them on the phone about the issue they were rude and unprofessional so we asked for a refund. They said they would not refund and would no longer deliver. Its been about two years now that we have been trying to get our money back. When we attempted to deliver court documents, they were sent back. We spoke to a gentleman from the company which stated they put a fake attorney address so that when people try to sue it takes them in circles and they eventually give up. Its been so hard getting our money back from this company. What should we do?

    • Hi, Amanda.

      I’m sorry to hear about the trouble. You really need to hire a good business attorney to figure these guys out, and go after them — assuming the money they owe you is worth it. If they are located in NM, it sounds like there may be some fraud or other malfeasance. If so, that can give you the opportunity to claim fraud or violation of the Unfair Trade Practices Act (UTPA), which would entitle you to two-times damages (if Fraud) or three-times damages (if UTPA violation) plus attorneys fees.

      Even if their company is fraudulent, you may be able to go after them personally.

      At the end of the day, this is a lesson to know who you are doing business with, and to be careful before paying for things from vendors you don’t know.

      Good luck to you. Larry.

  • I pulled a permit (plumbing), did the work , passed inspection . There was no elec. to house. A year and half later customer complained water heater didnt work after electrician hooked up power ( shorted out twice) . Customer did pull knife on me in front of my inspecter, it was payday. Now she has gone to hardware store complaining about my work in front of customers. What can i claim in a lawsuit?

    • Hi, Kenny.

      Sorry to hear about the crazy customer. I think we all — as business owners — have stories to tell about crazy customers.

      We see this as a big problem with online Google / BBB / Yelp ratings.

      In general, people are entitled to their opinions, which is generally a pretty high-bar when it comes to consumers badmouthing the services or products of businesses. Unless they something truly egregious (i.e. he tried to rape me), it’s generally very hard to bring a cause of action and make it stick. When you hear (or read) a lawyer saying that, interpret that to mean “very expensive with low chance of success.”

      We’ve been successful in getting folks to walk back comments in instances where they got friends and family to talk bad about a business (i.e. the statement wasn’t truthful because there was literally no product delivered / service performed, and friends and family are certainly willing to badmouth someone else when it’s no skin off their back, but back down quickly when they can be sued).

      We haven’t been very successful in going after folks that badmouth businesses because they didn’t like the product or service, or even went as far as saying “totally screwed up the work and job.”

      You can certainly try to sue, and perhaps even the threat may get them to at least shut up or walk comments back, but I’ve found that crazy people will cut off their nose of in spite of their face, and will use any threats or appeals to dial-back the rhetoric as further reasons why you’ve been personally attacking and persecuting them.

      My general advice in these circumstances is to just remain the professional, and those who have half-a-brain in their heads will realize the woman is a nut-job.

      Larry.

  • Juanita RAMOS-Lopez /

    I have a daughter who was going to get married but recently she & her fiancée split. I paid for half of the venue for the wedding $5800 & his parents were supposed to pay for the other half. Since the wedding has been cancelled, the venue will not return my payment. I have asked the fiancée that it is only proper that his parents pay me half of the $5800. He does not agree. Should I purse a suit against him & his parents? The venue contract was signed by both my daughter & her fiancée.

    • Technically your daughter and her ex-fiancée are jointly and severally liable for that debt. If you paid it (I assume on behalf of your daughter), you are certainly entitled to seek reimbursement for the ex-fiancée’s share of the debt. I would file a small claim against the ex-fiancée, as well as the parents.

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