"Small Claims" is a special court of limited jurisdiction that resolves disputes quickly and inexpensively. There is no jury and no lawyers. The court is not bound by the rules of evidence, and each party in the dispute presents their side of the case informally. A board member or agent of the association may represent the association. Cases are often heard by pro tem judges. The judge can rule from the bench or take the case under submission and mail out a written ruling. Only the defendant can appeal if they lose.

Small Claims Limitations

Dollar Limitations. Although owners can sue associations for claims up to $12,500 (Code Civ. Proc. § 116.221), associations are limited to $6,250. (Code Civ. Proc. § 116.220) 

Attorney Limitations. Attorneys are not permitted to represent parties in small claims court actions. However, attorneys may advise a party before or after a small claims action commences. Attorneys can also represent parties in a small claims appeal (Code Civ. Proc. § 116.530)

Who May Appear. Homeowner associations created to manage a common interest development, as defined in Civil Code § 4100, may appear and participate in a small claims action through an agent, a management company representative, a bookkeeper,  or a duly appointed or elected officer or director who appears on behalf of that association. (Code Civ. Proc. § 116.540(i))

ADR Is Not Required. Associations and members using the small claims court are not required to offer pre-litigation alternative dispute resolution first. 

Matters That Can Be Heard

Delinquent Assessments. Associations may simultaneously record a lien on a property for delinquent assessments and sue for a money judgment. Once an association obtains a money judgment against a delinquent owner, any existing assessment lien on the property is automatically extinguished and must be replaced with a judgment lien to preserve the association's rights. (Diamond Heights v. Financial Freedom) Additional limitations on assessment collections apply to foreclosures, but not to small claims actions.

An association that seeks to collect delinquent...assessments of an amount less than...$1,800...may not collect that debt through judicial or nonjudicial foreclosure but may...collect...that debt...in small claims court...(Civ. Code § 5720(b))

In other words, the $1,800 limitation applies to foreclosures, not small claims actions. The statute clarifies the point by stating, "The amount that may be recovered...for delinquent assessments may not exceed the jurisdictional limits of the small claims court." (Civ. Code § 5720(b)(1))  If the association obtains a money judgment, the board can levy on the owner's bank account, sell the owner's personal property (vehicles, boats), garnish the owner's wages, levy on any rental income the owner may have, and record a judgment lien against the owner's real property.

Election Disputes. As provided in Civil Code § 5145(c), owners may bring actions in small claims court for the following under Civil Code § 5105(a) and Civil Code § 5120. In addition to levying fines, small claims judges may grant equitable and injunctive relief. (Code Civ. Proc. § 116.220)

Records Inspection. Members may bring an action in small claims court to enforce their right to inspect and copy the association's records. If the court finds that the association unreasonably withheld records, the court may assess a penalty of up to $500 for denying each written request and order the production of documents. (Civ. Code § 5235) If owners bring an action in small claims that the court finds is frivolous, unreasonable, or without foundation, the court can award costs to the association. (Civ. Code § 5235)

Hearing Officers

Judge Pro Tem. Small claims courts frequently use pro tem judges to hear cases. "Pro tem" is short for the Latin phrase pro tempore, which means temporary. Accordingly, a "judge pro tem" refers to someone who has been a lawyer for at least 10 years and is trained to hear and decide small claims cases. The person temporarily serves in place of a regular judge. Because of budget constraints and a shortage of judges, small claims courts rely heavily on temporary judges.

Commissioner. A small claims commissioner is a step above a pro tem and a step below a judge. Instead of being volunteers who fill in occasionally, commissioners are paid a salary and hired full-time to hear small claims cases. Parties to a small claims action are not required to use commissioners or pro tem judges. If one of the parties does not want a temporary judge, they can ask the court to have a judge hear the case. That may require coming back on another day when a judge is available. As provided for in California Rules of Court, Rule 2.816(d): A party stipulates to a court-appointed temporary judge by either of the following:

(1) The party is deemed to have stipulated to the attorney serving as a temporary judge if the party fails to object to the matter being heard by the temporary judge before the temporary judge begins the proceeding; or
(2) The party signs a written stipulation agreeing that the matter may be heard by the temporary judge.

Section 259(d) of the Code of Civil Procedure provides that a commissioner may act as a temporary judge upon the parties' stipulation. Where a party fails or refuses to stipulate, the actions of a commissioner are void. (Yetenekian v. Superior Court (1983) 140 Cal.App.3d 361.) Section 170.6 of the Code of Civil Procedure allows for the replacement of any judicial officer (pro tem, commissioner, or appointed judge). Parties must object at their first opportunity in small claims court, or the objection may be deemed waived, i.e., a stipulation may be implied by the parties’ conduct. (Foosadas v. Superior Court (2005) 130 Cal.App.4th 649)

Errors and Appeals

Erroneous Ruling. Even though a losing plaintiff cannot appeal, a party can move to vacate a small claims judgment based on clerical error or an incorrect legal basis. (Code Civ. Proc. § 116.725) See Form SC-108. In addition, Form SC-135 can be used to file a motion to vacate a judgment. You can find the forms on the California Courts website.

Appealing a Decision. The plaintiff in a small claims action cannot appeal an adverse ruling. The defendant, however, has the right to appeal if done within 30 days. (Code Civ. Proc. § 116.710) If a small claims decision is appealed, the matter is heard in Superior Court, and an attorney may represent each side. The case is heard de novo, i.e., as if it had not been heard before and as if no decision had been rendered. There is no right of discovery, and the matter cannot be heard without a jury. The Superior Court judge's decision is final and binding. There is no right of further appeal.

OTHER COURTS

Superior Court

Superior courts have general subject matter jurisdiction and handle both civil and criminal cases. Superior courts are divided into limited-jurisdiction (claims under $35,000) and unlimited-jurisdiction (claims over $35,000) divisions. Superior courts have the power to order injunctive relief. Decisions made in the superior court are not binding on other courts. Parties who lose in the superior court may appeal to California's Court of Appeals.

Courts of Appeal

The Court of Appeal is divided into six districts. Panels of three justices are selected to review lower court cases. The justices review case files and transcripts to decide if legal errors were made in the case. Decisions made by courts of appeal are binding on all lower courts.

Supreme Court 

California's Supreme Court is the state's highest court. Like the Courts of Appeal, it does not use juries or take testimony. Instead, seven justices hear appeals to determine whether errors were made in a superior court case (after a court of appeals has heard the issue). At least 4 of the seven justices must agree on the final decision.

TERMINOLOGY

• A decree is a judgment by a court of equity, admiralty, divorce, or probate granting relief to a party. A decree is also referred to as a judgment.
• A judgment is a court's final determination of the rights and obligations of the parties.
• An opinion is a court's statement of relevant facts, applicable points of law, and reasoning that led to the court's decision.
• An order is issued by a court requiring a person to do or not do something.
• A ruling is the outcome of a court's decision, whether on some particular point of law (such as the admissibility of evidence) or the case as a whole. A ruling may lead to an order.
• A verdict is delivered by a jury, which decides whether the evidence satisfies the elements of a claim.

See: California Courts Website

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