Part 2- Where & How To Sue

You have all your documents together, you know the correct name of your defendant and where to find them. Now you’re ready to head to the court house. Where do you go?

First, make sure that a Texas court will have jurisdiction. The defendant must have at lease “minimum contacts” with Texas, either because he lives or does business in Texas, or because the contract consents to jurisdiction in Texas, or the suit arises out of events that happened in Texas.

Once you know you can file suit in Texas, which court do you use? If the amount in dispute is $5,000.00 or less, you can go to the Justice of the Peace for the county and precinct where the defendant lives or does business. To find out which precinct your defendant is in, call any of the constables or Justice Court clerks, and give them the address.

Many people feel that if they don’t file suit right away when the bill is not paid, they can’t do it later. Not true - you have a full 4 years after the default to file suit in a contract case. (Of course,the disadvantage of waiting is that the defendant may be more difficult to find, or may not be in business anymore.)

Many companies represent themselves in small claims court, without hiring a lawyer. This is called handling the case “pro se”, Latin for “for himself.” Unless you’re sure the defendant would be able to pay the judgment, it may be economically unfeasible to spend attorneys fees to file suit over a small amount. However, if your company is incorporated, you will have to hire anattorney. That’s because the corporation is legally a separate person; although you have a right to represent yourself, the law and the State Bar Association frown on unlicensed people representing others - even their own company! However, there is an exception in the rules to allow property managers to handle eviction proceedings.

What can you get if you win? Assuming you satisfy the court that some amount is due, you will also be awarded pre and post-judgment interest and court costs, (and attorneys fees if you hired an attorney). Unless you have a contract that allows you to charge more, you cannot receive anymore interest than 6% per annum from thirty days after the debt became due, up to the date ofthe judgment. After judgment, the amount awarded accrues interest at the rate of 10% perannum until paid in full. If your defendant is making payments, you will want to start a chart showing the interest accrued, and how each payment is applied.

The last step before filing suit should almost always be sending your defendant one final letter demanding payment, and notifying him that suit will be filed if he doesn’t pay. (Yes, sometimesthis does work; and anyway, it doesn’t hurt!) If you will be representing yourself, there is no specific amount of time you must give in the letter, but usually allow between 10 and 30 days forthe defendant’s response. Send your demand letter by certified mail, return receipt requested, and by regular mail. That way, if the certified mail is returned unclaimed, you still know the demand was received and the address was good, as long as the copy sent by regular mail doesn’t get returned to you. Also, you may want to put on the envelope, under your return address, thewords “Address Correction and Forwarding Requested.” That way the post office will notify you if they have a new address for your defendant.

Finally, take your contract and invoices to the clerk of court, along with filing fees. They have a form you can fill out to file your suit - you just have to fill in the name and address of the defendant, basis of the suit, and amount due.

If you run into a problem, or if you find that you have questions about your particular situation, call your favorite lawyer.

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