Attorney Collection Cases in Small Claims Court

Riverhead:  A huge component of litigation concerning attorneys as parties is for fee collection work.  Often, an attorney will sue in Small Claims Court for a fee.  Sometimes, the attorney will be sued in Small Claims Court and will Counterclaim for fees.  What happens when the fee is in excess of $ 5,000.  Often, the attorney simply lowers the claim to less than $ 5,000 and continues in Small Claims Court, happy as a clam.

No more.  Conway v Dejesu Maio & Assoc.  2014 NY Slip Op 24127  Decided on May 19, 2014
District Court Of Suffolk County, Third District  Hackeling, J..    "Mona Conway, an attorney and the above captioned plaintiff, commenced this small claims action seeking to recover $5,000.00 for independent contractor legal services rendered to the defendant law firm Dejesu Maio and Associates. The defendant counterclaimed for $5,000.00 asserting a legal malpractice cause of action. The trial commenced on May 1, 2014 and the defendant's trial counsel moved for a directed verdict at the close of the plaintiff's case asserting a subject matter jurisdictional defense in that plaintiff's claims exceeded the $5,000.00 small claims limit. The Court reserved decision and adjourned the trial.

The undisputed facts are that both parties are admitted attorneys and both sides have retained counsel for the purpose of trial. No pre-trial discovery was undertaken as is usual in a small claims case. The plaintiff's testimony established that her breach of contract cause of action consists of a $5,341.00 component representing $100 per hour compensation for

 

of-counsel services rendered in a Federal Court and a claim of entitlement to recover undetermined contingency fees in two New York State Court personal injury actions.
The jurisdictional issue presented for disposition is whether a plaintiff can waive any recovery over $5,000.00 so as to fall within the $5,000.00 small claims jurisdictional limit?

 

The Law
Section 1802 of the Uniform District Court Act (hereafter "UDCA") establishes a jurisdictional limit for a small claims action when it provides "the term small claims . . . shall mean and include any cause of action for money only not in excess of $5,000.00 exclusive of interest and costs . . . " Emphasis added.   Section 202 of the UDCA establishes the District Court's general jurisdiction when it provides: ":The Court shall have jurisdiction of actions and proceedings . . . where the amount sought to be recovered . . . does not exceed $15,000.00. Emphasis added.

It is clear that the legislature envisioned and authorized plaintiffs to obtain District Court jurisdiction by simply reducing "the amount sought to be recovered." As this language is omitted from Sec. 1802 the Court must infer that this waiver doctrine does not apply to small claims cases. See, NY Statutes §§ 236,240. In its stead the words "cause of action" is substituted into Sec. 1802. As a matter of statutory construction, when the legislature uses different terms in various parts of the statute, it is assumed that a distinction is intended. Doyle v. Gordon, 158 NY2d 248 (Sp. Ct. NY Co. 1954). The Court also notes that "causes of action" may not be "split" to obtain small claims jurisdiction. See A & j Enterprise Solutions, Inc. v. B.A.O. Tech, 11 Misc 3d 173 (Nas. Dist. Ct. 2005). As such it is logical to conclude that a "cause of action" must be valued "as a whole" in determining whether it is appropriate for small claims jurisdiction."