Whistleblower: Court victory often does no good

Winning a judgment in small claims court is often the beginning of a frustrating and expensive collection process.

By JAMES ELI SHIFFER, Star Tribune

Last update: June 16, 2009 - 12:18 PM

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In April, Leo Melamud drove from Plymouth to a courtroom in Milaca to get some justice. He had taken his former contractor to Mille Lacs County Conciliation Court, arguing that he was owed more than $2,000 after the builder, who was paid up front, failed to put a skylight in Melamud's house.

Melamud won his case like many conciliation court plaintiffs -- the contractor, Robert Loeffler of Princeton, Minn., was a no-show. Melamud learned the time-honored lesson of small claims: winning in court isn't the same as getting your money. In fact, it's merely the first step in a legal process in which the plaintiff is responsible for paying a succession of court fees that may or may not lead to the debt getting paid.

"It doesn't guarantee anything," said Melamud, an advertising and design consultant.

Plenty of Whistleblower readers have experienced the thrill of a court judgment, only to confront the sobering task of collecting.

Conciliation court handles claims of $7,500 or less, so it's a frequent venue for landlords and tenants, credit card companies, contractors and their customers and the like.

In Hennepin County Conciliation Court alone, 11,345 cases were filed last year and 10,750 judgments were entered. Nearly half of those were default judgments, meaning the defendant didn't appear, said Lynn Fuchs, court operations manager for the Hennepin judicial district.

To get the collection machinery in motion, the plaintiff must first transcribe the judgment to District Court ($30 fee, soon rising to $40). If you have a canceled check from the debtor or know where he or she works, the plaintiff can pay $40 for the court to issue a "writ of execution" that enables the sheriff to garnish the debtor's bank account or wages. The sheriff can also charge a fee to the plaintiff.

The plaintiff can also use the court to force debtors to reveal their assets. If the plaintiff pushes it far enough in court, and a debtor still refuses to cooperate, the court can even have the debtor arrested.

Those court costs can be added to the judgment. But it's still a speculative process. Kent Gravelle, an associate attorney at Cundy and Martin in Bloomington, says his conciliation court clients typically pay him a $1,000 retainer, which includes one attempt at garnishment.

The number of cases filed in Hennepin Conciliation Court has actually dropped sharply since 2002. Fuchs said she suspects cuts in court funding have something to do with that -- it used to take four to six weeks to get a hearing on a small claims filing. Now it's four months or more, she said.

Don't bother suing deadbeats

Conciliation court experts have this advice for those considering a small-claims lawsuit: don't bother if your target is broke. Gravelle said he checks the online court records at www.mncourts.gov to see whether there are existing judgments, tax liens and the like. "If the person or business you're suing doesn't have any assets, or isn't likely to get any in the next 10 years, what's the point?" Fuchs said.

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