On April 26, 2021, Indiana Governor Eric Holcomb signed a bill into law that increases the filing limit for small claims courts starting on July 30, 2021.
Let’s take a look at what the new law means for your case.
What are small claims courts?
Small claims courts (sometimes called “the people’s courts”) are designed to be user-friendly, reasonably inexpensive ways of settling legal disputes.
Small claims courts are less complex and less formal than other courts. The Indiana Rules of Evidence don’t apply, nor do the Indiana Rules of Trial Procedure (the much simpler Indiana Small Claims Rules apply). Generally speaking, you simply fill out a form explaining your issue and both sides have an opportunity to argue their case in front of a magistrate judge.
You have the right to be represented by an attorney in small claims court, but most parties are not represented. The court’s staff and the clerk’s staff will assist you but they can’t give you legal advice.
Because of the simplified process, not all cases can be filed in small claims court. Most notably, small claims courts limit the cases that can be heard to those in which the amount in dispute falls under a certain amount.
What does the new Indiana law change?
As mentioned above, small claims courts limit the amount of damages a plaintiff can seek to recover.
Prior to July 30, 2021, this amount was $8,000 (the amount was $6,000 before it was raised to $8,000 on July 1, 2020). However, the new Indiana law raises the cap on small claims disputes to $10,000 statewide.
Let’s look at a quick example:
Olivia hires a carpenter to build a fence in her backyard and repair a small fence in her front yard. She pays him $6,000 to build the backyard fence and $3,000 to repair the front yard fence. The carpenter agrees to start work the following week.
The day before the carpenter is scheduled to start working on the fences, he calls Olivia and tells her that he injured his back and will not be able to work on the project. Olivia asks the carpenter to return the $9,000. The carpenter says that he will, but despite numerous requests, he fails to return the check. After several months, Olivia decides to sue the carpenter for $9,000.
Can Olivia sue the carpenter in small claims court?
Yes. Olivia can sue the carpenter in small claims court because the total amount of damages she’s seeking is less than $10,000. Prior to the new law, Olivia would have had to file her lawsuit in the appropriate circuit or superior court instead.
What happens if I file my lawsuit in the wrong court?
It’s important to file your lawsuit in the appropriate court—this means the appropriate court system (e.g., small claims court, state-level trial court, federal court) and the appropriate venue. The term “venue” refers to the geographic location of the court.
Generally speaking, a small claims lawsuit must be filed in the county:
- Where the transaction or incident giving rise to the lawsuit actually took place,
- Where the obligation or debt was incurred,
- Where the obligation is to be performed,
- Where the defendant lives, or
- Where the defendant has their place of employment at the time the claim or suit is filed.
Marion County is the only county in Indiana with separate small claims courts (1 in each of its 9 townships). In all other counties, the circuit court hears small claims or a division of the superior court hears small claims.
If you fail to file your lawsuit in the appropriate court system and venue, your case will be dismissed. Although you will be able to refile your case in the appropriate court, you will not be reimbursed for any of the fees you incurred filing your lawsuit in the wrong court.