A Big Guide to Small Claims Court- Part IV: Settle This!

This is the fourth in a multi-part series that explores and explains filing and winning a small claims court case.  You can access the other parts by clicking here.

In prior parts we discussed choosing small claims court, filing a claim, and the very likely scenario where, instead of seeing a judge on your court date, you’re sent, or chose to, go to mediation.  And eureka!  You reach an agreement!  Now you have to do a “stipulation” resolving the case.

A stipulation just means that you and your adversary settle the case and put your agreement on paper that is signed by the Court.

A stipulation is not a judgement.  It’s an agreement between you and your adversary. From the perspective of the person you're suing, you’re actually agreeing to drop the case because you’re getting some relief that the Court would otherwise grant without having to go to the judge and risk getting nothing.  

As we noted in prior parts, we don’t recommend settlement in a non-payment case. For one, you’re going to have to give a discount, which you should be in no  mood to do after having to drag the defendant into court. But the bigger problem is that a stipulation resolving the case is not binding – it is just another agreement like the one you had to get paid initially, but which was violated.  There are ways to make that agreement more binding, so if you chose to go that route and settle case with a stipulation you need to make sure that the stipulation is written correctly.

If you’ve decide to settle the case by stipulation, here are some pro tips:

  • Get try to get whatever money you can there.  It seems tacky, but you can tell your adversary to go to the ATM to get you cash for at least a portion of what they have settled for and then agree to pay the rest by a certain date.  At least then you have some money in your hand.  If your adversary balks at that, it’s not a good sign;
  • Ask the court whether you can have a judge sign it and make it a “So Ordered” Stipulation. Sometimes that is just part of the process.  Other times you need to ask. Technically, a stipulation of settlement signed by both parties is valid but getting a judge to sign it is a belt and suspenders thing;
  • Many courts have a process where, if you put certain words in the stipulation, you don’t need to come back to court and can just file the judgment if its violated. In New York, the magic words are “and for the balance unpaid as of [last date payment can be made] the plaintiff shall have execution therefore of the outstanding amount.”  With those magic words, it may be possible to file the stipulation as a judgment against the defendant if the agreement is violated.  But make sure you ask someone at the court that night what the process, in that court, is to convert a stipulation into a judgment if it’s unpaid.  The last thing you want is to have to sue for the unpaid balance.

What if you can’t resolve the case by agreement?  How do you get in front of then argue you’re case to a judge? We’ll explore that next.