Can plaintiff pursue matter beyond small claims court, given these circumstance?

[arnie582]

What is the name of your state? Oregon

I. Initial Comment: This is a very complex set of circumstances, as it involves my performing tax compliance work for a 7 year non-filer; I've distilled this down into the simplest explanation possible in order to solicit some guidance on how I, as plaintiff, might further proceed in this matter.

II. Background:
I'm a CPA / tax preparer suing a client in small claims court to collect unpaid fees (through the date of my terminating the relationship). There is a written contract in effect which supports my right to bill for unpaid fees and also to terminate a client for cause. The defendant became verbally and in-writing abusive both before after I terminated him (that's easy to prove). In what I view as a strong and pejorative retaliatory measure, defendant filed a counterclaim for 3X the amount of my claim, and it alleges that I "didn't do my duties" ... that I showed "lacked due diligence" and that he had to "spend with new CPA to correct incompetence". I have adequate proof from documents and a series of emails from the client that his intension was to sue for unfinished work. While my claim was simple, to simply collect for work performed (backed up by my work product and time sheets, etc.), defendant doubled down and made it into something much bigger! I have language in the Contract (Engagement Letter) which includes "The client agrees that if collection proceedings become necessary due to non-payment, then the client will be responsible for legal fees, ... collection and other costs, that are reasonable and necessary and related to such collection efforts."

III. Questions:
1. Given the anticipation in my Contract, with the above language, about what happens if collection "efforts" are needed, and given that I've only billed him for my time thru the date of termination, can I pursue post-termination Damages in District Court as measured by my billable time expended to pursue this matter (which will likely exceed 35 hours)?

2. And if yes or even maybe, would the above language support billable time expended to defend against the counterclaim as well (consider that the counterclaim is based on future work to be performed by another CPA, and not actual costs incurred by the defendant at the time of the filing of the counterclaim (since the work of the successor CPA hadn't started yet)?

3. Does common law allow for Damages claimed by defendant to include an estimate of future work to be performed?

4. Is it reasonable for me to ask the judge in small claims court to notate in the file that I be allowed to pursue this matter Without Prejudice further in District Court for the undetermined-at-the-time-of-filing Damages, and especially given the egregious nature of the purely retaliatory & without merit claims of the defendant? Or will I be shooting myself in the foot by requesting this?

Thanks in advance for any guidance about my continuation of my claim.

 

[Taxing Matters]

III. Questions:
1. Given the anticipation in my Contract, with the above language, about what happens if collection "efforts" are needed, and given that I've only billed him for my time thru the date of termination, can I pursue post-termination Damages in District Court as measured by my billable time expended to pursue this matter (which will likely exceed 35 hours)?

Your time spent on the matter is not something for which the law compensates you. If you have to hire a lawyer or collection agency to help you collect, then per your contract it appears you could get those expenses added to your judgment.

3. Does common law allow for Damages claimed by defendant to include an estimate of future work to be performed?

If you breached the contract, the usual measure of damages in a contract case is what is known as expectancy damages; this means that the client would be owed what it would take to put him in the position he would have been had you properly performed the contract. For example, suppose you agreed to do all those returns for $700 and he paid upfront $200 to start the work. You breach the contract by either not preparing the returns or doing a lousy job of it. He then has to go to another CPA to have the work done properly and pays that CPA $650 to fix it. He expected in the contract to get the work done for $700. But now he has paid out $650 to the new CPA plus the $200 he already paid you to you, for a total outlay of $850. Thus, he could sue you for $150, because that is the amount that would give him what he contracted you to do — get him returns done for $700.

4. Is it reasonable for me to ask the judge in small claims court to notate in the file that I be allowed to pursue this matter Without Prejudice further in District Court for the undetermined-at-the-time-of-filing Damages, and especially given the egregious nature of the purely retaliatory & without merit claims of the defendant? Or will I be shooting myself in the foot by requesting this?

I have no idea what you would be asking the court to do. The defendant is allowed to add any counter claims he has and indeed may be required to include them or lose the ability to sue for them later. It is not illegal retailation to do that. If the claim is entirely frivolous you could seek sanctions for that, but chances are he's got at least something that, if believed by the court, would support his claim, and that is all it takes for the claim not to be frivolous. Like or not you'll likely have to defend against his claim as part of this court case. You are free to ask the court to award whatever damages you can prove in your case.

 

[Litigator22]

What is the name of your state? Oregon

I. Initial Comment: This is a very complex set of circumstances, as it involves my performing tax compliance work for a 7 year non-filer; I've distilled this down into the simplest explanation possible in order to solicit some guidance on how I, as plaintiff, might further proceed in this matter.

II. Background:
I'm a CPA / tax preparer suing a client in small claims court to collect unpaid fees (through the date of my terminating the relationship). There is a written contract in effect which supports my right to bill for unpaid fees and also to terminate a client for cause. The defendant became verbally and in-writing abusive both before after I terminated him (that's easy to prove). In what I view as a strong and pejorative retaliatory measure, defendant filed a counterclaim for 3X the amount of my claim, and it alleges that I "didn't do my duties" ... that I showed "lacked due diligence" and that he had to "spend with new CPA to correct incompetence". I have adequate proof from documents and a series of emails from the client that his intension was to sue for unfinished work. While my claim was simple, to simply collect for work performed (backed up by my work product and time sheets, etc.), defendant doubled down and made it into something much bigger! I have language in the Contract (Engagement Letter) which includes "The client agrees that if collection proceedings become necessary due to non-payment, then the client will be responsible for legal fees, ... collection and other costs, that are reasonable and necessary and related to such collection efforts."

III. Questions:
1. Given the anticipation in my Contract, with the above language, about what happens if collection "efforts" are needed, and given that I've only billed him for my time thru the date of termination, can I pursue post-termination Damages in District Court as measured by my billable time expended to pursue this matter (which will likely exceed 35 hours)?

2. And if yes or even maybe, would the above language support billable time expended to defend against the counterclaim as well (consider that the counterclaim is based on future work to be performed by another CPA, and not actual costs incurred by the defendant at the time of the filing of the counterclaim (since the work of the successor CPA hadn't started yet)?

3. Does common law allow for Damages claimed by defendant to include an estimate of future work to be performed?

4. Is it reasonable for me to ask the judge in small claims court to notate in the file that I be allowed to pursue this matter Without Prejudice further in District Court for the undetermined-at-the-time-of-filing Damages, and especially given the egregious nature of the purely retaliatory & without merit claims of the defendant? Or will I be shooting myself in the foot by requesting this?

Thanks in advance for any guidance about my continuation of my claim.

1. No! Definitely not. Your measure of damages is defined as that which can be reasonably expected and which flow directly as a result of the client's alleged breach of contract. There is no mechanism for awarding as damages a pro se litigant's time spent in preparing/prosecuting or defending a cause of action.

2. (See No. 1)

3. Indecipherable!

4. No! All claims you have against the client arising out of the same transaction or a series of transactions involving the same subject matter MUST be joined in one lawsuit or are forever barred!