North Carolina Small Claims Lawyer Tom Kerner

Do I Have to Raise a Counterclaim in Small Claims Court in North Carolina?

In North Carolina Small Claims Court, a party is not required to file a counterclaim, even if it has one.  So for example, if you are suing a company for a breach of warranty, and you still owe money on your purchase, that company does not have to counterclaim against you for the balance in a small claims action.    It can wait to file a separate suit.

North Carolina General Statutes section 7A-219 provides that "failure by a defendant to file a counterclaim in a small claims action assigned to a magistrate, or failure by a defendant to appeal a judgment in a small claims action to district court, shall not bar such claims in a separate action."   Those with some familiarity with the legal system might recognize this as an exception to the general rule (embodied in Rule 13(a) of the North Carolina Rules of Civil Procedure) which ordinarily requires counterclaims to be filed in the same action as the pending claim, so that the courts can resolve all issues between the parties in one action, rather than having multiple suits.

For small claims actions in North Carolina, the "compulsory counterclaim" rule does not apply.

North Carolina Small Claims Court - Maximum Claim

Currently, the maximum dollar amount for a claim in North Carolina Small Claims Court is $5,000.  This amount is computed "without regard to interest and costs."  See N.C. Gen. Stat. ss 7A-210 and 7A-243.  So in theory, you can ask for more than $5,000.00, as long as the $5,000.00 is comprised solely of the principal (as in the case of a loan or other debt) or the compensatory and consequential damages. 

In other words, you should be able to claim for $5,000.00 of principal, plus any interest (for example, your contract might provide for 8% annual interest on a delinquent account) plus court costs and fees (usually totaling around $85 for a single defendant).

However, in one case in which I was involved (in one of the first cases I handled in Small Claims Court and, admittedly, before I knew this rule existed) I successfully moved, under N.C. Rule of Civil Procedure 12(b) to have a plaintiff's case thrown out because he asked for more than $5,000.00 in his Complaint.  He had, correctly as it turned out, asked for $5,000.00, plus interest, plus costs.  His "total relief sought" on the complaint was around $5,100.00. Not knowing this rule, I invoked "subject matter jurisdiction" and argued that the court lacked jurisdiction to enter a judgment greater than $5,000.00 pursuant to N.C. Gen. Stat. 7A-210(1).  The magistrate allowed the motion, dismissed the plaintiff's case, and the plaintiff hit the roof.  The moral of the story:  don't take chances.  Unless you walk into small claims court with the law in hand, ready to show the magistrate that you are correct, do not mess around with the $5,000.00 limit.