Magistrate Court – A Viable Choice for Filing Collection Cases?

As a retired Magistrate Court Judge (DeKalb County), I was happy to be asked to write an article about the “Pros and Cons” of filing collection cases in Magistrate Court! A little background on Magistrate Courts in general: The first Magistrate Court was created in Georgia in 1961 as a “small claims court” intended for citizens to settle their disputes without attorneys. More than 100 of these courts were created throughout the state over the next few decades, each with its own local rules and jurisdictional limits. The resulting confusion was resolved with the passage of the “new” 1983 Constitution of the State of Georgia which created discrete levels of Courts, including a Magistrate Court with a set of Uniform Rules governing all Magistrate Courts throughout the State. Initially, the jurisdictional limit for civil matters was $2,500, but this has been raised twice and now is $15,000.¹ Of course any lawsuit seeking relief other than a money judgment, such as a covenant enforcement action seeking equitable relief could not be filed in Magistrate Court.

There are some very good reasons to file an assessment collection case in Magistrate Court, and some other good reasons to choose a different forum. There are four principal reasons to file suits in Magistrate Court:

1. Lower filing fees. For example, in DeKalb County, it costs $51.50 to file a civil action in Magistrate Court (plus $35 per defendant for service). In State Court, the filing fee is $217.50 (plus the same $35 per defendant for service). Keep in mind, however that a when judgment is awarded to the Association, the filing fees are included in the award regardless of what court an action is filed in.

2. Speed of adjudication. If a defendant files an Answer to a lawsuit in Magistrate Court, it will be placed on a calendar between 15 and 40 days after the Answer is filed.

3. Self-Representation. Because Magistrate Court is not a Court of Record, a member of the Board of Directors, or even in some circumstances a property manager, can represent the Association.

4. A Judgment is a Judgment. If no appeal is filed, a judgment entered by a Magistrate Court is just as collectible (or uncollectible!) as one entered by any other Court and remains valid for seven years, just as any other judgment.

There are, as you can imagine, a number of reasons why filing in Magistrate Court may not be the best choice. Here are a few matters to consider:

1. De Novo “appeals.” Any decision rendered by a Magistrate Court can be ‘appealed’ by the losing party to either State or Superior Court, not for a review of anything that transpired at the Magistrate Court trial, but for a brand new trial on the merits. This means trying the case all over again. If you have an attorney, it means additional trial and preparation time. If you did not have an attorney representing the Association at the Magistrate Court trial, you will have to hire one now because Associations, as corporations, cannot represent themselves in State or Superior Court.

2. Pro-Se Friendly Tribunal. Magistrate Court is intended to allow citizens to ‘have their day in court’ and Magistrate Court Judges are trained to give great latitude to parties representing themselves. A defendant will be allowed to testify about all of their ‘issues’ with the Association. Attorneys who object to such ‘evidence’ are generally told to hold their objections, be patient, and let the Judge sort it out. This is very frustrating to attorneys!

3. No Civil Practice Act. There is no “discovery” in Magistrate Court. This means that a defendant may file an Answer that says “I don’t owe the money” and you cannot ask why. Sometimes a defendant has a legal reason for not paying assessments, like, the defendant’s property is not subject to the Declaration, but you will not know that, or be able to research that until the time of trial. Also, there are no pre-trial Motions. Even if the defendant states in his Answer that he knows he owes the money but disputes the amount, no Motion can be filed to dispose of the case. There will be a trial.

4. Judges. Magistrate Court Judges are not required by law in Georgia to be licensed attorneys. In the Metropolitan Atlanta area, all of the Magistrate Court Judges are licensed to practice law, and as in all Courts, some are more knowledgeable about contract and property law than others. However, it is not required by statute, and there are many sitting Magistrates in outlying counties who are not lawyers and may not understand obligations created by covenants running with the land at all.

5. Trial times. Most of the Metropolitan Atlanta Magistrate Courts have trials both in the daytime and at night. A calendar which starts at 7 p.m. can often run until 10 p.m. or later which may be inconvenient for attorneys and witnesses alike.

6. Attorneys’ Fees. Even though an Association may be entitled to Attorneys’ Fees by ‘contract’ and in the case of condominiums or POAA associations, by statute, Magistrate Court, intended as a forum for citizens’ easy access to Courts, is generally more reluctant than other courts to award fees.

Just because I have listed more “cons” than “pros” I absolutely do not mean to say that Magistrate Court is not a good option. Every Board should have a frank conversation with their legal counsel placing what weight they will on each of the considerations above and make a decision about what works best for their community!