Relates to the consideration of equitable claims and defenses in small claims actions

1 Co-sponsor

• Ruth Hassell-Thompson

BILL NUMBER:S6655A

Title of bill

An act to amend the New York city civil court act, the uniform district court act, and the uniform city court act, in relation to the consideration of equitable claims and defenses in small claims actions

This is one in a series of measures being introduced at the request of the Chief Administrative Judge upon the recommendation of her Local Courts Advisory Committee.

This measure amends the New York City Civil Court Act, the Uniform District Court Act, and the Uniform City Court Act to authorize the court to consider equitable claims and defenses in small claims actions.

A small claim is a cause of action for money not in excess of $5,000, in the New York City Civil Court, the District Courts and the City Courts.

In deciding a small claim, the court is required to do "substantial justice between the parties according to the rules of substantive law." See NYCCCA §1804; UDCA § 1804; UCCA § 1804 (requiring the court to enforce the duties and obligations created by the law without requiring the claimant to comply with the technical rules for establishing his or her right to their enforcement). Under this mandate, the court must play a more proactive role in the litigation so as to ensure that small claims are resolved in accord with the law. Accordingly, a small claims court has wide discretion in issuing a judgment that does substantial justice between the parties. See Buonomo v. Stalker, 40 A.D.2d 733, 733 (4th Dept. 1972); Roundtree v. Singh, 143 A.D.2d 995,996 (2d Dept. 1988); Miller v. Sanchez, 6 Misc.3d 479,482 (N.Y.C. Civ. Ct. 2004). The mandate to do substantial justice, however, does not confer upon the small claims court the authority to grant equitable relief. See Cucinotta v. Hanulak, 231 A.D.2d 904, 905 (2d Dept. 1996); TR Construction v. Fischer, 2010 WL 979702, *2 (Watertown City Ct. 2010); Scott v. Dale Carpet Cleaning Inc., 120 Misc.2d 118, 119 (N.Y.C. Civ. Ct. 1983).

The problem is that while equitable relief in the form of specific performance, injunction, or declaratory judgment would be inappropriate in a small claims context given the nature of such claims, the blanket prohibition against doing equity in a small claims action precludes the use of equitable principles of justice, such as the doctrines of unjust enrichment, quantum meruit, laches, and equitable estoppel. Authorizing a small claims court to consider those principles would aid a small claims court in the performance of

its mandate to do substantial justice between the small claims litigants with respect to a claim for money.

This measure would not affect small claims proceedings in the Town and Village Justice Courts.

This measure would have no fiscal impact upon the State. It would take effect on the first day of January next succeeding the date on which it shall have become a law.

Legislative history

OCA 2012-69 Senate 6655 (Sen. Bonacic) (ref to Jud)