In the Oregon REALTORS® Purchase and Sale Agreements, the dispute resolution provision has a very distinct process: (1) if there’s a dispute, take it to small claims court. (2) If small claims court can’t deal with the issue, begin a Mediation with Arbitration Services of Portland (ASP). (3) If the mediation is not successful, begin a binding Arbitration with ASP.
The small claims court step is oftentimes a bit of a mystery; this tip will hopefully remove some of the mists.
Small claims court is a way of resolving disputes in front of a judge. Each County will generally have their own small claims court and some of those courts will have a pre-trial mediation program administered through the court. If the issue is just about money [not about specific performance or about forcing someone to do repairs, etc.], and the issue is worth $10,000 or less, the small claims court judge can hear the issue. This means, if the issue is worth $10,001+ or is about various equitable issues, you must take it straight to ASP Mediation.
The small claims process is relatively simple: the complainant files a notice of small claim form and explains the issue and itemized cost of the repair/issue. The claim gets filed where the defendant [the not-injured person] lives, or where the injury occurred [the county the Property is in], or in the county where a person was supposed to perform an action. The complainant has to notify the defendant, either by doing formal service, or by certified mail. Once that notice is given, complainant has 63 days to file the proof of service [certificate of service or acceptance of service], otherwise the case will be dismissed [the court assumes you didn’t give the required notice]. If the defendant denies the claim in the notice of small claims within 14 days after service, a hearing will be scheduled. If defendant doesn’t respond, the complainant can simply ask the judge for a default judgement within 35 days from the date proof of service was filed; this means there are no arguments, no discussions, the complainant simply wins the case.
Small claims court hearings are oftentimes informal, and parties don’t have attorneys present unless the court approves it. The parties will discuss the case and present testimony and evidence to a judge. At the end of the trial, the judge will make a decision and enter judgment. There is no appeal from this decision. The winning party can take this judgement and make demand letters that tell the debtor that they have 10-30 days to pay off the amount due, otherwise further lawsuits can be brought to garnish and recover the money.