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How to Sue for Theft of Services

Claudia Diaz - Business - March 10, 2023

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Theft of services is usually a type of crime where someone receives services without paying for them or giving something in return, even though they know they're supposed to. This can include a wide range of services, such as labor, design, and other professional services. If you are a business owner, freelancer, or provided services to a colleague or friend and didn’t get paid for performing, you are able to sue them in small claims court. In the article below, we provide examples of theft of services, steps you should take before suing for theft of services, and how to take someone to small claims court.  

Common Examples of Theft of Services 

Theft of services may be defined differently based on the laws of each state. For example, your state may define theft of services as obtaining service by deceit or threat or by diverting someone else’s services, like Wi-Fi, for your own benefit. In other states, it is defined as someone not paying for the work completed. 

In small claims court, theft of services generally looks like the examples below: 

  • Home repairs. You work as a general contractor and are hired to repair someone’s vacation home. When you finish performing the repairs, your client doesn’t pay you. 

  • Car repairs. You work as a mechanic in your own auto repair shop and perform repairs on a client’s car. However, when the work is completed, the client doesn’t pay you for your services. 

  • Professional services. Your architectural firm is hired to design a residential home, and once you are done performing the work, your client never pays you. 

  • Chargebacks. You provided a service to a client and they paid but then filed a chargeback with their bank.

What Are the Penalties for Theft of Services? 

Theft of services is usually a criminal offense in most states (depending on the amount they owe you for services, it may even be considered a felony). 

In addition to criminal charges, a person who commits this type of theft may also be civilly liable to you for your monetary loss. For example, someone owes you $500 for printing services you provided. In your state, this may be a misdemeanor, which means the person may need to pay a fine to the state or even serve jail time. Additionally, if you sue them in small claims court, and win, they would also need to pay you the $500 for your services

In some states, like Florida, there is also a civil theft charge which lets you sue in court to recover not only what you are owed but also additional damages. It may be worth looking into your state’s civil statutes to see if your claim falls under theft of services or some other type of civil claim. 

Should You Report Someone for Theft of Services?  

It is not always necessary to report the theft of services to law enforcement before filing a small claims lawsuit. Here are some factors to consider when deciding to report someone for theft of services: 

  • Reporting the theft to law enforcement can be helpful in establishing your case, as it provides a record of the incident and may help you to obtain evidence to support your claim.

  • Reporting the incident will likely require effort and time on your part to help law enforcement find the individual in question. 

  • Reporting the theft may help to deter that person from engaging in similar behavior in the future. 

  • Some law enforcement agencies won’t accept complaints for theft of services as they will tell you it is a civil issue and not a criminal issue. You would need to confirm with your local police department.

Steps to Take Before Suing for Theft of Services in Small Claims Court

Step 1. Save All Evidence 

If you end up filing a small claims lawsuit against someone for theft of services, you will need to provide evidence that shows you are entitled to recover money damages. Make sure to save all evidence related to the services you performed for a client or other individual.  

Here are some more examples of potential evidence: 

  • Contract or written agreement. If you provided services per some type of written agreement like a contract, make sure to save this.  

  • Invoices. This should include any invoices you provided your client or the person you rendered services for. That way, you can easily calculate how much they owe you for your work. 

  • Correspondence between you and the other person. This includes any text messages, emails, or phone call logs between you and your client.

  • Other documentation relating to the service you provided. For example, photos of home repairs.  

Step 2. Communicate Directly With the Other Person  

It may be worth communicating with your client or the person you rendered services to before taking legal action. By communicating directly, you may be able to resolve the dispute. There may be a reason your client has not paid you for the work you performed. For example, your client may not have paid for services if they were unsatisfied with the work performed. By speaking with them, you can clear up any misunderstandings and try to resolve the problem before it escalates.

At the end of the day, there are court costs associated with filing a small claims lawsuit. You will also have to wait longer to get paid if you sue in court as opposed to trying to resolve the problem directly without legal action. 

Step 3. Send a Demand Letter

If direct communication doesn’t resolve the problem, your next course of action should be to send a demand letter. In your demand letter, you can request payment and notify your client or the other party that if you don’t receive payment, you intend to sue them in small claims court. 
Here are some reasons to consider sending a demand letter: 

  • Depending on the state you are filing your small claims lawsuit in, you may be required to demand payment before filing. By sending a demand letter, you are satisfying this requirement. 

  • Sending a demand letter is relatively quick, free, and easy. This is because you don’t need to hire an attorney to send a demand letter; you can do it on your own. 

  • By sending a demand letter, you may be able to get paid without having to take legal action

We wrote a guide on how to send a demand letter for theft of services.

Step 4. Consider a Payment Plan or Collections if the Dispute is Against a Client 

We have noticed that a certain amount of theft of service claims are brought by business owners against their clients or customers. 

If this is your case, consider the following options to get paid: 

  • Offer a payment plan. It tends to be easier for people to pay in smaller installments rather than one larger lump sum. For example, if your client owes you $1,000 for landscaping services, consider offering them a payment plan. It may be worth discussing various types of payment plans with your client and seeing which one is most achievable for them. 

  • Send your client to collections. If you have tried communicating with your client, sending a demand for payment letter, and instituting a payment plan, but your client still has not paid for services you rendered, you may need to send them to a collections agency. A collections agency is a business that will call and send mail to a client that hasn't paid you back.

We wrote a guide to help business owners collect money owed from their clients. 

Step 5. Consider Consulting With a Lawyer

If you have any doubts or questions about your claim for theft of services, consider reaching out to a lawyer. You may be able to find a lawyer that is familiar with the law surrounding theft (either civil or criminal) that can discuss your case with you. 

Suing for Theft of Services in Small Claims Court

If, after trying the steps above, you still have not received payment for your services, it may be time to consider small claims court. You may be able to sue for theft of services in small claims court under a theory of breach of contract (if there was an oral or written contract between you and your client). Or you can simply sue someone for failure to pay you for services rendered (in case, there was no contract). 

Small claims court is a type of court where individuals and businesses can resolve disputes involving relatively small amounts of money in a fast, efficient, and cost-effective manner. 

How Much Can You Sue for in Small Claims Court? 

The amount you can sue for in small claims court is known as the “small claims limit.” This limit will vary by state or even by court. For the most part, the small claims limits range anywhere from $2,500 to $25,000

What happens if you are owed more than what you can sue for in small claims court? 

  • You can still sue for the maximum amount allowed, but you would be waiving any additional amount you are owed over that limit. For example, your client owes you $11,000 for home repairs, and you want to sue them in a small claims court in New York City. The small claims limit in NYC is $10,000, so you can sue for $10,000 and waive the remaining $1,000. 

  • You could sue them in a regular civil court instead. However, small claims courts are generally quicker, more affordable, and you don’t need to hire a lawyer to represent you.  

How Much Does it Cost to Sue Someone in Small Claims Court? 

This varies by state and sometimes even by court. For an accurate cost, check your local court's website. You can expect to pay between $15-$75 to file a small claims case in most courts.

Don’t let filing or serving costs prevent you from seeking justice in court. Some courts provide fee waivers, which, if you qualify, means you would pay $0 to file and serve your small claims lawsuit.

How Long Do You Have to Sue Someone in Small Claims Court for Theft of Services? 

States have set deadlines, called statutes of limitations, that let you know by when you should sue someone. These deadlines will vary by state and by type of claim. 

As stated above, if you are suing someone for not paying you after you performed services, you may be suing for breach of contract. When you look up the statute of limitations for your lawsuit against a client for theft of services, check what the breach of contract statute of limitations is in your state. Make sure to confirm if there is a different deadline for oral v. written contracts because some states differentiate between the two. 

How to Prepare for a Small Claims Hearing 

After you initiate your small claims lawsuit, you will need to prepare for your small claims hearing. This is where you and the person you are suing will go before the judge to try the case.

To prepare for your small claims court hearing:  

  • Research the law. It is recommended that you research any claims you want to bring to court. You want to make sure you understand the laws you are relying on to prove your case. This is also the stage where you may want to consult with an attorney if you are not completely sure about your claim for theft of services. 

  • Prepare your evidence. You want to have your evidence organized with titles, dates, and why that piece of evidence is important. All your evidence should be geared towards showing the judge why the other person owes you for the services you provided. People Clerk can help you organize your evidence into a judge-friendly packet

  • Prepare what to say. During the hearing, the judge will ask you why you are suing. For example, if you own a small landscaping business and you are suing a client for not paying for the services you provided them, you will want to prepare a presentation that explains this. You should also discuss how much your services cost, and your client’s outstanding invoices.

  • Print enough copies of all your evidence. You will need at least three copies; one for you, one for the judge, and one for the person you are suing.

Author

Claudia Diaz

Legal Educator @ People Clerk. Claudia holds a J.D. degree and is a certified mediator in New York and Florida. She has participated in dozens of small claims mediations in New York City courts.

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