The purpose was that more modest claims should proceed by a simplified procedure that still provided ample due process but reduced the high costs and delays traditionally associated with civil proceedings. Enacted in 1996, for a four-year trial period, it is now a permanent part of the Rules, even though substantially amended in January 1, 2002, introducing important changes, like an increase in the monetary amount of claims from $25,000 to $50,000, and now recently again for January 1, 2010, increasing the monetary amount of claims from $50,000 to $100,000.
Major features of the rule are:
- It is mandatory for all actions for money or property worth $100,000 or less, exclusive of interest and costs;
- The plaintiff can proceed under simplified procedure in actions for more than $100,000, provided the defendant does not object. If objected, plaintiff may still proceed if claims that are not within the $100,000 requirement are abandoned;
- No oral and written examinations for discovery, cross-examination of a deponent on an affidavit filed on a motion or the examination of a witness on a pending motion are permitted in actions under the simplified procedure;
- Affidavits of documents for actions under the simplified procedure must include a list of names and addresses of persons who might reasonably be expected to have knowledge of the matters in issue in the action;
- Allows the parties to choose between an ordinary trial or a summary trial. If the parties cannot agree, the pre-trial conference judge or master shall decide which mode of trial is appropriate, and so on;
- It is not applicable to actions under the Class Proceedings Act, the Construction Lien Act, family law proceedings, or to civil case management cases.
The simplified procedure is mandatory in certain circumstances in all other civil proceedings, and optional in others, subject to the defendant objecting. There is no room for the defendant to object if the claim is for money only in the amount of $100,000 or less. The defendant can object that the claim is for more money than $100,000, or that the fair market value of the property, which is at issue in the claim, is greater than $100,000. If it is ultimately determined that the property had a fair market value of $100,000 or less at the time the action was commenced, the defendant will be required to pay, on a substantial indemnity basis, the costs incurred by the plaintiff. Such costs consequences are intended to encourage defendants to allow the action to proceed under simplified rules in appropriate cases. The plaintiff bears the burden of proving that the value of the real or personal property in question is $100,000 or less.
If, however, the plaintiff makes a claim in excess of the monetary limit set out in that rule, the defendant may object to proceeding under the simplified procedure in the statement of defence.
Simplified procedure is followed when there are multiple plaintiffs and each plaintiff’s claim, considered separately, meets the $100,000 or less requirement. If the defendant objects to a case involving multiple plaintiffs proceeding under the simplified procedure that one of the plaintiffs’ claims is for more than $100,000, the action will proceed by the ordinary procedure, unless this plaintiff abandons the claim or part of the claim that does not comply. Anyway, it seems likely that the court would exercise its discretion under those rules to “order otherwise” if the claims arose out of the same set of facts and thus should have been tried together.
Counterclaims, crossclaims and third party claims under the simplified procedure
When an action is commenced under the simplified procedure and the defendant makes a counterclaim, crossclaim or third party claim, known as a subsidiary claim, the proceeding remains under the simplified procedure. There are, however, two situations in which the main action commenced under rule 76 and the counterclaim, crossclaim and third party claim will have to proceed under the ordinary procedure due to non-compliance of the rules.
Getting in or out of the simplified procedure
Parties are allowed to move from the ordinary procedure to the simplified procedure by filing the consent of all parties or amending their claims so that they fall within the $100,000 limit. Thereafter, the plaintiff has to deliver a notice stating that the action and any related proceedings are continued under rule 76.
It is also possible to move from the simplified procedure to the ordinary procedure by amending the claims to exceed the $100,000 threshold. When an action under the simplified procedure comes under the ordinary procedure because of an amendment to the pleadings, the plaintiff has to deliver a notice stating that the action and any related proceedings are continued under the ordinary procedure.
The amending party has to pay (and will be liable for the costs of the opposing party) to bring an action from the ordinary to the simplified procedure, a provision intended to discourage a party from choosing to proceed under the ordinary procedure, in order to have the benefit of examination for discovery; and then amending the pleading to bring the action within the simplified procedure.
Under the simplified procedure, cost reduction is achieved by not allowing examinations for discovery (oral or written) and cross-examinations. Nor is there any provision for leave (seeking permission) of the court or consent of the parties.
Under the simplified procedure, the parties to an action are required within 60 days after the filing of the first defence or notice of intent to defend, to consider if all documents relating to any matter at issue have been disclosed; and settlement of any or all of the issues is possible. Owing to this requirement, parties are forced to consider settlement carefully and at an early stage in every case.
Setting a defended action down for trial
To set an action under the simplified procedure down for trial, the party has to serve a notice of readiness for pre-trial conference on every party to the action and to any subsidiary claim, and forthwith filing the notice with proof of service at the court office. This is to be done within 90 days of the filing of the first defence or notice of intent to defend and that the party who sets an action down, certify in the notice of readiness for pre-trial conference that there was a settlement discussion.
Contact the lawyers at Levy Zavet PC to discuss proceeding quickly and swifly with your claims under $100,000; a process that will effectively result in quicker turnaround and lower costs!
Want to discuss a third party claim in North Carolina? You might want to speak to someone like Hardison & Cochran who can fully assess your case and determine whether a valid third-party claim exists.