By Nicholas J. Sideras
Imagine a prospective client comes to your office with the following issue. Sally does semi-professional landscaping work as a side-job from her main employment. Sally’s neighbor, Marcus, agreed to pay Sally $7,500 to landscape his backyard. Sally knew Marcus, a well-connected person, may give her some positive word of mouth with his friends for further projects, so she agreed. Sally and Marcus decided not to execute a written agreement for Sally to complete this work. Unfortunately, after Sally finished the job, Marcus only paid Sally $2,500. Sally wants to know her options.
The most obvious is to send a letter to Marcus on your office’s letterhead demanding payment for Sally. This is a low-cost solution for Sally, and it certainly may result in payment. But when Marcus rejects the demand, do you file a complaint in district court over the outstanding $5,000? The costs in taking such action may not make Sally whole when attorney fees are considered, assuming an hourly billable rate for the file. In a circumstance like this, you may want to consider conciliation court.
Conciliation court represents a valuable avenue for clients that sometimes is overlooked. In Minnesota, conciliation courts have broad jurisdiction over a substantial ambit of civil cases when the damages are $15,000 or less. This article walks through the conciliation court process and addresses the advantages and disadvantages that attorneys should consider when advising clients.
Conciliation court jurisdiction and procedure
In Minnesota, conciliation courts are a part of the district court.1 Conciliation courts have jurisdiction in cases where the claims do not exceed $15,000 ($4,000 for matters involving consumer credit transactions).2 But remember that the Legislature has carved out specific cases that conciliation courts cannot address; they include matters involving title over real estate, defamation, injunctive relief, evictions, and medical malpractice, among others.3
Conciliation court is an expedited process for civil cases. Rather than engaging in discovery or motion practice, after the filing of a statement of claim and summons, the court schedules the matter for a bench trial.4 In some counties, these cases are stacked onto a calendar for the same time with the expectation that most cases will either be resolved without court involvement or through default against one party.5
The contested proceedings before a conciliation court are less formal than district court proceedings.6 The conciliation court receives the evidence offered by the parties,7 as expected, and it may receive evidence, in its discretion and the interest of justice, that would otherwise be inadmissible under the rules of evidence.8 No transcript of these proceedings is made.9 A conciliation court then issues a judgment after the proceeding.10
A conciliation court’s judgment becomes final unless the aggrieved files a notice of removal to the district court.11 The process to remove a conciliation matter to the district court is similar to an appeal, and parties must act timely to preserve this right.12 An aggrieved party must: (1) serve their demand for removal, (2) file the original demand with the court administrator with proof of service, (3) file an affidavit with the court administrator that removal is in good faith and not to delay, and (4) pay the costs for removal.13
After successfully removing the matter to the district court, the matter is scheduled for a de novo trial.14 At this point, the Rules of Civil Procedure apply to the proceedings.15 A party may modify their pleadings from the conciliation court, if they choose, by serving a formal complaint on the opposing party.16 Either party may demand a jury trial after removal.17 A district court’s determination on the merits of the removed matter may then be appealed to the court of appeals.18
Benefits of the conciliation court process
The benefits of the conciliation process will depend on each client’s individual needs and goals in litigation. Three benefits will likely apply to most clients that choose to have their matter heard in conciliation court. First, clients will be able to realize substantial savings (financial and emotional) through the streamlined process in conciliation court. Second, the conciliation court, although informal, allows for a client’s matter to be examined by a judicial officer to render judgment.
Third, conciliation court can be an efficient process. Instead of clients waiting for resolving discovery matters and the like, a client’s case may be heard with a judgment entered shortly after filing the claim (months rather than a year).
Disadvantages of the conciliation court process
Even if a client may be entitled to bring their case in conciliation court, attorneys should be aware of potential disadvantages in this process. Initially, the conciliation court rules permit an attorney to represent a party at the judge’s discretion in a manner that the judge deems helpful.19 Representation by an attorney presumably will assist the conciliation court in addressing the matters and benefit the process overall. Although the rules permit a judge to not allow an attorney to represent their client in conciliation court proceedings, it seems unlikely that most judges would disallow representation without good cause. An attorney may want to consider submitting a letter to the conciliation court, verifying their authorization to represent their client before appearing for proceedings.
Another disadvantage of the conciliation court process is that the court will generally have limited information before it at the time the matter is scheduled for trial, so complicated factual or legal issues may be a challenge to address. That said, courts could ask for written submissions—especially if attorneys are involved—to help provide further explanation of facts and legal analyses to render a just decision.20 A final disadvantage to note is that conciliation court decisions could result in multiple subsequent proceedings by operation of removal to the district court and any subsequent appeal. Although matters commenced in district court could likewise result in an appeal, conciliation court builds another layer into that process.
A valuable tool in the litigator’s toolbox
Let’s return to Sally, whose case is excellent for conciliation court. She suffered a financial loss of $5,000 in a dispute with limited factual issues. A conciliation court would need to determine: Did a contract exist between Sally and Marcus, and if so, how much is Sally owed in damages? Sally would benefit from the expedited process, avoiding discovery and other costs common to litigation in the district court. So in considering cases that come your way, be mindful of conciliation court as a tool that may help your clients benefit from an informal proceeding that may provide effective relief for their legal issue.
NICHOLAS J. SIDERAS is an associate with Gregerson, Rosow, Johnson & Nilan, Ltd. in Minneapolis, working in litigation. He previously clerked at the Minnesota Court of Appeals with Judge Randall J. Slieter and in the Minnesota District Court with Judge Barbara R. Hanson.
Notes
In 1921, the Minnesota Legislature created conciliation courts as part of the municipal court system. 1921 Minn. Laws ch. 317, §§1-10, at 387-393. The conciliation courts eventually merged with the district courts. See 1982 Minn. Laws ch. 398, §8, at 227-28 (“Upon the effective date of a judicial district reorganization, the district court, except in the second and fourth districts, shall also exercise the powers, duties, and jurisdiction conferred upon courts by chapters 260, 484, 487, 491, 492, 493, and 525.”). Two counties that continued to operate a separate conciliation courts following merger with district courts were Hennepin and Ramsey. Minn. Stat. §§488.12-17, .29-.34 (1992). In 1993, the Minnesota Legislature adopted one body of law governing conciliation courts across Minnesota. 1993 Minn. Laws ch. 321, §§ 1-4, at 1945-51.
2 Minn. Stat. §491A.01, subd. 3a(a) (2020).
3 A full list of the limitations for conciliation courts can be found at Minn. Stat. §491A.01, subd. 4 (2020).
4 Minn. R. Gen. Prac. 508(a) (requiring a trial date to be more than 14 days after the mailing or service of the summons unless otherwise ordered by a judge).
5 See Minn. R. Gen. Prac. 512(e), (f), (g) (permitting conciliation courts to enter judgments based on the settlement of the parties, or dispose of matters in the absence of one of the parties). A conciliation court is also permitted to attempt to resolve the matter between the parties. Id. (e) (“The judge may attempt to conciliate disputes and encourage fair settlements among the parties.”).
6 See Minn. Stat. §491A.02, subd. 1 (2020) (“The determination of claims in conciliation court must be without jury trial and by a simple and informal procedure.”). When the Minnesota Legislature created conciliation courts in the 1920s, the statutes even noted that proceedings would be conducted without attorneys, unless the proceedings were removed to municipal court when an attorney could be involved in the action. Minn. Gen. Stat. §1378 (1923). The procedure allowed “[a]ny person having a claim within the jurisdiction of said municipal court may appear before said conciliation judge and here state his [or her] cause of action without pleading and without formality.” Minn. Gen. Stat. §1379 (1923).
7 Minn. R. Gen. Prac. 512(b). Of note, defendant may file counterclaims (compulsory or permissive) in response to the statement of claim filed by the plaintiff. Minn. R. Gen. Prac. 509(a). A counterclaim must be filed at least seven days before the trial, but a conciliation court may consider a late counterclaim within its discretion. Id. (b), (d).
8 Minn. R. Gen. Prac. 512(d).
9 See Minn. Stat. §491A.03, subd. 3 (2020) (“A court reporter may not take official notes of any trial or proceedings in conciliation court.”)
10 Minn. R. Gen. Prac. 512(e) (“If no agreement is reached, the judge shall hear, determine the cause, and order judgment.”). A conciliation court is not required to explain its rationale in issuing its decision. Id.; see Minn. R. Gen. Prac. 512 1993 comm. cmt. (“Rule 512(e) does not prohibit a court from providing the parties with a written explanation for the court’s decision. Explanations, regardless of their brevity, are strongly encouraged. Explanations provide litigants with some degree of assurance that their case received thorough consideration and may help avoid unnecessary appeal.”).
11 Minn. R. Gen. Prac. 515 (“The judgment so entered becomes finally effective 21 days after the transmission of the notice, unless:… (b) removal to the district court has been perfected….”).
12 See Maskalo v. Hilton, No. A19-2001, 2020 WL 4432641, at *1-2 (Minn. App. 8/3/2020) (unpublished) (rejecting a defective removal notice as untimely).
13 Minn. R. Gen. Prac. 521(b).
14 Id. (a).
15 Minn. R. Gen. Prac. 523.
16 Minn. R. Gen. Prac. 522.
17 Minn. R. Gen. Prac. 521(b), (c).
18 Minn. Stat. §491A.02, subd. 8 (2020).
19 Minn. R. Gen. Prac. 512(c); see also Thom v. Apple Valley Ford, Inc., No. A09-0992, 2010 WL 88859, at *3 (Minn. App. 1/12/2010) (recognizing the permissibility of counsel to represent a party in conciliation proceedings) (unpublished), review denied (Minn. 3/16/2010).
20 See Minn. Stat. §491A.01, subd. 2 (2020) (“The conciliation court has all powers, and may issue process as necessary or proper to carry out the purposes of this chapter.”)