Anita Baker's legal woes provide lessons for would-be litigants in small claims cases

Edited 5/9/18 to remove no-longer-functioning video link.

I heard this on the radio in the last couple of days: Singer Anita Baker is being sued by an attorney who says he stiffed her by not paying $69,000 in legal bills he incurred in fighting a suit brought by contractors who claimed Ms. Baker had failed to pay them $15,000 for painting they'd done at her home in the Detroit area.

This, I thought, was ideal fodder for a blog post. I have conversations with prospective clients almost every week about relatively small disputes. I always try to explain that smaller cases often take significant time to prepare and that fees could quickly become disproportionate to the amounts really at stake. But I've noticed that trying to explain this concept in general terms isn't always particularly effective. On the other hand, people pay attention to celebrities and stories about celebrities. This story, I thought, might provide a teaching moment.

Of course, the story wasn't quite as simple as the Chicago radio account made it out to be. I've tried to republish a Detroit TV story about the suit. Even if the video won't play on your device, however, I have this link to the TV story.

It appears that Ms. Baker has been involved in a number of suits with disgruntled -- and unpaid -- contractors of one sort or another, including lawyers.

Please understand: I'm not taking sides. Sometimes people try and take advantage of celebrities. Sometimes celebrities think their fame gives them license to engage in all sorts of anti-social behavior. I don't know, and don't pretend to know, whether Ms. Baker is justified in her refusals to pay.

Looking at the archives of the Detroit News on Lexis, I discovered that the present dispute arises from a 2010 suit filed by Ray A. Smith Painting and Decorating. According to Robert Snell's October 24, 2010 story, the painter alleged that Ms. Baker owed "$15,239.60 for work at her Grosse Pointe home last year, including painting the walls and ceiling of her son's bedroom, replacing a rotten doorsill, removing water-damaged plaster in her living room and other painting."

Ms. Baker did not respond to the suit. She was defaulted. Elisha Anderson's March 21, 2014 story in the Detroit News reported that a bench warrant had been issued for Baker's arrest on account of her failure to appear "at a creditor's examination" in September 2013. The painter's attorneys had pursued post-judgment proceedings trying to collect on the default judgment. In Illinois, we'd call this a Citation to Discover Assets hearing. The bottom line, though, was that -- three and a half years after filing suit -- the painters had not been paid. And this was long after they'd won their suit.

There are a number of lessons here for would-be litigants in small claim cases:

1. For Defendants -- If you are sued, the worst thing you can do is ignore the suit. If you had a basis on which to oppose the claim -- maybe the painters really did do a bad job -- when you allow the suit to go into default, you almost certainly give up your rights to assert that defense, or those defenses. In Illinois, at least, once 30 days have passed after the entry of a default judgment, your 'best' chance to open up the judgment is under §2-1401 of the Code of Civil Procedure. That will be difficult, if not impossible. And, either way, it will be expensive. You'd be far better off to meet the suit head on in a timely manner -- and, if you owe the money, you may be able to work out a payment plan or even a discount.
2. For Defendants -- If you haven't followed my good advice above, and have instead allowed the suit to go into default, and if the case was filed against you in Illinois, interest will accumulate on the judgment at 9% per year. By statute. Non-negotiable. And all the costs of post-judgment proceedings -- such as Citation proceedings -- will be tacked on.
3. For Plaintiffs -- It doesn't matter how 'good' your case is. It doesn't matter how quickly you 'win.' (A default judgment is a win.) It still can take years to get paid. You may never get paid: Ms. Baker presumably has the money to satisfy this judgment -- but the party you sue may not. You can't get blood from a stone -- and you have court costs to pay and perhaps your attorney. Sure, many attorneys take cases on a contingent fee basis -- meaning they don't get paid until you do -- but that typically happens in personal injury cases, where there is a presumably solvent insurer making business decisions on the other side. You might get an attorney to take your collection case on a contingent fee -- but, one way or the other, the attorney's fee is coming from your bottom line. Unless there's a statute or contract provision that allows for it, the other side is not going to have to pay your attorney's fees.

The attorney who is now suing Ms. Baker was engaged after the bench warrant was issued. The first thing he had to do was keep Ms. Baker out of jail. Robert Allen's story in the April 19 Detroit News reported that Ms. Baker's new attorney was also going to sue the painting contractor and attempt to set aside the default on the grounds that Ms. Baker didn't know the suit existed until long after the default was entered. (Failure to obtain service could be a valid basis on which to open up a judgment in Illinois even if §2-1401 grounds are not present. No court can act without acquiring jurisdiction over the defendant; a court obtains jurisdiction over a defendant in a civil case when the defendant is properly served.)

I don't know how Baker's suit fared, but the fees run up by her new attorney were not just for the defense of the painter's suit. (In fact, unless that judgment were opened up, there was nothing to defend in that case at all.) And the TV story suggests that the attorney had negotiated a broader representation agreement with Ms. Baker, signing on to represent her as necessary as a "vice president of operations." So the allegedly unpaid $69,000 fee may well have been reasonable.

But there's still a lesson here for would-be litigants: Beware of mission creep. You think you've hired a lawyer to represent you in a $15,000 collection case -- but, if you ask her to advise you on other matters, you will be (and should be) charged for these additional services. Don't hire an attorney without a clear view of what you want him to do. Do you want the lawyer to negotiate the best possible settlement on your behalf -- or do you want her to fight to the last ditch? One option is far more expensive than the other if you're paying an hourly rate.

People watch Judge Judy and Judge Mathis and other courtroom shows and get grand ideas about how quick, cheap and efficient the justice system is. When a lawyer tries to tell you that things don't work in real life like they do on television, please listen.