Small Claims Court for Artists

Intro­duc­tion

First, I have to state that I am not an attor­ney. Any­thing you read here is not to be con­sid­ered legal advice as I am only speak­ing from my own per­sonal expe­ri­ence. I can­not say that this arti­cle would even apply to other coun­tries, let alone indi­vid­ual states within the U.S. I hope that this arti­cle can pro­vide you with some ideas as to options you can take in case you ever encounter a sim­i­lar sit­u­a­tion of non-payment or refusal to pay.

I’ve been a mem­ber of var­i­ous art-related forums for over eight years now. I’ve seen other fel­low artists post on bul­letin boards and forums over and over again that they occa­sion­ally run into issues of non-payment from their clients. For the most part, if you’re an employee of a com­pany — you gen­er­ally don’t have much to worry about as the let­ter of the law is very strict when it comes to employ­ers. How­ever, if you are a free­lancer, con­trac­tor, or sole-proprietor, than this arti­cle may be of use to you as you are tech­ni­cally all on your own. I never expected this to hap­pen to me in all of the years work­ing, but unfor­tu­nately it did.

I feel that it is nec­es­sary for me to write about this inci­dent. Artists as a whole are very vul­ner­a­ble to injus­tice. A sim­ple com­par­i­son might be:

If you were to walk into an elec­tron­ics store such as Best Buy, grab a small tele­vi­sion, and walk out with­out pay­ing for it — you’d prob­a­bly get arrested. How­ever, if cre­ate an image for some­body and they accept it via email with­out pay­ing, do you think they would get arrested? Absolutely not.

This is just one small exam­ple of what artists have to face when it comes to the dig­i­tal age of instant com­mu­ni­ca­tion. We are not attor­neys, and we often look to each other in our forums in order to deter­mine what, if any, appro­pri­ate steps fel­low artists can take in-case we are clearly taken advan­tage of. Believe it or not, this hap­pens quite fre­quently — I sup­pose I’ve just been lucky up until now.

Back­ground

I recently encoun­tered my first sit­u­a­tion of a refusal to pay back in Jan­u­ary of 2010. This is the first time in over eight years of work­ing with some very large and at times, famous clients (The Fed­eral Reserve, Blue Cross Blue Shield, Pepsi, Coca Cola — so on and so forth) that I’ve ever encoun­tered this prob­lem. My con­tracts are fairly “iron-clad” and I thought nobody would ever try to argue it. I never expected this to hap­pen. I didn’t think another com­pany would con­duct them­selves so unpro­fes­sion­ally as to jeop­ar­dize their own busi­ness. I was com­pletely wrong and left dumb­founded by their actions.

I was con­tracted to cre­ate 3D ren­der­ings for Cof­fee Cart Biz (also doing busi­ness under the name of Advanced Fab­ri­ca­tion.) The intent was for them to sell their cof­fee shop man­u­fac­tur­ing and instruc­tional ser­vices to their clients by par­tially using my art­work to show clients a “vision” of their prod­ucts before it was actu­ally built. As per writ­ten and signed con­tract, I met my oblig­a­tions to them and actu­ally went over and beyond my oblig­a­tions to try to help them out — an esti­mated two weeks of free work to be exact. As their demands for changes became abu­sive, I informed them that they went over the con­tract allowance and that I would cease work until I received pay­ment for the work com­pleted. The owner of Cof­fee Cart Biz, Tim wrote back demand­ing even fur­ther changes. He offered up an unac­cept­able $100 for an extra days worth of work (which he incor­rectly assumed to only take two hours — per­haps in his own lit­tle world but he’s not a 3D artist…):

“Make the changes and get paid or don’t and con­tinue to send unpro­fes­sional e-mails and you will not be paid because the project is not com­plete. As of right now with your last e-mail two things are cer­tain, you will not get paid with­out these cor­rec­tions and you lost a cus­tomer with a pipeline of upcom­ing busi­ness with no inten­tion from you of mak­ing things right.”

I real­ized at this point that this client was being unrea­son­able and there was a high prob­a­bil­ity that I wasn’t going to receive pay­ment. I wasn’t about to be “bul­lied” or “threat­ened” into per­form­ing addi­tional free work for this com­pany. I had my lim­its as well as oblig­a­tions to other clients to meet. So, that was the sit­u­a­tion sur­round­ing my case. I could get into all the mechan­ics of my con­tract and our emails, but for the sake of brevity I’ll spare the reader all of the details (5 pages of con­tract and legalese to be precise.)

Anal­ogy

I’d like to bring up an anal­ogy here:

Let’s say you are a pro­fes­sional painter that works on home exte­ri­ors. Some­one approaches you and asks for you to paint their home a cer­tain color. You agree on a price and time and set about paint­ing their house. A week later, the owner takes a look at the home and decides he doesn’t like the color. He men­tions that he has addi­tional work for you later on, but wants the color changed for now. So out of cour­tesy, you paint the house all over again the new col­ors he selected. Now he comes back and starts demand­ing changes three more times — com­plain­ing about the reflec­tions, the gloss, the tint when dried, etc.At a cer­tain point, you stop and say, “woah, wait a minute. This is tak­ing a lot of unrea­son­able time now. I need to get paid because this has gone way over our time or we can rework our agreement.”

Now how many times do you think is enough? Most painters wouldn’t even change the first round for free. On the other hand, I offered two rounds of changes out of cour­tesy before­hand. But to be asked five times in total and threat­ened to be with­held pay­ment is com­pletely unacceptable.

Mind you, all of these requests are doc­u­mented in archived emails (30+ pages — aver­age of 2 emails per page to be exact) and proven by the test ren­der­ings I produced.

Actions to Take

With all the facts and emails in place, I had a few options:

1. Write an email or place a phone call and explain what you intend to do as a result of their refusal. Point to your con­tract. This may include hir­ing attor­neys (expen­sive), fil­ing to a small claims court (inex­pen­sive), or send­ing their infor­ma­tion off to a col­lec­tion agency (roughly 1/3rd of the amount owed.) You may also write about what tran­spired, but you have to be hon­est and you have to real­ize any poten­tial legal prob­lems you may run into. Free­dom of speech is cov­ered under the US Con­sti­tu­tion but be wary at which tone you con­vey your mes­sage. You hope at this point your mes­sage gets across and that you and your client would come to some sort of agree­ment to pre­vent this from tran­spir­ing. If this works out, then this is the best sce­nario. The client walks away and pays you the amount owed or at least (at the very min­i­mum) par­tial pay­ment for the ser­vices ren­dered. Both com­pa­nies cease com­mu­ni­ca­tions after this point.
2. File in small claims court. This is one of the most inex­pen­sive options for com­ing to a res­o­lu­tion if the first method doesn’t work. Keep in mind that there are lim­its which vary from state to state. In Mass­a­chu­setts, the lim­its for small claims court judg­ments is $2,000 max­i­mum except under cer­tain spe­cific con­di­tions. In Cal­i­for­nia, the last I checked it was $5,000 max­i­mum. Fil­ing costs in Mass­a­chu­setts is $40 for under $500, and $50 for $500-$2,000. You need to just show up to the court’s small claim office and fill out a piece of paper with your name and address as well as that of the defen­dants. You write the office a check, and within 10 days they deliver a cer­ti­fied let­ter to the defen­dants doorstep.
3. After fil­ing in small claims, then try to medi­ate by attempt­ing to use your fil­ing as lever­age to make your case.
4. File in a higher court. Chances are that you will need to hire an attor­ney which is going to be fairly expen­sive ($400/hour.) You may be able to get an attor­ney that works on con­tin­gency or on a pro bono basis, but that is rather unlikely. It’s only really worth it if the amount and dam­ages owed exceed a sub­stan­tial sum of money. Any addi­tional fees incurred by the attor­neys (assum­ing that you win) can be made bill­able to the defen­dant. Obvi­ously, in the case of some­thing that’s only worth $1,000-$2,000 (even up to $5,000), then hir­ing an attor­ney is prob­a­bly not justified.
5. Hire a col­lec­tions agency. Obvi­ously, there’s prob­a­bly a chance that if it got this far in the first place, then you would never ever want to work for that type of per­son or com­pany again. You could hire a col­lec­tions agency off of the web to basi­cally hunt down the money owed. They do this type of work for a liv­ing. They’re cold and hard peo­ple that know how to argue their way to get the desired results. This also comes at a cost or roughly 30% for some places. You have to weigh the pos­i­tive and neg­a­tives. Is spend­ing 30% bet­ter than receiv­ing noth­ing at all?

I imme­di­ately picked up the phone and tried call­ing. No response. I also shot over an email out­lin­ing some of my inten­tions with the hopes of com­ing to a con­clu­sion. It prob­a­bly wasn’t the best phrased — I was rather upset at the time. But that still doesn’t change any facts. He replied:

If I see an attach­ment I will open up your next e-mail, oth­er­wise I will save them in your folder with­out read­ing for an attor­ney to review.

Again, he is try­ing the bul­ly­ing tac­tic. He wants an addi­tional round of changes on top of the free ones already pro­vided. It was becom­ing increas­ingly obvi­ous that he wasn’t will­ing to medi­ate, but at least I tried.

I even­tual talked with four dif­fer­ent attor­neys. One was a friend and she helped me out with a lit­tle bit of email cor­re­spon­dence. We hadn’t talked in a long time, and I didn’t want to take bother her much with the details. She kindly some of the meth­ods of approach­ing the court in small claims. The other three attor­neys hap­pened after my fil­ing, and I’ll dis­cuss that in a lit­tle bit.

The next step was to file for small claims. After fil­ing, I fol­lowed it up by writ­ing him again and CCing his employee (from a dif­fer­ent email address so that it didn’t get trashed) with an email stat­ing what I had done. I was giv­ing him one last oppor­tu­nity to medi­ate before trial. As typ­i­cal, there was no response.

Assem­bling the Offense

Dur­ing the next few days, I spent time to col­lect all of the emails and writ­ten cor­re­spon­dences we had. I estab­lished a time-frame in which the events had folded as well as mak­ing sure to doc­u­ment all the prior requests for changes. I also printed out all of the art­work which I had done includ­ing their stages (close to 25 pieces in total.) I also out­lined the incon­ve­nience he caused in order to receive dam­ages for time lost. The more evi­dence I had, the bet­ter my case. Unfor­tu­nately with small claims, it is a very quick process so you have to con­dense all the major points in your argu­ment down to a few pages. Don’t expect the judge to read 30 pages of email, but it is best to have them handy just in case.

Catch­ing Them Red-Handed — Copy­right Infringement

The court appear­ance was to hap­pen a month later to this very day of writ­ing. In the mean­time, I decided to visit their web­site to see if they had posted any of my images. They did.

Now, you can’t just take someone’s art­work and post it to your web­site with­out pay­ing — that’s actu­ally copy­right infringe­ment — a form of theft. In most typ­i­cal sit­u­a­tions with a good client, I wouldn’t have minded at all if they did that. But the sit­u­a­tion was far from typ­i­cal. It also inval­i­dates any claim that the defen­dant might have in stat­ing that he “didn’t like” or “didn’t approve of the results.”

I took a screen­shot and also had one of my friends take one as backup evi­dence in case that came into question.

The copy­right infringe­ment, while-related, is a com­pletely sep­a­rate offense. It’s one thing to have some­one not pay you. It’s totally another to have some­one steal from you on top of it all.

It doesn’t only have to be post­ing your work with­out per­mis­sion — if the client uses your image in the interim to help “sell” his idea on a $50 mil­lion dol­lar build­ing (and in some cases sev­eral bil­lion) with­out pay­ing, you should and would right­fully be enti­tled to a por­tion of those damages.

As time was of the essence, I marched straight down to an attor­ney around the cor­ner from me. I wanted my screen cap­ture of his web­site to be nota­rized.  I described my sit­u­a­tion and he said that as I had the screen­shot, then the nota­riza­tion wasn’t nec­es­sary (I think this is debat­able.) He also put me in touch with his brother out in Cal­i­for­nia who hap­pened to spe­cial­ize in copy­right infringe­ment and trade­mark issues.

I headed home and in another email using a dif­fer­ent email address, I sent a short let­ter off to the defen­dant inform­ing them of their infringement.

The Copy­right Attorneys

Almost two weeks later, my image was pulled down from their web­site. I got into touch with two attor­neys that spe­cial­ized in copy­right issues. One worked on a pro bono basis. He basi­cally said that copy­right dam­ages are awarded based on how much dam­age the court thinks the offender has done. In this case, the cost of my images were deemed min­i­mal. The attor­ney said that unless it was a very large client, that it prob­a­bly wasn’t worth his while as he would nor­mally bill out $400/hour for his ser­vices and that the image itself cost far less than that. If they also agreed to pull down the image in a short amount of time, then any reward for dam­ages would be small. He rec­om­mended small claims court.

The sec­ond attor­ney who was the brother of the very first guy I met more or less said the same thing. He rec­om­mended small claims as well. His first step in this sit­u­a­tion would have been to ask for the image to be removed from their web­site which they had already done. I brought up the other case of non-payment to him, and he said that it prob­a­bly wasn’t worth any attorney’s time as the costs would exceed the benefits.

In our con­ver­sa­tion, I brought up the point that I didn’t think this was going to send any mes­sage regard­less. Even if the defen­dant ends up pay­ing max­i­mum dam­ages in the court, it’s such a small amount that this wouldn’t even prob­a­bly give him pause for fur­ther reflec­tion. The attor­ney brought up a few more addi­tional points.

Going Beyond Small Claims Court

If you are rewarded the judg­ment, there’s a few more options you have at your dis­posal. The court will make their rul­ing pub­lic in asso­ci­a­tion with the docket num­ber you were orig­i­nally pro­vided. At this point, you should be able to (again, I am not an attor­ney so fol­low this writ­ing at your own risk — these are not recommendations…):

1. Sub­mit the rul­ing to the Bet­ter Busi­ness Bureau of the state the defen­dant resides in. The BBB doesn’t want to get involved in finan­cial dis­putes between two par­ties, how­ever if you have a rul­ing than all is said and done.
2. Con­tact the Sec­re­tary of State that the defen­dant resides in and present your ruling.
3. Inform the bank offi­cers of the rul­ing. This infor­ma­tion can be trick­ier to find out, and may require a court request for a writ of exe­cu­tion to be served up by a constable.
4. Con­tact one of the three major credit report­ing bureaus — Exper­ian, Tran­sunion, and Equifax. A mark on someone’s record should make things such as obtain­ing loans and even con­duct­ing busi­ness a bit more dif­fi­cult. Infor­ma­tion can be found through­out the Inter­net about this process. Here is one link that par­tially explains this option.
5. You can write about the inci­dent. Be truth­ful. This falls under the First Amend­ment — Free­dom of Speech. Be very cau­tious to make sure this doesn’t fall under the grounds of libel and defama­tion although that is often very dif­fi­cult to prove. The def­i­n­i­tion varies from coun­try to coun­try and state to state.

My Day in Court

I was to appear almost a month later from the time of fil­ing in front of the judge. This was sched­uled for 8:30 in the morn­ing. It’s best to show up early. This is one date you do not want to miss. If you do miss it, the defen­dant can be awarded the case and vice-versa. In my sit­u­a­tion, the defen­dant was located in Cal­i­for­nia. Spe­cial rules apply as they are con­sid­ered to be “out of state.” A let­ter had been deliv­ered to his doorsteps with the option to make a writ­ten state­ment if he couldn’t attend the hearing.

He had writ­ten a reply, and I was sent a copy of his 3-page let­ter to the court. Ear­lier, I had taken the time to dis­sect his writ­ing, and effec­tively counter every one of his claims with either my emails or my con­tract. So I had been pre­pared to counter every one of his arguments.

I showed up early in the morn­ing, dressed in a suit and tie with all of my mate­ri­als, port­fo­lio (if asked), and let­ters of rec­om­men­da­tion by my side. I passed through a metal detec­tor and was then shuf­fled through a gen­eral court room with oth­ers before a clerk.

At the sched­uled time, the clerk starts to read off names. You reply by stat­ing that you are “present” when your case comes up. Prob­a­bly more than half of the names are “defaulted” due to some­one (or even both par­ties) not show­ing up — either one party is awarded in this sit­u­a­tion, or the case is thrown out. The name call­ing moves rather fast and the court room quickly thins out.

When my name came up, I said “present.” The clerk told me that the case was defaulted to me, and that I was allowed to leave. How­ever, the clerk had made a mis­take. I hap­pened to leave and go down­stairs and men­tioned this to some peo­ple work­ing in the office that this was out of state and that the defen­dant had writ­ten a let­ter in his absence. I was told to go back upstairs and also present any addi­tional infor­ma­tion that I had.

So I went back into the gen­eral court­room and waited as the rest of the names were read off. At the end, the clerk stands to one side of the room, and any­one with ques­tions can approach her. I stood aside and men­tioned that the defen­dant wrote a let­ter in his absence as he was located out in Cal­i­for­nia. She admit­ted to mak­ing a mis­take of announc­ing the default and took the paper­work off of me. She said the court would prob­a­bly get back to me within 10 days.

I thought this was over with so I headed back down­stairs to fin­ish fill­ing out the sep­a­rate com­plaint, this time for copy­right infringe­ment. About 5-minutes later, I unex­pect­edly heard my name men­tioned over the inter­com and I was told to appear in a sep­a­rate court room. I scram­bled to get back up there. Good thing I didn’t leave because it appears that even the court sys­tem doesn’t even have their act always together. That was twice in one morn­ing that I was told erro­neous infor­ma­tion as to what to do.

I showed up in front of the judge in what seemed to be an infor­mal set­ting. The best way to describe this was a “cram ses­sion.” The judge quickly asked a series of force­ful ques­tions and you have to be pre­pared to answer them with facts back­ing your­self up. I kept point­ing to all of the paper­work he was handed, and he seemed to want to ignore it. In his own words, he quickly (and when I say quick, prob­a­bly less than 5 min­utes) came to a deci­sion that the defen­dant was lying. He was ready to come to a judg­ment in my favor. Where my pro­ceed­ing got held up was in the details — the judge was try­ing to deter­mine if I was enti­tled to any extra dam­ages for time lost. He asked if I had any­thing else to say, and I pointed to the papers once again and said that “it’s all in the paper­work.” The judge looked up at me and replied, “well, it looks like I have some read­ing to do.” And that was that.

I’m con­fi­dent that I received a pos­i­tive judg­ment for the work I had done. As to any extra dam­ages, I will have to wait about another week before I find out.

The Follow-up

Assum­ing that noth­ing “short of freak­ish” occurs in the interim, I will receive judg­ment in my favor. As to any extra dam­ages — that is a com­plete guess at this point. I can’t get inside a judge’s head. At the very least, I should recover pay­ment for the work done as well as my fil­ing fees.

As to whether or not the defen­dant actu­ally decides to pay or pay promptly is also a best guess. The chances are a lit­tle bit bet­ter as he is a busi­ness owner. I could have addi­tion­ally obtained (for an addi­tional fee) what the courts call a writ of exe­cu­tion to help make cer­tain that the defen­dant would follow-up on the judg­ment by hold­ing some of his assets in check (mind you, this is not a lien on a home — that is costly and usu­ally requires an attor­ney.) As soon as I receive the final res­o­lu­tion from the court, I will approach the defen­dant one more time and make it known that I will fol­low through on items 1–4 of two sec­tions above, enti­tled “Going Beyond Small Claims Court.” I will also be cer­tain to bring up the topic of copy­right infringe­ment as well. If that final email fails to sat­isfy the judg­ment in a timely fash­ion, then I may turn the rul­ing over to a col­lec­tions agency.

Mov­ing Forward

I’ve been taught a few impor­tant lessons here:

1. First and fore­most, if a poten­tial client is going to be “cheap” with the work requested, then there’s a good chance you don’t want to work with them. If you can avoid it, great.
2. Do not hand over your images with­out water­marks on them. You can blend the opac­ity or screen enough so that the details are still vis­i­ble. Only remove the water­mark upon receipt of pay­ment. It will also make your busi­ness oper­a­tions run a lot more smoothly overall.
3. Make cer­tain your con­tracts are very well thought out. If you don’t have one, try to find artist con­tracts online. You could prob­a­bly cob­ble one together to meet most sit­u­a­tions. Take the time and make cer­tain that it tries to cover all situations.
4. Don’t agree to make changes (aside from your own errors) with­out charg­ing. You can ulti­mately use your own dis­cre­tion in this mat­ter (I really don’t rec­om­mend this unless it takes a few min­utes of your time), but as the say­ing goes — “you give an inch and they take a mile.” It’s in your best inter­est to be upfront with your client. You can either build charges for changes into your quote (not rec­om­mended), or item­ize the costs on an hourly basis afterwards.