How to Calculate Damages in District Court Cases
The most important information you need to know is that the person who claims damages must prove the amount of damages.
First you must prove that you have been harmed. Then you must prove how much you have been harmed. The judge will expect you to have a clear explanation of how you arrived at the amount of damages you are requesting.
Here are some tips on how to calculate the amount of damages.
Tip #1 – If you are not sure, estimate the damages on the high side. Remember that you must have some sort of proof for how you calculated the damage amount that you claim. If you need to make an estimate at the time that you file the complaint, however, estimate a bit high. The judge cannot award you more money than the amount than you request but they can award you less.
Tip # 2 – Be reasonable. Do not estimate damages too high. Again remember that you will need to show how you calculated the amount. If you estimate too high, the other side may be less likely to negotiate or settle. Requesting a high amount of damages may cause the other side to become too angry with you to work out an arrangement in advance (and a settlement agreement may be the best solution). Also, the judge has seen many more of these cases than you have. If your damage claim is outrageously high, the judge may find it harder to believe the other parts of your case, especially where the judge needs to rely on your opinion.
Tips # 3 - The monetary limits in District Court do not include interest, costs, or attorneys fees. The maximum amount that can be claimed in small claims court is $5,000, also not including interest, attorneys’ fees, or court costs. The maximum amount you can sue for in District Court is $30,000, not including interest, attorneys’ fees, or court costs. Review the difference between small and large claims here. If the amount of damages is close to the small claims limit, you may decide to reduce the amount in order to have your claim heard in the more informal small claims court.
Tip # 4 – Calculate the interest owed on a loan debt.
If you have a loan agreement, the first place to look is at the actual agreement. Some agreements include an interest rate that is due as part of the regular payments on the loan. If your agreement notes an amount of interest, calculate the money owed to you by looking at what is past due. You cannot claim money that is not yet past due, however, some loans have a special section that says if any one payment is missed, the entire amount of the loan is due. If this clause is in your agreement, you can claim the entire amount that is left on the loan.
Many agreements do not include an interest amount. If your agreement simply says that the other side will pay you back the amount that you lent, you are not entitled to claim interest. Read the Law: Maryland Code, Court and Judicial Proceedings, Section 11-106
Any “prejudgment” interest will be listed separately in the decision issued by the judge. Read the Rule: Maryland Rule 3-604(a)
For interest owed after a court judgment, the judge has the authority to order that the losing party pay interest on the amount of the damages. This interest is calculated from the date of the judgment until the amount of the judgment is paid. The maximum amount allowed is 10% per year, except for a judgment on residential rent, which is 6% per year. Read the Law: Maryland Code, Court and Judicial Proceedings, Section 11-107
The damages include the principal owed plus the prejudgment interest (if any).
However, if the loan maturity date has not yet been reached, the interest rate from the loan contract will continue to apply until the maturity date is reached. For example, Joe loaned Mary $4,500 for two years with an interest rate of 7%. When Mary stopped paying on the loan after one and a half years, Joe sued her in small claims court. Joe won but the loan still had 6 months to go. Mary is entitled to have the 7% interest rate applied to her judgment damages for the 6 months. After that, the 10% interest rate will apply.
Tip # 5 – Always include all of your court costs. Since bringing the case to court costs you money, you should ask the judge to include the court costs as part of the judgment against the other side.
- You can claim the cost of filing the complaint, the cost of serving the other side, and sometimes the costs of obtaining certain documents to prove your case.
- You generally cannot claim costs such as the pay you lost by taking off time from work, mileage to get to the courthouse or parking fees, photocopying materials, child care costs, etc.
Tip # 6 – Claim contract damages and consider “mitigating” damages. The terms of the contract usually lay out the amounts that you will need to consider in making a damage claim. Both sides should review the terms carefully and then decide what the real damages were.
- Example 1: You signed a contract and agreed to replace the tile in a bathroom for $1,200 including the cost of the tiles. You purchased and delivered the tiles, which cost $475, to the house and then did not have time to put the tiles up and complete the job. The homeowner sues you for $1,200. You respond that the damage suffered by the homeowner was not really $1,200 but instead $725 for the labor. The homeowner already has the tiles that were part of the contract.
- Example 2: You signed a contract and agreed to replace the tile in a bathroom for $1,200 including the cost of the tiles. You purchased the tiles and then the homeowner called you to cancel. You are clearly harmed for the cost of the tiles, the labor to pick them up/return them and any restocking fee. If you were unable to find other work for the 2 days that you had set aside to do this job, then you will want to sue for the entire amount.
You also might be able to “mitigate the damages.” This means that you have an obligation to do your best to minimize the harm to you. In this case, if you were able to find other work for those two days, then you had an obligation to take the work. The judge is likely to ask you about this. If you used the same two days to build a fence next door to the homeowner who canceled, she could show the judge that you did not lose two days of work because of her cancellation. Therefore the judge may decide that you will not be awarded the entire amount for the lost job. The judge is likely only to award the amount for the tiles and the labor involved in purchasing and returning the tiles.