I Lost My Small Claims Court Case:

I Lost My Small Claims Court Case:

Rental Property Investor · Campbell, CA · Member since 2017 · 419 posts · 499 votes

I wanted to briefly share my experience with a COVID related cancellation I had.  

I had a guest cancel their reservation made through VRBO a few weeks prior to check-in due to COVID.  I have a 60 day cancellation policy and an iron-clad rental agreement which my lawyer put together.  It specifically and unequivocally states that I am not responsible for COVID related cancellations and recommend a specific 'cancel for any reason insurance policy' which covers COVID related cancellations.  


The guest didn't buy the insurance and issued chargebacks through their credit card.  

This guest happened to live relatively close so I decided to file a lawsuit and try my luck. We both explained our sides, and when the judge asked why she didn't buy the insurance the guests stated she didn't think it would be necessary.

Fast forward 20 minutes of testimony and the judge said this is a simple contract case, and that the guest signed away her rights specifically pertaining to COVID and she should have purchased the insurance. The judge said I am 100% correct.

I'm feeling like I won and it's over until the last 30 seconds where the judge said she couldn't 'in good conscience enforce the contract'. Case closed.

I appreciate the situation this guest was in, as well as the 1000s of others affected, however, my argument was why am I responsible and expected to eat the $5000+ losses when the guest decided to save $129 on insurance at the time of booking which would have reimbursed her costs.  The contract was clear and the guest decided to roll the dice.   


I'm not upset at the ruling but am disappointed that even when we, as landlords, do everything correctly and prove our case, judges simply toss our legally binding contracts out at their discretion. The only thing I can think of that I could do differently going forward is to require travel insurance at the time of booking (through VRBO) which would force them to purchase it.  However, that very well may turn off guests as there's already enough fees as it is.  

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Member since 2019 · 6 posts · 13 votes
6y

That's so frustrating. 

That's California for you, I guess.

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  • Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
    6y

    Appellate court.

  • Investor · Matamoras, PA · Member since 2015 · 111 posts · 32 votes
    6y

    Small claims court (magisterial) is often referred to as fake court. Reason being is the judge can make a ruling based off what he/she thinks is right and not what the law exactly states. 

  • Real Estate Agent · Phoenix · Member since 2020 · 27 posts · 49 votes
    6y

    Heart rate and blood pressure just spiked. I wish I had a magical expertise or advice for you on this one. Super frustrating.

  • Specialist · O'Fallon, MO · Member since 2010 · 148 posts · 46 votes
    6y

    Not a cool story at all. I woke up beginning in like 2004 when I found out my employer never had it in their contract to sell mortgage notes for Chase. Had they not deceived me at acceptance of employment I wouldn't have been doing such. The company I worked for was bought out. The former owner, and immediate manager are now deceased. The company that lied their board of directors are over 35 of our top law offices. We're taught to represent the truth. Truth is what they pay to publish. Not as we have had represented to us for many years. Tick tock goes the clock :) 

  • Marc RiceBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
    6y

    @Mike V. That's a rough outcome. Sorry to hear. Being in the STR business myself I know how hard it can be to enforce guests getting any third party renters insurance or traveled insurance. Maybe an idea would be to charge them a little extra and process that on your end in their name?

    Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews
  • Daniel SmythPro Member
    Rental Property Investor · Rockford, IL · Member since 2019 · 471 posts · 342 votes
    6y

    If you cannot prove that you had others looking to book your place, but didn't because it was booked by the defendant, it looks like you just want the money, and care nothing for the reduced value of the place because of what the government mandated covid panic caused.

    It was in poor taste to bring legal action for full funds after cancelation. At most, I would have required a cancelation fee of some sort, to cover your costs to ready the property for the guests who canceled. 

    But, you did offer insurance. 

    Judge should have worked up a different solution. 

  • Jeff HubertPro Member
    Realtor · Fort Lauderdale, FL · Member since 2013 · 101 posts · 30 votes
    6y

    @Mike V.

    This should of been a layup for the judge. I Don’t understand her verdict. Sorry !

  • Rental Property Investor · Member since 2019 · 304 posts · 462 votes
    6y

    I would be upset about the ruling. First, the judge states that you are 100% correct and then refuses to enforce the law. Another clear example of an activist judge. You might win on appeal but in California you have no guarantee and the cost is likely not worth it. 

  • Investor · West Palm Beach, FL · Member since 2020 · 6 posts · 0 votes
    6y

    @Mike V.

    Can you appeal?

  • Investor · Gallatin, TN · Member since 2020 · 59 posts · 62 votes
    6y

    Classic case of legislating from the bench......grrrrrrrrrrrrrr

  • Rental Property Investor · Will County, IL · Member since 2018 · 39 posts · 11 votes
    6y
    Thankfully I have not had to deal with the courts (yet) with anything real estate or investment related. That said, my regular 9-5 job is as an investigator for a statewide law enforcement agency, so I deal with the courts a lot in that aspect. In my experience, once a person gets elected or appointed as a judge, all legal processes go out the window. They gorge themselves on their new found power and any real aspect of justice is lost. I have actually had a judge say to a defendant, "All the evidence presented demonstrates that you are, in fact, guilty. But you seem like a nice person and I'm sure you have learned your lesson from this process." The judge then made a ruling of not guilty.

    Judges don't follow laws, because they most likely feel that as interpreters of the law they don't have to. I have also seen, in my experience, that appellate courts are much more just than the district or circuit courts. So if you have a chance to appeal, I'd do it.
  • Rental Property Investor · Princeton, MN · Member since 2020 · 13 posts · 9 votes
    6y

    My family was bit by the COVID cancellation as well, however, we were on the renter's end of the agreement.  We too declined trip insurance...won't do that again! Fortunately, VRBO policy shifted to strongly encourage owners to reimburse at least 50% to the renter (even if inside of the cancellation window), due to the unprecedented circumstances.  The owners of the property we rented generously refunded the 50%.  Neither of us were made whole, but we felt lucky it worked out the way it did. Sorry for your loss @Mike V. Tough situation for all involved. 

  • Angelika HanleyPro Member
    Real Estate Investor · Knoxville, TN · Member since 2015 · 2 posts · 0 votes
    6y

    Wow. That's CA for you. A judge should judge based on the LAW, not emotions. I would appeal.

  • Rental Property Investor · Denver, CO · Member since 2020 · 8 posts · 4 votes
    6y

    @Mike V. Sorry to hear about this. Very frustrating. Going forward I would include the insurance as part of the fees. Just as you would cleaning fees. Good luck in future endeavors!

  • Engineer · Portland, OR · Member since 2014 · 1k+ posts · 1k+ votes
    6y

    @Avery Carl small claims court is a “court of equity” not a “court of law” so only in small claims will you see judges acting poorly like this; at least on paper although there are too many judges with a God complex

  • Real Estate Investor · Naperville, IL · Member since 2017 · 13 posts · 4 votes
    6y

    @Mike V.c

    You've learned a valuable lesson that I learned 25 years ago when I was in court with a tenant. Judges dont have to follow the law and the landlord has little rights. Next time, hire an attorney to plead your case. The judges are less likely to pull this kind of crap in front of fellow attorneys. Since then, I've not had this problem happen again.

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