good luck in court.
For $500 I'll be surprised if they even show up.
I've read the Pay pal agreement they have with vendors.
This clause is in it:
14.3 Law and Forum for Disputes. Except as otherwise agreed by the parties or as described in section 14.2 above, you agree that any claim or dispute you may have against PayPal must be resolved by a court located in either Santa Clara County, California, or Omaha, Nebraska. You agree to submit to the personal jurisdiction of the courts located within Santa Clara County, California, or Omaha, Nebraska for the purpose of litigating all such claims or disputes. This Agreement shall be governed in all respects by the laws of the State of California, without regard to conflict of law provisions.
In my industry that is called a "Forum Selection clause" and a "Choice of Laws" clause, with which the parties agree that the courts and laws of a named State (CA) are to be used for any disputes. Those clauses are enforceable in every state in the USA. What this means is you gotta go to California to Santa Clara county or Omaha NB to sue them.
It's worse: The Pay Pal vendor agreed to be subject to the Santa Clara CA courts so they can hail you into court there, and you can't insist they come to your home state.
In only one instance have I encountered a court willing to hold such clauses unenforceable and it was as to a specific franchise type of operation and I have only encountered this once and only in one state.
But it can never hurt to ask the court to hold the clause unenforceable. What's the worst that can happen: The court says no?
You can raise a good argument about how the clauses are intended to handicap small dealers crippling them in the courts because of the costs.
I'm guessing that they they may very well just ignore you and you lawsuit.
But, You might get a default judgment. But that judgment is only good in your home state (Michigan?). And they can always show up with contract in hand and insist that the local court lacked jurisdiction. That is the death knell to your suit if the court agrees.
To the question of you getting paid:
No body writes out checks in the court rooms. the gavel comes down a verdict is uttered and everybody leaves. No money changes hands.
If you want to collect on a judgment you have to invoke a whole different universe of legal proceedings we call "collections." If the defendant is not domiciled in your home state, you gotta go to theirs and do what is called "domesticate" the judgment.
Then, if you seek to domesticate the judgment in their state, they can file for a special appearance in their domicile state and present the agreement which the cout will most likely agree is enforcable and quash your default judgment.
That all sounds pretty damn dismal, I know.
It gets worse. Most financial institutions and banks are all regulated by the UCC and your individual state versions of the UCC. It's all pretty good law that's been honed sharp and tight over the many years it's existed.
Pay Pal however, is not regulated by the UCC. They come under Regulation E. Reg E is like the wild West of financial regs. It's a sloppy undeveloped area of law and for those with troubles, it's usually a nightmare.
However, you are not dead in the water just yet.
If you get a default judgment, check the following out with your court clerk's office.
Ask if they have a protocol by which you can docket your judgment in superior court. Some states have this some don't
If you can get it transferred (docketed) in superior court then Pay Pal will have a problem.
Ya see most credit checks don't drill down to the Small claims judgments. Instead they often just go as deep as superior court. If an unsatisfied judgment pops up on a credit check it is usually death to any financial transaction involving credit.
If your judgment can be put on the records of your state's superior court you will have tied Pay Pal's hands.
They won't be able to get credit until they get that judgment satisfied and paid. That means they will have to get into court and probably in you home state revive the case plead:
(1) Failure of proper notice accusing you of having failed to notice them pursuant to the laws of your state and then of California's too (because of those clauses), (2) Insufficient jurisdiction and use those clauses to show that your lawsuit had to have been in California, (3) probably file a version of a 12(b)(6) motion just because.
They will win if they do this. But I can't see them spending the money.
And that's why you may get paid some day if they file an application for credit somewhere. Your itty bitty judgment will handicap them. It'll be easier to write you a check.
So you can at least do that.
If on the other hand, they show up to defend I really ~ REALLY ~ R-E-A-L-L-Y ~ ~ ~ would like to hear what they say. I'd like very much to see the papers they filed and what their defenses were.