(a) When Counterclaim to be Filed; Effect on Hearing Date. If at the time of the trial date it appears that a defendant has a counterclaim within the jurisdiction of the small claims court, the court may either proceed to hear the entire case or may continue the hearing for a reasonable time, at which continued hearing the entire case shall be heard. (b) Counterclaim Within the Jurisdiction of the Small Claims Court. If at the time the action is commenced a defendant possesses a claim against the plaintiff that: (1) is within the jurisdiction of the small claims court, exclusive of interest and costs; (2) arises out of the same transaction or event that is the subject matter of the plaintiff's claim; (3) does not require for its adjudication the joinder of third parties; and (4) is not the subject of another pending action, the defendant shall file such claim as a counterclaim in the answer or thereafter be barred from suit on the counterclaim. The defendant may also elect to file a counterclaim against the plaintiff that does not arise out of the transaction or occurrence. (c) Counterclaim Exceeding the Jurisdiction of the Small Claims Court. If at the time the action is commenced the defendant possesses a counterclaim against the plaintiff that is not within the jurisdictional limit of the small claims court, exclusive of interest and costs, and the defendant wishes to assert the counterclaim, the defendant may: (1) file the counterclaim in the pending small claims court action, but unless the defendant follows the procedure set forth in subsection (2) below, any judgment in the defendant's favor shall be limited to the jurisdictional limit of the small claims court, exclusive of interest and costs, and suit for the excess due the defendant over that sum will be barred thereafter; or (2) file the counterclaim together with the answer in the pending small claims court action at least seven days before the first scheduled trial date and request in the answer that the action be removed to county court or district court, whichever has appropriate jurisdiction, as selected by the defendant, to be tried pursuant to the rules of civil procedure applicable to the court to which the case has been removed. Upon filing the answer and counterclaim, the defendant shall tender the filing fee for a complaint in the court to which the case has been removed. Upon compliance by the defendant with the requirements of this subsection (2), all small claims court proceedings shall be discontinued and the clerk of the small claims court shall deliver the case and fee to the appropriate court. (d) Defendant Notified if Counterclaim Exceeds Court's Jurisdiction. All counterclaims asserted over the jurisdictional limit of the small claims court shall be subject to the provisions of Section 13-6-408 , C.R.S., and all defendants shall be advised of those provisions on Forms appended to these rules. Colo. R. Sm. Clm. Ct. P. 508
Entire chapter repealed and readopted February 24, 1994, effective 7/1/1994; entire rule amended and effective 9/6/2001.