Arizona Revised Statutes Title 22. Justice and Municipal Courts § 22-517. Counterclaims exceeding jurisdiction; procedures; sanctions for improper assertion

A. In any action where a counterclaim is asserted and the amount involved in the counterclaim exceeds the jurisdictional amount of the small claims division, the court shall at once terminate the designation as a small claim action, and the action shall proceed in accordance with the rules relating to all other civil actions.

B. If, at any stage during the proceedings subsequent to the termination of the small claims designation as provided in subsection A, the justice of the peace or superior court judge determines that the amount actually involved in the counterclaim is not in excess of the exclusive civil jurisdictional amount of the small claims division, the action shall be reinstated in either the small claims division as a designated small claim action or in the justice court as a regular civil action.

C. If the court makes a determination as provided in subsection B of this section that results in a reinstatement of the small claims designation and further determines that the amount requested in the counterclaim was asserted for the sole purpose of avoiding small claims proceedings, the court so finding shall award the plaintiff costs plus actual reasonable attorney fees incurred in defending the counterclaim.