(a) In every action before a justice of the peace, within the justice's jurisdiction, the defendant, if he or she has against the plaintiff any account, demand, or cause of action, cognizable before a justice of the peace, shall bring it forward and plead it as a setoff; and the justice shall enter on the docket the nature and amount of such counterclaim. Any defendant, neglecting to do so, shall, if the action against him or her be prosecuted to judgment, lose such account, demand, or cause of action, and be forever barred from recovering it.
(b) If the defendant has any account, demand, or cause of action, against the plaintiff, exceeding $25,000, the defendant may bring it forward and plead it as a setoff under subsection (a) of this section. The defendant does not, by neglecting to plead it, lose such cause of action.
(c) If the defendant pleads a setoff exceeding $25,000 and it is found on the trial that there is any sum due the defendant from the plaintiff, judgment shall be given against the plaintiff, in the defendant's favor, for such sum, provided the sum does not exceed $25,000. If the sum exceeds $25,000 that fact shall be stated on the record, and judgment shall be given for costs for the defendant, who may prosecute such cause of action in court; or the defendant may remit the excess above $25,000 and take judgment for that sum.