QuestionThe at-fault driver’s insurance does not want to pay the full amount but make a low offer. There is a difference between the amount of the claim and insurance offer. As a result, the driver will have to sue the other driver at fault for damage in small claims court. Under what circumstances is the at-fault driver’s insurance usually willing to go to the small claims court instead of paying the full amount of the claim? Thank you for your answer.
AnswerHi Rendy—sorry for the ten hour delay, but you caught Dr. Settlement in the middle of my Memorial Day vacation. Just happened to login tonight to find your question waiting.
This is an IMPORTANT question, even if the amount is small, so I am going to give you a full and long answer. There are FIVE parts to my answer, outlined as follows:
#1. You cannot sue for just the difference between the two offers.
#2. Small claims appearances by insurance companies
#3. Special tip on small claims if you have medicals paid by your insurance
#4. GO FOR DEFAULT JUDGMENT—no notice to the insurer—WAIT before notifying the insurer.
#5. General tips on small claims from a court brochure.
Ready, Rendy? Here we go.
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#1. You cannot sue for just the difference between the two offers.
I hope that I misread your question, because it kind of appears that you think you get to set aside the offer of the insurer and then sue the tortfeasor for the difference between the two offers. And then you may think that you get BOTH the existing offer AND the results obtained at court.
So, be advised that if you decline the offer and sue, the offer disappears and you will be suing for the entire damage done by the tortfeasor (UNLESS you can work the "general damages only" magic I am suggesting below).
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#2. Small claims appearances by insurance companies
The answer to your question depends upon the circumstances of the case and the history of the small claims court judge in allowing representation for any claimant. My guess is that a request to allow an attorney for insurance to appear is going to be DENIED in two-thirds of the cases.
Here is how it mostly works: attorneys are NOT allowed in small claims court, UNLESS specifically allowed by the judge. And if an insurance company tries to appear in the court filing, you MUST FIGHT IT. In fact, when you do file, make sure that you get some kind of information from the court website or the small claims court statute to the effect that no attorneys will be allowed. Then write up a mini-brief to recite to the judge if it appears she is even considering allowing in an attorney to represent the other side.
State such things as (1) the intrusion of attorneys will undermine the purpose of small claims courts, which is the swift administration of civil justice, and (2) if she allows that side to have an attorney, they you will have to get a delay so you can get an attorney also, and (3) the issues here are SIMPLE and no real defense is at stake in this case of obvious negligence, and hence NO attorney is needed since the tortfeasor himself can tell his side of the accident, and (4) as for the amount of the damages, the tortfeasor is insured and his limits are more than the maximum limits of this court, and hence it is only his insurance company that will have to pay (expect the judge to kind of reject this last argument, but make it anyway).
You need to sue for the maximum allowed in small claims court if your damages are at that amount, and in most cases, the insurance company will increase their offer to you since they do not want to try to get an attorney in for a small claims action. You have the control of the negotiations then since you will—if you follow my advice above—have ready all of the ammo to fight any inference that they will get to have an attorney appear.
So if you BLAST these arguments out to the adjuster BEFORE you sue, and let her know that these are your intentions, they she should increase her offer.
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#3. Special tip on small claims if you have medicals paid by your insurance.
If the limits of small claims are too low for both the medical expenses and your general damages (i.e. pain and suffering and loss of enjoyment of life), THEN you may want to try this trick.
Sue for just general damages, and let your insurer collect its subrogation from the tortfeasor's insurer. http://www.settlementcentral.com/page0459.htm
The subrogation is a special right owned by your insurer. It is for the special damages (medical costs and lost wages) that it has already paid out in your first party claim.
This tactic depends upon having had your medical expenses paid by your auto or health insurer. If this is not your case, then ignore this tip.
Assume a limit of $5,000 in small claims court and medical bills incurred for $3,000, which were paid by your auto insurer, who now owns a subrogation claim against your claim versus the tortfeasor.
If you ignore what I am suggesting herein, the maximum you can put into your pocket will be just the $2,000, since $3,000 will have to go to your own insurer on its subrogation claim. But if you can split the cause of action and make your claim for general damages only, then you will get the full $5,000 in your pocket.
You call your own insurer's subrogation department and tell them that they will pursue their claim versus their intercompany arbitration agreement. Since that is precisely what they want to do anyway, they will agree. Then you tell them that they are agreeing to allow you to split your cause of action and to sue in small claims court for GENERAL DAMAGES ONLY.
THEN you write a "since dad says it is OK, is it OK with you, mom?" letter to the tortfeasor company—or you can call them. But I advise the letter. Tell them that your company has agreed to split the cause of action and to allow you to sue for general damages only and that the issue of subrogation on the medical expenses they paid will be resolved in the separate forum of intercompany arbitration.
Tell them that you will assume that they agree to this UNLESS they write you back to the contrary within 15 days of the date of this letter. Please do not call to register your objection, if any, to this process. Unless I hear from you in writing, I will represent to the small claims court that you do agree to split the cause of action.
NEXT, whenever it comes time for you to file your lawsuit on the form given by the court, make room for this paragraph, or simply retype the form at home in the same format as the court has, and insert this paragraph into the court pleading.
Describe the Nature of your claim: Defendant negligently struck me from behind in Kirkland, WA, causing damage and personal injuries. Property damage has been paid in full. $2,000 in medical treatment costs were paid by my insurance and will be resolved directly with Defendant's insurance outside of this court venue. My general damages for pain and suffering and loss of enjoyment of life remain unresolved and should be awarded in a sum of no less than $5,000. A copy of my demand letter and medical records will be served upon Defendant.
The amount owing is for Auto Accident Personal Injury General Damages Only (excluding property damage and medical treatment costs). Date of Accident: 09/11/2005. Place of Accident: Kirkland, King County, WA
Whenever you do have to appear before the judge, make sure that she knows that the claim is for your pain and suffering (i.e. general damages) ONLY.
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#4. GO FOR DEFAULT JUDGMENT—no notice to the insurer—WAIT before notifying the insurer once judgment is entered in your favor.
A default judgment is one granted to you upon your proof to the court where the defendant does not enter an appearance or appear at the time specified for trial. It does happen occasionally in superior court insurance cases, and a bit more frequently in small claims court cases.
You DO NOT have to send the insurer a copy of your lawsuit. You can break off communications without some big announcement of a lawsuit. Just tell them that you would like your demand paid in full or you will be forced to consider filing in small claims court. I would tell the insurer that you need the full value of the small claims court limits (i.e. $5,000 in the example above) IN YOUR POCKET as general damages or you will sue in small claims court. That is it—nothing else need be said. If they pay up, fine; it not, say no more—just sue.
NO NOTICE OF LAWSUIT REQUIRED to be given to the insurer. In football, maybe the chances of having a field goal blocked are low, but why not go for the play? There is a good chance (maybe 15%) in small claims insurance cases to get a default judgment versus the tortfeasor. Why? I guess that the insured often thinks that his company is handling it, I suppose.
Hence, once you decide to go forward with the lawsuit, you do not initiate any further communications with the insurer UNTIL 40 days AFTER a default judgment has been entered in your favor.
Yes, you will serve the tortfeasor via a process server. Hire it done by a PROFESSIONAL EXPERIENCED civil process server instead of using the sheriff. Why? Because you might have to serve by statutory substituted service, and the professional knows best how to make the affidavit. You will present his bill as part of your costs, although some courts do only reimburse you a lesser statutory amount.
If the defendant shows up, good—just present your evidence. Have a copy of the medical treatment notes to give to the court. Organize your presentation and have demonstrative evidence (i.e. photos, etc.) for as much proof as possible.
If the defendant does not show, the court will sit you down until the docket is done and then call his name again, and at that time you will get to present your case to the judge, who will then order a default judgment in the entire amount that you have proved. They will prepare the judgment and mail it to you. YOU SHOULD NOT GIVE ANY NOTICE TO THE INSURER OR DEFENDANT AT THIS TIME. LAY LOW.
The defendant can set aside that judgment for good cause shown and alleging a good defense. This can be done at any time up to one year. But that can be tough if there is no good cause or if there is no real defense to the case.
Hence, the insurer would prefer to just appeal the judgment and so this is another way the defendant can set aside the default judgment is to appeal it to superior court. The rights of appeal expire thirty days following entry of the judgment.
Once you get the judgment in the mail, notice the date of entry thereon. For safety, give yourself a few days beyond the 30 day appeal right and then send a copy of the judgment to the defendant asking him how he wants to pay it.
IGNORE the court's instructions on the judgment form or attached to it regarding giving notice to the defendant ASAP. Those are for cases wherein you will want to transfer the judgment to a court of record. Since you are going to collect from an insurance company, you can just wait until you give the defendant notice of entry of the judgment. Lay low and bide your time until the 40 days has elapsed, and THEN spring the news of the judgment upon the defendant.
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#5. General tips on small claims from a court brochure.
Here is a court brochure just in case your local court does not print out such a brochure. It this directly applicable to your court? NO—the laws change by state, of course. But the general points made about the process and how to proceed will be about the same. Hence, I present it here just to let you know how the process will work for you.
I will sign off here, Rendy, and wish you the best in prosecuting this claim to a successful conclusion. I trust that my extra time here has produced some information that has been of value to you, and thus I would respectfully request that you take the time to locate the FEEDBACK FORM on this site and leave some feedback for me.
Best Wishes,
Dr. Settlement, J.D. (Juris Doctor)
http://www.SettlementCentral.Com
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Disclaimer
This brochure is intended to be a general statement of small claims procedure. For more detailed information, please consult applicable provisions of the Revised Code of Washington (RCW) Chapters 3.66, 4.16, 4.28, 12.40, and applicable provisions in the Civil Rules for Courts of Limited Jurisdiction, Rule 5 (CRLJ 5). RCWs and court rules can be found at libraries and the following websites: www.leg.wa.gov (for RCWs) and www.courts.wa.gov (for court rules). Court contact information can also be found at www.courts.wa.gov.
Who Can Sue And Be Sued?
Any individual, business, partnership, or corporation (with a couple of exceptions) may bring a small claims suit for recovery of money only for an amount up to $5,000. In general, the claim must be filed in the district court of the county in which the defendant(s) reside. Exceptions and specific rules can be found at RCW 3.66.040. The state of Washington may not be sued in Small Claims Court. Attorneys and paralegals are excluded from appearing or participating with the plaintiff or defendant in a small claims suit unless the judge grants permission.
How Much Does It Cost?
You must pay the court clerk a filing fee at the time the suit is filed. The filing fee ranges between $14 to $29 depending on whether the county you file the lawsuit in supports a dispute resolution center. You may have some additional fees payable to the sheriff or process server to have the Notice of Small Claims served on the defendant. As an alternative, you may serve notice on the defendant by registered or certified, return receipt mailing. If you win your case, you are entitled to recover your costs of filing and service fees.
How Do I Get Started?
First you will prepare a Notice of Small Claim form that is provided by the clerk. You are required to sign the Notice in the presence of the clerk, unless otherwise instructed by the court. On the Notice form a hearing date, trial date, or response date will be entered by the clerk. It is the plaintiff's responsibility to accurately identify the defendant, provide a proper address and, if possible, provide a phone number.
How Long Do I Have To File My Case?
Time limits range from one (1) to ten (10) years. See Chapter 4.16 RCW to determine which time limit applies to your type of case.
Serving The Notice
The clerk will assist you with forms and general information about the process. The clerk is not allowed to give legal advice. Service of the claim form can be accomplished by any of the following:
1. The Sheriff's Office;
2. A process server;
3. Any person of legal age (18) who is not connected with the case either as a witness or as a party; or
4. By mailing the copies to the defendant by registered or certified mail with a return receipt requested.
The Notice of Small Claim must be served on the defendant not less than ten (10) days before the first hearing. A return of service, or mail return receipt bearing the defendant's signature, must be filed at or before the time of the first hearing. You cannot personally serve the claim. See RCW Chapters 4.28 and 12.40, and CRLJ 5 for more detailed information.
What If We Settle?
In most cases, neither party is one hundred percent right or wrong. You are encouraged to try to settle your case before trial. If you settle the dispute before the hearing, you must inform the court so the hearing can be canceled and your case dismissed. If the other party agrees to pay at a later date, you may ask the court for a continuance. If the other party pays before the postponed date, ask the court to cancel the hearing. If you do not receive your money by the time of the continued hearing, proceed with the case in court. If you drop the suit, your filing fee and service costs are not returned.
Preparing For The Trial
You can help yourself by being well prepared. To prepare for the trial, collect all papers, photographs, receipts, estimates, canceled checks, or other documents that concern the case. It may be helpful to write down ahead of time the facts of the case in the order that they occurred. This will help you to organize your thoughts and to make a clear presentation of your story to the judge.
It is also a good idea to sit through a small claims court session before the date of your hearing. This will give you first-hand information about the way small claim cases are heard.
What Happens At The Trial?
When you arrive at the court, report to the courtroom in which your case has been assigned. When your case is called in the courtroom, come forward to the counsel table and the judge will swear in all the parties and witnesses.
Don’t be nervous—remember that a trial in small claims court is informal. The judge will ask the plaintiff to give his or her side first, then will ask the defendant for his or her explanation. Be brief and stick to the facts. The judge may interrupt you with questions, which you should answer straight out and to the best of your knowledge.
Be polite, not just to the judge, but also to your opponent. Do not interrupt. Whatever happens, keep your temper. Good manners and even tempers help the fair, efficient conduct of the trial, and make a good impression.
After both sides have been heard by the judge, he or she will normally announce the decision right then and will sign and hand the parties a judgment.
What If My Opponent Does
Not Appear For Trial?
If the defendant fails to appear for trial, the plaintiff will be granted judgment for the amount of the claim proven in court, plus costs—provided the plaintiff can show proof of service. If the plaintiff fails to appear, the claim is dismissed; however, generally the court will permit the plaintiff to start over, if good cause for the non-appearance is shown.
How Do I Collect My Money?
A money judgment in your favor does not necessarily mean that the money will be paid. The Small Claims Court does not collect the judgment for you. If no appeal is taken and the judgment is not paid within 30 days, or the time set by the court in the payment plan, you may request (in writing) and upon payment of a $20 fee, that a transcript of the judgment be entered into the civil docket of the court. At that time you may proceed with a method of collection such as garnishment of wages, bank accounts, and other monies of the defendant or an execution may be issued on cars, boats, or other personal property of the judgment debtor. Remember, the clerks cannot give you legal advice. You may need the assistance of an attorney or collection agency at this point. In the alternative, you may take your transcript of the judgment and file it in superior court for a fee of $20. Other fees may be required by the superior court clerk or county auditor. When this is done, it places a lien against all real estate in the name of the judgment debtor that is located in the county.
When the judgment has been paid in full you must send written notice to the district court that the judgment has been satisfied.
Can You Appeal A Case If You Lose?
The party who files a claim or counterclaim cannot appeal unless the amount claimed exceeds $1,000. No party may appeal a judgment where the amount claimed is less than $250. If an appeal is taken to the superior court, the appealing party is required to follow the procedures set out in Revised Code of Washington (RCW) 12.36. The following steps must be taken within 30 days of the entry of judgment:
1. Prepare a written Notice of Appeal and file it with the district court.
2. Serve a copy of that Notice on the other parties, and file acknowledgment or affidavit of service in district court.
3. Pay to the district court a $20 transcript fee.
4. Deposit at the district court the $200 superior court filing fee either in cash, money order, or cashier’s check payable to the Clerk of the Superior Court and pay a $40 appeal preparation processing fee to the district court.
5. Post a bond in a sum equal to twice the amount of the judgment and costs, or twice the amount in controversy, whichever is greater, (cash or surety) at the district court.
When the appeal and bond are transferred to superior court, the appellant (person appealing the decision) may request that the superior court suspend enforcement of the judgment until after the appeal is heard.
Within 14 days of filing the Notice of Appeal, the district court clerk will transmit the court record to the superior court clerk who will assign a new number and notify the district court. The district court clerk will advise the appellant of that number, and the appellant must then contact the superior court for further instructions.
Once the judgment has been appealed to the superior court, then enforcement of any judgments entered in the case will be handled in superior court in the same manner as any other superior court judgment.
