QuestionHi there,
This is regarding a complaint filed against my dad.
He was involved in a car accident in June 2006 and he is being sued. Court paper was just served a few days ago. I understand that we have 30 days to react (which I think insurance company's lawyer will do). I assume that my dad doesn't have to do anything.
info that I think is relevant:
1. My dad was at fault (missed a stop sign).
2. Dad's left front side was hit by front of plaintiff's car. I am not sure what the estimated impact speed was. The police report states that my dad's car struck plaintiff's car.
3. My dad was only person in his car and the plaintiff was only person in her car.
4. My dad's insurance coverage is minimum in CA. I think it's $15K coverage.
5. Complaint includes wage loss, loss of use of property, hospital and medical expenses, general damage, property damage and loss of earning capacity.
6. Plaintiff is seeking more than $25K
Questions:
1. For now, please assume that the equitable settlement is what they are asking for (over $25K). Should my dad get an attorney now, rather than wait till insurance company's attorney gives up and pay the $15K limit? Is it too late to work with an attorney after such time (when insurance attorney gives up)?
2. My dad believes that she is asking for too much based on what he saw after the accident. So for now assume that she is asking a lot more than she deserves. How do I get more detailed information on how much they are asking for and for what injury? Can I get information on where she works and lives? My dad is willing to hire a PI to watch her as she is claiming a loss in earning capacity. Not sure based on what, but would like to know what her complaint is and see if she acts inappropriate to her claimed injuries.
3. My dad has very little assets (<$2K) and lives month to month on his paychecks with my mom. He has considered to contact the plaintiff's lawyer about how much money he doesn't have and they can take whatever court decide he should pay monthly basically telling them that after $15K from insurance company, they have to garnish his wages for more which we are not sure how much can be extracted out of my dad's gross income of $2,100 per month. Should this be an option for him? If so, when should he contact plaintiff about him having little asset to pay. By the way, my dad lives with me but I am not legally bound to him in anyway. If it comes down to garnishing his wage, how do the court calculate the amount my dad owes per month? In such case, when should my dad hire his own attorney? Now? After $15K payment from insurance company? To contact them about my dad having very little assets?
Thanks for your help.
David
Answer
Defense attorney hired insurance company
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Received lawsuit. What to do now?
Insurance defense attorney loyalty
Plaintiff policy limits UIM claim
Bankruptcy discharge judgement
Sheltered assets bankruptcy personal injury lawsuit
Dear David,
You are a fine son to take this on for your Dad. You and your Dad have little to worry about in this case regarding them coming after his wages or assets. I will tell you why below.
But first let's start with the two cardinal rules for those who get sued:
1. ALWAYS, WITHOUT FAIL, GET THE LAWSUIT TO YOUR INSURANCE COMPANY ASAP, and follow their instructions and cooperate fully with the adjuster and attorney.
2. NEVER, EVER, UNDER ANY CIRCUMSTANCES, CONTACT EITHER THE PLAINTIFF OR HER ATTORNEY. You could SERIOUSLY UNDERMINE the defense of your case by contacting the plaintiff or her attorney. I guarantee you that the attorney will get concessions out of you or your Dad that the insurance defense would NOT ALLOW you to give voluntarily. DO NOT SPY ON HER WORK PLACE OR TO SEE WHERE SHE LIVES. It is none of your business: that is what the insurance attorney will tend to.
Also, your Dad DOES NOT NEED TO PAY ANY ATTORNEY TO ADVISE HIM DURING THIS PROCESS. If his company refuses to pay in its policy limits, then they must hire an attorney for him to go over the situation, and at that time he will inform his company to pay in his policy limits (in exchange for a total release of his liability) or face a bad faith action from him. Otherwise, the insurance attorney will defend him faithfully: he is NOT the "insurance attorney", as you stated. This attorney owes his professional duty ONLY TO YOUR DAD. He is bound by a Code of Professional Responsibility to act in the best interests of your Dad, NOT THE INSURANCE COMPANY. In my 27 years at The Bar, I never ever saw anything but the highest ethical allegiance from insurance-hired defense attorneys to their clients—the defendants I was suing.
Now, let's explore the world of insurance defense, and in this case we need to address minimum insurance coverage and no assets upon which to levy a judgement.
Since your Dad has insurance, all he has to do is to follow the two rules above. His insurance company will defend him fully. If the plaintiff has a claim worth more than the limits of his insurance, the plaintiff will settle for the policy limits and then use her own Underinsured Motorist Coverage (UIM) to pay the balance of the claim.
Once she settles for any money whatsoever from your Dad's insurance (even if it is less than his policy limits), then that will release your Dad from any and all liability regarding this matter. Neither she nor her insurance company can come after your Dad once she accepts any settlement from his company since she will have to sign a general release. Also, her insurance company’s subrogation claim is derivative from hers, so it dies with her signing the general release.
So, her company is bound by her release signed to obtain any settlement from your Dad's company. She cannot settle with your Dad's insurance unless and until her own company passes on the chance to go against your Dad on a derivative subrogation claim. This process is described on the page I have linked below. Her company will not desire to sue your Dad, since he has no assets above those which he could shelter in a bankruptcy action.
In the end, she will end up with your Dad's policy limits and her award from her own UIM, LESS ONE-THIRD ATTORNEYS' FEES, and less her own subrogation owing to her insurance that paid for her medical expenses.
She is now out of the picture so far as your Dad is concerned. If you want to explore the world from her perspective, here is what it looks like, including rules she has to follow to use her own insurance—Directory of Legal Information Liability Insurance Policy Limits Settlements in Personal Injury Insurance Injury Claims http://www.settlementcentral.com/page0451.htm
What happens then? Nothing whatsoever. It is over and nothing will ever come of it again.
Ahhh. . . . you ask: "What if she refuses to take Dad's meager policy limits and elects to follow through with a trial instead?" Then you and your parents will get a paid education in our tort system, with no risks whatsoever.
In the first place, please understand that I am a long-time plaintiff's attorney, and thus I can say with assurance that we are not cut out to chase after wild geese. We know how to cut a fat hog, all right. But if there are no assets to pursue, we will call it a day and go home. In other words, since ALL OF YOUR DAD'S ASSETS ARE SHELTERED by the bankruptcy laws, no plaintiff's attorney is going to go through a full blown jury trial just to have the chance to go after someone who will discharge the judgement he obtains in bankruptcy.
In 27 years in the business, I never did it, nor have I ever known any attorney who would do such a thing, since it involves waaaaay too much work, expense, and risk. Think of what the plaintiff's attorney would have to go through just for a chance to face a bankruptcy filing. Your insurance attorney will give a full and hard fought defense in trial, so the plaintiff has to produce all of her witnesses, all of her doctors, etc. to win a judgement. Then and only then will your Dad have to hire an attorney. That attorney will shelter his assets by filing one simple document to start a bankruptcy action. The judgement will be discharged in bankruptcy, all of your Dad's assets will be protected, and the plaintiff will take nothing.
We trial lawyers ain't no fools: long before any trial we will have a good idea of the assets of the defendant. Many times we will give the defendant's attorney (your Dad's insurance attorney) a request to let us know his client's assets. Since your Dad and his attorney are going to be eager to get a settlement for policy limits, they will gladly let the plaintiff know what assets he has. Like a dog laying over and exposing its jugular, that ends the fight right there.
No, your parents do not have to even think of declaring bankruptcy, now or ever. WE, THE TRIAL ATTORNEYS will know that it is not worth pursuing. So we will take the policy limits and go after her UIM. End of story.
Let's see, what have I left off or not covered for you and your Dad? OK, I see some comments in your remarks above that need to be addressed, so I will do those now.
• "I assume that my dad doesn't have to do anything"—Correct. Just follow #1 & #2 above.
• "Should my dad get an attorney now?"—NO, not ever will he need to hire an attorney, unless they obtain a judgement, in which case he will discharge that judgement in bankruptcy and he will never pay a dime of it.
• "Is it too late to work with an attorney after such time (when insurance attorney gives up)?"—There is no "insurance attorney" (see above). And no, your Dad's attorney hired by the insurance company WILL NEVER "GIVE UP". Either he will obtain a general release in exchange for payment from your Dad's insurance company, OR, he will fight hard and fully in defense of your Dad right to the end of trial and through any appellate process, if necessary. There is no charge whatsoever for his services.
• "My dad believes that she is asking for too much based on what he saw after the accident. So for now assume that she is asking a lot more than she deserves. How do I get more detailed information on how much they are asking for and for what injury? Can I get information on where she works and lives? My dad is willing to hire a PI to watch her as she is claiming a loss in earning capacity. Not sure based on what, but would like to know what her complaint is and see if she acts inappropriate to her claimed injuries."—STOP ALL OF THIS NONESENSE NOW! It is none of your business nor any of your Dad's business what the claim is worth, where she works, or lives, or anything to do with her. THIS IS SOLEY THE RESPONSIBILITY OF YOUR DAD'S INSURANCE-HIRED ATTORNEY, AND HE WILL DO ALL OF THIS IN EXCELLENT FASHION. Stay the heck out of the way, or you could possibly be interfering with your insurance company's defense of your Dad.
• "My Dad has considered to contact the plaintiff's lawyer"—ABSOLUTELY NO WAY. He could be found to have interfered with his own defense if he OR YOU were to ever have any contact with the plaintiff or her attorney. DANGEROUS. Don't risk it.
• "In such case, when should my dad hire his own attorney? Now? After $15K payment from insurance company?"—Once again, ANY PAYMENT WHATSOEVER FROM YOUR DAD'S INSURANCE COMPANY WILL BE MADE ONLY ON THE CONDITION THAT THE SETTLEMENT IS IN EXCHANGE FOR A FULL GENERAL RELEASE.
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 locate the feedback form on this site and leave some feedback for me.
Best Wishes to you and to your Dad,
Dr. Settlement, J.D. (Juris Doctor)
http://www.SettlementCentral.Com
