QuestionMy son was involved in an auto accident. The car is in my wifes name and he is on our insurance policy. If the settlement goes above my liability insurance what assets are considered exempt in South Carolina?
AnswerHi Joseph,
I will answer your question FIRST, and then you can quit reading if you want. But there are some other considerations that always pop up in these kinds of situations, SO if you are game to spend a few extra minutes beyond your immediate question, I am willing to spend the time to lay out for you—and for other readers—TWO additional topics.
FIRST, List of Exemptions
In direct answer to your question, if this case drags on for years, you will need to check the statutes of South Carolina (here is the citation to look up: S.C. Code Ann. § 15-41-30) to get an updated list of exemptions as states often change the exemption amounts. But as of today, in September 2011, here is the list of exemptions in your state. Note that the actual statutory amounts have been increased by 6.8% in July 2010 by adjustments authorized by your State Budget and Control Board. Hence, the following amounts are a bit higher than those you will read in the statute I gave you above, and the numbers preceding the monetary amounts refer to the actual section of the statute for that particular exemption. OK?—here we go then:
Homestead Exemption (residence), 15-41-30(A)(1):
• $53,375 (single owner);
• $106,750 (multiple owners)
One Motor Vehicle, 15-41-30(A)(2):
• $5,350
Household Goods, (household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments) (15-41-30(A)(3):
• $4,275
Jewelry, 15-41-30(A)(4):
• $1,075
Liquid Assets (but ONLY if no homestead is claimed—includes deposits, securities, notes, drafts, unpaid earnings not otherwise exempt, etc.) 15-41-30(A)(5):
• $5,350
Tools of the Trade (implements, professional books, or tools of the trade) 15-41-30(A)(6):
• $1,600
Wildcard, (could be used for interest in any property) 15-41-30(A)(7):
• $5,350
Unmatured Life Insurance, 15-41-30(A)(9):
• $4,275
All of the following exemptions have conditions that are too lengthy to include here, but are listed in the statute:
• Professionally prescribed health aids
• The debtor’s right to receive a social security benefit, unemployment compensation, or a veteran’s benefit, etc.
• The debtor’s right to a payment on account of the bodily injury of the debtor
• Debtor’s right to receive individual retirement accounts
• Debtor’s interest in a pension plan qualified under the Employee Retirement Income Security Act
SECOND, to Set Your Mind at Ease
My purpose here, Joseph, is to interest you in reading further where I will let you know just how remote the possibility is that your assets would ever get tagged.
So I will raise these two topics for you to consider, and hopefully you will rest easy once I am done.
• Vicarious Liability
• Practical Reasons Why it is RARE for a Plaintiff to go After Assets
THIRD, Vicarious Liability
Who told you that YOU or your wife would be on the hook for the negligence of your son? The fact that your wife is on title or that he is listed on insurance are not at all determinative of the issue of liability. In fact, they have nothing to do with liability, per se.
If your son was negligent, and if he caused bodily injury, THEN he is known as the tortfeasor. No one else is liable as the result of his negligence, UNLESS the plaintiff (i.e. the injured party) can prove VICARIOUS LIABILITY. That is a fancy term for ways in which the law does make others responsible for the actions of a person. Think, for example, of an employer and her employee. The employer will be vicariously liable for torts committed by her employee in the course of his employment.
So it is with family members. There are some circumstances that might come into play that could bring the issue of liability to your door. But let's start with the basic law that neither you nor your wife are liability for the negligence of your son merely because your wife is on title of the car he was driving or because he was listed on your insurance.
To prove vicarious liability the plaintiff has to show:
• You or your wife knew that he was incompetent to drive then and there, but allowed him to drive in any event (IF this is the case, have your attorney file a claim versus your homeowners' insurance. It is true that such insurance does not insure negligent operation of a motor vehice, BUT it CAN insure the negligent entrustment of a vehicle); OR
• He was driving with the permission of you or your wife, and he could be said to be doing family business at the time of the accident.
This last sentence imputes liability on the basis of what has become known as "the family car doctrine" or the "family purpose doctrine". What that means is that a family member could be said to be going about the business of the family in his ordinary use of the vehicle, and hence the law is going to consider the heads of the family as kind of in the same position as an employer. In most instances, liability IS imputed to the parents.
There is a lot of litigation on just what is and what is not a family purpose. He does not have to be doing a family errand at the time. For example, a driver going from home to school and then to the mall may not be doing a family errand, but he will be considered to have been driving for a family purpose, hence bringing vicarious liability to his parents.
It often is a different result when the member is doing something prohibited by the family, such as drinking and partying and driving thereafter. But even in such cases, the results are mixed, with some courts denying vicarious liability, and others holding the parents to be liable. If this was the kind of situation for your son's accident, then I would suggest getting an attorney to look this over right now.
FOUR: Practical Reasons Why it is RARE for a Plaintiff to go After Assets
It is smart to be prepared in a situation like this, Joseph, grfand to plan ahead. But I think you may not want to take any kind of direct action to try to avoid execution on a judgment (i.e. transfer of property) UNTIL you obtain a legal opinion that you are, in fact, at risk, and then ONLY if an attorney says that the action will be effective. For example, transfer of property at this time for less than full consideration would be set aside as in fraud of creditors.
The attorney can discuss with you the chances that a plaintiff might pursue you and your assets. The answer to that question will depend in large part on these FIVE factors.
• Whether or not the plaintiff can find another potential tortfeasor (i.e. a property owner who let vegetation grow into the right of way easement, blocking the view; or a city for incompetent road design, etc.).
• The total amount of the damages, also known as the settlement value of the plaintiff's claim; it has to be huge to merit turning down the offer of full policy limits and going to trial instead.
• The total insurance available from your side and the plaintiff's Underinsured Motorist Coverage (UIM).
• The difficulty of proof of both liability and damages, the RISKS, AND the costs of trial.
• The total of assets the tortfeasor owns that are not subject to the bankruptcy exemptions (listed above); again, these have to be huge as well.
Is there REALLY much risk that the plaintiff will turn down an offer of the policy limits so that she can go after your son and you to collect against your non-exempt assets? You know, I best explain that the plaintiff who wins at trial DOES get to collect the judgment first from the policy limits, and then he pursues the tortfeasor's non-exempt assets.
Doctor Settlement personal injury insurance claims have covered all kind of situations in over thirty years as a plaintiff's side trail attorney. Do you know how many times I (or anyone in my office) have turned down an offer of the tortfeasor's full policy limits so I could sue the tortfeasor and pursue his assets? ZERO TIMES. NOT ONCE.
And I only know of two instances in our county where the tortfeasor's insurance policy limits offer was declined and the plaintiff pursued the assets. Only TWO in thirty years; and in our county, I would say that we trial attorneys kept in pretty close touch. We saw each other at the courthouse and monthly luncheons and at continuing legal education seminars. So I think my figure is pretty close.
Why? Look at the list above. Sometimes the plaintiff had a good UIM policy, sometimes the total value of the claim in comparison to the cost and risks of the trial were determined to be not worth the effort. Most often, the tortfeasor just did NOT have a ton of assets to make it worth the fight. Going to trial is not a huge deal in and of itself, since we do that all the time if we do not get a fair offer.
But we hardly ever do that if the tortfeasor's full policy limits are on the table. If the tortfeasor is someone who does not properly insure, so his limits are not well into six figures, then it is unlikely he has much in assets to attract the plaintiff to pursue. By contrast, those who DO have a lot of assets, know that they must insure properly, so their limits are high enough to pay all but the most unusual cases of injury. Does that make sense?
Hopefully what I have written beyond what you asked has set your mind at ease a bit, Joseph.
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,
David,
Dr. Settlement, J.D. (Juris Doctor)
http://www.SettlementCentral.Com
