QuestionMy car along with 5 others were damaged and or totaled (mine $7700) in a university parking lot in NJ by a DWI driver. The owner of the car was a passenger in the vehicle and carried only 10K thousand property damage limits. I was not carrying collision on my vehicle and was told by the insured’s insurance company that after subrogation I wouldn't receive anything near the value of my car based on the number of claimants and the $10K limit.
I have initiated a small claims action against the insured and I have a court date. What suggestions would you have regarding this case?
Thank you for your time.
Sincerely
Brian
AnswerHi Brian,
HOLD UP ON SMALL CLAIMS PENDING REVIEW OF YOUR FILE.
Your simple case should have a simple result. However, as you will see below, there are a few different factors that you need to consider since, according to your statement, your own company does have a subrogation claim. They may be agreeable to pursing their claim via the intercompany arbitration agreement, thus possibly leaving you open to bringing a lawsuit versus the tortfeasor.
You have not explained whether you intend to pursue some insurance settlement or to forego the entire settlement and to go only with the small claims case.
You cannot settle with his insurer AND sue him at the same time. The settlement will be paid ONLY after you sign a release of the tortfeasor. Unless you are able to bargain for a partial release (very rare), that release that will be signed by you precludes you from going after the tortfeasor in another action. You only have ONE cause of action, although with agreement of both insurance companies AND the tortfeasor you could split your cause of action. But that is very rare, and is not likely to happen in this case.
I think you have been ill-served with advice to file in small claims court UNLESS you were advised of and made the decision to forego and to ignore the insurance benefits. You CANNOT HAVE BOTH since if you claim under his insurance, then you will have to sign a settlement release of all claims. Hence, once that is signed, there is no right to pursue a small claims court action. Any judgment you get will be voided if you have already signed a release to get a payment from his insurance. Plus, if you go ahead and get a judgment and try to enforce it after signing that insurance release, then you will be subject to paying his costs to set aside your judgment.
Plus, how will you treat your subrogation issues vis-à-vis the small claims action? If your company is going to pursue a subrogation claim, how will their recovery impact your small claims action, UNLESS you get an agreement to split your cause of action?
What should you do?
FIRST, check to see if you have any UIM rights. There is a UIM provision for property damage, and perhaps you have some rights under your policy. Have you checked with your company to make sure that you do not have some access to a UIM property damage claim? Make sure of that before you follow thru with the court case.
SECOND, discuss insurance with the adjusters to see what insurance the driver has. It is the owner's insurance that you are going to tap first, but if the driver has insurance, then you ought to be able to tap his insurance.
THIRD, learn about subrogation and how to fight your company’s claim. Although most defenses to subrogation involve larger sums for personal injury general damages (pain and suffering, etc.) which would be lost if the claimant's insurance company were able to have first dollar subrogation rights for the monies paid for medical care. I am not aware of how to defend against a property damage reimbursement subrogation.
http://www.settlementcentral.com/page0459.htm insurance subrogation information page.
FOURTH, discuss the subrogation claim to see what compromises they might make. If you are not willing to sign off on the insurance release, what rights does you insurance company have against your small claims court to pursue its subrogation there?
FIFTH, make your decision as to what you will do versus the tortfeasor. The best result I can think of is to get both insurance companies to agree that you can split your cause of action, and that whatever amount they pay to your own company in subrogation will come off of any judgment you might win against the tortfeasor in court. The danger, as I explained above, is that the company can agree to that, but since they are putting their insured at risk, he should also agree to the court action. You could point out that it could be in his best interests since he would at least have some insurance to cover part of his damages.
I trust that my 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
