QuestionHello,
I had an accident April 24,2006 with an under cover police officer. I was making a left turn on green and I was just about done with my turn when I got hit on the right side, towards my back tire of my truck. There was no way I could see the car coming and because the police officer had the right of way I got the ticket. The police officer felt so bad that he gave me his card and said not to worry about anything because he knew it was his mistake and said that he wouldn't show up to court and he didn't so the case was dismissed. The judge asked if the police officer was present and we said no and she asked the cop who gave me the ticket if anyone was hurt and she said no and said okay case dismissed. Today, October 16, 2007, I receive a letter from a law firm representing State Farm, stating that I need to pay State Farm $10,000.00 within 20 days, if not I will have my license suspended and will be reported to the Credit agencies! They said that the officer filed for bodily injuries and State Farm issued him a $10,000.00 check and since I only had PIP insurance and not bodily injury insurance I now have to pay them back! This is crazy, I don't know what I can do to fight this because the accident was not a big and no one was injured so is this legal and if so what can I do at this point? I'll be paying this for the next 15-20 years = (
I appreciate any help I can get.
AnswerHi Michelle,
It sounds like you are in a pretty tough spot, and although I do not EVER condone driving without liability insurance, I cannot just hang you out as an example of what NOT TO DO. Hence, I will put in an hour or so to give you a through lesson on what is happening to you, plus two ideas of how to get out of it. Bottom line, as you are about to find out: IT IS A LOT MORE EXPENSIVE TO DRIVE WITHOUT INSURANCE than just buying insurance to begin with.
The law firm is pursuing the rights of the injured officer, which rights were owned by State Farm since they paid his medical bills or other losses, and they were surrogated to his rights against you.
The officer did as he said he would, and let you skate without getting a ticket. But he must have had some medical treatments or some injury for which State Farm paid pursuant to its policy. Hence, State Farm now owns his rights versus YOU.
The VERY FIRST THING to know is that the rights now owned by State Farm are SUBJECT TO THE SAME DEFENSES AS IF THE OFFICER brought a claim versus you. In other words, you recite everything he told you and contend that he knew he was partially at fault. Sure, you may have turned in front of him, but judging by where he hit you, he HAD THE LAST CLEAR CHANCE TO AVOID THE ACCIDENT.
Hence, this is your defense to the action: contend that he had the last clear chance to avoid the accident, and but for his speed or his inattention he would have been able to avoid hitting you.
Hence, he is AT LEAST 60% AT FAULT. Thus, to begin with, you will accept liability for only 40% of the loss, or $4,000.
NOW, the SECOND DEFENSE to what the law firm is going to try to do is to fight through the state department of financial responsibility because their affidavit of loss WILL NOT BE TIMELY FILED.
Of course I have no idea what the laws are in your state, but in most states, a victim who wants to invoke the state financial responsibility laws MUST FILE AN AFFIDAVIT OF LOSS WITHIN A TIME FRAME, USUALLY 60 DAYS TO 90 DAYS FOLLOWING THE ACCIDENT.
So, you need to find out what that threshold is, since it should be jurisdictional. In other words, the state cannot suspend your license based upon an affidavit that is filed late. Again, that MAY NOT be the law in your state: you are going to have to make the calls to find out.
Let me explain the state financial responsibility laws so you can get an idea of what penalty you will face if State Farm can in fact invoke the laws to collect from you.
If the victim of a negligent driver without insurance does timely file an affidavit of loss with the state department of financial responsibility, then, in most states, the department will send a certified letter to the last known address of the negligent driver (that is YOU).
Side Bar Here: ALWAYS UPDATE your state department of licensing as to your current address. If you do not, then you will likely not receive any of the notices that they mail to you. And IT IS NOT A DEFENSE that you did not receive the notices, since the law states that they only have to mail them to the last known address and service upon you is presumed by that mailing.
In the certified letter you will be informed of two things. First, unless you post financial responsibility for the accident, or make arrangements to pay the losses you caused, then the state will suspend your license until you do so.
Furthermore, whenever you again drive, you MUST FILE PROOF OF INSURANCE with the state, which is called a “SR-22 FILING”. You can Google that term to see that it is an added expense to your insurance, and it will probably remain in effect for one or two years.
You may satisfy the financial responsibility law in one of two ways. First, you can reach an agreement with the victim, either paying him off in cash or making an arrangement for payment over time. Let’s say that you took a bunch of photos of the intersection and did some drawings and thru negotiations, you got the law firm to agree that the officer was maybe 40% at fault. That means that you would agree to take on 60% of the loss, or $6,000. Then you execute a promissory note agreeing to pay $100 a month at 6% straight interest, and the law firm will tell the state that you have complied with the financial responsibility laws.
On the other hand, let’s say that the law firm will not give you the time of day, and they want the full $10K. Then you go to the bank and borrow $10K and you put it into an interest-bearing blocked account (the state will handle the ownership block, so that you cannot withdraw unless they approve), and you will have satisfied the duty to post financial responsibility. Hence, your license will NOT be suspended, and you will get all of your money back, plus interest, less any amounts that you are adjudged to owe.
In the example immediately above, let’s say that you and the law firm cannot agree. Then you get a bank loan for $10K and you deposit it with the bank earning 2% interest per annum in an account that is blocked with entry limited to you and the state department of financial responsibility. Are you following this? If you get lost, go back and read, or just send me another question and let me know where you got hung up and I can explain it over again. Fair enuf?
So, in this latest example you put the full $10K in an account and the law firm files suit and after two years it is heard and, as we predicted above, you owe 60%, or $6,000. The balance in your account is now $10, 404 (2% interest you earned, compounded annually). The state will take $6,000 from that balance, leaving you the balance of $4,404 to repay part of your loan.
To summarize, you have three ways to avoid having your license suspended:
#1. Check to see if their affidavit is way late to be filed (like OVER one year late!) and argue that the filing of the affidavit is jurisdictional.
#2. Use the arguments of negligence I gave you above, and reach an agreement with the law firm to pay about half of the amount owing.
#3. (In the event #1 or #2 do not work), then deposit the amount in the bank and fight on.
OK, that is the complete tour of the average state financial responsibility law. Only one thing remains: what if you win #1 above, and they cannot invoke the law to suspend your license? Well, they can still sue you. I would tell them that you have no assets and that if they sue you, then you will declare bankruptcy and discharge the judgment. A law firm is getting paid only based upon what they collect, so if you show them that you are prepared to discharge that judgment in bankruptcy, then they ARE NOT GOING TO SUE YOU. It is no loss on their part; they are just going to walk away if my experience holds true.
Now that I have given you so much of my time, Michelle, I want you to purchase liability insurance TODAY. Do not delay. It is necessary to drive. Also, remember to do your correspondence with the law firm IN WRITING ONLY.
I trust that my efforts have been helpful for you, and hence I respectfully request that you take a moment to find the feedback forum on this site and to leave some feedback for me.
Best wishes,
Dr. Settlement, J.D. (Juris Doctor)
www.SettlementCentral.Com
