I sold a vehicle on Craigslist, was negligent, & now I owe an insurance company 20k in damages?

Question

I sold the vehicle, I had them sign their name and everything necessary on the pink slip, as well as my signature to release it, but forgot to remove and take the release of liability. The person has caused damages worth 20k yet I am liable. I have records of the conversation leading up to the sale, the Venmo Transaction we used (she purchased with virtual cash), and the bank statements, as well as the Craigslist post. I would also like to note that this happened in Los Angeles while I was in a different city. I messed up by not informing the DMV, It is my first major sale and I was unaware of the proceedings. The insurance of the other party is asking for the 20k and I’m not sure what my next move should be, I did not have the car insured since I just left it in the garage, I thought they would have it insured since I explicitly mentioned it in the description. which type of lawyer should I look into?

Tyler Young · Answer

Although insurance follows a vehicle, the driver is typically the person who is "responsible" and will be the named defendant in any lawsuit.  Said another way, unless there are independent allegations against you (like you sold a defective vehicle etc...) you shouldn't be a party to any lawsuit by the injured person.  He/she should sue the driver of the vehicle.  That driver should have insurance.  Even if that driver isn't insured, he/she should be the named party in the case.  However, you need an attorney to help you present this defense.   
 
You need an insurance defense attorney or a civil litigation attorney.  Unfortunately because you don't have insurance, you'll need to pay them until they can sort this out for you.

William John Light · Answer

If you were an owner at the time of the collision, your liability is up to $5k for property damage and up to $15k/person or $30/accident for bodily injury.  You have a right to cross-complain against the purchaser for indemnity (get paid back for whatever you owe).  You might be able to negotiate for even less if you file for bankruptcy, or threaten to file for bankruptcy.  Or, you can dispute who is at fault for the collision (argue that the damaged party is partly at fault and the amount for which you are liable is reduced by that percentage)If the amount is under $10k, you can pursue that in Small Claims.  However, a judgment is just a piece of paper.  You still need to collect.

Steven M. Sweat · Answer

This is a tough one.  You will probably not find an attorney willing to help you on anything other than an hourly basis with an up front retainer.  Unfortunately, to be relieved of liability, you must comply with the legal requirements of filing with the DMV (See Savnik v. Hall (1999) 74 Cal.App.4th 733).  You may want to argue that  your liability should be limited to $15,000 under the "permissive user statute" but, there are ways of getting around this.  The best you may be able to do is negotiate a settlement amount (reduced by anything they recover from the driver) and try to get a payment plan on that.  You can also consider filing bankruptcy to discharge the debt.  Hope this helps!

Theodore Allan Greene · Answer

We have a similar case. You should hire an attorney to represent you in this matter.

William John Light · Answer

Make that ". . .up to $15k/person or $30k/accident. . . ."

Dale S. Gribow · Answer

more info needed. 
 
you screwed up and it will probably cost you money to correct this. 
 
the new owner was responsible but I suspect the victim will name everyone in a suit....it would. 
 
you should make an appointment with a litigation attorney...preferably one with defense experience. 
 
before you see him/her, write out a detailed summary of the facts with copies of all supporting documents.

Q: I sold a vehicle on Craigslist, was negligent, & now I owe an insurance company 20k in damages?