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Personal Injury and LLC Question

Los Angeles, CA |

I reside in California and rear ended an automobile in Nevada. The driver retained counsel and is claiming medical damages that is in the area of $50k actual damages. My insurance policy is only for 30k. My insurance company has already offered the limits and but the plaintiff is going forward and is now refusing to negotiate toward settlement. I started a single member LLC after the accident and the business has little expenses, no debt, and some income. Based on the nature of the business, I can not accept another member into the LLC. If the plaintiff obtains a large judgment against me can I protect whatever present or future assets business I have in the LLC against this personal debt?

Attorney Answers 6


  1. Probably not.


  2. Had you started the LLC before the accident, you would be in better standing. If the plaintiff is successful at trial, his attorney would argue that you are trying to hide assets and would probably attempt to penetrate the corporate shield in search of assets. If the plaintiff is successful, and you have personal checking and savings accounts in the bank, the plaintiff will be able to levy your money. Get local help. Good luck.

    This answer is provided by Manuel A. Juarez, Esq., 'El Abogado Hispano de California, and it is of a general context and is not intended to form an attorney client relationship. I am licensed only in California. This information is good only in California and it is not to be taken as legal advise in any other type of situation. Esta respuesta es del Abogado Hispano Manuel A. Juarez, El abogado Hispano de Accidentes, Bancarrotas y Divorcios de Oakland, Hayward, San Francisco, y no forma una relacion de abogado y cliente. Soy licenciado solo en el Estado de California.


  3. I am not in your jurisdiction but I believe the short answer is No. Here is the more interesting issue for you. You have a 30,000.00 policy. Your insurance company has an obligation to try to settle the case within your policy limits. I hope your insurance company retained experts to look at the claimed damages. You really should ask this question to your the insurance company attorney that was provided to you under your insurance policy.

    I am an Arizona attorney. AVVO does not pay us for our responses. Simply because I responded to your question does not mean I am your attorney. In Arizona a non-lawyer is held to the same standards as an attorney so there are dangers to representing yourself. This is for informational purposes only. If you require legal assistance an in depth discussion of your case is needed as there are many other issues to consider such as defenses, statute of limitations, etc.


  4. You are probably not in good shape since it will be difficult to protect your assets. This stresses the importance of carrying high policy limits.

    This communication does not create an attorney-client relationship. This means that I am not your lawyer and I will not appear in court simply by posting on this site. If you would like me to represent you, you must call my office, sign a written fee agreement and pay a legal fee, assuming I do not have a conflict of interest and you are in Southern California. If I respond to your question and you have follow up questions by posting on this site, I may or may not reply. This information should not be construed as legal advice. I am offering my opinion. Each person's case is unique, and that's why you should contact a lawyer over the phone for a consultation for your situation. That's why you should not rely on any response that an attorney posts on this site. I am licensed in California. I am not licensed in another state or country. I do not practice law outside of California.


  5. I am not licensed to practice law in Nevada, which is the state law that would likely be applied to your lawsuit since that is where the accident occurred and where the injuries were sustained. You should speak with a licensed NV attorney.

    However, both California and Nevada have Uniform Fraudulent Transfer Acts. The CA version can be found here: http://www.leginfo.ca.gov/cgi-bin/displaycode?section=civ&group=03001-04000&file=3439-3439.12 And the Nevada version can be found here: http://www.leg.state.nv.us/NRS/NRS-112.html

    Under both CA and NV law, a transfer is considered fraudulent as to a creditor if the debtor made the transfer or incurred obligation with either (1) actual intent to defraud, hinder or delay any creditor of the debtor; or (2) without receiving in return reasonable value in the exchange or transfer and the debtor (1) was engaged or was about to engage in business or transactions for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or (2) intended to incur debts reasonably beyond the debtor's ability to repay them when due.

    Plus, it doesn't matter when you make the transfer in regard to when the creditor's claim arose or the obligation was incurred by the debtor.

    Long story short, any transfer of personal assets to your LLC to avoid paying a creditor will not ultimately protect those assets from the judgment. The judgment creditor can move the court to find the transfer was fraudulent. BUT, we are assuming that the person who you rear-ended is an actual judgment creditor. That's a big assumption.

    This response does not create an attorney-client relationship between you and I. I am not your lawyer and I am not representing you in the underlying issue stated in your question. The response I have offered is not intended to be relied upon, you should seek out an attorney to assist in this matter.


  6. These kinds of plans do not work.

    The materials available at this web site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Howard Roitman, Esq. and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

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