what should i do?
Not enough info here to give a good answer. Call the letter writer and see what they want to discuss. By "prop" I assume you mean settlement proposal? You should also consult an attorney with experience in the area of law to which the suit is related to make sure you don't agree to something you shouldn't and to ensure you are released fully if you do settle. www.galivanlaw.net
In order to initiate a lawsuit, you need to be formally served by a process server. A letter probably doesn't cut it.
Your question cuts off -- however, you appear to be asking whether you should respond to a settlement request. The vast majority of cases settle before trial and it is often in both parties' best interest to reach a settlement. However, be aware that any response you make may be discoverable -- so be careful what you say in responding. Accordingly, it is best to respond through an attorney.
Forward all documents to your insurance carrier and cooperate. They have a duty to defend you if you are sued. Don't worry but DON'T TALK TO ANYONE other than your insurance company and the counsel they assign.
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