Can My Personal Injury Settlement Be Taken Away From Me By Someone Else?

Believe it or not, this issue came up recently. I have changed the facts a bit, but imagine the following scenario:

A friend is involved in two lawsuits, one as a plaintiff in a personal injury case, and another one as a defendant. In the first case, he expects that the case will eventually settle in his favor and he will be paid money to compensate him for his injuries.  However, the case is far from over and the outcome is not guaranteed.

In the second case, he is being sued by someone else for property damage and he has no insurance. He is afraid that he does not have the assets to cover the property damage in the second lawsuit, so he asked me: can the proceeds of my personal injury settlement be taken away from me if I lose the second case?

What he was really asking is whether an unresolved personal injury claim is like an asset, such as real estate, an automobile, or cash that can be held and used to pay for damages in another lawsuit. The legal term for this is called attachment.

The answer is, generally, no. In Maine, the courts have routinely held that an unresolved lawsuit arising from a tort, like negligence, is not an asset that can be used for that purpose. See New England Mortg. Servs. Co. v. Petit, 590 A.2d 1054, 1056 (Me. 1991). (A tort is what we call a harm to someone caused by someone else, like someone hitting you with their car, or selling you something really dangerous that then injures you, or someone’s dog biting you, or a health provider not giving you the right medical care).

The courts have taken the position that tort claims cannot be treated like property that someone else can take away from you, in part, because the value of a pending lawsuit is not really knowable, and it’s pretty uncertain as well. Who knows what the result will be? So it is not something tangible, like a car or a bank account or a house.

Keep in mind that the rule is different if you already have the settlement check in hand. An award to compensate for personal injuries, meaning that you already have the money or the right to receive the money, may be held and used to pay damages in another lawsuit against you. The good news for personal injury plaintiffs is that the Maine State Legislature has created an exemption for the first $12,500.00. 14 M.R.S.A. § 4422. For example, if you receive a $25,000.00 settlement in the first lawsuit for your own personal bodily injuries, then only half ($12,500.00) may be held and used to pay damages in the second lawsuit where you are the defendant.

This situation will probably not come up very often, but, if it does, then you should call a law firm with experience handling complex personal injury claims. If you have any questions, please feel free to call Braden Clement at 784-3200 or email him at bclement@sta-law.com.