If my wife’s responsible for a car accident during the operation of our LLC, how much of our personal assets would be at risk?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
If my wife’s responsible for a car accident during the operation of our LLC, how much of our personal assets would be at risk?
My wife is responsible for a car accident which happened when she was out for a delivery for our LLC. She and I own a LLC with S corp. election. She was driving our family car which is also used as our business car. I wonder if the other party is allowed to chase after our personal assets, or only the assets under the LLC? Will our total personal assets be liable or only 50% of our total personal assets would be liable? since only she was driving the car at the time of the accident.
Asked on June 24, 2012 under Accident Law, Texas
Answers:
B.H.F., Member, Texas State Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
Both your wife and your company could potentially be liable. Your wife individually because she was the driver and because it was a personal vehicle, not a company vehicle. The company could be liable because she was performing a function for the company. Before you make any final decisions on what to do, visit with a person injury defense attorney. Take your company structure and copies of all of your insurance policies. There may be a way to maximize these policies to minimize the exposure of you and your wife's personal assets. Texas is a community property states, so a creditor can attach any non-exempt property to satisfy a judgment that is unpaid by your insurance company. This means anything that she has an interest in-- even if you share an interest. However, some property, like a homestead is exempt. When you are visiting with the defense attorney, you may want to spend a few extra dollars to go over your policies and the best way to have your policy structured if you are going to continue using vehicles in the course and scope of your business. The type of coverage you have and how the vehicles are titled, can help prevent a stressful repeat in the future.
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
If your wife was driving for business, then the LLC could be liable under the theory of "respondeat superior"--e.g. employers are liable when employees cause injury or damage in the course of employment.
Your wife may also be liable as the at-fault driver--if she was at fault: any at-fault driver may be held personally liable, in addition to holding a car owner or employer liable. (Remember: the mere fact she was in an accident does not, by itself, make her liable; she must also have either been negligent, or careless, or else have done something deliberately wrong.)
Since TX is community property state, it would seem that half of your marital assets, all of her personal assets, and your LLC could be liable.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.