[ilysemoore]

We are being sued in a civil suit because I pushed (horse play) my friend off a boat into the water and the boat (no I am not the owner) was parked in an area where when he went into the water, he hit a sand bar and broke his ankle. Our Home Owners Insurance refused to cover it saying that it was not an accident even though there was no intention to harm... The boat owner is a huge client, so the plaintiff refuses to sue him for damages because he does not want to sour his business relationship.

The question is this... their attorney and the plaintiff himself would like to go to binding arbitration; have us agree to a judgement against us; then sign a covenant not to collect; and then sue our insurance company for bad faith in order to try to collect the $75,000.00 judgement. My question is the effect on our spottless credit report... if there is a judgement, but at the same time they are not trying to collect anything from us (our insurance company instead), does this judgement still get reported on our credit report? If there is an agreement on their part not to collect from us, then how would it affect the credit report?

Thanks...

[ScottGem]

And what does your attorney say? This all sounds like a bad idea. Yes the judgement would probably be listed on your credit, but as a civil suit for damages, not a default on a debt. So it should not have too bad an effect on your credit.

I don't understand how your Home Owners Insurance comes into play. Your insurance comvers you for damages that occur on your property. I don't think to would cover for something like this, even if it wasn't due to your own negligence. I'm also wondering where the $75K comes into play. That seems an awful lot for a broken ankle.

[ilysemoore]

Thanks for the quick answer... the Home Owners comes into play because our policy does have coverage (for liability) if we are sued in a lawsuit; however they do not feel that they are obligated in this case and have denied the coverage because it was an intentional act even though there was no intent to harm. The Plaintiffs have $20,000.00 in unpaid medical bills (that no one has attempted to negotiate down) and they are looking for a big payout for damages... I am only assuming because their contingency attorney wants to see this through to try to recover the time he has put into it. It has already cost us $5000.00 plus a new retainer of $5000.00 to this point and our attorney couldn't even advise us if a judgement would have an effect on our credit... if that answers your questions about what our attorney has to say about this... Thanks again for answering so quickly.

[ScottGem]

Well then it would depend on how your policy is worded. I'm wondering if your friend decided to sue for $75K before or after they denied your claim? If its was before, that could be why they denied it. They might have been willing to pay medical costs, but not unspecified damages.