I received a phone call from a friend of mine who informed me he was in a fender bender with no remarkable property damage other than superficial scratches. He informed me that he did not call the police for a police report and gave her cash to cover the scratches. He remarked that he trusted the lady and gave her his information such as license tag and number. This reminded me of the Andy Griffith Show episode where Barney bought a car from the proverbial nice little old lady that appeared endearing and trusting but later found the car to be a lemon. The nice little old lady was part of a scheme with another man selling lemons to people. I asked him if he took any photos of her car to have proof as to the extent of her damage. He responded no, she was a very nice lady. I asked him did you get a receipt for cash payment to her as full settlement of her property damage. “No we were each in a rush.” While in many circumstances, I am confident many nice little old ladies or any person for that matter may be honest and settle up on property damage without manipulation and damaging the car after the fact to claim more money. However, as a personal injury attorney it is my job to advise clients or prospects to avoid foreseeable circumstances where they may be taken advantage of. However, I certainly understand the desire to avoid filing a claim with your auto insurance over such a small claim that will likely equal your deductible and not worth the rise in premium.
This gives rise to the first question: Do you have to file a police report? In Tennessee you are required to call police and have a police report drafted. This report will give each party contact information of the other, memorialize the facts on the scene, report specific insurance policy information, and property damage detailed. After a motor vehicle collision, you want all witness statements taken like a “snapshot” where their memory is clear and not fogged by the lapse of time.
The next question is why not give the other party cash to settle up minor property damage at the scene. There is no proof of payment after the fact if you were not given a receipt that clearly states what you paid. What is the advantage of writing a check? The clearing of the check will produce a record into perpetuity to demonstrate proof of payment. Furthermore, a check can be used as a negotiable instrument for “accord and satisfaction” wherein negotiation and endorsement of the check can constitute as a settlement release of all claims the other driver may have. If we are talking about several hundred dollars or less, you can write on the memo line “final settlement payment” or “payment in full” on the memo line that can serve as a release of claim or liability within the laws of contract. I recommend writing on the rear the following: “negotiation of this instrument constitutes a release of all claims and liability of payor by payee.” In essence, they agree to not sue you or make further claims of payment for their damages.
I advise in the alternative to draft a written statement of the driver releasing you from all liability and future claims for and in consideration of payment received. Your cash payment to the nice little old lady can have legal effect as a verbal contract. However, a small claims court such as general sessions will have to determine the credibility of each party in the event the other driver files a lawsuit. The four corners of a written agreement for the Court to evaluate will negate any new arguments or claims by the other driver. You can also find generic templates of settlement releases on the internet that you can print. In essence it is a contract.
Why take photos? Common sense is my response to that question. We all have smart phones and therefore use it take photos of the property damage to each vehicle involved.
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