In any auto accident case, those who are injured as a result of another’s negligence have a right to assert claims for, among other damages, lost income. This usually comes in two forms:

  • Lost income
  • Lost compensationtraffic9

Lost income refers to the wages you did not receive as a result of being out-of-work due to injuries caused by the accident. Lost compensation refers to other types of employment compensation, including use of sick days, vacation days, pay bonuses and other perks and benefits you had to use or lost out on because of the crash.

Those who are self-employed have the same right to collect on lost income and lost compensation, but it can be tougher to prove. In some cases, you’ll need to hire a forensic accountant. 

Your Miami injury lawyer should be experienced in these matters, and should advise you whether expert testimony will be required to prove to the court the full scope of your business losses.

In the recent case of Cleveland v. Ward, a plaintiff out of Montana was barred from collecting losses suffered by her business because, the court ruled, the business was not a named party to the case. Procedural issues are a consideration your attorney must weigh as well.

According to court records, plaintiff was injured in a crash that occurred in June 2012 when she was stopped in traffic. Defendant’s vehicle struck plaintiff’s from behind, propelling plaintiff’s vehicle into the one in front of hers, totaling plaintiff’s vehicle and causing plaintiff serious injuries.

Defendant admitted from the start that she was negligent – often a significant issue of contention in injury cases. But plaintiff still had to prove her damages. She filed a lawsuit to recover those damages. She asserted claims for:

  • Past medical costs
  • Emotional distress
  • Physical injuries
  • Business loss/ lost income

Defendant filed a motion with the court that would exclude any reference to damages suffered by plaintiff’s business. The district court granted that motion, finding the company had no right to collect because it was not a named party to the case.

The court also ruled on a number of other defense motions that included barring plaintiff’s doctor from testifying as to the cause of her rotator cuff tear because he had avoided giving an opinion by saying any connection to the accident would be “purely speculative.”

The court also prohibited plaintiff’s physical therapist from testifying about the rotator cuff injury.

Ultimately, jurors returned a verdict in favor of plaintiff for $10,500, but awarded her just $3,000 to adjust for offsets of previously-made payments.

Plaintiff appealed to the Montana Supreme Court, arguing trial court abused discretion in not allowing her witnesses to testify as to cause and also for not allowing recovery of damages by plaintiff’s business.

The court first ruled on the witnesses: No error made, as those professionals were unable to give an opinion as to the cause of the shoulder injury.

As for the business, she alleged an increase in payroll expenses by the company and that she had standing to assert claims for these losses because she is the sole shareholder. However, the court noted that a corporation is a separate and distinct entity from the stockholders, and generally, stockholders can’t bring claims for losses sustained by the corporation. That includes profit losses. Therefore, the court didn’t err in this.

Had the company separately filed its own claim, it might have been able to cover those losses.

If you are self-employed and become injured, it can significantly impact yourself, your business, your employees and your customers. As the owner, you have a right to collect damages, but the way the claim is filed is important, and will depend on the complexity of your business model and how the company is legally structured.

Contact us today to learn more about how we can help.

If you have been a victim of a traffic accident, call Chalik & Chalik at (954) 476-1000 or 1 (800) 873-9040.

Additional Resources:

Cleveland v. Ward, Jan. 12, 2016, Montana Supreme Court

More Blog Entries:

Wray v. Green – Stopped Vehicle Accused of “Tailgating” in Crash, Dec. 29, 2015, Miami Car Accident Attorney Blog