gut;1315672 wrote:Hire a lawyer and immediately counter-sue for legal and related costs (realizing she may have no money to ever collect a judgement against). If that doesn't scare her into dropping, then hire a PI and start building a case.
Again, I have no experience with this type of law, but typically, I don't believe you can sue someone for legal fees unless the complaint is clearly frivolous or a statute explicitly provides for it. Because there was an actual accident, this probably isn't clearly frivolous, so I doubt you can recover costs.
I would also be careful about reading too much into her motives. It's easy to ascribe bad faith or all sorts of ill intent to people, but most small claims type suits that I see tend to be based on miscommunication or bad advice. I suspect she had some lingering issues and was encouraged by an atty to file as a placeholder to get in before the limitations period ran.
Starting with your ins co. is the best bet. They'll be able to give you some advice. But remember that they don't represent you directly: they're concerned with their liability, and while they may be on the hook for some or all of the suit against you, they're still not directly representing you (e.g., if the policy provides $5k of coverage and the suit is for $25k, your interests and theirs might be cross-aligned). Regardless, starting with them is a good bet to get some advice and explanation of the process.
If you are going to be sued, remember that the amount claimed and the amount they win is not the same thing (she could sue for $25k and get $3k), and the amount they win and the amount they collect can be different, too (if you're poor and judgment proof, she can get a lien, but you can't squeeze blood from a turnip). All of these factors allow you to push for a more reasonable, affordable settlement if you have to.
