Quote Quoting DDSA
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Is it proper or improper for my friends son to send a letter to the buyer requesting or proposing a settlement in an amount to cover the loss of his vehicle in order to settle without him having to go further through the court process.
There is nothing improper about sending the letter offering to settle for an amount less than the amount sued for.

To that end your son should read Rule 68 of AZ Rules of Civil Procedure:

https://govt.westlaw.com/azrules/Doc...a=(sc.Default)

It is customary to cite the rule when making the offer so that the offeree is aware of the risk of rejecting the offer.

Now, if I am reading it correctly, the seller did not own the vehicle at the time of the accident and the buyer was not the driver that caused the accident and the buyer had reported the vehicle stolen earlier that day prior to the accident.

If that's correct then the title issue is irrelevant. The seller has documentation of the sale and the buyer has a police report of the theft. That the buyer didn't title the vehicle nor buy insurance on it has nothing to do with determining if the buyer is responsible for the accident.

The seller certainly isn't.

To prove that the buyer was responsible for the accident requires proof that the buyer negligently entrusted the vehicle to the driver.

Arizona recognizes a cause of action for negligent entrustment as set forth in Restatement (Second) of Torts (Restatement Second) § 390 (1965), which provides:

One who supplies directly or through a third person a chattel for the use of another whom the supplier knows or has reason to know to be likely because of his youth, inexperience, or otherwise, to use it in a manner involving unreasonable risk of physical harm to himself and others whom the supplier should expect to share in or be endangered by its use, is subject to liability for physical harm resulting to them.

the elements of an Arizona common law negligent entrustment claim are:

(1) "that Defendant owned or controlled a vehicle"; (2) "Defendant gave the driver permission to operate a vehicle"; (3) "the driver, by virtue of his physical or mental condition, was incompetent to drive safely"; (4) "the Defendant knew or should have known that the driver, by virtue of his physical or mental condition, was incompetent to drive safely"; (5) "causation"; and (6) "damages."
https://scholar.google.com/scholar_c...=en&as_sdt=4,3

That the car was stolen would appear to eliminate any liability on the part of the buyer unless you can first prove that the theft report is a fake and then prove the elements of negligent entrustment.

Here's something else that your son needs to understand. In Arizona the Justice Courts are not small claims courts. For claims from $3501 to $10,000 the Justice Courts share jurisdiction with the Superior Courts and all of the Rules of Civil Procedure apply including rules of evidence.

https://govt.westlaw.com/azrules/Bro...a=(sc.Default)