What is our liabiltiy regarding a car that we gave our daughter as a gift?

Question Details: We purchased a car as a graduation gift for my daughter. She had an accident and is now being sued almost 2 years later. We were the registered owners at the time of accident. Since the car was not garaged on our property, my daughter had it insured on her. We just received a complaint regarding the accident. We bought the car for her and she insured it. She lives 3 hours away, however the registration/title wasn't changed over to her yet. We are being sued for medical expenses even though we weren't driving. My daughter was to be the owner of the car. Also, we feel it was not negligent entrustment because my daughter took driver safety courses and has a valid driver's license and is an honor student. The accident, which I never heard any details about until now, was minimal. My daughter's car wasn't damaged and she wasn't hurt.

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