Demaris Meyer sued the Oscar-winning actor in U.S. District Court in February, claiming he was negligent when the car ran off the side of a rural highway near his Mississippi Delta home last summer.
The 1997 Nissan Maxima belonged to Meyer, but Freeman was driving when the car flipped several times and landed upright.
Details of the settlement were not disclosed in court records posted Thursday.
Freeman's attorney, Jack Hayes Jr., would not discuss the terms of the deal, but said "we're all glad it's over with."
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