Tax/Accounting question regarding LLC's?

I can't sleep, this question popped up.
Say a company is subcontracting a delivery driver, to assist in tri-state deliveries. The driver is leasing it from the company and is operating as a sole propriator LLC.
The truck breaks down, and the driver abandons it under a load which has parishables. Causing the company to fork out 5000 to recover the truck, replace parishables, and fix whatever went wrong with the truck.
They bill the subcontractor 5000 for the damages, which he does not pay.
The company is operating on an cash basis, and the subcontractor is operating on an accrual basis.

Who claims it on their taxes?? If they both do it would be considdered double dipping right?? Also with the subcontractor as a LLC, he is not held personally accountable for the debt his business accrued, so would he still put this on his Schedule C?

You said the driver is leasing the truck, but it sounds like the LLC leased the truck.
Referring to the tax issue only and not adjustments to accounting records for accrued liabilities.
The company leasing the truck will take the lost expenses.
The LLC has no losses so it should not be taking any.
If however, the LLC pays for the losses, the LLC will take the expense, and the company with the loss will take the payment as other income and take the loss expenses, creating a wash.

I can see why you might be unable to sleep over this series of issues if you are personally involved or liable. But to answer some of your question the subcontractor can not take expenses that he did not pay. The issue of his liability for the $5,000 would require a great deal more information to determine.

whoever pays the $5000 in damages is who gets to deduct it and claim it on the taxes.