Is it moral to sue a friend?

That is rather unethical, seeing as it's trying to cheat the insurance system to get money. And it makes it that much worse that it's your best friend's dad that you're suing, especially since you knew that the brakes don't work. You're rather lucky that THEY didn't sue you for destroying their property. I know that this sounds harsh, but you made a really bad mistake, and you have to face it. Life gets rough, but I know that you'll find a way out of this, doing the right thing.