Lindsay Lohan Settles Beef With Paparazzo ... Over Squashed Foot

It's a miracle ... Lindsay Lohan actually made one of her many legal problems go away ... settling a lawsuit outside of court with the paparazzo who claimed she and her assistant ran over his foot.

As TMZ previously reported, Lilo was sued by Grigor Balyan way back in 2010. The photog claimed LiLo's assistant, under LL's direction and while driving LL's car, ran over his foot as he attempted to film them leaving an L.A. nightclub. He said he suffered orthopedic and neurologic injuries.

The case has been dragging on for years ... and to make matters worse LiLo blew off a deposition last month in L.A. ... making it appear like there was no end in sight.

Until now ... according to court docs LiLo and Grigor struck a deal outside of court and the case was settled on May 2. Sources tell us, Lindsay was willing to cough up the cash, but luckily, the insurance company is footing the bill.

One down. A million to go.