Mahler v. Szucs

In Mahler v. Szucs, 135 Wn.2d 398, 957 P.2d 632, 966 P.2d 305 (1998), the plaintiff sustained $ 24,000 in damages resulting from an automobile accident for which she was not at fault. Id. at 406. After receiving PIP payments of $ 4,173.32, she recovered the full amount of her damages, $ 24,000. The PIP insurer then claimed reimbursement of the PIP payment, which would leave the insured fully compensated. Id. The plaintiff agreed on condition that the PIP insurer pay a pro rata share of the legal expenses that she had reasonably incurred to obtain the liability proceeds. Id. at 407. The Court held that each party benefited from a common fund generated by the plaintiff, so each should pay a pro rata share of the expenses necessary to generate that fund. Id. at 426-27. The Court interpreted a State Farm policy provision that required the insurance company to share pro rata the legal expenses of an insured who recovered from the tortfeasor. There, State Farm paid a portion of each injured insured's medical expenses under the PIP coverage. Each insured then sued the tortfeasor and a settlement was reached. The insureds agreed that State Farm should share in the settlement to the extent of the PIP benefits it had paid, provided State Farm shared in the legal expenses incurred by them in recovering from the tortfeasor. The Court agreed with the insureds and concluded that State Farm was required under the policy to contribute to each insured's legal expenses if it received reimbursement for its PIP payments. In Mahler, the Court did not rely upon the common fund doctrine to award fees, but rather focused on a policy provision that was identical to the provision in the policies that are before us in these consolidated cases. Furthermore, the Mahler case is distinguishable in that the injured insureds were each fully compensated by the party at fault.