Opinion ID: 2572696
Heading Depth: 3
Heading Rank: 1

Heading: Mahler and the Fully Insured Tortfeasor

Text: In Mahler, the insured was injured by a fully insured tortfeasor. Her medical expenses were initially paid for by her PIP carrier. Subsequently, the insured recovered her full damages, including medical expenses, from the tortfeasor. Once the insured was fully compensated, her PIP carrier sought reimbursement of the PIP benefits it paid. We ruled that a PIP carrier seeking reimbursement from the fund created by the insured must pay a pro rata share of the legal expenses the insured incurred in order to recover from the tortfeasor. Mahler, 135 Wash.2d at 407, 436, 957 P.2d 632. As explained in Mahler: This equitable sharing rule is based on the common fund doctrine, which, as an exception to the American Rule on fees in civil cases, applies to cases where litigants preserve or create a common fund for the benefit of others as well as themselves. Id. at 426-27, 957 P.2d 632. The common fund in Mahler consisted of the recovery the insured obtained from the tortfeasor only. From this fund, the insured was compensated and the PIP carrier was reimbursed. Because the PIP carrier reimbursed itself from a fund that the insured created, the PIP carrier was obligated to pay a pro rata share of the legal expenses incurred by the insured to create the fund. Id. at 436, 957 P.2d 632.