Opinion ID: 2572696
Heading Depth: 1
Heading Rank: 9

Heading: mahler v. szucs ; winters v. state farm; safeco v. woodley

Text: In Mahler v. Szucs , this Supreme Court held for the first time that recovery of medical special damages against a third party which included the medical specials paid under the PIP portion of a policy created an equitable common fund, which was an exception to the American Rule on payments of fees in civil cases. Mahler, 135 Wash.2d 398, 957 P.2d 632. The plaintiff's lawyer there generated a fund State Farm shared in and recovered its PIP payments. Id. at 426-27, 957 P.2d 632. In Winters v. State Farm, the court further refined the doctrine. Winters, 144 Wash.2d 869, 31 P.3d 1164. The question there was whether adding UIM benefits to the moneys recovered from the third party changed the equitable nature of the fund. It did not: [i]n each case, the insured secured the proceeds from the at-fault driver or the driver's insurer and then recovered from his or her respective UIM carrier. These pooled funds became a common fund from which the PIP insurer was able to recoup payments it had made.  Id. at 881, 31 P.3d 1164 (emphasis added). And recently in Safeco Insurance Co. v. Woodley , the court again refined the Mahler doctrine by holding that it did not make any difference whether the UIM proceeding preceded or followed a recovery against the third party tortfeasor. Safeco Ins. Co. v. Woodley, 150 Wash.2d 765, 771-72, 82 P.3d 660 (2004). The point was that a common fund had been created with UIM and third party moneys from which the first party carrier, there Safeco, could recover its PIP payments. So ultimately whether the PIP carrier recovers from a fund which includes only moneys from a third party defendant or a combination of UIM and third party moneys, it makes no difference, a common fund has been created. These holdings are consistent with the purpose originally articulated for the common fund doctrine. See Parker, supra, at 321-23. But no money has been recovered here which would create a common fund. State Farm has simply paid out all that it was obligated to pay out under two separate provisions of its policy, PIP and UIM. State Farm has not recovered or been reimbursed for anything. It simply did not have to pay for the special damages incurred by Ms. Hamm twiceagain a proposition which is not contested here.