Opinion ID: 2585097
Heading Depth: 4
Heading Rank: 2

Heading: Sidney is entitled to a pro rata award of attorney's fees and costs from Allstate.

Text: While we conclude that Sidney is not entitled to receive from her UIM carrier add-ons to the liability settlement, we also recognize that in pursuing the liability settlement Sidney procured a direct benefit for Allstate. Is she entitled to a pro rata award of attorney's fees and cost for this work? We conclude that she is. In Cooper v. Argonaut Insurance Co., [53] we interpreted a workers' compensation statute as providing that, where an injured employee is ordered to reimburse compensation as the result of a third-party recovery against a tortfeasor, the amount reimbursed must be reduced by a pro rata share of the attorney's fees incurred by the injured employee in recovering against the tortfeasor. [54] In Cooper, appellant's husband was killed while working and appellant was paid workers' compensation benefits through her husband's employer's insurer, Argonaut. After appellant filed suit against a third-party tortfeasor and the case settled, Argonaut sued Cooper to recover the amount of benefits paid. [55] On appeal, we required a deduction from the amount Cooper had to reimburse Argonaut to reflect the litigation expenses Cooper incurred that were attributable to Argonaut's share of the recovery. In so holding, we recognized that if the employer (or the insurance carrier) were not required to pay its pro rata share of litigation expenses, the entire burden of the litigation would be borne by the employee and [t]he carrier would take the benefit of the employer's premium and the employee's litigation effort. [56] We later discussed this reasoning in another case affirming application of the common fund doctrine, which provides that a litigant or lawyer who recovers a common fund for the benefit of persons other than himself or his client is entitled to a reasonable attorney's fee from the fund as a whole. [57] We noted that one rationale underlying the common fund doctrine was to avoid unjust enrichment [58] and stated that the doctrine was implicated any time one litigant's success releases well-defined benefits for a limited and definable group of others. [59] Our review of the record and our case law on this issue convinces us that the rationale underlying these cases applies equally to the facts presented here. While neither party addressed this issue below, the parties disputed who was entitled to add-ons on the $25,000 medical payments portion of the liability settlement and the superior court's award invokes analogous case law on this same subject. Judge Gleason's order awarding Sidney add-ons noted that her decision was consistent with the supreme court's analysis in this area as set forth in both Coughlin v. Government Employees Insurance Co. [60] and Ruggles v. Grow.  [61] While Ruggles does not specifically address the common fund doctrine, it does discuss an insured's right to recover fees incurred in pursuing and recovering her insurer's subrogated claim: When an insurer pays expenses on behalf of an insured it is subrogated to the insured's claim. The insurer effectively receives an assignment of its expenditure by operation of law and contract. If the insurer does not object, the insured may include the subrogated claim in its claim against a third-party tortfeasor. Any proceeds recovered must be paid to the insurer, less pro rata costs and fees incurred by the insured in prosecuting and collecting the claim. [ [62] ] We therefore conclude that Sidney is entitled to recover from Allstate a pro rata share of the expenses she incurred seeking recovery from Safeco.