Facts:  Petitioner Olga Matsyuk was injured while riding in an automobile driven by Omelyan Stemditsky.  Matsyuk subsequently recovered $1,874 in personal injury benefits from Stemditsky’s insurance policy with respondent State Farm Fire & Casualty Company.  Matsyuk also recovered $5,874 from State Farm in its capacity as Stemditsky’s liability insurer after reaching a settlement with State Farm.  After State Farm indicated that it would seek reimbursement of its personal injury payment through an offset to the liability payment, Matsyuk demanded that this offset be reduced by a prorated share of the attorney fees she incurred in obtaining the settlement.  When State Farm refused, Matsyuk filed suit against State Farm in the Superior Court for King County.  The trial court granted summary judgment for State Farm and the Washington Court of Appeals affirmed.  Matsyuk appealed this decision to the Supreme Court of Washington.

Question(s):  Is an injured party who recovers under both a personal injury policy and a liability insurance policy held by the tortfeasor and who is subject to a reduction in the liability payment to offset the personal injury payment entitled to recover a prorated share of their attorney fees from the insurer?

Conclusion:  Justice Stephens’ opinion for the Court reversed the Washington Court of Appeals, concluding that Matsyuk is entitled to recover a prorated share of her attorney fees.  In particular, the Court held that despite the fact that the personal injury and liability policies are provided by the same insurer, they are distinct policies and the offset to the liability payment benefited State Farm.  Thus, a common fund was created and the equitable fee sharing rule announced in Mahler v. Szucs applies.

Docket No. 84686-3 (from Court of Appeals Division I Case No. 64151-4)

Petitioner: Olga Matsyuk

(Counsel: Matthew James Ide, David R. Hallowell, Craig Frazier Schauermann, and Scott Alan Staples)

Respondent: State Farm Fire & Casualty Company

(Counsel: Kenneth E. Payson, Stephen Michael Rummage, Hozaifa Y. Cassubhai, Roger Ashley Leishman, M. Colleen Barrett, Gregory S. Worden, and Kevin J. Kay )

Briefs:

Argument: Thursday, May 26, 2011 1:30pm

[Source: TVW, http://tvw.org]

Decided: Thursday, February 9th, 2012

Prevailing Party: Olga Matsyuk (Petitioner)

Vote: 6-3

Citation: Pending

Court: Madsen2 Court (2011)

Madsen
(Dissent)

Johnson

Alexander

Chambers

Owens

Fairhurst

Johnson

Stephens
(Majority)

Wiggins

Opinion

Dissent