Matsyuk v. State Farm Fire & Casualty Co., 272 P.3d 802

Matsyuk, a PIP insured passenger, recovered $1,874 PIP benefits from the tortfeasor's State Farm policy and then pursued a liability recovery from State Farm under the same carrier.
The tortfeasor's liability payment was offset by the PIP benefit, and Matsyuk sought a pro rata share of attorney fees for obtaining the liability recovery.
Weismann, a pedestrian, received $9,012.95 PIP benefits from the tortfeasor's insurer and sought pro rata attorney fees after recovering $44,521.19 from the tortfeasor's liability policy handled by the same insurer.
The Court of Appeals in Matsyuk relied on Young, while Weismann's case proceeded through a different procedural path, with legal questions about Winters and Hamm.
The majority holds that the Mahler rule applies broadly to create a common fund when PIP is recoverable and the insured recovers from the tortfeasor’s liability policy, even when the same insurer provides both coverages; the court also awards Olympic Steamship attorney fees to Weismann and remands Matsyuk's bad faith claim.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a common fund pro rata fee sharing applies when the PIP recovery is offset against the tortfeasor's liability recovery by the same insurer	Matsyuk/Weismann argue for pro rata fees under Mahler/Winters/Hamm	Insurers rely on Young or non-applicability due to same-insurer context	Yes, pro rata sharing applies; common fund is created.
Whether Weismann is entitled to Olympic Steamship attorney fees on appeal	Weismann seeks Olympic Steamship fees for pursuing coverage recovery	Insurers contend Olympic Steamship fees are inappropriate in this context	Weismann is entitled to Olympic Steamship fees including on appeal.
Whether Matsyuk's bad faith claim against State Farm should be dismissed or allowed to proceed	Matsyuk asserts possible bad faith conduct in settlement release	State Farm argues dismissal or resolution on contract_terms	Bad faith claim may go forward; remanded for proceedings.

Mahler v. Szucs, 135 Wn.2d 398 (1998) (pro rata fee sharing with PIP reimbursement; common fund concept)
Winters v. State Farm Mut. Auto. Ins. Co., 144 Wn.2d 869 (2001) (common fund when PIP is reimbursed via UIM/third-party or offset)
Hamm v. State Farm Mut. Auto. Ins. Co., 151 Wn.2d 303 (2004) (extending pro rata fees where PIP and coverage interact; same insurer does not defeat benefit)
Young v. Teti, 104 Wn. App. 721 (2001) (pre-Winters/Hamm; denied pro rata in same-insurer context; disapproved)
Olympic S.S. Co. v. Centennial Ins. Co., 117 Wn.2d 37 (1991) (fees under Olympic Steamship when insured vindicates coverage)
Colorado Structures, Inc. v. Ins. Co. of the W., 161 Wn.2d 577 (2007) (distinction between coverage disputes and contract interpretation; Olympic Steamship framework)