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Schramer v. Wurtinger





APPEAL from the Circuit Court of Kane County; the Hon. JOHN S. PETERSEN, Judge, presiding.


The Illinois Department of Public Aid appeals from an order which reduced its perfected charge for medical assistance rendered to the plaintiffs by one-half.

In the underlying suit the plaintiffs had sued the operator and owner of a motor vehicle which collided with their car causing the plaintiffs to suffer extremely severe personal injuries. The Department intervened to enforce its public aid lien (Ill. Rev. Stat. 1975, ch. 23, par. 11-22) in the amount of $25,726.73. At the hearing held on the Department's petition, counsel for plaintiffs stated that the personal injury case had been settled for $390,000. In narrative form, plaintiffs' counsel stated that the combined injuries of the plaintiffs were well in excess of the liability of the insurer and that the defendants lacked personal financial responsiblity. It was related that the plaintiff, Jessie Schramer, had suffered brain stem injury causing brain deterioration, inability to coordinate her muscle system, impaired speech and an inability to walk without assistance. Her husband, Robert Schramer, had sustained multiple fractures to his extremities requiring the use of rods and plates. His injuries also included hemopneumo-thorax. As a result, although he had made a satisfactory recovery, he would, because of his injury and other circumstances, have employment difficulties.

The court was also informed that the Schramers are in their early twenties and have a son age four. Counsel advised the court that his firm's fees were 25% of the recovery and that they had absorbed costs of approximately $2000. Counsel also advised that he had prevailed upon the Schramers' own insurer to accept only 75% of its subrogation interests for their personal injury protection benefits and that plaintiffs' counsel would take no fee for this portion of the recovery. Counsel also stated to the court that his firm is now counseling plaintiffs in estate planning so as to provide as much financial security to the family as possible. He offered to present documents, movies, tapes and the testimony of witnesses to support his narration. The court entered its order without regard to this offer.

The record shows no objection by the Department to the procedure which was followed. Following the narration by plaintiffs' counsel, counsel for the defendant Department placed in evidence a document showing the medical assistance payments. The order was then entered reducing the lien by 50% to the amount of $12,863.36.

The governing statute in pertinent part states:

"[T]he court, * * * may adjudicate the rights of the parties and enforce the charge. The court may approve the settlement of any claim, demand or cause of action either before or after a verdict, and nothing in this Section shall be construed as requiring the actual trial or final adjudication of any claim, demand or cause of action upon which the Illinois Department, * * * has charge. The court may determine what portion of the recovery shall be paid to the injured person and what portion shall be paid to the Illinois Department, * * *." (Emphasis added.) Ill. Rev. Stat. 1975, ch. 23, par. 11-22. *fn1

• 1 The general statutory provision that the State shall have a charge upon a personal injury recovery for medical assistance furnished a public aid recipient has remained essentially the same as in predecessor statutes. (See Ill. Rev. Stat. 1961, ch. 23, par. 819.) The basic legislative philosophy is noted by the Illinois Supreme Court in Beck v. Buena Park Hotel Corp., 30 Ill.2d 343 (1964), at pages 346-47:

"The provisions in question reflect an intention to lessen the burden on taxpayers, or to enable the State to help others in need of assistance, by requiring each recipient, when he recovers this kind of a judgment, to reimburse the State for his proportionate part of the cost of medical protection."

See also Skaggs v. Junis, 28 Ill.2d 199, 202 (1963).

The statute in the form presently before us was involved in Bender v. City of Chicago, 58 Ill.2d 284 (1974). In Bender, the trial court participated in pretrial discussions involving an effort to settle a minor's personal injury claim. The unreported negotiations resulted in a settlement of $50,000 to the minor, and an order was entered reducing the public assistance lien by 50%, to $3153.78. The supreme court reversed, however, stating at pages 288-89:

"[I]t is not, nor could it be, argued that the court is thereby vested with unlimited discretion to `adjudicate' a claim at 50% of the amount actually paid without supporting evidence justifying such reduction. * * *

While we endorse out-of-court and pretrial settlements, and sympathize with the problems facing the trial judges in those endeavors, we cannot affirm the action of the trial judge in `adjudicating' the Department's claim here at 50% of the amount admittedly paid on plaintiff's behalf in the absence of any evidence supporting that action."

The court in Bender, however, furnished no other standards to measure the exercise of the ...

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