Murphy & Prachthauser Wins Wisconsin Supreme Court Case against State Farm

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Milwaukee-based Murphy & Prachthauser was recently victorious in a Wisconsin Supreme Court case that allows plaintiffs to recover the full value of their medical services when making underinsured motorists claims. Argued by Milwaukee auto accident lawyer Keith Stachowiak, the case will ensure Wisconsin citizens injured in car accidents receive the coverage they paid for when purchasing automobile insurance.

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This case put an end to a rule that permitted an insurance company to limit the amount it was required to pay to policy holders...

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Personal injury law firm Murphy & Prachthauser recently won a Wisconsin Supreme Court case that reinforced the Collateral Source Rule for uninsured or underinsured motorist coverage. The court ruled on March 7 that the plaintiff, Linda Orlowski, was allowed to recover the reasonable value of her medical services—including those amounts that were written off by the medical provider—for her underinsured motorist claim with State Farm Mutual Automobile Insurance Co.

The conclusion of Orlowski v. State Farm (2009AP2848,2012 WI 21) before Wisconsin’s highest court is a significant case with broad potential impact. The ruling will apply to the hundreds of underinsured motorist cases pending in Wisconsin, as well as—by implication—all uninsured motorist cases, according to Attorney Keith Stachowiak, of the law firm of Murphy & Prachthauser s.c., who represented the plaintiff. “This case put an end to a rule that permitted an insurance company to limit the amount it was required to pay to policy holders—under both uninsured and underinsured motorist coverages in Wisconsin—for medical expenses policy holders incurred to treat their injuries,” said Stachowiak, the Milwaukee auto accident lawyer who authored the Wisconsin Supreme Court brief and made an oral argument before the court in late January 2012. Kevin Kukor and Josef Zimmerman of Murphy & Prachthauser also participated in the case.

The case represents a reaffirmation by the Wisconsin Supreme Court of an important principal of law known as the Collateral Source Rule, according to Stachowiak. Traditionally, under the collateral source rule, a defendant couldn’t seek to reduce its liability by introducing evidence that the plaintiff had received compensation from other sources, such as the plaintiff's own insurance coverage. This ensured that a person responsible for injuring someone in an auto accident could not get off the hook by claiming he didn’t have to pay the injured party’s medical expenses or lost wages because the injured person had health insurance or an employer continued to pay his wages when he missed work. The amount a negligent person owed would not be reduced because of payments made by the injured person’s health insurance or employer.

The Collateral Source Rule applied to all auto accident cases until 2001, when the Wisconsin Court of Appeals held in Heritage Mutual Insurance Co. v. Graser (2002 WI App 125, 254 Wis.2d 851,647 N.W.2d 385) that it would no longer apply to uninsured and underinsured motorist claims. After that, insurance companies began agreeing in uninsured or underinsured motorist claims to compensate injured parties only for the amount their health insurance paid—not the amount their doctors charged.

Stachowiak says the March ruling is long-overdue vindication for Orlowski, who was not satisfied with $11,498 in medical expenses previously awarded by an arbitration panel (2012 WI 21, Paragraph 2) for damages resulting from an auto accident several years ago. The reasonable value of Orlowski’s medical services was $72,985, and her medical provider chose to write off/waive $61,487. Arbitrators decided to award Orlowski only the difference between the two amounts—$11,498. So Orlowski sued in the Milwaukee County Circuit Court (2009-CV-002601) for a modification of the award. Ultimately, the court sided with Orlowski and modified the award to include the written-off figure, which required State Farm to reimburse her for $61,487. State Farm appealed the decision, and the case was elevated to the state supreme court for resolution.

The Wisconsin Supreme Court’s unanimous March ruling is the final word on Orlowski’s right to receive the full reasonable value of the written-off medical expenses in her underinsured motorist case. It created a blanket directive that the Collateral Source Rule applies to an injured part’s underinsured motorist action. For more information, please visit or call Keith Stachowiak at 414-271-1011.

About Murphy & Prachthauser, s.c.
Murphy & Prachthauser is one of the most respected groups of personal injury lawyers in Milwaukee. The firm distinguishes itself by approaching each case individually and with the client’s best interest in mind. It also employs a “tag-team” approach to ensure the best strategy and preparation for trial. Murphy & Prachthauser’s six attorneys, who have worked together for a long time, have garnered local and national recognition for its successful cases. Murphy & Prachthauser holds the highest possible rating for ability and ethics by esteemed peer review service Martindale-Hubbell.


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