NO. 5-95-0701
IN THE
APPELLATE COURT OF ILLINOIS
FIFTH DISTRICT
_________________________________________________________________
FIRST NATIONAL BANK OF SPRINGFIELD, ) Appeal from the
Guardian of the Estate of CHRISTY L. ) Circuit Court of
MOLLET, a minor; JANICE L. MOLLET; ) Montgomery County.
and MICHAEL MOLLET, )
)
Plaintiffs-Appellees and )
Cross-Appellants, )
)
v. ) No. 91-MR-36
)
MALPRACTICE RESEARCH, INC., d/b/a )
THE MEDICAL QUALITY FOUNDATIONS, )
and H. BARRY JACOBS, M.D., )
) Honorable
Defendants-Appellants and ) Mark M. Joy,
Cross-Appellees. ) Judge, presiding.
_________________________________________________________________
JUSTICE WELCH delivered the opinion of the court:
The question presented in this appeal from a summary judgment
entered in a declaratory judgment action is simply whether a
contract entered into between plaintiffs, First National Bank of
Springfield, guardian of the estate of Christy L. Mollet, a minor,
and Janice L. Mollet and Michael Mollet, and defendants, Malprac-
tice Research, Inc., d/b/a The Medical Quality Foundation, and H.
Barry Jacobs, M.D., is void as contrary to the public policy of the
State of Illinois. The circuit court of Montgomery County so
found, and defendants appeal.
Plaintiffs herein were also plaintiffs in a medical mal-
practice suit brought to recover damages for birth injuries to the
minor, Christy L. Mollet. Through their attorney, Douglas Marti,
plaintiffs entered into a contract with defendants herein, a
medical/legal consulting firm and its medical director, to provide
technical assistance for the education of counsel, to endeavor to
obtain expert witnesses, and to assist in marshalling evidence in
support of the medical malpractice claim.
The contract provides that its purpose is to help defray the
plaintiffs' cost of litigation and that defendants will make their
expertise available to plaintiffs' attorney and will make expert
witness reports and expert witnesses on its consulting staff
available to plaintiffs. Dr. Jacobs was to be available at any
time for plaintiffs' attorney to answer questions or assist in
depositions or at trial. The contract further provides that defen-
dants shall attempt to locate expert medical witnesses but that
defendants cannot guarantee the wording or substance of reports, or
the quality, nature, or admissibility of the experts' testimony, or
the credentials of the experts.
There was to be a charge of $150 for each expert witness
report and a charge of $500 per day for the testimony of any expert
witness. A fee of $75 per hour was to be paid for depositions of
expert witnesses. These fees were payable in advance. Plaintiffs
were free to also find their own expert witnesses outside the
contract without any effect on the contract.
In addition to the expert witness fees mentioned above,
plaintiffs were to pay to defendants a contingent fee of 20% of any
amounts recovered in the medical malpractice action. The sum of
$10,000 is set forth as liquidated damages in the event the
contingent fee is not paid.
Because the injured plaintiff was a minor, defendants asked
plaintiffs to seek and obtain court approval of the contract prior
to defendants expending any effort pursuant thereto. Plaintiffs
petitioned for court approval of the contract, representing to the
court that they "have insufficient financial resources with which
to properly prepare their case without entering into the attached
contract". The petition also informed the court that the contract
provides for a 20% contingent fee to defendants in the event of any
recovery in the medical malpractice action. The contract was
approved by the circuit court of Montgomery County on January 3,
1986.
It appears from the record that defendants did provide some
services to plaintiffs in the medical malpractice action and did
locate several expert witnesses who were willing to testify. It
appears that two of these witnesses were deposed. However, it also
appears that plaintiffs' original attorney, Douglas Marti, who had
negotiated the contract between plaintiffs and defendants, withdrew
from the medical malpractice action and was replaced with attorney
M. John Hefner, Jr. Hefner did not utilize the services of
defendants, although defendants notified Hefner that they were
willing and able to assist in the medical malpractice action.
Hefner negotiated a $500,000 settlement of the medical malpractice
action. He then brought this declaratory judgment action seeking
to have the contract between plaintiffs and defendants declared
void as contrary to the public policy of the State of Illinois. He
succeeded. Defendants appeal.
It is well settled that courts will not enforce a private
agreement which is contrary to public policy. O'Hara v. Ahlgren,
Blumenfeld & Kempster, 127 Ill. 2d 333, 341 (1989). The public
policy of this State is reflected in its Constitution, its
statutes, and its judicial decisions. O'Hara, 127 Ill. 2d at 341.
Whether or not a contract is contrary to public policy depends on
the peculiar facts and circumstances of each case. O'Hara, 127
Ill. 2d at 341-42. In deciding whether a contract that is not
otherwise prohibited by law violates public policy, the courts must
determine whether the agreement is so capable of producing harm
that its enforcement would be contrary to the public interest.
O'Hara, 127 Ill. 2d at 342. A court will not declare a contract
illegal unless it expressly contravenes the law or a known public
policy of this State, as public policy strongly favors freedom to
contract. Rome v. Upton, 271 Ill. App. 3d 517, 520 (1995). The
question of whether a contract is enforceable under considerations
of public policy is one of law. Rome, 271 Ill. App. 3d at 520.
Let us make clear what the contract is not before we proceed
with our discussion of its legality. The contract is clearly not
one to pay a contingent fee to expert witnesses. This clearly
would be prohibited by Rule 3.3(a)(15) of the Illinois Rules of
Professional Conduct. 134 Ill. 2d R. 3.3(a)(15). Only the medi-
cal/legal consulting firm is to receive a contingent fee. Expert
witnesses are to be paid an hourly or flat fee for their profes-
sional services. Nor is the contract one involving the sharing of
legal fees between the plaintiffs' attorney and defendants, which
would be prohibited by Rule 5.4(a) of the Illinois Rules of
Professional Conduct. 134 Ill. 2d R. 5.4(a). There is no
provision in the contract that the defendants' 20% contingent fee
is to come out of the fee of plaintiffs' attorney. Instead,
defendants' fee is to come out of plaintiffs' award. Furthermore,
the contract does not guarantee that defendants will be able to
find any expert witnesses to testify in support of plaintiffs'
claim or the content or substance of any expert testimony.
Plaintiffs argue that the public policy of this State is
enunciated in two ancient cases decided by our supreme court in
1873 and 1893. In Gillett v. Board of Supervisors of Logan County,
67 Ill. 256 (1873), the county entered into a contract with an
individual whereby the individual was to "hunt up testimony" to be
used to prove voter fraud in a county election. The "witness
finder" was to receive $100 for the first 10 votes proved to be
illegal, $200 for the next 10 votes proved to be illegal, etc., and
the further sum of $1,200 if the case was decided in favor of the
county. Our supreme court held that this contract was void as
contrary to public policy, stating:
"But the contracts, themselves, are pernicious in their
nature. They created a powerful pecuniary inducement on the
part of the agents so employed, that testimony should be given
of certain facts, and that a particular result of the suit
should be had. A strong temptation was held out to them to
make use of improper means to procure the needful testimony,
and to secure the desired result of the suit. The nature of
the agreement was to encourage attempts to suborn witnesses,
to tamper with jurors, and to make use of other `base ap-
pliances' in order to secure the necessary results which were
to bring to these agents their stipulated compensation."
Gillett, 67 Ill. at 261.
In Goodrich v. Tenney, 144 Ill. 422 (1893), Goodrich and
Tenney, an attorney, entered into an agreement whereby Goodrich was
to receive 25% of any amount collected by Tenney in a lawsuit to
invalidate the transfer of a debtor's property. Goodrich was to
produce affidavits and witnesses testifying that no consideration
had been given for the property and that the purchasers knew of the
debtor's insolvency at the time of the transfer. Relying on
Gillett, our supreme court held the contract void as contrary to
public policy. The court found that the tendency of such contracts
to the perversion of justice through subornation of perjury renders
them illegal.
We cannot agree with plaintiffs that these cases represent the
public policy of the State of Illinois with respect to the contract
in the case at bar. We think that they are inapposite to the case
at bar for several reasons. First, the witnesses sought to be
procured in Gillett and Goodrich were fact witnesses, while the
witnesses to be procured by defendants in the case at bar are
expert opinion witnesses. Secondly, the witnesses sought to be
procured in Gillett and Goodrich were to testify to certain express
and specified facts. In the case at bar, defendants have not
agreed to find witnesses to testify to any particular facts or
opinions. Indeed, the contract explicitly states that defendants
cannot guarantee the wording or substance of reports or the nature
of the experts' testimony. Finally, in Gillett and Goodrich, the
witness finders did not get paid under the contract unless they
found witnesses to testify to the specified facts. In the case at
bar, defendants are entitled to their contingent fee whether or not
they are able to procure expert witnesses for plaintiffs, provided
that plaintiffs prevail in their medical malpractice action. The
contract in the case at bar does not require that defendants
procure any expert witnesses. It requires only that defendants
"attempt to locate expert witnesses". Defendants provide other
services under the contract for which they are apparently entitled
to receive their contingent fee even if they are unsuccessful in
locating expert witnesses.
We find that there are substantial differences between the
contracts in the Gillett and Goodrich cases and the contract in the
case at bar. We do not believe that Gillett and Goodrich express
a public policy against contracts such as the one at bar. As we
have stated, whether or not a contract is contrary to public policy
depends on the peculiar facts and circumstances of each case.
O'Hara v. Ahlgren, Blumenfeld & Kempster, 127 Ill. 2d 333, 341-42
(1989).
Plaintiffs also argue that a 1991 advisory opinion of the
Illinois State Bar Association enunciates a public policy against
contracts such as the one at bar. In that advisory opinion, the
Bar Association states its opinion that it is professionally
improper for an attorney to hire, or to recommend or acquiesce in
his client hiring, an agency to provide an expert witness where the
agency's compensation is contingent upon the outcome of the matter.
ISBA Op. No. 86-3 (January 1991). We think it clear that the
Illinois State Bar Association does not express the public policy
of the State of Illinois. As we have stated, the public policy of
this State is to be found in its Constitution, statutes, and
judicial decisions. O'Hara v. Ahlgren, Blumenfeld & Kempster, 127
Ill. 2d 333, 341 (1989).
Plaintiffs direct us to no other sources of expression of
public policy with respect to contracts such as the one at bar, and
we are unable to find any. Accordingly, we must determine whether
the contract is so capable of producing harm that its enforcement
would be contrary to the public interest. O'Hara v. Ahlgren,
Blumenfeld & Kempster, 127 Ill. 2d 333, 342 (1989).
We do not see any overwhelming danger of subornation of
perjury in the contract. The witnesses sought to be procured are
expert opinion witnesses as opposed to fact witnesses. Defendants
are not obligated to find witnesses to testify to any specific
facts or opinions. Furthermore, defendants receive their contin-
gent fee whether or not witnesses are found, if plaintiffs are suc-
cessful in their medical malpractice action. The temptation for
subornation of perjury which was present in Gillett and Goodrich
does not appear to be present in the case at bar. While defendants
have an interest in seeing that plaintiffs prevail in the medical
malpractice action, defendant can influence the result in ways
other than suborning perjury. Under the contract, the defendants
are obligated to assist plaintiffs in numerous ways other than the
procurement of expert witnesses. We conclude that the contract
does not create a real and substantial danger of subornation of
perjury such that its enforcement would be contrary to the public
interest.
We are also mindful that the contract takes another slice out
of plaintiffs' pie in that, in addition to the contingent fee
payable to plaintiffs' attorney, a contingent fee is payable to
defendants under the contract. However, we are also mindful that,
without the services provided by defendants, many medical malprac-
tice cases, including plaintiffs', might not make it past the
courthouse door. Medical malpractice cases are becoming increas-
ingly complex, and even experienced attorneys may not have suffi-
cient knowledge or resources to properly prepare a medical
malpractice case without expert assistance. Even experienced
malpractice attorneys cannot understand all the complex matters
involved in some medical malpractice cases. Furthermore, there is
a recognized scarcity of expert medical witnesses who are willing
and able to testify against their colleagues in the medical field.
The task of locating an expert witness to testify against another
physician in a medical malpractice case is well known to be an
expensive, time-consuming, and often unsuccessful task which
plaintiffs or their attorneys must undertake in a medical mal-
practice case. The services provided by medical/legal consulting
firms in explaining complex medical matters, assisting in the
preparation of questions for witnesses and parties, developing the
case, and finding appropriate expert witnesses may be invaluable in
certain cases. Finally, many medical malpractice plaintiffs are
simply financially unable to pay for their attorney's services on
anything other than a contingent fee basis, much less pay for the
services provided by medical/legal consulting firms on anything
other than a contingent fee basis. Indeed, plaintiffs in the case
at bar admitted in their petition for approval of the contract that
they had insufficient financial resources with which to properly
prepare their case without entering into the contract with
defendants. Not all attorneys and law firms can afford to advance
such costs to their clients.
We conclude that medical/legal consulting firms such as
defendants can provide a legitimate and valuable service to those
injured through medical malpractice, but that many cannot afford
such services except through a contingent fee contract. We do not
find that the contract between plaintiffs and defendants is so
capable of producing harm that its enforcement would be contrary to
the public interest. Accordingly, we find that the contract in the
case at bar is not violative of the public policy of this State and
is legal and enforceable.
We return now to the facts of this case. After finding that
the contract was void and unenforceable, the trial court entered
summary judgment for plaintiffs on count I of defendants' coun-
terclaim. This counterclaim had sought enforcement of the contract
and the sums due thereunder. We reverse that summary judgment and
enter summary judgment against plaintiffs and for defendants in the
amount of $100,000, representing 20% of plaintiffs' $500,000
recovery. That provision of the contract providing for additional
liquidated damages in the amount of $10,000 should the contingent
fee not be timely paid is unenforceable pursuant to Telenois, Inc.
v. Village of Schaumburg, 256 Ill. App. 3d 897, 902 (1993).
Further, pursuant to the power granted us by Supreme Court Rule
366(a)(5) (134 Ill. 2d R. 366(a)(5)), we hereby enter judgment in
favor of defendants and against plaintiffs on all counts of the
declaratory judgment action brought by plaintiffs.
The trial court also entered judgment for defendants and
against plaintiffs on count II of the defendants' counterclaim,
which sought recovery in quantum meruit for the services provided
by defendants. In light of our disposition with respect to count
I of the counterclaim, we hereby vacate the judgment of the circuit
court on count II of the counterclaim.
Finally, in their briefs, defendants argue that the trial
court erred in denying their special and limited appearance for the
purpose of contesting the jurisdiction of the court. In their oral
argument before this court, defendants conceded that they had
waived any error in the denial of their special and limited
appearance by participating in the proceedings before the trial
court. Accordingly, we will not discuss this issue.
For the foregoing reasons, judgment is hereby entered in favor
of defendants and against plaintiffs on all counts of plaintiffs'
complaint for declaratory judgment. The summary judgment of the
circuit court of Montgomery County in favor of plaintiffs and
against defendants on count I of defendants' counterclaim is hereby
reversed, and judgment is hereby entered thereon against plaintiffs
and in favor of defendants in the amount of $100,000 plus costs of
suit. The judgment entered by the circuit court of Montgomery
County in favor of plaintiffs and against defendants on count II of
defendants' counterclaim is hereby vacated.
Reversed in part; vacated in part; judgment entered.
RARICK and MAAG, JJ., concur.
NO. 5-95-0701
IN THE
APPELLATE COURT OF ILLINOIS
FIFTH DISTRICT
___________________________________________________________________________
FIRST NATIONAL BANK OF SPRINGFIELD, ) Appeal from the
Guardian of the Estate of CHRISTY L. ) Circuit Court of
MOLLET, a minor; JANICE L. MOLLET; ) Montgomery County.
and MICHAEL MOLLET, )
)
Plaintiffs-Appellees and )
Cross-Appellants, )
)
v. ) No. 91-MR-36
)
MALPRACTICE RESEARCH, INC., d/b/a )
THE MEDICAL QUALITY FOUNDATIONS, )
and H. BARRY JACOBS, M.D., )
) Honorable
Defendants-Appellants and ) Mark M. Joy,
Cross-Appellees. ) Judge, presiding.
___________________________________________________________________________
Opinion Filed: December 19, 1996
___________________________________________________________________________
Justices: Honorable Thomas M. Welch, J.
Honorable Philip J. Rarick, J., and
Honorable Gordon E. Maag, J.,
Concur
___________________________________________________________________________
Attorneys Raymond E. McPhail, Bullington, White, McPhail and Jarman,
for P.C., 127 North Main Street, P.O. Box 190, Hillsboro, IL
Appellant 62049; Deborah A. Vitale, 1013 Princess Street, Alexandria,
VA 22314
___________________________________________________________________________
Attorneys Paul Brown, Emmet A. Fairfield, Brown, Hay & Stephens, 700
for First National Bank Bldg., P.O. Box 2459, Springfield, IL
Appellee 62705
___________________________________________________________________________