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12/19/96 FIRST NATIONAL BANK SPRINGFIELD v.

December 19, 1996

FIRST NATIONAL BANK OF SPRINGFIELD, GUARDIAN OF THE ESTATE OF CHRISTY L. MOLLET, A MINOR; JANICE L. MOLLET; AND MICHAEL MOLLET, PLAINTIFFS-APPELLEES AND CROSS-APPELLANTS,
v.
MALPRACTICE RESEARCH, INC., D/B/A THE MEDICAL QUALITY FOUNDATIONS, AND H. BARRY JACOBS, M.D., DEFENDANTS-APPELLANTS AND CROSS-APPELLEES.



Appeal from the Circuit Court of Montgomery County. No. 91-MR-36. Honorable Mark M. Joy, Judge, presiding.

The Honorable Justice Welch delivered the opinion of the court: Rarick and Maag, JJ., concur.

The opinion of the court was delivered by: Welch

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, Malpractice 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 malpractice 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 defendants 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, 130 Ill. Dec. 401, 537 N.E.2d 730 (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, 208 Ill. Dec. 163, 648 N.E.2d 1085 (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 medical/legal consulting firm is to receive a contingent fee. Expert witnesses are to be paid an hourly or flat fee for their professional 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 ...


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