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December 18, 1997


The Honorable Justice Miller delivered the opinion of the court.

The opinion of the court was delivered by: Miller

The Honorable Justice MILLER delivered the opinion of the court:

The plaintiffs bring this appeal from a decision of the appellate court determining that the defendants were entitled to recover the contingent fee specified in a contract entered into by the parties. 285 Ill. App. 3d 440, 674 N.E.2d 481, 220 Ill. Dec. 938. Under the terms of the agreement, the defendants were to attempt to provide the plaintiffs with expert witnesses and were to be available as consultants in a medical malpractice action previously filed by the plaintiffs. The circuit court of Montgomery County had reached the opposite conclusion, finding that the contract was void as contrary to public policy. The trial court had awarded the defendants $14,975 in damages, however, on a quantum meruit basis for work they performed under the contract. At issue in this appeal is whether the parties' contingent-fee contract is void and unenforceable and, if so, whether the defendants may instead recover damages on a theory of quantum meruit. We now reverse the judgment of the appellate court and affirm in part and reverse in part the judgment of the circuit court.

The procedural history of this case is uncomplicated. The plaintiffs, Christy L. Mollet, a minor, and her parents, Michael and Janice Mollet, retained attorney Douglas Marti for the purpose of pursuing a medical malpractice action arising from injuries Christy sustained at or around the time of her birth. Marti subsequently filed an action on the plaintiffs' behalf in the circuit court of Montgomery County. At Marti's suggestion, in 1983 the Mollets entered into a contract with the defendants, Malpractice Research, Inc., d/b/a the Medical Quality Foundation, and its founder and head, H. Barry Jacobs, M.D. (collectively, the Foundation). Under the agreement, which bore the title "Contract to Defray Costs of Litigation," the Foundation was to attempt to locate and retain expert witnesses in behalf of the Mollets in their malpractice action. Dr. Jacobs was also to make himself available to plaintiffs' counsel for the purpose of answering medical questions and to otherwise act as a consultant in the case. The contract required the Mollets to pay the Foundation a contingent fee of 20% of any recovery they achieved in the underlying malpractice action; the contract further specified $10,000 as liquidated damages in the event that the plaintiffs failed to honor the terms of the agreement. Also, the contract required the plaintiffs to pay the fees of the experts retained by the Foundation. Unlike the Foundation, however, the experts were to be paid a flat rate of compensation, with their fees dependent on the amount of time spent on the case. The contract did not restrict the plaintiffs in finding and retaining expert witnesses on their own.

Because Christy Mollet was a minor, the Foundation later asked the plaintiffs to obtain court approval of the contract. In their petition to the court, the plaintiffs asserted that they had "insufficient financial resources with which to properly prepare their case without entering into the attached contract." The circuit court of Montgomery County approved the parties' contract on January 3, 1986, in an uncontested proceeding.

At some point in 1986, after the contract was approved, the Mollets' original attorney, Douglas Marti, referred the case to another lawyer, John Hefner. Hefner later obtained a voluntary dismissal of the Mollets' original action (see Ill. Rev. Stat. 1985, ch. 110, par. 2-1009), and he subsequently filed a new action in the circuit court of Montgomery County, naming additional parties as defendants. At various times the Foundation tried to contact Hefner, both by letter and telephone, to offer assistance and to check on the progress of the case. Hefner ignored the Foundation's attempts to reach him. Represented by Hefner, the Mollets eventually settled their malpractice claims for a total of $500,000, and the terms of the settlement were approved in an order entered June 12, 1991, in the circuit court of Montgomery County. The Mollets then commenced the present action for a declaratory judgment, requesting a determination of their obligations under the contract with the Foundation.

The Foundation entered a special and limited appearance, seeking to enforce a forum selection clause in the contract that required that any action relating to the parties' agreement be brought in the circuit court of Fairfax County, Virginia. The judge ruled that the forum selection clause was invalid because the contract itself was void as contrary to public policy. The Foundation later filed a counterclaim, seeking in count I a total of $110,000 in damages, representing 20% of the Mollets' $500,000 recovery in the underlying medical malpractice action, plus $10,000 in liquidated damages. In count II of the counterclaim, the Foundation alternatively sought damages from the plaintiffs on a theory of quantum meruit.

The Mollets moved for summary judgment on both counts of the Foundation's counterclaim. The trial judge, who was different from the judge who had previously ruled on the Foundation's special and limited appearance, entered summary judgment in the Mollets' favor on count I, finding persuasive the earlier determination that the contract was void as contrary to public policy. The trial judge denied the Mollets' motion for summary judgment on count II, however, rejecting their argument that the invalidity of the contract precluded the Foundation from pursuing a quantum meruit theory of recovery. The matter then proceeded to a bench trial on count II. Because attorney Hefner was to appear as a witness, he withdrew from his representation of the Mollets and new counsel appeared on their behalf. Following testimony by Dr. Jacobs, Mr. and Mrs. Mollet, and Hefner, the trial judge awarded the Foundation $14,975 in damages, plus costs.

The Foundation appealed from the order granting the Mollets summary judgment on count I of the counterclaim, and the Mollets filed a cross-appeal from the judgment in favor of the Foundation on count II. The appellate court concluded that the contract between the Mollets and the Foundation was enforceable and did not violate public policy. 285 Ill. App. 3d 440, 674 N.E.2d 481, 220 Ill. Dec. 938. The appellate court thus held that the Foundation was entitled to a fee of $100,000, representing 20% of the $500,000 settlement achieved by the Mollets in the malpractice action. The appellate court also concluded that the Foundation could not recover liquidated damages in this case, citing Telenois, Inc. v. Village of Schaumburg, 256 Ill. App. 3d 897, 902, 195 Ill. Dec. 117, 628 N.E.2d 581 (1993). Having permitted the Foundation to recover on count I of its counterclaim, the appellate court found it unnecessary to address count II and accordingly vacated that part of the circuit court judgment. We allowed the Mollets' petition for leave to appeal. 166 Ill. 2d R. 315(a). We also granted leave to amicus curiae, the Illinois State Bar Association, to submit a brief in support of the plaintiffs. 155 Ill. 2d R. 345. We now reverse the judgment of the appellate court and affirm in part and reverse in part the judgment of the circuit court of Montgomery County.

The question before us in this case is whether contingent fees may be paid to persons who obtain expert witnesses in behalf of parties to litigation. If contingent fees may not be paid, then we must decide whether the Foundation is entitled to recover on a theory of quantum meruit.

As a preliminary matter, we reject the defendants' suggestion that we apply Virginia law in determining the validity of the parties' contract. One cannot rely on foreign law to enforce a contract that is illegal in the forum, and Illinois has the stronger interest in the outcome of the controversy. See Maher & Associates, Inc. v. Quality Cabinets, 267 Ill. App. 3d 69, 203 Ill. Dec. 850, 640 N.E.2d 1000 (1994). We must therefore determine whether, under the law of our state, the contingent fee contract is valid.

Courts in other states are divided on the question, with some jurisdictions finding contracts like this one to be violative of public policy (see Dupree v. Malpractice Research, Inc., 179 Mich. App. 254, 445 N.W.2d 498 (1989); Polo v. Gotchel, 225 N.J. Super. 429, 542 A.2d 947 (1987)) and other jurisdictions upholding them (see Ojeda v. Sharp Cabrillo Hospital, 8 Cal. App. 4th 1, 10 Cal. Rptr. 2d 230 (1992); Schackow v. Medical-Legal Consulting Service, Inc., 46 Md. App. 179, 416 A.2d 1303 (1980)). The Foundation notes that contracts like the one at issue here have been approved in uncontested trial court proceedings in Illinois and elsewhere.

The power to declare a private contract void as contrary to public policy will be used sparingly. Describing the considerations that come into play in such a determination, this court has previously stated:

"In considering whether any contract is against public policy it should be remembered that it is to the interests of the public that persons should not be unnecessarily restricted in their freedom to make their own contracts. Agreements are not held to be void, as being contrary to public policy, unless they be clearly contrary to what the constitution, the statutes or the decisions of the courts have declared to be the public policy or unless ...

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