Jeannette Martello v. Joshua Santana
2013 U.S. App. LEXIS 7096
6th Cir.2013Background
- Martello, a physician with a law degree, contracted with Santana to provide medical-legal consulting for several cases but never became a licensed attorney.
- The Howard/Lee contingency-fee agreement was later converted to hourly billing; Martello contends the original 20–25% contingency terms remained in effect and were breached.
- In Davis, Santana memorialized a 25% net fee pre-trial and 33.3% if successful at trial; Martello alleges early agreement and later reduced share without proper disclosure.
- Tinker involved two settlements; Martello alleges she was entitled to over $100,000 but received far less, with secrecy about settlement amounts.
- The district court granted summary judgment, finding contracts void as against public policy under Kentucky Rules of Professional Conduct and dismissing fraud claims as time-barred; an additional fiduciary-duty claim was also rejected.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether fee-sharing with a nonlawyer violates public policy. | Martello asserts Rule 5.4 is inapplicable to nonlawyers. | Santana argues Rule 5.4 bars fee-sharing with a nonlawyer. | Contracts void; Rule 5.4 applies to nonlawyers sharing fees. |
| Whether the fraud/fraudulent-concealment claims are time-barred. | Martello contends tolling agreements and discovery retroactively extend limitations. | Santana contends limitations ran from discovery, with asserted discovery by 1999–2000. | Claims time-barred; tolling not shown to save them. |
| Whether the district court correctly rejected the breach-of-contract claim as void. | Martello argues contracts should be enforceable despite public-policy concerns. | Santana maintains contracts violate public policy; voidable. | Contracts void as against public policy; affirmed. |
Key Cases Cited
- Yeager v. McLellan, 177 S.W.3d 807 (Ky. 2005) (courts may adopt public policy principles absent legislative guidance)
- Zeitz v. Foley, 264 S.W.2d 267 (Ky. 1954) (public policy principles may prevent enforcement of contracts contravening public policy)
- Giliani v. Guiler, 951 S.W.2d 318 (Ky. 1997) (public policy and contract enforcement considerations under Kentucky law)
- Owens v. Clemons, 408 S.W.2d 642 (Ky. 1966) (courts may apply public policy in absence of legislative decree)
- Ex parte Auditor of Pub. Accounts, 609 S.W.2d 682 (Ky. 1980) (bar rules reflect public policy; not private benefit only)
- Kentucky Bar Ass’n v. Chesley, 2013 WL 1197510 (Ky. 2013) (ethics rules govern professional conduct and fee practices)
- Smith v. The Ferncliff, 306 U.S. 446 (U.S. 1939) (contracts violating law/public policy void)
- Bassett v. Nat’l Collegiate Athletic Ass’n, 528 F.3d 426 (6th Cir. 2006) (public policy considerations in enforcement of contracts)
- Noble v. Chrysler Motors Corp., 32 F.3d 997 (6th Cir. 1994) (discovery-based accrual for fraud claims)
- Hoover v. Langston Equip. Assocs., Inc., 958 F.2d 742 (6th Cir. 1992) (due diligence required for fraudulent-concealment tolling)
- Winnett v. Caterpillar, Inc., 609 F.3d 404 (6th Cir. 2010) (start of limitations upon discovery; tolling considerations)