‘Wrongful Adoption’ Gains Acceptance

By Robert Clifford and Pam Menaker

Earlier this year, an Illinois appellate court joined the ranks of a handful of courts in recognizing a new tort- the tort of "wrongful adoption."

Courts have begun recognizing this new tort because more adoptive parents have been discovering the adoption agencies may misrepresent or conceal the health or heredity of the adopted child. These parents then seek damages for their increased cost of child-rearing.

In the usual case, the adoptive parents requested and were told that they were given a healthy, normal child. Later, however, their adopted child developed a severe physical, mental or emotional problems. The parents then alleged that the adoption agency knew about these problems at the time of adoption, but that it withheld the information.

Generally, parents who unsuspectingly have adopted a child with serious medical or psychological problems seek funds to pay for the unforeseen expenses and anguish. They do not seek to revoke or set aside the adoption. They want to keep the family unit intact.

Courts that have considered the issue have responded to the adoptive parents’ situation by holding adoption agencies liable, under some circumstances, for misrepresentation of, or failure to disclose prior to adoption the necessary medical of psychological information regarding the adopted child’s health, need for future treatment or parentage.

Adoption agencies decry this trend, arguing that they will be forced to become guarantors of an adopted child’s future health. But most courts have been careful to limit their holdings to recognition of an action only when the agency affirmatively misrepresents a child’s health to prospective parents. The courts have not placed an affirmative duty upon agencies to discover a child’s health problems.

In resolving these cases, courts are faced with determining what particular cause of action applies to the situations- that is, the grounds upon which adoptive parents can collect damages- and what type of damages they can collect.

Several courts that have considered the issue recently have held that adoptive parents may maintain a common law fraud action seeking monetary damages against an adoption agency. in 1986, the Supreme Court of Ohio became the first such court.

In Burr v. Board of County Comminsioners2, The Supreme Court of Ohio affirmed a compensatory damage award of $125,000 to adoptive parents. In that case, the parents were misinformed about the adopted child’s risk of developing a hereditary disease because the adoption agency deliberately withheld information abut the birth parents. The court noted that the agency’s deliberate conduct " deprived [the parents] of their right to make a sound parenting decision."3

In Roe v Catholic Charities of the Diocese of Springfield,4 the Appellate Court of Illinois also recognized a common-law fraud action against an adoption agency. The case involved three sets of adoptive parents who, in 1978, separately approached an agency seeks to adopt normal, healthy children.

The agency, placed one of the three sibling in each family’s home in a foster arrangement with the potential for future adoption. Each set of parents stated to the agency that they would choose to adopt the child only if love was all the child needed, if the child was both physically and mentally normal, if the agency told the parents all it knew about the child’s background, and if the parents would incur no unusual or extraordinary expense. The agency assured each coupe that these conditions had been met.

But the agency allegedly knew that each child had shown signs of psychological, social or intellectual problems. The children had destructive, often uncontrollable, behavior and had, in fact, been taken for professional help. The parents incurred extraordinary expenses for treatment of these disturbed children. They could expect to continue to incur such expenses in the future.

In 1988, the three sets of parents obtained a court order allowing them to review the agency’s files on their children. They then discovered that the children had exhibited the same problems in prior foster homes and that, therefore, the agency’s representations were false.

A parents brought suit based on fraud, negligence and breach of contract. The appellate Court of Illinois recognized the fraud cause of action and found that it was simply an extension of the state’s doctrine of common law fraud. In doing so, the court relied on cases from other states- Ohio, California and Indiana- in which courts also had recognize such a cause of action.5

The Appellate Court of Illinois stated that an adoption agency should disclose fully all information that it has about a child. If it does so, the adoptive parent "will go into the adoption with eyes open, presumably emotionally and financially able to support a handicapped child." 6

The Appellate Court of Illinois dismissed the agency’s argument that because adoptions are creatures of statues, all proceedings pertaining to adoptions are controlled by statute. The court analogized an adoption agency to a corporation, which also is created by statute but which can be sued for common-law torts.

The agency further argued that disclosing information about potential adoptive children was against public policy because in 1985 Illinois enacted a statue governing the confidentiality of adoption records.7 The court, however, found that the statue did not apply to the factual situation.

Indeed, a number of jurisdictions have rules, regulations, constitutional provisions or legislative enactments relating to adoption. Although each case must be examined on its facts, the precedents thus far indicate that such laws will not present an insurmountable hurdle to recovery of damages for fraud.

The parties in Roe have petitioned the Supreme Court of Illinois for a writ of ceritorari and are waiting to hear whether the writ will be granted

In 1989 decision by the Supreme Court of Wisconsin, Meracle v. Children’s Service Society of Wisconsin, 8 appears to be the first case holding and adoption agency liable for negligence in these circumstances. Under a negligence theory, it may be easier for adoptive parents to recover damages because the elements of negligence are easier to prove than those of fraud.

In Meracle, adoptive parents sued an adoption agency for damages after their daughter developed Huntington’s diseases, which is a fatal genetic disorder. The agency had told the parents that the child was not at risk for that disease.

The Supreme Court of Wisconsin found that the agency had voluntarily assumed the duty of informing the parents about the child’s health, and that the parent has stated a claim for negligent breach of that duty.

Since Meracle, Appellate Court of Illinois, in Roe and the Supreme Court of Minnesota , in M.H. &J.L.H.v. Caritas Family Services, have recognized the validity of negligence claims brought in this context. In Roe, the Appellate Court of Illinois enumerated the elements that a plaintiff must prove to recover under a negligent misrepresentation theory. They are as follows: a duty owed by the defendant to the plaintiff; a breach of that duty; and injury proximately resulting from such breach.

In Burr, decided in 1986, the Supreme Court of Ohio observed that when public agencies are charged with the legal duty and authority to arrange adoptions, governing principles of justice require that the agencies be held accountable for injuries resulting from deceitful and material misrepresentations. Indeed, court have recognized a cause of action for negligent misrepresentation against government offers and employees in other contexts.

For example, in Northernaire Products Inc. V. Co.of Crow King,, the Supreme Court of Minnesota noted that "members of the public have no other access to factual information maintained by the government except through government officers and employees. Therefore, the policy of promoting accuracy through the prospect of tort liability outweighs the possibility of inhibiting performance of duties of office of employment."

In the adoption context, whether public of private, one party has special knowledge of material facts to which the other party does not have access. The courts rely upon the intrinsically fiduciary nature of the relationship, to determine whether a duty to disclose exists and, thus whether negligence cause of action will lie. As the California Court of Appeals has put it, "as trustees of the child’s destiny the agency was obligated to act with morals great than those found in a purveyor’s common marketplace."

But the real question of duty as yet unanswered by the courts, is whether an adoption agency will be held liable in negligence fore th mere non-disclosure of material information, whether or not the parents ask for it. The Meracle court held that the agency did not have a duty to disclose health information, but that one it voluntarily assumed such a duty, it could not breach it.

In M.H. V J.L.H v. Caritas Family Services, decided in August, the Supreme Court of Minnesota echoed the sentiment expressed a Meracle and upheld a cause of action for negligent misrepresentation. The Supreme Court of Minnesota ruled on public policy grounds that recognizing such a cause of action will instill confidence in the adoption process.

A narrow reading of Roe comes the closet to holding an adoption agency liable in negligence for mere non-disclosure. In Roe, the Appellate Court of Illinois stated that the agency had an affirmative duty to disclose health information about the child when the parents requested it . The court did not speculate as to which cause of action- breach of contract, fraud or tort- applied if the parents did not ask for the information. No case to date addresses this aspect of the issue of affirmative non-disclosure head-on.

As to the issue of what damages adoptive parents can collect, in a negligent misrepresentation . They do not include all the ordinary expenses of raising a child.

Adoptive parents’ possibly for recovery is enhanced if courts recognize an action for emotional distress against adoptive agencies. In Burr, the Ohio case, the judgement of $125,000 was found to be " appropriate in light of the evidence presented to the jury, medical adoptive parents’] claimed emotional damage."

The Burr court did not indicate how the damages were computed, nor into what components the award was broken down. A commentator has suggested, however, that the damages in Burr could have been reduced, erroneously, by the benefits conferred on the adoptive parents of raising a child.

In M.H. & J.L.H, the Court of Appeals of Minnesota had held that a valid claim for negligent infliction of emotional distress exists if supported by independent claim for intentional misrepresentation. The Supreme Court of Minnesota, however, reversed the court of appeals and held that a physical injury is necessary to support a claim of intentional or of negligent infliction of emotional distress, which was not present in the M.H & J.L.H. case.

In Rose and MH & JLH, the courts also acknowledged the possibility of punitive damages. The Roe court held that the jury would decide the issue if fraud or some other aggravating circumstances was proved. Both MH & JLH and Roe involve private not public adoption agencies. The latter may be immune from punitive damage claims because of sovereign immunity statutes.

Similarly, the Supreme Court of Wisconsin in the Meracle case barred the negligent infliction of emotional distress portion of the action despite the plaintiffs’ anguish, stating that a physical injury is required. The court characterized its holding as striking " the appropriate balance between the rights of the injured parities to obtain a remedy for a wrong, and the rights of defendants to be free from potentially unlimited liability and the merit less claim."

The only case to deal directly with the issue of breach of contract in the adoption agency setting is Roe. Although the Appellate Court of Illinois dismissed the contract claim, it did not preclude such a cause of action entirely. It merely held that the plaintiffs had not adequately pleaded a contract claim.

The Appellate Court of Illinois set fourth the traditional criteria for a breach of contract action: offer, acceptance, consideration, performance, breach and damages. Specifically, the court found that Roe plaintiffs had failed to specify the damages resulting from the breach of contract. The court also pointed out that its decision did not resolve the issue of whether a breach of contract action can ever be proper in the adoption context.

Thusfar, the case law indicates that courts are sympathetic to adoptive parents and will hold an adoption agency liable for misrepresentation in some circumstances. The courts seem to be trying to promote confidence in the adoption process, to preserve and strengthen the family unit, and to deter future misconduct through the imposition of tort liability.

To avoid liability, an adoption agency should, at least, refrain from making affirmative misrepresentations about a child’s health. Non-disclosure may be actionable. In any event, an agency does not have to attempt to discover the child’s health problems or guarantee future health prospects.

The number of cases dealing with this issue still is small, perhaps because adoption records and proceedings are sealed absent a court order. Litigation can be expected, however, as adoptive parents pursue the opportunity to make informed decisions on the risk of parenthood while keeping the best interests of the child in min.