STATE LAW/Adoption/Liability of Adoption Agency
STATE LAW/Adoption/Liability of Adoption Agency
The U.S. District Court for the Northern District of Ohio, Western Division, granted summary judgment for defendant adoption agency Island Coast International Adoption (ICIA) on plaintiff adoptive parents’ claims of breach of contract, fraud and intentional infliction of emotional distress, which arose from their unsuccessful attempt to adopt twins from India. Plaintiffs paid more than $20,000 to ICIA and other agencies and waited several years to complete the adoption process. Adoption proceedings were initiated but failed due to the non-renewal of the license of the Indian agency with which ICIA was affiliated. Plaintiffs alleged ICIA breached the contract by failing to properly coordinate the adoption process or to accurately communicate with plaintiffs and with adoption officials in India and that ICIA breached a duty of good faith and fair dealing. The district court acknowledged the heartache that can accompany a failed adoption, but, noting that there was no evidence of misconduct on ICIA’s part, held that plaintiffs failed to establish the necessary elements of any of their claims.
Cite: No. 3:06 CV 1283.S; 2008 U.S. Dist. LEXIS 24486 (U.S. Dist. Ct. March 27, 2008)
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Full opinion:
Smith v. Island Coast Intern. Adoption, Chartered, Inc.
N.D.Ohio,2008.
Only the Westlaw citation is currently available.
United States District Court,N.D. Ohio,Western Division.
Jon E. SMITH, et al., Plaintiffs,
v.
ISLAND COAST INTERNATIONAL ADOPTION, CHARTERED, INC., Defendant.
No. 3:06 CV 1283.
March 27, 2008.
Shaun A. Putman, Law Office of C. Allan Runser, Van Wert, OH, for
Plaintiffs.
Tammy Geiger Lavalette, Steven R. Smith , Connelly, Jackson &
Collier, Toledo, OH, for Defendant.
MEMORANDUM OPINION AND ORDER
JACK ZOUHARY, District Judge.
*1 Plaintiffs, Jon and Trisha Smith, bring this lawsuit following
their unsuccessful adoption of twins from India. After several years
of waiting for the adoption process to be completed and paying more
than $20,000 to Defendant Island Coast International Adoption (ICIA)
and other agencies, Plaintiffs still did not have their children.
Plaintiffs instituted this action seeking damages for breach of
contract, fraud, and intentional infliction of emotional distress.
The Court has jurisdiction pursuant to 28 U.S.C. § 1331 (diversity
of citizenship).
This matter is before the Court on Defendant's Motion for Summary
Judgment (Doc. No. 57). Plaintiffs filed an Opposition (Doc. No. 66)
and Defendant replied (Doc. No. 67).
BACKGROUND
In early 2004, Plaintiffs learned of twins available for adoption in
India and contacted Defendant. Defendant then coordinated with
International Families, Inc. (IFI), Defendant's affiliated agency,
licensed to perform adoptions in India. On March 14, 2004,
Plaintiffs and Defendant signed a contract to proceed with the
adoption process. Plaintiffs paid three installments to Defendant
totaling $3,750. Plaintiffs also paid Defendant a "country fee" of
$20,500 which was forwarded to IFI. This fee covers the services
performed by IFI and is used for governmental and attorney costs in
India.
Defendant, with the assistance of IFI, located twins in Peace Home,
an Indian adoption agency. Peace Home was licensed by the Central
Adoption Resource Agency (CARA), the Indian agency that oversees
international adoptions. However, in June 2004, Peace Home's
international adoption license expired. Although IFI had already
applied to CARA for renewal, the license was not immediately
renewed. In March 2005, Peace Home's license was finally renewed,
but was backdated to June 2004 and, because the license is only
valid for one year, expired again in June 2005. IFI was unable to
process Plaintiffs' adoption by June, and was unable to again renew
Peace Home's license.
Throughout 2004 and 2005, ICIA provided Plaintiffs, via email and
telephone, with reports and updates on the progress of the license
renewal. In early 2006, Plaintiffs were dissatisfied with the delays
and expressed their concerns to ICIA. Defendant offered to switch
the current adoption program to another country or give a partial
refund of the $3,750 that was paid to ICIA, but Plaintiffs declined.
SUMMARY JUDGMENT STANDARD
Pursuant to Civil Rule 56(c), summary judgment is appropriate where
there is "no genuine issue as to any material fact" and "the moving
party is entitled to judgment as a matter of law."Id. When
considering a motion for summary judgment, the Court must draw all
inferences from the record in the light most favorable to the non-
moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 587 (1986). The Court is not permitted to weigh the
evidence or determine the truth of any matter in dispute; rather,
the Court determines only whether the case contains sufficient
evidence from which a jury could reasonably find for the non-moving
party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986).
DISCUSSION
*2 An initial inquiry is choice of law. Ohio law is appropriate.
Although Defendant is located in Florida, Plaintiffs are located in
Ohio, the contract was to be performed in Ohio, and the children
were to be adopted in Ohio. See Hagberg v. Delphi Auto. Sys., 268
F.Supp.2d 855, 860 (N.D.Ohio.2002) (court will determine if the
cause of action is contractual or tort based and then determine
which state has the most significant relationship). Although the
parties did not brief whether Ohio law was controlling, only Ohio
cases are cited in their respective briefs, and the Court will apply
Ohio law to all claims.
1. Breach of Contract
Plaintiffs allege Defendant breached the contract because Defendant
failed to properly coordinate the adoption process, and failed to
accurately communicate with Plaintiffs and with adoption officials
in India. Plaintiffs also allege Defendant breached its duty of good
faith and fair dealing (Doc. No. 1, ¶¶ 11-12).
A breach of contract claim requires Plaintiffs to establish four
essential elements: (1) the existence of a contract; (2) performance
by Plaintiffs; (3) breach by Defendant; and (4) damage or loss to
Plaintiffs. See Doner v. Snapp, 98 Ohio App.3d 597, 600-601 (1994).
The critical issue is whether there is a "breach by Defendant."
Viewing the evidence most favorable to Plaintiffs shows no such
breach.
Plaintiffs argue the Synopsis of Services and Fees FN1 assigned
specific duties to Defendant which Defendant breached, but the
contract language does not support Plaintiffs' position. The
Synopsis section of the contract lists Defendant's fees for the
adoption process and includes a short description of items this fee
may cover, including coordination with foreign officials and "with
our [foreign] facilitator." The plain language of this section
clearly placed Plaintiffs on notice that Defendant would be working
with others in India to complete the adoption. This only makes
sense. Further, the Agreement for Services, a separate section of
the contract,FN2 identifies those specific services that Defendant
is required to perform, including locating the child, referring the
child to the clients, and initiating contact with "the foreign
orphanage and the affiliated agency."Again, the contract clearly
contemplated Defendant would be working with other agencies in
India, and Defendant's coordination with them was both expected and
appropriate. Although the crux of Plaintiffs' claim is the out
sourcing and lack of communication, Plaintiffs' deposition testimony
centers on the fact the adoption was unsuccessful. However, the
contract did not guarantee success, and Plaintiffs cite no other
supporting legal authorities.
FN1. SYNOPSIS OF SERVICES AND FEES-INDIA, Section II. Schedule of
Fees, Part A. ICIA Fee-$3750:
This is a comprehensive fee that covers our services. It includes
assistance in the preparation of your dossier, locating an
acceptable child for adoption; coordination of the adoption process
in the foreign country; coordination with the applicable office of
Immigration and Naturalization in this country; telephone,
facsimile, and written communication with our facilitator in the
applicable country, other officials in the applicable country, and
with you, the client.
FN2. AGREEMENT FOR SERVICES, Section 4. Acknowledgment by the Client:
The clients make the following acknowledgments by executing this
agreement:
a. That ICIA's sole responsibility with regard to the adoption
contemplated by this agreement is to locate a child available for
adoption in the applicable country acceptable to the clients; refer
that child to the clients; initiate and coordinate contacts between
the clients, the foreign orphanage and the affiliated agency; assist
in dossier preparation; and receive and provide information and
progress reports on the activities of the orphanage and affiliated
agency.
b. That no agency exists between the orphanage or personnel thereof
and/or the affiliated agency and ICIA.
c. That any failure of the orphanage in the foreign country or
affiliated agency to complete the adoption in a timely manner is not
the responsibility of ICIA; and if the clients believe they are
entitled to a partial or full refund of the applicable country fee,
the clients must look to the orphanage or the affiliated agency for
such a refund.
Finally, Plaintiffs argue Defendant did not act in good faith when
coordinating and communicating with IFI because Defendant did not
have first-hand knowledge of the specific tasks undertaken by IFI.
Plaintiffs also argue Defendant did not act in good faith because
IFI, not Defendant, was charged with coordinating the adoption
process with Indian officials. In short, Plaintiffs seek to blame
Defendant for the failings of IFI, but Defendant had no contractual
duty to deal directly with Indian officials. Nor do Plaintiffs
allege, let alone show, that Defendant is responsible for any
failure of IFI. There was no contract prohibition to subcontract
services to Indian agencies or that Plaintiffs pre-approve working
with those agencies. Indeed, contract language summarized above
contemplated quite the opposite.
*3 Under Ohio law, "[g]ood faith is a compact reference to an
implied undertaking not to take opportunistic advantage in a way
that could not have been contemplated at the time of drafting, and
which therefore was not resolved explicitly by the parties."Ed
Schory & Sons, Inc. v. Francis, 75 Ohio St.3d 433, 443-44 (1996)
(quoting Kham & Nate's Shoes No. 2, Inc. v. First Bank of Whiting,
908 F.2d 1351, 1357-58 (7th Cir.1990)). In Littlejohn, the court
held, "[a]ny agreement ... has an implied covenant of good faith and
fair dealing that requires not only honesty but also reasonableness
in the enforcement of the contract."Littlejohn v. Parrish, 163 Ohio
App.3d 456, 462 (2005); Florence Urgent Care v. HealthSpan, Inc.,
445 F.Supp.2d 871, 879 (S.D.Ohio 2006).
Plaintiffs make no showing of lack of good faith. See Reece v.
Grange Guardian Ins. Co., 2004-Ohio-5668, at ¶ 31 (Ohio Ct.App.2004)
(summary judgment is appropriate if plaintiff fails to present
evidence tending to show a lack of good faith on the part of the
defendant). To the contrary, the evidence shows Defendant performed
the services required by the contract and continuously acted in good
faith, providing Plaintiffs with numerous updates on the status of
the adoption. Although Plaintiffs indicate "a plethora of factual
evidence and arguments that [they] are eager to present to a jury"
showing a lack of good faith, they offer no disputed material fact
at this stage that would allow this case to proceed to a trial.
2. Fraud
Plaintiffs claim Defendant made repeated misrepresentations about
the status of the adoption process and its relationship with IFI. A
fraud claim requires Plaintiffs to establish: (1) a representation,
or concealment where there is a duty to disclose; (2) which is
material to the transaction at issue; (3) made falsely, with
knowledge of or reckless disregard as to its falsity; (4) with the
intent of misleading another into relying on it; (5) justifiable
reliance upon the misrepresentation or concealment; and (6)
resulting injury proximately caused by the reliance. Burr v. Stark
Cty. Bd. of Comm'rs., 23 Ohio St.3d 69, 69 (1986). Both parties
agree Defendant sent several emails and made numerous phone calls to
Plaintiffs (satisfying the first two elements of fraud), but
Plaintiffs fail to show Defendant's statements were knowingly false
or made with a reckless disregard to the truth or with the intent to
mislead (the third and fourth elements).FN3
FN3. For the purpose of this Motion, the parties do not dispute that
Plaintiffs relied, to their detriment, on the statements made by
Defendant, which would satisfy the fifth and sixth elements.
Fraudulent conduct may not be established by conjecture; it must be
proved by direct evidence or justifiable inferences from established
facts. See Pumphrey v. Quillen, 102 Ohio App. 173, 177 (1955). When
a plaintiff fails to produce sufficient evidence from which a
reasonable jury could find defendant knowingly or recklessly made
false statements, summary judgment is appropriate. Doyle v.
Fairchild Mach. Co., 120 Ohio App.3d 192, 208 (1997).
*4 Defendant methodically addresses every misrepresentation alleged
in the Amended Complaint (Doc. No. 31), and reasserts that all
statements made by Defendant were believed to be true. Plaintiffs
incorrectly allege that because information passed along by
Defendant turned out to be false, this may be sufficient to show
Defendant acted knowingly or recklessly. To satisfy the third
element of the fraud claim (knowledge of the falsity), Plaintiffs
must prove not just falsity, but also actual knowledge or reckless
behavior. Just because the statement is false does not necessarily
mean Defendant knew or should have known it was false. For example,
Defendant justifiably relied on statements made by IFI because of
past dealings and successful adoptions. Defendant reasonably
believed them to be true, even if they are eventually proven false.
Plaintiffs' circular analysis takes them nowhere. Some evidence of
Defendant's knowledge or reckless behavior, beyond allegations that
the statements were eventually proven false, is required to succeed
on the fraud claim and Plaintiffs show none.The assertion they
will "exercise their right to present ... additional evidence at the
appropriate time" rings hollow. Summary judgment is the appropriate
time-now-to present this evidence in order to establish a genuine
issue of material fact. Without such evidence, Plaintiffs have
failed to establish at least two of the elements for their fraud
claim, and summary judgment is appropriate.
3. Intentional Infliction of Emotional Distress
Plaintiffs next allege intentional infliction of emotional distress.
To recover for intentional infliction of emotional distress in Ohio,
a plaintiff must establish: (1) that the actor intended to cause
emotional distress or knew or should have known that his actions
would result in serious emotional distress to the plaintiff; (2)
that the conduct complained of has been so outrageous in character
and extreme in degree as to go beyond all bounds of decency; (3)
that the conduct proximately caused the plaintiff's injury; and (4)
that the mental anguish suffered by the plaintiff is serious and of
a nature that no reasonable person could be expected to endure it.
Ashcroft v. Mt. Sinai Med. Ctr., 68 Ohio App.3d 359, 366 (1990).
To be "extreme" and "outrageous," conduct must be "so outrageous in
character, and so extreme in degree, as to go beyond all possible
bounds of decency, and to be regarded as atrocious, and utterly
intolerable in a civilized community."Yeager v. Local Union 20 of
Teamsters, 6 Ohio St.3d 369, 375 (1983); see also Hillman v. Safeco
Ins. Co. of Am., 190 F.Supp.2d 1029, 1039 (N.D .Ohio 2002).
The "extreme and outrageous" conduct identified by Plaintiffs is
Defendant sending pictures of the children after Plaintiffs demanded
that Defendant cease all contact. Defendant explains the reason the
photographs were sent is because Defendant believed the contract was
still valid and the terms required it to pass along status reports
and information, including photos, to Plaintiffs. Although
Defendant's conduct may have added, indeed aggravated, Plaintiffs'
disappointment, this falls significantly short of going "beyond all
bounds of decency" or being "utterly intolerable." Yeager, 6 Ohio
St.3d at 375. Plaintiffs submit no other evidence from which
reasonable minds could conclude Defendant's conduct was either
intended to cause harm, or was extreme or outrageous.
*5 In addition, "[A] plaintiff claiming severe and debilitating
emotional distress must present some `guarantee of genuineness' in
support of his or her claim to prevent summary judgment."Powell v.
Grant Med. Ctr., 148 Ohio App.3d 1, 6 (2002) (citation omitted).
Proof may be displayed through expert or lay witnesses acquainted
with the plaintiff's emotional makeup and subsequent changes. Id. In
the instant action, Plaintiffs' only evidence of emotional distress
is Trisha Smith's affidavit that "[a]lthough [she] never sought any
medical help, [she] did suffer great emotional distress, stress, and
suffering as a result of the Defendant's perpetual fraud" (Doc. No.
66, p. 22). Strikingly absent in Trisha Smith's affidavit is any
mention of the photos causing great emotional distress. Furthermore,
this lone sentence in the affidavit is factually insufficient to
support a claim of mental anguish "of a nature that no reasonable
person could be expected to endure."Ashcroft, 68 Ohio App.3d at 366.
Although a medical diagnosis is not required to show emotional
distress, Plaintiff is required to show some evidence of severe and
debilitating emotional distress. See Gregg v. SBC/Ameritech, Nos.
2:02-CV-980, 2:02-CV-1232, 2:03-CV-636, 2005 WL 1414114, at *23
(S.D. Ohio June 24, 2005) (granting summary judgment when the
requisite facts, including evidence of sleeplessness and anxiety, do
not rise to the level of severe and debilitating distress).
Plaintiff's broad statement in her affidavit does not reach the
threshold necessary for a reasonable jury to conclude Plaintiffs
suffered severe emotional distress from the single mailing of photos.
CONCLUSION
The Court recognizes that there is much heartache that can accompany
an unsuccessful adoption. Plaintiffs' desire to be parents and raise
children is clearly strong and commendable. However, there simply is
no contract breach, fraud or intentional misconduct by Defendant who
likewise wanted very much to bring these children in Plaintiffs'
lives.
The facts, viewed in a light most favorable to Plaintiffs, fail to
establish the necessary elements of the several claims and this
Court finds no genuine issue as to any material fact. Therefore,
Defendant is entitled to judgment as a matter of law, and its Motion
for Summary Judgment is granted.
IT IS SO ORDERED.
N.D.Ohio,2008.
Smith v. Island Coast Intern. Adoption, Chartered, Inc.
Slip Copy, 2008 WL 839793 (N.D.Ohio)