In re MJG

320 Mich.App. 310

906 N.W.2d 815

IN RE MJG, Minor.

No. 332928

Court of Appeals of Michigan.

Submitted December 9, 2016, at Detroit.

Decided July 11, 2017, 9:00 a.m.

The Law Office of Dion E. Roddy, PLLC (by Dion E. Roddy ), for petitioners.

Speaker Law Firm PLLC (by Liisa R. Speaker and Jennifer M. Alberts) for the Adoption Network Law Center.

Amici Curiae: Warner Norcross & Judd LLP (by Jonathan Lauderbach, Conor B. Dugan, and Emily S. Rucker ) for Bethany Christian Services.

Lauran F. Howard for the American Academy of Adoption Attorneys.

Williams Williams Rattner & Plunkett, PC (by Donna Marie Medina ), and Conklin Law Firm (by Mary M. Conklin ) for Supporting Members of the State Bar of Michigan Whose Adoption Cases Comprise a Significant Portion of Their Legal Practice.

Bill Schuette, Attorney General, Aaron D. Lindstrom, Solicitor General, Laura Moody, Chief Legal Counsel, and Jonathan S. Ludwig, Assistant Attorney General, for the Michigan Department of Health and Human Services.

Before: Saad, P.J., and Meter and Murray, JJ.

Saad, P.J.

This case arises from the adoption of MJG, a minor child, by the adoptive parents-petitioners under the Michigan Adoption Code, MCL 710.21 et seq. , and specifically involves the fees paid by petitioners to appellant, Adoption Network Law Center (ANLC), for services performed that may have been related to the adoption process. After a hearing was held regarding the fees, the circuit court denied petitioners' request for approval of the $21,400 in fees they paid to ANLC, and the court required that the money be returned. ANLC appeals, and for the reasons set forth herein, we affirm in part, reverse in part, and remand.

I. NATURE OF THE CASE

As the attorney general correctly points out in its amicus brief, the adoption of children may be used for good or ill. The adoption of children can either be a special opportunity for childless adults who long to be parents and Michigan children who would benefit greatly from a home with caring parents, or adoption may be used as a cover for baby selling, which is repugnant, unlawful, and contrary to the best interests of the children involved. And, unquestionably, the focus of Michigan law is to advance the best interests of children, whether the specific issue is custody, termination of parental rights or, as here, adoption.

While courts normally do not interject themselves into contractual matters between competent parties when no party takes exception to how the contract was performed, the Legislature, through its enactment of MCL 710.54, requires courts to review payments made in connection with Michigan adoptions. This legislation seeks to promote the best interests of children by providing for adoption by adoptive parents, while also minimizing the risk of baby selling. To accomplish this dual goal, the Michigan Legislature gave courts supervisory power over the adoption process, including, and important to our analysis, the power to permit or prohibit certain fees paid by adoptive parents "in connection with the adoption."

Complications arise when, as here, adoptive parents from outside Michigan enter into a contract with a non-Michigan entity to broadcast, on a worldwide or nationwide basis, the adoptive parents' desire and availability to adopt a child. The issue is further complicated when many of these contracted-for services are performed outside Michigan and long before the adoption process begins in Michigan. These complications arise because adoptive parents from outside Michigan who find a child to adopt in Michigan must, as part of the adoption process, submit to a Michigan court a verified accounting of fees paid to the non-Michigan entity. And the statute that outlines which fees are prohibited, mandated, and permitted is complicated and includes criminal penalties for violations of its fee-reporting provisions.

In this case, pursuant to MCL 710.54, the adoptive parents of MJG submitted their list of fees and expenses to the circuit court. And though both the adoptive parents and ANLC agreed that the $21,400 in fees was acceptable, the circuit court ultimately rejected all of the fees, and ANLC was required to return the money. Although not a party to the proceedings in the circuit court, ANLC filed an appeal in this Court. Again, this case presents a somewhat unusual situation because neither the adoptive parents nor ANLC disputed the legitimacy of the fees or the amount of the fees in the circuit court, and on appeal, both ANLC and the adoptive parents continue to maintain that the fees were appropriate and that the court erred when it disallowed them.¹

Although MCL 710.54(10) requires the circuit court to approve or disapprove "all fees," when this mandate is considered in context with the rest of the statute, it is clear that the court only has authority to approve or disapprove fees for services that were required to be submitted to the court for approval in the first instance. For fees that fall under MCL 710.54(7)(a), this means that only fees that were for services made "in connection with the adoption" require court approval. Thus, before a court disapproves any submitted fees, it should determine whether the fees actually fall under the scope of the statute.

As explained below, although some fees were properly denied, the trial court erred when it rejected certain fees paid because those fees fall outside the purview of the statute. As an example, we preliminarily note that the marketing fee paid by the adoptive parents to broadcast via the Internet their availability to adopt is not a fee paid "in connection with the adoption," and therefore, it is not subject to court approval. Accordingly, we affirm the court's denial of some fees, reverse the denial of others, and remand for clarification regarding other fees.

II. BASIC FACTS

ANLC is a California law corporation, petitioners reside in Indiana, and the adoption was finalized in Michigan where MJG was born. Before any adoptee was identified for petitioners, petitioners and ANLC entered into an Adoption Services Agreement, which provided that petitioners would pay a total of $21,400 for ANLC's services. According to testimony, ANLC's costs are purportedly comparable to those of other agencies and law firms that provide similar services to adoptive parents throughout the United States. The $21,400 fee was divided among the following three phases:

Phase I
       Preliminary and Administrative and Client Liaison Services Fees     $4,000
       Marketing Services Fee                                              $5,800
Phase II
       Fundamental Readying and Legal Analysis Fee                         $5,800
Phase III
       Adoption Opportunity Services Fee                                   $5,800

The $4,000 fee in Phase I is for preliminary and administrative services and client liaison services. The preliminary and administrative services include consultations with prospective clients, assistance in completing a confidential adoption questionnaire, assessment of the prospective clients' objectives and challenges, and assistance with other paperwork. The client liaison services include the services of a liaison employee after adoptive parents are retained as clients. The liaison works with other staff to ensure that the clients are informed of the availability of various birth mothers. Marketing services involve efforts to expose the clients to birth mothers throughout the United States. ANLC creates a family profile for the clients and markets the clients through search engine optimization on the Internet, outreach with hard copy materials to clients and pregnancy centers, and Internet advertising and marketing.

The Phase II services of fundamental readying and legal analysis begin when a birth mother desires to meet ANLC's clients. The services include obtaining the birth mother's medical records, determining her emotional and financial needs, and assisting her in obtaining prenatal care if necessary.

The Phase III services occur after the clients are introduced to the birth mother. These services include managing the adoption plan, communicating with legal entities, and coaching the relationship between the birth mother and the clients. ANLC also handles the trust account for birth mother expenses.

As required by the statute at issue, petitioners submitted a verified accounting and a supplement to their verified accounting, which detailed the payments they made to ANLC that were "related" to the adoption. MCL 710.54(7)(a). Notably, petitioners categorized all of ANLC's fees as "attorney fees" on the accounting forms they submitted to the circuit court. Petitioners explained that they used "attorney fees" because ANLC is a law firm but said that they were open to using other categories on the form, if the circuit court desired.

At the hearing related to the fees, ANLC's owner and chief counsel, Kristin Yellin, testified by telephone. According to Yellin, while ANLC only represents potential adoptive parents, it does provide support services to birth mothers. After Yellin testified, the circuit court noted that although the fees were "listed under attorney fees" in petitioners' request, the court "didn't hear [Yellin] say one single word about providing legal services[.]"

In its opinion and order, the circuit court first acknowledged that pursuant to MCL 710.54(3)(f), legal fees are an allowable expense that can be charged to adoptive parents. However, the court ruled that none of the fees at issue was recoverable as an attorney fee because neither Yellin nor ANLC could charge attorney fees given that Yellin was not licensed to practice law in Michigan. The circuit court also held that none of the fees actually pertained to the delivery of any legal services. Thus, even if Yellin were admitted to practice law in Michigan, the fees were not legal fees and, accordingly, were not recoverable under MCL 710.54(3)(f). The circuit court also ruled that ANLC failed to meet the...