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In re MJG

Court of Appeals of Michigan

July 11, 2017

In re MJG, Minor.

         Oakland Circuit Court Family Division LC No. 2015-832895-AD

          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 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 $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. 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 where no party takes exception to how the contract was performed, when the adoption of children is implicated, 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, importantly for 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, their desire and availability to adopt a child. The issue is further complicated when many of these contracted-for services are performed outside of Michigan and long before the adoption process begins in Michigan. Yet, the 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 at issue that outlines which fees are prohibited, mandated, and permissible 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 were 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 at the circuit court, ANLC filed its 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 at the circuit court, and on appeal, they both continue to maintain that the fees were appropriate and the court erred when it disallowed them.[1]

         We note that while MCL 710.54(10) requires the circuit court to approve or disapprove "all fees, " when 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 that 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 fees paid by the adoptive parents to broadcast via the Internet their availability to adopt are not fees paid "in connection with the adoption, " and therefore, they are 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 purportedly are comparable to other agencies and law firms that provide similar services to adoptive parents throughout the United States. The $21, 400 fee is divided into 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, assessing the prospective client's objectives and challenges, and assistance with other paperwork. The client liaison services include the services of a liaison employee after an individual is retained as a client. The liaison works with other staff to ensure that the client is apprised of the availability of various birth mothers. Marketing services involve efforts to expose the client to birth mothers throughout the United States. ANLC creates a family profile for the client and markets the client 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 client and includes obtaining the birth mother's medical records, determining her emotional support and financial needs, and assisting her in obtaining prenatal care, if necessary.

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

         As required by the statute in 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. 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 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, that while ANLC only represents potential adopting parents, it also provides 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 because neither Yellin nor ANLC could charge attorney fees because Yellin was not licensed to practice law in Michigan. The circuit court also held that none of the fees actually pertained to the supply 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 found that ANLC failed to meet the statutory requirements of a "child placing agency, " which further precluded it from recovering fees under MCL 710.54(3)(a). Consequently, the circuit court denied petitioners' request for approval of $21, 400 in "attorney fees" for ANLC.

         III. STANDARD OF REVIEW

         On appeal, we review whether the circuit court properly denied the $21, 400 in fees. Because this issue is predicated on the interpretation of a statute, our review is de novo. See Stanton v City of Battle Creek, 466 Mich. 611, 614; 647 N.W.2d 508 (2002). "We construe a statute in order to determine and give effect to the Legislature's intent. The goal of statutory interpretation is to discern the intent of the Legislature by examining the plain language of the statute." Auto-Owners Ins Co v Dep't of Treasury, 313 Mich.App. 56, 68-69; 880 N.W.2d 337 (2015) (quotation marks and citations omitted). When a statute's language is unambiguous, "we give the words their plain meaning and apply the statute as written." Rowland v Washtenaw Co Rd Comm, 477 Mich. 197, 202; 731 N.W.2d 41 (2007).

         IV. MCL 710.54

         MCL 710.54 of the Adoption Code governs authorized charges and fees in adoption cases. The interpretation of this statute is an issue of first impression. We quote the language of the statute in full:

(1) Except for charges and fees approved by the court, a person shall not pay or give, offer to pay or give, or request, receive, or accept any money or other consideration or thing of value, directly or indirectly, in connection with any of the following:
(a) The placing of a child for adoption.
(b) The registration, recording, or communication of the existence of a child ...

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