Legal Decisions: Wrongful Adoption

No. 96-688

1998.MT.46

March 10, 1998

EUGENE E. JACKSON AND PEGGY J. JACKSON, INDIVIDUALLY AND AS PARENTS AND NEXT FRIENDS OF AARON JON JACKSON, PLAINTIFFS AND APPELLANTS, v. STATE OF MONTANA, A GOVERNMENTAL ENTITY, THE DEPARTMENT OF FAMILY SERVICES, A STATE AGENCY, AND JOHN AND JANE DOES I-IV, DEFENDANTS AND RESPONDENTS.

APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable Robert W. Holmstrom, Judge presiding.

Heard: November 4, 1997 Submitted: November 5, 1997

Counsel Of Record: For Appellants: A. Clifford Edwards (argued) and Roger W. Frickle; Edwards Law Firm; Billings, Montana For Respondents: T. Thomas Singer (argued) and Nancy Bennett; Moulton, Bellingham, Longo & Mather, P.C.; Billings, Montana

The opinion of the court was delivered by: The Honorable Justice Jim Regnier

96-688

In April 1994, adoptive parents Eugene and Peggy Jackson filed an action based in negligence with the District Court for the Thirteenth Judicial District in Yellowstone County against the State of Montana, the Department of Family Services, and John and Jane Does I-IV (the State). The Jacksons primarily alleged the State negligently misrepresented, and failed to disclose to them, certain material facts regarding the psychological and medical background of their adoptive son's birth mother and putative father.

On August 7, 1995, the State filed an initial motion for summary judgment with respect to all counts contained in the Jacksons' complaint. The Jacksons amended their complaint in November 1995, and the State filed a supplemental motion for summary judgment in April 1996. On November 6, 1996, the District Court issued an order granting the State's original and supplemental motions for summary judgment. It is from this order that the Jacksons presently appeal. For the reasons discussed below, we reverse.

We find the following issues dispositive on appeal:

1. Did the District Court err in concluding the State had neither a common law nor a statutory duty to fully and accurately disclose to the Jacksons information in its possession regarding the psychological and medical background of their adoptive son's birth mother and putative father?

2. Did the District Court err in implicitly concluding the State sufficiently established the absence of any genuine issue of material fact regarding a causal connection between the State's allegedly negligent conduct and the Jacksons' injuries?

FACTUAL AND PROCEDURAL BACKGROUND

Lawrence John Allen Russell (later renamed Aaron Jon Jackson by his adoptive parents and hereinafter referred to as Aaron) was born on November 8, 1983, to Deborah Annette Russell, his biological mother. Aaron's two putative fathers are Brian Scott and Robert T. Stevens. Russell spent much of her pregnancy incarcerated at the Women's Correctional Center at Warm Springs, Montana, during which period she underwent a psychological evaluation by clinical psychologist, Dr. B. A. Peters. Dr. Peters concluded that Russell had a Full Scale I.Q. of 73, and wrote that certain test scores "strongly suggest[]" the presence of an "organic or psychiatric impairment." Dr. Peters additionally described Russell's thinking as "disorganized, unconventional, diffused, possibly at times delusional" and characterized her as an "emotionally immature and inappropriate" young woman who "is making a marginal psychological adjustment." Ultimately, Dr. Peters diagnosed Russell with borderline intellectual functioning and inadequate personality.

In January 1984, Russell fed her infant son soda pop, meat, and vegetables, which caused him to aspirate and led to his hospitalization. As a result of this incident, the State began providing child protective services to Russell and Aaron. In February 1984, social worker Marylis Filipovich prepared a social study in which she noted Russell's "IQ is approximately 70, and functions as though she is retarded." In conclusion, Filipovich remarked that "besides [Russell's] low functioning, she seems to be quite disturbed and will need professional counseling."

In the following months, the State continued to provide child protective services to Aaron, Russell, and Aaron's two putative fathers, Brian Scott and Robert Stevens. The State, in fact, entered into a service treatment agreement with Russell and Scott, and into a second such agreement with Russell and Stevens. Moreover, the State arranged for Russell to undergo a psychological evaluation by clinical psychologist Kenneth Collier, on June 7, 1984. In his report, Dr. Collier noted that "eople who produce similar clinical profiles are seen as having a long-standing and chronic emotional disturbance, most likely a personality disorder, though a paranoid disorder should be considered." Dr. Collier described Russell as "clinically intellectually dull" and his ultimate diagnosis was one of "Paranoid Personality Disorder with mild mental retardation."

In December 1983, Aaron's putative father, Stevens, was treated on an inpatient basis by Dr. R. V. Edwards of the Veterans Administration Medical Center in Sheridan, Wyoming. In his written report, Dr. Edwards noted that Stevens complained of "feelings of unreality as though things were floating" and diagnosed him with a "schizophrenic disorder, paranoid type." The State acquired a copy of Dr. Edwards' evaluation prior to Aaron's adoption in 1986.

On August 1, 1984, social worker Dave Wallace submitted a report to the court on behalf of the State which chronicled Russell's difficulties and recommended that the State receive permanent custody of Aaron and that he be made available for adoption. Among the items referenced in the report, were Dr. Peters' and Dr. Collier's psychological evaluations, as well as Filipovich's social study. In addition, copies of Dr. Peters' and Dr. Collier's reports were attached to the report.

On December 31, 1984, the District Court issued an order terminating the parental rights of Russell, Scott, and Stevens, and awarded permanent legal custody of Aaron to the State with the right to consent to his adoption. Roughly one month later, resource worker Betty Petek contacted the Jacksons and informed them that Aaron was available for adoption.

The Jacksons had applied with the State to become adoptive parents just one week after Aaron's birth, in November 1983. To become adoptive parents, the Jacksons completed a written application and participated in personal interviews with Petek. During the course of this application process, the Jacksons advised Petek that they could not provide care for a child that had, or might be at risk for, developing a mental disorder. On March 10, 1984, Petek completed the Jacksons' adoptive home study and recommended that they "be approved for the adoption of one Caucasian child, either sex, infancy through two years of age," noting that they would consider adopting a child with "a minor correctable handicap." In accordance with Petek's recommendation, the Jacksons were approved as adoptive parents on May 1, 1984.

Thus, in January 1985, shortly after Aaron became available for adoption, Petek contacted the Jacksons and informed them of Aaron's availability. That evening, the Jacksons discussed the possibility of adopting fifteen-month-old Aaron and agreed between the two of them that "if the family history was acceptable . . . and if the child appeared normal looking physically, that would probably take him." On January 28, 1985, the Jacksons met with Petek and Wallace to discuss Aaron's family background, and the possibility of initiating visits with Aaron.

During this visit, the Jacksons specifically asked Wallace and Petek whether there was any history of mental illness in Aaron's family. Although they were each aware of the reports completed by Dr. Peters, Dr. Collier, and Dr. Edwards, as well as Filipovich's social study, neither Wallace nor Petek disclosed the content of these evaluations to the Jacksons in response to their inquiry. In Wallace's actual possession at the time of this meeting were Filipovich's social study, a January 9, 1985, social history update, and his August 1, 1984, report to the court to which copies of Dr. Peters' and Dr. Collier's evaluations had been attached. Wallace generally referred to the documents in his possession to answer the Jacksons' questions during the visit, but did not provide them with copies and did not disclose the various psychological evaluations.

Instead, Peggy Jackson's deposition testimony indicates that Wallace and Petek provided the Jacksons with the following background information during this January 28, 1985, meeting:

They told us that Aaron was removed from his parents, that they determined the mother not capable of caring for him, that when he was very little, that she had attempted to feed him some sort of solid food and pop and he aspirated and was hospitalized. . . .

We talked about family. They mentioned that she came from a family, how they termed it was, several generation welfare family, it was low economic status. They felt the family was socially inept. They mentioned, well, when we asked what the mother was like, they told us that physically she was healthy.

There may have been a possibility of some drug usage, but they felt that was minimal, because they told us she had been incarcerated for most of her pregnancy on a criminal charge.

We asked why she was unable to take care of Aaron, and we were told that she moved around a lot and that she didn't meet his needs for feeding him or caring for him physically and that she didn't appear to even have the interest to stick it out and stay with him and learn those skills.

In the weeks following their meeting with Wallace and Petek, the Jacksons visited with Aaron on a number of occasions, and entered into an adoptive placement agreement with the State on March 5, 1985. On January 2, 1986, the District Court issued an order finalizing Aaron's adoption.

Although the State's records included Dr. Peters' and Dr. Collier's psychological evaluations of Russell, Filipovich's social study, and Dr. Edwards' report concerning Aaron's putative father, Stevens, the State never disclosed the content of these evaluations to the Jacksons prior to the finalization of Aaron's adoption in January 1986.

Aaron began to exhibit behavioral problems, and on December 16, 1987, the Jacksons took Aaron to the Child Study Center at the Children's Clinic in Billings, Montana, where Dr. Paul R. Crellin performed a pediatric and pediatric neurological evaluation. Aaron's behavior had become such that he "could not seem to keep attention, was disruptive, frustrated, was always going fast and 'furious,' and this was becoming more and more of a problem" for those around him. Dr. Crellin concluded that "Aaron had significant attention deficit disorder with hyperactivity" and noted that it was "impossible to tell whether or not this is a genetic trait that he inherited from his mother or father, or whether it has to do with the chemical or substance abuse that the mother had during her pregnancy."

The record in this case documents Aaron's continuing history of psychological and emotional problems. On February 7, 1989, for example, clinical psychologist Dr. Ned N. Tranel evaluated Aaron and concluded that he "displays a host of features of attention deficit disorder with and without hyperactivity." Clinical psychologist Dr. William Dee Woolston first saw Aaron in October 1991, and continues to treat him. In a December 1994 report, Dr. Woolston explained that he had diagnosed Aaron with pervasive developmental disorder, learning disorder, and attention deficit hyperactivity disorder. In November 1991, Aaron was hospitalized at the Deaconess Psychiatric Center Youth Treatment Unit where he began a course of psychopharmaceutical treatment. On the date of Aaron's discharge, Dr. J. Earle diagnosed Aaron with psychotic disorder, history of attention deficit hyperactivity disorder, and pervasive developmental disorder.

Aaron was readmitted into the deaconess Medical Center on two separate occasions in December 1992, and has since seen Dr. Woolston for ongoing psychotherapy. Aaron has additionally been under the continuous care of Dr. John Talbot Blodgett, a child and adolescent psychiatrist.

On April 6, 1994, the Jacksons filed a negligence action in District Court against the named defendants in this case. In their original complaint, the Jacksons asserted claims against the State for breach of contract, negligent misrepresentation, negligent disclosure, and negligent supervision. On August 7, 1995, the State filed a motion for summary judgment with respect to each count leveled against it in the Jacksons' complaint. The Jacksons subsequently abandoned their claim for breach of contract, and on September 22, 1995, the parties attended a final pretrial conference. As a result of the pretrial conference, the District Court vacated the trial date and issued a new scheduling order.

The Jacksons obtained permission from the District Court to amend their complaint, and on November 6, 1995, filed an amended complaint which omitted their original breach of contract claim and added an additional cause of action for negligence based upon the doctrine of informed consent. The amended complaint additionally contained a revised caption pursuant to which the Jacksons sought to bring suit, not only in their individual capacities, but also "as parents and next friends of Aaron Jon Jackson."

In response to the amended complaint, the State renewed its original motion for summary judgment and filed a supplemental motion for summary judgment on April 19, 1996. On November 6, 1996, the District Court issued an order granting the State's original and supplemental motions for summary judgment. It is from this order that the Jacksons presently appeal. For the reasons stated below, we reverse the order of the District Court.

STANDARD OF REVIEW

This Court's standard of review in appeals from summary judgment rulings is de novo. Treichel v. State Farm Mut. Auto. Ins. Co. (1997), 280 Mont. 443, 446, 930 P.2d 661, 663. (citing Motarie v. Northern Montana Joint Refuse Disposal Dist. (1995), 274 Mont. 239, 242, 907 P.2d 154, 156; Mead v. M.S.B., Inc. (1994), 264 Mont. 465, 470, 872 P.2d 782, 785). This Court reviews a summary judgment order entered pursuant to Rule 56, M.R.Civ.P., based on the same criteria applied by the district court. Treichel, 280 Mont. at 446, 930 P.2d at 663 (citing Bruner v. Yellowstone County (1995), 272 Mont. 261, 264, 900 P.2d 901, 903).

In proving that summary judgment is appropriate:

The movant must demonstrate that no genuine issues of material fact exist. Once this has been accomplished, the burden then shifts to the non-moving party to prove by more than mere denial and speculation that a genuine issue does exist. Having determined that genuine issues of material fact do not exist, the court must then determine whether the moving party is entitled to judgment as a matter of law. [This Court] reviews the legal determinations made by the district court as to whether the court erred.

Bruner, 272 Mont. at 264-65, 900 P.2d at 903.

Moreover, the "moving party has the burden of showing a complete absence of any genuine issue as to all facts considered material in light of the substantive principles that entitle the moving party to judgment as a matter of law and all reasonable inferences are to be drawn in favor of the party opposing summary judgment." Kolar v. Bergo (1996), 280 Mont. 262, 266, 929 P.2d 867, 869.

DISCUSSION

The crux of the Jacksons' "wrongful adoption" suit is their allegation that the State negligently misrepresented, and failed to disclose to them, certain material facts regarding the psychological background of their adoptive son's birth mother and putative father. To determine whether Montana law recognizes a cause of action for "wrongful adoption," such as the one initiated in the present case, we must simply determine "whether long-standing common law causes of action should be applied to the adoption context." Gibbs v. Ernst (Pa. 1994), 647 A.2d 882, 886. Indeed, a number of courts have recognized "that the question of whether to recognize causes of action for 'wrongful adoption' simply requires the straightforward application and extension of well-recognized common-law actions, such as negligence and fraud, to the adoption context and not the creation of new torts." Mallette v. Children's Friend and Service (R.I. 1995), 661 A.2d 67, 69 (citing Roe v. Catholic Charities of the Diocese of Springfield (1992), 588 N.E.2d 354, 357, appeal denied, 602 N.E.2d 475 (1992)); see also Gibbs, 647 A.2d at 886.

Here, the Jacksons have brought a negligence-based action against the State, specifically alleging claims for negligent misrepresentation, negligent nondisclosure, negligence based on a lack of informed consent, and negligent supervision. The present appeal thus requires us to determine whether these "long-standing common law causes of action should be applied to the adoption context" and whether they constitute viable claims in the present case. Gibbs, 647 A.2d at 886.

ISSUE 1

Did the District Court err in concluding the State had neither a common law nor a statutory duty to fully and accurately disclose to the Jacksons information in its possession regarding the psychological and medical background of their adoptive son's birth mother and putative father?

As noted, the Jacksons have asserted four negligence-based claims against the State, including claims for negligent misrepresentation, negligent nondisclosure, negligence based on lack of informed consent, and negligent supervision. It is well-established that a plaintiff in a negligence action must prove the existence of a duty, breach of duty, causation, and damages. See e.g., Kitchen Krafters v. Eastside Bank of Montana (1990), 242 Mont. 155, 161, 789 P.2d 567, 571, overruled in part on other grounds by Busta v. Columbus Hosp. Corp. (1996), 276 Mont. 342, 370, 916 P.2d 122, 139. Thus, the presence of a legal duty is an essential element of each of the Jacksons' negligence-based claims at issue on appeal.

We have recognized that "the existence of a legal duty is a question of law to be determined by the district court." Yager v. Deane (1993), 258 Mont. 453, 456, 853 P.2d 1214, 1216. We review such a conclusion of law by the district court to determine whether the court's interpretation of the law is correct. Carbon County v. Union Reserve Coal Co. (1995), 271 Mont. 459, 469, 898 P.2d 680, 687.

On appeal, the Jacksons urge the District Court erred in concluding the State owed them no duty of care upon which they may now premise their claims for negligence and negligent misrepresentation. The Jacksons first argue the court erred in concluding the State had no common law duty to fully and accurately disclose certain background information regarding the psychological health of Aaron's birth parents. The Jacksons next contend the court similarly erred in concluding the State had no statutory duty to disclose the background information which the Jacksons allege was withheld in this case.

In contrast, the State argues it had neither a common law nor a statutory duty to disclose in the present case. More specifically, the State argues it had no common law duty because it made no misleading statements to the Jacksons regarding Aaron's familial background. The State next contends the imposition of a either a common law or statutory duty to disclose the background information allegedly withheld in the present case would conflict with the State's statutory duty to maintain confidentiality of the birth parents' medical records.

Thus, with respect to our discussion in the present case, we must first determine whether the lower court erred in concluding the State owed no common law or statutory duty to the Jacksons to either disclose or avoid negligently misrepresenting certain information in its possession regarding the psychological background of their adoptive son's birth mother and putative father.

A. Common law duty: negligent misrepresentation

We turn initially to the question of whether the State had a common law duty sufficient to support the Jacksons' negligence-based claims in the present case. Of central importance to the Jacksons' suit is their claim for negligent misrepresentation, in which they allege the State misrepresented certain material facts regarding Aaron's family background.

This Court has long recognized the common law tort of negligent misrepresentation. See, e.g., Kitchen Krafters, 242 Mont. At 165, 789 P.2d at 573. In Kitchen Krafters, we set out the following elements of a claim for negligent misrepresentation:

a) the defendant made a representation as to a past or existing material fact;

b) the representation must have been untrue;

c) regardless of its actual belief, the defendant must have made the representation without any reasonable ground for believing it to be true;

d) the representation must have been made with the intent to induce the plaintiff to rely on it;

e) the plaintiff must have been unaware of the falsity of the representation; it must have acted in reliance upon the truth of the representation and it must have been justified in relying upon the representation;

f) the plaintiff, as a result of its reliance, must sustain damage.

Kitchen Krafters, 242 Mont. at 165, 789 P.2d at 573.

To succeed with a claim for negligent misrepresentation, a party need not demonstrate an intent on the part of a defendant to misrepresent, but must merely show "a failure to use reasonable care or competence in obtaining or communicating . . . information." Barrett v. Holland & Hart (1992), 256 Mont. 101, 107, 845 P.2d 714, 717. See also Batten v. Watts Cycle and Marine, Inc. (1989), 240 Mont. 113, 117, 783 P.2d 378, 381, cert. denied, 494 U.S. 1087 (1990). For liability to arise, "it not necessary that the negligent misrepresentation constitute constructive fraud, nor actual fraud." Bottrell v. American Bank (1989), 237 Mont. 1, 21, 773 P.2d 694, 706. Rather, a "want of ordinary care" on the part of a defendant may, under certain circumstances, give rise to liability for negligent misrepresentation. Bottrell, 237 Mont. at 21, 773 P.2d at 706. The presence of a duty to exercise due care is thus a requisite element of any claim for negligent misrepresentation.

We have previously held that "he existence of a duty of care [in a negligence-based action] depends upon the foreseeability of the risk and upon a weighing of policy considerations for and against the imposition of liability." Singleton v. L.P. Anderson Supply Co., Inc. (Mont. 1997), 943 P.2d 968, 971, 54 St. Rep. 738, 739 (quoting Maguire v. Department of Institutions (1992), 254 Mont. 178, 189, 835 P.2d 755, 762).

1. Public Policy

Among those policy considerations this Court will weigh in determining whether to impose a duty are

(1) the moral blame attached to a defendant's conduct; (2) the prevention of future harm; (3) the extent of the burden placed on the defendant; (4) the consequences to the public of imposing such a duty; and (5) the availability and cost of insurance for the risk involved.

Singleton, 943 P.2d at 971, 54 St. Rep. at 739 (citing Phillips v. City of Billings (1988), 233 Mont. 249, 253, 758 P.2d 772, 775). See also, Estate of Strever v. Cline (1996), 278 Mont. 165, 172, 924 P.2d 666, 670.

As the question of whether public policy weighs in favor of the imposition of a duty upon the State to use due care in disclosing information regarding an adoptive child's birth parents is one of first impression in Montana, we turn for initial guidance to case law from other jurisdictions. Courts in a number of other states have, under certain circumstances, recognized a cause of action for negligent misrepresentation in the adoption context and the concomitant presence of a duty on the part of an adoption agency to use due care in disseminating medical background information to potential adoptive parents. See, e.g., Mohr v. Commonwealth (Mass. 1995), 653 N.E.2d 1104; M.H. and J.L.H. v. Caritas Family Services (Minn. 1992), 488 N.W.2d 282, 288; Gibbs v. Ernst (Pa. 1994), 647 A.2d 882, 891-92; Mallette v. Children's Friend and Service (R.I. 1995), 661 A.2d 67, 71; Meracle v. Children's Service Society of Wisconsin (Wisc. 1989), 437 N.W.2d 532, 537. But see Michael J. v. Los Angeles County, Department of Adoptions (1988), 201 Cal. App. 3d 859, 874-75; Richard v. Vista Del Mar Child Care Service (1980), 106 Cal. App. 3d 860, 866-68.

In recognizing that an adoption agency may owe such a duty to use reasonable care, these courts have invariably premised that duty "on the adoption agencies' voluntary dissemination of health information concerning the child to potential adopting parents." Mallette, 661 A.2d at 70. Courts have commonly recognized that a duty on the part of the adoption agency to use due care may arise only when the agency "begin volunteering information to potential adopting parents." Mallette, 661 A.2d at 70. See also Caritas, 488 N.W.2d at 288 (concluding that adoption agencies must "use due care to ensure that when they undertake to disclose information about a child's genetic parents and medical history, they disclose that information fully and adequately . . ."); Meracle, 437 N.W.2d at 537 (where an adoption agency makes affirmative misrepresentations about a child's health and background, it has assumed a duty); Gibbs, 647 A.2d at 890 (recognizing that "an adoption agency has assumed the duty to tell the truth when it volunteers information to prospective parents"). Thus, courts will, under certain circumstances, impose upon adoption agencies a duty to use due care and to refrain from making negligent adoptive parents.