in Re Jsp ( 2017 )

STATE OF MICHIGAN
COURT OF APPEALS
FOR PUBLICATION
In re BGP, Minor. July 11, 2017
9:05 a.m.
No. 333700
Oakland Circuit Court
Family Division
LC No. 2015-837535-AD
In re JSP, Minor. No. 333813
Oakland Circuit Court
Family Division
LC No. 2016-838283-AD
Before: SAAD, P.J., and METER and MURRAY, JJ.
SAAD, P.J.
In these consolidated cases, nonparty1 American Adoptions, Inc., appeals the circuit
court’s order that disallowed the payment of administrative and marketing fees by the adoptive
parents related to the adoption of two minors in Michigan. For the reasons provided below, we
reverse in part and remand.
I. BACKGROUND
Both cases arise from the adoption of a minor child under the Adoption Code, MCL
710.21 et seq. These cases specifically involve the fees paid by the respective adoptive parents
(petitioners) for services ostensibly related to the adoption process. American Adoptions is a
1
American Adoptions was not a party at the trial court, but because the trial court denied fees
that were to be paid to it, it filed the appeal in this Court.
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not-for-profit adoption agency based in Kansas, petitioners reside outside of Michigan, 2 and the
adoptee children were born in Michigan.
As required by MCL 710.54(7), the adoptive parents in each case submitted a verified
accounting and a supplement to their verified accounting, which detailed the payments made
purportedly in connection with their adoption of children born in Michigan. In both cases,
petitioners identified American Adoptions as the payee of the administrative fee and American
Family Media as the payee of the marketing fee. Petitioners attached, in addition to other
documents, a letter from American Adoptions that explained its fees.3 The letters were written
by Wade Morris, the Director of Community Resources for American Adoptions, and addressed
to petitioners’ attorney (same attorney in each case). We infer that because American Family
Media—and not American Adoptions—received the marketing fee from petitioners, Morris’s
letter did not reference any marketing fee. With respect to the administrative fee, Morris stated
the following, in pertinent part:
This fee covers other general overhead expenses relating to various administrative
functions of American Adoptions or other Adoption Professionals, including but
not limited to the many and various administrative functions that American
Adoptions or other Adoption Professionals undertake prior to an adoption
opportunity. This fee is fully refundable if the adoption opportunity is ultimately
unsuccessful.[4]
Morris explained that American Adoptions’s monthly cost for such overhead expenses totaled
approximately $267,000.
The circuit court approved all of the requested fees and costs, with the exception of the
administrative fees and marketing fees. In Docket No. 333700, the circuit court disallowed
$7,250 in administrative fees and $4,000 in marketing fees. In Docket No. 333813, the circuit
court rejected $4,495 in administrative fees and $10,000 in marketing fees. The circuit court in
both cases did not provide any explanation for its denial of these particular fees.5
II. DUE PROCESS
2
The petitioners in Docket No. 333700 reside in Hawaii, and the petitioners in Docket No.
333813 reside in Nebraska.
3
The submitted letters in both cases are essentially the same except for the background
information pertaining to the respective petitioners and the respective adoptee children.
4
Morris provided a nonexhaustive list of examples of overhead expenses: contract labor, IT
services, its legal fees, postage, payroll, health insurance, professional insurance, telephone,
medical records, office supplies, and rent.
5
American Adoptions unsuccessfully sought to have the trial court reconsider its decision in
both cases.
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American Adoptions argues on appeal that it was denied due process because it was
unable to participate in a hearing related to the approval of the fees. We review this unpreserved
constitutional issue for plain error affecting substantial rights.6 Demski v Petlick, 309 Mich App
404, 463; 873 NW2d 596 (2015).
The United States and Michigan Constitutions provide that “[n]o person may be deprived
of life, liberty, or property without due process of law.” Murphy-DuBay v Dep’t of Licensing &
Regulatory Affairs, 311 Mich App 539, 558; 876 NW2d 598 (2015), citing US Const, Am V; US
Const, Am XIV, § 1; Const 1963, art 1, § 17. Thus, “[d]ue-process protections are only required
when a life, liberty, or property interest is at stake.” Id. “To have a protected property interest,
one must possess more than a unilateral expectation to the claimed interest; the claimant must
have a legitimate claim of entitlement.” York v Civil Serv Comm, 263 Mich App 694, 702-703;
689 NW2d 533 (2004) (quotation marks and citation omitted). Here, there is no doubt that
American Adoptions had a property interest in the administrative fee because the adoptive
parents were contractually bound to pay this fee to it.7
At its core, “[d]ue process requires the opportunity to be heard at a meaningful time and
in a meaningful manner.” Id. at 702 (quotation marks and citations omitted). Here, American
Adoptions cannot show how any plain error affected its substantial rights. First, although
American Adoptions may not have been formally invited to participate in the proceedings at the
circuit court because it was not a party to the adoption, it nonetheless was able to successfully
present its views regarding the administrative fees to the circuit court through the “fee
explanation” letters written by Morris. Thus, the court received materials to consider petitioners’
request to approve the fees, and among those materials was American Adoptions’s letter
outlining what the administrative fees covered. Importantly, “[a]n oral hearing is not necessary
to provide a meaningful opportunity to be heard.” English v Blue Cross Blue Shield of Mich, 263
Mich App 449, 460; 688 NW2d 523 (2004).8 Consequently, American Adoptions has failed to
prove any plain error by virtue of the fact that no formal hearing was held.
6
Although American Adoptions raised the issue in its respective motions for reconsideration,
“[w]here an issue is first presented in a motion for reconsideration, it is not properly preserved.”
Vushaj v Farm Bureau Gen Ins Co of Mich, 284 Mich App 513, 519; 773 NW2d 758 (2009).
7
However, American Adoptions did not have a property interest in any marketing/advertising
fee because it was not the recipient of such a fee (American Family Media was) and there is
nothing in the record to show that American Adoptions was entitled to any portion of that fee.
Additionally, American Adoptions stated in its briefs on appeal that, although it recommends
American Family Media to its clients, these prospective adoptive parents are free to hire any
media company they desire. Accordingly, with respect to the marketing fee, American
Adoptions was not entitled to any due process.
8
In fact, counsel for American Adoptions at oral argument in this Court took the position that the
letter written by Morris was sufficient to convey American Adoptions’s interests and position,
such that no further hearing should have been necessary. Counsel instead claimed that a hearing
was necessary only when the court issued the adverse decision. We find no support for the view
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III. ADMINISTRATIVE FEE
American Adoptions claims that the circuit court erred when it denied the approval of the
administrative fee. We review the circuit court’s decision for an abuse of discretion. See In re
KMN, 309 Mich App 274, 294; 870 NW2d 75 (2015). And we review issues of statutory
interpretation de novo. Auto-Owners Ins Co v Dep’t of Treasury, 313 Mich App 56, 68-69; 880
NW2d 337 (2015).
“MCL 710.54 of the Adoption Code governs authorized charges and fees in adoption
cases.” In re MJG, ___ Mich App ___; ___ NW2d ___ (2017) (Docket No. 332928), slip op, p
4. The statute provides as follows:
(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 available for adoption.
(c) A release.
(d) A consent.
(e) A petition.
(2) Except for a child placing agency’s preparation of a preplacement assessment
described in section 23f of this chapter or investigation under section 46 of this
chapter, a person shall not be compensated for the following activities:
(a) Assisting a parent or guardian in evaluating a potential adoptive parent.
(b) Assisting a potential adoptive parent in evaluating a parent or guardian
or adoptee.
(c) Referring a prospective adoptive parent to a parent or guardian of a
child for purposes of adoption.
(d) Referring a parent or guardian of a child to a prospective adoptive
parent for purposes of adoption.
that an adverse decision acts to implicate or trigger due process. The key is whether there was a
meaningful opportunity to be heard before the decision was rendered, and in this case, the
information American Adoptions wanted to present to the trial court was indeed presented.
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(3) An adoptive parent may pay the reasonable and actual charge for all of the
following:
(a) The services of a child placing agency in connection with an adoption.
(b) Medical, hospital, nursing, or pharmaceutical expenses incurred by the
birth mother or the adoptee in connection with the birth or any illness of
the adoptee, if not covered by the birth parent’s private health care
payment or benefits plan or by Medicaid.
(c) Counseling services related to the adoption for a parent, a guardian, or
the adoptee.
(d) Living expenses of a mother before the birth of the child and for no
more than 6 weeks after the birth.
(e) Expenses incurred in ascertaining the information required under this
chapter about an adoptee and the adoptee’s biological family.
(f) Legal fees charged for consultation and legal advice, preparation of
papers, and representation in connection with an adoption proceeding,
including legal services performed for a biological parent or a guardian
and necessary court costs in an adoption proceeding.
(g) Traveling expenses necessitated by the adoption.
(4) An adoptive parent shall pay the reasonable and actual charge for preparation
of the preplacement assessment and any additional investigation ordered pursuant
to section 46 of this chapter.
(5) A prospective adoptive parent shall pay for counseling for the parent or
guardian related to the adoption, unless the parent or guardian waives the
counseling pursuant to section 29 or 44.
(6) A payment authorized by subsection (3) shall not be made contingent on the
placement of the child for adoption, release of the child, consent to the adoption,
or cooperation in the completion of the adoption. If the adoption is not
completed, an individual who has made payments authorized by subsection (3)
may not recover them.
(7) At least 7 days before formal placement of a child under section 51 of this
chapter, the following documents shall be filed with the court:
(a) A verified accounting signed by the petitioner itemizing all payments
or disbursements of money or anything of value made or agreed to be
made by or on behalf of the petitioner in connection with the adoption.
The accounting shall include the date and amount of each payment or
disbursement made, the name and address of each recipient, and the
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purpose of each payment or disbursement. Receipts shall be attached to
the accounting.
(b) A verified statement of the attorney for each petitioner itemizing the
services performed and any fee, compensation, or other thing of value
received by, or agreed to be paid to, the attorney for, or incidental to, the
adoption of the child. If the attorney is an adoption attorney representing a
party in a direct placement adoption, the verified statement shall contain
the following statements:
(i) The attorney meets the requirements for an adoption attorney
under section 22 of this chapter.
(ii) The attorney did not request or receive any compensation for
services described in section 54(2) of this chapter.
(c) A verified statement of the attorney for each parent of the adoptee
itemizing the services performed and any fee, compensation, or other thing
of value received by, or agreed to be paid to, the attorney for, or incidental
to, the adoption of the child. If the attorney is an adoption attorney
representing a party in a direct placement adoption, the verified statement
shall contain the following statements:
(i) The attorney meets the requirements for an adoption attorney
under section 22 of this chapter.
(ii) The attorney did not request or receive any compensation for
services described in section 54(2) of this chapter.
(d) A verified statement of the child placing agency or the department
itemizing the services performed and any fee, compensation, or other thing
of value received by, or agreed to be paid to, the child placing agency or
the department for, or incidental to, the adoption of the child, and
containing a statement that the child placing agency or the department did
not request or receive any compensation for services described in section
54(2) of this chapter.
(8) At least 21 days before the entry of the final order of adoption, the documents
described in subsection (7) shall be updated and filed with the court.
(9) To assure compliance with limitations imposed by this section and section 55
of this chapter and by section 14 of Act No. 116 of the Public Acts of 1973, being
section 722.124 of the Michigan Compiled Laws, the court may require sworn
testimony from persons who were involved in any way in informing, notifying,
exchanging information, identifying, locating, assisting, or in any other way
participating in the contracts or arrangements that, directly or indirectly, led to
placement of the individual for adoption.
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(10) The court shall approve or disapprove all fees and expenses. Acceptance or
retention of amounts in excess of those approved by the court constitutes a
violation of this section.
(11) A person who violates this section is guilty of a misdemeanor punishable by
imprisonment for not more than 90 days or a fine of not more than $100.00, or
both, for the first violation, and of a felony punishable by imprisonment for not
more than 4 years or a fine of not more than $2,000.00, or both, for each
subsequent violation. The court may enjoin from further violations any person
who violates this section.
At the outset, while “the plain language of MCL 710.54(10) requires court approval of
‘all fees and expenses,’ ” this is to be understood in context with the initial requirement under
MCL 710.54(7)(a) that only those fees for services that were done “in connection with the
adoption” need to be submitted. In re MJG, ___ Mich App at ___; slip op at 7-8. Simply put, “if
a fee is for a service that is not related to the adoption itself, then it does not fall under the scope
of the statute, and the circuit court has no authority to preclude the expense.” Id. at ___; slip op
at 8. Thus, the approval process of MCL 710.54 is only implicated if the fee at issue is for a
service that is connected with the adoption itself. Id. at ___; slip op at 8. Once it is determined
that a particular fee is subject to court approval, the statutory scheme is as follows:
MCL 710.54(1) merely prohibits charges and fees for its enumerated
items, unless they are approved by the court. Thus, absent any authorization from
a court, these expenses are squarely prohibited. The statute similarly prohibits
fees and charges for the activities in MCL 710.54(2), unless they are done for
particular purposes and performed by a “child placing agency,” [as defined in
MCL 710.22(k)]. MCL 710.54(3) lists the charges that an adoptive parent may
pay. Because such charges are authorized under subsection (3), the circuit court
must approve fees that fall under this subsection if they are for reasonable and
actual charges. MCL 710.54(3). [In re MFG, ___ Mich App at ___; slip op at 8
(footnote omitted).]
Importantly, the list of allowable expenses for adoptive parents under subsection (3) is exclusive.
Id. at ___; slip op at 8. Further, “MCL 710.54(4) and (5) list fees that an adoptive parent must
pay, and, thus, the circuit court is also required to approve fees that fall under these subsections”
as well. Id. at ___; slip op at 8.
In its briefs on appeal, American Adoptions initially claimed that it is entitled to its
administrative fees because, as a child placing agency, the fees are explicitly permitted under
MCL 710.54(3)(a). A “child placing agency” is defined as “a private organization licensed
under 1973 PA 116, MCL 722.111 to 722.128, to place children for adoption.” MCL 710.22(k).
However, there is no evidence to show that American Adoptions is licensed under 1973 PA 116.
Indeed, American Adoptions has conceded in its reply briefs on appeal that it does not qualify as
a child placing agency.
Instead, in its reply briefs, American Adoptions asserts that the administrative fees should
have been approved because they are not prohibited under MCL 710.54(1) or (2). But merely
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because a fee is not prohibited under MCL 710.54(1) or (2) does not mean that it is automatically
allowable. If the fee is properly before the court, it must also be authorized under some other
subsection.
American Adoptions fails to identify which subsection authorizes these administrative
fees. However, this failure is not fatal to its appeal because after reviewing the administrative
services, we do not believe that these services were specifically performed in connection with the
adoptions that occurred here. In other words, the administrative overhead services did not have a
relationship in fact with the particular adoptions, which means that the court was not authorized
to rule on the appropriateness of the fees. See In re MFG, ___ Mich App at ___; slip op at 8.
Here, the fee was for overhead expenses that were not specifically related to any particular
adoption. Indeed, the expenses were for items such as general contract labor, IT services,
payroll, health insurance, professional insurance, office supplies, and rent. Due to the nature of
what these overhead services entailed, we hold that the services were not connected, or related in
fact, to the two adoptions.9 As a result, the circuit court had no authority to deny these fees. On
remand, the circuit court is to approve the fees for these administrative fees.
IV. MARKETING FEE
American Adoptions also argues that the circuit court erred when it failed to approve the
$4,000 and $10,000 marketing fees in the two cases. While we held in the companion case, In re
MFG, ___ Mich App at ___; slip op at 10, 13, that these types of marketing fees fall outside the
scope of the statute and therefore a court has no authority to deny such fees, we hold that
American Adoptions lacks standing to raise this issue here.
To have standing, a party must have a legally protected interest that is in
jeopardy of being adversely affected. The party must have a special injury or
right, or substantial interest, that will be detrimentally affected in a manner
different from the citizenry at large . . . . A plaintiff must assert his own legal
rights and interests and cannot rest his claim to relief on the legal rights or
interests of third parties. [People v Sledge, 312 Mich App 516, 525; 879 NW2d
884 (2015) (quotation marks and citations omitted).]
The record is clear that the marketing fees were initially paid to a company called
American Family Media, LLC. This is undisputed as (1) petitioners’ verified accounting forms
show that the money was paid to American Family Media, (2) the refunded money (after the
court disapproved the fee) was issued to petitioners by American Family Media, (3) American
Adoptions in its fee explanation letter did not reference the marketing fee, (4) American
Adoptions acknowledged in its filings with this Court and the circuit court that “[t]he marketing
9
We agree with American Adoptions’s view that the mere fact that a petitioner lists fees on the
approval form does not mean that they all necessarily fall under the scope of the statute. It is
incumbent on the circuit court, when disapproving fees, to ensure that they fall under the scope
of the statute. Because the failure to properly disclose fees can be a criminal offense, MCL
710.54(11), petitioners may be inclined to list more than is actually required under the statute.
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fee is from a separate company, American Family Media, LLC,” and (5) American Adoptions
allows adoptive parents to utilize the media company of their choice. Because there is no
evidence of any connection between the marketing fees at issue and American Adoptions, we
hold that American Adoptions lacks standing to challenge the denial of the marketing fees. No
decision we make on this issue can affect American Adoptions. The only parties who would
have standing to challenge the denial of the marketing fees are petitioners and American Family
Media. This is distinguishable from the facts in In re MJG, where the appellant firm was the
recipient of the marketing fee and had an identifiable interest in the matter. In re MJG, ___ Mich
App at ___; slip op at 3, 10. Accordingly, because American Adoptions lacks standing, we
decline to address the circuit court’s denial of the marketing fees.10
Reversed in part and remanded for proceedings consistent with this opinion. We do not
retain jurisdiction. No taxable costs, as no party on appeal prevailed in full.
/s/ Henry William Saad
/s/ Patrick M. Meter
/s/ Christopher M. Murray
10
Likewise, American Adoptions is precluded from raising any First Amendment issues related
to the marketing fee.
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