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Moriarity v. Small World Adoption Foundation of Missouri

January 11, 2008

GERALD MORIARITY AND CYNTHIA MORIARITY, PLAINTIFFS,
v.
SMALL WORLD ADOPTION FOUNDATION OF MISSOURI, INC., SMALL WORLD ADOPTION FOUNDATION, INC., VIACHESLAV PLATONOV, N M.D., AND YELENA KOGAN, DEFENDANTS.



The opinion of the court was delivered by: Hon. Norman A. Mordue, Chief U.S. District Judge

MEMORANDUM-DECISION AND ORDER

BACKGROUND

Defendants Small World Adoption Foundation of Missouri, Inc. and its predecessor, Small World Adoption Foundation, Inc. (collectively, "Small World") assist families in the United States to adopt children from Russia, Belarus, and Ukraine. At all pertinent times, defendants Drs. Viacheslav Platonov and Yelena Kogan were Directors of Small World.

On October 30, 2000, plaintiffs signed a 17-page agreement ("Contract") whereby Small World agreed to assist plaintiffs to adopt a baby boy.*fn1 In April 2001 Small World sent plaintiffs a two-page letter, a videotape, and a two-page health form concerning a baby boy in a Ukraine orphanage available for adoption. Plaintiffs responded that they wished to adopt him and signed a "Child Acceptance Form" on May 11, 2001. Plaintiffs traveled to Ukraine and adopted the boy on August 1, 2001, pursuant to a judgment from a Ukraine court. The adopted child, now named Lee Moriarty, resides with plaintiffs in the United States.

Subsequent to the adoption, Lee was diagnosed in the United States with severe health problems, including cerebral palsy apparently stemming from events related to his birth. Medical records from Ukraine regarding his birth and early infancy include a diagnosis of hypoxic-ischemic damage of the central nervous system. It is undisputed that these records were not provided to plaintiffs in the United States prior to the adoption. The parties dispute whether and when Small World had access to the records and whether and when the information was provided to plaintiffs.

In the complaint, plaintiffs assert the following causes of action: breach of contract; fraudulent misrepresentation; wrongful adoption; negligent misrepresentation; negligence; and deceptive business practices in violation of section 349 of New York General Business Law. They seek to recover the costs of Lee's medical care, both past and future.

Defendants move (Dkt. No. 43) for summary judgment dismissing the action. For the reasons set forth below, the motion is denied.

DISCUSSION

Standard on Summary Judgment

Summary judgment is appropriate "where there exists no genuine issue of material fact and, based on the undisputed facts, the moving party is entitled to judgment as a matter of law." Beth Israel Med. Ctr. v. Horizon Blue Cross and Blue Shield of N.J., Inc., 448 F.3d 573, 579 (2d Cir. 2006) (internal quotation marks omitted). A dispute about a genuine issue of material fact exists if the evidence is such that "a reasonable [factfinder] could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In determining whether there is a genuine issue of material fact, a court must resolve all ambiguities, and draw all inferences, against the movant. See United States v. Diebold, Inc., 369 U.S. 654, 655 (1962). Fraudulent Misrepresentation and Wrongful Adoption Causes of Action The elements of a fraudulent misrepresentation claim under New York law are well established. To make out such a claim, a plaintiff must show: (1) defendant made a representation as to a material fact; (2) such representation was false; (3) defendant intended to deceive plaintiff; (4) plaintiff believed and justifiably relied upon the statement and was induced by it to engage in a certain course of conduct; and (5) as a result of such reliance plaintiff sustained pecuniary loss. See Channel Master Corp. v. Aluminum Ltd. Sales, Inc., 4 N.Y.2d 403, 406-07 (1958).

New York has extended common-law fraud principles to the adoption context. See Ross v. Louise Wise Servs. Inc., 8 N.Y.3d 478, 488 (2007); Juman v. Louise Wise Servs., 620 N.Y.S.2d 371, 372 (1st Dep't 1995). The elements of a wrongful adoption claim are: (1) defendant made a representation as to a material fact; (2) such representation was false; (3) defendant intended to deceive plaintiff; (4) plaintiff believed and justifiably relied upon the statement and was induced by it to adopt the child; and (5) as a result of such reliance plaintiff sustained pecuniary loss. See Ingrao v. County of Albany, 2006 WL 2827856, *13 (N.D.N.Y. Oct. 2, 2006); Ross, 8 N.Y.3d at 488.

Defendants aver that Small World made no representations at any time regarding Lee's medical condition; rather, it merely forwarded to plaintiffs the videotape received from the Ukrainian orphanage and the two-page health form containing information provided by the orphanage. Defendants further assert that as a matter of law there was no deception, inasmuch as Small World neither possessed nor had access to any additional health information. Indeed, according to defendants, Ukranian law prohibits access to a prospective adoptee's medical records.

Defendants also argue that plaintiffs could not have reasonably relied on any representations by Small World in deciding to adopt Lee. Defendants point to disclaimers and warnings in the Contract signed by plaintiffs, including plaintiffs' acknowledgment that "in spite of information to the contrary, the child, when received, may have an undiagnosed physical or mental condition, or may develop such condition at a later date." Also, defendants state, after arriving at the orphanage in Ukraine, plaintiffs had complete access to Lee's medical file, spent several days with him, and had opportunities to ask questions about him to the orphanage staff; thus, defendants argue, plaintiffs did not rely on defendants to ascertain Lee's medical condition.

Plaintiffs respond that Small World materially misrepresented Lee's medical condition and/or concealed the fact that it had little or no ...


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