Court Opinion

ID: 2966472
Source: CourtListenerOpinion
Date Created: 2015-09-22 00:39:15.439654+00
Date Added: 2024-06-11T15:27:13.576480
License: Public Domain

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

JEAN D'ACCARDI on behalf of herself
and as Guardian Ad Litem for
VANESSA VIGIL and JOAQUIN VIGIL,
Plaintiffs-Appellants,
                                                                     No. 95-2988
v.

SHIRLEY S. CHATER, COMMISSIONER OF
SOCIAL SECURITY,
Defendant-Appellee.

Appeal from the United States District Court
for the Eastern District of North Carolina, at Greenville.
James C. Fox, Chief District Judge.
(CA-94-135-4-F2)

Argued: June 7, 1996

Decided: September 16, 1996

Before HALL and ERVIN, Circuit Judges, and JACKSON,
United States District Judge for the Eastern District of Virginia,
sitting by designation.

_________________________________________________________________

Reversed and remanded by published opinion. Judge Ervin wrote the
opinion, in which Judge Hall and Judge Jackson joined.

_________________________________________________________________

COUNSEL

ARGUED: Lesley Fogleman Moxley, PAMLICO SOUND LEGAL
SERVICES, New Bern, North Carolina, for Appellants. Barbara
Dickerson Kocher, Assistant United States Attorney, Raleigh, North
Carolina, for Appellee. ON BRIEF: Janice McKenzie Cole, United
States Attorney, Raleigh, North Carolina, for Appellee.

_________________________________________________________________

OPINION

ERVIN, Circuit Judge:

Jean D'Accardi appeals on behalf of her two children from the
denial of their application for Social Security Survivor's Insurance
benefits. She contends that the Commissioner of Social Security erred
in deciding that her children were not equitably adopted by her
deceased husband, based on evidence that he had decided to discon-
tinue adoption proceedings before his death. We agree. Where there
exists a valid contract to adopt, but legal adoption does not actually
occur, New Jersey courts will enforce the contract in equity under cer-
tain circumstances for the benefit of the adoptive child. Ordinary con-
tract principles teach that a promisor's subsequent unilateral decision
to rescind does not affect the existence of an enforceable agreement.
Accordingly, we reverse and remand with instructions.

I.

Robert and Jean D'Accardi were both divorcees when they met in
1986. After about a year, Jean and her two children--Vanessa and
Joaquin Vigil--began spending long weekends at Robert D'Accardi's
home. In January 1988, Jean, Vanessa and Joaquin moved into Rob-
ert's home. At Thanksgiving 1989, Robert and Jean became engaged,
and in December 1989, they began to discuss Robert adopting
Vanessa and Joaquin.

The couple married on May 12, 1990. At the time of the wedding,
Robert had been diagnosed with cancer, but the disease was in remis-
sion. In the summer of 1990, Robert filed a complaint for adoption
of Vanessa and Joaquin, aided by Gregory Keller, an associate with
the law firm of Stein, Bliablias, McGuire, Pantages and Gigi.

                    2
During the fall of 1990, Robert's health began to fail and he was
hospitalized on several occasions. As a result, the preliminary adop-
tion hearing set for September 21, 1990, was delayed until January 4,
1991.1 Robert's health continued to decline, and he went to stay with
his parents to facilitate his nursing. He later reentered the hospital.
Due to his hospitalization, the hearing scheduled for January 4, 1991
was again delayed. On January 27, 1991, Robert died of cerebral
edema, brain metastases, and cancer of the kidneys.

On February 19, 1991, Jean applied for Social Security Survivor's
Insurance benefits and, on behalf of her two children, for Child's
Insurance benefits. Benefits were initially awarded. However, on May
27, 1991, the Social Security Administration (SSA) revoked the bene-
fits on the ground that Jean and Robert had not been married for nine
months before Robert died.2 Jean moved for reconsideration, and the
SSA again found that she was not entitled to benefits. Jean then
requested an administrative hearing, which was held on June 11,
1992.

The ALJ joined a third party, Renee D'Accardi (Robert's child
from a previous marriage). At the hearing, Vanessa, 7, and Joaquin,
12, testified that they called Robert "Daddy," did chores for him, and
were disciplined by him. Joaquin testified that Robert had discussed
adoption with him as early as Christmas 1989. Both children testified
that they wanted Robert to be their father. Robert was the only father
Vanessa had known, as she had not seen her natural father since the
age of six months. The ALJ concluded that, because Jean met the
nine-month marriage duration requirements of the Social Security
_________________________________________________________________
1 Despite delays in the proceedings, the adoption process apparently
continued. On December 18, 1990, Attorney Keller sent the D'Accardis
an interim bill for adoption-related services rendered through November
28, 1990.
2 An individual may be entitled to widow's or mother's benefits on the
deceased wage earner's record if she was married to the wage earner for
at least nine months preceding his death. 20 C.F.R.§§ 404.335(a)(1),
404.339. The same durational requirement applies to a stepchild: if he or
she was the stepchild of the wage earner for at least nine months immedi-
ately before the death, he or she may qualify for child's insurance bene-
fits. 20 C.F.R. § 404.356.

                    3
Act, she was eligible for mother's insurance benefits and her children
were entitled to stepchild's benefits. In addition, the ALJ concluded
that, because adoption would have occurred but for Robert
D'Accardi's death, Vanessa and Joaquin were also entitled to benefits
as equitably adopted children.

After the hearing, Renee D'Accardi submitted a statement by attor-
ney Dino Bliablias--also with the Stein, Bliablias firm--that in late
1990, Robert had stated that he wished to discontinue the adoption
process "for personal reasons" and had asked Bliablias to inform Mrs.
D'Accardi. Bliablias never did so. In response, Jean D'Accardi certi-
fied that, although she saw her husband nearly every day until his
death, and saw Mr. Bliablias and other firm attorneys several times
at Robert's parents' home and at the hospital before Robert's death,
no one indicated to her that Robert had had a change of heart. The
adoption process continued until Attorney Keller informed the surro-
gate court of Robert's death, and requested that the action be dis-
missed for that reason.

On July 21, 1994, the Appeals Council reversed the findings of the
ALJ. The Council found that the D'Accardis had not been married for
the requisite nine months. Thus, it found, Jean was not entitled to
mother's benefits and her children were not entitled to benefits as
stepchildren. The Council further found that, because Robert
D'Accardi had indicated an intention to discontinue adoption pro-
ceedings, any agreement to adopt expired, and Vanessa and Joaquin
therefore were not eligible for benefits as equitably adopted children.
On September 20, 1994, Jean filed a complaint in the Eastern District
of North Carolina seeking judicial review of the Commissioner's
decision under Title II of the Social Security Act, 42 U.S.C. § 402 et
seq.3

In the district court, a magistrate judge found that the Commission-
er's finding that Jean and Robert D'Accardi had not been married for
nine months was based upon substantial and undisputed evidence, and
that it was in accordance with the SSA's interpretation of its own reg-
ulations and was therefore entitled to deference. The magistrate judge
_________________________________________________________________
3 On January 22, 1995, Renee D'Accardi stipulated that she no longer
had an interest in the matter, and was dismissed as a defendant.

                    4
also found that the Appeals Council properly denied the child's insur-
ance benefits as stepchildren based on the same nine-month period.
In addition, the judge upheld as based on substantial evidence the
Appeals Council's finding that Robert wished to discontinue adoption
proceedings, and found that the children were therefore not entitled
to benefits as equitably adopted children. District Judge Fox adopted
the magistrate judge's findings and conclusions, and affirmed the
final decision of the Secretary of Health and Human Services.

II.

Jean D'Accardi challenges the Commissioner's decision4 that
Vanessa and Joaquin Vigil are not entitled to surviving child's insur-
ance benefits as the equitably adopted children of the deceased wage
earner. In reviewing the final benefits decision of the Commissioner,
we apply the same standards as did the district court to determine
whether the decision was based upon substantial evidence and correct
conclusions of law. 42 U.S.C. § 405(g); Hays v. Sullivan, 907 F.2d
1453, 1456 (4th Cir. 1990).

An applicant for child's benefits must show, among other things,
that he or she is the "child" of the insured worker. 20 CFR § 404.350-
369. "Child" includes a natural child, a grandchild, a legally adopted
child, or an equitably adopted child. Id. at§ 404.354(a). The regula-
tions define an equitably adopted child as one whom the insured
agreed to adopt, but whose legal adoption did not actually occur. Id.
at § 404.359. The regulations specify:

         The agreement to adopt [the child] must be one that would
         be recognized under State law so that [the child] would be
         able to inherit a child's share of the insured's personal prop-
         erty if he or she were to die without leaving a will. The
         agreement must be in whatever form, and [the child] must
         meet whatever requirements for performance under the
         agreement, that State law directs. If [the child] appl[ies] for
         child's benefits after the insured's death, the law of the State
_________________________________________________________________
4 Jean does not appeal from the decision denying benefits to her person-
ally.

                    5
          where the insured had his or her permanent home at the time
          of his or her death will be followed.

Id. Thus, if under state law, Vanessa and Joaquin would have been
entitled to share in Robert D'Accardi's intestate estate, they may be
eligible for child's insurance benefits.

There is no dispute that the law of the state of New Jersey applies
to this case, as Robert D'Accardi was a New Jersey resident at the
time of his death. New Jersey recognizes the doctrine of equitable
adoption as a theory of inheritance under intestacy:

          It is now firmly established that an oral agreement to adopt,
          where there has been a full and faithful performance on the
          part of the adoptive child, but which was never consum-
          mated by formal adoption proceedings during the life of the
          adoptive parent, will, upon the death of the latter, and when
          equity and justice so requires, be enforced to the extent of
          decreeing that such child occupies in equity the status of an
          adopted child, entitled to the same right of inheritance from
          so much of his foster parent's estate that remains undisposed
          of by will or otherwise, as he would have been had he been
          a natural born child.

Burdick v. Grimshaw, 168 A. 186, 188 (N.J. Ch. 1933); see also
Ashman v. Madigan, 122 A.2d 382, 383 (N.J. Super. Ct. Ch. Div.
1956) (finding that statements and conduct of decedent demonstrated
the existence of an enforceable agreement to adopt); Hendershot v.
Hendershot, 37 A.2d 770, 772 (N.J. Ch. 1944) (ruling that testator
made binding oral agreement to adopt, which gave complainant the
status of a legally adopted child for inheritance purposes).5
_________________________________________________________________
5 We are at a loss to explain the assertion by the New Jersey Superior
Court that "New Jersey has not recognized `equitable adoption' in any
case that research has disclosed." In re: the Adoption of a Child by
N.E.Y., 630 A.2d 835, 839 (N.J. Super. 1993) (ruling that the court had
no authority under statute or case law to use the theory of equitable adop-
tion to finalize a decree of legal adoption for purposes of favorable inher-
itance tax treatment and Social Security benefits).

                    6
Proof of the existence of an agreement to adopt and accompanying
consideration is sufficient to support a finding of equitable adoption.
See Hendershot, 37 A.2d at 772. The acts, conduct and admissions of
an adopting party may be used to prove the existence of an adoption
agreement. See Ashman, 122 A.2d at 383. Written agreements are sat-
isfactory evidence of an adoption agreement. Burdick, 168 A. at 190.
In addition to the complaint for adoption, the plaintiffs presented evi-
dence that the children called Robert "Daddy"; that Robert assigned
chores to and disciplined the children; that they went on family vaca-
tions together; that Robert told the children of his desire to adopt them
to show them how much he loved them; and other related testimony.
The plaintiffs add that sufficient legal consideration for the agreement
to adopt was present in the children's love and affection, their perfor-
mance of duties, and their companionship and obedience. See
Hendershot, 37 A.2d at 772-73.

The Commissioner concedes that the plaintiffs' testimony was
"consistent and convincing" and that it tended to show that the plain-
tiffs believed that there existed an agreement to adopt. However, the
appellee points to certified statements by Robert D'Accardi's attor-
neys that, before his death, Robert decided to discontinue the adoption
process. She argues that such statements cast doubt on the continued
existence of an agreement to adopt. The Appeals Council agreed,
finding that "[s]ince the record shows that, prior to his death, the
wage earner indicated that he wished to discontinue the adoption of
Vanessa and Joaquin, any expressed contract by the wage earner to
adopt them expired prior to his death."

Jean D'Accardi counters that Robert's intention at the time of his
death to discontinue the adoption proceedings did not nullify an exist-
ing enforceable agreement to adopt. Jean relies on Hendershot v.
Hendershot, in which the plaintiff successfully challenged his exclu-
sion from his stepfather's will based on the theory of equitable adop-
tion. The court found that the deceased had promised to adopt the
complainant and to include him in his will. A stepfather's subsequent
change of heart has no effect on an earlier agreement to adopt, the
court held, once the child has performed in whole or in part. Id. at
772. Accordingly, Jean D'Accardi argues, because her children per-
formed their part of the contract, Robert's alleged intent not to per-
form does not nullify the agreement.

                    7
There is little question that Jean D'Accardi presented "clear, cogent
and convincing" evidence "leaving no doubt with respect to [the oral
agreement's] actual making and existence." Burdick, 168 A. at 189.
The question for this court is whether, under New Jersey law, a death-
bed unilateral decision to discontinue adoption proceedings nullifies
an earlier agreement for the purpose of determining the child's right
to inherit from the adoptive parent's intestate estate. Burdick,
Hendershot, and Ashman reveal that, when there exists a valid and
binding contract to adopt, supported by consideration, New Jersey
courts will enforce the contract in equity to allow a child to occupy
the status of a legally adopted child for certain purposes. The Com-
missioner cites no case law suggesting that ordinary contract princi-
ples do not apply in such a situation. We reject, therefore, her unusual
assertion that the changed intent of a promisor nullifies the existence
of a valid contract, and find that she erred as a matter of law in relying
upon evidence of Robert D'Accardi's desire to discontinue adoption
proceedings. Accordingly, we need not address Jean D'Accardi's con-
tention that the Commissioner's decision was not supported by sub-
stantial evidence.

III.

We reverse the decision of the district court and remand the case
to the district court for further remand to the Appeals Council, with
directions to award benefits.

REVERSED AND REMANDED WITH INSTRUCTIONS

                     8