Court Opinion

ID: 5697569
Source: CourtListenerOpinion
Date Created: 2022-01-12 15:35:54.996415+00
Date Added: 2024-06-11T08:40:16.224036
License: Public Domain

Tom, J.P., and Saxe, J., concur in a separate memorandum by Tom, J.P., as follows:
In this action for wrongful adoption, plaintiffs allege that they were induced to adopt their infant son, Anthony, as a result of defendant’s fraudulent concealment of his family history of psychiatric illness. Defendant does not deny its failure to disclose the psychiatric history of the biological family, but admits that at the time of the 1962 adoption, it routinely withheld all such information from prospective adoptive parents. What divides this Court is whether defendant’s conceded pattern of nondisclosure will support a claim for punitive damages predicated upon acts constituting “such wanton dishonesty as to imply a criminal indifference to civil obligations” (Walker v Sheldon, 10 NY2d 401, 405 [1961]), in this instance, the obligations to provide information pertinent to the decision to adopt and to deal honestly and fairly with the adoptive family (see Juman v Louise Wise Servs., 211 AD2d 446, 447-448 [1995]).
This controversy raises the issue of the degree of proof that a plaintiff is required to supply in opposition to a motion seeking summary dismissal in order to avoid the striking of a claim for punitive damages. The dissenter, ignoring evidence that, even in 1962, the medical profession recognized a significant hereditary component to psychiatric illness, accepts without question defendant’s protestation that the social work profession remained ignorant of knowledge possessed by the larger medical community and, accepting such ignorance as the standard by which to judge defendant’s conduct, concludes that, as a matter of law, the record does not support plaintiffs’ claim for exemplary damages. In the context of a motion seeking dismissal of the complaint, where factual issues warrant trial of the underlying cause of action for which punitive damages are claimed, we discern no reason to summarily resolve contested factual issues merely because they concern the nature of the damages sought as well as the merits of the underlying action.
This matter is before us on defendant’s appeal from an order denying, in part, its motion for summary judgment dismissing the complaint (CFLR 3211 [a] [7]; 3212) to the extent of sustaining plaintiffs’ claim for punitive damages and on plaintiffs’ cross-appeal from the dismissal, as time-barred, of their second *284cause of action asserting negligence and breach of fiduciary duty and their third cause of action asserting intentional infliction of emotional distress. Affording the pleadings a liberal construction, accepting their allegations as true and providing plaintiffs with “every possible favorable inference” (Leon v Martinez, 84 NY2d 83, 87 [1994]), plaintiffs have demonstrated the existence of facts which, if proven at trial, establish a pattern of conduct, aimed at the public generally, that evinces a wanton indifference to the right of prospective adoptive parents to make an informed decision to proceed with adoption.
The pertinent facts can be succinctly stated. Plaintiffs adopted their son, Anthony Ross, through defendant adoption agency in 1962. While they were informed of many positive characteristics of the biological parents, they were not informed, either at that time or for many years thereafter, that both suffered from mental illness and that their families had a history of schizophrenia. The mother was under the care of a psychiatrist during her pregnancy and was described as “a seriously disturbed young woman who related minimally.” The father was diagnosed as paranoid schizophrenic and portrayed as “a seriously disturbed young man,” who had married Anthony’s mother “purely for her money.” Anthony’s maternal grandfather also suffered from schizophrenia and was hospitalized for a year and a half while under the delusion that people were trying to poison him. Anthony’s biological parents divorced about a year after giving him up for adoption, and his mother committed suicide about 10 years later.
Anthony began to show signs of emotional disturbance as a young child and, by the time he was four, plaintiffs had sought professional help. In 1970, when the nine-year-old boy was exhibiting hyperactivity, poor impulse control and hostility, plaintiffs contacted defendant for assistance. While it is clear that defendant’s employees recognized the distinct possibility that schizophrenia might be to blame for Anthony’s difficulties, they did not share this insight with plaintiffs. During the following year, the family periodically saw defendant’s staff psychiatrist, Dr. Anne-Marie Weil.
In 1973, Barbara Ross requested that defendant send “a summary of Tony’s birth history, background and foster home experience” to his psychiatrist. The resulting summary made no mention of the extensive family history of mental illness. Anthony continued to exhibit little impulse control, striking Ms. Ross, throwing things and using foul language. In 1978, responding to the threat that Anthony’s aberrant and aggressive behavior posed to her physical safety, Ms. Ross moved out *285of the family home, taking the couple’s adopted daughter with her. Disagreement about how to deal with Anthony’s erratic and hostile behavior, and the emotional and financial toll on the couple resulted in the deterioration of the marriage, culminating in a 1979 divorce.
In 1982, the now-adult Anthony arrived unannounced at Dr. Weil’s office. The doctor reported that “she was very concerned and frightened by Tony’s appearance and demeanor. She felt he was a paranoid schizophrenic, capable of violence.” In 1983, the Legislature enacted Social Services Law § 373-a (L 1983, ch 326, § 1), requiring the disclosure of an adopted child’s medical history (see Juman v Louise Wise Servs., 211 AD2d at 447-448). The next year, Anthony requested an appointment to obtain “background and medical information.” At the ensuing meeting in February 1984, he was told nothing about his birth family’s psychiatric history.
Anthony was diagnosed as a paranoid schizophrenic in 1995 after an incident in which his father awoke in bed to find Anthony on top of him, wielding a large flashlight in an apparent attempt to injure him. In 1999, Mr. Ross developed clinical depression as a result of the ongoing difficulties with his son. Mr. Ross was ultimately hospitalized and administered electroconvulsive therapy that resulted in some permanent memory loss. He was obliged to give up his career in advertising, and he has been unable to find other work. Barbara Ross also suffered from frequent bouts of depression following the couple’s divorce and has been required to seek professional counseling.
It was not until April 6, 1999 that defendant, responding to a request from Arthur Ross, disclosed the detailed medical information contained in its files, which included notes summarizing 13 interviews with the mother and 14 with the father as well as the results of psychiatric consultations with both parents and the psychiatric history for both sides of Anthony’s biological family. This lawsuit promptly followed stating causes of action for (1) fraud and wrongful adoption, (2) negligence and breach of fiduciary duty and (3) intentional infliction of emotional distress.
Defendant moved for summary judgment dismissing the complaint or, alternatively, for partial summary judgment (1) dismissing the second and third causes of action as time-barred; (2) dismissing plaintiffs’ claim for emotional distress and consequential loss of business and other income and limiting damages to extraordinary out-of-pocket expenses incurred in raising their adopted child to age 21; and (3) striking plaintiffs’ demand for punitive damages, as a matter of law, on the ground *286that the facts do not warrant their award. Supreme Court granted defendant’s motion for summary judgment to the extent of dismissing the second and third causes of action as time-barred and limiting plaintiffs’ compensatory damages. The court denied that part of defendant’s motion as sought to dismiss the claim for punitive damages.
On appeal, defendant argues that its concealment of Anthony’s biological family history was reasonable, and that its “personnel provided the information they believed to be relevant, in accordance with accepted practice at that time.” Plaintiffs contend that Supreme Court erred in failing to apply the doctrine of equitable estoppel to bar assertion of the statute of limitations in defense to their negligence and emotional distress causes of action.
Defendant has conceded engaging in a course of conduct, extending over a period of years, during which it concealed information material to the decision to adopt. We conclude that questions of fact exist concerning the extent to which family history was regarded as an etiological factor in the development of mental illness, particularly schizophrenia, at the time of the subject adoption. As to the cross appeal, there is no basis to apply equitable estoppel to preclude assertion of the time bar. In any event, plaintiffs’ second cause of action for negligence is redundant, and the recovery for emotional injury sought in the third cause of action is precluded as a matter of policy. Therefore, we affirm the order in all respects.
The wrong alleged in the complaint is that defendant’s concealment of Anthony’s family history of schizophrenia fraudulently induced plaintiffs to adopt the child and further caused them to refrain from seeking early aggressive intervention to treat the pathology underlying his emotional instability. Although defendant has not appealed from this aspect of the motion court’s order, we note that an action for fraud is timely if brought within two years of the discovery of the misrepresentation and that the complaint states a viable basis for recovery on that ground. Therefore, defendant’s motion for summary judgment dismissing the complaint was properly denied (see Moreau v Archdiocese ofN.Y., 261 AD2d 456, 457 [1999]).
Plaintiffs’ second cause of action asserts that defendant negligently failed to “disclose all facts bearing on their decision to adopt” Anthony. This merely restates their first cause of action, which alleges that “plaintiffs would not have adopted Anthony . . . had they known the true facts prior to the adoption or soon thereafter.” The contention that defendant occupied a position “of special trust and confidence,” advanced *287only in the second cause of action, adds nothing to plaintiffs’ claim. Whether or not the relationship between the parties is portrayed as fiduciary and whether the essence of the wrong alleged is deemed to be a breach of the adoption agreement or a breach of defendant’s duty of care, it remains that this is an action for wrongful adoption, and recovery is circumscribed accordingly (see Becker v Schwartz, 46 NY2d 401, 413 [1978]).
No recovery is available on the basis of plaintiffs’ third cause of action for intentional infliction of emotional distress. It is settled that in a wrongful adoption case, compensatory damages are “limited to damages for pecuniary loss directly attributable to the alleged fraud . . . Damages for emotional distress or for its somatic sequelae ... do not fall within this description” (Juman v Louise Wise Servs., 3 AD3d 309, 309-310 [2004]).
In any event, plaintiffs’ second cause of action sounding in negligence and breach of fiduciary duty is untimely (CPLR 214; Siler v Lutheran Social Servs. of Metro. N.Y., 10 AD3d 646, 648 [2004]), as is the third cause of action asserting an intentional tort (CPLR 215; Peters v Citibank, 253 AD2d 803 [1998]). The applicable limitations periods began to run at the time of Anthony’s adoption in 1962 and had long expired at the time this action was commenced in 1999.
Plaintiffs’ argument that defendant should be estopped to assert the statute of limitations as a bar to their second and third causes of action is unavailing. Application of this “extraordinary remedy” (East Midtown Plaza Hous. Co. v City of New York, 218 AD2d 628, 628 [1995]) requires affirmative action such as fraud, misrepresentations or deception by a defendant to conceal its wrongdoing until the applicable statutory limitations period has expired (Simcuski v Saeli, 44 NY2d 442, 448-449 [1978]). Plaintiffs’ assertion of equitable estoppel is predicated on defendant’s continuing failure to disclose the psychiatric history of Anthony’s biological family. However, the statute of limitations for negligence had already expired by the time plaintiffs made contact with defendant in 1970, some nine years after the adoption. Defendant simply had no opportunity to undertake affirmative action to further conceal its wrongdoing within the pertinent statutory limitations period. Moreover, the concealment of Anthony’s family history is the very wrong defendant is alleged to have committed and does not serve as a predicate for estoppel. At most, defendant engaged in mere nondisclosure during this time, for which estoppel to assert the statute of limitations is not warranted (see Simcuski, 44 NY2d at 452; Kaufman v Cohen, 307 AD2d 113, 122 [2003] [fraud]). As this Court noted in Zoe G. v Frederick F.G. (208 AD2d 675, 675-676 [1994]), *288“application of the doctrine of equitable estoppel is triggered by some conduct on the part of the defendant after the initial wrongdoing; mere silence or failure to disclose the wrongdoing is insufficient.”
The defense to this action is remarkable for its concessions. Defendant does not deny that it deliberately concealed the psychiatric history of Anthony’s biological family, both prior to the 1962 adoption and for nearly the remainder of the century. In seeking to strike the claim for punitive damages, defendant acknowledges that, even in 1962, there was a belief that schizophrenia had a genetic component; however it argues that it was “accepted practice” to conceal family psychiatric history because that view had not gained “general acceptance” among social workers. In support of this contention, defendant offered the affidavit of a social worker attesting that it was the practice, into the early 1980s, “not to disclose information that could be viewed as negative and which was not believed to be hereditary for fear that it would influence the family adversely on how they would nurture the adopted child.” The affidavit concludes that “defendant acted in conformity with such customs, standards and practice in not disclosing the psychiatric history of Anthony Ross’ biological parents.” In opposition, plaintiffs presented the affidavit of a research psychiatrist, who stated that, as of 1961, “it had been undisputed for over 50 years .at that time that schizophrenia was an inherited disease.” The psychiatrist further noted that the likelihood of developing schizophrenia for a child who inherits genes from two affected parents is “estimated from many studies to be an astounding 46%.”
Two questions immediately arise. First, even accepting defendant’s claim of uncertainty among psychiatric professionals concerning the relevance of family history to the onset of psychiatric illness, why should its social worker be deemed competent to decide that family history is irrelevant to the possible onset of schizophrenia in a child? Indeed, the knowledge possessed by “adoption professionals” or by the social work profession in general is, on its face, an inferior standard by which to assess whether defendant’s concealment of information was tortious as opposed to a standard consisting of the knowledge possessed by the apparently better-informed psychiatric profession. Second, if defendant truly regarded family history as being immaterial to the development of mental illness, including schizophrenia, why didn’t defendant merely disclose such information to prospective adoptive parents and let them reach their own conclusions regarding its relevance to their decision to adopt? The act of concealment suggests a perception in *289the mind of the actor that concealment is necessary. Defendant’s persistence in concealing the psychiatric history of Anthony’s family for some four decades only reinforces the notion that defendant regarded such concealment as essential to the protection of its own parochial interests.
The elements of a cause of action for fraud are a misrepresentation, that is material, known to be false and made with the intent of inducing reliance, upon which the victim actually relies and, as a result of which, sustains damages (see National Union Fire Ins. Co. of Pittsburgh, Pa. v Christopher Assoc., 257 AD2d 1, 9 [1999]). The only element of fraud contested by defendant is whether its misrepresentation was known to be material at the time it was made. Defendant denies any inkling, as of 1962, that concealing an adoptee’s family psychiatric history could result in injury to the child or his adoptive parents. Defendant asks this Court to accept, on the basis of a preliminary record, what it knew, or did not know, in 1962 based on a single affidavit from a social worker that is flatly contradicted by the affidavit of a research psychiatrist. The extent of defendant’s awareness of the state of psychiatric knowledge at that time presents a question of fact. It is the province of the trier of fact to resolve whether defendant’s concealment was innocent, negligent or reckless in deciding whether defendant is liable and, if so, whether its misconduct is sufficiently egregious to warrant the award of punitive damages.
Defendant’s suggestion that it concealed the family psychiatric history of adoptees solely out of a desire to promote familial bonding is unconvincing. Societal appreciation that family history plays a role in the emergence of psychiatric infirmity is as ancient as the taboo against incest. It doubtless occurred to defendant that disclosure of an extensive family history of mental illness would be likely to deter prospective parents from proceeding with an adoption, thereby depriving defendant of its placement fee. Thus, a jury might conclude that defendant placed its pecuniary interests ahead of its obligation to provide prospective adoptive parents with information necessary to make an informed decision as to whether to proceed.
Defendant expresses the concern that if plaintiffs are permitted to pursue their claim for punitive damages, “it is conceivable that jurors, unconvinced by plaintiffs’ claims for compensatory damages but acting out of a misplaced feeling of sympathy, could award such damages even if undeserved.” This concern is unwarranted. “Whether to award punitive damages in a particular case, as well as the amount of such damages, if any, are primarily questions which reside in the sound discretion of the *290original trier of the facts” (Nardelli v Stamberg, 44 NY2d 500, 503 [1978]). However, as the Court of Appeals has observed, “since an award of punitive damages—in a case where they may properly be allowed—rests in the ‘sound discretion’ of the jury (Kujek v Goldman, 150 N.Y. [176], at p. 180), it is subject to court review” (Walker, 10 NY2d at 405 n 3 [upholding denial of motion to strike demand for punitive damages as “irrelevant and prejudicial” {id. at 403) pursuant to Rules of Civil Practice, rule 103 (now CPLR 3024 [b])]). In the case at bar, if the trial court decides that the matter of punitive damages is appropriate for submission to a jury and if the trier of fact decides that such damages are warranted by the evidence, the propriety of the award will be ripe for appellate review {see Reinah Dev. Corp. v Kaaterskill Hotel Corp., 59 NY2d 482 [1983]; Tanbro Fabrics Corp. v Deering Milliken, Inc., 39 NY2d 632 [1976]).
The cases relied upon by defendant do not preclude the recovery of exemplary damages in this matter. In Juman v Louise Wise Servs. (3 AD3d 309, 310 [2004], supra), this Court held that defendant’s disregard of its disclosure obligations under Social Services Law § 373-a, enacted in 1983, was “irrelevant to plaintiffs’ wrongful adoption claim” concerning a 1966 adoption and, thus, could not serve as a basis for the award of punitive damages. Likewise, in this action, the relevant factual inquiry concerns defendant’s conduct surrounding the 1962 adoption, not its subsequent action or inaction over the ensuing decades. The material allegation of the complaint is that defendant deliberately concealed pertinent facts in order to induce plaintiffs to adopt Anthony. Plaintiffs assert that they were prompted to investigate the circumstances of the adoption only after learning of a similar case from a 1999 New York Times article, in which defendant was reported to have engaged in the same deceptive conduct. Indeed, defendant does not deny that it routinely withheld such information from prospective adoptive parents, conceding that this was its standard practice at the time. Plaintiffs further allege that defendant’s fraudulent concealment hindered the prompt diagnosis and treatment of Anthony’s psychiatric condition, resulting in pecuniary loss and the exacerbation of Anthony’s suffering. The consequences to the adoptive parents were severe, resulting in their treatment for depression, hospitalization for Mr. Ross and the abandonment of his career and, ultimately, the breakup of the family. Accepting the truth of these allegations, as we must on a summary judgment motion {see Ingle v Glamore Motor Sales, 73 NY2d 183, 194 [1989]; Rovello v Orofino Realty Co., 40 NY2d 633, 634 [1976]), they suggest that defendant, an agency offering adoption services to the general public, engaged in a pattern *291of deception by concealing the psychiatric family history of children available for placement, in wanton and reckless disregard of the substantial risk of harm that its conduct presented to plaintiffs and other adoptive parents.
The basis for sustaining the punitive damages claim in this matter is fraudulent conduct aimed at the public in general that reflects a criminal indifference to the obligation of an adoption agency to provide prospective parents with information necessary to make an informed decision as to whether or not to adopt a particular child (see Juman v Louise Wise Servs., 211 AD2d at 447; Walker, 10 NY2d at 405). Punitive damages are not available to compensate plaintiffs for emotional suffering, recovery for which is precluded by public policy in wrongful adoption cases (see Becker v Schwartz, 46 NY2d at 413; Juman v Louise Wise Servs., 254 AD2d 72, 74 [1998]). Thus, defendant’s compliance with Social Services Law § 373-a some two decades after the adoption and any consequent emotional impact on the family are simply not pertinent, either to the determination of liability or the assessment of punitive damages. That defendant was not in violation of any statutory duty at the time of the adoption, as the dissenter repeatedly emphasizes, is simply not material to the merit of plaintiffs’ claims. The cause of action for fraud and the attendant demand for punitive damages are not predicated upon any statutory violation but upon the breach of defendant’s common-law obligation to provide prospective adoptive parents with information that is vital to their ability to make an informed decision concerning the contemplated adoption.
Jeffrey BB. v Cardinal McCloskey School & Home for Children (257 AD2d 21, 25 [1999]), also relied upon by defendant, is likewise not dispositive. In contrast to a practice of concealing psychiatric information, conceded by defendant herein, the facts recited in Jeffrey BB. do not suggest any such pattern of deception. Rather the failure to disclose the adoptee’s sexual abuse appears to have been an isolated omission. Finally, in Juman v Louise Wise Servs. (254 AD2d 72 [1998], supra), cited by the dissenter, the issue of punitive damages was not before us and was not addressed.
We have no quarrel with the dissenter’s view that this case poses numerous unanswered factual questions, particularly those involving the state of psychiatric knowledge in 1962 with respect to the hereditary nature of schizophrenia and the weight that a family history of the disease would have been accorded in reaching a diagnosis of schizophrenia in a child. However, rather than attempt to answer such complex questions on the basis of *292a sparse record on summary judgment, it is appropriate to leave resolution to the trier of fact on the basis of expert testimony at trial.
We reject the dissenter’s conclusion that defendant’s conduct is explained by “then-widely-held beliefs about the etiology of mental illness, and was motivated by a desire to find a good home for the child in question, not by any malicious desire to harm plaintiffs, nor with any certainty that they would be harmed by the placement.” The record contains conflicting affidavits from expert witnesses concerning the state of psychiatric knowledge in 1962. Defendant’s motivation may be attributed to the pursuit of monetary gain as readily as concern for the welfare of the child. And there is no indication in the record that the interests of the adoptive parents received even minimal consideration in effecting the placement. In purporting to resolve these several issues in favor of defendant, the dissenter engages in speculation as to defendant’s motive and the improper determination of factual questions as a matter of law upon a motion seeking dismissal of the complaint. The function of a court on a summary judgment motion is issue finding, not issue determination (Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404 [1957]; Wiener v Ga-Ro Die Cutting, 104 AD2d 331, 333 [1984], affd 65 NY2d 732 [1985] for reasons stated below). As this Court stated in Swersky v Dreyer & Traub (219 AD2d 321, 328 [1996]), the award of punitive damages and the amount thereof are questions within the sound province of the trier of fact, which must decide whether “the wrongdoing is intentional or deliberate, has circumstances of aggravation or outrage, has a fraudulent or evil motive, or is in such conscious disregard of the rights of another that it is deemed willful and wanton.”
Contrary to the dissenter’s assertion, it is not necessary to establish that defendant’s actions were prompted by an intention “to maliciously hurt others” in order to sustain plaintiffs’ claim for punitive damages. Malice can arise from the wanton disregard of obligations, whether owed to the public (see Sharapata v Town of Islip, 56 NY2d 332, 335 [1982] [malicious, wanton or reckless conduct indicating improper motive or vindictiveness]) or to an individual (see Giblin v Murphy, 73 NY2d 769, 772 [1988] [“ ‘wanton or reckless disregard of plaintiff’s rights’ ” (quoting 97 AD2d 668, 671 [1983])]; cf. Borkowski v Borkowski, 39 NY2d 982 [1976]). On the record before us, a trier of fact could conclude that defendant’s conduct in concealing material information without regard to potentially disastrous consequences for the adoptive family, concededly engaged in as a mat*293ter of practice over a period of years, amounts to “such wanton dishonesty as to imply a criminal indifference to civil obligations” (Walker, 10 NY2d at 405).
Upon the record adduced thus far, we conclude that plaintiffs will be able to produce evidence at trial which, if believed by the jury, would support the conclusion that defendant’s conduct was in sufficient disregard of the rights of adoptive parents to justify the award of punitive damages (see Walker, 10 NY2d at 406 [noting the difficulty of stating “an all-inclusive rule” concerning what constitutes an appropriate case warranting recovery of exemplary damages]).