O'HEARN v. SPENCE-CHAPIN, 95 Civ. 3775(JGK).

• Decision Date: 04 June 1996
• Docket Number: No. 95 Civ. 3775(JGK).,95 Civ. 3775(JGK).
• Citation: 929 F. Supp. 136
• Parties: Deborah O'HEARN, Plaintiff, v. SPENCE-CHAPIN SERVICES TO FAMILIES AND CHILDREN, INC., Defendant.
• Court: U.S. District Court — Southern District of New York

929 F. Supp. 136

Deborah O'HEARN, Plaintiff, v. SPENCE-CHAPIN SERVICES TO FAMILIES AND CHILDREN, INC., Defendant.

No. 95 Civ. 3775(JGK).

United States District Court, S.D. New York.

June 4, 1996.

Robert Fierman, Andrew Miltenberg, Neseuoff & Miltenberg, New York City, for Plaintiff.

Lisa E. Cleary, Stephanie Fell, Patterson, Belknap, Webb & Tyler, L.L.P., New York City, for Defendant.

OPINION AND ORDER

KOELTL, District Judge:

The plaintiff Deborah O'Hearn is an adopted child. She alleges that she contacted the defendant Spence-Chapin Services to Families and Children, Inc. ("Spence-Chapin"), an adoption agency, in 1988 when she was 20 years old to attempt to learn the identity of her natural mother. Spence-Chapin provided only non-identifying information. In 1992, the plaintiff hired a private investigation agency which was able to locate her mother, Ann Larkin Esposito. Before the plaintiff could meet Esposito, however, Esposito died.

The plaintiff alleges that in 1968 Spence-Chapin orally promised Esposito that if Esposito requested the agency to give her name and address to the plaintiff, and if the plaintiff asked for this information after she turned 18, the agency would provide this information to the plaintiff. According to the complaint, in 1977 Esposito asked the agency to give identifying information to the plaintiff if the plaintiff asked for it. The agency allegedly responded by letter that it would do so.

Relying on diversity of citizenship jurisdiction, the plaintiff brings claims against Spence-Chapin for breach of contract based on the two alleged contracts between Spence-Chapin and her natural mother concerning the release of identifying information to the plaintiff. The plaintiff contends that she is a third-party beneficiary of these contracts. She also brings tort claims for negligent and intentional failure to give information, negligent misrepresentation, intentional or negative infliction of emotional distress, and negligence per se. She also seeks punitive damages.

The defendant moves to dismiss the plaintiff's complaint pursuant to Fed.R.Civ.P. 12(b)(6). Specifically, the defendant argues that (1) one of the contract claims is void under the statute of frauds, and both contract claims are untimely and contrary to the public policy of New York; (2) the tort claims are untimely and fail to state a claim upon which relief can be granted; (3) the punitive damages claim is improperly pleaded as an independent cause of action.

I.

The plaintiff's first two causes of action are for breach of contract. The defendant argues that these contract claims are untimely, that the 1968 oral agreement is barred by the statute of frauds, and that both the 1968 and 1977 agreements are barred by the public policy of the State of New York.

A.

The plaintiff did not respond in her papers to the defendant's argument that the claim for the alleged breach of the 1968 contract is barred by the statute of frauds. The defense is therefore conceded and the contract claim based on the 1968 contract (First Claim for Relief) must therefore be dismissed. In any event, as a matter of law, the claim is barred by the statute of frauds because the contract could not be performed within one year. See N.Y.Gen.Obl.L. § 5-701(a)(1).

B.

The defendant also argues that both of the plaintiff's contract claims are untimely. The contract claims accrued in 1988 when the contracts were allegedly breached. See Ely-Cruikshank Co., Inc. v. Bank of Montreal, 81 N.Y.2d 399, 402, 599 N.Y.S.2d 501, 502, 615 N.E.2d 985, 986 (1993) (under New York law, a breach of contract cause of action accrues at the time of the breach even if the damage does not occur until later); see also T & N PLC v. Fred S. James & Co. of New York, Inc., 29 F.3d 57, 59-60 (2d Cir.1994) (discussing accrual of contract claims under New York law). As the Court of Appeals of New York has explained:

"except in cases of fraud where the statute expressly provides otherwise, the statutory period of limitations begins to run from the time when liability for wrong has arisen even though the injured party may be ignorant of the existence of the wrong or injury.... Thus, knowledge of the occurrence of the wrong on the part of the plaintiff is not necessary to start the Statute of Limitations running in a contract action."

Ely-Cruikshank Co., 81 N.Y.2d at 403, 599 N.Y.S.2d 501, 615 N.E.2d 985 (internal quotations and citations omitted).

Here, the defendant contends that the plaintiff's contract claims are actually claims for personal injury, and thus are subject to the three-year statute of limitations for negligence actions rather than the six-year statute of limitations for contract actions. It is not necessary to determine whether a three- or six-year statute of limitations applies in this case because the plaintiff's contract claims would be barred under the six-year statute of limitations in any event. The plaintiff's contract claims accrued in August 1988, when she contacted the defendant to request information about her mother and was allegedly told, in breach of the two alleged contracts, that she could be given only non-identifying information. The plaintiff did not initiate this action, however, until May 1995, almost seven years after the defendants allegedly breached the contracts at issue in this case.

The plaintiff does not argue that the contract claims were brought within the statute of limitations. Rather, the plaintiff contends that the defendant is equitably estopped by its own misconduct from asserting a statute of limitations defense.

The doctrine of equitable estoppel is available when the defendant's fraud, misrepresentation, or deception induced the plaintiff to refrain from commencing the action within the applicable statute of limitations. See East Midtown Plaza Housing Co., Inc. v. City of New York, 218 A.D.2d 628, ____, 631 N.Y.S.2d 38, 38 (1st Dep't 1995); see also T & N, 29 F.3d at 62 (plaintiff must allege facts indicating that defendant wrongfully induced plaintiff to refrain from commencing its suit). When the defendant allegedly concealed a material fact without making any actual misrepresentations, the plaintiff must demonstrate that a fiduciary relationship imposed on the defendant an obligation to inform the plaintiff of the facts underlying the claim. Gleason v. Spota, 194 A.D.2d 764, 764, 599 N.Y.S.2d 297, 299 (2d Dep't 1993); Jordan v. Ford Motor Co., 73 A.D.2d 422, 424, 426 N.Y.S.2d 359, 360-61 (4th Dep't 1980); see also East Midtown Plaza Housing Co., 631 N.Y.S.2d at 39 (citing Cabrini Med. Ctr. v. Desina, 64 N.Y.2d 1059, 1062, 489 N.Y.S.2d 872, 874-75, 479 N.E.2d 217, 219-20 (1985)); Department of Econ. Development v. Arthur Andersen & Co. (U.S.A.), 747 F.Supp. 922, 943 (S.D.N.Y. 1990).

The plaintiff points to no affirmative misrepresentations that induced her to refrain from bringing this action or from pursuing the unsealing of her adoption record under N.Y.Dom.Rel.L. § 114. Instead, the plaintiff argues that Spence-Chapin induced her to refrain from commencing this action because it concealed from her the fact that she had a claim against them. More specifically, the plaintiff contends that the defendant failed to tell her in 1988 when she asked for information about her natural mother that the defendant had two alleged contracts with the plaintiff's natural mother regarding the release of identifying information, that the agency believed that it could not give the plaintiff the information she requested because under New York law she needed a court order to obtain such information, and that the plaintiff's natural mother had given the defendant the identifying information that the plaintiff was seeking and that the plaintiff's natural mother therefore affirmatively wanted contact with the plaintiff if the plaintiff so desired.

Because the plaintiff alleges that the defendants concealed information, she must demonstrate that the defendant had a fiduciary duty to reveal this information. The plaintiff has presented no authority, however, from New York or indeed any other state for the proposition that a fiduciary relationship exists between an adoption agency and an adoptee. Indeed, in her Complaint, the plaintiff alleged only that Spence-Chapin had a "unique, special duty akin to a fiduciary duty ..." (Compl. ¶ 46.) And at oral argument, the plaintiff's counsel indicated that he was not sure if the duty Spence-Chapin allegedly owed to the plaintiff was a fiduciary duty. Spence-Chapin argued persuasively that there is no authority supporting the existence of a fiduciary relationship between an adoption agency and an adoptee, particularly long after the adoption is completed and the adoption agency no longer has any relationship with the adopted child. Spence-Chapin's position is supported by the statutory adoption scheme in New York. While New York State law regulates the process of adoption and the confidentiality of adoption records, see generally N.Y.Dom.Rel.L. § 114, there is no provision of that law or New York State case law that establishes a fiduciary relationship between an adoption agency and an adoptee.

Only recently have courts held that adoption agencies may be held liable to adoptive parents for intentionally misrepresenting or fraudulently concealing the medical and psychiatric background of the children they place for adoption. See Juman v. Louise Wise Servs., 211 A.D.2d 446, 447, 620 N.Y.S.2d 371, 372 (1st Dep't 1995); Michael J. v. County of Los Angeles, Dep't of Adoptions, 201 Cal.App.3d 859, 872-74, 247 Cal. Rptr. 504, 511-13 (Ct.App.2d Dist.1988) (holding that a cause of action exists against an adoption agency for the intentional misrepresentation or fraudulent concealment of an adopted child's mental or physical characteristics); Meracle v. Children's Serv. Society of Wisconsin, 149 Wis.2d 19, 32, 437 N.W.2d 532, 537 (1989) (adoption agency could be held liable for affirmatively...