10.3Compensation for Adoption Services

“MCL 710.54 of the Adoption Code governs authorized charges and fees in adoption cases.” In re MJG, 320 Mich App 310, 321 (2017).

A.Court Approval of Adoption Services Payments

Although “courts normally do not interject themselves into contractual matters between competent parties when no party takes exception to how the contract was performed, . . . MCL 710.54[] requires courts to review payments made in connection with Michigan adoptions.” In re MJG, 320 Mich App 310, 316 (2017). This review includes “the power to prohibit certain fees paid by adoptive parents ‘in connection with the adoption.’” Id. However, this power, derived from MCL 710.54(10), is limited: “the court only has authority to approve or disapprove fees for services that were required to be submitted to the court for approval in the first instance.” In re MJG, 310 Mich App at 318. In other words, “[t]he 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.” In re BGP, 320 Mich App 338, 348 (2017). Accordingly, “before a court disapproves any submitted fees, it should determine whether the fees actually fall under the scope of the statute.” In re MJG, 310 Mich App at 318.

The Michigan Court of Appeals created a framework for trial courts to use when analyzing fees under MCL 710.54. In re MJG, 310 Mich App at 327. The analysis involves these inquiries:

•Do the adoption service fees fall within the scope of MCL 710.54 (i.e. are they related to the adoption)? If not, then the court has no authority to disapprove the fees. See Section 10.3(B) for examples of fees that have been determined to not be related to the adoption.

•If the fees are related to the adoption, does MCL 710.54(1) or MCL 710.54(2) prohibit them? See Section 10.3(C) for more information on the prohibitions in MCL 710.54(1)-(2).

•If the fees are not prohibited by MCL 710.54(1) or MCL 710.54(2), does MCL 710.54(3) permit them? See Section Section 10.3(E) for more information on the fees permitted by MCL 710.54(3).

Caution: “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.” In re BGP, 320 Mich at 350 n 9. Accordingly, “[i]t is incumbent on the circuit court, when disapproving fees, to ensure that they fall under the scope of the statute.” Id.

To facilitate the determination regarding requested fees for services, verified statements must be filed with the court at least seven days before the child is formally placed under MCL 710.51. See Section 10.5 for more information on the verified statements.

MCL 710.54(10) requires the court to approve or disapprove all fees and expenses disclosed in the verified statements. Note, however, “[t]he label [assigned] to the fees [in a verified statement submitted under MCL 710.54(7)] does not end the inquiry nor does it justify the rejection of all fees simply and solely because of the label.” In re MJG, 320 Mich App at 328 (finding that “[t]he trial court should not have rejected the entirety of [certain] fees simply because [the adoptive parents] labeled them as attorney fees”). The court need only enter one order approving the fees, and it cannot be entered until after the verified statement has been updated. MCR 3.803(B)(1).

The court does not need to hold a formal hearing to approve or disapprove fees and expenses under MCL 710.54. See In re BGP, 320 Mich App at 343-344 (finding that an adoption agency “failed to prove any plain error by virtue of the fact that no formal hearing was held” before the circuit court disallowed, under MCL 710.54, the adoptive parents’ payment of administrative fees to the agency; although the agency “may not have been formally invited to participate in the proceedings in the circuit court because it was not a party to the adoption,” the agency was not denied due process where “the court received materials to consider [the adoptive parents’] request to approve the fees,” including the agency’s “letter outlining what the administrative fees covered”). The court may require a sworn statement from anyone directly or indirectly involved in any contract or arrangement that led to the child being placed for adoption. MCL 710.54(9).

B.Fees That Are NOT Related to the Adoption

Fees for the following services have been found to be outside the scope of the adoption, and thus, outside the purview of the court’s authority to approve/disapprove:

•Preliminary and administrative service fees. Services performed for prospective clients “are not connected to any adoption,” and therefore “do not fall within the scope of MCL 710.54[.]” In re MJG, 320 Mich App 310, 319, 329 (2017). Examples of preliminary and administrative services include consulting prospective clients, assisting prospective clients with completing confidential adoption questionnaires, assessing the prospective clients’ objectives and challenges, and assisting with other paperwork. See In re MJG, 320 Mich at 328-329.

•Overhead service fees. Overhead expenses that are “not specifically related to any particular adoption” are not subject to court approval. In re BGP, 320 Mich App 338, 350 (2017). Examples of overhead service fees include general contract labor, IT services, payroll, health insurance, professional insurance, office supplies, and rent. See id.

•Marketing service fees. “Marketing services involve efforts to expose [potential adoptive parents] to birth mothers throughout the United States”; they are not done “in connection with the adoption” and are therefore not subject to court approval under MCL 710.54. In re MJG, 320 Mich App at 318-319, 330. “[T]hese [types of] services [are] performed without the identification of any potential adoptee or birth mother and without any guarantee that an adoption ultimately w[ill] take place, . . . [and] the status of any adoption at this time necessarily would have been speculative[.]” Id. at 330.

C.Fees That Are Generally Prohibited¹

1.Prohibitions Under MCL 710.54(1)

“[A]bsent any authorization from a court, the expenses listed in MCL 710.54(1) are squarely prohibited.” In re MJG, 320 Mich App 310, 326 (2017).

Unless approved by the court, a person must 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.^[2] 

(b) The registration, recording, or communication of the existence of a child available for adoption.^[3]

(c) A release.^[4]

(d) A consent.^[5] 

(e) A petition.”⁶ MCL 710.54(1)(a)-(e).

In effectively prohibiting surrogacy contracts, MCL 710.54(1) does not infringe on a married couple’s constitutional right to bear children because it does not prohibit them from having a child as planned, but rather prohibits them from paying a surrogate mother to bear their child and to sign over her consent to the adoption. Doe v Attorney General, 106 Mich App 169, 173-174 (1981).

2.Prohibitions Under MCL 710.54(2)

MCL 710.54(2) sets out certain activities for which fees and charges are generally prohibited. Payment for the listed activities is prohibited, “unless they are done for particular purposes and performed by a ‘child placing agency[.]’” In re MJG, 320 Mich App 310, 326 (2017).

Under MCL 710.54(2), “[e]xcept for a child placing agency’s preparation of a preplacement assessment described in [MCL 710.23f] or investigation under [MCL 710.46],^[7] 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.”

Specifically, the following activities have been found noncompensable under MCL 710.54(2):

•“[g]enerating a profile for the birth mother and comparing the preferences of the birth mother to the preferences of the adoptive parents [which] is akin to assisting the birth mother and adoptive parents in evaluating one another,” MCL 710.54(2)(a)-(b);

•“apprising the [adoptive parents] of various birth mothers” which is akin to “‘[a]ssisting a potential adoptive parent in evaluating a parent or guardian or adoptee’ and ‘[r]eferring a prospective adoptive parent to a parent or guardian of a child for purposes of adoption,’” MCL 710.54(2)(b)-(c);

•“[p]resenting an adoption opportunity to the [adoptive parents which] is akin to . . . ‘[r]eferring a parent or guardian of a child to a prospective adoptive parent for purposes of adoption,’ MCL 710.54(2)(d)”;

•“services related to introducing the birth mother to the [adoptive parents,]” MCL 710.54(2)(c)-(d). In re MJG, 320 Mich App at 329, 331-333.

D.Services for Which Adoptive Parents Must Pay⁸

An adoptive parent must pay for preparing the preplacement assessment, any additional investigation ordered under MCL 710.46, and counseling for the parent or guardian related to the adoption (unless waived). MCL 710.54(4)-(5). These provisions “list fees that adoptive parents must pay, and, thus, the circuit court is also required to approve fees that fall under these subsections.” In re MJG, 320 Mich App 310, 327 (2017) (“the plain language of MCL 710.54(10) requires court approval of ‘all fees and expenses’” if the fees are for “services made ‘in connection with the adoption,’” including those required by MCL 710.54(4)-(5)).

1.Counseling

At the time of a release of parental rights or a consent to adoption (direct placement), a parent must indicate in the verified statement whether he or she has received counseling or is waiving it. MCL 710.29(6)(b) and MCL 710.44(5)(b).⁹ If the parent or guardian has received counseling related to the adoption, the prospective adoptive parent must pay for the service. MCL 710.54(5).

2.Preplacement Assessment and Additional Investigation

“An adoptive parent shall pay the reasonable and actual charge for preparation of the preplacement assessment and any additional investigation ordered pursuant to [MCL 710.46].” MCL 710.54(4). For information on preplacement assessments, see Section 5.5(C), and for information on investigative reports prepared under MCL 710.46, see Section 5.6.

E.Services Adoptive Parents May Pay¹⁰

MCL 710.54(3) sets out the charges that adoptive parents may pay. Accordingly, if the fees are for services connected to the adoption, “the circuit court must approve fees that fall under this subsection if they represent reasonable and actual charges.” In re MJG, 320 Mich App 310, 318, 325, 327 (2017) (“the plain language of MCL 710.54(10) requires court approval of ‘all fees and expenses’” if the fees are for “services made ‘in connection with the adoption’” including those authorized by MCL 710.54(3)).

“[T]he list of permissible expenses in [MCL 710.54(3)] is exhaustive.” In re MJG, 320 Mich App at 327, 334. Under MCL 710.54(3), “[a]n 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.^[11]

(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.^[12]

(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.”

The Michigan Court of Appeals has identified specific fees that are permissible under MCL 710.54(3): fees for intake meetings with birth mothers, for assisting the birth mother in obtaining a physical evaluation, screenings, testing, insurance, and counseling, for mentoring support services, and for continued support to the birth mother during and after the adoption, MCL 710.54(3)(c); fees for obtaining medical and statistical information about the birth parents and child and for providing to the adoptive parents any medical records regarding the birth mother’s obstetrical care, MCL 710.54(3)(e); fees for the birth mother’s pregnancy-related needs and transportation, MCL 710.54(3)(d) and MCL 710.54(3)(g); and legal analysis fees for analyzing the legal requirements and applicable laws, MCL 710.54(3)(f). In re MJG, 320 Mich App at 332, 334 (further finding that fees for services related to “[r]eferring [adoptive parents] to agencies, social workers, and attorneys; managing the adoption plan; and communicating with legal entities are not enumerated services under MCL 710.54(3)” and are therefore not allowable) (emphasis added).

“A payment authorized by [MCL 710.54(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.” MCL 710.54(6). If the adoption is not completed, any payments made under MCL 710.54(3) are not recoverable. MCL 710.54(6).

F.Fees That Require Court Approval

Unless approved by the court, a person must 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.^[13] 

(b) The registration, recording, or communication of the existence of a child available for adoption.^[14]

(c) A release.^[15]

(d) A consent.^[16] 

(e) A petition.”¹⁷ MCL 710.54(1)(a)-(e).

“[A]bsent any authorization from a court, the expenses listed in MCL 710.54(1) are squarely prohibited.” In re MJG, 320 Mich App 310, 326 (2017).

In effectively prohibiting surrogacy contracts, MCL 710.54(1) does not infringe on a married couple’s constitutional right to bear children because it does not prohibit them from having a child as planned, but rather prohibits them from paying a surrogate mother to bear their child and to sign over her consent to the adoption. Doe v Attorney General, 106 Mich App 169, 173-174 (1981).