Robert Clark Wagner v. Diane Louise Wagner, 1733154

Background

Parties divorced in 1999; the wife testified under oath she had given away an oil painting during the marriage. The final divorce decree and equitable distribution issued in 1999 assigned the painting a $2,000 value (based on restoration costs) after the husband’s expert was excluded for late designation.
In 2014 the husband sued to set aside the 1999 decree and reopen equitable distribution, alleging the wife hid the painting during discovery and committed perjury about its whereabouts.
After a three-day hearing the circuit court found the wife had hidden the painting and lied at deposition and trial, but also found credibility problems with the husband and that he sought the painting’s value (not the item) at divorce.
The circuit court concluded the wife’s conduct was intrinsic fraud (perjury) rather than extrinsic fraud, denied relief to set aside the decree, and awarded the husband only $2,000 in fees related to a motion to compel.
The husband appealed, arguing the wife’s concealment was extrinsic fraud (or otherwise justified reopening under Code § 8.01-428(D)) and that sanctions were inadequate; the wife sought fees on appeal.
The Court of Appeals affirmed: the trial court’s factual findings were supported by the record; the deception amounted to intrinsic—not extrinsic—fraud; Code § 8.01-428(D) did not authorize reopening; and the sanctions award was not an abuse of discretion. Appellate fees were denied.

Issues

Issue	Plaintiff's Argument (Wagner)	Defendant's Argument (Diane Wagner)	Held
Whether wife’s concealment/perjury constituted extrinsic fraud sufficient to set aside final decree	Wife’s concealment and false discovery/testimony prevented fair submission and deprived husband of opportunity to be heard, so decree is void	Husband had opportunity at trial; his expert was excluded due to his own delay; wife’s lies were trial-related (intrinsic)	Court held fraud was intrinsic, not extrinsic; husband failed to prove extrinsic fraud by clear and convincing evidence
Whether Code § 8.01-428(D) permits an independent action to set aside decree for intrinsic fraud	§ 8.01-428(D) preserves equitable power to entertain independent actions for fraud on the court; intrinsic fraud should support reopening	Independent action is narrowly construed; elements require fraud that prevented presentation of a defense and absence of fault; husband failed to meet elements	Court held statutory preservation did not authorize reopening here because requirements for independent action were unmet
Whether the circuit court abused discretion in awarding only $2,000 in sanctions/fees	Husband sought ~$90,000 in fees for the new suit and sanctions under Code § 8.01-271.1 and court rules, arguing wife’s misconduct warranted greater sanction	Trial court noted prior fee awards, found wife’s conduct did not prevent fair submission, and exercised discretion to award limited fees	Court found no abuse of discretion in the limited $2,000 award
Whether appellee should receive appellate costs and fees	N/A (wife requested costs)	Appeal was meritless; wife prevailed and should recover fees	Court denied appellate fees — appeal was not frivolous and raised substantial issues

Key Cases Cited

State Farm Mut. Auto. Ins. Co. v. Remley, 270 Va. 209 (explains extrinsic fraud prevents fair submission to the court)
Jones v. Willard, 224 Va. 602 (contrasts extrinsic and intrinsic fraud doctrines)
Gulfstream Bldg. Assocs. v. Britt, 239 Va. 178 (requires clear and convincing proof for extrinsic fraud and discusses independent action preservation)
Charles v. Precision Tune, Inc., 243 Va. 313 (narrow construction of § 8.01-428(D) and elements for independent equitable action)
McClung v. Folks, 126 Va. 259 (historic explanation that intrinsic fraud is tried out in the original proceeding; finality favored despite occasional miscarriages)
Sauder v. Ferguson, 289 Va. 449 (emphasizes policy favoring finality of judgments)