*1 frоm a disciplinary to a demand for information respond lawful 8.4(a) Rules (lawyer Rule shall violate authority); 8.4(e) Conduct); Rule shall not en- (lawyer and Professional of justice). in conduct to administration prejudicial that is gage CONCLUSION and for Consent accept Agreement Discipline We the (9) of nine months from suspension a definite impose be susрension Respondent’s request practice law. suspension date of interim made to the his retroactive (30) of this thirty days opinion, denied. Within date Lawyer shall on Conduct respondent pay Commission matter. investigation it of this Within costs incurred file an opinion, respondent fifteen of the date of this shall days complied that he has showing affidavit with the Clerk Court 30, RLDE, Rule Rule with SCACR. reinstatement, fully to his shall pay
Prior respondent I, applicable late fees Matter reporter’s charges Fund for Protection fully Lawyers reimburse the Client behalf, it any respondent’s complete claims has paid certification, 403, SCACR, trial observations and obtain Rule of the Committee on and demonstrаte to the satisfaction and this that his medical condi- Fitness Character fitness to practice tion does his law. impair DEFINITE SUSPENSION. JJ., C.J., MOORE, PLEICONES,
TOAL, BURNETT and J., WALLER, not participating. concur.
647S.E.2d237 RAY, Allyn Appellant, Don RAY, Respondent. Hodges Melinda No. 26343.
Supreme Court of South Carolina.
Heard Jan. 2007.
DecidedJune 2007. *3 Derrick, Lexington, Appellant. of for Jean Perrin Columbia, Isaacs, for Alley, of Isaacs & Joseph W. Respondent. BURNETT:
Justice action to set aside Allyn Ray (Appellant) brought Don 60(b), to Rule family pursuant court Hodges Ray’s Melinda The court family granted SCRCP. 12(b)(6), Rule to dismiss to pursuant motion (Respondent) SCRCP. We reverse. BACKGROUND
FACTUAL/PROCEDURAL in 2000. In Appellant Respondent were divorced issued a decree the settlement family approving court Respondent concerning reached Appellant equita- ble marital Appellant division of their estate. initi- action, ated the an action for alleging upon instant independent equity arising court and an action in from Re- $180,000 concealment until spondent’s deliberate after marital had been divided. property divorce,
Prior Respondent agreement to the entered an her pharmacy jоintly sell she owned husband. At the with time, separate same entered into a Respondent agreement CVS, compete purchaser pharmacy, with $130,000 in which she received consideration. Respondent made with arrangements payment CVS receive after the Further, deliberately divorce was finalized. she concealed thе discovery aforementioned agreement response requests and during depositions. family
The addressed the Appellant’s issue whether allegations against Respondent rose to the level of extrinsic Respondent fraud or intrinsic fraud. simply argued were fraud, her acts only judicata constituted intrinsic res applied, Appellаnt to exercise due diligence discovering failed complaint and the failed to state facts sufficient Thereafter, constitute a cause of action. Respondent filed 12(b)(6), motion to dismiss to Rule pursuant SCRCP. court, citing The Ford Company, Motor (2003), Appellant’s held allegations did not rise to the level of extrinsic fraud because there were *4 no allegations “extraordinary, of collateral matters which justify relitigation judicial the of by issues concluded years granted decree The court ago.” family Respondent’s motion to This appeal dismiss. followed.
ISSUE Does concealment marital deliberate of a asset constitute part extrinsic fraud when the concealment is of a deliberate defraud, scheme to involving party an unknown third not discovery? OF STANDARD REVIEW court, this has the appeals family from Court find in its of the authority facts accordance with view T.A.M., of the E.D.M. v. 307 preponderance evidence. S.C. (1992). 471, 812, However, 473, 415 814 this broad S.E.2d to disregard of scope require review does findings parties, оf the and heard the family who saw position credibility. and is in a better their Ste evaluate Stevenson, 477, 616, 475, venson 279 v. 276 S.C. S.E.2d 617 (1981); Thomasson, 524, 525, v. Cherry 541, (1981).
LAW/ANALYSIS concealment Appellant argues Respondent’s deliberate $130,000 of the sale proceeds generated couple’s from on this pharmacy constitutes extrinsic fraud based Court’s Ford opinion Company, v. Motor court erred in limit Appellant argues S.E.2d 605. ing Chewning, extrinsic defined in to misconduct as perpetrated by attorneys. agree. We Chewning, noted: misconduct,
Generally speaking, only
egregious
most
or
or
bribery
judge
jury,
such as
of a
members
a
attorney
fabrication
evidence
which
implicated
egre-
will constitute fraud on the cоurt. Less
misconduct,
as
court of facts
gious
such
nondisclosure
it,
to the matter
will not ordinari-
allegedly pertinent
before
ly
to the level of fraud
the court.
rise
Co.,
v.
Id. at
176).
The essential distinction between intrinsic and' ex trinsic fraud is the ability discover the fraud.1 Equitable relief from a judgment granted “is for extrinsic fraud on the theory that because the frаud a prevented party from fully exhibiting and trying his there has never been a real contest before the court on matter of the action.” Id.; Bryan 164, 167-68, see also v. Bryan, 220 S.C. 66 S.E.2d 609, (1951) (“[N]ot every is sufficient to move equity to grant relief from a judgment. Generally speaking, in relief, order to secure equitable it must appear the fraud was extrinsic or collateral to the question examined and determined in the action in which the judgment was rendered: intrinsic fraud is not sufficient for equitable relief.”); Bowman, Bowman v. (“South 657 (Ct.App.2004) Carolina’s to strong policy y
wards
of judgments
trumps
party’s ability to set
finalit
where,
here,
aside
judgment
as
the party could have discov
trial.”);
ered the
prior
G.,
evidence
Mr.
v. Mrs.
G.
(“Relief
103 (Ct.App.1995)
granted
for extrinsic but not intrinsic fraud on the theory that the
latter deceptions should be discovered
during
litigation
itself, and to permit such relief undermines the
of all
stability
judgments.”).2
fraud,
Extrinsic
opposed
fraud,
as
to intrinsic
Melton,
generally
1.
Marriage
See
Cal.App.4th
re
33 Cal.
(1994) (no
Rptr.2d 761
extrinsic fraud found where
misrepre
husband
pension
sented valuе of
with the
plan
benefits
assistance of the benefit
plan
administrator where
was a
to the action and wife’s
counsel could have
through
discovered the concealed information
dis
Bankston,
covery); Bankston v.
(Tex.Civ.App.1952)
reasonable protect or discretion to their own interests. A difficult, impossible during is often if not to discover *6 concealing through For assets an un- litigation. example, in third-party discovery known is extrinsic fraud that it or of the court constitutes conduct activities outside the other proceedings deprive party opportunity which exhibit and his case. 24 fully try Am.Jur.2d Divorce (1998); 81, § 435 354 at 579 S.E.2d Separation Chewning, S.C. at 610. held “thе an Chewning, perjury by we subornation of documents
attorney by intentional concealment of and/or an are actions fraud.” Id. attorney which constitute extrinsic 82, However, at 579 at 610. our in holding Chewning S.E.2d does not limit the fraud to misconduct of finding extrinsic Evans, attorney an or an officer of the court. As noted in upon fraud the court has been defined as “that species does, to, attempts integrity fraud which or subvert the itself, or a fraud officers of the court perpetrated by judicial machinery perform so that the cannot the usual present- manner its task of cases that are impartial adjudging Gunter, 525, 529, adjudication.” 366 ed Evans 294 S.C. (1988) 44, 46 H. South (quoting Lightsey, Flanagan, S.E.2d J. Procedure, (2nd 1985)) ed. add- (emphаsis Carolina Civil ed). Evans, relief the former husband an action for brought 60(b), SCRCP,
from under Rule when he discovered waiving former had him to an sign his wife induced affidavit he his or for the divorce action when was right plead appear that the former extremely intoxicated. We noted while wife’s fall in the “her actions category, intrinsic form, denying him his inducing sign Evans such а waiver to be heard such as could be considered opportunity were 60(b).” at extrinsic fraud under Rule Id. at 366 S.E.2d concealing or solely perjury 47. The fraud Evans was documents, alone intrinsic fraud. acts which would constitute an accompanied by Evans an act of intrinsic fraud involved knowledge knowledge must avail himself of the or means of who, protect person open The court will not with full to him. so, protect to do will not himself. Oxford, (Ct.App.1984) King v. (internal omitted). citations court, intentional act or scheme defraud mislead the the fraud rise to the of extrinsic making level fraud. case, In the instant Respondent misrepresented the ¿xistence of the marital assets ordered thе court to when Chewning,
produce
accounting. This was intrinsic fraud. See
(“the
at
at 610
S.C.
failure to disclose
3
to an
or court matters
adversary
which would defeat one’s own
fraud”)
Ctr.,
claim
(quoting
is intrinsic
Hilton Head
177).
Evans,
However,
at
at
S.E.2d
as in
there
“a
showing
one has acted
an intent to
with
or defraud the
Chewning,
deceive
court.”
(“it
at 608
essential that
there be a
showing
[is]
conscious
can
be
wrongdoing
properly
characterized as
—what
a deliberate scheme to defraud —before relief from a final
*7
judgment is
appropriate.”).
delaying
payment by
CVS
divorce,
until after the
Respondent engaged
deliberately
“a
and
planned
carefully executed scheme tо
defraud.” Id.
at 609 (quoting
S.E.2d
Hazel-Atlas
Glass Co. Hartford-
Co.,
(1944)).
Empire
U.S.
S.Ct.
L.Ed. 1250
hold an act
We
or concealment of a document
coupled with an intentional scheme to defraud the court
justifies
60(b)
the setting
judgment
aside of a
pursuant
Rule
See,
Rozier,
(“In
due to extrinsic fraud.
e.g.,
CONCLUSION Respondent’s actions rose to the level of extrinsic fraud she engaged whеn a fraudulent scheme to hide from assets and, so, party, an unknown third doing the court utilized CVS, Accord- subject during litigation. discovery family court’s dismissal of this action and ingly, we reverse opinion. further consistent with this proceedings remand for REVERSED. MOORE, PLEICONES, J.,
TOAL, C.J., J., and concur. J., WALLER, separate in a dissenting opinion which concurs. PLEICONES, dissenting:
Justice I respectfully my opinion, appellant’s complaint dissent. a classic of intrinsic fraud which the alleges instance I affirm. properly dismissed. would may equity judgment A a suit in to set aside a party bring has, as procured by may at law allegedly appellant 60(b), move to aside under Rule SCRCP. judgment set are differences on procedural depending While there certain action, the form of the are identical: relief legal principles judgment procured by is available where earlier through the use of extrinsic but obtained majori- intrinsic fraud is to collateral attack. The I do on the basic definition of ty agree point, as we that intrinsic fraud: a fraud to the merits of the earlier goes action, is, to notice an issue of which the had both prior in that suit. Mr. litigate E.g., G. G., 101 (Ct.App.1995). v. Mrs. *8 deliberately a alleges that concealed Appellant respondent a of his part appellant marital asset as of scheme defraud in property division of marital rightful equitable share the undeniably action. aware parties’ Appellant the divorce was at the issue that identity that and valuation assets was suit, distribution. litigate equitable had the opportunity intrin- present complaint alleges only Accordingly, appellant’s the bar intrinsic underlying The reason policy sic fraud. the that an issue which predicated theory fraud claims is “on should original been tried the action passed uрon has relief the equitable against not be retried an action for intermina- litigation would be judgment, and that otherwise v. Bryan, Bryan ble....”
(1951) (internal omitted). finality citation The for need judgments, as the potential well as for endless is relitigation, especially strong court matters.
In Bryan,
the Court was asked the then-novel question
whether
or false
could
the
an
perjury
swearing
form
basis for
action to
judgment.
set aside a
The Court
the
acknowledged
validity of
leveled
the
criticisms
at
fraud
intrinsic/extrinsic
distinction, but ultimately
that
adopted
deciding
rule.
rule,
adopt this
the
that “the classic
recognized
example
of intrinsic as contrasted with extrinsic fraud is the commis
sion of
a
is a
perjury by
upon
witness. While
fraud
the court
is
judgment]
insufficient for
a
attacking
[it
because
materiality
testimony
and the
to attack
it,
at
open
the trial.”
at
Bryan
66 S.E.2d at
(internal
omitted);
citation
v.
but see
Ford Motor
Co.,
(2003)
fn. 2
(stating
court).
perjury or false
a
swearing
upon
is not
fraud
did, however,
The Bryan Court
leave
open
possibility
that exceptional
involving
circumstances
intrinsic
may
fraud
date,
justify equitable relief. To
an
only time
exception
has been made is in
where
Chewning,
the Court held
subornation of perjury by
attorney,
an
or the intentional
concealment of
attorney,
documents
a sufficient
fraud
upon the court to
a
a judgment.
allow collateral attack on
Chewning were careful to
that perjury by
reiterate
a party
witness,
such
as the failure of
party to disclose to its
or to
adversary
the court matter which
defeat that
claim,
party’s
or a
party’s
requested
failure
disclose
docu
ments,
is intrinsic fraud which cannot
support
collateral
82-83,
attack oh
judgment. Chewning
The alleged by appellant hеre is classic intrinsic fraud. majority’s The reliance case federal decided under Rule 60(b), FRCP,3 and a Texas decision4 is In the misplaced. federal attorneys defendant’s responsible were Co., (5th Cir.1978). 3. Ford Motor F.2d 1332 Rozier v. Morrison, (Tex.App.1987).
4. Rathmell v.
For the given reasons I affirm the trial court’s dismissal of this suit.
WALLER, J., concurs. stating response plaintiff's interrogato- 5. A month after in its written ry report,” attorney it could locate "no such "an in-house report] [defendant] involved this case discovered but failed to [the response interrogato- disclose it or to amend its inaccurate to [the] ry. ..." at 1341-1342. Rozier 6. Rathmell at 14.