### IN THE COURT OF APP EALS OF TENNESS EE AT JAC KSON Fe br ua ry 17, 200 4 S es sio n

KATH RYN C. BLACK v. STE VAN L. BLACK

An Appeal f

romthe Chancer y Court for Shelby Cou nty No. CH-03-0315- 3 D. J. Alissand ratos, Chancellor

No. W2003-01648-C OA-R3-C V - F iled Jul y 13, 2004

This is an independe nt a ction for fraud and coer cion based on a marital dissolution agr eeme nt. On September 13, 2000, the parties executed a marital dissoluti on ag ree ment, and they wer e divorc ed by final dec ree enter ed in circ uit court ninety day s later on De cembe r 12, 2000. I n Fe bruary 2003, the wi fe br ou g ht this ind e pe nd e nt a c tio n in the c ha nc e ry c ou rt be low fo r d a ma g e s f

or fr a ud , d e c e it, and coe rcion. She a lleg ed that the husba nd had coe rce d her into sig ning the m ar i tal dissoluti on ag ree ment by

the use of thr eats, ha d preve nted her from obtai n i n g t h e bene fit of counse l, and had misrepre sented the va lue of his marital a ssets. The husband filed a motion to dismiss , alleg ing that the wife had fa iled to state a c laim upon which re lief could g rante d. The trial c ourt dismissed the wife’ s lawsuit, determinin g t h at the complaint was e ssentially an ac tion to set aside the divorce decr ee, a nd that the wife did not set out sufficient fa cts to support that claim. Fr om that decision, the wi fe no w a

pp e a ls. We a ff

ir m, fi nd ing that the a lle g a tio ns in the c omp la int c a nn ot b e the ba sis for a n independe nt action essentially to set aside the divorc e dec ree

. Tenn. R. App . P . 3 Appeal as of Right; Judgme nt of th e Chancer y Court is Aff irm ed

H OL L Y M. K I RBY , J.
, d e li v e r e d th e o p in io n o f th e Co u r t, in which J OE G. R I L EY , S P

. J ., and F R ANK L I N M UR C HI S ON , S P

. J ., joined.

Hal Ge rber

and Mar g are t M. Chesney , Memphis, Tennesse e, for the appe llant, Kathryn C. Blac k.

Daniel L . Tay lor, Memphis, Tennesse e, for the appe llee, Stevan L . Bla ck.

OP IN ION

On October 6, 1990, Plaintiff/Appellant Kathryn C. Blac k (“Wife” ) and D efe ndant/Appellee Ste va n L . B la c k ( “ Hu sb a nd ” ) were mar ri ed. On e c hil d w a s b orn o f the marria g e . H us ba ndis a lawy er w ith a prac tice that foc uses on domestic re lations law.

On September

13, 2000, Husband a nd Wife signed a Marital Dissolution Agr eeme nt (“MDA ”) setting forth the parties’ respe ctive rig hts to property and other matters arising out of theT he r ecor d on appeal does not i ncl ude a pet i t i on for di vor ce f i l ed by ei t her par t y , al t houg h t he M D A s t at es 1
tha t “H u sb a n d w ill b e fi ling a c o m p la int fo r a b so lute d ivo rc e a g a ins t W ife in th e c o u rts o f S h e lb y C o u n ty, T e n n e sse e .” A p p a re n tly, the M D A w a s the fi rs t d o c u m e n t f iled in the d ivo rc e p ro c e e d ing s.

-2- mari ta l r e la tio ns hip . O n the sa me da y , the MD A wa s file d in the c le rk ’s of fi c e of the She lby

Cou nty Circuit Court. On Novembe r 29, 2000, the parties executed an ame ndment to the MDA. Husband

1 draf ted both the MDA a nd the amendme nt thereto.

On Dec ember

12, 2000, ninety

day s after

the original MDA wa s signe d, a fina l decr ee of divorce was e ntere d by

the circ uit court. The p ar t i es did not have inde pendent c ounsel, but repr esente d themselves, pro se, du ri ng the div or c e pr oc e e din g s.

On Fe bruary

14, 2003, over two y ear s after the di vorce became final in the circuit court, Wife filed the instant la wsuit a g ainst Husband in the chanc ery court below. Wife’s complaint was e ntitled “Complaint For Da mag es F or Fraud, D ece it and C o er cion.” In the lawsuit, Wife alleg ed that Husband ha d eng ag ed in fra ud and coe rcion in i n d u ci n g her to sig n the MDA. Wife cla imed as fo llo ws :

A. On o r a b out Septe mber 8, 2000, Def endant prese nted Plaintiff w ith a proposed Ma

rital Dissolution Agre ement. When she told Def enda nt she wanted to ha ve the advice of counsel, Def endant then told her

if she did so,

a ndif sh e didno t si g n th e do c ume nt, he wo uld ha ve he r p ro se c ute d f or c hil d abuse a nd put in jail; t hat he would se e to i t t h at she would neve r see her children a g ain; that she would have to pay hundreds of thousands of dollars in leg al fe es; that she would re ceive nothing in the event of a divorc e and she

wo uldha ve to p a y

c hil d s up po rt

.

B

. Pla int if

f r e fu se d to sig n th e Ma

ri ta l D iss olu tio n Ag re e me nt, bu t r e ve rt e d to drinking and re mained under the influenc e of a lcohol to and including, on or about September

13, 2000, when she was drive n to the airport by Def endant to depart for a n Alcoholics Anony mous convention at which time De fenda nt

re pe a te d th e se thr e a ts, if sh e did no t sig n the Ma ri ta l D iss olu tio n A g re e me nt. As the [sic ] re su lt, du e to the cap acity a ndwi lli ng ne ss o f the De fe nd a nt t o

c arry ou t hi s th re a ts, sh e e xec ute d th e do c ume nt.

C. De fe nd a nt f

ra ud ule ntl y c on c e a le d h is t

ru e ne t w orth i n th a t:

1. He wi thh e ld the ne t e qu ity va lue of re a l e state ow ne d b y

him ;

2. He wi thh e ld the ide nti ty a ndva lue of

se c uriti e s o wn e d b y

him ;

3

. He wi t h h el d t h e v al u e o f h i s l aw p ra ct i ce as we l l as t h e f u rn i t u re , fu rn i s h i n gs and equipment c ontained in his office

. . . .-3-

I n sum, W ife a lleg ed that Husband preve nted her from retaining her own lawy er and obtained her sig na tur e on the MD A thr ou g h th e us e of thr e a ts and c oe rc ion , a ndthat H us ba ndfr a ud ule ntl y

conce aled his true ne t worth. Wife soug ht $1,000,000 in co m pensatory damag es, plus punitive damag es for

Husband’s w rong ful conduc t.

On April 16, 2003, Husband f iled a motion to dism iss for fa ilure to state a claim upon which relief could be g rante d, pursuant to Rule 12.02(6) of the Tennes s ee Rules of Civil P roce dure. H e arg ued that W ife’s complaint was in rea lity a mot ion to set aside the MDA w hich was inc orporated in the parties’ final dec ree of divorce , enter ed by the circuit court. On M ay 23, 2003, a hea ring was held on Husband’ s motion t o dismiss

. At the conclusion of the hearing, the chanc ellor g rante d the motion. The chance ry court held that Wife’s chanc ery lawsuit, “thoug h . . . word[ed] in t erms of a tort,

. . . rea lly eff

ectively is more of a setting aside [or] modify ing the divorce . . . .” (Tr ans. 2). The chanc ellor re asoned:

. . . When one looks at t his complaint and looks at t he fa cts that are alleg ed, one ha s to take a look at t he contex t of t he very nature of t he beast of t he cir cumstance s that bring s this about. The parties wer e in obviouslya rather a crimonious divorce . I n that context, [ Wife] m aintains that she was a re covering a lcoholic but still under the influence of alc ohol. That i n and of itself is not a circumstance by which she c an say I no w s e e k th e pr ote c tio n o f the Cou rt

. She alleg es in the lig ht most favorable to he r that in the middle of this knockdown, dra g -out divorce , [Husban d ] was taking a very strong position, t hat he wa s telling he r in essenc e to sign this document or I ’m g oing to g o afte r y ou with all the might of the law in such a ci rc u m s t ance re g arding the childre n of this marriag e. Terrible as that may

seem, it is nevertheless part of what a crim o n i o u s divorce s are ab o u t

. T o s ay t h a t t h at s o u n d s u n d ert h e t o rt o f c o er ci o n wh en h e s ai d ei t h ers i gn thi s, or if

y ou do n’ t si g n it , I ’m

g oin g fu ll b or e a g a ins t y ou , th a t is ha rd -b a ll

ne g oti a tio ns , p e rh a

ps ha rs h, bu t no t to rt iou s.

*** . . . [W ]hen the Court looks at the substance of the c omplaint and the nature of wha t

wa s g oin g on wh ic h is that th is s ou nd s in a do me sti c re la tio ns c a se to be g in wi th, it is a n acrimonious di vorce to beg in it, [ sic] is the nature of the be ast that people w ho have the closest re lationship i n the world they can ha ve as a

husband and w ife a nd they turn on eac h other, it g ets rea lly fierc e and nasty , it is the nature of the beast that
y ou are g oing to ha ve a c erta in amount of this kind of unpleasant discussion.

Thus, the cha ncery

court found that Wi fe’ s lawsuit ag ainst Husband was, in essence , an indepe ndent action t o s et aside the divorc e dec ree based on f raud. Tr eating it as such, the chancery court

co n cl u d ed that the complaint did not s et out fac ts that would support such a cla im. The cha ncery

c ou rt ob se rv e d th a t H us ba nd ’s thr e a ts a nd“ ha rd -b a ll n e g oti a tio ns ” we re ha rs h, bu t no t f

ra ud ule nt. Th e c ha nc e ry

c ou rt didno t a dd re ss Wi fe ’s c la im that H us ba ndha d mis re pr e se nte d th e va lue of his-4-

a sse ts. On June 19 , 2 00 3, the c ha nc e ry c ou rt e nte re d a n ord e r g ranti ng Hu sb a nd ’s mot ion to d ism iss

. F ro m th a t or de r, Wif

e no w a pp e a ls.

On app e a l, Wife arg ue s tha t the c ha nc e ry c ou rt e rr e d in det e rm ini ng that her la ws uit wa s, in

essenc e, an action to se t a side the divorce decr ee. She asserts tha t he r lawsuit is an i n d ep endent action base d on duress, c oerc ion, fraud, and deceit, and that she se eks only damag es and doe s not

re qu e st r e sc iss ion of

the pa rt ie s’ MD A. Wif

e arg ues fur th er tha t th e c ha nc e ry c ou rt e rr e d in dismiss ing he r complaint base d on its conclusion that the facts alleg ed did not state a c ause of action for f raud, be cause that conclusion was based on a lleg ed “f acts” outside the pleading s that were not in the rec ord. She observe s that the cha ncellor surmised that the parties ha d an ac rimonious, “knockdo wn , d ra g -o ut” div or c e , w he n th e re c or d o f the div or c e pr oc e e din g s in c ir c uit c ou rt sh ow e d o nly the fi lin g of a n MD A a nd the g ra nti ng of a div or c e nin e ty da y s the re a ft e r. Wif e arg ue s th a t, b e c a us e there was no e vidence in the rec ord to support the chanc ery court’s finding s in this reg ard, H usband’s motion to di smiss was improperly g rante d.

I n a n a pp e a l f ro m a g ra nt of a de fe nd a nt’ s mo tio n to dis mis s a c omp la int

pu rs ua nt t o Ru le 12.02(6), the a

ppellate c ourt must take all alleg ations of fact i n the pl aintiff’s complaint as true a nd

re vie w the tr ia l cou rt ’s le g a l c on c lus ion s de novo with no presumption of corr ectne ss. See Te nn . R. Ap p. P. 1 3( d) ; se e als o Winc he ste r v . L itt le , 996 S.W. 2d 81 8, 82 1- 22 (T e nn . Ct . A pp . 1 99 8) ; Ste in

v. Davidson Hotel Co. , 945 S.W .2d 714, 716 (Tenn. 1997) . A Rule 12.02(6) motion tests only the sufficie ncy of the complaint, not the streng th of a plaintiff’ s proof. Me rri man v. Smith
, 599 S.W .2d 548, 560 (Tenn. Ct. App. 1979). T he motion to dism iss should be denied unless it appear s that the plaintiff ca n prove no se t of fac ts in support of her c laim that would entitle he r to r elief. Winchester
, 996 S.W .2d at 821-22.

As we ha ve noted, Wife a rg ues t h at t h is lawsuit is an independent a ction for f raud a nd

coer cion, and not, as the chanc ery court concluded, essentially a R ule 60.02 motion to set aside the MDA. I n support, Wife relies on Mo ore v . M oo re , No. 01-A- 01-9708-CV-00444, 1998 WL 848091 (T en n

. C t . App. Dec . 8, 1998), and Tanner v. Tanner(Tenn. Ct. App. July31, 1997), c i te d in Mo ore , 1998 WL

848091, at *2. I n Mo ore , wh ile the pa rt ie s’ div or c e wa s p e nd ing in c ir c uit c ou rt , they settled the distribution of the value of the parties’ marital home. The rea fter, in Ma y 1996, the fi na l de c re e of div or c e wa s e nte re d in c ir c uit c ou rt

. I n Janu ary 19 97
, the hu sb a ndfi le d a la ws uit in chanc ery court a ccusing the wife of fr audulent misrepr esenta tion in the n eg otiation of the marital home settlement during the pende ncy of the c ircuit court divorce proce eding s. The husband alleg ed that the wife , who was a

rea l estate a g ent, and he r attorney intentionally misrepre sented to him the value of the re al estate , knowing that the value w as much hig her tha n t h e am ount on which they relied in dividing the property in the circuit court divorce proce eding s. Mo ore , 1998 WL 848091, at *1.

The wife in Mo ore filed a motion in chanc ery court to dismiss the husband’s cha ncery la ws uit , a sse rt ing that th e hu sb a ndwa s e sto pp e d f ro m r a isi ng the fr a ud iss ue in the c ha nc e ry c ou rt , be c a us e the fi na l de c re e e nte re d i n th e c ir c uit c ou rt wa s re s ju dic ata and bec ause the circ uit court had exclusive j u ri s d i cti on over the matter. In addition, the wife f iled a Rule 60.02 motion in the-5-

circ uit court in which t h e d i v o rc e dec ree was e ntere d, reque sting that the c ircuit court de termine whether a fr aud had be en perpetrated on the court. The wife asserted in the circ uit court motion that the husband’s c hance ry

court law suit was frivolous and sanct i o n ab l e u n d er Rule 11. Id. The

c ha nc e ry c ou rt de nie d th e wi fe ’s c ha nc e ry mot ion to d ism iss , but he ld in ab e y a nc e oth e r m a tte rs un til the circ uit court ruled on the Rule 60.02 motion pending in that court. Id.

The c ircuit court in Mo ore held a hearing on the wife ’s Rule 60.02 motion. At the

c on c lus ion of

the he ari ng , th e c ir c uit

c ou rt de te rm ine d that the iss ue inv olv ing hu sb a nd ’s int e re st i n the mari ta l ho me wa s res judicata and binding on the cha ncery court. The circ uit c ourt held further that t h e p arties’ settlement ag ree ment was not contra ctual, but that it beca me part of the divorce decr ee e ntere d by

the circ uit court. Fina lly , the circuit court a ssessed Rule 11 sanc tions ag ainst the hu sb a ndfo r f

ili ng the se pa

rate la ws uit in c ha nc e ry c ou rt , c on c lud ing that the c ha nc e ry c ou rt la ws uit was frivolous. Id. a t *1 -* 2. Th e hu sb a ndthe n a pp e a le d th e ru lin g of

the c ir c uit

c ou rt

. On appe al, the Mo ore court re verse d the dec ision of the circ uit court in its entirety . The appellate court re asoned tha t the husband’s chanc ery court a ction was not an a ction for r elief f rom the div or c e de c re e e nte re d in the c ir c uit c ou rt . Rather , it c on c lud e d, “ the c ha nc e ry c ou rt a c tio n is

an ac tion for damag es base d on fraud and dec eit.” Id. at * 2

. Qu o t i n g Tanner , the court held:

Th is is a s e p ar a te , in d e p e n d e n t, a n d d is ti n c t a c ti o n

. . . . Notwithstanding tha t the property settlement ag ree ment may have be e n in c or

po rate d into the div or c e de c re e , o ne op tio n a va ila ble to plaintiff to seek redre ss for the a lleg ed fr aud of de fenda nts is to s ue fo r d a ma g e s a t la w u nd e r the the ory of fr a uda ndde c e it.

Id. The Mo ore court added t hat “the ag ree ment to divide the marital home doe s retain its contra ctual status, despite being incorporated into the circ uit court’s order [ the final divorce decr ee].” Id. (citing Pe nla nd v . P

e nla nd , 521 S.W .2d 222 (Tenn. 1975) ). As to the R ule 11 sanc tions im posed on the husband by

the circ uit court, the appe llate court in Mo ore no te d th a t th e on ly a c tio n pend ing in circ uit court was the w ife’s Rule 60.02 motion, and that the husband ha d soug ht no relief f rom the circ uit court. Consequently
, the circ uit court’s imposition of sanctions ag ainst the husband for any action he may

have ta ken in cha ncery

court wa s “misplaced.” Id. Th e c ou rt he ld that th e c ir c uit

c ou rt ha d n o p ow e r t o ju dg e the me ri ts o f the hu sb a nd ’s c ha nc e ry la ws uit :

I t may be that Mr. M oore’ s chanc ery action is frivolous, we take no position on t he merits of that case , but the chanc ery court has the tools to deal with frivolous lawsuits. We sim ply rec og nize that Mr. Mo or e had the ri g ht t o f

ile the c hanc e ry

a c tio n a ndthat th e c ir c uit

c ou rt ha d n o p ow e r t o r

ule on its me ri ts or to imp os e sa nc tio ns fo r i ts fi l i n g.

Id. Thus, the Mo ore court de scribed the husband’s c hance ry lawsuit as an indepe ndent ac tion and,-6-

wi tho ut c omm e nti ng on wh e the r the c ha nc e ry c ou rt sh ou ld dis mis s it , s imp ly he ld that th e c ir c uit

c ou rt ha d n o auth or ity

to t ake a c tio n a g a ins t th e hu sb a ndfo r f ili ng a se pa rate c ha nc e ry

c omp la int

.

I n Ta nne r, sup ra , the husband told the wife he wanted a divorce

. Tanner
, at * 2. I n an

e ff ort to re a c h a n a g re e me nt r e g ard ing the te rm s of the div or c e , the wi fe me t wi th d e fe nd a nt L uc a s, g eneral co u n s el fo r the husband’ s business. Id. a t *2 -3 . D e fe nd a nt L uc a s p re pa

re d a pr op e rt y settlement ag ree ment and made arr ang ements for the wife to c onsult with anothe r attorne y , selec ted b y Lu c a s

. Id. at * 3

. After the wife ’s purporte dly

“indepe ndent” attorney

revie wed the pr oposed ag ree ment, the wife signe d it. Id. Th e pr op e rt y se ttl e me nt a g re e me nt p ro vid e d f or the wi fe to

rec eive a ssets worth approximately $300,000, plus a limony of $100,000 per y ear for the r est of her life. Id. at *4. The pr operty settlement ag ree ment was incor porate d into a decr ee of

divorce enter ed in Tipton Count y

in approxim ately

1979. Id.

Subsequently
, in May 1982, the wife discovere d that the husband had sold his business for in excess of $39 million i n cash, a nd had also obtaine d an employ ment ag ree ment with the purcha ser for a s al ar y o f $ 4 0 0,000 per y ear

. Id. at *5. Afte r lea rning of this, the wife hire d an attorne y and filed a lawsuit in Shelby County ag ainst her former husband and defenda nt Lucas, who was a lso the attorney for the e x -husband’ s company

. The wife allege d that her e x -husband a nd defe ndant L ucas kn e w the e x-hu sb a nd ’s true fi na nc ia l w orth at th e tim e of the pr op e rt y

se ttl e me nt and c on sp ir e d to

conce al it from her . She indicated that the pur portedly “indepe ndent” c ounsel, h i re d fo r h er by defe ndan t L ucas a nd paid by the ex-husband, was not in fa ct independe nt. She asserte d that they conspi red to de fraud her of her rightf

ul interest in the couple’ s marital prope rty

. Id. a t * 5

- 7

. T he wife did not file a n action in Tipton County , the court which g rante d the dec ree of divorce

.

I n the Shelby

Countylawsuit, the Tannerdefe ndants filed a motion to dismiss , alleg in g , inter ali a , failure to state a claim upon which relief can be g rante d and lack of jurisdiction. Id. at *1. The trial court g rante d the motion, without s pecif y ing its re asons for doing so. Id. at *2.

On appeal, t he appe llate court in Ta nne r c on sid e re d th e a lle g a tio ns a g a ins t de fe nd a nt L uc a s, the attorne y

for the husba nd’s business, as well as t he allegations ag ainst the ex -husband. Taking the wife ’s alleg ations ag ainst both defendants as true, the Tanner court found that t h e c o m p l aint
sta ted a c laim upon which re lief could be g rante d, and that the tria l court er red in dismissing the complaint on that g round. Id. at *9.

The Tannercourt then c onsidered the question of jurisdi ction. Both de fenda nts relied on divorce case law, stating that a divorc e ac tion providing for support of a spouse a nd children r emains in the court in which the divorce decr ee w as g rante d, i.e.
, the Tipton Countycourt. Id. at *10-11. The Tannercourt noted tha t defe ndant L ucas c erta inly

could not rely on this principle, since he was not a party

to the divorce

. Id. at *11. As to the ex-husband, the Tannercourt he ld:

. . . this defense is likewise without merit. [The wife’ s] action is not

a suit to void the divorce decr ee or to modify

the prope rty

settlement ag ree ment in any

way . [The wife] has filed a tort action base d upon-7- fraud and dec eit, not one ex con t rac tu, in that she contends that for over two y ear s defe ndants Tanne r and Lucas conspired to de ceive her

a s to the ne t worth of de fe nd a nt T a nn e r, a ndthr ou g h f ra ud a ndde c e it induced he r to si gn a p roperty settlement ag ree ment for a much smaller shar e of de fenda nt Tanner ’s prope rty than she would ha ve

acc epted had she know n the true f acts. This is a sepa

rate , ind e pe nd e nt a nddis tin c t a c tio n b a se d o n th e on g oin g c on du c t of the se two defe ndants prior to and le ading up to the divorce action.

Id. at *12. The Tannercourt obser ved that the wif e could sue for da mag es at law despite the fa ct that the prope rty

settlement ag ree ment was incor porate d into a divorce decr ee. Id.

I n this case, in re sponse, Husband a rg ues that the fa cts prese nted ar e di s t i n gu i s h able from Mo ore and Tanner , and that they are more a nalog ous to the situation in Sc hor r v . Sc hor

r , No. 02A01-9409-CH- 00217, 1996 WL 148613 (Tenn. Ct. App. Marc h 29, 1996). I n Sc hor r , the parties

w e r e b o t h r e p r e s e n t e d b y a t t o r n e ys i n t h e i r d i v o r c e , a n d t h e r e w a s e x t e n s i v e d i s c o v e r y . U l t i m a t e l y, the y e nte re d in to a

se ttl e me nt a g re e me nt, a ndin Febru ary 19 84 , a div or c e de c re e wa s e nte re d in chanc ery court, incor

porating that ag ree ment. Sc hor r , 1996 WL

148613, at *1.

L ater , the wife in Sc hor

r discovere d that the husband had misre prese nted his assets bef ore the pa rt ie s e nte re d in to the mari ta l di sso lut ion a g re e me nt. I n M arc h 1 98 7, the wi fe fi le d a la ws uit in the same c hance ry

court in which t h e d i v o rc e wa s g rante d, seeking damag es base d on the alleg ation that the husband had f raudule ntly

induced he r into signing the settlement ag ree ment by g iving he r fa lse information. The wife sought, among other things, “ a fa ir and e quitable division of marital prope rty

based upon the truthful disclosure and an accur ate total of t he parties’ assets as of the date of

the divorce . . . .” Id. The case procee ded to trial, and the wife was awa rded $613,000, plu s f e e s a nde xpe ns e s.
On appe al, the husband in Sc hor rclaimed that the wife’ s lawsuit was barr ed by the doctrine of re s ju dic ata , arg uing that the wife did not avail herse lf of the re medy provided in Rule 60.02 of
t h e T e n n e s s e e R u l e s o f

C i v i l P r o c e d u r e t o a s k

t h e d i v o r c e c o u r t t o s e ta s i d e t h e d i v o r c e d e c r e e

. In addition, the husband arg ued that there wer e no alleg ations of extrinsi c fraud that would allow the final decree to be set a side. The Sc hor r c ou rt state d a t the ou tse t that it vie we d th e wi fe ’s la ws uit

as esse ntially

an ac tion to set aside or modify the divorce decr ee based on fraud. The c ourt rea soned:

I n an ac tion to set aside a fina l judgment, a l i t i gant m ay pursue the options set forth in Tenn. R. Civ. P . 60.02 or, as p re s erved by the rule’s sa vings c lause, t he party may bring an indepe ndent ac tion. Jerkins v. McKinney , 5 33 S.W. 2d27 5, 28 0 ( Te nn . 1 97 6) . M s. Sc ho rr c ho se the la tte r a lte rn a tiv e to b ri ng the pres ent s uit
, presumab l y b ecause a

Rule 60 proce eding was time bar red. Gene rally , a party

may file an inde pendent a ction to set aside a-8- judgme nt only

under u n u s u a l a n d e xc e p ti o n a l circumstanc es, and the n only wher e no other

reme dy is available or

adequate.

Id. at *2. The c ourt went further a nd stated that, “[i] n an indepe ndent action to set aside a judg ment

on the basis of fraud, the complaining party must prove extrinsi c, as opposed to intr i n s i c, fr au d .” Th e on ly fr a ud a lle g e dly pe rp e tr a te d on the wi fe wa s th e hu sb a nd ’s mis re pr e se ntatio n o f h is a sse ts. The a ppellate c ourt conc luded that, bec ause the value of the husband’s a ssets was th e s u bject of extensive discovery

and investig ation during the divo rc e proc eeding s, the husband’s f raudule nt

conce alment of the true value of those assets wa s a fr aud that wa s i n t ri nsic to the litigation and, there fore , was not a basis on which the trial court could set aside or modify the final decre e. Id. at *6. I n other wor ds, since ther e wa s no proof of e x trinsic fraud, the court co n cl u ded that the tria l
court err ed in modifying the divorce decr ee. See Whitaker v. Whirlpool Corp. , 32 S.W .3d 222, 230 (T en n

. C t

. Ap p

. 2 0 0 0 ) ( q u o t i n g Sc hor r and stating that, “[i] n an i n d ep en d ent action to set aside a jud g me nt o n th e ba sis of

fr a ud , th e c omp la ini ng pa rt y mus t pr ov e e xtri ns ic a s o pp os e d to int ri ns ic fraud”).

Husband arg ues that the fac ts of the instant case are analog ous to the situation in Sc hor r , and that Wife’s ac tion is esse ntially an ac tion to set aside the final de cre e base d upon fraud. There fore
, Husband c laims, in order to maintain an inde pendent law suit ag ainst him, Wife must alleg e that he eng ag ed in fra

ud that was e x trinsic to the li t i g ation under the rule in Sc hor r . B e c a us e he r o nly alleg ations of fra

ud deal with Husba nds’ misrepre sentatio no f ma rit a l a s s e ts , H usband ar g ues, Wife’s claim is based on intrinsic fr aud and must be dismissed on its fa ce. I n response , Wife insist s that the ins ta nt c a se is a n in de pe nd e nt a c tio n, a s in Mo ore and Tanner , rathe r than a n action to set aside the MDA, like in Sc hor

r . Wife points out t hat the plaintiff in Sc hor rfiled her

action in th e divorc e court unde r the same docket number , and that she specifica lly soug ht modification of the settlement

a g ree me nt i n th a t c a se . I n c on tr a st, Wif e c la ims , th is i s a n in de pe nd e nt a c tio n, fi le d in a se pa rate court, see king damag es base d on coer cion, dec eit, and fr aud. Unde r Mo ore and Tanner
, sh e arg ue s, she is e ntitled to maintain her independe nt action, re g ardle ss of whethe r she a lleg es extrinsic fraud.

A divorce decr ee, incorporating by ref ere nce an MDA “a s though c opied her ein ver batim,” has the same re s ju dic ata effect a s would any other orde r ente red by

a court of compete nt jurisdiction. Grace

y v. G racey , 3 00 S.W. 2d60 6, 60 8 ( Te nn . 1 95 7) ; see Johns ton v. John ston , 465 A.2d 436, 443 (Md. 1983) ( citing nume rous ca ses which hold that issues resolved in the MDA a nd inc or po rate d in the div or c e de c re e c a nn ot b e c oll a te ra lly a tta c ke d) ; s e e als o E

. H. Schopler, Annotation, Dec ree a s R es Ju d i ca ta i n In dep en den t A ct i o n In vo l vi n g P roperty Settleme nt Agreeme nt , 32 A.L .R.2d 1145, § 4(a) (1953). Under g ener al principles of re s ju dic ata , a litiga nt is barre d from

re lit ig a tin g in a

su bs e qu e nt l a ws uit iss ue s tha t w e re or c ou ld h a ve be e n r a ise d in the fo rm e r l a ws uit

. See Bro wny ar

d v . Br owny ar d , N o. 02 A0 1- 98 03 -C H- 00 06 3, 19 99 WL 41 83 52 , at *1 3 (Ten n. Ct. App. J une 22, 1999).-9-

I n this case, the MD A betwe en these parties c ontains the following para g raph:

26. Husband a nd Wife have e ach r ead this Ag ree ment and ac knowledg e that they fu lly un de rs ta ndthe pr ov isi on s th e re of
, a nd that thi s is a

fair a ndre a so na

ble ag ree ment and is not the result of a ny fraud, duress, or any

undue influenc e exercised by

either pa rty here in upon the o t h er , or by any other pe rson or pe rs on s u po n e ith e r o f the pa rt ie s. Th e y

fu rthe r u nd e rs ta nda nda g re e that th is

A g r e e me n t c o n s ti tu te s th e e n ti r e u n d e r s tan d in g o f th e p ar ti e s , there being no repr esenta tion, promises, warr anties, cove nants, or undertakings othe r than those e x pressly set forth he rein.

Thus, the ag ree ment itself states that it was not the result of “fr aud, duress, or any undue influenc e,” and that it “constitutes the entire understanding of the parties.” Clearly , the issues reg arding fraud

a nddu re ss i n th e e xec uti on of the MD A, wh ic h a

rethe ba sis of

the ins ta nt l a ws uit , w e re e xpre ssl y

a dd re sse d in the fo rm e r div or c e pr oc e e din g

. Wif e ’s c omp la int in thi s law su it doe s n ot s pe c if ic a lly

re qu e st tha t th e MD A o r the div or c e de c re e e nte re d in cir c uit c ou rt be se t asi de . T he re lie f s ou g ht, howeve r, ca nnot be obt ained without, in essenc e, setti ng aside or modify ing the divorce decr ee, a nd litigating the issues of fr aud and duress would nece ssarily constitute a collateral attack on t he divorc e decr ee. Such a

collater al attac k is impermissibl e under principles of re s ju dic ata

.

Acc ording ly , construing the complaint in the light most favor able to Wife, we must conclude that it constitut es an inde pendent a ction to set aside the divorc e dec ree . Rule 60.02 of the Te nnessee Rul e s o f C ivi l Pr oc e du re pr ov ide s:

60.02. Mi stakes – Inadvertence – Excusabl e Ne glect – F raud, etc. – On motion and upon such terms a s are just, the court may relieve a party

or the pa rty ’s leg al re prese ntat i v e fr o m a fina l judgme nt, order or proce eding for the following rea sons: (1) mistake, inadvertence , surprise or excusable neg lect; (2) f raud ( whether here tofore denominated intrinsic or e x trinsic), misrepre sentation, or other misconduct of

an adve rse pa

rty ; (3) the judgme nt is void; (4) the jud gm en t h as bee n satisfied, re lease d or dischar g ed, or a prior jud g me nt u po n w hic h it is b a se d h a s b e e n r e ve rs e d o r o the rw ise

vacated, or it is no longe r equitable that a judg ment shoul d have prospec tive application; or (5) any other rea son justify ing r elief f rom the oper ation of the judg ment. The m o t i o n shall be made within a

rea sonable time, and f

or re asons (1 ) and (2) not more than one y ear afte r the judg ment, order or proc eeding was en t er ed or take n. A motion under this Rul e 60.02 does not a ffe ct the fin al i t y of a judgme nt or suspend its operation, but the court may en t er an orde r suspending the oper ation of the judgme nt upon such terms a s to bond and notice a s to it shall s ee m proper pe nding the hearing of such-10- motion. This ru le does not lim it th e power of a c ourt to entertain an independent action to relieve a party from a judgm ent, order or pr oc e e din g, or

to set as ide a ju dgment f or fr aud upo n the c our

t. Writs of error c oram nobis, bills of revie w and bills in the nature of a bil l of review are abolished, and the proce dure f or obtaining relief from a judg ment shall be by motion as prescribed in these rule s or by an indepe ndent ac tion.

Tenn. R. Civ. P. 60.02 (emphasis added) . As stated in S c hor r , “[ i] n an ac tion to set aside a fina l judgme nt, a litigant may

pursue the options set forth in T enn. R. Civ. P. 60.02 or, as pre serve d by
t h e rule ’s saving s clause, the party may bring an indepe ndent ac tion.” Sc hor r , 1996 WL

148613,

a t *2 . Wif

e ’s c ha nc e ry

la ws uit is a n in de pe nd e nt a c tio n a llo wa ble un de r the sa vin g s c laus e of Rul e 60.02. I t is we ll established that a party seeking to maintain such an indepe ndent ac tion “must prove extrinsi c, as oppose d to intrinsic, fraud.” Id. , a t *2 ; se e als o Simpkins v . Bl ank , No. M2002-02383- COA-R3-CV, 2003 WL 23093849 (Tenn. Ct. App. Dec . 30, 2003); Whit aker , 32 S.W .3d at 230-31.

Th e re a so nin g be hin d th e re qu ir e me nt o f e xtri ns ic fr a ud wa s e xpla ine d mo st r e c e ntl y by thi s Court in Simpkins v . Bl

ank , s upr a . I n Simpkins , the parties wer e divorced by final decree in J une 2000 in circuit court. I n J uly 2001, in the same c ircuit court, the husband filed a lawsuit seeking to,

a mon g oth e r t h i n g s , s e ta s i d e t h e p ar t i e s ’ M D A
, w h i c h h a db e e n i n c o rp o r a t e d i n t o t h e p ar t i e s’ divorce decr ee. T he husband a lleg ed that the wife fraudulently misrepre sented the va lue of one of her a ssets. Id. at *1. B eca use the pe tition was f

iled more than one y ear

afte r the e ntry

of the fina l decr ee of divorce , the court surmised that the hus band could not maintain a motion to set aside the judgme nt ba sed on intrinsic f raud under Rule 60.02(2). The ref ore, the Simpkins court re asoned, the hu sb a nd ’s pe tit ion wa s an ind e pe nd e nt ac tio n to set a sid e the de c re e un de r the sa vin g s c laus e of Rul e 60.02. Id. at *6. Simpkins re ite rate d the ru le that, i n s uc h a n a c tio n, “ the c omp la ini ng pa rt y mus t prove ex trinsic, as opposed to intrinsic, fraud.” Id. The court explained that, unde r the common-law rule, a party was required to prove intrinsi c fraud during the trial, in a mot ion for a new tria l, or on appea l. Rule 60.02(2) alleviated the harshne ss of the common-law rule by allowing the party

one y ear afte r the fina l judgment in which to bring c laims of intrinsic fraud. A claim of extrinsic fraud, on the other ha nd, could be broug ht more than one y ear afte r the fina l judgment. The rea son for the differ entiation lies in the basic diffe renc e betwe en t h e t wo t y pes of f raud. The Simpkins court explained:

Ex trinsic fraud conce rns conduct extrinsi c or collater al to the issues

decide d in a ca se. Sc hor

r , 1 9 9 6 W L

1 4 8 6 1 3
, at * 3 (q u o t i n g Thom as
v . D oc ke ry , 232 S.W .2d 594, 598 (Te n n . Ct. App. 1950)). “[E] x trinsic fraud involves dece ption as to matters not at issue in the

c a se wh ic h p re ve nte d th e de fr a ud e d p art y fr om r e c e iving a

fair hearing.” No le s v . Ea rha rt , 7 69 S.W .2d 868, 874 (Tenn. Ct. App. 1988). “[I ]nt ri n s i c fraud is fraud within the subject matter of the l i t i g a t i o n , s u c h a s f

o r g e d d o c u m e n t s p r o d u c e d a tr i a l o r p e r j u r y b y a-11- witn es s.” Sc hor

r , 1 9 9 6 W L

1 4 8 6 1 3
, at * 3 (c i t i n g Do c ke ry , 232 S.W .2d at 598).

Be cause intrinsic fraud involves the su b j ec t matter of the litigation,
t h e i n i t i al t ri al i s t h e c o m p l ai n an t ’s o p p o rt u n i t y t o ex p o s e th e w ro n g. As the Tenne ssee Court of Chanc ery Appea ls has stated:

[W ]he n [a complainant] has a trial, he must be prepa red to mee t and expose perjury then and ther e. He knows tha t a fa l s e claim or defe nse ca n be supported in no other w ay ; that the very object of the trial is, if possible, to ascertain t h e t ruth from the conflict of the evidence; and that, ne cessa rily , the
truthor fa lsi ty of the te sti mon y

mus t be de te rm ine d in deciding the issue.

No ll , 3 8 S. W. a t 29 1. Th e c omp la inant h a s th e op po rtun ity to c ro ss examine the fraudulent witness or pre sent contra dictory evidenc e of his ow n. Th ou g h thi s ma y e nd in ha rs h r e su lts , it

is b a la nc e d a g a ins t the pre vention of a g reater evil: “[e]ndless li tigation, in which nothing [i s] ever finally

determined.” Id. Ex trinsic fraud, h o wever, is such
t h a tt h e c o m p l a i n a n t w a s n o t a f f o r d e d a “ f a i r a n d h o n e s to p p o r t u n i t y” to present his evide nce in a proce eding

. New York Life Ins. C o. , 292 S.W .2d at 753. Ex amples of this type of f raud inc lude fa lse promises of compromise, ke eping a party ignor ant of the suit, or where an attorney prete nds to serve the interests of one party when he is serving the other or

sells out his client’s inter ests. No ll , 38 S.W . at 29 (c iting U. S. v. Throckm orton , 9 8 U

. S. 6 1
, 6 6 ( 1 8 7 8 ) )

. U n li k e p e r jur ed
tes ti mo n y , th is ty

p e o f f r a u d c a n n o t b e r e b u tt e d b y c o n tr a d ic to ry

e vidence or c ro ss e xami natio n. F or thi s r e a so n, e xtri ns ic fr a udis a permissible independe nt action to overr ule a f inal judgme nt.

Id. Th us , in tr ins ic fr a ud

inv olv e s f

ra udre la tin g to the su bje c t matte r o f the lit ig a tio n, a nde xtri ns ic fraud involves issues outside the subject matt er o f the ca se that could not have been r ebutted by
contra dictory

evidenc e or cross examination. The Simpkins court de termined that the w ife’s fraudulent misrepre sentation of her asset value involved intrinsic fraud, be ca u s e “the value of the property and the parties and its division was certainly at i ssue” in the di vorce proce eding .” Id. at *7 Consequently , “the only

method by

which [the husband] could bring an ac tion to set aside the final divorce decr ee w ould be pursuant to Rule 60.02 rather t h an i n an indepe ndent ac tion.” Id. Since the husband’s a ction was be y ond the one- y ear limit for s u ch a c laim, the trial court’ s dismis sal of his suit was affirme d.-12-

I n the ca se at bar, W ife’s complaint, when viewed in the l ight most favor able to her, includes only alleg ations of fra

ud rela ting to Husba nd’s misrepre sentations reg arding his assets. She alleg es that Husband fraudulently conce aled his true net worth by misrepre senting the net equity of value in rea l estate, the ide ntityand value of sec urities owned by him, and withheld the value of his law prac tice. There fore , as in Sc hor rand Simpkins , Husband’s alleg ed fraud in t he misrepr esenta tion of his net worth prior

to signing the MDA involves intrinsic, not extrinsi c, fr aud.

Wife’s relianc e on Mo ore and Tanner is mi s p la ced. Mo ore is clear ly inapposite; the appellate co u rt in that case stated expressly that it did not address the merits of the husba nd’s independe nt c hance ry lawsuit. The Mo ore court noted tha t, on its face, the chanc ery lawsuit did not

e x p r e s s l y s e e k

t o s e ta s i d e t h e d i v o r c e d e c r e e p r e v i o u s l y e n t e r e d b y t h e c i r c u i tc o u r t

. C o n s e q u e n t l y, the circ uit court h ad n o au t hority to sanction the husband f or filing the sepa

rate chanc ery

action. I nstead, it was the pla ce of the cha nce ry co u rt t o d ismiss the husband’s la wsuit if it proved to be frivo lou s.

Ta nne r is disti ng uishable fr om the instant case , beca use t he wife in Tanner

a lle g e d e xtri ns ic f r a u d

. T o b e s u r e , s h e c o n t e n d e d t h a tt h e h u s b a n d m i s r e p r e s e n t e d t h e v a l u e o f h i s a s s e t s

. In

a d d i t i o n , h o w e v e r , s h e a s s e r t e d t h a td e f e n d a n tLu c a s , t h e h u s b a n d ’ s p e r s o n a l a n d b u s i n e s s a t t o r n e y, conspired w ith the husband and misrepr esente d the value of the husband’s a ssets, and eve n hired a pu rp orte dly

“ ind e pe nd e nt” la wy e r, pa id b y the hu sb a nd , to “ re pr e se nt” the wi fe , a ll a s a n o ve ra ll

c on sp ir a c y

to p re ve nt h e r f

ro m disc ov e ri ng the hu sb a nd ’s true ne t w orth. Th is f a lls sq ua re ly wi thi n the desc ription of extrinsi c fr aud in Simpkins , “ wh e re a n a tto rn e y pr e te nd s h e is s e rv ing the int e re sts of one pa rty when he is servin g t h e o t h er or sells out his client’s interests.” Simpkins , 2 0 0 3 WL 23093849, at *6. Thus, Tanneris disti ng uishable.

As to Wi fe’ s alleg ations of fra ud in this case, then, a s in Simpkins , the only method by

which she could bring an ac tion to set a side the divorce decr ee would be pursuant to Rule 60.02, rathe r than an indepe ndent ac tion. Simpkins , a t *7 ; se e Sc hor r , 1996 WL

148613, at *17. (“ Even if we take

a s tr u e a ll o f th e a ll e g a ti o n s ma d e b y [Wi f e ] c o n c e r n in g [H u s b a n d ’ s ] f r a u d u le n t c o n c e a lment of

a sse ts,

. . . w e are no ne the le ss c on str a ine d to ho ld that th e frau d in th is ca se wa s c omp le te ly intertwined with the subjec t matter of the litig ation.”).

Unlike Mo ore , Tanner
, Sc hor r , or Simpkins , Wife also alleg es duress and coer cion. I n her

co m p l ai n t , W i fe as s er t s t h at Hu s b an d t o l d h eri f s h e h i re d an i n d ep en d en tat t o rn eyan d d i d n o ts i gn the MDA he had pre pare d, he would have her pr osecute d for c hild abuse and thrown in jail, that he would see t o i t that she would neve r see her c hildren ag ain, and that she would pay hundreds of tho us a nd s o f d oll ars a ndre c e ive no th ing in the div or c e . Si nc e Hu sb a ndis a pr omi ne nt d ome sti c relations attorney , Wife believed tha t he had the a bility to car

ry out these threats, so she si g ned the MDA.

Taking Wife’s alleg ations as true, w hich we must, it is arg uable that, a kin to extrinsi c fr aud, Husband’s alleg ed coer cion deprive d Wife of a “fa ir and honest opportunity ” to pr esent her e vidence in the divorce proce eding

. Se e Simpkins , 2003 WL 23093849, at *6. Unlike the situation prese nted-13-

in a c a se inv olv ing e xtri ns ic fr a ud , h ow e ve r, Wif e wa s not ig no rant of Hu sb a nd ’s c on du c t at th e tim e she sig ned the MDA , and conse quently it is not unfair to s u b

j ec t her to the limits of Rule 60.02. F u r t h e r m o r e , t h e t h r e a t s a l l e g e d i n W i f e ’ s c o m p l a i n t , t h o u g h h ar s h i n d e e d
, m a y b e c o n s tru e d b y a trial court a s classic “ hardba ll” settlement neg otiations, that is, informing the opposing party of the dire c onsequenc es that could re sult from declining to se ttle the dispute. See Wright Med. Tech., Inc.

v . G ris oni , No. W2000-01302-COA-R7-CV, 2001 WL 1683754, at *21 (Te nn. Ct. App. D ec. 18, 2001) (“This is a n ug ly but una voidable conseque nce of settlement neg otiations; ea ch side must try to convince the other than ref using to rele nt to its settl ement dema nd will result in consequenc es that

are worse tha n g iving in to the settlement dema nd.”)*6. Wife ha s not cited, nor have we f ound, a

case allowing an indepe ndent ac tion to set aside a divorc e dec ree to proce ed b as ed on dure ss or

coer cion. Moreove r, we are mindful of t he concern expressed in Simpkins , th a t w e mus t w or k to preve nt a “g reater evil,” that is, “ [e] ndless litigation in w hich nothing [is] ever finally determined.” Simpkins , 2 0 0 3 W L 2 3 0 9 3 8 4 9
, at * 6 (q u o t i n g Noll v. Chatt anooga Co.
, 38 S.W . 287, 291 (Tenn. Ct. App. 1896)). I n l i gh t o f all of these consider ations, while we do not hold that there are no circ umstances unde r which a lleg ations of dure ss or coer cion could be the basis for an independe nt action, under

the circ umstances of

this case, Wife’s a lleg atio n s ca n n o t be the ba sis for an independe nt action to set aside the f inal decr ee of

divorce

. Consequently , taking Wife’s alleg ations as true in their entirety
, we must conclude that the chanc ery court did not err

in dismi ssing Wife’s la wsuit. Under the fac ts of this case, the only

method by which Wife ca n challeng e the divorc e dec ree on the basis of Husba n d ’s conduct would be by filing a motion pursuant to Rul e 60.02, quoted a bove, in the court in which the divorce decr ee w as

e nte re d. Sin c e mor e tha n a y e ar ha s pas se d sinc e e ntry of the fi na l divo rc e de c re e , Wif e ob vio us ly
cannot se ek to have the decr ee set aside for rea sons (1) or ( 2) under the limitations set out in the rule. This does not, howeve r, pre clude Wife fr om seeking relief under reason ( 5), sometimes termed the “catchall” r eason. We e x pressly take no position on the merits of such a motion.

Th e de c isi on of

the trial cou rt is a ff

ir me d. Cos ts a

re to b e ta xedto A pp e lla nt K a thry n C. B l a c k
, a n d h e r

s u r e t y, f o r w h i c h e x e c u t i o n m a y i s s u e , i f n e c e s s ar y.

___________________________________ HOLL Y M. KI RBY, JUDGE