Opinion ID: 1255321
Heading Depth: 1
Heading Rank: 4

Heading: Intrinsic Fraud Plea False and Misleading Statements

Text: When an order is sought to be vacated for intrinsic fraud, the time for the claim's commencement is governed by § 1031(4). [16] Relief from intrinsic fraud must be sought by direct attack launched in the case in which the fraud was committed. [17] The period allowed is no longer than two years after the order's record entry. [18] Intrinsic fraud is `. .. any fraudulent conduct of the successful party which was practiced during the course of an actual adversary trial of the issues joined and which had no effect, directly and affirmatively, to mislead the defeated party to his injury after he announced that he was ready to proceed with the trial.' [19] The first act of fraud alleged by Jernigan consists of false and misleading statements to the trial court by counsel for FDIC and CSM when obtaining the order that substituted FDIC (as the sole plaintiff) for InterFirst and CSM. FDIC's substitution quest was based on its status as receiver for both entities. Some two and a half years later FDIC admitted this mistake by its motion to realign the parties. According to FDIC, while it had not been appointed receiver for CSM, it had assumed some of InterFirst's liabilities qua receiver for the bank, including whatever liability InterFirst and First Republic had incurred by the actions that were the subject of Jernigan's counterclaim. FDIC's erroneous statements in its August 16, 1988 motion to substitute do not rise beyond intrinsic fraud  i.e. that which is perpetrated within the course of adversary proceedings. The character of this alleged conduct may not be distinguished from any other act of fraud committed by a suitor locked in a forensic contest. Since FDIC's alleged act of fraud was of an intrinsic nature, Jernigan's May 7, 1991 § 1031(4) vacation quest, brought after the lapse of two years from the August 16, 1988 substitution order, clearly was time barred. [20]