Opinion ID: 1401738
Heading Depth: 1
Heading Rank: 7

Heading: intrinsic fraud will support the vacation of a judgment where relief from the judgment is sought in the manner and within the time specified by statute

Text: ¶ 23 Defendants next argue this court's extant jurisprudence requires that relief from a judgment under the provisions of § 1031(4) be predicated upon fraud which is extrinsic or which amounts to fraud on the court. Intrinsic fraud, they assert, will not support the vacation of a judgment where relief is sought under the provisions of § 1031. Defendants maintain that the trial court erred in granting Patel's vacation quest because her petition to vacate alleges acts of intrinsic fraud only. We disagree. Defendants are incorrect in their contention that a § 1031 vacation quest must rest upon extrinsic fraud. To the contrary, relief from a judgment in a statutory proceeding brought pursuant to § 1031 may be predicated upon intrinsic as well as extrinsic fraud. Only where vacation is sought in an independent action pressed after the lapse of the statutory period for bringing a § 1031 proceeding is the petitioner circumscribed by the extrinsic-fraud requirement. ¶ 24 The distinction between intrinsic and extrinsic fraud in proceedings to set aside a judgment for fraud is usually traced back to the case of United States v. Throckmorton, [24] a nineteenth-century decision by the United States Supreme Court. In that case, an independent action in equity, the Court refused to set aside a judgment obtained more than twenty years earlier on allegedly perjured testimony and falsified evidence. [25] In Throckmorton the Court provided an extensive analysis of the then-extant English and American authorities on the subject of setting aside judgments for fraud and arrived at what has become the classic description of the two types of fraud. [26] When the Federal Rules of Civil Procedure were amended in 1946, the Throckmorton limitation was explicitly rejected in federal vacation proceedings initiated within the time limit provided by the rule for seeking relief by motion. [27] Its viability in vacation proceedings initiated under the federal rules by an independent action remains an area of controversy in federal civil procedure. [28] ¶ 25 This court has adopted the essence of the Throckmorton definitions of extrinsic and intrinsic fraud. We have defined extrinsic fraud as (a) any fraudulent conduct of a successful party, (b) perpetrated outside of an actual adversary trial or process and (c) practiced directly and affirmatively on the defeated party, (d) whereby he was prevented from presenting fully and fairly his side of the case. [29] Examples of extrinsic fraud include false representations that the defeated party is merely a nominal party against whom no relief is sought, false promises of compromise, concealment of suit, kidnapping of witnesses, and similar conduct. [30] We have defined intrinsic fraud as: . . . 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. If during the trial the successful party urges forged instruments, or perjured testimony or fails to introduce witnesses of whom he has knowledge and whose testimony would help his adversary and impair his own case, he is guilty of fraud; but it is intrinsic fraud, for relief from which application must be made to the court having jurisdiction of the issues joined and tried. [31] ¶ 26 While the definitions are fairly simple and straightforward, their application has often been somewhat hazy, leaving the erroneous impression that vacation proceedings brought under § 1031 are restricted to extrinsic fraud. Defendants cite a number of cases in support of their contention that intrinsic fraud will not support relief from a judgment under the provisions of § 1031(4). In Chapman v. Chapman, [32] a former wife sought, nearly fifteen years after a divorce had been granted, the vacation of the property settlement provisions of a divorce decree on the ground of fraud. The trial court sustained a demurrer to her petition and this court affirmed, holding that the husband's alleged concealment of spousal assets did not rise above intrinsic fraud. Defendants mistakenly interpret this case as an application of the extrinsic fraud rule to a § 1031 proceeding. It was not. While we did in fact apply the extrinsic fraud rule, we did so only because the petitioner had failed to file her petition within the time limit provided for a § 1031 proceeding. Chapman was an independent suit in equity, not a § 1031 proceeding, the time for which had expired two years after the divorce decree had been rendered. We noted in Chapman, An independent suit in equity . . . will not lie for relief from intrinsic fraud but only from extrinsic fraud. Relief from the former must be by direct attack in the same case in which fraud was committed . . . (emphasis added). [33] ¶ 27 Defendants also cite In re Forfeiture of a 1974 Mercury Cougar, [34] in which the court recited the extrinsic fraud rule in a case brought under the provisions of § 1031, but then decided the case on a different basis. The Ponca City police had seized a 1974 Mercury Cougar owned by petitioners, charging that the car was being used unlawfully to transport marijuana. The car was subject to a purchase money security interest held by Bank. No notice of forfeiture was given to Bank as required by statute and Bank was not represented at the forfeiture hearing. A forfeiture order was issued, following which Bank released its lien. Petitioners sought to vacate the forfeiture order under the provisions of § 1031(4) on the grounds of constructive fraud for failure of the State to provide the requisite statutory notice to Bank. The trial court sustained the State's demurrer. On appeal, this court recited the extrinsic fraud rule, but it is readily apparent that it was not the basis of the court's decision. The opinion states that the existence of the lien was simply irrelevant; it would not have been a defense to the forfeiture action. The opinion clearly rests on the court's view that no fraud was involved. [35] Any reference in that case to the extrinsic fraud rule was purely gratuitous. ¶ 28 Other cases cited by defendants are also distinguishable. Byrd v. Marlin, [36] an action to set aside a judgment and cancel certain conveyances, was not brought in the same case and same court in which the judgment sought to be vacated was rendered. It was an independent proceeding brought on grounds authorized by § 1031(4), but not technically a § 1031 proceeding. The court discussed the extrinsic fraud rule, but appears to have decided the case on the basis of unconscionable conduct on the part of a trustee toward the cestui que trust. ¶ 29 In Pippin v. Jones, [37] a divorce decree had determined Mr. Pippin to be the father of a child of the marriage. Sometime later, Mr Pippin brought a § 1031 proceeding, claiming fraud in the finding of paternity in the divorce action. This proceeding resulted in an agreed order that he was not the child's father. Still later, the ex-wife brought a paternity action against another man. The trial court in that paternity action found that the agreed order establishing Mr. Pippin's non-paternity was void for failure to comply with § 1031. On appeal, the appellate court, after reciting the extrinsic fraud rule, affirmed the trial court's order, holding that Mr. Pippin had never alleged in his § 1031 proceeding that any fraud had been practiced on him regarding his paternity and had therefore never properly invoked § 1031. [38] Hence, the Pippin decision had nothing to do with the distinction between intrinsic and extrinsic fraud. ¶ 30 Two other appellate decisions cited by defendants appear at first blush to support their contention that only extrinsic fraud will support the vacation of a judgment, but each of these contains a qualification that in essence consumes the rule it purports to invoke. In Copeland v. Anderson, [39] an ex-wife brought a proceeding to modify a property settlement in a divorce action on the ground of fraud. Holding that the ex-husband's motion to dismiss was correctly granted, the Court of Civil Appeals stated that a § 1031 proceeding is restricted to a narrow range of malfeasance extrinsic and collateral to the issues tried . . . . Allegations that a judgment was obtained on evidence known by plaintiff to be false are not sufficient to permit disturbance of the judgment when such party was not prevented from fully and fairly presenting his side of the case. [40] The appellate court then discussed at some length the fact that the petitioner in Copeland had reason to be suspicious of her husband's actions even before the divorce action was filed and that she apparently could have, and should have, garnered the evidence in advance of trial and presented it in court. [41] The court's focus on the petitioner's suspicions prior to the original trial, when viewed in light of the court's statement quoted above that false evidence will not support disturbance of a judgment when such party was not prevented from fully and fairly presenting his side of the case, suggests that the real question for the court was not whether the fraud was extrinsic or intrinsic, but whether the judgment had been secured under circumstances requiring relief. ¶ 31 A similar case is Sadberry v. Hope. [42] Again the court appears to be relying on the rigid extrinsic-intrinsic rule, but as in Copeland posits the means of escape from the constraint on its discretion that the inflexible application of that rule imposes. In Sadberry, the plaintiff sought a writ of prohibition to restrain the trial judge from conducting a hearing on a guardian's petition to vacate a judgment imposing a surcharge on her. In holding that the writ of prohibition should be granted, the court recited the general rule that fraud sufficient to support the vacation of a judgment must be extrinsic and collateral to the issues tried and must prevent the complaining party from fairly exhibiting his case in court. [43] The court went on to explain that the matters about which the guardian claimed fraud were all known to her at the time of trial and were presented at the trial or could have been presented had the guardian chosen to present them. Further, the court noted that the guardian had failed to show how the plaintiffs or their counsel had prevented her from presenting fully and fairly her side of the case. Both Copeland and Sadberry, which appear to reject intrinsic fraud as a ground for vacating a judgment, actually turn less on that distinction and more on the question of whether the complaining party had a fair adversary proceeding, regardless of the category into which the allegations of fraud happened to fall. ¶ 32 The provisions of § 1031(4) make no distinction between intrinsic and extrinsic fraud. To the extent that Copeland, Sadberry, or any other decisions of this court have applied the intrinsic/extrinsic dichotomy to vacation proceedings under § 1031(4) brought in the same court in which the judgment sought to be vacated was rendered, their expressions are disapproved and withdrawn. More recent decisions have made clear that the intrinsic/extrinsic polarity is not applicable to vacation proceedings brought pursuant to § 1031. [44] Patel's petition is not insufficient because the acts alleged to be fraudulent may be categorized as intrinsic fraud. [45]