Opinion ID: 2377309
Heading Depth: 1
Heading Rank: 2

Heading: laufer's defense to westminster's claim

Text: Both parties agree that the only type of fraud that may justify non-enforcement of an otherwise valid judgment of any court of competent jurisdiction, including a foreign court, is extrinsic fraud. [10] This principle was established more than a hundred years ago in United States v. Throckmorton, 98 U.S. (8 Otto) 61, 25 L.Ed. 93 (1878). The United States filed suit in Throckmorton to set aside two judgments on the ground that they had both been obtained by fraud. The Supreme Court, in affirming the dismissal of the suit, held that many rights originally founded in fraud become . . . no longer open to inquiry in the usual and ordinary methods. Of this class are judgments and decrees of a court deciding between parties before the court and subject to its jurisdiction, in a trial which has presented the claims of the parties, and where they have received the consideration of the court. Id. at 65. After giving several examples of the types of fraud which would justify setting aside a judgment, all of them involving fraud or deception in the conduct of the litigation itself, rather than fraud affecting the merits of the underlying claim, id. at 65-66, the Court announced the general rule which has been followed in countless cases ever since: [T]he acts for which a court of equity will on account of fraud set aside or annul a judgment or decree, between the same parties, rendered by a court of competent jurisdiction, have relation to frauds, extrinsic or collateral, to the matter tried by the first court, and not to a fraud in the matter on which the decree was rendered. Id. at 68 (emphasis added); accord, e.g., Berman v. Diamond, 90 U.S.App.D.C. 327, 328, 196 F.2d 590, 591 (1952) (distinguishing between fraud in the transaction upon which the New York action was based and fraud practiced upon the New York court in the judicial process). Laufer asserts that Westminster led him to believe that IMC was an experienced, financially stable, internationally renowned operator and owner of luxury hotels, which was not true, and that because of these misrepresentations he was prevented from fully arguing and defending his case on the merits in the English court. Thus, he argues, this is a case of extrinsic fraud because there was no real contest [11] in the Queen's Bench proceeding. Judge Kessler held, however, and we agree, that the fraud which Laufer alleged as a defense below was intrinsic fraud, because he asserted only that Westminster had fraudulently withheld certain information on which he could have relied to defend against Westminster's action on the contract. Laufer's claim that Westminster `withheld' facts amounts to nothing more than a complaint that [Westminster] did not help [him] prove [his] case, and this certainly does not amount to `extrinsic' fraud by any of the traditional definitions. Goodwin v. Home Buying Investment Co., 352 F.Supp. 413, 415 (D.D.C.1973) (citation omitted). In litigation one of [the constraints on the parties] is that the adversaries may not resort to fraud; but that . . . is a conclusion rather than a standard. It would be psychologically unrealistic, given the adversary setting, to call a failure to go out of one's way to produce damaging documents a fraud on opposing counsel and so, perhaps, on the court. USM Corp. v. SPS Technologies, Inc., 694 F.2d 505, 509 (7th Cir.1982), cert. denied, 462 U.S. 1107, 103 S.Ct. 2455, 77 L.Ed.2d 1334 (1983). We hold that the English judgment must be enforced, despite Laufer's allegations of fraud, because the fraud alleged was an intrinsic fraud in the transaction upon which the English action was based, not a fraud practiced upon the English court in the judicial process. Berman v. Diamond, supra . Public policy as announced in the Throckmorton case, supra, demands that there be an end to litigation and decrees that a final judgment shall not be set aside for intrinsic fraud. Dowdy v. Hawfield, 88 U.S.App.D.C. 241, 242, 189 F.2d 637, 638, cert. denied, 342 U.S. 830, 72 S.Ct. 54, 96 L.Ed. 628 (1951); [12] accord, Novak v. Novak, 212 A.2d 341, 342 (D.C.1965).