Court Opinion

ID: 9450446
Source: CourtListenerOpinion
Date Created: 2023-08-04 16:48:14.690123+00
Date Added: 2024-06-11T17:32:19.623306
License: Public Domain

PICKETT, Circuit Judge
(dissenting).
As I understand the decision in this case, the question of merger of the property settlement agreement into the judgment controls. I am in agreement that the contract was merged into the judgment and became a part thereof. I do not agree, however, that this merger bars a separate action by Mrs. Finkbiner based upon fraud and deceit on the part of Mr. Finkbiner which brought about the contract, and eventually the judgment. Mrs. Finkbiner has the right to affirm the contract if it was still in existence and, if not, the . judgment, which deprived her of participation in property alleged to have been owned and undisclosed by Mr. Finkbiner when the property settlement was made. The action here does not seek to set aside the judgment, but is a tort action to recover damages for alleged fraud and deceit.
Hood v. Hood, 10 Cir., 335 F.2d 585 considers what appears to be the precise question here, although it was there held that under Kansas law there was no merger, still the principle of law applies regardless of the merger. In reference to this question, the court said at page 590:
“Moreover, the instant action is neither an action to set aside the property settlement agreement nor the decree of the court. On the contrary, it affirms the contract, and is a tort action for deceit seeking damages from Hood on account of the fraud practiced on Mrs. Hood by him. An action to recover damages for fraud inducing a contract is founded on tort and not on the contract and proceeds on the theory of affirmance of the contract fraudulently procured.
“It follows that the precise question here presented is whether the divorce decree is a bar to such an action. No issue was raised, presented, or decided in the divorce action as to whether Mrs. Hood was induced to enter into the contract and consent to its approval through fraud practiced upon her by Hood. Hence, the provision in the decree ‘that each of the parties be barred, foreclosed and excluded from any claim or demand against the other of the others [sic] property or estate, except as provided in such stipulations’ was not an adjudication of that issue. It was merely a recital in substance of a provision of the stipulation.”
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“And if such fraud was extrinsic or collateral fraud, Mrs. Hood was entitled to equitable relief, preclud*882íng Hood from setting up the judgment as a defense to her action for fraud.”
See, also, for example, Burch v. Hibernia Bank, 146 Cal.App.2d 422, 304 P.2d 212, cert. denied 353 U.S. 968, 77 S.Ct. 1050, 1 L.Ed.2d 914; Ellis v. Schwank, 37 Wash.2d 286, 223 P.2d 448; 7 Moore’s Federal Practice, ¶ 60.36.