Court Opinion

ID: 9626204
Source: CourtListenerOpinion
Date Created: 2023-08-22 08:05:11.857775+00
Date Added: 2024-06-11T18:06:23.218575
License: Public Domain

ROSSMAN, J.,
dissenting.
Surely, justice cannot be so blind. This is no way to create a father. Plaintiff was fraudulently induced by mother’s outright lie to enter into a stipulated judgment of paternity. Blood tests have now conclusively proved that he cannot possibly be the child’s biological father. Nevertheless, the majority, in the name of finality of judgments, concludes that plaintiff is not entitled to relief from this manifest injustice. Because I believe that the majority misinterpets the law in this area and completely ignores very significant public policies, I must dissent.
As the majority notes, judgments cannot be attacked collaterally, except for fraud, duress or some equally egregious reason. Eagen and Eagen, 292 Or 492, 496, 640 P2d 1019 (1982). It also is necessary to establish that one was not negligent in the manner in which the original judgment was procured. There is no claim of any duress in this case, so in order for plaintiff to prevail he must show that the judgment was induced by fraud or some other egregious circumstances and that he was not himself negligent.
*740In order to set aside a judgment for fraud, one must plead and prove fraud extrinsic to the proceedings. The majority characterizes mother’s false testimony as intrinsic fraud and therefore concludes that it does not provide a basis for setting aside the judgment. I believe that the majority drastically oversimplifies the analysis. In so doing, it looks outside our jurisdiction for guidance and completely ignores Oregon case law which has a direct bearing on this matter. Admittedly, plaintiff must prove extrinsic fraud. However, the distinction between extrinsic and intrinsic fraud is not nearly so clear as the majority suggests. In general, extrinsic fraud pertains, not to the judgment itself, but to the manner in which it was procured. Intrinsic fraud, in contrast, relates to an issue that was involved in the original action. Contrary to what the majority contends, in Oregon perjury can be either extrinsic or intrinsic fraud. As was stated in Larson v. Heintz Const. Co. et al, 219 Or 25, 70, 345 P2d 835 (1959):
“* * * [E]quity will not set aside a judgment for intrinsic perjury, * * * but [it] may where the perjury is extrinsic and prevents a party from getting all the facts. * * *”
See also O.-W. R. & N. Co. v. Reid, 155 Or 602, 604, 65 P2d 664 (1937).
I would go a step further and suggest that, depending on the circumstances, perjury can possess elements of both extrinsic or intrinsic fraud. Defendant’s fraudulent testimony clearly related to the central issue of paternity and, therefore, was intrinsic. On the other hand, that same testimony prevented plaintiff from getting all the facts, induced him to stipulate to paternity and thereby foreclosed his opportunity for a trial on the merits. Given the sensitive nature of this case, I would conclude that the alleged fraud was sufficiently extrinsic to provide a basis for vacating the judgment.
As noted earlier, even if plaintiff establishes sufficient fraud or egregious conduct, he must still show a lack of negligence on his own part. It is the state’s position that plaintiff failed to plead specific facts showing that his failure to request blood tests at the time of the original suit was unmixed with his own negligence. See Dixon v. Simpson et al., 130 Or 211, 279 P 939 (1929); Bowsman v. Anderson, 62 Or 431, 123 P 1092, 125 P 270 (1912). The state urges that plaintiffs belief in mother’s deposition testimony does not *741excuse his neglect in obtaining verifying blood tests at the time of the initial suit. See ORS 109.252. Essentially, the state seems to be asking us to hold that plaintiff was negligent as a matter of law, because he believed in the truthfulness of the state’s principal witness. In retrospect, it is obvious that plaintiff misjudged mother. However, his failure to anticipate that she, a woman he had known intimately, would use deceit to entrap him can hardly be called negligent as a matter of law.
Moreover, plaintiff was represented by an attorney, who I assume participated in the deposition and the stipulation. I am not prepared to hold that plaintiff was negligent for not getting a blood test when he presumably entered into the stipulation on the advice of counsel. Finally, although plaintiff concedes that his alleged negligence may become a legitimate defense at trial, he suggests that he is, at least at this stage of pleading, entitled to all reasonable inferences which may be drawn from the pleadings.
In any event, plaintiff asserts another theory which perhaps even more clearly entitles him to the relief he seeks. He contends that we should analyze this case under a less demanding test involving contract principles. His premise is that the stipulation gave rise to a consent judgment, which is in the nature of a contract. See Nieminen v. Pitzer, 281 Or 53, 573 P2d 1227 (1978). Granted, plaintiff did not apprise the trial judge of this theory and, normally, a case on appeal must be argued on the same theory on which it was presented to the court below. However, a theory raised for the first time on appeal may be considered when the record discloses that an “error is manifest and that the ends of justice will not otherwise be satisfied.” State v. Hickmann, 273 Or 358, 360, 540 P2d 1406 (1975).
Many important policies are at issue in this case. On the one hand is the importance of the finality of judgments. That policy conserves judicial resources and preserves respect for the courts by preventing the relitigation, in a subsequent proceeding, of a controversy once determined. It also serves to protect parties from the burdens of protracted litigation. See Erwin v. City of Portland, 23 Or App 734, 738, 543 P2d 695 (1975). On the other hand, public policy demands that the utmost care be taken whenever we endeavor to determine familial relationships and responsibilities. We are faced here *742with a manifest injustice that could well interfere with the child’s efforts, in the future, to establish a legal relationship with his biological father. Similarly, plaintiff has an interest in being relieved of an obligation which he was duped into assuming. Finally, justice is not well served by allowing defendants to continue benefiting from mother’s wrongdoing. Considering the egregious nature of this case, and all of the policies at stake, we should conclude that we are able to reach plaintiffs new arguments.
As plaintiff correctly notes, a judgment or decree entered by the consent of the parties, such as here, is in the nature of a contract and can only be set set aside on grounds adequate to justify the rescission of a contract.1 Nieminen v. Pitzer, supra, 281 Or at 57; State ex rel Adult & Family Ser. v. Hansen, 54 Or App 47, 50, 634 P2d 256 (1981). Fraud can provide a proper basis for rescission. The elements of actionable fraud allowing an avoidance of a contract consist of (1) a representation, (2) its falsity, (3) its materiality, (4) the speaker’s knowledge of its falsity or ignorance of its truth, (5) the intent that it be acted on, (6) the injured party’s ignorance of its falsity, (7) reliance on the truth of the representation and (8) right to rely on its truth. Gardner v. Meiling, 280 Or 665, 671, 572 P2d 1012 (1977). The state concedes that the intrinsic/extrinsic fraud distinction is not relevant in contract analysis. One must merely allege and prove a causal connection between the fraud and the bargain. Gardner v. Meiling, supra. Considering plaintiffs complaint in its most favorable light, we should conclude that he has alleged a sufficient causal connection between mother’s alleged perjury and the consent judgment.
The state still contends, even under the contract theory, that plaintiffs failure to obtain blood tests precludes his getting the relief he seeks in this case. It argues that, because of his neglect, he had no right to rely on mother’s representations. Although there are Oregon cases which hold that a party’s reliance on a representation must be reasonable, *743Coy v. Starling, 53 Or App 76, 80, 630 P2d 1323 (1981), the Supreme Court has consistently held that one who has been induced to enter a contract by an intentional misrepresentation may rescind the contract, even though his reliance may have been negligent. Bodenhamer v. Patterson, 278 Or 367, 374, 563 P2d 1212 (1977). “[I]t is better to encourage negligence in the foolish than fraud in the deceitful.” Hansen v. Holmberg, 176 Or 173, 184, 156 P2d 571 (1945). Therefore, the nature of plaintiffs reliance is not a proper issue in this case.
Moreover, defendants may well lack standing to raise negligent reliance as a defense.
«* * * Where one assumes to have knowledge of a subject of which the other is ignorant and knowingly makes false representations concerning it upon which the other relies, the party who thus induced belief will not be heard to say that the party who relied upon him was guilty of negligence.” Burgess v. Charles A. Wing Agency, 139 Or 614, 623, 11 P2d 811 (1932).
Mother alone knew the truth about her sexual relations during the period in question. With the exception of his own relations with mother, plaintiff was ignorant of the matter. Because mother’s representations induced plaintiffs belief that he was the father, she cannot now claim that his belief was unreasonable.
I would reverse and remand for trial.
Gillette, Young and Newman, J. J. join in this dissent.

The majority asserts that the judgment entered in this case is not in the nature of a contract, because the stipulation was not supported by consideration. Consideration in a consent decree or judgment is self-evident. The parties were spared the expense of having to prosecute or defend the original action to its conclusion. That resulted in a saving of time and money. Thus, each received a very tangible benefit as a direct result of the stipulation.