By the number of motions to dismiss, filed under this guise of “fraud on the court”, you may be shocked to learn that fraud on the court is rare, and motions alleging fraud should be granted sparingly in only the most egregious of circumstances. This post discusses the procedure for the life of a motion to dismiss based on fraud, and also some key requirements for the success, or failure, of this type of motion.
As to the procedure:
(1) File the Motion: Obviously the motion breathes first life to this issue once composed and filed. However, after that there has been some confusion as to “what happens next”? (2) Set the Motion for an Evidentiary Hearing: Numerous cases have reversed an order of dismissal based on fraud where the trial court below failed to hold an evidentiary hearing or the record was otherwise insufficient. See Health First, Inc. v. Hynes, 114 So. 3d 995, 998 (Fla. 5th DCA 2012) (“Given the gravity of the conclusions in the order [of dismissal based on fraud] there will have to be an evidentiary hearing to sort out whether fraud or similar misconduct occurred.”); In re M.W., 181 So. 3d 1263, 1267 (Fla. 2d DCA 2015) (explaining that trial counsel’s representations to the court were “insufficient” to sustain a fraud on the court dismissal); Stephens v. Bay Med. Center, 839 So. 2d 858, 858 (Fla. 1st DCA 2003) (“The failure to allow plaintiff an opportunity to present additional evidence [at an evidentiary hearing] was error.”);Laussermair v. Laussermair, 55 So. 3d 705, 706-707 (Fla. 4th DCA 2011) (reversing an order dismissing a case for fraud where the trial court relied on deposition testimony, but no live testimony; finding that evidence short of in person testimony was insufficient to sustain the heavy burden of the defendant in proving fraud). But see Obregon v. Rosana Corp., 232 So. 3d 1100 (Fla. 3d DCA 2017) (finding that the issue of entitlement to an evidentiary hearing prior to dismissal for fraud on the court was not preserved for appellate review, where neither party requested an evidentiary hearing in the trial court below). Based on this authority it appears that the trial court must hold an evidentiary hearing, but that a party’s failure to request the same, and object to a denial of that right, could be considered a waiver of the issue on appeal.
(3) Burden of Proof: The party seeking dismissal has the burden of proving fraud by “clear and convincing evidence.” See Gilbert v. Eckerd Corp. of Fla., Inc., 34 So. 3d 773, 776 (Fla. 4th DCA 2010) (“It is the moving party’s burden to establish by clear and convincing evidence that the non- moving party has engaged in fraudulent conduct warranting dismissal.”); Suarez v. Benihana Nat’l of Fla. Corp., 88 So. 3d 349 (Fla. 3d DCA 2012) (explaining that the moving party bears the burden of proving fraud by clear and convincing evidence). Some authority goes so far as to suggest that this burden necessarily requires that the defendant (or party seeking dismissal) produce in person testimony in support of their claims; not just sworn deposition or interrogatory responses. See Laussermair, 55 So. 3d at 707. Accordingly, in the abundance of caution, the moving party should subpoena witnesses to testify at the hearing, in addition to any depositions, interrogatories, or certified medical records on which the moving party intends to rely to prove fraud.
(4) Written Order: You’ve had your hearing; now what? Can the court issue a standard short order? Is it permissible for the moving party to submit an agreed order? The answer is probably no to both questions. In Chacha v. Transport USA, Inc., the court granted a motion to dismiss based on fraud and made a very cursory written finding that clear and convincing evidence of fraud supported dismissal. 78 So. 3d 727, 730 (Fla. 4th DCA 2012). The appellate court reversed and remanded, for the lower court to make “express written findings sufficient to assist [the appellate court] in determining whether the trial court properly considered the proper mix of factors and carefully balanced the policy favoring adjudication on the merits with the competing policy to maintain the integrity of the judicial system.” Id. at 731. In finding remand appropriate, the appellate court stated, “We do not think it too great a task to require the trial court to make a written finding of the essential facts which supports the imposition of the most severe sanction [of dismissal]” and held that “an order granting a dismissal or default for fraud on the court must include express written findings demonstrating that the trial court has carefully balanced the equities and supporting the conclusion that the moving party has proven, clearly and convincingly, that the non-moving party implemented a deliberate scheme calculated to subvert the judicial process.” Id. It appears that the trial court must compose a written order, granting the motion, which specifically points to record evidence in support of a finding of fraud. The non-moving party should object to anything less. The moving party would likely also be wise to object to less for purposes of the appellate record.
Having established the process, what is the standard for dismissal? What conduct will support the most severe sanction of dismissal with prejudice of the Plaintiff’s cause of action? The answer is honestly unclear.
Although the standard itself is fairly straightforward, and is repeatedly written or quoted, the type of conduct sufficient to meet its dictates can be described as “all over the map”. In its most basic form the standard for dismissal is as follows: “The requisite fraud on the court occurs where it can be demonstrated, clearly and convincingly, that a party has sentiently set in motion some unconscionable scheme calculated to interfere with the judicial system’s ability impartially to adjudicate a matter by improperly influencing the trier of fact or unfairly hampering the presentation of the opposing party’s claim or defense.” Cox v. Burke, 706 So. 2d 43, 46 (Fla. 5th DCA 1998). In reviewing the case under this standard, the “court should consider a proper mix of factors and carefully balance a policy favoring adjudication on the merits with competing policies to maintain the integrity of the judicial system.” Id. “Because dismissal sounds the death knell of the lawsuit, courts must reserve such strong medicine for instances where the defaulting party’s misconduct is correspondingly egregious.” Id. Seems simple, right? Wrong.
Subsequent cases have further defined what constitutes “fraud” explaining that: “poor recollection, dissemblance, even lying, can be well managed through cross-examination” and does not amount to “fraud” that would support dismissal. See Bologna v. Schlanger, 995 So. 2d 526, 528 (Fla. 5th DCA 2008). See also JVA Enterprises, I, LLC v. Prentice, 48 So. 4d 109, 114 (Fla. 4th DCA 2010) (explaining that “fraud” that supports dismissal of an action must be more than poor recollection, dissemblance, or even lying, instead the conduct must be a scheme purposefully hatched to subvert the truth seeking function of the judicial system); Gehrmann v. Cty of Orlando, 962 So. 2d 1059, 1061 (Fla. 5th DCA 2007) (finding that fraud requires a clear and convincing showing that the non-moving party “committed knowing deception intended to prevent the defense from discovery essential to defending the claim). Unfortunately this new “definition” of “fraud” creates as many questions as it answers. If a blatant lie won’t amount to fraud, then what conduct does equate with the standard?
In interpreting this standard, courts have been understandably inconsistent; likely because all cases subject to dismissal for fraud must be carefully examined based on their specific facts. For instance, in Cox (which is one of the leading cases on fraud on the court) the Appellate court affirmed dismissal with prejudice based on fraud where the non-moving party gave multiple inconsistent answers in her discovery responses (including her actual legal name, whether she held a valid driver’s license and from what state, her social security number, and her prior injuries). 706 So. 2d at 46.
Since that holding, the Fifth DCA has receded from the broad grant of dismissal seemingly authorized by the decision, explaining that Cox is a case that should be “limited” to its very “unique” facts. See e.g., Ruiz v. Cty of Orlando, 859 So. 2d 574 (Fla. 5th DCA 2003) (“In Cox, we anticipated, although we apparently underestimated, the seductive power of [the remedy of dismissal for fraud]. . . . Cox was an extremely unusual fact pattern, wholly unlike the more conventional impeachment issues that have shown up in some more recent decisions.”); Amato v. Intindola, 854 So. 2d 812 (Fla. 4th DCA 2003)(emphasizing that the inconsistencies or falsities in the Cox case were pertinent to name, place of residence, social security number and other information that actually prevented the defendants from conducting or investigating their claim). However, that still begs the question of what conduct should be considered fraudulent and what false, misleading, or incomplete responses will amount to a “scheme” calculated to “subvert” the judicial process?
It seems that more current cases have limited the instances in which dismissal may be proper. For instance, in Laschke v. Reynolds Tobacco Co., the Second District reversed dismissal with prejudice in a case where the non-moving party had actually attempted to have her medical records changed, in an attempt to mislead and deter the moving party. 872 So. 2d 344 (Fla. 2d DCA 2004). It seems hard to image a case that could be subject to dismissal for fraud where volitional conduct by the non-moving party to actually alter medical records fell short of the standard of fraud on the court. Id. In Bob Montgomery Real Estate v. Djokic, the Court found that apparently forging a document attached to the complaint was not sufficient to warrant dismissal based on fraud. 858 So. 2d 381 (Fla. 4th DCA 2003). Although admittedly, in Bob Montgomery the issue was really one of proof rather than sufficiency of conduct. Id. Further, in Bologna, the trial court noted that “fraud on the court” has become a “strategy on the part of defense counsel” and cautioned against permitting a defendant to ask overly broad questions in discovery or depositions with no meaningful follow up and thereafter slapping the plaintiff with a motion to dismissed based on fraud. 955 So. 2d at 529.
However, even in light of these questions and the appellate court’s attempt to limit the application of this doctrine, numerous cases still find fraud where cross-examination and traditional discovery tools or sanctions could arguably remedy the inconsistencies in the non- moving party’s discovery responses. See e.g., Middleton v. Hager, 179 So. 3d 529 (Fla. 3d DCA 2015) (finding dismissal appropriate where the plaintiff failed to disclose prior vehicle accidents which resulted in treatment); Herman v. Intracoastal Cardiology Center, 121 So. 3d 583 (Fla. 4th DCA 2013) (affirming dismissal with prejudice where contents of the litigants diary showed that she lied on various occasions throughout the litigation).
The long and short is this: whether you are a moving, or a non-moving party, in the fraud dance the outcome of the motion to dismiss is largely dependent on the specific factual circumstances of your case. Having said that, if you are a moving party: you have the burden, which is high. A such, to support a claim of fraud, the moving party should produce adequate evidence that shows the intent of the non-moving party in making inconsistent, incomplete, or even false statements. It appears that this intent to defraud or intent to subvert the truth seeking function is the key factor in determining whether dismissal is appropriate. Under the standard and current trends, presumably mere “lack of memory” “inconsistencies” or “even lies” without this critical intent element would be considered short of fraud on the court. On the flip-side: the non-moving party should be
prepared to combat this evidence by showing lack of intent, mere inaccurate memory, innocent misunderstanding, or even (in the case of false statements) an innocent intention on the part of the non-moving party.