Chewning v. Ford Motor Co., 25627.

• Citation: 354 S.C. 72,579 S.E.2d 605
• Decision Date: 14 April 2003
• Docket Number: No. 25627.,25627.
• Parties: Ray H. CHEWNING, Jr., Respondent, v. FORD MOTOR COMPANY, David J. Bickerstaff, and David J. Bickerstaff and Associates, Inc., Defendants, of whom Ford Motor Company is Petitioner.
• Court: United States State Supreme Court of South Carolina

354 S.C. 72

579 S.E.2d 605

Ray H. CHEWNING, Jr., Respondent, v. FORD MOTOR COMPANY, David J. Bickerstaff, and David J. Bickerstaff and Associates, Inc., Defendants, of whom Ford Motor Company is Petitioner.

No. 25627.

Supreme Court of South Carolina.

Heard February 20, 2003.

Decided April 14, 2003.

Joel H. Smith and Susan M. Glenn of Nelson Mullins Riley & Scarborough, L.L.P., of Columbia; and Paul F. Hultin and Edward C. Stewart, of Wheeler Trigg & Kennedy, of Denver, CO, for petitioner.

A. Camden Lewis, Mark W. Hardee, and Ariail E. King, of Lewis, Babcock, & Hawkins, of Columbia, for respondent.

Justice BURNETT:

We granted a writ of certiorari to review the decision of the Court of Appeals which reversed a lower court order dismissing an action for "fraud upon the court" and an "independent action in equity for fraud" pursuant to Rule 12(b)(6), SCRCP. Chewning v. Ford Motor Co., 346 S.C. 28, 550 S.E.2d 584 (Ct.App.2001). We affirm.

FACTS

In 1992, Respondent, Ray H. Chewning, Jr., (Chewning) brought a products liability action against Respondent Ford Motor Company (Ford). He alleged that defects in his Ford Bronco II caused a rollover accident in which he sustained personal injuries. After a trial in 1993, the jury returned a verdict in Ford's favor.

In 1998, Chewning filed this action in state court against Ford, its expert witness, David J. Bickerstaff, and David J. Bickerstaff and Associates, Inc., asserting various causes of action. In essence, Chewning alleged Bickerstaff committed perjury during his 1993 trial and Ford concealed documents from him during the course of discovery.

Ford removed the action to federal court. The federal court granted Ford's motion to dismiss all claims, except for Chewning's cause of action for fraud upon the court. The federal court remanded the fraud upon the court claim "and such other related claims in equity, if any, as the state court may allow to be added by amendment." Chewning v. Ford Motor Co., 35 F.Supp.2d 487, 492 (D.S.C.1998).

Chewning refiled his case in state court asserting causes of action for fraud upon the court and an independent action in equity for fraud. In his amended complaint, Chewning alleged Ford's attorneys hired Bickerstaff to testify falsely on Ford's behalf in various Bronco II actions.¹ In addition, Chewning alleged Ford's attorneys withheld critical documents during discovery. Chewning asserted the judgment in his original action should be vacated as a result of the defendants' activities.

Concluding Chewning's complaint was untimely and asserted allegations of intrinsic fraud which could not be used to set aside the earlier verdict, the trial judge dismissed the complaint pursuant to Rule 12(b)(6), SCRCP. In addition, the trial judge determined Chewning's amended complaint failed to allege fraud with particularity as required by Rule 9(b), SCRCP, as it "does not identify any allegedly perjured testimony by Bickerstaff in the underlying products liability trial, only subsequent cases after Chewning's." Chewning appealed.

The Court of Appeals reversed. Chewning v. Ford Motor Co., supra.

It held Chewning's claim was timely and, further, the complaint sufficiently stated a claim for fraud upon the court. Id.

ISSUES

I. Did the Court of Appeals err by holding the subornation of perjury and concealing of documents by an attorney during the course of litigation may constitute fraud upon the court?

II. Did the Court of Appeals err by finding Chewning's complaint alleged fraud upon the court with sufficient particularity?

DISCUSSION

I.

Ford contends the Court of Appeals erred by holding the subornation of perjury and concealing of documents by an attorney during litigation constitutes fraud upon the court.² It contends these actions constitute intrinsic, rather than extrinsic, fraud and, therefore can not form the basis of Chewning's claim for fraud upon the court. We disagree.

Fraud Upon the Court

Our Court has not previously defined fraud upon the court in connection with setting aside a final judgment.³ In Evans v. Gunter, 294 S.C. 525, 529, 366 S.E.2d 44, 46 (Ct.App.1988), the Court of Appeals noted one commentator described "fraud upon the court" as "that species of fraud which does, or attempts to, subvert the integrity of the Court itself, or is a fraud perpetrated by officers of the court so that the judicial machinery cannot perform in the usual manner its impartial task of adjudging cases that are presented for adjudication." (citing H. Lightsey, J. Flanagan, South Carolina Civil Procedure, 408 (2nd ed.1985).

Other jurisdictions describe fraud upon the court as follows: Generally speaking, only the most egregious misconduct, such as bribery of a judge or members of a jury, or the fabrication of evidence by a party in which an attorney is implicated will constitute fraud on the court. Less egregious misconduct, such as nondisclosure to the court of facts allegedly pertinent to the matter before it, will not ordinarily rise to the level of fraud on the court.

Rozier v. Ford Motor Co., 573 F.2d 1332, 1338 (5th Cir.1978) citing United States v. Int'l Telephone & Telegraph Corp., 349 F.Supp. 22, 29 (D.Conn.1972)

(internal citations omitted).

Fraud upon the court is a "serious allegation ... involving `corruption of the judicial process itself.'" Cleveland Demolition Co., Inc. v. Azcon Scrap Corp., supra 827 F.2d at 986 quoting In re Whitney-Forbes, 770 F.2d 692, 698 (7th Cir.1985)

.

... `[F]raud on the court,' whatever else it embodies, requires a showing that one has acted with an intent to deceive or defraud the court. A proper balance between the interests of finality on the one hand and allowing relief due to inequitable conduct on the other makes it essential that there be a showing of conscious wrongdoing—what can properly be characterized as a deliberate scheme to defraud—before relief from a final judgment is appropriate.... Thus, when there is no intent to deceive, the fact that misrepresentations were made to a court is not of itself sufficient basis for setting aside a judgment for `fraud on the court.'

United States v. Buck, 281 F.3d 1336, 1342 (10th Cir.2002) quoting Robinson v. Audi Aktiengesellschaft, 56 F.3d 1259, 1267 (10th Cir.1995)

.

Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 64 S.Ct. 997, 88 L.Ed. 1250 (1944), is the United States Supreme Court's leading "fraud upon the court" decision. In that decision, an attorney for Hartford drafted an article in support of a particular glass manufacturing process, had an officer of the glass-workers' union sign the article as its author, and then had the article published in a trade journal. The article was included in support of Hartford's controversial patent application. The patent was granted. Hartford then initiated a patent infringement suit against Hazel-Glass. In finding Hazel-Glass had infringed upon Hartford's patent, the Third Circuit Court of Appeals relied on the article. Ultimately, the true identity of the author was discovered. In upholding Hazel-Glass' suit, the USSC Court emphasized:

This is not simply a case of a judgment obtained with the aid of a witness who, on the basis of after-discovered evidence, is believed to have been guilty of perjury. Here,... we find a deliberately planned and carefully executed scheme to defraud not only the Patent Office but the Circuit Court of Appeals.... This matter does not concern only private parties. There are issues of great moment to the public in a patent suit. Furthermore, tampering with the administration of justice in the manner indisputably shown here involves far more than an injury to a single litigant. It is a wrong against the institutions set up to protect and safeguard the public, institutions in which fraud cannot complacently be tolerated consistently with the good order of society. Surely it cannot be that preservation of the integrity of the judicial process must always wait upon the diligence of litigants. The public welfare demands that the agencies of public justice be not so impotent that they must always be mute and helpless victims of deception and fraud.

Id. U.S. at 245-46, 64 S.Ct. 997 (internal citations omitted).

Intrinsic/Extrinsic Fraud

In considering collateral attacks on final judgments, a court must balance the interest of finality against the need to provide a fair and just resolution of the dispute. See Hagy v. Pruitt, 339 S.C. 425, 529 S.E.2d 714 (2000)

. In most circumstances, there is a time limitation upon a party who seeks to reopen a final judgment. Rule 60(b), SCRCP, provides, in part:

(b) Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence; Fraud, etc.

On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons:

(1) mistake, inadvertence, surprise, or excusable neglect;

(2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b);

(3) fraud, misrepresentation, or other misconduct of an adverse party;

(4) the judgment is void;

(5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application.

The motion shall be made within a reasonable time, and for reasons (1), (2), and (3) not more than one year after the judgment, order or proceeding was entered or taken ... This rule does not limit the power of a court to entertain an independent action to relieve a party from a judgment order, or proceeding, or to set aside a judgment for fraud upon the court.

(Underline added).

There is no statute of limitations when a party seeks to set aside a judgment due to fraud upon the court. Rule 60(b), SCRCP; see Hagy v. Pruitt, supra

(court has the inherent authority to set aside a judgment on the...