E.I. Dupont De Nemours & Co. v. Sidran

• Citation: 140 So.3d 620
• Decision Date: 09 July 2014
• Docket Number: No. 3D12–321.,3D12–321.
• Parties: E.I. DUPONT DE NEMOURS & COMPANY, INC., Appellant, v. Claire J. SIDRAN, et al., Appellees.
• Court: Court of Appeal of Florida (US)

140 So.3d 620

E.I. DUPONT DE NEMOURS & COMPANY, INC., Appellant,
v.
Claire J. SIDRAN, et al., Appellees.

No. 3D12–321.

District Court of Appeal of Florida,
Third District.

April 23, 2014.
Opinion on Rehearing and Clarification July 9, 2014.

[140 So.3d 621]

Boies, Schiller & Flexner, Stephen N. Zack and Andrew Brenner, Miami; Hicks, Porter, Ebenfeld & Stein, Mark Hicks, Dinah Stein and Gary Magnarini, Miami; Shook, Hardy & Bacon, Edward A. Moss, Humberto H. Ocariza, and Thomas M. Sherouse, Miami, for appellant.

Arnold R. Ginsberg, Miami; Ratiner & Mirabal and Robert Ratiner, for appellees.

Before WELLS, SUAREZ, and SCALES, JJ.

WELLS, Judge.

E.I. DuPont De Nemours appeals from an order striking its pleadings and entering a default judgment against it for a “fraud on the court” purportedly perpetrated by DuPont in its creation, use, and representations concerning its document depository and collection related to its product Benlate. DuPont also appeals from the subsequent final judgment awarding $223,135 in compensatory damages, $800,000 in punitive damages, and $414,590.41 in prejudgment interest. ¹ Because

[140 So.3d 622]

the record does not support the finding that DuPont made the misrepresentation on which the trial court based its ruling, and, equally determinative, because the record does not demonstrate any willful intent on DuPont's part to mislead the trial court or opposing counsel, on the following analysis, we reverse.

The final judgment in this case derives from the claims of Mr. and Mrs. Sidran, the owners of a small hobby-turned-commercial orchid nursery located in their home's backyard. See Sidran v. E.I. Dupont De Nemours & Co., Inc., 925 So.2d 1040 (Fla. 3d DCA 2003) (clarified on denial of rehearing Jan. 11, 2006, and remanded for new trial). According to the Sidrans, from sometime in 1988 through February 1991, they applied Benlate as a fungicide to treat their plants. In 1989, Mrs. Sidran began to notice changes in her orchid plants and after the couple received notice in May of 1991 that Benlate DF was being recalled, she and her husband made a claim via a process established by DuPont to resolve Benlate-related complaints. When their demands were not resolved via this process, the Sidrans brought suit in August 1992, raising claims sounding in breach of implied warranty of merchantability and negligence. More specifically, the Sidrans alleged that the Benlate DF that they had purchased “was either contaminated with a foreign substance which was toxic to plants and/or was negligently designed or formulated when it was manufactured and sold by DUPONT so as to become toxic during its foreseeable use.” ²

By the time this action was filed, DuPont already was dealing with hundreds of Benlate-related lawsuits and had begun to collect and preserve at a central location Benlate-related documents to facilitate ongoing and anticipated discovery. This collection of documents, initially known as the Benlate Document Depository and later the Benlate Document Collection, would quickly increase to encompass over 1.5 million pages and then—over time as discovery progressed in over 800 Benlate related cases—to more than 5 million pages. The Depository and then the Collection were used by DuPont's lawyers to facilitate discovery and they were made available to opposing counsel for investigation and use as well.

In early 1995, this action was tried for the first time and resulted in a verdict in the Sidrans' favor. That verdict was nullified because of the pervasive misconduct of the Sidrans' attorney, Edwin Ratiner, during trial. This action was tried a second time in mid–2001 and resulted in a verdict for DuPont. That verdict was nullified on appeal due to an evidentiary error. See Sidran, 925 So.2d at 1043–44.

Following the second trial, the Sidrans' representation was turned over to Robert Ratiner, Edwin Ratiner's son. At this point the case veered off course from a negligence/products liability action to an action for fraud on the court based on a claim that DuPont's Benlate Depository and Collection were shams, “created and manipulated by DuPont for the purpose of presenting an appearance of being responsive to Benlate discovery,” when in reality

[140 So.3d 623]

it was not. After years of the Sidrans' attorney advancing that position, this claim resulted in the order under review, dated January 19, 2011, which adopted that argument, and concluded that DuPont had perpetrated “an unconscionable scheme, calculated to interfere with the judicial system's ability to impartially adjudicate Benlate matters by unfairly restricting plaintiffs' ability to gather evidence to prove its claims.” ³

DuPont's pleadings were stricken and a default was entered against it for perpetrating fraud on the court. Following a trial on damages alone, final judgment was entered against it. We reverse the order finding a fraud on the court, striking the defendant's pleadings and entering a default, because that order is unsupported by any evidence, much less clear and convincing evidence. See Bertrand v. Belhomme, 892 So.2d 1150, 1152–53 (Fla. 3d DCA 2005) (“An appellate court reviews a trial court's imposition of sanctions under an abuse of discretion standard of review. Although the trial court has wide discretion in the imposition of sanctions, the court's discretion is not unlimited. The standard required to support a finding of fraud upon the court is reasonably straightforward. The evidence to support a finding of fraud must be clear and convincing.”) (citations omitted). We also reverse the final judgment entered against DuPont the validity of which depends on the sanctions order.

Fraud on the Court

“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.’ ” Robinson v. Weiland, 988 So.2d 1110, 1111 n. 1 (Fla. 5th DCA 2008) (quoting Cox v. Burke, 706 So.2d 43, 46 (Fla. 5th DCA 1998)); see Wenwei Sun v. Aviles, 53 So.3d 1075, 1077 (Fla. 5th DCA 2010) (accord). While “a trial court has the inherent power to impose sanctions on a party who destroys evidence or perpetrates a fraud on the court,” that power should be exercised with great restraint because the courts of this state favor adjudications on the merits. Babe Elias Builders, Inc. v. Pernick, 765 So.2d 119, 120 (Fla. 3d DCA 2000); Tramel v. Bass, 672 So.2d 78, 83 (Fla. 1st DCA 1996) (accord); see also Rocka Fuerta Constr. Inc. v. Southwick, Inc., 103 So.3d 1022, 1024 (Fla. 5th DCA 2012) (“[T]he inherent authority to dismiss actions based on fraud ... should be used ‘cautiously and sparingly,’ and only upon the most blatant showing of fraud, pretense, collusion, or other similar wrong doing.” (quoting Granados v. Zehr, 979 So.2d 1155, 1157 (Fla. 5th DCA 2008))); Gautreaux v. Maya, 112 So.3d 146, 149 (Fla. 5th DCA 2013) (“When reviewing a case for fraud, the court should consider the 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.” (quoting Cox v. Burke, 706 So.2d 43, 46 (Fla. 5th DCA 1998))); Wenwei, 53 So.3d at 1077 (accord).

[140 So.3d 624]

Although a finding of fraud on the court generally has been premised on a proven outright lie on a critical issue, ⁴ or the destruction of determinative evidence,⁵ whatever “scheme” of fraud a court finds must be supported by clear and convincing evidence that goes to “the very core issue at trial”:

To support a dismissal the court must find the “false testimony was directly related to the central issue in the case.” Morgan v. Campbell, 816 So.2d 251, 253 (Fla. 2d DCA 2002); see also Ramey v. Haverty Furniture Cos., 993 So.2d 1014, 1019 (Fla. 2d DCA 2008). 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. Cross v. Pumpco, Inc., 910 So.2d 324, 327 (Fla. 4th DCA 2005).
Gilbert v. Eckerd Corp. of Fla., Inc., 34 So.3d 773, 775–76 (Fla. 4th DCA 2010).

The Sidrans' Claim of Fraud on the Court

In the instant case, neither an outright lie nor the destruction of vital evidence was the basis of the trial court's ruling. To be clear, here, there is no “smoking gun.” That is, the Sidrans do not claim that DuPont failed to produce a single document that was necessary for them to prove their claims or that they are aware that such a document might exist. And, no employee has testified that critical documents were purposely destroyed, that instructions had been given to eliminate determinative materials, or that DuPont had instructed anyone to create its initial document Depository, or later Collection, as a sham.⁶ In fact, the unrefuted testimony

[140 So.3d 625]

was that DuPont instructed employees to send everything Benlate related to be gathered first in one central physical location and later, in the company's computerized Collection. (Plaintiffs ultimately complained about that too—suggesting the company was purposely creating a “haystack” for the express purpose of making it difficult for them to find what they needed. Although again, there was no proof of that assertion either.). Rather, the court below concluded that notwithstanding the thousands of documents actually produced and made available to the Sidrans and the court over a period of almost twenty years, a fraud had been perpetrated because DuPont had purportedly represented that its Benlate Depository and Collection were “complete” and “reliable” ⁷ while, in fact, they were not.

The Litigation Fails To Prove a Misleading Assertion, Let Alone a Willful Misleading Assertion

A careful review of the evidence demonstrates that DuPont never represented to the...