Magnuson v. Blickenstaff

• Decision Date: 09 June 1987
• Docket Number: No. 79A02-8603-CV-99,79A02-8603-CV-99
• Citation: 508 N.E.2d 814
• Parties: John H. MAGNUSON, Appellant (Plaintiff), v. Kenneth L. BLICKENSTAFF d/b/a Blickenstaff Rural Realty, Appellee (Defendant).
• Court: Indiana Appellate Court

Page 814

508 N.E.2d 814

John H. MAGNUSON, Appellant (Plaintiff), v. Kenneth L. BLICKENSTAFF d/b/a Blickenstaff Rural Realty,

Appellee (Defendant).

No. 79A02-8603-CV-99.

Court of Appeals of Indiana,

Second District.

June 9, 1987.

Thomas W. Munger, Lafayette, for appellant.

Kenneth L. Blickenstaff, Stockwell, pro se.

BUCHANAN, Judge.

CASE SUMMARY

Appellant-plaintiff John H. Magnuson (Magnuson) appeals the granting of a motion to dismiss his complaint to set aside a default judgment, filed by Kenneth L. Blickenstaff d/b/a Blickenstaff Rural Realty (Blickenstaff), claiming fraud was perpetrated on the trial court.

We affirm.

FACTS

On July 12, 1982, Blickenstaff brought an action against Magnuson and his wife On June 7, 1985, Magnuson, his wife deceased, filed a complaint, asking that the previous judgment between the parties be set aside and for attorneys fees. This complaint alleged that Blickenstaff committed fraud upon the court by representing that he had procured a willing buyer when in fact the buyer had withdrawn her offer. Blickenstaff filed a motion to dismiss under T.R. 12(B)(6). The trial court granted the motion to dismiss, finding that the grounds which Magnuson set forth in his complaint were not shown to be unknown or unknowable to him at the time of his first motion to set aside the default judgment and therefore could not be raised in a second T.R. 60(B) motion, citing Carvey v. Indiana Nat'l Bank (1978), 176 Ind.App. 152, 374 N.E.2d 1173.

seeking recovery of a commission allegedly owed him by the Magnusons pursuant to a real estate listing agreement. Magnuson and his wife failed to appear at the hearing, and Blickenstaff obtained a default judgment against them on August 13, 1982. Magnuson and his wife filed a motion to set aside the default judgment apparently based on Ind. Rules of Procedure, Trial Rule 60(B)(1), claiming excusable neglect due to their old age. The trial court denied their motion on July 2, 1984, and the Magnusons then filed a motion to correct error claiming they did not have notice of the hearing. The motion to correct error was denied and the Magnusons did not appeal.

ISSUE

Magnuson raises this issue:

Did the trial court err in dismissing Magnuson's complaint which requested that the court set aside the default judgment?

DECISION

PARTIES' CONTENTIONS--Magnuson contends the trial court erred in dismissing his complaint because it timely and adequately set forth a claim for fraud upon the court, as allowed under T.R. 60(B).

Blickenstaff argues that Magnuson did not adequately allege fraud in his complaint, that Magnuson's action was barred as it was not brought within one year from the judgment, that Magnuson failed to show the matter was not discoverable at the time of his first 60(B) judgment, and that Magnuson had "unclean hands."

CONCLUSION--The trial court did not err in dismissing Magnuson's complaint.

Even if the facts alleged in Magnuson's complaint are true, we cannot say the trial court erred in dismissing the complaint based on Carvey, supra. Although the present action was brought by complaint as an independent action, its goal is the same as any T.R. 60(B) motion, i.e., to set aside a prior judgment. We consider Magnuson's complaint to be indistinguishable from a T.R. 60(B) motion. ¹

It is well-established that a motion under T.R. 60 may not serve as a substitute for a direct appeal. Snider v. Gaddis (1980), Ind.App., 413 N.E.2d 322, trans. denied; Sheraton Corp. of America v. Korte Paper Co. (1977), 173 Ind.App. 407, 363 N.E.2d 1263; Warner v. Young Am. Volunteer Fire Dep't (1975), 164 Ind.App. 140, 326 N.E.2d 831. The proper function of a T.R. 60(B) motion is to afford relief from circumstances which were not discovered or discoverable during the time period in which to file a motion to correct error. Snider, supra. Regarding multiple 60(B) motions, the court in Carvey, supra, explained:

"The Indiana Rules of Procedure are to be construed in a manner promoting the just, speedy, and inexpensive determination of every action. TR 1. A party may not file repeated TR 60 motions until he finally either offers a meritorious ground for relief or exhausts himself and the trial court in the effort to do so."

Id. at 159, 374 N.E.2d at 1177. The court in Carvey, however, observed that the prohibition against bringing repeated T.R. 60(B) motions would not be applied when the defaulted party was unaware or had no opportunity to become aware of certain facts to support the setting aside of a judgment at the time of his first 60(B) motion. Id. Our supreme court in Siebert Oxidermo, Inc. v. Shields (1983), Ind., 446 N.E.2d 332, on reh'g., rejected a second and third 60(B) motion when the defaulted party failed to show that the issues brought in the subsequent 60(B) motions were unavailable or unknown at the time of the first motion. In Siebert, the grounds alleged in the second and third motions were discoverable at the time of the first 60(B) motion or related to a substantive defense previously available to the defaulted party. Id.

The information alleged in Magnuson's complaint does not compel us to invoke the court's equity powers to relieve him from the previous default judgment. The record and his brief are devoid of any indication that the ground presently alleged, i.e., the alleged fraud by Blickenstaff stating there was a willing buyer, was unknown or available to him at the time of the first hearing, first T.R. 60(B) motion, or during the time period in which to file a motion to correct error after the ruling on his first motion for relief from default judgment.

Although a manifest and explicit showing by the defaulted party of circumstances explaining the inability to raise an issue at the prior appropriate time might override the strong interest in preserving the finality of judgments, we have no such showing here. The only evidence presented by Magnuson that even remotely relates to when he became aware of facts showing that there was no willing buyer and that Blickenstaff's statement was fraudulent was in an affidavit attached to Magnuson's motion to correct error in the present case. The affidavit, dated October 8, 1984, was written by the alleged willing buyer and contained one sentence to the effect that she was not, in fact, a willing buyer. Without any other basis in the record or any arguments in the party's brief, we cannot assume that Magnuson had no knowledge or no means to become aware of any alleged fraudulent statement as to the willingness of the buyer at an earlier time.

"We must also observe that to sanction the repetitive filing of Rule 60(B) motions by a party suffering a default judgment is to encourage defaulted defendants to drag their feet and be dilatory in discovering grounds for setting aside a default judgment.... We do not wish to encourage defendants to hastily file a Rule 60(B) motion as soon as they discover one ground for relief ... and then take their time about discovering and raising other Rule 60(B) grounds and bombarding the court with more such motions."

Siebert, supra, at 338-39. Interestingly enough, Magnuson does not even address the propriety of bringing a second T.R. 60(B) motion, choosing to argue his right to bring an independent action for fraud upon the court.

It is Magnuson's contention that the final paragraph of T.R. 60(B) ² opens an avenue for him to bring an independent action for fraud upon the court even though his present action was not brought until nearly three years after the default judgment was entered. The final paragraph of T.R. 60(B) provides in part:

"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 for fraud upon the court."

An independent action for fraud upon the court is a recognized method of gaining relief from a judgment. See Caley v. Lung (1971), 257 Ind. 116, 271 N.E.2d 891; Ayres v. Smith (1949), 227 Ind. 82, 84 N.E.2d 185; Smith v. Tisdal (1985), Ind.App., 484 N.E.2d 42; Anderson v. Anderson (1979), Ind.App., 399 N.E.2d 391. An action for fraud upon the court, unlike an action based on fraud under T.R. 60(B)(3), may be brought more than one year after judgment. Smith, supra. Magnuson's argument fails, however, because his complaint does not contain sufficient allegations of fraud on the court.

Although no Indiana cases provide us with a precise definition of fraud upon the court, our supreme court in Chermak v. Chermak (1949), 227 Ind. 625, 88 N.E.2d 250, distinguished between intrinsic and extrinsic fraud in determining what issues may be raised by an independent action. The court in Chermak defined intrinsic fraud as a matter which has been presented to and considered by the court in its judgment, such as a fraudulent instrument or perjured testimony. Allegations of intrinsic fraud were said to provide no basis for setting aside a judgment. Id.; see also Hegarty v. Curtis (1950), 121 Ind.App. 74, 95 N.E.2d 706, trans. denied. Extrinsic fraud, on the other hand, is "fraud in procuring the exercise of jurisdiction of the court, or fraud which, in fact, prevents a trial of the issue in the case...." Chermak, supra, 227 Ind. at 627, 88 N.E.2d at 251. Examples of extrinsic fraud include fraud in keeping a party from court, fraud causing lack of knowledge of a suit, or fraud when an attorney "corruptly sells out his client's interest to the other side." Id; see also Ayres, supra (action for fraud upon court allowed when attorney represented both sides in litigation). The court in Chermak pronounced that only extrinsic fraud would warrant the setting aside of a judgment. Id. Although the intrinsic-extrinsic distinction has been criticized as "a distinction without merit," 4 W. HARVEY & R. TOWNSEND, INDIANA PRACTICE Sec. 60.12, at 211-12 (1971), the distinction has been followed in many federal and state courts which have rules similar to Indiana's T.R. 60(B). See Great Coastal...