Pearlman v. Pearlman

• Decision Date: 03 November 1981
• Docket Number: No. 81-67,81-67
• Citation: 405 So.2d 764
• Parties: Helene PEARLMAN, Appellant, v. Arthur PEARLMAN, as Personal Representative of the Estate of Harry Pearlman, Deceased, and Mount Sinai Hospital of Greater Miami, Inc., and Mount SinaiMedical Center Foundation, Inc., Appellees.
• Court: Florida District Court of Appeals

Page 764

405 So.2d 764

Helene PEARLMAN, Appellant, v. Arthur PEARLMAN, as Personal Representative of the Estate of Harry Pearlman, Deceased, and Mount Sinai Hospital of Greater Miami, Inc., and Mount SinaiMedical Center Foundation, Inc., Appellees.

No. 81-67.

District Court of Appeal of Florida, Third District.

Nov. 3, 1981.

Heller & Kaplan and Robert Golden and Lisa H. Green, Miami, for appellant.

Adams & Ward, Horton, Perse & Ginsberg and Mallory H. Horton, Miami, for appellees.

Before NESBITT, FERGUSON and JORGENSON, JJ.

FERGUSON, Judge.

Helene Pearlman, petitioner below, appeals from the order of the circuit court striking her motion to set aside final judgment pursuant to Florida Rule of Civil Procedure 1.540(b). We hold that Helene Pearlman, though not a named party to the action, has standing to move to set aside the judgment entered in favor of appellees under Rule 1.540(b) because her rights were directly and injuriously affected by the judgment which was allegedly obtained by fraud.

In May of 1979, appellees filed a claim against the Harry Pearlman estate for a one-million-dollar pledge that Harry Pearlman had made to appellees during his lifetime. Arthur Pearlman, son of Harry Pearlman and personal representative of the Pearlman estate, objected to the appellees' claim. Appellees then filed a complaint against Arthur as personal representative. The trial court entered a judgment upholding the validity of the oral pledge. Less than one year after that judgment, Helene Pearlman, Harry's widow, filed a motion seeking to set aside the judgment on the grounds that the judgment in question was obtained by collusion between appellees and Arthur. Helene attached to the motion the amended complaint she had filed against Arthur and appellees in a separate case which was still pending in circuit court. In the motion Helene claimed that fraud was committed upon the court. In the attached complaint Helene alleged specific facts to the effect that Arthur Pearlman as president, chief operating officer, and stockholder of Duke Industries, Inc. which sold supplies for profit to Mount Sinai Hospital was placed in a conflict of interest as he was also an officer and trustee of Mount Sinai Hospital and the personal representative of the estate from which Mount Sinai Hospital was claiming a million-dollar pledge. Helene also alleged specific facts to the effect that Arthur conspired with others to permit a non-contested judgment to be entered in favor of Mount Sinai Hospital for the purpose of committing fraud upon Helene and causing approximately three hundred thousand dollars of the claim to be paid from funds which Helene would receive from the estate rather than out of funds which would accrue to the benefit of Arthur as residual beneficiary.

Appellees filed a motion to strike Helene's Rule 1.540(b) motion on the grounds that she did not qualify under the Rule as a proper party to file the motion since she was neither a party to the proceeding nor a legal representative of the party to the proceeding. After a hearing, the trial court entered an order striking Helene's motion and denying Helene's ore tenus motion to reserve jurisdiction of her motion to set aside final judgment pending a ruling in her separate lawsuit.

Florida Rule of Civil Procedure 1.540(b) which is substantially the same as Federal Rule of Civil Procedure 60 provides that the court, under certain circumstances, may relieve a party or his legal representative from a final judgment. ¹ The rule does not require that a motion be filed only by a party to the original action. ² Florida Rule of Civil Procedure 1.540(b) and Federal Rule of Civil Procedure 60 incorporated the substance of common law and equitable ancillary remedies for relief from judgment, including that of a bill in the nature of review, a remedy which could be brought by persons not a party to the original action. See Fla.R.Civ.P. 1.540(b) and 7 Moore's Fed. Prac. § 60(b), et seq. (2d ed. 1979). Courts interpreting the federal rule (and state rules with identical provisions) have held that a person who is a stranger to the action has standing under the rule to move for vacation of the judgment when that judgment was obtained by fraud or collusion and directly affected the rights of that person. Southerland v. Irons, 628 F.2d 978 (6th Cir. 1980); United States v. International Telephone & Telegraph Corp., 349 F.Supp. 22 (D.Conn.1972), aff'd mem., 410 U.S. 919, 93 S.Ct. 1363, 35 L.Ed.2d 582 (1973); Mathieson v. Hubler, 92 N.M. 381, 588 P.2d 1056 (N.M.App.1978); Liston v. Butler, 4 Ariz.App. 460, 421 P.2d 542 (1966). See also National Power & Paper Company v. Rossman, 122 Minn. 355, 142 N.W. 818 (1913), decided prior to amended Federal Rule 60.

These writings and decisions are to be considered by us in interpreting the Florida rule. Zuberbuhler v. Division of Administration, 344 So.2d 1304 (Fla.2d DCA 1977), cert. denied, 358 So.2d 135 (Fla.1978). Like the Federal Rule upon which it is based, the Florida rule incorporated the substance of prior remedies. See Rule 1.540(b); Barns and Mattis, 1962 Amendments to the Florida Rules of Civil Procedure, 17 U. Miami L. Rev. 276 (1963). Under the Florida law, a third person may seek equitable relief from a judgment obtained by fraud if he has a sufficient interest in that judgment. Milgram v. Lee, 200 So.2d 238 (Fla. 3d DCA 1967). There is some confusion under Florida law, however, whether an unnamed party is limited to relief by independent action. In Ramey v. Thomas, 382 So.2d 78 (Fla. 5th DCA 1980), the court found that failure to fulfill a fiduciary duty to reveal material facts to the court was fraud and affected the substantial rights of non-parties to the suit allowing them to seek equitable relief. The court cited Rule 1.540(b), Ramey, supra at n. 8, but in the same footnote stated that the motion should have been filed as an independent action. Though in particular cases the statute of limitations or other reasons might require that a violation under Rule 1.540(b) be treated as an independent action, we find, based on the discussion above, that an unnamed party is not limited to an independent action. It is true that the original remedy of unnamed parties, a bill in the nature of review, was to be brought as an independent action, while the remedy of named parties, a bill of review, could be brought by motion. 7 Moore's Fed. Prac., supra, § 60.15(1). These remedies, however, were abolished and their substance incorporated into the Federal rule and into the Florida rule. See Rule 1.540. We find no purpose served in perpetuating the technical distinction between abolished remedies and no reason to believe that by stating that the procedure for obtaining relief from a judgment shall be by motion or by an independent action, the rule acts to preserve the distinction between these old remedies. The alternative right to an independent action does not affect a person's ability to file a motion under the rule. The Federal and the Florida rule is to be broadly construed. 7 Moore's Fed. Prac., supra at § 60.15(8). The rule incorporates the substance of the prior remedies. In addition, the right under the rule to relief by motion and the separate right to relief by means of an independent action are to be treated interchangeably negating for purposes of standing, any distinction between the two. H.K. Porter Co. v. Goodyear Tire & Rubber Co., 536 F.2d 1115 (6th Cir. 1976); 7 Moore's Fed. Prac., supra, § 60.31. See, e. g., Ramey v. Thomas, supra; Buncombe County v. Penland, 206 N.C. 299, 173 S.E. 609 (1934). See also Cuthill v. Ortman-Miller Machine Co., 216 F.2d 336 (7th Cir. 19...