Thursday, October 11, 2012

Dismissal for Fraud Upon the Court under Florida Law

When a Plaintiff creates fraudulent evidence, or lies under oath about something that is central to their claim, what are your remedies? The most obvious answer is that you can present evidence of this dishonest behavior to the jury, in order to impeach the Plaintiff's credibility. However, there are times when a Plaintiff's misconduct is so egregious that a Court may find that the proper sanction is to dismiss their claim entirely (or in the case of a defendant, strike their pleadings). As the vast majority of these cases involve Plaintiffs in personal injury actions who perjure themselves (or omit crucial facts), this brief article explores those standards in Florida State Court. Note that the standard in Federal Court is somewhat more exacting, and may be explored in a subsequent post.

Procedure/Standard of Review:

Florida state courts have articulated a standard which gives the trial court quite a bit of latitude in its determination as to whether dismissal for fraud upon the court is warranted. Naturally, the appellate court will defer to a trial court's expertise when it comes to determinations of credibility and good faith, and these orders are generally reviewed for abuse of discretion. Metro Dade County v. Martinsen, 736 So. 2d 794 (Fla. 3d DCA 1999). Appellate courts may be less deferential where the trial court's determination was based upon a paper record, rather than an evidentiary hearing. Bologna v. Edwin Schlanger, 995 So. 2d 528 (5th DCA 2008). However, while evidentiary hearings are clearly favored, there is "no rule, statute, or case" that requires an evidentiary hearing to be held when a motion to dismiss for fraud is filed. Gilbert v. Eckerd Corp. of Florida, Inc., 34 So. 3d 773 (Fla. 4th DCA 2010). When finding that dismissal is the appropriate sanction for a Plaintiff's fraud, the Court must conclude that the Defendant has produced clear and convincing evidence of a fraud, and an order granting Defendant's motion should contain:

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 calculate to subvert the judicial process. Chacha v. Transport USA, Inc., 78 So. 3d 727 (Fla. 4th DCA 2012).

Accordingly, a party who prevails on a Motion to Dismiss for Fraud Upon the Court should submit a proposed order which includes express factual findings and in-depth references to the factual record in order to reduce the likelihood of reversal upon appeal. In other words, the order should look like it was written by a federal judge granting summary judgment. 

Legal Standard:

In general,  a trial court has a duty and an obligation to dismiss a cause of action based upon fraud. Long v. Swofford, 805 So. 2d 882, 884 (Fla. 3d DCA 2001). The reasoning behind the harsh sanction of dismissal is the principle that a party who has been guilty of fraud or misconduct in the prosecution of a civil proceeding should not then be permitted to continue to employ the very institution he has undermined to achieve his ends.  Hanano v. Murphy, 723 So.2d 892, 895 (Fla. 3d DCA 1998).

But what type of misconduct rises to the level of fraud? In the personal injury context, failure to disclose prior related injuries, and prior similar accidents can warrant a dismissal for fraud, where the Plaintiff's misrepresentations and omissions go to the the heart of his claim for damages. Martinsen, 736 So. 2d at 795. Or, alternatively put, “when a party lies about matters bearing directly on the issue of damages, dismissal is an appropriate sanction.” Cross v. Pumpco, 910 So. 2d. 324, 328 (Fla. 4th DCA 2005) (citing Distefano v. State Farm Mut. Ins., 846 So. 2d 572, 574 (Fla. 1st DCA 2003)). Note that while failure to disclose medical history and prior accidents has frequently been recognized as warranting dismissal, Courts are generally disinclined to grant such a motion where you catch a Plaintiff lying about their limitations by using surveillance. Amato v. Intindola, 854 So. 2d 812 (Fla. 4th DCA 2003); Jacob v. Henderson, 840 So. 2d 1167 (Fla. 2d DCA 2003).

In Metropolitan Dade County v. Martinsen, the Third District Court of Appeal held that a trial court abused its discretion in failing to dismiss Plaintiff’s case for fraud upon the court where the Plaintiff failed to disclose an extensive history of medical treatment for similar injuries suffered in prior car accidents and in a work-related accident in her response to interrogatories and deposition. Metro Dade County v. Martinsen, 736 So. 2d 794 (Fla. 3d DCA 1999).

Likewise, in Long v. Swofford, the Plaintiff sought damages for lower back injuries that she alleged were caused by an automobile accident. Plaintiff testified during her deposition that before the accident, she had no prior injury or pains to her lower back. During discovery, defendant investigated Plaintiff’s medical history and discovered that Plaintiff’s claimed injuries were preexisting, and that she had previously received treatment for same.  The Third District Court of Appeal held that the trial court’s decision to dismiss Plaintiff’s case for fraud upon the court was proper because plaintiff provided false or misleading statements under oath concerning issues central to her case. Long v. Swofford, 805 So. 2d 882, 883 (Fla. 3d DCA 2001); see, also Mendez v. Blanco, 665 So.2d 1149 (Fla. 3d DCA 1996)(dismissing case with prejudice based on Plaintiff’s lies told under oath at deposition); O’Vahey v. Miller, 644 So.2d 550 (Fla. 3d DCA 1994) (holding that although Plaintiff’s perjury regarding his educational background did not directly concern the cause of action itself, dismissal of the entire case was warranted); Morgan v. Campbell, 816 So. 2d 251 (Fla. 2d DCA 2002) (dismissal was appropriate where the plaintiff lied about prior injuries and treatment for neck and low back pain).

Particularly relevant factors in the Court's analysis are (1) similarity (or dissimilarity) of non disclosed injury; (2) whether nondisclosure involves all of Plaintiff's claimed damages/injuries; (3) substantial, if incomplete, disclosure of prior injuries, accidents and treating physicians (or, alternatively, complete and total omission); and (4) temporal proximity (remote/recent) of any prior related, and undisclosed injuries. See e.g. Hair v. Morton, 36 So. 3d 766 (Fla. 3d DCA 2010) (overturning dismissal where Plaintiff's nondisclosure related to only part of her claimed damages); Cross v. Pumpco, 910 So. 2d. 324 (Fla. 4th DCA 2005) (overturning dismissal where Plaintiff had disclosed four prior accidents and multiple pre-existing injuries, but failed to disclose a fifth accident which had occurred some seven years prior to his deposition); Armakan v. McLean, 800 So. 2d 314 (Fla. 3d DCA 2001) (overturning dismissal where Plaintiff had failed to disclose a somewhat dissimilar injury which had occurred 18 years prior to his deposition); Ruiz v. City of Orlando, 859 So. 2d 574 (Fla. 5th DCA 2003) (overturning dismissal where Plaintiff failed to fully disclose symptoms from an accident which had occurred over 30 years prior to her deposition). 

As the aforementioned cases illustrate, the ultimate question is whether the Plaintiff could have credibly 'not remembered' the prior injuries that they omitted. If the injury occurred a long time ago, they would presumably be far less likely to remember the injury, which, in turn, makes it far more difficult to clearly and convincingly establish that the Plaintiff was deliberately lying under oath. Likewise, substantial, albeit incomplete, disclosure of prior injuries, would make it far less likely that the Plaintiff was attempting to hide the truth during their deposition. You would expect someone to go whole hog if they were intent upon committing perjury. Finally, the relatedness/similarity of the nondisclosed injuries weighs upon credibility, because a Plaintiff would have less of an incentive to hide them. Moreover, failure to disclose unrelated injuries does less to undermine the integrity of the judicial system, because, presumably, if these unrelated injuries were known, they wouldn't have an effect on the damages the Plaintiff was actually entitled to.

Ultimately, these motions should be used sparingly, when it is clear that you are dealing with a Plaintiff who has no regard for the truth, and who is simply trying to manipulate the system. When questioning such a Plaintiff, make sure to ask specific questions, and don't try to 'trick' him into nondisclosure. In addition to simply being immoral, courts have recognized this one and don't go for it. Bologna v. Edwin Schlanger, 995 So. 2d 526, 529 (5th DCA 2008) (overturning dismissal and noting that deposition questions were “very broad in scope with virtually no follow up questions”).

Finally, in order to avoid losing all of your sunk costs to such a motion, Plaintiffs' counsel would be well advised to take the time to meet with their clients and ensure that they fully disclose everything. Obtaining signed releases and looking through their medical history is likely in your client's best interest as well, even if you have to "save him from himself." After all, even if the Motion is denied, your client's credibility will be shot.  To the best of my knowledge, there's no rule of professional conduct that requires you to dig this deeply, and it may not be malpractice to take your client at his word, but it is certainly in the best interests of your client, not to mention, a wise business decision.