Wednesday, November 10, 2010

Order Denying Motion To Dismiss For Alleged Fraud On Court Affirmed

In JVA Enterprises, I, LLC v. Prentice (4D08-4661, 4D08-5013, 4D09-1686), the Fourth District affirmed the trial court's order denying a motion to dismiss for alleged fraud on the court.  The court reversed the trial court's order excluding certain evidence and reversed the trial court's decision to award pre-judgment interest.


The facts, as described in the opinion, are that:
Prentice sued JVA and Enterprise for injuries allegedly suffered in December 2003 and March 2004. He asserted claims for unseaworthiness against Enterprise, maintenance and cure under admiralty law against both of the defendants, and negligence against JVA....
In answers to interrogatories, Prentice denied that he was seeking compensation for exacerbation of any pre-existing injury. He did, however, disclose that he had filed a workers’ compensation claim and a personal injury suit in California in the 1980s.
Prior to Prentice’s deposition, a paralegal at the law firm representing JVA and Enterprise discovered that Prentice’s name and social security number appeared three times in workers’ compensation files in California. At his deposition....Prentice admitted to one prior workers’ compensation claim, but did not remember the other two....
Approximately one month prior to trial, in May of 2008, JVA and Enterprise filed a motion for sanctions, including dismissal, against Prentice for concealing his 1991 injuries.....The trial court denied JVA and Enterprise’s motion for sanctions, finding the temporal distance of the 1991 injury to the 2008 trial to be compelling. In denying the motion, the trial court indicated this might be an appropriate area for cross-examination or impeachment.
The trial court also entered an order stating that the defendants "could not 'bring up this California injury in any way shape, or form during trial'.” 

The Fourth District affirmed the trial court's order denying the defendants motion for the sanction of dismissal for fraud on the court. 
In Arzuman v. Saud, 843 So. 2d 950, 952 (Fla. 4th DCA 2003), this court held the trial court has the inherent authority, within the exercise of sound judicial discretion, to dismiss an action when a plaintiff has perpetrated a fraud on the court. The requisite 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.” Id. (quoting Aoude v. Mobil Oil Corp., 892 F.2d 1115, 1118 (1st Cir. 1989)). “Because ‘dismissal sounds the death knell of the lawsuit,’ courts must reserve such strong medicine for instances where the defaulting party’s misconduct is correspondingly egregious.’”  Arzuman, 843 So. 2d at 952 (citations omitted). While a trial court has discretion to dismiss an action for fraud on the court, it should exercise this severe sanction “only in extreme circumstances.” Id.

When imposing this harshest of sanctions, trial courts should weigh the “policy favoring adjudication on the merits” with the need to “maintain the integrity of the judicial system.” Id.; Bass v. City of Pembroke Pines, 991 So. 2d 1008, 1011 (Fla. 4th DCA 2008).  While it appears Prentice may have a selective memory regarding his medical history, the issue is not whether any member of this panel would make the same decision as the trial judge given the facts of this case. Bass, 991 So. 2d at 1011. The ultimate question is “whether reasonable minds could differ as to the propriety of that decision.” Id. We find that reasonable minds could differ under the facts of this case....
As noted by the court in Bologna v. Schlanger, 995 So. 2d 526, 529 (Fla. 5th DCA 2008), rev. denied, 7 So. 3d 1098 (Fla. 2009), in reversing a dismissal for alleged fraud, the fact that the plaintiff’s answers to interrogatories were adequate for the defense to learn of her treatment for back pain prior to her deposition, was “relevant to whether there existed a scheme to defraud.”
The court reversed the trial court's order excluding the evidence of the prior injury from the trial.  The court stated "A plaintiff may properly be cross-examined as to his previous injuries, physical condition, claims or actions for injuries similar to those constituting the basis for the present action for the purpose of showing that his present physical condition is not the result of the injury presently sued for, but was caused wholly or partially by an earlier injury or pre-existing condition."  The court also noted that the defendant was clearly prejudiced by the exclusion because the plaintiff's attorney used the lack of evidence to his advantage.  The court stated that "Case law indicates it is improper for a lawyer, who has successfully excluded evidence, to seek an advantage before the jury because the evidence was not presented."

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