South Carolina Divorce

Fraud in Family Court: Can A Family Court Final Judgement be Reversed Due to Fraud

One of the biggest problems we have in the judicial system is disclosure of information.  In certain instances failure to disclose information during litigation can lead to a reversal of a later Judgement.

In a criminal case, if exculpatory information is withheld during the litigation phase of the case and the Defendant is subsequently convicted, the Defendant’s conviction may very well be reversed.  In civil matters, such as in the Family Court, similar rules apply.

Addressing fraud in Family Court is a different standard, but if proven, will lead to a new trial.  I am currently involved in litigation involving an attorney trying to overturn a Family Court Judgement I obtained based upon an allegation of fraud.  During the discovery phase of the litigation (about 2 years ago), we delivered to opposing counsel a spreadsheet with a list of marital assets and our estimate of their value.  We told the opposing attorney that this spreadsheet was our internal working document and the figures had not been verified.  We then gave the opposing counsel a written Release permitting him to get any financial document from any source relevant to our clients financial situation.

Instead of doing his job and getting all of the underlying financial documents that formed the basis of our spreadsheet, he took the easy way out and relied upon the figures that we used in our spreadsheet, some of which were out of date, while also pocketing all of the retainer he was paid as “easy money”.

It turns out one of our figures was off by about $120,00.  When we reached a settlement with opposing counsel we did not know he took the easy way and did not bother to get the underlying documents establishing the value of the assets on our spreadsheet.  (Remember, we gave this attorney a Carte Blanche release to get whatever financial information from whatever source he deemed necessary).  He settled the case based upon the unverified data in our spreadsheet.  He is now suing our client for Fraud!

The rules permitting a reversal of a Civil Judgement based upon fraud are very clear.  In Ray v Ray the South Carolina Supreme Court established clear guidelines for reversing a final Judgement based upon fraud. The Court held that a party must prove that “extrinsic fraud” was committed during litigation.  The Court defined extrinsic fraud as the type of fraud that is:

“…often difficult, if not impossible to discover during the litigation.  For example, concealing assets through an unknown third-party not subject to discovery is extrinsic fraud in that it constitutes conduct or activities outside of the court proceedings which deprive the other party of the opportunity to fully exhibit and try his case”.

In other words, there must be a conscious scheme or plan designed to conceal information and defraud the opposing party, preventing them from fully presenting their case.  In my case, we told opposing counsel our figures were not verified and gave him a Release to get the underlying data.  It was up to opposing counsel (who, by the way, was paid very well) to do the job he was paid to do.  Without a plan or scheme to conceal our information from him he cannot prevail in his case.

The bottom line is that in order to overturn a Final Judgement due to Fraud in Family Court, a person must show a conscious scheme or plan to deprive a party of their ability to be heard.  It’s an extremely high standard and will generally fail.

 

 

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