Court of Appeals reopens equitable distribution due to “fraud upon the court”

Posted Wednesday, August 26th, 2020 by Gregory Forman
Filed under Family Court Procedure, Of Interest to Family Court Litigants, Of Interest to Family Law Attorneys, South Carolina Appellate Decisions, South Carolina Specific

The August 26, 2020, Court of Appeals opinion in Sanders v. Smith presents an unusual resolution of a Rule 60 motion.

Husband filed divorce proceedings in 2009 in South Carolina. Wife had never resided in this state. Husband attempted to serve Wife the complaint but had her street number wrong. Husband eventually obtained an order of publication, proceeded with the divorce hearing, and, in 2010, obtained a divorce that found the parties’ had already divided their assets. Husband subsequently remarried.

Wife claimed she became aware of the divorce in 2014 but did not become aware that the divorce decree resolved equitable distribution until Husband’s attorney provided her a copy of the decree in 2015. In September 2016, Wife filed a motion pursuant to Rule 60(b), SCRCP, alleging the divorce and equitable distribution should be set aside because Husband was aware of her correct address when attempting to serve her and that he had committed a “fraud upon the court.” Her motion sought her own divorce and an equitable distribution of Husband’s military retirement. The family court found Wife had waited too long to bring her motion. It found she failed to establish Husband intentionally misrepresented her address and therefore found service was not defective. It refused to reopen the case. Wife appealed.

The Court of Appeals determined the family court did not err by finding Wife failed to show Husband committed fraud upon the court in obtaining service by publication. Accordingly, it found that service was proper and therefore Rule 60(b)(4), SCRCP did not render the divorce void. It refused to vacate the divorce.

However, the Court of Appeals still found that Wife’s Rule 60 motion was timely as to the equitable distribution issue. Wife’s motion appears to have been brought pursuant to Rule 60(b)(3) (“fraud, misrepresentation, or other misconduct of an adverse party”) but does not explain how Wife’s motion can be timely when a motion on this ground must be brought “not more than one year after the judgment, order or proceeding was entered or taken.” The only way Wife’s motion could be timely if brought pursuant to Rule 60(b)(4) under a claim that the judgment is void. Since the Court of Appeals rejects Wife’s contention that service was improper, it is unclear how the judgment could be void. If the judgement isn’t void, it is unclear how her motion could be timely.

Notwithstanding, the Court of Appeals concluded the family court erred by failing to find Husband committed fraud upon the court in representing the parties had previously divided all property. It stated that the record contains no evidence the parties had in fact divided all of their property. It found the evidence showed Husband intentionally misrepresented the truth when he alleged this in his complaint. The Court of Appeals vacated this provision of the divorce decree and concluded Wife is entitled to bring an action seeking equitable division and military benefits.

In the past, I have used Rule 60(b) motions to reopen cases in which my client hads not received proper notice of the complaint or final hearing, even when the Plaintiff employed proper procedures to send such notice. When a Defendant can show that the lack of notice was through no fault of his or her own, Rule 60(b)(4) arguably creates a “due process” claim that can be used to vacate the resulting final order. That’s not what appears to have happened here. The Court of Appeals’ finding that Husband committed fraud by claiming the parties had divided their property seems flimsy. They had divided it: husband has his and wife had hers. However to vacate the whole order would have rendered Husband’s subsequent marriage bigamous–to neither party’s advantage. The result the Court of Appeals reached may have been inelegant–and, I believe, based on incorrect legal reasoning–but it provides Wife a means to seek equitable distribution without rendering Husband’s new marriage void.

2 thoughts on Court of Appeals reopens equitable distribution due to “fraud upon the court”

  1. MJ Goodwin says:

    I think this “fraud” is very dull and benign in nature. I think it may actually have been more “boiler plate” than any effort at fraud. But it does cause one to be more cautious in drafting pleadings, especially when the other spouse is in the wind. I think, as attorneys, we tend to view those one sided cases as “easy”. This shows that they have the potential to blow up a long time after they appear to be over.

  2. Will Austin says:

    I agree with you that the appellant court’s opinion here lacks eloquence, but its application of Rule 60(b), SCRCP is sound. 60(b) enumerates 5 scenarios that can justify a court vacating an order. 3 of the 5 scenarios must be brought within 1 year from the order’s entry or the motion to vacate must be denied. However, 60(b) continues, stating, in pertinent 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 to set aside a judgment for fraud upon the court. ”

    As you stated, the court did not agree with the wife’s contention that the trial court’s order was void. Thus, it upheld the divorce. Notably, it held that the husband’s use of an incorrect address did not constitute an act of fraud upon the court. The appellant court simultaneously set aside the portion of the order finding that the parties divided marital property prior to the initiation of domestic proceedings because that part of the order was granted as a direct result of the husband’s false allegation that the parties previously divided the marital estate. In submitting this false allegation, he committed fraud upon the court.

    Prayers that seek relief from judgements obtained by committing fraud upon the court have no strict statutory time restrictions. Rule 60(b), accordingly, excepts void judgments and judgements obtained by defrauding the court from the one year time restriction imposed upon other potential grounds for vacating an order. The latter exception applies in this case. At least that’s my take on the appellant court’s decision in Sanders v. Smith.

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