Opinion
C.A. No. 05C-10-307-PLA.
Submitted: June 18, 2007.
Decided: July 27, 2007.
Upon Defendants Harold Williams And Yellow Transporation, Inc.'S Motion To Dismiss.
DENIED.
Timothy E. Lengkeek, Esquire, YOUNG CONAWAY STARGATT TAYLOR LLP, Attorney for Claude J. and Connie M. Smith.
James M. Lennon, Esquire, WOMBLE CARLYLE SANDRIDGE RICE PLLC, Attorney for Harold M. Williams and Yellow Transportation, Inc.
Robert J. Leoni, Esquire, SHELSBY LEONI, Attorney for Donald A. Smith.
James P. Hall, Esquire, PHILLIPS GOLDMAN SPENCE, P.A., Attorney for James F. Ash d/b/a Ash's Construction Co., Inc. Ash's Equipment Rentals, Inc.
Daniel P. Bennett, Esquire, MINTZER SAROWITZ ZERIS LEDVA MEYERS LLP, Attorney for Nationwide Mutual Insurance Company.
I.
Defendants Harold Williams ("Williams") and Yellow Transportation, Inc. ("Yellow") (collectively "Defendants") have moved to dismiss this personal injury action pursuant to Rule 41(b) of the Superior Court Civil Rules. The request for dismissal is somewhat unusual in that the motion is based on allegations that Plaintiff Claude Smith ("Smith") has engaged in a pattern and scheme of deception by providing false or misleading testimony on numerous occasions. To cure this egregious conduct and unnecessary expense to the Court, Defendants seek a finding that Smith's perjury is tantamount to a "fraud on the Court" which should be remedied by dismissal. For the reasons that follow, Defendants' Motion to Dismiss on the ground of fraud is hereby DENIED.
II.
This dispute arises out of two separate motor vehicle accidents, the first occurring on January 8, 2004, and the second on March 20, 2004. The first accident involved a company truck driven by Williams, an employee of Yellow. Yellow alleges that the parties advised the police that they were not injured and drove away from the scene, with only minor damage to Smith's car. In the second accident, Smith was a passenger in a car driven by an individual with whom Smith had been drinking alcohol. The vehicle ran off the road and crashed into a house. Although Smith was treated at a hospital, he was released within 24 hours.
There are no other details provided in either the Motion to Dismiss or the responses thereto that indicate the injuries Smith sustained in the second accident.
In this lawsuit, Smith asserts that he is permanently and totally disabled as a result of these two accidents. He submits that his car was "totaled" in the first accident when Williams, without warning, pulled a loaded truck tractor and trailer directly into Smith's lane of travel. Smith claims that the accident caused permanent injuries for which he was treated within days after the accident. His alleged injuries include a broken rib and an abnormal lower spinal disc. Smith submits that he underwent two surgeries that his surgeon relates to the accident and that his current disability has nothing to do with any of his preexisting medical conditions.
Defendants' present motion for relief is based upon allegations that Smith has perpetrated fraud on the Court by a series of false claims and dishonest statements which defendants contend constitutes perjury. Williams and Yellow argue that this Court has inherent authority to dismiss Smith's action to correct dishonesty or fraud committed upon it. To support their position that dismissal is appropriate, Defendants identify five instances during the course of this litigation when Smith has given conflicting accounts of the details of the accident or of the nature and extent of his injuries.
The first such instance concerns a discrepancy between Smith's statement made a few days after the January 8, 2004 accident and his subsequent deposition testimony more than three years later with respect to whether he had seen the Yellow's truck before impact. Earlier he described seeing the truck and swerving to avoid the accident. By the time of his deposition some three years later he flatly denied seeing the truck before swerving or breaking. Defendants contend that one of these statements is "necessarily false."
It does not appear that this was a statement under oath.
The second subject of allegedly contradictory claims concerns Smith's preexisting lung condition. Apparently, Smith is no stranger to litigation in the Superior Court as he sued in 2003 to recover damages for asbestos exposure. According to his testimony in connection with that case, Smith's lungs were so severely damaged that he could not do routine activities without shortness of breath. Yet, in this litigation, Smith reported that his lung condition was so mild that he could even jog a mile. It is argued that these statements, both under oath, cannot both be true.
Defendants further contend that Smith has sought to recover damages for injuries he claims are due to these accidents, when in fact they were not. Rather, Defendants allege that he failed to disclose that many of the same injuries, complaints, or conditions were preexisting as evidenced by his medical records. Thus, it is argued that he has misrepresented his medical history.
The fourth area of inconsistency identified by Defendants concerns the severity or extent of the injuries sustained by Smith in the January 8th accident. Shortly after the accident, Smith provided a history to an emergency department physician claiming that he injured only his chest and back, causing only minor discomfort. By the time of his deposition, however, the injuries had expanded to include his head, neck, left leg, right hand, and eyes. Notwithstanding all of his earlier descriptions of relatively minor injuries, Smith now maintains that he is permanently disabled.
Furthermore, the statements Smith provided in connection with his asbestos personal injury lawsuit are also identified by Defendants as being in conflict with deposition testimony he has provided in this case. As one example, Smith testified that he has never even tried to climb a ladder since the January 8, 2004 accident, even though hospital records document that he was actually hospitalized as a result of a fall from a ladder after that date.
Lastly, Smith's job duties are cited as an example of glaring inconsistency in that Smith claimed to have job duties requiring physical work "all the time." His employer's vice president for human resources, however, testified that his job was managerial, and that his union contract prohibited him from performing manual labor.
The foregoing areas of dishonesty or falsehood are cited by Defendants as illustrative of Smith's perjury, blatant disregard for the truth, and conduct amounting to fraud on the Court. Defendants contend that the quantity and nature of these instances of untruthfulness strike at the very core of this case and have caused the Defendants to incur unnecessary expense to defend this case. Defendants argue that the only appropriate remedy for this perjury and fraud on the Court is dismissal. To support this request, Defendants have cited a handful of state and federal court decisions that establish and emphasize the Court's inherent power to impose sanctions, including dismissal of a case, to punish dishonesty or fraud on the Court.
Chambers v. Nasco, Inc., 501 U.S. 32, 44 (1991); Aoude v. Mobil Oil Corp., 892 F.2d 1115, 1117-18 (1st Cir. 1989); Gebhart v. Ernest DiSabatino Sons, 264 A.2d 157, 159 (Del. 1970).
Smith has responded to the Motion by filing a Motion to Strike the instant Motion to Dismiss on the ground that it was not filed before the dispositive motion deadline (April 4, 2007), was rejected and not docketed by the Prothonotary, and was not properly noticed for hearing. In the alternative, Smith argues that the undisputed facts support the allegations of the complaint, that Smith has not committed perjury regarding either his medical condition, current disability, or the extent of his job responsibilities, and that there has been no fraud perpetrated on the Court. Smith relies on several federal cases, holding that perjury does not amount to a "fraud on the Court" warranting such an extreme sanction as dismissal.
See Pfizer, Inc. v. Int'l Rectifier Corp., 538 F.2d 180 (8th Cir. 1976), cert. denied, 429 U.S. 1040 (1977); Serzysko v. Chase Manhattan Bank, 461 F.2d 699 (2d Cir.), cert. denied, 409 U.S. 883 (1972); Porcelli v. Joseph Schlitz Brewing Co., 78 F.R.D. 499 (E.D. Wisc.), aff'd without opinion, 688 F.2d 838 (7th Cir. 1978); Konigsberg v. Sec. Nat'l Bank, 66 F.R.D. 439 (S.D.N.Y. 1975); Great Coastal Express, Inc. v. Int'l Bhd. of Teamsters, 675 F.2d 1349 (4th Cir. 1982); Lockwood v. Bowles, 46 F.R.D. 625 (D.D.C. 1969).
III.
I turn first to the Motion to Strike. Notwithstanding the fact that the motion was filed after the dispositive motion deadline had expired, the Court declines to strike the Motion to Dismiss. Rather, the Court will consider Defendant's Motion to Dismiss on its merits because the nature and substance of the pleading appears to be more akin to a motion seeking sanctions. Unlike routine dispositive motions, which seek dismissal on the basis of a lack of dispute as to the material facts, or the absence of a cognizable claim for relief, this motion alleges that Smith has perpetrated a fraud on the Court. If this Court were to conclude that Smith's actions do in fact constitute a fraud on the Court, it would be hard-pressed to ignore such conduct at any point in the litigation, regardless of the deadlines set forth in the Court's Scheduling Order and irrespective of whether the relief requested would ultimately dispose of the case. For this reason, the Court has chosen to consider the motion on the merits in order to delve further into the issue of whether the numerous discrepancies in Smith's representations constitute a fraud on the Court.
Having considered the testimonial discrepancies identified in Defendant's Motion to Dismiss and the cases cited by the parties, the Court finds that Smith's conduct does not rise to the level of fraud on the Court sufficient to justify dismissal of this action for the reasons set forth hereafter.
IV.
Unquestionably, like the federal courts, this Court has the inherent power to manage its own affairs and to achieve the orderly and expeditious disposition of it business. In connection with this power, the Court is necessarily accorded considerable latitude in dealing with serious abuses of the judicial process. In fact, the Court's decision to dismiss a case on the ground of abuse or fraud is reviewed by the standard of whether the action taken was within the realm of sound judicial discretion.
Chambers, 501 U.S. at 43; Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944); Aoude, 892 F.2d at 1117-18; Gebhart, 264 A.2d at 159.
Aoude, 892 F.2d at 117.
Link v. Wabash R.R. Co., 370 U.S. 626 (1962); Gebhart, 264 A.2d at 159.
Notwithstanding the breadth of a court's inherent power to deal with abuses of the judicial process, a trial court's discretion is not without limits. Although dismissal in a proper case is not conditioned upon the prior imposition of less serious sanctions, courts are mindful that dismissal is the ultimate blow to a lawsuit, precipitously denying litigants their "day in Court." Accordingly, such a drastic sanction is generally reserved for instances where the defaulting party's misconduct is correspondingly egregious.
See, e.g., Pfizer, 538 F.2d at 193-95; Serzysko, 461 F.2d at 702; Porcelli, 78 F.R.D. at 500-01; Konigsberg, 66 F.R.D. at 442.
The federal courts that have struggled with the definition of "fraud on the court" have generally done so in the context of a Rule 60(b) independent action for relief from a final judgment. While these courts have found such a definition elusive, they have agreed that the concept should be construed narrowly. Thus, "fraud on the court" is typically confined to the more serious, but fortunately rare, cases involving a corruption of the judicial process itself, such as bribery of a judge or juror, improper influence exerted on the court by an attorney, or involvement of an attorney as an officer of the court in the perpetration of fraud. In each of these instances, the integrity of the court and its ability to function impartially are directly affected. Moreover, a finding of fraud on the court must be supported by clear, unequivocal, and convincing evidence. As Professor Moore has suggested in an oft-cited quote:
See, e.g., Great Coastal Express, Inc. v. Int'l Brotherhood of Teamsters, 675 F.2d 1349 (4th Cir. 1982); Serzysko, 461 F.2d at 702; Porcelli, 78 F.R.D. at 500-01; Lockwood v. Bowles, 46 F.R.D. 625, 630-31 (D.D.C.1969).
Bar Rubber Prod. Co. v. Sun Rubber Co., 425 F.2d 1114 (2d Cir.), cert. denied, 400 U.S. 878 (1970).
Fraud upon the Court should, we believe, embrace only that species of fraud which does or attempts to, defile the Court itself, or is a fraud perpetrated by officers of the Court so that the judicial machinery cannot perform in the usual manner its impartial task of adjudging cases that are presented for adjudication.
7 JAMES WM. MOORE ET AL, MOORE'S FEDERAL PRACTICE ¶ 60, 33 at 512-513. See also Martina Theater Corp. v. Schine Chain Theaters, 278 F.2d 798 (2d Cir. 1960).
In Hazel-Atlas Glass Co. v. Hartford-Empire Co., for example, Hartford-Empire Co. ("Hartford") had sought a patent for a device that manufactured glass by a process known as "gob-feeding." Hartford officials devised a scheme to assure the success of the patent. The plan was to attribute authorship of an article in a trade magazine that praised the process to a nationally known, supposedly disinterested and impartial pseudo-author when, in reality, the article was written by a company patent attorney. With the article included in the application, a patent was granted. Shortly thereafter, Hartford brought suit in Federal District Court charging Hazel-Atlas with infringing the patent. The District Court dismissed the suit on the ground that no infringement was proved, without reference to the article. On appeal, however, Hartford directed the court's attention to the article and the Court of Appeals reversed, quoting the article at length.
322 U.S. 238 (1944).
Following the Appellate Court decision, Hazel-Atlas began investigating the source of the article. During the same period, Hartford representatives paid the "author" $8,000 for his services despite the fact that there was no prior agreement between the parties that the individual would be compensated. Hazel-Atlas eventually brought suit after all of these circumstances were fully disclosed. The Court of Appeals denied relief on the grounds that the fraud was not newly discovered, and that the article was not a primary basis of its earlier decision.
The United States Supreme Court reversed, characterizing the fraud as a "deliberately planned and carefully executed scheme to defraud not only the Patent Office but the Circuit Court of Appeals." In reasserting the historical equity power of courts to set aside judgments, the enforcement of which would be manifestly unconscionable, the Court was influenced not only by the deliberate scheme to directly subvert the judicial process, but further by the fact that the fraudulently obtained legal monopoly did not merely concern private parties but also the public at large:
Id. at 245-246.
[T]ampering with the administration of justice in the manner indisputably shown here involves far more than an injury to a single litigant. It is a wrong against the institution set up to protect and safeguard the public, institutions in which fraud cannot complacently be tolerated consistently with the good order of society. . . . The public welfare demands that the agencies of public justice be not so impotent that they must always be mute and helpless victims of deception and fraud.
Id. at 246.
Courts have sometimes sought to distinguish extrinsic fraud, i.e. that fraud that affects the integrity and fairness of the judicial process itself, from intrinsic fraud, which can be discoverable through the ordinary processes and rules of the trial court. Fraud is extrinsic where a party is prevented by trick, artifice, or other fraudulent conduct from fairly presenting his claim or defenses or introducing relevant and material evidence.
Pfizer, 538 F.2d at 195; Kupferman v. Consol. Research Mfg. Corp., 459 F.2d 1072, 1081 (2d Cir. 1972); Serzysko, 461 F.2d at 702; Porcelli, 78 F.R.D. at 501; Lockwood, 46 F.R.D. at 630.
Under this doctrine, fraud must be extrinsic to justify relief. That is, the fraud must be so subversive that it actually prevents an issue from being joined or a party from making a valid claim or defense. Generally speaking, perjury and fabricated evidence are not grounds for dismissal as these are evils that can be exposed at trial and court rules are fashioned to facilitate such revelations.
Great Coastal Express, Inc., 675 F.2d at 1357.
Applying these concepts of fraud on the Court to Defendants' allegations in this motion, I conclude that none constitute that species of fraud which attempts to disrupt the judicial process so that it cannot perform its task of fairly and impartially adjudicating cases. Even assuming the truth of the matters contained in the motion — that Smith has told conflicting stories at different times for the purpose of gaining an advantage in this and other litigation — Defendants have not alleged conduct amounting to extrinsic fraud on the Court, as that phrase has traditionally been defined, sufficient to justify dismissal at this stage of the proceedings.
The position of Defendants here is that Smith's dishonesty is so rampant that it prevents the Court and the parties from understanding the truth or falsity of his claims. It is argued that Smith's blatant misrepresentations of the truth on key issues represent an effort to commit fraud on the Court, causing tremendous expenditures of the Court's and the litigants' resources. By employing the Court's inherent power to terminate this objectionable course of conduct, Defendants seek relief in the form of dismissal at this juncture even prior to trial.
Even though Defendants have identified a number of inconsistencies, some of which appear material to the issues in this case, and even though the possibility of perjury or false testimony potentially overlaps into other litigation filed by Smith in this Court, I am still not persuaded that such conduct is so manifestly unconscionable as to constitute fraud on the Court as distinguished from fraud between the parties.
Indeed, the courts in this country are no strangers to dishonesty and false testimony. To be sure, the primary purpose of a trial is to seek out the truth from all of the strategies, tactics, hyperboles, exaggerations and even, in some cases, blatant dishonesty and falsehoods. The possibility of a witness or a party testifying falsely is always a risk in our judicial process, but there are traditional safeguards within the system to guard against such false testimony or fabricated evidence. The most basic of these is vigorous cross-examination. The legal system encourages and expects litigants to root out dishonesty to the extent possible. The relationship between skillful cross-examination and a witness' credibility is also emphasized in a court's instructions to the jury where the relevant factors in assessing credibility are outlined. These instructions, and the collective experience and common sense of the jury, are generally sufficient tools to expose perjury or false testimony. While the statements identified in Defendant's motion suggest dishonesty, dismissal at this stage is an extreme remedy. Even considering that this Court does have the power and discretion to dismiss this case, a finding of fraud on the Court requires far more than a handful of discrepancies, even if the conflicting statements were all made under oath.
The Court therefore concludes that Smith's apparent dishonesty, however reprehensible, does not justify the relief requested in this motion. The fact that the Court has declined to dismiss this case does not, however, limit the Court from stating what may already be apparent here. That is, the success of a personal injury case is more dependent on the credibility of the plaintiff than on any other factor. Judging from the work done by defense counsel in identifying and exposing the conflicts raised in this motion, Smith's cross-examination will likely be formidable. When Delaware juries sense overreaching or a lack of candor on the part of a plaintiff seeking a damages award, they do not hesitate to respond accordingly. Moreover, in the event that these claims manifest themselves as perjury at trial or unfairly prejudice defendants, there are other sanctions available to the Court.
While the discrepancies in Smith's reports and depositions might be inadequate, even when viewed collectively, to warrant a finding of fraud or to trigger dismissal, they will certainly be fodder for cross-examination at trial.
Even the most persuasive expert witnesses or objective medical findings by highly respected physicians will not compensate for a plaintiff's lack of candor. Delaware juries will frequently use their verdicts to punish dishonesty and they are not reluctant to express their dissatisfaction when asked to give up their valuable time for a litigant who seeks to gain more than he or she is legally entitled to be awarded.
Accordingly, while I cannot conclude that the instances recounted in Defendants' motion are illustrative of a deliberate scheme to directly subvert the judicial process, Smith should still be concerned about the impact that exposure of these discrepancies may have upon the jury, and the likelihood that any award may be seriously compromised by virtue of any dishonesty exposed at trial. Counsel would be wise to take these factors into consideration, as well as the costs of taking this case to trial, in any future settlement negotiations.
V.
For all of the foregoing reasons, Defendants Williams and Yellow's Motion to Dismiss is hereby DENIED.IT IS SO ORDERED.