Opinion
No. 81-1320.
August 17, 1983. Rehearing Denied September 23, 1983.
Appeal from the Circuit Court, Broward County, Raymond J. Hare, J.
Paul H. Stevens of Sheldon Yavitz, Miami, for appellant.
Kurt Klaus and Martin S. Saxon of Engel Saxon, Miami, for appellee.
The question in this appeal is whether a party may maintain an action for damages based on fraudulent misrepresentation in the inducement to execute a satisfaction without first setting aside the satisfaction. We answer in the negative and reverse.
Edward Domecki obtained a money judgment in federal court against Billy Watson. As a result, the parties entered into an agreement which called for Watson to transfer title to two automobiles (a 1955 Bentley and a 1926 Fiat) to Domecki. Also, Watson agreed to pay Domecki $3,000 in cash. At this juncture — apparently before Domecki had an opportunity to inspect the cars which were garaged in Atlanta, Georgia — the parties executed and filed a satisfaction of judgment.
Approximately two years later, Domecki filed a fraud action in state court against Annette Watson (Billy Watson's wife) and a corporation which did business under the name Prestige Auto Car. Two years after the commencement of the state litigation (and four years from the date of the execution of the satisfaction), Domecki amended his complaint and added Billy Watson as a defendant. The gist of the complaint was that prior to the execution of the satisfaction, Watson represented that both vehicles were in mint condition, that the Fiat was valued between ten and twelve thousand dollars and that the Bentley was valued between five and seven thousand dollars. Domecki further alleged that upon inspection, he discovered that the vehicles were worth far less than the stated sums.
As the state litigation proceeded, Mrs. Watson and the corporate defendant obtained summary judgments in their favor and were removed from the suit. Billy Watson obtained a partial summary judgment in his favor because the court found that Domecki had not suffered any damages with respect to the 1955 Bentley. The issue of the misrepresentation of the Fiat, however, was submitted to the jury which returned a verdict for Domecki in the sum of $10,000.
Throughout the litigation, Watson asserted that the satisfaction in the federal case barred the state action. Domecki responded that the satisfaction was not at issue. Instead, he argued that this case only involved a cause of action arising from the intentional tort of fraudulent misrepresentation. At first blush, the time differential between the event giving rise to the federal case and the subsequent fraudulent misrepresentations seems to support Domecki's position. On the other hand, it is certain that to prevail in the state action, Domecki had to impeach the validity of the federal satisfaction by demonstrating that it was induced by fraud. As indicated above, this was the entire theory of the case. It is particularly evident from the manner in which the damages were assessed. Since Domecki claimed that he received less than he bargained for, the jury was instructed to compute compensatory damages by measuring the difference between the market value of the goods as represented by Watson and their actual market value. In effect, the jury's verdict represents a finding that the original controversy between the parties had not been terminated by the satisfaction and that an award of $10,000 was required to effectuate its original purpose. The question that we must answer is whether the state action was permitted in light of Domecki's failure to have the satisfaction set aside by the federal court.
Recently, describing the legal effect of a satisfaction of judgment, we said that it "`is the last act and end of the proceeding.' A satisfaction signifies that the litigation is over, the dispute is settled, the account is paid." Morris North American, Inc. v. King, 430 So.2d 592 (Fla. 4th DCA, 1983). In the same case, we cited with approval the Second District's opinion in Ford Motor Credit Co. v. Simmons, 421 So.2d 698 (Fla. 2d DCA 1982) which involved a complaint filed in the circuit court to set aside a mistakenly entered satisfaction of judgment of the county court. The Second District held that the circuit court did not have jurisdiction to entertain an action which attacked a satisfaction of judgment from another court. The appellate court reasoned that
[e]very court of law possesses inherent equitable power sufficient to control its own judgments, and this includes power to set aside a satisfaction of one of its own judgments. . . . This may be accomplished by motion in the original action . . . or by an independent action brought specifically for that purpose in the court which entered the judgment.Id. at 700 (citations omitted; emphasis added).
In the case at bar, the attempt to utilize a state forum to effectively impeach a satisfaction filed in a federal action, dramatically illustrates the necessity for the rule which we announce today: A party may not maintain a cause of action that inherently impeaches the validity of a prior satisfaction without first setting aside the satisfaction by a direct challenge to its validity. This principle is essential to safeguard the dignity and effectiveness of prior judgments and orders. To hold otherwise would be to sanction covert challenges to the integrity of prior judicial labor. Since the verdict in the case below necessarily impeached the validity of the federal satisfaction, it is violative of this principle and, thus, cannot be allowed to stand. Accordingly, it is
REVERSED.
BERANEK, J., concurs.
DOWNEY, J., dissents with opinion.
Appellee, Domecki, as the holder of a judgment in excess of $17,000 against Watson, obtained the levy of a writ of execution on property owned by Watson and the property was advertised for sale. Prior to sale, Watson contacted Domecki to negotiate a settlement and eventually the parties agreed that Watson would convey to Domecki two vintage automobiles, a 1955 Bentley and a 1926 Fiat, plus $3,000 in cash in satisfaction of the judgment. On or about August 18, 1976, the agreed items were transferred to Domecki, who furnished Watson with a satisfaction of judgment and the writ of execution was discharged.
This litigation arose when Domecki sued Watson, his wife and Connections, Inc., d/b/a Prestige Auto Car, for compensatory and punitive damages, charging them with fraudulently misrepresenting the value of the two cars involved in the transfer. According to Domecki, Watson had represented the value of the 1926 Fiat as between $10,000 and $12,000 and the Bentley as between $5,000 and $7,000. Both cars were represented as being "mint cars, rated as ninety point show cars." Domecki was not able to inspect the cars before the transaction was closed.
The case was tried by a jury, which returned a verdict in favor of Domecki for $10,000 in compensatory damages.
In his first point on appeal, Watson contends that the trial court erred in refusing to grant his motion to dismiss, motion for summary judgment, and motion for directed verdict. In each of said motions, made at different stages of the proceeding, Watson argued that Domecki was improperly attempting to impeach the satisfaction of judgment in a collateral proceeding. I would reject that contention as did the trial judge. If that were the purpose of this suit, Watson's argument would be effective. However, this is not a suit to set aside, vacate or nullify the satisfaction of judgment. The judgment remains satisfied of record and that litigation is ended. This suit is for an independent tort committed by Watson in actively misrepresenting the value of the cars he agreed to convey to Domecki to pay the debt owed, which was represented by the judgment in question.
No doubt Domecki could have, by motion or independent action, requested that the District Court set aside the satisfaction because of the alleged fraud. However, in engineering the agreement between the parties to settle Domecki's claim, Watson's actions constituted intentional tortious conduct for which the law may allow compensatory and punitive damages. I perceive no reason why Domecki could not pursue that course of action.
As indicated above, I am unable to agree with the majority that the judgment obtained herein has the effect of impeaching the legal effect of the satisfaction of the Federal Court judgment. Nor do I see any basis for the majority's finding solace in the recent case of Morris North American, Inc. v. King, 430 So.2d 592 (Fla. 4th DCA 1983). In Morris the plaintiff sought to amend the satisfied final judgment via a 1.540 motion without attempting to vacate the satisfaction. I suggest that Morris simply is not on point.
Finally, I see nothing covert in Domecki pursuing directly his cause of action in tort, rather than taking the alternative route of attacking the satisfaction in the Federal Court.
Finding no other reversible error demonstrated by appellant, I would affirm the judgment appealed from.