Discovering Fraud After Your Lawsuit is Over in South Carolina

In some cases, after a party receives a civil or domestic (family law) judgment, a party may discover that the other party committed fraud through perjured testimony, failing to reveal evidence, hiding assets, etc. The issue then becomes whether the defrauded party can do anything to void the judgment and start the litigation process over again.

Rule 60(b)(3) of the South Carolina Rules of Civil Procedure allows a party to make a motion within one year (or as soon as reasonable) to set aside a judgment based on fraud. Whether a court will grant a new trial depends on whether the fraud is “intrinsic” or “extrinsic.” South Carolina’s courts may set aside a judgment if the fraud is considered extrinsic but will not void the judgment if the fraud is intrinsic. Intrinsic fraud is defined as “fraud which misleads a court in determining issues and induces the court to find for the party perpetrating the fraud. The classic case of intrinsic fraud is perjured testimony or presenting forged documents at trial. Allegations that a party failed to disclose documents also generally amount to intrinsic, rather than extrinsic, fraud.” Stated another way, intrinsic fraud is fraud that was presented to the court and considered at trial. Unfortunately, as unfair as it may seem, there is little to be done under these circumstances. Essentially, the court does not grant relief for intrinsic fraud based on a theory that this type of deception should be discovered during the lawsuit itself and that if the court allows relief for intrinsic fraud, then the stability of all judgments may be undermined.

Extrinsic fraud is “fraud that induces a person not to present a case or deprives a person of the opportunity to be heard.” The theory behind why the court may grant relief for extrinsic fraud is that such fraud prevents a party from fully exhibiting and trying his or her case, and consequently there was never a real contest before the court. Extrinsic fraud is collateral or external to the trial of the case. Stated another way, the fraud may be extrinsic if the defrauded party did not have access to the disputed information and did not have knowledge of the inaccuracies at the time of trial.

In a family court case, the court set aside a judgment because it found there was extrinsic fraud where the wife received money from the sale of her business that she did not disclose to her husband during the family court proceedings. The wife hid that money by instructing the purchaser of her business to wait until after her divorce was final to pay her the money. In finding there was extrinsic fraud, the court noted that there was no way the husband could have discovered the fraud because the purchaser was not a party to the divorce suit, and therefore the information was not subject to discovery by the husband. However, the legal distinction between intrinsic and extrinsic fraud, in this case, seems unclear. Specifically, during the case, the husband knew that his wife sold her business and he also knew the identity of the buyer. Using methods of discovery such as depositions and subpoenas, the husband could have asked the buyer to disclose all of the details of the sale. Thus, it would seem that the fraud was intrinsic because “this type of deception should be discovered during the lawsuit itself.”

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