In a previous post, Distinctions in Claims of “Fraud on the Court,” Common Law Fraud and Judiciary Law 487, I outlined the basic principles underlying various claims that are typically referred to under the rubric of “fraud on the court.” Unlike the common law cause of action of fraud or the statutory claim under Judiciary Law 487 against attorneys who seek to deceive the court in litigation proceedings, the common law doctrine of “fraud on the court” has it own judicial-made requirements and remedies. A new decision of the Appellate Division, Second Department (Bhim v Platz, 2022 NY Slip Op 04531(2d Dep’t Decided July 13, 2022)), shows that an isolated mistake during the course of a trial, although plainly false, does not rise to the level of the extreme and intentionally-deceitful conduct warranting the drastic remedies for “fraud on the court.”
Fraud on the Court
The doctrine known as “fraud on the court” is a judicial-made legal creature designed to address situations where the integrity of our justice system is compromised by intentionally-deceitful conduct of parties to lawsuits and/or their attorneys. A good description of “fraud on the court” can be found in the New York Court of Appeals decision in CRD CrÉances S.A.S. v Cohen, 23 NY3d 307 (2014). The Court there explained that “a court has inherent power to address actions which are meant to undermine the truth-seeking function of the judicial system and place in question the integrity of the courts and our system of justice.” The Court continued more specifically:
Fraud on the court involves wilful conduct that is deceitful and obstructionistic, which injects misrepresentations and false information into the judicial process “so serious that it undermines . . . the integrity of the proceeding” (Baba-Ali v State of New York, 19 NY3d 627, 634 [2012] [citation and quotation marks omitted]). It strikes a discordant chord and threatens the integrity of the legal system as a whole, constituting “a wrong against the institutions set up to protect and safeguard the public” (Hazel-Atlas Glass Co. v Hartford-Empire Co., 322 US 238, 246 [1944]; see also Koschak v Gates Constr. Corp., 225 AD2d 315, 316 [1st Dept 1996] [“The paramount concern of this Court is the preservation of the integrity of the judicial process”]).
The Court then outlined the remedies for such offensive conduct, instructing that “where a court finds, by clear and convincing evidence, conduct that constitutes fraud on the court, the court may impose sanctions including, as in this case, striking pleadings and entering default judgment against the offending parties to ensure the continuing integrity of our judicial system.” Nevertheless, the Court cautioned that dismissal of a case is an extreme remedy, providing guidance for the sanctions to be imposed (citations omitted):
Dismissal is most appropriate in cases like this one, where the conduct is particularly egregious, characterized by lies and fabrications in furtherance of a scheme designed to conceal critical matters from the court and the nonoffending party; where the conduct is perpetrated repeatedly and wilfully, and established by clear and convincing evidence, such as the documentary and testimonial evidence found here. Dismissal is inappropriate where the fraud is not “central to the substantive issues in the case” …, or where the court is presented with “an isolated instance of perjury, standing alone, [which fails to] constitute a fraud upon the court” … . In such instances, the court may impose other remedies including awarding attorney fees …, awarding other reasonable costs incurred …, or precluding testimony. In the rare case where a court finds that a party has committed fraud on the court warranting dismissal, the court should note why lesser sanctions would not suffice to correct the offending behavior … .
Bhim Decision — False Trial Demonstrative
In Bhim, the underlying trial involved a medical malpractice claim. During his summation at the trial, the defense attorney “displayed to the jury a printed enlargement of what purported to be an excerpt of the verbatim trial testimony of the plaintiffs’ expert witness. Defense counsel emphasized that, on cross-examination, the witness had responded affirmatively to a particular question, which consisted of two parts, separated by intervening colloquy among the attorneys and the court. During jury deliberations, it came to light that the printed enlargement had excised not only the intervening colloquy but also the second portion of the subject question. The court then suspended deliberations, informed the jury that the demonstrative reproduction of the testimony was incorrect, provided the jury with a read-back of the correct testimony, and reminded the jury that summations do not constitute evidence.”
Thereafter, the plaintiffs’ counsel requested, among other things, that the trial court strike the defendants’ answer and direct a verdict in favor of the plaintiffs, arguing that defense counsel had perpetrated a fraud on the court by misrepresenting the testimony of the plaintiffs’ expert witness during his summation. The trial court denied the application at that time.
The jury then returned a verdict in favor of the defendants. The plaintiff reiterated its request to set aside the verdict, with formal motions. The plaintiff included a request under CPLR 3001 for a “declaratory judgment” that defense counsel’s conduct amounted to fraud on the court, for which the verdict should be overturned. The trial court denied these motions and plaintiff appealed. The Second Department affirmed in all respects.
As to the argument that defense counsel committed a fraud on the court, the Second Department sensibly explained that what happened during the summation was not the type of egregious and overarching deceitful conduct that embodies the doctrine of fraud on the court, and observing that the isolated error was effectively addressed by the trial court to mitigate any actual impact on the jury’s decision. The Second Department explained:
Misconduct amounting to a fraud on the court “involves wilful conduct that is deceitful and obstructionistic, which injects misrepresentations and false information into the judicial process so serious that it undermines the integrity of the proceeding” (CDR Créances S.A.S. v Cohen, 23 NY3d 307, 318 [alterations and internal quotation marks omitted]; see JNG Constr., Ltd. V Roussopoulos, 170 AD3d 1136, 1141). “[I]n order to demonstrate fraud on the court, the nonoffending party must establish by clear and convincing evidence that the offending party has acted knowingly in an attempt to hinder the fact finder’s fair adjudication of the case and his [or her] adversary’s defense of the action” (CDR Créances S.A.S. v Cohen, 23 NY3d at 320 [internal quotation marks omitted]; see JNG Constr., Ltd. V Roussopoulos, 170 AD3d at 1141). “A court must be persuaded that the fraudulent conduct, which may include proof of fabrication of evidence, perjury, and falsification of documents[,] concerns issues that are central to the truth-finding process” (CDR Créances S.A.S. v Cohen, 23 NY3d at 320-321 [internal quotation marks omitted]; see JNG Constr., Ltd. V Roussopoulos, 170 AD3d at 1141).
Here, while defense counsel’s misrepresentation of the subject trial testimony during his summation was, at a minimum, inexcusably careless, it did not constitute a fraud on the court. Generally, an isolated incident of misconduct will not rise to the level of a fraud on the court (see CDR Créances S.A.S. v Cohen, 23 NY3d at 319-323), particularly where, as here, the alleged fraud occurred in the context of a summation, which does not constitute evidence.
Absent fraud, litigants are still “entitled, as a matter of law, to a fair trial free from improper comments by counsel or the trial court” (Rodriguez v City of New York, 67 AD3d 884, 886; see Nieves v Clove Lakes Health Care & Rehabilitation, Inc., 179 AD3d 938, 940). Here, defense counsel’s conduct was “not so pervasive or prejudicial as to have deprived [the plaintiffs] of a fair trial” (Fortune v New York City Hous. Auth., 201 AD3d 705, 708). Furthermore, the Supreme Court effectively cured any prejudice to the plaintiffs that may have resulted from defense counsel’s conduct by suspending deliberations, advising the jury that the reproduction of the subject testimony in defense counsel’s demonstrative exhibit was incorrect, providing the jury with the correct testimony, and reminding the jury that summations are not evidence (see Shehata v Koruthu, 201 AD3d 761, 763; Fekry v New York City Tr. Auth., 75 AD3d 616, 617; cf. Cohn v Meyers, 125 AD2d 524, 527-28). Accordingly, a new trial was not warranted.
Commentary
The “fraud on the court” doctrine does provide substantial remedies that can effectively ameliorate egregious deceitful conduct perpetrated during the course of a lawsuit, including dismissing the perpetrator’s case altogether. However, the doctrine is confined to truly intentional, deceitful and obstructionistic conduct that pervades a case and strikes at the heart of the judicial system, rather than isolated errors, no matter how careless.