Insurance carriers employ a number of tools to combat the prevalence of insurance fraud in personal injury claims, including education to adjusters regarding how to identify and respond to fraud, industrywide seminars from law firms and insurance organizations, and dedicated special investigative units (“SIU”) to probe the existence of fraud, which can support prosecution where the fraud amounts to a crime.1 Florida courts can impose harsh sanctions against those who abuse the system through fraudulent activities, such as financial sanctions, partial dismissals, and even dismissal of an entire claim; however, the burden of proving fraud and the reality of obtaining sanctions can make for a difficult argument. This article provides a general overview of the standards and criteria that Florida courts apply when determining whether dismissal of an entire personal injury claim is an appropriate sanction in cases in where plaintiffs have made fraudulent representations.
Occasionally, the fraudulent nature of a personal injury claim does not become apparent until the matter is in litigation — when defense counsel can begin to investigate and evaluate the nature of a plaintiff’s claim through the discovery process. Florida law provides that when a plaintiff lies to the court on matters central to the claim, which impede the ability to defend or undermine the truth-seeking function of the court, dismissal of the claim may be appropriate.2 The basis for keeping clearly fraudulent claims entirely out of court is that “a party who has been guilty of fraud or misconduct in the prosecution or defense of a civil proceeding should not be permitted to continue to employ the very institution it has subverted.”3 That said, while the tools for dismissal are readily available in the law, proving that dismissal is the appropriate sanction in any particular case is not a simple undertaking. Because Florida’s Constitution guarantees access to courts,4 Florida courts grapple with whether dismissing all or part of a claim for fraud is an overly harsh remedy.
In Florida’s “fraud upon the court” jurisprudence, the Fifth District Court of Appeal’s decision in Cox v. Burke was among the first in Florida to set forth a standard to assist parties and courts in determining when a plaintiff’s fraud is sufficiently pervasive to warrant dismissal of the entire claim.5 In Cox, the Fifth District sought to strike an appropriate balance. The Fifth District explained that courts must weigh the policy condemning fraudulent claims with the competing policy favoring adjudication of a plaintiff’s claim on its merits:
The requisite fraud on the court occurs where “it can be demonstrated, clearly and convincingly, that a party has sentiently set in motion some unconscionable scheme calculated to interfere with the judicial system’s ability impartially to adjudicate a matter by improperly influencing the trier of fact or unfairly hampering the presentation of the opposing party’s claim or defense.” When reviewing a case for fraud, the court should “consider the proper mix of factors” and carefully balance a policy favoring adjudication on the merits with competing policies to maintain the integrity of the judicial system. Because “dismissal sounds the ‘death knell of the lawsuit,’ courts must reserve such strong medicine for instances where the defaulting party’s misconduct is correspondingly egregious.” The trial court has the inherent authority, within the exercise of sound judicial discretion, to dismiss an action when a plaintiff has perpetrated a fraud on the court, or where a party refuses to comply with court orders. Because dismissal is the most severe of all possible sanctions, however, it should be employed only in extreme circumstances. 6
Certainly, despite the apparent stringency of this standard, there are numerous examples of Florida courts finding a personal injury plaintiff’s fraudulent conduct during discovery sufficiently egregious to dismiss the entire action. In one recent case, Diaz v. Home Depot USA, Inc., the plaintiff in a premises liability action alleged she had suffered permanent injuries to her neck and shoulder and sought both economic and noneconomic damages.7 At her deposition, the plaintiff denied that she had previously suffered any injury to her neck or back and that she had been involved in a prior slip-and-fall or motor vehicle accident.8 The defense, however, obtained medical records revealing that the plaintiff had been involved in a motor vehicle accident necessitating medical treatment nine months prior to the incident at issue. In those records, the plaintiff had complained of pain to her neck and back. Seven months before the incident at issue, the plaintiff had again visited the hospital, after falling backwards onto concrete, asserting pain to her neck and back. Finally, eight months after the incident, the plaintiff was involved in a second motor vehicle accident following which, among other things, she reported to a nurse that she had suffered chronic neck pain for years.9 Because the evidence demonstrated that the plaintiff had set in motion an unconscionable scheme calculated to interfere with the court’s ability to adjudicate the matter, the Third District Court of Appeal determined that clear and convincing evidence supported the lower court’s decision to dismiss the plaintiff’s case.10
In another commonly-cited case, Morgan v. Campbell, the plaintiff similarly denied that she had experienced neck or back pain before the accident at issue.
11 Although she admitted she had previously seen a chiropractor to treat her scoliosis, she denied that the chiropractor had treated her for neck or back pain; however, the defense discovered that the chiropractor had treated her for complaints of neck and back pain and that the plaintiff had also seen another chiropractor whom she had failed to disclose.12 The Second District Court of Appeal upheld the lower court’s dismissal of the claim, finding that the plaintiff’s “false testimony was directly related to the central issue in the case — whether the accident in question caused her neck and low back injuries,” and that the plaintiff’s contention that she “forgot” about the prior treatment to her back and neck was not credible.13 In upholding the dismissal, the Second District crafted some useful language for the defense to utilize in future cases. Specifically, the court made note of the plaintiff’s “half-truths” and declared that “[r]evealing only some of the facts does not constitute ‘truthful disclosure’” upon which the process of civil litigation depends.14
On the other hand, there is no shortage of Florida appellate decisions that reversed lower courts’ orders to dismiss for fraud upon the court where the strict standard of finding clear and convincing evidence of an unconscionable scheme was not satisfied. For example, in Gautreaux v. Maya, the plaintiff allegedly suffered from continuing migraine headaches as a result of a motor vehicle accident.15 The plaintiff testified that she had never had headaches before the accident; however, medical records revealed that years before the accident, the plaintiff had “frequent headaches” and a history of chronic migraine headaches. The plaintiff explained her earlier testimony by stating that the question had confused her and that she once had experienced a really bad headache.16 The Fifth District Court of Appeal reversed the lower court’s dismissal of the case, finding that “[t]he facts of this case do not meet the narrow, stringent standard required for dismissal for fraud on the court,” as the facts revealed only a “testimonial discrepancy.” According to the Fifth District, the plaintiff’s misrepresentation “did not rise to the level of ‘the most blatant showing of fraud, pretense, collusion, or other similar wrong doing.”17
A different variety of cases where the evidence may not sustain a dismissal for fraud is where the alleged fraud is not central to the main issues in the case. In Suarez v. Benihana National of Florida Corp., the defendants identified numerous discrepancies between a plaintiff’s deposition testimony in a negligent security case and his testimony in a former deposition in the related criminal case. The discrepancies arose when the plaintiff testified on the issues of whether he drank alcohol the night of the incident, whether he used profanity in speaking to his attackers, whether he was punched or “pat on the chest” first, whether he punched the attacker back, how he verbally responded to the attacker’s instruction to him to cross the street, and whether he was willing to fight the attackers.18 The Third District Court of Appeal reversed the lower court’s dismissal for fraud, finding the discrepancies between the depositions insufficient to support dismissal:
While there are certainly inconsistencies and contradictions in the deposition testimony given by [plaintiff] in 2007 and 2011, the record simply fails to demonstrate clearly and convincingly that Appellants “collusively engaged in a scheme designed to prevent the trier [of fact] from impartially adjudicating this matter through lies, misrepresentations, contradictory statements and otherwise hiding the truth.” More importantly, we disagree with [defendant’s] assertions and the court’s conclusion that the contradictions and inconsistencies go “to the very heart of the claims” against [defendant], justifying dismissal of the action with prejudice
. . . . .
Even if the record in this case could give rise to some inference of willful or intentional conduct, the nature and substance of the inconsistencies and contradictions required the trial court to consider some lesser sanction, reflecting the proper balance of competing interests and appropriately tailored to address the party’s conduct and the resulting prejudice.19
Cases like Gautreaux and Suarez show that notwithstanding the defense’s best efforts, Florida courts may permit a plaintiff to have his or her day in court even where evidentiary discrepancies constitute lies or are otherwise pervasive.20 Indeed, notably, in cases where the evidence of a fraudulent scheme is not deemed clear and convincing, Florida courts have pronounced that, short of evidence of a “deliberate scheme to subvert the judicial process,” a plaintiff’s “[m]isconduct that falls short of the rigors of this test, including inconsistency, poor recollection, dissemblance, [and] even lying may be well managed and best resolved by bringing the issue to the jury’s attention through cross-examination….”21 Invariably, seizing on the stringency of the standard as demonstrated by such caveats, plaintiffs oppose motions to dismiss for fraud upon the court on the basis of poor memory, forgetfulness, or language barriers (in cases where the plaintiff does not speak English or is a non-native speaker). Such arguments are best combated by cross-examining the plaintiff at an evidentiary hearing on the defense’s motion to dismiss for fraud on the court. Effective cross-examination of the plaintiff in such cases may demonstrate, based on other case-specific evidence, that the assertions of misunderstanding or forgetfulness are not credible.
Adjusters and SIU professionals should also be aware of an important offshoot of cases where courts may find the evidence of fraud insufficient to dismiss a claim. These are cases in which the defense attempts to prove that the plaintiff committed a fraud on the court by contradicting his or her reports of injuries with surveillance video. Specifically, Florida’s appellate courts are not inclined to uphold dismissals for fraud upon the court where the only evidence of fraud amounts to discrepancies between the extent of a plaintiff’s injuries complained of and the plaintiff’s physical capabilities as shown by surveillance. For example, in Guillen v. Vang, the Fifth District reversed a trial court’s finding that the plaintiff perpetrated a fraud on the court by performing activities, as depicted in a surveillance video, that he allegedly claimed he could not perform in his deposition testimony.22 The Fifth District held:
We do not believe that the surveillance DVD constitutes clear and convincing evidence that Guillen has “‘sentiently set in motion some unconscionable scheme calculated to interfere with the judicial system’s ability impartially to adjudicate a matter by improperly influencing the trier of fact or unfairly hampering the presentation of the opposing party’s claim or defense.’” We believe that any discrepancies between Guillen’s testimony and the surveillance DVD are best resolved by a jury.23
In working with defense counsel, being familiar with the legal standard for dismissal for fraud — vague and subjective as it may be — can be useful to claims adjusters and SIU professionals. Depending on the quality and quantity of the misrepresentations and omissions at issue, the defense team should decide whether to pursue a full-scale motion to dismiss for fraud upon the court versus seeking lesser discovery sanctions. In certain cases, lesser discovery sanctions may be the more appropriate and viable avenue, including dismissal of only portions of the claim. Ultimately, if the adjuster and defense counsel decide that pursuing dismissal for fraud is not the best defense, then using the misrepresentations and omissions for cross-examination and impeachment at trial may be the most effective tactic.
CSK is devoted to assisting its partner carriers with investigating and aggressively combatting fraudulent claims. Yet, it is important to keep in mind that, given the current law in Florida, the defense sometimes maintains more credibility with the court in recognizing when seeking dismissal of an entire action may not be appropriate. Where omissions are isolated or not central to the claim or where there are potentially believable explanations for the plaintiff’s testimonial discrepancies, the plaintiff’s misrepresentations may be most effectively presented in cross-examination and impeachment during trial.
In sum, Florida courts have not crafted an objective test that draws the definitive line between situations where the plaintiff’s misrepresentations or omissions warrant dismissal and those where the misrepresentations (or even lies) provide mere fodder for cross-examination and impeachment. Florida’s standard for dismissal of claims where the plaintiff has arguably committed fraud upon the court requires egregious inconsistencies and blatant misrepresentations that bear on issues central to the plaintiff’s claims. Thus, the success of motions to dismiss for fraud upon the court continues to rest on the quality of defense counsel’s advocacy in convincing a trial judge, and likely an appellate panel, that clear and convincing evidence of the requisite “pattern” or “scheme” of fraud exists in a given case.
Over the years, CSK has successfully defended numerous matters involving claims of fraud, including several more-recent decisions.24
1 Robert W. Emerson, Insurance Claims Fraud Problems and Remedies, 46 U. Miami L. Rev. 907, 934 (1992).
2 See, e.g., Ramey v. Haverty Furniture Cos., 993 So. 2d 1014, 1018 (Fla. 2d DCA 2008) (“[A] trial court has the inherent authority to dismiss an action as a sanction when the plaintiff has perpetrated a fraud on the court. ‘Such power is indispensable to the proper administration of justice, because no litigant has a right to trifle with the courts.’”) (internal citations omitted).
3 Andrews v. Palmas De Majorca Condo., 898 So. 2d 1066, 1069 (Fla. 5th DCA 2005) (citation omitted).
4 Art I., § 21, Fla. Const. (“The courts shall be open to every person for redress of any injury, and justice shall be administered without sale, denial or delay.”).
5 706 So. 2d 43 (Fla. 5th DCA 1998).
6 Id. at 46 (internal citations omitted). It is interesting to note that in Cox, the Fifth District declared that where the question of whether dismissal was the appropriate sanction is a “close” one, if the dismissal is appealed, the appellate court should not find an abuse of discretion. Id. at 47. Since Cox, the law has evolved to provide that the appellate court will apply a “narrowed” abuse of discretion standard of review to a lower court’s ruling on a motion to dismiss for fraud. The standard is “narrowed” to the extent that the appellate court must assess whether there is competent, substantial evidence to support the lower court’s finding of “clear and convincing evidence” of fraud.
7 41 Fla. L. Weekly D1625 (Fla. 3d DCA July 13, 2016).
10 Id. For other relatively recent appellate decisions upholding dismissals for fraud upon the court in personal injury actions, see Middleton v. Hager, 179 So. 3d 529 (Fla. 3d DCA 2015); Jimenez v. Ortega, 179 So. 3d 483 (Fla. 5th DCA 2015); Herman v. Intracoastal Cardiology Ctr., 121 So. 3d 583 (Fla. 4th DCA 2013); Faddis v. City of Homestead, 121 So. 3d 1134 (Fla. 3d DCA 2013); Wenwei Sun v. Aviles, 53 So. 3d 1075 (Fla. 5th DCA 2010) (“The case before us is not one of poor recollection or dissemblance; it is one where the three claimants over a span of six years lied repeatedly about Mr. Sun’s employment and his abilities to perform even the most basic functions of daily life.”); Williams v. Miami-Dade Cnty. Pub. Health Trust, 17 So. 3d 859 (Fla. 3d DCA 2009); Bass v. City of Pembroke Pines, 991 So. 2d 1008 (Fla. 4th DCA 2008); Ramey, 993 So. 2d 1014; Saenz v. Patco Transp., Inc., 969 So. 2d 1145 (Fla. 5th DCA 2007); Papadopoulos v. Cruise Ventures Three Corp., 974 So. 2d 418 (Fla. 3d DCA 2007); Austin v. Liquid Distribs., Inc., 928 So. 2d 521 (Fla. 3d DCA 2006); Hutchinson v. Plantation Bay Apts., LLC, 931 So. 2d 957 (Fla. 1st DCA 2006); McKnight v. Evancheck, 907 So. 2d 699 (Fla. 4th DCA 2005); and, Piunno v. R.F. Concrete Constr., Inc., 904 So. 2d 658 (Fla. 4th DCA 2005).
11 816 So. 2d 251, 252 (Fla. 2d DCA 2002).
12 Id. at 252-53.
13 Id. at 253.
14 Id. at 254.
15 112 So. 3d 146, 148 (Fla. 5th DCA 2013).
16 Id. at 148-49.
17 Id. at 150 (citation omitted).
18 88 So. 3d 348, 351 (Fla. 3d DCA 2012).
19 Id. at 353.
20 For other relatively recent cases reversing dismissals for fraud upon the court in personal injury actions, see Bolera v. Papa, 142 So. 3d 918 (Fla. 4th DCA 2014); Bosque v. Rivera, 135 So. 3d 399 (Fla. 5th DCA 2014); Chacha Transp. USA, Inc., 78 So. 3d 727 (Fla. 4th DCA 2012) (holding that order of dismissal for fraud upon the court must include express written findings demonstrating that lower court balanced the equities); Gilbert v. Eckerd Corp. of Fla., Inc., 34 So. 3d 773 (Fla. 4th DCA 2010); Laurore v. Miami Auto. Retail, Inc., 16 So. 3d 862 (Fla. 3d DCA 2009); Villasenor v. Martinez, 991 So. 2d 433 (Fla. 5th DCA 2008); Ibarra v. Izaguirre, 985 So. 2d 1117 (Fla. 3d DCA 2008); Granados v. Zehr, 979 So. 2d 1155 (Fla. 5th DCA 2008); Kubel v. San Marco Floor & Wall, Inc., 967 So. 2d 1063 (Fla. 2d DCA 2007); Gehrmann v. City of Orlando, 962 So. 2d 1059 (Fla. 5th DCA 2007); Howard v. Risch, 959 So. 2d 308 (Fla. 2d DCA 2007); Myrick v. Direct Gen. Ins. Co., 932 So. 2d 392 (Fla. 2d DCA 2006); Cross v. Pumpco, Inc., 910 So. 2d 324 (Fla. 4th DCA 2005); Canaveras v. Cont’l Grp., Ltd., 896 So. 2d 855 (Fla. 3d DCA 2005); Rios v. Moore, 902 So. 2d 181 (Fla. 3d DCA 2005).
21 Perrine v. Henderson, 85 So. 3d 1210, 1212 (Fla. 5th DCA 2012) (emphasis supplied); see also Bologna v. Schlanger, 995 So. 2d 526, 528 (Fla. 5th DCA 2008).
22 138 So. 3d 1144 (Fla. 5th DCA 2014).
23 Id. at 1145; see also Amato v. Intindola, 854 So. 2d 812, 816 (Fla. 4th DCA 2003) (“The fact that a surveillance tape shows discrepancies usually affects the jury’s view of the case, but in this case it does not merit a dismissal with prejudice to appellant’s case.”); Jacob v. Henderson, 840 So. 2d 1167, 1170 (Fla. 2d DCA 2003) (“’In all but the most extreme cases, our system entrusts juries with the ultimate decisions as to whether claimed injuries are genuine or not. Our experience has demonstrated that juries deserve this trust and that they are well able to discern the truth and to render judgment accordingly.’”) (quoting Francois v. Harris, 366 So. 2d 851, 852 (Fla. 3d DCA 1979)). But cf. Jimenez, 179 So. 3d at 488 (“Even when confronted with video surveillance showing him performing tasks he claimed he could not do, Ortega continued to perjure himself and exaggerate his claims. His conduct cannot be countenanced.”).
24 See, e.g., Diaz v. Home Depot USA, Inc., 196 So. 3d 504 (Fla. 3d DCA 2016); Lester v. Progressive Express Insurance Co., No. 1D15-5500, 2016 Fla. App. LEXIS 17396 (Fla. 1st DCA Nov. 18, 2016); Austin v. Niko Petroleum, No. 3D15-2196, 2015 Fla. App. LEXIS 17274 (Fla. 3d DCA Oct. 21, 2015); Lorenzo v. Harris, 151 So. 3d 1257 (Fla. 3d DCA 2014); Handel v. Nevel, 147 So. 3d 649 (Fla. 3d DCA 2014); Hadfeg v. Hialeah Rey Pizza, Inc., 149 So. 3d 19 (Fla. 3d DCA 2014).