Vacating court approved agreements

Posted Saturday, May 12th, 2018 by Gregory Forman
Filed under Litigation Strategy, Of Interest to Family Court Litigants, South Carolina Specific

Most family law attorneys will occasionally get contacted by an unhappy litigant who wishes to “appeal” his or her court approved agreement. The simple answer to that request is that “you can’t.” The “court will not entertain appeal from an order issued with parties’ consent.” Hooper v. Rockwell, 334 S.C. 281, 513 S.E.2d 358, 363 (1999).

While one cannot appeal an agreement, one case ask the family court to vacate a court approved agreement. The procedure for doing this is contained within SCRCP 60, which reads:

(a) Clerical Mistakes. Clerical mistakes in judgments, orders or other parts of the record and errors therein arising from oversight or omission may be corrected by the court at any time of its own initiative or on the motion of any party and after such notice, if any, as the court orders. During the pendency of an appeal, leave to correct the mistake must be obtained from the appellate court. The ending of a term of court or departure from the circuit shall not operate to deprive the trial judge of jurisdiction to correct such mistakes. A party filing a written motion under this rule shall provide a copy of the motion to the judge within ten (10) days after the filing of the motion.

(b) Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence; Fraud, etc. On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons:

(1) mistake, inadvertence, surprise, or excusable neglect;

(2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b);

(3) fraud, misrepresentation, or other misconduct of an adverse party;

(4) the judgment is void;

(5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application.

If there is a legitimate clerical mistake in a court approved agreement, Rule 60(a) allows the family court to correct that error.

In determining whether to grant relief under Rule 60(b), “the court must consider the following factors: (1) the promptness with which relief is sought; (2) the reasons for the failure to act promptly; (3) the existence of a meritorious defense; and (4) the prejudice to the other party.” Rouvet v. Rouvet, 388 S.C. 301 696 S.E.2d 204, 208 (Ct.App. 2010).

Mistake is a common basis for vacating an agreement. For example, in Deidun v. Deidun, 362 S.C. 47, 606 S.E.2d 489, 497 (Ct.App. 2004) the Court of Appeals approved the reopening of the case and accepting additional evidence regarding the tax penalty from the early withdrawal of Husband’s IRA account when the trial testimony had been mistaken on the size of this penalty.

Numerous reasons litigants advance for vacating an agreement will not succeed. Their attorney’s negligence, or their own lack of legal ability (if pro se), are typically not a basis to void an agreement:

Generally, the neglect of the attorney is the neglect of the client, and no mistake, inadvertence, or neglect attributable to the attorney can be successfully used as a ground for relief, unless it would have been excusable if attributable to the client. In addition, lack of familiarity with legal proceedings is not an acceptable excuse and the court will hold a layman to the same standard as an attorney.

Rouvet, supra (citations omitted)

If an attorney’s negligence led a client to accept an agreement the client regrets, that client’s remedy lies in a malpractice action against the attorney, not in a motion to vacate.

Further, while Rule 60(b)(3) would appear to allow financial or discovery fraud by the opposing party to be a basis to vacate an agreement, South Carolina case law forecloses this remedy:

In South Carolina, extrinsic fraud is the only type of fraud for which relief may be granted under Rule 60(b)(3), SCRCP. Extrinsic fraud is fraud that induces a person not to present a case or deprives a person of the opportunity to be heard. Relief is granted for extrinsic fraud on the theory that because the fraud prevented a party from fully exhibiting and trying his case, there has never been a real contest before the court on the subject matter of the action. On the other hand, intrinsic fraud is fraud which was presented and considered at trial. It is fraud which misleads and induces the court to find in favor of the party perpetrating the fraud.

The court grants relief for extrinsic but not intrinsic fraud on the theory that intrinsic deceptions should be discovered during the litigation itself, and to permit such relief would undermine the stability of all judgments. The essential distinction between intrinsic and extrinsic fraud for purposes of relief from judgment is the ability to discover the fraud.

Gainey v. Gainey, 382 S.C. 414, 675 S.E.2d 792, 798 (Ct.App. 2009) (citations omitted)

Despite these limitations, there are cases in which court approved agreements can be vacated pursuant to Rule 60(b). For example in Simmons v. Simmons, 392 S.C. 412, 709 S.E.2d 666 (2011) the Supreme Court vacated an agreement pursuant to Rule 60(b)(5) when one provision of the agreement had been rendered void by the operation of federal law and this made the remaining agreement inequitable.

The Rouvet case authorized a Rule 60 motion where Wife was actually incompetent at the time of the court proceeding. I have used a client’s lack of competence as a basis to vacate an agreement on a couple of occasions (I was not these clients’ attorney at the time they entered the agreement). To do so requires testimony or affidavit from a medical expert attesting to the client’s lack of mental competency at the time the agreement was entered.

Notwithstanding the general limitation on using an attorney’s negligence as a basis for a Rule 60 motion, Rouvet authorizes such motions when an attorney abandons or withdraws from the case. If a party can demonstrate that the consent to an agreement was predicated by his or her attorney abandoning the case on the eve of the final hearing, that could conceivably be a basis to vacate the agreement.

Litigants will sometimes seek to vacate court approved agreements based upon claims that they were threatened or coerced to enter them. There are two reasons such claims rarely succeed. First, what litigants perceive as threat or coercion does not meet the legal standard to vacate the agreement. The “threat” that the other side will proceed to trial and seek an even more favorable resolution (and a less favorable resolution for the allegedly threatened party) does not mean that party was coerced into entering an agreement. Moreover, the family court systematically asks both litigants, under oath, if they were threatened or coerced into entering the agreement before it approves the agreement. The family court will not approve agreements if either party indicates threats or coercion. To seek to subsequently vacate that agreement based upon a claim of threat or coercion requires that party to explain why their prior testimony was false, and makes their new claims of threat or coercion suspect (as their credibility is now questionable).

In the interest of finality, the appellate courts have deliberately made it difficult for litigants to vacate their court approved agreements. A party seeking to do so cannot appeal the agreement but must file a Rule 60 motion. If that motion is unsuccessful, the party can then appeal that denial. Such motions are unlikely to succeed, but, as noted above, there are a few narrow circumstances in which they can be successful and may be worth pursuing.