PER CURIAM.
Preben Olesen ["Olesen"] appeals a partial final judgment entered against him and in favor of General Electric Capital Corporation ["GECC"], in which the trial court dismissed all claims against GECC for failure to state a cause of action and denied Olesen's ore tenus motion to amend his Second Amended Complaint.
On November 25, 2009, Olesen filed a complaint against Lowndes, Drosdick, Doster, Kantor & Reed Professional Association ["the Lowndes Firm"], attorney
Olesen's complaint in this lawsuit alleged the following facts. Olesen was the owner of the Arkansas Bus Exchange Corporation ["ABE"], a private company that was in the business of leasing new and used motor coach vehicles or "buses" and selling or subleasing them to entities for profit. In 2000, GECC offered Olesen a five million dollar ($5,000,000) line of credit to facilitate the leasing of buses through ABE. On June 2, 2000, ABE leased six T2145 Van Hool buses through its credit line with GECC.
Pursuant to an amended lease agreement, commencing August 2, 2002, ABE was to pay GECC twenty-four thousand dollars ($24,000) a month for sixty-one (61) months with a final payment of twenty-eight thousand two hundred twenty-seven dollars ($28,227) for the lease. The total lease obligation to GECC at the commencement of the lease was one million five hundred fifty thousand dollars ($1,550,000). The final payment pursuant to the lease agreement was due in September 2007.
Olesen and his wife, Darla Olesen ["Darla"], were divorced in January 2007. The Lowndes Firm represented Olesen in the divorce. Dark acquired ABE in the divorce.
Olesen moved to the Bahamas and began a new business venture. After Darla took over ABE, ABE made a partial payment of $7,000 to GECC in December 2006 and was not timely in making the January and February 2007 payments, although later those payments were made. Olesen was not aware that the payments had not been made.
At the time ABE went into default, the payments remaining due for the unexpired term of the Lease totaled $237,277. On February 9, 2007, without the knowledge of Olesen, GECC wrote a letter to Luis Pineda c/o E-Z Bus, Inc. ["E-Z Bus"] regarding five 2000 Van Hool T2145 buses E-Z Bus subleased from ABE. GECC notified E-Z Bus that ABE was in default of its Lease with GECC and that pursuant to section (7) of the Consent to Sublease entered between GECC, ABE and E-Z Bus, E-Z Bus should now deliver its monthly lease payments directly to GECC. E-Z Bus complied with this request and made full monthly payments to GECC for the rest of the Lease term.
On February 9, 2007, without the knowledge of Olesen, GECC wrote a letter to Ernest Givens c/o Angelic Luxury Coach, Inc. ["Angelic"] regarding one 2000 Van Hool T2145 bus that Angelic had subleased from ABE. GECC notified Angelic that ABE was in default of its Lease with GECC and pursuant to section (7) of the Consent to Sublease entered between GECC, ABE and Angelic, Angelic should now deliver its monthly lease payments directly to GECC. Angelic complied with this request and made full monthly payments to GECC for the rest of the Lease term.
According to Olesen, the Lowndes Defendants repeatedly advised him that he had no defense to the GECC lawsuit and the only route to take was to pursue a cross-claim judgment against Darla and attempt to collect on it.
On August 30, 2007, GECC filed its First Amended Complaint. The Lowndes Firm filed a Notice of Appearance and Motion for Extension of Time on behalf of Olesen on November 7, 2007. On November 14, 2007, Attorney Young sent a letter to Olesen and requested that he execute a waiver to allow the Lowndes Firm to represent both him and GECC in distinct matters [the "Waiver Letter"] at the same time. Attorney Young wrote that, although they were not representing GECC in the lawsuit against Olesen, they did represent it in other unrelated matters. Olesen insisted that he never executed the Waiver Letter and never gave consent to waive the conflict.
Unbeknownst to Olesen, John Stine, on behalf of GECC, executed a waiver letter ["GECC Waiver Letter"] on December 5, 2007. In a letter addressed to GECC, Dale A. Burket, an attorney with the Lowndes Firm, had written in part:
The letter provides "Received and agreed to," and bears the signature of John Stine "On behalf of General Electric Capital Corporation," dated "12.5.07." This letter was not provided to Olesen prior to the GECC Lawsuit, and none of the promises the Lowndes Firm made to GECC regarding Olesen were known to Olesen.
On December 12, 2007, Attorney Young sent Olesen a letter describing for Olesen the reasons the Lowndes Firm should not represent him in the GECC Lawsuit. Attorney Young told Olesen that when the GECC Waiver Letter was requested from GECC, their representative implied to Attorney Toscano that they expected the Lowndes Firm to "cooperate," which they understood to mean that GECC expected the Lowndes Firm to advance their interests. "I believe that they are expecting us to attempt to sell your interests down the river or advance theirs, neither of which we are comfortable with." Attorney Young also explained that the attorney for GECC in the GECC Lawsuit had a law partner who "currently is a significant client (client representative) on a major, multi-million dollar matter" of the Lowndes Firm. Attorney Young described this as "an intellectual and possibly a client relations conflict." The Lowndes Firm did not, however, withdraw from representing Olesen; and, according to Olesen, repeatedly assured him that, despite GECC's request, they would protect his interests.
On January 7, 2008, GECC filed a Motion for Summary Judgment and a notice of filing the affidavit of Dale Shores in support of its motion. In his affidavit, Dale Shores, GECC's vice president, made sworn statements as to amounts due.
The Lowndes Defendants filed Olesen's Answer, Affirmative Defenses and Cross-Claim. The Affirmative Defenses consisted of one affirmative defense: that Darla was solely responsible for any indebtedness to GECC pursuant to the Final Judgment of Dissolution of Marriage. Olesen claimed that the Lowndes Firm failed to properly plead the affirmative defenses available to Olesen because of their agreement with GECC to "throw Mr. Olesen under the bus."
GECC's Motion for Summary Judgment was noticed by GECC for hearing on March 3, 2008. Prior to the hearing, Attorney Dixon went through the GECC records provided at Mr. Shores's deposition and created a summary of payments made to GECC from the sublessees after the alleged default, which she sent to Attorney Toscano. These totaled $192,029.36. According to Olesen, although the exact amount of arrearages, if any, still remained uncertain, the maximum damages to GECC, after receiving payments from the sublessees, could only be approximately $45,247.64.
The Lowndes Defendants filed nothing opposing summary judgment in advance of the hearing. There was no court reporter at the hearing. The trial court verbally granted GECC's Motion for Summary Judgment.
The trial court sua sponte set a status hearing for March 20, 2008, based on its own misgivings about the amount of the judgment. The trial court particularly wanted clarification of the sublessee payment issue prior to entering an order. It questioned the parties about the subleases and the continuation of payments under the Lease. When informed, however, that, as of the summary judgment hearing, the only record evidence of amounts due was GECC's affidavit and that there was no record evidence concerning amounts GECC had been paid, the trial court entered judgment in favor of GECC:
Including attorneys' fees and costs, the judgment against Olesen totaled $1,462,265.73, with interest accruing at eleven percent per annum. It appears
According to Olesen, the Lowndes Defendants told him that an appeal of the GECC Final Judgment would be futile; hence no appeal was filed. The Lowndes Defendants did not withdraw as counsel of record for Olesen until November 19, 2009.
In this lawsuit, Olesen contended that he became aware that he had multiple viable defenses to the claims of GECC, and that he was entitled to set-offs and credits that would have eliminated or substantially reduced any liability. In his complaint, Olesen alleged that GECC defrauded the court and him by secretly conspiring with the Lowndes Defendants to not provide him with an effective defense against GECC's claims, and that GECC defrauded the court and Olesen by sentiently setting in motion an unconscionable scheme calculated to interfere with the judicial system's ability to fairly adjudicate the lawsuit. The complaint alleged that GECC knew its claims were fraudulent, knew the affidavits filed in support of the summary judgment motion and the motion itself were false and perjurious, knew that the court and Olesen were being deceived, and knew that the judicial process itself was being undermined.
GECC filed a motion to dismiss for failure to state a cause of action. At the hearing below on the motion, GECC made two basic arguments. First, GECC argued that, as alleged in Olesen's complaint, the fraud that was perpetrated was, as a matter of law, intrinsic, not extrinsic. Therefore, the claim was subject to the one-year limitation in Florida Rule of Civil Procedure 1.540. Olesen responded that the fraud alleged was extrinsic and, thus, not subject to the one-year limitation.
The distinction between extrinsic fraud and intrinsic fraud was discussed in DeClaire v. Yohanan, 453 So.2d 375, 380 (Fla.1984). There, the Florida Supreme Court explained:
The court specifically explained how extrinsic fraud differs from intrinsic fraud, and why no time limit like that applicable to intrinsic fraud applies to extrinsic fraud.
Id. at 376-77 (emphasis added).
Based upon rule 1.540(b) and DeClaire, Olesen sufficiently alleged conduct amounting to extrinsic fraud. Taking the allegations in the Second Amended Complaint together, as detailed above, Olesen essentially alleged that, despite assurances from the Lowndes Defendants that they would represent him and protect his interests, GECC and the Lowndes Defendants secretly agreed to act together in a way in which Olesen's viable defense would not be presented to the trial court, including the failure to challenge or contest GECC's submission of a fraudulent claim supported by a false affidavit as to amounts due and owing, and the Lowndes Defendants' failure to assert any viable defense. And, without a record of the sublessees' payments, the trial court could not even address, on its own, the issue of whether the payments impacted the amount Olesen owed.
Also, we are not persuaded that Olesen had no defense to the GECC claims and, hence, could not have been damaged by any alleged conspiracy on the part of GECC and the Lowndes Defendants. GECC collected payments directly from the sublessees of the buses after ABE's default, yet there was no challenge to GECC's claim that the Stipulated Loss Value was a damage GECC was entitled to recover as a result of ABE's default. Even if Olesen's liability under the guaranty were "indefensible," the issue of whether
To avoid the claim of extrinsic fraud, GECC asserted what amounts to a conversion theory. The idea is that the extrinsic fraud became intrinsic fraud because the Lowndes Firm's correspondence put Olesen on notice of the potential for the fraud on the court. According to GECC, by expressly alleging in his complaint that he was told by the Lowndes Firm of its divided loyalties, the fraud became intrinsic.
For this proposition of law, GECC relies on a single case, Arrieta-Gimenez v. Arrieta-Negron, 551 So.2d 1184 (Fla.1989). This case concerned a dispute between two sets of heirs to the estate of Mr. Arrieta. Appellant was his daughter by his second wife. Appellees, the remaining heirs, were Arrieta's children by his first wife. A dispute arose over the division of Arrieta's substantial assets and holdings in Florida and Puerto Rico. The Appellees proposed a settlement to Appellant, which she accepted in 1960, and the matter was resolved by a consent judgment. Twenty-three years later, she filed suit in federal court seeking to undo the settlement based on her contention that Appellees had fraudulently misrepresented or concealed facts material to the settlement. In answering a certified question posed by the federal court of appeal, our supreme court had no difficulty identifying this circumstance as being a case of intrinsic fraud, subject to the one-year limit. The extent of Arrieta's holdings was the issue litigated and resolved in the lawsuit: "[The] misrepresentation is the type considered to be intrinsic fraud." Citing to DeClaire, the court said that intrinsic fraud is fraud that occurs during the proceeding such as false testimony, whereas extrinsic fraud is fraud that prevents a party from having an opportunity to represent his case in court. Id. at 1185. The Court said:
Id. at 1186.
Contrary to GECC's reading of Arrieta-Gimenez, it is not the "opportunity to discover the fraud" that determines whether a fraud is intrinsic or extrinsic, it is the nature of the fraud itself. The fraud alleged in Arrieta-Gimenez was typical intrinsic fraud involving the presentation of false facts by a litigant. Once the litigation has concluded, any such falseness inheres in the judgment and only a limited time is given to determine the true facts. Olesen contends that he never got his day in court because his interests were corruptly sold out to the other side by attorneys ostensibly representing him. Assuming for the sake of GECC's argument that Olesen was put on notice by the Lowndes Defendants that they were going to "throw" his case to benefit GECC, such a fact might go to whether there was fraud, but not the nature of it.
Turning to GECC's second argument, GECC contended that Olesen's complaint failed to state a cause of action for civil conspiracy. Olesen countered that he sufficiently stated a cause of action for civil conspiracy against GECC. Civil conspiracy consists of the following elements: "(a) a conspiracy between two or more parties,
Based on the allegations in the Second Amended Complaint along with the attached supportive documents, taken as true, and together with the inferences drawn from them in favor of Olesen, as presented above, a trier of fact could have found that GECC and the Lowndes Defendants conspired to and did commit fraud on the court as related to the issue of the amounts due and owing by Olesen under the guaranty, a finding that encompasses the first three elements of civil conspiracy. As for the fourth element, damage, because Olesen alleged both that the Lowndes Defendants failed' to effectively contest the amounts due and owing, and that had the Lowndes Defendants effectively done so, they could have limited the amount due and owing by him under the guaranty, a trier of fact could have found that Olesen was damaged as a result of GECC's and the Lowndes Defendants' conspiracy to commit fraud on the court. As such, the allegations of the Second Amended Complaint were sufficient.
Accordingly, we reverse the trial court's dismissal of Counts IV and V of Olesen's Second Amended Complaint for failure to state a cause of action.
REVERSED and REMANDED.
GRIFFIN, PALMER and WALLIS, JJ., concur.
