In Pino v. The Bank of New York (SC11-697), the Supreme Court decided the narrow question of whether an allegation of fraud on the court empowers a trial court to strike a properly noticed voluntary dismissal, then reinstate the dismissed action in order to then again dismiss the action, with prejudice, as a consequent sanction. The Court held that if a plaintiff voluntarily dismisses a suit and a defendant alleges fraud on the court as a basis for setting the dismissal aside, the trial court can reinstate the action only when proven fraud resulted in some affirmative relief to the plaintiff.
The Bank of New York (BNY) commenced an action to foreclose on a mortgage held on real property owned by Pino. BNY was neither listed or referenced anywhere in the documents as the lender or the mortgagee. Despite not being listed on any of the attached documents, BNY alleged that it held and owned the mortgage by assignment. BNY also alleged that the original note demonstrating assignment had been “lost, destroyed, or stolen.” Pino moved to dismiss the complaint alleging that it was defective because BNY failed to show they had been assigned the mortgage and thus was not a real party in interest. BNY then amended the complaint to no longer state the original note had been lost, destroyed, or stolen, and attached a copy of an adjustable rate note showing the transfer and assignment of the note to BNY with a date of execution twenty days before the original complaint was filed. Pino brought a motion for sanctions claiming the document was fraudulently backdated with the intent to commit fraud on the court. Pino then scheduled deposition and initiated discovery to prove the fraud but BNY properly served notice of voluntary dismissal dismissing the foreclosure action without prejudice pursuant to Fla. R. Civ. P. 1.420(a)(1).
About five months later, BNY refilled an identical action against Pino but did not claim the note was lost, missing, or stolen, and filed an assignment of mortgage dated after the date of the voluntary dismissal. Pino filed a motion in the original, voluntarily dismissed action seeking to strike BNY’s notice of voluntary dismissal based on fraud on the court and to dismiss that action with prejudice as consequent sanction pursuant to Fla. R. Civ. P. 1.540(b). BNY opposed the motion saying that the fraud on the court exception was available only where the party voluntarily dismissing the case had obtained affirmative relief prior to dismissing the action. The trial court rejected Pino’s argument and denied the rule 1.540(b) motion to strike because BNY had not obtained affirmative relief. Pino appealed to the Fourth Circuit who affirmed the decision of the lower court.
In determining whether the trial court has an ability to grant relief from a voluntary dismissal, the Supreme Court examined the Florida Rules of Civil Procedure and the trial court’s inherent authority to protect judicial integrity. A plaintiff has a right to voluntarily dismiss a civil action under Fla. R. Civ. P. 1.420(a)(1) once without prejudice. This rule is very broad and has been interpreted liberally. The Supreme Court has long interpreted the right to be absolute with the trial court having no authority or discretion to deny the voluntary dismissal. The right does not take into account the plaintiff’s motive and unless the action falls within one of the recognized exceptions, the voluntary dismissal is allowed. A plaintiff’s voluntary dismissal is an act of finality, which typically deprives the trial court from retaining jurisdiction; rule 1.540(b) provides some exceptions. Fla. R. Civ. P. 1.540(b), “provides a litigant relief from a final judgment based upon fraud.” In addition, the rule requires the plaintiff to gain some affirmative relief that had an adverse impact on the defendant. If the affirmative relief were obtained as a result of some fraudulent act, the defendant would be entitled to seek redress under Rule 1.540(b)(3).
In addition to rule 1.540(b), the Court also examined whether a trial court has inherent authority to strike the voluntary dismissal when fraud is alleged. The Court rejected the trial court’s assertion of inherent authority, holding that under the plain language of rule 1.420(a)(1), the common law “serious prejudice” exception that allowed trial courts to strike a voluntary dismissal if a defendant suffered serious prejudice no longer exists. The trial court had no authority to deny a plaintiff’s voluntary dismissal except as provided by the rules. Finally, the Court discussed whether Section 57.105 of the Florida Statutes requires a motion for sanctions to be filed prior to dismissal of the case even with the 21 day safe harbor provision. The Court held that if a plaintiff does not file a voluntary dismissal or withdraw the offending pleading before the twenty-one day safe harbor expires, then a defendant may file a sanctions motion under the statute — thus giving the trial court continuing jurisdiction.
In applying the holding to the case at bar, the Court affirmed the trial court and fourth district court of appeals. Since Rule 1.540(b) requires the plaintiff to obtain some kind of affirmative relief prior to the dismissal in order for the court to have discretion to strike the dismissal, the Court held that since BNY did not obtain relief, Pino’s motion to strike the dismissal must fail. In addition, sanctions under 57.105 were unavailable because BNY dismissed the action within the statutory twenty-one day safe harbor following the motion for attorney fees filed by Pino.