Child support fraud??

[annemichellesdad]

State of GA.

Temporary support hearing held in May of 2003. BM submitted a financial affidavit per statutory requirement in a child-support hearing. Sworn affidavit claimed only minimal assets, no house, an meager earnings.  Judge awarded temporary child support to BM.

Six months later, following a hearing, judge made a final order of child support.

Fast foward nearly three years...

I recently find out that the very morning following the temporary hearing in May 2003, BM's father transferred his marital home into BM's ownership (allegedly to avoid having it be a part of his own imminent divorce proceedings). House is valued at close to $400,000. Shortly thereafter, BM borrowed cash against the house as collateral in order to purchase a second home for herself.

BM never updated her financial affidavit to reflect ownership of the house prior to the November 2003 final support hearing.

Statute of limitations for fraud (including child support hearings) is THREE years in GA. (Yes, the statute of limitations is running out soon.)

1 - Does the BM's failure to update her financial affidavit prior to the final hearing to reflect such a substantial asset constitute fraud by misrepresentation for which upon motion an order to set aside the judgment may be rendered?

2 - If fraud was committed and the judgment set aside, can attorney fees paid to BM as part of the original proceedings be recovered?

APPLICABLE STATUTES

Title 9, Chapter 11, Section 60
(d) Motion to set aside. A motion to set aside may be brought to set aside a judgment based upon: (2) Fraud, accident, or mistake or the acts of the adverse party unmixed with the negligence or fault of the movant;

Title 13, Chapter 8, Section 12
"Fraud" means, in addition to its normal legal connotation, the following: a misrepresentation in any manner, whether intentionally false or arising from gross negligence, of a material fact; a promise or representation not made honestly and in good faith;

Title 11, Chapter 1, Section 201
(16) "Fault" means wrongful act, omission, or breach.


PS.

Background Only:  

Following the order of 11/03, BM's father continued to place other significant holdings in her name, including ownership of his real estate business and numerous personal land properties, as part of his effort to use BM as a "shield" for his assets.

Ironically, about one year following the final order of 11/03, BM actually brought an action for modifcation and attachment for FRAUD against ME, claiming that I had misrepresented my assets during the proceedings. She alleged that I had failed to reveal some $884,000 in stock. In reality, there had been a clerical error and my account was, for 24-hours, erroneously credited with an $884,000 stock purchase. In reality, the account had been empty for years! The motion was dismissed, of course.

[socrateaser]

>1 - Does the BM's failure to update her financial affidavit
>prior to the final hearing to reflect such a substantial asset
>constitute fraud by misrepresentation for which upon motion an
>order to set aside the judgment may be rendered?

Yes, unless she can prove that you had reasonable opportunity via the rules of discovery to uncover the fraud during the pendency of the case. As you say this alleged fraud took place during the pendency of the action, however, the question is could you have discovered it using due diligence. Just because she had a duty to update her financials, doesn't mean that you didn't have a corresponding duty to investigate those financials for their accuracy.

So, the question is, did you depose her or put her on the stand or send a new interrogatory or request for updated financians, and did she misrepresent her condition thereafter?

If so, you've got a pretty good case. If not, you're case ain't so good. It could still work, but it depends on the judge, and how GA case law specifically interprets this sort of "intrinsic" v. "extrinsic" fraud. Intrinsic fraud is not actionable, because you didn't investigate sufficiently. Extrinsic fraud, that you could not have discovered via discovery, is actionable. That's the general rule GA rules may vary considerably based on the case law.

>
>2 - If fraud was committed and the judgment set aside, can
>attorney fees paid to BM as part of the original proceedings
>be recovered?

Yep. You could have your entire divorce judgment set aside and all of the property redistributed. But, don't bet on it.

[annemichellesdad]

>
>
>If so, you've got a pretty good case. If not, you're case
>ain't so good. It could still work, but it depends on the
>judge, and how GA case law specifically interprets this sort
>of "intrinsic" v. "extrinsic" fraud. Intrinsic fraud is not
>actionable, because you didn't investigate sufficiently.
>Extrinsic fraud, that you could not have discovered via
>discovery, is actionable. That's the general rule GA rules may
>vary considerably based on the case law.
>
>>

That's consistent with how the courts in GA have gone. The problem is that I have found no jurisprudence concerning the treatment of Domestic Relations Financial Affidavits.

This is what the GA Uniform Court Rules say about financial affidavits:

** BEGIN **

Every action for temporary or permanent child support, alimony, equitable division of property, modification of child support or alimony or attorneys fees shall be accompanied by an affidavit specifying the party's financial circumstances. The affidavit shall be served at the same time that the notice of interlocutory hearing is served. The opposing party shall make an affidavit regarding his or her financial circumstances and shall serve it upon opposing counsel at least five days prior to the interlocutory hearing. If the parties are ordered to participate in mediation at any time prior to trial, each shall serve the affidavit upon the other at least five days prior to the mediation. Each shall furnish the mediator with a copy at the time of the mediation.
 
Failure of any party to furnish the above affidavit, in the discretion of the court, may subject the offending party to the penalties of contempt and result in continuance of the hearing until such time as the required affidavit is furnished.
 
The affidavit shall be under oath and in substantially the following form (example follows).

** END **

Interesting here that the court clearly says that an affidavit is required for BOTH the temporary and the permanent hearing. In other words, it doesn't look like it's merely an "option" to provide an affidavit at BOTH hearings. And because of the clear requirement by the court, the litigants should have the good faith that the requirement of the court will be just as binding as a specific request for discovery. In fact, it would seem that opposing discovery would, under such circumstances, merely AUGMENT the requirement of the court rather than substitute for it.

In a way, such required financial affidavits represent a discovery of sorts by the courts. The scope is limited, but when there is misrepresentation within the scope of the court's demand, the party should not be able to benefit from their deception simply because the victimized party relied on the answers in good faith. Since the affidavit is ordered by the court, and made under oath, one should be able to presume that the facts within it are as faithfully and honestly represented as if they were discovery requested by opposition. Indeed, if these answers, basic as they may be, are any less accountable, then what is their purpose?

Furthermore, it is logical to suggest that the party failing to provide a second affidavit may still be represented under oath by the facts represented within the first affidavit. Thus, any failure to provide a second affidavit so as to include substantial changes in financial circumstances since the submission of the first should accordingly constitute a extrinsic misrepresentation of the facts. They have not merely failed to provide information which might affect the course of the trial, but have failed to comply with a specific demand by the court to provide such information to both the court and the opposing litigant.

1 - I don't want to try and stretch this idea too far, and I'm certainly looking for other evidence which shows that there was an intent to hide assets from the court. Nonetheless, in the absence of jurisprudence on the subject, how does the above argument sound?

[socrateaser]

>Interesting here that the court clearly says that an affidavit
>is required for BOTH the temporary and the permanent hearing.

You're misinterpreting the statute. The language simply states that whether the matter is for a temporary or a permanent order, the financial is required. That's all it says. Don't read any more into it, or you'll be cut down.

>1 - I don't want to try and stretch this idea too far, and I'm
>certainly looking for other evidence which shows that there
>was an intent to hide assets from the court. Nonetheless, in
>the absence of jurisprudence on the subject, how does the
>above argument sound?

It's sounds like you've lost your way on the road to OZ. If you take your argument to court, you will have a house fall on you.

[annemichellesdad]

Thanks for the honesty.

No, I don't want to take anything to court that won't work. Just seems like the spirit of the statute is to keep the court informed so that it can make proper decisions, and that not doing so as ordered constitutes misrepresentation by fraud.

We're currently looking for anything that shows that the BM knew PRIOR to the submission of the financial affidavit that she would own the house on day after. Short of that evidence, this is a dead issue.

[socrateaser]

>Thanks for the honesty.
>
>No, I don't want to take anything to court that won't work.
>Just seems like the spirit of the statute is to keep the court
>informed so that it can make proper decisions, and that not
>doing so as ordered constitutes misrepresentation by fraud.
>
>We're currently looking for anything that shows that the BM
>knew PRIOR to the submission of the financial affidavit that
>she would own the house on day after. Short of that evidence,
>this is a dead issue.

I would be very surprised if there isn't some statute or case law that requires parties to keep each other informed of any material changes in their financial circumstances. However, the relevant question is: what did you do during the pendency of the action to test the assertions provided in the financial declaration?

If you simply took it all at face value, then you're probably SOL, no matter what the other party knew after filing the document.

This is a relatively simple motion to vacate. If you can prove the timing of the financial transfers, with objective evidence, just submit the motion and see how it flies. You have nothing to lose except some filing fees.

[socrateaser]

>1 - Does the BM's failure to update her financial affidavit
>prior to the final hearing to reflect such a substantial asset
>constitute fraud by misrepresentation for which upon motion an
>order to set aside the judgment may be rendered?

Yes, unless she can prove that you had reasonable opportunity via the rules of discovery to uncover the fraud during the pendency of the case. As you say this alleged fraud took place during the pendency of the action, however, the question is could you have discovered it using due diligence. Just because she had a duty to update her financials, doesn't mean that you didn't have a corresponding duty to investigate those financials for their accuracy.

So, the question is, did you depose her or put her on the stand or send a new interrogatory or request for updated financians, and did she misrepresent her condition thereafter?

If so, you've got a pretty good case. If not, you're case ain't so good. It could still work, but it depends on the judge, and how GA case law specifically interprets this sort of "intrinsic" v. "extrinsic" fraud. Intrinsic fraud is not actionable, because you didn't investigate sufficiently. Extrinsic fraud, that you could not have discovered via discovery, is actionable. That's the general rule GA rules may vary considerably based on the case law.

>
>2 - If fraud was committed and the judgment set aside, can
>attorney fees paid to BM as part of the original proceedings
>be recovered?

Yep. You could have your entire divorce judgment set aside and all of the property redistributed. But, don't bet on it.

[annemichellesdad]

>
>
>If so, you've got a pretty good case. If not, you're case
>ain't so good. It could still work, but it depends on the
>judge, and how GA case law specifically interprets this sort
>of "intrinsic" v. "extrinsic" fraud. Intrinsic fraud is not
>actionable, because you didn't investigate sufficiently.
>Extrinsic fraud, that you could not have discovered via
>discovery, is actionable. That's the general rule GA rules may
>vary considerably based on the case law.
>
>>

That's consistent with how the courts in GA have gone. The problem is that I have found no jurisprudence concerning the treatment of Domestic Relations Financial Affidavits.

This is what the GA Uniform Court Rules say about financial affidavits:

** BEGIN **

Every action for temporary or permanent child support, alimony, equitable division of property, modification of child support or alimony or attorneys fees shall be accompanied by an affidavit specifying the party's financial circumstances. The affidavit shall be served at the same time that the notice of interlocutory hearing is served. The opposing party shall make an affidavit regarding his or her financial circumstances and shall serve it upon opposing counsel at least five days prior to the interlocutory hearing. If the parties are ordered to participate in mediation at any time prior to trial, each shall serve the affidavit upon the other at least five days prior to the mediation. Each shall furnish the mediator with a copy at the time of the mediation.
 
Failure of any party to furnish the above affidavit, in the discretion of the court, may subject the offending party to the penalties of contempt and result in continuance of the hearing until such time as the required affidavit is furnished.
 
The affidavit shall be under oath and in substantially the following form (example follows).

** END **

Interesting here that the court clearly says that an affidavit is required for BOTH the temporary and the permanent hearing. In other words, it doesn't look like it's merely an "option" to provide an affidavit at BOTH hearings. And because of the clear requirement by the court, the litigants should have the good faith that the requirement of the court will be just as binding as a specific request for discovery. In fact, it would seem that opposing discovery would, under such circumstances, merely AUGMENT the requirement of the court rather than substitute for it.

In a way, such required financial affidavits represent a discovery of sorts by the courts. The scope is limited, but when there is misrepresentation within the scope of the court's demand, the party should not be able to benefit from their deception simply because the victimized party relied on the answers in good faith. Since the affidavit is ordered by the court, and made under oath, one should be able to presume that the facts within it are as faithfully and honestly represented as if they were discovery requested by opposition. Indeed, if these answers, basic as they may be, are any less accountable, then what is their purpose?

Furthermore, it is logical to suggest that the party failing to provide a second affidavit may still be represented under oath by the facts represented within the first affidavit. Thus, any failure to provide a second affidavit so as to include substantial changes in financial circumstances since the submission of the first should accordingly constitute a extrinsic misrepresentation of the facts. They have not merely failed to provide information which might affect the course of the trial, but have failed to comply with a specific demand by the court to provide such information to both the court and the opposing litigant.

1 - I don't want to try and stretch this idea too far, and I'm certainly looking for other evidence which shows that there was an intent to hide assets from the court. Nonetheless, in the absence of jurisprudence on the subject, how does the above argument sound?

[socrateaser]

>Interesting here that the court clearly says that an affidavit
>is required for BOTH the temporary and the permanent hearing.

You're misinterpreting the statute. The language simply states that whether the matter is for a temporary or a permanent order, the financial is required. That's all it says. Don't read any more into it, or you'll be cut down.

>1 - I don't want to try and stretch this idea too far, and I'm
>certainly looking for other evidence which shows that there
>was an intent to hide assets from the court. Nonetheless, in
>the absence of jurisprudence on the subject, how does the
>above argument sound?

It's sounds like you've lost your way on the road to OZ. If you take your argument to court, you will have a house fall on you.

[annemichellesdad]

Thanks for the honesty.

No, I don't want to take anything to court that won't work. Just seems like the spirit of the statute is to keep the court informed so that it can make proper decisions, and that not doing so as ordered constitutes misrepresentation by fraud.

We're currently looking for anything that shows that the BM knew PRIOR to the submission of the financial affidavit that she would own the house on day after. Short of that evidence, this is a dead issue.