Family Law

Perjury and Fraud Claims in Family Law Cases

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Everyone pictures someone being questioned in trial and yelling, “THE TRUTH! YOU CAN’T HANDLE THE TRUTH!” Most family law cases don’t play out in Court like the movie A Few Good Men. 

Litigation can be intense. Lying under oath is illegal in Florida under Fla. Stat. § 837.02(1). Perjury is the lying of someone who is under oath or officially “whoever makes a false statement, which he or she does not believe to be true, under oath in an official proceeding in regard to any material matter, commits a felony of the third degree.” (Fla. Stat. 837.02(1)). “The integrity of the civil litigation process depends on truthful disclosure of facts. A system that depends on an adversary’s ability to uncover falsehoods is doomed to failure, which is why this kind of conduct must be discouraged in the strongest possible way.” Cox v. Burke, 706 So. 2d 43 (Fla. 5th DCA 1998).

What is a material matter? 

A material matter is “any subject, regardless of its admissibility under the rules of evidence, which could affect the course or outcome of the proceeding. Whether a matter is material in a given factual situation is a question of law.” State v. Ellis, 723 So.2d 187 (Fla. 1998). Often the Court refers to terms such as “aggravated situations,” “serious misconduct,” “egregious misconduct,” and “fraud permeating the entire proceedings.”

In Cox, the Plaintiff, Ms. Cox, had made false statements under oath regarding her name, driver license details, Social Security number, and prior injuries. Such issues misled the Court regarding their determination of damages. Therefore, the Court found that Ms. Cox, lying affected a material issue of the case, damages. In Savino, the Fourth District’s ruling echoed Cox: “Appellant lied about matters which went to the heart of his claim on damages. These repeated fabrications undermine the integrity of his entire action. We believe that the trial court has a right and obligation to deter fraudulent claims from proceeding in court.” Savino v. Florida Drive In Theatre Management, Inc., 697 So. 2d 1011 (Fla. 4th DCA 1997).

If the Court finds that a party committed perjury, the Court has at its disposal a myriad of penalties:

  • You can be found in contempt of Court 
  • Your credibility as a witness of a party will be tarnished (the Court can strike all your testimony as unreliable and non-trustworthy) 
  • Your pleadings or Motions may be dismissed (the degree of misconduct needed to support dismissal is high. It has been defined as perjurious conduct, so repeated or egregious as to corrupt and compromise the process to the point that the Court is prejudiced in its ability to impartially adjudicate the claim. Savino v. Florida Drive In Theatre Management, Inc., 637 So. 2d 1011 (Fla. 4th D.C.A. 1997).)
  • You can be fined or sanctioned
  • You can be ordered to pay attorney fees 
  • The Court can refer your case to the State Attorney’s Office and recommend that you be prosecuted criminally. 

Committing perjury can result in a felony charge being filed by the State against you. “Whoever makes a false statement, which he or she does not believe to be true, under oath in an official proceeding that relates to the prosecution of a capital felony, commits a felony of the second degree” (Fla. Stat. 837.02(2)). 

The attorneys at the Horton Law Group are fierce in Court. We encourage all parties to tell the truth; but unfortunately, not everyone listens. If you feel that the other party in your case has lied and you and your children were damaged by it, you have some options. The Horton Law Group, P.A. can file a Motion for Sanctions and/or Contempt of your behalf to obtain a ruling on the perjury committed by the other party. The Horton Law Group, P.A. can file a Motion for Rehearing or Motion to Vacate a prior Order if it was procedure by the fraud or perjury of the other party. 

This type of litigation is highly complex as the consequences can be severe. The outcome of these proceedings ultimately depends on who you chose to represent you. The principal partner at the Horton Law Group, P.A., Attorney Sommer C. Horton, is an experienced and aggressive litigator. She is highly regarded for her creativeness, strategic judgment, and her uncanny ability to deliver persuasive legal arguments in the courtroom. She has a tremendous skill for being an aggressive advocate for her clients, while being one who understands and appreciates how trying litigation can be, thus, she is extremely sensitive to her clients’ needs. 

Ms. Horton is passionate about the law and believes in seeking justice for her clients in an ethical and economic manner. Ms. Horton fights for each one of her clients, every step of the way. If the case cannot be settled out of court, Ms. Horton will be litigating your case at trial. The Horton Law Group, P.A. is a boutique civil litigation law firm that only takes on a limited number of cases so that personal attention can be given to every client. Make the right call – schedule a free 30-minute consultation with Ms. Horton. You can make an appointment by calling 561-299-0018 or emailing legalsupport@hortonlawgroup.com

Fraud on the Court

Fraud on the Court is committed when “it can be demonstrated, by clear and convincing evidence, that a party intentionally or willfully attempted 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.” Cox v. Burke, 706 So. 2d 43, 47 (Fla. 5th DCA 1998). 

Clear and convincing evidence is an extremely high burden in the Court system. Courts often look to Distafano v. State Farm Mutual Automobile Insurance Co., 28 Fla. L. Weekly D1077 (Fla. 1st DCA April 28, 2003), and Long v. Swofford, 805 So. 2d 882 (Fla. 3d DCA 2003) as a starting point in its analysis to making a finding of fraud on the Court. 

In Distafano v. State Farm Mutual Automobile Insurance Co., the Court found that the Plaintiff, Distafano has lied numerous times about her injuries suffered in previous car accidents. The Plaintiff had numerous times to correct herself and yet she chose not to. Prior injuries to a Plaintiff in a car accident case is a material fact as it is extremely relevant to the condition of the Plaintiff. The Plaintiff had the intent to mislead the Court in believing that she had not suffered previous injuries. As a result, the Court dismissed her case for fraud on the court. 

When a party lies about matters bearing directly on the issue of damages, dismissal is an appropriate sanction. Disimone v. Old Dominion Ins. Co., 740 So.2d 1233, 1234 (Fla. 4th DCA 1999). In the case of Distafano, the damages would differ based on the prior injuries of the Plaintiff and the Court found by clear and convincing evidence that the Plaintiff lied regarding her previous injuries in order to maximize the damages in which she would recover. 

Distafano relies on Simmons v. Henderson, 745 So.2d 1031, 1032 (Fla. 2d DCA 1999), in which the Court pointed out the distinctions. In Simmons, the Trial Court conducted an evidentiary hearing that focused primarily on the appellant’s misstatements regarding her work, her income, and her understanding of questions asked during her deposition. Id. The appellant in that case had an I.Q. of sixty-five and often became very confused during questioning. Id. In this evidentiary hearing the counsel for appellant submitted evidence showing that the appellant had mental weaknesses, in Distafano, the counsel did not submit any documentation showing mental issues due to age. Therefore, it was not clear to the Court that the Plaintiff in Distafano did not attempt to mislead the Court. The Trial Court found that “these are not … oversights or simply failed memory … But it seems to be a whole line of answers that are intended to deceive….” Id. The Trial Court then dismissed the Appellant’s Complaint with prejudice as a sanction for attempting to perpetrate a fraud on the Court. Distafano v. State Farm Mutual Automobile Insurance Co., 28 Fla. L. Weekly D1077 (Fla. 1st DCA April 28, 2003).

If a Judge does find that a party committed fraud on the Court, the Judge has the ability to dismiss the party’s case. A Trial Judge has the inherent authority to dismiss actions based on fraud and collusion. Distafano v. State Farm Mutual Automobile Insurance Co., 28 Fla. L. Weekly D1077 (Fla. 1st DCA April 28, 2003). Although, the Court does have this ability, they often do not exercise their right. Dismissing one’s case is one of the highest, if not the highest, sanctions in the Court system. “Trial court’s power of dismissal should be used cautiously and sparingly, and only upon the most blatant showing of fraud, pretense, collusion, or other similar wrongdoing.” Id

More common remedies for fraud on the Court include sanctions and orders to pay attorney fees and costs associated with the action. The team at the Horton Law Group, P.A. is aggressive, and we will fight for you.  

Why hire the Horton Law Group, P.A?

The outcome of your case ultimately depends on who you chose to represent you. The principal partner at the Horton Law Group, P.A., Attorney Sommer C. Horton, is an experienced and aggressive litigator. She is highly regarded for her creativeness, strategic judgment, and her uncanny ability to deliver persuasive legal arguments in the courtroom. She has a tremendous skill for being an aggressive advocate for her clients, while being one who understands and appreciates how trying litigation can be, thus, she is extremely sensitive to her clients’ needs. Ms. Horton is passionate about the law and believes in seeking justice for her clients in an ethical and economic manner. Ms. Horton fights for each one of her clients, every step of the way. If the case cannot be settled out of Court, Ms. Horton will be litigating your case at trial.

The Horton Law Group, P.A. is a boutique civil litigation law firm that only takes on a limited number of cases so that personal attention can be given to every client. Make the right call – schedule a free 30-minute consultation with Ms. Horton. You can make an appointment by calling 561-299-0018 or emailing legalsupport@hortonlawgroup.com

Fraudulent Transfer of Property

Why would someone transfer their property for no value? Often to outrun the law. When someone knows that there is a Judgment or ruling that is about to be made against them, parties sometimes try to hide their assets. This is fraud.  You should not do this as the punishments can be severe.  

In Florida, the laws governing fraudulent transfer of assets are Fla. Stat. 726.105. 726.106, and the Florida Uniform Fraudulent Transfers Act, “FUFTA” (an adaptation of the federal act regarding fraudulent transfers, Uniform Fraudulent Transfers Act “UFTA”). For a transaction to be considered a fraudulent transfer under Florida’s Uniform Fraudulent Transfer Act (UFTA), the property being transferred must qualify as an asset under statutory definitions. Fla. Stat. 726.102(2)(a)726.105(1)(a)

Under Florida’s version of UFTA (“FUFTA”), a fraudulent transfer is generally defined as “a transfer made, or obligation incurred by a debtor if made with actual intent to hinder, delay or defraud any creditor of the debtor” or a transfer made “without receiving a reasonably equivalent value in exchange for the transfer or obligation.” (Fla. Stat. § 726.105(1)(a)-(b)). 

There are different types of fraudulent transfers:

  • The first type is an “actual” fraudulent transfer, which focuses on the transferor’s intent to delay, defraud or hinder creditors (Fla. Stat. § 726.105(a)).
  • The second type is a “constructive” fraudulent transfer, which focuses not on the transferor’s intent but rather, the economic effects of the transaction (Fla. Stat. §§ 726.105(1)(b); 726.106(1) and 726.106(2)).

What is actual fraud? 

To determine actual fraud, (1) the Court must determine if there was a creditor to be defraud, (A “creditor” is defined as “a person who has a claim.” Fla. Stat. § 726.102. This definition is broad, as a “claim” is defined as merely “a right to payment,” regardless of that right’s liquidity, maturity, securitization, or contingency) and that (2) there was a transfer of property that could have been applied to payment of the debt due, and (3) that the debtor intended to commit fraud. Branch Banking & Trust Co. v. Hamilton Greens, LLC, 2016 U.S. Dist. LEXIS 77087, at 29 (S.D. Fla. Jan. 13, 2016). 

 To determine if a transfer was committed with the intent to defraud, the Court looks to numerous different factors. These facts include but are not limited to: 

(1) Transfer to inside persons (family members or friends who received the property without paying for it), 

(2) Retention of possession after the transfer, 

(3) Concealment of transfer, 

(4) Notice of pending litigation,

 (5) Transfer of the entire estate, 

(6) Absconding, 

(7) Removal or concealment of assets,

 (8) Value of the assets transferred, 

(9) Insolvency, 

(10) Timing of transfer, 

(11) Transfer of essential assets. Fla. Stat. § 726.105(2)

If the determination of if the transfer was intended to be fraudulent, the Court looks to a totality of the circumstances surrounding the transfer. Often the Court looks for numerous “badges of fraud” to determine if the intent was indeed fraudulent. Mejia v. Ruiz, 985 So. 2d 1109, 1113 (Fla. 3d DCA 2008). There is no minimum number of factors that must be present to support a finding of fraudulent intent. Fraud may be found where only one or two factors are present and may not be found at all where several factors are present. The Courts use these and other factors merely as a guide. If fraud is found, the Court can undo the transfers and/or order the fraudulent parties to pay the monies owed under the order in a timely manner plus attorney fees, otherwise, a Writ for that party’s arrest will be issued and that party will be incarcerated until the payments are made. 

What is constructive fraud?

In order to prove constructive fraud, the Court does not look to the subjective intent of the defrauder but instead to the instances in which fraud is implied in the situation. The elements to establish constructive fraud are: (1) the debtor did not receive reasonably equivalent value in exchange for the transfer; and (2) the debtor: (a) was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction (“Unreasonably Small Capital”); (b) intended to incur, or believed or reasonably should have believed that he or she would incur, debts beyond his or her ability to pay as they became due (“Cash Flow Insolvency”); or (c) if a creditor’s claim arose before the transfer was made or the obligation was incurred, was insolvent at that time or the debtor became insolvent as a result of the transfer or obligation (“Balance Sheet Insolvency”). (Fla. Stat. 726.105(1)(b), 726.106(1)).

A determination of “reasonable equivalent value,” is left to the Court’s discretion. Transfers made or obligations incurred solely for the benefit of third parties do not furnish reasonably equivalent value. In re Amelung, 2010 Bankr. LEXIS 1220, at *10-11 (Bankr. S.D. Fla. Apr. 7, 2010). The Florida Courts often look at the “economic reality” of the situation and consider the good faith of the parties, the disparity of the fair value of the property and what the debtor actually received and if the transaction was made at arm’s length. In re Miami General Hosp., Inc., 124 B.R. 383, 394 (Bankr. S.D. Fla. 1991)In re Dealers Agency Services, Inc., 380 B.R. 608, 619 (Bankr. M.D. Fla. 2007).

Proving the actual intent of a debtor can be difficult, so FUFTA provides a list factor —or “badges of fraud”— from which a Court may infer the debtor’s intent. (Fla. Stat. § 726.105(2)). Proving a constructive fraudulent, on the other hand, requires proof that the debtor (i) did not receive reasonably equivalent value for the asset; and (ii) the transfer rendered the debtor insolvent. (Fla. Stat. §§ 726.105(1)(b); 726.106(1) and 726.106(2)). For example, a client owns a $500,00.00 home and they are to get a Judgment placed against them. Therefore, the homeowner sells the house to their child for $10 a week before the final hearing to determine the Judgment. The Court would likely consider this a fraudulent transfer.  

Unfortunately, this happens all the time in family Court. When one party is ordered to equitably distribute half of his or her assets or when there is an Order for lump sum alimony or an Order to pay a large amount of attorney fees to the opposing parties attorney. Our advice to you is DON’T ENGAGE IN FRAUDULENT TRANSFERS. 

When a party is found to have transferred their assets fraudulently, they are numerous civil remedies available to the Trial Court, including but not limited to:

  • You can be found in contempt of Court 
  • Your credibility as a witness of a party will be tarnished (the Court can strike all of your testimony as unreliable and non-trustworthy) 
  • Your pleadings or Motions may be dismissed (the degree of misconduct needed to support dismissal is high. It has been defined as perjurious conduct, so repeated or egregious as to corrupt and compromise the process to the point that the Court is prejudiced in its ability to impartially adjudicate the claim. Savino v. Florida Drive In Theatre Management, Inc., 637 So. 2d 1011 (Fla. 4th D.C.A. 1997).)
  • You can be fined or sanctioned
  • You can be ordered to pay attorney fees 
  • The Court can refer your case to the State Attorney’s Office and recommend that you be prosecuted criminally. 
  • The Court can undo the fraudulent transfer
  • The Court can order you to comply with the monetary terms of the Order (that you tried to get out of by engaging in the fraudulent transfer) and if you don’t, you will be incarcerated until you comply. 

Why hire the Horton Law Group, P.A?

The outcome of your case ultimately depends on who you chose to represent you. The principal partner at the Horton Law Group, P.A., Attorney Sommer C. Horton, is an experienced and aggressive litigator. She is highly regarded for her creativeness, strategic judgment, and her uncanny ability to deliver persuasive legal arguments in the courtroom. She has a tremendous skill for being an aggressive advocate for her clients, while being one who understands and appreciates how trying litigation can be, thus, she is extremely sensitive to her clients’ needs. Ms. Horton is passionate about the law and believes in seeking justice for her clients in an ethical and economic manner. Ms. Horton fights for each one of her clients, every step of the way. If the case cannot be settled out of Court, Ms. Horton will be litigating your case at trial.

The Horton Law Group, P.A. is a boutique civil litigation law firm that only takes on a limited number of cases so that personal attention can be given to every client. Make the right call – schedule a free 30-minute consultation with Ms. Horton. You can make an appointment by calling 561-299-0018 or emailing legalsupport@hortonlawgroup.com.

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