Thursday, October 29, 2009
The Nevada Supreme Court has held that a stipulated judgment must be vacated in a medical malpractice action against a hospital. The plaintiff family had retained an attorney. Unbeknownst to the client, the attorney settled the case for $160,000, forged the settlement papers and disappeared with the proceeds. The family sought to vacate the settlement. The hospital opposed, contending that the plaintiffs had selected counsel, endowed counsel with the apparent authority to settle and should bear the burden of their bad choice.
The court found that the lawyer ("a faithless agent") had perpetrated a fraud on the court:
In this case, Davidson [the absconding attorney] obtained Valley Hospital’s lawyer’s signature on the stipulated judgment and presented it to the district judge, who signed and entered it as the final judgment in the case, forever concluding the Garner family’s wrongful death claims. In so doing, Davidson acted as an officer of the court and misrepresented a fraudulent settlement to the district court judge as genuine. Other courts, confronted with like facts, have found fraud on the court, egregious enough to justify vacating the judgment and allowing the claims to proceed.