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party, counsel for the third party had secretly negotiated a deal
with the plaintiff whereby the third party would “settle” the
case for $3.5 million and assign its rights to sue the insurance
company, in exchange for plaintiff’s agreeing to not collect from
the third party. When the plaintiff sued the insurance company
and moved for summary judgment, the insurance company moved to
set aside the previous judgment on the grounds that the court
before which the earlier lawsuit was brought was not informed of
the facts underlying the settlement and would not have approved
it had the court been so aware. The court in Spence-Parker
agreed, holding that such concealment constituted damage to the
judicial system in that the court in the earlier lawsuit would
not have approved the settlement had it been fully informed of
the facts. Id. In contrast to Spence-Parker, the Court did not
lack knowledge of a material fact so as to damage the judicial
process when it approved the settlement in these cases.
Petitioners argue in the alternative that respondent’s and
Jacob’s overall conduct in these cases constituted fraud on the
Court. We reject this argument. Petitioners note in their brief
that “allegations that one’s attorney was grossly negligent or
lacked authority are insufficient to demonstrate fraud upon the
Court.” Petitioners attempt to circumvent this rule by asserting
that Jacob’s conduct was deceitful and unethical, primarily on
the basis of Jacob’s involvement in the cases while under Rule
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Last modified: May 25, 2011