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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Murray v. Ledbetter (09/29/2006) sp-6053

Murray v. Ledbetter (09/29/2006) sp-6053, 144 P3d 492

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA

HERSHELL B. MURRAY, )
) Supreme Court No. S- 11530/S-11609
Appellant/Cross-Appellee, )
) Superior Court No. 3AN-01-06624 CI
v. )
)
RODNEY D. LEDBETTER and ) O P I N I O N
KATHERINE L. LEDBETTER also )
known as KATHERINE L. ) No. 6053 - September 29, 2006
SCHLOTFELDT, )
)
Appellees/Cross-Appellants. )
)
Appeal    from     the
          Superior Court of the State of Alaska,  Third
          Judicial  District, Anchorage,  Sen  K.  Tan,
          Judge.

          Appearances: Michael Jungreis, Hartig  Rhodes
          Hoge   &   Lekisch,   PC,   Anchorage,    for
          Appellant/Cross-Appellee.      Gregory     R.
          Henrikson,  Marc G. Wilhelm, and Marjorie  K.
          Allard,  Richmond  &  Quinn,  Anchorage,  for
          Appellees/Cross-Appellants.

          Before:   Bryner,  Chief  Justice,  Matthews,
          Fabe,  and  Carpeneti, Justices.   [Eastaugh,
          Justice, not participating.]

          BRYNER, Chief Justice.

I.   INTRODUCTION
          Hershell  Murray  appeals  a  decision  by  the  Alaska
superior court that refused to enforce an Idaho judgment  against
Katherine Ledbetter because, in the courts view, the judgment had
been  obtained  by  fraud  on the Idaho  court  and  had  thereby
deprived Katherine of an opportunity to be heard.  But the  trial
court   did   not  find  an  intentional  fraud  or  a   reckless
misrepresentation.   Moreover, Murray was  not  involved  in  the
misrepresentation.  And the record shows that Katherines  failure
to  appear  and defend in the Idaho action largely resulted  from
her own conscious decision not to participate in the case.  Given
these  circumstances, we find that the alleged  misrepresentation
amounted,  at most, to a wrong committed between the parties  and
was  not  sufficiently egregious to qualify as a  fraud  directed
against  the court.  Accordingly, we reverse the superior  courts
judgment.
II.  FACTS
          The  dispute  in  this case traces its origins  to  the
1980s,  when Rodney and Katherine Ledbetter, who were married  at
the  time,  participated in some business ventures with  Hershell
Murray.  By the late 1980s their ventures went sour.  In 1989 the
Ledbetters applied for bankruptcy in the United States Bankruptcy
Court  for the District of Nevada.  Murray filed a claim  in  the
bankruptcy  action, alleging that the Ledbetters owed  him  money
that  they  had  gained  by engaging in  fraud.   The  Ledbetters
eventually  settled the fraud claim with Murray,  stipulating  to
give  him  notes that jointly and severally obliged them  to  pay
Murray $500,000, plus interest, over five years.  As part of  the
settlement,  the Ledbetters also agreed to sign a  confession  of
judgment acknowledging their liability to Murray for the  amounts
due  under the note.  The settlement agreement expressly provided
that,  if  the  Ledbetters defaulted on their obligation,  Murray
could  sue for a judgment on their confession in any state  where
either  Rodney  or  Katherine owned  property  or  resided.   The
bankruptcy   court   approved  the  stipulation   in   1990   and
incorporated  its  terms in the order confirming  the  Ledbetters
reorganization plan.
          The following year Katherine and Rodney divorced in the
Idaho  district court.  Katherine was represented by a  law  firm
from  Ketchum, Idaho; Rodney was represented by another  attorney
from  Ketchum, Roger Crist.  In April 1991 the Idaho court issued
a  decree  of  divorce.   The  decree ordered  Rodney  to  assume
liability for most marital debts, and to hold Katherine  harmless
from  any  claims connected with those debts, including debts  of
the  parties and claims relating to those debts listed  in  their
1989 bankruptcy proceedings.
          In  February  1992 Murray sued Rodney and Katherine  in
the  Idaho  district court, alleging that they had  defaulted  on
their  1990 settlement agreement and seeking entry of a  judgment
against  them, jointly and severally, on their Nevada  confession
of  judgment.  Katherine received personal service of the summons
and  complaint  for  Murrays suit soon after  the  complaint  was
filed.   On  March 5, 1992, she wrote a letter to  Murrays  Idaho
lawyer,  Bradley Andrews, enclosing a copy of her recent  divorce
decree.   Referring  to  the decrees provision  in  which  Rodney
assumed  responsibility for all marital debt, Katherine  demanded
to  be  removed  from the suit immediately as is my  legal  right
according to my divorce.  She then added, I look forward to  your
immediate response.  In response, Andrews simply sent Katherine a
copy of a letter that had recently been sent to Rodney by another
of  Murrays attorneys.  The letter said that its purpose  was  to
confirm  that we [Murrays attorneys] will give you and  Katherine
an  extension until March 23, 1992 in which to file a response to
the Motion for Judgment now pending in Blaine, Idaho.  The letter
also  mentioned  that Rodney had offered to  settle  the  pending
action by an agreement that would have allowed Murray to have the
judgment he sought if Murray would agree not to execute on it, in
return  for  which Rodney proposed to give Murray information  on
the whereabouts of a third party who was trying to shelter assets
that could be collected to satisfy the judgment.
          Upon  receiving  this response from Andrews,  Katherine
stopped by the office of Rodneys attorney, Roger Crist.  Although
she  evidently  did  not meet with Crist, Katherine  gave  Crists
receptionist  all the paperwork she had received  concerning  the
recently  filed  lawsuit,  including  the  original  summons  and
complaint that had been served on her by the sheriff; her copy of
the March 5 letter she had sent to Murrays attorney, Andrews; and
the  original letter that Andrews had sent Katherine in response,
together with its attached copy of the earlier letter to Rodney.
          According  to Crist, he had been contacted  by  Rodney,
who  had  asked  Crist  to  file  an  appearance  on  Rodney  and
Katherines behalf.  Rodney had indicated that he wanted to  delay
the  lawsuit and work out a compromise judgment.  Rodney had also
said  that  Katherine was willing to go along with this approach.
Based  on  his  conversations with Rodney and  the  documents  he
received  from Katherine, Crist thought that he had authority  to
represent  Katherine.   On  March  23,  he  filed  a  notice   of
appearance in the lawsuit on behalf of both Rodney and Katherine.
          In  May  1993 Crist and Andrews agreed on a settlement.
Under the settlements terms, Rodney and Katherine would allow the
Idaho  court  to enter judgment for Murray in the amount  of  the
unpaid principal on their original obligation, as well as accrued
interest, costs, and attorneys fees; they would also agree  to  a
schedule for paying the judgment.  In return, Murray would sign a
covenant  not  to execute on the judgment as long as  Rodney  and
Katherine stayed current on their payments.  On June 9, 1993,  in
accordance  with the settlements terms, the Idaho  court  entered
judgment against Rodney and Katherine, jointly and severally, for
$650,064.82.   Crist  purported  to  represent  both  Rodney  and
Katherine in the settlement.
          Meanwhile, after dropping the paperwork off  at  Crists
office in March 1992, Katherine had shown no further interest  in
Murrays  suit:  she  made  no  attempt  to  participate  in   the
litigation,  never inquired about its status, and  had  no  other
contact with the court or the parties counsel.
          Katherine relocated to Anchorage in the summer of 1992.
She  remarried  there and took the family name of Schlotfeldt  in
1995.  In June 1998 the Idaho district court renewed and extended
the  judgment against Rodney and Katherine for an additional five
years.  The judgment evidently remained unpaid.
          In  2001  Murray  filed  the Idaho  judgment  with  the
superior  court in Anchorage and served notice on Katherine  that
he  sought  to  enforce  it against her as  an  Alaska  judgment.
Katherine   contested  the  judgment,  alleging   that   it   was
unenforceable because she had never authorized Crist to represent
her in the Idaho litigation.
          The  superior court held a hearing on Katherines claim.
At  the  hearing,  Katherine initially  seemed  to  question  the
validity of the original Nevada confession of judgment, asserting
that  the  business dealings underlying that settlement had  been
between  Murray  and Rodney and that she knew little  or  nothing
about   them.     Ultimately,  however,  Katherine  focused   her
challenge  on  the  Idaho litigation.  She  claimed  that  Crists
actions  in  negotiating a settlement on her behalf  without  her
authorization amounted to a fraud on the Idaho court and rendered
its judgment void.  While asserting that she had never authorized
Crist  to  represent  her, Katherine gave  conflicting  testimony
concerning the underlying facts.  Although she acknowledged  that
she  recalled giving Crists receptionist her paperwork concerning
the case, she claimed not to remember having been served with the
summons  and complaint, and she further claimed that she did  not
know  that  the Idaho case was still pending until  she  recently
received  notice  that  Murray had filed the  Idaho  judgment  in
Alaska.  Katherine explained that she believed all along that her
divorce  decree made Rodney responsible for their obligation  and
gave her the right to be removed from any claims against Rodney.
          In opposition to Katherines testimony, Murray presented
deposition  testimony  given  by  Crist.   While  Crist   readily
acknowledged that he had never personally  spoken with  Katherine
about  Murrays  suit,  he insisted that he had  firmly  believed,
based  on  assurances given to him by Rodney  and  the  paperwork
Katherine  had left at his office, that Katherine had wanted  him
to  handle her case and was willing to agree to the settlement he
ultimately negotiated for her and Rodney.
          During  closing  arguments at the end of  the  hearing,
Katherines  attorney  argued  that the  Idaho  judgment  was  the
product of fraud on the court because Crist had entered into  the
stipulation without Katherines consent after falsely leading  the
Idaho  court  to  believe  that he represented  Katherine.   This
critical  lie, Katherines counsel asserted, had led to the  Idaho
judgment.   Insisting  that the validity of  the  earlier  Nevada
judgment  was  not at issue, Katherines attorney maintained  that
the  key  to  the fraud was that Crist did not have authority  to
represent  Katherine  regardless of whether he believed  that  he
actually did.
          Responding on Murrays behalf, Murrays counsel relied on
Katherines  self-contradictory testimony  and  Crists  relatively
straightforward  account  to argue that  Katherine  had  actually
authorized Crist to handle her case, or at least that Crist could
have  reasonably  believed  that she had  consented.   At  worst,
Murrays  counsel  alternatively argued, Crists  conduct  did  not
amount  to a fraud on the court.  Emphasizing that Katherine  had
offered no evidence to prove that she did not actually owe Murray
the  amounts  claimed  in  the Idaho  judgment,  Murrays  counsel
contended  that  the evidence failed to support  a  finding  that
Crist  had  acted with intent to defraud or that his conduct  had
caused  any  actual prejudice to Katherine.  If  Crist  had  done
nothing  on Katherines behalf, Murrays counsel pointed  out,  the
Idaho court would have entered a default judgment against her and
no  further  notice to her would have been required  under  Idaho
law.
          After   considering  the  evidence  and   the   parties
arguments,  Superior  Court Judge Sen K.  Tan  issued  a  written
decision  concluding  that the Idaho judgment  was  unenforceable
because  it  had  been obtained by a fraud on  the  Idaho  court.
Before  reaching  this conclusion, the judge  made  a  number  of
specific  findings  adopting Murrays  view  as  to  many  of  the
disputed facts.  Specifically, the judge found that Katherine had
been  personally served with the Idaho summons and complaint  and
had thus received notice of the Idaho lawsuit.  While noting that
Katherine  had been honestly mistaken in believing that  she  was
not  required to participate in the Idaho proceedings, the  judge
also  found that she had no reason to expect that either  Andrews
or  Crist  would inform her of her misconception.  And the  judge
further  emphasized  that  the  letter  Katherine  received  from
Andrews  did not in any way suggest that Ms. Schlotfeldt did  not
have  to  respond to the complaint.  Moreover, the judge accepted
Crists testimony that, based on his conversations with Rodney and
the  documents he received from Katherine,  he actually  believed
that  he  was authorized to represent Katherine.  Finally,  Judge
Tan  flatly  rejected  the notion that  Murray  might  have  been
involved in any fraudulent conduct.
          Despite  these favorable findings, the court determined
that  Crists  conduct  amounted to a fraud  on  the  Idaho  court
because   Crist  had  purported  to  represent  Katherine   under
circumstances  in which he took his instructions  from  [Rodney],
and  at  no  time  conferred with [Katherine].  Once  Crist  took
responsibility for Katherines representation, the court reasoned,
he  owed her a duty to inform her of her mistake.  In the  courts
view,  Crists  failure  to do so had left Katherine  out  of  the
settlement  and had thus deprived her of meaningful participation
in  the  case.  Analogizing Katherines situation to one in  which
the  Ninth  Circuit found that a fraud upon the  court  had  been
committed,   the  judge  ruled  that  the  Idaho   judgment   was
unenforceable in Alaska because Katherine had never had  her  day
in court.1
          Murray appeals.2
III. DISCUSSION
          In  challenging  the  superior  courts  ruling,  Murray
argues  that  the  record fails to support  the  superior  courts
conclusion    that    Crist   represented    Katherine    without
authorization.   He further contends that, in any  event,  Crists
actions  on  behalf of Katherine caused her no harm and  did  not
amount to fraud on the court under prevailing standards in either
Idaho or Alaska.  Given these circumstances, Murray insists  that
the superior court was required to give full faith and credit  to
the Idaho judgment.
          Katherine responds that the policy against enforcing  a
judgment   obtained   by  fraud  on  the  court  is   universally
recognized  and  was  correctly applied here.   Emphasizing  that
Alaska cases dealing with fraud on the court have not required  a
          finding of specific intent to defraud, Katherine maintains that
the superior court properly found that Crist committed a fraud on
the  Idaho court by recklessly disregarding his professional duty
to unambiguously secure her consent to be represented.  Katherine
further maintains that it is simply irrelevant to speculate as to
what  the  Idaho court might have done in the absence  of  Crists
unauthorized actions.
     A.   Applicable Law
          The  threshold  question raised by these  arguments  is
what  law  should  apply  in determining whether  Crists  conduct
amounted  to  a  fraud on the court  Idahos or  Alaskas?   Murray
filed  his superior court action against Katherine under  Alaskas
version  of  the  Uniform Enforcement of Foreign Judgments  Act.3
The act allows any person having an out-of-state judgment to file
an  authenticated copy with the clerk of court in  Alaska.4   The
clerk must then treat the foreign judgment in the same manner  as
a  domestic judgment.5  This includes allowing the person against
whom  the  foreign judgment is to be enforced to  raise  all  the
defenses  that  would  be  available  against  a  similar  Alaska
judgment:  A judgment so filed has the same effect and is subject
to  the same procedures, defenses, and proceedings for reopening,
vacating,  or staying as a domestic judgment and may be  enforced
and  satisfied in like manner.6  Under the express terms of  this
provision,  Alaska law would seemingly determine the availability
of a defense to Murrays Idaho judgment.  Yet because the specific
defense  at  issue here involves a fraud allegedly  committed  in
Idaho  against  an Idaho court, a strong argument could  be  made
that  Idaho  law  governing fraud on the court  should  determine
whether Crists conduct amounted to a fraud on that court.
          Although the parties briefing conflicts on this choice-
of-law  issue   Murray advancing Idaho law and  Katherine  citing
Alaska  law   we  need  not  resolve the  conflict,  for  we  are
convinced  that  the law governing fraud on  the  court  in  both
states  dictates the same conclusion on the particular  facts  of
this case.
     B.   Fraud on the Court
          As  the  United States Supreme Court observed in Hazel-
Atlas  Glass  Company v. Hartford-Empire Company,  the  equitable
doctrine of fraud on the court is a distinguishing feature of our
common-law tradition:
          From  the  beginning there has existed  along
          side  the term rule a rule of equity  to  the
          effect that under certain circumstances,  one
          of  which  is after-discovered fraud,  relief
          will  be granted against judgments regardless
          of  the  term  of their entry.   This  equity
          rule, which was firmly established in English
          practice  long before the foundation  of  our
          Republic,  the  courts  have  developed   and
          fashioned to fulfill a universally recognized
          need  for  correcting  injustices  which,  in
          certain  instances,  are deemed  sufficiently
          gross   to  demand  a  departure  from  rigid
          adherence  to the term rule. Out of deference
          to  the  deep rooted policy in favor  of  the
          repose  of  judgments  entered  during   past
          terms, courts of equity have been cautious in
          exercising  their power over such  judgments.
          But  where  the occasion has demanded,  where
          enforcement  of  the judgment  is  manifestly
          unconscionable, they have wielded  the  power
          without hesitation.[7]
          After  recognizing  that this common-law  rule  allowed
relief  when  after-discovered  fraud  made  enforcement  of  the
judgment . . . manifestly unconscionable, 8 Hazel-Atlas  went  on
to consider the rules basic contours.  Noting that a fraud on the
court entails more than simply a case of a judgment obtained with
the  aid  of  a  witness  who, on the basis  of  after-discovered
evidence,  is believed possibly to have been guilty  of  perjury,
the Court suggested that a finding of fraud on the court required
something  like  the case then before it: a deliberately  planned
and  carefully  executed scheme to defraud not  only  the  Patent
Office  but  the  Circuit Court of Appeals.9  The  Court  further
emphasized that, on the record before it, [p]roof of the  scheme,
and  of  its  complete success up to date, is conclusive.10   The
Court  also  observed  that no equities  had  intervened  through
transfer  of the fraudulently procured patent or judgment  to  an
innocent  purchaser and that the party seeking relief  could  not
have been expected to do more than it did to uncover the fraud.11
The Court ultimately stressed that [t]his matter does not concern
only  private parties.  There are issues of great moment  to  the
public   in   a  patent  suit.  .  .  .  [T]ampering   with   the
administration of justice in the manner indisputably  shown  here
involves far more than an injury to a single litigant.  It  is  a
wrong  against  the institutions set up to protect and  safeguard
the  public,  institutions in which fraud cannot complacently  be
tolerated consistently with the good order of society.12
          In the sixty-plus years since the Supreme Court decided
Hazel-Atlas, its description of the traditional equity  rule  has
become  broadly accepted as a definitive statement of the current
form  of  the rule.  The rule is now codified as part of  Federal
Rule  of Civil Procedure 60(b), which spells out a limited number
of  grounds that parties may raise in seeking relief from a final
judgment.   Rule  60(b) includes a savings clause declaring  that
this  list  does not limit the power of a court to  entertain  an
independent action . . . to set aside a judgment for  fraud  upon
the court.13  Alaska Rule of Civil Procedure 60(b) and Idaho Rule
of  Civil Procedure 60(b) also incorporate this savings clause.14
Under  all relevant formulations of this rule, the party claiming
a  fraud  on the court bears the burden of proving the  claim  by
clear and convincing evidence.15
          1.   Idaho law
          Idaho  cases  applying Idaho Civil Rule  60(b)  espouse
Hazel-Atlass strict definition of the elements necessary to prove
fraud  on  the  court.  In Campbell v. Kildew, the Idaho  Supreme
Court recently identified Idahos principal case interpreting Rule
60(b)16  to be Compton v. Compton.17  Compton, in turn, construed
Idaho  Rule 60(b)s savings clause as preserving preexisting means
          of attacking a final judgment.18  In explaining this view, Compton
traced the Idaho rules meaning to Hazel-Atlas:
          The  term  fraud upon the court  contemplates
          more  than  interparty  misconduct,  and,  in
          Idaho,  has  been held to require  more  than
          perjury  or misrepresentation by a  party  or
          witness, even where the misrepresentation was
          made  to  establish the courts  jurisdiction.
          Willis v. Willis, 93 Idaho 261, 460 P.2d  396
          (1969).  Apparently such fraud will be  found
          only  in the presence of such tampering  with
          the administration of justice as to suggest a
          wrong  against  the institutions  set  up  to
          protect  and safeguard the public  .  .  .  .
          Hazel-Atlas Glass Co. v. Hartford Empire Co.,
          322  U.S.  238, 246, 64 S.Ct. 997,  1001,  88
          L.Ed. 1250, 1256 (1944) (fraud upon the court
          found  where attorney for patent holder wrote
          article  describing  patent  as  unique,  and
          arranged  for  publication in  trade  journal
          under   name   of   ostensibly  disinterested
          expert;  court relied on article in  reaching
          decision;  construing identical  language  of
          F.R.C.P.   60(b));  11  Wright  and   Miller,
          Federal   Practice   and   Procedure     2870
          (1973).[19]
          In  keeping with Hazel-Atlas, then, Idahos view of Rule
60(b), as explained in Compton, requires fraud on the court to be
based  on  clear  and  convincing proof of  a  fraudulent  scheme
directed  against  the  court.    Katherine  cites  no  authority
suggesting that Idaho takes a more expansive view of Rule  60(b)s
savings clause.  Thus, under the superior courts findings in this
case,  Katherines claim of fraud on the court would appear to  be
destined  to  fail  under Idaho law.  Here,  the  superior  court
declined  to rule that Crist had engaged in a scheme  to  defraud
Katherine or anyone else, expressly finding that he acted in  the
actual belief that he was authorized to represent Katherine.   We
think  that  Crists good-faith, albeit unauthorized,  efforts  to
represent Katherine could hardly be seen as tampering directed at
the  Idaho court, except perhaps in the attenuated sense that  it
involves  simply  a misrepresentation of facts to  establish  the
courts jurisdiction  conduct that Idaho courts regard as ordinary
fraud and refuse to treat as a fraud on the court.20
          2.   Alaska law
          Katherine   nonetheless  argues  that  Crists   conduct
amounted  to  a  fraud  on  the courts  under  Alaska  standards.
Although we agree that we have applied Alaskas Rule 60(b) savings
clause somewhat more broadly than Idaho courts have applied their
version  of the rule, we cannot agree that Alaskas view of  fraud
on  the courts is expansive enough to encompass the facts of this
case.
          Admittedly,  we  have  previously noted  that  specific
attempts  to  define  fraud  on the court  are  not  particularly
helpful.21  But we have nevertheless consistently recognized that
          [a] fraud upon the court may only be found in the most egregious
circumstances  involving  a corruption of  the  judicial  process
itself. 22  We have also endorsed the views of commentators  like
Professors Wright and Miller, who observe in their treatise  that
the  drafters of Rule 60(b) must have conceived of fraud upon the
court,  as  they used that phrase, as referring to  very  unusual
cases involving far more than an injury to a single litigant.  23
We  have  similarly favored the view that claims of  relief  from
judgment  for fraud must usually be decided under the  procedural
limitations  spelled out in Rule 60(b)(3) or  under  Rule  60(b)s
other specifically listed categories.24  And we have specifically
rejected a claim of fraud on the court based on a partys  failure
to  make  full and fair disclosure of evidence regarding property
value,  ruling that the matter was only between the  two  parties
and  did  not  involve a direct assault on the integrity  of  the
judicial process.25
          Of  course, as Katherine correctly points out, we  have
also  declined to hold that an intent to defraud must  invariably
be  proved  to  establish a fraud on the court.  On two  separate
occasions, we have ruled that a fraud on the court was shown even
though  the evidence did not prove a specific intent to  defraud.
In  Mallonee  v.  Grow, we held that a judgment  debtor  and  his
attorney had perpetrated a fraud on the court by applying for  an
ex  parte  writ of execution that grossly overstated  the  amount
that was actually owed, by using the writ to levy on property not
owned by the judgment debtor, and by then failing to serve notice
of the motion to confirm the propertys sale.26  While recognizing
that  [t]here has been no showing of an actual intent to defraud,
we insisted that [t]he purposeful or reckless disregard of . .  .
procedural  safeguards  which  results  in  the  deprivation   of
substantive rights constitutes an impermissible corruption of the
court process.27
          In  Higgins v. Municipality of Anchorage (Higgins  II),
despite acknowledging our earlier rulings in Village of Chefornak
v.   Hooper   Bay  Construction  and  Allen  v.  Bussell,   which
emphasiz[ed] how exceptional conduct must be to find fraud on the
court,28  we relied on Mallonee v. Grow to rule that a  municipal
attorney  had  perpetrated a fraud on  the  court  by  recklessly
misrepresenting to this court the municipalitys  position  in  an
administrative appeal.
          Higgins  had filed a wrongful discharge action  in  the
superior  court after the municipality terminated his employment;
the  superior  court  ruled that it would have  been  futile  for
Higgins  to have attempted to exhaust his administrative remedies
by  asking  for  arbitration, because, according  to  Higgins,  a
supervisor  had told him that the municipality would  refuse  any
request to arbitrate his grievance.29  The municipality petitioned
for review and convinced this court, in Municipality of Anchorage
v.  Higgins (Higgins I), to reverse the superior courts ruling on
the  ground that the record failed to support Higginss claim that
he had been told that the municipality would refuse to arbitrate.30
In  deciding  Higgins  I,  however,  we  were  unaware  that  the
municipalitys  attorney  had failed to  disclose  a  longstanding
municipal  policy of refusing all requests to engage in grievance
          arbitration.31  Higgins first discovered the existence of this
policy  after the superior court had dismissed his case on remand
from  our decision in Higgins I, so he moved seeking relief  from
judgment  on  the  ground  of  newly discovered  evidence.32  The
superior court denied his motion, ruling that Higgins could  have
discovered the policy sooner if he had acted with due diligence.33
          In  Higgins  II, we upheld the superior courts  finding
that  Higgins had not exercised due diligence in discovering  the
new  evidence.34  But we nonetheless ruled sua sponte that relief
from  judgment  was  warranted under Rule 60(b)s  savings  clause
because the municipality had perpetrated a fraud on this court in
Higgins  I.35   We  likened  the  municipalitys  conduct  to  the
misrepresentation we considered in Mallonee:   Here  .  .  .  the
municipality was at least reckless in misrepresenting its  policy
on  arbitration in Higgins I.  It clearly violated  its  duty  of
honest  dealing  with this court; this case  is  thus  closer  to
Mallonee than to Allen and Chefornak.  We therefore conclude that
our judgment in Higgins I should be set aside for fraud upon this
court.36
          3.   Distinguishing features of this case
          Katherine insists that Mallonee and Higgins II  support
a  finding of fraud on the court in her case because [t]here  can
be no question that Mr. Crist acted in reckless  disregard to the
procedural  safeguards that govern attorney client  relationships
and  the  integrity  of  the judicial process.   Yet  significant
differences exist between Katherines case, on the one  hand,  and
Mallonee and Higgins II, on the other.
               a.   Degree of misconduct
          First,  in  both Mallonee and Higgins II we dealt  with
conduct  that we expressly found to be reckless misrepresentation
if  not  outright  intentional fraud.37  But  despite  Katherines
contention   to  the  contrary,  the  superior  court   did   not
specifically  find that Crist acted recklessly.  The  court  here
simply  observed that, although Crist believed that he  had  been
authorized to represent both Rodney and Katherine, he nonetheless
took   his   instructions  from  Rodney,  never  consulted   with
Katherine,  and  did  not  actually have authority  to  represent
Katherine.  Unlike the express findings of reckless disregard, at
best,  in Mallonee and Higgins II, this determination seems  more
akin  to  a finding that Crist merely should have known  that  he
lacked  authority;  in other words, that Crist acted  negligently
with  respect  to  the  question of his  authority  to  represent
Katherine.
          Katherine  seems to posit that Crists conduct  amounted
to  a reckless misrepresentation as a matter of law, for purposes
of  invoking  Rule  60(b)s savings clause, even  if  he  actually
believed that he was authorized to represent Katherine, and  even
though  the  court made no express finding of reckless disregard.
To   support   her  position,  Katherine  cites   various   cases
recognizing  that  attorneys  cannot  enter  binding  settlements
without  their  clients  express  consent.   But  none  of  these
authorities applies Rule 60(b) or relies on a finding of fraud on
the  court.38   Katherine also cites several cases  holding  that
unauthorized   representation   made   a   judgment   void    and
          unenforceable.  But with the exception of Toscano v. Commissioner
of Internal Revenue,39 which involved a deliberate scheme to avoid
taxes  by  filing  a fraudulent lawsuit against a  defendant  who
lacked  the ability to respond, none of these cases purported  to
apply  Rule  60(b)s savings clause or held that  the  conduct  at
issue was a fraud on the court.40
               b.   Effect on outcome
          Second,   both  Mallonee  and  Higgins   II    involved
circumstances   in   which   it   was   undisputed    that    the
misrepresentation  at  issue had actually  misled  the  court  by
causing  it to issue a judgment that could not have been properly
reached if the true facts had been known.41  Here, Katherine  has
failed   to   carry   her  burden  of  showing  that   comparable
circumstances exist in her case.
          Although   Crist  obviously  misled  the  Idaho   court
concerning his actual authority to represent Katherine, it is far
from  clear that this misrepresentation caused the court to issue
a  judgment that it otherwise could not have issued.  By the time
Crist entered his appearance on Katherines behalf, Katherine  had
been served with a summons and complaint in the case.  Instead of
entering an appearance herself and either answering the complaint
or  moving for dismissal, Katherine had simply written to Murrays
lawyers,  demanding  that they dismiss her from  the  case.   Her
letter  mistakenly asserted that, because her divorce  settlement
made  Rodney  solely  responsible for the  debt,  Murray  had  no
recourse against her and could only proceed against Rodney.42  By
Katherines own account, she gave no further thought to  the  case
after  writing  to Murrays attorney because, as far  as  she  was
concerned,  the  debt was Rodneys problem,  not  hers.   She  was
content to leave it at that.
          Under these circumstances, even assuming that Crist had
not  entered his unauthorized appearance, Murray would have  been
entitled  to  obtain  a  default  judgment  against  Katherine.43
Although  Katherine asserts that default proceedings  might  have
given  her  further  notice  that  her  divorce  decree  had  not
completely  eliminated  her  liability,  Idaho  law  belies   the
assertion,  providing  that a default judgment  could  have  been
entered here without further notice to Katherine.44  More to  the
point,  the evidence provides no reason to suppose that Katherine
would  have responded to any additional notice, even  if  it  had
been given.  The correspondence that Katherine received back from
Murrays lawyers in response to her demand for dismissal gave  her
clear  notice  that  Murray, even after  being  informed  of  the
divorce  decree,  did not intend to drop his claim  against  her.
Yet in spite of this notice, Katherine gave no further thought to
the case, adhering to her view that the problem was Rodneys.
          And  in  any  event, Katherine has failed to  meet  her
burden of showing any appreciable likelihood that she might  have
received an Idaho court judgment more favorable than the one  the
court  actually entered.  In the proceedings before the  superior
court, Katherine offered no evidence challenging the validity  of
the  original  Nevada bankruptcy judgment or  the  confession  of
judgment  that  Katherine  executed as  part  of  the  settlement
agreement  incorporated  in  that judgment.   Nor  did  Katherine
          dispute that the settlement agreement was in default when Murray
filed his complaint in Idaho.  So the record offers no basis  for
assuming that Katherine could have avoided being held jointly and
severally  liable  for  the  unpaid debt  due  under  the  Nevada
confession if she had appeared and contested the Idaho case.
          If  Katherine  had  appeared and  defended,  then,  she
presumably  would  have  faced  the  possibility  of  a  judgment
allowing  immediate execution against her for the amount  of  the
unpaid  debt,  plus updated interest and Murrays attorneys  fees.
Compared  to  that  outcome,  Crists  negotiated  settlement  did
markedly better: it left Katherine liable for the amount  of  the
unpaid  debt,  plus interest and Murrays fees,  but  it  buffered
Katherine against immediate execution by giving her around  three
more  months to make good on the payments (or to force Rodney  to
make good on the payments), due to the covenant not to execute on
the judgment if she complied with this schedule.
               c.   Party securing unfair advantage
          The  third  important point of distinction between  the
circumstances in Mallonee and Higgins II and those at issue  here
is  that in both of the earlier cases the party who committed the
misrepresentation  (or  the  party represented  by  the  attorney
committing the misrepresentation) sought to enforce the  judgment
procured by the misrepresentation to the obvious detriment of the
party against whom the judgment was issued.  Thus, in effect, the
offending  party  affirmatively used the power of  the  court  to
secure  an  unfair  advantage  over  an  innocent  opponent.   In
Mallonee,  the  judgment creditor not only obtained  an  inflated
judgment  for  execution, he then used that judgment  to  execute
against  the  judgment  creditor in a blatantly  improper  way.45
Similarly,   in  Higgins  II,  the  municipality  relied   on   a
misrepresentation  to  obtain an appellate decision  (Higgins  I)
reversing  the superior courts initial ruling in Higginss  favor;
on  remand,  the municipality then used the improvidently  issued
opinion  in  Higgins  I as the primary basis for  convincing  the
superior court to dismiss Higginss case.46
          It  is  this  aspect of Mallonee and  Higgins  II   the
misrepresenting partys affirmative use of the improperly  secured
judgment against the party damaged by the misrepresentation  that
elevated the conduct in each case from a matter of ordinary fraud
between  the  parties, a private concern,  to  a  fraud  directed
against the court itself. Granting relief became necessary  as  a
matter of equity to avoid the manifestly unconscionable result of
allowing  the defrauding party to use the court as an  instrument
of power against an opponent.
          Here,  by contrast, the misrepresentation was committed
by Crist, who was not a party to the Idaho action.  Nor was he an
attorney who represented the party who is seeking to enforce  the
Idaho judgment.  Crist represented Rodney in that action.  But it
is  Murray,  not  Crist or Rodney, who now seeks to  enforce  the
Idaho judgment against Katherine.
          4.   The balance of equities
          Katherine  has  neither alleged  nor  established  that
Murray  played  any  role in Crists misrepresentation.   And  she
makes  no attempt on appeal to explain how equity would be served
by shifting the consequences of Crists actions from her to Murray
a  party  who, unlike Katherine, apparently pursued his  case  by
diligently  complying with all applicable procedural  rules.   On
appeal, Katherine insists that such equitable considerations  are
simply  irrelevant; according to Katherine, they should  play  no
role in determining whether Crists conduct amounted to a fraud on
the court.
          Yet  Katherines argument disregards the source  of  the
courts power to grant relief from a judgment obtained by fraud on
the  court:  it  is  a power born from common law  traditions  of
equity; it is an equity rule developed and fashioned to fulfill a
universally  recognized  need for correcting  injustices  .  .  .
deemed  sufficiently  gross  to demand  a  departure  from  rigid
adherence  to  the  term  rule  in those  rare  situations  where
enforcement of the judgment is manifestly unconscionable. 47   In
Mallonee  v.  Grow,  we qualified our decision  to  excuse  Grows
lengthy  delay  in  moving  to set aside  Mallonees  fraudulently
obtained  judgment  by expressly noting that there  has  been  no
reliance upon the judgment or order by anyone other than  by  the
party  who perpetrated the fraud on the court.48  The same cannot
be said here.
          As  the  party  claiming fraud on the court,  Katherine
bore  the burden of proving by clear and convincing evidence that
an  order  relieving  her  from the Idaho  judgment   a  judgment
resulting from Katherines own knowing decision not to contest the
Idaho  action   would  avoid saddling Murray  with  a  manifestly
inequitable  result by depriving Murray of his settled  right  to
rely  on  the Idaho judgment.  Katherine has failed to meet  this
burden.
          5.   Sufficiency of findings
          We recognize that the superior courts decision to grant
relief  from judgment on the ground that Crist committed a  fraud
on  the court is reviewable only for abuse of discretion.49   The
superior  court  expressly recognized that the fraud  alleged  in
this  case  is  not  fraud by Mr. Murray, the  party  seeking  to
enforce the judgment.  The court nonetheless granted relief based
on  Crists  representation of Katherine because  Crist  took  his
instructions  from  [Rodney],  and  at  no  time  conferred  with
[Katherine].  In the courts view, this barred her from  receiving
any information on the case after Mr. Crist entered an appearance
on   her   behalf,  and  therefore  deprived  her  of  meaningful
participation in the case.50
          But  as  we  noted above, the superior  court  did  not
specifically find that Crist had acted recklessly or with  intent
to  defraud.  To infer a tacit finding of recklessness, moreover,
would  seem  incompatible with the courts express  acceptance  of
Crists   testimony   that   he  concluded,   based   on   Rodneys
communications and the papers that Katherine left at his  office,
that  he  had  been authorized to represent Katherine.   And  the
record  fails  to  support the trial courts finding  that  Crists
conduct barred [Katherine] from receiving any information on  the
          case.  Undisputed evidence shows instead that Katherine stopped
receiving  information  regarding the  Idaho  litigation  largely
because  she knowingly, albeit inadvisedly, chose to  ignore  the
case.   Last,  despite recognizing that Murray had no involvement
in Crists misconduct, the superior court declined to consider the
offsetting   equities  from  Murrays  perspective   a   necessary
consideration  because fraud on the court is a rule  grounded  in
equity.
          Considering  the  totality of these circumstances,   we
think  that this case falls squarely within the ambit of  earlier
cases in which we have concluded that nondisclosure by a party or
his  attorney has not been enough51 to support a finding of fraud
on  the  court, and that the wrong, if wrong there was, was  only
between the parties in the case and involved no direct assault on
the integrity of the judicial process.52   In analogous cases  of
this  kind,  we have required the aggrieved party to seek  relief
under  the  more  demanding  procedural  framework  that  governs
specifically listed provisions of Rule 60(b).53  Accordingly,  we
conclude  that it was an abuse of discretion to find that  Crists
conduct amounted to a fraud on the court.54
IV.  CONCLUSION
          Because  Katherine advances no other ground for  relief
from the Idaho judgment,55 we REVERSE the superior courts ruling.
_______________________________
     1     Toscano v. Commissioner of Internal Revenue, 441  F.2d
930 (9th Cir. 1971).

     2     Katherine also cross-appeals, challenging the superior
courts denial of her motion for prevailing-party attorneys  fees.
Our decision reversing the superior courts decision declining  to
enforce  the Idaho judgment based on fraud on the court makes  it
unnecessary to consider Katherines cross-appeal.

     3    AS 09.30.200 - .270.

     4    AS 09.30.200.

     5    Id.

     6    Id.

     7     Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S.
238, 244-45 (1944) (internal citations omitted).

     8     Id.  (quoting Pickford v. Talbott, 225 U.S.  651,  657
(1912)).

     9    Id. at 245.

     10    Id. at 246.

     11    Id.

     12    Id.

     13    Fed. R. Civ. P. 60(b).

     14      The   savings  clauses  of  Alaska  Rule  of   Civil
Procedure 60(b) and Idaho Rule of Civil Procedure 60(b) both  say
that the rule does not limit the power of a court to entertain an
independent action . . . to set aside a judgment for  fraud  upon
the  court.  This language is identical in all material  respects
to   the  savings  clause  language  in  Federal  Rule  of  Civil
Procedure 60(b).

     15     See McCall v. Coats, 777 P.2d 655, 658 (Alaska  1989)
(one  who  asserts that an adverse party has obtained  a  verdict
through  fraud, misrepresentation or other misconduct,  including
fraud  on  the court, has the burden of proving the assertion  by
clear and convincing evidence); Campbell v. Kildew, 115 P.3d 731,
740  (Idaho 2005) (the party alleging fraud, including  fraud  on
the  court,  bears  the burden of proof by clear  and  convincing
evidence  that  the judgment was obtained by fraud);  England  v.
Doyle,  281  F.2d 304, 309-10 (9th Cir. 1960) (the burden  is  on
moving  party  to  establish fraud on  the  court  by  clear  and
convincing evidence); 37 Am. Jur. 2d Fraud and Deceit  471 (2006)
(When it is alleged, each element of fraud must be established by
clear  and  convincing evidence.  The party alleging fraud  bears
the burden of proving it.).

     16    Campbell, 115 P.3d at 739.

     17    Compton v. Compton, 612 P.2d 1175, 1180 (Idaho 1980).

     18    Id.

     19    Id. at 1181.

     20    Id. (citing Willis v. Willis, 460 P.2d 396 (1969), for
the  proposition that perjury or misrepresentation  to  establish
the courts jurisdiction does not by itself amount to fraud on the
court).

     21    Allen v. Bussell, 558 P.2d 496, 500 (Alaska 1976).

     22     Lowe  v.  Lowe, 817 P.2d 453, 457 n.9  (Alaska  1991)
(quoting Allen, 558 P.2d at 500).

     23     See  Allen, 558 P.2d at 500 (approvingly  quoting  11
Charles  Alan  Wright  & Arthur A. Miller, Federal  Practice  and
Procedure: Civil  2870, at 253 (1973)).

     24     See, e.g., Livingston v. Livingston, 572 P.2d 79,  85
(Alaska  1977)  (In  reversing finding  of  fraud  on  court  and
remanding  to  consider  granting  relief  under  Rule   60(b)(6)
instead,   opinion   quotes   with  approval   Professor   Moores
observation: Fraud in obtaining jurisdiction may at  times  be  a
fraud  upon  the  court.  But appropriate relief can  usually  be
afforded  under  other  concepts of fraud;  and  better  judicial
administration will result in most cases if this species of fraud
is  not put within the rather nebulous category of fraud upon the
court.   While  fraud as to jurisdiction may improperly  put  the
judicial machinery in operation, it usually does not corrupt  the
judicial  power.   7  James  Wm. Moore  et  al.,  Moores  Federal
Practice  60.33, at 514-15 (2d ed. 1975)).

     25     See  OLink v. OLink, 632 P.2d 225, 231 (Alaska 1981),
cited in Lowe, 817 P.2d at 460.

     26    Mallonee v. Grow, 502 P.2d 432, 438 (Alaska 1972).

     27    Id. at 438-39.

     28    Higgins v. Municipality of Anchorage, 810 P.2d 149, 154
(Alaska 1991) (Higgins II) (citing Village of Chefornak v. Hooper
Bay  Contsr. Co., 758 P.2d 1266, 1271 (Alaska 1988),  and  Allen,
558 P.2d at 500).

     29    Higgins II, 810 P.2d at 150.

     30     See id. at 151; see also Municipality of Anchorage v.
Higgins, 754 P.2d 745 (Alaska 1988) (Higgins I).

     31    Higgins II, 810 P.2d at 151-52.

     32    Id. at 150.

     33    Id.

     34    Id. at 153.

     35    Id. at 154.

     36    Id.

     37    See Mallonee, 502 P.2d at 439; Higgins II, 810 P.2d at
154.

     38     See, e.g.,  Musso v. Seiders, 98 F. Supp. 2d 197  (D.
Conn.   1999)  (granting  challenge  to  unauthorized  settlement
agreement  on  which  no  judgment had  yet  issued);  Saxton  v.
Splettstoezer,  557  P.2d 1126 (Alaska 1976) (denying  relief  on
direct  appeal  from  judgment  enforcing  authorized  settlement
agreement); Kimball v. First Natl Bank of Fairbanks, 455 P.2d 894
(Alaska  1969)  (affirming  the setting  aside  of  a  settlement
agreement  because the attorney did not have authority to  settle
the  claim);  Gray v. First Natl Bank, 57 N.E.2d 363 (Ill.  1944)
(vacating for trial court lack of personal jurisdiction); Leffler
v.  Bi-State Dev. Agency, 612 S.W.2d 835 (Mo. App. 1981) (denying
relief  on  direct  appeal  from  judgment  enforcing  authorized
settlement agreement).

     39     Toscano v. Commissioner of Internal Revenue, 441 F.2d
930 (9th Cir. 1971).

     40    See, e.g., Higbee v. Sentry Ins. Co., 253 F.3d 994 (7th
Cir.  2001)  (relief under unspecified provision  of  Rule  60(b)
based  on  lawyers lack of authority to settle); Fennell  v.  TLB
Kent  Co.,  865  F.2d  498  (2d Cir.  1989)  (relief  under  Rule
60(b)(1));  Pembroke State Bank v. Warnell, 471 S.E.2d  187,  190
(Ga.  1996) (granting relief on grounds unrelated to fraud); Marx
v. Fore, 51 Mo. 69 (1872) (relief under general equity principles
based on finding of ordinary fraud); Parrillo v. Chalk, 681  A.2d
916  (R.I.  1996) (relief based on lawyers lack of  authority  to
settle).

     41    See Mallonee, 502 P.2d at 439; Higgins II, 810 P.2d at
154.

     42    The superior court recognized that Katherines reliance
on  the  provisions  of her divorce decree was  unjustified,  and
Katherines  briefing  on appeal does not seriously  dispute  this
finding.   The  proposition  seems  universally  settled  that  a
divorce  decree  incorporating  an  agreement  between  divorcing
spouses  does  not  affect the rights of  third-party  creditors.
See, e.g., Hanson v. Hanson, 350 P.2d 859, 861 (Wash. 1960) (in a
divorce  action  the  court  cannot  adjudicate  the  rights   of
creditors who are not parties to the action); Community  Guardian
Bank v. Hamlin, 898 P.2d 1005, 1009 (Ariz. App. 1995) (the courts
allocation of community obligations does not affect the rights of
third  party  creditors); In re Marriage of Waker, 834  P.2d  522
(Or.  App.  1992)  (other shareholders in  corporation  of  which
husband  was shareholder were not parties to marriage dissolution
proceeding  and could not be bound by judgment to  guarantee  his
payments to wife); In re Marriage of Easterla, 613 P.2d 1100 (Or.
App.  1980) (corporations were not parties to the divorce action,
and  no  judgment or decree could be entered against  them);  see
generally  15A  Am.  Jur.  2d  Community  Property   108   (2005)
([g]enerally,  both  former  spouses remain  jointly  liable  for
community obligations after their divorce).

     43     In  relevant  part,  Idaho Rule  of  Civil  Procedure
55(a)(1)  states:  When  a  party against  whom  a  judgment  for
affirmative  relief  is sought has failed to plead  or  otherwise
defend as provided by these rules and that fact is made to appear
by affidavit or otherwise, the court shall order entry of default
against the party.

     44    Idaho Rule of Civil Procedure 5(a) says that no service
need  be made on parties in default for failure to appear.  Idaho
cases  confirm that no notice of an entry of default is  required
if  a  party  fails  to plead or otherwise defend,  as  Katherine
undisputedly  failed to do here.  See, e.g., Phillips  v.  Miles,
780  P.2d  593, 594-95 (Idaho 1989); Olson v. Kirkham,  720  P.2d
217,  220 (Idaho App. 1986).  Alaskas law accords with Idahos  on
this  point.   See, e.g., Snyder v. American Legion Spenard  Post
No.  28,  119  P.3d 996, 1001 (Alaska 2005); Alaska  R.  Civ.  P.
55(c)(1) (if [a] party fails to appear for trial . . . the  court
may  proceed  ex  parte upon any motion for  default  or  default
judgment).

     45    Mallonee, 502 P.2d at 438-39.

     46    Higgins II, 810 P.2d at 154.

     47    See Hazel-Atlas Glass Co., 322 U.S. at 244-45 (citation
omitted).

     48    Mallonee, 502 P.2d at 437.

     49    Id. at 439.

     50    In reaching this conclusion, the superior court relied
mainly  on the Ninth Circuits decision in Toscano v. Commissioner
of  Internal  Revenue,  441 F.2d 930 (9th  Cir.  1971).   But  as
already  indicated, see above, Toscano is inapposite: it involved
convincing  evidence  of an elaborate, ongoing,  and  intentional
scheme  to  avoid  taxes  by  falsely  claiming  a  marriage  and
fraudulently seeking a divorce from a party who had no notice  of
the fraudulent action.  Id. at 931.

     51    OLink, 632 P.2d at 230.

     52     Livingston,  572  P.2d  at  82  (holding  in  custody
modification  action  where  mother and  her  counsel  improperly
served the father by publication and failed to disclose that  the
child  was currently living outside the state with her father   a
fact  relevant both to the childs best interests and  the  courts
jurisdiction   that relief could be granted under  Rule  60(b)(6)
but  that the case involved wrong between the parties and did not
amount  to a fraud on the courts in large part because the father
had  independently learned of the pending custody action and  had
simply chosen not to appear in the modification proceedings).

     53    See id. at 83-85.

     54     Our decision makes it unnecessary to consider Murrays
alternative  claim that the superior courts ruling  violated  the
United States Constitutions Full Faith and Credit Clause.

     55    We emphasize that our ruling addresses only Katherines
challenge  to  the  1993 Idaho judgment.  Because  Katherine  has
disclaimed  any  attempt  to  challenge  the  underlying   Nevada
confession of judgment and has advanced no ground for challenging
the  Idaho  courts  renewal  of the 1993  judgment,  we  have  no
occasion to address these issues.

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