Judgment Debtor's Last Stand The Independent Equitable Action, 0122 COBJ, Vol. 51, No. 1 Pg. 22

PositionVol. 51, 1 [Page 22]

Judgment Debtor's Last Stand The Independent Equitable Action

No. Vol. 51, No. 1 [Page 22]

Colorado Lawyer

January, 2022



This article explains independent actions for relief from final judgment under Colorado Rule of Civil Procedure 60(b).

When the trial court enters a final judgment against the judgment debtor, die debtor has limited options. Typically, debtors may opt to suffer collections, appeal the judgment to the reviewing court, or file post-trial motions with the trial court. For post-trial motions, CRCP 60(b) empowers trial courts to relieve judgment debtors from a final judgment under limited circumstances. Generally, Rule 60(b) motions are subject to a 182-day deadline, so if a judgment debtor moves for relief beyond that deadline, the court lacks jurisdiction to grant relief.

But when all else fails, Rule 60(b) offers another often overlooked option; it provides that "[the] Rule does not limit a court's power to: (1) entertain an independent action to relieve a party from a judgment, order, or proceeding...." And this part of Rule 60 is not subject to the 182-day deadline.

The provision for an independent equitable action can (and has) caused substantial confusion among litigants, especially in the context of default judgments. This article delves into the origins of the independent equitable action, outlines current case law interpreting a party's right to institute such action, and offers practical considerations regarding the effect of this rarely interpreted Rule 60 provision.

The Rule 60(b) Independent Equitable Action

Rule 60(b) is the basis for the trial court's power to review and vacate a final judgment.[1] There are two potential avenues to relief from a prior judgment or order, by motion or by an independent action. A motion is most commonly used within the 182-day or "reasonable time" deadlines. If those deadlines lapse, a judgment debtor can bring an independent equitable action under limited circumstances. This independent action is "intended to be used as a last ditch remedy'"2 for a "direct attack on a prior judgment."3

An independent action is a "fresh and direct attack" permitted under Rule 60(b) but not necessarily subject to its standards or limitations.4 Accordingly, an independent action is a new civil action that may be commenced "in the same manner as any other civil action,"5 meaning judgment debtors can file them either in the trial court presiding over the underlying action or in a new trial court.6 Further, so long as venue and jurisdiction are proper in the new trial court, a judgment debtor may seek relief in a new venue.7

Rule 60(b)'s independent action clause is often referred to as the "savings clause."8 But even the "savings clause" has limitations; "an independent action 'should be available only to prevent a grave miscarriage of justice.'"9

Origins of the Action

Courts have long recognized various avenues by which judgment debtors could obtain relief from a prior judgment.10 "Throughout legal history, losing parties have sought procedural vehicles through which to bring complaints about the accuracy of judgments or the adequacy of the proceedings that led to those judgments."11 While early courts recognized various methods of obtaining relief from a prior judgment, the kinds of relief recognized at common law before enactment of the Federal Rules of Civil Procedure (FRCP) led to varied and inconsistent decisions.12 Accordingly, in 1937 "Federal Rule of Civil Procedure 60 was adopted in an attempt to unify post-judgment relief practice in the federal courts."13 It "largely replaced [the] patchwork [of remedial devices] with specific procedures and limits for granting relief from judgment."[14] By outlining specific procedures, this rule changed how courts approached remedial measures and simplified the process.

After much debate and several unsuccessful iterations of Rule 60, the Federal Rules Advisory Committee (FRAC) amended the rule in 1946.15 This revision helped resolve the problems that plagued the rule's first draft by specifically articulating the substantive remedies that remained available to judgment debtors.16 In addition, the revised rule allowed judgment debtors to plead both intrinsic and extrinsic fraud as justifications to vacate a judgment17 and included provisions allowing for relief from a judgment based on newly discovered evidence, a void judgment, or any other reason (a catch-all provision).18 Because many thought the six-month limitation on bringing motions w as too short, the FRAC also extended this limitation to one year, opening the door to more claims.19 Revised Rule 60 also specifically abolished the common law vehicles to obtain relief from a prior judgment, including "[w]rits coram notis, coram vobis, audita querela, and bills of review and bills in the nature of a bill of review."20 Lastly, the revision provided for independent actions and allowed the court to set aside judgments for fraud on the court, so "[e]ven after the adoption of modern Rule 60 ... the independent action at equity continues to provide an avenue for relief from judgments obtained by fraud."21

In 2007, the FRAC updated Rule 60 once more to its current version.22 This update largely consisted of organizational and stylistic changes, including the addition of subheadings,23 to make the rule more easily understandable, but it did not change the rule's substance.24 Colorado and several other states followed suit by adopting similar rules in their own civil procedure canons.

Evolution in Colorado

Early on, Colorado case law recognized the ancient remedies outlined above, including independent equitable actions to attack a judgment.25 In 1898, for example, the Colorado Court of Appeals in Smith v. Morrill reversed an order dismissing an independent equitable action to set aside a default judgment, based on failure to properly serve the judgment debtor.26 The Court determined that the judgment debtor could make this equitable request separately from the recognized grounds of mistake, inadvertence, surprise, or neglect under the code of procedure then in force.27 And in 1912, the Colorado Supreme Court in Kavanagh v. Hamilton recognized that a party could obtain relief from a prior judgment through a motion, answer, cross-complaint, or equitable action.28 The Colorado Supreme Court also eventually adopted CRCP 60, which was based on and largely had the same effects as FRCP 60. CRCP 60 was most recently updated in 2017 when the Colorado Civil Rules Committee extended the time limitation from six months to 182 days for bringing claims of mistake, inadvertence, surprise, excusable neglect, newly discovered evidence, or fraud. This change clarified the rule but did not change its substance.

Principle of Finality versus Interests of Justice

In allowing independent equitable actions to obtain relief from prior judgments, courts try to strike a balance between the principle of finality and the interests of justice.29 Rule 60(b) "defines when a court can redress substantive errors in a final judgment," and courts operate within their limitations to strike a balance between the interests of finality and justice,30 allowing independent actions for relief from a final judgment only in "extreme situations or extraordinary circumstances," which are discussed below.31

Finality is the primary limiting factor32 and is die idea that, once a case has been decided, the decision is final and should only be overturned in extraordinary circumstances.33 Otherwise, disputes would never end and issues could never truly be resolved.[34] As the court in Davidson v. McClellan put it, "[i]t is essential for practical reasons as well as for fundamental fairness, that there be a point at which litigation reaches a conclusion and that parties be permitted to rely on the outcome."35 In most cases, even if a prior decision was obviously unsound, reopening it is generally not permitted because it would violate die principle of finality,36 so independent actions are only permitted in extreme circumstances.37 Further, the principle of finality is more strictly enforced as time passes after a case has been decided.38

Independent actions for relief from a prior judgment inherently "allow departure from 'rigid adherence to the doctrine of res judicata,'"39 so independent actions are only permitted if there is a feasible and direct attack on die prior action.40 Accordingly, many courts have dismissed independent equitable actions under die finality principle based on res judicata and collateral estoppel.41 On the other hand, independent actions may not "be used to obtain further review of final orders in die earlier case."42 For example, in Mishkin v. Young, a tenant sued a landlord who had retained his security deposit.43 After die trial court found in favor of die tenant, the landlord challenged die judgment several times. When the trial court rebuffed tiiese challenges, die landlord initiated an independent action for relief from the initial judgment "'to correct die mistaken' rulings of the district court in the underlying action."44 Ultimately, die reviewing court determined that the independent action was barred under claim preclusion, because die debtor was using the new action simply for further review of the initial judgment.

However, although preserving finality is a valid concern, "it is also clear that under certain limited circumstances even the principle of finality must give way to overriding concerns for truth and equity."45 As the court in Matarese v. LeFevre stated, Rule 60(b) provides a "grand reservoir of equitable power to do justice in a particular case."46 Thus, courts have discretion to allow relief from a final judgment for public policy reasons. This broad grant to do justice also licenses creative lawyering on the side of the losing party[47] in bringing arguments based...

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