A circuit court has vacated a $3 million fraud judgment more than a year after the defendants defaulted where they alleged that the plaintiff — now deceased — committed fraud on the court to procure the judgment.
Despite their willful default, the defendants’ bankruptcy attorney offered a potential saving grace: Virginia allows a defendant to re-open a default judgment within two years by alleging that the plaintiff testified untruthfully to secure it.
The plaintiff, however, argued that it should have been filed as an independent action, and that it was untimely, barred by laches and facially defective.
Judge David A. Oblon of the Fairfax County Circuit Court disagreed.
“Because Virginia Code § 8.01-428(A)(i) extends a two-year statute of limitations for setting aside default judgments based on intrinsic fraud, Plaintiff’s claims that Defendants’ motions are untimely due to Rule 1:1 or laches are wrong,” the judge wrote. “Similarly, his argument that Defendants procedurally needed to file an independent action to challenge the default judgment as mandated under paragraph D of the statute is incorrect. The present case properly falls under paragraph A, which does not require an independent action.”
The opinion is Chung v. Kim, et al. (VLW 023-8-038).
Weon Kim of McClean represents the defendants.
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