Opinion
NOT TO BE PUBLISHED
ORIGINAL PROCEEDING; Petition for Writ of Error Coram Vobis. Super. Ct. No. 149121, Donald E. Shaver, Judge.
Crabtree, Schmidt, Zeff & Jacobs, Robert W. Crabtree; McCormick, Barstow, Sheppard, Wayte & Carruth LLP, Todd W. Baxter and Timothy J. Buchanan, for Petitioners.
No appearance for Respondent
Geiger, Coon & Keen LLP, John B. Rudquist, for Real Parties in Interest.
OPINION
Kane, J.
L. L. Loveless, Kenneth L. Cox and Westside Development petition for writ of error coram vobis to reopen the judgment of dissolution and accounting entered in Stanislaus County Superior Court case number 149121 so that the trial court may properly consider the effect of a concealed partnership asset on its accounting of the rights and liabilities of the parties in that case. The now divulged asset, a parcel of real property, was allegedly kept secret by one partner, Larry D. Melton, during the dissolution action. According to petitioners, the concealment of this significant asset constitutes extrinsic fraud warranting the issuance of the writ. We hold that a prima facie showing of extrinsic fraud has been made and we grant the petition.
In addition to the writ relief sought herein, petitioners filed a separate lawsuit in the Tuolumne County Superior Court, case number CV50626, seeking (as here) to reopen the dissolution judgment based on extrinsic fraud. The trial court sustained demurrers in that case without leave to amend based on its view that the plaintiffs (petitioners) lacked standing and because of prior action(s) pending on the same cause of action (i.e., the appeal in the dissolution action and the instant writ petition). The Tuolumne County case is also pending on appeal (case No. F048550). Petitioners have stipulated that if the instant writ of error coram vobis is granted, the appeal in the Tuolumne County case will be rendered moot and will be dismissed. Accordingly, in view of the outcome herein granting the writ, it is unnecessary to address the separate appeal in case Number F048550.
FACTS AND PROCEDURAL HISTORY
The Parties
Petitioners L. L. Loveless, Kenneth L. Cox and Westside Development, a general partnership, were the plaintiffs in the underlying action for partnership dissolution, accounting and other relief against Larry D. Melton, Donald Olmsted and M&O Enterprises, filed as Stanislaus Superior Court case number 149121 (referred to hereafter as the Dissolution Action). A judgment and final accounting in the Dissolution Action was entered by respondent Superior Court on October 7, 2003, from which an appeal is now pending (No. F044886). The judgment determined that the partnership, Westside Development, was dissolved, and settled all accounts as between the four partners, Loveless, Cox, Melton and Olmsted. Real parties in interest herein, Larry D. Melton, Donald L. Olmsted and M&O Enterprises, were the defendants in said Dissolution Action.
The Concealed Asset
As noted, the basis for the requested writ is petitioners’ claim that Melton concealed a partnership asset from the other partners and from the trial court, thereby preventing a true and complete accounting of rights and liabilities between the partners. The asset in question is a single parcel of real property, a narrow strip of land 100 feet wide and approximately 12.3 acres in total area, which was once a railroad right of way. It is identified by the parties as Assessor’s Parcel Number 062-050-07. We shall refer to it as the Railroad Parcel.
The Railroad Parcel was part of a larger, contiguous acreage (approximately 345 acres in all) that was owned by Westside Development for purposes of development (the Westside Property). After Westside Development ran into financial difficulty, the Westside Property was, in a series of transactions, first transferred to a corporate entity controlled by Melton to avoid foreclosure (although it was agreed the equitable or beneficial ownership of the Westside Property remained the same), and then sold to a third party. Although petitioners thought that all of the Westside Property was conveyed to the third party in the sale, in reality the legal description in the deed to the purchaser omitted the Railroad Parcel. During the Dissolution Action, Melton knew that title to the Railroad Parcel was still held by his corporate entity, but did not bring it to the attention of the trial court or parties therein. The proceeds of the sale were distributed by the trial court in the Dissolution Action.
Chronology of Events Relating to Railroad Parcel
We now set forth a more detailed chronology of the events relating to the Railroad Parcel.
In October of 1991, petitioners Loveless and Cox purchased the Westside Property, consisting of approximately 345 acres of land in Tuolumne County, California, acquiring title by several grant deeds. One of the grant deeds transferred to petitioners Loveless and Cox the Railroad Parcel.
In July of 1993, petitioners Loveless and Cox formed a general partnership with real parties Melton and Olmsted, which became known as Westside Development. As part of the partnership agreement, petitioners Loveless and Cox conveyed all of the real estate known as the Westside Property to the partnership entity, Westside Development. The conveyance included the Railroad Parcel, the legal description of which is set forth in “Exhibit B” of the grant deed.
On October 30, 1996, in order to forestall foreclosure and gain more time to negotiate a sale, Westside Development transferred all the Westside Property, including the Railroad Parcel, to an entity known as M&O Enterprises, Inc., a Nevada corporation (M&O Nevada), wholly owned and controlled by real party Melton. The total acreage at the time of transfer to M&O Nevada was only 318 acres, because 27 acres had been previously conveyed to the school district.
On February 7, 1997, the same grant deed was re-recorded at Book 1434, Page 0617, Tuolumne County Official Records, to cure a potential defect.
On October 29, 1996, one day prior to the transfer of the Westside Property to M&O Nevada, the partners of Westside Development (Loveless, Cox, Melton and Olmsted) privately agreed in writing that the real property (and the proceeds of any sale thereof) would continue to be beneficially owned by the Westside Development partners. Specifically, the October 29, 1996 private agreement stated that “whatever is owned by Westside partners in the partnership, will still be owned by the partners in [M&O Nevada].” The “still be owned” wording is problematic because it is fundamental that “[p]roperty acquired by a partnership is property of the partnership and not of the partners individually.” (Corp. Code, § 16203.) A reasonable construction of this language is that the partners intended the equitable interest of the partnership would continue to exist in the real property, notwithstanding the change in legal title, thereby protecting their interests as partners in the partnership. That is, whatever interest the partnership and partners had before, it would continue. The trial court appears to have adopted this approach to the extent that it distributed the proceeds of the sale as though it were a partnership asset.
The trial court also noted the October 29, 1996 agreement was “part of the winding up of the partnership business” which began when the partnership was in bankruptcy. Notwithstanding these pronouncements, the trial court did not treat the sale proceeds as belonging to the individual partners, but rather as a receipt of the partnership itself.
After the transfer to M&O Nevada, a complex series of transactions were undertaken to prevent an imminent foreclosure in December of 1996, and to allow additional time for M&O Nevada to complete a sale of the Westside Property to a third party, Cherry Valley Development, LLC (hereafter Cherry Valley). An individual investor by the name of Jerry Ivy, acting on behalf of the Jerry Ivy Separate Property Revocable Trust (Ivy), agreed to purchase the promissory note from the foreclosing party, West Coast Real Estate Corporation (hereafter West Coast) and to cancel the foreclosure action as a means of providing interim financing, in return for which Ivy received a deed in lieu of foreclosure. At close of escrow, Ivy was to be repaid and compensated for his role and he, in turn, would transfer title to the purchaser, Cherry Valley. Once other secured loans and escrow expenses were paid, M&O Nevada would receive the balance of the proceeds of the sale. On February 5, 1997, an Agreement for Purchase and Sale of Real Property (Purchase Agreement) was executed by Cherry Valley, M&O Nevada, Ivy, Loveless and Cox, memorializing the terms of the sale.
The February 5, 1997 Purchase Agreement states that the real property which is the subject of the agreement “consists of approximately three hundred eighteen (318) acres located in the County of Tuolumne, State of California and is more particularly described by assessor’s parcel numbers in … Exhibit ‘A.’” However, the referenced Exhibit “A” is missing from the agreement. The recitals refer to the 345 acres originally owned by M&O Nevada’s predecessors, which was reduced by 27 acres in a previous conveyance to a school district. It seems from these several acreage descriptions that the parties likely intended to transfer the entire Westside Property (as reduced by the transfer of 27 acres to the school district), including the Railroad Parcel. However, the deed in lieu of foreclosure from M&O Nevada to Ivy did not include the Railroad Parcel. Not only was the Railroad Parcel not included in the legal description of the property, the Assessor’s Parcel Number for the Railroad Parcel was not listed on the front of the deed where the other parcel numbers were specifically listed. The same omission was apparently repeated in the conveyance from Ivy to Cherry Valley, thus Cherry Valley never received title to the Railroad Parcel. Escrow closed in June of 1997.
According to real party Melton, the error is possibly traceable to a 1991 deed of trust previously given to West Coast, which also omitted the Railroad Parcel.
We do not have a copy of the deed from Ivy to Cherry Valley before us, but it is clear that Ivy could only convey the title he received.
On June 7, 2001, Cherry Valley filed for Chapter 11 bankruptcy protection, which was converted to a Chapter 7 case and later closed.
Upon completion of the sale to Cherry Valley, petitioners commenced the Dissolution Action in respondent Superior Court, case number 149121, to dissolve Westside Development, obtain an accounting of its assets and settle accounts of the partners. The Dissolution Action was tried by the court in 1999 and a final statement of decision was filed in January of 2000. The judgment and final accounting was entered on October 7, 2003.
According to the instant petition, “[a]t the time they filed this [Dissolution Action], and throughout the action and after it went to judgment, Petitioners believed that M&O Nevada had transferred all property previously transferred to M&O Nevada by Westside Development and that M&O Nevada had accounted for the proceeds of those sales by including those proceeds in the assets of Westside Development.” The petition further alleges, “Unknown to Petitioners, M&O Nevada had somehow retained title to [the Railroad Parcel] and had never transferred it to Cherry Valley … [and] [d]uring the entire duration of the [Dissolution Action], M&O Nevada held title to [the Railroad Parcel].…” Finally, it is asserted that “[h]ad the respondent Court been aware of the existence of [the Railroad Parcel] and [the] fact that it was still owned of record by M&O Nevada and beneficially owned by Westside Development, the Court would have taken it into consideration and have adjusted the partnership accounts among the partners in a materially different fashion.”
In the opposition to this petition, real party Melton states in his declaration that he did not realize that M&O Nevada retained title to the Railroad Parcel until “years” following the 1999 trial in this case. He admittedly received the annual property tax bills for the Railroad Parcel year after year, but did not pay careful attention to them because he received many property tax statements and the amount due on the Railroad Parcel was insignificant. After he discovered that M&O Nevada held record title to the Railroad Parcel, he decided in the spring of 2003 to transfer title to another entity owned and controlled by him, Olmsted Electric Co, Inc. He explains his actions as follows:
“[W]hen I became aware of the omission of [the Railroad Parcel] and that M & O Nevada still held record title, I was somewhat at a loss to know what to do with it. As noted previously, [Cherry Valley] had been the subject of a Chapter 7 bankruptcy that was then closed. The prospect of the legal fees and costs of attempting to reopen the [Cherry Valley] bankruptcy proceedings for a property of so little value seemed to be purposeless, since given the nature of the property the Chapter 7 trustee would have in all likelihood either opposed reopening the bankruptcy proceedings, or if reopened, would have abandoned [the Railroad Parcel]. Ultimately, the transfer of [the Railroad Parcel] from M & O Nevada to Olmsted Electric Co., Inc., a California corporation, was to close out M & O Nevada’s business ties with California.”
We note the grant deed in which the Railroad Parcel was transferred by M&O Nevada to Olmsted Electric Co., Inc. was executed by Melton on April 30, 2003. This was over five months prior to the trial court’s entry of judgment in the Dissolution Action on October 7, 2003. Clearly, Melton could have brought the asset to the trial court’s (or the petitioners’) attention prior to judgment, but intentionally chose not to do so.
On September 24, 2004, petitioners filed the instant petition alleging extrinsic fraud based on Melton’s concealment of the Railroad Parcel.
In early 2005, after the petition was served, Melton caused the Railroad Parcel to be deeded from Olmsted Electric Co., Inc. to the bankruptcy trustee in the Cherry Valley bankruptcy. Melton claimed the omission of the Railroad Parcel from the sale by M&O Nevada to Cherry Valley was a mistake. When the trustee reopened the bankruptcy case in order to investigate the matter further, petitioners herein filed a complaint in the bankruptcy proceeding to determine that Westside Development had proper title and right to the subject parcel. Petitioners alleged in the bankruptcy court that since the legal description of the Railroad Parcel was omitted from the grant deed, Melton and M&O Nevada intentionally negotiated the deal that way, even though petitioners assumed that all of the property had been part of the sale. After investigating the petitioners’ claim, the trustee apparently wished to avoid the expense of further litigation, and in exchange for a modest sum in settlement ($23,400), deeded the real property back to Westside Development. Thus, title to the Railroad Parcel is now held by Westside Development.
United States Bankruptcy Court, Northern District of California, case Number 01-31569, In re Cherry Valley Development, Debtor.
Petitioners filed a supplemental petition for writ of error coram vobis. The supplemental petition included the facts relating to the bankruptcy proceedings and Westside Development’s acquisition of title to the Railroad Parcel, including several new exhibits. A supplemental opposition and reply were thereafter filed. Aside from various accusations relating to the excursion into bankruptcy court to recover the asset, the substance of the petition and real parties’ opposition remains the same.
To summarize, petitioners contend the judgment should be reopened based on extrinsic fraud so that the trial court may consider the fraudulently concealed asset in its accounting of partnership property and in its settling of the partners’ rights and liabilities as to each other. In their opposition, real parties contend the petition should be denied for several reasons, including (a) the proffered new evidence will not make probable a different result in the trial court; (b) the proffered new evidence was not presented to the trial court for reasons other than the fault or negligence of petitioners; and (c) petitioners have failed to show extrinsic fraud that prevented them from having a meaningful hearing on the issue in question. We now turn to the merits.
DISCUSSION
I. Requirements for Granting Writ of Error Coram Vobis
“Where the evidence of extrinsic fraud is discovered during the pendency of an appeal, an appellate court can issue a writ of error coram vobis commanding the trial court to reconsider its decision in light of the newly discovered evidence.” (Betz v. Pankow (1993) 16 Cal.App.4th 931, 941.) “‘In effect, the writ remands the case to the trial court for the purpose of reopening the judgment … to consider the new evidence. [Citation.]’ [Citations.]” (In re Rachel M. (2003) 113 Cal.App.4th 1289, 1296.)
The writ of error coram vobis is equivalent to the writ of error coram nobis, except that it is addressed to an appellate court rather than to the trial court that rendered the judgment. (In re Derek W. (1999) 73 Cal.App.4th 828, 831, fn. 3.)
Such relief is extraordinary in nature because courts are reluctant, in light of the need to preserve the finality of judgments and judicial economy, to reopen otherwise final judgments merely because new evidence is discovered. (Los Angeles Airways, Inc. v. Hughes Tool Co. (1979) 95 Cal.App.3d 1, 6-7.) Accordingly, as summarized in In re Rachel M., supra, 113 Cal.App.4th at page 1296, a writ of error coram vobis will be issued only if the following requirements are satisfied:
“1. No other remedy, such as a motion for new trial or for reconsideration in the trial court, is available to consider the newly discovered evidence [citation];
“2. The proffered new evidence will either compel or make probable a different result in the trial court [citation];
“3. The proffered new evidence was not presented to the trial court for reasons other than the fault or negligence of the petitioner [citation] and was unknown to the petitioner at any time substantially earlier than filing the petition for the writ [citation];
“4. The proffered new evidence is not presented on an issue adjudicated in the trial court because factual issues that have been adjudicated cannot be reopened except on motion for new trial or for reconsideration [citation]; and
“5. The proffered new evidence was unavailable to the petitioner because of extrinsic fraud that prevented the petitioner from having a meaningful hearing on the issue in question [citations].”
II. Merits of Petition for Writ
We now consider whether petitioners have satisfied the above requirements for the granting of a writ of error coram vobis.
A. No Other Adequate Remedy to Redress the Extrinsic Fraud
The first requirement is that there is no other remedy available for consideration of the new evidence, such as motion for new trial or for reconsideration. Here, petitioners assert that the concealment of property was not discovered by them until June of 2004, which was long after the time for bringing a motion for new trial or for reconsideration. (See Code Civ. Proc., §§ 660, 1008.) These remedies are clearly unavailable.
Although an independent action for extrinsic fraud has been filed by petitioners as a separate basis for potentially reopening the judgment in the Dissolution Action, we do not believe that a second lawsuit presents an adequate remedy under the circumstances. The question of how to equitably allocate the recently discovered partnership asset should, if possible, be resolved in the Dissolution Action, where the trial court is already familiar with the partnership, the partners, and related property issues, rather than litigated in a separate lawsuit. Remand of these issues to the Dissolution Action is not only in the interest of judicial economy, but also facilitates the goal of a complete and equitable adjustment of all accounts, because the same trial court would have the opportunity to weigh and consider all of the relevant evidence, including the proffered new evidence of the concealed asset, prior to rendering a final and complete accounting of the partners’ accounts in a single judgment. The trial court in the Dissolution Action is clearly in the best position to evaluate the effect of the proffered new evidence on the accounting between the partners. For all these reasons, the mere fact that petitioners may potentially pursue a separate lawsuit as an alternative vehicle for reopening the judgment based on extrinsic fraud does not vitiate the necessity for granting the writ of error coram vobis in this case.
See footnote 1, ante.
We also believe that such result is in keeping with the scope of a dissolution and accounting action, which is intended to comprehensively resolve all issues of partnership property and render an accounting between the partners (see Corp. Code, § 16807).
Moreover, concurrent with our grant of the writ petition herein, we have issued a separate opinion reversing significant portions of the judgment in the appeal of the Dissolution Action. Thus, the judgment in that case is already “reopened” in certain material respects and remanded to the trial court. Under such circumstances, it is appropriate to also remand the issues relating to the concealed asset back to the same trial court, rather than require petitioners to pursue a duplicative, parallel lawsuit to address such issues. On balance, we conclude that the first requirement for issuance of the writ has been satisfied.
B. A Different Result Probable in the Trial Court
The second requirement is that the proffered new evidence will make probable a different result in the trial court. One way to ascertain whether the concealed asset would probably compel a different result is a consideration of its nature and potential value. In the present case, we have no difficulty in concluding, for purposes of the instant petition, that a 12.3 acre parcel of real property in an area where future development has been proposed is a significant asset that will likely make a difference in the trial court’s accounting.
We recognize that the parties differ considerably in their assertions of the Railroad Parcel’s value. According to petitioners, the Railroad Parcel is worth anywhere from $200,000 and $600,000 because “it is essential to the orderly development of the other land formerly owned by Westside Development.” In opposition, real party Melton argues the Railroad Parcel is only of modest value, citing the fact that the bankruptcy trustee was willing to settle the claim for a mere $23,400. Petitioners’ reply asserts that a Tuolumne County condemnation action estimated a value of $.0.25 per square foot, which multiplied by the square footage involved would amount to $133,947.25, not including the scrap value of the railroad ties and rails, which petitioners estimate at $150,000. On this question of the asset’s precise valuation, we will allow the matter to be resolved by proof submitted in the trial court on remand. For purposes of this petition, we merely conclude that a 12.3 acre parcel of real property is not likely to be insignificant in the parties’ final accounting, but will make a material difference therein.
No expert appraisal of market value was submitted. Nevertheless, even assuming the extreme low end of the spectrum is correct -- i.e., the amount paid by the bankruptcy trustee of $23,400 -- that sum is not insignificant. By way of comparison, it is about one-third of the amount that the judgment awarded Melton as against L. L. Loveless. Of course, to the extent the 12.3 acre parcel is shown to be of greater value at trial, the probable difference in the adjusted accounting would be magnified.
In a separate argument regarding this element, real parties contend that Westside Development received all that it was entitled to from the sale of the Westside Property -- namely the proceeds of the sale – therefore, Westside Development (and its partners) had no valid claim to the Railroad Parcel and were not damaged in any way by Melton’s failure to notify them or the trial court of this asset’s existence.
Although plausible when viewed in a vacuum, the argument falls short when all the facts and their implications are considered in light of Melton’s fiduciary relationship to the partnership. “Partnership is a fiduciary relationship, and partners are held to the standards and duties of a trustee in their dealings with each other.” (Everest Investors 8 v. McNeil Partners (2003) 114 Cal.App.4th 411, 424.) “In proceedings connected with the conduct of a partnership, partners are bound to act in the highest good faith to their copartners and may not obtain any advantage over them in the partnership affairs by the slightest misrepresentation, concealment, threat or adverse pressure of any kind.” (Ibid.) A partners fiduciary duties include: “(1) To account to the partnership and hold as trustee for it any property, profit, or benefit derived by the partner in the conduct and winding up of the partnership business or derived from a use by the partner of partnership property or information, including the appropriation of a partnership opportunity[, and] [¶] (2) To refrain from dealing with the partnership in the conduct or winding up of the partnership business as or on behalf of a party having an interest adverse to the partnership.” (Corp. Code, § 16404, subd. (b)(1) and (2).)
The fact that the Railroad Parcel was not conveyed to Cherry Valley, but title remained in M&O Nevada, was information material to Westside Development’s interests and to the accounting and dissolution for at least two reasons. First, as a consequence of the new evidence, Westside Development would have a potential claim of right or title to the Railroad Parcel based on the October 29, 1996 private agreement. Second, Cherry Valley would have a potential claim based on failure to convey the Railroad Parcel under the Purchase Agreement, including a potential claim against Westside Development on the ground that M&O Nevada and Melton were acting as agents of said partnership in regard to the sale. In light of these considerations, full disclosure to the partnership was required of Melton, and when he concealed the asset’s existence and secretly conveyed it to another wholly-owned corporation, he arguably violated his duty of loyalty to the partnership. On the record before us, it appears that a breach of duty of disclosure kept the trial court from considering the partnership’s claims concerning the Railroad Parcel. We conclude that the mere fact Westside Development ultimately received “proceeds” of the sale did not absolve Melton of his duty to disclose the Railroad Parcel in the partnership’s (then) pending Dissolution Action.
After Melton’s conduct was exposed in the instant petition, he caused the Railroad Parcel to be deeded to the Cherry Valley bankruptcy trustee. Petitioners at that time asserted their claim in the bankruptcy court that the Railroad Parcel was not part of the sale to Cherry Valley, and/or was intentionally left out of the Purchase Agreement by Melton, even though petitioners had assumed that all the property was being sold to Cherry Valley. The bankruptcy trustee investigated the matter further and chose to settle with petitioners. In the final analysis, the critical facts remain the same: An asset which the partnership had a viable claim to, or interest in, was discovered by Melton several months prior to entry of judgment in the Dissolution Action, but he concealed it from the trial court and the other partners. Now that the asset has been recovered, it is appropriate on remand for the trial court to reconsider the accounting between the partners and allocate the asset therein.
We conclude that the second requirement for issuance of the writ -- i.e., a different result would likely be obtained in the trial court -- has been met.
C. Failure to Present Proffered Evidence Was Not Due to Negligence of Petitioners
The third requirement for issuance of the writ is that the failure to present the newly discovered evidence is not due to the negligence of the petitioners. The scope of the issues raised by the parties and presented to the trial court did not include the question of whether all of the former Westside Property was conveyed in the sale to Cherry Valley. From petitioners’ standpoint, the transfer of all the real property was an historical “given” in the dissolution and accounting. Although it is true that one of the deeds submitted in evidence in the trial court, i.e., the deed in lieu of foreclosure given to Ivy, omitted the legal description of the Railroad Parcel, there is no reason to conclude that petitioners should have been apprised of that fact in the course of the proceedings in the Dissolution Action. This element has been satisfied.
D. Railroad Parcel or Claims Thereto Were Never Adjudicated
The fourth requirement is that “[t]he proffered new evidence is not presented on an issue adjudicated in the trial court because factual issues that have been adjudicated cannot be reopened except on motion for new trial or for reconsideration .…” (In re Rachel M., supra, 113 Cal.App.4th at p. 1296.) Here, the Railroad Parcel was never considered or adjudicated in any claim or issue in the trial court. We conclude that the fourth requirement is satisfied regarding the Railroad Parcel as an asset.
Further, we agree with petitioners that the trial court may also reconsider its decision to deny punitive damages based on the new evidence of Melton’s concealment of the Railroad Parcel’s existence, in light of the fiduciary character of the relationship involved. As summarized by our Supreme Court in Jorgensen v. Jorgensen (1948) 32 Cal.2d 13, the policy that a party should be permitted to seek relief from a judgment entered in a proceeding “in which he was deprived of a fair opportunity fully to present his case” is applicable “when a party’s adversary, in violation of a duty arising from a trust or confidential relation, has concealed from him facts essential to the protection of his rights, even though such facts concerned issues involved in the case in which the judgment was entered.” (Id. at p. 19.)
We conclude the fourth requirement for coram vobis relief is satisfied regarding the evidence of the Railroad Parcel and its concealment by Melton. The trial court may consider this new evidence in connection with its equitable accounting between the partners, as well as in connection with the punitive damage claim.
E. The Proffered New Evidence Was Unavailable to Petitioners Because of Extrinsic Fraud
The final requirement for coram vobis relief is that concealment of material evidence constituted extrinsic fraud. “‘Extrinsic fraud usually arises when a party is denied a fair adversary hearing because he has been “deliberately kept in ignorance of the action or proceeding, or in some other way fraudulently prevented from presenting his claim or defense.”’” (In re Rachel M., supra, 113 Cal.App.4th at p. 1297, quoting Kulchar v. Kulchar (1969) 1 Cal.3d 467, 471; see also 8 Witkin, Cal. Procedure (4th ed. 1997) Attack on Judgment in Trial Court, § 223, p. 727.) The common element in cases involving extrinsic fraud is that “‘the unsuccessful party has been prevented from exhibiting fully his case, by fraud or deception practiced on him by his opponent .…’” (Ibid.)
On the other hand, intrinsic fraud, which is not a valid ground for setting aside a judgment, occurs if a party had the opportunity to present his case and to protect himself from any mistake or fraud of his adversary, but unreasonably neglected to do so. (In re Marriage of Stevenot (1984) 154 Cal.App.3d 1051, 1069.) “If the aggrieved party had a reasonable opportunity to appear and litigate his claim or defense, fraud occurring in the course of the proceeding is not a ground for equitable relief. The theory is that these matters will ordinarily be exposed during the trial by diligence of the party and his counsel, and that the occasional unfortunate results of undiscovered perjury or other intrinsic fraud must be endured in the interest of stability of final judgments.” (8 Witkin, Cal. Procedure (4th ed. 1997) Attack on Judgment in Trial Court, § 242, p. 757.)
Where a fiduciary fraudulently conceals material evidence from a judicial proceeding, the fraud is considered to be extrinsic. (Jorgensen v. Jorgensen, supra, 32 Cal.2d at pp. 19-20; Simonton v. Los Angeles T. & S. Bank (1923) 192 Cal. 651, 655-656; Lazzarone v. Bank of America (1986) 181 Cal.App.3d 581, 596-597; In re Marriage of Stevenot, supra, 154 Cal.App.3d at p. 1069 [concealment of community property asset].) As explained in Lazzarone v. Bank of America, supra, at page 597: “This variety of extrinsic fraud recognizes that, even if a potential objector is not kept away from the courthouse, the objector cannot be expected to object to matters not known because of concealment of information by a fiduciary.” (See also Stenderup v. Broadway State Bank (1933) 219 Cal. 593, 596-597 [the defendant bank withheld information preventing the plaintiff from showing fraud in accounting]; Scott v. Dilks (1941) 47 Cal.App.2d 207, 209-210 [in accounting action, partner with exclusive access to financial data materially concealed information leading to unjust consent judgment]; and 8 Witkin, Cal. Procedure (4th ed. 1997) Attack on Judgment in Trial Court, § 227, pp. 732-733 [compiling cases finding extrinsic fraud where a party’s claim or defense was concealed from him].)
The policies relating to the reason for granting relief in cases of concealment of material facts by a fiduciary are explained at length in Jorgensen v. Jorgensen, supra, 32 Cal.2d 13, as follows:
“The terms ‘intrisic’ and ‘extrinsic’ fraud or mistake are generally accepted as appropriate to describe the two different categories of cases to which these policies of the law apply [citation]. They do not constitute, however, a simple and infallible formula to determine whether in a given case the facts surrounding the fraud or mistake warrant equitable relief from a judgment. [Citations.] It is necessary to examine the facts in the light of the policy that a party who failed to assemble all his evidence at the trial should not be privileged to relitigate a case, as well as the policy permitting a party to seek relief from a judgment entered in a proceeding in which he was deprived of a fair opportunity fully to present his case. [¶] The latter policy applies when a party’s adversary, in violation of a duty arising from a trust or confidential relation, has concealed from him facts essential to the protection of his rights, even though such facts concerned issues involved in the case in which the judgment was entered. ‘The failure to perform the duty to speak or make disclosures which rests upon one because of a trust or confidential relation is obviously a fraud, for which equity may relieve from a judgment thereby obtained ….’ [Citations.]” (Id. at p. 19.)
The extrinsic fraud analysis is the same whether the proceeding is a writ of error coram vobis or an independent action to set aside the judgment. (See Betz v. Pankow (1993) 16 Cal.App.4th 931, 940-941.)
Here, in view of Melton’s fiduciary duty as a partner to disclose the existence of the Railroad Parcel (as discussed ante), we believe his concealment of that asset, which was material to the dissolution proceedings, amounted to extrinsic fraud that prevented petitioners and the trial court from considering Westside Development’s claim or right to said real property and from including said asset in the accounting rendered among and between the partners. Under these facts, we conclude there has been a sufficient showing of extrinsic fraud to justify granting the petition for writ of error coram vobis.
DISPOSITION
The petition for writ of error coram vobis is granted. Accordingly, the judgment in the Dissolution Action is reopened and the matter is remanded to the trial court for reconsideration of its accounting in light of the proffered new evidence of the concealed partnership asset (i.e., the Railroad Parcel). Evidence regarding the Railroad Parcel and its value may be presented to the trial court, together with any relevant evidence concerning the alleged concealment of the asset by Melton. These matters may be fully considered by the trial court in rendering a new accounting between the partners based upon all the facts and equities of the case, and for the purpose of reconsidering the punitive damage claim. We emphasize that although we have granted relief based on a prima facie showing of extrinsic fraud, on remand we do not bind the trial court’s discretion or require any particular outcome or finding of fact.
In conjunction therewith, the trial court will also address those matters which have been remanded in our opinion in the appeal from the Dissolution Action (case No. F044886), which opinion we have filed concurrently herewith.
WE CONCUR: Levy, Acting P.J., Hill, J.