Memoirist’s Claim to Be Holocaust Survivor = Fraud on the Court, Justifying Setting Aside Breach of Contract Verdict in Memoirist’s Favor

From last week’s Mt. Ivy Press v. Defonseca (Mass. Ct. App.), quite a story of a writer’s fraud and its legal effects:

At all material times during the prior trial and appeal, Defonseca held out her story as a true and authentic account of her childhood in Europe during World War II. Broadly sketched, she claimed that as a seven year old child in 1941 she witnessed the Nazis seize her parents. By her account, she fled and managed to avoid capture by the Nazis for more than four years, wandering alone through forests and villages across Europe. She encountered various hardships, including being trapped for a time within the besieged Warsaw Ghetto. Defonseca attributed her survival to her strong will and guile, as well as to the food and protection she received from a wolf pack.

During a speaking engagement in New York in 1994, Defonseca first met [Jane Daniel, the founder and sole employee of Mt. Ivy Press,] who offered to publish Defonseca’s autobiography. This offer took hold, and the parties thereafter reduced their agreement to writing.

Since Defonseca’s native language was French, Daniel engaged an experienced, professional writer, [Vera] Lee, a long-standing acquaintance who was fluent in French, to assist (as co-author) on an American edition of Defonseca’s memoir. Lee timely provided drafts, including one she believed was approximately eighty percent complete. However, Lee made explicitly clear to Daniel that many facts, including historical facts, would have to be checked. Daniel thereupon removed Lee from the project, falsely telling her that her work was inadequate and the book required rewriting. Daniel also threatened and intimidated Lee so that she would not communicate with Defonseca, and pressured Lee to sign agreements that reduced her share of the proceeds from the book. Litigation ensued, with Lee suing Daniel, Mt. Ivy, and Defonseca….

Defonseca and Lee brought a number of claims against Daniel and Mt. Ivy, including breach of contract and violation of G.L. c. 93A[, the Massachusetts unfair and deceptive business practices statute]. In essence, they alleged Daniel (personally and through Mt. Ivy) had wrongfully denied them certain royalties and other payments in breach of their respective agreements. Daniel and Mt. Ivy counterclaimed, alleging breach of contract, defamation, and trade disparagement. After a three-week trial, a jury awarded $7.5 million to Defonseca and $3.3 million to Lee.

Reserving the c. 93A portion of the case to herself for decision, the judge found that Daniel and Mt. Ivy had wilfully and knowingly engaged in conduct designed to deprive Defonseca and Lee of royalties and other compensation. In a detailed decision, and drawing from a comprehensive set of findings linked to the evidence at trial, the judge concluded that Daniel and Mt. Ivy had engaged in unfair and deceptive business practices in violation of c. 93A. The judge trebled the jury’s award and assessed attorney’s fees and costs….

[W]hile the first appeal was pending, Daniel came to learn of information she believed cast doubt on aspects of Defonseca’s memoir. Specifically, a bank record that had been produced posttrial showed Defonseca’s birth date, birth place, and mother’s maiden name, all of which she claimed in her book to have no knowledge of. With this newly discovered material, Daniel tried to access vital family records in Belgium, only to be frustrated by that country’s privacy laws. Search was made of ships’ passenger lists in our local archives, the Yad Vashem database of the names of more than three million Holocaust victims, and various genealogical Internet Web sites. Not until a forensic genealogist, Sharon Sergeant, became involved did the search for Defonseca’s background yield critical information. Sergeant, having noticed the many Catholic references in the French and United Kingdom editions of Defonseca’s memoir, undertook a search of Catholic baptismal records in Belgium, and discovered there was a maternity ward in a hospital in Etterbeek, the district of Brussels that had been identified on Defonseca’s bank record.

Ultimately, Defonseca’s true identity was uncovered. Piece by piece, with aid from Sergeant, Daniel was able to learn that Defonseca had been born Monica Ernestine Josephine De Wael on May 12, 1937, in Etterbeek, Belgium. Her family’s residence was in the Schaerbeek district of Brussels, and she was registered as a student in an elementary school located there for the fall term of 1943–the very same time period that she claimed to be in the midst of a journey across Nazi-controlled Europe. With this new information about Defonseca, especially her original surname “De Wael,” the Belgian press reported more proof of Defonseca’s fraud, which completely unraveled in or about late 2007 or the early part of 2008….

In April, 2008, Daniel and Mt. Ivy commenced an independent action, pursuant to rule 60(b), in the Superior Court against Defonseca and Lee, seeking to set aside the $33 million judgment. In relevant part, the complaint asserted two counts against Defonseca … and two parallel counts against Lee. The complaint alleged that the judgment was the product of a deliberate and cleverly concealed fraud, purposefully carried out by Defonseca with the aid of her counsel. Daniel and Mt. Ivy alleged that perjured testimony, false court pleadings and discovery responses, as well as fraudulent exhibits, all had a hand in misleading the jury and the court. Among other things, they pointed to the fact that Defonseca’s trial counsel stressed in closing argument that the authenticity of Defonseca’s book was not disputed:

“And what was [Defonseca] trying to defend herself about? Her life story. The tragedy has already been visited on Misha, that’s not in dispute. She lost her parents at 7 years old, and wandered through Europe unprotected for four years. That’s not in dispute. That happened to her.”

The complaint contained no allegations suggesting that Lee had any knowledge of the fraud, or that she had any reason to know that Defonseca’s story was not true.

The defendants moved to dismiss the complaint under rule 12(b)(6). Notably, Defonseca did not dispute Daniel’s allegations of fraud, or the related media reports discrediting Defonseca’s book and trial testimony. Nor did Defonseca dispute a February 28, 2008, Boston Globe article that reported Defonseca candidly “acknowledged” that “every essential element of her autobiography [was] false, that her trial testimony was perjured and that every document she filed with the [Superior] Court when acting as her own counsel, was intended to mislead the Court and the jury.” …

The plaintiffs have alleged an extraordinary fraud that touched every part of Defonseca’s case against them and resulted in a huge verdict. It is true, as the defendants point out, that the book’s authenticity was not the central issue at trial. Despite this, it is difficult to imagine that this information, had it been known to Daniel and Mt. Ivy, would not have provided a meritorious defense to at least some of the claims, especially those claims based on the contract. It is equally implausible to suggest that the information, if it had been presented to the jury, would not have affected the “substantial rights of the parties.”

The size of the award is also a circumstance to be considered. Defonseca obtained a judgment that, once trebled, exceeded $20 million. Much of that amount consisted of multiple damages under c. 93A. Multiple damages are awarded only for wilful, culpable conduct, that results in a “grievous violation of societal interests.” The jury and judge, of course, were unaware that the book was a hoax, rather than a heart-rending story of Holocaust survival.

We also consider Defonseca’s conduct as a pro se litigant. Although it is true that perjury, standing alone, generally does not support relief under rule 60(b)(6), Defonseca’s alleged conduct goes well beyond that. Defonseca’s entire case, and the manner in which she procured the judgment, was buttressed on what is now admitted to be a lie. The pleadings she filed were false and based on false information. The affidavits she submitted were premised on her phony life story. Her testimony at trial reiterated, and reinforced, her sympathetic but ultimately false tale.

We are satisfied that the allegations of the complaint, considered under the appropriate standard, are sufficient to state an independent action based on rule 60(b)(6)….

Rule 60(b) permits “an independent action … to set aside a judgment for fraud upon the court.” …

There are some falsehoods that are so emotionally inflammatory that they impede the jury’s ability impartially to evaluate facts and adjudicate a case. Falsely claiming to be a victim (and survivor) of the Holocaust is such a one, particularly where — as here — the claim is the foundation of a book that the publication, distribution, and marketing of were the subjects of the suit. Defonseca perpetrated this falsehood, and it lay at the center of the case….

We are satisfied that, accepting the allegations of the complaint as true and viewing Defonseca’s misconduct as a whole, which included not just one or two instances of false testimony, but an entire case buttressed by falsehoods, the plaintiffs have sufficiently stated a claim of fraud on the court….

The plaintiffs’ case against Lee stands in a much different posture. The complaint does not allege that Lee knew, or had reason to know that Defonseca’s memoir was fraudulent. The complaint’s silence in this regard is consistent with the trial judge’s conclusion that the allegations indicated Lee alerted Daniels to the fact that the book had not been fact-checked and that many historical facts needed to be verified. Moreover, the allegations indicate that Lee was removed from the project before its completion. There is also no allegation that Lee made any false statements in the course of the litigation, whether during discovery or trial…. The plaintiffs have not cited any authority, nor have we found any, for the proposition that a party may be stripped of a judgment where she herself is not alleged to have done anything wrong. Rule 60(b)(6) strikes a balance between “the competing needs for finality and flexibility to be certain that justice is done in light of all the facts.” Although Lee may have benefited from the sympathy of Defonseca’s supposed life story, this alone does not tip the scale in favor of abandoning our institutional interest in finality. The plaintiffs have not alleged that Lee has committed any fraud or misconduct, let alone the kind of extraordinary fraud that could justify setting aside an eight year old judgment under rule 60(b)(6).

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