Mt. Ivy Press, L.P. v. Defonseca

Misha Defonseca (defendant) claimed that she escaped the Nazis as a seven-year-old and wandered alone across Europe, aided at times by wolves. Jane Daniel and her company Mt. Ivy Press, L.P. (collectively, Mt. Ivy) (plaintiffs) agreed to publish Defonseca’s memoir. Defonseca represented in the contract that all factual statements were true. Daniel engaged Vera Lee (defendant) as co-author. Lee provided drafts but warned Daniel many facts needed verification. Daniel took Lee off the project and pressured her into accepting a reduced share of proceeds. American and French editions were published. Defonseca and Lee sued Mt. Ivy, claiming they were denied royalties and other payments. Mt. Ivy counterclaimed, alleging breach of contract and other claims. At trial, Defonseca proceeded partially pro se. The jury awarded Defonseca $7.5 million and Lee $3.3 million. The court trebled the award based on Mt. Ivy’s unfair and deceptive practices. Mt. Ivy appealed. During the appeal’s pendency, Daniel discovered that Defonseca’s story had been fabricated. Mt. Ivy brought an independent action for relief from the judgment, alleging the judgment was obtained through false pleadings, affidavits, and testimony. It was not alleged that Lee knew about Defonseca’s fraud. The court granted Defonseca and Lee’s dismissal motion, holding that (1) the action was time-barred, (2) no extraordinary circumstances justified relief, and (3) the allegations did not state a claim for fraud on the court. Mt. Ivy appealed.