United States District Court, Southern District of New York
March 27, 2002
HOLLY MCMUNN, PLAINTIFF,
MEMORIAL SLOAN-KETTERING CANCER CENTER, DEFENDANT.
The opinion of the court was delivered by: Buchwald, District Judge.
MEMORANDUM AND ORDER
Plaintiff Holly McMunn brings this action against defendant
Memorial Sloan-Kettering Cancer Center ("Memorial") alleging
disability discrimination in violation of, inter alia, the
Americans with Disabilities Act ("ADA"). We have previously
denied a motion by Memorial for summary judgment. See McMunn v.
Memorial Sloan-Kettering Cancer Ctr., 2000 WL 1341398, at *4
(S.D.N.Y. Sept. 15, 2000) (whether Ms. McMunn is perceived to be
disabled within meaning of ADA must be determined by a jury).
Memorial now moves to dismiss the Complaint and for an award of
monetary sanctions for alleged misconduct by Ms. McMunn. For the
reasons that follow, we dismiss this action with prejudice and
award a $20,000 monetary sanction against Ms. McMunn.
Ms. McMunn brought this employment discrimination suit in
August of 1997 alleging that she was terminated by her superior,
Dr. Thomas Fahey, Senior Vice President for Clinical Program
Development, and a breast cancer specialist. She claims that,
during the six months that she worked for Dr. Fahey, she was an
"exemplary" employee and that Dr. Fahey had "frequently praised
[her] work performance," but that, when Dr. Fahey read her
medical chart on September 9, 1994, thereby learning that she
had breast cancer, he abruptly fired her. Compl. ¶¶ 1516. Ms.
McMunn alleges that Dr. Fahey
fired her "because she had breast cancer, had a record of breast
cancer, and because of [his] presumptions and fears about her
disability and perceived disability." Id. ¶ 28. Memorial
defends her termination on the ground that she was fired for a
legitimate, non-discriminatory reason, namely, that she had been
absent from work an unreasonable number of days in the few
months during which she worked for Dr. Fahey.
Memorial moves for dismissal of Ms. McMunn's lawsuit and
monetary sanctions pursuant to Federal Rule of Civil Procedure
37 and the inherent power of this Court to "fashion an
appropriate sanction for conduct which abuses the judicial
process." Chambers v. NASCO, Inc., 501 U.S. 32, 44-45, 111
S.Ct. 2123, 115 L.Ed.2d 27 (1991). Rule 37, however, only
applies to instances where a party (or certain other actors)
"fails to obey an order to provide or permit discovery."
Fed.R.Civ.P. 37(b)(2). While some of Ms. McMunn's misconduct
would clearly qualify for sanctions under this Rule, much of it
would not, as her behavior goes well beyond distinct violations
of our discovery orders.*fn2 Accordingly, we consider
Memorial's motion in the context of our broader inherent power,
because such power "extends to a full range of litigation
abuses," including fraud upon the court. Chambers, 501 U.S. at
46, 111 S.Ct. 2123; see also Skywark v. Isaacson, 1999 WL
1489038, at *14 n. 27 (S.D.N.Y. Oct. 14, 1999), aff'd 2000 WL
145465 (S.D.N.Y. Feb. 9, 2000).
We proceed herein as follows: We will discuss the concept of
"fraud upon the court," then our conclusion that the behavior at
issue here rises to that level. Next, after setting forth the
various sanctions available, we will explain our determination
that both dismissal and a monetary sanction are appropriate in
this case. Initially, however, we set out the due process
safeguards we afforded Ms. McMunn.*fn3
I. Due Process
Dismissal with prejudice is "a particularly severe sanction,"
Chambers, 501 U.S. at 45, 111 S.Ct. 2123, even for a fraud
upon the court, and a decision to impose such a sanction must be
"made with restraint and discretion." Schlaifer Nance & Co.,
Inc. v. Estate of Warhol 194 F.3d 323, 334 (2d Cir. 1999).
Accordingly, once Memorial requested permission to make the
instant motion, see Letter from Edward A. Brill dated July 10,
2001 ("7/10/01 Ltr."),*fn4 we made every effort to ensure
that Ms. McMunn would receive the process she was due. See
Chambers, 501 U.S.
at 50, 111 S.Ct. 2123 (in exercising its inherent powers, a
court must "comply with the mandates of due process"). Due
process, in the context of sanctioning an attorney or a party,
required that Ms. McMunn be granted notice and an opportunity to
be heard. Schlaifer Nance, 194 F.3d at 335.
At a conference held on July 12, 2001, counsel for Memorial
sought "leave to move to dismiss this case based on the improper
conduct of the plaintiff." Transcript of Conference held July
12, 2001, at 2. This request was granted. Id. at 14. Memorial
served its motion to dismiss and for monetary sanctions on
August 3 and, on August 7, Gary Ireland, then counsel for Ms.
McMunn,*fn5 requested the opportunity to hire an expert to
assist in responding to Memorial's motion, as well as an
extension of time in which to submit opposition papers. See
8/7/01 Ltr. A phone conference was subsequently held on August 9
during which Mr. Ireland was granted permission to hire an
expert as well as an extension to submit an opposition brief
until September 21, 2001. In a letter dated August 14, 2001, Mr.
Ireland stated the following:
After discussions with Plaintiff, it is mutually
agreed that we can longer proceed in this action
working together. Both Plaintiff and I respectfully
request an order relieving me as counsel. In
addition, Plaintiff requests an order suspending all
discovery and motion practice for a reasonable amount
of time to afford her the opportunity to retain
8/14/01 Ltr. Memorial consented to this request on the condition
that Ms. McMunn timely meet certain outstanding discovery
obligations. 8/15/01 Ltr.
At a conference held on August 22, we granted Mr. Ireland and
Ms. McMunn's joint request. Approximately one month later, Ms.
McMunn wrote to the Court, "I am writing to propose that a fair
settlement of this case could include reasonable remuneration
with both parties dropping all actual and alleged charges. If
this is not acceptable, I would have no choice but to represent
myself pro se." 9/17/01 Ltr. (emphasis in original).*fn6 We
commenced yet another conference on October 4, 2001, in order to
At this conference, Ms. McMunn acknowledged that she was not
sure what settlement terms she was willing to offer Memorial.
Thus, we ordered her to send Memorial and the Court a letter
with a concrete settlement proposal within a week or so. In a
letter dated October 10, 2002,*fn7 Ms. McMunn made a
settlement offer, but Memorial declined to settle on Ms.
McMunn's proposed terms.*fn8
Ms. McMunn served her opposition memorandum, containing
forty-six pages and forty-four exhibits, on October 31, 2001.
Following the submission of Memorial's reply memorandum on
Ms. McMunn telephoned the Court on November 27, requesting the
opportunity to file a sur-reply. Ms. McMunn was granted
permission to file a sur-reply of no more than ten pages of
argument, to be served by December 17. On December 13, Ms.
McMunn telephoned the Court to request an additional two days in
which to serve her sur-reply, which request was granted. On
December 19, Ms. McMunn served her sur-reply, consisting of
sixteen pages of argument and sixty exhibits.*fn9
In a letter dated January 4, 2002, Ms. McMunn wrote to the
I am writing to request a hearing or a conference so
that I can show you that Memorial Sloan-Kettering
submitted a falsified document to you in its Reply. I
would like to present this to you and show that
Memorial's Motion to Dismiss my case should be
dismissed on this basis. I would like to request that
you place sanctions on Memorial. I would like to
request that Memorial be punished to the fullest
extent in this matter.
Then, in a letter dated January 5, 2002, Ms. McMunn requested an
oral argument on Memorial's motion to dismiss, and in a letter
dated January 7, 2002, she requested permission to "submit a
Cross Motion to Dismiss Memorial's Motion to Dismiss my case."
We sent a letter to the parties on January 9, denying Ms.
McMunn's request for leave to file a cross-motion on the ground
that she had already submitted a significant amount of briefing
on the issues she indicated would be the subject of her motion.
However, in a letter dated January 11, 2002, the Court granted
Ms. McMunn's request for oral argument, which was scheduled for
February 4, 2002.*fn10
Ms. McMunn apparently believed that the deposition transcript
of Trisha Hodges, an employee of Memorial, would support her
contention that Memorial had provided the Court with a forged
document. As Ms. McMunn represented to the Court that she did
not have a copy of Ms. Hodges's deposition transcript in her
possession, at a phone conference on January 29, we facilitated
her review thereof at the offices of Memorial's counsel.*fn11
Finally, the Court held a two-hour oral argument on the present
motion on February 4, 2002.
In light of the foregoing, we believe that Ms. McMunn was
granted adequate notice of the possibility that the Court would
dismiss her suit for misconduct without reaching the merits, and
that she was given every opportunity to be heard in
opposition thereto. In all, Ms. McMunn submitted no fewer than
70 pages of briefing and 125 exhibits in opposition to
Memorial's motion. Further, she had opportunities to be heard at
oral argument, as well as during conferences held in court and
by telephone since Memorial served its motion.*fn12
Finally, also in an effort to protect Ms. McMunn's procedural
rights, we have applied a "clear and convincing" standard to any
findings of fact we have made. See Shepherd v. American
Broadcasting Cos., Inc., 62 F.3d 1469, 1477 (D.C.Cir. 1995) (to
dismiss a suit for abusive behavior under inherent power,
district court must find by "clear and convincing evidence" that
abusive behavior occurred); cf. Weinberger v. Kendrick,
698 F.2d 61, 80 (2d Cir. 1982), cert. denied, 464 U.S. 818, 104
S.Ct. 77, 78 L.Ed.2d 89 (1983) (requiring "clear evidence" to
support attorneys' fees awarded on the basis of bad faith);
Rybner v. Cannon Design, Inc., 1996 WL 470668, at *4 (S.D.N.Y.
Aug. 20, 1996) (sanctioning plaintiff where "defendants have
proven by clear and convincing evidence that [he] acted
intentionally, wilfully and in bad faith") (emphasis supplied).
II. Fraud Upon the Court
Fraud upon the court is "fraud which seriously affects the
integrity of the normal process of adjudication." Gleason v.
Jandrucko, 860 F.2d 556, 559 (2d Cir. 1988). It is
well-settled, however, that an isolated instance of perjury,
standing alone, will not constitute a fraud upon the court.
Id. at 560; Doe v. Federal Grievance Comm. (In re Grievance
Comm. of the United States Dist. Ct., Dist. of Conn.),
847 F.2d 57, 64 (2d Cir. 1988) (Graafeiland, J., concurring). Rather,
fraud upon the court "occurs where a party has acted knowingly
in an attempt to hinder the fact finder's fair adjudication of
the case and his adversary's defense of the action." Skywark,
1999 WL 1489038, at *14. In other words, a fraud upon the court
occurs where it can be demonstrated, clearly and
convincingly, that a party has sentiently set in
motion some unconscionable scheme calculated to
interfere with the judicial system's ability
impartially to adjudicate a matter by improperly
influencing the trier or unfairly hampering the
presentation of the opposing party's claim or
Aoude, 892 F.2d at 1118.
Our judicial system generally relies on litigants to tell the
truth and participate in discovery in good faith. Cf. United
States v. Turns, 198 F.3d 584, 587-88 (6th Cir. 2000) ("Our
system of justice relies, in large part, on the theory that when
a person takes the witness stand and swears to tell the truth,
that he or she will in fact do so."); United States v.
Leon-Reyes, 177 F.3d 816, 823 (9th Cir. 1999) ("our [criminal]
justice system relies on witnesses telling the truth"); Doe,
847 F.2d at 63 (attorney has an ethical duty to disclose a fraud
upon the court of which he knows); Solar Turbines, Inc. v.
United States, 14 Cl.Ct. 551, 553 (1988) ("our system of
justice generally relies upon the basic honesty of most
individuals, harsh sanctions for perjury, and a panoply of
rights concerning discovery and cross-examination"). Thus, when
a party lies to the court and his adversary intentionally,
repeatedly, and about issues that are central to the
truth-finding process, it can fairly be said that he has
forfeited his right to have his claim decided on the merits.
This is the essence of a fraud upon the court.
As the following discussion will demonstrate, Ms. McMunn has
perpetrated a fraud upon this Court. In analyzing Ms. McMunn's
various abuses, we follow other courts in our Circuit by
considering the following factors: (1) whether the misconduct
was the product of intentional bad faith; (2) whether and to
what extent the misconduct prejudiced the other party; (3)
whether there is a pattern of misbehavior, rather than an
isolated instance; (4) whether and when the misconduct was
corrected; and (5) whether further misconduct is likely to
continue in the future. See Skywark, 1999 WL 1489038, at *15
(collecting cases). As the objects of Ms. McMunn's various
misconduct can be organized into categories, we examine each
with these enumerated factors in mind.
A. The Visa Credit Card
As we noted above, Memorial's primary defense to Ms. McMunn's
lawsuit is that she was terminated due to repeated unexcused
absences from work in the summer of 1994. See Transcript of
Deposition of Thomas Fahey ("Fahey Dep.") at 94-95, 101-103.
Memorial suspected that Ms. McMunn spent some or all of her
absences at her house in West Virginia. See, e.g., Transcript
of Deposition of Holly McMunn ("McMunn Dep.") at 185:17-18;
5/21/01 Ltr. Accordingly, Memorial sought to discover Ms.
McMunn's credit card statements from the summer of 1994 with the
expectation that they would show billing activity in West
Virginia. Thus, on January 16, 1998, during its first deposition
of Ms. McMunn, Memorial questioned her as follows:
Q. Do you have any credit cards that you use for your
A. I have an American Express card.
Q. Any other cards?
McMunn Dep. at 188:17-21
Subsequently, on January 28, 1998, Memorial served a discovery
request asking Ms. McMunn to "[i]dentify any other credit or
charge cards [other than American Express] held and/or used by
plaintiff for the period March 1, 1994 to October 1, 1994 and
for each, identify the corresponding account number(s)." See
Def.'s Reply at 9; 5/15/01 Ltr. Ms. McMunn objected to this
request "as not reasonably calculated to lead to the discovery
of admissible evidence; interposed for the improper purposes of
harassing and invading the privacy of plaintiff; and
unreasonable." Id. On May 14, 2001, however, McMunn served an
interrogatory requesting the same type of credit card
information from Dr. Fahey. Memorial objected on the ground that
there was no factual dispute as to Dr. Fahey's whereabouts on
the dates he alleged Ms. McMunn was absent from work. See
5/21/01 Ltr. (Memorial admitting that Dr. Fahey was out of the
office on the relevant dates). A phone conference was held on
May 30, 2001, in order to resolve these discovery disputes, at
which time we ordered Ms. McMunn to respond to Memorial's
interrogatory request and disclose any and all credit cards she
held or used in the summer of 1994. We also granted Memorial's
motion to quash Ms. McMunn's interrogatory request for Dr.
Fahey's credit card records because they had no bearing on Ms.
McMunn's whereabouts that summer. See Order dated May 31, 2001
(granting motion to quash).
Memorial then provided Ms. McMunn with a blank release form
entitled "Authorization for Release of Bank Statements/Records
and Credit Card
Statements/Records" to facilitate her compliance with the
Court's order. 6/6/01 Fax. Ms. McMunn returned a single signed
release addressed to Lincoln Savings Bank in New York, and did
not identify any credit card providers, thus implying that she
had not held or used any credit cards apart from the American
Express card she had previously acknowledged. 7/7/01 Fax.
Memorial nevertheless believed that she may have used another
credit card at the time she worked for Dr. Fahey and,
accordingly, issued subpoenas to, inter alia, First USA Bank,
N.A., who produced records for a Visa Gold Credit card (the
"Visa Card") issued to Ms. McMunn. These business records
clearly establish the following: Ms. McMunn had applied for the
Visa Card in October of 1989; statements were mailed to her
apartment at 100 West 89th Street in New York*fn14 from at
least May 1996 to October 1998; Ms. McMunn's monthly statements,
which showed frequent usage, were paid for by personal checks
written and signed by her throughout 1997 and 1998; and the
account was "charged off" (closed) in December 1999. See Brill
Aff. Ex. 19; Brill Supp. Aff. Ex. 19. In fact, these records
indicate that the Visa Card had been used (in West Virginia) on
January 6, 1998, just twelve days before the deposition in which
Ms. McMunn denied the existence of any credit cards apart from
her American Express card, as well as on January 29, 1998,
twelve days after that deposition. Brill Aff. Ex. 19.
Memorial confronted Ms. McMunn with this evidence at her July
25, 2001, deposition. First, Memorial showed her a copy of the
application for the Visa Card, which we find was completed and
signed in her handwriting.*fn15 McMunn Dep. at 722:19723:5.
Ms. McMunn testified that she had "no idea" whether the document
was, in fact, what Memorial claimed it to be, and furthermore
that she had "no recollection about this [credit card
application] whatsoever." Id. at 723:6. Memorial then showed
Ms. McMunn copies of Visa Card account statements from December
1997, January 1998, and February 1998, the time of her first
deposition. Id. at 723:18-25. Ms. McMunn testified in response
that she did not "specifically" recall having the Visa Card at
that time, and hinted that her husband, who had "falsified and
forged [her] signature on any number of cards and purchases,"
may have forged her signature to obtain the Visa Card.*fn16
Id. at 724:11-14.
In her opposition papers, Ms. McMunn finally admits that she
incorrectly stated that she had no credit cards apart from her
American Express card at her January 16, 1998 deposition. Pl.'s
Opp. at 34 ("[i]n fact, the American Express card is not one,
but several that [Ms. McMunn] has had in her name"). Still, she
that she had no "recollection of having or using" the Visa Card.
Id. Moreover, she states that "[a]ny payments" made in
response to billing statements for the Visa Card "were made from
McMunn's mother's account in WV [West Virginia]." Pl.'s Reply at
13. The documents subpoenaed from First USA, however, clearly
indicate that the payments were made by personal checks, signed
by Holly McMunn, and drawn on bank accounts held at, inter
alia, Apple Bank and Anchor Savings Bank, both located in New
York.*fn17 Brill Supp. Aff. Ex. 19.
The issue concerning Ms. McMunn's Visa Card, however, goes far
beyond her denial of its existence because First USA only
maintains records of their credit card statements for five
years, at which time they are destroyed in the ordinary course
of business. See Brill Aff. Ex. 19. Thus, had Ms. McMunn
disclosed the existence of the Visa Card at her January 16,
1998, deposition, or, indeed, at any time in the next one and
one-half years, Memorial would have been able to obtain the
credit card statements from First USA for the weeks and months
before she was terminated by Dr. Fahey. Of course, we cannot be
certain that this evidence would have proven that she was in
West Virginia when she was supposed to be at work,*fn18 but
it is clear that this spoliation of evidence clearly "hinder[ed]
the fact finder's fair adjudication of the case and [Memorial's]
defense of the action." Skywark, 1999 WL 1489038, at *14.
We find that Ms. McMunn lied at her deposition when she denied
having any other credit cards, that she did so intentionally and
in bad faith, and that her false testimony directly and
irrevocably destroyed potentially critical evidence that, in
light of her actions, can reasonably be assumed would have been
harmful to her case. As the extant records establish that Ms.
McMunn used the Visa Card less than two weeks before she
testified to its nonexistence, any claim that she merely forgot
about the Visa Card is incredible. Moreover, we are also
concerned about Ms. McMunn's willingness to testify truthfully
going forward given that she has responded to the documentary
evidence produced by Memorial by falsely claiming that her
husband forged her signature to obtain the Visa Card, and,
apparently, that it was he who used it regularly for years.
In sum, we find that Ms. McMunn spoiled highly relevant
evidence by, intentionally and in bad faith, concealing the
existence of the Visa Card, that this misconduct was highly
prejudicial to Memorial, and that the misconduct was never
corrected by Ms. McMunn. This is sanctionable misbehavior.
B. Kevin Keeping
Nearly four years after filing this lawsuit, Ms. McMunn
testified as to the significance of Mr. Keeping as a witness:
Mr. Keeping was familiar with many of the
circumstances of my employment at [Memorial], if not
most or all of the circumstances. And Mr. Keeping in
fact was not only familiar with my employment, but he
was also familiar with my termination. And Mr.
Keeping had picked me up from [Memorial] that day
that Dr. Fahey fired me. . . . He knew most
everything that occurred [at Memorial] because I
discussed it with him.
McMunn Dep. at 501:15-502:1. Despite this, in her response to
Memorial's first set of interrogatories, served on December 5,
1997, she did not mention Mr. Keeping in response to questions
seeking "each person with knowledge or information concerning"
her job performance and the circumstances surrounding her
termination. Brill Aff. Ex. 8. Nor did she make any mention of
Mr. Keeping at her extensive depositions in 1998. The first time
Memorial became aware that Mr. Keeping might have knowledge or
information regarding the merits of Ms. McMunn's lawsuit was
when he submitted a notarized affidavit in opposition to
Memorial's motion for summary judgment in November 1999. See
Brill Aff. Ex. 4 (Mr. Keeping's November 14, 1999, affidavit).
Memorial's summary judgment motion was founded on the argument
that Ms. McMunn was not "disabled" within the meaning of the
ADA. Thus, in his affidavit, Mr. Keeping attempted to support
Ms. McMunn's contention that she was seriously debilitated by
asserting, inter alia, that Ms. McMunn was "unable to climb
the stairs of the subway and buses" and "unable to walk the
distance to the [grocery] store or stand long enough to do her
own shopping." Id. As to his own relationship with her, he
stated that he and his roommate, Albert Bartilotta, were "hired
by Holly McMunn . . . to drive her to and from work at
[Memorial] from the spring of 1991 to the fall of 1994." Id.
He also stated that he "provided services for her," such as
shopping and cooking. Id. Because Memorial reasonably believed
that Mr. Keeping would be a material witness, it sought to
Ms. McMunn, however, was willing to lie, and have others lie
for her, to prevent Memorial from deposing Mr. Keeping. At a
conference before the Court held on January 5, 2001, Memorial
stated that it wanted to depose Mr. Keeping. In response, Ms.
McMunn provided an address for Mr. Keeping of "27 West 47th
Street, # 15, New York, New York." 4/13/01 Ltr. Memorial,
however, was unable to find Mr. Keeping at that address, and
again asked McMunn where Mr. Keeping could be found. McMunn
indicated that the address she gave Memorial was the one she had
been given by Mr. Keeping himself. See Pl.'s Opp. at 24; Brill
Aff. ¶ 6.
As Ms. McMunn was unable or unwilling to provide further
assistance to Memorial, it sought to locate Mr. Keeping on its
own. First, Memorial hired a private investigation firm that
subsequently obtained Mr. Keeping's driver's license abstract
indicating that he lived at 32 West 82nd Street in New York.
Brill Aff. Ex. 7. Memorial also sought leads from Ms. McMunn and
her son, Cameron McMunn, as to the whereabouts of Mr. Keeping.
At a deposition of Ms. McMunn held on July 2, 2001, Memorial
questioned her on this subject, but she testified that she had
only seen him once in the preceding half year, that she did not
know where he was presently located, and that she knew of no
address for him apart from the one she had already
McMunn Dep. at 497:16-499:15, 514:10-13, 600:15-17. Similarly,
at the deposition of Cameron McMunn held on June 1, 2001 and
attended by Ms. McMunn, Cameron McMunn testified that he had not
seen Mr. Keeping during the preceding year, and that he did not
know his address.*fn20 C. McMunn Dep. at 56:14-57:12.
Ms. McMunn's and her son's deposition testimony, however, are
riddled with falsehoods. Unbeknown to Ms. McMunn, Memorial,
skeptical of Ms. McMunn's representations that she had had
nearly no contact with Mr. Keeping and did not know where to
find him, hired a private investigator to observe and videotape
Ms. McMunn. See Declaration of Olga French ("French Decl.").
The resulting videotape, which was played in open court on July
12, 2001, showed, inter alia, Ms. McMunn and Mr. Keeping
walking together and entering and exiting 32 West 82nd Street on
May 18, 19, June 24, 30, and July 1, 2001.*fn21 Id. Ex. 1.
The videotape also showed Cameron McMunn entering and existing
that building, often with Ms. McMunn and Mr. Keeping. Id. On
numerous occasions, it appeared*fn22 that Ms. McMunn went
into the building with Mr. Keeping and did not emerge until the
next morning. Id. ¶¶ 13-14, 24, 38-39. Moreover, the private
observed Mr. Keeping and Ms. McMunn engage in affectionate
physical contact, such as placing their arms around each other,
kissing on the cheek, and buttock patting. Id. ¶¶ 11, 26. This
videotape demonstrates beyond any question that Ms. McMunn and
her son were fabricating their deposition testimony, which was
taken in the same period as the videotape was recorded. In
addition to the videotape, Memorial has presented numerous other
pieces of documentary evidence and deposition testimony that
tend to show that Ms. McMunn knew quite well where to find Mr.
Keeping, but deliberately withheld that information from
Memorial, in order to frustrate the latter's attempts to depose
All of this evidence make it exceedingly clear that Ms. McMunn
did, contrary to her assertions, know that Mr. Keeping lived in
apartment 3-B at 32 West 82nd Street. Even after being
confronted with the videotape referred to above, Ms. McMunn was
undaunted. She subsequently testified that she did not know Mr.
Keeping's current residence address, McMunn Dep. at 766:19-21,
that she did not know Mr. Keeping's home or cellular telephone
numbers, id. at 767:5-8, that Mr. Keeping did not, "to [her]
knowledge," live at 32 West 82nd Street, id. at 744:5-7, and
that apartment 3-B is uninhabitable as it "is filled with rats
and vermin and  roaches," id. at 750:9-10.*fn24
Finally, Ms. McMunn attempts to blame the concealment of Mr.
Keeping on her previous attorney, Mr. Ireland. See, e.g.,
Pl.'s Opp. at 21 ("[t]hese misrepresentations [regarding Mr.
Keeping's contact information] are those of Mr. Ireland,
plaintiffs former attorney") (emphasis omitted);
see also, e.g., Keeping Dep. at 23:10-24:7 (testifying that
Mr. Ireland intentionally avoided learning Mr. Keeping's
address). This argument is unavailing, however, as she is held
accountable for the acts or omissions of her freely-chosen
attorney. Link v. Wabash R. Co., 370 U.S. 626, 63334, 82 S.Ct.
1386, 8 L.Ed.2d 734 (1962).
In conclusion, we find that Ms. McMunn repeatedly lied and
misled Memorial in an intentional effort to prevent it from
deposing Mr. Keeping. Furthermore, we find that were it not for
Memorial's extensive investigative efforts that Ms. McMunn would
likely have succeeded. Further, Ms. McMunn has never corrected
her false testimony, but rather, continues to compound her
contumacious conduct by denying the obvious fact that she knew
Mr. Keeping's address and phone number throughout this
litigation but refused to disclose it. See Pl.'s Opp. at 24
("While Mr. Keeping may live at 32 West 82nd Street, . . . that
is not one of the address[es] he provided to plaintiff"); Pl.'s
Reply at 5 ("Defendant has failed to substantiate that plaintiff
knew that Keeping lived in apartment 3-B."). To put it simply,
we find that Ms. McMunn lied, was caught in her lies, and
continues to lie.
C. Audio Tape Recordings
Ms. McMunn made audio recordings of telephone conversations
she had with various Memorial employees following her
termination for the purpose of preserving evidence to be used in
potential litigation against Memorial. McMunn Dep. at 47:425,
51:13-17, 53:15. She did so without the knowledge or consent of
those being recorded. Id. at 50:5-12. During the course of
discovery, Ms. McMunn produced six tapes to Memorial. Tape One
was delivered to Memorial on December 5, 1997, Tape Two and Tape
Three on February 25, 1998, Tape Four on March 7, 2001, and Tape
Five and Tape Six on July 10, 2001. See Declaration of Ernest
Aschkenasy ("Aschkenasy Decl.") ¶ 6. Memorial hired an expert on
audio tapes, Ernest Aschkenasy,*fn25 to determine the
authenticity of these tapes. See id. Although Ms. McMunn
denies editing the tapes, McMunn Dep. at 659:1-17; Pl.'s Reply
at 14, Mr. Aschkenasy has analyzed them and concluded that all
the tapes, with the possible exception of Tape Six, are not
original recordings, but rather have been edited. Aschkenasy
Decl. ¶¶ 13, 19, 24, 28, 30, 34.
Mr. Aschkenasy declares that "the recorded material [on Tape
One]*fn26 is a copy of a number of distinct segments of
recordings of unknown origin that were ultimately copied onto
[Tape One]." Aschkenasy Decl. ¶ 10. In support of this
contention, Mr. Aschkenasy notes that there are clearly audible
"recording breaks" on Tape One. Id. ¶ 13. The number and
quality of these recording breaks, moreover, cannot be explained
by the recording device falling off the telephone receiver, or
the flipping of the original as
it was being recorded, as postulated by Ms. McMunn, because
there is no need to stop the recording if the device falls off
and because flipping only occurs once per tape. See McMunn
Dep. at 55:8-18; Aschkenasy Decl. ¶¶ 15-16.
Tape Three includes another conversation between Ms. McMunn
and Mr. Browne. A more complete version of the same conversation
is also found on Tape Four, which was produced by Ms. McMunn
more than three years after she produced Tape Three.*fn27
Aschkenasy Decl. ¶ 28; Brill Aff. Ex. 35. First, as the portion
of the conversation that is missing on Tape Three is in the
middle, rather than at the beginning or end, it establishes that
Tape Three was intentionally edited before being produced in
discovery. Second, the portion of the conversation that is
missing from Tape Three is almost wholly devoted to Mr. Browne
explaining to Ms. McMunn that she is very unlikely to be rehired
by Memorial and that she should look for a position elsewhere.
Brill Aff. Ex. 35 at 4-5 (Mr. Browne discussing budget cuts);
id. at 7 (Mr. Browne stating, "there are not a lot of
positions [for you]"); id. at 10 (Mr. Browne inquiring as to
whether Ms. McMunn was "aggressively pursuing other options").
Significantly, the omitted portion from Tape Three contradicts
the claim in Ms. McMunn's Complaint that Mr. Browne had told her
that she would be rehired by Memorial after her termination.
Compl. ¶ 27. Moreover, whether Ms. McMunn actively sought
employment after being terminated by Memorial, and whether and
to what extent she could have reasonably relied on any
representation of Mr. Browne, are both highly relevant to her
potential damages in this suit. See Greenway v. Buffalo Hilton
Hotel, 143 F.3d 47, 53 (2d Cir. 1998) (because "[v]ictims of
employment discrimination are required to mitigate their
damages," a "discharged employee must `use reasonable diligence
in finding other suitable employment'") (quoting Ford Motor Co.
v. EEOC, 458 U.S. 219, 231-32 & n. 15, 102 S.Ct. 3057, 73
L.Ed.2d 721 (1982)). Ms. McMunn not only claims not to have been
employed in any capacity since her termination from Memorial,
but also attributes that to her reliance on alleged assurances
by Memorial. Brill Aff. Ex. 8 (Plaintiff's Response to
Defendant's First Set of Interrogatories) at ¶¶ 25-26.
Accordingly, Ms. McMunn had an obvious motive to edit that
portion of the conversation where Mr. Browne informs her that
she is unlikely to be rehired by Memorial.
Ms. McMunn counters on two fronts. First, she observes that
Mr. Browne has not suggested that the taped conversation does
not comport with his recollection of that conversation. Pl.'s
Opp. at 37-38. As Memorial points out, however, it is hardly
surprising that Mr. Browne's recollection of a single telephone
conversation that took place more than five years earlier is
imperfect. Second, Ms. McMunn hints that one or more of her (or
Memorial's) lawyers may have edited the tapes without her
knowledge. Pl.'s Opp. at 36; id. at 37 (because the tapes were
"provided by plaintiff to her first attorney[, she] has no
knowledge of . . . the way in which they were turned over" to
Memorial; Ms. McMunn "does not know all of the people who
handled these tapes and potentially might have reproduced
them"); id. at 38 (Ms. McMunn "wonders if [the tapes] were
tampered with by other people in whose hands they reside");
Pl.'s Reply at 13 ("Once out of her hands, [Ms.] McMunn cannot
have knowledge about how others
tampered with them, including any claimed alterations,
discrepancies or omissions."); id. at 14 ("If others destroyed
or discarded segments [of the tapes], it was at the hands of
others."). Ms. McMunn offers nothing beyond sheer speculation to
attribute misconduct to her counsel but, in any event, any
misconduct or spoliation of evidence by her attorney is imputed
to her. Link, 370 U.S. at 633-34, 82 S.Ct. 1386. Notably, Ms.
McMunn does not challenge the conclusion of Mr. Aschkenasy that
Tape Three contains a purposefully edited version of a
conversation also found on Tape Four.
Since Memorial has satisfactorily demonstrated that it did not
edit the tapes after receiving them from Ms. McMunn or her
attorneys,*fn28 we find by clear and convincing evidence that
Ms. McMunn (or her counsel acting on her behalf) edited the
tapes so that they would provide stronger evidence in support of
her lawsuit than do the unedited originals. Moreover, Ms. McMunn
has represented that she gave the "original[s]" to Memorial
during discovery and that she has produced all the tapes she
has. Brill Supp. Aff. Ex. 26 (11/23/98 Ltr.); Pl.'s Reply at 14.
Accordingly, Ms. McMunn has intentionally spoiled relevant
evidence, and, as even she recognizes, this is a "serious
error." Pl.'s Reply at 14; see generally West v. Goodyear Tire
& Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999).
In short, we find that Ms. McMunn spoiled relevant tapes she
produced to Memorial, and that this spoliation prejudiced
Memorial's ability to demonstrate a lack of mitigation by Ms.
McMunn. We conclude that this spoliation of evidence should be
D. Apartment Sale
Ms. McMunn sold her Upper West Side apartment for $610,000 in
October 2000.*fn30 She claims that she did so in order to pay
off creditors, following the posting of several sheriff's
notices on her door notifying her of an impending forced sale
for the purpose of satisfying these creditors. Pl.'s Opp. at
Ms. McMunn has claimed all along that numerous creditors with
liens against her apartment received all the proceeds of its
sale and that she received nothing. E.g., McMunn Dep. at
550:12-14. While she initially testified that as many as ten
creditors had judgments against her, id. at 488:9-11, she
later shortened this list to three. Id. at 489:6-16. The
claimed debts are for (1) $13,009.70, owed to Aaron Weitz, one
of Ms. McMunn's numerous lawyers, for legal fees, (2)
approximately $23,000, owed to Kenneth Burrows, another of her
lawyers, also for legal fees, and (3) for $610,000 plus
interest, owed to Mr. Keeping. Ms. McMunn has produced state
court judgments for the debts owed to Mr. Weitz and Mr. Keeping,
see Pl.'s Opp. Ex. 22 and Brill Aff. Ex. 10.
The debt she claims to have owed to Mr. Keeping, however, is
highly suspect. At her deposition held on July 2, 2001, she
testified as follows:
Q. What was the nature of Mr. Keeping's lawsuit
against you for which he obtained a judgment?
A. Mr. Keeping and a few of his partners
[significant others]*fn32 had loaned me money to
Q. How much money had he loaned you?
A. It was several hundred thousand dollars. I don't
recall the exact amount.
Q. When was that money loaned to you?
A. Oh, it's been over the course of a number of
Q. You say some of his partners. Who else was
involved in loaning you that money?
A. I think that all the notes were all in Mr.
Keeping's name, although there was — I don't think
anybody else was involved directly. No one else's
name was on paper, to my recollection.
Q. You say there are notes. These debts were
evidenced by notes?
A. I signed notes. . . .
Q. Do you have copies of the notes that you signed?
A. Probably not. Not anymore.
Q. Did you contest his claims against you?
McMunn Dep. at 490:15-491:18, 494:4-6. Ms. McMunn has not
produced a single note evidencing any debt whatsoever to Mr.
Keeping. Memorial, however, obtained from the New York State
Supreme Court clerk's office a single note evidencing Ms.
McMunn's debt to Mr. Keeping. See Brill Aff. Ex. 10 at 9. This
note, in the amount of $610,000, is dated March 1, 2000, signed
by Ms. McMunn, is due on June 1, 2000, and provides for 18%
interest. Id. Coincidentally, or perhaps not, Ms. McMunn sold
her apartment on October 26, 2000 for exactly the amount of this
note — $610,000. See Brill Aff. Ex. 16 at 2 (closing
All the evidence produced indicates that the sale of Ms.
McMunn's apartment was, indeed, a sham transaction. First, there
the suspicious nature of the note evidencing Ms. McMunn's debt
to Mr. Keeping. Even assuming that Ms. McMunn borrowed hundreds
of thousands of dollars from a personal friend, it seems
unlikely that such a friend, after taking no steps towards
collection for years, would suddenly make the entire debt due in
one month, provide for a nearly-unconscionable 18% interest if
Ms. McMunn were unable to pay by that time, and then serve her
with a default judgment on the note less than three weeks after
the amount came due.*fn33 Second, there is the fact that Ms.
McMunn sold her apartment for the exact amount of the note.
Third, the closing statement indicates that neither Mr. Weitz
nor Mr. Burrows received any of the money obtained from the
buyer, but rather that Mr. Keeping was the only creditor who
benefitted from the apartment sale. See Brill Aff. Ex.
Furthermore, once he received the money, Mr. Keeping deposited
it in a business checking account for a company he owned. See
Brill Aff. Ex. 17 (bank record showing Mr. Keeping's account
being credited $559,482.12 the day after the closing). Two weeks
later, on November 13, 2000, Mr. Keeping wrote a $135,000 check
from this account to Ms. McMunn's son, Cameron. Id. Mr.
Keeping also added Cameron McMunn as a signatory to this account
in November 2000. Id. Moreover, he wrote six large checks from
this account made out to himself over the next few months in a
total amount of $237,000. Id. Finally, in December 2000 and
January 2001, Mr. Keeping wrote no fewer than sixteen checks
made out to "Cash," fourteen of them for $9,000, and two for
$8,500.*fn35 Id. The end result of these transactions is
that approximately $515,000 of the approximately
$560,000*fn36 deposited in Mr. Keeping's business account
from Ms. McMunn's apartment sale on October 26, 2000, was
withdrawn from that account in the ensuing three months. Id.
This pattern of check writing for someone who estimates his
total net worth to be about $200,000, and who has offered no
business explanation for the expenditures, is certainly out of
the ordinary. Keeping Dep. at 134:21135:3; Brill Aff. Ex. 17.
Other evidence uncovered by Memorial demonstrates that the
money obtained from the sale of her apartment, funneled through
Mr. Keeping's business checking account and Cameron McMunn, was
effectively returned to Ms. McMunn.*fn37 Cameron McMunn
deposited the $135,000 check Mr. Keeping had written him in his
checking account on November 13, 2000. Brill Supp. Aff. Ex. 5.
Over the next eight months, dozens of checks were written from
this account to Ms. McMunn's doctors, physical therapists, and
others to whom she apparently had payment obligations.*fn38
Id. (check numbers 125, 127, and 128 indicate on their face
that they are paid on behalf of Ms. McMunn). In fact, one of the
checks drawn on Cameron McMunn's account is for $1,000 to be
paid to Andrew Levin, M.D., who McMunn had intended to retain as
an expert in this case. See id.; 6/6/01 Ltr.
Furthermore, it is clear to the Court that several of these
checks were actually written out by Ms. McMunn, though not
signed by her. Compare, e.g., Brill Supp. Aff. Ex. 6 (letter
handwritten by Ms. McMunn) and id. Ex. 7 (letter handwritten
by Cameron McMunn) with id. Ex. 5 (check numbers 96, 98,
109-113, 115, and 128 written in Ms. McMunn's handwriting).
Cameron McMunn also wrote a check dated November 22, 2000, for
approximately $71,000, to be deposited into his Charles Schwab
account. Brill Supp. Aff. Ex. 5 (check no. 108). Notably, Ms.
McMunn had previously transferred substantially the entire
balance of her own Charles Schwab account to that of Cameron
McMunn, and, moreover, Ms. McMunn held a power-of-attorney over
her son's account. McMunn Dep. at 781:11-21, 784:16-23; Brill
Supp. Aff. Ex. 5. Indeed, by the summer of 2001, nearly all of
the $135,000 from Mr. Keeping had been withdrawn from Cameron
McMunn's account. Brill Supp. Aff. Ex. 5.
Ms. McMunn and Mr. Keeping, for their part, assert that there
was nothing more to the sale of Ms. McMunn's apartment than that
she had creditors who were about to force a sale of her
apartment, but was able to sell it herself, pay off her
creditors, and be free of debt. As to the motive for this sham
transaction, Ms. McMunn asserts in her memorandum that while
Memorial "muses that plaintiff sold [her] apartment due to a
marital action[, n]othing could be further from the truth[,
because Ms.] McMunn's residence is protected by a premarital
agreement executed in 1992." Pl.'s opp. at 26. Despite attaching
forty-four exhibits to that memorandum, Ms. McMunn did not
attach a copy of this alleged premarital agreement, nor has she
produced it to Memorial or the Court in any other context. In
their attempt to explain how the funds received for the
apartment appear to have been returned to Ms. McMunn, she and
Mr. Keeping offer an unlikely story involving Ms. McMunn's
mother's intention that Mr. Keeping hold her life savings for
the benefit of Cameron McMunn.*fn39 Neither the timing nor
the amounts involved, however, substantiate their fantastic
Clinging to this thin reed, however, Ms. McMunn professes that
she is "unaware" of the financial transactions of Mr. Keeping
and Cameron McMunn. Pl.'s Opp. at 28; See also Pl.'s Reply at
9 ("[Ms.] McMunn is unaware of Cameron's financial transactions
insofar as he will be 21 years old in a few weeks. He lives a
life of his own."). We have found, however, that she has written
out many checks signed by Cameron McMunn and paid out of his
account, and that Cameron McMunn paid the debts Ms. McMunn owed
to Mr. Weitz and Mr. Burrows. Furthermore, there is
incontrovertible documentary evidence that Ms. McMunn holds a
power-of-attorney over Cameron McMunn's Charles Schwab account,
Brill Aff. Ex. 36, and that she and her son were joint account
holders of a bank account at a West Virginia bank.*fn40 Brill
Supp. Aff. Ex. 12.
In conclusion, we find, by a clear and convincing standard,
that Ms. McMunn's sale of her apartment was a sham transaction.
Moreover, we find that she has never even attempted to correct
this misbehavior by confessing the truth about the apartment
sale to this Court. While her lying and scheming with respect to
her apartment sale do not go to the substantive merits of her
claims against Memorial, they would have impacted the
factfinder's ability to make a fair determination of the
consequences of her termination, had she proved her case at
trial, as the next section of this opinion makes clear.
E. Claims of Homelessness
Ms. McMunn claims to have been homeless since she was "forced"
to sell her apartment. Pl.'s Reply at 8; see Part III.D,
supra. Memorial claims that this is a lie "intended to
perpetuate the impression that she has been left destitute as a
result of Memorial's termination of her employment, thereby
enhancing her claims for emotional distress damages." Def.'s
Mem. at 9; see Compl. ¶ 29 ("plaintiff has suffered severe
emotional pain and suffering" as a result of her termination).
We agree with Memorial that Ms. McMunn intentionally and in bad
faith attempted to deceive it and the Court into believing that
she is homeless.
At her first deposition following the sale of her apartment,
Ms. McMunn testified that she was homeless:
Q. Where are you living?
A. I'm not living anywhere particularly. I'm just
staying in different places.
Q. Where did you stay last night?
A. As a matter of fact, last night I stayed at the
— a hotel on 42nd and Lexington. I believe it's
called the Sheraton.
Q. . . . You mentioned a few minutes ago that you
stayed last night in a hotel on 42nd and Lexington.
Is that where you stayed for the last week?
Q. Can you tell me where you stayed over the last
week? Today is July 2nd[, 2001]. I'd like to know
where you stayed beginning last weekend through —
A. Mr. Brill, because I've lost my home and my son
has lost his home, and
because I've had no place to stay, I have been
placed by people affiliated with the Coalition for
the Homeless. And I've been staying in designated
Q. Can you tell me every place you've stayed over
the last week?
Q. You can't tell me?
A. No. I won't tell you.
[Ms. McMunn conferred with counsel for fourteen
Q. The [pending] question is where you've been
staying over the last week, Ms. McMunn.
A. Mr. Brill, I have not had any place to stay.
I've been staying more or less in hotel lobbies,
I stayed one — I believe this past week I stayed
one night in Grand Central Station area. I don't
have a home, and so I don't stay in a home or an
apartment. That's about the best I can answer.
Q. Just to be sure that we understand. In the last
week, and I'll state beginning Friday, June 22nd
through last night, are there any friends that
you've stayed with?
Q. Or in anyone else's apartment?
McMunn Dep. at 485:11-14, 485:21-24, 494:13-496:21 (emphasis
Ms. McMunn's testimony is refuted, however, by the videotape
evidence obtained by Memorial's private investigator. On July 1,
2001, the date on which Ms. McMunn testified that she stayed at
a Sheraton hotel, Ms. McMunn was videotaped entering Mr.
Keeping's apartment building with him at 5:45 p.m., and did not
leave at any time prior to 10:00 p.m., when surveillance was
terminated for the evening. French Decl. ¶¶ 41-42. Furthermore,
in the week prior to her deposition, Ms. McMunn was observed on
other occasions entering and exiting Mr. Keeping's building at
times that suggest that she stayed there overnight. Id. ¶¶
25-26 (surveillance began at 7:00 a.m. on a Sunday morning; Mr.
Keeping and Ms. McMunn exited Mr. Keeping's building at 9:27
a.m.), 33-34 (surveillance began just after 5:00 a.m. on a
Saturday morning; Ms. McMunn exited Mr. Keeping's building at
9:22 a.m.), 38-39 (Ms. McMunn and Mr. Keeping entered Mr.
Keeping's building at 5:07 p.m. and did not leave before
surveillance ended at 9:00 p.m.).*fn41
Even after being confronted with this evidence,*fn42 Ms.
McMunn continued to lie and claim that she was homeless. At her
July 25, 2001 deposition, she testified as follows:
Q. [W]here have you been staying overnight since
you were last deposed on July 2nd?
A. I can't tell you specifically on certain nights.
I can tell you that I have stayed in churches. I
can tell you that I have stayed in Riverside
Park. And I can tell you that I have been in
Central Park. And I can tell you that I have been
in the dorm at F.I.T. [Fashion Institute of
Technology.] And I can tell you that I stayed in
the basement at West 82nd Street [Mr. Keeping's
McMunn Dep. at 769:4-13 (emphasis supplied); see also id. at
772:9-773:11, 773:2225. The day before that deposition, however,
Ms. McMunn was observed leaving Mr. Keeping's apartment building
at 9:10 a.m. (surveillance began at 5:30 a.m.) and entering the
building at 4:00 p.m. (surveillance ended at 10:00 p.m.). French
Decl. ¶¶ 53-54, 61, 63. The very day of her deposition, she was
videotaped entering Mr. Keeping's building at 9:30 p.m.,
carrying a pizza box, and her son entered the building shortly
thereafter. Id. ¶ 70. She did not leave the building before
12:30 a.m. that night, at which time surveillance was concluded,
and was next observed leaving the building at noon the next day.
Id. ¶¶ 71, 74. Finally, we note that Mr. Keeping himself
testified on November 9, 2001 that he lives in apartment 3-B at
32 West 82nd Street and that Ms. McMunn had stayed in that
apartment "[o]n and off." 36:5-10, 229:19-21.*fn43
Ms. McMunn attempts to explain away this mountain of evidence
by claiming that she stayed with Mr. Lenny Haywood, who also
lived at 32 West 82nd Street on the dates she was observed
entering that building. E.g., McMunn Dep. at 727:9-18; Pl.'s
Opp. at 25; Pl.'s Reply at 8. First, this is an admission that
she lied when she testified that she had not stayed at the
apartments of "anyone else." McMunn Dep. at 497:10-11. Second,
as she admits that Mr. Haywood died before July 4, 2001, her
claims to have stayed with him after that time ring hollow.
Pl.'s Reply at 8.
In conclusion, we find, by a clear and convincing standard,
that Ms. McMunn intentionally and in bad faith repeatedly lied
about where she was living for the purpose of unfairly
bolstering her claim that her termination by Memorial has left
her destitute and with severe emotional damages. Only Memorial's
extraordinary efforts and related expenses revealed the
elaborate fabrication. As is her pattern, Ms. McMunn eschews
corrective measures even when confronted with irrefutable
evidence of her lies. Once again, Ms. McMunn's behavior is
IV. Appropriate Sanction
As the preceding discussion makes plain, we find that Ms.
outrageous misbehavior in this case rises to a level that
constitutes a fraud upon this Court. We must now determine the
most appropriate sanction to impose. In doing so, we consider
the five factors enumerated above: (1) whether the misconduct
was the product of intentional bad faith; (2) whether and to
what extent the misconduct prejudiced the other party; (3)
whether there is a pattern of misbehavior, rather than an
isolated instance; (4) whether and when the misconduct was
corrected; and (5) whether further misconduct is likely to
continue in the future. See Skywark, 1999 WL 1489038, at *15
(collecting cases). In addition, following the approach recently
endorsed by the Second Circuit in the spoliation context, we
arrive at a sanction that will (1) deter parties from engaging
in the sort of misbehavior of which Ms. McMunn is guilty; (2)
"place the risk of an erroneous judgment on the party who
wrongfully created the risk;" and (3) restore Memorial to the
position it would have been absent the wrongdoing of Ms. McMunn.
Goodyear, 167 F.3d at 779. Memorial seeks two types of
sanctions, namely, that we dismiss Ms. McMunn's claims against
it with prejudice, and that we award it monetary sanctions based
upon the costs and expenses it incurred as a result of her
misconduct. Def.'s Mem. at 26.
As we noted earlier, we rely on the "inherent power" of this
Court to sanction Ms. McMunn. Nearly two centuries ago, the
Supreme Court wrote, "Certain implied powers must necessarily
result to our Courts of justice from the nature of their
institution," and these "powers  cannot be dispensed with in a
Court, because they are necessary to the exercise of all
others." United States v. Hudson, 11 U.S. (7 Cranch) 32, 34, 3
L.Ed. 259 (1812); see also Chambers, 501 U.S. at 43-46, 111
S.Ct. 2123. Among these "inherent powers" is the power to
dismiss a suit with prejudice without reaching the merits, in
appropriate cases. See Link, 370 U.S. at 632, 82 S.Ct. 1386
(dismissal with prejudice is proper under district courts'
inherent powers when plaintiff fails to prosecute); Mallard v.
United States Dist. Ct. for the S.D. of Iowa, 490 U.S. 296,
308-09, 109 S.Ct. 1814, 104 L.Ed.2d 318 (1989) (district court
would have inherent power to dismiss with prejudice when
plaintiffs suit is frivolous or malicious even without statutory
We acknowledge that dismissal is a harsh sanction to be used
only in extreme situations. E.g., Valentine v. Museum of Modern
Art, 29 F.3d 47, 49 (1994). When faced with a fraud upon the
court, however, such an powerful sanction is entirely
appropriate. Aoude v. Mobil Oil Corp., 892 F.2d 1115, 1119
(1st Cir. 1989) ("we find it surpassingly difficult to conceive
of a more appropriate use of a court's inherent power than to
protect the sanctity of the judicial process — to combat those
who would dare to practice unmitigated fraud upon the court
itself"); see also, e.g., Skywark, 1999 WL 1489038, at *1
(granting motion dismissing case for fraud upon the court); cf.
Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238,
246, 64 S.Ct. 997, 88 L.Ed. 1250 (1944) (vacating a judgment
twelve years after it became final for fraud upon the court).
There can be no doubt that Ms. McMunn has abused the judicial
system from which she sought relief, and consideration of all
the factors enumerated above reinforce this conclusion. First,
we find that she acted intentionally and in bad faith. Second,
her actions prejudiced Memorial by seriously impeding its
ability to obtain relevant discovery as well as by forcing it to
expend a tremendous amount of money and time both in trying to
defend the merits of Ms. McMunn's employment discrimination
claims as well as in proving
that she engaged in unfair litigation practices. Third, it is
obvious that Ms. McMunn's actions constitute a pattern of
misbehavior rather than an isolated instance. Fourth, Ms. McMunn
has not even attempted to correct the vast majority of her
deceptive conduct.*fn45 Fifth, and perhaps most importantly,
it is clear that Ms. McMunn's lies and misconduct will almost
certainly continue in the future if this action is permitted to
go forward, thus nullifying any chance for a fair adjudication
of the merits of her claim. She has shown no remorse for her
deceptions, offered no apologies for her lies, and never
corrected her misstatements. In short, she deserves to be
punished severely for perpetrating a fraud upon this Court.
Indeed, she deserves the harsh sanction of dismissal with
prejudice. In reaching the conclusion that dismissal is the
proper remedy, we considered the feasibility and effectiveness
of lesser sanctions.*fn46 We found, however, that a lesser
penalty, such as a jury instruction, would be ineffective as a
sanction for Ms. McMunn's dishonest behavior, which pervades
every aspect of this case. Ms. McMunn has lied and convinced
others (Mr. Keeping and Cameron McMunn) to lie. She has altered,
destroyed, and otherwise spoiled evidence. She has concealed the
whereabouts of a material witness. There can be no doubt that
she has irrevocably tainted these proceedings.
Furthermore, we considered whether a large monetary sanction
alone would be an adequate sanction. We concluded that such an
award would be a hollow victory for Memorial, as it would likely
be uncollectible. Ms. McMunn has already exhibited manipulative
financial behavior and has not hesitated to lie with respect to
he misconduct. Thus, a monetary sanction that represents the
additional costs, fees, and expenses incurred by Memorial due to
Ms. McMunn's misbehavior, therefore, would not sufficiently
punish her, nor would it remove the taint from this case.
Nevertheless, in light of the magnitude of the additional costs
and expenses she imposed on Memorial through her misconduct, we
feel that she should pay for at least part of the costs she
caused Memorial to incur.*fn47 Accordingly, we award a
monetary sanction against Ms. McMunn in the amount of $20,000,
to be paid to Memorial.
For the foregoing reasons, we hereby dismiss Ms. McMunn's
complaint against Memorial with prejudice. Furthermore, we order
Ms. McMunn to pay Memorial $20,000 with interest accruing from
the date of this Memorandum and Order.
IT IS SO ORDERED.