Frivolous Lawsuit Warranted Sanctions and the Award of Attorney’s Fees

The First Department determined sanctions and the award of attorney’s fees were appropriate for a frivolous lawsuit brought by an attorney who had represented himself in a related divorce proceeding.  The lawsuit sought $27,000 allegedly loaned to the defendant-wife by plaintiff. However, the $27,000 claim was made in the divorce proceedings and, although the lower court did not directly rule on the loan, the claim was effectively rejected by the court in a “catch-all” provision denying all relief not specifically addressed:

A court may, in its discretion, award to any party costs in the form of reimbursement for expenses reasonably incurred and reasonable attorneys’ fees resulting from “frivolous conduct,” which includes: (1) conduct completely without merit in law, which cannot be supported by a reasonable argument for an extension, modification or reversal of existing law; (2) conduct undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; and (3) the assertion of material factual statements that are false (22 NYCRR 130-1.1[a], [c][3]). The court may also award financial sanctions on the same grounds (22 NYCRR 130-1.1[b]).

In determining whether conduct is frivolous, the court shall consider “the circumstances under which the conduct took place, including the time available for investigating the legal or factual basis of the conduct, and whether or not the conduct was continued when its lack of legal or factual basis was apparent, should have been apparent, or was brought to the attention of counsel” (22 NYCRR 130-1.1[c]).

Here, the husband made a claim in the divorce action for repayment of the $27,000 “loan,” and Supreme Court rejected it. He then failed to challenge that finding on direct appeal. Any argument that Supreme Court did not actually decide the issue of the “loan” because it did not specifically address it is rejected, since the court included the “catch-all” language that any claims not discussed were denied. In any event, the husband could have sought clarification from the court if he felt that the claim related to the “loan” had escaped the court’s attention. Indeed, it would have behooved him to do so, as it is well settled that “res judicata bars a subsequent plenary action concerning an issue of marital property which could have been, but was not, raised in the prior matrimonial action” … . Again, we are required to consider “the circumstances under which the conduct took place” when reviewing a sanctions motion (22 NYCRR 130-1.1[c]). Here, the circumstances are that the husband, an experienced divorce lawyer, ignored a long-standing principle of matrimonial jurisprudence. Thus, his decision to commence an action that he knew, or should have known, was futile from its inception, weighs heavily in favor of a finding that his conduct was intended solely to harass the wife.  Borstein v Henneberry, 2015 NY Slip Op 05390, 1st Dept 6-23-15