From Williams v. R.W. Cannon, Inc., 2008 U.S. Dist. LEXIS 82916 (S.D.Fla. Sept. 24, 2008):

...Rule 11 sanctions must be imposed against Defendants because they frivolously denied factual allegations in Plaintiff's Complaint, even though the allegations were true and Defendants either knew that they were true or would have known that they were true after conducting a reasonable inquiry. The allegations were: (1) that Plaintiff was "employed as a warehouseman"; (2) that Defendant, Robert W. Cannon, is the sole director of R.W. Cannon, Inc., is responsible for the day-to-day operation the company, hired Plaintiff, and controlled Plaintiff's employment and compensation; (3) that Defendants, jointly and severally, are an "employer" and an "enterprise engaged in commerce" with gross receipts over $ 500,000 under the FLSA.

First, there is no question that it was frivolous for Defendants to assert these factual denials because there was no evidence to support them and, in fact, Defendants were aware that they were untrue. See Jones v. Int'l Riding Helments, Ltd., 158 F.3d 516, 524 (11th Cir. 1998). All of the information necessary to decide whether to admit or deny the allegations in question was either known to Defendants or immediately available to them. See Fed. R. Civ. P. 11(b)(4). Second, assuming that it was necessary to conduct any investigation to conclude that their denials were frivolous, even the most cursory investigation would have made it clear that they were frivolous. Defendants have not asserted any reason to excuse their failure to conduct such a cursory investigation. See Jones, 158 F.3d at 524.

Even if it could be argued that the failure of Defendants' counsel to uncover these basic facts was excusable when he filed the initial Answer, there is no basis in the record to excuse the fact that he reasserted the same frivolous denials in the Amended Answer even after those facts had come to light through discovery and even though he had been served with Plaintiff's motion for sanctions, which explained in detail how and why Defendants' assertions were frivolous. ***

[T]he fact that Defendants complied with this Court's Order to excise its frivolous assertions and file a Second Amended Answer ... does not cure Defendants' violation of Rule 11 in their filing of the initial Answer and the Amended Answer.... Plaintiffs were required to expend time and resources to establish that these facts were truly uncontested.

...Defendants state that Plaintiff's motion "is mooted by the fact that Defendants have asserted the Motor Carrier Exemption," which, if successful, will mean that Plaintiff is "entitled to no overtime whatsoever".... This argument is completely unfounded because Rule 11 sanctions may be imposed against any person who asserts frivolous positions in court papers, without regard to whether that person ultimately prevails in the underlying litigation.

Held, even though the conduct did not warrant sanctions under 28 U.S.C. § 1927 because it was negligent, and even though Rule 11 sanctions were not appropriate for the defendant’s denial of legal liability, attorneys' fees were appropriate for the frivolous factual denials.