Commercial Litigation and Arbitration

§ 1927 Sanctions — Continuing to Litigate Claims after Adverse Party Offers to Provide the Only Relief to Which Claimant Is Entitled Merits Sanction

Milner v. Biggs, 2014 U.S. App. LEXIS 9075 (6th Cir. May 13, 2014):

In the underlying case, plaintiffs-appellants Jason A. Milner, Natasha M. Milner, and Lexi Milner retained Jason Shugart as counsel after discovering mold in a home approximately four weeks after they purchased it. On behalf of the Milners, Shugart  [*2] filed a lawsuit in Pike County Court of Common Pleas in Ohio, raising a multiplicity of claims against nine named and additional unnamed defendants, including the seller, the home inspector, the seller's real-estate agency, the Milners' real-estate agents, and the title company. The case was subsequently removed to the United States District Court for the Southern District of Ohio on October 7, 2010. The district court first dismissed several claims in response to two motions for judgment on the pleadings, and ultimately granted summary judgment to all defendants on the remaining claims. We affirmed the district court's judgment with respect to all counts. Milner v. Biggs, 522 F. App'x 287 (6th Cir. 2013).

The award of sanctions on appeal here involves Shugart's persistence in litigation against the following defendants-appellees: Arrow Title Agency, LLC, which was the title company used during the underlying home purchase; its president, Jonathan Holfinger; and its regional sales manager, Chris Moore (collectively "Arrow"). The Milners' complaint alleged six causes of action against Arrow: violation of the Ohio Consumer Sales Practices Act ("OCSPA"), violation of the federal Real Estate  [*3] Settlement Procedures Acts ("RESPA"), negligence, negligent misrepresentation, conspiracy, and unjust enrichment. R. 3 (Compl.) (Page ID # 107-23). The primary factual basis for the claims against Arrow was that it had prepared a deed incorrectly conveying title only to the husband in the sale rather than to both buyers.  Id. at ¶ 77 (Page ID #115).

***

The district court acted within its discretion to sanction Shugart for continuing to litigate his meritless claims after Arrow offered to  [*12] provide the only relief to which his clients were entitled. Sanctions are not appropriate in this case merely because Shugart pursued a claim which was ultimately unsuccessful. If an attorney reasonably believes that a claim has merit, he is not subject to sanctions because the court issues a judgment in favor of the opposing party. See Michigan Division-Monument Builders of N. Am. v. Michigan Cemetery Ass'n, 524 F.3d 726, 739 (6th Cir. 2008). However, Shugart's continued litigation of the claims after Arrow offered to correct the deed, including multiplicative motions practice and inappropriate discovery requests, was vexatious and warranted sanctions.

Share this article:

Facebook
Twitter
LinkedIn
Email

Recent Posts

RICO and Injunctions: (1) State Court Actions Designed to Perpetuate and Monetize a RICO Violation Are Enjoinable under RICO, Even Though They Are Not Themselves Alleged to Be Predicate Acts [Note: Noerr Pennington Applies in RICO Actions] — (2) Although Civil RICO’s Text and Legislative History Fail to Reveal Any Intent to Override the Provisions of the Federal Arbitration Act, Arbitrations Are Enjoinable Under the “Effective Vindication” Doctrine Where They Operate As a Prospective Waiver of a Party’s Right to Pursue Statutory RICO Remedies — (3) Arbitration Findings May Be Given Collateral Estoppel Effect in a Civil RICO Action — (4) Injunction of Non-Corrupt State Court Litigations That Furthers a RICO Violation Are Enjoinable Under the Anti-Injunction Act’s “Expressly Authorized” Exception — (5) “The Irreparable Harm Requirement Is The Single Most Important Prerequisite For The Issuance Of A Preliminary Injunction” (Good Quote) — (6) When Injunction Is Based on “Serious Questions on the Merits” Rather Than “Likelihood of Success,” Court May Rely on Unverified Pleadings and Attached Exhibits to Assess the Merits, Unless the Opponent Has Raised Substantial Questions (Here, the Opponent Failed to Request an Evidentiary Hearing) — (7) Whether Amended Pleading Moots An Appeal Turns on Whether It Materially Changes the Substantive Basis for the Appeal — (8) Meaning of “In That” (“Used To Introduce A Statement That Explains Or Gives More Specific Information” About A Prior Statement)

Archives