NJ Requires Proof of Attorney’s Bad Faith Filing For Frivolous Litigation Award

Frivolous litigation claim in New Jersey? Not without proof that the attorney who filed the offending pleading acted in bad faith.

In a recent unreported Appellate Division decision that reversed an award for frivolous litigation, the Court made clear that there must be a determination that the attorney knew or should have known that the pleadings were filed for improper purpose or without evidentiary support for the factual allegations made.

In Torgro Limousine Service, Inc. v. 76 Carriage Company, Inc., the plaintiff had filed suit in New Jersey after defaulting on a suit filed in Pennsylvania by the defendant. When 76 Carriage attempted to locate assets of Torgro Limousine to execute on the default judgment, Torgro filed suit in New Jersey for breach of contract. That suit was dismissed on a basis of res judicata. The present litigation was then commenced with expanded allegations and additional defendants including 76 Carriage’s principals. The court sided with 76 Carriage on a motion to dismiss and for sanctions, and awarded counsel fees finding that the case had been frivolously filed.

In addition to reversing the award, the Appellate Division required specific findings to support the frivolous litigation claim and also to explain the basis for the sanction imposed, i.e. how the sanction would deter repetition and why a lesser sanction would not suffice.

If you have any questions about this post, please contact dricci@wcmlaw.com.

See Torgro Limousine Service, Inc. v. 76 Carriage Company, Inc., 2010 WL 2090091 (App.Div. 2010) http://www.judiciary.state.nj.us/opinions/a5238-08.pdf