Commercial Division Blog

Posted: July 15, 2017 / Categories Commercial, Sanctions

Movant Failed to Meet High Burden of Showing That Opponent's Conduct Was Frivolous

On July 5, 2017, the Second Department issued a decision in West Hempstead Water District v. Buckeye Pipeline Co., L.P., 2017 NY Slip Op. 05473, holding that a movant had failed to meet the high burden of showing that an opponent's conduct was frivolous, explaining:

A court, in its discretion, may award to any party or attorney in any civil action or proceeding before the court costs in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney's fees, resulting from frivolous conduct. Although the advancement of a meritless position may serve as the basis for a finding of frivolity, the standard for such a showing is high: the rule provides that a position will be deemed frivolous only where it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law. The party seeking sanctions has the burden to demonstrate that its opponent's conduct was frivolous within the meaning of 22 NYCRR 130-1.1(c).

Here, the defendant Leon Petroleum, LLC (hereinafter Leon), failed to meet that burden. The Supreme Court, in granting Leon's motion for summary judgment dismissing the complaint insofar as asserted against it, found that the plaintiff attempted to raise a new theory of liability, and failed to support that theory with documentary evidence or other evidence in admissible form. However, Leon failed to demonstrate that the plaintiff's position was completely without merit in law, undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure Leon, or based upon material statements of fact which are false. Accordingly, the denial of that branch of Leon's motion which was to impose sanctions upon the plaintiff and/or the plaintiff's counsel pursuant to 22 NYCRR 130-1.1 was a provident exercise of discretion.

(Internal quotations and citations omitted) (emphasis added).