Lawyer Sanctioned for Ignoring Controlling State Law In Foreclosure Matters


Dunbar v. WELLS FARGO BANK, NA, Dist. Court, Minnesota 2012 – Google Scholar.

A foreclosure defense attorney was sanctioned for ignoring controlling law.  The Court felt his only motive was to delay the cases and keep his clients in their homes.

Rule 11 sanctions may follow when a pleading, written motion or other paper (1) is submitted to the court for “any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation”; (2) is not supported by existing law or a nonfrivolous argument for the extension, modification or reversal of existing law; or (3) if the allegations contained therein lack support. See Fed. R. Civ. P. 11(b)(1)-(3); Clark v. United Parcel Serv., Inc., 460 F.3d 1004, 1008 (8th Cir. 2006). To satisfy the requirements of Rule 11, an attorney is obligated to conduct a reasonable inquiry into the factual and legal basis for a claim. Coonts v. Potts, 316 F.3d 745, 753 (8th Cir. 2003). In determining whether sanctionsare warranted, the court considers “whether a reasonable and competent attorney would believe in the merit of [the] argument.” Id. (citation and internal quotation marks omitted).

In the present case, as the court noted at length in its April 3 order and as Judge Schiltz discussed in Welk, the complaint and filings are contrary to the law of the state of Minnesota. Butler presents no argument for reversing or modifying that law, and instead argues that it does not apply. This court is bound to apply Minnesota law as interpreted by the Minnesota Supreme Court. Butler’s argument is frivolous under Jackson.

Despite the repeated dismissal of Butler’s actions in this district and the Eighth Circuit, he continues to file actions, congesting the docket of the court, taking resources away from cases that have merit and charging clients to pursue meritless claims. These frivolous actions have, at best, the result of allowing Butler’s clients to remain in their homes (or continue to own their rental properties) without payment. In fact, the real outcome for plaintiffs is to needlessly prolong the period of financial and housing uncertainty brought on by their failure to meet their loan-payment obligations. Defendants were forced to respond to Butler’s frivolous motions and arguments in this action, including filings made after he was ordered to show cause why he should not be sanctioned in Welk. Therefore, for the above reasons, and for the reasons stated in Welk, the court finds that Butler has violated Rule 11.”

In a footnote, the court listed a large group of lawsuits filed by the attorney, all apparently with the same baseless position.

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