Florida District Court Awards Sanctions For False Claims

BCJJ, LLC. v. LeFEVRE, Dist. Court, MD Florida 2012 – Google Scholar.

The plaintiffs filed suit against several parties after they lost their investment in a real estate transaction. They also sued the Marshall & Isley Bank, which had a minor role in the transaction.

After the claims against the Bank were dismissed, the Bank moved for sanctions. The District Court awarded sanctions, finding that the claims against the bank were not just unfounded but were manufactured out of whole cloth.

“In the Second Amendment Complaint, BCJJ claims that, “[t]o entice BCJJ to invest the necessary capital, Wild, Berlin, and LeFevre each described the substance of the false appraisal to Jason Turkish, and represented the value of the Commercial property as $23.9 million.” (Dkt. 148, at ¶ 29), And lest there be any confusion as to whether this statement was inadvertent, BCJJ again stated in its Response to M&I’s Third Motion to Dismiss: “[Karyn] Wild told BCJJ’s managing member, Jason Turkish, that the Commercial Property had an appraised value of $23.9 million, and described to Turkish the substance of the false appraisal which she had received.” (Dkt. 166, at 2).

Unfortunately for BCJJ, the facts have not borne out its assertions regarding Karyn Wild or M&I’s actions. William and Jason Turkish, BCJJ’s representatives, have both deposed that nobody, and certainly not Wild, communicated the substance of the Appraisal to them prior to the closing of the deal. See Dkt. 180, at 5-8 (citing and excerpting deposition testimony to that effect). Further, in its response to the extant motion for sanctions, BCJJ does not attempt to justify — perhaps because it cannot — the the alleged inaccuracies regarding its statements about Wild having relayed the substance of the Appraisal. Given that the factual inaccuracies were included in BCJJ’s filings only after this Court dismissed its complaint for failing to specify how M&I was responsible for BCJJ being furnished the Appraisal, the Court cannot escape the conclusion that these assertions were cut out of whole cloth. And even if BCJJ did not affirmatively fabricate these claims, its failure to ask the Turkishes about their truth before making them evinces a failure to conduct reasonable inquiry into the evidentiary basis of BCJJ’s factual claims. See Mortensen v. Bank of Am., N.A., No. 3:10-CV-13(CDL), 2012 WL 1424502, at *3 (M.D. Ga. Apr. 24, 2012) (granting sanctions where parties’ deposition testimony belied their assertions and attorney could have discovered with minimal diligence that parties’ claims lacked merit); see Worldwide Primates, 87 F.3d at 1255 (“We . . . hold that, under Rule 11, an attorney must make a reasonable inquriy into both the legal and factual basis of a claim prior to filing suit.”).”

Edward X. Clinton, Jr.

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