This case is a feud about a mortgage and a bank loan. The defendant, Larry Winget, obtained a partial victory in the district court under which the terms of the parties’ agreement. Winget prevailed on his affirmative defense of reformation. Reformation is a legal doctrine under which a court can amend a written contract to conform the contract to the parties’ agreement. Obtaining reformation is exceedingly difficult and rare.
The problem for Winget is that although he obtained a partial victory, Chase bank prevailed on the liability issues – Winget was liable under the reformed note.
Winget sought sanctions under Rule 11 on the ground that the Bank’s denials of the allegations in the complaint were untrue and that the Bank knew those denials were untrue.
The district court denied sanctions on the ground that Chase had a factual basis for its denials of the allegations. The fact that Chase lost on one part of the case was insufficient to show that Chase lacked a factual basis for its position.
Edward X. Clinton, Jr.