This is an opinion granting Capital One Bank’s motion for Rule 11 sanctions in the third of three lawsuits that challenged a foreclosure.
The legal doctrine res judicata prohibits the relitigation of claims that have already been litigated by other courts and reached final judgment. Here the plaintiff filed two separate lawsuits against Capital One and MERS (a mortgage recording service) to contest a foreclosure. Judgment was entered against him in both cases. He then filed a third case in federal court to again challenge the foreclosure. The court granted summary judgment to Capital One and dismissed MERS on the ground that the current case was identical to the previous two cases that were dismissed. The court was unpersuaded by the arguments of plaintiff’s counsel that his failure to complete the service of process was a defense to the action. It explained:
Defendants argue that Plaintiff’s counsel, J.J. Sandlin, violated Fed. R. Civ. P. 11 by filing this lawsuit when he knew, based on his involvement in Alexander II and communications with Defendants’ counsel, that the claims asserted in Plaintiff’s complaint were baseless and/or precluded. Defendants further allege that Mr. Sandlin and Plaintiff knowingly filed a baseless lawsuit in an effort to delay the Alexanders’ eviction. See Dkt. # 30, ¶ 4.
In response to Defendants’ motion for sanctions, Plaintiff does not refute Defendants’ claim that a competent inquiry would have revealed this lawsuit to be legally baseless. Rather, Plaintiff explains that it first filed this frivolous lawsuit, then deliberately waited to serve process while Mr. Sandlin investigated whether the suit had any merit. In Plaintiff’s own words: “the efforts of [Plaintiff] and its attorney reflect the essence of good faith. . . . In its conservative position, [Plaintiff] purposefully declined to perfect original service of process, relying upon Rule 4(m) to cause the potential lawsuit to expire by operation of law. . . . As the plaintiff continued to test its position it ultimately determined the action should not be commenced, and deliberately failed to perfect original service of process.” Dkt. # 34 at 11-12. Because service never occurred, Plaintiff argues, this case must be dismissed and the “motion for sanctions should not proceed to judgment.” Dkt. # 34 at 7 n.2.
Plaintiff and Mr. Sandlin have essentially conceded that they intentionally wasted the Court’s time by filing — and then litigating rather than voluntarily dismissing — a frivolous lawsuit. Such conduct is hardly “the essence of good faith.” An award of attorneys’ fees under RCW 4.84.185 and sanctions under Fed. R. Civ. P. 11 are entirely appropriate under the circumstances.
The court awarded sanctions against both the plaintiff and the attorney.
Source: INTEGRITY TRUST v. CAPITAL ONE, NA, Dist. Court, WD Washington 2017 – Google Scholar
For the amount of the award ($55,175) see this link: https://scholar.google.com/scholar_case?case=1154107315227862633&hl=en&lr=lang_en&as_sdt=400006&as_vis=1&oi=scholaralrt