1927 Sanctions awarded for false allegations


The case is Phillips v. FirstBank Puerto Rico, 13-105. The plaintiff alleged that her signature was forged on a mortgage note in 2003 and that the forgery was concealed from her. She also alleged that the mortgage was refinanced in 2009. She claimed that she learned of the forged 2003 signature only in 2009.

The court concluded that the statute of limitations had run on the claims. Worse still, the plaintiff testified at her deposition that her signature was genuine. The court awarded Section 1927 sanctions to the Defendant in the amount of $10,000. The explanation:

Throughout this litigation, Plaintiff’s Counsel has sidestepped dispositive issues and backtracked on verifiable factual matters in an effort to prolong the Court’s review of time-barred claims. In the original Complaint, Annette alleged that her signature was forged on the mortgage refinancing documents. (Compl. ¶¶ 9-10 (“[Annette] had no knowledge of the refinancing although her name and signature appeared on the application documents. . . . [T]he name and signature were not hers and must have been forged.”).) Despite her own and Counsel’s earlier protestations (see, e.g., Compl. ¶¶ 7-12; Tr. 31:5-6, ECF Nos. 70, 102-1 (“May 2, 2017 Tr.”) (“[T]he mortgage 2003, that is the document that is fraudulent.”)), in her deposition, Annette clarified that her authentic signature did appear on the documents. (Annette R.J. Phillips Dep. 62:22-66:8.)[4]

Based on Annette’s own sworn admissions, it has become clear to the Court that Annette’s signatures were authentic and, thus, the basis for the Complaint, and the arguments presented to the Court on May 2, 2017 in an attempt to overcome judgment on the pleadings, were untruthful. The efforts of Plaintiff and Plaintiff’s Counsel to conceal critical facts from the Court sufficiently establish bad faith. Notably, the 2003 refinancing documents which the Court reviewed and relied on at summary judgment, though presented for the Court’s review by Defendants (seeDef.’s Exs. H-K, ECF Nos. 73-8-73-11), appeared in Plaintiffs’ initial Rule 26 disclosures filed in July 2014 (see, e.g., ECF No. 31 at 2-3). As far as the Court can discern, for years Plaintiff has possessed documents which she knew reflected her authentic signature and confirmed her presence at the 2003 mortgage closing. Yet Plaintiff’s Counsel represented to the Court that the signatures were forged (May 2, 2017 Tr. 31:5-6); or that Annette was ill and medicated and could not remember appearing at the closing or signing the documents;[5] or that Annette was duped into signing these documents; or that “her mother used a pretext to get her to the bank and she ended up signing a refinancing of the mortgage” (Pl.’s Opp’n to Def.’s Mot. Fees and Costs at 1). This revolving-door defense and after-the-fact reframing of Plaintiff’s Complaint is a disingenuous and vexatious cover for the fact that Plaintiff’s original contentions were false and made in bad faith.

This is an ugly tale of a lawyer who should have known better and told the truth immediately when he learned that the 2003 signature was genuine. The lawyer was only found out when the client refused to support the false allegations in the complaint. The link is to an article about a lawyer who fixed a mistake as quickly as he could.

Sanctions Denied Where Lawyer Takes Affirmative Steps To Amend a Nonviable Claim

Ed Clinton, Jr.

 

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