Party Sanctioned for Bringing a Frivolous Lawsuit

On December 20, 2023, Justice Chan of the New York County Commercial Division issued a decision in Tasinari v. DeMatteo, 2023 NY Slip Op 34477(U), sanctioning a plaintiff for bringing a frivolous lawsuit, explaining:

Defendants argue that there was no merit to plaintiffs’ claims, which had already been dismissed as against DeMatteo and were plainly lacking as against BCI, and, as a result, plaintiffs’ lawsuit is frivolous as a matter of law. Defendants accordingly seek sanctions in the form of an award of their costs and attorneys’ fees incurred in making their motion to dismiss.

Pursuant to 22 NYCRR 130-1.1, courts may award a party reasonable attorneys’ fees and impose financial sanctions for frivolous conduct. Conduct is frivolous if it (i) is completely without merit in law, (ii) is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another, or (iii) asserts material factual statements that are false. In determining whether conduct is frivolous, courts shall consider the circumstances under which the conduct took place, including the time available for investigating the legal or factual basis of the conduct, and whether or not the conduct was continued when its lack of legal or factual basis was apparent, should have been apparent, or was brought to the attention of counsel.

Here, plaintiffs’ lawsuit was patently frivolous when filed. The allegations in the complaint were nearly identical to those asserted and fully litigated in the RT2 Action, with the only details changing between lawsuits being the alleged identity of the owners of the VMI and CLS shares, and the recipient of the alleged transfer. Plaintiffs were surely aware, or should have been aware, of the allegations set forth in the RT2 Action, the sworn representations made by Tasinari in that action, and the court’s reasoning for dismissing the RT2 Action. Yet they proceed with filing this lawsuit anyway. Under these circumstances, sanctions in the form of reasonable attorneys’ fees and costs are appropriate and warranted.

(Internal quotations and citations omitted).

Stay informed!
Sign up for email alerts and notifications here.
Read more about our Complex Commercial Litigation practice.