On July 23, 2025, the Second Department issued a decision in Whelan v. Busiello, 2025 NY Slip Op. 04272, holding the Rule 130 sanctions must be paid to the Lawyers’ Fund for Client Protection, not to the aggrieved party, explaining:
The decision whether to impose costs or sanctions against a party for frivolous conduct, and the amount of any such costs or sanctions, is generally entrusted to the court’s sound discretion. Pursuant to 22 NYCRR 130-1.1, a court, in its discretion, after a reasonable opportunity to be heard, may impose costs in the form of reimbursement for actual expenses reasonably incurred and reasonable attorneys’ fees, and/or sanctions against a party or the attorney for a party, or both, for frivolous conduct. An award of costs or the imposition of sanctions may be made either upon motion in compliance with CPLR 2214 or 2215 or upon the court’s own initiative, after a reasonable opportunity to be heard.
Here, the Supreme Court providently exercised its discretion in imposing a sanction upon Weiss in the amount of $300. Contrary to Weiss’s contention, the court afforded the plaintiffs and Weiss a reasonable opportunity to be heard. Moreover, the transcript of the hearing adequately set forth the conduct on which the sanction was based.
However, the sanction imposed was not authorized by law. 22 NYCRR 130-1.3 authorizes the payment of a financial sanction into the Lawyers’ Fund for Client Protection, not the direct payment to litigants or their counsel. Accordingly, we modify the order appealed from so as to direct Weiss to pay the sanction into the Lawyers’ Fund for Client Protection.
(Internal quotations and citations omitted).