The New Jersey Superior Court, Appellate Division, upheld an imposition of sanctions against a plaintiff's attorney for pursuing frivolous litigation against his client's former employer. Carolyn Baynes filed a sexual harassment complaint in November 2003 against her supervisor, Darryl Denman. Thereafter, Baynes received obscene and threatening correspondence, warning her to "keep [her] mouth shut" prompting her to file, with the local police, a complaint against Denman. Three years later, in May 2007, the company terminated Denman's employment.
On June 25, 2007, Denman filed a complaint against the
company, Baynes, and another employee, Thomas Kiernan. Denman
asserted causes of action alleging violations of the New Jersey Law
Against Discrimination, intentional infliction of emotional
distress, and tortious interference with a contractual
relationship, claiming that the company terminated his employment
because it attributed authorship of the threatening correspondence
to him. Without any evidentiary basis, Denman claimed that Kiernan,
who also worked for the company at the time, authored and sent the
threatening letters to Baynes "for the purpose of falsely
implicating [Denman]."
Kiernan's attorney sent seven letters to Denman's counsel,
demanding dismissal of the complaint as frivolous litigation.
Specifically, the communications to counsel noted that Denman's
claims were both untimely and lacked evidentiary support.
Denman's counsel refused to dismiss the complaint against
Kiernan.
Thereafter, in November 2007, Kiernan filed a motion to dismiss and
sought an award of sanctions and fees. On July 29, 2008, the trial
judge dismissed the complaint against Kiernan in its entirety.
Furthermore, despite finding that Denman's counsel did not
engage in bad faith, the court imposed sanctions against
Denman's attorney for attorneys' fees related to the
time-barred claims because Kiernan had provided Denman's
counsel with proper notice of the statute of limitations
issue.
On appeal, Denman's counsel argued that the trial court abused
its discretion in imposing sanctions despite a finding that counsel
had acted in good faith. The Appellate Division noted that, in
order to impose sanctions upon a party for pursuing frivolous
litigation, the judge must find (1) that the non-prevailing party
continued to pursue litigation in bad faith,
or (2) that the non-prevailing party knew
or should have known that its pursuit of litigation "was
without any reasonable basis in law or equity." Although
Denman did not act in bad faith, he did pursue litigation of
time-barred claims despite receiving notice that the statute of
limitations had expired. Therefore, the Appellate Division affirmed
the trial court's imposition of sanctions as to the untimely
claims.
This case demonstrates that, under certain circumstances, New
Jersey courts will impose sanctions on attorneys who pursue
frivolous claims, including those that lack evidentiary support or
are untimely. Further, this decision highlights the need to provide
written notice to counsel of any deficiencies in the complaint
prior to seeking sanctions relating to such deficiencies.
Originally published on the Employer's Law Blog
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