Plaintiff sanctioned for ‘multiple’ Rule 11 violations

Where the plaintiff failed to support any of her claims with evidence, no reasonable person would believe the claims were factually justified and it appeared the suit was filed for an improper purpose, the plaintiff must pay the defendants’ legal fees.

Background

This case involves a decades long dispute over the management and distribution of Interlase Limited Partnership’s assets during its receivership and bankruptcy proceedings. In 2016, Barbara Sopkin raised multiple state law claims and one federal claim against defendants in relation to their handling of those assets, which were dismissed by this court under Rule 12(b)(6). Prior to having their motions to dismiss granted, defendants moved for sanctions against Sopkin. 

Sanctions

Plaintiff’s amended complaint, which she verified and signed, is baseless on all counts in terms of evidentiary support. Her causes of action have no factual basis. As the court explained when dismissing the case under 12(b)(6), the conspiracy claim was factually deficient because plaintiff failed to allege that defendants engaged in any unlawful act or purpose.

The legal malpractice claim against Ann Kathan was baseless as plaintiff failed to allege any facts suggesting she or Interlase had an attorney-client relationship with Kathan. Regarding the breach of fiduciary duty claim, plaintiff misrepresented when she had discovered her claims in order to satisfy her erroneously proposed discovery rule for the statute of limitations analysis. Her § 1983 claim was deficient for the same reason. And plaintiff failed to allege critical facts supporting her claim against defendants for wrongful interference of contract.

No reasonable plaintiff would believe the claims above were factually justified. Therefore, the court finds that plaintiff’s conduct squarely violated Rule 11(b)(3)’s requirement that the factual contentions in a party’s pleadings have or will likely have evidentiary support.

The court also finds that plaintiff’s conduct indicates she filed this action with an improper purpose in violation of Rule 11(b)(1). The court infers the existence of an improper purpose partly because of the baselessness of all her claims. In addition to failing to state any viable cause of actions against defendants, plaintiff filed this suit despite a state court injunction preventing her from asserting any interest in Interlase, and even after she expressly withdrew a claim of interest in Interlase with prejudice during previous bankruptcy proceedings.

Remedies

The court finds that defendants are entitled to the amount of legal fees and costs they sustained during this case. Counsel for both the Mendelson defendants and defendant Kathan has submitted affidavits as to the attorneys’ fees and costs incurred by both parties in responding to plaintiff’s complaint, amended complaint and related filings up until this court’s original stay of Rule 11 proceedings. 

The court has reviewed the claimed total costs and fees for the Mendelson defendants and Kathan, including the hours expended and the hourly rates used in this litigation, and finds them reasonable. The total costs and fees incurred by the defendants must be taken into account because plaintiff’s Rule 11 violations infected all the counts she raised against them, as outlined earlier. Furthermore, the court finds that an award of attorneys’ fees and costs is a necessary deterrent to plaintiff and others similarly situated from pursuing frivolous litigation, especially where an improper purpose may be inferred. 

As to plaintiff’s ability to pay, there is no evidence that plaintiff lacks the financial resources to pay this sanction. She claims to be an extremely frugal retiree without any real property or assets, however, she has not provided any supporting financial information or documentation. Moreover, plaintiff’s claims belie the fact she has launched expensive litigation for over five years in both state and federal courts. 

Finally, the severity of plaintiff’s conduct, as demonstrated by her multiple violations of Rule 11(b), warrants a monetary penalty. Given these facts and circumstances, the court will grant defendants’ motions for sanctions and will order plaintiff to pay defendants the requested fees and expenses in accordance with the affidavits filed: $58,828.42 to the Mendelson defendants and $4,026.00 to defendant Kathan.

Defendants’ motions for sanctions granted.

Sopkin v. Mendelson, Case No. 1:16-cv-01146, Sept. 1, 2022. EDVA at Alexandria (Hilton). VLW 022-3-393. 8 pp.