In Download Tllman v. Brink (Mass. App. Ct. Opinion Filed 08.18.09) a major issue on appeal to the Appeals Court of Massachusetts was whether the Trial Court found a legally sufficient basis "in concluding that the record demonstrated that the suit was filed in bad faith and without any viable factual basis," and whether the Appellate Division was correct "in affirming the award of attorney's fees against the attorneys." Id. at 852.
The suit was filed on the basis of allegations, among others, that Commerce Insurance Company, an Automobile Insurance Company, and Attorneys retained by that Insurance Company to investigate the Plaintiffs' "automobile insurance claims," had engaged in "alleged intentional interference with economic relations and civil conspiracy".. The Attorneys-investigators "determined that the plaintiffs had provided materially false information and had engaged in an insurance scam." Commerce denied Coverage to the Plaintiffs "[b]ased on this information". Id. at 846-47.
The Plaintiffs thereafter filed their lawsuit against Commerce and the Attorneys. Their claims did not survive a Motion for Summary Judgment, nor did they survive an observation by the Trial Judge in their case who reasoned that in varying degrees the Plaintiffs' allegations rested only on "speculation," and were supported by "no evidence". The Plaintiffs did not appeal this ruling. Id. at 848-49.
The Trial Judge granted a Motion for Attorney's Fees based on Mass. R. Civ. Pro. 11 and assessed these sanctions against the Plaintiffs' Attorneys. Noting that under Massachusetts law a "good ground" for a Complaint or other pleading "requires that the pleadings be supported by 'reasonable inquiry and an absence of bad faith,'" the Appeals Court of Massachusetts affirmed this ruling. "The judge was not wrong in concluding that the record demonstrated that the suit was filed in bad faith and without any viable factual basis." Id. at 851, 852.
In the course of reviewing the record and affirming the Trial Court's decision, the Appeals Court pointed out that "[i]n the instant case, there was a plethora of evidence of bad faith by the litigants [i.e., by the Plaintiffs themselves].... However, the trial judge did not have the authority to assess attorney's fees against the plaintiffs. Given that she wanted to compensate Brink and S&B [the Attorneys retained by Commerce], she was free to assess the entire amount against the attorneys." Id. at 854.
Attorney's Fees as Sanctions for "Bad Faith" are discussed in Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" ยง 2.07 (Second Edition Shepard's/McGraw-Hill; 2009 Supplement West Publishing Company).
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