UPDATES & ANALYSIS

Iowa Supreme Court reduces frivolous litigation penalty assessed against a party.

by Rox Laird | January 29, 2018

A trial court’s sanction for frivolous litigation in a protracted legal battle over a Johnson County land development was reduced by the Iowa Supreme Court. The sanction was levied against the party pressing the litigation, not his lawyer. And the bill for tying up the courts with the case for seven years will cost him $30,000.

Ordinarily a frivolous litigation sanction goes against the lawyer, but in some cases the party bringing the litigation can be made to bear the cost. This is one such case.

Carl Fobian, president of Fobian Farms Inc., pursued the lengthy and complex litigation after it was discovered that, because of a surveyor’s error, a restaurant was built 1 foot over property line onto land in which he had a mortgage interest.

The faulty survey ultimately was corrected and Fobian was compensated for the encroachment, but not before the case was twice reviewed by the Iowa Court of Appeals and twice remanded to the trial court.

Along the way there was a steady stream of claims, counter-claims, cross-claims, motions, resistances, pleadings and re-pleadings that stretched over seven years. An aggravating factor was that the trial court saw Fobian’s actions as a scheme to get title to the restaurant, and the scheme included a lawsuit characterized as “bullying” the surveyors into retracting an affidavit correcting the survey error.

The lengthy litigation so tried the patience of the trial judge that he assessed $145,000 in legal fees and expenses against Fobian personally.

The Iowa Supreme Court, in a 5-2 ruling handed down Jan. 26, reduced the amount of the sanction against Fobian. Writing for the Court, Justice Thomas Waterman said the Court of Appeals settled the question of whether the sanction against the party was appropriate, so the question before the justices was how much.

In the opinion for the majority joined by Chief Justice Mark Cady and Justices Edward Mansfield, Daryl Hecht and Bruce Zager, Waterman said the sanction needed to be high enough to deter the party from abusing the system but not the full $145,000, which included legitimate legal fees expended in the case. Thus, the Court settled on $30,000.

“The misconduct in this case was willful and not a mere isolated event,” Waterman wrote. Iowa court rules allow a trial judge “to sanction a represented party instead of or in addition to the lawyer who signed the pleading,” he said, adding that “a monetary sanction imposed on a represented party sends a message that can assist lawyers counseling other clients to refrain from filing improper or frivolous pleadings.”

Justice David Wiggins filed a dissenting opinion, joined by Justice Brent Appel, in which he objected to the idea of sanctioning the party rather than his lawyer.

“Courts should hold attorneys, not their clients, accountable for filing frivolous lawsuits.” Wiggins wrote. “The only exception to this general rule is where clients have knowledge of their attorneys’ wrongdoing.”

Tags: Iowa Supreme Court, Iowa Supreme Court 2017-18