Appeals Court overturns sanctions awarded to defendant that claimed co-defendan'ts position was frivolous
When the Fidelity Title company had to pay to clean up a second mortgage that it missed prior to a closing, it sued a contractor and the contractor's supplier arguing that they owed it damages. The trial judge reviewed the pleadings and concluded that the defense alleged by the supplier was specious and not grounded in fact. He awarded sanctions against the supplier, which appealed.
On review, the higher court reversed the trial judge and overturned the sanctions. It concluded that it was an abuse of discretion for the court to award sanctions, even thought the court did not believe that the supplier's defense claims were true. Since the claims were grounded in some evidence the defense was not frivolous, even though the lower court concluded that "there was no reasonable basis to believe that the underlying facts were true."