Court approves sanctions, but starting only after party had opportunity to evaluate discovery
In Scarbrough v. Fagerman, a Wexford County case, the plaintiffs sought to claim a parcel of the defendants' land by adverse possession. Although there were no false claims in the Plaintiff's Complaint, it became evident through discovery that their use of the disputed parcel did not meet the requirements to support adverse possession. Both parties sought summary disposition and the defendants prevailed. The defendants then sought recovery of their attorney fees, claiming that the plaintiffs had filed a frivolous action. The trial court agreed, but awarded sanctions (against both the plaintiffs and their attorneys) commencing only at the summary disposition stage. The defendants appealed, arguing the award of attorneys fees should have started with the original filing.
On appeal, the higher court unanimously agreed with the trial judge. The panel ruled that there was nothing false in the complaint as filed, but that as discovery progressed, it became apparent that the facts did not support the cause of action. The panel ruled that attorneys' fees should not be awarded for time spent during discovery, but that after the plaintiffs and counsel had the opportunity to evaluate the discovery, their maintenance of the action became frivolous.