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Not Immune

By Michael Frisch

The New Jersey Appellate Division affirmed an award of sanctions for frivolous litigation

This appeal requires us to settle whether a public entity is immune from sanctions for filing a frivolous lawsuit in accordance with the Frivolous Litigation Statute (FLS), N.J.S.A. 2A:15-59.1, and Rule 1:4-8. The only published cases regarding this issue are two divergent Chancery Division rulings issued in 1993 and 1997. If immunity does not apply, we must then determine whether the trial court abused its discretion by imposing sanctions.

The Borough of Englewood Cliffs retained Thomas J. Trautner and Chiesa Shahinian & Giantomasi PC, (collectively CSG), Albert Wunsch III, Jeffrey Surenian and Jeffrey Surenian and Associates, LLC, (collectively Surenian) to represent it in affordable housing litigation. After judgment was entered for developer 800 Sylvan Avenue, LLC. (Sylvan), a settlement was reached between the Borough and Sylvan. Thereafter, political control of the Borough Council majority changed hands and the newly constituted Council sued CSG, Wunsch, and Surenian, alleging professional malpractice, breach of contract, unjust enrichment, civil conspiracy, and aiding and abetting arising from their representation of the Borough in the litigation. The Borough also sued Sylvan, alleging claims of conspiracy and aiding and abetting.

The trial court granted defendants’ Rule 4:6-2(e) motions to dismiss the Borough’s complaint with prejudice. The trial court subsequently granted defendants’ motion for sanctions, ordering the Borough to pay their attorney’s fees and costs for filing a frivolous lawsuit. The Borough appeals, arguing the sanction applications were procedurally deficient; as a public entity, it is immune from paying sanctions under the FLS; and the trial court abused its discretion in finding the Borough’s lawsuit was frivolous.

The court rejects the Borough’s arguments and affirms based on our interpretation of the FLS that the Borough is not immune from sanctions, defendants’ applications for sanctions were procedurally compliant with Rule 1:4-8, and the trial court did not abuse its discretion in imposing sanctions against the Borough.

(Mike Frisch)