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TX: No sanctions for Law Firms for Frivolous Litigation (But not so individual attorneys)

Yuen v. Gerson, 342 S.W.3d. 824 (Tex. App. 2011)

TX: Civil procedure

Student contributor: David Yanoff

Facts: Gerson represented Paul Law in a separate lawsuit. When Gerson withdrew, Law retained Yuen and his firm. Law subsequently sued Gerson for negligence, gross negligence, breach of contract, breach of fiduciary duty, and DTPA violations based in his representation in the original suit. Gerson filed a “counterclaim” alleging a frivolous suit. The court granted summary judgment in Gerson’s favor on Law’s claims, and parties appeared for trial on the counterclaim in February 2009. After a bench trial, the court concluded that Gerson incurred $16,775 in attorney’s fees defending against Law’s frivolous claims. In March 2009 Gerson filed a motion for sanctions against law, and appeared at the hearing on the motion, which neither Law or Yuen attended In April 2009 the court awarded Gerson the $16,775 attorney’s fees plus an additional $25,000 against Yuen. Yuen moved for a new trial, arguing he did not receive notice of the sanctions hearing. Yuen challenged the sanctions claiming that neither he nor his firm signed the frivolous pleadings.

Issue(s):  May sanctions be imposed against a law firm, as opposed to an individual attorney, for signing a frivolous pleading?

Ruling(s):  No. “A court that determines that a person has signed a pleading or motion in violation of Section 10.001 may impose a sanction on the person. Imposition of sanctions is limited to the attorney who actually signed the pleadings. Only licensed persons may sign pleadings, not firms, so only the licensed person who signed may be sanctioned.

Lesson(s):   A law firm may not be sanctioned for the conduct of one of its members in signing a friviolur pleading.

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Posted in: Texas