The Virginia Business Litigation Blog
Litigation tactics designed to bully, harass, intimidate, or embarrass an opponent or opposing counsel are not permitted in Virginia courts. While litigants may gain great satisfaction from the knowledge that their lawsuit or counterclaim is causing the other side a great deal of expense and inconvenience, if the primary goal of the litigation is to cause pain, rather than vindicate legitimate legal rights, courts have the authority to impose sanctions. Notably, this is true even if the claim has merit. So held the Virginia Supreme Court on November 12, 2015, in Kambis v. Considine.
Most lawyers associate Va. Code § 8.01-271.1 (the state-level equivalent of Rule 11 of the Federal Rules of Civil Procedure) with frivolous pleadings – pleadings completely devoid of merit, unsupported by any foundation in law or fact, and having no reasonable chance of success. Lawyers know that if they file a complaint based on fanciful factual allegations and outdated legal citations, they can be sanctioned and ordered to reimburse the other party for legal fees incurred in having to respond. What’s noteworthy about the Kambis case is that it focused on the “improper purpose” prong of the sanctions test and clarified that sanctions may be awarded even if a pleading presents a valid claim fully supported by the facts and the law.
The procedural history of the case is a little convoluted, but here’s essentially what happened. Mitchell Kambis and April Considine were business partners and romantic partners many years ago. Their business was involved in real estate development. They broke up, and some time later, Mr. Kambis filed a 17-count complaint against Ms. Considine and related parties. When faced with a demurrer and plea in bar, Kambis amended his complaint to include 19 counts. The trial court dismissed 15 of those claims but permitted leave to amend. Ultimately, Kambis was allowed to go forward on four counts, all of which survived various defensive pleadings aimed at getting them dismissed. Several months later, Kambis voluntarily dismissed most of the remaining claims.
Ms. Considine moved for sanctions somewhere in the middle of all that, and when all was said and done, the trial court granted the motion and awarded $84,541.61 against Mr. Kambis and $64,319.38 against his original counsel. In doing so, the court noted that it observed “a certain level of intent to intimidate Ms. Considine in this particular case.”
On appeal, Kambis argued that 8.01-271.1 did not authorize sanctions against parties who assert claims well grounded in law and fact, and that the survival of several of his claims against multiple demurrers, pleas in bar, and motions for summary judgment showed that the claims were not frivolous.
The Virginia Supreme Court noted that 8.01-271.1 lists three bases for awarding sactions, and they are stated in the conjunctive. Failure to comply with any one of the requirements is sufficient to award sanctions. In other words, a complaint filed for an improper purpose, such as to harass or cause unnecessary delay or needless increase in the cost of litigation, is going to invoke 8.01-271.1’s sanctions provision regardless of whether the claims have any merit.
Moreover, the court held, the phrase “improper purpose” is not limited to the three examples identified in the statute. The trial court’s finding that Kambis exhibited an “intent to intimidate” was deemed sufficient to constitute an improper purpose despite the fact that intimidation is not specifially mentioned in 8.01-271.1: “[T]he trial court found that Kambis was pursuing his claims in a manner that demonstrated he was less interested in vindicating his legal rights and more interested in intimidating and injuring Considine. It is readily apparent that a claim brought for such vengeful and vindictive reasons is brought for an improper purpose under Code § 8.01-271.1.”
“Well hold on a minute,” you say. “Litigation is intimidating! If someone tortiously interferes with my business relationships and causes me financial harm, that person needs to be punished, and I need to be compensated for the resultant damages. And yes, revenge is sweet, so I will enjoy watching them suffer as my pit-bull-of-a-lawyer scorches the earth to enforce my rights! Are you saying I can be forced to pay my adversary’s attorneys’ fees when he is the Bad Guy in this whole scenario?”
The Supreme Court anticipated that response, so it offered the following guidance in a footnote:
“We recognize that almost any legal action is, in some way, intimidating. Such intimidation is inherent in our adversarial legal system and is generally not sanctionable, so long as the intimidation is a collateral effect of a party’s legitimate attempt to vindicate a legal right. The spectre of sanctions arises when intimidation is no longer a collateral effect. Thus, where a party brings an action or makes a filing primarily to intimidate the opposing party, such an action or filing is improper and runs afoul of Code § 8.01-271.1.”