Background
Plaintiffs Frank and Dorothy Merchant deeded their farm to Frank’s twin brother Billy in 2006 to shield the property from creditors. When Billy refused to return the farm, the Merchants sued without properly investigating their claims. They advanced inconsistent and false justifications, including claiming the deed was for safekeeping while Frank was deployed to Afghanistan. The district court found the lawsuit frivolous and awarded Billy attorney fees under the Mississippi Litigation Accountability Act. The Merchants appealed the fee award.
The court’s reasoning
The court held that a lawsuit surviving summary judgment does not preclude a finding of frivolity if the plaintiffs misrepresented fundamental aspects of their claim. The district court did not abuse its discretion in awarding fees based on the plaintiffs’ bad faith conduct during litigation. However, the court vacated the appellate fee award because the request was filed more than fourteen days after judgment, violating Federal Rule of Civil Procedure fifty-four.
What it means going forward
Litigants who file frivolous suits to recover property they wrongfully concealed may face significant attorney fee awards, but opposing parties must strictly adhere to the fourteen-day deadline for requesting appellate fees.