## Facts

- Steven and Nadia Haisha obtained a residential mortgage loan from Countrywide Bank, FSB.
- The Haishas filed a verified complaint in Michigan state court asserting multiple claims arising from the mortgage transaction.
- Defendants included Countrywide Bank, FSB; BAC Home Loans Servicing, LP; and Bank of America, N.A. (as successor to Countrywide).
- Defendants removed the action to federal court.
- Defendants moved to dismiss; plaintiffs, though represented by counsel, did not respond.
- While dismissal briefing was pending, defendants moved for sanctions against plaintiffs and their attorney under Federal Rule of Civil Procedure 11, 28 U.S.C. § 1927, and the court’s inherent authority.
- Defendants asserted the complaint was materially inaccurate despite being verified under oath and was substantially similar to multiple earlier complaints filed by the same attorney that had been dismissed on the pleadings.
- Plaintiffs did not respond to the sanctions motion.

## Issues

1. Whether sanctions were warranted under Rule 11, 28 U.S.C. § 1927, and/or the court’s inherent power based on filing and maintaining a verified complaint containing factual inaccuracies and recycled claims previously rejected in similar actions.
2. If sanctions were warranted, whether they should be imposed on counsel, the clients, or both, and whether attorney’s fees and costs were an appropriate measure.

## Decision

- The court had previously granted defendants’ motion to dismiss as unopposed and dismissed Countrywide and BAC from the case.
- The court granted defendants’ motion for sanctions in part and denied it in part.
- The court ordered defendants to submit an accounting of attorney’s fees and costs attributable to the sanctionable conduct.
- The court ultimately awarded $6,743.90 in attorney’s fees and costs, assessed jointly and severally against attorney Julian Levant and plaintiff Steven Haisha.

## Legal Principles

- Rule 11 authorizes sanctions when an attorney, after reasonable inquiry, files pleadings lacking evidentiary support or asserting legal contentions not warranted by existing law or a nonfrivolous argument for its modification.
- 28 U.S.C. § 1927 permits sanctions against an attorney who unreasonably and vexatiously multiplies proceedings, limited to excess costs and fees caused by that conduct.
- A federal court may use its inherent power to sanction conduct that abuses the judicial process, including bad-faith litigation practices.
- Refiling substantially similar pleadings after repeated prior dismissals may support sanctions where it reflects objectively unreasonable legal contentions and causes needless expense.
- A party who verifies a complaint under oath may share responsibility for sanctionable factual inaccuracies, supporting sanctions against both counsel and the verifying party.
- Fee awards as sanctions should be tied to costs reasonably incurred because of the sanctionable conduct and may be set after submission and review of supporting documentation.

## Conclusion

The court sanctioned plaintiffs’ counsel and the verifying plaintiff for pursuing a mortgage-related action based on materially inaccurate, substantially recycled allegations and for failing to engage with dispositive and sanctions motions, awarding defendants $6,743.90 in attorney’s fees and costs jointly and severally against counsel and Steven Haisha.


Haisha v. Countrywide Bank, FSB, No. 11-11276, 2011 WL 3268104 (E.D. Mich. July 29, 2011)