Frivolous Litigation and The Inherent Authority of the Courts
Judges have an “inherent authority” to impose sanctions for blatant violations of our court rules apart from any specific provisions setting forth those sanctions. Mandel v. UBS/PaineWebber, Inc., 373 N.J.Super. 55, 82, 860 A.2d 945, 961 (App. Div. 2004).
Litigation is considered frivolous when it is “commenced, used or continued in bad faith, solely for the purpose of harassment, delay or malicious injury” or if the party “knew, or should have known, that the complaint, counterclaim, cross-claim or defense was without any reasonable basis in law or equity and could not be supported by a good faith argument for an extension, modification or reversal of existing law.” N.J.S.A. 2A:15-59.1(b).
A motion for sanctions under Rule 1:4-8 will be denied where the pleading party had an objectively reasonable and good faith belief in the merit of the claim. See First Atl. Fed. Credit Union v. Perez, 391 N.J. Super. 419, 433 (App. Div. 2007); K.D. v. Bozarth, 313 N.J. Super. 561, 574-75 (App. Div.), certif. denied, 156 N.J. 425 (1998); Pressler & Verniero, Current N.J. Court Rules, comment 2 on R. 1:4-8 (2017).
However, litigation may become frivolous, and therefore sanctionable, by continued prosecution of a meritless claim, even if the initial pleading was not frivolous. DeBrango v. Summit Bancorp, 328 N.J. Super. 219, 227-28, 230 (App. Div. 2000).
This is because the “requisite bad faith or knowledge of lack of well-groundedness may arise during the conduct of the litigation.” United Hearts, L.L.C. v. Zahabian, 407 N.J. Super. 379, 390 (App. Div.), certif. denied, 200 N.J. 367 (2009) (citations omitted).
In such cases, the party seeking sanctions would only be entitled to fees and/or costs incurred from the time the litigation became frivolous, rather than from the beginning of the litigation. DeBrango, supra, 328 N.J. Super. at 230.
R. 4:50-2 provides that a motion for relief from a judgment premised upon fraud must be made within one year from entry of the judgment. R. 4:50-3, however, removes from that limitations period a judgment obtained through fraud upon the court. Relief under this rule may be obtained “without limitation as to time.” Shammas v. Shammas, 9 N.J. 321 , 327, 88 A.2d 204 (1952).