Appeals Court Vacates Ruling Denying Postjudgment Sanctions Motion in FDCPA Case

The Court of Appeals for the Eleventh Circuit has overturned a lower court’s ruling that denied a defendant’s motion for sanctions in a Fair Debt Collection Practices Act case, ruling that sanctions motions are allowed to be filed after a final judgment is entered.

A copy of the ruling in the case of Huggins, Marbury, and Parson v. Leuder, Larkin & Hunter can be accessed by clicking here.

The defendants were representing a homeowners association that filed lawsuits against the plaintiffs seeking to recover unpaid fees. One of the cases was settled and the other two were dismissed. The plaintiffs then filed their lawsuit, alleging the defendant violated the FDCPA. While reviewing the complaints, the defendant “became convinced” that the suits were frivolous and served the plaintiff’s counsel with draft motions for sanctions. The plaintiffs then withdrew some of their claims. Summary judgment was awarded to the defendant, which then filed for sanctions against the plaintiff’s counsel. The District Court judge denied the motion, saying that recent precedents had impacted whether sanctions could be filed after final judgment.

The Eleventh Circuit essentially answered the question in the first line of its ruling: “The question here is whether Rule 11 motions can ever be filed after final judgment. This Court has already provided the answer: yes.” It then spends 10 more pages going through the reasons why the District Court judge should not have denied the motion, ultimately coming up with the following set of circumstances under which post-judgment sanctions motions should be allowed: “If a party fulfills the safe harbor requirement by serving a Rule 11 sanctions motion at least 21 days before final judgment, then she may file that motion after the judgment is entered.”

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