In a rare occurrence, a New Jersey Court recently enforced the State’s prohibition against frivolous litigation against a plaintiff who sought to sue a home inspector following a failed real estate transaction.
The plaintiff in Vorhand v. Guinan, et al., OCN-L-425-14 was the seller in a real estate transaction.  The buyers, also defendants, retained the defendant professional home inspector to inspect the home being sold by plaintiff.  Several areas of concern were noted during the inspection of the structure and foundation.  The buyers cancelled the contract to purchase the property as a result.
The seller filed suit against the buyers and the home inspector, alleging that the inspector was negligent in performing the inspection thereby causing the buyers to cancel the contract. The seller had no contract with the home inspector and admitted he did not rely upon the home inspection report provided to the buyers.
New Jersey prohibits frivolous litigation by court rule.  New Jersey Rule of Court 1:4-8 allows a court to impose sanctions, including attorney’s fees, if a lawsuit: is filed in bad faith; is not warranted by existing law or by a non-frivolous argument for the extension, modification, or reversal of existing law or the establishment of new law; or contains unsupported factual allegations. A defendant who believes that a claim is frivolous must send written notice to the plaintiff demanding that the offending pleading be withdrawn within thirty days.  If the plaintiff fails or refuses to voluntarily withdraw the lawsuit, the defendant may seek sanctions following entry of judgment against plaintiff on the questionable claims.
Counsel for the defendant home inspector in Vorhand, Joseph W. Denneler, Esquire,  sent a letter to plaintiff’s counsel  demanding that the claims against the inspector be dismissed because the plaintiff was not the client of the inspector, had not contract with the inspector, and that no legal duty was owed to the plaintiff by the inspector.  The plaintiff refused to withdraw the action.  Mr. Denneler filed for summary judgment seeking dismissal of the case which was granted by the Court.  After the dismissal Mr. Denneler filed the motion for sanctions for frivolous litigation.
During argument the Court noted that there was no factual or legal basis for the claims by the seller against the home inspector.  As a result, the Court granted the motion for sanctions permitting an entry of an order compelling plaintiff to repay the defendant home inspector for the fees and costs incurred defending against the frivolous claim.
Although not normally sought or granted, sanctions for frivolous litigation are an effective tool to offset the costs of eliminating frivolous claims in home inspection and other professional liability matters.
Should you have any questions regarding this article please feel free to contact Mr. Denneler at jdenneler@srstlaw.com<mailto:jdenneler@srstlaw.com>.

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