Sanctions?  Always a fear.  Costs, the same.   In Kantrowitz, Goldhamer & Graifman, P.C. v Ayrovainen  2022 NY Slip Op 02256 Decided on April 6, 2022,  Appellate Division, Second Department reversed a sanction.

“ORDERED that the decision and order is reversed insofar as appealed from, on the facts and in the exercise of discretion, with costs, and that branch of the plaintiff’s motion which was pursuant to 22 NYCRR 130-1.1 to impose sanctions against the defendant’s attorney is denied.

In June 2012, Kantrowitz, Goldhamer & Graifman, P.C. (hereinafter KGG), a law firm, commenced this action against Cindy Ann Ayrovainen, also known as Cindy Lauder (hereinafter Lauder), inter alia, to recover damages for breach of contract and on an account stated. The complaint alleged that in January 2009, Lauder executed a written retainer agreement hiring KGG to represent her in a pending matrimonial action, but at the conclusion of representation, Lauder failed to pay her outstanding bills. In her answer, Lauder alleged as an affirmative defense that KGG had breached the retainer agreement and committed legal malpractice during its representation of her. In March 2013, Lauder commenced an action against KGG and two KGG attorneys, inter alia, to recover damages for legal malpractice (hereinafter the legal malpractice action). In an order dated November 17, 2016, the Supreme Court granted the motion of KGG and the KGG attorneys for summary judgment dismissing the second amended complaint in the legal malpractice action.

After a nonjury trial in this action, KGG moved, inter alia, pursuant to 22 NYCRR 130-1.1 to impose sanctions against Lauder’s attorney, Karen Winner, for engaging in frivolous conduct during the course of this action. In a decision and order dated March 27, 2018, the Supreme Court, among other things, granted that branch of KGG’s motion which was to impose sanctions against Winner and directed Winner to pay the sum of $500 to the Lawyer’s Fund for Client Protection. Lauder appeals.

“In addition to or in lieu of awarding costs, the court, in its discretion may impose financial sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct” (22 NYCRR 130-1.1[a]; see Weissman v Weissman, 116 AD3d 848, 849). “[C]onduct is frivolous if . . . (1) it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law; (2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or (3) it asserts material factual statements that are false” (22 NYCRR 130-1.1[c]; see Scialdone v Stepping Stones Assoc., L.P., 148 AD3d 955; Weissman v Weissman, 116 AD3d at 849). Here, the Supreme Court improvidently exercised its discretion in granting that branch of KGG’s motion which was pursuant to 22 NYCRR 130-1.1 to impose sanctions against Winner. Winner’s conduct did not rise to the level of frivolous within the definition of 22 NYCRR 130-1.1 (see Rojas v Hazzard, 171 AD3d 819, 820; Deutsche Bank Natl. Trust Co. v Homar, 163 AD3d 522, 524).”