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A federal district court in Michigan sanctioned an attorney for bringing a lawsuit and initially opposing a motion to compel arbitration when he should have known that the underlying claims were arbitrable.
In Parrott v. Corley, No. 05-74552, 2006 WL 2471943 (E.D. Mich. Aug. 24, 2006), Parrott agreed to write material for Corley’s travel guides. The parties’ written agreement contained an arbitration clause.
When Corley terminated the contract, Parrott sued. Corley filed a motion to compel arbitration and a motion for sanctions. On the eve of the motion hearing, Parrott voluntarily dismissed the action, but Corley went ahead with its motion for sanctions.
The Court granted Corley’s motion and sanctioned Parrott pursuant to 28 U.S.C. §1927, which provides: “Any attorney . . . who so multiples the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct.”
In imposing sanctions, the Court found that Parrott’s attorney “reasonably should have known” that the claims in the suit were subject to arbitration. The Court cited the voluntary dismissal of the action as evidence that Parrott’s attorney knew resistance to arbitration was frivolous. The sanctions totaled $6,570.75, which included costs and attorney fees incurred in preparing the motion to compel arbitration and in opposing a motion for a preliminary injunction.
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