Houston-Area Lawyer Sanctioned $150,000 for Filing Groundless Lawsuit Against AZA Client
January 28, 2021
RICHMOND, TX – Fort Bend County District Judge R. O’Neill Williams ordered Bellaire lawyer Paul B. Rosen and his client Gen Fu Zhang to be sanctioned $150,000 for making groundless claims in a lawsuit over the lease of a Sugar Land strip mall restaurant.
AZA lawyer Foster Johnson, who handled the case with co-counsel S. Scott West, said the sanction is one of the largest against a lawyer in Texas. He said in the 20 years of Texas appeals he reviewed, he only found one larger sanction.
“Seldom does a judge go this far to punish a lawyer for filing meritless claims. My client is thankful that the judge recognized what this kind of frivolous behavior can cost someone brought to court without good reason,” said Mr. Johnson, whose client was also awarded $465,000. “Lawyers at times forget filing motions and pleadings is not like using Twitter. You can’t just say anything you want when you file a complaint. You can’t say anything you want when you file a summary judgment motion.”
Mr. Zhang, who leased a failing restaurant in the AZA client’s strip mall, originally sought a declaratory judgment in fall 2019 asking the court to find that the lease, guarantee, promissory note, and deed were invalid and unenforceable. AZA’s client filed a counterclaim for breach of contract. Judge Williams granted a summary judgment in favor of AZA’s client and awarded the equivalent of $465,000 (made up of a $240,000 award in damages and interest and the award of a residential property that had been held as collateral and later sold for $225,000). The $150,000 in sanctions included $140,000 for the filing of a groundless lawsuit and an additional $10,000 for two other violations.
The case was featured in the ABA Journal in “Judge sanctions lawyer and client $150K, citing ‘mountain of evasiveness’ and ‘outright lies,’”’ in Texas Lawyer and Law.com in “Texas Attorney and Client Ordered to Pay $150,000 for ‘Outright Lies’ in Court” (subscription required), in Texas Lawbook in “Bellaire Lawyer and Client Sanctioned $150K for Telling ‘Numerous Outright Lies’” (subscription required), and in Law360 in “‘Mountain Of Evasiveness’ Lands Texas Atty $150K Sanction”(subscription required).
“Good cause exists to impose sanctions because this entire lawsuit was premised on a series of demonstrably false claims, and it was filed to harass,” Judge Williams wrote. “In sum, this Court finds that Mr. Zhang and Mr. Rosen abused the judicial process from start to finish. There was no basis in law or fact for Plaintiffs’ claims and defenses, and both Mr. Zhang and Mr. Rosen knew as much throughout this lawsuit.”
The case is Gen Fu Zhang, Limin Wang, and Chichi Chicken, Inc., Plaintiffs, v. Peterson New Territory Investors, LP and Thomas L. Hunt, Substitute Trustee, Defendants in Fort Bend County, 268th court, Cause No. 19-DCV-266793.
AZA, or Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing P.C., is a Houston-based law firm that is home to true courtroom lawyers with a formidable track record in complex commercial litigation, including energy, healthcare, intellectual property, and business dispute cases. AZA is recognized by Chambers USA 2020 among the best in Texas commercial law; by U.S. News – Best Lawyers’ Best Law Firms as one of the country’s best commercial litigation firms for nine years running; was named 2019 Litigation Department of the Year by Texas Lawyer; and was previously dubbed by Law360 a Texas Powerhouse law firm. National corporate counsel named AZA one of the country’s best in client service among law firms serving the Fortune 500.