NEW YORK (Legal Newsline) - A federal appeals court reversed more than $100,000 in sanctions against a lawyer whose client lied under oath and fabricated text messages at the center of a sexual harassment suit, ruling the trial judge failed to find he acted in bad faith.
Sanctions were justified against the client, the Second Circuit Court of Appeals ruled in an Aug. 28 decision, but attorney Daniel Altaras can only be sanctioned if the court issues an explicit finding of bad faith in allowing her to lie and destroy evidence.
Andrea Rossbach was a nurse at Montefiore Medical Center from 2014 until 2018, when she was fired for violating the hospital’s drug and alcohol policy. Rossbach sued Montefiore and employees Norman Morales and Patricia Veintimilla, claiming she was sexually harassed by Morales and fired by Veintmilla in retaliation when she complained.
Rossbach’s case rested on suggestive text messages she said she received from Morales, including one supposedly describing her as “my lil virgin” and another stating “you looked hot today.” But the trial court determined she forged the messages and tried to cover it up by failing to preserve any originals and disposing of the cellphone she claimed to have used to photograph the messages.
At an October 2020 deposition, Rossbach said she received the texts on an iPhone 5 with a cracked screen and “ink bleed” and that she took pictures of them on a new iPhone X. She turned the iPhone 5 over to her lawyer Altaras but Montifiore’s expert couldn’t unlock it with the code Rossbach gave. Montefiore’s forensic expert said the texts weren’t consistent with iPhone formatting and moved to dismiss the case and seek sanctions against Altaras.
Rossbach refused to dismiss the case, however, and later said she actually took pictures of the text “in a moment when the screen was not flickering.” She said the phone couldn’t be unlocked because some time afterward someone dropped it, cracking the screen and causing the “ink bleed” she previously testified had happened before.
After hearing expert testimony, the trial judge said there was clear and convincing evidence Rossbach had committed perjury and destroyed evidence to conceal the fabrication of evidence. The judge held Rossbach and her lawyer liable for $157,000 in defense legal fees and expenses. Altaras had failed to reasonably investigate Rossbach’s story after it became clear she was fabricating evidence, the judge ruled, and delayed proceedings by filing a frivolous cross-motion for sanctions against Montefiore.
“Even after Altaras should have realized that Rossbach’s complaint was based on her false allegations, he stood by” it, the trial judge wrote.
The Second Circuit upheld the dismissal of Rossbach’s case but said the trial judge misapplied the law when it came to sanctions against her lawyer. The sanctions order is based mostly upon his client’s behavior and that requires an explicit finding of bad faith against the attorney.
“Bad faith may be inferred where the action is completely without merit,” the Second Circuit acknowledged, and the trial judge found Alteras acted in bad faith when he learned the case was “fatally flawed.” But the Second Circuit called that an “implicit finding,” not the explicit finding of bad faith that is required to justify sanctions.
“On remand, the able district court may assess in its discretion whether Altaras’s misconduct—including his insistence on defending a complaint founded on obviously fabricated evidence, or other actions—amounted to bad faith,” the appeals court concluded.