In Borough of Englewood Cliffs v. Trautner, the Appellate Division has just decided a case of first appellate impression—whether the Frivolous Litigation Statute, N.J.S.A. 2A:15-59.1 and related R. 1:4-8 permit the award of sanctions for a frivolous suit brought by a municipality. Holding that the statute and rule apply to any party, including a municipality, the court went on to affirm the trial court’s decision that a legal malpractice suit brought by the Borough of Englewood Cliffs was frivolous.

The circumstances of the case are a not untypical local political dispute. The town sued for declaratory judgment that it had satisfied its affordable housing obligation. A developer intervened and counterclaimed for a builder’s remedy. Despite the advice of the town’s attorney to settle, the case went to trial and the developer won. A post-trial settlement between the town and the developer resolved the number of affordable units to be built and related issues.