Background
Frank and Dorothy Merchant deeded a parcel of farmland in Leake County, Mississippi to Frank’s twin brother Billy in 2006—not for safekeeping during Frank’s military deployment, as they initially claimed, but to shield the property from creditors. Over the following decade, plaintiffs repeatedly demanded the Farm back, but Billy never returned it. In July 2016, Billy sold the Farm to their cousin George Harkins. Dorothy, who served as Chancery Clerk of Leake County, promptly discovered the transfer and the couple sued in state court to recover the property. Billy removed to federal court.
Shortly after filing suit, plaintiffs discovered a deed Billy had executed back to them in 2005, which Dorothy had filed away and forgotten. They amended their complaint to add Harkins and allege a conspiracy. The case proceeded to a bench trial, where Billy and Harkins prevailed: the district court found that plaintiffs’ unclean hands—having deeded the property to evade creditors—barred recovery, and that Harkins was a good-faith purchaser for value. The Fifth Circuit summarily affirmed in 2022.
On remand, the district court awarded Billy $172,118.75 in attorney fees under the Mississippi Litigation Accountability Act (MLAA), finding that plaintiffs had sued without substantial justification. The court cited plaintiffs’ failure to investigate their claims, their use of multiple inconsistent and false explanations, their frivolous challenge to diversity jurisdiction, Dorothy’s recording of what she should have known was an invalid deed, their false testimony at trial, and their bad-faith participation in the settlement conference. Plaintiffs appealed the fee award.
The Court’s Holding
The Fifth Circuit affirmed the award of trial-level attorney fees, holding that the district court did not abuse its discretion in finding the lawsuit frivolous under the MLAA. The court rejected plaintiffs’ argument that surviving summary judgment precluded a frivolousness finding, explaining that while surviving a dispositive motion is relevant, it does not foreclose the inquiry. Here, plaintiffs had survived summary judgment only because they misrepresented facts that the district court could not evaluate for credibility at that stage. Once the court held a bench trial and assessed credibility, it found those misrepresentations, revealing that plaintiffs had never had a realistic hope of success.
The court also rejected plaintiffs’ contention that the fee award improperly focused on their underlying creditor-evasion conduct rather than their litigation behavior. The Fifth Circuit clarified that fees were imposed because of plaintiffs’ conduct during the lawsuit itself—failing to investigate, asserting inconsistent and false theories, frivolously seeking remand, and lying under oath—not because they had originally transferred the Farm to evade creditors.
However, the court vacated the $25,000 appellate fee award. Under Federal Rule of Civil Procedure 54(d)(2)(B)(i), a party seeking attorney fees in the district court must move within 14 days of final judgment. Billy’s December 2021 fee motion sought only fees through trial, and his first request for appellate fees came nearly a year after the prior judgment—well after the mandate issued from the first appeal. Because no court order had extended the Rule 54 deadline, and because the district court cannot implicitly vary that deadline by ignoring it, the appellate fee request was untimely and the award could not stand.
Key Takeaways
- Surviving summary judgment does not insulate a party from a later frivolousness finding under the MLAA if the party manufactured factual disputes through misrepresentation—conduct the court can only expose at a bench trial.
- Attorney fees under the MLAA turn on litigation conduct, not solely on the underlying wrongful acts; a party can be sanctioned for how it pursued a claim even if the conduct that gave rise to the dispute was also improper.
- A fee-seeking party must request appellate attorney fees within 14 days of final judgment under Rule 54(d)(2)(B)(i); a motion limited to trial-level fees does not preserve or provide adequate notice of a claim for appellate fees, and a district court cannot tacitly extend the deadline by overlooking it.
- Rule 54’s plain text controls even when its mechanical application produces anomalous results—here requiring a party to prospectively request appellate fees before the opposing party had even noticed an appeal.
Why It Matters
This decision reinforces that Mississippi’s Litigation Accountability Act carries real teeth even in cases that clear early procedural hurdles. Litigants and their counsel cannot assume that surviving a summary judgment motion provides a safe harbor against fee sanctions; where a party survives only by concealing material facts, the frivolousness inquiry remains open after trial. For practitioners handling cases involving creditor-evasion, unclean hands defenses, or disputed deed chains, the decision is a cautionary reminder that prosecuting a claim through litigation misconduct compounds—not cures—the underlying problem.
The court’s treatment of appellate fees also carries practical importance for fee-shifting litigation in the Fifth Circuit. Counsel seeking to recover fees for a prior appeal must either move in this court under Local Rule 47.8 or file a timely Rule 54(d) motion in the district court within 14 days of judgment—and that motion must expressly put both the court and the opposing party on notice of the appellate fee claim with at least a fair estimate. A motion limited to trial-level fees will not suffice, and courts have no discretion to excuse the omission absent a formal order extending the deadline.