$55K Sanctions Related in Part to AI-Hallucination-Filled Court Filings

"Though referred to the Alabama State Bar for any disposition it deems appropriate, the undersigned regrettably recommends" that the lawyer "be found incompetent to practice law."

An excerpt from the 12K-word opinion in Heimkes v. Fairhope Motorcoach Resort Condo. Owners Ass'n, Inc., decided Tuesday by Judge Terry Moorer (S.D. Ala.):

Attorney Franklin Hollis Eaton, Jr. filed several pleadings which contained fabricated citations and false statements of law that he failed to check or correct prior to submission. The Court had already discovered problems with Mr. Eaton's filings when Defendant filed its first motion flagging numerous misstatements of law. The Court then issued two show cause orders regarding the misstatements, which were partially acknowledged by Mr. Eaton, though he has failed to fully and accurately address the Court's numerous concerns despite as many opportunities to do so.

From the outset, the Court notes that this case is not just about Mr. Eaton's most recent misstatements of law, but rather about a pattern of conduct throughout this case that raises significant concerns about his competency to practice law. In sum, the misstatements and misrepresentations were just the final straw. After a careful review of the matter, the Court finds that Mr. Eaton's conduct amounts to bad faith. Therefore, the Court SANCTIONS him under Rule 11, Alabama R. 3.3, and the Court's inherent authority and ORDERS as follows:

1. Attorney Franklin Hollis Eaton, Jr. is hereby REPRIMANDED and this reprimand shall be published as follows:
   1. Attorney Franklin Hollis Eaton, Jr. shall file, not under seal, a copy of this Memorandum Opinion and Order in any case in any court wherein he has appeared as counsel and final judgment has not been entered;
   2. Attorney Franklin Hollis Eaton, Jr. shall file, not under seal, a copy of this Memorandum Opinion and Order in any case in any court wherein he appears as counsel for twelve (12) months after the date of this order;
   3. Attorney Franklin Hollis Eaton, Jr. shall provide a copy of this Memorandum Opinion and Order to any jurisdiction in which he is licensed to practice law within two (2) business days of the issuance of this order. He shall further file a notice of compliance with the Court no later than the third business day from the date of this opinion.
   4. The Clerk of Court shall send a copy of this Memorandum Opinion and Order to the General Counsel of the Alabama State Bar for review. Though referred to the Alabama State Bar for any disposition it deems appropriate, the undersigned regrettably recommends that Attorney Franklin Hollis Eaton, Jr. be found incompetent to practice law.
   5. The Clerk of Court shall send a copy of this Memorandum Opinion and Order to the Chief Judges for the Northern District of Alabama, the Middle District of Alabama, and the Southern District of Alabama.
   6. To further effectuate the reprimands and deter similar misconduct by others, the Clerk of Court is DIRECTED to submit this order for publication in the Federal Supplement.
2. Franklin Hollis Eaton, Jr. shall pay attorney fees in the amount of $55,597.00 to Defense counsel for their time spent addressing Mr. Eaton's misstatements of law.
3. Pursuant to S.D. Ala. GenLR 83.4(a) and (h)(1), the undersigned refers to the Judges of the Southern District of Alabama a review of Franklin Hollis Eaton, Jr….

The court begins by pointing to a wide range of past behavior by Mr. Eaton:

This opinion is the result of the cumulation of numerous issues regarding the conduct of Attorney Franklin Hollis Eaton, Jr. ("Mr. Eaton"). First, near the outset of this case, Mr. Eaton failed to include a jury demand in both complaints. Though he later stated during the scheduling conference that he wanted a jury, he still failed to make the proper request. The Court laid out a roadmap early on for how Mr. Eaton should proceed to demand a jury, yet he failed to follow it. While not sanctionable, this was the first instance where the Court saw Mr. Eaton display a lack of diligence.

Next, the Court notes that Mr. Eaton kept running into problems with co-counsel, to the point where they would seek to withdraw. Correspondence between Mr. Eaton his co-counsel also indicated that Mr. Eaton would file motions over their objections or would place their signature on the motions without consent.

The next incident demonstrating Mr. Eaton's lack of diligence which came to the attention of the Court was when Mr. Eaton failed to engage with counsel for Defendant in drafting and contributing to the joint pretrial document, as required by the Court's standing pretrial order. See The Court could have dismissed the case at that point, but it chose not to, so as not to punish the clients for Mr. Eaton's lack of diligence, again.

As for trial, Mr. Eaton informed the Court at the pretrial conference that he anticipated that he would need "two days […] [i]f not less" to present the liability portion of the case. Mr. Eaton ultimately took approximately 12 days to present his case, 6 times the estimate he provided during the pretrial conference.

As the Court reflects on the trial, it agrees that Mr. Eaton's liability portion should have only taken approximately two days in the hands of competent counsel. Yet, Mr. Eaton appeared [at] trial woefully unprepared—so unprepared, in fact, that the Court found it needed to impose time limits to Mr. Eaton's questioning of witnesses to keep things moving. Prior to imposing the time limits, which the Court was loathe to do, the Court mentioned the plodding, rambling, unfocused, nature of the examinations in hopes that Mr. Eaton would keep things moving and on task. Mr. Eaton often appeared unsure of what questions to ask the witnesses that he chose to call during his presentation of the evidence, instead coming up with questions on the fly and going on a fishing expedition for information which seemed largely irrelevant to the case at hand.

In many instances, several minutes would pass between the witnesses answering a question and Mr. Eaton asking the next question. It appeared that he called witnesse[s] simply because they appeared in the gallery to watch, and to serve as discovery for his related state cases. Mr. Eaton's lack of preparedness at trial resulted in substantial delays that, quite frankly, wasted the Court's time.

Even before, and certainly by the conclusion of trial, the Court had increasing concerns about Mr. Eaton's competency to practice law. The Court opted not to consider sanctions at those prior junctures because the case was almost over and the Court did not want the poor and ineffective advocacy infecting the merits of the case. In fact, the Court was able to rule on the merits of this case after the bench trial, without any sanction issues impacting the ruling.

In this sanction opinion, though, the Court must consider what has transpired during the course of this case. After the conclusion of the bench trial, the Court's concerns mounted when Mr. Eaton made several misstatements of law and misrepresentations to the Court, which were the subject of the Court's show cause orders and which the Court will now address in detail.

On July 15, 2025, Mr. Eaton filed a response in opposition to the Defendant's motion for directed verdict. The Court noticed blatant discrepancies in his citations and began a review.

Defense counsel also noticed the issues but moved faster on the record than the Court did. Defendant filed a motion to strike the response and a motion for sanctions, noting several misrepresentations of the law and citations to cases that do not exist.

In light of the seriousness of the issues, the Court continued its independent search related to the citations at issue. Regarding the cases that allegedly do not exist, the Court's search revealed the same problems identified by Defendant in its motion and the allegations made by the Defendant were correct: the cases either do not exist, citations did not go to the referenced names, and/or the cases did not relate to the issues at hand. For the cases that relate to misrepresentations or false quotations, the search did not fare any better for defending the use of those citations in the manner and context given. Finally, the Court reviewed each citation provided by Mr. Eaton in the pleading at issue and found additional misstatements of the law not noted by Defendant. [Further details omitted. -EV] …

[W]henever the Court expresses issues with the timeliness of Mr. Eaton's filings, Mr. Eaton often blames an illness that he claims often prevents him from working. Mr. Eaton again, during trial held during the Summer of 2025, claimed that the same illness prevented him from being fully prepared to try this case that had been lingering since 2022. He claims his mysterious illness prevented him from properly demanding a jury, which resulted in this case being tried as a bench trial rather than a jury trial. He claims this illness prevented him from fully complying with discovery orders and from being able to efficiently question witnesses that he chose to call at trial—unnecessarily dragging out proceedings far beyond the number of days he stated he would need to try the case.

The Court concludes at this point that Mr. Eaton demonstrates an unwillingness or inability to meet the minimum standard of competence to practice law. He has demonstrated incompetence throughout these proceedings, which have ultimately culminated in numerous misrepresentations of the law, as outlined in this Court's previous show cause orders….

The Court … has no difficulty finding that Mr. Eaton's misconduct was more than mere recklessness. The Court notes that errors can happen in filings despite attorneys' (and even judges') best efforts. Yet the insertion of bogus citations and misrepresentation of authorities is not a mere typographical error, nor the subject of reasonable debate. It is just wrong. The Court tried, in two separate show cause orders, to bring Mr. Eaton's attention to the various issues with the authorities he cited. And, despite filing numerous responses, Mr. Eaton never fully addressed all of the Court's concerns or corrected all of the misrepresentations.

He further failed to participate in this process by showing up to the first show cause hearing entirely unprepared, and then repeatedly requesting continuances and creating excuses for why he was unable to attend future hearings. The Court finds that Mr. Eaton is either lying about his health situation or, if true, he is no longer capable of practicing trial law and should file for disability. Thus, the Court will impose an appropriate sanction under the various authorities the Court has at its disposal….

The court then concluded that Mr. Eaton should paid the defendants for their time spent dealing specifically with his "misstatements of law" (not the other misconduct that the court had discussed as part of the background of the case):

Defendant claims its attorneys expended a total of 218.9 hours of work in this matter, which includes 83.6 hours by Mr. Dunagan, 33.6 hours by Mr. Harrell, and 78.7 by Mr. Lawley, 1.1 hours by Ms. Wolf, 17.6 hours by Ms. Baker, and 4.3 hours by Ms. Oakes. The accounting of the attorney and paralegal work that was performed in this matter includes a description of the work performed, amount of time expended to perform the work, the date the work was performed, the hourly rate, and the total amount billed for the described work based on the hourly rate and time expended.

Each time entry provides a detailed description of the specific work that was performed, and there are no instances of block billing. While 218.9 hours may initially seem like a lot, the Court spent a similar amount of time addressing the various misstatements of law by Mr. Eaton between cite checking everything, drafting orders, and reviewing Mr. Eaton's responses to the show cause orders. Thus, the Court is acutely familiar with the amount of time it took to address this particular issue and finds that 218.9 hours is reasonable, as the Court staff similarly spent countless hours reviewing these matters….

Defendant requests an hourly rate of $205 for Mr. Dunagan and Mr. Harrell, $359 for Mr. Lawley, $190 for Ms. Wolf and Ms. Baker, and $110 for Ms. Oakes…. The Court finds the hourly rates that were charged are all reasonable. In fact, all of the rates charged in this matter are lower than the rates that this Court has more recently found to be reasonable….