Assignee of note and mortgage brought third-party claim against lender’s attorney/ settlement agent for misapplication of loan proceeds. Lender requested copies of the attorney/settlement agent’s closing files and bank records substantiating disbursement of the loan proceeds. Attorney/settlement agent moved to dismiss the claims, moved to reargue the denial of dismissal and moved for a protective order to quash assignee’s discovery demand. The Court granted the assignee’s cross-motion for sanctions under local rules and assessed $5,000 in sanctions against the attorney/settlement agent. The attorney/settlement agent had a fiduciary duty to ensure the loan proceeds were disbursed in accordance with the lender’s instructions and had a fiduciary duty to account to the assignee for the loan proceeds deposited into his account as settlement agent. The attorney/settlement agent’s motions were therefore frivilous and in bad faith.