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M.T. Real Estate Investment Inc. v. Servis One, Inc., et al.

U.S. District Court, District of Nevada · D. Nev. · Nevada bar guidance

Court sanction

Verified May 14, 2026

Citation
M.T. Real Estate Inv. Inc. v. Servis One, Inc., No. 2:25-cv-01372-GMN-DJA (D. Nev. Dec. 30, 2025) (Navarro, J.)
Decided
December 30, 2025

Summary

Plaintiff M.T. Real Estate Investment Inc. sued Servis One, Inc. (dba BSI Financial Services) and Mortgage Electronic Registration Systems, Inc. in the District of Nevada. Plaintiff's counsel, Bryce Finley, filed Responses to the defendants' motions to dismiss and to strike that cited five legal authorities the court could not locate. After an order to show cause, Finley admitted the five authorities "were not in fact real" and "were the product of artificial intelligence," which he contended his paralegal had used. District Judge Gloria M. Navarro found that Finley violated Rule 11(b)(2), holding that the duty to verify cited authority cannot be delegated to a subordinate. The specific generative-AI tool was not identified in the order.

AI tool:
Unspecified generative AI
This case summary is informational only. Verify the underlying opinion or order against the primary source before relying on it in any filing or client matter.

What sanction did the court impose?

The two Responses containing the fabricated citations (ECF Nos. 38, 39) were stricken. The court awarded defendants BSI and MERS their reasonable attorney's fees and costs incurred researching and replying to those Responses, ordered Finley to serve the order on his client, and directed the Clerk of Court to serve a copy on the Nevada State Bar Association, of which Finley is a member. The dollar amount of the fee award was left to be determined by stipulation or, failing that, a later motion for fees.

Why does M.T. Real Estate Investment Inc. v. Servis One, Inc., et al. matter for law firms using AI?

For a managing partner at a small or mid-size firm, M.T. Real Estate is a reminder that the cost of an unverified AI-assisted brief is not bounded by the monetary sanction. Once the court strikes the filing and refers counsel to the state bar, the firm carries a disclosure obligation on every future malpractice renewal and pro hac vice application, regardless of the eventual disciplinary outcome. Documenting a verification step in the firm’s AI use policy, signed off before any brief leaves the office, is cheaper than the audit trail a referral creates.

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From the blog

Sources

Primary sources

Further reading

Source PDF is a Westlaw printout mirrored from the Damien Charlotin hallucination database. We are working to add the underlying court docket (PACER, CourtListener, or court website) as a second source.

Unverified claims:
  • Exact dollar amount of the attorney's fees and costs award not set in the order; the court directed the parties to confer and, failing a stipulation, to litigate the amount through a later motion for fees.