PROVIDENCE — The state Supreme Court yesterday upheld a fine imposed on a lawyer for filing a legal document that, without sufficient basis, accused another lawyer of fraud.

In a foreclosure case, lawyer Lidia M. Sanchez filed a pleading that accused lawyer Steven A. Murray of writing “NSF,” meaning “not sufficient funds,” on checks from Sanchez’s clients.

In 2004, Superior Court Magistrate Joseph A. Keough imposed a $2,000 fine on Sanchez for violating a rule that calls for signed legal documents to be “well grounded in fact.” Keough concluded that Sanchez made her allegation in writing “without proper judgment and necessary regard for the truth or falsity of the statement she was making.”

And in yesterday’s ruling, the high court said, “We discern no grounds to disturb the magistrate’s findings that Ms. Sanchez jumped to a hasty and incorrect conclusion, without any basis in fact, that Mr. Murray committed an act of fraud by writing ‘NSF’ on the checks.”

The opinion, written by Justice Paul A. Suttell, explained that the issue arose in a case pitting Pleasant Management LLC vs. Maria Carrasco and her husband, Jose Ortega.

Pleasant Management bought a Providence tenement house owned by the couple at a tax sale conducted by the Narragansett Bay Water Quality Management District. In March 2002, an agreement was reached that would let the couple get the property back for $5,300, which was to be paid in monthly installments of $200. If the couple missed any payment, Pleasant Management could file for an entry of default, eliminating the couple’s right of redemption.

In March 2003, Pleasant Management sought a default judgment when two installment checks had bounced. But before the hearing, Carrasco called Murray — Pleasant Management’s lawyer — and asked him to redeposit the two checks. Murray agreed to do that.

Assuming the matter was settled, neither the couple nor their lawyer, Sanchez, appeared at the April 2003 hearing, and a default decree ended up being entered against the couple, ending their right of redemption.

On May 2003, the couple filed a motion seeking to wipe out the default judgment, arguing that they didn’t attend the hearing because they relied on Carrasco’s phone conversation with Murray. When that motion was rejected, the couple appealed. And while the appeal was pending, the Supreme Court sent the case back to Superior Court for Pleasant Management to seek sanctions against Sanchez.

In legal papers, Sanchez had written that Murray “claims that he deposited the checks and that they were not paid because there were not sufficient funds to cover the checks for February and March. However, on the face of the checks there is a written notation made NSF, which was not made by the bank but was in fact made by (Murray).” Also, Sanchez had said that her clients “claim that the order to enter judgment was entered by (Murray) by fraud and without any basis.”

In seeking sanctions against Sanchez, Pleasant Management noted testimony showed that bank employees wrote “NSF” on the checks — not Murray.

Sanchez maintained that she had “reasonably investigated the allegations.” She said she had spoken with a branch manager at the bank and had been told that it was “not appropriate” for a bank employee to handwrite “NSF” on a check. She argued that that information “permitted the inference that Mr. Murray himself signed ‘NSF’ on the check.”

But the magistrate concluded that Sanchez “alleged tampering with an instrument by a member of the bar without any basis in fact and put all the parties through the so-called ringer without any basis.”

The Supreme Court upheld the magistrate’s ruling, saying, “The word ‘fraud’ has a specific and especially pernicious meaning in a juristic vocabulary.” While a lawyer has “a duty on behalf of his client to advance all arguments zealously, he also [has] a duty to advance those arguments in good faith, without factual misrepresentations, and after proper consideration,” the court stated.

efitzpat@projo.com