Hayles v. Aspen Properties Group, LLC

Background

Gregory Hayles brought a proposed class action under the Fair Debt Collection Practices Act against Aspen Properties Group, LLC and Waldman, Sagginario & Associates, PLLC. The amended complaint asserted three counts. Counts I and III alleged violations of the Act’s debt-notice requirements. Count II alleged that Waldman inaccurately stated the debt and late charges in a payoff statement and included late charges that were unauthorized by the mortgage note or contrary to law.

Earlier, the district court dismissed the claims, and the Second Circuit affirmed the dismissal of Counts I and III, including the only claim asserted against Aspen. The Second Circuit vacated the dismissal of Count II against Waldman and remanded that claim. The parties nevertheless continued to treat Aspen as involved in the case on remand. The present motion was filed by both defendants and sought several forms of relief, including dismissal of Aspen, sanctions and attorneys’ fees and costs, and summary judgment for Waldman on Count II.

Aspen’s dismissal

The court granted summary judgment insofar as Aspen sought dismissal from the action. The court explained that the Second Circuit had affirmed dismissal of the only claim against Aspen, so no claim against Aspen remained. The court directed the Clerk of Court to close the case as against Aspen Properties Group, LLC.

Sanctions and fees sought for Aspen

The defendants sought sanctions against Hayles and attorneys’ fees and costs for Aspen under Section 1692k(a)(3) of the Fair Debt Collection Practices Act. That provision permits an award when an action was brought in bad faith and for harassment.

The court denied summary judgment insofar as Aspen sought attorneys’ fees and costs from Hayles, and declined to impose sanctions. It held that the failure of Hayles’s claims against Aspen did not by itself establish bad faith. The court also found that the defendants offered conclusory assertions rather than sufficient evidence that Hayles filed or continued the action to harass Aspen. The court further stated that counsel’s refusal to sign a notice of dismissal was conduct by counsel, not by Hayles, and that Aspen had failed to alert the court earlier that the appellate decision had ended the claims against it.

Waldman and the remaining FDCPA claim

The court denied summary judgment with respect to Count II of the amended complaint against Waldman. The ruling was based on the defendants’ failure to comply with Local Civil Rule 56.1(a), which requires a summary-judgment movant to submit a separate statement identifying the material facts it contends are undisputed. The court stated that the defendants did not submit that statement and denied the remaining parts of the motion on that basis alone.

The court also declined to independently review the record. It cited the motion’s limited record citations, the defendants’ reliance on deposition testimony without citations, and concerns about the accuracy of portions of the defendants’ submissions. The court therefore did not grant summary judgment to Waldman on the merits of Count II.

Disposition

The motion was granted in part and denied in part. Specifically, the court granted summary judgment insofar as Aspen sought dismissal from the action; denied summary judgment insofar as Aspen sought attorneys’ fees and costs from Hayles; and denied summary judgment with respect to Count II against Waldman. The court also directed the parties to appear for a pretrial conference on October 20, 2020.