Hayles v. Aspen Props. Grp., LLC

GREGORY HAYLES, Plaintiff, v. ASPEN PROPERTIES GROUP, LLC and WALDMAN,SAGGINARIO & ASSOCIATES, PLLC, Defendants.

1:16-cv-08919-MKV

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

September 28, 2020

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR SUMMARY JUDGMENT

MARY KAY VYSKOCIL, United States District Judge:

Plaintiff Gregory Hayles ("Hayles") commenced a putative class action in November 2016 against Defendants Aspen Properties Group, LLC ("Aspen") and Waldman, Sagginario & Associates, PLLC ("Waldman") (collectively, "Defendants"), alleging violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692 et seq. Before the Court is Defendants' Motion for Summary Judgment. (Mot. Summ. J. [ECF Nos. 95-96].) For the reasons discussed below, the Motion is GRANTED IN PART and DENIED IN PART.

BACKGROUND

A. Factual Background

Defendants did not submit a statement of material facts with their Motion. The Court assumes the parties' familiarity with the underlying facts of this case, which have been stated in detail in prior decisions of the Court (Keenan, J.). (See Opinion & Order ("Second Opinion") [ECF No. 54]; Opinion & Order ("First Opinion") [ECF No. 42].) See Hayles v. Aspen Props. Grp., LLC, No. 16 Civ. 8919 (JFK), 2018 WL 3849817 (S.D.NY. Aug. 13, 2018); Hayles v. Aspen Props. Grp., LLC, No. 16 Civ. 8919 (JFK), 2017 WL 3602027 (S.D.N.Y. Aug. 21, 2017).

B. Procedural Background

On November 16, 2016, Hayles commenced this action against Aspen and its lawyers Waldman under the FDCPA. (Compl. [ECF No. 1].) The Complaint alleged two causes of action. Count I alleged that, in violation of 15 U.S.C. §§ 1692e, 1692e(2), 1692e(10), 1692f, 1692f(1), and 1692g, Waldman inaccurately calculated the amount of late charges and the amount of the debt in the Notice of Default, the Payoff Statement, or both, as sent to Hayles. (Compl. 5-6.) Count II alleged that the first letter Aspen had sent to Hayles omitted the required "notice of debt" and misstated the amount of the debt, in violation of 15 U.S.C. § 1692g. (Compl. 8-9.) Hayles sought to pursue both claims as a class action. (Compl. 5-10.)

On February 1, 2017, Aspen and Waldman moved to dismiss the Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (Mot. Dismiss Compl. [ECF No. 31].) On August 21, 2017, the Court (Keenan, J.) dismissed both counts of the Complaint for failure to state a claim. (First Opinion.) Hayles, 2017 WL 3602027.

On February 6, 2018, Hayles filed a Motion for Leave To File an Amended Complaint. (Mot. Leave File Am. Compl. [ECF No. 47].) The proposed Amended Complaint alleged three causes of action. Count I alleged that the Notice of Default/Acceleration and Intent to Foreclose did not disclose the full amount of the debt that Waldman was attempting to collect, in violation of 15 U.S.C. § 1692g(a). (Mot. Leave File Am. Compl. Ex. A ("Am. Compl.") 6 [ECF. 47-1].) Count II alleged (1) that Waldman did not accurately state in the Payoff Statement the amount of the debt or the amount of the late charges, in violation of 15 U.S.C. § 1692e, 1692e(2), and 1692e(10), and (2) that Waldman included in the Payoff Statement late charges that were not authorized by the contract and were contrary to law, in violation of 15 U.S.C. § 1692f and 1692f(l). (Am. Compl. 8.) Count III alleged that the first letter Aspen had sent to Hayles omitted the required "notice of debt" and misstated the amount of the debt, in violation of 15 U.S.C.§ 1692g(a). (Am. Compl. 9-10.) Hayles again sought to pursue the claims as a class action. (Am. Compl. 7-11.) On August 13, 2018, Judge Keenan denied Hayles's Motion as futile and dismissed all claims with prejudice. (Second Opinion.) Hayles, 2018 WL 3849817.

Hayles appealed from Judge Keenan's two decisions to the United States Court of Appeals for the Second Circuit. On July 22, 2019, the Second Circuit issued a summary order finding that Hayles failed to state a claim against Aspen and Waldman under 15 U.S.C. § 1692g (Counts I and III of the Amended Complaint) but that Hayles alleged sufficient facts to survive a 12(b)(6) motion on his claims against Waldman under 15 U.S.C. §§ 1692e, 1692f (Count II of the Amended Complaint). (Mandate USCA [ECF No. 67].) Hayles v. Aspen Props. Grp., LLC, 782 F. App'x 3 (2d Cir. 2019) (summary order). As to the claims against Waldman under Sections 1692e and 1692f, the Second Circuit found that it was plausible that "late fees" as stated in the Payoff Statement and "late charges" as stated in the Mortgage Note mean the same thing. (Mandate USCA 4.) Accordingly, the Second Court affirmed the judgment of this Court with respect to Counts I and III of the Amended Complaint against Aspen and Waldman and vacated and remanded with respect to Count II against Waldman.

On August 5, 2019, pursuant to Federal Rule of Appellate Procedure 39, Hayles submitted to the Second Circuit a Bill of Costs requesting taxation of costs against Waldman incurred in connection with the appeal. See Appellant's Bill of Costs, Hayles, 782 F. App'x 3 (No. 18-2683), ECF No. 100-1. That same day Hayles also filed a Petition for Rehearing. See Appellant's Petition for a Panel Rehearing, Hayles, 782 F. App'x 3, ECF No. 99-1. The Second Circuit denied Hayles's Petition for Rehearing on August 22, 2020, see Order, Hayles,782 F. App'x 3, ECF No. 106, and awarded Hayles costs in the amount of $1,305.85 on December 12, 2020, see Statement of Costs, Hayles, 782 F. App'x 3, ECF No. 112.

Although the Second Circuit affirmed dismissal of the only claim against Aspen, the parties and Judge Keenan, on remand, apparently proceeded as if Aspen remained a party to this case. The docket reflects at no time did Aspen raise with the Court the issue of its dismissal as a party to this action.

On September 4, 2019, after a status conference, Judge Keenan ordered "Defendants" to file a letter explaining why they felt discovery was unnecessary. (Order [ECF No. 68].) On September 19, 2019, Waldman filed a letter signed by Kelly Kalahar of Waldman with the designation "Attorneys for Defendant." (Letter [ECF No. 71].) That same date, Judge Keenan endorsed that letter and ordered that discovery proceed on the limited issues noted by the Second Circuit—the meaning and calculation of "late fees" in the Payoff Statement and whether the amount exceeded the "late charges" authorized in the Mortgage Note. (Memo Endorsement 2 [ECF No. 72].) The Order directed the "parties" to attend a status conference and "Defendants" to file an answer to the surviving claims of the Amended Complaint. (Id.) The docket entry for the letter endorsement provides due dates for answers by both Defendants. (See ECF No. 72.) Aspen and Waldman each filed an answer on October 3, 2019. (See Answer [ECF No. 73] (Aspen); Answer [ECF No. 74] (Waldman).)

C. The Present Motion

This case was reassigned to me on February 5, 2020. Days later, pursuant to a briefing schedule that had been ordered by Judge Keenan, Defendants filed their Motion for Summary Judgment with seven supporting exhibits. (See Mot. Summ. J. [ECF No. 96].) Defendants did not submit, in connection with this Motion, a Statement of Material Facts, as required under Local Rule 56.1(a). Defendants seek various forms of relief. First, Defendants asks the Court to dismiss this action with prejudice as to Aspen because there is no cause of action remaining against it. (Mem. Supp. Mot. Summ. J. ("Defs.' Br.") 4-5 [ECF No. 97].) Second, Defendants seekssanctions against Hayles and attorneys' fees and costs for Aspen on the grounds that "there was no legal basis for bringing the action against Aspen" and that Hayles "proceeded to prosecute this action" and "refus[ed] to dismiss Aspen" as a defendant after the decision of the Second Circuit. (Defs.' Br. 5-8.) Third, Defendants argues that Waldman is not liable for damages under the FDCPA because Hayles has failed to prove his case as a matter of law. (Defs.' Br. 8-14.) Finally, Defendants also seek sanctions against Hayles and attorneys' fees and costs for Waldman on the following grounds: "(1) continued prosecution of dismissed causes of action and ignoring court orders as to scope of discovery; (2) unprofessional and/or abusive tactics toward Waldman, its counsel, and its witnesses; and (3) generally wasting the time of all parties involved." (Defs.' Br. 15-16.)

In his opposition brief, Hayles first argues that Defendants' Motion should be denied for failure to comply with Local Rule 56.1. (Mem. Opp. Mot. Summ. J. ("Pl.'s Br.") 3-4 [ECF No. 98].) With respect to Defendants' argument for Aspen's dismissal, Hayles responds that Aspen is not a party to this action and that Hayles has never treated Aspen as such. (Pl.'s Br. 17-18.) Hayles also accuses Aspen of making material misrepresentations in its brief to persuade the Court to impose sanctions and award Aspen attorneys' fees and costs. (Pl.'s Br. 19-21.) With respect to the merits of the claims against Waldman, Hayles maintains that he has established an FDCPA violation. (Pl.'s Br. 6-17.) Finally, Hayles asserts that any award or attorneys' fees would be improper because he did not act in bad faith and his claims were aptly supported by caselaw. (Pl.'s Br. 21-25.)

DISCUSSION

A. Aspen Is Dismissed from and Is No Longer a Party to This Action

As a threshold matter, this case is dismissed as to Aspen; indeed, it has been since the Second Circuit issued its summary order on July 22, 2019. (See Mandate USCA.) See Hayles,782 F. App'x 3. The Second Circuit affirmed Judge Keenan's decisions with respect to the dismissal of the claims against Aspen and Waldman under Section 1692g—Counts I and III of the Amended Complaint. (USCA Mandate.) Hayles, 782 F. App'x 3. Count III was the only claim that was asserted against Aspen. The Second Circuit vacated Judge Keenan's decisions only with respect to the claims against Waldman under Sections 1692e and 1692f—Count II of the Amended...