AG plans suit against Hathaway

The Hathaway Homes lot on Lewisville Highway in Idaho Falls is seen on Tuesday. The Idaho Attorney General’s Office has prepared a a consumer protection lawsuit against Hathaway Homes Group that seeks to shut the business down but the lawsuit is on hold because of bankruptcy proceedings. John Roark/ jroark@postregister.com

The Hathaway Homes lot on Lewisville Highway in Idaho Falls is seen on Tuesday. The Idaho Attorney General’s Office has prepared a a consumer protection lawsuit against Hathaway Homes Group that says consumers reportedly suffered hundreds of thousands of dollars in losses due to Hathaways’ actions. John Roark/ jroark@postregister.com

A recent filing in U.S. Bankruptcy Court indicates the Idaho Attorney General’s Office prepared a complaint against Hathaway Homes Group that would permanently put it out of business if successful, but it is on hold because of bankruptcy proceedings.

These details are contained in an obscure filing requesting relief from an automatic stay.

During bankruptcy proceedings, an automatic stay is put in effect to halt debt collection and lawsuits. That stay has held up the consumer protection suit against Hathaway Homes Group and owner Paul Hathaway.

The state Attorney General’s Office declined to comment on Hathaway Homes Group, citing an ongoing investigation.

Earlier this month, Attorney General Lawrence Wasden, Consumer Protection Division Chief Brett DeLange and Deputy Attorney General Stephanie Guyon asked to be removed from that stay so they could pursue a consumer protection case against Hathaway Homes Group.

The filing indicates that a draft complaint has been prepared and was communicated to Hathaway Homes Group shortly before its November bankruptcy filing. The draft complaint isn’t attached to the filing, but it indicates the complaint includes charges that Paul Hathaway and Hathaway Homes Group:

• Made false or misleading statements about the safety of customers’ down payments.

• Made false or misleading statements to customers about ordering homes from manufacturers.

• Failed to perform the work necessary to ensure homes were delivered on time.

• Made false or misleading statements to customers about why homes were delayed.

• Ignored requests to perform obligated warranty work.

• Failed to pay subcontractors, resulting in liens against customers homes or customers having to pay contractors directly after they had already paid Hathaway.

• Ignored customers’ requests for refunds of their down payments after Hathaway breached their contracts.

“As a result of Hathaway Homes Group’s alleged violations of the (Idaho Consumer Protection Act) and the (Idaho Rules of Consumer Protection), consumers reportedly suffered hundreds of thousands of dollars in losses,” the filing states. “If Hathaway Homes Group is allowed to continue operating in violation of (consumer protection laws), it will injure additional customers.”

The case only covers violations going back to 2015, according to the filing.

As recently as Sunday night, Hathaway customers called the Post Register saying Paul Hathaway was demanding that they transfer large sums of money to him.

Attorney General’s Office Spokesman Scott Graf said the matter is ongoing so the office would refrain from comment at the present time.

According to the filing, the Attorney Generals’ Office is seeking a declaration that Hathaway Homes Group violated the law, an injunction prohibiting the company from doing any business related to factory-built homes, an order revoking its license to do such business, and an order to pay $5,000 in civil penalties for each individual violation of the Idaho Consumer Protection Act.


Reporter Bryan Clark can be reached at 208-542-6751.


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