Paul Hathaway

Paul Hathaway leaves the Federal Building and United States Courthouse in Pocatello after U.S. Bankruptcy Judge Jim Pappas ordered that Hathaway’s former company, Hathaway Homes Group, be liquidated.

Hathaway Homes Group will never again do business in Idaho — legally, anyway.

A court decision last week, following a lawsuit from the Idaho Attorney General’s Consumer Protection office, permanently banned Hathaway Homes Group, a former St. Anthony-based dealer of manufactured and modular homes, from doing business in Idaho.

The company’s former owner, Paul Hathaway, could be next to lose the right to do business. He will stand trial later this year.

The lawsuit, filed last fall, seeks to permanently enjoin Hathaway Homes Group and Paul Hathaway himself from engaging in business in Idaho.

Both the company and Hathaway are listed as defendants in the complaint.

Last week, Fremont County judge Alan C. Stephens granted a default judgment on the state’s complaint against Hathaway Homes Group. During court proceedings, no one appeared on behalf of the company. Therefore, the state requested a default judgment, meaning the court defaults to the plaintiff’s request.

Hathaway is no longer involved with Hathaway Homes Group, which is most likely why nobody appeared on behalf of the company. Hathaway was terminated from his position by a U.S. bankruptcy trustee, who took over the company when bankruptcy proceedings began last year.

The complaint alleges Hathaway and his business engaged in a “pattern or practice of unfair or deceptive acts or practices,” including misleading responsible consumers, contradictory representations, wrongfully permitted liens and failure to deliver on promises to consumers.

Hathaway Homes Group has a well-documented history of consumer complaints.

More than a dozen former customers told the Post Register in recent years they were treated unfairly by Hathaway Homes Group. They said Hathaway cheated them in one way or another.

Hathaway Homes Group customers said they gave Hathaway large upfront down payments for homes that were never delivered, were different than the homes customers ordered or were delivered long after the promised date.

Some said they were left destitute and homeless after their dealings with Hathaway.

Unfair, misleading and deceptive business practices

The state’s consumer protection complaint against Hathaway and Hathaway Homes Group alleges that he and the business engaged in a number of unfair, misleading and deceptive business practices.

Those alleged practices are as follows:

— Hathaway failed, in multiple instances, to manufacture or procure consumers’ homes within a reasonable time, following a down payment and issuance of a purchase document. He also misled consumers into believing he would deliver their homes within specific or reasonable times, when Hathaway knew he could not follow through on those time frames. And he gave false reasons for his failure to deliver homes within reasonable times.

— Hathaway misled consumers into believing he had ordered their new homes when, in fact, he had not completed the ordering process. He failed, in multiple instances, to install homes in a manner that allowed consumers to promptly move in.

— Hathaway engaged in a pattern or practice of incorrectly delivering or installing homes.

“Multiple customers never received correct delivery or installation of their homes,” the complaint says.

— Hathaway also failed to repair — or facilitate the repair of — any damages to consumers’ homes within a reasonable time from the delivery and installation of the home.

— Hathaway failed to pay contractors, who provided contract services to consumers’ homes. When contractors weren’t paid, they filed liens against consumers’ homes.

“(Hathaway’s) unfair, misleading and deceptive business practices caused consumers to lose hundreds of thousands of dollars, which consumers likely never will recover because of (Hathaway’s) bankruptcies,” the complaint says.

Hathaway, reached by phone, declined to comment on the complaint.

Bankruptcies

Typically, an automatic stay would have prevented the state from filing a lawsuit against Hathaway until the bankruptcies were completed. In this case, a U.S. Bankruptcy Court judge granted the state relief from automatic stay, giving it authority to pursue its complaint during Hathaway’s bankruptcy proceedings.

Hathaway Homes Group and All Terrain LLC (another company that Hathaway owned) and Hathaway himself are undergoing Chapter 7 bankruptcy liquidation.

Recent court documents show continued liquidation efforts. Wells Fargo moved to repossess Hathaway’s office in St. Anthony. And auctions are being held for property that Hathaway owned through his businesses.

The liquidations are attempting to repay the millions of dollars of debts that Hathaway owes to his former creditors, the largest of which (about $3.8 million) is owed to TAG Lending in Utah.

According to an April 2018 court disclosure document, creditors had unsecured claims against Hathaway and his businesses totaling more than $8.2 million.

Hathaway on trial

A court trial, which will decide whether Hathaway himself will be banned from Idaho business, is set for the fall.

In a response to the complaint, Hathaway, through his legal counsel Maynes Taggart PLLC, denied the majority of the state’s claims. That could be some indication of how Hathaway will proceed in the case.

But Maynes Taggart will no longer represent Hathaway. The law firm withdrew as attorney of record in January “based upon the grounds that the defendant and counsel have differing opinions on how to proceed in this matter,” according to court documents.

Maynes Taggart did not comment on why it withdrew, citing attorney-client confidentiality.

A court trial is set for Sept. 4 in Fremont County.

Reporter Ryan Suppe can be reached at 208-542-6762. Follow him on Twitter: @salsuppe.

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