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Franco v. Ideal Mortgage Bankers, Ltd.

United States District Court, E.D. New York

November 9, 2017

BIENVENIDO FRANCO, WILLIAM FRASER, and BRIAN McCABE, individually and on behalf of all others similarly situated, Plaintiffs,
v.
IDEAL MORTGAGE BANKERS, LTD., d/b/a Lend America, Inc., HELENE DeCILLIS, MICHAEL PRIMEAU, and MICHAEL ASHLEY, Defendants.

          For Plaintiffs: Erik Harald Langeland, Esq., Erik H. Langeland, P.C., James B. Zouras, Esq., Ryan F. Stephan, Esq., Stephan Zouras, LLP

          For Defendants Ideal Mortgage: No appearance

          Helene DeCillis: Helene DeCillis, pro se

          Michael Primeau: No appearance

          Michael Ashley: Robert H. Weiss, Esq., Law Offices of Robert Weiss.

          MEMORANDUM & ORDER

          Joanna Seybert, U.S.D.J.

         On September 21, 2007, Plaintiff Bienvenido Franco commenced this action, individually and on behalf of all others similarly situated (“Plaintiffs”), alleging that Ideal Mortgage Bankers, Ltd., d/b/a Lend America (“Lend America”) violated the Fair Labor Standards Act (“FLSA”), 29 U.S.C § 201, et. seq., by failing to pay its loan officers minimum wages and overtime. (Compl., Docket Entry 1, ¶¶ 1 & 4.) On October 1, 2009, Plaintiffs amended their Complaint to name as defendants four Lend America officers: Michael Ashley, Timothy Mayette, [1] Helene DeCillis, and Michael Primeau (“Individual Defendants, ” and together with Lend America, “Defendants”). (Sec. Am. Compl., Docket Entry 129, ¶¶ 8-11.) Plaintiffs argue that each of the Individual Defendants had sufficient control over Lend America and its employment practices to render them individually liable under the FLSA. Franco v. Ideal Mortg. Bankers, Ltd., No. 07-CV-3956, 2011 WL 317971, at *1 (E.D.N.Y. Jan. 28, 2011). All Defendants filed Answers, [2] but as discussed below, the matter is stayed as to Lend America. (Docket Entries 134, 153, 155-156, 160; R&R, Docket Entry 227, at 2-3.) This matter is scheduled for trial on November 27, 2017.

         Presently pending before the Court is Ashley's motion to (1) stay the action and remove it from the trial calendar and (2) disqualify Plaintiffs' counsel, or alternatively, hold a hearing regarding whether disqualification is appropriate. (Def.'s Mot., Docket Entry 323, at 1.) For the following reasons, Ashley's motion is DENIED in its entirety.

         BACKGROUND

         I. Lend America's Automatic Stay

         In her July 29, 2011 Report and Recommendation, Magistrate Judge A. Kathleen Tomlinson observed that “an involuntary petition pursuant to 11 U.S.C. § 303 was filed against [Lend America] on November 30, 2010 in the United States Bankruptcy Court for the Eastern District of New York.” (R&R at 2-3.) Judge Tomlinson explained that pursuant to 11 U.S.C. § 362, the bankruptcy petition operates as an automatic stay with respect to actions against Lend America (the “Automatic Stay”). Thus, Judge Tomlinson recommended that this Court deny Plaintiffs' motion for default judgment against Lend America. On September 14, 2011, this Court adopted Judge Tomlinson's Report and Recommendation. (Mem. & Order, Docket Entry 237, at 1.) While the Automatic Stay is in place, Plaintiffs are unable to proceed against Lend America.[3] (R&R at 3.)

         II. Communications Regarding Ashley's Criminal Case

         On August 11, 2011, in United States v. Ashley, Docket No. 11-CR-0516, Ashley pled guilty to an Information charging him with bank fraud under 18 U.S.C. §§ 1334 and 2. While Ashley was awaiting sentencing, [4] Erik Langeland, who together with James Zouras and Ryan Stephan represents Plaintiffs, exchanged emails with U.S. Probation Officer Steven S. Guttman. (Pls.' Opp. Ex. A, Docket Entry 324-1.) Langeland and Guttman discussed whether any Plaintiffs were interested in providing information about their losses in this matter, which Guttman stated would be helpful to the court in sentencing Ashley. (Pls.' Opp. Ex. A.) Thereafter, Plaintiffs' counsel emailed ...


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