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Pappas v. Medas

United States District Court, N.D. Ohio, Eastern Division

June 24, 2019

PETER PAPPAS, ET AL., Plaintiff,
JOHN G. MEDAS, ET AL., Defendant.


          CHRISTOPHER A. BOYKO, United States District Judge.

         This matter is before the Court on Plaintiffs' Motion to Dismiss the Counterclaim. (ECF #16). For the foregoing reasons, the Court denies Plaintiffs' Motion.

         On July 3, 2018, Plaintiff Peter Pappas and his minor daughter E.P. filed their Complaint in this Court, alleging Breach of Fiduciary Duty under the Employment Retirement Income Security Act (“ERISA”), Civil RICO under 18 U.S.C. § 1964, Retaliation in violation of the Fair Labor Standards Act (“FLSA”) and Ohio law, Failure to Pay Timely Wages under Ohio law, Ohio Corrupt Practices Act violation, Civil Conspiracy under Ohio law, Intentional Infliction of Emotional Distress, Fraud and Conversion in violation of Ohio law, Breach of Implied Contract, Promissory Estoppel and Unjust Enrichment against Defendants. On December 27, 2018, Defendants filed their Answer and Counterclaim. The Counterclaim is brought on behalf of Defendants GPSI Properties, LLC., FMI Products, LLC. and Fulton Properties of Ohio, LLC. Defendants' Counterclaim alleges a single claim for Tortious Interference with Business Relations and seeks damages in the amount of $2, 000, 000.00.

         Background Factual Allegations of Plaintiffs' Complaint

         According to Plaintiffs' Complaint, Plaintiff Peter Pappas became General Manager of Defendant Fulton Manufacturing Industries, LLC in 2004 and later served as General Manager for the other related Defendant companies. As General Manager, Pappas reported to Defendant John G. Medas. During his employment, Pappas was covered under Defendants' group health insurance. The health plan required employees to pay a portion of their health insurance premiums. Defendants withheld the employee-owed health insurance premiums from employee paychecks. Medas and FMI Companies were responsible for sending the health insurance premiums to the health insurance provider. Sometime in 2016, Defendants stopped sending the premium payments to the insurance provider but continued withholding the premiums from employee paychecks.

         Plaintiff E.P. is Peter Pappas' minor daughter who was insured under the FMI health insurance plan. E.P. suffers from severe and progressive scoliosis and in 2016 required surgery on her spine. Her surgery was scheduled for October 2016 but in September 2016 Pappas discovered his health insurance had been cancelled because Defendants stopped paying the premiums. As a result E.P.'s surgery was delayed until 2017.

         In 2017, Defendants fell behind in paying their employees. When Pappas complained, Medas fired him.

         Factual Allegations of Counterclaim

         According to Defendants' Counterclaim, Defendants are all Ohio limited liability companies with GPSI providing equipment and tooling for the manufacture of electrical terminals used primarily in cars and FMI using the equipment and tooling of GPSI to produce electrical terminals. Plaintiff Peter Pappas was employed by Defendant FMI as an Engineering Manager. In 2017 Pappas was employed by FMI as its General Manager.

         In February of 2018, GPSI received an offer to purchase some of its equipment and tooling for Connector ID, LLC., which was operated by Jim Pasquale. Around this time, GPSI's President, John Medas, became aware that Pappas was failing to perform his duties as Manager by failing to order raw material to satisfy customer orders, failing to respond to customer quote requests and knowingly processing customer orders at prices below the correct pricing. According to Defendants, Pappas was undermining FMI's business by creating losses that would negatively impact the value of FMI's business assets, in particular the terminal product line. This was done to interfere with the potential sale to Connector ID, LLC. at a fair price.

         Pappas informed Medas he was quitting FMI on October 30, 2017. On November 8, 2018, Pappas asked Medas to be reinstated as an employee of FMI. Medas agreed and Pappas returned to work at FMI through February 17, 2018, when Pappas was discharged for threatening Medas and for his continued efforts to undermine the business of FMI. Subsequently, Pappas, in concert with Pasquale, attempted to purchase the same GPSI assets that were the subject of the potential sale between GPSI and Connector ID, LLC. The offer was rejected and Pappas made a number of allegations against Defendants in an affidavit to have a receiver appointed. He then attempted to purchase the same assets of FMI. Defendants allege these acts constitute tortious interference.


         Standard of Review for Fed.R.Civ.P. 12(b)(6)

         In deciding a motion to dismiss under Fed.R.Civ.P. 12(b)(6), the court must accept as true all of the factual allegations contained in the complaint. Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). ...

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