Strube Celery & Vegetable Co. v. Ted's Fruit Market, Inc. et al

Filing 1

COMPLAINT filed by Strube Celery & Vegetable Co.; Filing fee $ 350, receipt number 0752-6836556.(Fassett, Mary)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

STRUBE CELERY & VEGETABLE CO.
2404 S. Wolcott Avenue, Units 16-20
Chicago, Illinois 60608
[phone]

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Plaintiff
v.
TED’S FRUIT MARKET, INC.
2840 W. Devon Avenue
Chicago, Illinois 60659
[phone]
and
NICK PAPPAS
2840 W. Devon Avenue
Chicago, Illinois 60659
[phone]
and
ATHANASIOS MEGALOGIANNIS
2840 W. Devon Avenue
Chicago, Illinois 60659
[phone]
Defendants

Civil No. ______________

COMPLAINT
(To Enforce Payment From Produce Trust)
Strube Celery & Vegetable Co. ("plaintiff"), for its complaint against defendants,
Ted’s Fruit Market, Inc., Nick Pappas and Athanasios Megalogiannis, alleges:

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JURISDICTION AND VENUE
1.

Subject matter jurisdiction is based on Section 5(c)(5) of the Perishable

Agricultural Commodities Act, 7 U.S.C. §499e(c)(5) (hereafter "the PACA"), 28 U.S.C.
§1331 and 28 U.S.C. §2201.
2.

Venue in this District is based on 28 U.S.C. §1391 in that (a) plaintiff's claim

arose in this district and (b) defendants reside in this district.
PARTIES
3.

Plaintiff, an Illinois corporation with its principal place of business in Chicago,

Illinois, is engaged in the business of buying and selling wholesale quantities of perishable
agricultural commodities (hereafter "produce") in interstate commerce and was at all times
pertinent herein, a dealer subject to and licensed under the provisions of the PACA as a
dealer.
4.

a.

Defendant, Ted’s Fruit Market, Inc. (“Ted’s Fruit Market”), a

corporation with a principal place of business in Chicago, Illinois, is engaged in the
business of buying wholesale quantities of produce in interstate commerce and was at all
times pertinent herein, a dealer subject to license under the provisions of the PACA as a
dealer.
b.

Defendant, Nick Pappas, was an owner, officer, manager and

director of Ted’s Fruit Market during the period of time in question who controlled the day
to day operations of Ted’s Fruit Market and was in a position of control over the PACA
trust assets belonging to plaintiff.

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c.

Defendant, Athanasios Megalogiannis, was an officer, manager and

director of Ted’s Fruit Market during the period of time in question who controlled the day
to day operations of Ted’s Fruit Market and was in a position of control over the PACA
trust assets belonging to plaintiff.
GENERAL ALLEGATIONS
5.

This action is brought to obtain declaratory relief and to enforce the trust

provisions of P.L. 98-273, the 1984 amendment to Section 5 of the PACA, 7 U.S.C.
§499e(c).
6.

Between December 2011 and January 2012, plaintiff sold and delivered to

defendants, in interstate commerce, $47,363.50 worth of wholesale quantities of produce
which remains unpaid.
7.

Defendants accepted the produce from plaintiff.

8.

At the time of receipt of the produce, plaintiff became a beneficiary in a

statutory trust designed to assure payment to produce suppliers. The trust consists of all
produce or produce-related assets, including all funds commingled with funds from other
sources and all assets procured by such funds, in the possession or control of defendants
since the creation of the trust.
9.

Plaintiff preserved its interests in the PACA trust in the amount of

$47,363.50 by sending invoices to defendants which contained the language required by 7
U.S.C. §499e(c)(4) and remains a beneficiary until full payment is made for the produce.
10.

Despite demand for payment, Defendants have failed and refuse to pay

plaintiff for the wholesale quantities of produce supplied by plaintiff, and have advised
plaintiff they are unable to do so at this time. Defendants tendered three (3) checks in the
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aggregate amount of $26,212.50 to Plaintiff in partial payment for the produce supplied
which were returned by the bank for insufficient funds or otherwise disallowed by the bank.
Plaintiff has incurred $60.00 in bank charges for the insufficient funds checks.
11.

Defendants’ failure, inability to pay and the passing of checks that did not

clear the bank indicate that defendants are failing to maintain sufficient assets in the
statutory trust to pay plaintiff and are dissipating trust assets.
Count 1
(Failure to Pay Trust Funds)
12.

Plaintiff incorporates each and every allegation set forth in paragraphs 1 to

11 above as if fully set forth herein.
13.

The failure of defendants to make payment to plaintiff of trust funds in the

amount of $47,363.50 from the statutory trust is a violation of PACA and PACA
regulations, and is unlawful.
WHEREFORE, plaintiff requests an order enforcing payment from the trust by
requiring immediate payment of $47,363.50 to plaintiff, and for such other and further relief
as the Court deems necessary and appropriate.
Count 2
(Failure to Pay For Goods Sold)
14.

Plaintiff incorporates each and every allegation set forth in paragraphs 1 to

13 above as if fully set forth herein.
15.

Defendants failed and refused to pay plaintiff $47,363.50 owed to plaintiff for

produce received by defendants from plaintiff.

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WHEREFORE, plaintiff requests judgment in the amount of $47,363.50 against the
defendants, jointly and severally, and for such other and further relief as the Court deems
necessary and appropriate.
Count 3
(Unlawful Dissipation of Trust Assets by
a Corporate Official – Nick Pappas)
16.

Plaintiff incorporates each and every allegation set forth in paragraph 1 to 15

above as if fully set forth herein.
17.

Defendant, Nick Pappas, was an owner, officer and director who operated

Ted’s Fruit Market during the period of time in question and was in a position of control
over the PACA trust assets belonging to plaintiff.
18.

Defendant, Nick Pappas, failed to direct the corporation to fulfill its statutory

duties to preserve PACA trust assets and pay plaintiff for the produce supplied.
19.

Defendant, Nick Pappas’ failure to direct the corporation to maintain PACA

trust assets and pay plaintiff for the produce it supplied was an unlawful dissipation of trust
assets by a corporate official.
20.

As a result of said unlawful dissipation of trust assets, plaintiff has been

deprived of its rights as a beneficiary in the produce trust and has been denied payment
for the produce it supplied.
WHEREFORE, plaintiff requests judgment against defendant Nick Pappas in the
amount of $47,363.50, and for such other and further relief as the Court deems necessary
and appropriate.

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Count 4
(Unlawful Dissipation of Trust Assets by
a Corporate Official – Athanasios Megalogiannis)
21.

Plaintiff incorporates each and every allegation set forth in paragraph 1 to 20

above as if fully set forth herein.
22.

Defendant, Athanasios Megalogiannis, was an officer and director who

operated Ted’s Fruit Market during the period of time in question and was in a position of
control over the PACA trust assets belonging to plaintiff.
23.

Defendant, Athanasios Megalogiannis, failed to direct the corporation to fulfill

its statutory duties to preserve PACA trust assets and pay plaintiff for the produce
supplied.
24.

Defendant, Athanasios Megalogiannis’ failure to direct the corporation to

maintain PACA trust assets and pay plaintiff for the produce it supplied was an unlawful
dissipation of trust assets by a corporate official.
25.

As a result of said unlawful dissipation of trust assets, plaintiff has been

deprived of its rights as a beneficiary in the produce trust and has been denied payment
for the produce it supplied.
WHEREFORE,

plaintiff

requests

judgment

against

defendant

Athanasios

Megalogiannis in the amount of $47,363.50, and for such other and further relief as the
Court deems necessary and appropriate.
Count 5
(Interest and Attorneys Fees)

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26.

Plaintiff incorporates each and every allegation set forth in paragraphs 1to

25 above as if fully set forth herein.
27.

As a result of defendants’ failure to make full payment promptly of

$47,363.50, plaintiff has lost the use of said money.
28.

As a further result of defendants’ failure to make full payment promptly of

$47,363.50, plaintiff has been required to pay attorney’s fees and costs in order to bring
this action to require defendants to comply with their statutory duties.
29.

PACA and plaintiff’s invoices entitle plaintiff to recover prejudgment interest

at a rate of 1.0% per month and attorney’s fees incurred to collect any balance due from
Defendants.
WHEREFORE, plaintiff requests judgment against each of the defendants, jointly
and severally, for prejudgment interest, costs and attorneys fees, and for such other and
further relief as the Court deems necessary and appropriate.
Dated this 14th day of February, 2012.
McCARRON & DIESS

By:

/s/ Mary Jean Fassett
Mary Jean Fassett, ID#9078552
4530 Wisconsin Ave., N.W.
Suite 301
Washington, DC 20016
[phone]
[phone]-fax
[e-mail]

LAW OFFICES OF WILLIAM B. KOHN

By:

/s/ William B. Kohn
William B. Kohn, #6196142
150 N. Wacker Drive
Suite 1400
Chicago, Illinois 60606
[phone]
[phone]-fax
[e-mail]
Attorneys for Plaintiff

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