One World, LLC et al v. Manolakos et al
Filing
268
District Judge Julia E. Kobick: MEMORANDUM AND ORDER entered. For the foregoing reasons, the plaintiffs' motion for prejudgment attachment under Federal Rule of Civil Procedure 64 or, alternatively, a preliminary injunction pursuant to Rule 65, ECF 207 , is DENIED. The defendants' request for attorneys' fees in connection with the motion is also DENIED.SO ORDERED. (Currie, Haley)
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
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Plaintiffs,
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v.
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IOANNIS MANOLAKOS, Individually
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and as Trustee of the T.J.S. Manolakos
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Realty Trust; QUICK MANUFACTURING )
CORPORATION; and QUICK
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PROPERTIES, LLC,
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Defendants.
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ONE WORLD, LLC and GABRIEL
CHALEPLIS,
No. 1:20-cv-11837-JEK
MEMORANDUM AND ORDER ON PLAINTIFFS’ MOTION FOR
PREJUDGMENT ATTACHMENT OR A PRELIMINARY INJUNCTION
KOBICK, J.
Plaintiffs One World, LLC and Gabriel Chaleplis brought this action in October 2020
seeking to recover approximately $9 million in allegedly misappropriated funds. They claim that
defendants Ioannis Manolakos, Quick Manufacturing Corporation, and Quick Properties, LLC,
along with others named in separate lawsuits, acted as part of a broad conspiracy to steal those
funds. Pending before this Court is the plaintiffs’ July 2024 motion for prejudgment attachment
or, alternatively, a preliminary injunction. For the reasons to be explained, the plaintiffs’ motion
will be denied. Prejudgment attachment is unwarranted because, on the record presently before the
Court, significant factual disputes exist between the parties that prevent the Court from concluding
that One World and Chaleplis are reasonably likely to succeed on the merits. A preliminary
injunction is unwarranted for the same reason and for the plaintiffs’ failure to demonstrate
irreparable harm, where monetary damages could adequately compensate the plaintiffs for any
potential injuries.
BACKGROUND
I.
Factual Background.
The following facts are drawn from the parties’ evidentiary submissions, including their
exhibits and deposition transcripts, and, for context only, the amended complaint.
Chaleplis formed One World in May 2017 to pursue investment opportunities with, among
others, an individual named Nikolaos Onoufriadis. ECF 75, ¶¶ 37-38. Under One World’s
operating agreement, Onoufriadis served as the company’s sole manager and had signatory
authority over its bank accounts. Id. ¶¶ 53, 74. Onoufriadis also held a 20% membership interest
in One World, while Chaleplis held the other 80% and was “the 100% profit member.” Id. ¶¶ 4849, 52.
Onoufriadis was allegedly the mastermind behind a broad conspiracy involving several
actors—including Manolakos, Quick Manufacturing, and Quick Properties—to misappropriate
over $9 million of the plaintiffs’ funds through improper wire transfers from One World. Id. ¶¶ 6970, 109-10, 130-32, 165-66, 259-62. In March 2018, for example, One World wired Manolakos
$70,948. ECF 209-3, at 5. Manolakos testified that this amount was partial compensation for his
$118,000 loan to Conmave Monoprosopi IKE, a Greek company owned by Onoufriadis’ brother.
ECF 19, ¶ 11; ECF 216-3, at 8, 10 (Tr. at 117:1-8, 122:2-20); see ECF 209-1, 209-2.
Manolakos and Onoufriadis purportedly used the diverted funds to purchase, among other
things, a condominium at 300 Pier 4 Boulevard in Boston, Massachusetts. ECF 75, ¶¶ 153-56. To
buy that condominium, Manolakos agreed to loan Onoufriadis $1,552,651.61 in June 2019; this
agreement was memorialized in a promissory note. ECF 209-8, 216-2. Later, in February 2021,
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Onoufriadis granted Manolakos a mortgage on the property that secured Manolakos’ loan. ECF
209-13. In August 2020, the plaintiffs obtained a lis pendens on the property. ECF 209-11, at 9.
That lis pendens was dissolved in February 2024. See One World, LLC v. Onoufriadis, No. 20-cv11580-JEK, 2024 WL 691412, at *3 (D. Mass. Feb. 20, 2024). Onoufriadis sold the condominium
in July 2024. ECF 209, ¶ 37.
II.
Procedural History.
One World and Chaleplis brought this action in October 2020. ECF 1. In August 2021,
they filed an amended complaint asserting eleven claims against the defendants. ECF 75, ¶¶ 277335. The Court dismissed four of those claims in May 2022. ECF 128. The remaining seven claims
are for conversion (Count I), conspiracy to commit conversion (Count II), aiding and abetting
conversion (Count III), unjust enrichment (Count IV), declaratory judgment that two of
Manolakos’ properties belong to the plaintiffs (Count VII), conspiracy to commit legal fraud
(Count VIII), and aiding and abetting such fraud (Count IX). Id. at 9; ECF 75, ¶¶ 277-95, 301-11.
This case has now been pending for four years, and fact discovery is complete. In July
2024, soon after Onoufriadis sold his Boston condominium, the plaintiffs filed a motion for
prejudgment attachment or, in the alternative, a preliminary injunction, which the defendants
opposed. ECF 207, 215. After granting the plaintiffs’ request for a continuance, the Court held a
hearing on the motion on September 17, 2024. ECF 248, 253. On October 18, 2024, the parties
filed competing motions for summary judgment, with oppositions due thereafter. ECF 260, 264.
DISCUSSION
I.
Motion for Prejudgment Attachment.
The plaintiffs first seek “prejudgment attachment against all funds allocable” to the
mortgage that Onoufriadis granted to Manolakos in February 2021. ECF 208, at 18. Federal Rule
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of Civil Procedure 64 “authorizes use of state prejudgment remedies.” Grupo Mexicano de
Desarrollo S.A. v. All. Bond Fund, Inc., 527 U.S. 308, 330 (1999). It states that, “[a]t the
commencement of and throughout an action, every remedy is available that, under the law of the
state where the court is located, provides for seizing . . . property to secure satisfaction of the
potential judgment.” Fed. R. Civ. P. 64(a). Massachusetts law, in turn, provides that “[s]ubsequent
to the commencement of any action under these rules, real estate, goods and chattels and other
property may . . . be attached and held to satisfy the judgment for damages and costs which the
plaintiff may recover.” Mass. R. Civ. P. 4.1(a). The attachment may be approved “only after notice
to the defendant and hearing and upon a finding by the court that there is a reasonable likelihood
that the plaintiff will recover judgment, including interest and costs, in an amount equal to or
greater than the amount of the attachment over and above any liability insurance shown by the
defendant to be available to satisfy the judgment.” Mass. R. Civ. P. 4.1(c); see also M.G.L. c. 223,
§ 42 (“All real and personal property,” with some exceptions, “may be attached upon a writ of
attachment in any action in which the debt or damages are recoverable, and may be held as security
to satisfy such judgment as the plaintiff may recover[.]”). The plaintiff’s request for prejudgment
attachment must be supported by an affidavit that “set[s] forth specific facts sufficient to warrant
the required findings.” Mass. R. Civ. P. 4.1(h).
The “central question on the motion for approval of attachment is whether plaintiffs are
likely to prevail on the merits and obtain damages in the necessary amount.” U.S. Fid. & Guar.
Co. v. Arch Ins. Co., 578 F.3d 45, 52 (1st Cir. 2009) (quotation marks omitted). “This attachment
relief is available only upon a finding of reasonable likelihood of success.” Sakab Saudi Holding
Co. v. Aljabri, 58 F.4th 585, 604 (1st Cir. 2023). The plaintiffs must therefore “demonstrate (1) a
reasonable likelihood of success on the merits and (2) a reasonable likelihood of recovering
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judgment equal to or greater than the amount of the attachment sought over and above any liability
insurance shown by defendant[s] to be available to satisfy judgment.” Safeguard Props. Mgmt.,
LLC v. Zoll, No. 22-cv-11004-DJC, 2022 WL 16838781, at *1 (D. Mass. Nov. 8, 2022). If
successful, prejudgment attachment “authoriz[es] the seizure of the real and personal property of
the defendant[s] to be held as security for any judgment the plaintiff[s] may recover in the action.”
Mullane v. Chambers, 333 F.3d 322, 329 (1st Cir. 2003).
The plaintiffs here have identified “the amount of the attachment” sought and have shown
that the defendants lack “any liability insurance” to cover that amount. Mass. R. Civ. P. 4.1(c). In
particular, counsel for the plaintiffs represented at the motion hearing that they seek to attach
$1,552,651.61, the amount that Manolakos loaned to Onoufriadis to purchase the now-sold Boston
condominium. See ECF 209-8. In the plaintiffs’ view, because the purchase of the condominium
was part of the defendants’ conspiracy with Onoufriadis, the amount of the loan from Manolakos
to Onoufriadis, secured by the mortgage, is subject to attachment. Defendants’ counsel
acknowledged at the hearing that the defendants lack liability insurance to cover that amount. See
ECF 209, ¶ 27.
The plaintiffs have not, however, established a reasonable likelihood of success on the
merits. Their surviving claims—alleging conversion, unjust enrichment, and fraud—all require
evidence of wrongful conduct. See, e.g., Kelley v. LaForce, 288 F.3d 1, 11-12 (1st Cir. 2002) (“The
tort of conversion requires an intentional or wrongful exercise of dominion or control over personal
property of another by one with no right to immediate possession.” (citing, inter alia, Third Nat.
Bank of Hampden Cnty. v. Cont’l Ins. Co., 388 Mass. 240, 244 (1983))); Columbia Plaza Assocs.
v. Ne. Univ., 493 Mass. 570, 588-89 (2024) (“Unjust enrichment is the ‘retention of money or
property of another against the fundamental principles of justice or equity and good conscience[.]’”
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(quoting Sacks v. Dissinger, 488 Mass. 780, 789 (2021))); Balles v. Babcock Power Inc., 476 Mass.
565, 573 (2017) (“The elements of fraud consist of [1] a false representation [2] of a matter of
material fact [3] with knowledge of its falsity [4] for the purpose of inducing [action] thereon, and
[5] that the plaintiff relied upon the representation as true and acted upon it to his [or her] damage.”
(quotation marks omitted)). So, too, does the declaratory judgment claim seeking ownership of
certain Manolakos properties, because it is premised on Manolakos’ alleged role in the conspiracy.
ECF 75, ¶¶ 302-03; see Chaleplis v. Karloutsos, 579 F. Supp. 3d 685, 706 n.3 (E.D. Pa. 2022)
(explaining, in a related case brought by Chaleplis and One World, that their “request for a
declaratory judgment, even if only applied to the misappropriated funds used toward the down
payments on the respective homes, would still be . . . duplicative of their other requested relief”). 1
The plaintiffs’ theory of the case is that Onoufriadis, as One World’s manager, orchestrated
a conspiracy to funnel money to himself and others, including Manolakos, through unauthorized
wire transfers from One World’s accounts. To support this theory, the plaintiffs must provide
evidence showing, at a minimum, (1) that Onoufriadis engaged in such improper behavior, and
(2) that Manolakos and the other defendants participated in the scheme. As to Onoufriadis, the
plaintiffs have submitted no evidence that he lacked the authority to make the challenged wire
transfers from One World or that those transfers were otherwise invalid. The plaintiffs primarily
cite to the amended complaint, but “[u]nverified allegations in a complaint are not evidence.”
Geshke v. Crocs, Inc., 740 F.3d 74, 78 n.3 (1st Cir. 2014). They further rely on exhibits in the
record, such as bank statements and wire transfers, but those materials, standing alone, are not
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Onoufriadis’ sale of the Boston condominium does not necessarily extinguish his loan from
Manolakos. See HSBC Bank USA, N.A. v. Morris, 490 Mass. 322, 334 (2022) (“[T]he loan—that
is, the underlying indebtedness and promise to repay—may not have ended at foreclosure even if,
by virtue of the foreclosure, the mortgage instrument no longer secures that promise.”).
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sufficient evidence that Onoufriadis acted improperly. For example, even though One World’s
March 2018 bank statement was addressed to Onoufriadis’ attention, it does not indicate that he
initiated the $70,948 wire transfer from One World to Manolakos. ECF 209-3, at 1, 5; see also
ECF 209-16. Instead, the plaintiffs resort to their own interpretation of the exhibits. They assert,
for instance, that the June 2019 loan between Manolakos and Onoufriadis is “phony,” but there is
nothing on the face of the loan itself to support that contention or the contention that the loan was
the product of the plaintiffs’ siphoned funds. ECF 208, at 4-5; see ECF 216-2. Such conjecture is
not evidence. See Town of Westport v. Monsanto Co., 877 F.3d 58, 66 (1st Cir. 2017) (“[J]udges
cannot allow conjecture to substitute for the evidence[.]” (quotation marks omitted)). The plaintiffs
have also submitted a two-page excerpt from Onoufriadis’ deposition transcript in a related state
court action, but that testimony similarly fails to provide evidence of the alleged conspiracy. ECF
209-23; see ECF 208, at 7.
With respect to Manolakos, the parties dispute whether the current, albeit limited, record
evidence shows that he participated in the purported scheme to defraud One World. Setting aside
the allegations in the amended complaint, which again are not evidence, the plaintiffs point to One
World’s $70,948 wire transfer to Manolakos in March 2018 as evidence of his involvement in the
alleged conspiracy. ECF 209-3, at 5. Manolakos testified, however, that he received this transfer
to partially compensate him for his $118,000 loan to Conmave. ECF 19, ¶ 11; ECF 216-3, at 8, 10
(Tr. at 117:1-8, 122:2-20); see ECF 209-1, 209-2. The plaintiffs question why, if that were the
case, he would have received the transfer from One World, rather than Conmave. Whether this
money was a legitimate reimbursement, as Manolakos testified, or the product of a conspiracy
against One World, as the plaintiffs contend, is thus disputed.
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The plaintiffs also rely on Manolakos’ deposition testimony about his loan to Onoufriadis
for the Boston condominium. In their telling, his testimony “confirms the sham nature” of the
mortgage in part because he did not intend to enforce its terms and never charged Onoufriadis late
fees or default interest. ECF 208, at 11-12 (citing ECF 209-14). But the deposition transcript
provides more context. Manolakos testified that he did not ask Onoufriadis when he could expect
the loan to be repaid “[b]ecause [he] knew the condo was an asset, and that when [Onoufriadis]
sold the condo, [h]e would get [his] money back.” ECF 209-14, at 6 (Tr. at 154:2-8). Manolakos
further testified that Onoufriadis would have sold the condominium and used the proceeds of the
sale to repay Manolakos if he defaulted on the loan, because Onoufriadis was a “great” and
“special” friend whom Manolakos had “helped . . . out.” ECF 216-3, at 13, 15 (Tr. at 159:2-15,
191:9-13). Thus, whether the June 2019 loan, and subsequent February 2021 mortgage, were valid
transactions, or rather part of the alleged conspiracy, remains another disputed issue of fact.
Courts routinely deny motions for prejudgment attachment where, as here, “significant
factual disputes” exist between the parties. Bergus v. Florian, No. 18-cv-10323-DPW, 2019 WL
7565458, at *5 (D. Mass. Nov. 21, 2019); see Hayes v. CRGE Foxborough, LLC, 167 F. Supp. 3d
229, 240 (D. Mass. 2016) (collecting cases); cf. Spencer Cos., Inc. v. Armonk Indus., Inc., 489 F.2d
704, 707 (1st Cir. 1973) (affirming denial of preliminary injunction where there was “a major
factual dispute” and “uncertainty whether [the plaintiff] would ever prevail on the merits”). Given
the contested factual issues in this case and the dearth of evidence submitted by the plaintiffs, the
Court cannot conclude, at this stage in the proceedings and based on the current record, that the
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plaintiffs are reasonably likely to prevail on the merits. 2 Accordingly, the plaintiffs’ motion for
prejudgment attachment will be denied.
II.
Motion for a Preliminary Injunction.
The plaintiffs alternatively seek a preliminary injunction to freeze the funds that the
plaintiffs expect will be used to pay off Manolakos’ mortgage. “‘A preliminary injunction is an
extraordinary and drastic remedy . . . that is never awarded as of right.” Voice of the Arab World,
Inc. v. MDTV Med. News Now, Inc., 645 F.3d 26, 32 (1st Cir. 2011) (quotation marks omitted). To
secure a preliminary injunction, the plaintiffs bear the burden to demonstrate: “‘(1) a substantial
likelihood of success on the merits, (2) a significant risk of irreparable harm if the injunction is
withheld, (3) a favorable balance of hardships, and (4) a fit (or lack of friction) between the
injunction and the public interest.’” NuVasive, Inc. v. Day, 954 F.3d 439, 443 (1st Cir. 2020)
(quoting Nieves-Márquez v. Puerto Rico, 353 F.3d 108, 120 (1st Cir. 2003)). The first and second
factors are “the most important.” Gonzalez-Droz v. Gonzalez-Colon, 573 F.3d 75, 79 (1st Cir.
2009). 3
The plaintiffs have not demonstrated an entitlement to preliminary injunctive relief. They
have not, as discussed, demonstrated a likelihood of success on the merits of their claims because,
among other reasons, significant factual disputes remain between the parties. In addition, the
plaintiffs have not demonstrated that they would suffer irreparable harm without an injunction,
2
In a related action, the Massachusetts Superior Court recently denied a materially similar
motion for a preliminary injunction or trustee process attachment because One World and
Chaleplis did not demonstrate “a reasonable likelihood that they will succeed on the merits” in
light of the “highly contested” facts. ECF 216-1, at 2.
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Where, as here, the plaintiffs seek both legal and equitable relief with a sufficient nexus to
the defendants’ assets, an injunction freezing those assets would be within the scope of the Court’s
authority. See, e.g., Iantosca v. Step Plan Servs., 604 F.3d 24, 33-34 (1st Cir. 2010); Faville v.
Munro, No. 22-cv-11911-DJC, 2022 WL 17363511, at *3-4 (D. Mass. Dec. 1, 2022).
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which is, in most cases, “‘a necessary threshold showing for an award of preliminary injunctive
relief.’” Gonzalez-Droz, 573 F.3d at 79 (quoting Charlesbank Equity Fund II v. Blinds To Go, Inc.,
370 F.3d 151, 162 (1st Cir. 2004)). “The general rule . . . is that ‘traditional economic damages
can be remedied by compensatory awards,’” and thus do not constitute irreparable harm. NACMNew England, Inc. v. Nat’l Ass’n of Credit Mgmt., Inc., 927 F.3d 1, 5 (1st Cir. 2019) (quoting
Vaquería Tres Monjitas, Inc. v. Irizarry, 587 F.3d 464, 485 (1st Cir. 2009)). One World and
Chaleplis principally seek to recover millions of dollars from the defendants, who were allegedly
involved in a broad conspiracy to siphon their funds. See ECF 75, at 58; ECF 128, at 1-4. Pointing
to their declaratory judgment claim, however, the plaintiffs contend that they seek equitable relief
as well as monetary damages. But because the requested declaration is duplicative of the plaintiffs’
claims for damages, the plaintiffs’ alleged injuries are “adequately compensable by money
damages.” Ross-Simons of Warwick, Inc. v. Baccarat, Inc., 102 F.3d 12, 19 (1st Cir. 1996); see
Chaleplis, 579 F. Supp. 3d at 706 n.3 (“As Plaintiffs already seek money damages pursuant to their
remaining claims, a declaratory judgment entitling them to any funds used to purchase Defendants’
homes would be ‘redundant with claims already presented.’” (citation omitted)). Nor have the
plaintiffs presented evidence that their “‘potential economic loss is so great as to threaten the
existence of [their] business.’” NACM-New England, 927 F.3d at 5 (quoting Irizarry, 587 F.3d at
485). Where, as here, “an award of pecuniary damages” would make the plaintiffs whole, their
“legal remedy is adequate” and a preliminary injunction is inappropriate. Charlesbank, 370 F.3d
at 162. 4
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In the related action, see supra note 2, the Massachusetts Superior Court likewise concluded
recently that One World and Chaleplis are not entitled to a preliminary injunction in part because
the injunction they sought was “simply in the nature of encumbering money, which is not the type
of injury that constitutes irreparable harm.” ECF 216-1, at 3-4.
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The plaintiffs contend, nonetheless, that they will suffer irreparable harm absent injunctive
relief because there is, in their view, “‘a strong indication that the defendant[s] may dissipate or
conceal assets.’” Pineda v. Skinner Servs., Inc., 22 F.4th 47, 56 (1st Cir. 2021) (quoting Micro
Signal Rsch., Inc. v. Otus, 417 F.3d 28, 31 (1st Cir. 2005)). But the plaintiffs do not point to any
concrete evidence to support that accusation. See ECF 208, at 19. And to establish irreparable
harm, they must rely “on something more than conjecture, surmise, or [their] unsubstantiated fears
of what the future may have in store.” Charlesbank, 370 F.3d at 162; see Warwick, Inc., 102 F.3d
at 19 (“[A] preliminary injunction is not warranted by a tenuous or overly speculative forecast of
anticipated harm.”). The plaintiffs’ speculation that the defendants will abscond with their
allegedly misappropriated funds is insufficient to conclude that they will suffer irreparable injury.
The plaintiffs have not, accordingly, demonstrated an entitlement to preliminary injunctive relief.
CONCLUSION AND ORDER
For the foregoing reasons, the plaintiffs’ motion for prejudgment attachment under Federal
Rule of Civil Procedure 64 or, alternatively, a preliminary injunction pursuant to Rule 65, ECF
207, is DENIED. The defendants’ request for attorneys’ fees in connection with the motion is also
DENIED.
SO ORDERED.
/s/ Julia E. Kobick
JULIA E. KOBICK
UNITED STATES DISTRICT JUDGE
Dated: October 24, 2024
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