Voutsiotis v. PNC Bank National Association

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF OHIO

EASTERN DIVISION

GEORGE VOUTSIOTIS, et al., ) Case No. 5:23-cv-02305

)

Plaintiffs, ) Judge J. Philip Calabrese

)

v. ) Magistrate Judge James E. Grimes

)

PNC BANK, NATIONAL )

ASSOCIATION, et al., )

)

Defendants. )

)

OPINION AND ORDER

This action arises from an allegedly fraudulent investment scheme that

Plaintiffs claim cost them millions of dollars. Plaintiffs filed suit in State court,

asserting claims under Ohio law. Defendants removed this action to federal court on

the theory that Plaintiffs fraudulently joined a non-diverse defendant, Demetrios

Koutrodimos, to prevent this case from being heard in a federal forum. Plaintiffs

move to remand this matter to State court, arguing that they state colorable claims

against Mr. Koutrodimos, which also entitles them to an award of fees and costs

incurred from the removal proceedings. Defendants oppose returning the case to

State court, request dismissal of Mr. Koutrodimos, and seek an award of their fees

and costs as well.

STATEMENT OF FACTS

A. Allegations in Plaintiffs’ Complaint

Plaintiffs are members of the Northeast Ohio Greek Orthodox community and

investors in Epitome Investment Fund, LP—a hedge fund that Constantine Antonas

created in 2013. (ECF No. 1-2, ¶¶ 1, 38 & 39, PageID #148–49 & 155.) Antonas held

himself out as an investment advisor and represented that his Epitome Investment

Fund would “achieve high risk-adjusted returns” for investors. (Id., ¶¶ 40–41,

PageID #155.) To further his investment scheme, Antonas opened several business

and personal accounts at PNC and received funds from investors in Epitome

Investment Fund by check or wire transfer. (Id., ¶¶ 44, 45 & 47, PageID #156.)

Antonas invested and “typically los[t] most of the [] funds apparently through

incompetence or another unknown motive.” (Id., ¶ 47.) According to the complaint,

he created false brokerage account statements showing positive returns to conceal

the losses.” (Id., ¶ 48.)

Plaintiffs allege that, throughout his relationship with PNC, Antonas worked

primarily with the same employee, Mr. Koutrodimos, who served as his “Relationship

Manager.” (Id., ¶ 49.) Mr. Koutrodimos worked at the PNC branch in Montrose, a

town in Ohio not far from Akron. (Id., ¶ 50.) Antonas and Mr. Koutrodimos were

friends and members of the Northeast Ohio Greek Orthodox community. (Id., ¶ 42,

PageID #155.) Plaintiffs allege that Mr. Koutrodimos knew Antonas was an

inexperienced investor, which “would require greater vigilance over” his accounts.

(Id., ¶ 43, PageID #156.) Mr. Koutrodimos was “required to approve” Antonas’s

transactions and “large withdrawals.” (Id., ¶ 61, PageID #158.)

Over time, Antonas changed his banking behaviors and began transferring

funds in ways that were “inconsistent with usual business practices and did not

match [his] normal pattern of activity.” (Id., ¶ 56, PageID #157.) Examples of this

unusual behavior included: conducting wire transfers to entities with no business

relationship to Epitome Investment Fund, conducting wire transfers through

Canadian banking entities with no ties to United States financial institutions,

receiving large deposits and immediately transferring the funds to accounts with no

ties to Epitome Investment Fund, and executing a series of transactions that each

fell below federal reporting levels individually. (Id., ¶ 57, PageID #157–58.)

Plaintiffs allege that Mr. Koutrodimos knew these activities were “not consistent with

the stated business type of Epitome” Investment Fund. (Id., ¶¶ 64–65, PageID #159.)

As a result of Defendants’ conduct, Plaintiffs lost more than $20 million. (Id., ¶ 126.)

Aside from the general allegation that Plaintiffs lost millions of dollars through

a fraudulent scheme that Antonas ran (id., ¶ 1, PageID #148), the complaint contains

little detail about that scheme. Plaintiffs allege that Antonas’s fraud would not have

been possible without the conduct of PNC and Mr. Koutrodimos. (Id., PageID #149.)

Antonas is now deceased. (Id., ¶ 38, PageID #155.)

B. Additional Facts in Plaintiffs’ Motion to Remand

On October 4, 2021, Antonas committed suicide. (ECF No. 7, PageID #201.)

He did so just before several Plaintiffs planned to meet with him for an accounting of

Epitome Investment Fund. (Id.; ECF No. 7-1, ¶¶ 3 & 4, PageID #213.) Within days

of Antonas’s death, three Plaintiffs (Karvo Companies, G&Y Group, LLC, and George

Karvounides) sued Epitome Investment Fund, another one of Antonas’s companies,

and Antonas’s estate for an accounting of the business and injunctive relief in State

court. (ECF No. 7-1, ¶¶ 6–7, PageID #214; see also Karvo Cos. v. Antonas Capital

Mgmt., LLC, Summit C.P. No. CV2021-10-3176 (filed Oct. 7, 2021).)

During discovery in that suit, documents identified Mr. Koutrodimos as an

individual who “communicated with, and provided services to, Antonas.” (ECF

No. 7-1, ¶ 12, PageID #215; ECF No. 7-4; ECF No. 7-5, ECF No. 7-6; ECF No. 7-7.)

These documents consist primarily of emails showing the following:

• An email from Mr. Koutrodimos to Antonas in April 2017 regarding

fees for wire transfers in February 2017 (ECF No. 7-4, PageID #276);

• Emails in January 2018 between Mr. Koutrodimos and the PNC

branch manager in Montrose regarding clearing a cashier’s check in

the amount of $200,000 from Plaintiff Anna Karvounides that

Antonas wanted to clear (ECF No. 7-5, PageID #279);

• Emails from April 2014 in which Mr. Koutrodimos introduces

Antonas to a woman working to design certain medical instruments

(ECF No. 7-6, PageID #285);

• A presentation of an investment strategy that PNC prepared for

Antonas (ECF No. 7-7, PageID #290).

Each email included Mr. Koutrodimos’s signature block, which reads, “As your

Relationship Manager, I commit to make banking easy for you by delivering

exceptional service.” (ECF No. 7-4, PageID #276; ECF No. 7-5, PageID #278–83; ECF

No. 7-6, PageID #285–88; ECF No. 7-7, PageID #290.)

In that litigation, the plaintiffs deposed Mr. Koutrodimos “for the limited

purpose of trying to ascertain what happened to the funds that had been purportedly

invested in Epitome.” (ECF No. 7-1, ¶ 13, PageID #215.) In his deposition,

Mr. Koutrodimos repeatedly testified that he could not remember any involvement

with Epitome Investment Fund or Antonas. (ECF No. 1-1, PageID #63, #72–73, #102

& #106.) Based on this record, Plaintiffs maintain that Mr. Koutrodimos “was indeed

Antonas’s Relationship Manager” at PNC. (ECF No. 7, PageID #202.)

C. Defendants’ Proffered Evidence

In support of removal, Defendants provide additional evidence. In a

declaration, Mr. Koutrodimos states that while at PNC he never had any role or

responsibility with business accounts and was “exclusively” responsible for personal

accounts. (ECF No. 1-1, ¶¶ 4 & 5, PageID #15.) According to his declaration,

Mr. Koutrodimos was “never a Relationship Manager” for Antonas, and he did not

know whether Antonas had an assigned Relationship Manager at PNC. (Id., ¶¶ 8–9,

PageID #16.) To support this statement, Mr. Koutrodimos relies on his deposition

testimony. (Id., ¶ 9.) When asked whether he was the relationship manager at PNC

for Antonas, Mr. Koutrodimos flatly testified: “I was not.” (Id., PageID #96.)

Consistent with his testimony, Mr. Koutrodimos declares that he had no oversight of

Antonas’s business or personal accounts, and the two men had no professional

relationship. (Id., ¶¶ 11–12, PageID #16.) His professional relationship extended

only to “endeavor[ing] to direct Mr. Antonas to an appropriate contact at the bank,

like [he] would with any other customer.” (Id., ¶ 13, PageID #17.) While

Mr. Koutrodimos and Antonas were members of the same church, they “did not have

a close personal relationship.” (Id., ¶ 14.) Mr. Koutrodimos explained that the

relationship manager text in his signature block was “automatically appended to

every email” he sent. (Id., ¶ 9, PageID #16.)

Further, Mr. Koutrodimos’s declaration aligns with his deposition testimony

from the State court litigation. (ECF No. 1-1, PageID #22–144.) Mr. Koutrodimos

testified that he knew Epitome Investment Fund was an investment business but did

not know any specifics about it. (Id., PageID #57.) Mr. Koutrodimos “knew of”

Antonas, and if he needed help at the bank, Mr. Koutrodimos would “point him in the

right direction.” (Id., PageID #70–71.) But at no time did Mr. Koutrodimos oversee

any of Antonas’s accounts or approve any wire transfers or other transactions. (Id.,

PageID #55, 102, & 106.) In short, the gist of the testimony of Mr. Koutrodimos was

that, though he was aware of Antonas both in the community and at the bank, the

two men did not deal closely with one another personally or professionally.

Defendants also filed the declaration of Steven Pollander, a senior vice

president at PNC. (ECF No. 8.) Pollander stated that the title of “Relationship

Manager” is an “official title and function at PNC.” (Id., ¶ 3, PageID #393.) Pollander

reviewed PNC’s records and determined that Mr. Koutrodimos was never assigned

as a Relationship Manager to any of Antonas’s accounts at PNC. (Id., ¶¶ 5–7, PageID

#394.) Additionally, Mr. Koutrodimos did not open any accounts on behalf of Antonas.

(Id., ¶ 8.) Mr. Koutrodimos was not “required to approve” account transactions for

Epitome Investment Fund or any of Antonas’s other accounts—transactions for

business and personal accounts can be processed by any PNC employee with the

authority to do so. (Id., ¶ 9.)

STATEMENT OF THE CASE

As alleged in the complaint, the individual Plaintiffs reside in Ohio,

Massachusetts, and Florida. (ECF No. 1-2, ¶¶ 2–22, PageID #149–51.) Among

Plaintiffs are some limited liability companies and one corporation incorporated in

Ohio with its principal place of business in Ohio. The complaint does not identify the

citizenship of the principals of two limited liability companies, Carl Goudas and Enzo

Fatigati. (Id., ¶¶ 14 & 22, PageID #150 & #151.) Ordinarily, such an omission would

be fatal to establishing federal jurisdiction. It is not here for three reasons. First,

publicly available information demonstrates that the principals of these two limited

liability companies are citizens of Ohio. Second, even as they attempt to avoid federal

jurisdiction, Plaintiffs do not contend that these individuals are not Ohio residents.

Third, a central allegation of the complaint turns on the relationships between

Plaintiffs and Mr. Koutrodimos in the Greek community in Northeast Ohio, providing

sufficient guarantee that all Plaintiffs, including the members or principals of the

limited liability companies bringing suit, are residents and citizens of Ohio.

Defendant PNC is a national bank and financial services company with its

principal place of business in Pennsylvania. (Id., ¶ 23, PageID #151.) Defendant

Demetrios Koutrodimos is a resident of Ohio. (ECF No. 1-2, ¶ 24, PageID #151; ECF

No. 1, ¶ 7, PageID #4.) Unidentified defendants are not considered when determining

diversity of citizenship. See Alexander v. Electronic Data Sys. Corp., 13 F.3d 940, 948

(6th Cir. 1994). Therefore, the Court disregards the Doe Defendants for purposes of

determining jurisdiction.

Plaintiffs allege that Mr. Koutrodimos knew of Antonas’s fraudulent activities

at PNC and approved wire transfers that caused more than $20 million in damages.

(ECF No. 1-2, ¶¶ 60–66 & 110, PageID #158–59 & 164.) Plaintiffs bring six State-

law claims and none under federal law: violation of the Uniform Fiduciaries Act

(Count I); negligence (Count II); fraud (Count III); aiding and abetting tortious

conduct (Count IV); civil liability for criminal conduct (Count V); and civil conspiracy

(Count VI). (ECF No. 1-2, PageID #159–66.)

Because Mr. Koutrodimos is an Ohio resident, like Plaintiffs, Defendants

acknowledge that there is not complete diversity of citizenship. (ECF No. 1,

¶¶ 11–12, PageID #5.) Nonetheless, Defendants maintain that removal and the

exercise of federal jurisdiction are appropriate based on Plaintiffs’ fraudulent joinder

of Mr. Koutrodimos. (Id., ¶ 27, PageID #9.)

ANALYSIS

Under the law of this Circuit, fraudulent joinder of non-diverse defendants will

not defeat removal based on diversity. See Alexander v. Electronic Data Sys. Corp.,

13 F.3d 940, 949 (6th Cir. 1994). Fraudulent joinder occurs where a complaint names

a party against which there is no colorable cause of action. Walker v. Philip Morris

USA, Inc., 443 F. App'x 946, 951 (6th Cir. 2011) (citation omitted). This standard

requires the absence of a reasonable basis in law or fact for the claims asserted:

There can be no fraudulent joinder unless it be clear that there can be

no recovery under the law of the state on the cause alleged or on the

facts in view of the law . . . . One or the other at least would be required

before it could be said that there was no real intention to get a joint

judgment, and that there was no colorable ground for so claiming.

Alexander, 13 F.3d at 949 (quoting Bobby Jones Garden Apartments, Inc. v. Suleski,

391 F.2d 172, 176 (5th Cir. 1968)); see also Walker, 443 F. App'x at 951.

The removing party bears the burden of proving fraudulent joinder with

particularity supported by clear and convincing evidence. Alexander, 13 F.3d at 949;

Walker, 443 F. App’x at 955 n.7. A defendant may present evidence and not merely

rely on the allegations of the complaint. See Casias v. Wal-Mart Stores, Inc., 695 F.3d

428, 433 (6th Cir. 2012); King v. Centerpulse Orthopedics, Inc., No. 1:05-CV-1318,

2006 WL 456478, at *1 (N.D. Ohio Feb. 24, 2006).

Where a defendant presents evidence to support an argument of fraudulent

joinder, courts in this Circuit employ a procedure akin to proceedings on a motion for

summary judgment to determine whether discrete facts preclude a basis for recovery

against the in-State defendants. Gentek Bldg. Prods., Inc. v. Sherwin-Williams Co.,

491 F.3d 320, 330 (6th Cir. 2007); Walker, 443 F. App'x at 952–53 (discussing

Smallwood v. Illinois Cent. R.R. Co., 385 F.3d 568, 573–74 (5th Cir. 2004) (en banc)).

Because fraudulent joinder arguments arise early in litigation, a summary inquiry

limits the evidentiary procedure outlined to identifying “discrete and undisputed

facts.” Smallwood, 385 F.3d at 573. Additionally, courts consider “unchallenged

factual allegations.” Walker, 443 F. App'x at 953 (quoting Travis v. Irby, 326 F.3d

644, 649 (5th Cir. 2003)). Alternatively, a court may analyze fraudulent joinder based

on the pleadings, construing them in favor of the plaintiff as it would on a motion to

dismiss. Smallwood, 385 F.3d at 573.

Consistent with resolving doubts in favor of remand, however, the Court must

give Plaintiffs the benefit of the doubt on all disputes of fact and any ambiguities in

the controlling State law. Coyne ex rel. Ohio v. American Tobacco Co., 183 F.3d 488,

493 (6th Cir. 1999). Moreover, Plaintiffs’ motive for joining a non-diverse party has

no bearing on the analysis. Jerome-Duncan, Inc. v. Auto-By-Tel, LLC, 176 F.3d 904,

907 (6th Cir. 1999). For these reasons, the burden of demonstrating fraudulent

joinder “is indeed a heavy one.” King, 2006 WL 456478, at *2 (quoting Fields v.

Reichenberg, 643 F. Supp. 777, 779 (N.D. Ill. 1986)).

In Plaintiffs’ complaint, Mr. Koutrodimos is mentioned in four of the six counts:

fraud (Count III), aiding and abetting tortious conduct (Count IV), civil liability for

criminal act (Count V), and civil conspiracy (Count VI). Defendants support their

claim of fraudulent joinder by raising an affirmative defense of immunity under the

Ohio Uniform Fiduciaries Act and by arguing that Plaintiffs fail to allege colorable

claims against Mr. Koutrodimos, especially in light of the evidence in the record.

I. Ohio Uniform Fiduciaries Act

As an initial matter, Defendants argue that Plaintiffs “plead no colorable

claims” against Mr. Koutrodimos because the Ohio Uniform Fiduciary Act immunizes

banks and bank employees from liability unless “‘actual knowledge’ or knowledge of

facts tantamount to bad faith can be pled and proved.” (ECF No. 9, PageID #398 &

#405–06 (citing Ohio Rev. Code § 5815.01 et seq).) In response, Plaintiffs assert that

the “factual determinations” necessary to determine whether this immunity applies

are “unequivocally improper at this stage and ignore the Court’s proper inquiry” on a

motion to remand. (ECF No. 12, PageID #425.)

Immunity under the Ohio Uniform Fiduciary Act is an affirmative defense.

Estate of Barney v. PNC Bank, Nat’l Ass’n, 714 F.3d 920, 925 (6th Cir. 2013). While

a court can grant a motion to dismiss where the undisputed facts “conclusively

establish” an affirmative defense, Hensley Mfg. v. ProPride Inc., 579 F.3d 603, 613

(6th Cir. 2009), an inquiry into fraudulent joinder “must be directed toward the

joinder, not the merits of the action as an entirety,” Freitas v. McKesson Corp. (In re

Darvocet, Darvon, & Propoxyphene Prods. Liab. Litig.), 889 F. Supp. 2d 931, 938 (E.D.

Ky. 2012) (quotation omitted). “[I]f a plaintiff’s claims against diverse and non-

diverse defendants suffer from the same alleged flaw,” meaning that all claims are

susceptible to an affirmative defense, “that indicates not fraudulent intent in the non-

diverse defendant’s joinder, but rather a problem with the plaintiff’s case overall.”

See id. (discussing Boyer v. Snap-On Tools Corp., 913 F.2d 108, 113 (3d Cir. 1990)).

In that scenario, a merits determination is more appropriately left to the State court.

Here, determining whether immunity under Ohio’s Uniform Fiduciary Act

applies would require the Court to “step[] [outside] the threshold jurisdictional issue”

and into the merits of Plaintiffs’ claims against all Defendants. See Boyer, 913 F.2d

at 112. Because resolving Defendants’ argument regarding the Act is intertwined

with the merits of Plaintiffs’ claims, it is not a proper basis in this case for

determining fraudulent joinder.

II. Colorable Claims

Applying the law of this Circuit, the Court turns to assessing the sufficiency of

the claims against Mr. Koutrodimos on the face of the complaint and the evidence

that the parties proffer. See Coyne, 183 F.3d at 493. Defendants argue that

“Plaintiffs failed to state any colorable claim against Mr. Koutrodimos” and that “he

should be dismissed from this litigation and his presence disregarded for

jurisdictional purposes.” (ECF No. 9, PageID #407.)

II.A. Fraud

In Count III, Plaintiffs bring a claim for common-law fraud against

Mr. Koutrodimos. In Ohio, the party asserting fraud must establish six elements:

(1) a representation or, where there is a duty to disclose, a concealment of fact;

(2) which is material to the transaction at hand; (3) made falsely, with knowledge of

its falsity; (4) with the intent of misleading another into relying on it; (5) justifiable

reliance on the representation (by the other party); and (6) an injury proximately

caused by that reliance. Williams v. Aetna Fin. Co., 83 Ohio St. 3d 464, 475, 1998-

Ohio-294, 700 N.E.2d 859, 868 (1998).

II.A.1. Pleading Deficiencies

Under both federal and Ohio law, stating a claim for fraud requires meeting a

heightened standard of pleading with particularity. Fed. R. Civ. P. 9(b); Ohio Civ.

R. 9(B); see also Aluminum Line Prods. Co. v. Brad Smith Roofing Co., 109 Ohio App.

3d 246, 671 N.E.2d 1343, 1351 (1996) (stating that, to satisfy Ohio Rule 9(B), the

complaint must “include the time, place and content of the false representation”). In

the fraudulent joinder context, fraud claims pled without the requisite particularity

are defective and cannot serve as the basis for remand. See, e.g., Larue v. Mortgage

Elec. Registration Sys., No. 1:12-cv-68, 2012 WL 3886876, at *3 (W.D. Mich. Sept. 6,

2012); Miller v. Reminger Co., LPA, No. 3:11-cv-315, 2012 WL 529822, at *3 (W.D.

Ky. Feb. 17, 2012). More generally, conclusory allegations that are insufficient to

state a claim against the nondiverse defendant under State law also fail to overcome

a claim of fraudulent joinder. Miner v. Hirschbach Motor Lines, Inc., No. 1:05-cv-

0703, 2005 WL 1377875, at *1 (N.D. Ohio June 7, 2005) (citing Badon v. RJR Nabisco

Inc., 224 F.3d 382, 392–93 (5th Cir. 2000)); Walker, 443 F. App’x at 952–56 (noting

that the factual insufficiency of a plaintiff’s claim may be a basis for removal based

on fraudulent joinder).

Here, the complaint does not allege that Mr. Koutrodimos committed fraud

against Plaintiffs with the requisite particularity. Plaintiffs do not identify any

specific transactions, dates, false statements, or concealments involving

Mr. Koutrodimos. Instead, the complaint contains only conclusory allegations that

he was engaged in “fraudulent activities to misappropriate investor funds” and was

“required to approve” all transactions. (ECF No. 1-2, ¶¶ 61 & 106, PageID #158 &

#163.) Plaintiffs allege that Antonas lost money “apparently through incompetence

or another unknown motive.” (ECF No. 1-2, ¶ 47, PageID #156.) If Antonas was an

incompetent investor, it is unclear how Plaintiffs could recover from Mr. Koutrodimos

for fraud without specific allegations of his misconduct. On the other hand, if Antonas

had an “unknown motive” to lose the funds, this vague accusation does not attach any

particular unlawful or fraudulent intent to Mr. Koutrodimos.

Plaintiffs’ allegations are also conclusory and grounded in conjecture. Even

taking as true that Plaintiffs lost upwards of $20 million because of Antonas’s

allegedly unlawful conduct—Plaintiffs infer that because Mr. Koutrodimos knew

Antonas personally, was a member of the Northeast Ohio Greek community, and was

employed at PNC that, he must have been involved in the fraudulent scheme.

Plaintiffs’ attempt to accuse Mr. Koutrodimos of “affinity fraud” underscores this

point. (ECF No. 7, PageID #202.) Plaintiffs cannot assume fraudulent intent or other

misconduct from a series of inferences and engage in a formulaic recitation of the

elements of fraud to state a colorable claim against Mr. Koutrodimos—especially

where Plaintiffs have failed to plead the existence of a particular fraudulent scheme

in the most general sense. Ohio law demands more. “Fraudulent conduct cannot be

established by mere conjecture.” Malek, 2020-Ohio-3330, at ¶ 32; Avery v. Rossford,

Ohio Transp. Improvement Dist., 145 Ohio App. 3d 155, 165, 762 N.E.2d 388, 395

(2001) (noting that fraud claims based on conclusory allegations not supported by

material facts are insufficient to state a claim).

In some circumstances, Ohio courts do not apply Ohio Rule 9(B) strictly where

the defendant otherwise has general knowledge of the particulars of the fraud. Even

then, they require meeting the heightened pleading standard. See F & J Roofing Co.

v. McGinley & Sons, Inc., 35 Ohio App. 3d 16, 17–18, 518 N.E.2d 1218, 1220 (1987)

(holding that the fraud allegations were specific enough when the complaint stated

the “time, place, and content of the false representation”). Here, Plaintiffs’ fraud

claim fails to put Mr. Koutrodimos on sufficient notice to “prepare an effective

response and defense.” Id. (citing In re Commonwealth Oil/Tesoro Petroleum Corp.

Secs. Litig., 467 F. Supp. 227, 250 (W.D. Tex. 1979)). Therefore, Plaintiffs’ allegations

of fraud against Mr. Koutrodimos do not support remand.

II.A.2. Summary Inquiry

Beyond the pleadings, both parties proffer evidence to support their positions.

When undertaking a summary inquiry to consider evidence beyond the pleadings, the

Court is not concerned with whether Plaintiffs have evidentiary support for the

merits of their claims. Walker, 443 F. App’x at 956. Instead, a summary inquiry does

not involve a court in resolving factual disputes. Id. at 955. Nor does the court wade

into which party’s “self-serving and conclusory affidavit[s] are truthful and accurate.”

Id. at 956. Mindful of the current procedural posture, Plaintiffs’ failure to plead fraud

with particularity does not necessarily foreclose the possibility that they might

nonetheless be able to state a claim for fraud, making Mr. Koutrodimos’s joinder

proper.

However, this possibility does not mean that the Court must blindly accept

Plaintiffs’ versions of the facts where they are contrary to the overwhelming weight

of the evidence. Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97 (1921). And

remand is not required simply because some facts may be said to be in dispute. See

id. at 98.

Plaintiffs justify Mr. Koutrodimos’s joinder in part on the allegation that he

was Antonas’s relationship manager at PNC. (ECF No. 7, PageID #198–99.) To

support this allegation, Plaintiffs proffer emails from Mr. Koutrodimos’s work

account, which include the phrase “As your Relationship Manager, I commit to make

banking easy for you by delivering exceptional service” in the signature block. (ECF

No. 7, PageID #203.)

In response, Defendants point to the testimony and declaration of

Mr. Koutrodimos and the declaration of Pollander, indicating that Mr. Koutrodimos

was never Antonas’s relationship manager. (ECF No. 9, PageID #401.) Defendants

also point to Plaintiffs’ exhibits which show that Mr. Koutrodimos’s email signature

block was included in all correspondence, even in internal correspondence between

Mr. Koutrodimos and other PNC employees. (ECF No. 9, PageID #401 (citing ECF

No. 7-5, PageID #278).) Rather than dispute that Mr. Koutrodimos did not serve as

Antonas’s relationship manager, Plaintiffs simply ignore it and plead to the contrary.

Plaintiffs do not dispute that Mr. Koutrodimos used that email signature block

in correspondence with individuals who were not his clients. Instead, they argue—

in a footnote—that this statement “conveys a false business relationship to every

recipient.” (ECF No. 7, PageID #203 n.10.) Assuming this argument is not waived,

see Buddenberg v. Estate of Weisdack, __ F. Supp. 3d __, 2024 WL 159001, at *60

(N.D. Ohio Jan. 16, 2024), Plaintiffs do not develop it further. There is no allegation

that Antonas treated Mr. Koutrodimos as his relationship manager nor is there any

other evidence tying Mr. Koutrodimos to any specific fraudulent transaction.

Plaintiffs cannot infer that Mr. Koutrodimos was Antonas’s relationship manager

from the email signature block—especially when they knew that Mr. Koutrodimos’s

role at PNC was limited to personal, and not business, accounts. (ECF No. 1-1,

PageID #71.) Therefore, Plaintiffs cannot use the email signature block to create a

dispute of fact and defeat Defendants’ claim of fraudulent joinder.

Plaintiffs’ other evidence justifying joinder includes emails that

Mr. Koutrodimos sent to Antonas or on behalf of Antonas. Again, there is no

allegation that these emails contained misrepresentations, nor do they tie

Mr. Koutrodimos to any particular fraudulent transaction. At most, as

Mr. Koutrodimos described it, he “point[ed] [Antonas] in the right direction at the

bank,” but had no role in the day-to-day managing of his accounts. (Id.) Without

more, these emails do not create a dispute of fact regarding the limited nature of

Mr. Koutrodimos’s business relationship with Antonas.

Finally, Plaintiffs justify joinder by alleging that Mr. Koutrodimos was

“required to prove” Antonas’s transactions at PNC. (ECF No. 7, PageID #200.)

Plaintiffs provide a list of Antonas’s supposedly “suspicious” activities (id.) but make

no concrete allegation (nor offer any evidence) that ties Mr. Koutrodimos to those

activities (or that Mr. Koutrodimos approved them). Indeed, Defendants’ deposition

testimony and declarations—that Mr. Koutrodimos was never required to approve

any of Antonas’s transactions (ECF No. 1-1, ¶ 22, PageID #19) and that

Mr. Koutrodimos did not assist Antonas with any specific fraudulent transaction (id.,

¶ 23, PageID #19–20; ECF No. 8, ¶ 9, PageID #394)—rebut Plaintiffs’ allegations.

Employees other than Mr. Koutrodimos opened and maintained all of Antonas’s PNC

accounts. (ECF No. 8, ¶¶ 4–8, PageID #394.)

Plaintiffs’ attempts to create disputes of fact based on their pleadings are

unavailing, rebutted by the overwhelming weight of the evidence, and do not support

remand. Wilson, 257 U.S. at 97–98. Defendants have met their burden to

demonstrate that Plaintiffs cannot maintain a colorable claim of fraud against

Mr. Koutrodimos in this summary inquiry.

II.A.3. Possibility of Amendment

Despite Plaintiffs’ pleading deficiencies and Defendants’ evidence supporting

its claim for fraudulent joinder, a few courts in the fraudulent joinder context deem

defective fraud claims to have a “glimmer of hope” because, after remand, the State

court might grant leave to amend the complaint. Murriel-Don Coal Co. v. Aspen Ins.

UK Ltd., 790 F. Supp. 2d 590, 597 (E.D. Ky. 2011); Jones v. Life Ins. Co. of Georgia,

336 F. Supp. 2d 631, 636 (S.D. Miss. 2004) (denying fraudulent joinder because the

“[p]laintiff may simply amend her complaint to plead her [fraud] claims more

specifically”).

But Mr. Koutrodimos need not “negate any possible theory that [Plaintiffs]

might allege in the future: only [the] present allegations count.” Poulos v. Naas

Foods, Inc., 959 F.2d 69, 74 (7th Cir. 1992). Moreover, after discovery and deposition

testimony in the other State case and the opportunity to present evidence in resolving

this motion, Plaintiffs do not possess the facts necessary to plead fraud against

Mr. Koutrodimos under the State or federal heightened standard. If they did, those

facts would be before the Court. When Plaintiffs drafted their complaint, they failed

to set forth any specific factual allegations to state a claim for fraud against

Mr. Koutrodimos. There is “no better admission of fraudulent joinder.” Wakeland v.

Brown & Williamson Tobacco Corp., 996 F. Supp. 1213, 1221 (S.D. Ala. 1998).

II.B. Aiding and Abetting Fraud

In Count IV, Plaintiffs bring a claim for aiding and abetting tortious conduct.

As Plaintiffs admit in their complaint, the Ohio Supreme Court has not yet recognized

a cause of action for aiding and abetting fraud. (ECF No. 1-2, ¶ 117, PageID #165.)

In answering a certified question from the Northern District, the Ohio Supreme Court

held that it has “never recognized a claim” for aiding and abetting tortious conduct.

DeVries Dairy, LLC v. White Eagle Coop. Assn., Inc., 132 Ohio St.3d 516, 2012-Ohio-

3828, 974 N.E.2d 1194, ¶ 2 (2012).

Based on the holding in DeVries, Ohio and federal courts have consistently

concluded that “Ohio does not recognize a cause of action for aiding and abetting a

tortious act.” Spaude v. Mysyk, 2017 WL 9485666, at *13 (N.D. Ohio July 14, 2017)

(collecting Ohio and federal cases). Therefore, Plaintiffs cannot maintain a colorable

claim against Mr. Koutrodimos for aiding and abetting tortious conduct as a matter

of law.

II.C. Civil Liability for Criminal Acts

Section 2307.60 of the Ohio Revised Code provides that “[a]nyone injured in

person or property by a criminal act” can “recover full damages in[] a civil action,”

including attorneys’ fees and costs. Ohio Rev. Code § 2307.60(A)(1). No criminal

conviction is necessary for liability under this statute. See Buddenberg v. Weisdack,

161 Ohio St. 3d 160, 2020-Ohio-3832, 161 N.E.3d 603, ¶ 11. Plaintiffs allege that

Antonas and Epitome Investment Fund committed the criminal act of theft by

deception in violation of Section 2913.02(A)(3) and that Mr. Koutrodimos aided and

abetted this criminal act in violation of Section 2923.03(A)(2).

Section 2913.02(A)(3) provides that “[n]o person, with purpose to deprive the

owner of property or services, shall knowingly obtain or exert control over either the

property or services . . . [b]y deception.” Theft by deception requires a finding of

knowing intent on the part of the accused to deceive and gain control over property

to which it is not entitled. Taylor Excavating, Inc. v. Abele Tractor & Equip. Co.,

No. 3:09CV268, 2012 WL 12894224, at *7 (N.D. Ohio Feb. 10, 2012). This offense

“necessarily requires some fraudulent conduct.” State v. Jacobozzi, 6 Ohio St. 3d 59,

63, 451 N.E.2d 744, 748 (1983).

Plaintiffs attempt to reframe their fraud case under the broad heading of a

claim of civil liability for criminal acts. On this count, Plaintiffs’ pleadings go

something like this: Antonas and PNC committed fraud (stole their money through

deception) and Mr. Koutrodimos assisted that conduct. But the Ohio Supreme Court

attaches liability only if the person would be liable as an active wrongdoer for fraud,

nor merely as an aider or abettor. DeVries Dairy, 2012 Ohio-3828, at ¶¶ 1–2. For the

same reasons the Court determined that Plaintiffs cannot maintain a fraud claim

against Mr. Koutrodimos or for aiding and abetting fraud, there can be no colorable

claim against him for aiding and abetting theft by deception.

II.D. Civil Conspiracy

The Ohio Supreme Court defines civil conspiracy as a “malicious combination

of two or more persons to injure another person or property, in a way not competent

for one alone, resulting in actual damages.” Kenty v. Transamerica Premium Ins. Co.,

72 Ohio St. 3d 415, 419, 1995-Ohio-61, 650 N.E.2d 863 (1995). “A civil conspiracy

claim is derivative and cannot be maintained absent” an unlawful act that is

actionable without the conspiracy. Morrow v. Reminger & Reminger Co. LPA, 2009-

Ohio-2665, 915 N.E.2d 696, ¶ 21 (Ohio Ct. App. 2009); Dickerson Internationale, Inc.

v. Klockner, 139 Ohio App. 3d 371, 380, 743 N.E.2d 984 (Ohio Ct. App. 2000). Here,

Plaintiffs’ civil conspiracy claim is based, in part, on the fraud that Mr. Koutrodimos

allegedly committed. Without a viable fraud claim, however, Plaintiffs’ derivative

claim of civil conspiracy also fails, even without considering the intra-corporate

conspiracy doctrine. See Coley v. Lucas Cnty, No. 3:09-cv-8, 2014 WL 272667, at *9

(N.D. Ohio Jan. 23, 2014).

* * *

Because there is no possibility that Plaintiffs can maintain a claim against

Mr. Koutrodimos, the Court finds that his joinder is fraudulent, intended to defeat

federal jurisdiction. Mr. Koutrodimos was merely an employee of PNC who happened

to know Antonas and share certain affiliations with him. But the record

demonstrates that he was not involved in the conduct of Anotonas and did not commit

any fraud against Plaintiffs. Where parties are fraudulently joined, they are

dismissed from the lawsuit. See West v. Visteon Corp., 367 F. Supp. 2d 1160, 1165

(N.D. Ohio 2005).

Therefore, the Court disregards Mr. Koutrodimos’s citizenship when assessing

whether complete diversity exists. Coyne, 183 F.3d at 493. It is undisputed that

Plaintiffs and PNC Bank are completely diverse and that the amount in controversy

stratifies the requirements of 28 U.S.C. § 1332(a)(1). Accordingly, the Court

DISMISSES Mr. Koutrodimos from this lawsuit and DENIES Plaintiffs’ motion to

remand.

II. Fees and Costs

Both parties request reimbursement for the fees and costs associated with

removal and briefing Plaintiffs’ motion to remand. Plaintiffs request fees and costs

associated with Defendants’ removal attempt under 28 U.S.C. § 1447(c). (ECF No. 7,

PageID #210.) Because the Court denies Plaintiffs’ motion to remand, Plaintiffs are

not entitled to recover their fees and costs. Martin v. Franklin Cap. Corp., 546 U.S.

132, 141 (2005) (recognizing that courts should deny any award of fees where an

“objectively reasonable basis” for removal exists).

Defendants request that the Court exercise its inherent authority to award

them fees and costs because Plaintiffs knew or should have known that “their core

factual allegations against Mr. Koutrodimos were not true.” (ECF No. 9, PageID

#408.) Courts have “inherent authority to award fees when a party litigates in bad

faith, vexatiously, wantonly, or for oppressive reasons.” Big Tank Corp. v. Liberty

Mut. Fire Ins. Co., 125 F.3d 308, 313 (6th Cir. 1997) (quotation omitted). Ordinarily,

however, the Court should consider “whether the conduct could also be sanctioned

under the statute or the Rules rather than [its] inherent power.” First Bank of

Marietta v. Hartford Underwriters Ins. Co., 307 F.3d 501, 512 (6th Cir. 2002) (citing

Chambers v. NASCO, Inc., 501 U.S. 32, 50 (1991)).

Defendants do not make a motion under Rule 11 for sanctions. While that type

of motion is not required per se, Rule 11 applies to all “pleadings and papers.” First

Bank of Marietta, 307 F.3d at 515–17. In contrast, sanctions under inherent

authority “extend[] through the proceedings,” beyond sanctionable conduct under the

Rules. Id. at 517. Given the early stage of these proceedings, Defendants have not

made the necessary showing that Plaintiffs prolonged the proceedings or engaged in

misconduct to warrant awarding fees. Indeed, Plaintiffs crafted their pleadings to

engage in the time-honored practice of forum shopping. Nothing more.

CONCLUSION

For the foregoing reasons, the Court determines that Plaintiffs fraudulently

joined Defendant Demetrios Koutrodimos and DISMISSES him from this lawsuit.

Further, the Court DENIES Plaintiffs’ motion to remand (ECF No. 7).

SO ORDERED.

Dated: July 8, 2024

J.PhilipCalabrese

United States District Judge

Northern District of Ohio

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