Hreish v. Pappas
- Barbara Moses
- 1:24-cv-02284
- U.S. District Court · Southern District of New York
- 6
In Hreish v. Pappas, Judge Moses granted in part plaintiffs’ discovery-sanctions motion, established facts about 13 missing proxies, and ordered defendants to pay related expenses.
The order affects the plaintiffs, defendants Steve Pappas, George E. Kazantzis, and Gregory J. Angelides, and defendants’ counsel. It establishes a fact about 13 ECC stockholder proxies, requires defendants and their counsel to pay reasonable expenses caused by the discovery failures, and extends case deadlines.
What happened
In Hreish v. Pappas, the plaintiffs argued that Steve Pappas, George E. Kazantzis, and Gregory J. Angelides failed to obey an earlier order requiring them to produce documents about an ECC stockholders’ meeting. The dispute concerns control of ECC, but this order addressed discovery sanctions rather than deciding who controls the company.
The court found that defendants had not produced proxies from 13 stockholders listed in the meeting minutes. It ordered that, for this case, defendants are treated as not having received any proxies from those 13 stockholders. The court did not decide on this record whether defendants violated the discovery order regarding other communications or an older stockholders’ list; plaintiffs may ask about those materials at depositions and renew their sanctions motion.
Judge Barbara Moses granted the sanctions motion in part and ordered defendants and their lawyer, together, to pay the reasonable expenses caused by the discovery failures, including attorneys’ fees. She also extended several discovery and expert deadlines, including the close of all discovery to September 22, 2025.
The detailed version
- Hreish v. Pappas · No. 1:24-cv-02284
- Barbara Moses
- June 17, 2025
Background
The plaintiffs—Ghassan Albert Hreish, Jr., Team Group LLC, Daniel P. Bourke, Walter V. Gerasimowicz, and Envirokare Composite Corp.—asked for sanctions under Federal Rule of Civil Procedure 37(b)(2). They alleged that defendants Steve Pappas, George E. Kazantzis, and Gregory J. Angelides had failed to comply with the court’s May 6, 2025 discovery order.
The underlying dispute concerns who legitimately controls ECC. According to minutes of a January 6, 2024 stockholders’ meeting, the three individual defendants removed the three individual plaintiffs from ECC’s board, re-elected Kazantzis, added Angelides, and appointed Kazantzis and Angelides to corporate offices. The minutes stated that the defendants attended with proxies from 43 other ECC stockholders.
Discovery violation
The May 6 order required defendants to produce documents responsive to several requests, including all signed or unsigned proxies concerning the January 6, 2024 meeting. Plaintiffs and defendants agreed that no proxies had been produced from 13 of the 43 stockholders listed in the minutes. The court stated that, unless it assumed the minutes were fraudulent—which it was reluctant to do on the record before it—it had to conclude that defendants failed to preserve and/or produce all the proxies they received. The court therefore found defendants in violation of the May 6 order concerning those proxies.
Plaintiffs also argued that defendants had produced very few documents showing when and from whom the available proxies were received, and very few relevant communications among defendants or between defendants and ECC stockholders. They also pointed to an ECC stockholders’ list called “Exhibit A,” which had not been produced. The court expressed skepticism about the limited production but declined to conclude on the current record that defendants violated the discovery order as to those communications or Exhibit A. Plaintiffs could question defendants about those materials at depositions and renew their sanctions motion if they continued to believe documents were improperly withheld.
Sanctions and other orders
The court granted the sanctions motion in part. Under Rule 37(b)(2)(A)(i), which permits a court to establish facts for purposes of the case when a party disobeys a discovery order, the court ordered that the following fact be treated as established: defendants did not receive any proxies from the 13 listed ECC stockholders concerning the January 6, 2024 meeting.
Under Rule 37(b)(2)(C), the court also ordered defendants and their counsel, jointly and severally, to pay the reasonable expenses caused by defendants’ discovery failures, including attorneys’ fees. The opinion did not set a dollar amount. If the parties could not agree, plaintiffs had to submit a supported fee application by June 24, 2025, and defendants could respond by July 1, 2025, limited to the amount of fees and expenses.
The court further ordered the parties to advise it whether a court-supervised settlement conference would be productive. At the parties’ request, it extended the fact-discovery deadline to July 14, 2025; the expert-evidence deadline to August 13, 2025; the expert-rebuttal deadline to September 8, 2025; and the deadline for expert depositions and the close of all discovery to September 22, 2025. Judge Barbara Moses directed the Clerk of Court to close the sanctions motion.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.