Nashef v. AADCO Medical, Inc.

947 F. Supp. 2d 413, 2013 WL 2338109, 2013 U.S. Dist. LEXIS 76150
CourtDistrict Court, D. Vermont
DecidedMay 28, 2013
DocketCase No. 5:12-cv-243
StatusPublished
Cited by4 cases

This text of 947 F. Supp. 2d 413 (Nashef v. AADCO Medical, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Vermont primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nashef v. AADCO Medical, Inc., 947 F. Supp. 2d 413, 2013 WL 2338109, 2013 U.S. Dist. LEXIS 76150 (D. Vt. 2013).

Opinion

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION FOR JUDGMENT ON THE PLEADINGS (COUNTS TWO AND THREE), AND GRANTING IN PART AND DENYING IN PART DEFENDANTS’ CROSS-MOTION TO AMEND COUNTERCLAIM

(Doc. 17, 32)

CHRISTINA REISS, Chief Judge.

Pending before the court are two related motions: a motion for judgment on the [415]*415pleadings for Counts Two and Three of the Verified Counterclaim, filed by Plaintiff Charles Nashef (Doc. 17), and a cross-motion to amend the Verified Answer and Counterclaim to add facts and three additional counterclaims, filed by Defendants AADCO Medical, Inc. (“AADCO”), AAD-CO President and Chief Executive Officer Robert Marchione, and AADCO Vice President Anthony Skidmore (Doc. 32).1

Mr. Nashef filed a Verified Complaint setting forth several claims that arise out of the termination of his employment with AADCO. Defendants filed a Verified Answer and Counterclaim that asserts counterclaims for conversion, breach of contract, and abuse of process. Mr. Nashef moves for judgment on the pleadings with regard to the counterclaims set forth in Count Two (breach of contract) and Count Three (abuse of process) (Doc. 17), contending that he is entitled to judgment as a matter of law in his favor on both of these counterclaims because Defendants have failed to state a claim upon which relief may be granted. Defendants oppose the motion, arguing that both counterclaims are “sufficiently pled” to survive a motion for judgment on the pleadings. (Doc. 30 at 3-6.)

In the alternative and as a separate request, Defendants seek to amend their counterclaims to plead additional facts that Defendants contend would cure the alleged deficiencies in Counts Two and Three. In addition, Defendants seek to add three additional counterclaims for malicious prosecution (Count Four), negligent misrepresentation (Count Five), and a violation of the Vermont Consumer Fraud Act, 9 V.S.A. §§ 2451-2481w (‘VCFA”) (Count Six). (Doc. 32.) Mr. Nashef opposes the motion to amend on the grounds that the proposed amendments are futile. (Doc. 35 at 5-9; Doc. 43.)

The court heard oral argument on February 4, 2013. Mr. Nashef is represented by Stephen D. Ellis, Esq. and Robert D. Mabey, Esq. Defendants AADCO, Mr. Marchione, and Mr. Skidmore are represented by Kerin E. Stackpole, Esq. and Kristina Roomet Brines, Esq.2

1. Factual and Procedural Background.

The following facts are derived from the allegations set forth in Defendants’ Verified Counterclaim. AADCO is a Vermont corporation engaged in the business of designing, manufacturing, and selling medical imaging products. In March 2011, Mr. Nashef was hired as AADCO’s Director of Sales by Mr. Marchione and Mr. Skid-more.

Defendants allege that after Mr. Nashef began his employment with AADCO in February 2011, he failed to perform his job duties in a satisfactory manner. They allege that Mr. Nashefs deficiencies included failing to provide weekly reports of sales and monthly summary sales management reports, both of which are allegedly standard in the industry. Mr. Nashef also allegedly ignored management’s requirements that he review daily and monthly reports from his sales team, which resulted in Mr. Nashefs unawareness of his sales teams’ needs. Defendants further allege that Mr. Nashef “managed his sales team as though he was the sole decision maker,” while ignoring upper management, which “adversely affected not only Mr. Nashefs [416]*416own ability to maximize returns on his [teams, but also] adversely affected others within AADCO.” (Doc. 9 at 11, ¶ 8.) As another example of “disregard of AAD-CO’s management directives,” Defendants claim AADCO approved Mr. Nashefs application for a “Veterinary Trade Show Budget,” but that Mr. Nashef then failed to develop a “Veterinary Market Sales Plan” and failed to garner any subsequent leads from trade shows. Id. at 11, ¶ 9. Although Defendants allegedly attempted to assist Mr. Nashef in improving his performance, Defendants claim that Mr. Nashefs performance did not improve.

Defendants further assert that Mr. Nashef failed to perform certain specific tasks, including registering AADCO products with the Food and Drug Administration (“FDA”). Id. at 11-12, ¶¶ 10-12. Due to his purported experience with lighting, Mr. Nashef was also responsible for obtaining Underwriters Laboratories (“UL”) certification and FDA 510(k) determination of lighting products. Defendants allege that Mr. Nashef assured Defendants that the products were registered or certified when, in fact, they were not, and that Defendants then had to “step in and finish” registration and certification. Id. Finally, Mr. Nashef was assigned to negotiate with certain Chinese manufacturers for the production of some AADCO products, but allegedly failed to complete those negotiations, necessitating the intervention of Mr. Marchione and Mr. Skidmore to complete the negotiations themselves.

As a result of Mr. Nashefs alleged deficiencies in performance, Defendants claim that AADCO could not meet the forecasted sales goals that Mr. Nashef set for 2012. In turn, because of attrition and the adverse impacts on recruitment allegedly caused by Mr. Nashef, AADCO’s sales staff was “cut in half’ within months after Mr. Nashef started as Director of Sales. Id. at 10, 11, ¶¶ 4, 7. In their motion to amend, Defendants seek to add allegations that AADCO had no tangible sales growth in 2011 and that AADCO lost half of its sales team and fifty-four percent of its sales to Original Equipment Manufacturers while Mr. Nashef was Director of Sales.

During his employment, Mr. Nashef was allegedly repeatedly warned in writing that his behavior was unacceptable and that he risked termination if he did not take steps to improve his performance. On May 8, 2012, Mr. Nashef received a written warning from Mr. Marchione for Mr. Nashefs alleged “extreme and disruptive behavior” in response to what Defendants label as “constructive criticism” concerning Mr. Nashefs management of the sales department. Id. at 10, ¶ 2. After Mr. Nashef allegedly failed to alter his conduct, AADCO terminated his employment on August 10, 2012.

After his termination, Mr. Nashef allegedly retaliated against Defendants by failing to return AADCO property, including proprietary and confidential information. In addition, Mr. Nashef filed this lawsuit against Defendants on October 25, 2012. In their motion to amend, Defendants seek to add the allegation that Mr. Nashef “filed and served on [Defendants] a Verified Complaint containing statements Mr. Nashef knew to be false and motivated by Mr. Nashefs desire to exact revenge on [Defendants].” (Doc. 32-1 at 12, ¶ 15.)

II. Conclusions of Law and Analysis.

The court has diversity jurisdiction pursuant to 28 U.S.C. § 1332(a)(1) and thus is required to apply Vermont law to the substantive issues raised by the parties’ state law claims. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); Omega Eng’g, Inc. v. Omega, S.A., 432 F.3d 437, 443 (2d Cir. [417]*4172005); see also Achtman v.

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947 F. Supp. 2d 413, 2013 WL 2338109, 2013 U.S. Dist. LEXIS 76150, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nashef-v-aadco-medical-inc-vtd-2013.