PLAINTIFF'S ANSWER TO DEFENDANT,JORGE SCHCOLNIK"S MOTION TO DISMISS.

UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

CASE NO.: 13-20190-CIV-GRAHAM/GOODMAN

　

AMIR A. KAMMONA,

Plaintiff,

v.

ONTECO CORPORATION, DROR

SVORI, HAIM MAYAN, Schcolnik

SCHCOLNIK AND ACTION STOCK

TRANSFER CORPORATION,

Defendants.



PLAINTIFF'S ANSWER TO DEFENDANT,Jorge SCHCOLNIK("Schcolnik"),MOTION TO DISMISS THE COMPLAINT.

Background

The Plaintiff,Amir A Kammona,filed the lawsuit described above on the Defendants on 1/17/2013 for the fraud and/or tort actions that were the cause and/or the proximate cause for the injury to the Plaintiff's ownership, value and rights in the public corporation(Defendant Onteco Corporation).

Memorandum of Law

A-The Defendant claim that the complaint against him should be dismissed or quashed for insufficient process according to Federal Rules Of Civil Procedure("FRCP")12(b)(5).

The Plaintiff answers as follows:

1-The Plaintiff first made service of process on Defendant Onteco Corporation's (The "Company") previous address(19495 Biscayne Blvd.Suite 411 Aventura Florida)which was also what Defendant Schcolnik mentions as his address in his Securities And Exchange Commission ("SEC") filings. Service on that address failed for both the Company and Defendant Schcolnik [EXHIBIT 4] .

Then the Plaintiff noticed that in its 10-k filing with the SEC on 4/16/2013 the Company reported that on 11/8/2013 they changed to a different address. The address of Defendant Schcolnik was mentiond as a care of (c/o) of this new address.

That meant from the first day the Plaintiff filed his complaint until 4/16/2013,when the Company reported that change of address,any service of process attempt on the address reported by Defendant Schcolnik himself in his SEC filings as his current address would have also failed.

According to Defendant Onteco filings "Effective November 9, 2012, the Board of Directors accepted the consent of Mr. Schcolnik as the President, Secretary and Treasurer/Chief Financial Officer" after the resignation of the CEO,Defendant Dror Svorai.In addition,the SEC report filed on 4/16/2013 was signed by Defendant Schcolnik as the "Principal Executive Officer".

2-The Plaintiff arranged for service of process by Front Range Legal Process process server on Defendant Schcolnik at the new address mentioned in that SEC filing as the address of the Company and also the address for Defendant Schcolnik.That address is 2450 Hollywood Blvd, Suite 708 Hollywood, FL 33020.The process server sent me an email regarding the unavailability of that address [EXHIBIT 5].

The Plaintiff then hired a different process serving company called Process services Inc. to attempt service on that same address.After a while the process serving company sent me an affidavit of non-service [EXHIBIT 4 (lower part)].

That meant that service on an address that was mentioned by Defendant Schcolnik as his current address less than 10 days from the date on that email from the first process and 17 days from the affidavit of the second process server address has failed.

In both cases above the service of process failed on that address for both the Company and Defendant Schcolnik.

Nevertheless, the Company filed a SEC report on 5/21/2013,also signed by Defendant Schcolnik as "Chief Executive Officer(Principal Executive Officer) Chief Financial Officer(Principal Financial Officer)", in which it again mentioned the same address as its current address.

It also needs to be pointed out that all these events happened before 5/30/2013 when Defendant Schcolnik resigned from his position with the Company as mentioned in his motion.

3-It should be noted that the service of process address failure in point 1 and 2 is not like any service of process address failure.Unlike a situation where a Plaintiff find a defendant's address from different source,these addresses were provided by the Defendant Schcolnik himself.Furthermore,those addresses were provided in SEC filings where correct information is required.In addition,investors depend on information filed with the SEC and someone with a position like that Defendant Schcolnik had with the company has even more duty to himself to keep shareholders updated with the current and correct address if he cares about being notified about actions taken by shareholders.

4-What emphasizes the importance of keeping correct address by someone with a position in a company like that of Defendant Schcolnik is the fact that on 4/2/2012 the Plaintiff filed Schedule 13d/A with the SEC and in it,at the top of the page, the Plaintiff declared that he intends to file a lawsuit against the Company[EXHIBIT 6].The filing is accessible through the SEC web site www.sec.gov.

5-Also,In an effort to inform the Defendants about the filed lawsuit the Plaintiff used a website to show the complaint filed with the court with the case number and all Defendants listed.In addition the Plaintiff also scanned actual size copies of all the summons issued by the court and also displayed them at that website.The complaint and the court summons are all accessible at the first page on that website.The address of that website is complaintandsummons.blogspot.com [EXHIBIT 8 (showing first page and summon page for the Defendant)] and it has been showing the materials currently on it since 5/6/2013.

6-On 5/9/2013 the Plaintiff filed Schedule 13d in which the Plaintiff declared at the top that a lawsuit was filed and mentioned the case number in addition to the names of all defendants[EXHIBIT 7].The Plaintiff also mentioned the address of website(complaintandsummons.blogspot.com) mentioned in point 5 above.

7-Despite announcing in SEC filing the intention to file a lawsuit then the lawsuit itself as mentioned in point 4 and 7 on 4/2/2012 and 5/9/2013 respectively,the Company kept alleging in all its filings with the SEC that they do not know of any legal proceedings pending or threatened against the company.That continued even after Defendant Schcolnik started signing these reports as the "Principal Executive Officer".Here is what both of the last two SEC reports since Defendant Schcolnik became the Principal Executive Officer filed by the company on 4/16/2013 and 5/21/2013 contain regarding this matter:

"Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties.As of the date of this Annual Report, no director, officer or affiliate (i) a party adverse to us in any legal proceeding, or (ii)has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties".

8-The Plaintiff also tried to communicate through email with defendant Schcolnik. In the past year the Plaintiff sent and received email from the Company using the address info@onteco.com.The Plaintiff used this same email address to send an email containing the Plaintiff's complaint and court summons as attachments.On 5/4/2013 the Plaintiff sent that email to info@onteco.com and jorge@onteco.com,among others[EXHIBIT 3].The Plaintiff received emails confirming the proper delivery of emails directed to those addresses [EXHIBIT 1 AND EXHIBIT 2].

9-Since service on the two most recent company addresses had failed,the plaintiff decided to search for the residential address for Defendant Schcolnik.Then the Plaintiff hired for another process server who later informed the Plaintiff that the Defendant was served at the address the Plaintiff found as the defendant's address.That process server is PPS Services Inc. which is a member of the Florida Association of Professional Process Servers.

10-The Plaintiff had no reason to select this address had he found a different more probable address.

B-The Previous dismissal claim

The Defendant's claim in foot note 1 of the first page of his motion that the complaint was Previously dismissed could be misleading.First,the complaint was dismissed because the Plaintiff himself filed for a voluntary dismissal without prejudice.Second,the Plaintiff did not try to hide that he previously filed a similar complaint and checked the box that indicated it was related to a previous filing when he made this second filing.

C-The insufficient factual allegations claim

Also at the foot notes of the first page the Defendant claims that the Defendant was mentioned only twice and that all of the allegations forming the basis of the complaint happened well before the Defendant joins the Company and therefor had absolutely nothing to do with the Defendant.

First,the complaint is a notice pleading complaint.Therefore not everything can be mentioned.

Second,joining the board of directors of the company is not a simple direct thing but a significant thing that imply other things and can lead to other future things.The Defendant supported the continuation of system that caused substantial and clear fraud and/or tort to shareholders.The former sole director in the board,Defendant Dror Svorai,unjustly took the company from shareholders.By joining the board of directors this Defendant became part of a group using something they do not have the right to use.The unreasonable actions from the board of directors before the Defendant joined the Company were very clear.In addition,as mentioned in point 4 in part A of this motion answer the Plaintiff filed a SEC schedule 13d report on 4/2/2012 in which he declared at the top of first page his intention to file a lawsuit. Moreover, as mentioned in part A the Defendant even reached the highest position possible.Also,from 11/9/2012 to 12/18/2013 the Defendant was the sole member of the board of Directors of the Company(Defendant Onteco Corporation).

Also,at the same day the Defendant became the second board member in the two members board of directors of the Company (8/31/2012) he received a 50000000 (post January 2012 reversed split)shares.

In addition,after the Defendant became part of the board the Company took these additional fraudulent/tortuous steps.

1- Decided to spin off the NexPhase subsidiary into another company.

2- Decided to do share exchange with a private Florida corporation company called Cyber Centers Worldwide Corporation.

3-Did another reverse split.This time the reverse split was at a rate of one share for every two thousands shares.

D-Court Order of 4/9/2013

The Defendant argued in its motion that the Plaintiff failed to comply with the court order of 4/9/2013 and also failed to provide a reason or good cause to the court regarding that failure.

Although the Plaintiff did not see any justification for that order and was taken by surprise by it,he tried to comply with it from the first time he received it.The Plaintiff did not provide the court for good cause not because a good cause does not exist but because FRCP Rule 4(m)states that dismissal of a complaint for not complying with the 120 day time limit to serve the complaint happens "after notice to the Plaintiff" .While the order of 4/9/2013 shortened the 120 day time limit it did not indicate that there will not be a notice to the Plaintiff before it issue a dismissal.That is why the Plaintiff thought that he may need to wait for such notice before explaining his good cause to the court.

This same issue was also raised in Defendant Onteco Corporation's motion to dismiss and was answered with more details there because of the availability of more space for exhibits.

It should be noted that the Defendant failed to comply with FRCP Rule 5(a) by not delivering a copy of this motion to the Plaintiff.The defendant also did not include the Plaintiff in his certificate of service filed with the motion.There is a ground for the Defendant's motion to be considered in effective because of that.

See International Controls Corp. v. Vesco, 556 F.2d 665,669 (2d Cir. 1977)(amended complaint remains inchoate until served under Rule 5(a)).

The Plaintiff was able to find this motion and respond because he used the PACER system over the Internet.

Wherefore the Plaintiff is respectfully requesting that the court either deny the Defendant motion or ,if the court sees that service of process is still required on the address the Defendant alleged as his address in his affidavit,order service on the Defendant by United States marshal or deputy marshal or by a person specially appointed by the court with the cost of that on the Plaintiff.