HomeMy WebLinkAbout96-01916
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Ill, I'llIintitl' l'ristillo WIIS hired by Forbes Chevrolet. Inc. liS II lhlltime slIlesperson on or
IIbout Febrlmry I. 1993 IIml wus terlninlltcd by Forbes Chevrolet. Inc, on or IIbout
August 3. 1995,
II, I'llIintill' I'epperd WIIS hired by Forbes Chevrolet. fnc, on or ubout Junullry II. 1994 liS
II full time slllesperson nnd worked liS II Ii. II time sulesperson IiII' Forbes until on or
IIbout December 20. 1994.
12, When I'lnintifTs were hired the terms of their compensntion were explllined to them
by George Forbes IInd by Chnrlie Stone. sules munnger of Forbes Chevrolet. fnc, The
terms were us follows:
u) I'luintill's were to be puid u 20% commission on the profit of every vehicle
sold;
b) 20% of gross profit on finuncing;
c) 20% of gross profit on life I nccident & henhh insurllnce;
d) 20% of the 1% holdbnck per new vehicle;
c) $20 nnt pnyment on extended wnrrllnties bonns for selling n previous
demo;
I) $25 mini den I if the delllership did not mllke II profit on the denl;
g) $100 bonus for 10 sules during II clllendnr month;
h) $10 bonus on snles II through 14 in II clllendllr month;
i) $60 bonus on the 15111 unit;
J) $10 on 16 through 19 units; und
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k) n $C>O bonns on the ;l(l'" unit,
I) I'lninlif1's' monthly "dmw" wns $1(lOU euch, Commissions exceeding
$1000 enmed dnring n cnlendar month were due und J1a)'uhle 10 I'lninlif1's
on the 15'" of the lhllowing monlh. If I'luintif1's did nol eUIll $1 (lOO in
conllllission per monlh, they wonld receive their dmw, less uny charge-
backs and olher reductions, If I'lnintif1s eamed more thun $1000 in
commission per monlh (i.e, $1050) , they would receive the amounl in
excess 01'$1000 (i.e, $50), less 11Il)' churge.lmcks nnd olher reductions,
m) I'luintil1s' commission would be reduced according to the umount of
"charge-backs" which occurred whcnever a vehicle which had becn
tinnnced through thc dealership was sold or transfcrred or the tinancing
wus otherwise paid ofT prior to its expectcd cxpiration,
15, ()cfcndnnt requircd Plaintiffs to work betwccn 45 - 55 hours pCI' week,
16,l'laintifl's were pnid on a commission basis, with a $1000 monthly "dmw,"
Commissions IiiI' ench culendar month werc due und puyable on the IS'" of the
lilllowing cnlendur month.
17, ()elcndunt sold whnt wcrc term cd "program curs," curs thai wcre u ncw or reccnt
modcl yen I' hut hnd been uscd us p1ll1 of n lIeet such us rentnl curs UI' us n demo, The
aCluul price of lhe progmm curs which wus puid hy Forhes wus nol disclosed to
I'luintifl's, I'luintifl's thus were not uhle to determine whether they were gelling 20%
of the tme gross protit onlhese sules,
18, With rcspcct to thc rccords Illllinwincd hy Dcti:ndllnt, IIpUl1ion uf cllch IIIllI cvcry onc
of Plllintitl's' cOllllllissiun slips hlld II cut-uulpUl1ion which, if Icll in, would indiclllc
thc IIctual gross prufit uf ncw IInd uscd vchiclcs suld,
19, Dcli:ndllnt clllcullltcd II cOllllllissiun using II COlllpliclltcd Illcthod of "chnrgc-bllcks",
"drnws", 1Illlllldvanccs, hnndwrittcn on thc hottolll of thc COlllputcr shccllo arrivc III
I'llIintill's' slllllry without rcfi:rcncc to thc gross profil Iigurcs which wcrc cui out of
thc cOlllmissiun shcct.
:W, In FcbJ'llllry of 1995, it bccllmc cvidcnt to I'llIintifl's thllt Dcfi:ndllnt WIIS nol
pcrforming IIccording to thcir IIgrccmcnt, On Fcbrullry 15, 1995 thc dcalcrship
cvidcntly inadvcrtcntly allowcd thc gross prolit purtiun to rcmain in Anthuny
Cristillu's cUlllmission slip,
21. Thc plllintill's, whcn thcy commcnccd work lor Dcli:ndllnt, wcrc induccd h}' the
dcfendants through thc promiscs and rcprcscntations uf its duly 1I11lhori1.cd olliccr,
Geurgc Forbcs, and Salcs Mllnagcr, Chllrlic Stonc, acting within thc scopc of his
authurity, to IIcccpt cmploymcnt with thc com pliny and to bc pllid according to thc
IIbovc salcs commission IIgrccmcnt liS opposcd to IIny hourly, salary, or othcr
cOlllpcnslltion pllln,
22, The plllintifl's, lit all tillles prior tu their tcrminlltion, perlill'lllcd their cnd of the
IIgrccmcnt slllislilctorily IInd mude nUIllCI'OUS monthly vehicle sllles lor the dcnlcrship,
23, Thc plnintifl's, to thcir detrimcnl, relied on the prollliscs nnd rcprcscntlltions of
Dclendllnt inllcccpting clllploymcnt with Forhcs IInd IIcccpting thcir pllychccks liS filII
29, ()elcnonnl George Forbes nno Forbes Chevrolel, Inc" thmngh its ollkers nno ngents,
were nwnre of the gross vehicle prolits, ()clcnonnts nctivdy nno knowingly
conccnlcd thc nll10unt of thosc prolils from Plnintitl's by rcmoviug n portion of
Plnintitl's' commission stntemeuts; by keeping records under lock nuo senlnwny from
Plninlitl's; by oeslroying rccoros; nno by mislcnoing Plnintitl's on thc issucs of prnlil
on cCl1nin progrnll1, uscd, nno spccinllll'fnngcmcnt vchidcs.
30. ()clcnonnts Ihcrcby mislco Plnilllill's to bclicvc Ihnl prolils wcrc Icss 111IIn in rcnlity.
Bccuusc I'lnintifl's' commission wcrc busco on ()cfcnonnt's prolits, Plninlitl's wcrc
mislcd into bclicving thcy wns bcing pnid n commission in nccordnnce with thcir
cmploymcnl ngrccll1cnt.
31. PlnintifTs justilinbly rdicd on thc rcprcscnlntions mnde by ()elcndnnts on thc
commission shccts which documcnlcd vcbicle snles nnd sct forth u P1ll1inllimlluln for
cnlculnting their cOll1mission sulnry, Plnintitl's hnd no belleI' wny of knowing thc truth
of Dcfcndnnt's proHt on cnch nnd cvcry progfllm, usco, nnd mini dcnl vchiclc solo,
32, Plnintitl's wcrc hnrll1cd in their rdinncc upon Dclcndnnt's nsscrtious of thc nmount
owing 10 thcm onlhc commission stntcmcnts inthnt Plnilllifl's wcrc owco n fitI' grclllcr
dolinI' nmount nccording to the ngrccmcnt sClling forth thc mnnncr of his
compcnsntion whcnthcy bcgnn work for Forbcs Chcvrolct,
33, ()cfcnonnts' nctions in intcntionnlly withholding this inlimllntion from Plnintitl's uno
in dcstroying ooculllcnts which would rc\'cnlthis iulimllntion is outrngcous in
chnfllctcr,
41, In ordcr to bc cligiblc for rccciving thc bonus lill1ds. nn cnrollcd sulcspcrson gcncrnlly
mnst muintnin continuous cmploymcnt ut thc cnrollcd OM dcnlcr for thc cntirc c1uss
ycnr.
42. 'Illc $25,00 dcnlcr portion of thc program, howcver, wns not tnkcn from Forbcs
Chcvrolct. Inc.'s funds. but rathcr wns takcn from PlnintilTs' commission, Icnving
thcm with $25,00 Icss in commissions on cach cligiblc cnr sold,
43, Bccnusc nonc of Plnintill's finishcd thc cntirc clnss ycnr liJr thcir Inst ycnr of
cmploymcnt, thcy will forfeit thosc limds contributcd townrd thc program in thcir
1111I11C.
44,lllcsc funds arc nctually commission funds which thcy cnnlcd undcr thc contract
arrnngcmcnt with Forbcs Chcvrolct, fnc, and havc bccn convcrtcd from thcm through
thc Carccr Buildcr program,
45. Whcrcforc, Forbcs wrongfully wi:hhcld $25,00 in commission from cach cligiblc
vchiclc salc from PlaintifTs and thcn, upon tcrminntion of thc cmploymcnt
rclntionship, prcvcntcd PlaintifTs Irom rccovcring thcsc canlcd fimds,
46, This is in contravcntion of thc ngrccmcnt cntcrcd into by Plnintill' and Dcfcndnnts
conccnling thc tcrms of compcnsntion, ns well as the tcrms of the program cstnblishcd
by Gcncrnl Motors nnd hns injurcd PlnintifTs by withholding cvcn furthcr moncy Irom
thcm and dcnying thcm thc bonus duc undcr thc OM plnn.
47. PlnintilT Millcr is uniqucly harmcd in that hc was not rc-cnrollcd in thc Cnrccr
Buildcrs progrnm in Octobcr of 1994. nor ntnny timc thercnl\er.
48, Thc progml11 allows for u tmnster of bonus lil11ds nndcr Iimitcd circumstanccs,
I'luintitl' Millcr mct thosc rcquircmcnts ncccssary tor bcing allowcd to trunsfcr bonus
timds if hc hud bccn cnrollcd by Forbcs. whcn hc Icll Forbcs and bccumc cnrollcd
with unothcr Chcvrolct dculcr in thc GM Curccr Buildcr prugmm,
49. In Scptcmbcr of 1995, whcn Millcr commcnccd work for Sutliff Chcvrolct, a dcalcr
cnrollcd in thc GM Carccr Buildcr progrum, hc had no funds to trunsfcr and hud to
bcgin un cntirely ncw cluss ycur bccuusc Millcr wus ncvcr rc-cnrollcd by Forbcs
uccording to thc tcrms of thc progmm, I'laintitl' Millcr was thus dcnicd thc bcnclits
enjoycd by similarly situatcd cmployccs of Forbcs in contruvcntion of thc statcd
Carccr Buildcrs policy,
COUNT IV
MILLER. CRISTILLO & I'EI'I'ERD vs, FORBES CHEVROLET. INC,
and GEORGE FORBES
- VIOLATION OF THE PENNSYLVANIA WAGE PAYMENT AND COLLECTION
LA W, 43 I',S, ~260,1, ct, scq,-
50, Thc avcrmcnts of cach and evcry parugraph above are incorporuted herein by
rcferencc,
51, TIle commission paymcnts dcscribcd abovc which MC duc and owing to Plaintiffs arc
"wages" as dclincd by the I'A Wage Puyment and Collection Law. 43 P,S, ~260,2a.
52. Dcspitc I'laintill's' dcmand upon Dcfcndant lor paymcnt ofthcsc wages, thcy huve not
bcen paid,
53, Bccausc thcsc wages remain unpaid for 30 days beyond the regulurly schedulcd
puyday, Pluintill's urc entitled to liquiduted dumages pUr5llllnt to Scction 260,10 of the
Act.
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IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
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CARL SCOTT MILLER,
ANTHONY CRISTILLO, and
BRIAN C, PEPPERD,
Plaintiffs
CIVIL ACTION - LAW
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No, 96-1916 Civil Term
v,
JURY TRIAL DEMANDED
GEORGE FORBES and
FORBES CHEVROLET, INC,
Defendants
DEFENDANT'S ANSWER AND NEW MATTER TO COMPLAINT
AND NOW, come George Forbes and Forbes Chevrolet, Inc"
Defendants in the above-captioned matter, by their attorneys,
Costopouloe, Foster and Fields, and file the within Answer and New
Matter to Complaint, the nature of which is as follows:
PARTIES AND JURISDICTION
1. Admitted,
2, Admitted,
3, Admitted,
4, Admitted.
5, Denied as stated, It is admitted thet George Forbes is
the sole stockholder of Forbes Chevrolet, Inc., a close corporation
organized pursuant to the laws of the Commonwealth of Pennsylvania,
The balance of tho averment is denied,
6, Denied,
7, Denied.
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Plaintiff's Complaint, Specifically, Plaintiffs were paid 20% on
the net profit resulting from the "Go Figures" for new cars,
meaning that this figure was calculated on the invoice plus a lot
fee of Sl25,OO for new trucks and SIOO for new cars (for clean-up,
etc,) after deducting all costs of sale (para. 12 ( a) of Complaint);
Plaintiffs were not paid 20% of gross profit on financing unless
they also sold life and accident and health insurance in
conjunction with the financing, The custom and practice was as
follows: 20% of finance reserve for financing and both types of
insurance, 18% for financing with only one type of insurance sold,
and 17% for financing only (para, 12( b )&( c) of Complaint); 20% of
the 1% holdback by General Motors Acceptance Corporation (GMAC) per
new vehicle (para, 12(d) of Complaint) was not part of the "Pay
Plan," but was voluntarily extended by Forbes Chevrolet most of the
time; a $20,00 flat payment on extended warranties as bonus for
selling a previous demo (paragraph 12( e) of Complaint) did not
occur as represented rather, the payment was not on a demo, but for
sale of extended warranties for anv vehicle; and, finally, the
reference to chargebacks "and other reductions" in reference to the
monthly draw (paragraph 12(l) of Complaint) was inaccurate, There
were no other reductions, other than chargebacks.
13-14, Omitted in Plaintiff's Complaint,
15, Denied as stated, Forbes Chevrolet expected Plaintiffs
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to work 8 schedule of 44 hours per week,
16, Admitted,
17, Admitted in part and denied in part, It is admitted only
that "program cars" were sold, The balance of the allegation at
Paragraph 17 of the Complaint is denied, By way of further answer,
prior to July, 1993, arbitrary figures were assigned to "program"
or "purchase" vehicle prices as the "Go Figure" upon which
commissions were paid after deducting costs of sale, This was
because Forbes Chevrolet was able on occasion to make special buys
and a portion of the gross profit was therefore attributable to
Forbes' efforts, not the result of any efforts by the sales staff,
After July, 1993, the sales staff, in conjunction with George
Forbes, developed a new system whereby a "used car sheet" wes
employed in which a figure was assigned to each "program" or
"purchase" vehicle and became the "Go Figure," The used car sheet
was distributed to each salesperson at Forbes Chevrolet,
lB, Admitted, By way of additional answer, the aotual gross
prof! t had nothing to do with a salesperson I s commission, The
"commissionable" gross was the amount upon which a salesman's
commission was based,
19. Denied, Defendants incorporate by reference their answer
to paragraphs 17-IB above. Each chargeback was specifically
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delineated, As stated above, the custom and practice of
compensation at Forbes Chevrolet, excluding compensation for
financing, was that the "commissionable" gross was not always the
same as the "gross profit,"
20, Denied, It is specifically denied that there was anv
agreement between Forbes Chevrolet and the Plaintiffs as to a
schedule of compensation, Instead, Plaintiffs were at-will
employees compensated in accordance with the "Pay Plan,"
representing the custom and practice of Forbes Chevrolet, Forbes
Chevrolet at all times adhered to this "Pay Plan," The only
agreement ever executed between Plaintiffs and Forbes Chevrolet
related to the draw they would receive monthly in anticipation of
future commission income,
21. Denied, George Forbes had no involvement in the
employment of the three Plaintiffs, Those individuals were hired
following interviews with Scott Morrow, Terry Stouffer, and Charlie
Stone, management level employees of Forbes Chevrolet, Plaintiffs
were paid pursuant to the established custom and practice of Forbes
Chevrolet, known as the "Pay Plan,"
22, Denied, There was no agreement for Plaintiffs to
perform, Plaintiffs remained as at-will employees and compensated
pursuant to the "Pay Plan" until they voluntarily terminated said
employment,
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entirety,
35, Admitted.
36, Admitted,
37, Admitted,
38, Denied, Payments were deducted on Forbes' "open account"
wi th General Motors on behalf of the Plaintiffs, To Forbes'
knowledge, Plaintiff Miller was so enrolled,
39, Admitted,
40. Admitted,
41. Admi tted,
42, Denied, Forbes was billed on "open account" on a monthly
basis as a result of sales records given to Chevrolet, By way of
further answer, no sums were ever deducted from their pay for this
purpose,
43, Admitted,
44, Denied, These payments are not from commission monies,
but represent a $25,00 contribution each from Chevrolet and Forbes
Chevrolet to the Career Builder Program,
45, Denied, The allegation contained at paragraph 45 of the
Complaint represents a conclusion of law to which no responsive
pleading is required under the Pennsylvania Rules of Civil
Procedure, By way of further answer, the payments to the Career
Builder Program by Forbes Chevrolet on behalf of Plaintiffs are
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paragraphs l-49 of the Complaint, as if fully set forth in their
entirety,
5l, Denied, The allegation contained at paragraph 51 of the
Complaint represents a conclusion of law to which no responsive
pleading is required under the Pennsylvania Rules of Civil
Procedure,
52, Denied, Forbes Chevrolet has paid all monies owing under
the "Pay Plan" to Plaintiffs as represented by their custom and
practice of emp~oyee compensation,
53, Denied, The allegation contained at paragraph 53 of the
Complaint represents a conclusion of law to which no responsive
pleading is required under the Pennsylvania Rules of Civil
Procedure,
54, Denied, The allegation contained at paragraph 54 of the
Complaint represents a conclusion of law to which no responsive
pleading is required under the Pennsylvania Rules of Civil
Procedures,
55, Denied, All monies owing to Plaintiffs as represented by
the "Pay Plan" of Forbes Chevrolet have been fully paid,
WIlEREFORE, it is requested that judgement be entered on behalf
of Defendants and against Plaintiffs and that the Complaint be
dismissed with prejudice,
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NEW MATTER
56, Defendants incorporate by reference their answers to
paragraphs 1-55 of the Complaint, as if fully set forth in their
entirety,
57, All actions of George Forbes with regard to the three
Plaintiffs have been undertaken on behalf of Forbes Chevrolet, Inc,
and had a legitimate business purpose for that corporation,
58, George Forbes played no part in the interviews of the
three Plaintiffs when applying for employment at Forbes Chevrolet
and was not responsible for explaining the terms of the "Pay Plan"
to them,
59, The allegations of Plaintiffs' Complaint fail to state a
cause of action against George Forbes individually.
60, Plaintiff Miller left the employ of Forbes Chevrolet in
May, 1994, in order to go into the restaurant business in
Shippensburg, Pennsylvania,
6l, Plaintiff Miller has falsely represented that he left
Forbes Chevrolet to care for his ill parents in Missouri (see
Exhibit "a" appended to this Answer and New Matter),
62. Following his unsuccessful venture in the restaurant
business, Plaintiff Millor was re-hired by Forbes Chevrolet in
Ootober of 1994.
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63, Plaintiff Cristillo voluntarily quit his position at
Forbes Chevrolet on the same day as Plaintiff Miller,
64, An Unemployment Compensation Referee determined that
Plaintiff Cristillo voluntarily quit his position at Forbes
Chevrolet, and that this voluntary quit had nothing to do with his
concerns over pay,
65, Pennsylvania had never adopted the covenant of good faith
and fair dealing with regard to contracts outside the realm of
Article 2 of the Uniform Commercial Code,
66, Consequently, Plaintiffs have failed to state a claim
upon which relief may be granted with regard to Count III of their
Complaint,
67, No contract, either in writing or orally, was ever
entered into between Forbes Chevrolet and the three Plaintiffs,
except as to the monthly draw which was to be extended to
Plaintiffs,
68, Plaintiffs were at-will employees entitled to be
compensated in accordance with the custom and practice of Forbes
Chevrolet,
69, Forbes Chevrolet utilizes a "Pay Plan" to compensate its
salesperson,
70, The terms of this "Pay Plan" were explained to the
Plaintiffs by one or more management-level employees of Forbes
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ANTHONY S. CRISTILLO
95-J-D-1660
Page J
REASONING. The Office of Employment Security iooued a dotermination holding
that the claimant waa aligib1e for bonafito under the provioiono of Section
40~(b) of the ponnoy1vania Unemployment compenoation Law,
Bection 40~ (b) of the Law provideo that a claimant ohal1 be ineligible for
compen.ation for any week in. which his unemploymont io due to voluntarily
leaving work without cauae of a neceooitouo and compol1ing nature. Since the
claimant voluntarily terminated his employment, the burdon reoto upon him to
Ihow cau.e of a neceaeitouo and compelling nature for 00 doing,
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The Referee findo the teetimony of the employer to bo crodible, In the inotant
cale, the claimant voluntarily quit the employment becauoe of the Notice
received from the Stato Board ot Vehicle ManutactureD, Dealero and
Salelperlono. Prior to quitting, claimant did not make a reaoonable etfort to
preoerve the omployment relationohip, Claimant wao givon thirty (JO) dayo to
re.pond to the Ilotice, The claimant voluntarily quit tho employment two (~)
week. atter the Notice wao received. claimant hao not domonotrated that there
waD any neceolitouo and compelling cauoe to quit hiD job on Auguot 4, 1995,
Even if the Reteree would conoider claimant'o tootimony with regard to his pay,
the Pennoylvania courto have conoiotently hold that quitting due to
dillatiltaction with pay io not a reaoon which io conoidorod noceooitouo and
compelling under the law, '
Baled on the above, the Reteree concludeo that the claimant voluntarily quit
the employment without eauoe and, theretore, ho ie ineligible tor benetito
under the provisions ot Beetion 402(b) of the Law.
ORDER. The determination of the Ottice of Employment socurity io REVERSED and
claim cradit tor waiting week ending Auguot 12, 1995 and bonefito for
compensable week. ending Auguet 19, 1995 and Auguet 26, 1995 are DENIED.
~^-{Jvt
~J~WHITE' REFEREE
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FORBES CHEVROLET
3400 Hartzdale Dr,
camp Hill. PA 17011
717-761~0600
,COTT MILLER
,0-7445
',er Code:15-207
,ell\be r 12, 1994
Dear Sir,
I am writing in regards to the Dealers Salesperson Career Euilder
Program, I have been a Chevrolet salesperson since April 1991. In 1993
I achieved Legion of Leaders sales recognition,
In May of 1994 it was necessary for me to resign from Fortes
Chevrolet for an undetermined amount of time so that I could move to
Missouri to tend to my parents poor health, After arranging appropriate
care for my parents, I was able to return to Pennsylvania and resume
my former position at FORBES CHEVROLET in October of 199,.
Upon leaving in May of 1994, I was informed by Fortes C'levrolet
management that my cash accumulated in this program was guaranteed
for 1992 and 1993, And in 1994 would be guaranteed if I vere to return
before the end of the year, However, upon returning in Oc:oter of !994
to my ~isrn3Y. r was informed management had begn mi5:!~e~ !~~ tha~ !
forfeited all cash accumulated ,in 1992 (54450). 199~ (5:::.)1 an::: 1994
I believe there must be some exceptions to these guidelines.
As I see it this program was put in affect to provi:::e a more stable
sales force reSUlting in more overall sales for General ~et~rs, ! have
always maintained constant contact with my previous customers reSUlting
in more sHes for m,'self. Forbes Chevrolet. and Geneo: '.'~:::;, :n
November ef 1994 two of my sales were from previeus cu;::=~:;, ~~;
returned to me because of the contact I maintained wit~ them. Is this
not one of the main purpose of this program? For the yea: of 1994
my a months of sales have been equal to or greater than many sales
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persons tetal year sales,
The sales perEormanc~, loyalty. and longevity r hav~ ;~~en t~ Fcrbes
Chevrole~ and Genera~ ~otors has been to the utmcs~ o~ ~y !~ili~y. ~y
loyalty ha~ to go tc my parents fer 4 months. but r d:~ nc~ be~r!y
General Metors. because I remained unemployed untl! I VI; a~!e t:
re~urn to F~rbes Chevr=let.
I fee: that conti~uing me in the Career Euil~er Fr:gr!~ i, very
justifiJ~:e b~c3use c~ the cir=~ms:Jnces and the E~c~ :~!: Fc:~e5
Chev:cle: lnd Gener3~ ~otor~ are enjoying many more sa:as ~o~ 3nd in ~~e
Eutura r~s~l~in; dir~~:ly
:r:m my previous
sales i~
l~C' '<'JC':" ~ao~
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EXHIBIT
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6, No other plcndings hnve been liIed nnd no discovery conducted ns of the
present dute.
7, Kenneth W. Smith. petitioner herein. liIed snit in the U,S, District Court fhr
the Middle District of Pennsylvuniuon or ubout Febnlllr)' 15, 1996 contnining c1nims
similur to the c1nims of the nnmed Plnintill's herein,
8, On motion, the Hon, Willinm W, Cnldwell, U,S. District Judge, dismissed
counts II - VI of Kenneth Smith's com(lluint without prejudice, (A true nnd correct COP)'
of Judge Cnldwell's MIlY 2, 1996 Order is IIltnched hereto liS Exhibit "A"),
9, Counts 11- VI of Kenneth Smith's complllint concemed pllyment of
commissions IInd bonuses for II time period prior to Kenneth Smith's terminution by
Defendllnt on or IIbout Mllrch 2, 1995,
10, Petitioner hils lI11nched II copy of the Proposed Amended Complllint hereto liS
Exhibit "8" which ineorporntes those c1l1ims which were dismissed by Judge Cllldwell
without prejudice.
II, Petitioner IIsserts the right to joint, severnl, sepllrllte or IIltemlltive relief liS the
nllmed Plllintiffs in this IIction IInd tllAt their respective c1l1ims llrose out of common
trnnsllctions, occurrences, or series oftrnnsllctions or occurrences IInd the detenninlltion
01'1111 c1l1ims will involve common qnestions orlllW or fnct,
12, Petitioner ndditionnlly IIssel1s thnt no prejndice to Defendnnt will result li'llIn
the joinder of Kenneth Smith nnd the liIing of nn Amended Plellding, On the contrnry,
Defendllnt will be nmmled the opp1ll1unity to ultnch u notice to plelld to its Answer IInd
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
KENNETH W, SMITH,
Plaintiff
vs.
CIVIL ACTION NO. l,CV-96-264
FORBES CHEVROLET, INC"
GEORGE FORBES,
Defendant
FILED
HI\~I'1I~R\lOr, pt
MAY - ~ 199b
ORDER
MARY t::, U'
per
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AND NOW, this 2nd day of May, 1996, it is Ordered that:
(1) Defendants' motion to dismiss, filed
March 6, 1996, is granted in part and denied
in part.
(2) Counts II-VI are dismissed without'
prejudice.
(3) Plaintiff's motion for oral argument,
filed April 16, 1996, is denied,
(4) The case management conference in this
case, originally scheduled for May 1, 1996, is
continued to Tuesday, May 14, 1996, at 8:45
a,m. The conference shall be by telephone to
(717) 782-3701, and defendant shall place the
call.
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William W, Calwell
United States District Judge
AO 72A
(Rev. 61021
EKIIIDIT "A"
II. I'llIinlit]' Cristillo WIlS hircd hy Furhcs Chcl'rolct. Inc, liS a fnlltimc slIlcspcrson on or
IIhonl Fchrullry I, 11)1)3 IInd was tCrlninatcd hy Forhcs Chcl'rolct. Inc, on or ahoul
August 3. 11)1)5,
12, I'llIinlill'l'cppcrd \\'IIS hircd hy Forhcs Chcl'rolct. Inc, on or IIhout JlInullry II. 11)1)4 liS
II lillI timc slllcspcrson IInd work cd liS II lillI tilllc slllcspcrson lill' Furhcs until on or
IIhOUI Dcccmhcr 2ll, 11)1)4,
13, I'llIimil], Slllith WIIS hircd hy Forhcs Chcl'l'lllct. Inc. in Fchruary of II)H5 liS II Iillltilllc
slIlcspcrson, Allcr II Ical'c of IIhscncc. I'llIintilr rcsumcd workiug IiII' ()cfcndllnt in
Novclllhcr of II)H6 liS II Iii II timc slllcspcrsonllnd work cd liS such until Murch 2. 1')1)5,
whcn hc was tcrlllinlllcd by ()cfcndllnt. Gcorgc Forhcs,
14, Whcn I'llIintill's wcrc hircd thc tcrllls of their compcnslItion wcrc cxplllincd to thclll
by Gcorgc Forhcs IInd hy Chllrlic Stonc. slIlcs Illllnllgcr of Forhcs Chcvrolct. Inc, Thc
tcrllls wcrc liS Illllows:
II) I'llIintitl's wcrc to hc paid II 20% conllnission on thc pl'lllit of cvcry vchiclc
sold;
h) 20% ofgrnss prulit onlinandng;
c) 20% ofgl'llss prulit on Ii Ie / IIcddcnl &. hClllth insul'llncc;
d) 2ll% ofthc 1% holdhllck pCI' ncw vchiclc;
c) $2ll nllt pll)'IllCnt on cxtcndcd wlIlTlIntics honlls lill' sclling a prcvious
dClllo;
I) $25 Illini dcal ifthc dClllcrship did not mllkc II prolit onthc dCllI;
>-Jl I
g) $100 bonns 101' 10 snlcs dnring n cnlcndnl' month;
h) $10 bonus on snlcs 11 through I ~ in II cnlcndnr month;
i) $60 bonus on thc 15'10 unit;
j) $10 onl6 through 19nnits; nnd
k) n $60 bonns on thc 20'10 unit,
I) At nil timcs I'clcvnnt hCl'ein. Plnintill's' monthly "dl'llw" wns $1000 cnch,
Commissions cxcccding $1000 cnl'l1cd during n cnlcndnl' month WCI'C duc
nnd pnynblc to Plnimill's on thc 15'10 of thc tollowing month, If Plnintill's
did not cnm $1000 in commission pCI' month. thcy wonld I'cccivc thcil'
dl'llw, Icss nny chnl'gc-bncks nnd othcl' I'cductions, If I'lnintillS cnlllcd
mol'c tlllln $1000 in commission pCI' month (i.c, $1050) . thcy would
rcccivc thc nmount in cxccss of $1000 (Lc, $50), Icss nny chnl'gc-backs
IInd othcl' rcductions,
m) PlnintitTs' commission wonld bc I'cduccd IIcclll'ding to the nmount of
"chnl'gc-bncks" which occul'rcd whcncl'Cl' II vchiclc which hnd bccn
finllnccd through thc dClllcrship wns sold 01' tl'l1nsfcl'l'cd OJ' thc Iinllncing
wns othcl'wisc pnid olTpl'iol' to its cxpcctcd cxpil'lltion,
IS, ()clcndnnts I'cquircd Plnintiffs to work bctwccn 45 - 55 hours pCI' wcck,
16. I'llIintil1's wcrc paid on n commission basis, with a $1000 monthly "dl'll\V,"
Commissions 101' cllch cnlcndnl' month wcrc duc nnd pllynblc on thc 15'10 of thc
tilllowing cnlcndlll' month,
17. Dclcndnnt sold whnt wcrc tcrmcd "progrum cnrs," cnrs Ihnt wcrc n ncw or rcccnt
lIlodcl ycnr but hnd bccn uscd ns p1ll1 of n IIcct such ns rcntnl cnrs or ns n dCIllO, Thc
nctunl pricc of thc progrulll cnrs which wns pnid by Forbcs wns not discloscd to
I'lninlills, I'lnintills Ihus wcrc not nblc to dctcrminc whcthcr thcy wcrc gClling 20%
of Ihc Irnc gross prolil on Ihcsc snles,
18, With rcspect to the records IIlninlnined by ))elcndnnt, n p1ll1ion of cnch nnd cvery onc
of I'lnintiffs' cOlllmission slips hnd n cut-out portion which, if Icll in, would indicnlc
thc nclunl gross prolil of ncw and uscd vehiclcs sold,
19, Dcfcndnnt cnlculntcd n commission nsing a cOlllplicntcd mcthod of "chargc-backs",
"draws", nnd ndvnnccs, hnndwrittcn on Ihc bollolll of thc computcr shcct to nrrivc nt
I'lnintifTs' snlnry without rclcrcncc 10 thc gross prolit ligurcs which wcre cut out of
the cOlllmission shcct,
20, In Fcbrunry of 1995, it bccnme evidcnl 10 I'lninliffs tllllt Dclcndnnt wns not
pcrforming nccording 10 Iheir ngrccmcnt, On Fcbruary 15, 1995 the dcnlership
cvidcntly inndvcrtently nllowcd thc gross prolil portion to rcmain in Anthony
Cristillo's commission slip,
21. In Fcbruary of 1995 I'laintifl'Smith conli'onled Dclcndnnt Gcorgc Forbcs conccruing
Ihe disparity in commissions nnd prolits, but wns tcnninntcd on Mnrch 2, 1995,
withoul n rcsolutiou of the mnttcr.
22. The plllintiffs, whcn they conuncnccd work iiII' ()clcndnnt, wcrc induccd by thc
Defendants throngh thc promiscs nnd rcprcscntnliuns of its duly lIuthorizcd oflicer,
Georgc Forbcs, 1II1l1 agcnt or cmploycc, Charlic Stonc, Snles Mnnnger, aCling within
thc scopc of his lIuthoril)', 10 IIcccpl cmplo)'mcul wilh Ihc COmplm)' IInd 10 hc paid
IIccordiug to thc IIhove SllIcs commission agrccmcntlls opposcd 10 IIn)' houri)', salllry,
or othcr compcnslltion pllln,
2), At thc timc IJlnintill: Smith, WIlS hircd, thc compcnslItion systcm wns cxplllincd to
him hy Gcorgc Forhcs, who thcn put this ngrccmcnl inwriling to hc kcplon tilc IIlthc
dClllcrship.
24,lllc I'laintills, lit nil timcs prior to their tcrminlltion, pcrlormcd their cnd of thc
agrccmcnt slllisfilctorily IInd madc numcrous monlhl)' vehiclc slIlcs IiII' Ihc dClllcrship,
25,l11c IJlainlitTs. to thcir dctrimcnl, rclicd on Ihc promiscs and rcprcscntations of
Dcfcndllnt inllcccpting cmploymcnt with Forhcs lInd IIcccpting thcir pll)'chccks liS litlJ
IInd complctc compcnslltion lor thcir scrviccs whcn, in lilcl, thcy did not rcncct thc
full 20% commission rntc,
26, Although PlaintitTs arc unllblc to clllcullltc Ihc CXllct dillercncc in whllt WIlS owiug to
thcmundcr Ihe cmploymcntllgrccment without hllving IICCCSS to numerous records of
Defcndants, PlaintitTs bclicve IInd thercfore aver thllt in the )'cars of their employmcnt
their IIctual commission paymcnts IImountcd 10 only 5 . 10% of Ihe gross protit on
each progrnm, uscd, and othcr cars sold undcr spccilll IIlTlIngcmcnt ("mini dCllls"),
rnthcr thanthc 20% which WIlS promiscd to thcm,
27. An example of II vchicle sold undcr spccilllllrl'llngcmcnt or "mini dCIlI" IIrc cllrs sold
to GM or liDS cmployccs, Forhcs rcprescntcd 10 I'llIintills thai thcsc vchiclc snlcs
wcrc "no pmlit sales"lInd pllid I'llIintills $25 IiII' thc sale ofcach ofthesc vchiclcs,
-I \. According to OM's progl'llm. clll'llllcd dClllcrs wcrc to contrihutc $~5.()() IiII' cllch
rcpol1cd eligihlc vchiclc sold hy IIn clll'ollcd slllcspcrson lInd (1M would likcwisc
contrihutc $~5.()() IiII' cllch rcpurtcd eligihlc vehiclc sold hy lIn clll'ollcd slllcspcrsonllt
thc timc ofmllturity.
-I~. Cllrccr Bnildcr dcfcrrcd hunus fnnds nllllurc un Jllnullry I of thc third YCllr lillluwing
thc bcginning of thc c1nss ycnr. ^ c1nss YCllr is dclincd ns n cnlcndnr YCllr. Thc lirst
ycnr of dclerrcd honus funds would, lhcrclill'll, hnvc mnllll'cd on Jnnunry I, 1995.
43. In ordcr to hc cligihlc IiII' rccciving thc hunus I\lIIds, nn clll'ollcd slllcspcrson gcncl'lllly
mustmllintnin continuous cmploymcnt ntlhc cnrollcd GM dcnlcr Ihr thc cntirc c1nss
)'cnr.
44. Thc $25.00 dcnlcr portion of thc progl'llm, howcvcr, wns not tnkcn Ii'om Forhcs
Chcvrolct, Inc.'s timds, but mthcr wns lnkcn Irom Plninlills' commission, Icnving
thcm with $25.00 Icss in commissions on cach cligiblc cnr sold.
45. Bccnusc nonc of Plnintitfs finishcd lhc cntirc class ycnr 101' thcir IlIst ycnr of
cmploymcnl, they will forfcit thosc limds contributcd tOIVnrd thc progl'llm in thcir
namc.
46. Thcsc funds IIrc nctunlly commission lilllds which thcy cnrncd undcr thc contrncl
nrrnngcmcnt with Forbcs Chcvrolct, Inc. nnd havc hccn convcrtcd 11'11111 thcm through
thc Cnrccr Buildcr progl'llm.
47. Whcrclorc, Forbcs wl'llnglillly withhcld S25.(}() in cOlllmission 11'0111 cllch cligihlc
vchiclc snlc 11'11111 Plnintifls and Ihcn, upun ICl'lninlltiun uf thc cmpluymcnt
rclntiunship, prcvenlcd Plnintifls Ihllll rccovcring thcsc cnrncd funds.
53. Thc cOl11missiun )lIlYl11cnts dcscrihcd IIhuve which nrc duc IInd owing III Plllintit1s IIrc
"wngcs"lIs dcfincd by thc PA Wngc PII)'IIlCnt nnd Cullcction LIIW, 43 P.S. ~26(}.2n.
54. Dcs)litc Plnintifls' dCl11l1nd upun Dclendnntlill' )lnYl11cnt ofthcsc WllgcS, lhcy hnvc not
bccn Pllid,
55. BCCllusc thcsc wngcs rCl11l1in unpllid IiII' )0 dllYs hcyund Ihc rcgulnrl)' schcdulcd
)lllydny, Plnintifls IIrc cntitlcd to li1luidntcd dmnngcs plll'suant to Scction 260.10 uf thc
Act.
56. In nccordnncc with 43 P.S. ~260.9n(I), Plnintil'fs IIrc cntitlcd to nttorncy lecs
nssocintcd with this c1nil11.
RELIEF REOUESTED
57. Plnintitls rcspcctfully rcqucst thnt judgl11cnt bc cntcrcd in thcir favor nnd IIgninst
Dcfcndnntnnd thntthis Court awnrd thc following rclicf IInd dal11agcs in cxccss of
$25,000:
n) rclinncc nnd conscqucntinl dnl11ngcs )lursullnt to Counts I nnd III of thc
cOI11)llnint:
b) cOI11)lcnsntory IInd punitive dlll11ngcs )lursunnt to Cuunt II ofthc cOl11plaint;
c) Iiquidntcd dnl11ngcs, nttol1lcy lecs nnd costs in nccordllncc with Count IV of
thc cOl11plnint; IInd
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the referenced correspondence of March 7, 1996, attempted to
instruct Defendants as to the specific individual attorney she felt
they should retain, in derogation of the counsel of their own
choice.
3. Admitted in part and denied in part. It is admitted only
that undersigned counsel signed the referenced pleading. The
Answer and New Matter furnished only that amount of detail required
in response to the specific allegations of Plaintiff's Complaint.
It is specifically denied that the subject matter of the reply to
paragraph 10 of the Complaint related to another matter in which
undersigned counsel represented Plaintiff Cristillo. Rather, the
focus of the answer (see Exhibit "A" appended to this Answer, copy
of "Defendants' Answer and New Matter to Complaint") was to
Cristillo's untrud allegation that he had been terminated by Forbes
Chevrolet. The specific answer, that he had voluntarily quit
Forbes Chevrolet "as a result of a notice received from the State
Bureau of Vehicle Manufacturers, Dealers and Salesperson that a
formal disciplinary action had been taken against him" was the
summary of a decision issued by a referee employed by the
Pennsylvania Unemployment Compensation Board of Review in a matter
in which undersigned counsel had not represented Cristillo. The
decision, which was appended to Defendant's Answer and New Matter
to Complaint (see Exhibit "B" to this Answer), was forwarded to
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Forbes Chevrolet as the employer and not to undersi9ned counsel.
By appending this decision to the Answer and New Matter, Plaintiffs
were on actual notice that the information used in answer to
paragraph 10 of the Complaint did not emanate from undersigned
counsel's representation of Plaintiff Cristillo in an unrelated
matter.
4. Denied. Defendants lack knowledge and information
suffioient to form a belief as to the accuraoy of the docket
numbers identified at paragraph 4 of Plaintiff's Motion and,
consequently, deny the same. Strict proof, if relevant, is
demanded at the time of any hearing on this matter. By way of
further answer, it wae not undersigned counsel, but a former
attorney of his firm, Jeanne Bereznicki, who represented Plaintiff
Cristillo, as evidenced by her signature on the fee agreement
appended as Exhibit "B" to Plaintiff's Motion. Ms. Bereznicki
subsequently associated with another law office and, while there,
detailed the nature of Mr. Crietillo's criminal charges in
correspondence directed to Thomae Priest of Forbes Chevrolet, dated
March 30, 1995, (see Exhibit "c" to this Motion). In other words,
any confidential information garnered from the attorney-client
relationship was freely disclosed to Defendants and available for
use in this or any other proceeding.
5. Denied as stated. The fee agreement covered
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representation by Costopoulos, Foster and Fields, and not attorney
Costopoulos personally. As stated in answer to paragraph 4 above,
Plaintiff Cristillo was represented by Jeanne Bereznicki, Esquire.
6. Denied as stated. The basis of the Order to Show Cause
against Plaintiff Cristillo (see Exhibit "D" appended to this
Motion, copy of Notice and Order to Show Cause) was not solely
criminal alleoations, but Cristillo's guilty plea to twenty-four
(24) criminal counts and the resultant judgement of sentence.
7. Denied. Defendants incorporate by reference, as if fully
set forth in their entirety, their answer to paragraph 3 of the
Disqualification Motion above, relating to the subject matter of
their answer to paragraph 10 of the underlying, "Defendant's Answer
and New Matter to Complaint."
8. Denied. Jeanne Bereznicki is no longer with the firm of
Costopoulos, Foster & Fields.
Rule 1.9 of the Rules of
Professional Conduct states in pertinent part:
A lawyer who has formerly represented a client in a
matter shall not thereafter:
(a) represent another person in the same or a
substantiallv related matter in which that person's
interests are materially adverse to the interests of the
former client...
(b) use information relating to the representation to
the disadvantage of the former client except as Rule 1.6
would permit wi th respeot to a client or when the
information has become oenerallv known.
(emphasis added)
The comment to Rule 1.9 states the following with regard to
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information obtained during representation of a former client:
Information acquired by the lawyer in ~he course of
representing a client may not subsequently be used by the
lawyer to the disadvantage of the client. However. the
fact that a lawyer has once served a client does not
preclude the lawyer from usino oenerally known
information about that client when later repreeentino
another client.
(emphasis added)
In the instant matter, any client confidences obtained by
members of the firm of Costopoulos, Foster & Fields have been
openly disclosed by Plaintiff Cristillo to Defendants and,
consequently, would be given to any attorney representing
Defendants. Plaintiff Cristillo has waived any right to object to
undersigned counsel's representation of Defendants by:
a) revealing to Thomas Priest, Comptroller of Forbes
Chevrolet, Inc., the nature of the criminal charges filed
against him and his guilty plea to these charges in the
context of Cristillo's inability to deny that he had ever
been criminally convioted in answer to a specific
question on the renewal application for his license as a
vehicle salesperson in the Commonwealth of Pennsylvania.
b) giving to Thomas Priest a copy of the Order to Show
Cause served upon him by the State Board of Vehicle
Manufaoturers, Dealers and Salespersons (see Exhibit "D"
to this Answer).
c) having his attorney, Jeanne Bereznicki, write to
Thomas Priest, outlining the nature of the underlying
oriminal offenses (see Exhibit "c" to this Answer), as
recommended by the Pennsylvania Automobile Association
(PAA) to whom Thomas Priest had sought advice on behalf
of Plaintiff Cristillo, as a means of effecting both Mr.
Cristillo's license renewal and Forbes Chevrolet's
renewal as a dealer.
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d) giving the name of Forbes Chevrolet to his Adult
Probation Officer, Miles C. Miller, who corresponded with
Defendants concerning this same matter (see Exhibit "E"
appended to this Answer to the Disqualification Motion);
and
e) having another attorney, Barbara Sumple-Sullivan,
Esquire, write to Thomas Priest of Forbes Chevrolet and
require him to execute an agreement on behalf of Forbes
Chevrolet to deduot various sums from Cristillo' s payroll
checks as part of the restitution resulting from
Cristillo's sentence imposed by the Dauphin County Court
(see Exhibit "F" appended to this Answer to the
Disqualification Motion, copy of correspondence to Thomas
Priest and underlying Agreement).
In short, any information relating to Plaintiff Cristillo's
difficulties with the State Board of Vehicle Manufacturers, Dealers
and Salespersons has been openly disclosed by Cristillo and an
exception to Rule 1.9(b) of the Rules of Professional Conduct.
9-15.
Denied.
The quotation of caaelaw contained at
paragraphs 9-15 of Plaintiff's Motion are conclusions of law to
which no responsive pleading is required under the Pennsylvania
Rules of Civil Procedure. By way of further answer, the quotations
from authority are boiler-plate and not even attempted to be
applied to the facts of the present matter. As outlined above, the
focus of the answer to paragraph 10 of the underlying Complaint was
not Plaintiff Cristillo's difficulties with the law and regulatory
authorities, but the truthfulness of his allegation that he had
been terminated from his employment with Forbes Chevrolet. A
public docump.nt--the finding of fact and decision of the
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Unemployment Compensation Referee--belied Cristillo's response to
said paragraph 10.
Indeed, contrary to the boiler-plate assertions of Plaintiffs,
the legal standard under Rule 1.9 (a) is the II substantial
relationship" test, L..!h, whether IIconfidential information that
might have been gained in the first representation [may be] used to
the detriment of the former client in the subsequent action. II
Readino Anthracite Co. v. Lehioh Coal & Nav. Co., 771 F.Supp. 113,
115 (E.D. Pa. 1991); Triffin v. DiSalvo, 643 A.2d 118 (pa. Super.
1994). Clearly, whatever Plaintiff Cristillo might have done to
run afoul of the regulatory authorities has nothing to do with the
issues implicated by the present lawsuit. The action pending
before this Court involves whether any contract between the parties
might have been breached (Count I); whether Defendants fraudulently
deprived Plaintiffs of any contractually-mandated compensation
(Count II); and whether either a covenant of good faith and fair
dealing or the Pennsylvania Wage Payment and Collection Law (Count
III and IV) apply. No information which could have been obtained
during the criminal proceedings even remotely relates to the
matters at iesue here, ~, oral contracts between the parties;
commission schedules; pay plans and the like. There is not the
slightest possibility that information from the one proceeding
could be used in the other. As a result, the criminal proceedings
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in which Plaintiff Cristillo participated do not represent "the
same or substantially related matters" within the meaning of Rule
1.9(a) of the Rules of Professional Conduct.
16. Admitted in part and denied in part. Undersigned counsel
has represented Defendants for a decade, beginning with litigation
associated with the move of Forbes Chevrolet from Lemoyne,
Pennsylvania, to Hartzdale Drive, adjacent to the Capital City
Mall. Any purchase of a vehicle from Forbes Chevrolet was in
conjunction with that relationship, and no information relating to
Plaintiff Cristillo' s employment or compensation agreement with
Defendants emanated from that purchase. While the purchase of a
vehicle is admitted, any appearance of impropriety or access to
confidential information is denied.
17. Denied as irrelevant. There is no legal requirement
under Rule 1. 9 (a) of the Rules of Professional Conduct that a
former client agree to the latter representation where it is not in
the same or a sUbstantially related matter.
18. Denied as irrelevant to determination of the Motion.
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WHEREFORE, it is requested that the Motion to Disqualify
Defense Counsel be denied with prejudice and the Rule to Show Cause
accordingly dismissed.
Respectfully submitted,
Dated:
j~~lUl1m L1:~[J./1
William C. Costopoul s, Esquire
Attorney ID# 22354
COSTOPOULOS, FOSTER & FIELDS
831 Market Street/P.O. Box 222
Lemoyne, Pennsylvania 17043
Phone: (717) 761-2121
ATTORNEY FOR THE DEFENDANTS
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VERIFICATION
The undersigned, William C. Costopoulos, Esquire, hereby
states that he is the object of the Motion to Disqualify Defense
Counsel and, as such, authorized to execute this verification, and
that any factual statements contained in the "Defendants' Answer to
Motion to Disqualify Defense Counsel" are true to the best of his
knowledge, information and belief. He understands that any false
statements are subject to penalties contained at 18 Pa. C.S. ~ 4904
relating to unsworn falsification to authorities.
\ L\~IJt/YY-Ch~\~QtJ,OD,t
William C. Costopoulos, Esquire
.
.
VERIFICATION
The undersigned hereby states that he is the Comptroller of
Forbes Chevrolet, Inc., and as such, authorized to execute this
verification, and that any factual statements contained in the
"Defendants' Answer to Motion to Disqualify Defense Counsel" are
true to the best of his knowledge, information and belief. He
understands that any false statements are subject to penal ties
contained at 18 Pa. C.S. g 4904 relating to unsworn falsification
to authorities.
) '.;:? /J.
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Thomas Priest
.
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSVLVANIA
CARL SCOTT MILLER,
ANTIlONV CRISTILLO, and
BRIAN C. PEPPERD,
plaintiffs
CIVIL ACTION - LAW
No. 96-1916 Civil Term
v.
JURY TRIAL DEMANDED
GEORGE FORBES and
FORBES CHEVROLET, INC.
Defendants
DEFENDANT'S ANSWER AND NEW MATTER TO COMPLAINT
3. Admitted.
4. Admitted.
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AND NOW, come George Forbes and Forbes Chevrolet, Inc..
Defendants in the above-captioned matter, by their attorneys,
Costopoulos, Foster and Fields, and file the within Answer and New
Matter to Complaint, the nature of which is as follows:
PARTIES AND JURISDICTION
1. Admitted.
2. Admitted.
, ,
5. Denied as stated. It is admitted that George Forbes is
the sole stockholder of Forbes Chevrolet, Inc.. a close corporation
organized pursuant to the laws of the COl1ul101wealth of pennsylvania.
The balance of the averment is denied.
6. Denied.
7. Denied.
EXHIBIT
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Count I
Miller, Cristillo & Pepperd v. Forbes
Chevrolet, Inc. and George Forbes
DREACII OF CONTRACT
8. No answer required under the pennsylvania Rules of Civil
procedure.
9. Admitted.
10 . Admitted in part and denied in part. It is admitted that
plaintiff Cristillo (hereinafter, "Cristillo") was employed by
Forbes Chevrolet, Inc. on or about February 1, 1993. It is denied
that he was terminated by Forbes Chevrolet. Rather, he voluntarily
quit his employment on AugJst 3, 1995. Following this voluntary
quit, an Unemployment Compensation Referee determined that this
quit was as a result of a notice received from the State Bureau of
Vehicle Manufactures, Dealers and Salespersons that a formal
disciplinary action had been taken against him (see Exhibit" A"
appended to this Answer and New Matter, copy of Referee's Decision
issued by the pennsylvania Unemployment compensation Board of
Review) .
11. Admitted.
12. Denied. \~hen Plaintiffs were hired, George Forbes was
not present and did not learn of their employment until after the
fact. Moreover, Forbes Chevrolet's custom and practice regarding
compensation was not as represented at paragraph 12(a)-(m) of the
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Plaintiff's Complaint. Specifically, Plaintiffs were paid 20% on
the net profit r06ul ting from tho "Go Figures" for new cars,
meaning that this figure wa6 calculated on tho invoice plus a lot
fee of $125.00 for now trucks and $100 for now cars (for clean-up,
etc.) after deducting all costs of sale (para. 12(a) of Complaint);
plaintiffs were not paid 20% of gross prof! t on financing ill1~
they also sold life and accident and health insurance in
conjunction with the financing. The custom and practice was as
follows: 20% of finance reserve for financing and both types of
insurance, 18% for financing with only one type of insurance sold,
and 17% for financing only (para. 12(b)&(c) of complaint); 20% of
the 1% holdback by General Motors Acceptance Corporation (GMAC) per
new vehicle (para. l2(d) of Complaint) was not part of the "Pay
Plan," but was voluntarily extended by Forbes Chevrolet most of the
time; a $20.00 flat payment on extended warranties as bonus for
selling a previous demo (paragraph 12 (e) of Complaint) did not
occur as represented rather, the payment was not on a demo, but for
sale of eKtended warranties fQr any vehicle: and, finally, the
reference to chargebacks "and other reductions" in reference to the
monthly draw (paragraph 12(1) of Complaint) was inaccurate. There
were no other reductions, other than chargebacks.
13-14. Omitted in Plaintiff's Complaint.
15. Denied a6 stated. Forbes Chevrolet eKpected Plaintiffs
3
to work a schedule of 44 hours per week.
16. Admitted.
17. Admitted in part and denied in part. It is admitted only
that "program cars" were sold. The balance of the allegation at
Paragraph 17 of the Complaint is denied. By way of further answer,
prior to July, 1993, arbitrary figures were assigned to "program"
or "purchase" vehicle prices as the "Go Figure" upon which
commissions were paid after deducting costs of sale. This was
because Forbes Chevrolet was able on occasion to make special buys
and a portion of the gross profit was therefore attributable to
Forbes' efforts, not the result of any efforts by the sales staff.
After July, 1993, the sales staff, in conjunction with George
Forbes, developed a new system whereby a "used car sheet" was
employed in which a figure was assigned to each "program" or
"purchase" vehicle and became the "Go Figure." The used car sheet
was distributed to each salesperson at Forbes Chevrolet.
18. Admitted. By way of additional answer, the actual gross
profit had nothing to do with a salesperson's commission. The
"commissionable" gross was the amount upon which a salesman's
commission was based.
19. Denied. Defendants incorporate by reference their answer
to paragraphs 17-10 above. Each chargeback was specifically
<1
.
delineated. As stated above, the custom and practice of
compensation at Forbes Chevrolot, eKcluding compensation for
financing, was that the "commissionable" gross was not always the
same as the "gross profit."
20. Denied. It is specifically denied that there was any
agreement betvIBen Forbes Chevrolet and the plaintiffs as to a
schedule of compensation. Instead, Plaintiffs were at-will
employees compensated in accordance with the "Pay Plan,"
representing the custom and practice of Forbes Chevrolet. Forbes
Chevrolet at all times adhered to this "Pay Plan." The only
agreement ever executed between Plaintiffs and Forbes Chevrolet
related to the draw they would receive monthly in anticipation of
future commission income.
21. Denied. George Forbes had no involvement in the
employment of the three Plaintiffs. Those individuals were hired
following interviews with Scott Morrow, Terry Stouffer, and Charlie
Stone, managoment level employees of Forbes Chevrolet. Plaintiffs
were paid pursuant to the established custom and practice of Forbes
Chevrolet, known as the "Pay Plan."
22. Denied. There was no agreement for Plaintiffs to
perform. Plaintiffs remained as at-will employees and compensated
pursuant to the "Pay Plan" until they voluntarily terminated said
employment.
5
entirety.
35. Admitted.
36. Admitted.
37. Admitted.
38. Denied. payments wore deducted on Forbes' "open account"
wi th General Notors on behalf of the Plaintiffs. To Forbes t
knowledge, Plaintiff Niller was so enrolled.
39. Admitted.
40. Admitted.
41. Admitted.
42. Denied. Forbes was billed on "open account" on a monthly
basis as a result of sales records given to Chevrolet. By way of
further answer, no sums \~ere ever deducted from their pay for this
purpose.
43. Admitted.
44. Denied. These payments are not from commission monies,
but represent a $25.00 contribution each from Chevrolet and Forbea
Chevrolet to the Career Builder Program.
45. Denied. The allegation contained at paragraph 45 of the
Complaint represents a conclusion of law to which no responsive
pleading is required under the Pennsylvania Rules of Civil
Procedure. By way of further answor, the payments to the Career
Builder Program by Forbes Chevrolet on behalf of Plaintiffs are
B
documented by Chevrolet and periodically published as a statement
to the affected employee.
46. Denied. As stated in answer to paragraph 20 above, there
was fig agreement between the plaintiffs and Forbes Chevrolet as to
compensation.
It is expressly denied that Forbes Chevrolet has
breached any of the terms of the program established by General
Motors.
47.
Denied.
If, in fact, Plaintiff Miller was not re-
enrolled in the Career Builder Program, it was his own fault in not
bringing this to anyone's attention, in that he received monthly
statements from Chevrolet which would have informed him that he was
not being given credit for new sales.
48. Denied. The program allowing for transfer of bonus funds
would have permitted only the transfer of the portion of the monies
attributable to Chevrolet, not to the 50% of accumulated funds
which Forbes Chevrolet contributed.
49.
Denied.
Defendants incorporate by referenced their
answer to paragraph 47 above.
COUNT I~
Miller, Cristillo, & Pepperd v. Forbes
Chevrolet, Inc. and George Forbes
VIOLATION OF THE PENNSYLVANIA WAGE
PAYMENT AND COLLEC'rION LA\~, 43 P. S. @ 2601. 1, et seq.
50. Defendants incorporate by reference their answers to
9
paragraphs 1-49 of the complaint, as if fully set forth in their
entirety.
51. Denied. The allegation contained at paragraph 51 of the
Complaint represents a conclusion of law to \~hich no responsive
pleading is required under the Pennsylvania Rules of Civil
Procedure.
52. Denied. Forbes Chevrolet has paid all monies owing under
the "Pay Plan" to Plaintiffs as represented by their custom and
practice of employee compensation.
53. Denied. The allegation contained at paragraph 53 of the
Complaint represents a conclusion of law to which no responsive
pleading is required under the pennsylvania Rules of Civil
Procedure.
54. Denied. The allegation contained at paragraph 54 of the
Complaint represents a conclusion of law to which no responsive
pleading is required under the Pennsylvania Rules of Civil
Procedures.
55. Denied. All monies owing to Plaintiffs as represented by
the "Pay Plan" of Forbes Chevrolet have been fully paid.
WHEREFORE, it is requested that judgement be entered on behalf
of Defendants and againot Plaintiffs and that the Complaint be
dismissed with prejudice.
10
NEW MI\TTER
56. Defendants incorporate by reference their answers to
paragraphs 1-55 of the complaint, as if fully set forth in their
entirety.
57. All actions of George Forbes with regard to the three
Plaintiffs have been undertaken on behalf of Forbes Chevrolet, Inc.
and had a legitimate business purpose for that corporation.
58. George Forbes played no part in the interviews of the
three plaintiffs when applying for employment at Forbes Chevrolet
and was not responsible for explaining the terms of the "Pay Plan"
to them.
59. The allegations of Plaintiffs' Complaint fail to state a
cause of action against George Forbes individually.
60. plaintiff Miller left the employ of Forbes Chevrolet in
May, 1994, in order to go into the restaurant business in
Shippensburg, Pennsylvania.
61. plaintiff Miller has falsely represented that he left
Forbes Chevrolet to care for his ill parents in Missouri (see
Exhibit "B" appended to this Answer and New Matter).
62. Following his unsuccessful venture in the restaurant
business, Plaintiff Miller was re-hired by Forbes Chevrolet in
October of 1994.
11
63. plaintiff Cristillo voluntarily quit his position at
Forbes Chevrolet on the same day as Plaintiff Miller.
64. An Unemployment Compensation Referee determined that
Plaintiff Cristillo voluntarily quit his position at Forbes
Chevrolet, and that this voluntary quit had nothing to do with his
concerns over pay.
65. Pennsylvania had never adopted the covenant of good faith
and fair dealing with regard to contracts outside the realm of
Article 2 of the Uniform Commercial Code.
66. Consequently, Plaintiffs have failed to state a claim
upon which relief may be granted with regard to Count III of their
Complaint.
67. No contract, either in writing or orally, was ever
entered into between Forbes Chevrolet nnd the three Plaintiffs,
except as to the monthly draw which was to be extended to
Plaintiffs.
68. Plaintiffs were at-will employees entitled to be
compensated in accordance wi,th the custom and practice of Forbes
Chevrolet.
69. Forbes Chevrolet utilizes a "Pay Plan" to compensate its
salesperson.
70. ~'he terms of this "Pay Plan" were explained to the
Plaintiffs by one or more managcment-lcvel cmployees of Forbes
12
Chevrolet, including Sales Manager Charlie Stone.
71. Under the terms of the "Pay Plan," Plaintiffs were not
entitled to co~nission on the gross profit of "purchase" vehicles
because a portion of that profit was the result of Forbes
Chevrolet's ability to make exceptional buys of such vehicles.
72. Rather, the "commissionable" gross was the amount
established as the normal wholesale value of specified pre-owned
vehicles, and it was based upon this figure that sales commissions
were calculated.
73. This system was devised by Forbes Chevrolet in
conjunction with its sales staff.
WHEREFORE, it is requested that judgement be entered on behalf
of Defendants and against Plaintiffs and that the Complaint be
dismissed with prejudice.
Respectfully submitted,
Will am C. Costopoulos, Esquire
COSTOPOULOS, FOSTER & FIELDS
#10 22354
831 Market Street/P.O. Box 222
Lemoync, Pennsylvania 17043
phone: (717) 761-2121
A1'1'ORNC:Y FOR '1'1lE DEFENDANTS
Dated:
r 2 - 10.
13
/
PRO TfW/lOTARY
BEFORE
COMMONWEALTH OF PENNSYLVANIA JUL 20 9 "H
DEPARTMENT OF STATE 54 II 'SS
THE STATE BOARD OF VEHICLE MANUFACTt.ilt~RS,. ,
DEALERS AND SALESPERSONS aCe '.~' ':",J ." ~IJI/AL
UP""r""L
"".. ~rrAlilS
Commonwealth of pennsylvania, I
Bureau of Professional and
Occupational Affairs
.
.'
':
vs.
Docket No. 0297-60-95
File No. 95-60-01338
:y':~tfi~2:';/
Anthony S. Cristillo,
Respondent
NOTICE
A FORMAL ADMINISTRATIVE DISCIPLINARY ACTION P.AS BEEN FILED
AGAINST YOU. READ THIS DOCUMENT CAREFULLY, YOU ~tAy LOSE LICENSES.
CERTIFICATES. REGISTRATIONS OR PERMITS WHICH ~tAY BE IMPORTANT TO
YOUR PRACTICE OF YOUR PROFESSION, TRADE OR OCCUPATION. ALSO YOU
MAY BE SUBJECT TO THE LE~(ING OF CIVIL PENALTIES OF UP TO 51.000
PER VIOLATION.
IF YOU WISH TO DEFEND AGAINST THE ALLEGATIONS IN THIS ORDER TO
SHOW CAUSE, OR TO PRESENT EVIDENCE ON YOUR BEHALF IN MITIGATION OF
ANY PENALTIES WHICH ~tAY BE IMPOSED UPON YOU OR YOUR LICENSE,
CERTIFICATION, REGISTR.l'\TrON. PERt-lIT OR OTHER AUTHORIZATION TO
PRACTICE YOUR PROFESSION. THE PROCEDURES FOR DOING SO ARE SET FORTH
IN THE ATTACHED ORDER TO SHOW CAUSE. YOU HAVE THE RIGHT TO BE
REPRESENTED BY A.'1 ATTORNEY IN THIS MATTER'. ALTHOUGH YOU ~L=;Y
REPRESENT YOURSELF. YOU ARE ADVISED TO SEEK THE ADVICE OF A.'1
ATTORNEY. ALL PROCEEDINGS ARE CONDUCTED IN ACCORDA.'1CE WITH THE
ADMINISTRATIVE AGENCY LAW AND THE GENERAL RULES OF ADMINISTRATIVE
PRACTICE AND PROCEDURE.
, .'
n,..'_'._
":":.:", ' YOU ARE DIRECTED TO RESPOND BY FILING A.'1 ANSWER IN WRITING
WITHIN THIRTY (30) DAYS OF THE DATE OF THE ORDER TO SHOW CAUSE, A.'1
ORIGINAL AND TWO COPIES MUST BE SUBMITTED. ALSO. YOU MUST SEND A
SEPARATE COpy OF THE ANSWER , AND ANY OTHER PLEADINGS OR DOCUMENTS ,
TO THE PROSECUTING ATTORNEY NAMED IN THIS DOCUMENT, IF YOU DO NOT
FILE A.'1 ANSWER. DISCIPLI:-1AHY ACTICN MAY BE V..KEN AGAINST YOU
WITHOUT A HEARING.
ANSWERS A.'1D AN', OTH::R ?LEAnINGS SHOULD BE FILED .HTH:
DEANNA 5, WAr. r:N, ?ROTHONCT.;'''',
BUREAU OF ?ROF::SSIONAL .:lo,ND OC:UP.:lo,TICNAL ,:lo,Ft",:lo,IRS
124 PINE STREET, SUITE 200
P.AHRISBURG, ?A 17101
EXHIBIT
., .:D
COMliONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
BEFORE THE STATE BOARD OF VEHICLE MANUFACTURERS,
DEALERS AND SALESPERSONS
Commonwealth of Pennsylvania
Bureau of Professional and
Occupational Affairs
'.
"
vs.
Docket No. 0297-60-95
File No. 95-60-01338
Anthony S. Cristillo,
Respondent
ORDER TO SHOW CAUSE
AND NOW, this .?lOofJ.. day of J.J.Jt;- , 1995, Anthony S.
Cristillo (" Respondent") is hereby ORDERED TO SHOW CAUSE why the
State Board of Vehicle Manufacturers, Dealers and Salespersons
("Board"), upon consideration of the Factual Allegations and the
applicable law, should not impose the specified Penal ties. as
described below.
This act ion is brought pursuant to Board of
Vehicles Act, Act of December 22, 1983, P.L. 306, No. 84, iL?
amended, ("Act"), 63 P.S. 5818.1 et~. and will be conducted in
accordance with the Administrative Agency Law, 2 Pa. C.S. 55501-
508, 701-704, 63 P.S. 552201-2207; and the General Rules of
Administrative Practice and Procedure. 1 Pa. Code 5531.1-35.251.
IT IS FURTHER ORDERED that Respondent file an Answer to this
Order to Show Cause in writing within thirty (30) days of the date
of this Order stated above, in accordance with 1 Pa. Code 535.37.
FACTUAL ALLEGATIONS
1. Respondent is currently the holder of a vehicle
salesperson license in the Commonweal th of pennsyl vania. license
number MV-114642-L.
V(HFJlM liS
more than twenty-three (23) months, and to pay restitution of
approximately $23,497.38.
10. Based upon the foregoing, Respondent has violated the Act
at'Section 10(4) in that Respondent has pled, guilty to five (5)
counts of theft by failure to ~ake required disposition, fourteen
(14) counts of theft by unlawful taking, three (3) counts of theft
of leased property, one (1) count of insurance fraud, and one (1)
count of false reports to law enforcement authorities, all of which
are crimes involving moral turpitude.
PENALTIES
If the Board finds the Factual Allegations to be true and
correct, and determines that Respondent has violated the Act, the
Board may, in its dlscretion, impose one or more of the following
penalties:
. The revocation, suspension or other restriction of any
licenses. certifications, registrations, permits or other
authorizations to practice a profession held by Respondent in
the Commonwealth of pennsylvania, or the imposition of any
other disciplinary or corrective action which the Act
authorizes the Board to impose.
. The imposition of a civil penalty of up to one thousand
dollars ($1,000.00) for each and every violation of the Act.
Where criminal proceedings are a basis for a violation of the
Act, each ccunt for which the Respondent was convic:ed may be
considered a separate violation of the Act.
3
V(H ,R", "I
PROCEDURES
All proceedings are conducted in accordance with the
Administrative Agency Law, 2 Pa. C.S. 55501-508, 701-704; 63 P.S.
552201-2207; and the General Rules of Administrative Practice and
Procedure, 1 Pa, Code 5531.1-35.251. RESPONDENT'IS HEREBY ORDERED
TO FILE A WRITTEN ANSWER TO THIS ORDER TO SHOW CAUSE WITHIN THIRTY
(30) DAYS OF THE DATE OF THIS ORDER. The Answer shall specifically
admit or deny each of the Factual Allegations made herein, and
shall set forth the facts and state concisely the matter of law
upon which Respondent relies. If Respondent fails to file an
Answer within the time allowed herein, the Factual Allegations may
be deemed admitted, and the Board will issue an order which may
impose penalties as set for:h above.
If Respondent desires a formal administrative hearing, at
which he may defend against the allegations in the Order to Show
Cause or to present evidence in mitigation of any penalty which may
be imposed upon Responden: or any of Respondent's licenses,
certifications, registrations, permits or other authorizations to
practice a profession, a wri:ten request for hearing must be filed
within thirty (30) days of t~is Order. IF RESPONDENT FAILS TO FILE
A WRITTEN REOUEST FOR HE:"RING WITHIN THIRTY (30) DAYS OF THIS
ORDER. RESPONDENT WILL BE DEEMED TO HAVE WAIVED HIS RIGHT TO A
HEARING AND FINAL JUDGMENT HAY BE ENTERED WITHOUT A HEARING,
If a hearing is scheduled, Respondent will be notified of the
specific time and place of the hearing. The hearing will be held
before the Board or its duly designated Presiding Officer, in
accordance with 1 Pa. Code 535.185. Respondent may appear, w~th or
without counsel, offer testimony or other evidence on his behalf,
4
confront and cross-examine the Commonwealth's witnesses.
Answers, requests for hearings, preliminary mot ions, protests,
petitions to intervene, or any other pleading must be filed with:
Deanna S. Walton, PFothonotary
Bureau of Professional and Occupational Affairs
124 Pine Street, Suite 200
Harrisburg, PA 17101
717-772-2686
Also, you must send a separate copy of the Answer, and any
other pleadings or documents, to the prosecuting attorney named
below at:
P.O. BOX 2649
HARRISBURG, PA 17105-2649
Notices and petitions to intervene must be filed within thirty
DO) days of the date of this Order, unless in e:<traordinary
circumstances for good cause shown, a later filing is authorized by
the agency.
BY ORDER:
BUREAU OF PROFESSIONAL AND
OCCUPATIONAL AFFAIRS
,
A .-:-l t ' ~-___
avid L. Ca lihan
Prosecuting Attorney
Commonwealth of Pennsylvania
Bureau of Professional and
Occupational Affairs
P.O. Box 2649
Harrisburg, PA 17105-2649
(717) 783-7200
DATE: 1/lyjqc;
,I
I
I
!
5
V(H ,'1M SIS
COHHOIIWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
BEFORE THE STATE BOARD OF VEHICLE ~~FACTURERS.
DEALERS AND SALESPERSONS
Commonwealth of Pennsylvania
Bureau of Professional and
Occupational Affairs
vs.
i'\ 1 ~1 ....
Docket No. C',.... { - 60-95
File No. 95-60-01338
Anthony S. Cristillo,
Respondent
CERTIFICATE OF SERVICE
I, Da"::d
h<'!=eb'l ce=tify that I hil'/e this :JB.J."-.
~~~~ se~v~d a true and
da 'I ~ f
L, Call:.::a::
\ ,
! l' (', .
""--' "'i
correct co;:y of
.......~ .:_-,:).-.....;-.-.
....- ...-- -::'-'-"::
Nct:.:e and O=de= to Show Cause upon
a:: pa~:~25 ~: ~~:~~= ~~ :~:s ;~=~~~J:~g :~ a~==~ia~ce w:ch the
:"-:quir-em-2;'.:,s ':: 533.3:' ...- ::-.:::::0;2:1-:::-31 Ru.les c:: ";~mi:1istrative
?:-acci-:: and ?:;::C'2d.~~~, :. ~3, ":::de 533.31 (:-e:'aci::g to se::-vice by
:::e ag-:::'.:y' .
I,:
F!RST C~ASS ~\I~, ?CS~~~E PRE?A:~:
.~'1:::'.:r.:: S. C:-:3::::'.:
Farb~s Chevr::e~ :~:,
34~0 Ha:-::da:'d ::-:'~2
:a:np Hi:~, ?';
::3.:"::":'3::1.;:,-::,
-,
::'."'\
: ....:. J: -.: -j -. )
( 7:' 7) -:-: 3 w ";':; C IJ
DLC/bls
. : 1 ':- . ~ .l.~.
"" "\1. 1'.'.1
.. '1~;ll:'"
,!.:.::.:'E~~.,:r
, '
i ....".__...,:~..
.
. ,
TERRY L. DAVIS
C"'(; PRoe'IICN OF;'CE~
94-8'}6
JUDGE CLARENCE C. MORRISON
DAUPHIN COUNTY
PROBATION AND PAROLE OFFICE
~(Tl\a~' "1.~.IA~ O"ICI IUILOING III "AIIIT "lilT 'lfTH 'lOCI HA..lllu.'. ,4.
ULI'..OMI: 11111 US,",, ' foil "..; l.aQo.)t!...~QU
lUlLING "'aoaUII ':0, 101 IIH ,,",UlnUII', '1"'4"\''U"'''' 1;10'
Au.,ust 25, 199.1
Personnel M~nge~ (Confiden:ial)
Forbes Che'/~ole:
3400 Hartzdale D~ive
Cam;: Hill, PA 17011
-
Re: .1.:1~hon:r C=,~s,::llo
53:1 165-S6-5;5J
Dea::- SL::-/Hadame:
Tna aCove rc:cre.nc~d l~l~:v:.cua: ha:i a:"::'~c':' cur d-a;:a:cman:
t~l: ~~!!~a :5 ~m;l:y~d ~y you~ =:re;a~7, :: 15 my
r~!~c~s:.tll::y :: ~n~~r~ you t~!: :~~ S~="!:: 15 ~n~c:: :~::
,. . -=.-~o
P~C~!Cl~~/~a~=_c :i~~~=V:'3:':~ ~~::..
~=:: C~! a~c':e re~~=in:~i c::a~s~!.
?:~~3: =:~:~;: m: wlt~ ar.y ~:::~=:=ms ~::
j'~~ m!:! ~.!':: I
-"......~ ,. =
............. ...
.:. - ..) -.:r,' "
_...t",__.. .;
\
il .V.'~. _
l_..=~ ~:.::-=~.
, ..:.. 1 .
....._~... -
?!:':~-: ::::.:~:
r-.., '
,..,'''", ,..... ,," .
....' , .,.t"''''''r
1. , ,,,...... . J W .
~. 1/l'l J..' I .. ," . ....,
t....~AJnQ
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'(,;1.[:';1\)' "''''
.JO" co,. ".::G10-,
~ {J~lJ1l:R r
EXHIBIT
I __E_____
.,.
.j..'
1'1 I': ~"'"
LI.
IN THE COURT OF COMMON PLEAS
OF CUMUERLAND COlINTY, PENNSYLVANIA
CARL SCOTr MILLER. un individuul : CIVIL ACTION. LA W
ANTHONY CRISTILLO. nn individllul, and:
BRIAN C. PEPPERD. IIn individllul,
Plllintitl's : NO:lJ6.1916 CIVIL TERM
\'5.
GEORGE FORBES, an individnul. nnd
FORBES CHEVROLET, INC.,
Defcndnnt
: JURY TRIAL DEMANDED
AND NOW. this
OIUlER
Ii dny ur:_~)g,i?J~______. Il)~lt it is
hcreby Ordcrcd tllllt the Pctitionlor I'crmissive Joindcr )lnrsuunt to-l2 PU.C.S. ~2229IU) is
grant cd IInd thnt Kcnncth W. Smith is hcrcby uddcd as n Pluinliff in ~\(!' ~~tant actiun.
) "
Ii I ,/
""-A L"~tL~~_-- _ __
; J.
,
(
IN TilE COllin' OF COMMON I'LEAS
OF ClJMIIEIU,ANI> COlJNT\', I'ENNSYLV ANIA
CAI{I. scorr MILLER,nn indil'idunl : CIVIL ACTION. LA W
ANTIIONY CIHSTILI.O, nn individulIl, IInd:
BRIAN C. PEPPERD, IIn individunl,
Plllintifls NO:lJ6.llJIIJ CIVIL TERM
Vs,
OEOIWE FORBES, nn iudividuul. und
FORBES CIIEVROLET, INC..
Dclendllnt
: JURY TRIAL DEMANDED
I'ETITION F(m IWLE AIISOLlJTE
Pctitiuncr, by IInd Ihrnugh undcrsigncd counsel. hcrcby rcqucst thllt thc Rulc
issucd upun Dclendlluts/Rcs)lundcnlS by Ihis Ilonornblc Court on Scplcl11hcr II, IlJlJ6 hc
mlldc nbsohuc. DcleudllnllRcspoudcnts hnl'c nol shuwn why PClitioncr is nut clllitlcd to
Ihc rclicrrcllucstcd wilhinthc limc pcriud sct liJrlh inlhc Rulc.
Rcspccllilll)' submillcd,
McORA W, IIAIT & DEITCIIMAN
/~ / /
B~# '/ '- //
. J~ nflel:-C, ri~itch-ii~~n --
PII. I.D. /I 7277lJ
~ I.ihcl1y A wnuc
Cllrlislc.PA 17013
(717) 2-11).-1500
Dlltc: I ~16IlJ6
IN TilE COURT OF COMMON PLEAS
OF CUMDERLANI> COUNTY,PENNSYLVANIA
CARL snrrr MILLER.lIn individllnl : CIVIL ACTION. LA W
ANTHONY CRISTILLO.lIn individlllll, Ilnd:
URIAN C. I'EPPERD. IIn individlllll,
I'llIintifls : NO: 96-1916 CIVIL TERM
\'3.
GEORGE FORBES, nn illdividlllll, nnd
FORBES CHEVROLET, INC..
Dcfendant
: JURY TRIAL DEMANDED
OlmER
AND NOW, this
dnyaf
,I91)6,II)1on
considcmtion ofthc nllachcd motion, n hcnring is sct lor thc
day of
. 1996.
nnd timt Attorncy Costopoulos hud cntcrcd un uppcarnncc in unolhcr suit
IIgllinst Forbcs Chcvrolct, Inc. nnd Gcorgc Forbcs which wns tilcd in thc
Unitcd Stntcs Court lor thc Middlc District of I'cnnsylvlIniu.
3. Thc IInswcr tilcd in this I11I111cr WIlS signcd by Attorncy Costopnulos
rcprcscnting Costopoulos, Fostcr & Fields nnd rcplicd to thc counts hy
Cristillo IIgllinst dclendnnts in grcnt detnil. TIle subjcct mnttcr of thc rcply
(parngrnph 10) rclntcs to nnothcr I11I111cr in which Attorncy Costopoulus
rcprcscntcd I'llIintit1' Cristillo.
4. TIlC actions in which Attorncy Costopoulos prcviously rcprescntcd I'lnintiff
Cristillo lIrc dockctcd lit No. 2168 C.D. 1993 nnd No. 291 C.D. 1994,
cril11inlll division, of the Court of C0l11111on Plclls of Dauphin County,
Pennsylvnnill.
5. Thc fcc ngrccmcnt covcring Attorncy Costopoulos' rcprcsentlltion of PlllintitT
Cristillo is nllllchcd hcreto as Exhibit "B."
6, Thc criminlll IIllcgntions which wcrc allcgcd IIgninst I'llIintin' Cristillo
provided II bnsis tor thc Stntc Board of Vehiclc Mllnufncturcrs, DenIers nnd
SlIlcspcrsons to launch un invcstigntion into thc stlltus of I'lnintiff Cristillo's
salespcrson's Iiccnsc.
7. This investigntion WIIS thc subjcct of parugrnph 10 of Dcfendnllt's Answcr.
8. Attorncy Costopoulos nnd othcr IIltomeys lit his finn, pnrticulnrly JCIIIlllC
Bcrcznicki nlld Allcn Welch, g.lincd ccrlnin clicnt conlidcnccs nlld
inlill'll1l1tion which IIlIlY lI11ect their rcprcscntllliunol' Forhcs Chcvrolct, Inc. in
this IIlllttcr.
9. "At cOl11l11on law. IIn attorncy uwcs II liducillry duty to his clicnt; such duty
dClllllnds undividcd 10YIlII)' nnd prohibits thc IIttornc)' I'rolll cngllgin in
conllicts of intcrcst.,.... MlIritrnns v. PCllllcr, 1IlIIIlillon & Schcctz, __ I'll.
,602 A.2d 1277, 1283 (1992).
I (), "I A )ttorncys will not bc pcrl11ittcd to rcprcscnt connicting intcrcsts unlcss
thosc intcrcsls ngrcc to bc so rcprcscntcd. Thc tcst in such cnscs is not thc
lIclunlity or contlicl but thc possibility thllt cuntlict 1lI1IY llriSC." Jcdwllbnv v.
I'hillldclphill Trnnsllortation Co., 390 Pa. 231, 135 A.2d 252 (1957). citcd in
Scilert v. DUl11ntic Industrics Incomorntcd, 413 Pn. :95. 197 A.2d 454. 455
(1964).
II. "A Inwycr owes n duty 'to nvoid not only professional il11propricty butnlso thc
nppenrnncc of impropricty.''' Univcrsnl Athletic SlIles Co. v. AllIcriclln GVI11,
Rccrcntionnl & Athlclic Equipmcnt Comorntion. Inc.. cl. aI., 357 F.Supp. 90S.
908 (W.D. PII, (973)
12. "IAJnnttorncy should not bc tClllptcd 'inthc intcrcst of his ncw clicntto tllkc
lIdvantllgc of inlorl11l1tion dcrivcd frolll cunl1dcnccs plnccd in hil11' by his
timllcr c1icnt...... Id.
13. Thc Rulcs or ProlessiOllnl COllduct, Rulcs 1.9 IInd 1.1 () pCl111ill to conllicts or
intcrcst 1I1ld c1cnrly cnclllllpnss ton1lcr clicnts.
14. Although thc Rulcs of Prolessionlll Couduct do govem contlict uf intcrcst
situatiuns. disciplinnry nction is nut Ihc cxclusivc rcmcdy. Scc Maritrnus v.
~lpcr, 1I1IIIliltun & SchcclZ,_, ' Pn.__~" 6U2 A.2d 1277 (1992),
15. This is thc typc of cnsc whcre nn nttulllcy whu hns rcprcscntcd unc c1icnt in II
lill'lllcr piccc uf Iitigntion Ihcrcnl\cr hlkcs n IlIw suit ns nn ndvcrsc p1ll1y tolhnt
c1icnt in which conlidcntinl intlll'lllntion dcrived in thc lirst cnsc clln possibly
be uscd. Cf: Univcrsnl Athlctic Snlcs Co. v. Al11criclln Gvm. Rccrcntionnl &
Athlctic EQuipmcnt Corporntion, Inc., ct. nl., 357 F.Supp. 905, 908 (W.D. Pa.
1973).
16. In nddilion. Plnill1itT Cristillo suld II ncll' ChcvllIlcl Suhurbnll from Forbcs
Chcvrolct to Allolllcy Costopolous. ordcrcd in Dcccmbcr of 1993 and
dclivcrcd in Mllrch of 1994. This past busincss trnnsnctionmny nlso give risc
to thc nppcnrancc ofil11propriclY in this mnller.
17. Plninliff Cristillo continucs to objcctto AllOIllCY Costopoulos nnd his t1nll's
rcprcscntntion of thc dcfcndnnts in this mallcr IInd hns signcd nn affidnvit to
thnt ct1cct. (Scc Exhibit "c").
18. Plnintill' Cristillo's clnims nrc incxtricnbly cntwincd with thc c1l1ims of thc
othcr plnintills nnd in thc intcrcst of judicinl cconomy, cllnnot bc rcmoved
fromthcl11.
CARL SCOTT MILLER,
ANTHONY CRISTILLO, and
BRIAN C. PEPPERD
PLAINTIFFS
V,
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION-LAW
GEORGE FORBES AND
FORBES CHEVROLET, INC.,
DEFENDANTS : 96-1916 CIVIL TERM
IN RE: MOTION TO DISQUALIFY COUNSEL FOR DEFENDANTS
ORDER OF COURT
AND NOW, this t~ day of July, 1996, the petition to dIsqualify defense
counsel, IS DISMISSED.
By the Court, ?
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Edgar B. ayltly, '
Jennifer C. Deltchman, Esquire
For Plaintiffs
I
William C. Costopoulos, Esquire
For Defendants
)kllL
7 .1I-'1~
;saa
CARL SCOTT MILLER,
ANTHONY CRISTILLO, and
BRIAN C. PEPPERD
PLAINTIFFS
V,
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTlON.LAW
GEORGE FORBES AND
FORBES CHEVROLET, INC.,
DEFENDANTS
96-1916 CIVIL TERM
IN RE: MOTION TO DISQUALIFY COUNSEL FOR DEFENDANTS
OPINION AND ORDER OF COURT
BAYLEY, J., July 16, 1996:--
Plaintiffs, Carl Scott Mlller, Anthony Cristlllo, and Brian C. Pepperd, have
Instituted this suit against George Forbes and Forbes Chevrolet, Inc. Plaintiffs are all
former salesperson employees of Forbes Chevrolet, Inc, In counts alleging breach of
contract, fraud, breach of contract of good faith and fair dealing, and a violation of the
Pennsylvania Wage Payment and Collection Law,' plaintiffs seek damages In excess
of $25,000 for commissions and other payments that they allege defendants owe to
them. Defendants are represented by the law firm of Costopoulos, Foster & Fields
which has represented Forbes Chevrolet, Inc. for many years. Plaintiff, Anthony
Crlstlllo, has flied a petition seeking to disqualify that law firm from rspresenting
defendants, Plaintiffs Miller and Pepperd concur, A hearing was conducted on June
26, 1996.
In the latter part of 1993, Anthony Crlstlllo retained the law firm of Costopoulos,
Foster & Fields for representation regarding criminal charges that had been filed
1. 43 P.S. ~ 260.1 ill seq.
96-1916 CIVIL TERM
Information acquired by the lawyer In the course of representing a
client may not subsequently be used by the lawyer to the disadvantage
of the client. However, the fact that a lawyer has once served a client
does not preclude the lawyer from using generally known Information
about that client when later representing another client.
In Trlttln v. DISalvo, 434 Pa. Super. 326 (1994), the Superior Court of
Pennsylvania utilized the "substantial relationship test" to determine, based on the
nature and scope of prior representation, whether confidential Information that might
have been gained In the first representation may be used to the detriment of the
former client In the subsequent action. The testis:
If the client In the prior representation might have Imparted confidential
Information to his lawyer to aid the lawyer In dealing with particular
Issues, and If Issues arise In the second suit which would permit the use
of such confidences against the original client, the substantial
relationship testis met, and disqualification Is required.
In the case sub judice, Crlstlllo and the other two plaintiffs are seeking
commissions and other payments they allege are owed as a result of their former
employment as salespersons for Forbes Chevrolet, Inc, There Is nothing In the
record sufficient for us to conclude that the criminal charges for which Costopoulos,
Foster & Fields represented Cristlllo, and the collateral civil enforcement proceeding
against Crlstlllo, or any confidential Information that Crlstillo told to members of the
law firm have any relevance to this case. This Is not the same or a SUbstantially
related matter to the subjects of the prior representation, Based on the contractual
relationship between the parties, either the monies or part of the monies claimed as
owed to plaintiffs by defendants are owed or they are not. The substantial
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b). that the same information. if Plaintiffs are
entitled to it. is readily available from Defendants.
This request is made in bad faith, with the intent to
embarrass Defendants with third party suppliers of used
.
automobiles.
c). that Plaintiffs have no entitlement to the
information souoht. The crux of the underlying lawsuit is
whether Plaintiffs were denied any compensation to which
they were entitled under the oral contractual agreement
known as the "pay plan." In depositions of the four
Plaintiffs, each agreed that it was a management
prerogative to unilaterally establish the pay plan.
Defendants' position, as expressed in their Answer and
New Matter (paragraphs 12, 17 and 71), is that the pay
plan was based not upon the purchase price of used
vehicles bought at auto auctions, but upon a "go" figure
established for these vehicles and upon which the
salesmen's commission was based. Accordingly, the
purchase price for such used vehicles is irrelevant to
the lawsuit, as it was the custom and practice at Forbes
Chevrolet - and, hence, the contractual agreement - not
to compensate salesmen for exceptional buys made at such
3