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IN TJ-I~ COUR'l' OF COMMON PLlIlMJ OF
CUMa~RLAND COUNTY, PlIlNNSYLVANIA
$16 . '1'1 '?! fa,m..t. ~,,,.,
No, (!'I. V l't 1996
MS I MVMClIlP PM'A
SOLUTIONS, INC,
pldnl;iff,
OBI RlIlTlIlNTION CORPORATION,
Defendant
CIVIL I\C'1'ION
NO'l'ICE
YOU HAVE BEEN SUED IN COUH'l'. If you wish to defend against
the claims set forth in the following pages, you must take action
within twenty (20) ddays after thin Complaint and Notice are
served, by entering a written appearance personally or by
attorney and filing in writing with the Court your defenses or
objections to the claima oet forth against you. You ore warned
that ie you foil to do 00 the case may proceed without you and a
judgment may be entered againot you by the court without further
notice for a.ny money cJ.l1imed in the complaint or for any other
claim or relief requested by the plaintiff. You may lose money
or property or other rights lmportant to you.
YOU SHOULD TAI<E 'rillS PAl'EH '1'0 YOUH LAWYEH AT ONCE. IL" YOU
DO NO'!' I-lAVE A LAWYJ::R OH CANNO'l' AL"FOHD ONE, GO TO OR 'rELEPHONE THE
OL"FICE SET L"ORTH Bt;;LOW '1'0 FIND OU'l' WHERE YOU CAN GE'1' LEGAL HELP.
COURT ADMINISTIW1'OH
4th L"laor, Cumberland County courthouse
1 Courthouse Square
carlisle, FA 17013
(717) 240-6200
NOT I C I A
Le han demandado a usted en la corte. Si usted quiere
defenderse de estas demandas expuestas en las paginas siguientes,
usted tiene viente (20) dias de plazo al partir de la fecha de 1a
demanda y la notificacion. Usted de be presentar una apariencia
escrita a en persona 0 por abogado y archivar en la corte en
forma escrita sus defensas 0 sus objeciones alas demandas en
contra de su persona. Sea avis3da que si usted no se defiende,
la corte tomara medidas y puede entrar una orden contra usted sin
previa aviso notificacion y por cualquier queja 0 alivia que es
5, Defcndanlls cnllalled Inlhe buslncu, Inlllr alia, of computer BllAnnlna Ind
Imlslnl! Ind Is a cOIllJllllllor of 1l1ulnllf1,
6, Conatance IleAm Is Ihe President And sole shAreholder of Defendanl,
D. FACTUAL IIACKGROUNI)
7. DefendAnt, on May 13, 1996, entered Into An Agreelllent with Ihe Defel\lC
Logistics Agency ("D~A") to supply cOlllputer sCAnning Rnd hnaglng services for the
Defenae DIstrlbullon Region Enstln New Cumberland, PennsylvRnla ("DLA Asreemenl"),
A tlUe and correct copy of the DtA Agreement Is Allached hereto as I.!Khlblt "A. "
8. Under the tenns of the DtA Agreement, DefendAnt Is required to timely scan
and Imase documents for the DLA.
9. Under the DLA Agreelllent, II was eSlhnaled lhat Defendant would scan
approKlmalely 3,000,000 pAges per yeAr, at A rate of 23 cents per page, TIle Agreement
further provided thAt DSI would IndeK approKlmalely 2.000,000 documenls per year at rale
of 8 cents per line. The Asreemelll WAS for one yeAr, wllh An option for up to four
additional yem,
10, Upon Infonnallon And belief, Defendalll WAS ullllble to effectively lllcct Ita
contractual obligations to DLA.
11. As of the end of June, 1996. Defendant was In serious financial difficulty.
12. Plalnllff and DefendAnt were acquAlnled through PlAintiffs provision of limited
services to Defendant In 1996.
13. As of the end of June, 1996, DefendAnt owed PIAlnllff $1~,000 for services
rendered by Plaintiff to Defendant. SAid Amount hAS not been paid by Defendant.
- 2 -
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14, In lul\II, 1996, OOrlllldQIIl nnd Pllllnllff llll\.llrcd 11110 1\1I&01111110111 for Plllnll" 10
PUrch11ll Iho OLA Agl'llalllont rrnm Ocfandnnllllld 10 III1Ullla l'IlapollalbllllY of pcrronnancc
or IJIlI OLA Agl'lllllllant,
15, 011 luna :l8, 1996, Oal\mdant nnd IIlnlntll'l'llntan:d Inlo nn ornl agreemanl for
Plalntlrr 10 purchase Iha DLA ^gNllmenl and III afisuma n:sponslblllty of perronnancc or the
DLA, as wall as 10 llfi5umc $158,862,04 In Defendnlll'fi debt, Illnlnllff nlso Ilgn:ed to pay
Defcndant rony per cent (40%) or Ihe nctl'rol1ta Ilencraled by Iha DLA Alln:emelll,
16, Confilstcnl wllh the tenns of the alln:emcnt between Defendnlllllnd Plaintiff,
Plaintiff took pOfifiCulon of Defendunl's ficannlngllnd Imuglng equlpmcnl.
17, Conslslenl Wllh the tenm 01' the ugn:emcnt between Defendnnt Ilnd Plaintiff,
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Plaintiff began to directly supervlfie Defendnnt's employecfi.
18. Conslfitent wllh the temls of the agNcmcnt betwecn Dcfendanl and Plaintiff,
Defendnnt began to n:fer nil Inquiries conccrnlng perfonnllnce under the DLA Agreemenlto
Plaintiff,
19. Confilfitent wllh the tem1S of the ngreemcnl betwecn Dcrendont and Plalntlrf,
Plalntlfr began retrieving, ficnnnlng nnd hnnglng DLA documents pursunntto the terms of the
DLA Agn:ement.
20, Confilstent With the tem1fi of the ogreemcnt between Derendant and Plalntlrf,
Defendant began forwarding documentfi and Information to Plalntlfr,
21. In July, Plalnllff invested ovel' $120,000 In time and purchase of equipment
and supplies to meet 115 obllgallons under the terms or the agreement between the parties.
- 3 -
22, In thll COUl'lllot 11II mumptlon ot work pUl1uantto thll DLA ^srnment,
Plaintiff Icamed that Dctendont hod helln uslns lIIellolsoftwlll'll ond lhatlt had llnsaaed In
Improper and lIIcllol conduct,
23, In thc course of Ita lIISumptlon of work PUrsUlInt 10 Ihe DLA ^Sl'llement,
Plaintiff ICllrned tlllIl Dcfendllnl hlld moJor compllllnce problems,
24, On Suly 12, 1996, Defendant unllowrlllly lennhulled Ihe lIgreement llctween
the partlcs lInd directed Plolnllff 10 relurn nil equlpmenland suppllcs previously scnt to
Plalnllff.
25, PllIlntlff llmely relurned 011 of Defendanl's equlpmcnllo Defendllnt and offered
to lulsl Defendant In reslorlnlllls opmllons, Defendanl did nol conlllct Plalnllff to request
mlslllncc In reslorlng operllllons,
26, Plalnllff hlls senllnvolces 10 Defendllnl for servlccs rendered for tllc llcneflt of
Defendanl. ^ lrue and correcl copy of lhese Involccs lire lIlllIchcd hcreto as ExhlblL "8,"
The tOllllamount due lInd owing PllIlnllff punullnt 10 tllcse Involccsls $148,502,50, ^
summary sllltemcnlls allllched hcrelO as Exhlbll "e,"
27, Defendanl's unllaterllllermlnDllon of Ihe agreemcnt belween the partlcs haa
caullCd Plaintiff subslllnlla\ monelllry Bnd IrrcparatM harm InclUding, but nOlllmlted tol
a, loss of anllclpllled prof11s;
b, 1088 of buslnen opportunllY;
c, Present economic loss, which Is uncertain at Ihls tlmc, and future
economic loss, which Is presenlly Incalculablll,
. 4 -
28, plaintiff hus demande:d Ihut Dufendulll pl:rfonn Ita agreclllclIl wllh Plaintiff and
thnt Dufcndolll poy PIlIlnllfl' fi)r Ihe: ~crvlce:H rendercd III Detimdunl. ~ ElIhlblls "D" and
"E," allllched herelo,
29, Defcndllnt hils rcfuHcd to cilhcr pcrformllH ugrcemCJl! wllh Pluhulff Or pay
Plaintiff for thc BervlccH rcndcrcd hy 11111111111'1',
COUNT II IIImACII OF CONTItAC1'
30. 111l11nllff hlCOI'pO/'lllCS hy rcfcrcnce: the: IIve:l'lne:lll~ set fOl1h In Paragraphs 1-29
of the COlllplllllllll~ If ~ct forth In full.
31. The oralllgrccmclll rcachcd hy thc pllrtlc~ WIlS supporlcd by consideration.
32, The: IIgrccll1cnt he:lwccnlhc pllrllcs WIlH thc rcsult of un oncr by De:fendllllllO
convey the: DLA Agrccmcnt IlIld IIJIIIIllIIT's communlcatcd IICCcptllncc of lhc offcr.
33. Dcfcndllnl'H IIcknowlcdgcmcntllnd undcrslllndlng Oflhc cxlstence IInd lenllS of
the agreemcnt IH cvldcnccd by Dclcndllnt' s (1) ll'UlIslcr of c1lulpmcnt IIl1d perH<lIlncl to thc
conlrol of Plulllllff; (2) rcferrlll of crcdltors IInd customen to Pllllllllff; (3) neglect of IIll
obligations undcr the Dl.A Agrecmcnt IInd knowlcdgc of 1I11I1r1l1ff's llSSulIlptlon of the
obllgoliolls undcr lhlltllgrccmclll; IInd (4) fllllurc 10 slItlsfy dclJ16 owcd to Plaintiff duc to
Plaintiff's forglvencss of lhosc dcbts llH II rcsult of thc IIgrcclllclll bctwcen Pllllnllff and
Defendant.
34.
35,
Plaintiff,
Dcfendant has IIlllle:rlally hrcaL'hcd thc agreemcnt between the purtles.
Defendant's breach has reHulted In SUbSll1111lal damages and lost protlllllO
- 5 -
WHl!Rl!FORl!, Plllntlff dcmulul. Ihll Judllllllllll bet cn\lll'lld In II. flyor Ind .g811l11
Dllfclulllll for cOlllpllnlllory dllllOllll. In CKcc~a Ill' Iha urhllrulllln lhnll. of Ihla Court,
IOlIllthllr with cqultlblc l'llllef flllul/I.I Oofcndlm, II. Willi ua Inhll'll61 und coni..
COUNT III QUANTUM MEltul'l'
36, 1)lulntllJ Incorporolca by refercnce thc UVllrl1lcJlls ael forth In Plrullr.phll-35
of Ihc Complulnl la If 5el forth 1111\111.
37. An orul UIll'lleI1lCIllCKlsled belwccnthc purtlc..
38, Dofendunt brcllched thc orulllllreemcnl.
39. Prior 10 ~)cfcndulll's unllalcrllllcnnlnllllon of Ihc orulllllrecmelll belwcen Ihe
partlea, Plllntlff Inycated a subsluntllll sum Imd pcrformcd all of Ita obllgallons undcr Ihc
alll'llemcnl,
40. Defcndllnl owcd 0 dUlY III Pllllmlff 10 perfonn lis ol1l1gllllons under Ihe
agreemenl belwcen Ihe pllrtles,
41. Plllnllff has suffered subslnnllall1lonelnry IInd Irreparable hllnn ua a I'llsult of
Defendllnl'S failure to meet 115 obligations under Ihe agreement belwecn Ihe parties.
42, Defendant has been unjustly enriched Ilnd has received beneOls 10 which Ills
nol entitled as a result of Plaintiff's perfonnance of lis obllgallons under the agrecmenl
belween Ihe partlea.
WHEREFORE, Plalllllff demands Ihal Judgmcnt be entered in 115 fayor and agalll5t
Defendant for compensalory dumages In eKcesa of Ihe IItbllratlon limits of Ihls Court,
logethcr with InJunctlye relief u80lnsl Defendant, B$ well as Intel'llst nnd cas Is.
- 6 -
COUNT 1111 I'ROMISSORY ESTOl'I'EL
43, Plolnllff Incorporptes by refcrence Ihc lIVl!nllcnts sctforlh Inl1orBllrophs 1.42
of thll Complolnl PS If sel forth In full.
44, In nellollptlnglhc llllrccmclll bctwccn Plulnllff llnd Defcndonl, Defendpnl mode
mpterlpl sllltemen15 or fucl undlnduccmenls Illl'lulllllfl' cOlu:crnlng Defendunt's InlcntlO
enler the ollreemelll unLIl15 purposes for ;)olnll 60,
4', The stptemen15 ond Induccnll1ll1S made by Defendunlllre untrue.
46. Dcfendolll kncw or should hpvc known the slutements pnd Inducemcnls to be
untrue,
47. Defendalll failed to exercise reusonuble curc und competcnce Inl11uklnllthe
sllltements pnd Inducements to Plolnllff,
48. Defendolltmpde the slalemellls ond Inducemenls 10 Plolnllff for lhe purpose of
persuading Plplnllff to elllel' Imo lhe ogreement.
49. Defendant knew or should huve known that Plolnllff would rely upon
Defendont's sllltements Bnd Inducements,
'0, Plaintiff relied upon the statemenls and Inducements made by Defendpntln
entering Into the Bllreemelll,
, 1. Plaintiff has suffered subslllnllBI harm 115 a result of Its rellpnce upon
Defendpnt's misrepresentations pnd Inducemcnts,
WHEREFORE, Plplmlff demands that Judllment be elllered In Its fpvor pnd ogalnsl
Defendant for compensPlory dampges In excess of the Brbitrption limits of this Court,
together with Injunctive relief Bgalnst Defendpnt, as well as Interest and costs.
- 7 -
)
,
COUNT IV, DEFAMATION
52. Plaintiff InCol'\lOrBles by refcrence Ihe avel1nCIllS set forth In Parag,nphl 1.51
of Ihe Complahll as If set forth In full.
53, Defcndanl, lhrough lIs llmCerS, reprcsenlallves and allents havel made falfIC and
defamBtory sllllemenls aboul 1'IIIInllff IInd hs omccrs and management personnel,
54, The false IlI1d dcfamahll'y sllltemellls hy Defendant hllve harmcd Plalntlfrs
reputlltlon Inlhe cllnnnulIlly In which II Is located and In which it does bushless,
55. The Inlsc and dcfanllllory slatemcnls by Defcndant were hllcnded to haml
Plaintiff and 10 dCler olhcrs from doing busincss wllh 1'IIIIIIIIfl'.
56, Thc flllsc and dcfanlillory sHllcmclllS of Dc fend anI wcre not privileged,
57, The flllsc and dcfamatory Matcmcnls of Dcfcndant were made nellllgently or
wllh reckless disregard for Ihc lI1Jth.
58, Plalnllff has bccn gencrully IInd spcclally hanned by the false and defamatory
slBtemcn15 made by Defendant.
WHEREFORE, I'lalllllff demands Ihat Judgmcnt be cnlered In Its favor and allailUit
Defendant for compensalory dllmagcs in exccss of Ihc arbitration limits of this Court, as well
as lnlllrcst and COS18.
COUNT V: SI)ECIFIC PERFORMANCE
59, Plaintiff Incorporates by reference the averments set fonh in Paragraphs 1.58
of the Complaint as if set I' OM in full.
.8.
60. PI.lnll" and Defendanl volllnlarlly OhlDrcd Inlo In ol'lll lammOnt plll'lUanl1o
which, Imona olber Ihlna., Plalnllff wa. 10 purchallD Ihe com pliler Imlslnll bll.lnc.. of
Dofllndanl,
,
f,dl,
61, The oral narcclI\I:n1 reached by Ihe parties wu suppurted by conshlerallon,
62, The oral aarecmelll bclween Ihe pnrtllls WP5 Ihe relllllof an offer by
DcfcndanllO selland Plalnllff's commulllcated ncceplllllce of Ihe offer.
63, Plnlnllff pcrfonncd III nil of lis obllKallollll ullder Ihe allreemenl prior 10
,.,
, ,
"
,
,'t
Defendant's ulIllnlerallennlnallon of Ihe allrecmelll.
,0'1 \
"
64, Defendanl failed lomeellls obllllallonl under Ihe allreement belween the
'I',
, II
I
. .1
parties,
,~i i
"I
\i
6', The DLA conlracl, which Plalnllff was 10 purchase under Ihe allreement, Is
unique, and monelary damallel will nut ndequalely remedy Defendant's breach of tho
a&rccment,
66. Upon Infonnallon and bellcf, Defendant II Incapable of pcrfonlllns the DLA
Agreement and sold conlracl will be lOll upon such failure by Defllndant.
67. Upon Defendant's 1051 of lhe DLA Allreement, Plalnllff will be without any
viable remedy 10 De'endam'. misconduct and breach,
. 9 .
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DATI:
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Don Hllrn
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DATI: I/'lVOII;C NO,
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MICMII/llcaburo, PA 1701511
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SUllO. DO
~Ul-1Q-De 10,n4A Adv.ncud O.t. Ry.t~".
(117) I5Q1-101lD
" . 111
~d.,..
. "\~H;I~~,t~W:..tI,IIWI~~\OI
..
Invoice
1),I.11l INYOIOIl NO,
e/:15/;tl /11
DilL TO
onl Retenllon l)orporlllon
OonHltrn
e Brennem.n I;lrol,
M.d1.nlolburg, f'A '7085
OHII'''Q
OBI 11.1.nllon CQl'~Il,.\Ion
Don Hlllm
II "rlnn.m.n Clrol.
. M.e:h.n111,bu,g, PA 170SS
"
P,ONO, TeHM~ Rill" ISHII" OATt 0111'" VIA ~Oll PAOJr:CT
OUI on reollpt AI Q/2~/811 CIA llYllem Inlt.,..
InM SI'RVICRD Ol!llCRI"'''ON QTV AA". AMQUNT
CONll21 llr.l3/116 "'PMA Sy.ttm'SuPpor! and Conyer,lon IJrl 121$,00 1,160,00
8UPf,lUft
. .
, '
Total
$7,760,00
.JlJl-11J-l1el 1011\<11\ I\dvlIllc",d OIlt.1I lS,yIlt..1l111
~A,!II
. I III ~Il'" p,~. L""'M'!,r' Hill
OIn ",...,.rluI1U 1,'~U
( '1'17) l5151. II)Q5f
,. . lIS
..
Invoice
OA11& INVQIC~ NO,
~/:2/lIOG 011
Dill. TO
051 Rotondon Corporl~on
Oon H.lrn
o BronnemAn Cirillo
Mech,nle'burg PII '701l1J
"oj'" TQ
,
; 011 "e'I/lIIOI1 CorpOII"OI1
Oon H'lrn
8 Brlnnemln Circle
M.chlnlc.burg, PA 1701111
f>,O, NO, TlIIMI:l AtP O~IIP OA1& ISHII' ilIA 'OD PROJEOT
Due on IIcolp' AI! $1:l/l/00 PFMA BYlt.m In....
ITEM lSIIWICJ!D lllllCIlIPTION OTY RATa AMOUNT
CONIl21 0121196 PI'MA By"elll Support 1M Convtrllon 62 HIIl.OU 6,1l00,00
Buppor I
,
,
. I
"
I'
,I
Total
ISll.IlClO,QO
~.
~~d.,_
""L11111 '11~.lnlU;"hll, I'^ 11401
017111 ,1I'H,,(lInUl,I~"
..
Invoice
PArI!
71""DI3
INIIOICI!t10
76
lllLL TO
051 Retention Corporall"n
Don Helm
9 Brennlman Clrcl.
Mlchlnlclburg, PA 170156
I'JI'IIPTO
OBI Rellnllon CorporallQn
DOn Hum
D BrennllmDn Olrcle
Mllch.nlceburg, PA t 7055
i:
. ,_.
.,
. . -...., . .-..- ~- -... -".-..,
P,O, NO,
TI!RMll
RI!P 'IlHIP PATI! llHIP VIA I
i 7111$196
!TOB
PROJI!CT
.. .. _. _.~ ... .--- - I '
...,..." ,.-......
j DUll on "~"pt
.._._..__....._._4_~_____.._..~.)....__ __._...~..,...._._.._. ~ ._.___. ...
AE
I DLA Syetlm Inlll,.. :
.... ,'... -..-. +-.. ~ ,_"_",.._.,+._..o--'_",~_,,,__, ..__._...._. ,
QTY RATe I AMOUNT
., -. _.-7~o.-..--.fi5.0()..f--9;;,OOO~OO "I
I !
ITEM
--.'. .-.-,--
CON521
: BRRIIIC!!O O/!llCRIPTION
..I---.....,.'"-..._....~.-.."'-..-.- .-.., ......... .' .--- .. .._ .h......__,___. ....._.+_
, 7112196 I conlUllln1 Slrvlctl for DLA Inllgrlllon ,
I. I
I I (Rlc, Frln , SIIYII, Scali, John, Pllrh:k, I..
DIYI)
I
I
I
I
I
I
I, I
I
I I
I
I
I
, I
, i
,
I ' I
,
I
i'
h_._~._. ._....___.._.__._......_..._,.__.....,.....__...__~._....___ .....,._._~..., .. ...... .._, +_, _ ,._.. __.. ~
. .-...-.....-.-"...-.. _.~.-... ..,.. --.--.-,
Total
$90,000.00
~d"M
In11.11I1I1'1~" I QtI~..hlll"^ l1liOI
ClIl1111.~1l4 ,..I'II),bl,IUU
..
Invoice
CATE
UHliG/)
INVoice NO
7~
Olll TO
DSI HQlel1llon Corporllllon
Don Hurn
o Brenneman ClreJe
Mechlnlclburg, PA 170&ll
151-lIPTO
.,
PBI Relenllon CorpcreUc/1
Don "'ellm
o B"n"lll1an Glrcl.
M.chllnlclburg, PA t 701111
I
,. ".
PO,NO,
TI!AMS
AI!P lIHIP PATI! SHIP VIA
POB
PAOJIfCT
Due on receipt
AE
.., .., ._. _ ._~_. u _.._..,...
7/11.1/96
ITEM
CONll;!!
, llERVICI!O I OE5CAIPTION
. 7/12/98 .-. m,,: Consulting Services forPFMA
· Integrltlon (Rlc, Steve, Frink, Bcoll,
I ~chn, Pelrlck)
.!...
PFMA BY'lem Ins..
. .. ,.-... ,---,......-. ..._.._~~-.,._.._. ....--. ---. ---.
QTY AATIl: AMOUNT
,. '---.254'--- .'(26.'oo-T--3-~760~oii-:
.,
L
,
.1
I
I
I, I
I'
'I
I
! I I I" , , I
!' I
I
,
-..-....-. ,- .---..----~--'_I_..~ H'__"l..._.___.~__~.______.__~.. ____., .___..._ . . __ .,-.._,_.. ..___~.._,..~ ._,__ ~__,_.__ "'___ _~_..'"
Total
$31.750,00
_......_._.....h.__~4__..'__..__.. ..._.._ __. _ ..._.._._.....__ . '... '..._"..
....
~~d,_
"I' I ''''I'''~' I '''''''!l1 l'~ II~OI
III III l/iO" 1/111 I IOU
.
..
Invoice
DATI!
7MIDe
INVOICE NO
77
DILL TO
OBI H.Iotllliol' Corporltlion
Don Hoom
o IJronnel11Dn Clrele
Moohanleaburg, PA '70/5/5
Il~ltp TO
'.OSI Retenllon Corporallon
i Oon I-Ieern
I 0 Brenneman r,:lrele
MaChin lea burg, PA 17015/5
,
--0.,_ ,___ ..~_....u~..,._._._~~..
P,O, NO,
TeRMS
Oue on reeelpt
, ,
nep I SHIP DATlf' SHIP VIA
.,
.. .." '.,.. ~-. p -- -.-.. .-.-.. .
AI!
i 71161913
FOB PROJECT
... .,... . ." ._u~_ ..+._______~_._.. __+___ ..__._ .
j OLA 8cannlng an.., i
., ----. _.n. ... ,-,... .....-.-------r----q' _.____.....;
I OTY RAT!, AMOUNT I
T -- - -- i 93,76---------"0.00-'1'-. - i,it5o~oo '
I i
-r.....'..
ITeM
CON040
BlfAVICI!O
17112196
i 7110190
OlfSCRIPTION
, ADS 811r, Scanning end Il11lglng
, (KlIlhy, Keren, Kelly end Deb)
OI"ln Slaffing SlIrvle.. Seennlng Ind
, Inde~lng (Shlnnon, Brendl, Mlohlll,
, Donna, Krlaten, Krlallnl)
I
,
6,9Ao.oO 0,940,00
, I
I
i
,
I
I
~
I
I
,I
'I
i
I
,
"
I
,
,
, ,
/,
I
, 1'1
I
, I
,
I
I
,
I
" ,/
. I,
, ,
, "
__h_..__ . ..._-...._..,._~._~~__.__._........~..,~.._ .~_._. ~_..._. ..._..._,..~.....,.,.__._. '._'_""u_'o-~___p__.~_._. ____.____..___._._......_...__._.____
,
Total
$14,890,00
---- .,.-..--. ..._.._ -.___. .. ___._n.___.,.., ...
.JU1-10-Pfl lOlfl:lA AdvllnC::lld Olltll 15Yllt.UIl1I1
(117) tllU -lOIilIa
P.04
~4!!1
'''1 ~1'~,~~'I'j',lm'i1't,~~\OI
..
Statement.
OATil
7117~lh
DILL TO
U~I K'IIl1~I"1I (''''I~II''ItHI
DoItl II~I",
'lll"m"ilml~1 t'INI.
MiJl:ltllllUltllllt ~A I /1I,4~
" AMOUNT Cup AMOUNT "NU,
. ,
$I~~,,IIII,~II
" ,
OAT! DIlIICRI~TION AMOUN,. SALANCIl
,
II,m,% ~"III,wl\~\II~" II.IIH
111,.1. ~fhll"lil" III'~ In~o.~III~. IHI/IIIJIJI'"
11'/11'"'11\ 'NV~17 II,WU,IIII
(lid WI/(, OI.A ~~II~/1I lil,,,IIMII1" ,,14 '1IIIIfJ'PI'III1'
IW#,41 Ml",m 17.;11.\ 1111
IHI"~'% INv H~J 11~1I11i' 1/,'111,11I1
OIolI~NI, I'~n' ~7nl~ .MII,1lil 17.W,On
IH./lINr, 1:'1\' .l~~ H,~/oZ,~11 /~,M7! ,III
1)"'I~'IIl. ~M'I' ~7nl\ , .")IIIiI,I)II 17,"77 ...,
,WIHNII I'MI' HllIlN ~1.ll.I.l1I1 ~,7~HO
IIMI.','II, INYHr,7 7.7~II.lNI 1("llll,M'
117I1Il/'11I INV ~1,\ IIIMIiNI,Ot'''' 101l.N/1MI
'~M A ~~II~IIIIlHUlII'IIIIiI.
llliiW)1I INV#.\,\ \.7\11,1111 111\;1,11.10
01111,'1'1(, I'N~r.N 1l,~lHI,1I11 ' 1I11,m,'1J
1)711I1Nr, I"/V~'" ,\1.7111.1111"'- I ~K.~nUII
II,!K'
1.DO,DAVS PAST
, DUi
I~~.IO~ ,III
,
~j-60 DAVS "AIT 01080 PAYS PAST
oua cue
0,011 11,1"1
OVIlR DO DAYS
"M~T DUll
II.IIU
AMOUNT QUI
, JI~H.~IIJ.llI
QU""~I'lT
~
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!,
I:
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, "
1 1
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EXHIBIT "0"
"
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Subject to Iho penalllel or 18 PI. C. S, 14904. relathll to Ulllworn r.,.11lcation 10
.udlorltlet, I hellby cenlfy dlat I am the _ {l"I!~( fl(~; tV,-
or ADS Advanced Dati Solutlolll, Inc.. u.s U IUCb have read tbo 1'0"'10111I documont and
dial Iho r.cll lit rorth I.hereln Ire lrue and COmlCt 10 tbo bolt or my knowledae, Intormatloft
and boiler.
~
IIO.!J Clfe:N '</4- W liJ.
Deledl My 2.', I",
,
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"
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,
I I,
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,~ .'~"I'."~I"i'i"11~'
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, :1 " "
I ,...~~.. .~.,MIWm
. . m-
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J ,;',,7,\ t;, " I
I, lilill,' ,
I ,." ',,':' '11Jl'1"\'~:I;',~kil;1~/f'/#1!~,il/tiJflt""h
I ' Ij I II I ,r if N'ljr ff, 1 r l,,/i. il ~ 'f 'I'Y:
i, I , t'" '" I '/11' Ij, \ J;
I. 'I I, J " ~f1) I
I I . I ~ I Ij 'l,ljiJit/rli{,;
. ,.. .'''''1' ',' \ ,,'1" ,/ ,. , ',ll'
'1 1"1' 1,\ ,1. ,
; I ,! ;. . ", ,-, i' !~'II;', '1 '1
,I "'1' "II "1, ,:"
/ ' II; " I, I.; "',
... -..----.._>-40I..._Li...!...- ,'I.'
ADS, ADVANCED DATA
SOLUTIONS,INC.,
Plaintiff
IN TIm COUlt'!' 011 COMMON IILEAS
or CUMl3ll1tLAND COUNTY,
PENNSYLVANIA
No. 96.44711 &tully Tl:rm Civil 1996
v.
DSI RETENTION CORPORATION,
Defendant
CIVIL ACTION
q I" (,1 ,
" ," I
'.
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(.'" " J ,,;11
.1 II H
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~OTlCE TO PLEAD
To~ ADS, Advan~ Da14 Solullons, Inc.
clo Alan R. l3oynton, Jr., Esquire
McNees, Wallace & Nurlck
100 Pine Street
P.O. Box 1166
Harrisburg, PA 171011.1166
You arc hereby nollfled to plead to the within doculIIl:nt wllhln twenty (20) days after
service hl:reof, or a default Judgment may be entered against you.
Respectfully submitted,
ECKE1H SEAMANS CIIERIN & MELL01T
~~~~'Q:,~,
Mark D. Bmdshllw, Esquire
Supreme Ct. I.D. 116197S
Christopher M. Clcconl, Esquire
Supreme Ct. I.D. 1119331
One South Mllrket Squllre Building
213 Market Street
Harrisburg, PA 17101
(717) 237-6000
Attorneys for Defendant
DSI Retention Corporation
DATEO: August 12, 1996
~
~
.
7. Dellled UI Ilaled, It Is lIdmI lllld thut PUrtl of UII ulIlWmelll betweell DSI ulld
tllll Delimllll Lollllllcl Allellcy ("OLA") II u.lIl1ched to I1ll1hllll1'l Compluhlllll Bllhlblt "A."
It II dellled Ihutlhls Bllhlblt "A" cOllstltutelthe ellllN DSI.DLA AIlNemclll,
8, Admitted. By WilY of further IUllwer, hllwuvcr, the DSI.DLA AlIMllllellt
rcqUINI Wllb'. Ilerfonllullce of ICIUllllng and Imlllllllglervlces.
9, Admitted.
10. Denied, TIle IIvennentlof , 10 IIN denied III unlllllllllglble, 1111 Ip~lncally
denied that Defendant Is, or will be, unable to fulOlllllobllgllllons under the DLA
Agreement. To the contrnry, DSI hilI, and will conllnue to lle1fonn III Nqulred under the
DLA Agreement.
II. Denied as Illlled. The IIvennenls of , II IIN denied III unllllelllglble,
12. Denied al slnled. 1111 ndmltled Ihnt Plnlntlff provided certnlu lervlcel for
Defenrlalll during 1996.
13. Denied, It II lpeclficlllly denied lhat Defendlllll hnl not pllld Plllhlllff Ihe
NfeNnced $15,000 10 ADS. To the cOlllrnry, nn IImoulll exceedlnll $15,000 Will pllld by
DSI Retellllon Corporntlonllff1llllte during June, 1996, Checkl reflectlugthls payment Ol\!
ntlOched hereto nud made a pllrt hereof nl Exhibit "A." By WilY of furthel' IIUlwer, 01 let
forth In greater delOlI heNln, due to certain IIctlonl lnken by Pllllntlff. none of the alleged
"trervlces" perfonned by Plalllllff for Defendlllll hlld any vnlue, Innsmuch III, on or llbom
July 12, 1996 Plllhulff dellbernlely chllnged the mnsler plllsword IInd took cennln olher
nctlons deslllned to froltrnle DSI'I nccess 10 the dntllbale !ruo which 1111 ADS worll product
-2-
~
~
lU1l1 been ctllen:d, Ihcl'Ilby dUlroylng ullY value which Ila services IIlllhl have had 10 DSI or
DLA,
14, Dellled as slaled, SlIeh lIegollallLlIIs wens for the llurchn6C and IIlIle of Illllhe
slock of DSI Relentlon Corpornlloll, mther thllll for IhllllurcholC.l ulld IUIIl of DSl'sllascls,
such us thll DLA Agl\!ellle/ll. By wuy of nmher 1I11SWer, slIld negollullons were IIIlVer
Illlo1l7W, no ellforcllllble slock purchose ogf"lllllllenl wos IlVllr Jl!lIched belwllenlhe purtles,
olld Plohlllf,. otherwise failed to IiIllhfy conditions pre.:edelll III Ihe fonllallon of 011
ellforcllllblll ogreelllent by, t/llel' aI/a, flllllllg or refusing 10 produce 0 denllltlve wrlUlln
agf"llllmelll os required by DSI.
Moreover, Plaintiff conllllued 10 demond addltlonol concessions, odvallce lIew
pl\lJlOliIlls, ond allelllpllo IIIIJlOse oddlllonollenlls unlll DSI concluded Ihol no vlnbJ"
agreeme/ll belwllCnthe parties would eVllr be Nlnlck. By way of eXlllnple, eleven doys ufter
Plaintiff clahlls Ihe pOl11es rellched 011 oml agl\!elllenl, Plahlllfflendered a coulller-orfer III
Ihe fonn of a "Leiter of Inlelll" 10 DSI, pl\lJlOslnllthot Don Hillin!, (the husband of D51's
Presldenl and sole shareholder Conslllnee HIllIn!l, perliOnally "Infuse" ADS with $125,000 In
operntlng capital 10 be repold 10 Mr. Helin! over a period of lillie, This "Letter of Inlent" Is
the only doculllent renccllnlllhe portles' negollotlons, and establishes Ihallhe parties we,\!
sllllnegollallng Jong aner Plahulff Cllllllls the alleged agl\!ell1elll hod been sluck. A tllle and
correcl copy of the Leller of IlIlelllls allnched herelo ond mode a part hereof us Exhibit "B."
In essence, ADS' coulller-offer to DSI was thot Mr. Hillin! Ilnance Ihe purchase of his
wife's compony by ADS with his ownllloney. Mr. and Mrs, Hillin!, concluding IIIatlll15
-3.
,
.
..
.
.
pl'llJll.'llll1 by ADS Will IIbsurd, cOlllllude:d Ihlllllll I'C4flUllnblll pl'lllpll(lof lI11hhwlllll n \lllIblc
IlllNCllIlllllllllllle:d 111\1.1, 011 July 12, 191)6, Mr, 1Il!llnllllllll1lld ADS, III wrllllIll, Ihnl (I) DSl
Will lanlllllllllllllOIlIl6I)l!(11 llf DSl's 1\!IIllluIIshlJl wllh ADS; (II) DSI WIIS 1I11111l1l!l\!lllld III
JlurlulllllllllY lilrtbl!r dl.cusslllllS with ADS 1\!1lllrdlllllllllY pllrchll'l! Ill' DSI" slock, 1I1'l!ls,
cIlntmcI6 Ill' lllhllrwlll!; IIl1d <III) IJSI dl!lIIl1l1de:d Ihl! relUnI Ill' 1111 C(Julpml!nt OWIIL~ by DRI
Rl!h:ntloll Cllrpllmllollllr III subCllIllmllllJr, DSI Rl!cllrds Cllrpllnlllou, Allllchl!d hl!ll!lo IlS
Bllhlbll "e" ISlhe Il!fl!ll!ncl!d July 12, 1996 cOI'n.!SpUnd1lllce.
I~, Dellle:d. ThellvCmll!IlIS of 1 I~ IIIl! dl!nled III con6lltullngll!1l1l1 cOllclullolIS
Nquh l"llnO I1Isf>on61ve pll!Jldlnll, ny WilY or further III1IWl!r" II Is "')l!(ltlClllly dl!nle:d Ihlll
Del\mdllut IInd Plllhlllff ellleJ\!d hno 111I ellrorcellble Slock pllrchllse 1I11I'\!Cmenlon JUlie 28,
1996 or 1I11lllY olher Ihnl!. By WilY of furthl!r IUlswer, DSllnco'1XlOlleS Its I1Ilponllvl!
nVllnllenls 10 1 14 ll[xlVe, By WilY of further IInswer, It Is IIdmltllld Ihlll Plllhlllffllnd DSI
cllleJ\!d IllIo nellollllllonl which Includcd dlscuIslon of sOllie Ilrnlllgcmelll whcl1lby ADS
would pcrfonnlhe scrvlces Nqul,,~ ulldl!r Ihc DtA Agreemcnl, IInd IIssume ccrtllln debls
owlld 10 Ihlrd pllrtles by DSI. Ills furthel' IIdmllll!<1 Ihnllhe negothulons lnltllllly Included
discussion of Ihe pllymelll by ADS 10 OSloI' mughly forty pcrcCnt (40%) of Ihe ncl pmtlls
gl!nemled pUJ1iunnt 10 lhe DLA Ag/'CCment. By way of furthcr Ilnswcr, DSI spccltlclllly
Indlcnted Ihol, IlS 0 condlllon preeedcnt 10lhe fonnllllon of Ilny cnforceable IIg/'CCIIICnt, ADS
was 10 prepol1l nnd forwllrd II dmn wrlllenllgreelllent for I1Ivlew by DSI's counscl on or
bcfol1l FrldllY, July ~, 1996. ADS neglccled 10 do so. Moreovcr, onthc IlnemOOIl of July
9, 1996, ADS, nflcr neglccllng 10 comply with DSI's condltlonlhnl ADS' pmposnl be
.4.
..
.
,
n:duc4.'Jlllo wrllhlll burol\l July 5, ADS I'lIr lhu l1rallhllu, 1l/'llllOaed Ihlll Mr, Helml,
IlcJr5l1llnlly, lulvnucu $125,000 III' hla IIwlllllllnllY 10 ADS, In onlllr Ihnl ADS hnvel aufnclllnl
llpenlllrlll cupltnllo Ill\lCllOO, This Pl\lpll~lIlla 1\l111lc;led Inlhll (UllllHl.'<:Uled) Lellllr or hllllnl
dllIlVl!/'lld by ADS l'Cpl'CSlllllllllvllb III DSlon.hll IInCnlOllnol' July IJ, 191J6, which dllCUlIIll1ll
la IIl1l1chll(l hereto ua nxhlblt "U,"
16. Admltled III pl1l1IIl1d Denied IIIplu111a alllled, OSllllclltpomlelS by I'\lrlll\lnCO
.he rebJlOllalve uvermclIIs '0 " 14 alld 1 ~ bel I'orth nllOVel, Ills ndmllled Ihlll DSI penullled
ADS 10 IJIke pObbesslon of DSl's scalllllllglllld IrllllUlllg equlPlllclIl, howevcr, nllY hllpllcOllllll
Ihal such bBlhllCIIl WIIS II ~ogllltloll of IIny enl'orcclIble "ugrcemelll" belwccnlhe portlcs Is
speclflclIlly dCllled. To Ihe collii'll!)', OSI penllllled ADS 10 luke pClllcS51un of OSI'5
scnnnlllg olld ImullIlI1l equlpmclIl becllU5C ADS comllJUnlcBled with uud hired Ilway certllhl
key DSI emplllYccs, <In one Insllulce III dl~1 vlollulllll of II COVCIIIIIII iloIlO compele),
Ihereby dellbemlely crcllllllllll 5CI:ll11rlo whereby ADS wonld bllvc lIIaxlmum bllrl!lIll1lnl!
levemge with DSI, IIl1d could 1I11empllo hold perfonnllllcc ulldcr Ihe DLA AIlIl!.l!mcllI
"hoslage." III sUllllllllry, DSI penllltled ADS 10 IlIke posscsslon of Ihe sClllllllng alld Irlluglllg
equipment be.clluse ADS dellbemlely and willfully crenled 0 sccnllrlll whcreby Ihls W05 Ihe
only mllllller In which DSI could cOllllllue 10 perfonn Ihe dolly scanning and IlIIaglllg
funcllons required ullder Ihe DLA AgI'CCmelll,
17. Denied, Ills specllkally denied Ihlll DSI and PJlllrlllrrelllered 11110 DII
enforceable 51tlCk purchosel agI'CCmenl on June 28, 1996, or OIIlIlY olher tlllle. By woy of
further onswer, DSllncorpumles by l'Cferellcel 115 responslvll avcnnenls 10 " 14, IS Rlld 16
-5.
..
.
.
UboVll, By WllY of furthllr anlwer, UI of June 28, 199ft, OSI hud Ill) IllllllloYIlOI, Iho IIIllllO
hnvlnll beJeu hl~ nwny by ADS,
18, Denied. 1111 apcclllclllly denied Ihlll OSIIInd 11lulnllffl!IIlllllld hUolln
enforceubh: alock purchase nlll\'.Cnllml un lU1I1l 28, 191}6 ur 01 IIny ulhllr llmll, By wuy of
further nnawer, OSllncu'1)Omlea by I\!fllJ'ence Ila reSI)Unslve IIvenneflla lu 11 14 IInd IS
ubuvll.
19. Denied, 1111 spcclOcnlly denll!d Ihlll OSI nnd PJllrullff elllllllld huo nn
enforcllllblo slock purchnse nllJ'eelnlllll on lU1I1l 211, 1996 or III IIny olher 1111I11. By wny of
further nnawer, DSllncorpomlea by reference Ila responalve nVl!nnenls 10 11 14 nllrl IS
ubow.
20. Denied. ilia speclOcnlly denied Ihnl OSI nnd Phtlllllff I!JlIellld 111I0 nil
I!nforcllllble alock purchase nllJ'eemelll on JUlie 28, 199ti or nllllly olher lime. By wnyof
further nnswer, DSllncorpomlea by reference lis responsiVl: nVllnneflls 10 11 14 nnd IS
nbove. By wny of further answer, as set forth Inlhe I\!sponslve nvemleflls 10 1 17 nbove, nl
or nboullhe lime Plnlntlff Innpproprlnlely hired nway key OSI employees, such employees,
upon Infonnnllon nnd belief, look certain documents and Infonnnllon from Defendnnl's
officea wllhoul nUlhorlZlllloll nnd wlthoullhe knowledge or consenl of DSI.
21. Denied. As ael forth In gl'Clller dellllllnlhe rcsl)Onslve avennenla 10 11 14
nnd IS above, It Is specifically denied Ihnllherc WIIS, Al nny lime, an enforceable slock
purchnse agl'Cllmenl belween Ihe parties. The remnlnlng nwnnenla I\!Jallng 10 lime, PUrchASIl
uf equlpmenl and supplies, elC. are denied becnuse, following reasonable Invesllgallon,
-6-
,~
.
DefclIldanlll wllhollllnfllnllllllolllllfflchlllllO fonnll bclluf III 10 Ihlllnllh of Ihclc
IIVllmlllnll. Mon:cvllr, 11111I1 rimh III , IJ,I1IPJll, 011 July 12. 1996 PIRIllIlrTchulIllcd Ihll
IlIRller Plluword Rnd look cllrt/lln olllllr /lcllonl deslllned 10 fnl6lmle OSI'llIccclIlO Ihe
dRl/lbRIII Ifllo which 1111 ADS work prodUCI hlld 1~1I Illllered. Ihlll1!by dCllroyl1l8 IIny vallie
which III fil:rvlcel mlllh'. h/lve 11111110 OSI t)I. Ol-.A,
22. Denlw. Allllvennllnll of' 22 IIN speclnclllly denlw, bolh III colllllllllln8
IIlIIIII conduslon. n:qulrlllll no I1!spunllve plcadlllll, lind, III IheIIhenlllllve, 01 RvenllCfIIl of
fllCI, nle IIvennenls 111lI1 OSllllIll/llled IlIlhll use of "IIIIlSIII sofiW/lro" Rill denied 01
ulllntellllllble. Thl! NlllallllllllllVllnllenls 10lhll effccI Ihal OSI had "lllIsasw III Improper IlIld
IlIllsal conducl" IIN denied III ullhllelllslblll, IlIcklng In sufllelefll spednellY 10 penllllll
mlllllllllgfllllllsponsc, IIl1d such IIV1lJlIIenls aN IUbJCCI 10 a mollon 10 slrlke as flCondoloU5 IInd
Impertlllent.
23. Ollnled. Allllvcnnellls of' 23 IIIll spccllleally dllUled, bolh III cunslllulllIg
legol conclusions n:qulrlllg no Illspollslvll phmdlng. IIl1d, In Ihe IIhenmllve. as avennenls of
fllcl. To Ihe conlmry, OSllIlllO lime hilS hlld "IIlIlJor cOlllpllance problellls". By WilY of
further answer, OSI received fmlll DLA "CUI'C Notices" pUJ'liuantto Ihe DLA Agreement
having 10 do mllNly wllh Ihe Ilmllly pick up IIl1d Illlun. of rJocllmenll and Illsolullon of a
backlog of documenls to be sCllflfled. With Ihe exception of certoln circumstances
dellbcmlely r.n!IIled by Plahlllffon July 12. 1996 (liS Sill forth In gn!lller detail herein)
fallhful perfonllonce of thll lIspecl oflhe DLA Agreelllent Is an Inue which walcallly
addresllCd, and which has bc4!1l Nsolved by OSllo OLA's Sllllsfacllon.
.7.
"
.
24, lJunlccJ U8 8tllled, 1118 udrnllle41Ihul011 July 12, 1'Jl/f1 DSllilnnlllly Illnlllnllle41
UIIY I\llUIIlJII8hlp II 111111 with ADS: udvlNcd ADS Ihul II WUN 1101 IIIICI'l'N1C~111I I'uI1hllr pllrNIII,,!!
ullY nllllolhllhl/lN whcJ'l'hy ADS 1IIII/IIIUI'II"I,'l' Ihc Mild., II~~CI~ III' nl/lllll~l~ III' DSI; ulld
dlJ'l'.Clcd ADS hI l'l'IIIIlIUII CtjulfllllClIlUlIlt Mlppllc~ whkh AIJ:i 111111 p,\'vhlll~ly IlIkclI
1)()81ie8NI01I or, A Ime ulIII nlrl'l'~1 ~IIPy Ill' nllw~pllllllcIll'C whkh WUN hUIIII dcllveJ'l'd hl ADS
UII Jllly 12, 1'1'1(1, I~ ulludlCl1 hCJ'Cllllllld lIIudc U pUll hCI'l'II1'UN Hxhlhll "C:", AllY hllplkullon
111111 DclimdunllCl1l1lnUICtlulI elllill\'l'uhk ~h)Ck pun.:hu~c Ugl'l'CIIlC'" hClwcclllhe 1llll11CN 18
expIC8Nly dcnlcd, To Ihc nlllllllry, 110 slIdl U/lI'l'CIIlCIII cver exlMcd IlI!lwcclllhe punlc8 U8
Indkllle41 In " I" und I ~ "hovc,
2~, JJcllkd, Alluvcl'lIlcnl~ of , 2~ UJ'l' dcnlcd U~ follow~: II I~ ~pcd'kully dcnled
Ihul Plulllllff IllIlcly ''l'IUnlCtlullllr Dcl'cllduul'~ Ctllllprncnl hi DSI. To Ihc COIlII1lI'Y, IIlllch or
DSI'~ cqlllplllClI1 hus hccn J'l'IUIIICd hy Plllhlllff, dc~pllc DSI's dClllulld 1'01' I'l'IUrn III' Ihe MIllie,
III~ fUllhcl' dcnlcd Ihul 1'IIIlr1llfr 1I1Tcl'l'lllllUssIsI Dcl'clldllnl III I'l'MllrllIll lis llpCl1IlllllIS, 'I'u
Ihc ~oJ1lmry, 1'IIIII1IIIT IlIshlcd thllllJ:i1 wlluld Ill! ullllhlc h! IlI!l'fimll Ihc ~OJllJ1lcl wllholll
Plulllllff's USSISIliIl~C, ulld, UpOIl IlIlilrlllullllllulld hcllct', I'luhlllrr look l'cl1111n s1CJlS 10 CIINIIJ"C
1IIIIIIhls WUS IhL~ ~IISC hy, iII/I'/' alia, ~hun!!lu!! ulI pusswords J'l'qllll'ctl III !!lIln clI(ry 10 Ihc
DLA dulu SYS(CIII, Ihcl'chy rClldcrlll!! ulI lillllll!r work pcrl'lIllncd hy DSI, I'lulllllff Ill' o(hcr
Jlcrwllllcl WllIlhlcss, II Is I'ul1hcr spcclfkully dcnkd (hill DSI did IIlll l'OI1lU~1 Phil III I 1'1' 10
ICqIlCS! USslsllIlI~C In J'l's1orllll! openlllilliS, To IhL! nllllmry, Oil Ihc 1I1011l1llg III' SUlllrduy, Jllly
13, 1'.1'16. "1)(111 ICllmlll!! or Ihc ddlhclllIC und wllII'ul ~hunllc or (hc pussword~ alld (hc IIkc by
Pluhlllff, J'l'pJ'C~CIIIUllvcs 01' DSI I1rslcol1luclcd rcpJ'CsclIlUllvcs Ill' 1'111111I11'1', InslS!llI!! Ihlll OSI
-H.
.
.
bcll\Jnll~hl!d wllh Ihe new pBS8Word~. In Yilt Bllolhllr IIIlClllpt 10 eHllrl IIlVllnlll1l over OBI wllh
~spec:t 10 Ihe OLA Allreemelll, Plllhlllff delllklmlllly wllhhllld Ihll pmworrJ unllllhll Illomlllll
Ofnlll1'5dllY, July 18, 1996, whlln Ihll nllw PIl85Wlln! "NOWAV" WBS, nl hlSl, c:ommunlcllll!d
by IIl'1!llresetllllllvellf Pllllnllf/'lll II represenlullVllllf 051. By nlursduy, July 18, 1996, Ihls
pB~SWlln! WUS llf 1I11 use III 051, which. us sill forth herein hud dully llbllgllllllllS III meel wllh
OLA.
26, Denied us SUlled. II 15 udmllllld Ihul Plllhulff hus sentlhe Invllkes ulluc:hed III
Ihe Cllmplaint us B~hlbll "B" III OSI, The remaining aVllnllenls Ill' 1 26 ure denl~d 115
conslllullng Illgal conclusions or as seeking 10 c1l11mclerl1.e documents whkh speak for
Ihemslllves. By way of fllJ1hcr answer. glvlln Plalnllff's cllnducllIs Sill fonh IIbovelll Ihe
responslvlll\venncnts III 1 25, Ills spccll1cully dcnh:d Ihlllllny "servkes" of ullY vl\luelo
allyone (whelher DSI. OLA or olherwlse) Wllre, In Ihll l1uulunulysls, provided by Pluhlllff,
To 11m contl1lry, Ihnlllgh 115 uCllons In chunlllug Ihe password Phlhlllff Ilffccllvely nullll1ed
Ihe vlllue of uny servkes whkh II mlghl previously huve perfonned, Moreover, us a resull
of Plaintiff's IIcllons us sel fonh ubove, 051 hus lx~n comJ>lllled 10 expended lremendous
sums 10 conllnue lIS IlI!rfonnllnce under Ihe OLA Agrccmlllll, which uCllons lire Ihe sUbJccl of
OSI's countllrelulm,
27. The avennenls of 1 27 are denied us conslllullnlllegal conclusions requiring
no responslvll pleading. By way llf funher answer, Ills spccll1cully denied Ihullhere ever
was any enforceable Mock purchase agrccmelll Ill!lween Ihe panles, und us II resulllhereof
uny breach Ihereof would be Impossible. llls funher spc:cll1c:ully denied Ihal Pllllntlff has
-9.
,.
.
belln hpnned by IIny IIcllon of Dcf~ndlllll, '1'0 thll cOlllmry. OIlfendnnl hils lll!en hllnned by
Plnlllllfrs nctlllns, IInd 10 IhullHhllll PIBhlllf,. hils slI,.feMlllllY hBnn, the tIlllnll Is III!lf.
Inlllcll!d,
28, Denied U SIIIIe:d, Ills ndmlll~'l1o/lly lIulllhe documellls 1I1111ched 10 PllIhlllfl's
COlllplllhllllS 13Hhlblls "0" lllld "13" WIlN forwBrdcd 10 OSI, lI11d received hy OSI, nle
NIlIBllllnllllVCn/lClIIS of . 28 COIISlllUlc ICIlBI cOllclllilollS NqUlrlllllllo l\lsp(mslvc phmdllll&.
To lheexlelllIhey IIIl1Y be deellll!d lI\1ennellls uf filel, Ihe sUllie nN cxpNssly dellled, Tu Ihe
cOlllmry, ns scl forth IlOO\lIl, IhcN lIe\ler WIlS 1I11Y cllli)n:~lhle Muck plln:hulIC! IlIlNCmclll
helweelllhe pllrtles, u/ld Ihe \llIllIe of lI/1Y "servlccs" (ll'l.l\lldcd hy PllIlllllff lu Oefelldunl WIIS
eff~ll\lely /III II I fled Ihrough PIBhlllff's lIcllolIS 1I~ IIC!I furth hcrclll,
29, Dc/llcd, Thell\lennclIls U,. . 29 cOIl51lllllC IClllll cOllcluslulIs Nqulrlnll no
NS/JOIISlvc plcadl/lg, To lhe CXlcllllhe SIlIllC 1lI11Y hc deemcd lI\1cnUcllls of fucl, Ihey lIN
dCIIIl!d lis slllled. Ills udlllllled ollly Ihlll OSI hilS IlIsl51Ctllhlll IhcN WIIS IIe\lcr rill enfo/,(,C4ble
Slock PUn:hll5l! UIlNCIlICIII belweell the pllrtlc~ which would !!1\lC rise 10 ullY dUlles of
pcrfonllllllce or puymelllll/lder IhclIC! CI/'('UIIISUIllCCS.
COUNT II IlREACU 01' CONTRACT
30. DefelldulII '"corpumles by rcfcNllce Ihe NSJl<lIlSI\lc lIVlln/lellls scl forth III .. I
Ihrough 29 of lis Answer us Ihough fully sel forth heNllI,
31. Dellled. The U\lenllclIIs of' 31 cOllllllulelc!!lIl cOllcluslolIs Nqulrlllllllo
NsplJJlsl\le plcadinll. By WilY of further IIl1swer, IheN WIlS 110 oml ullNCmell1 Blld IheN WIlS
110 cOlIsldenulo/l,
-10-
"
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.
32, Denied, nlCllvCnnunl! of , 32 CUII51llule IUllal CUllclu!loll! requiring no
I\l.p(mllvll plcadlng, By way of nmhcr nllSWl!r, Ihl!I'Il WIIS 1I11 ami allM!llll!n1 nlld 1I11ll'll WIIN
110 cOlllldcnlllon. To Ihu conlml')', IhcJ'C WIIS nl!llhl!r IIn offl!r lIor 1111 IIcccplllllCU, hUI only
Illelhnhllll')' nUllollnllons. By WilY of furthur allswur, DSI Slll!ellklllly IlIdlcllled IhUI, 115 a
condllloll Jlrccedl!lIl 10 Ihu fonlllllloll of IIny cnforce/llllu IIgM!IIlCIII, ADS WIIS IOIln:PIlJ'C alld
fOl"WIIN Il dmll wrlllclIlIllM!1II1!1Il for ruvll!w by Dill's counllCl on ur \lIlfuJ'C Frlduy, July :i,
1996, ADS nugll!(lcd lu do su. MUJ'Cuvcr, 011 Ihl! IIllemoon of July 9, 1996, (uner
nl!gll!(llnglo cOlllply wllh DSl's condlllon Ilull ADS' PIllIX)511Illll reduced 10 wrlllng hl!fol'll
July ~), ADS, for Ihl! flrsllllllu, plllposed Ihlll Mr. Hellnt, IlIlrsonlllly IIdVlllICC $12~,OOO of
his own mOlley 10 ADS, In order lhlll ADS hllvc sufOclelll opemllllll clIpllnllo Ilroceed, This
propo5U1 15 J'Cfll!(led III Ihe (UIICXCCUI/:d) lCllcr of hllUIIl dcllvul'\!(l by ADS J'Cpn:sc/lIallvcs 10
DSI 011 Ihc nllcmooll of July 9, 1996, which doculllelll 15 allnched hcn:lo liS Exhlbll "B."
33, DUlllcd. Thc IIwnllClIls of' 33 con5lhUII! Icglll conclusions n:qulrillg no
n:sponslve pll!lldlng. To Ihe eXlulIllhe Sllllle nlllY Ilc dl!(lIIcd IIvcnllulIls of fllCl, Ihey aJ'C
denied for Ihe J'Cllsons sCI forth IIlXlVe III n:sponsc 10 " 16 Ihnlllgh 20. It 15 addlllollnlly
speclflclIlly dellled Ihul DSlllcglccled Ilny obllgulluns under Ihe DLA AIlM!IllCIlI. To Ihe
conlml')', as sui forth abovc, PllIlllllff dl!lIIl1lmlely cre.1lcd II sccnarlo when:by DSI hlld IIllle
choice bUI 10 delegllle IlIlrfomlllnce of ccrtllln IISpeclS of Ihe DLA cOlllmcl 10 Plnhlllff umll
olhcr arrangclllunls could hi! mudu, By way of fllrthcr IInswcr, Ihu concepllhnl certain sums
Ihen duc 10 Plalnllff by DSI would hi! forglvcn liS pllrt of un UIlM!IllUnl hl!lwculllhe parties
WIlS alllong Ihe Ilems lllulIllolled during Ihc purtles' ncgollallon. Howevcr, 115 IlCI forth III
i.
,11-
.
lreIllOr dct.all IICNIn, thcllC 11010110110115 lIevcr re5ull~ III lilt 11IIfOI'C&mblu IIIlNllJIICllt, wcre
IIcvcr reduced 10 Wrillllgll8 rcqulR!d by OSI, olld Plalllllfr cOlltllluolly proposed lIew IInd
/Illdlllollol Jlllllcrillltenlls.
34. n.c ovenllellls of 1 34 constitute lellal concluslolls !\!quhinll no re5penslve
pl&mdlllg. By woy of fUrthcr answer, 110 enfol'Ce4ble slock purchase IIgreement WIU ever
IIchleved bctw~n the pllrtles, and there hils con5C:quelllly IlCl!n 110 breach thereof, malerial or
otherwise.
3S. The OVennell15 of 1 35 constitute lellal conclusions !\!qulnngno I'Csponslve
pl&mdlnl/. By WilY of further nnswer, 110 enfol'CClIble stock purchnse nlreemelll wns ever
nchleved bctW~1I the pnrtles, nnd there has con5C:quelllly IlCl!II no brench thereof, mnrennl or
otherwise, nor nny dnmnges or lost prol1t5.
WHEREFORE, Defendant DSI Retention Corpomtloll I'Cspectfully !\!quests Judsmellt
III 115 fnvor nlld ngnlnst Plnlntlff, together with any nnd nil Court COSI5.
COUNT lit QUANTUM MERUIT
36, Defendant Incorpomtes by refeI'Cnce the responsive nvennents set forth In 11 I
throuSh 3S of Its Answer ns though fully set forth herein.
37. The nvenncnts of 1 37 constitute legal conclusions requiring no I'Csponslve
plClldlng. By wny of further nnswer, no enforceable stock purchnse agreement wns ever
achieved betw~nthe pnrtles, nnd there has cOllscquenlly IlCl!II no breach thereof, lIlatenal or
otherwise.
-12-
311. '11111 nVllnlltJlIlH uI'1 JH CUIIMllllltJ Il!lInll'UlldllHIIIIIH 1l.!~lIlrhllt 1111 Il.!HIIUIIKlvll
fl 1 1111I1 1 1111 , uy wny uI' I'lIl1hL!r "1I~Wllr, 1I1I1l1Il'II'WlIhll! MllL'k fllll\:hll~" nlll\~1II1!1I1 WlIH IlVl!r
lIchlllVOO IlI.llWl!tllllhll P'1l11IlK. 111111 Ihll,\! hnh Cllllhlllllllllllly hl.'.'1I 1111 hll'lIch IhL'I\lIII', IIl1l1unlll ur
UllIllrwlhll,
31), ThL! "wnlllllllh 111'1 ,\lInIlIMlllI'.. Illllnl I'lIl1dllhlllllll 1\'IIIII,hlll 1111 l\lhfl1lllhlvll
flll'./IdI1l8. By w"y III' I'll 11 hilI' IIl1hWIll', 1111 L'IIhlll"'Hhh! hhk'k 11I1I\'hllhll 11111\'1111I1111I W"H UVllr
llchlllVlld 1ll!IWll<!lIlhu Pll1111'h, '"lllthc/'\! hll~ ""lhL'II"I'lIlly Ik'l'lI 1111 11I\'lIdllhul\lIII', 1I11111lnlll ur
ulhurwlliC,
40, Thl! IIvunllClllh III' , ,10 1'llIlhllllllll 'L'IIII!I'lIl1duhhlllh 1l"IIII,hlll 1111 rl!NllIlIINlvc
Illulldlllll, By WilY III' l'ul1hcr IlIlhWCl', 1111 ulltlllwllhlll MIlCk plln:hllM! 1I11I\!1l1ll1l111 WIIK IlVllr
lIchluvud helwl'Clllhll I'lIl1lllh, 111111 tllll,\! IlIlh mllh"lluulllly 111.'1111 1111 hl\llldllhllrl!lI1', nllllllrllllur
ulhurwlhll,
41, The IIVCntllllllh III' , ,II 1I1ll,IL'nlullllh mllhllllllhllllulIlIll'lInduhlllns 1\!ljlllnnll
nu rl!KllIlIlSll, Jly WilY III' 1'1111 her IIlIhW.", II Ih hp'.'I'lfklllly 111'nll'" Ihlll Ihun.' ever WIIS III1Y
Ilnl'orl!llllblll shICk I'urdlllNc 1I11'\'CIIICIII IICIWCI'lIlhL' 1",Illch, 11'111, liS II '\'NUII, III1Y hrl!lIch
Ihllrl!tll' wUllld III.' 11III'"ssllIll', II II I'ulthl'r slk','llklllly dl'nll'c1lhlll 1'111111I1,.,. IIIIS IlI!cn hllnned
hy IIny Ilclllln "I' Dc Il'11l III III , 'I'll IIIl' .'lIll1mIY, 1)1'I'.'ndlllll hilS Iwcn hllrlncd hy 1'11I11ll1l'I"s
IIcllolIK, IInd hI Ihe chllllll 1"111111111 hilS K1I'I'I"\'lIIIlIY hllllll, Ihc SIIIIIU Is sclt.lnllkled,
42 J>cnlcll. Thc IIVCrlllL'llIs III" .12 l'II/1MIIIIIU 1l'l!lIll'llIlduslllns n:<julrhlll nn
Il!KllIlIINlvll plClldllll!, To Ihc C~ICIII Ihc Sill Ill' 1fI11Y he lI~elflellllvcrnlunls 01' fIlCI, Ihe SRllle lIll!
dllnloo, Tlllhll COlllntry, J.)~I'etlllllnl hilS 11111 hllen lIn.lllMly cnrlched, IInr hilS Ocfend,,,n
I.l
NCclved IllY bllllen! WhlllM>llVer IS II I\1SIIII 01' PllIIIIlI"f's "perfonIlQllcll." To the COlIll'llry,
PIlIlntlt'rs dellbllrolll chllnllll of pmwl)rdslllld IIlher Ilct~ of splleflllllllu IIlIVll C051 Defelldlllll
cOllsldlll'llblll time, trollble IInd expcll~e In contlllulng 10 perfurmlhe PLA Agreemellt desplle
PllIlnllfrs mlsfllllllllnce.
WHBRBPOlUl, Defendllnt PSI Retcnllon Corpomllon respcctfully nlqueslS Judgment
In lis fllvor Ilnd Illllllnst Pllllntlff, togelhcr wllh IlIlY tlnd 1111 Court costs.
COUNT 11I1 l'IU>MISSOltV I!:S'I'Ol'I'El.
43. Defendllntlnoorpomtes by relL!l\!nce thc respol16lvc IIvenncms set forth In 11 I
through 42 of Its Answcr liS though fully sct fOl1h hcreln,
44. The IIvennents of 1 44 con5lhute Icglll conclusions nlqulrlng no l'llspoll~lve
pllllldlnll. '1'0 the extent the IIIImc mllY be deemcd IIvcnncllls of tilCt, thc SlIllIe Ill'll denied liS
wholly conclusory IInd Itlcklng In sufl1c1cnt dCtlllllo cnublc PSI 10 fmme II IlIcllltlngful
l'llsponse .
4S. The IIvenncnts of' 4S conslhutc Icgut conclusions nlqulrlng no l'llspollslve
pllllldlng. To the extelltthc SOIllC 1lI0y be deemcd UVI!nllCntS of fllct, the 8IllllC ore dellled os
wholly conclusory Ilnd Illcklnllln sufllclclll dCtllllto clluble DSIIO fnllnc 11 mlllllllngful
response.
46. The IlVenllCllls of' 46 cOllslhute Icgul conclusions requiring no responsive
pllllldlng. To the cXlclllthc SUIllC mllY bc dcemed IlVcnllcnts of fact, the same Ilre denied IlS
wholly oonclusory alld lacking III sufficlcnt dCllllllO cllable DSlto fnllne a mlllllllngful
response.
.14.
47, nlllllVllOlllllllK of 1 47 CIIIlKlllllh! Illj,lllll.'lIl1l.'hIKlllll~ ~uhillllllo I'CNII<lIlSlvll
plClldhlll, 1'0 1I11111xlellllllll HUIIII.! lIIuy hI.! tll.'l.'lIIctl UYCmll.!lIlK lit' fUCl, Ihll sUllie un: deuled liS
wholly cOllchlSlll)' IlIld IIICklll!! III sufllchmlllclulI hI Cllllhlll USI hI fmlllll U lIIejUllllllfuJ
I'CNllllIISIl,
411, Thll UWOIICUls Ill' 1 4H I.'III1Mlluh.! 1CllUIl'llllcluHhlllK 1'C(lulrlllllllo I'Cspollslve
ploodhlll, To 11111 I.!xh.!lll I hI.! NUIIII.! IIII1Y hc tlcl'lIIcll UVCI'IIlCIlIN Ill' 1'111.'1, 1I111 SIUUlllln: dl.!llled us
wholly CllllChlSOI)l Ulltl luck Ill!! III Nllllklclll "1.'11111 hI Cllllhlll DS/IIl fmlllll U IlIdmlllllfuJ
I'CSlllllllll!,
49, 111\~ IIWIlUClllh III' 1 4'II'IIIlMIIIlIC ICIlUll.'lIllcluNllllIS n!qlllrlllllllo reSlllll16lvll
pllllUll Ill! , 'I'll Ihe llXlell1 Ihc hllllll' IIII1Y Ill! tlL'1.'1l1L'11 U\'enIlCIIIS Ill' facl, Ihe SUllIll IIIl.! dellled 11$
wholly COllchlMlry UIl" IlIl.'kllllllll Mlllklclll "clulIllI I.!lIl1hle OSIIIl fnlllle U 1lI111mlllgful
1'C$lllllllll!,
~O, The IlWllllClllh III' 1 ~l) 1'lIl1htllllle II.!IlUI CllllcluNlolIS r~ulrlllllllo respollslve
ploodlllll, Tlllhe eXlcnl Ihc NUUIC IIIIlY Ill! tlcclllcd Ilvenno:llIs Ill' fllCI, Ihe S/Ulle Iln: dellled liS
wholly cOlldusllry Illltllllcklllll iu MlllklcUI "1.'11111 hI cnllhlc OSllo fnUlle II 1lI111mlngfuJ
I'CSllllnllC,
~ J. The UYI.!f'llIl.!nIN Ill' 1 ~ I Ctl/lMllnlC 11.!1l1l1 cllncluslllns ~ulrlng no responsive
Illootl hIll , 'I'll 11m CXII.!III the NUllIe lIIuy hI.! tlcellled Ilvenucnls Ill' fUCl, Ihc SIUIlC 1In: denied 11$
whlllly CllncluNllry 1IIIlllllcklnll III NufIlclclll tlcllllI III cllllhle OSIIO fmllle n IIIl.!l1lllnllful
1'I!~I)(lI\M:,
.I~.
W>>ElRBFORB, Ocfendunl PSI Relenllun CU'1lc.mlllon NS\lectflllly reqlleRIR JlIdllllll!nl
InllR ("VaT ond Dgulnsl IlIDlnllff, lc[!elher wllh IIny IInd 1111 CIlUl1 cllMs,
COliN'!' IVI UJo:I"AMA'I'ION
~2. Defcndllnl hlClll1lllnllCS hy referencc Ihe l'Cspllnslvc IIvennenls 5et forth In111
through 51 of lis An5wer liS lhoul.!h fully 5Cl fl1l1h IU:I'Cln,
53. The IIvel1ucUls of 1 ~3 coUMllutc h!glll C'lIlChl5hlllS Nqulrlnllnu N5pon51ve
plendlng, Tlllhe eXlent Ihc SIII1l': I1lIlY h.: d~!lIlcd IIvenucnt5 of fllCl, lhe 51111le IIN denied 05
wholly conclu5ory IUld IlIcklng III 5uflic\c!l1 dClllllto e!lllhlc OSlin fmlllc II I1lCJullnlll'1I1
responsc,
54. The llvenncnts Ill' 1 ~4 constitute leglll conclusions 1'Cllulrlllll no N5\l'1ll5Ive
plendlng, 'I'll the eXlentlhe 511111e Il1IIY he deelllcd Ilvenllent5 Ill' fllel, the 5111l1e lire denied us
wholly conchl5ory IInd IIICklll[! in sufllclelll detlllltn enllhlc OSlto fllllllC II Il1CJl1lln[!ful
response,
55. The llvenncnls of 1 55 conMlllIte Icglll conclusions l'Cljulrlnll nore5ponslve
plendlng, To Ihe eXlentlhe Slll1le 1l111Y be deell1ed nvcnllents of fllCl, Ihe Slll1le lIre denied liS
wholly conclusory IInd IlIcking In sufllclenl detlllllo enllble OSllO fnune II 1l1l1l1lllngful
response.
56. The IlvennenlS of 1 56 constitute leglll conclusions requiring no responsive
plendlng, To the eXlenlllll,', SlIllIe IIlIlY be deellled Ilverll1enlS of fllCl, Ihe Sllll1e lire denied liS
wholly conclusory IInd IlIcklng In sufl1clent detllll to elmble OSlto fnune II Il1C11nlngful
responsc .
-16-
n '1,u nVUnllotll, Ill' . ~7 cOtl,lIlUlu 1011111 Clltlclusllllll I\!qUlrl1l1l1l1l /'Illpllll,IVIl
pll!lldhlll. Tolhu eKh!tlIlhu SlIlIIU 1II11Y be tll!l!ml!JJ IIVenlletlls Ill' fllCl, Ihu 1ilI1IIU II'" dun led In
whlllly cOllclulUlry IIl1d Inckhllllll ,ufllclelll dC1l11I11l ellllhlc PSI 10 fnullc II lIIl!lUlltllll\ll
Il!SpUllle.
~Il. The nvenllcnls Ill' . ~Il CIlII'llIuIC ICIIIII cOllcIIISlll1l6 n:tIulrlllU IIIl /'Il'pIlll,lvc
pll!l,dlllll. TIl Ihe CKlctlI Ihe '1I11ll! IlIllY be dl!l!llll!JJ IIvenllcnls Ill' 1'11,,1, Ihe SlIlIIU nlll dClllcd 116
wholly cOllchuory IIl1d IIICkhl1J III 6unlclctlI dC11I1I11l ellllhle PSI 10 rnllllC II lIll!lllllrllll\ll
respIlnril!.
WHEREPORB, DcrClldlltll DSI Relclltlllll Corpumllllll Il!slll!Clrully requcsts judllllll!tlI
III hs rllVllr IIl1d IIgnlllsl PllIlllllff, hlllclhcr wllh lIuy 11IIt! 1111 Court C~IMs,
COUNT V, Iil'J~Cl(o'JC I)JmJ,'()JtMANCI~
59. OI!fCllt!lIullucorpumtcs by refcll!ncc Ilrc Il!SJllll16lvc IIvcnllclIl6 filll rorth III .. 1
IhrOugh SIl of hs Allswcr liS though flllly SCI fllrth hCNln,
60. Dculed. DSI hcreby lucOrp(lmlCS by refcl\~ncc Ihu resJlllnslvu IlVUnlll!llls 10 ..
14l111d IS.
61. OI!lIled. Thu llvunllcnts of . 61 cllllstllulU Icglll cOllcluslons requlriug 110
Il!spllllslvu pleadlug. By WilY Ill' further IlIIswer, lhure \l'IIS nil oml stllck purehnfill ngrc.elllcnt
nud Ihell! WllS Illl cllusldcmllllu.
62, OI!uled. Thu Ilvunllunls Ill' . 62 clluslhulU Icglll coucluslons requiring nil
Il!spuuslvu plulldlug. By WilY of furthcr IIU6wcr, thure WIIS nil oml slock purebnfill lIgrc.eIllCtll
Imd .hcll! WIlS 110 cOllsldemlloll. To thu cuulnlry, .here WIIS Iluhhur nn orrer nor lIll
-17-
IICC~IlIlIllCIl, bUI 6111y Illlllhlllllllry ullllllllllllolI~, By WilY 0" ""rthllr IIII~wllr, OS! ~pcclllclllly
Illdlclltlld Ihlll, lIS II cOlldlllllllllll!ccdcll1 Illlhc filnllllllullu" IIIlY cllfuJ'CClIhllllll!fC(!IIlCIII, ADS
WII~ III pll!llIlll! 1I1ld fllfwlInlll dmli wrlllclIlIllIWIIIClI1 Illr Il.!vlcw hy f)SI'~ CI)IIII~cl 01101'
beli)1l! FlidllY, JlIly ~,llJlJtJ. ADS 1lI~l!llXlcd 10 du Ml, MUI\!uvel', UII Ihc 1I1lcnlllolluf July
9, 19lJ6, (IIllcr IIClllcCIIIIIlIl) cOlllply wllh DSl'n cUlldlllllllllll1l ADS' Imlll1l~lIl he rcdllclld 10
wrhlllll hcfilll! Jllly ~), ADS fiu' Ihc Urn( IIIIlC, Pl\)pu~cd lIull MI', IkHI1l pcrnl)IlIIlIy lIdVlllICe
$125,(KJO ')1' hl~ UWlIlIlll/lCY Iu ADS, III unlcl' (hilI ADS hllvc ~lItTldcJIIllpCmlllll! clIpllllllo
lllllf;wJ, Thl~ plllllllnlllls Il.!I1<:clcd III Ilw (1II1CXC-CllIcd) ICltcl' uf IIIICIII dcllvcred hy ADS
rellre~clIllIllvcs 10 OSlolllhc 1I1lCI'I\UOII llf Jllly 9, 1<)%, which dUClIlIlClI1 Is II1111chlld hllrelo
II~ Exhlhll "D."
63, Dclllcd, The lIVerlllllJIIS of 1 63 COIIMIIIIIC Icglll cOlldllSloll~ 1\!(IIIIrlIIg 110
re~Il<lIlSlve plelldlllg, Dy WIlY of furthcr III1SWCI', lhcre WlIS 110 oml Mock pllrclulse IIgreemcllI
IIlId Ihell! WIIS 110 c.ousldcmlloll,
64, Denlcd. The lIVCl1l1elllS uf , 64 cOIIMltlllll leglll COllclllSlous requiring Ill)
resJlOlIslve pleHdlllg, Dy WilY of fllrther IInSWllr, there WIIS 110 oml Mock purchllse IIgreellllllll
IIlId Ihell! WIIS no consldcmllon,
65. Dcnllld, The lIVCl1nllllln of' 65 CllIIS111l1l1l leglll conclllslons requiring no
resJlOnslve pleHdlng, Dy WilY of fllrther IInSWllr, lhere WlIS no oml srock pllrcllllse agreement
IIlId .hllll! WIIS no consldllmllun,
66, Dcnllld. To Ihe cUlllmry, DSlls "ully clIpllblc of pcrtimlllnglhll DLA
AgfC(!menl Ilnd hilS enlllllll!<llhc servlccs of 1IIIlIIher slIbcunlmclor whose servlclls are
,Ill-
RCCCllllllbhllO PLA. Thll PLA Cll,Um.c1 111101111 WI)! dftllllOr of IIINN, cllrtlllllly 1Il11lmmllllllll
dRlIllllr IIf IIINN, by WilY IIfl\mhllr IIl1sWllr, It wlIuld hUll fllr 1I1l!lllllr IIkllllhllad Ihl1tlltll
cotllmcl would bu 1011101111 flllrtlllN shuuld ADS 1I11llJllllIIll ",llIsllrt 1IIIIllf hila OSI'I
",IOllolINhlp wllh OLA, pllrtlculllrly IllvelllhellJlrJler IIcls uf IIIlsfiu.SIUICll by Plolllllff,
67. Dellled, 1111l IIvenmmls uf , 67 clIlIslltllhllllglll cUllclllSlllllS ~lIlrlllllllll
I\!NIl<lIIslvll pl..mdlllll, By WilY Ill' furthllr III1SWlll', Ihlll\! WIIS IIU ul'IIl stock 11l1J\!h1lSIlI1I1I'eCIIIIlIII
olld Ihlll\! Will 110 cUlIsldllOltlulI. Tu the extenl the IIvenllellls III\! dccllled RVllnllellls of racl,
Ihllll/IJ1l1l are dellled, By WilY uf further III1SWlll', OSlllIcurpaOlllls hy refllrellcll Ihe
respolIslve OVllnJlIlIlIs af , 66 IIhove, By WilY uf further BlIswer, Ihe BVllnllellls relollllg 10
PerendBlIl'1I olleged "lIIlscUlllluCI" lire dell led Inllsllluch liS Ihey lire conclusory Rnd lock
sufOcllllIl spcclOcllY tu ellBble OSIIO fnllue II IIIllJllI I IIgfu I respulIse, By WilY of further
answer, allY review uf P1IIIIIII,.f's Cumpllllnllllllkes clcnr 111111 this 15 essentlRlIy a leglll, OIl1lllr
111011 011 equllllble IIctll)lI, Ihllllll heM ti.lr ADS, It IIII1Y be elllltled to sOllie IIICl.sure of
1Il0llelary dOlllages, alld Ihllt Its remedy III IlIw. r/I'RIII!//t/o (lilY remwy 15 IIpproprlRle ullder the
clrculIIslances would be fully IIdeCjuIIle,
WHEREFORE, Ocfendlllll DSI RetentlulI CorpuOItloll respectfully ~ucsts Judgment
In lis favor alld ogalllsl Plaintiff, tugelher with IIny IInd all Cuurt cosls,
NJ':W MA'l'Tm
I. Plaintiff's COlllphllnt flllls 10 KllltellllY CIIUSC of aCllolI soulldlllg III equity,
2. Plallltlff has a (ulllllld clllllplele remedy 01 law,
-19.
3, Plnhlllff'1 Clllllplnlmll euelllllllly II dn.lllllgelllcllolI d,~uw Up In c:quhy
0101111118,
4, TlIllnllloulllnlllNue In IhlN IlctlOIl IN II Num which 16 ~dlly IINcel1l1lnllblll,
~, OSliN 11I1:ompllllnce with IIN ohlll!"llonN under Iho DLA Agreemelll,
6, Thore IN no pf~601l1 dllngor Ihlll DSI will 11I60 Iho DLA Allreemonl, wholher by
AUgUNl 15, 1996 or olhelwl6ll,
7. DSI hllN received "CIII~ NOllce6" rl\lm DLA mlNlfll! only IWo INNues.
8. Tho cure flollces relllle oflly 10 Iho "CIIJ'C" or II bllck/ol! of dllCUUII!Jl11 yello be
IiCnllned IInd lhe llmely pkk up IInd 1~IUI1l of dllcumefUs rrom ULA.
9, DSI hllN Ilmely I~sponded 10 the CUI~ Notices,
1<1. PLA hllN Ifldlcllled lis SlIllsflldlofl wllh DSI's f~6111)flSe 10 lhe Cure NOII.;e.,
II, DLA IIPIJf\lVlIl would he required In order Ihlll IIf1Y tmflsfer or lllc OLA
Agreemefll be luwrul.
12, DLA IlIls flever IIpproved IIny IflIfl6fer of Ihe DLA Agreemelll.
13. PIlIlntlrf ADS hilS ufldelln hllflds wllh respecllolhe specll1c subjcclmllller of
Ihls nCllon,
14. Plahuirf'6 unclellnllllnds Include. bUIIIJ'C fllIllhuhed 10: (a) communlcllllng
with and/or hlrlnl! Ihe President of DSI Relentlllfl Corpoflltlofl, ofle Peler Callfllfloj (b)
communicating with lIf1d/or IIlrlng Mr, ClIllrllflO desplle kflllwledge or a fllIfI-comJlClc
agreement enlered huo by CllllfllflO wllh DSI Records Corpoflltillfl; (c) refuslflg 10 lender all
OSI Records CorJlomllofl's C{julpmenlllnd contmcl flHllerlals UpOfl proper demllfld all July
-20-
12, 1996 or followhllU (d) plckllllJ up II bulch of dOCIIIIll.!llIllo bu scllllned III OLA 011 Prlday,
July 12, 1996 IInl!r 1ll!IIIg llKpllcltly IIdvlsed 110110 d01il1 by OSI NIIJ\!Sl!nllltlVl!1 (a Bxhlblt
"0" hUJ\!loH M chunglllg IIlIISIl!r I""swol'lls nl!(:l!66ury for OSIIO IICCl!S. Ihl! OSIIOLA
COlllplllllr lySlclIl1 und (I) luklng olhllr IIcllonl dl!llgned 10 f",..nlle OSI'I uccen 10 Ihe
OSI/DLA COlllpllll!r ly6lelll,
IS. The Pllrtlll.' ncgotlllllons J\!llIllng tOllny JlOsllble stock pUI'CIlll5C IIgl'l!Clllenl
weJ\! nllwr I1l1ull1.l!(llInd nl! cnforcCllbl1.! IIgJ\!4!1Il1.!1lI Will ewr reached betwccn the partie..
16. Plaintiff l1lhl.!rwlsl! fnlloo to sallsfy condlllons prccedclll 10 thc fonnlltloll of an
I.!nfol'CCllbll.! IIgJ\!4!lIlcnl by {lilt/, (///(/ fulling or Nf'lslng 10 pmducc II defllllllw written
IIgJ\!4!llll.!ntlll!foN July S, 1996 al Il!qulnld by OSI.
17. PIIIIIIlUT cUlulnued to dl.!lIllllld addlllolllll concessions, IIdvancc nl!W propo511ls,
and IIl1cmptto hnposc IIddlllonllltenlls lifter Junl.! 28, 1996 ullllI OSI concludcd thlllno viable
agJ\!4!llll.!lIt belwcclI Ihc pllrtles would I.!Vllr be Slnlck,
18. Such ncgotlllllonl WI.!N for Ihc purcllllsc IInd slllc of 1111 the stock of OSI
Rctl.!nlloll Corponllloll, nllhcr 1111I11 for Ihc purchase IIl1d sllle u( DSl's assclS, such liS the
DLA AgJ\!4!lllclll Itslllf,
19. 011 July 12, 1996 Mr. Heam lIulltied ADS III wrltlllg thllt (I) DSI was
Icnlllllallllg allllspccls uf DSI's rclllllollshlp wllh ADS; (II) DSI was 1I0t hllcNstcd In
pursuing III1Y furthcr discussions wllh ADS rel!lIl'llllll! allY purchasc of DSI's stock, asscls,
contmct. ur othcrwlsc; alld (IIi) Ihal DSI dClllallded thc relum of all equlpmcllt uWlled by
-21-
DSI RelOllIlon CIl'1lOl1Ilh,m or Ila nubconll1lclor, DSI koma CO'1lOl1Illon, Allached hO",lo
IInd nllule II plll1 hon:or lIa BKhllllt "C" la thll ",flln.lnClld July 12, 1991\ correapondonce,
20, PllIlntlff IInd DSI did llnlllr Inlo nOllollnllona which Included dlacuaalon of Nome
nnunllemem whel\!lly ADS would pc:rfonnthll sllrvlces required undllr Ihe OLA Allreomenl,
nnd 1155UIl111 cllrtnln dlllll. oWI'4lIO Ihlrd portllls by DSI,
21. The nllgollollons IncludL!d discussion or Ihllllnymllnllly Plnlntlff 10 DSI of
roughly rorty pcn:lllll (40%) of IhclILII pronls IIcnllmled punmnmlo Ihe DLA All rcclllllm ,
22. Mon:over, onlhe uOemoon of July 9, 1991i, ADS, oOcr nlllllecllnlllo comply
with OSl's condlllon 1111I1 ADS' ProllOsul be reducoo 10 wrlllnll, Plulnllrf Ihlln, ror Ihe I1ral
lime, propolied Ihal Mr, H~m pc:J1ll1nally udvoncll $125,000 of his ownll1oney 10 Plohlllrf,
In order Ihlll Plalmlrf hove sufflcllllll opllmllnll copllullo proceed,
23, nl15 proposul is retlccllld Inlhe lelter of huelll delivered by Plnhlllrr's
repl\!5enlnllves 10 DSI on July 9, 1991i, A Inlll oud COm!C1 copy (II' Plulllllrrs Illltllr 01' lnlem
15 1I110choo herelo IInd mudll 0 port hereol' 05 EKh1b11 "B."
24, No represelllallve of DSI eVllr llKcculed Ihe leller of Inlcnl,
25, Don H~m. on behalf of OSI, rofu500 10 cKcculelheleller of hllelll on July 9,
1991i,
26. Only securily lu Ihe amount of oll~5l $850,000 would be sufnclellllo
compe:'l5Ule OSlin Ihe event nnInjuncllonIs hnprovldenlJy entered,
27, Upon Infon1\ollon and belief, Plohlllff Is nOI oble 10 poSI odcqunle 5ecurily or
bond 05 required by Pn.R.Clv,P, 1531(b).
-22-
NKW MA'I"I'Ir.1t IN Tim NA'I'URIr. oar A COUN'I'Ir.RCUIM
1'OR'I'IOUH IN'I'Ir.ltlo'IDlliJ"11:E_W.u'J1.CON'l'ItAC'I'UAL ItELA'l'Jmiti
l. 1)lnlllll""N COlllpllllrll reclt~s Ih~ ~xIM~lIl'C of II cOlltmcl bCIWL'-CII Dcrcmdnm,
OSI Relemloll Corpomllllll ("PSI") lI11d Ih~ J)llfcIIS~ lJ.JglMlcs Al!~lIcy ("OI.A"), Ih:ll.
Plnhulff'8 COfllpllllllllllllxhlbh "A,"
2, Plollltlfl's cOfllpllllrllll180 ",.cites thlll Advllllccd POIII SolullollS, IIIC, "Ia Ihe
s~ccesSl)r olld [sic) IlIleresl olld lIulgllcc of ADS. Advllllccd OOln SOIUllolIs. 0 Pellllsylvnnln
Portllel1hlp," ~~, Plnlllllrf's COlllp11l11l1 , 2,
3, Thellvenllcnts of Ihls coulllerelllllllllre directed to Advllllccd Dalll SOlUlloll8,
IIlC, (10 the eXlcllllhu S11l11e fIIay Ilc dccflled Ihu 8UCCC880r III Interesl or IIsslgllcc of Advanced
Datil SoIUlloIIS, II Pellusylvallla Pllrtnurshlp), Additionally, Ih~ IIvennulll8 or Ihls
counlerclalrn are directed 10 th~ pllrtncrs or Advollced Dlltn Solutions, upon Infonnollon ond
belief Rick Esch~nwald olld P~I~r Ch~uvrollt, IlIlhelr Individual cllpaclllus, As did Plolmlfrs
III Ibulr COfllplallll, bolh th~ portll~rshlp IInd th~ corpomllon will bc rercrreJ 10 herelll a8
simply" ADS" or "Pllllrlllffs,"
4, ADS plllvlded ceJ1l1ln d011l ~ntry IInd sClllllllnl! 8l!rvlc~s 011 behalf of DSIIII
perfonnollce of DSl's IIgrccfll~nt whh the Dcfcllsc logistics Al!ullcy ("DLA"),
S, ADS Irllcntlollolly ond mlll~riolly Inlcrfc~1 whh DSI's perfonnoncc of 118
obligations 10 DLA Oil or OlxlUl July 12, 1996, III Ihc following portlculors: (II) ADS picked
up II bOlch of docufllents 10 hc scaunl!d 01 DLA IIft~r bclng expllchly advised 110110 do 50 by
DSI rcprescfllollvcs (w: Exhlbll "0"); IInd eb) ADS chllllged Ih~ moslcr pmwords nccussory
-23-
for OSIIo IQCOQ llIe OSI/OLA compulor '~'Iom upo" Icaml"ll of OSI'.I"Io"11o IIImll"llo
ADS' role I" 1lI0 performanco of Iho contracl.
6. 1110 acUo" IAken b~ ADS WOl'c de.lllned 10, IInd did CIUllO dlmalll 10 OSlin
tho followlns part!cularlt el) cerlAln dllla which had bccnscnnned wu rende~ Inacceulblo
10 OSI b~ ADS' acUons and lIlusl now be l'ClClInned al OSI's IlxpcnllOl and (b) DSllncurred
.lsnlflcanl overtime (or III own Ilmployees Ilnd thollO of Its raplaclllllllnl .ubcontrllclor over
the wcckend of 1uly 13 and 14 10 thllt OSI could per(ormthe DLA agreement wlllloul
Int.errupllon.
7. The acUonslaken by ADS Involve the UIlO of wrongful means, and wel'C
otherwlllO laken wllllOUI privilege or jU511flcatlon,
WHEREFORE, Defendnnt, count.er.clalm Plaintiff OSI Retention Corpol'llllon,
demands judgement In III favor and agwnst Pllllntlff, counter-claim Defendant Advanced
Data Solutions, Inc, and the pllrtners of Its predeccssor, Advllnced Data Solulions, Rick
&chenwald and Peter Cheuvront, In 11II amount cXceedlng this Court's mlllldalory arblll'lltlon
threshold.
TORTIOUS INTERFERENCE WITH CONTRACTUAL RELATIONS
8, DSI Retention Corporation Is party to a certllln shlll'eholder's agreemenl
contalnlns a noncompctlUon provision with It.~ former Presldcnt, Mr, Pcter Califano.
9, Upon Information and belief, ADS WIIS aware of IIIId had knowleelse of llIe
exist.encc of this agreemenlatall material times,
.24.
10, A. ADS' own complaint recite., APS and DSI lire 'competltor.' lllthll flied
of computer IICll/InlllS and Imlllllng. 5" ADS Complwntllt1 S,
I I. ADS Inlenllonlllly uud willfully Illdr.d uud libelled 11 vloll1llon of the provlllonl
of thl. nonoomllCllllon UllrCCllllenl belwcen DSI Ilnd Mr. Cllllfllno by cOlllfllllnlcatlnl with him
and, upon Inforrnollonond hellef, providing hllll certain cOfllllCnlll1llon,
12. AilS' cOfllfllunlcllllon with und/or cOfllpenslIllon of Mr, Cllllfono In deroSlltlon
of the nonoolllllClltlonllgrcelllenlllnd WAS deslgnr-d 10 secure cOfllpelltive udvlIlllase for ADS
11II aaalnstthe Interesl of DSI.
13. In comfllunlcallng with Ulld/or comllClHillllng Mr, CnJlfano In derogation of the
obligations imposed by Ihe noncofllpcllllon IIgrcemenl, ADS efllployed wrongful ml!al15 and
acted wllhout WlY IlIwful Jualll1clIl.lon or privilege.
14. ADS's cOlllmunkllllon with and/or cOlllpenlll1llon of Mr. Califano, l!.II set forth
above, WI., dcslgned 10, IUld did rcsult In dafllllge 10 DSI.
WHEREFORE, DefendnJ1I, counler.c1ulm Plnloliff DSII~etcnlion Corporation,
demands Judgefllenl in Its lilVor lInd Ilglllnal PllIlllllff, counler.c1nJm DefendllJ1t Advanced
Dam Solutlons, Inc. Ilnd Ihe partners of lIs predeccssor, Advanced Dam Solullons, Rick
EschenwaJd and Peler Cheuvronl, in nn OOlounl eltcceding tills Court's mandatory arbitration
threshold.
-25-
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Lett.r 01 Int.nt for Purah...
DBI R.aordl R.t.nllon Oorpl)rlUon by ADS Advlna.d Oil. 80lullonl
The PUrpOI' 01 Ihls documenlls 10 prevenl1J811~ecordll Rellmllon Corporallon and lis
olfloers or agents Iroll1 enlerh1lllnlo any negollath.lns regarding Ihe sale of DSI and any of
lie sasols once Ihls documenlls signed and oxeouled.
Tho subslanoe 10 tho sole 01 DSI Records Raton lion 10 Advanoed Dala Solullonsls 88
follows:
" Assume sll conlraots:
8, DLA Imaging conlraot- N SP3100.96.D.0005
b. PFMA Imaging Inslollallon conlrool
(l. Assumo outslondlng Debl or DSI Record Relenllon Corp. 8S follows:
8. ASK Technologlos
b, Watermark
c. GOS
d. ORB
8. Tektronix Ptlnter
I. Jade Planet
g. Wolf
h. NSG
I, ADS (prior DSI purohose)
/, ADS (work In progross 6/26-)
lolal
$4,567.00
$1,516,00
$61,182.02
$9,732,02
$11,000.00
$4,096,00
$1,000.00
$18,000,00
$14,260.00
:Ii 36.600,00
$168,862,04
(I. Don Hearns wllllnluso ADS Advanced Dala 50lullon5 wllh $126,000.00 In
oporallng copllallo be repaid at the rate of _ % over _months beginning
September 1996,
4, Purchaso prlco lor 051 Records Retention Corporallon Is basad on lorty percenl
(40%) of Ihe nol protll generated lrom the OLA conlractIl5P3100.96-D.0005
paid over a sixty (60) month period beginning September 1996,
· The 40% net profit Is basad on Ihe contract amount 01 $860,000,00
yearly any amount over $850.000,00 will bo paid on a 20% net profll
basis, The additional amount will be payable by February Ihe lollowlng
yesr,
· The allached documents "A" outline overhead costs Ihal will determine
Ihe nol protllto be paid to Constance Hearns lor Ihe purchase of OSI
Records Rotonllon Corporallon,
'118' L1l/lz Pike. ~(Jncastnr,PeI7nJvlvanlo "60/. (7171 58/'5294 Fo><(n7)58/,/089
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ADS, ADVANCUD DATA
SOLUTIONS, INC."
Illalnllff
IN THll COURT Of COMMON PLEAS
Of CUMlml\LAND COUNTY,
IlENNSYLVANIA
No. 96-44781!.qulty Term Civil 1996
v.
DSI RETP.NTION CORPORATION,
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Defendant
CIVIL ACTION
Dl!:lrENDAN1"S VEI\nrIlW IU!.SllQNSE 1'0 "
PLAINTIFF'S MOTION I;,()R l'I\ELlMINAI\Y INJUNCTION -.
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AND NOW COMES Defendant, DSI Retenllof\ Corporallon, ("DSI") by and throuah
III counsel, Eckert SeamWlS Cherln & Melloll, and /IIDkes the following respon5C to
Plalntlfrs Motion for Preliminary If\Juf\cllof\, staling If\ support thereof III followsr
I. The avermen15 of 1 1 require no res!l<lf\5C. By way of further answer, Is
admitted, upon Infofmatlon and belief, 1I1at Plalnllfrs Complaint wal llIed on August 7,
1996. It 15 further admitted thatalrue and correct copy of Ihe Complalntls atlllChed to
Plalntlfrs Motion for Preliminary If\Juncllon. Any Implication that any avermen15 contained
in the Complalnt are accurate 15 expressly denied. To the contrary, DSllncorporate., the
responsive avermne15 set forth In the accompanying Answer wilh New Matter and
Counterclalm.
2. Denied as stated. Plalnllfrs Complaint Is a legal document which sptakJ fOf
Itself, and Plalntlfrs attempts to characterize the content thereof are expressly denied, It Is
further denied that Defendant hili wrongfully falled 10 perform any agreement betWCC/1 the
puUII, or hu pl'Ilyented Plwnllff from performance of 1IIl~ allrectmenl pun:huod b~ II
belween DefOlldanllllld !he Defenle Lolllslle. Allllne~ ('OLA"), 1'0 !he conlnlry, Defendalll
lpecllnca1ly den Ie. U.alany h:aally enformble Itllreement waa eyer rwhlld between 1'lllInUff
and OSI.
3. Denied. The averment. of , 3 con.tltutc naked leaw conclusion. requlrlnll nl)
mpon.lvo plwllna. By way of further IIIlswer, II lOt forth above, no such "allrectment"
between !he parties .lIlsll. The remaining ayerments of , 3, rellltlng lO damalles which will
1II1elledly now lIJ Plaintiff, ore denied os conclusions of low requlrln8 no rc:sponle. By way
of further answer, IlI\Y Impllcntlon that IJlnlntlrr Is entitled 10 Injunctive relief, lOaether wl!h
IIIlY Implication that Plwntlff will suffer allY form of harm (much less Irreparable harm) are
'pecllncaJly denied, 1'0 the contrary, Defendalltlncorporates Its resl>onslve overlllenlllO , 2
above.
4. The averments of , 4 constitute legal conclusions requiring no respon.lve
pilla/Una. By way of further IlI\swer, It Is speclnc:ally denied that Plaintiff has no adequate
remedy at law. To the contrary, IlI\Y reading of Plalntlfrs Complaint leads 10 the conclusion
!hat thi. ISIll\ ordinary busln~ss dispute Which InOY be rel11edled by dal11ages, a5lumlna
argUtndo that Plaintiff Is able to establish (I) the ClIlSlence of IlI\Y agreel11ent, (II) any breach
!hereof; or (ill) IlI\Y liability or dal11ages nowlng lO Plaintiff frol11 DSI at all,
-2-
WHBRBPORB, Dotendanl DBI RetonUon Corporallon re.poolrull~ I'Ilqlltlla Ihat 11I1.
ColIn d,"~ PlalnU",. Mollon (or 1\ PrellmlnU'Y InJuncUon,
Re.pcclf'ull~ lubmlllrd.
ECKERT SEAMANS ClIltRlN " MELLOTT
J.O~R- -
J:. Bradshllw, Ellqulrc
Supreme Ct. 1.0. #61975
Christopher M. Clcconl, Esquire
Supreme Ct. 1.0. N19~31
One South Mllrket SquIre Building
213 Mllrket Street
HlllTisburll, PA 17101
(717) 237-6000
Attorneys for OefendlUlt
OSI Retentloll Corporation
. I
DATBD~ AII,U.l12. 1996
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I, Conllancl Hearn, hereby verify lIIall am ilia Pmldanl of DSI Relellllon
CorporattOll and am aulllorlzed 10 make 11I1. Verlflcatlon on III behalf and horeby .lalO that
UIe f1c1l lilt forth In 11I0 forqolnl dooumenl are lnIc and comcllO tho '*1 of my
InformatlOll, knowledlo and belief. lunderlllllld thai (aJIll s141en\enll herein 11'0 mado
IUbJecllo the pcnaltlea of 18 Pa, C,S.A. 14904 relating 10 unsworn verification 10
authoritlCl.
fZ4t/ntfJ J ,~U~
Con.lance Hearn
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EXHIBIT "A"
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AOS, /WVAl'/CIi:P PM'A
SOLUTIONS, HIe,
Plaint if f ,
IN 'I'HIl1 C~UI\'t. OF COMMOM Pr..Il1AS 01"
L';UMIlIiJRLAMO COUtlTY, PIiJMMSYtNAMIA
v.
Mo.
CIVILI 1091$
PSI RETENTION CORPORATION,
Pefendant
CIVIr.. ACTION
MOTICE
YOU HAVE BEEN SUIi:P IN COURT. If you wish to defend against
the cla~ms set forth in the following pages, you must take action
within twenty (20) ddays after this complaint and Notice are
served, by entering a written appearance personally or by
attorney and filing in writing with the Court your defen$es or
objeotions to the claims set forth against you. You are warned
that if you fail to do so the case may proceed without you and a
judgment may be entered against you by the court without further
notice for any money claimed in the complaint or for any other
claim or relief requested by the plaintiff. You may lose money
or property or other rights important to you.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU
00 NOT HAVIi: A LAWYER OR CANNOT AFFORP ONE, GO TO OR TELEPHONE THE
OFFICE SET FORTH BELOW TO ~IND OUT WHIi:RE YOU CAN OET LEGAL HEr..P.
COURT ADMINISTRATOR
4th Floor, Cumberland County Courthouse
1 Courthouse Square
Carlisle, PA 17013
(717) 240-6:'00
NOT I C I A
Le han demandado a usted en la corte. Si usted quiere
defenderse de estas demandas expuestas en las paginas siguientes,
usted tiene viente (20) dias de plazo al partir de la fecha de la
demand a y la notificacion. Usted debe preaentar una apariencia
esr-rita 0 en persona 0 por abogado y archivar en la corte en
forma escrita sus defensaa 0 sus objeciones alas demandas an
contra de su persona. Sea avisado que si usted no se defiends,
la corte tomara medidas y puede entrar una orden contra ustad sin
previn aviso notificacion y por cualquier queja 0 alivio que es
pedidt.l ..n la petiuion dlt dllmllndll, U/ftqd pued", perde/.' dillltro 0
sus p/.'opiedlldea 0 otros dqr"'Ohos importontea pura uste~,
LLIl1VIE /BSTA OItMAMOA A UM A/lOOMO IMMIEOlM'AMItM'I'/l, SI MO 'l'IlEMIE
ABOOI\OO 0 SI MO "IlEME ItL PIMIERO BOFICIlEWI'/r. PI!: J?MAR 'I'AL SIEIWICIO/
VAYA Jim J?IERBONA 0 LJ,.AMIE POR 'I'ELlEI.1'OMO A LA OI'ICII'IA CUYA ptR/ECCION
sm mNCUENTRA mSCRITA AIlAJO PARA AVIi:RIOUAR POMPIl1 SI!: PUEOW,
COMSIEOUIR ASIB'I'IEI'ICIA r../lOALI,
COUR'l' AllMINIS'l'M"OI~
4th 1.1'1oor, cumberland County Cour~house
1 courthouse Square
Ca/.'lisle, PA 17013
(717) :UO-G200
McNEES, WALLACE & MURICK
By
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an R. Boy' .
AttQrney I . No. 39850
100 Pine Street
P. O. Box 1166
Har.riaburg, PA 17108-1166
(717) 232-8000
Attorneys for Plaintiff
Datedl
I
AU9Ult ? I 1996
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~, ~)efclfldllllll~ ell""l!ellllllhu hu~llIm, Inlur 111111, 1)1' L:lllllllull:r ticllllnlnllllnd
hllllllhll! uud I~ II L:Illllflull11lr of 11111111I"'1',
O. CllIltililllCU Ilullm I~ Ihu IIretildunllllld ~lllu tihllreholdur of J)UfUlldlllll.
J), JrAC'I'UA" IIAC~!JlmUNJ)
7, Dufuudlllll, 1/11 MIlY 13, 1996, ullluruclllllollllllllrUuJllulII wllh Ihu Pefl/Utill
Loglstlcs Allcncy ("DlA") 10 ~ullllly computur ~Cllllllllllllllld Imllglug ~ervlces for thc
Pcfcusc Dlstributlou Rel!lllU cutillll New CUJllberluud, PUIIII~ylvulllu ("PlA Al!reemcnl").
A truc IInd correct copy of the DlA Al!reement 15 lI11uched hurelo us Exhlbll "A."
8, Under the tenn~ of the OLA Agreemelll, Defendunt I~ required to timely scnn
and Imugc documellls for the PlA,
9, lJllder the DlA Agreement, It wus e~tlmated Ihat Pefendant would scan
upproxhnately 3,000,000 Iluges per yeur, ut n rule of 23 cent~ per puge. The Agrcemcnt
furthcr provided that DSI would Index upproxlmately 2,000,000 documcnts per year at rnle
of 8 I;cnlS pcr line. The Agrecment was for onc yellr, with an opllon for up to four
nddltlol1lll ycars.
10. Upon infomlution and belief, Defendunt was ul1llblc to cffcctlvely mcctlll
contractual obligations to DlA.
11. As of the end of June, 1996, Defendant was In scrious financial difficulty.
12. PJalllllff and Defendant were acquainted Ihrough Plaintiff's provision of IImitcd
scrvlces to Defendant In 1996,
13. As of the end of June, 1996, Defendant owed Plaintiff $15,000 for scrvlccs
rendercd by Plaintiff to Defendant, Said amount hus not been paid by Dcfcndant.
- 2 -
1,1. III JlIIIU, 19l)(), lJufulIlflllllllllll PIIIIIIIII'I' ulllur~llllllulIUllullllllllllij fur PllIlllIlfflo
purc.:hUNlllhu I)LA AIlIWIIlUIll frlllll I MUIIlIII III 111111 hlllbMllIW rUhpullhlhllll~ Ill' purfllrnulIlcu
uf Ihl! DLA ALlrl!UIIIUIII,
I~, 011 JlIlIU 2M, 1'1'11\, I MUlIll II lit 111111 PllIl/llIff ullturcllllltu 1111 Ilrull1l1ruUIllUIlt fur
Plull1llff tll purc.:hll~u thu DI..A AllruUlIlc/ltlllllltl) II~MIIIIC rUbpllll~lhlllt)' of purfl)rlllu/lce of Ihu
DLA, Uij wull lib h) IIbMIIIll! $l~H,II()2.l).II/I /Jufe/lllll/lt's llubl. PllIll1llff ulso Ullreed 10 pu)'
Defendlllll fOrl)' per cellt (40%) uf thl! lI~t prllnts lIullurutell b)' the UtA Allrl!l!llle/l1.
16, Conslstellt wllh Ihu terllls Ill' the ullreelllem between Defendul1lund Plullltlff,
Plulnllfftook pos~mlon of lJefendill1l'S 5cllnlllllll IIl1d I III II II 1/111 equlplllel1l.
17, CIlnslstunl wllh the terlllS Ill' the lI11rcelllelll between Defendllnlund Plulllllff,
Pllllnllf!' bellun 10 dlrectl)' sUpervl~e Defcndlllll's l!lIlplo)'ees.
18, Conslstenl wllh Ihe terlllS Ill' the IIgreemel1l betweell DefendUl1lund Plulntlff,
Defendunt begiln to refer ulllnlJulrles cllncemlng performllnce under the DLA Allreement to
Plulmlff.
19, Consistent with the terms Ill' the ul!reement between Defendilnt und Plulntlff,
Plulntlff bel!un retrieving, 5Cllnnlnl! IInd Imlll!lng DLA 1I0cuments pursuuntto IJle tenns of the
DLA Agreement.
20, Consistent with the temlS of the ugreement betweell Defendunt und Plulntlff,
Defendunt begun forwurdlng documents IInd Infomlullon to Plulntlff.
21, In Jul)', Plull1llff Invesled over $120,000 In lime und purchAse of equipment
und supplies to meet its obllgUtlons under the terms bf the ugreement between the purtles.
- 3 -
211, Plnlllllff hns dUllIlIlldud Ihlll /)UfUlldlllll purfor/ll lis IIl1ruen\unt with Plnlntlff nnd
IhntDllfllndll1ll PllY PIIIIIllIIT I'm' thll sllrvlcllS rundllJ'llll hI /)ufunllllnl. fu:Illlxhlhlls "/)" llnd
"l!," lI11llchud hurclll,
29, Duli:ndlllll hils rufusud tll cllhur purlimn lis "11rCUlllullt wllh J1111lllllff or PllY
Plalllliff for the survlm rllnllurud hy J1ll1lnllff,
COUNT II U1mACH 01; CON'l'ltAC'I'
30. Plaintiff IIlCOrpOrBtlls hy rllfcrullce thlluverllllll1ls Slit forlh III PlIrullrnphs 1.29
of the Complulnt 05 If set forth III full,
31. Thll orulullreelllent rlluchcd by the purtles WIIS supported by cOllslderatlon,
32, The lIgrllelllcllt betwllclllhu plll'tlcs WlIS the result of un offer by Defendant to
convey the DLA Agrccmelltund Plullltlf,.,s cOll1l1lulllcutcd ucceptance of the offer.
33. Dcfelldant's acknowledllclllllllt ulld ulldcrstalldlllll of the cxlstence and tenus of
the agreement Is evidenced by Defcndllnt's (I) trullsfer of equlpmentllnd persollnelto the
control of Plaintiff; (2) referrlll of crcdllors IInd cU510mers to Plai/lllff; (3) neglect of 115
obligations under the DLA Allreelllcnt lInd knowlcdlle of Plaintiff' 5 lIssumptlon of the
obligBllons under that agrccment; and (4) failure to satisfy debts owed to Plaintiff due to
Plaintiff's forgiveness of those dcbts as 1I result of the agrecment between Plaintiff and
Defendant.
34.
35.
Plaintiff.
Defendant has materially hrcuched the agreemcnt between the parties.
Defendant's breach has resulted In subsll1ntlal damages and lost proll15 to
- 5 -
WllllRllFOltE, 11111111111'1' dllllllllld~ lhllt jUdglllUlI1 hllllnlUred III Its fllvnr Illl~ IIgllhl~t
Dllfllndlll1l for COlllrulI~lIlUr>, dlllllllgus In eXCllss of thll IIrhltl'UllllII II III Its uf this CllUI'I,
10llCllhur with equltllble I'ullllf 1Il!IIII1S1 Dufcndlllll, liS wclllls hlllll'llSllllld CllSts,
COUNT III QUAN'I'lIl\1l\1/mUI'I'
36. Jlllllmlff IIICOl'porulcs by rcfllrellcc lhll IlVel'lIlllllls Sill fnrth III Pllrllgrllphs 1.35
of thll COlllpllllntlls If set fOl'lh III full.
37. An orulllgrellment exlsled belweell the purtllls.
38. Defendlllll brellched lhe ol'lllllgreelllent.
39. Prior to Defendullt's ullllalemllerllllllllllon of the oral Agreement blltwllen the
parties, Plalnllff Invesled u SUbSlAI1ll1l1 sOm Ilnd performed 1111 of lis obllgllllons undel' the
ugrifemel1l,
40. Defendllnt owed II dUlY 10 Plulmlff 10 perfonn Its obllgullons under lhe
agreement between the parlles.
41. Plulntlff hilS suffered subslantllll monetul'Y And Irrepllruble hAnn as a result of
Defendant's fallurclo meet hs obllgBllons under lhe agreement belween lhe parties.
42, Defendunt hns been unjustly enriched und hilS received benet1ls to which It Is
not enlltled as II result of Pllllnllff's perfOl'll1llnCe of lis obllgalions under lhe ngreement
belween lhe parties,
WHEREFORE, PJlIlntlff demllnds lhal judgment be entercd in ilS favor and IIgah15t
Defendanl for compensulOry dumllges In excess of lhe arbllrllllon limits of this Court,
together with Injunctive relief ugalnst Defendunt, as well as Interest and costs.
- 6 -
CUUNT 11I1 1'ltoI\IIS~'l)Jty mi'I'OIII'~:l.
,~3, 1'llIlnlln' Incorrornll:~ hy l'l:ful'l:ncl: Ihl: IIwnnunlK M flll'lh In PIII'IIIlJ'llplls 1.4l
oflhu COlllplllllllllK If ~ul 1'111'111 In filII.
44, In nCllollulllllllhc Ulll'CCnwllt hClwccn IIlulnlll'l' und IJcfl:lldllllt, lJefundulll lIludc
ll1ulcrlul Mull:lIlenls of fuct u/llllndIlCCIl1l:nl~ 10 IIlu 111I I,.,. cOllcl:rnlnll L>l:fl:ndlllll's Intelll to
enler the ullreelllcnlund Its plll'pl)~l:S Illr dolnll ~O,
4.5, Thc 51utl:Il1CIllN und InducclllcnlK Illude hy Dcl'cndulll nre UJllrue,
46. IJr:l'endunl kncw Ill' Nhould huv~ known Ihc SIUICll1cnl~ 'lIId InducclllclllB to be
unlrue.
47, Ocl'cndunt fullcd to cxcrclNc rcuMlllublc curc und cOlllpctcnce In lIlaklng the
slatemen15 IlIld Inducelllcnts to IIlnlllllfC
48. Defendullllllude Ihe 5tutelllcnls ulllllnducemcnlll to PlulOllff for the purpose of
persuading Plulntlff 10 entel' 111I0 the Ullrcclllent.
49, Defendunt knew or should have known Ihllt Pllllntlff would rely upon
Defendllnt's stlltemenlS und Inducemenls.
.50. Pllllllllff relied upon the statemellls IInd Inducements IIlllde by Defendant in
entering Into thu IIllreclllent.
.51. Pllllntlff hilS suffered substantlul hurm liS u result of Its rcllllncc upon
Defendant's mlsreprcsenlllllons IInd Inducements.
WHEREFORE, Plulntlff demllnds thllt JudlJment be enterud In Its favor and against
Defendant for compenslltory damnllcs In excess of the urbltratlon Illllits of this Court,
togethcr with Injunctive rellef agulnst Defundant, 115 wullus Interest and costs.
- 7 -
COUNT IVI l>IWAMA'I'ION
.52. l'llIlllllI'f IlIcu"lllnllc~ hy rcfcl'cncu Ihu lIvurmulII~ ~utliJl'lh Inl'lIrulJrllphs 1..51
of Ihu CompllllnlllN If sut forth In full.
53. Defcndnnt, Ihl'lJUllh It~ ufl1cm, rcpre~ullllltlvus IInd IIllunts hllvc IIIl1de "QI~e: nlld
defllllllllol'Y sllllumcnlS IIboull'hllntlff IInd lis ofl1curs IInd mllnllllulllunl personuul.
54. Thc flllsu IInd dcfllJllIIIOl'Y sllllcmul1ls by Dcfcndllnt hllve hllrmud l'llIlnrl,.".s
rcpulntlonIn lhu community III which II is loclltud IInd In which II does huslness.
55, The flllse nnd dufllmlllory ~lntumcl1ls by Defendnnt wcre Intunded 10 hallll
Plnlnllff lInd 10 deler olhers from dolnl! buslncss wllh l'lnlntlff.
56, The false nnd deflll1llltory stllteJllcl1lS of Defendllnt were nol prlvlleged.
57. The false and defamalory Sllllcments of DcfendllJ1l were made negligently or
wllh reckless dlsrel!lIrd for the lnuh,
58, Plaintiff has bcenllencrally nnd spuclally hanned by the false and defalllatory
Slalements Illade by Defendanl.
WHEREFORE, Plaintiff dClllands Ihat Judglllent be enlered In lIs favor and agalll5l
Defendllnt for compensatory damages In excess of lhe arbitration IImlls of this Court, a5 well
as Inlerest and costs.
COUNT V: SI)ECIFIC PERFORMANCE
59. Plaintiff Incorporales by refcrence the avennenlS set forth in Paragraphs I-58
of Ihe: Complaint as If sel forth In full,
- 8 -
60. I'lllltlllrr nnll /)lIfllnllnlll vlllulllnrlly lllllllrllllllllo IIIl11rlllllllrllllllllllll pur,ullnllo
which, 1l1ll01l~ othllr Ihhlll" I'lnhllllT WIl' 10 Jlul'chn'll thll clllllJlutllr 111I111111111 bu,lnllu of
Dcfcnlllllll.
/I L The ornlallrclllllcl1I rllllchell by Ihc pnrllll' wu, supportell by cOllsldcrallon,
62. The orulullrellllllll1llMWllCIl Ihll pllrlh:, WI" Ihc I'esull of 1111 orfer by
Dllfcndllnllo sclland I'lulnllff's cOllll11unlcated acccplllllce of Ihe offer,
63. I'lalnllff perfol'llIcd hs ull of lIS obllllullons under Ihc UIlI'cclllelll prior 10
Dcfendant', unllalerullermlnallun or Iheugreclllcnl.
64. Defcndllnl failed 10 meelhs obllgullons under Ihe IIgreemenl belween thc
Pllrtlcs.
6'. The DLA conlrllct, which 1'111111111'1' WIIS 10 purchase under the agreemenl, Is
unique, anllmonelllry damages wlllnoludequlllcly remedy Defendant's breAch of Ihe
agreemenl.
66. Upon Informallon and belief, Defendanlls Incapable of performing Ule DLA
Agreemenlund said contracl will be losl upon such failure by Defendanl.
67. Upon Defendanl's 1055 of Ihe DLA Agreemem, Plalmiff will be withoul any
viable remedy to Defendant's mlsconducland breach.
- 9 -
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DATil ItlVOIr;1l NO,
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ADS, ADVANCED DATA
SOLUTIONS, INC"
Plaln~ff
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY,
PI!NNSYLV ANIA
No, 96-4478 Etlully Term Civil 1996
v,
DSI RJ!TENTION CORPORATION,
Defendant
CIVIL ACTION
DSI'S DaUlt' IN OPPOSITION 1'0 PRELIMINARY INJUNC1'ION
I. Intruductlun
On or about August 7, 1996, Plaintiff AdvBllced Oala Solutions, Ine, ("ADS")
commenced the Instant procecdlngagalnst 051 Retention Corporation ("051") by
Complaint,' The Complaint was accompanied by a Motion for a Preliminary InJunclton BIId
Brief In Support thereof, On the morning of August 8, 1996 lhelle mlngs were delivered III
courtesy copies to the undersigned. On Friday, August 9, 1996, after being authorll.Cd to do
SO, thl\ undersigned advised I'lalntlrrs counsel that he would accept service of the same.
Also on Au&ust9, 1996, this Court scheduled a hearing on IIlaintlfrs Mollon for the
afternoon of Tuesday, August 13, 1996 at 1:00 p.m. before the Honorable Edgar B.
I MlIm of Plalntlfrs Complaint Is facially Inadequate as a mailer of law and would clearly
be subJcctto Preliminary Objection, However, In an allemptto more fully provide the Court
with BII accurate picture of the background of this dispute, OSI has decided to file a "merits"
Answer rather than a dilatory motion. Nevertheless, OSlls amal.l'~ that ADS would, Inter
alia: tile a fjjWn for "Promissory Estoppel," rather than appropriately pleading the same III a
substitute fllr consideration In Its Breach of Contract claim; !ile a Defamation dall1l bB5ed
upon "false BIId untrue sll1tements" without bothering to Identify the same; liIe a QUBlltum
mmI11 claim (which is IIn equitable alternative to a contract claim) by pleading that "there
was an...agrccment," etc. Moreover, Plaintiff's brief Is rife with assertions which are
nowhere supported In Plalntlrrs verified Complaint.
Ba~Ie~, I, 'nI11 BrI.f II Iubmhled In oppolltlon 10 Plalntlrrl' rcqu'll for a prellmhlll'~
InJuncllon,
n. "raUlIIlnt
&l1I,1" I!.InnDI,UDIIlbly "ILd) Ihl ~DI.hlll~llwI l!ll!mlnls or
proo' tD lustlhl I~l! 11I1~y or I mln.,,,tory Il1IulIdlon. Ind
IJIllrerol'lthl! Mollon ror I'nllmlnary ItlJundlDn must be
daWId.
A. Stllndllrds
In order lO demonsllllle Its enllllemenllo preliminary Injuncllve relief. Plaintiff mUlt
"\ablllh (1) thalli hili a clear rlghlto relief: (2) thatlhere 15 II likelihood of Immecllale and
lrrepanble harm which cannot be compen5llled by d~mages: (3) thai 11/1 Injunction would
mlOre the partlellO the IUltus quo as It exlsled !)riDr 10 the OSl's "wrongful" conduct I (4)
that I grealer injury may result from denial of the Injunction then from the entry of the IIlmel
IIId (5) that the Injunction 15 reasonably sulled lO abale the harm. John o. Br:yanl CDmpIIJIY.
Inc. v. Sling Test\n&...wJd Repair. Inc., 471 Pa. 1.369 A.2d Jl64 (\977). The lest Is
conjunctive: I.e., Plaintiff may not recover unless It has shouldered his burden of
demonstrating all five clements. Otherwise staled, a failure of proof on even WIl of the five
elements compels denial of Ille requested relief.
Indeed. under the circumstances at bar, Plaintiff seeks not only 11/1 Injunction, but a
mandal.or:y injunction, the distinction being that Plaintiff seeks not only to enjoin onlolnl
IICtlvlty, but rather requests this Court to cOnlpel DSllO enter InlO performance of III a1leled
qreement which OSI denies exists, As the Superior Court recenlly held, "[W]hen a
-2-
prollmll\ll'Y Injunction contains mandatol')' provlsluns which will require a chlll1al In the
position of th. partI.s, IllIIuuld be aranted even more sparh1aly thlll1 0111 which II merely
prohibitory," 1h1'llll cQ. Serv'cl!I v. PhllwlelphllllnQulrllr, 337 I'a, Super, 2,U, _,IlB6
A.2d 997, 1000, (1995) ctl/1I1l Zebm v. Scbool District of \'!IY of Plllaburllh, 1149 Pa, 111l37,
296 A,2d at 750 (1972). "Mandatory Illllllrnlnlll)' Injuncllonahould only luue In exceptional
clrcumllallccllll1d where tile rlllhtl uf the partlel an: ~ clear." J<*an Aluminum
PmdUClJ V. Ml. CllI'lIIel Qbl., 256 l)a.Supcr. 353, _' 389 A,2d 1160, 1163 (1978)
(emphasll wldllA1) elI/IIIl, /lIIer alIa, MlcMullln v. WIJhlKellluth. et aI., 444 I'a, 563, 281
A.2d 836 (/971).
Simply put, PlalnUfrl burden IlIealJ1bllahlng Its entitiementlO the rcquelted relhlf II
llS cXlIaordlnary u thc relief Itself, and lilt> be m~surcd by cxactlng standards IlI1d not
rcadll Y aranted,
1. This CllSll is a commercial contmct dispute
Involvlna money damagel and consequently
Plaintiff hu a full, complete WId adequate remedy
at law,
Plaintiff concedel In hs Brief in Support of the Preliminary Injunction that,,, "thc
facia dllCulsed abovcmlght ordlnlll'lIy suggest that damages would be an appropriate remccly
...", Plaintiff thcn gocl on to r.numerate several factors which it believes make thll cue
somehow "cxtraordlnary.. However, Plalntlfrs allegations that DSlls "deeply III debt" and
that "a judgment against it would likely not be collectible" <W.), an: wocfully insufllclcnt 10
, Plalntlffl Brlcf In Support of Motion for Preliminary Injunction at 10.
.3-
Invoke 1111. Court's equllY jurhdlctlon, Indeed, It h.. been Ihe law In Pennsylvania for well
over a cenlury thai the mere prospIlCtllulla judament for money damales may ulllmalely
prove uncollectible will not suffice to Invoke the jurliidlctloll of a Court sllllna In equllY,
Thisltjal principle, that equity jurliidlctlon will notlle becllUi14 money damoaes may
ulllmalely be uncollectible, Is not merely IOme ICllal rollc from the ancient pllsH
Pennsylvania's appellate courts hove reaffirmed this prlnclllle In recent years II well, Thus,
In Ballc:y v. Gerard Bank, 334 Pa. Super. 563,483 A.2d 881 (1984), Ihe Court held &I
follows:
The law has long held Ihal potcnllalln50lvency, Inlhe ab$llnce of a conlractual
provision 10 Ihe conlrary, Isnol enJolnable. Thus, In Willlnll v. Mazzoconc:,
482 Pa. 377, 393 A.2d 1155 (1978), the Suprcme Court held:
In Pennsylvanlo, the Insolvency of 0 defendll/ll docs not create a
situation where Ihere Is no adequate remcdy at law. In deciding
whether a remedy Is odequale, It Is the remedy Ilself, and nolllS
possible IlICk of success lhal Is the determining fuctor. Benh v.
~ust. Trustee, 2491'a, 512, 95 A. 108 (1915), "The fact, if It
be 50, thatlhls remedy muy not be successful In reallzlnglhe
frullS of a recovery allow, on account of Ihe Insolvency of Ihe
defendants Is nOI of It$lllf [a) ground of equitable interference".
HeUman v. Union Coal Company, 37 Pa, 100, 104 (1860).
ld. at 383, 393 A,2d at 1158.
BaUu, IIIIlII at_, 483 A.2d al 883.
Asthe above llUthorlty conclusively demonstrates, Plalnllfr. Brgumentthatlt IIlcb an
adcqualC remedy at law Is entirely misguided, and in fact Is directly contrary to consistent
and unequivocal holdings of the Pennsylvania Supreme Court dallng bllCk over a century,
-4-
Thll c:uo II lIbout monlltary damll&lIl, AI tile Unlled Stalel Court of Appeall for tile
Third Circuit hll rapeallldly hllld, "[WIll haYII nllYllr upheld lllllnjuncllon whllra thll claimed
Injury conlUtulel . Illn of tllllney. a Iou capablll of recoupment hi a proper aollon .tlaw,"
J!CRI v. McCraw HI11. Inc., 809 P,2d 223. 226 (3d Clr. (987) ('/11"11 In n!1 Arthur
Tn!IlChm Franchl~ LIIlwolion, 689 F.2d 1137, 114' (3d Clr. 1982), In ECJU, 1lI.IIIJ, tlllI
Third Circuli declined to enter a preliminary InjuncUlln In a bUllnllSl dllpute oyer money
damqel, which claim (as here) al50 Included a requelt for Illl!A:lflc performonce, The
dlfflculty Ihatlhe Third CirculI found with Ihe requelt for bolh forms of relief was Ihat under
tile terms of tile parties' ~ ngreetllenl, Ihere Will no absolute rlghlto conllnue
performance by tile plaintiff. In Ihal c1rcumsllU1ce, unlike Ihe case at bar, Ihe Third Circuit
hid the bcneflt of a written agreemllnt. Here, Plalnllff concedes Ihal no wrinen qreemenl
eJtls..., or eyer eJtIIll:d, As a I'lllull, Ihe problem faced by Ihe Third CirculI In ECRl Is thaI
much mOn! compounded, given Ihe dlfflcully In proving deflnltlve terms which Is Inherent
where an oralqreementll claimed. A !onlorl, the Third Circuit's rationale refullng to
enter a preliminary Injunction In EC.IU Is Ihat much more forcefullhan In Ihe CIl5ll at bar,
Plalnllff makes only one altemallve argumllnt In 115 vain attemplto Invoke this
Court's eqully jurisdiction. (At the outset, It Is noteworthy that Plalnllff cites ab50lutely no
authority to bunrest Ihls altemollve conlenllon.) The contention is that Plaintiff ilRJf is in
flnanclal jeopardy as a result of 115 business dealings with OSI. Simply put, Plaintiff callnot
be heard to argue that lis dealings with OSI have not tumed out to Its advanta&e. Naturally,
had PlalnUff eJterclsed ordlnnry prudence, Its alleged agreement with OSI would be In
.,.
wrlllna and the terml thereof would be readily dcn\lmllrablu, IIUrlhermQ~1 PlalnUff CQUld
,Imply hive driven I bllller barllaln, such III requlrlnllhu pollina of Illlme form of bond by
DSI, perlOf\a1 auarantlel by 1>51 ofOcen or Ihll'llholdorl, or 1K1mC other ...urIlIlCO of
payment to 1IIIIInllf,.. Addltlonlllly, al will be llet forth In Ilrelller dewll belolY (III the I;OnleKI
of. disculllon of Plnlntlfrl unclcall hlll1ds) , Illalntlfrl current dl(Ocullles lire Ilntlrely of II,
own maklna.1
2, Plaintiff will be unable to demonstrate any
Irreparablc harm, InaNmuch liS there 15 no prellenl
thrClltlo DSI's continued performance of the
DLA Agreemenl.l
I Plllintlf( II faced with WI additional tiCemlngly Insurmountable hurdle In their requcst for
the entry of a preliminary Injunction. The I~ules of Civil Procedure, spedflcnlly 1'3I(b),
explicitly I;Ondltlonl the entry of a preliminary Injunction upon the ponlng of 'approprlat.c'
lleCurlty or bond. Plaintiff has alleged III the: Complalntlhe conlractatl5sue here has a flnt
year vaiuc 0" $8'0,000. 1115 further alleged that this contrnctmllY be renewed for up to 11I1
additional four years. The $850,000 flgure 15 Idenllfled In the contract 15 alleged to be only
a 'baselinc' estimate of the flrst year value butlhe conlmct's value could well exceed
$8'0,000 for the flrst year, or IIllY year Ihereafter, Thus, applying elemenlary mathematks,
this contract, as Plaintiff alleges, has II valu!! over ils IIf!! which could well eW'.ed
$4,250,000. Given Pllllntlrrs requested relicI', (that the ability 10 conthlU!! 10 perform this
contract be stripped from Defendant -- the party awarded the contract by Ihe Defense
Lolllstlcs Allency In Ihe flrstlnstance .. and that Defendanl be compelled 10 permit Plaintiff
to tendcr the performance pursunnllothls agreement), It Is clear lhat only (j very subllllJ1tlaJ
bond would MCAjualely protect Defendant's Inlerest against Ihe p<l5slblllty that an Injunction
had been Improvidently entered, Even a~sumlng arHIII'lIdo Ilmt the contracl had only a one
year IIfc span, there 15, at a minimum, $850,000 at slake to DSI. As a result, there 15 little
point in this Court's laking lesllmony, weighing evidence. Ilssesslllg credibility, WId
altempting to unravel the c1rcllmstllnccs of lhis dispute (pllrtlculllrly In an expedited fashion)
If Plaintiff Is unprepared to JlllSI " bond or othcr security of true slgnlflcwlce--assumlnll
(without conceding) that Plalnllff smnds ~ prospect of success,
4 For I;Onvenience, DSI will refer to Its own contract wllh the Defense LoSlsllcs Agency
(MDLA M) as the 'OLA Agrccm!!nt." just as Plaintiff has done.
.6-
upon DSI by ilia DLA AaI'CCmanll.o Pllllnllrr, 'Tha blhUaral naaollallon. conllllued to occur
between luna 28 and luly 9, 1996, Ultimately, Iho partial lereed In principle UPOII ..varal
mlterlall.erml, HQwever, Donald Hearn, actlna on buhalf Qf Conllal1ce Hl!IIm and 051,
IpeclficaJly advlllCd the Plalntlfrs reprelCnlAtlvel 1I1at no deal cuuld be conlld~red final until
It had been reduced 1.0 wrltlna and ApproVed by DSI'llegal counlCl, Christopher M, Cicconl,
Elqull1l of Eckert Seamans Cherln & Melloll, Mr, Hearn made It abundantly clear that It
wu crltlcal that thll aareement be tendered lO Mr, Clcconlno later than Prlday, July',
1996, Inumuch u Mr, Cicconl was laving 11111 country aOer that time, This condition
precedent wu never IIlltl_fied by ADS, and, In fact, Plaintiff never tendered IlIlY written
aareement for DSI', consideration at all, InslCBd, on the aOernoon of Tueiiday, July 9,
1996, Plalntlff tendered a Leller of In!entlO Mr. Hearn advising Mr, Ham for the fint tlme
that, from ita perspective, the deal was only feasible If Mr. Hearn would make a capilAl
contrlbutlon lO Plaintiff In the amount of 512',000. Nwllm to lillY, DSI perceived this
addltlonal provision WI a material alteration of the terms which the parties had herelOfore
been discussing. At that juncture, Mr. Ham concluded that It Will absurd for ADS lO
sunest that Plaintiff would buyout DSI with the Hearns' own money, and Mr. Hearn began
making alternative arrangemellls for the performance of the DtA Agreement. DSI also
sought counlCl willi respect to how to retrieve the computer hardware, scanning equipment,
and the like from Plaintiff at that time. Most significantly, while Plaintiff, Complaint
recitel that the partiel "reached IlIlreement" on June 28, 1996, Plaintiff delivered ita Letter of
-8-
hllelltlo Mr. Hearn on July 9, 1996, IIld Mr, Heanl "fuleQ 10 sian tho same. ba, Answer,
1 ", Ekhlblt · 0, ·
ASI relult, the only document which pel1llJns to Ihe nellollallons betwClln the parties
ellablllhel that no oral aareement wal ruched betwClln the parties on June 28, 1996 u
PlalnUff hu plod. ~,Complalnt' I~. To the contmry, Plaintiff conllnued to pelle new
IIld different OIaterlal terml over the weeks followlnll June 28, until OSI concluded 1I11l1 no
aan:cment would ever be reached. Nine day, after Plaintiff claims the "agreement" wu
reached, PlalnUff delivered the "Letter of Intent" which Mr. Hearn refused \0 ekecute, The
Letter of InlCllt openl with the following pamgmph:
The purpose of this document Is \0 prevcnt USI Recordl
Retention Corporation [sic] WId its ortlcers or agenls from
entering into W1Y negotiations regardlnllthe 5Ille of OSI BI1d wlY
of ill assets once this document 15 slined WId Clll!Cuted.
Sa:, OSI'I Answer with New Maller at Exhibit" B." Ills uncontested that the Letter of
InlCllt wu ~ executed. If, as Plaintiff misleadingly suggests, the parties had reached a
definiUve agreement on June 28, 1996. one wonders why Plaintiff was Interested, on July 9,
1996 In precluding OSI from entertaining other offers,
Moreover, the Letter of Intent added a new BI1d material term \0 the parties'
negoUaUons long after the alleged "agreement" wal formed. This material term wu the
requirement thllt Mr. Hearn adVBl1CC $125,000 \0 Plaintiff \0 be used by PlainUff for
opcraUna capital, Clearly, thll additional term II not only material but constituted a
.9.
COlInleroffer (10 lite elllenllhe "rller dlleulllonl could be chal1lClerl~ II crulln. 1/1 offer
lubJeal10 ICCCplAncc), Pennsylvania law Is abundantly Ch~Br thall
It. rcplylo III offer which IJurporls 10 accepl II, bUl chlnlles Ihe
c:ondltlons of Ihe offer, Is nolll/1 acceptance lJull~ a Coonter-
offer, havlnlllhe effect 0( lermlnalJnlllhc original offer. ~
WClIlher. Inc. v. .11J.w1l1ll Droadc8Jllnv Cu., 42~ Pa.sul)Cr. 335,
339, 62S A.2d 75,77 (1993); Hahnclllan Mcd. Cll~
v. Hubballl, 267 !'a.Sul)Cr, 0436, 044(), 0406 A.2d 1120, 1122
(1979); Restalcml:I1l.!S.cgmlllof CQll1nll:1J, 0 59 (1981),
Flrsl HOllie Sav. Dank. FSn v. l':lroiliJ:Ci, 436 Pa,~upcr. 377, _' 648 A.2d 9, IS (199<4),
1llilI:, den(~, 657 A,2d 491.
PlaJnUff conCl".des Ihal Ihe l~nll~ of Ihe alleged agreemcnt bCIW~ll P/ldnl"f and OSI
II'CInowhere n:/leclcd In wrhln8. A~ a n:sull, Jllafnlff( Is lef/lo Iry 10 convince lItll COUrI
lItalllle oral discussions (which /)SI Inslsls neVer wenl heyond prellminaryneIlOllaIJonS),
resulled In 11/1 enforceable agreemenl. Thcre arelwo slar/ng dlft1cullles wllh Ihls Brllumen'.,
however. Flrsl, Mr. Hearn, on behalf of OSI Relenllon Corporallon, spccl/lcallylndlcalcd
lItalllte aarc:emenl could nol be deemed /lnal unless and un III il /1I\d been reduced 10 wrillnll
by Plalnllff II/1d had been revieWed and approved by OSl's legal counsel. Mr. Hearn further
Informed PlaJntifrs n:presenlllllves, lhal, given counsel's Imminenl plans 10 leave lite
country, It Wll5 Imperallve Ihal such a documenl he provided 10 OSI on or befon: Friday,
luly S, 1996. !'Ialnllff never compiled wllh Ihis condlllon, Addhlonally, as rcelled above,
on Tuesday, luly 9, 1996, afrer falflnlllo meellhe dudllne for producing a dran aareemenl
ret1ecUnllllte parlles' negoliallons, Plainliff presenled OSI wllh a leller of lnrenllnformlnll
Mr. Hearn for lite Ilrslllme Ihal Plalnllff would require Hearn 10 /lnance ADS' operallons 10
-10-
1M tun. of $12~,OOO, In IIlCnce, then, Plaintiff mad. addllJonal d.mand. which
fundamenlally altered the neaolllllon. by Inllltina thll Hearn nnanee Plalnllff'. pun:haae of
DSI with hi. Ilwn money, for IUsonl which may be ohvlou., Hearn concluded tilll the deal
wu nol, and would nOI, become a viable one, Given Plahlllfrl failure III timely reduce Ihe
terml of III offer III wrltlna for DSI and lis coun5CI'1 revlrlw, and alven II. hulslence on
continulna III propound addltlonallllal.erlallerms, Plaintiff cannOI 5Crlously maintain that till'
putle. rw:hcd an enforceable agl'CCmenl on June 28, 1996.
4, PIBlntlrrs ~uesl for equllllble relief In the nature
of II preliminary Injunction 15 entirely precluded
by Plalllllfrs unclean hands.
Pennsylvania law is clear IhAI:
One who seeks r.qullable relief must appcnr before lhe Courl
with clean hands. Mazer v. Saralnt Electric Co., 407 Pa. 169,
173, 180 A.2d 63,65 (1962), Gne gullly of wrongdoing shoull!
be denied access 10 Ihe Court. In re: Eslllle of Pedrick, 505 Pa,
530,543,482 A.2d 215, 222 (1984), The doctrine 15 applicable
when the wrongdoing dlreclly relales to Ihe matler In
conlroveny and affects Ihe relal.ionshlp bel ween Ihe parties.
Iacloon v. Paelun, 379 Pa. Super. 361, 371, 550 A.2d 199,
204 (1988).
In re! Prances Edward McGllllck Found., 406 Pa. Super. 249, _' 594 A.2d 322, 329
(1991).
A' pled In OSI's Answer wllh New Maller to Plalntlfrs Complaint, Plaintiff's
rel.tion.hlp wllh OSI WIlS merely Ihal of a subconlractor engaged to assist In scannlna and
Indexing documenls pursuant to the contract between OLA and OSI Relentlon Corporation,
Bealnnlna at the end of June, 1996 and conllnulna until July 12, 1996, Plaintiff ADS
-II-
commonced 1 paltern of conducl deslaned 10 (al fir.,) "lwl.l" Ihc OL^ AarecmenllwlY from
081, IIId, falllna In thai obJectlvc, dellaned 10 (ulllmately) preclude 081'1 pcrformlllCll
under the OLA Aarecmenl,
On June 28, 1991\, the Presldenl of OSI Retentlon Corporation, one Petor ClllflllO,
abruptly rellaned hll polltlon, Prior 1.0 dolna flO, however, Mr. Califano, on behalf of 081,
retained Plaintiff 10 IIllst OSlin the 5Cannlna and Indexing functions required under the
OLA Allreelllent. Mr, Califano, who Is II 2H' sharehoh!er In OSI, was also party 10 a
C'.ovenant not 10 COlllpeto wllh OSI. AIlhnullh Califano had Indicated 10 DSl,s principals thai
he Intonded 10 move 1.0 New Jersey to take a corporate opportunity wlUI the MB.2da
oraanlzatlon, It soon became apparent that Mr. Califano WI\., assisting Plaintiff In lis own
pursull of the OLA contract. As Plaintiff's own Complaint concedes, Plaintiff and OSIarc
competitors In the buslneu of computer scannlnB and Imaging. Stt Complaint 1~. As a
consequencc, Plaintiff'. utilization of Mr, Califano'. knowledge, skill. and bacqround
regarding the OLA Agreement was In dlrecl vlolatloll of Mr. CallfWlo's covenant not 10
competo. At our about the 5lIme time, Plaintiff also hired away another key OSI employee,
one 10hn Bivens. Shortly thereafter, on the morning of July 12, 1996, Mr, Hearn appeared
at PlalnUff's Lancaster offices, and tendered wrlllen notice of DSI's termination of Plaintiff's
dala entry serviccs. This notice, which Is attached 10 PSI's Answer II Exhibit "C," a11lO
noUlled Plaintiff thai PSI WII nol interested in pursuing further the negoliatlons concerning
-12-
equitable flllef whatlOOver. In .lmplOlt tornll, Plallltlff Inltlully IIlIempted to "twl.t" the
DLA contract Iway from DSI, and, falUna thlt, .PPlU'Cntly nllwlla splteM delermlnatlon
thlt, If ADS could not hive the contract, then ADS wlluld rendcr DSI'. continued
per(ormancc under the contract Imponlble, Undllr thcIII clrcullUlance:I, It II rudlly Ilpparent
that ADS II e:stop~ (rom requcstllltlllSllslWICC (rom Ihc Cllll/lcellor Ilttlna In equity,
5. l'lalnll(f II<<ks 10 nutlclllly aller thc stlllus quo
Ulroullh Ihe clltry of a prellm'nlll'Y Injuncllon.
ralher Ihan 101ll1llnlllln Ihe till me.
Naturally, onc holly conlesled Inue Illhe hearlnllln Ihls malter will be prcchlely
what the "ItatUI quo" belween Ihe purtlel was prior tolhe alleged breach of Ihe a1leaed
..reament, DSI malnll1lnl Ihal, 10 Ihe cKlcntlhe Court were Inclined to prellCl'Ve the ltatUI
quo, luch prelllrvallon would nl!Cmurlly enlnlla ~ of Ihe: requelted prellmlnlll')'
Injunction because the "SlntUI quo" Wll5 thallhe pardel were /lcIlOllallnll. These ne,otlatlonl
had failed 10 produce definhlve terllls, a slllned wrllten agreemenl, or any other enforceable
aareament, What Plaintiff seeks II not for Ihe Court tomalnlllln Ihll sllltus quo, but rather
Plaintiff seeks 10 have Ihls Court radically al1u the slalus quo by declarln, that the earlier
negotlatlonl IlOmehow amounted 10 an enforceable aglUment.
6, Oreater Injury will result from the granting of a
prellmlnlU'Y Injunction Ihan from hs denial.
AI a result of ADS' wrongful conduct, Dt.A questioned DSI'I ability to luccessfully
perform thllll&reement III of July 14, 1996, Throu,h hs diligent efforts, and those of Ita
new subcontractor, CDMS, DSI has been successful In demonstrating to DLA that the
.14.
:'
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I IN TilE COURT OF COMMON PLEAS OF
I cUMlmRI.AND COUNTY,I'ENNSYLVANIA
: y(. , 1,I1/.),f t~I~'t.. ~"l1.
I No, CIV(t 19~
I
ADS, ADVANCED PATA
SOLUTIONS, INC,
PIDlntlff,
OSI RETENTION CORPORATION
OOfcllldlllll,
,
.
I CIVIL ACTION. EQUITY
DllIEF OF IILAIN1'IFF IN SU111101n'
pJl' MpTION FOIt 1'ltf,UMINAIt\' INJUNC1'ION
I. /ll'ATE~":NT 01<' FACTS
PIDlntllT ADS, Advllnced Doto SolutlonH, Inc. ("ADS"), Is 0 l'ennsylvlII1la corporation
hllvlna Its principal plllce of business ot 1887 L1tllz l'lke, LBI1coster, LlII1coster Count)',
PCI1I18)'lvonlo. PlalntllT Is the successor In IlIterestlll1d Ilsslglll:e of ADS, Advlll1ced Data
Systems, a portnershlp fomled under Ilellnsylvonlo low. IllalntllT wWllncorporoted on July 2S,
1996. For the purposes of this document. both Plolnlln' ond lis predecessor will be referred to
jointly WI "ADS" or "PlolntllT." PlolntllT Is enlloged In the business of, IlIter olio, systems
dcveloplllentlll1d network Intellrotlon.
Defendlll1t PSI Retention Corporotlon ("OSI") Is IlI)ennsylvBl1lo corporotlon, hovlnlllts
prlnclplIl place of business lit 9 Brenllemon Circle, Mechlll1lcsburg, Cumbcrllll1d Count)',
PennsylvOlllo. Defcndlll1t Is engllged In the business, IlIter alia, of computer SC:lII1nll'lg and
Imllging OIld is a competitor of Plolntlff.
Oeftllrlalll 0111,011 May 13, 1996, Illltllrllrl IlIlu II wrllllllllll&rllullllllII wllh Ihe DefulIsCl
L.oKlstlcs AKcnuy ("I)LA") 10 ~uJlJlly CIIIIlJlutllr sClInnlul! IIml hnlll!lnl! scr\llccs 'llr Ihc Dclimsu
OlstrlbullulI nCl&lon ElIst ("ULA AHrcelllcnt"), Undcr thc Icrllls ufthc I>LA Al!r~'clllcnt, DBI
Is rcquh'lld 1'1 llmcly sCllnlll1d 1IIlIIl!C docul11cnls IlJr thc IlI,A, Under thc IlI.A Al!rcCmCIII, II
was esthlloted thul I>SI WI'Ut.J KClln IIJlpr1lxlllllllcly 3,OOO,()OO pllgcK pCI' YCllr, III U rlltc uf 23
cenls pilI' JlIII&'I, Thc Agreclllcnt further pl'll\lldcd lhlll IlSI would Indcx IIJlJlroxllllutcly
2,000,000 docul11cnts pCI' YCllr al rlltc III' 8 ccnls pCI' IInc, Thc Agrcclllcnl was fur line ycur,
wllh IIn opllon fur up Iu ti.JUI' IIddllionlll YCllr~,
DSI luckcd Ihc Icchnlclll cOlllpctcncc IInd dcplh to cffcctl\lllly Illccllts conlructuul
oblll!lIllonK 10 IlLA. On or IIbUUl Junc 28, 19'16, I)SI WIIS In jcupardy of defoulllnl! olllhe
DLA Al!rCCI11Cnlol1d WIIS furthcr In scrlous Ilnllndul dlmcullY.
Plolnlll1' and DSI wcrc acquulnlcd thnJ\ll!h JllulnllfCs pro\llslon of limited ser\lices 10
OSlin 1996. As of Junc 28,1996, DSlowcd Pllllnllff $15,000 for scr\llces rendered by
PlolntUr tu DSL Suld alllounl hus nOI bccn pllld by DSI.
In Junc 1996, DSI, through DOllllld IlCIII'll, the husbllnd of Conslancc I-Ieam, DSI's
presldcnlond solc sharcholdcr, sugl!,csted thaI Plulntifr purchllsc Ihc DLA Agrcement.
PlolnlUr elltercd Inlo ncgotlotions for Pllllntirr to purchllsc IInd IISSUIllC rcsponslbilily for
performancc of the DI.A Agreclllcnt. On ur IIbOUl Junc 28, 1996. DSI and Pllllntlff cntcred
Inlo an oral al&recmcnl for Jllulnllff 10 purchllsc IIl1d USSUIllC responsiblllly of pc rioI'm once of
the DLA Agreemcnl, liS wcll liS 10 ussume $158,862.04 In DSI debl, Plulnllff ulso agreed to
2
.I, '
I
,.I
1:\
pay DSI forty por cOllI (40%) of 11I0 11111 prol1l ionoralod by Iho DI..A ^aroomolll. Conllllllco
Hellnt Wlls kOl'llIpprhwd of Iho nOllollllll01l8 llnd 11I01 wllh PllllnlllT whon tho Iorlll8 wore
IlIlI'Ccd 10 by tho plll1les, Sho conllralulllwd PllllnlllT 011 tho allrealllent Bnd wished PhllnlllT
luck In porforllllUlce of the PI-A Allreemenl.
Consl8lent with the terllla of the allreenu:nt between PSI IInd Plalnllff, PllllntllT
promptly took ponesslollof PSI'a sculIlItng und hlllllllng equipment, belllUl to dlreclly
Bupervlse OSI employella, und belllUlto perfonll Ihe oblllllltlllns under the OLA AQI'Culllenl,
OSI belllUlto refer ullinqulrles concernlnll perlornllUlce under the OLA Agreemelll to
PlulntllT IUld belllUl relilrrhlll creditors 10 1)lallltIlT. OSI ahiO bCQun forwardlllll doculllenll and
Information to PlalntllT so that PlalntlO' could mcetlhc OLA contractual obllllatlons.
In July, 1996, PlalntllT invested over 5130,000 hltimc and purchallC of equlplllcntlUld
supplies to meet ilS obllllatlons under the terms of the agreemcnt betwccnthe parties. In ilia
course of Its IIBBumptlon of work pursuWlttotha OLA Agreement, PllllntilT Illllrlled thllt
~ I '
Defendant hod been usinS Illegal slll\wore IUld I.hllt It had (.1lgalled in improper WId Illegal
conduct. In the courllC of Its assumption of work pursulUltto the OLA Agreement, PlallllllT
also ICllrlled that DcfendWlt OSI had major compllllncc problems with the OLA Allreement.
However, PlalntllT proceeded 1.0 ensure complllUlce wllh the tenns of the OLA Agreement.
On July 12, 1996, Defendant OSI orally IUld unilaterally tenninated the aQreement
~.... _.'U. ..... '"
....-. ...--."
-
..- ~'--'
between the plU'tles ond directed PlalntllT to return all equipment I1lld supplies previously sent
to PlalntllT to Defendant. OSI IIlso ordered Its employees to return to work for OSI, PlalntllT
3
IImely returned plioI' nSI's equlplIlllnl hlDSI pnd oOi:red III aSRlsIDSI hI rcsltlrhlll Ita
operations. DBI did nol rClluesl such IIsilitunce,
1'IIIInlll1' hils HllIlf IlIvolcci II) J>Slf,)r NCrvlccs rcndercd lilr the bcnenl ol'DSI. ^ lrue
and COllccl cupy of thcMe InvolccR ure 1I\111chcd to Ihe l'Ol11pllllnllls E~hlhh "A." ThlllOlal
1I1l10Unl due IInd owln~ 1'111111111'1' pUrMJlInllO IhcMc InvulccH IR $14H,502,50,
DSI'R unlluh.!rullcrmlllullonof thc lI~rCCI11CIII bClwccnlhc pllrtlcR hus clluscd I'lplnllll'
subslunlllllll10nclllry und Il'rcpurnhle hllrl11 IlIcludln~. hm lIolllm\lcd 10 IOMi of 1llllldplllCd
prollls und IOiS of huslllCiR opporlulllty, Of murc IIIIIllCdllllC IIl1d preMMIII!! conccrn, 1'llIlntll1'
hlllllenrncd thul DSI contlnucR to he unllhlc 10 I11cr:1 \Is ohllgllllonR undcl' thc DLA A!!rccmcnl.
DLA hus glvcn DSI until AuguRt 15 to ucmlmMlrnlc Ihlll \I CIIII mcct \1M conlrnclulIl
obllgullons. Slncc July 12, DSI hilS rCllllncd III ICIISI IWo ncw MCl'vlccM III 1I111111clllpt 10 l11ecl
lis conll'llClllul obli~lIll<lI1i, Therc rCl!llllns morc Ihllll II suhilllnlllll likelihood lllUl DSI will be
unuble 10 sutlsfy DLA by thc AU~UMl 15 dClldllnc, AI Much Ilmc, DLA will ordcr thc conlracl
forfeited.
II' Ihe DLA contracl Is lorlcltcd, DSI will huvc virtually no assets und a subslanllul
amounl of debt. II will be Impossible for DSlto mccl uny Judgmenl for damagcs enlered inlo
DIlDlnsllt In lhls Il1Dlter, Thus, forfeiture of the DLA contract will also guarpntee lhe Inability
of Pll1inllff 10 oblaln Ull adequule legul rel11edy.
I
4
I'!
0,
1'lolnlllT OllenS Ihollls rlHhllo rllllllf IN elllor ond Iholll hos u .ub'llUltlolllkollholld of
.uelle.. on Iha morlta. AN will be dotulh:d helow, Ihllre Is umplo evidence to suppIlrllllLCh of
PlnlnllfT'. olahll" JIlore elood)' eSlobllshlnlll'lnlnllll'llIkellhoOlJ of suellC6s on Iho morlls.
I, Urmb IIr ConlrwJ.Wm,
There I. 0 subsll1nllolllkellhood of success on Ihll merlls of Plolnlllr. breoch of
1l0nlrILCI clollll, Where 0 port)' ollegos breoch of nn oroleonlrncl, l'enns)'lvnnlo low require.
IImI pm)' to eSlnbllsh JIlonlfesled Inlelltof both pnrlles \0 be: bound, mUluoleonsldernlloll, Illld
.umelonll)' deOnlle lenlls, Oorwllrll v. AEL Industries. Inc., 784 F.Supp. 239 (E,D.l'n. 1992)
~ Chllnnol Horne Conlen. Dlv. of Groce Reloll COI:P, v. GrossmRn, 795 F.2d 291,298.99
(3d elr. 1986)), Pllllnllff submits tholthetCBllmon)' will show Ihlll (I) Ihl! pmlcs negolloted
an Ilgreemenl under which I'lolnllff WllS 10 be lIsslgned lhe DLA Agreelllenllo 5CBlI Wld IlIIlIge
doeulllonta for Ihe DLA, to lIssume Wld forlllve specified debl of DefendWll, IllId 10 pllY
DefendWlt n pereenll1ge of the proOls of the DLA conlruello Deli:ndnnt; (2) Ploinliff begllll \0
perfonn under the usslgned eonlrnel, ussullled WId forguve DefendWlt's debl, Wlsullled allier
responsibilities of Defendnnt, WId Invesled over S 120,000 In IllIIe Wld purehll5C of equipmenl,
(3) DefendlUlt lemporarlly refrulned from performing under lhe DLA conlrnct, Instend
forwllJ'ding documents IllId infonnnllon 10 J'lnlnliff; Wld (4) DefendWlt wrongfull)' tennlllllted
the Ilgreemenl belween Ihe portles Wld denlllllded relurn of nil supplies Wld equipment lIOnt to
Plninllff pursuWlt to the Agreemenl between them.
6
The term. rellched by Ihll purtle, ore cleor ond precise, The IIllrecmcnl " Illlpportcd by
conslderlltlon IIlld CIIIl bc cnforccd by Ihl, Courl. Flnully, Defendolll brellched Ihllllllreclllcnl
IInd Ihlll brcllch eunolld will CllUle 11111'11\ 10 I'lull1l\l1'.
2. QwInlJU1LMmlIt clMhn,
There I, 0 .ub.lollllulllkellhuud of .uccc., ulllhe Illerlt. of I'lulnl\l1', quonlulll meruit
clohn. ~ !{e[ch v. VC~CX, IIlC" 51 F,SupP, '1'1 (E,I),I'II. 1942)(11 c\uh1\ for dUlllulle, olllhe
quulllulllll1erult busls II depelldelll upun Ihe eSlllbll.hmelltuf ullorlll COlltrucl which WUI
brenched or UpOIl pruof lbul pluilllllr hus n:ndered .ervlccs lu defelldunt), At bellrlllll on
1)llIlllllO's Molloll for Prellmlllllry IIlJuncliull, 1'111111111'1' will pre.ent lilclS whlcb will eSlJlbll,h
Ihlll (I) u vulld ornl contrnct exlsled between Plnllllllr ulld tJefendllnl; (2) Plnlllt\ll' performed
services 011 bchulf of DefcndlllllUI cunlemplulcd ulld rC'lulred by Ihc cUlllruet betweelllhe
purtles; (3) Dcfelldunt WUI bellelllled by PluinlHr. perlill'l1\ullce undcr Ihe nllrccmellt; IInd (4)
Derelldunt hilI Ilot compell.lllcd Plulntlfr lilr Ihe hellellls It received frull! Pllllnlll1',
performance.
Defendant has henellllcd from Plulntlll's perlill'lnllnce undcr the ugrcement between
them. I'lulntlll', however, hus not becn compensuted lilr Ihe benefit conferred upon alld
50llcited by Defendant. Therefore, Pllllntlff Is entllled to relief under Ihis count,
J. fnllllissorv EI!!lDIW..s1Jllm,
There I, a sub5tantlalllkellhood thllt Plaintiff will succeed on Ihe merits of its
proml5sol'}' e510ppel clnlm, At hellrlng on I'lalntll1', Motion for Prellmlnl1l'Y Injuncllon,
7
,
"
"
"'.
1'lIl1nllO' will pre""1 rlUlla which wlllesl.bUsh IhDI (I) ODrelldanllllhmllollllll~ AIldlor
IIOlllhlUIIII~ IllISrepresllllled UII IlIlCllllo Clllor 11110 1I1lrCClnCIII wllh I'IDIIIIII1'1 (2) Ocrclldllnl
kllcw Iholl'lollllll1' would ohollll!: lIa pllslllolllll rcllulloc UpcllllhcIIllrccll1cnlIll' Ihc pDrtlcsl (3)
1'1111111111' ohnllllod lis IllISllhlll III I'IlllllnOIl UpOlllhll IIllr~elllllnll (4) 1111I11I11Il'aul1crcd pc:ounllllY
und Irreplllllblll hllrll1 III D rcsullllflls rcllllncll upolllhc IIllrCCIl1Clllllllld (5) 1'1111111111' WDll
jusllflcd III rel~hlll UpOIl Ihe ullrccmenl.
Thclcllhllony will olellrl~ show Ihlll [)erendllnl promised 10 IIssllln Ihc UtA
Allrecmcllllo 1'11I11I11tT. Wllllmes from OLA IInd creditors will cOllllrm IhDI DSI repl'clIClllcd
10 oil conocmed Ibllll'IIIIIIIII1' Wlllllllklnll over Ihe AllreemclIl. 1IIIIInlll1' jusllllnbly l'lllled 011
Ihla promlsc to lis delrlmenl, 1'I0lnllIT hili IlIvesllld ovcr $140,000 In Ihls projecl and Is rom
Ihe auhSllll1t101 IIkcllhood Ihlll DefendlUll will be ullulllolO IIIccl OilY judllll1elll due to Ita
InDbillty 10 pc:rfomllhe DLA AllrCCll1enl. 1'101111111' Is clllllled 10 speclflc pel'formonce oflhDI
which Wl18 promised by DSI. This Courl should cnfllrcclhc proll1lllll mode by DerClldnnt ond
Cltop Derclldnnt's denlol of Ihe oasllllllllelll of Ihe DLA Alll'eelllenllo I'lolntill'.
of. ~pllcl"c Perrorlnlncc Cllllll,
There II 0 subSlnnllolllkehhllod Ihot Plnllltll1' will succeed 011 Ihe merits of 1\8 specific
pcrfomlAllce clolm. A plolnlllT seeklna speclnc pcrformoncc 15 required 10 prellCnt
"Indubllllble proor' of Ihe existence of 0 conlrect olld Ihe Inodequocy of Icanl remedies to
correct the brenc:h ofthot conlrocl. ~ Kurlnnd y. Slolker. 516 Po. 587 (\987). At henrlnll
on Plolntlrrs Mollon for I'relhnlnnry Injuncllon. PllIlnlllT will prescnt fnels which will
8
..
This IIcllon concerns II conlrncl en teNd hllo bUlween Pufendunl und the Palensc
LOlllstlcs Altcney. Thlllllllreemelll (Ihe "1l1.A Allreemelll") required Ilelimdllnl 10 pllrlorm
cal1uln document HCllnnlnllllnd hnlllllnll Hcrvlce~ Illr thc IlLA III the llefim5c 1l15trlbutlon
RClllllJl EIIHI (formcrly known 115 Ihc New Cumberlllud Army Ilepol). By June of 11)1)6, It
beclIl\1e IIppllrcnt thllt Ileli:ndllllt IlIckedlhc cxperll~c or depth to perform It5 oblllllltlons undcr
the tcrm5 of the IlLA Allreel11ellt. I>cli:llllllllt COlllllcled 1'111111111'1'10 pl'llvlde IIHHIHtunec, Ihen
Inqulrcd UM III whclhcr I'lullltlff wuuld hc willing 10 purchuHc Ihc clllilruct 1'1'0111 Dcfclldullt,
Allcr nellolllltl'lIIH, thc purtleH lI~re,:d III lcnm, Thlllllgrecmelll hUH 1l0W heen brellehed by
Defimdulll, which, upon Infon11ulloll IIlld hellef, hUH clltcredlllto II HubcontruclllIllllrrunllemenl
with II third purty to pl'Llvldc the Hcrvlcc~ required to meet the oblll!lIllollH of Ihc ULA
Agreemcllt.
While Ihe filel~ dlHcu5Hc'!lIbove might ordlnllrlly HuggcHlthut dUI\1UlleH would be UII
upproprlute remedy for Dcfendllllt' 5 mlscollduct ulld brcllch, sevcrullldditlolllll fuclol'6 dispel
Ihallnlllallmprcssloll, UpOIl Illfi>n11l1lloll ulld bcllcf, Dcli:lldlllllls deeply III debl. Liens exist
on mosl of lis UHHetH, A jlJdgmelltugulllHIIt would IIkcly lIot be collecluble, Moreover,
Defendllllt'H prlllclpllluHHel, the I>I.A Agreemellt, IH III Immlllellt Jeopurdy of belngtermlnullld
by the DtA for fullure to perform, Defi:lldunl hUH been Informcd Ihul Defelldunt hus unlll
Augusl IS 10 cure defects In performunce und meel IIH contructuul obllgutlolls, If Ihe defeclH
lire not cured by DefendUIIl, the DtA Allreel\1ent will be lermlnuled ulld Defnndlll\l will be
10
101\ willi no ~IlKnl:tJlblo II.IMlIlIIld IUbllllllllDI dobl, Ilhdnllll' wllllllon bo 101\ willI no roall.lIe
remedy on Ita claim. uIlDlnlll>ulimdolll.
1'lnllllll1' 1111.I reviewed Iho l>LA Allreemelll Dnd n!ulonDbly bellove. Ihal Pelimdl1nl,
I1l1d 1\11 lubcontrl1Clor, luck Ihe rqlourcel, compelence ond cDpoblllty to meetlhelr oblllll1llonl
under the OLA Allrl!emenl, Defoult on the Allrecmentll Inevlloble ond Imminent, Unlell
1'lolntll1'\s tendered the performonce of the DtA Allroenllmt, III IIkollhood of ony remedy
belllll oVl1lloble to It will evoporole wllhln Ihe ne>!1 severol weeks.
Flnolly, Defendlllll's conduct hos ploced I'lolnlll1' Inl1nllllclol Jeopordy, Plolnllff, whlln
technlcolly hlllhly competent ond mOllvoted, Is nolo lurlle corporotlon. It Invesled 0
slllnlOclllltlllllount of III resources In Ileorlnll up for perfonllonce of lhe L1LA Allreement,
Thotlnvestment, ond prelil!ntlol., of $140,000 plom Plolntlff In I1nwlclal jeopardy. In the
I1bsence of equitable relief, access to a lellol remedy from Defendant Is crlllcal to I'hllntlffs
buslnm. Should Oefendwll dcfoult al e>!pcclerJ onthc OLA Allreement, Plolntlffs remedy
will olso dlsoppcor ond 1'lolnlll1' wllllhcn foce posslblc ruin. To Plolnllff, the slllkes of
Oefendllllt'l obillly to perfonlllhe OLA Allreement ore crlllcol. Since the evidence will Ihow
thot OSI wUlllkely lIot be oble to perform the ollreement, Plolntlff lubmlta thotlrreplll'l1ble
hlll'lll II Imminent and subSllII1lll11.
II
D. Gr..l.r InJul')' Wlllltllllll Frllll\ 1)'111,1 or IlIlllllellv. R.II.' Th'lI
Grlnl or .nJllncllYI ltallcr.
Oreuter l"'ur)' would clcorl)' rcnull frulll dcnlnluflhc rcquun\l:d Injunullva rallafthulI
froll\ Ilrlllltlnll h. An dlJll:usncd ObllW, Plllhlllll' will nulli:r nubnlollllol nlld Irrupnrubln IlImnlf
Wl Injunction Is nollsnued.
DefendaJlt will not be od\IUrncly alli:clcd b)' Innuollcc of 011 Injuncllon nlllce Plulnllll'
willmeelthe obllgollolls of Pcli:ndonl undcr Ihe lCllllH of lhc UL.A Agrcclllcllt. Undcr the
terms entered Into belween lhc purtlcs, Duli:lldllllt will furlhcr receive 40% of the nel pronln
from performuncc of the m.A Allrcclllcnt, Thus, Ucli:nr.lallt hilS mlnhllol, If 11I1)' rink, in
issuWlce of the rcquented Injunction,
E. Prellmlnllry InJunctl~e Iteller Is Needed 'I'll I'merva The Stalul
OUII I'andlllll A l)ec.lJ1nn.JbLTh. Merlls,
It 15 true Ihol 111 geneml the ubjeeluf 0 prellmlllory Injunction Is to
molnlllin Ihlngs us Ihey ure until the rlghls of Ihe Ilortles con be considered lllld
detennlned anel' u full heurlnll. bUI It is now wcll settled thut uttlllles It Is
necessary to /IIuke evcn u prellmlnory Injunctlonmulldolory.
rennsv1vanla P.U,C, v. I sroel , 356 1'11.400.407.52 A.2d 317, 321 (1947),
Here, Plolntiff seeks 10 preserve tbe slot us quo Wi It existed prior to adopllon of the
Improper tenninotlon of lhe ogreement by DSI. Altholtlme, Pluilltlff wos performing under
the tenns of the DLA Agreement alld wus meeUng the obllgotlons of Ihat Agreement.
Defendant WWi referring creditors to l'lalntiff Wld WIlB permitting Plaintiff the use of
Defendant's employees. PlointifT :leeks restoralion of this arrangement.
12
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ECKERT SEAMANS CH1!lUN .. MELL01T
,.0, lOX WI
~P4 11101
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ADS. ADVANCED DATA
SOLUTIONS, INO"
PI.lnllff
IN THl! COUR1' 01' COMMON PLEAS
01' CUMIll!RLAND COUN'rY,
PP..NNSYI.VANIA
No. 96.447K l!'jully Term Civil 1996
v,
DSI RETENTION CORPORATION,
Defendlll1t
CIVIL ACTION
DEFENDAN'l'.S VER/FlE!) RES/'ONSE '1'0
PLAINTIFF'S MOTION FOR 1'ltEI.IMINAlt'V INJUNCTION
AND NOW COMES Defendant, OSI Retenllon Corporation, ("OSI") by IUld throuah
Ita counsel, Eckert SCllmW1S Cherln & Melloll, and makes the followlna response to
Plalntlfrl Mollon for Preliminary InJuncllon, staling In sUPI)Ort thereof II follow II
I. The avermenls of , I require no response. By way of further answer, Is
admitted, upon Informallon and belief, IIlat Plalntlfrs Complalnt was med on Au&ust 7.
1996. Ills further admitted that a true and correct copy of the Complalntls alll1ched to
Plalnllfrs Motion for Preliminary InJuncllon. Any hnpllcallon thatlll1Y avermenlJ contained
In the Complalnlll/'C accurate Is expressly denied, To the contrary, OS/lncorporates the
responsive Ivermnets set forth In the IICCOmpanylna Answer with New Matter and
Counterclaim.
2. Denied as stated, Plalnllfrs Complaint Is a legal document which speaks for
Itself, and Plalnllfrs attempts to characterize the content thereof are expressly denied. Ills
further denied that Defendant has wrongfully failed to p:rfonn any II&recmenl between the
pu11cI, or hu pravllIIled Plaintiff from performance of any aarcemenl pIlrchued by It
between Deflllldant and the Defense Loallllca Aaency ("OLA"), To the conlrary, Defendant
Ipeclf1ca1ly denlel that any leaally enforceable aareemenl WBl ever ll!IChed between Plaintiff
and 051.
3. Denied, The averments of , 3 conllllulll naked leaal conclusions raqulrlna no
reapot1slve pleadlna. By way of further answer, II set forth .bove, no such "ll&rcemlllll"
betwccn the parties exists. 111e remaining averments of , 3, relatlnlllO damages which will
allelledly flow to Plaintiff, are denied 115 conclusions of law requlrlna no response, By way
of further answer, any Implication that Plaintiff Is entitled lO Injunctive relief, lOgether with
any Implication that Plaintiff will suffer any form of harm (much less Irreparable harm) are
speclf1ca1ly denied, To the contrary, Oefendantlncorporates its responsive avermenla lO , 2
above.
4. 1'he averments of , 4 constitute legal conclusions requiring no responsive
pleadlnll, By way of further answer, It Is speclf1ca1ly denied that Plaintiff has no adequate
remedyatltlw. To the contrary, any reading of Plaintiffs Complaint leads to the conclusion
that this Is an ol'dlnary business dispute which may be remedied by damages, IIsumina
arBlUndo that Plaintiff is able to establish (i) the existence of any agreement, (Ii) any breach
thereof; or (m) any liability or damages f1owlnlllO Plaintiff from 051 at all,
.2.
,
..
..
hnd lleelluJlluNd, IhuNby dUKt,.llylllllllllY VII I 1111 which ilK KurvlcuK mlllht hllVl! hlld III OSlur
OLi\,
I,l, Ol!llletlll~ MIlIcd. SlIch IIcgullllllulI~ WCn: rm'lhc 11III\:hIlKC l\lld ~1I111 ul'lIl1thll
Muck ur OSI HClcmlulI C'llIvul1IllulI, I1Ilhcr Ihllll rur Ihc fllll\:hll~C IIl1d ~lIlc ur \)SI'~ 1I~~cl~,
MidI II~ thc DJ..A AgreclllClI1. By WilY ,jf flll1her 1I11~wcr, ~lIldllcg'lIll1llulI~ wcre IIU\lU,.
n'1ll1l1Cd, 110 CllfUI1:Cllhlc Muck fllll\:hllsc IIgl1.'CIIICllI WIIS c\lcr 1\'lIched hCIWCClIlhu pllrtlllK,
IInd Pllllllllff'llhcrwlSll fllllcdlu slIllsfy cUlldltluns fll\'CcdCIlIlU Ihc funllllllunuf IIn
cnfon:cllhlc II!!I\'Clllcnt hy, 11If"I' 111111, 1'11111111101' relilslng hi pllldll.:C II dcflllltl\ll\ wrlttCIl
IIgI'CClllcnl liS I\"jllh\'d hy DSI.
MUI'l!'jvcr, I'IlIhllllT cumlllllcd IU dClllllnd IIddltlunlll clll1ccssluns, IId\lllllCll nllW
propo~III~, IInd 1I11Clllfll IU hnpmc IIddlllunllllCl1nS 1111111 DSI cUlldlldetlthlltnu \lllIblc
1I1lI'CClllcnt hClwcenlhc p1l111c~ wOllld c\lcr hc sll1Ick, By WilY uf CXlllllfllc, c1CVCII dllYs IIllcr
Plrlimlf,. c1l1hn~ Ihc plll1lc~ r\'lIchcd IIl1ul1llllgl'.'CIIICIII. 1'IIIII1I1IT tcndcr\'d II cUlllllcr-offcr III
thc 1'01'111 01'11 "Lcllcr ofllllcnl" 10 DSI, pl\lposlllg 1111I1 DUllllclInI, (Ihc hllshllnd of OSI'~
Pn:~ldclltllnd solc sllllrelloldcr C'lII\llInCe IlclIm). pcrsulllllly "Infuse" ADS with $1 25,OUO III
opcmllll!! cupltllllo he I\'puld Iu Mr, Ilellnl uvcr u flcrlud of lillie, This "L.cllCI' of IIIICIlI" Is
thc only dU':lIl11cnt rcllc<:llng Ihc Plll1les' ncgollllllulIS, IInd cSluhllshcs Ihutlhe purtlcs WI.'rc
~tlllnllllotlullnlllolll! IIller Pllllnllff c1I1II11S Ihc IIl1cl!cd IIgreclllcJII hlld hecn MIICk. A InlC IIl1d
correct copy uf the Lcllcr uf InlclIl Is 1I11l1chcd hcrelo und Illude II pll11 hercof liS Exhibit "8,"
Inll~~llncc, ADS' ':lIl1nlcr-offcr 10 OSI WUS Ihlll Mr, HClln! f1nlln.:c Ihc pllrehllsc of his
wlfc'~ compllllY by ADS with his own lIIoncy. Mr, IInd Mrs. HCIln!, cllndlldlllllthlltlhl~
-3-
.
..
.
PIllPUIiIlI hy AOIi WIIH IIb~lInl, clIllclrllhrd IhlllllU l'CIl~Ullllhlll P"l~JlC<:l uf IIChlC\lllIll1l \llublu
1l1lI'CCmllJlluxIMCtllllld, UII July 12, 11)%, Mr. IIclIl1IlIullllcd ADS, III wrltlllll, Ihlll (I) Olil
WII~ fcnlllllllllllllllllll~llC<:h lIr DSI's 1'ClllllulIShlp wllh ADS: !II) DSl Wll~ lIul 11lIllre~ICd III
pllrslIllIlllllIY fl1l1hllr L1ls~lI~sllIlI~ wllh ADS I\'~llrdlllg 11IlY pllrdlllsc of DSI'~ Mock, 1I~~CI~,
COlllnlcl~ Ill' olhcrwl~c: 1111I1 (III) DSl dClIllllld~,llh~ n.'11I1ll of 1111 ~qlllpllll~lIl0WIICd hy OSI
RCIClltloll C'o I'pO 1111 1011 or lIS Sl1h<:OIIlI1lChlr, DSll~c~onls CIII]IOl1lllol1, AlIllchcLllwrefo 1I~
Exhibit "C" Is Ih~ r~f~I\'I1<:cd Jllly 12, I'l'JIl <:orr~spoll"CIIC~,
15. DClllcd, Thc IlvcnnCIlls of , 15 Ill'll dClllcd liS cOlIsllllllllllllcl!lll cOllcluslolI~
l'llqulrlllllllo respollsl\lc plClILlllIg, By WilY of flll1hcr 11I1SWllr, Ills spcdlklllly dllllllld fhul
Dcfclldlllllulld I'lullIll"" CI1ICI\'d 11110 UII ellforc~uhlc slo<:k pl1rdlllSC UI!I\'CIIlCIII 011 JUIIC 2M,
1996 or lllllllY olhcr IIIllC, By wuy of flll11wl' llll~wcr, DSllllco'lklmlcs lis reSlk)II~I\lc
1I\111nllClIls III , 14 llbovc, By wuy of fll11hcr llllswer, II Is uLlIIlIIl~d lhlll I'lulllllff ulld OSI
clltered Illlo IICgolhlllllllS which IlIdllLlcd dlsclIssllIlI of SOIllC IIrnlllgclIlclIl whcrehy ADS
would pcrfonn thc scrvlccs rcqulred IIlldcr Ih~ DLA AgreclIl~lIl, alld aSSlIllIC ccrtullI dcbls
owed lU third plll11cs hy OSI. II Is fllJ1her udllllllcd Ihul Ihc llel!ollllllollS 11111111lly IlIdudcd
dl5cus~I(1I1 of Ihc PIlYIllCl1t hy ADS 10 OSloI' I'olll!hly fOlly pcrc~1Il (40%) uf lhc IIct pronl~
1l11llcnlled pursuulll 10 Ihc OLA AI!I'CCIlICIlI. By way of flll1hcl' IlIIswcr, OSI sllCCltkully
Il1dlcllled Ihlll, liS II COI1L1lllol1 pl1:cedclIl 10 thc Ilml111llol1of ul1Y cl1forecllhlc 1l1!1\'CIllCIII, ADS
WUS 10 prepllre Ulld fOI'Wurd II draft wrlllcll u~rcclllclll for rcvlcw hy OSl's coulIscloll or
before FridllY, July 5, 1996, ADS l111glC<:ICtllll L10 so, MorCtl\lcr, ol1lhc IIftCnllklll of July
9, 1996, ADS, uftcr 11111l1C<:111l1! to <:lllllply wllh OSl's cOlldlllolllhul ADS' propolllll be
-4-
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I\!duclld 10 wrllllI. berm1l July II, ADS for 11111 fin! 'hllll, PIllI)(I~ lIulI Mr, Hl!Ilrn,
pcll'llOlIally, ndvllllcll $1211,000 lll' his llWII 1II01l1l~ '0 ADs, III urduI' 'hilI AOS hove KulllllllllU
opum'llIll cupl'nl 'llll"lClled, 1',1~ p",pllKlIll~ n:I1UCllld III Ihu (ullllxucullld) I.J.!II11r of hlllllll
dcllvuNd by ADS n!1)Il!~Ulllllll\lll~ III OSlolI lhllUllenlllOIl of July 9, 191)6, which doculllulIl
I~ nllnchlld herl!IO llli Bxhlbll "8."
16. AdllllUlld III pllrt ulld Olllllcd III pllrt u~ Mnllld, OSlllIco'llOmle~ by NI'UNIICU
lhcl'll~polI~lvu nwnncllls 10 " 1411r1d 15 ~1l1 forth ubo\lu. It I~ udtllllllld Ihul DSI pclnnllllld
ADS 10 IlIke po~~ll561011 of DSI's ~cllllnllllllllld 11111181118 cqUIPIllUIII, hllwuwr, nllY hllpllcalloll
lhnl ~uch balllllclll WIIS n recollllllhm or ullY 1l1l1'1.lI'Ccnble "1I1lI'CCIlIUIll" IlClWClllllhe p11l11e~ 15
speclnClllly dUllled, To lhu cOlllmry, DSI JlCnnllled ADS llllllku JXl~~e~slolI of DSI'~
~cnllnlllg lllld hnll8111ll cqulpmUIllIll!ClIu~e ADS cl.lIlItllUnlcllllld wllh und hiNd nWllY curtuln
kcy DSlullIployccs, (In OIlU IIISlllnccl1l direct \llollllllllIOI' II CO\lelllllllllollll COlllpulll),
thcrl!by dullbumlely Cll!lIlll1ll11 scellllrlo whcreby ADS would hn\le mnxlmum bllrgllllllllg
le\lemge wllh DSI, lllld could llllcmpllll hold purfonllllncc und~r the OLA Av,I'CCllIelll
"hoslngc, " III ~umlllllry, DSI punlllltlld ADS 10 tukc po~~csslon of lhc sClIIlIlllIg und Imnglng
cqUIPIllUIll becnusc ADS dllllbumlcly lIud willfully cl'CIltlld u sccnnrlo whcreby Ihls wns lhc
only 1II11llllcr III which DSI could comlnuc to purfonll Ihu dnlly scnllnlllllllud hnllglllg
funcllons required ulldllr Ihc DLA AIlr\'Clllcm,
17. Dcn Illd , Ills ~peclnclllly dCllllld lhlll DSIlllld Pllllmlff cllleNd 11110 1111
unrorceablc slock purchase llgI'CCIIlUIII on Jnllc 28, 1996, or 111 allY olhur IIIllC, By WllY or
further nnswcr, DSI IncorpomlcK by rcflll'llllcells l'Il~pon5lvu ll\lunllelllK 10 " 14, 15 Rnd 16
-5-
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Ilbovr.l, By WilY Ill' lUrthr.lr Iln~wur, ilK 111' Junu 2K, Illllfl, 081111111 UlIllIIIIIIIIYIlUIi, Ihll fUll11l1
huvhlll bel!n hll\.>d IIWIIY hy AOs,
18, Dunlud, Hili spedlkully dunll!1J 1111I1 OSlllIId /lhllullff ullluNd Inlllllll
I:nflll'Ccnblu SlllCk pUrchU~1l UllrclllllulIIllU Junl: 211, IlJlJlI Ill' Ul nuy ulhur thul:. liy WilY Ill'
I'urthl:r llnKWl:r, OSllncllrpllnllu~ hy f\lli:rcncc Il~ re~plln~I\Il! 1I\111nnunh lu 11 14 lIud I ~
Obo\lll,
19, Ol!nlud, 1I1~ sJlC...:llklllly dunlud lhlll OSl und /l11l(lIIlffllfllured Inlll un
I:llflll'Ccnbll: sluck purehllflC UIlI'CCIIICnlllll Junu 211, J9lJ6 Ill' III UIIY lllhllr 1111I1:, By WilY or
furthur onSWl:r, OSIIIlCOl'pllnlIC~ by reflln:ncu 115 re~'lOlIsl\Il! U\IllnnclII~ III 11 14 ulld I~
llbovu,
20. Ol!lllud. 111~ ~pcdnelllly dcnlud Ihul OSlllnd /llnlnllfr ulllUrc.l hllo un
I:llforccnblll stuck PUrchllsl: ugI'CCIIICIlllllI Junl: 211, 1996 Ill' III ullY llthur 1111I1:, 8y WllY of
furthl:r llnswcr, OSllllcorpomllls by reli:n:nec 115 re~IIOII~I\IC ll\lllnnCfll~ 10 '1 1411lld 15
11110\11:, By WilY of furthcr unSWl:r, II~ fiCt forth IlIlhll resJl<lIl~l\lllll\lCnnllfllS to 1 17 llbovu, lit
or llboutlhu lhnu PJlllnllff IlIllpproprlUlllly hired uwuy kcy OSlllll1plllYllC~, such ulllployccs,
upon Infonnlltlonllnd bellcf, look ccrtnlll dOeUIl111IlI~ und Infonnnllon frolll o.\fUlldnlll'~
offices wlthoullluthorl1.atlon llnd WlthllUtthc kllllWludgc or ClllI~lllll of OS!.
21, Denlud, As flCt forth III greatcr dlltulllnthc rc~ponsl\lc ll\ll:nllUflls to 11 14
lllld 15 1100\11:, II 15 spcclllclllly dl:nlcd thllt Ihcre was, lit llny 111111:, lln enforcenblll stuck
pUI'ChllSC ogI'CC1ll1:1I1 belwllCn thl: pllrtlllS, The rcll1ulnlng O\lllnnlllllS n:llltlng 10 111ll1:, PUrchllsc
of llqUlpfllcnt ond supplies, ele, lire dun led llCcoUSI:, following rcusollllble Invusllglltlon,
.6.
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IJIlfl!lIdlllll I~ wllhulIl IlIfunllllllulI hllnklllllllu rUI11111 hcllur II~ lu thc Inllh or lhcKll
IIWl1I1CIlI~, MllI\'ovur, liS hCt f'"1h III , 13, blllll1l, UII Jllly 12, 1'1'111 III II Irll Iff dlllllllCtllhu
mll~tllr PlIhhW'lIlllll\ll lO'lk CCl1l1ll1olhcr IIl'llolIS <l1'~llIIICd hi fl1lMllIlC DSl'~ II<:CChS 10 Ilrc
dlllllhll~ll IlIto which 1111 ADS wllrll pl\IlIIlCI IlIul hcclI CIIICI\"\' IhCI\'hy dcstmylllg III1Y vlIIIIC
which It~ ~clvlcc~ might hllvc hili! 10 WilliI' Dl,A,
22, DClllcd, All IIVC nllc II Is III' , 22 Ill'll spcdlklllly dClllcd, hOlh 1I~ cOIIMltlllhl1l
Illlllll C'lIldll~luIIS re'llllrlllg 110 I1~SpIlIlSI\'c plclI<lllIg, 1111<1. III Ihc IIIICl1llltlvc, liS II\1Cnlllllll~ of
rllcl. Thc Il\lCllllCIIIs thlll DSI clIlIllged IlIthc II~C 01' "llIcglll MlflWlIre" lire <lcllled 1I~
IIl1hllclIllllhlc, Thc rClIlIlllIllIg IIvcnllCllIs to Ihc clTcl't Ihlll DSI hll<l "clIglIgcd III hllpl\lllCr Ulld
1I1111l1l1 cOlldllCI" Ill'll dClllcd liS UllllllclIlglhlc, IlIddllg III slIfIldclIl spc<:lIklty 10 pc nil It II
IIlc.111111Ilrllll)!SpUII~C, IIl1d such IIvcrmClIls Ill'll slIh.lc':1 10 II mOlhlll hl slrlkc liS sculldul,lU~ ulld
IlIlllCl1ll111lll.
23, OClllcd, AIIIIVCI'IlICIIIS 01' , 23 IIl'e SllCdlklllly <I,:nlcd, hoth liS <:01l~11t1J111I1l
ICIlIlI cOllclllSlollh reqlllrlllg 110 rcspollsl\lc plclI<lllIg, IIl1d, III Ihc IIItCl1lllllvc, liS U\lCnllClllh or
fllct, To Ihc <:olllmry, OSI III 110 lime hilS hlld "IlII1Jor <:olllpllllll<:C pmh/clIls", 8y wuy uf
furthllr UII~wcr, OSII)!,:clvc<l I'nJlII DLA "ClIre NOllccs" purslIlIlIl 10 Ihc DLA AIlI'CCIIlCIll
hll\llnllto du Illcrely with IlIc IllIIcly pick lip IIl1d rclllrll of <lo':III1lCIIlS lIud rcsohJ\lolI of II
bllCklllllof dOClIlIlCIIlS lllllC SCIIIIIIC<I, Wllh Ihc cxCCpllOIlOf <:C1111111 drculIlslulICCS
dcllbcr.llcly l'rellICtI hy 1>111111111'1' 1111 JlIly 12, 1'1'16 (liS SCI lill1h III I!relllCr dClulI hcrelll)
flllthrlllllCrfunllUIICC or Ihh IISpC<:t of Ihc DLA AgrecllIclIl Is 1111 Issuc which WIIS Cllslly
llrldresscd, IIl1d which IIIIS IlCCll resol\lcd hy OSIIO OLA's slIllsrllCllolI,
-7.
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24, Ol!IIICtI us MlIlutl, Ills lid III I II cd lh,IlUII JlIly 12, Il/l/I') OSI funllnlly Illnlllllulcd
IIf1Y n:llIlIllflshlllll hllll with ADS: Illlvl~~d ADS Ihlll It Wll~ lIul 1I11~lllSlcd III fUI1her Illlr~lIhlll
IIIIY IIllllUlIlIllulI~ wheI~hy ADS IIIlghlll"'1"h\' Ihc h10dl, IIsscls Ill' CUIIII1Icls of nSI: IIlhl
dlre<:I~1I ADS 10 1\'11I1'1I 1II1l"llIlplllcnl IInd sllppll~s whkh AilS 1111" pl'CVhlllsly lukclI
pll~~c~~hl/lllr. A Inlc 1111<1 ,'01'1\','1 copy llf ,'OITcspllll"llncc whkh WII~ hlllld dcll\lcI\'d lu ADS
UII Jllly 12, I'II/h, I~ IIl1l1chc<l hCI'Clo IIlhlllllldc II pllrl hel\'lIf u~ Exhlhll "C", AllY IlIIpllellllulI
lhlll Ol!fclldllllllcnulnlll~d 1111 ~lIlill\:Cllhlll Slu<:k plll\:hllSC IIgl\'CIIIClIlllClWClllllhc pIU1111~ Is
expre~~ly dClllcd, To lhl~ COllll1lry, 110 h1ldlllgl'CCIIICIII c\lur cxlhlcd IlClWClllllhc plll1111~ liS
IlIdklll~d III " 14 IIl1d I~ IIhove,
25, Dc II led , AlIlI\lcnllclIIs of , 2~ III\' dCllkd liS liJllows: II I~ sllcdtklllly dlllllcd
thlll PllIlllllff lllllcly I\'IIIIlICd 111101' lJclclldlllll'S c'IlIlplIIClIllo DSI. To lhl~ Cllllll1lry, milch llf
DSI'~ Ctj1l1plllC1I1 hils hCCII 1\'lnlncd hy 1'111111I11'1', dc\pltc DSI 's dCllllllld fill' I\'llllllllf Ihc ~llIlIC,
Ills fllrther dClllcd Ihlll I'lnlnlll'" llffCI\'d III IIsslsl Dcf'I'lIdnlll III rcsIllrlng Its llpcmllon~, To
Ihll conlmry, Phlinllff IlIslMc<llhlll DSI wOllld he IIl1l1hlc III perliJllII Ihc cOlllm<.:l wlthlllll
Phllllllff's IIs~lslllncc, II lid , IIpon Infonllllllon nnd hcllcr. I'lnlllllff (llllk <:c11111n stcps III cnslln:
thllllhl~ WIIS lhc CIISC hy, 11If"/' (/1111, dlllllglng nil PlIs:iw(lrlb rC'IlIll\'d to gllln clllry llllhc
DLA dnlll sy~tCII1, Ihcrchy J'Cllclcrlng 1111 fOllncr wllrk pcrformcd hy OSI. Plnlllllff llr lllhcr
pcrslIllnlll wonhlcss. Ills funhcr SllCdtknlly dcnkd (hnl DSI did 1I111 ClllIllICI Phlillliff 10
r\'ljIlCsllIsslsllllICC In rcslorlng opcrallons. To Ihc cOlllrary, lln (hc 1II0mlng of SnlllrUlIY, July
13, 1996, upon ICllmlllg of Ihc dcllhcl1llc IInd willful chllngc of Ihc plIssworlls 111111 thc IIkc by
Plllhnlff, repre~Clllnll\lllS of OSI nrsl cllnlllclcd represlllllnllvcs of Phllllllff, IlIslsllnl! Ihal OSI
-8-
.
Ill! fllnllNhCtI with lite lIew pll~~wol1l~, III ~lll lllllllhllr llllcmpl III 1l~1l'1 Ill\lenlllllllVllr OBI wllh
N~llCt,:tlll lhll DLA AllrecmcIll, 1'111111111'1' (klllwI1l1CI~ wlthhultl Ihc pll~~wlll1ll.lIl1lllhllmlll1lll1ll
of ThumlllY, Jllly IN, IlJ'Ill, whclllhc IlllW PlIsswllrd "NOWA\''' WIIS, III 111M, ,:lllllmlllllclllcd
by II repre~elIllIll\IC Ill' I'lllllIll""lolIl\!Pl'Il~IlUlllllvIlOfI>SI. By ThuI'sdlll', Jllly IN, IlJlJll, Ihls
Illl~~wllnl Willi Ill' Ull U~l! III DSl, which, liS ~lll l'uI1h hCI\'11I hlld dlllly ohll~llllol1s Itl mccl wllh
OLA,
21\, Del1lcd 1I~ MlIlcd. Ills IIdmllllld lhlll 1'Illll1111f hll~ S(!1I1 lhc III\lokc~ 1I11l1chOO 10
Ihe Complllllllll~ Exhibit "B" 10 OS!. Thc l\'mlllllll1g lI\ICmICIII~ llf 1 26 III\' dlllllcd ll~
ctlllMltulllIlllcllll1 cOllclu~llllI~ UI' II~ sCllklllg 10 Chlll1l<:lcrl/C docllmclIl~ which spclIk fill'
Ihclmcl\lc~, By WilY of fll11hcr III1~W,!r, I!lvCII I'lllhllll.,,\ cOlldllCI II~ scl flll1h llh'l\lC IlIlhll
n:~pllll~I\lC lIvcnllClIlS III 1 25, It Is spccltklllly dCl1lcd Ihlll III1Y "slll'vlccs" uf III1Y \llllull III
III1YOlIll (whclhcr DSI, DLA or olhcl'wlsll) Wlll'C, 111 thc 11l1l1lullulysls, pl\l\lldcd hy Plllllltlfl'.
Tolhll COlllnlry, IllI\lIlgh Its uCllol1s III chulIl!llIg thc p"sswurd PllIll1llff cffccllvcly 11111111100
thc vllluc of III1Y scrvlccs which II IIIlghl pr\'vlously huvc pcrflll'lllcd, Mlll\'llVCI', U~ lll'e~ult
of PllIll1llff's 1l<:lIOIlS liS scl 1'011h llho\IC, DSI hilS hcclI compcllcd III CXllClldcd Irell1l!lIdolls
sums 10 COI1lIUIIC lis pCrflll'llllll1CC IIl1dcr Ihc UL.A Al!reCmCIII, which IIClllllIS IIrc thc subjccl of
OSl's Coulltcrcllllm,
27, Thc II\lCnllClIls of 1 27 lire dClllcd us COIISlhllllll1! Icglll <.:llllcluslulIS r\'(julrlllll
no respollslvll plcllding, By WilY of l'ul1her 11I1SWCr, II Is spccltklllly dcnied Ihut Ihcre e\lcr
WllS llny cnforccllble stock PUrchllSll uIlrccmlll11 bCIWCClllhc flllrtlcs, und us II rc~ult Ihcrcof
any brench thllrellf would be Imposslblc, Ills fllrthcr spccllklllly denied lhllt Pllllnllff hll~
.9-
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beell hnnlll!(l by nl'y nCllolI or OIlrLllldmll, Tn lhll CUJlIllIry, DLlrundllllllms 11l.'Il1I hunllud by
Plnllllllrs nCllnllll, IIl1d 10 IhuuXlulII Pllllllllfr hllll Illlrrun:d III1Y hllnll, 11111 ,",mil Is lilliI'.
III00clud,
2K, OI!lIlud ll~ Slllllld, Ills lldmltlCtlunly Ihllllhu dOCUllllllIIK 1I1IIIChud In Pllllnllff's
Cllmplllllll IIIl Exhibits "0" lllld "n" WllN lil/"Wllnlud III DSI, IIl1d I\'clllvcd hy DIll, Thu
rulllllllllng ll\ll!nllLllIIs of 1 28 clllIslltllle IUIlIII cllllcluslulI~ 1\''llllrh11l1lll n:~pun~l\le pll!lldlllg.
Tlllhll exh:1lI Ihey IIl11Y he dllClllcd lI\1enlllllll~ Ill' fllCl, lhll ~lImu IIrllllxprussly dllnlcd, Tlllhc
cOllllllry, liS sel forth IIho\lc, Ihllrll IIC\ll!r WII~ IIny cnfnrecllhlc stllck pUl\'hllSC 1I1lJ1:ClIllllll
bc:lwcclllhe pnrtles, llnd Ihe \llIluc of IIny "sllrvlclls" pnl\lldcd by Pllllnllfr 10 DcfcndBIIl wns
cffll(llvely nulllncd IhlllUllh Pllllllllff's llclllllU B~ ~lll lilrth hcn:ln,
29, Ol!nlcd. Thc lI\1ennunl~ or 1 29 constltulc Illlllll conclll~lon~ requlrlnllno
rusponslw plUlldlllll, To thc LlXllllllthc ~llInu mllY l.lC dCllIllCtlll\lcnnllllls llf facl, Ihcy llru
denied liS slaled, llls ndlllhted only Ihllt DSI hll~ Insl~lcd 1I1l111hllrll Wll~ nuwr IUlunforcCllblc
slack PUrchll/ll! llgI'CCIIlCIIl bc:lwllcnthe pllrtlll~ which would Ill\lu rI~ll 10 llny dUllcs of
pcrfonllallcc or PllYIllCIll undcr lhlllill cI rcu III sill IICllS ,
COUNT II IUU';ACII 010' CONTRACT
30, Defcndant Incorpomlc~ by refcrencc thc responsl\lc IIVllnncnls Iillllorth III 11 I
Ihrough 29 of lis Answllr ll~ Ihough fully ~llt forth hlln:ln.
31. Denllld. Thc ll\lUnnllJllS of 1 3\ con~lltulc IUlllll conclusions requiring no
I'Csponsl\lc pllllldlng, 8y WllY of further an~wer, Ihllre W.1S no oml agl'Clllllunl and Ihelll was
110 cOllsldemllon.
.\0.
,
.
32, J:)lllllll,J, Till! IIVl!rllllllll~ Ill' 1 32 CIlIIMIIIIIC ICIlIII cOlldll~IIlIU re111llrlllllllll
I'Il~JllllI~IYIl plClIdlllll, ny WilY Ill' I'IlJ1hur IlIl~Wl'r, IhlJJ\! WII~ 1111 111111 1111 I\'C III CIIl 1I11L1 Ihlll'C WitS
IIU ClllI~ldl!nllhlll, 'I"l Ihlll'ollllllry, lllcl\' WII~ IIdlhcl' II1l0l'kl' 1101' III1I1CCCpIIlIlCC, 11I1I llllly
JlI'\!lhlllllllry IIcglllhlllll/l~, By WilY 'If t'l1I1hl!I III1~wcr, IISI spl'<:lIklllly III<lklllc,llhlll, II~ II
cUlldlthl/l11l\!(l!dcI11 lolhl! 1'0 1'1 11 III hl/lIll' III1Y l'lIl'llJ\:l'lIbk 1I1l1\'l'III"IIl, AilS WIIS 10 pl\'pllre IIl1d
fUI'WlInlll dntli Wrlllcl1l1l1l\'CIIIl!lIllill' Inlcw hy nsl's <:lI\llIsl!i '11101' hl!iill\' FrldllY, Jllly 5,
191)(" ADS IIcglc<:lc<I III <10 ~ll, Morcllvcr, olllhc IInl!nHl<lIl11l' Jllly 'I, II)'/C), Wllcr
nClllcclllI1l hl Clllllply with /JSI' S Clllldltlllll lhlll ADS' pnJpllSlI1 hl! J\!dllcl!d 10 wl'lthlll hl!llln:
July 5). ADS, for lhll llrSIIIl/lc, PI\lpOSl!<I IhIlIMI', 1ll!II1'11, pcrsolllllly 1I<1\1I1I1CC $125,IKKllll'
hl~ llWlIlIIlllICY III ADS, II111r<lcr Ihlll ADS IIIIVl! ~lInkklll llpcl1lllllg cllpllllllll pm<:ccd, Thl~
prollO~1I11s rellcclcd III lhc (1lI1CXCCIIICd) 1,:llcl' of II1ICIII dllllvCJ\'d hy ADS J\!PI'CSCIlIIlII\IC~ 10
DSllllllhc IIlillnlllOl1of Jllly 9, 1'1'16, whkh dllClIlllclllls lIulIchcd hl!I\'I') liS Exhlhlt "n."
33, /JCII icd, Thc IIWl'Il1Cllls of 1 .1.1 ClII1SIIIIIlC IC!!1I1 cOlldllSillllS 1'C'llIlrll1g 110
rc5p'1Il~i\IC plcudil1g, 'I'll Ihl! eXlcllllhc SIIIlll! IllIlY hc <lcclllcd IIWlll1ClIls of l'acl, Ihcy lire
dCllled for lhc I'CIlSOI1S sCI li1l1h IIhovc III J'CSP'l/lSC 10 11 16 Ihl\lugh 10, II Is IIddltllll1lll1y
spcdllclIlly dClllcd lllUl OSII1l!glc<:ll!d III1Y Ilhllgllllol1s IIl1dcr Ihc DLA Agr\'<!lIIl\1I1. TOlhc
cUIIlmry, liS icl lill1h IIho\lc, PIIIIIIIII'" dcllhcnlldy <:relllcd II sn:l1l1l'lo whcl'chy DSI hlld Iltllc
cholcll bill III dllllJ/.lIlIC pcrlilrll1:1l1cc of <:CI1I1I11 IISpC<:IS of Ihc OLA (lI\llr;II'1 10 PllIllIllff ullllI
lIlhcr IIl'mllgclII".IIIS <:ould bc Illlldc, By WilY of fllJ1hcr III1SWCr, Ihc COIICCpllhll1 cllrtlllll ~llIllS
lhclI dllc to Plnll1tiff by OSI woul<l 11<: forl!lvclI liS plll10f 1111 IIgreclIlcIII bctwccl1 Ihc plll1lc~
WllS nlllollg IlIllltCllls IIICl1lioll~ duril1g thc partlcs' 1111l!lllhll.lol1, Hllwever, us ~l forth III
-11-
..
.
Ill'lMhlr 11111011 hllnlln, IhllM! nUllulllIllllllH nllVllr 1\!5ullud hi an IInforcllablll all~lIIl1nl, Will\!
nllvllr Nducud 10 wrllhlll 01 n=qulNd by OSI, IIl1d Plahulff contlllually Pn>I)05ud III1W 01111
odllltlollllllllalurlllllenlls,
34, The llvenllullls uf . 34 cUIIMltule IUIlRI cUllcluslulIK l\'(julrlllllllUI\!Ipoll51\1e
pleadlnll, 8y WilY uf further IIIl~Wllr, 1I11 ellfllrcellble Muck pun~hll~e 1I1lI'CCIIlCIll WlIlllwr
IIchlu\lud hctwl!l!nlhu pllrtllls, llnd thcn: hll~ cUlIscquulllly IlCClI 110 IJrullch Ihllreof, IIIlllurlnl or
othllrwl~u.
3', nlU nVl!nnllnls uf . 3' clln~lltule IClIlll cOllcluslons I\'(julrlnllno n:spon5l\1e
pleading. By WllY of furthcr nnSWllr, 110 unforceablll Mock pUrehll~ 1I11I'CClIlenl WIl~ e\ler
nchle\led hclWl!l!n the Jlllrtles, nlld Ihlll\! hll~ con~equlllllly been no brunch thoreof, IIllllerllllur
olherwl~, nor llny dlllllllgcS or 1051 prol1ts,
WHERBFORE, Oefendlllll DSI Rclllnllun COl'Jxlmtlun n:SllCClf'ully requests JUdglllllllt
In Its fn\lor llnd llllllln51 Plolllllff, IOllclhcr with IIny llnd nil Cuurt co~ts.
COUNT III QUANTUM MI~RUI1'
36, Ol!fendnlll IrICOl'JlOI1I!CS by refcn:ncc thc n:spunslw ll\lcnnenls ~l forth In .. I
through 35 of Its Answcr os though fully ~t fi.Jrth hcrulll,
37. n,e ll\lUnnllllts of' 37 constitute ICl!lll cuncluslons I\'(julrlnllllo respolIsl\le
pleading. By WllY of further llllswer, nu enforceable slock purclll1~ ogl'l:elllent was u\ler
achieved hctwl!l!n Ihe pllrtles, and lhel\! hllS consequelllly been no breach thereof, IllOIl!r1al or
olherwlse.
-12-
311, Th~ IlVllnllllllll 01' 1 311 I.'UllllllulU IUllnll.'lllll.'lualllJlll JWjulrlllllllu NKlll)lIalvll
Ilhmdhlll, By WilY uf flmhur III1IWUr, lI11ullfnrellllblu aluck flurchnau IlIlMlllllllII WIlK uvur
IIl.'hlIlVL'd 1)l!IW~lIlhll pllrtllla, IIl1d IhllN JIII~ cUllal:(jUllluly llCl!1I 1I11 brcuch lhllNtlf, 1I1111urllllllr
lllhurwl5u,
39, Thllll\lUnllCIll~ Ill' 1 39 cOII~tltUIIl IllllUI CIIIlChl~101l5 J'C(jUlrlllllllll NIlIlUlUI\lIl
IlIClldlllll. 8y WilY of furthllr IlIlSWCr, 110 llllforeellhlll N111ck Ilurehuau 1I1lI'CC1ll1l1I1 WIl~ ll\lllr
IIchle\lL'd bc:IWClllllhIlIlI1l1111S, IIl1d lhcl'c hils cOlIsl:(julmlly llCl!1I 1111 breadl thllrcuf, 1lI11lcrllll or
olhurwlau.
40, Thu a\lllnlllllll~ of 1 40 CUIINlltllle IClllll cOllcluslolIS J'C(jlllrlllllllll n:~pollsl\Ill
IlIClldlllll, 8y WilY of furthllr IlIl~Wllr, 110 cllrorccnble stock purchllsu 1l1lI'CCIlICIll WllS u\lur
llchlu\lL'd belWClllllhc pllrtlll~, Illld Ihun: hll~ COIIScqUlllllly llCl!1I IIU brcuch Ihcrcuf, llllllerllll or
Olhllrwlau.
41. Thllll\lCnllcllt~ of 1 41 lire dellled liS cOIINlltutlng IlllllIl cOllclu~lollS Nqulrlllg
110 respollHC. By WilY uf fllrthlll' III1SWllr, It I~ spcdllcally dcnled IhatthuN ll\lllr WllS llllY
llllrOJ'CCIlblll slock PUrchllHC allI'CCllIcllt bclWCllII lhc pllrtlc~, lIlId, liS a result, llllY breach
Ihereof would be hllposslblc. It Is rurthllr ~pedfklllly dCllled Ihlll Pllllllllff hllS beell hllnncd
by llllY aclloll of Ol!fcndllnl. TOlhll cOIlImry, Dllfllndlllll hilS llCl!llllllnned by Pllllllllff's
llcllolIS, llnd 10 lhllllxlcnl PllIllltlff hllS surrllrcd IIIlY hllnn, che Slunll Is self.lntllctlld.
42, Ol!lIled. Thllll\lunnunl~ of 142 cOlIstltullllllglll cOllclu~lolIS Nqulrlllg no
NSpollslve plClldlng, To Ihe llxllllll Ihe 61111I1.' lI111Y be dCllllled a\lunllllnls of fllCl, Ihc Mille llN
delllL'd. To Ihc conlmry. Defulldllnl hllS 1101 beell unjustly ullrlched, 1101' has Defendant
-13-
rtclllvud BUY bllUllnl WhBlIlOIlYllr Il~ II n:Kullllfllllllulll'f'~ "flllrfllnullllcll," "lllhll Cllnll1lry,
PIBhuIlT'~ duJlblll1l111 chBlIllu ofllmword~ Ulld lllh~r Ilcl~ llf ~llltufurllm hll\ll: Cll~t Ollflllldllnl
ClllI~ldumblu lllull, InlllblllllutluxIll!n~~ In Cllllllnnlul! IllllCrfonu lh~ DLA AI!I'CCIII~nI dUllllllu
PJBlullrr'~ ml~'i!IlIllUICC,
WHBREFORE, Dllflludnlll DSI Rlllunllllll Cllrllllmllllll n:~llCClfully rcqu~61S jutllllllulII
In II~ fil\lor uud "llllhlHl Plulllllrf, llllllllhllr with ullY nntlllll CUllrt <:ll~l~,
COUNT 1111 l'IU>MIIiIiOltV 1i;S'l'OI'I'J<:J,
43, Ol!rcndllllllncorp{)mlll~ by n:fllrellcll thll re~llun~l\lllU\lllnnlllll~ scl forth In 111
IhlllUgh 42 of II~ An~wllr u~ lhllllllh fully ~llt fllrth hcreln,
44, Thll ll\lCnnllllls Ill' 1 44 clln6lllUlC Illl!ul Cllllclusllln~ reqllI rllIllno resllon~I\II:
plentllug, To lhllllxlcnllhu ~llmc 1I111Y hc tleell1ed lI\1cnncnl~ of tilet, lhll Nlllnu un: dllnled u~
wholly eonehl6ory IIntlIlIeklnllIII ~Urnclcnl tlllllllIlll cnllbJu OSI III fl1lll1C II mennlngful
response,
45, Thllll\lllnncllls of 1 45 cllnstllutc reglll ellnclusloll~ requlrll1g 110 re~pon~I\Il!
pleadlug, To the extellllhll SllInllll111Y IlC dllllll1ed lI\1llnllCllls of fuel, Ihc ~nme lire denied liS
wholly eouclusory IlutlIlIcklullIII Nurnclclll tllllulltu 11l1ublll OSI 10 fmlllll 11 menlllnllful
respol1~,
46, Thu ll\lennCIllS llf 1 46 conslhulll regul eiJl1c1u~loI15 requlrll1l! 110 respol1~I\Il!
plentlhlll, To the Cxllll1tthlllillll1C III11Y he deell1ed II\lllnnulll~ of fllel, lhlllillmu lire dUll led as
wholly eOl1clusory llntllllckll1g In SUrnclcnl dUllllIlll cllublu OSI 10 fromu 11 lIIennlngful
respon~.
-14-
.
47, nUllIVllnllullla llf , 47 cllnallllllll IUIIIII conclllslulla '~lIlrhlll nu l'llaflunalvll
pll!lldlulI, TUlhllllxlunllhll ~1II1l IIlIlY bll dl!l!lIIlld IIwnnunh uI' 1'111.'1, Ihll ~1II1l1ll'll dllnllld u
whully cuncluKllry IInd IlIckI IlllIn 5uflkhml dllllllllllllllllbh: OSllu I'nnnllll IIIllllnlnllrul
rca1l1.l1l6U.
.18, Thu 1I\1llnnCIll~ of , 48 conMllulu 11l1A1I1 condlJ~llllI~ requlrlllll nll I'l!llllOnslvll
pll!lldlllg, To lhllexlenl lhu KlIllle limy tlC dUUlllCtlll\lllnlllllll6 or fllct, Ihll ~Illlle lire denllld IIN
wholly cOllcluKllry Rnd Illckhlllln Kul'llclelll dllllllllll llllllhle OSllll fmlllell IIIcunlnllflll
I'l!llponllll,
49, Thllll\lennUll16 of' 49 con6tlllllellllllll cunclll610llS rcqulrlllllllo 1'l!~llOl15I\11l
pll!lldlng, To Ihu exlenllhe 611111e IIlny be dl!l!lIllld II\lennllllh Ill' fllct. the ~Illllelln: dllnled lla
wholly cOllclu60ry IInd Illckhlllln ~ufllclclll dllllllllll cllllhle OSIIU fnllnell IIlClllllnllrul
I'l!~ponllll.
SO. Thell\lennunl6 of' 50 con~tllllle Illl!lll conclll~loll~ rcqulrlnll no rcsllOn61w
pll!lldlllll, To Ihe exlent Ihc ~lIle IIlRY be dl!l!IllCtI Rvcnllllllls of frlct, Ihe ~lIlelll'l! denllld 116
wholly concluKllry llnd IRcklnlll1l 6ul'llclcnt dllllllllo cllllble OSlto frlllnllll Illl!lllllngful
respollllll,
51. Thu ll\lcnnelll6 of , 51 cOllstltutc ICIlUI concluslun6 rcqlllrlllll no re6poll61vu
pll!lldlllg. To Ihu extcllllhc ~lIle IIlIlY be dl!l!llllld ll\lCnnllllls of fllCl, Ihu 6RIIlU lire dellllld Ra
wholly COIlCIU60ry alld IRcklng III 6umclcIll dutlllllll ullRblu OSIII) fmlllu llllll!llnllllful
respollliC.
-15-
WHBRBPORB, Ol!limdlllll OSI HclulIlIulI Cllrllllntlloll n:sllC4:lI\llly Mjuu~11l JudKUlIllll
III III fnVllt nud nlllllllsl Jllnltlllff, hll!Clhllr with III1Y IIl1d ~II CUllrt cllM~,
COlJN'l' IV, I)Jo:I"AMA'J'JON
52. Ol!flllldnllllllcllrpllllllcs hy I'Cf'CI\:lIl'C lhc I\'SIlUII~I\lU lI\ICnnlllll~ ~cl rllrth III " I
Ihrl.lUKh 51 of lis AlIswcr 1I~ I.hllugh fully SCI f'"1h hCJ\'III,
53. Thu lI\1cnnelIl~ Ill' 1 53 ClllISlllulC ICI!III Cllllclll~llllIS requlrlllllllll re~')(lIlKI\lll
Illendlllll. Tlllhll exlctII lhll S1II1lC "!IIY hc dcclIlcd lI\1unnCIII~ uf fuct, Ihll Slime lln: dCI,led liS
Wholly Cllllclu~llry ulld IlIcklllg III suflklclIl dCllIlIlll cllllhlc OSllll fmmll IllIlUlIlIllIllful
n:~I)OJI~ ,
54, The II\1CnllCllls of 1 54 ellllSllllllll Illgull'llllclll~llllIS requlrlllllllll re~J)(lIl~lve
Illeadlllll, TOlhll CXIClIllhll ~IIIl1C IIlIlY he dcelllcd II\1CnI1CIII~ Ill' fUCl, Ihc ~ulIle lire dCllled 115
wholly cOllclu~ory IIl1d Iucklllg III ~ufl1c1cl1t dCllIlllO ClIlIhlc OSllo fl11111C U lIlelllllllllful
respoJl~,
55. Thc lI\1ennlllll~ of 1 55 colISlltutc Ill!!ul ellllclllslllllS Mjlllrlllg 1I11 respollslve
plendlllll. Tllthc cxtelllllic SUIlIC IIlIIY be dccllled u\lcnncllI~ of fll<:l, Ihc SlllIle lln: dunled liS
wholly conclu~ory Ulld IllCklllg III slIflklclll dCllllIl1l Cllublc DSllll fnllllC U IIlClIlIllIllful
respoll~.
56. Thllll\lUnl111lll~ of 1 56 ellllSllllllC Ic!!al cOllclusllllIS requlrillg 110 re~ponsl\le
plcadlllg, Tllthc extelllthe ~llllle IIlIlY be dCCllllld II\lCIlI1Cllts of filet, Ihe SlllllC lire denied liS
wholly conclusory llnd Illcklnll In sufl1c1elll dClulIlO 1lI111hlc DSltll fmlllc 11 mennlngful
responile.
-16-
.. lit.
"~
n "111 UVIlnlllllll1 of 1 57 consllllllll II!IIUI conclllalona n:qulrhlll no lllapollalvll
plClldlllll. To Ih1l1lX11l1ll1h1l1ll11ll1l mllY bu dl!4lmed IlVllnUlllIlK of fllCl, lhlllllllUllll1ll dllllled 115
wholly cllncluaory Ilnd IlIckllllllu ~Umclllnl dl!lnlllu uunblll OSllll fnuuu n lIIul\lllugful
Il!IJ)OUIIl,
58, Thll O\lllnllllnls uf 1 58 COII~lhule Jll/l1I1 conchl~lolu n:qulrlnlluo n:sJllJllslvll
Jlleadlull, To Ihllllxlllllllhll ~IIIU IIII1Y be deemed 1I\111nUIlIlU of fllCI, \JIll IlIUlle IIIll dUllllld RI
wholly concluwry olld IllCklulll1I ~UmcluUl dCllIlIlll cnllblll DSllU fnUUll n llleaulUllful
Il!sponlie,
WHBREFORE, Dllfllndlllll DSI Rcllllllloll Cl1Ill11mllun re~llCCl"ully n:qUllslK jUdgmll1ll
In 116 fU\lor llnd llllahlllt PJululIl'f, tUlllllhllr with nllY nud 1111 Cuurt co~t~,
COUNT VI SI)I~CWIC l)mU'OltMANCI~
59, Defllndaullucorpomlll~ by Il!fcn:ncc Ihe n:spollsl\le ll\lllmllll\ls lilt forth In 11 1
lhrough 58 of 118 AII6wcr 116 thllUllh fully ~llt forth hllreln,
60, Ol!nICtI. 051 hllreby Incorponttll~ by n:flln:IICC Ihll Il!sponsl\lll ll\lllnnuUl6 10 11
1411nd 15,
61. Ol!uled. Thllll\lllnnellls of 1 61 con~lllute Illglll concluslon6 n:qulrlug no
responsl\le plcadlnll, By WilY of furthur IUlswur. lhllre WIIS 110 oml slock PUrchllSl! agreemllnt
and thllll! wa6 no con61dllnulon,
62. Denied. The a\lllnllllllls of 1 62 COIISlllul1l luglll conclusions n:qulrlng no
Il!sponsl\le pleading, 8y WllY of further llnswur, thllre WllS no oml stock PUrchllSl! agreemllnl
and Ihere waK no con6ldllmtlon, To Ihu cOlltmry, lhure WAS nullhur lln offur nor an
.17.
IlCCllIIIIIIlCIl, bUI ollly IINlhlllllllry 11I:811111l1111IlS, By WilY uf furthur IlIl~Wllr, 081 IlleClllclllly
Illdlclllcd lhlll, liS II Clllldlllllll pI'CCedUlllllllhu l'llnllllllllll uf tlllY ullfurculIblu tlllI'CCmUIlI, AOS
Will 10 pNpllN Illld fllrwllro II dl1lll wrltllllllllln:cmllJII fllr n:\llcw hy DSI'~ CIlIIlIIil!I Ull ur
bllfore PrldllY, July ~, 1996, ADS ll11glcclud III dll ~O, Morel.l\lcr, ulllhllllllul1l11l.lll11f July
9, 1996, (llftcr Ilcgh:Clhlll 10 comply with DSl's Clllldltlllllthlll ADS' pll)pu~tll be Nduccd III
wrltlllg bufoN July ~), ADS for lhe IlrM tlll1c, pll)Jlll~Ctllhlll Mr, Helin! pmlllltllly lld\lllllCC
$12~,OOO of his OWll1l10llUY 10 ADS, III olllcr Ilull ADS hll\lC ~1If/1clcllIllpcmtlllll Clip Ita I 10
proceed. This propo~lll I~ reflected III lhll (Ullllxcculed) JCllcr of hllCI1I dllllwrcd by ADS
n:prclil!1l1nll\les to OSI ollthc IlllCI1l001l0f July 9, 1996, which docull1cllIls Illlnched hcrelo
ll~ Exhibit "8,"
63, Dell led. Thllllwnll11lllS Ill' , 63 cOlIstltulC ICIlIlI cOllclusloll~ requlrlllllllo
n:spollslvll pllllldhlll. 8y WllY of further IIIl~WCr, lhlln: wns 110 oml slock PUrchlllil! ngI'CCmcl1I
lllld thcN WllS 110 cOllsldcl1llloll.
64. Dellled. Thll II\lCnll11llts of , 64 COIlSlllute Illlllll Cllllcluslon~ requlrlllg 110
NSPOlllil\lc pleadlnll, By WilY of furthllr IlIlSWer, thill'll WIlS no llml stock PUrchlllil! llgNemcnt
Ilnd there WllS no cOllsldcmtloll,
6~, Dcnled. Thc ll\lCnllellls of' 65 constlllllc IClllll conclu~loll~ requlrlllg no
responsl\lc pleadlllg. 8y WilY of furthllr IlIlSWer, thcre was no llml stock purchalil! agNemelll
llnd Ihure was no consldcmtlon,
66, Denied. To thc contmry, PSI Is fully cllpablc of pcrfonnlng Ihe DLA
AgI'CCment and hllS llllgllged lhc serviccs of 11l111lhcr SUbcOllln\l:lor whose servlcus lire
-Ill,
IlCliCljllllbllllO DLA, TIIII DLA colllmel 15 n0111l WJ): dUlIllllr of 105s, ccnlllllly 1101 hnmlllclll
dUlIllllr of loss, Dy wuy of I'unhllr 1I1l5Wllr, II would hi! 11 fur Iln:lllur IIkullhood lhllllhc
cOlllmcl would be 105110 RlIllllrth:5 should ADS IIllullIpllO n:11ISl!rt ItKllJf hllo OSI'1i
NIRllolIShl1l wllh 01.A, plIrtlcuhlrly Mlwlllhc cnrJlur IIcl~ Ill' IlIISI'Cl.flllIICC by Pllllllllff,
67. Ol!lIloo, 'rhllllwnllclll~ of , 67 clllIslltulC Icgl.1 CIlllclu510llS reqUlrlllgllo
NSllOf15lvc lllClldlllg, Dy WRY Ill' f'urthlll' IlIIswcr, thun: WlI5 IIIl oml Mock purchllSl! IIgI'CClIIUIII
llnd IhcN WllS 110 cOlIsldumtlllll, To Ihu cxlClIllIlU II\1CnnCllls lire dCl!JIloo 1I\11mnUIllS of fllCI,
lhu MIlIC are dCllloo, 8y way of furthllr IIl1sWur, 051 hlcOl'Jll.1mIC~ by refcn:llcc lhc
resJlOlllilvc 1l\lllnllUIll~ of , 66 IIbow, 8y WllY of furthcr lln~wcr, lhc ll\lCnnCIllS NllllllIglo
Defulldnlll's llllcgoo "1lI1~conducl" IIN dcnled IlIlIsllIuch liS they lln: conclusory llnd Illck
sufOclcnl spcdnclty to cnllble OSllo fnllnc a IlIclInlngful n:SJlOIISl!. By WRY of furthur
IlIlSWUr, llny Nvlcw of PllIlntlff'~ COlllplnlnllllllkcs c1Cl1r Ihlltlhls Is llliKllllllllJly lllugnl, J'Blhur
Ihnnlln equltnblc IIcllon, Ihllllll besl for ADS, IlnlllY be cnlllh:d 10 SOIllU IlICl1sUN of
1lI0nClnry dnlllllgcs, llnd Ihnl Its n:lllooy 111 IllW, Ol'HllefU/o llny n:lllcdy Is llpproprllllc ulldur the
c1rculllSlnnces would be fully lldeqUlllC.
WHEREFORE, Ol!fcndllnt DSl Rclellllon COI'JlOJ'Bllon respel:lfuJly requests judgment
In 115 fll\lor llnd ngalnst PIlllllllff, logether wllh IIIlY lllld 1111 Court cosls.
NEW MA1nR
I. Plalllliff's Complaint flllls to slnle llny CllUSl! of aCllon sounding In equity.
2. Plaintiff has 11 fulIllnd cOlllplele Nlllcdy 111 IllW,
-19-
J, Plllllllln'l Clllllplnhlllli Illillllllllnlly II t11111111~IlK ncllll" t11\l11llld "I) 11I1Uj1l1J~
cJlllhhlJl'
4, 'J111l1l1ll0UIII nl IIIUU III Ihls IICllulI II II ~UIII which IK Nlldlly 1IliCIl,111111Ublll,
~, OSIIIIIl clllllpllallcll with Il~ llbllllllllllll~ ulltlllr Ihll OLA AIlI'II.CIllIlIII,
6. 'J1lcN Iii 1I11 pn:1IIl1I1 dUlIllur Ihul OSI wllllulIIllhu OLA AIII'CCIIICIII, whlllhur by
Augull I~, 1996 or ulhurwlllll,
7. DSI hllS I'CClll\lcd "Cure NUlku~" fllllll OLA ml~llIl! ullly lwu 1~~Ulll,
8, 'J11u CUi'll IIUllclll relnlu ullly \0 lhc "CUIll" Ill' U hucklull uf dUCUIllCUl1i yullO be
1iC1l11l100 nud 11111 IllIIely pick uplllld NIUI1l uf dllCUlIIlllll~ I'nJlII DLA,
<J, DSI hu~ Illllllly N~pUlldcd tu Ihll CUi'll NUlkc~.
10, DLA hnK IlIdlcntcd It~ ~UllllilCllulI wllh PSI'~ re~pulI~llIUlhll f,:UN NOlkcl.
II. DLA nppl'Ovul would IlC J'C{juINd IlIurdllr Ihlll nllY lnllllfcr llr the OLA
Agl'Cl!l1Illlll blllllWful.
12. DLA hllS lI11vcr llPPlll\lcd llllY tnllufcr Uflhu DLA Agrcullllllll,
13, Plllhulff ADS hn~ ullcleulI IllIlId~ with rcSJlCCtto lhc ~Jlccll1c ~ubjcctllllll\l:r of
thll nctloll,
14, Pllllllllf'rs III1c1culI hnllds IlIcludc, bUIlli'll lI11tlllllltcd tll: (n) CUlIIIIIUlllcllIIIIg
with and/or hlrllllllhc Pn:sldlllll of DSI RlllCllllolI Corporulloll, Ollll Plllcr CllllfllllOj (b)
commulllcllllng with lllld/or hhlllg Mr, Cllllfrlllo dll~pltll kllowlcdllU of 11 1l01l-comJX.'1u
IIIll'Cl!Jllenl cntcred huo by Cllllfnllll with DSI Records Corponltlolli (c) NfusllllllO tUllder nil
DSI Records Corpomlloll's equlPlllcllllllld conlrncllllnlllnnls UJlOII propur demnnd on July
-20-
12, 1996 or rollowln" (d) plcklnll up II blllch or dUCUII\CnlllO blllll:ll1mcd III OLA on Prlday I
July 12, 1996 aftllr bllhlM Ilxpllcllly wJ\l11lI:d nOllo do 110 by OSll\!pl\!lunlllllvcs <GIl Bxhlblt
"0" hel\!lUlI (e) chllnghlM IIIl1slur PIIS5WOrds nccll5Kllry for DSllO accuu lhc DS1/DLA
cOlllpull!r lYllullH and (l) lakllllllllhcr llcllllns dll~lancd to fnnlruhl OSl's IIcceSK 10 lhll
DSI/OLA cOlllpUll!r syslelll.
I~, 'nlc Pllrtles' negollllllon~ I\!hlllllg 10 llny p()~slble ~tock PUrchllse allJ1:elllelll
WUI\! III1Ver t1l1l1l1zed lllld no enroreCllblu OgI'CClIIlllIl wos u\ll!r l'l!lIchcd bclWlII!1I lhu partlus.
16. PJlllllllff olherwlse fllllcd 10 IIl\llsfy cOlldltlolls pl\!COOllIIllO the fonllllllollof lln
enforceable lIgJ1:elllllnl by Il/fcI' aI/a rlllllnll 01' refusing 10 produce 11 dllt1nlll\le wrllllln
agJ1:elllenl bllfore July ~, 1996 liS l\!qulNd by OSlo
17, Plllhnlff cOllllnucd 10 dllllllllld llddltlolllll concussions, lId\lllllCe lIew propo5llls,
llnd allelllpllo Illlpose lIddlllollollenlls liner JUlie 28, 1996 uII11I DSl Clllldudcd thaI no \lIable
llgJ1:elllenl bclWlII!n lhe pllrtle~ would e\ler be ~tl'llck.
18. Such negollllllolls wcre for lhe llurchoSl! IInd IIl\le of lllllhu sluck of DSl
Relenllon Corpomlloll, ruthllr llllln for the PUrchllSl! IUld 511le of DS1's ll~sels, such liS lhu
DLA AgJ1:elllelll Itself,
19. 011 July 12, 1996 Mr, HCllnlllolltlcd ADS In writing lhlll (I) DSl WllS
lennlnallllg 1l1l1lSpects of DS1's relllllonshlp Wllh ADS; (II) OSI WllS nol IlIlureslcd III
pursuing any further dl5CU~slolls Wllh ADS regardlllg llllY PUrchllse of DS1's slock, llSselS,
conlracls or olhel)Ylsei llnd (III) lhal DSl delllllndcd the relunl of 1111 equlplllent owned by
-21-
OSI HllllllllllllI CurpUllIllllll ur II~ ~uhcolllmclur, Pili RC(Ul\lN Cllll11IIllII11Il. AttllchCtI hun:lll
lI11d Ullldl!1I PUI1 hllr\'tll'lI~ l!xhlhh "C" I~ Ihc n:I'llrcllcCtI July 12, II)I}(I cllrrc~p()l\dIlIICII,
20, 11111111111'1' lIud OSI did I.'lIlcl' 1I11ll IIllg11111l111l11~ which Iudlldlld dl~CII~~loll uf lillUll!
IIl'nlllllllUllllll whcrehy ADS WllllhlllCrlilllu thc sllJvlcc~ I\''llllrl.'d lI11dcr Ihll PJ..A AIII'CCllIlllll,
uud IImllllll ccrtlllu dchlN llwcd hI Ihl111 pl1l11cN hy DSI.
21, Thc IIcgllllllllllllS IlIdlldcd dlsclIsNhlllol' lhc flllYIIIClI1 hy PIIIIIIIII'I'1lI OSloI'
rollllhly I'1lI1y IlCI'CCIII (oH)')(,) ul'lhc UCI fll11111S gllllcllllcd PUI'MIUIII llllhll DLA AllrecUlC1I1.
22, Morellvcl', oUlhc lI'"tcntLlllllol' Jllly 'I, Il)lJ(l, ADS, IIncr lI11glccllullllI cIIlllply
whh OSI'~ cOlldhlolllhlll ADS' flnlflosul he J\'dllcCtIIU wrilllll!, 1'11111111,.,. IhcII, for lhc Ilrsl
llmll, propllscd IIml Mr, Hcunt IlCl'sollully udvuucc $125,IIlXI 01' his OWIIIIIIIIICY lu 1'111111I11'1',
ill urdllr thUl 1'111111111'1' huve slIflklclIIlIllCl1l1ll1g <:upilullo IJIlI<:ccd,
23, This pmposul Is l'CIlCCICd III Ihc Icllcr lll' IIIICIII dcHvcr\'t1 by Plullllll'f'~
repre~III111I\lllS 10 OSI 011 Jllly 9, 1996, A In/c ulld cOl'rect copy of Plullllll'f'~ Illlter of Illtelll
Is llltllchcd hcreto lIud lIlud'~ II pllrt hCr\'tll' us Elthlhll "8,"
24, No repl'l.'scIIIUllvc III' OSI cvcr excculCtlthc Icltcr of IIIICIll,
25, Doll HCllnl, 1I111lCllIIlI' of DSI, rel'lIWIIO CXCCllle the Iclter of Illleul Oil July 9,
1996,
26, Gilly sC(unly III Ihc 1I11l0Ulll III' III IIllISI $850,000 would be suftlc\ellllo
compcnHllle DSlln the cvelllUII IIIJllncllolI Is llIlflll)vldcntly lllltcn:d,
27, l'pon Infonlllltloll IIl1d bellcf, PIIII III II.,. Is lIotable to postlldequllle security or
bolld as r\!{Julred by Pa,R,CI\I,P, 1531(b),
-22-
NICW Mi\'I"I'I':lt IN Tim Nr\'I'LJIU: (W r\ COLJN'I'lo:JtCI.r\lM
:.ru.ll'illlLJll.JlS'1'mU'I~IU;Nf.:I~ .WiTII. ....ON'l'I\Af.:TlIALJU::LA'l'ID.NH
I. 1>11I1I1I1IT's (\lIl1plllllll I'cdlcS Ih~ ~XISll'lIl'~ uf II ClII1II11CI IlClWCCII lJ\!fimdlllll,
Osl RUICllllulI Cl)I'J~lnlllllll ("USI") 1111" IlIc n~fcllsc '.A)gl~lks AglllI~Y ("DtA"), s~,
Pllllrlll""'~ Cllll1pllllllllll Exhlhlt .. A."
2, Jlllllllllff'~ CUIII pi II 1111 II Iso I\'dl~s llrllt A"vIIIIl'cd DIIIII Suhlllull~, IIlC, "I~ IIlu
~uc~e~~llr IIl1d 1~lclllllcreM 1111" IIsslglICC Ill' ADS, Advllllccd DIIIII SIlJIIIIIlII~, II JllllIlI~ylvlIlIlll
Pllrtllurshlp," S~I lllllllllltrs Clllllplllllll 1 2,
3, The IIV~l1nellls of Ihls cOlllllcrclllhn III\.' dh\~<:tcd I,) Ad\lllllccd Dlltll SOllllloll~,
Inc, (lu thc CXIClIllh~ SIIII1C II1I1Y hc dcclI1e" Ihc SIlCl'CSSllI' In IIIICI\.'S1 Ill' 1I~~IIlIICC of Ad\lllnccd
DIIIII SIlIIlIIIlII~, II Jl~lIl1sylvlIlIllI PII11I1crshlp). A""lIlolllllly, lllc IIVCI1I1CIIIS III' Ihl~
coulllcrcllllll1 lire dlrc~led 10 IlIe plll1l1Crs of Altvlln<:c" 1)11111 Solllllon~, Upllll Infol1l1l1llon IInd
belief Rick EsdtllllWnld 1111" PClcr Chcu\I Illlll , III Ihclr IndivldulIl Cllplldllc~, As did Plnhlllft"~
IlIlhclr COll1plllllll, l~lIh Ihc pI1l1n~r:ihlp IIl1d Ihc <:01]Jo11l111l11 will bc I'ef'~rred 10 hllrelnn~
sllllply "ADS" or "l'llIllulffs,"
4, ADS pnJ\lldcd cCI1111n <111111 clllry IInd sCllnlllllg scrvlcc~ on hchlllf Ill' OSl In
pcrfonnnncl: of mil's IIgrccll1cnl wllh Ihc I)~fcnse u11!Islks Agcllcy ("DLA"),
5, ADS IlIlclIllonnlly IlIId II1I11erlnlly illlerf~l\'d wllh OSl's IlCrfonttllncc of lis
obllllllllolls 10 DLA on or IIhmll Jllly 12, 19%, in IlIc follllwing pill1kulllrs: (II) ADS picked
up II blllch of docum~nls to be s<:nnncd III OLA IIftcr hclng cxplldlly IIdvlscd not 10 do w by
DSI repre~Cnlllll\lcs (~ Exhlbll "0"); nnd (ll) ADS chllngcd Ihe IIlIlSlcr pllsswords ncce~sllry
-23-
for OSI \I) accell tho OSIIOLA COll1lluter ayatem upon IUnllna of OSl'a Inlent \I) terminate
AOS' role In Ihe perfOrll1W1Ce of the conlracl,
6. The llcllon lllkcn by ADS wcrc dcslgned Ill, IInd did ClIU5e dllmngelo DSIIIl
lite follllwlnll pnrdculllrs: (11) ccrlnlll dllll! which hlld been ~cnl1lw<l WII8 rcnderf<l Inllcceulble
10 OSl by ADS' acllons llnd mUM now bu rcocllnnwnl DSI's cXllCnliCi IInd (b) DSllllcurred
Ilanll1cant overtlllle for hs own employees alld lholiC of Its replllccmcnl subcllntraclor o\lcr
lite weekend of July 13 and 14 so lhlll DSI could llCrfllrlll the DI.A allrccmelll whhoUl
Interrupllon,
7, The aCllons !.aken by ADS Involve the UIiC of wrongful mCllIU, llnd were
olherwl511 llIken whhout pri\lilege or jusllOclIllon,
WHEREFORE, Defendant, countcr.c1llhn Pllllntlff OSI t~elenlloll Corporallon,
demands jUdgemenlln its 1'11\101' nnd allllln~l Plllintlff, counh:r.chllm Oefendllnl Advanced
Data Soludon., Inc. WId the parlncrs of Its predecessor, Ad\lIlIlCf<l 011111 Solutions, Rick
E.5chenwald WId Peler Cheu\lront, In an llll10Unl excwllng Ihls Courl's mllndalory lIrbll,rallon
IItreshold,
TORTIOUS INTERFERENCE WITH C01STRAC'J'UAL RELATIONS
8. DSI Retention Corporallon Is pllrty 1011 certain shnreholder's agreement
containing a noncompetilion provision with Its former Presldenl, Mr, Pelcr Callfllno,
9. Upon Informlltlonllnd belief, ADS was llWllre or llnd had knowledgc of lite
eltls\ence of this agreement lItllllllllllerlalllmes,
-24-
10, AI ADS. own complalntlUltel, ADS and OSI arc "compotllol'l" In tII. flied
of compular ICI/lnlnland Imllllnl, bI ADS Complaint al , 5.
II, AOS Intentlolllllly lInd willfully aided and abclled a violation of Ih. provl.lonl
of thl. noncompcuuon qreemcnl bclwcell 051 and Mr, Callfllllo by communlcatlnl wllh him
and, upon Informallon and bellcf, providing him certain cOll1llCnllllllon,
12, AOS' communlclltlon wllh and/or compcnlllltloll of Mr, Callfallo In derulallon
of the nont;IJmpctlllon Illreemclll and WllS dcsllned to secure competitive IIdvanlale for ADS
II qalnstthll Inlcre.1 of DS I,
13, In communlcatlnl willi andlor compclllllltlnl Mr. Callfallo In demlallon of the
obllpllon.lmposed by the noncompetlllon alreemcnl, ADS cmployed wrongful mean'lIId
acted wlthoul any lawful jusllllclltlon or prlvllcge,
14, ADS'. communication wllh and/or COll1pcnlllltlon of Mr. Califano, II IIIlI forth
above, was designed 10, and did resullln dllmBic \'0 051,
WHEREFORE, Ocfcndanl, counter-claim Plalnllff 051 Rctenlion Corporation,
dcmlllld. Judgemcntln lis fa\lor and agalnsl Plaintiff, counter-clalln Dcfendanl Advanced
Data Solullons, (nc, and the partncrs of 11$ predecessor, Ad\lanced Oata Solullon., Rick
Eichenwald llIld Pcter Cheuvronl, In an amount cxceedlng tills Court's mandatoI)' arbitration
thl'ClhoLd,
.25.
~
I, CorIIIanoe Haun, hereby verify \hall 1m lIIe Pre.ldent of OSJ RatellUon
Corponlion IIId am aulhorir.ed to mako 11I11 VerlflcaOon on III behalf and hereby lllte \hat
the facta lit forlllln the forelOl11J documenl Ire trUe and correal to the be.t of my
Information, knowledae and belief, I undcnlalld thll falae IIIll.ementa herein 111 mille
lubJectto the penalUea of 18 PI, C,S.A. 149004 rel.Onlto unlworn vcrlflcatlon to
aulhoriliea.
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081 R,oord. R.I.nllon Oorporallon bV ADS Ad\lancad 0.11 Solullon.
The purpoIG 01 Ihle dooul1lGnlle 10 Pro\lOll1 OBI flrlcO/lls Rotonlllm OlllpOlllllo/l and II.
0"'0011' or ogonle Iro/11 onlo,'ng 11110 ony nO[lollollolls rOUflrdlnl/ 11m eolo 0' nfll and /I/1Y 01
lie aellole onoo Ihle documont hs el[lnod and O/(OCUIIllI,
The lIubelonoo 10 Iho 1I0le 0' 061 Records Ilolonllonlo Advoncod 1>11111 flllhlthmllla 011
'ollowll:
l. AS/Jumo 011 oonlroole:
0, DLA Imaging conlrool. N 61"3100,00'/),00011
b, PFMA Imaging Inelollollon r,onlmcl
tz, Alleumo outelondlng Dobl 0' OBI ~locord 11010nlloll Corp, 11I1 'OJ/OWll:
o. ASK Tochnolo[lloe $4,687,00
b, Walormork $1,016,00
0, GOS $61,18:.1,0:1
d, ORB $9,7:1:2.0:1
e. TeklronlH Prlnlor $11,000,00
r, Jade Pllllnol $tI,006,00
O. Wolt $1,000,00
h, NSG $10,000,00
I. AOS (prior OBI purChoeo!: $ I 4,260.00
j, AOS (work In progroee 6 28-) S 36,600,OQ
10101 $l611,IJO;.'l,()4
3, Don Hearne will In'ueo ADS Ad\lnncod 011111 floll/llons wllh $126,000,00 /n
operallng oepllolto bo ropold I1llho roto 01 % llVor monlhll bog/nn/ng
Sepft,mber 1996.
4. purohoee price 'or OBI Aor:ords ROlonllon CO/flornlllln Is hRsod on 'orty 110roonl
(40%) 0' Iho nol prolil (lonomlod 'rom tho f.lLA conlrocl NSP3100.00.D.0006
paid o\lor n IllHly (60) month porlod bOolnlllno Boplomlmr 1000,
· The 40% nel profll Is bosod on Iho oonlrnol omoulIl 0' $860,000,00
yonrly any omounl o\lor $850,000,00 1'1111 bo flllld on 11 20% nol prolil
bell/II, Tho oddlllonoll1mounl will bo pnynblo by Fobrllnry Iho following
yonr,
· Tho olloched documonts "AI> oulllno ovorhond cosls Iho. will dolerm/no
Iho nol pro'" 10 bo pold 10 Cllnlllonr:o Honrns 1m tho porchnso of DSI
Reoorde Aolonllon Corporollon,
188' LlrUT Pika. LnIlCcnrur'/''''''flYIII''''/(/ 11"'1/.0/1) SH/.S;04 ((/1<(""158/'/089
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7. D4nlcd, Allcr rllllSllllllhh! hl\lllHlllIllllun, AlJti I~ wlthlllulnlimllllllunur
knowlc:dKI! rUKlIrdlnlllhll lrulh of lhl~ II\1Crllwnl Ill\lllhu ~1I1ll11 Is ,tllnllld und proof dl!llllllldud ul
Irllllll' Illuh!rlulllnd rlllll\lllnl.
8, Dllnlcd, Allcl' rCII~llnllhlc III\Illsll~llllun, ADS Is wlthllllllnlimllllllon or
knowllldllC rcgurdlnlllhll Irlllh 'If Ihls II\1Cl'lIlllnl IInd thc KlIlllll IH dllnlud Ilnd proof dUllllllldcd 111
Irlllllf lIlulcl'lulllnd I'ClllVilnl.
'I. Denlcd, Allcl' rClIsllIIilblc hl\lC~llllilllrlll, ADS I~ wlthulltlnlimlllllloll or
knowllldllC rCllurdlnlllhll 1l'1I1h of this l\\Illnllenl IInd thc Sillllll Is dllllllld und proof dUllllllldcd 111
lrlllllf Illlllcrllllllnd rcleVilnl.
10, Dcnlcd, Allcr rCilsonublc In\l\!~lll!nllun, ADS I~ wllhollllnlorlllllllon or
knowledlle rCllllrdll1llthll trulh of Ihls l\vcrlllcntllnd Ihc SIIIllC Is dcnllld und proof delllullded 111
lrlullf mlllerllllllnd rclevlln(.
II, Dllnled ilS stillcd, Th\! DLA Agreelllcnt spcllk~ fill' Itslllf, By wuy of further
responsc, upon InfonlHlllon IInd belief, lhc ill!reCIllCnl cnlcrcd Inlo hy ADS IInd Dlllcndnlll did
nol rcqulre OLA IIpprovill.
12, Dcnled, Allcr rCilsllnllblc In\ll~stlgllllon, ADS I~ Wllhoullnformutloll or
knowlcdlle rellllrdlnlllhc Irlllh uflhls n\lcrlncnl ilnd Ih\! slImc Is dcnled ilnd proof delllunded lit
trlllllf lIluterlal und rclcvun(.
13, Dcnlcd. ADS IHls uclcd with c1eiln hilllds,
14. Dcnled, ADS spccllknlly denle~ (n) Improperly con1l11unlclIlInll with PCler
Cnllfl1l1o, or hlrlnllPclcr CulllllllO, (b) Impropcrly cOlll/llllnlcnllnll wllh Pclcr CullfllllO. or
hlrlnlll'lller Cullfll110 with knowlcdllllof IInlln-compclc nllrcclllcnt, with which ADS hus
- 2 -
1I0vor bIIol1 prellClIlcd 1111111ho 101'111. uf which AUIi I. lIull;lIl1l1l11r, (e) rcl\i.lnK 10 IIlIIely
londor IJSI Record. oljUlplllellllllld IlIlllurlllllu lit (d) hllprupllrly rlllrluvlllll dOIlUIllUIlI. frolll
DLA Ull Jul)' 12, 1991l~ (e) Chllllllllllllllll.ler pmwllrds Ilelldlld by DSllu ncceHU the DSllm.A
cUlllpuler Hy.lemllllld (I) IlIkhlllolher llCllollH dcullllllld lu frUulrtllc mll'H IIcceHU 1u lhe
DSIIPLA cUlllputer syutem.
By \\Ill)' Ill' fUl'lhllr rllupllllsll, ADS hils Ilul rlllllllllld l'lllllr cllllrllllo Illlln)' CllllllCllY, 1101'
hllH AOS becn prllsclllcd with 11 cupy uf 1111)' \lulld IInd cnfi.lrcllllbh: llulI-competltlull llllreellllllll
which would reslrlcl comlllulllcllllllllS with or llmploYlllcll1 ur Mr. ClllllulIO should ADS
chuullll 10 do .0, By WllY uf lurthllr rllKpOnUll, ADS lull)' coollcrlllcd with Oelimdlllll III
relul'lllllll equlpmelll ulld Illlllcrlllls 10 It llll JuJ)' 12, 11)96 dc~plte Ollfelldlllll'u Impropcr lllld
ubrupllermlnulloll uf Ihe llllrcclllclll blllWCllll thc pllrtlllU, AIllo t1IllC did ADS chunllc Ihe
pllHHword un Ihc COlllpulcr S)'Hlllllllllld UIIlO t1llle did ADS dllclIlle to Ill\le Deli:lldlllll Ihe
pll.Hword to Ihe syutelll, Furlhllr, thc doculIlelllu were relrlll\llld 011 Jul)' 12 frolll DLA ollly
liner recel\lhl1lllUlhorl1.ll1101l frolll POllllld Ilcllrl1, B)' wU)' of furlher responue, AOS pro\llded
more lls.l.lance 10 Defelldunt 011 July 12 Ihlln wuu IClllllI)' required of II.
IS. Dllllled, A \lulld nnd llllli.lrccllble ullrellmelll Wllll elllered 11110 b)' Ihe plude..
16. Dllllled, No such cOlldltloll Ilrllcedlllll cxlsted. An Orallll!,reemenl WI1S rUllchud
und Ihepnrtle. were In the proccsu of pcrfol'll1ullce of suld llllreemenl Whllll 11 wrltlnll
Inscribing Ihe tllrms llllrelld 10 WllS druncd,
17, Denied, No uddltlonultllrllls wcru propu8ed b)' ADS llnCr June 2B,
lB. Dllnled, The llgrecmcnl WllS for Ihe purchllllll of llSllIlls, nol slock.
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19, DOllied, Mr, l'leurn did 1I1l1114nd Iho hiller lIUIIl/hed /Is l!llhlbll"C" 10 Ihe
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AIIswar, I!llhlbll"C" Will II I14lf'lI4r\l11l1l 1I1111mpl III IIvllld porfllrflllllll/o 1111 1111 1I1lreOfllalll
properly IIllIl previously I!lIlcrl!d Imo by lhc JlortlcH. Uy WilY Ill' .\trlher reHpoIlHO, the
I',:
document Ipllllkl for IIHeM.
20, Admllled. Uy woy Ill' lurlher resJlllllHll, 1111 IIllrllllll1elll Will reachod,
21, Admllll!d. lly woy Ill' lUl1hllr rCiJlIlIIHC, 1111 Ullrllell1elll wos rl!lIehcd,
22, Dellled, This (llrnl wos llllrlllld III by (hI! JlllrllcH Jlrlllr to July 'I, 1996.
"
23, Ollllll!d, The lellcr Ill' hlllllll WOS II wrltlell doeUlllellllltlllllllf Ibl! terms IIllrl!l!1l
10 prevlousl)' by lhc 1'lll1les,
24, Admllled,
25, Dl!nled liS Stllh:d, Ills IIdllllttlld lbul Mr, Illlurn hllS 1101 611llled lhe lulter of
Intellt 011 July 9 or lit OilY Iltl'.~r lime,
26, Dl!lIled. The upproprlllte 1I11l0Unlllf Ihll bOlld would be fur l&:s6 th411 $850,000
IIlld would be limited, In1n lIllil, 10 pOh:ntlllllllSI prollts Ilf Derelldlllll,
27, Dellled, ADS 16 prepllred 10 pllslll bOlld III ullllmolllllllpproprlate 10 Ihls
matter,
II. REPLY TO NEW MAlTER IN TIlE NATURE OF A COl)NTERCLAIM
:TORTIOUS INTERFERENCE WITH CO~TRACTUAt. RELATIONS
I, Admitted,
2, Admiul!d,
3. Dl!lIled. Thlsovennl!nt Sl!llI forth 0 1CllllI concluslolllo which no response IH
rl!qulred,
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... Admlllod,
5. Dllllllld, Al>~ ~ptllllnllully dUlllll~ (II) Ihullt Illckud up dOCUIIIVlllN Unllr bllhlll
1"~lruclIld 110110 do Nlll (b) Ihlllll uhulllllllllhv /lll~~words ll11vdvd by OSllllnccv~~ Ihll
Osl/DLA cOIII/llllvr ~y~h:lII,
By way of 1\1I'lhur re~poIlNll, ADS lully cooperlltcd with Dllfi:ndllnl In I'lllurnhlll
equlplllllnl aud mlllcrlulN 10 II 011 July 12, 11)96 dUNI1IIll Dllli:ndllnl'N Improper llud llbrupl
lurmlnllllon of Ihe ullrellnllHlI hlllwven thll /lllrllcN, AI no Ilmu did ADS chunlle lhu PUHsWOrd
onlhll com pUler sYNlem llnd III no lime did ADS dccllllll 10 HI\lll Dllli:ndunllhe pIIHNword III
lhu KYNlelll, Furlhur, thv dOCUIIIUlllH wcre retrlll\IC,j Ill) July 12 frum DLA only liner re:cul\lhlll
lluthorl1Jltloll from Donald He:llm, lly WilY Ill' lurlhcr ruNponSll. ADS pro\llded more IIHNlslllnce:
to Oeli:ndalll on JUly 12 thun WIIS lelllllly rcqulred ot'lI,
6. Denied, Any hllrm III DSI WlIS clluscd by OSl's own mlllfellNlInce Ill'
ml6feaHance. OSI failed 10 requllNlthe (lllsswordN frolll ADS and lurthur relu511d llH61slance
from ADS In Irnnslerrlnll cqulpmenl and IIIlll11rlaIH, lly way of further response. lIfillr
reallOnable In\leHllllallon, ADS Is wllhoullnlorlllllllon or knowledlle rellllrdlnlllhe Irulh of Ihe:
re:III11lnlnll portloll6 of Ihls llvurlllenl IInd the 6ame 16 denied and proof demllnded at Irlal If
materlllllllld relllVllnl,
7. Denied, The aCllon6 of ADS wure enllrely proper and approprlllle.
WHEREFORE, I'lalnllO'llnd Counlurclnlm Oefendanl requesls thllt thlH Counterulalm
be dismissed with prejudice and Ihallhey be IIwllrdlld e061s of defending the clallll.
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Ill. 1()IJ'J'IQUS I~Te:BFEIIENCE WI"'" CO~1'RAC1'U~L B!1;LATIONIi
H, Denied, Aller IlII1Nllllllhh: IIl\leNlhllltllln, AnN IN wllhllUI Inlill'llllllloll or
knowludllc rllllllrdlnlllhe Iruth Ill' Ihls 1I\111rlllenl lllld the SIIIlIC Is denlell llnll rroof dctlllllldcd III
11'111111' nlllturlnllllul rUlll\lllnl. lIy WilY Ill' I\lrlher rllNllIlnNC, A\Jti hilS ne\IUr liCun such lln
1ll\rUUIllllnlllll1l 1I0nll Is llllllChcll 10 IJUI ('1l1l11111rclllllll,
I), [)lll1l11ll, ADS hilS l111vur NllCI1 Nuch 1111 IIlll'Cllllllll1l11llll 1I0llC Is nllllllhcd 10 Ihc
Coulllelllluhll,
10, AlIlllllllld,
II. Ocnllld, ADS hllN 1101 nctlld Improperly lllld hllS 1101 provldcd Mr, Cnlllilllo wllh
llllY COlllpclllSlllloll,
12. Dellled. ADS hilS Illllllctud hllpropllrly llnd hilS 1101 pro\lldcd Mr. Cllllfllno Wllh
llllY COlllpullslltlon. By WilY of furthcr respOIlNU. 1111 comlllunlcllllons with Mr, ClIllfllno wcre
1I111CusliCd wllh DSlllnll wurc Illllll11 for lhc IlUrpose of mccIlllglhc cOlltrllctulll obllllllllons
undcr Ihc DLA Al\rclllllcnl,
13. Dcnlcd, ADS hllS 1l01llCtcll Impropcrly, hllS nOllllllploycll Mr, Cllllfnno I\IId
hlU 1101 pro\lldcd Mr, Cullfllno with llny cOlllpllnslllloll. By WllY of furthcr rcsponse, ADS hilS
nC\lcr sccn such lln IIgrcclllcnlllnll nonc Is IIllllchcd 10 Ihe Counlcrclllllll. Aftcr rUl180nllble
In\lcsllgllllon, ADS hM no rCMon 10 bcllevclhlll Mr. Cllllfllno hilS vlollllcd Ihc Iumlll of his
IIgreclllcnl, If such IIgreclllcnl exists, IInd Ihc IlWllC Is dcnied I\IId proof dClllllUdcd lit 11'1111 If
Illllterllllllnd rclevllUl,
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14, Dllnled, Aller 11I1111U1I1Ihlu hlVl/Ntllllltloll, AD!I IN without IIIIimlllltlllllllr
kllowledllll rUllprdhllllhu lrulh of IhlN IIVllI'll\l:n1 Plld Ihu SIIIlIP Is dunlcld alld proof dellllllldN at
Irlpllf 11I11lerlal nlld rcluvalll,
WIIl!IU!FOIU!, 1'111111I111' IIl1d ('ounh:rcllllm I>uli:lldllnl rcqullsls IhlltlhlN COUIIIIII'l:lllhll
be dlNIllINlICd wllh prujudlclllllld lhal lhcy bll IIwllnll!d COSIN uf dllli:lldhlH Ihll clallll,
IV. NI~W MA'I"lill
I~, AOS did Illltlnlcl'li:rl! with DSI 's IICCl!~S hI llljull1ll111lll, 1l111111rlllls IIl1d pcrsonllel
followhlH OSI's wronHI\IIIllrll111l1l1lun uf Ihlllll.!rCllll1CIII hlllWCl!lllhllpllrllc~,
16, subscqullntlo ADS IllllrnlllH thlll OSI hlld Icrll1llllll11d Its pl!.rCl!l1Icnt with ADS,
ADS did not Chlllll!.l! the plls~word Ill!lldlld by OSI 10 IICCCS~ lhl! OSIIlJLA COlli pUler sy~lelll.
17, ADS hilS nOllll1lpJOYlld I'l!lllr ClllllilllO.
I H, ADS hll~ 1101 cOl1lpenSlIled Plllcr Culllilllll Ii.lr llny ~l!r\llccs rlllldl!rl!d 10 ADS,
19, Prior to DSI'~ lllrmlnllllon OflhclIl.!rCCIlll!nl belwllen Illlnd ADS, ADS hllS not
consultcd with Pclcr cllllfllllO lor IId\llce olhllr Ihlln nllce~sllry to perforlll Nllr\llccs I'elnlc:d 10
Ihc OLA Agrcemcnt,
20, OSI hllS nl!vcr pro\llded 10 ADS 11 copy of IIny nOli. competition ollreemcnt
which mllY exlsl belweell OSI und Pliler ClIllfano,
2 J. Rick E~chellwald and PCIl! ChCU\lrlllllllrC Ilotnllll!lld purtles 10 lhls II11gll1lon,
22, DSl's coulllerclllhlls IIrc burl'cd by Ihe doclrlnu of wlllvcr,
23, OSl's counlerclllll1ls nrll bl1l'rlld by Ihe doctrlnc of promls~ory estoppel.
24. DSI follcd 10 mltlglltu Its allcHed losses by flllllng 10 timely requestlhc
pl18sword froll! ADS,
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SubjCOllo Ihlll'DllIllllul or Illl'u, C,Il, WJ04, rlllUlhllllO unlworn l'IIIIUlcutlo/l 10 lIulhorl.
lilli, I hllreby lIul1ll'y Ihullllllllhll l'ru6ldllnl und ChillI' EXIICUllvll alllellr or ADS Advunced
Oulll Solutlonl, Inll., und U6 6ullh huVll rlllld lhc rllrlllllllnll dllcumlllllllnd lhnllhll liU:IN 111110111\
Ihereln uro Itue und cllrrllclllllhu bllNlllf my kllllWlllllllll, Illfllrlllnllun Dud hilI hI 1',
~~~
DUledl Novllmber!!: 1996
Ai:'\? .~<'HIFNIV~.ar:
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ADS, AOVANCHD DATA
SOLUTIONS, INC"
Plaintiff
IN TIIB COURT or COMMON I.LBAS
OP CUMBERLAND COUNTY,
PElNN5YLVANIA
No, 96-4478 equity Term Civil 1996
y,
DSl RlITnN'TlON CORPORATION,
Defendant
CIVIL ACrlON
pSI RETRNTlON q>RPOllATION'S RPPLY TO NEW MATl'ER TO COUN'mRC'LAIM
Defendant OSI RelCllllOll CorporatlOll hereby make I the followlna Reply \0 New
Matter III pleaded by Plaintiff In relponac to DSI Retention Corporatlon'l Counterclllm,
llatlnalll IUpport thereof III followl:
15, Denied, The I\lermenll of'15 collllllute leall conclullons requlrlna no
l"CIponllve pleadlna, To the clltentthe I\lermenll mlY be dccmed Ivermenll of fact, they II'll
denied, To \he contrary, ADS did In\Crfere with OSI'IIICCCII \0 equipment, ma\Crlallllld
personnel followlnathe \Crmlnatlon of the IlIrcement belwccn thc partlel. AOS'I
CharaclerlzaUOII of IlIld \Crmlnalloll as 'wrongful" II denied as I legal conclulion requlrlna
no relponac,
16, Denied, To the contrary, ADS did, In fact, chlnae Ihe password,
17, Denied, Pollowlna reasonable In\lestlllatlon, OSI Retention Corporation lacks
Information lufllclent \0 form I belief III the truth of the avermenls In , 17, nnd the lI/lIIle II'll
therefore denied and proof dellllJlded.
18, Denied, Pollowlnll reasonllble In\lcstlllatlon, OSI Retenllon Corporation lacks
InformltlOll lufllclent \0 form I belief III the truth of the averments In '18, IIld \he lI/lIIle II'll
\herefol'll denied IIld proof demlllded,
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19, Denied, Followlni rcuonable In\le.lllallon, D51 Rclcnuon COrporatlOll tall'"
Informallon .uftlclent Lo form a belief IS Ihe truth of Ihe averlllenl.ln '19, and the IIImell'O
therefore denied and proof demanded.
20, Admlll.ed, Ily way of further answer, however, upolllnformallon and belief,
ADS had r,.nuwledIlC Ihat Mr, Callfllno WaJlllllllrty Lo such llIlql'CemCIll,
21. The a\lcrlllenlsof '21 conslhute legal concluslOllI requiring no relpO/1llvll
plcadlnll. To IIle coolral'Y, Messrs, Eshellwald wId Cheu\lrolll are Illlrtners In a plrtnershlp
formerly lnidlnlllnd dolnll buslncss as ADS, which Illlrlner~hlp WIIS apl>arenlly Incorporated
subl5t(juent to the termination uf DSl's relationship with ADS, AIllJ\ times IlCrdncnt Lo 1I11s
IItlEatlOll, OSI dealt willi ADS liS llllllrtnershlp, and consequently dalt with Mr. EshenwaJd
and Mr. Chcuvront indl\lldually, llnd nOllhroullh any corporlllc formal.
22. Denied, The a\lermelll. of '22 conslltute leglll conclusions requlrlna no
responsl\le pleading.
23. Denied, TIle lI\1ernlCnlS of '23 constitute leglll conclusions requlrlna no
responsi\lc pleading,
24. Denied. The lI\1erments of '24 cOlIslitule leglll conclusions requiring no
responsl\lc pleadlnll. To 1I1e extent the averments of '24 lire deellled lI\1erlllenlS of fllCl, they
are denied IU follows, Ills denied Ihlll DSI failed 10 timely requesl the plIssword from ADS,
To the contrary, DSI demanded the IdclIlily of Ihe new pllssword on lhe morning of July 13,
1996, the day following Ihe termlnlllioll of the agreemcnl belween Ihe parties, and,
presumably, the day after lIu~ plI5sword was chllnlled by ADS,
25. Denied. The IIvennenlS of '25 cOllslitute leglll conclusions requiring no
responsl\le pleading, To Ihe extenl Ihe a\lerments of '25 are deellled averments of fllCl, they
I.
CfJlTIFICA1'E or SERVICE
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I, MarIl: D. Bradahaw, Elqull"ll, htrcby certify lhllll am 11I1. day lIltrvlnll cop~ of ""
tonaolna document UpclIllhe penon(.) IIld In Ihe manncr lndlealed below, whlollllll'Ylco
Md.ft,,1he requlremcnl' of Ihc I'cnn'ylvanla RulCl!)f Civil Proc:olure, by hand delivery ..
follow.t
Alan R, Boynton, Ir., Elqulre
McNCCI, WalllLCll & Nurick
100 Pine SlrCet
P.O, Boll 1166
Harrllbur., PA 17108-1166
~~
Mark D. Brad.haw
I' t:?~?L
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