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HomeMy WebLinkAbout96-05466 i 9 .. ~ ,;:',:" H C1 ~ .... > ~ ~ ~ ~ ~ ~ 0 - ~ ~ ~ "- -- ~ cJ .., 0 ~ &.1 ~ II't <f. a: <' ""',' , .,f-.,.... f."... ...,)1 (t, , i , ~l I C t'l'\ . '\ ~ , -. . ..t......'t..~;. '-~i .:;lb~ /'lol1J .0"," :I..~,.:'- ,. ..~ - ~ '.. I . o - " MEMO's financial transactions and deposits from its money order business (the "Agreement"). 8. The Agreement, effective August 1, 1995, required the Defendant to provide software maintenance, installation, testing, transportation, training, document conversion and upgrading of in-house computer operations. A copy of the Agreement is attached hereto as Exhibit "A" and is incorporated herein by reference. 9. Since the beginning of the Agreement, DS1 has been unable to collect, retain and display records of MEMO's transactions with its agents, and as a result DS1 has replaced the initial recommended software package with another package of software, however, the system has never operated in a fashion which would permit MEMO to obtain access to its records on any basis other than manually and has never operated as represented by the Defendant. 10. At all relevant times, OS1 knew that it was imperative for M!KO to have access to ita recorda for both business and regulatory reasons. J " 11. Plaintiff entered into the Agreement with the Defendant based upon Defendant's representations that its services and products were superior in the market place, fit for the purposes for which they were intended and for the specific applications in the industry; specifically, Defendant represented that the computer system was sufficient for MEMO's business of issuing money orders through its agents and for keeping records required in the issuance of such money orders, and Defendant further represented that it would provide competent technical support in the form of staff, hardware and software to assist Plaintiff in servicing its agents and money order customers. 12. At all relevant times, Defendant represented to Plaintiff that it had expertise in analyzing Plaintiff's and MEMO's business needs and in providing and maintaining a computer records system suited for MEMO's business. 13. In reliance upon Defendant's representations, Plaintiff executed the contract with Defendant. 14. PFHA and MEMO have expended considerable time. effort and money in an attetllpt to Nk. the COIIIlPUter syet.. function Prop4!rly. 4 '. (e) DSI began placing greater emphasis upon other contracts, releasing personnel from providing service to MEMO, providing decreasing amounts of technical support to MEMO which ultimately resulted in DSI failing to provide any service or support to MEMO. 17. On or about August 20, 1996, DSI was provided with notice of termination of the Agreement, a copy of which is attached as Exhibit "B" and is incorporated herein by reference. At no time during the term of the contract consisting of approximately one (1) year was the performance of DSI acceptable to MEMO or in accordance with the terms of the Agreement or the representations made by the Defendant. 16. The filing of this Complaint and the written statement of damages provides appropriate notice to DSI of its liability under the contract. 19. Defendant failed to provide support, training, maintenance for the system, and failed to create a workable system of record retention for MEMO's busines.. all of which is a material breach of the Agreement. fi " 20. As a direct and foreseeable consequence of the Defendant's breach of the Agreement and Defendant's various promises, assurance, inducements and representation, both within the contract and subsequent thereto, Plaintiff has incurred additional costs of approximately $15,000, a breakdown of which is attached hereto as Exhibit "C" which is incorporated herein by reference. 21. As a direct and foreseeable consequence of Defendant's breach as set forth above, Plaintiff has suffered damages in the form of lost revenues, efficiency and inability to deal with its agents in amounts in excess of $10,000. d '1 i 22. PFMA has paid contractual fees to DSI for a computer system and services that did not meet the contractually bargained- for performance level required of OSI. , , ~ 23. As a result of OSI's breach of the Agreement, PFMA has not received the benefit of its contractually bargained-for performance from OSI, name I y. no workable system of storage, access or reliable usage for ita financial records has been produced, and accordingly, PFMA is entitled to a return of the moni.s paid to 081. ., '. for DS! failed to develop, provide and maintain a workable record keeping system. 28. As a direct and proximate result of DS!' s failure to properly discharge its duties with the level of care required by the industry, PFMA has suffered the damages mentioned above. WHEREFORE, PFMA respectfully requests that this Honorable Court enter a judgment in its favor and against the Defendant in an amount which will exceed the jurisdictional amount for compulsory arbitration set by the Local Rules of the Court of Common Pleas of Cumberland County, plus interest and costs of suit as allowed by law. COUNT III - MisreDr..entation 29. Paragraphs 1 through 28 above are incorporated here by reference as if set forth in full. 30. In the course of its business of providing professional record keeping or computer services. DS! made the above-mentioned representations to Plaintiff which it knew were false or reasonably should have known were false for the reasons set forth above. 9 W--A " SEP 18 '96 02: 19PM I'EMO P.~ ....: "D' SI RECORDS CORPORA nON . II BRENNEMAN CIRCLE · MECHANICSBURG. PA 17055 . PHONE 7170887.8889 . FAX 717-697-8131 OSI RB:CORDS CORPORATION ELBCTEONIC RECORD RETENTION SERVICE AGRBEMENT Th1s Agreement made th1s 5th day of May, 1995, between OSI Records Corporation I"OSI") and Pennsylvan1a rood Merchants FlliSoclat 10n ("Depositor"), whereby OBI ac:lrees to accept for a m1n1mum in1t1al term of three (3) years under lte management such record mater1a1 and informat1on regard1ng f1nancial transactions and deposits ("Records") as Depos1tor requests, subject to all the terms and condltlons contained here1n. Records shall 1nclude all records to be stored ln hard copy form, all hard copy records to be transferred onto opt1ca1 dlSk and all records de11vered to DSI on Opt1cal dlsk or other electron1c med1a. Depos1tor agrees to pay DSI storage charges and charges for other serv1ces of OSI at rates set forth 1n SchedUle "A" attached hereto and by th1s reference lncorporated herein. 1. EFFECTIVE DATE. Th1s agreement between OSI and Oepos1tor shall bec:cme effect1ve on the date of the flrst depos1t of records wlth OSI (the "Etfect1Ye Date" J. The Effectlve Oete shall be entered and slgned by the partles hereto. 2. BILLING AND PAYMENT: Charge. for storage and serv1ce. shall be made 1n monthly installments wlth twenty-three percent C 2H) of the charqea to be paid on the Eftect lye Date of thiS l\.greelll8nt, The reNlnlnq seventy-.even (77' I percent of the chargs. shall be pro-rated over the balance ot the thlrty-flYe (35) months and shall be payable ln 35 equal 1nstalllllents of Two t~ousand n1nety-one ($2,191.431 dollars and forty-three cante on the f1rst day of each month. c:ommenc1nq on the f1rst day of the flrat month follow1nq the Efrective Oate. Charqes tor the remalnln9 months shall be payeb1e ln equal monthly installments on the flrst day of each month throughout the balance of the Term. Addltional charg.. ("ValUe Added Servlce.") outllned 1n Schedule "A" 101111 be bllled on the fait (lit I buslne.. day ot the month next follo~1ng the month 1n whIch the servlce. were rendered. All payments made mote than t1fteen (15) day. follow1ng the due date 9hall bear interest at twelve (12'1 percent per annum. 3. CHANGIS IN WlTSS. Stor.qe and service rates ehaU remaln 1n efreet and unChanqeQ throuOhout the three (3 J year term of tM. "qre.llent. Depo.ltor 101111 be notltl8d of any change 1n stouoe end Serv1ce rat.s ln Wtltlno at lea.t slXty (60) days prlor to renewal c! thl. Aqte.ment. r S[P 18 '96 02l!9PM!'EMO f', .;l " page 2 of 6 4. DBPOSITS. No d.p081ts w1l1 be acc.pt.d unleaa 1n containers acc.ptable to DSI as be1ng compatible w1th DSI 8torage methods and accompan1ed by a DSI Record Transmittal 1n the form attached her.to as Schedule "B". Deposit8 and/or information contalned in depos1ts shall be re-dellver.d onlY to Deposltor unless DSI 1s oth.rw1se directed by D.p08itor or 1ts de.ignated representative 1n writlng. 5. LIABILITIES I In the event of damage or loss to any records while 1n the custody of DSI, OSI 8hall only be 11able to nepositor for 8uch damaglt or 1088 directly cauud by the negl1gence ot DSI wh11e hand11ng or .tor1ng the r.cords, and .uch 11ability shall be l1mited a. set forth herein. By execut 10n ot thU Agreement, Dep081tor acknowledges that unle.. an excess valuation 1s agreed to in wr1ting to DSI at or b.tore the del1very ot recordS to DSI, a valuat10n of per carton of depos1ts ("Declared Valus") applies to all 1tem. deposit.d hereunder. Depositor acknowledq.e that it has b.en given an opportunity to prop08e an .xcelis valuation tor any and all deposits included w1th1n th1. Agreement and that lt such .xceas va1u. 1. agr..d to bY DSI, Depo.ltor agree. to bear the cost ot insuring such excess va1u. through e carrler sel.cted by DSI and rea.onably sat1sfactory to Depo.itor. DSI'8 11abl1ity to Deposltor tor any lOB. or damage to ~ecorO. shall b. lim1tea to the 1....r ot the cost ot restoring the record. to the form that th.y w.r. in before the los. or damage, or the Declared Valu., IN NO IVmNT SHALL DSI BE LIABLE TO TRS DEPOSITOR rOR ANY INDIRECT, SPBCIAL OR CONSEQUINTIAL OAKAGIS OR LOST PROFTTS ARISTNG OUT OF OR RBLATIO TO THIS AGREBKINT OR THE PERFORMANCE OR BREACH TUBRICF BY DSI. Wlthout 1nt.nd1n; to 11m1t the toreg01ng. OSI shall not be liable for any d8lll&ge O\Ie to natural deteriorat1cm. of iteu depoeit.CS hereunder, acts of God. acta of any public authority, quarantine, war, 1naurr.ction, .trlkee, rlot. or any 10.. or dllmave not occa.loned by the ne911;.nclt of DSI. 6. CONFID!NTIALITY, OSI and U. elllployee. "111 hold con~ldentl.1 the Recorell obtained fro~ the Depol1tor. D81 .hall ellercU. that degr.. of care in lareQUar<11ng the contldent ial1ty of the Record. entru.ted to It by Depo.ltor which a rea.onable per.on w~uld ex.rel.. Wlth r..pect to 8111111ar r.cord. of th.lr own. Th. ll.blltty of DSI tor breach ot th18 provU10n of the Avree..nt Ihall only be ~n the .vent that luch breach we. dlr.ctly eau.ed by the negl1vence of Clt. and 1n no eV.nt exc.ecs actual dalllBqe to Cepo.1tor or the lum or .1...... whlchever .nall be 1.... Paqe 3 of 6 1. NON-PAYMBNT, LImN. If Depositor shall fall to pay any charges of OSI and such failure to pay shall continue for a period of thlrty (30) days after the due date of any bl111nq, OSI. bY vlrtue of the 11en whlch ls agr..d to be created hereby upon all Elvcords for uncollected charqes and advances hereunder, after giving ten (10) days not lee to Oeposltor, may, at OSI', opt10n: A. Susp.nd all services and refuse access to the Reeords, B. Sell any or all of record contalners end the medla on which the Records were stored and apply the proc.eds thereof to the arrears, or C. O..troy the Records, all \oIlthout l1ab111ty. Nothlng herUn IiIhall pr.clude OSI from recourse to other remedles by statute, common law or oth.rwise. B. ACCESS. Deposttor may have access to the aecords durtng normal buslness hours of OSI. Only deSlgnated representat1ves of Depositor 1dentlfied as such tn \oIrltlnq to DSI may hev. such access, DSI may rely on the lnstruct10ns of such deSignated repre..ntat lvee and NY take lIuch act 10n with c-egard to the Records 8E such des1qnated representatives may dlrect, lncludinq the de11very, relocat1on, d.structlon or return to Depos1tor of the Facords. g. NOTICI!: or LOSS AND LIMITATION or ACTION. DSI shall not b. l1able for any 10s8 or damage und.r th18 Aqree",.nt unlesll Deposltor shall dellver a wrltten IItatement to DSI descrlb1ng 10ls or damage and stating the amount of such damage clalmed as a result of such loss ("Lou Not lee" I \l1thln stxty (611 days after such loss or damage has occurred. 061 shall 1ncur no liab1l1ty, and D.positor !'!l1all have no rights of lRQal act10n againet DSI unt1l after expiration of a th1rty (31' day perlod arter OSI has recelved the Loss Notice durlnQ wh1Ch perlod of t line OSI may 1nvest 19ate the alleged loss or damaoe. and take remed1al .ctlon that DSI dee",a approprtat.. In no .v.nt ehall any c-ecovery be had by Depositor a~alnst OSI unless act ten lS commenced withtn one hundred eighty (1811 day. after c-e-de11V8ry of any depoSlta to Depoa1tor. 1'. DISTWJCTIOM or RICOROS. Upon wc-ltten instructions fc-om Cepositor, 08t 101111 deetroy R.cord.. Depositor r.l..... OSI from any liability by r.a.on of d..truction of SUCh Recorda pursuant to .uch authorlty. SEF: 18 '96 112:20PM MEMO ~. to- t"._" .. paqe 4 of IS ll. TERM. The term of th1a A'iilreement ahall be for three (3) year. commencinq on the fir.t day of the first month follo~ln'iil the Bffective Date. Thl. Aqreement shall automatically be renewed for succlIBslve term. or: three (3) years untll elther party shall cancel it bY qiving the other written not lee of It. electlon to cancel at least forty-t:1ve (45) days prlor to the exptrat ion or: the then &xlst lnq term. In the event thlll aqreement termlnate. aa aet forth in th1s paraqraph eleven, OSI may, at lts opt lon, either. (a) return the Record. to Oepo.itor at Depo.itor'!! sole expense: or (b) destroy the Records, but only after havlnq qlven DepOSitor ten (10) days not lee. 12. FINAL RETURN OF D8POSITS. Depoaitor shall be entitled to f1nal return of any or all of its Record. upon thirty (30) days notlce in ~r1tln9 Ilent to OSI and upon payment of any .toraqe charqes and serv1ce charqell due upon such deposits and upon r:urther peyment of any tran.portatlon or deliVery charqes. 13. NOTICBS. All notlces, requests, eonaenta, ~a1vers, elections and demands (colleetively, WNotice.W) reqUired or permltted under thl. Agreement or any oth.r Loan Document shall be in wr1t1nq and shall be personally dellvered or sent by measenqer, certlfled U.S. mall (return recelpt requested), expre.. courier service or telecop1er (With conUnnat 10n copy sent by ovarn1C;Zht de11very .ervice unle.. receipt of the telecopy 1s conf1rmed), in all case. ~1th postage or charge. prepald, and any such Not lee shall be etfective when flr.t recelved by the addres.ee at lte eddrell. aet forth below, It: to OSI. DSI Record. Corporatlon 9 Brenneman C1rcle MechanicebUrq, PA 11855 rax. 111-691-9131 If to Depo.1tor. Attn. rax. Any party may .lter the addre.. to Whlch Nottee. are to ~ .ent by 91Vlnq not lee of .uch charl91l of addre.. tn c:onfonalty wtth the provtllon. Of thl. .eetton for the ;lvlnq of Notlee.. 5EP 18 '96 02: Z2PM /'EMO P.1U " " Pav. 3 Plck up and deUvery for lnltial 11.,... docwunta only. SYlte.. \lP9radable to ac:ccaaodate additional volume.. 'ee Waived ValuA ."""lKl ..rvic.. A. DoCUMnt de.truction upon author laMS reque.t . '1.5' per (1) one cubic foot container. B. DocUMnt convenlon to optical d.l.k . ..11 per pave over the 11.,... Hmlt. pfttA.. Portion 23' at execution of contract - .21,15' Monthly portion - 35 aonth. -. 2,"1..3 .. r.JIIIlII 8 .. 6" ~'A""'''''''''"''''' ,_.'I..... fl"> EllNllII C 4'_....._.-.- - Ao\ \~v ~\\\ Invoice DATE INVOICE NO. 9/10196 161 BILL TO pensytvania Food Merchanll Association Tanya Butler 1029 Mumma Road Camp Hill. PA 17001-8863 SHIP TO Pensytvanla Food Merchants Association Tanya Butler 1029 Mumma Road Camp Hill, PA 17001-8863 , P.O. NO. TERMS REP SHIP DATE SHIP VIA FOB PROJECT . 911 0198 NetwOrk and lma... i ITEM SERVICED DESCRIPTION QTY RATE AMOUNT , NET570 'llI3I96 lnitiaized GeneIyI Server and Tested 1.5 75.00 112.5OT \ llI3I96 Client. Frank Armer NET570 Restored separated data lilelto single 1 75.00 75.ooT , dirIdOIY and made lUre gentIYI WU , \ up.. Scott Helland SalIS Tax 6.00% 11.25 I i 1 I i \ , \ \ ! I \ , \ , I \ I I . \ I I . I I . Tota' \ I I I , I "IU$ I . -.-- - 4~c:LJ: . " ADVANceD DATA SOLUTIONS 1n7 Lltttz Pillt L"ul"". PA 17601 (711)511-52M Fl. (711)511.10" Invoice DATE INVOICE NO. 8130196 '52 BILL TO Pensylvania Food Merchants Association Tenya Butler '029 Mumma Road Camp Hill, PA 17001-8863 SHIP TO Pansytvania Food Merchants Association , Tanya Butler 1029 Mumma Road Camp Hill, PA 17001-8863 P.O. NO. TERMS REP SHIP Oot.TE SHIP VIA FOB PROJECT 8130196 Ne\wOl1( and lma... ITEM SERVICED DESCRIPTION CTY RATE AMOUNT NET570 8130196 Syslem suppOrt . Steve WyIl1l. Fratlk 20 7500 l,500ooT Armer, and Scott Heiland. System BackUp of Imaging System Sales Tax 600% 90.00 .~.~.. .__.. ....,. '.--'---..-- , ,...,'-,--.- ._,.>~- -. ._....~""~-- ....~.~....".,,-'_.. Total 11.580 00 - .' . , . . A'f! qCe Invoice / \ \'1"~._-------- 'l> V DATE __~~OIC~_~~~ 8/27/96 141 BILL TO Pensylvania Food Merchants Association Tanya Butler 1029 Mumma Road Camp Hill, PA 17001-8863 SHIP TO Pensylvania Food Merchants Association Tanya Butler 1029 Mumma Road Camp Hill, PA 17001-8863 I P.O. NO. TERMS REP SHIP DATE SHIP VIA FOB PROJECT 1 8127/96 Network and lme... ! ITEM SERVICED DESCRIPTION QTY RATE AMOUNT 1 . CON570 8I22J96 lmeging Network Support - Review 3 75.00 225. OCT . Statui of System - Installed network C3td - Review backup req. Sales Tax 6.00% 1350 Total 1238 SO '. . . .. . '. . VERIFICATION The undersigned, Tanya Butler, hereby verifies and states that: 1. She is CO"' ((II AI"'''''fit.! Lp"ICJ.f,CNJJf Plaintiffs herein; I 1 2. The facts set forth in the foregoing complaint are true and correct to the best of her knowledge, information, and belief; and 3. She is aware that false statements herein are made subject to the penalties of 18 Pa. C.S. 54904, relating to unsworn falsification to authorities. ~ -- (' ...".....\1 I, <~ ~, (,c_. .J j..... r?u <,() Butler Tanya Dated: IOI~jc,l.i' J. Bruce Walter Attorney 1.0. 19628 Dean F. Piermattei Attorney 1.0. No. 53847 RHOADS .. SINON One South Market Square, 11th Floor P.O. Box 1146 Harri8burg, PA 17108-1146 (717) 233-5731 ATTORNEY FOR PLAINTIFF I I i ! ! ! i j I , i , , i J I I I 1 PENNSYLVANIA FOOD MERCHANTS ASSOCIATION, IN THE COURT OF COMMON PLEAS CUMBERLAND CO., PENNSYLVANIA CIVIL ACTION - LAW NO. 96-5466 JURY TRIAL DEMANDED Plaintiff v. DSI RECORDS CORPORATION Defendant NOTICB TO pr.1I!~ , . , j , To: Mark D. Bradshaw, Esquire ECKERT, SEAMANS, CHERIN (, MELLOT 213 Market Street P.O. Box 1248 Harrisburg, PA 17108-1248 Attorney for Defendant You are hereby notified to file a written respan8e to the enclosed Plaintiff's Preliminary Objections to Defendant' s Preliminary Objections within twenty (:10) days from service hereof or a default judgment may be entered again8t you. RHOADS & SINON LLP w<" ,..",,' .' ~' ay,,_' ._ '.\1. Bruce Malter, Eaquire Dean F. Piet1llattel, Eaquire One South Market Square Poat Office Sox 1146 Karriaburg, PA 17101-1146 (717) 2))-5731 Attorney for Plaintiff electronic record retention. A certified copy of the cover page of Plaintiff's Complaint is attached hereto as Exhibit "A" and incorporated herein by reference. 2. On October 9, 1996, Plaintiff's Complaint was served upon Defendant by the CUmberland County Sheriff's Department. A copy of the Sheriff's Return is attached hereto as Exhibit "S" and incorporated herein by reference. 3. On November 4, 1996, twenty-six (26) days after service of the Complaint upon it, the Defendant filed Preliminary Objections. A time-stamped copy of the cover page of Defendant's Preliminary Objections are attached hereto as Exhibit "C" and incorporated herein by reference. 4. Pa.R.Civ.P. 1017 states that a preliminary objection is a pleading. S. Pa,R.Civ.P. 1026 requires that "every pleading subsequent to the complaint shall be fUed within twnty (:JO) days after service of the preceding pleading.. .." 6. The Defendant's Preliminary Objections which wre filed twnty-six (26) days after service of the Complaint are untimely and are tiled in violation of Pa.R.Civ.P. 10261a)1 accordingly. Defendant's Preliminary Objections should be stricken pursuant to Pa.R.Civ.P. 1028(2). WHEREFORE, Pennsylvania Food Merchants Association respectfully requests that this Court strike the Preliminary Objections of OS! Records corporation and require the Defendant to file an Answer in this matter within ten (10) days. RHOADS (, SINON LLP By: _n..___ .~ . '--':-"'''~-- ..~ t J. Bruce Walter, EsqUire Dean F. Piermattei, Esquire One South Market Square Post Office Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorney for Plaintiff l1UU - .~'.., '~~.- ,.,-",,,,,,-~-,. ..,... -..-.-& ,-. 11 ..'.....UD (i) . - ~--. SH~~Irt': RETURN - REGULAR CA~~ NO: 199~-054~e F CO"HONWEA~TH ~V P~NN~YLVANIA: C\.lIJ/lTY IJV ':LIMe~:;LANC' r~NN~YLV^NIA VOO~ M~RSHANT~ V 0.: .. D~I RECOF.D~ CURFO~A~ION J. MICHA~L I(K~S , ~he~~ii cr 0E:~:Y ~her1ii ~. ~UM6CRLAHt. C~unty. ?~n~sylvanla. v~o te~~~ c~ly s~;r~ ~~~~~C~~? t~ law, says, ~h~ y~thl~ C0~FLAIN: 'lf~Z ::e~."-!: -:....-:: 'Jp-:.n Q~ r n:~co~t'~ .:\..i~FI:'F.A7!C'~i :1l5-="r.,jant. a~ 15~'''':'ZIq-, HI:.i:~=. .h t:-I~ -=':~ '::a:t ._ '.''='-.::'-::' L~'J~ at "J ~:~::N~~r;~ Cl~:~~ 11:.':!;AN lCSDU!\G.. F~. t -;,,''5'5 . '~!:~=::r-.:'';~i: :'C'IJnty, FennEylv!inl.s. r;' n5~~\n; t~ L~~~lE WAGUi~. ,...--... -- \...!" ; .:. '..:' :1A!fAGE;' AI.j;) Af'UL T IN t;;iA;':C;i a true 3nd atteEte~ co~y of the CU~FL~:NT tcgether v~th NUTIC~ .nd .t th. .~~. ti~9 dl~e~t~~; ~~r ~~t~n~~~n ~: the c~n~.~~z ~~.r~~:. ~herit!'s C,sts: r'<:;Cy.Et1.n;1 ~.!"v:Lc" Af!1~av1t :'JrChs:-;9 lS.0C 4. -:.-: .'Z:\Z1 :. (." ~~ ;:~~ -<~ r.. l"::'fI~E t..:.:;.. :-.~,:':': ~. -i.:,,: f.r:':A:': .a:i: ?!~'::I :';':~"l'?~-: 1!!\~WI ~ t]' J (/ i~::~ S~~ su~.crl~.1 tc t.~e:. .~ ~hll d_:- -:f ~.L 1~ F r ::~~;~.,; ..'!".~ EaNIII C ..rollIDG) PENNSYLVANIA FOOD MERCHANTS ASSOCIATION IN THE COURT OF COMMQN PLEAS CUMJJHRLANO COUNTY, PENNA Plaintiff NO. 96-5466 Civil v. OSI RECORDS CORPORATION Jury Trial Demanded Defendant DEFENDANT DSI RECORDS CORPORATION'S PRELIMINARY OBJECTIONS TO PLAINTIFFS' COMPLAINT AND NOW comea Defendant DSI Records Corporation by and through its counsel Eckert Seamans Cherin It Mellott, and makes the following preliminary objections pursuant to Pa.R.Civ.P. 1028, IlItin& In support thereof II follows: I. LEGAL INSUmCIENCY (DEMURRER) PURSUANT TO RUl.E 102100(4). I. Paraaraph 9 of the contract attached to Plaintilr. Complaint II Exhibit . A. (the . AIrec:nle4t") Imposes an "press precolldition to any legal action, such that Plaintiff II required under 19 to deliver a precilo form of "loss notice" within 60 clays after any Iosa or clamqo Plaintiff may claim has occumd. 2. Paraarapll 9 of the Alreen'lOtltlllles II (ollows: "DSI shallll\(\lr r., liability I and clepoaItor (Plalntlfl) shall have 110 rilhls of IepI action aplnst OSI UIItil after ,.pirLtioft 01 ~ dlirty (JO) day period afler DSI has received the loss ~cc. d::rin,; \\'hid! period 0( lime OSI may Invcatlptc the allepd Iosa or clalllllO. and .. remodiallCtion that OSI deems appropriate. " 3. PIaiAtltr. Complalllt is silenl with rcspottto Its compliance with this condition pl'eClCdiMllO lhe briftalaa 01 the aeIlon ibell. I CBaTIPICATB OP SBRVICB I hereby certify that a true and correct of the foregoing Plaintiff'. Preliminary Objections to Preliminary Objections of Defendant was served upon the following person by first-class United State. mail, postage prepaid, on November 20, 1996, as follows: Mark D. Bradshaw, Esquire ECKERT, SEAMANS, CHERIN (, MELLOT ~1) Market Street P.O. Box 1248 Harrisburg, PA 17108-1248 '/; .0 ('1 if liLt ( . "'"...__ ti.. Lor! A. Shatto ~ - in ~- .. ).A t::: ("': ~\t;~ ~-, -- '.""',"- -0:... H:; ..::.... ~~~ i c;... ! of "1 6: t..:._ (0,; . -:' E\ ~" .:t{J \..-:' J~ ,- ~ ~ ,;",: j t..'"" , . PENNSYLVANIA FOOD MERCHANTS ASSOCIATION IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNA NO. 96-5466 Civil Plaintiff v. DSIRECORDSCORPORATlON Defendant Jury Trial Demanded DEFENDANT DSI RECORDS CORPORATION'S PRELIMINARY OBJECTIONS TO PLAINTIFFS' COMPLAINT AND NOW comes Defendant DSI Records Corporation by and through its counsel Eckert Seamans Cberin &. Mellott, and makes the following preliminary objections pursuant to Pa.R.Civ.P. 1028, stating in support thereof as follows: I. LEGAL INSUFFICIENCY (DEMURRER) PURSUANT TO RULE 1021(1)(4). 1. Paragraph 9 of the contract attached to Plaintifrs Complaint as Exhibit . A. (the . A&reement.) imposes an express precondition to any legal action, such that Plaintiff is required under 19 to deliver a precise form of .Ioss notice. within (j() days after any loss or damaae Plaintiff may c:laim has oc:curred, 2. Paragraph 9 of the Agreement sIaIeS as follows: .DSI sha11 inc:ur no liability, and depositor [plaintiff) shall have no rights of 1epI action apinst DSI until after expiration of a thirty (30) day period after DSI has m:eived the loss notice, dllM' whic:h period of time OSI may invatiptc the allqed loss or damaae, and take remedial action that OSI deems appropriate. . 3. Plaintiff's Complaint is silent with respect to its compliance with this c:ondidon prec:cdc:nt to the brillJillJ of the action ibtlf. I ~ - -- - -;" j':. .. ')~ ~~. ..:z ,.. c :t: .):{ '.i' u. :;., ,,).:.1 ~~. ..:S ;!ii u.tC' I .'~~ ~.. :-.. 1.0-'- C .::: ~ ..~~ "' ,,0 ) V a> D . . PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and submitted in duplicate) TO THE PROTHONOTARY/OF CUMBERLAND COUNTY: . Pleue Ustthe within mailer Cor the next: o Pre. Trial Arlument Court [] Argument Court CAPTION OF CASE (entire .c:aplion mUlt be statedln Cull) (PIaInlifl) g h"i :3L, U)\;<, ~~,'.(~ l;..~.~ r::.c ~l"'" ",~o :;.-c ~ $ ~ =' ::;! S ~i~ ~ :~a w ~ ~ ~ . . PE~NSYLVANIA FOOD MERCHANTS ASSOCIATION YL DSI RECORDS CORPORATION (DeCendant) YL No. ';466 CtriI 191L I. Slat. matter to bllfllltd (L '.. plaintiffs mollOll Cor IIIW uw. deC.lldant'a demurrer to complalnt, .tc.): Plaintiff's Prellmlnarf Objections to Defendant's Prellmlnarf Objections lp Plaintiff" Cqmplalnt Identify r.lI'JI\_ WhO WIIlIrJU' case: ~ 2. (.) for pialatilC: Dean F. Plertllllttel, E.qulre (II) fordtf.nclaat: Mark O. Bradshaw, Esquire 3. I _III ~ all putits in wrilill& wilhilllWO tby1l11at thb ~ tau beta lslri for UJUllIIhL_ Del"'; 12(1<<1/'16 ....-- '" -~.'-' :J -", .. ./ ..;7 /. ,/.../ .---t ~ ~/' ' , - (All"'MY ior 1'll1lnl1 ff I Potlln F. !' I t'l'Ift8 It ..I. t1iq'll NO RHOAO:; 110 Sl !in.. Lt.I' Attnrn..y \,11. '~11"i PENNSYLVANIA FOOD MERCHANTS IN THE COURT OF COMMON PLEAS OF ASSOCIATION, CUMBERLAND COUNTY, PENNSYLVANIA PLAINTIFF V. DSI RECORDS CORPORATION, DEFENDANT : 96-5466 CIVIL TERM It!' ~E: DEfENDANT'S PRELIMINARY OBJECTIONS TO PLAINTIff'S COMPLAINT BEFORE HOFFER. J. AND BAYLEY. J, OPINION AND ORQ.ER OF eOURl: BAYLEY, J., February 20,1997:- On August 1, 1995, plaintiff Pennsylvania Food Merchants Association entered into a written electronic record retention service contract with defendant OSl Records Corporation. The contract provided that defendant accept for a minimum term of three years '[uJnder its management Such record material and infonnation regarding financial transactions and deposits ('Records') as Depositor requests. . ..' Plaintiff agreed to pay defendant storage charges and charges for other services pursuant to a rate schedule attached to the contract. A little over a Yll8l' later on August 20, 1996, plaintiff terminated the contract by letter, stating: [nJob of termination of the Agreement dated July 12. 1llG5 ~'Jeen PennsylvanIa Food Merchants AssoeiAtion and OSl, elf<<:tive immediately. OS! has failed to perform, has violated the contract in numerous instances and [pIaintift) has been left with a .,stem whellby it it WtualIy unable to rwtrieve Its record. You haW neitIw "* your responsibtIity under ttle AgoMment nor hIM presented [p'.l.lIlft} with. possible course of rtIOIution, .wn though discusslonl haW been ongoing. 96-5466 CIVIL TERM Plaintiff flied a complaint against defendant on October 3, 1996, containing counts of breach of contract, negligence, misrepresentation and breach of warranty. Plaintiff avers In the complaint Since the beginning of the Agreement, DSI has been unable to coHect, retain and display records of MEMO's transactions with Its agents, and as a result DSI has replaced the initial recommended software package with another package of software, however, the system has never operated in a fashion which would permit [plaintiff) to obtain access to its records on any basis other than manually and has never operated as represented by the Defendant. PlaIntiff avers that it paid $41,802.28 to defendant pursuant to the contract but that it 'recelved little or no benefit as the computer system was not functioning as i :1 I represented by Oefendant and is not sufficient to meet [plaintiffs] needs.' PlaIntiff avers numerous specific reasons how defendant breached the contract. The complaint itemizes a total of $16,n6 of costs that plaintiff attributes to defendant's alleged failure to comply with the terms of the contract. In addition, plaintiff seeks an amount in excess of $10,000 'in the form of lost revenues. efficiency and Inability to deal with its agents.' Defendant filed preliminary objections to the complaint in the form of a demurrw. 0efencIants rnaIntaln. iOlIr * that paragraph 9 of the contr8ct attached to the complaint requites the d'1SlTlissaI of the ...... '1" of action for the failure of pIainbff to COhlply with the notice ptO'.islon that proWtes: NOTICE Of LOSS AND UMlTAllON Of ACTION: DSlIhaII not be liable for any loa or eta.... under thIa .Iament Uflr.l. Depalb ..... deIhrtt . wrttten .....ment to DSl cteacrtblng loa or .IM", ancIllIatIng the amount of auch damage claimed .. . relUll ~ 96-5466 CIVIL TERM of such loss "(Loss Notice') within sixty (60) days after such loss or damage has occurred, DSI shall incur no liability, and Depositor shall have no rights of legal action against OSI until after expiration of a thirty (30) day period after OSI has received the LOll Notice during which period of time OSI may Investigate the alleged loss or damage, and take remedial action that OSI deems appropriate. In no event shall any recovery be had by Depositor against DSI unless action is commenced within one hundred eighty (180) days after re- delivery of any deposits to Depositor. (Emphasis added.) Plaintiff avers in its complaint that '[T]he filing of this Complaint and the written statement of damages provides appropriate notice to DSI of its liability under the contract.' In its brief. which cites no authority, plaintiff asserts that its termination letter to defendant on August 20, 1996, attached to its complaint, is the written statement of damages providing sufficient notice to satisfy the notice of loss requirement in paragraph 9 of the contract. Oefendant in its brief cited Commonwealth of Pennsylvania, Department of Highways v. S.J. Grove and Sons Company, 20 Pa, Commw. 526 (1975), quoting Lashner, Inc. v. Commonwealth of Pennsylvania, Department of Highways, 1 Pa. Commw. 486 (1971), in support of its position that the written notice required in paragraph 9 of the contract sets the accrua/ date of any cause of action under that contract, and that plaintiff has not adequately pleaded such notice. In the Lashner case, Lashner, Inc. entered Into a service contract with the Commonwealth that provided that no claim would be filed by Lashner with the Board of Arbitration of Claims unless the claim was made within three months of the notice date of the Commonwealth's final computation of payment due. and that ttle time limitatiOn governing submission of claims to the Board would -3- 96-5486 CIVIL TERM commence with the notice of the flnal computation.' After Lashner, Inc. flied a claim with the Board one month after receiving the Commonwealth's flnal computation of payment due, the Commonwealth contested whether the claim was timely flied. The Commonwealth Court stated: It Is clear that the speciflcations incorporated into the contract which set the date of notiflcatlon of computations as the date which commenced the running of the statute of limitations and which made the notiflcation a prerequisite to any suit under the contract, Indicate the undeniable Intent of both Laahner and the Commonwealth to consider the date of notification aa the accrual date of any cause of action under the contract. (Emphasis added.) *** Since the contract provided that the action for the breach did not accrue until notification of computations, Lashner's action, brought within a month thereafter, was proper. In the Grove case, a service contract between S.J. Grove and Sons Company and the Commonwealth provided that the date on which the secretary of highways notlfles the contractor of the final certiflcate computations, or revised computations, shall be the date from which the time limit shall begin to run for the submission of claims to the Board of Arbitration of Claims. Grove filed its claim with the Board more than a yll8I' before the final certificate of computations was issued. The Commonwe&lth filed preliminary objections maintaining that Grove's claim was not filed within the six month statute of limitations after it accrued as required by 72 P.S. S 1. The applicable statute of limitations for fillng claims befont the Board WIt six months. 72 P,S. S 46S1~, ... 96-5466 CIVIL TERM 4651.6. The Comml)nwea/th Court concluded that because the preliminary objections set forth only that the claim was flied late, not that it was filed prematurely, the objection had been properly dismissed. In the case iYQ judice. however, defendant has flied a preliminary objection setting forth that plaintiff prematurely flied the complaint without satisfying the prerequisite notice required in paragraph 9 of the contract which sets the accrual date for any cause of action. As In Laahner, we conclude that the electronic record retention service contract indicates an undeniable intent of both plaintiff and defendant to consider the thirtieth day after defendant receives from plaintiff any 'Loss Notice' as the accrual date for any cause of action under the contract. Furthermore, the parties agreed that the 'loss Notice' would (1) describe any loss or damage, and (2) would state the amount of such damage claimed by plaintiff against defendant. The filing of the within complaint does not constitute a 'Loss Notlce' as defined in the parties' contract bec811S'" it is the receipt by defendant of such a notice that triggers the 30 day period after which the accrua/ date commences for any cause of action. The letter sent by plaintiff to defendant on August 20, 1996 terminating the contract does not satisfy the contractu8I requirements of 8 'Loss Notice. because that lett... did not set forth the amount of damages claimed as a result of any loss. Since plaintiff in ita compIalnt hu not set forth a calise of action that has eccruecl, it has not set bth 8 eel'" of .s.