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HomeMy WebLinkAbout02-5863IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW RITE AID CORPORATION, Plaintiff, No. Oa_ >OV3 vs. DAVID KONEFF and SUSAN KONEFF Defendants. PRAECIPE FOR WRIT OF SUMMONS To the Prothonotary: Kindly issue a writ of summons in the above-captioned action. . J teve D. Shadowen, I.D. No. 41953 Gordon A. Einhorn, I.D. No. 59006 Attorneys for Plaintiff Rite Aid Corporation SCHNADER HARRISON SEGAL & LEWIS LLP 30 North Third Street, Suite 700 Harrisburg, PA 17101 (717) 231-4000 Dated: December 9, 2002 HBDATA:8021 W w ? p Q G IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW RITE AID CORPORATION, Plaintiff, vs. No. Jq S-&63 DAVID KONEFF and SUSAN KONEFF Defendants. rill o f v k C) WRIT OF SUMMONS To: David Koneff 760 Seitz Drive Lewisberry, PA 17339 You are hereby notified that Rite Aid Corporation has commenced an action against you. Dated: December ?4 2002 Prothonotary Cumberland County By: /?J r Deputy HBDATA:8021 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW RITE AID CORPORATION, Plaintiff, No. Oa '-5 -963 vs. DAVID KONEFF and SUSAN KONEFF Defendants. WRIT OF SUMMONS To: Susan Koneff 760 Seitz Drive Lewisberry, PA 17339 C o `- e? You are hereby notified that Rite Aid Corporation has commenced an action against you. Dated: December11?2002 Prothonotary Cumberland County By 14 Deputy T HBDATA:8021 6- IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW RITE AID CORPORATION, Plaintiff, No. 02-5863 VS. DAVID KONEFF and SUSAN KONEFF Defendants PLAINTIFF RITE AID CORPORATION'S SECOND PETITION FOR ISSUANCE OF COMMISSIONS TO TAKE OUT OF STATIC; DEPOSITIONS Plaintiff Rite Aid Corporation ("Rite Aid") by its undersigned attorney, respectfully petitions this Court pursuant to Pa.R.C.P. 4015 and 42 Pa. Cons. Stat. § 5325 for the issuance of commissions to take depositions upon oral examination on the following basis: 1. Rite Aid commenced this action on December 9, 2002 by the filing of a praecipe for writ of summons and the writ was issued on that same date. This action was brought by Rite Aid against David Koneff, a former employee in its Tax Department, as the result of an internal investigation which showed that Mr. Koneff, while an employee of Rite Aid, misappropriated funds from the company with the assistance of certain outside individuals and entities. In order to draft its complaint, Rite Aid requires certain additional information which it will obtain through depositions which will be held pursuant to the commissions requested herein. HBDATA:8102 2. Rite Aid proposes to take the deposition upon oral examination of the Custodian of Records of Cornerstone South, Inc. 2100 W. 76th St., Suite 510, Hialeah, Florida 33016 on January 29, 2003 at 10 o'clock a.m. at the law offices of Kenny Nachwalter Seymour Arnold Critchlow & Spector, 400 Miami Center, 201 South Biscayne Boulevard, Miami, Flordia 33131, before a court reporter licensed in the State of Florida pursuant to a Notice of Deposition dated December 20, 2002, a true and correct copy of which is attached as Exhibit A. 3. Rite Aid requires the deposition of the Custodian of Records in that he will be able to provide information concerning the sale of real estate in Osceola County, Florida to David Koneff and to fellow Rite Aid employee, Daniel Semic on or about March 2, 1998, transactions that were apparently related to the misappropriation of funds. The deposition of this individual will aid Rite Aid in preparing its Complaint against Defendant Koneff asserting the misappropriation of Rite Aid funds. 4. Pursuant to Pa.R.C.P. 4007.1(d) and as stated in the attached Notice of Deposition, Rite Aid proposes to serve Cornerstone South, Inc. with a subpoena or its equivalent under the laws of the State of Florida. 5. For the taking of the above depositions, Rite Aid will retain certified court reporters who are competent and qualified to execute a commission for taking the depositions of the above individuals. 6. The court reporters to be retained by Rite Aid will not be attorneys of any party to this action nor relatives or employees of any party or such party's attorney, and will have no financial interest in this action as would disqualify him/her under Pa.R.C.P. 4015(c). HBDATA:8102 2 WHEREFORE, Plaintiff Rite Aid Corporation respectfully requests that this Court authorize the issuance of commissions to take out-of-state testimony pursuant to Pa.R.C.P. 4015 and 42 Pa. Cons. Stat. § 5325, of the Custodian of Records of Cornerstone South, Inc. upon oral examination in accordance with the Pennsylvania Rules of Civil :Procedure. Respectfu submitted, tev . Shadowen., I.D. No. 41953 ordon A. Einhorn, I.D. No. 59006 Attorneys for Plaintiff Rite Aid Corporation SCHNADER HARRISON SEGAL & LEWIS LLP 30 North Third Street, Suite 700 Harrisburg, PA 17101 (717) 231-4000 Dated: December 20, 2002 HBDATA:8102 3 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION, Plaintiff, No. 02-5863 vs. DAVID KONEFF and SUSAN KONEFF Defendants. DEFENDANT RITE AID CORPORATION'S NOTICE OF ORAL DEPOSITION TO: David Koneff Susan Koneff 760 Seitz Road Lewisberry, PA 17339 PLEASE TAKE NOTICE that on Wednesday, January 29, 2003, commencing at 10:00 a.m., Plaintiff will take the deposition of the Custodian of Records, Cornerstone South, Inc., by oral examination pursuant to Rule 4007.1 of the :Pennsylvania Rules of Civil Procedure. The deposition will be held at the offices of Kenny Nachwalter Seymour Arnold Critchlow & Spector, 400 Miami Center, 201 South Biscayne Boulevard, Miami, Florida 33131, and will continue thereafter from day to day until completed. You are invited to attend and examine the witness. Steve D. Shadowen, I.D. No. 41953 Gordon A. Einhorn, I.D. No. 59006 Attorneys for Plaintiff Rite Aid Corporation SCHNADER HARRISON SEGAL & LEWIS LLP 30 North Third Street, Suite 700 Harrisburg, PA 17101 (717) 231-4000 Dated: December 20, 2002 HBDATA:8035 Custodian of Records to bring the following documents: 1. All documents referring or relating to the sale of Lots 1 and 4 in Poinciana Estates, Osceola County, Florida to David Koneff on or about March 2, 1998. 2. All documents referring or relating to the sale of Lots 8 and 11 in Poinciana Estates, Osceola County, Florida to David Semic on or about March 2, 1998. 3. Copies of all checks, evidence of wire transfers or monetary transfers of any kind that refer or relate to the transfer of funds in payment for Lots 1, 4, 8 and 11 in the sales of those properties on or about March 2, 1998. 4. Any and all documents evidencing, effectuating, reflecting, or otherwise establishing any sale, conveyance, hypothecation, quitclaim, gift, devise, or other transfer of any fee interest, mortgage interest, leasehold interest, or other ownership or evidentiary interest the aforesaid real property (or of any portion or portions of the aforesaid real property), including but not limited to deeds, deed polls, leases, quitclaim instruments, bills of sale, hypothecation instruments, mortgages, assignments agreements, agreements of sale, title affidavits, settlement sheets, settlement agreements, transfer-tax affidavits, recording instruments, or correspondence relating to any, some, or all of the aforesaid documents. HBDATA:8035 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing PLAINTIFF RITE AID CORPORATION'S PETITION FOR ISSUANCE OF COMMISSIONS TO TAKE OUT OF STATE DEPOSITIONS was served via U.S. mail this 20th day of December 2002 on: David Koneff 760 Seitz Road Lewisberry, PA 17339 Susan Koneff 760 Seitz Road Lewisberry, PA 17339 on A.Einhorn HBDATA:8102 r 77 , -a DEC°1 9 2002 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW RITE AID CORPORATION, Plaintiff, No. 02-5863 vs. DAVID KONEFF and SUSAN KONEFF : Defendants. PROPOSED ORDER AND NOW, this day of December, 2002, upon consideration of Plaintiff Rite Aid Corporation's Petition Pursuant to Pa.R.C.P. 4015(b) and 42 Pa. Cons. Stat. § 5325 for the issuance of commissions to take depositions, IT IS ORDERED that the Petition is GRANTED and the Prothonotary is directed to issue commissions to take the depositions of the following individuals upon oral examination in accordance with the Pennsylvania Rules of Civil Procedure pursuant to the Notices of Deposition dated December 19, 2002: Custodian of Records MailBoxes, Etc. No. 2522 976 McLean Avenue Yonkers, NY 10704 Claire Zimmerman, Branch Manager First Union Bank 515 Union Boulevard Totowa, NJ 07512 c oa HBDATA:8032 r„ r t ?? t FZ D. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW RITE AID CORPORATION, Plaintiff, No. 02-5863 vs. DAVID KONEFF and SUSAN KONEFF Defendants. PLAINTIFF RITE AID CORPORA'TION'S PETITION FOR ISSUANCE OF COMMISSIONS TO TAKE OUT OF STATE DEPOSITIONS Plaintiff Rite Aid Corporation ("Rite Aid") by its undersigned attorney, respectfully petitions this Court pursuant to Pa.R.C.P. 4015 and 42 Pa. Cons. Stat. § 5325 for the issuance of commissions to take depositions upon oral examination on the following basis: 1. Rite Aid commenced this action on December 9, 2002 by the filing of a praecipe for writ of summons, and the writ was issued on that same date. This action was brought by Rite Aid against David Koneff, a former employee in its Tax Department, as the result of an internal investigation which showed that Mr. Koneff, while an employee of Rite Aid, misappropriated funds from the company with the assistance of certain outside individuals and entities. In order to draft its complaint, Rite Aid requires certain additional information which it will obtain through depositions which will be held pursuant to the commissions requested herein. HBDATA:8032 2. Rite Aid proposes to take the deposition upon oral examination of Claire Zimmerman, Branch Manager of First Union Bank, Totowa Boro Office, 515 Union Boulevard, Totowa, New Jersey 07512 on January 27, 2003 at 10 o'clock a.m. at the law offices of Velardo & Velardo, P.C., 66 Park Street, Montclair, New Jersey 07042, before a court reporter licensed in the State of New Jersey, pursuant to a Notice of Deposition dated December 19, 2002, a true and correct copy of which is attached as Exhibit A. 3. Rite Aid requires the deposition of Ms. Zimmerman in that she will be able to provide information concerning an account at the Totowa, New Jersey branch into which funds were deposited which were apparently misappropriated by Defendant David Koneff while he was Director of Sales Tax of Rite Aid Corporation. The deposition of Ms. Zimmerman will aid Rite Aid in preparing its Complaint against Defendant Koneff asserting misappropriation of Rite Aid funds. 4. Pursuant to Pa.R.C.P. 4007.1(d) and as stated in the attached Notice of Deposition, Rite Aid proposes to serve Claire Zimmerman with a subpoena or its equivalent under the laws of the State of New Jersey. 5. Rite Aid proposes to take the deposition upon oral examination of custodian of records, MailBoxes, Etc. No. 2522, 976 McLean Avenue, Yonkers, New York 10704 on January 20, 2003 at 10 o'clock a.m. at the offices of Judicial Reporting Services, 120 Bloomingdale Road, Suite 104, White Plains, New York 10605 before a court reporter licensed in the State of New York pursuant to a Notice of Deposition dated December 19, 2002, a true and correct of which is attached as Exhibit B. HBDATA:8032 2 6. Rite Aid requires the deposition of the custodian of records in that it is believed that a private mail box was rented at MailBoxes Etc. No. 2522 for use as a business address by a vendor which may have conspired with Defendant Koneff to misappropriate funds from Rite Aid and further that the rented mail box was used to receive funds misappropriated from Rite Aid. The custodian of records will be able to provide information relating to the identity of those who rented the mail box and the history of its rental. 7. Pursuant to Pa.R.C.P. 4007.1(d) and as stated in the attached Notice of Deposition, Rite Aid proposes to serve the custodian of records of MailBoxes, Etc. No. 2522 with a subpoena or its equivalent under the laws of the State of New York. 8. For the taking of the above depositions, Rite Aid will retain certified court reporters who are competent and qualified to execute a commission for taking the depositions of the above individuals. 9. The court reporters to be retained by Rite Aid will not be attorneys of any party to this action nor relatives or employees of any party or such party's attorney, and will have no financial interest in this action as would disqualify him/her under Pa.R.C.P. 4015(c). HBDATA:8032 3 WHEREFORE, Plaintiff Rite Aid Corporation respectfully requests that this Court authorize the issuance of commissions to take out-of-state testimony pursuant to Pa.R.C.P. 4015 and 42 Pa. Cons. Stat. § 5325, of Claire Zimmerman, and the custodian of records of MailBoxes, Etc. No. 2522 upon oral examination in accordance with the Pennsylvania Rules of Civil Procedure. submitted, SteXD. Shadowen, Gordon A. Einhorn, I.D. No. 59006 Attorneys for Plaintiff Rite Aid Corporation SCHNADER HARRISON SEGAL & LEWIS LLP 30 North Third Street, Suite 700 Harrisburg, PA 17101 (717) 231-4000 Dated: December 19, 2002 HBDATA:8032 4 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing PLAINTIFF RITE AID CORPORATION'S PETITION FOR ISSUANCE OF COMMISSIONS TO TAKE OUT OF STATE DEPOSITIONS was served via U.S. mail this 19th day of December 2002 on: David Koneff 760 Seitz Road Lewisberry, PA 17339 Susan Koneff 760 Seitz Road Lewisberry, PA 17339 HBDATA:8032 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION, Plaintiff, No. 02-5863 vs. DAVID KONEFF and SUSAN KONEFF Defendants. DEFENDANT RITE AID CORPORATION'S NOTICE OF ORAL DEPOSITION TO: David Koneff Susan Koneff 760 Seitz Road Lewisberry, PA 17339 PLEASE TAKE NOTICE that on Monday, January 27, 2003, commencing at 10:00 a.m., Plaintiff will take the deposition of Claire Zimmerman, Branch Manager of First Union Bank, Totowa Boro Office, by oral examination pursuant to Rule 4007.1 of the Pennsylvania Rules of Civil Procedure. The deposition will be held at the offices of Velardo & Velardo, P.C., 66 Park Street, Montclair, New Jersey 07042, and will continue thereafter from day to day until completed. You are invited to attend and examine the witness. Steve D. Shadowen, I.D. No. 41953 Gordon A. Einhorn, I.D. No. 59006 Attorneys for Plaintiff Rite Aid Corporation SCHNADER HARRISON SEGAL & LEWIS LLP 30 North Third Street, Suite 700 Harrisburg, PA 17101 (717) 231-4000 HBDATA:8035 Branch Manager to bring the following documents: All documents relating to the opening and maintenance of FirstUnion Account No. 3008902433. 2. All correspondence between FirstUnion Bank and the owners and/or agents of that account. 3. All monthly statements for that account from the date it was opened until the present or the date on which it was closed. 4. Copies of all canceled checks drawn on the account from January 1, 1997 through the present date. HBDATA:8035 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION, Plaintiff, No. 02-5863 vs. DAVID KONEFF and SUSAN KONEFF Defendants. DEFENDANT RITE AID CORPORA?TION'S NOTICE OF ORAL DEPOSITION TO: David Koneff Susan Koneff 760 Seitz Road Lewisberry, PA 17339 PLEASE TAKE NOTICE that on Monday, January 27, 2003, commencing at 10:00 a.m., Plaintiff will take the deposition of the Custodian of Records, MailBoxes, Etc. No. 2522, 976 McLean Avenue, Yonkers, New York 10704, by oral examination pursuant to Rule 4007.1 of the Pennsylvania Rules of Civil Procedure. The deposition will be held at the offices of Judicial Reporting Services, 120 Bloomingdale Road, Suite 104, White Plains, New York 10605, and will continue thereafter from day to day until completed. You are invited to attend and examine the witness. Steve D. Shadowen, I.D. No. 41953 Gordon A. Einhorn, I.D. No. 59006 Attorneys for Plaintiff Rite Aid Corporation SCHNADER HARRISON SEGAL & LEWIS LLP 30 North Third Street, Suite 700 Harrisburg, PA 17101 (717) 231-4000 HBDATA:8035 Custodian of Records at MailBoxes, Etc. to bring the following documents: All documents relating to the opening and maintenance of Mail Box No. 225 at MailBoxes, Etc. No. 2522, Yonkers, New York during the years 1997-1999 during which time Box No. 225 was designated to receive mail for an entity known as "New York Sales Tax CR." These documents include but are not limited to a list of all persons or entities whose mail was to be accepted at this box and the identity and address of all persons authorized to have access to or control of this box between 1997-1999. 2. All correspondence between MailBoxes, Etc. No. 2522 and the renters and/or agents for the renters of Mail Box No. 225 during the years 1997-1999. Complete documentation of all rental payments made on Mail Box No. 225 including but not limited to copies of any checks submitted in payment of rental fees. HBDATA:8035 r _ ? ?} ?i 1 1 1 L.J .-.?' DEC 1 9 2002 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION, Plaintiff, No. 02-5863 vs. DAVID KONEFF and SUSAN KONEFF Defendants COMMISSION TO: Any Notary Public or Court Reporter Licensed in the State of New York Having confidence in your prudence and fidelity, we have appointed you, and by these presents do give unto you full power and authority, in pursuit of an Order made in our Cumberland County Court of Common Pleas in the above cause, between Rite Aid Corporation and David Koneff and Susan Koneff to call before you at a certain day and place, by you, for that purpose, to be appointed, the Custodian of Records, MailBoxes, Etc. No. 2522, 976 McLean Avenue, Yonkers, New York, NY 10005-1101, as a witness in this cause; and then and thereto examine the witness upon his respective oath or solemn affirmation, touching the premises, and reducing his testimony to writing. And when you shall have so done, you are to send the same to the attorneys of record in this action. Further, that the courts of General Jurisdiction of the State of New York are requested to lend assistance with respect thereto, including, but not limited to, the issuance of subpoenas directing compliance. In testimony whereof, we have caused the seal of our Court to be affixed, this day of pee . , 200 TRUE COPY FROM RECORD In Testimony wh:rcof, I here unto set my hand Carlisle, Pa. and a nWIdf/dAof?l. Th' ......U.. Pro onotary HBDATA:8034 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION, Plaintiff, vs. DAVID KONEFF and SUSAN KONEFF Defendants No. 02-5863 COMMISSION TO: Any Notary Public or Court Reporter Licensed in the State of New Jersey Having confidence in your prudence and fidelity, we have appointed you, and by these presents do give unto you full power and authority, in pursuit of an Order made in our Cumberland County Court of Common Pleas in the above cause, between Rite: Aid Corporation and David Koneff and Susan Koneff to call before you at a certain day and place, b:y you, for that purpose, to be appointed Claire Zimmerman, Branch Manager of First Union Bank, Totowa Boro Office, 515 Union Boulevard, Totowa, New Jersey 07512, as a witness in this cause; and then and there to examine the witness upon her respective oath or solemn affirmation, touching the premises, and reducing her testimony to writing. And when you shall have so done, you are to send the same to the attorneys of record in this action. Further, that the courts of General Jurisdiction of the State of New Jersey are requested to lend assistance with respect thereto, including, but not limited to, the issuance of subpoenas directing compliance. In testimony whereof, we have caused the seal of our Court to be affixed, this -2L day of eC • , 200 A. TRUE COPY FROM RECORD In Testimony whereo'r, I here unto set my hand and the sea i rou at Carlisle, Pa. the co ns?L Thi ..i y f. ?..JG. . d:5 P otaryHBDATA:8034 ALI Pr thornaaryr DEC fY3?002 (?. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW RITE AID CORPORATION, Plaintiff, No. 02-5863 vs. DAVID KONEFF and SUSAN KONEFF Defendants. PROPOSED ORDER AND NOW, this day of December, 2002, upon consideration of Plaintiff Rite Aid Corporation's Petition Pursuant to Pa.R.C.P. 4015(b) and 42. Pa. Cons. Stat. § 5325 for the issuance of commissions to take depositions, IT IS ORDERED that the Petition is GRANTED and the Prothonotary is directed to issue commissions to take the depositions of the following individuals upon oral examination in accordance with the Pennsylvania Rules of Civil Procedure pursuant to the Notices of Deposition dated December 20, 2002: L=s? K to &Z 4 0?lt box?c„ Kon,ePF Custodian of Records Cornerstone South, Inc. 2100 W. 76th Street, Suite 510 Hialeah, FL 33016 C . f ? J. HBDATA:8102 ' i D Q. ? ? U IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION, Plaintiff, No. 02-5863 vs. DAVID KONEFF and SUSAN KONEFF Defendants. COMMISSION TO: Any Notary Public or Court Reporter Licensed in the State of Florida Having confidence in your prudence and fidelity, we have appointed you, and by these presents do give unto you full power and authority, in pursuit of an Order made in our Cumberland County Court of Common Pleas in the above cause, between Rite Aid Corporation and David Koneff and Susan Koneff to call before you at a certain day and place, by you, for that purpose, to be appointed the Custodian of Records of Cornerstone South, Inc., 2100 W. 76th St., Suite 510, Hialeah, Florida 33016, as a witness in this cause; and then and there to examine the witness upon his respective oath or solemn affirmation, touching the premises, and reducing his testimony to writing. And when you shall have so done, you are to send the same to the attorneys of record in this action. Further, that the courts of General Jurisdiction of the State of Florida are requested to lend assistance with respect thereto, including, but not limited to, the issuance of subpoenas directing compliance. testimony whereof, we have caused the seal of our Court to be affixed, this day of 200 a, 6?eal?fm- Pfo--tb nota Seal of the Court HBDATA:8034 RITE AID CORPORATION, Plaintiff V. DAVID KONEFF and SUSAN KONEFF, Defendants : IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA No. 02-5863 CIVIL ACTION - LAW JURY TRIAL DEMANDED PRAECIPE FOR ENTRY OF APPEARANCE TO: Curt Long, Prothonotary Cumberland County Courthouse One Courthouse Sqaure Carlisle, PA 17013 PLEASE ENTER our appearance on behalf of defendants David Koneff and Susan Koneff in the above-captioned matter. COSTOPOULOS, FOSTER & FIELDS By:- David J. Foster, Muire I.D.#23151 Leslie M. Fields, Esquire I.D.#29411 831 Market Street P.O. Box 222 Lemoyne, Pennsylvania 17013 (717) 76111-2121 t f$ f b? Dated: CERTIFICATE OF SERVICE I, David J. Foster, Esquire, certify that I have served a true copy of the foregoing Praecipe for Entry of Appearance on the individual(s) listed below by depositing the same in the United States mail, first-class, postage prepaid, from Lemoyne, Pennsylvania, addressed as follows: Steve D. Shadowen, Esquire Gordon A. Einhorn, Esquire SCHNADER, HARRISON SEGAL & LEWIS, LLP 30 North Third Street, Suite 700 Harrisburg, PA 17101 Counsel for Plaintiff Rite Aid Corporation ? n ,? 0 David J. Foster, quire Dated: , Ro 3 - ?? z? c?.. , ? r„r; _ ? i c--f r_? -_- 1 ?..y .., ?'j ?-? ? -_. ?i; `.?" .. ,, "? SHERIFF'S RETURN - OUT OF COUNTY CASE NO: 2002-05863 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND RITE AID CORPORATION VS KONEFF DAVID ET AL R. Thomas Kline , Sheriff or Deputy Sheriff who being duly sworn according to law, says, that he made a diligent search and and inquiry for the within named DEFENDANT KONEFF SUSAN but was unable to locate Her deputized the sheriff of YORK in his bailiwick serve the within WRIT OF SUMMONS to wit: He therefore County, Pennsylvania, to On January 15th , 2003 , this office was in receipt of the attached return from YORK Sheriff's Costs: So answer Docketing 6.00 Out of County .00 - Surcharge 10.00 R. Thomas Kline .00 Sheriff of Cumberland County .00 16.00 01/15/2003 SCHNADER HARRISON SEGAL LEWIS Sworn and subscribed to before me this day o J"j A.D. Prothonotafry SHERIFF'S RETURN - OUT OF COUNTY CASE NO: 2002-05863 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND RITE AID CORPORATION VS KONEFF DAVID ET AL R. Thomas Kline , Sheriff or Deputy Sheriff who being duly sworn according to law, says, that he made a diligent search and and inquiry for the within named DEFENDANT KONEFF DAVID but was unable to locate Him deputized the sheriff of YORK in his bailiwick , to wit: He therefore County, Pennsylvania, to serve the within WRIT OF SUMMONS On January 15th , 2003 , this office was in receipt of the attached return from YORK Sheriff's Costs: So answ Docketing 18.00 Out of County 9.00 Surcharge 10.00 R. Thomas Kline Dep York County 43.33 Sheriff of Cumberland County .00 80.33 01/15/2003 SCHNADER HARRISON SEGAL LEWIS Sworn and subscribed to before me this day of? a ?7 6V3 A.D. Prothonotary )5,j THE PRXV EXME5$ INC. YOg,, Pq 1>Cp2 5E3...I COUNTY OF YORK OFFICE OF THE SHERIFF 28 EAST MARKET ST., YORK, PA 17401 14. SHERIFF SERVICE INSTRUCTIONS PROCESS RECEIPT and AFFIDAVIT OF RETURN PLEASE TYPE ONLY LIE 1 THRU 12 DO NOT DETACH ANY COPES 1. PLAINTIFF/S/ 2. COURT NUMBER Rite Aid Corporation Q')-rQ91 -4-41 3. DEFENDANT/S/ 4. TYPE OF WRIT OR COMPLAINT David Koneff et al Writ of Summons SERVE 5. NAME OF INDIVIDUAL, COMPANY, CORPORATION, ETC. TO SERVE OR DESCRIPTION OF PROPERTY TO BE LEVIED, ATTACHED, OR SOLD. Susan Koneff 6 ADDRESS (STREET OR RFO WITH BOX NUMBER, APT NO ,CITY, BORO, TWP., STATE AND ZIP CODE) AT 760 ??-J+-z Drive Tip lb A 17339 7. INDICATE SERVICE: ? PERSONAL ? PERSON IN CHARGE DEPUTIZE ? ? 1ST CLASS MAIL ? POSTED ? OTHER York NOW December 11 20 02 I, SHERIFF OF COUNTY, PA, do hereby deputize the sheriff of York COUNTY to execute th' ake return t according to law. This deputization being made at the request and risk of the plaintiff. 8. SPECIAL INSTRUCTIONS OR OTHER INFORMATION THAT WILL ASSIST IN EXPEDITING tFRVIrF SHERIFF OF L;UUNTY OUT OF COUNTY CUMBERLAND ADVANCED FEE PAID BY ATTY. NOTE: ONLY APPLICABLE ON WRIT OF EXECUTION: N.B. WAIVER OF WATCHMAN - Any deputy sheriff levying upon or attaching anyfpsrophertydeputyunder or the sheriff the writmay leave same without a watchman, in custody of whomever is found in possession, after notifying person of levy or attachment, without liability on the part herein for any loss, destruction, or removal of any property before sherifrs sale thereof. ouc to any plaintiff 9. TYPE NAME and ADDRESS of ATTORNEY /ORIGINATOR and SIGNATURE E231-4000 LEPHONE NUMBER 11. DATE FILED STEVE D. SHADOWEN 12-9-02 12. SEND NOTICE OF SERVICE COPY TO NAME AND ADDRESS BELOW: (This area must be completed if notice is to be mailed). CUMBERLAND CO SHERIFF lmrw 13. lack nowledge receipt of the writ R. AyR EN S or complaint as indicated above. 16. HOW SERVED: PERSONAL ( ) RESIDENCE ( POSTED( ) POE( 17. ? 1 hereby certify and return a NOT FOUND because I am unable to locate the individual, compai 18. NAME AND TITLE OF INDIVIDUAL SERVED/ LIST ADDRESS HERE IF NOT SHOWN ABOVE (I 21 ATTEMPDat?e me rville Mile Int. Da Miles Int. 7 22. 23. u. 41. ? 42.1 550.1 C SHERIFF'S OFFICE ( ) OTHER etc. named above. (See remarks below.) 3tionship to Defendant) 19. Otte Time i Miles i Int. I Date 7///// /??1? ' '/ I ! -- SERVICE CALL (717) 771-9601 15. Bprgirp(igrMearing Date SEE REMARKS BELOW e 20. Time I Date Time nce Costs 24. Service Costs 25. N/F 26. Mileage 27. Postage 28. Sub Total 29. Pound 30. Notary 31. Surchg. 32. Tot. Costs 33. Casts Due or Refund Check No. Ign County Costs 35. Advance Costs 36. Service Costs 37. Notary Cert. 38. Mileage/Postage/Not Found 39. Total Costs 40. Costs Due or Refund ¢MED 9 SW RS f ,4RIAL 44. Signa MELISSA J. SHAFFER, -Ate . TARY Dep. n O City of York, York County 6. Si ature of o k 4 47. D TE My Co i6giop Expires April 20, 2008 Co my Sheri W M. HOSE Ji 1-9-03 48. Signature Foreign v 49. DATE County Sheriff NOWLEDGE RECEIP OF SH IFF' TURN IGNATURE 1THORIZED ISSUING AUTHORITY AN rn r 51 DATE RFCFIVFA b F? 3. / ? THE R1MNf EFPpE55, INC. YORK, PP IJG02 1553BfTBl1 / /-1 c_ ??- S / M 1/Vl ('? 0 r/1 MC 3/OI COUNTY OF YORK OFFICE OF THE SHERIFF 28 EAST MARKET ST., YORK, PA 17401 SHERIFF SERVICE PROCESS RECEIPT and AFFIDAVIT OF RETURN 1 3. Rite Aid Corporation SERVICE CALL (717) 771-9601 INSTRUCTIONS PLEASE TYPE ONLY LIE 1 THRU 12 DO NOT DETACH ANY COPES 4. TYPE OF WRIT OR COMPLAINT David Koneff et al Writ of Su coons SERE 5 NAME OF INDIVIDUAL COMPANY CORPORATION, ETC. TO SERVE OR DESCRIPTION OF PROPERTY TO BE LEVIED, ATTACHED, OR SOLD David Koneff 6. ADDRESS (STREET OR RFO WITH BOX NUMBER, APT. NO., CITY, BORO, TWP., STATE AND ZIP CODE) AT 760 Seitz Drive Lewisberry, PA 17339 01 ? 7. INDICATE SERVICE: ? PERSONAL ? PERSON IN CHARGE DEPUTIZE ? 1ST CLASS MAIL L) POSTED ? OTHER NOW Decl Aber 1J. 2002 I, SHERIFF OF'6M COUNTY, PA, do hereby deputize the sheriff of York COUNTY to execut e ake return according to law. This deputization being made at the request and risk of the plaintiff. f - 8. SPECIAL INSTRUCTIONS OR OTHER INFORMATION THAT WILL ASSIST IN EXPEDITING SERVICE: SHERIFF OF *MW COUNTY p OUT OF COUNTY Oberland CUMBERLAND ADVANCED FEE PAID BY ATTY NOTE: ONLY APPLICABLE ON WRIT OF EXECUTION: N.B. WAIVER OF WATCHMAN - An deputy sheriff le without a watchman, in custody of whomever is found in vying upon or attaching any property under within writ may leave same herein for any loss, destruction, or removal of an possession, after notifying person of levy or attachment, without liability on the part of such deputy or the sheriff to any plaintiff any Property before sheriffs sale thereof. , 9. TYPE NAME and ADDRESS of ATTORNEY/ ORIGINATOR and SIGNATURE 10. TELEPHONE NUMBER 11. DATE FILED STEVE D.SHADOWEN 30 N. 3rd ST. STE 700 HBG,PA 17101 1231-4000 12-9-02 12. SEND NOTICE OF SERVICE COPY TO NAME AND ADDRESS BELOW: (This area must be completed if notice is to be mailed). CUMBERLAND CO. SHERIFF 13. 1 acknowledge receipt of the writ / or complaint as indicated above. R. AH R EN 14. DAiT? RECEII(6D 16. HOW SERVED: PERSONAL(L4RESIDENCE (y( POSTED( ) POE( ) SHERIFF'S OFFICE ( ) lOiTHUELR ( ) 17. ? I hereby ce rtify and return a NOT FOUND because I am unable to locate the individual, company, etc. named above. (See remarks below.) 18. E AND TITLE OF INDIVIDUAL SERVED I LISTADDRESS HERE IF NOT SHOWN ABOVE (Relationship to Defendant) 19. to o 1. ATTEMPTS Date Time t t n Miles Int. Date Time Miles Int. Date Time Miles Int. Date Time Miles Int. Date Ti' Iles i ?C7 Costs 24. ervice Costs 25. N/F 26. Mileage 28. Sub Total 129. 35. Advance Costs 136. Service Costs 37. Notary Cert. 38. 1516{p rafioo/Hearing Date SEttESS REMARKS BELOW 20. Time of Int. I Date I Time I Miles I' Int. 30. Notary 31. Surchg. 132. Tot. Costs 33. Costs /-/I-6-p? Found 139. Total Costs 1 40. Costs Due or Refund No. e7? 41. AFFIRMED and subscribed to before me this 9 O AN RS 42. day of 44. Signs 5 E A tits 1N?p? Dep. She JS _ELISSA J: $HAFFER, Ootry tiblicT RY 4 S tN ign re of k lJ .City of York, York County Coun Sheri 47. D TE ?j2 Gr. ? I PSI Onnnission pir 20,2 j HOSE 4!22L? 48, Signs of Foreign G 4- J-9-03 9. DATE County Sheriff 50. I ACK OWLEDGE RECEIPT OF THE SHERIF ' RN GNATURE OF A THORIZED ISSUING AUTHORITY ANn Tt 51. DATE RFr:FivFn FEB 0 7 2,00,?' IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW RITE AID CORPORATION, Plaintiff, vs. No. 02-5863 DAVID KONEFF and SUSAN KONEFF ; Defendants. ORDER AND NOW, this ? day of February, 2003, upon consideration of Plaintiff Rite Aid Corporation's Third Petition Pursuant to Pa.R.C.P. 4015(b) and 42 Pa. Cons. Stat. § 5325 for the issuance of commissions to take depositions, IT IS ORDERED that the Petition is GRANTED and the Prothonotary is directed to issue commissions to take the depositions of the following individuals upon oral examination in accordance with the Pennsylvania Rules of Civil Procedure pursuant to the Notices of Deposition dated February 3, 2003: Custodian of Records Custodian of Records Bank of America Total Bank 1 SE Third Avenue 2720 Coral Way Miami, FL 33131 Miami, FL "33145 Custodian of Records Custodian of Records Ocean Bank Eastern National Bank 780 NW 42nd Avenue 799 Brickell Plaza Miami, FL 33126 Miami, FL 33131 J. 02- 12-cII HBDATA:8253 3f t? 0 :1 (=!d ? 1 031 Co IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION, Plaintiff, No. 02-5863 vs. DAVID KONEFF, DANIEL SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants. DECLARATION OF GORDON A. EINHORN I am an attorney with Schnader Harrison Segal & Lewis LLP, attorneys for Rite Aid Corporation in the above matter. 2. Following the commencement of this action I caused a series of subpoenas to be served on various banks through which the funds passed which were misappropriated by defendants from Rite Aid as detailed in the Complaint. 3. On or about December 23, 2002 I caused a deposition subpoena to be served on First Union Bank, Harrisburg, Pennsylvania requesting various documents including monthly statements and canceled checks concerning an account owned by Defendant F & S Corporate Advisors d/b/a New York Sales Tax Credit. This subpoena was issued because Rite Aid knew from its own canceled checks that 32 checks sent to New York Sales Tax Credit had been deposited into this First Union account. HBDATA:8819 subpoena, First Union Bad produced Monthly statements response to this canceled checks revealed that 4. In The Yoxk Sales Eden wrote checks on the First Union and canceled checks for Defendant Brian Corp to Aid check, Inc. shortly after the deposit of each Ri orate Advisors, Corporate Advisors, Inc. or Federal & State s in Florida, including Nations account payable to F & S companies at bank owned by those comp which were deposited into accounts Banks, ocean Bank, Total Bank, andEastemNationalBank• subpoenaon 5 on or about March 4> 2003 I caused to be served a deposition ents relating to an production of various documents s lvania copies of Fulton Bank, Lancaster, Penn Y bank statements and account at that bank owned by Defendant David Koneff including checks deposited by Koneff into that account. In response to this subpoena Fulton Bank produced Koneff s monthly 6' These documents reveal that each statements and copies of checks deposited into Koneff s account. thereafter wrote one or time Brian Eden deposited Rite Ard's funds into a Florida account, ff into his account at Fulton Bank. more checks to David Koneff which were deposited by Kone and 2000 Koneff receive numerous checks totaling approximately S1.6 million- Between 1997 ies of some of the checks received by Koneff. e and correct cop be Attached hereto as Exhibit 1 are 20031 caused a second deposition subpoena to 7 on or about March 28, Lancaster, Pennsylvania requesting copies of canceled checks that Koneff had n Fulton Bank, served o roduced copies of checks written written on his Fulton Bank account. Pro 8 in response to the subpoena, Fulton Bank neff on his account. These checks and records of electronic transfers showed the by David Ko HBDATA'M19 following: -2- a. approximately $678,000.00 was transferred to Koneff s investment account at Charles Schwab & Co.; b, approximately $400,000.00 was used to purchase certificates of deposit from Fulton Bank; C. approximately $300,000.00 was used as partial payment for the construction of Koneff s residence at 76 Seitz Drive, Lewisberry, pennsylvania17339; d. approximately $110,000.00 was used to purchase two parcels of land located in Hampshire County, West Virginia. 9. On or about February 11, 2003 I caused a deposition subpoena to be served on Eastern National Bank, Miami, Florida concerning an account at the bank owned by Federal & State Corporate Advisors, Inc. The subpoena also requested documents pertaining to this account and canceled checks. This was one of the Florida accounts into including copies of monthly statements which Brian Eden deposited funds that were initially deposited at First Union Bank after being received from Rite Aid. It was used by Eden for this purpose from July 1999 until December 1999. 10. In response to the subpoena, Eastern National Bank produced monthly statements and canceled checks. These canceled checks again confirmed Fulton Bank's records that checks had been written by Brian Eden to David Koneff which were deposited by Koneff into his Fulton Bank checking account. One canceled check shows that Federal & State Corporate Advisors sent a check for $218,128 to Mumper Construction, Co. ("Mumper") as the initial payment for the construction of Koneff's home. Records previously obtained from Mumper show that this was the exact amount of the initial payment credited to Koneff. HBDATA:8819 -3- 11 The canceled checks also show that between July 16, 2000, Eden sent numerous checks to Daniel Semic totaling $274,760.82. A correct copies of some of the checks received by Semic. 1999 and June 26, Attached hereto as Exhibit 2 are true an 12. Using the information produced by First Union Bank and Fulton Bank, I constructed a chart showing how checks written by Rite Aid to New York Sales Tax Credit were initially deposited into New York Sales Tax Credit's account at First Union Bank; that the money was then transferred by check to various accounts in Florida belonging to F & S Corporate Advisors or Federal & State Corporate Advisors; and that checks were then written on the Florida accounts to at Fulton Bank. A true and correct copy of the chart I David Koneff and deposited in his account created using information produced by the banks is attached hereto as Exhibit 3. 13. The foregoing statements are true and correct to the best of my knowledge, information, and belief and are made subject to the penalties of 18 Pa. C.S. 4904 relating to unworn falsification to authorities. Dated: June 10, 2003 HBDATA:8819 -4- Exhibit A FEDERAL & STATE CORPORATE ADVISORS, INC. xiww. nq r.. wart sw IWEVI, MRwR ]1011 ?]' tout FOR J r^`x fC? ?y w0o12ssw ];0ss0aR15s?: 1266 DE6?v' s 136,zs%w SIM 06 1as7ssf•06 1001362500010 T )1 l/ S F kk'rY 4?1W?,? 6004 FEDERAL & STATE CORPORATE ADVISORS, INC, 111"57 n- YDwxE21110 .. 64 4R .. PATS w. PAY ? Jsll3,7to- TOMIT VI?Q /?+?R?(.fM1+r?.Wf'1 ?? i j?+N ..J??i'DDUM1Re ®c ?%EastemNationalBank - ---- sN • Rw s.,N ?? iwu nw. NR, f? FOR ?- - r006004r C0s7002533f: 13i1800006r. fpp 11375000.' 1?Y 4 - 6022 FEDERAL & STATE CORPORATE ADVISORS, INC. ]a MST DAYS °/ 24 ¢9 iuixe ?N1 .J s f0 ry0.r? of . RS ME= ggyy stern National Bank FOR J0005000000! w006022w 1:0670025330 11118000061' Dkk! ] d` "ValM1NII91i Yfd {15 Xk4 tl } ,• Exhibit B FEDERAL & STATE CORPORATE ADVISORS, MG. ` *a?ku ' ?$ ,. n IVES"6Pr STREET M 1310 A? uV iEAV FL^R10R JXI.6 ' .Ltd x1 PRY I'D M, ,001 National Bank ' FOR _. .. _ _. ... ._. __ __... _.._ ? .? ... 1'00602LO 1:OS70et5334 ll.li Dt?a6,;;r+ Exhibit C Rite Aid Checks to NY Sales Tax Credit Deposited to NY Sales Tax Credit Acct No: 2030089024334 NY Sales Tax Credit F&S checks to Koneff checks to F & S Corp Advisors Deposited to Koneff Account Deposited to F&S Accounts in No: 3632-28686 at Fulton Bank at First Union Florida Banks Payor Bank in ( ) Date Amount Date Check No. Bank Amount Date Check No Bank Amount 1/16/97 $89,500.00 1/2197 1/17/97 1040 1041 (NB) (OB)' $6,000.00 $4,000.00 _ 1/3197 _ 1/17197 243 247 (OB) (OB) $573.50 _ $573.50 1124197 1042 (TB) $4,000.00 1/17/97 248 (OB) _$573.50 1/21/97 249 (OB) $573.50 Totalal for January $1,147.00 1/29/97 $168,934.00 2/5/97 1043 (TB) $63,000.00 1/30/97 252 (013) $573.50 _ 216/97 1044 (CS) $100,000.00 2/7/97 253 (OB) $573.71 2/21/97 1045 (CS) $100,000.00 2/11197 2/12/97 5002 _ 6110 (C/TB) (TB) $833.65 $573.50 " - - 2/20/97 5973 _ 2127197 5979 Total Total f (NB)' (NB) $573.71 $573.50 $3,701.57 3/5/97. $85,569.00 3/12/97 1046 (TB) $85,000.00 ? 3/5/97 5985 3/18197 5994 (NB) (NB) $573.50 - $573.50 - - $85,664.70 4/10/97 - 4/21/97 4/21197 047 1048 NB) $53,400.00 (TB) $32,000.00 3/20/97 5997 3/21/97, _ 6006 3124/97 5005, 3/27/97 6009 - 4/3/97. 6015 Total for March 4/10/97 6021 4/14/97 5008 (NB) (NB) (C/TB) (NB) (NB); (NB) (C/TB) $573.50 $1 $891.75 $891.65 $573.50 $ .50 $14,,368368.90 $573.50 $1,023.40 - 4/17/97 ' _ 6026 (NB) $573.50 1 4/24/97 6031, (NB) 573.50 "-" - - _ 4/24/97 6032 (NB) $24,311.11 - _ ' - -, 5/1/97 j 8/97 7 6038 . _ . 6043 6 044 (NB) (NB) (NB) , _ $635.50 $635.50 $1 683.14 . 5/97 6051 (NB) $635.50 Total for April $45,644.65 5/19/97 $53,600.00 5/22/97 . 6057 (NB) _ $635.50 5/29/9,7 - 1 5012 (CB) $529.56 ? __5_/29/97 - 6063 (N (NB) $635.50 Total May for _ $1,800.56 6/5/97 $34,495.00 6/11/97 1052 (TB) $53,600.00 6/5/97 6070 (NB) $635.50 - 6/18/97 1053 (CS) $34,495.00 6/5/97 6112197 - 6/19/97 6/24/97 6_/26/97 6071 6078 _ - 6084 : _ 5017 6090 (NB) (NB) (NB) (C/TB) (NB) $4,448.50 $635.50 $635.50 $4,449.00 $635.50 7/3/97 6097 ___(NB) $22,242.61 _ - 7/3/97 6096 (NB) $635.50 - -- "-- _ 7/6/97 5_0_22_ (C/TB) $1,149.40 Total for June $35,467.01 7/9/97 $55,220.00 7/23/97 1054 (TB) $55,000.00 7/10/97 6104 (NB) $635.50 7117197 6110 (NB) _ $635.50 7/24/97 _ 6116 --- (NB) $635.50 `- - _ 8/1/97 6122 (NB $635.50 Total for July $2,542.00 TB =Total Bank NB = Nations Bank/Intercontinental Bank '.OB = OceanOcean Bankj? __ 'CS = Check issued to Cornerstone South and Deposited to its account at Total Bank _ C/TB = Check from Cornerstone South's account at Total Bank Rite Aid Checks to NY Sales Tax Credit) NY Sales Tax Credit rae cnecKS to Konen Deposited to NY Sales Tax Credit _ checks to F & S Corp Advisors Deposited to Koneff Account Acct No: 2030089024334 n Deposited to F8S Accounts i No: 3632-28686 at Fulton Bank _ at First Union Florida Banks Payor Bank in ( ) Date Amount Date Check No. Bank Amount Date Check No Bank Amount 8/6/97 $160,700.00 8/21/971 1055 (TB) $160,000.00 8/8/97 5 (TB) $716.52 _ 8/14 1/97 8/21/971 8/22197 6128 5029 6132 (TB) (TB) TB) $635 $ .19 $635 .50 $2,184.80 $635.50 8/29/97 6137 (TB) $635.50 9/4/97 $178,000.00 9/15/97 1057' (TB) $178,000.00 Total fo 9/5/97 9/5/971 9/11/971 9/19/97 9/25/97 Total for r August 6144 , 6143 6142 6150 6155 6159 September (TB) (TB) (TB) (TB) (TB) (TB) $7,788.01 $31,314.26 $ $6 5.49 $6 35.50 $635.50 $635.50 $635.50 $36,034.75 10/7197 $110,000.00 10/27/97 1058 (TB) $110,000.00 10/7/97 6163 (TB) $635.50 10/7/97 5036 (CliB) $2,899.81 10/9197 8540 (TB) $800.00 - __ -- 10/10/97 10/10/97 _10/10/97 _ _ 6167 6168 6169 (TB) (TB) (TB) $635.50 1 _ $2,734.41 $3,044.17 10/17/97 6175 (TB) _ $635.50 10124/97 6179 TB) $635.50 10/31/97 6185 (TB) $635.50 _ 10/31/97. 6186 (TB) $3,591.01 _. 11/7/97 16191 (TB) $635.50 -- 11/14/97 6195 (TB) $635.50 11121197 6199 !(TB) $635.50 - - - -__ _ 11/28197 --11/28/97 --1211/97 12/5/97 12/12/97 6202 6203 5040 6207 6211 (TB) (TB) (C/TB) (TB) (TB) $635.50 $5,877.51 1 $1,225.19 $635.50 $635.50 Total for Oct., $27,162.60 Nov., and Dec. Total $1,021,682.70 Total $175,657.05 TB Total Bank NB = Nations Bank/Intercontinental Bank _ OB =Ocean Bank __ CS =Check issued to Cornerstone South and Deposited to its account at Total Bank _ C/TB =Check from Cornerstone South's account at Total Bank Rite Aid Checks to NY Sales Tax Credit NY Sales Tax Credit checks to _ . Deposited to NY Sales Tax Credit Federal & State Corp Advisors Account No: 2030089024334 posited to Federal & State Corp Advisors at First Union Acct No: 606106765-06 at Total Bank - _Federal & State Corp Advisors _ checks to Koneff ± Deposited to Koneff Account No: 3632-28686 at Fulton Bank 7 i Date Amount Date - Check No. Amount Date Check No Amount 12119197 $139,000.00 1/21/98 1059 $70,000.00 1/29/98 495098 $30,000.00 1/21/98 1060. $69,000.00 1/29/98 495097 _ $6,000.00 1/30/98 2 $5,069.42 1/19/98 $173,929 213/98 1061 $173,929.00 - Total for _ 2/3/98 - January $41,069.42 495101 $5,407.00 _ : 216/98. 5 $860.25 _ 2/13/98 0.25 _ $8 - 2/19/98 1004 - _ $7,046.00 3/4/9$172,258.00 3/16/98 3/18/98 1063 1064 2/20/98 11 1 Total for February -- $86,129.00 /1 /98 17-11 $86,129.00 3/13/98 120018 3/19/98. 1018 3120/98 23 /23/98 1027 3/23/98 1025 3/23/98 1023 5 $860.25 $15,033.75 _ $860.25 $86625 $18,000.00 $860.25 $6,577.20 $12,000.00 $34,002.00 _ 3/27/98 26 Total for March ' $860.25 $74,020.20 4/7198 $193,509.00 4/15/98 1065 $96,754.50 413/98 29 $860.25 - 4/15/98 1066 $96,754.50 _ -- -- '. 4/18/98 1036 4110198 32 4/17/98 35 4/24/98 38 4/30/981 1039 $15,000.00 $860.25 $860.25 $860.25 . $27,725.00 - T Total for April $46,166.00 5/6198 $175,600.00 5/27/98 1070 $87,800.00 5/1/98, 41 $860.25 5/28/98 1069 $87,800.00 , 518/98 44 1 $860.25 5115/98 47 $860.25 5/22/98 50 $860.25 -? 5/29/98 53 $860.25 Total for May $4,301.25 . 6/3/98 $174,500.00 6/22/98 1071 $87,250.00 . 6/1/98 1060 $3,000.00 _ 6/26/98 1072 $87,250.00 6/3/98 1062 $16,820.00 - __ 98 56 $860.25 - _ 6/8/98 . 1056 $40,333.34 -- - 6/12/98 1 59 _$860.25 _ _ _ 6/19198 62 ' $860.25 _ -. _ _ 6/26/98 1076 $_350.00 -? _ 6/26/98 65 $860.25 Total for June $63,944.34 1 . -- 7/9198 $177,500.00 7/23/98(?) ' 1074 $95,000.00 . 7/3/98 68 $860.25 7/24/98(?) 1075 $82,500.00 . 7/8198 1085 $8,400.00 7/8/98 1084 $40,333.33 - -?-- 7/10198 71 _ $860.25 _ 7/17198 74 $860.25 7/22/98 1091 $19,625.64 7/24/98 77 $860.25 7/31/98 80 $860.25 Total for July $72,660.22 8/6/98 $179,300.00 8/25/98 1076 $79,534.32 8/3/98 1103 $15,220.32 _ 8/26/98 1077 $50,000.00 8/5/98 1. 1111 $43,333.33 8/27/98 . 1078"` $50,000.00 815/98 1106 ' $10,875.00 8/7198 83 $860.25 8114/98 86 $860.25 " Checks 10 76, 1077, & 1078 not produced'" 8/1_5/98 1119 $4,200.00 -- 8/21/98 89 $860.25 8/28/98 . 92 $860.25 Re Aid Checks to NY Sales Tax Credit NY Sales Tax credit cnecKS to reaeral a amre ?ul I, .V. _ it Deposited to NY Sales Tax Credit Federal & State Corp Advisors checks to Koneff Account No: 2030089024334 Deposited to Federal & State Corp Advisors Deposited to Koneff Account at First Union Acct No 606106765-06 at Total Bank" No: 3632-28686 at Fulton Bank Date Amount Date Check No. Amount Date Check No Amount Total for August $77,069.65 " 918/98 $179,500.00. 9/27/98 1079 _ $89,975.00 914/98- 95. $860.25 9/30/98' 1080 $89,525.00 9/9/98 1135 $6,105.00 9/9 9/98' 9/11/98 1133 99 98 $1,303.33 $27,704.70 $860.25 9/18/98 9/18/981 103 105 $1,046.25 $2,910.27 ". - 9124/98 108 ' $ $953.25 ?Z Total for Septemb r .30 $4111, _ - 10/2/98 10/6/98 10/8198 10/9/98 1 1137 1143 114 L $953.25 $19,050.00 $7,290.67 $953.25 10/16/98 , 117 $953.25 10/19/98 1157, $17,000.00 10119198 1159 $37,366.67 " 10/19/98 1162 $5,685.97 10/23/98 120 $953.25 10/30/98 123 $953.25 " - Total fo r October $91,159.56 11/5/98 $182,229.07? 11/23/98 1083 $89,000.00 11/13/98 . 130 _ $953.25 11/23/98 1084 $93,000.00 - 11/20/98 133 $953.25 - "- _ _ _ 11124198 1179 $5,000.00 11/24/98 1180 $55,000.00 - 11/27/9 136 $953.25 Total for r November ' $62,859.75 12/2198 $184,400.00 12/14/98(?) 1085 _ $92,000.00 1214/98 139 $953.25 12/17/98(?) , 1086 $98,000.00 12/11/98 . 142 $953.25 -" - --- 12115/98 _ 1202 $16,500.00 " - 12/15/98 1201 $17,309.27 12/18/98 145 $953.25 _ _"- - 12/25/98 149 $31,139.50 - 12/25/98 148 $953.25 ? Total for December !. $68,761.77 Total $1,749,496.00 Total $658,789.21 Rite Aid Checks to NY Sales Tax Credit Deposited to NY Sales Tax Credit I Acct No: 2030089024334 NY Sales Tax Credit _ Federal & State Corp Advisors checks to Federal & State Corp Advisors _ checks to Koneff Deposited to Federal & State Corp Advisors ?- Deposited to Koneff Account at First Union Acct No: 606106765-06 at Total Bank No: 3632-28686 at Fulton Bank or Acct No: 1118000006 at Eastern National Bank beginning w/ check no. 1103 Date Amount Date Check No. Amount Date Check No Amount 1/41991 3/3/99 _ $183,000.00. $186,600.00 1/11/99 1/12/99 3/14/99 1087 1089 1090 _ $65,500.00 $59,000.00 $59,000.00 _ 1/15/99 - 1219 1/15/99 1222 Total for January 3/16199 1232 $8,435.52 _ $49,425.00 $57,860.52 000 .00 $10, 3/15/99 1091 $61,500.00 _ 3/16/99 .44 $ ,368 _ 5 3116/99 1092 $66,100.00 26199 . 3/ 1238 $1,400.00 4/2/99 152 $17854.02 - Total for February $34,622.46 ?- 4/6/99 $181,000.00 4120199 1093 $61,000.00 4/12/99 1045 $35,944.83 . _ 4/20/99 1094 $65,000.00 4/13/99 missing $107,928.55 /3/99` 185,000.00 4/20/99 5/10/99 5/11/99 5/12/99 1095 1096 1097 1098 _ $55,000.00 $61,000.00 $65,000.00, $59,000.00 4/23/99 1242 4/30/99 1244 Total for March 5/14/99, At 5/16/99 5/17/99 $10,284.80 $8,966.00 $163,124.18 $860.25 $6,102.00 $6,475.67 $843.25 -? 1254 $55,000.00 5/25/991 1256 $2,075.00 5/28/99 164 $843.25 - 6/1/99 $188,400.00 619/99 6/10/99 1099 1100 $59,000. $65,000.00 _ Total for April 0 6/4/99 167 6/11/99' 170 $72,199.42 $843.25 $843.25 6/12199; 1101 $64,400.00 '. 6/18/99 173 _ $843.25 -- 6121199 1262 $6,937.74 6/21/99 1266 $136,250.00 6/25/99 176 $843.25 "-- - Total fo r June $146,560.74 - 7/1/99 $189,150.00 7/10199 1103 $58,500.00 7/2/99 179 $843.25 7/10/99 1104 $71,650.00 - - 7/9/99 182 $843.25 _ _ 7/14/99 1105 - 15 9,000.00 - /l 4/99 7/16/99 7/19/99 7123/99 7/28/99 6002 185 6007 _ 188 6013 . $9,282.00 $843.25 $5,231.78 $843.25 ' $4,000.00 /4199 185,000.00 110199 8112/99 1106 1107 69,000.00 $61,000.00 7/30/99 8/2199 Total f 816199 8/15/99 _ 191 1 6004 or July 194 _ 6018 $843.25 $113,750.00 $136,480.03 .25 $7,290,290.59 8/16/99 1108 $55,000.00 8/16/99 . 6020 $11,040.00 8/20/99 200 $843.25 8/24/99 6022 $50,000.00 8/27/99 203 $843.25 Total for August $70,860.34 9/10199 $188,000.00 '. 9/23/99 1111 $58,000.00 _ 9/10/99'.. 209 $843.25 9/23/99 1112 $79,000.00 9/16199 6027 $16,205.05 9/24/99 1113 $54,000.00 9/17/99 212 $843.25 9120/99 6033 $7,000.59 9/24/99 215 $843.25 Total for September $25,735.39 Rite Aid Checks to NY Sales Tax Credit NY Sales Tax Credit Deposited to NY Sales Tax Credit checks to Federal & State Corp Advisors Acct No, 2030089024334 Deposited to Federal & State Corp Advisors at First Union Acct No: 606106765-06 at Total Bank or Acct No: 1118000006 at Eastern National - Bank beginning w/ check no. 1103 Federal & State Corp Advisors checks to Koneff Deposited to Koneff Account No: 3632-28686 at Fulton Bank Date Amount Date Check No. Amount Date Check No Amount 9/29/99 $183,000.00 10110/99 1114 _ $56,000.00 10/1/99 218, $843.25 _ 10/11/99 1115 $68,000.00 10/8/99 221 $843.25 II - 10/??9 1117 $59,000.00 10/15/99 _ 224 $843.25 ?NI _ I 10/22/99 226 $843.25 F for October $3,373.00 10/27/99 $186,000.00 11 /?/99 1118 $68,000.00 10129199 228 $843.25 11/3/99 1119 $63,000.00 11/5/99 230` $843.25 1 - 12/1199 11/4/99 00.001 12/6/99 $196 1120 121 $55,000.00 ? $69,000.00 11/12/99 11/19199 11/19199 11/26/99 Total for N - 12/3/99 232 234 235 238 ovember 240 $843.25 $917.69 $15,887.50 $934.41 $20,269.3 5 $934.41 , _ 1217/99 1122 _ $67,000.00 12/8/99 . 6061 $2,500.00 1218199 1123. $60,000.00 ;l 2110/99 242 _ $934.41 -- - -"- 12/20199 1124 $1,305.41 ?- - 12/14199 12/15/99 6066 6072 $5,000.00 ' _ $9,134.69 'Memo says "close account" 12/17/99 . 244 _ $934.41 12V120//99 1 6079 _ $300.00 - 12124/99 _ 246 _ $934.41 12/31/99 248 $934.41 Total for December $21,606.74 Total $2,051,150.00 Total , $752,692.17 Rite Aid Checks to NY Sales Tax Credit NY Sales Tax Credit checks to _ Federal & State Corp Advisors Deposited to NY Sales Tax Credit Federal & State Corp Advisors checks to Koneff Account No: 2030089024334 Deposited to Federal & State Corp Advisors Deposited to Koneff Account at First Union Bank Acct No: 606106765-06 at Total Bank No: 3632-28686 at Fulton Bank or Acct No: 1118000006 at Eastern National- - - Bank beginning w/ Check No: 103 Date Amount Date Check No: Amount Date Cheek No Amount N/A N/ 2/9/00 6084 $4,978.43 6088 3/9/00 $5,458.63 "?? -- ..6091 3/17/00 4/29/00 6094 6/26/00 6111 _ $1,547.50 $10,684.72 $5,137.01 8/4/00 255 $1,227.00 " 8/22/00 6112 8/25/00 257 /31/00-- cashiers check . A _ Total for 2000 $4 C> D O C c -n C, ' o 'n y r' -< IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION, Plaintiff, No. 02-5863 VS. DAVID KONEFF, DANIEL SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants. NOTICE TO DEFEND YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this 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 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 Plaintiffs. YOU MAY LOSE MONEY OR PROPERTY OR OTHER RIGHTS IMPORTANT TO YOU. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Legal Services, Inc. 8 Irvin Row Carlisle, PA 17013 Telephone: (717) 243-9400 HBDATA:8819 IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION, Plaintiff, No. 02-5863 vs. DAVID KONEFF, DANIEL SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants. COMPLAINT Preliminary Statement This case involves the misappropriation from Plaintiff Rite Aid Corporation ("Rite Aid") of at least $6 million by David Koneff ("Koneff') and Daniel Semic ("Semic"), both former employees in Rite Aid's Tax Department, and co-conspirators F & S Corporate Advisors, Inc. ("F & S"), Federal & State Corporate Advisors, Inc. ("Federal & State") and their President, Brian Eden ("Eden"). Pursuant to their scheme, defendants contrived to create the appearance that F & S (d/b/a New York Sales Tax Credit) had been retained by Rite Aid to audit sales tax payments made by Rite Aid to the State of New York for the purpose of obtaining refunds for Rite Aid of tax overpayments made to the state. From 1996 through 1999, defendants Eden and New York Sales Tax Credit submitted requests for payments to Rite Aid falsely claiming to have earned them for sales tax refunds obtained for Rite Aid. These requests were received and approved by Defendants Koneff and Semic despite the fact HBDATA:8808 that New York Sales Tax Credit had not obtained any tax refunds for Rite Aid and were not entitled to any payments, a fact of which Koneff and Semic were well aware. Between January 1996 and December 1999 Koneff and Semic directed that in excess of 40 payments be made by Rite Aid to New York Sales Tax Credit totaling more than $6 million. These misappropriated funds were then shared by the Defendants Koneff, Semic, Eden, F&S, and Federal & State. Rite Aid brings the claims stated below in order to recover its funds wrongfully obtained by the Defendants. Parties 1. Rite Aid Corporation is a corporation incorporated in the state of Delaware and has its principal place of business in Camp Hill, Pennsylvania. 2. Defendant David Koneff is a former employee of Rite Aid and until April of 2000 held the position of Manager in Rite Aid's Tax Department. On information and belief, David Koneff is a resident of York County, Pennsylvania residing at 760 Seitz Drive, Lewisberry, Pennsylvania 17339. Defendant Daniel Semic is a former employee of Rite Aid and until July of 2000 held the position of Senior Director in Rite Aid's Tax Department. On information and belief, Semic is a resident of Dauphin County, Pennsylvania. 4. Defendant F & S Corporate Advisors, Inc., d/b/a New York Sales Tax Credit is a Florida corporation with its principal place of business at 2100 West 76`h Street, Suite 510, Hialeah, Florida 33016. Defendant Federal & State Corporate Advisors, Inc. is a Florida corporation with its principal place of business at 2100 West 76`h Street, Suite 510, Hialeah, Florida 33016. _2_ HBDATA:8808 6. Defendant Brian Eden is the President and registered agent of Defendants F & S Corporate Advisors, Inc. and Federal & State Corporate Advisors, Inc. Eden is a resident of Florida. Facts Common to All Counts Rite Aid has retail drugstores throughout much of the country and buys goods and services in numerous states. 8. In purchasing goods and services, Rite Aid is periodically charged state sales tax despite the fact that the transactions should have been exempt from such payment under state law. In order to recoup these funds, Rite Aid occasionally uses the services of outside firms which 1) audit the sales tax payments paid by Rite Aid to individual states; 2) identify overpayments; and 3) obtain refunds for Rite Aid from the state taxing authorities. These outside firms are paid commissions based upon a percentage of the moneys refunded. 9. Defendants Koneff and Semic, as managers within Rite Aid's Tax Department, were intimately familiar with these procedures and were in a position to abuse those procedures for personal gain. 10. On information and belief, Defendant Eden operates various companies which obtain tax refunds and credits for corporate clients and is also intimately familiar with these procedures and how they can be misused. 11. In or about January 1996, Defendants Koneff, Semic, Eden, and F & S, conspired to defraud Rite Aid and misappropriate its funds. 12. According to the defendants' scheme, Eden, through his company New York Sales Tax Credit (a d/b/a of defendant F & S), submitted requests for payment to Rite Aid falsely HBDATA:8808 -3- claiming that sales tax refunds had been obtained from New York State and requesting payment of commissions based upon the amount of the purported tax refunds. These requests were received at Rite Aid by Koneff and Semic who, knowing that they were false, approved the payments and directed that checks be issued by Rite Aid to New York Sales Tax Credit. 13. In furtherance of this scheme, on or about April 5, 1996 Defendant Eden opened a checking account at First Union Bank, Totowa, New Jersey in the name of F & S Corporate Advisors, Inc. d/b/a New York Sales Tax Credit. Eden also rented a private mailbox at MailBoxes, Etc. in Yonkers, New York to be used as a mailing address for Rite Aid's payments to New York Sales Tax Credit. New York Sales Tax Credit had no actual place of business in New York state or, for that matter, anywhere. The Yonkers address was apparently obtained solely to create the appearance that New York Sales Tax Credit was a legitimate New York-based company. 14. The Defendants' plan was put into effect in or about January 1996 when the first request for payment was made by New York Sales Tax Credit requesting a payment in the amount of $5,000.00. According to plan, Koneff and Semic approved payment of the full amount, despite the fact that the commission had not been earned. During the balance of 1996, nine more checks in the same manner totaling more than $1 million. 15. Bank records obtained from First Union Bank and several other banks for the period January 1997 through 2000 show how defendants routed the misappropriated funds. 16. In January 1997, Koneff and Semic wrongfully approved payment to New York Sales Tax Credit of $89,500.00. Rite Aid's check in this amount was sent to New York Sales Tax Credit's mailbox in Yonkers, New York and was subsequently deposited by Eden or his agent into New York Sales Tax Credit's account at First Union Bank. -4- HBDATA:8808 IT Shortly after the money was deposited into the New York Sales Tax Credit Account, Defendant Eden wrote checks on the account made payable to F & S and deposited these checks into accounts belonging to F & S at several banks in Florida. 18. Shortly after these deposits were made, Defendant Eden wrote checks on these Florida accounts made payable to Defendants Koneff and Semic thereby distributing to them their share of the misappropriated funds. On information and belief, other portions of these funds were distributed to Defendant Eden and possibly others. 19. This pattern was repeated on a nearly monthly basis over the next three years. In all, Semic and Koneff caused Rite Aid to send at least 42 payments to New York Sales Tax Credit totaling in excess of $6 million. Rite Aid's final payment to New York Sales Tax Credit was made in December 1999. Beginning at least as early as January 1997, each of these payments was first deposited into New York Sales Tax Credit's First Union Bank account and then transferred to Florida accounts belonging to F & S Corporate Advisors or another Eden company, Federal & State Corporate Advisors, Inc., before being distributed to Koneff, Semic, Eden, and possibly others. 20. Between January 1997 and August 2000, Defendant Koneff received checks from F & S and/or Federal & State totaling more than $1.6 million, representing his share of the misappropriated funds. Defendants Semic and Eden are believed to have received similar amounts. 21. Throughout this entire period, Defendants concealed their activities from Rite Aid which was unaware of their actions. Rite Aid only recently became aware of Defendants' acts following an investigation leading to the discovery of the above facts. HBDATA:8808 -5- CountI- Fraud 22. Plaintiff repeats and incorporates by reference the allegations set forth in paragraphs 1 through 21 of this Complaint as though set forth here in full. 23. As described in detail above, Defendants Eden and F & S submitted numerous payment requests to Rite Aid falsely claiming that sales tax refunds had been obtained for Rite Aid and requesting payment of commissions based upon the purported refunds. 24. These misrepresentations were intentional and were made for the purpose of inducing Rite Aid to send funds to New York Sales Tax Credit. 25. As described in further detail above, Defendants Koneff and Semic misrepresented to Rite Aid that New York Sales Tax Credit was entitled to payment of the commissions in that they approved the payment requests submitted to Rite Aid and directed that checks be sent to New York Sales Tax Credit. 26. Koneff s and Semic's misrepresentations were intentional and were made for the purpose of inducing Rite Aid to pay the funds. 27. Rite Aid justifiably relied on Defendants' misrepresentations to it and paid the funds based upon the misrepresentations. 28. As a direct result of Defendants' misrepresentations, Rite Aid has suffered substantial monetary damages and other harm to its business. 29. To the extent that any of the misappropriated assets have been placed in joint accounts with non-parties or have otherwise been transferred, Rite Aid avers that these transfers were fraudulent and requests that they be voided pursuant to the Pa. Uniform Fraudulent Transfer Act, 12 Pa.C.S.A. § 5101 etseq. HBDATA:8808 -6- WHEREFORE, Rite Aid demands judgment against David Koneff, Daniel Semic, Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors, Inc. in an amount to be determined at trial, together with injunctive relief, pre- and post judgment interest, costs, attorneys fees, punitive damages and such other relief as the Court deems just and proper. Count II - Conversion 30. Plaintiff repeats and incorporates by reference the allegations set forth in paragraphs 1 through 29 of this Complaint as though set forth here in full. 31. Defendants have converted Rite Aid's money by intentionally and wrongfully exercising ownership, dominion and control over the funds obtained under false pretenses from Rite Aid. 32. As a direct and proximate cause of Defendants' conversion of Rite Aid's funds, Rite Aid has suffered and will continue to suffer monetary damages and other harm to its business. WHEREFORE, Rite Aid demands judgment against David Koneff, Daniel Semic, Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors Inc. in an amount to be determined at trial, together with injunctive relief, pre- and post-judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court deems just and proper. Count III - Misappropriation of Funds 33. Plaintiff repeats and incorporates by reference the allegations set forth in paragraphs I through 32 of this Complaint as though set for here in full. 34. Defendants misappropriated and used for their own purposes funds which were given to them under false pretenses. HBDATA:8808 -7- 35. As the direct and proximate result of Defendants' action, Rite Aid has suffered substantial monetary and other harm to its business. WHEREFORE, Rite Aid demands judgment against David Koneff, Daniel Semic, Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors Inc. in an amount to be determined at trial, together with injunctive relief, pre- and post judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court deems just and proper. Count IV - Civil Conspiracy 36. Rite Aid repeats and incorporates by reference the allegations set forth in Paragraph I - 35 of this Complaint as though set forth here in full. 37. Defendants combined or agreed to defraud Rite Aid and to convert and misappropriate its funds. 38. Defendants entered this combination or agreement with the intent to defraud Rite Aid and to convert and misappropriate its funds. 39. As the direct and proximate result of Defendants' action, Rite Aid has suffered substantial monetary and other harm to its business. WHEREFORE, Rite Aid demands judgment against David Koneff, Daniel Semic, Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors Inc. in an amount to be determined at trial, together with injunctive relief, pre- and post judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court deems just and proper. Count V - Fraudulent Misrepresentation 40. Rite Aid repeats and incorporates by reference the allegations set forth in Paragraphs I through 39 of this Complaint as though set forth herein full. HBDATA:8808 -8- 41. In or about July 2000, Rite Aid and Defendant Semic entered into a Consulting, Severance and Release Agreement ("Agreement') pursuant to which Semic was paid his regular rate of pay for 52 weeks and continued to receive certain benefits after the termination of his employment with Rite Aid. 42. Prior to entering into the Agreement, Semic concealed from Rite Aid his acts of misconduct as alleged in Paragraphs 1 through 39 above. 43. Semic's concealment of his misconduct constituted a material misrepresentation and was done with the intent to mislead Rite Aid and in order to induce Rite Aid to enter into the Agreement. 44. Rite Aid justifiably relied on Semic's failure to disclose material information and but for his concealment of these material facts, Rite Aid would not have entered into the Agreement. 45. As the direct and proximate result of Semic's action, Rite Aid has suffered harm in that it made severance payments to Semic and provided other benefits pursuant to the Agreement. WHEREFORE, Rite Aid demands judgment against Daniel Semic in an amount to be determined at trial together with injunctive relief, pre- and post judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court deems just and proper. teve D. Shadowen, I.D. No. 41953 Gordon A. Einhom, I.D. No. 59006 SCHNADER HARRISON SEGAL & LEWIS LLP 30 North Third Street, Suite 700 Harrisburg, PA 17101 (717) 231-4000 Dated: June 10, 2003 Attorneys for Plaintiff Rite Aid Corporation HBDATA:8808 -9- VERMCATION James J. Comitale, Esquire, deposes and says that I am Associate Counsel for Rite Aid Corporation, and that while I do not have personal knowledge of all of the facts recited in the foregoing Complaint, the information contained therein has been collected and made available to me by others and said Complaint is true and correct to the best of my knowledge, information and belief and is therefore verified on behalf of Rite Aid Corporation. I make this statement subject to the penalties of 18 Pa. C.S. § 4904 relating to unswom falsification to authorities. By: w mes J. Comitale, Esquire Senior Associate Counsel Rite Aid Corporation Datedv n-z?, 3,0 CERTIFICATION OF SERVICE This is to certify that I served a true and correct copy of the attached Complaint upon the following persons, by the following means and on the date stated: Via Hand Delivery David J. Foster, Esquire Leslie M. Fields, Esquire COSTOPOULOS, FOSTER & FIELDS P.O. Box 222 831 Market Street Lemoyne, PA 17043 Gor A. Einhom Dated: June 10, 2003 -10- HBDATA:8808 cn ? o -a n ? r _._ ,_ . ( ? _ ' f? ..? "Z ;iJ r= .? - ? .^) '_ '< IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION, Plaintiff, No. 02-5863 vs. DAVID KONEFF, DANIEL SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants. EX PARTE PETITION FOR PRELIMINARY INJUNCTION Plaintiff Rite Aid Corporation ("Rite Aid") petitions this Court for a preliminary injunction pursuant to Pa. R.C.P. 1531 and in support thereof states the following: Plaintiff has filed a verified complaint in equity, attached as Exhibit A, alleging, inter alia, that its former Tax Department employees, Defendants David Koneff ("Koneff') and Daniel Semic ("Semic") conspired with Defendant Brian Eden ("Eden") and his companies to defraud Rite Aid of approximately $6 million and that Koneff and Semic personally received a substantial portion of those funds. 2. As alleged in the complaint, Rite Aid periodically retains the services of companies to audit sales tax payments made by Rite Aid to various states and to obtain refunds of any overpayments. As employees in Rite Aid's Tax Department, Koneff and Semic were aware of this and HBDATA:8718 knew how the system might be abused for their personal gain. The remaining defendants were involved in the business of providing tax refund services to corporate clients like Rite Aid and had similar knowledge. 3. In or about 1996 defendants entered into a scheme whereby Eden, through his company New York Sales Tax Credit, would submit requests for payment to Rite Aid falsely claiming that sales tax refunds had been obtained for Rite Aid and requesting payment of commissions based upon the amount of the purported tax refunds. According to the plan, these fraudulent requests would be received at Rite Aid by Koneff and Semic who would approve payment and direct that checks be issued to New York Sales Tax Credit. 4. The plan was put into effect in or about January 1996 when Eden and New York Sales Tax Credit began to submit to Rite Aid fraudulent requests for payments. Between January 1996 and December 1999, at least 42 such requests were submitted to Rite Aid and all were approved by Koneff and Semic for payment. At their direction, Rite Aid paid to New York Sales Tax Credit an amount in excess of $6 million. 5. Beginning at least as early as January 1997, the funds sent by Rite Aid to New York Sales Tax Credit were deposited by Defendant Eden or his agent into a checking account owned by F & S Corporate Advisors d/b/a New York Sales Tax Credit at First Union Bank and were shortly thereafter transferred by Eden to F & S Corp. Advisors' checking accounts at various Florida banks. Money Received by Defendant Koneff 6. After each deposit of the money into the F & S Corporate Advisors' Florida accounts, Defendant Eden sent one or more checks written on these accounts to Koneff who subsequently deposited each check into his checking account at Fulton Bank in Harrisburg, HBDATA:8718 -2- Pennsylvania. Between January 1997 and August 2000, Koneff deposited to his Fulton Bank account checks from F & S Corp. Advisors (or related entities) totaling approximately $1.6 million. Records from Fulton Bank show that Koneff subsequently moved the bulk of the misappropriated funds from his Fulton Bank account to the following locations: a. Approximately $678,000 was transferred to Koneffs investment accounts at Charles Schwab & Co., Account Nos. 5184-8499 and 5184-8457. b. Approximately $400,000 was used to purchase certificates of deposit from Fulton Bank. C. Approximately $300,000 was used as partial payment for the construction of Koneffs current residence located at 760 Seitz Drive, Lewisberry, Pennsylvania 17339. d. Approximately $110,000 was used to purchase two parcels of land located in Hampshire County, West Virginia. On information and belief, Koneff continues to own the real property identified in Paragraph 7 above. 9. On information and belief, Koneff continues to hold funds in his Schwab accounts and to hold funds in the form of certificates of deposit at Fulton Bank. 10. Rite Aid requests that this Court enjoin Defendant Koneff from selling, transferring or dissipating any of the assets identified in Paragraph 7, all of which were purchased using funds misappropriated from Rite Aid and which Rite Aid seeks to recover through this action. Such action is necessary to preserve the status quo until such time as this Court determines the rights of each party. HBDATA:8718 -3- 11. Koneff should not be permitted to spend, transfer or utilize any of the assets identified above, until such time as a hearing is held and this Court finally determines the respective rights of the parties named herein, for the following reasons: a. Rite Aid is threatened with immediate and irreparable harm because Koneff will continue to dissipate and convert the funds misappropriated from Rite Aid unless Koneff is enjoined from taking such action. b. In relation to the foregoing, immediate and irreparable injury will be sustained by Rite Aid before a hearing can be held on Plaintiffs motion for preliminary injunction, in that Koneff is likely to dissipate, transfer or relocate the monetary assets and to transfer ownership of the above identified real property in order to place all these assets beyond Rite Aid's reach. 12. To the extent that any of the property identified in Paragraph 7 is currently held jointly by Koneff and his wife, Rite Aid is entitled to recover the entire asset pursuant to the Pennsylvania Uniform Fraudulent Transfer Act, 12 Pa. C.S.A. § 5101 et seq. Money Received b Defendant Semic 13. It is alleged on information and belief that Defendant Eden also regularly sent checks from the Florida accounts of F & S Corporate Advisors and Federal & State Corporate Advisors to Defendant Semic representing his share of the funds misappropriated from Rite Aid. For example, between July 1999 and June 2000 Eden sent Semic checks from these accounts totaling approximately $275,000.00 and Semic deposited these funds into his account at First Union Bank. 14. In all likelihood, Semic received a one-third share of the misappropriated funds totaling approximately $1.6 million, the same amount known to have been received by Defendant Koneff. HBDATA:8718 -4- 15. Rite Aid requests that this Court enjoin Defendant Semic from transferring, dissipating, or selling any of these assets or property purchased with these assets in that the assets were misappropriated and Rite Aid seeks to recover them through this action. Injunctive relief is necessary to preserve the status quo until such time as this Court determines the rights of each party. 16. Semic should not be permitted to spend, transfer, or utilize any of the assets identified above, until such time as a hearing is held and this Court finally determines the respective rights of the parties named herein for the following reasons: a. Rite Aid is threatened with immediate and irreparable harm because Semic will continue to dissipate and convert the funds misappropriated from Rite Aid unless Semic is enjoined from taking such action. b. In relation to the foregoing, immediate and irreparable injury will be sustained by Rite Aid before a hearing can be held on Plaintiffs motion for preliminary injunction, in that Semic is likely to dissipate, transfer or relocate the monetary assets and to transfer ownership of the above identified real property in order to place all these assets beyond Rite Aid's reach. 17. To the extent that any of the property held by Semic is held with him jointly with his wife, Rite Aid is entitled to recover the entire asset pursuant to the Pa. Uniform Fraudulent Transfer Act, 12 Pa.C.S.A. § 5501 et seq. WHEREFORE, Rite Aid requests, pursuant to Pa. R.C.P. 1531(a) that prior to notice and hearing, a preliminary injunction be granted by this Court: Enjoining David Koneff from taking any of the following actions: a. Withdrawing or transferring any funds presently in Koneff s accounts at Fulton Bank or any other bank; b. Withdrawing or transferring any funds presently in Schwab Account Nos. 5184-8499 and 5184-8457 or any other accounts owned by Koneff at Schwab or any brokerage firm; HBDATA:8718 -5- C. Cashing, transferring ownership or in any way disposing of any certificates of deposit owned by Koneff and issues by Fulton Bank or any other bank; d. Selling, transferring ownership or in any way disposing of or encumbering the two properties owned by Koneff in Hampshire County, West Virginia; e. Selling, transferring ownership or in any way disposing of or encumbering Koneffs residence located at 780 Seitz Drive, Lewisberry, PA 17339. Enjoining Daniel Semic from taking any of the following actions: a. Withdrawing or transferring any funds presently in Semic's account at First Union Bank or at any other bank; b. Withdrawing or transferring any funds presently in any investment account; C. Cashing, transferring ownership, or in any way disposing of any certificates of deposit owned by Semic; d. Selling transferring ownership, or in any way disposing of or encumbering any real property owned by Semic. Rite Aid further requests that this Court schedule and hold a timely hearing, pursuant to Pa. R.C.P. 1531(d), pertaining to the continuance of such preliminary injunction. Respectfully submitted, ?St vee D Sha o en (LD #41953) Gordon A. Einhorn (ID #59006) SCHNADER HARRISON SEGAL & LEWIS LLP 30 North Third Street - Suite 700 Harrisburg, PA 17101 (717) 231-4000 Dated: June 10, 2003 Attorneys for Plaintiff HBDATA:8718 -6- VERIFICATION James J. Comitale, Esquire, deposes and says that I am Associate Counsel for Rite Aid Corporation, and that while 1 do not have personal knowledge of all of the facts recited in the foregoing Ex Parte Petition for Preliminary Injunction, the information contained therein has been collected and made available to me by others and said Petition is true and correct to the best of my knowledge, information and belief and is therefore verified on behalf of Tote Aid Corporation. 1 make this statement subject to the penalties of 18 Pa. C.S. § 4904 relating to unworn falsification to authorities. By: c --. James . Comitale, Esquire Senior Associate Counsel Rite Aid Corporation bated: CERTIFICATION OF SERVICE This is to certify that I served a true and correct copy of the attached Ex Parte Petition for Preliminary Injunction upon the following persons, by the following means and on the date stated: Via Hand Delivery David J. Foster, Esquire Leslie M. Fields, Esquire COSTOPOULOS, FOSTER & FIELDS P.O. Box 222 831 Market Street Lemoyne, PA 17043 Daniel Semic 6115 Parson Drive Harrisburg, PA 17111-3851 Via US Express Mail - Return Receipt Brian Eden 4611 S. University Drive, #206 Davie, FL 33328 5 rdon A. EI orn Dated: June 10, 2003 HBDATA:8718 Exhibit A IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION, Plaintiff, No. 02-5863 Vs. DAVID KONEFF, DANIEL SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants. NOTICE TO DEFEND YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this 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 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 Plaintiffs. YOU MAY LOSE MONEY OR PROPERTY OR OTHER RIGHTS IMPORTANT TO YOU. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Legal Services, Inc. 8 Irvin Row Carlisle, PA 17013 Telephone: (717) 243-9400 HBDATA:8819 IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION, Plaintiff, No. 02-5863 VS. DAVID KONEFF, DANIEL SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants. COMPLAINT Preliminary Statement This case involves the misappropriation from Plaintiff Rite Aid Corporation ("Rite Aid") of at least $6 million by David Koneff ("Koneff') and Daniel Semic ("Semic"), both former employees in Rite Aid's Tax Department, and co-conspirators F & S Corporate Advisors, Inc. ("F & S"), Federal & State Corporate Advisors, Inc. ("Federal & State") and their President, Brian Eden ("Eden"). Pursuant to their scheme, defendants contrived to create the appearance that F & S (d/b/a New York Sales Tax Credit) had been retained by Rite Aid to audit sales tax payments made by Rite Aid to the State of New York for the purpose of obtaining refunds for Rite Aid of tax overpayments made to the state. From 1996 through 1999, defendants Eden and New York Sales Tax Credit submitted requests for payments to Rite Aid falsely claiming to have earned them for sales tax refunds obtained for Rite Aid. These requests were received and approved by Defendants Koneff and Semic despite the fact HBDATA:8808 that New York Sales Tax Credit had not obtained any tax refunds for Rite Aid and were not entitled to any payments, a fact of which Koneff and Semic were well aware. Between January 1996 and December 1999 Koneff and Semic directed that in excess of 40 payments be made by Rite Aid to New York Sales Tax Credit totaling more than $6 million. These misappropriated funds were then shared by the Defendants Koneff, Semic, Eden, F&S, and Federal & State. Rite Aid brings the claims stated below in order to recover its funds wrongfully obtained by the Defendants. Parties 1. Rite Aid Corporation is a corporation incorporated in the state of Delaware and has its principal place of business in Camp Hill, Pennsylvania. 2. Defendant David Koneff is a former employee of Rite Aid and until April of 2000 held the position of Manager in Rite Aid's Tax Department. On information and belief, David Koneff is a resident of York County, Pennsylvania residing at 760 Seitz Drive, Lewisberry, Pennsylvania 17339. Defendant Daniel Semic is a former employee of Rite Aid and until July of 2000 held the position of Senior Director in Rite Aid's Tax Department. On information and belief, Semic is a resident of Dauphin County, Pennsylvania. 4. Defendant F & S Corporate Advisors, Inc., d/b/a New York Sales Tax Credit is a Florida corporation with its principal place of business at 2100 West 76h' Street, Suite 510, Hialeah, Florida 33016. Defendant Federal & State Corporate Advisors, Inc. is a Florida corporation with its principal place of business at 2100 West 76th Street, Suite 510, Hialeah, Florida 33016. -2_ HBDATA:8808 Defendant Brian Eden is the President and registered agent of Defendants F & S Corporate Advisors, Inc. and Federal & State Corporate Advisors, Inc. Eden is a resident of Florida. Facts Common to All Counts 7. Rite Aid has retail drugstores throughout much of the country and buys goods and services in numerous states. In purchasing goods and services, Rite Aid is periodically charged state sales tax despite the fact that the transactions should have been exempt from such payment under state law. In order to recoup these funds, Rite Aid occasionally uses the services of outside firms which 1) audit the sales tax payments paid by Rite Aid to individual states; 2) identify overpayments; and 3) obtain refunds for Rite Aid from the state taxing authorities. These outside firms are paid commissions based upon a percentage of the moneys refunded. 9. Defendants Koneff and Semic, as managers within Rite Aid's Tax Department, were intimately familiar with these procedures and were in a position to abuse those procedures for personal gain. 10. On information and belief, Defendant Eden operates various companies which obtain tax refunds and credits for corporate clients and is also intimately familiar with these procedures and how they can be misused. 11. In or about January 1996, Defendants Koneff, Semic, Eden, and F & S, conspired to defraud Rite Aid and misappropriate its funds. 12. According to the defendants' scheme, Eden, through his company New York Sales Tax Credit (a d/b/a of defendant F & S), submitted requests for payment to Rite Aid falsely HBDATA:8808 -3- claiming that sales tax refunds had been obtained from New York State and requesting payment of commissions based upon the amount of the purported tax refunds. These requests were received at Rite Aid by Koneff and Semic who, knowing that they were false, approved the payments and directed that checks be issued by Rite Aid to New York Sales Tax Credit. 13. In furtherance of this scheme, on or about April 5, 1996 Defendant Eden opened a checking account at First Union Bank, Totowa, New Jersey in the name of F & S Corporate Advisors, Inc. d/b/a New York Sales Tax Credit. Eden also rented a private mailbox at MailBoxes, Etc. in Yonkers, New York to be used as a mailing address for Rite Aid's payments to New York Sales Tax Credit. New York Sales Tax Credit had no actual place of business in New York state or, for that matter, anywhere. The Yonkers address was apparently obtained solely to create the appearance that New York Sales Tax Credit was a legitimate New York-based company. 14. The Defendants' plan was put into effect in or about January 1996 when the first request for payment was made by New York Sales Tax Credit requesting a payment in the amount of $5,000.00. According to plan, Koneff and Semic approved payment of the full amount, despite the fact that the commission had not been earned. During the balance of 1996, nine more checks in the same manner totaling more than $1 million. 15. Bank records obtained from First Union Bank and several other banks for the period January 1997 through 2000 show how defendants routed the misappropriated funds. 16. In January 1997, Koneff and Semic wrongfully approved payment to New York Sales Tax Credit of $89,500.00. Rite Aid's check in this amount was sent to New York Sales Tax Credit's mailbox in Yonkers, New York and was subsequently deposited by Eden or his agent into New York Sales Tax Credit's account at First Union Bank. HBDATA:8808 -4- 17. Shortly after the money was deposited into the New York Sales Tax Credit Account, Defendant Eden wrote checks on the account made payable to F & S and deposited these checks into accounts belonging to F & S at several banks in Florida. 18. Shortly after these deposits were made, Defendant Eden wrote checks on these Florida accounts made payable to Defendants Koneff and Semic thereby distributing to them their share of the misappropriated funds. On information and belief, other portions of these funds were distributed to Defendant Eden and possibly others. 19. This pattern was repeated on a nearly monthly basis over the next three years. In all, Semic and Koneff caused Rite Aid to send at least 42 payments to New York Sales Tax Credit totaling in excess of $6 million. Rite Aid's final payment to New York Sales Tax Credit was made in December 1999. Beginning at least as early as January 1997, each of these payments was first deposited into New York Sales Tax Credit's First Union Bank account and then transferred to Florida accounts belonging to F & S Corporate Advisors or another Eden company, Federal & State Corporate Advisors, Inc., before being distributed to Koneff, Semic, Eden, and possibly others. 20. Between January 1997 and August 2000, Defendant Koneff received checks from F & S and/or Federal & State totaling more than $1.6 million, representing his share of the misappropriated funds. Defendants Semic and Eden are believed to have received similar amounts. 21. Throughout this entire period, Defendants concealed their activities from Rite Aid which was unaware of their actions. Rite Aid only recently became aware of Defendants' acts following an investigation leading to the discovery of the above facts. HBDATA:8808 CountI - Fraud 22. Plaintiff repeats and incorporates by reference the allegations set forth in paragraphs 1 through 21 of this Complaint as though set forth here in full. 23. As described in detail above, Defendants Eden and F & S submitted numerous payment requests to Rite Aid falsely claiming that sales tax refunds had been obtained for Rite Aid and requesting payment of commissions based upon the purported refunds. 24. These misrepresentations were intentional and were made for the purpose of inducing Rite Aid to send funds to New York Sales Tax Credit. 25. As described in further detail above, Defendants Koneff and Semic misrepresented to Rite Aid that New York Sales Tax Credit was entitled to payment of the commissions in that they approved the payment requests submitted to Rite Aid and directed that checks be sent to New York Sales Tax Credit. 26. Koneff's and Semic's misrepresentations were intentional and were made for the purpose of inducing Rite Aid to pay the funds. 27. Rite Aid justifiably relied on Defendants' misrepresentations to it and paid the funds based upon the misrepresentations. 28. As a direct result of Defendants' misrepresentations, Rite Aid has suffered substantial monetary damages and other harm to its business. 29. To the extent that any of the misappropriated assets have been placed in joint accounts with non-parties or have otherwise been transferred, Rite Aid avers that these transfers were fraudulent and requests that they be voided pursuant to the Pa. Uniform Fraudulent Transfer Act, 12 Pa. C.S.A. § 5101 et seq. HBDATA:8808 -6- WHEREFORE, Rite Aid demands judgment against David Koneff, Daniel Semic, Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors, Inc. in an amount to be determined at trial, together with injunctive relief, pre- and post judgment interest, costs, attorneys fees, punitive damages and such other relief as the Court deems just and proper. Count II - Conversion 30. Plaintiff repeats and incorporates by reference the allegations set forth in paragraphs 1 through 29 of this Complaint as though set forth here in full. 31. Defendants have converted Rite Aid's money by intentionally and wrongfully exercising ownership, dominion and control over the funds obtained under false pretenses from Rite Aid. 32. As a direct and proximate cause of Defendants' conversion of Rite Aid's funds, Rite Aid has suffered and will continue to suffer monetary damages and other harm to its business. WHEREFORE, Rite Aid demands judgment against David Koneff, Daniel Semic, Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors Inc. in an amount to be determined at trial, together with injunctive relief, pre- and post judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court deems just and proper. Count III - Misappropriation of Funds 33. Plaintiff repeats and incorporates by reference the allegations set forth in paragraphs 1 through 32 of this Complaint as though set for here in full. 34. Defendants misappropriated and used for their own purposes funds which were given to them under false pretenses. HBDATA:8808 35. As the direct and proximate result of Defendants' action, Rite Aid has suffered substantial monetary and other harm to its business. WHEREFORE, Rite Aid demands judgment against David Koneff, Daniel Semic, Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors Inc. in an amount to be determined at trial, together with injunctive relief, pre- and post judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court deems just and proper. Count IV - Civil Conspiracy 36. Rite Aid repeats and incorporates by reference the allegations set forth in Paragraph 1 - 35 of this Complaint as though set forth here in full. 37. Defendants combined or agreed to defraud Rite Aid and to convert and misappropriate its funds. 38. Defendants entered this combination or agreement with the intent to defraud Rite Aid and to convert and misappropriate its funds. 39. As the direct and proximate result of Defendants' action, Rite Aid has suffered substantial monetary and other harm to its business. WHEREFORE, Rite Aid demands judgment against David Koneff, Daniel Semic, Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors Inc. in an amount to be determined at trial, together with injunctive relief, pre- and post judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court deems just and proper. Count V - Fraudulent Misrepresentation 40. Rite Aid repeats and incorporates by reference the allegations set forth in Paragraphs 1 through 39 of this Complaint as though set forth herein full. HBDATA:8808 41. In or about July 2000, Rite Aid and Defendant Semic entered into a Consulting, Severance and Release Agreement ("Agreement") pursuant to which Semic was paid his regular rate of pay for 52 weeks and continued to receive certain benefits after the termination of his employment with Rite Aid. 42. Prior to entering into the Agreement, Semic concealed from Rite Aid his acts of misconduct as alleged in Paragraphs 1 through 39 above. 43. Semic's concealment of his misconduct constituted a material misrepresentation and was done with the intent to mislead Rite Aid and in order to induce Rite Aid to enter into the Agreement. 44. Rite Aid justifiably relied on Semic's failure to disclose material information and but for his concealment of these material facts, Rite Aid would not have entered into the Agreement. 45. As the direct and proximate result of Semic's action, Rite Aid has suffered harm in that it made severance payments to Semic and provided other benefits pursuant to the Agreement. WHEREFORE, Rite Aid demands judgment against Daniel Semic in an amount to be determined at trial together with injunctive relief, pre- and post judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court deems just and proper. teve D. Shadowen, I.D. No. 41953 Gordon A. Einhorn, I.D. No. 59006 SCHNADER HARRisoN SEGAL & LEWIS LLP 30 North Third Street, Suite 700 Harrisburg, PA 17101 (717) 231-4000 Dated: June 10, 2003 Attorneys for Plaintiff Rite Aid Corporation HBDATA:8808 -9- VERIFICA'T'ION James 1. Comitale, Esquire, deposes and says that I am Associate Counsel for Rite Aid Corporation, and that while I do not have personal knowledge of all of the facts recited in the foregoing Complaint, the information contained therein has been collected and made available to me by others and said Complaint is true and correct to the best of my knowledge, information and belief and is therefore verified on behalf of Tote Aid Corporation. I make this statement subject to the penalties of 18 Pa. C.S. § 4904 relating to unsworn falsification to authorities. By: -Mmes J. Comitale, Esquire Senior Associate Counsel Rite Aid Corporation Dated. ?Yv n1,&, 10 "? CERTIFICATION OF SERVICE This is to certify that I served a true and correct copy of the attached Complaint upon the following persons, by the following means and on the date stated: Via Hand Delivery David J. Foster, Esquire Leslie M. Fields, Esquire COSTOPOULOS, FOSTER & FIELDS P.O. Box 222 831 Market Street Lemoyne, PA 17043 Gor A. Einhorn Dated: June 10, 2003 -10- HHDATA:8808 r? c; 22 RITE AID CORPORATION, Plaintiff V. DAVID KONEFF, DANIEL SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., and BRIAN EDEN, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION- LAW NO. 02-5863 CIVIL TERM ORDER OF COURT AND NOW, this IP day of June, 2003, upon consideration of Plaintiff's Ex Parte Petition for Preliminary Injunction, all documents and declarations in support thereof and any opposition thereto, it is hereby ordered as follows: Defendant David Koneff is hereby enjoined and prohibited from taking any of the following actions: a. Withdrawing or transferring any funds presently in Koneff's accounts at Fulton Bank or any other bank; b. Withdrawing or transferring any funds presently in Schwab Account Nos. 5184-8499 and 5184-8457 or any other accounts owned by Koneff at Schwab or any brokerage firm; c. Cashing, transferring ownership or in any way disposing of any certificates of deposit owned by Koneff and issues by Fulton Bank or any other bank; d. Selling, transferring ownership or in any way disposing of or encumbering the two properties owned by Koneff in Hampshire County, West Virginia; e. Selling, transferring ownership or in any way disposing of or encumbering Koneffs residence located at 780 Seitz Drive, Lewisberry, PA 17339. lj`, ?SNN d n Defendant Daniel Semic is hereby enjoined and prohibited from taking any of the following actions: a. Withdrawing or transferring any funds presently in Semic's account at First Union Bank or at any other bank; b. Withdrawing or transferring any funds presently in any investment account; c. Cashing, transferring ownership, or in any way disposing of any certificates of deposit owned by Semic; d. Selling, transferring ownership, or in any way disposing of or encumbering any real property owned by Semic. This ex parte preliminary injunction shall not be effective until Plaintiff has filed a bond or deposited legal tender with the Cumberland County Prothonotary in the amount of $250,000.00 in accordance with Pennsylvania Rule of Civil Procedure 1531(b). A hearing on whether this injunction should be dissolved, continued or modified is scheduled for Tuesday, June 17, 2003, at 2:30 p.m., in Courtroom No. 1, Cumberland County Courthouse, Carlisle, Pennsylvania. ?S'teve D. Shadowen, Esq. Gordon A. Einhorn, Esq. 30 North Third Street Suite 700 Harrisburg, PA 17101 Attorneys for Plaintiff RKs o lo-)3-63 A BY THE COURT, avid J. Foster, Esq. Leslie M. Fields, Esq. P.O. Box 222 831 Market Street Lemoyne, PA 17043 ,/Daniel Semic 6115 Parson Drive Harrisburg, PA 17111-3851 /Brian Eden 4611 S. University Drive #206 Davie, FL 33328 :rc IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION, Plaintiff, vs. No. 02-5863 DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants. STIPULATION AND ORDER OF COURT AND NOW, this -ft&ay of June, 2003, pursuant to the stipulation of the parties contained herein, it is hereby ordered that the preliminary injunction issued by this Court on June 13, 2003 is continued subject to the modifications contained in this Order which are as follows: Defendants David and Susan Koneff (collectively "Koneff') are hereby enjoined and prohibited from taking any of the following actions: a. Cashing, transferring ownership or in any way disposing of any certificates of deposit owned by Koneff and issued by Fulton Bank or any other bank; b. Selling, transferring ownership or in any way disposing of or encumbering any real property owned by Koneff including, but not limited to, the property at 780 Seitz Drive, Lewisberry, Pennsylvania 17339 and properties located in Hampshire County, West Virginia; C. Withdrawing or transferring any funds presently in Schwab account numbers 5184-8499 and 5184-8457 or any other accounts owned by HBDATA:8877 tj!Ph?f?' cr;?l, 1?,?7 :tl' " !.1 ;1110 6D J Koneff at Schwab or any other brokerage firm, with the exception that Koneff shall be permitted to transfer a total of $65,000.00 from his Schwab accounts to his checking account at Fulton Bank to be used to meet his reasonable and necessary living expenses. In addition, Koneff may withdraw from his Schwab accounts the amount necessary to pay annual real estate taxes on the properties owned by him. However, prior to any such withdrawals, Koneff shall provide to Plaintiff's counsel copies of bills showing the amount of real estate taxes owed; d. Withdrawing or transferring any funds presently in Koneff s accounts at Fulton Bank or any other bank with the exception that Koneff may withdraw the amount of $19,000 (currently on deposit in his Fulton Bank checking account) and the funds transferred to that account from the Schwab investment accounts as noted in Paragraph c. The withdrawals from the Fulton Bank account shall not exceed $7,000 per month exclusive of any amounts used to pay real estate taxes; e. Other than those transactions specifically stated in this Order, Koneff may not transfer, cash, sell, or otherwise dispose of any assets (whether held individually or jointly) nor permit any such disposition of jointly held assets; Within fourteen (14) days of the date of this Order, Koneff shall provide to Plaintiff s counsel a full accounting of all assets, whether held individually, jointly, or in some other manner; the following actions: g. From the date of this Order, Koneff shall provide to Plaintiffs counsel copies of all monthly statements for all bank and investment accounts which he holds either individually or jointly; Defendant Daniel Semic is hereby enjoined and prohibited from taking any of a. Cashing, transferring ownership or in any way disposing of any certificates of deposit owned by Semic; b. Selling, transferring ownership or in any way disposing of or encumbering any real property owned by Semic; C. Withdrawing or transferring any fiords presently in any investment accounts owned by Semic, with the exception that Semic shall be permitted to transfer a total of $57,000.00 from his investment '2' HBDATA:8877 accounts to his checking account at First Union Bank to be used to meet his reasonable and necessary living expenses. In addition, Semic may withdraw from his investment accounts the money necessary to pay annual real estate taxes on the properties owned by him. However, prior to any such withdrawals, Semic shall provide to Plaintiff's counsel copies of bills showing the amount of real estate taxes owed; d. Withdrawing or transferring any funds presently in Semic's accounts at First Union Bank or any other bank with the exception that Semic may withdraw the amount of $27,000 (currently on deposit in his First Union Bank checking account) and the funds transferred to that account from the Schwab investment accounts as noted in Paragraph c. The withdrawals from the First Union account shall not exceed $7,000 per month exclusive of any amounts used to pay real estate taxes; e. Other than those transactions specifically stated in this Order, Semic may not transfer, cash, sell, or otherwise dispose of any assets (whether held individually or jointly) nor permit any such disposition of jointly held assets; Within fourteen (14) days of the date of this Order, Semic shall provide to Plaintiff's counsel a full accounting of all assets, whether held individually, jointly, or in some other manner; g. From the date of this Order, Semic shall provide to Plaintiff's counsel copies of all monthly statements for all bank and investment accounts which he holds either individually or jointly; It is further Ordered that in the event this matter has not been resolved within one (1) year from the date of this Order, Defendants may request the Court grant an additional amount for reasonable and necessary living expenses. As stated in the Court's Order of June 13, 2003, the preliminary injunction shall not be effective until Plaintiff has filed a bond or deposited legal tender with the Cumberland County Prothonotary in the amount of $250,000.00 in accordance with Pa. R. Civ. P. 1531(b). In light of the HBDATA:8877 -3- stipulation of the parties relating to the above terms of the injunction, the hearing scheduled for Tuesday, June 17, 2003 at 2:30 pm is hereby canceled. BY THE COURT ?esley Ol r. The above terms are stipulated and agreed to by Plaintiff Rite Aid Corporation, and Defendants David Koneff and Daniel Semic, through their respective counsel. .. rr _ 6/i7 /e 3 o n A. ,or Date ttorneys for Plaintiff Rite Aid Corporation J / David J. Foster Date William C. Costopoulos Attorneys for Defendants Koneff and Semic `A Cloy pefuc-a)-L? 9 ws ,) -Ao &4?j ej,- ?I-jy ''r?a.1-trd. -la s/cj? fcC HBDATA:8877 -4- IN THE COURT OF COMMON :PLEAS CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION, Plaintiff, VS. No. 02-5863 DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants. STIPULATION AND ORDER OF SUBSTITUTION OF COUNSEL IT IS HEREBY STIPULATED AND CONSENTED that HANGLEY ARONCHICK SEGAL & PUDLIN, Suite 700,30 North Third Street, Harrisburg, PA 17101- 1701, are hereby substituted in place and stead of SCHNADER HARRISON SEGAL & LEWIS LLP, Suite 3600, 1600 Market Street, Philadelphia, PA 19103 as attorneys of record for plaintiffs in the above-captioned action. Dated: July 1, 2003 SCHNADER HARRISON SEGAL & LEWIS LLP By: O'aen , Diana S. Donaldson Suite 3600 1600 Market Street Philadelphia, PA 19103 HBDATA:8943 v1 CERTIFICATE OF SERVICE I hereby certify that I served a true and correct copy of the foregoing STIPULATION AND ORDER OF SUBSTITUTION OF COUNSEL on counsel for all parties via First Class mail addressed as indicated below: David J. Foster, Esquire Leslie M. Fields, Esquire COSTOPOULOS, FOSTER & FIELDS P.O. Box 222 831 Market Street Lemoyne, PA 17043 Daniel Semic 6115 Parson Drive Harrisburg, PA 17111-3851 Brian Eden 4611 S. University Drive, #206 Davie, FL 33328 Dated: July 1, 2003 onic . 'ebuck HBDATA:8943 v I ? ?? a C w -n z ? _? ?n 4 ? Y C , C_' v '-?. -n ??-? IV `:ern ; %. ?) ? CT C 01- S713 HANGLEY ARONCHICK SEGAL & PUDLIN, By: Steve Pl. Shadowen Gordon A. Einhorn Suite 700 30 North Third Street Harrisburg, PA 17101-1701 (717) 364-1030 SO ORDERED Dated: JUDGE HBDATA:8943 vl SHERIFF'S RETURN - OUT OF COUNTY CASE NO: 2002-05863 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND RITE AID CORPORATION VS KONEFF DAVID ET AL R. Thomas Kline , Sheriff or Deputy Sheriff who being duly sworn according to law, says, that he made a diligent search and and inquiry for the within named DEFENDANT , to wit: SEMIC DANIEL but was unable to locate Him deputized the sheriff of DAUPHIN in his bailiwick. He therefore serve the within COMPLAINT & NOTICE County, Pennsylvania, to On July 3rd , 2003 , this office was in receipt of the attached return from DAUPHIN Sheriff's Costs: So answers _ -- Docketing 18.00 Out of County 9100 Surcharge 10.00 Thomas Kline Dep Dauphin County 30.50 Sheriff of Cumberland County .00 67.50 07/03/2003 SCHNADER HARRISON SEGAL LEWIS Sworn and subscribed to before me this Y'? day of L d.Ln-3 A. D. i Prothoncta In The Court of Common Pleas of Cumberland County, Pennsylvania Rite Aid Corporation vs. David Koneff et al SERVE: Daniel Senic No. 02-5863 civil Now, June 11, 2003 , I, SHERIFF OF CUMBERLAND COUNTY, PA, do hereby. deputize the Sheriff of Dauphin County to execute this Writ, this deputation being made at the request and risk of the Plaintiff. Sheriff of Cumberland County, PA Affidavit of Service Now, within upon at by handing to a , 20, at o'clock M. served the copy of the original and made known to the contents thereof. So answers, Sheriff of County, PA Sworn and subscribed before me this ` day of , 20_ COSTS SERVICE $ MILEAGE AFFIDAVIT (? ixe oaf thr o$4ext ff Mary Jane Snyder Real Estate Deputy William T. Tully Solicitor Dauphin County Harrisburg, Pennsylvania 17101 ph: (717) 255-2660 fax: (717) 255-2889 Jack Lotwick Sheriff Commonwealth of Pennsylvania RITE AID CORPORATION vs County of Dauphin SEMIC DANIEL Sheriff's Return No. 1415-T - - -2003 OTHER COUNTY NO. 02 5863 J. Daniel Basile Chief Deputy Michael W. Rinehart Assistant Chief Deputy AND NOW:June 23, 2003 at 9:10AM served the within NOTICE & COMPLAINT upon SEMIC DANIEL by personally handing to SHARON SEMIC (WIFE) 1 true attested copy(ies) of the original NOTICE & COMPLAINT and making known to him/her the contents thereof at 6115 PARSON DRIVE HARRISBURG, PA 17111-0000 Sworn and subscribed to before/ me this 23RD day of JUNE, 2003 PROTHONOTARY So Answers, Sheriff of Dauphin County, Pa. By 530?i7 D eputy Sheriff Sheriff's Costs: $30.50 PD 06/17/2003 RCPT NO 179815 SS NATHAN C. WOLF, ESQUIRE ATTORNEY ID NO. 87380 35 EAST HIGH STREET CARLISLE PA 17013 (717) 243-6090 ATTORNEY FOR DEFENDANT EDEN RITE AID CORPORATION, Plaintiff Vs. : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW DAVID KONEFF, SUSAN KONEFF: DANIEL SEMIC, F & S , CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL AND STATE : CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants TO THE PROTHONOTARY: NO. 2002 - 5863 CIVIL TERM PRAECIPE Please enter my appearance for the defendant, Brian Eden, in the above matter. July 8, 2003 WOLF ney for Plaintiff 35 East High Street Carlisle, PA 17013 (717) 243-6090 Attorney ID No. 87380 n w o v m C - r.? - co y i C7 IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION, Plaintiff, No. 02-5863 VS. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants. STIPULATION AND ORDER OF SUBSTITUTION OF COUNSEL IT IS HEREBY STIPULATED AND CONSENTED that HANGLEY ARONCHICK SEGAL & PUDLIN, Suite 700,30 North Third Street, Harrisburg, PA 17101- 1701, are hereby substituted in place and stead of SCHNADER HARRISON SEGAL & LEWIS LLP, Suite 3600, 1600 Market Street, Philadelphia, PA 19103 as attorneys of record for plaintiffs in the above-captioned action. Dated: July 1, 2003 SCHNADER HARRISON SEGAL & LEWIS LLP By: l1kw to Diana S. Donaldson Suite 3600 1600 Market Street Philadelphia, PA 19103 HBDATA:8943 vt CERTIFICATE OF SERVICE I hereby certify that I served a true and correct copy of the foregoing STIPULATION AND ORDER OF SUBSTITUTION OF COUNSEL on counsel for all parties via First Class mail addressed as indicated below: David J. Foster, Esquire Leslie M. Fields, Esquire COSTOPOULOS, FOSTER & FIELDS P.O. Box 222 831 Market Street Lemoyne, PA 17043 Daniel Semic 6115 Parson Drive Harrisburg, PA 17111-3851 Brian Eden 4611 S. University Drive, #206 Davie, FL 33328 Dated: July 1, 2003 MonicA ebuck HBDATA:8943 vi C O co ?f= N tern -C T -G ?, l oik- W UV 2 2003 HANGLEY ARONCHICK SEGAL & PUDLIN, By: Ste . Shadowen Gordon A. Einhorn Suite 700 30 North Third Street Harrisburg, PA 17101-1701 (717) 364-1030 HBDATA:8943 vi SO ORDERED V 0 t? e< F ?,nibnilsn?rvad z - i??r co RITE AID CORPORATION, Plaintiff V. IN THE C01JRT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Civil No. 02-5863 DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, F & S CORPORATE ADVISORS, n ?, n INC., d/b/a NEW YORK SALES cr G, n TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN, Defendants PRELIMINARY OBJECTIONS OF DEFENDANT i SUSAN KONEFF AND NOW comes the Defendant, Susan Koneff, by and throucjf? hef attorney, David J. Foster, Esquire, COSTOPOULOS, FOSTER & FIELDS, and respectfully files the following Preliminary Objections to the Plaintiff's Complaint: 1. On or about June 10, 2003, the Plaintiff, Rite Aid Corporation ("Rite Aid"), filed a civil complaint against the Defendants alleging that they participated in a scheme to defraud the Plaintiff in excess of $6 million for sales tax refunds not actually earned; it later added Susan Koneff to the caption as a defendant. 2. The Plaintiff alleges that in purchasing goods and services for its drugstores, it is charged sales tax for certain transactions which should be exempt from such payment under state law. See Complaint at paras. 7-8. 3. The Plaintiff avers that, in order to recoup the sales 1 taxes paid, it employs outside firms to audit the sales tax payments, identify overpayments and obtain refunds from the respective states. See complaint at para. 8. 4. The Plaintiff states that Defendants David Koneff and Semic, as managers with Rite Aid, ,were intimately familiar with these procedures and how they can be misused." See Complaint at para. 9. 5. The Plaintiff alleges that Defendants David Koneff, Semic, Eden and F & S conspired to defraud Rite Aid and misappropriate its funds by having Defendant Eden, through Defendant F & S, submit requests for payment to Rite Aide falsely claiming that sales tax refunds had been obtained from New York State and requesting payment of commissions based upon the amount of the purported tax refunds, which commission payments were made by Rite Aid through Defendants David Koneff and Semic. See Complaint at paras. 11-12. 6. According to the Plaintiff's Complaint, this plan started in January 1996 and continued until August 2000, with at least 42 payments made by Rite Aid to New York Sales Tax Credit in excess of $6 million. See Complaint at paras. 13-20. 7. Plaintiff brings counts of fraud, conversion, misappropriation of funds and civil conspiracy against all Defendants and a count of fraudulent misrepresentation against Defendant Semic. 8. Plaintiff broadly claims that it "has suffered substantial 2 monetary and other harm to its business." See complaint at paras. 28, 32, 35 and 39. 9. Plaintiff demands judgment against the Defendants "in an amount to be determined at trial, together with injunctive relief, pre- and post-judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court, deems just and proper." See Complaint, prayers for relief under Counts I-V. 10. Plaintiff's Complaint is silent as to conduct allegedly committed by Defendant Susan Koneff. 11. Defendant Susan Koneff respectfully files the following preliminary objections to the Plaintiff's Complaint. -1__??J FF/o rmmnlaint: Failure to state a Claim for Relief 12. Plaintiff's Complaint makes no allegations whatsoever against Defendant Susan Koneff and her alleged role, if any, in the alleged conspiratorial scheme to defraud Rite Aid. 13. As to Defendant Susan Koneff, the Plaintiff has failed to state a claim against her for fraud, conversion, misappropriation of funds and civil conspiracy. WHEREFORE, Defendant Susan Koneff moves that the Plaintiff's Complaint be dismissed with prejudice as to her for failure to state a claim for relief. 3 Koneff and Semic 14. Defendant Susan Koneff hereby incorporates by reference, as if fully set forth herein, all the preliminary objections asserted by Defendants David Koneff and Seemic. WHEREFORE, Defendant Susan Koneff moves for the relief requested in the preliminary objections failed by Defendants David Koneff and Semic. RESPECTFULLY SUBMITTED: David J. Fos r, Esquire COSTOPOULOS, FOSTER & FIELDS 831 Market Street/P.O. Box 222 Lemoyne, PA 17043 Phone: (717) 761-2121 ATTORNEY FOR DEFENDANT SUSAN KONEFF DATED: August 2003. 4 CERTIFICATE OF SERVICE I, David J. Foster, Esquire, attorney for Defendant Susan Koneff, do hereby certify that a true and correct copy of the within PRELIMINARY OBJECTIONS was served upon the counsel for the plaintiff, Rite Aid Corporation, by placing same in the United States Mail, first-class postage prepaid, on the below date addressed as follows: Steve D. Shadowen, Esquire Gordon A. Einhorn, Esquire SCHNADER HARRISON Suite 700 30 North Third Street 101 Harrisburg, BY D Es uire avid J. F'o r, q 6 DATED: August 2003. ?-5 C7 n T' i r F. (A -< RITE AID CORPORATION, Plaintiff V. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN, Defendants IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Civil No. 02-5863 PRELIMINARY OBJECTIONS OF DEFENDANTS DAVID KONEFF AND DANIEL SEMIC AND NOW come the Defendants, David Koneff and Daniel Semic, by and through their attorney, David J. Foster, Esquire, COSTOPOULOS, FOSTER & FIELDS, and respectfully file the following Preliminary Objections to the Plaintiff's Complaint: 1. On or about June 10, 2003, the Plaintiff, Rite Aid Corporation ("Rite Aid"), filed a civil complaint against the Defendants alleging that they participated in a scheme to defraud the Plaintiff in excess of $6 million for sales tax refunds not actually earned; it later added Susan Koneff to the caption as a defendant. 2. The Plaintiff alleges that in purchasing goods and services for its drugstores, it is charged sales tax for certain transactions which should be exempt from such payment under state law. See Complaint at paras. 7-8. 3. The Plaintiff avers that, in order to recoup the sales 1 taxes paid, it employs outside firms to audit the sales tax payments, identify overpayments and obtain refunds from the respective states. See Complaint at para. 8. 4. The Plaintiff states that Defendants David Koneff and Semic, as managers with Rite Aid, "were :intimately familiar with these procedures and how they can be misused.' See Complaint at para. 9. 5. The Plaintiff alleges that Defendants David Koneff, Semic, Eden and F & S conspired to defraud Rite Aid and misappropriate its funds by having Defendant Eden, through Defendant F & S, submit requests for payment to Rite Aide falsely claiming that sales tax refunds had been obtained from New York State and requesting payment of commissions based upon the amount of the purported tax refunds, which commission payments were made by Rite Aid through Defendants David Koneff and Semic; no allegations of any kind are made against Defendant Susan Koneff. See Complaint at paras. 11- 12. 6. According to the Plaintiff's Complaint, this plan started in January 1996 and continued until August 2000, with at least 42 payments made by Rite Aid to New York Sales Tax Credit in excess of $6 million. See Complaint at paras. 13-20. 7. Plaintiff brings counts of fraud, conversion, misappropriation of funds and civil conspiracy against all Defendants and a count of fraudulent misrepresentation against 2 Defendant Semic. 8. Plaintiff broadly claims that it "has suffered substantial monetary and other harm to its business.,, See Complaint at paras. 28, 32, 35 and 39. 9. Plaintiff demands judgment against the Defendants "in an amount to be determined at trial, together with injunctive relief, pre- and post-judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court: deems just and proper. See Complaint, prayers for relief under Counts I-V. 10. Defendants David Koneff and Semiic respectfully file the following preliminary objections to the Plaintiff's Complaint. I. Motion to Strike the "Preliminary Statement" 11. The Plaintiff's Complaint opens with a so-called "Preliminary Statement, 11 which is a page-and-a-half narrative summary of the accusations made against all the Defendants, 12. Pa.R.Civ.P. 1019(a) provides: "The material facts on which a cause of action or defense is based shall be stated in a concise and summary form." 13. Pa.R.Civ.P. 1022 provides: "Every pleading shall be divided into paragraphs numbered consecutively. Each paragraph shall contain as far as practicable only one material allegation.,, 14. The "Preliminary Statement" violates these rules because the material facts are not stated in a "concise and summary form," it is not divided into consecutively numbered paragraphs, and it 3 contains more than one material allegation. 15. Moving Defendants are not able to conform to Pa.R.Civ.P. 1029 which requires them to admit or deny in a responsive pleading "specifically to the paragraph in which the averment admitted or denied is set forth[]" because of the narrative form of the so- called "Preliminary Statement." 16. Further, the "Preliminary Statement" should be stricken because it avers scandalous and impertinent matter, such as accusing Defendants of participating in a "scheme," of having "contrived to create the appearance" that Defendant F & S had been retained by Plaintiff, of "falsely claiming" to have earned for them sales tax refunds, and that Moving Defendants were "well aware" that Defendant F & S was not entitled to payments. 17. The aforesaid allegations in the "Preliminary Statement" are conclusory, argumentative, improper and prejudicial to the Moving Defendants and are not averments of material fact to which they can respond and against which they can defend. WHEREFORE, Moving Defendants move that the "Preliminary Statement" of Plaintiff's Complaint be stricken. -- Count I 18. Pa.R.Civ.P. 1019(b) mandates in part: "Averments of fraud or mistake shall be averred with particularity." 19. Count I of the Plaintiff's Complaint is an allegation of 4 fraud against Defendants and Moving Defendants in particular. 20. Count I, standing alone, consists of conclusory pleadings of law against Moving Defendants and fails to allege fraud with any let alone sufficient particularity. 21. Even reading Count I together with the so-called "Preliminary Statement,' which Moving Defendants have moved to strike, and the "Facts Common to All Parties," the averment of fraud has not been pleaded with sufficient particularity. WHEREFORE, Moving Defendants move to require that Plaintiff be required to plead fraud in Count I with sufficient particularity. III. Motion to Dismiss: Failure to State a Claim (Demurrer) in Count I 22. The tort of "fraud," properly known in Pennsylvania as that of "fraudulent misrepresentation, 11 contains the following essential elements: that the defendant made a misrepresentation to the plaintiff; the misrepresentation was fraudulent; the misrepresentation was of a material fact; the defendant intended that the plaintiff rely on it; the plaintiff in fact relied on the material misrepresentation; and the plaintiff's reliance on it was a factual cause of the harm suffered by the plaintiff. 23. As a matter of law, Count I of the Plaintiff's Complaint fails to state a claim for "fraud" against Moving Defendants because it fails to contain sufficient material facts. WHEREFORE, Moving Defendants move that Count I of Plaintiff's 5 Complaint be dismissed for failure to state a claim. IV. Motion for More Specific Pleading: Insufficiency of Pleading -- Count II 24. Count II of the Plaintiff's Complaint is a count of conversion. 25. In a conclusory manner, the Plaintiff avers that the Defendants "converted Rite Aid's money by intentionally and wrongfully exercising ownership, dominion and control over the funds obtained under false pretenses from. Rite Aid." 26. This allegation is insufficiently specific to adequately and properly apprise the moving Defendants of the claim against them and prevents them from preparing a response and defense. WHEREFORE, Moving Defendants move to require the Plaintiff to plead Count II with more specificity. V. Motion for More Specific Pleadin : Insufficiency of Pleading -- Count III 27. In support of Count III for "Misappropriation of Funds," the entirety of the Plaintiff's allegation is: "Defendants misappropriated and used for their own purposes funds which were given to them under false pretenses." 28. The aforesaid averment is insufficiently specific to adequately and properly apprise the Moving Defendants of the claim against them and prevents them from preparing a response and defense. 6 WHEREFORE, Moving Defendants move tc require the Plaintiff to plead Count III with sufficient specificity. VI. Motion for More Specific Pleading Insufficiency of Pleading (Demurrer) -- Count IV 29. Count IV is an allegation of civil conspiracy against all Defendants. 30. In boilerplate fashion, the Plaintiff alleges that all the Defendants "combined or agreed to defraud Rite Aid and to convert and misappropriate funds" and "entered this combination or agreement with the intent to defraud Rite Aid and to convert and misappropriate its funds." 31. The aforesaid averments are insufficiently specific to adequately and properly apprise the Moving Defendants of the claim against them and prevents them from preparing a response and defense. WHEREFORE, Moving Defendants move to require the Plaintiff to plead Count IV of the Plaintiff's Complaint with sufficient specificity. VII. Motion for More Specific Pleadina Insufficiency of Pleading -- Count V 32. Pa.R.Civ.P. 1019(b) mandates in part: "Averments of fraud or mistake shall be averred with particularity.11 33. Count V of the Plaintiff's Complaint is an allegation of fraudulent misrepresentation against Defendants and Moving 7 Defendants in particular. 34. The material facts set forth under Count V consist of of conclusory pleadings of law against Moving Defendants and fail to allege fraud with any let alone sufficient particularity. WHEREFORE, Moving Defendants move to require the Plaintiff to plead Count V of the Plaintiff's Complaint with sufficient particularity. VIII. Motion to Dismiss: Failure to State a Claim (Demurrer) in Count V 35. The tort of "fraudulent misrepresentation" contains the following essential elements: that the defendant made a misrepresentation to the plaintiff; the misrepresentation was fraudulent; the misrepresentation was of a material fact; the defendant intended that the plaintiff rely on it; the plaintiff in fact relied on the material misrepresentation; and the plaintiff's reliance on it was a factual cause of the harm suffered by the plaintiff. 36. As a matter of law, Count V of the Plaintiff's Complaint fails to state a claim for "fraudulent misrepresentation" against Defendant Semic because it fails to contain sufficient material facts. WHEREFORE, Defendant Semic moves that Count V of Plaintiff's Complaint be dismissed for failure to state a claim. 8 IX. Motion for More Specific Pleading Failure to State Relief Requested/Monetary Damages with Sufficient S ecificit 37. Counts I, II, III and IV of the Plaintiff's Complaint allege that the Plaintiff has suffered "substantial monetary and other harm to its business." 38. Plaintiff fails to state specifically what "other harm" has been done to its business or how Moving Defendants have caused that harm. 39. All counts of the Plaintiff's Complaint demand judgment against all Defendants "in an amount to be determined at trial." 40. Plaintiff fails to state the monetary amount it demands from each of the Moving Defendants. 41. Pa.R.Civ.P. 1021(a) states in part: "Any pleading demanding relief shall specify the relief' sought." 42. Plaintiff's Complaint fails to specifically set forth the relief sought and, therefore, the phrase "other harm to its business" should be stricken/dismissed or, alternatively, pleaded with sufficient specificity. 43. Also, Plaintiff should be required to state a specific monetary amount it demands from each of the Moving Defendants. WHEREFORE, Moving Defendants move to strike/dismiss the phrase "other harm to its business" under Counts :C through IV; require the Plaintiff to amplify "other harm" with specificity; and to order the Plaintiff to state a specific monetary amount it demands from 9 each Moving Defendant under all Counts. X. Motion to Strike/Dismiss: Failure to State Whether Amount Claimed Exceeds Compulsory Arbitration Limits 44. Pa.R.Civ.P. 1021(c) requires that in counties having compulsory arbitration, the plaintiff must. state whether the amount claimed does or does not exceed that jur.'_sdictional limit. 45. Cumberland County has local rules governing compulsory arbitration. See Rule 1301-1, et seq. 46. Plaintiff's Complaint, under the claim for relief under all counts, fails to state whether the amount claimed exceeds the compulsory arbitration limits. WHEREFORE, Moving Defendants move to strike/dismiss the Claims for Relief as to all counts of the Complaint. XI. Motion to Strike/Demurrer Claims for Punitive Damages: Failure to State a Claim upon which Relief may be Granted 47. Under each Count of the Complaint, the Plaintiff seeks punitive damages in addition to other relief. 48. The award of punitive damages i_s reserved for the most extreme, outrageous cases in which the defendant acts with a particularly evil motive or wicked intent. 49. As a matter of law, the material facts alleged in the Complaint fail to state a claim that would justify the award of punitive damages against the Moving Defendants. 50. Plaintiff fails to allege that the conduct of the Moving 10 Defendants was outrageous, wanton and/or recklessly indifferent to the rights of others. 51. Plaintiff fails to set forth any facts in the Complaint which evidence outrageous, wanton and/or recklessly indifferent conduct by the Moving Defendants. 52. Mere conclusory allegations, such as those pleaded in the Complaint, are insufficient to support: a claim for punitive damages. 53. Merely asserting a demand for punitive damages in the prayer for relief, as Plaintiff has done, is insufficient to support a claim for punitive damages. 54. Even assuming, as one must when evaluating a demurrer, the truth of the allegations pleaded in the Complaint, the Plaintiff has failed to allege facts which would support any allegations of outrageous, wanton and/or recklessly indifferent conduct by the Moving Defendants and/or claims for punitive damages. 55. Based upon the foregoing, the Plaintiff has failed to plead/state a claim upon which relief may be granted for punitive damages and outrageous, wanton and/or recklessly indifferent conduct with respect to the Moving Defendants. WHEREFORE, Moving Defendants move to strike the claims for punitive damages with prejudice and to preclude the Plaintiff from seeking them at trial. 11 XII. Motion to Strike/Dismiss: Failure to Break Down Counts with Respect to Each Individual Defendant 56. Plaintiff's Complaint contains five individual counts referencing the Defendants without differentiation. 57. Pa.R.Civ.P. 1020(a) requires that where a plaintiff states more than one cause of action against one or more defendants, the claims against the respective defendants must be pleaded in separate counts. 58. Plaintiff's Complaint violates Pa.R.Civ.P. 1020(a) because it does not set forth each cause of action against each defendant in a separate count under a separate heading. 59. In addition, under the respective claims for relief under each count of the Complaint, the Plaintiff' fails to attribute what portion of the monetary amount it claims from each defendant as required by the rules of civil procedure. WHEREFORE, Moving Defendants move to strike/dismiss the Plaintiff's Complaint. XIII. Motion to Strike/Dismiss Failure to Append Writing 60. Count V of the Plaintiff's Complaint references a "Consulting, Severance and Release Agreement" executed between Rite Aid and Defendant Semic. 61. Pa.R.Civ.P. 1019(1) states in pertinent part: "When any claim or defense is based upon a writing, the pleader shall attach a copy of the writing, or the material part thereof . . . . 11 12 62. Although the Plaintiff's claim in Count V is based upon a writing, i.e., the "Consulting, Severance and Release Agreement," a copy of this writing was not attached to the Complaint as required. WHEREFORE, Defendant Semic moves to strike/dismiss the Plaintiff's Complaint for failure to conform to the procedural rules. RESPECTFULLY SUB:KITTED: David J. Fo er, Esquire COSTOPOULOS, FOSTER & FIELDS 831 Market Street/P.O. Box 222 Lemoyne, PA 170,13 Phone: (717) 761-2121 ATTORNEY FOR DEFENDANTS DAVID KONEFF AND SEMIC DATED: August 2003. 13 CERTIFICATE OF SERVICE I, David J. Foster, Esquire, attorney for Defendants David Koneff and Semic, do hereby certify that a true and correct copy of the within PRELIMINARY OBJECTIONS was served upon the counsel for the Plaintiff, Rite Aid Corporation, by placing same in the United States Mail, first-class postage prepaid, on the below date addressed as follows: Steve D. Shadowen, Esquire Gordon A. Einhorn, Esquire SCHNADER HARRISON Suite 700 30 North Third Street Harrisburg, PA 17101 BY://^\\ David J. F ,ter, Esquire DATED: August 2003. 14 ra { ., V i -n 71 cA NATHAN C. WOLF, ESQUIRE LAW OFFICE OF HAROLD 8. IRWIN, III ATTORNEY ID NO 87380 35 EAST HIOH STREET, SUITES 201/202 CARLISLE PA 17013 (717) 243-6090 ATTORNEY FOR DEFENDANT BRIAN EDEN RITE AID CORPORATION, Plaintiff IN THE COURT OF COMMON PLEAS : OF CUMBERLAND COUNTY, : PENNSYLVANIA V. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants "CIVIL ACTION - LAW NO. 2002-5883 NOTICE TO PLEAD TO: Rite Aid Corporation You are hereby notified to file a written response to the enclosed Preliminary Objections within twenty (20) days from service hereof or a judgment may be entered against you. _ Dated: August 12, 2003 1.i VVOIT, tsqulre Mt. 87380 Law Office of Harold S. Irwin, III 35 East High Street, Suite 201/202 Carlisle, PA 1013 (717) 243-6090 Attorney for Defendant Brian Eden NATHAN C. WOLF, ESQUIRE LAW OFFICE OF HAROLD S. IRWIN, III ATTORNEY ID NO 87380 35 EAST HIGH STREET, SUITES 201/202 CARLISLE PA 17013 (717) 243-6090 ATTORNEY FOR DEFENDANT BRIAN EDEN RITE AID CORPORATION, Plaintiff V. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants : IN THE COURT OF COMMON PLEAS : OF CUMBERLAND COUNTY, : PENNSYLVANIA CIVIL ACTION - LAW NO. 2002-5863 DEFENDANT BRIAN EDEN'S PRELIMINARY OBJECTIONS TO PLAINTIFFS' COMPLAINT Defendant Brian Eden, by his attorney, Nathan C. Wolf, Esquire, files these preliminary objections to Plaintifrs complaint pursuant to Pa.R.C.P. 1017, representing as follows: Lack of In Personam Jurisdiction 1. Defendant preliminarily objects to the Plaintiffs complaint on the grounds that this Court does not have In Personam Jurisdiction over the defendant, pursuant to Pa.R.C.P. 1028(a)(1). 2. Defendant is a resident of Florida and owns no real or personal property in the Commonwealth of Pennsylvania. 3. Defendant is not a principal in a Pennsylvania Corporation. WHEREFORE, Defendant Brian Eden, preliminarily objects to the claims raised by the Plaintiff Rite Aid Corporation and, thus respectfully requests that this Honorable Court grant this preliminary objection and dismiss the action brought against him by Plaintiff Rite Aid Corporation for lack of in personam jurisdiction. Motion for a More Specific Pleading 1. Plaintiff filed a complaint against multiple defendants in this matter, including inter alia, Susan Koneff. 2. Plaintiff identifies Defendant Susan Koneff on the caption of the Writ of Summons to this action, upon the Notice to Defend filed with the Complaint and upon the Complaint Coversheet. 3. Nevertheless, Plaintiff fails to specifically identify Defendant Susan Koneff, her involvement in the causes of action identified and fails include Defendant Susan Koneff in its prayers for relief. 4. Pursuant to Pa.R.C.P. 1028(a)(3) permits Defendant Brian Eden to request this Court issue an order upon Plaintiffs to file a more specific complaint whereupon Plaintiff identifies sufficient facts from which Defendants can prepare an adequate defense. 5. Plaintiff raises claims of, inter alia, Fraud, requiring Plaintiff to plead all material facts with specificity, pursuant to Pa.R.C.P. 1019 subsections (a) and (b). 6. Plaintiff fails to identify the role and culpability of Defendant Susan Koneff, whatsoever. WHEREFORE, Defendant Brian Eden demands that this Honorable Court grant the foregoing preliminary objection and direct the Plaintiff to prepare and file a more specific pleading, or, in the alternative, to dismiss this action in its entirety for failure to conform pleading to law or rule of court, with prejudice to the plaintiff. Respectfully submitted, Dated: August 12, 2003 -- 4afb?C. squire Lak-Offlce of Harold S. Irwin, III 35 East High Street, Suite 201/202 Carlisle, PA 1013 (717) 243-6090 Attorney for Defendant Brian Eden CERTIFICATE OF SERVICE I hereby certify that I have served a true and correct copy of Defendants Preliminary Objections upon the plaintiffs by placing same in the United States mail at Carlisle, Pennsylvania, Regular Mail on this date, and addressed as follows: GORDON A. EINHORN, ESQUIRE 30 North Third Street Suite 700 Harrisburg, PA 17101-1701 (Attorney for Plaintiff) David J. Foster, Esq. Leslie M. Fields, Esq. COUSTOPOULOS, FOSTER & FIELDS P.O. Box 222 831 Market Street Lemoyne, PA 17043 (Attorneys for Defendants Koneff and Semic) Dated: August 12, 2003 Law'bffice of Harold S. Irwin, III 35 East High Street, Suite 201/202 Carlisle, PA 1013 (717) 243-6090 Attorney for Defendant Brian Eden ? ?= o ' c t . , -,. z ? -. f?l(?? T <: ii . , T-- :_??. ._ _ . ?P %? ?? ?- ? ?J .lit .. a l? Z IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION Plaintiff, V. DAVID KONEFF, SUSAN KONEFF, NO. 02-5863 DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants. FIRST AMENDED COMPLAINT Preliminary Statement This case involves the misappropriation from Plaintiff Rite Aid Corporation ("Rite Aid") of at least $6 million by David Koneff ("Koneff') and Daniel Semic ("Semic"), both former employees in Rite Aid's Tax Department, and co-conspirators F & S Corporate Advisors, Inc. ("F & S"), Federal & State Corporate Advisors, Inc. ("Federal & State") and their President, Brian Eden ("Eden"). Pursuant to their scheme, defendants contrived to create the appearance that F & S (d/b/a New York Sales Tax Credit) had been retained by Rite Aid to audit sales tax payments made by Rite Aid to the State of New York for the purpose of obtaining refunds for Rite Aid of tax overpayments made to the state. From 1996 through 1999, defendants Eden and New York Sales Tax Credit submitted requests for payments to Rite Aid falsely claiming to have earned them for sales tax refunds obtained for Rite Aid. These requests were received and approved by Defendants Koneff and Semic despite the fact that New York Sales Tax Credit had not obtained any tax refunds for Rite Aid and were not entitled to any payments, a fact of which Koneff and Semic were well aware. Between January 1996 and December 1999 Koneff and Semic directed that in excess of 40 payments be made by Rite Aid to New York Sales Tax Credit totaling more than $6 million. These misappropriated funds were then shared by the Defendants Koneff, Semic, Eden, F&S, and Federal & State. Rite Aid brings the claims stated below in order to recover its funds wrongfully obtained by the Defendants. Parties Rite Aid Corporation is a corporation incorporated in the state of Delaware and has its principal place of business in Camp Hill, Pennsylvania. 2. Defendant David Koneff is a former employee of Rite Aid and until April of 2000 held the position of Manager in Rite Aid's Tax Department. On information and belief, David Koneff is a resident of York County, Pennsylvania residing at 760 Seitz Drive, Lewisberry, Pennsylvania 17339. Defendant Susan Koneff is the wife of Defendant David Koneff and, on information and belief, resides with him at 760 Seitz Drive, Lewisberry, Pennsylvania 17339. A portion of the funds misappropriated by David Koneff, Daniel Semic, Brian Eden and the corporate defendants was placed in accounts or used to purchase property that is held jointly by Susan Koneff and David Konef£ With the exception of the claim for conversion (Count II) in which she is specifically named, Susan Koneff is joined as a nominal defendant. 4. Defendant Daniel Semic is a former employee of Rite Aid and until July of 2000 held the position of Senior Director in Rite Aid's Tax Department. On information and belief, Semic is a resident of Dauphin County, Pennsylvania. 2 5. Defendant Sharon Semic is the wife of Defendant Daniel Semic and, on information and belief, resides in Dauphin County. A portion of the funds misappropriated by David Koneff, Daniel Semic, Brian Eden and the corporate defendants was placed in accounts or used to purchase property that is held jointly by Sharon Semic and Daniel Semic. With the exception of the claim for conversion (Count II) in which she is specifically named, Sharon Semic is joined as a nominal defendant. 6. Defendant F & S Corporate Advisors, Inc,, d/b/a New York Sales Tax Credit is a Florida corporation with its principal place of business at 2100 West 76`h Street, Suite 510, Hialeah, Florida 33016. Defendant Federal & State Corporate Advisors, Inc. is a Florida corporation with its principal place of business at 2100 West 76th Street, Suite 510, Hialeah, Florida 33016. 8. Defendant Brian Eden is the President and registered agent of Defendants F & S Corporate Advisors, Inc. and Federal & State Corporate Advisors, Inc. Eden is a resident of Florida. Facts Common to All Counts 9. Rite Aid has retail drugstores throughout much of the country and buys goods and services in numerous states. 10. In purchasing goods and services, Rite Aid is periodically charged state sales tax despite the fact that the transactions should have been exempt from such payment under state law. In order to recoup these funds, Rite Aid occasionally uses the services of outside firms which 1) audit the sales tax payments paid by Rite Aid to individual states; 2) identify overpayments; and 3) obtain refunds for Rite Aid from the state taxing authorities. These outside firms are paid commissions based upon a percentage of the moneys refunded. 11. Defendants Koneff and Semic, as managers within Rite Aid's Tax Department, were intimately familiar with these procedures and were in a position to abuse those procedures for personal gain. 12. On information and belief, Defendant Eden operates various companies which obtain tax refunds and credits for corporate clients and is also intimately familiar with these procedures and how they can be misused. 13. In or about January 1996, Defendants Koneff, Semic, Eden, and F & S, conspired to defraud Rite Aid and misappropriate its funds. 14. According to the defendants' scheme, Eden, through his company New York Sales Tax Credit (a d/b/a of defendant F & S), submitted requests for payment to Rite Aid falsely claiming that sales tax refunds had been obtained from New York State and requesting payment of commissions based upon the amount of the purported tax refunds. These requests were received at Rite Aid by Koneff and Semic who, knowing that they were false, approved the payments and directed that checks be issued by Rite Aid to New York Sales Tax Credit. 15. In furtherance of this scheme, on or about April 5, 1996 Defendant Eden opened a checking account at First Union Bank, Totowa, New Jersey in the name of F & S Corporate Advisors, Inc. d/b/a New York Sales Tax Credit. Eden also rented a private mailbox at MailBoxes, Etc. in Yonkers, New York to be used as a mailing address for Rite Aid's payments to New York Sales Tax Credit. New York Sales Tax Credit had no actual place of business in New York state or, for that matter, anywhere. The 'Yonkers address was apparently 4 obtained solely to create the appearance that New York Sales Tax Credit was a legitimate New York-based company. 16. The Defendants' plan was put into effect in or about January 1996 when the first request for payment was made by New York Sales Tax Credit requesting a payment in the amount of $5,000.00. According to plan, Koneff and Semic approved payment of the full amount, despite the fact that the commission had not been earned. During the balance of 1996, nine more checks in the same manner totaling more than $1 million. 17. Bank records obtained from First Union Bank and several other banks for the period January 1997 through 2000 show how defendants routed the misappropriated funds. 18. In January 1997, Koneff and Semic wrongfully approved payment to New York Sales Tax Credit of $89,500.00. Rite Aid's check in this amount was sent to New York Sales Tax Credit's mailbox in Yonkers, New York and was subsequently deposited by Eden or his agent into New York Sales Tax Credit's account at First Union Bank. 19. Shortly after the money was deposited into the New York Sales Tax Credit Account, Defendant Eden wrote checks on the account made payable to F & S and deposited these checks into accounts belonging to F & S at several banks in Florida. 20. Shortly after these deposits were made, Defendant Eden wrote checks on these Florida accounts made payable to Defendants Koneff and Semic thereby distributing to them their share of the misappropriated funds. On information and belief, other portions of these funds were distributed to Defendant Eden and possibly others. 21. This pattern was repeated on a nearly monthly basis over the next three years. In all, Semic and Koneff caused Rite Aid to send at least 42 payments to New York Sales Tax Credit totaling in excess of $6 million. Rite Aid's final payment to New York Sales Tax Credit was made in December 1999. Beginning at least as early as January 1997, each of these payments was first deposited into New York Sales Tax Credit's First Union Bank account and then transferred to Florida accounts belonging to F & S Corporate Advisors or another Eden company, Federal & State Corporate Advisors, Inc., before being; distributed to Koneff, Semic, Eden, and possibly others. 22. Between January 1997 and August 2000, Defendant Koneff received checks from F & S and/or Federal & State totaling more than $1.6 million, representing his share of the misappropriated funds. Defendants Semic and Eden are believed to have received similar amounts. 23. Throughout this entire period, Defendants concealed their activities from Rite Aid which was unaware of their actions. Rite Aid only recently became aware of Defendants' acts following an investigation leading to the discovery of the above facts. 24. The amounts demanded herein exceed the maximum for submission to compulsory arbitration. CountI - Fraud 25. Plaintiff repeats and incorporates by reference the allegations set forth in paragraphs 1 through 24 of this Complaint as though set forth here in full. 26. As described in detail above, Defendants Eden and F & S submitted numerous payment requests to Rite Aid falsely claiming that sales tax refunds had been obtained for Rite Aid and requesting payment of commissions based upon the purported refunds. 27. These misrepresentations were intentional and were made for the purpose of inducing Rite Aid to send funds to New York Sales Tax Credit. 28. As described in further detail above, Defendants Koneff and Semic misrepresented to Rite Aid that New York Sales Tax Credit was entitled to payment of the commissions in that they approved the payment requests submitted to Rite Aid and directed that checks be sent to New York Sales Tax Credit. 29. Koneff s and Semic's misrepresentations were intentional and were made for the purpose of inducing Rite Aid to pay the funds. 30. Rite Aid justifiably relied on Defendants' misrepresentations to it and paid the funds based upon the misrepresentations. 31. As a direct result of Defendants' misrepresentations, Rite Aid has suffered substantial monetary damages and other harm to its business. 32. To the extent that any of the misappropriated assets have been placed in joint accounts held by the above defendants with others or have otherwise been transferred, Rite Aid avers that these transfers were fraudulent and requests that they be voided pursuant to the Pa. Uniform Fraudulent Transfer Act, 12 Pa.C.S.A. § 5101 et seq. WHEREFORE, Rite Aid demands judgment against David Koneff, Daniel Semic, Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors, Inc. in an amount to be determined at trial, together with injunctive relief, pre- and post judgment interest, costs, attorneys fees, punitive damages and such other relief as the Court deems just and proper. Count II - Conversion 33. Plaintiff repeats and incorporates by reference the allegations set forth in paragraphs 1 through 32 of this Complaint as though set forth here in full. 34. Defendants Koneff, Semic, Eden, F & S, and Federal & State have converted Rite Aid's money by intentionally and wrongfully exercising ownership, dominion 7 and control over the funds obtained under false pretenses from Rite Aid and by doing so without consent or lawful justification. 35. A portion of the funds misappropriated from Rite Aid was placed by David Koneff into accounts owned jointly by him with Susan Konef£ SusanKoneff subsequently converted Rite Aid's funds by intentionally exercising ownership, dominion and control over the money in these accounts, without consent or lawful justification. 36. A portion of the funds misappropriated from Rite Aid was placed by Daniel Semic into accounts owned jointly by him with Sharon Semic. Sharon Semic subsequently converted Rite Aid's funds by intentionally exercising ownership, dominion and control over the money in these accounts, without consent or lawful justification. 37. As a direct and proximate cause of Defendants' conversion of Rite Aid's funds, Rite Aid has suffered and will continue to suffer monetary damages and other harm to its business. WHEREFORE, Rite Aid demands judgment against David Koneff, Susan Koneff, Daniel Semic, Sharon Semic, Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors Inc. in an amount to be determined at trial, together with injunctive relief, pre- and post-judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court deems just and proper. Count III - Misappropriation of Funds 38. Plaintiff repeats and incorporates by reference the allegations set forth in paragraphs 1 through 37 of this Complaint as though set for here in full. 39. Defendants Koneff, Semic, Eden, F & S, and Federal & State misappropriated and used for their own purposes funds which were given to them under false pretenses. 40. As the direct and proximate result of Defendants' action, Rite Aid has suffered substantial monetary and other harm to its business. WHEREFORE, Rite Aid demands judgment against David Koneff, Daniel Semic, Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors Inc. in an amount to be determined at trial, together with injunctive relief, pre- and post judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court deems just and proper. Count IV - Civil Conspiraev 41. Rite Aid repeats and incorporates by reference the allegations set forth in Paragraph I - 40 of this Complaint as though set forth here in full. 42. Defendants Koneff, Semic, Eden, F & S, and Federal & State combined or agreed to defraud Rite Aid and to convert and misappropriate its funds. 43. Defendants entered this combination or agreement with the intent to defraud Rite Aid and to convert and misappropriate its funds. 44. As the direct and proximate result of Defendants' action, Rite Aid has suffered substantial monetary and other harm to its business. WHEREFORE, Rite Aid demands judgment against David Koneff, Daniel Semic, Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors Inc. in an amount to be determined at trial, together with injunctive relief, pre- and post-judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court deems just and proper. 9 Count V - Fraudulent Misrepresentation 45. Rite Aid repeats and incorporates by reference the allegations set forth in Paragraphs 1 through 44 of this Complaint as though set forth herein full. 46. In or about July 2000, Rite Aid and Defendant Semic entered into a Consulting, Severance and Release Agreement ("Agreement") pursuant to which Semic was paid his regular rate of pay for 52 weeks and continued to receive certain benefits after the termination of his employment with Rite Aid. 47. Prior to entering into the Agreement, Semic concealed from Rite Aid his acts of misconduct as alleged in Paragraphs 1 through 39 above. 48. Semic's concealment of his misconduct constituted a material misrepresentation and was done with the intent to mislead Rite Aid and in order to induce Rite Aid to enter into the Agreement. 49. Rite Aid justifiably relied on Semic's failure to disclose material information and but for his concealment of these material facts, Rite Aid would not have entered into the Agreement. 50. As the direct and proximate result of Sernic's action, Rite Aid has suffered harm in that it made severance payments to Semic and provided other benefits pursuant to the Agreement. 10 WHEREFORE, Rite Aid demands judgment against Daniel Semic in an amount to be determined at trial together with injunctive relief, pre- and 1post judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court deems just and proper. V. S e D. Shadowen., I.D. No. 41953 ordon A. Einhorn, I.D. No. 59006 HANGLEY ARONCHICK SEGAL & PUDLIN 30 North Third Street, Suite 700 Harrisburg, PA 17101 (717) 231-4000 Attorneys for Plaintiff Rite Aid Corporation Dated: September 15, 2003 11 VERIFICATION James J. Comitale, Esquire, deposes and says that I am Associate Counsel for Rite Aid Corporation, and that while I do not have personal knowledge of all of the facts recited in the foregoing First Amended Complaint, the information contained therein has been collected and made available to me by others and said First Amended Complaint is true and correct to the best of my knowledge, information and belief and is therefore verified on behalf of Rite Aid Corporation. I make this statement subject to the penalties of 18 Pa. C. S. § 4904 relating to unswom falsification to authorities. . Dated: 0? I C1 I C, 3 By: ames J. Comitale, Esquire Senior Associate Counsel Rite Aid Corporation CERTIFICATION OF SERVICE This is to certify that I served a true and correct copy of the attached First Amended Complaint upon the following persons via first class mail: David J. Foster, Esquire Leslie M. Fields, Esquire Costopoulos, Foster & Fields 831 Market Street Lemoyne, PA 17043 Attorneys for Defendants Koneff and Semic Nathan C. Wolf, Esquire Irwin Law Offices 64 S. Pitt Street Carlisle, PA 17013 Attorneys for Defendant Eden 5v oA. Einhorn Dated: September 15, 2003 (7 7 T_l -ri G IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION Plaintiff, V. DAVID KONEFF, SUSAN KONEFF, NO. 02-5863 DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants. PLAINTIFF RITE AID CORPORATION'S RESPONSE TO PRELIMINARY OBJECTIONS OF DEFENDANTS DAVID KONEFF AND DANIEL SEMIC Plaintiff Rite Aid Corporation ("Rite Aid") responds to the preliminary objections of Defendants David Koneff ("Koneff') and Daniel Semic ("Sernic") with corresponding paragraph numbers as follows: 1. Admitted. By way of further response, the action was originally commenced on December 9, 2002 by the issuance of Writ of Summons against David and Susan Koneff. 2. Admitted. 3. Admitted. 4. Admitted. 5. Admitted. By way of further response, Defendant Susan Koneff is a nominal defendant with respect to these claims. 6. Admitted. Admitted. 8. Admitted that Rite Aid has suffered the losses stated in its complaint. 9. Admitted. 10. No response required. 1. MOTION TO STRIKE THE "PRELIMINARY STATEMENT" 11. Admitted that the Complaint contains a brief introduction outlining the claims against the defendants and provided for the assistance of the court. All of the facts averred in the preliminary statement are averred again, in greater detail, within the body of the complaint. 12. Admitted that defendants correctly quote :Pa. R. Civ. P. 1019(a). 13. Admitted that defendants correctly quote :Pa. R. Civ. P. 1022. 14. The averments of paragraph 14 constitute conclusions of law to which no response is required. To the extent a response is necessary, the averments are denied in that the Preliminary Statement is merely an introduction provided for the benefit of the Court and which need not be answered by defendants. Deibler v. Thrift Drug Co. of Penna., 34 Pa. D. & C.2d 209, 211 (Leb. C.C.P. 1964). As such, this paragraph need not be numbered and may contain more than one allegation. In addition, the material facts stated in the preliminary statement are in a concise and summary form and may be answered by defendants if they so desire. 15. Plaintiff's response to Paragraph 14 is incorporated herein by reference. Furthermore, if defendants elect to respond to the Preliminary Statement they can fulfill the requirement of Rule 1029 that "admissions and denials in a responsive pleading shall refer specifically to the paragraph in which the averment .... is set forth" by referring to the "Preliminary Statement." 16. Denied that the Preliminary Statement contains scandalous and impertinent matter. Scandalous and impertinent matters are unnecessary allegations which bear cruely upon the moral character of an individual and which are irrelevant to the material issues before the Court. Fromm v. Fromm, 42 Pa. D. & C.2d 77, 83 (Dauph. C.C.P. 1967). The description of the defendants' fraudulent conduct that are contained in the preliminary statement are directly relevant to plaintiff s claims and are therefore neither scandalous nor impertinent. 17. Denied. On the contrary, the averments contained in the Preliminary Statement are averments of material fact to which defendants can respond if they desire. WHEREFORE, Plaintiff Rite Aid requests that defendants' preliminary objection to the Preliminary Statement be overruled. II. MOTION FOR MORE SPECIFIC PLEADING: INSUFFICIENCY OF PLEADING - COUNT I 18. Admitted that defendants correctly quote a portion of Pa. R. Civ. P. 1019(b). 19. Admitted. 20. Denied. On the contrary, the averments of Count I are sufficiently specific as to state a claim for fraud. 21. Denied. On the contrary, the averments of Count I are sufficiently specific as to state a claim for fraud. WHEREFORE, Plaintiff Rite Aid respectfully requests that Defendants' preliminary objection concerning Count I be overruled. III. MOTION TO DISMISS: FAILURE TO STATE A CLAIM (DEMURRER) IN COUNT I. 22. The averments of Paragraph 22 constitute constitutions of law to which no response is required. 23. The averments of Paragraph 22 constitute a conclusion of law to which no response is required. To the extent a response is required, the averment is denied. Plaintiff s averments in Count I contain sufficient material facts to state a claim for fraud. WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection to Count I be overruled. IV. MOTION FOR MORE SPECIFIC PLEADING: INSUFFICIENCY OF PLEADING - COUNT II. 24. Admitted. 25. Admitted that Defendants correctly quote a portion of Paragraph 31 of the Complaint but deny that this statement is made in a conclusory manner. On the contrary, as part of Count II, Plaintiff incorporates by reference paragraphs 1 through 29 of the Complaint which contain a detailed description of defendants' acts. 26. Denied. On the contrary, because Plaintiff incorporates by reference the detailed description of Defendants' activities, the allegation complained of is sufficiently specific to apprise the defendants of the claim against them, allowing them to prepare a response and defense. WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection to Count II be overruled. V. MOTION FOR MORE SPECIFIC PLEADING: INSUFFICIENCY OF PLEADING - COUNT III. 27. Denied. On the contrary, in support of it's claim for misappropriation of funds, Plaintiff repeats and incorporates by reference the previous 32 Paragraphs of the Complaint containing a detailed description of Defendants' actions. 28. The averment of Paragraph 28 is a conclusion of law to which no response is required. If a response is required, the allegation is denied for the reasons stated in Paragraph 27 above. WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection to Count III be overruled. VI. MOTION FOR MORE SPECIFIC PLEADING: INSUFFICIENCY OF PLEADING (DEMURRER) - COUNT IV. 29. Admitted. 30. Admitted that Defendants correctly quote portions of Paragraphs 37 and 38 of the Complaint. It is denied that the allegations are made in a "boiler plate fashion." 31. The averments of Paragraph 31 constitute conclusions of law to which no response is required. If a response is necessary, the averments are denied. On the contrary, Plaintiff s claim for Civil Conspiracy includes Paragraph 1 through 35 of the Complaint, which are repeated and incorporated by reference, thereby making the claim sufficiently specific to apprise defendants of the claim against them and permitting them to prepare a response in defense. WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection to Count IV be overruled. VII. MOTION FOR MORE SPECIFIC PLEADING: INSUFFICIENCY OF PLEADING - COUNT V. 32. Admitted that defendants correctly quote a portion of Pa. R. Civ. P. 1019(b). 33. Admitted. 34. Denied. On the contrary, the averments contained in Paragraphs 40 through 45 of the Complaint, which include the averments of the first 39 paragraphs of the Complaint which are incorporated by reference, are sufficiently specific to allege a claim of fraud. WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection to Count V be overruled. VIII. MOTION TO DISMISS: FAILURE TO STATE A CLAIM (DEMURRER) IN COUNT V. 35. The averments in Paragraph 35 constitute: a conclusion of law to which no response is required. 36. The averments in Paragraph 35 constitute a conclusion of law to which no response is required. To the extent a response is required, the averment is denied. On the contrary, Paragraphs 40 through 45 of the Complaint contain sufficient material facts to state a claim for fraudulent misrepresentation. WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection to Count V of the Complaint be overruled. IX. MOTION FOR MORE SPECIFIC PLEADING: FAILURE TO STATE RELIEF REQUESTEDIMONETARY DAMAGES WITH SUFFICIENT SPECIFICITY. 37. Admitted. 38. Admitted in part and denied in part. It is admitted that the other harms referred to in the Complaint are not specifically identified in that they are still the subject of investigation and will be disclosed prior to trial. It is denied that Plaintiff has failed to identify the relief sought. 39. Admitted. 40. Admitted that no specific monetary demand is made. By way of further response, Plaintiff s failure to state a specific monetary demand is in accordance with Pa. R.Civ. P. 1021(b) which provides that "any pleading demanding relief for unliquidated damages shall not claim any specific sum." 41. Admitted that defendants correctly quote a portion of Pa. R. Civ. P. 1021(a). 42. The averments of Paragraph 42 constitute a conclusion of law to which no response is required. If a response is required, the averment is denied in that in each of its claims, Rite Aid specifically sets forth the relief sought requesting "judgment ... in an amount to be determined at trial, together with injunctive relief, pre- and post-judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court deems just and proper." 43. Denied that Plaintiff should be required to state a specific monetary amount it demands from each of the Defendants. On the contrary, Pa. R.C.P. 1021(b) prohibits the demand of a specific sum. WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection to Counts I, II, III, and IV of the Complaint, alleging "failure to state relief requested/monetary damages with sufficient specificity," be overruled. X. MOTION TO STRIKE/DISMISS: FAILURE TO STATE WHETHER AMOUNT CLAIMED EXCEEDS COMPULSORY ARBITRATION LIMITS 44. The averment of Paragraph 44 constitutes a conclusion of law to which no response is required. 45. Admitted. 46. Denied. On the contrary, Plaintiff's Complaint states that it seeks to recover in excess of $6 million which was misappropriated by Defendants, an amount that is obviously well in excess of the arbitration limit. Moreover, in it's First Amended Complaint, which is being filed concurrently with these responses, Plaintiff explicitly states that the amount sought is in excess of the arbitration limit. WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection alleging "failure to state whether amount claimed exceeds compulsory arbitration limits" be overruled. XI. MOTION TO STRIKE/DEMURRER CLAIMS FOR PUNITIVE DAMAGES: FAILURE TO STATE A CLAIM UPON WHICH RELIEF MAY BE GRANTED 47. Admitted. 48. The averment of Paragraph 48 constitutes a conclusion of law to which no response is required. 49. The averment of Paragraph 49 constitutes a conclusion of law to which no response is required. In the event a response is required, the facts alleged in the Complaint more than adequately justify the award of punitive damages. 50. Denied. On the contrary, while the Complaint does not use the precise words stated by Defendants, it is self-evident from the description of defendants' acts that these acts were outrageous and wanton. 51. Denied. On the contrary, such facts are fully set forth in the Complaint. 52. Denied. On the contrary, Plaintiff does not use conclusory allegations but fully sets forth facts sufficient to support a claim for punitive damages. 53. Denied. On the contrary, Plaintiff has set forth facts sufficient to support a claim for punitive damages. 54. Denied. On the contrary, Plaintiff has alleged facts which fully support the requirements for an award of punitive damages. 55. Denied. On the contrary, Plaintiff has alleged facts which fully support the requirements for an award of punitive damages. WHEREFORE, Plaintiff Rite Aid respectfully requests that Defendants' preliminary objection to the demand for punitive damages be overruled. XII. MOTION TO STRIKE/DISMISS: FAILURE TO BREAK DOWN COUNTS WITH RESPECT TO EACH INDIVIDUAL DEFENDANT. 56. Admitted that Plaintiff s Complaint contains five individual counts which pertain to all defendants. 57. The averments of this paragraph constitute conclusions of law to which no response is required. If a response is required, the averments are denied in that Pa. R.C.P. 1020(a) does not require that a cause of action be pleaded against only one defendant and that other defendants must be pleaded in separate counts. On the contrary, Rule 1020(a) requires only that each separate cause of action against a defendant must be stated in separate counts. 58. This statement constitutes a conclusion of law to which no response is required. If a response is necessary, the averment is denied in that Rule 1020(a) does not require that a cause of action be pleaded against only one defendant. 59. This statement constitutes a conclusion of law to which no response is required. In the event a response is required, it is denied that the Rules of Civil Procedure require Plaintiff to state what portion of the monetary demand it claims from each defendant. Furthermore, the Complaint makes clear that Plaintiff seeks the :Full amount from each defendant. WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection to strike/dismiss the Complaint for failure to breakdown counts with respect to each individual defendant be overruled. XIII. MOTION TO STRIKE/DISMISS: FAILURE TO APPEND WRITING 60. Admitted. 61. Admitted that Pa. R. Civ. P. 1019(i) states that a writing must be attached to a pleading if a claim or defense asserted therein is "based upon" that writing. 62. Denied. On the contrary, Plaintiff's claim in Count V is not "based upon" the "Consulting, Severance, and Release Agreement" between Rite Aid and Defendant Semic and therefore that agreement need not be appended to the Complaint. The Complaint alleges that Semic's misrepresentations induced Rite Aid to enter into the agreement. 10 WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection to strike/dismiss Plaintiff s Complaint for failure to append a writing be overruled. 46z===' Ste . Shadowen, I.D. No. 41953 ordon A. Einhorn, I.D. No. 59006 HANGLEY A.RONCHICK SEGAL & PUDLIN 30 North Third Street, Suite 700 Harrisburg, PA 17101 (717) 364-1004 (717) 364-1020 - facsimile Attorneys for Plaintiff Rite Aid Corporation Dated: September 15, 2003 11 James J. Comitale, Esquire, deposes and says that I am Associate Counsel for Rite Aid Corporation, and that while I do not have personal knowledge of all of the facts recited in the foregoing Response to Preliminary Objections, the information contained therein has been collected and made available to me by others and said Response is true and correct to the best of my knowledge, information and belief and is therefore verified on behalf of Rite Aid Corporation. I make this statement subject to the penalties of 18 Pa. C.S. § 4904 relating to unworn falsification to authorities. By: - Jaynes J. Comitale, Esquire Senior Associate Counsel Rite Aid Corporation Dated: 9 0 CERTIFICATION OF SERVICE This is to certify that I served a true and correct copy of the attached Plaintiff Rite Aid Corporation's Response to Preliminary Objections of Defendants David Koneff and Daniel Semic upon the following persons via first class mail: David J. Foster, Esquire Leslie M. Fields, Esquire Costopoulos, Foster & Fields 831 Market Street Lemoyne, PA 17043 Attorneys for Defendants Koneff and Semic Nathan C. Wolf, Esquire Irwin Law Offices 64 S. Pitt Street Carlisle, PA 17013 Attorneys for Defendant Eden Go n A. 'inhorn Dated: September 15, 2003 f-? <- ' ?_ ... -. . n -a?? .r - i?, ? -? G,:' V+ ?? ?-- <; _ ; i '• Y? .. .? J7 IU COURT OF COMMON PLEAS OF INTHE COUNTY, PENNSYLVANIA CUMBERLAND RITE AID CORPORATION plaintiff, v• NO. 02-5863 DAVID KONEFF, SUSAN KONEFF, DANIEL ONEF ,, SHARON SEMIC, TE ADVISORS, INC., F & S CORPORA SALES TAX dtbla NEW YORK & STATE CREDIT, FEDERAL CORPO?'y ADVISORS, INC. and BRIAN EDEN Defendants- ?Op PLAINTIFF RITE AID CORI ATION'S RESPONSE TO JECTIONS OF DEFENDANT BRIAN EDEN PRELIMINARY OB responds to the preliminary objections Plaintiff Rite Aid Corporation ('Rite) id") Defendant Brian Eden ("Eden") with corresponding paragraph numbers as follows: of OF IN PERSONAM[ JURISDICTION I LACK Complaint on the grounds 1 Admitted that Eden preliminary objects to the gowever, personal personal jurisdiction over Defendant Eden. 2 and (4) that the Court does not have t to 42 Pa. C.S.A. § 5322 (a)(1), O' jurisdiction exists over Defendant Eden pursuanMoreover, Eden had sufficient minimum contacts with Pennsylvania for the Court to exert jurisdiction. CERTIFICATION OF SERVICE This is to certify that I served a t,, Aid e and correct copy of the attached Plaintiff Rite Corporation's Response to Preliminary Objections of Defendant Brian Eden upon the following persons via first class mail: David J. Foster, Esquire Leslie M. Fields, Esquire Costopoulos, Foster & Fields 831 Market Street Lemoyne, PA 17043 Attorneys for Defendants Koneffand.Semic Nathan C. Wolf, Esquire Irwin Law Offices 64 S. Pitt Street Carlisle, PA 17013 Attorneys for Defendant Eden 57 on Dated: September 15, 2003 c, n - - . n - _ f ,i T ` J r: ,t _?., ?- c3 . ?. , ? CI '?i . '.J 5 . C V r C., -,7 lit i ?? 2. After reasonable investigation, Plaintiff is unable to admit or deny the truth of the averment contained in Paragraph 2 and, as such, it is denied. After reasonable investigation, Plaintiff is unable to admit or deny the truth of the averment contained in Paragraph 3 and, as such, it is denied. WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection of Brian Eden requesting that the action against him be dismissed for lack of personal jurisdiction be overruled. II. MOTION FOR A MORE SPECIFIC PLEADING 1. Admitted that Plaintiff filed a complaint against multiple defendants including Susan Koneff. 2. Admitted that Plaintiff identified Defendant Susan Koneff in the Writ of Summons, the Notice to Defend and the Complaint cover sheet. 3. Denied that Plaintiff has failed to specifically identify Defendant Susan Koneff, her involvement in the causes of action or in its prayers for relief. On the contrary, this information is contained in Rite Aid's First Amended Complaint. 4. Admitted that Pa. R. Civ. P. 1028(a)(3) permits a defendant to request an order requiring a more specific pleading. 5. Admitted that the Plaintiff has stated a claim for fraud. With respect to Defendant Eden's statements concerning Pa. R. Civ. P. 1019, the Rule is a writing which speaks for itself. By way of further response, each of the claims stated by Rite Aid in its Complaint and First Amended Complaint is stated with sufficient specificity. 6. Denied. The role and culpability of Defendant Susan Koneff are identified in the First Amended Complaint. WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection of Defendant Brian Eden requesting a more specific pleading or, alternatively, the dismissal of this action be overruled. aSee-.ado en, I.D. No. 41953 G on A. Einhorn, I.D. No. 59006 ANGLEY ARONCHICK SEGAL & PUDLIN 30 North Third Street, Suite 700 Harrisburg, PA 17101 (717) 364-1004 (717) 364-1020 - facsimile Attorneys f<)r Plaintiff Rite Aid Corporation Dated: September 15, 2003 VERIFICATION James J. Comitale, Esquire, deposes and says that I am Associate Counsel for Rite Aid Corporation, and that while I do not have personal knowledge of all of the facts recited in the foregoing Response to Preliminary Objections, the information contained therein has been collected and made available to me by others and said Response is true and correct to the best of my knowledge, information and belief and is therefore verified on behalf of Rite Aid Corporation. I make this statement subject to the penalties of 18 Pa. C.S. § 4904 relating to unworn falsification to authorities. By:w_ ` -.. w v James J. Comitale, Esquire Senior Associate Counsel Rite Aid Corporation Dated: r `? b CERTIFICATION OF SERVICE This is to certify that I served a true and correct copy of the attached Plaintiff Rite Aid Corporation's Response to Preliminary Objections of Defendant Brian Eden upon the following persons via first class mail: David J. Foster, Esquire Leslie M. Fields, Esquire Costopoulos, Foster & Fields 831 Market Street Lemoyne, PA 17043 Attorneys for Defendants Koneff and Semic Nathan C. Wolf, Esquire Irwin Law Offices 64 S. Pitt Street Carlisle, PA 17013 Attorneys for Defendant Eden Dated: September 15, 2003 :'? <? - . C n ' ? *t ?` . ./ J ?C,-. ' .. C. C _ ? ,( :J C. l 7 ... ] -? IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION Plaintiff, V. DAVID, KONEFF, SUSAN KONEFF, DANIEL SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC and BRIAN EDEN Defendants. NO. 02-5863 PRAECIPE To the Prothonotary: Please list for argument at the next scheduled Argument court the preliminary objections of Defendants David Koneff and Daniel Semic. Respectfully submitted, S e D. inado,,en, I.D. No. 41953 Gordon A.. Einhorn, I.D. No. 59006 HANGLEY ARONCHICK SEGAL & PUDLIN 30 North Third Street, Suite 700 Harrisburg, PA 17101 (717) 364-1004 (717) 364-1020 - facsimile Dated: October 1, 2003 Attorneys for Plaintiff Rite Aid Corporation CERTIFICATION OF SERVICE This is to certify that I served a true and correct copy of the attached Praecipe upon the following persons via first class mail: David J. Foster, Esquire Leslie M. Fields, Esquire Costopoulos, Foster & Fields 831 Market Street Lemoyne, PA 17043 Attorneys for Defendants Koneff and Semic Nathan C. Wolf, Esquire Irwin Law Offices 64 S. Pitt Street Carlisle, PA 17013 Attorneys for Defendant Eden Go n A. Einhorn Dated: October 1, 2003 C7 rr C,t fl- I Ca A RITE AID CORPORATION, Plaintiff V. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN, Defendants IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Civil No. 02-5863 PRELIMINARY OBJECTIONS OF DEFENDANTS DAVID KONIVF, SUSAN KONEFF, DANIEL SEMIC AND SHARON SEMIC AND NOW come the Defendants, David. Koneff, Susan Koneff, Daniel Semic and Sharon Semic, by and through their attorney, David J. Foster, Esquire, COSTOPOULOS, FOSTER & FIELDS, and respectfully file the following Preliminary Objections to the Plaintiff's First Amended Complaint: 1. On or about June 10, 2003, the Plaintiff, Rite Aid Corporation ("Rite Aid"), filed a civil, complaint against the Defendants alleging that they participated in a scheme to defraud the Plaintiff in excess of $6 million for sales tax refunds not actually earned; it later added Susan Koneff to the caption as a defendant. 2. Defendants David Koneff and Daniel Semic timely filed preliminary objections to the complaint. 3. On or about September 16, 2003, the Plaintiff filed a first amended! complaint, adding allegations against Susan Koneff ii 1 and Sharon Semic and naming them as defendants. 4. The Plaintiff alleges that in purchasing goods and services for its drugstores, it is charged sales tax for certain transactions which should be exempt from such payment under state law. See Complaint at paras. 9-10. 5. The Plaintiff avers that, in order to recoup the sales taxes paid, it employs outside firms to audit the sales tax payments, identify overpayments and obtain refunds from the respective states. See Complaint at para. 10. 6. The Plaintiff states that Defendants David Koneff and Daniel Semic, as managers with Rite Aid, "were intimately familiar with these procedures and how they can be misused." See Complaint at para. 12. 7. The Plaintiff alleges that Defendants David Koneff, Daniel Semic, Eden and F & S conspired to defraud Rite Aid and misappropriate its funds by having Defendant Eden, through Defendant F & S, submit requests for payment to Rite Aide falsely claiming that sales tax refunds had been obtained from New York State and requesting payment of commissions based upon the amount of the purported tax refunds, which commission payments were made by Rite Aid through Defendants David Koneff and Daniel Semic. See Complaint at paras. 13-14. 8. Acco?ding to the Plaintiff's Complaint, this plan started in January 196 and continued until August 2000, with at least 42 2 payments made by Rite Aid to New York Sales Tax Credit in excess of $6 million. See Complaint at paras. 13-22. 9. Plaintiff brings counts of fraud, conversion, misappropriation of funds and civil conspiracy against all Defendants and a count of fraudulent misrepresentation against Defendant Daniel Semic. 10. Plaintiff broadly claims that it "has suffered substantial monetary and other harm to its business." See Complaint at paras. 31, 37, 40 and 44. 11. Plaintiff demands judgment against the Defendants "in an amount to be determined at trial, together with injunctive relief, pre- and post-judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court. deems just and proper." See Complaint, prayers for relief under Counts I-V. 12. Defendants David Koneff, Susan Koneff, Daniel Semic and Sharon Semic respectfully file the following preliminary objections to the Plaintiff's Complaint. I. Motion to Strike the "Preliminary Statement" 13. The Plaintiff's Complaint opens with a so-called "Preliminary Statement," which is a page-and-a-half narrative summary of the accusations made against all the Defendants, 14. Pa.?.Civ.P. 1019(a) provides: "The material facts on which a causelof action or defense is based shall be stated in a concise and summary form." 3 15. Pa.R.Civ.P. 1022 provides: "Every pleading shall be divided into paragraphs numbered consecutively. Each paragraph shall contain as far as practicable only one material allegation." 16. The "Preliminary Statement" violates these rules because the material facts are not stated in a "concise and summary form," it is not divided into consecutively numbered paragraphs, and it contains more than one material allegation. 17. Moving Defendants are not able to conform to Pa.R.Civ.P. 1029 which requires them to admit or deny in a responsive pleading "specifically to the paragraph in which the averment admitted or denied is set forth[] 11 because of the narrative form of the so- called "Preliminary Statement." 18. Further, the "Preliminary Statement" should be stricken because it avers scandalous and impertinent matter, such as accusing Defendants of participating in a "scheme," of having "contrived to create the appearance" that Defendant F & S had been retained by Plaintiff, of "falsely claiming" to have earned for them sales tax refunds, and that Moving Defendants were "well aware" that Defendant F & S was not entitled to payments. 19. The aforesaid allegations in the, "Preliminary Statement" are conclusory, argumentative, improper and prejudicial to the Moving Defendants and are not averments of material fact to which they can resp?nd and against which they can defend. WHEREFORE, Moving Defendants move that the "Preliminary 4 Statement" of Plaintiff's Complaint be stricken. II Motion for More Specific Pleading: Insufficiency of Pleading - Count I 20. Pa.R.Civ.P. 1019(b) mandates in part: "Averments of fraud or mistake shall be averred with particularity." 21. Count I of the Plaintiff's Complaint is an allegation of fraud against Defendants and Moving Defendants in particular. 22. Count I, standing alone, consists of conclusory pleadings of law against Moving Defendants and fails to allege fraud with any let alone sufficient particularity. 23. Even reading Count I together with the so-called "Preliminary Statement," which Moving Defendants have moved to strike, and the "Facts Common to All Parties," the averment of fraud has not been pleaded with sufficient particularity. WHEREFORE, Moving Defendants move to :require that Plaintiff be required to plead fraud in Count I with sufficient particularity. III. Motion to Dismiss: Failure to State a Claim (Demurrer) in Count I 24. The tort of "fraud," properly known in Pennsylvania as that of "fraudulent misrepresentation," contains the following essential elements: that the defendant made a misrepresentation to the plaintiff; the misrepresentation was fraudulent; the misrepresentation was of a material fact; the defendant intended that the plaintiff rely on it; the plaintiff in fact relied on the 5 material misrepresentation; and the plaintiff's reliance on it was a factual cause of the harm suffered by the plaintiff. 25. As a matter of law, Count I of the Plaintiff's Complaint fails to state a claim for "fraud" against Moving Defendants because it fails to contain sufficient material facts. WHEREFORE, Moving Defendants move that Count I of Plaintiff's Complaint be dismissed for failure to state a claim. IV Motion for More Specific Pleading: Insufficiency of Pleading Count II 26. Count II of the Plaintiff's Complaint is a count of conversion. 27. In a conclusory manner, the Plaintiff avers that the Defendants "converted Rite Aid's money by intentionally and wrongfully exercising ownership, dominion and control over the funds obtained under false pretenses from Rite Aid." 28. Plaintiff further avers in a conclusory manner that a portion of the funds misappropriated were placed by Defendant David Koneff into accounts jointly owned by him with Defendant Susan Koneff, "who subsequently converted Rite Aid's funds by intentionally exercising ownership, dominion and control over the money in these accounts, without consent or lawful justification." 29. Plaintiff further avers in a conclusory manner that a portion of t?e funds misappropriated were placed by Defendant Daniel Semic ',into accounts jointly owned by him with Defendant 6 Sharon Semic, "who subsequently converted Rite Aid's funds by intentionally exercising ownership, dominion and control over the money in these accounts, without consent or lawful justification." 30. Those allegations are insufficiently specific to adequately and properly apprise the Moving Defendants of the claim against them 'land prevents them from preparing a response and defense. , Moving Defendants move to require the Plaintiff to plead Count Il with more specificity. -- Count III 31. In support of Count III for "Misappropriation of Funds," the entirety of the Plaintiff's allegation is: "Defendants misappropriat4d and used for their own purposes funds which were given to themlunder false pretenses." 32. The aforesaid averment is insufficiently specific to adequately an4 properly apprise the Moving Defendants of the claim against them and prevents them from preparing a response and defense. WHEREFOR?, Moving Defendants move to require the Plaintiff to plead Count III with sufficient specificity. 33. Count IV is an allegation of civil conspiracy against all 7 sufficient particularity. VIII Motion to Dismiss: Failure to State a Claim (Demurrer) in Count V 39. The ,tort of "fraudulent misrepresentation" contains the following essential elements: that the defendant made a misrepresentation to the plaintiff; the misrepresentation was fraudulent; the misrepresentation was of a material fact; the defendant intended that the plaintiff rely on it; the plaintiff in fact relied on the material misrepresentation; and the plaintiff's reliance on it was a factual cause of the harm suffered by the plaintiff. 40. As a matter of law, Count V of the Plaintiff's Complaint fails to state a claim for "fraudulent misrepresentation" against Defendant Daniel Semic because it fails to contain sufficient material facts. WHEREFOR8, Defendant Daniel Semic moves that Count V of Plaintiff's Complaint be dismissed for failure to state a claim. IX. Motion for More Specific Pleading: Failure to State Relief Requested/monetary Damages with Sufficient Specificity 41. Counts I, II, III and IV of the Plaintiff's Complaint allege that the Plaintiff has suffered "substantial monetary and other harm to',its business." 42. Pl4ntiff fails to state specifically what "other harm" has been doneiIto its business or how Moving Defendants have caused 9 that harm 43. All counts of the Plaintiff's Complaint demand judgment against all Defendants "in an amount to be determined at trial." 44. Plaintiff fails to state the monetary amount it demands from each of the Moving Defendants. 45. Pa.1R.Civ.P. 1021(a) states in part: "Any pleading demanding relief shall specify the relief sought." 46. Plaintiff's Complaint fails to specifically set forth the relief soughtand, therefore, the phrase "other harm to its business" sho?ld be stricken/dismissed or, alternatively, pleaded with sufficient specificity. 47. Also, Plaintiff should be required to state a specific monetary amount it demands from each of the Moving Defendants. WHEREFOR?, Moving Defendants move to strike/dismiss the phrase "other harm to its business" under Counts I through IV; require the Plaintiff to amplify "other harm" with specificity; and to order the Plaintiff''to state a specific monetary amount it demands from each Moving Defendant under all Counts. 48. Pa?R.Civ.P. 1021(c) requires that in counties having compulsory arbitration, the plaintiff must state whether the amount claimed does r does not exceed that jurisdictional limit. 49. Cumberland County has local rules governing compulsory 10 arbitration. See Rule 1301-1, et seq. 50. Plaintiff's Complaint, under the claim for relief under all counts, fails to state whether the amount claimed exceeds the compulsory arbitration limits. WHEREFORE, Moving Defendants move to strike/dismiss the Claims for Relief as'',to all counts of the Complaint. XI Motion to Strike/Demurrer Claims for Punitive Damages: 51. Under each Count of the Complaint, the Plaintiff seeks punitive damages in addition to other relief. 52. The award of punitive damages is reserved for the most extreme, outrageous cases in which the defendant acts with a particularly evil motive or wicked intent. 53. As a matter of law, the material facts alleged in the Complaint fail to state a claim that would justify the award of punitive damages against the Moving Defendants. 54. Plaintiff fails to allege that the conduct of the Moving Defendants was outrageous, wanton and/or recklessly indifferent to the rights of others. 55. Plaintiff fails to set forth any facts in the Complaint which evidence outrageous, wanton and/or recklessly indifferent conduct by the Moving Defendants. 56. Mer? conclusory allegations, such as those pleaded in the Complaint, a?e insufficient to support. a claim for punitive I? 11 damages. 57. Merely asserting a demand for punitive damages in the prayer for relief, as Plaintiff has done, is insufficient to support a claim for punitive damages. 58. Even assuming, as one must when evaluating a demurrer, the truth of the allegations pleaded in the Complaint, the Plaintiff has failed to allege facts which would support any allegations of outrageous, wanton and/or recklessly indifferent conduct by the Moving Defendants and/or claims for punitive damages. 59. Based upon the foregoing, the Plaintiff has failed to plead/state aclaim upon which relief may be granted for punitive damages and loutrageous, wanton and/or recklessly indifferent conduct with respect to the Moving Defendants. WHEREFORE, Moving Defendants move to strike the claims for punitive damages with prejudice and to preclude the Plaintiff from seeking them at trial. XII Motion to Strike/Dismiss: Failure to Break Down Counts with Respect to Each Individual Defendant 60. Plajintiff's Complaint contains five individual counts, four of which' reference the Defendants without differentiation. 61. PaI.R.Civ.P. 1020(a) requires that where a plaintiff states more I,than one cause of action against one or more defendants, the claims against the respective defendants must be 12 pleaded in separate counts. 62. Plaintiff's Complaint violates Pa.R.Civ.P. 1020(a) because it does not set forth each cause of action against each defendant in a ,separate count under a separate heading. 63. In addition, under the respective: claims for relief under each count of the Complaint, the Plaintiff fails to attribute what portion of the monetary amount it claims from each defendant as required by the rules of civil procedure. WHEREFORE, Moving Defendants move to strike/dismiss the Plaintiff's Complaint. XIII Motionjto Strike/Dismiss: Failure to Append Writing 64. Count V of the Plaintiff's Complaint references a "Consulting, Severance and Release Agreement" executed between Rite Aid and Defendant Daniel Semic. 65. Pa.R.Civ.P. 1019(i) states in pertinent part: "When any claim or defense is based upon a writing, the pleader shall attach a copy of the writing, or the material part thereof . . . ." 66. Alt$ough the Plaintiff's claim in Count V is based upon a writing, i.e., the "Consulting, Severance and Release Agreement," a copy of this writing was not attached to the Complaint as required. WHEREFOR$, Defendant Daniel Semic moves to strike/dismiss the Plaintiff's Complaint for failure to conform to the procedural rules. 13 XIV Motion tp Strike "Notice to Defend" 67. Effective September 1, 2003, the text of the "Notice to Defend" pursuant to Rule 1018.1, Pennsylvania Rules of Civil Procedure, was1 substantially modified. 68. Plaintiff's first amended complaint contains the prior text of the "Ootice to Defend." 69. Plaintiff's first amended complaint was filed after the effective date of the newly-amended "Notice to Defend." 70. The "Notice to Defend" of the Plaintiff's complaint is materially defective and must be stricken. WHEREFORE, Moving Defendants move to strike/dismiss the "Notice to Defend" of the Plaintiff's Complaint. RESPECTFULLY SUBMITTED: David J. Fos r, Esquire COSTOPOULOS, FOSTER & FIELDS 831 Market Street/P.O. Box 222 Lemoyne, PA 17043 Phone: (717) 761-2121 ATTORNEY FOR DEFENDANTS DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC AND SHARON SEMIC DATED: November 2003. 14 CERTIFICATE OF SERVICE I, David J. Foster, Esquire, attorney for Defendants David Koneff, Susan Koneff, Daniel Semic and Sharon Semic, do hereby certify that la true and correct copy of the within PRELIMINARY OBJECTIONS was served upon the counsel for the Plaintiff, Rite Aid Corporation, by placing same in the United States Mail, first-class postage prepaid, on the below date addressed as follows: Steve D. Shad wen, Esquire Gordon A. Ein orn, Esquire Suite 700 30 North Thiryq Street Harrisburg, P1 17101 BY: David J. Fost Esquire DATED: Novemlber -7 , 2003. 15 I i f _ :wo .{ IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION Plaintiff, V. DAVID KONEFF, SUSAN KONEFF, NO. 02-5863 DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants. PLAINTIFF RITE AID CORPORATION'S RESPONSE TO PRELIMINARY OBJECTIONS OF DEFENDANTS DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC AND SHARON SEMIC TO PLAINTIFF'S FIRST AMENDED COMPLAINT Plaintiff Rite Aid Corporation ("Rite Aid") responds to the preliminary objections of Defendants David Koneff ("Koneff'), Susan Koneff, Daniel Semic ("Semic"), and Sharon Semic with corresponding paragraph numbers as follows: Admitted except as to Sharon Semic who was first named in the First Amended Complaint. By way of further response, the action was originally commenced on December 9, 2002 by the issuance of Writ of Summons against David and Susan Koneff. 2. Admitted. 3. Admitted in part and denied in part. It is admitted that the First Amended Complaint was filed on or about September 16, 2003. It is denied that Susan Koneff was first named a defendant at that time. On the contrary, Susan Koneff was made a defendant in the Writ of Summons issued on December 9, 2002. 4. Admitted. 5. Admitted. 6. Admitted. 7. Admitted. 8. Admitted. 9. Admitted. 10. Admitted that Rite Aid has suffered the losses stated in its complaint. 11. Admitted. 12. No response required. I. MOTION TO STRIKE THE "PRELIMINARY STATEMENT" 13. Admitted that the Complaint contains a brief introduction outlining the claims against the defendants and provided for the assistance of the court. All of the facts averred in the preliminary statement are averred again, in greater detail, within the body of the complaint. 14. Admitted that defendants correctly quote Pa. R. Civ. P. 1019(a). 15. Admitted that defendants correctly quote Pa. R. Civ. P. 1022. 16. The averments of paragraph 16 constitute conclusions of law to which no response is required. To the extent a response is necessary, the averments are denied in that the Preliminary Statement is merely an introduction provided for the benefit of the Court and which need not be answered by defendants. Deibler v. Thrift Drug Co. of Penna., 34 Pa. D. & C.2d 209, 211 (Leb. C.C.P. 1964). As such, this paragraph need not be numbered and may contain 2 more than one allegation. In addition, the material facts stated in the preliminary statement are in a concise and summary form and may be answered by defendants if they so desire. 17. Plaintiff s response to Paragraph 16 is incorporated herein by reference. Furthermore, if defendants elect to respond to the Preliminary Statement they can fulfill the requirement of Rule 1029 that "admissions and denials in a responsive pleading shall refer specifically to the paragraph in which the averment .... is set forth" by referring to the "Preliminary Statement." 18. Denied that the Preliminary Statement contains scandalous and impertinent matter. Scandalous and impertinent matters are unnecessary allegations which bear cruely upon the moral character of an individual and which are irrelevant to the material issues before the Court. Fromm v. Fromm, 42 Pa. D. & C.2d 77, 83 (Dauph. C.C.P. 1967). The description of the defendants' fraudulent conduct that are contained in the preliminary statement are directly relevant to plaintiffs claims and are therefore neither scandalous nor impertinent. 19. Denied. On the contrary, the averments contained in the Preliminary Statement are averments of material fact to which defendants can respond if they desire. WHEREFORE, Plaintiff Rite Aid requests that defendants' preliminary objection to the Preliminary Statement be overruled. II. MOTION FOR MORE SPECIFIC PLEADING: INSUFFICIENCY OF PLEADING - COUNT I 20. Admitted that defendants correctly quote a portion of Pa. R. Civ. P. 1019(b). 21. Admitted. 22. Denied. On the contrary, the averments of Count I are sufficiently specific as to state a claim for fraud. 23. Denied. On the contrary, the averments of Count I are sufficiently specific as to state a claim for fraud. WHEREFORE, Plaintiff Rite Aid respectfully requests that Defendants' preliminary objection concerning Count I be overruled. III. MOTION TO DISMISS: FAILURE TO STATE A CLAIM (DEMURRER) IN COUNT I. 24. The averments of Paragraph 24 constitute conclusions of law to which no response is required. 25. The averments of Paragraph 25 constitute a conclusion of law to which no response is required. To the extent a response is required, the averment is denied. Plaintiff s averments in Count I contain sufficient material facts to state a claim for fraud. WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection to Count I be overruled. IV. MOTION FOR MORE SPECIFIC PLEADING: INSUFFICIENCY OF PLEADING - COUNT II. 26. Admitted. 27. Admitted that Defendants correctly quote a portion of Paragraph 34 of the Complaint but deny that this statement is made in a conclusory manner. On the contrary, as part of Count II, Plaintiff incorporates by reference paragraphs I through 32 of the Amended Complaint which contain a detailed description of defendants' acts. 28. Admitted in part and denied in part. It is admitted that Defendants correctly quote a portion of the Amended Complaint. It is denied that the averment is made in a conclusory manner. On the contrary, the averment is fully supported by the averments in the Complaint. 29. Admitted in part and denied in part. It is admitted that Defendants correctly quote a portion of the Amended Complaint. It is denied that the averment is made in a conclusory manner. On the contrary, the averment is fully supported by the averments in the Complaint. 30. Denied. On the contrary, because Plaintiff incorporates by reference the detailed description of Defendants' activities, the allegation complained of is sufficiently specific to apprise the defendants of the claim against them, allowing them to prepare a response and defense. WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection to Count II be overruled. V. MOTION FOR MORE SPECIFIC PLEADING: INSUFFICIENCY OF PLEADING - COUNT III. 31. Denied. On the contrary, in support of it's claim for misappropriation of funds, Plaintiff repeats and incorporates by reference the previous 37 paragraphs of the Amended Complaint containing a detailed description of Defendants' actions. 32. The averment of Paragraph 32 is a conclusion of law to which no response is required. If a response is required, the allegation is denied for the reasons stated in Paragraph 31 above. WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection to Count III be overruled. VI. MOTION FOR MORE SPECIFIC PLEADING: INSUFFICIENCY OF PLEADING (DEMURRER) - COUNT IV. 33. Admitted. 34. Admitted that Defendants correctly quote portions of Paragraphs 42 and 43 of the Complaint. It is denied that the allegations are made in a "boiler plate fashion." 35. The averments of Paragraph 35 constitute conclusions of law to which no response is required. If a response is necessary, the averments are denied. On the contrary, Plaintiffs claim for Civil Conspiracy includes Paragraph 1 through 40 of the Amended Complaint, which are repeated and incorporated by reference, thereby making the claim sufficiently specific to apprise defendants of the claim against them and permitting them to prepare a response in defense. WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection to Count IV be overruled. VII. MOTION FOR MORE SPECIFIC PLEADING: INSUFFICIENCY OF PLEADING - COUNT V. 36. Admitted that defendants correctly quote a portion of Pa. R. Civ. P. 1019(b). 37. Admitted. 38. Denied. On the contrary, the averments contained in Paragraphs 45 through 50 of the Complaint, which include the averments of the first 44 paragraphs of the Complaint which are incorporated by reference, are sufficiently specific to allege a claim of fraud. WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection to Count V be overruled. VIII. MOTION TO DISMISS: FAILURE TO STATE A CLAIM (DEMURRER) IN COUNT V. 39. The averments in Paragraph 39 constitute a conclusion of law to which no response is required. 40. The averments in Paragraph 40 constitute a conclusion of law to which no response is required. To the extent a response is required, the averment is denied. On the contrary, Paragraphs 45 through 50 of the Complaint contain sufficient material facts to state a claim for fraudulent misrepresentation. WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection to Count V of the Complaint be overruled. IX. MOTION FOR MORE SPECIFIC PLEADING: FAILURE TO STATE RELIEF REQUESTED/MONETARY DAMAGES WITH SUFFICIENT SPECIFICITY. 41. Admitted. 42. Admitted in part and denied in part. It is admitted that the other harms referred to in the Complaint are not specifically identified in that they are still the subject of investigation and will be disclosed prior to trial. It is denied that Plaintiff has failed to identify the relief sought. 43. Admitted. 44. Admitted that no specific monetary demand is made. By way of further response, Plaintiff s failure to state a specific monetary demand is in accordance with Pa. R.Civ. P. 1021(b) which provides that "any pleading demanding relief for unliquidated damages shall not claim any specific sum." 45. Admitted that defendants correctly quote a portion of Pa. R. Civ. P. 1021(a). 46. The averments of Paragraph 46 constitute a conclusion of law to which no response is required. If a response is required, the averment is denied in that in each of its claims, Rite Aid specifically sets forth the relief sought requesting "judgment ... in an amount to be determined at trial, together with injunctive relief, pre- and post-judgment interest, costs, attorneys fees, punitive damages, and such other relief as the Court deems just and proper." 47. Denied that Plaintiff should be required to state a specific monetary amount it demands from each of the Defendants. On the contrary, Pa. R.C.P. 1021(b) prohibits the demand of a specific sum. WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection to Counts I, II, III, and IV of the Complaint, alleging "failure to state relief requested/monetary damages with sufficient specificity," be overruled. X. MOTION TO STRIKE/DISMISS: FAILURE TO STATE WHETHER AMOUNT CLAIMED EXCEEDS COMPULSORY ARBITRATION LIMITS 48. The averment of Paragraph 48 constitutes a conclusion of law to which no response is required. 49. Admitted. 50. Denied. On the contrary, Paragraph 24 of Plaintiff s First Amended Complaint explicitly states that the amount sought is in excess of the compulsory arbitration limit. WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection alleging "failure to state whether amount claimed exceeds compulsory arbitration limits" be overruled. XI. MOTION TO STRIKE/DEMURRER CLAIMS FOR PUNITIVE DAMAGES: FAILURE TO STATE A CLAIM UPON WHICH RELIEF MAY BE GRANTED 51. Admitted. 52. The averment of Paragraph 52 constitutes a conclusion of law to which no response is required. 53. The averment of Paragraph 53 constitutes a conclusion of law to which no response is required. In the event a response is required, the facts alleged in the Complaint more than adequately justify the award of punitive damages. 54. Denied. On the contrary, while the Complaint does not use the precise words stated by Defendants, it is self-evident from the description of defendants' acts that these acts were outrageous and wanton. 55. Denied. On the contrary, such facts are fully set forth in the Complaint. 56. Denied. On the contrary, Plaintiff does not use conclusory allegations but fully sets forth facts sufficient to support a claim for punitive damages. 57. Denied. On the contrary, Plaintiff has set forth facts sufficient to support a claim for punitive damages. 58. Denied. On the contrary, Plaintiff has alleged facts which fully support the requirements for an award of punitive damages. 59. Denied. On the contrary, Plaintiff has alleged facts which fully support the requirements for an award of punitive damages. WHEREFORE, Plaintiff Rite Aid respectfully requests that Defendants' preliminary objection to the demand for punitive damages be overruled. XII. MOTION TO STRIKE/DISMISS: FAILURE TO BREAK DOWN COUNTS WITH RESPECT TO EACH INDIVIDUAL DEFENDANT. 60. Admitted that Plaintiff s Complaint contains some counts which pertain to all defendants. 61. The averments of this paragraph constitute conclusions of law to which no response is required. If a response is required, the averments are denied in that Pa. R.C.P. 1020(a) does not require that a cause of action be pleaded against only one defendant and that other defendants must be pleaded in separate counts. On the contrary, Rule 1020(a) requires only that each separate cause of action against a defendant must be stated in separate counts. 62. This statement constitutes a conclusion of law to which no response is required. If a response is necessary, the averment is denied in that Rule 1020(a) does not require that each count name only one defendant. 63. This statement constitutes a conclusion of law to which no response is required. In the event a response is required, it is denied that the Rules of Civil Procedure require Plaintiff to state what portion of the monetary demand it claims from each defendant. Furthermore, the Complaint makes clear that Plaintiff seeks the full amount from each defendant. 10 WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection to strike/dismiss the Complaint for failure to break down counts with respect to each individual defendant be overruled. XIII. MOTION TO STRIKE/DISMISS: FAILURE TO APPEND WRITING 64. Admitted. 65. Admitted that Pa. R. Civ. P. 1019(i) states that a writing must be attached to a pleading if a claim or defense asserted therein is "based upon" that writing. 66. Denied. On the contrary, Plaintiff's claim in Count V is not "based upon" the "Consulting, Severance, and Release Agreement" between Rite Aid and Defendant Semic and therefore that agreement need not be appended to the Complaint. The Complaint alleges that Semic's misrepresentations induced Rite Aid to enter into the agreement. WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection to strike/dismiss Plaintiff s Complaint for failure to append a writing be overruled. XIV. MOTION TO STRIKE "NOTICE TO DEFEND" 67. Admitted that effective September 1, 2003 the text of the "Notice to Defend" pursuant to Rule 1018.1 was modified. 68. Denied. On the contrary, the First Amended Complaint contains the new text of the "Notice to Defend." 69. Admitted. 70. Denied. The First Amended Complaint contains the newly amended "Notice to Defend" and is therefore not defective. 11 WHEREFORE, Plaintiff Rite Aid respectfully requests that the preliminary objection to strike/dismiss the "Notice to Defend" of Plaintiff's Complaint be overruled. St e D. Shadowen, I.D. No. 41953 ordon A. Einhom, I.D. No. 59006 HANGLEY ARONCHICK SEGAL & PUDLIN 30 North Third Street, Suite 700 Harrisburg, PA 17101 (717) 364-1004 (717) 364-1020 - facsimile Attorneys for Plaintiff Rite Aid Corporation Dated: March 25, 2004 12 VERIFICATION James J. Comitale, Esquire, deposes and says that I am Senior Associate Counsel for Rite Aid Corporation, and that while I do not have personal k nOwledge of all of the facts recited in the foregoing Response to preliminary objections to First Amended Complaint, the information contained therein has been collected and made available to me by others and said Response is true and correct to the best of my knowledge, information and belief and is therefore verified on behalf of Rite Aid Corporation. I make this statement subject to the penalties of 18 Pa. C.S. § 4904 relating to unsworn falsification to authorities. ' \? By: Ames J. Comitale, Esquire Senior Associate Counsel Rite Aid Corporation Dated:_ ) CERTIFICATION OF SERVICE This is to certify that I served a true and correct copy of the attached Plaintiff Rite Aid Corporation's Response to Preliminary Objections of Defendants David Koneff, Susan Koneff, Daniel Semic, and Sharon Semic to Plaintiff's First Amended Complaint upon the following persons via first class mail: David J. Foster, Esquire Leslie M. Fields, Esquire Costopoulos, Foster & Fields 831 Market Street Lemoyne, PA 17043 Attorneys for Defendants Koneff and Semic Nathan C. Wolf, Esquire Irwin Law Offices 64 S. Pitt Street Carlisle, PA 17013 Attorneys for Defendant Eden Vrdon. Einhorn Dated: March 25, 2004 ? N Cl J ? a c.n < W IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION, Plaintiff, No. 02-5863 VS. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants. STIPULATION AND ORDER OF COURT AND NOW, this -day of June, 2003, pursuant to the stipulation of the parties contained herein, it is hereby ordered that the preliminary injunction issued by this Court on June 13, 2003 is continued subject to the modifications contained in this Order which are as follows: Defendants David and Susan Koneff (collectively "Koneff) are hereby enjoined and prohibited from taking any of the following actions: a. Cashing, transferring ownership or in any way disposing of any certificates of deposit owned by Koneff and issued by Fulton Bank or any other bank; b. Selling, transferring ownership or in any way disposing of or encumbering any real property owned by Koneff including, but not limited to, the property at 780 Seitz Drive, Lewisberry, Pennsylvania 17339 and properties located in :Hampshire County, West Virginia; C. Withdrawing or transferring any funds presently in Schwab account numbers 5184-8499 and 5184-8457 or any other accounts owned by HBDATA:8877 Koneff at Schwab or any other brokerage firm, with the exception that Koneff shall be permitted to transfer a total of $65,000.00 from his Schwab accounts to his checking account at Fulton Bank to be used to meet his reasonable and necessary living expenses. In addition, Koneff may withdraw from his Schwab accounts the amount necessary to pay annual real estate taxes on the properties owned by him. However, prior to any such withdrawals, Koneff shall provide to Plaintiff's counsel copies of bills showing the amount of real estate taxes owed; d. Withdrawing or transferring any funds presently in Koneffs accounts at Fulton Bank or any other bank with the exception that Koneff may withdraw the amount of $19,000 (currently on deposit in his Fulton Bank checking account) and the funds transferred to that account from the Schwab investment accounts as noted in Paragraph c. The withdrawals from the Fulton Bank account shall not exceed $7,000 per month exclusive of any amounts used to pay real estate taxes; e. Other than those transactions specifically stated in this Order, Koneff may not transfer, cash, sell, or otherwise dispose of any assets (whether held individually or jointly) nor permit any such disposition of jointly held assets; f Within fourteen (14) days of the date of this Order, Koneff shall provide to Plaintiff's counsel a full accounting of all assets, whether held individually, jointly, or in some other manner; g. From the date of this Order, Koneff shall provide to Plaintiff s counsel copies of all monthly statements for all bank and investment accounts which he holds either individually or jointly; 2. Defendant Daniel Semic is hereby enjoined and prohibited from taking any of the following actions: a. Cashing, transferring ownership or in any way disposing of any certificates of deposit owned by Semic; b. Selling, transferring ownership or in any way disposing of or encumbering any real property owned by Semic; C. Withdrawing or transferring any funds presently in any investment accounts owned by Semic, with the exception that Semic shall be permitted to transfer a total of $57,000.00 from his investment -2- HBDATA:8877 accounts to his checking account at First Union Bank to be used to meet his reasonable and necessary living expenses. In addition, Sernic may withdraw from his investment accounts the money necessary to pay annual real estate taxes on the properties owned by him. However, prior to any such withdrawals, Semic shall provide to Plaintiff's counsel copies of bills showing the amount of real estate taxes owed; d. Withdrawing or transferring any funds presently in Semic's accounts at First Union Bank or any other bank with the exception that Semic may withdraw the amount of $27,000 (currently on deposit in his First Union Bank checking account) and the funds transferred to that account from the Schwab investment accounts as noted in Paragraph c. The withdrawals from the First Union account shall not exceed $7,000 per month exclusive of any amounts used to pay real estate taxes; e. Other than those transactions specifically stated in this Order, Semic may not transfer, cash, sell, or otherwise dispose of any assets (whether held individually or jointly) nor permit any such disposition of jointly held assets; f. Within fourteen (14) days of the date of this Order, Semic shall provide to Plaintiff's counsel a full accounting of all assets, whether held individually, jointly, or in some other manner; g. From the date of this Order, Semic shall provide to Plaintiff's counsel copies of all monthly statements for all bank and investment accounts which he holds either individually or jointly; It is further Ordered that in the event this matter has not been resolved within one (1) year from the date of this Order, Defendants may request the Court grant an additional amount for reasonable and necessary living expenses. As stated in the Court's Order of June 13, 2003, the preliminary injunction shall not be effective until Plaintiff has filed a bond or deposited legal tender with the Cumberland County Prothonotary in the amount of $250,000.00 in accordance with Pa. R. Civ. P. 1531(b). In light of the 3_ HBDATA:8877 stipulation of the parties relating to the above terms of the injunction, the hearing scheduled for Tuesday, June 17, 2003 at 2:30 pm is hereby canceled. BY THE COURT ?Jesley Ol The above terms are stipulated and agreed to by Plaintiff Rite Aid Corporation, and Defendants David Koneff and Daniel Semic, through their respective counsel. _ 4?? n A. Einhorn Date ttorn eys for Plaint ffRite Aid Corporation ?N _ o 17 avrd J. Foster Date William C. Costopoulos Attorn eys for Defendants Koneff and Semic TRUE COPY PROM AEDORD M TS@"0Gy waerseof,.l.h" wft set mp lid ad Oe a std co!j x +. _4_ HBDATA:8877 l- t Zl t?CJ J Gl V. {J D IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION Plaintiff, V. DAVID KONEFF, SUSAN KONEFF, NO. 02-5863 DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants. STIPULATION AND ORDER OF COURT Jll ?81004 AND NOW, this day of June, 2004 pursuant to the stipulation of the parties contained herein, it is hereby ordered that the preliminary injunction issued by this Court on June 13, 2003 and modified by this Court's Stipulation and Order of Court on June 17, 2003, a copy of which is attached hereto and incorporated herein by reference, is continued subject to the modifications contained in this Order which are as follows: Koneff may continue to withdraw funds not to exceed $7,000 per month from his Fulton Bank checking account, exclusive of any amounts used to pay real estate taxes, and may transfer funds from his Schwab accounts to his Fulton Bank checking account necessary to cover the monthly withdrawals from the checking account. Z2 1 r! ZZ toil UR 2. Semic may continue to withdraw funds not to exce d $ from his First Union Bank checking account, exclusive of an, e 7,000 per month taxes, and maY transfer funds from his investment accounts to his1FirstsUniontBpay real estate is account necessary to cover the monthly withdrawals from the checking account. 3. The provisions of the Stipulation and Order of Court of June 13, 2003 as modified by the Stipulation and Order of Court of June 17, 2003 shall continue in all other respects. The above terms are stipulated and agreed to by Plaintiff Rite Aid Corporation and Defendants David Koneff and Daniel Semic, through their respective counsel. ordon A. tinhorn ??o y Attorneys for Rite Aid Corporation Date David J. Fosterer Dat Attorneys for David Kone ff andDaniel Semic IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION Plaintiff, V. DAVID, KONEFF, SUSAN KONEFF, DANIEL SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL, & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN NO. 612-5863 Defendants. PRAECIPE To the Prothonotary: Please list for argument at the next scheduled Argument Court the preliminary objections of Defendants David Koneff, Susan Koneff, Daniel .S'erllic, and Sharon Semic. Respectfully submitted, Dated: August 27, 2004 ;teve D. Shadowen, I.D. No. 41953 Gordon A. Einhorn, I.D. No. 59006 HANGLEY ARONCHICK SEGAL & PUDLIN 30 North Third Street, Suite 700 Harrisburg, PA 17101 (717) 364-1004 (717) 364-1020 -- facsimile Attorneys for PZaintiffRite Aid Corporation CERTIFICATION OF SERVICE This is to certify that I served a true and correct copy of the attached Praecipe upon the following persons via first class mail: David J. Foster, Esquire Leslie M. Fields, Esquire Costopoulos, Foster & Fields 831 Market Street Lemoyne, PA 17043 Attorneys for Defendants Koneff and Semic Nathan C. Wolf, Esquire 37 South Hanover Street., Suite 201 Carlisle, PA 17013 Attorney for Defendant Eden Dated: August 27, 2004 ?aur'don A. Einhorn ? ? _ ? ? ?' ? +` 8 '- ? o p 1s PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and submitted in duplicate) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: Please list the within matter for the next Argument Court. CAPTION OF CASE (entire caption must be stated in full) RITE AID CORPORATION VS. ( Plaintiff ) DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC. d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., and BRIAN EDEN 0 (Defendant) No. 02 Civil 5863 19 1. State matter to be argued (i.e., Plaintiff's motion for new trial., defendant's demurrer to complaint, etc.): Preliminary Objections of Defendants David and Susan Koneff and Daniel and Sharon Semic 2. Identify counsel who will argue case: (a) for plaintiff: Gordon A. Einhorn, Esquire Address: Hangley Aronchick Segal & Pudlin 30 North Third Street, Suite 700 Harrisburg, PA 17101 (b) for defendant: David J. Foster, Esquire Address: Costopoulos, Foster & Fields 831 Market Street Lemoyne, PA 17043 3. I w311 notify all Parties in writing within two days that this case has been listed for argument. 4. Argument Court Date: November 10, 2004 Dated: for Plaintiff Rite Ai orporation ? N '.I] a -.Y ?'-? C-] ?-d -i t' ' rv..? ...C)I]:',? Y: l '. ? '... _ )S_ . ? ?r? .. ? ? .. .,-' NATHAN C. WOLF, ESQUIRE ATTORNEY ID NO. 87380 37 SOUTH HANOVER STREET, SUITE 201 CARLISLE PA 17013 (717) 241-4436 ATTORNEY FOR DEFENDANT EDEN RITE AID CORPORATION, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC.,: NO. 02-5863 d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., and BRIAN EDEN, Defendants DEFENDANT BRIAN EDEN'S ANSWER TO FIRST AMENDED COMPL UNT NOW COMES Defendant, Brian Eden, by and through his attorney, Nathan C. Wolf, Esquire, and Answers Plaintiff's First Amended Complaint as follows: Parties 1. Admitted. 2. Admitted that Defendant David Koneff is a former employee of Rite Aid. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of the remainder this averment. 3. Admitted that Defendant Susan Koneff is the wife of Defendant David Koneff. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth that defendant Susan Koneff resides at 760 Seitz Drive, Lewisberry, Pennsylvania 17339. The remainder this averment is denied. 4. Admitted that Defendant Daniel Semic is a former employee of Rite Aid. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of the remainder this averment. 5. Admitted that Defendant Sharon Semic is the wife of Defendant Daniel Semic. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth that Sharon Semic resides in Dauphin County. The remainder this averment is denied. 6. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 7. Denied Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 8. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. It is admitted that Defendant Eden is a resident of Florida. Facts Common to All Counts Admitted. 10. Admitted. 11. Admitted in part, denied in part. It is admitted that Defendants Koneff and Semic were managers within Plaintiff's Tax Department. However the remainder of the averment is denied as Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 12. It is admitted that Defendant Eden operated various companies which obtained tax refunds and credits for corporate clients. The remainder of the averment is denied. 13. Denied. 14. Denied. 15. Denied. 16. Denied. 17. Denied. 18. Denied. 19. Denied. 20. Denied. 21. Denied. 22. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 23. Denied. Defendant Eden, after reasonable :investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 24. Admitted. Count I-Fraud 25. Defendant Eden repeats and incorporates by reference the responses set forth in paragraphs 1 through 24 of this Answer to Plaintiff's First Amended Complaint as though set forth here in full. 26. Denied. 27. Denied. 28. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 29. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 30. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 31. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 32. Denied as a conclusion of law to which no response is required. To the extent that a response is required, Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. WHEREFORE, Defendant Eden prays that this Honorable Court dismiss this claim against the Defendant Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors, Inc. with prejudice against the Plaintiff and award relief to Defendant Eden in the nature of costs of this action and counsel fees, in addition to any other relief that the Court deems appropriate. Count II - Conversion 33. Denied. Defendant Eden repeats and incorporates by reference the responses set forth in paragraphs 1 through 32 of Defendant Eden's Answer to Plaintiff's Fast Amended Complaint as though set forth here in full. 34. Denied. 35. Denied. Defendant Eden, after reasonable: investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 36. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 37. Denied as a conclusion of law to which no response is required. To the extent that a response is required, Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. WHEREFORE, Defendant Eden prays that this Honorable Court dismiss this claim against the Defendant Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors, Inc. with prejudice against the Plaintiff and award relief to Defendant Eden in the nature of costs of this action and counsel fees, in addition to any other relief that the Court deems appropriate. Count III - Misappropriation of Fu do & 38. Defendant Eden repeats and incorporates by reference the responses set forth in paragraphs 1 through 37 of Defendant Eden's Answer to Plaintiff's Fast Amended Complaint as though set forth here in full. 39. Denied. 40. Denied as a conclusion of law to which no response is required. To the extent that a response is required, Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. WHEREFORE, Defendant Eden prays that this Honorable Court dismiss this claim against the Defendant Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors, Inc. with prejudice against the Plaintiff and award relief to Defendant Eden in the nature of costs of this action and counsel fees, in addition to any other relief that the Court deems appropriate. Count IV - Civil Conspires 41. Defendant Eden repeats and incorporates by reference the responses set forth in paragraphs 1 through 40 of Defendant Eden's Answer to Plaintiff's First Amended Complaint as though set forth here in full. 42. Denied. 43. Denied. 44. Denied as a conclusion of law to which no response is required. To the extent that a response is required, Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. WHEREFORE, Defendant Eden prays that this Honorable Court dismiss this claim against the Defendant Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors, Inc. with prejudice against the Plaintiff and award relief to Defendant Eden in the nature of costs of this action and counsel fees, in addition to any other relief that the Court deems appropriate. Count V - Fraudulent Misrepresentation 45. Defendant Eden repeats and incorporates by reference the responses set forth in paragraphs 1 through 44 of Defendant Eden's Answer to Plaintiff's First Amended Complaint as though set forth here in full. 46. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of tlvs averment. 47. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 48. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 49. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 50. Denied as a conclusion of law to which no response is required. To the extent that a response is required, Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. WHEREFORE, Defendant Eden prays that this Honorable Court dismiss this claim to the extent that it would attach any liability-to the Defendant Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors, Inc. with prejudice against the Plaintiff and award relief to Defendant Eden in the nature of costs of this actions and counsel fees, in addition to any other relief that the Court deems appropriate. Dated: October, 2004 Na an C. olf, Esquire mey r ndant Eden upre Court ID #87380 37 S th Hanover Street, Suite 201 r We. PA 17013 (717) 241-4436 VERIFICATION I, Nathan C. Wolf, Esquire, deposes and says that 1. am the attorney for Defendant Brian Eden, and that while I do not have personal knowledge of all the facts recited in the foregoing Defendant Brian Eden's Answer to Plaintiff's First Amended Complaint, the information contained therein has been collected and made available to me by others and said Answer to Plaintiff's First Amended Complaint is true and correct to the best of my knowledge, information and belief at this point in time and is therefore verified on behalf of Defendant Brian Eden. I make this statement subject to the penalties of 18 Pa. C.S. § 4904 relating to unswom falsification to authorities. Dated: October, 2004 C. }Volf, Esquire r Defendant Eden CERTIFICATE OF SEIItVICE I, Nathan C. Wolf, Esquire, hereby certifythat I have served a true and correct copy of the attached Defendant Brian Eden's Answer to Plaintiff's First Amended Complaint upon the following persons via first class mail: Gordon A. Einhom, Esquire Hangley, Aronchick, Segal & Pudhn 30 North Third Street, Suite 700 Harrisburg, PA 17101-1701 Attorney for plaintiff Rite Aid Corporation David J. Foster, Esquire Leslie M Fields, Esquire costopoulos, Foster & Fields 831 Market Street Lemoyne, PA 17043 Attorneys for Defendants Koneff and. Semic Dated: October lam, 2004 y ?"? _ L( i .. _i' ... 1 L. I -? tl7 i.ZI G_ c•., '?^ 1.1 1 ?. ] ?'....? yc: e..J ? :i.. I1_ ?'j y IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION Plaintiff, V. DAVID KONEFF, SUSAN KONEFF, NO. 02-5863 DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants. PRAECIPE FOR ENTRY OF JUDGMENT OF DEFAULT TO: PROTHONOTARY Please enter judgment of default in favor of Plaintiff Rite Aid Corporation and against Defendant Brian Eden for Defendant's failure to plead to the Amended Complaint in this action within the required time. The Complaint contains a Notice to Defend within twenty (20) days from the date of service thereof. Defendant was served with the Amended Complaint on September 15, 2003 and Defendants answer was due to be filed on October 5, 2003. Attached as Exhibit A is a copy of Plaintiffs written Notice of Intent to File Praecipe for Entry of Default Judgment, which I certify was mailed by regular mail to the Defendant at his last known address and to his attorney of record on June 30, 2004, which is at least ten (10) days prior to the filing of this Praecipe. Damages to be assessed at trial. Respectfully submitted, eve D. Shadowen, I.D. No. 41953 Gordon A. Einhorn, I.D. No. 59006 HANGLEY ARONCHICK SEGAL &t PUDLIN 30 North Third Street, Suite 700 Harrisburg, PA 17101 (717) 364-1004 (717) 364-1020 - facsimile Dated: October 22, 2004 Attorneys for Plaintiff Rite Aid Corporation 2 CERTIFICATION OF SERVICE This is to certify that I served a true and correct copy of the attached Praecipe upon the following persons via first class mail: David J. Foster, Esquire Leslie M. Fields, Esquire Costopoulos, Foster & Fields 831 Market Street Lemoyne, PA 17043 Attorneys for Defendants Koneff and Semic Nathan C. Wolf, Esquire 37 South Hanover Street, Suite 201 Carlisle, PA 17013 Attorney for Defendant Eden <:f 2 ordon A. Einhom Dated: October 22, 2004 36 North Third stree4 Suite 700 Hard9burg. m 17101-1701 717.364.1020 /facsimile One Logan Square. 27th Floor Philadelphia. M 2910 3-69 3 3 215.568-0300 /facsimile 20 Brace Road. Suite 201 Cherry Hill. al 06031-2634 656.616.2170 /facsimile w .hangley.rom Gordon A. Efnhom Direct Dial: 717.364.1004 E-mail: gelnhom@hangtey.com HANG LEY ARONCHICK SEGAL PUDLIN Attorneys of Low I A Professional corpora tion June 30, 2004 Nathan C. Wolf, Esquire Irwin Law Office 64 S. Pitt Street Carlisle, PA 17013 Re: Rite Aid Corporation v. David Koneff, et al. Dear Nathan: Enclosed is a Notice of Intent to File Praecipe for Entry of Default Judgment. As you are aware, Mr. Eden is in default for failure to respond to Rite Aid's First Amended Complaint. A copy of this Notice has also been sent directly to Mr. Eden as required by the Pennsylvania Rules of Civil Procedure. Very truly yours, GAE/jhb Enclosure Cc: Mr. Brian Eden David J. Foster, Esquire S>rs rdon A. Einhorn Exhibit A F a 1 -+96 O O r"• nv ?I --i I ' i :: U NATHAN C. WOLF, ESQUIRE ATTORNEY ID NO. 87380 37 SOUTH HANOVER STREET, SUITE 201 CARLISLE PA 17013 (717) 241-4436 ATTORNEY FOR DEFENDANT EDEN RITE AID CORPORATION, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC.,; d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., and BRIAN EDEN, Defendants : CIVIL ACTION - LAW NO. 02-5863 PETITION FOR RELIEF FROM JUDGMENT BY DEFAULT NOW COMES Defendant, Brian Eden, by and through his attorney, Nathan C. Wolf, Esquire, and respectfully submits this Petition to ask the Court to grant relief to Defendant, Brian Eden, pursuant to Pa.RC.P. 237.3, and submits as follows: 1. Defendant, Brian Eden, received a copy of the Praecipe for Entry of Judgment of Default, dated Friday, October 22, 2004, on Monday, October 25, 2004. 2. Defendant, Brian Eden, filed his Answer to Plaintiff's First Amended Complaint on Monday, October 25, 2005, at 11:58 a.m., a copy is attached hereto. 3. On October 26, 2004, Defendant, Brian Eden, received a written notice from the Prothonotary of Cumberland County that judgment -was entered against him 4. After making an inquiry with the Prothonotary, counsel for Defendant Brian Eden learned that the Praecipe to Enter Default Judgment was not filed until 2:19 p.m. on October 26, 2004. 5. The filing of the Default judgment byPraecipe of Plaintiff occurred after Defendant Brian Eden filed his Answer to Plaintiff's Fast Amended Complaint, and the Default judgment entered by the Prothonotary was entered, therefore, erroneously. WHEREFORE, Defendant, Brian Eden, prays that this Court grant Defendant's Petition for Relief from judgment by Default. Respectfully submitted, Nathan C. Wolf, Esquire Attorney for Defendant Eden Supreme Court ID #87380 37 South Hanover Street, Suite 201 Carlisle, PA 17013 (717), 241-4436 Dated: November -44-1 2004 NATHAN C. WOLF, ESQUIRE ATTORNEY ID NO. 87380 37 SOUTH HANOVER STREET, SUITE 201 CARLISLE PA 17013 (717) 241-4436 ATTORNEY FOR DEFENDANT EDEN RITE AID CORPORATION, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V. DAVID KONEFF, SUSAN KONEFF, : DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC.,: NO. 02-5863 d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., and BRIAN EDEN, Defendants CERTIFICATE OF SERVICF? I, Nathan C. Wolf, Esquire, hereby certify that I mailed a truce and correct copy of the foregoing Petition for Relief from judgment by Default to the below listed persons: Gordon A. Einhom, Esquire Hangley, Aronchick, Segal & Pudhn 30 North 'T'hird Street, Suite 700 Harrisburg, PA 17101-1701 Attorney for Plaintiff Rite Aid Corporation David J. Foster, Esquire Leslie M Fields, Esquire Costopoulos, Foster & Fields 831 Market Street Lemoyne, PA 17043 Attorneys for Defendants Koneff and :Semic Dated: November 2004 ' Nathan (LIXIolf, Esquire NATHAN C. WOLF, ESQUIRE ATTORNEY ID NO. 87380 37 SOUTH HANOVER STREET, SUITE 201 CARLISLE PA 17013 (717) 241-4436 ATTORNEY FOR DEFENDANT EDEN RITE AID CORPORATION, :IN THE COURT OF COMMON PLEAS OF, Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA - V. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC, - F & S CORPORATE ADVISORS, INC.,: NO. 02-5863 == d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., and BRIAN EDEN, Defendants DEFENDANT BRIAN EDEN'S ANSWER TO FIRST AMENDED COMPLAINT NOW COMES Defendant, Brian Eden, by and through his attorney, Nathan C. Wolf, Esquire, and Answers Plaintiff's First Amended Complaint as follows: Parties 1. Admitted. 2. Admitted that Defendant David Koneff is a former employee of Rite Aid. Defendant Eden, after reasonable investigation, is without lmowledge or information sufficient to form a belief as to the truth of the remainder this averment. 3. Admitted that Defendant Susan Koneff is the wife of Defendant David Koneff. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth that defendant Susan Koneff resides at 760 Seitz Drive, Lewisberry, Pennsylvania 17339. The remainder this averment is denied. 4. Admitted that Defendant Daniel Semic is a former employee of Rite Aid. Defendant Eden, after reasonable investigation, is without lulowledge or information sufficient to form a belief as to the truth of the remainder this averment. 5. Admitted that Defendant Sharon Semic is the wife of Defendant Daniel Semic. Defendant Eden, after reasonable investigation, is without lalowledge or information sufficient to form a belief as to the truth that Sharon Semic resides in Dauphin County. The remainder this averment is denied. 6. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 7. Denied Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to tl':ne truth of this averment. 8. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. It is admitted that Defendant Eden is a resident of Florida. Facts Common to All Counts 9. Admitted. 10. Admitted. 11. Admitted in part, denied in part. It is admitted that Defendants Koneff and Semic were managers within Plaintiff's Tax Department. However the remainder of the averment is denied as Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 12. It is admitted that Defendant Eden operated various companies which obtained tax refunds and credits for corporate clients. The remainder of the averment is denied. 13. Denied. 14. Denied. 15. Denied. 16. Denied. 17. Denied. 18. Denied. 19. Denied. 20. Denied. 21. Denied. 22. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 23. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 24. Admitted. Count I - Fraud 25. Defendant Eden repeats and incorporates by reference the responses set forth in paragraphs 1 through 24 of this Answer to Plaintiff's First Amended Complaint as though set forth here in full. 26. Denied. 27. Denied. 28. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 29. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 30. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 31. Denied. Defendant Eden, after reasonable :investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 32. Denied as a conclusion of law to which no response is required. To the extent that a response is required, Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. WHEREFORE, Defendant Eden prays that this Honorable Court dismiss this claim against the Defendant Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors, Inc. with prejudice against the Plaintiff and award relief to Defendant Eden in the nature of costs of this action and counsel fees, in addition to any other relief that the Court deems appropriate. Count II - Conversion 33. Denied. Defendant Eden repeats and incorporates by reference the responses set forth in paragraphs 1 through 32 of Defendant Eden's Answer to Plaintiff's Fast Amended Complaint as though set forth here in full. 34. Denied. 35. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 36. Denied. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 37. Denied as a conclusion of law to which no response is required. To the extent that a response is required, Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. WHEREFORE, Defendant Eden prays that this Honorable Court dismiss this claim against the Defendant Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors, Inc. with prejudice against the Plaintiff and award relief to Defendant Eden in the nature of costs of this action and counsel fees, in addition to any other relief that the Court deems appropriate. Count III - Misappropriation of Fund 38. Defendant Eden repeats and incorporates by reference the responses set forth in paragraphs 1 through 37 of Defendant Eden's Answer to Plaintiff's Fast Amended Complaint as though set forth here in full. 39. Denied. 40. Denied as a conclusion of law to which no response is required. To the extent that a response is required, Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. WHEREFORE, Defendant Eden prays that this Honorable Court dismiss this claim against the Defendant Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors, Inc. with prejudice against the Plaintiff and award relief to Defendant Eden in the nature of costs of this action and counsel fees„ in addition to any other relief that the Court deems appropriate. Count IV - Civil Conspiracy 41. Defendant Eden repeats and incorporates by reference the responses set forth in paragraphs 1 through 40 of Defendant Eden's Answer to Plaintiff's Fast Amended Complaint as though set forth here in full. 42. Denied. 43. Denied. 44. Denied as a conclusion of law to which no response is required. To the extent that a response is required, Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. WHEREFORE, Defendant Eden prays that this Honorable Court dismiss this claim against the Defendant Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors, Inc. with prejudice against the Plaintiff and award relief to Defendant Eden in the nature of costs of this action and counsel fees, in addition to any other relief that the Court deems appropriate. Count V - Fraudulent Misrepresentation 45. Defendant Eden repeats and incorporates by reference the responses set forth in paragraphs 1 through 44 of Defendant Eden's Answer to Plaintiff's Fast Amended Complaint as though set forth here in full. 46. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 47. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 48. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 49. Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. 50. Denied as a conclusion of law to which no response is required. To the extent that a response is required, Defendant Eden, after reasonable investigation, is without knowledge or information sufficient to form a belief as to the truth of this averment. WHEREFORE, Defendant Eden prays that this Honorable Court dismiss this claim to the extent that it would attach any liability to the Defendant Brian Eden, F & S Corporate Advisors, Inc., and Federal & State Corporate Advisors, Inc. with prejudice against the Plaintiff and award relief to Defendant Eden in the nature of costs of this actions and counsel fees, in addition to any other relief that the Court deems Dated: October f' S -312004 0 ove S e t, S to 201 Carlisle, PA. 17013 (717) 241-4436 )Yforney fojyDefendant Eden reme Dort ID #87380 37 u ffi Han r tr a ui VERIFICATION I, Nathan C Wolf, Esquire, deposes and says that I am the attorney for Defendant Brian Eden, and that while I do not have personal knowledge of all the facts recited in the foregoing Defendant Brian Eden's Answer to Plaintiff's First Amended Complaint, the information contained therein has been collected and made available to me by others and said Answer to Plaintiff's First Amended Complaint is true and correct to the best of my knowledge, information and belief at this point in time and. is therefore verified on behalf of Defendant Brian Eden. I make this statement subject to the penalties of 18 Pa. C.S. § 4904 relating to unworn falsification to authorities. Dated: October , 2004 C. Wolf, Esquire for Defendant Eden CERTIFICATE OF SERVICE I, Nathan C. Wolf, Esquire, hereby certify that I have served a true and correct copy of the attached Defendant Brian Eden's Answer to Plaintiff's Fast Amended Complaint upon the following persons via first class mail: Gordon A. Einhom, Esquire Hangley, Aronchick, Segal & Pudlin 30 North Third Street, Suite 700 Harrisburg, PA 17101-1701 Attorney for Plaintiff Rite Aid Corporation David J. Foster, Esquire Leslie K Fields, Esquire Costopoulos, Foster & Fields 831 Market Street Lemoyne, PA 17043 Attorneys for Defendants Koneff and Semic Dated: October -`', 2004 N 'T T1 ('il I I-TI w? t _ RITE AID CORPORATION, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. CIVIL ACTION - LAW DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC, F & M CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., and BRIAN EDEN, Defendants NO. 02-5863 CIVIL TERM ORDER OF COURT AND NOW, this 9`h day of November, 2004, upon consideration of Defendant Brian Eden's Petition for Relief from Judgment by Default, it is ordered that: 1. A Rule is issued upon Plaintiff and remaining Defendants to show cause why Defendant Brian Eden is not entitled to the relief requested; 2. Plaintiff and remaining Defendants shall file an answer to the petition within 21 days of the date of this order; 3. The petition shall be decided under Pa. R.C.P. 206.7; 4. Depositions shall be completed within 49 days of the date of this order; 5. Argument shall be held on Monday, January 31, 2005, at 11:00 a.m., in Courtroom No. 1, Cumberland County Courthouse, Carlisle, Pennsylvania. 6. Briefs shall be submitted at least seven days prior to argument. BY THE COURT, J. j s ler, Jr.1,4 7AL S? 0,1 RITE AID CORPORATION : IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA V. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN NO. 2002 - 5863 CIVIL CIVIL ACTION - LAW IN RE: PRELIMINARY OBJECTIONS OF DEFENDANTS KONEFF & SEMIC TO PLAINTIFF'S AMENDED COMPLAINT BEFORE HOFFER, P.J., OLER, GUIDO, JJ. ORDER OF COURT AND NOW, this 18TH day of NOVEMBER, 2004, after review of the parties' briefs, and having heard argument thereon, Defendants' Preliminary Objections are granted in part and denied in part. The Preliminary Objection to Plaintiff's "Preliminary Statement" is GRANTED and said "Preliminary Statement" is STRICKEN. The remainder of Defendants' Preliminary Objections are DENIED Edward E. Guido, J. ,,,8feve D. Shadowen, Esquire Gordon A. Einhorn, Esquire .Pathan C. Wolf, Esquire ?David J. Foster, Esquire :sld 1 r i.: ?- t, 1 ?? , -? --- ^,-? ?? t t .. ? 'r lt??st ?f:;L? IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION Plaintiff, V. DAVID KONEFF, SUSAN KONEFF, NO. 02-5863 DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants. ANSWER TO PETITION FOR RELIEF FROM JUDGMENT BY DEFAULT Plaintiff Rite Aid Corporation ("Rite Aid") does not oppose Defendant Brian Eden's Petition for Relief from Judgment by Default and answers the petition with corresponding paragraph numbers as follows: 1. Admitted that the Praecipe for Entry of Judgment by Default was dated Friday, October 22, 2004. With respect to the remaining averments in this paragraph, Plaintiff is without sufficient information to admit or deny the truth of these averments. 2. Admitted. However, Plaintiffs' Praecipe for Entry of Judgment by Default was received by the Prothonotary prior to that time. Plaintiff is without sufficient information to admit or deny the truth of the averments contained in Paragraph 3. 4. Plaintiff is without sufficient information to admit or deny the truth of the averments in Paragraph 4. By way of further response, counsel for Plaintiff has been informed by the Prothonotary that the Praecipe for Entry of Judgment by Default was received by the Prothonotary's office on Monday morning, October 25, 2004 but because of a manpower shortage in the Prothonotary's office, was not filed until sometime on Tuesday, October 26, 2004. 5. Admitted that due to the fact that the Prothonotary did not file the Praecipe for Entry of Default Judgment and the Judgment by Default on the date the Praecipe was received by the Prothonotary's office, the Default Judgment was filed after Defendant's answer was filed. WHEREFORE, Plaintiff Rite Aid Corporation does not oppose the petition by Defendant Brian Eden. Respectfully submitted, teve D. Shadowen, I.D. No. 41953 Gordon A. Einhorn, I.D. No. 59006 HANGLEY ARONCHICK SEGAL & PUDLIN 30 North Third Street, Suite 700 Harrisburg, PA 17101 (717) 364-1004 (717) 364-1020 - facsimile Attorneys for Plaintiff Rite Aid Corporation Dated: November 29, 2004 2 VERIFICATION I, Gordon A. Einhom, counsel for Rite Aid Corporation, verify that the facts stated in the foregoing Answer to Petition for Relief from Judgment by Default are true and correct to the best of my knowledge, information and belief. I understand that any false statements herein are made subject to the penalties of 18 Pa.C.S. § 4904 relating to unsworn falsification to authorities. ;Won A. Einhorn Dated: November 29, 2004 CERTIFICATION OF SERVICE This is to certify that I served a true and correct copy of the attached Answer to Petition for Relief from Judgment by Default upon the following persons via first class mail: David J. Foster, Esquire Leslie M. Fields, Esquire Costopoulos, Foster & Fields 831 Market Street Lemoyne, PA 17043 Attorneys for Defendants Koneff and Semic Nathan C. Wolf, Esquire Irwin Law Offices 64 S. Pitt Street Carlisle, PA 17013 Attorneys for Defendant Eden G on A. Einhorn Dated: November 29, 2004 C') ? C? c?'_ ? ~ri ' ? r? ? _ y? ,?, - ' ? C:.? ?? C'a tV Costopoulos, Foster & Fields David J. Foster, Esquire I.D. No.: 23151 ORIGINAL 831 Market Street/P.O. Box 222 Lemoyne, PA 17043-0222 Attorney for Defendants David & Susan Phone: 717-761-2121 Koneff and Daniel & Sharon Semic RITE AID CORPORATION Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNA. V. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC, F&S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., AND BRIAN EDEN Defendants NO. 02-5863 ANSWER OF DEFENDANT SHARON SEMIC After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 1 of the Complaint. 2. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 2 of the Complaint. 3. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 3 of the Complaint. 4. Admitted that Defendant Daniel Semic is a former employee of Rite Aid. 5. Admitted that Sharon Semic is the wife of Defendant Daniel Semic and resides with him in Dauphin County. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 5 of the Complaint. 6. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 6 of the Complaint. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 7 of the Complaint. 8. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 8 of the Complaint. 9. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 9 not the Complaint. 10. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 10 of the Complaint. 11. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 11 of the Complaint. 12. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 12 of the Complaint. 13. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 13 of the Complaint. 14. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 14 of the Complaint. 15. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 15 of the Complaint. 16. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 16 of the Complaint. 17. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 17 of the Complaint. 18. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations iin paragraph 18 of the Complaint. 19. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 19 of the Complaint. 20. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 20 of the Complaint. 21. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 21 of the Complaint. 22. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 22 of the Complaint. 23. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 23 of the Complaint. 24. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 24 of the Complaint. 25. No answer required. 26. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 26 of the Complaint. 27. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 27 of the Complaint. 28. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 28 of the Complaint. 29. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 29 of the Complaint. 30. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 30 of the Complaint. 31. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 31 of the Complaint. 32. The allegations contained in paragraph 32 are conclusions of law which require no answer pursuant to the Pennsylvania Rules of Civil Procedure. WHEREFORE, Defendant respectfully requests that.judgment be entered in her favor and that the Complaint be dismissed. 33. No answer required. 34. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 34 of the Complaint. 35. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 35. 36. Denied that Sharon Semic converted Rite Aid's funds by intentionally exercising ownership, dominion and control of the money in these accounts without consent or lawful justification. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the remaining averments in paragraph 36. 37. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 37. WHEREFORE, Defendant respectfully requests that judgment be entered in her favor and that the Complaint be dismissed. 38. No answer required. 39. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 39. 40. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 40. WHEREFORE, Defendant respectfully requests that judgment be entered in her favor and that the Complaint be dismissed. 41. No answer required. 42. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 42. 43. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 43. 44. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 44. WHEREFORE, Defendant respectfully requests that judgment be entered in her favor and that the Complaint be dismissed. 45. No answer required. 46. Admitted. 47. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 47. 48. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 48. 49. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 49. 50. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 50. NEW MATTER The claims of the Plaintiff against the Defendant are barred by the statute of limitations. 2. The claims of the Plaintiff against the Defendant are barred by the doctrine of laches. 3. The claims of the Plaintiff against the Defendant are barred by the doctrine of unclean hands. 4. The claims of the Plaintiff against the Defendant are barred by virtue of the fraudulent conduct of the Plaintiff. 6 5. The claims of the Plaintiff against the Defendant are barred by the illegal conduct of the Plaintiff. 6. Any monies deemed to be unlawfully obtained by the Defendant was not lawfully the property of the Plaintiff and Plaintiff therefore has no legal standing to assert any claims thereto. WHEREFORE, Defendant respectfully requests that judgment be entered in her favor and that the claims herein be dismissed. Respectfully submitted, David J. Foster,Esquire I.D. No. 23151 Costopoulos, Foster & Fields 831 Market Street/P.O. Box 222 Lemoyne, PA 17043-0222 Phone: 717-761-2121 -Attorney for Defendant Dated: January 12- , 2005 7 VERIFICATION I, Sharon Semic, hereby verify that the facts set forth in the foregoing document are true and correct to the best of my knowledge, information and belief. I understand that any false statements therein are made subject to the penalties of 18 Pa. C.S. § 4904, relating to unsworn falsification to authorities. Sharon Semic Dated: /??O CERTIFICATE OF SERVICE I, David J. Foster, Esquire, certify that I have served a true copy of the foregoing document on the individual(s) listed below by depositing the same in the United States mail, first-class, postage prepaid, from Lemoyne, Pennsylvania, addressed as follows: Steve D. Shadowen, Esquire Gordon A. Einhorn, Esquire SCHNADER, HARRISON SEGAL & LEWIS, LLP 30 North Third Street, Suite '700 Harrisburg, PA 17101 Counsel for Plaintiff Rite Aid Corporation By: David J. Foster, squire Dated: January I 2005 ` i ,:.n .a. Costopoulos, Foster & Fields David J. Foster, Esquire I.D. No.: 23151 ORIGINAL 831 Market Street/P.O. Box 222 Lemoyne, PA 17043-0222 Attorney for Defendants David & Susan Phone: 717-761-2121 Koneff and Daniel & Sharon Semic RITE AID CORPORATION Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNA. V. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC, F&S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., AND BRIAN EDEN Defendants NO. 02-5863 ANSWER OF DEFENDANT DANNIEL SEMIC Admitted. 2. Admitted except that Defendant Koneff's position at Rite Aid was as Sales Tax Manager. 3. Admitted that Defendant Susan Koneff is the wife of Defendant David Koneff. 4. Admitted. 5. Admitted that Defendant Sharon Semic is the wife of Defendant Daniel Semic, and they reside together in Dauphin County. 6. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 6. 7. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 7. 8. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph S. 9. Admitted. 10. Upon information and belief, it is denied that, in purchasing good and services, Rite Aid is periodically charged state sales tax, and that Rite Aid uses the services of outside firms to recoup such state sales taxes. 11. Denied that Defendant Semic was intimately familiar with these procedures and was in a position to abuse those procedures for personal gain. 12. On information and belief, it is admitted that the Defendant Eden operated various companies which identified and assisted in obtaining tax refunds and credits for corporate clients. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the remainder of this paragraph. 13. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the averment that in or about January 1996, Defendants Koneff, Semic, Eden, and F & S, conspired to defraud Rite Aid and misappropriate funds. 14. The Defendant denies that, according to the Defendant's scheme, Eden, through his company New York Sales Tax Credit, submitted requests for payment to Rite Aid falsely claiming that sales tax refunds have been obtained from New York State and 2 requesting payment of commissions based upon the amount of the purported tax refunds, and that these requests were received at Rite Aid by Defendants Koneff and Semic who, knowing that they were false, approved the payments and directed that checks be issued by Rite Aid to New York Sales Tax Credit. 15. After reasonable investigation, Defendant its without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 15. 16. Defendant denies that the Defendants' plan was put into effect in or about January 1996 when the first request for payment was made by the New York Sales Tax Credit requesting a payment in the amount of $5,000. Denied that, according to plan, Koneff and Semic approved a payment of the full amount, despite the fact that the commission had not been earned. Defendant cannot address the remaining allegation in paragraph 16 as it does not make sense. 17. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 17. 18. Defendant denies that in January 1997, Koneff and Semic wrongfully approved payment to New York Sales Tax Credit of $89,500. Denied that Rite Aid's check in this amount was sent to New York Sales Tax Credit's mailbox in Yonkers, New York. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 18. 19. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 19. 20. As to the allegations of paragraph 20, Defendant asserts his right not to incriminate himself under the Fifth Amendment to the United States Constitution and proof of the allegations is demanded. 21. Denied that this pattern (as set forth in the proceeding paragraphs) was repeated on a nearly monthly basis over the next three years. Upon reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 21. 22. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the averments that between January 1997 and August 2000, Defendant Koneff received checks from F & S and/or Federal & State totaling more than $1.6 million, representing his share of the misappropriated funds, and that Defendants Semic and Eden are believed to have received similar amounts. 23. Defendant denies that the Defendants concealed their activities from Rite Aid. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 23. 24. The allegations of paragraph 24 are conclusions of law which require no answer pursuant to the Pennsylvania Rules of Civil Procedure. 25. No answer required. 26. Defendant denies that Defendants Eden and F& S submitted numerous payment requests to Rite Aid falsely claiming the sales tax refunds had been obtained from Rite Aid and requesting payment of commissions based upon the purported refunds. 27. The averments of paragraph 27 are denied. 28. Defendant denies that Defendants Koneff and Semic misrepresented to Rite Aid that New York Sales Tax Credit was entitled to payment of the commissions in that they approved the payment requests submitted to Rite Aid and directed that checks be sent to New York Sales Tax Credit. 29. Defendant denies that Defendants Koneff and Semic misrepresented to Rite Aid that New York Sales Tax Credit was entitled to payment of the commissions in that they approved the payment requests submitted to Rite Aid, and thus deny the averments of paragraph 29. 30. Defendant denies that Defendants Koneff and Semic misrepresented to Rite Aid that New York Sales Tax Credit was entitled to payment of the commissions in that they approved the payment requests submitted to Rite Aid, and thus deny the averments of paragraph 30. 31. Defendant denies that Defendants Koneff and Semic misrepresented to Rite Aid that New York Sales Tax Credit was entitled to payment of the commissions in that they approved the payment requests submitted to Rite Aid, and thus deny the averments of paragraph 31. 32. The allegations contained in paragraph 32 are conclusions of law which require no answer pursuant to the Pennsylvania Rules of Civil Procedure. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the Complaint be dismissed. 33. No answer required. 34. Denied that Defendants converted Rite Aid's money as set forth in the Complaint and denied that Defendant obtained funds under false pretenses from Rite Aid as set forth in the Complaint. 35. Defendant believes and therefore avers that the allegations contained in paragraph 35 are directed to co-defendants only and require no answer pursuant to the Pennsylvania Rules of Civil Procedure. 36. Admitted that Defendant Semic placed funds from F & S into joint accounts owned jointly by him and Defendant Sharon Semic. Denied that Sharon Semic converted Rite Aid's funds by intentionally exercising ownership, dominion and control over the monies in these accounts, without consent or lawful justification. 37. Denied that Rite Aid suffered loss as a result of the Defendants' conversion as alleged in this Complaint. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the Complaint be dismissed. 38. No answer required. 39. As to the allegations of paragraph 39, Defendant asserts his right not to incriminate himself under the Fifth Amendment to the United States Constitution and proof of the allegations is demanded. 40. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 40. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the Complaint be dismissed. 41. No answer required. 42. As to the allegations of paragraph 42, Defendant asserts his right not to incriminate himself under the Fifth Amendment to the United States Constitution and proof of the allegations is demanded. 43. As to the allegations of paragraph 43, Defendant asserts his right not to incriminate himself under the Fifth Amendment to the United States Constitution and proof of the allegations is demanded. 44. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 44. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the Complaint be dismissed. 45. No answer required. 46. Admitted. 47. Denied that prior to entering into the agreement, Defendant concealed from Rite Aid his acts of misconduct as alleged in the Complaint. 48. Denied; see answer to #47 above. 49. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations set forth in paragraph 49. 50. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations set forth in paragraph 50. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the Complaint be dismissed. NEW MATTER 1. The claims of the Plaintiff against the Defendant are barred by the statute of limitations. 2. The claims of the Plaintiff against the Defendant are barred by the doctrine of laches. 3. The claims of the Plaintiff against the Defendant are barred by the doctrine of unclean hands. 4. The claims of the Plaintiff against the Defendant are barred by virtue of the fraudulent conduct of the Plaintiff. 5. The claims of the Plaintiff against the Defendant are barred by the illegal conduct of the Plaintiff. 6. Any monies deemed to be unlawfully obtained by the Defendant was not lawfully the property of the Plaintiff and Plaintiff therefore has no legal standing to assert any claims thereto. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the claims herein be dismissed. Respectfully submitted, David J. Foster, Esquire I.D. No. 23151 Costopoulos, Foster & Fields 831 Market Street/P.O. Box 222 Lemoyne, PA. 17043-0222 Phone: 717-761-2121 -Attorney for Defendant Dated: January LZ , 2005 9 VERIFICATION 1, Daniel Semic, hereby verify that the facts set forth in the foregoing document are true and correct to the best of my knowledge, information and belief. I understand that any false statements therein are made subject to the penalties of 18 Pa. C.S. § 4904, relating to unsworn falsification to authorities. I )40--',A?rz Daniel Semic Dated: l ?-? CERTIFICATE OF SERVICE I, David J. Foster, Esquire, certify that I have served a true copy of the foregoing document on the individual(s) listed below by depositing the same in the United States mail, first-class, postage prepaid, from Lemoyne, Pennsylvania, addressed as follows: Steve D. Shadowen, Esquire Gordon A. Einhorn, Esquire SCHNADER, HARRISON SEGAL & LEAS, LLP 30 North Third Street, Suite '700 Harrisburg, PA 17101 Counsel for Plaintiff Rite Aid Corporation By: David J. Fos , Esquire Dated: January 1'y , 2005 c'. ?, Costopoulos, Foster & Fields David J. Foster, Esquire I.D. No.: 23151 ORIGINAL 831 Market Street/P.O. Box 222 Lemoyne, PA 17093-0222 Attorney for Defendants David & Susan Phone: 717-761-2121 Koneff and Daniel & Sharon Semic RITE AID CORPORATION Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNA. V. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC, F&S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., AND BRIAN EDEN Defendants NO. 02-5863 ANSWER OF DEFENDANT SUSAN KONEFF 1. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 1 of the Complaint. 2. Admitted that Defendant David Koneff is a former employee of Rite Aid. 3. Admitted that Susan Koneff is the wife of Defendant David Koneff and resides with him at 760 Seitz Drive, Lewisberry, PA 17339. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 3 of the Complaint. 4. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 4 of the Complaint. 5. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 5 of the Complaint. 6. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 6 of the Complaint. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 7 of the Complaint. 8. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 8 of the Complaint. 9. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 9 not the Complaint. 10. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 10 of the Complaint. 11. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 11 of the Complaint. 12. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 12 of the Complaint. 13. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 13 of the Complaint. 14. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 14 of the Complaint. 15. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 15 of the Complaint. 16. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 16 of the Complaint. 17. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 17 of the Complaint. 18. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 18 of the Complaint. 19. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 19 of the Complaint. 20. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 20 of the Complaint. 21. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 21 of the Complaint. 22. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 22 of the Complaint. 23. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 23 of the Complaint. 24. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 24 of the Complaint. 25. No answer required. 26. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 26 of the Complaint. 27. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 27 of the Complaint. 28. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 28 of the Complaint. 29. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 29 of the Complaint. 30. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 30 of the Complaint. 31. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 31 of the Complaint. 32. The allegations contained in paragraph 32 are conclusions of law which require no answer pursuant to the Pennsylvania Rules of Civil Procedure. WHEREFORE, Defendant respectfully requests that judgment be entered in her favor and that the Complaint be dismissed. 33. No answer required. 34. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 34 of the Complaint. 35. Denied that Susan Koneff converted Rite Aid's funds by intentionally exercising ownership, dominion and control of the money in these accounts without consent or lawful justification. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the remaining averments in paragraph 35. 36. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 36. 37. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 37. WHEREFORE, Defendant respectfully requests that judgment be entered in her favor and that the Complaint be dismissed. 38. No answer required. 39. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 39. 40. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 40. WHEREFORE, Defendant respectfully requests that judgment be entered in her favor and that the Complaint be dismissed. 41. No answer required. 42. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 42. 43. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 43. 44. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 44. WHEREFORE, Defendant respectfully requests that judgment be entered in her favor and that the Complaint be dismissed. 45. Defendant believes and therefore avers that the allegations contained in paragraph 45 are directed to co-defendants only and require no answer pursuant to the Pennsylvania Rules of Civil Procedure. 46. Defendant believes and therefore avers that the allegations contained in paragraph 46 are directed to co-defendants only and require no answer pursuant to the Pennsylvania Rules of Civil Procedure. 47. Defendant believes and therefore avers that the allegations contained in paragraph 47 are directed to co-defendants only and require no answer pursuant to the Pennsylvania Rules of Civil Procedure. 48. Defendant believes and therefore avers that the allegations contained in paragraph 48 are directed to co-defendants only and require no answer pursuant to the Pennsylvania Rules of Civil Procedure. 49. Defendant believes and therefore avers that the allegations contained in paragraph 49 are directed to co-defendants only and require no answer pursuant to the Pennsylvania Rules of Civil Procedure. 50. Defendant believes and therefore avers that the allegations contained in paragraph 50 are directed to co-defendants only and require no answer pursuant to the Pennsylvania Rules of Civil Procedure. NEW MATTER The claims of the Plaintiff against the Defendant are barred by the statute of limitations. 6 2. The claims of the Plaintiff against the Defendant are barred by the doctrine of laches. 3. The claims of the Plaintiff against the Defendant are barred by the doctrine of unclean hands. 4. The claims of the Plaintiff against the Defendant are barred by virtue of the fraudulent conduct of the Plaintiff. 5. The claims of the Plaintiff against the Defendant are barred by the illegal conduct of the Plaintiff. 6. Any monies deemed to be unlawfully obtained by the Defendant was not lawfully the property of the Plaintiff and Plaintiff therefore has no legal standing to assert any claims thereto. WHEREFORE, Defendant respectfully requests that judgment be entered in her favor and that the claims herein be dismissed. Respectfully submitted, David J. Foster, Esquire I.D. No. 23151 Costopoulos, Foster & Fields 831 Market Street/P.O. Box 222 Lemoyne, PA 17043-0222 Phone: 717-761-2121 -Attorney for Defendant Dated: January 1, 2005 7 VERIFICATION I, Susan Koneff, hereby verify that the facts set forth in the foregoing document are true and correct to the best of my knowledge, information and belief. I understand that any false statements therein are made subject to the penalties of 18 Pa. C.S. § 4904, relating to unswom falsification to authorities. Susan Koneff Dated: CERTIFICATE OF SERVICE I, David J. Foster, Esquire, certify that I have served a true copy of the foregoing document on the individual(s) listed below by depositing the same in the United States mail, first-class, postage prepaid, from Lemoyne, Pennsylvania, addressed as follows: Steve D. Shadowen, Esquire Gordon A. Einhom, Esquire SCHNADER, HARRISON SEGAL & LEWIS, LLP 30 North Third Street, Suite 700 Harrisburg, PA 17101 Counsel for Plaintiff Rite Aid Corporation I3y: ?X David J. Foster, squire Dated: January M , 2005 Costopoulos, Foster & Fields David J. Foster, Esquire I.D. No.: 23151 ORIGINAL 831 Market Street/P.O. Box 222 Lemoyne, PA 17043-0222 Attorney for Defendants David & Susan Phone: 717-761-2121 Koneff and Daniel & Sharon Semic RITE AID CORPORATION Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNA. V. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC, F&S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., AND BRIAN EDEN Defendants NO. 02-5863 ANSWER OF DEFENDANT DAVID KONEFF AND NOW comes the Defendant David Koneff, by and through his attorneys, Costopoulos, Foster & Fields, and respectfully avers in answer to the Complaint as follows: Admitted. 2. Admitted except that Defendant's position at Rite Aid was as Sales Tax Manager. 3. Admitted that Defendant Susan Koneff is the wife of Defendant David Koneff, and they reside together at 760 Seitz Drive, Lewisberry, PA 17339. 4. Admitted. 5. Admitted that Defendant Sharon Semic is the wife of Defendant Daniel Semic. 6. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in. paragraph 6. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 7. 8. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 8. 9. Admitted. 10. Upon information and belief, it is denied that, in purchasing good and services, Rite Aid is periodically charged state sales tax, and that Rite Aid uses the services of outside firms to recoup such state sales taxes. 11. Denied that Defendant Koneff was intimately familiar with these procedures and was in a position to abuse those procedures for personal gain. 12. On information and belief, it is admitted that the Defendant Eden operated various companies which identified and assisted in obtaining tax refunds and credits for corporate clients. After reasonable investigation, Defendani is without knowledge or information sufficient to form a belief as to the truth of the remainder of this paragraph. 13. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the averment than in or about January 1996, Defendants Koneff, Semic, Eden, and F & S, conspired to defraud Rite Aid and misappropriate funds. 14. The Defendant denies that, according to the Defendant's scheme, Eden, through his company New York Sales Tax Credit, submitted requests for payment to Rite Aid falsely claiming that sales tax refunds have been obtained from New York State and requesting payment of commissions based upon the amount of the purported tax refunds, and that these requests were received at Rite Aid by Defendants Koneff and Semic who, knowing that they were false, approved the payments and directed that checks be issued by Rite Aid to New York Sales Tax Credit. 15. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 15. 16. Defendant denies that the Defendants' plan was put into effect in or about January 1996 when the first request for payment was made by the New York Sales Tax Credit requesting a payment in the amount of $5,000. Denied that, according to plan, Koneff and Semic approved a payment of the full amount, despite the fact that the commission had not been earned. Defendant cannot address the remaining allegation in paragraph 16 as it does not make sense. 17. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 17. 18. Defendant denies that in January 1997, Koneff and Semic wrongfully approved payment to New York Sales Tax Credit of $89,500. Denied that Rite Aid's check in this amount was sent to New York Sales Tax Credit's mailbox in Yonkers, New York. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 18. 19. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 19. 20. As to the allegations of paragraph 20, Defendant asserts his right not to incriminate himself under the Fifth Amendment to the United States Constitution and proof of the allegations is demanded. 21. Denied that this pattern (as set forth in the proceeding paragraphs) was repeated on a nearly monthly basis over the next three years. Denied that Rite Aid's final payment to New York Sales Tax Credit was made in December 1999. Upon reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 21. 22. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the averments that between January 1997 and August 2000, Defendant Koneff received checks from F & S and/or Federal & State totaling more than $1.6 million, representing his share of the misappropriated funds, and that Defendants Semic and Eden are believed to have received similar amounts. 21 Defendant denies that the Defendants concealed their activities from Rite Aid. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in paragraph 23. 24. The allegations of paragraph 24 are conclusions of law which require no answer pursuant to the Pennsylvania Rules of Civil Procedure. 25. No answer required. 26 Defendant denies that Defendants Eden and F & S submitted numerous payment requests to Rite Aid falsely claiming the sales tax refunds had been obtained from Rite Aid and requesting payment of commissions based upon the purported refunds. 27. The averments of paragraph 27 are denied. 28. Defendant denies that Defendants Koneff and Semic misrepresented to Rite Aid that New York Sales Tax Credit was entitled to payment of the commissions in that they approved the payment requests submitted to Rite Aid and directed that checks be sent to New York Sales Tax Credit. 29. Defendant denies that Defendants Koneff and Semic misrepresented to Rite Aid that New York Sales Tax Credit was entitled to payment of the commissions in that they approved the payment requests submitted to Rite Aid, and thus deny the averments of paragraph 29. 30. Defendant denies that Defendants Koneff and Semic misrepresented to Rite Aid that New York Sales Tax Credit was entitled to payment of the commissions in that they approved the payment requests submitted to Rite Aid, and thus deny the averments of paragraph 30. 31. Defendant denies that Defendants Koneff and Semic misrepresented to Rite Aid that New York Sales Tax Credit was entitled to payment of the commissions in that they approved the payment requests submitted to Rite Aid, and thus deny the averments of paragraph 31. 32. The allegations contained in paragraph 32 are conclusions of law which require no answer pursuant to the Pennsylvania Rules of Civil Procedure. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the Complaint be dismissed. 33. No answer required. 34. Denied that Defendants converted Rite Aid's money as set forth in the Complaint and denied that Defendant obtained funds under false pretenses from Rite Aid as set forth in the Complaint. 35. Admitted that Defendant Koneff placed funds from F & S into joint accounts owned jointly by him and Defendant Susan Koneff. Denied that Susan Koneff converted Rite Aid's funds by intentionally exercising ownership, dominion and control over the monies in these accounts, without consent or lawful justification. 36. Defendant believes and therefore avers that the allegations contained in paragraph 36 are directed to co-defendants only and require no answer pursuant to the Pennsylvania Rules of Civil Procedure. 37. Denied that Rite Aid suffered loss as a result of the Defendants' conversion as alleged in this Complaint. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the Complaint be dismissed. 38. No answer required. 39. As to the allegations of paragraph 39, Defendant asserts his right not to incriminate himself under the Fifth Amendment to the United States Constitution and proof of the allegations is demanded. 40. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 40. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the Complaint be dismissed. 41. No answer required. 42. As to the allegations of paragraph 42, Defendant asserts his right not to incriminate himself under the Fifth Amendment to the United States Constitution and proof of the allegations is demanded. 43. As to the allegations of paragraph 43, Defendant asserts his right not to incriminate himself under the Fifth Amendment to the United States Constitution and proof of the allegations is demanded. 44. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraph 44. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the Complaint be dismissed. 45. No answer required. 46. The Defendant believes that the allegations contained in paragraph 46 apply to co-defendants only and requires no answer pursuant to Pennsylvania Rules of Civil Procedure. 47. The Defendant believes that the allegations contained in paragraph 47 apply to co-defendants only and requires no answer pursuant to Pennsylvania Rules of Civil Procedure. 48. The Defendant believes that the allegations contained in paragraph 48 apply to co-defendants only and requires no answer pursuant to the Pennsylvania Rules of Civil Procedure. 49. The Defendant believes that the allegations contained in paragraph 49 apply to co-defendants only and requires no answer pursuant to the Pennsylvania Rules of Civil Procedure. 50. The Defendant believes that the allegations contained in paragraph 50 apply to co-defendants only and requires no answer pursuant to the Pennsylvania Rules of Civil Procedure. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the Complaint be dismissed. NEW MATTER The claims of the Plaintiff against the Defendant are barred by the statute of limitations. 2. The claims of the Plaintiff against the Defendant are barred by the doctrine of laches. 3. The claims of the Plaintiff against the Defendant are barred by the doctrine of unclean hands. 4. The claims of the Plaintiff against the Defendant are barred by virtue of the fraudulent conduct of the Plaintiff. 5. The claims of the Plaintiff against the Defendant are barred by the illegal conduct of the Plaintiff. Any monies deemed to be unlawfully obtained by the Defendant was not lawfully the property of the Plaintiff and Plaintiff therefore has no legal standing to assert any claims thereto. WHEREFORE, Defendant respectfully requests that judgment be entered in his favor and that the claims herein be dismissed. Respectfully submitted, David J. Foster, Esquire I.D. No. 23151 Costopoulos, Foster & Fields 831 Market Street/P.O. Box 222 Lemoyne, PA 17043-0222 Phone: 717-761-2121 --Attorney for Defendant Dated: January K, 2005 VERIFICATION I, David Koneff, hereby verify that the facts set forth in the foregoing document are true and correct to the best of my knowledge, information and belief. I understand that any false statements therein are made subject to the penalties of 18 Pa. C.S. § 4904, relating to unworn falsification to authorities. !L?'ADL- ? b ? z fy,ilk--' David Koneff Dated: ? I \2,, ;Q-Oor CERTIFICATE OF SERVICE I, David J. Foster, Esquire, certify that I have served a true copy of the foregoing document on the individual(s) listed below by depositing the same in the United States mail, first-class, postage prepaid, from Lemoyne, Pennsylvania, addressed as follows: Steve D. Shadowen, Esquire Gordon A. Einhorn, Esquire SCHNADER, HARRISON SEGAL & LEWIS, LLP 30 North Third Street, Suite 700 Harrisburg, PA 17101 Counsel for Plaintiff Rite Aid Corporation i By: David J. Foste , squire Dated: January _I, 2005 - ,:? ? -_? {_ ' ,. , ,. << RITE AID CORPORATION, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. : CIVIL ACTION - LAW DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC., d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., and BRIAN EDEN, Defendants NO. 02-5863 CIVIL TERM ORDER OF COURT AND NOW, this 26th day of January, 2005, upon consideration of Defendant Brian Eden's Petition for Relief from Judgment by Default, and of Plaintiff's Answer to Petition for Relief from Judgment by Default, Defendant's petition is granted and the default judgment is stricken. Oral argument previously scheduled for January 31, 2005, is cancelled. BY THE COURT, J Wesley Oler, Jr' ,46ordon A. Einhorn, Esq. 30 North Third Street Suite 700 1 Harrisburg, PA 17101-1701 Attorney for Plaintiff n -00 i• 013 :i d 9z t-` f su02 'ri L c Pavid J. Foster, Esq Leslie M. Fields, Esq. 831 Market Street Lemoyne, PA 17043 Attorneys for Defendant Koneff and Semic than C. Wolf, Esq. 37 South Hanover Street Suite 201 Carlisle, PA 17013 Attorney for Defendant Eden :rc IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION Plaintiff, V. DAVID KONEFF, SUSAN KONEFF, NO. 62-5863 DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC., d/bla NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC. and BRIAN EDEN Defendants. PLAINTIFF RITE AID CORPORATION'S ANSWER TO NEW MATTER Plaintiff Rite Aid Corporation ("Rite Aid") answers the new matter contained in the Answers of Defendants David Koneff, Susan Koneff, Daniel Semic and Sharon Semic with corresponding paragraph numbers as follows: The averment contained in Paragraph 1 constitutes a conclusion of law to which no response is required. 2. The averment contained in Paragraph 2 constitutes a conclusion of law to which no response is required. 3. The averment contained in Paragraph 3 constitutes a conclusion of law to which no response is required. 4. The averment contained in Paragraph 4 constitutes a conclusion of law to which no response is required. In the event that any portion of Paragraph 4 is deemed to be factual in nature, the averment is denied. 5. The averment contained in Paragraph 5 constitutes a conclusion of law to which no response is required. In the event that any portion of Paragraph 5 is deemed to be factual in nature, the averment is denied. 6. It is denied that the monies deemed to be unlawfully obtained by the Defendant were not lawfully the property of the Plaintiff. On the contrary, all monies taken were the Plaintiff s lawful property. The averment that Plaintiff has no legal standing to assert its claims constitutes a conclusion of law to which no response is required. WHEREFORE, Plaintiff Rite Aid Corporation respectfully requests that judgment be entered in its favor. Respectfully submitted, teve D. Shadowen, LD. No. 41953 Gordon A. Einhorn, I.D. No. 59006 HANGLEY ARONCHICK SEGAL & PUDLIN 30 North Third Street, Suite 700 Harrisburg, PA 17101 (717) 364-1004 (717) 364-1020 -facsimile Attorneys for Plaintiff Rite Aid Corporation Dated: February 2, 2005 CERTIFICATION OF SERVICE This is to certify that I served a true and correct copy of the attached Answer to New Matter upon the following persons via first class mail: David J. Foster, Esquire Leslie M. Fields, Esquire Costopoulos, Foster & Fields 831 Market Street Lemoyne, PA 17043 Attorneys for Defendants Koneff and Semic Nathan C. Wolf, Esquire Irwin Law Offices 64 S. Pitt Street Carlisle, PA 17013 Attorneys for Defendant Eden ordon A. Einhorn Dated: February 2, 2005 WRIRICATION James J. Comitale, Esquire, deposes and says that I am Associate Counsel for Rite Aid Corporation, and that while I do not have personal knowledge of all of the facts recited in the foregoing Answers to New Matter, the information contained thcrein has been collected and made available to me by others and said Response is true and correct to the best of my knowledge, information and belief and is therefore verified on behalf of Rite Aid Corporation. I make this statement subject to the penalties of I8 Pa. C.S. § 4904 rela ' to unswotn falsification to authorities. \ ( t By: Dated: ?.0? names J. CbWitale, Esquire Senior Associate Counsel Fite Aid Corporation ¢ l ? _) ?? -Tl .:.: ? .,z ... i ? Ji. ?? <) '.':?'. ,. i .: 1 •' ;a t. ;'? ... ?^.:J RECEIVED JUL p 62005 RITE AID CORPORATION, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V. DAVID KONEFF, SUSAN KONEFF, : CIVIL ACTION - LAW DANIEL SEMIC, SHARON SEMIC, : F & S CORPORATE ADVISORS, INC.,: NO. 02-5863 d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., and BRIAN EDEN, Defendants ORDER AND NOW this day of July, 2005, upon consideration of the foregoing Petition for Leave to Withdraw as Counsel for Defendant Brian Eden, the requested relief therein his hereby GRANTED and counsel is hereby authorized to file a praecipe to withdraw as counsel with the Prothonotary and to serve notice of this Order and such praecipe upon Defendant Brian Eden and counsel for all other parties to this matter. C ? .-0)D G M lam- _ i:J ca NATHAN C. WOLF, ESQUIRE ATTORNEY ID NO. 87380 37 SOUTH HANOVER STREET, SUITE 201 CARLISLE PA 17013 (717) 241-4436 RITE AID CORPORATION, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC.,: d/b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., and CIVIL ACTION - LAW NO. 02-5863 BRIAN EDEN, Defendants Praecipe for Withdrawal of Appearance To the Prothonotary. Withdraw my appearance on behalf of Defendant Brian Eden. July 11, 2005 C. 37 South Ha r Street, Suite 201 Carlisle, P ,AX013 717-241-4436 SUPREME COURT ID #87380 ? ? p c ? ? r ? _. ? r _??? Via.. -??-ii r 4 `?'? ?.... ^? i Y -?? HANGLEY ARONCHICK SEGAL & PUDLIN By: Steve D. Shadowen, Esq. (No. 41953) Gordon A. Einhom, Esq. (No. 59006) 30 N. Third Street, Suite 700 Harrisburg, PA 17101 (717) 364-1004 (717) 364-1020 - facsimile Attorneys for Plaintiff, Rite Aid Corporation RITE AID CORPORATION, Plaintiff V. DAVID KONEFF, SUSAN KONEFF, DANIEL SEMIC, SHARON SEMIC, F & S CORPORATE ADVISORS, INC., d(b/a NEW YORK SALES TAX CREDIT, FEDERAL & STATE CORPORATE ADVISORS, INC., and BRIAN EDEN, Defendants. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY CIVIL ACTION - LAW NO. 02-5863 SUBSTITUTION OF COUNSEL TO THE PROTHONOTARY: Please withdraw the appearance of Steve D. Shadowen, Esq. and Gordon A. Einhorn, Esq. of Hangley Aronchick Segal & Pudlin as counsel of record for Rite Aid Corporation, Inc. and enter the appearance of Keith R. Dutill, Esq. and Brian P. Seaman, Esq. of Stradley, Ronon, Stevens & Young, LLP as counsel of record for Rite Aid Corporation. "` -/ey-? -cam ve D. Shadowen, Esq. Gordon A. Einhom, Esq. Hangley Aronchick Segal & Pudlin 30 N. Third Street, Suite 700 Harrisburg, PA 17101 (717) 364-1004 (717) 364-1020-facsimile Keith R. utill, Esq. Brian P. Seaman, Esq. Stradley, Ronon, Stevens & Young LLP 30 Valley Stream Parkway Malvern, PA 19355 (610) 640-5800 (610) 640-1965 - facsimile Dated: r / 2 L Zo J, Dated: e LITIGATION 400332 v. I 88g-$-7 2-85 Zl TRAVELERS Travelers Casualty and Surety Company of America Hartford, CT 06183 icense No. 8(0? CUMBERLAND COUNTY COURT OF COMMON PLEAS 1 COURTHOUSE SQUARE CARLISLE, PENNSYLVANIA 17013 I Jul 8 nn BY: RITE AID CORPORATION P.O. BOX 3165 CARLISLE, PENNSYLVANIA 17013 To Whom It May Concern: We hereby rescind the Notice of Cancellation, dated 8/7/2008, which is applicable to the above captioned account. Please enter this notification into your files immediately, thus avoiding any possible confusion. Your cooperation in this matter is greatly appreciated. RE: Policy Number 103975801 Policy Name: RITE AID CORPORATION S-41210.502 -3I)-a4o-77Y9' wk U- - klzw c...., A"41 Ats'u . N >t; r??