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VARIETY MACHINES, INC., a
Pennsylvania corporation.
Plaintiff,
: IN THE COURT OF COMMON PLBAS
: CUMBERLAND COUNTY, PENNSYLVANIA
: CIVIL ACTION . EQUITY
("'oj E'lu,fy
NO. Qr -/0("\ GV."IL TERM 1998
vs.
DAVID W. MAGARO, JR..
Defendant.
NOTICE
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 plaintiff. You may lose money or property or
other rights important to you.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU 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.
Cumberland County Bar Association
2 Liberty Avenue
Carlisle, PA 17013
(717) 249-3166
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VARIETY MACHINES, INC., a
Pennsylvania corporation,
Plaintiff,
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
: CIVIL ACTION - EQUITY
: NO. gP-/{J() gtYi~\.ERM 1998
vs.
DAVID W. NAGARO. JR.,
Defendant.
COMPLAINT
AND NOW,
comes variety Machines,
(hereinafter
Inc.
"Plaintiff"), by and through its counsel, Gates & Associates, P.C.,
and makes the following complaint:
1. Plaintiff is a pennsylvania business corporation having
its principal offices at 116 East Allen Street, Mechanicsburg,
Cumberland County, pennsylvania 17055, and doing business under the
registered fictitious name "variety Amusements".
2. For over thirty-six years, Plaintiff has engaged in the
purchase, placement and sale of coin-operated video games, pool
tables, juke boxes and similar amusement machines in central
pennsylvania.
3. Plaintiff places its amusement machines in restaurants,
taverns and other corrunercial enterprises under an agreement that it
will share the machine receipts with the host enterprise.
4. The majority of Plaintiff I s revenues are derived from
receipts collected from its amusement machines.
5. At the time of his death on October 10, 1995, David W.
Magaro (hereinafter "Decedent") was Plaintiff's president and sole
shareholder.
6. Decedent's will, which was admitted to probate by the
Cumberland County Register of Wills on November 9, 1995, directs
that Decedent's interest in Plaintiff be distributed in equal
shares to his sons, David W. Magaro, Jr. (hereinafter "Defendant")
and Antonio W. Magaro.
7. Decedent's interest in Plaintiff has not yet been
distributed, and title to said interest is currently held by
Decedent's surviving spouse, Marie K. Magaro, in her capacity as
administratrix c.t.a. of Decedent's estate.
B. Defendant is an adult individual believed to be residing
at 169 Willow Mill Park Road, Mechanicsburg (Silver spring
Township), Cumberland County, Pennsylvania 17055.
9. At the time of Decedent's death, both Defendant and
Antonio Magaro were employed by Plaintiff.
10. At the time of Decedent's death, Plaintiff had
approximately 550 amusement machines placed in approximately 100
host enterprises.
11. On or about December 1, 1995, Defendant was elected a
member and chairman of Plaintiff's board of directors.
12. On or about December 1, 1995, Defendant was elected
Plaintiff's president and secretary.
13. From approximately October, 1995 through the present,
Defendant has enjoyed the possession and use of plaintiff's 1995
Chevrolet Blazer vehicle.
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14. From the commencement of Defendant's employment through
the present, Plaintiff has paid Defendant a weekly salary, and
Plaintiff has paid Defendant's weekly child support obligation,
medical insurance premium and vehicle insurance premium.
15. On or about September 8, 1997, Defendant was removed as
a member and chairman of Plaintiff's board of directors.
16. On or about September 8, 1997, Defendant was removed as
Plaintiff's president and secretary, and Defendant was elected
Plaintiff's vice-president.
17. From approximately October, 1995, until approximately
September 8, 1997, Defendant eXClusively handled the collection of
receipts from Plaintiff's amusement machines.
18. On or about October 1, 1997, Defendant was suspended from
his duties as Plaintiff's employee.
19. Despite his suspension, Defendant has continued to
receive his weekly salary from Plaintiff, he has retained the
possession and use of Plaintiff's vehicle, and Plaintiff has
continued to pay Defendant's weekly child support obligations and
medical and vehicle insurance premiums.
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COUNT I
COWERS ION
20. The averments of the foregoing paragraphs 1 through 19
are incorporated herein by reference.
21. Plaintiff believes and therefore avers that from
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approximately OctOber, 1995, through his suspension, Defendant
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seized receipts from Plaintiff'S amusement machines and retained
the receipts for his own use without accounting to plaintiff.
22. Plaintiff has an immediate right to the receipts
contained within its amusement machines.
23. Defendant converted Plaintiff'S property by interfering
with Plaintiff's right to possession of receipts from its amusement
machines and by fraudulently and intentionally asserting control
over said receipts without lawful justification.
24. Defendant has admitted to converting approximately
$40,000.00 in receipts from Plaintiff's amusement machines.
25. It is believed and therefore averred that the amount of
receipts converted by Defendant is substantially greater than that
which he admitted.
WHEREFORE, Plaintiff demands jUdgment against Defendant for
damages in an amount exceeding the threshold for compulsory
arbitration under local rules, plus punitive damages, pre-judgment
interest, costs, attorney fees and such other relief as the Court
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deems appropriate.
COUNT II
BREACH OF DUTY OF LOYALTY
26. The averments of the foregoing paragraphs 1 through 25
are incorporated herein by reference.
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27. As Plaintiff's board chairman, officer and employee,
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Defendant owed a duty of loyalty to Plaintiff.
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28. As Plaintiff's employee, Defendant owes a duty of loyalty
to Plaintiff.
29. It 1s believed and therefore averred that on or about
December 1, 1997, Defendant organized Magaro Machines, Inc. as a
Pennsylvania business corporation with its registered address at
169 Willow Mill Park Road, Mechanicsburg, Cumberland County,
pennsylvania 17055.
30. It is believed and therefore averred that Defendant is
the president and sole shareholder of Magaro Machines, Inc.
31. It is believed and therefore averred that, individually
and/or through Magaro Machines, Inc., Defendant is engaged in the
purchase, placement and sale of coin-operated video games, pool
tables, juke boxes and similar amusement machines in central
Pennsylvania.
32. It is believed and therefore averred that, individually
and/or through Magaro Machines, Inc., Defendant has contacted
Plaintiff's existing customers with the intent to destroy the
contractual relationship between Plaintiff and said customers and
with the intent to establish a contractual relationship between
said customers and himself and/or Magaro Machines, Inc.
33. It is believed and therefore averred that, individually
and/or through Magaro Machines, Inc., Defendant has acted and
continues to act contrary to and in competition with Plaintiff's
interests by:
,
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a. Converting receipts from Plaintiff's amusement
machines for his own benefit;
b. Establishing his own amusement machine
enterprise in the market already occupied by plaintiff;
c. using the aforesaid converted receipts to
compete against plaintiff in the amusement machine
market;
d. using plaintiff's vehicle to compete against
plaintiff in the amusement machine market;
e. using confidential information, including
customer lists, obtained in his capacity as plaintiff's
board chairman, officer and employee, to divert existing
customers away from Plaintiff and to otherwise compete
against plaintiff in the amusement machine market; and
f. usurping corporate opportunities for his own
benefi to
34. It is believed and therefore averred that Defendant has
profited personally from the aforesaid breaches of his duty of
loyalty.
35. It is believed and therefore averred that Defendant's
breach of his duty of loyalty has damaged and continues to damage
Plaintiff by depriving it of revenues from its amusement machines,
by diminishing plaintiff's share of the amusement machine market
and by preventing plaintiff from profiting from new opportunities.
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WHEREFORE, plaintiff demands jUdgment against Defendant for:
A. An accounting of all receipts collected by
Defendant from Plaintiff's amusement machines;
B. An accounting of all amusement machine revenues
collected by Defendant either individually or through
Magaro Machines, Inc. or any other corporation or entity;
C. Damages in an amount exceeding the threshold
for compulsory arbitration under local rules, plus
punitive damages, pre-judgment interest, costs and
attorney fees;
D. A permanent injunction enjoining Defendant,
either individually or through Magaro Machines, Inc. or
any other corporation or entity, from engaging in the
purchase, placement and/or sale of video games, pool
tables, juke boxes and similar amusement machines within
a fifty-mile radius of Mechanicsburg, Cumberland County,
pennsylvania;
E. A permanent injunction restraining Defendant,
either individually or through Magaro Machines, Inc. or
any other corporation or entity, from communicating in
any mode with Plaintiff's existing customers; and
F. Such other relief as the Court deems
appropriate.
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COUNT I II
INTENTIONAL INTERFERENCE WITH CONTRACTUAL RELATIONS
36. The averments of the foregoing paragraphs 1 through 35
are incorporated herein by reference.
37. At all times relevant hereto, Ridge Run Tavern in
Elizabethtown, Pennsylvania, and the American Legion in Enola,
pennsylvania, have been Plaintiff's customers, i.e., Plaintiff has
I,
placed amusement machines in those establishments with an agreement
to share the receipts from said machines.
38. It is believed and therefore averred that Defendant,
individually and/or through Magaro Machines, Inc., has without
privilege or other lawful justification communicated with said
customers with the intent to interfere with the performance of the
contracts between Plaintiff and said customers and to induce said
customers to refrain from further business with Plaintiff.
39. It is believed and therefore averred that Defendant I s
communications with the aforesaid customers have caused Plaintiff
pecuniary damages by interfering with the performance of the
contracts between Plaintiff and said customers and by inducing said
customers to refrain from further business with Plaintiff.
40. It is believed and therefore averred that Defendant has
communicated or intends to communicate with additional existing
customers of Plaintiff with the intent to interfere with the
performance of the contracts between Plaintiff and said customers
and to induce said customers to refrain from further business with
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Plaintiff.
WHBRBFORB, Plaintiff demands jUdgment against Defendant fori
A. An account.ing of all amusement machine revenues
collected by Defendant either individually or through
Magaro Machines, Inc. or any other corporation or entity;
B. Damages in an amount exceeding the threshold
for compulsory arbitration under local rules, plus
punitive damages, pre-judgment interest, costs and
attorney fees;
C. A permanent injunction restraining Defendant,
either individually or through Magaro Machines, Inc. or
any other corporation or entity, from communicating in
any mode with Plaintiff's existing customers; and
D. Such other relief as the Court deems
appropriate.
COUNT IV
UNFAIR COMPETITION
41. The averments of the foregoing paragraphs 1 through 40
are incorporated herein by reference.
42. In his capacity as board member, officer and employee of
Plaintiff, Defendant learned the identity and location of
Plaintiff's customers and acquired other information relating to
Plaintiff's business relationships with said customers, all of
which information are trade secrets vital to the conduct of
Plaintiff's business.
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43. It is inequitable and unjust for Defendant to use the
aforesaid trade secrets to benefit himself at the prejudice of
Plaintiff.
44. It is believed and therefore averred that Defendant has
used the aforesaid trade secrets to benefit himself at the
prejudice of Plaintiff.
45. Plaintiff'S business relationships have been developed
over several decades through personal interaction between Decedent
and the customers.
46. Plaintiff's customers have come to identify plaintiff and
Decedent interchangeably.
47. Defendant's business operations and communications with
Plaintiff'S customers, both in Defendant's individual capacity and
in the name of Magaro Machines, Inc., is likely to cause confusion
among the customers as to the source of the amusement machines and
related services being provided to them.
48. It is inequitable and unjust for Defendant to use the
aforesaid confusion to benefit himself at the prejudice of
Plaintiff.
49. It is believed and therefore averred that Defendant has
used the aforesaid confusion to benefit himself at the prejudice of
Plaintiff.
WHEREFORE, Plaintiff demands jUdgment against Defendant for:
A. An accounting of all amusement machine revenues
collected by Defendant either individually or through
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Magaro Machines, Inc. or any other corporation or entitYI
B. Damages in an amount exceeding the threshold
for compulsory arbitration under local rules, plus
punitive damages, pre-judgment interest, costs and
attorney feesl
C. A permanent injunction restraining Defendant,
either individually or through Magaro Machines, Inc. or
any other corporation or entity, from communicating in
any mode with Plaintiff's existing customersl and
D. Such other relief as the Court deems
appropriate.
Respectfully submitted,
GATES & ASSOCIATES, P.C.
,~~@
Mark E. Halbruner, Esquire
Supreme Court I.D. #66737
1013 Mumma Road, Suite 100
Lemoyne, PA 17043
(717) 731-9600
(Attorneys for plaintiff)
DATED:
.Tn ",va -::J R
, 1998
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VERIFICATION
The foregoing pleading is based upon information which has
been gathered by my counsel in preparation of the lawsuit. The
language of the document is that of my counsel and is not my own.
I have read the document and to the extent that it is based upon
information which I have given to my counsel, it is true and
correct to the best of my knowledge, information and belief. To
the extent that the content of the document is that of my counsel,
I have relied upon my counsel in making this verification. This
statement and verification are made subject to the penalties of 18
Pa.C.S. !i4904 relating to unsworn falsification to authorities,
which provides that if I make knowingly false averments, I may be
subject to criminal penalties.
VARIETY MACHINES, INC.,
a pennsylvania corporation
PRESIDENT
Dated:
1-6,-
, 1998
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IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - EQUITY
VARIETY MACHINES, INC., a
Pennsylvania Corporation,
Plaintiff,
.
.
.
.
vs.
.
.
: NO. 98-100 CIVIL TERM 1998
DAVID W. MAGARO, JR.,
Defendant.
:
.
.
ANSWER TO COMPLAINT
AND NOW,
comes
David \~.
Magaro,
Jr.
(hereinafter
"Defendant") , by and through his counsel, Herbert Corky
Goldstein, Esquire, and makes the following statements in Answer
to the Plaintiff's complaint:
1. Admitted
2. Admitted
3. Admitted
4. Admitted
5. Admitted i
6. Admitted
7. Admitted
8. Admitted
9. Admitted
10. Admitted
11. Admitted
12. Admitted
13. Denied. In september of 1996 the Defendant, began driving
the 1995 Chevrolet Blazer.
Defendant was improperly barred
by the Plaintiff from the building housing the Plaintiff's
business operation, in which Defendant has a legal interest.
Defendant is to receive this building under his father's Will.
He is the co-beneficiary under the Will.
Until this Estate
is settled, Defendant has the absolute legal right to use this
automobile, as it is plaintiff who has intentionally prevented
Defendant from doing his work.
14. Denied. plaintiff does not pay Defendant's child support.
Child Support is paid out of Defendant's weekly salary.
Defendant is entitled to his weekly check from plaintiff, as
it was Plaintiff who improperly barred him from the building
and doing his work for Plaintiff.
Plaintiff's payment of
Defendant's medical insurance and vehicle insurance premiums
are properly paid, at least until this estate matter is legally
resolved.
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15.
Denied.
The
Defendant is without sufficient knowledge
form a belief as to this averment. Means
or information to
of proof thereof is within the exclusive possession of Plaintiff,
and strict proof is demanded. Defendant was never shown or
told of any legal basis for this lock-out of the Defendant from
the building for which he has a legal interest and claim.
16. Denied. Same answer as 15.
17. Denied. Bud Deckman and Tony Magaro also made many
collections of receipts.
18. Denied. Defendant was never told he was suspended, and
never received anything in writing. Plaintiff had the locks
changed on the building. Marie Magaro, allegedly acting on
behalf of Plaintiff, took the Defendant's key to the machine.$,
and changed the locks. Defendant was the victim of improper
actions taken by Marie Magaro, allegedly on behalf of the
Plaintiff.
19. Denied. There was no suspension ever stated or for that
matter, any legal procedure undertaken by Plaintiff in ousting
Defendant from the building and from being able to do his work
for Plaintiff. Again, Plaintiff does not pay Defendant's child
support.
20. Denied.
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15. Denied. The Defendant is without sufficient knowledge
or information to form a belief as to this averment. Means
of proof thereof is within the exclusive possession of Plaintiff,
and strict proof is demanded. Defendant was never shown or
told of any legal basis for this lock-out of the Defendant from
the building for which he has a legal interest and claim.
16. Denied. Same answer as 15.
17. Denied. Bud Deckman and Tony Magaro also made many
collections of receipts.
18. Denied. Defendant was never told he was suspended, and
never received anything in writing. Plaintiff had the locks
changed on the building. Marie Magaro, allegedly acting on
behalf of Plaintiff, took the Defendant's key to the machine.
Defendant was the victim of improper actions taken by Marie
Magaro, allegedly on behalf of the Plaintiff.
19. Denied. There was no suspension ever stated or for that
matter, any legal procedure undertaken by Plaintiff in ousting
Defendant from the building and from being able to do his work
for Plaintiff. Again, Plaintiff does not pay Defendant's child
support.
20. Denied.
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21. Denied. Strict proof is demanded of Plaintiff. However,
Tony Magaro did retain receipts from locations and in fact,
did collect receipts from the Central park Hotel, and retained
all of these receipts for his own use without accounting to
Plaintiff.
22. Denied. Defendant has no receipts belonging to Plaintiff.
Strict proof is demanded of Plaintiff of this allegation.
23. Denied. Defendant demands strict proof from Plaintiff
on this allegation.
24. Denied. Defendant never admitted converting approximately
$40,000.00. There was, however, a private discussion, that
Defendant had with Lowell Gates, Esquire regarding this subject.
This confidential discussion was between Defendant with attorney
Lowell Gates, who was understood to be the Estate I s attorney
and the attorney for Defendant. This was a privileged
conversation between a client and Lowell Gates, Esquire.
25. Denied. Defendant did not misappropriate any funds from
Plaintiff.
26. Denied.
27. Denied. Since Plaintiff has improperly denied Defendant
access to do his work with Plaintiff, Defendant has gone into
business for himself. Defendant has no verbal or written legal,
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contractual restraints against him going into business for
himself. Plaintiff made this unilateral decision to lock-out
Defendant from his work and from the bUilding in which he has
an interest in the building and business. Defendant has tried,
through his own efforts, and his attorney to resolve this
situation. Defendant was loyal to the Plaintiff until Plaintiff
improperly locked-out Defendant. He had an absolute legal right
from the day he was locked out of Plaintiff's business operations
to enter into business with someone else or start his own
business.
28. Denied. Plaintiff made the improper decision to lock-out
Defendant, and Plaintiff took away his "employee" status and
placed him into a different status. At that moment, he no longer
had a duty of loyalty to Plaintiff. Defendant had a legal right
to go into business for himself.
29. Admitted
30. Admitted
31. Admitted
32. Denied. The locations in which Defendant has placed
machines did not at that time have contracts with Plaintiff.
If Plaintiff is losing potential customers, it is their own
inabili ty to do business. Defendant does not now or at any
time conduct his business in an effort to destroy Plaintiff's
business.
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33a. Denied. Strict proof is demanded of this allegation.
33b. Denied. Plaintiff or no one else in this business have
exclusive control to any "market". Defendant has a legal right
to do business in any "market."
33c. Denied. Strict proof is demanded of this allegation.
33d. Denied. On September 25, 1996, the Board of Directors
of Variety Machines, Inc., the Plaintiff, held a special meeting.
Minutes of that meeting will be introduced when requested.
At this special meeting, it was decided that Defendant would
receive a vehicle to drive. Defendant is legally still an
officer, and the written notes from that meeting, give this
vehicle to the Defendant to "treat as if it were his own."
Since the day he was improperly ousted by the Plaintiff,
Defendant paid for all maintenance and repair of said truck.
33e. Denied. Defendant is not making use of any confidential
information. Defendant has received numerous calls from
potential customers to do business with them, as he is very
well liked by people. For example, as the Defendant's customer
Ridge Run, Defendant has known Sylvia for years, even before
he worked for the Plaintiff. Also Defendant and his band played
there for years. Defendant, in his proper search for customers
for his business, competes with at least three (3) other
competitors. In any case, it is known in this business who
has what clients. There is no secret among all the vendors.
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33f. Denied. The only person Defendant knows who is usurping
corporate opportunities is Marie Magaro, the Executrix of the
Estate. Marie Magaro is improperly attempting to convert
Defendant's interest in the business to herself. It is believed
the Executrix has been taking $300.00 a week from Plaintiff
without any legal authority to do so. Also, Marie Magaro is
improperly receiving a pay check for being named President.
This entire process and court action has been improperly
initiated by Marie Magaro, as the named Executrix to the Will,
and for the sole purpose to deprive Defendant of his one-half
(1/2) interest in the business.
34. Denied. Defendant has been locked-out by the Plaintiff,
and in fact was told he would be arrested if he even came on
the grounds. Defendant no way breached his duty of loyalty.
35. Denied. Again, Defendant breached no duty of loyalty.
Plaintiff solely caused the Defendant to not be able to work
for the Plaintiff. If anyone is damaging Plaintiff's business
and their projected revenues it is Tony Magaro and Marie Magaro.
Defendant is being improperly deprived of his right to work
for Plaintiff. When Plaintiff does not obtain future business,
Plaintiff need only look to Tony Magaro and Marie Magaro, as
their improper conduct by the slandering of David Magaro, holds
them up to questioning by customers. Their ugly and personal
attacks against the Defendant, only serves to make them appear
to customers as individuals they do not wish to become involved
with in business.
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35a. Denied. Plaintiff already has in their possession an
accounting of all receipts collected by the Defendant.
35b. Denied. Plaintiff has no legal authority to review revenues
collected by Defendant in his new business.
35c. Denied. Plaintiff through the Administratrix of the Estate,
Marie Magaro, is improperly using Estate monies for legal counsel
to carry out a personal pursui t of slander against Defendant,
and a personal effort by Marie Magaro to terminate his
substantial interest in the Estate of which she is
Administratrix, and to try to gain more out of the estate for
herself. She is using the estate money to pay legal fees to
reduce the inheritance of Defendant's father's estate.
35d. Denied. No injunction should be given to Plaintiff against
the Defendant or against Magaro Machines, as Defendant has the
legal right to enter into his own business, and conduct such
business without interference from Plaintiff and its agents.
Defendant never signed a non-compete clause.
35e. Denied. Defendant has the legal right to talk to or write
to anybody he wishes to communicate with. This is a free
country.
35f. Denied. Plaintiff is not entitled to any relief. If
anything, the Court should enjoin Plaintiff from using estate
funds to pay lawyers to conduct personal vendettas.
36. Denied.
37. Denied.
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38. Denied. Again, Defendant did not interfere with Plaintiff's
customers or with contracts that Plaintiff had with customers.
Customers may do business with anyone they wish. Defendant
has a legal right to look for business within this or any other
market. In fact, it is Plaintiff who is continuing to defame
Defendant to any and all potential clients or existing clients.
Defendant has not talked negatively about Plaintiff or its agents
to any customers, or potential customers. Many customers have
told the Defendant about ugly, vicious, and outrageous statements
made by Tony and Marie Magaro about the Defendant.
39. Denied. On the contrary, Tony told customers that Defendant
stole $500,000.00 from the Plaintiff. Marie told customers
that Defendant stole $600,000.00.
40. Denied. There are no plans to try and have customers break
contracts with the Plaintiff. In fact, Defendant turned down
one location because they had a contract with the Plaintiff.
40a. Denied. Plaintiff has no legal authority to review revenues
collected by Defendant in his new business.
41b. Denied. Plaintiff is not entitled to any monies by reason
of their totally false claims.
40c. Denied.
40d. Denied.
41. Denied
- 9 -
~
42. Denied.
In this business, Plaintiff as well as Defendant,
and at least three other companies know everyone else's
customers. There are no trade secrets. Plaintiff by the conduct
of their agents Marie and Tony Magaro, are destroying relations
with customers, not the Defendant.
43.
Denied.
Defendant is not using any trade secrets of
Plaintiff.
44.
Denied.
Defendant is not using any trade secrets of
Plaintiff.
45.
Denied.
Defendant has no knowledge of the truth of this
allegation.
46.
Denied.
Defendant has no knowledge of the truth of this
allegation.
47.
Denied.
Defendant makes it perfectly clear who he
represents. If there is any confusion, it is the fault of
Plaintiff.
48. Denied.
49a. Denied. For reasons already stated.
49b. Denied. For reasons already stated.
49c. Denied. For reasons already stated.
!
f:
~:
"
f
x
,
WHEREFORE, Defendant for all the above reasons, asks the
Court to Dismiss this Complaint.
Respectfully submitted,
~
HERBERT CORKY GOLD
204 state street
P. O. Box 10363
Harrisburg, PA 17105-0363
(717) 236-6491
I.D. II 7182
Attorney for Defendant
,
. ~;
- 11 -
VERIFICATION
I verify that the facts contained in the above pleading
are true and correct to the best of my knowledge, information
and belief. I understand that the facts herein are verified
subject to the penalties for unsworn falsification to authorities
under Crimes Code, Section 4904 (18 Pa.C.S.~4904).
....'
VARIETY MACHINES, INC., a
Pennsylvania Corporation,
Plaintiff,
: IN THE COURT OF COMMON PLEAS
: CUMBERLAND COUNTY: PENNSYLVANIA
: CIVIL ACTION - EQUITY
VS.
:
: NO. 98-100 G~ TERM 1998
DAVID W. MAGARO, JR.,
Defendant.
:
.
.
ANSWER TO REQUEST FOR PRELIMINARY INJUNCTION
AND NOW, comes Attorney Herbert Corky Goldstein,
counsel for the above named Defendant, David W. Magaro, Jr.
and answers Plaintiff's Motion For A Preliminary Injunction:
1. Admitted.
2. Admitted.
3. Admitted.
Attached hereto and marked Exhibit "A", and
incorporated herein by reference is the Defendant I s Answer to
Plaintiff's Complaint filed January 27th, 1998.
4. Admitted.
5. Denied.
Plaintiff's request for obtaining a preliminary
injunction should be dismissed as Plaintiff does not have any
legal authority by which Plaintiff may prevent Defendant from
working and earning a living, and Defendant has no contractural
bars to his working in a similar field in and around Harrisburg.
PA. Defendant clearly states that he is not affiliated with
the Plaintiff.
6. Denied. It is the Plaintiff, who improperly locked-out
and barred Defendant and prevented him from working and earning
a living. This entire matter is before the Courts now and this
request to obtain a Preliminary Inj unction against Defendant
is requested by Plaintiff to try and force Defendant to settle
this case before all the facts are brought forth.
7. Denied. Plaintiff has illegally forced the Defendant out
of a building in which Defendant has a legal interest. If
Plaintiff is losing customer contracts and their business is
decreasing r Plaintiff need only blame its own workers, as they
do not do their work.
8. Denied. The Defendant has a constitutional right to earn
a living and there is no contract, written or oral, preventing
Defendant from actively working and earning a living. There
has never been and is still the case, that Defendant never signed
a non-compete Contract.
9. Denied. Plaintiff has no legal authority to look at
Defendant's financial records or accounts, and has no legal
authority to tamper with his accounts in any way. Proof is
demanded to support their outrageous libelous statements.
- 2 -
WHEREFORE, Defendant respectfully requests that the
Court deny this Motion For A Preliminary Injunction, as the
reasons given by Plaintiff are not supported by any evidence
and, in fact, are false.
Respectfully submitted,
~:Ld
DATED )
l1:16'
.~
H RBERT CORKY GOL STEIN, ESQ.
204 state street
P. O. Box 10363
Harrisburg, PA 17105-0363
(717) 236-6491
1.0. 1/ 7182
Counsel for Defendant
- 3 -
VERIFICATION
The foregoing pleading is based upon information which
has been gathered by my counsel in preparation of the lawsuit.
The language of the document is that of my counsel and is not
my own. I have read the document and to the extent that it
is based upon information which I have given to my counsel,
it is true and correct to the best of my knowledge, information
and belief. To the extent that the content of the document
is that of my counsel, I have relied upon my counsel in making
this verification. This statement and verification are made
subject to the penalties of 18 Pa.C.S. 94904 relating to unsworn
falsification to authorities, which provides that if I make
knowingly false averments, I may be subject to criminal
penalties.
DAVID W. MAGARO, JR.
B~-
tDi'VXD
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,
I
Dated:
d I;)
, 1998
,
,
,
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- 4 -
, ~'!:.::'f t
vs.
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - EQUITY
NO. 98-100 CIVIL TERM 1998
VARIETY MACHINES, INC'r a
Pennsylvania Corporation,
Plaintiff,
DAVID W. MAGARO, JR.,
Defendant.
ANSWER TO COMPLAINT
AND NOW,
comes David W.
Magaro,
Jr.
(hereinafter
"Defendant"),
by and through his counsel, Herbert Corky
Goldstein, Esquire, and makes the following statements in Answer
to the Plaintiff's complaint:
1 . Admitted
2. Admitted
3. Admitted
4. Admitted
5. Admitted 0 "., 0
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6. Admitted -r:: :: ~ .... i+~::!J
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B. Admitted - " '.()
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9. Admitted ~ , ~..) ~jj
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10. Admitted
11. Admitted
12. Admitted
13. Denied. In September of 1996 the Defendant, began driving
the 1995 Chevrolet Blazer. Defendant was improperly barred
by the Plaintiff from the building housing the Plaintiff's
business operation, in which Defendant has a legal interest.
Defendant is to receive this building under his father's Will.
He is the co-beneficiary under the Will. Until this Estate
is settled, Defendant has the absolute legal right to use this
automobile, as it is Plaintiff who has intentionally prevented
Defendant from doing his work.
14. Denied. Plaintiff does not pay Defendant's child support.
Child Support is paid out of Defendant's weekly salary.
Defendant is entitled to his weekly check from Plaintiff, as
it was Plaintiff who improperly barred him from the building
and doing his work for Plaintiff. Plaintiff's payment of
Defendant's medical insurance and vehicle insurance premiums
are properly paid, at least until this estate matter is legally
resolved.
- 2 -
;,\
15. Denied. The Defendant is without sufficient knowledge
or information to form a belief as to this averment. Means
of proof thereof is within the exclusive possession of Plaintiff,
and strict proof is demanded. Defendant was never shown or
told of any legal basis for this lock-out of the Defendant from
the building for which he has a legal interest and claim.
16. Denied. Same answer as 15.
17. Denied. Bud Deckman and Tony Magaro also made many
collections of receipts.
1 B. Denied. Defendant was never told he was suspended, and
never received anything in writing. Plaintiff had the locks
changed on the building. Marie Magaro, allegedly acting on
behalf of Plaintiff, took the Defendant I s key to the machin~,
and changed the locks. Defendant was the victim of improper
actions taken by Marie Magaro, allegedly on behalf of the
Plaintiff.
19. Denied. There was no suspension ever stated or for that
matter, any legal procedure undertaken by Plaintiff in ousting
Defendant from the building and from being able to do his work
for Plaintiff. Again, Plaintiff does not pay Defendant's child
support.
20. Denied.
- 3 -
15. Denied. The Defendant is without sufficient knowledge
or information to form a belief as to this averment. Means
of proof thereof is within the exclusive possession of Plaintiff,
and strict proof is demanded. Defendant was never shown or
told of any legal basis for this lock-out of the Defendant from
the building for which he has a legal interest and claim.
16. Denied. Same answer as 15.
17. Denied. Bud Deckman and Tony Magaro also made many
collections of receipts.
18. Denied. Defendant was never told he was suspended, and
never received anything in writing. Plaintiff had the locks
changed on the building. Marie Magaro, allegedly acting on
behalf of Plaintiff, took the Defendant I s key to the machine.
Defendant was the victim of improper actions taken by Marie
Magaro, allegedly on behalf of the Plaintiff.
19. Denied. There was no suspension ever stated or for that
matter, any legal procedure undertaken by Plaintiff in ousting
Defendant from the building and from being able to do his work
for Plaintiff. Again, Plaintiff does not pay Defendant's child
support.
20. Denied.
21. Denied. Strict proof is demanded of Plaintiff. However,
Tony Magaro did retain receipts from locations and in fact,
did collect receipts from the Central park Hotel, and retained
all of these receipts for his own use without accounting to
Plaintiff.
22. Denied. Defendant has no receipts belonging to Plaintiff.
Strict proof is demanded of Plaintiff of this allegation.
23. Denied. Defendant demands strict proof from Plaintiff
on this allegation.
24. Denied. Defendant never admitted converting approximately
$40,000.00. There was, however, a private discussion, that
Defendant had with Lowell Gates, Esquire regarding this subject.
This confidential discussion was between Defendant with attor~~y
Lowell Gates, who was understood to be the Estate I s attorney
and the attorney for Defendant. This was a privileged
conversation between a client and Lowell Gates, Esquire.
25. Denied. Defendant did not misappropriate any funds from
Plaintiff.
26. Denied.
27. Denied. Since Plaintiff has improperly denied Defendant
access to do his work with Plaintiff, Defendant has gone into
business for himself. Defendant has no verbal or written legal,
- 4 -
contractual restraints against him going into business for
himself. Plaintiff made this unilateral decision to lock-out
Defendant from his work and from the building in which he has
an interest in the building and business. Defendant has tried,
through his own efforts, and his attorney to resolve this
situation. Defendant was loyal to the Plaintiff until Plaintiff
improperly locked-out Defendant. He had an absolute legal right
from the day he was locked out of Plaintiff's business operations
to enter into business with someone else or start his own
business.
28. Denied. Plaintiff made the improper decision to lock-out
Defendant, and Plaintiff took away his "employee" status and
placed him into a different status. At that moment, he no longer
had a duty of loyalty to Plaintiff. Defendant had a legal right
to go into business for himself.
29. Admitted
30. Admitted
31. Admitted
32. Denied. The locations in which Defendant has placed
machines did not at that time have contracts with Plaintiff.
If Plaintiff is losing potential customers, it is their own
inability to do business. Defendant does not now or at any
time conduct his business in an effort to destroy Plaintiff I s
business.
- 5 -
.:.,,;.w.~~-.
33a. Denied. strict proof is demanded of this allegation.
33b. Denied.
Plaintiff or no one else in this business have
exclusive control to any "market". Defendant has a legal right
to do business in any "market."
33c. Denied. Strict proof is demanded of this allegation.
33d.
Denied.
On September 25, 1996, the Board of Directors
of Variety Machines, Inc., the Plaintiff, held a special meeting.
Minutes of that meeting will be introduced when requested.
At this special meeting, it was decided that Defendant would
receive a vehicle to drive.
Defendant is legally still an
officer, and the written notes from that meeting, give this
vehicle to the Defendant to "treat as if it were his own."
Since the day he was improperly ousted by the Plaintiff,
Defendant paid for all maintenance and repair of said truck.
33e. Denied. Defendant is not making use of any confidential
information.
Defendant has received numerous calls from
potential customers to do business with them, as he is very
well liked by people. For example, as the Defendant's customer
Ridge Run, Defendant has known Sylvia for years, even before
!-:
he worked for the Plaintiff. Also Defendant and his band played
there for years. Defendant, in his proper search for customers
for his business, competes with at least three (3) other
1OJ.,
';.
competitors.
In any case, it is known in this business who
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has what clients. There is no secret among all the vendors.
- 6 -
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33f. Denied. The only person Defendant knows who is usurping
corporate opportunities is Marie Magaro, the Executrix of the
Estate. Marie Magaro is improperly attempting to convert
Defendant's interest in the business to herself. It is believed
the Executrix has been taking $300.00 a week from Plaintiff
without any legal authority to do so. Also, Marie Magaro is
improperly receiving a pay check for being named President.
This entire process and court action has been improperly
initiated by Marie Magaro, as the named Executrix to the Will,
and for the sole purpose to deprive Defendant of his one-half
(1/2) interest in the business.
34. Denied. Defendant has been locked-out by the Plaintiff,
and in fact was told he would be arrested if he even came on
the grounds. Defendant no way breached his duty of loyalty.
35. Denied. Again, Defendant breached no duty of loyalty.
Plaintiff solely caused the Defendant to not be able to work
for the Plaintiff. If anyone is damaging Plaintiff's business
and their projected revenues it is Tony Magaro and Marie Magaro.
Defendant is being improperly deprived of his right to work
for Plaintiff. When Plaintiff does not obtain future business,
Plaintiff need only look to Tony Magaro and Marie Magaro, as
their improper conduct by the slandering of David Magaro, holds
them up to questioning by customers. Their ugly and personal
attacks against the Defendant, only serves to make them appear
to customers as individuals they do not wish to become involved
with in business.
- 7 -
35a. Denied. Plaintiff already has in their possession an
accounting of all receipts collected by the Defendant.
35b. Denied. Plaintiff has no legal authority to review revenues
collected by Defendant in his new business.
35c. Denied. Plaintiff through the Administratrix of the Estate,
Marie Magaro, is improperly using Estate monies for legal counsel
to carry out a personal pursuit of slander against Defendant,
and a personal effort by Marie Magaro to terminate his
substantial interest in the Estate of which she is
Administratrix, and to try to gain more out of the estate for
herself. She is using the estate money to pay legal fees to
reduce the inheritance of Defendant's father's estate.
35d. Denied. No injunction should be given to Plaintiff against
the Defendant or against Magaro Machines, as Defendant has the
legal right to enter into his own business, and conduct such
business without interference from Plaintiff and its agents.
Defendant never signed a non-compete clause.
35e. Denied. Defendant has the legal right to talk to or write
to anybody he wishes to communicate with. This is a free
country.
35f. Denied. Plaintiff is not entitled to any relief. If
anything, the Court should enjoin Plaintiff from using estate
funds to pay lawyers to conduct personal vendettas.
36. Denied.
37. Denied.
- 8 -
38. Denied. Again, Defendant did not interfere with Plaintiff's
customers or with contracts that Plaintiff had with customers.
Customers may do business with anyone they wish. Defendant
has a legal right to look for business within this or any other
market. In fact, it is Plaintiff who is continuing to defame
Defendant to any and all potential clients or existing clients.
Defendant has not talked negatively about Plaintiff or its agents
to any customers, or potential customers. Many customers have
told the Defendant about ugly. vicious, and outrageous statements
made by Tony and Marie Magaro about the Defendant.
39. Denied. On the contrary, Tony told customers that Defendant
stole $500,000.00 from the Plaintiff. Marie told customers
that Defendant stole $600,000.00.
40. Denied. There are no plans to try and have customers break
contracts with the Plaintiff. In fact, Defendant turned down
one location because they had a contract with the Plaintiff.
40a. Denied. Plaintiff has no legal authority to review revenues
collected by Defendant in his new business.
41b. Denied. Plaintiff is not entitled to any monies by reason
of their totally false claims.
40c. Denied.
40d. Denied.
41. Denied
- 9 -
:{
42. Denied. In this business, Plaintiff as well as Defendant,
and at least three other companies know everyone else's
customers. There are no trade secrets. Plaintiff by the conduct
of their agents Marie and Tony Magaro, are destroying relations
with customers, not the Defendant.
43. Denied. Defendant is not using any trade secrets of
Plaintiff.
44. Denied. Defendant is not using any trade secrets of
Plaintiff.
45. Denied. Defendant has no knowledge of the truth of this
allegation.
46. Denied. Defendant has no knowledge of the truth of this
allegation,
47. Denied. Defendant makes it perfectly clear who he
~
represents. If there is any confusion, it is the fault of
Plaintiff.
48. Denied.
49a. Denied. For reasons already stated.
49b. Denied. For reasons already stated.
49c. Denied. For reasons already stated.
WHEREFORE, Defendant for all the above reasons, asks the
Court to Dismiss this Complaint.
Respectfully submitted,
~
HERBERT CORKY GOLD IN, ESQ.
204 state street
P. O. Box 10363
Harrisburg, PA 17105-0363
(717) 236-6491
I.D. II 7182
Attorney for Defendant
- 11 -
SIlERt FT' S HETUHtl - HEGULAR
CASE NOI 1998-00100 P ~
COMMONWEALTIl Or PENNSYLVANIAl
COUNTY OF CUMBERLAND
VARIETY MACHINES INC
VS,
MAGARO DAVID W JR
~ Sheriff or Deputy Sheriff of
being duly sworn according
EQUITY WaS served
MICHAEL BARRICK
CUMBERLAND County, Pennsylvania, who
to law, says. the within COMPLAINT -
upon MAGARO DAVID W JR
defendant, at 942:00 HOURS. on the 13th day of January
1998 at 169 WILLOW MILL PARK ROAD
MECHANICSBURG, PA 17055
the
handing to DAVID W.
of the COMPLAINT-
,CUMBERLAND
MAGARO JR.
EQUITY
County, Pennsylvania, by
a true and attested copy
together with NOTICE
and at the same time directing His attention to the contents thereof.
Sheriff's Costs:
Docketing
Service
Affidavit
Surcharge
So ansrJe ~"'/1_/ ~./ .
~~~~~"'-';_A
'7 .~'""""
,
18.00
6.20
. 00
2.00
$<::1:>.":'1/)
R. I homas l\l~ne, ::;her~.t1
"TE' "G "'GC"TE' ~
01/14/~~98 ~~ _'
epu y ~
Sworn and subscribed to before me
this /<I ~ day ofq....... "r
19 ljY A.D.
q.....u... O. 'nv-liv' ~,
-r I-'rmonotary
..-......
VARIETY MACHINES, INC"
A Pennsylvania Corporation,
PLAINTIFF
V,
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
DAVID W, MAGARO, JR"
DEFENDANT
98-0100 EQUITY TERM
ORDER OF COURT
AND NOW, this 27th day of January, 1998, a hearing on the motion of plaintiff
for a preliminary Injunction shall be held in Courtroom Number 2, Cumberland County
Courthouse, Carlisle, Pennsylvania, at 8:45 a,m" Thursday, February 5, 1998,
Mark E. Halbruner, Esquire
For Plaintiff
Ce-f~ ~L f/.2E /1fI '
.81',
David W. Magaro, Jr,
169 Willow Mill Park Road
Mechanlcsburg, PA 17055
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.
vs.
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - EQUITY
~~IA\{-I
NO. 98-100,0 ~XLITERM
VARIETY MACHINES, INC., a
Pennsylvania corporation,
Plaintiff,
DAVID W. MAGARO, JR.,
Defendant.
ORDER
AND NOW, this
day of
1998, upon
consideration of the foregoing Motion for preliminary Injunction,
it is hereby ordered as follows:
A. Until further order from this court, David W. Magaro, Jr.
(hereinafter "Defendant") is enjoined from engaging, either
individually or through any agent, corporation or other entity, in
the purchase, placement and/or sale of video games, pool tables,
juke boxes and similar amusement machines within a fifty-mile
radius of Mechanicsburg, Cumberland County, pennsylvania;
B. Until further order from this Court, Defendant is
restrained from communicating in any mode, either individually or
through any agent, corporation or other entity, with Plaintiff's
"
existing customers;
C. Until further order from this Court, Defendant is
prohibited from spending, transferring, conveying or otherwise
maneuvering his financial accounts other than as necessary for
reasonable living expenses; and
D. Defendant is directed to appear at a hearing to be held
at the Cumberland County Courthouse, Carlisle, pennsylvania, in
.4.'
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VARIETY MACHINES, INC., a
Pennsylvania corporation,
Plaintiff,
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PBNNSYLVANIA
CIVIL ACTION - EQUITY
~(}u.:\~~1
NO. 98-100 ~TERM
VB.
DAVID W. MAGARO, JR.,
Defendant.
MOTION FOR PRELIMINARY INJUNCTION
AND NOW I
comes Variety Machines,
Inc.
(hereinafter
"Plaintiff"), by and through its counsel, Gates & Asscciates, P.C.,
and makes the following motion:
1. Plaintiff is a pennsylvania business corporation having
its principal offices at 116 East Allen Street, Mechanicsburg,
Cumberland County, pennsylvania 17055, and doing business under the
registered fictitious name "Variety Amusements".
2. David W. Magaro, Jr. (hereinafter "Defendant") is an
adult individual believed to be residing at 169 willow Mill Park
Road, Mechanicsburg (Silver Spring Township), Cumberland County,
pennsylvania 17055.
3. On January 8, 1998, Plaintiff commenced the above-
captioned action against Defendant by filing a complaint containing
four counts, to wit: conversion, breach of duty of loyalty,
intentional interference with contractual relations and unfair
competition. A copy of the complaint is attached hereto as Exhibit
"A" and incorporated herein by reference.
4. The complaint was served on January 13, 1998.
S. The complaint requests, inter alia, monetary damages and
a permanent injunction (a) enjoining Defendant, either indivi~uallY
or through any corporation or other entity, from engaging in the
purchase, placement and/or sale of video games, pool tables, juke
boxes and similar amusement machines within a fifty-mile radius of
Mechanicsburg, Cumberland County, Pennsylvania, and (b) restraining
Defendant, either individually or through any corporation or other
entity, from communicating in any mode with Plaintiff's existing
customers.
6. It is believed and therefore averred that Defendant's
wrongful acts, as more fUlly described in the complaint, continue
through the present and will continue throughout the pendency of
this action.
7. If Defendant is permitted to continue his wrongful acts
throughout the pendency of this action, Plaintiff will suffer
irreparable harm to its business relationships that cannot be
adequately compensated through an award of monetary damages.
B. Immediate relief is necessary to restore the parties to
the status quo as it existed prior to the commencement of
Defendant's wrongful acts.
9. It is believed and therefore averred that Defendant will
spend, transfer, conveyor otherwise maneuver his financial
accounts in order to conceal the amount and location of funds he
converted from Plaintiff and/or collected from his wrongful acts.
2
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10. Immediate reUe!: IH nOCOHHllrY \;0 proven\; Defendant from
dissipating and/or concealing the fruItH of hiH wrongful acts.
WHEREFORE, Plaintiff reHpectfully requests that the Court
enter an order as follows:
A. Enjoining Defendant, either individually or through any
agent, corporation or other entity, from engaging in the purchase,
placement and/or sale of video games, pool tables, juke boxes and
similar amusement machines within a fifty-mile radius of
Mechanicsburg, Cumberland County, pennsylvania;
B. Restraining Defendant, either individually or through any
agent, corporation or other entity, from communicating in any mode
with Plaintiff's existing customers;
C. prOhibiting Defendant from spending, tranSferring,
conveying or otherwise maneuvering his financial accounts other
than as necessary for reasonable living expenses; and
~
D. Directing Defendant to appear at a hearing and show cause
why the foregoing injunctive relief should not be continued
throughout the pendency of this action.
RespectfUlly submitted,
GATES & ASSOCIATES, P.C.
~,.A'{. 7k.///
Mark E. Halbru~ire
Supreme Court I.D. #66737
1013 Mumma Road, Suite 100
Lemoyne, PA 17043
(717) 731-9600
(Attorneys for Plaintiff)
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DATED: January 22, 1998
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VERIFICATION
The foregoing pload1ng 1s based upon information wh1ch has
been gathered by my counsel in preparation of the lawsuit. The
language of the document is that of my counsel and is not my own.
I have read the document and to the extent that it is based upon
information which I have given to my counsel, it is true and
correct to the best of my knowledge, information and belief. To
the extent that the content of the document is that of my counsel,
I have r~lied upon my counsel in making this verification. This
statement and verification are made subject to the penalties of 18
Pa.C.S. ~4904 relating to unsworn falsification to authorities,
which provides that if I make knowingly false averments, I may be
subject to criminal penalties.
VARIETY MACHINES, INC..
a Pennsylvania corporation
BY: ~'J ?rt~
MAR.fE K. MAGARO, PRESIDENT
,
j
Dated: 1-'"2..2
, 1998
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EXHIBIT
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VARIETY MACHINES, INC., a
Pennsylvania corporation,
Plaintiff,
I IN THE COURT OF COMMON PLEAS
I CUMBERLAND COUNTY, PENNSYLVANIA
I CIVIL ACTION . EQUITY
I
I NO. 9P-ID() CIVIL TERM 1998
I
:
VS.
DAVID w. MAGARO, JR.,
Defendant.
NOTICE ~
You have been sued in court. If you wish t d against
the claims set forth in the fOllowing pages, you mu action
within twenty (20) days after this complaint and notice served,
by entering a written appearance personally or by at orney 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 plaintiff. You may lose money or property or
other rights important to you.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU 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.
Cumberland County Bar Association
2 Liberty Avenue
Carlisle, PA 17013
(717) 249-3166
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VARIETY MACHINES, INC., a
Pennsylvania oorporation,
Plaintiff,
I
I
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I
I
I
I
:
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION . EQUITY
VB.
NO.
CIVIL TERM 1998
DAVID W. MAGARO, JR.,
Defendant.
AND NOW,
~LAINT
comes Variety Machines,
Inc.
(hereinafter
"Plaintiff"), by and through its counsel, Gates & Associates, P.C.,
and makes the fOllowing complaint:
1. Plaintiff is a Pennsylvania business corporation having
its principal offices at 116 East Allen Street, Mechanicsburg,
Cumberland County, Pennsylvania 17055, and doing business under the
registered fictitious name "Variety Amusements".
2. For over thirty-six years, Plaintiff has engaged in the
purchase, placement and sale of coin-operated video games, pool
tables, juke boxes and similar amusement machines in central
Pennsylvania.
3. Plaintiff places its amusement machines in restaurants,
taverns and other commercial enterprises under an agreement that it
will share the machine receipts with the host enterprise.
4. The maj ori ty of Plaintiff I s revenues are derived from
receipts collected from its amusement machines.
5. At the time of his death on October 10, 1995, David W.
Magaro (hereinafter "Decedent") was Plaintiff's president and sole
shareholder.
6. Decedent's will, whIch was admitted to probate by the
Cumberland County Register of Wills on November 9, 1995, directs
that Decedent's interest in Plaintiff be distributed in equal
shares to his sons, David W. Magaro, Jr. (hereinafter "Defendant")
and Antonio W. Magaro.
7. Decedent's interest in Plaintiff has not yet been
distributed, and title to said interest is currently held by
Decedent's surviving spouse, Marie K. Magaro, in her capacity as
administratrix c.t.a. of Decedent's estate.
8. Defendant is an adult individual believed to be residing
at 169 Willow Mill Park Road, Mechanicsburg (Silver spring
Township), Cumberland county, Pennsylvania 17055.
9. At the time of Decedent's death, both Defendant and
Antonio Magaro were employed by Plaintiff.
10. At the time of Decedent's death, Plaintiff had
approximately 550 amusement machines placed in approximately 100
host enterprises.
11. On or about December 1, 1995, Defendant was elected a
member and chairman of Plaintiff's board of directors.
12. On or about December 1, 1995, Defendant was elected
Plaintiff's president and secretary.
13. From approximately October, 1995 through the present,
Defendant has enjoyed the possession and use of Plaintiff's 1995
Chevrolet Blazer vehicle.
2
14. From the commencement of Defendant's employment throuqh
the present, Plaintiff has paid Defendant a weekly salary, and
Plaintiff has paid Defendant's weekly child support obliqation,
medical insurance premium and vehicle insurance premium.
15. On or about September 8, 1997, Defendant was removed as
a member and chairman of Plaintiff's board of directors.
16. On or about September 8, 1997, Defendant was removed as
Plaintiff's president and secretary, and Defendant was elected
Plaintiff's vice-president.
17. From approximately October, 1995, until approximately
September 8, 1997, Defendant exclusively handled the collection of
receipts from Plaintiff's amusement machines.
18. On or about October 1, 1997, Defendant was suspended from
his duties as Plaintiff's employee.
19. Despite his suspension, Defendant has continued to
receive his weekly salary from plaintiff, he has retained the
possession and use of Plaintiff's vehicle, and Plaintiff has
continued to pay Defendant's weekly child support obligations and
medical and vehicle insurance premiums.
COUNT I
CONVERSION
20. The averments of the foregoing paragraphs 1 through 19
are incorporated herein by reference.
21. Plaintiff believes and therefore avers that from
approximately October, 1995, through his suspension, Defendant
3
seized receipts from Plaintiff's amusement machinos and retained
the receipts for his own usa without accountinQ to Plaintiff.
22. Plaint.iff has an immediate right to the receipto
contained within its amusement machines.
23. Defendant converted Plaintiff's property by interfering
with Plaintiff's right to possession of receipts from its amusement
machines and by fraudulently and intentionally asserting control
over said receipts without lawful justification.
24. Defendant has admitted to converting approximately
$40,000.00 in receipts from Plaintiff's amusement machines.
25. It is believed and therefore averred that the amount of
,
receipts converted by Defendant is substantially greater than that
which he admitted.
WHEREFORE, Plaintiff demands judgment against Defendant for
damages in an amount exceeding the threshold for compulsory
arbitration under local rules, plus punitive damages, pre-judgment
interest, costs, attorney fees and such other relief as the Court
deems appropriate.
!
COUNT II
BREACH OF DUTY OF LOYALTY
,
I
II
11
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I
26. The averments of the foregoing paragraphS 1 through 25
are incorporated herein by reference.
27. As Plaintiff's board chairman, officer and employee,
Defendant owed a duty of loyalty to Plaintiff.
,
I
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28. As Plaintiff's employee, Defendant owes a duty of loyalty
to Plaintiff.
29. It is believed and therefore averred that on or about
December 1, 1997, Defendant organized Magaro Machines, Inc. as a
pennsylvania business corporation with its registered address at
169 Willow Mill Park Road, Mechanicsburg, Cumberland County,
Pennsylvania 17055.
30. It is believed and therefore averred that Defendant is
the president and sole shareholder of Magaro Machines, Inc.
31. It is believed and therefore averred that, individually
and/or through Magaro Machines, Inc., Defendant is engaged in the
purchase, placement and sale of coin-operated video games, pool
tables, jUke boxes and similar amusement machines in central
pennsylvania.
32. It is believed and therefore averred that, individually
and/or through Magaro Machines, Inc., Defendant has contacted
Plaintiff I s existing customers with the intent to destroy the
contractual relationship between Plaintiff and said customers and
with the intent to establish a contractual relationship between
said customers and himself and/or Magaro Machines, Inc.
33. It is believed and therefore averred that, individually
and/or through Magaro Machines, Inc., Defendant has acted and
continues to act contrary to and in competition with Plaintiff's
interests by:
5
a. Converting receipts from Plaintiff's alnusement
machines for his own benefit;
b. Establishing his own amusement machine
enterprise in the market already occupied by plaintiff;
c. Using the aforesaid converted receipts to
compete against Plaintiff in the amusement machine
market;
d. Using Plaintiff's vehicle to compete against
Plaintiff in the amusement machine market;
e. Using confidential information, including
customer lists, obtained in his capacity as Plaintiff's
board chairman, officer and employee, to divert existing
customers away from Plaintiff and to otherwise compete
against Plaintiff in the amusement machine market; and
f. Usurping corporate opportunities for his own
benefit.
34. It is believed and therefore averred that Defendant has
profited personally from the aforesaid breaches of his duty of
loyalty.
35. It is believed and therefore averred that Defendant's
breach of his duty of loyalty has damaged and continues to damage
Plaintiff by depriving it of revenues from its amusement machines,
by diminishing Plaintiff's share of the amusement machine market
and by preventing Plaintiff from profiting from new opportunities.
6
WHEREFORE, Plaintiff demands judgment against Defendant for:
A. An accounting of all receipts collectad by
Defendant from Plaintiff's amusement machines;
B. An accounting of all amusement machine revenues
collected by Defendant either individually or through
Magaro Machines, Inc. or any other corporation or entity;
C. Damages in an amount exceeding the threshold
for compulsory arbitration under local rules, plus
punitive damages, pre-judgment interest, costs and
attorney fees;
D. A permanent injunction enjoining Defendant,
either individually or through Magaro Machines, Inc. or
any other corporation or entity, from engaging in the
purchase, placement and/or sale of video games, pool
tables, juke boxes and similar amusement machines within
a fifty-mile radius of Mechanicsburg, Cumberland County,
Pennsylvania;
E. A permanent injunction restraining Defendant,
either individually or through Magaro Machines, Inc. or
any other corporation or entity, from communicating in
any mode with Plaintiff's existing customers; and
F. Such other relief as the Court deems
appropriate.
7
COUNT III
INTENTIONAL INTER~ERENCE WITH CONTRACTUAL RELATIONS
36. The averments of the foregoing paragraphs 1 through 35
are incorporated herein by reference.
37. At all times relevant hereto, Ridge Run Tavern in
Elizabethtown, Pennsylvania, and the American Legion ,in Enola,
Pennsylvania, have been Plaintiff's customers, i.e., Plaintiff has
placed amusement machines in those establishments with an agreement
to share the receipts from said machines.
38. It is believed and therefore averred that Defendant,
individually and/or through Magaro Machines, Inc., has without
privilege or other lawful justification communicated with said
customers with the intent to interfere with the performance of the
contracts between Plaintiff and said customers and to induce said
customers to refrain from further business with Plaintiff.
39. It is believed and therefore averred that Defendant's
communications with the aforesaid customers have caused plaintiff
pecuniary damages by interfering with the performance of the
contracts between Plaintiff and said customers and by inducing said
customers to refrain from further business with Plaintiff.
40. It is believed and therefore averred that Defendant has
communicated or intends to communicate with additional existing
customers of Plaintiff with the intent to interfere with the
":\
performance of the contracts between Plaintiff and said customers
and to induce said customers to refrain from further business with
8
I
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"
Plaintiff.
WHEREFORE, Plaintiff demands jUdgment against Defendant for:
A. An accounting of all amusement machine revenues
collected by Defendant either individually or through
Magaro Machines, Inc. or any other corporation or entity;
B. Damages in an amount exceeding the threshold
for compulsory arbitration under local rules, plus
punitive damages, pre-judgment interest, costs and
attorney fees;
C. A permanent injunction restraining Defendant,
either individually or through Magaro Machines, Inc. or
any other corporation or entity, from communicating in
any mode with Plaintiff'S existing customers; and
D.
Such other relief as
the Court deems
appropriate.
COUNT IV
UNFAIR COMPETITION
41. The averments of the foregoing paragraphs 1 through 40
are incorporated herein by reference.
42. In his capacity as board member, officer and employee of
Plaintiff, Defendant learned the identity and location of
Plaintiff's customers and acquired other information relating to
Plaintiff's business relationships with said customers, all of
which information are trade secrets vital to the conduct of
Plaintiff's business.
9
43. It is inequitable and unjust for Defendant to use the
aforesaid trade secrets to benefit himself at the prejudice of
Plaintiff.
44. It is believed and therefore averred that Defendant has
used the aforesaid trade secrets to benefit himself at the
prejudice of Plaintiff.
45. plaintiff's business relationships have been developed
over several decades through personal interaction between Decedent
and the customers.
46. plaintiff's customers have come to identify Plaintiff and
Decedent interchangeably.
47. Defendant's business operations and communications with
Plaintiff's customers, both in Defendant's individual capacity and
in the name of Magaro Machines, Inc., is likely to cause confusion
among the customers as to the source of the amusement machines and
related services being provided to them.
48. It is inequitable and unjust for Defendant to use the
aforesaid confusion to benefit himself at the prejudice of
Plaintiff.
49. It is believed and therefore averred that Defendant has
used the aforesaid confusion to benefit himself at the prejudice of
Plaintiff.
WHEREFORE, Plaintiff demands jUdgment against Defendant for:
A. An accounting of all amusement machine revenues
collected by Defendant either individually or through
10
Magaro Machines, Inc. or any other corporation or entity;
B. Damages in an amount exceeding the threshold
for compulsory arbitration under local rules, plus
punitive damages, pre-judgment interest, costs and
attorney fees;
C. A permanent injunction restraining Defendant,
either individually or through Magaro Machines, Inc. or
any other corporation or entity, from communicating in
any mode with Plaintiff's existing customers; and
D. Such other relief as the Court deems
appropriate.
Respectfully submitted,
GATES & ASSOCIATES, P.C.
n~f ~ {f!J
Mark E. Halbruner, Esquire
Supreme Court I.D. #66737
1013 Mumma Road, Suite 100
Lemoyne, PA 17043
(717) 731-9600
(Attorneys for Plaintiff)
DATED:
.T", oI"IlXt ":j R
, 1998
11
I,
of.
"
VBRIFICATION
The foregoing pleading is based upon information which has
been gathered by my counsel in preparation of the lawsuit. The
language of the document is that of my counsel and is not my own.
I have read the document and to the extent that it is based upon
information which I have given to my counsel, it is true and
correct to the best of my knowledge, information and belief. To
the extent that the content of the document is that of my counsel,
I have relied upon my counsel in making this verification. This
statement and verification are made subject to the penalties of 18
Pa.C.S. 54904 relating to unsworn falsification to authorities,
which provides that if I make knowingly false averments, I may be
subject to criminal penalties.
VARIETY MACHINES, INC..
a pennsylvania corporation
PRESIDENT
Dated:
1-10-
, 1998
"
.'
.
VARIETY MACHINES, INC., a
Pennsylvania corporation,
Plaintiff,
I IN THE COURT OF COMMON PLEAS
I CUMBERLAND COUNTY, PENNSYLVANIA
I CIVIL ACTION - EQUITY
:
I NO. 98-100 CIVIL TERM
:
vs.
DAVID W. MAGARO, JR.,
Defendant.
STIPULATION
AND NOW,
comes Variety Machines,
Inc.
(hereinafter
"Plaintiff"), by and through its counsel, Gates & Associates, P.C.,
and David W. Magaro, Jr. (hereinafter "Defendant"), by and through
his counsel, Herbert Corky Goldstein, Esquire, and stipulate to the
fOllowing facts:
1. Plaintiff is a pennsylvania business corporation having
its principal offices at 116 East Allen Street, Mechanicsburg,
Cumberland County, Pennsylvania 17055, and doing business under the
registered fictitious name "Variety Amusements".
2. Defendant is an adult individual residing at 169 Willow
Mill Park Road, Mechanicsburg (Silver Spring Township), Cumberland
County, Pennsylvania 17055.
3. For over thirty-six years, Plaintiff has engaged in the
purchase, placement and sale of coin-operated video games, pool
tables, juke boxes and similar amusement machines in central
Pennsylvania.
4. Plaintiff places its amusement machines in restaurants,
taverns and other conunercial enterprises under an agreement that it
will share the machine receipts with the host enterprise.
NTIFF'S"" '
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5. The majority of Plaintiff's revenues are derived from
receipts collected from its amusement machines.
6. At the time of his death on October 10, 1995, David W.
Magaro (hereinafter "Decedent") was Plaintiff's president and sole
shareholder.
7. Decedent's will, which was admitted to probate by the
Cumberland County Register of Wills on November 9, 1995, directs
that Decedent's interest in Plaintiff be distributed in equal
shares to his sons, Defendant and Antonio W. Magaro.
8. Decedent's interest in Plaintiff has not yet been
distributed, and title to said interest is currently held by
Decedent's surviving spouse, Marie K. Magaro, in her capacity as
administratrix c.t.a. of Decedent's estate.
9. At the time of Decedent's death, both Defendant and
Antonio Magaro were employed by Plaintiff.
10. At the time of Decedent's death, Plaintiff had
,
approximately 550 amusement machines placed in approximately 100
host enterprises.
11. On or about December 1, 1997, Defendant organized Magaro
Machines, Inc. as a Pennsylvania business corporation with its
registered address at 169 Willow Mill Park Road, Mechanicsburg,
Cumberland County, Pennsylvania 17055.
12. Defendant is the president and sole shareholder of Magaro
Machines, Inc.
2
.
13. Individually and/or through Magaro Machines, Inc.,
Defendant is engaged in the purchase, placement and sale of coin-
operated video games, pool tables, juke boxes and similar amusement
machines in central pennsylvania.
Respectfully submitted,
GATES & ASSOCIATES, P.C.
BY: ~h J~ %~
Mark E.~~lbruner, Esquire
1013 Mumma Road, Suite 100
Lemoyne, PA 17043
(Attorneys for plaintiff)
DATED: '2..- 1)
,,1998
;i
s ein, Esquire
t COrky
204 State Stre
P.O. Box 10363
Harrisburg, PA 17105-0363
(Attorney for Defendant)
,'i ~ j~- qf , 1998
DATED:
3
VARIETY MACHINES, INC"
A Pennsylvania Corporation,
PlJ\INTIFF
V.
IN THE COURT OF COMMON PLEAS OF
CUMBERlJ\ND COUNTY, PENNSYLVANIA
DAVID W. MAGARO, JR"
DEFENDANT
98-0100 EQUITY TERM
ORDER OF COURl
AND NOW, this 9th day of February, 1998, following a hearing on the merits,
and finding that (1) defendant, David W, Magaro, Jr., Is not now or ever has been an
owner of plaintiff, Variety Machines, Inc" (2) defendant has been frozen out from any
position of fiduciary responsibility with respect to plaintiff, (3) defendant Is now an at-
will employee of plaintiff, (4) plaintiff has suspended defendant but is paying his
salary at Its discretion, and (5) there Is not now or ever has been any employment
contract between plaintiff and defendant; therefore, finding no basis for the entry of a
preliminary Injunction to prohibit defendant from setting up his own business and
competing against plaintiff, IT IS ORDERED that the petition by plaintiff for a
preliminary Injunction, IS DENIED.
Mark E. Halbruner, Esquire
For Plaintiff ("..~.v ~L :4)10/ ~ 8,
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Herbert Corky Goldstein, Esquire
For Defendant :saa
FILED-OFACE
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VARIETY MACHINES, INC., a
Pennlylvanla corporation,
Plaintiff,
: IN THE COURT OF COMMON PLEAS
: CUMBERLAND COUNTY, PENNSYLVANIA
: CIVIL ACTION - EQUITY
NO. 98-100 CIVIL TERM E~u"('1
VI.
DAVID W. MAGARO, JR.,
Defendant.
PRAECIPE TO DISCONTINUE
To: Prothonotary, Cumberland County Court of Common Pleas
Please mark the above-captioned case settled, discontinued and satisfied,
Gates & Associates, P,C,
~ f tiB2
By:J10 C. --
Mark E, Halbruner
1013 Mumma Road, Suite 100
Lemoyne, PA 17043
(717)731-9600
(Attorneys for Plaintiff)
Date: May 18, 2000
-." .
, '''~,.....' .
. ..
CERTIFICATE OF SERVICE
I, Mark E, Halbruner, Esquire, of the law firm of Gates & Associates, P.C" hereby certifY that
on this date I served the foregoing document by first.class U.S, mail to the following:
Herbert Corky Goldstein, Esq,
204 State Street
P,O. BOl( 10363
Harrisburg, PA 17105-0363
(Attorney for Defendant)
GATES & ASSOCIATES, P.C,
BY:
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Mark E. Halbruner, Esquire
Sup, Ct. I.D, #66737
1013 Mumma Road, Suite 100
Lemoyne, P A 17043
(717)73 \.9600
(Attorneys for Plaintiff)
Dated: Mty 18, 2000