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HomeMy WebLinkAbout01-03216 , --- ~, -~I:' '" > " ,I " PHANTOM COMMUNICATION: IN THE COURT OF COMMON PLEAS OF SYSTEMS INc, : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v. : NO. 01- 3;I/{o .trud! !e.'C,,^, CIVIL ACTION RUSSELL J. LEEDY, Individually: and t/ d/b/ a NIGHT FEVER ENTERTAINMENT, Defendant : IN EQUITY NOTICE TO DEFEND You have been sued in court. If you wish to defend against the clairns 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 clairns 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. Court Administrator 4th Floor, Cumberland County Courthouse Carlisle, P A 17013 240-6200 SAIDIS, SHUFF, FLOWER & LINDSAY SAIDIS SHUFF, FLOWER & LINDSAY Dated: .,[- ~ 0"- 0 / B e ATIORNEYS.AT.UW 26 W. High Street Carlisle, P A II .~~ SAlOIS SHUFF, FLOWER & LINDSAY ATIORNEYSIATlLAW 26 W. High Street Carlisle. PA --',- -~ .' PHANTOM COMMUNICATION SYSTEMS INC Plaintiff : IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. RUSSELL J. LEEDY, Individually and tl dlbl a NIGHT FEVER ENTERTAINMENT, Defendant NO. 01- 32/l" E9u"Iy-r~ CIVIL ACTION : IN EQUITY COMPLAINT AND NOW, comes the Plaintiff, Phantom Communication Systems Inc., by and through its undersigned attorneys, Saidis, Shuff, Flower & Lindsay, and avers in support of its complaint against Defendant as follows: 1. Plaintiff, Phantom Communication Systems Inc., is a corporation duly organized and existing under the laws of the Commonwealth of Pennsylvania, with an office or principal place of business located at 50 Clay Road, Building #2, Carlisle, Cumberland County, Pennsylvania 17013. 2. Defendant, Russell J. Leedy, is an adult individual with a last known address of 59 East North Street, Apartment 3, Carlisle, Cumberland County, Pennsylvania, 17013, 3. Plaintiff does business as Phantom Entertainment Services, and provides disc jockey entertainment, karaoke entertainment and music video entertainment. 4. In or about May 1996, Defendant accepted employment with Plaintiff as an entertainer on a trial basis. II SAIDIS SHUFF, FLOWER & LINDSAY ATIORNEYS-AT-LAW 26 W. High Street Carlisle, P A ~.< ,- '-' -, .'," - - ~ ':':,- '~,~d ! 5. On May 23, 1996, Defendant executed an Employment Agreement with Plaintiff. A true and correct copy of the Employment Agreement is attached hereto, incorporated herein by reference and marked as Exhibit" A". 6. The Employment Agreement attached hereto as Exhibit" A" specifically lists the Defendant's duty to include" disc jockey entertainer, karaoke host, music video operator and/ or such other duties as employer may from time to time assign to employee". See paragraph 1 of Exhibit" A". 7. The Employment Agreement also contains a Non-Competition Clause in paragraph 6 which provides as follows: 6. Upon the termination of employment with Employer, except in the case of layoff, Employee shall not, either directly or indirectly, for a period of one year next following the date of such termination, compete with Employer within Employer's Prime Service Area which is a 75 mile radius originating from Carlisle, Pennsylvania, either on his own account or as a partner or joint venturer or as an employee, broker, agent, producer or salesman, or entertainer for any other person, firm or corporation, or as an officer, director or stockholder of a corporation or otherwise. Employee further agrees that upon such termination, he will not either directly or indirectly for a period of one year next following the date of such termination, in competition with Employer, canvas, solicit, service or accept any business from or for any customer of Employer at the date of such termination or which has been a customer of Employer at any time during the twelve months immediately preceding such termination. It is agreed that the one year restriction period shall be extended by the length of any period for which Employee may be adjudged to have been in violation of any of the terms of this paragraph 6. 8. By the express terms of the Employment Agreement, Defendant acknowledged that the provisions of paragraphs 5 and 6 of the Agreement regarding Non-Competition, are critical and essential terms of the employment relationship II SAIDIS SHUFF, FLOWER & UNDSAY ATI'ORNEYS-AT-LAW 26 W. High Street Carlisle, P A ~';'''~:;~; and that except for his agreement to said provisions, Plaintiff would not have been willing to enter into the Agreement or create or sustain the employment relationship. See paragraph 7 of the Exhibit" A". COUNT I BREACH OF CONTRACT 9. On or about May 7, 2001, Defendant started his own business providing disc jockey and karaoke and video services known as Night Fever Entertainment, out of his Carlisle home, in direct competition with the Plaintiff. 10. On May 9, 2001, Defendant submitted his resignation from employment with Plaintiff. 11. In direct violation of the Employment Agreement, immediately upon terminating employment with Plaintiff, Defendant solicited and accepted business from customers of the Plaintiff causing the Plaintiff financial loss. 12. On May 16, 2001, counsel for Plaintiff wrote the Defendant via certified mail which was received by the Defendant on May 18, 2001, advising that he should cease and desist the soliciting and the acceptance of business from customers of Plaintiff, and he was reminded of the provisions in the Employment Agreement and was advised that it was expected that he would adhere his business practices to those terms and conditions, or face legal action. A true and correct copy of the May 16, 2001, letter is attached hereto, and incorporated herein by reference and marked as Exhibit "B". II ~\" .' 13. Despite written demand that the Defendant conform his business activities in accordance with the Employment Agreement, Defendant continues to solicit and accept business from customers of Plaintiff in breach of his Employment Agreement. 14. Defendant's breach of his Employment Agreement, as set forth above, has caused the Plaintiff to suffer financial loss. 15. Plaintiff, as of the date of this Complaint, is aware of at least three customers of Plaintiff who have been solicited and provided business to the Defendant which business otherwise would have been provided to Plaintiff. WHEREFORE, Plaintiff, Phantom Communication Systems Inc. demands judgment against Defendant, Russell J. Leedy, tj djbj a Night Fever Entertainment for all financial losses incurred as a result of the Defendant's breach of the Employment Agreement, and the acceptance of business from customers of Plaintiff, and together with costs, fees, interest and attorneys' fees all in amount in excess of $25,000.00. COUNT II INTUNCTIVE RELIEF 16. Paragraphs 1 through 15 hereof are incorporated by reference as if the SAIDIS SHUFF, FLOWER & LINDSAY same were more fully set forth at length herein. ATIORNEYS.AT.LAW 26 W. High Street Carlisle, P A 17. As a direct and proximate result of the Defendant's actions in breaching the Employment Agreement, Plaintiff has and will in the future suffer irreparable harm including the loss of customers and the loss of income. 1\ " II SAlOIS SHUFF, FLOWER & LINDSAY ATIQRNRYS'AT'LAW 26 W. High Street Carlisle, P A 18. Plaintiff does not have an adequate remedy at law and accordingly seeks injunctive relief from this Honorable Court. 19. If the Defendant is not enjoined, it is believed and therefore averred that he will continue to solicit and accept business from customers of the Plaintiff, all of which will cause the Plaintiff to suffer serious and possibly permanent financial damages. WHEREFORE, Plaintiff, Phantom Conununication Systems, Inc. respectfully requests this Court grant preliminary and permanent injunctive relief against the Defendant and prohibit him from soliciting and accepting business from customers of Plaintiff in violation of the Employment Agreement. Respectfully submitted, SAIDIS, SHUFF, FLOWER & LINDSAY s- 'J..~-{) { By: II ~ , SAlOIS SHUFF, FLOWER & LINDSAY ATI'ORNEYS-AT-LAW 26 W. HighSlTeet Carlisle. PA .' . -,-', ',:' , i VERIFICATION I verify that the statements made in the foregoing Complaint are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. ~ 4904, relating to unsworn falsification to authorities. DATED: 5/~<Jj, ~.~.. eanYaukf .. Ii MAY "Hill. fHJ !'!i/oj:g!,:! f:.j!:JI!!i-li t'l1J. ~1!fI!Li!1!l+et!lli:l "7n!1~;r12M ~:,!;~';l , ., , EMPLOYMENT AGREEMENT AGREEMENT made this , 1996, between (hereinafter loyee") . 1. Employer hereby errploys Employee and Employee hereby accepts employment with Employer, E'hantom Communication Systems, Inc. Employee's duties shall include disc jockey entertainer, karaoke host, music video operator and/or such other duties as Employer may from time-to-time assign to Employee. -' l 2. Employee shall devote appropriate time, attention, and best efforts to the faithful discharge of such duties. Employee shall not represent Employer in any manner other than that which is listed in paragraph 1 and shall not canvas, solicit, service, or accept any business from or for any customer without the prior consent of the Employer. Employee shall not engage in any employment or activity that is in competition with Emp10yer.- 3. Employer shall pay to Employee compensation which is based on a percentage of each entertainment job. The percentage may be a 'minimum of 30% of the contract engagement amount or an hourly wage. There is no guarantee as to the total number of days per week, per month, or per year that the ,employee shall be provided work since the total amount of work available may change and is often determined by our customers. 4. In the performance of duties, Employee maybe provided with tools, parts, equipment, vehicles, manuals, and other items. It is understood and agreed that, unless specifically excepted, all of such items shall be and remain the exclusive property of Employer. Employee shall exercise due care in the use of such items and shall return them to Employer upon termination of errployment. Employee is not permitted to use their own tools, parts, equipment, vehicles, music, etc. without prior consent from the Employer. 5. During the term of errployment, Employee may acquire knowledge or information about Employer's business, pricing policies, customers, customers' needs and other matters not of common or public knowledge. AS a result, Employee may be solicited to divulge such knowledge or information or to accept employment with a person or entity seeking to do business with a customer or with a person or entity in competition with Employer. Employee agrees that such knowledge or information is confidential and the exclusive property of Employer. Accordingly, Employee shall not use or divulge that knowledge or information in any manner that may be detrimental to Employer's business, whether during employment or after termination, and shall not make any personal record of the same. Additionally, employee shall not join or become a member of a professional organization or subscription service for materials, supplies, music, customers, etc, without the written consent of employer. 6. Upon the termination of employment with Employer, except in the case of layoff, Employee shall not, either directly or indirectly, for a period of one year next following the date of such termination, compete with Employer within Employer's E'rime Service Area which is a 75 mile radius originating from Carlisle, E'ennsylvania, either on his own account or as a partner or joint venturer or as an employee, broker, agent, producer or salesman, or entertainer for any other person, firm or corporation, or as an officer, director or MAY 10-01 THU 20:~9 PHANTOM COMM.SYSTEMS 717 258 4202 P.03 , '. stockholder of a corporation or otherwise. Employee further agrees that upon such te~nation, he will not either directly or indirectly, for a period of one year next following the date of such termination, in competition with Employer, canvas, solicit, service or accept any business from or for any customer of Employer at the date of such termination or which has been a customer of Employer at any time during the twelve months immediately preceding such termination. It is agreed that the one year restriction period shall be extended by the length of any period for which Employee may be adjudged to have been in violation of any of the terms of this paragraph 6. 7. Employee acknowledges that the provisions of Paragraph 5 and 6 of this agreement are critical and essential terms hereof and of the employment relationship, and that, except for Employee's agreement to said provisions, Employer would not have been willing to enter into this Agreement and to create or sustain the employment relationship. 8. This agreement and the employment relationship may be terminated by either party, at any t1me, with-or without cause, immediately upon the giving of notice to the other party. Regarclless of the time, manner or reason for terminat:ion, the provisions of paragraphs 5 and 6 of this agreement shall continue in effect. 9. The terms and proviSions of this agreement are severable.. If any term or provision is held to be invalid or unenforceable, in whole or in part, the same shall not render any other term or provision invalid or unenforceable. If any provision of Paragraphs 5 or 6 is held to be unreasonable, the same shall be valid and enforceable to the extent held to be reasonable. IN WITNESS WHEREOF, this Agreement has been executed the day and year set forth above. ~~t(P D te ,~-.",.,..,.".,. < ~ ,- - "- - " . . ., LAW OFFICES SAIDIS, SHUFF, FLOWER & LINDSAY A PROFESSIONAL CORPORATION 26 WEST HIGH STREET CARLISLE, PENNSYL VANIA 17013 TELEPHONE: (717) 243-6222 - FACSIMILE: (717) 243-6486 EMAIL: attomey@ssfl-law.com www.ssfI-Iaw.com WFST SHORE OFFICE: 2109 MARKET STREET CAMP HILL, PA 17011 TELEPHONE: (717)737-3405 FACSIMILE: (717)737-3407 REPLY TO CARLISLE JAMES D. FLOWER JOHN E. SLII<E ROBERT C. SAIDIS GEOFFREY S. SHUFF JAMES D. FLOWER, JR. CAROL I. LINDSAY JOHNNA J. KOPECKY KARL M. LEDEBOHM JOSEPH L. HITCHINGS THOMAS E. FLOWER May 16,2001 Russell J. Leedy 59 East North Street Apartment 3 Carlisle, PA 17013 Re: Employment Agreement with Phantom Communication Systems Inc. Dear Mr. Leedy: Please be advised that this firm represents Phantom Communication Systems Inc. We have been asked by Phantom to protect its rights under the Employment Agreement that you signed on May 23, 1996, a copy of which is enclosed for your reference. Pursuant to that.Agreement, during your employment and for a period of one year following the termination of your employment, you promised and agreed to not directly or indirectly canvas, solicit, s~rvice or accept any business from or for any customer of Phantom"to the date of such termination or which has been a customer of Phantom at any time during the 12 months immediately preceding your termination. You also promised and agreed to not directly or indirectly compete with Phantom within a 75 mile radius originating from Carlisle, Pennsylvania either on your own account or as partner, joint venture, employee, broker, agent, producer, salesman or entertainer for any other person or corporation. However, immediately following your leaving employment with Phantom, you solicited Phantom customers, and have accepted business from at least three Phantom customers which we are aware of, in direct violation of your Agreement. . lw J~ " -, -, - '^ J.'- - ,~, [,," , , Russell J. Leedy May 16, 2001 Page TWQ Phantom Communication Systems Inc. hereby demands that you immediately conform your business activities to the contractual and common law obligations that you owe to Phantom. This includes ceasing all solicitation of, and acceptance of business from, customers of Phantom. If you do not cease and desist from this improper conduct, Phantom has authorized us to immediately commence a law suit against you and those you currently represent. In this proceeding, Phantom will seek to enjoin all future violations of the Agreement and to recoup all attorneys' fees and costs incurred in taking such action. You will also be subject to claims for Phantom's loss of business, which they have estimated at this point to total over $33,000.00 per year. It is important for you to understand that Phantom considers any violation of your Employment Agreement to be a serious matter. Phantom will continue to monitor your solicitation and business activities and will take immediate action if you do not strictly adhere to the terms and conditions of your signed Employment Agreement. Your immediate cooperation is expected. Very truly yours, SAlOIS, SHUFF, FLOWER & LINDSAY ...."'!' .1.., -;...., JLH: rlm cc: Dean Yaukey CERTIFIED MAIL , ~~~~~~l'Mi!jf~~~~~M'ilil-M@)!,.;>r-':'i'_"';'","-""#.d"""i@.~~dr~"h~'. -"'-'''lIIl\! ' -",_...~'.i.-.< , ~~ ~ I;,\- d '-, - '- --.. ~ ~ ~ ~ C> CJ ~ "_n"'=' 'li" < . '~L~- m -,-,;,-.-' ct< '& C;'; '''{J I" ~~ ~ '0J '0 D 2;~ C,-; :; ~; "- '^ ~ -, ~ l- e- ;> St ~ ~ ".., o c: ::.r- :':,j -< G <:--. r'.) L 'J 10 - l'l , 1 I C) ----i ~ - ~ ~,--"; ~:~ :c -< SAlOIS SHUFF, FLOWER & LINDSAY ATIORNEYS-AT.LAW 26 W. High Street Carlisle, PA , . PHANTOM COMMUNICATION SYSTEMS INC. Plaintiff v. RUSSELL J. LEEDY, Individually and tj djbj a NIGHT FEVER ENTERTAINMENT, Defendant -, .. " : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : NO. OI-3{)/(P : CIVIL ACTION : IN EQUITY ORDER OF COURT AND NOW, this day of , 2001, upon consideration of the attached Motion for Preliminary and Permanent Injunction, said Motion is hereby granted and Defendant is preliminarily enjoined from soliciting and accepting business from customers of Plaintiff. II BY THE COURT, J. SAlOIS SHUFF, FLOWER & LINDSAY ATI'ORNEYS'Ar1LAW 26 W. High Street Carlisle. P A PHANTOM COMMUNICATION SYSTEMS INC. Plaintiff v. RUSSELL J. LEEDY, Individually and t/ d/b/ a NIGHT FEVER ENTERTAINMENT, Defendant ,,',C ,_, i ',,', .c-<d;,,'-: o ~ M;" _ '-'C_.-,> I . I ! . : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA "- to show cause why the Motion for lreliminary" ' ~ :: NO. 8/- 3J/~ : CIVIL ACTION : IN EQUITY RULE TO SHOW CAUSE AND NOW, on this.bt day of J" uJ) c , 2001, a Rule is entered on the Defendant - Injunction should not be granted. Rule returnable at a hearing to be held on 9u-tt & )r' t) IJ # ~ C7 --r ,m. in Courtroom ~'b\ ~ * II , 2001, at I of the Cumberland County Courthouse. BY THE COURT, , ,.~.i.t~... ,Z;JJ ".'t5~ -, :c<:~_ !<Q ~o ~8 ~ "~::'I ~ i:~"'1 t .,- _,': j! +:- '~""".' . '-,-i ......" f ' *~ ~o ofTI ;:.-t ~ G.. ~ . " 3::" ~ N SAIDIS SHUFF, FLOWER & LINDSAY ATIORNEYS'ATlLAW 26 W. High Street Carlisle, P A , ~ ~ " - ,-".. ~; );,->'- "'~,, ','^ - -" -" .. PHANTOM COMMUNICATION SYSTEMS INC. Plaintiff : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA v. RUSSELL J. LEEDY, Individually and t/ dlbl a NIGHT FEVER ENTERTAINMENT, Defendant NO. 01- 3 ::LIt.. ,Q.u.x:.e 7U,v.. CIVIL ACTION : IN EQUITY MOTION FOR PRELIMINARY AND PERMANENT INJUNCTION AND NOW, comes the Plaintiff, Phantom Communication Systems Inc., by and through its undersigned attorneys, Saidis, Shuff, Flower & Lindsay, and avers in , support of its Motion for Preliminary and Permanent Injunction against Defendant as follows: 1. Contemporaneous with the filing of this Motion, Plaintiff has filed a Complaint in Equity before this Honorable Court. A true and correct copy of the Complaint in equity is attached hereto incorporated herein by reference and marked as Exhibit" A", 2. Plaintiff, Phantom Communication Systems Inc., is a Pennsylvania corporation which provides disc jockey entertainment, karaoke entertainment and video entertainment with a principal place of business located at 50 Clay Road, Building #2, Carlisle, Cumberland County, Pennsylvania 17013. 3. In or about May 1996, Defendant, Russell J. Leedy accepted employment with Plaintiff as an entertainer, on a trial basis. 4~ On May 23, 1996, Defendant executed an Employment Agreement with Plaintiff containing among other terms and conditions of employment, a Non- II ~~~ 1 SAIDIS SHUFF, FWWER & LINDSAY ATIORNEYS-AT-LAW 26 W. High Street Carlisle, PA - I~" ,n'" <" -.1; - - -" ' >'" :." ,;, '! " " -;~ 'i " Competition Clause. A true and correct copy of the Employment Agreement is attached hereto as Exhibit "B". 5. Pursuant to the Non-Competition Clause of the Employment Agreement, the Defendant is prohibited from competing with employer within a 75 mile radius of Carlisle, Pennsylvania for a period of one year. 6. Pursuant to the Employment Agreement, Defendant further agreed not to solicit, service or accept any business from any customers of Plaintiff. 7. On May 7, 2001, Plaintiff became aware that Defendant started up his own business known as Night Fever Entertainment, providing services in competition with Plaintiff. 8. On May 9, 2001, Defendant tendered his resignation of employment to Plaintiff. 9. Immediately upon leaving employment with Plaintiff, Defendant actively solicited customers of Plaintiff and has accepted business from customers of Plaintiff. Defendant has solicited and accepted business from Plaintiff's customers including Nick's 114 Cafe, Grandpa's Growler and Blessed Oliver Plunkett. 10. Plaintiff estimates that to date, as a result of Defendant's action in soliciting and accepting business from customers of Plaintiff, Plaintiff has lost or will lose in excess of $25,000.00 this year. 11. Plaintiff does not have an adequate remedy at law, because if the Defendant is not enjoined from this behavior, the Plaintiff will continue to lose customers, and lose the goodwill associated with those customers. II SAIDIS SHUFF, FLOWER & LINDSAY ATIORNEYS-ATlLAW 26 W. High Street Carlisle, P A ....I ~ ~,- ~ " "" "- " ",,'- .'d-', ., :', "," "~nI;; . 12. It is believed and therefore averred that the Defendant is saying harmful and untrue statements to Plaintiff's customers in order to get them to hire him to provide their entertainment services. 13. It is believed and therefore averred, that Night Fever Entertainment is not I, the sole source of income for the Defendant, but rather throughout the time that he I I Iii was employed by the Plaintiff, and it is believed into the present, Defendant has been gainfully employed in a full time position outside the entertainment industry, 14, Plaintiff has and will suffer irreparable harm and loss if Defendant is not preliminarily and permanently enjoined from engaging in this unfair competition with Plaintiff. 15. Plaintiff has and will suffer irreparable harm and loss if Defendant is not preliminarily and permanently enjoined from continued violations of the Employment Agreement 16. Greater injury will be inflicted upon Plaintiff by the denial of the Injunctive relief than would be inflicted upon Defendant by the granting of such relief. WHEREFORE, Plaintiff, Phantom Communication Systems Inc. respectfully requests that this Court enter an Order pursuant to Pa, RC.P. 1531, preliminarily enjoining Defendant, Russell J. Leedy tl d/bl a Night Fever Entertainment from soliciting or accepting business iI " SAlOIS SHUFF, FLOWER & LINDSAY ATIORNEYS.AT.LAW 26 W. High Sueet Carlisle. PA -~ - - ~ , ,- ,;,-, - ";,,. " ,-" " '" ". -- ',~,>,::;j"'"",~ . .- ..,- ;-~ 'ii from customers of Phantom Communication Systems Inc., and after a hearing, permanently enjoining said conduct. S-H-ol Ii Respectfully submitted, SAID IS, SHUFF, FLOWER & LINDSAY B seph 1. Hitchmgs, Esquire 26 W. High Street Carlisle, PA 17013 717-243-6222 Attorney LD. 65551 Attorney for Plaintiff , , -, -'" SAlOIS SHUFF, FLOWER & LINDSAY ATIORNEYS-AT-LAW 26 w. High Street Carlisle. PA '^-.^ " " ~ "_ . ,,"' <-,21 ~___I ",,', __, "',' ,~ -- _;. '", Ni, -'-'<<':~ VERIFICATION I verify that the statements made in the foregoing Motion for Preliminary and Permanent Injunction are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa. c.s. S 4904, relating to unsworn falsification to authorities. DATED: Sjz=;/o I ~~. ean Ya y Ii ~ 0,'_'_ SAlOIS SHUFF, FLOWER & LINDSAY ATrORNEYS-AT.LAW 26 W. High Street Carlisle, PA 'IJ , '-'. ~ ,~ ',- ." ~-- . c.,..o;it< PHANTOM COMMUNICATION: IN THE COURT OF COMMON PLEAS OF SYSTEMS INC., : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v. : NO. CIVIL ACTION RUSSELL J. LEEDY, Individually: and t/ d/b/a NIGHT FEVER ENTERTAINMENT, Defendant : IN EQUITY NOTICE TO DEFEND You have been sued in court. If you wish to defend against the claim.5 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. Court Administrator 4th Floor, Cumberland County Courthouse Carlisle,PA 17013 240-6200 SAlOIS, SHUFF, FLOWER & LINDSAY Dated: ~ - ~J- D ( J seph L. Hitc gs, 26 West High Street Carlisle, P A 17013 (717) 243-6222 Attorney for Plaintiff SAIDIS SHUFF, FLOWER & LINDSAY ATIORNEYS-AT.lAW 26 W. High Street Carlisle. PA ',- ,-, , '. '~, "~...;~, , lLI, PHANTOM COMMUNICATION SYSTEMS INC. Plaintiff : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA v. RUSSELL J. LEEDY, Individually and t/ d/b/ a NIGHT FEVER ENTERTAINMENT, Defendant NO. : CIVIL ACTION : IN EQUITY COMPLAINT AND NOW, comes the Plaintiff, Phantom Communication Systems.Inc., by and through its undersigned attorneys, Saidis, Shuff, Flower & Lindsay, and avers in support of its complaint against Defendant as follows: 1. Plaintiff, Phantom Communication Systems Inc., is a corporation duly organized and existing under the laws of the Commonwealth of Pennsylvania, with an office or principal place of business located at 50 Clay Road, Building #2, Carlisle, Cumberland County, Pennsylvania 17013. 2. Defendant, Russell J. Leedy, is an adult individual with a last known address of 59 East North Street, Apartment 3, Carlisle, Cumberland County, Pennsylvania, 17013. 3. Plaintiff does business as Phantom Entertainment Services, and provides disc jockey entertainment, karaoke entertainment and music video entertainment. 4. In or about May 1996, Defendant accepted employment with Plaintiff as an entertainer on a trial basis. I SAIDIS SHUFF, FLOWER & LINDSAY A1TORNEYS'AT'LAW 26 W. High Street Carlisle. PA ',~: '" ,', ~..:' ~ cn-J)jff." 5. On May 23,1996, Defendant executed an Employment Agreement with Plaintiff. A true and correct copy of the Employment Agreement is attached hereto, incorporated herein by reference and marked as Exhibit" A". 6. The Employment Agreement attached hereto as Exhibit" A" specifically lists the Defendant's duty to include" disc jockey entertainer, karaoke host, music video operator and/ or such other duties as employer may from time to time assign to employee". See paragraph 1 of Exhibit" A". 7. The Employment Agreement also contains a Non-Competition Clause in paragraph 6 which provides as follows: 6, Upon the termination of employment with Employer, except in the case of layoff, Employee shall not, either directly or indirectly, for a period of one year next following the date of such termination, compete with Employer within Employer's Prime Service Area which is a 75 mile radius originating from Carlisle, Pennsylvania, either on his own account or as a partner or joint venturer or as an employee, broker, agent, producer or salesman, or entertainer for any other person, firm or corporation, or as an officer, director or stockholder of a corporation or otherwise. Employee further agrees that upon such termination, he will not either directly or indirectly for a period of one year next following the date of such termination, in competition with Employer, canvas, solicit, service or accept any business from or for any customer of Employer at the date of such termination or which has been a customer of Employer at any time during the twelve months immediately preceding such termination. It is agreed that the one year restriction period shall be extended by the length of any period for which Employee may be adjudged to have been in violation of any of the terms of this paragraph 6. 8. By the express terms of the Employment Agreement, Defendant acknowledged that the provisions of paragraphs 5 and 6 of the Agreement regarding Non-Competition, are critical and essential terms of the employment relationship , " , :.',_ """"""" _i,;: _ ,,. c,< ;,O"'~ -~ SAlOIS SHUFF, FLOWER & UNDSAY A'I"ItJRWEYS-AT.UW 26 W.lligh Slue! Carlisle. PA and that except for his agreement to said provisions, Plaintiff would not have been willing to enter into the Agreement or create or sustain the employment relationship. See paragraph 7 of the Exhibit" A". COUNT I BREACH OF CONTRACT 9. On or about May 7, 2001, Defendant started his own business providing disc jockey and karaoke and video services known as Night Fever Entertail:unent, out l of his Carlisle home, in direct competition with the Plaintiff. 10. On May 9, 2001, Defendant submitted his resignation from employment with Plaintiff. 11. In direct violation of the Employment Agreement, immediately upon terminating employment with Plaintiff, Defendant solicited and accepted business from customers of the Plaintiff causing the Plaintiff financial loss. 12. On May 16, 2001, counsel for Plaintiff wrote the Defendant via certified mail which was received by the Defendant on May 18, 2001, advising that he should cease and desist the soliciting and the acceptance of business from customers of Plaintiff, and he was reminded of the provisions in the Employment Agreement and was advised that it was expected that he would adhere his business practices to those terms and conditions, or face legal action. A true and correct copy of the May 16, 2001, letter is attached hereto, and incorporated herein by reference and marked as Exhibit "B" . I .' SAlOIS SHUFF, FLOWER & LINDSAY ATl'ORNEYS'ATtolAW 26 W. High Street Carlisle. PA , '~ ,H",';.",,''-,-, ,,;, '~,',"'~ ,_ '0, -~ 13. Despite written demand that the Defendant conform his business activities in accordance with the Employment Agreement, Defendant continues to solicit and accept business from customers of Plaintiff in breach of his Employment Agreement. 14. Defendant's breach of his Employment Agreement, as set forth above, has caused the Plaintiff to suffer financial loss. 15. Plaintiff, as of the date of this Complaint, is aware of at least three \ customers of Plaintiff who have been solicited and provided business to the Defendant which business otherwise would have been provided fo Plaintiff. WHEREFORE, Plaintiff, Phantom Communication Systems Inc. demands judgment against Defendant, Russell J. Leedy, t/ d/b/ a Night Fever Entertainment for all financial losses incurred as a result of the Defendant's breach of the Employment Agreement, and the acceptance of business from customers of Plaintiff, and together with costs, fees, interest and attorneys' fees all in amount in excess of $25,000.00. COUNT II INJUNCTIVE RELIEF 16. Paragraphs 1 through 15 hereof are incorporated by reference as if the same were more fully set forth at length herein. 17. As a direct and proximate result of the Defendant's actions in breaching the Employment Agreement, Plaintiff has and will in the future suffer irreparable harm including the loss of customers and the loss of income. ~ . SAlOIS SHUFF, FLOWER & LINDSAY ATI'ORNEYS-AT.LAW 26 W. High Street Carlisle, PA . , -" ; '" , 'I'd_ ~ .-.,;~",-~- 18. Plaintiff does not have an adequate remedy at law and accordingly seeks injunctive relief from this Honorable Court. 19. If the Defendant is not enjoined, it is believed and therefore averred that he will continue to solicit and accept business from customers of the Plaintiff, all of which will cause the Plaintiff to suffer serious and possibly permanent financial damages. WHEREFORE, Plaintiff, Phantom Communication Systems, Inc. respectfully \ requests this Court grant preliminary and permanent injunctive relief against the Defendant and prohibit him from soliciting and accepting business from customers of Plaintiff in violation of the Employment Agreement. Respectfully submitted, SAIDIS, SHUFF, FLOWER & LINDSAY s- J..{-() I By: "). J seph L. Hitch gs, Esq 26 W. High Street Carlisle, PA 17013 Attorney 1.D. 65551 Attorney for Plaintiff SAlOIS SHUFF, FLOWER & llNDSAY A1TORNEYS.AT-UW 26 W. High Street Carlisle. PA -- -~ - < , VERIFICATION l",->..< ,. ':~'"'~ -, '--~'.i"<;':"'~'~' "fJ:: "~"-'~,i I verify that the statements made in the foregoing Complaint are true and correct. I understand that false statements herein are made subject to the pel}alties of 18 \ Pa. c.s. S 4904, relating to unsworn falsification to authorities. .. ..' DATED: 5Iz~, . l}.- ~ .. ean yaUktJi - , . " -' , ~ MAY-le-01 THU 20:58 PH~NTOM COMM~SYSTEMS _ " ,'- 0'='-_ ,>,~, ". y- -." -, 717 258 4202 p~e2 , ., EMPLOYMENT AGREEMENT AGREEMeNT made ~3 day of Phantom Communication Systems, Inc., d/b/ I:Phantom Entertainment Services, 2101 Newville Road, Carlisle, ennsylvania (hereinafter called "Employer"), and . ~UGx/( J LFEZ> Yj .so Px..,.,,,vbmJ, r&..... C1../uU, (1// n~/3 (hereinafter called "Employee"). this , 1996, between 1. Employer hereby employs Employee and Employee hereby accepts employment with Employer, Phantom Communication Systems, Inc. Employee's duties shall include disc jockey entertainer, karaoke host, music video operator and/or such other duties as Employer may from time-to-time assign to E"i'loyee. 2. Employee shall devote appropriate time, attention, and best efforts to the faithful discharge of such duties. Employee shall not represent Employer in any manner other than that which is listed in paragraph 1 and .sha11 not canvas, so1icit, service, or accept any business from or for any customer without the prior consent of the Employer. Employee shall not engage in any employment or activity that is in competition with Employer.- 3. Employer shall pay to Employee compensation which is based on a percentage of each enterta1runent job. The percentage _y be a'minimu:rn of 30% of the contract engagement amount or an hourly wage. There is no guarantee as to the total number of days per week, per month, or per year that the ,employee shall be provided work since the total amount of work available may change and is often determined by our customers. 4. In the performance of duties, Employee maybe provided with tools, parts, equipment, vehicles, manuals, and other items. It is understood and agreed that, unless specifically excepted, all of such items shall be and reroain the exclusive property of Employer. Employee shall exercise due care in the use of such items and shall return them to Employer upon termination of employment. Employee is not permitted to use their own tools, parts, equipment, vehicles, music, etc. without prior consent from the Employer. 5. During the tenn of employment, Employee may acquire knowledge or information about Employer's business, pricing policies, customers, customers' needs and other matters not of common or public knowledge. As a result, Employee may be solicited to divulge such knowledge or information or to accept employment with a person or entity seeking to do business with a customer or with a person or entity in competition with Employer. Employee agrees that such knowledge or information is confidential and the exclusive property of Employer. Accordingly, Employee shall not use or divulge that knowledge or information in any manner that may be detrimental to Employer's business, whether during employment or after termination, and shall not make any personal record of the same. Additionally, employee shall not join or become a member of a professional organization or subscription service for materials, supplies, music, customers, etc. without the written consent of employer. 6. Upon the termination of employment with Employer, except in the case of layoff, Employee shall not, either directly or indirectly, for a period of one year next following the date of such termination, compete with Employer within Employer's Prime Service }'.rea which is a 7S mile radius originating from Carlisle, Pennsylvania, either on his o1oln account or as a partner or joint venturer or as an employee, broker, agent, producer or salesman, or entertainer for any other person, firm or CD or as an officer, director or MAY 10 01 THU 20:59 PHANTOM COMM.SYSTEMS 717 258 4202 P.03 , .. . stockholder of a corporation or otherwise. Employee further agrees that upon such termination, he will not either directly or indirectly, for a period of one year next following the date of such ter.mination, in competition with Employer, canvas, solicit, service or accept any business from or for any customer of En;;>loyer at the date of such termination or which has been a customer of En;;>loyer at any time during the twelve months immediately preceding such ter.mination. It is agreed that the one year restriction period shall be extended by the length of any period for which En;;>loyee may be adjudged to have been in violation of any of the te~ of this paragraph 6. 7. Employee acknowledges that the provJ.sJ.ons of Paragraph 5 and 6 of this agreement are critical and essential terms hereof and of the employment relationship, and that, except for Employee' s agreement to said provisions, En;;>loyer would not have been willing to enter into this Agreement and to create or sustain the employment relationship. 8. This agreement and the employment relationship may be ter.minated by either party, at any time, with-or without cause, immediately upon the giving ~f notice to the other party. Regardless of the time, manner or reason for terminat~ion, the provisions of paragraphs 5 and 6 of this agreement shall continue in effect. 9. The terms and provisions of this agreement are severabJ:e".. If any, term or provision is held to be invalid or unenforceable, in whole or in part, the same shall not render any other te~ or provision invalid or unenforceable. If any provision of Paragraphs 5 or 6 is held to be unreasonable, the same shall be valid and enforceable to the extent,held to be reasonable. IN WITNESS WHEREOF, this Agreement has been executed year set forth above. the day and Phant By s, Inc. 5. .s:~tt# D te . - , JAi"1ES D. FLOWER JOHN E. SUKE ROBERT C. SAlDlS GEOFFREY S. SHUFF ]Ai\1ES D. FLOWER, JR. CAROL]. LINDSAY JOHNNAJ. KOPECKY KARL M. LEDEBOHM JOSEPH L. HITCHINGS THOMAS E. FLOWER LAW OFFICEs SAIDIS, SHUFF, FLOWER & LINDSAY A PROFESSIONAL CORPORATION 26 WEST HIGH STREET CARLISLE, PENNSYLVANIA 17013 TELEPHONE: (717) 243-6222 - FACSIMILE: (717) 243-6486 EMAIL: atlomey@sstl..Iaw.com www.ssfl-law.com WEST SHORE OFFICE: 2109 MARKET STREET CAMP HILt. PA 17011 TELEPHONE: (717)737-3405 FACSIMILE: (717)737-3407 REPLY TO CARLISLE May 16,2001 \ Russell J. Leedy 59 East North Street Apartment 3 Carlisle, PA 17013 " Re: Employment Agreement with Phantom Communication Systems Inc. Dear Mr. Leedy: Please be advised that this firm represents Phantom Communication Systems Inc_ We have been asked by Phantom to protect its rights under the Employment Agreement that you signed on May 23, 1996, a copy of which is enclosed for your reference. Pursuant to that.Agreement, during your employment and for a period of one year following the termination of your employment, you promised and agreed to not directly or indirectly canvas, solicit, s~rvice or accept any business from or for any customer of Phantom"to the date of such termination or which has been a customer of Phantom at any time during the 12 months immediately preceding your termination. You also promised and agreed to not directly or indirectly compete with Phantom within a 75 mile radius originating from Carlisle, Pennsylvania either on your own account or as partner, joint venture, employee, broker, agent, producer, salesman or entertainer for any other person or corporation. However, immediately following your leaving employment with Phantom, you solicited Phantom customers, and have accepted business from at least three Phantom customers which we are aware of, in direct violation of your Agree~enc. EXHIBIT io _. A ,J:&l-l'- ~"'~ - " ,< (".- . ,~"~:-(,',,,c;,' . " J....' t':> Russell J. Leedy May 16, 2001 Page Two Phantom Communication Systems Inc. hereby demands that you immediately conform your business activities to the contractual and common law obligations that you owe to Phantom. This includes ceasing all solicitation of, and acceptance of business from, customers of Phantom. If you do not cease and desist from this improper conduct, Phantom has authorized us to immediately commence a law suit against you and those you currently represent. In this proceeding, Phantom will seek to enjoin all future violations of the Agreement and to recoup all attorneys' fees and- costs incurred in taking such action. You will also be subject tJ claims for phantom's loss of business, which they have estimated at this point to total over $33,ODO.00 per year. .'" It is important for you to understand that Phantom considers any violation of your Employment Agreement to be a serious matter. Phantom will continue to monitor your solicitation and business activities and will take immediate action if you do not strictly adhere to the terms and conditions of your signed Employment Agreement. Your immediate cooperation is expected. Very truly yours, SAIDIS, SHUFF, FLOWER & LINDSAY ".. ,~ .1.1 ~ JLH:rlm cc: Dean Yaukey CERTIFIED MAIL ~.:...,>, i-, '.-,'," ". ;';"",< ,>oj,';,: ,;,'-''c -'~, ,. "* 'Iii:" P.02 MAY-10-01 THU 20:58 PHANTOM COMM.SYSTEMS 717 258 4202 '. : .. EMPLOYMENT AGREEMENT AGREEMENT made this ,9.3 day of , 1996, between Phantom Communication Systems, Inc., d/b/ I:Phantom Entertainment Services, 2101 Newville Road, Carlisle, ennsylvania (hereinafter called "Employer"), and . ~u~sd/ J LE'EZJ(, SO f).;"",,(bml' /l.-....J Gu./uU, fA F?iJ/3 (hereinafter called "Em~loyee"). 1, Employer hereby employs Employee and Employee hereby accepts employment with Employar , Phantom Communication Systems, Inc. Employee's duties shall include disc jockey entertainer, karaoke host, music video operator and/or such other duties as Employer may from time-to-time assign to Employee. ,~ 2. Employee shall devote appropriate time, attention, and best efforts to the faithful discharge of such duties. Employee shall not represent Employer in any manner other than that which ~s listed in paragraph 1 and shall not canvas, solicit, service, or accept any business from or for any customer without the prior consent of the Employer. Employee shall not engage in any employment or activity that is in competition with Emp1oyer.- 3. Employer shall pay to Employee compensation which is based on a percentage of each entertainment job. The percentage may be a 'minimum of 30\ of the contract engagement amount or an hourly wage. There is no guarantee as to the total number of days per week, per month, or per year that the ,employee shall be provided work since the total amount of work available may change and is often determined by our customers. 4. In the performance of duties, Employee may be provided with tools, parts, equipment, vehicles, manuals, and other items. It is understood and agreed that, unless specifically excepted, all of such items shall be and remain the exclusive property of Employer. Employee shall exercise due care in the use of such items and shall return them to Employer upon termination of employment. Employee is not permitted to use their own tools, parts, equipment, vehicles, music, etc. without prior consent, from the Employer. 5. During the term of employment, Employee may acquire knowledge or information about Employer's business, pricing pOlicies, customers, customers' needs and other matters not of common or public knowledge. As a result, Employee may be solicited to divulge such knowledge or information or to accept employment with a person or entity seeking to do business with a customer or with a person or entity in competition with Employer. Employee agrees that such knowledge or informlltion is confidential and the exclusive property of Employer. Accordingly, Employee shall not use or divulge that knowledge Or information in any manner that may be detrimental to Employer's business, whether during employment or after termination, and shall not make any personal record of the same. Additionally, employee shall not join or become a member of a professional organization or subscription service for materials, supplies, music, customers, etc. without the written consent of employer. 6. upon the termination of employment with Employer, except in the case of layoff, Employee shall not, either directly or indirectly, for a period of one year next following the date of such termination, compete with Employer within Employer's p,rime Service Area which is a 75 mile radius originating from Carlisle, Pennsylvania, either on his own account or as a partner or joint venturer or as an employee, broker, agent, producer or salesman, or entertainer for any other person, firm or corporation, Or as an officer, director or MAY 10-01 THU 20:59 PHANTOM COMM.SYSTEMS 717 258 4202 P.03 . , t. ,~ " , stockholder of a corporation or otherwise. Employee further agrees that upon such termination, he will not either directly or indirectly, for a period of one year next following the date of such termination, in competition with Employer, canvas, solicit, service or accept any business from or for any customer of Employer at the date of such tennination or which has been a customer of Employer at any time during the twelve months immediately preceding such termination, It is agreed that the one year restriction period shall be extended by the length of any period for which Employee may be adjudged to have been in violation of any of the terms of this paragraph 6. 7. Employee acknowledges that the provisions of Paragraph 5 and 6 of this agreement are critical and essential terms hereof and of the employment relationship, and that, except for Employee' s agreement to said provisions, Employer would not have been willing to enter into this Agreement and to create or sustain the employment relationship. S. This agreement and the employment relationship may be terminated by either party, at any time, with-or without cause, immediately upon the giving o..f notice to the other party. Regardless of the ti.me, manner or reason for tennination, the provisions of paragraphs 5 and 6 of this agreement shall continue in effect, 9" The terms and provisions of this agreement are severable,' If any' te:cn or provision is held to be invalid or unenforceable, in whole or in part, the same shall not render any other term or provision invalid or unenforceable. If any provision of Paragraphs 5 or 6 1s held to be unreasonable, the same shall be valid and enforceable to the extent held to be reasonable. IN WITNESS WHEREOF, this Agreement has been executed the day and year set forth above. 5)76 D te :..%~~!imikiu-m~fU:l~ffi-;;Mil-iMw;M;;ili~~~,,"~>j;~~/ili;at>i~-'<'~' c".",....JJJHI, .,c ,~, ,"Cc "","^,-.x..",_A,W':,.,'i'~" ,,,,-,'-,",,:;,,~,, -,-~.. ~---~" " ~ o ~; "1': ,,; n--:,' . ? < (j; ~~ ~,~ ~,~::: ;- ::~ -< r~"- " c\ ~< f',,) Ci L.) '.) Co , . ) 1..-.' ,,:;'. =< . ~._.,""' '-' "'lliu ,,-,', ~ ",",,', ''-'\t- ~ . SHERIFF'S RETURN - REGULAR CASE NO: 2001-03216 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND PHANTOM COMMUNICATION SYSTEMS VS LEEDY RUSSELL J ET AL RICHARD SMITH , Sheriff or Deputy Sheriff of Cumberland County,Pennsylvania, who being duly sworn according to law, says, the within COMPLAINT & NOTICE was served upon LEEDY RUSSELL J the DEFENDANT , at 1458:00 HOURS, on the 8th day of June , 2001 at 59 EAST NORTH STREET APARTMENT 3 CARLISLE, PA 17013 by handing to RUSSELL LEEDY a true and attested copy of COMPLAINT & NOTICE together with and at the same time directing His attention to the contents thereof. Sheriff's Costs: Docketing Service Affidavit Surcharge So Answers: 18.00 3.10 .00 10.00 .00 31.10 ~~ ~~<~ R. Thomas Kline 06/12/2001 SAIDIS SHUFF Sworn and Subscribed to before By: me this .21. e day of C)">I' ~J A.D n~,- f2 fn,dP;'/fn51 ~rothonotar - "', ~"" ".i",~""",,,~" - "-'";'0 - . SHERIFF'S RETURN - REGULAR CASE NO: 2001-03216 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND PHANTOM COMMUNICATION SYSTEMS VS LEEDY RUSSELL J ET AL RICHARD SMITH , Sheriff or Deputy Sheriff of Cumberland County,Pennsylvania, who being duly sworn according to law, says, the within COMPLAINT & NOTICE was served upon NIGHT FEVER ENTERTAINMENT the DEFENDANT , at 1458:00 HOURS, on the 8th day of June , 2001 at 59 EAST NORTH STREET APARTMENT 3 CARLISLE, PA 17013 by handing to RUSSELL LEEDY a true and attested copy of COMPLAINT & NOTICE together with and at the same time directing His attention to the contents thereof. Sheriff's Costs: Docketing Service Affidavit Surcharge So Answers: 6.00 .00 .00 10.00 .00 16.00 r~~ R. Thomas Kline 06/12/2001 SAIDIS SHUFF Sworn and Subscribed to before By: me this ~ ~ day of {j.JM.L. hi A.D. ~a~ othonotary .Jf:t; - r """"'~ -'< ^ , '~ , ',>."", i:.i. - -"j "i1'."~ ';'-~ ' -- " '",d;, "":;1',, -".\k;..;tk _"','-; "' fY PHANTOM COMMUNICATIONS SYSTEMS, INC., : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v : NO. 01 - 3216 CIVIL TERM RUSSELL 1. LEEDY and NIGHT FEVER ENTERTAINMENT, Defendants COURT ORDER AND NOW, this "l (-l.. ~ day of July, 2001, upon request by the Defendant and agreement by the Plaintiff, the hearing scheduled on Friday, July 6, 2001 is postponed and is rescheduled for Courtroom No.1 on the /,1 fA, day of ~/uof.) ,2001, at /:.h t.M. BY THE COURT, cc: Hubert X. Gilroy, Esquire Joseph L. Hitchings, Esquire I G-" (") C' c:. , .. - '..!' SQf;- ':--r--- 'D5> s:;c.) ~C~, -"-- ,-. 5;t: 7~ -.,1 -< ~d ~(}IM- ~ r 1-l,-DI "1';, ...~'J ~~:i 'n =< ,0 . '"' ' .,. ~ ~,-' ",-~~,,=.-'- ""^'_',_c,,",~_,_,"__ '"'~~".'.'"'" "-""'" "'-~"""~-'<-V"'''-''';;''''''''. - '"~-'~''---'-;c: #' JOHN H. BROUjOS HUBERT X. Gn.ROY BROUJOS & GILROY, P.e. ATIORNEYS AT LAW 4 NORTH HANOVER STREET CARLISLE, PENNSYLVANIA 17013 TELEPHONE: (717) 243-4574 FACSIMILE: (717) 243-8227 INTERNET: brgilroypc@aol.com NON-ToLL FOR HARRISBURG AREA 717-766-1690 July 3, 2001 The Honorable 1. Wesley Oler, Jr. Cumberland County Courthouse One Courthouse Square Carlisle, PA 17013 Re: Phantom V Leedy Dear Judge Oler: I am representing the Defendant in the above matter. Attorney Hitchings and I have agreed that the hearing on Friday can be continued until a later date to give us an opportunity to negotiate an amicable resolution on this matter. Enclosed is a proposed order rescheduling the hearing, Thank you for your attention to this matter. Sincerely yours, IL, dca Enclosure cc: Joseph L. Hitchings, Esquire Russel J. Leedy , ~ " - "-"-~, - .' PHANTOM COMMUNICATION SYSTEMS, INC., : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v : NO. 01 - 3216 EQUITY TERM RUSSELL J. LEEDY, Individually and : CIVIL ACTION - LAW TIDIB/A NIGHT FEVER ENTERTAINMENT, Defendant : IN EQUITY NOTICE TO PLEAD To: Phantom Communication Systems, Inc. c/o Joseph L. Hitchings, Esquire Saidis, Shuff, Flower & Lindsay 26 West High Street Carlisle, P A 17013 Attorney for Plaintiffs You are hereby notified to file a written response to the enclosed New Matter within twenty (20) days from service hereof or a judgment may be entered against you. Date: AUl!:ust 2. 2001 W;l1 Hubert X. Gilro , Esquire Attorney for D fendant Bronjos & Gi oy, P.C. 4 North Hanover Street Carlisle, PA 17013 (717) 243-4574 .---I'O.'d,' ~", r'1' ~, ~~ =~-,l . -, "-k ~_ - e" ,,-.l~, -, -, ~ ;\ . "" '~'.,lf '0,', '.. , '(.U.;.'".;~,<",__ ","-' ':'>""',,.;{,,t PHANTOM COMMUNICATION SYSTEMS, INC., : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v : NO. 01 - 3216 EQUITY TERM RUSSELL J. LEEDY, Individually and : CIVIL ACTION - LAW TID/B/A NIGHT FEVER ENTERTAINMENT, Defendant : IN EQUITY ANSWER TO COMPLAINT Defendant, Russell J. Leedy, by his attorneys, Broujos & Gilroy, P.C., sets forth the following in response to Plaintiff's Complaint: 1. Admitted. 2. Admitted. 3. Admitted. 4. Admitted. 5. Admitted. 6. Admitted in so far as Exhibit "A" speaks for itself. 7. Admitted in so far as Exhibit "A" speaks for itself. 8. Admitted that the terms of Exhibit "A", the Employment Agreement, speak for themselves. Denied that Defendant acknowledged that any non-competition agreement was an essential element of employment. Defendant's allegations as set forth in the New Matter below are incorporated herein by reference thereto. By way of further answer, Defendant was in fact working for Plaintiff pursuant to a percentage compensation arrangement, identical to that in the Employment Agreement, prior to Defendant signing the Agreement. - > ,,, , '. '~ ,^ . ",,""-!1.;J- "~ '"-."" ,--,' .' "-^--j::' Plaintiff had not advised Defendant of any critical and essential terms of his employment relationship when Defendant was formally hired, and Plaintiff had not advised Defendant when Defendant was first hired that Defendant would not be hired unless he entered into a non-competition agreement. COUNT I 9. Denied, Defendant has not started his own business. Defendant admits that he is an employee of Marson, Inc. (Marson) and that Defendant has been providing karaoke services only for Marson. It is further denied that Defendant is in any way acting in direct competition with Plaintiff. After reasonable investigation, Defendant is unable to determine the truth or falsity of the allegation that Defendant is in direct competition with Plaintiff. Proof thereof is demanded. 10. Denied. On the contrary, Plaintiff terminated Defendant from services with Plaintiff. Defendant never submitted a resignation to Plaintiff. Plaintiff demanded that Defendant on May 7, 2001 sign a new Employment Agreement to supercede the prior agreement signed by Plaintiff and Defendant and which is Exhibit "A" of Plaintiffs complaint. Defendant declined to sign any new Employment Agreement, and Plaintiff advised Defendant that he would continue as an employee but that Plaintiff would not be called to work and would not be provided any jobs with the Plaintiff. ,~""'" , ".:i;."'n- ,-'t.,,';.'.., -'-" -,','" "~':: 11. Denied. For reasons as set forth below in the New Matter, Defendant's actions were not in violation of the Employment Agreement because the terms of the Employment Agreement are unenforceable. Furthermore, denied that Defendant solicited and accepted business from customers of the Plaintiff. Defendant became employed with Marson and performed karaoke services. Further denied that Plaintiff has suffered any financial loss as a result of Defendant's actions. After reasonable investigation, Defendant is without sufficient information to determine the truth or falsity of Plaintiffs allegations with respect to financial loss, and proof thereof is demanded. 12. Admitted. 13. Denied that Defendant has not conformed his working relationship in accordance with the Employment Agreement in that said Employment Agreement is unenforceable for reasons as set forth in the New Matter below. Further denied that Defendant has solicited any business and is in any way in breach of the Employment Agreement, which Agreement is unenforceable. 14. Denied. Plaintiff has not suffered any financial loss. Proofthereofis demanded. After reasonable investigation, Defendant is without sufficient information to determine the truth or falsity of Plaintiffs allegation. By way of further answer, Plaintiff did not have any long term agreements with any of the entities where Plaintiff provided karaoke services and for which Plaintiff is no longer providing karaoke services. Defendant's actions have not caused any financial loss to the Plaintiff, and any financial loss suffered by Plaintiff is a result ofPlaintitrs own actions or mismanagement. _~'_'" ,~i ,-, ". .~" ",- , ,,-,..: - ,'- . '-, =~". """ --"~ ',- ""L 15. Denied. Defendant has not solicited or provided bnsiness to three customers of Plaintiff. Defendant does admit being an employee of Marson, and that Marson does, in fact, provide karaoke services to three customers who were former customers of Plaintiff. By way of further answer, the allegations as set forth in Paragraph 14 above are incorporated herein by reference thereto. WHEREFORE, the Defendant requests your Honorable Court to dismiss Plaintiff's complaint. i: COUNT II I I I' 16. No responsive pleading is required. 17. Denied. Plaintiff is not suffering any irreparable harm. If there is a breach of the Employment Agreement and Plaintiff is suffering loss of income, Plaintiff has a remedy for money damages and injunctive relief is not required. By way of further answer, Defendant asserts that Plaintiff is not entitled to any injunctive relief because the alleged non-competition agreement is unenforceable for reasons as set forth in New Matter below. 18. Denied. The allegations as set forth in Paragraph 17 above are incorporated herein. 19. Denied. The allegations as set forth in Paragraph 17 above are incorporated herein. WHEREFORE, Defendant requests YOllr Honorable Court to dismiss Plaintiff's complaint. ~ ,~~, ' ,-~ -' -< ,- , ' , t. "":;""i,, " ., ~ -,""",, " ~ <.;: NEW MATTER Defendant, by his attorneys, Broujos & Gilroy, P.C., hereby sets forth the following allegations as New Matter in response to PlaintiWs complaint: 20. The "Employment Agreement" which is attached to Plaintifrs complaint as Exhibit "A", insofar as it relates to a non-competition restrictive covenant relating to the Defendant at Paragraphs 5, 6, and 7 is void, unenforceable and not applicable to the Defendant for the following reasons: A. The Employment Agreement was not entered into between Plaintiff and Defendant as part of the employment contract between the parties. Plaintiff hired the Defendant on a trial basis, and then hired the Defendant on a permanent basis with compensation being thirty (30%) percent of the contract amount for each show. Defendant worked shows for the Plaintiff under this contractual arrangement prior to Plaintiff submitting to the Defendant the Employment Agreement, and the Employment Agreement was not ancillary to the hiring of the Defendant and the restrictive covenant is not enforceable. B. The restrict covenant provisions of the Employment Agreement are not supported by adequate consideration. Defendant did not receive any additional consideration for signing the Employment Agreement which includes the restrictive covenant provisions. Defendant was hired verbally and had an oral contract with the Plaintiff prior to Defendant signing the Employment Agreement, and Defendant performed services for the Plaintiff pursuant to that oral contract. No additional consideration was ",0-- :,n-c 0',__0, - - , ';"'. ',Ji__~ i- "'I"',}" given to Defendant in connection with signing the Employment Agreement, and the restrictive covenant provisions ofthe agreement are unenforceable. C. The compensation paid by Plaintiff to Defendant was not of a sufficient amount as to justify a restrictive covenant arrangement in the Employment Agreement as suggested by Plaintiff. D. The restrictive covenant provisions of the Employment Agreement are not reasonable in that such provisions are not necessary to protect a legitimate business interest of the Plaintiff. Defendant's work for the Plaintiff only consisted of acting as an entertainer for karaoke shows. Defendant did not receive any confidential or intellectual information of the Plaintiff in connection with Defendant's performance of the shows. Defendant did not receive any training of any sort, and merely used Plaintiff's equipment and was sent by Plaintiff to work certain shows at various locations. There exists no confidential information, peculiar training, or any legitimate protective interest of Plaintiff that Defendant obtained, acquired or learned while the Defendant worked for the Plaintiff, and any attempt to impose a restrictive covenant under these conditions is void on public policy reasons as a restraint on trade and limit on ability of employees to pursue their livelihood. E. The restrictive covenant provisions of the Employment Agreement are void because they are not necessary to protect a legitimate interest of the Plaintiff, the provisions would cause undue hardship on the Defendant, and enforcement of the provision would impair the public interest. ,e ~~ ~ ~, , , ~, ~ ,- ,> ','-~,- -." " ""~'-"'''' t_" F. The restrictive covenant provision of the Employment Agreement are void and unenforceable because they lack adequate consideration in that that amount of compensation paid by Plaintiff to Defendant for Defendant's services was not of such a nature and quantity as to justify imposition of a restrictive covenant. G. The restrictive covenant set forth in the Employment Agreement is unreasonable in that the length oftime imposed is unreasonable, contrary to public interest and would cause undue hardship on the Defendant and is not supported by adequate consideration. H. The restrictive covenant in the Employment Agreement is void on the basis that the geographic area covered by the Employment Agreement is overly broad, is not necessary to protect the Plaintifrs interest and would cause an undue hardship on the Defendant. WHEREFORE, Defendant requests your Honorable Court to dismiss Plaintiff's complaint. Respectfully submitted, III Hubert X. GiI y, Esquire Attorney fo efendant Broujos & Gilroy, P.c. 4 North Hanover Street Carlisle, P A 17013 (717) 243-4574 ,",,-'m ~"' =,- 0,", 'c'_-~"4'_ , -- ' '.'^ " ~" ''''~';: I verify that the statements made in the foregoing document are true and correct. I understand that false statements herein are made subject to the penalties of 18 P A.C.S. Section 4904 relating to unsworn falsification to authoriti DATE'~ ",,'LJ.,i '__illiiilill~'iliMlliiiiMl.~J:I'''' '~~"'irJ~""",ll;lil;-MlW .,","''"''~"'''' ~,,,~,,'JUJ.Lll::ij,, J UTI] l .Jill,., ,", ",,:!! .,,',,'~,," I , ~, - 0 C) 0 C ~l Z !~ ::-:1 -ocr; ~':) '. f:!} Lr~; i~,! f.::: ....-..-- I .._-r,"; ZC t~~ ~~ 0",,_ : rv -<L C'G -u -""fl "'" ~?~~ >' ::r: zO -.0 s-? (srl"1 )>c: Z ;JZ! -< ,U -< 0 -< , ". "lfi.; it ~" ~' .._Hy" '~"',-i ,-". C~"', _','_'"_''''_h''' "-'~"'-'~:'j.t PHANTOM COMMUNICATION SYSTEMS,INC., : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v : NO. 01-3216 EQUITY TERM RUSSELL J. LEEDY, Individually and tldlb/a NIGHT FEVER ENTERTAINMENT, Defendant COURT ORDER AND NOW, this /71Jt, day of August, 2001, upon request of the Defendant to reschedule the hearing in the above matter and the Plaintiff indicating that it does not object to the request, the hearing scheduled in the above matter for September 10, 2001 is cancelled and rescheduled for the 0?.5'W day of ~ , 2001 at / : &> -i-.M. in Courtroom No.1 ofthe Cumberland County Courthouse. BY THE COURT, J ~\,D\ 8'~ 0 0 0 C n :;;~ :0- :-'1 -ac:; ~ fTit'1'l ~~ -:;l;::::J Z:.JJ '-,'I zro- en;:?: -.J r,::' .< / S~} ~c; \J ~C) ....,<'.. ;j::1 --0 ~~7 C) Pc ,-..:> i~jn'! ~ t::- ~ :53 .r- -< cc: Hubert X. Gilroy, Esquire Joseph L. Hitchings, Esquire ,. ~ ~: , ~~W' __~< ' , SAIDIS SHUFF, FLOWER & LINDSAY ATIORNEYS.AT~LAW Z6 W. High Street Carlisle. PA ~-" 1" , -'."-~ ~ ,,~ . , ~ " - ''1:; PHANTOM COMMUNICATION SYSTEMS INC. Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. RUSSELL J. LEEDY, Individually and t/ d/b/ a NIGHT FEVER ENTERTAINMENT, Defendant NO. 01-3216 CIVIL ACTION IN EQUITY REPLY TO NEW MATTER AND NOW, comes the Plaintiff, Phantom Communication Systems, Inc., by and through its attorneys, Saidis, Shuff, Flower & Lindsay and replies to Defendant's New Matter as follows: 20. Denied. It is denied that the employment agreement was void, unenforceable and not applicable to the Defendant. A. Denied. The Defendant was not offered employment on a permanent or regular basis before signing his employment agreement containing the non- competition clause. Defendant was, however, placed on a probationary/trial period before being offered permanent and regular employment. Defendant would not have been given permanent or regular employment with Plaintiff had Defendant declined to sign the employment agreement. The remaining averments of this paragraph are denied II -', I SAlOIS SHUFF, FLOWER & LINDSAY ATIORNEVS'AT'LAW 26 W. High Sitee! Carlisle. PA II -'. ,0-, --' '"' '=' " ," " '~o'" ._, .': 'n' oJ' -, _', "",,; .~.," , .~ and strict proof thereof is demanded at the time of trial. B. Denied. The restrictive covenant provisions of the employment agreement were supported by adequate consideration, namely taking the Defendant from a probationary/trial period to regular employment. Defendant did not have an oral employment contract with the Plaintiff prior to signing the employment agreement, and the remainder of the averments of this paragraph are denied and strict proof thereof is demanded at the time of trial. C. Denied. The amount of compensation paid by plaintiff to the Defendant is irrelevant to the validity and enforceability of the restrictive covenant clause of the employment agreement. D. Denied. Plaintiff hasa'legitimate business interest in protecting long established relationships which it has with its customers who have been solicited by the Defendant. Furthermore, Plaintiff has a legitimate business interest in protecting information relating to its customer base, and its pricing structure. By way 2 SAlOIS SHUFF, FLOWEn. & LINDSAY ATJ'OItNBYSeAT.LAW 26 W. High Street Carlisle, PA Ii " " _ "c.. '~ -,_,~,1~,; " ,: '~"-." ,'- ',j~~~--: -, "',-" ."-,,,,~ .~"' "- of further answer, it is denied that the Defendant did not receive training but in fact did receive training from the Plaintiff. By way of still further answer, the Defendant was not providing entertainment services, karoke or otherwise, before being employed by the Plaintiff in May, 1996 . E. The averments of Paragraph 20E constitute conclusions of law to which no responsive pleading is required. To the extent that they are deemed factual in nature, it is denied that the restrictive covenants are not necessary to protect the legitimate interest of the Plaintiff or that they would cause undue hardship on the Defendant for the reasons set forth in answer to Paragraph 20D above. F. The averments of Paragraph 20F constitute conclusions of law to which no responsive pleading is required. To the extent that they are deemed factual in nature, it is denied that the restrictive covenants are not necessary to protect the legitimate interest of the Plaintiff or that they would cause undue hardship on the Defendant 3 II ,.;J for the reasons set forth in answer to Paragraph 20D above. G. The averments of Paragraph 20G constitute conclusions of law to which no responsive pleading is required. To the extent that they are deemed factual in nature, it is denied that the restrictive covenants are not necessary to protect the legitimate interest of the Plaintiff or that they would cause undue hardship on the Defendant for the reasons set forth in answer to Paragraph 20D above. H. The averments of Paragraph 20H constitute conclusions of law to which no responsive pleading is required. To the extent that they are deemed factual in nature, it is denied that the restrictive covenants are not necessary to protect the legitimate interest of the Plaintiff or that they would cause undue hardship on the Defendant for the reasons set forth in answer to Paragraph SAlOIS SHUFF, FLOWER I, & UNDSAY ATroRNEYS.AT.LAW 26 W. High Street Carlisle, PA 20D above. By way of further answer, Plaintiff's general service area is approximately 1 % hours from the home base of Carlisle, Pennsylvania, and therefore a restrictive geographic area of a 75 4 - SAIDIS SHUFF, FLOWER & LINDSAY ATIOKNEYS'AT'LAW 26 W, High Str..t Cadl.l.. PA il- ,..., , ";--,.>- '" -.,- , :o~. '_ed_____-; i{~i ~ ,,>, - - ',"' -! - ',.'~ mile radius is appropriate to protect Plaintiff's interests. WHEREFORE, Plaintiff, Phantom Communication Systems, Inc., demands judgment against the Defendant, Russell J. Leedy, individually and t/d/b/a Night Fever Entertainment, as set forth in Plaintiff's Complaint. Respectfully submitted, SAIDIS, SHUFF, FLOWER & LINDSAY Dated: tr-27-0 ( J seph L. Hitchings, E uire ttorney I.D. # 65551 26 West High Street Carlisle, PA 17013 (717) 243-6222 Attorney for Plaintiff 5 SAIDIS SHUFF, FLOWER & UNDSAY ATIORNEYS-AT-LAW 26 W, High Street Carlisle. PA , . .,"- VERIFICATION I verify that the statements made in the foregoing Reply to New Matter are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. ~ 4904, relating to unsworn falsification to authorities. DATED: f (l!i/nr Ii SAIDIS SHUFF, FLOWER & LINDSAY ATIORNEYS-AT-LAW 26 W. High Street Carlisle, PA II "--- On ~~ERTIFICATE this j I' - - day of hereby certify that I served . "" .~ . M ,,_ :'-"',,;' -<,",,-.--'^"," b.;,,-;~~<r,: F SERVICE ';C" , 20Q, I nd correct copy of the foregoing Reply to New Matter upon all parties of record via United States Mail, postage prepaid, addressed as follows: Hubert X. Gilroy, Esquire 4 N. Hanover St. Carlisle, PA 17013 SAIDIS, SHUFF, FLOWER & LINDSAY II ClC..-~ "' ~~J,,~'~ -:tiii-i.J~~~I.I:l;"- "_"'<;-",,,;'~, P,~>-oc',"'r,~o '.~~~, ~ri~f~/,j\llii~iiM. .,,".._ '_',.e,';<-,", .,,,-,.,, '~'_h, ,"~__",'" ,,'7,"'''._ ,,"",,"':%;__--'. ~<" '. " ," -II ~ "-~ ~ ,~ ' ~, -~ ~, ~, , " , ,,',-,,~ -~ r;~ "'.< " (f,' -[ r:"'l, ;-- ~- ~;.-; :~ ..,- o ,- _:';. ,,~ -'--, '......~;: 1'1 1;1 ,-") q :,...,,,. :J") !'0 .~,.J ...,.... ,-) :'..J ~~ ("') ._jf"ll c:- ......,.:. :0 -< .,. __ , ,,'__C~__ . - ,_,. .;..' ",",'.,., ;;~i'i PHANTOM COMMUNICATION SYSTEMS, INC., Plaintiff IN TIIE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA v. CIVIL ACTION - LAW RUSSELL J. LEEDY, Individually and Vd/b/a NIGHT FEVER ENTERTAINMENT, Defendant NO. 01-3216 EQUITY TERM ORDER OF COURT AND NOW, this 1 ih day of October, 2001, upon consideration of the attached letter from Hubert X. Gilroy, Esq., the hearing previously scheduled for October 25, 2001, is cancelled. BY THE COURT, J. Joseph L. Hitchings, Esq. 26 West High Street Carlisle, PA 17013 Attorney for Plaintiff Hubert X. Gilroy, Esq. 4 North Hanover Street Carlisle, PA 17013 < cr~ /v_/J_O I ~ Robert L. O'Brien, Esq. 17 West South Street Carlisle, PA 17013 :rc "' ,,_~, <~ w, 1 :, ,,'I"""'!"" - ~~ , ~-~ ~ ~' o,~, ,~'^ '_ __r" ,,,,,,~",, "r.~~_'''''''___'' "_' - ';"",,~"'_"~"'~'_L<:!r"_' r::l.Er)"{)(:'~FiCE OF ~:;~:::'.':'r-r,JCN()Tl\RY O! OCT I 8 AJ1IfJ: I 8 CUMBErlLAiD COUNTY PENNSYLVANIA -~C'''~''-'''-'''-'''''''^'_'tWl o,r..Jt. _1!IJl ?~~"-k."~~~''!!t''Ilfj'~~i!1l~~-~,,,,,-,,~_<~l --,PTIilf~,~JI!!!IQ.~!Ulll~ ,- = ~., "".~"" --~"~ "" , <'. '"-,-~ "'-~',:~ JOHN H. BROUJQS HUBERT X. GILROY BROUJOS & GILROY, P. c. ATfORNEYS AT LAW 4 NORTH HANOVER STREET CARLISLE, PENNSYLVANIA 17013 TELEPHONE: (717) 243-4574 FACSIMILE: (717) 243-8227 INTERNET: brgilroypc@aol.com NON-ToLL FOR HARRIsBURG AREA 717-766-1690 October 12, 2001 The Honorable J. Wesley Oler, Jr. Cumberland Count), Courthouse Carlisle, PA 17013 RE: No: 01 - 3216 / Equity Term Phantom Communication Systems, Inc. v Russell J. Leedy d/b/a Night Fever Entertainment Dear Judge Oler: I have been representing the defendant in the above matter. The defendant has recently retained Robert' L. O'Brien, Esquire, and Attorney O'Brien has filed on behalf of the defendant a bankruptcy petition with the Middle District. The docket number is 1-01- 05054. With the filing of this petition, all proceedings in the above matter are stayed. Accordingly, the hearing scheduled in this case on October 25 should be cancelled. Thank you for your attention to this matter. Hubert X. Gilroy bc cc: Joseph L. Hitchings Russell Leedy Robert L. O'Brien, Esquire fJer I 6 2001