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Home My WebLink About99-02532 '~I~~,M :,.'1;,'11 ",VGi) "'~f 'X,l\l ":,,:im ,~,:I;~~i ,;"p,r, "'::1 .:,,;e'li~ ;""\~\, :'::,:'iW,' ::;'?~ '..x '>~'!t~ :,},:r" ',1, :.::!::::;~ ,:';,:,~~ , ;t,~1 DATE 04/06/99 CIVIL COURT MANAGEMENT SYSTEM PAGE 1 CASE SUMMARY REPORT tI qCj- ,;(S6~ ~ INC ET 97-05161 HERBERT E RUBIN V. ARNOLD INDUSTRIES AL BREACH OF CONTRACT CASE INITIATION DATE 07/03/97 10:28 A CASE STA'lUS ACTIVE ARBITRATION DATE TRIAL READY DATE 07/03/98 JUDGE LAWRENCE E. WOOD PLAINTIFF HERBERT E RUBIN 50 SOUTH WELSH LIONVILLE ATTORNEY: ARBITRATION TIME NOT ACTIVE SINCE 00/00/00 REOPEN DATE 00/00/00 POOL RD #6 PA 19353 020571 TEL: 610-649-6333 THOMAS ALAN SCHNEIDER 650 SENTRY PARKWAY SUITE 1 BLUE BELL, PA 19422 VS. DEFENDANT ARNOLD INDUSTRIES INC 625 SOUTH FIFTH AVE LEBANON ATTORNEY: PA 17042 023702 TEL: 717 255 8051 EUGENE E PEPINSKY JR 210 WALNUT STREET PO BOX 11963 HARRISBURG, PA 17108-1963 ATTORNEY: 058510 TEL: 717-255-8051 DONALD M LEWIS III KEEFER WOOD ALLEN & RAHAL LLP 210 WALNUT ST, PO BOX 11963 HARRISBURG, PA 17108-1963 LEBARNOLD INC 4410 INDUSTRIAL PARK RD CAMP HILL PA 17011 ATTORNEY: 023702 TEL: 717 255 8051 EUGENE E PEPINSKY JR 210 WALNUT STREET PO BOX 11963 HARRISBURG, PA 17108-1963 ATTORNEY: 058510 TEL: 717-255-8051 DONALD M LEWIS III KEEFER WOOD ALLEN & RAHAL LLP 210 WALNUT ST, PO BOX 11963 HARRISBURG, PA 17108-1963 DATE DOCKET INFORMATION 07/03/97 APPEARANCE OF THOMAS ALAN SCHNEIDER FOR HERBERT E RUBIN FEE TO SDE/SAT/CLOSE DOCKET COMPLAINT FILED ACCEPTANCE OF SERVICE BY . PAID 07/03/97 07/03/97 08/11/97 07/02/97 07/03/97 06/01/98 06/01/98 06/01/98 06/01/98 CERTIFIED i :X)/y'\ T/;I ~c RD M,:O.T ~ ~ .,c~ ~t .;;i ~ ct. l'(\ s= ct l'(") ~ ..) ~ ~ ~-t~Ji j'~-*j~ ~ "j~ ~ ...s V7 ~ \- ~ f ~~.\~ , >- C) r.= .~ "? co .~ e- .. .-:: II , ~: ('..1 ..~) . (,' , ~ - (,J.: - ., ',... -- , C:, , . -, , " - C:' ,-... , l:.1 '" , --;.. ..,J c - ,-, [~ " - t-.: ;.. r;-~ ,.oJ C,' C'" () p ~ ~ \J"- t;;~ ~ ~ '" t-- ~ ~~Q: DATE 04/06/99 09/02/97 09/02/97 09/02/97 09/18/97 09/18/97 10/23/97 10/23/97 01/06/98 06/01/98 06/01/98 06/01/98 06/01/98 06/01/98 06/01/98 06/01/98 06/01/98 06/01/98 06/01/98 06/17/98 06/17/98 06/29/98 06/29/98 07/02/98 07/02/98 07/02/98 CIVIL COURT MANAGEMENT SYSTEM CASE SUMMARY REPORT PAGE 2 EUGENE PEPINSKY JR OF COMPLAINT ON 7-25-97 NOTICE TO PLEAD (20 DAYS) PRELIMINARY OBJECTIONS OF DEFTS CERTIFICATION OF SERVICE ANSWER TO PRELIM. OBJECTIONS BY PLTF CERTIFICATION OF SERVICE JURY TRIAL DEMAND BY PLTF CERTIFICATION OF SERVICE ~ REMINDER LETTER SENT TO LEBARNOLD INC ARNOLD INDUSTRIES INC THOMAS ALAN SCHNEIDER, ESQUIRE APPEARANCE OF EUGENE E PEPINSKY FOR ARNOLD INDUSTRIES INC APPEARANCE OF EUGENE E PEPINSKY FOR LEBARNOLD INC APPEARANCE OF DONALD M LEWIS FOR ARNOLD INDUSTRIES INC APPEARANCE OF DONALD M LEWIS FOR LEBARNOLD INC STIPULATION OF FACTS RE: MATTERS RAISED IN PRELIM OBJECT IONS BRIEF BY DEFTS IN SUPPORT OF PRELIM OBJECTIONS CERTIFICATION OF SERVICE PRAECIPE FOR DETERMINATION BY ATTNY FOR DEFTS CERTIFICATION OF SERVICE PRAECIPE TO FILE DEPOSITION TRANSCRIPTS AGREEMENT TO EXTEND TIME FOR PLTF TO FILE BRIEF IN OPPOSITION TO DEFTS PRELIM OBJECTIONS CERTIFICATION OF SERVICE CERTIFICATION OF SERVICE OF PLTFS BRIEF IN OPPOSITION TO DEFTS PRELIM OBJECTIONS UPON D LEWIS III ESQ ON 6-26-98 BRIEF BY PLTF IN OPPOSITION TO PRELIM OBJECTIONS CERTIFICATION OF SERVICE OF DEFTS REPLY BRIEF IN SUPPORT OF PRELIM OBJECTIONS UPON T SCHNEIDER ON 7-1-98 REPLY BRIEF BY DEFTS IN SUPPORT OF PRELIM OBJECTIONS CERTIFICATION OF SERVICE . . '. bC,-' CBEsnm CoUNlY CoURT OF CoMMON PlEAs CIVIL COVER SHEET IIO_-pe<<-:-- ~ >>.ftJ \ ~ ''-,', Rerbert E. Rubin, Plaintiff v. Arnold Industries, Inc. and Lebarno1d, Inc., Defendants ~n 05Hli \ ;'') ,',' " L CASE CAPItON: ,>~ - ,"-\." .~ ~"\ \.." :~) .;.... 2. PWN'11Iif(s): <l'lamc.lIddre&s) 5. PIAINTlFFS COUNSEl: (Name, firm, addra6, tcIcpbollC aod IIItonJCf JDI) Herbert E. Rubin 50 South Welsh Pool Road, #6 Lionvi11e, PA 19353 Thomas A. Schneider, Esquire Identification No. 20571 455 Pennsylvania Avenue Suite 220 Fort Washington, PA 19034 Tel. (215) 646-0444 Arnold Industries, Inc. 625 South Fifth Avenue Lebanon, PA 17042 and Lebarnold, Inc. 4410 Industrial Park Road Camp Hill, PA 17011 5. AIm TBEIlE, ANY JlElAl"ED CASES? (scc c.c.R.c.P. 200B) D Yes Q9 No IF YES, SHOW CASE Nos. AND CAPItONS: .. DEFENDANI'(s): (Name, address) 6. CASECODE: 82 DESCRIPIION:(scc.....~_slde) Breach of Contract' [and related tort]. 7. JS'IBISANARBI11lA1IONCASE1 D Yts rn No CArbIa2lion Umills $50,000. See c.c.R.c.P. 1301.1) AlUItI1lAT10N CASES ONLY An arbilralion hemng in this mallCI' Is scheduled for NOTICE OF TRIAL LISTING DATE Pursuant to CeRe.!., 249.3, if this casc is nut subject to . compulsory arbllrnllOn It Will be presumed ready for trial twelve (12) months from lhedatc of the initiation of tile suit ll1ld will be pla(~ on tbe at the Juror's Lounge Chester County Court cri.lllsl one (I) year (rom lhe dAte Ihe IUU ",.r: 81ft! unless otherwise r ordered by the C(lun House, West ~I PA, ~ parties and their To oblai~ relief (:-om automatic trial listing a pany must counsel are directed to report to the Juror'! proceed pursuant to C.C.R.C.P, 249,3(b), request an administrative I..omge for an arbltra1ion hearing In this matter 0Sl conference and obtain a court order deferring placement of the case on the !he date and time set fonh above. trial list until a later dale. FILE \VIlH: ProlhonoWy of Olestcr CounIy 2 Nollh High SlIl:d, SuiIe 1, W$ O1cslcr, PA 19~ .mrS COVEllSBEETIS ~ ~.... '1IY c.C:Lc.P.:tOl8.1 {b)ANDMVs1:BE'SJiltvED'uPONAti'O'I1I1'Ji.'\X ~;.;PA1l11ES'TO:mEACI1ON1MMEDIA1m':AF11!It1'IlING;cSUBM1TENOUGBCIOPIES'fOllSI!IMCEh?: 1119I SEE JlEYEJlSE SIDE fOil CASE CODES AND DESCIlIP110NS CASE TYPE CODES AND DESCRIPTIONS ,'. All initial rtIiDgs ID tbls court, "blcb Includes actions commenced elsewbere and being transferred to or lodged ID tbis court, require tbe asignment of a case type code. COMPLAlNTSlPRAECIPES FOR WRITS OF SUMMONS - - LAW 87 Automobile Accident - Bodily Injwy Involved 87PD Automobile Accident - Property Damage Only 88 ProdUCls Liability B6 Medical Malpractice 123 Asbeslos Related 32 Other Negligence - Bodily Injwy Involved 32PD Other Negligence - Property Damage Only I OS Mino~ Compromise B2 Breacb of Contract 128 Breach of Warranty 83 Coll51nlction Contract B4 , Defamation 23 Ejectment 25 Mandamus 27 Mortgage Foreclosure 129 GIOWld Rent 28 Partitico 29 Quiet Trtle 30 Quo Wanunto 3] Replevin 2] To CoaCorm Previously Confessed Judgment I Dec:buatory Judgment (at law) only 20 Other Complaint or Praecipe for Writ of Summons at law EQUITY - COMPLAINTSIPRAECIPES FOR WRITS OF SUMMONS IN EOUITY 24 InjlUlctive Relief - Preliminary and/or Fin&! 130 Dec:1aratory Judgment (in equity) only 61 Other Complaint or Praecipe for Writ of Summons in equity only FAMILY 22 Divorce (no ancillary relief, e.g. equitible distribution, alimony pendente lite, etc requesu:d - custody count may be included) Divorce (ancillary relief requested) CustodyIPartial CustodyNisitation Pcrition for ProteCtion from Abuse Annulment 13] 18 47 19 MUNICIPALIZONlNG 9 Zoning Appeal 74 Any otbcr MUDicipatlppCal - Non-Zoning APPEAUCERTIORARI FROMDISTRICf JUSTICE 132 Contract ] 33 Property Damage 134 Personal Injwy 136 Writ of Certiorari ]37 Landlordffenant 135 Other Appeal from District Justice EMINENT DOMAIN 35 Declaration of Taking 46 Petition for Appointment of Board/Jwy of View 114 Other Eminent Domain Proceeding MECHANICS LIENS 42 Mechanic's Lien Claim MISCELLANEOUS 8 Appeal from Suspension of Operato~ License Petftjon for Leave to Appeal Nunc Pro Tunc (assign cese code of lUIderlying matter) 52 Petition for Change of Name 5 Appeal from Board of Assessment 141 Election Appeal or Other Challenge 98 Motion for Issuance of Foreign Subpoena 45 Petition for Involunlllry Dissolution 48 Petition for Writ of Habeas Corpus 76 Petition to Compel Appointment of Arbitrator 77 Petition to Compel Arbitralion 75 Petition to Confirm Arbitration Award 100 Other Miscellaneous Motions, Petitions and Appeals AI.L OTHER 43 Other - any case type not covered by any of the above By: Thomas A. Schneider, Esquire Identification No. 20571 455 Pennsylvania Avenue Suite 220 Fort Washington, PA 19034 (215) 646-0444 Attorney For: Plaintiff, Herbert E. Rubin IN THE COURT OF COMMON PLEAS OF CHESTER COUNTY, PENNSYLVANIA HERBERT E. RUBIN, Plaintiff CIVIL ACTION .':'J -j v. NO. ~. ';. \,.","< ,\\ '\ :,,) ARNOLD INDUSTRIES, INC. ',"- ,~, ::.'..: and '.,.' . ') " --~...':, '," ~ \ \-~) ~;l LEBARNOLD, INC., Defendants NOTICE TO DEFEND You have been sued in Court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this complaint and notice are served by entering a written appearance personally or by ail 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 judgment may be entered against you by the Court without 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. Lawyer Referral and Information Service Chester County Bar Association 15 West Gay Street West Chester, PA 17380 (610) 429-1500 ..~ By: Thomas A. Schneider, Esquire Identification No. 20571 455 Pennsylvania A venue Suite 220 Fort Washington, PA 19034 (215) 646-0444 A'lTORNEY FOR Plaintiff: Herbert E. Rubin HERBERT E. RUBIN 50 South Welsh Pool Road, #6 Lionville, PA 19353, Plaintiff COURT OF COMMON PLEAS CHESTER COUNTY v. CIVIL ACTION ARNOLD INDUSTRIES, INC. 625 South Fifth A venue Lebanon, PA 17042 NO. .~...~ and , , LEBARNOLD, INC. 4410 Industrial Park Road Camp Hill, PA 17011, Defendants. \ _.J -,-' " ....'\ -... , . . .,(: -,:-.1 _:.~.<;l\ ';], COMPLAINT THE PARTIR" 1. Plaintiff Herbert E. Rubin is an individual, also doing business as Capitol Automated Systems Co., at 50 South Welsh Pool Road, #6, Lionville, Chester County, Pennsylvania 19353. 2. Defendant Arnold Industries, Inc. is a corporation whose principal place of business is 625 South Fifth Avenue, Lebanon, Lebanon County, Pennsylvania 17042. 3. Defendant Lebarnold, Inc. is a corporation whose principal place of business is 4410 Industrial Park Road, Camp Hill, Cumberland County, Pennsylvania 17011. 4. At all times relevant herein, Defendant Lebarnold was a subsidiary, wholly-owned and/or controlled by Defendant Arnold. ,"" ,'" 'l .. ~ ,,'''1 . COMPLAINT Herbe" E. Aubin. Plaintiff v. Arnold Industries, Inc. end Lebarnold, Inc., Defendants does not take title and sell packaging machinery in his own name, and cannot legally bind either the vendor or the purchaser by his words or acts. 10. Because of his many contacts in the food processing business dating back to 1975, Plaintiff Rubin also maintains a separate business brokering contract packaging services; i.e., facilitating contracts between food companies (and others) who require their products to be packaged in certain specified ways (for example, "variety packs"), and companies that perform such packaging services on a contract basis. 11. Prior to its dealings with Plaintiff Rubin, the Arnold Defendants' primary businesses consisted of warehousing, distribution, and freight handling. 12. Commencing in approximately 1991, the Arnold Defendants advised Plaintiff Rubin that they would be interested in providing contract packaging services for food company and other clients that he introduced to them. 13. Plaintiff Rubin and the Arnold Defendants agreed that, for his efforts, Plaintiff Rubin would receive a monthly commission equal to 10% of the gross billings on all new orders and reorders for contract packaging services placed with the Arnold Defendants by any of the food companies and other clients whose first order for contract packaging services from the Arnold Defendants had been solicited or otherwise facilitated by Plaintiff Rubin (such entities are hereinafter referred to as "Rubin's Protected Customers"). 14. Pursuant to this agreement between Plaintiff Rubin and the Arnold Defendants, Plaintiff Rubin was entitled to these monthly commissions on both initial orders and continuing contract packaging business placed with the Arnold Defendants by Plaintiff -3- COMPLAINT Herbert E. Rubin, Plaintiff v. Arnold Industries, Inc. and Lebarnold, Inc., Defendants 18. Plaintiff Rubin accepted this amendment to the parties' agreement in reliance upon the Arnold Defendants' express and implied representations and warranties that the agreement would otherwise remain "as is," with no other changes or modifications. 19. After the contract modification, Plaintiff Rubin continued to broker contract packaging business to the Arnold Defendants, and Rubin's Protected Customers continued to do contract packaging business with the Arnold Defendants. 20. The Arnold Defendants paid Plaintiff Rubin the agreed-upon monthly commission of $3,000 from approximately October of 1994 until March of 1996, after which the Arnold Defendants unilaterally purported to "terminate" the parties' agreement. 21. Despite repeated demands from Plaintiff Rubin, the Arnold Defendants have, since that time, failed and refused to pay him his monthly commission of $3,000. 22. The Arnold Defendants have further informed Plaintiff Rubin that they intend to continue to breach the parties' agreement in the future and to refuse to pay him the agreed-upon commission of $3,000 per month. 23. Upon information and belief, the Arnold Defendants ceased paying Plaintiff Rubin his agreed-upon monthly commission because the contract packaging business, which he had facilitated their becoming well known in and expanding, had become so successful for the Arnold Defendants that they decided to replace Plaintiff Rubin with their own internal sales organization. 24. After deciding that Plaintiff Rubin's future seIVices were redundant and would no longer be needed, the Arnold Defendants unilaterally "terminated" their existing -5- COMPLAINT Herbe" E. Rubin, Plaintiff v. Arnold Industries, Inc. and Lebarnold, Inc., Defendants COUNT III UNJUST ENRICHMENT: OUANTUM MERmT 28. Plaintiff Rubin incorporates by reference the averments of paragraphs 1-27 as if fully set forth herein. 29. The efforts of Plaintiff Rubin substantially contributed to the financial success of the Arnold Defendants' contract packaging division. 30. Upon information and belief, the Arnold Defendants' contract packaging division grew 100% in 1995. 31. Without the efforts of Plaintiff Rubin, major food companies such as H.J. Heinz, Kraft, Quaker Oats, Mystic Beverages, Snapple, Hershey Foods and Cadbury- Schweppes (Motts), and other companies such as Zeigler Brothers, would not have dealt with the Arnold Defendants for their contract packaging needs. 32. The Arnold Defendants have derived substantial revenues, referrals, recognition in the industry, and other economic benefits from the contract packaging business and customers brought to them by Plaintiff Rubin, will continue to derive substantial revenues and other benefits from such business and customers in the future, and, thus, will be unjustly enriched if not required to compensate Plaintiff Rubin for the fair and reasonable value of his seIVices in introducing the Arnold Defendants to numerous of his pre-existing customers and contacts in the food (and other) industries, soliciting contract packaging business from such customers and prospects on the Arnold Defendants' behalf, and helping the Arnold Defendants build and expand a successful contract packaging division. -8- COMPLAINT Herbert E. Rubin, Plaintiff v. Arnold Industries, Inc. and lebarnold, Inc., Defendants '. ~'~ :~ ;~ ~ > ! J if WHEREFORE, Plaintiff Herbert E. Rubin requests judgment in his favor for the fair and reasonable value of the business, contacts, services and other benefits which he provided ,\;- to the Arnold Defendants to enable them to become known, grow, and achieve success within the contract packaging industry, together with such other relief as the Court deems appropriate. COUNT IV MISREPRESENTATION: FRAUDUI,ENT OMISSIONS 33. Plaintiff Rubin incorporates by reference the averments of paragraphs 1-32 as if fully set forth herein. 34. The Arnold Defendants made false statements to Plaintiff Rubin to induce him to amend the parties' agreement in 1994; to wit, (a) that the requested change from a fluctuating commission to a fixed commission was solely on account of the administrative burdens to them of calculating a varying commission each month, and (b) that the fixed commission would not be modified except with the parties' mutual agreement. 35. The Arnold Defendants failed to disclose to Plaintiff Rubin that they were planning to substantially expand their internal sales organization to pursue contract packaging business, that they envisioned his services would no longer be needed, and that converting his commission to a fixed monthly amount would make it easier for them to "terminate" the parties' agreement in the future and cease paying him anything. 36. The false statements of the Arnold Defendants to Plaintiff Rubin were made intentionally andlor with reckless disregard for their truth or falseness. -9- HERBERT E. RUBIN, IN THE COURT OF COMMON PLEAS CHESTER COUNTY, PENNSYLVANIA Plaintiff, ARNOLD INDUSTRIES, INC. and LEBARNOLD, INC., civil Action cO -' c")~-, -' tl'l 0'1 '" .:... 1 - . ~ -iJ at Law:': --,"", I -- '" I- ., , IT1 c:; , ~ ... 0 , ."-- (2 ;'~-:3i'" U1 ., vs. No. 97-05161 Def endants . PRELIMINARY OBJECTIONS Defendants Arnold Industries, Inc. and Lebarnold, Inc., by their undersigned counsel and pursuant to Rules 1028(a) (1) of the pennsylvania Rules of civil Procedure, file the following preliminary objections with respect to plaintiff's complaint: Ob;ection to ImDrODor Venue 1. This action was instituted in this court by plaintiff Herbert E. Rubin ("Rubin"), who purports to reside and do business at 50 South Welsh Pool Road, Lionville, Chester county, Pennsylvania. 2. Defendant Arnold Industries, Inc. ("Arnold Industries") is a pennsylvania corporation whose principal place of business is located at 625 South Fifth Avenue in the Borough of Lebanon, Lebanon County, Pennsylvania 17042. 3. Defendant Lebarnold, Inc., now known as Arnold Transportation Services, Inc. (referred to herein as "Lebarnold," according to the usage in effect during the relevant time period), is a Pennsylvania corporation whose principal place of ",0,_.. business is located in Hampden Township, Cumberland County, Pennsylvania, with its mailing address at 4410 Industrial Park Road, Camp Hill, PA 17011. 4. Lebarnold is a wholly-owned subsidiary of Arnold Industries. 5. Plaintiff avers, incorrectly, that he did business with Arnold Industries "through its Arnold Logistics division . . [formerly] known as ADW." 6. "Arnold Logistics" and "ADW" are fictitious names used by a division of Lebarno1d whose principal place of business is currently located in Hampden Township, Cumberland County, Pennsylvania, with a mailing address at 451 Freight Road, Camp Hill, PA 17011. 7. "Arnold Logistics" and "ADW" are not and never were divisions of Arnold Industries. 8. During the relevant time period, the Lebarnold division using the fictitious names "Arnold Logistics" or "ADW" was located at 4408 Industrial Park Road, Camp Hill, Cumberland County, Pennsylvania 17011. 9. Defendants object to the averments of paragraph 6 of plaintiff's complaint as pure legal conclusions with which they disagree. -2- 10. There are no factual averments in paragraph 6 or elsewhere in the complaint that properly establish venue in this Court against defendants under Pac R. civ. P. 2179. 11. The venue of this action is improper in Chester County, since under Pac R. Civ. P. 2179 plaintiff may only bring this action against the defendant corporations in the county where the causes of action arose, where defendants' registered offices or principal places of business are located, where defendants regularly conduct business, or where a transaction or occurrence took place out of which the causes of action arose. 12. Plaintiff's four (4) causes of action -- for breach of contract, rescission/reformation/accounting, unjust enrichment, and misrepresentation -- all arise out of a series of alleged transactions between plaintiff and Arnold Logistics/ADW that took place from 1991 until April 1996, at which time the business relationship between the parties was terminated. 13. According to plaintiff's averments, all of his claims against defendants accrued on or before April 1996. 14. On information and belief, defendants aver that at all relevant times between the inception and the conclusion of the parties' business relationship in April 1996, plaintiff resided and conducted his business from within the City of HarriSburg, Dauphin County, Pennsylvania. -3- 15. There were no transactions between the parties subsequent to April 1996. 16. Defendants have never communicated, or engaged in any transactions, with plaintiff in Chester County. 17. None of the defendants maintains a business office or employs any employees in Chester County, nor did they do so during the relevant time period. 18. None of the defendants regularly conducts business in Chester County. 19. Plaintiffs' alleged causes of action arose, if at all, in Cumberland county or Dauphin county, but not in Chester county. 20. As stated above, defendants' registered offices and principal places of business are located outside Chester county. 21. No transaction or occurrence related to this action took place in Chester county. 22. Aside from the erroneous allegation that "Arnold Logistics/ADW" is a "division" of Arnold Industries, plaintiff has not alleged any contract, business relationship, transaction, or occurrence involving plaintiff and Arnold Industries. 23. Plaintiff has not alleged any factual or legal basis for imposing liability upon Arnold Industries for transactions engaged in by a division of one of its subsidiaries. -4- 24. Accordingly, venue would not be proper in Lebanon county. 25. Since plaintiff no longer resides in Dauphin County, the most appropriate alternative venue, if any venue is proper, would be the Cumberland County Court of Common Pleas. 26. Defendants were not personally served in Chester county, but their general counsel agreed to accept service of the complaint at his address in Harrisburg, Dauphin county, Pennsylvania. WHEREFORE, defendants Lebarno1d, Inc. and Arnold Industries, Inc. respectfully request that this Honorable Court dismiss the action for improper venue under Pac R. civ. P. 2179, or, in the alternative, transfer the action to the Cumberland County Court of Common Pleas. Respectfully submitted, KEEFER WOOD ALLEN & RAHAL, LLP By:~~7H Eugene ep1nsky, Jr. Attorney Id. No. 23702 Donald M. Lewis III Attorney Id. No. 58510 210 Walnut street P.O. Box 11963 HarriSburg, PA 17108-1963 (717) 255-8051 and -8038 Date: August~, 1997 Attorneys for defendants -5- CERTIFICATE OF SERVICE I, Donald M. Lewis III, Esquire, one of the attorneys for defendants, hereby certify that I have served the foregoing paper upon plaintiff this date by depositing a true and correct copy of the same in the united states mail, first-class postage prepaid, addressed as follows: \D --J Co') f"T1 v I '" '~:; ~.:' :- !~il"" : (1')-.; Thomas A. Schneider, Esquire 455 Pennsylvania Avenue suite 220 Fort Washington, PA 19034 -.::.J-';.'. "", ~.., - ~ . :..) :~ ;..} .;:.. +-, --~ '....' ::.. ~.... S' <.'1 -t:- KEEFER WOOD ALLEN & RAHAL, LLP By ~~ ffr Dated: August 28', 1997 VI ;,t, ':~ , ~; N ~.!- ,I, i, t ~: ':';1 '-q r-- rq ':J HERBERT E. RUBIN, Plaintiff, IN THE COURT OF COMMON PLEAS CHESTER COUNTY, PENNSYLVANIA vs. No. 97-05161 ,0 -' U1 I" '.':J -'1 I r..J ARNOLD INDUSTRIES, INC. and LEBARNOLD, INC., civil Action at Law , " ('-,-,. , Defendants. :, . :-,'1 ..-, ;''3 CERTIFICATION OF SERVICE ('1 Pursuant to C.C.R.C.P. 206.3, this is to certify that in this case, complete copies of all papers contained in defendants' preliminary objections have been served upon the following persons, by the fOllowing means and on the date(s) stated: Name: Thomas A. Schneider Means of Service: Date of Service: First class mail August 28, 1997 Attorney's name: P}'Jd/~' Ht-- e~ld ~is III Keefer Wood Allen & Rahal, LLP 210 Walnut Street P.O. Box 11963 Harrisburg, PA 17108-1963 Address: Id. No.: 58510 Telephone: (717) 763-9497 ,I 4. After reasonable investigation Rubin is without knowledge or information sufficient to form a belief as to the truth of the averments of this paragraph and therefore denies them and demands strict proof thereof by Defendants, if material. S. Admitted that Rubin makes such aI1egations; denied that they are made "incorrectly"; to the contrary, throughout the course of his relationship with Defendants, Rubin believed, and was led to understand, ADW was part of Arnold Industries, Inc. 6. After reasonable investigation Rubin is without knowledge or information sufficient to form a belief as to the truth of the averments of this paragraph and therefore denies them and demands strict proof thereof by Defendants, if material. 7. After reasonable investigation Rubin is without knowledge or information sufficient to form a belief as to the truth of the averments of this paragraph and therefore denies them and demands strict proof thereof by Defendants, if material. 8. After reasonable investigation Rubin is without knowledge or information sufficient to form a belief as to the truth of the averments of this paragraph and therefore denies them and demands strict proof thereof by Defendants, if material. 9. Denied; to the contrary, venue is proper in Chester County for, among others, the foIIowing reasons: (a) Plaintiff Rubin lives and works in Chester County; (b) Rubin's causes of action arise in Chester County; to wit, Defendants ,i 'I'; have failed to pay him ongoing commissions due each month under the parties' contract, since August 1996, those commissions were due and payable in Chester County, and, accordingly, Rubin's contract claims, since August 1996, arise in Chester County; (c) Various transactions and occurrences took place in Chester County from which Rubin's causes of action arise including, among others, (1) Rubin sent monthly invoices to Defendants from his office in Chester County, (ii) Defendants were obligated by contract to remit the monthly commissions to Rubin at his office in Chester County; (iii) and the parties had other communications relating to the performance of the contract within Chester County; and (d) Defendants are part of a multi-million dollar conglomerate regularly doing business throughout the Commonwealth of Pennsylvania, including Chester County. 10. Denied for the reasons set forth in answer to paragraph #9 which is incorporated by reference as if fully set forth herein. 11. Denied for the reasons set forth in answer to paragraph #9 which is incorporated by reference as if fully set forth herein. 12. Denied; to the contrary, Rubin's contract with Defendants called for continuing and ongoing performance by both parties; since August 1996, Chester County is the site from which Rubin stood ready to perform the contract, from which Rubin invoiced Defendants monthly for his agreed-upon compensation, to which Defendants were obligated \0 remit the contractually agreed-upon compensation, and within which communications incident to the foregoing took place. 3 13. Denied; to the contrary, Rubin's Complaint includes (a) claims for damages covering the period after August 1996 when he began to live and work in Chesler County (Count I), and (b) claims seeking a judicial declaration that the contract should continue to be performed by Defendants into the future (Count II). 14. Denied for the reasons set forth in answer to paragraph #13 which is incorporated by reference as if fully set forth herein. 15. Denied for the reasons set forth in answer to paragraph #13 which is incorporated by reference as if fully set forth herein. In addition, Rubin has invoiced Defendants each and every month since August 1996 from Chester County for commissions due him under the parties' ongoing contractual relationship. 16. Denied for the reasons set forth in answer to paragraph #13 which is incorporated by reference as if fully set forth herein. In addition, Rubin has invoiced Defendants each and every month since August 1996 from Chester County for commissions due him under the parties' ongoing contractual relationship. 17. After reasonable investigation Rubin is without knowledge or information sufficient to form a belief as to the truth of the averments of this paragraph and therefore denies them and demands strict proof thereof by Defendants, if material. 18. Denied; upon information and belief, Defendants are part of a multi-million dollar conglomerate regularly conducting business throughout the Commonwealth of Pennsylvania, including Chester County. 4 19. Denied for the reasons set forth in answers to paragraphs #9, 12, 13 and 15 which are incorporated by reference as if fully set forth herein. 20. Admitted. 21. Denied for the reasons set forth in answers to paragraphs #9, 12, 13 and 15 which are incorporated by reference as if fully set forth herein. 22. Denied for the reasons set forth in answers to paragraphs #5, 9 and 12 which are incorporated by reference as if fully set forth herein. 23. Denied for the reasons set forth in answers to paragraphs #5, 9 and 12 which are incorporated by reference as if fully set forth herein. 24. Plaintiff Rubin is advised by his counsel that the averments of paragraph #24 constitute legal conclusions to which no responsive pleading is deemed necessary. 25. Plaintiff Rubin is advised by his counsel that the averments of paragraph #25 constitute legal conclusions to which no responsive pleading is deemed necessary. 26. It is admitted only that counsel for Defendant~ acceptr,d service of process pursuant to Pac R.C.P. 402(b). WHEREFORE, Plaintiff Herbert E. Rubin requests this Honorable Court (I) to deny Defendants' Preliminary Objections, (2) to order Defendants to file an Answer to Plaintiffs 5 CERTIFICATE OF SERVICE I, Thomas A. Schneider, attorney for plaintiff, hereby certify that I have served the foregoing Answer of Plaintiff Herbert E. Rubin :0 Defendants' Preliminary Objections upon defendants this date by depositing a true and correct copy of the same in the United States mail, first-class postage prepaid, addressed as follows: "...,.,!,. ,0 -' ." '--1'\ I_J ~,'1l" "', ~ Eugene E. Pepinsky, Jr., Esquire Keefer, Wood, Allen & Rahal, LLP 210 Walnut Street P. O. Box 11963 Harrisburg, PA 17108-1963 "--.;-';a -~ ~ \; {'-') 'w VLu_____ A-~~ Thomas A. Schneider Dated: September n, 1997 HERBERT E. RUBIN, IN THE COURT OF COMMON PLEAS CHESTER COUNTY, PENNSYLVANIA ';, ". Plaintiff, ;: .' " . vs. No. 97-05161 ~i '~ ARNOLD INDUSTRIES, INC. and LEBARNOLD, INC., Civil Action at Law 1, Defendants. ORDER AND NOW, this day of , 1997, upon review of defendants' preliminary objection to the complaint under Pac R. Civ. P. 2179, plaintifrs answer thereto, deposition testimony, and the parties' respective briefs, IT IS HEREBY ORDERED that defendants' preliminary objections are DENIED. Defendants are further ORDERED to file their Answer to plaintifrs complaint within twenty (20) days of the date hereof. BY THE COURT: J. "... -.- , v/ --1'- ,. l. f:D 97 OCT 23 MIlD: 36 t (IF'i J", ~>. ~ 'Jt f'i.:r)'I"'J"ll- . -.;. . ",j .",., CII;", T'-" c., '-. .-.... ,_ II 1..,-." ~... IN THE COURT OF COMMON PLEAS OF CHESTER COUNTY, PENNSYLVANIA HERBERT E. RUBIN, Plaintiff CIVIL ACTION v. NO. 97-05161 ARNOLD INDUSTRIES, INC. and LEBARNOLD, INC., Defendants DEMAND FOR JURY TRIAL OF PLAINTIFF, HERBERT E. RUBIN Plaintiff Herbert E. Rubin demands a Trial by Jury in the above-captioned matter, pursuant to Pac R.C.P. loo7.1(a). ~I!~ Thomas A. Schneider Identification No. 20571 Attorney for Plaintiff, Herbert E. Rubin 455 Pennsylvania Avenue Suite 220 Fort Washington, PA 19034 Tel. (215) 646-0444 ~ -. '- IN THE COURT OF COMMON PLEAS OF CHESTER COUNTY;:~S~_SYLV ANIA 97 OCT 23 All 10: 36 CIVIL A~:rWlllj,': ~,t l'i-:OlHOIW~.'.:;'''' NO. 97-0Jj[6V EH ell.. ".~ HERBERT E. RUBIN, Plaintiff v. ARNOLD INDUSTRIES, INC. and LEBARNOLD, INC., Defendants ~RTIFICATE OF SERVICE I hereby certify that a copy of Plaintiff's Demand for Iury Trial was served upon Defendants' Counsel this date by depositing a true and correct copy of the same in the United States mail, first-class postage prepaid, addressed as follows: Donald M. Lewis, III, Ir., Esquire Keefer, Wood, Allen & Rahal, LLP 210 Walnut Street P. O. Box 11963 Harrisburg, PA 17108-1963 ~A I~~ Thomas A. Schneider Identification No. 20571 Attomeyfor Plaintiff, Herbert E. Rubin 455 Pennsylvania Avenue Suite 220 Fort Washington, PA 19034 Tel. (215) 646-0444 Dated: October::=', 1997 . . ~ . introduce any customers direclly to any of the subsidiaries of defendant Arnold Industries other than LebArnold, through Amold Logistics (ADW) division. (!d. at 27). In approximately 1994, by plaintifrs account, the arrangemcnt was orally modified from a pcrcentage commission to a Oat $3,000 monthly commission. (Complaint, '\117). Plaintiff now alleges that he was induced by defendants' misrepresentations and intentional omissions to accept this modification. (!d. at '\I 26). In any event, all the conversations surrounding the revision of the agreement took place at defendant's facility in Camp Hill or by telephone between Canlp Hill and plaintiffs office in Harrisburg. (Enck depo., p. 15; Rubin depo., pp. 29- 30). In 1996, Mr. Enck decided to ternlinate the relationship because he believed Rubin had been dishonest in his dealings with the company over a piece of equipment purchased upon Rubin's recommendations. (Enck depo., p. 17). Enck's action was communicated to Rubin via a telephone conversation between Camp Hill and Harrisburg. (ld. at p. 16). Plaintiff does not dispute tbat Enck took this action although he disagrees as to its propriety. (Rubin depo., p. 16). Enck, as the Vice President and General Manager of the Arnold Logistics (ADW) division, was solely responsible for making and carrying out this decision; he was not directed by anyone else to tenninate plaintiff. (Enck depo., p. 16). He confinned his decision in writing in a letter to plaintiff dated May 21, 1996, stating that "we have tenninated our relationship with you. . .. There are no sums due or owing 10 you." (!d., pp. 20-21; defendants' exhibit 2). Nonetheless, plaintiff continued to submit so-called "invoices" for "commissions." (!d., pp. 21-22; defendant's exhibits 2 - 8). These items were FAXed or mailed to Arnold -4- ., , I(.l . Logistics/ADW from plaintiffs office in Harrisburg until October 1996. (Enck depo., pp. 22- 24). In July 1996, plainliffmoved to Chester County. (Rubin depo., p. 3). The "invoices" were not submitted in a consistent fashion; on occasion plaintiff would skip a month and then send an invoice for two months' purported commissions. (Defendants' ex. 8; plaintiffs ex. 2). After Ihe move 10 Chester County, there was a single telephone conversation between Enck and Rubin regarding the dispute over the tennination of the parties' relationship. (Enck depo., p. 27). In addition, Enck wrote to Rubin one last time on January 30, 1997, to reconfinn his view that the relationship had been tenninated and that no further commissions were due. (Enck depo., p. 24; defendants' ex. 7). The only communications between the parties after plaintiff moved to Chester County related to the dispute over defendant's tennination of the relationship and refusal to pay plaintiff anything further. (Rubin depo., pp. 26-27). Plaintiff moved to Chester County for personal family reasons unconnected with his business. (Rubin depo., p. 4). He has continued to maintain a business presence in Cumberland and Dauphin Counties, with a post office box in Harrisburg and a telephone number in Harrisburg (albeit one that is generally set to ring over to plaintiffs office in Chester County). (Rubin depo., p. 18). He has voice mail and can retrieve his telephone messages while traveling. (!d., p. 19). He is "constantly" in the Cumberland/Dauphin County area, traveling there about once a week. (!d., p. 6). -5- .. . .,1 B, Facts Pertaining to the Question Whether the Defendant "Regularl)' Condn(!t~ Rnsinp-ss" in Chester County. Defendant LebArnold, now part of Arnold Transportation Services, Inc. ("A TS"), is a Pennsylvania corporation whose principal place of business is located in Hampden Township, Cumberland County, Pennsylvania, with its mailing address at 4410 Industrial Park Road, Camp Hill, PA 17011.3 (Enck depo, p. 7). LebArnold is a wholly-owned subsidiary of defendant Arnold Industries, Inc. ("Arnold Industries"), a Pennsylvania corporation whose principal place of business is located in the Borough of Lebanon, Lebanon County, Pennsylvania. (!d. at 8). During the period prior to the tennination of the business relationship between plaintiff and Arnold Logistics (ADW), Arnold Industries had four subsidiaries, all of which were separately incorporated: LebArnold; SilverEagle Transport, Inc. ("SilverEagle"); Dalworth Trucking Co., Inc. ("Dalworth," also known as "OW Freight"); and New Penn Motor Express, Inc. ("New Penn"). (!d. at 7-8). Subsequent to that period, LebArnold, SilverEagle, and Dalworth were merged into a new entity (also a subsidiary of Arnold Industries) known as Arnold Transportation Services, Inc. ("A TS"). (!d. at. 32). New Penn remained a separate and distinct corporation after the fonnation of A TS, just as it had been before. (!d.). LebArnold is a regional, full truckload, long distance carrier. (!d. at 7). LebArnold's Arnold Logistics (ADW) division offers warehousing and distribution services, along with contract packaging and order fulfillment services. (Id. at 5). Trucking services are provided .3/ Notwithstanding the subsequent change ofnamc, LcbAmold, Inc. will be referred to in this brief as "LebAmold," according to the usage in effect during the relevant time period, -6- ., primarily to its warehousing and distribution customers. (Id. at 9). LcbAmold (including its division) is headquartered in Camp Hill, Cumberland County. (Id. at 7). It has no offices, places of business, or employees in Chester County. (Id. at 8). }'; At any given time, the Amold Logistics (ADW) division, which plaintiff dealt with, " " maintains only a small number oflarge volume customers for its warehousing, distribution, and " '.~ ;: packaging services. (Id. at 54). None have been from Chester County. (Id. at 9). The division has not targeted or solicited customers in Chester County. (Id. at 10): A search of recent company records revealed no evidence of any pickups or deliveries in Chester County, although LebAmold (including its Amold Logistics division) keeps books and records separate the possibility of a vel)' occasional pickup or delivel)' cannot be ruled out without searching hundreds of thousands of pages of billing records. (Id. at 10, 53). A similar records search for LebAmold did not reveal any evidence of customers or business conducted in Chester County. (Id. at 10). Given the nature of LebArnold's trucking business (long distance, fun truckload), pickups or deliveries in Chester County would be unusual. The average one-way trip for a LebAmold vehicle is 350 miles and rarely under 200 miles (Id. at 74-75), far greater than the distance from LebAmold's Camp Hill tenninal to Chester County. from those of the other Amold Industries subsidiaries. (Id. at 28). It has separate bank accounts. 4 Plaintiff recalled that he attempted to obtain business from a mushroom grower in Chester County, but the effort was unsuccessful, (Rubin depo,. pp, 20~21), Mr, Enck was not aware that plaintiff had attcmpted to solicit a prospective customer in Chester County, (Enck dcpo,. p, 16), Sales calls by othcrs in Chester County were unlikely. although not forbidden. lid. at 58). -7- , ..1 . (Id. at 29). It hires and fires its own personnel, has its own personnel administration, owns or leases property in its own name, purchases its own supplies, and pays for its own utilities. (Id. at 29-30). Trucks are owned independently of other Amold Industries subsidiaries, and if any trucks are bought from or sold to another subsidiary, the transactions are carried out at market value. (Id. at 29). LebArnold is free of control by any of the other subsidiaries of Amold Industries. (Id. at 30). There are no overlapping executives between subsidiaries. (Id.). The names of the various subsidiaries are not used together outside of the Arnold Industries annual report or fonn 10-K. (Id. at 30-31). SilverEagle and Dalworth were, as indicated above, separate and independent from LebAmold during the relevant time period prior to the tennination of plaintiff's business relationship with its Arnold Logistics (ADW) division in 1996. (Id. at 32). In any event, Plaintiff did not do business with SilverEagle or Dalworth, and his activities with Arnold Logistics (ADW) did not affect or concern SilverEagle or Dalworth. (Rubin depo., p. 27; Enck depo., p. 31). Moreover, SilverEagle and Dalworth are regional caniers whose focus is, respectively, the southeast and the states of Texas, Oklahoma, and Louisiana. (Enck depo., pp. 32-33). During the relevant time period, SilverEagle was based in Florida and Dalworth was based in Texas. (Id. at 32). New Penn does do business in Chester County. (Stipulation of parties re: matters raised in preliminary objections). However, plaintiff did not have a business relationship with New Penn, and his activities with Arnold Logistics (ADW) did not affect, concern or benefit New Penn -8- OJ III. Qw:stlon Presented Is the venue of this Court improper for the instant case, where none of the alleged causes of action arose in Chester County, none of the underlying transactions or occurrences took place in the county, and the pertinent corporate defendant has not regularly conducted business in the county; and is a transfer ofthe case to the Cumberland County Court of Common Pleas thereby warranted? Suggested answer: Yes. IV. Areument A. Venue is Improper in Chester County Because None of the Alleged Causes of Action Arose in the County, Nor Did Any of the Underlying Transactions or O(!cllrrenrp.~ Take P19(!e in the County. Under any of the tests that apply to corporate defendants, it was improper for Mr. Rubin to file suit in Chester County. Under Rule 2179(a), a plaintiff may only bring his action against a defendant corporation in the county where the defendant's registered office or principal place of business is located, where it "regularly conducts business," where the causes of action arose, or where a transaction or occurrence took place out of which the causes of action arose.' While convenience for the plaintiff is a flctor, the purpose behind the rule is also to "assure that the county selected ha[s] a substar,rial relationship to the controversy between the parties and [is] thereby a proper forum to adjudicate the dispute." Rllrdett Oxygen Co v I R Wolfe & Sons, Inc., 433 Pac 291, 295, 249 A.2d 299, 302 (1969) (emphasis added). 6Plaintiff docs not claim that there is a statutory basis for venue in Chesler County or any basis other than Rule 2179(2). -10- , 4j .: Plaintiffs four causes ofaclion -- for breach of contract, rescission, unjust enrichment, and misrepresentation -- all arise out of alleged business transactions bctween plaintiff and Arnold Logistics/ADW that took place from 1991 until late 1995 or early 1996. By April 1996, the business relationship between the parties had tenninated. According to plaintiffs own averments, all of his claims against defendants accrued on or before the spring of 1996. (Complaint, ~~ 20, 21, 39). Even if one accepts plaintiffs averment that defendants committed a breach by terminating the relationship, the legal significance of those circumstances does not alter the fact that the relationship ended attha! time. From the inception of the parties' business relationship in April 1996 until it was tenninated, plaintiff resided in HaITisburg, Dauphin County, and dealt with Arnold Logistics (ADW) at its facility in Camp Hill, Cumberland County. (Enck depo., p. IS; Rubin depo., pp. 23- 24; defendants' exhibits I and 2). Thus, all the "transactions" and "occurrences" underlying plaintiffs causes of action took place before he moved to Chester County. See Craig v J W Thiele & Sons, 395 Pac 129, 149 A,2d 35 (1959). Contrary to the conclusory avennents of plaintiffs answer to the preliminary objections (~9(c)), there were no "transactions" or "occurrences" between the parties subsequent to Mr. Enck's termination of the agreement on or before April 1996. On May 21, 1996, while plaintiff was still working out of Harrisburg, there was a clear and unequivocal declaration to plaintiff that "we have terminated our relationship with YOU. . . There are no sums due or owing to you." (Defendants' exhibit 2). Nonetheless, plaintiff persisted in submitting so-called "invoices" for "commissions." (E.g., defendant's exhibits 2 - 8). These purported "invoices" were FAXed or -11- mailed to Arnold Logistics/ADW from plaintiff's officc in Harrisburg until Octobcr 1996. (Enck depo., pp. 23-24). At that timc, a Lionville (Chester County) address appcared on one of the "invoices" for the first time, altbough the item was actually transmitted to ADW by FAX from Harrisburg. (Defendants' exhibit 6). Subsequent "invoices" were sent by FAX from Lionville. Plaintiff's characterization of these items as "invoices" is not controlling, and does not detennine whether a cause of action arose or a "transaction or occurrence" took place at plaintiffs new address in Chester County. Rather, by plaintiff's own admission in the complaint, as confinned in deposition testimony filed pursuant to Pac R. Civ. P. 206.7, the parties' contractual relationship was terminated by Arnold Logistics by April 1996. (Complaint, ~ 20; Enck depo., pp. 20-21; Rubin depo., pp. 16,23-24). No later than May 21,1996, Enck stated in writing that "[t]here are no sums due or owing to you." (Defendants' exhibit 2). Thus, the purported "invoices" were not really invoices at all. Whether or not the termination of the relationship was proper, there was no longer a contractual basis for invoicing anything. Instead, the "invoices" were merely claims for danJages that were allegedly accruing in consequence of the termination of the agreement in April 1996, which plaintiff considers to be a breach of contract. Mr. Rubin apparently understood that his "invoices" would not be paid because they were not submitted in a consistent fashion; on occasion he would skip a month and then send an "invoice" for two months' purported commissions. (Defendants' ex. 8; plaintiffs ex. 2). In construing subpart (a)(3) of Rule 2179, courts determine ~ a cause of action accrues by the same analytical process that determines ~ a cause of action accrues for stalute -12- of limitations purposes. ~,e.g., Brough v Carl rook Allto Sales, Inc ,75 D. & C.2d 132, 134 (C.P. Cumberland 1976), where the court held that vcnuc, for purposes of a breach of warranty claim, was properly established in the county where the calise of action ""en ,ed: where an allegedly defective motor vehicle was delivered to the buyer. Venue was not proper in the county where, quite fortuitously, the defect caused a fire Ihal resulted in damage to Ihe vehicle. !d. at 136. In count I of his complaint, plaintiff alleges a breach of contract. In such actions, the cause of action accrues at the breach, l:.g. (as alleged in the instant case) when the contract has been terminated in an allegedly improper fashion. Packer Soc Hill Travel v Preshy 1 Tniv ,430 Pac Super. 625,631,635 A.2d 649,652 (1993). In Craig, supra, the Supreme Court observed that the act of making a contract and the act of breaching a contract are "transactions" or "occurrences" that support the assertion of venue in the county where the acts were carried out. However, communications leading up to the formation of a contract are mere parts of a transaction that do not support the assertion of venue. Id. at 134, 149 A.2d 35. By parity of reasoning, venue cannot be anchored in a county on the basis of communications that take place after the contract has been terminated, whether or not the act of termination constituted a breach. Plaintiff's counts II (rescission) and IV (fraud) are both premised upon defendant's alleged misrepresentation of the facts underlying the parties' agreement. Plaintiff claims he discovered "the truth regarding [defendants'] conduct" after being notified that the agreement was terminated. (Complaint, ~ 39). Nonetheless, the alleged misrepresentations would necessarily have been made in 1994 in Camp Hill, long before plaintiff moved to Chester County. (!d.,~' 26, 34; Rubin -13- depo., pp. 29-30). No other acts or dates are alleged, nor does plaintiffs deposition testimony reveal any date of "discovery" subsequent to the date he was notified that the agreement was terminated. Hence, the alleged misrepresentations and the act of terminating the relationship are the "occurrences" that best define the accrual of claims asserted in counts II and IV for venue purposes. Finally, plaintiffs count III, for unjust enrichment/qllalllllllllllerllit did not accrue in Chester County or arise from a transaction or occurrence in the county. When such claims are based upon termination of an employment-type relationship, as in this case, the cause of action accrues at the point oftermination. SM ~s v Shoemaker, 443 Pa. Super. 343, 350, 661 A.2d 877, 880 (1995), a1!lll:. deniJ:d, 544 Pac 609, 674 A.2d 1072 (1996). In effect, plaintiff is attempting to make his claims "portable," k, to carry them with him wherever he goes. Courts considering the related issue of jurisdiction under analogous factual circumstances have repeatedly rejected the notion of a "portable" cause of action. For example, in Cadman v Bond, 603 F. Supp. 1335, 1337 (D. Mass. 1985), the court held there was no "long arm" jurisdiction in Massachusetts over a claim for breach of a contract that had been entered into by the parties in Florida. The plaintiffs' relocation to Massachusetts was purely fortuitous; jurisdiction within that state was not appropriate just because the plaintiffs happened to move there, even though the defendants were thcreby "forced" to communicate with the plaintiffs in Massachusetts about the contract as a result of their move. Similarly, in McAndrew v Burnett, 374 F. Supp. 460 (M.D. Pac 1974), the court dismissed, for lack of personal jurisdiction, a medical malpractice action by an individual who -14- moved to Pennsylvania after a doctor negligently left a surgical instrument in her body while perfonning surgery in New York. That court also rejected thc concept of the "portable" cause of action, despite the fact that the object remained undiscovered until after the plaintiffs move and she suffered continuing injury in Pennsylvania. !d. at 463. In Pennehacker v Wayf.1rer Ketch COqJ , 777 F. Supp. 1217 (E.D. Pac 1991), the court found it had no personal jurisdiction over an action by a Pennsylvania resident against an out-of- state employer, where the sole connection between the Commonwealth and the litigation was the fact that the plaintiff had made a unilateral decision to live in Pennsylvania and had arranged for some of his paychecks to be sent there. Just as jurisdiction was found to be lacking in Pennyhacker, venue in the instant case should not be premised upon the plaintiffs unilateral decision to move to Chester County, for his personal convenience and for reasons unrelated to his former employment with ADW/Amold Logistics. Cadman, McAndrew, and Pennehacker addressed the issue of jurisdiction rather than venue. Although those issues occasionally overlap, a more exacting standard necessarily pertains to the detennination of proper venue. Jurisdiction over a foreign corporation may be premised upon "minimum contacts," but venue embodies such concerns as convenience to the witnesses, ease of access to evidence, and fairness to the taxpayers of a particular county whose court system is called upon to hear a controversy that has only a minimal connection to that county. ~ Eml:.sl v Fox Pool rOqJ . 341 Pac Super. 71, 73, 491 A.2d 154, 155 (1985) (motion to transfer under Pa. -15- R. Civ. P. IOOG(d)).' Thus, a cause of action is no more "portable" for venue purposes than it is for jurisdictional purposes. Indeed, it should be considered ll:ss "portable." In this instance, Mr. Rubin's causes of action against defendants (if any ofthem are viable) accrued no later than April 1996, at the time and pl.acJ: of breach. The fact that his damages were, by his account, continuing to accrue even after he made his personal decision to move to Chester County, did not shift the locus of the parties' relationship (which had already been nullified) or his purported causes of action to Chester County. Subpart (a)(4) of Rule 2 I 79 was intended by the Legislature to ensure that the county selected for suit by the plaintiff is not only convenient for him and the witnesses, but also bears a substantial relationship to the controversy. Burnett Oxygen, supra; Connty Constmction Co v Livengood Constnlction COl:p, 393 Pa. 39,44,142 A.2d 9 (1958). Venue must not depend upon a fortuitous event (in this instance, plaintiff's decision to move to Chester County) that occurred after the parties' relationship tenninated. B. Venue is Improper in Chester County Under the "Regularly Conducts Rlldness" Tpst. None of the defendants maintains a registered office or principal place of business in Chester County. (Sl:l: complaint, ~ 6; and see plaintiff's answer to preliminary objections). 7/ Prior to the 1988 amendment of the federal venue statule, 28 V.S.C. ~ 1391(e), which liberalized the 1i:dcr1d corporate venue standard by effectively equaling it to the standard that determines the existence of personal jurisdiction, the better reasoned view was that a stricter standard than the jurisdictional "minimum contacts" test was necessary for determining whether a corporation 1S "doing businessl' in a district. Su: Mayhrllin(' ("0 v NOXf'1I C'otp . 813 F.2d 901 t 904 (8th Cir. 1987); P r Pmd, rntp v WilliAm" 418 F. Supp. 331, 332 (M.D. Pa. 1976),lijljl. dism. 556 F.2d 568 (3d Cir.1977). -16- ~' Defendant Arnold Industries' headquarters is located in Lebanon County, and the headquarters of defendant LebAmold and its ADW/Amold Logistics division are located in Cumberland County. (Enek depo., pp. 4,7,8). Plaintiff has alleged, in conclusory fashion, that the defendants "regularly conduct business" in Chesler Counly, within the meaning of Rule 21 79(a)(2). However, none oflhe defendants has sufficient ties to Chester County for venue to be proper on that basis. This "general" venue rule pennits a corporation to be sued in a county where it "regularly conducts" business even though the plaintiff's causes of action may not be connected in a suh.tantial way with the defendant's activities in that county. Purcell v Bt:yn Mawr Hosp, 525 Pa. 237, 243, 579 A.2d 1282, 1284 (1990); M."el v Glassman, 456 Pa. Super. 41, 689 A.2d 314 (1997). As discussed above, there is no real connection between plaintiff's claims and Chester County; the Court should ignore Mr. Rubin's ploy of continuing to send so-called "invoices" from Chester County after he was clearly advised they would not be paid. When it is asserted that a corporate defendant "regularly conducts" business in a county, the court must evaluate both the "quality" and the "quantity" of its business contacts with that county. Purcell, SIIjl.[a at 244, 579 A.2d at 1285. This is necessarily a case/fact-specific inquiry. !d. "Quality" means those business contacts "directly, furthering or essential to, corporate objects," but does not include merely "incidental" activities. !d. "Quantity" means those corporate acts that are "so continuous and sufficient to be general or habitual." !d. "Quality" and "quantity" must both be assessed. Mathues v Tim-Rar ("ol:p, 438 Pa. Super. 231, 234, 652 A.2d -17- . , solicited in Chester County, but he admitted that no business was actually transacted. (Rubin depo., pp. 20-21 ). Mr. Enck was unaware of any attempt to solicit business in Chester County. (Enck depo., p. 57). In an alternative attempt to meet the "regularly conducts business" test, plaintiff will apparently point to activities by an independent subsidiary of Arnold Industries, New Penn Motor Express, Inc. ("New Penn"). It is conceded that New Penn "regularly conducts business" within Chester County for purposes of venue under Rule 21 79(a)(2) in an action against New Penn. (Sl:l: stipulation of parties filed concurrently with this brief). However, New Penn is not a defendant in this case. Furthennore, New Penn and LebArnold (with its ADW division) are independent corporations with separate assets, management, employees and personnel administration, financial books and records, and bank accounts. (Enck depo., pp. 28-3 I). Their modes of business are different: LebArnold is a long-distance, full truckload carrier, while New Penn is a less-than-fuIl- truckload, short-haul carrier. (Id., pp. 7, 54). Moreover, there was no business relationship between plaintiff and New Penn (Rubin depo., p. 27), nor did plaintiffs agreement with ADW/Arnold Logistics have any impact on New Penn, on its bottom line or otherwise. (Enck depo., p. 33). Thus, there is no basis whatsoever for imputing LebArnold's liability in this action, ifsuch was ever established, to New Penn. Likewise, there are no facts set forth in the complaint, nor has any evidence been identified by plaintiff that would justify imputing LebArnold's liability in this action, if any, to the holding company, Arnold Industries. The mere fact that one of the subsidiaries of Arnold Industries, New Penn, conducts business in Chester County, when New Penn had nothing to do with the matters -19- . , underlying plaintiffs claims, does not provide a sufficient basis for haling another subsidiary, LebArnold, into court in Chestcr County. Undcr such a strained theoretical approach to venue, plaintiff has to go downstream to New Penn's busincss in Chester County, back upstream to the holding company, then downstream again to LebAmold, which did not regularly conduct business . in Chester County. Rule 2179 does not pernlit vcnue to be based on such remote and attenuated connections. Furthermore, there is no caselaw under Rule 2 I 79(a) that would support such an approach. However, corporate relationships have been considered in the somewhat analogous context of jurisdiction. To establish jurisdiction in a Pennsylvania court over a foreign corporation on the basis of the activities of its subsidiary, it is necessary to show that the resident subsidiary is the "mere instrumentality" or aller ego of the non-resident parent corporation. Botwinick v Crenil Rxchaocc, Inc, 419 Pa. 65, 213 A.2d 349 (1965). Subsidiaries, even if wholly-owned, are presumed to be separate and distinct entities from their parent corporations. Clark v Matsushita Rlec Indus Co, LId, 81 I F. Supp. 1061, 1067 (M.D. Pa. 1993). For a subsidiary to be considered the aller ego of its parent corporation, there must be such pervasive domination and control by the parent that the subsidiary is a rendered a "mere instrumentality." ld. at 1067. Mere owncrship of the subsidiary is not enough, nor is the fact that an officer of the parent corporation sits on the board of the subsidiary enough to establish an allcr ego relationship. ld. at 1067. Nor does such a relationship arise from thc fact that financial information regarding the parent and ile :;;'usidiaries is lun.'ped together on an annual report for the parent corporation. -20- . . " , In this instance, venue would be proper in the Cumberland County Court of Common Pleas. Cumberland County is the county where the agreement was created, where it was performed, and where the decision was made to terminate the agreement. It was also the location from which that decision was communicated, and the location where ADW/Arnold Logistics refused to make any further payments. (Enck depo., p. 17; defendants' exhibit 2). ~ Deeter- Ritchey-Sippel A<sociates v Westminster rollege, 238 Pa. Super. 194, 197,357 A,2d 608, 610 (1976) (venue appropriate in county where a contract with the plaintiff was formed and where the defendant's executive committee met and decided to terminate the contract); Matluu:.< v Tim-Rar Cw:p., 438 Pa, Super. 231, 652 A.2d 349 (1994) (venue proper in county where contract that defendant allegedly breached had been entered into). Aside from the erroneous allegation that "Arnold Logistics/ADW" is a "division" of Arnold Industries, and the unsupported blanket assertion that the contract was entered into with "the Arnold Defendants," plaintiff has not alleged any contract, business relationship, transaction, or occurrence involving himself and Arnold Industries. At best, plaintiff can only say that he thought he was dealing with Arnold Industries when he contracted with Mr. Enck, the general manager ofa division of one of its subsidiaries. (Rubin depo., p. 31). Plaintiff has not alIeged any factual or legal basis for imposing liability upon Arnold Industries for transactions engaged in by a division of one ofils subsidiaries. It is well established that a parent corporation is not generally liable for the acts of its subsidiary. McCarthy v Ference, 358 Pa. 485, 499, 58 A.2d 49 (1948); Else v Innight Cinema Intern. Inc., 465 F. Supp. 1239,1241 (W.D. Pa. 1979). Accordingly, venue would Illl1 be proper in Lebanon County. -22. HERBERT E. RUBIN, IN THE COURT OF COMMON PLEAS CHESTER COUNTY, PENNSYLVANIA PlaintifJ: vs. No. 97-05161 ARNOLD INDUSTRIES, INC. and LEBARNOLD, INC., Civil Action at Law uJ '. ~ {.. Defendants. fBAEClPE TO FILE DEPOSITION TRANSCRIl'TS TO THE PROTHONOTARY: Please file the accompanying transcripts and exhibits of the following dcpositions taken in this matter: Douglas B. Enck (October 29, 1997) and Herbert E. Rubin (October 29, 1997). These deposition transcripts and exhibits are being filed pursuant to Local Rule 206. I .D(3) and Pa.R.Civ.P. 206.7, for consideration in connection with defendants' pcnding preliminary objections. Respectfully submitted, KEEFER WOOD ALLEN & RAHAL, LLP By: 'It-..L;(;;''' /~,..; /tJ-- Eugene. insky. Jr. Attorney Id. No. 23702 Donald M. Lewis III Attorney (d. No. 58510 210 Walnut Strcct P.O. Box 11963 Harrisburg, PA 17108-1963 (717) 255-8051 and -8038 :;) IN CONSIDERATION OF THE FOREGOING, plaintiff and defendants stipulate as follows: \, New Penn Motor Express, Inc., is a wholly-owned subsidiary of defendant Arnold Industries, Inc. 2. New Penn Motor Expres~, Inc. has. dnring th~ p:,gt !h'e (5) years, "reguiarly conduct[ed] business" within Chester County for purposes of venue under Pa. R. Civ. P. 2179, subsection (a)(2) ~. 3. This stipulation is entered into subject to the parties' express reservation of their respective positions and objections as to the relevance, discoverabiIity, and admissibility of the information contained in the foregoing paragraphs. SO STIPULATED. Dated: May L, 1998 KEEFER WOOD ALLEN & RAHAL, LLP By: Dated: May ~, \998 ~?' ~)...;1 Donald ~. wis III, Esquire Attorneys for defendants ~~A- h~ Thomas A. Schneider. Esquire Attorney for plaintiff -2- '. -t, .. HERBERT E. RUBIN, IN THE COURT OF COMMON PLEAS CHESTER COUNTY, PENNSYLVANIA No. 97-05161 Plaintiff, vs. ARNOLD INDUSTRIES, INC. Civil Action and LEBARNOLD, INC., or:; J Defendants. ,:J BRIEF OF PLAINTIFF, HERBERT E, RUBIN, IN OPPOSITION TO PRELIMINARY OBJECTIONS OF DEFENDANTS " I. INTRODUCTION Plaintiff Herbert E. Rubin (Rubin) works and lives in Chester County. In July 1997 he sued Arnold Industries, Inc. (Arnold) and a subsidiary called Lebarnold. At the time his suit was commenced -- (1) Rubin had lived and worked in Chester County for over a year. (Rubin deposition, p.3) (2) Arnold was a' $350,000,000.00 international transportation, warehousing and distribution conglomerate, headquartered in nearby Lebanon, Pennsylvania. (Arnold 1996 Annual Report, p.7)[The authenticity and use of Arnold's 1995, and 1996 Annual Reports without the need to attach them as deposition exhibits was stipulated by counsel during the deposition of Douglas Enck (Enck). p.65. Relevant excerpts from Arnold's 1995 and 1996 Annual Reports are attached hereto as Exhibits A and B.] (3) Arnold was party to an agreement with Rubin obligating the company to pay him ongoing monthly commissions of $3,000.00 each month. (Defendant's Exhibit 1 to Enck deposition). 1 ..; . Prior thereto, Arnold had suspended these payments to Rubin and had tricked him Into renouncing other valuable rights. The net effect -- Rubin, a resident of this county, sustained injuries here and was not receiving his promised monthly revenue stream. As a result, Rubin was forced to turn to the courts for relief. Understandably, he sought relief in Chester County where he lives and works, and where all of his files and records pertaining to the suit are maintained. (Rubin, p.4) Curiously, despite Arnold's network of interrelated trucking, warehousing and distribution companies -- operations that literally span all of the United States from Maine to Florida, and then west as far as Texas and Colorado (Arnold 1996 Annual Report, p.5) -- Arnold has chosen to contest the venue of Rubin's law suit. As will be shown, however, proper venue rests in Chester County for several reasons __ o Arnold's refusal to continue to pay Rubin the ongoing monthly commissions he had earned is a transaction or occurrence arising in this county. o Arnold's deceptive practices inflicted injury upon Rubin in Chester County, and, hence, such causes of action arise here. o Arnold's New Penn Motor Express sUbSidiary regularly conducts business in Chester County (Stipulation of Facts, p.2), was directly and substantially benefited by Rubin's efforts (Rubin, p.28-29), and Arnold is estopped by its own conduct from now contesting venue on the basis of hitherto undisclosed distinctions between the parent company and a subsidiary (Lebarnold) whose status as a separate entity was not disclosed to Rubin during the course of their long-term relationship. (Rubin, p.12) 2 .., .' II STATEMENT OF FACTS Rubin is a broker of packaging machinery. (Rubin, p.B) Beginning around May or June of 1991, Rubin and a company he believed to be Arnold began doing business under an oral agreement. (Rubin, p.9) The gist of the relationship involved Rubin's using his pre-existing contacts in the packaging industry to help Arnold jump start its fledgling contract packaging business. For every new account that Rubin brought to Arnold, he was to be paid an ongoing 10% commission on all orders -- new and repeat--that the customer gave to Arnold for contract packaging services. (Defendant's Exhibit 1 ; Complaint, count I) Before Rubin got involved, Arnold was providing contract packaging services to only one account. (Rubin, p. 13) Contract packaging consists of providing turnkey solutions for customized packaging products of any size to suit the customer's special needs (for example, bundling food items into a "variety pack"). (Arnold 1996 Annual Report, p.6) Over time, Rubin succeeded in persuading his customers to hire Arnold to provide contract packaging; others he Introduced to Arnold's services, but no firm decisions had been made by the time Arnold stopped paying him. (Rubin, p. 13) Rubin brought yet other accounts to Amold; however, if Arnold was already doing business with a customer in a different capacity (e.g., trucking, freight handling or warehousing services), the company refused to pay Rubin any commissions for the incremental contract packaging work he brought In, even though Arnold would not have obtained the business without Rubin's efforts. (Rubin, p.14) Fueled by Rubin's efforts, Arnold's contract packaging business grew rapidly -- by 100% in calendar year 1995 alone. (Arnold 1995 Annual Report, p.8) 3 ~ In late 1994 or 1995 (Defendant's Exhibit 1; Enck, p.15), Arnold asked Rubin to amend the commission structure of their oral agreement. Allegedly because keeping track of fluctuating commissions each month was a "bookkeeping nightmare" for Arnold (Rubin, p.14), Arnold requested, and Rubin agreed, to convert his commissions, instead, to a fixed sum of $3,000.00 per month. Arnold's suspension of these ongoing commission payments to Rubin in 1996 forms the crux of this litigation. Rubin contends that the continuing commissions were payable on account of his efforts to create customers for Arnold's contract packaging business. Accordingly, he further contends that defendants did not have the unilateral right to stop paying the commissions he had earned, absent a mutual agreement. Arnold disputes this characterization of the relationship, but, importantly, it admits that, if Rubin is correct, then the invoices he submitted to the company and which are still owed to him (Plaintiffs Exhibits 1-11) would all be payable in Lionville, Chester County. (Enck, p.46) Rubin also contends in this law suit that Arnold tricked him into abandoning the fluctuating 10% monthly commission. and replacing it with a fixed sum. (Complaint, counts II and IV) He now realizes that Arnold's requested change had very little to do with "bookkeeping" problems, as he was told, and everything do to with Arnold's (then undisclosed) corporate plans to replace him with an in-house sales staff for its burgeoning contract packaging business. Switching Rubin to a fixed monthly commission, as a prelude, made it a lot easier for Arnold to take the next step -- cutting his payments off entirely. But for Arnold's deception, Rubin would have continueu to be entitled to a 10% commission on repeat sales from his accounts - whenever one of them reordered -- and wherever he may have been located at the time of the reorder. By getting rid of Rubin, Arnold 4 avoided the prospect of double payments. With him out of the way, the company would only have to pay its sales employees for servicing his accounts, and not also continue to compensate Rubin, as originally agreed, for his initial efforts at bringing the accounts in the door. III. ARGUMENT (A) THE FAILURE TO MAKE A SINGLE PA YMENT IN A COUNTY QUALIFIES AS AN "OCCURRENCE" UNDER PA. R.c.P. 2179(a)(4); ACCORDINGL Y, ARNOLD'S FAILURE TO MAKE A STREAM OF CONTINUING MONTHL Y PA YMENTS TO RUBIN IN CHESTER COUNTY CONFERS VENUE ON THIS COURT. Arnold cites Burdett Oxvoen Companv v. I.R. Wolfe & Sons. Inc., 433 Pa. 291. 249 A. 2d 299 (1969) for the proposition that proper venue does not lie in Chester County. Actually, however. that case and its progeny strongly support Rubin's choice of forum. In Burdett the defendant was obligated to send orders to the plaintiff in Montgomery County. Defendant failed to do so. The Supreme Court observed that the failure to deliver such orders constituted an occurrence out of which the plaintiff's cause of action arose. Analogously, Rubin alleges that Arnold was obligated to send commission payments to him each month. Starting in 1997 these payments should have been remitted tll Chester County. Arnold's failure to make ongoing commission payments to Rubin, under the holding of Burdett, constitutes an occurrence in this county out of which his contractual causes of action arise. Lower court decisions following Burdett confirm that a defendant's failure to pay is an occurrence under Pa. R.C.P. 2179(a)(4). See. e.g., Oxford Container Co. v. CR 5 ~ ,. Containers E-T-C Limited, 23 D. & C. 3d 613 (C.P. Adams 1982)("The question is whether venue lies in this county because defendant failed to make l! pavment here. The answer is yes.")(emphasis added) Accord: Food Industries Research & Enoineerino. Inc. v. Kansas Beef Industries, Inc., 21 Cumbo 34 (C.P. Cumbo 1971)("[I]t is clear that an occurrence out of which the cause of action arose in this case was the failure of the defendant to make payment to the plaintiff at its place of business....") The courts in Oxford Container and Food Industries found proper venue based on a sino Ie failure to pay. Here, by contrast, Rubin invoiced Arnold from Chester County, and was entitled to, a series of commission payments, totaling 12 in number, up to the lime of his deposition. Accordingly, venue in Chester County is proper under Pa. R.C.P. 2179(a)(4) based upon a series of occurrences, not just a single one. Arnold resists this logical conclusion on a faulty premise -- namely, that since its initial failure to pay Rubin occurred while he still lived in Harrisburg, that is the only place where a transaction or occurrence arising from its non-payment to him could have taken place. Hence, according to Arnold, venue cannot lie anywhere else under Pa. R.C.P. 2179(a)(4). To begin with, the broad venue provisions of Pa. R.C.P. 2179(a)(4) countenance concurrent venue in more than one county. Telstar Corp. v. Berman, 281 Pa. Super. 443, 422 A. 2d 551 (1980). The fact that venue might also be proper in Cumberland or Dauphin Counties does not disqualify this Court from adjudicating the plaintiffs grievances. In speaking of the intent behind Rule 2179, Mr. Justice Cohen, in oft-quoted language from Countv Construction Companv v. Livenoood Construction Corporation, 393 Pa. 39, 43, 142 A. 2d 9 (1958), said the following: "This new and broad venue provision was drafted from the Illinois Code of Civil Practice by the Procedural Rules Committee and was first adopted in 6 . Pennsylvania In 1939 in the rules governing actions brought against partnerships. See Pa.R.C.p.2130. Its purpose was to permit a plaintiff to institute suit against the defendant in the countv most convenient for him and his witnesses and to assure that the county had a substantial relationship to the controversy between the parties and was thereby l! proper forum to adjudicate the dispute." (emphasis added) Chester County is demonstrably the most convenient forum for Rubin in which to proceed. And It has a substantial relationship with the controversy __ tens of thousands of dollars in unpaid commissions due to one of its residents, accruing between the lime he moved here In July 1996 and his deposition in October of 1997. Chester County has a compelling and legitimate interest in permitting one of its residents to seek to collect sums that should have been remitted to him in this county but for the defendants' refusals to pay. Arnold attempts to buttress its novel reading of Pa. R.C.P. 2179(a)(4) with case citations from unrelated subject matters. For example, Packer Soc. Hill Travel and Fowkes, cited by defendants, are cases exploring when the statute of limitations for breach of contract begins to accrue. Cadman, McAndrew and Pennebacker examine whether minimum contacts have been established with an out-of-state defendant so as to satisfy due process mandates of the Federal Constitution. The statute of limitations reflects our Commonwealth's fundamental policy that stale claims cannot survive indefinitely. Courts are therefore instructed to determine when the plaintiff's duty to enforce his rights should have commenced. Given the purpose of such statutes (including to give repose to stale claims after the passage of time), it is both unremarkable [and Irrelevant to a venue contest] that the clock starts to tick when the contract is first breached. As Mr. Justice Cohen recognized, venue relates. essentially, to the convenience of the litigants. By contrast, personal jurisdiction addresses a fundamental constitutional question -- the competency of a court to determine a controversy and to bind a foreign 7 . " corporation by its adjudication. The requirement for minimum contacts flows from the Due Process and Full Faith and Credit Clauses of the Federal Constitution. See Countv Construction Co., supra; see also 6 Goodrich Amram 2d Sec. 2179:2 (1992). Determining whether an out of state corporation's contacts with a distant forum meet a constitutionally mandated test demands far stricter scrutiny than deciding venue under Pa. R.C.P. 2179, where the watchword is convenience. In the matter before this Court, the plaintiff lives, works and was consistently not paid here ._ and the courthouse is located a mere 61 miles from Arnold's headquarters. (Enck, p.39-40) Defendants' effort to shift focus away from these simple facts should not be allowed to deprive the plaintiff of his preferred venue in which to proceed. B. VENUE IN TORT ACTIONS ARISES WHERE INJURY TAKES PLACE, NOT WHERE THE ACT LEADING TO INJURY IS COMMITTED. ARNOLD'S DECEIT INDUCED RUBIN TO RELINQUISH VALUABLE RIGHTS, THUS CAUSING HIM INJURY IN CHESTER COUNTY WHERE HE WAS DEPRIVED OF THE VALUE OF THOSE RIGHTS. In Gaetano v. Sharon Herald Co., 426 Pa. 179,231 A. 2d 753 (1967), the Supreme Court, applying Pa. R.C.P. 2179 to a tort cause of action, held that the rule was designed to give a plaintiff, who has a tort committed upon him by a corporation, the opportunity to obtain redress in his own bailiwick, a convenient forum to him, without the undue expense, inconvenience and delay of resorting to a forum in a distant metropolitan area. In this case Rubin seeks relief from, among other things, Amold's fraud. The fraudulent conduct induced him to relinquish a valuable right. That right was his entitlement to 10% commissions on future reorders placed by customers whom he initially introduced to Amold, for so long as those reorders continued to be generated. 8 As with Rubin's causes of action for breach of contract, Arnold hangs its hat on the (undisputed) fact that the fraud initially took place while Rubin still resided in Harrisburg. Once again, however. Arnold's defense misses a key point. Each and every time one of Rubin's protected accounts reorders from Arnold __ and he is not compensated for that reorder -- he suffers injury. That injury is the commission dollars he forfeited on such reorders -- based on defendants' deception and deceit. The Supreme Court of Missouri analyzed venue in a similar-type context _ namely, where the plaintiffs were suing for occupational injuries sustained over time. In State Ex Rei Clark v. Gallaoher, 801 S.w. 2d 341 (Mo. en banc 1990), the Court determined, with respect to the plaintiffs' work-related hearing loss inflicted over a period of time and in a number of places, that venue would be proper in >!!1l!..county in which the injuryldisease, or some part of it, had occurred. In this case Rubin fulfilled his end of the bargain when he introduced his accounts to Arnold. But for Arnold's fraud, Rubin would continue to receive repeat commissions on all of their reorders -- whether he resided in Harrisburg or Chester County at the time. Arnold's suggestion that Rubin had headquarters responsibilities he could not fulfill from Chester County has been squarely refuted by Rubin (Rubin, p.24- 25), and Arnold's effort to graft a new limitation onto Rule 2179's broad remedial purposes should be rejected. The case authority cited by defendants simply does not support the proposition that only the county where a tort-induced injury first occurs can properly retain venue over the tort claim. The construction Arnold asks this Court to place on Pa. R.C.P. 2179 is at odds with our Supreme Court's view that the rule is broad and remedial and intended to enable suit to proceed in the county most convenient to the plaintiff, especially where ongoing injury continues to accrue to him here. 9 C. ARNOLD'S SUBSIDIARY REGULARL Y CONDUCTS BUSINESS IN CHESTER COUNTY; SUCH CONTACTS SHOULD BE ATTRIBUTED TO ARNOLD FOR VENUE PURPOSES BECAUSE THA T SUBSIDIARY WAS DIRECTL Y BENEFITED BY RUBIN'S SALES EFFORTS AND BECAUSE OF ARNOLD'S CONSISTENT FAILURE _ IN DEALINGS WITH THIRD PARTIES INCLUDING RUBIN -. TO DIFFERENTIA TE AMONG VARIOUS CONSTITUENT COMPANIES IN A LEGALL Y PROPER MANNER. The record before this Court demonstrates Arnold's consistent failure to notify third parties, including Rubin, of the proper legal form of the entity, Arnold Logistics/ADW, with whom they were dealing. Rubin, for one, always was led to believe, and believed in good faith, that his relationship, including his oral agreement, was with a division of the parent company, Arnold Industries, Inc. (Rubin, p.12) Rubin's belief was confirmed by his introductions to Mr. E.H. Arnold, the Chairman/Chief Executive Officer of Arnold Industries, Inc., and by the fact, admitted by defendants, that his commission checks sometimes came directly Arnold's corporate headquarters. (Enck, p.56) Defendants seek to shift focus from their imprecision by citing cases that address a different subject, the piercing of corporate veils and imposition of "alter ego" liability. Piercinglalter ego cases, however, probe the extreme (and unusual) circumstances under which the corporate shell will be ignored and personal liability assessed on individual shareholders. Clearly, shifting corporate liability onto individual owners demands a high level of proof, and deservedly so. For the purposes of venue, however, the standard is different, and the hurdle notably lower. It is axiomatic that a corporation may be estopped from selling up a particular defense by its conduct. 9 Fletcher Cvc. Corp. Sec. 4276 (Perm Ed. 1991) Under appropriate circumstances, the corporate form can be disregarded and venue predicated on the residence of the principal shareholder, and, for venue purposes, the separate status of related entities can also be disregarded. Id., at Sec. 4349.50 10 Those circumstances are presented here. Despite ample notice that Rubin believed that he was dealing with Arnold, no one from the company advised him to the contrary (Rubin, p.11-12). In correspondence with his customers (Plaintiff's Exhibits 14, 15, and 18), with Rubin (Defendant's Exhibits 2,7), and on the business cards that Arnold printed for Rubin to use (Plaintiff's Exhibit 13), the names "Arnold Logistics" and "ADW' appear. Nowhere on those documents, however is it disclosed that the entity "Arnold Logistics/ADW" is not (as the name suggests) a division of Arnold, but rather is part of an unnamed intermediary, Lebarnold. Even Arnold's Annual Reports send mixed signals about the legal relationship among its operating companies. For example, the 1995 Annual Report (page 4) refers to the "Arnold Logistics division (formerly ADW).' The Chairman's 1996 Letter to Shareholders identifies "Arnold Logistics [as] a division of Arnold Transportation Services." (The same description -. "Arnold Logistics is a division of Arnold Transportation Services" -- also appears at page 6.) In 1995 and 1996, Arnold Transportation Services was the name for Arnold's "truckload and logistics operation," but was not a separate legal entity. (Arnold 1996 Annual Report, p.1) Arnold is represented by one of the premier law firms in central Pennsylvania. A senior partner of that firm sits on its board of directors and serves as its secretary. (Arnold 1996 Annual Report, p.22) Despite this fact, Arnold Logistics/ADW did not reveal in the correspondence and business cards it issued in this matter -- including to Rubin -- the facts upon which it now seeks to hang its venue hat -- that its contract packaging operation was, and should have been identified as, "Lebarnold, Inc., dlbla Arnold Logistics/ADW" [or, in the alternative, "Arnold Logistics/ADW, a division of Lebarnold, Inc.'] 11 Rubin respectfully submits that a well-represented corporale defendant's failure to identify one of its key operations in a legally correct fashion cannot have been Inadvertent. Rather, Arnold's Intent was exactly what it accomplished -- to cause third parties like Rubin -- In their dealings with Arnold's new contract packaging business __ to have the comfort of a reasonable belief that they were doing business directly with Arnold, a $350,000,000.00 public company. (Rubin, p.12) Defendants protest that Rubin's involvement with Arnold Logistics/ADW did not 'affect, concern or benefit" the company, New Penn Motor Express, that it concedes is doing business in Chester County. (Defendants' Brief, p.8) Upon examination, however, this protest cannot withstand scrutiny. Rubin observed New Penn trucks being at ADW's faCility 'all the time." (Rubin, p.29). New Penn was the beneficiary of business Rubin brought in -- its trucks delivered the finished contract packaging work to his customers' designated locations. (Rubin, p.28). Even the Weigh Pack equipment, whose purchase was the ostensible trigger event leading to this litigation (Enck, p. 17-18), was delivered to ADW's facility on a New Penn truck. (Rubin, p.29) Arnold, thus, has contacts with Chester County through its subsidiary; Arnold's subsidiary has been directly and tangibly benefited by the agreement at issue; and Arnold is estopped by its conduct from objecting to venue on legal nuances and corporate intricacies that went undisclosed at the time. IV. SUMMARY Rule 2179 offers four venue hooks. We respectfully submit that Rubin meets three of them. 12 ~~ \III'I/t/ It 11/\ /11 'fjlill'I!Il}1l '\ . 1\""''''"1'"11 "1\""'1>1" rift 1\lflfl\ Ill', I' "1:"", """ " ",' '''1,.1/,., I" lit,. It, ./. '/ 111ft.!.!, 1. "j,'t/\j'f\'1 i:. :'{"\\t/, fllll//'I.., III Illl\{rI/I! I 1/111/1"'" If"'fl/fl \ ' '/1\ I '( It 1~llj t . 1)/1/ 'I" , "tl1". 1\( /1 I}If , In 11". ""Jl/II I .. Itl, Ill! I,. 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I It'!l:.l!.:!(. 1\ II "II1)/JI')II'/)I), "II ii". ''''''''',"' '''''1'1'''''' ,.It., dl,/, ""'1"",.., n Id!t'tllh"'l'I'I' "".", I,., "11,/ "'" ' ')1\ "" lt'l , ,." "" ,I" "'"'' /) I ' "', '''I''''I''It,. '\/1"'1, II' .1 \I"fr/! II',' " , (IJl1lllllJ,.!!"" ' I II ", 1"1i , , "1\/, "~I, ' I, ""'1"'11'", ""I'J,.""""",., , . .<:."" 1/\1111'...., f'I"litlll( , "". '''1iI'''"1 "'fl,iI" ,I,,, , ~ ARNOLD LOGISTICS 1'111' Lq~I"ll\'''' 111\1....11111' h,IIl~l'lIII'" n.lllll" III J'lq.:; III (tII1l111l111l\.11l' mtJlt' dr"lll\"" 11...llll..lllt......'lllrp'J..'. .lIHlld"lIlll\ 1l1l':\i...llll.L: ,IIHI P()ll'llti.d 1-(I"!"Jlll't... \rll,dd I.IJgl'>[II'> \\.1' j'Jf'lIlt'lh kI111\\1l .,..\1)\\ .1 dJ\I'IIJrl ,)1 Il'Il,\rll,dd \111,dll 111~!..rll'" !'I< II.."" <11111\(' dl'\t'I"11I111'1l1 '1111111'1\.111\1', \.dllt'".lddl'(1 \\;II('II'oll"'U1I:. di"lnhull'jll. P.ll k.I:'-:IIl.:'-:, kl!llllg .111.1 10("l"Ill,III"n 1l1.l11,1,!~1'1111'1l! 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"lll'gl'd III 100"" gnJ\\llllll ]$l):; CI\t..'! prior \"l',Il" 1l'\'cl... rl'int"orcillg CHI!" \'il'\\" 111:11 ,\multl ("1 l.{)gi~,'in i.. filling ;In import.llll i-:;tp ill l'.\:i....rmg \ di..lrihlllioll l'h:ulJll'l...., .-\rnold 1.11.~I"II("" h;l., hl'l'n ,I\\"anlcd ,11l11111l'r 11I;!p'r '\1IrtI11';I'1 di,"lrihlllHll1 l'I'lller ,111d p:Kk,lging ,'Olllr;td for 11)1)11 '- ,.'.- ~ : \~:~fi~~f~~: .....:.~~: ...........--.: ~L._: ~.. ,~,"p '. ~'rr~:f: ~.~~ ":r~.~l .' -.'';'':'~' .. .l.. . ..-_::.:J . -. lIlt' \rllclld l.ogl'>li,.. 11I'dC'1" tldldll1lt'lll el'll1l'l "llHlllllt'" 1'1 ,~n)\\ .1" n....ll'IHll.lIIIIIl till It'I\'ITurk"llllg 'I.'nln', IWC111111'" 1\1111\\11 in rIll' llhlLl,rl\ I 1lder 1111" ,'lIllt'pl, !Ill' 'Lilt IlIlI\ id!.... ll!l-IJlll' ()fill'! <"Ill l'\', ,!I'dit 1.lnl ,.PJll"<1\ .J! ,L1ul d(,1l1().~I':lpllll' Illlllllll;lllon ~:.l1hl'nJ1~ ()rdn.. :11'1' ;1\';liJ.d)!1' for pick [),hk. ,tntl i1ll1ll1't1i.lll' ,IIIPlllt'1l1. [lIIJ\'iding 111111ill1l1l11 lndl'l' lye h. 111111.' t'lI 1 II.lll..tit. .. \'U....hHl1l'r.. \!"1101d l.'lgl.'IK'" l1a.. .l!..c) ('7\p.llld- I'd il.. loll' ill lilt' '1l{lw;:ft: l"l'prlJdllt.:liol1 ,lIld ),illlll:.! hit.. I 11\'.... lhrclUgh.l IIUte).. Ulllllllilll1L'llf hellll .111I1[l1c'! ..1)(I\\;ln' 111,lllllLllIUl'erlCl ;l""l'rllhll', W:ll'l'h'HI"l' .lnd di,rnhllll' 111.'\\ ,(111\\;11"\' prtJdlhh, (;111\\111 ill 1 hi... husinl'''' "1'.:":11 It. 11 I l.'Hdt! 1w ..Uh....l;1111ial ill 1<)1)(1,1" \\1.' Ion... .jfl tIll' '>1111\\;11'1..' fl"pr<ldllltI1111 .Ire:l r::;~.':I.~I;~ "'''C~,~I,,~.(; .., ,)r\jf '.'f' ""'l ',' ..1 " r ..:.: 'Ie! i'i 'j[ ;~'. ,,"1 .~ ;'f-l('" IrH ;; .\ ;.' ~ ,', . , I , ,; ~ ! . .H......__.........H. ........H'. BOARD OF DIRECTORS E. II, Arnold Chalnn:ll1, President and Director Arnold Industries, Inc. lIeath I.. Allen, ESl1. Sl:crelary and Director P:lI1l\er . Keefer, Wood, Allen :ll1d Rahal II:lrrlshurH, PA Arthur L. Peterson Director Executive Director - Florida A.'isoclatlon of Colleges and Universities, Madeira Beach, FL Kenneth F. Leedy Executive Vice Jlrcsiuent and Director Arnold Industries, Inc, Itonald E. Walborn, el'A Tfl.';lsurer :lnd Director President. W:llborn Shamh:lch ,\.~sodates Harrisburg,I'A STOCKHOLDER INFORMATION Counstl Messrs. Keefer, Wood, Allen and Rahal 210 Walnut Street Harrisburg, PA 17101 Auditors Coopers & Lybrand L.L.)'. One South Market Square Harrisburg, PA 17101 Registrar and Transfer Agent Registrar and Transfer Company 10 Commerce Drive Cranford. NJ 07016 Stock Usting Arnold Industries. coml11on stock is tr:lded on the NASDAQ National Markct System. TI1C stock symbol is AIND. tn newspapers, the stock is listed as "Arnoldfnd", "Arnold Inds" or similar variations. There were approxim:lle1y 1200 record. holders of the Company's common stock as of .\1:Irch 18, )996. The number of bencl1cial owners is considerably grealer. Annual Meeting of Stockholders The Arnold Industries 1996 Annual Mecting of Stockholders will be held 4:00 PM, May I, 1996 at .the Lehanon Country Club, 3375 West Oak Street, Lebanon, Pennsylvania Investor Infonnation Stockholders, securities analysts, portfolio nun:J.gers. reprcsen- t:nives of financial institutions and individuals seeking financial and operating information, including ('opics of Foml IO.K, may cont~lct: Corper.lIe Secretary Arnold Industries, Inc. 625 South Fifth Avenue Lebanon, I'A 17042 (717) 27<-2521 Carlton E. Hughes Director Chairman. Stewart - Amos Sleel, Inc. l-IarrisuurSf, PA Copies of the Company's Fonn lO-K will be supplied to stockholders upon request without charge. Dividend Reinvestment/Cash Purchase Plan 111is plan cn:lbles you, as a stockholder, to apply your di\'idends on the Company's stock towards the purchase of additional shares of Arnold Industries, Inc. Common stock on an autom:uic basis. Also, at your option, you may make quarterly cash payments from 525 to $3,000 to purch:lsc additional stock. TIle Company pays the broker.lge cOlllmissions and administrative fees connected with your participation in this Plan. partil'ipation in the Plan is entirely ,'olunl.1l")' .1nd you may enroll or withdraw at any time. The Plan is administered by Registrar and Transfer CompilOY, Arnold Industries' stock tr.lOsfer agent. For infonnation call 800.368.;9.8. Quarterly Reports TIle Company presently sends to its stockholders of record a quancrIy report from its President, Edward H. Arnold, summariling resuhs of oper:J.tions for the most recent quarter. If rou are not a stockholder of record. hut instead hold your stOl'k in the name of a broker or other nominee, you may also receive these quarterly reports by requesting this report and supplying rour mailing address 10 the Company. Requests should be mailed to the Company to (he :mention of the Corpora Ie Secn.'tary. 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'iil .0/1 t'L" .\\ I " <lti 'I;/' ""1>' ~"'.\I. iiI" 'Ii!,' ')/).1/ OH'[/ }<llit 'Ill' (Jl). It'I' , ., i/l s / S'I/ I ('I' 'I'd S\'\'I' ','II',' (l'\ (", lJ ,,' (' J 'i', . ,. ,..,1'("11 11],\, C'IIf- ,nt, " , l'I'('j,.."tq' ,ll'ft. 11....(. Iteil. 0,>",\ '/1 fhe " 11('[. ' / 'hI' {b..., ,.,.llJ', .\ -- II pnl~4 n. . SIc O/'oIl)411~ Board of Directors E. H. Arnold Chairman, President, CEO and Director " lIealh L. Allen, Esq. Sccrcl:uy and Director Pm1ncr . Keefer, Wood, Allell ilnd Hallal I-f<trrisburg, PA Arthur I.. Pelerson Director Executive Director. 1;loridil Association of Colleges and Universities, MlIdciru Bench, FL Kennelh F. Leedy Director President - New Pellll Motor Express, Inc. nonald E. Walborn, CPA TrCilSllrl'r Hlld Director President. Walborn SI1<ll11hacll Associates Harrisburg, PA Curlton E. I-Iughes Director Chairman. Stewart - Amos Steel, Inc. Harrisburg, pt\ Stockholder Information Counsel Messrs. Keeler, Wood, Allen and Ilahal 210 Walnut Street Harrisburg, PA 17101 Auditors Coopers & Lybrand L.L.P. One South MarJ<et Square Harrisburg. PA 1710 I Registrar ar.d Transfer Agent Registrar and Transfer Company 10 Commerce Drive Cranlord, NJ 07016 Stock Listing Arnold Industries common stock is lraded 011 the NASDAQ National Market System. The stocl< symbol is AIND. In news. papers, the stock is listed as "Arnoldlnd", "Arnold Inds" or similar variations. There were 1,347 record-holders of the Company's common stock as of March 10, 1997. The numher of beneficial owners is considerably greater. Annual Meeting 01 Stockholders The Arnold Industries 1997 Annual Mceting of StocldlOlders will be held 4:00 PM, May 7, 1997 at the Lebanon Country Club, 3375 Wcst Oak Strect, Lebilnon, Pennsylvania Investor Information Stockholders, securities analysts, portfolio managers, repre- sentatives of financial institutions and individuals seeking financial and operating informatioll, including copies of Form 1O.K, may contacl: Corporate Secretary Arnold Industries, Inc. P.O. Box 210 Lebanon. PA 17042 (717) 273.9058 - Copies of (he Company's l:orm IO-K will be supplied 10 stockholders upon request without charge. Dividend Ueinvcs(mcntlCush Purchase Plan This plall enahles yuu, us a stucl,holder, to apply your clivi- lIl'nds on the Company's sind, (owards the purchase of alllli. lion'll slwres of Arnold Industries, Inc. COl11mOI1 stod: 011.111 automatic basis. Also, al your optiun, you may makc quarterly cash payments frum $25 to $3,000 to purchase additional slock. The Company pays the brol<crage commissions and administrativc fees connccted with your participation in this Plan. Parlicipation in the Plan is cntirely voluntary and you Illay enroll or withdraw at any time. The Plan is administered hy Hegistrar and Transfer Cumpany, Arnold I ndustries' stock transl'L'r agent. For infurmlllion call 800-368-5948. Quarterly Reports The Company presently scnds 10 its stocldlOldcrs of record a quarterly report from its President, Edward H. Arnold, sum- I1mrizing results of operations for the 1110st recent quarter. If you are not a slocldlOlder of record, but instead hold your stock in the name of a brokt.'r or olher nominee, you may also receive these quarterly rcports by requesting this report and supplying yuur mailing address 10 the Company. Hequests should bl' mailed to the Company to the altention of the Corporate Secretary. HERBERT E. RUBIN, IN THE COURT OF COMMON PLEAS CHESTER COUNTY. PENNSYLVANIA Plaintiff, vs. No. 97-05161 ARNOLD INDUSTRIES, INC. and LEBARNOLD, INC., Civil Action Defendants. ") '.J ,\", CERTIFICATION OF SERVICE This is to certify that in this case, assigned to Judge Wood, complete copies of the Brief of Plaintiff, Herbert E. Rubin, In Opposition to Defendants' Preliminary Objections have been served upon the following persons, by the following means and on the date stated: Name: Means of Service: Date of Service: Donald M. Lewis III First Class Mail June 26, 1998 Keefer Wood Allen & Rahal, LLP 210 Walnut Street P.O. Box 11963 Harrisburg, PA 17108-1963 ~/1~ Attorney's Name: Thomas A. Schneider Address: 650 Sentry Parkway, Suite 1 Blue Bell, PA 19422 1.0. Number. 20571 Telephone: (610) 649-6333 HERBERT E. RUBIN, IN TilE COURT OF COMMON PLEAS CHESTER COUNTY, PENNSYLVANIA Plaintiff, vs. No. 97-05161 ARNOLD INDUSTRIES, INC. and LEBARNOLD, INC., Civil Action at Law Dcfendants. REPLY BRIEF IN SUPPORT OF DEFENDANTS' PRELIMINARY OB.JECTIONS Defendant Lebarnold, Inc. and its parent corporation, defendant Arnold Industries, Inc., submit this reply brief in support of their preliminary objections to this action on the ground of improper venue. The reply briefwill address matters raised in plaintiffs opposition brief that were not addressed or anticipated in defendant's original brief. I. PlaintiWs Alleged Cause of Action for Brcach of Contract Accrued and Every "Occurrence" From Which That Cause of Action "Arose" Took Place Bcforc Plaintiff's Unilateral Decision to Move to Chestcr...cmwty. In thc first part of his argument, plaintiffsceks to stretch thc "transaction or occurrencc" test ofRuJe 2 I 79(a)(4) to encompass events that took place afu:r plaintiffs purported cause of action for breach of contract "arose." That test ties venue to a county "where a transaction or occurrence took place 0111 of which the calise o[action arose <emphasis added)." A claim for breach of contract accrucs, i.e., "arises," when "thcrc is an existing right to suc forthwith on the breach of contract." Thorpe v Schocnhnll1, 202 Pa.Super. 375, 377,195 A.2d 870 (1963); I ccdom v. Spano, 436 Pa.Supcr. 18,647 A.2d 221 (1994). Thus, such a cause of action accrues or "arises" "as soon as the contract is broken even though no injury results until afterwards." 22 P.L.E., Limitation of Actions, 9 54, p. 442. For example, in Oxford Container v CR Con F-T-C, 23 D. & C.3d GI3 (C.P. Adams 1982), the defendant's failure to pay the plaintiffs invoice was the initial act that constituted the breach of contract upon which the plaintiff sued, and the court held that venue was proper in the county where payment was due. Logically speaking, any transaction or occurrence "out of which the cause of action arose" could not take place after the cause of action "arose." While this provision has broadened the corporate venue rule to the extent that venue may properly lie in the county where a contract was formed, or where performance took place prior to breach, or where the breach itself took place, the "transactions or occurrences" test does not, by its own terms, include events that transpire after a cause of action has fully accrued. In this case, both the termination of the oral agreement between plaintiff and defendant ADW/Arnold Logistics (division of LebArnold, Inc.) and defendant's subsequent refusal to pay four or five monthly "invoices" all took place before plaintiff made his unilateral decision to move to Chester County, and to attempt to transport his causes of action along with him. Plaintiffs purported cause of action "arose," ifanywhere, in Cumberland and Dauphin Counties and every "occurrence" from which that cause arose took place there as well. I '/ Cumberland County has a continuing interest in the controversy because Arnold Logistics continues to operate its business from there, while Dauphin County's interest waned when plaintiff moved from that county. -2- '. '. Unquestionably, the corporate venue rules contemplate the possibility that venue may exist for a given action in more than one county. Otherwise, Rule 2179 would not have four separate tests for venue, and Rule 1006, whieh permits transfer from a forum of proper venue to another, more convenient forum, would not appear in the Rules of Civil Procedure. However, it takes a huge leap to go from that bedrock principle to the notion that an allegedly aggrieved plaintiff with a fully ripe cause of action can carry it with him wherever he goes, merely by mailing "invoices" for his damages to the defendant. Plaintiffs argument makes convenience to the plaintiff the determinative factor, but that is not the law. While convenience for the plaintiff is a factor, the purpose behind Rule 2179 is also to "assure that the county selected ha[s] a suhstantial relationship to the controversy between the parties and [is] thereby a proper forum to adjudicate the dispute." Bnrdett Oxygen Co v I R Wolfe & Sons, Inc ,433 Pa. 291, 295, 249 A.2d 299, 302 (1969) (emphasis added). In this instance, Chester County has had vinually no. relationship to the controversy, let alone a "substantial" one.2 In Oeeter-P;tchey-Sippel Associates v Westminster College, 238 Pa. Super. 194,357 A.2d 608 (1976) the Superior Court rejected an analogous effort to unreasonably expand the 2/1f convenience to the parties was an appropriate measuring device for venue purposes under Rule 2179, it would have to be noled that all the peninent records of the defendant and all the witnesses employed by defendaot are located in Cumberland County. Moreover, Arnold Logistics would be seriously inconvenienced by the absence of its chief executive and key witness, Douglas Enck" during a trial in Chester County. "The courthouse is at least a I y, hour drive from Mr. Enck's office and residence. By contrast, plaintiff admitted he is "constantly" in the CumberlandlDauphin County area. (Rubin depa., p. 6). -3- III. Venue in Chester County Must Not be Premised Upon Estoppel Theory When Plaintiff Had Full Access to thc Underlying Facts Regarding the Defendants' Respective Corporate Identities. Finally, plaintiff argues that the corporate defendants should be estopped from contesting venue in Chester County because plaintiff was misled by the manner in which the "ADW" and "Arnold Logistics" fictitious names were used by the pertinent division of LebArnold, Inc. In effect, plaintiff contends that he was improperly induced to enter into a relationship with a $19 million division (ADW/Arnold Logistics) of a $3 I million corporation (LebArnold, Inc.), when he thought he was dealing with a $350 million corporation (Arnold Industries, Inc.). (Sl:l: exhibit "A" to opposition brief, 1995 Annual Report). This assertion is absurd on its face.3 The doctrine of equitable estoppel only applies when the following circumstances are present: the party sought to be estopped: I) must have int.entionally or negligently misrepresented some material fact, 2) knowing or having reasons to know that the other party would justifiably rely on the misrepresentation and 3) inducing the other party to act to his detriment because of his justifiable reliance on the misrepresentation. Yurick v Com, 130 Pa. Cmwlth. 487, 497, 568 A.2d 985, 990 (1989). Thus, there must be evidence that the other party was misled, or induced to change his position. Orsato.(;uenon, [nc v Com, 665 A.2d 520, 522 (Pa. Cmwlth.1995). Here, the only "material facts" that were allegedly omitted were that ADW/Arnold Logistics was a division of LebAmold, Inc., and that LebAmold, Inc. was a wholly-owned subsidiary of Arnold Industries, Inc. 31 There has been 00 allegatioo by plaintiff that defendant LebAmoJd, Inc. or its ADW/Amold Logistics division werc not financially viablc cntities. -5- '. . ~ , " 'k .:; , ,,' -' :~ :~ 1: , However, plaintiff had reviewed a copy of the annual report for Amold Industries, Inc. before he entered into any business relationship with Arnold Logistics. (Enck depo., p. 71-72). During the relationship, plaintiff sent copies of annual reports to prospective customers. (Rubin depo., p. 17). Moreover, the common stock of Amold Industries, Inc. has been publicly traded since 1972, the stock is listed on the NASDAQ exchange, and copies of forms IO-K are provided upon request to "individuals seeking financial and operating information." (Exhibits "A" and "B"to opposition brief, I 995 and 1996 Annual Reports). Thus, plaintiff's claim that he was somehow misled by the appearance of Arnold Logistics' stationery and business cards does not ring true. Proof of some element offraud or injustice is required to support the disregard of the corporate form for venue purposes. 9 Fletcher Cyc COQJ 94349.50 (Perm.Ed. 1991). The acts of a subsidiary are not to be imputed per se to a parent corporation for venue purposes. ld. Moreover, estoppels are not favored in the law. ld. at 9 4276, citing Key.tone I ea.ing COQJ v. Peoples Protective I ire Ins Co, 514 F.Supp. 841, 850 (E.D. N.Y. 1981). Thus, "one claiming benefit of estoppel must have proceeded with the utmost of good faith and must have relied without having the opportunity to know the truth." ld. In this case, plaintiffis only complaining about the defendant's bare use of fictitious names ("ADW" and "Arnold Logistics") without the conplete string of Corporate identifiers, when he had every reason to be aware of the fonnal nomenclature and COrporate relationships. To base venue in Chester County upon estoppellheory under thcsc circumstances would not avoid injustice, it would create injustice for the corporate defendants. -6- () , ,,' IN THE COURT OF COMMON PLEAS CHESTER COUNTY, PENNSYLVANIA HERBERT E. RUBIN, PLAINTIFF VS NO. 97-05161 ARNOLD INDUSTRIES, INC. AND LEBARNOLD, INC., DEFENDANTS ..:"') 1 ,"' '-;::""; e- \ .- ~ .' DEPOSITION OF: TAKEN BY: \'~ BEFORE: . i -....,../ DATE: PLACE: DOUGLAS B. ENCK ." - .- ",J ':.t.\1'\ ::::> '" DEFENDANTS LISA M. LOOP, REPORTER NOTARY PUBLIC OCTOBER 29, 1997, 9:00 A.M. BLAKINGER, BYLER & THOMAS, P.C. 28 PENN SQUARE LANCASTER, PENNSYLVANIA APPEARANCES: LAW OFFICE OF THOMAS A. SCHNEIDER BY: THOMAS A. SCHNEIDER, ESQUIRE FOR - PLAINTIFF KEEFER, WOOD, ALLEN & RAHAL, LLP BY: DONALD M. LEWIS, III, ESQUIRE FOR - DEFENDANTS u GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ......j 'l\C. r""'~"" ,,'~.. .. .."\ ., " ., .,. 2 n "C"':'" 1 TABLE OF CONTENTS 2 WITNESS 3 FOR DEFENDANTS DIRECT CROSS REDIRECT RECROSS 4 Douglas B. Enck 4 35 71 75 5 6 7 EXHIBITS 8 DEFENDANTS' EXHIBIT NO. PRODUCED AND MARKED 9 1 - Letter dated May 13, 1996 19 10 2 - Letter dated May 21, 1996 20 11 3 - Invoice dated July 8, 1996 21 12 4 - Invoice dated August 9, 1996 21 13 (-'. 5 - Invoice dated September 9, 1996 21 ....,) 14 6 - Invoice dated October 9, 1996 23 15 7 - Letter dated January 30, 1997 25 16 8 - Invoice dated August 18, 1997 26 17 PLAINTIFF'S EXHIBIT NO. 18 1 - Invoice dated September 18, 1997 41 19 2 - Invoice dated August 18, 1997 42 20 3 - Invoice dated June 26, 1997 42 21 4 - Invoice dated May 19, 1997 42 22 5 - Invoice dated April 17, 1997 42 23 6 - Invoice dated March 12, 1997 42 24 7 - Invoice dated March 12, 1997 43 25 8 - Invoice dated January 27, 1997 43 V GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 () 1 9 - Invoice dated December 17, 1996 43 2 10 - Invoice dated November 13, 1996 43 3 11 - Invoice dated October 9, 1996 43 4 12 - Preliminary objections 47 5 13 - Document 50 6 14 - Invoice dated November 1, 1996 56 7 15 - Letter dated November 11, 1994 58 8 16 - Letter dated September 7, 1993 59 9 17 - Letter dated March 3, 1993 60 10 18 - Letter dated July 25, 1991 62 11 19 - Excerpt 66 12 20 - Excerpt 67 0 13 14 15 16 17 18 19 20 21 22 23 24 25 v GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 3 I " ,'.' DOUGLAS B. ENCK, called as a witness, being sworn, testified as follows: DIRECT EXAMINATION BY MR. LEWIS: Q Will you state your name, please? Douglas Barry Enck. Mr. Enck, are you employed by Arnold A Q Logistics? A Yes, I am. Q Where is Arnold Logistics located? Our main offices are at 451 Freight Street in A Camp Hill, Pennsylvania. Q Did Arnold Logistics, within the past six years or so go by another name? A Yes. We were known as ADW. Q Did you use any other names during that time period? A No. Q How long have you been employed at ADW Arnold Logistics? A Twenty-one years. Q Arnold Logistics is a defendant MR. SCHNEIDER: Objection. v GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 4 Q 1 2 3 4 5 6 7 8 9 10 11 12 ,,--.... 13 U 14 15 16 17 18 19 20 21 22 23 24 25 v 5 BY MR, LEWIS: Q Let me just ask you this: Are you aware that Mr. Herbert Rubin has filed a complaint against Arnold Industries, Lebarnold, Incorporated and with a reference to ADW, Arnold Logistics as having some involvement in the matter as described in the complaint? A Yes. Q Are you familiar with the allegations in the complaint? A Yes, I am. Q Do you know Mr. Rubin? A Yes. Q What, generally, is the type of business that Arnold Logistics or ADW has engaged in since 1990? A Our primary business is warehousing distribution. We also do contract packaging work and fulfillment services. Q What is your current position at Arnold Logistics? A Vice president, general manager. How long have you held that particular Q position? A Approximately nine years. What generally have been your job duties in Q that position during that period of time? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 f) -"-1" 1 2 3 4 5 6 7 8 9 10 11 12 13 ,......., l--J 14 15 16 17 18 19 20 21 22 23 24 25 v 6 A Business development, P and L responsibility, customer contact. Q Would you say that you have been the senior executive at ADW Arnold Logistics responsible for the operation and management of its business? A Yes. Q And that has been true for the entire time, the past nine years? A Yes. Q Is Arnold Logistics formerly known as ADW, a division of Arnold Industries? A No. Q Has it ever been? A No. Q During the past seven years, was ADW Arnold Logistics always located in Camp Hill? A Yes. Q Is Arnold Logistics ADW a corporation? No. A Q What is your understanding as to its legal status as to its relationship with the other corporations? A We are part of Arnold Transportation Services, an operating division. Q Was Arnold Transportation Services formerly known as Lebarnold, Incorporated? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 (') 1 2 3 4 5 6 7 8 9 10 11 12 13 .r'"', ......J 14 15 16 17 18 19 20 21 22 23 24 25 v 7 A Yes. Q Do you recall when the name change took place? It's been in the past year. During the period 1991 through 1996, was that A Q entity known as Lebarnold? A Yes. Q Where is Lebarnold's principal place of business? A In Camp Hill, Pennsylvania. Was that true during the period 1990 through Q 1996? A Yes. Q What generally was the business of Lebarnold during that time period? A Lebarnold is a parent company of Arnold Logistics as well as the -- over the -- truckload carrier, irregular route truck carriers were to be determined. That is a large part of their business. Q Was Lebarnold a subsidiary of Arnold Industries, to your knowledge? A Yes. Q And during the period 1990 through 1996, what generally was the business of Arnold Industries? A Arnold Industries is the holding company. Actually, there have been four corporations under that GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ('") 1 2 3 4 5 6 7 8 9 10 11 12 13 c:> 14 15 16 17 18 19 20 21 22 23 24 25 v 8 blanket. This would be New Penn, which is the largest, Lebarnold, SilverEagle, and Dalworth. Q Where is the headquarters of Arnold Industries, the holding company? A In Lebanon, Pennsylvania. Q Has it ever been located anywhere else within the past 10 years? A Not to my knowledge. Q Has Lebarnold ever maintained any kind of an office or place of business in Chester County, Pennsylvania? A No. Q Has ADW Arnold Logistics ever maintained any office or any type of place of business in Chester County, Pennsylvania? A Q Industries? A No. Q Has any of the subsidiaries of Arnold Industries ever maintained any kind of place of business in Chester County? A Not to my knowledge. Q Has ADW Arnold Logistics had any employees located in Chester County during the past 10 years? A No. No. The same question with respect to Arnold GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ("') h> 1 2 3 4 5 6 7 8 9 10 11 12 .-.... 13 V 14 15 16 17 18 19 20 21 22 23 24 25 v 9 Q To your knowledge, has Arnold Industries, the holding company had any employees located in Chester County? A Not to my knowledge. Q Let me ask the same question with respect to Lebarnold. Has Lebarnold had any employees located in Chester County? A No. Q Are you aware whether any of the other subsidiaries of Arnold Industries has had any employees located in Chester County? A Not to my knowledge, no. During the time period 1990 through 1996, were Q any customers of ADW Arnold Logistics located in Chester County? A No. Q Does Arnold Logistics ADW operate a trucking servi.ce as part of its business? A Yes. Q Why don't you tell us briefly what it does and how it fits in with this business. A Our trucking division provides transportation services, local transportation services for warehouse customers for our Logistic customers. Q Are those trucking services limited to your warehousing and contract packaging customers? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 r) 1 2 3 4 5 6 7 8 9 10 11 12 13 CJ 14 15 16 1'7 18 19 20 21 22 23 24 25 -.-I 10 A Not totally, no. Q Have you made an effort to determine whether ADW Arnold Logistics' trucking operation has made any trips to Chester County within the last few years? A We reviewed records. And we do not have any record of pickups or deliveries in Chester County. Q A~ your direction, was an effort made to determine whether Lebarnold had been responsible for any business trips to Chester County? A We had our marketing group do a review of 1997 year-to-date business. And there were no records of any pickups or deliveries in Chester County. Q Based upon your knowledge and understanding of the type of trucking service that Lebarnold provides, do you have an understanding as to whether Lebarnold has made any regular trips to Chester County within the past six years or so? A No, they have not made any pickups or deliveries, to our knowledge, into Chester County. Q Over the past six or seven years, has ADW Arnold Logistics targeted or solicited customers in Chester County? A No, not to my knowledge. Q Do you know whether Lebarnold has targeted or solicited customers in Chester County? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 n 'no'" 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 .......J A Q 11 No, I don't know. Are you familiar with the allegations by Mr. Herbert Rubin that he entered into a business relationship with ADW or Arnold Logistics? A Q Yes. Did a business MR. SCHNEIDER: Objection to the characterization of Mr, Rubin's complaint. Obviously, you can ask your client any questions that you wish. But I wanted my objection to be noted. MR. LEWIS: Fair enough. BY MR. LEWIS: Q exist? A Q A Q A Q Did a business relationship of some type Yes. Who were the parties to that relationship? Herb Rubin and myself. When you say "yourself" Arnold Logistics. You didn't personally enter into any kind of contract with Mr. Rubin? A No. MR. SCHNEIDER: Excuse me. Just so I don "t have to continually befuddle the record with objections, I would like it noted that while Mr. Enck may have one view of GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ~ b,' 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 o 12 the contracting parties, Mr. Rubin may have a very different view of the contracting parties. And as long as that is a continuing objection, I will try to keep quiet. MR. LEWIS: I am simply attempting to elicit his understanding of the facts. I am not calling for legal conclusions as to who is a party or not. BY MR. LEWIS: Q Approximately when did a business relationship begin between Mr. Rubin and ADW Arnold Logistics? A Actually, I am uncertain of the date. It has been about four years ago, I think, 1993, 1994, if I am not mistaken. I am not sure of the dates. Q Who initiated that relationship? A Herb Rubin. Q Were there discussions that led up to the creation of that relationship? A Yes, there were. Q Where did they take place? At my offices in Camp Hill. Was anybody else at ADW Arnold Logistics A Q involved in creating a business relationship with Herbert Rubin other than yourself? A No. Q Was there any type of a written agreement? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 .~ ...." 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 o 13 A No, there wasn't, Q During the time period that a business relationship existed between Mr. Rubin and your company, who was responsible for overseeing that relationship? A I was. Q Was anybody else involved in overseeing that relationship? A No. Q Did that relationship involve pa}~ent of commissions to Mr. Rubin? A Yes. Q Was he, in fact, paid scme commissions? A Yes, he was. Q Who issued the checks to Mr. Rubin? A My accounting department would have issued the checks. And they would have been on a Lebarnold or an Arnold Transportation Services' check. Q Do you happen to know the location from which those checks were issued? A It would have been Camp Hill. At one point in time, it may have been out of Lebanon because our main data processing center is in Lebanon. Q To your knowledge, did Mr. Rubin ever enter into any type of a business relationship directly with Arnold Industries? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 .""\ 1 2 3 4 5 6 7 8 9 10 11 12 13 () 14 15 16 17 18 19 20 21 22 23 24 25 v 14 MR, SCHNEIDER: Objection. MR. LEWIS: Let's just state the basis, if you would, for the record. MR. SCHNEIDER: I think it is attempting to put legal characterization in a lay witness's mouth or to elicit legal conclusions from a lay witness's mouth. MR. LEWIS: Okay. BY MR. LEWIS: Q Let's put it this way: Aside from any business relationship that Mr, Rubin had with ADW Logistics, to your knowledge, did Mr. Rubin have any business relationship with Arnold Industries? A Not to my knowledge, no. Q Aside from the business relationship that Mr. Rubin had with ADW Arnold Logistics, to your knowledge, did Mr. Rubin have a business relationship with any other subsidiary of Arnold Industries? A No. Q For the purposes of the deposition today, I am not going to ask you to go into the details of the relationship, except on a few points. And one thing I wanted to ask you about is this: Were the terms of the relationship modified at some point in time? A Yes, they were. Q Do you recall approximately when that was? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 .1) <'" 1 2 3 4 5 6 7 8 9 10 11 12 13 /-;) "",""" 14 15 16 17 18 19 20 21 22 23 24 25 v 15 A It would have been in 1995. I am not certain of the years. Q I assume there were discussions. Were there discussions that took place that led up to the change in the terms of the relationship? A There were issues that came about. And there was a teleconference, telephone conference with Herb from my office in Camp Hill to -- I don't know if it was at Herb's home or at his office in Harrisburg. Q Was it your understanding that Mr. Rubin was located in Harrisburg during that conversation? A Yes. Q Just fast-forwarding a bit, in your view, did that business relationship come to an end at some point? A Yes. Q When did that occur? A Again, I am uncertain of the date. But I believe that was in late '95. Q I am going to give you some correspondence on that. But let's just confine this question to the length of the relationship as you understood it from the point that it began to the point that you believe it was terminated. During that period of time, was it your understanding that Mr. Rubin resided in Harrisburg? A Yes. GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 r\ I ~.,. 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 v 16 Q To your knowledge, did he reside in Chester County at any point or any time period? A No. Q Under the business relationship between Mr. Rubin and your company, where was he to carry out his duties as you understood it? A Our basic communication was out of Camp Hill. Herb would have solicited business or reviewed equipment with other equipment manufacturers all across the country and in Canada and wherever our business would be taken. Q To your knowledge, did Mr. Rubin solicit any business for ADW Arnold Logistics in Chester County? A Not to my knowledge, no. To your knowledge, did Mr. Rubin deal with any Q manufacturers of equipment that your company might have had use for, any such manufacturers located in Chester County? A Not to my knowledge, Q Who was responsible for terminating the business relationship between your company and Mr. Rubin? A I was. Q Who made the decision to terminate the relationship? A I did. Q Did anybody else direct you to make that decision? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ~ f n ,.,..... 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 v 17 A No. Q And where did you make that decision? In my offices in Camp Hill. Did you need to obtain anyone's permission to A Q terminate the relationship between your company and Mr. Rubin? A No, I didn't. Q How did you communicate to Mr. Rubin your decision to terminate the business relationship? A In a phone call. And do you know where he was at the time you Q placed that call to him? A In Harrisburg. Could you tell me briefly what reasons you Q gave to Mr. Rubin for terminating the relationship? A Dishonesty. Could you be a little more specific? The specific instance was a piece of equipment Q A that we bought at Herb's recommendation that did not perform to the necessary standards and Herb's explanations were very upset at the lack of performance of the machi.ne. Herb alleged that he also suffered from the supplier, that the supplier refused to pay him his commissions. Subsequent to that -- to those discussions, in talking to Weigh Pack, the company that manufactured the GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 .~ 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 v 18 machine, they confirmed and then he gave us copies of two checks where Herb was paid commissions. Q Did any of the circumstances that you have described that led up to your decision to terminate the relationship with Mr. Rubin have any relationship whatsoever to Chester County? A No. Q During the course of the business relationship between Mr. Rubin and your company, did you have occasion to communicate with him at any place other than your office i.n Camp Hill or his home or office in Harrisburg? A Yes. On occasion, there could be phone calls from various sites around the country. Q Do you happen to recall whether you ever spoke to him in Chester County? A Not that I can recall, no. Q Based upon your understanding of the business relationship of Mr. Rubin and where he was performing his duties, do you have any -- what would be your. expectation that you ever talked to him in Chester County? A I wouldn't expect that I have. Q Was Mr. Rubin pr.ovided with a work space at your facility in Camp Hill? A At the time we modified our agreement to a consultant position, yes, there was office space provided at GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 'r; .".~.. 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 ......,J 19 our offices, Q In conjunction with those discussions regarding the modification of the terms of the relationship, did you have any discussions with Mr. Rubin as to whether you expected him to be present on your site with greater frequency? A Yes, There were no specific days or hour requirements, although we were looking for Herb to work out of offices at least a day or two a week. Q Did you ever meet with Mr. Rubin in Chester County? A No. MR. LEWIS, I will ask the court reporter to mark as Defendants' Exhibit 1 to Mr. Enck's deposition, a one-page letter bearing the date May 13, 1996 that appears to have been signed by Herbert Rubin. (Letter dated May 13, 1996 marked as Defendants' Exhibit No.1.) BY MR. LEWIS, Q Mr. Enck, have you seen this document before? A Yes, I have. Q Could you tell us what it is? It's a letter to me from Herb Rubin. It A describes the history of our business relationship. Q Do you recall when you received this letter? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 n " 1 2 3 4 5 6 7 8 9 10 11 12 13 () 14 15 16 17 18 19 20 21 22 23 24 25 '-.......) 20 A According to the date, it was a May 13th letter, so I am assuming I received it sometime in that period, May 14th, May 15th. Q Was that in 1996? A Yes. Q Was it your understanding that Mr. Rubin had sent this letter to you from Harrisburg? A Yes. It's indicated by the letterhead on the letter. Q When you indicated a moment ago that this letter described the history of the business relationship, are you saying that you agreed with everything that he said? A No, I do not. MR. LEWIS: I will ask the reporter to mark as Exhibit 2 to Mr. Enck's deposition, a one-page letter bearing the date May 21, 1996. It appears to have been signed by Mr. Enck. (Letter dated May 21, 1996 marked as Defendants' Exhibi.t No.2.) BY MR. LEWIS: Q Mr. Enck, have you seen the original of this document before? A Yes. Q Will you tell us what it is, if you can? A It's a response from me to Herb Rubin in GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 21 response to his May 13th, 1996 letter. In that, I state that I totally disagreed with his characterization of the relationship and agreement and reconfirmed our telephone conference where we terminated our relationship based on his misrepresentation of the Weigh Pack scale and commissions that Herb was taking. Q Did you sign the original of this letter? A Yes, I did. Q Is that a copy of your signature? A Yes, it is. Q Did you advise Mr. Rubin at this time that no further monies were due him under the terms of the business relationship? A Yes, I did. And did you send this letter on May 21st of Q 1996? A Yes. Q Did you send it to Mr. Rubin in Harrisburg? A Yes. MR. LEWIS: I will ask the reporter to mark as Exhibits 3, 4, and 5 to Mr. Enck's deposition, a series of documents that purport to be invoices. And for the record, they are dated July 8, 1996, August 9, 1996, and September 9, 1996. (Invoice dated July 8, 1996 marked as ~ GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 tJ ".', , 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 v 22 Defendants' Exhibit No.3; invoice dated August 9, 1996 marked as Defendants' Exhibit No.4; invoice dated September 9, 1996 marked as Defendants' Exhibit No.5.) BY MR. LEWIS: Q Mr. Enck, I would like you to look at Exhibits 3, 4, and 5 to your deposition; and I will ask you to identify them if you can. A They are stated to be invoices from Herb Rubin to Arnold Logistics for July, August, and September of 1996. Q Based upon your understanding of the status of the relationship during this period of time between July and September of 1996, was it appropriate in your view for Mr. Rubin to be sending invoices to your company? A No, it was not appropriate. Q Why was that? We had no business relationship. It had been A terminated prior to these invoices. Q Were any sums due to Mr. Rubin at this point? A No. Q Did the company pay anything to Mr. Rubin from this point on? A No. Q Where were these invoices sent from, to your knowledge? A The address on the invoice is Harrisburg, GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 n " 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 w 23 ~ Pennsylvania; so my assumption is they were sent from Harrisburg. Q Any reason to believe they were sent from any r. r location other than Harrisburg? A No, there is not. Actually, the September and August invoices would be confirmed to have come from Harrisburg as they have the facsimile machine header at the top showing the 717 area code, the 232 number being a Harrisburg number. Q During this period of time, which I will describe as from the time that the relationship was terminated in your view in September of 1996, did you have any telephone conversations with Mr. Rubin? No, I did not. MR. LEWIS: I will ask the reporter to mark as Exhibit 6 to Mr. Enck's deposition, another document that A appears to be described as an invoice, And the date on this document appears to be October 9, 1996. (Invoice dated October 9, 1996 marked as Defendants' Exhibit No.6.) BY MR. LEWIS: Q Mr. Enck, do you recognize this item? A Yes, I do. What is it? Q A It's another invalid invoice from Herb Rubin GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ,C) 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 ......; 24 to my company, Arnold Logistics. And it's dated October 9th. And it appears to have been sent from the Harrisburg location as it again bears the 717 232 header. Q I notice that thi.s particular invoice now seems to indicate that Mr. Rubin has an address in Lionville, Pennsylvania. Do you know where that is? A Actually, no. I am assuming it's in Chester County. But I am not familiar with Lionville at all. Q Do you know whether, in fact, Mr. Rubin had moved to Lionville by this point in time? A No, I do not. Q At this point in time in October 1996, did any kind of a business relationship exist between Mr. Rubin and your company in your view? A No. Q Did you have any communications with Mr. Rubin about this particular invoice or corporate invoice, I should say? A I believe subsequent to -- I don't know if it was this particular invoice -- but subsequently, we did send one more letter to Herb Rubin reconfirming that there was no business relationship and no sums owed Mr. Rubin. MR. LEWIS: I will ask the reporter to mark as Exhibit 7 to Mr. Enck's deposition, a document that appears to be a letter bearing the date January 30, 1997. It GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 I'") 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 >..-/ 25 appears to be addressed to Mr. Rubin from Mr. Enck. (Letter dated January 30, 1997 marked as Defendants' Exhibit No.7.) BY MR, LEWIS: Q A Q A Mr. Enck, do you recognize this document? Yes, I do. Can yeu tell us what it is? It's a letter from me to Herb Rubin reconfirming and noting that in spite of our May 21st letter clarifying the termination of our previous relationship, that we continued to receive invoices that we deemed to be invalid. And I restated that no commissions or other sums were owed to Herb Rubin. Q Did you sign the original of this letter? A Yes, I did. Q And does that appear to be a copy of your signature on this exhibit? A Yes, it does. Q Did you send this letter from Camp Hill? A Yes. Q This letter appears to be addressed to Mr. Rubin in a place called Lionville, Pennsylvania. What knowledge, if any, did you have by this point in time as to where Mr. Rubin lived1 GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 I") <"j"'" 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 v 26 A Beyond the letterhead stating the Lionville address, none. MR. LEWIS: I will ask the reporter to mark as Exhibit 8 to Mr. Enck's deposition, a document bearing the date August 18, 1997 which appears to be another purported invoice. (Invoice dated August 18, 1997 marked as Defendants' Exhibit No.8.) BY MR. LEWIS: Q Mr, Enck, do you recognize this document? Yes. A Q Will you identify it for us, please? A It's another ongoing invalid invoice from Herb Rubin to my attention at Arnold Logistics. This one represents both July and August sums. Q Do you have any knowledge as to why Mr. Rubin included sums that be believed were due for two months on this particular item? A No, I don't. Q With respect to all of the invoices or purported invoices that you have identified, were any sums due to Mr. Rubin in your view? A No. Q Were any sums paid? A No. GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 r.... ) ",." 1 2 3 4 5 6 7 8 9 10 11 12 :..3 0 14 15 16 17 18 19 20 21 22 23 24 25 'wi Q Were there any communications between Mr. Rubin and yourself subsequent to the termination of the relationship? A I actually think there was one phone call subsequent to the call where I informed Herb that we would no longer have any business relationship with him. I am not sure of the timing, only that there was one call from Herb to me subsequent. Q Do you recall what you talked about? Yeah. Herb wanted to discuss my concerns, why A we terminated the relationship. I again clearly stated to him that it was because we had lost -- his credibility had gone and we could not do business with somebody we did not deem to be a credible person. And this related back to his misrepresentation of the Weigh Pack scale which we purchased and the fact that he was indeed paid commissions on this sale when he had denied to us receiving any commissions. Q Did you have any knowledge as to where Mr. Rubin was at the time that he placed that call to you? A No. That, I do not know, Do you know whether he had moved to Chester Q County by that time? A Not to my knowledge. Did you ever have any knowledge of any plans Q GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 27 n -".' 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 v 28 on Mr. Rubin's part to locate to Chester County? A No, Q Based upon your understanding of the terms of the relationship and the duties and responsibilities of Mr. Rubin in that relationship, would it be possible for him to carry out those duties while living in Chester County? MR. SCHNEIDER: Objection. BY MR. LEWIS: Q You can answer the question, if you are able to. A It would not have been the kind of relationship we would have looked for. We preferred because of the fact of a modified relationship, we wanted Herb working at our offices. He was serving as a consultant, more of an advisor on automation and machinery which would require his presence in the Camp Hill area. Q Shifting gears a bit, duri.ng the time period of ~he business relationship between Mr. Rubin and your company, did ADW Arnold Logistics and Lebarnold keep books and financial records that were separate from those of other entities affiliated wi.th Arnold Industries? A Yes. Q Those records were separate from the records of New Penn, for example? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 I"} ".,.... 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 v 29 A Yes. Q Did Lebarnold and ADW Arnold Logistics keep bank accounts that were separate from those of other entities affiliated with Arnold Industries? A Yes. Q Did Lebarnold and ADW Arnold Logistics hire and fire their own personnel? A Yes. Q Just to clarify my own question, . those hiring and firing decisions were made independently of any other Arnold Industry's entity; is that correct? A That's correct. Q Does Lebarnold ADW Arnold Logistics have some separate personnel administration that is separate from the other entities affiliated with Arnold Industries? A That's correct, yes, we have. Q Again, during the time period that we have been talking about, which is going back to approximately 1990, 1991, has Lebarnold and ADW Arnold Logistics owned trucks separately from other entities affiliated with Arnold Industries? A Yes. Q Did those entities ever buy and sell trucks to each other? A Yes. GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 .r---.; 1 2 3 4 5 6 7 8 9 10 11 12 13 l:> 14 15 16 17 18 19 20 21 22 23 24 25 .....,) 30 Q If they did so, did Lebarnold or ADW Arnold Logistics pay fair market value? A Yes. Q During that time period, did Lebarnold and ADW Arnold Logistics own or lease their various warehouses and other facilities in their own names? A Yes. Q Did Lebarnold and ADW Arnold Logistics purchase supplies and pay for utilities in their own name? A Yes. Q Was Lebarnold and ADW and Arnold Logistics free of control from other subsidiaries of Arnold Industries such as New Penn? A Yes. Q During the time period that we have been talking about when there was a business relationship between Mr. Rubin and your company, were there any overlapping executives between the various entities affiliated with Arnold Industries? A No. Q During that time period and, to your knowledge, did the names of any -- let me do it by example. During that time period, did the name of New Penn, for example, and the name of Lebarnold appear together in any context outside of an annual report or a lOK, for example? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 C) 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 ....;) 31 A Not to my knowledge, no. Q Did the relationship between Mr. Rubin and your company affect or concern any other Arnold Industries subsidiaries such as New Penn? A No, they did not. Q Did that relationship affect or concern SilverEagle Transport? A No. Q Did that relationship affect or concern DW or Dalworth? A No. Q Do you have a general understanding of the nature of the business that the other subsidiaries of ArnoJ.d Industries have engaged in over the past five or six years? A Yes, I do. Q I imagine that we have covered this. But just to be sure, can you tell us where Lebarnold's principal place of business has been located during the time period we are talking about? A In Camp Hill, Pennsylvania. Q kId where has New Penn's principal place of business been located? A They have terminals around the East Coast. But their main offices are in Lebanon, Pennsylvania. Q Where is the headquarters of SilverEagle GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 I') ",;." 1 2 3 4 5 6 7 8 9 10 11 12 13 .<) l. 14 15 16 17 18 19 20 21 22 23 24 25 v 32 Transport? A They are in Jacksonville, Florida. Where is the headquarters of DW Freight? They were in Fort Worth, Texas. They are now. Q A That's now been consolidated into the Arnold Transportation Group; so now that is Camp Hill, Pennsylvania. Q Did that change take place after the relationship of Mr. Rubin ended? A Yes. Q Do you have an understanding as to the geographic region -- let me back up for a second. What generally is the type of business that SilverEagle is engaged in? A They are a long-haul, a regular route truckload carrier. Q What geographic region, if any, is primarily covered by their trucking services? A Primarily, the Southeast. To your knowledge, did SilverEagle ever Q regularly conduct business in Chester County? A No, not to my knowledge. What type of business has DW Freight or Q Dalworth, as it is sometimes called, been engaged in? A Again, they are a truckload kind of type carrier. They operate primarily in Texas. They overlap GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 I"') 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 .~ 33 into Oklahoma, Louisiana, some other states in the Southwest and into the Midwest. Q To your knowledge, did DW or Dalworth ever regularly conduct any business in Chester County? A No. Q To your knowledge, did Mr. Rubin ever have any business involvement with New Penn Motor Express? A No. Q Did New Penn Motor Express benefit in any respect from the activities that Mr. Rubin performed for ADW Arnold Logistics? A Not to my knowledge, no. Q Did New Penn ever receive any revenues that were attributable to his activities? A I don't believe so. Q To your knowledge, did New Penn ever utilize any equipment that was purchased through Mr. Rubin's auspices? A No. Q To your knowledge, did Mr. Rubin ever introduce any customers to New Penn? A No. Q And based upon your understanding of the relationship, was the New Penn bottom line ever affected in any way by Mr. Rubin's activities? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ....----\ J 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 v 34 A No. Q Has ADW or Arnold Logistics ever attributed to make joint sales presentations with other Arnold Industries subsidiaries such as New Penn? A No. We actually avoid doing those kind of things because of labor considerations. Q Do Lebarnold and ADW Arnold Logistics dispute Mr. Rubin's claim that he is entitled to damages for breach of contract, unjust enrichment or fraud? A Yes. Q To your knowledge, does Arnold Industries dispute those allegations? A I am not sure I understand. I mean, as a divi.sion of Arnold Industries, yes. Arnold Industries would also dispute those claims. Q That's fine. Do those entities dispute Mr. Rubin's claim that he is entitled to rescind the modifications to the relationship that you described? A That's correct. MR. LEWIS: I believe that is all I have. I would like to take a brief intermission and speak with Mr. Enck. Do you have any problem with that? MR. SCHNEIDER: Whether I do or not, you will have that opportunity. MR. LEWIS: I would like to do that now. GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 :" 1 2 3 4 5 6 7 8 9 10 11 12 13 r~<<~ U 14 15 16 17 18 19 20 21 22 23 24 25 I...,) 35 (Recess. ) BY MR. LEWIS: Q Mr. Enck, I have just maybe one more question. I would like you to look at Exhibit 2 to your deposition, which is a letter that you sent to Mr. Rubin in May of 1996. Looking at this letter now, does that clarify your recollection as to the date or time frame in which the relationship with Mr. Rubin came to an end? A Yeah. It would have been prior to the May 13th date. It might have been in the beginning of 1996 or the end of 1995. I am not sure when the phone call was act'ually made. In looking at Exhibit 1, Herb characterizes that it was a three-year relationship prior to 1996, which would have taken it back to May of 1993, that time frame. MR. LEWIS: That is all I have. CROSS-EXAMINATION BY MR. SCHNEIDER: Q Good morning, Mr. Enck, and thank you for coming to Lancaster for this deposition. Have you had your deposition taken before? A Yes. GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 rJ 1 2 3 4 5 6 7 8 9 10 11 12 13 ......-..\1, (.,) 14 15 16 17 18 19 20 21 22 23 24 25 .~ 36 Q How many times? Twice, I believe. A Q And in what kind of matters? A In matters related to business. Q Disputes with people, like Mr. Rubin? Let's see, one time there was a dispute with a A builder. Q Where did that dispute get litigated? In North Carolina. A Q And what about the second lawsuit? A There wasn't a second one. The second was arbitration, one time. Q Where did the arbitration take place? In Harrisburg. A Q You go to work every day in Camp Hill; is that your testimony? A Yes, I do. Q You travel an awful lot, don't you, in your job? A I travel. It depends what you call an awful lot. I do travel. Q You tell me how much of your job involves traveling. A I would say I am out of town no more than 30 days out of the year. GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 .1'") 1 2 3 4 5 6 7 8 9 10 11 12 13 (;J 14 15 16 17 18 19 20 21 22 23 24 25 v 37 Q Where are some of the places that you travel? A Primarily, Fort Worth, Texas; Chicago; Denver, Colorado. Those would be the primary locations I travel to. Q How about within the State of Pennsylvania? A Philadelphia, Lebanon and that's pretty much it in Pennsylvania, that I can think of, you know, within Central Pennsylvania, certainly. Q I assume your counsel has informed you that the Chester County Courthouse is located in West Chester, Pennsylvania? A Q would you? A No, he hasn't. If I told you that, you wouldn't disagree, No. I would have no reason to. MR. LEWIS: Certainly no dispute. MR. SCHNEIDER: Thank you. BY MR. SCHNEIDER: Q Do you have any idea how far it is from Camp Hill, Pennsylvania to West Chester? A Yeah. I think it's about 90 miles, a hundred miles. Q If I told you that it was about 81 miles from Harrisburg to West Chester, would that help you estimate the distance? MR. LEWIS: I object to the question. GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ''''"J "., 1 2 3 4 5 6 7 8 9 10 11 12 13 () 14 15 16 17 18 19 20 21 22 23 24 25 v 38 MR. SCHNEIDER: Can he answer it? MR. LEWIS: He can certainly answer it. You are giving a number. I don't know where your number comes from. A I wouldn't disagree with that. BY MR. SCHNEIDER: Q Thank you. How about from Lebanon to West Chester, because you testified you spend a fair amount of time in Lebanon? A No. I testified I have been to Lebanon. I don't spend a large amount of time there. Lebanon is southeast of Harrisburg, which would certainly make it closer to West Chester than Harrisburg. Q If I told you that according to an official Pennsylvania Transportation Map, the distance between Lebanon and West Chester -- and I would invite you to come around and look over my shoulder, if you would like -- is 61 miles, would you feel that that was an accurate statement based upon your knowledge of travels? A No, I wouldn't. Q ADW or Arnold Logistics, I don't want to go into a semantic problem at this poi.nt because I think there is enough confusion already MR. LEWIS: I object to the characterization. BY MR. SCHNEIDER: GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 'J 1 2 3 4 S 6 7 8 9 10 11 12 13 0 14 lS 16 17 18 19 20 21 22 23 24 2S '-' 39 Q The company that you work for has a facility in the Lancaster area, does it not? A We rent a facility in Mountville. Q And you have used that facility in Mountville? A Yes. Q What do you use that facility for? A Warehousing. Q And how far is Lancaster from West Chester? A I don't know. Q Again, according to this official State of Pennsylvania Transportation Map, if I told you that that distance was 47 miles, you wouldn't object to that, you wouldn't disagree with that, would you? A I couldn't confirm that. But it sounds reasonable. MR. SCHNEIDER: Counsel, can we stipulate to these distances based upon this official Pennsylvania Transportation Map? MR. LEWIS: I will do that after having had a chance to review the map, which I will be glad to do. MR. SCHNEIDER: Sure. (Handing.) MR. LEWIS: So stipulated. MR. SCHNEIDER: Thank you. Just so the stipulation is clear, according to this official State of Pennsylvania Transportation Map, it is exactly 81 miles GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 .r""\ .' 1 2 3 4 5 6 7 8 9 10 11 12 13 t:> 14 15 16 17 18 19 20 21 22 23 24 25 "-' 40 between Harrisburg and West Chester. It is exactly 47 miles between Lancaster and West Chester and it is exactly 61 miles between Lebanon and West Chester. BY MR. SCHNEIDER: Q Mountville is, in essence, a suburb of Lancaster? A Yes. Q And Camp Hill is just on the other side of the river from Harrisburg? A Yes. Q You understand, Mr. Enck, that the reason for the lawsuit is that Mr. Rubin and you have a diametrically opposite interpretation of the current status of your contract; do you understand that? A Yes. Q You have read Mr. Rubin's complaint? A Yes. Q And I am not asking you to agree and indeed you have already testified you disagree with the complaint. But without regard to your feelings about his allegations, you do acknowledge Mr. Rubin's contention that the contract was not properly terminated and remains in effect, do you not? A I acknowledge that Mr. Rubin alleges that. That's right. GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 .~ , :, .,~ .' 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 v 41 Q I am not asking you to agree with Mr. Rubin's contentions for purposes of this deposition. You also acknowledge, do you not, that Mr. Rubin has worked and resided in Chester County since approximately August of 1996; is that correct? A The time frame, I can't confirm but that appears that Herb does now live in Chester County. Q You are not suggesting he relocated to Chester County to bring a lawsuit against your company in an inconvenient forum, are you? A The thought crossed my mind. But, no, I don't think that's the reason why. Q So you would agree that that was not why he relocated? A It doesn't make any logical sense, MR. SCHNEIDER: You have already marked some of these invoices as a defendant's exhibit. For the sake of completeness, I am going to ask the court reporter to mark as Plaintiff's Exhibits 1, etc. -- we will add them up when we get there a complete set of invoices dating from October 1996 to date. Please mark this document, an invoice dated September 18, 1997 as Plaintiff's Exhibit 1. (Invoice dated September 18, 1997 marked as Plaintiff's Exhibit No.1.) GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 .~ < "'.('-" 1 2 3 4 5 6 7 8 9 10 11 12 13 l:J 14 15 16 17 18 19 20 21 22 23 24 25 ~ 42 MR. SCHNEIDER: I should note for the record that many of these exhibits have a second page which is the fax transmittal acknowledgment sheet. Please mark as Plaintiff's Exhibit No.2, an invoice from Herbert E. Rubin dated August 18, 1997. (Invoice dated August 18, 1997 marked as Plaintiff's Exhibit No.2.) MR. SCHNEIDER: Please mark as Plaintiff's Exhibit No.3, an invoice from Herbert E. Rubin dated June 26, 1997. (Invoice dated June 26, 1997 marked as Plaintiff's Exhibit No.3.) MR. SCHNEIDER: Please mark as Plaintiff's Exhibit No.4, an invoice from Herbert E. Rubin dated May 19, 1997. (Invoice dated May 19, 1997 marked as Plaintiff's Exhibit No.4.) MR. SCHNEIDER: Please mark as Plaintiff's Exhibit No.5, an invoice -- actually, this is a copy of an invoice from Herbert E. Rubin dated April 17, 1997. (Invoice dated April 17, 1997 marked as Plaintiff's Exhibit No.5.) MR. SCHNEIDER: Please mark an invoice dated March 12, 1997 as Plaintiff's Exhibit No.6. (Invoice dated March 12, 1997 marked as GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 I"") .~,. 1 Plaintiff's Exhibit No.6.) 2 MR. SCHNEIDER: Please mark a second invoice 3 dated March 12, 1997 related to February commissions as 4 Plaintiff's Exhibit No.7. 5 (Invoice dated March 12, 1997 marked as 6 Plaintiff's Exhibit No.7.) 7 MR. SCHNEIDER: Please mark an invoice dated 8 January 27, 1997 from Herbert E. Rubin as Plaintiff's 9 Exhibit No.8. 10 (Invoice dated January 27, 1997 marked as 11 Plaintiff's Exhibit No.8.) 12 MR. SCHNEIDER: Please mark this invoice dated c:, 13 December 17, 1996 from Herbert E. Rubin as Plaintiff's 14 Exhibit No.9. 15 (Invoice dated December 17, 1996 marked as 16 Plaintiff's Exhibit No.9.) 17 MR, SCHNEIDER: Please mark an invoice dated 18 November 13, 1996 from Herbert E. Rubin as Plaintiff's 19 Exhibit No. 10. 20 (Invoice dated December 17, 1996 marked as 21 Exhibit No. 10.) 22 MR. SCHNEIDER: Finally, please mark an 23 invoice dated October 9, 1996 from Herbert E. Rubin as 24 Plaintiff's Exhibit No. 11. 25 (Invoice dated October 9, 1996 marked as v GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 43 ,~ 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 v 44 Exhibit No. 11.) BY MR. SCHNEIDER: Q Mr. Enck, I am going to hand you these invoices which have been marked sequentially Plaintiff's Exhibits 1 through 11, ask you, please, to take a look at them and let me know when you are ready. A Okay. Q Do you acknowledge having received the originals of each of those documents at or about the time of their respective dates? A I can't personally acknowledge that. The fax transmissions that were received on our fax machine, whether they are copies, I would not personally receive these things on a regular basis. Q Are you disputing, sir, that those invoices were transmitted by Mr. Rubin to you or your company? A No. Q You acknowledge, sir, do you not, that at the time each of these invoices was transmitted to you or your company, they bore an address indicating that Mr. Rubin was living and working in the Chester County, Pennsylvania area? A I confirmed that -.. the letter had indicated he has a post office box in Lionville, PA. Q Again, sir, are you disputing that Mr. Rubin was living and working in Chester County at the time these GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 .~ 1 2 3 4 5 6 7 8 9 10 11 12 13 () 14 15 16 1'7 18 19 20 21 22 23 24 25 v 45 invoices were transmitted? A I probably would have to do that based on the contradiction of one of the previous exhibits where there was a letterhead stating a post office box in Lionville. But the facsimile machine showed that it actually came from Harrisburg. Q Other than that notation, is there any other basis upon which you testified today that at the time Plaintiff's Exhibits 1 through 11 were transmitted to you or your company that Mr. Rubin was not, in fact, working and living in Chester County, Pennsylvania? A No. Q So, in other words, you believe that he was working and living in Chester County at the time other than the one instance you previously testified to; is that correct? A I don't know. I mean, frankly, I don't know where Herb was living or working. I will agree that on those where there was fax transmission sheet that they came from -- it appears they came from Chester County, the transmissions came from there. Q Thank you. You also agree, sir, do you not, that none of these invoices has been paid; is that correct? A That's correct, because they are invalid. Q Let me ask the question again and try to limit GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ~I '. 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 -...J 46 yourself to a yes or no answer, if possible. You do disagree, sir, that none of these invoices, Plaintiff's Exhibits 1 through 11 has been paid by you or your company; is that correct? A That's correct. Q And, sir, you do acknowledge that if Mr. Rubin is correct in his assertion that those invoices should have been paid by you or your company, that payment would have been remitted to him at the address in Lionville, Pennsylvania as shown on the header of each of Plaintiff's Exhibits 1 through II? A Yes. Q Thank you. MR. SCHNEIDER: Can we go off the record? (Discussion held off the record.) BY MR. SCHNEIDER: Q Earlier your counsel objected to my suggestion that there may have been some confusion about the different entities underneath the Arnold Industries umbrella and the names and relationship of those. Do you recall that colloquy? A Yes. Q Have you ever been confused about the relationship between your entity and Arnold Industries or the other satellite entities operating within the Arnold GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 I") ""H' 1 2 3 4 5 6 7 8 9 10 11 12 13 :) ( . 14 15 16 17 18 19 20 21 22 23 24 25 v .~ ~.... .--... 47 umbrella? A No. Q Has anyone, to your knowledge, expressed confusion about those relationships? MR. LEWIS: Objection. You mean expressed to him or anybody in the world? BY MR. SCHNEIDER: Q Are you aware of anyone having expressed confusion that came to your attention about the relationship of the various subsidiaries, divisions, groups, entities operating under the Arnold umbrella? A I have been asked to clarify the relationships of the Arnold Industries' companies in the past. I don't know that that indicates people were confused. Q Did Arnold Industries ever take any corporation actions that you are aware of in an effort to clarify confusion about the relationship of its operating divisions, groups and sUbsidiaries? A No, not to my knowledge. MR. SCHNEIDER: I am going to mark, just so it is clear, a copy of defendants' preliminary objections as Plaintiff's Exhibit No. 12. (Preliminary objections marked as Plaintiff's Exhibit No. 12.) BY MR. SCHNEIDER: GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 .~ I 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 .....; 48 Q Let me hand you what has now been marked as Plaintiff's Exhibit 12, Mr. Enck, and ask you to take a look at it, particularly the verification on the last page. And when you are done, I will ask you a couple questions about it. A Yes. Q Could you look, sir, at the last page of Plaintiff's Exhibit No. 12 and tell me if that is a photocopy of your signature? A Yes. Q And you did sign the original verification with the preliminary objections filed with the Chester County Court; is that correct, sir? A Yes. Q If you turn, sir, to paragraph 16 of the preliminary objections, I would ask you whether there was anything in that statement that you now wish to correct? A We would have to correct that we did indeed send one letter to the Lionville address but that was subsequent to our -_ Q Sir, in paragraph 16, you state that defendants have never communicated. I will now exclude some verbiage. Defendants have never communicated with plaintiff in Chester County; that is an incorrect statement? A That is not correct. GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 .......... . ) "'., 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 v 49 Q Thank you. By the way, let me ask you to collect from the pile of exhibits in front of you, the correspondence which has already been marked as Exhibit D-7. A Okay. Q What is the name of the entity appearing at the top of that letterhead? A Arnold Logistics. Is there any indication on that correspondence Q as to the nature of the legal entity that Arnold Logistics is? A No. Q Would the receiver of that letter have any knowledge whether Arnold Logistics was a separate company from that letterhead? MR. LEWIS: It calls for speculation. Any number of people could receive this and interpret it in any fashion. BY MR. SCHNEIDER: Q Sir, do you know the difference between a division and a subsidiary? A I think I do, yes. Tell me what you think the distinction is. A subsidiary is a corporation that is part of Q A and that works under a holding company and that would be Lebarnold in this case. GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 .r") .' 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 .....,) 50 Q And, sir, do you know how corporations are typically identified to the outside world as being a separate legal entity? A Typically, in their name, it would say incorporated or corporation or something that does identify that as a business entity. Q And there is no such reference on the letterhead by which you sent your January 30, 1997 letter to Mr. Rubin, is there? A That's correct. MR. SCHNEIDER: Would you please mark as Plaintiff's Exhibit No. 13, this piece of paper? (Document marked as Plaintiff's Exhibit No. 13. ) BY MR. SCHNEIDER: Q Mr. Enck, I am going to hand you now a single sheet of paper marked as Plaintiff's Exhibit No. 13 and ask you to take a look at that and tell me when you are ready. A Okay. Can you please tell me what the original of Q Plaintiff's Exhibit 13 was or is? A It's a photocopy of a calling card. Q A business card? A A business card, one of ADW, which is now Arnold Logistics showing Herbert E. Rubin as marking GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ,.." I '\ 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 ...",) 51 .",' consultant. Q Who gave Mr. Rubin this business card? I would have. I t I A Q Who printed the business card? That, I don't know. I'm not sure which A printer. Q At whose instruction? A At our direction, yes. So this business card was printed for Mr. Q Rubin at the direction of ADW; is that correct? A That's correct. Q Is there anything on this business card that identifies ADW as a stand-alone separate legal entity? A No. Q Is there anything on this business card that would tell a recipient the nature of ADW's legal relationship with any other company whatsoever? A No. Q And there is no reference to ADW being an incorporated legal entity as per this business card; is there? A No. Q One of ADW's major contracts is with Coor's Brewing; did I get that right? A That's true. GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ~) 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 ~ 52 Q And no one in Chester County drinks Coor's Beer that's delivered by ADW's trucks; is that your testimony? A We do not deliver beer to anybody in Chester County. Q So none of the beer distributors in Chester County who offer Coor's Beer products to the public receive their inventory from ADW __ A That's correct. Q -- or Arnold Logistics; is that also correct A Q That's correct. -- or any other Arnold affiliate; is that also correct? A That's correct. Q During your direct examination by Mr. Lewis, you refer to Arnold Logistics as an operating division. Do you recall that testimony? A Yes. Q An operating division of what? A Of Lebarnold now Arnold Transportation Services. Q Correct me if I am wrong, did you testify that in 1997 year-to-date, Lebarnold had made no pickups or deliveries within Chester County? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ,ry 1 2 3 4 5 6 7 8 9 10 11 12 13 ("'") 14 ...... 15 16 17 18 19 20 21 22 23 24 25 v 53 A As based on -- I questioned our marketing group, the marketing group with Lebarnold. And they could not come up with any record of pickups or deliveries in Chester County. Q Then you testified that during the preceding six years, by which I assume you mean 1990 through 1996, there had been no regular trips by Lebarnold trucks to deliver or pick up goods within Chester County? A That's correct. Q When you testified to the regularity of such trips, what did you mean to suggest? A That we do not have any business relationship with Chester County companies. It is possible that a Lebarnold truck could have at one point in time delivered to a store or something in Chester County. But it would have been a sporadic thing. There is no relationship that in the scope of the revenues that the company does that show up on the charts without having to go through every single pro bill which would be in the hundreds and thousands for that period of time. Q Let me see if you understand what you just said. And if I don't, please clarify it for me. Are you saying there are no companies within Chester County, to your knowledge, who during this period had a regular contract for Lebarnold to pick up goods at their locations? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ,/""'.., ,I 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 ...) 54 A That's correct. Q What about companies located anywhere else who did business with Lebarnold who might direct Lebarnold to make deliveries into Chester County, are you excluding those transactions from your statement about regular business? A I can't answer that question. But it's possible that they made deliveries or pickups at another company's direction in -- Q And you simply -- I'm sorry? I just don't know. And you therefore also don't know the volume A Q of those deliveries? A I know that it was not a significant volume or that would be information to be aware of or what the insignificant volume, if anything, because it would be more readily available. We would know. Because of the nature of the truckload business, you do not have hundreds and hundreds of customers. Your customers are generally larger customers. I am just trying to clarify why I would be able to say that it would be, if any business, it would be insignificant. Q What is considered insignificant to a $350 million company? A To my mind, it would be probably less than 1 percent of revenues. GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ,......, 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 .....,; 55 Q speculation? A That's my speculation. Q So you are not testifying; you are merely inferring at this point; am I correct in that understanding? A That's correct. Q You have not, in fact, assessed the volume of business that Lebarnold may deliver or may have delivered to entities located within Chester County during the period from 1990 to 1996; is that a correct statement? A That's correct. Q Thank you. Is that also a true statement for the other operating companies within the Arnold Industries' umbrella that you have not assessed the volume of their deliveries into Chester County during the period 1990 to date? Is that your testimony or is that your A That's correct. Q Do you know how many regular customers, by which I take it you mean people who are dispatching the trucker to do pickups, how many regular customers New Penn Trucking would have had within Chester County during the period 1990 to date? A No, I wouldn't know that. Q That is simply information that is not available to you? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 I') ." 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 v 56 A Right. Q Do you believe there are such customers of New Penn Trucking located within Chester Country during that period of time? A I really don't know. Q Fine. In response to a question for Mr. Lewis, you stated that some of Mr. Rubin's compensation may have been issued from Lebanon instead of Camp Hill because the main data processing center is located in Lebanon; is that a correct summary of your testimony? A That is correct. Q Whose main data processing center is located in Lebanon? A Arnold Industries. MR. SCHNEIDER: Let me ask the court reporter to mark as Plaintiff's Exhibit No. 14, an invoice. (Invoice dated November 1, 1996 marked as Plaintiff's Exhibit No. 14.) BY MR. SCHNEIDER: Q I will ask you only to focus on the top portion of this document. A Okay. Q What entity was issuing this invoice? A Arnold Logistics. Is there anything on this invoice that would Q GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ~ \ ,.....' 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 '...,J 57 instruct the recipient as to the nature of Arnold Logistics as a legal entity? A No, there's not. Q And there is certainly nothing that identifies Arnold Logistics as being affiliated with a company that you have identified as Lebarnold, is there? A No, there is not. Q Do salespeople employed by ADW or Arnold Logistics make calls into Chester County? A They may. Q You don't know? A I can't state any specific sales calls into Chester County. There are no businesses that I am familiar with that we have made marking efforts for in Chester County. Q Let me probe that answer, please. You are not saying that they are prohibited from making calls in Chester County, are you? A No. Q You expect them to go anywhere and everywhere they can to generate business, don't you? A That's correct. Q And therefore, is there any reason for you to believe that a cordon sanitaire has been erected around Chester County such that your salespeople have not ventured GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ,11) ".-:--" 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 v 58 into Chester County for the purpose of generating business? A That's correct. Q So you believe it is likely that they have ventured into Chester County for the purpose of seeking out business opportunities? A It's not likely, no. Do you think it is unlikely? Q A Yes, that they have ventured into Chester County, it is unlikely. Q But it's not impossible? It's not impossible. You simply don't know at this time? I don't be 1 i,eve anybody has made calls in A Q A Chester County. Q During the entire period 1990 through 1996; is that your testimony? A That's my testimony. Let me ask the court reporter to mark as Q Plaintiff's Exhibit No. 15, a letter dated November 11, 1994. (Letter dated November 11, 1994 marked as Plaintiff's Exhibit No. 15.) BY MR. SCHNEIDER: o Mr. Enck, let me ask you to take a look at Plaintiff's Exhibit No. 15. GElGEIl /, I,QllIA REPORTING SERVICE - 1-800-222-4577 y. -"tr-:O;' 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 . I \..,,) 59 A Okay. That document bears the signature of Herbert Q E. Rubin, does it not? A Yes, it does. Isn't it a fact, however, that that document Q was created at the ADW facility in Camp Hill? A Yes, it appears it was. And, again, looking at the letterhead of the Q document, there is nothing, sir, is there, that would help the recipient understand the nature of the ADW as a legal entity, is there? A That's correct. Q It doesn't indicate that ADW is a subsidiary of Lebarnold, does it? A No, it does not. MR. SCHNEIDER: Let me ask the court reporter, to please mark as Plaintiff's Exhibit No. 16, a one-page letter dated September 7, 1993. (Letter dated September 7, 1993 marked as Plaintiff's Exhibit No. 16.) BY MR. SCHNEIDER: Q Mr. Enck, I show you what has been marked as Plaintiff's Exhibit No. 16. I would ask you to take a quick look at the letter and let me know when you are ready to proceed. GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 r) ,.........,i 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 v 60 A Okay. Q Did you receive a copy of that letter on or about September 7, 1993? A It appears I did, yes. You will note that Mr. Rubin refers to your Q company as ADW, Incorporated. Do you see that in the very first line? A Yes, I see that. And he also copies you as Doug Enck-ADW, Q Incorporated; do you see that? A Yes, I do. Q On September 7, 1993, there was no legal entity called ADW, Incorporated, was there? A That is correct. Q Did you ever inform Mr. Rubin that he was incorrect in how he was characterizing your company in this letter? A I don't recall. Q Thank you. MR. SCHNEIDER: Let me mark as Plaintiff's Exhibit No. 17, a one-page letter dated March 3, 1993. (Letter dated March 3, 1993 marked as Plaintiff's Exhibit No. 17.) BY MR. SCHNEIDER: Q Mr. Enck, let me show you a document that has GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 () """"'~ ." 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 v 61 been marked as Plaintiff's Exhibit No. 17, a one-page letter written by Herbert E. Rubin. Let me know when you have read the letter and are prepared to proceed. i I , t' , I' ! A Okay. Q This letter indicates by a handwritten entry at the bottom that a cc was sent to Doug Enck. Do you acknowledge receiving a copy of this letter on or about March 3, 1993? A I really don't recall. Are you saying you do not recall receiving the Q letter? A I don't recall whether I received it or not. Q Is this the first time you have ever seen this letter, to your recollection? A This specific letter, I honestly couldn't tell ., you that answer. I don't recall back to 1993. Q Let me ask you to focus on the first sentence of the second paragraph where, again, Mr. Rubin refers to himself as a broker for ADW, Incorporated, and ask whether that reference in this letter helps you recall whether after receipt of Plaintiff's Exhibit 16, Mr. Rubin's September 7, 1993 letter, you ever informed Mr. Rubin of the mistake and nature of his characterization of ADW. Does this letter assist you in remembering whether you advised Mr. Rubin after seeing the September 7, GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ~ ! '.",.-, 1 2 3 4 5 6 7 8 9 10 11 12 13 () 14 15 16 17 18 19 20 21 22 23 24 25 '....J 62 1993 letter that he was mistaken in characterizing your company as ADW, Incorporated? A I don't recall it was in that time frame, no. MR. SCHNEIDER: Let me ask the court reporter to mark as Plaintiff's Exhibit No. 18, a letter dated July 25, 1991. (Letter dated July 25, 1991 marked as Plaintiff's Exhibit No. 18,) BY MR. SCHNEIDER: Q Mr. Enck, please take a look at the document that has been marked as Plaintiff's Exhibit No. 18. A Okay. Q Is that your signature on Plaintiff's Exhibit 18? A Yes. Q Did you send the original of this letter to Mr. Michael Sorenson? A Yes. Q And you show a copy to Herb Rubin; is that correct? A That's correct. Q Does this letter refresh your recollection, sir, as to when your company and Herb Rubin first began to do business regarding contract packaging for third parties? A It would have been into the 1991 time frame, I GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 () "".,' 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 ....,) 63 believe. Q Thanks. You signed this letter as vice president, ADW, did you not? A Yes. Q And the letterhead is, again, ADW? A Yes. Q There is nothing on this letterhead or in your signature that would inform a third party as to the nature of the legal entity ADW, is there? A That's correct. Q You testified, I believe, in response to a question by Mr. Lewis that Arnold Logistics is part of Arnold Transportation Services? A As of now, yes. Formerly, it was Lebarnold. And is it correct to say that Arnold Q Transportation primarily operates in the northeast, southeast, and southwest states of the United States? A That's correct. Q And you would agree that Pennsylvania is in the northeast part of the United States? A Yes. Q And is it fair to say that the average length of haul of an Arnold Transportation Services' trucking assignment is 350? A That's correct. GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ~ , , ',..,' 1 2 3 4 5 G 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 ;,...J 64 Q And you would agree, sir, wouldn't you, that Chester County is well within 350 miles of either Camp Hill; Lebanon; or Mountville, Pennsylvania, isn't it? A Yes. MR. SCHNEIDER: If you want to take a break at any time, you certainly can. MR. LEWIS: Okay. (Recess. ) BY MR. SCHNEIDER: Q Having had an opportunity to confer with your counsel, are there any answers that you wish to revise or clarify? A To clarify your 350 -- I didn't want you to take the wrong assumption -- what that is stating is that their average length of haul is 350 miles, which goes beyond. In other words, I tried to explain to you that Lebarnold, SilverEagle, Dalworth are irregular route long-haul truckload carriers meaning that the 350 is their average length of haul. They are looking for runs -- typically, 200 miles is what they call a minimum or a short run. They are actually looking for longer hauls, not -- I don't want you to feel this was within a 350-mile radius. That's the average haul. And they are actually a long-haul, not a short-haul type company. GEIGER & LORIA REPORTING SERVICE .. 1-800-222-4577 '" ! 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 v 65 MR. SCHNEIDER: Mr. Lewis, you had supplied me with Arnold Industries' Annual Reports for 1994, 1995, and 1996. Can we stipulate to their authenticity and use in this venue related proceeding without the need to clutter the record in this deposition? MR. LEWIS: Absolutely. MR. SCHNEIDER: Thank you. BY MR. SCHNEIDER: Q What is your current title, Mr. Enck? Vice president, general manager, Arnold A Logistics. Q And how long have you held that title? A The Arnold Logistics name, since the name change, which I guess is about a year and some months ago now. Q Isn't it a fact, sir, that SilverEagle Transport, Incorporated, has been identified by Arnold Industries as a division of Arnold Logistic Services? A Yes. Q Is it not also a fact, sir, that Dalworth Trucki.ng Company has been identified by Arnold Industries as a division of Arnold Logistics Services? A Yes. Q And is it also a fact, sir, that Lebarnold, Incorporated, has been identified by Arnold Industries as a GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 (~, - '1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 v 66 division of Arnold Logistics Services? A Yes. Q In fact, Lebarnold has been characterized as an Arnold Logistics Company, hasn't it? A It may have been referenced to that in the reports, yes. Q Is it not also a fact, sir, that Arnold Industries has characterized ADW as a division of Arnold Logistics Services? A Yes. MR. SCHNEIDER: I am going to ask the court reporter to please mark as Plaintiff's Exhibit No. 19, a one-page excerpt from the 1995 Arnold Industries Annual Report. (Excerpt marked as Plaintiff's Exhibit No. 19.) BY MR. SCHNEIDER: Q Let me show y~u, Mr. Enck, what has now been marked as Plaintiff's Exhibit No. 19. It appears to be page 4 from the 1995 Arnold Industries' Annual Report. Could you please read for the record the entry that appears in the middle of the page under the bold letters Common Marketing Identity. A "Arnold Transportation Services, formerly Arnold Logistics, adopted its new name and marketing GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ','- le-' '.:.." I. " :'. I I, " r .-----... , 1 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 -..; 67 identity in 1995. The change emphasizes its primary mission as a truckload transportation provider and eliminates confusion regarding the term "Logistics," which better reflects the services provided by the value-added warehousing division." Q Thank you. MR. SCHNEIDER: Let me ask the court reporter to mark as Plaintiff's Exhibit 20, another one-page excerpt from the 1995 Arnold Industries' Annual Report. (Excerpt marked as Plaintiff's Exhibit No. 20. ) BY MR. SCHNEIDER: Q Let me hand Plaintiff's Exhibit 20 to you, Mr. Enck, and ask you to read the paragraph that appears in the middle of that page beginning with the word "the." A "The packaging business of Logistics, which was started in 1993, surged to 100 percent growth in 1995 over prior year levels reinforcing our view that Arnold Logistics is filling an important gap in existing distribution channels. "Arnold Logistics has been awarded another major northeastern distribution center and packaging contract for 1996." Q In that paragraph, to vlhom does the word "our" refer, if you know? It is in the third line of what you GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 v ,...-..,) 1 2 3 4 5 6 7 8 9 10 11 12 13 .~, (l~~) 14 15 16 17 18 19 20 21 22 23 24 25 68 have just read. A Since this is written in the Arnold Industries' Annual Report, I would have to say it's referencing our would be Arnold Industries. Q And you don't disagree, sir, do you, that the top of page 8 refers to Arnold Logistics with the statement the Logistics Division changed its name in 1995, do you, sir? You see those words, don't you? A Yes, I do. Q As we are sitting here today, sir, do you know how many of the customers whom Herb Rubin brought to your company are still doing business with your company or with any of the other entities within the Arnold Industries' umbrella? A None of them. Q None of them? A None of them at this point. Q And that includes the entire Arnold Industries and not just ADW; is that your testimony? A Well, the only business that Herb brought to any Arnold Industries subsidiaries or divisions was to Arnold Logistics. Q Is it your testimony that none of those companies contracted for freight hauling, warehousing, distribution, fulfillment, or any other type of business GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ",--., . 'I q,' 1 2 3 4 5 6 7 8 9 10 11 12 13 ,..n'Io\. U 14 15 16 17 18 19 20 21 22 23 24 25 .....,; 69 serviced by other arms of Arnold Industries? A As a result of Herb Rubin's? Q No, I didn't say that, sir. I said, Is it your testimony that none of those entities has contracted with any subsidiary division or other entity within the Arnold Industries' umbrella for freight hauling, packaging, distribution, warehousing, or fulfillment business, to your knowledge? A No, that's not my testimony. So that such contract relationships do exist Q or have existed; is that correct? A They could, yes. Could is different from do or have. Do you Q know or are we speculating? A I don't know. Q I asked you earlier and you gave a very uncategorical answer. Let me ask you then to go back and clarify for me, if no one else. Do you know, sir, as we sit here today, whether any of the companies whom Herb Rubin brought to your company for contract packaging business are still doing business with any of Arnold Industries' subsidiaries, divisions, or other entities for purposes of freight hauling, packaging, warehousing, distribution, or fulfillment. MR. LEWIS: I would have to object for a GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ~ ~.' 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 ~ 70 couple of reasons. First of all, I object to the characterization of his prior testimony as being categorical and the implication of that description. But more importantly, I object to the implication which I think is not established on the record that a relationship that another Arnold Industries' entity such as New Penn might have what a particular customer somehow flowed from or resulted from Mr. Rubin's efforts. MR. SCHNEIDER: I don't think that was my question. MR. LEWIS: You talk about continuing and that carries with it the implication that a relationship continues as a result of something Mr. Rubin did. BY MR. SCHNEIDER: Q Mr. Enck, will you answer my question? It would be easier to answer if you specified A the companies that you have in mind. Q That's fine. But I would like to ask the questions my own way. And if the answer is you don't know, then I will accept that. I am simply trying to determine whether companies whom Herb Rubin brought to your company have done business with any of Arnold Industries' satellite organizations in any capacity sUbsequent to Herb's bringing that business to your company? A I don't know. GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 I~ 1 2 3 4 5 6 7 8 9 10 11 12 13 C> 14 15 16 17 18 19 20 21 22 23 24 25 v 71 MR. SCHNEIDER: I have no further questions, Mr. Enck. Thank you very much. REDIRECT EXAMINATION BY MR. LEWIS: Q Just a couple follow-ups. To your knowledge, did Mr. Rubin have reason to be aware of the Arnold Industries' corporate structure? A Yes. I would think he would have been aware of that. Q And to your knowledge, would he have had such information prior to the time that the business relationship was formed between Mr. Rubin and your company? A Yes. MR. SCHNEIDER: I am going to object for the record to this line of questions to the extent that this witness is testifying to what another person may have known or not known based upon his personal beliefs. MR. LEWIS: Let's follow up on it then. BY MR. LEWIS: Q What would be the basis for your belief that Mr. Rubin had knowledge regarding the Arnold Industries' corporate structure? A The initial meeting when Herb came to us and GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 n "'~. 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 ~ 72 suggested contract packaging business, he said the reason he came to us was because he had reviewed an Arnold Industries' annual report and knew that we were a financially sound company in the warehousing business and it seemed like a logical fit to develop the contract packaging. Q At some point in time, your company was referring to itself as ADW; is that correct? A Yes. Q And it later changed to Arnold Logistics; is that right? A That's correct. Q During the time period that your division was referring to itself as ADW, what did Arnold Logistics refer to? Was that name being used at the same time? A I think during the period of time Arnold Logistics was the name used as -- we call it the marketing umbrella for Lebarnold, SilverEagle, and Dalworth. Q At any time was the name Arnold Logistics used by New Penn Motor Express? A No. Q The initials ADW, were those initials ever used by New Penn Motor Express? A No. To your knowledge, have the identifiers ADW or Q Arnold Logistics ever been used in the same place as New GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ....--, , ',.", 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 "-' 73 Penn Motor Express in any publication other than an annual report or an Arnold Industries 10K? A Not to my recollection. I understand that you can't know what is in Q Mr. Rubin's mind. But do you have any information or any reason as to why Mr. Rubin might be confused as to the relationship between ADW or Arnold Logistics and New Penn Motor Express? A No. I see no reason for confusion. MR. SCHNEIDER: I will object to that answer and that question for what it's worth. MR. LEWIS: Off the record. (Discussion held off the record.) BY MR. LEWIS: Q Mr. Enck, I would like you to look at Plaintiff's Exhibit 14. Do you see that? A Yes. Q And this item has been identified as an invoice from Arnold Logistics. Who is it addressed to? A To Zeigler Brothers, Incorporated, in Gardners, Pennsylvania. Q Was that a customer of Arnold Logistics? A Yes. Q Do you know what county? Was it sent to Gardners, Pennsylvania? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 C) 1 2 3 4 5 6 7 8 9 10 11 12 """" 13 ~J 14 15 16 17 18 19 20 21 22 23 24 25 '.....; 74 A Yes. Q Is that in Chester County, to your knowledge? No. A Q Where is it? A I am not sure. I believe it's Adams County. But I am not positive. Q I would like you to look at Plaintiff's Exhibit 15, which has been identified as a letter from Mr. Rubin under ADW letterhead. To whom is this letter directed? A Quaker Oats Company in Chicago, Illinois. So it was sent to Chicago as far as you know? Q A Yes. Q And I would like you to look at Exhibit 16, 17, and 18, all of which appear to have been directed to Kentucky. And I will ask you, to your knowledge, were the originals of all these documents sent to Kentucky? A To my knowledge, yes. Q You testified in response to some questions by Mr. Schneider about the average length of a Lebarnold SilverEagle and DW Dalworth haul. For any of those entities, would a haul less than 200 miles be an unusual occurrence? A Yes. Q And is that fact part of the reason for your GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 r"'\ ,- , 1 2 3 4 5 6 7 8 9 10 11 12 13 <0 14 15 16 17 18 19 20 21 22 23 24 25 '...,.} 75 testimony that you would not expect Lebarnold to have done business in Chester County? A That's correct. MR. LEWIS: That is all I have. RECROSS EXAMINATION BY MR. SCHNEIDER: Q I just want to ask one question to clarify regarding Plaintiff's Exhibit 15. Mr. Enck, is it correct that Plaintiff's Exhibit 15 was signed by Herbert E. Rubin but, in fact, it was prepared by your company, ADW, for his signature? A Yes. MR. SCHNEIDER: Those are all of the questions I have. Thank you very much. MR. LEWIS: Nothing further. (The deposition was concluded at 11:16.) GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 rj 1 2 3 4 5 6 7 8 9 10 11 12 ,,~) 13 1.,,,,,,. 14 15 16 17 18 19 20 21 22 23 24 25 -.-J 76 STATE OF PENNSYLVANIA ss. COUNTY OF LANCASTER I, Lisa M. Loop, a Reporter Notary-Public, authorized to administer oaths within and for the Commonwealth of Pennsylvania and take depositions in the trial of causes, do hereby certify that the foregoing is the testimony of DOUGLAS B. ENCK. I further certify that before the taking of said deposition, the witness was duly sworn; that the questions and answers were taken down stenographically by the said reporter Lisa M. Loop, a Reporter Notary-Public, approved and agreed to, and afterwards reduced to typewriting under the direction of the said Reporter. I further certify that the proceedings and evidence contained fully and accurately in the notes by me on the within deposition, and that this copy is a correct transcript of the same. In testimony whereof, I have hereunto subscribed my hand this 5th day of November 1997. cX~ )77 dGrp Lisa M. Loop, Reporter My commission expires: October 27, 1997 GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 EI:: ~!B t'- ~S^1 ~ ';\ ~ :!: Vl 0 0 0 '" .... III 0\ 0\ - lol t.l >. .... ... 0 " > ... .. Z tJ .... ... .. 0 ... .. Z 10 II) - 0\ ,.,.... III 5 '" GJ I:Il c c::: .... ...0 0 " Ill": .... 0 r:j . C III >< <Xl ...'" III ... ... .... '.!r, =: ~~~ =: ,., C 0 E c 1: ~""g: ;,; .... .c C a .. .'" = " 0'" 0 .c "';5:":. !'!i "", ""< tJ ~ "'< ::IN;::) ~ :q... rrr ",I - S ~ --- ........... ~f ~~~ c..:= C=CJ,.; FILE No. 354 08/18 '97 16:47 ID:CAPIroL AUTOMATED SYS. 610 594 1945 PAGE 1 ". ".'.1 . . .- . I I i .,.,.., "'1 ""1" 1'" , I i i I 1 I I . , , I i 1 I i I I I 1 I I I , 1 , I I I I I I I I 1 1 , 1 I I I I I I I I i I , I I I , , I \t1 1 I I 1 I I I I I' <l' 1 I I I O'l I 1 I I , .- I ~ I I ~ I io I I I I I 1 I 0' I z MO I 1 '0 '1 1 I I I I I CD i I .1 i I I ll>.- i i I I I ::l~Sl(D I:' : I I i , I I I I 1 ct<l''''~ I I I I u.i~~~ I 1 I I I 1 1 I- '(ilj uJ I i , J I I cto~'" 1 C.\ I i I I d .... I I ; 10: I ~a.~~ ~ . mi Q i I I I I i i Jar .... I ct In ~! .... i !:l:! ....s': tll.ll:, 1lI I i , I a; . Dl 1 ou i I i co ,..:l .: I I>l, ml i I I I I' i "' . it). I....: I i "Q , .... I I i I .. 101 If a ,,* "d g'1 >. J I I I 1 I i ..... i :z I 0' ~ = 01 I t) I 1 I I ... c:l, .... 1 I I III I I i I .:5. .. ! >,' " ~ ~I I i '....1 tn I i g' '" =' I I 4" I ." ..: I ..ci 4 I I I ! I I I , I 1 I I i i i i DEFENDANT'S EXHIB~ ---=(J.x"f? - t"K., '. ' . .', '.'~~ . i'!'.;; ~: _ HERBERT E. RUBIN POBOX 496 1I0NVILLE. PA 19353 PHONE 610-594.1943 FAX 610-594'1945 AugUSt,18, 1997 -_..._---~_.," ADW/Arn01d.Logi s,tics Att: Doug Enck -..-----,. ---..---------.-..--.- ------..---...-. ------------.----- INVOICE - --------.-- '.. ---..----.-----------... ..--------.-.--.--.. JUly Commissions - _'h',_ ...._---+--_._-- -._---~ -...----..- .--------- A",""-"O~',,,,OO'_ -->.o~O ___ _ _ j ~. :' $3,000 ':-:. .','! ;~~::;,:;::: . . . .;----.__n__ '_____._ - _._-._--~-------._---+- -..--.--.------.- -. .--...---.--.. "'-'--.- .. --.--.-.--- +'-..--- .--------.... ---.--------...-. -.....-....-.-- -. -'- ---------..,--- ---'---_._,-----.._-- "------,-,--,- . f . "0 ..______..___________ - '-----..- --..-'..-------..-----.-- -------..'..-------- , ~ -----, ~ t " --. -------------------- ", .....---'.---'------...---......,----------- ------------- --.,-+---._._---_..._-.._~ --. ----------.-- -.--.. _. B.__ --'-'-,~ ! -.----.- -...---------.. -._-~ -._- - -- --~-. 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I I I I I I I i I I I I i I i I 1l<:1l< 1-3O:(nfoHnation 30 a. :FlLE cleared by operator P.D. :FILE cleared by power loss 1-1X:No answer at remote locat ion 1-2)(:Loca I mach ine prob lem 1-3X:lmage errors (-4X:Remote machine problem I -5X :Remote mach i ne d i scol'nected 1-6X:[~lete transmission due to excessive erro/'S 1-7X:Remote machine not ~atible 1-FX:Other information " . ... TRANSM I 55 I ()II REPORT ... PRINT mE 06/25 '<:{7 16:02 \D: CAPITO.. AlJTCK"i=lTED SYS. D- FILE 5Tt:RT t1JlE No. No. TltE 00 911 06/2S 16 :01 1)( LOCATiCN STrnE ~ 1 1)( PAGE 1 RX ~ o TOT~ CODE mE OO'4Q" CI< 17177616688 __l,.._~........._..____._'_'___.."." ......................_....... _'" ......~.. - .,....,,-...... ......".....-.... 0"- ..-.. ..._..,.,._R81....,.~y...".. .... "....... copy ~ No. ._ .....__ o. . ... Hertlert E. Rubin P.O. BoX 496 Uonvllle, PA 19353 Phone' (61Q\ 594-1943 Fax (610l 594-1945 Ju.ne 26, 1997 Arnold Logistics Att:: D(lUg Enck INVOICE June COmMissions $3,000 ll<:1l< 1-30: Informat ion 30 Q.,:FlLE cleared by operator P .D. :FlLE cleared by power loss I-IX:No answer at remote location 1-2)(:Local machine problem 1-3)(:lmage errors 1-4X:Ramote machine problem 1-5X:Remote machine discomected 1-6X:lncon()lete transmission due to excessive errors 1-7)(:Remote machine not COIlClatib Ie I-f)(:Other information ... TRANSMISSION REPORT ... PRINT TIME 03/12 '97 08:10 lD: CAPITCl AUTOMATED SYS. D- FILE START MODE No. No. TIME 00 126 03/12 08:09 TX LOCATlI)II 17177616688 'STORE TX ,PAGE ~ 2 2 RX TOTAL CODE ~ TIME o 01 '07" OK ....... ..,.......... ..,....,.,.~.. .....~".. ........... .-... ......, ,..".., ........." ......, , ....... ... . ... ........ ....-"..,.. ..,.,.......,.REM,.,...RE!:AY..,............, ...... ... .. CCPY GRO..P No. ' : '. . ...' Herbert Eo Rubin P.O. BolC 496 Uonville, PA 19353 Phone: (610) 594-1943 Fax 1610\ 594-1945 March 12, 1997 Arnold Logistics Att: Doug Encl<: . INVOICE March Commissions $3,000. ll<:ll< 1-30: lnformat ion 30 CL:FILE cleared by operator P.D.:FlLE cleared by power loss 1-1X:No answer at remote location I-2)(:LocaI machine problem 1-3){:lmage errors 1-4X:Remote machine prob lem 1-5X:Remote machine discomected 1-6X:Inccfl'lllete transmission due to excessive errol"S 1-7)(:Remote machine not COfl'Ilatible 1-fX:Other information Herbert E. Rubin P.O. Box 496 Lionville, PA 19353 Phone: (610) 594-1943 Fax (610) 594-1945 March12, 1997 Arnold Logistics Att: Doug Enck INVOICE February Commissions $3,000 ~.8 .!!!:'......y-~ Co: ... TRl=t-JSMISSI(}.I REPORT ... -, PRINT mE 01/26 '~ 13:52 lD: Cl=IP I TO. AUTO'lATED SYS. D- FILE ST~T t'lJre LOCATlIlII STrnE TX RX TDTt=L core No. No. TII"E ~ PAGE f'1:I3E TltE 00 833 01/26 13:51 TX 17177616688 1 1 0 00 '39" Il< ........... ......1..- ~....,_..._..__._........_. __...._. _............_.,......~ I..., .. .................................... ....................... ._....RI;M,"....m..flY.......-. .... ..... I_H. .... ......... CCPY l?RO..fI No. Herbert Eo Rubin P.O. Box 496 Llonvil/e. PA 19353 Phone: (810\ 594-1943 January 27~ 1997 Arneld Logistics At!:: Doug Encl\: Fax (61 Q) 594-194,g, INVOICE January 1997 commissions $3,000.00 1l<:1l< I-3Q:Information 30 a.:FILE cleared by operator P.O. :FILE cleared by power loss 1-1X:No answer at remote location 1-2X:Local machine problem 1-3X:lmage ert"Ors 1-4X:Remote machine problem I-5X:Remote machine discomected 1-6X:ll'\COfrlllete transmission due to excessive errors I-7)(:Remote mach ine not ~at ib Ie l-fX:Cther informat ion business is located in Hampden Township, Cumberland County, Pennsylvania, with its mailing address at 4410 Industrial Park Road, Camp Hill, PA 17011. 4. Lebarnold is a wholly-owned subsidiary of Arnold Industries. 5. Plaintiff avers, incorrectly, that he did business with Arnold Industries "through its Arnold Logistics division . . [formerly] known as ADW." 6. "Arnold Logistics" and "ADW" are fictitious names used by a division of Lebarnold whose principal place of business is currently located in Hampden Township, Cumberland County, Pennsylvania, with a mailing address at 451 Freight Road, Camp Hill, PA 17011. 7. "Arnold Logistics" and "ADW" are not and never were divisions of Arnold Industries. 8. During the relevant time period, the Lebarnold division using the fictitious names "Arnold Logistics" or "ADW" was located at 4408 Industrial Park Road, Camp Hill, Cumberland County, Pennsylvania 17011. 9. Defendants object to the averments of paragraph 6 of plaintiff's complaint as pure legal conclusions with which they disagree. -2- 10. There are no factual averments in paragraph 6 or elsewhere in the complaint that properly establish venue in this Court aqainst defendants under Pa. R. Civ. P. 2179. 11. The venue of this action is improper in Chester County, since under Pa. R. civ. P. 2179 plaintiff may only bring this action aqainst the defendant corporations in the county where the causes of action arose, where defendants' reqistered offices or principal places of business are located, where defendants regularly conduct business, or where a transaction or occurrence took place out of which the causes of action arose. 12. Plaintiff's four (4) causes of action -- for breach of contract, rescission/reformation/accountinq, unjust enrichment, and misrepresentation -- all arise out of a series of alleged transactions between plaintiff and Arnold Logistics/ADW that took place from 1991 until April 1996, at which time the business relationship between the parties was terminated. 13. Accordinq to plaintiff's averments, all of his claims aqainst defendants accrued on or before April 1996. 14. On information and belief, defendants aver that at all relevant times between the inception and the conclusion of the parties' business relationship in April 1996, plaintiff resided and conducted his business from within the City of Harrisburg, Dauphin County, pennsylvania. -3- 15. There were no transactions between the parties subsequent to April 1996. 16. Defendants have never communicated, or engaged in any transactions, with plaintiff in Chester county. 17. None of the defendants maintains a business office' or employs any employees in chester County, nor did they do so during the relevant time period. 18. None of the defendants regularly conducts business in Chester county. 19. Plaintiffs' alleged causes of action arose, if at all, in cumberland county or Dauphin county, but not in Chester county. 20. As stated above, defendants' registered offices and principal places of business are located outside Chester county. 21. No transaction or occurrence related to this action took place in Chester county. 22. Aside from the erroneous allegation that "Arnold Logistics/ADW" is a "division" of Arnold Industries, plaintiff has not alleged any contract, business relationship, transaction, or occurrence involving plaintiff and Arnold Industries. 23. plaintiff has not alleged any factual or legal basis for imposing liability upon Arnold Industries for transactions engaged in by a division of one of its subsidiaries. -4- 24. Accordingly, venue would not be proper in Lebanon County. 25. Since plaintiff no longer resides in Dauphin County, the most appropriate alternative venue, if any venue is proper, would be the Cumberland County Court of Common Pleas. 26. Defendants were not personally served in Chester County, but their general counsel agreed to accept service of the complaint at his address in Harrisburg, Dauphin County, Pennsylvania. WHEREFORE, defendants Lebarnold. Inc. and Arnold Industries, Inc. respectfully request that this Honorable Court dismiss the action for improper venue under Pat R. civ. P. 2179, or, in the alternative, transfer the action to the Cumberland County Court of Common Pleas. Respectfully submitted, KEEFER WOOD ALLEN & RAHAL, LLP By: ~~-;;; (/ Eugene ep nsky, Jr. Attorney Id. No. 23702 Donald M. Lewis III Attorney Id. No. 58510 210 Walnut street P.O. Box 11963 Harrisburg, PA 17108-1963 (717) 255-8051 and -8038 Date: August ~, 1997 Attorneys for defendants -5- ARNOLD LOGISTICS 4408 INDUSTRIAL PARK ROAD CAMP Hill, PA 17011 (800) 987.3914 ~- INVOICE No. t ',' iY~';.::4'.. TO ::;:2,/:.::::: ; .'~j1Ir' Ii ;'L1.., ;:'~',."L lOCATION - ',1/01' ", DATE " CUSTOMER No. lEIGLEl"\ 1~r:T,S., [Nt:. ATT': TERFY JIJI'IPER P .1,3. EII:):( ~,!/ GARDNER:!:, f'{\ .1 ':"::'.;~4 BASED ON INVENTORY OF DeSCRIPTION , . DtJANT1TY '.RATE " N,tOUNT I/;j I ',"'~' ~~I-IIF'F'EH DATE REC:E~:''T/130L IJHDEn lC)l:31/'~'.:, IN']'I'AI_L CHAIi,',;E: ~~ANDI . (i\l,;. H,;).NOL l. ;..;(..:: I~J j' oUT ... inFi:t.r.:.,::: 'JUr"':: L.i':111:~..:" 'r(, ''':;.:. :.1 6t) ~ 'J;- :..':;"',;;:, . ..._.__.~,~..".. ......,...-- ...~ - ..----...--.. ; ~ .::<i. ~~I . . .," .. .t.,:,,",t.,. . .T,\LS - HANDLING IN ::: :PPL., ., ! '':'':;~'. ','":7' - _.....__._.~-- l..~,,~.lj.,::...'~' Hi:),NCI.rl'J(~ ~I'J ,','; "~::.n-t='L f-iANDL 1,'.1\, OUT --.---.-.--- .~ .S'~.O. ':'7 I tAI'I[JL I !\llj A~"r. ~~ur; 'f -'L . S";.t.'.iRt...GE --.--'--.--- 1,':',;.1). ';.'~( /Bt/6;[';;' 01'10. ;;~CO \,/Y PLAlNTlFPS ' '.'".~BIT .J?f~7'(""c... ERMS: NET 1 0 DAYS ~$ ..,":.':;.0.":",' NOLO lOGISTICS THAt ~I': ~1~INAl INVOICE ASSEMBLY. DIsrRIBUTION WAREHOUSING "A " July 25, 1991 Mr. Michael Sorenson Heinz Pet Products One Riverfront Place Newport, KY 41071 Dear Michael: I was.pleased to hear of your favorable evaluation of our fac ili ties. In response to your request for our charges for the Skippy Treat packaging, we are proposing the rate of $.15 per carton. Our carton rate will include handling in and storage of palletized packaged products. Packaged products remaining in our faCility beyond one month would be charged at the rate of $2.70 per pallet per month. ADW would also like to provide the transportation services between Scranton, PA and our faCility in Mechanicsburs, PA. Our per trip truck load rate is $266.40. Again, we appreciate haVing the opportunity to serve your company and look forward hearing from you. .~~relY' C:.-P' Dougla B. Enck Vice- esident, ADW cC:/Herb Rubin Capitol Auto Systems PLAlNTIFF'8~;~ ElOG, ,.IIT',"'-"i," ,'1'-- ".::::",~.jt~t~ ...,. "'~""7 <.,..",,'#i - "'...;,1.. 4410 INDUSTRIAL PARK RD., CAMP HILL, PA 17011 . (7ln 731-4374 . H1OO.233.1111 . FAX (7l7) 7ll1-66B8 o o 1 2 3 FOR PL.>>.INTIFF 4 Herbert E. Rubin 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 TABLE OF CONTENTS WITNESS o DIRECT 3 2 CROSS 16 GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 0 1 2 3 4 5 6 7 8 9 10 11 12 13 C) 14 15 16 17 18 19 20 21 22 23 24 25 --.) HERBERT E. RUBIN, called as a witness, being sworn, testified as follows: DIRECT EXAMINATION BY MR. SCHNEIDER: Q Please state your name. A Herbert Eugene Rubin, R-u-b-i-n. Sir, where do you reside? My residence is 204 Harbour, H-a-r-b-o-u-r, Q A Ridge Lane in Downingtown, Pennsylvania 19335. And my office is at 50 South Welsh, W-e-l-s-h, Pool Road, No. 6 in Lionville. That's L-i-o-n-v-i-l-l-e, Pennsylvania 19353. MR. SCHNEIDER: Off the record. (Discussion held off the record.) BY MR. SCHNEIDER: Q Mr. Rubin, you are the plaintiff in this lawsuit? A Yes. Q When did you first reside and begin to do business in Chester County? A We moved August -- well, actually -- no. We moved in July of '96. Q Why did you move from Harrisburg to Chester County? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 3 f' , .'~ ,t. 1 2 3 4 5 6 7 8 9 10 11 12 13 ,..-...." -) 14 15 16 17 18 19 20 21 22 23 24 25 --..; 4 A We have married children that live right down the street from where we have a town house now, our new town house. That was the main reason we moved. Q Other than the fact that you are now working in Chester County, has the move impaired your ability to conduct business as you previous had conducted it? A No. Q With reference to the dispute or disputes set forth in the complaint that you filed in this action, where are your records and files pertaining to such disputes currently located? A In Lionville. Q And Lionville is in what county? A Chester. Q You heard Mr. Enck's testimony earlier that the contract relationship between you and his company was terminated, did you not hear that testimony? A Yes. Q A Do you agree with that characterization? No. Q Let me finish my questions before you answer because it makes it easier for the court reporter. What is your view, sir, of the relationship between you and Mr. Enck's company currently? A Currently, I feel that we still have the same GEIGER & LORIA REPORTING SERVICE .. 1-800-222-4577 0 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 v 5 relationship that we had previously. Q Let me ask you, sir, to quickly review what has previously been marked as Plaintiff's Exhibit 1 through 11. A Yes. Q What are those documents? A These are invoices from Herb Rubin to ADW Arnold Logistics for monthly commissions. Q You have heard Mr. Enck testify that he considered those invoices to be invalid, I believe was his word, correct? A Correct. Q You believe what was your belief as to the validity of those invoices? A I believe that they are valid invoices. Q Where did you expect Mr. Enck's company to remit the commissions due to you under those invoices? MR. LEWIS: I object to the characterization of those payments as being due. I think that is in dispute. But otherwise, you may answer, of course. A I would expect payments to be made to the Lionville address as shown on the invoices. BY MR. SCHNEIDER: Q Mr. Enck testified that you were expected, in his view, to spend a day or two a week in Camp Hill as part GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 0 1 2 3 4 5 6 7 8 9 10 11 12 C) 13 14 15 16 17 18 19 20 21 22 23 24 25 , '-" 6 of your arrangement with his company. In your view, would you be as capable of performing the contract from Chester County as you would have been from Harrisburg? A Yes. Q Could you explain? Well, my home to ADW's facility is an hour. I A could go in very easily and perform duties in their office. And also, I am constantly in the Dauphin County, Cumberland County area. In fact, I am in that area maybe once a week traveling from my home. Q You didn't move to Chester County, sir, did you, to bring a lawsuit against Arnold Industries that would be more difficult for them to defend, did you? A No. Q Will resolving your claims against Arnold Industries and Lebarnold, Incorporated, in Chester County be more convenient for you than would litigating those claims in Cumberland County? A Yes, it would be more convenient. Would it be more convenient for you, sir, to Q resolve your disputes with Arnold Industries and Lebarnold, Inc., in Chester County than it would be to litigate those disputes in Dauphin County? A It would be more convenient and less GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 0 1 2 3 4 5 6 7 8 9 10 11 12 ,"-. 13 .:...J ' 14 15 16 17 18 19 20 21 22 23 24 25 v 7 expensive. Q To what? A To litigate in Chester County. You do business as an individual, sir? I do business as an individual, yes. So you don't have any large corporate Q A Q infrastructure to support you while you are off in a distant forum litigating disputes? MR. LEWIS: I object. It's a leading question. MR. SCHNEIDER: Do you want me to rephrase it? MR. LEWIS: Yes, please. BY MR. SCHNEIDER: Q When you are out of the office for any reason, what kind of backup is there for you? A Now I have a backup sales assistant. And there is another salesperson in the office. But they don't tend to my accounts. Q So to restate the question, if you are called to Central Pennsylvania to litigate a matter, who, if anyone, is available in your office to support your clients and to provide backup services to your clients? A No one, really. All they are going to do is take messages. GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 0 1 2 3 4 5 6 7 8 9 10 11 12 0 13 14 15 16 17 18 19 20 21 22 23 24 25 v Q A Q 8 Is your business very competitive? All businesses are competitive. If your clients cannot reach you but can only leave messages, how will that affect your business? MR. LEWIS: For what length of time? A Well, if I don't return a call today for just 24 hours, it's really not going to affect anything. However, if it's more than a day or two, then my customer is going to call somebody else. What is the nature of your business, sir? Q A Q A putting them end of their Q We are brokers of packaging machinery. What does that involve? Facilitating the customer at a factory, together to sell or automate their packaging business. [~-I,,-l~,......+ dOL <;' 11.O~ ,..",( Co r'~<+] I take it there are -- you don't have a monopoly in that business, do you? A Q No. Can you estimate how many companies, individuals, or entities provide the same kinds of services as you do in the northeastern part of the United States? A Well, every manufacturer of machinery that we would represent has probably 10 competitors; so each one of those competitors have their own broker, okay? So if we represent 15 different companies, there could be 150 GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 fI\ 1 2 3 4 5 6 7 8 9 10 11 12 .-. 13 . ....J 14 15 16 17 18 19 20 21 22 23 24 25 v competitors out there. And each one of those people would have their own broker. Q When did you first have dealings with Arnold Industries, Incorporated, or any of its affiliated companies? A I probably would have to look at one of the exhibits, the H. J. Heinz exhibit. It would be about Q You are now referring to Plaintiff's Exhibit No. 18? A Right. The date of that letter is July 25th, okay, and I would say Q Of what year? I'm sorry, 1991. And probably, Heinz came in, A maybe, a month or two before that. Q Was Heinz the first company for whom you attempted to arrange contract packaging services by ADW? A Yes. It was because of Heinz Pet Food products that we went to ADW to see if they would do the work. It all started with Heinz. Q What information did ADW give you to take to your clients to inform your clients about who exactly ADW was? A ADW had a brochure of just their assembly distribution. And also, Arnold Industries had a statement; GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 9 ~ 1 2 3 4 5 6 7 8 9 10 11 12 13 ,--..., ,J 14 15 16 17 18 19 20 21 22 23 24 25 'J 10 so we had the authority to mail those statements and the brochure from ADW to any prospective customer. wl-1.+- Q -why- did you believe -- did you believe that ADW was a part of Arnold Industries? A Absolutely. Why did you believe that ADW was a part of Q Arnold Industries? A Everything just looked like it was intertwined. They gave me statements of Arnold Industries. And at one time, Ed Arnold himself came over to the facility to look at what we were doing. And I was introduced to him, Ed Arnold, right at the beginning of our operation. And I was always under the impression that Doug Enck got approval from Ed Arnold, the chairman of the board and CEO of Arnold Industries; so I was in his office many times when Ed Arnold would call on his private line and talk to him. Sometimes I excused myself. Sometimes Doug excused himself. Sometimes I stayed there. Q Did Mr. Enck or anyone else affiliated with Arnold Industries, Incorporated, in any way ever tell you that ADW or Arnold Logistics was not part of Arnold Industries? A No, nobody ever told me. They were not part of Arnold Industries. I always assumed it. GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 '" 1 2 3 4 5 6 7 8 9 10 11 12 -~, 13 ~ 14 15 16 17 18 19 20 21 22 23 24 25 v 11 Q Let me show you what has been marked as Plaintiff's Exhibit 16 and 17 being letters from you dated September 7, 1993 and March 3, 1993. A Yes. Q Do you recognize those letters? Yes. A Q Did you, in fact, mail those letters to Starkist Foods and Heinz Pet Products on or about the respective dates? A Yes. Just for clarification, Starkist Foods and Heinz is the same company. Q Okay. Thank you. Both letters, Plaintiff's Exhibit 16 and 17 show copies being sent to Doug Enck. Did you, in fact, sir, send copies to Doug Enck? A Probably faxed him copies. Whether you mailed them or faxed them? Yes, we sent them. Q A Q Did Mr. Enck, in response to either of those letters, call you or otherwise inform you that you were mischaracterizing the legal entity ADW? A I don't recall him ever doing that or we wouldn't have done it. Q That was going to be my next question. Irrespective of whether there was a communication from Mr. Enck in response to either Plaintiff's Exhibit 16 or GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ~ 1 2 3 4 5 6 7 8 9 10 11 12 r) 13 -, 14 15 16 17 18 19 20 21 22 23 24 25 v 12 Plaintiff's Exhibit 17, at any time during your relationship with Mr. Enck, did he inform you that ADW or Arnold Logistics were not divisions of Arnold Industries as you apparently believed? A No, he never told me that. Why was it important to you that ADW was a Q part of Arnold Industries? MR. LEWIS: Objection, leading. You are asking why it was important __ BY MR. SCHNEIDER: Q Was it important to you that ADW was a part of Arnold Industries? A It was absolutely important to me that they were part of Arnold Industries. Q And why is that, sir? And the reasons are; number one is, Arnold A Industries is a $350 million extremely strong financial company. And part of my deal with ADW, or whatever the legal entity is, was that as we brought in new customers, ADW would buy new machinery to substantiate that end of the business. And without a good solid financial backing, a company cannot afford to be buying equipment that's 65 to $70,000. And ADW, or whoever, was able to write checks, like just right out of their checking account. ~ GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ~ '. 1 2 3 4 5 6 7 8 9 10 11 12 13 /^) 14 - 15 16 17 18 19 20 21 22 23 24 25 '--" 13 Q Do you know what entity purchased the equipment needed to provide contract packaging services? A The checks always went to my manufacturer; so I don't know who wrote the checks. Q Fair enough. MR. SCHNEIDER: Can we go off the record? (Discussion held off the record.) BY MR. SCHNEIDER: Q Can you estimate, Mr. Rubin, approximately how many companies you brought to Mr. Enck's attention for purposes of their being provided contract packaging services by ADW or A~nold Logistics? A Initially, the entity, their entity only had IBI'1 one account for fulfillment, which was~. And when I came to Doug Enck, he told me that this was an area that they were especially interested in doing. And over a period of years, I brought to them, I would say, at least 10 accounts that business was consummated and at least another 10 to 15 accounts that while I was there, the business was not consummated; but maybe it's been consummated since. Then there's another group of clients that I was involved in. But they also stated that they had previously been involved with those companies; so they wouldn't give me credit for that. However, if they didn't GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ~ 1 2 3 4 5 6 7 8 9 10 11 12 13 :.) 14 15 16 17 18 19 20 21 22 23 24 25 ---.) 14 have the contract packaging business which I was the one that started, then they wouldn't have been able to have a relationship with those companies because nobody was there to put the project together. Q Mr. Enck testified to a modification of the parties' relationship. Can you explain, in your mind, what that modification involved and when it took place? A I think when it took place is shown in the complaint, approximately. As the time goes by, you can't remember all the dates. But initially, our agreement was that they would pay me 10 percent of the gross of the sale. And I would be paid on a monthly basis for anything that was billed the month before. Along with that, any equipment that was sold to them to do any contract packaging business, I was allowed to keep the commissions. Now, this billing was -- and commissions were up and down every month. And according to Mr. Enck, it was a bookkeeping nightmare. Q In any event, I don't really want to get that much into the substance of the dispute. I simply want to ask A Q adequate. A The date? You have referred to the complaint. That is In the complaint -- GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 "'" , 1 2 3 4 5 6 '7 8 9 10 11 12 13 ~-.,. , ) 14 '- 15 16 17 18 19 20 21 22 23 24 25 o 15 Q There is no question pending. Had the parties' financial relationship not been modified by you and Mr. Enck, would you have continued to be entitled to revenues from clients that you brought to his company? A Yes. Q And you would have been entitled to revenues from those clients on what basis or under what circumstances? A Under circumstances of our initial agreement, which was 10 percent of the gross sale. Q And what happened about those clients if they reordered in the future? A It was ongoing. Explain that, please. So as long as they were buying services from Q A ADW, I would get a 10-percent commission. Q So that had the original relationship between you and Mr. Enck remained intact, you would be entitled, to this date, to 10 percent of ongoing revenues from reorders by those customers; is that correct? A That's correct. MR. SCHNEIDER: I would like to go off the record for a second. (Discussion held off the record.) MR. SCHNEIDER: No further questions GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 '" 1 2 3 4 5 6 7 8 9 10 11 12 C) 13 14 15 16 17 18 19 20 21 22 23 24 25 "'-" 16 CROSS-EXAMINATION BY MR. LEWIS: Q Mr. Rubin, you don't disagree with M~. Enck's testimony that at some point, he advised you that the relationship was terminated from the company's standpoint, do you? A No. Q Whether or not you disagreed with that decision, there is no question it was communicated to you, is there? A No. It was communicated. Q And you would agree, would you not, there was never a written agreement that memorialized your relationship with the company? A That's correct. Q Did you ever deal with anybody other than Doug Enck on the principal terms of your relationship? A No. Q In fact, you never conferred with Ed Arnold about the terms of your business relationship, did you? A Not directly. Q You testified a little while ago that it was your impression that Doug Enck was getting approval for __ I don't want to mischaracterize what you said -- but approval GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ~ 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 '-..J 17 for a lot of things from Arnold. Do you have any knowledge that Mr. Enck needed or obtained Mr. Arnold's approval to terminate your relationship? I I I MR. SCHNEIDER: If you know. A I don't know. BY MR. LEWIS: Q You referred to items that you were authorized to send out to prospective customers as consisting of an ADW brochure and an Arnold Industries' statement. Could you be more specific as to what you mean by the Arnold Industries' statement? A Okay. I was wrong about the statement. It's an annual report. Q So in making a presentation to a prospective customer of ADW, you were authorized to provide them with an ADW brochure and an Arnold Industries' annual report and that's the extent of it; is that correct? A That's what I was permitted to show, yes, and also the facility. Q To show the prospective customer what the physical facility looked like? A Yes. Q You testified that you're constantly in the Dauphin County, Cumberland County area at least once a GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 0 'I 1 2 3 4 5 6 7 8 9 10 11 12 13 .0i 14 15 16 17 18 19 20 21 22 23 24 25 \...,.I 18 week. Is that in connection with your brokerage business? A Yes. Q And would you say that over the past year, for example, that you have been in Dauphin County at least once a week? A I would imagine it averages out. But I am not there exactly every week. Q I understand. And how about Cumberland County, would you say you have been there on an average A Well, Dauphin, Cumberland County is the same to me; so the area is averaging once a week. Q I don't mean to double count. I am not trying to be unfair. Since you moved to Chester County, have you maintained an office of any type in Harrisburg? A I have a post office box. Do you have a telephone number in Harrisburg? Harrisburg has a telephone number, same number Q A that we had that goes -.. it dead what they call dead plates into Bell Telephone. And it rings in my office in Lionville. Q If you are in Harrisburg on business, can you pick up that phone in Harrisburg? A No. There's no physical phone in Harrisburg. At your Lionville office, do you have voice Q mail ? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ~ 1 2 3 4 5 6 7 8 9 10 11 12 13 ~ 14 ~ 15 16 17 18 19 20 21 22 23 24 25 ~ 19 A Yes, I do. So if you are on the road, you can check your Q calls; is that correct? A Yes. Q And if you were in the Dauphin, Cumberland County area to attend a trial, for example, you would be capable of checking your voice mail; is that correct? A I could check my voice mail. But it wouldn't be appropriate to return phone calls. Q Why is that? A Prom a courthouse all I would be doing is getting lined up for pay phones. Q But you would agree it would not be impossible to return a call to a customer, prospective customer who tried to reach you during the course of a trial in Dauphin or Cumberland County? MR. SCHNEIDER: I will object to the question. I don't think impossibility is the legal standard we are operating under. But you can answer the question, Mr. Rubin. MR. LEWIS: I heard that in one of your questions earlier today. A I don't think it's impossible. BY MR. LEWIS: Q In your testimony, you referred to 10 accounts GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ~ 1 2 3 4 5 6 7 8 9 10 11 12 13 ^"-') \........... 14 15 16 17 18 19 20 21 22 23 24 25 ',,-,,' 20 that you brought to the company where business was actually consummated. Were any of those accounts located in Chester County? A Physically located in Chester County, I don't think any of them were. Q That is all I wanted to know. You referred to another 10 or 15 that you introduced to the company but for which business was not consummated while you were involved with ADW Arnold Logistics. Do you know whether any of those 10 or 15 prospects are located in Chester County, physically? A Yes. I think some of them are. Q will you tell me who those are? We contacted the mushroom people and the A mushroom -- I don't know exactly who. But we tried to talk to the mushroom people in Kennett Square. And I believe Kennett Square is in Chester County. Q When you say "we," who is "we"? A Me, I did. You are not suggesting Mr. Enck contacted the Q mushroom people, are you? A No. Q And that particular prospect was not something that was consummated prior to the time that Mr. Enck told you the relationship had ended; is that correct? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 r\ '.:! 1 2 3 4 5 6 7 8 9 10 11 12 () 13 14 15 16 17 18 19 20 21 22 23 24 25 >...../ 21 A No, we did not consummate any mushroom people. Can you think of any other Chester County Q customers you introduced to the company? A Not without checking my records. Just returning for a moment to what you Q referred to as the mushroom people -- and I understand that that part of the state was renowned for producing mushrooms -- was that a prospective account that you were trying to develop for ADW, is that your testimony; or is this a customer with whom you already had a relationship? A No. This would be a prospect for ADW. So in effect, you were soliciting them for Q ADW? A Yes. Q And that solicitation did not bear fruit, at least while you were still receiving money from ADW? A Yes, that's correct. Q And pardon me if I have already asked this question, but can you identify any others in Chester County or is that the extent of it? A No. I answered that by saying that I would have to check my records to see if I did any other solicitation. Q But as you testify today, you can't think of any others? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ~ 1 2 3 4 5 6 7 8 9 10 11 12 2) 13 14 15 16 17 18 19 20 21 22 23 24 25 v 23 be entitled to that 10 percent under your original engagement all the way through; is that right? A That's correct. Q Would your heirs also be entitled to collect that 10 percent? A 20,~50. wh.1- I~ +t.:~ ? MR. SCHNEIDER: Objection. It is argumentative. BY MR. LEWIS: Q You agree, don't you, that during the time that you were in an active relationship with ADW or Arnold Logistics until the relationship was terminated by Mr. Enck, you were not living in Chester County, were you? A His letter was what? What was the date of his letter? Q I don't want to confuse you. Do you recall when it was communicated to you that in the view of Mr. Enck, the relationship had ended? Was it mid-19961 A It was in that, I think, June, July '96 area. Okay, it was actually May. It was April, May '96. Q Do you recall how that news was communicated to you? 1>. Yes. I called Doug Enck a couple of times because he owed me some commissions. I think it was, like, two months past due. And then finally, he took my callr I GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ,...,. 1 2 3 4 5 6 7 8 9 10 11 12 C) 13 14 15 16 17 18 19 20 21 22 23 24 25 '-i 24 talked to his controller. I don't remember his name. I said, Hey, you are not sending me commissions. What's going on? He said, Well, I will have to talk to Doug. Have you sent us invoices? I said, Yes. Well, send it again. And then finally, Doug either called me or took one of the calls and said that our relationship is over and that you are not going to get any more commissions. Q Do you recall where you were when you had that conversation? A Well, I think I was in my Harrisburg office. Q By that time, you hadn't moved to Chester County, had you? A That's correct. Q Do you agree with Mr. Enck's testimony that after the terms were modified rightly or wrongly, that he expected you and told you that he wanted you to have more on-site presence in Camp Hill? A No. Q You don't agree with that? A No. Q He never said that to you? A Yes, but not at that time. Q When did he say that to you? A He had a person that sold all kinds of services for whatever this entity is. And he fired that GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 0 '::"",,(',' 1 2 3 4 5 6 7 8 9 10 11 12 0 13 14 15 16 17 18 19 20 21 22 23 24 25 ~ fellow, okay? Then I said to him, I said, You know, maybe I ought to slow down a little bit. And I will help you do some marketing. And he said, That's great, Okay? This was after we went to the $3,000. I was in the $3,000 for a couple months when this happened to fellow's name. and I forget the So we sat and talked. And he said, Well, okay, good. You can do the marketing. That way, I don't have to hire anybody. Come into the office. He says, how much time can you give me? And I said, Well, I probably can give you a day, a week. And I would come in. And he says, Okay. I will give you a spot. But the spot really was never developed. It was a spot in the office that I ended up actually making calls froln the cafeteria while people were eating; so it really wasn't a good atmosphere to be making the calls, even though I ~a~~ myself up. But as far as coming in, I held to our agreement but that had nothing to do -- that was just an extra that I was providing for him but that had nothing to do once we unilaterally changed the agreement. Q You do agree that there was a point in time when he expected you would have a greater presence at his GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 25 ~. .;.,.,\ 1 '2 3 4 5 6 7 8 9 10 11 12 :? 13 14 15 16 17 18 19 20 21 22 23 24 25 v 26 facility in Camp Hill? A I don't know about the word "expected." That is his word, okay? Q You agree that he requested that you have a greater presence in Camp Hill at some point in time? A That's not true. I am the one that said to him, I will help you out by slowing down a little bit and cutting down my traveling and helping you with the marketing. it. I am the one that went to him and suggested Q So it was your idea to spend more time in Camp Hill ? A Yes; that was absolutely my idea. It had nothing to do with the payment of $3,000. Q Do you recall when you were getting your commission checks, where they were coming from, what name appeared on those checks? A I thought initially, okay, without checking it and I didn't keep copies of the checks -- but I thought initially, the checks came from Arnold Industries. But I Ltlo know that some checks did come from -Deugo AArnold. And my W-2, the last year, came from geu~irnold. I' Q Other than correspondence or telephone calls regarding nonpayment of commissions you felt were due, did GEIGER & LORIA REPORTING SEIlVICE - 1-800-222-4577 ". ';"'''.>< 1 2 3 4 5 6 7 8 9 10 11 12 () 13 14 15 16 17 18 19 20 21 22 23 24 25 v 27 you have any conversations with the company from Chester County? Did you have any communications from Chester County? A Just the invoices that we have been sending. All right. Invoices, there is at least one Q letter we have seen today. And there may have been a phone call but that is the extent of it; is that correct? A Yes. Q And all of that transpired after Mr. Enck advised you that in his view, the relationship had ended, correct? A Yes. Q Did you ever introduce any customers directly to anybody from Penn Motor Express? A No. Q Did you ever introduce any customers directly to SilverEagle? A No. Q Did you ever introduce any customers directly to DW, sometimes known as Dalworth? A No. Q Did you ever introduce any customers to any part of Lebarnold other than ADW Arnold Logistics? MR. SCHNEIDER: Objection, because that is the issue we are now debating, what ADW was or wasn't part of. GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 0 "1\,., 1 2 3 4 5 6 7 8 9 10 11 12 /) 13 14 "--' 15 16 17 18 19 20 21 22 23 24 25 ,J But having registered that ohjection, you can answer the question, Herb, if you can. A As far as Lebarnold, they were the recipients of some of the business that I brought in. Also, New Penn was the reciprocate of some of the business that I brought in because ADW would ship on New Penn's trucks to Sam's up in Scranton; or Lebarnold would take a full truckload to Sam's up in -- I think it's Scranton. So those two entities were reciprocates of business that I brought in. BY MR. LEWIS: Q Sam'~ was not the customer of ADW, was it? A No. Q In effect, Sam's was the customer of ADW's customer; is that right? A Sam's, yes. Q They might receive soft drinks or cat food or something of that nature, correct? A Yes. Q You said that ADW used New Penn's trucks to ship product; is that your testimony? A I am saying that New Penn would pick up some of this product and ship it. It would be shipped on their trucks if it was an LTL shipment going to Sam's. Q Did you see it put on their trucks? GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 28 "" 1 2 3 4 5 6 7 8 9 10 11 12 ,..., 13 i....J 14 15 16 17 18 19 20 21 22 23 24 25 J 29 A I know that the weighf Pack machine was brought in by New Penn's truck. Q And who made the arrangements for it to be delivered on a New Penn truck? A ADW. Q You are sure of that? A Positive. Q Not Weight Pack? Positive. ADW made it. A Q Can you recall any other equipment that was delivered to ADW on a New Penn truck? A Packaging machinery, no. Q Other than the pickup of merchandise from ADW by New Penn to be delivered to Sam's in Scranton and the example of the weigh, Pack delivery, can you think of any other examples of New Penn's trucks being used in connection with ADW's business? A Directly, no. But New Penn's trucks were at ADW all the time. And Lebarnold picked up full truckloads of product from American Home Foods and also Heinz and Kraft, I think. But definitely, it picked up full truckloads from American Home Foods and Heinz. Q At the time that the financial terms were revised to a flat 3,000 a month commission, you were still GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 0 ~.:,'. 1 2 3 4 5 6 7 8 9 10 11 12 0 13 14 15 16 17 18 19 20 21 22 23 24 25 :.J 30 in Harrisburg, correct? A Yes. Q And do you remember where you had the communications with Mr. Enck about that change in the relationship? Was that a face to face? A It was in his office. Q In Camp Hill? A In Camp Hill. Q Did you ever deal directly with anyone at Arnold Industries in Lebanon regarding your business relationship with ADW? A No. Q There had been a suggestion today -- and I can't recall whether it is in your. own testimony or comments of counsel -- that there was some confusion on your part as to ADW Arnold Logistics as far as the names are concerned. Was there ever any confusion on your part as to the people that you were to deal with in connection with your business relationship? A I don't have any confusion. I thought everything was the same; so there's no confusion there. Q In fact, you were consistently dealing with Doug Enck; is that right? A I was consistently dealing with Doug Enck and also Arnold Industries. GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 ~ 1 2 3 4 5 6 7 8 9 10 11 12 13 0 14 15 16 17 18 19 20 21 22 23 24 25 J 31 Q A Industries. Q Aside from your belief that he was an arm of Arnold Industries, you were not dealing with Arnold Industries? In other words, you had no contacts with Arnold Industries other than Doug Enck? A The only contact I had was with Ed Arnold when he visited the facility. And they asked me to be at that facility and he came over. Q But, if you will, your day-to-day communications with the company, whatever its name, were through Doug Enck, correct? A Yes; not all. I mean, he was the top man. Q Yes. I understand. A But I had other dealings with people there. Q People that worked under him? A Yeah. Q And there was never any confusion on your part that Enck was the one that you were to deal with? MR. SCHNEIDER: I am going to object only because I think we are covering the same subject several times now. When you say, "Also Arnold Industries __ I felt that Doug Enck was an arm of Arnold MR. LEWIS: Probably. I am getting tired. All right. You don't have to answer that question. I think GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 a 1 2 3 4 5 6 7 8 9 10 11 12 13 ,"'-) 14 .......' 15 16 17 18 19 20 21 22 23 24 25 -oJ STATE OF PENNSYLVANIA ss. COUNTY OF LANCASTER I, Lisa M. Loop, a Reporter Notary-Public, authorized to administer oaths within and for the Commonwealth of Pennsylvania and take depositions in the trial of causes, do hereby certify that the foregoing is the testimony of HERBERT E. RUBIN. I further certify that before the taking of said deposition, the witness was duly sworn; that the questions and answers were taken down stenographically by the said reporter Lisa M. Loop, a Reporter Notary-public, approved and agreed to, and afterwards reduced to typewriting under the direction of the said Reporter. I further certify that the proceedings and evidence contained fully and accurately in the notes by me on the within deposition, and that this copy is a correct transcript of the same. In testimony whereof, I have hereunto subscribed my hand this 11th day of November 1997. ~~U- }Y7. y~ CZ';~ Lisa M. Loop, Reporter My commission expires: October 27, 1997 GEIGER & LORIA REPORTING SERVICE - 1-800-222-4577 33 fIIlJ ....) \'~..." -I. H/.4/1~~1 OS:45 71754115BS GEIGER LrRIA PAGE B2 READING AND~SIGNING OF DEPOSITION To be aItached to !he deposition of taken on Oct. 29, 1997 Herbert E. RUbin by I'epOrteI Lisa M. Loop in the matter of Rubin VB Arnold InduBt~i~s PAGE UNE CHANGE QFI COAAECllON ;.> I." I~-kml.nt MlJ not .sound. CORR.tc+ D ~ I WhA..+ citeL 1./0'11. ~,w!. ? 13 Itf ShtJl\.l cl bt. IBtYI d3 L. ;)0, S () LtIIYL+ /'s --fhj s 7 ci3 'd6 !-k. -roOK 1'>\'-1 c. 0...// 7 .;IS" J'l hu, -+r.Of,.{,erh I. btl'-J<tr-l ~~I.p 1M) ? ';/11 ~.;l, LebaRnOlcl Y10r DoI.L,<l~old alP 01.3 Le baR.hD lei nOr DOi-<dM.no I d J.~ :!. We-hI, PacK ho+- Wej'lh+ Pa.cl<. J.~ g Wt-iBl> Pa:'/!.. nor Wt(fj}, t P4c.K c?'1 15 Wt.'tqh fil,/(. hO+- Wt0!.t. fa (./t... , , . , , A /1 1/ I have b ~ and I1NId I1Tt deposl!lon as captioned 1b0Yef; have listed all changes and COITIdione abcM, along v.1lh ~thlnfor8. . ~ . Dato: I I ~ q1 S1gnalll'eA IV " KEEFER WOOD ALLEN & RAHAL. LLP 111DWALNUTe".11IT P.O..OX "OU HAAAI..U"o, PA 171c>>.,... .. " ./,." ....,'.:.P:., ...."..., :'~"'\'. i.t':", " ." ,ofI "'::(1;'\0 ARNOLD INDUSTRIES, INC. and LEBARNOLD, INC., Civil Action at Law ." rtJl.looiolo I~ .. " HERBERT E. RUBIN, :IN THE COURT OF COMMON PLEAS :CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, vs. No. 99.02532 Defendants. NOTICE TO PLEAD TO THE WITHi?,f NAMED PLAINTIFF: You are hereby notified to file a written response to the enclosed answer with new matter and counterclaims of defendants Arnold Industries, Inc. and LebArnold, Inc. within twenty (20) days from service hereof or a judgment may be entered against you. KEEFER WOOD ALLEN & RAHAL, LLP By~9~.P7 .' Donald _ is III . i .~ ,~ & HERBERT E. RUBIN, :IN THE COURT OF COMMON PLEAS :CUMBERLAND COUNTY, PENNSYLVANIA '~ Plaintiff, l vs. No. 99-02532 ARNOLD INDUSTRIES, INC. and LEBARNOLD, INC., Civil Action at Law Defendants. ANSWER TO COMPLAINT WITH NEW MATTER AND COIJNTRRCLAIMS Defendants Arnold Industries, Inc. and LebArnold, Inc., through their counsel, Keefer Wood Allen & Rahal, LLP, submit the within answer with new malter and counterclaims in response to plaintiffs complaint, averring as follows: I. Admitted in part and denied in part. It is admilted that plaintiff Herbert Rubin is an individual. After reasonable investigation, defendant lacks sufficient knowledge or infonnation to fonn a be\iefas to the truth of the remaining avennents of this paragraph, which are, therefore, denied. 2. Admitted. 3. Admitted, with clarification. Due to a subsequent merger, LebArnold, Inc. is now part of a corporation known as Arnold Transportation Services, Inc. 4. Admitted in part and denied in part. It is admilted tbat at all times relevant to plaintiff's complaint, LebArnold, Inc. was a wholly-owned subsidiary of Arnold Industries, Inc. The avennent that LebAmold, Inc. was "controlled" by Arnold Industries, Inc. constitutes an crroneous conclusion of law and fact to which no response is required. . 5. Admitted in part and denied in part. It is admitted llIll)! that the Arnold Logistics division of LebArnold, Inc., which division was formerly known as "ADW" (hereinafter "Arnold Logistics/ADW") did business with plaintiff. The remaining avennents of this paragraph are denied. By way of further answer, defendants deny that Arnold Logistics/ ADW was a division of Arnold Industries, Inc., and further deny that plaintiff ever conducted any business with Arnold Industries, Inc., except to the extent that he dealt with a division of its subsidiary, LebArnold, Inc. 6. Denied. As the Court of Common Pleas of Chester County detennined in its order dated March 17,1999, venue was not proper in Chester County. Venue is proper in the Cumberland County Court of Common Pleas. C.OUNT I 7. Admitted, with qualif:c~tion. The avennents of this paragraph are admitted as of the time period relevant to plaintiffs complaint. Defendants are unaware ofplaintifrs current status. 8. Admitted, on infonnation and belief. 9. Denied. The avennent that plaintiff"cannot legally bind either the vendor or the purchaser by his words or acts" constitutes a conclusion of law to which no response is required. After reasonable investigation, defendant lacks sufficient knowledge or infonnation to fonn a belief as to the truth of the remaining avennents of this paragraph, which are, therefore, denied. -2- . . .10. Denied. After reasonable investigation, defendant lacks sufficient knowledge or infonnation to fonn a belief as to the truth of the avennents of this paragraph, which are, therefore, denied. 11. Denied as stated. During the pertinent time period in question, defendant LebArnold, Inc. was a long-distance, full-truckload freight carrier. Arnold Logistics/ADW, a division ofLebArnold, Inc. was primarily engaged in the business of assembly, distribution and warehousing, and related transportation. Defendant Arnold Industries, Inc. was a diversified transportation and logistics holding company. 12. Admitted in part and denied in part. The avemlents of this paragraph are admitted ~ as to Arnold Logistics/ADW, and with the qualifications that the prospective customers for such contract packaging services would not necessarily be limited to customers introduced by plaintiff, and that such services would be provided only if mutually acceptable financial and contractual terms were obtained. By way of further answer, plaintiff initiated the business relationship with Arnold Logisticsl ADW, and any avemlent to the contrary is denied. The avennents of this paragraph are otherwise denied in that plaintiff had no business relationship with Arnold Industries, Inc. or LebArnold, Inc., other than as expressly admitted in this paragraph. 13. Admitted in part and denied in part. It is admitted that an oral agreement was reached between plainti ff and Arnold Logistics/ADW, whereby plaintiff would be engaged to provide selVices as an automation consultant in return for payment of a monthly commission equal to ten per cent (10%) of contract packaging revenues received, in a given month, from .3.. " contract packaging customers first introduced by plaintiff to Arnold Logistics/ADW, and payable to plaintiff for so long as the consulting relationship continued. The remaining averments of this paragraph are denied. By way of further answer, it is denied that plaintiff had any business relationship with Arnold Industries, Inc. or LebArnold, Inc., except as expressly admitted in the foregoing answer to paragraph 12. It is further denied that accounts introduced by plaintiff to Arnold Logistics/ADW were deemed by the parties to be "Rubin's protected customers," or that plaintiff retained any rights or interests with respect to such customers. By way offurther answer, defendants aver that it was expressly understood and agreed between the parties at the inception of the relationship that since this was to be a new line of business for the company, the terms of the relationship must be subject to modification. 14. Denied, for the reasons set forth in defendants' answer to the foregoing paragraph 13. By way of further answer, the characterization of plaintiffs relationship with Arnold Logistics/ADW as that ofa "broker" constitutes an erroneous conclusion offact and law with which defendants disagree. 15. Admitted in part and denied in part. It is admitted that plaintiff introduced customers for contract packaging services to Arnold Logistics/ADW in accordance with the parties' oral agreement. The averments of this paragraph are otherwise denied. 16. Admitted in part and denied in part. It is admitted that plaintiff was paid monthly commissions calculated a~ a percentage of revenues received by the company, from approximately June 1992 until January 1994. The avennents of this paragraph are otherwise denied. -4- 17. Admitted in part and denied in part. It is admittcd that plaintiff's monthly compensation was changed from a fluctuating percentage commission to a flat fee of$3,OOO per month during 1994. The avennents of this paragraph are otherwise denied. By way of further answer, defendants state that plaintiffs compensation was changed to a flat monthly fee of $3,000 per month by mutual agreement in January 1994, for reasons that did not include ease of administration. 18. Denied. The avennent that defendants made implied representations and warranties constitutes an erroneous legal conclusion with which defendants disagree. Defendants deny any express representations or warranties that plaintiffs consulting agreement would not be subjeet to any further change or modification. After reasonable investigation, defendants lack sufficient knowledge or infonnation to fonn a belief as to the truth of the avennents regarding plaintiff's alleged reliance, and those avennents are, therefore, denied. 19. Admitted in part and denied in part. Defendants admit ~ that after the parties agreed to modification of the tenns of plaintiff's compensation and services, plaintiffprovided consulting services to Arnold Logistics/ADW regarding its contract packaging business and related automation needs, and that some of its customers had been introduced to the company by plaintiff. The avennents of this paragraph are otherwise denied. By way of further answer, the characterization of plaintiff's relationship with Arnold Logistics/ADW as that ofa "broker" constitutes an erroneous conclusion of fact and law with which defendants disagree. 20. Admitted in part and denied in part. It is admitted ~ that plaintiffs flat monthly $3,000 fee arrangement continued from approximately February 1994 until -5.. approximately March 1996, and that the business relationship was thereafier unilaterally tenninated by Amold Logisties/ADW. The avennents of this paragraph arc otherwise denied. 21. Denied as stated, Despite repeated demands from plaintiff, Arnold Logisticsl ADW has refused to pay plaintiff any further compensation because it properly and justifiably tenninated plaintiffs consulting relationship. 22. Denied as stated. Arnold Logistics/ADW has refused to pay plaintiff, and has advised that it will continue to refuse to pay plaintiff, any further compensation because plaintiffs consulting relationship was properly and justifiably tenninated. By way of further answer, it is denied that defendants ever infonned plaintiff of any intention to breach his agreement and it is further denied that the agreement has been breached by Arnold LogisticslADW, or any of the defendants, in any manner whatsoever. 23. Denied. Arnold Logistics/ADW has refused to pay plaintiff any further compensation because it properly and justifiably tenninated plaintiffs consulting relationship. By way of further answer, it is denied that plaintiff"facilitated" the contract packaging line of business of Arnold Logisticsl ADW beyond his introduction of certain customers, for which plaintiff was amply compensated. 24. Denied. Arnold Logistics/ADW properly and justifiably tenninated plaintiffs consulting relationship. WHEREFORE, defendants respectfully request that this Honorable Court dismiss plaintiffs complaint with prejudice and enter judgment in their favor, together with costs and sllch other and further rclief as the Court deems fair and just. -6. COUNT JI 25. Defendants incorporate by reference the foregoing paragraphs I through 24 of this answer with new matter and counterclaims as if fully set forth at this place. 26. Denied. The averments of this paragraph constitute erroneous conclusions of fact and law with which defendants disagree. To the extent a response is deemed required, defendants deny that plaintiffs agreement to the revised terms of compensation was induced through defendants' knowing misrepresentations or intentional omissions, or as a result ofthe purported assurances alleged in this paragraph ofthe complaint. 27. Denied. The averments of this paragraph constitute erroneous conclusions offact and law to which no response is required. To the extent a response is deemed required, the averments are denied. WHEREFORE, defendants respectfully request that this Honorable Court dismiss plaintiffs complaint with prejudice and enter judgment in defendants' favor, together with costs and such other and further relief as the Court deems fair and just. CO lJNT III 28. Defendants incorporate by reference the foregoing paragraphs I through 27 of this answer with new matter and counterclaims as if fully set forth at this place. 29. Denied. Apart from the initial introduction of certain customers for contract packaging services, plaintiff did not substantially contribute to any financial success achieved by Arnold Logistics/ADW. By way of further answer, it is averred that plaintiff received ample -7- compensation and other remuneration (including, but not limited to, the receipt of sales commissions as a result of the purchase of equipment through plaintiff) for his efforts. 30. Denied as stated. The contract packaging business of Arnold Logisticsl ADW grew 100% in 1995 over prior year levels, but revenues attributable to customers originally introduced by plaintiff declined in 1995 over prior year levels. 31. Denied. It is denied that, absent plaintiffs efforts, major food companies and other "major" businesses would not have dealt with Arnold Logistics/ADW for their contract packaging needs. By way of further answer, defendants aver that major food companies developed productive customer relationships with Arnold Logistics/ADW without regard to plaintiffs introduction or other efforts on his part. 32. Denied. The avennents of this paragraph constitute erroneous conclusions of fact and law to which no response is required. To the extent a response is deemed required, the avennents are denied. WHEREFORE, defendants respectfully request that this Honorable Court dismiss plaintiffs complaint with prejudice and enter judgment in defendants' favor, together with costs and such other and further relief as the Court deems fair and just. C.OIJNT IV 33. Defendants ineorporate by reference the foregoing paragraphs 1 through 32 of this answer with new matter and counterclaims as if fully set forth at this place. 34. Denied. Defendants deny requesting the change in compensation structure to ease administrative burdens, deny the falsity of any statement that further changes in compensation -8- would be based upon the parties' mutual agreement, and further deny making any false statements to induce plaintiff to agree to the modification of the tenns of his compensation. 35. Denied. Defendants deny the existence of the purported plan or scheme alleged in this paragraph of the complaint, and further deny withholding any material infonnation to induce plaintiff to agree to the modification of the terms of his compensation. 36. Denied. It is denied that any false statements were made intentionally or with reckless disregard for their truth or falsity. 37. Denied, The avennents of this paragraph constitute erroneous conclusions of fact and Jaw to which no response is required. To the extent a response is deemed required, it is denied that any false statements were made with the intent to induce plaintiff's reliance upon them to his detriment, or that plaintiff reasonably relied upon such allegedly material and false statements. 38. Denied. The avennents of this paragraph constitute erroneous conclusions of fact and law to which no response is required. To the extent a response is deemed required, the avennents are denied. 39. Denied. Aller reasonable investigation, defendants lack sufficient knowledge or infonnation to fonn a belief as to the truth of plaintiff's avennents regarding his purported "discover(y J (of] the truth regarding (defendants 'J conduct toward him," which avennents are, therefore, denied. It is denied that defendants committed any breach or other wrongful conduct, and it is further denied that plaintiff suffered any damages as a result of any such alleged breach or wrongful conduct. -9- WHEREFORE, defendants respectfully request that this Honorable Court dismiss plaintiffs complaint with prejudice and cnter judgment in defendants' favor, together with costs and such other and further relief as the Court deems fair and just. NEW MATTER 40. Defendants incorporate by reference the foregoing paragraphs I through 39 of this answer with new mailer and counterclaims as if fully set forth at this place. 41. Plaintiffs complaint fails to state any cause of action against any of the defendants. 42. Plaintiff is unable to state any claim against defendant Arnold Industries, Inc. because plaintiffs only relationship with any entity affiliated with Amold Industries, Inc. was as a sales and automation consultant for the Arnold Logistics/ADW division of LebArnold, Inc., an independent subsidiary that maintained its corporate separateness from the parent corporation, Arnold Industries, Inc., at all relevant times. 43. In or about June or July of 199 I, an oral agreement was reached between plaintiff and Arnold LogisticslADW, whereby plaintiff was engaged as an automation consultant in return for payment ofa monthly commission equal to ten per cent (10%) of contract packaging revenues received, in a given month, from customers introduced by plaintifTto Arnold Logistics/ADW, for so long as plaintifTccntinued to provide services as a consultant. 44. Plaintiffrelained no rights or interests with respect to any customers introduced by him to Arnold Logistics/ADW. -10. 45. It was expressly understood and agreed betwecn plaintiff and Arnold Logistics/ADW at the inception ofthc parties' rclationship that since this was to be a ncw Iinc of business for the company, the tenns of the rclationship must be subject to modification. 46. Plaintiff was paid monthly commissions, calculated as a pcrcentage of revenues received for contract packaging services, from approximately June 1992 until early February 1994, during which period the amount ofplaintiffs monthly commission was often less than $1,000 pcr month and rarely exceeded $3,000 per month. 47. Prior to plaintiff's engagement as a consultant for Arnold Logistics/ADW, and continuing during the parties' relationship, plaintiff also worked as a sales representative for various manufacturers of automated packaging equipment, for which services he earned commissions through the manufacturer. 48. In his distinct role as a manufacturers' sales representative, plaintiff secured orders from Arnold Logisticsl ADW for the purchase of automated packaging equipment to service customers introduced by him, thereby generating the payment of sales commissions by the manufacturers that provided plaintiff with an additional source of remuneration fOl'the iniroduction of customers. 49. During 1993, plaintiff received commission payments from Arnold LogisticslADW every month but failed to introduce any significant new contract packaging business during that pcriod. 50. During 1993, plaintiff assisted Arnold Logistics/ADW in obtaining a small amount of contract packaging business from Heinz Pet Products, but his efforts did not produce a -11- lasting customer relationship; Heinz Pet Products was ultimately obtained as a regular customer through contacts and efforts by Arnold Logistics/ADW that were independent of plaintiffs contacts and efforts. 51. By mutual agreement in January 1994, the tenus of plaintiffs compensation for services as a consultant for Arnold Logistics/ADW were changed to a flat monthly fee of$3,OOO per month. 52. As plaintiff was advised, the principal reasons for the change in the terms of his compensation for services as consultant were as follows: a. Plaintiff had failed to introduce any significant new contract packaging business to the company within the preceding twelve (12) months; and b. Due to the competitive environment for contract packaging services and resultant low profit margin, the continued imposition of a ten per cent (10%) commission structure would preclude Arnold Logistics/ADW from making competitive bids for new accounts. 53. The replacement of plaintiffs ten per cent (10%) commission with a flat $3,000 monthly fee for consulting services had the effect of increasing plaintiffs monthly compensation from Arnold Logistics/ADW, as compared to his average monthly commission payment over the months preceding the change. 54. Insofar as his compensation was effectively being increased, plaintiff was given added responsibilities as a sales and automation consultant, including the following: a. Increased focus on sales efforts for Arnold Logistics/ADW; -12- b. Commitment to be present in the company's Camp Hill headquarters office at least once per week; and c. A greater role in identifying equipment manufacturers and automation opportunities for Arnold Logistics/ADW and making objective, unbiased recommendations for purchase of equipment without regard to sales commissions plaintiff might receive in his distinct role as manufacturers' sales representative. 55. In or about April 1996, plaintiff was advised that his consultant relationship with Arnold Logisticsl ADW was being terminated and that no further fees would be paid after payment ofthe fee for March 1995. 56. The termination of plaintiffs services was thereafter confirmed in a letter from Arnold Logisticsl ADW dated May 21, 1996, a true and correct copy of which is attached hereto as exhibit "A." 57. Plaintiffs relationship as a sales and automation consultant for Arnold Logistics/ADW was terminable at will. 58. Arnold Logistics/ADW properly terminated plaintiffs consulting relationship for good cause. 59. Plaintiffs consulting relationship was terminated due to a breach of his duties, bad faith and gross dishonesty in connection with the purchase by Arnold Logisticsl ADW of certain Weighpack automation equipment pursuant to plaintiffs recommendations and advice. 60. As a proximate result of plaintiffs breach of his duties, bad faith and gross dishonesty in connection with the purchase of certain Weighpack automation equipment based .13. upon his recommendations and advice, Arnold Logistics/ADW incurred damages, including, but not limited to, increased overhead and expenses incurred due to failure of the Weighpack equipment,loss ofrevcnues resulting from the loss of the customer's account, and damage to its reputation and goodwill. 61. All obligations on the part of any of the defendants towards plaintiff have been fully and duly perfonned, and no further commissions, fees, or other compensation is due or owing to plaintiff. 62. Plaintiff has failed to mitigate his damages, if any. 63. Plaintiffs claim for rescission is barred in consequence of his failure to make any offer to restore the benefits received by him under the modified agreement. 64. In the event plaintiff prevails on his cause of action for rescission and/or refonnation of the modified consulting agreement, defendant is entitled to set off, against any recovery of percentage commissions allegedly payable to plaintiff, the total anlount of compensation received by plaintiff at the rate of $3,000 per month. 65. Plaintiffs claims for rescission, refonnation, unjust enrichment and other claims for equitable relief are barred due to plaintiffs unclean hands in and about the matters alleged in the complaint. 66. To the extent plaintiffs causes of action are premised upon alleged fraud by defendants in connection with the modification of the tenns ofplaintifI's consulting relationship, which modification occurred in January 1994, all such causes of action are time.ban"Cd pursuant to 42 Pa. C. S. ~ 5524(7). 67. Plaintiffs equitable claims are barred by the doctrine oflaches. WHEREFORE, defendants respcctfully request that this Honorable Court dismiss plaintiffs complaint with prejudice and enter judgment in defendants' favor, together with costs and such other and further relief as the Court deems fair and just. COlTNTERCI ,AIM I (Damages for Breach of Contract) 68. Defendants incorporate by reference the foregoing paragraphs I through 67 of this answer with new matter and counterclaims as if fully set forth at this place. 69, This counterclaim for damages is asserted by Arnold Transportation Services, Inc., successor to defendant LebArnold, Inc., against plaintiff Herbert E. Rubin ("Rubin"). 70. Pursuant to his agreement to provide automation consulting services to Arnold Logistics/ADW, Rubin was obligated to provide objective, unbiased recommendations for purchase of automated packaging equipment without regard to sales commissions Rubin might receive as a manufacturers' sales representative. 71. In or about May 1995, Arnold Logistics/ADW directed Rubin to investigate and recommend manufacturers who could provide cost effective, quality automation for a mixed loose polyethylene bag project needed to fulfill a particular customer's specific requirements. 72. After purportedly conducting the necessary rcsearch and evaluation, Rubin recommended that Arnold LogisticslADW purchase a model AEF-I machine from Weighpack Systems, Inc. ("Weighpack") of Montreal, Quebec, Canada. -15- 73. Based upon Rubin's purported research, evaluation, recommendations and advice, a purchase order was issued by Arnold Logistics/ ADW for thc AEF-I machine. 74. In accordance with its agreement for sale of the AEF-l machine, Weighpack provided Arnold Logistics/ADW with the opportunity to observe a test run of the machine at the factory prior to shipment and prior to payment of the next instal/ment towards purchase of the machine. 75. Purporting to act on behalf of Arnold Logistics/ADW and pursuant to the terms of his consulting agreement, Rubin traveled to the Weighpack factory in Quebec to observe the test operation of the AEF-l machine. 76. Unbeknownst to anyone else at Arnold Logistics/ADW, the AEF-I machine failed to meet specifications during the test operation that Rubin observed at the factory, but Rubin instructed Weighpack to ship the machine anyway. 77. Rubin thereafter falsely reported to Arnold Logistics/ADW that the AEF-I machine did function to specifications, and in reliance upon this false representation, Arnold Logislics/ADW made the next installment payment so that the machine would be shipped. 78. However, when the AEF-I machine was installed, it did not run at required speeds and otherwise failed to meet the specifications required for Arnold Logistics/ADW to properly service its customcr's packaging needs. 79. On information and bclicf, defcndants aver that Rubin madc his falsc represcntations to Arnold Logistics/ADW, and othcrwisc took stcps to cnsure that the salc ofthc -16- AEF-I machine would be consummated, in order that he would receive sales commissions from Weighpack. 80. Rubin did receive sales commissions from Weighpack, in a total amount exceeding $5,000.00, for the sale of the AEF-I machine to Arnold Logistics/ADW, but thereafter falsely represented to Arnold Logistics/ADW that he had lost money on the transaction because Weighpack had refused to pay his commission. 81. When confronted regarding the failure of the AEF -I machine, Rubin also falsely represented to Arnold Logistics/ADW that the machine was defective, even though he knew from his personal observation of the pre-shipment test run that it was simply not designed to meet the demands of the particular customer application for which Arnold Logisticsl ADW had requested his equipment recommendations in the first place. 82. By reason of the foregoing, Rubin breached his consulting agreement with Arnold Logistics/ADW. 83. As a proximate result of Rubin's breach of his consulting agreement in connection with the purchase of the Weighpack AEF-I machine based upon his recommendations and advice, Arnold Logistics/ADW incurred danlages, including, but not limited to, increased overhead and expenses incurred due to failure of the Weighpack equipment, loss of revenues resulting from the loss of the customer's account, and damage to its reputation and goodwill, in an amount exceeding the sum of $200,000, which should be awarded to Arnold Transportation Services, Inc., successor to LebArnold, Inc. 84. All obligations on the part of any of the defendants towards Rubin have been fully and duly perfonned. -17- WHEREFORE, Arnold Transportation Scrvices, Inc., successor to defcndant LcbArnold, Inc., respectfully requeStS that this Honorable Court enter an award of damages in its favor and against Herbert E. Rubin in an amount according to proof at trial, and award costs and such other and further relief as the Court dcems fair and just. (;OIJNTRR(;LAJM II (Equitable Setofl) 85. Defendants incorporate by reference the foregoing paragraphs I through 84 of this answer with new matter and counterclaims as if fully set forth at this place. 86. Between February 1994 and March 1996, plaintiff received compensation under the modified consulting agreement in the total amount of $72,000. 87. In the event plaintiff prevails on his cause of action for rescission and/or refonnation of the modified consulting agreement, defendant is entitled to set off, against any recovery of percentage commissions allegedly payable to plaintiff, the total amount of compcnsation received by plaintiff at the rate of$3,000 per month. WHEREFORE, defendants respectfully request that this Honorable Court set oft~ against any recovery of percentage commissions allegedly payable to plaintiff, the total amount of -18- '. receive ongoing commissions on orders placed by his customers with defendants only lasted as long as he continued to provide services to defendants as a 'consultant." 44. Denied. To the contrary, under the terms of the parties' understanding, plaintiff retained the right to ongoing commissions on orders placed by the customers introduced by him to the defendants for so long as those customers continued to place orders with defendants. 45. It is admilled that the parties' relationship was subject to modification; however, it is expressly denied that such modification could be unilaterally imposed by defendants or implemented through miSleading statements or omissions. To the contrary, the parties agreed that any modification of their relationship would have to be mutually agreed to. 46. It is ad milled only that defendants paid plaintiff fluctuating commissions each month until some time in 1994 when plaintiff's commission was converted to a fixed monthly amount. After reasonable investigation, plaintiff is without knowledge or information sufficient to form a belief as to the truth of the remaining averments of this paragraph and therefore denies them and demands strict proof at trial. if material. 47. It is admilled only that plaintiff acts and has acted as a broker of packaging maChinery. as further described in paragraphs 7 through 9 of his complaint. The remaining sverments of this paragraph are denied. including that plaintiff was engaged" by defendants to serve as a consultant. 48. It is admilled only that, while acting in the capacity described in paragraphs 7 through 9 of his complaint, plaintiff brokered the sale of certain machinery between defendants and the machinery manufacturer(s). The remaining averments-of this paragraph are denied. 2 49. After reasonable investigation, plaintiff is without knowledge or information sufficient to form a belief as to the truth of the averments of this paragraph and therefore denies them and demands strict proof at trial, if material. 50. Denied. To the contrary, defendants' relationship with Heinz Pet Products was the direct resu~ of contacts and introductions made by plaintiff and efforts expended by plaintiff on behalf of defendants. for which contacts. introductions and efforts defendants l- I l. wrongfully tailed to pay plaintiff the commissions to which he was ent~led. 51. It is admitted only that some time in 1994 plaintiffs commission was converted to I' r a fixed monthly amount. The remaining averments of the paragraph are denied for the reasons described in paragraphs 17 through 18 and 34 through 35 of plaintiffs complaint. i 52. Denied. To the contrary, defendants told plaintiff the reason for the requested change was the administrative burden of having to calculate a fluctuating commission each month. In addition, defendants told plaintiff that the change to a fIXed monthly commission would not be further modified except with the parties' mutual agreement. 53. After reasonable investigation, plaintiff is without knowledge or information sufficient to form a belief as to the truth of the averments of this paragraph and therefore denies them and demands strict proof at trial. if material. 54. Denied for the reasons set forth in answer to paragraph 52 above. It is expressly denied that plaintiff at any time was compensated for serving as an "automation consu~anr on behalf of defendants. 55. It is admitted only that plaintiff was notified by defendants that they were purporting to terminate the parties' relationship. The remaining averments of this 3 paragraph are denied. including that plaintiff at any time relevant hereto served as a consultanlto defendants. 56. Defsndants' May 21, 1996 letter. being in writing, the writing speaks for nself. By way of further answer, plaintiff denies the statements made by defendants in the May 21, 1996 letter and their right to unilaterally terminate his monthly commission payments. 57. The averments of this paragraph constitute legal conclusions to which no responsive pleading is deemed necessary. 58. The averments of this paragraph constitute legal conclusions to which no responsive pleading is deemed necessary. 59. The averments of this paragraph constitute legal conclusions to which no responsive pleading is deemed necessary. By way of further answer. plaintiff did not serve as a consultant to defendants in connection with their decision to purchase the "Weighpack' equipment in question. 60. The averments of this paragraph constitute legal conclusions to which no responsive pleading is deemed necessary. After reasonable investigation, plaintiff is without knowledge or information sufficient to form a belief as to the truth of the averments of this paragraph relating to defendants' alleged damages arising from the failure of the Weigh pack equipment, and therefore denies them and demands strict proof at trial, ff material. 61. Denied. To the contrary, defendants owe plaintiff the commissions, other compensation. and damages requested in plaintiff's complaint. 62. The averments of this paragraph constitute legal conclusions to which no responsive pleading is deemed necessary. By way of further answer, plaintiff's agreement with defendants caused him to forego other remunerative business 4 I r '. opportunnies, resulting in a devastating loss of income when defendants sUddenly and without valid reason terminated the parties' agreement. 63. The averments of this paragraph constnute legal conclusions to which no responsive pleading is deemed necessary. 64. The averments of this paragraph constnute legal conclusions to which no responsive pleading is deemed necessary. 65. The averments of this paragraph constnute legal conclusions to which no responsive pleading is deemed necessary. 66. The averments of this paragraph constnute legal conclusions to which no responsive pleading is deemed necessary. 67. The avennents of this paragraph constnute legal conclusions to which no responsive pleading is deemed necessary. WHEREFORE, plaintiff requests judgment be entered in his favor and against defendants, jointly and severally, upon the causes of action set forth in his complaint, together with costs, fees and interest according to law. ANSWER TO COUNTERCLAIM I 68. Plaintiff incorporates by reference the averments of paragraphs 1 through 39 of the complaint and 40 through 67 of the reply to new matter, as if fully incorporated herein. 69. After reasonable investigation, plaintiff is without knowledgs or information sufficient to form a belief as to the truth of the averments of this paragraph and therefore denies them and demands strict proof at trial, if material. 70. Denied. To the contrary, plaintiff served as a broker of packaging machinery for various manufacturers, as further described in paragraphs 7 through 9 of his complaint. 5 . . Plaintiff was never an automation consultant to defendants; to the contrary, plaintiff was compensated by defendants for introducing his customers to defendants, as further described in paragraphs 10 through 14 of his complaint. In connection with acting as a broker for packaging machinery, plaintiff earned a commission when defendants purchased equipment from the manufacturers that he represented. 71. It is admitted only that at some time defendants requested plaintiff to obtain a quotation from one of the manufacturers whom he represented for a piece of equipment and that plaintiff secured such a quotation for defendants. All other a,'erments of this paragraph are specifically denied, including that plaintiff acted at any time relevant hereto as a consultant to defendants. 72. It is admitted only that plaintiff secured a quotation from Weighpack to sell defendants a piece of equipment. All other averments of this paragraph are specifically denied, including that defendants were somehow relying upon plaintiff to fulfill the role of "automation consultant" in connection with their decision to purchase the Weighpack equipment in question. 73. It is admitted only that. upon information and belief, defendants issued a purchase order for the Weighpack equipment in question. All other averments of this paragraph are specifically denied. including that defendants were somehow relying upon plaintiff to fulfill the role of "automation consultant" in connection with their decision to purchase the Weigh pack equipment in question. 74. After reasonable investigation, plaintiff is without knowledge or information sufficient to form a belief as to the truth of the averments of this paragraph and therefore denies them and demands strict proof at trial. if material. 6 _. " . . 75. Denied. To the contrary, plaintiff was going to be in Montreal anyway, defendants were already uSing Weighpack equipment in their operations, and defendants were in a great hurry to obtain the particular piece of equipment from t. Weighpack. Accordingly. as an accommodation to defendants, who were, at that time, his key client, plaintiff agreed to visit the Weighpack s~e and observe the equipment. At no time, however, did plaintiff serve as an "automation consultant' to defendants. 76. Denied. To the contrary, the Weigh pack equipment appeared to function properly during the brief test that plaintiff observed, and the decision to have the eqUipment shipped to defendants' facility in Pennsylvania was made by defendants, not by plaintiff. 77. Denied for the reasons set forth in answer to paragraph 76 above. 78. After reasonable investigation, plaintiff is without knowledge or information sufficient to form a belief as to the truth of the averments of this paragraph and therefore denies them and demands strict proof at trial, if material. 79. Denied. To the contrary, plaintiff truthfully reported to defendants what he observed during the brief test of the Weighpack equipment he was permitted to observe at the Weighpack s~e in Montreal. Plaintiff visited the Weigh pack facility as a favor to defendants. his commissions had been substantially paid before the Weighpack equipment was shipped to defendants' facility, and plaintiff would never have jeopardized the ongoing relationship he enjoyed with defendants pursuant to the parties' agreement just to obtain the balance of his commissions on the Weighpack equipment sale. For the reasons set forth in paragraphs 23 through 24 of plaintiff's complaint, defendants were looking for an excuse to terminate their agreement with plaintiff. and 7 plaintiff believes and therefore avers that they disingenuoUSly seized upon the Weighpack transaction as that purported justification. 80. Denied. To the contrary, plaintiff merely advised defendants he felt that the Weighpack situstion had been a losing proposition for everyone. 81. Denied. To the contrary, plaintiff merely advised defendants that the Weighpack equipment had appeared to function property during the brief test he was permitted to observe. At no time did plaintiff make equipment recommendations to defendants with respect to the Weighpack equipment in question; to the contrary, Weighpack, the equipment manufacturer, proposed the particular piece of equipment to meet defendants' needs, and defendants made the decision to purchase the equipment from Weighpack. 82. Denied. At no time relevant hereto did plaintiff serve as an "automation consultant' to defendants or otherwise have a consulting agreement with defendants. 83. Denied. At no time relevant hereto did plaintiff serve as an "automation consultant" to defendants. have a consulting agreement with defendants. or make equipment recommendations to defendants with respect to the Weigh pack equipment in question; to the contrary. Weigh pack, the equipment manufacturer. proposed the particular piece of equipment to meet defendants' needs. and defendants made the decision to purchase the equipment from Weighpack. After reasonable investigation, plaintiff is without knowledge or information sufficient to form a belief as to the truth of the averments of this paragraph relating to defendants' alleged damages arising from the failure of the Weigh pack equipment, and therefore denies them and demands strict proof at trial, if material. 8 '. 84. Denied. To the contrary. defendants owe plaintiff the commissions, other compensation, and damages requested in plaintiff's complaint. WHEREFORE, plaintiff respectfully requests this Honorable Court to dismiss Counterclaim I with prejudice and enter judgment in plaintiff's favor. together with costs, and such other and further relief as the Court deems fair and just. ANSWER TO COUNTERCLAIM II 85. Plaintiff incorporates by reference the averments of paragraphs 1 through 39 of the complaint, paragraphs 40 through 67 of the reply to new matter. and 68 through 84 of the answer to counterclaim I, as if fully incorporated herein. 88. After reasonable investigation. plaintiff is without knowledge or information sufficient to form a belief as to the truth of the averments of this paragraph relating to the exact amount of the total compensation paid to him by defendants in fixed monthly installments, and therefore denies them and demands strict proof at trial, if material. By way of further answer, at no time relevant hereto did plaintiff serve as an "automation consullant" to defendants or otherwise have a consulting agreement with defendants. 87. The averments of this paragraph constnute legal conclusions to which no responsive pleading is deemed necessary. WHEREFORE. plaintiff respectfully requests this Honorable Court to dismiss Counterclaim II with prejudice and enter judgment in plaintiff's favor, together with costs, and such other and further relief as the Court deems fair and just. NEW MATTER TO DEFENDANTS' COUNTERCLAIMS 88. Plaintiff incorporates by reference the averments of paragraphs 1 through 39 of the camplsint. paragraphs 40 through 67 of the reply to new matter. and 68 through 87 of the answer to counterclaims I and II. as if tully incorporated herein. 9 89. Defendants' counterclaims fail to state any claims against plaintiff upon which relief may be granted. 90. Defendants have unclean hands and have committed laches in connection with the matters alleged in their counterclaims. 91. Defendants have failed to mitigate their damages. if any. 92. Defendants' counterclaims are barred by the applicable statutes of limitations. 93. Defendants were negligent andlor contributorily negligent in connection with their decision to purchase the Weighpack equipment in question. which was the sole, direct and proximate cause of the damages allegedly sustained by defendants in connection therewith. 94. Defendants purchased packaging equipment through plaintiff after the incident relating to the Weighpack equipment in question; accordingly, defendants waived sndlor are estopped from asserting their counterclaims against plaintiff. 95. Defendants' counterclaims are barred by their fraudulent conduct, as more fully described in plaintiff's complaint. 96. To the extent plaintiff is liable to defendants on the counterclaims. which is denied, plaintiff is entitled to set off all commissions. compensation, and damages due to him against such liability. WHEREFORE. plaintiff respectfully requests this Honorable Court to dismiss Counterclaims I and II with prejudice and enter jUdgment in plaintiff's favor, together with costs, and such other and further relief as the Court deems fair and just. J%~A- ~~p _ Thomas A. Schneider Attorney for Plaintiff. Herbert E. Rubin 650 Sentry Parkway. Suite One Blue Bell. PA 19422 (610) 649-6333 J.D. No. 20571 10 '.' VERIFICATION Herbert E. Rubin, being the plaintiff in this action. hereby verifies that the facts l:ontained in the foregoing Reply to New Matter and Answer with New Matter to Counterclaims are true and correct to the best of his knowledge. information and belief. The undersigned understands that the statements therein are m e subject to the penalties of 18 PA. C.S. Section 4904 relating to unswom talsifica Date: June2.'f. 1999 , ' , " I . ' . , .. .' .....,... --.,~' , .~, , I . '. KEEFER WOOO ALLk<N & RAHAL. LLP '"Q10 WAt:NUT 8TA.1IT P.O. BOX 1100S HARRISBURG, PA 1710e..1"OS HERBERT E, RUBIN, :IN THE COURT OF COMMON PLEAS :CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, vs. No. 99-02532 ARNOLD INDUSTRIES, INC. and LEBARNOLD, INC., Civil Action at Law Defendants. DEFENDANTS' REPLY TO PLAINTIFF'S NEW MATTER ASSERTED IN RESPONSE TO DEFENDANTS' COUNTERCLAIMS Defendants Arnold Industries, Inc. and LebArnold, Inc., through their counsel, Keefer Wood Allen & Rahal, LLP, submit the within reply to plaintiffs new matter asserted in response to defendants' counterclaims, averring as follows: REPLY TO NEW MATTER 88. Defendants incorporate by reference the avennents ofparagraphs I through 87 of their answer with new matter and counterclaims as if fully set forth at this place. 89. Denied. The avennents of this paragraph constitute erroneous conclusions of fact and law to which no response is required. To the extent a response is deemed required, the avemlents are denied. 90. Denied. The avennents of this paragraph constitute erroneous conclusions offact and law to which no response is required. To the extent a response is deemed required, the avennenls are denied. . ,;,.. ,.....;_.....,,:..... :.1~~,:~.,..",,_~;.. .',...-,...".'''' 9]. Denied. The averments of this paragraph constitute erroneous conclusions of fact and law to which no response is required. To the extent a response is deemed required, the avennents are denied. 92. Denied. The averments of this paragraph constitute erroneous conclusions offacl and law to which no response is required. To the extent a response is deemed required, the avennents are denied. 93. Denied. The averments of this paragraph constitute erroneous conclusions of fact and law to which no response is required. To the extent a response is deemed required, the avennents are denied. 94. Admitted in part and denied in part. It is admitted only that Arnold Logistics/ ADW purchased. additional packaging equipment through plaintiff after the occurrence of the events described in paragraphs 7] through 8] of defendants' counterclaim, because defendants were unaware that plaintiff had breached his consulting agreement and misled them in connection with the Weighpack transaction until only shortly before his consulting relationship was terminated. The remaining averments of this paragraph constitute erroneous conclusions of fact and law to which no response is required. To the extent a response is deemed required, the averments are denied. 95. Denied. The avennents of this paragraph constitute erroneous conclusions of fact and law to which no response is required. To the extent a response is deemcd required, the avcnnents are denied. By way oflurther reply, defendants have previously responded to the -2- . . VF.RlnCA TION The undersigned, Douglas B. Enck, hereby verifies and states that: 1. He is Vice President and General Manager of the Arnold Logistics division of defendant LebArnold, Inc. (now lmown as Arnold Transportation Services, Inc.), and he is authorized to verifY the foregoing reply to plaintiffs new matter; 2. The facts set forth in the foregoing reply to plaintiffs new matter are true and correct to the best of his lmowledge, information, and belief; and 4. He is aware that false statements herein are made subject to the penalties for peIjury pursuant to 18 Pa.C.S. ~ 4904. Dated: JUlyf!f, 1999 -'~L- /c?7 DO~~ Enck CERTIFICATE OF SERVICE I, Donald M. Lewis III, Esquire, one of the attorneys for defendants, hereby certify that I have selVed the foregoing paper upon plaintiff this date by depositing a true and correct copy ofthe same in the United Stales mail, first-class postage prepaid, addressed as follows: Thomas A. Schneider, Esquire 650 Sentry Parkway Suite I Blue Bell, PA 19422 KEEFER WOOD ALLEN & RAHAL, LLP ~r B . ..;->~/~ y Donald. s III Dated: July It 1999 ~ u) (:: s; <-~ l'~ & ~~~f U.le;-.< ?~~~~ A":: :-)~;} OJ .- .:.. '2j'c~ ,n >~f:) ,r. ~J ;7.~ GJi:, \.L7': .-lll' , ',\~_lU c~\: :;3 ~~ ~ ~1.- 1--' -, u_ ('/"0 ~5 0 cr' U 1 i i 1 , I '. HERBERT E. RUBIN, :IN THE COURT OF COMMON PLEAS :CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, vs. No. 99-02532 ARNOLD INDUSTRIES, INC. and LEBARNOLD, INC., Civil Action at Law Defendants. PRARCIPR TO DISCONTINUE TO THE PROTHONOTARY: Please mark the docket in this matter to reflect that this action (and all claims and counterclaims asserted therein by the respective parties) has been settled and is discontinued, with prejudice. Respectfully submitted, ROSEN & SCHNEIDER LLP KEEFER WOOD ALLEN & RAHAL, LLP By: ~.~~ Thomas A. SchneIder (#2057 I) 650 Sentry Parkway, Suite One BlueBell,PA 19422 (610) 649-6333 Attorneys for plaintiff Attorneys for defendants Date: January "2- 'ii, 2000 :( ..... (.."! I '. i~~-: li: (...- i~.,,:: , i " ,c., l'~ , .:' , : ~ : L'.. I .' i l'';.l .' \~') , ., , I "' , , , , r.: _.jL~ C.. L: w_ "- co) :':.j c) W 0