HomeMy WebLinkAbout07-3598MARTIN J. PASTUCKA, DDS, and
PASTUCKA & SAUVE DENTAL
ASSOCIATES, LLP,
Plaintiffs
vs.
JAMES R. SAUVE, DMD,
Defendant
NOTICE
TO DEFENDANT NAMED HEREIN:
IN THE COURT OF COMMON
PLEAS OF CUMBERLAND
COUNTY, PENNSYLVANIA
CIVIL ACTION -EQUITY
NO. o '1. 3 S ~ ~ ~.~0 ~....
YOU HAVE BEEN SUED IN COURT. IF YOU WISH TO DEFEND AGAINST THE CLAIMS
SET FORTH IN THE FOLLOWING PAGES, YOU MUST TAKE ACTION WITHIN TWENTY (20)
DAYS AFTER THIS COMPLAINT AND NOTICE ARE SERVED, BY ENTERING A WRITTEN
APPEARANCE PERSONALLY OR BY ATTORNEY AND FILING IN WRITING WITH THE
COURT YOUR DEFENSES OR OBJECTIONS TO THE CLAIMS SET FORTH AGAINST YOU.
YOU ARE WARNED THAT IF YOU FAIL TO DO SO, THE CASE MAY PROCEED WITHOUT
YOU, AND A JUDGMENT MAY BE ENTERED AGAINST YOU BY THE COURT WITHOUT
FURTHER NOTICE FOR ANY MONEY CLAIMED IN THE COMPLAINT OR FOR ANY OTHER
CLAIM OR RELIEF REQUESTED BY THE PLAINTIFF. YOU MAY LOSE MONEY OR
PROPERTY OR OTHER RIGHTS IMPORTANT TO YOU.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT
HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET
FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP.
CUMBERLAND COUNTY BAR ASSOCIATION
2 LIBERTY AVENUE
CARLISLE, PENNSYLVANIA 17013
TELEPHONE: (717) 249-3166
MARTIN J. PASTUCKA, DDS, and
PASTUCKA & SAUVE DENTAL
ASSOCIATES, LLP,
Plaintiffs
vs.
JAMES R. SAUVE, DMD,
Defendant
IN THE COURT OF COMMON
PLEAS OF CUMBERLAND
COUNTY, PENNSYLVANIA
CIVIL ACTION -EQUITY
No. v ~- 3s9 ~ C~ `T~...
COMPLAINT IN EQUITY
AND NOW comes the above-named Plaintiffs, by their attorney, Samuel L. Andes, and make the
following Complaint in this matter:
1. The Plaintiffs are Martin J. Pastucka, DDS, an adult individual who resides in Cumberland
County, Pennsylvania, and Pastucka &Sauve Dental Associates, LLP, a limited liability partnership
organized under the laws of the Commonwealth of Pennsylvania which maintains its offices at 6103
Cazlisle Pike, Mechanicsburg, Pennsylvania.
2. The Defendant is James R. Sauve, DMD, an adult individual who resides at 5904 Westover
Drive, Mechanicsburg, Cumberland County, Pennsylvania.
3. Plaintiff Pastucka and Defendant formed the Plaintiff Pastucka &Sauve Dental Associates,
LLP (hereinafter after referred to as the "LLP") in February of 2000. The LLP was formed for the
purpose of purchasing and acquiring an existing dental practice and related assets for the operation of that
practice in the future by PlaintiffPastucka and Defendant Sauve through the LLP.
4. At the time of the formation of the LLP Plaintiff Pastucka and Defendant Sauve signed a
Professional Partnership Agreement dated 4 February 2000, a copy of which is attached hereto and
marked as Exhibit A.
5. From and after the date the parties formed the LLP, Plaintiff Pastucka and' Defendant Sauve
operated the LLP at its offices at 6103 Carlisle Pike in Mechanicsburg and, in that capacity, saw, treated,
and were paid by dental patients in a professional capacity. The work done by Plaintiff Pastucka and
Defendant Sauve in their professional capacity at the LLP's offices was all done as employees and
representatives of the LLP, and for the benefit of the LLP.
6. In the second half of calendar year 2006, problems developed between Plaintiff Pastucka and
Defendant Sauve with regazd to the operation of the LLP and the payment and distribution of
compensation to each of them from the LLP. Those problems included:
A. The failure of Defendant Sauve to maintain the financial records of the LLP at
the offices of the LLP and to have them readily available for inspection by Plaintiff
Pastucka and Defendant Sauve.
B. Payment by Defendant Sauve to himself various sums in excess of the fees and
compensation to be paid to him pursuant to the Professional Partnership Agreement.
C. The failure of Defendant Sauve, in his use and control of the LLP's bank
account, to pay to Plaintiff Pastucka his share of the profits and other distributions from the
LLP in accordance with the Professional Partnership Agreement.
D. Defendant Sauve's payment of some of his own personal expenses from funds
of the LLP, in violation of the Professional Partnership Agreement.
Despite repeated and reasonable efforts by Plaintiff Pastucka and the LLP, the parties could not resolve
their differences and disputes about Defendant Sauve's conduct of the business and the problems outlined
above.
7. By letter dated 27 March 2007 directed to PlaintiffPastucka and the LLP, Defendant Sauve
provided notice of his withdrawal from the LLC, effective 180 days from the date of his notice, or 23
September 2007. In the same notice he advised Plaintiff Pastucka and the LLP that he was waiving the
purchase price for his interest in the LLP to avoid the provisions of a restricted covenant set out in the
Professional Partnership Agreement. A copy of the Defendant Sauve's letter is attached hereto and
marked as Exhibit B.
8. Pursuant to the terms of the Professional Partnership Agreement, and specifically Section 8.02
of that Agreement, a partner may withdraw from the partnership at any time upon 180 calendar days prior
written notice to the other party. Upon receipt of such notice, the other partner has the right, but not the
obligation, to purchase the withdrawing partner's interest in the LLP on certain terms set out in the
Professional Partnership Agreement.
9. The Professional Partnership Agreement, and specifically Section 8.06, contains a covenant
not to compete whereby any partner withdrawing from the LLP may not compete with the LLP on certain
terms and conditions as set forth in that section.
10. The Professional Partnership Agreement, and specifically Section 8.07, allows a
withdrawing partner to avoid the covenant not to compete provisions of Section 8.06 if he waives "any
and all sums payable to the withdrawing Partner in connection with said withdrawal." Pursuant to
Section 8.07, Defendant Sauve elected to waive his right to receive a purchase price for his interest in the
LLP in exchange for not being bound by the restrictive covenant provisions of Section 8.06.
11. The time for Plaintiff Pastucka's election to purchase and acquire Defendant Sauve's interest
in the LLP has not yet passed. Plaintiff Pastucka has unti125 July 2007 to make that election. Plaintiff
Pastucka has not yet made that election or notified Defendant Sauve of any such election.
12. Since issuing his notice of withdraw from the LLP, Defendant Sauve has misused,
misappropriated, converted, or otherwise improperly dealt with assets of the LLP. His actions in this
regard include the following:
A. He has communicated with staff of the LLP his plans to open a new office in
the Mechanicsburg area at the end of September 2007 and Plaintiff Pastucka believes that
he has attempted to hire several of the staff and employees of the LLP to work with him in
his new practice.
B. He has actively solicited existing patients of the LLP, including patients
previously served by Plaintiff Pastucka, in an effort to lure those patients from the LLP to
his new practice.
C. He has used the records of the LLP to compile, or caused employees of the
LLP to compile, a list of the patients of the LLP for purposes of soliciting those patients to
do business with his new practice.
D. He has used the materials and resources of the LLP to prepaze and send
solicitations to the patients of the LLP to become patients of his new practice.
E. He has mischazacterized and misstated the intentions of Plaintiff Pastucka
regarding the continued operation of the LLP after Defendant Sauve's withdrawal from the
LLP.
F. He has issued his notice, and his attempt to solicit existing patients of the LLP
before Plaintiff Pastucka is required to make his election regarding his retention of the LLP
or its dissolution, thus significantly reducing the value of the LLP by reducing its active
patients.
G. Plaintiff Pastucka believes that Defendant Sauve has had other communications
with patients, including scheduling of existing patients of the LLP to be treated by Dr.
Sauve's new practice after 23 September 2007.
Directly as a result of these and related actions by Defendant Sauve, the assets of the LLP are being
diverted to Defendant Sauve and the continuing value of the LLP is being eroded and reduced.
13. Defendant Sauve has taken the actions listed above without the consent of the LLC or Plaintiff
Pastucka and over the objections and protests of Plaintiff Pastucka .
14. The loss of the LLP's patient base, employees and other assets will result in harm to the LLP
which cannot be accurately or completely compensated by monetary damages.
15. The injury to Plaintiff Pastucka by the loss of the assets and patient base of the LLP cannot be
adequately compensated by monetary damages because it involves the loss of his professional base, his
professional reputation, and his standing in the professional dental community, with other professionals
and with his patients.
WHEREFORE, Plaintiff Pastucka prays this court to take the following action:
A. Enjoin Defendant Sauve from taking any further action to divert, destroy, or
otherwise interfere with the assets of the LLP, specifically including the patients and
patient relationships of the LLP; and
B. Enjoin Defendant Sauve from any more efforts to schedule or treat patients of
the LLP after his withdraw from the LLP; and
C. Remove Defendant Sauve from the offices of the LLP, enjoin him from any
further communications with the staff or the patients of the LLP, and require him to return
to the LLP all documents and other items which belong to the LLP, including its books,
records, bank accounts, and patient lists; and
D. Such other action as the court deems appropriate, equitable, or necessary to
protect the interests of Plaintiff Pastucka and the LLP.
Samuel L. Andes
Attorney for Plaintiff
Supreme Court ID # 17225
525 North 12`~ Street
Lemoyne, Pa 17043
(717) 761-5361
I verify that the statements made in this document are true and correct. I understand that any false
statements in this document are subject to the penalties of 18 Pa. C.S. 4904 (unsworn falsification to
authorities).
Date: ~ ~s, ~ 7
~ n~
MARTIN ASTUCKA, DDS
I verify that the statements made in this document are true and correct. I understand that any false
statements in this document are subject to the penalties of 18 Pa. C.S. 4904 (unsworn falsification to
authorities).
Pastucka & Sauve Dental Associates, LLP
Date: by
IN J. PASTUCKA, DDS
~X /1 i,/JI ~ 4 ~_ y
01200&00001 /2.4.00/J RD/S R/131256.1
PROFESSIONAL PARTNERSHIP AGREEMENT
PASTUCKA & SAUVE DENTAL ASSOCIA TES, LLP
01200&00001 /2.4.00/J RD/S R/ 131256.1
INDEX TO PROFESSIONAL PARTNERSHIP AGREEMENT
ARTICLE 1: Partnership .......................... ...................................................:.................:.....
ARTICLE II: Business Purpose .............................................................................................
ARTICLE III: Term ..............................................................................................................
Page
1
2
2
ARTICLE IV: Partnership Interest and Capital
Section 4.01. Partnership lnterest ............................:................................................... 2
Section 4.02. Capital Contribution ................................................................................ 2
2
Section 4.03. Capital Accounts ....................................................................................
Section 4.04. Partner's Income Account ...................................................................... 3
ARTICLE V: Profits and Losses of the Partnership
Section 5.01. Participation of the Partners ................................................................... 3
Section 5.02. Periodic Draws ...................................................................................... 3
ARTICLE VI: Duties of Partners
4
...................................................................................................
Duties
01
Section 6
.
.
. 4
Section 6.02. Paid Time Off .........................................................................................
Section 6.03. Continuing Dental Education ................................................................. 4
.Section 6.04. Partner's Responsibility ......................................................................... 4
ARTICLE VII: Partnership Operation
Section 7.01. Office of the Partnership ......................................................................... 5
Section 7.02. Tangible Practice Assets ....................................................................... 5
Section 7.03. Fiscal Year/Accounting .......................................................................... 5
Section 7.04. Books and Records ............................................................................... 5
.........................................................................
..
Bank Accounts
05
Section 7 5
...
.........
.
.
Section 7.06. Charges/Professional Services .............................................................. 5
Section 7.07. Obligations of Partnership ...................................................................... 6
Section 7.08. Voting .................................................................................................... 6
Section 7.09. PolicylDisagreement .............................................................................. 6
Section 7.10. Professional Liability lnsurance ............................................................. 7
Section 7.11. Disability insurance ................................................................................ 7
Section 7.12. Tax Partner ............................................................................................ 7
ARTICLE Vlll: Termination of Partnership
Section 8.01. Voluntary Termination ............................................................................ 7
Section 8.02. Voluntary Withdrawal/Termination ......................................................... 7
Section 8.03. Withdrawal/Disability ............................................................................ 9
Section 8.04. Termination of Partnership by Death ..................................................... 10
Section 8.05. Purchase Price/Terms of Payment ........................................................ 11
Section 8.06. Covenant Not to Compete ..................................................................... 12
Section 8.07. Liquidated DamagesNiolation of Covenant Not to Compete .................. 14
Section 8.08. Termination/Licensure and Related Matters .......................................... 14
012008-00001 /2.4.00/) R D/S R/131256.1
ARTICLE IX: Notice .............................................................................................................. 15
ARTICLE X: Invalidity ............................................................................................................ 15
ARTICLE XI: Additionai Partners ............................................................... .. .............. ... 15
ARTICLE XII: Miscellaneous
Section 12.01. Life Insurance Premiums/Special Allocationt ...........................:............. 16
Section 12.02. Sauve's Employment/Pastucka's Existing Dental Practice ..................... 16
ARTICLE XIII: Entire Agreement and Modification .............................................................. 16
01200 &00001 /2.4.00/J RD/S R/131256.1
PROFESSIONAL PARTNERSHIP AGREEMENT
THIS PROFESSIONAL PARTNERSHIP AGREEMENT ("Partnership Agreement"), made and
entered into this 4th day of February, 2000, effective for all purposes as of February 1, 2000, by and
between MARTIN J. PASTUCKA, D.D.S., (hereinafter called "Pastucka") and JAMES R. SAUVE, D.M.D.,
(hereafter called "Sauve"). Pastucka and Sauve are sometimes, individually, referred to as "Partner" and
collectively, as "Partners."
NOW, THEREFORE, for and in consideration of the mutual undertakings contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which is hereby mutually
acknowledged, Pastucka and Sauve, each intending to be legally bound, agree as follows:
ARTICLE I
Partnership
The partnership ("Partnership") is hereby created as a limited liability partnership by, Pastucka- and
Sauve under the name of "Pastucka &Sauve Dental Associates, LLP" or such other name as the
Partnership may from time to time adopt. The Partnership shall exist under and be governed by the laws of
the Commonwealth of Pennsylvania, including without limitation the Uniform Partnership Act as adopted in
the Commonwealth of Pennsylvania. This Partnership shall be a partnership only for the purposes specified
in Article II and this Partnership Agreement shall not be deemed to create a general partnership between
Pastucka and Sauve with respect to any activities whatsoever, other than the activities within the business
purpose of the Partnership as specified in Article II. No Partner shall have the right or power to bind the
Partnership or any other Partner except as to the matter within the business purpose of the Partnership.
The Partnership and the Partners shall not be responsible or liable for any indebtedness or obligation of the
other Partner except such indebtedness or obligation incurred pursuant to and is limited by the terms of this
Partnership Agreement.
1
012008-00001 /2.4.00/JRD/SR/131256.1
ARTICLE II
Business Purpose
The purpose of-this Partnership is to engage and to continue to engage in the professional practice
of general dentistry at 6103 Carlisle Pike, Mechanicsburg, Pennsylvania, for the mutual production. of income
and profit. The Partnership shall not engage in any other business.
ARTICLE 111
Term
The term of this Partnership shall begin as of February 1, 2000 and shall continue until dissolved or
terminated by either Partner upon one hundred eighty (180) calendar days prior to written notice delivered to
the other Partner in person or by certified mail, or as otherwise herein set forth.
ARTICLE IV
- Partnership Interest and Capital
4.01. Partnership Interest. Pastucka's interest in the Partnership is fifty (50°!°} percent and
Sauve's interest in the Partnership is fifty (50%) percent.
4.02. Capital Contribution. Each Partner has contributed cash and assets to the capital of the
Partnership. The amount of each Partner's initial capital contribution is set forth be{ow:
partner Initial Capital Contribution
Pastucka • $100.00
Sauve ~ $100.00
4.03. Capital Accounts. Individual capital accounts shall be maintained for each Partner. The
capital of each Partner shall consist of the amount of the Partner's capital contribution set forth in Section
4.02 and shall be increased by (1) additional capital contributions, and (2) any credit balances transferred
from a Partner's income account to the Partner's capital account; it shall be decreased by (a) distributions
and reductions of the Partnership capital and (b) the Partner's share of Partnership losses if charged to
2
01200&00001 /2.4.00/) R D/S R/131256.1
capital accounts of the Partners. The capital accounts of the Partners shall be maintained in proportion to
their Partnership interest in the profits and losses of the Partnership. Any additional capital contributions that
the Partners deem necessary for the operation of the Partnership shall be .contributed by the Partners in
proportion to their respective Partnership interest in the profits and losses of the Partnership. A Partner shall
not be entitled to interest on the Partner's capital contribution or to withdraw any part of the Partner's capital
account or to receive any distribution from the Partnership except as specifically provided herein or upon the
unanimous vote of the Partners.
4.04. Partner's Income Account. Individual income accounts shall be maintained for each
Partner. All withdrawals by a Partner shall be charged to the Partner's income account. Withdrawals during
each year shall be limited to such amount as the Partners, by unanimous vote, shall determine from time to
time. Each Partner's share of the Partnership's net losses shall be charged to the Partner's income account
un{ess the Partners, by unanimous vote, agree to charge such losses to the capital accounts. of the Partners.
ARTICLE V
Profits and Losses of the Partnership
5.01. Participation of the Partners. The participation of the Partners in the net profits and losses
of the Partnership shall be in the following basis:
Pastucka 50%
Sauve 50%
The allocation of the net profits and losses of the Partnership, set forth above, shall be effective as of
February 1, 2000.
5.02. Periodic Draws. No salary shall be payable by the Partnership to either Partner.
Notwithstanding the allocation of each Partner's interest in the net profits and losses of the Partnership, the
Partners shall be compensated on an incentive basis. Specifically, each Partner shall receive forty-five
(45%~ percent of the patient revenues collected by the Partnership for dental services provided by each
Partner to the Partnership's patients. The incentive compensation shall be paid, from time to time, as the
3
012008-00001/2.4.00/JRD/SR/131256.1
Partners shall mutually agree. Any net profits of the Partnership after payment to each Partner of the
incentive compensation shall be distributed on the basis of each Partner's Partnership interest and any
portion of the profits not drawn or distributed by either Partner may be drawn at a later time or~permitted to
remain and accumulate in such Partner's account. Notwithstanding the distribution of a portion of the
Partnership's profits based on-the incentive compensation for distribution as described in this Section 5.02,
losses of the Partnership shall be allocated to each Partner on the basis described in Section 5.01. Subject
to Section 4.04, the Partners may withdraw every month a sum against their respective share of profits, as
cash income available, after provision for expenses, may permit. Any share of profits not drawn by either
Partner may be .drawn at a later time or permitted to remain and accumulate in such Partner's income
account. In the event that periodic draws of either Partner shall exceed his share of the net profits, his
subsequent periodic draws shall be reduced until such time as the overdraw has been paid.
ARTICLE VI
Duties of Partners
6.01. Duties..Each Partner shall devote his best efforts to serving professionally the Partnership.
and its patients. Both Partners will devote such time and energy to the practice of the Partnership at the
Partnership practice site on such schedu{e as sha{I be mutually agreeable by the Partners.
6.02. Paid Time Off. Each Partner shall be entitled to four (4) weeks (four (4] days per workweek)
of paid time off per calendar year. Paid time off shall not be accumulated. Paid time off shall be used by
each Partner for vacation or any other purpose, including, but not limited to, absences from work as a result
of illness or injury or other reason.
6.03. Continuing Dental Education. Each Partner shall be entitled to four (4) work days each
calendar year for continuing dental education seminars or courses and other educational purposes related to
the practice. of dentistry provided, however, that the aggregate cost, on a calendar year basis, shall not
exceed Three Thousand ($3,000.00) Dollars for each Partner.
6.04. Partner's Responsibility. Each Partner shall in all respects act and perform his professional
dental services with the highest dental standards and traditions, and each Partner wilt in all respects further
such relationships with all patients as will reflect the highest professional standards and requirements.
4
012008-00001 /2.4.00/) RD/S R/131256.1
ARTICLE VII
Partnership Operation
7.01.. Office of .the Partnership. The office of the Partnership shall be 6103 Carlisle Pike,
Mechanicsburg, Pennsylvania and at such other location as shall be agreed upon.
7.02. Tangible Practice Assets. The dental equipment, instruments and supplies, the office
furniture, fixtures and equipment, and all dental files and patient records located at the practice site or
otherwise shall be the property of the Partnership. Any replacements or acquisition of new dental
equipment, office furniture, fixtures and equipment shall be paid for by the Partnership and shall be owned
by the Partnership.
7.03. Fiscal Year/Accounting. The fiscal year of the Partnership shall be the calendar year. A
complete accounting of the Partnership affairs shall be rendered by the Partnership's accountants as of the
close of business on December 31 of each year.
7..04. Books and Records. Complete accounts of all transactions, fees and earnings of the
Partnership shall be kept in books of account, and each Partner shall cause to be entered therein a full and
accurate account of all transactions in behalf of the Partnership. The books shall be reviewed annually by
the Partnership's accountants.
7.05. Bank Accounts. Bank accounts in the name of the Partnership shall be maintained at Allfirst
Bank or other financial institution as is mutually agreed by the Partners and all money of the Partnership,
when received, shall be deposited in said bank account or accounts and all checks drawn thereon shall be
signed by either Partner.
7.06. Charges/Professional Services. Each Partner shall. charge reasonably for all professional
services rendered by the Partner, following generally the policies of Pastucka as to fees and charges.
However, each Partner may provide dental service without charge to any member of his family, any relative,
or any person under a circumstance which such Partner may deem sufficient. All fees of both Partners shall
belong to the Partnership.
5
012008-00001 /2.4.00/JRD/SR/131256.1
7.07. Obligations of Partnership. Except in case of a practice emergency, any transaction
involving an outlay or liability of the Partnership in excess of Three Thousand ($3,000.00) Dollars shall be
entered into on behalf of the Partnership with the consent of both Partners.
7.08. Voting. Each Partner. shat{ be entitled to one (1) vote. Action by the Partnership sha11 require f
the affirmative vote or approval of both Partners.
7.09. Policy/Disagreement. The Partners shall make every effort to achieve agreement in matters
involving operating policies, as well as other matters relating to Partnership operations. If Pastucka and
Sauve cannot resolve any matter pertaining to operating policies or other matter relating to Partnership
operations then, in that event, Pastucka and Sauve shall have the right, provided both agree, to request
mediation by submitting the matter in dispute to the Partnership's accountant or attorney. Both Pastucka
and Sauve shall have the right to submit their respective position with respect to the dispute to the
Partnership's accountant or attorney. The Partnership's accountant or attorney shall, within fifteen (15)
calendar days after the matter is submitted to the Partnership's accountant or attorney make a
recommendation to Pastucka and Sauve as to the resolution of the disputed issue. The Partnership shall
pay the cost of mediation.
if the matter is not submitted to mediation (pursuant to the above paragraph) or if the matter is
submitted to mediation but either Pastucka or Sauve do not accept the recommendation of the Partnership's
accountant or attorney, then either Partner shall have the right to request that the matter be submitted to
arbitration. The matter shall be submitted to an independent, neutral arbitrator for disposition. Pastucka and
Sauve shall select the independent, neutral arbitrator. If Pastucka and Sauve cannot agree as to the
independent, neutral arbitrator, then each Partner shall place the name of a independent, neutral arbitrator
on an identical slip of paper and said slip of paper shall be placed in a container. An independent third party
shall select one (1) slip of paper from the container and the name of the arbitrator that appears on said slip
of paper sha11 be the designated independent, neutral arbitrator. The decision of the arbitrators shall be
binding. The Partnership shall pay the cost of the arbitration.
6
012008-00001 /2.4.00/JRD/SR/131256.1
7.10. Professional Liability Insurance. The Partnership shall carry the Partners professional
liability insurance, and such other forms of insurance and in such amounts, as may be desirable and in the
best interest of the Partnership as agreed to by the Partners.
7.11. Disability Insurance. Each Partner shall purchase and pay his own disability insurance,
unless otherwise agreed by the Partners. Copies of each Partner's disability insurance policy shall be
delivered to the Partnership. Partners shall, if feasible, maintain comparable disability insurance benefits.
7.12. Tax Partner. Pastucka is designated as the Tax Partner. Provided, however, Pastucka may,
in writing, designate Sauve as the Tax Partner.
ARTICLE VIII
Termination of Partnership
8.01. Voluntary Termination. The Partnership may be dissolved at anytime by unanimous vote of
the Partners, in which event the Partners shall proceed with reasonable promptness to sell the Partnership
assets and to liquidate the business of the Partnership. Upon such voluntary termination, the assets of the
Partnership shall be used and distributed in the following order: (1) to pay or provide for the payment of all
Partnership liabilities and the liquidating expenses and obligations; (2) in proportion to .the respective
Partnership interest, to discharge the balance of income accounts to the Partners; (3) in proportion to the
Partnership interest, to discharge the balance of the capital accounts of the Partners; and (4) any excess to
be distributed to each Partner in accordance with each Partner's Partnership interest.
8.02. Voluntary WithdrawaURetirement. Either Partner may withdraw from the Partnership for
any reason or cause, and terminate the Partnership at anytime upon one hundred eighty (180) calendar
days prior written notice to the other Partner, delivered in person or by certified mail. At the end of the one
hundred eighty (180) calendar day notice period, or sooner, if mutually agreed, such withdrawal shall
become effective and the Partnership shall be deemed terminated and dissolved, unless either Partner shall
elect to purchase the other Partner's Partnership interest. In the event that either Partner shall die during
the notice period, the provisions relating to death, as hereinafter set forth, shall take precedence and apply.
7
012008-0000112.4.00/JRD/SRh 31256.1
Within one hundred twenty (120) calendar days after receipt of a Partner's notice of withdrawal, the
other Partner shall have the right (not obligation) to purchase the withdrawing Partner's interest in the
Partnership for the purchase price and under the terms and conditions set forth in Section 8.05.
If the non-withdrawing Partner does not elect to purchase the withdrawing Partner's Partnership
interest, then the Partnership will terminate pursuant to this Section 8.02, an accounting shall be made by
the Partnership's accountants of all assets and liabilities of the Partnership, and the debts and obligations of
the Partnership shall be paid and discharged, the respective capital accounts shall be adjusted and
distributed, and the assets then remaining shall be divided between the Partners, in accordance with their
respective interest in the Partnership at the time of such distribution. To the extent that any billings and
unpaid fees are included in the remaining assets, the same shall be subject to division and distribution
monthly, following collection and receipt of such monies.
If a Partner purchases the interest of the other Partner pursuant to this Section 8.02, then all dental
records (patient records) shall be retained by the purchasing Partner and shall remain the property of the
purchasing Partner, subject to the right of a patient to request a transfer of said record to the other Partner or
any other dentist.
If the Partnership is terminated and dissolved pursuant to this Section 8.02, then, in that event, there
shall be no restriction with regard to the right of either Partner to practice dentistry in any geographic area or
for any specified period of time. Each Partner shall be free to treat any and all patients who may wish to
continue dental care with either Partner. if either Partner purchases the Partnership interest of the other
Partner pursuant to this Section 8.02, then the provisions of Section 8.05 shall be applicable.
If Pastucka elects ~to retire, then the terms and conditions of this Section 8.02 shall be applicable. In
other words, if Pastucka shall provide one hundred eighty (180) calendar days prior written notice of
intention to retire and Sauve shah have the right, within one hundred twenty (120) calendar days after receipt
of his notice of retirement to purchase Pastucka's Partnership interest in the Partnership for the purchase
price and under the terms and conditions set forth in Section 8.05. If Sauve does not elect to purchase
Pastucka's Partnership interest, then the Partnership shall terminate pursuant to the provisions of this
Section 8.02 as if Pastucka had elected to voluntarily withdraw as a Partner. Pastucka and Sauve may, by
mutual agreement, agree upon a gradual retirement by Pastucka, modify the purchase price for Pastucka's
8
012008-00001 /2.4.OO/JRD/SR/131256.1
Partnership interest in the event that Pastucka elects to retire or otherwise modify the terms and conditions
of this Section 8.02 in the event that Pastucka desires to retire. Notwithstanding the preceding sentence, if
Pastucka and Sauve do not agree to some modified arrangement pertaining to Pastucka's retirement then
the provisions of this Section 8.02 shall be applicable.
8.03. Withdrawal/Disability.. In the event that a Partner shall become disabled (as hereinafter
defined) and remains disabled for a period of twelve (12) consecutive months, or a total of twelve (12)
months out of eighteen (18) consecutive months, the Partner shall be considered to have withdrawn from the
Partnership on the first day of the month after said twelve (12) month period occurs, upon the terms and
conditions hereinafter set forth.
A Partner shall be considered disabled when the Partner shall sustain such physical or mental
illness, drug or alcohol addiction or abuse, injury or incapacity as to prevent the Partner from substantially
performing the duties of the Partner usually and normally performed on behalf of the Partnership. If there
shall be any disagreement as to whether a Partner is disabled or as to the date of disability, the Partnership
shall appoint a medical doctor who shall determine whether the Partner is disabled, and the date upon which
such disability began, and such determination shall be binding upon the Partnership and the Partner. The
Partnership shall pay the expense incurred in arriving at such determination. Notwithstanding the foregoing,
a Partner shall be conclusively presumed to have become disabled when such determination is made by any
insurer providing disability insurance coverage to such Partner.
During the first ninety (90) calendar days of disability, the disabled Partner shall continue to receive
his incentive based compensation and shall continue to receive his distributive share of the Partnership
profits (and losses). From the ninety-first (91St) calendar day through the one hundred eightieth (180th)
calendar day of disability, the disabled Partner shall continue to receive his incentive based income and, as
applicable, his share of the Partnership profits (and losses) less any disability insurance benefit paid to the
disabled Partner. During any subsequent months of disability, the disabled Partner shall receive, if
applicable, his incentive based compensation and shall receive one-half (1%2) of his distributive share of the
Partnership profits (and losses); the distributive share of the non-disabled Partner shall be adjusted
accordingly. At the end of the twelfth (12th) consecutive month or the twelfth (12th) month out of the eighteen
(18) consecutive months of disability, the disabled Partner shall be considered to have withdrawn from the
9
012008-00001 /2.4.00/) RD/S R/131256.1
Partnership and shall be paid the purchase price for the disabled Partner's Partnership interest in
accordance with the provisions of Section 8.05.
If prior to either. twelve (12) month periods described in the paragraph above, a Partner's disability
shall terminate and the Partner again is able to and does in fact pertorm the duties usually and normally
performed on behalf of the Partnership, but within one (1) year following termination of such disability, such
Partner shall again become disabled from the same disability, then the subsequent disability shall be
considered as a continuation of the prior disability and the provisions of this Section 8.03 shall take effect as
though the subsequent period of disability were a continuation of the prior period of disability.
8.04. Termination of Partnership by Death. The Partnership shall be terminated and dissolved
upon the death of either Partner. Within one hundred twenty (120) calendar days following the death of the
Partner, the surviving Partner shall purchase from the estate of the deceased Partner, and the executors or
administrators of the estate of the deceased Partner shall sell to the surviving Partner, the deceased
Partner's Partnership interest in the Partnership .for the purchase price and under the terms set forth in
Section 8.05.
On the death of either Partner, the proceeds of any life insurance policy or policies that are owned by
the surviving Partner on the life of the deceased Partner will be paid by the surviving. Partner to the
executors or administrators of the estate of the deceased Partner. The proceeds shall be applied towards
the payment of the purchase price for the deceased Partner's interest in the Partnership. If the proceeds
from such policy or policies shall exceed the purchase price, then the balance shall be retained by the
surviving Partner. If the purchase price for the Partnership interest exceeds the proceeds of such life
insurance policy or policies, the balance of the purchase price shall be paid by the surviving Partner to the
estate of the deceased Partner as set forth in Section 8.05.
The death benefit or benefits payable with respect to the policy or policies acquired by each Partner
shall be subject to the agreement of both Partners. All life insurance policies acquired pursuant to this
Section 8.04 shall be term policies unless otherwise agreed by the Partners.
10
01200&00001 /2.4.00/) RD/S R/131256.1
All profits earned by the Partnership business after the date of the deceased Partner's death shall
belong to the surviving Partner, and the estate of the deceased Partner shall have no right or claim to those
profits or any right to interest instead of those profits.
Each Partner shall be the owner of the insurance policy or policies insuring the life of the other
Partner, shall hold full legal title to the insurance policy, and shall have the exclusive right to exercise. any'
rights, options or privileges provided for in the policy or policies or permitted the insurance company issuing
the policy or policies with respect to said policy. Each Partner agrees, however, not to exercise any of these
rights, option or privileges without giving the other Partner at least sixty (60) calendar days' notice. Each
Partner agrees to pay as they become due all premiums on the policy owned by him and to give proof of
payment of each premium to the other insured Partner within twenty (20) calendar days after the premium
has become due. If any premium is not paid within the time period, the insured Partner shall have the right
to pay the premium and to be reimbursed for such premium by the owner of the policy.. The insurance
company issuing the policy is authorized and directed to give the insured Partner any information the insured
Partnermay request in writing pertaining to the status of the insurance policy insuring his life.
On the death of either Partner, the ownership of any policy owned by the deceased Partner on the
life of the other Partner shall pass to the executors or administrators of the deceased Partner's estate. On
the death of either Partner, the surviving Partner shall have the right to purchase from the estate of the
deceased Partner, and the executors or administrators of the estate of the deceased Partner shall sell to the
surviving Partner, any or all policies owned by the deceased Partner insuring the life of the surviving Partner
for a purchase price and under the terms and conditions agreeable to the surviving Partner and the
executors or administrators of the estate of the deceased Partner. The surviving Partner's option to
purchase said life insurance policy or policies shall expire one hundred twenty (120) calendar days after the
deceased Partner's date of death. .
8.05. Purchase Price/Terms of Payment. The purchase price for a Partner's Partnership interest
shall be an amount equal to (i) twenty-five (25%) percent of the total patient revenue received for the prior
twelve (12) consecutive months; plus (ii) the then current balance of the accounts receivable; plus (iii) the
book value of the tangible assets of the Partnership; less the total Partnership indebtedness; multiplied by
the Partner's Partnership interest. With respect to the balance of the accounts receivable, only aged
accounts receivable of two hundred seventy (270) calendar days or less shall be included. The book value
11
012008-00001 /2.4.00/) RD/S R/131256.1
of the tangible assets of the Partnership shall be determined by the Partnership's accountant in accordance
with generally accepted accounting practices.
Payment of the purchase price shall be made in sixty (60) equal consecutive monthly installments,
together with interest at the applicable federal rate, with the first monthly installment to be paid on the first
day of the second month following the month in which death, retirement, disability or withdrawal occurs.
The unpaid balance of the purchase price shall be secured by a promissory note from the purchasing
Partner in favor of the selling Partner or the estate of the deceased Partner, as applicable. The purchasing
Partner shall have the right to prepay said obligation, in whole or in part, without penalty. In the event that a
Partner dies, the life insurance policy proceeds shall be applied, on a lump sum basis, towards the purchase
price and the balance, if any, may be paid by the purchasing Partner in installments over sixty (60)
consecutive months. If the life insurance proceeds exceed the purchase price, then the balance of the life
insurance proceeds as set forth in Section 8.04 shall be retained by the surviving Partner.
8.06. Covenant Not to Compete. If either Pastucka or Sauve shall become disabled and sell his
Partnership interest to the other Partner pursuant to Section 8.04, or if either Pastucka or Sauve shall
withdraw and sell his Partnership interest to the other Partner pursuant to Section 8.02 or if Pastucka shall
retire and sell his Partnership interest to Sauve pursuant to Section 8.02, then, the disabled Partner,
withdrawing Partner or retiring Partner, as applicable, shall not for a period of twenty-four (24) .consecutive
calendar months from the effective date of withdrawal (by disability), effective date of voluntary withdrawal or
effective date of retirement, as applicable, practice dentistry either as an employee, sole proprietor, partner
or otherwise or, directly or indirectly, own, manage, operate, join, control, finance or participate in the
ownership, management, operation, control or financing of, or be an officer, director, partner, principal,
member, agent, representative, consultant or otherwise, practice dentistry or be affiliated with a sole
practitioner or entity that practices dentistry, within a radius of 10 miles from any Partnership practice site in
existence as of the effective date of such disability, withdrawal or retirement. If either Partner (then former
Partner) shall during the twenty-four (24) consecutive month period violate the terms and conditions of this
Section 8.06, the restricted period set forth herein shall be extended by a period of time equal to the number
of days, if any, during which the Partner (then former Partner) is in violation of the provisions of this Section
8.06.
12
012008-00001 /2.4.00/JRD/SR/131256.1
The Partners acknowledge and agree that the covenants and restrictions contained in this Section
8.06 relate to matters which are of special, unique and extraordinary importance to the Partnership (and the
remaining Partner) and without such restrictions and covenants, both Partners would be unwilling to enter
into this Partnership Agreement or to pay to either Partner, upon withdrawal or retirement, as applicable, the
purchase price for such Partner's Partnership interest, and that the violation of any of the terms of such
restricted .covenant would result in irreparable injury to the Partnership and the remaining Partner.
Accordingly, the remaining Partner or Partnership, ~ as applicable, shall be entitled to preliminary and
permanent injunctive relief for a violation or threatened violation of any such restrictions without having to
prove actual damages or to post bond, and such Partner or Partnership shall be entitled to an equitable
accounting of all earnings, profits or other benefits arising out of such violation, which rights shall be
cumulative and "in addition to any other rights and remedies to which such Partner or Partnership may be li
entitled in law or equity. Each Partner hereby waives any objections on the ground of improper jurisdiction
or venue to the commencement of any such action in the Commonwealth of Pennsylvania.. Each Partner
acknowledges that the terms of this Partnership Agreement, and specifically the terms of this Section 8.06,
have been negotiated at "arm's length." Each Partner acknowledges, by the execution of this Partnership '~
Agreement, that each Partner has read the restrictions contained herein, has had an opportunity to review
the restrictions set forth herein with legal counsel, and understands to the fullest extent and implication the
terms of this Section 8.06 and acknowledges and agrees to be bound thereby.
It is the intent of both Partners that the provisions of this Section 8.06 be enforceable to the fullest
extent permitted by law or equity. If, however, any portion of the restrictive covenants is held to be
unreasonable in any proceeding, then the period of time, the geographic area or other restrictions shall be
reduced by the elimination or reduction of such portion thereof, so that such restriction may be enforced in
the manner that is adjudicated to be reasonable. Further, each Partner agrees that in the event of a
violation by either Partner (following that Partner's retirement or withdrawal, as applicable) that in addition to
any other remedy provided to the non-violating Partner, the balance of the purchase price (determined as of
the date of the violation of any restrictions set forth in this Section 8.06) shall not be payable to the violating
Partner (then former Partner) and that any amount of the purchase price paid by the non-violating Partner to
the violating Partner shall be in full and complete satisfaction of the non-violating Partner's obligation with
respect to payment of the purchase price of the violating Partner as set forth in this Partnership Agreement.
13
01200 &00001 /2.4.00/) RD/S R/131256.1
Notwithstanding the provisions of this Section 8.06, the continued practice of dentistry by Pastucka at
Pastucka's sole proprietorship dental practice located at 1430 Bridge Street, New Cumberland,
Pennsylvania, shall not be deemed a violation of this restrictive covenant in the event that Pastucka shall
become disabled, sell his Partnership interest to Sauve; withdraw or retire. Sauve's continued employment
by Pastucka and Sauve's continued practice of dentistry at the current dental practice at 1430 Bridge Street,
New Cumberland; Pennsylvania, .shall not be deemed a violation of the provisions of this Section 8.06, and
Sauve shall be permitted to continue his practice (as an employee of Pastucka) at the New Cumberland
practice site notwithstanding that Sauve shall become disabled, sell his Partnership interest to Pastucka or
shall elect to withdraw as a Partner.
8.07. Liquidated DamageslViolation of Covenant Not to Compete. Either Partner shall have
the right, in connection with the voluntary withdrawal of the Partner from the Partnership, to elect to waive
any and all sums payable to the withdrawing Partner in connection with said such withdrawal as provided in
this Partnership Agreement in lieu of being bound by the terms and conditions of the covenant not to
compete described in Section 8.06. If the withdrawing Partner elects to waive the entire purchase price for
the withdrawing Partner's Partnership interest pursuant to this Section 8.07, then such election shall be in
writing and shall be provided to the other Partner not less than ninety (90) calendar days prior to the
effective date of such withdrawal. The election, once submitted in writing by the withdrawing Partner, shall
be irrevocable.
8.08. Termination/Licensure and Related Matters. If either Pastucka's or Sauve's professional
license shall be revoked, suspended or restricted and said professional license is not reinstated or restriction
removed within a ninety (90) calendar day period then the other Partner shall have the right, at that Partner's
option, to terminate the Partnership by notice to the Partner whose license has been revoked, suspended or
restricted and to purchase that Partner's Partnership interest as if the Partner had withdrawn provided,
however, that the purchase price, as set forth in Section 8.05, shall be reduced by forty (40%) percent.
Payment of the reduced purchase price shall be under the terms and conditions set forth in Section 8.05. If
either Pastucka's or Sauve's professional license shall be revoked, suspended or restricted, or if Pastucka or
Sauve has notice of any such possible revocation, suspension or restriction with respect to the professional
license, the right of voluntary withdrawal pursuant to Section 8.02 shall not be applicable and neither
Pastucka nor Sauve, as applicable, shall have the right to withdraw from the date that Pastucka or Sauve, as
14
012008-00001/2.4.00/JRD/SR/131256.1
applicable, has received notice of any such possible revocation, suspension or restriction through the period
of time in which the other Partner has the right to terminate the Partnership Agreement by notice.
Article IX
Notice
All notices shall be given by either Partner to the other and shall be delivered in writing at the
office of the Partnership and to the other Partner by certified mail at the following addresses:
Pastucka: Martin J. Pastucka, D.D.S.
5261 Stathmore Drive
Mechanicsburg, PA 17055
Sauve: James R. Sauve, D.M.D.
6383 Stephen's Crossing
Mechanicsburg, PA 17055
Either Partner may change the address at which notice is to be given by providing notice in
accordance with the provisions of this Section.
ARTICLE X
Invalidity
In the event that any provision of this Partnership Agreement shall be held unenforceable, the same
shall not affect the remaining provisions of this Partnership Agreement.
ARTICLE XI
Additional Partners
No additional partners shall be admitted into the Partnership unless agreed by both Partners.
15
012008-00001/2.4.00/JRD/SR/131256.1
ARTICLE XII
Miscellaneous
12.01. Life Insurance Premiums/Special Allocation. As set forth 'in Section 8.04, each Partner
has or intends to purchase a life insurance policy or policies on the life of the other Partner to fund, in whole
or in part, the payment of the purchase prjce to the estate of the deceased Partner in the event of the death
of the Partner. Each Partner is required, pursuant to Section 8.04, to pay the premiums on account of said
policy or policies. Because of the difference in age of the Partners, the total premiums paid by both Partners
for said insurance policies shall be combined and each Partner will be responsible for one-half (1/2) of said
aggregate premiums. The adjustment shall be made by a special allocation of the net distributable profit.
The death benefit payable in connection with each policy shall be subject to the approval of both Partners.
12.02. Sauve's Employment/Pastucka's Existing Dental Practice. Sauve is currently employed
by Pastucka in Pastucka's dental practice (sole proprietorship) located at 1430 Bridge Street, New
Cumberland, Pennsylvania. Nothing set forth in this Partnership Agreement shall be construed to change or
modify the current employer/employee relationship between Sauve and Pastucka, notwithstanding that
Sauve is a Partner pursuant to this Partnership Agreement with respect to the general dentist practice to be
conducted by Pastucka and Sauve as Partners at 6103 Carlisle Pike, Mechanicsburg, Pennsylvania, or any
other practice site of the Partnership as mutually agreed by and between Pastucka and Sauve.
ARTICLE XIII
Entire Agreement and Modification
This Partnership Agreement represents the entire agreement and understanding of the Partners, and
no oral agreements exist except as set forth herein. No modification of this Partnership Agreement shall be
valid or binding unless,in writing and signed by the Partners.
[This space intentionally left blank]
16
;. . /
I 012008-00001/2.4.00/JRD/SR/131256.1
IN W/TNESS WHEREOF, the Partners have caused this Partnership Agreement to be signed and
delivered, in duplicate, as of the day and year first above written. _
Pastucka:
Martin J. Pas(ucka, D.D.S.
Sauve:
~'"''~
Ja es R. Sauve, D.M. .
17
k ~ 4
33/27/2007 1b: 57 7172341099 STEVENS & LEE HSBOH PAGE 02/02
James R. Sauve, DMD
5904 Westover Drive
Mechanicsburg, PA 17050
Match 27, 2007
Vla Certified Mail
Martin J. Pastucka, D.D.S.
5261 Strathmore Drive
lVZechanicsburg, PA 17055
Martin J. Pastucka, D.D.S.
c/o Sauve & Pastucka Dental Associates, LLP
b 103 Carlisle Pike
Mechanicsburg, PA.17050
Jte: Pastucka &Sauve Dental Associates, LLP (the "Partnership'
Deaz Marty:
T araa. wxitimg to provide notice of my withdrawal from the Partnership pursuant to Section
8.02 of our Professional Partnership Agxeem~ent, dated February 4, 2000, effective 180 days from
the date of this notice (September 23, 2007).
Zn, additi,on, I am providing notice pursuant to Section 8.07 of my election to waive the
purchase price for my Palctnersbap zntexest should you elect to purchase ]my Patt>~,exship Zntexest
io. accoxdance with tl><e provisions of the Partnership Agreement.
~ am hopeful that we can comclude the dissolution of the Parti><erslaip ib. a courteous and
respectful manner'and I am committed to doing so with your cooperation.
sincerely, .
~'° -.~~
James R. Sauve, DMD
JItS/kdd
cc: Samuel L..A,mdes, Esquire (via facsimi]e (717) 761-1435)
Richard L. Grubb, Esquire
5L1710878v1/101341.00001
D
t"} N
'~~ ,,,~ `;7
~~..~ r
' 1 -_._ _
t i j
-
r,
(.:'s _
` 7
"' ~ ,, - s
~ ...f
.
4 t ~
,~
~ n ~ .._
~
~
'
`~3~;~~
( ~ .,
°Gl -~ ~'~' <7
d
n
MARTIN J. PASTUCKA, DDS, and } IN THE COURT OF COMMON
PASTUCKA & SAWE DENTAL ) PLEAS OF CUMBERLAND
ASSOCIATES, LLP, ) COUNTY, PENNSYLVANIA
Plaintiffs )
vs. ) CIVIL ACTION -EQUITY
) 35~i~
JAMES R. SAWE, DMD, ) NO. G 7 -
Defendant }
PETITION FOR PRELIMINARY INJUNCTION
AND NOW comes the above-named Plaintiffs, by their attorney, Samuel L. Andes, and petition
the court for a preliminary injunction, based upon the following:
1. The Petitioners herein are the Plaintiffs in this matter. The Respondent herein is the
Defendant.
2. Plaintiff has, contemporaneously with the filing of this Petition, filed a Complaint in Equity.
A copy of that Complaint is attached hereto and marked as Exhibit A and the Petitioners incorporate, by
reference, the averments set out in that Complaint.
3. Defendant Sauve has engaged in a course of conduct which is creating and continues to create
irreparable harm to Plaintiffs. His conduct includes his efforts to take from the LLP its employees, its
patients, and its other assets, all as is more particularly described in the Complaint which is attached
hereto, and specifically Paragraphs 6 and 12 of the Complaint.
4. The harm which Defendant's conduct is creating for the Plaintiff is irreparable because it is
destroying a viable and independent dental practice owned by the LLP, is interfering with existing
relationships between Plaintiffs and their professional dental patients, and because it is undermining,
eroding and destroying the reputation and standing of both Plaintiffs in the dental community.
5. The harm which Defendant's conduct is causing the Plaintiffs is immediate because it has
already interfered with the dentist-patient relationship between Plaintiffs and their patients and threatens
to continue to interfere with and disrupt that relationship. The damage is even more immediate because
the Plaintiffs are without the capacity to communicate effectively with the patients which Defendant has
solicited because Plaintiffs are not aware of the identity of all patients to whom Defendant has issued his
solicitation.
6. Greater harm will be caused to the Plaintiffs if Defendant's conduct is allowed to continue
without relief from this court than will be done if this court takes immediate action to enjoin Defendant's
conduct. Defendant will not be opening his new office for more than three months and that allows him
more than adequate time to contact and solicit patients later, if he is permitted to do so. Allowing him to
solicit those patients now, without Plaintiff having any reasonable opportunity to respond to protect their
relationships with these patients, will cause far greater harm to Plaintiffs than Defendant will suffer if his
contact with patients are postponed until Plaintiff Pastucka makes his election as to whether to acquire or
dissolve the partnership.
7. Entering a preliminary injunction at this time will preserve the status quo as it existed prior to
Defendant's acts of misconduct. Restoring the status quo will allow the parties to organize and
implement a reasonable and fair method of dissolving the partnership or transferring the partnership to
Plaintiff Pastucka if he elects to purchase it.
8. The misconduct of Defendant Sauve is clear and an injunction preventing him from further
misconduct, and restoring the status quo, is the best remedy suited to address the problems his conduct has
created.
9. Plaintiffs, as the owners of the dental practice and other assets which Defendant Sauve seeks to
divert and misappropriate, are entitled to the protection they seek in the form of an injunction.
10. Delay in its enjoining the actions of the Defendant Sauve will cause additional serious injury
to Plaintiffs.
WHEREFORE, Plaintiffs prays this court to take the following immediate action:
A. Enjoin Defendant from any further solicitation of or communications with
patients of the LLP with regard to the opening of his new practice in September of 2007;
and
B. Enjoin Defendant from further communications with employees and staff of the
LLP in any effort to hire them to work for his new practice; and
C. Require Defendant to provide to Plaintiffs, immediately, a list of all patients of
the LLP to which he sent his notice and solicitation; and
D. Order and direct Defendant to return to the LLP's offices all books, records,
checks, bank accounts, and related materials which belong to the LLP or contain funds or
assets of the LLP; and
E. Enjoin Defendant from entering the offices of the LLP effective immediately.
,~' a
amuel L. es
Attorney for Plaintiffs
Supreme Court ID # 17225
P.O. Box 168
Lemoyne, Pa 17043
(717)761-5361
I verify that the statements made in this document are true and correct. I understand that any false
statements in this document are subject to the penalties of 18 Pa. C.S. 4904 (unsworn falsification to
authorities).
Date: 6 ~s 0
OS
MARTIN J ASTUCKA, DDS
I verify that the statements made in this document are true and correct. I understand that any false
statements in this document are subject to the penalties of 18 Pa. C.S. 4904 (unsworn falsification to
authorities).
Pastucka & Sauve Dental Associates, LLP
Date: ~ /~ d7
~~
by `''
T J. PASTUCKA, DDS
CERTIFICATE OF SERVICE
I hereby certify that I served a copy of the foregoing document upon counsel for the Defendant by
regular mail, postage prepaid, addressed as follows:
Richazd L. Grubb, Esquire
17 North 2"d Street, 16~` Floor
Harrisburg, PA 17101
Date: 18 June 2007 '~.~` 1, ~ ~,
Amy arkins
ecretary for Samuel L. Andes
~~ ~`r~ .~
t.._ Z, ..r-,
-'C} ~
.;.J
""~ ) ~ ;'
C:1
..-~ tiff'
_ ~,
^~, n-!
Y ' i z^~
...~.
`3 (~+,,:
MARTIN J. PASTUCKA, DDS, and IN THE COURT OF COMMON PLEAS OF
PASTUCKA &SAUVE DENTAL :CUMBERLAND COUNTY, PENNSYLVANIA
ASSOCIATES, LLP
PLAINTIFFS
NO. 07-3598 CIVIL
V.
JAMES R. SAUVE, DMD,
DEFENDANT :CIVIL ACTION -EQUITY
ORDER OF COURT
AND NOW, this 18'h day of June, 2007, upon consideration of the Plaintiff's
Motion for Preliminary Injunction,
IT IS HEREBY ORDERED AND DIRECTED that the Defendant will file an
answer to the Motion for Preliminary Injunction on or before June 27, 2007.
IT IS FURTHER ORDERED AND DIRECTED that the parties in this case file a
pre-hearing memorandum with the Court on or before Friday, June 29, 2007 in the
following format:
I. A concise statement of factual issues to be decided at a hearing.
II. A list of witnesses the party intends to call at the hearing along with a concise
statement of their anticipated testimony.
III. A list of all exhibits each party anticipates presenting at the hearing.
IV. A statement of any legal issues each party anticipates being raised at the
hearing along with copies of any cases which may be relevant to resolution of the stated
issue.
V. Estimated time necessary for the hearing.
IT IS FURTHER ORDERED AND DIRECTED that a hearing in this matter shall
be held in Courtroom No. 5 of the Cumberland County Courthouse on Friday,
July 6, 2007 at 1:30 p.m.
Plaintiff shall serve a copy of this order upon the Defendant or his attorney if his
attorney has entered an appearance in this matter.
By the Court,
~~~
M. L. Ebert, Jr.,
~muel Andes, Esquire
Attorney for Plaintiffs
~ichard Grubb, Esquire
Attorney for Defendant
bas
,~amtin.ol ~ ~au~e ~'~1~
J.
F ~`~4. t
~ ~ r,~"
~ ~~' f ~
~ ~ .~ ~ ~,~ 61 tl~lt~ ~06Z
~V93i ~M„rl YS..~1 1'J i~13 JI~ ~V
MARTIN J. PASTUCKA, DDS, and
PASTUCKA & SAUVE DENTAL
ASSOCIATES, LLP,
Plaintiffs
vs.
JAMES R. SAUVE, DMD,
Defendant
NOTICE
TO DEFENDANT NAMED HEREIN:
IN THE COURT OF COMMON
PLEAS OF CUMBERLAND
COUNTY, PENNSYL~AI
_ _.~,
--- - c_.., --~
-t-
c._ . ~ -n
-r-~ i 1
CIVIL ACTION -EQUITY, - `'_
~ -` c-,
~4
-~~-
. ~...,
- ~:::> ~
YOU HAVE BEEN SUED IN COURT. IF YOU WISH TO DEFEND AGAINST THE CLAIMS
SET FORTH IN THE FOLLOWING PAGES, YOU MUST TAKE ACTION WITHIN TWENTY (20)
DAYS AFTER THIS COMPLAINT AND NOTICE ARE SERVED, BY ENTERING A WRITTEN
APPEARANCE PERSONALLY OR BY ATTORNEY AND FILING IN WRITING WITH THE
COURT YOUR DEFENSES OR OBJECTIONS TO THE CLAIMS SET FORTH AGAINST YOU.
YOU ARE WARNED THAT IF YOU FAIL TO DO SO, THE CASE MAY PROCEED WITHOUT
YOU, AND A JUDGMENT MAY BE ENTERED AGAINST YOU BY THE COURT WITHOUT
FURTHER NOTICE FOR ANY MONEY CLAIlVIED IN THE COMPLAINT OR FOR ANY OTHER
CLAIM OR RELIEF REQUESTED BY THE PLAINTIFF. YOU MAY LOSE MONEY OR
PROPERTY OR OTHER RIGHTS IMPORTANT TO YOU.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT
HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET
FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP.
CUMBERLAND COUNTY BAR ASSOCIATION
2 LIBERTY AVENUE
CARLISLE, PENNSYLVANIA 17013
TELEPHONE: (717) 249-3166
MARTIN J. PASTUCKA, DDS, and
PASTUCKA & SAUVE DENTAL
ASSOCIATES, LLP,
Plaintiffs
vs.
JAMES R. SAUVE, DMD,
Defendant
IN THE COURT OF COMMON
PLEAS OF CUMBERLAND
COUNTY, PENNSYLVANIA
CIVIL ACTION -EQUITY
NO.
COMPLAINT IN EOUITY
AND NOW comes the above-named Plaintiffs, by their attorney, Samuel L. Andes, and make the
following Complaint in this matter:
1. The Plaintiffs are Martin J. Pastucka, DDS, an adult individual who resides in Cumberland
County, Pennsylvania, and Pastucka &Sauve Dental Associates, LLP, a limited liability partnership
organized under the laws of the Commonwealth of Pennsylvania which maintains its offices at 6103
Carlisle Pike, Mechanicsburg, Pennsylvania.
2. The Defendant is James R. Sauve, DMD, an adult individual who resides at 5904 Westover
Drive, Mechanicsburg, Cumberland County, Pennsylvania.
3. Plaintiff Pastucka and Defendant formed the Plaintiff Pastucka &Sauve Dental Associates,
LLP (hereinafter after referred to as the "LLP") in February of 2000. The LLP was formed for the
purpose of purchasing and acquiring an existing dental practice and related assets for the operation of that
practice in the future by PlaintiffPastucka and Defendant Sauve through the LLP.
4. At the time of the formation of the LLP Plaintiff Pastucka and Defendant Sauve signed a
Professional Partnership Agreement dated 4 February 2000, a copy of which is attached hereto and
marked as Exhibit A.
5. From and after the date the parties formed the LLP, Plaintiff Pastucka and' Defendant Sauve
operated the LLP at its offices at 6103 Cazlisle Pike in Mechanicsburg and, in that capacity, saw, treated,
and were paid by dental patients in a professional capacity. The work done by Plaintiff Pastucka and
Defendant Sauve in their professional capacity at the LLP's offices was all done as employees and
representatives of the LLP, and for the benefit of the LLP.
6. In the second half of calendar yeaz 2006, problems developed between Plaintiff Pastucka and
Defendant Sauve with regard to the operation of the LLP and the payment and distribution of
compensation to each of them from the LLP. Those problems included:
A. The failure of Defendant Sauve to maintain the financial records of the LLP at
the offices of the LLP and to-have them readily available for inspection by Plaintiff
Pastucka and Defendant Sauve.
B. Payment by Defendant Sauve to himself various sums in excess of the fees and
compensation to be paid to him pursuant to the Professional Partnership Agreement.
C. The failure of Defendant Sauve, in his use and control of the LLP's bank
account, to pay to Plaintiff Pastucka his share of the profits and other distributions from the
LLP in accordance with the Professional Partnership Agreement.
D. Defendant Sauve's payment of some of his own personal expenses from funds
of the LLP, in violation of the Professional Partnership Agreement.
Despite repeated and reasonable efforts by Plaintiff Pastucka and the LLP, the parties could not resolve
their differences and disputes about Defendant Sauve's conduct of the business and the problems outlined
above.
7. By letter dated 27 March 2007 directed to Plaintiff Pastucka and the LLP, Defendant Sauve
provided notice of his withdrawal from the LLC, effective 180 days from the date of his notice, or 23
September 2007. In the same notice he advised Plaintiff Pastucka and the LLP that he was waiving the
purchase price for his interest in the LLP to avoid the provisions of a restricted covenant set out in the
Professional Partnership Agreement. A copy of the Defendant Sauve's letter is attached hereto and
marked as Exhibit B.
8. Pursuant to the terms of the Professional Partnership Agreement, and specifically Section 8.02
of that Agreement, a partner may withdraw from the partnership at any time upon 180 calendar days prior
written notice to the other party. Upon receipt of such notice, the other partner has the right, but not the
obligation, to purchase the withdrawing partner's interest in the LLP on certain terms set out in the
Professional Partnership Agreement.
9. The Professional Partnership Agreement, and specifically Section 8.06, contains a covenant
not to compete whereby any partner withdrawing from the LLP may not compete with the LLP on certain
terms and conditions as set forth in that section.
10. The Professional Partnership Agreement, and specifically Section 8.07, allows a
withdrawing partner to avoid the covenant not to compete provisions of Section 8.06 if he waives "any
and all sums payable to the withdrawing Partner in connection with said withdrawal." Pursuant to
Section 8.07, Defendant Sauve elected to waive his right to receive a purchase price for his interest in the
LLP in exchange for not being bound by the restrictive covenant provisions of Section 8.06.
11. The time for PlaintiffPastucka's election to purchase and acquire Defendant Sauve's interest
in the LLP has not yet passed. PlaintiffPastucka has unti125 July 2007 to make that election. Plaintiff
Pastucka has not yet made that election or notified Defendant Sauve of any such election.
12. Since issuing his notice of withdraw from the LLP, Defendant Sauve has misused,
misappropriated, converted, or otherwise improperly dealt with assets of the LLP. His actions in this
regard include the following:
A. He has communicated with staff of the LLP his plans to open a new office in
the Mechanicsburg area at the end of September 2007 and Plaintiff Pastuckahelieves that
he has attempted to hire several of the staff and employees of the LLP to work with him in
his new practice.
B. He has actively solicited existing patients of the LLP, including patients
previously served by Plaintiff Pastucka, in an effort to lure those patients from the LLP to
his new practice.
C. He has used the records of the LLP to compile, or caused employees of the
LLP to compile, a list of the patients of the LLP for purposes of soliciting those patients to
do business with his new practice.
D. He has used the materials and resources of the LLP to prepare and send
solicitations to the patients of the LLP to become patients of his new practice.
E. He has mischaracterized and misstated the intentions of Plaintiff Pastucka
regarding the continued operation of the LLP after Defendant Sauve's withdrawal from the
LLP.
F. He has issued his notice, and his attempt to solicit existing patients of the LLP
before Plaintiff Pastucka is required to make his election regarding his retention of the LLP
or its dissolution, thus significantly reducing the value of the LLP by reducing its active
patients.
G. Plaintiff Pastucka believes that Defendant Sauve has had other communications
with patients, including scheduling of existing patients of the LLP to be treated by Dr.
Sauve's new practice after 23 September 2007.
Directly as a result of these and related actions by Defendant Sauve, the assets of the LLP are being
diverted to Defendant Sauve and the continuing value of the LLP is being eroded and reduced.
13. Defendant Sauve has taken the actions listed above without the consent of the LLC or Plaintiff
Pastucka and over the objections and protests of PlaintiffPastucka .
14. The loss of the LLP's patient base, employees and other assets will result in harm to the LLP
which cannot be accurately or completely compensated by monetary damages.
15. The injury to Plaintiff Pastucka by the loss of the assets and patient base of the LLP cannot be
(I adequately compensated by monetary damages because it involves the loss of his professional base, his
professional reputation, and his standing in the professional dental community, with other professionals
and with his patients.
WHEREFORE, Plaintiff Pastucka prays this court to take the following action:
A. Enjoin Defendant Sauve from taking any further action to divert, destroy, or
otherwise interfere with the assets of the LLP, specifically including the patients and
patient relationships of the LLP; and
B. Enjoin Defendant Sauve from any more efforts to schedule or treat patients of
the LLP after his withdraw from the LLP; and
C. Remove Defendant Sauve from the offices of the LLP, enjoin him from any
further communications with the staff or the patients of the LLP, and require him to return
to the LLP all documents and other items which belong to the LLP, including its books,
records, bank accounts, and patient lists; and
D. Such other action as the court deems appropriate, equitable, or necessary to
protect the interests of Plaintiff Pastucka and the LLP.
~~ ~.f r~'~`1 r
Samuel L. Andes
Attorney for Plaintiff
Supreme Court ID # 17225
525 North 12~ Street
Lemoyne, Pa 17043
(717) 761-5361
I verify that the statements made in this document are true and correct. I understand that any false
statements in this document are subject to the penalties of 18 Pa. C.S. 4904 (unsworn falsification to
authorities).
Date: ~ ~s~ 6 7
ar' n/~
MARTIN ASTUCKA, DDS
I verify that the statements made in this document are true and correct. I understand that any false
statements in this document are subject to the penalties of 18 Pa. C.S. 4904 (unsworn falsification to
authorities).
Pastucka & Sauve Dental Associates, LLP
..Date: ~ /~ d 7 by ~,,, I~,dJ'
IN J. PASTUCKA, DDS
~ xh~~ i~ ~
. ,~,
• it 012008-00001/2.4.00/JRD/SR/131256.1
PROFESS/ONAL PARTNERSH/P AGREEMENT
PASTUCKA & SA UVE DENTAL ASSOC/A TES, LLP
01200&00001 /2.4.00/JRD/SR/131256.1
INDEX TO PROFESSIONAL PARTNERSHIP AGREEMENT
Page
ARTICLE I: Partnership .................................................................................::...............:..... 1
ARTICLE II: Business Purpose .............................................................................................. 2
ARTICLE III: Term ........................:..................................................................................... 2
ARTICLE IV: Partnership Interest and Capital
Section 4.01. Partnership Interest ................................................................................ 2
Section 4.02. Capital Contribution ................................................................................ 2
Section 4.03. Capital Accounts .................................................................................... 2
Section 4.04. Partner's Income Account ...................................................................... 3
ARTICLE V: Profits and Losses of the Partnership
Section 5.01. Participation of the Partners ...:............................................................... 3
Section 5.02. Periodic Draws ...................................................................................... 3
ARTICLE VI: Duties of Partners
Section 6.01. Duties .................................................................................................... 4
Section 6.02. Paid Time Off ......................................................................................... 4
Section 6.03. Continuing Dental Education ................................................................. 4
Section 6.04. Partner's Responsibility ......................................................................... 4
ARTICLE VII: Partnership Operation
Section 7.01. Office of the Partnership ...................................................................... 5
Section 7.02. Tangible Practice Assets ....................................................................... 5
Section 7.03. Fiscal Year/Accounting .......................................................................... 5
Section 7.04. Books and Records ............................................................................... 5
Section 7.05. Bank Accounts ....................................................................................... 5
Section 7.06. Charges/Professional Services .............................................................. 5
Section 7.07. Obligations of Partnership ................................................. .................
.... 6
Section 7.08. Voting .................................................................................................... 6
Section 7.09. Policy/Disagreement .............................................................................. 6
Section 7.10. Professional Liability Insurance ............................................................. 7
Section 7.11. Disability Insurance ................................................................................ 7
Section 7.12. Tax Partner ............................................................................................ 7
ARTICLE VIII: Termination of Partnership
Section 8.01. Voluntary Termination ............................................................................ 7
Section 8.02. Voluntary WithdrawaUTermination ......................................................... 7
Section 8.03. Withdrawal/Disability .............................................................................. 9
Section 8.04. Termination of Partnership by Death ..................................................... 10
Section 8.05. Purchase Price/Terms of Payment ........................................................ 11
Section 8.06. Covenant Not to Compete ..................................................................... 12
Section 8.07. Liquidated DamagesNiolation of Covenant Not to Compete .................. 14
Section 8.08. Termination/Licensure and Related Matters .......................................... 14
01200&00001/2.4.00/JRD/SR/131256.1
ARTICLE IX: Notice ..............:............................................................................................... 15
ARTICLE X: Invalidity ............................................................................................................ 15
ARTICLE XI: Additional Partners ............................................................. .................. 15
ARTICLE XII: Miscellaneous '
Section ,12.01. Life Insurance Premiums/Special Allocationt ................:........................ 16
Section 12.02. Sauve's Employment/Pastucka's Existing Dental Practice ..................... 16
ARTICLE XIII: Entire Agreement and Modification .............................................................. 16
01200 &00001 /2.4.00/) RD/S R/131256.1
PROFESSIONAL PARTNERSHIP AGREEMENT
THIS PROFESSIONAL PARTNERSHIP AGREEMENT ("Partnership Agreement'), made and
entered into this 4th day of February, 2000, effective for all purposes as of February 1, 2000, by and
between MARTIN J. PASTUCICA, D.D.S., (hereinafter called "Pastucka") and JAMES R. SAUVE, D.M.D.,
(hereafter called "Sauve"). Pastucka and Sauve are sometimes, individually, referred to as "Partner" and
collectively, as "Partners."
NOW, THEREFORE, for and in consideration of the mutual undertakings contained herein, and for
other good and valuable consideration, the receipt .and sufficiency of which is hereby mutually
acknowledged, Pastucka and Sauve, each intending to be legally bound, agree as follows:
ARTICLE I
Partnership
The partnership ("Partnership") is hereby created as a limited liability partnership by, Pastucka and
Sauve under the name of "Pastucka &Sauve Dental Associates, LLP" or such other name as the
Partnership may from time to time adopt. The Partnership shall exist under and be governed by the laws of
the Commonwealth of Pennsylvania, including without limitation the Uniform Partnership Act as adopted in
the Commonwealth of Pennsylvania. This Partnership shall be a partnership only for the purposes specified
in Article II and this Partnership Agreement shall not be deemed to create a general partnership between
Pastucka and Sauve with respect to any activities whatsoever, other than the activities within the business
purpose of the Partnership as specified in Article II. No Partner shall have the right or power to bind the
Partnership or any other Partner except as to the matter within the business purpose of the Partnership.
The Partnership and the Partners shall not be responsible or liable for any indebtedness or obligation of the
other Partner except such indebtedness or obligation incurred pursuant to and is limited by the terms of this
Partnership Agreement.
1
01200&00001/2.4.00/JRD/SRh 31256.1
ARTICLE II
Business Purpose
The purpose of-this Partnership is to engage and to continue to engage in the professional practice
of general dentistry at 6103 Carlisle Pike, Mechanicsburg, Pennsylvania, for the mutual production, of income
and profit. The Partnership shall not engage in any other business.
ARTICLE III
Term
The term of this Partnership shall begin as of February 1, 2000 and shall continue until dissolved or
terminated by either Partner upon one hundred eighty (180) calendar days prior to written notice delivered to
the other Partner in person or by certified mail, or as otherwise herein set forth.
ARTICLE IV
Partnership Interest and Capital
-4.01. Partnership Interest. Pastucka'S interest in the Partnership is fifty (50%) percent and
Sauve's interest in the Partnership is fifty (50%) percent.
4.02. Capital Contribution. Each Partner has contributed cash and assets to the capital of the
Partnership. The amount of each Partner's initial capital contribution is set forth below:
Partner Initial Capital Contribution
Pastucka ~ $100.00
Sauve $100.00
4.03. Capital Accounts. Individual capital accounts shall be maintained for each Partner. The
capital of each Partner shall consist of the amount of the Partner's capital contribution set forth in Section
4.02 and shall be increased by (1) additional capital contributions, and (2) any credit balances transferred
from a Partner's income account to the Partner's capital account; it shall be decreased by (a) distributions
and reductions of the Partnership capital and (b) the Partner's share of Partnership losses if charged to
2
012008-00001 /2.4.00/J RD/SR/131256.1
capital accounts of the Partners. The capital accounts of the Partners shall be maintained in proportion to
their Partnership interest in the profits and losses of the Partnership. Any additional capital contributions that
the Partners deem necessary for the operation of the Partnership shall be .contributed by the Partners in
proportion to their respective Partnership interest in the profits and losses of the Partnership. A Partner shall
not be entitled to interest on the Partner's capital contribution or to withdraw any part of the Partner's capital
account or to receive any distribution from the Partnership except as specifically provided herein or upon the
unanimous vote of the Partners.
4.04. Partner's Income Account. Individual income accounts shall be maintained for each
Partner. All withdrawals by a Partner shall be charged to the Partner's income account. Withdrawals during
each year shall -be limited to such amount as the Partners, by unanimous vote, shall determine from time to
time. Each Partner's share of the Partnership's net losses shall be charged to the Partner's income account
unless the Partners, by unanimous vote, agree to charge such losses to the capital accounts. of the Partners.
ARTICLE V
Profits and Losses of the Partnership
5.01. Participation of the Partners. The participation of the Partners in the net profits and losses
of the Partnership shall be in the following basis:
Pastucka 50%
Sauve 50%
The allocation of the net profits and losses of the Partnership, set forth above, shall be effective as of
February 1, 2000.
5.02. Periodic Draws. No salary shall be payable by the Partnership to either Partner.
Notwithstanding the allocation of each Partner's interest in the net profits and losses of the Partnership, the
Partners shall be compensated on an incentive basis. Specifically, each Partner shall receive forty-five
(45%) percent of the patient revenues collected by the Partnership for dental services provided by each
Partner to the Partnership's patients. The incentive compensation shall be paid, from time to time, as the
3
012008-00001 /2.4.00/J RD/S R/131256.1
Partners shall mutually agree. Any net profits of the Partnership after payment to each Partner of the
incentive compensation shall be distributed on the basis of each Partner's Partnership interest and any
portion of the profits not drawn or distributed by either Partner may be drawn at a later time or~permitted to
remain and accumulate in such Partner's account. Notwithstanding the distribution of a portion of the
Partnership's profits based on -the incentive compensation for distribution as described in this Section 5.02,
losses of the Partnership shall be allocated to each Partner on the basis described in Section 5.01. Subject
to Section 4.04, the Partners may withdraw every month a sum against their respective share of profits, as
cash income available, after provision for expenses, may permit. Any share of profits not drawn by either
Partner may be .drawn at a later time or permitted to remain and accumulate in such Partner's income
account. In the event that periodic draws of either Partner shall exceed his share of the net profits, his
subsequent periodic draws shall be reduced until such time as the overdraw has been paid.
ARTICLE VI
Duties of Partners
6.01. Duties. Each Partner shall devote his best efforts to serving professionally the Partnership.
and its .patients. Both Partners will devote such time and energy to the practice of the Partnership at the
Partnership practice site on such schedule as shall be mutually agreeable by the Partners.
6.02. Paid Time Off. Each Partner shall be entitled to four (4) weeks (four [4] days per workweek)
of paid time off per calendar year. Paid time off shall not be accumulated. Paid time off shall be used by
each Partner for vacation or any other purpose, including, but not limited to, absences from work as a result
of illness or injury or other reason.
6.03. Continuing Dental Education. Each Partner shall be entitled to four (4) work days each
calendar year for continuing dental education seminars or courses and other educational purposes related to
the practice of dentistry provided, however, that the aggregate cost, on a calendar year basis, shall not
exceed Three Thousand ($3,000.00) Dollars for each Partner.
6.04. Partner's Responsibility. Each Partner shall in all respects act and perform his professional
dental services with the highest dental standards and traditions, and each Partner will in all respects further
such relationships with all patients as will reflect the highest professional standards and requirements.
4
I 012008-00001 /2.4.00/J RD/SR/131256.1
ARTICLE VII
Partnership Operation
7.01.. Office of .the Partnership. The office of the Partnership shall be 6103 Carlisle Pike,
Mechanicsburg, Pennsylvania and at such other location as shall be agreed upon.
7.02. Tangible Practice Assets. The dental equipment, instruments and supplies, the office
furniture, fixtures and equipment, and all dental files and patient records located at the practice site or
otherwise shall be the property of the Partnership. Any replacements or acquisition of new dental
equipment, office furniture, fixtures and equipment shall be paid for by the Partnership and shall be-owned
by the Partnership.
7.03. Fiscal YearlAccounting. The fiscal year of the Partnership shall be the calendar year. A
complete accounting of the Partnership affairs shall be rendered by the Partnership's accountants as of the
close of ..business on December 31 of each year.
7.04. Books and Records. Complete accounts of all transactions, fees and earnings of the
Partnership shall be kept in books of account, and each Partner shall cause to be entered therein a full and
accurate account of all transactions in behalf of the Partnership. The books shall be reviewed annually by
the Partnership's accountants.
7.05. Bank Accounts. Bank accounts in the name of the Partnership shall be maintained at Allfirst
Bank or other financial institution as is mutually agreed by the Partners and all money of the Partnership,
when received, shall be deposited in said bank account or accounts and all checks drawn thereon shall be
signed by either Partner.
7.06. Charges/Professional Services. Each Partner shall charge reasonably for all professional
services rendered by the Partner, following generally the policies of Pastucka as to fees and charges.
However, each Partner may provide dental service without charge to any member of his family, any relative,
or any person under a circumstance which such Partner may deem sufficient. All fees of both Partners shall
belong to the Partnership. -
5
012008-00001 /2.4.00/J RD/S R/131256.1
7.07. Obligations of Partnership. Except in case of a practice emergency, any transaction
involving an outlay or liability of the Partnership in excess of Three Thousand ($3,000.00) Dollars shall be
entered into on behalf of the Partnership with the consent of both Partners.
7.08. Voting. Each Partner shall be entitled to one (1) vote. Action by the Partnership shall require
the affirmative vote or approval of both Partners.
7.09. Policy/Disagreement. The Partners shall make every effort to achieve agreement in matters
involving operating policies, as well as other matters relating to Partnership operations. If Pastucka and
Sauve cannot resolve any matter pertaining to operating policies or other matter relating to Partnership
operations then, in that event, Pastucka and Sauve shall have the right, provided both agree, to request
mediation by submitting the matter in dispute to the Partnership's accountant or attorney. Both Pastucka
and Sauve shall have the right to submit their respective position with respect to the dispute to the
Partnership's accountant or attorney. The Partnership's accountant or attorney shall, within fifteen (15)
calendar days after tF~e matter is submitted to the Partnership's accountant or attomey make a
recommendation to Pastucka and Sauve as to the resolution of the disputed issue. The Partnership shall
pay the cost of mediation.
If the matter is not submitted to mediation (pursuant to the above paragraph) or if the matter is
submitted to mediation but either Pastucka or Sauve do not accept the recommendation of the Partnership's
accountant or attorney, then either Partner shall have the right to request that the matter be submitted to
arbitration. The matter shall be submitted to an independent, neutral arbitrator for disposition. Pastucka and
Sauve shall select the independent, neutral arbitrator. If Pastucka and Sauve cannot agree as to the
independent, neutral arbitrator, then each Partner shall place the name of a independent, neutral arbitrator
on an identical slip of paper and said slip of paper shall be placed in a container. An independent third party
shall select one (1) slip of paper from the container and the name of the arbitrator that appears on said slip
of paper shall be the designated independent, neutral arbitrator. The decision of the arbitrators shall be
binding. The Partnership shall pay the cost of the arbitration.
6
01200&00001 /2.4.00/JRD/SR/131256.1
7.10. Professional Liability Insurance. The Partnership shall carry the Partners professional
liability insurance, and such other forms of insurance and in such amounts, as may be desirable and in the
best interest of the Partnership as agreed to by the Partners.
7.11. Disability Insurance. Each Partner shall purchase and pay his own disability insurance,
unless otherwise agreed by the Partners. Copies of each Partner's disability insurance policy shall be
delivered to the Partnership. Partners shall, if feasible, maintain comparable disability insurance benefits.
7.12. Tax Partner. Pastucka is designated as the Tax Partner. Provided, however, Pastucka may,
in writing, designate Sauve as the Tax Partner.
ARTICLE VIII
Termination of Partnership
8.01. Voluntary Termination. The Partnership may be dissolved at anytime by unanimous vote of
the Partners, in which event the Partners shall proceed with reasonable promptness to sell the Partnership
assets and to liquidate the business of the Partnership. Upon such voluntary termination, the assets of the
Partnership shall be used and distributed in the following order: (1) to pay or provide for the payment of all
Partnership liabilities and the liquidating expenses and obligations; (2) in proportion to .the respective
Partnership interest, to discharge the balance of income accounts to the Partners; (3) in proportion to the
Partnership interest, to discharge the balance of the capital accounts of the Partners; and (4) any excess to
be distributed to each Partner in accordance with each Partner's Partnership interest.
8.02. Voluntary Withdrawal/Retirement. Either Partner may withdraw from the Partnership for
any reason or cause, and terminate the Partnership at anytime upon one hundred eighty (180) calendar
days prior written notice to the other Partner, delivered in person or by certified mail. At the end of the one
hundred eighty (180) calendar day notice period, or sooner, if mutually agreed, such withdrawal shall
become effective and the Partnership shall be deemed terminated and dissolved, unless either Partner shall
elect to purchase the other Partner's Partnership interest. In the event that either Partner shall die during
the notice period, the provisions relating to death, as hereinafter set forth, shall take precedence and apply.
7
012008-00001 /2.4.00/) RD/S R/131256.1
Within one hundred twenty (120) calendar days after receipt of a Partner's notice of withdrawal, the
other Partner shall have the right (not obligation) to purchase the withdrawing Partner's interest in the
Partnership for the purchase price and under the terms and conditions set forth in Section 8.05.
If the non-withdrawing Partner does not elect to purchase the withdrawing Partner's Partnership
interest, then the Partnership will terminate pursuant to this Section 8.02, an accounting shall be made by
the Partnership's accountants of all assets and liabilities of the Partnership, and the debts and obligations of
the Partnership shall be paid and discharged, the respective capital accounts shall be adjusted and
distributed, and the assets then remaining shall be divided between the Partners, in accordance with their
respective interest in the Partnership at the time of such distribution. To the extent that any billings and
unpaid fees are included in the remaining assets, the same shall be subject to division and distribution
monthly, following collection and receipt of such monies.
If a Partner purchases the interest of the other Partner pursuant to this Section 8.02, then all dental
records (patient records) shall be retained by the purchasing Partner and shall remain the property of the
purchasing Partner, subject to the right of a patient to request a transfer of said record to theother Partner or
any other dentist.
If the Partnership is terminated and dissolved pursuant to this Section 8.02, then, in that event, there
shall be no restriction with regard to the right of either Partner to practice dentistry in any geographic area or
for any specified period of time. Each Partner shall be free to treat any and all patients who may wish to
continue dental care with either Partner. If either Partner purchases the Partnership interest of the other
Partner pursuant to this Section 8.02, then the provisions of Section 8.05 shall be applicable.
If Pastucka elects to retire, then the terms and conditions of this Section 8.02 shall be applicable. In
other words, if Pastucka shall provide one hundred eighty (180) calendar days prior written notice of
intention to retire and Sauve shall have the right, within one hundred twenty (120) calendar days after receipt
of his notice of retirement to purchase Pastucka's Partnership interest in the Partnership for-the purchase
price and under the terms and conditions set forth in Section 8.05. If Sauve does not elect to purchase
Pastucka's Partnership interest, then the Partnership shall terminate pursuant to the provisions of this
Section 8.02 as if Pastucka had elected to voluntarily withdraw as a Partner. Pastucka and Sauve may, by
mutual agreement, agree upon a gradual retirement by Pastucka, modify the purchase price for Pastucka's
8
012008-00001 /2.4.00/) RD/S R/131256.1
Partnership interest in the event that Pastucka elects to retire or otherwise modify the terms and conditions
of this Section 8.02 in the event that Pastucka desires to retire. Notwithstanding the preceding sentence, if
Pastucka and Sauve do not agree to some modified arrangement pertaining to Pastucka's retirement then
the provisions of this Section 8.02 shall be applicable.
8.03. Withdrawal/Disability. In the event that a Partner shall become disabled (as hereinafter
defined) and remains disabled for a period of twelve (12) consecutive months, or a total of twelve (12)
months out of eighteen (18) consecutive months, the Partner shall be considered to have withdrawn from the
Partnership on the first day of the month after said twelve (12) month period occurs, upon the terms and
conditions hereinafter set forth.
A Partner shall be considered disabled when the Partner shall sustain such physical or mental
illness, drug or alcohol addiction or abuse, injury or incapacity as to prevent the Partner from substantially
performing the duties of the Partner usually and normally performed on behalf of the Partnership. If there
shall be any disagreement as to whether a Partner is disabled or as to the date of disability, the Partnership
shall appoint a medical doctor who shall determine whether the Partner is disabled, and the date upon which
such disability began, and such determination shall be binding upon the Partnership and the Partner. The
Partnership shall pay the expense incurred in arriving at such determination. Notwithstanding the foregoing,
a Partner shall be conclusively presumed to have become disabled when such determination is made by any
insurer providing disability insurance coverage to such Partner.
During the first ninety (90) calendar days of disability, the disabled Partner shall continue to receive
his incentive based compensation and shall continue to receive his distributive share of the Partnership
profits (and losses). From the ninety-first (91St) calendar day through the one hundred eightieth (180th)
calendar day of disability, the disabled Partner shall continue to receive his incentive based income and, as
applicable, his share of the Partnership profits (and losses) less any disability insurance benefit paid to the
disabled Partner. During any subsequent- months of disability, the disabled Partner shall receive, if
applicable, his incentive based compensation and shall receive one-half (1%2) of his distributive share of the
Partnership profits (and losses); the distributive share of the non-disabled Partner shall be adjusted
accordingly. At the end of the twelfth (12tf') consecutive month or the twelfth (12th) month out of the eighteen
(18) consecutive months of disability, the disabled Partner shall be considered to have withdrawn from the
9
012008-00001/2.4.00/J RD/S R/ 131256.1
Partnership and shall be paid the purchase price for the disabled Partner's Partnership interest in
accordance with the provisions of Section 8.05.
If prior to either twelve (12) month periods described in the paragraph above, a Partner's disability
shall terminate and the Partner again is able to and does in fact perform the duties usually and normally
performed on behalf of the Partnership, but within one (1) year following termination of such disability, such
Partner shall again become disabled from the same disability, then the subsequent disability shall be
considered as a continuation of the prior disability and the provisions of this Section 8.03 shall take effect as ~~~
though the subsequent period of disability were a continuation of the prior period of disability.
8.04. Termination of Partnership by Death. The Partnership shall be terminated and dissolved
upon the death of either Partner. Within one hundred twenty (120) calendar days following the death of the
Partner, the surviving Partner shall purchase from the estate of the deceased Partner, and the executors or
administrators of the estate of the deceased Partner shall sell to the surviving Partner, the deceased
Partner's Partnership interest in the Partnership for the purchase price and under the terms set forth in
Section 8.05.
On the death of either Partner, the proceeds of any life insurance policy or policies that are owned by
the surviving Partner on the life of the deceased Partner will be paid by the surviving. Partner to the
executors or administrators of the estate of the deceased Partner. The proceeds shall be applied towards
the payment of the purchase price for the deceased Partner's interest in the Partnership. If the proceeds
from such policy or policies shall exceed the purchase price, then the balance shall be retained by the
surviving Partner. If the purchase price for the Partnership interest exceeds the proceeds of such life
insurance policy or policies, the balance of the purchase price shall be paid by the surviving Partner to the
estate of the deceased Partner as set forth in Section 8.05.
The death benefit or benefits payable with respect to the policy or policies acquired by each Partner
shall be subject to the agreement of both Partners. All life insurance policies acquired pursuant to this
Section 8.04 shall be term policies unless otherwise agreed by the Partners.
10
01200&00001 /2.4.00/) R D/S R/131256.1
All profits earned by the Partnership business after the date of the deceased Partner's death shall
belong to the surviving Partner, and the estate of the deceased Partner shall have no right or claim to those
profits or any right to interest instead of those profits.
Each Partner shall be the owner of the insurance policy or policies insuring the life of the other
Partner, shall hold full legal title to the insurance policy, and shall have the exclusive right to exercise any'
rights, options or privileges provided for in the policy or policies or permitted the insurance company issuing
the policy or policies with respect to said policy. Each Partner agrees, however, not to exercise any of these
rights, option or privileges without giving the other Partner at least sixty (60) calendar days' notice. Each
Partner agrees to pay as they become due all premiums on the policy owned by him and to give proof of
payment of each premium to the other insured Partner within twenty (20) calendar days after the premium
has become due. If any premium is not paid within the time period, the insured Partner shall have the right
to pay the premium and to be reimbursed for such premium by the owner of the policy. The insurance
company issuing the policy is authorized and directed to give the insured Partner any information the insured
Partnermay request in writing pertaining to the status of the insurance policy insuring his life.
On the death of either Partner, the ownership of any policy owned by the deceased Partner on the
life of the other Partner shall pass to the executors or administrators of the deceased Partner's estate. On
the death of either Partner, the surviving Partner shall have the right to purchase from the estate of the
deceased Partner, and the executors or administrators of the estate of the deceased Partner shall sell to the
surviving Partner, any or all policies owned by the deceased Partner insuring the life of the surviving Partner
for a purchase price and under the terms and conditions agreeable to the surviving Partner and the
executors or administrators of the estate of the deceased Partner. The surviving Partner's option to
purchase said life insurance policy or policies shall expire one hundred twenty (120) calendar days after the
deceased Partner's date of death.
8.05. Purchase Pricefl'erms of Payment. The purchase price for a Partner's Partnership interest
shall be an amount equal to (i) twenty-five (25%) percent of the total patient revenue received for the prior
twelve (12) consecutive months; plus (ii) the then current balance of the accounts receivable; plus (iii) the
book value of the tangible assets of the Partnership; less the total Partnership indebtedness; multiplied by
the Partner's Partnership interest. With respect to the balance of the accounts receivable, only aged
accounts receivable of two hundred seventy (270) calendar days or less shall be included. The book value
11
012008-00001/2.4.00/JRD/SR/131256.1
of the tangible assets of the Partnership shall be determined by the Partnership's accountant in accordance
with generally accepted accounting practices.
Payment of the purchase price shall be made in sixty (60) equal consecutive monthly installments,
together with interest at the applicable federal rate, with the first monthly installment to be paid on the first
day of the second month following the month in which death, retirement, disability or withdrawal occurs.
The unpaid balance of the purchase price shall be secured by a promissory note from the purchasing
Partner in favor of the selling Partner or the estate of the deceased Partner, as applicable. The purchasing
Partner shall have the right to prepay said obligation, in whole or in part, without penalty. In the event that a
Partner dies, the life insurance policy proceeds shall be applied, on a lump sum basis, towards the purchase
price and the balance, if any, may be paid by the purchasing Partner in installments over sixty (60)
consecutive months. If the life insurance proceeds exceed the purchase price, then the balance of the life
insurance proceeds as set forth in Section 8.04 shall be retained by the surviving Partner.
8.06. Covenant Not to Compete. If either Pastucka or Sauve shall become disabled and sell his ii
Partnership interest to ~ the other Partner pursuant to Section 8.04, or if either Pastucka or Sauve shall
withdraw and sell his Partnership interest to the other Partner pursuant to Section 8.02 or if Pastucka shall
retire and sell his Partnership interest to Sauve pursuant to Section 8.02, then, the disabled Partner,
withdrawing Partner or retiring Partner, as applicable, shall not for a period of twenty-four (24) consecutive
calendar months from the effective date of withdrawal (by disability), effective date of voluntary withdrawal or
effective date of retirement, as applicable, practice dentistry either as an employee, sole proprietor, partner
or otherwise or, directly or indirectly, own, manage, operate, join, control, finance or participate in the
ownership, management, operation, control or financing of, or be an officer, director, partner, principal,
member, agent, representative, consultant or otherwise, practice dentistry or be affiliated with a sole
practitioner or entity that practices dentistry, within a radius of 10 miles from any Partnership practice site in
existence as of the effective date of such disability, withdrawal or retirement. If either Partner (then former
Partner) shall during the twenty-four (24) consecutive month period violate the terms and conditions of this
Section 8.06, the restricted period set forth herein shall be extended by a period of time equal to the number
of days, if any, during which the Partner (then former Partner) is in violation of the provisions of this Section
8.06.
12
012008-00001 /2.4.00/J R D/S R/131256.1
The Partners acknowledge and agree that the covenants and restrictions contained in this Section
8.06 relate to matters which are of special, unique and extraordinary importance to the Partnership (and the
remaining Partner) and without such restrictions and covenants, both Partners would be unwilling to enter
into this Partnership Agreement or to pay to either Partner, upon withdrawal or retirement, as applicable, the ~'
purchase price for such Partner's Partnership interest, and that the violation of any of the terms of such
restricted .covenant would result in :irreparable injury to the Partnership and the remaining Partner.
Accordingly, the remaining Partner or Partnership, as applicable, shall be entitled to preliminary and
permanent injunctive relief for a violation or threatened violation of any such restrictions without having to
prove actual damages or to post bond, and such Partner or Partnership shall be entitled to an equitable
accounting of all earnings, profits or other benefits arising out of such violation, which rights shall be
cumulative and "in addition to any other rights and remedies to which such Partner or Partnership may be
entitled in law or equity. Each Partner hereby waives any objections on the ground of improper jurisdiction
or venue to the commencement of any such action in the Commonwealth of Pennsylvania.. Each Partner
acknowledges that the terms of this Partnership Agreement, and specifically the terms of this Section 8.06,
have been negotiated at "arm's length." Each Partner acknowledges, by the execution of this Partnership
Agreement, that each Partner has read the restrictions contained herein, has had an opportunity to review
the restrictions set forth herein with legal counsel, and understands to the fullest extent and implication the
terms of this Section 8.06 and acknowledges and agrees to be bound thereby.
It is the intent of both Partners that the provisions of this Section 8.06 be enforceable to the fullest
extent permitted by law or equity. If, however, any portion of the restrictive covenants is held to be
unreasonable in any proceeding, then the period of time, the geographic area or other restrictions shall be
reduced by the elimination or reduction of such portion thereof, so that such restriction may be enforced in
the manner that is adjudicated to be reasonable. Further, each Partner agrees that in the event of a
violation by either Partner (following that Partner's retirement or withdrawal, as applicable) that in addition to
any other remedy provided to the non-violating Partner, the balance of the purchase price (determined as of
the date of the violation of any restrictions set forth in this Section 8.06) shall not be payable to the violating
Partner (then former Partner) and that any amount of the purchase price paid by the non-violating Partner to
the violating Partner shall be in full and complete satisfaction of the non-violating Partner's obligation with
respect to payment of the purchase price of the violating Partner as set forth in this Partnership Agreement.
13
012008-00001 /2.4.00/JRD/SR/131256.1
Notwithstanding the provisions of this Section 8.06, the continued practice of dentistry by Pastucka at
Pastucka's sole proprietorship dental practice located at 1430 Bridge Street, New Cumberland,
Pennsylvania, shall not be deemed a violation of this restrictive covenant in_ the event that Pastucka shall
become disabled, sell his Partnership interest to Sauve; withdraw or retire. Sauve's continued employment
by Pastucka and Sauve's continued practice of dentistry at the current dental practice at 1430 Bridge Street,
New Cumberland; Pennsylvania, .shall not be deemed a violation of the provisions of this Section 8.06, and
Sauve shall be permitted to continue his practice (as an employee of Pastucka) at the New Cumberland
practice site notwithstanding that Sauve shall become disabled, sell his Partnership interest to Pastucka or
shall elect to withdraw as a Partner.
8.07. Liquidated DamagesNiolation of Covenant Not to Compete. Either Partner shall have
the right, in connection with the voluntary withdrawal of the Partner from the Partnership, to elect to waive
any and all sums payable to the withdrawing Partner in connection with said such withdrawal as provided in
this Partnership Agreement in lieu of being bound by the terms and conditions of the covenant not to
compete described in Section 8.06. If the withdrawing Partner elects to waive the entire purchase price for
the withdrawing Partner's Partnership interest pursuant to this Section 8.07, then such election shall be in
writing and shall be provided to the other Partner not less than ninety (90) calendar days prior to the
effective date of such withdrawal. The election, once submitted in writing by the withdrawing Partner, shall
be irrevocable.
8.08. Termination/Licensure and Related Matters. If either Pastucka's or Sauve's professional
license shall be revoked, suspended or restricted and said professional license is not reinstated or restriction
removed within a ninety (90) calendar day period then the other Partner shall have the right, at that Partner's
option, to terminate the Partnership by notice to the Partner whose license has been revoked, suspended or
restricted and to purchase that Partner's Partnership interest as if the Partner had withdrawn provided,
however, that the purchase price, as set forth in Section 8.05, shall be reduced by forty (40%) percent.
Payment of the reduced purchase price shall be under the terms and conditions set forth in Section 8.05. if
either Pastucka's or Sauve's professional license shall be revoked, suspended or restricted, or if Pastucka or
Sauve has notice of any such possible revocation, suspension or restriction with respect to the professional
license, the right of voluntary withdrawal pursuant to Section 8.02 shall not be applicable and neither
Pastucka nor Sauve, as applicable, shall have the right to withdraw from the date that Pastucka or Sauve, as
14
012008-00001 /2.4.00/J R D/S R! 131256.1
applicable, has received notice of any such possible revocation, suspension or restriction through the period
of time in which the other Partner has the right to terminate the Partnership Agreement by notice.
Article IX
Notice
All notices shall be given by either Partner to the other and shall be delivered in writing at the
office of the Partnership and to the other Partner by certified mail at the following addresses:
Pastucka: Martin J. Pastucka, D.D.S.
" 5261 Stathmore Drive
Mechanicsburg, PA 17055
Sauve: James R. Sauve, D.M.D.
6383 Stephen's Crossing
Mechanicsburg, PA 17055
Either Partner may change the address at which notice is to be given by providing notice in
accordance with the provisions of this Section.
ARTICLE X
Invalidity
In the event that any provision of this Partnership Agreement shall be held unenforceable, the same
shall not affect the remaining provisions of this Partnership Agreement.
ARTICLE XI
Additional Partners
No additional partners shall be admitted into the Partnership unless agreed by both Partners.
15
012008-00001 /2.4.00/) RD/S R/131256.1
ARTICLE XII
Miscellaneous
12.01. Life Insurance PremiumslSpecial Allocation. As set forth 'in Section 8.04, each Partner
has or intends to purchase a life insurance policy or policies on the life of the other Partner to fund, in whole
or in part, the payment of the purchase prjce to the estate of the deceased Partner in the event of the death
of the Partner. Each Partner is required, pursuant to Section 8.04, to pay the premiums on account of said
policy or policies. Because of the difference in age of the Partners, the total premiums paid by both Partners
for said insurance policies shall be combined and each Partner will be responsible for one-half (1/2) of said
aggregate premiums. The adjustment shall be made by a special allocation of the net distributable profit.
The death benefit payable in connection with each policy shall be subject to the approval of both Partners.
12.02. Sauve's Employment/Pastucka's Existing Dental Practice. Sauve is currently employed
by Pastucka in Pastucka's dental practice (sole proprietorship) located at 1430 Bridge Street, New
Cumberland, Pennsylvania. Nothing set forth in this Partnership Agreement shall be construed to change or
modify the current employer/employee relationship between Sauve and Pastucka, notwithstanding that
Sauve is a Partner pursuant to this Partnership Agreement with respect to the general dentist practice to be
conducted by Pastucka and Sauve as Partners at 6103 Carlisle Pike, Mechanicsburg, Pennsylvania, or any
other practice site of the Partnership as mutually agreed by and between Pastucka and Sauve.
ARTICLE XIII
Entire Agreement and Modification
This Partnership Agreement represents the entire agreement and understanding of the Partners, and
no oral agreements exist~except as set forth herein. No modification of this Partnership Agreement shall be
valid or binding unless,in writing and signed by the Partners.
[This space intentionally left blank]
16
I 012008-00001/2.4.00/J RD/S R/ 131256.1
IN WITNESS WHEREOF, the Partners have caused this Partnership Agreement to be signed and
delivered, in duplicate, as of the day and year first above written. .
Pastucka: i
Martin J. Pa~tucka, D.D.S.
Sauve:
~''~
Ja es R. Sauve, D.M. .
17
.`
93/27/2007 16:57 7172341099
STEVENS & LEE HSBOH
James R. Sauve, DMD
5904 Westover Drive
Mechanicsburg, PA 17050
Match 27, 2007
Via Certified Mail
Martin J. Pastucka, D.D.S.
5261 Strathmore Drive
Mechanicsburg, PA 17055
Martin J. Pastucka, D.D.S.
c/o Sauve & Pastucka. Dental Associates, LLP
6103 Carlisle Pike
Mechanicsburg, PA 17050
Re: Pastucka &Sauve Dental Associates, LLP (the "Partnership'
Dear Marty:
PAGE 02/02
I amt wXiti~gg to provide notice of my withdrawal from the Partnership pursuant to Section
8.02 of our Professional Partnership Agceemerlt, dated February 4, 2000, effective 180 days from
the date of this notice (September 23, 2007).
xn addition, I am providing notice pursuant to Section 8.07 of my election to waive the
purchase price for my Partnership interest should you elect to purchase my Partnership Jntexest
im accordamce wxtlt the provisions of the Partnership Agreement.
I am hopeful that we ca~a comclnde the dissolution ofthe Partr~ersbip in a courteous and
respectful manner'aad I am committed to doing so. with your cooperation.
Sincerely, .
'~~
James R, Sauve, DMD
TRS/kdd
cc: Samuel L. Aodes, Esquire (via facsimile (7i7) 761-143
Richard L. Grubb, Esduire
5G1710878~ l /f 01341.00001
$ I
MARTIN J. PASTUCI<A, DDS, and iN THE COURT OF COMMON PLEAS OF
PASTUCKA &SAUVE DENTAL :CUMBERLAND COUNTY, PENNSYLVANIA
ASSOCIATES, LLP
PLAINTIFFS
V.
NO. 07-3598 CIVIL
JAMES R. SAUVE, DMD,
DEFENDANT :CIVIL ACTION -EQUITY
IN RE: REQUEST FOR CONTINUANCE
ORDER OF COURT
AND NOW, this 20th day of June, 2007, upon consideration of the request by
Counsel for the Defendant for a continuance of the hearing on the Motion for Preliminary
Injunction,
IT IS HEREBY ORDERED AND DIRECTED that the hearing will be held on
Monday, July 23, 2007 at 2:15 p.m. in Courtroom No. 5 of the Cumberland County
Courthouse, Carlisle, Pennsylvania.
~amuel Andes, Esquire
Attorney for Plaintiffs
~rk Bradshaw, Esquire
Attorney for Defendant
bas
By the Court,
~~
M. L. Ebert, Jr., J.
t ('~r'~
(~ I`4,
r ~ , ~{~
. i...
Martin J. Pastucka, DDS and Pastucka IN THE COURT OF COMMON PLEAS
& Sauve Dental Associates, LLP, CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs
CIVIL ACTION -EQUITY
v.
No. 07-3598
James R. Sauve, DMD,
Defendant
DEFENDANT'S ANSWER TO PLAINTIFFS'
MOTION FOR PRELIMINARY INJUNCTION
AND NOW comes Defendant, and makes the following Answer to Plaintiffs'
Motion for Preliminary Injunction, stating as follows:
1. Admitted, however, as set forth in Defendant's Preliminary Objections,
this action is fundamentally inappropriate and this dispute should be heard, if at all, in
arbitration. At a minimum, the Partnership itself is not a proper party in the absence of
Dr. Sauve's agreement that the action be filed.
2. Admitted. Defendant incorporates the responsive averments of paragraph
one as though set forth in full herein.
3. Denied. Dr. Sauve has acted properly and consistent with the Partnership
Agreement at all times. Dr. Pastucka erroneously believes that he, and only he, is entitled
to utilize Partnership assets, despite the fact that he is only a 50% Partner and despite the
fact that the Partnership Agreement specifically contemplates that a withdrawing Partner
may compete for Partnership patients so long as he has waived his otherwise existing
right to be paid 50% of the net worth of the Partnership. Otherwise stated, by waiving his
1
S L l 731687 v l/ 101341.00001
right to be paid, Dr. Sauve effectively purchased his right to compete. Upon information
and belief, Dr. Sauve's half of the net worth of the Partnership is worth in excess of one
hundred thousand dollars ($100,000). Through this action, Dr. Pastucka attempts to both
keep the entire value of the Partnership and to frustrate Dr. Sauve's ability to compete,
which is antithetical to the basis of the bargain as embodied in the Partnership
Agreement. Not only is Dr. Pastucka's position at odds with the parties' Agreement, it is
fundamentally unfair: the practice at issue is one which has been built over the years
through Dr. Sauve's efforts. For example, in 2006, out of gross revenues of $595,000,
Dr. Sauve was responsible for over $540,000, yet, under the parties' Agreement, Dr.
Sauve was compensated for only 45% of these services. The balance of Dr. Sauve's
revenues was paid to the Partnership, half of which is owned by Dr. Pastucka. Dr.
Pastucka, who works, at most, some 4 hours per week at the Partnership's office, chooses
to devote his professional time to his personal practice rather than the Partnership. It is
because Dr. Sauve has tired of Dr. Pastucka's freeloading that Dr. Sauve decided to
withdraw from the Partnership.
4. Denied. The only thing which is happening is that some patients have
indicated their desire to continue to seek services from Dr. Sauve once his new office
opens in September. This result is specifically contemplated under the Partnership
Agreement. This is, in no sense, "harm" cognizable at law, and is certainly not
irreparable. To the contrary, it is what the Partners agreed to. Plaintiffs can point to no
prohibition on Dr. Sauve's notification to his patients as to his future plans.
2
SLl 731687v 1/ 101341.00001
5. Denied. Again, the patient relationships do not "belong" to Dr. Pastucka.
These relationships would not belong to him (alone), under the Agreement, even if Dr.
Pastucka were to purchase Dr. Sauve's interest (which substantial payment Dr. Sauve has
waived). Instead, the Agreement expressly contemplates that patients will make their
own decisions as to the dentist they wish to see (See Agreement, §8.02). Contrary to
Dr. Pastucka's position, the patients are not "assets" to be divided or assigned against
their will.
6. Denied. Competition for patients is expressly contemplated and
authorized under the Partnership Agreement, particularly once Dr. Sauve waived
compensation for his share of the Partnership's assets upon withdrawal. Thus,
Defendant's "conduct" is not even actionable. It is specifically denied that Plaintiff has
"no opportunity to respond", particularly where Plaintiff, Dr. Pastucka has prepared and
shared with staff a notice to patients of his own, and where he has access to the same
patient information as Dr. Sauve. Byway of further answer the "election to acquire or
dissolve the partnership" is entirely irrelevant, and is a concern of Dr. Pastucka's alone,
having to do with whether he wishes to receive the Partnership's assets in cash or in kind.
Dr. Pastucka's "election" has nothing whatsoever to do with Dr. Sauve.
7. Denied. The status quo is that each party had the opportunity to forward
notifications as to their future plans to the affected patient base. If Dr. Pastucka had been
serious about maintaining the previous status quo, he could have sought relief prior to the
mailing of the notices, (which he threatened, but did not pursue, for reasons unknown to
Defendant.) It is denied that it is even possible to "restore" the prior status quo, and there
S L l 731687 v l/ 101341.00001
is no need to "implement a reasonable and fair method of dissolving the partnership"
inasmuch as the Partnership Agreement addresses the same, to the extent necessary.
Moreover, Dr. Sauve proposed a joint notice to patients which was "reasonable and fair"
and Dr. Pastucka obstinately refused to consider same.
8. Denied. As set forth herein, Dr. Sauve's conduct is consistent with the
Partnership Agreement, or, at an absolute minimum, is not prohibited by same. There is
no "misconduct" here. To the contrary, it is Dr. Pastucka who is and has been
misappropriating Partnership assets and diverting patients to his other offices which,
(unlike Dr. Sauve's planned office) are already open and can accommodate such patients.
Moreover, it is Dr. Pastucka who is attempting to both keep the entirety of the net worth
of the Partnership for himself, and also preclude Dr. Sauve from enjoying the contractual
right to compete for the patients for which Dr. Sauve has paid dearly.
9. Denied. This allegation betrays Dr. Pastucka's fundamental
misunderstanding of the legal relationships of these parties. The two partners are, until
September 23, 2007, the 'oint owners of the assets of the Partnership. Dr. Pastucka may
not speak for the Partnership, may not commence legal proceedings in the name of the
Partnership, and does not "own" the dental practice. Dr. Pastucka is accusing Dr. Sauve
of diverting and misappropriating that which (until September 23, 2007) continues to
belong, in part, to Dr. Sauve.
10. Denied. Defendant incorporates by reference the responsive averments of
paragraphs 1-9 herein as though set forth in full.
4
S L l 731687 v l/ 101341.00001
Date: June 26, 2007
Attorney I.D. #61975
Richard L. Grubb
Attorney I.D. #67127
17 North Second Street
16th Floor
Harrisburg, PA 17101
(717) 255-7357
(717) 234-1099 (Facsimile)
mdb@stevenslee.com
Attorneys for Defendant
SL 1 731687v 1 / 101341.00001
Respectfully submitted,
VERIFICATION
I, James R. Sauve, DMD, being duly affirmed according to law, depose and say
that the facts set forth in the foregoing Answer to Preliminary Injunction are true and correct to
the best of my knowledge, information and belief.
This Verification is made subject to the penalties of 18 Pa. C.S.A. §4904, relating
to unsworn falsification to authorities.
Dated: G/Z7/O ~ ~ 17~
Jam s R. Sauve, D
CERTIFICATE OF SERVICE
I, Mark D. Bradshaw, Esquire, hereby certify that I caused a true and correct copy
of the foregoing Answer to Motion for Preliminary Injunction to be served upon the following
persons via Facsimile and First Class United States Mail, postage prepaid, addressed as follows:
Samuel L. Andes, Esquire
P.O. Box 168
Lemoyne, PA 17043
717.761.143 5 (fax)
Date: June 26, 2007
6
S L l 7316 87 v l/ 101341.00001
~~
~
"'CJ 1 '~ ~ C...-
~-
X11'
{ .
~_ ,. -«~ ~ iT
~ ~
_.r,
i ;- ~
~.i ~~C.!
r1 ~
~ 1~r / +~r
MARTIN J. PASTUCKA, DDS, and PASTUCKA &
SAUVE DENTAL ASSOCIATES, LLP,
Plaintiffs
vs.
JAMES R. SAUVE, DMD,
Defendant
PRAECIPE
TO THE PROTHONOTARY:
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
FILE NO. 07-3598 CIVIL
CIVIL ACTION -EQUITY
Please withdraw, without prejudice, Plaintiffs' Petition for Preliminary Injunction filed in this matter
on 18 June 2007.
17 July 2007
~rrra>?f L. Andes v
Attorney for Plaintiffs
Supreme Court ID # 17225
525 North 12m Street
Lemoyne, Pa 17043
(717) 761-5361
3 "~'
~-~ ~
- -._. ~
~,-r ; .,
-C7 tTi
..... "?'J G
~ :m
Y
"L3 7 r't
-:.'t- ..'.,~
:Ti ~e
~
,,:'S -'1
~ ~?
{~ ~' w
Martin J. Pastucka, DDS and
Pastucka &Sauve Dental
Associates, LLP,
Plaintiffs
v.
James R. Sauve, DMD,
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY,
PENNSYLVANIA
CIVIL ACTION -EQUITY
No. 07-3598
Defendant
DEFENDANT'S PRELIMINARY OBJECTIONS TO PLAINTIFFS'
COMPLAINT IN THE NATURE OF A DEMURRER TO THE CLAIM OF
PASTUCKA & SAUVE DENTAL ASSOCIATES, LLP, AND
A MOTION TO COMPEL ARBITRATION WITH RESPECT TO THE CLAIM
OF MARTIN J. PASTUCKA, DDS
AND NOW comes Defendant, James R. Sauve, DMD, and makes the
following. preliminary objections to Plaintiff's complaint, stating in support thereof as
follows:
Motion to Compel Arbitration
1. Attached to Plaintiff s complaint as Exhibit "A" is a contract
labeled "Professional Partnership Agreement" (the "Agreement").
2. That Agreement, at Section 7.09, contains an express agreement to
arbitrate "any matter pertaining to operating policies or other matter relating to
partnership operations". Id.
3. The only mention of any potential for court involvement or of
either parties' ability to request injunctive relief which appears anywhere in the
Agreement is in Section 8.06, relating to enforcement of a certain covenant not to
compete. See Id.
07/24/07/SL 1 731650v 1 / 101341.00001
1
4. Plaintiff s Complaint affirmatively notes that the non-compete is
not at issue in this case. See Complaint, ¶ 10.
5. As a result, to the extent there is any merit whatsoever in
Plaintiffs' allegations (which is denied), the only forum contemplated under the
Agreement is arbitration. See Agreement, Section 7.09.
6. Pursuant to Pa. R. Civ. P. 1028 (a)(6) and 42 Pa. C.S.A. §7304,
Defendant demands that this case be dismissed in favor of the contractually agreed-upon
alternative dispute resolution mechanism: arbitration.
WHEREFORE, Defendant James R. Sauve, DMD, demands that this
action be dismissed without prejudice to Martin J. Pastucka's ability to pursue whatever
rights he may have through the arbitration process provided in the Partnership Agreement
between the parties.
Demurrer/Failure to State a Claim and Lack of Cauacity
to Sue by Pastucka &Sauve Dental Associates, LLP
7. Attached to Plaintiff s complaint as Exhibit "A" is a contract
labeled "Professional Partnership Agreement" (the "Agreement")
8. That Agreement, at Section 7.08 states that "Action by the
Partnership shall require. the affirmative vote or approval of both Partners." Id.
9. Plaintiff s complaint does not plead (and cannot plead) that the
filing of this action was duly authorized by both Partners.
10. Pursuant to Pa. R.Civ.P. Rule 1028(a)(4) and (5) the claim by
Pastucka &Sauve Dental Associates, LLP is improperly brought and should be
dismissed.
07/24/07/SLl 731650v 1 /101341.00001
2
v
WHEREFORE, Defendant James R. Sauve, DMD, demands that the claim
of Pastucka &Sauve Dental Associates, LLP be dismissed.
Date: July, 2007 STEVENS & LEE
Mark D. radshaw
Attorney I.D. #61975
17 North Second Street
16th Floor
Harrisburg, PA 17101
(717) 255-7357
(610) 371-7362 (facsimile)
mdb@stevenslee.com
Attorney for Defendant
07/24/07/SLl 731650x1/101341.00001
,-'
CERTIFICATE OF SERVICE
I, Mark D. Bradshaw, Esquire, hereby certify that I caused a true and correct copy
of the foregoing Preliminary Objections and Motion for Arbitration to be served upon the
following persons via Federal Express, addressed as follows:
Samuel Andes, Esquire
525 N 12th St
Lemoyne, PA 17043
Date: July 24, 2007
SL 1 731342v 1 / 101341.00001
11
r~~
~
(") r~ 1
r
.~
{
'.
_.
{
~~ ; ~ ._
(.,p`l ?
'. ..e Z
Ali
~ j
~ __-(
„
__ ~~ ~:l
^w.
(.r 3