The URL can be used to link to this page

Home My WebLink About07-5153QUALITY BUILDERS WARRANTY CORPORATION, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff vs. JOHN KAVANAGH COMPANY CIVIL ACTION DOCKET NO. ~j '7 ~- ~S"I.~ Defendant NOTICE YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Nonce are served, by entering a written appearance personally or by attorney and filutg 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 WHER YOU CAN GET LEGAL HELP. CUMBERLAND COUNTY BAR ASSOCIATION 32 South Bedford St. Carlisle, PA 17013 717-249-3166 August 28, 2007 QUALITY BUILDERS WA~F~tANTY CORPORATION, Plaintiff vs. JOHN KAVANAGH COMPANY Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION DOCKET NO. COMPLAINT a ~ - s~ s3 AND NOW, this 21st day of August, 2007 comes the Plaintiff, Quality Builders Warranty Corporation (QBW) and files the within Complaint against the above named Defendant and avers in support hereof the following: 1. Plaintiff is Quality Builders Warranty Corporation, a Pennsylvania corporation engaged in the Ten-Year New Home Warranty business with its principal place of business situate at 325 North Second Street, Wormleysburg, Cumberland County, Pennsylvania, 17043. 2. Defendant is John Kavanagh Company (Builder) is a North Carolina corporation engaged in the new home building business with its principal place of business situate at 1810 Pembroke Road, Greensboro, NC 27408. 3. On June 2, 1995, Builder executed a Builder Agreement in which Builder agreed to become a member in the QBW Ten-Year Limited Warranty Program. A copy of said Agreement is attached hereto incorporated herein and marked as "Exhibit 1 ". 4. In connection with its membership, Builder executed an Addendum to the Builder Agreement dated February 4, 1999 in which Builder agreed to maintain its membership in the QBW Ten- Year Limited Warranty Program for three years to commence on February 4, 1999.On February 7, 2002, Builder re-executed the Agreement extending the term of member~ip for an additional three years, which would renew for like term, unless 30 days prior to the expiration of tbe cun~ent term or any extension either party provides the other 30 days advance written notice. A copy of said document is attached hereto, incorporated herein and marked as Exhibit 2. 5. The Agreement was automatically renewed and Builder agreed to maintain its membership in the QBW program and enroll all homes it constructed until Febnuary 4, 2008. 6. Builder has breached its Agreement with QBW by failing to enroll all homes as required and has informed QBW that it is enrolling homes with another warranty program. 7. Section B 1 of the Builder Agreement executed by Builder states, "Builder agrees to enroll in the program every home Builder, Builder's Principals, or any e~ity under Builders or Builder's Principals common control constructs." (See Exhibit 1). 8. Paragraph 6 of the Addendum indicates that if Builder fails to enroll all homes for the term of the Addendum, Builder agrees to pay QBW the differences between the "qualified rate", based on actual volume, and the "discourrted rate" of $1.60 per thousand. 9. Builder's "qualified rate" is $2.00 per thousand. 10. Builder's reported sales volume to QBW for the period February 4, 2005, to date, was $67,105,003.70. 11. By virtue of Builder breaching its Agreement and not enrolling all homes its constructs until February 4, 2008, QBW is entitled to the rate differential of $0.40 per thousand, multiplied by the Builder's sales volume. 12. Builder owes QBW the additional sum of $26,842.00. (.40X$67,105,003. _ $26,842.00) 13. QBW also seeks attorney's foes as authorized by Section B 5 of the Builder Agreement. 14. Jurisdiction is proper in the Pennsylvania courts since Section E S of the Builckr Agreement indicates, `°This Agreement shall be interpreted and enforced in accordance with tbe laws of the Commonwealth of Pennsylvania. All suits instituted under this Agreement shall be brought in Pennsylvania in a court of competent jurisdiction. Builder hereby consents to the personal jurisdiction of the Pennsylvania courts." WHEREFORE, Plaintiff, Quality Builders Wan~anty Corporation, demands judgment against John Kavanagh Company in the sum of $26,842.00, plus attorney's fees as authorized by Section B 5 of the Builder Agreement and such other relief as deemed appropriate by the court. Respectfully Submitted, A. Gill, Esquire Quality Builders Wan~anty Corporation 325 North Second Street Wormleysburg, PA 17043 (717) 737-2522 #41532 Attorney for Plaintiff Quality Builders Wan~anty Corporation BUILDER AGREEMENT AGREEMENT made this 7th day of Jtme , 19 95 between QUALITY BUILDERS WARRANTY CORPORATION, a Pennsylvania corporation, herein referred to as `QBW,` and John Kavanagh Company Name of Builder: (Indicate whether a corporation, partnership, IndHiduai or other) of Address P . O. Box 9415. Greensboro , xc 274U8 herein referred to as 'Builder.' State Zip SECTION A. MEMBERSHIP AND TERM: 1 _QBW administers a program whereby home builders registered with QBW enroll homes they construct in the program and purchasers of those homes are protected by a warranty against certain specified defects. 2. In order to develop and maintain a good reputation for providing protection to purchasers of well-built homes, QBW protects and promotes its good-will by careful selection of builders to participate In its warranty program. 3. Builder desires to participate in QBW s warranty program and, to that end, agrees to abide by the provisions of this Agreement and to conform its behavior to the standards expressed herein and in the Limited Warranty Agreement. Builder warrants that all information supplied to QBW in connection with its application is true and correct. 4. All registration fees (initial and annual rescreening) are set by QBW at its discretion and are non-refundable. 5. QBW, upon executing this Agreement, has accepted Builder as a member of its warranty program, subject to the Builder's continuing performance of its obligation under this Agreement. 6. Builder's membership shall commence on the date of Execution by QBW and shall continue until terminated by either party in accordance with the terms of this agreement. QBW reserves the right to rescreen Builder annually. if QBW determines that Builder does not meet its approval standards upon rescreening then QBW may terminate Builder's membership and the provisions of Section B, paragraph 6, shall be in effect. SECTION B. HOME ENROLLMENT: 1. Requirements. As part of its participation in QBW's warranty program, subject to QBW s acceptance, Builder agrees to enroll in the program every home, Builder, Builder's Principals, or any entity under Builder's, or Builder's Principals common control constructs in any state in which QBW operates and agrees to pay all fees required by QBW in the enrollment process, which fees shall be non-refundable. 2. Procedures. Builder agrees to enroll its homes according to procedures established by QBW. Builder may enroll homes currently under construction and homes completed but not sold or occupied (as of the date of this Agreement or the date of reacceptance following a period of suspension or non-participation) provided that enrollment is made within 45 days of execution of this Agreement or reacceptance, and QBW has inspected and approved the home. When enrolling other than a detached single family dwe8ing, Builder shall enroll each individual unit of any multi- unit dwelling such as but not limited to duplexes, townhouses and condominiums. For each home enrolled, the Builder shall pay a warranty fee as determined by QBW within tho time periods estab- lished by QBW. All warranty fees are non-refundable. A minimum warranty fee of $100.00 shall apply. QBW will provide Builder with a copy of the Limited Warranty Agreement and Enrollment form. Builder and pur- chaser must complete, sign the Agreement and Enrollment Form at closing, and Builder agrees to furnish QBW with a copy of the signed Enrollment form within ten (10) days of closing. Builder agrees not to charge the purchaser direct ly the cost of the enrollment fee. A home will not be considered enrolled until QBW receives and approves the fully exe- cuted and completed Enrollment Form, payment of all fees, and an approved final inspection. 3. Reservsatlon of Power of Review. QBW reserves the right to reject any home submitted for enrollment in the program if (a) the Builder is not a member in good standing; (b) the home is not constructed in accordance with the Warranty Standards or building codes specified in the Limited Warranty Agreement; (c) the Builder did not observe the enroll- ment procedures; (d) misstates or misrepresents any information; (e) in any way fails to comply with the terms of this Agreement. 4. Assignment of Rights. If a purchaser files a Complaint pursuant to the Limited Warranty Agreement which the Builder fails to correct, the Builder hereby assigns to QBW or its insurer, as the case may be, any rights which Builder may have against a supplier, manufacturer, subcontractor or other person for work performed or materials supplied in con- nection with that claim. Builder agrees to cooperate fully with QBW and to provide QBW with ail information which it requests pertaining to the claim. if Builder fails to so cooperate, Builder agrees to compensate and indemnify QBW for any damages sustained by such lack of cooperation . S. Breach and Remedy. If Builder fails to enroll any eligible home as required by this Agreement, QBW.may seek specif- ic enforcement or other appropriate relief in legal or equitable proceedings, even if this Agreement has been termi- nated. Furthermore, Builder agrees to indemnify and hold harmless QBW and its insurer for any losses or any dam- ages QBW may suffer as a result of Builder's breach of this Agreement and such losses and costs shall include reasonable attorney's fees and expert witness fees. Builder hereby irrevocably authorizes and empowers any attorney or any court of record of Pennsylvania or else- where to appear for and confess judgment against Builder for all amounts for which Builder may become liable to QBW Y1~~~ for the breach of this Agreement, as evidenced by an affidavit signed by an officer of QBW seating forth the amounts then due, plus attorney's fees incurred by QBW, with costs of suit and release of errors. Such authority shall not be exhausted by any one exercise thereof but judgment may be confessed as aforesaid from time to time as often as there is a default. Remedies stated herein are elective and not exclusive and QBW may elect to proceed under this or any other paragraph in this Agreement. 6. Suspsnslon or Ternnination. QBW may terminate, or at its option suspend, Builder's participation in QBW's Warranty Program, or any entity or individual which Builder is affiliated, if QBW determines that Builder has done any of the fol- lowing, which shall be deemed a breach of this Agreement. (a) fails to comply fully with all provisions of this Agreement; (b) fails to perform any of its obligations under this Agreement, including, but not limited to, cooperating in the opera- tion of the program's informal dispute resolution and arbitration procedure; (c) fails to respond to QBW s notice of a homeowner's complaint; (d) fails to comply with a decision which is rendered pursuant to complaint procedures; (e) fails to provide adequate assurance to QBW within ten (10) days after it receives a written request from QBW for such assurance that (within a reasonable timetable established or approved by QBW) it is willing and able to coop- erate in dispute settlement and to perform the obligations under any decision which is rendered pursuant to such procedures; (f) fails to otherwise cooperate in the operation of the QBW Program in accordance with the rules and regulations of the (QBW Program; (g) fails to provide timely proof of compliance with this Agreement, as and when requested by QBW; (h) fails to comply with QBW Warranty Standards and building codes as stated in the Limited Warranty Agreement; (i) fails to comply with the enrollment procedures established by QBW; (j) fails to provide proof that enrolled homes have been subjected to required inspections; (k) fails to respond to purchaser complaints in a timely manner and as provided in the Limited Warranty Agreement; (I) fails to perform its obligations with professional competence or conduct its operations from a position of financial strength and stability; (m) fails to notify QBW within 30 days of a change in ownership, company name or company standing, financial con- dition, or of any other material fact which might affect Builder's ability to meet its obligations under this Agreement; (n) fails to meet ethical standards in its dealings with customers; or (o) misstates or misrepresents any information in connection with its application or in the rescreening process. QBW reserves the option to reinstate terminated affiliates of the primary, terminated Builder if QBW determines that the terminated Builder or its principals are not in a position to control the affiliated Builder. Termination of Builder by QBW shall not affect the rights or obligations of any of the parties to this Agreement with respect to the Warranty Program in effect at the date of termination, subject to the provisions pertaining to voidability. If a Builder is suspended or terminated, he shall not represent himself to be a member of the (QBW Warranty Program nor offer the QBW Warranty and shall not use its Logo or refer to the program in any way nor attempt to enroll any home. The Builder shall immediately notify any Buyer currently under contract to purchase a home of the suspen- sion or termination and that the QBW Warranty Program has been withdrawn. Upon request, Builder shall immediate- ly return to QBW all materials supplied by QBW and all material making reference to QBW. Should Builder fail to take these steps, it shall indemnify and hold harmless QBW and the insurer against any and all expenses incurred and loss- es suffered, including but not limited to attorney fees, by either of them as a result. In addition, Builder shall pay inter- est to QBW at the rate of~ 18% per annum on all sums due to QBW hereunder if such sums are not paid within 30 days of demand by QBW. Builder may terminate this Agreement upon 30 days advance written notice to QBW. If so terminated by Builder or by QBW, Builder's obligations under this Agreement shall continue as to those homes enrolled during the period in which this Agreement was in effect. 7. Notice. If G1BW possesses a reasonable belief that reason exists to terminate or suspend a Builder for violation of this Agreement, CQBW may immediately terminate or suspend the Builder by providing it with written notice. If QBW elects to suspend the Builder, such suspension will remain iri effect until Builder has cured all defects to QBW's satisfaction, however, QBW reserves the right to terminate any suspended Builder. 8. Vbidabillty. QBW reserves the right to void any enrollment if Builder misstates or misrepresents any information in its application or in the rescreening process or misstates or misrepresents any information in the enrollment of a particu- lar home or fails to pay any fees due for enrollment of any particular home or fails to forward an enrollment form for a particular home within 10 days as required. SECTION C. BUILDER'S OBLIGATIONS: 1. Construction Obligations. Following are the Builder's obligations with respect to QBW's Warranty Program: (a) BuildeP shall construct all homes in conformity with the Warranty Standards provided in the Limited Warranty Agreement, and/ or in conformity with approved building codes and other standards established by QBW and in effect at the beginning of construction of the enrolled home. QBW reserves the rights to establish special require- ments for escrow payments or other means of protection with respect to any homes constructed by Builder which QBW determines to be 'High Risks.' (b) Builder agrees to have all homes inspected, as required by QBW, and to pay all fees for the inspection and to pro- vide evidence of inspection as and when required by QBW. QBW shall provide inspectors or shall approve gov- ernmental inspectors. ~ (c) QBW shall have the right to perform spot inspections to verity Builder's compliance with this Agreement and Builder agrees to cooperate. (d) The Builder agrees to indemnify and hold harmless QBW and/or its Insurer for any losses or damages QBW and/or its Insurer may suffer as a result of the use of fire retardant treated plywood on any building enrolled under the QBW Ten Year Warranty Program. This will include all claims and liability for losses, damages and expenses which QBW and/or its Insurer may sustain, incur, pay or be liable for by means of any investigation settlement or litigation of any claim or action which may be raised, made or brought due to the potential defects caused or likely to be caused by use of the subject plywood. (e) If the Builder is informed by QBW that it is building in an area designated as one with active soil conditions, the Builder agrees to obtain such soils investigations and reports as may be required by GIBW. If such reports indicate a need for special foundation design the Builder agrees to construct the foundation according to the design of a registered professional engineer to take into account the conditions disclosed by the soil tests. 2. Warranty Obligations. Builder agrees to perform all obligations arising from this Agreement and the Limited Warranty Agreement. The Builder shall at its own expense perform all obligations as set forth in the QBW Warranty Program and this Agreement which includes meeting the warranty standards upon notice from the Purchaser without the necessity of OBW intervention. If Builder fails or refuses to perform its obligations in accordance with the Limited Warranty Agreement, QBW will perform those obligations; however, Builder agrees to reimburse OBW and/or its insurer for all expenses incurred in performing those obligations, including, but not limited to costs of materials, cost of collection, labor, architect's fees, . engineering fees, and attorney's fees. QBW reserves all rights of subrogation. If the Builder repairs a major structural defect during year 1 or 2, QBW must be notified. Once notified, QBW will perform a compliance inspection. QBW agrees to perform its obligations pursuant to the Limited Warranty Agreement in years three through ten pro- vided that the defect that is the subject of the Purchaser's claim did not occur within the first two years and was not concealed or cosmetically or improperly repaired by the Builder during those two years. Builder is not responsible for any damage caused by a major structural defect, as defined in the Limited Warranty Agreement, occurring after the expiratwn of the first two years of the Limited Warranty Agreement provided the defect was not concealed or cosmetically or improperly repaired during those two years. QBW will hold the Builder harmless for the reasonable cost of repairing or replacing such defects, and against the payment of any money judgment,. order or decrees made against Builder for the repair of the defect. 3. Builder is authorized to advertise its membership in the G~BW Warranty Program and to use its Logo in its business, pro- vided that any reference to QBW or its insurer, whether contractual or advertising copy, be approved by QBW in writ- ing in advance of its use. SECTION D. INFORMAL DISPUTE PROCEDURE: 1. Builder should be aware that the Limited Warranty Agreement provides for an informal dispute settlement and arbitra- tion procedure to resolve complaints by purchasers under the Limited Warranty Agreement. Builder should become familiar with the settlement procedures in order to be aware of its rights and responsibilities. Builder agrees to coop- erate fully in the procedure and to be bound by and to comply with any decision of an independent third party, or arbi- trator. If the Builder fails to perform its obligations hereunder in a timely and good and workmanlike manners such fail- ure shall be considered to be a refusal to perform governed by paragraph C.2 hereof. 2. The Builder agrees to pay all fees charged in connection with the informal dispute settlement and arbitration proce- dures. SECTION E. TERMS GOVERNING OPERATION AND INTERPRETATION: 1. Builder agrees to perform its obligations under this Agreement in a timely manner. However, time provided for perfor- mance of obligations hereunder shall be extended by events not subject to control by the person obligated to perform. Such events include acts of God or the public enemy, or, riot, civil commotion or governmental conduct. 2. Descriptive headings as to the contents of particular provisions of this Agreement are intended for convenience only and are not to be considered in construing this instrument. 3. This Agreement shall not constitute or be considered an agency, employer-employee relationship, joint venture or part- nership between the parties. None of the parties, nor any of their employees or agents, shall have the authority to bind or obligate the other party except as provided by this Agreement. 4. Should any provisions of this Agreement be determined by a court of competent jurisdiction to be unenforceable, that determination will not affect the validity of the remaining provisions. 5. This Agreement shall be interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania. All suits instituted under this Agreement shall be brought in Pennsylvania in a court of competent jurisdiction. Builder hereby consents to the personal jurisdiction of the Pennsylvania courts. For Builders who are licensed in the state of New Jersey, note that this agreement shall be interpreted and enforced in accordance with the laws of New Jersey; for all homes enrolled with an address in New Jersey. 6. Builder shall not assign this Agreement without the prior written consent of QBW. 7. This Agreement shall insure to the benefit of and be binding upon the heirs, executors, administrators, assignee, and successors of the representative parties. 8. This instrument, and security documents and documents referred to or incorporated herein by reference, contains the entire agreement between the parties, and no statement, promises, or inducements made by either party or agent of either party that is not contained in this written contract shall be valid or binding; and this contract may not be enlarged, modified, or altered except in writing signed by the parties and endorsed hereon. 9. Failure of either party to insist upon compliance with any provision of this Agreement shall not constitute a waiver of that provision. 10. Ail notices required hereunder must be in writing and sent by certified mail, postage prepaid, return receipt request- ed, to the recipient at the respective address shown below, or to whatever address the parry may designate in writing. 11. The effective date of this Agreemer~.~hall be the date ofexecution by QBW. CORPORATION BY Pros/deni Date Of 8!XBCtJtI011 by D1~11U: June 2 , 1995 Bulider's Rsgiatratlon No.: 60093 BUILDER: John Kavanagh Company (Name of Builder -please prlM or type) L7:~1= BY of Authorized RepressMatlvs -Title) (Please print name/tltle of executor) P.O. Box 9415, Greensboro, NC 27408 ~~~) June 7, 1995 Copyright 1998 ~iqr BuBdaa Warranty Corporation (]BVV FORM 050 3195 _~ ~ ._ JUG _._. _ . r i ~iJ 1 ~~ . ..: • _1sa addandvR. ia. batwsll Qttaalty huldala yareaesy Corpornc:an (ODV 1 sad :.01av rava?laQt COMIANY =it[lcssd LD ii °DWldli'. luaider :a a eesher :n CAS Clle t0 zerr b:nitea Vazrsacr frovran. Caw am iulldar rea:se ro ameitY the AQ:sieemt aAd L4su :eavaa:_ve rsgiscII wad saligatxms eharauhdaa. re... wemtZiQl1E. ~ word ayald.r, in eae4arge :~ tha eunml r,VePSnta c~ntslAea Asa:a wad ineerWir9 Ca !aa la~allr beeal ~' agraa a.:e:la+.s~ 7. ~r aeOwe :CStals ire JA -ata?~l gut a! tffls AGlAgdsto and d:e saearpasated hsrean. .. waldex mall ausaeain cta reeheraelp sn Gay's Llattad Wazrany rsvq:ae tnr sa acditioaal p.rsad of 17tsat :71 7+ua eo cosaeaea vpQa cha below data wad nwao.t to: aarol:mene (s:see vtoiah aAaldes wAattvcta dersAg teat ttea. 9vslder wy woe :.ss~tnau hta ras-saapaesoA is elea Oar Pse9r3e wsthia rase yeriod uale:: eeasoatad to by QDY. 7. Duildar smu wr aA aswal eeehor~sp [... ~. ~•~~•+e~•s rase wLll ba St.sO per ehmaana. :ne :ate ..sll raeaiA sn atieCt tar tb• Dedd et CAia J~ddepd~. S. I! ie the va[erefath awee o[ a rata !ACteesa. eaused by Le9=elaelaA. x sinueioea ha~oad the eogeral e! GaM. auiiNr has tbs right w tereu~aco particpaesoa watt 1roa penalties. G. euil~s ayeeee W aasoll all basal eeestrectsd M vsm. ar any a[:illatea, in ehs 4ri Pte!=w• u ~~ ~ mY atliliasa lai:! ee eerell all 1leMi. tas that tern avecilied is sa asow. Alilde= a~sw to paY Gay spa dsttereaee lveswen hsa gpalilsed ore, hawed e+s aaeasl .claw wad tNe diameneel rata apletlied Sn f1a above for all Dame mrellae derinq ri:ta a4eeeerne_ laple/t acne w pond rilhttt 70 days et dieetiresv st boeae~ ar awL3rr yrnatutr: car- ~-~-m ee thta alfeaNat. • 7. I! the Lases Castalasd ih tAli addie4ue arl snemslltaac vLth till A:ilnar 1-gt'eaeeAt. the test o[ Chia ae0.a0v' SRs11 geveYa_ '11 YITJIti! rN ebe partied heCMA hive Calked Chil iadesthte to De CalCUted br lsei! duly autdorized ottlars. as of LhiS g°°- daY of Feereary ~ t999. Gpas,izr 70SLDTa(((3 yaAN1MT7 W1{P. DY7 ~•TT• M~' ~/IC eAC JOle1.i71YJ0Ae(1 ~~11Y 1!: The tam of the Addendum is ammdmd 8or au additiaaal duaee (3) yrara and will rer~w fQr lt7oa toms nnltas thhty (30) days prior to fire won at'tbis tam a my exoaoeians abhor party pemridp the cfhar thirty (30) Jaya advamoe wrl~m aatice that dray imatd not to end the period eptit~ the bgilder to a lower rate. If Builder' provides notice, Ql3W will adjust the Bulida''s rate ~ipwsrd effective at the end of the that ct~aut term. QUALITY BUILDIrRS W CORPORATION By: rornv xAVArrAC~x colv~ANY r . ~ ! TOTAL P. 03 x 1-11 ~ lT ~- VERIFICATION I, JOSEPH M. OLSHEFSKI, President of Quality Builders Warranty Corporation, hereby certify and state that the foregoing Complaint is true and correct to the best of my knowledge, information and belief; and that I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. §4904, relating to unsworn falsification to authorities. Date: ~ vr'f o? ~ a 00 7 Quality ers W orporation By: oseph M. Olshefski, President ~~ f ~_~ C_ ~ ~'. '7 , _.. Vie!^'., f . .....J ~ - { '~ - `,,, r '~ c. ~ ~ ~C I l r ^ -> ~ - .r ~ ~ ?~ ' ~ -~ S. '" ; ~ -c ~ . , ~~ C A ~. rc ,~ `_ -` /~ n o A ~~ a F:\FQ,ES1CfiausU2772 Kavamgh\12772.I.Notia to Pkadwpd Hubert X. Gikoy, Esquire I.D. No. 29943 Trudy E. Fehlinger, Esquire I.D. No. 202753 MARTSON DEARDORFF WILLIAMS OTTO GII,ROY & FALLER MARTSON LAW OFFICES 10 East High Street Carlisle, Pa 17013 (717) 243-3341 Attorneys for Defendant John Kavanagh Company QUALITY BUILDERS IN THE COURT OF COMMON PLEAS OF WARRANTY CORPORATION, CUMBERLAND COUNT Y PENNSYLVANIA Plaintiff vs. N0.5153-07 CIVIL ACTION -LAW JOHN KAVANAGH COMPANY, Defendant NOTICE TO PLEAD 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 (ZO) 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 32 South Bedford Street Carlisle, Pennsylvania 717-249-3166 ' F:\F1LFS\Clirnts\12772\12772.1.polhde Created 9/20/04 0:06PM Revised: 9/21107 9:30AM Hubert X. Gilroy, Esquire I.D. No. 29943 Trudy E. Fehlinger, Esquire I.D. No. 202753 MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER MARTSON LAW OFFICES 10 East High Street Carlisle, Pa 17013 (717) 243-3341 Attorneys for Defendant John Kavanagh Company QUALITY BUILDERS WARRANTY CORPORATION, Plaintiff vs. JOHN KAVANAGH COMPANY, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA N0.5153-07 CIVIL ACTION -LAW DEFENDANT'S PRELIMINARY OBJECTIONS TO PLAINTIFF'S COMPLAINT AND NOW, comes Defendant, John Kavanagh Company, by and through its attorneys, MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER, and hereby files these Preliminary Objections to Plaintiff s Complaint, pursuant to Pa.R.C.P. 1028, averring as follows: FACTUAL BACKGROUND Plaintiff, Quality Builders Warranty Corporation ("QBW"), is a Pennsylvania corporation engaged in the Ten-Year New Home Warranty business with its principal place of business located at 325 North Second Street, Wormleysburg, Cumberland County, Pennsylvania, 17043. Defendant, John Kavanagh Company ("Kavanagh"), is a North Carolina corporation engaged in the new home construction business with its principal place ofbusiness located at 1810 Pembroke Road, Greensboro, Guilford County, North Carolina, 27408. On June 2, 1995, the parties entered into a Builder Agreement whereby QBW agreed to provide limited warranty services to Kavanagh's customers upon receipt of payment for said services by Kavanagh. A copy of the Builder Agreement is attached hereto as "Exhibit A." On February 4,1999, the parties executed an Addendum to the Builder Agreement whereby they agreed to extend their contractual relationship for a period of three (3) years, which period expired in February, 2002. A copy of the Addendum is attached hereto as "Exhibit B." In July, 2007, QBW faxed a purported addition to the February 4, 1999 Addendum to Kavanagh. The purported addition to the Addendum seeks to obligate Kavanagh to continue to purchase warranty services from QBW through February, 2008. The purported addition to the February 4, 1999 Addendum is set forth on the same page as the Addendum, but appears in different font and represents a different signature than that provided by John Kavanagh on both the Builder Agreement and the Addendum thereto. A copy of the purported addition to the February 4, 1999 Addendum is attached hereto as "Exhibit B." On August 27, 2007, Kavanagh filed suit against QBW in the Superior Court of North Carolina, Guilford County, alleging, inter alia, Breach of Contract and Unfair and Deceptive Trade Practices. A copy of Kavanagh's Complaint is attached hereto as "Exhibit C." Subsequently, on August 28, 2007, QBW filed suit against Kavanagh in the Court of Common Pleas, Cumberland County, alleging Breach of Contract. PRELIMINARY OBJECTIONS I. IN THE NATURE OF A MOTION TO STRIKE THE COMPLAINT FOR IMPROPER VENUE PURSUANT TO Pa.R.C.P.1028(a)(1) 1. QBW filed the instant action against Kavanagh in Cumberland County, Pennsylvania, alleging that jurisdiction is proper in Pennsylvania as a result of Section E, 5 of the Builder Agreement, which provides, in relevant part, that "This Agreement shall be interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania. All suits instituted under this Agreement shall be brought in Pennsylvania in a court of competent jurisdiction. Builder hereby consents to the personal jurisdiction of the Pennsylvania courts." 2. The instant action raises conflict of law issues to be addressed by this Honorable Court in that Section E, 5 of the Builder Agreement contains a choice of law provision as well as a forum selection clause. 3. Since Pennsylvania is the forum state addressing these Preliminary Objections to QBW's Complaint, Pennsylvania choice of law rules apply. A. The Parties' DisDUte Should Be Determined Pursuant to North Carolina Law 4. Pennsylvania has adopted a hybrid approach for addressing conflict of law issues, combining governmental interest analysis with the Second Restatement's most significant relationship approach. Griffith v. United Air Lines, Inc., 416 Pa. 1, 21, 203 A.2d 796, 805 (1964); Savaee Hvundai, Inc. v. North American Warranty Services, Inc., 60 Pa. D.&C.4th 156, 181(Berks County, 2002). 5. Pennsylvania honors the law's basic policy of carrying out contracting parties' intent to choose a governing law for their disputes, except that Pennsylvania courts will disallow the parties' choice where the chosen state has no substantial relationship to the parties or the transaction and where there is not a reasonable basis for the parties' choice. See, Central Contracting Co. v. C.E. Youngdahl & Co., 418 Pa. 122, 133-34, 209 A.2d 810, 816 (1965). 6. Pennsylvania has no substantial relationship to the parties or this action. North Carolina is the place of contracting, all negotiations relevant to the contract took place in North Carolina, all performance under the contract occurred in North Carolina, all. subject matter related to the contract is located in North Carolina, Kavanagh's principal place ofbusiness is in North Carolina, both Kavanagh and QBW regularly conduct business in North Carolina, and Kavanagh has no known contacts with the state of Pennsylvania. The only relationship that this Commonwealth has to this litigation is that QBW's principal place ofbusiness is located here. 7. Based upon the quantity and quality of North Carolina's contacts to this litigation and the lack of any meaningful contact between this litigation and the Commonwealth of Pennsylvania, there is no reasonable basis for the application of Pennsylvania law. 8. The aforementioned principals guide this Honorable Court to hold that the instant litigation should be decided pursuant to North Carolina law. B. The Parties' Dispute Should Proceed In North Carolina 9. Pennsylvania law acknowledges that while private parties may not contract to prevent a court from asserting its jurisdiction, a court of proper venue and jurisdiction should decline to proceed with a case where the parties have freely agreed to conduct litigation in another forum. This rule only prevails, however, so long as the parties' agreement as to forum selection is not unreasonable at the time of litigation. Central Contracting Co. v. C.E. Youngdahl & Co., 418 Pa. 122, 133, 209 A.2d 810, 816 (1965). 10. Further, where enforcement of a forum selection clause will subvert the interests of justice, a court should decline to enforce it. See, Central Contracting_Co. v. C.E. Youngdahl & Co., 418 Pa. At 133, 209 A.2d at 816. 11. The forum selection clause found in Section 5, E of the Builder Agreement, which calls for all suits initiated under the contract to be brought in a Pennsylvania court, is unreasonable at this time. 12. Enforcement of the forum selection clause will undoubtedly subvert the interests of j ustice insofaz as it will require Kavanagh to proceed with this litigation in Pennsylvania when it has no known contacts with this state and when this state has no real relationship to or interest in the outcome of this case. 13. As the place of contract, the place where all negotiations took place, the place where all performance under the contact was rendered, the place where all subject matter related to the contract is located, the principal place of business of one of the contracting parties, and the place where both contracting parties regulazly conduct business, North Cazolina has a more meaningful interest in the outcome of these proceedings and should therefore be afforded the opportunity to conduct these proceedings. 14. In further support of Kavanagh's request that these proceedings be transferred to North Cazolina, we ask this Honorable Court to recognize North Cazolina law concerning forum selection provisions like the one at issue in this case. Under North Carolina law, any provision in a contract entered into in North Carolina that requires prosecution to be instituted or heard in another state is against public policy and is void and unenforceable. N.C.G.S. §22 B-3 (1995). 15. The forum selection clause contained in the contract crafted by QBW and entered into by the parties in North Carolina is in direct contravention of the aforementioned provision of North Cazolina contract law. 16. Principles of interstate comity encourage this Honorable Court to recognize North Cazolina's policy against forum selection clauses like the one found in Section E, 5 of the Builder Agreement and to accordingly Order that this litigation proceed in North Cazolina. 17. Plaintiff's Complaint should be stricken for improper venue and the parties should be directed to pursue this litigation in the Superior Court of Guilford County, North Cazolina in conjunction with the first-filed litigation currently pending in that jurisdiction. WHEREFORE, Defendant John Kavanagh Company respectfully requests that this Honorable Court strike Plaintiff Quality Builders Warranty Corporation's Complaint for improper venue pursuant to Pa.R.C.P. 1028(a)(1). II. IN THE NATURE OF A MOTION TO STRIKE THE COMPLAINT DUE TO PENDENCY OF A PRIOR ACTION PURSUANT TO Pa.R.C.P.1028(a){61 18. Kavanagh filed suit against QBW in the Superior Court of Guilford County, North Carolina on August 27, 2007. 19. QBW filed suit against Kavanagh in the Cumberland County Pennsylvania Court of Common Pleas on August 28, 2007. 20. Jurisdiction and venue are proper in the Superior Court of Guilford County, North Carolina because (1) Kavanagh has no known contacts with the state of Pennsylvania, (2) North Carolina is the residence and principal place of business of Kavanagh, (3) QBW regularly engages in business in North Carolina, (4) all of the parties' negotiations relevant to the instant litigation took place in North Carolina, (5) the Builder Agreement and Addendum thereto were executed in North Carolina, (6) all performance required pursuant to the Builder Agreement and Addendum thereto was rendered in North Carolina, and (7) Kavanagh's action against QBW was filed in the Superior Court of Guilford County, North Carolina prior to the filing of the instant litigation in Pennsylvania by QBW. 21. QBW's Complaint should be dismissed and the parties' should be Ordered to pursue this litigation in the Superior Court of Guilford County, North Carolina in conjunction with the first- filed litigation currently pending in that jurisdiction. WHEREFORE, Defendant John Kavanagh Company respectfully requests that this Honorable Court strike Plaintiff Quality Builders Warranty Corporation's Complaint due to the pendency of a prior action filed in Guilford County, North Carolina, pursuant to Pa.R.C.P. 1028(a)(6). Date: September ~, 2007 MARTSON LAW FICES By Hubert X. Gikoy, Esquire I.D. No. 29943 Trudy E. Fehlinger, Esquire I.D. No. 202753 10 East High Street Carlisle, PA 17013 (717) 243-3341 Attorneys for Defendant F:\FIL.BSllaienp\t2772U2772.t.pot Created 9/20/04 0:06PM Revised 9/2I/07 9:30AM QUALITY BUILDERS WARRANTY CORPORATION, Plaintiff vs. JOHN KAVANAGH COMPANY, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. S 153-07 CIVIL ACTION -LAW ORDER AND NOW, this day of , 2007, upon consideration of Defendant John Kavanagh Company's Preliminary Objections to PlaintiffQuality Builders Warranty Corporation's Complaint, and any response by Plaintiff thereto, the Court hereby SUSTAINS Defendant's Preliminary Objections and strikes off Plaintiff's Complaint with prejudice pursuant to Pa.R.C.P. 1028(a)(1) and Pa.R.C.P. 1028(a)(6). The Court hereby transfers the above-captioned matter to the Superior Court of Guilford County, North Carolina, to be consolidated with Case No. 07 CVS 9454. BY THE COURT: J. CERTIFICATE OF SERVICE s~ ~~ I, , an authorized agent for Martson Deardorff Williams Otto Gikoy & Faller, hereby certify that a copy of the foregoing Preliminary Objections was served this date by depositing same in the Post Office at Carlisle, PA, first class mail, postage prepaid, addressed as follows: John A. Gill, Esquire Quality Builders Warranty Corporation 325 North Second Street Wormleysburg, PA 17843 MARTSON LAW OFFICES By T i East High eet Carlisle, PA 17 13 (717) 243-3341 Dated: September ~ ~ , 2007 ,.. ... „f ~~ RfCSLL[p IMfR RFMIA&E ~b ~+ ~4 BUILDE~I AG~tEEAAENT AGREEMENT made this 7th day of June , ig 95 , between QUALITY BUILDERS WARRANTY CORPORATION, a Pennsylvania corporation, herein referred to as 'QBW,' and John Kavanagh Company Name of Builder: (indicate whether a corporation, partnership, individual or other) of Address P . 0 . sox 9415. Greensboro , Nc 27408 herein referred to as 'Builder.' State Zip SECTION A. MEMBERSHIP AND TERM: 1. QBW administers a program whereby home builders registered with QBW enroll homes they construct in the program and purchasers of those homes are protected by a warranty against certain specified defects. 2. In order to develop and maintain a good reputation for providing protection to purchasers of well-built homes, QBW protects and promotes its good-will by careful selection of builders to participate in its warranty program. 3. Builder desires to participate in QBW's warranty program and, to that end, agrees to abide by the provisions of this Agreement and to conform its behavior to the standards expressed herein and in the Limited Warranty Agreement. Builder warrants that all information supplied to G~BW in connection with its application is true and correct. 4. All registration fees (initial and annual rescreening) are set by QBW at its discretion and are non-refundable. 5. QBW, upon executing this Agreement, has accepted Builder as a member of its warranty program, subject to the Builder's continuing performance of its obligation under this Agreement. 6. Builder's membership shall commence on the date of Execution by QBW and shall continue until terminated by either parry in accordance with the terms of this agreement. OBW reserves the right to rescreen- Builder annually. If QBW determines that Builder does not meet its approval standards upon rescreening then QBW may terminate Builder's membership and the provisions of Section B, paragraph 6, shall be in effect. 8ECTION B. HOME ENROLLMENT: 1. Requlroments. As part of its participation in QBW's warranty program, subject to QBW's acceptance, Builder agrees to enroll in the program every home, Builder, Builder's Principals, or any entity under Builder's, or Builder's Principals common control constructs in any state in which QBW operates and agrees to pay all fees required by QBW in the enrollment process, which fees shall be non-refundable. 2. Procedures. Builder agrees to enroll its homes according to procedures established by QBW. Builder may enroll homes currently under construction and homes completed but not sold or occupied (as of the date of this Agreement or the date of reacceptance following a period of suspension or non-participation) provided that enrollment is made within 45 days of execution of this Agreement or reacceptance, and QBW has inspected and approved the home. When enrolling other than a detached single family dwelling, Builder shall enroll each individual unit of any multi- unit dwelling such as but not limited to duplexes, townhouses and condominiums. For each home enrolled, the Builder shall pay a warranty fee as determined by QBW within tho time periods estab- lished by QBW. All warranty fees are non-refundable. A minimum warranty fee of $100.00 shall apply. QBW will provide Builder with a copy of the Limited Warranty Agreement and Enrollment form. Builder and pur- chaser must complete, sign the Agreement and Enrollment Form at closing, and Builder agrees to furnish (QBW with a copy of the signed Enrollment form within ten (10) days of closing. Builder agrees not to charge the purchaser direct- ly the cost of the enrollment fee. A home will not be considered enrolled until QBW receives and approves the fully exe- cuted and completed Enrollment Form, payment of all fees, and an approved final inspection. 3. Reservation of Power of Review. QBW reserves the right to reject any home submitted for enrollment in the program if (a) the Builder is not a member in good standing; (b) the home is not constructed in accordance with the Warranty Standards or building codes specified in the Limited Warranty Agreement; (c) the Builder did not observe the enroll- ment procedures; (d) misstates or misrepresents any information; (e) in any way fails to comply with the terms of this Agreement. 4. Assignment of Righ#s. If a purchaser files a Complaint pursuant to the Limited Warranty Agreement which the Builder fails to correct, the Builder hereby assigns to QBW or its insurer, as the case may be, any rights which Builder may have against a supplier, manufacturer, subcontractor or other person for work performed or materials supplied in con- nection with that claim. Builder agrees to cooperate fully with QBW and to provide QBW with all information which it requests pertaining to the claim. if Builder fails to so cooperate, Builder agrees to compensate and indemnify QBW for any damages sustained by such lack of cooperation . 5. Breach and Remedy. If Builder fails to enroll any eligible home as required by this Agreement, oBW.may seek specif- ic enforcement or other appropriate relief in legal or equitable proceedings, even if this Agreement has been termi- nated. Furthermore, Builder agrees to indemnify and hold harmless QBW and its insurer for any losses or any dam- ages QBW may suffer as a result of Builder's breach of this Agreement and such losses and costs shall include reasonable attorney's fees and expert witness fees. Builder hereby irrevocably authorizes and empowers any attorney or any court of record of Pennsylvania or else- where to appear for and confess judgment against Builder for all amounts for which Builder may become liable to QBW tiJ ~ ' ~ ET ~ Exhibit "A" ., for the breach of this Agreement, as evidenced by arl affidavit signed by an officer of QBW setting forth the amounts then due, plus attorney's fees incurred by OBW, with costs oi' stJit and release of errors. Such authority shall not be exhausted by any one exercise thereof but judgment may be confessed as aforesaid from time to time as often as there is a default. Remedies stated herein are elective and not exclusive and G1BW may elect to proceed under this or any other paragraph in this Agreement. 6. Suspension or Termination. QBW may terminate, or at its option suspend, Builder's participation in OBW's Warranty Program, or any entity or individual which Builder is affiliated, if QBW determines that Builder has done any of the fol- lowing, which shall be deemed a breach of this Agreement. (a) fails to comply fully with all provisions of this Agreement; (b) fails to perform any of its obligations under this Agreement, including, but not limited to, cooperating in the opera- tion of the program's informal dispute resolution and arbitration procedure; (c) fails to respond to QBW's notice of a homeowner's complaint; (d) fails to comply with a decision which is rendered pursuant to complaint procedures; (e) fails to provide adequate assurance to QBW within ten (10) days after it receives a written request from QBW for such assurance that (within a reasonable timetable established or approved by QBW) it is willing and able to coop- erate in dispute settlement and to perform the obligations under any decision which is rendered pursuant to such procedures; (f) fails to otherwise cooperate in the operation of the QBW Program in accordance with the rules and regulations of the QBW Program; (g) fails to provide timely proof of compliance with this Agreement, as and when requested by QBW; (h) fails to comply with QBW Warranty Standards and building codes as stated in the Limited Warranty Agreement; (i) fails to comply with the enrollment procedures established by OBW; (j) fails to provide proof that enrolled homes have been subjected to required inspections; (k) fails to respond to purchaser complaints in a timely manner and as provided in the Limited Warranty Agreement; (I) fails to perform its obligations with professional competence or conduct its operations from a position of financial strength and stability; (m) fails to notify G1BW within 30 days of a change in ownership, company name or company standing, financial con- dition, or of any other material fact which might affect Builder's ability to meet its obligations under this Agreement; (n) fails to meet ethical standards in its dealings with customers; or (o) misstates or misrepresents any information in connection with its application or in the rescreening process. QBW reserves the option to reinstate terminated affiliates of the primary, terminated Builder if QBW determines that the terminated Builder or its principals are not in a position to control the affiliated Builder. Termination of Builder by QBW shall not affect the rights or obligations of any of the parties to this Agreement with respect to the Warranty Program in effect at the date of termination, subject to the provisions pertaining to voidability, If a Builder is suspended or terminated, he shall not represent himself to be a member of the QBW Warranty Program nor offer the (1BW Warranty and shall not use its Logo or refer to the program in any way nor attempt to enroll any home. The Builder shall immediately notify any Buyer currently under contract to purchase a home of the suspen- sion or termination and that the QBW Warranty Program has been withdrawn. Upon request, Builder shall immediate- ly return to G~BW all materials supplied by QBW and all material making reference to QBW. Should Builder fail to take these steps, it shall indemnify and hold harmless QBW and the insurer against any and all expenses incurred and loss- es suffered, including but not limited to attorney fees, by either of them as a result. In addition, Builder shall pay inter- est to QBW at the rate of 18~a per annum on all sums due to oBW hereunder if such sums are not paid within 30 days of demand by' QBW. Builder may terminate this Agreement upon 30 days advance written notice to QBW. If so terminated by Builder or by QBW, Builder's obligations under this Agreement shall continue as to those homes enrolled during the period in which this Agreement was in effect. 7. Notice. If QBW possesses a reasonable belief that reason exists to terminate or suspend a Builder for violation of this Agreement, QBW may immediately terminate or suspend the Builder by providing it with written notice. If QBW elects to suspend the Builder, such suspension will remain in effect until Builder has cured all defects to ~BW's satisfaction, however, QBW reserves the right to terminate any suspended Builder. 8. Voldability. QBW reserves the right to void any enrollment if Builder misstates or misrepresents any information in its application or in the rescreening process or misstates or misrepresents any information in the enrollment of a particu- lar home or fails to pay any fees due for enrollment of any particular home or fails to forward an enrollment form for a particular home within 10 days as required. SECTION C. BUILDER'S OBLIC3ATIONS: 1. Construction Obligations. Following are the Builder's obligations with respect to ~BW's Warranty Program: (a) Builder shall construct all homes in conformity with the Warranty Standards provided in the Limited Warranty Agreement, and/ or in conformity with approved building codes and other standards established by QBW and in effect at the beginning of construction of the enrolled home. QBW reserves the rights to establish special require- ments for escrow payments or other means of protection with respect to any homes constructed by Builder which QBW determines to be "High Risks.' (b) Builder agrees to have all homes inspected, as required by QBW, and to pay all fees for the inspection and to pro- vide evidence of inspection as and when required by QBW. QBW shall provide inspectors or shall approve gov- ernmental inspectors. s (c) QBW shall have the right to perform spot inspections to verify Builder's compliance with this Agreement and Builder agrees to cooperate. (d) The Builder agrees to indemnify and hold harmless QBW and/or its Insurer for any losses or damages QBW and/or its Insurer may suffer as a result of the use of fire retardant treated plywood on any building enrolled under the QBW Ten Year Warranty Program. This will include all claims and liability for losses, damages and expenses which OBW and/or its Insurer may sustain, incur, pay or be liable for by means of any investigation settlement or litigation of any claim or action which may be raised, made or brought due to the potential defects caused or likely to be caused by use of the subject plywood. (e) If the Builder is informed by QBW that it is building in an area designated as one with active soil conditions, the Builder agrees to obtain such soils investigations and reports as may be required by QBW. If such reports indicate a need for special foundation design the Builder agrees to construct the foundation according to the design of a registered professional engineer to take into account the conditions disclosed by the soil tests. 2. Warranty Obllgatlons. Builder agrees to perform all obligations arising from this Agreement and the Limited Warranty Agreement. The Builder shall at its own expense perform all obligations as set forth in the QBW Warranty Program and this Agreement which includes meeting the warranty standards upon notice from the Purchaser without the necessity of QBW intervention. If Builder fails or refuses to perform its obligations in accordance with the Limited Warranty Agreement, QBW will perform those obligations; however, Builder agrees to reimburse C18W and/or its insurer for all expenses incurred in performing those obligations, including, but not limited to costs of materials, cost of collection, labor, architect's fees, . engineering fees, and attorney's fees. QBW reserves all rights of subrogation. If the Builder repairs a major structural defect during year 1 or 2, QBW must be notified. Once notified, QBW will perform a compliance inspection. QBW agrees to perform its obligations pursuant to the Limited Warranty Agreement in years three through ten pro- vided that the defect that is the subject of the Purchaser's claim did not occur within the first two years and was not concealed or cosmetically or improperly repaired by the Builder during those two years. Builder is not responsible for any damage caused by a major structural defect, as defined in the Limited Warranty Agreement, occurring after the expiration of the first two years of the Limited Warranty Agreement provided the defect was not concealed or cosmetically or improperly repaired during those two years. ~8W will hold the Builder harmless for the reasonable cost of repairing or replacing such defects, and against the payment of any money judgment, order or decrees made against Builder for the repair of the defect. 3. Builder is authorized to advertise its membership in the l~BW Warranty Program and to use its Logo in its business, pro- vided that any reference to QBW or its insurer, whether contractual or advertising copy, be approved by QBW in writ- ing in advance of its use. SECTION D. INFORMAL DISPUTE PROCEDURE: 1. Builder should be aware that the Limited Warranty Agreement provides for an informal dispute settlement and arbitra- tion procedure to resolve complaints by purchasers under the Limited Warranty Agreement. Builder should become familiar wi#h the settlement procedures in order to be aware of its rights and responsibilities. Builder agrees to coop- erate fully in the procedure and to be bound by and to comply with any decision of an independent third parry, or arbi- trator. If the Builder fails to perform its obligations hereunder in a timely and good and workmanlike manners such fail- ure shall be considered to be a refusal to perform governed by paragraph C.2 hereof. 2. The Builder agrees to pay all fees charged in connection with the informal dispute settlement and arbitration proce- dures. SECTION E. TERMS GOVERNING OPERATION AND INTERPRETATION: 1. Builder agrees to perform its obligations under this Agreement in a timely manner. However, time provided for perfor- mance of obligations hereunder shall be extended by events not subject to control by the person obligated to perform. Such events include acts of God or the public enemy, or, riot, civil commotion or governmental conduct. 2. Descriptive headings as to the contents of particular provisions of this Agreement are intended for convenience only and are not to be considered in construing this instrument. 3. This Agreement shall not constitute or be considered an agency, employer-employee relationship, joint venture or part- nership between the parties. None of the parties, nor any of their employees or agents, shall have the authority to bind or obligate the other party except as provided by this Agreement. 4. Should any provisions of this Agreement be determined by a court of competent jurisdiction to be unenforceable, that determination will not affect the validity of the remaining provisions. 5. This Agreement shall be interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania. All suits instituted under this Agreement shall be brought in Pennsylvania in a court of competent jurisdiction. Builder hereby consents to the personal jurisdiction of the Pennsylvania courts. For Builders who are licensed in the state of New Jersey, note that this agreement shall be interpreted and enforced in accordance with the laws of New Jersey; for all homes enrolled with an address in New Jersey. 6. Builder shall not assign this Agreement without the prior written consent of QBW. 7. This Agreement shall insure to the benefit of and be binding upon the heirs, executors, administrators, assignee, and successors of the representative parties. 8. This instrument, and security documents and documents referred to or incorporated herein by reference, contains the entire agreement between the parties, and no statement; promises, or inducements made by either party or agent of either party that is not contained in this written contract shatl be v~-lid or binding; and this contract may not be enlarged, modified, or altered except in writing signed by the parties and endorsed hereon. 9. Failure of either party to insist upon compliance with any provision of this Agreement shall not constitute a waiver of that provision. 10. All notices required hereunder must be in writing and sent by certified mail, postage prepaid, return receipt request- ed, to the recipient at the respective address shown below, or to whatever address the party may designate in writing. 11. The effective date of this Agreemer~t~hall be the date of,execution by LBW. By CORPORATION President Date of execution by aBW: June 2 , 1995 Builder's Registration No.: 60093 BUILDER: John Kavanagh Company (Name of Builder -please print or type) DATE By of Authorized Representative -Title) (Please prlrtt name/titls of executor) P.O. Box 9415, Greensboro, NC 27408 (Addrsu) June 7, 1995 Capyrl~ht 1988 liuallty BuNders Warranty Corporation QBW FORM 050 3/95 aecvaeo urea aFGYC1.1aLE ~~ ^_1sa addendvw, ie betweeA OVai1tY eusldela KessansY Corparat~on ICS~I :.nd .:Otav at-va>ra~a teatlnNtr rnr^rrad co as "Du~1der'. Stoller :i a ...tats :n tna C9r t0 !'err G:astea Varzs1:Y Proaran. C8M alto Yttsttiar t9es::e :n t70tls:Y rrs A9-'saa~ft and ::loos :caveo:_va ss4aca .tnd an114atlcas enaraunder. wev, tNitt7aaSaNC. Oil and eyild.r, in eaGSVtye !ar she mut:t:al savaasnta canisine6 IuiCSt+ .and :ntendi!•4 to be SayellY heuAd =.esebY a9roe ~c :e~~a++s: t. - ~r aDOVe rCt:stale are aA ~ste7rst port of [aSa a~dttta aad 6Se :stGOt7eratt%I lterean_ :. wslde: wall avainLain :t. nmGesabip Le 0a+1•S Litastad ~asranLV ltarT:an Cor as acditian.l period of 'rnst:e (]1 Year3 m tmaneatra upon ehe txlen+ lots s+td 7ygtat.t !a: enrallepsne itesas vASSlt otuldts eon'LtLlera duripq that tsaa. 9u:ldst nay hoc tesairure his ~rueiwupn a ~ GDr Pro4raa vsehsa etuc period ttt:lea. con.-tsrtend ea hp 00U. 3. wilder shall Wv an arsuu3 weber:asp tee. ~. aullaer•s rate vt:ll be 31.ia per c~an*•*. '"!te :ace wsll revasn in .floe: tar t.Ae serial e! t:ls'r addendas. S. it La eLs unteroaeen event of a rata s°:~-~°. catsasd by Le4islacioe, x slt~eeima 6gand the costsral of 0~, ~ttiittes has the r3gat: en terRUtata parsse~a:son vith na peaaltitta. 6. wilaee ageees Co enroll all haven eeesetvcLSd by vtm. or any a:::L•>.ru, i11 the Oar pcolsi.• T! 7wslai or aaY attiilata rasa is ettse3l all naves. :or Otte tern aysitied is sz a,aaw. ew3des alse.a m V,Y Csa sde dslterence Oea.+sea hsa goatitied esr+,aased m ats:tni eelane and the dieantetead race apeeslisd iA 1a above tar sll ne.m enrel7aA during Lhse agrssew-s. lapreett awr tes pond vithsn 70 days of ilaewesy as' breat:.n ar lustdec5 F,rnacuce eaross~atson o! thae a*ssenest. 7. It tlfe Lens exetaitted in t4se addee4us are 1teM•iatent vit:.h the i-:i~ Agrswsnt, Lhs cerx8 of cn1.• 1~EdN1Cu' :l1a11 gavsrn. ~ ertrss! naams. one ~iG nmaaco Rave esYesd tni~ ]1dtltledtto m A^ es<eCUtsd br souls duly auLnort:ed ollloars. u of lass a=` day of February ~ t999. gVa4in 30ZLC7s13 MABMNTY C7Rl. ~ lrsai ent Bona ,,~-vawar caolw,r ^:• ~~ The team oFthe Addendum is extended ~ as additional tluaoa (3) years and will renew far Bice terms mless thirty (3t)} days prior to the expiratlm of dtis farm ar any extxaaions either party providea du other thirty (30) days advar3ee vvrittu7 aaticx that they intatd not to extend the period etttitiaag the bu#Idar to a lower rate. If Builder provides eoticx„ QBW will adjust file Builder's rate upward effective at rho cad of the tiseat ciarent term. QUALITY BUILDIrRS WARRa,NTy CORPORATION By: l'OHN KAVANAGH COINPA~NY~? v ~, ~x N CIS lT ~- ~+~~ .i`~_. TOTAL P.~73 Exhibit "B" RlCYCl11l PNlR `~ RFfYQARIf SM[TH MOORS LLP August 28, 2007 BY FACSIMILE AND U.S. MAIL John A. Gill, Esq. Quality Builders Warranty Corporation 325 North Second Street Wornleysburg, PA 17843 Re: John Kavanagh Company v. Quality Builders Warranty Corporation Guilford County Superior Court 07 CvS 9454 Dear Mr. Gill: Our firm represents John Kavanagh Company. Your 2l August 2007 letter to John Kavanagh Company has been forwarded to me. Enclosed please find a copy of the Complaint. filed by John Kavanagh Company in Guilford County Superior Court against Quality Builders Warranty Corporation on 27 August 2007. This Complaint is being served by certified mail upon Quality Builders Warranty Corporation's registered agent in North Carolina, CT Corporation. Also enclosed is a copy of Plaintiff's First Request for Production of Documents, which also is being served upon CT Corporation by certified mail. We are sorry that the filing of litigation has become necessary. However, Quality Builders Warranty Corporation's approach toward its relationship with John Kavanagh Company, including your threat of litigation in Pennsylvania, has left us with no choice. If you wish to discuss a potential resolution of this matter, please contact me. Otl~r~wi; we will move forward with litigation over the next several months. ~ ~ ~~ ; Sincerely, BPA/knf Enclosures llirect (336) 378-5321 ~ lax (33G) 378-5400 ~ bruce.ashle~~Qsmithmoorelaw.com PO Box 21927 (27420) 300 North Greene Street Suite 1400 Greensboro, NC 27401 336.378.5200 www.smithmoorclaw.com Atlanta Charlotte Greensboro Raleigh Wilmington Exhibit "C" ,~~ ; '1 NORTH CAROLINA ~;~~ ~°h `: ~" ~ ~' ,: GUILFORD COUNTY ,, ; r~ 3~ 5b r~tl ; `?r, ~.. JOHN KAVANAG>~i/OMPANY, Plaintiff, v. QUALITY BUILDERS WARRANTY CORPORATION, Defendant. IN THE GENERAL COURT OF JUSTICE SUPERIOR COU T DIVI ION 07 CVS COMPLAINT Plaintiff John Kavanagh Company, complaining of defendant Quality Builders Warranty Corporation, alleges: 1. Plaintiff John Kavanagh Company ("Kavanagh") is a North Carolina corporation with its principal place of business in Guilford County, North Carolina. 2. Defendant Quality Builders Warranty Corporation ("QBW") is a Pennsylvania corporation engaged in business activities in North Carolina, including Guilford County. 3. Kavanagh is a developer/builder of homes in the Guilford County area, and has been in business since the 1980's. 4. QBW provides limited warranty services to customers of developers/builders such as Kavanagh, with these services being provided through agreements between QBW and the developers builders. 5. QBW and Kavanagh have entered into a series of agreements since the early 1990's pursuant to which QBW provided limited warranty services to Kavanagh's customers, with Kavanagh paying QBW for the provision of these limited warranty services. 6. Recently, QB W has provided unacceptable service to Kavanagh's customers, and has been communicating with Kavanagh's customers in ways that are unacceptable to Kavanagh. 7. QBW also has required Kavanagh to make payments relating to houses enrolled in QBW's limited warranty program long before QBW's warranty services are required by Kavanagh's customers. 8. Upon information and belief, QBW has also charged higher rates to Kavanagh than previously charged without indicating that QBW was charging these higher rates. 9. Beginning in late 2006 or early 2007, QBW began increasing its harassment of Kavanagh regarding QBW's desire that Kavanagh prematurely enroll its homes in QBW's warranty program. In light of Kavanagh's limited construction activities during this period and succeeding months, there were few, if any, homes to be enrolled. However, QBW continued to attempt to force Kavanagh to enroll homes prematurely. Eventually, QBW began demanding enrollment of homes by Kavanagh when Kavanagh pulled permits for their construction, even if construction was not to begin for several months and even if closing was not to occur for several more months. 10. In the spring of 2007, Kavanagh requested that QBW provide Kavanagh with a copy of the agreement between Kavanagh and QBW. QBW failed to do so. 11. Kavanagh decided to end its relationship with QBW. In July 2007, Kavanagh sent a letter to QBW terminating the relationship. 12. In response to this letter, QBW finally sent to Kavanagh what QBW contended was the contract between the parties. QBW faxed to Kavanagh the documents that QBW contended made up the contract. QBW has refused to provide to Kavanagh originals of these documents. 13. Included in the documents faxed by QBW to Kavanagh was an Addendum dated 4 February 1999 ("the February 1999 Addendum"). The February 1999 Addendum established a 2 three year term for the contractual relationship between QBW and Kavanagh, which expired in February 2002. 14. QBW also faxed to Kavanagh in July 2007 a purported addition to the February 1999 Addendum. This purported addition was set forth on the same page as the February 1999 Addendum. However, the purported addition was undated, and was in different type from the February 1999 Addendum. The alleged signature on behalf of Kavanagh on the purported addition is different from the signature for Kavanagh on the February 1999 Addendum, despite both documents allegedly being signed by John Kavanagh, the president of Kavanagh. Kavanagh's first knowledge of the purported addition to the February 1999 Addendum came about when it was faxed to Kavanagh by QBW in July 2007. 15. QB W has refused to provide to Kavanagh the original of the purported addition to the February 1999 Addendum. 16. QBW is now attempting to use the purported addition to the February 1999 Addendum to obligate Kavanagh to continue to purchase warranty services from QBW through February 2008. 17. Kavanagh has been damaged as a result of QBW's conduct in an amount in excess of $10,000.00. FIRST CLAIM FOR RELIEF (Request for Declaratory Judgment) 18. Kavanagh realleges and incorporates by reference as if fully set forth herein the allegations of paragraphs 1 through 17 of the Complaint. 19. An actual controversy exists between the parties regarding whether or not the parties have any further contractual obligations to each other. 3 20. Pursuant to N. C. Gen. Stat. §§ 1-253, et seq., and Rule 57 of the North Carolina Rules of Civil Procedure, Kavanagh requests that a judgment be entered declaring Kavanagh has no further contractual obligations to QBW. SECOND CLAIM FOR RELIEF (Breach of Contract) 21. Kavanagh realleges and incorporates by reference as if fully set forth herein the allegations of paragraphs 1 through 17 of the Complaint. 22. Through QBW's ineffective service to and conduct toward Kavanagh's customers, QBW's unreasonable and harassing enrollment efforts towazd Kavanagh, and QBW's unannounced rate increases, QBW breached the agreement between Kavanagh and QBW. 23. Kavanagh has been damaged in an amount in excess of $10,000.00 as a result of QBW's breach of contract. THIRD CLAIM FOR RELIEF (Unfair and Deceptive Trade Practice) 24. Kavanagh realleges and incorporates by reference as if fully set forth herein the allegations of paragraphs 1 through 23 of the Complaint. 25. By preparing the purported addition to the February 1999 Addendum and by attempting to claim that the purported addition to the February 1999 Addendum is part of the agreement between Kavanagh and QBW and that Kavanagh is obligated to QBW through February 2008 as a result of this purported addition, QBW has committed an unfair and deceptive trade practice in violation of Chapter 75 of the North Carolina General Statutes. 26. QBW's actions are in or affecting commerce. 27. Kavanagh has been damaged as a result of QBW's actions in an amount in excess of $10,000.00. 4 28. In addition to its damages, Kavanagh is entitled to recover its costs and attorneys' fees from QBW. WHEREFORE, plaintiff John Kavanagh Company, having alleged claims against defendant Quality Builders Warranty Corporation as frilly as it is advised is its duty, respectfully prays the Court that: 1. Plaintiff John Kavanagh Company have and recover an amount in excess of $10,000.00 from defendant Quality Builders Warranty Corporation; 2. Plaintiff John Kavanagh Company's damages be trebled pursuant to the provisions of Chapter 7S of the North Carolina General Statutes; 3. Plaintiff John Kavanagh Company be awazded its costs and attorneys' fees, consistent with North Cazolina law; 4. Atrial by jury be held on all issues of material fact; and S. The Court grant plaintiff John Kavanagh Company such other and further relief as the Court may deem just and proper. L. ThisZ~~ day of August, 2007. OF COUNSEL: SMITH MOORE LLP 300 North Greene Street Suite 1400 PO Box 21927 (27420) Greensboro, NC 27401 Telephone: 336.378.5200 Facsimile: 336.378.5400 S John Kavanagh Company ~ ~ ~ i ~i~ ~ ~ rr, r ~ ~ ~i -Qr 4 !V I'1~ . , ~'4 C ~ "~'~' ~" "ty -~r- ~ ~' *~ •'- i" ~ ~' r- -' -~ ' ~> . ._~ {~J -"~ W I IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v. John Kavanagh Company Defendant DOCKET N0.5153-07 AFFIDAVIT OF SERVICE OF ORIGINAL PROCESS Respectfully submitted, QUALITY BUILDERS WARRANTY CORPORATION, CIVIL ACTION Date: ~G ~ 2' ~-3vhfi A. Gill, Esquire 325 North Second Street Wormleysburg, PA 17043 (717) 737-7522 #41532 Attorney for Plaintiff Quality Builders Warranty Corporation r Affidavit of Process Server In the Court of Common Pleas Cumberland County. Pennsylvania (Name of Court) Quality Builders Warranty Corporation (Plaintiff/Petitioner) vs. John Kavana~,h Company (Defendant/Respondent) 5153-07 (Case #) I declare that I am a citizen of the United States, over the age of eighteen and not a party to this action. And that within the boundaries of the state where service was effected. I was authorized by law to perform said service. Service: I served John Kavanas;ll Company Name of person/entity being served With the (documents) By serving Gisela Abron Construction Administrator Name Relationship At ^ Home ®Business 1810 Pembroke Road Greensboro NC 27408 on September 10 2007 at 1:38nmEDT date time Thereafter copies of the documents were mailed by prepaid, first class mail on From city State date Manner of Service: ^ By personally delivering copies to the person/authorized agent of entity being served. ® By leaving, during office hours, copies at the office of the person/entity being served, leaving same with the person apparently in charge thereof. ^ By leaving copies at the dwelling house or usual place of abode of the person being served, with a member of the household 18 or older and explaining the general nature of the papers. ^ By posting copies in a conspicuous manner to the address of the person/entity being served. Non-Service: After due search, careful inquiry and diligent attempts at the address(es) listed above, I have been unable to effect process upon the person/entity being served because of the following reason(s): ^ Unknown at Address ^ Evading ^ Moved, Left no Forwarding ^ Other: ^ Address Does Not Exist ^ Service Canceled by Litigant ^ Unable to Serve in a Timely Fashion Service Attempts: Service was attempted on _ (Date) (Time) (Date) (Time) (Date) (Time) (Date) (Tune) (Date) (Time) I declare der penalty of perjury that the information contained herein is true and correct and this affidavit was executed on at `k ~. u . o/ city state SIGNATURE OF PROCESS SERVER State of North Caoolina County of Guilford subscribed and sworn before me, a notary public, this ~ day of e ~ hoc 7 WITNES Y HAND AND F CIAL SEAL TO G ~ NOTARY PUBLIC My Commission Expires: 6 D iol SEAL Notary Public North Carolina Courtly of Quiftcrd Robert R. hoch Commieeion {"'? hJ i.. ,_ _~ ^ 1 (~ w "~{ _.._; t r ; ~:~ 1 -' (~7'; ~ M,_J v s_,3 • • -~ __ ~ ~1 r^1. ,~ PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and submitted in duplicate) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: Please list the within matter for the next Argument Court. CAPTION OF CASE (entire caption must be stated in full) QUALITY BUILDERS WARRANTY CORPORATION (Plaintiff) vs. JOHN KAVANAGH COMPANY (Defendant) No. 5153-07 CIVIL Term 1. State matter to be argued (i.e., plaintiff s motion for new trial, defendant's demurrer to complaint, etc.): Defendant's Preliminary Objections toPlaintiff's Complaint 2. Identify counsel who wilt argue cases: (a) for plaintiff: John A. Gill, Esquire, 325 North Second Street (Name and Address) Wormleysburg, PA 17043 (b) for defendant: Hubert X. Gilroy, Martson, Deardorff, Williams, Otto, Gilroy, (Name and Address) Faller, 10 East High St., Carlisle, PA 17013 3. I v~~ill notify all parties in writing within two days that this case has been listed for argument. 4. Argument Court Date: November 21, 2007 afore John A. Gill Print your name Plaintiff Date: ~D ' ~/~~ ~ Attorney for ~ C} -~ ~`~ ~~ '~' r~^~~S Y~'~...= ~., ~+ ~' ~ ~~ ~ ~ ,FJ ~"~,~, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA QUALITY BUILDERS WARRANTY CORPORATION, CIVIL ACTION DOCKET N0.5153-07 Plaintiff . v. JOHN KAVANAGH COMPANY Defendant . PLAINTIFF'S REPLY TO DEFENDANT'S PRELIMINARY OBJECTIONS AND NOW, comes Plaintiff, Quality Builders Warranty Corporation, by and through its attorney, and files the within answer to Defendant's Preliminary Objections and replies as follows: FACTUAL BACKGROUND Defendant has set forth a "factual background", which is not in the form required by Pa.R.C.P. 1022. As such Plaintiff is incapable of filing a meaningful reply since the information is not in numbered, paragraph form. Therefore, Plaintiff denies the information set forth in the "factual background" of Defendant. PLAINTIFF'S REPLY TO PRELIMINARY OBJECTION I. KAVANAUGH'S PRELIMINARY OBJECTION IN THE NATURE OF A MOTION TO STRIKE THE COMPLAINT FOR IMPROPER VENUE PURSUANT TO Pa.R.C.P 1028(a)(1) 1. Admitted. By way of further answer QBW relies on the additional allegations set forth in its Complaint against Kavanagh for the basis of its suit. Agreement to Kavanagh. A copy of the approval letter and Builder Agreement is attached hereto, incorporated herein and marked as Exhibit 2. G. Section E, 5, of the Builder Agreement states: "This Agreement shall be interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania. All suits instituted under this Agreement shall be brought in Pennsylvania in a court of competent jurisdiction. Builder hereby consents to the personal jurisdiction of the Pennsylvania courts." H. Section E, 11, of the Builder Agreement indicates that the effective date of the Agreement shall be the date executed by QBW (see Section E, 11, of the Builder Agreement). I. Section A, 5, of the Builder Agreement, indicates that the term of the Agreement shall be for a one year period to commence on the date executed by QBW and that Builder may reapply for re-registration, and upon approval by QBW, the Builder shall continue as a participating member for another year. J. Kavanagh executed a Renewal Agreement in 1993 and 1994. Copies of those Agreements are attached hereto, incorporated herein and marked as Exhibit 3. K. In 1995 QBW changed the procedure requiring Builders to execute annual Builder Agreements. A copy of the Builder Agreement executed by Kavanagh in 1995, which is the current Agreement under which Kavanghs membership in the QBW program is governed, is attached hereto, incorporated herein and marked as Exhibit 4. L. The Agreement executed in 1995 indicates that the Builder's membership shall commence on the date of execution by QBW and shall continue until terminated, by either parry, in accordance with the terms of the Agreement. (See Section A, 6 of the Builder Agreement) M. In 1999 the parties signed an Addendum, in which Kavanagh's fee for enrollment of homes was reduced in exchange for Kavanagh's promise 1 7 to maintain its membership in the QBW Limit Warranty Program for a three-year period. N. QBW forwazded the Addendum to Kavanagh under cover letter dated January 5, 1999. A copy of the letter and Addendum to be signed by Kavanagh is attached hereto, incorporated herein and marked as Exhibit 5 O. Kavanagh executed the Addendum and returned it to QBW's Pennsylvania office via fax on February 4, 1999. A copy of the Addendum and cover fax forwazded by Kavanagh is attached hereto, incorporated herein and marked as Exhibit 6. The Addendum was to expire in February 4, 2002 and QBW offered to extend the terms of the Addendum prior to its expiration. P. A cover letter was forwarded to Kavanagh on February 4, 2002, adding language to the original Addendum, extending the original Addendum for an additional three-year period with an automatic renewal clause. A copy of the cover letter and fax forwarded to Kavanagh is attached hereto, incorporated herein and marked as Exhibit 7. Q. Kavanagh signed the extension and mailed it to QBW's office in Pennsylvania on February 5, 2002. QBW received the Addendum on February 7, 2002. A copy of the Addendum signed by Kavanaugh and the envelope in which it was mailed to QBW is attached hereto, incorporated herein and mazked as Exhibit 8. R. Under the terms of Kavanghs Builder Agreement and Addendum, Kavanagh was required to enroll all homes it constructed in accordance with QBW's enrollment procedures until February 4, 2008. S. Since Kavanaghs membership approval, Kavanagh has submitted over 3,000 request for warranties, to QBW's place of business in Pennsylvania. T. Since Kavanagh's membership approval, Kavanagh has submitted thousands of checks for payment of warranty fees, to QBW's place of business in Pennsylvania. U. In eazly 2007, QBW became aware of homes, which Kavanagh had under construction but had not submitted for enrollment in accordance with QB W's procedures. V. QBW contacted Kavanagh to have Kavanagh submit the homes for enrollment but Kavanagh failed to abide by the terms of their Agreement and enroll the homes in accordance with QBW's procedures. W. On July 10, 2007,QBW received a letter from Kavanagh indicating that they were terminating their membership in the QBW program. A copy of the letter is attached hereto, incorporated herein and marked as Exhibit 9. X. QBW contacted Kavanagh and reminded them of their obligation to enroll all homes, which they constructed until February 4, 2008. Y. Kavanagh indicated that they were not going to enroll the homes and QBW's General Counsel contacted Kavanagh and indicated that if they did not, QBW and Kavanagh would have to become adversaries based on Kavanagh's breaching its Agreement. Z. On August 21, 2007, QBW's Counsel forwarded a draft suit to Kavanagh, indicating that if they did not comply with their membership agreement by August 28, 2007, suit would be filed. AA. In response Kavanagh instituted an action in North Cazolina on August 29, 2007, despite Kavanagh knowing that all suits were governed by the laws of Pennsylvania and all suits were to be instituted in Pennsylvania. BB. Upon receipt of the suit QBW's General Counsel forwazded a letter to Kavanagh's Counsel, requesting the dismissal of the action based on Section E, 5, of the Builder Agreement, stating that the Agreement shall be interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania and all suits instituted under the Agreement shall be brought in Pennsylvania in a court of competent jurisdiction. CC. Kavanagh's Counsel responded that it would not voluntarily dismiss the suit. DD. QBW instituted the within suit against Kavanagh in the Court of Common Pleas of Pennsylvania, under the terms of the Builder Agreement. EE. Plaintiff's institution of suit in North Cazolina is without merit and in an attempt to prevent QBW's enforcement of the terms of the Builder Agreement, executed by Kavanagh. 7. Denied. QBW incorporates herein its reply to paragraph 6 of Kavanagh's Preliminary Objections. 8. Denied. The instant litigation should be decided in Pennsylvania pursuant to Pennsylvania law as agreed upon by the parties. 9. The allegations in paragraph 9 of Kavanagh's Preliminary Objections contain no factual averments and are conclusions of law to which no reply is necessary. 10. The allegations in paragraph 10 of Kavanagh's Preliminary Objections contain no factual averments and are conclusions of law to which no reply is necessary. 11. The allegations in paragraph 11 of Kavanagh's Preliminary Objections contain no factual averments and are conclusions of law to which no reply is necessary. By way of further answer QBW incorporates herein its reply to paragraph 6 of Kavanagh's Preliminary Objections. 12. Denied. QBW is entitled to the enforcement of the forum selection clause as agreed upon by the parties. By way of further answer QBW incorporates herein its reply to paragraph 6 of Kavanagh's Preliminary Objections. 13. Denied. The place of contract was QBW's place of business in Pennsylvania. By way of further answer QBW incorporates herein its reply to paragraph 6 of Kavanagh's Preliminary Objections. 14. The allegations in paragraph 14 of Kavanagh's Preliminary Objections contain no factual averments and are conclusions of law to which no reply is necessary. By way of further answer the contract in question was entered into in Pennsylvania. 15. The allegations in paragraph 15 of Kavanagh's Preliminary Objections contain no factual averments and aze conclusions of law to which no reply is necessary. By way of further answer, the contract in question was entered into in Pennsylvania. 16. Denied. The parties' contract is governed by Pennsylvania law and should be enforced as such. 17. Denied. The allegations in paragraph 17 of Kavanagh's Preliminary Objections contain no factual averments and aze conclusions of law to which no reply is necessary. By way of further answer QBW incorporates herein its reply to paragraph 6 of Kavanagh's Preliminary Objections. WHEREFORE, Plaintiff, Quality Builders Warranty Corporation, respectfully requests that the Preliminary Objections of Defendant be denied. II. KAVANAGH'S PRELIMINARY OBJECTION IN THE NATURE OF A MOTION TO STRIKE THE COMPLAINT DUE TO PENDENCY OF A PRIOR ACTION PURSUANT TO Pa.RC.P.1028 (a)(6) 18. Admitted. By way of further answer it is believed and therefore averred that Kavanagh only filed the suit in North Carolina to attempt to cause QBW extra expense and inconvenience since Kavanagh was on notice that if it did not comply with the terms of the parties Agreement that suit would be instituted in the Court of Common Pleas of Pennsylvania on August 28, 2007. Kavanagh therefore instituted suit in an attempt to prevent jurisdiction in the Pennsylvania Courts as agreed upon by the parties. By way of further answer the relief sought in the North Cazolina action, filed by Kavanagh, is different than the relief sought in the within action. 19. Admitted. 20. Denied. By way of further answer QBW incorporates herein its reply to paragraph 6 of Kavanagh's Preliminary Objections. ____. 1-~~:~~ ~- QUALITY BUILDERS WARRANTY CORP. BUILDER APPLICATION P.O. BOX 271 RATE 1.90 ' CAMP HILL, PA 17011 SALESMAN Ranf-.nn ® TOLL FREE: 1-800-334-9143 FAX#: 717-737-4288 IN PA: 717-737-2522 NJ DCA Builder Registration # 1. BUILDER Applicant (Entity which will stand behind warranty): .. {If applicabie) a. Name John Kavanagh Company Phone (919 ) 272-9904 b. Address Post Office Box 9415, GSO, NC Zip 27429-0415 c. Federal Express Service Number 1842 Banking St, 27408 d. Fax Number ( 91 9f 370-41 37 2. List all principals owning 10°h or more of Entity: a. Name B • John Kavanagh Titlepresident Soc. Sec. # 041-46-8153 b. Name Bllen C. Kavanagh Title Secretary Soc.Sec.# 242-88-9032 c. Name d. Name 3. Name of Parent Company (if applicable) .Title Sec. # .Title Soc. Sec. # 4. How many years has Chief Executive Officer owned and/or controlled a homebuilding company? 2 0 Does the Applicant or any of its Principals have 10% or more interest in any other home building business? ^ Yes KIX.No If yes, list names of Entities: 5. Business Organization (check one): Corporation X "S" Corporation Sole Proprietorship Partnership Other 6. How many years has organization (Entity) been involved in home building (not the principals)? h HOW 7. What warranty program (if any) has the applicant or any of its principals used in the past? 8. Has the applicant or any of its principals ever been expelled from, suspended, or refused registration by any warranty program? Yes X No If yes, list name of .program Reason for Suspension 9. Has the applicant ever been involved in a dispute settlement process with a homeowner and a third party arbitration? .Yes X NO If yes, how many? 10. Has the applicant or any of its home buyers ever experienced a claim which has been submitted to another warranty program for resolution? Yes X No If yes, explain: 1 i. How many homes did the applicant build in each of the past four (4) years? '90 31 '8914 '88 X 1991 52 Number of homes projected for the next 12 months 1 10 12. What is the average sale price of homes constructed by applicant? $100.000 . 13. List municipal government jurisdiction(s) where applicant has built homes within the last twelve (12) months. City Greensboro County Cui 1 ford ~~~ State N~ City County State 14. Has the applicant or any of its principals, or firms with which any principal was affiliated, filed for bankruptcy or been adjudicated as bankrupt within the Iasi seven (7) years? Yes X No If yes, list name(s) of firm(s) involved in bankruptcy. - - ~ k.~ t~3~2' ' . 4.... 15. Have any complaints been fil .gainst the applicant firm with,the Better B ss Bureau, the Bureau of Consumer Protection, or any other agency? Yes ~_No If yes, explain circumstances 16. What building code is applicant presently governed by? North Carolina State 17. Has applicant been involved in building under - YES Veterans Administration YES Federal Housing Agencies YES Farmers Home Administration 78. Have any liens or unsatisfied judgements been placed against the Builder? No If "yes," explain 19. Has applicant's authority to build ever been suspended or revoked? NO If "yes," explain 20. Name of current general liability company Ci ncinnati Tn iranra C'nm~~ Does coverage include "completed operations" coverage? g®s Policy # CPP0632495 Has applicant had any claims under "completed operations" in the last three years? If "yes," please describe: ***PLEASE REMIT A CERTIFICATE OF INSURANCE FROM YOUR AGENT**** The following information is required upon application to the Quality Builders Warranty Corporation. All references will be contacted. 1. UPPLIERS (Include lumber, brick/block, appliances, concrete, materials, if applicable) 6~nowlumber Co. - Lumber 470100 (919) 884-5466 .Name-post Office Box 530 HiT~ePoint, NC 2726(~count# Phone No. Address Zip Years of Relationship ~- .Carolina Oualitv Concr Concrete 000'~24n (ai a) ~~~_ni i a ~~ South Elm Street Gre dress arp-Carter Corn. Carnet ~s~ Office ddress ,vaaress Zip Years of Relationship _ .Chic's Appliance & TV Appliances 5300 (919)282-1888 NN Type Account # Phone No. Z~~~ Battleground Avenue, Greensboro. NC 7408 4 1 Zip Years of Relationship 2~SUBCONTRACTORS (Include plumbing, mechanical, electrical, excavation, insulation, if applicable) -~r/a/. Commercial Electric Flec ri r~a 1 (91 9)?.75-R57R NPaost Office Box 16744 Grpeensboro, NC 27406 Phone No. ddress Zip Code „~ Ransone & Son P1 ~mbi ng P1 ~mbi ng (q1 A )hhR ~A12 NPost Office Box 18096 Greensboro North Carol' na 741 Phone No. Address Zip Code .,~ ~ Doggett Construction o. on r ~ ti nn (A1 ~ )Fi4~-41 n8 Name ~ ~ _ _ Type _ Phone No. ro, NC Account #27406 _# e Account # Years of hielatlonshlp (919)275-6187 Phone No. 89 Years of Relationship (919)226-9356 Phone No. Address Zip Code d. Greenwood & C'Yiar1 PS MaSnnr~r (~1 q) 72~ 6442 Name Type 1451A Trade M rt R1 d Wi t Phone No. a v nG nn-4a 1 Pm Tnrth C Address a rnl ; na ~71CL7 Zip Code e. OI-REEN Bldg Products TnG i1 a inn (A1 )?g4 1 0'~R Name Type Phone No. Address ip Code Knolls of Hawthorne - Phase Z Purchaser Daytime Lot/ Street Closing 60 Day Phone # Unit # Address Date Walk Thru -Tom & Michelle 2-~"r-33z''~~ Lot 21 3607 Rugosa Drive 6-29-90 Complete Cleghorn •~--i~e~e~ & Lauren 275-9821 Lot 46 4611 Scarlet Haw 1-17-92 3-20-92 Spencer (Derek) ..Mark Russells 282-1500 Lot 55 4609 Scarlet Haw 11-15-90 Complete John Gilmore 379-2901 Lot 57 4701 Scarlet Haw 3-30-90 Complete 273-4885 Chuck Duncan 379-9364 Lot 59 4705 Scarlet Haw 5-10-90 Complete -Robert & Beth Lot 68 4905 Scarlet Haw 12-28-90 Complete Rolando Alan Sears 294-9544 Lot 69 4907 Scarlet Haw 12-11-91 2-10-92 _Ray Blackwell 665-6460 Lot 70 5001 Scarlet Haw 11-1-91 2-12-92 .John Lewis 282-2007 Lot 72 5005 Scarlet Haw 06-28-91 Complete --Greg & G a,-1 ~ 373-0232 Lot 73 5007 Scarlet Haw 01-17-91 3-23-92 French ~~-R"'~ ( Gail ) Cleve & Mary Small 665-184.1 Lot 74 5009 Scarlet Haw 01-31-91 Complete ruce & Sh~.nnon 449-8000 Lot 75 5011 Scarlet Haw 03-28-91 Complete Putnam C~%k~~~ ( Shannon ) Bill Boschini 547-0774 Lot 76 5013 Scarlet Haw 12-28-90 Complete Cindy Powers 547-7580 Lot 123 5004 Scarlet Haw 01-30-91 Complete David and Karen Clay 668-3812 Lot 124 5002 Scarlet Haw 5-24-91 Complete Kelly Fogleman 1-919- Lot 126 3603 Attar Ct. 11-O1-91 2-18-92 •~~~• ~--993-4311 ~s,Y> i.,Y,~_668-9063 Clark & Shari 668-4813 Lot 127 3605 Attar Ct. 7-31-91 Complete Holbrook Knolls of Hawthorne - Phase I Purchaser Daytime Lot/ Street Closing 60 Day Phone # Unit # Address Date Walk Thru Paul & Jean 288-7210 Lot 128 3606 Attar Ct. 7-31-91 Complete Leslie (Leslie) Mike & Maria 375-3111 Lot 129 3604 Attar Ct. 4-12-91 Complete Keating (Maria) Currie & Kathy 665-9209 HC #131 3600 Attar Ct. 6-28-91 9-06-91 Peterson ~ ? Location of three homes now under onstruction. u YY !1 ~ 1 C r1 ~ LI ~ T.T f- ~'1 !l Y ' Stage of G e e constr . a~ Name of Development County Unit Location/Address b Frami ~ Count Name of Development Y Unit Location/Address c ' Count Name of Development Y r ~+ 1 ti tion ng t i_ o n unit LocauoniAaaress 4. Names of two municipal inspectors utilized. a Charlie Bryson City of Greensboro (919)373-2155 Name Township/ ounty pp~~iion~e~Io~ _ -'.. 3 " ~ ` _LL- ib!KPp ~u~ti~t hnilf~rd • 73-;i . ;:: ~/ (QlQ) Name - " ~ Township/County Phone No. 5. Homebuyer references {ten are requested, if unab~e to supply all, contact the Quality Builders Warranty Corporation. Time in home •~~'`~` should be between 6 - 18 months.) a. Name Home Phone Address Work Phone indicate Mr/Mrs) Zip Months in Home b. Name Home Phone Address ~ __ Work Phone Z}f?/ t, _ Months in Home , c. Name ~ ~..(~ tT Home Phone ~ Address Work Phone Zip Months in Home d. Name Home Phone Address Work Phone Zip Months in Home e. Name Home Phone Address Work Phone Zip Months in Home f. Name Home Phone Address Work Phone Zip Months in Home g. Name - Home Phone Address Work Phone . Zip Months in Home h. Name Home Phone Address Zip Work Phone Months in Home is Name Address Zip Months in Home j. Name Address Zip Months in Home 6. Financial Affiliations a. Bank (Business Account) Checking Home Phone Work Phone Home Phone Work Phone NationsBank -Private Banking _Type of Account Checking~Mone Market t:;.:~ i ~-`1G %; ~ 1 Name Accaunt Number P.O. Box 21848 Greensboro, NC 27420 Gail Howard, V-President 9I9-370-3445 Address b. Bank (Business Account) Savings Name Address c. Lending Institution (Construction Financing) NationsBank phone .Type of Account Account Number one Type of Account Account Number Name Same as above Address pone 7. Financial Statement Remit most current. Preferred--certified audited statement; if unable to supply this, most recent prepared with name of they public accountant or bookkeeper or most recent supplied to any lending institution providing authorization of approval of lender is present and readable on copy submitted. NOTE: All information will be received as strictly confidential unless specified otherwise. Investigation: The applicant hereby authorizes QBW to conduct such investigation of the applicant's activities, make such inquiries and obtain credit reports as may be necessary for its determination of applicant's financial arid technical ability to meet its obligations to purchasers. Applicant hereby directs all credit reporting agencies to make available to QBW any information in the possession of such agencies. This application has been executed by or on behalf of the applicant this 22 day of May 19 92 John Kavanagh Com= and COMPANY NAME ~~ v ~... By l ~ ME OF AUTHORIZED REPRESENTATIVE Please note that in reviewing applicants for the OBW Program, certain costs are incurred, therefore all application fees are non-refundable. ALL INFORMATION REQUESTED ON THIS FORM MUST BE SUPPLIED OR ACCEPTANCE FOR MEMBERSHIP WILL BE~ DENIED, FORWARD ALL INFORMATION WITH A CHECK FOR $200.00 TO QUALITY BUILDERS WARRANTY CORPORATION, P.O. BOX 271, CAMP HILL, PA 17011. ~ Quaii~,~ builders 'Warranty Co~-g~oration P. O. Box 271 ® Camp Hill, PA 17011 \ _ (717) 737-2522 June 29, 1992 Mr. B. John Kavanagh John_Kavanagh Company P. 0. Box 9415 Greensboro, NC 27429-0415 Dear Mr. Kavanagh: Congratulations! Your application for membership in the Quality Builders Warranty program has now been accepted and approved. Your Builder Registration Number is 60093. Your rate for home enrollment is $1.90 per thousand of the home's selling price. Enclosed, please find a supply of construction notification forms .and instructions, consumer brochures, sample warranties and a Togo .sheet. As a reminder, you have forty-five (45) days within which to enroll homes already in your inventory under the "grandfather clause" provided they have been inspected by a QBW approved municipal inspector. All model homes must be enrolled during this time. Again, congratulations. I look forward to a successful and lasting relationship. Should you have any questions, please do not hesitate to contact me. P.S. We will contact you toward the end of July to go over all of the paperwork with your company. JMO/glw AGREE"'ENT BETWEEN QUALITY P '~LDERS WARR...~ITY CORPORATION AND bvILDER AGREEMENT made this 22 day of May A 19 92 between. QUALITY BUILDERS WARRANTY CORPORATION, a Pennsylvania corporation, herein referred to as "QBW",and John Kavanagh Company lLrr+a of BvilNr: (inOiu t~ .Mtl»r ~ corpora GOn, parvwrsni p, inoiriowl w ott+ar) of Aaor.aa 1842 Banking Street Greensboro, NC 27408 herein referred to as "Builder". Suta Dp SECTION A. MEMBERSHIP AND TERM: 1. QBW administers a program whereby home builders registered with QBW enroll homes they construct in the program and purchasers of those homes are protected by a warranty against certain specified defects. 2. In order to develop and maintain a good reputation for providing protection topurchasers ofwell-built homes, QBW protects and promotes its good-will bycareful selection of buildersto participate in itswarranty program. 3. Builder desires to participate in QBW's warranty program and, to that end, agrees to abide by the provisions of this Agreement and to conform its behavior to the standards expressed herein and in the Limited Warranty Agreement. Builder warrants that all information supplied to QBW in connection with its application is true and correct. 4. QBW, upon executing this Agreement, has accepted Builder as a member of its warranty program, subject to the Builder's continuing performance of its obligation under this Agreement. 5. The term of this Agreement shall be for one (1) year, commencing on the date executed by QBW. Prior to the expiration of this Agreement, and any extensions thereafter, Builder may apply for re-registration and, upon approval by QBW and payment by Builder of re-registration fee then in effect, the Builder shall continue as a participating member for another one (1}year term. . SECTION B~. HOME ENROLLMENT: 1. Requlrementa. As part of its participation in QBW's warranty program, subject to QBW's acceptance, Builder agrees to enroll in the program every home, Builder, Builder's Principals, oranyentity under Builder, Builder's Principals common control constructs in any state in which QBW operates and to pay all fees required by OBW in the enrollment process, which fees shall be non-refundable. 2. Procedures. Builder agrees to enroll its homes according to procedures established by QBW. Builder may enroll homes currently under construction (as of the date of this Agreement) provided that enrollment is made within 45 days of execution of this Agreement and QBW has inspected and approved the home. OBW will provide Builder with a copy of the Limited Warranty Agreement and Enrollment Form. Builderand purchaser must complete, sign the Agreement and Enrollment Form at closing, and Builder agrees to furnish QBW with a copy of the signed Enrollment Form within ten (10) days of closing. Builder agrees not to charge the purchaserdirectly the cost of the enrollmentfee. A home will not be considered enrolled until QBW receives the fully executed and completed Enrollment Form, payment of all fees, and an approved final inspection. 3. Reservation of Power of Rerlew. QBW reserves the right to reject any home submitted for enrollment in the program if (a) the Builder is not a member in good standing; (b) the home is notconstructed in accordancewith the Warranty Standards or building codes specified in the Limited Warranty Agreement; (c) the Builderdid not observe the enrollment procedures; (d) misstates or misrepresents any information; (e) in any way fails to comply with the terms of this Agreement. 4. Assignment of Rights. If a purchaser files a Complaint pursuant to the Limited Warranty Agreement, the Builder, upon the request of QBW or its insurer, shall immediately assign to QBW or its insurer, as the case may be, any rights which Builder may have against a supplier, manufacturer, subcontractoror other person forwork performed or materials supplied in connection with that claim. Builder agrees to cooperate fully with oBW in the event an assignment occurs and to provide QBW with all information which it requests pertaining to the claim. If Builder fails to so cooperate, Builder agrees to compensate and indemnify QBW for any damages sustained by such lack of cooperation. Furthermore, Builder shall assign and deliver all manufacturer's warranties to the purchaser of the home. 5. Breach and Remedy. If Builder fails to enroll any eligible home as required by this Agreement, QBW mayseek specific enforcement or other appropriate relief in legal or equitable proceedings, even if this Agreement has expired or terminated. Furthermore, Builder agrees to indemnify and hold harmless QBW and its insurer for _ any losses orany damages QBW may suffer as a result of Builder's breach of this Agreement and such losses and costs shall include reasonable attorney's fees and expert witness fees. Builder hereby irrevocably authorizes and empowers any attorney of anycourtof record of Pennsylvania or _ elsewhere to appear for and confess judgment against Builder for all amounts for which Builder may become liable to QBW forthe breach of this Agreement, as evidenced by an affidavit signed byan officerof QBWsetting forth the amounts then due, plus attorney's fees incurred by QBW, with costs of suit and release of errors. Such authority shall not be exhausted by any one exercise thereof but judgment may be confessed as aforesaid from time to time as often as there is a default. Remedies stated herein are elective and notexclusiveand QBW may elect to proceed underthis oranyother 6. Suspension or Termination. ( /may terminate, or at its option suspen 'uilder's participation in QBW's Warranty Program, or any entry or individual which Builder is affiliated, it ...iW determines that Builder has done any of the following, which shall be deemed a breach of this Agreement: (a) fails to comply fully with all provisions of this Agreement; (b) fails to perform any of its obligations under this Agreement, including, but not limited to, cooperating in the operation of the program's informal dispute resolution and arbitration procedure; (c) fails to respond to QBW's notice of a homeowner's complaint; (d) fails to comply with a'decision which is rendered pursuant to complaint procedures; (e) fails to provide adequate assurance to QBW within ten (10) days after it receives a written request from QQW forsuch assurance that (within a reasonable timetable established orapproved 6y QBW) it is willing and able to cooperate in dispute settlement and to perform the obligations under any decision which is rendered pursuant to such procedures; (f) fails to otherwise cooperate in the operation of the QBW Program in accordance with the rules and regulations of the QBW Program; - (g) fails to provide timely proof of compliance with this Agreement, as and when requested by QBW; (h) fails to comply with QBW Warranty Standards and building codes as stated in the Limited Warranty Agreement; (i) fails to comply with the enrollment procedures established by QBW; Q) fails to provide proof that enrolled homes have been subjected to required inspections; (k) fails to respond to purchaser complaints in a timely manner and as provided in the Limited Warranty Agreement; (I) fails to perform its obligations with professional competence orconduct its operationsfrom a positionof financial strength and stability; (m) fails to notify QBW within 30 days of a change in ownership, financial condition, or of any other material fact which might affect Builder's ability to meet its obligations under this Agreement; (n) fails to meet ethical standards in its dealings with customers; or (o) misstates or misrepresents any information in connection with its application for initial or re-regis- tration. QBW reserves the option to reinstate terminated affiliates of the primary, terminated Builder if QBW deter- mines that the terminated Builder or its principals are not in a position to control the affiliated Builder. Termination of Builder by QBW shall not affect the rights or obligations of any of the parties to this Agree- mentwith respect to the Warranty Program in effectat the date of termination, subjecttothe provisions pertain- ing to voidability. If a Builder is suspended or terminated, he shall not represent himself to be a member of the QBW Warranty Program nor offer the QBW Warranty and shall not use its Logo or refer to the program in any way norattempt to enroll any home. The Builder shall immediately notify any Buyer currently under contract to purchase a home of the suspension or termination and that the QBW Warranty Program has been withdrawn. Upon request, Builder shall immediately return to QBW al! materials supplied by QBW and alf materia! making reference to QBW. Should Builder fail to take these steps, it shall indemnify and hold harmless QBW and the insurer againstany and all expenses incurred and losses suffered, including but not limited to attorney fees, by either of them as a result. - Builder may terminate this agreement upon 30 days advance written notice to QBW. If so terminated by Builder or by OBW, Builder's obligations under this Agreement shall continue as to those homes enrolled during the period in which this Agreement was in effect. 7. Notice. If OBW possesses a reasonable belief that reason exists to terminate or suspend a Builder for vio- lation of this Agreement, QBW may immediately terminate or suspend the Builder by providing it with written notice. If QBW elects to suspend the Builder, such suspension will remain in effect until Builder has cured all detects to QBW's satisfaction, however, QBW reserves the right to terminate any suspended Builder. 8. Voldablllty. QBW reserves the right to void any enrollment if Builder misstates or misrepresents any infor- mation in its application for registration or re-registration or misstates or misrepresents any information inthe enrollment of a particular home or fails to pay any fees due for enrollment of any particular home or fails to forward an enrollment form for a particular home within 10 days as required. SECTION C. BUILDER'S OBLIGATIONS: 1. Construction ObllgaNons. Following are the Builder's obligations with respect to QBW's Warranty Program: (a) Builder shall construct all homes in conformity with the Warranty Standards provided in the Limited Warranty Agreement, and/or in conformity with approved building codes and other standards estab- lished by QBW and in effect at the beginning of construction of the enrolled home. OBW reserves the rights to establish special requirements for escrow payments or other means of protection with respect to any homes constructed by Builder which QBW determines to be "High Risks". (b) Builder agrees to have all homes inspected, as required by QBW, and to pay all fees for the inspection and to provide evidence of inspection as and when required by QBW. QBW shall provide inspectors or shall approve governmental inspectors. (c) QBW shall have the right to perform spot inspections to verify Builder's compliance with this Agreement and Builder agrees to cooperate. (d) The Builder agrees to indemnify and hold harmless QBW and/or its Insurer for any losses or damages QBW and/or its Insurer may suffer as a result of the use of fire-retardant treated plywood on any building enrolled under the OBW Ten' ~~ Warranty Program. This will include all c ~~s and liability for losses, damages and expenses which QB1r. .d/or its Insurer may sustain, incur, pay or ~ _ gable for by means of any investigation, settlement or litigation of any claim or action which may be raised, made or brought due to the potential defects caused or likely to be caused by use of the subject plywood. 2. Warranty Obligations. Builder agrees to perform all obligations arising from this Agreement and the Limited Warranty Agreement. If Builder fails or refuses to perform its obligations in accordance with the Limited Warranty Agreement, QBW will perform those obligations; however, Builder agrees to reimburse OBW and/or its insurer for all expenses •incurred in performing those obligations, including, but not limited to costs of materials, cost of collection, labor, architect's fees, engineering fees, and attorney's fees. QBW reserves all rights of subrogation. QBW agrees to perform its obligations pursuant to the Limited Warranty Agreement in years three through ten, provided that the defect that is the subject of the Purchaser's claim did not occur within the first two years and was not concealed or cosmetically or improperly repaired by the Builder during those two years. Builder is not responsible for any damage caused by a major structural defect, as defined in the Limited Warranty Agreement, occurring after the expiration of the first two years of the Limited Warranty Agreement provided the defect was not concealed or cosmetically or improperly repaired during those two years. QBW will hold the Builder harmless for the reasonable cost of repairing or replacing such defects, and against the payment of any money judgment, order or decrees made against Builder for the repair of the defect. 3. Builder is authorized to advertise its membership in the QBW Warranty Program and to use its Logo in its business, provided that any reference to QBW or its insurer, whether contractual or advertising copy, be approved by QBW in writing in advance of its use. SECTION D. INFORMAL DISPUTE PROCEDURE: 1. Builder should be aware that the Limited Warranty Agreement provides for an informal dispute settle- mentand arbitration procedure to resolve complaints by purchasers underthe Limited Warranty Agreement. Builder should become familiar with the settlement procedures in order to be aware of its rights and respon- sibilities. Builder agrees to cooperate fully in the procedure and to be bound by and to comply with any decision of an independent third party, or arbitrator. 2. The Builder agrees to pay all fees charged in connection with the informal dispute settlement and arbitration procedures. SECTION E. TERMS GOVERNING OPERATION AND INTERPRETATION: 1. Builder agrees to perform its obligations under this Agreement in a timely manner. However, time provided for performance of obligations hereunder shall be extended by events not subject to control by the person obligated to perform. Such events include acts of God or the public enemy, or, riot, civil commo- tion or governmental conduct. 2. Descriptive headings as to the contents of particular provisions of this Agreement are intended for con- venience only and are not to be considered in construing this instrument. 3. This Agreement shall not constitute or be considered an agency, employer-employee relationship, joint venture or partnership between the parties. None of the parties, nor any of their employees or agents, shall ' have the authority to bind or obligate the other party except as provided by this Agreement. 4. Should any provisions of this Agreement be determined by a court of competent jurisdiction to be un- enforceable, that determination will not affect the validity of the remaining provisions. 5. This Agreement shall be interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania. All suits instituted under this Agreement shall be brought in Pennsylvania in a court of competent jurisdiction. Builder hereby consents to the personal jurisdiction of the Pennsylvania courts. For Builders who are licensed in the state of New Jersey, note that this agreement shall be interpreted and enforced in accordance with the laws of New Jersey; for all homes enrolled with an address in New Jersey. 6. Builder shall not assign this Agreement without the prior written consent of QBW. 7. This Agreement shall inure to the benefit of and be binding upon the heirs, executors, administrators, assignee, and successors of the representative parties. 8. This instrument, and security documents and documents referred to or incorporated herein by refer- ence, contains the entire agreement between the parties, and no statement, promises, or inducements made by either party oragent of either party that is not contained in this written contract shall be validor bind- ing; and this contract may not be enlarged, modified, or altered except in writing signed by the parties and endorsed hereon. 9. Failure of either party to insist upon compliance with any provision of this Agreement shall not consti- tute a waiver of that provision. 10. All notices required hereunder must be in writing and sent by certified mail, postage prepaid, return receipt _ requested, to the receipient at the respective addresses shown below, or to whatever address the party may designate in writing. 11. The effective date of this Agreement shall be the date of execution by QBW. ~ ~ r _ _ QUALITY BU~E~1~~F~A~]fN~ORPORATION By .~ - .~ Joseph M. Ols of ki, President Date of execution by QBW: June 29 , 992 Builder's Registration No.: 60093 BUILDER: John Kavanagh Company (Name of Builder -please print or type) DATE - Mav ~'l'L lgyl (Signature of uthorized Represen ative - T tle) B. John Kavanagh, President (Please print name/title of executor) 1842 Banking Street Greensboro, NC 27408. (Address) coPyri~nt 198a Quality Builders Warranty" Corporation QBW FORM 05010/90 AGREE. .NT BETWEEN QUALITY Bl DERS ~~~~~ WARRANTY CORPORATION AND BUILDER AGREEMENT made this 5th day of ~g 94 between QUALITY BUILDERS WARRANTY CORPORATION, a Pennsylvania corporation, herein referred to as "QBW," and _ John Kavana h Com any Name of Builder: (indicate whether a corporation, partnership, individual or other) of Address P.O. Box 9415 Greensnboro NC 274 0415 herein referred to as "Builder." SECTION A. MEMBERSHIP AND TERM: state zip 1. QBW administers a program whereby home builders registered with QBW enroll homes they construct in the program and purchasers of those homes are protected by a warranty against certain specified defects. 2. In ordertodevelop and maintain a good reputation for providing protection to purchasers of well-built homes, QBW protects and promotes its good-will by careful selection of builders to participate in its warranty program. 3. Builder desires to participate in QBW's warranty program and, to that end, agrees to abide by the provisions of this Agreement and to conform its behavior to the standards expressed herein and in the Limited Warranty Agreement. Builder warrants that all information supplied to QBW in connection with its application is true and correct. 4. Builder has paid its initial membership fee. All registration fees (initial and annual) are set by QBW at its discretion and are non-refundable. 5. QBW, upon executing this Agreement, has accepted Builder as a member of its warranty program, subject to the Builder's continuing performance of its obligation under this Agreement. 6. The term of this Agreement shall be for one (1) year, commencing on the date.executed by QBW.. Prior to the expiration of this Agreement, and any extensions thereafter, Builder may apply for re-registration and, upon approval by QBW and payment by Builder of re-registration fee then in effect, the Builder shall continue as a participating member for another one (7) year term. If Builder does not re-register, the provisions of Section B, item 6 hereof concerning termination shall be in effect. SECTION B. HOME ENROLLMENT: 1. Requirements. As part of its participation in QBW's warranty program, subject to QBW's acceptance, Builder agrees to enroll in the. program every home, Builder, Builder's Principals, or any entity under Builder, Builder's Principals common control constructs in any state in which QBW operates and to pay all fees required by QBW in the enrollment process, which fees shall be non-refundable. 2. Procedures. Builder agrees.to enroll its homes according to procedures established by QBW. Builder may enroll homes currently under construction and homes completed but not sold or occupied (as of the date of this Agreement or the date of reacceptance following a period of suspension or non-participation) provided that enrollment is made within 45 days of execution of this Agreement or reacceptance, and QBW has inspected and approved the home. When enrolling other than a detached single family dwelling, Builder shall enroll each individual unit of any multi-unit dwelling such as but not limited to duplexes, townhouses and condominiums. For each home enrolled, the Builder shall pay a warranty fee as .determined by QBW within the time periods established by QBW. All warranty fees are nonrefundable. A minimum warranty fee of $100.00 shall apply. QBW will provide Builder with a copy of the Limited Warranty Agreement and Enrollment form. Builder and purchaser must complete, sign theAgreement and Enrollment Form at closing, and Builder agrees to furnish QBW with a copy of the signed Enrollment form within ten (10) days of closing. Builderagrees not to charge the purchaser directly the cost of the enrollment fee. A home will not be considered enrolled until QBW receives the fully executed and completed Enrollment Form, payment of all fees, and an approved final inspection. 3. Reservation of Power of Review. QBW reserves the right to reject any home submitted for enrollment in the program if (a) the Builder is not a member in good standing; (b) the home is not constructed in accordance with the Warranty Standards or building codes specified in the Limited Warranty Agreement; (c) the Builder did not observe the enrollment procedures; (d) misstates or misrepresents any information; (e) in any way fails to comply with the terms of this Agreement. 4. Assignment of Rights. If a purchaser files a Complaint pursuant to the Limited Warranty Agreement, the Builder, upon the request of QBW or-its insurer, shall immediately assign to QBW or its insurer, as the case may be, any rights which Builder may have against a supplier, manufacturer, subcontractor or other person forwork performed or materials supplied in connection with that claim. Builder agrees to cooperate fully with QBW in the event an assignment occurs and to provide QBW with all information which it requests pertaining to the claim. If Builder fails to so cooperate, Builder agrees to compensate and indemnify QBW for any damages sustained by such lack of cooperation. Furthermore, Builder shall assign and deliver all manufacturer's warranties to the purchaser of the home. 5. Breach and Remedy. tf Builder fails to enroll any eligible home as required by this Agreement, QBW may seek specific. enforcement or other appropriate relief in legal or equitable proceedings, even if this Agreement has expired or terminated. Furthermore, Builder agrees to indemnify and hold harmless QBW and its insurer for any losses or any damages QBW may suffer as a result of Builder's breach of this Agreement and such losses andcosts shall include reasonable attorney's fees and expert witness fees. ~~~ t ~' T. (b) Builder agrees to have all 1 ,2s inspected, as required by QBW, and to ~ all fees for the inspection and to provide evidence of inspection as and when required by QBW. QBW shah r. ovide inspectors or shall approve governmental inspectors. (c) QBW shall have the right to perform spot inspections to verify Builder's compliance with this Agreement and Builder agrees to cooperate. (d) The Builder agrees to indemnify and hold harmless OBW and/or its Insurer for any losses or damages QBW and/or its Insurer may suffer as a result of the use offire-retardant treated plywood on any building enrolled under the QBW Ten Year Warranty Program. This will include all claims and liability for losses, damages and expenses which QBW and/or its I nsurer may sustain, incur, pay or be liable for by means of any investigation, settlement or litigation of any claim or action which may be raised, made or brought due to the potential defects caused or likely to be caused by use of the subject plywood. (e) If the Builder is informed by QBW that it is building in an area designated as one with active soil conditions, the Builder agrees to obtain such soils investigations and reports as may be required by QBW. If such reports indicate a need for special foundation design the Builder agrees to construct the foundation according to the design of a registered professional engineer to take into account the conditions disclosed by the soil tests. 2. Warranty Obligations. Builder agrees to perform all obligations arising from this Agreement and the Limited Warranty Agreement. The Builder shall at its own expense perform all obligations as set forth in the QBW Warranty Program and this Agreement which includes meeting the warranty standards upon notice from the Purchaser without the necessity of QBW intervention. If Builderfails or refusesto perform its obligations in accordancewith the Limited Warranty Agreement, QBW will perform those obligations; however, Builder agrees to reimburse QBW and/or its insurerforall expenses incurred in performing those obligations, including, but not limited to costs of materials, cost of collection, labor, architect's fees, engineering fees, and attorney's fees. QBW reserves all rights of subrogation. If the Builder repairs a major structural defect during year 1 or 2, QBW must be notified. Once notified, QBW will perform a compliance inspection. QBW agrees to perform its obligations pursuant to the Limited Warranty Agreement in years three through ten, provided that the defect that is the subject of the Purchaser's claim did not occur within the first two years and was not concealed or cosmetically or improperly repaired by the Builder during those two years. Builder is not responsible for any damage caused by a major structural defect, as defined in the Limited Warranty Agreement, occurring after the expiration of the first two years of the Limited Warranty Agreement provided the defect was not concealed or cosmetically or improperly repaired during those two years. QBW will hold the-Builder harmless for the reasonable cost of repairing or replacing such defects, and against the payment of any money judgment, order or decrees made against Builder for the repair of the defect. 3. Builder is authorized to advertise its membership in the QBW Warranty Program and to use its Logo in its business, provided that any reference to QBW or its insurer, whether contractual or advertising copy, be approved by QBW in writing in advance of its use. - - - • SECTION D. INFORMAL DISPUTE PROCEDURE: 1. Builder should be aware that the Limited Warranty Agreement provides for an informal dispute settlement and arbitration procedure to resolve complaints by purchasers under the Limited Warranty Agreement. Builder should become familiarwith the settlement procedures in order to be aware of its rights and responsibilities. Builder agrees to cooperate fully in the procedure and to be bound by and to comply with any decision of an independent third party, or arbitrator. If the Builderfails to perform its obligations hereunder in a timely and good and workmanlike manner, such failure shall be considered to be a refusal to perform governed by paragraph C.2 hereof. 2. The Builder agrees to pay all fees charged in connection with the informal dispute settlement and arbitration procedures. SECTION E. TERMS GOVERNING OPERATION AND INTERPRETATION: 1. Builder agrees to perform its obligations under this Agreement in a timely manner. However, time provided for performance of obligations hereundershall be extended by events not subject to control by the person obligatedto perform. Such events include acts of God or the public enemy, or, riot, civil commotion or governmental conduct. 2. Descriptive headings as to the contents of particular provisions of this Agreement are intended for convenience only and are not to be considered in construing this instrument. 3. This Agreement shall not constitute or be considered an agency, employer-employee relationship, joint ventureor partnership between the parties. None of the parties, nor any of their employees or agents, shall have the authority to bind or obligate the other party except as provided by this Agreement. 4. Should any provisions of this Agreement be determined by a court of competent jurisdiction to be unenforceable, that determination will not affect the validity of the remaining provisions. 5. This Agreement shall be interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania. All suits instituted under this Agreement shall be brought in Pennsylvania in a court of competent jurisdiction. Builder hereby consents to the personal jurisdiction of the Pennsylvania courts. For Builders who are licensed in the state of New Jersey, note that this agreement shall be interpreted and enforced in accordance with the laws of New Jersey; for all homes enrolled with an address in New Jersey. 6. Builder shall not assign this Agreement without the prior written consent of QBW. Builder hereby irrevocably a' ~rizes and empowers any attorney or and urt of record of Pennsylvania or elsewhereto appearforand con. ,~~ judgmentagainstBuilderfor all amounts ~~. which Builder may become liable to QBW for the breach of this Agreement, as evidenced by an affidavit signed by an officer of QBW setting forth the amounts then due, plus attorney's fees incurred by QBW, with costs of suit and release of errors. Such authority shall not be exhausted by any one exercise thereof but judgment may be confessed as aforesaid from time to time as often as there is a default. Remedies stated herein are elective and not exclusive and QBW may elect to proceed under this or any other paragraph in this Agreement. 6. Suspension or Termination. QBW may terminate, or at its option suspend, Builder's participation in QBW's Warranty Program, or any entity or individual which Builder is affiliated, if QBW determines that Builder has done any of the following; which shall be deemed a breach of this Agreement. (a) fails to comply fully with all provisions of this Agreement; (b) fails to perform any of its obligations under this Agreement, including, but not limited to, cooperating in the operation of the program's informal dispute resolution and arbitration procedure; (c) fails to respond to QBW's notice of a homeowner's complaint; (d) fails to comply with a decision which is rendered pursuant to complaint procedures; (e) fails to provide adequate assurance to QBW within ten (10) days after it receives a written request from QBW forsuch assurance that (within a reasonable timetable established or approved by QBW) it is willing and able to cooperate in dispute settlement and to perform the obligations under any decision which is rendered pursuant to such procedures; (f) fails to otherwise cooperate in the operation of the QBW Program in accordance with the rules and regulations of the QBW Program; (g) fails to provide timely proof of compliance with this Agreement, as and when requested by QBW; (h) faits to comply with QBW Warranty Standards and building codes as stated in the Limited Warranty Agreement; (i) fails to comply with the enrollment procedures established by QBW; (j) fails to provide proof that enrolled homes have been subjected to required inspections; (k) fails to respond to purchaser complaints in a timely manner and as provided in the Limited Warranty Agreement; (I) fails to perform its obligations with professional competence or conduct its operations from a position of financial strength and stability; (m) fails to notify QBW within 30 days of a change in ownership, company name or company standing, financial condition, or of any other material fact which might affect Builder's ability to meet its obligations under this Agreement; (n) fails to meet ethical standards in its dealings with customers; or (o) misstates or misrepresents any information in connection with its application for initial or re-registration. QBW .reserves the option to reinstate terminated affiliates of the primary, terminated Builder if QBW determines that the terminated Builder or its principals are not in a position to control the affiliated Builder. Termination of Builder by QBW shall not affect the rights or obligations of any of the parties to this Agreement with respect to the Warranty Program in effect at the date of termination, subject to the provisions pertaining to voidability. If a Builder is suspended or terminated, he shall not represent himself to be a member of the QBW Warranty Program nor offer the QBW Warranty and shall not use its Logo or refer to the program in any way nor attempt to enroll any home. The Builder shall immediately notify any Buyer currently under contractto purchase a home ofthe suspension or termination and that the QBW Warranty Program has been withdrawn. Upon request, Builder shall immediately return to QBW all materials supplied by QBW and all material making reference to QBW. Should Builder fail to take these steps, it shall indemnify and hold harmless QBW and the insurer against any and all expenses incurred and losses suffered, including but not limited to attorney fees, by either of them as a result. In addition, Buildershall pay interest to QBW at the rate of 18% per annum on all sums due to QBW hereunder if such sums are not paid within 30 days of demand by QBW. Builder may terminate this Agreement upon 30 days advance written notice to QBW. If so terminated by Builder or by QBW, Builder's obligations under this Agreement shall continue asto those homes enrolled during the period in which this Agreement was in effect. 7. Notice. If QBW possesses a reasonable belief that reason exists to terminate or suspend a Builder for violation of this Agreement, QBW may immediately terminate or suspend the Builder by providing it with written notice. If QBW elects to suspend the Builder, such suspension will remain in effect until Builder has cured all defects to QBW's satisfaction, however, QBW reserves the right to terminate any suspended Builder. 8. Voidability. QBW reserves the right to void any enrollment if Builder misstates or misrepresents any information in its application for registration or re-registration or misstates or misrepresents any information in the enrollmentof a particular home or fails to pay any fees due for enrollmentof any particular home or fails to forward an enrollment form for a particular home within 10 days as required. SECTION C. BUILDER'S OBLIGATIONS: 1. Construction Obligations. Following are the Builder's obligations with respect to QBW's Warranty Program: (a) Builder shall construct all homes in conformity with the Warranty Standards provided in the Limited Warranty Agreement, and/or in conformity with approved building codes and otherstandards established by QBW and in effect at the beginning of construction of the enrolled home. QBW reserves the rights to establish special requirements for escrow payments or other means of protection with respect to any homes constructed by Builder which QBW determines to be "High Risks." 7. This Agreement shall inure to tf•, nefit of and be binding upon the heirs, exE ors, administrators, assignee, and successors of the representative parties. 8. This instrument, and security documents and documents referred to or incorporated herein by reference, contains the entire agreement between the parties, and rio statement, promises, or inducements made by either party or agent of either party that is not contained in this written contract shall be valid or binding; and this contract may not be enlarged, modified, or altered except in writing signed by the parties and endorsed hereon. 9. Failure of either party to insist upon compliance with any provision of this Agreement shall not constitute a waiverof that provision. 10. All notices required hereunder must be in writing and sent by certified mail, postage prepaid, return receipt requested, to.the recipient at the respective address shown below, or towhatever address the party may designate in writing. 11. The effective date of this Agreement shall be the date of execution by QBW. ay Date of execution by OBW: Jtme 2, 1994 Builder's Registration No.: 60093 BUILDER: John Kavanagh Gomuany (Name of Builder -please print or type) . DATE ~Y 5, 1994 By (Signature of Authorized Representative -Title) (Please print7(ame/title of executor) P.O. Box 9415, Greensboro, NC 27429-0415 (Address) Copyright 1968 Quality Builders Warranty Corporation AGR~ '4ilENT BETWEEN QUALITY ~ 'ILDERS WARRANTY CORPORATION AND ~BEIILDER AGREEMENT made this 21 day of June ,ig93 between QUALITY BUILDERS WARRANTY CORPORATION, a Pennsylvania corporation, herein referred to as "QBW," and John Kavanagh Company [Name of Builder: (indicate whether a corporation, partnership, individual or other) of Address P Q Rnx 941 ~, graPnShnrClr IBC 2Z42A-CL41~ herein referred to as "Builder." State Zip SECTION A. MEMBERSHIP AND TERM: 1. QBW administers a program whereby home builders registered with QBW enroll homes they construct in the program and purchasers of those homes are protected by a warranty against certain specified defects. 2. In orderto develop and maintain a good reputation for providing protection topurchasers ofwell-built homes, QBW protects and promotes its good-will by careful selection of builders to participate in its warranty program. 3. Builder desires to participate in QBW's warranty program and, to that end, agrees to abide by the provisionsof this Agreement and to conform its behavior to the standards expressed herein and in the Limited Warranty Agreement. Builder warrants that all information supplied to QBW in connection with its application is true and correct. 4: Builder has paid its initial membership fee. Alf registration fees (initial and annual) are set by QBW at its discretion and are non-refundable. 5. QBW, upon executing this Agreement, has accepted Builder as a member of its warranty program, subjectto the Builder's continuing performance of its obligation under this Agreement. 6. The term of this Agreement shall be for one (1) year, commencing on the date executed by QBW. Prior to the expiration of this Agreement, and any extensions thereafter, Builder may apply for re-registration and, upon approval by QBW and payment by Builder of re-registration fee then in effect, the Builder shall continue as a participating memberforanotherone (1) yearterm. If Builder does not re-register, the provisions of Section B, item 6 hereof concerning termination shall be in effect. SECTION B. HOME ENROLLMENT: 1. Requirements. As part of its participation in QBW's warranty program, subject to QBW's acceptance, Builder agrees to enroll in the program every home, Builder, Builder's Principals, or any entity under Builder, Builder's Principals common control constructs in ahy state in which QBW operates and to pay all fees required by QBW in the enrollment process, which fees shall be non-refundable. 2. Procedures. Builder agrees to enroll its homes according to procedures established by QBW. Builder mayenroll homes currently under construction and homes completed but not sold or occupied (as of the date of this Agreement or the date of reacceptance following a period of suspension or non-participation) provided that enrollment is made within 45 days of execution of this Agreement or reacceptance, and QBW has inspected and approved the home. When enrolling other than a detached single family dwelling, Builder shall enroll each individual unit of any multi-unit swelling such as but not limited to duplexes, townhouses and condominiums. For each home enrolled, the Builder shall pay a warranty fee as determined by QBW within the time periods established by QBW. All warranty fees are nonrefundable. A minimum warranty fee of $100.00 shall apply. QBW will provide Builder with a copy of the Limited Warranty Agreement and Enrollment form. Builder and purchaser must complete, sign the Agreement and Enrollment Form at closing, and Builder agreesto furnishQBW with a copy of the signed Enrollment form within ten (10) days of closing. Builder agrees notto charge the purchaser directly the cost of the enroll men[ fee. A home will not be considered enrolled until QBW receives the fully executed and completed Enrollment Form, payment of all fees, and an approved final inspection. 3. Reservation of Power of Review. QBW reserves the right to reject any home submitted for enrollment in the program if (a) the Builder is not a member in good standing; (b) the home is not constructed in accordance with the Warranty Standards or building codes specified in the Limited Warranty Agreement; (c) the Builder did not observe the enrollment procedures; (d) misstates or misrepresents any information; (e) in any way fails to comply with the terms of this Agreement. 4. Assignment of Rights. If a purchaser files a Complaint pursuant to the Limited Warranty Agreement, the Bui Ider, upon the request of QBW or its insurer, shall immediately assign to QBW or its insurer, as the case may be, any rights which Builder may have against a supplier, manufacturer, subcontractor orother person for work performed or materials supplied in connection with that claim. Builder agrees to cooperate fully with QBW in the event an assignment occurs and to provide QBW with all information which it requests pertaining to the claim. If Builder fails to so cooperate, Builder agrees to compensate and indemnify QBW for any damages sustained by such lack of cooperation. Furthermore, Builder shall assign and deliver all manufacturer's warranties to the purchaser of the home. 5. Breach and Remedy. If Builder fails to enroll any eligible home as required by this Agreement, QBW may seek specific enforcement or other appropriate relief in legal or equitable proceedings, even if this Agreement has expired or terminated. Furthermore, Builder agrees to indemnify and hold harmless QBW and its insurer for any losses or any damages QBW may suffer as a result of Builder's breach of this Agreement and such losses andcosts shall include reasonable attorney's fees and expert witness fees. Builder hereby irrevocably aut' ~zes and empowers any attorney or any. ~Irt of record of Pennsylvania or elsewhere to appearfor and conf~. ,udgment against Builderforall amounts t ;hick Builder may become liable to QBW forthe breach of this Agreement, as evidenced by an affidavit signed by an officer of QBW setting forth the amounts then due, plus attorney's fees incurred by QBW, with costs of suit and release of errors. Such authority shat l not be exhausted by any one exercise thereof but judgment may be confessed as aforesaid from time to time as often as there is a default. Remedies stated herein are elective and not exclusive and QBW may elect to proceed under this or any other paragraph in this Agreement. 6. Suspension or Termination. QBW may terminate, or at its option suspend, Builder's participation in QBW's Warranty Program, or any entity or individual which Builder is affiliated, if QBW determines that Builder has done any of the following, which shad be deemed a breach of this Agreement. (a) fails to comply fully with ail provisions of this Agreement; (b) fails to perform any of its obligations under this Agreement, including, but not limited to, cooperating in the operation of the program's informal dispute resolution and arbitration procedure; (c) fails to respond to QBW's notice of a homeowner's complaint; (d) fails to comply with a decision which is rendered pursuant to complaint procedures; (e) fails to provide adequate assurance to QBW within ten (10} days after it receives a written request from QBW for such assurance that (within a reasonable timetable established or approved by QBW) it is willing and able to cooperate in dispute settlement and to perform the obligations under any decision which is rendered pursuant to such procedures; (f) fails to otherwise cooperate in the operation of the QBW Program in accordance with the rules and regulations of the QBW Program; (g) fails to provide timely proof of compliance with this Agreement, as and when requested by QBW; (h) fails to comply with QBW Warranty Standards and building codes as stated in the Limited Warranty Agreement; {i) fails to comply with the enrollment procedures established by QBW; (j) fails to provide proof that enrolled homes. have been subjected to required inspections; (k} fails to respond to purchaser complaints in a timely manner and as provided in the Limited Warranty Agreement; (I) fails to perform its obligations with professional competence or conduct its operations from a position of financial strength and stability; (m) fails to notify QBW within 30 days of a change in ownership, company name or company standing, financial condition, or of any other material fact which might affect Builder's ability to meet its obligations under this Agreement; (n) fails to meet ethical standards in its dealings with customers; or (o) misstates or misrepresents any information in connection with its application for initial or re-registration. QBW reserves the option to reinstate terminated affiliates of the primary, terminated Builder if QBW determines that the terminated Builder or its principals are nat in a position to control the affiliated Builder. Termination of Builder by QBW shall not affect the rights or obligations of any of the parties to this Agreement with respect to the Warranty Program in effect at the date of termination, subject to the provisions pertaining to voidability. If a Builder is suspended or terminated, he shat{ not represent himself to be a member of the QBW Warranty Program nor offerthe QBW Warranty and shall not use its Logo or refer to the program in any way nor attempt to enroll any home. The Builder shall immediately notify any Buyer currently undercontract to purchase a home of the suspension or termination and that the QBW Warranty Program has beer- withdrawn. Upon request, Buildershall immediately return to QBW all materials supplied by QBW and all material making reference to QBW. Should Builder fail to take these steps, it shall indemnify and hold harmless QBW and the insurer against any and all expenses incurred and losses suffered, including but not limited to attorney fees, by either of them as a result. In addition, Buildershall pay interesttoQBW atthe rate of 18% perannum on a!I sums due to QBW hereunder ifsuch sums are not paid within 30 days of demand by QBW. Builder may terminate this Agreement upon 30 days advance written notice to QBW. If so terminated by Builder or by QBW, Builder's obligations under this Agreement shall continue as to those homes enrolled during the period in which this Agreement was in effect. 7. Notice. If QBW possesses.a reasonable belief that reason exists to terminate or suspend a Builder for violation of .this Agreement, QBW may immediately terminateorsuspend the Builder by providing itwith written notice. If QBW elects to suspend the Builder, such suspension will remain in effect until Builder has cured all defects to QBW's satisfaction, however, QBW reserves the right to terminate any suspended Builder. 8. Voidability. QBW reserves the right to void any.enrollment if Builder misstates or misrepresents any information in -its application for registration orre-registration ormisstates or misrepresents any information in the enrollment of a particular home or fails to pay any fees due for enrollment of any particular home or fails to forward an enrollment form for a particular home within 10 days as required. SECTION C. BUILDER'S OBLIGATIONS: 1. Construction Obligations. Following are the Builder's obligations with respect to QBW's Warranty Program: (a) Builder shall construct all homes in conformity with the Warranty Standards provided in the Limited Warranty Agreement, and/or in conformity with approved building codes and other standards established by QBW and in effect at the beginning of construction of the enrolled home. QBW reserves the rights to establish special requirements for escrow payments or other means of protection with respect to any homes constructed by Builder which QBW determines to be "High Risks." (b} Builder agrees to hau~ 'I homes inspected, as required by QBW, ~ ' to pay all fees for the inspection and to provide evidence of is action as and when required by QBW. QB , sail provide inspectors or shat l approve governmental inspectors. (c) QBW shall have the right to perform spot inspections to verify Builder's compliance with this Agreement and Builder agrees to cooperate. (d) The Builder agrees to indemnify and hold harmless QBW and/or its Insurer for any losses or damages QBW and/or its Insurer may suffer as a result of the use of fire-retardant treated plywood on any building enrolled under the QBW Ten Year Warranty Program. This will include all claims and liability for losses, damages and expenses which QBW and/or its Insurer maysustain, incur, pay or be liable for by means of any investigation, settlement or Litigation of any claim or action which may be raised, made or brought due to the potential defects caused or likely to be caused by use of the subject plywood. (e) If the Builder is informed by QBW that it is building in an area designated as one with active soil conditions, the Builder agrees to obtain such soils investigations and reports as may be required by QBW. If such reports indicate a need forspecial foundation design the Builder agrees to construct the foundation accordingto the design of a registered professional engineer to take into account the conditions disclosed by the soil tests. 2. Warranty Obligations. Builder agrees to perform all obligations arising from this Agreement and the Limited Warranty Agreement. The Builder shall at its own expense perform all obligations asset forth in the G~BW Warranty Program and this Agreement which includes meeting the warranty standards upon notice from the Purchaserwithout the necessity of QBW intervention. If Builderfails or refuses to perform its obligations in accordance with the Limited Warranty Agreement, QBW will perform those obligations; however, Builderagrees to reimburse QBW and/or its insurerforall expenses incurred in performing those obligations, including, but not limited to costs of materials, cost of collection, labor, architect's fees, engineering fees, and attorney's fees. QBW reserves all rights of subrogation. If the Builder repairs a majorstructural defect during year 1 or 2, QBW must be notified. Once notified, QBW wi{I perform a compliance inspection. QBW agrees to perform its obligations pursuant to the Limited Warranty Agreement in years three through ten, provided that the defect that is the subject of the Purchaser's claim did not occur within the first two years and was not concealed or cosmetically or improperly repaired by the Builder during those two years. Builder is not responsible for any damage caused by a major structural defect, as defined in the Limited Warranty Agreement, occurring after the expiration of the first two years of.the Limited Warranty Agreement provided the defect was notconcealed or cosmetically or improperly repaired during those two years. QBW will hold the Builder harmless for the reasonable cost of repairing or replacing such defects, and against the payment of any money judgment, order or decrees made against Builder for the repair of the defect. 3. Builder is authorized to advertise its membership in the QBW Warranty Program and to use its Logo in its business, provided that any reference to QBW or its insurer,whether contractual or advertising copy, be approved by QBW in writing in advance of its use. SECTION D. INFORMAL DISPUTE PROCEDURE: 1. Builder should be aware that the Limited Warranty Agreement provides for an informal dispute settlement and arbitration procedure to resolve complaints by purchasers under the Limited Warranty Agreement. Builder should become familiar with the settlement procedures in order to be aware of its rights and responsibilities. Builderagrees to cooperate fully in the procedure and to be bound by and to comply with any decision of an independentthird party, or arbitrator. If the Builder fails to perform its obligations hereunder in atimely and good and workmanlike manner, such failure shall be considered to be a refusal to perform governed by paragraph C.2 hereof. 2. The Builder agrees to pay all fees charged in connection with the informal dispute settlement and arbitration procedures. SECTION E. TERMS GOVERNING OPERATION AND INTERPRETATION: 1. Builder agrees to perform its obligations under this Agreement in a timely manner. However, time provided for performance of obligations hereundershall be extended by events notsubject to control by the person obligated to perform. Such events include acts of God or the public enemy, or, riot, civil commotion or governmental conduct. 2. Descriptive headings as to the contents of particular provisions of this Agreement are intended for convenience only and are not to be considered in construing this instrument. 3. This Agreement shall not constitute or be considered an agency, employer-employee relationship, joint venture or partnership between the parties. None of the parties, nor any of their employees or agents, shall have the authority to bind or obligate the other party except as provided by this Agreement. 4. Should any provisions of this Agreement be determined by a court of competent jurisdiction to be unenforceable, that determination will not affect the validity of the remaining provisions. 5. This Agreement shall be interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania. All suits instituted under this Agreement shall be brought in Pennsylvania in a court of competent jurisdiction. Builder hereby consents to the personal jurisdiction of the Pennsylvania courts. For Builders who are licensed in the state of New Jersey, note that this agreement shall be interpreted and enforced in accordance with the laws of New Jersey; for all homes enrolled with an address in New Jersey. 6. Builder shall not assign this Agreement without the prior written consent of QBW. 7. This Agreementshall inure to the' 'fit of and be binding upon the heirs, exec ~, administrators, assignee, and successors of the representative pay lies. 8. This instrument, and security documents and documents referred to or incorporated herein by reference, contains the entire agreement between the parties, and no statement, promises, or inducements made by either party or agent of either party that is not contained in this written contract shall be valid or bind ing; and th is contract may not be enlarged, modified, or altered except in writing signed by the parties and endorsed hereon. 9. Failure of either party to insist upon compliance with any provision of this Agreement shall not constitute a waiverof that provision. 10. All notices required hereunder must be in writing and sent by certified mail, postage prepaid, return receipt requested, to.the.recipient at the respective address shown below, or to whatever address the party may designate in writing. 11. The effective date of this Agreement shall.be the date of execution by QBW. By Date of execution by QBW: Builder's Registration No.: 60093 BUILDER: John Kavanaah Com any (Name of Builder -please print or type) DATE ~ ' By gnature of Authorized Representative -Title) B. John Kavanagh (Please print name/title of executor) P (1 RQx A41F (a,~^aanchnrn I(' ~~~~Q ~~,~~ {Address) Copyright 7988 Quality Builders Warranty Corporation ;~~ BUILDER AGREEMENT AGREEMENT made this 7th day of June ~ 19 95 , between QUALITY BUILDERS WARRANTY CORPORATION, a Pennsylvania corporation, herein referred to as "QBW,' and John Kavanagh Company Name of Builder: (indicate whether a corporation, partnership, individual or other) of Address P.o. Box 9415 Greensboro rrc 27408 herein referred to as "Builder." State Zip SECTION A. MEMBERSHIP AND TERM: 1 _QBW administers a program whereby home builders registered with QBW enroll homes they construct in the program and purchasers of those homes are protected by a warranty against certain specified defects. 2. In order to develop and maintain a good reputation for providing protection to purchasers of well-built homes; QBW protects and promotes its good-will by careful selection of builders to participate in its warranty program. 3. Builder desires to participate in QBW's warranty program and, to that end, agrees to abide by the provisions of this Agreement and to conform its behavior to the standards expressed herein and in the Limited Warranty Agreement. Builder warrants that all information supplied to QBW in connection with its application is true and correct. 4. All registration fees (initial and annual rescreening) are set by QBW at its discretion and are non-refundable. 5. QBW, upon executing this Agreement, has accepted Builder as a member of its warranty program, subject to the Builder's continuing performance of its obligation under this Agreement. 6. Builder's membership shall commence on the date of Execution by QBW and shall continue until terminated by either party in accordance with the terms of this agreement. QBW reserves the right to rescreen Builder annually. If QBW determines that Builder does not meet its approval standards upon rescreening then QBW may terminate Builder's membership and the provisions of Section B, paragraph 6, shall be in effect. SECTION B. HOME ENROLLMENT: 1. Requirements. As part of its participation in QBW's warranty program, subject to QBW's acceptance, Builder agrees to enroll in the program every home, Builder, Builder's Principals, or any entity under Builder's, or Builder's Principals common control constructs in any state in which QBW operates and agrees to pay all fees required by Q8W in the enrollment process, which fees shall be non-refundable. 2. Procedures. Builder agrees to enroll its homes according to procedures established by QBW. Builder may enroll homes currently under construction and homes completed but not sold or occupied (as of the date of this Agreement or the date of reacceptance following a period of suspension or non-participation) provided that enrollment is made within 45 days of execution of this Agreement or reacceptance, and QBW has inspected and approved the home. When enrolling other than a detached single family dwelling, Builder shall enroll each individual unit of any multi- unit dwelling such as but not limited to duplexes, townhouses and condominiums. For each home enrolled, the Builder shall pay a warranty fee as determined by QBW within the time periods estab- lished by QBW. All warranty fees are non-refundable. A minimum warranty fee of $100.00 shall apply. QBW will provide Builder with a copy of the Limited Warranty Agreement and Enrollment form. Builder and pur- chaser must complete, sign the Agreement and Enrollment Form at closing, and Builder agrees to furnish QBW with a copy of the signed Enrollment form within ten (10) days of closing. Builder agrees not to charge the purchaser direct- ly the cost of the enrollment fee. A home will not be considered enrolled until QBW receives and approves the fully exe- cuted and completed Enrollment Form, payment of alt fees, and an approved final inspection. 3. Reservation of Power of Review. QBW reserves the right to reject any home submitted for enrollment in the program if (a) the Builder is .not a member in good standing; (b) the home is not constructed in accordance with the Warranty Standards or building codes specified iri the Limited Warranty Agreement; (c) the Builder did not observe the enroll- ment procedures; (d} misstates or misrepresents any information; (e) in any way fails to comply with the terms of this Agreement. 4. Assignment of Rights. If a purchaser files a Complaint pursuant to the Limited Warranty Agreement which the Builder fails to correct, the Builder hereby assigns to QBW or its insurer, as the case may be, any rights which Builder may have against a supplier, manufacturer, subcontractor or other person for work performed or materials supplied in con- nection with that claim. Builder agrees to cooperate fully with QBW and to provide QBW with all information which it requests pertaining to the claim. if Builder fails to so cooperate, Builder agrees to compensate and indemnify QBW for any damages sustained by such lack of cooperation . 5. Breach and Remedy. If Builder fails to enroll any eligible home as required by this Agreement, QBW.may seek specif- ic enforcement or other appropriate relief in legal or equitable proceedings, even if this Agreement has been termi- nated. Furthermore, Builder agrees to indemnify and hold harmless QBW and its insurer for any losses or any dam- ages QBW may suffer as a result of Builder's breach of this Agreement and such lasses and costs shalt include reasonable attorney's fees and expert witness fees. Builder hereby irrevocably authorizes and empowers any attorney or any court of record of Pennsylvania or else- where to appear for and confess judgment against Builder for all amounts for which Builder may become liable to QBW I ~ JI for the breach of this Agreement, as evidenced by an affidavit signed by an officer of QBW setting forth the.arnounts then due, plus attorney's fees incurred by QBW, with costs of suit and release of errors. Such authority shall not be exhausted by any one exercise thereof but judgment may be confessed as aforesaid fram time to time as often as there is a default. Remedies stated herein are elective and not exclusive and QBW may elect to proceed under this or any other paragraph in this Agreement. 6. Suspension or Termination. QBW may terminate, or at its option suspend, Builder's participation in QBW's Warranty Program, or any entity or individual which Builder is affiliated, if QBW determines that Builder has done any of the fol- lowing, which shall be deemed a breach of this Agreement. (a) fails to comply fully with all provisions of this Agreement; (b) fails to perform any of its obligations under this Agreement, including, but not limited to, cooperating in the opera- tion of the program's informal dispute resolution and arbitration procedure; (c) fails to respond to QBW's notice of a homeowner's complaint; (d) fails to comply with a decision which is rendered pursuant to complaint procedures; (e) fails to provide adequate assurance to QBW within ten (10) days after it receives a written request from QBW for such assurance that (within a reasonable timetable established or approved by QBW) it is willing and able to coop- erate in dispute settlement and to perform the obligations under any decision which is rendered pursuant to such procedures; (f) fails to otherwise cooperate in the operation of the QBW Program in accordance with the rules and regulations of the QBW Program; (g} fails to provide timely proof of compliance with this Agreement, as and when requested by QBW; (h) fails to comply with QBW Warranty Standards and building codes as stated in the Limited Warranty Agreement; (i) fails to comply with the enrollment procedures established by QBW; (j} fails to provide proof that enrolled homes have been subjected to required inspections; (k} fails to respond to purchaser complaints in a timely manner and as provided in the Limited Warranty Agreement; (1) fails to perform its obligations with professional competence or conduct its operations from a position of financial strength and stability; (m) fails to notify QBW within 30 days of a change in ownership, company name or company standing, financial con- dition, or of any other material fact which might affect Builder's ability to meet its obligations under this Agreement; (n) fails to meet ethical standards in its dealings with customers; or (o) misstates or misrepresents any information m connection with its application or in the rescreening process. QBW reserves the option to reinstate terminated affiliates of the primary, terminated Builder if QBW determines that the terminated Builder or its principals are not in a position to control the affiliated Builder. Termination of Builder by QBW shall not affect the rights or obligations of any of the parties to this Agreement with respect to the Warranty Program in effect at the date of termination, subject to the provisions pertaining to voidability. If a Builder is suspended or terminated, he shall not represent himself to be a member of the QBW Warranty Program nor offer the QBW Warranty and shall not use its Logo or refer to the program in any way nor attempt to enroll any home. The Builder shall immediately notify any Buyer currently under contract to purchase a home of the suspen- sion or termination and that the QBW Warranty Program has been withdrawn. Upon request, Builder shall immediate- ly return to QBW all materials supplied by QBW and all material making reference to QBW. Should Builder fail to take these steps, it shall indemnify and hold harm{ess QBW and the insurer against any and all expenses incurred and loss- es suffered, including but not limited to attorney fees, by either of them as a result. in addition, Builder shall pay inter- est to QBW at the rate of~ 18% per annum on all sums due to QBW hereunder if such sums are not paid within 30 days of demand by QBW. Builder may ter~pinate this Agreement upon 30 days advance written notice to QBW. if so terminated by Builder or by QBW, Builder's obligations under this Agreement shall continue as to those homes enrolled during the period in which this Agreement was in effect. ++ 7. Notice. If QBW possesses a reasonable belief that reason exists to terminate or suspend a Builder for violation of this Agreement, QBW may immediately terminate or suspend the Builder by providing it with written notice. If QBW e{ects to suspend the Builder, such suspension will remain in effect until Builder has cured aN defects to QBW's satisfaction, however, QBW reserves-the right to terminate any suspended Builder. 8. Voidab(lity. QBW reserves the right to void any enrollment if Builder misstates or misrepresents any information in its application or in the rescreening prACess or misstates or misrepresents any information in the enrollment of a particu- lar home or fails to pay any fees due for enrollment of any particular home or fails to forward an enrollment form for a particular home within 10 days as required. SECTION C. BUILDER'S OBLIGATIONS: 1. Construction Obligations, Following are the Builder's obligations with respect to QBW's Warranty Program: (a} Builder shall construct ail homes in conformity with the Warranty Standards provided in the Limited Warranty Agreement, and/ or in conformity with approved building codes and other standards established by QBW and in effect at the beginning of construction of the enrolled home. QBW reserves the rights to establish special require- ments for escrow payments or other means of protection with respect to any homes constructed by Builder which QBW determines to be "High Risks." (b) Builder agrees to have all homes inspected, as required by QBW, and to pay ail fees for the inspection and to pro- vide evidence of inspection as and when required by QBW. QBW shall provide inspectors or shall approve gov- ernmental inspectors. (c) QBW shall have the right to perform spot inspections to verify Builder's compliance with this Agreement and Builder agrees to cooperate. (d) The Builder agrees to indemnify and ho{d harmless OBW and/or its Insurer for any losses or damages QBW and/or its Insurer may suffer as a result of the use of fire retardant treated plywood on any building enrolled under the QBW Ten Year Warranty Program. This will include all claims and liability for losses, damages and expenses which QBW and/or its Insurer may sustain, incur, pay or be liable for by means of any investigation settlement or litigation of any claim or action which may be raised, made or brought due to the potential defects caused or likely to be caused by use of the subject plywood. (e) If the Builder is informed by QBW that it is building in an area designated as one with active soil conditions, the Builder agrees to obtain such soils investigations and reports as may be required by QBW, If such reports indicate a need for special foundation design the Builder agrees to construct the foundation according to the design of a registered professional engineer to take into account the conditions disclosed by the soil tests. 2. Warranty Obligations. Builder agrees to perform all obligations arising from this Agreement and the Limited Warranty Agreement. The Builder shall at its own expense perform all obligations as set forth in the QBW Warranty Program and this Agreement which includes meeting the warranty standards upon notice from the Purchaser without the necessity of QBW intervention. If Builder fails or refuses to perform its obligations in accordance with the Limited Warranty Agreement, QBW will perform those obligations; however, Builder agrees to reimburse QBW and/or its insurer for all expenses incurred in performing those obligations, including, but not limited to costs of materials, cost of collection, labor, architect's fees, , engineering fees, and attorney's fees. QBW reserves all rights of subrogation. If the Bui{der repairs a major structurai defect during year 1 or 2, QBW must be notified. Once notified, QBW will perform a compliance inspection. QBW agrees to perform its obligations pursuant to the Limited Warranty Agreement in years three through ten pro- vided that the defect that is the subject of the Purchaser's claim did not occur within the first two years and was not concealed or cosmetically or improperly repaired by the Builder during those two years. Builder is not responsible for any damage caused by a major structural defect, as defined in the Limited Warranty Agreement, occurring after the expiration of the first two years of the Limited Warranty Agreement provided the defect was not concealed or cosmetically or improperly repaired during those two years. QBW will hold the Builder harmless for the reasonable cost of repairing or replacing such defects, and against the payment of any money judgment, order or decrees made against Builder for the repair of the defect. 3. Builder is authorized to advertise its membership in the QBW Warranty Program and to use its Logo in its business, pro- vided that any reference to QBW or its insurer, whether contractual or advertising copy, be approved by QBW in writ- ing in advance of its use. SECTION D. INFORMAL DISPUTE PROCEDURE: 7. Builder should be aware that the Limited Warranty Agreement provides for an informal dispute settlement and arbitra- tion procedure to resolve complaints by purchasers under the Limited Warranty Agreement. Builder should become familiar with the settlement procedures in order to be aware of its rights and responsibilities. Builder agrees to coop- erate fully in the procedure and to be bound by and to comply with any decision of an independent third party, or arbi- trator. If the Builder fails to perform its obligations hereunder in a timely and good and workmanlike manners such fail- ure shall be considered to be a refusal to perform governed by paragraph C.2 hereof. 2. The Builder agrees to pay all fees charged in connection with the informal dispute settlement and arbitration proce- dures. SECTION E. TERMS GOVERNING OPERATION AND INTERPRETATION: 1. Builder agrees to perform its obligations under this Agreement in a timely manner. However, time provided for perfor- mance of obligations hereunder shall be extended by events not subject to contro4 by the person ob{igated to perform. Such events include acts of God or the public enemy, or, riot, civil commotion or governmental conduct. 2. Descriptive headings as to the contents of particular provisions of this Agreement are intended for convenience only and are not to be considered in construing this instrument. 3. This Agreement shall not constitute or be considered an agency, employer-employee relationship, joint venture or part- nership between the parties. None of the parties, nor any of their employees or agents, shall have the authority to bind or obligate the other party except as provided by this Agreement. 4. Should any provisions of this Agreement be determined by a court of competent jurisdiction to be unenforceable, that determination will not affect the va{idity of the remaining provisions. 5. This Agreement shall be interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania. All suits instituted under this Agreement shall be brought in Pennsylvania in a court of competent jurisdiction. builder hereby consents to the personal jurisdiction of the Pennsylvania courts. For Builders who are licensed in the state of New Jersey, note that this agreement shall be interpreted and enforced in accordance with the laws of New Jersey; for all homes enrolled with an address in New Jersey. 6. Builder shall not assign this Agreement without the prior written consent of QBW. 7. This Agreement shall insure to the benefit of and be binding upon the heirs, executors, administrators, assignee, and successors of the representative parties. 8. This instrument, and security documents and documents referred to or incorporated herein by reference, contains the entire agreement between the parties, and no statement, promises, or inducements made by either party or agent of either party that is not contained in this written contract shall be valid or binding; and this contract may not be enlarged, modified, or altered except in writing signed by the parties and endorsed hereon. 9. Failure of either party to insist upon compliance with any provision of this Agreement shall not constitute a waiver of that provision. 10. All notices required hereunder must be in writing and sent by certified mail, postage prepaid, return receipt request- ed, to the recipient at the respective address shown below, or to whatever address the party may designate in writing. 11. The effective date of this Agreement.~hall be the date of,,execution by QBW. QUAL}~%4~1;{L/pE,(~S"V1tP,(F~ftANTY CORPORATION Isy President Date of execution by QBW: June 2 1995 Builder's Registration No.: 60093 BUILDER: John Kavanagh Company (Name of Builder -please print or type) DATE June 7, 1995 By of Authorized Representative -Title) (Please print name/title of executor) P.O. Box 9415, Greensboro, NC 27408 (Address) Copyright 1988 Quality Builders Warranty Corporation QBW FORM 050 3/95 F 1 y 4- Y; t , h S C 0 R P 0 R A T! 0 N P.O. Box 271 Camp Hill, PA 17001-0271 telephone: 717 737-2522 fax: 717 737-4288 January 05, 1999 SENT VIA FAX (336) 370-4137 John Kavanagh Company P.O. Box 9415 Greensboro, NC 27429 Attn: John Kavanagh, RE: Liberty Loyalty Program Dear John: I am writing in follow up to our recent .telephone conversation. Enclosed is an addendum to enable you to participate in the Liberty Loyalty Program. Please sign and return-the document and upon receipt I will instruct our Customer Service Department to put your new rate into effect immediately. If you have any questions please do not hesitate to contact me. Very truly yours, {___.... ~h-°~`'" John A. Gill, Esq. Vick President/General Counsel JAG:dll Enclosure ,~ x~t~ i ~~~T ~ Deliveries: 325 N. Second Street: Wormleysburg, PA 17043 ADDENDUM This addendum, is between Quality Builders Warranty Corporation (QBW) and JOHN KAVANAGH COMPANY referred to as "Builder". Builder is a member in the QBW 10 Year Limited Warranty Program. QBW and Builder desire to modify the Agreement and their respective rights and obligations thereunder. Now, WHEREFORE, QBW and Builder, in exchange for the mutual covenants contained herein and intending to be legally bound hereby agree as follows: 1. The above recitals are an integral part of this Addendum and are incorporated herein. 2. Builder shall maintain its membership in QBW's Limited Warranty Program for an additional period of Three (3} years to commence upon the below date and submit for enrollment homes which Builder constructs during that time. Builder may not terminate his participation in the QBW Program within that period unless consented to by QBW. 3. Builder shall pay an annual membership fee. 4. Builder's rate will be $1.60 per thousand. The rate will remain in effect for the period of this Addendum. 5. If in the unforeseen event of a rate increase, caused by Legislation, or situations beyond the control of QBW, Builder has the right to terminate participation with no penalties. 6. Builder agrees to enroll all homes constructed by them, or any affiliates, in the QBW program_ If Builder or any affiliate fails to enroll all homes, for the term specified in #2 above, Builder agrees to pay QBW the difference between his qualified rate based on actual volume and the discounted rate specified in #4 above for all homes enrolled during this agreement. Payment must be paid within 30 days of discovery of breach or Builders premature termination of this agreement. 7. If the terms contained in this Addendum are inconsistent with the Builder Agreement, the terms of this Addendum shall govern. IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be executed by their duly authorized officers, as of this day of 1999. QUALITY BUILDERS WARRANTY CORP. BY: President JOHN KAVANAGH COMPANY BY: i TILE No. 887 02104 '99 10:48 ID~JOHN KAVANAGH C0~1PANY 3363704137 PAGE 1 John Kavanagh Company P.O. Box 9415 Greensboro, NC 27429 Fax Number: (336) 370-4137 Fax Transmittal Cover Sheet To: ~o h r. ~', ~ 1 From: ~..,a.~o... ~ rnn n ~ `a .( Company: Q (~,L~~ Date: ~ / 4 /99 Fax Number: (`~ 1 ~ ) 131 - ~~g,g$ Time: y b'. x..15 Number of pages, including this cover page: _~ Comments: ~iP_ : L:~.Inp ~ -+-•.~ L~LI a~( 1~ 1n r c~.r,r, ~^1--}O~I`~~c~.Q (>tiP bp -1=~n~~ O. ~~OnPn~ ~n~n~.P,~rLLr„i- --- ~1 l lU f ~ t] V_Ar~ r ~ ~ rr~ ; -I-w 4.~ (~ r r n~t.a ~ I' l1 a ~Q.~ t`~. 1 ~~1~ Cc~t 1 rr~e . ~1~, a.nl~s ~. ~,~, ~ ~,~ ***Please cal! (336) 272-9904 if you do not receive all pages*** E?~ H 1 f3 I T (, GGA-filet-5 QQQ 5 Gf:51 ZZ~Z7Gld5 Z7 4d% P R1 F I LF No . 887 02i0~i ' 99 10 ~ 49 I D ~ JOHN KAtIANAGH CU~1F'ANY :isb.5 r ~JU1~ r r Hvc c. ` ~ ~ JAN-05-1999 15 56 aLITY BUILDERS WARRANTY 71? 737 4288 P.03i03 ~ADD$ZTDUN' This addendum, is between Quality Builders Warranty Corporation (QBw) and JOr1ty KAVAfIAGH COMPANY referred to as "Builder". Builder 1s a member in the QTjw 10 Year Limited Warranty Program. QBW and Builder de5lre to modify the Agreement and their respective rights and obligations thereunder. Now, WHEREFORE, QBW and Builder, in exchang® far the mutual covenants contained herein and intandinq to be legally bound heraby agree as follows: 1. The above recitals are an integral p8rt of this lddendum and are incorporated herein. 2. Builder shall maintain its membership in QBW's Limited Warranty Pragraru for an additional period of Three (3) year's to commence upon the below date and submit for enrollment homes which Builder constructs during that time. Builder may not terminate his participation in the QHW Program within that period unless consent®d to by QBW, 3. Builder shall pay an annul meo~bership fee. 4. Huilder~s rate will be 31.60 pet thousand. The rate will remain in effect for the period of this Addendum. 5, if in the unforeseen event of a rate increase, caused by Legislation, or situations beyond the control of QHW, Buildet haS thS right to terminate participation with no penalties_ 6. Builder agrees to enroll all homes constructed by them, or any affiliates, in the QBw program. IP Suild®r or any affiliat® fai13 to enroll all homes, for the term specified in #/2 above, Builder agrees to gay 4BW the diE[erence between his qualified rate based on actual volume and the discounted rate specified in f!4 above for all homes enrolled during this agreement. Payment must be paid within 30 days of discovery of breach ar Builders premature tera-ination of this agreement. 7. if the terms contained in this lddendum are inconsistent with the Builder Agreement, the terms of this Addendum shall govern. TN WITNE83 WHEREOF, the parties hereCo have caused this Addendum to be executed by their duly authorized officers, as of this 4th day of February 1999. QUALITY HUII,DB(~8 WARRANTY CORP. V't~~~ Presi eat JOtIN .KAVANAGH COMPANY BY: ~3 0105 '99 15 =54 Tn7a~_. P. R3 FEB-04-1999 10 52 3363704137 95~ P..02~- gLl.~~.IT4' ~UF~.DERS F,V 412R~~'T~' C 0 R P 0 R A T I O N 325 N. Second Street, Wormleysburg, PA 17043 telephone: 717 737-2522 fax: 717 737-4288 February 4, 2002 SENT VIA FAX: 33b-370-4137 Mr. John Kavanagh John Kavanagh Company P.O. Box 945 1810 Pembroke Road Greensboro, NC 27429 Dear Mr. Kavanagh: On February 4, 1999 you signed an Addendum to your Membership Agreement entitling you to a lower rate. I am enclosing a copy of that Addendum for your convenience. That Addendum has now expired but we are able to extend the Addendum entitling you to a lower rate. I have added the extension language to the original Addendum. Please sign and return via fax so we can continue your loyalty rate. As always, thank you for permitting us to be your warranty provider. Very truly yours, __---- Gill, Esquire Gen I Counsel JAG:dll Enclosure ExN~~~r 7 *************** -COMM. =RNAL- ******************* DATE FEB-04-2007 ~**** T[ME 17:22 *** P.01 MODE =MEMORY TRANSMISSION START=FEB-04 17=21 END=FEH-04 17 22 FILE N0.= 136 STN N0. COM RBBR N0. STATION NAMEiTEL.NO. PAGES DURATION 001 OK a 13363704137 0031003 00 00'31" -~URLITY EUILDERS LJARRANTY- **********************~********~**** -QBW - ***** - 717 737 4288- *~******* QUALI.T'Y BUILDERS "WARRANTY C 0 R P O R A T! 0 N 325 N. Second Street, Wormleysburg, PA 17043 telephone: 717 737-2522 fax: 717 731-4288 FAX TRANSMITTAL SHEET DATE: February 4, 2002 TO: Mr. John Kavanagh John Kavanagh Con~any FROM: John A. Gill, Esquire General Counsel FAX: 33b-370-4137 RE: Liberty Loyahy Document Extension TRANSMITTAL SHEET IS PAGE I OF 03 PAGE (S) BEING SENT. IF YOU DO NOT RECEIVE THE DESIGNATED NUMBER OF PAGES. PLEASE NOTIFY US IMI~~IEDIATELY. :.on~ntrn ^his addencum, is between quality Builders Warranty Ccrporation (QPW1 and ,:OtfN 'nAVANAGH CCMPANY referred to as "Sul lder". 9uiiaer .5 a memcer _n the qBw t0 Year Limited Warranty Program. qHW and Builder desire to codify the Agreement ;nd their respect.ve rights and _bllgacicns thereunder. Nov, WHERICFOAE, q6W and guilder. in exchange fnr the mutual cvvanancs cvnialnad herein acid intending to Se legally hound hereby agree as -`oi:cs: t _ The above recitals are an '_atearal part of this Addendva and are incorporated herein. .. Euilder shall maintain its membership in Q6W's Limited varranc;r Program for an additional period of Three t]~ year. to camnance upon the below dais and submit for anrollmer.c heroes vh:c!t guilder constructs during that time. guilder may not terminate his far=:cipation ~n the QBW Program within that period unless consented to by 9Bw. 3. Builder snap pay an annual membershiv tae. 4, guilders rate will be 57.60 per thousand. The rate will ramaln in eflect for the period of this Addendum. 5. If 1R the tnforeseen event OL 3 rate increase, caused by Legislation, ar situations beyond the ccntrol of qBW, Builder has the right to terminate partie:Datian with nc penalties. 6. auildec agrees co enroll all homes coo6cructed by then, or any a::.liacea. in the qBw program_ If Builder or any affiliate fa1_s tv enroll all homes, for the term specified in ~2 above, Builder agrees to pay QEW the d1i[erence between his qualified rate based on actual vDluma and the diaeounted rate specified in M4 above for all homes enrolled during this agreement. Payment must be paid Within 30 days of discovery of hreach or Builders =resature tcraination of thin agreement. 7. If the terms contained in this Addendum are inconsistent with the 9ulSder Agreeroant, the terms of this Addendum shall govern. 1'N WITNE9B wHF1iE0F, the parties hereto have Caused Chis Addsndtm tc be eiceeutad by their duly authorized officers, as of this ?t~ day of February 1989 gUALITY BUILD(&R'`9 AV~~IRRANTY CORP. fiY' .~l.i'~- I~~LIn~.e~ JtGl; Pre6idaRC .IOIIN .ICAVANAGH COMPANY ~ C~ BY' The term of the Add~dum is extended for an additional three (3) years and will renew for like terms unless thirty (30) days prior to the expiration of this term or any extensions either party provides the other thirty (30) days advance written notice that they intend not to extend the period entitling the builder to a lower rate. If Builder provides notice, QBW will adjust the Builder's rate upward effective at the end. of the then current term. QUALITY BUILDERS WARRANTY CORPORATION By: JOHN KAVANAGH COMPANY By: rtts-~J4-~bb~ 1 (~ L~ aL l 1 Y t3U 1 LllCKS WHKKHN I Y '(1'( '(.5'( 4~f3~ F'. ~~/U3 QUALITY BUILDERS WARRANTY C O R P O R A T I O N 325 N. Second Street, Worrnleysburg, PA 17043 te{ephone: 717 737-2522 fax: 717 737-4288 February 4, 2002 SENT VXA RAX: 336-3'70-437 Mr. John Kavanagh Sohn Kavanagh Company F.O. Box 945 1$10 Pembroke Road Greensboro, NC 27429 Dear Mr. Kavanagh: ' On February 4, 1999 you signed an Addendum to your Membership Agreement entittit~g you to a lower rate. I am enclosing a copy of that Addendum for your' convenience. mat Addendum has now expired but we are able to extend the Addendum entitling you to a lower rate. I have added the extension language to the origiaal Addendum. Please sign and return via fax so we can continue your loyalty rate. As always, thank you for pei7nitting us to be your warraaty provider. Very truly yours, Cili, Esquyre G 1 Counsel . 3AG:dll Enclosure EkHr,str g rtrs-4~4-~U~~ 1'r ~ ~'~ ~ ~L I TY BUILDERS IJARRR(~TY 717 73'r ~Gtso . _ ~T~ ~IJ~LDE~?.S WA~~A-.l~'I"~ . (~~iJA~~ C Q R P 0 R A T t 0 N • • 325 N. Secflnd Street, Wormleysburg, PA 17043 telephone: 717 737-2522 fax: 717 737-4288 FAX TRANSMT~TAL SHEET DATE: February 4, 2002 TO: Mr. John Kavanagh John Kavanagh Company FROM: John A.. GiI~, Esquire General Counsel FAX: 336-370-4137 RB: Liberty Loyalty Document Extension 'IRANSMI'fTAL Si~ET IS PAGE 1 OF 03 PAGE (S) BEINCx SENT_ IF XOU DO NOT RECEIVE THE DESIGNATED NUMBER. OF PAGES, PLEASE NOTIFY US IMNIEDIATI?LX. .-~~-.~ .--:JUG _ ~.~ _ _. ~ JiJ L LL ~.w ':Jf"I~1-.~1'1 i ~ ~ _ 1 J 1 ~G._+~U J-..: _.. ~ ~ } ~~ ~4ia adddr.7i1. iH. bet4ceT quailty auilQera 4taYanry Corpara=_on i9au1 .:nd JOHN xavaaa~H tOMPl,.~t1f rncurrnd [o as "su~lder", 9ulidDr .S s mmExs Sn :ho Q9W iG zcdr G:aitm Varr.sty Pzovrm. CBW ana 6ulidar css_se eo modify roe M:eaxant x7d t.:sir :cDpeC.-va r.,ita ,ind e.:llgaelca: thereunder. ++o... YH~EP.OA'E. QDW and ayyldor, in exG`anga :~= the m~tvnl ~vonanta cnni!SSia6 here:.r. and ircandino to Se logally ~suryd :-6-'nby agroe 3¢ :a'_:orc_ t. :'ae above :C~xts1~ era an =•:teprnl part at Chia uCandum sad are :nCDx'.~:3LCd Rarasn. _. euildcx ~+all maintain :tom memaorahtp In pEt-•3 Liast~ri varran~y Progxa~ .or an additional period of T7tscc :71 Iear~ ea cr^ana~Ce upon the ae?ow data and quanir for enrollmene ~tcaee vri.h euildrf canativGU during LAot tine. su.ldar nay no[ tecn177ace Ris ;arr_:b:pacion is e,Ze Q8t1 Pregr3m wat~in theta SiDII ualesa e9iL'a'irnd eo a7 98x. 3. Hvildnr snail pay ail y.nvel mov~or;aip loo. a_ Huilaer•, rase wall Sa 51.60 par LaOtt4ana. :^fe :ato Will remain is atLac: tnr the Aariod of tsis addatldus. 5. it in Che unforeseen event of s rite i~-ease, roused yy L,sgielacian, ar airx~seioae beyond the control at pett, epilGe: has the rigor eo Cerminato par-~iCflatiett witkf i1C pansltias. 6. BuilGer agrees to enroll all hnaea een6tructed by vl~, or any a:SCi_ataa, in the Qaw program. Il Bvlldar or any atfiliaxa lai.s to serail all hemee. tar the ;eza npnciliad it't CZ snore. 8k3ide= agYaea m pay 98v tno ditterance batueen his qualified eaxr.aaae! oe actual wlwiw and ttw dineounreG rare apeettlad an f1t above tar ill bonne eerellnd during *~ila ags9om~etts_ Paymene aLL1t '?C paid within 70 data et diaeovesy 7L bream ar Suilder5 rsemattirC tee*~-Coon oe thSO agreement, 7. Ii tae terms contained is tbi! addmaum are inCnL515tenC with the &:ilcer agraeaent, tho t6rs9 of Cnia aeaesidu. ~iil govGra_ L'i NIITIEE9 e~RPOF, Ca0 parLi~ LgrLta have CSU6ed CII13 addendum to be esacutsc3 try lSsaK duly aurnorizsi o!l1~~, as nt rail at•°- day of February t999. 9y+w~T+ +~IIILD{{TR''t9 1P71RR71!!TY CDFtB. BY_ J.{t..~~ ~, Yk Prw+~s ant JWCJ .X71Va14GN CLI>Z1t.YY H!- ~ The term of the Addendum is ea~endeti for an additions! duee 3 ( )years and will renew for like tams unless tiurty (30} days prior to the expiration of this term or any exteausioas either' party provides bite other thirty (3t)) days advance written notice that they intend not to exte:td the period ~ttitling the builder to a lower rate. If Builder provides notice, QBW will adjust ifle Builder's rate upward effective at the end. of the then culrmt term. QUALITY BUILDERS WARR 1~ ("jy CORPORATION BY~ ~ 1'OHN KAVANAGH COMPANY ,f Ar-= -~"= TOTAL P,~3 r ~ ~ ~'~ ;L A?~~ ! s' y 5 r~" E?h -~ e:t 43s `~i ' f~~= `Y~~ ' ~;, ...,....._. _..~...._...,~je:, ~ r::! v: .' 7~ ~"` ` s E ~'!,,'~ ~ t"t~ (e) Ci ~ a v r F~ o v 'ti o. f ~ ~ v 4 O ~ '`~ c. ~ x U ~~ ~~2 ~ ~ a. O o ~~;V o~ o ;~ ~ ~ U ~i '"~ r^t `iJ :-~ Rte. ~~~ (J'! rt Sw *~~` f rw "~ _ --i r^. ~ ~. ~~~ h z4it }r~.y .~~j ~N T ~ ; ~y t'4 i h ~n 77~ ~~ ~~ a i?7; 1R/2Q07 15:42 FA.; A ~ ~ .JUIy 1~, ~~)~~~ }x.111) ~11`„a]'t Quality Builders Co1l~oration ~2:? North Second Street b~'orml~ysbur.~, P,tl 17U~1 i Dear Kim; :~s of July 1 ~`] , ?Ut)7, John Kavanagh Homes ~k•ill no longer require Qualify Builders ll%lrranry to pravicie tl~e tern-year structural ~~:•arr•anty to any our futul•e homes_ We apl~reci~lte the service yorl h~{ve provided to our company as well as to our past homeowners. All ew-r~nt inventory Homes ti~~ill continue to retain the services of QBV4% ati t}7c holders of the ten-yeetr structural warranty pro~~ram as previously .lgrccd. Re+~ard5. Cr 1 ILlary Ellen l.,Gwry Vice President 1Q1003/003 ~ aC..~'~ ~ ~ (~ ~U~ ~ 9 ~~~~ \'17i il:•)i/t?: t){, is fi t;. ~ i.l.~.~ jl l: `: ` ~' i t a (; !'! C'tt5lif?t't i, lVF~' -il~i~l_j~:!'~ 1 nn Y :~filtr, ~~ftiCC .),3 ~]_?%~_J9lf`1 ~ ritY 33;..3 0.41.3 ° Ff%LV(f:.It:I F,',?liil ~'1:O13;CS.Lf~Tt? 07..!1812007 15:41 F~~ ,,, John Kavanagh. company (Q.~ 001/ 0 03 P.C~. Box 941, Greensboro, NC 27429-0415 1810 Pembrol~e Road, Greensboro, NC 27408 P~ione: (336) 272-9904 /Fax: (336) 370-4137 ~'ax Transm~ttai ~~v~r -~.~eet { / `~ ~~, Com an Date: ~ / ~ ~/C~~ A Y Fax Number: { } - Time: Number of pages, including this cover gage: Comments: '~'`'~ Please call (336) 272-9904 if you do not receive all pages~"~` „ ~ VERIFICATION I, JORDAN F. OLSHEFSKI, Vice President of Quality Builders Warranty Corporation, hereby certify and state that the Factual Allegations in the foregoing Reply to Preliminary Objections is true and correct to the best of my knowledge, information and belief; and that I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. §4904, relating to un-sworn falsification to authorities. Quality Builders Warranty Corporation Date: t o ~ ~} ~ o ~- By: ,,.,_ -~- Jordan F. Olshefski,Vice President T CERTIFICATE OF SERVICE I HEREBY CERTIFY that I served a copy of the Plaintiff's Reply to Defendant's Preliminary Objections, was sent via U.S. Mail, first class postage prepaid, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure, addressed as follows: Hubert X. Gilroy, Esquire Martson, Deardorff, Williams, Otto, Gilroy & Faller Martson Law Offices 10 East High Street Carlisle, PA 17013 Date Peggy Morrison, Secretary c ~ ~ , ~. -. ~-' nti = , -,-~ ^ .s1 . • ~ G . ~~ {1 J QUALITY BUILDERS IN THE COURT OF COMMON PLEAS OF WARRANTY CORPORATION, CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff CIVIL ACTION -LAW vs. N0.07-5153 CIVIL JOHN KAVANAGH COMPANY, Defendant IN RE: PRELIMINARY OBJECTIONS OF DEFENDANT BEFORE HESS AND GUIDO, J.J. ORDER AND NOW, this /~ ` day of December, 2007, the court being satisfied that the doctrine of the pendency of a prior action has no application to this case and that the forum selection clause, contained in the agreement of the parties. is not unreasonable, the preliminary objections of the defendant are DENIED. BY THE COURT, ~hn A. Gill, Esquire For the Plaintiff ,~-udy E. Fehlinger, Esquire For the Defendant •~ n :rlm .~ r/ b 4 ~~!+,t~4 A.~ ~i `) .. d i S t . 11 .~r'tr'~il y~ ,,. 1 :fit g~~ ~ ti ~ 1 ~~~M ~~ ~,,. Hubert X. Gilroy, Esquire I.D. No. 29943 Trudy E. Fehlinger, Esquire I.D. No. 202753 MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER MARTSON LAW OFFICES 10 East High Street Carlisle, Pa 17013 (717) 243-3341 Attorneys for Defendant John Kavanagh Company QUALITY BUILDERS IN THE COURT OF COMMON PLEAS OF WARRANTY CORPORATION, CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff vs. N0.5153-07 JOHN KAVANAGH COMPANY, CIVIL ACTION -LAW Defendant NOTICE TO PLEAD TO: QUALITY BUILDERS WARRANTY CORPORATION, PLAINTIFF c/o John A. Gill, Esquire Quality Builders Warranty Corporation 325 North Second Street Wormleysburg, PA 17043 YOU ARE HEREBY NOTIFIED TO FILE A WRITTEN RESPONSE TO THE ENCLOSED NEW MATTER AND COUNTERCLAIM WITHIN TWENTY (20) DAYS FROM SERVICE HEREOF OR A JUDGMENT MAY BE ENTERED AGAINST YOU. Date MARTSON LAW OFFICES By Hubert X. Gilroy, E uire I.D. No. 29943 Trudy E. Fehlinger, Esquire I.D. No. 202753 10 East High Street Carlisle, PA 17013 (717) 243-3341 January 11, 2008 Attorneys for Defendant F:\FILES\Clirnts\12772 Kavanagh\12772.1.ANSl.wpd/tde Hubert X. Gilroy, Esquire I.D. No. 29943 Trudy E. Fehlinger, Esquire I.D. No. 202753 MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER MARTSON LAW OFFICES 10 East High Street Carlisle, Pa 17013 (717) 243-3341 Attorneys for Defendant John Kavanagh Company QUALITY BUILDERS WARRANTY CORPORATION, Plaintiff vs. JOHN KAVANAGH COMPANY, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 5153-07 CIVIL ACTION -LAW DEFENDANT'S ANSWER WITH NEW MATTER AND COUNTERCLAIM TO PLAINTIFF'S COMPLAINT AND NOW, comes the Defendant, John Kavanagh Company, by and through its attorneys, MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER, and hereby responds to Plaintiff s Complaint as follows: 1. Admitted. 2. Admitted. 3. Admitted. 4. Admitted in part and denied in part. Defendant admits that the parties executed an Addendum to the Builder Agreement dated February 4,1999, in which Defendant agreed to maintain its membership in the QBW Ten-Year Limited Warranty Program for three years to commence on February 4, 1999, but Defendant denies that on February 7, 2002, Defendant re-executed the Agreement extending the term of membership for an additional three years, which would renew for like term, unless 30 days prior to the expiration of the current term or any extension either party provides the other 30 days advance written notice. To the contrary, John Kavanagh, President of John Kavanagh Company did not sign the purported addition to the February 4,1999 Addendum as alleged by Plaintiff. 5. Denied. Defendant denies executing the purported addition to the February 4,1999 Addendum to the Builder Agreement. 6. Denied. The averments contained in this paragraph constitute conclusions of law to which no response is required. Byway of further answer, it is specifically denied that Defendant breached the agreement. 7. Admitted. 8. Admitted. 9. Denied. After reasonable investigation, Defendant is without knowledge or information at this time sufficient to form a belief as to the truth or falsity of the averments in this paragraph, and proof thereof is demanded. 10. Denied. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth or falsity of the averments in this paragraph, and proof thereof is demanded. 11. Denied. The averments contained in this paragraph constitute conclusions of law to which no response is required. By way of further answer, it is specifically denied that Defendant breached the agreement. 12. Denied. By way of further answer, it is specifically denied that Defendant breached the agreement. 13. Denied. By way of further answer, it is specifically denied that Defendant breached the agreement, and therefore payment of attorney's fees is not authorized. 14. Denied. The averments contained in this paragraph constitute conclusions of law to which no response is required. In the alternative, after reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth or falsity of the averments in this paragraph, and proof thereof is demanded. WHEREFORE, Defendant John Kavanagh Companyrequests that the Court enter judgment in its favor and against Plaintiff Quality Builders Warranty Corporation, and dismiss Plaintiff's Complaint with prejudice. NEW MATTER 15. Paragraphs 1 through 14 are incorporated by reference as though fully set forth herein. 16. Plaintiff Quality Builders Warranty Corporation (hereinafter referred to as "QBW") has failed to state a cause of action against Defendant John Kavanagh Company (hereinafter referred to as "Kavanagh"). 17. Kavanagh denies that it is contractually bound to QBW as a result of the purported addition to the February 4,1999 Addendum as alleged by QBW. A copy of the Builder Agreement, February 4,1999 Addendum, and purported addition to the February 4, 1999 Addendum is attached hereto as Exhibit "A." 18. John Kavanagh, President of John Kavanagh Company, whose signature allegedly appears after the purported addition to the February 4, 1999 Addendum, neither recalls seeing or signing the purported addition. 19. Upon information and belief, Kavanagh's first knowledge of the purported addition to the February 4, 1999 Addendum came about when it was faxed to Kavanagh by QBW in July 2007. 20. The purported addition is set forth on the same page as the February 4, 1999 Addendum, but is undated, in a different font-type, and contains an alleged signattiire on behalf of John Kavanagh, which is different from John Kavanagh's signature on the February 4, 1999 Addendum. 21. QBW has refused to provide Kavanagh with the original of the purported addition to the February 4, 1999 Addendum. 22. QBW is now attempting to use the purported addition to the February 4, 1999 Addendum to obligate Kavanagh to continue to purchase warranty services through February 2008. WHEREFORE, Defendant John Kavanagh Companyrequests that the Court enter judgment in its favor and against Plaintiff Quality Builders Warranty Corporation, and dismiss Plaintiff's Complaint with prejudice. COUNTERCLAIM 23. Paragraphs 1 through 22 are incorporated by reference as though fully set forth herein. 24. QBW has provided unacceptable service to Kavanagh's customers. 25. QBW has been communicating with Kavanagh's customers in ways that are unacceptable to Kavanagh. 26. QBW has required Kavanagh to make payments relating to houses enrolled in QBW's limited warranty program long before QBW's warranty services are required by Kavanagh's customers. 27. Upon information and belief, QBW has also charged higher rates to Kavanagh than previously charged, without indicating that QBW was charging these higher rates. 28. QBW also charged Kavanagh rates based upon the expected selling price of homes to be enrolled in QBW's warranty program without regard for the ultimate actual selling price of the homes. 29. Beginning in late 2006 or early 2007, QBW began increasing its harassment of Kavanagh regarding QBW's desire that Kavanagh prematurely enroll its homes in QBW's warranty program. 30. In light of Kavanagh's limited construction activites during this period and succeeding months, there were few, if any, homes to be enrolled. 31. Notwithstanding, QBW continued to attempt to force Kavanagh to enroll homes prematurely. 32. QBW began demanding enrollment of homes by Kavanagh when Kavanagh pulled permits for their construction, even if construction was not to begin for several months and even if closing was not to occur for several more months. 33. In the spring of 2007, Kavanagh requested that QBW provide Kavanagh with a copy of the agreement between Kavanagh and QBW, and QBW failed to do so. 34. In July 2007, Kavanagh sent a letter to QBW terminating the relationship. 35. In response to Kavanagh's letter, QBW finally sent Kavanagh a copy of what QBW contended was the contract between the parties via fascimile, but refused to provide Kavanagh with the original documents. 36. Included in the documents that QBW faxed to Kavanagh was an Addendum to the Builder Agreement dated February 4, 1999, which established a three year term for the contractual relationship between QBW and Kavanagh, which term expired in February 2002. 37. In July 2007, QBW faxed Kavanagh a purported addition to the February 4, 1999 Addendum, which addendum was set forth on the same page as the February 4, 1999 Addendum, but was undated, in a different type, and contained an alleged signature on behalf of John Kavanagh, which is different from John Kavanagh's signature on the February 4, 1999 Addendum. 38. Kavanagh neither recalls seeing or signing the purported addition to the February 4, 1999 Addendum and Kavanagh's first knowledge of the purported addition to the February 4, 1999 Addendum came about when it was faxed to Kavanagh by QBW in July 2007. 39. QBW has refused to provide Kavanagh with the original of the purported addition to the February 4, 1999 Addendum. 40. QBW is now attempting to use the purported addition to the February 4, 1999 Addendum to obligate Kavanagh to continue to purchase warranty services from QBW through February 2008. 41. Kavanagh has been damaged as a result of QBW's conduct. BREACH OF CONTRACT 42. Through QBW's ineffective service to and conduct toward Kavanagh's customers, QBW's unreasonable and harassing enrollment efforts toward Kavanagh, and QBW's unannounced rate increases, QBW breached the agreement between Kavanagh and QBW. 43. Kavanagh has been damaged as a result of QBW's breach in an amount currently believed to be within the jurisdictional arbitration limits of $50,000, exclusive of interest and costs. WHEREFORE, Defendant John Kavanagh Company demands judgment in its favor and against Quality Builders Warranty Corporation in an amount currently believed to be within the jurisdictional arbitration limits of $50,000, exclusive of interest and costs, attorney's fees pursuant to Section BS of the Builder Agreement, and such other relief this Court deems just and reasonable under the circumstances. MARTSON LAW OFFICES B ~~,~~~ Y Hubert X. Gilroy, Esqu' I.D. No. 29943 Trudy E. Fehlinger, squire I.D. No. 202753 10 East High Street Carlisle, PA 17013 (717) 243-3341 Date: January 11, 2008 Attorneys for Defendant `A RECYCLED PAPER RECVCIABLE ~e~~ O1? . I' /~'.) . BUILDER AGREEFv1ENT .a3REEP~'.EI~~T r^ade 'I•. s ~±n dsy cf .'Lne , ; ~;~ a 5 , cae,veen CUAL'iY SUiL~EGS :`rr-.RRANTY CCF°C.~: iC`d, a Jacnsyi•rar.s ccrporat:cr, herein, refered to as "CBW," ar;~ ,;.~h.^. ::avar.agh Cem~anv ~L,ra el B.: idar: ,, ~_ ..a;a whalrar a CCr_e'afcn, :_rce;sta, ir;vid:,31 ~( athar; cf address D r., 'ox ~ -ti 5 Greensboro ~.,~ :.7~1~~3 herein referred to as 'Baader." S:ata Z.p SECTION A. MEMBERSHfP E~NDTERM: 1. CBW administers s progran whereby home builders registered wilt' CB~V enroll homes t^ey construct in the program and purchasers of those homes are protected by a ~,varraniy against certa;n specified defects. 2. In order to develop and m~l;ntain a goad reputation for providing protection to purchasers of Weil-built homes, CBW protects and promotes its goed-will by careful selection of builders to participate in its warranty program. 3. Builder desires to participate in CBW's warranty program and, to that end, agrees to abide by the provisions of this Agreement and to conform its behavior to the standards expressed herein and in the Limited Warranty Agreement. Builder warrants that ail information supplied to QBW in connection with its application is true and correct. 4. All registration fees (initial aid annual rescreening) are set by CBW at its discretion and are non-refundable. 5. CBW, upon executing this Agreement, has accepted Builder as a member ofi its warranty program, subject to the Builder's continuing performance of its obligation under this Agreement. 6. i3uilder's membership shall commence an the date of Execution by CBW and shall continue until terminated by either party in accordance with tl~e terms of this agreement. OBW reserves the right to rescreen Builder annually. ff QBW determines that Builder doss not meet its approval standards upon rescreening then CBW may terminate Buslder's membership and the provi: ions of Section B, paragraph 6, shall be in effect. SECTION t3. HOME ENROLLIIAENT: 1. Requirements. As part of its participation in ~BW's warranty program, subject to QBW's acceptance, Builder agrees to enroll in the program every home, Builder, Builder's Principals, or any entity under Builder's, or Builder's Principals common control constructs in any state in which C16W operates and agrees to pay all fees required by OBW in the enrollment process, which `ees shall be non-refundable. 2. Procedures. Builder agrees to enroll its homes according to procedures established by OBW. Builder may enroll homes currently under constructio~i and homes completed but not sold or occupied (as of the date of this Agreement or the date of reacceptance follo~•ing a period of suspension or non-participation) provided that enrolilment is made within 45 days of execution of this Agreement or reacceptance, and CBW has inspected and approved the home. When enrolling other than a detached single family da~elfing, Builder shall enroll each individual unit of anymulti- unit dwelling such as but rn~t limited to duplexes, townhouses and condominiums. For each home enroile~j, the Builder shall pay a warranty fee as determined by CBW within tho time periods estab- lished by QBW. AU warrant( fees are non-refundable. A minimum warranty fee of $100.00 shall apply. OBW will provide Builder with a copy of the Limited Yarranty Agreement and Enrollment form. Builder and pur- chaser must complete, sign the Agreement and Enrollment Form at closing, and Builder agrees to furnish QBW with a copy of the signed Enrolim~:nt form within ten (t0) days of closing. Builder agrees not to charge the purchaser direct- lythe cost of the enrollment fee. A home will not be considered enrolled until CBW receives and approves the fully exe- cuted and completed Enrollment Form, payment of aU fees, and an approved final inspection. 3. Reservation of Power of Review. CBW reserves the right to reject any home submitted for enrollment in the program if (a} the Builder is not a member in good standing; (b) the home is rot constructed in accordance with the Warranty Standards or building codtis specified in the Limited Waranty Agreement; (c) G'~e Builder did not observe the enroil- rnent pr.~cedures; (d) r^isstates cr misrepresNras any ir,f~r~~~df,ofi; (a) in any way fails to comply with the terms of this Agreement. 4. Assignment of Rights. if a purchaser files a Cor;,~ia:nt pursuant to the Limited Larranty Agreement which the Euiider fails to correct, t;~,e B~~ilder h~~reuy assicns to QC'~'J or :,s ;rs;,rer, as ti .,; case may lie, any rights which Builder may have against a supplier, rr~nuf~cturer, subcort:a_ctcr ,,, cth~;r Naracn for ~.~crK Ferfcrrr,ed cr materials supplied in con- nection with that claim. Sui der agrees to cooperate fully .~,1a~ CB4'J ar,d to provide Q9U`J ~~rth all information w rich it requests pertaining t;U the c„aim. if 9uf;der fails to so cu~~Ne-.3te, ~ui;dar agrees to compensate ar,d indemnify QBW for any damages sustained by such lack of cocperai;cn . 5. Breach and Remedy. If B..;Ider fails to enrol! ar.y efg:cl~ I-.cma as required by 'his Agreement, CBY`J.may seek specif- ic enforcement or other appropriate relief in legal or equitable proceedings, even if this Agreement has been termi- nated. Furtf-ermore, Builde ~ agrees to indemnify and hold harmless C64V &rd its ir,sur~r for any losses cr any dam- ages C84'! nay s.:ffer us 3 rsu't cf 13u`ider's breach cf this A3re~ment and suc!~ losses and casts shall icolude reasonab'e attornay`s fees end eaNert ~r,itness fees. ~ti Idvr C'irE~C j L rE'+::,1`J~y 3~.Itr~%r146S and empG',~~. r ~ :af';' .=.,t~r~ ,e. f G' 3r,'f Ci„1rt Cf rri~: ~,'~ Cf ~f~^n~yiVunla Gi EiSG'- .., _re tc ~rpe ., `sr ~--,~ c~ ~`_.. jud,;ment aq,~;nst ~.., ~_, f~-~ :;~. _.~~'e'_..;h .. °u ~_. ;,,:.y bec.m~~ ii~:b{~ is ~BYV Exhibit "A" ~oos,ot2 `,.~r :,hZ Cre3Ch of t'lIS 4,3"....'e^t, ~S ZV'.~t9C0~ C'y 3r~ 3f`'da`.~; 5:~~~•Z~ 0'' ,=,r Ci',.~,er cf lt~~+~,/ Sc''.<<n~ fC"t'l :he 3n'0'..('t5 t``en die, ~,JS 3tt~rn2j'3vf•3c'S .:'.CUired rrV l:B~~i, '~ti:i`' i,~S:S J` Su,i 3"',~'redaSe Cf 2rrC'S. S~Ch 3Utt10rlty Sh3il r'Ct t?e ' ; ~,' ~ ; ~g^~ ~r;t r;'•3j' ~ ~C^feS9?u .-~..`, a~Ci CSai~~ ` ~f'? Cr~e tJ t.,TE.' ~'.S i,fttn ::v :~ , - a~chausted by any c~a axerc.: e'.t^2re~o. .. ,~~: ,~: b - - iS 3 dafau,t. ne~""'87.'S :.'at2d ";8'E„ .,'8 @',2C.~~0 c:r~ ^C', tr'ii,~,~3:'~2 3^.~ .-`~+~~ ~'3`~ 21ci.: ,_ ~rC~c3l:" Gr,~a' ?~~S ^v' 8^}~ ~, air C3ragf3,'Ji'1 ;.'`tniS .gig"ecrne^`.. 6. Suspension orTerminatlon. ~.:~''+`~ ~',8y t@fIT'.^'.?i8~ 'J' 3t `,S 0~:,`.iCr SU:~= iu, ~u;'-~+Ef'S F'3r':i:i~3`..~.'1 I^~ Ci3'v~/'S l"i~f'3^'.~~1 Program, cr any er~ty cr n~ ~ :d:,al',vhish S~ der s s~`,..s:~d, ~`'~5`,'~ ~a:ar-'.ir:es ".a: 8u ld6r has done any of t"e fci- lotiving, wh c:n shall be ~eam•~d a breach of t^;s Agree:~ar.t. (a) fails to comply furry v,ith F;I1 provisions of this Ag~ee.-ne~t~, tb} fails to perform sr,y of its cbiigations under this Agreement, incl~dinr, 'cut rat I.,^ited tc, cocperati^g in the opera- tion of the prcgrarn's info~mal dispute resolution and arbitration procedure; (c) fails to respond to Q64V': notice of a homeowner's ccmplaint; (d) faits to comply with a dec:isicn which is rendered pursuant io ccmplaint procedures; (e} fails to provide adequate assurance to CBW vvithin ten (10) days after it receives a written request from QBW for such assurance mat (will-in a reasonable timetable established or approved by QBW} it is willing and able to coop- erate in dispute settlement and to perform the obligations under any decision which is rendered pursuant to such prxedures; (f} fails to otherwise coepercite in the operation of the QBW Program in accordance with the rules and regulations of the QBW Program; (g) faits to provide timely proof of compliance with this Agreement, as and when requested by QBW; (h) fails to comply with Qi~'uV Warranty Standards and building codes as stated in the Limited Warranty Agreement; (i) faits to comply with the e ~rollment procedures established by QBW; (j) fails to provide proof that enrolled hcrnes have been subjected to required inspections; (k) fails to respond to purcheiser complaints in a timely manner ar.d as provided in the Limited Warranty Agreement; (I) fails to perform its obligations with professional competence or conduct its operations from a position of financial strength and stability; (m) fails to notify QBW within 30 days of a change in ownership, company name or company standing, financial con- dition, or of any other material fact which might affect Builder's ability to meet its obligations under this Agreement; (n) fat{s to meet ethical standards in its dealings with customers; or (o) misstates or misrepresents any information in connection with its appflcation or in the rescreening process. QBW reserves the optinn to reinstate terminated affiliates of the primary, terminated Builder if QBW determines that the terminated Builder cr its principals are net in a position to control the affiliated Builder. Termination of Builder by QBW shall not affect the rights or obligations of any of the parties to this Agreement with respect to the Warranty Proc ram In effect at the date of termination, subject to the provisions pertaining to voidability. If a Builder is suspended or terminated, he shall not represent himself to be a member of the QBW Warranty Program nor offer the QBW Warranty and shall not use its Logo or refer to the program in any way nor attempt to enroll any home. The Builder shalt immediately notify any"Buyer currently under contract to purchase a home of the suspen- sion or termination and that :he QBW Warranty Program has been withdrawn. Upon request, Builder shall immediate- ly return to QBW all materials supplied by QBW and all material making reference to QBW. Should Builder fail to take these steps, it shall indemnify and hold harmless QBW and the insurer against any and all expenses incurred and loss- es suffered, including but nc•t limited to attorney fees, by either of them as a result. {n addition, Builder shall pay inter- est to QBW at the rate of 18`.o per annum on all sums due to QBW hereunder if such sums are not paid within 30 days of demand by QBW. Builder may terminate this Agreement upon 30 days advance written notice to QBW. If so terminated by Builder or by QBW, Builder's obligations under this Agreement shall continue as to those homes enrolled during the period in which this Agreement was in effect. 7. Notice. If QBW possesses a reasonable belief that reason exists to terminate or suspend a Builder for violation of this Agreement, QBW may immediately terminate or suspend the Builder by providing it with written notice. If QBW elects to suspend the Builder, such; suspension will remain in effect until Builder has cured elf defects to CSC"J's satisfaction, ho~,vcver, Qt3b"J rest:~~JF_~ the right tc terminate ar~y suspended ~uildec ' 8. Voldabfllty. GB','1 re:;er,os t~,a r,gf;t to •Jad tiny er,rc;.ment if ~~iider nisstatES ~~r misrepresents any infcrm36cr in its application or .n t`;e rescue^,i~:; process cr masta`ec or ~,r ,.rn~re c-~ts any ;r,fcrmaticr, ir. the enrcliment cf a particu- lar horse cr fans to pay ar~y `ees due for enrc'I;r^.e^' ~f a^1 parr;c .ar h~;re cr fai~~c t~ `.r,vard an ~nrcl;ment `ors; far a particular hone wit~,in t~ d,.ys as rey,.;rem, SECTION C. BUILDER'S OBLIGATIONS: 1. Construction Obligations. Fo;io•,ving are the B._. dar'~ cr i;a:icns ~r.i' < iesFec! ?c C~~`J's ~'J3ranty Pro3:a.~n: (a} Bolder shall enns'ruct r31 homes in ccn`crms;y ;vi:h tr,~ ','larr~~rty ~'andar~~s pn,vl:fed it t;;e Lim'tec b"larrarty Agreemena, an~~l cr in c~rformity v:~ith approved buildi: g codes sr,d ether standards established by QBLV and in r:Fect at the beginr,'ng c~f c~srstruction of thi/ e~rc'led h~;:,e. Ce'~,'d reserves the sighs to establish sFecia; require- ments for e.~r~~w payrnE:^ts or anon means cf rrcG~ct.~ , :^~i:h re~pect'c .,ny homes asrsiructed by Eu'Ider,vhic', QB',`J determ'nes '.~ be 'High Risks." c; ~ :der ~igrees t~~ I~;a~.t ~'I hcm~_s ~nspectad, a roq~~~r~d by ~i/':`J, ar.•:1 to p.ay aft `ees for the insFecticn and' pro- •~i.~~~ ~,~i,-~:_, ^,a ,~ ~r, -c_._, ;!1 ~iC ~r''~ v'fli:n (_~~'.:,r;;~~ f~'/ ~.'..;Ti. :q~J'i 5": i. Fr'i'~C IriSCE.C:C.rS Gr SilEiti ~?~,'F/rvV2 !~OV- boos ot~ ,~ _ ti~ ,, -; + - -s `;; E~ `dc~„ ccmn'.a ~ ~2 v:ah ih s rcreem~nt and E„ idar '~ v~:1 S'a., , ~4e .. ,.. ':~,., iC }, .."tJr , 5~0. Ir.L~::ct.: Ci. :J `.Cr r agrees to c^~c^.e~~te. ~~ 'e •~C !Ct'r S.C'°°_S ._ r::C' .,'~'j w~.j hJl.~t 1-. rr^cgc ~~,t~~.'i ~',~:~ Jf I:S i',S'~r:;' f~f ~."'y' ~_a:.cS yr d3,T3ycS Q~~i~~ :.r~`Cr . is Insurer rray saf=er i~s i ~esut cf .t:a use cf fare re -a-t :~c.:te•d r y;^:~cd or am; b~ ,ding ar.roi:ed under the C3V'r Ten Ya3r ~.'i3rf3nty F=rC~r.i'n. i t' S w :l :nCi':.~2 3' Cl i,"_y a~,U .,abi, Cy fc, .GSSES, dar^.aydS 3rd expenses bvhic" ~3'oU and,cr .iS ^Sli2r ^"3y S_S:..:n, ,nCU', pdy Jf ce i,al? ,Jr ~Jy .'.ed".S cf ally :'-~`ic'oi.y3aOn Seit,P.ment Of lit;g3ticn Cf a'ly Claim Or 3Ct~On bV;,r~'~l n',ay be r11Sed, ,11ada v'' br~,U~,i~` ~~e '.J `I".e p~t2''t'3t def~GtS ~.3sSP.i.~ Or ~li~ei;. t0 b~ caused by use ~f tie suc;ect plywood. Vie) .f :he Builder a nfcrmed by CSbV that it is bui±d:ng ir, ar, area designated ss cr.e with active sell ccndit;ons, i"e Builder agrees to obtain such soils invast'gaticns and repc,•ts as may be required by Q3~V, .f such reports indicate a naed for spec'a( fow.dation design the &~~Ider agrees t~ construct the ieundation according to the design of a registered professional f:ngineer to take into account tt'.e acnditior s disclosed by ih~e soli tests. 2. Warranty Obllgatlons. Bui',~er agrees to perform aH obligat,cns ar~~sin,g from this Agreement and the Limitad'Narranty Agreement. Tt-a Builder s!-a'I at its c~r.n expanse pericrn- ail cb;:~,~ations as set forth it tr,e CBb'/'~Varranry Program and this Agreement which ;r,cludos rooting the warranty standar•as uGcn notice from Yne ^rurchaser without the necessity of OEW interrenticn. If Bui:der'a~l; or refuses tc perfcrr, its vbii~3:IJ,a ir, acJCrcance ~wit`t the Limited til+arranry Agreement, Q8W will perform those obligations; t•.cwever, Builder agrees to reimburse QBW andior its nsurer for all expenses incurred in performing those obligations, including, but not I;mited to costs of materials, cost of collection, labor, architect's fees, . engineering fees, and attorney's fees. QBW reserves aft rights cf subrogation. if the Builder repairs a major structural defect during year 1 or 2, QBW must be notified. Once notified, QBW will perform a compliance inspection. QBW agrees to perform its obligations pursuant to the Limited Warranty Agreement in years three through ten pro- vided that the defect that is the subject of the Purchaser's claim did not occur within the first two years and was not concealed or cosmetically c r improperly repaired by the Builder during those two years. Builder is not responsit~le for any damage caused by a major structural defect, as defined In the Limited Warranty Agreement, occurring after'he expiration of the first two years of the Limited Warranty Agreement provided the defect was not concealed or cosmetically or improperly repaired during those two years. (]BW will hold the Builder harmless for the reasonable cost of repairing or replacing such defects, and against the payment of any money judgment, order or decrees made against B,iilder for the repair of the defect. 3. Builder is authorized to adve•tise its membership in the C~BW Warranty Program and to use its Logo in its business, pro- vided that any reference to QBW or its insurer, whether contractual or advertising copy, be approved by OBW in writ- ing in advance of its use. SECTION D. INFORMAL DISPUTE PROCEDURE: 1. Builder should be aware that the Limited Warranty Agreement provides for an informal dispute settlement and arbitra- tion procedure to resolve complaints by purchasers under the Limited Warranty Agreement. builder should become familiar with the settlement procedures in order to be aware of its rights and responsibilities. Builder agrees to coop- erate fully in the procedure ,and to be bound by and to comply with any decision of an independent third party, or arbi- trator. if the Builder fails to perform its obligations hereunder in a timely and good and workmanlike manners such fail- ure shall be considered to tie a refusal to perform governed by paragraph C.2 hereof. 2. The Builder agrees to pay ~.II fees charged in connection with the informal dispute settlement and arbitration proce- dures. SECTION E.TERMS GOVERNING OPERATION AND INTERPRETATION: 1. Builder agrees to t/er`crm it,~ obligations under this Agreement in a ti~rely manner. However, time provided for cerfor- mance of ob;igat:ors honour der shall be extended by e~~ents no' subject to conircl by the person obligated to perform. Such events include acts cf God er the public enemy, or, riot, civil co.~r~mation nr yovernmeraai conduct. ~?escripti~.~e headings as tc :+~<e contents cf particular provisions of this Agreement are intended for conveniene only and are not tc be censidara~ ~n construing this instrum~.~ ~t. 3. This Agreement shall not constitute or be considered an agen~~y, emp!ryer-emp:oyee retstionship, Oint venture or part- nership between th~~ psr'ies. t~Jone of the parties, nor ar:~: cf t,;E,r e,r.p'cyaes cr acents, sha',I Nava the authority tc bind or obligate the ether party except as provided by this A~~reer^ent, -t. Should any provisions cf this Agreement be delerm;r,ed by a court of competent jurisclictbr: to be uner,fcrceaal~;, That determination w~J" not affect the validity of the repai, ing pr.~r,sions. ~. This A•~reement shall ba into rpreted and enforced in accordance avi'.h the pros of the Cc;Tnon:veaith cf Pennsylvania. AN suits ~n:a:t•~tad ~~n•d~~r t`iz', Agreement she;; be brc:~~,ht i~n Pen^syivania in a court of ccr-petant jurisdicC~Jn. ouiider •~f: rC~~y y~-n ~, I.~ re ~ P .~^..^.~ ;L(ISd~CtIC ~n cf the FUrrai,'13~i,3 COUrtS. f-Cr Lw:dc'r,. .~h0 ;l ,. ,.en:;e~ n ane Stcte Gf i.E..: .. :'_°i.rj, -J;E I`.iI t~~l; ~i~l'~i'_Tr_-;',t ~t13i1 t2 f`1tE.f,_;rft~~ 8!ld ,u ., _~.v .~_• .c,,: ,, ., rre^ c . ~. __. ,., _n _-~i-~~_ it ~,~.•.r _ _e•f. _,. a .~ s.ha!~ ref ~,~ _7r t' _ .'~.~-{-: ~r,t~.t'r, ;r .:u ~:~ ,_~. :~~: , .c . -,-. e' QS.ti'. ;r.:, i ~I.l~, t~~j;c,C; ..~' ~. i' ~-.,,,~~ ~., ti v ~e."Uflt :.f a'-.~ ~,~~ C'., ~. :~ ,,, .1^. ('r~ ~,_. t:+C-~~t= .,. ... ~ ,;ti;]t ;-1 SI"~'1F~, and :~t._,,E~as~~ _ ~r It-,~ `~~r:-- .~ ~:::~~ F,~...,.,. .~.,010~012 ~ :.. ~r'a~.. ....,: ,~~~~.~ jC~~.,,.'.Li...J ,:i.'~:j _%%.. - .. _ .u :L _ ,.:.:~,._ ...=C. `~C~i=:,, i:.} „jC~'3r~~.;c~. ~.Gi.~1.'S ;i'E~ t'r't,~z 3~~rt'r~'c'". ~8:7.~c':l .,'? ~'-, ZS, 3'u ''J Stdt9'"'c".~ _ ~ :cS, C; ir~~t,CE.~"'cra' "'3L@ ~y c~~ii'd( Cc3riy' cr ,:~~erii of ea`^@f pdri'y~.,.ct .S ..t CCU^'~ ~8~~ ;rl i~~IS'N"atcr. C~..'.3~. 5,~3 i Cc ...:~~ . ~~~r`ir.,~~]. ; ,^,C :!",i.~' CC'1r3~;t iT:iy ^Jt h+e t'f '~3rC~~C~~ ~edlf~ed, Or 3.tefe~ EXC?p' 'n 'YVr~:i''.t„' ~.y,^,t'C ~ j' t~c' E:,3f::cS 3"~ C~..~.~iSc;~ ^cre^ . 9. FaiiUre of either pa: ty ,,a irsi:~t ~pcn ccrrp~ ar,~e .tiih a^, , ,.:~~~s ~r, cf'.. s ~greer; ent she 1 r?~', :,o~st::~~te a wai~~er ~f t`~at OroviSiOn. 10. H11 notices required hereunder ,~^us; be in ',~~'r;ig a^d s2n~ t;y ~erL`,ed ~ ~ ~a;l, pcstaye prepad, return race pt request- ed, to t`~e recipient at the rE.spactive address sho~.vn ba~c'w cr to ~.~~h.=fever a~.~rass tie Fafif 'nay ~~es~gnate ~n'r.ritirg, ? 1. Tha effective dste of this ~.greemert hail ire t`.e date c`,e:.ec~ticn ~y oB4b'. ~ 1 ,~: i / - ~~QUALt:>;1='~~D~RS"ti!li~~R~A~TY CDi~FORhTiCN i :-~ , /% '`~,~,.;`' ~ e e JGfrO sh,efskl, Presldeni %,-' Date of execution by OBW:_ June 2 X995 Builder's Registration No.: _ 6C093 BUtLDFR; John Kava.iagh Company (Name o~ Bultdar -please print or type) DATE sane 7, 1995 ray gnature of Authorized Representative -Tft1e) (Please print name/title of executor) P.O. Box :3415, Greensboro, NC 27408 (Address) Copyr(ght 1988 Owlfty Builders tiYarronty Corporation -- - - -- - - - --- _ ~; 011: 01? ..__ _ccLT^a•1T. ::' to Cur Cf1 ,~sa .::y ^uslnesa Ya.:a++:7 i.a:paz7c:an ~;Oul c.rd :.t4V s~.L.v-,;N !7.+.tlv't r~t[oc:nd LC an ~~9u:1GeC'. gut::At .a s aemar :T :.a Q2v .+ Tear (,:a1 :aa VLt=:=:Y ?rCa7[Ga. ~~'~ 1.1d asL'f.car :.a is tf :7 ~.ad3:Y C~a K:'sieu'e .xe :'.gar :e.txc:_•~a ..; ;ee u+d -.._;atscs: tltezn:ttda:. nav, VN'31a0A7:, pffv and Sulldot, in as G`sngo a LCa carol LCVys=.nGZ. LntSltl.a6 nerC1.'t ant :r.Cmtda%+9 co 5e lagal3t ~s::.ceaay agroe ac .`o::;ua. t_ 2^ aeova :cci tats ara aa =-ce7eal past of t13n sOG.ctdtso and are :nc~r~a:accd Bataan. .. 6vildCr :JWIl ni1nL3313 :t: aooeatanlp 1n DEY'7 Llaatad VAYX3l1~y frog:?n ;or an additional perscd u[ :Tt:tx :]) yea:! to c,-aaaaa apwi clan ucla+ data and tucos,c to: ani7ilnmc i7rL'>L'! vt:!c:t eusldrs cenatruc:~ dursAg taut cane. 9usldar wy tsoc :acniruce has ;at-,relwciost ~~ c".e DLy Pragtaa vatlsn enoc ~:ci t~:ce.- vn:atced co ty 9851. 1. Busldar mall pay an s.^17ua1 aa~sborra3p fan. .. sull~er•'. rase vsll ~ 37.60 prr c.eauane. '^tt :acs Vall rena to as +Ltac: tot tns DarsCd at t:3i. Iddandm. S. :t in eha vntnresatT evere of a :ace !nom-ease, esu.:.d by taysalacian. u aitisaesoaa ltayond tha eane:al at QDY, 9uilee: Ma t.~.a riq~t: co textstt7ito )alL1L'¢at307i vi tli nC pianaltida. r. 8uildse agzaaa Ca aarall all lsdaea enucttxtad Cy C.Zen, or any 1tSt1latar, in tlt+a 4at+ pcogsro. 3t ait33Gr a^ any afflSaata tails co ed:ell all tonne. tar Cria cars apeitied in 72 aoora, aualdas agtaaa eo p:T QLV etse. iitter7incn boays•gn Tua gtsalitled eae~e C.iaed an ae:aal volaaw and tha dicmuntad :ats apeest! eo in 11a atrlva for alI Seam eira21s7 dursnq tbi; agcvo.rvie_ )'syearit war De pasd vil3aan ]D darn of dlseovery sd Cranes ar uaslrlera ~zaaactsce [araanauo0 od t.hia 14ieaeeut. 7. It LAe tarns castained iii tttid scidCOGua ast3 LnCdasiStPaC vlth the i3:i;rer agsaaew3t, bhs cax~a of ehl: ldaarWta^ Wail govasta. :.V YA71tE! tnttCa3;0Y, tIIt pottier, eatato rive ranted 0017 ldeas>auo to iv :aec.+csd 4y r-,:r duly autt3orixai otticaa, at of ears 4c' day at FaGruary ~ 7999. y~VSLI'~Y 7D::DSR'(9 VaRiit3ft'Y C`~R9. Jic Pr0u ant :wcv,3cavswta moaw as:_~tW "~i'l The term ofthe Addendum is eldended for an additional tllr~e (3}years and will renew For like tettns unless thirty (371) days prime to the exphation of this term ar any eYtrasions either party provide the other thirty (30) days advance written notice that they intend not to extend the period entitling the vclilda co a tower rate. If Builder provides notice, Q$ W will adjust the Builder's rate upward efi'ective at the end. of the then current term. QUALITY BL1I-DRS T[~~1.RR,4NTy CORPORATION • ~~ ~/ By: l /,r JOI-LY KA VAN,4GH CQMP~IY - is ~- ,. , ,- ~~ ~ ~ ~~ VERIFICATION I, John Kavanagh, President of John Kavanagh Company, acknowledge I have the authority to execute this Verification on behalf of John Kavanagh Company and certify the foregoing Answer with New Matter and Counterclaim is based upon information which has been gathered by my counsel in the preparation of the lawsuit. The language of this Answer with New Matter and Counterclaim is that of counsel and not my own. I have read the document and to the extent the Answer with New Matter and Counterclaim is based upon information which I have given to my counsel, it is true and correct to the best of my knowledge, information and belief. To the extent the content of the Answer is that of counsel, I have relied upon counsel in making this Verification. This statement and Verification are made subject to the penalties of 18 Pa. C.S. § 4904 relating to unsworn falsification to authorities, which provides that if I knowingly make false averments, I may be subject to criminal penalties. John Kavanagh Com any Jo Kavanag CERTIFICATE OF SERVICE I, Melissa A. Scholly, an authorized agent for Martson Law Offices, hereby certify that a copy of the foregoing Answer, New Matter, and Counterclaim was served this date by depositing same in the Post Office at Carlisle, PA, first class mail, postage prepaid, addressed as follows: John A. Gill, Esquire Quality Builders Warranty Corporation 325 North Second Street Wormleysburg, PA 17043 MARTSON LAW OFFICES By t~ ~~ c ~ ~~ c ~~~ Melissa A. Scholly Ten East High Street Carlisle, PA 17013 (717) 243-3341 Dated: January 11, 2008 r.~ ('.:~ C_ # ~ „ , ; ~ ~,. _..._ ("_ ... --.'s -; (~:..7 _i "`;, GJ ~ t s IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA QUALITY BUILDERS WARRANTY CORPORATION, CIVIL ACTION DOCKET N0.5153-07 Plaintiff v. JOHN KAVANAGH COMPANY Defendant TO: John Kavanagh Company 1810 Pembroke Road Greensboro, NC 27408 Date of Notice: January 4, 2008 And Hubert Gilroy, Esquire Martson, Deardorff, Williams Otto, Gilroy & Faller Martson Law Offices 10 East High Street Carlisle, PA 17013 As Attorneys for Defendant John Kavanagh Company IMPORTANT NOTICE YOU ARE IN DEFAULT BECAUSE YOU HAVE FAILED TO ENTER A WRITTEN APPEARANCE PERSONALLY OR BY ATTORNEY AND FILE IN WRITING WITH THE COURT YOUR DEFENSES OR OBJECTIONS TO THE CLAIMS SET FORTH AGAINST YOU. UNLESS YOU ACT WITHIN TEN DAYS FROM THE DATE OF THIS NOTICE, A JUDGEMENT MAY BE ENTERED AGAINST YOU WITHOUT A HEARING AND YOU MAY LOSE YOUR PROPERTY OR OTHER IMORTANT RIGHTS. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 71.7-249-3166 Respectfully Submitted, ohn A. Gill, Esquire ' Builders Warranty Corporation 325 North Second Street Wormleysburg, PA 17043 (717) 737-2522 #41532 Attorney for Plaintiff Quality Builders Warranty Corporation CERTIFICATE OF SERVICE I HEREBY CERTIFY that I served a copy of the Plaintiff's Brief in Opposition to Defendant's Preliminary Objections was sent via U.S. Mail, first class postage prepaid, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure, addressed as follows: John Kavanagh Company 1810 Pembroke Road Greensboro, NC 27408 And Hubert Gilroy, Esquire Martson, Deardorff, Williams Otto, Gilroy & Faller Manson Law Offices 10 East High Street Carlisle, PA 17013 Date: ~ ~lJ ~' l Pe orrison, Secretary l ~ jY ~~ ~~ "" '~ t.,i ~.r j i \_. ~~~ '} .. .. ^~ ~ ~1 ~.. .. ~:s l F` IN THE COURT OF COMMON PLEA5 OF CU112~D COUNTY, PENNSYLVANIA Plaintiff v. QUALITY BUILDERS WARRANTY CORPORATION, CIVIL ACTION JOHN KAVANAGH COMPANY DOCKET N0.5153-d7 Defendant PLAINTIFF'S PRELIMINARY OB3ECTION TO DEFENDANT'S ANSWER CONTAINING NEW MATTER AND COUNTER CLAIM FOR LACK OF SPECIFICITY PURSUANT TO Pa.R,C.P.1028(a)(3) AND NOW, comes Plaintiff, Quality Builders Warranty Corporation (QBW) and files the within Preliminary Objection to Defendant, John Kavanagh Company's (Kavanagh) Answer containing New Matter and Counter Claim pursuant to Pa.R.C.P. 1028(a)(3) and avers in support hereof the following: 1. QBW instituted the within action against Kavanagh on August 28, 2007, for breach of a Builder Agreement. 2. Kavanagh filed Preliminary Objections, which were dismissed, by order of Judge Hess dated December 11, 2007. 3. Kavanagh filed an Answer containing New Matter and Counter Claim. 4. Kavanagh's Counter Claim alleges a breach of contract action stating "QBW breached the agreement between Kavanagh and QBW." (See paragraph 42 of Kavanagh's Counter Claim) 5. Kavanagh has failed to identify the contract or agreement under which it is suing, failed to state whether the contract was written or oral, and if written failed to attach a copy of the contract, which is in violation of Pa.R.C.P. 1019(hxi). 6. Additionally, Kavanagh has failed to identify the specific provisions of the agreement, which it alleges QBW breached. 7. QBW requests a more specific pleading to adequately identify the issues and the contract under which Kavanagh files suit to enable QBW to prepaze its Defenses. WHEREFORE, Plaintiff, Quality Builders Warranty Corporation requests that Defendant, John Kavanagh Company be required to file a more specific pleading, identifying the contract under which it is seeking relief and specifying the provisions of the contract which is alleges QBW breached. Respectfully submitted, \, John A Gill, Esquire ity Builders Warranty Corporation 325 North Second Street Wormleysburg, PA 17043 (717) 737-2522 #41532 Attorney for Plaintiff Quality Builders Warranty Corporation IN THE COURT OF COMMON PLEAS OF CU + COUNTY, PENNSYLVANIA QUALITY BUILDERS WARRANTY CORPORATION, Plaintiff v. JOHN KAVANAGH COMPANY Defendant CIVIL ACTION DOCKET N0.5153-07 ORDERED AND NOW, this 28th day of January 2008, upon consideration of Plaintiffs Preliminary Objections to Defendant's Counter Claim, it is hereby ORDERED and DECREED that the Preliminary Objections of Plaintiff are GRANTED and Defendant, John Kavanagh Company, is directed to file a more specific Counter Claim within twenty (20) days of the date of this Order. J. VERIFICATION I, Jordan F. Olshefski, Vice President of Quality Builders Warranty Corporation, hereby certify and state that the foregoing Plaintiff s Preliminary Objection to Defendant's Answer containing New Matter and Counter Claim for Lack of Specificity Pursuant to Pa.R.,C.P. 1028 (a)(3) is true and correct to the best of my knowledge, information and belief; and that I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. §4404, relating to unsworn falsification to authorities. Date: ! ~2 S /08 Quality Builders Warranty Corporation By: Jor F. Ol a ', Vice President CERTIFICATE OF SERVICE I HEREBY CERTIFY that I served a copy of the Plaintiff's Preliminary Objection to Defendants' Counter Claim, was sent via U.S. Mail, first class postage prepaid, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure, addressed as follows: Hubert X. Gilroy, Esquire Martson Law Offices 10 East High Street Carlisle, PA 17013 /~"~~~ ~ .~ b~ Date Pegg i ison, Secretary ~ ~ d C8 : ~ -r't ~. ~!'-1 <. ~,, ~ ~~ ~ ~ ° " y W `~ ~ L r* ~...; 1. , --4 ` . Q _~ PRAECIPE FOR L{STfNG CASE FOR ARGUMENT (Must be typewritten and submitted in duplicate) TO THE PROTHONOTARY OF CUMBERLAND GOUNTY: (List the within matter for the next Argument Court.) CAPTION OF CASE (entire caption must be stated in full) QUALITY BUILDERS WAt2RNATY CORPORATION V5. JOHN KAVANAGH COMPANY No. 0_5153 CIVIL Term 1. State matter to be argued {i.e., plaintiff's motion for new trial, defendant's demurrer to complaint, etc.): Plaintiff's Preliminary Objections to Defendant's Counter Claim 2. Identify all counsel who will argue cases: (a) for plaintiffs: John A. Gill, Esquire (Name and Address) 325 North Second Strc?etF WorrolPVG~rg, pp, 17.0,4 (b) for defendants: Hubert X. Gilroy, Esquire, Martson Law Offices {Name and Address) 10 E. High :Street, Carlisle, PA 17013 3. I wilt notify all parties in writing within two days that this case has been listed for argument. 4. Argument Court Date: April 16, 2008 ,John A_ Gi11 Print your name Plaintiff Attorney for Date: March 24, 2008 INSTRUCTIONS: 1. Two copies of alt briefs must be filed with the COURT ADMINISTRATOR (not the Prothonotary) before argument. 2. The moving party shall file and serve their brief 12 days prior to argument. 3. The responding party shall file their brief 5 days prior to argument. 4. If argument is continued new briefs must be filed with the COURT ADMINISTRATOR (not the Prothonotary) after the case is relisted. CERTIFICATE OF SERVICE I HEREBY CERTIFY that I served a copy of the Praecipe for Listing Case for Argument, was sent via U.S. Mail, first class postage prepaid, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure, addressed as follows: Hubert X. Gilroy, Esquire Martson Law Offices 10 East High Street Carlisle, PA 17013 Date ~, X11 Peg rrison, Secretary ,,. {') ~- ~ -tea ....~ ter. =, _.n~ ~ ~ } tom; '~ R ~ ~ ~~ 'mil .~ y ^ ~ V ~ ~ ~Z~ ~ C,~ --~ .. ~ r: {1"4 F:\FILES\Clients\12772 Kavanagh\12772.1.mot.azg.ct.wpd/tde Hubert X. Gilroy, Esquire I.D. No. 29943 Trudy E. Fehlinger, Esquire I.D. No. 202753 MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER MARTSON LAW OFFICES 10 East High Street Carlisle, Pa 17013 (717) 243-3341 Attorneys for Defendant John Kavanagh Company QUALITY BUII,DERS WARRANTY CORPORATION, Plaintiff vs. JOHN KAVANAGH COMPANY, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA N0.5153-07 CIVIL ACTION -LAW DEFENDANT'S MOTION TO STRIKE PLAINTIFF'S PRELIMINARY OBJECTIONS FROM THE APRIL 16.2008 ARGUMENT COURT LIST AND NOW, comes Defendant, John Kavanagh Company, by and through its attorneys, MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER, and hereby files this Motion to Strike Plaintiff s Preliminary Objections from the April 2008 Argument Court List, averring as follows: FACTUAL BACKGROUND 1. Plaintiff, Quality Builders Warranty Corporation ("QBW"), is a Pennsylvania corporation engaged in the Ten-Year New Home Warranty business with its principal place of business located at 325 North Second Street, Wormleysburg, Cumberland County, Pennsylvania 17043. 2. Defendant, John Kavanagh Company ("Kavanagh"), is a North Carolina corporation engaged in the new home construction business with its principal place of business located at 1810 Pembroke Road, Greensboro, Guilford County, North Carolina 27408. 3. QBW filed suit against Kavanagh in the Court of Common Pleas, Cumberland County, on August 28, 2007. 4. Kavanagh filed Preliminary Objections in response to QBW's Complaint on September 21, 2007, which objections were dismissed by Order of the Honorable Kevin A. Hess on December 11, 2007. 5. Kavanagh filed an Answer with New Matter and Counterclaim to QBW's Complaint on January 11, 2008. 6. QBW filed Preliminary Objections to Kavanagh's Counterclaim on or about January 29, 2008, and listed the Preliminary Objections for hearing during the Apri116, 2008 Argument Court. 7. QBW's Preliminary Objections request that Kavanagh be directed to identify the contract or agreement under which it is suing and the specific provisions of the agreement which QBW allegedly breached. 8. The proposed Order attached to QBW's Preliminary Objections requests that Kavanagh be directed to file a more specific Counterclaim within twenty (20) days. A copy of the proposed Order attached to QBW's Preliminary Objections is attached hereto as Exhibit "A." 9. Kavanagh has no objection to the relief requested by QBW and therefore moves this Honorable Court to grant the relief requested by QBW and to strike QBW's Preliminary Objections from the April 16, 2008, Argument Court list. 10. QBW does not concur in this Motion. WHEREFORE, Defendant John Kavanagh Company respectfully requests that this Honorable Court grant the relief requested by Plaintiff Quality Builders Warranty Corporation by directing Defendant John Kavanagh Company to file a more specific Counterclaim within twenty (20) days and to strike QBW's Preliminary Objections from the April 16, 2008, Argument Court list. MARTSON LAW OFFICES By _ Hubert X. Gilroy, squire I.D. No. 29943 Trudy E. Fehlinger, Esquire I.D. No. 202753 10 East High Street Carlisle, PA 17013 (717) 243-3341 Date: Apri19, 2008 Attorneys for Defendant John Kavanagh Company IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA QliALITY BliILDERS W~~RR~~NTY CORPOR.~~TION, CIVIL :1CTION DOCKET NO. ~ 153-07 Plaintiff v. JOHN kAV.~~'~1AGH C01~1PANY Defendant O_ AND NOW, this 28th day of January 2008, upon consideration of Plaintii~s Preliminary Objections to Defendant's Counter Claim, it is hereby ORDERED and DECREED that the Preliminary Objections of Plaintiff are GRANTED and Defendant, John Kavanagh Company, is directed to file a more specific Counter Claim within twenty (20) days of the date of this Order. J. Exhibit "A" CERTIFICATE OF SERVICE I, Nichole L. Myers, an authorized agent for Martson Deardorff Williams Otto Gilroy & Faller, hereby certify that a copy of the foregoing Motion was served this date by depositing same in the Post Office at Carlisle, PA, first class mail, postage prepaid, addressed as follows: John A. Gill, Esquire Quality Builders Warranty Corporation 325 North Second Street Wormleysburg, PA 17843 MARTSON LAW OFFICES By Nichole L. Myers Ten East High Street Carlisle, PA 17013 (717) 243-3341 Dated: Apri19, 2008 C) c ~ ^~ © C~ . 4.: ~^+O vi-,` ~~ ~i ~ Z r _ ~ ~~ ~'. ' ~ ~ ~_ _ _ ~~ ~.. .,l>~.I ~ V U~ Q •• /., Y QUALITY BUILDERS WARRANTY CORPORATION, PLAINTIFF IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA V. JOHN KAVANAGH COMPANY, DEFENDANT 07-5153 CIVIL TERM ORDER OF COURT AND NOW, this ~~ day of April, 2008, plaintiff having filed preliminary objections to require defendant, John Kavanagh Company, "to file a more specific pleading, identifying the contract under which it is seeking relief and specifying the provisions of the contract which it alleges QBW breached," and defendant having filed a written response setting forth that it "has no objection to the relief requested by QBW," IT IS ORDERED: (1) Defendant, John Kavanagh Company, shall, within twenty days of this date, file a more specific pleading identifying the contract under which it is seeking relief and specifying the provisions of the contract which it alleges QBW breached. (2) Plaintiff s preliminary objections are removed from the argument court list. u Y E. 1~'~hlin eR ,~s 1 r. 0.c-~So ~ L.a-,ur d T ~ c~ s ohn A. Gill, Esquire For Plaintiff By th ~u'rt/ Edgar B. Bayley, J. .I Hubert X. Gilroy, Esquire For Defendant Court Administrator sal d C ~~ C''Yi -~ ~ f =~:~ CL ?~ ~ h • Y ..~ Hubert X. Gilroy, Esquire I.D. No. 29943 Trudy E. Fehlinger, Esquire I.D. No. 202753 MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER MARTSON LAW OFFICES 10 East High Street Carlisle, Pa 17013 (717) 243-3341 Attorneys for Defendant John Kavanagh Company QUALITY BUILDERS IN THE COURT OF COMMON PLEAS OF WARRANTY CORPORATION, CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff vs. N0.5153-07 JOHN KAVANAGH COMPANY, CIVIL ACTION -LAW Defendant NOTICE TO PLEAD TO: QUALITY BUILDERS WARRANTY CORPORATION, PLAINTIFF c/o John A. Gill, Esquire Quality Builders Warranty Corporation 325 North Second Street Wormleysburg, PA 17043 YOU ARE HEREBY NOTIFIED TO FILE A WRITTEN RESPONSE TO THE ENCLOSED NEW MATTER AND AMENDED COUNTERCLAIM WITHIN TWENTY (20) DAYS FROM SERVICE HEREOF OR A JUDGMENT MAY BE ENTERED AGAINST YOU. MARTSOIaT L+AW OFFICES By Date: April 28, 2008 Hy~rt X. Gilroy, Esquire D. No. 29943 Trudy E. Fehlinger, Esquire I.D. No. 202753 10 East High Street Carlisle, PA 17013 (717) 243-3341 Attorneys for Defendant '. F:~Les~c~cvz~~z xe~eo~nvmz.~.nme~a.ntas.~ca~ Hubert X. Gilroy, Esquire I.D. No. 29943 Trudy E. Fehlinger, Esquire I.D. No. 202753 MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER MARTSON LAW OFFICES 10 East High Street Carlisle, Pa 17013 (717) 243-3341 Attorneys for Defendant John Kavanagh Company QUALITY BUILDERS WARRANTY CORPORATION, Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA vs. JOHN KAVANAGH COMPANY, Defendant N0.5153-07 CIVIL ACTION -LAW DEFENDANT'S ANSWER WITH NEW MATTER AND AMENDED COUNTERCLAIM TO PLAINTIFF'S COMPLAINT AND NOW, comes the Defendant, John Kavanagh Company, by and through its attorneys, MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER, and hereby responds to Plaintiff's Complaint as follows: 1. Admitted. 2. Admitted. 3. Admitted. 4. Admitted in part and denied in part. Defendant admits that the parties executed an Addendum to the Builder Agreement dated February 4,1999, in which Defendant agreed to maintain its membership in the QBW Ten-Year Limited Warranty Program for three years to commence on February 4,1999, but Defendant has no recollection of and therefore denies that on February 7, 2002, Defendant re-executed the Agreement extending the term of membership for an additional three years, which would renew for like term, unless 30 days prior to the expiration of the current term or any extension either party provides the other 30 days advance written notice. 5. Denied. After reasonable investigation, Defendant is without knowledge or information at this time sufficient to form a belief as to the truth or falsity of the averments in this paragraph, and proof thereof is demanded. 6. Denied. The averments contained in this paragraph constitute conclusions of law to which no response is required. By way of further answer, it is specifically denied that Defendant breached the agreement. 7. Admitted. 8. Admitted. 9. Denied. After reasonable investigation, Defendant is without knowledge or information at this time sufficient to form a belief as to the truth or falsity of the averments in this paragraph, and proof thereof is demanded. 10. Denied. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth or falsity of the averments in this paragraph, and proof thereof is demanded. 11. Denied. The avenments contained in this paragraph constitute conclusions of law to which no response is required. By way of further answer, it is specifically denied that Defendant breached the agreement. 12. Denied. By way of further answer, it is specifically denied that Defendant breached the agreement. 13. Denied. By way of further answer, it is specifically denied that Defendant breached the agreement, and therefore payment of attorney's fees is not authorized. 14. Denied. The averments contained in this paragraph constitute conclusions of law to which no response is required. In the alternative, after reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth or falsity of the averments in this paragraph, and proof thereof is demanded. WHEREFORE, Defendant John Kavanagh Company requests that the Court enter judgment in its favor and against Plaintiff Quality Builders Warranty Corporation, and dismiss Plaintiff s Complaint with prejudice. NEW MATTER 15. Paragraphs 1 through 14 are incorporated by reference as though fully set forth herein. 16. Plaintiff Quality Builders Warranty Corporation (hereinafter referred to as "QBW") has failed to state a cause of action against Defendant John Kavanagh Company (hereinafter referred to as "Kavanagh"). 17. Kavanagh denies that it is contractually bound to QBW as a result of the purported addition to the February 4, 1999 Addendum as alleged by QBW. A copy of the purported addition to the February 4, 1999 Addendum is attached hereto as Exhibit "C." 18. John Kavanagh, President of John Kavanagh Company, whose signature allegedly appears after the purported addition to the February 4, 1999 Addendum, neither recalls seeing or signing the purported addition. 19. Kavanagh's first knowledge of the purported addition to the February 4, 1999 Addendum came about when it was faxed to Kavanagh by QBW in July 2007. 20. The purported addition is set forth on the same page as the February 4, 1999 Addendum, but is undated, in a different font-type, and contains an alleged signature on behalf of John Kavanagh, which is different from John Kavanagh's signature on the February 4, 1999 Addendum. 21. QBW has refused to provide Kavanagh with the original of the purported addition to the February 4, 1999 Addendum. 22. QBW is now attempting to use the purported addition to the February 4, 1999 Addendum to obligate Kavanagh to continue to purchase warranty services through February 2008. WHEREFORE, Defendant John Kavanagh Company requests that the Court enter judgment in its favor and against Plaintiff Quality Builders Warranty Corporation, and dismiss Plaintiffs Complaint with prejudice. AMENDED COUNTERCLAIM 23. Paragraphs 1 through 22 are incorporated by reference as though fully set forth herein. 24. The last written agreement in effect between John Kavanagh Company and QBW was a Builder Agreement entered into on June 2, 1995. A copy of the Builder Agreement is attached hereto as Exhibit "A." 25. The 1995 Builder Agreement was extended for an additional three years by a written Addendum executed by the parties on February 4, 1999. A copy of the 1999 Addendum to the Builder Agreement is attached hereto as Exhibit "B." 26. The term of the Builder Agreement as extended by the 1999 Addendum expired on February 4, 2002. 27. QBW alleges that Kavanagh then executed a purported addition to the 1999 Addendum to extend the agreement between the parties for an additional three yeazs. A copy of the purported addition to the Builder Agreement is attached hereto as Exhibit "C." 28. John Kavanagh denies executing the purported addition to the 1999 Addendum to the Builder Agreement, and does not recall seeing that document before it was faxed to John Kavanagh Company in 2007 after John Kavanagh Company informed QBW that it would no longer be purchasing limited warranty services for its customers from QBW. 29. Since the expiration of the 1999 Addendum to the Builder Agreement on February 4, 2002, QBW and Kavanagh have been dealing with each other under aseries ofhouse-by- house oral agreements, pursuant to which QBW provided limited warranty services for individual homes that Kavanagh enrolled in the QBW warranty program in exchange for fees paid by Kavanagh to QBW. 30. During that period of time, QBW pressured Kavanagh to make payments to QBW before QB W's warranty services were required by Kavanagh's customers, both in terms of premature deposits at eazly stages of construction and full warranty payments for unsold houses. 31. QBW also increased its rates to Kavanagh, without indicating to Kavanagh that QBW was charging these higher rates. 32. QBW also charged Kavanagh rates based upon the expected selling price of homes to be enrolled in QBW's warranty program rather than the ultimate actual selling price of the homes. 33. Beginning in late 2006 or eazly 2007, QBW began increasing its demands for Kavanagh to prematurely enroll its homes in QBW's warranty program. 34. Notwithstanding the fact that Kavanagh was engaged in limited construction activities during this period and had few, if any, homes to be enrolled, QBW continued to attempt to force Kavanagh to enroll homes prematurely. 35. QBW began demanding enrollment of homes by Kavanagh when Kavanagh pulled permits for their construction, even if construction was not to begin for several months and even if closing was not to occur for several more months. 36. In the spring of 2007, Kavanagh requested that QBW provide Kavanagh with a copy of what QBW contended was the written agreement between Kavanagh and QBW, and QBW failed to do so. 37. In July 2007, Kavanagh sent a letter to QBW terminating the relationship. 38. In response to Kavanagh's July 2007 termination letter, QBW finally sent Kavanagh a copy of what QBW contended was the written contract between the parties via facsimile, but refused to provide Kavanagh with the alleged original document, and refused to present the alleged original document to Kavanagh for review despite Kavanagh's request that QBW do so. 39. Included in the documents that QBW faxed to Kavanagh was an Addendum to the Builder Agreement dated February 4, 1999, which established a three yeaz term for the contractual relationship between QBW and Kavanagh, which term expired in February 2002. 40. After the term of the February 4,1999 Addendum to the Builder Agreement expired in February 2002, no written contract governed the relationship between Kavanagh and QBW. 41. In July 2007, after Kavanagh terminated its relationship with QBW, QBW faxed Kavanagh a purported addition to the February 4, 1999 Addendum, which was set forth on the same page as the February 4, 1999 Addendum, but was undated, in a different type, and contained an alleged signature on behalf of John Kavanagh, which appeazs different from John Kavanagh's signature on the February 4, 1999 Addendum. 42. Kavanagh neither recalls seeing or signing the purported addition to the February 4, 1999 Addendum. 43. The purported addition to the February 4, 1999 Addendum was not in Kavanagh's files or records until it was faxed to Kavanagh by QBW following Kavanagh's termination of the relationship between Kavanagh and QBW. 44. Kavanagh's first knowledge of the purported addition to the February 4, 1999 Addendum came about when it was faxed to Kavanagh by QBW after QBW received Kavanagh's letter to QBW terminating the relationship between Kavanagh and QBW. 45. QBW has refused to provide Kavanagh with the original of the purported addition to the February 4, 1999 Addendum. 46. QBW is now attempting to use the purported addition to the February 4, 1999 Addendum to obligate Kavanagh to retroactively pay additional amounts to QBW for warranty services provided to Kavanagh's customers. 47. Kavanagh has been damaged as a result of QBW's conduct. BREACH OF CONTRACT 48. Paragraphs 1 through 47 are incorporated by reference as though fully set forth herein. 49. Through QBW's unreasonable and harassing enrollment efforts toward Kavanagh, and QBW's unannounced rate increases, QBW breached the oral agreements between Kavanagh and QBW. 50. Kavanagh has been damaged as a result of QBW's breach in an amount currently believed to be within the jurisdictional arbitration limits of $50,000, exclusive of interest and costs. WHEREFORE, Defendant John Kavanagh Company demands judgment in its favor and against Quality Builders Warranty Corporation in an amount currently believed to be within the jurisdictional arbitration limits of $50,000, exclusive of interest and costs, and such other relief this Court deems just and reasonable under the circumstances. MARTSO AW OFFICES By ub .Gilroy, Esquire Trudy E. Fehlinger, Esquire I.D. Nos. 29943 and 202753 10 East High Street Carlisle, PA 17013 (717) 243-3341 Date: April 28, 2008 Attorneys for Defendant F:\FILES\Clienu\ 12772 Kavenag6\ 12772. LAmended.ANS.wpd RECYCLED PAPER a RECYCLABLE ' BUILDER AGREEMENT AGflEEMEt`JT made this 7th day of June , 1 g 9__ 5____, between QUALITY BUILDERS WARRANTY CORPORATION, a Pennsylvania corporation, herein referred to as "QBW,° and John Kavanagh Company Name of Builder: (indicate whether a corporation, partnership, individual or other) Of Address P.o. sox 9415. Greensboro, rrc 27408 herein referred to as `Builder." State Zip SECTION A. MEMBERSHIP AND TERM: 1 _QBW administers a program whereby home builders registered with QBW enroll homes they construct in the program and purchasers of those homes are protected by a warranty against certain specified defects. 2. In order to develop and maintain a good reputation for providing protection to purchasers of well-built homes, QBW protects and promotes its good-will by careful selection of builders to participate in its warranty program. 3. Builder desires to participate in QBW's warranty program and, to that end, agrees to abide by the provisions of this Agreement and to conform its behavior to the standards expressed herein and in the Limited Warranty Agreement. Builder warrants that all information supplied to QBW in connection with its application is true and correct. 4. All registration fees (initial and annual rescreening) are set by QBW at its discretion and are non-refundable. 5. QBW, upon executing this Agreement, has accepted Builder as a member of its warranty program, subject to the Builder's continuing performance of its obligation under this Agreement. 6. Builder's membership shall commence on the date of F~cecution by QBW and shall continue until terminated by either party in accordance with the terms of this agreement. QBW reserves the right to rescreen Builder annually. If QBW determines that Builder does not meet its approval standards upon rescreening then QBW may terminate Builder's membership and the provisions of Section B, paragraph 6, shall be in effect. SECTION 8. HOME ENROLLMENT: 1. Requirements. As part of its participation in QBW's warranty program, subject to QBW's acceptance, Builder agrees to enroll in the program every home, Builder, Builder's Principals, or any entity under Builder's, or Builder's Principals common control constructs in any state in which QBW operates and agrees to pay all fees required by QBW in the enrollment process, which fees shall be non-refundable. 2. Procedures. Builder agrees to enroll its homes according to procedures established by QBW. Builder may enroll homes currently under construction and homes completed but not sold or occupied (as of the date of this Agreement pr the date of reacceptance following a period of suspension or non-participation) provided that enrollment is made within 45 days of execution of this Agreement or reacceptance, and QBW has inspected and approved the home. When enrolling other than a detached single family dwelling, Builder shall enroll each individual unit of any multi- unit dwelling such as but not limited to duplexes, townhouses and condominiums. For each home enrolled, the Builder shall pay a warranty fee as determined by QBW within the time periods estab- lished by QBW. All warranty fees are non-refundable. A minimum warranty fee of $100.00 shall apply. QBW will provide Builder with a copy of the Limited Warranty Agreement and Enrollment form. Builder and pur- chaser must complete, sign the Agreement and Enrollment Form at closing, and Builder agrees to furnish QBW with a copy of the signed Enrollment form within ten (10) days of closing. Builder agrees not to charge the purchaser direct- ly the cost of the enrollment fee. A home wil{ not be considered enrolled until QBW receives and approves the fully exe- cuted and completed Enrollment Form, payment of all fees, and an approved final inspection. 3. Reservation of Power of Review. QBW reserves the right to reject any home submitted for enrollment in the program if (a) the Builder is not a member in good standing; (b) the home is not constructed in accordance with the Warranty Standards or building codes specified in the Limited Warranty Agreement; (c) the Builder did not observe the enroll- ment procedures; (d) misstates or misrepresents any information; (e) in any way fails to comply with the terms of this Agreement. 4. Assignment of Rights. 4f a purchaser files a Complaint pursuant to the Limited Warranty Agreement which the Builder fails to correct, the Builder hereby assigns to QBW or its insurer, as the case may be, any rights which Builder may have against a supplier, manufacturer, subcontractor or other person for work performed or materials supplied in con- nection with that claim. Builder agrees to cooperate fully with QBW and to provide QBW with atl information which it requests pertaining to the claim. if Builder fails to so cooperate, Builder agrees to compensate and indemnify QBW for any damages sustained by such lack of cooperation . 5. Breach and Remedy. If Builder fails to enroll any eligible home as required by this Agreement, QBW may seek specif- ic enforcement or other appropriate relief in legal or equitable proceedings, even if this Agreement has been termi- nated. Furthermore, Builder agrees to indemnify and hold harmless QBW and its insurer for any losses or any dam- ages QBW may suffer as a result of Builder's breach of this Agreement and such lasses and costs shall include reasonable attorney's fees and expert witness fees. Builder hereby irrevocably authorizes and empowers any attorney or any court of record of Pennsylvania or else- where to appear for and confess judgment against Builder for all amounts for which Builder may become liable to QBW ~ - ~ .~ Exhibit "A" for the breach of this Agreement, as evidenced by an affidavit signed by an officer of OBW setting forth the amounts then due, plus attorney's fees incurred by QBW, with costs of suit and release of errors. Such authority shall not be exhausted by any one exercise thereof but judgment may be confessed as aforesaid from time to time as often as there is a defau{t. Remedies stated herein are elective and not exclusive and QBW may elect to proceed under this or any other paragraph in this Agreement. 6. Suspension or Termination. QBW may terminate, or at its option suspend, Builder's participation in OBW's Warranty Program, or any entity or individua4 which Builder is affiliated, if QBW determines that Builder has done any of the fol- lowing, which shalt be deemed a breach of this Agreement. (a) fails to comply fully with all provisions of this Agreement; (b) fails to perform any of its obligations under this Agreement, including, but not limited to, cooperating in the opera- tion of the program's informal dispute resolution and arbitration procedure; (c) fails to respond to ~BW's notice of a homeowner's complaint; (d} fails to comply with a decision which is rendered pursuant to complaint procedures; (e) fails to provide adequate assurance to QBW within ten (10) days after it receives a written request from QBW for such assurance that (within a reasonable timetable established or approved by QBW) it is willing and able to coop- erate in dispute settlement and to perform the obligations under any decision which is rendered pursuant to such procedures; (f) fails to otherwise cooperate in the operation of the QBW Program in accordance with the rules and regulations of the C18W Program; (g) fails to provide timely proof of compliance with this Agreement, as and when requested by QBW; (h) fails to comply with QBW Warranty Standards and building codes as stated in the Limited Warranty Agreement; (i) fails to comply with the enrollment procedures established by oBW; (j} fails to provide proof that enrolled homes have been subjected to required inspections; (k) fails to respond to purchaser complaints in a timely manner and as provided in the Limited Warranty Agreement; (I) fails to perform its obligations with professional competence or conduct its operations from a position of financial strength and stability; (m) fails to notify QBW within 30 days of a change in ownership, company name or company standing, financial con- dition, or of any other material fact which might affect Builder's ability to meet its obligations under this Agreement; (n) fails to meet ethical standards in its dealings with customers; or (o) misstates or misrepresents any information in connection with its application or in the rescreening process. G1BW reserves the option to reinstate terminated affiliates of the primary, terminated Builder if QBW determines that the terminated Builder or its principals are not in a position to control the affiliated Builder. Termination of Builder by QBW shall not affect the rights or obligations of any of the parties to this Agreement with respect to the Warranty Program in effect at the date of termination, subject to the provisions pertaining to voidability. If a Builder is suspended or terminated, he shah not represent himself to be a member of the QBW Warranty Program nor offer the C~BW Warranty and shall not use its Logo or refer to the program in any way nor attempt to enroll any home. The Builder shall immediately notify any Buyer currently under contract to purchase a home of the suspen- sion or termination and that the QBW Warranty Program has been withdrawn. Upon request, Builder shall immediate- ly return to G1BW all materials supplied by QBW and all material making reference to G~BW. Should Builder fail to take these steps, it shall indemnify and hold harmless QBW and the insurer against any and all expenses incurred and loss- es suffered, including but not limited to attorney fees, by either of them as a result. In addition, Builder shall pay inter- est to QBW at the rate of 18% per annum on all sums due to QBW hereunder if such sums are not paid within 30 days of demand by ©BW. Builder may terminate this Agreement upon 30 days advance written notice to QBW. If so terminated by Builder or by QBW, Builder's obligations under this Agreement shall continue as to those homes enrolled during the period in which this Agreement was in effect. 7. Notice. if QBW possesses a reasonable belief that reason exists to terminate or suspend a Builder for violation of this Agreement, QBW may immediately terminate or suspend the Builder by providing it with written notice. If QBW elects to suspend the Builder, such suspension will remain in effect until Builder has cured all defects to QBW's satisfaction, however, QBW reserves the right to terminate any suspended Builder. 8. Votdabifity. QBW reserves the right to void any enro{Invent if Builder misstates or misrepresents any information in its application or in the rescreening process or misstates or misrepresents any information in the enrollment of a particu- lar home or fails to pay any fees due for enrollment of any particular home or fails to forward an enrollment form for a particular home within 10 days as required. SECTION C. BUILDER'S OBLIGATIONS: 1. Construction Obligations. Following are the Builder's obligations with respect to ~BW's Warranty Program: (a) Builder shall construct all homes in conformity with the Warranty Standards provided in the Limited Warranty Agreement, and/ or in conformity with approved building codes and other standards established by C?BW and in effect at the beginning of construction of the enrolled home. QBW reserves the rights to establish special require- ments for escrow payments or other means of protection with respect to any homes constructed by Builder which QBW determines to be `High Risks." (b) Builder agrees to have all homes inspected, as required by oBW, and to pay all fees for the inspection and to pro- vide evidence of inspection as and when required by QBW. QBW shall provide inspectors or shall approve gov- ernmental inspectors. : (c) QBW shah have the right to perform spot inspections to verify Builder's compliance with this Agreement and Builder agrees to cooperate. (d) The Builder agrees to indemnify and hold harmless OBW and/or its Insurer for any losses or damages QBW and/or its Insurer may suffer as a result of the use of fire retardant treated plywood on any building enrolled under the QBW Ten Year Warranty Program. This will include all claims and liability for losses, damages and expenses which C1BW and/or its Insurer may sustain, incur, pay or be liable for by means of any investigation settlement or litigation of any claim or action which may be raised, made or brought due to the potential defects caused or likely to be caused by use of the subject plywood. (e) If the Builder is informed by QBW that it is building in an area designated as one with active soil conditions, the Builder agrees to obtain such soils investigations and reports as may be required by QBW. If such reports indicate a need for special foundation design the Builder agrees to construct the foundation according to the design of a registered professional engineer to take into account the conditions disc{osed by the soil tests. 2. Warranty Obligations. Builder agrees to perform all obligations arising from this Agreement and the Limited Warranty Agreement. The Builder shal4 at its own expense perform all obligations as set forth in the QBW Warranty Program and this Agreement which includes meeting the warranty standards upon notice from the Purchaser without the necessity of QBW intervention. if Builder fails or refuses to perform its obligations in accordance with the Limited Warranty Agreement, QBW will perform those obligations; however, Builder agrees to reimburse OBW andlor its insurer for all expenses incurred in performing those obligations, including, but not limited to costs of materials, cost of collection, labor, architect's fees, engineering fees, and attorney's fees. OBW reserves all rights of subrogation. If the Builder repairs a major structural defect during year 1 or 2, QBW must be notified. Once notified, QBW will perform a compliance inspection. OBW agrees to perform its obligations pursuant to the Limited Warranty Agreement in years three through ten pro- vided that the defect that is the subject of the Purchaser's claim did not occur within the first two years and was not concealed or cosmetically or improperly repaired by the Buifdar during those two years. Builder is not responsible for any damage caused by a major structural defect, as defined in the Limited Warranty Agreement, occurring after the expiration of the first two years of the Limited Warranty Agreement provided the defect was not concealed or cosmetically or improperly repaired during those two years. QBW will hold the Builder harmless for the reasonable cost of repairing or replacing such defects, and against the payment of any money judgment, order or decrees made against Builder for the repair of the defect. 3. Builder is authorized to advertise its membership in the OBW Warranty Program and to use its Logo in its business, pro- vided that any reference to OBW or its insurer, whether contractual or advertising copy, be approved by QBW in writ- ing in advance of its use. SECTION D. INFORMAL DISPUTE PROCEDURE: 1. Builder should be aware that the Limited Warranty Agreement provides for an informal dispute settlement and arbitra- tion procedure to resolve complaints by purchasers under the Limited Warranty Agreement. Builder should become familiar with the settlement procedures in order to be aware of its rights and responsibilities. Builder agrees to coop- erate fully in the procedure and to be bound by and to comply with any decision of an independent third party, ar arbi- trator. If the Builder fails to perform its obligations hereunder in a timely and good and workmanlike manners such fail- ure shall be considered to be a refusal to perform governed by paragraph C.2 hereof. 2. The Builder agrees to pay all fees charged in connection with the informal dispute settlement and arbitration proce- dures. SECTION E. TERMS GOVERNING OPERATION AND INTERPRETATION: 1. Builder agrees to perform its obligations under this Agreement in a timely manner. However, time provided for perfor- mance of obligations hereunder shall be extended by events not subject to control by the person obligated to perform. Such events include acts of God or the public enemy, or, riot, civil commotion or governmental conduct. 2. Descriptive headings as to the contents of particular provisions of this Agreement are intended for convenience only and are not to be considered in construing this instrument. 3. This Agreement shall not constitute or be considered an agency, employer-employee relationship, joint venture or part- nership between the parties. None of the parties, nor any of their employees or agents, shall have the authority to bind or obligate the other party except as provided by this Agreement. 4. Should any provisions of this Agreement be determined by a court of competent jurisdiction to be unenforceable, that determination wilt not affect the validity of the remaining provisions. 5. This Agreement shall be interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania. All suits instituted under this Agreement shall be brought in Pennsylvania in a court of competent jurisdiction. Builder hereby consents to the personal jurisdiction of the Pennsylvania courts. For Builders who are licensed in the state of New Jersey, note that this agreement shall be interpreted and enforced in accordance with the laws of New Jersey; for all homes enrolled with an address in New Jersey. 6. Builder shall not assign this Agreement without the prior written consent of QBW. 7. This Agreement shall insure to the benefit of and be binding upon the heirs, executors, administrators, assignee, and successors of the representative parties. 8. This instrument, and security documents and documents referred to or incorporated herein by reference, contains the entire agreement between the parties, and no statement, promises, or inducements made by either party or agent of either party that is not contained in this written contract shall be valid or binding; and this contract may not be enlarged, modified, or altered except in writing signed by the parties and endorsed hereon. s. Failure of either party to insist upon compliance with any provision of this Agreement shall nat constitute a waiver of that provision, 10. All notices required hereunder must be in writing and sent by certified mail, postage prepaid, return receipt request- ed, to the recipient at the respective address shown below, or to whatever address the parry may designate in writing. 11. The effective date of this Agreemerlt~hall be the date of execution by QBW. ~; . %~ By ~--. CORPORATION Presltient Date of execution by OBW: June 2 , 1995 Builder's Registration No.: 60093 BUILDER: John Kavanagh Company (Name of Builder -please print or typo] DATE sy June 7, 1995 of Authorized Raprsaerrtatlvs - Title) (Please print name/tltle of executor) P.O. Box 9415, Greensboro, NC 27408 (Address) Copyright 1988 Quallry Builders Warranty Corporation OBW fnRM 050 3195 ~~ RECVCLEO YAPFR QARLE {xl rb~+ l3 xonnaxxru 'tsas addtrxi:Y~. is bcewen Ova1LCl DnalCer~ t~anaaa:r Gaeparaclen ~Ca~l .:nd :OFfN eauaNaSa ec~tavY rneoernd co as "9ualdar'. 9uildar :a a aaatalr :n :za olm io :r.s L:aitaa VOZT~LY ?ropcaa. C-w tae -ulldar :aa::a -n amity rra aq:ufaaac .grad :`..sr :cJprC:-v.:~q„ca sand sa114atic:s~ thereUadar. uo., wH77171oAE. 0~ ae,1 auald~r, in erG`snya :~ chi aua:axal Caveaanta :entaina6 ACir:.z andsncarWir•9 to `,~ Sagallr sv~rtd :.~nsy sgroe :aa :o .o..-: i. ~r 1COVa :CSStals aza dA =`tagral pose a1 t>la aaGCtdue .ud oza _nCOS70:~tCd Aac~in. ., Wilda: anall ealntiia :t. fmdattEip 14 gIIY'i Llalcad wazranty Pr4q:aa ,ar sa acdieianai parted ut :TSea :71 rears ea Coaaaaaa apon eha balaw data and euo.ie to: snrol:mane i~eaea wlsn aul3def eonattvtta dursa9 tpae c1aM• ausidar say not :rzmirucs A1s ;arsczp+-c~on Sn LL tlir ?ragsaa watbia tnae peraati uele:.^ caaconcad ea by t1eN. 3. Oulldas mall par sn s'Y1nal aaabossasp e.a. a. suilaar•s roes wsll 5o S1.f0 par eaanaana. Tea :ace ra11 rswata la attae: tar eh. o.rsor st t11G addaidua. 3. T! in eh. vrstoraaasu avast of a rsu '=r^^----. cs+>:aa br i+gsalaeian. x aSturtiaaa hayaad t!u aaneral at qeM, iuila+t has t?.a sig4e to teruinata passiG.paaSen wSth no ppulti~aa_ r. Wlldat alrsa+s Ca aasoll all beers eaastzvctsi br eAae, ee any a::slaw• it1 tlt+r -w vrgza•• I! wiltaz os say a!liliaea tolls ca aer.li all AeNr. :at Clt~a tars aoeitied le as anovs. iuildar agca.r eo par g7gl epo ailtasancs basrran his gnslitlad raar.Oaaad w ao:tlal valwr asd tM diaeeuntad rata apaestied la k• sbow for all news earelire dursnq Thu agcsaaw-t. lsrrrns suss na psul villas 70 ears et iiaesvesr at breaea ar sualdars triratura tal73gatiafe Dl tats a~rNMnt. 7. 2! C21r LrcW Wntiinad i11 tlu~ addardur arl 1aSCeeal3tatit wlth ~ -1::~ Agza+arri~t. L!q tizyi Ot Chi: 7ddalidtsa -w.ti 9aVau'e_ ~ irrcxes! rNZ~, wa partiet teesu hays canard eats adeandns to Da aa=aeucad br ts.ir duly auenort:ad e!lseers, as er rats a°` day of Fa'spusry ~ 1999. C4at,Ttz i02i0i1l.1 M~RIIN4Y C;71A. vii pros: sac ,7otiq ,1~71v~waaY t~oi~a1- as- ~tN'a~ Tha term of fhe Adcies-dum is extended for ao additional tlit~e (3) years And will renew for like terms unless thirty (3t)) days prior to the expiration of dtis farm ar any extensions either party provide9 the other tl2irty (38) days advmace written natica that tttry intend not to e~atatd the period dttiiling the builder to a lower rate. If Builder provides notice, QBW will adjust the 19uilder'a rate inward e85ecxive at the end.of the then current term. QUALITY BUILDlrRS WARR~TY CORPORATION By, ~, n r,' rol~v IcAVAxaGx cortpANY ~ 4 ~ %.~ 1 U Exbfbit "B~r C~ R[CYCLEDPAPER RECYCUBLt ;~,~{,~brf C xan~oax7~ '11c 3ddafseu^, is bcewtien QuaiLLy aualeera Werzan:y Cerpar3c,an ICiuti .:nd :ONH uuusaca cc>+tlw .qr^rssd [o ar "9uLlder'. 9ulidas :J a m^awer Sn s:A OA^ ti0 :ear L:aatert 4arssscy Trevraa. C8W aha DtLtldas Cos::• -R Rodi:Y tAS JW.-soaane .+nd :~^az -eapec:_v :s?rch u+d ssllgwta~s tttieraundes. Np., YNZaETOAt. Cm+ Sn'~ a4ildas, in eaGSnye :s ch^ muLti:ai .~JVefuttra :.antStAe6 hCSCi.'ti and intotidin4 Cc ~a !ny^Sly aa^+71 s4rasY 3grae ac :Oar.:: 1. 'Lr iDO~f :Ctt Gala ar^ an :yLC'ii r^3 part of t:fia a6Ga~dtim std 3Se _nees~osntcd Rarrsn. .. aysldev ensll ealawin :L. ^mL^ra61p sa G8Y'a Lieicri darranty Tsa4=aa Ca.- 3D acditlonsl peraad of :hsr^ ;]3 y^asa m cameo upon ttti^ b^len+ does and euarat to: e~ol:+tette e~eaea Veti:On essildrr eonauucta during tAec La^^. 9u:ld^t way aoa :ereiru:^ Ass :arm»c:p+oLan in ale Wr Pragraa wsthsa trine a•rar+d utla:.^ GOiL:07tiLad ee b'!' 9sw. 3. puildam snsli par a s^aual ~6oraasp r«. a. suilaer's race wall b^ St.i0 ar ehmcane. ':'tie :acs wall n^ala 19 rrttG: tar sn^ persd e! Glue h4lufdw.. s, L! as tA^ uncesasaem aveaa as a sssA iacss.s^, cau:^d by u4:alACiw, x aicuaeiena beyond the eoAesel ae QIW, suildes Ana t: s rigt-c m Carninata partictualoa with na piea^ltiu^. r. Wilder agrees W ^arell all bead eeasartixeN by csse+a, ee any a:dilratea, in tlt^ ptY prolru. 21 7wlldez as any attilias+ lairs <e eez.l1 all heMa. rat tltitf Lore ap^cili^d in r1 amroe. D^aides a9i^.+ to pay C>tY tA^ estr^r^nce 0^awen hie qualiti^d eatv,ma^d v/1 aoasui wolutr tad :!ti^ di^emti^fteA rata apse:tied in a4 a~lve !ec all ]!n^ae mra1J.^d durLnq rhea a4cLwerne- !ay^^na suss n^ peed ++ikhae 74 nays et diae~evesy si b=tsace ar auald^ra ern^cure c^rasnaeson of thin a~zeetwat. 7. I! t!u uc^s cantaitei in t4ia iddaa4i~ ire lneaeaiacenc vath t!u D-:11aar ags^ea~nt. Lha Lta^s0 0! Chi. ad4elldti.:pail govern. 'SI MT1M[! L1-f parties neeaeo have rs+ii^d eels lddrndus t0 1» exaNCed by rs^iL duly anttfesls+d eltieesa. 1i or rats a~•"- day of Feeeuary ' 1999. gV~tiS.iS1r 702LWat! Ma9JNINtY C7RA. v'k sass eac Jal1e1.XRViW-RY G010~lYrY~ r::~ G The tam of the Addendum is eximded for as additionu! three (3}years And will reasew for Iike terms unless thirty (30} days prior to the expiratim of this term ar any exteasiatis either party provides the other thirty (3t)) days advmaoe written notice tl>at ttiry intend not to e?aend the period esttitiing the builder to a lower rate. If Builder provides notice, QBW wall adjust the Builder's rate upward effective at the end. of the then current term. QUALITY BULLD~RS WA.RR ~ '1'y CORPORATION By: i n ~r; l'OHN KAVANAGH COMPANY ' 13v: ~° '1/ 4. 7.~1~. U // ExhibiC "~" TOTr;L F. ~~_~ VERIFICATION I, John Kavanagh, President of John Kavanagh Company, acknowledge I have the authority to execute this Verification on behalf of John Kavanagh Company and certify the foregoing Answer with New Matter and Amended Counterclaim is based upon information which has been gathered by my counsel in the preparation of the lawsuit. The language of this Answer with New Matter and Amended Counterclaim is that of counsel and not my own. I have read the document and to the extent the Answer with New Matter and Amended Counterclaim is based upon information which I have given to my counsel, it is true and correct to the best of my knowledge, information and belief. To the extent the content of the Answer is that of counsel, I have relied upon counsel in making this Verification. This statement and Verification are made subject to the penalties of 18 Pa. C.S. § 4904 relating to unsworn falsification to authorities, which provides that if I knowingly make false averments, I may be subject to criminal penalties. John Kavanagh Company Jo Kavanagh ~~~ ~a ~ ~~~~ CERTIFICATE OF SERVICE I, Melissa A. Scholly, an authorized agent for Martson Law Offices, hereby certify that a copy of the foregoing Answer, New Matter, and Amended Counterclaim was served this date by depositing same in the Post Office at Carlisle, PA, first class mail, postage prepaid, addressed as follows: John A. Gill, Esquire Quality Builders Warranty Corporation 325 North Second Street Wormleysburg, PA 17043 MARTSON LAW OFFICES "1 t By Melis a A. Scholly Ten East High Street Carlisle, PA 17013 (717) 243-3341 Dated: Apri128, 2008 ~.~ rJ ~~ c r.~ c~a = ~~` ~' ; , e i ~ ~ _ h..... ~~ __ ~, % .~ ~ ('i't ::~ y~'" .,. ~ ."~ -^C • y IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA QUALITY BUILDERS WARRANTY . CORPORATION . Plaintiff . v. . JOHN KAVANAGH COMPANY . Defendant CIVIL ACTION DOCKET N0.5153-07 NOTICE TO PLEAD TO: JOHN KAVANAGH COMPANY, DEFENDANT c/o Hubert X. Gilroy, Esquire Martson Deardorff Williams Otto Gilroy & Faller Martson Law Offices 10 East High Street Carlisle, PA 17013 YOU ARE HEREBY NOTIFIED TO FILE A WRITEN RESPONSE TO THE ENCLOSED NEW MATTER WITHIN TWENTY (20) DAYS FROM SERVICE HEREOF OR JUDGMENT MAY BE ENTERED AGAINST YOU. By _ Join A. Gill, Esquire ~ North Second Street Wormleysburg, PA 17043 (717) 737-2522 #41532 Attorney for Plaintiff Quality Builders Warranty Corporation ~ ~ IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA QUALITY BUILDERS WARRANTY CORPORATION Plaintiff v. JOHN KAVANAGH COMPANY Defendant CIVIL ACTION DOCKET N0.5153-07 PLAINTIFF'S REPLY TO DEFENDANT'S NEW MATTER AND AMENDED COUNTER CLAIM AND PLAINTIFF'S NEW MATTER PLAINTIFF'S REPLY TO DEFENDANT'S NEW MATTER 15. No answer required 16. Denied. QBW incorporates herein the allegations contained in its Complaint, its New Matter and its Reply to Kavanagh's Preliminary Objections. 17. Admitted in part and denied in part. It is admitted that Kavanagh denies that it is contractually bound however, the fact remains Kavanagh is contractually bound. By way of further answer QBW incorporates herein the allegations contained in its Complaint, its New Matter and its Reply to Kavanagh's Preliminary Objections. 18. Denied. QBW is not in a position to comment on whether or not John Kavanagh recalls seeing or signing the Addendum however, the Addendum was forwarded to QBW from Kavanagh's office and Kavanagh was extended a reduced rate as a result of the Addendum. 19. Denied. The Addendum was sent to Kavanagh. Kavanagh signed the Addendum. The Addendum was forwarded to QBW from Kavanagh's office. 20. Denied. The language on the Addendum speaks for itself and it is specifically denied that the signature on the Addendum is not that of John Kavanagh. 21. Denied. Kavanagh demanded that the original Addendum be mailed to them, which request was denied. QBW offered Kavanagh the opportunity to view the original. 22. Denied. The addition to the February 4, 1999 Addendum was added in order for Kavanagh to continue to receive a reduced rate. To the extent Kavanagh did not enroll all of its homes for the period of the Addendum, Kavanagh agreed to pay QB W the difference between its qualified rate and discounted rate. WHEREFORE, Plaintiff, Quality Builders Warranty Corporation, demands Judgment against Defendant, John Kavanagh Company in accordance with the relief sought in its Complaint and further requests that Defendant, John Kavanagh Company's Counter Claim be Dismissed. PLAINTIFF'S REPLY TO DEFENDANT'S AMENDED COUNTER CLAIM 23. QBW incorporates herein its Reply to Paragragphs 15 through 22. 24. Denied. The allegations contained in Paragraph 24 of Kavanagh's Amended Counter Claim are conclusions of law to which no reply is required. By way of further answer there were various written agreements entered into by the parties including, the warranties issued by Kavanagh to its homeowners, to which QBW was a party. To the extent that Kavanagh is alleging that the last Builder Agreement executed by Kavanagh was the one attached to QBW's Complaint and marked as Exhibit 1, QBW agrees. 25. Admitted in part and denied in part. It is admitted that the February 4, 1999 Addendum committed Kavanagh to three years of membership in exchange for a reduced rate, but it is specifically denied that the Addendum extended the Builder Agreement. The Addendum was a rate Addendum, not an extension of the Builder Agreement. Kavanagh could have terminated the Builder Agreement in accordance with the terms of the Builder Agreement, but it would have owed QBW the rate differential. 26. Denied. By way of further answer QBW incorporates herein its Reply to Paragraph 25. ~ l 27. Admitted that the rate Addendum was extended. 28. Denied. QBW is not in a position to comment on whether or not John Kavanagh recalls seeing or signing the Addendum however, the Addendum was forwarded to QBW from Kavanagh's office and Kavanagh was extended a reduced rate based on the Addendum. 29. Denied. There were no oral agreements wherein QBW permitted Kavanagh to enroll homes on a house by house basis. Additionally, the Addendum was a rate Addendum, not a term of membership Addendum. 30. Denied. QBW sought to have Kavanagh enroll its homes in accordance with the terms of its Builder Agreement. 31. Denied. QBW sought to have Kavanagh enroll its homes in accordance with the terms of its Builder Agreement. 32. Denied. QBW sought to have Kavanagh enroll its homes in accordance with the terms of its Builder Agreement. 33. Denied. QBW sought to have Kavanagh enroll its homes in accordance with the terms of its Builder Agreement. 34. Denied. QBW sought to have Kavanagh enroll its homes in accordance with the terms of its Builder Agreement. 35. Denied. QBW sought to have Kavanagh enroll its homes in accordance with the terms of its Builder Agreement. By way of further answer Kavanagh was not enrolling all homes it constructed since it had been approved and was enrolling homes with a competing warranty program. 36. Denied. QBW provided Kavanagh with copies of all Agreements. 37. Admitted. By way of further answer, the termination was in violation of the parties' Agreement. 38. Denied. QBW provided Kavanagh with all documents and provided Kavanagh with the opportunity to review the original document. QBW did decline to mail the original document to Kavanagh. 39. Denied. By way of further answer QBW incorporates herein its Reply to Paragraph 38. The Addendum was a rate Addendum for a minimum term of membership, not a membership term agreement. 40. Denied. By way of further answer QBW incorporates herein. the allegations contained in its Complaint, its New Matter and its Reply to Kavanagh's Preliminary Objections, and its Reply to Kavanagh's new Matter 41. Denied. By way of further answer QBW incorporates herein. its Reply to Paragraphs 19 through 20. 42. Denied. The Addendum was sent to Kavanagh. Kavanagh signed the Addendum. The Addendum was forwarded to QBW from Kavanagh's office. 43. Denied. The Addendum was sent to Kavanagh. Kavanagh signed the Addendum. The Addendum was forwarded to QBW from Kavanagh's office. 44. Denied. The Addendum was sent to Kavanagh. Kavanagh signed the Addendum. The Addendum was forwarded to QBW from Kavanagh's office. 45. Denied. Kavanagh demanded that the original Addendum be mailed to them, which request was denied. QBW offered Kavanagh the opportunity to view the original. 46. Denied. The addition to the February 4, 1999 Addendum was added in order for Kavanagh to continue to receive a reduced rate. To the extent Kavanagh did not enroll all of its homes for the period of the Addendum, Kavanagh agreed to pay QBW the difference between its qualified rate and discounted rate. 47. Denied. Kavanagh breached its Agreement with QBW. BREACH OF CONTRACT 48. QBW incorporates herein its Reply to Paragraphs 15 through 49, 49. Denied. There were no oral agreements between Kavanagh and QBW, which is further evidenced by Kavanagh's failure to identify the terms of the supposed oral agreements. 50. Denied. QBW specifically denies that it has breached any agreements. WHEREFORE, Plaintiff, Quality Builders Warranty Corporation, demands judgment against Defendant, John Kavanagh Company in accordance with the relief sought in its Complaint and further requests that Defendant, John Kavanagh Company's Counter Claim be Dismissed. PLAINTIFF'S NEW MATTER TO DEFENDANT'S COUNTER CLAIM 51. In May of 1992, Kavanagh forwarded to QBW's place of business in Pennsylvania, an application to become a member QBW. A copy of the application is attached hereto, incorporated herein and marked as Exhibit 1. 52. In connection with the application Kavanagh submitted a Builder Agreement to be executed by QBW upon acceptance of Kavanagh into the QBW program. 53. On June 29, 1992, QBW approved Kavanagh for membership in its program, QBW executed the Builder Agreement at its offices in Pennsylvania and forwarded an approval letter and accepted Builder Agreement to Kavanagh. A copy of the approval letter and Builder Agreement is attached hereto, incorporated herein and marked as Exhibit 2. 54. Section A, 5, of the Builder Agreement, indicates that the term of the Agreement shall be for a one year period to commence on the date executed by QBW and that Builder may reapply for re-registration, and upon approval by QBW, the Builder shall continue as a participating member for another year. 55. Kavanagh executed a Renewal Agreement in 1993 and 1994. Copies of those Agreements are attached hereto, incorporated herein and marked as Exhibit 3. 56. In 1995 QBW changed the procedure requiring Builders to execute annual Builder Agreements. A copy of the Builder Agreement executed by Kavanagh in 1995, which is the current Agreement under which Kavanagh's membership in the QBW program is governed, is attached hereto, incorporated herein and marked as Exhibit 4. 57. The Agreement executed in 1995 indicates that the Builder's membership shall commence on the date of execution by QBW and shall continue until terminated by either party in accordance with the terms of the Agreement. (See Section A, 6 of the Builder Agreement) 58. In 1999 the parties signed an Addendum, in which Kavanagh's fee for enrollment of homes was reduced in exchange for Kavanagh's promise to maintain its membership in the QBW Limit Warranty Program for athree-yeaz period. 59. QBW forwazded the Addendum to Kavanagh under cover letter dated January 5, 1999. A copy of the letter and Addendum to be signed by Kavanagh is attached hereto, incorporated herein and mazked as Exhibit 5 60. Kavanagh executed the Addendum and returned it to QBW's Pennsylvania office via fax on February 4, 1999. A copy of the Addendum and cover fax forwazded by Kavanagh is attached hereto, incorporated herein and mazked as Exhibit 6. 61. The Addendum was to expire in February 4, 2002 and QBW offered to extend the terms of the Addendum prior to its expiration. 62. A cover letter was forwazded to Kavanagh on February 4, 2002, adding language to the original Addendum, extending the original Addendum for an additional three- yeaz period with an automatic renewal clause. A copy of the cover letter and fax forwarded to Kavanagh is attached hereto, incorporated herein and marked as Exhibit 7. 63. Kavanagh signed the extension and mailed it to QBW's office in Pennsylvania on February 5, 2002. QBW received the Addendum on February 7, 2002. A copy of the Addendum signed by Kavanagh and the envelope in which it was mailed to QBW is attached hereto, incorporated herein and mazked as Exhibit 8. 64. The Addendum's were executed by Kavanagh, in order for Kavanagh to receive a reduced rate for a commitment for a minimum term of membership. 65. Paragraph 6 of the Addendum indicates that if the Builder fails to enroll all homes for the term of the Addendum, Builder agrees to pay QBW the differences between the "qualified rate", based on actual volume, and the "discounted rate" of a $1.60 per thousand. 66. Under the terms of Kavanagh's Builder Agreement and Addendum, Kavanagh was required to enroll all homes it constructed in accordance with QBW's enrollment procedures until February 4, 2008. 67. If Kavanagh failed to enroll all homes for the term specified in the Addendum, Kavanagh would have to pay warranty fees based on their "qualified rate" as opposed to the "discounted rate" specified in the Addendum. 68. To QBW's knowledge Kavanagh enrolled all homes it constructed until early 2007. 69. In early 2007, QBW became aware of homes, which Kavanagh had under construction but had not submitted for enrollment in accordance with QBW's procedures. 70. QBW contacted Kavanagh to have Kavanagh submit the homes for enrollment but Kavanagh failed to abide by the terms of their Agreement and enroll the homes in accordance with QBW's procedures. 71. On July 19, 2007,QBW received a letter from Kavanagh dated July 18,2007 indicating that they were terminating their membership in the QBW program. A copy of the letter is attached hereto, incorporated herein and marked as Exhibit 9. 72. Prior to Kavanagh's letter dated July 18, 2007 Kavanagh never provided written notice to QBW that it desired to terminate its membership in the QBW program. 73. QBW contacted Kavanagh and reminded them of their obligation to enroll all homes, which they constructed until February 4, 2008. 74. Kavanagh indicated that they were not going to enroll the homes. 75. Kavanagh applied for membership in a competing warranty program prior to its letter to QBW dated July 18, 2007. 76. Kavanagh was approved as a member of a competing warranty program on June 28, 2007. A true and correct copy of Kavanagh's approval letter with the competing warranty program is attached hereto, incorporated herein and marked as Exhibit 10. 77. Kavanagh also enrolled in homes in the competing warranty program prior to attempting to terminate its Agreement with QBW. An example of such an enrollment is evidenced by the Application For Builder's Limited Warranty issuance attached hereto, incorporated herein and marked as Exhibit 11, wherein Kavanagh identified an effective date of warranty with the competing warranty company as June 28, 2007. 78. Kavanagh is estopped from denying the validity of the Exhibit 8; extending the February 4, 1999 Addendum. 79. If Kavanagh did not sign the Addendum marked as Exhibit 8 Kavanagh would owe additional warranty fees to QBW for the period starting February 4, 2002. The original Rate Addendum would have expired and Kavanagh should have been paying at their "qualified rate" as opposed to the "discounted rate" at which they paid. WHEREFORE, Plaintiff, Quality Builders Warranty Corporation, demands judgment against Defendant, John Kavanagh Company in accordance with the relief sought in its Complaint and fiirther requests that Defendant, John Kavanagh Company's Counter Claim be Dismissed. Respectfully submitted, Date: -S - G `0 0 John .Gill, Esquire 325 orth Second Street Wormleysburg, PA 17043 (717) 737-2522 #41532 Attorney for Plaintiff Quality Builders Warranty Corporation ~, ' ~: DUALITY BUILDERS WARRANTY CORP. BUILDER APPLICATION P.O.80X 271 RATE 1.90 ' CAMP HILL, PA 17011 SALESMAN ~Pntnn ® TOLL FREE: 1-800-334-9143 NJ DCA Builder _ FAX#: 717-737-4288 IN PA: 717-737-2522 Registration # . BUILDER Applicant (Entity which will stand behind warranty): .. (If applicable) a. Name John Kavanagh Company phone (919 ) 272-9904 b. Address Post Office Box 9415, GSO, NC Zip 27429-0415 c. Federal Express Service Number 1842 Banking St, 27408 d. Fax Number ( 919} .370-41 37 2. List all principals owning 10% or more of Entity: a. Name B. John Kavanagh Titiepresident Sec. # 041-46-8153 b. Name Ellen C. Kavanagh Title. Secretary Soc. Sec. # 242-88-9032 c. Name Title Soc. Sec. # d. Name ~ fiitle Soc. Sec. # 3. Name of Parent Company (if applicable) N/A 4. How many years has Chief Executive Officer owned andlor contraVied a homebuilding company? 2 0 Does the Applicant or any of its Principals have 10% or more interest in any other home building business? D Yes KlX1Vo If yes, {ist names of Entities: 5. Business Organization (check one): Corporation X "S" Corporation Sole Proprietorship partnership Other 6. How many years has organization (Entity) been involved in home building (not the principals)? ti HOW 7. What warranty program (if any) has the applicant or any of its principals used in the past? 8. Has the applicant or any of its principals ever been expelled from, suspended, or refused registration by any warranty program? Yes X -~o If yes, list Warne of.program Reason for Suspension 9. Has the applicant ever been involved in a dispute settlement process with a ho'rneowner and a third party arbitration? .Yes X No If yes, how many? 10. Has the applicant or any of its home buyers ever experienced a claim which has been submitted to another warranty program for resolution? Yes X No If yes, explain: 11. How many homes did the applicant build in each of the past four (4) years? '90 31 '8914 '88 X 1991 52 Number of homes projected for the next 12 months 110 12. What is the average sale price of homes constructed by applicant? $ I00 . 000 . 13. List municipal government jurisdiction(s) where applicant has built homes within the last twelve (12) months. City Greensboro County Guilford ~ yb~ Stated: City County State 14. Fias the applicant or any of its principals, or firms with which any principal was affiliated, filed for bankruptcy or been adjudicated as bankrupt within the cast seven (7) years? Yes X ~o If yes, list name(s) of firm(s) involved in bankruptcy. , / aa r 4... 15. Have any complaints been fil .gainst the applicant firm with the Better B ;ss Bureau, the Bureau of Consumer Protection, or any other agency? Yes ~_NO If yes, explain circumstances -. ~ ~, 16. What building code is applicant presently governed by? North Carolina State 17. Has applicant been involved in building under - YES Veterans Administration YES Federal Housing Agencies - YRS Farmers Home Administration c~ 18. Have any liens or unsatisfied judgements been placed against the Builder? No If "yes," explain 19. Has applicant's authority to build ever been suspended or revoked? No If "yes," explain 20. Name of current general liability company Cincinnati Insurance C'nmpan~ Does coverage include "completed operations" coverage? g®g Poticy # CPP0632495 Has applicant had any claims under "completed operations" in the last three years? No If "yes," please describe: ' ***PLEASE REMIT A CERTIFICATE OF INSURANCE FROM YOUR AGENT**** The foliowfng information is required upon application to the Quality Builders Warranty Corporation. All references will be contacted. UPpL1ERS (Include lumber, brick/block, appliances, concrete, materials, if applicable) e nowl.umber Co.- Lumber ~ 470100 (9I9)~884-5466 .Name Post Office Box 530 HiT~ePoint, - NC 272t50count # Phone No. Address Zip Years of Relationship a -Carolina Quality Concrete Concrete __ 0003240 (919)272-n119 ~~ South Elm Street Green~oro, NC ress i rn-r'artar ('nrr~ (`a rr~ci- _ F1 nnr ('nvc t°os~ Add ress _telChic's A ice Box 14789 nt #27406 Phone 274151 4789 04128 (919)226rs Account # 2.721 5 5300 ip (919) 28e2ars one No. Relationship 35h one Na. Relationship _ . G /'Yl/V-JYL Zip Years of Relationship 2 SUBCONTRACTORS (Include plumbing, mechanical, electrical, excavation, insulation, if applicable) s a. Comm ercial E lectric Electrical (919>275 -8578 N~ost Office Box 16744 Grpeensboro NC 27406 Phone No. ' ddress Zip Code ~. Rans one & So n Plumbing Plumbi.nq (91 9) FiFiR -29'1 2 Name Type Phone No. /Post Office- Box 18096 Greensboro North Carolina 274 19 /Address Zip Code ~¢* Dogcr ett Cons truction Co . Construction (91 9 )Fi4"~ -41 113 Name Type Phone No. 2124 Scalesv ille Road Summerfield North ('arnlina 27 3 ,R Address Zip Code d. Green wood & C harles Masnnr~r (gl 4) Z2 ?-Ei44~ Name 14S1A Trade M ari: Rlv~3. Tn Type ~inGtnn-~a1am, Nnrth Carnlina 271(1 Phone No. 7 Address Zip Code e OI-RE EN Bldg Produc Tn ~1 a .ion (91 ) 94 -1 f14R . Name Type Phone No. Address ip Code Knolls of Hawthorne - Phase Z Purchaser Daytime Lot/ Street Closing 60 Day Phone # Unit # Address Date Walk Thru -Tom & Michelle -2-~~~. Lot 21 3607 Rugosa Drive 6-29-90 Complete Cleghorn •~e~ & Lauren 275-9821 Lot 46 4611 Scarlet Haw 1-17-92 3-20-92 Spencer (Derek) Mark Russell~~``~ ~ • ` 282-1500 Lot 55 4609 Scarlet Haw 11-15-90 Corn lete P •..{• ., , .C. •• ~.. rte. ~:_ .~: John Gilmore 379-2901 Lot 57 4701 Scarlet Haw 3-30-90 Complete 273-4885 Chuck Duncan 379-9364 Lot 59 4705 Scarlet Haw 5-10-90 Complete -Robert & Beth Lot 68 4905 Scarlet Haw 12-28-90 Complete Rolando Alan Sears 294-9544 Lot 69 4907 Scarlet Haw 12-11-91 2-10-92 -Ray Blackwell 665-6460 Lot 70 5001 Scarlet Haw 11-1-91 2-12-92 .John Lewis 282-2.007 Lot 72 5005 Scarlet Haw 06-28-91 Complete --Greg & G ,5,~ ~ 373-Q232 Lot 73 5007 Scarlet Haw 01-17-91 3-23-92 French ti-'"'" (Gail ) Cleve & Mary _ Sma11 665-1841 Lot 74 5009 Scarlet Haw 01-31-91 Complete ruce & Sh~.~4non ~ 449-8000 Lot 75 5011 Scarlet Haw 03-28-91 Complete Putnam ~ • a- ( Shannon ) Bill Boschini 547-07.74 Lot 76 5013 Scarlet Haw 12-28-90 Complete Cindy Powers 547-7580 Lot 123 5004 Scarlet Haw 01-30-91 Complete David and Karen Clay 668-3812 Lot 124 5002 Scarlet Haw 5-24-91 Complete Kelly Fogleman 1-919- Lot 126 3603 Attar Ct. 11-01-91 2-18-92 >.~. ~.:t~~ 1~-993-4311 ~s~ ~,rv_668-9063 Clark & Shari ' 668-4813 Lot 127 3605 Attar Ct. 7-31-91 Complete c~t Holbrook Knolls of Hawthorne - Phase I Purchaser Daytime Lot/ Street Closing 60 Day Phone # Unit # Address Date Walk Thru Paul & Jean 288-7210 Lot 128 3606 Attar Ct. 7-31-91 Complete Leslie (Leslie) Mike & Maria 375-3111 Lot 129 3604 Attar Ct. 4-12-91 Complete Keating (Maria) Currie & Kathy 665-9209 HC #131 3600 Attar Ct. 6-28-91 9-06-91 Peterson Location of three homes now under instruction. Stage of tion lion 4. Names of two municipal Inspectors utilized. . a Charlie Bryson City of Greensboro (919)373-2155 _t,~ ~~Name r Township/ ounty ( ) 3 Pbone o " Name - Township/County Phone No. '~"'~~ 5. Homebuyer references (ten are requested, if unab~e to supply all, contact the Duality Builders Warranty Corporation. Time in home should be between 6 - 18 months.) a. Name ~ Home Phone Address Work Phone Zip indicate Mr/Mrs) Months in Home b. Name Home Phone Address Work Phone • ~ ~jZJ t, Months in Home _~I" c. Name ~ ~ . Home Phone -Address ~ Work Phone Zip . Months in Home d. Name Home Phone Address Work Phone Zip Montf~s in Home e. Name Home Phone Address Work Phone Zip Months in Home f, Name Home Phone Address Work Phone " Zip Months in Home g. Narne Home Phone Address Work Phone Zip Months in Home h. Name Home Phone Address zip Work Phone Months in Home i:• Name Address Zip Months in Home j. Name Address Zip Months .in Home 6. Financial Affiliations a. Bank (Business Account) Checking Home Phone Work Phone Home Phone Work Phone NationsBank -Private Banking Type of Account Cheeking~fMoney Market 0;,~ (~`jp `:f(~ ( Name Account Number P.O. Box 21848 Greensboro, NC 27420 Gail Howard, V-President 919-370-3445 Address phone # b. Bank (Business Account) Savings Type of Account Name Account Number Address phone # c. Lending Institution (Construction Financing) NationsBank Type of Account Name ~ ~ Account Number Same as above Address pone 7. Financial Statement Remit most current. Preferred--certified audited statement; if unable to supply this, most recent prepared with name of the public accountant or bookkeeper or most recent supplied to any lending institution providing authorization of approval of` lender is present and readable on copy submitted. NOTE: All information will be received as strictly confidential unless specified otherwise. Investigation: The applicant hereby authorizes QBW to conduct such investigation of the applicant's activities, make such inquiries and obtain credit reports as may be necessary for its determination of applicant's financial and technical ability to meet its obligations to purchasers. Applicant hereby directs all credit reporting agencies to make available to QBW any information in the possession of such agencies. This application has been executed by or on behalf of the applicant this 22 day of May 19 92' Jahn Havana Com~an~ COMPANY NAME ~~ By ME OF AUTHORIZED REPRESENTATIVE Please note that in reviewing applicants for the OBW Program, certain costs are incurred, therefore all application fees are non-refundable. ALL INFORMATION REQUESTED ON THIS FORM MUST BE SUPPLIED OR ACCEPTANCE FOR MEMBERSHIP WILLBE~ DENIED, FORWARD ALL INFORMATION WITH A CHECK FOR $200.00 TO QUALITY BUILDERS WARRANTY CORPORATION, P.O. BOX 271, CAMP HILL, PA 17011. / - Quali~~,~ builders 'warranty Cor~3®ration P.O. Box 27 i ® Camp Hill, PA 17011 \ _ .. (717) 737-2522 June 29, 1992 Mr. B. John Kavanagh John. Kavanagh Company P. 0. Box 9415 Greensboro, NC 27429-0415 Dear Mr. Kavanagh: Congratulations! Your application for membership in the Quality Builders Warranty program has now been accepted and approved. Your :Builder Registration Number is 60093. Your rate for home enrollment is $1.90 per thousand of the home's selling price. Enclosed', please find a supply of construction notification forms and instructions, consumer brochures, sample warranties and a hogo .sheet. As a reminder, you have forty-five (45) days within which to enroll homes already in your inventory under the "grandfather clause" provided they have been inspected by a QBW approved municipal inspector. All model homes must be enrolled during this time. Again, congratulations. I look forward to a successful and lasting relationship. Should you have any questions, please do not hesitate to contact me. P.S. We will contact you toward the end of July to go over all of the paperwork with your company. ~'~ ~ ~-~ ~ JMO/glw AGREE"'ANT BETWEEN QUALITY F '~LDERS WARR..:JTY CORPORATION AND bvILDER AGREEMENT made this 22 day of May L 19 92 between. QUALITY BUILDERS WARRANTY CORPORATION, a Pennsylvania corporation, herein referred to as "QBW", and John Kavanagh Company hl~rne of Builder: (iralub wt»lMr a corpora bon, p~ro+.nni p, iMi.id u~l a oCw) Of Aadnu 1842 Banking Street Greensboro, NC 27408 herein referred to as "Builder". Sun Dp SECTION A. MEMBERSHIP AND TERM: 1. QBW administers a program whereby home builders registered with QBW enroll homes they construct in the program and purchasers of those homes are protected by a warranty against certain specified defects. 2. In order to develop and maintain a good reputation for providing protection topurchasers ofwell-built homes, QBW protects and promotes its good-will bycareful selection of builders to participate in itswarrantyprogram. 3. Builder desires to participate inQBWswarrantyprogramand,tothatend,agreestoabidebytheprovisionsof this Agreement and to conform its behavior to the standards expressed herein and in the Limited Warranty Agreement. Builder warrants that all information supplied to OBW in connection with its application is true and correct. 4. QBW, upon executing this Agreement, has accepted Builderas a member of its warranty program, subject to the Builder's continuing performance of its obligation under this Agreement. 5. The term of this Agreement shall be for one (1) year, commencing on the date executed by QBW. Prior to the expiration of this Agreement, and any extensions thereafter, Builder may apply for re-registration and, upon approval by QBW and payment by Builder of re-registration fee then in effect, the Builder shall continue as a participating member for another one (1) year term. SECTION B. HOME ENROLLMENT: 1. Requlrementa. As part of its participation in QBW's warranty program, subject to QBW's acceptance, Builder agrees to enroll in the program every home; Builder, Builder's Principals, oranyentity under Builder, Builder's Principals common control constructs in anystate in which QBW operates and to payall fees required byQBW in the enrollment process, which fees shall be non-refundable. 2. Procedures. Builder agrees to enroll ifs homes according to procedures established by QBW. Builder may enroll homes currently under construction (as ofthe date of this Agreement) provided thatenrollment is made within 45 days of execution of this Agreement and QBW has inspected and approved the home. QBW will provide Builder with a copy of the Limited Warranty Agreement and Enrollment Form. Builderand purchaser must complete, sign the Agreement and Enrollment Form at closing, and Builder agrees to furnish QBW with a copy of the signed Enrollment Form within ten (10) days of closing. Builder agrees not to charge the purchaserdirectlythecost ofthe enrollmentfee. Ahome will not be considered enrolled until QBW receives the fully executed and completed Enrollment Form, payment of all fees, and an approved final inspection. 3. Reservation of Power of Rerlew. QBW reserves the right to reject any home submitted for enrollment in the program if (a) the Builder is nota member in good standing; (b) the home isnotconstructed in accordancewith the Warranty Standards or building codes specified in the Limited Warranty Agreement; (c) the Builderdid not observe the enrollment procedures; (d) misstates or misrepresents any information; (e) in any way fails to comply with the terms of this Agreement. 4. Assignment of Rights. If a purchaser files a Complaint pursuant to the Limited Warranty Agreement, the Builder, upon the request of QBW or its insurer, shall immediately assign to QBW or its insurer, as the casemay be, any rights which Buildermayhave againstasupplier,manufacturer,subcontractororotherperson forwork performed or materials supplied in connection with that claim. Builder agrees to cooperate fully with QBW in the event an assignment occurs and to provide OBW with all information which it requests pertaining to the claim. If Builder fails to so cooperate, Builder agrees to compensate and indemnify OBW for any damages sustained by such lack of cooperation. Furthermore, Builder shall assign and deliver all manufacturer's warranties to the purchaser of the home. 5. Breach and Remedy. If Builder fails to enroll any eligible home as required by this Agreement, QBW mayseek specific enforcement or other appropriate relief in legal or equitable proceedings, even if this Agreement has expired or terminated. Furthermore, Builder agrees to indemnify and hold harmless QBW and its insurer for _ any losses or any damages QBW may suffer as a result of Builder's breach of this Agreement and such losses and costs shall include reasonable attorney's fees and expert witness fees. Builder hereby irrevocably authorizes and empowers any attorney of anycourtof record of Pennsylvani a or _ elsewhere to appear for and confess judgment against Builderfor all amounts for which Builder may become liable to QBW forthe breach of this Agreement, as evidenced byan affidavit signed byanofficerof QBWsetting forth the amounts then due, plus attorney's fees incurred by QBW, with costs of suit and release of errors.Such authority shall not be exhausted by any one exercise thereof but judgment may be confessed as aforesaid from time to time as often as there is a default. Remedies stated herein are elective and notexclusive and QBW may elect to proceed under this or anyother 6. Suapenalon or Tem7lnatlon. ( /may terminate, or at its option suspen '~uilder's participation in QBW's Warranty Program, or any entry or individual which Builder is affiliated, it ...iW determines that Builder has done any of the following, which shall be deemed a breach of this Agreement: (a) fails to comply fully with all provisions of this Agreement; (b) fails to perform any of its ob-igations under this Agreement, including, but not limited to, cooperating in the operation of the program's informal dispute resolution and arbitration procedure; (c) fails to respond to OBW's notice of a homeowner's complaint; (d) fails to comply with a'decision which is rendered pursuant to complaint procedures; (e) faits to provide adequate assurance to OBW within ten (10) days after it receives a written request from OBW forsuch assurance that (within a reasonable ti metable established or approved 6y OBW) it is willing and able to cooperate in dispute settlement and to perform the obligations under any decision which is rendered pursuant to such procedures; (f) fails to otherwise cooperate in the operation of the OBW Program in accordance with the rules and regulations of the OBW Program; - (g) fails to provide timely proof of compliance with this Agreement, as and when requested by OBW; (h) fails to comply with OBW Warranty Standards and building codes as stated in the Limited Warranty Agreement; (i) tails to comply with the enrollment procedures established by OBW; ~ ~. (j) fails to provide proof that enrolled homes have been subjected to required inspections; (k) fails to respond to purchaser complaints in a timely manner and as provided in the Limited Warranty Agreement; (I) fails to perform its obligations with professional competence or conduct its operations from a positionof financial strength and stability; (m) fails to notify OBW within 30 days of a change in ownership, financial condition, or of any other material fact which might affect Builder's ability to meet its obligations under this Agreement; (n) fails to meet ethical standards in its dealings with customers; or (o) misstates or misrepresents any information in connection with its application for initial or re-regis- tration. OBW reserves the option to reinstate terminated affiliates of the primary, terminated Builder if OBW deter- mines that the terminated Builder or its principals are not in a position to control the affiliated Builder. Termination of Builder by OBW shall not affect the rights or obligations of any of the parties to this Agree- ment with cespect to the Warranty Program ineffectatthedateoftermination,subjecttotheprovisions pertain- ing to vofdability. If a Builder is suspended or terminated, he shall not represent himself to be a memberof the OBW Warranty ProgramnoroffertheOBWWarrantyandshallnotuseitsLogoorrefertotheprograminanywaynorattempt to enroll any home. The Builder shall immediately notify any Buyer currently under contract to purchase a home of the suspension or termination and that the OBW Warranty Program has been withdrawn. Upon request, Builder shall immediately return to OBW all materials supplied by OBW and all material making reference to OBW. Should Builder fail to take these steps, it shall indemnify and hold harmless OBW and the insurer against anyand all expenses incurred and losses suffered, including but not limited to attorney fees,by either of them as a result. - Builder may terminate this agreement upon 30 days advance written notice to OBW. If so terminated by Builder or by OBW, Builder's obligations under this Agreement shall continue as to those homes enrolled during the period in which this Agreement was in effect. T. Notice. If OBW possesses a reasonable belief that reason exists to terminate or suspend a Builder forvio- lation of this Agreement, OBW may immediately terminate or suspend the Buitder by providing it with written notice. If OBW elects to suspend the Builder, such suspension will remain in effect until Buitder has cured all detects to OBW's satisfaction, however, OBW reserves the right to terminate any suspended Builder. 8. Voldablltty. OBW reserves the right to void any enrollment if Builder misstates or misrepresents any infor- mation in its application for registration or re-registration or misstates or misrepresents any information inthe enrollment of a particular home or fails to pay any fees due for enrollment of any particular home or fails to forward an enrollment form for a particular home within 10 days as required. SECTION C. BUILDER'S OBLIGATIONS: 1. Construction Obligations. Following are the Builder's obligations with respect to OBW's Warranty Prograrn: (a) Builder shall construct all homes in conformity with the Warranty Standards provided in the Limited Warranty Agreement, and/or in conformity with approved building codes and other standards estab- lished by OBW and in effect at the beginning of construction of the enrolled home. OBW reservesthe rights to establish special requirements for escrow payments or other means of protection with respect to any homes constructed by Builder which OBW determines to be "High Risks". (b) Builder agrees to have all homes inspected, as required by OBW, and to pay all fees for the inspection and to provide evidence of inspection as and when required by OBW. OBW shall provide inspectors or shall approve governmental inspectors. (c) OBW shall have the right to perform spot inspections to verify Builder'scompliance with this Agreement and Builder agrees to cooperate. (d) The Builder agrees to indemnify and hold harmless OBW and/or its Insurer for any losses or damages LBW and/or its Insurer may suffer as a result of the use of fire-retardant treated plywood on any building enrolled under the QBW Ten ' ~~~ Warranty Program. This will include aft e' `~s and liability for losses, damages and expenses which QBb. .d/or its Insurer may sustain, incur, pay or ~_ .able for by means of any investigation, settlement or litigation of any claim or action which may t>e raised, made or brought due to the potential defects caused or likely to be caused by use of the subject plywood. 2, Warranty Obllgatlons. Builder agrees to perform all obligations arising from this Agreement and the Limited Warranty Agreement. If Builder fails or refuses to perform its obligations in accordance with the Limited Warranty Agreement, QBW will perform those obligations; however, Builder agrees to reimburse QBW and/or its insurer for all expenses •incurred in performing those obligations, including, but not limited to costs of materials, cost of collection, labor, architect's fees, engineering fees, and attorney's fees. QBW reserves all rights of subrogation. C~BW agrees to perform its obligations pursuant to the Limited Warranty Agreement in years three through ten, provided that the defect that is the subject of the Purchaser's claim did not occurwithin the first twoyears and was not concealed or cosmetically or improperly repaired by the Builder during those two years. Builder is not responsible for any damage caused by a major structural defect, as defined in the Limited Warranty Agreement, occurring after the expiration of the first two years of the Limited Warranty Agreement provided the defect was not concealed or cosmetically or improperly repaired during those two years. QBW will hold the Builder harmless for the reasonable cost of repairing or replacing such defects, and against the payment of any money judgment, order or decrees made against Builder for the repair of the defect. 3. Builder is authorized to advertise its membership in the QBW Warranty Program and to use its Logo in its business, provided that any reference to QBW or its insurer, whether contractual or advertising copy, be approved by QBW in writing in advance of its use. SECTION D. INFORMAL DISPUTE PROCEDURE: 1. Builder should be aware that the Limited Warranty Agreement provides for an informs{ dispute settle- mentand arbitration procedure to resolve complaints by purchasers under the Limited Warranty Agreement. Builder should become familiar with the settlement procedures in orderto be aware of its rights and respon- sibilities. Builder agrees to cooperate fully in the procedure and to be bound by and to comply with any decision of an independerit third party, or arbitrator. 2. The Builder agrees to pay all fees charged in connection with the informal dispute settlement and arbitration procedures. SECTION E. TERMS GOYERN[NG OPERATION AND INTERPRETATION: 1. Builder agrees to perform its obligations under this Agreement in a timely manner. However, time provided for performance of obligations hereunder shall be extended by events not subject to control by the person obligated to perform. Such events include acts of God or the public enemy, or, riot, civil commo- tion or governmental conduct. 2. Descriptive headings as io the contents of particular provisions of this Agreement are intended for con- venience only and are not to be considered in construing this instrument. 3. This Agreement shall not constitute or be considered an agency, employer-employee relationship, joint venture or partnership between the parties. None of the parties, nor any of their employees or agents, shall have the authority to bind or obligate the other party except as provided by this Agreement. 4. Should any provisions of this Agreement be determined by a court of competent jurisdiction to be un- enforceable, that determination wilt not affect the validity of the remaining provisions. 5. This Agreement shall be interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania. All suits instituted under this Agreement shall be brought in Pennsylvania in a court of competent jurisdiction, Builder hereby consents to the personal jurisdiction of the Pennsylvania courts. For Builders who are licensed in the state of New Jersey, note that this agreement shall be interpreted and enforced in accordance with the laws of New Jersey; for all homes enrolled with an address in NewJersey. 6. Builder shall not assign this Agreement without the prior written consent of QBW. 7. This Agreement shalt inure to the benefit of and be binding upon the heirs, executors, administrators,' assignee, and successors of the representative parties. 8. This instrument, and security documents and documents referred to or incorporated herein by refer- ence, contains the entire agreement between the parties, and no statement, promises, or inducements made by either party oragent of either party that is not contained in this written contract shall be vatidor bind- ing; and this contract may not be enlarged, modified, or altered except in writing signed by the parties and endorsed hereon. . 9. Failure of either party to insist upon compliance with any provision of this Agreement shall not consti- ' tute a waiver of that provision. 10. All notices required hereunder must be in writing and sent by certified mail, postage prepaid, return receipt requested, to the receipient at the respective addresses shown below, or to whatever address the party may designate in writing. 1 t. The effective date of this Agreement shall be the date of execution by OBW. _ QUALITY BUIJ~Ef~~~N~~~Aj~1~(~ORPORATION gy `~ - -" Jossph M. Ols of ki, President Qate of execution by G16W: ,3une 29 , 992 Builder's Registration No.: 60093 • BUILDER: John Kavanagh Company (Name of Builder -please print or type) DATE a •-L1 ,~{hyyL By ~ ' - / ~--- `~- 'vii (Signature of uthorized Represen ative - T fle) B. John Kavanagh, President •• (Please print name/title of executor) 1842 Banking Street Greensboro, NC 27408. _ (Address) - CoPyri9ht 1988 Quality Builders Warranty-Corporation QBW FORM 05010/90 (~~~}) AGREE. .NT BETWEEN QUALITY BL DERS ~~~Y~~~ WARRANTY CORPORATION AND BUILDER ~_~- AGREEMENT made this 5th day of ~Y rtg 94 between QUALITY BUILDERS WARRANTY CORPORATION, a Pennsylvania corporation, herein referred to as "QBW," and John Kavanagh Company Name of Builder: (indicate whether a corporation, partnership, individual or other) of Address P O Box 9415 Greensnboro NC 27429-0415 herein referred to as "Builder." State Zip SECTION A. MEMBERSHIP AND TERM: 7. QBW administers a program whereby home builders registered with QBW enroll homes they construct in the program and purchasers of those homes are protected by a warranty against certain specified defects. 2. In orderto develop and maintain agood reputation for providing protection to purchasers ofwell-built homes, QBW protects and promotes its good-will by careful selection of builders to participate in its warranty program. 3. Builder desires to participate in QBW's warranty program and, to that end, agrees to abide by the provisions of this Agreement and to conform its behavior to the standards expressed herein and in the Limited Warranty Agreement. Builder warrants that all information supplied to QBW in connection with its application is true and correct. 4. Builder has paid its initial membership fee. Ali registration fees (initial and annual) are set by QBW at its discretion and are non-refundable. 5. QBW, upon executing this Agreement, has accepted Builder as a member of its warranty program, subject to the Builder's continuing performance of its obligation under this Agreement. 6. The term of this Agreement shall be for one (7) year, commencing on the date..executed by QBW..Prior to the expiration of this Agreement, and any extensions thereafter, Builder may apply for re-registration and, upon approval by QBW and payment by Builder of re-registration fee then in effect, the Builder shall continue as a participating memberfor anotherone (1) yearterm. If Builder does not re-register, the provisions of Section B, item 6 hereof concerning termination shall be in effect. SECTION B. HOME ENROLLMENT: 1. Requirements. As part of its participation in QBW's warranty program, subject to QBW's acceptance, Builder agrees to enroll in the. program every home, Builder, Builder's Principals, or any entity under Builder, Builder's Principals common control constructs in any state in which QBW operates and to pay all fees required by QBW in the enrollment process, which fees shall be non-refundable. 2. Procedures. Builder agrees.to enroll its homes according to procedures established by QBW. Builder may enroll homes currently under construction and homes completed but not sold or occupied (as of the date of this Agreement or the date of reacceptance following a period of suspension or non-participation) provided that enrollment is made within 45 days of execution of this Agreement or reacceptance, and QBW has inspected and approved the home. When enrolling other than a detached single family dwelling, Builder shall enroll each individual unit of any multi-unit dwelling such as but not limited to duplexes, townhouses and condominiums. For each home enrolled, the Builder shall pay a warranty fee as determined by QBW within the time periods established by QBW. All warranty fees are nonrefundable. A minimum warranty fee of $100.00 shall apply. QBW will provide Builder with a copy of the Limited Warranty Agreement and Enrollment form. Builder and purchaser must complete, sign the Agreement and Enrollment Form at closing, and Builder agrees to furnishQBW with a copy of the signed Enrollment form within ten (10) days of closing. Builderagrees not to charge the purchaser directlythe cost of the enrollmentfee. A home will not be considered enrolled until QBW receivesthe fully executed and completed Enrollment Form, payment of all fees, and an approved final inspection. 3. Reservation of Power of Review. QBW reserves the right to reject any home submitted for enrollment in the program if (a}the Builder is not a member in good standing; (b) the home is not constructed in accordance with the Warranty Standards orbuildingcodes specified in the Limited Warranty Agreement; (c) the Builder did not observe the enrollment procedures; (d) misstates or misrepresents any information; (e) in any way fails to comply with the terms of this Agreement. 4. Assignment of Rights. If a purchaser files a Complaint pursuant to the Limited Warranty Agreement, the Builder, upon the request of QBW or~ its insurer, shall immediately assign to QBW or its insurer, as the case may be, any rig hts which Bu ilder may have against a supplier, manufacturer, subcontractor or other person for work performed or materials supplied in connection with that claim. Builder agrees to cooperate fully with QBW in the event an assignment occurs and to provide QBW with all information which it requests pertaining to the claim. If Builder fails to so cooperate, Builder agrees to compensate and indemnify QBW for any damages sustained by such lack of cooperation. Furthermore, Builder shall assign and deliver all manufacturers warranties to the purchaser of the home. 5. Breach and Remedy. If Builder fails to enroll any eligible home as required by this Agreement, QBW mayseek specific enforcement or other appropriate relief in legal or equitable proceedings, even if this Agreement has expired or terminated. Furthermore, Builder agrees to indemnify and hold harmless QBW and its insurer for any tosses or any damages QBW may suffer as a result of Builder's breach of this Agreement and such losses andcosts shall include reasonable attorney's fees and expert witness fees. ~~ `, ` ~' ~. (b) Builder agrees to have all I zs inspected, as required by QBW, and to gall fees for the inspection and to provide evidence of inspection as and when required by QBW. QBW shah r.~ovide inspectors or shall approve governmental inspectors. (c) QBW shall have the right to perform spot inspections to verify Builder's compliance with this Agreement and Builder agrees to cooperate. (d) The Builder agrees to indemnify and hold harmless QBW and/or its Insurerfor any losses or damages QBW and/or its Insurer may suffer as a result of the use of fire-retardant treated plywood on any building enrolled under the QBW Ten Year Warranty Program. This will include all claims and liability for losses, damages and expenses which QBW and/or its Insurer may sustain, incur, pay or be liable for by means of any investigation, settlement or litigation of any claim or action which may be raised, made or brought due to the potential defects caused or likely to be caused by use of the subject plywood. (e) If the Builder is informed by QBW that it is building in an area designated as onewith active soil conditions, the Builder agrees to obtain such soils investigations and reports as may be required by QBW. If such reports indicate a need for special foundation design the Builder agrees to construct the foundation according to the design of a registered professional engineer to take into account the conditions disclosed by the soil tests. 2. Warranty Obligations. Builder agrees to perform all obligations arising from this Agreement and the Limited Warranty Agreement. The Builder shall at its own expense perform all obligations asset forth in the QBW Warranty Program and this Agreement which includes meeting the warranty standards upon notice from the Purchaser without the necessityof QBW intervention. If Builderfails or refusesto perform its obligations in accordancewith the Limited WarrantyAgreement, QBW will perform those obligations; however, Builder agrees to reimburse QBW and/or its insurerfor all expenses incurredin performing those obligations, including, but not limited to costs of materials, cost of collection, labor, architect's fees, engineering fees, and attorney's fees. OBW reserves all rights of subrogation. If the Builder repairs a majorstructural defectduring year 1 or2, QBW must be notified. Once notified, QBW will perform a compliance inspection. QBW agrees to perform its obligations pursuant to the Limited Warranty Agreement in years three through ten, provided that the defect that is the subject of the Purchaser's claim did not occur within the first two years and was not concealed or cosmetically or improperly repaired by the Builder during those two years. Builder is not responsible for anydamage caused by a majorstructural defect, as defined in the Limited Warranty Agreement, occurring after the expiration of the first two years of the Limited Warranty Agreement provided the defect was not concealed or cosmetically or improperly repaired during those two years. QBW will hold the~Builder harmless for the reasonable cost of repairing or replacing such defects, and against the payment of any money judgment, order or decrees made against Builder for the repair of the defect. 3. Builder is authorized to advertise its membership in the QBW Warranty Program and to use its Logo in its business, provided that any reference to QBW or its insurer, whether contractual or advertising copy, be approved by QBWi n writing in advance of its use. _ ~ _ ~ - .. _ _ SECTION D. INFORMAL DISPUTE PROCEDURE: 1. Builder should be aware that the Limited Warranty Agreement provides for an informal dispute settlement and arbitration procedure to resolve complaints by purchasers under the Limited Warranty Agreement. Builder should become familiarwith thesettlement procedures in order to be aware of its rights and responsibilities. Builder agrees to cooperate fully in the procedure and to be bound by and to comply with any decision of an independent third party, or arbitrator. If the Builderfailsto perform its obligations hereunder in atimely and good and workmanlike manner, such failure shall be considered to be a refusal to perform governed by paragraph C.2 hereof. 2. The Builder agrees to pay all fees charged in connection with the informal dispute settlement and arbitration procedures. SECTION E. TERMS GOVERNING OPERATION AND INTERPRETATION: 1. Builder agrees to~ perform its obligations under this Agreement in a timely manner. However, time provided for performance of obligations hereundershall be extended by events not subject to control bythe person obligatedto perform. Such events include acts of God or the public enemy, or, riot, civil commotion or governmental conduct. 2. Descriptive headings as to the contents of particular provisions of this Agreement are intended for convenience only and are not to be considered in construing this instrument. 3. This Agreementshall notconstituteorbeconsidered an agency, employer-employee relationship, jointventureor partnership between the parties. None of the parties, nor any of thei r employees or agents, shall have the authority to bind or obligate the other party except as provided by this Agreement. 4. Should any provisions of this Agreement be determined by a court of competent jurisdiction to be unenforceable, that determination will not affect the validity of the remaining provisions. 5. This Agreement shall be interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania. All suits instituted under this Agreement shall be brought in Pennsylvania in a court of competent jurisdiction. Builder hereby consents to the personal jurisdiction of the Pennsylvania courts. For Builders who are licensed in the state of New Jersey, note that this agreement shall be interpreted and enforced in accordance with the laws of New Jersey; for all homes enrolled with an address in New Jersey. 6. Builder shall not assign this Agreement without the prior written consent of QBW. Builder hereby irrevocably a' ~rizes and empowers any .attorney or am urt of record of Pennsylvania or elsewhereto appearfor and cony _..a judgment against Builder for all amounts .,., which Bu ilder may become liable to QBW forthe breach of this Agreement, as evidenced by an affidavit signed by an officer of QBW setting forth the amounts then due, plus attorney's fees incurred by QBW, with costs of suit and release of errors. Such authority shall not be exhausted by any one exercise thereof but judgment may be confessed as aforesaid from time to time as often as there is a default. Remedies stated herein are elective and not exclusive and QBW may elect to proceed under this or any other paragraph in this Agreement. 6. Suspension or Termination. QBW may terminate, or at its option suspend, Builder's participation in QBW's Warranty Program, or any entity or individual which Builder is affiliated, if QBW determines that Builder has done any of the following; which shall be deemed a breach of this Agreement. (a) fails to comply fully with all provisions of this Agreement; (b) fails to perform any of its obligations under this Agreement, including, but not limited to, cooperating in the operation of the program's informal dispute resolution and arbitration procedure; (c) fails to respond to QBW's notice of a homeowner's complaint; (d) fails to comply with a decision which is rendered pursuant to complaint procedures; (e) fails to provide adequate assurance to QBW within ten (10) days after it receives a written request from QBW forsuch assurance that (within a reasonable tinietabie established or approved by QBW) it is willing and able to cooperate in dispute settlement and to perform the obligations under any decision which is rendered pursuant to such procedures; (f) fails to otherwise cooperate in the operation of the QBW Program in accordance with the rules and regulations of the QBW Program; (g) fails to provide timely proof of compliance with this Agreement, as and when requested by QBW; (h) fails to comply with QBW Warranty Standards and building codes as stated in the Limited Warranty Agreement; (i) fails to comply with the enrollment procedures established by QBW; (j} fails to provide proof that enrolled homes have been subjected to required inspections; (k) fails to respond to purchaser complaints in a timely manner and as provided in the Limited Warranty Agreement; (I) fails to perform its obligations with professional competence or conduct its operations from a position of financial strength and stability; (m) fails to notify QBW within 30 days of a change in ownership, company name or companystanding,financial condition, or of any other material fact which might affect Builder's ability to meet its obligations under this Agreement; (n} fails to meet ethical standards in its dealings with customers; or (o) misstates or misrepresents any information in connection with its application for initial or re-registration. QBW reserves the option to reinstate terminated affiliates of the primary, terminated Builder if QBW determines that the terminated Builder or its principals are not in a position to control the affiliated Builder. Termination of Builder by QBW shall not affect the rights or obligations of any of the parties to this Agreement with respect to the Warranty Program in effect at the date of termination, subject to the provisions pertaining to voidability. If a Builder is suspended or terminated, he shalt not represent himself to be a member of the QBW Warranty Program nor offer the QBW Warranty and shall not use its Logo or refer to the program in any way nor attemptto enroll any home. The Builder shall immediately notify any Buyer currently under contract to purchase a home ofthe suspension or termination and that the QBW Warranty Program has been withdrawn. Upon request, Buildershall immediately return to QBW all materials supplied by QBW and ail material making reference to~QBW. Should Builder fail to take these steps, it shall indemnify and hold harmless QBW and the insurer against any and all expenses incurred and losses suffered, including but not limited to attorney fees, by either of them as a result. In addition, Buildershall pay interest to QBW atthe rate of 18%per annum on all sums due to QBW hereunderifsuch sums are not paid within 30 days of demand by QBW. Builder may terminate this Agreement upon 30 days advance written notice to QBW. If so terminated by Builder or by QBW, Builder's obligations under this Agreement shall continue as to those homes enrolled during the period in which this Agreement was in effect. 7. Notice. If QBW possesses a reasonable belief that reason exists to terminate or suspend a Builder for violation of this Agreement, QBW may immediatelyterminate or suspend the Builder by providing it with written notice. If QBW elects to suspend the Builder, such suspension will remain in effect until Builder has cured all defects to QBW s satisfaction, however, QBW reserves the right to terminate any suspended Builder. 8. Voidability. QBW reserves the right to void any enrollment if Builder misstates or misrepresents any information in its appl ication for registration or re-registration or misstates or m isrepresents any information in the enrollmentof a particular home or fails to pay any fees due for enrollmentof any particular home or fails to forward an enrollment form for a particular home within 10 days as required. SECTION C. BUILDER'S OBLIGATIONS: 1. Construction Obligations. Following are the Builder's obligations with respect to QBW's Warranty Program: (a) Builder shall construct all homes in conformity with the Warranty Standards provided in the Limited Warranty Agreement, and/or in conformity with approved building codes and otherstandards established by QBWand in effect at the beginning of construction of the enrolled home. QBW reserves the rights to establish special requirements for escrow payments or other means of protection with respect to any homes constructed by Builder which QBW determines to be "High Risks." 7. -This Agreement shall inure to tr. nefit of and be binding upon the heirs, ext Jrs, administrators, assignee, and successors of the representative parties. 8. This instrument, and security documents and documents referred to or incorporated herein by reference, contains the entire agreement between the parties, and rio statement, promises, or inducements made by either party or agent of either party that is not contained in this written contract shall be valid or binding; and this contract may not be enlarged, modified, or altered except in writing signed by the parties and endorsed hereon. 9. Failure of either party to insist upon compliance with any provision ofthisAgreementshallnot constitute awaiverof that provision. 10. All notices required hereunder must be in writing and sent~by certified mail, postage prepaid, return receipt requested, to.the recipient at the respective addressshown below, or towhatever address the party may designatein writing. 11. The effective date of this Agreement shall be the date of execution by QBW. By Date of execution by OBW: JLme 2, 1994 Builder's Registration No.: 60093 BUILDER: John Kavanagh Comuany (Name of Builder -please print or type) DATE t`taY 5, 1994 By (Signature of Authorized Representative -Title) t (Please print'-~am~/title of executor) P O Box 9415, Greensboro, NC 27429-04_1.5 (Address) Copyright 1988 duality Builders Warranty Corporation AGRl~ ';IIiiENT BETWEEN QUALITY ' '1LDERS WARRANTY CORPORATION AND BUILDER AGREEMENT made this 21 day of June ,1993 . between QUALITY BUILDERS WARRANTY CORPORATION, a Pennsylvania corporation, herein referred to as "QBw," and John Kavanagh Company Name or Builder: (indicate whether a corporation, partnership, individual or other) of Address P fl Rnx 441 ~ fraPnShnrnYNC 27422=041 herein referred to as "Builder." State Zip SECTION A. MEMBERSHIP AND TERM: 1. QBW administers a program whereby home builders registered with QBW enroll homes they construct in the program and purchasers of those homes are protected by a warranty against certain specified defects. 2. In orderto develop and maintain a good reputation for providing protection to purchasersof well-built homes,Q BW protects and promotes its good-will by careful selection of builders to participate in its warranty program. 3. Builderdesires to participate in QBW's warranty program and, to thatend, agrees to abide bythe provisionsof this Agreement and to conform its behaviorto the standards expressed herein and in the Limited Warranty Agreern ent. Builder warrants that all information supplied to QBW in connection with its application is true and correct 4: Builder has paid its initial membership fee. All registration fees (initial and annual) are set by QBW at its discretion and are non-refundable. 5. QBW, upon executing this Agreement, has accepted Builder as a member of its warranty program, subjectto the Builder's continuing performance of its obligation under this Agreement. 6. The term of this Agreement shall be for one (1) year, commencing on the date executed by QBW. Priorto the expiration of this Agreement, and any extensions thereafter, Builder may apply for re-registration and,upon approval by QBW and payment by Builder of re-registration fee then in effect, the Builder shall continue as a participating memberforanotherone (1 } yearterm. If Builder does not re-register, the provisions of Section B, item 6 hereof concerning termination shall be in effect. SECTION B. HOME ENROLLMENT: 1. Requirements. As part of its participation in QBW's warranty program, subject to QBW's acceptance, Builder agrees to enroll in the program every home, Builder, Builder's Principals, or any entity under Builder, Builder's Principals common control constructs in~any state in which QBW operates and to pay all fees required by QBW in the enrollment process, which fees shall be non-refundable. 2. Procedures. Builder agrees to enroll its homes according to procedures established by QBW. Builder mayenroll homes currently under construction and homes completed but not sold or occupied (as of the date of this Agreement or the date of reacceptance following a period of suspension or non-participation) provided that enrollment is made within 45 days of execution of this Agreement or reacceptance, and QBW has inspected and approved the home. When enrolling other than a detached single family dwelling, Builder shall enroll each individual unit of any multi-unit swelling such as but not limited to duplexes, townhouses and condominiums. For each home enrolled, the Builder shall pay a warranty fee as determined by QBW within the time periods established by QBW. All warranty fees are nonrefundable. A minimum warranty fee of $100.00 shall apply. QBW will provide Builder with a copy of the Limited Warranty Agreement and Enrollment form. Builder and purchaser must complete, sign the Agreement and Enrollment Form at closi ng, and Builder agrees to furnishQ BW with a copy ofthe signed Enrollmentform within ten (10}days of closing. Builder agrees notto charge the purchaser directly the cost of the enrol I ment fee. A home will not be considered enrolled until QBW receives the fully execufed and completed Enrollment Form, payment of alt fees, and an approved final inspection. 3. Reservation of~ Power of Review. QBW reserves the right to reject any home submitted for enrollment in the program if (a) the Builder is not a member in good standing; (b) the home is not constructed in accordance with the Warranty Standards or building codes specified in the Limited Warranty Agreement; (c) the Builderdid not observe the enrollment procedures; (d) misstates or misrepresents any information; (e) in any way fails to comply wilh the terms of this Agreement. 4. Assignment of Rights. if a purchaserfiles a Complaint pursuantto the Limited Warranty Agreement, the Builder, upon the request of QBW or its insurer, shall immediately assign to QBW or its insurer, as the case may be, any rights which Builder may have against a supplier, manufacturer, subcontractor or other person for work performed or materials supplied in connection with that claim. Builder agrees to cooperate fully with QBW in the event an assignment occursand to provide QBW With all information which it requests pertaining to the claim. If Builder fails to so cooperate, Builder agrees to compensate and indemnify QBW for any damages sustained by such lack of cooperation. Furthermore, Builder shall assign and deliver all manufacturer's warranties to the purchaser of the home. 5. Breach and Remedy. If Builder fails to enroll any eligible home as required by this Agreement, QBW may seek specific enforcement or other appropriate relief in legal or equitable proceedings, even if this Agreement has expired or terminated. Furthermore, Builder agrees to indemnify and hold harmless QBW and its insurer for any losses or any damages QBW may suffer as a result of Builder's breach of this Agreement and such losses andcosts shall include reasonable attorney's fees and expert witness fees. Builder hereby irrevocably aut` ~zes and empowers any attorney or any. •trt of record of Pennsylvania or elsewhereto appearfor and confE ,udgment against Builderfor all amounts i ;hich Buildermay become liable to QBW forthe breach of this Agreement, as evidenced by an affidavit signed by an officer of QBW setting forth the amounts then due, plus attorney's fees incurred by QBW, with costs of suit and release of errors. Such authority shall not be exhausted by any one exercise thereof butjudgment may be confessed as aforesaid from time to timeas often as there is a default. Remedies stated herein are elective and not exclusive and QBW may elect to proceed under this or any other paragraph in this Agreement. 6. Suspension or Termination. QBW may terminate, or at its option suspend, Builder's participation in QBW's Warranty Program, or any entity or individual which Builder is affiliated, if QBW determines that Builder has done any of the following, which shall be deemed a breach of this Agreement. (a) fails to comply fully with all provisions of this Agreement; (b) fails to perform any of its obligations under this Agreement, including, but not limited to, cooperating in the operation of the program's informal dispute resolution and arbitration procedure; (c) fails to respond to QBW's notice of a homeowner's complaint; (d) fails to comply with a decision which is rendered pursuant to complaint procedures; (e) fails to provide adequate assurance to QBW within ten (10) days after it receives a written request from QBW for such assurance that (within a reasonable timetable established or approved by QBW) it is willing and able to cooperate in dispute settlement and to perform the obligations under any decision which is rendered pursuant to such procedures; (f) fails to otherwise cooperate in the operation of the QBW Program in accordance with the rules and regulations of the QBW Program; (g) fails to provide timely proof of compliance with this Agreement, as and when requested by QBW; (h} fails to comply with QBW Warranty Standards and building codes as stated in the Limited Warranty Agreement; (i) fails to comply with the enrollment procedures established by QBW; (j) fails to provide proof that enrolled homes have been subjected to required inspections; . (k} fails to respond to purchaser complaints in a timely manner and as provided in the Limited Warranty Agreement; (1) fails to perform its obligations with professional competence or conduct its operations from a position of financial strength and stability; (m) fails to notify QBW within 30 days of a change in ownership, company name or company standing, financial condition, or of any other material fact which might affect Builder's ability to meet its obligations underthis Agreement; (n) fails to meet ethical standards in its dealings with customers; or (o) misstates or misrepresents any information in connection with its application for initial or re-registration. QBW reserves the option to reinstate terminated affiliates of the primary, terminated Builder if QBW determines that the terminated Builder or its principals are not in a position to control the affiliated Buiider. Termination of Builder by QBW shall not affect the rights or obligations of any of the parties to this Agreement with respect to the Warranty Program in effect at the date of termination, subject to the provisions pertaining to voidability. If a Builder is suspended or terminated, he shalt not represent himself to be a member of the QBW Warranty Program nor offer the QBW Warranty and shall not use its Logo or refer to the program in any way nor attempt to enroll any home. The Buildershall immediately notify any Buyercurrently undercontract to purchase a homeof the suspension or termination and that the QBW Warranty Program has beeri withdrawn. Upon request, Buildershall immediately return to QBW all materials supplied by QBW and all material making reference to QBW. Should Builder fail ~to take these steps, it shall indemnify and hold harmless QBW and the insurer against any and all expenses incurred and losses suffered, including but not limited to attorney fees, by either of them as a result. In addition, Buildershall pay interest to QBW at the rate of 18% per annum on all sums due to QBW hereunder ifsuch sums are not paid within 30 days of demand by QBW. Builder may terminate this Agreement upon 30 days advance written notice to QBW. If so terminated by Builder or by QBW, Builder's obligations underthis Agreementshall continue as to those homes enrolled during the period in which this Agreement was in effect. 7. Notice. If QBW possesses.a reasonable belief that reason exists to terminate or suspend a Builder for violation of .this Agreement, QBW may immediately terminateor suspend the Buiider by providing it with written notice. IiQBW elects to suspend the Builder, such suspension will remain in effect uriti! Builder has cured all defects to QBW's satisfaction, however, QBW reserves the right to terminate any suspended Builder. ~ . 8..Voidability. QBWreservestherighttovoidanyenrollmentifBuildermisstatesormisrepresentsanyinformationin its application for registration or re-registration ormisstates or misrepresents any information in the enrollment of a particular home or fails to pay any fees due forenrollmentof any particular home or fails to forward an enrollment form for a particular home within 10 days as required. SECTION C. BUILQER'S OBLIGATIONS: 1. Construction Obligations. Following are the Builder's obligations with respect to QBW's Warranty Program: (aj Buildershall construct all homes in conformitywith the Warranty Standards provided in the Limited Warranty Agreement, and/or in conformity with approved building codes and otherstandards established by QBW and in effect at the beginning of construction of the enrolled home. QBW reserves the rights to establish special requirements for escrow payments or other means of protection with respect to any homes constructed by Builder which QBW determines to be "High Risks." (b) Builder agrees to hau' 'I homes inspected, as required by QBW, ~ ' to pay all fees for the inspection and to provide evidence of ii action as and when required by QBW. QB, gal{ provide inspectors orshall approve governmental inspectors. (c) QBW shall have the right to perform spot inspections to verify Builder's compliance with this Agreement and Builder agrees to cooperate. (d) The Builder agrees to indemnify and hold harmless QBW andlor its Insurer for any losses or damagesQBW and/or its Insurer may suffer as a result of the use of fire-retardant treated plywood on any building enrolled under the QBW Ten Year Warranty Program. This will include all claims and liability for losses, damages and expenses which QBW andlor its Ensurer may sustain, incur, pay or be liable for by means of any investigati on, settlement or litigation of any claim or action which may be raised, made or brought due to the potential defects caused or likely to be caused by use of the subject plywood. (e) If the Builderis informed by QBW that it is building in an area designated as onewith active soil conditions, the Builder agrees to obtain such soils investigations and reports as may be required by QBW. If such reports indicate a need forspecial foundation design the Builder agreesto constructthe foundation accordingto the design of a registered professional engineer to take into account the conditions disclosed by the soil tests. 2. Warranty Obligations. Builder agrees to perform all obligations arising from this Agreement and the Limited Warranty Agreement. The Builder shall at its own expense perform all obligations as set forth in the QBW Warranty Program and this Agreement which includes meeting the warranty standards upon notice from the Purchaser without the necessity of QBW intervention. If Builderfails orrefuses to perform its obligations in accordancewith the Limited Warranty Agreement, QBW will perform those obligations; however, Builder agreesto rei mburse QBW and/or its insurerfor all expenses incurred in performing those obligations, including, but not limited to costs of materials, cost of collection, labor, architect's fees, engineering fees, and attorney's fees. QBW reserves all rights of subrogation. If the Builder repairs a majorstructural defect during year 7 or 2, QBW must be notified. Once notified, QBW will perform a compliance inspection. QBW agrees to perform its obligations pursuant to the Limited Warranty Agreement in years three through ten, provided that the defect that is the subject of the Purchaser's claim did not occur within the first two years and was not concealed or cosmetically or improperly repaired by the Builder during those two years. Buitder is not responsiblefor any damage caused by a majorstructural defect, as defined in the Limited Warranty Agreement, occurring after the expiration of the first two years of the Limited Warranty Agreement provided the defectwas notconcealed or cosmetically or improperly repaired during those twoyears. QBW will hold the Buitder harmless for the reasonable cost of repairing or replacing such defects, and against the payment of any money judgment, order or decrees made against Builder for the repair of the defect. 3. Builder is authorized to advertise its membership in the QBW Warranty Program and to use its Logo in its business, provided that any reference to QBW or its insurer, whether contractual or advertising copy, be approved by QBW in writing in advance of its use. SECTION D. INFORMAL DISPUTE PROCEDURE: 1. Builder should be aware that the Limited Warranty Agreement provides for an informal dispute settlement and arbitration procedure to resolve complaints by purchasers under the Limited Warranty Agreement. Buildershould becomefamiliarwith thesettlementprocedures in orderto be awareof its rights and responsibilities. Builderagrees to cooperate fully in the procedure and to be bound by and to comply with any decision of an independentthird party, or arbitrator. if the Builderfails to perform its obligations hereunder in atimely and. good and workmanlike manner, such failure shall be considered to be a refusal to perform governed by paragraph C.2 hereof. 2. The Builder agrees to pay all fees charged in connection with the informal dispute settlement and arbitration procedures. SECTION E. TERMS GOVERNING OPERATION AND INTERPRETATION: 1. Builder agrees to perform its obligations under this Agreement in a timely manner. However, time provided for performance of obligations hereundershall be extended by events notsubject to control by the person obligated to perform. Such events include acts of God or the public enemy, or, riot, civil commotion or governmental conduct. 2. Descriptive headings as to the contents of particular provisions of this Agreement are intended for convenience only and are not to be considered in construing this instrument 3. This Agreement shall not constitute or be considered an agency, employer-employee relationship, jointventure or partnership between the parties. None of the parties, nor any of their employees or agents, shall have the authority to bind or obligate the other party except as provided by this Agreement. 4. Should any provisions of this Agreement be determined by a court of competent jurisdiction to be unenforceable, that determination will not affect the validity of the remaining provisions. 5. This Agreement shall be interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania. All suits instituted under this Agreement shall be brought in Pennsylvania in a court of competent jurisdiction. Builder hereby consents to the personal jurisdiction of the Pennsylvania courts. For Builders who are licensed in the state of New Jersey, note that this agreement shall be interpreted and enforced in accordance with the laws of New Jersey; for all homes enrolled with an address in New Jersey. 6. Buitder shall not assign this Agreement without the prior written consent of QBW. 7. This Agreementshall inure to the' 'fit of and be binding upon the heirs, exec ~, administrators, assignee, and successors of the representative pa. ties. 8. This instrument, and security documents and documents referred to or incorporated herein by reference; contains the entire agreement between the parties, and no statement, promises, or inducements made by either partyor agent of either party that is not contained in thiswritten contract shall be valid or binding; and this contract maynot be enlarged, modified, or altered except in writing signed by the parties and endorsed hereon. 9. Failure of eitherpartyto insist upon compliancewith any provision ofthis Agreementshall notconstitute awaiverof that provision. 10. All notices required hereunder must be in writing and sent by certified mail, postage prepaid, return receipt requested, to.the.recipient at the respective address shown below, or to whatever addressthe party may designate in writing. 11. The effective date of this Agreement shall.be the date of execution by QBW. By QUALITY,Bt~tt:DERS ~IIBrRRANT~°CORPORATION Joseph Date of execution by +3BW: Juf~e 2, 1993 Builder's Registration No.: 60093 BUILDER: John Kavana h Com~anv (Name of Builder -please print or type) DATE ~ ' By (Please print name/title of executor) P n Rc~~L415 Creensbara,.--NC-27-4~~-A~15 (Address) gnature of Authorized Representative -Title) B. John Kavanagh Copyright 1986 Quality Builders Warranty Corporation `~~ BUILDER AGREEMENT AGREEMENT made this 7th day of June , 19 95 , between QUALITY BUILDERS WARRANTY CORPORATION, a Pennsylvania corporation, herein referred to as 'QBW,' and _ John Kavanagh Company Name of Builder: (indicate whether a corporation, partnership, Individual or other) of Address ' P.O. Box 9415 Greensboro NC 27408 herein referred to as 'Builder.' State Zip SECTION A. MEMBERSHIP ANDTERM: 1. QBW administers a program whereby home builders registered with QBW enroll homes they construct in the program and purchasers of those homes are protected by a warranty against certain specified defects. 2. In order to develop and maintain a good reputation for providing protection to purchasers of welt-built homes; QBW protects and promotes its good-will by careful selection of builders to participate in its warranty program. 3. Builder desires to participate in QBW`s warranty program and, to that end, agrees to abide by the provisions of this Agreement and to conform its behavior to the standards expressed herein and in the Limited Warranty Agreement. Builder warrants that all information supplied to QBW in connection with its application is true and correct. 4. All registration fees (initial and annual rescreening) are set by OBW at its discretion and are non-refundable. 5. QBW, upon executing this Agreement, has accepted Builder as a member of its warranty program, subject to the Builder's continuing performance of its obligation under this Agreement. 6. Builder's membership shall commence on the date of F~(ecution by QBW and shall continue until terminated by either party in accordance with the terms of this agreement. QBW reserves the right to rescreen Builder annually. If QBW determines that Builder does not meet its approval standards upon rescreening then QBW may terminate Builder's membership and the provisions of Section B, paragraph 6, shall be in effect. SECTION B. HOME ENROLLMENT: 1. Requirements. As part of its participation in QBW's warranty program, subject to QBW's acceptance, Builder agrees to enroll in the program every home, Builder, Builder's Principals, or any entity under Builder's, or Builder's Principals common control constructs in any state in which QBW operates and agrees to pay all fees required by QBW in the enrollment process, which~fees shall be non-refundable. 2. Procedures. Builder agrees to enroll its homes according to procedures established by QBW. Builder may enrol{ homes currently under construction and homes completed but not sold or occupied (as of the date of this Agreement or the date of reacceptance following a period of suspension or non-participation) provided that enrollment is made within 45 days of execution of this Agreement or reacceptance, and QBW has inspected and approved the home. When enrolling other than a detached single family dwelling, Builder shall enroll each individual unit of any multi- unit dwelling such as but not limited to duplexes, townhouses and condominiums. For each home enrolled, the Builder shall pay a warranty fee as determined by QBW within the time periods estab- lished by QBW. All warranty fees are non-refundable. A minimum warranty fee of $100.00 shall apply. QBW will provide Builder with a copy of the Limited Warranty Agreement and Enrollment form. Builder and pur- chaser must complete, sign the Agreement and Enrollment Form at closing, and Builder agrees to furnish QBW with a copy of the signed Enrollment form within ten (10) days of closing. Builder agrees not to charge the purchaserdirect- ly the cost of the enrollmentfee. A home will not be considered enrolled until QBW receives and approves the fully exe- cuted and completed Enrollment Form, payment of all fees, and an approved final inspection. 3. Reservation of Power of Review. QBW reserves the right to reject any home submitted for enrollment in the program if (a) the Builder is .not a member in good standing; (b) the home is not constructed in accordance with the Warranty Standards or building codes specified iri the Limited Warranty Agreement; (c) the Builder did not observe the enroll- ment procedures; (d) misstates or misrepresents any information; (e) in any way fails to comply with the terms of this Agreement. 4, Assignment of Rights. if a purchaser files a Complaint pursuant to the Limited Warranty Agreement which the Builder fails to correct, the Builder hereby assigns to QBW or its insurer, as the case may be, any rights which Builder may have against a supplier, manufacturer, subcontractor or other person for work performed or materials supplied in con- nection with that claim. Builder agrees to cooperate fully with QBW and to provide QBW with al{ information which it requests pertaining to the claim. if Builder fails to so cooperate, Builder agrees to compensate and indemnify QBW for any damages sustained by such lack of cooperation . 5. Breach and Remedy. if Builder fails to enroll any eligible home as required by this Agreement, QBW.may seekspecif- ic enforcement or other appropriate relief in legal or equitable proceedings, even if this Agreement has been termi- nated. Furthermore, Builder agrees to indemnify and hold harmless QBW and its insurer for any losses or any dam- ages QBW may suffer as a result of Builder's breach of this Agreement and such losses and costs shall ttclude reasonable attorney's fees and expert witness fees. Builder hereby irrevocably authorizes and empowers any attorney or any court of record of Pennsylvania a else- where to appear for and confess judgment against Builder for ail amounts for which Builder may become liable to QBW r~ for the breach of this Agreement, as evidenced by an affidavit signed by an officer of QBW setting forth the amounts then due, plus attorney's fees incurred by QBW, with costs of suit and release of errors. Such authority shall not be exhausted by any one exercise thereof but judgment may be confessed as aforesaid from time to time as often as there is a default. Remedies stated herein are elective and not exclusive and QBW may elect to proceed under this or any other paragraph in this Agreement. 6. Suspension or Termination. QBW may terminate, or at its option suspend, Builder's participation in QBW's Warranty Program, or any entity or individual which Builder is affiliated, if QBW determines that Builder has done any of the fol- lowing, which shall be deemed a breach of this Agreement. (a) fans to comply fully with all provisions of this Agreement; (b) fails to perform any of its obligations under this Agreement, including, but not limited to, cooperating in the opera- tion of the program`s informal dispute resolution and arbitration procedure; (c} fails to respond to QBW's notice of a homeowner's complaint; (d) fails to comply with a decision which is rendered pursuant to complaint procedures; (e) fails to provide adequate assurance to QBW within ten (10) days after it receives a written request from QBW for such assurance that (within a reasonable timetable~established or approved by QBW) it is willing and able to coop- erate in dispute settlement and to perform the obligations under any decision which is rendered pursuant to such procedures; (f) fails to otherwise cooperate in the operation of the QBW Program in accordance with the rules and regulations of the QBW Program; (g) fails to provide timely proof of compliance with this Agreement, as and when requested by QBW; (h) fails to comply with QBW Warranty Standards and building codes as stated in the Limited Warranty Agreement; (i) fails to comply with the enrollment procedures established by QBW; (j) fails to provide proof that enrolled homes have been subjected to required inspections; (k) fails to respond to purchaser complaints in a timely manner and as provided in the Limited Warranty Agreement; (I) fails to perform its obligations with professional competence or conduct its operations from a position of financial strength and stability; (m) fails to notify QBW within 30 days of a change in ownership, company name or company standing, financial con- dition, or of any other material fact which might affect Builder's ability to meet its obligations under this Agreement; (n) fails to meet ethical standards in its dealings with customers; or (o) misstates or misrepresents any information in connection with its application or in the rescreening process. QBW reserves the option to reinstate terminated affiliates of the primary, terminated Builder if QBW determines that the terminated Builder or its principals are not in a position to control the affiliated Builder. Termination of Builder by QBW shall not affect the rights or obligations of any of the parties to this Agreement with respect to the Warranty Program in effect at the date of termination, subject to the provisions pertaining to voidability. If a Builder is suspended or terminated, he shall not represent himself to be a member of the QBW Warranty Program nor offer the QBW Warranty and shall not use its Logo or refer to the program in any way nor attempt to enroll any home. The Builder shall immediately notify any Buyer currently under contract to purchase a home of the suspen- sion or termination and that the QBW Warranty Program has been withdrawn. Upon request, Builder shall immediate- ly return to QBW all materials supplied by QBW and ail material making reference to QBW. Should Builder fai! to take these steps, it shall indemnify and hold harmless QBW and the insurer against any and all expenses incurred and loss- es suffered, including but not limited to attorney fees, by either of them as a result. In addition, Builder shall pay inter- est to QBW at the rate of 18% per annum on all sums due to QBW hereunder if such sums are not paid within 30 days of demand by QBW. Builder may ter~tinate this Agreement upon 30 days advance written notice to QBW. If so terminated by Builder or by QBW, Builder's obligations under this Agreement shall continue as to those homes enrolled during the period in which this Agreement was in effect. x 7. Notice. If QBW possesses a reasonable-belief that reason exists to terminate or suspend a Builder for violation of this Agreement, QBW may immediately terminate or suspend the Builder by providing it with written notice. If QBW elects to suspend the Builder, such suspension will remain in effect until Builder has cured all defects to QBW's satisfaction, however, QBW reserves the right to terminate~any suspended Builder. 8. Votdability. QBW reserves the right to void any enrollment if Builder misstates or misrepresents any information in its application or in the rescreening process or misstates or misrepresents any information in the enrollment of a particu- lar home or fails to pay any fees due for enrollment of any particular home or fails to forward an enrollment form for a particular home within 10 days as required. SECTION C. BUILDER'S OBLIGATIONS: 1. Construction Obligations. Following are the Builder's obligations with respect to QBW's Warranty Program: (a) Builder shall construct all homes in conformity with the Warranty Standards provided in the Limited W~ranty Agreement, and/ or in conformity with approved building codes and other standards established by QBW and in effect at the beginning of construction of the enrolled home. QBW reserves the rights to establish special require- ments for escrow payments or other means of protection with respect to any homes constructed by Builder which QBW determines to be 'High Risks.° (b) Builder agrees to have all homes inspected, as required by QBW, and to pay all fees for the inspection and to pro- vide evidence of inspection as and when required by QBW. QBW shall provide inspectors or shall approve gov- ernmental inspectors. (c) t~BW shall have the right to perform spot inspections to verify Builder's compliance with this Agreement and Builder agrees to cooperate. (d) The Builder agrees to indemnify and hold harmless QBW andlor its Insurer for any losses or damages QBWand/or its Insurer may suffer as a result of the use of fire retardant treated plywood on any building enrolled under the QBW Ten Year Warranty Program. This will include all claims and liability for losses, damages and expenses which QBW and/or its Insurer may sustain, incur, pay or be liable for by means of any investigation settlement or litigation of any claim or action which may be raised, made or brought due to the potential defects caused or likely to be caused by use of the subject plywood. (e) if the Builder is informed by QBW that it is building in an area designated as one with active soil conditions, the Builder agrees to obtain such soils investigations and reports as may be required by QBW. If such reports indicate a need for special foundation design the Builder agrees to construct the foundation according to the design of a registered professional engineer to take into account the conditions disclosed by the soil tests. 2. Warranty Obligations. Builder agrees to perform all obligations arising from this Agreement and the Limited Warranty Agreement. The Builder shall at its own expense perform all obligations as set forth in the QBW Warranty Program and this Agreement which includes meeting the warranty standards upon notice from the Purchaser without the necessity of QBW intervention. If Builder fails or refuses to perform its obligations in accordance with the Limited Warranty Agreement, QBW will perform thase obligations; however, Builder agrees to reimburse oBW and/or its insurer for all expenses incurred in performing those obligations, including, but not limited to costs of materials, cost of collection, labor, architect's fees, , engineering fees, and attorney's fees. QBW reserves ail rights of subrogation. If the Builder repairs a major structural defect during year 1 or 2, QBW must be notified. Once notified, QBW will perform a compliance inspection. QBW agrees to perform its obligations pursuant to the Limited Warranty Agreement in years three through ten pro- vided that the defect that is the subject of the Purchaser's claim did not occur within the first two years and was not concealed or cosmetically or improperly repaired by the Builder during those two years. Builder is not responsible for any damage caused by a major structural defect, as defined in the Limited Warranty Agreement, occurring after the expiration of the first two years of the Limited Warranty Agreement provided the defect was not concealed or cosmetically or improperly repaired during those two years. QBW will hold the Builder harmless for the reasonable cost of repairing or replacing such defects, and against the payment of any money judgment, order or decrees made against Builder for the repair of the defect. 3. Builder is authorized to advertise its membership in the QBW Warranty Program and to use its Logo in its business, pro- vided that any reference to QBW or its insurer, whether contractual or advertising copy, be approved by QBW in writ- ing in advance of its use. 5ECTION D. INFORMAL DISPUTE PROCEDURE: 1. Builder should be aware that the Limited Warranty Agreement provides for an informal dispute settlement and arbitra- tion procedure to resolve complaints by purchasers under the Limited Warranty Agreement. Builder should become familiar with the settlement procedures in order to be aware of its rights and responsibilities. Builder agrees to coop- erate fully in the procedure and to be bound by and to comply with any decision of an independent third party, or arbi- trator. If the Builder fails to perform its obligations hereunder in a timely and goad and workmanlike manners such fail- ure shall be considered to be a refusal to perform governed by paragraph C.2 hereof. 2. The Builder agrees to pay all fees charged in connection with the informal dispute settlement and arbitration proce- dures. SECTION E. TERMS GOVERNING OPERATION AND INTERPRETATION: 1. Builder agrees to perform its obligations under this Agreement in a timely manner. However, time provided for perfor- mance of obligations hereunder shall be extended by events not subject to control by the person obligated to perform. Such events include acts of God or the public enemy, or, riot, civil commotion or governmental conduct. 2. Descriptive headings as to the contents of particular provisions of this Agreement are intended for convenience only and are not to be considered in construing this instrument. 3. This Agreement shall not constitute or be considered an agency, employer-employee relationship, joint venture a part- nership between the parties. None of the parties, nor any of their employees or agents, shall have the authority to bind or obligate the other party except as provided by this Agreement. 4. Should any provisions of this Agreement be determined by a court of competent jurisdiction to be unenforceab~, that determination will not affect the validity of the remaining provisions. 5. This Agreement shall be interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania. All suits instituted under this Agreement shall be brought in Pennsylvania in a court of competent jurisdiction. Builder hereby consents to the personal jurisdiction of the Pennsylvania courts. For Builders who are licensed in the state of New Jersey, note that this agreement shall be interpreted and enforced in accordance with the laws of New Jersey; for all homes enrolled with an address in New Jersey. 6. Builder shall not assign this Agreement without the prior written consent of QBW. 7. This Agreement shall insure to the benefit of and be binding upon the heirs, executors, administrators, assignee, and successors of the representative parties. 8. This instrument, and security documents and documents referred to or incorporated herein by reference, contains the entire agreement between the parties, and no_statement, promises, or inducements-made by either party or agent of either party that is not contained in this written contract shall be valid or binding; and this contract may not be enlarged, modified, or altered except in writing signed by the parties and endorsed hereon. 9. Failure of either party to insist upon compliance with any provision of this Agreement shaft not constitute a waiver of that provision. 10. All notices required hereunder must be in writing and sent by certified mat{, postage prepaid, return receipt request- ed, to the recipient at the respective address shown below, or to whatever address the party may designate inwriting. 11. The effective date of this Agreemer~,t~hall be the date of~execution by QBW. By CORPORATION President Date of execution by QBW: June 2 1995 Btaiider's Registration No.: 60093 BUILDER: John Kavanagh Company (Name of Builder -please print or type) DATE June 7, 1995 By of Authorized Representative • Title) (Please print name/tltle of executor) F.O. Box 9415, Greensboro, NC 27408 (Address) Copyright t988 duality Builders Warranty Corporation QBW FORM 050 3/95 ~. C O R P 0 R A T I O N P.O. Box 271 Camp Hill, PA 17001-0271 telephone: 717 737.2522 fax: 717 737-4288 January 05, 1999 SENT VIA FAX (336) 370-4137 ~. John Kavanagh Company ~. P.O. Box 9415 Greensboro, NC 27429 •. ~ . Attn: John Kavanagh. RE: Liberty Loyalty Program ~ ~ ~~~ Dear John: I am writing in follow up to our recent .telephone conversation.. Enclosed is an addendum to enable you to participate in the Liberty Loyalty Program. Please sign and return the document and upon . receipt I will instruct our Customer Service Department to put your new rate into effect immediately. .~ If you have any questions please do not hesitate to contact me. Very truly yours, ' John A. Gill, Esq. :. Vic President/General Counsel JAG:dll ~~ Enclosure ,~ x~t~ - ~~ir .~ Deliveries: 325 N. Second Street; Wormleysburg, PA 17043 ADDENDUM This addendum, is between Quality Builders Warranty Corporation (QBW} and JOHN KAVANAGH COMPANY referred to as "Builder". Builder is a member in the QBW 1~0 Year Limited Warranty Program. QBW and Builder desire to modify the Agreement and their respective rights and obligations thereunder. Now, WHEREFORE, QBW and Builder, in exchange for the mutual covenants contained herein and intending to be legally bound hereby agree as follows: 1. The above recitals are an integral part of this Addendum and are incorporated herein. 2. Builder shall maintain its membership in QBW's Limited Warranty Program for an additional period of Three (3) years to commence upon the below date and submit for enrollment homes which Builder constructs during that time. Builder may not terminate his participation in the QBW Program within that period unless consented to by QBW. 3. Builder shall pay an annual membership fee. 4. Builder's rate will be $1.60 per thousand. The rate will remain in effect for the period of this Addendum. 5. If in the unforeseen event of a rate increase, caused by Legislation, or situations beyond the control of QBW, Builder has the right to terminate participation with no penalties. 6. Builder agrees to enroll all homes constructed by them, or any affiliates, in the QBW program. If Builder or any affiliate fails to enroll all homes, for the term specified in #2 above, Builder agrees to pay QBW the difference between his qualified rate based on actual volume and the discounted rate specified in #4 above for all homes enrolled during this agreement. Payment must be paid within 30 days of discovery of breach or Builders premature termination of this agreement. 7. If the terms contained in this Addendum are inconsistent with the Builder Agreement, the terms of this Addendum shall govern. IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be executed by their duly authorized officers, as of this day of 1999. QUALITY BUILDERS WARRANTY CORP. BY: President JOHN KAVANAGH COMPANY BY. . __ .. ,, -.v i/•v~i nv inn vHlveyVll IJUI I!'HIVI .7.5~.•$(l)L~f..j~ PAGE 1 John Kavanagh Company P . O . Box 9415 Greensboro, NC 27429 Fax Number: (336) 370-4137 Fax Transmittal Cover Sheet To: ~o h r, +~', I 1 Company: Q (~~ Date: ,~ / 4 199 Fax Number: (~ i ~] } 131 -~~$~ Tigre: (b~, 45 Number of pages, including this cover page: ~ Comments: ne' ~Ir,A r i-il ~ e~L~ a.1 ~md r ~ •~-• ~^~-~fl nAAr1~ (~ ~ [moo -i-+ nC~ Q. ~~ f'1r~ o nQ RP~..C1L`~-t -~„n nt 1 ( ' ~ V A ~ ;~ r,-, ~ .,..~ at 1~ r t Q f1~ir+7 F~ rjlq f[1r+'~ 1 ~ E ~. P ~ 1 rrtiC'. ***Ptease call (336} 272-9904 if you do not receive all pages*** FGA-flit.1 qQ~l 1 A; ri1 ~"~~~?Rd1 ~? qd'/. P la1 , nil L JAN-05-1999 15 56 aLiTY BUIUDERS WARRANTY 717 737 4288 P,03~93 •ADYIE~DUM' This addendum, is between Quality Builders Warranty Corporation (QBw) and JOHN KAVANAGN COMPANY retarred to as "Builder". Builder 1S a member in the 4Bw 10 Year Limited Warranty Program. QBW and Builder desir® to modify the Agreement and th~rir respective rights and obligations thereunder. Naw, WHEREFORE, 9BW and Builder, in exchang® for the mutual covanantB contained herein and intending to be legally bound hereby agree as follows: 1. The above recitals are an integral part of this addendum and are incorporated herein. 2. Builder shall maintain its membership in QBW's Limited warranty Program For an additional period of Thxe~e (3) years to commence upon the below date and submit for enrollment homes which Builder constructs during thet time. Builder may not terminate his participation in the QRW Program within that period unless consented to by QHw. 3. Builder sAa21 pay an annbal membership fee. 4. Builder's rate will be S1.6B per thousand. The rate will remain 1n ePfact for the period of this Addendum. 5. if in the unforeseen event of a rate increase, caused by Legislation, or situations beyond the control oP QBW, Builder has tht right to terminate participation with na penalties. 6. Builder agrees to enroll ali homes constructed by them, or any affiliates, in the QBW program. IP Build®r or any affiliate fails to enroll all homer, for the term epeciPisd in ;~2 above, 9uildar agrees to pay QBW the ditterence between his qualified rate based on actual volume and the diaeountad rate specified in ~(4 above for all homes anrallad during this agreement. Payment must be paid within 30 days of diacavery of breach or Builders premature terarination of this agreement. 7. If the terms contained in this addendum are inconsistent r~ith the Builder Agreement, the terms of this Addendum shall govern. IN WITNE53 4lHEAEOF, executed by their duly February ~ 1999. the parties hereto have caused this Addendum to be authorized officers, as of this 4th day of QUALITY BUZ>r08R3 WAR.RRNTY CORP. ~• ~~i~• Presi ent JOK1~1 .KAVAIIAGH C4HPANY BY: 4105 '99 1554 ~3 Tf]TAI•. P. G13 FEB-04-1999 10 52 3363?0413'7 95~ P ._02~~ C 0 R P 0 R A T 1 0 N 325 N. Second Street, Wormleysburg, PA 17043 telephone: 717 737-2522 fax: 717 737-4288 February 4, 2002 SENT VIA FAX: 336-370-4137 Mr. John. Kavanagh John Kavanagh Company P.O. Box 945 1810 Pembroke Road Greensboro, NC 27429 Dear Mr. Kavanagh: C+n February 4, 1999 you signed au Addendum to your Membership Agreement entitling you to a lower rate. I am enclosing a copy of that Addendum for your convenience. That Addendum has now expired but we are able to extend the Addendum entitling you to a Iower rate. I have added the extension language to the original Addendum. Please sign and return via fax so we can continue your Ioyahy rate. As always, thank you for permitting us to be your warranty provider. Very truly yours, Gill, Esquire Gen Counsel JAG:dll. Enclosure ExHir~~r 7 **~~**M*~****** -COMM.,:_RNRL- *********~******~~x DATE FEB-0a-2007 ~**~* T[ME 17 22 *** P.01 MODE =MEMORY TRANSMISSION FILE NO.= 136 STN N0. COM RBBR N0. STATION NRMEiTEL.NO 001 OK s 13363?04137 ****************w****~~*********~* -QBW START=FEB-04 17 21 END=FEB-B4 17 22 PAGES DURATION 0031003 00 00`31„ -QUALITY BUILDERS I~IARRANTY- - ***** - 717 73? 4288- ********* QUALITY" BUILDE~tS ~'~YARRAN~TY C D R P 0 R A T 1 0 N 325 N. Second Street. Wormleysburg, PA 17043 telephone: 717 737-2522 fax: 117 737-4288 FAX TRANSMITTAL SHEET DATE: February 4, 2002 TO: Mr. John Kavanagh Joha Kavanagh Company FROM: John A. Gill, Esquire General Couzzsel FAX: 336-370-4137 RE: Liberty Loyalty Document Extension TRANSMITTAL SHEET IS PAGE 1 OF 03 PAGE (S) BEING SENT. IF YOU DO NOT RECEIVE THE DESIGNATED NUMBER OF PAGES; PLEASE NOTIFY US IMMEDIATELY. :.nostmcrtt 'his aadsnaum, is tetween Ouaiity Builders Wenanty ccrporat_on (QBw and .ottrt 1eAVANAGH CCHPANY reterred to as "EUi lder". :uiidsr :5 a meatier .r. t;,e QBw ;0 Year Limited Warranty Program. QBW and Euilder desire to modify the Agreemrnc and thtiir respec__+e r:ght3 .:nd _bligacicns thereunder. Nav, 'dHEFEYOBE, q6w and Builder. in e:cei:ange tat cha mutual .-evenants cont3lnad herein and i-,[ending to Se legally Sound Hereby agree as Eoi:a,.s: t. The above recitals are an :rtegcal^.art of *_his Addendum and are incorporated herein. :. Builder shall maintain .c5 membership in Q6w's Limited warranty Program for =n additional period of Three (31 years to comnance upon the below date and avbm>_t :or anroi'_:eenc hctces vh:.!t Builder constructs during tnac tine, guilder nay not terminate his far::cipation .n the QBw Progrza within that period unless consentsd to by QHW. 3. Builder shall pay an annual membership tee. ~, guilder's rata wall be 51.60 per Chotuand. The race will remain 1n ettac: for the period of this Addendum. S. If in the untoreset?'r event of a rate increase, caused by Legislation, or situa[iom beyond the control of QBW, Builder has the right to terninata partie:Dation with ne penalties. 6. Builder agrees co enroll all homes constructed by theo, of any a::il:atati, in the QBw prograa. Tt Builder or any affiliate fails to enroll :11 homes, for the term specified in 112 above, Builder agrees to pay 4BW the ditterence Yacween hie qualified rata based oa actual voluae and the diacountsd rats apseifiec in NA above Eor all homes enrolled during this agraeman,_ Payment aunt be paid within 30 days of discovery of breacIl or Builders =rasacure ter3inatipn of this agreement. 7, If the terms contained in this Addendum are inconsistent vith the Builder 7(greemant, the terms of this Addendum dull govern. IN WITHE33 WHFAEOF, the parties here[o have caused this Jlddendttm to be executed by their duly authorized officers, as of this 4t` day of February tggg QUALITY BUILDSA`1S {YAARWTY CDRP. BY. ~.'(~. IY't~n~ JicE Presi ant S01@t .1CAVIU7AGH CDYO?ANY BY: Y`t V'L The term of the Addeardum is extended for an additional three (3}years and will renew for like terms unless thirty (30) days prior to the expiration of this term or any extensions either party provides the other thirty (30) days advance written notice that they intend not to extend the period entitling the builder to a lower rate. If Builder provides notice, QBW will. adjust the Builder's rate upward effective at the end. of the then current term, QUALITY BUILDERS WARRANTY CORPORATION By: 30HN KAVANAGH COMPANY By: QUALITY BUILDERS W9RRANTY C O R P O R A T I O N 325 N. Second Street, Wormleysburg, PA 17043 telephone: 717 737-2522 . fax: 717 737-4288 February 4, 2002 SENT vi<A FA-X: 336-370-423? Mr. John Kavanagh John .Kavanagh Company F.O. Box 945 1$10 Pembroke Road Greensboro, NC 27429 Dear Mr, Kavat~gh: On Febntary 4, l 999 you signed sn Addendum to your Membership Agreement entitling you to a lower rate. I atn enclosing a copy of that Addendum for your convenience. What Addendum has now expise<l but we are able to extend the Addendum entitling you to a lower rate, I have added the extension language to the origiaal Addendum Please sign and retuYn via fait so we csa continue your loyalty rate. As always, thank you for permittiuig us tQ be your warranty provider. very truly yours, Gill, Esquire G 1 Counsel. JAG:dII Enclosure ~kH l r3lT ~ . QUALxTX BUILDERS ~VARI~ANTY C O R P 0 R A T i D N 325 N. Second Street, Wormleysburg, PA 17043 telephone: 717 737-2522 fax: 717 737-4288 FAX TR.ANSi'VIITTAL SHEET DATE: February 4, 2002 TO: Mc. John Kavanagh John Kavanagh Company FROM: Jolut A. G~~, Require General Course! FAX: 33b-370-4! 37 RE: Liberty Loyalty Doc~.unent Extension TRANSMITTAL SHEET IS PAGE I OF 03 PAGrE (S) BEING S'ENT_ IF YOU DO TOT 1tECBIVI~ THE DESICsNATED NUMBER OF PAGES, PLEASE NOTIFY US INIlv1EDfATELY. .1OflSND l!f[~ ^tiiG ~ddar.:ua, ice. batNC!]t pualLty @usldera N@r: anty Cocparat_on (pH4t .:++d ,:OFM YSVLNIGH GG>IYJ~S7r rntarrnd tD d8 "9u~lder', 9uiidor _3 s meaDet :n :tta pta'+ t0 zear G:aitm Varrst:y Prcerno. C8t7 ana Euilder des.re [a aadi:y tt.9 ~'aoxan[ .vtd :.:=ir :cnpcG[:va r_gcca ,tnd _:119~t1ca: et>rretmaer, i.wr, Yx~1ZrQAE, ptTte and auildet, in G~G.ango tar the mnt=val ~von.'+nca coni3lfi>ta TteIC::• and :rtmtd:fig to 5e legally 'gwsd :.+Leby agroa .ie :o:;..v~. t _ :ltn 2LOV8 :ccitaL- era aa =atgrel part of tttia MCnttdtzm sad ate :nGDr70:JLCd tinrein. _. EuLldez ltai] teaint~in :t~ mnoLotahip in pt:v~s Liaated warranty Pregsa~v ,a~ an additional F7eriad of :'7trRC ;3) 7ear~ ea C36@e:1a8 vpoa CAe he1nM data and mane.[ for enrotlmene itraee vt:i.7 Buildrs [Wtat,i'tlCta duriA9 rpaL [inc. solider nay sat: :erWtuce iris ;ar.;eiwcLOn is tIle paY Progr3a within Chet periac( utlecs eery-,o:tcnd to Lry pBN. 3. H911dar smll pay an annual rae~arraiP tee. s. suiltier•s rate uili Sn 51.60 par iheadanc. :^ie :sta viii rerratn Sa aCLOOt tar ttte DeYiad o! t11. ldd+ndun- S. I! srs CLe tuitoreaaea eveAC OL S rsre aGa:msn, cau;,ed by Leglelacian, x ~itsiaeiana beyettd the cn,terol at QBS(. Bunter has the right: to Crrnteta CO psr•etcraeimt with rte penalti~s_ 6. Builder igeees Cn earnll all hoses tone[ttteted by thm. nr any a:,tL•atea, in the Q9V ptogrhm, If SYiltas or any aftiiiata lairs to eerell all Homes. ter Cri¢ tern epeeilied in C1 aDOVS, 8ttaldar agsesy eo pay QBY tttn dltterence ba[vaen nia gttnlitied rat~r.tLiaett ea actual velsuw and tiw dlaenvarad ra[e apaeitied to 11t abavG for all bcaea earallW during thla agrnemratz_ Aaymene AN,at '?C paid within IO daY3 Ot discovery 7[ ~ItCat3' ar auildrr~ yr@ma[tlre ta+^^+^~tina of Chia igreemen[, 7. If ttte terms txmealnad. is LAi! J~33c000tlm st:e iw.nwaistent vitli the FL•L1C.Bt AglQeme7tt, Gao, LCt~a of Ctrl: iCdepola :jLtil govern_ '1i STITltEEE COs. CLe parLi~ naC2ta A3ve CSY6ed CaiJ lddanduD to De cxew[rrd try t3ei[ duly aueanrix,ni nttiersta, as ni rh3s 4cy day of Felt-teary , 1999. QUAI,I7r iOILDTR3 NJI/A~R7t~~!l~~,4(~Y~;CD~Rp. VILG PtO,i2 YIiC Juttl1.X71V104GM CGQJ~.4y Hr: Y vv~v The term of file Addendum is extended for an additional tfiree (3) years aid will renew fc¢' like terms uuiess thirty (3Q} days prior to the expiation of this retie or arty extensions either party provides tfle other thirty (30) days advallce written >7tltice that they intestd not to extend the period entitling the builder to a lower rate. If'Builder provides notice, QBW will adjust the Builder's rate rlpward effective at the end of the then current term. QUALITY BUILDERS'WARR~(Ty CORPORATION BY~ l 70HN KA_VATIAGH CaIV.(PAI~y ~ .:~.__ TOTAL P.03 Rte'! is 1 13= 4Z ~~ ...~ . ~.~ ..... r .. ...... ...- ..-~ .s ..... ... R .~ .,.... .r rr" . ~ .- .,,,,, ~' ` r+'{ ~_ ~" r.-2 d,i 'tC< r~ ,~ r~ ~ ~ ~ t'^ w C1 2 e~ ~ ~ ~ ` '~ ~ 4 •-+ y r..,~ a"` ~ C ... ~_ 0 (~ z's ~ ~z ~~~ N 6 ~ M (} ~ ~ ~ ~ w u o ~}~" - i 0 O 0.. .D ..~ , ,~ / ~ ~ lam ^~ ~ ~ V V J/ V V J July 1S,2UU? Kim Bogart Quality Builders Corporation ~2°i North Second Street t~Varmleysbur~.t, PA 17U~3 Dear 1<irn; As of.futy 1 S'~, 2UU7, John Kavanagh Homes will no longer require Qualit~~ Builders tiV;.trranty to provide tine ten-year sp~c~ctural warranty to any our fiit~.ire homes. We appreciate the service you have provided to our company as well as to our past homeowners. All current im~entor_y ItUmes will continue to retain the st;rvices of QBV1! as the holders of the ten-yezv struct~iral warranty program as previously ,agreed. ReL~ards: ~~~~ ~:~ Mary Ellen 1.ewry Vice President .~ ~C.~~(~ 13 (T' JJ ~~ X19 ~~~~ f r. ;~~-„/~: /~~_;= x:<. • ..c:. t;~,.:,~: , : • c;r- ,~:,1~f;~~.{f. Luc %.~+~~-a~ r ; ~ :~/:;,: o~n~~ .~.;r,>ia.~9n~t • r-~zr .3.3%..3~ 0.~~.3- • «:~~:~~:~:7~:~,;;, ~~l:olres.en»z P.~. Box 941, Greensboro, NC 27429-0415 181.0 Per.~bro~e Road, Greensboro, NC 27408 Phone: (336} 272-9904 /Fax: (336) 370-4137 ~`ax 'I'ransmittai C ~~ To: Company: Date: Fax Number: ( ) - Time: Number of pages; including this cover page: Comments: eet ,~ ~ . ~i~ ~/ ~~~~ ~'~'"Please call (336} 272-9944 if you do not receive aII pages~~~ June 28, 2007 ~ECElVED ~!~!. ~ 2 ~~Ol Mr. John Kavanaugh ~_~~. KAVANAUGH COMPANY 1810 Pembroke Road Greensboro, NC 27408 P.O. Boz 800 001-852A PWC Identification Number Annandale, VA 22003-0800 1-800-850-2799 Dear Mr. Kavanaugh: FAX 1-800-851-2199 It is my pleasure to inform you that Professional Warranty Service Corporation (PWC) has approved your Application for Participation. We appreciate your interest in the PWC Warranty Program and look forward to along and mutually beneficial relationship with you. The PWC Builder Identification Number is located in the upper right portion of this letter. Please use this number on all PWC forms and correspondence. As a PWC participating builder you are also a member of the Professional Warranty Purchasing Group (PWPG). The collective "buying power" of the purchasing group provides you with rates and coverages from a major insurance carrier that probably couldn't be obtained on an individual basis. Before you begin enrolling homes in the PWC Program please sign and mail the attached Insurance Authorization Form which requests issuance of your Insurance Certificate and Policy: PLEASE SIGN AND MAIL THIS k'ORM TODAY. In recognition of your construction volume, you have been assigned the Volume 2 rate- category. We will provide you with the appropriate enrollment fee and PWC Approval Number for each home at the time that home is processed for enrollment (refer to the enclosed Home/Structure Eligibility Manual for details). The enrollment fee is calculated based on the sales price and location of the home. The rate is broken into several components on the home enrollment form, but it basically comes to $1.55/$1,000, plus applicable taxes. Enclosed is an executed PWC Participation Agreement for your permanent records. This agreement outlines the responsibilities and benefits of participating in the Professional Warranty Program. Special attention is directed to Section II, Enrollment, and Section IV, Home Construction and Inspection. ~xH~e~r IA ~~, •.., ~Z. ~1 ~~~~'`3 Also enclosed is a Builder introduction package. Please familiarize yourself with the material in it and direct any questions to our Customer Service Unit at 1-800-850-2799. The Builder package includes: • Certificate of Participation • HomelStructure Eligibility Manual (PWC 675) • Jurisdiction of Participation (PWC 253) • Sample Sales Contract Language • Sample BUILDER'S LINIITED WARRANTY (PWC 107 Sample) • Application for Warranty Issuance (PWC 953) • Addendum to Application for Warranty Issuance (PWC 954) A supply of these forms is being shipped under separate cover. If you have not received this shipment within 10 days, or you require additional items, please call us at our toll-free telephone number. Again, cong7atulations on your approval. ...>, /yv~•1 :s- ~~ ~ .4 ~ M. orne 'writin'g Manager Enclosures cc: Roger Langford K00289 'y t aw 0 Z ea ~ N '' ~ ~ N ~ Z ` ~ C 3 '~ d 0 ~ ~ Q ^ .C ~ ~ > N LL iCi c Cj G ~~ ~y O E W °o V Q ~am~ ~ ~ V ~ ~ .Q u o =w ~a Q :~ ~ aoa ~ ~ v ~ '~ov V ~ ~ ~ a Z am~•- ~."' ~ , coy m y Q ~. ~, V d~ C 0 m .~ - a o ~ y L ~ i c ~ Z t~ O m ~ ~ N O ~ E _ c~ LL O C 'C z' m ~ O G1 c c c ~ V O m r u.. N U ~ c3 ~ y ~ r-. m ~ C O _o B 3 ~ ~K d a ~ ~~ ~N ~ ~ C~ ~U m a ~ as O a N O O a P 0 O PROFESS#OiVAL.WARRA~ ` SERV#CE CORPORAT#O~# (i7v~ =1lVC APPROVAL NUMBER: TEN YEAR NEW HOME WARRANTY PLAN Ph: 1-8001850-2iS9 Fax: 1-800/851-2799 i -~ ~ 1 =~ .: ,y,~., ~~... ,:• ,~.a .••- :a:•,yr .: .;:. .:....;.; .:~:...::~:o:~:•y:•ro:•;x:~:~:y;:~s .,.. :•;::.y.,,yra •;,yr:.y.,• ~:. 1. h.. n r ~+ r: ~ }~. ::: ::::J`t :. :: :: •: '': •: n .::. ~.:' ", i • ~ .. „ 1, ,~ ) . :• •• ?:: . {.•~' ':. .r : .;. . ~ :~ .: .: is j: ':: ~ ~: ~:sy:~:'i~:i:::••::i:::::•::.:::::'r'i:::u :: ?'vi::::~::: :•.l~,?.iC . i. i!•" S yI Q~y. . •:. •: :: : •: :. is : ': is •:. ': ~ ti,: ..y(~~: jjii y ~ •: ... .:::. ': is'Jja',`MM~~'Yi :: .: •: :: : . :{~.i1~('' :' +• :::•:: '[: '•::::".: ? ~~~~ .: ~~~~:~~:~i?:i::ii ~::i:L:i k~i:J::~:ivi'i: ii: ~":'i): ~ ~ •~~~~~Y:~ ~ ..~41~ 1T A•~ .:\~~~ ' ~ , . . . . . y ..yy. :s• •:.:•. .. •. . :~f f :Y: it w,l+-'i"?iii: . .. Y v :.~. ~'ytifi:•:i:•: iyyy::•yi::•:L:i.}.•.!w::::: •:::•::::: yyr~i:•.::r:::.C::••;n}~?vij ':. 4 ,: r,\? •.{'• ?~V:~uJ '~ .v.vlnY..?f:r. iv; ~}vf,::},.?.v; :Y. is}i"iM1. :;i..~L~-.:,v.:.... 1.4:' k. :i ...A. / : ..t. euB6ER~r •c.~ -, NAN~oFeuao;R. . , ', - ~ ~'w / S i 2• 1 ~. -GMT! ~ ? ADORESS OF NOI.E TO DE ENROLLEO:~ ~ ~ -~ ~ ~ ~ - UNIT 116.• LOT BLOCK - - CITY' ,STATE !- _,Z1P~ - i COUNTY: .-% T, ENTER THE DATE THE+WARRANTY PERIOD WILL BEGIN tnTLE TIUNBFER oR FlRSr oc«,PANCY, wlncNEVER cecuas PIRSTI Mo. t ~ nAaL: ~= :'``, TEAR :._ ~ ~,r 8. WHICH OCCURRED FIRST? ^ FIRST OCCUPANCY O CLOSING (TITLE TRANSFER) 9. TYPE OF FINANCING: D VA ^ FHA t~' OTHER ~ ~. VA of FHA CASE NUMBER (REOUtREO eY vaFliaj : NOTE: EHaWve Date of warranty for FHA homes Is ule •settlement uate^. 1 L ENTER THE SALES PRICE OF THIS HOME: S~--' ; /1`•~ '-~`"" ! ~_.,. 'I2. DMINISTRATION/P F E INSURANCE PR MIU URPL S LINE TAX ENROLLMENT FEE DUE 13. WAS A STATEMENT SIGNED BY THE HOME BUYER IDENTIFYING MATERIALS OR ITEMS OF WORK ^ YES ..0` NO TO BE EX L DED R WARRA CO G BECAU THEY WER N TPROVI ED BY TH BUfI ERT IF YE TTACH FORM #954 14. Nu,E oP rarva. Puacw.sattm os HoME: aAST NAA~ Fstsr _ ; --. _ -...~.--r' • r t l~ i , ~" ~ ~~ ~~ ~ A fit. `-~ ~ ~... 1 1 : t ~ '~T ' _ ~ ~ 75 HOME TYPE (CHECK ONE) ' ' ~ ~ ~J I ... ~,. _ i +~ N I 16. rAU-w ~oor+~ ~ ~AeovE quo uNE a) i ;' ti A; SINGLE FAMILY ATTACHED: ^ ar+r '' ,.:.. i, ~ (TE ,"! xsr't. -:B. SINGLE FAMILY DETACHED: O ~ 8. IF Fu1.L OR PARTW. BASEMENT, IS BASEMENT FINISHED l.IV1NG SPACE? OYES OjHO ;.. 19.'. t$ HOME$ERVICED BY.AN INDMDVAI WELL? DYES biro 2~. IS HOME SIStVICED BY AN INDN~IfAL SEPTIC SYSTEM? :DYES No 2! :' DOES HOME HA ATTACHED QARPORT OR GARAOE7 ^ YES NO ZZ. K NT NT . i Di' , G .. AN Z3. FOUI~ATION. CONSTRUCTION A t~POURED.CON6RE'fE e: O WOOD C: Q BL6CM _ D;.D OTHER ?A.tNSPECTION TYPE: ` ICIPALN30VERNttAENTAI. ^ PRIVATE D sPEC1Al - BUILDER t certify that the home is: reedy fol' oaupancy ahd.ha n con . din accordance tivith all-required building standards, that any required inspections have beert,ed, and.tt~at st~tQ~s in thi. ; pllcarlon ,are true and complete: r_~ ~`'~ ~ F; ' ~ ` rB ei d 25 el e A . D.,.: ~ iriyl «.Bui .. sgnea.eo I/we acknoilvledge tt~atUwa have receNed; reviewed arid.~understand the Builder's Limited Warranty document (PWC # 107). Uwe 4 acknowledge that the budder ca t make:represe~ntations as to Its Builder's Limited Warranty that. contradict or are inconsistent with the teims and coriditi at . ~n~tts Qullder's,L Ited Warranty. i • _ . ~ ~ " . •. ~ ~'x. a..;~.-; • p s 11, 26. sWn~ of Halle BilyM(i J • .~`~ - ~._ (THIS SECTION, IJNE 3T, DOES NOS APPLY TO HOMES WITH ORIGINA4 FHA or VA =MORTGAGES ) I/we aclcnowledge'and agree all disputes under and ~reiating to -the Builder's L9rrtited Warranty (including disputes on which issues shah be submitted th arbitration; ageged breach of the Builder's Limited Warranty; and aNeged violations of statutes or regulations relating to consumer protection or unfair trade practices); shall tie submitted to binding~a~bitration before an independent third party arbitration organization: Uwe a~re'b the decision of the arbitratrar(s) shall be binding on ail parties Any.such binding arbitrations) shall be conducted in accordance wtth tf-e rules and procedures applicable to :the arbitration organization hearing the dispute or, where these rules. are sdert#,.ttie Ugifed Btaie Arbltra~i6n Act (9` U.S.G. § et: sea:1: A ~ j ( / ( {l 2 tJN~A of Hortr Buyehf-: / : F ~ ~. ;. r_ /j \ .i •• s."~- ~ . '~= f r. ,~....-:,. dale: 28. CERTIFICATION: I coTrtacTed PVNG on this date ~ # 1 ~ t ~ %i '~ 1 fa en a ~---- .-~_._-, pptovel number. and hav~lbgen informed by RWC tha~the bu~Mer Iden>ified cln lines 1 and 2 above , is a participant in good standing Ot the Professional Warranty Program as of thisdate and eligtTJle ta'enroll (het~,o rr re~in the Professpnal VYarrantYypr'ogrlih. -~ ~ ¢ , gnal Warranty 8ervioe Capors8on PWC-867 8197 Slgnatu ~- ~- "~`; ~• ~' -,.'^f~ ~.,.'~.`._ -,,\M Proiessl le ` Ori9inai-PWC Gs[wy-Btafldar PNc-FHAIVAJLk~i~7ily ~I - _ _ G ~~ ~~~Iosw>~rK~erorBuNdsr/BuilderApenl vnnTUn M a VERIFICATION I, JOSEPH M. OLSHEFSKI, President of Quality Builders Warranty Corporation, hereby certify and state that the foregoing Plaintiff s Reply to Defendant's New Matter and Amended Counter Claim and Plaintiff s New Matter is true and correct to the best of my knowledge, information and belief; and that I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. §4904, relating to unsworn falsification to authorities. Date: ~ ~ ~- 6 `a Quality uil Warr rporation L By: Joseph M. Olshefski, President CERTIFICATE OF SERVICE I HEREBY CERTIFY that I served a copy of the Plaintiff's Reply to Defendant's New Matter and Amended Counter Claim and Plaintiff's New Matter was sent via U.S. Mail, first class postage prepaid, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure, addressed as follows: Hubert X. Gilroy, Esquire Martson, Deardorff, Williams, Otto, Gilroy & Faller Martson Law Offices 10 East High Street Carlisle, PA 17013 Date: .~ G d ~ ~ py~ Peg rrison, Secretary ~ "' c~ ' ~ ~ 1 ~_.'~:.' . ~ ~~> ° , `' . rte ~ ,,,,~, - -~ ~~.; '~ ~ F:\FII.ES\Clieats\12772 Kavaosgh\I2772.I.rep.new.matter.wpd Created: 9/20/04 0:06PM Revised: 5/22/08 3:49PM Hubert X. Gilroy, Esquire I.D. No. 29943 Trudy E. Fehlinger, Esquire I.D. No. 202753 MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER MARTSON LAW OFFICES 10 East High Street Carlisle, Pa 17013 (717) 243-3341 Attorneys for Defendant John Kavanagh Company QUALITY BUILDERS WARRANTY CORPORATION, Plaintiff vs. JOHN KAVANAGH COMPANY, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA N0.5153-07 CIVIL ACTION -LAW DEFENDANT'S REPLY TO PLAINTIFF'S NEW MATTER TO DEFENDANT'S COUNTERCLAIM AND NOW, comes the Defendant, John Kavanagh Company, by and through its attorneys, MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER, and hereby responds to Plaintiffls New Matter as follows: 51. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth or falsity of the averments in this paragraph. 52. Admitted upon information and belief. 53. Admitted upon information and belief. 54. Admitted. 55. Admitted. 56. After reasonable investigation, Defendant is without knowledge of information sufficient to form a belief as to the truth or falsity of the averment that in 1995 Plaintiff changed the procedure requiring builders to execute annual Builder Agreements. By way of further response, it is denied that the current agreement under which Plaintiff s membership in Plaintiff s warranty program is governed is the 1995 Builder Agreement. To the contrary, the Builder Agreement was superseded by the execution of the February 1999 Addendum to the Builder Agreement. 57. Admitted in part and denied in part. It is admitted that Plaintiff accurately paraphrases Section A, 6 of the Builder Agreement, but the Builder Agreement was superseded by the execution of the February 1999 Addendum to the Builder Agreement. By way of further response, any inference that Defendant breached the parties' agreement is denied. 58. Admitted. 59. Admitted. 60. Admitted. 61. Denied. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth or falsity of the averments in this paragraph and proof thereof is demanded. By way of further response, Defendant has no evidence of the validity of the purported addition to the 1999 Addendum in its possession. Defendant therefore denies any inference that it is bound to the terms of the purported addition to the 1999 Addendum or that Defendant breached its agreement with Plaintiff. 62. Denied. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth or falsity of the averments in this paragraph and proof thereof is demanded. By way of further response, Defendant has no evidence of the validity of the purported addition to the 1999 Addendum in its possession. Defendant therefore denies any inference that it is bound to the terms of the purported addition to the 1999 Addendum or that Defendant breached its agreement with Plaintiff. 63. Denied. After reasonable investigation, Defendant is without knowledge or information sufficient to form a belief as to the truth or falsity of the averments in this paragraph and proof thereof is demanded. By way of further response, Defendant has no evidence of the validity of the purported addition to the 1999 Addendum in its possession. Defendant therefore denies any inference that it is bound to the terms of the purported addition to the 1999 Addendum or that Defendant breached its agreement with Plaintiff. 64. Admitted in part and denied in part. It is admitted that the parties entered into the 1999 Addendum which obligated the parties in writing until February 2002, but all references to the purported addition to the 1999 Addendum are denied. Byway of further response, Defendant has no evidence of the validity of the purported addition to the 1999 Addendum in its possession. Defendant therefore denies any inference that it is bound to the terms of the purported addition to the 1999 Addendum or that Defendant breached its agreement with Plaintiff. 65. Admitted in part and denied in part. It is admitted that Plaintiff accurately paraphrases the language set forth in the 1999 Addendum, but any inference that Defendant breached its agreement with Plaintiff is denied. By way of further response, Paragraph 6 of the 1999 Addendum represents an invalid and unenforceable liquidated damages provision. 66. Denied. To the contrary, under the terms of the 1999 Addendum, Defendant was only obligated to Plaintiff by written contract through February 2002. By way of further response, any inference that Defendant breached its agreement with Plaintiff is denied. 67. Admitted in part and denied in part. It is admitted that Plaintiff accurately paraphrases the language set forth in the 1999 Addendum, but any inference that Defendant breached its agreement with Plaintiff is denied. By way of further response, Paragraph 6 of the February 1999 Addendum represents an invalid and unenforceable liquidated damages provision. 68. Denied. To the contrary, it is believed and therefore averred that Defendant enrolled homes in Plaintiff s warranty program through the middle of 2007. 69. Admitted in part and denied in part. It is admitted that Defendant refused in 2007 to enroll homes under construction or otherwise not yet closed, but any inference that Defendant breached its agreement with Plaintiff is denied. By way of further response, it is believed and therefore averred that Defendant enrolled homes in Plaintiff s warranty program through the middle of 2007. 70. Admitted in part and denied in part. It is admitted that Plaintiffcontacted Defendant to have Defendant submit the homes for enrollment and that Defendant refused to enroll homes under construction or otherwise not yet closed, but any inference that Defendant breached its agreement with Plaintiff is denied. 71. Admitted. By way of further response, any inference that Defendant breached its agreement with Plaintiff is denied. 72. Admitted. By way of further response, any inference that Defendant breached its agreement with Plaintiff is denied. 73. Admitted in part and denied in part. It is admitted that Plaintiff contacted Defendant to attempt to get Defendant to enroll all homes which it constructed until February 2008, but it is denied that Defendant was obligated to enroll all homes that it constructed until February 2008. By way of further response, any inference that Defendant breached its agreement with Plaintiff is denied. 74. Admitted. It is admitted that Defendant informed Plaintiff that Defendant was not going to enroll more homes in Plaintiffs warranty program. By way of further response, any inference that Defendant breached its agreement with Plaintiff is denied. 75. Admitted. By way of further response, any inference that Defendant breached its agreement with Plaintiff is denied. 76. Admitted. By way of further response, any inference that Defendant breached its agreement with Plaintiff is denied. 77. Admitted. By way of further response, any inference that Defendant breached its agreement with Plaintiff is denied. 78. Denied. The averments contained in this paragraph constitute conclusions of law to which no response is required. To the extent it is judicially determined that a response hereto is required, the same is specifically denied. By way of further response, any inference that Defendant breached its agreement with Plaintiff is denied and proof of the averments contained in this paragraph are demanded. 79. Denied. It is denied that if Defendant did not sign the Addendum marked as Exhibit 8 of Plaintiff's New Matter Defendant would owe additional warranty fees to Plaintiff for the period starting February 4, 2002. It is further denied that the February 1999 Addendum, referred to by Plaintiff as the original Rate Addendum, would have expired and Defendant should have been paying at their qualified rate as opposed to the discounted rate at which they paid. By way of further response, any inference that Defendant breached its agreement with Plaintiffis denied. Additionally, Paragraph 6 of the 1999 Addendum represents an invalid and unenforceable liquidated damages provision. WHEREFORE, Defendant John Kavanagh Company demands judgment in its favor and against Quality Builders Warranty Corporation in an amount currently believed to be within the jurisdictional arbitration limits of $50,000, and such other relief this Court deems just and reasonable under the circumstances. MARTSON LAW OFFICES By Hubert I.D. No. Esquire Trudy }~: Fehlinger, Esquire I.D. 0.202753 10 East High Street Carlisle, PA 17013 (717) 243-3341 Date: May 23, 2008 Attorneys for Defendant VERIFICATION Hubert X. Gilroy, Esquire, of the firm of MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER, attorneys for Defendant John Kavanagh Company in the within action, certifies that the statements made in the foregoing Defendant's Reply to Plaintiff's New Matter to Defendant's Counterclaim are true and correct to the best of his knowledge, information and belief, based upon information provided by John Kavanagh Company. He understands that false statements herein are made subject to the penalties of 18 Pa. C.S. Section 4904 relating to unsworn falsification to authorities. John Kavanagh, President of John Kavanagh Company resides outside the Commonwealth of Pennsylvania and his signature could not be obtained within the time allowed for filing Defendant's Reply to New Matter. ubert X. Gilroy squire CERTIFICATE OF SERVICE I, Melissa A. Scholly, an authorized agent for Martson Law Offices, hereby certify that a copy of the foregoing Defendant's Reply to Plaintiff s New Matter to Defendant's Counterclaim was served this date by depositing same in the Post Office at Carlisle, PA, first class mail, postage prepaid, addressed as follows: John A. Gill, Esquire Quality Builders Warranty Corporation 325 North Second Street Wormleysburg, PA 17043 MARTSON LAW OFFICES By Melissa A. Scholly Ten East High Street Carlisle, PA 17013 (717)243-3341 Dated: May 23, 2008 ~~ ~ ~~~ r ~ ~ ` r ~} _.. ~, `_ ' ca , - , _,_, ~~. :c-. _~ ~w~ .. .- _-- ~,~ .~ Hubert X. Gilroy, Esquire I.D. No. 29943 Trudy E. Fehlinger, Esquire I.D. No. 202753 MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER MARTSON LAW OFFICES 10 East High Street Carlisle, Pa 17013 (717) 243-3341 Attorneys for Defendant John Kavanagh Company (1UAL1"1'Y BUILDERS WARRANTY CORPORATION, Plaintiff vs. JOHN KAVANAGH COMPANY, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA N0.5153-07 CIVIL ACTION -LAW DEFENDANT JOHN KAVANAGH COMPANY'S MOTION FOR PROTECTIVE ORDER AND NOW, comes Defendant, John Kavanagh Company, by and through its attorneys, MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER, and hereby files this Motion for Protective Order, pursuant to Pennsylvania Rules of Civil Procedure 4011 and 4012, averring as follows: FACTUAL BACKGROUND 1. Plaintiff, Quality Builders Warranty Corporation ("QBW"), is a Pennsylvania corporation engaged in the Ten-Year New Home Warranty business with its principal place of business located at 325 North Second Street, Wormleysburg, Cumberland County, Pennsylvania, 17043. 2. Defendant, John Kavanagh Company ("Kavanagh"), is a North Carolina corporation engaged in the new home construction business with its principal place of business located at 1810 Pembroke Road, Greensboro, Guilford County, North Carolina, 27408. 3. On June 2,1995, the parties entered into a Builder Agreement whereby QBW agreed to provide limited warranty services to Kavanagh's customers upon receipt of payment for said services by Kavanagh. A copy of the Builder Agreement is attached hereto as "Exhibit A." 4. On February 4, 1999, the parties executed an Addendum to the Builder Agreement whereby they agreed to extend their contractual relationship for a period of three (3) years, which period expired in February, 2002. A copy of the Addendum is attached hereto as "Exhibit B." 5. In July, 2007, QBW faxed a purported addition to the February 4, 1999 Addendum to Kavanagh, which seeks to obligate Kavanagh to continue to purchase warranty services from QBW through February, 2008. 6. The purported addition to the February 4, 1999 Addendum is set forth on the same page as the Addendum, but appears in different font and represents a different signature than that provided by John Kavanagh on both the Builder Agreement and the Addendum thereto. 7. The purported addition to the February 4, 1999 Addendum was not contained in the files of John Kavanagh Company and John Kavanagh has no recollection of seeing or signing the document. PROCEDURAL HISTORY 8. On August 27, 2007, Kavanagh filed suit against QBW in the Superior Court of North Carolina, Guilford County, alleging, inter alia, Breach of Contract and Unfair and Deceptive Trade Practices. 9. Subsequently, on August 28, 2007, QBW filed suit against Kavanagh in the Court of Common Pleas, Cumberland County, alleging Breach of Contract. 10. On September 21, 2007, John Kavanagh Company filed Preliminary Objections to Plaintiffls Complaint in Cumberland County seeking to have the Pennsylvania litigation dismissed for reason of improper venue and due to the pendency of a prior action. 11. After oral argument, the Honorable Kevin A. Hess issued an Order on December 11, 2007, denying the Preliminary Objections of John Kavanagh Company. MOTION FOR PROTECTIVE ORDER 12. On June 11, 2008, Defendant John Kavanagh Company was served with a Notice of Deposition for the corporate representative of John Kavanagh Company, the deposition being scheduled for July 10, 2008. A copy of the Notice of Oral Deposition Duces Tecum is attached hereto as Exhibit "C." 13. The deposition is scheduled to take place at the office of John A. Gill, Esquire, in-house counsel for Plaintiff Quality Builders Warranty Corporation, 325 North Second Street, Wormleysburg, PA 17043. 14. The Notice of Oral Deposition Duces Tecum requests that the deponent bring with him all documents in support of the allegation in Defendant's Answer withi New Matter and Amended Counterclaim, and Defendant's Reply to Plaintiff s New Matter. 15. Defendant John Kavanagh Company seeks an Order of Court directing that the deposition of any corporate representatives ofJohn Kavanagh Company be conducted in person in Guilford County, North Carolina, or alternatively, by telephone or remote video conference. 16. Defendant John Kavanagh Company is principally located in Guilford County, North Cazolina. 17. Defendant John Kavanagh Company will incur unreasonable annoyance, burden and expense if it is forced to produce one or more corporate representatives for deposition in this matter at the office of counsel for Plaintiff in Cumberland County, Pennsylvania, which is nearly 400 miles away from Defendant's place of business. 18. In addition to the unreasonable annoyance, burden and expense involved in the distant travel, any corporate representatives appointed by Defendant John Kavanagh Company for deposition will also incur the burden of bringing any documents in support of the allegations in Defendant's Answer with New Matter and Amended Counterclaim, and Defendant's Reply to Plaintiff s New Matter. 19. If Defendant John Kavanagh Company is forced to produce corporate representatives for deposition in Pennsylvania, Defendant will incur the additional unreasonable burden and expense of paying the costs for Defendant's North Carolina counsel travel to Pennsylvania to attend the deposition with the undersigned counsel, or to have Defendant's primary North Cazolina counsel fully brief and prepaze the undersigned counsel for the deposition. 20. Furthermore, all performance under the parties' agreement occurred in North Cazolina, all subject matter related to the contract is located in North Cazolina, Kavanagh's principal place ofbusiness is in North Carolina, both Kavanagh and QBW regulazly conduct business in North Cazolina, Kavanagh has no known contacts with the state of Pennsylvania, and while Kavanagh has never traveled to Pennsylvania as part of its relationship with QBW or otherwise, QBW has traveled to North Carolina as part of its relationship with Kavanagh. 21. In order to avoid the unreasonable annoyance, burden and expense that would be involved with the neazly 400 mile trip to Pennsylvania, the undersigned counsel for Defendant John Kavanagh Company proposed to counsel for PlaintiffQBW that Kavanagh would pay the cost of his airfaze to North Cazolina if the deposition could be taken there. 22. Counsel for Plaintiff QBW refused Defendant's offer, and advised that QBW would only be agreeable to such arrangement if John Kavanagh Company would pay for all cost of transportation, housing, meals and time expended for travel. 23. Defendant John Kavanagh Company is not agreeable to Plaintiff's proposal. 24. For the foregoing reasons, and as a result of the unreasonable annoyance, burden and expense Defendant John Kavanagh Company will incur if its corporate representatives are forced to attend a deposition in Pennsylvania, Defendant John Kavanagh Company seeks an Order of Court directing that the deposition of any corporate representatives of John Kavanagh Company be conducted in person in Guilford County, North Cazolina, or alternatively, by telephone or remote video conference. 25. Plaintiff Quality Builders Warranty Corporation does not concur in this Motion for Protective Order. 26. The undersigned counsel respectfully requests a conference in Chambers to address Defendant's Motion for Protective Order and any response thereto. WHEREFORE, Defendant John Kavanagh Company respectfully requests that this Honorable Court temporarily Grant its Motion for Protective Order and direct that Plaintiffmay not proceed with taking the deposition of any corporate representatives of John Kavanagh Company pending a conference in Chambers with counsel. MARTSON LAW OFFICES By Hubert X. Gilroy, Esquire I.D. No. 29943 Trudy E. Fehlinger, Esquire I.D. No. 202753 10 East High Street Carlisle, PA 17013 (717) 243-3341 Date: June 26, 2008 Attorneys for Defendant C•' RECYCIEO PAPER 0.ElYCU0.LE '~L BUILDER AGREEMENT AGREEMENT made this 7th day of June 1g 95 Cetwean QUALITY BUILDERS bVARRANIY CORPORA7{ON, a Pennsylvania corporation, herein referred to as "OBW,' and ___ _ John _Kavanagh Company Nan.e o~ Bu.;der: (,nd.cate whetne~ a ccrporaAOn, pdrtrersh;p, ~nd,r,duaf or otnar) Of Address P . o . aox 9415. Greensboro , NC 27408 herein referred to as 'Builder." s~a~® z~a SECTION A. MEMBERSHIP AND TERM: 1. aBW administers a program whereby home builders registered with aBW enroll homes they construct in the program and purchasers of those homes are protected by a warranty against certain specified defects. 2. In order to develop and maintain a good reputation for providing protection to purchasers of well-built homes, QBW protects and promotes its good-will by careful selection of builders to participate in its warranty program. 3. Builder desires to participate in QBW's warranty program and, to that end, agrees to abide by the provisions of this Agreement and to conform its behavior to the standards expressed herein and in the Limited Warranty Agreement. Builder warrants that all information supplied to OBW in connection with its application is true and correct. 4. All registration fees (initial and annual rescreening) are set by QBW at its discretion and are non-refundable. 5. QBW, upon executing this Agreement, has accepted Builder as a member of its warranty program, subject to the Builder's continuing performance of its obligation under this Agreement. 6. Builder's membership shall commence on the date of Execution by QBW and shall continue until terminated by either party in accordance with the terms of this agreement. OBW reserves the right to rescreen Builder annually, if aBW determines that Builder does not meet its approval standards upon rescreening then G18W may terminate Builder's membership and the provisions of Section B, paragraph 6, shalt be in effect. SECTION B. HOME ENROLLMENT: 1. Requirements. As part of its participation in QBW's warranty program, subject to QBW s acceptance, Builder agrees to enroll in the program every home, Builder, Builder's Principals, or any entity under Builder's, or Builder's Principals common control constructs in any state in which QBW operates and agrees to pay ail fees required by QBW in the enrollment process, which fees shall be non-refundable. 2. Procedures. Builder agrees to enroll its homes according to procedures established by QBW, Builder may enroll homes currently under construction and homes completed but not sold or occupied {as of the date of this Agreement or the date of reacceptance following a period of suspension or non-participation} provided that enrollment is made within 45 days of execution of this Agreement or reacceptance, and QBW has inspected and approved the home. When enrolling other than a detached single family dwelling, Builder shall enroll each individual unit of any multi- unit dwelling such as but not limited to duplexes, townhouses and condominiums. For each home enrolled, the Builder shall pay a warranty fee as determined by OBW within tho time periods estab- lished by OBW. All warranty fees are non-refundable. A minimum warranty fee of $100.00 shall apply. QBW will provide Builder with a copy of the Limited Warranty Agreement and Enrollment form. Builder and pur- chaser must complete, sign the Agreemant and Enrollment Form at cbsing, and Builder agrees to furnish QBW with a copy of the signed Enrollment form within ten (10} days of closing. Builder agrees not to charge the purchaser direct- ly the cost of the enrollment fee. A home will not be considered enrolled until aBW receives and approves the fully exe- cuted and completed Enrollment Form, payment of all fees, and an approved final inspection. 3. Reservation of Power of Review QBW reserves the right to reject any home submitted for enrollment in the program if (aj the Builder is not a member in good standing; (b) the home is net constructed in accordance with the Warranty Standards or building codes specified in the Limited Warranty Agreement; (c) the Builder did not observe the enroll- ment procedures; (d} misstates or misrepresents any information; {e) in any way fails to comply with the terms of this Agreement. 4. Assignment of Rights. If a purchaser files a Complaint pursuant to the Limited Warranty Agreement which the Builder fails to correct, the Builder hereby assigns to OBW ar its insurer, as the case may be, any rights which Builder may have against a supplier, manufacturer, subcontractor or other person for work performed or materials supplied in con- nection with that claim. Builder agrees to cooperate fully with QBW and to provide QBW with ail information which it requests pertaining to the claim. if Builder faits to so cooperate, Builder agrees to compensate and indemnify QBW for any damages sustained by such lack of cooperation . 5. Breach and Remedy. If Builder fails to enroll any eligible home as required by this Agreement, I.~BW may seek specif- ic enforcement or other appropriate relief in legal or equitable proceedings, even if this Agreement has been termi- nated. Furthermore, Builder agrees to indemnify and hold harmless QBW and its insurer for any losses or any dam- ages QBW may suffer as a result of Builder's breach of this Agreement and such losses and casts shall include reasonable attorney's fees and expert witness fees. R~11Ider hereby irrevocably authorizes and empowers any attorney or any court of record of Pennsylvania or else- where to appear for and confess judgment against Builder for all amounts for which Builder may become liable to C~BW - ~ I Exhibit "A" !or the breach of this Agreement, as evidenced by an affidavit signed by an officer of Q8W sett;ng forth the amount: then due, plus attorney's fees ;ncurred by QBW, with costs of suit and release of errors. Such authority shall not or exhausted by ary one exercise thereof but judgment may be confessed as aforesaid from time to time as often as there s a default. Remedies stated herein are elective and not exclusive and QBW may elect to proceed under this or any otha+ paragraph in this Agreement. 6. Suspension orTerminatlon. QBW may terminate, or at its option suspend, Builder's participation in Q8W's Warranty Program, or any entity or individua{ which Builder is affiliated, if QBW determines that Builder has done any of the fol- lowing, which shall be deemed a breach of this Agreement. (a} fails to comply fully with all provisions of this Agreement; (b) fails to perform any of its obligations under this Agreement, including, but not limited to, cooperating in the opera- tion of the program's informal dispute resolution and arbitration procedure; (c) fails to respond to QBW's notice of a homeowner's complaint; (d) fails to comply with a decision which is rendered pursuant to complaint procedures; (e} fails to provide adequate assurance to QBW within ten (10) days after it receives a written request from QBW for such assurance that (within a reasonable timetable established or approved by QBW) it is willing and able to coop- erate in dispute settlement and to perform the obligations under any decision which is rendered pursuant to such procedures; (f) fails to otherwise cooperate in the operation of the QBW Program in accordance with the rules and regulations of the Q8W Program; (g) faits to provide timely proof of compliance with this Agreement, as and when requested by QBW; (h) fails to comply with d8W Warranty Standards and building codes as stated in the Limited Warranty Agreement; (i) fails to comply with the enrollment procedures established by QBW; (j) fails to provide proof that enrolled homes have been subjected to required inspections; (k) fails to respond to purchaser complaints in a timely manner and as provided in the Limited Warranty Agreement; (I) fails to perform i#s obligations with professional competence or conduct its operations from a position of financial strength and stability; (m) fails to notify QBW within 30 days of a change in ownership, company name or company standing, financial con- dition, or of any other material fact which might affect Builder's ability to meet its obligations under this Agreement; (n) faits to meet ethical standards in its dealings with customers; or (o) misstates or misrepresents any information in connection with its application or in the rescreening process. QBW reserves the option to reinstate terminated affiliates of the primary, terminated Builder if 48W determines that the terminated Builder or its principals are not in a position to control the affll'iated 8uilde~ Termination of Builder by QBW shall not affect the rights or obligations of any of the parties to this Agreement with respect to the Warranty Program in effect at the date of termination, subject to the provisions pertaining to voidability. If a Builder is suspended or terminated, he shall not represent himself to be a member of the QBW Warranty Program nor offer the QBW Warranty and shall not use its Logo or refer to the program in any way nor attempt to enroll any home. The Builder shall immediately notify any Buyer currently under contract to purchase a home of the suspen- sion or termination and that the QBW Warranty Program has been withdrawn. Upon request, Builder shat! immediate- ly return to QBW all materials supplied by Q8W and all material making reference to QBW. Should Builder fail to take these steps, it shall indemnify and hold harmless QBW and the Insurer against any and at) expenses incurred and loss- es suffered, including but not limited to attorney fees, by either of them as a result. In addition, Builder shall pay inter- est to QBW at the rate of 18~o per annum on all sums due to QBW hereunder if such sums are not paid within 30 days of demand by QBW. Builder may terminate this Agreement upon 30 days advance written notice to QBW. If so terminated by Builder or by QBW, Builder's obligations under this Agreement shall continue as to those homes enrolled during the period in which this Agreement was in effect. 7. Notice. if QBW possesses a reasonable belief that reason exists to terminate or suspend a Builder for violation of this Agreement, C1BW may immediately terminate or suspend the Builder by providing it with written notice. If QBW elects to suspend the Builder, such suspension will remain in effect until Builder has cured alt defects to QBW's satisfaction, however, QBW reserves the right to terminate any suspended Builder. 8. Voldabllity. QBW reserves the right to void any enrollment if Builder misstates or misrepresents any information in its application or in the rescreening process or misstates ar misrepresents any information in the enrollment of a particu- lar home or fails to pay any fees due for enrollment of any particular home or fails to forward an enrollment form for a particular home within 10 days as required. SECTION C. BUILDER'S OBLIGATIONS: 1. Construction Obllgstilons. Following are the Builder's obligations with respect to QBW's Warranty Program; (a) Builder shall construct ail homes in conformity with the Warranty Standards provided in the Limited Warranty Agreement, and/ or in conformity with approved building codes and other standards established by QBW and in effect at the beginning of construction of the enrolled home. QBW reserves the rights to establish special require- ments for escrow payments or other means of protection with respect to any homes constructed by Builder which (QBW determines to be 'High Risks." ;r) B+~il~icr agrees Icy have all homes inspected, as required by QBW, and to pay all fees for the inspection and to pro- vide evidence of inspection as and when required by QBW. QBW shall provide inspectors or shall approve gov- ernmental inspectors. , (c) IJBW shall have the right to perform spot inspect;ons to ti-erfy Bui,der's compliance w;th th,s Agreement and Bui.dt agrees to cooperate. ~d) The 8ui;der agrees to indemnify and hold harmless OBbV and,or its Ensurer for any losses or damages QBW and, o its insurer may suffer as a result of the use of fire retardant treated plywood on any building enrolled under the QBL~ Ten Year Warranty Program. This will include all claims and (;ability for losses, damages and expenses which OBV~ andlor its Insurer may sustain, incur, pay or be liable for by means of any investigation settlement or litigation o sny claim or action which may be raised, made or brought due to the potential defects caused or likely to be caused by use of the subject plywood. (e) If the Builder is informed by QBW that it is building in an area designated as one with active soil conditions, the Builder agrees to obtain such soils investigations and reports as may be required by QBW. if such reports indicate a need for special foundation design the Builder agrees to construct the foundation according to the design of a registered professional engineer to take into account the conditions disclosed by the soil tests. 2. Warranty Obligation'. Builder agrees to perform all obligations arising from this Agreement and the Limited Warranty Agreement. The Builder shall at its own expense perform alt obligations as set forth in the C~BW Warranty Program and this Agreement which includes meeting the warranty standards upon notice from the Purchaser without the necessity of OBW intervention. If Builder fails or refuses to perform its obligations in accordance with the Limited Warranty Agreement, QBW will perform those obligations; however, Builder agrees to reimburse OBW and/or its insurer far ail expenses incurred in performing those obligations, including, but not limited to costs of materials, cost of collection, labor, architect's fees, engineering fees, and attorney's fees. G18W reserves all rights of subrogation. if the Builder repairs a major structural defect during yeas 1 or 2, QBW must be notified. Once notified, QBW will perform a compliance inspection. (18W agrees to perform its obligations pursuant to the Limited Warranty Agreement in years three through ten pro- vided that the defect that is the subject of the Purchaser's claim did not occur within the first two years and was not concealed or cosmetically or improperly repaired by the Builder during those two years. Builder is not responsible for any damage caused by a major structural defect, as defined in the Limited Warranty Agreement, occurring after the expiration of the first two years of the Limited Warranty Agreement provided the defect was not concealed or cosmetically or improperly repaired during those two years. QBW wilt hold the Builder harmless for the reasonable cost of repairing or replacing such defects, and against the payment of any money judgment, order or decrees made against Builder for the repair of the defect. 3. Builder is authorized to advertise its membership in the QBW Warranty Program and to use its Logo in its business, pro- vided that any reference to QBW or its insurer, whether contractual or advertising copy, be approved by OBW in writ- ing in advance of its use. SECTION D. fNFORMAL DISPUTE PROCEDURE: 1. Builder should be aware that the Limited Warranty Agreement provides for an informal dispute settlement and arbitra- tion procedure to resolve complaints by purchasers under the Limited Warranty Agreement. Builder should become familiar with the settlement procedures in order to be aware of its rights and responsibilities. Builder agrees to coop- erate fully in the procedure and to be bound by and to comply with any decision of an independent third parry, or arbi- trator. If the Builder fails to perform its obligations hereunder in a timely and good and workmanlike manners such fail- ure shall be considered to be a refusal to perform governed by paragraph C.2 hereof. 2. The Builder agrees to pay all fees charged in connection with the informal dispute settlement and arbitration proce- dures. SECTION E. TERMS GOVERNiNQ OPERATION AND INTERPRETATION: 1. Builder agrees to perform its obligations under this Agreement in a timely manner. However, time provided for perfor- mance of obligations hereunder shall be extended by events not subject to control by the person obligated to perform. Such events include acts of God or the public enemy, or, riot, civil commotion or governmental conduct. 2. Descriptive headings as to the contents of particular provisions of this Agreement are intended for convenience only and are not to be considered in construing this instrument. 3. This Agreement shall not constitute or be considered an agency, employer-employee relationship, joint venture or part- nership beriveen the parties. None of the parties, nor any of their employees or agents, shall have the authority to bind or obligate the other party except as provided by this Agreement. 4. Should any provisions of this Agreement be determined by a court of competent jurisdiction to be unenforceable, that defermination will not affect the validity of the remaining provisions. 5. This Agreement shall be interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania. All suits instituted under this Agreement shall be brought in Pennsylvania in a court of competent jurisdiction. Builder hereby consents to the personal jurisdiction of the Pennsylvania courts. Far Builders who are licensed in the state of New Jersey, note that this agreement shall be interpreted and enforced in accordance with the laws of New Jersey; for all homes enrolled with an address in New Jersey. 6. Builder shall not assign this Agreement without the prior written consent of QBW. 7. This A~~ieement shall insure to the benefit of and be binding upon the heirs, executors, administrators, assignee, and successors of the representative parties. 8. This instrument, and security documents and documents referred to or incorporated herein by reference, contains th entire agreement beriveen the parties, and no statement, premises, or inducements made by either party or agent c wither party that is not contained in this written contract shall be valid or binding; and this contract may not be enlarges modified, or altered except in writing signed by the parties and endorsed hereon. 9. Failure of either party to insist upon compliance with any prevision of this Agreement shall not const~t~te a waiver of the provision. 10. Ai'. notices required hereunder must be in writing and sent by certified mail, postage prepaid, return receipt requast ed, to the recipient at the respective address shown below, or to whatever address the party may designate in writing 11. The effective date of this Agreemertt~hall be the date of execution by QBW. C1UA~fT1~'Q~'p ~ 1N'A l~ANTY CORPORATION ~/ ' ~ .~ ey ! ~ ~~ j ~~ ~'%i i~ ''~, `- !.~-0a6e~b-Itl O/she/skl, Pres/dsnt ~., Date of execution by LBW: June 2 1995 8uiider's Registration No.: 60093 euicoER; John Kavanagh Company (Name of Bulider -please print or type) DATE By June 7, 1995 of Authorized Representative -Title) (Please print name/dtle of executor) P.O. Hox 9415, Greensboro, NC 27408 (Address) Copyright 1988 Ouallty Builders Warranty Corporation CRW Fl'RM 05~ 3/95 i«1 a«~~,F~PAPtR helas;amen! '1ia sddano'ift. is CatwrN CuaiLty tualdata ltafYarfy C.arparat_en iCa~l .:++d ;61M [aYWa(.M Cpl}1TIY =pt.rsad CD is °Du3ldai~. eu3idal s • aaauleT :n :r• pall le :e•r ;,;susw Vaasscy vrotrat. C!M sn6 iulldls :aa::t =s to01Lr tct i4:~rteoft .~rtd t::tae :eaote:.v.:-tats and aa114•tacst exsrauffaal. aw.. Ytto>?Oa't. Cer a++r auald.c. in t:aG`~an4. fet' the nuisol ~V.ainta :.attalAa4 RttC:t1 snd frst.euaan4 Ca 9a ls4allr b.rAl !ssaatr a4ro.:.s to=:srs: 1. ^.II. atle4t tas>•tals ast oa =ttage.l pass of tn3a aae~ea+due std ssa .nWr7er3tC7d htr.an. .. Wildts :l+sll eaie[zip =t3 atettaaip lA Q3Y'a L1ia3ttd YatraniY sraP.'a'~ .a: is at:dieattal pasitd tt testa :]1 y.its ee upon tlu ht3aw dew sad tuat3.e for aare-ileul-e 1p=et vn:aA aulldtx cansettteta durspy cpae t3tt. lu:idv aay noe :tcesr+ses esa ;ar.:aiprciet- fn eaa 0llf ssegrae wathia t]lae i.esed valtsa eaaaonend ea br OaM. ]. enildtt ae.11 Wr in sznual aatrbalsaup !«. a. auiL2et•c rata will 5e st.se otr ebenaaaa. ~t :aet roll ntnln to itftas tas tat aaeted e1 truer iddntri.~. S. u sa tle u.taewatea aYtt11 of a tSt+r jr~--_•~. eauerd by G.Raalacion. 7i a~.tuatima b•r011d t1M pagltel a< QW. E4i~./tf ~ C.'st tigoyC LO C.re3AiC0 palt2Cpaeioll with fro pta•itiM<t. C. Mti1Mt arrats to .astll all hawe oaastswaeui b7f tear, er any it:il:ltY. in tilt 9att Otte}=M. 21 Wt!/tl of Y-y ili~lia2t 1i1:~ to .Of.21 ill netrs. sol the ttsa tositi.d it- }7 sarw, sitaid.t aVSttr to par 4fY the dattelta6t Mirtrn hsa gwlitiad raet, hastd to aocttal voiiw and sht diaesouoeat eater aptaatiad in a4 asaaw tee all tetra .erell.A durur} shier agstttre-e_ }syeent sw^ as paatl rithaat ]1 dttra .! diaetway sf b=taaa .. aualdtra etetlacurt ttsatifatato Oi tsia i4lltaeet. 7. I! the ttesae soetsifrad in eAia iddtlagtfe era sfseeeslst~nt vlth tlla R! `.atr Agseteeltt. tht tas~a of this iddaeldts, shsil yoVtra. '.~1 YISMq 1fN~r, tW parLi~rR ~tt'si0 11tvs Citlitd tstis 3ddtrdray to bt srt~ouetd b- tsati duly aucltoeis+ad atlltw«t. as er Lett 4th day at Ft^~ t!!/. C4~H.i'l1f ~iLOilla 11ALIIillt7 C'31•!. .Y• .~.~. htis Jfc u .a~'~ JpN.s~WaNadll COaflilrff tl: d The term of the Addmdu~m is e>rtmded for an additional tht~ee (3) Yews and will renew for like teems bless thirty (30} diyai prior to the expiratino of Ibis term or any extensions either party providers the other thirty (30} days advan~oe wrtt#e~ notice that thry ituettd not to extend the period entitling the builder to a lower rste. If Builder provides noticx, QBW will adjust dte Huiider's tote upward effective at the end. of the: then current tem. QUA[.tTY BUILDZr~S WARR.~NTY CORPOi2ATION BY~ i~ n r," IOi~Y ICAVANAGH COMPANY ~~ . ~-_ ;.,~- ( ,: v Exb3bit "B" TOThL F . +_ t accr¢eo rnrca aECCUaic QUALITY BUILDERS WARRANTY CORPORATION THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY PENNSYLVANIA Plaintiff vs. DOCKET NO. 5153-07 JOHN KAVANAGH COMPANY :CIVIL ACTION -LAW Defendant - NOTICE OF ORAL DEPOSITION DUCES TECUM TO: John Kavanagh Company, Defendant C/O Hubert X. Gilroy, Esquire, Martson Deardorff Williams Otto Gilroy and Faller 10 East High Street Carlisle, PA 17013 PLEASE TAKE NOTICE that the Plaintiff in the above-captioned matter, by and though his attorney, John A. Gill, Esquire, will take the deposition of the Defendant, John Kavanagh Company, upon examination in accordance with Pa. R.C.P 4007.1. The deposition will be taken before a person authorized to render an oath at the office of John A. Gill, Esquire, 325 North Second Street, Wormleysburg, PA 17043 on July 10, 2008 at 10:00 a.m. In accordance with Pa R.C.P. 4007.1(e), the Defendant is to designate one or more officers, directors or managing agents, etc., to answer questions concerning the matter set forth in the Defendant's Answer With New Matter and Amended Counter Claim to Plaintiff's Complaint and Defendant's Reply to Plaintiff's New Matter, as well as testimony concerning all oral alleged agreements entered into between Defendant and Plaintiff concerning the enrollment of homes as alleged by Defendant. The above-named designated representative(s) is requested to appear at the aforementioned time and place and submit to examination under path. The Deponent is to bring with him all documents in support of the allegation in Defendant's Answer Containing New Matter and Amended Counter Claim and Defendant's Reply to Plaintiffs New Matter. Respectfully submitted, DATE: ~ /~ D`~ ohn .Gill, Esquire 325 North Second Street Wormleysburg, PA 17043 (717) 737-7522 # 41532 Attorney for Quality Builders Warranty Corporation CERTIFICATE OF SERVICE I HEREBY CERTIFY that I served a copy of the Notice of Oral Deposition Duces Tecum, was sent via U.S. Mail, first class postage prepaid, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure, addressed as follows: Hubert X. Gilroy, Esquire Martsons Deazdorff Williams Otto Gilroy & Faller 10 East High Street Cazlisle, PA 17013 Date ~ ~'~ ~' reg rrison, Secretary VERIFICATION Hubert X. Gilroy, Esquire, of the firm of MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER, attorneys for Defendant John Kavanagh Company in the within action, certifies that the statements made in the foregoing Defendant's Motion for Protective Order are true and correct to the best of his knowledge, information and belief, based upon information provided by John Kavanagh Company. He understands that false statements herein are made subject to the penalties of 18 Pa. C.S. Section § 4904 relating to unsworn falsification to authorities. John Kavanagh, President of John Kavanagh Company resides outside the Commonwealth of Pennsylvania and his signature could not be obtained within the time allowed for filing Defendant's Motion for Protective Order. Hubert .Gilroy, Esquire CERTIFICATE OF SERVICE I, Melissa A. Scholly, an authorized agent for Martson Deardorff Williams Otto Gilroy & Faller, hereby certify that a copy of the foregoing Motion for Protective Order was served this date by depositing same in the Post Office at Carlisle, PA, first class mail, postage prepaid, addressed as follows: John A. Gill, Esquire Quality Builders Warranty Corporation 325 North Second Street Wormleysburg, PA 17843 MARTSON LAW OFFICES By (~ Melissa A. Scholly Ten East High Street Carlisle, PA 17013 (717)243-3341 Dated: June 26, 2008 ~~ ~ c-. <--~ ., ~ ' `' `- ~~_ ~" ' ~' _ _. ~, ... yt. ~? ~ I ~_. _V~ r _ ... ~, .r'` _~_ t3~ - 1 1 t f. ~.{ ' ~ t . / y:Y ` ~~ w.r ~. F:~FILEJ\Climrs\12772 Kavaoagh\12772.1.mot.protective.order.wpd Created: 9/20/04 0:06PM Revised: 6/26/08 10:59AM Hubert X. Gilroy, Esquire I.D. No. 29943 Trudy E. Fehlinger, Esquire LD. No. 202753 MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER MARTSON LAW OFFICES 10 East High Street Carlisle, Pa 17013 (717) 243-3341 Attorneys for Defendant John Kavanagh Company QUALITY BUILDERS WARRANTY CORPORATION, Plaintiff vs. JOHN KAVANAGH COMPANY, Defendant :iuN s o ~ooa~ IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA N0.5153-07 CIVIL ACTION -LAW ORDER AND NOW, this ~ day of , 2008, upon consideration of Defendant John Kavanagh Company's Motion for Protective Order, and any response by Plaintiff thereto, Defendant's Motion for Protective Order is temporarily GRANTED. Plaintiff may not proceed with taking the deposition of any corporate representatives of John Kavanagh Company pending a conference i~ C-~s with counsel on the day of ~ris~i~, 2008, ate%~o'clock a.m./p.m. ..~ Cam- -~ y. U BY THE COURT: .~ Kevin .Hess, J. ~. v b a.~- •S ,~ °4 '~ ~~ ~~.~ ~.. ~,~ Hubert X. Gilroy, Esquire I.D. No. 29943 Trudy E. Fehlinger, Esquire I.D. No. 202753 MARTSON DEARDORFF WILLIAMS OTTO GILROY & FALLER MARTSON LAW OFFICES 10 East High Street Carlisle, Pa 17013 (717) 243-3341 Attorneys for Defendant John Kavanagh Company QUALITY BUILDERS IN THE COURT OF COMMON PLEAS OF WARRANTY CORPORATION, CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff vs. N0.5153-07 JOHN KAVANAGH COMPANY, CIVIL ACTION -LAW Defendant ORDER OF COURT AND NOW, this (p ` day of August, 2008, it being related to the Court that the parties have settled the above case, the discovery conference scheduled in this matter for Thursday, August 7, 2008, is cancelled. BY THE COURT: Kevin .Hess, Judge cc: ,,,ifhn .Gill, Esquire ert X. Gilroy, Esquire 1r F:\F[LES\ClientsU2772 KavanaghV2772.1.OrderOfCourt ~' ~"-~ ,~ ~~a ~ ~ ~~ ~~ r - ;~~ ~ ! X~ u ~ ,~ 'G1 CL C ~ IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA QUALITY BUILDERS WA~ZRA.NTY CORPORATION, Plaintiff v. JOHN KAVANAGH COMPANY Defendant PRAECIPE To The Prothonotary : CNIL ACTION DOCKET N0.5153-07 Please mark the above captioned action as "settled, discontinued and forever ended with prejudice." John .Gill, Esquire Attorney for Plaintiff, Counter Claim, Defendant Quality Builders Warranty Corporation 325 North Second Street Wormleysburg, PA 17043 (717) 737-2522 #41532 rt X Gilroy, Esquire Attorney for Defendant, Counter Claim, Plaintiff John Kavanagh Company Martson Deazdorff Williams Otto Gilroy & Faller 10 East High Street Carlisle, PA 17013 #29943 G.:.Y ~' '" ~3 _ ~' Ufa `~~~ r= `] i i ~( ..,•f ~.w ~ C...: ~~..~ <a..7 °'~