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HomeMy WebLinkAbout03-5997ORRSTOWN BANK Plaintiff JOSEPH D. KLOZA and WANDA M. CRAWFORD KLOZA, husband and wife, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA oo3- 3-q , NO. CIVIL ACTION-LAW PRAECIPE FOR WRIT OF SUMMONS TO THE PROTHONOTARY: Please issue a Writ of Summons in the above-referenced case on behalf of the Plaintiff, Orrstown Bmzk, to the Defendants, Joseph D. Kloza and Wanda M. Crawford Kloza. O' "PdEN,SC} E Date: November 14,2003 ~~/]~r ~//~ David A. Baric, Esquire I.D. # 44853 17 West South Street Carlisle, Pennsylvania 17013 (717) 249-6873 Attomey for Plaintiff Please serve the Defendants as follows: Joseph D. Kloza and Wanda M. Crawford Kloza 250 Big Spring Road Newville, Pennsylvania 17241 Commonwealth of Pennsylvania County of Cumberland WRIT OF SUMMONS ORRSTOWN BANK Plaintiff Vs. JOSEPH D. KLOZA AND WANDA M. CRAWFORD KLOZA 250 BIG SPRING ROAD NEWV1LLE, PA 17241 Defendant Court of Common Pleas No, 03-5997 CIVIL TERM In CivilAction-Law To JOSEPH D. KLOZA AND WANDA M. CRAWFORD KLOZA, You are hereby notified that ORRSTOWN BANK, the Plaintiffhas / have commenced an action in Civil Action-Law against you which you are required to defend or a default judgment may be entered against you. (SEAL) Date NOVEMBER 14, 2003 CURTIS R. LONG Prothonotary Deputy Attorney: Name: DAVID A. BARIC, ESQUIRE Address: O'BRIEN, BARIC & SCHERER 17 WEST SOUTH STREET CARLISLE, PA 17013 Attorney for: Plaintiff Telephone: 717-249~6873 Supreme Court ID No. 44853 SHERIFF'S RETURN CASE NO: 2003-05997 P COMMONTWEALTH OF PENNSYLVANIA COUNTY OF CUMBERLAND - NOT FOUND ORRSTOWN BANK VS KLOZA JOSEPH D ET AL R. Thomas Kline duly sworn according to law, inquiry for the within named DEFENDANT KLOZA JOSEPH D unable to locate Him WRIT OF SUMMONS ,Sheriff or Deputy Sheriff, who being says, that he made a diligent search and in his bailiwick. but was He therefore returns the the within named DEFENDANT , KLOZA JOSEPH D 250 BIG SPRING ROAD NEWVILLE, PA 17241 PER POST OFFICE, DEFENDANT MOVED AND LEFT NO FORWARDING ADDRESS. , NOT FOUND , as to Sheriff's Costs: Docketing Service Affidavit Surcharge 18 00 8 28 5 00 10 00 00 41 28 So answer~.r~~ j~.~ _....~-~~ ,/ R. Thomas Kline Sheriff of Cumberland County OBRIEN BARIC SCHERER / 9/2003 Sworn and subscribed to before me this day of Prothonotary SHERIFF'S RETURN - CASE NO: 2003-05997 P COMMONTWEALTH OF PENNSYLVANIA COUNTY OF CUMBERLAND NOT FOUND ORRSTOWN BANK VS KLOZA JOSEPH D ET AL R. Thomas Kline duly sworn according inquiry for the within named DEFENDANT KLOZA WANDA M CRAWFORD unable to locate Her in his bailiwick. ,Sheriff or Deputy Sheriff, who being to law, says, that he made a diligent search and but was He therefore returns the WRIT OF SUMMONS the within named DEFENDANT 250 BIG SPRING ROAD NEWVILLE, PA 17241 , NOT FOUND , KLOZA WANDA M CRAWFORD PER POST OFFICE, DEFENDANT MOVED AND LEFT NO FORWARDING ADDRESS. Sheriff's Costs: Docketing 6.00 Service .00 Not Found 5.00 Surcharge 10.00 .00 21.00 So answer-s~-~-c~ .~'-~_ /~ / R. Thomas Kt/T~ .... Sheriff of Cumberland County OBRIEN BARIC 11/19/2003 Sworn and subscribed to before me this day of as to A.D. SCHERER Prothonotary ORRSTOWN BANK, : Plaintiff : V. JOSEPH D. KLOZA and WANDA M. CRAWFORD KLOZA,: husband and wife, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 2003-5997 CIVIL TERM CIVIL ACTION-LAW PRAECIPE TO REINSTATE TO THE PROTHONOTARY: Please reinstate the Writ of Summons previously issued in this matter. Date: Respectfully submitted, OqttRIEN, BARIC & SCHLr~ David A. Baric, Esquire I.D. 44853 17 West South Street Carlisle, Pennsylvania 17013 (717) 249-6873 dab.dir/or rstown/Idoza/reinst ate.pta SHERIFF'S RETURN - REGULAR CASE NO: 2003-05997 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND ORRSTOWN BANK VS KLOZA JOSEPH D ET AL JODY SMITH , Sheriff or Deputy Sheriff of Cumberland County, Pennsylvania, who being duly sworn according says, the within WRIT OF SUMMONS KLOZA JOSEPH D DEFENDANT at 1210:00 HOURS, on the was served upon the 9th day of January , __ at CARLISLE, PA 17013 JOSEPH KLOZA a true and attested copy of CUMBERLJ~ND CO SHERIFF'S OFFICE ONE COURTHOUSE SQUARE by handing to WRIT OF SUMMONS together with to law, 2004 and at the same time directing His attention to the contents thereof. Sheriff's Costs: Docketing Service Affidavit Surcharge 18 00 00 00 10 00 00 28 00 Sworn and Subscribed to before me this J/~ day of J~ A.D. /P~othonotary ' ~ So Answers: R. Thomas Kline 01/14/2004 OBRIEN BARIC SCHERER Deputy Sheriff SHERIFF'S RETURN - CASE NO: 2003-05997 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND ORRSTOWN BANK VS KLOZA JOSEPH D ET AL REGULAR JODY SMITH , Cumberland County, Pennsylvania, Sheriff or Deputy Sheriff of who being duly sworn according to law, was served upon the on the 14th day of January 2004 says, the within WRIT OF SUMMONS KLOZA W~NDA M CP~AWFORD DEFENDANT at 1016:00 HOURS, at CUMBERLAND CO SHERIFF'S OFFICE ONE COURTHOUSE SQUARE CARLISLE, PA 17013 by handing to WANDA CP~AWFORD KLOZA a true and attested copy of WRIT OF SUMMONS together with and at the same time directing Her attention to the contents thereof. Sheriff's Costs: So Answers: Docketing 6 . 00 . .~ ~,~? ~,.-~.~ Service .00 .... -~' ', ~'"' ~''' Affidavit .00 Surcharge 10.00 R. Thomas Kline .00 16.00 01/14/2004 OBRIEN BARIC SCHERER Sworn and Subscribed to before me this j/~ day of ~_..~ -~ ~ }z A.D. ! ~rothonotary By: Sheriff ORRSTOWN BANK, Plaintiff JOSEPH D. KLOZA and WANDA M. CRAWFORD KLOZA husband and wife, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 2003-5997 CIVIL TERM CIVIL ACTION-LAW NOTICE You have been sued in court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this complaint and notice are served, by entering a written appearance personally or by an 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 fall 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. 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, Pennsylvania 17013 (717) 249-3166 ORRSTOWN BANK, Plaintiff JOSEPH D. KLOZA and WANDA M. CRAWFORD KLOZA husband and wife, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 2003-5997 CIVIL TERM CIVIL ACTION-LAW COMPLAINT NOW, comes Plaintiff, Orrstown Bank, by and through its attorneys, O'BRIEN, BARIC & SCHERER, and files the within Complaint and, in support thereof, sets forth the following: 1. Plaintiff is Orrstown Bank, a Pennsylvania corporation, with its principal place of business located at 77 East King Street, Shippensburg, Cumberland County, Pennsylvania. 2. Defendant, Joseph D. Kloza, is an adult individual who resides in Cumberland County, Pennsylvania. 3. Defendant, Wanda M. Crawford Kloza, is an adult individual who resides in Cumberland County, Peunsylvania. 4. Upon information and belief, Joseph D. Kloza and Wanda M. Crawford Kloza have been, all relevant times, the owners and operators of a certain business known as British Networks Ltd. 5. British Networks Ltd. was in the business of providing travel services such as, but not limited to, the sale of travel packages to individuals. 6. On or about May 26, 1999, Joseph D. Kloza and Wanda M. Crawford Kloza executed a Signature Card Agreement with Orrstown Bank establishing a regular checking account in the name of British Networks Ltd. A true and correct copy of the Signature Card Agreement for this account is attached hereto as Exhibit "A" and is incorporated. 7. On or about June 28, ! 999, Joseph D. Kloza executed an Electronic Point of Sale Merchant Agreement ("Point of Sale Agreement") with Orrstown Bank for the "merchant" known as British Network Ltd. A true and correct copy of the Electronic Point of Sale Merchant Agreement is attached hereto as Exhibit "B" and is incorporated by reference. 8. Pursuant to the Electronic Point of Sale Merchant Agreement, Orrstown Bank would process Visa ® and MasterCard® charges from customers of British Network. Further, Orrstown Bank agreed to provide a credit to British Network equal to the total of the charges placed by customers of British Network who used these credit cards. These credits were placed into the British Network Ltd regular checking account referenced above. 9. The Point of Sale Agreement provided for charge backs by customers of British Network. In particular, any charge backs by customers of British Network were to be handled as fo/lows: "5. Adjustments and Returns .... In the event that goods are returned, or any services are terminated or cancelled, or any price adjustments on a Transaction are allowed by Merchant, the Merchant will prepare and transmit through the electronic terminal a credit (or return) Transaction for the amount of the adjustment as a deduction from the total amount of sales drafts transmitted that day. In the event that the amount of the credit (or return) Transactions exceed the amount of the sales drafts transmitted, Bank shall charge the Merchant's account at the Bank for the amount by which the credit Transactions exceed the total amount of the sales drafts transmitted that banking day." 10. The Signature Card Agreement provided, in relevant part, as follows: Liability- Each of you agrees, for yourself (and the person or entity you represent if you sign as a representative of another) to the terms of this account and the schedule of charges that may be imposed. You authorize us to deduct these charges as accrued directly from the account balance. You also agree to pay additional reasonable charges we may impose for services you request which are not contemplated by this agreement. Each of you also agrees to be jointly and severally liable for any account deficit resulting from charges or overdrafts, whether caused by you or another authorized to withdraw from this account, and the costs we incur to collect the deficit including to the extent permitted by law, our reasonable attorney's fees. 11. The Defendants used and employed the benefits of the Point of Sale Merchant Agreement including, but not limited to, withdrawing funds for credit card transactions. 12. No reserve was established by Defendants for charge backs which may occur under the Point of Sale Merchant Agreement plan. 13. During the period December 3, 2001 through April 12, 2002, twenty-five (25) transactions were charged back to Orrstown Bank on Defendants' Point of Sale Merchant Agreement for a total dollar amount of $12,488.12. 14. During the same period, six (6) service fees were levied against Orrstown Bank on Defendants' Point of Sale Merchant Agreement for a total cost of $221.00. 15. Orrstown Bank has incurred costs and expenses of $3,413.95 through the date of this complaint regarding attempt to recover the amount due from Defendants pursuant to the Point of Sale Merchant Agreement and the Signature Card Agreement. 16. The Signature Card Agreement permits the recovery of attorney fees by Orrstown Bank. COUNT I-BREACH OF CONTRACT ORRSTOWN BANK v. JOSEPH D. KLOZA and WANDA M. CRAWFORD KLOZA 17. Plaintiff incorporates by reference paragraphs one through sixteen as though set forth at length. 18. Joseph D. Kloza and Wanda M. Crawford Kloza agreed to pay any deficit resulting from charges or overdrafts to the regular checking account. 19. Charges and overdrafts in said account total $13,758.84. 20. Demand has been made upon Defendants to pay this amount. 21. Defendants have failed and refused to pay this amount to Orrstown Bank. 22. Defendants have breached the terms of the Signature Card Agreement. 23. As a direct and proximate result of Defendants' breach of the Signature Card Agreement, Orrstown Bank has incurred the following damages: a) b) c) charged back items $13,537.84 service charges $ 221.00 expenses incurred in recovery $ 3,413.95 TOTAL: $17,172.79 24. Orrstown Bank has, and will continue, to incur attorney fees in its efforts to collect the deficit from Defendants. The Signature Card Agreement provides for the recovery of attorney fees paid by Orrstown Bank in the collection of the deficit. WHEREFORE, Plaintiff requests judgment in its favor and against Defendants for the stun of $17,172.79 plus costs, expenses, interest and attorney fees all in an amount not in excess of the limits requiring compulsory arbitration. COUNT II-QUANTUM MERUIT ORRSTOWN BANK v. JOSEPH D. KLOZA and WANDA M. CRAWFORD KLOZA 25. Plaintiff incorporates by reference paragraphs one t~ough twenty-four as though set forth at length. 26. Defendants did have, use and enjoy the benefit of the credits provided by Orrstown Bank to the Business Checking Account. 27. Defendants failed to provide the services and goods for which payments were made by customers of British Network Ltd. in credit card transactions which were credited by Orrstown Bank to the Business Checking Account. 28. Defendants have failed and refused to refund to Orrstown Bank the amount necessary to pay the charge backs against the Business Checking Account. Defendants have been unjustly enriched by retaining the funds to which they were 29. not entitled. WHEREFORE, Plaintiff requests judgment in its favor and against Defendants for the sum of $13,758.84 plus interest, costs and expenses. Respectfully submitted, David A. Baric, Esquire ID#44853 17 West South Street Carlisle, PA 17013 (717) 249-6873 Attorney for Plaintiff dab.dir/orrstownbank/kloza/complaint2.pld 03/03/2004 15:04 7172495755 OBS PAGE 0! Thc statements in the foregoing Complaint arc based upon ini'ormation which has been assembled by my attorney in this liQgation. The language of the statements is not my own. I have read the statements; and to the extent that they are based upon information which I have given to my counsel, they arc true and correct to the best of my knowledge, information and belief. I understand that false statements herein are made subject to the l~naiti~s of 15 Pa.C.S. § 4904 relating to unsworn falsifications to authorities. Vice Pre~idant -~'~' S. ~aver OPENED __~ BY British N~twork LTD 112 W. High Street Carlisle, PA 17013 (4) Please add f~ ~+ 24975995 to cogent sc~een~ *~ TELa ACCOUNT [~EXLST[NG r~BUS~NES$ L~.~qNGS r~Now [] JOSEPH KLOZA WANDA CIL~.~f~OPJ) gLOZA 250 BIG SPRING ROAD ffEWVILLE, PA 17241 (4) EXHIBIT "A" 0 O ELECTRONIC POINT OF. SA. LE IV~ERCHANT TJH~ A{2 I~EE~,I E~'r b~t,vc~ ............. O..r..r. ,8..t ;. p..~.,,. B. p.p. k .................... ~ .............. . · ~,~ ~ o, ,~ d,iL'd2~ 4~',~'~ ..................................................... (h~n~¢rco~m~'~k')~ad .B..~..l..~..s.h..N.e~ork~ ~.~. EXHIBIT "B" CERTIFICATE OF SERVICE I hereby certify that on March 11, 2004, I, David A. Baric, Esquire of O'Brien, Baric & Scherer, did serve a copy of the Complaint, by first class U.S. mail, postage prepaid, to the parties listed below, as follows: Joseph D. Kloza 162 D Street Carlisle, Pennsylvania 17013 Wanda Crawford Kloza 162 D Street Carlisle, Pennsylvania 17013 David A. Baric, Esquire ORRSTOWN BANK, Plaintiff JOSEPH D. KLOZA and WANDA M. CRAWFORD KLOZA husband and wife, Defendants : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : NO.: 2003-5997 CWIL TERM : : CIVIL ACTION- LAW DEFENDANTS' PRELIMINARY OBIECTIONS RAISING LEGAL INSUFFICIENCY OF PLAINTIFF'S COMPLAINT AGAINST DEFENDANTS AS INDIVIDUALS Defendants, Joseph D. Kloza and Wanda M. Crawford Kloza, by their undersigned counsel, preliminarily object to Plaintiff's Complaint pursuant to Pa.ILC~P. 1028 as follows: W1TNESSETH, it is the contention of Defendants that Plaintiff's Complaint does not set fomh a claim or cause of action, which, if proved, would entitle the Plaintiff to the relief Plaintiff has SOU~lt. 1. Plaintiff, Orrstown Bank, filed the Complaint in this nmtter on March 11, 2004. A tree and correct copy of the Complaint is attached as Exhibk "A'. 2. Plaintiff's Complaint alleges, in summary, that the Defendants entered into one or more contracts with the Plaintiff and Defendants ultimately breached those contracts. 3. Plaintiff avers that Defendants executed a Signature C, ard Agreement establishing a checking account in the name of British Networks Ltd. A tree and correct copy of the Signature Card Agreement is attached as Exhibit A to Plaintiff's Complaint. 4. Plaintiff avers that Defendants executed an Electronic Point of Sale Merchant Agreement ("Point of Sale Agreement") with Plaintiff for the "merchant' l~aown as British Network Ltd. A true and correct copy of the Point of Sale Agreement is attached as Exhibk B to Plaintiff's Complaint. 5. In the Complaint, Plaintiff refers to British Network Ltd. as British Networks Ltd. 6. The proper name is British Network Ltd., not British Networks. 7. Plaintiff has acknowledged that British Network Ltd., al: all relevant times, was a business. 8. Plaintiff failed to acknowledge that British Network Ltd. is and was a corporation at all relevant times. 9. British Network Ltd. is a corporation organized under the General Corporation Law of Delaware. A true and correct copy of the Certificate of Incorporation of British Network Ltd. is attached as Exhibit "B'. 10. British Network Ltd. is registered as a Foreign Business Corporation in the Commonwealth of Pennsylvania. A true and correct copy of the Application for CerthCicate of Authority bearing the entity number of British Network Ltd. is attached as Exhibit "C'. 11. Defendants, Joseph and Wanda Kloza, at all relevant times, were officers and directors of British Network Ltd., a corporation. 12. The parties to the Point of Sale Agreemem and the Signature Card Agreement were Orrstown Bank and British Network Ltd. 13. The Signature Card Agreement was executed to establish a business banking relationship between Orrstown Bank and British Network Ltd. 14. Plaintiff and British Network Ltd. operated the acco~ant that was opened pursuant to the Signature Card Agreement as a business account. A true and correct copy of the first page of the December 1999 Regular Business Account Statement of British iNetwork Ltd. is attached as Exhibit 15. Joseph and Wanda Kloza opened a separate banking account with Orrstown Bank that was established for personal banking purposes. 16. The Point of Sale Agreement was executed to allow Orrstown Bank to process credit card charges from customers of British Network Ltd. 17. The Signature Card Agreement was signed by Joseph Kloza and Wanda Kloza as authorized signatories for British Network Ltd. 18. The Point of Sale Agreement was executed by Joseph Kloza as President of British Network Ltd. 19. The Point of Sale Agreement and the Signature Card.~.greement were not executed by Joseph Kloza and Wanda Kloza as individuals. 20. It was the intention of Orrstown to hold the Defen&mts personally liable pursuant to a personal guaranty contained in a Merchant Agreement that was presented to Joseph Kloza by Plaintiff. A true and correct copy of the proposed Merchant Agreement containing a personal guaranty that was presented to Joseph Kloza is attached as Exhibit "E'. 21. Defendants refused to sign the Merchant Agreement containing the personal guaranty. 22. Plaintiff has not presented a personal guaranty signed by Defendants that would make Defendants liable as individuals for the debts that have been clain~ed by Plaintiff. 23. Pennsylvania law is clear that an individual defendant is not persona~y liable for the debts of a corporation. Electron Energy Corp. v. Short, 597 A.2d 175 (Pa. Super. 1991). 24. Plaintiff has failed to list British Network Ltd. as a defendant. 25. Plaintiff has failed to present facts necessary to establish that Defendants are liable as individuals for the debt of British Network, Ltd., a corporation. WHEREFORE, Defendants respectfully request this Court to grant their preliminary objections byway of demurrer and dismiss all counts of Plaintiff complaint as to Joseph Kloza and Wanda Kloza as individuals. Respectfully submi~xed, ABOM & KUTULA~S, LLP MichaelT. , q ' ~ 36 S. Hanover Stree~ Carlisle, PA 17013 (717) 249-0900 ID No. 90961 VERIFICATION I hereby verify that the statements contained in these Preliminaxy Objections are true and correct to the best of my knowledge, information, and belief. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S. $ 4904, relating to unswom falsification to authorities. Date ORRSTOWN BANK, Plaintiff JOSEPH D. KLOZA and WANDA M. CRAWFORD KLOZA: husband and wife, : Defendants : IN THE COURT 0F COIVlMON PLEAS OF CUIvlBERLAND COUNTY, PENNSYLVANIA NO. 2003-5997 CIVIL TERM CIVIL ACTION-LAW NOTICE You have been sued in court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this complaint and notice are served, by entering a written appearance personally or by an attorney and filing in writing with the cottrt, your defenses or objections to the claims set forth against you. You are warned that if you tail 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. 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, Pennsylvania 17013 (717) 249-3166 ORRSTOWN BANK, Plaintiff JOSEPH D. KLOZA and : WANDA M. CRAWFORD KLOZA: husband and wife, : Defendants : 1N THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 2003-5997 CIVIL TERM CIVIL ACTION-LAW COMPLAINT NOW, comes Plaintiff, Orrstown Bank, by and through, its attorneys, O'BRIEN, BARIC & SCHERER, and files the within Complaint and, in support thereof, sets forth the following: 1. Plaintiff is Orrstown Bank, a Pennsylvania corporation, with its principal place of business located at 77 East King Street, Shippensburg, Cumberland County, Pennsylvania. 2. Defendant, Joseph D. Kloza, is an adult individual who resides in Cumberland County, Pennsylvania. 3. Defendant, Wanda M. Crawford Kloza, is an adult individual who resides in Cumberland County, Pennsylvania. 4. Upon information and belief, Joseph D. Kloza and Wanda M. Crawford Kloza have been, all relevant times, the owners and operators of a certain business known as British Networks Ltd. 5. British Networks Ltd. was in the business of providing travel services such as, but not limited to, the sale of travel packages to individuals. 6. On or about May 26, 1999, Joseph D. Kloza and Wanda M. Crawford Kloza executed a Signature Card Agreement with Orrstown Bank establishing a regular checking account in the name of British Networks Ltd. A true and correct copy of the Signature Card Agreement for this account is attached hereto as Exhibit "A" and is incorporated. 7. On or about June 28, 1999, Joseph D. Kloza executed an Electronic Point of Sale Merchant Agreement ("Point of Sale Agreement") with Orrstown Bank for the "merchant" known as British Network Ltd. A true and correct copy of the Electronic Point of Sale Merchant Agreement is attached hereto as Exhibit "B" and is incorporated by reference. 8. Pursuant to the Electronic Point of Sale Merchant Agreement, Orrstown Bank would process Visa ® and MasterCard® charges from customers of British Network. Further, Orrstown Bank agreed to provide a credit to British Network ectual to the total of the charges placed by customers of British Network who used these credit cards. These credits were placed into the British Network Ltd regular checking account referenced above. 9. The Point of Sale Agreement provided for charge backs by customers of British Network. In particular, any charge backs by customers of British Network were to be handled as follows: "5. Adjustments and Returns .... In the event that goods are returned, or any services are terminated or cancelled, or arty price adjustments on a Transaction are allowed by Merchant, the Merchant will prepare and transmit through the electronic terminal a credit (or return) Transaction for the amount of the adjustment as a deduction from the total amount of sales drafts transmitted that day. In the event that the amount of the credit (or return) Transactions exceed the amount of the sales drafts transmitted, Bank shall charge the Merchant's account at the Bank for the amount by which the credit Transactions exceed the total amount of the sales drafts transmitted that banking day." 10. The Signature Card Agreement provided, in relevant part, as follows: Liability- Each of you agrees, for yourself (and the person or entity you represent if you sign as a representative of another) to the terms of this account and the schedule of charges that may be imposed. You authorize us to deduct these charges as accrued directly from the account balance. You also agree to pay additional reasonable charges we may impose for services you request which are not contemplated by this agreement. Each of you also agrees to be jointly and severally liable for any account deficit resulting from charges or overdrafts, whether caused by you or another authorized to 'withdraw from this account, and the costs we incur to collect the deficit including, to the extent permitted by law, our reasonable attorney's fees. l 1. The Defendants used and employed the benefits of the Point of Sale Merchant Agreement including, but not limited to, withdrawing funds for credit card transactions. 12. No reserve was established by Defendants for charge backs which may occur under the Point of Sale Merchant Agreement plan. 13. During the period December 3, 2001 through April 12, 2002, twenty-five (25) transactions were charged back to Orrstown Bank on Defendants' Point of Sale Merchant Agreement for a total dollar amount of $12,488.12. 14. During the same period, six (6) service fees were levied against Orrstown Bank on Defendants' Point of Sale Merchant Agreement for a total cost of $221.00. 15. Orrstown Bank has incurred costs and expenses of $3,413.95 through the date of this complaint regarding attempt to recover the amount due from Defendants pursuant to the Point of Sale Merchant Agreement and the Signature Card Agreement. 16. The Signature Card Agreement permits the recovery of attorney fees by Orrstown Bank. COUNT I-BREACH OF CONTRACT ORRSTOWN BANK v. JOSEPH D. KLOZA and WANDA M. CRAWFORD KLOZA 17. Plaintiff incorporates by reference paragraphs one through sixteen as though set forth at length. 18. Joseph D. Kloza and Wanda M. Crawford Kloza agreed to pay any deficit resulting from charges or overdrafts to the regular checking account. 19. Charges and overdrafts in said account total $13,758.84. 20. Demand has been made upon Defendants to pay this amount. 21. Defendants have failed and refused to pay this amount to Orrstown Bank. 22. Defendants have breached the terms of the Signature Card Agreement. 23. As a direct and proximate result of Defendants' breach of the Signature Card Agreement, Orrstown Bank has incurred the following damages: a) b) c) charged back items $13,537.84 service charges $ 221.00 expenses incurred in recovery $ 3,413.95 TOTAL: $17,172.79 24. Orrstown Bank has, and will continue, to incur attorney fees in its efforts to collect the deficit from Defendants. The Signature Card Agreement provides for the recovery of attorney fees paid by Orrstown Bank in the collection of the deficit. WHEREFORE, Plaintiff requests judgment in its favor' and against Defendants for the sum of $17,172.79 plus costs, expenses, interest and attorney fees all in an amount not in excess of the limits requiring compulsory arbitration. COUNT II-QUANTUM MERUIT ORRSTOWN BANK v. JOSEPH D. KLOZA and WANBA M. CRAWFORD KLOZA 25. Plaintiff incorporates by reference paragraphs on[e through twenty-four as though set forth at length. 26. Defendants did have, use and enjoy the benefit cf the credits provided by Orrstown Bank to the Business Checking Account. 27. Defendants failed to provide the services and goods for which payments were made by customers of British Network Ltd. in credit card transactions which were credited by Orrstown Bank to the Business Checking Account. 28. Defendants have failed and refused to refund to Orrstown Bank the amount necessary to pay the charge backs against the Business Checking Account. 29. Defendants have been unjustly enriched by retaining the funds to which they were not entitled. WHEREFORE, Plaintiff requests judgment in its favor and against Defendants for the sum of $ l 3,758.84 plus interest, costs and expenses. Respectfully submitted, EN, BARIC & SCaR David A. Baric, Esquire ID#44853 17 West South Street Carlisle, PA 170113 (717) 249-6873 Attorney for Plaintiff dab.dir/or rstownbank/kloza/complaint2.pld The statements in the {'oregoing Complaint are based upon information which has been assembled by my attorney in this litigation. The language ofthe statements is not my own. I have read the statements; and to the extent that they are b~ed upo:a information which I have given to my counsel, they are true and correct to the best of my knowledge, information and belief. I understand that false statements herein are made subject ~Io the penalties of 1 $ Pa.C.S. § 4904 relating to unsworn falsifications to authorities. ¥ic~ president :~T~ , ~.6'99 S. WEaver OE"O$1T$--. FOPS4= E~CA$. [] British N~:tworlc LTD 112 W. High Street Carlisle, PA 17013 Please add fax # 249r5995 tO cogent O_ (3. TELm JOSEPH KLOZA WANDA CRAWFO~D KLOZA 250 BIG SPRING ROAD b'EWVILLE, PA 17241 (4) EXHIBIT "A" ELECTROMIC POINT OF SALE bTERCIL42qT AGILEEi% 'tENT EXHIBIT "B" CERTIFICATE OF SERVICE I hereby certify that on March 1 t, 2004, I, David A. Baric, Esquire of O'Brien, Baric & Scherer, did serve a copy of the Complaint, by first class U.S. rnaiI, postage prepaid, to the parties listed below, as follows: Joseph D. Kloza 162 D Street Carlisle, Pennsylvania 170 ! 3 Wanda Crawford Kloza 162 D Street Carlisle, Pennsylvania 170113 David A. Baric, Esquire STATE OF DELAWARE SECRETARY OF STATE DZVIS'ION OF CORPORATIONS FILED 09;00 AM 02/16/1993' 55304700S - 2325978 CERTIFICATE OF INCORPORATION BRITISH NETWORKLTD. FIRST. The name of the Corporation is BRITISH NETWORK LTD. SECOND· Its registered office in the Stet;ici Delaware is to be lucate;I at 1050 S. Stale Streal, in the City ol Dover, County of Kent. The Registered Agent in charge thereof is CorpAmerica, Ir,~., 1 S. State Street, Dover, Delaware 19901. coqx~'alione may be orga ' I FOURTH. The to, al number of shares of stock which IhiS corporetior, is authorized Io issue is Fifteen Hundred (1,500) Shares at No Per Value· FIFTH. The name and mailing address of the incoq:~orator is as Io11<~#$: Robefl S. McKOwn Coq~Amerba, Ir~, 10S0 S. Stale Stmel Dover. Delaware 19901 SIXTH. ~ Board of Directors shell have the power fo addle, amend or repeal the by-la~m. SEVENTH. No director shall be personally liable to the Coq~orefl~m or its stonkholdars Ior rr~nalmy dernagss for any breach of f~duclary duly by such director as a dire.'*tor, Notwithstan~ng the foregoing senter~e, a dire~or shall be liable Io the extent provided by applicable law, (i) for breach of the directors duty ctr loyalty fo the Coqx~ation or its aockholders, (ii) for acts or omissions not In good leith of law, (iii) pursuanl to Se:lion 174 of the Delaware General Corporation Law or (iv) for any transaction · derivedanl roper personal benefit: Noamendmeol:toorrepealof_thisAlt~la from whinh the d~rector . ..mp_ ~ _ .,.. ,~.~.~,a. ,.,. ,,11,~,~-I lisbllilv o! any ,director of the Sevonthehallapplytoornaveenyene~o""m""'"'"~x~' ""-' . ' * for or with re~pe~t to any acts or omissions of such director occumng prior Io such amendment. I, THE UNDERSIGNED, for the puq:~se ~f forming a corporation under the laws of the Stale of Delaware,do make, file and record this Cerllflcale, and do certify Ihat t he fauts herein st at ad are tm e, and I have a~cordlnglY hereunto sal my handlhis 16th dayol February, 1993. ~:~erl S. McKowfl, Incorpo pA'b~Pt, OF JUL ~ ? 1999 -O RRSTOW N · pENNSYLVANIA I Z'244 ]Date 12/31/99 PRIMARY AccOUNT Page ] 108110972 'TAX ID 22-321834& BRITISH NETWORK LTD, 112 WEST HIGH STREET CARLISLE PA 17013-2910 cHEC'KING REGULAR BUSIA]ESS ACCOUNT ACCOUNT NUMBER PREVIOUS BALANCE 12 DEPOSITS/CREDITS 61 CHECKS/DEBITS SERVICE FEE INTEREST PAID CURRENT BALANCE 108110973 21,716.24 49,605.10 57,916.79 .00 .00 13,404.55 AC CO UI~T S NUMBER OF ENCLO~ukES 56 Statement Dates 12/01/99 thru 12/31/99 DAYS IN 'ITIE STATEMENT PERIOD 31 AVERAGE LEDGER 15,514.80 AVERAGE COLLECTED 15,343.78 AcTMTY IN DATE ORDER DATE i2/Oi i2/02 i2/02 12/02 12/02 12/o3 12/03 12/03 12/03 12/03 12/06 12/07 12/07 12/07 12/07 12/08 i2/08 12/o8 12/08 12/09 12/09 12/09 12/09 1 ~ DESCRIPTION CHECK 2299 CHECK 2305 CHECK 2306 CHECK 2310 CI]ECK 2313 DEPOSIT CCD PAYMENTECH CHECK 2288 CHECK 2316 CHECK 2319 CHECK 2322 DEPOSIT CCD pAyMENTECH DEPOSIT CCD PAYMENTECH CHECK 2326 CHECK 2327 CHECK 2315 CHECK 2320 CHECK 2321 CHECK 2337 DEPOSIT CCD PAYMENTECH DEPOSIT CCD pAYME~TECH ~CK 2328 CHECK 2339 CHECK 2340 TRACE NO AMOUNT BALANCE 030080930 7.90- 21,708.34 030068460 2,200.00- 19,508.34 030068450 800.00- 18,708.34 030069400 262.73- 18,445.61 030064050 242.16- 18,203.45 052215529 100.00 18,303.45 040092050 352.00- 17,951.45 040091420 108.33- 17,843.12 040064270 65.00- 17,778.12 040113210 30.74- 17,747.38 319254786 1,000.00 18,747.38 380662750 500.00 19,247.38 030078260 285.00- 18,962.38 030109370 24.02- 18,938.36 010010170 12.39- 18,925.97 030114440 1,407.00- 17,518.97 030093130 121.28- 17,397.69 010003300 100.10- 17,297.59 790813686 164.00- 17,133.59 006569776 229.00 17,362.59 239.27- 17,123.32 41.05- 17,082.27 36.20- 17,046.07 ORRSTOWN BANK MERCHANT AGREEMENT THIS MERCHANT AGREEMENT (*Agreement") is n~de as of the date sel forth on the signature page o[ 1his Agreement bi~ and between Orrstown Bank (BANK), and the undersigned merchant Sale. (see ~lsO paragraph 10); (x) Use its b~st ebons to recover, by reasonable and peecefut means (end retain if so procedures by any Card AsSOCiations). The Merchant shell promptly notify the Bank if a (xi) When Card Sale is not e,~denced by a p~oBerly completed electronic transmittal, symbols, hi any case in whi¢~ a ~ard Sale Is completed v~th an expired Card, whether olher respects also be in accordance with the f ollowm9 ADJUSTMENTS OF CREDIT DRAFTS PROCEDURES (i) The refund o~ adjustmen~ indicated on the Adjustment of Credit Draft may not in legible lotto: (3) the date ol the credil relxesenJed by the Adjuslment of Credil Dra[t; (5) the amount of credit for each item; n~y delemline in its sole d[screUm3: ~o~ded Iha=t ~erch,., may designate a Par~u~a ;oaSiS; (c) Bank will supply Merchant with Sa ~s Draf s, Adjustmenls of C edit Drafts, depOS 9 Records ConrJdemia~ily (b) MerCbenl agrees to preserve copies of all Sales Drafts and Adjuslmenis of Ciedil D~afls lime as n~ky be ~-equired by Ihe applicable Card Assecialion and (iii) such period of Eme as may be c~ municipal or olhe[wise. Mercl~nt hereby assumes all I~bilily (including the lia bilily for any resu~ling chargebecks) should it iai1 Jo so preserve Sales Drafts and Adjustments of Credil Drafts. .~)greemenl is duly authodzed, aod will not .~olate any pl'o~sl~s of law. m' conflict with (e)Apartment HouSes.{b)Bail Bond Services. (¢)Barr~Tavems. (~)Card (g)Cempanion or Esced Services. (h)Employment Agencies. (i)Gambltng ~nk: __ORRS. TO___~ BANK 77 W. KING S~REET' - SHIP~NSBURG,'~ ?A 17257 T~e~one_~717O 532--6] 18 MetC~la.[ BRITISH NETWORK LTD 112 W. HIGH STREET CARLISLE~ MA 17013 ~717) 249-5990 CERTIFICATE OF SERVICE AND NOW, I, Michael T. Traxler, of ABOM & K~S, LLP, hereby certify that I did serve a true and correct copy of the foregoing Preliminary Objections of Defendant by First Class U.S. Mail at the following: David A. Baric, Esquire O'BRIEN, BARIC AND SCHERER 17 West South Street Carlisle, PA 17013 Respectfu]ly submitted, ABOM & KUTULaKJs, LLP DATE __ Michael T. TraXl~r, Esquire 36 S. Hanover Street Carlisle, PA 17013 (717) 24%0900 ID No. 90961 ORRSTOWN BANK, Plaintiff JOSEPH D. KLOZA and WANDA M. CRAWFORD KLOZA husband and wife, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 2003-5997 CIVIL TERM CIVIL ACTION-LAW 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 Amended Complaint and notice are served, by entering a written appearance personally or by an 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. 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, Pennsylvania 1701:3 (717) 249-3166 ORRSTOWN BANK, : Plaintiff : V. JOSEPH D. KLOZA and WANDA M. CRAWFORD KLOZA husband and wife, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 2003-5997 CIVIL TERM CIVIL ACTION-LAW AMENDED COMPLAINT NOW, comes Plaintiff, Orrstown Bank, by and through its attorneys, O'BRIEN, BARIC & SCHERER, and files the within Complaint and, in support thereof, sets forth the following: 1. Plaintiff is Orrstown Bank, a Pennsylvania corporation, with its principal place of business located at 77 East King Street, Shippensburg, Cumberland Cotmty, Pennsylvania. 2. Defendant, Joseph D. Kloza, is an adult individual who resides in Cumberland County, Pennsylvania. 3. Defendant, Wanda M. Crawford Kloza, is an adult individual who resides in Cumberland County, Pennsylvania. 4. Upon information and belief, Joseph D. Kloza and Wanda M. Crawford Kloza have been, all relevant times, the owners and operators of a certain business known as British Network Ltd. 5. British Network Ltd. was in the business of providing travel services such as, but not limited to, the sale of travel packages to individuals. 6. On or about May 26, 1999, Joseph D. Kloza and Wanda M. Crawford Kloza executed a Signature Card Agreement with Orrstown Bank e~stablishing a regular checking account in the name of British Network Ltd. A true and correct copy of the Signature Card Agreement for this account is attached hereto as Exhibit "A" and is incorporated. 7. On or about June 28, 1999, Joseph D. Kloza executed an Electronic Point of Sale Merchant Agreement ("Point of Sale Agreement") with Orrstown Bank for the "merchant" known as British Network Ltd. A true and correct copy of the Electronic Point of Sale Merchant Agreement is attached hereto as Exhibit "B" and is incorpora~ted by reference. 8. Pursuant to the Electronic Point of Sale Merchant Agreement, Orrstown Bank would process Visa ® and MasterCard® charges from customers of British Network. Further, Orrstown Bank agreed to provide a credit to British Network equal to the total of the charges placed by customers of British Network who used these credk cards. These credits were placed into the British Network Ltd regular checking account referenced above. 9. The Point of Sale Agreement provided for charge backs by customers of British Network. In particular, any charge backs by customers of British Network were to be handled as follows: "5. Adjustments and Returns .... In 'the event that goods are returned, or any services are terminated or cancelled, or any price adjustments on a Transaction are allowed by Merchant, the Merchant will prepare and transmit through the electronic terminal a credit (or return) Transaction for the amount of the adjustment as a deduction from the total amount of sales drafts transmitted that day. In the event that the amount of the crcdit (or return) Transactions exceed the amount of the sales drafts transmitted, Bank shall charge the Merchant's account at the Bank for the amount by which the credit Transactions exceed the total amount of the sales drafts transmitted that banking day." 10. The Signature Card Agreement provided, in relevant part, as follows: Liability- Each of you agrees, for yourself (and the person or entity you represent if you sign as a representative of another) to the terms of this account and the schedule of charges that may be imposed. You authorize us to deduct these charges as accrued directly from the account balance. You also agree to pay additional reasonable charges we may impose for services you request which are not contemplated by this agreement. Each of you also agrees to be jointly and severally liable for any account deficit resulting from charges or overdrafts, whether caused by you or another authorized to withdraw from this account, and the costs we incur to collect the deficit including, to the extent permitted by law, our reasonable attorney's fees. 11. The Defendants used and employed the benefits of the Point of Sale Merchant Agreement including, but not limited to, withdrawing funds far credit card transactions. 12. No reserve was established by Defendants for charge backs which may occur under the Point of Sale Merchant Agreement plan. 13. During the period December 3, 2001 through April 12, 2002, twenty-five (25) transactions were charged back to Orrstown Bank on Defendants' Point of Sale Merchant Agreement for a total dollar amount of $12,488.12. 14. During the same period, six (6) service fees were levied against Orrstown Bank on Defendants' Point of Sale Merchant Agreement for a total cost of $221.00. 15. Orrstown Bank has incurred costs and expenses of $3,413.95 through the date of this complaint regarding attempt to recover the amount due from Defendants pursuant to the Point of Sale Merchant Agreement and the Signature Card Agreement. 16. The Signature Card Agreement permits the recovery of attorney fees by Orrstown 17. Upon information and belief, Joseph Kloza and Wanda Kloza did remove from the accounts of British Network Ltd. substantial sums of money for which they had no entitlement. 18. Joseph Kloza and Wanda Kloza removed substantial sums of money from the accounts of British Network Ltd. when they knew that removing said sums would render British Network Ltd. insolvent and otherwise unable to pay its creditors. 19. The acts of Joseph Kloza and Wanda Kloza were such as to permit piercing of the corporate veil of British Network Ltd. 20. Joseph Kloza and Wanda Kloza used the accounts of British Network Ltd. as though said accounts were the personal accounts of Joseph K][oza and Wanda Kloza including, but not limited to, removing sums of money from said accounts to pay personal expenses of Joseph and/or Wanda Kloza. COUNT 1-BREACH OF CONTRACT ORRSTOWN BANK v. JOSEPH D. KLOZA and WANDA M. CRAWFORD KLOZA 21. Plaintiff incorporates by reference paragraphs one through twenty as though set forth at length. 22. Joseph D. Kloza and Wanda M. Crawford Kloza agreed to pay any deficit resulting from charges or overdrafts to the regular checking account. 23. Charges and overdrafts in said account total $13,758.84. 24. Demand has been made upon Defendants to pay this amount. 25. Defendants have failed and refused to pay this amount to Orrstown Bank. 26. Defendants have breached the terms of the Si~aature Card Agreement. 27. As a direct and proximate result of Defendants' breach of the Signature Card Agreement, Orrstown Bank has incurred the following damages: a) b) c) charged back items $13,537.84 service charges $ 221.00 expenses incurred in recovery $ 3,413.95 TOTAL: $17,172.79 28. Orrstown Bank has, and will continue, to incm: attorney fees in its efforts to collect the deficit from Defendants. The Signature Card Agreement provides for the recovery of attorney fees paid by Orrstown Bank in the collection of the deficit. WHEREFORE, Plaintiff requests judgment in its fave,r and against Defendants for the sum of $17,172.79 plus costs, expenses, interest and attorney fees all in an amount not in excess of the limits requiring compulsory arbitration. COUNT II-QUANTUM MERUIT ORRSTOVqN BANK v. JOSEPH D. KLOZA and WANDA M. CRAWFORI) KLOZA 29. Plaintiff incorporates by reference paragraphs one through twenty-eight as though set forth at length. 30. Defendants did have, use and enjoy the benefit of the credits provided by Orrstown Bank to the Business Checking Account. 31. Defendants failed to provide the services and goods for which paymems were made by customers of British Network Ltd. in credit card transactions which were credited by Orrstown Bank to the Business Checking Account. 32. Defendants have failed and refused to refund to Orrstown Bank the amount necessary to pay the charge backs against the Business Checking Account. 33. Defendants have been unjustly enriched by retaining the funds to which they were not entitled. WHEREFORE, Plaintiff requests judgment in its favor and against Defendants for the stun of $13,758.84 plus interest, costs and expenses. COUNT III- CONVERSION ORRSTOWN BANK v. JOSEPH D. KLOZA and WANI)A M. CRAWFORD KLOZA 34. Plaintiff incorporates paragraphs one through thirty-three as though set forth at 35. Defendants did convert money of British Networks Ltd. to their own use and enjoyment when said money was rightfully to be held by British Networks Ltd. to pay for services and goods promised by British Networks Ltd. to its customers. 36. As a consequence of this conversion of funds by' Defendants, Orrstown Bank was charged back the aforementioned sums when British Networks Ltd. did not have the funds to pay for the promised goods and services. Defendants actions were intentional and caused the insolvency of British 37. Networks Ltd. 38. Defendants knew that by stripping British Networks Ltd. of funds, the business would not have assets sufficient to pay for the services and goods required to be provided to its customers. WHEREFORE, Plaintiff requests judgment in its favor and against Defendants for the sum of $17,172.79, costs and expenses and punitive damages. Respectfully submitted, O'BRIEN, BARIC & SCHF~I~R David A. Banc, Esqmre ID#44853 17 West South Street Carlisle, PA 17013 (717) 249-6873 Attorney for Plaintiff dab.dir/orrstownbank/kloza/complaint2.pld VERIFICATION I verify that the statements made in the foregoing Amended Complaint are tree and correct to the best of my knowledge, information and belief. This verification is signed by David A. Baric, Esquire, attorney for Plaintiff and is based upon state:ments provided by the Plaintiff and other persons, as well as documents reviewed by the undersigned as attorney for Plaintiff. This verification will be substituted and ratified by a verification signed by the Plaintiff who is presently unavailable to sign said verification. I understand th~,t false statements herein are made subject to the penalties of 18 Pa. C.S. § 4904, relating to unswom falsification to authorities. David A. Baric, Esquire Dated: CERTIFICATE OF SERVICE I hereby certify that on June 22, 2004, I, David A. Baric, Esquire of O'Brien, Baric & Scherer, did serve a copy of the Amended Complaint, by first class U.S. mail, postage prepaid, to the parties listed below, as follows: Michael T. Traxler, Esq. Abom& Kutulakis, LLP 36 S. Hanover Street Carlisle, PA 17013 David A. Baric, Esquire TELl oP~=o 5 26 99 .sY. S. W~aver British N~tworl¢ LTD 112 W. High Straet Carlisle, PA 17013 'W,&NDA CRA'W'EOAD XG, OZA 250 BIG SPP. ING ROAD }~VILLE, PA 17241 EXHIBIT "A" [] ,/ EXHIBIT "B" ABOM & KUTULAK~S, LLP 36 S. Hanover Street Carlisle, PA 17013 (717) 249-0900 ORRSTOWN BANK, Plaintiff PENNSYLVANIA JOSEPH D. KLOZA and WANDA M. CRAWFORD KLOZA husband and wife, Defendants : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, : : NO.: 2003-599;7 CIVIL TERM : CML ACTION' - LAW TO: David A. Baric, Esquire O'Brien, Baric and Scherer 17 West South Street Carlisle, PA 17013 (Counsel for Plaintiffs) NOTICE TO PLEAD YOU ARE HEREBY NOTIFIED TO PLEAD TO THE WITHIN PRELIMINARY OBJECTIONS OF DEFENDANTS WITHIN TWENTY (213) DAYS OF THE DATE OF SERVICE OF THIS PLEADING. ABOM & KUTULM~S, LLP 36 S. Hanover Street Carlisle, PA 17013 (717) 249-0900 ORRSTOWN BANK, Plaintiff JOSEPH D. KLOZA and WANDA M. CRAWFORD KLOZA husband and wife, Defendants : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : : NO.: 2003-5997' CIVIL TERM : : CIVIL ACTION - LAW DEFENDANTS' PRELIMINARY OBIECTIONS RAISING LEGAL INSUFFICIENCY, NONJOINDER OF NECESSARY PARTY AND INSUFFICIENT SPECIFICITY Defendants, Joseph D. Kloza and Wanda M. Crawford Kloza, by their undersigned counsel, preliminarily object to Plaintiff's Complaint and Amended Complaint pursuant to Pa. ILC~P. 1028 as follows: WITNESSETH, Defendants hereby demur to Plaintiff's Complaint and Amended Complaint for failure to set forth a claim or cause of action, which, if proved, would entitle the Plaintiff to the relief Plaintiff has sought. WITNESSETH, it is the contention of Defendants that Plaintiff's Complaint and Amended Complaint fails for nonjoinder of necessary party. W1TNESSETH, k is the contention of Defendants that Pl~fintiff's Complaint and Amended Complaint fails for insufficient specificity. 1. Plaintiff, Orrstown Bank, filed the Complaint in this mal~er on March 11, 2004. 2. Defendants filed their first set of Preliminary Objections: on June 2, 2004. 3. Plaintiff fried an Amended Complaint on June 22, 2004. 4. Plaintiff's Complaint and Amend Complaint allege, in summary, that the Defendants entered into one or more contracts with the Plaintiff and Defendants ultimately breached those contracts. 5. Plaintiff avers that Defendants executed a Signature Card Agreement establishing a checking account in the name of British Networks Ltd. A true and correct copy of the Signature Card Agreement is attached as Exhibit "A'. 6. Plaintiff avers that Defendants executed an Electronic Point of Sale Merchant Agreement ("Point of Sale Agreement") with Plaintiff for the ~merchant' known as British Network Ltd. A true and correct copy of the Point of Sale Agreement is attached as Exhibit "B'. 7. Plaintiff has acknowledged that British Network Ltd., at all relevant times, was a business. 8. Plaintiff failed to acknowledge that British Network Ltd[. is and was a corporation at all relevant times. 9. British Network Ltd. is a corporation organized under the General Corporation Law of Delaware. A true and correct copy of the Certificate of Incorporation of British Network Ltd. is attached as Exhibit "C'. 10. British Network Ltd. is registered as a Foreign Business Corpomtinn in the Commonwealth of Pennsylvania. A true and correct copy of the Application for Cendficate of Authority bearing the entity number of British Network Ltd. is attached as Exhibit "D'. 11. Defendants, Joseph and Wanda Kloza, at all relevant times, were officers and directors of British Network Ltd., a corporation. 12. The parties to the Point of Sale Agreement and the Signature Card Agreemem were Orrstown Bank and British Network Ltd. 13. The Signature Card Agreement was executed to establish a business banking relationship between Orrstown Bank and British Network Ltd. 14. Plaintiff and British Network Ltd. operated the account that was opened pursuant to the Signature Card Agreement as a business account. A true and correct copy of the first page of the December 1999 Regular Business Account Statement of British Network Ltd. is attached as Exhibit ~E~. 15. Joseph and Wanda Kloza opened a separate banking account with Orrstown Bank that was established for personal banking purposes. 16. The Point of Sale Agreement was executed to allow Orrstown Bank to process credit card charges from customers of British Network Ltd. 17. The Signature Card Agreement was signed by Joseph Kloza and Wancla Kloza as authorized signatories for British Network Ltd. 18. The Point of Sale Agreement was executed by Joseph Kloza as President of British Network Ltd. 19. The Point of Sale Agreement and the Signature Card Agreement were not executed by Joseph Kloza and Wancla Kloza as individuals. 20. It was the intention of Orrstown to hold the Defendants personally liable pursuant to a personal guaranty contained in a Merchant Agreement that was presented to Joseph Kloza by Plaintiff. A true and correct copy of the proposed Merchant Agreement containing a personal guaranty that was presented to Joseph Kloza is attached as Exhibit ~F~. 21. Plaintiff never followed through to see that Defendants signed the Merchant Agreement containing the personal guaranty. 22. Plaintiff has not presented a personal guaranty signed by Defendants that would make Defendants liable as individuals for the debts that have been claimed by Plaintiff. 23. Pennsylvania law is clear that an individual defendant is not personally liable for the debts of a corporation. Electron Energy Corp. v. Short, 597 A.2d 175 (Pa~ Super. 1991). 24. Plaintiff's Complaint and Amended Complaint are legally insufficient for failure to present facts necessary to establish that Defendants are liable as individuals for the debt of British Network, Ltd., a corporation. 25. Plaintiff made general and vague avermems in its Amended Complaint that Defendants acted in a manner sufficient to pierce the corporate veil of British Network Ltd. 26. Plaintiff's Complaint and Amended Complaint fail fo:r legal insufficiency and insufficiem specificity because no specific instances have been averred where the Defendants acted in a manner sufficient to pierce the corporate veil of British Network Ltd. 27. Plaintiff has failed to name British Network Ltd. as a ,defendant so that its corporate veil could be pierced. 28. British Network Ltd. is an interested party to the even.ts and transactions that gave rise to the Plaintiff's alleged cause of action. 29. Plaintiff's Complaint and Amended Complaint fail for' nonjoinder of a necessary party, British Network Ltd. WHEREFORE, Defendants respectfully request this Cc,tax to grant their preliminary objections for legal insufficiency by way of demurrer, nonjoindelr of a necessary party and insufficiem specificity by dismissing all counts of Plaintiff's Con~tplaint and Amended Complaint as to Joseph Kloza and Wanda Kloza as individuals. Respectfully submitted, ABOM & KUTUL~.VJS, LLP er, Esquire 36 S. Hanover Street Carlisle, PA 17013 (717) 249-0900 ID No. 90961 VERIFICATION Michael T. Traxler, states that he is the attomey for the party :filing the foregoing document; that he makes this affidavit as an attomey, became the party he represems hcks sufficient knowledge or information upon which to make a verification and/or became he ha~ greater personal knowledge of the information and belief than that of the party for whom he makes this affidavit; and/or because the party for whom he makes this affidavit is outside the jurisdiction of the court, and verification of none of them can be obtained within the time allowed for the filing of the .document; and that he has suffident knowledge or information and belief, based upon his investigation of the matters averred or denied in the foregoing document; and that this statement is made subject to the penalties of 18 Pa.C.S. 4904, relating to unswom falsification of authorities. / / Michael T. Traxler Bric/ah N,:twor]c LTD 112 W. Hil;h S:rae~ Carl/ale, PA 17013 \j ELEC~'~RONIC POLNT G. ~ALE ,"J-E P,.CHANT AGREE~. ,]P. NT · . ~,,, o, ~.~i.~ ~.(4; ............................................... (hcl';fl~'krldCn~l~u-Lh,k-)~Qd ........... .B..L'..~...~.i.s..h Ne(:'~o 'k LTD aPPr°~ythc~nk, o~uot~dit~t,....u~r_. ~ .... ~a ~Au~m~Uou~vml ~o,~z~. ' , tflhty(30) ~ p ~ no~ od I 'e a-,--,~.]~ ~nt ~IU'l ~ ~d~t's a~uz~t a t ~c ~u~ ~c~ ~lcrcufluc~. All adj~mcn~ f~r ~l~ dtif~ 3u ' um.~crc~m?S l~nt ti O~n~ whi~ ~ ~ b ~uk w;~ m ~ (c) P~ym~n~'~F~Io~hIACCardT~c~io~ For~AC~:~p~sndp~,~=tw~ ~ ~1~ Or~sCo~D Bank CERTIFICATE OF INCORPORATION of BRITISH NETWORK LTD. FIRST. The name of the Coq=oration is BRITISH NETWORK LI'D. SECOND. Its registered office in the ~lal;lof Delaware is to be located at 1050 $. State Strent, in the Cl{y o! Dover, Cnunty of Kent. The Registered Agent In charge thamof is CorpAmorba, In<=., 1050 S. State Street, Dover, Delaware 19901. THIRD. The puqx~e of the co~=omtisn is to engag~ In any is~ul act or activlly for which ~x~rations may be organized under the General Coqx~ratinn Law o~ Dellaware. FOURTH, The total number of shares of stock which Ihis corperation is authorized to issue is Fifteen Hundred (1,500) Shams at No Par Value. RFTH. Tbe name and rn~ing eddrass althe incorporator is as f(~iows: Robelt $. McKown 1050 9. 9taro Dover, Delaware 19901 SIXTH. The Board of Directors shall have the power to adair, amsed or repeal the by-laws. SEVENTH. No director shall be pereonatly liable tO the Coq~oralfon or i~ stockllolde~ for Mar/damages for any breach of fiduciary duly by such diracfor as a direclar, Notwithstan~ng the foregoing sentence, a director shall be liable fo the exleN provided by alAo~lb~e law, (i) for braach of tho director's duty of loyalty to the Corporation or Its stockhaldere, (ii) for acts or omissions not in good failh of law, (iii) pursuant to Section 174 o! the Delaware General Corporation Law or (iv) for any transaction from which the director cledved an Improper personal beneffi~ No amandm~t to or repeal of this Arlicle Sever~h sha~ app~y fo ~r have any e~eot ~n the F~at"1i~y or a~Ieged ~I~bi~ity ~f ar~ direotor ~f the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment. I, THE UNDERSIGNED. for the purpose of forming a coq~:~a~fofl under the laws of the State of Dalaware, do mako, file and record this Cerllflcste, and do ~erti~y that t ha facts herein stated ere t me. and ! have a~cordingly hereunto set my hand this 1Sth day al FebnJa~y, 1993. ~d S. McKown, Incorporator JUL 2 ? 19~)9 '9' a kl 7 ES'T~JMONY W~ ,i :Oz. thc undersignea.~.~zr_~..~_corpo,-~g on ;,:s signedbyadu!yau[ho,i., F,.ff:cor,hersof,h,s _~/~-~__~--d,~yof , O ,STO iK ORRSTOWN~ PENNSYLVANIA I 7~1244 Date 12/31/99 PRIMARY ACCOUNT TAX ID :--BRiTTSI4~ NETWORK LTD, 112 WEST HIGH STi%EET CARLISLE PA 17013-2910 Page ~ 10811097: 22-321834~ CH E C'KI NG REGULAR BUSII~ESS ACCOIIRT ACCOUNT NUMBER PREVIOUS BALANCE 12 DEPOSITS/CREDITS 61 CHECKS/DEBITS SERVICE FEE INTEREST PAID CURRENT BALANCE 108110973 21,716.24 49,605.10 57,916.79 .00 .00 13,404.55 ACCOUNTS NUMBER OF ENCL0~u~ES 56 Statement Dates 12/01/99 thru 12/31/99 DAYS IN THE STATEMENT PERIOD 31 AVERAGE LEDGER 15,514.80 AVERAGE COLLECTED 15,343.78 ACTMTY IN DATE ORDER DATE DESCRIPTION 12/01 CHECK 2299 52/02 CHECK 2305 12/02 CHECK 2306 12/02 CHECK 2310 12/02 CHECK 2313 12/03 DEPOSIT CCD PAYMENTECH 12/03 CHECK 2288 12/03 CHECK 2316 12/03 CHECK 2319 12/03 CHECK 2322 12/06 DEPOSIT CCD PAYMENTECH 12/07 DEPOSIT CCD PAYMENTECH 12/07 CHECK 2326 12/07 CHECK 2327 12/07 CHECK 2315 12/08 CHECK 2320 12/08 CHECK '2321 12/08 CHECK 2337 12/08 DEPOSIT CCD pAYME, NTECH 12/09 DEPOSIT CCD PAYMENTECH 12/09 CHECK 2328 12/09 CHECK 2339 12/09 CHECK 2340 TRACE NO AMOUNT 030080930 7.90- 030068460 2,200.00- 030068450 800.00- 030069400 262.73- 030064050 242.16- 052215529 100.00 040092050 352.00- 040091420 108.33- 040064270 65.00- 040113210 30.74- 319254786 1,000.00 380662750 500.00 030078260 285.00- 030109370 24.02- 010010170 12.39- 030114440 1,407.00- 030093130 121.28- 010003300 100.10- 790813686 164.00- 006569776 229.00 239.27- 41.05- 36.20- BALANCE 21 708.34 19508.34 18 708.34 18 445.61 18 203.45 18 303.45 17 951.45 17 843.12 17 778.12 17 747.38 18 747.38 19 247 38 18 962 38 18 938 36 18 925 97 17 518 97 17 397 69 17.297.59 17,133.59 17,362.59 17,123.32 17,082.27 17,046.07 ORRSTOWN BANI( MERCHANT AGREEI~ENT Sa~e. (see also paragraph 10); (a}A~adm~n{ Houses.(b)Bail Bond Services, (c)6anuTavems. (d)Card Rcoms. (e)Check Cash Establishments, {f)C~leclion Agencies. 77 W. KING STREET SHIPPENSBURG,!~PA BRITISH NETWORK LTD 112 W. HIGH STREET CARLISLE~ MA 17013 Te,.~.e ~717) 249--5990 Sy: X (mg~amm) (No 7m~) CERTIFICATE OF SERVICE AND NOW, I, Michael T. Traxler, of ABOM & KUTULAKIS, LLP, hereby certify that I did serve or cause to be served a tree and correct copy of the foregoing Defendants' Preliminary Objections by First Class U.S. lVlail at the following: David A. Baric, Esquire O'BRIEN, BAPdC AND SCHERER 17 West South Street Carlisle, PA 17013 Respectfully sub~nitted, A. BOM & KUTUL4KIS, LLP DATE x, Esquire / 36 S. Hanover Street Carlisle, PA 17013 (717) 24%0900 ID No. 90961 PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and sukmitt~ in duplicate) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: P]~se list the within matter for the r~xt Arc~xnent Court. CAPTION OF CASE (entire caption must be stated in fu3_~) ORRSTOWN BANK JOSEPH D. KLOZA AND WANDA M. CRAWFORD KLOZA ( Plaintiff ) ( Defendant ) e No. 5997 Civil AcTiON_LAWR~O~4_~ State matter to be argued (i.e., plaintiff's Ir~tion for new trial, defendant's demu~ to c~p]~nt, etc. ): DEFENDANT,S PRELIMINARY OBJECTIONS 2. Identify counsel who w~]] argue case: (a) for plaintiff: DAVID A. BARIC, ESQ. A~ess: 19 W. SOUTH ST CARLISLE, PA 17013 (b) for defendant: MICHAEL T. TRAXLER~, ESQ. Address: 36 S. HANOVER ST CARLISLE, PA 17013 I will notify all parties in writing within two days that this case has been listed for a~t. 4. Arg~nent Cou%-t Bate: SEPTEMBER 22, 2004 Atto~l~ f~: PLAINTIFF ~RAECIPE FOR LISTING CASE FOR ARGUMENT (Must betypewrittenandsut~nittedlinduplicate) TO THE PROTHONOTARy OF CUMBERLAND COUNTY: Please list the withinmatterforthe ~=_xtA~tCou~_t' CAPTION OF CASE (entire caption must be stated in ~]?) 0RRSTOWN BANK JOSEPH D. KLOZA AND WANDA M. CRAWFORD KLOZA ( Plaintiff ) ( Defendant ) No. 5QO7 Ci%d_l ~W-i~ ~ State matter to be argued (i.e., plaintiff's n~)tion for new trJ~%l, defendant,s d~n~rrer to ccrnp]aint, etc. ): Identify counsel who w~]] argue Case: (a) for plaintiff: DAVID A. BARIC, ESQ. Address: 19 W. SOUTH ST CARLISLE, PA 17013 (b) for defer~lant: MICHAEL T. TRAXLER, ESQ. Address: 36 S. HANOVER ST CARLISLE, PA 17013 I wi]! notify all parties in writing within two days that this Case has been listed for a~t' 4. ~t Court ~ate: SEPTEMBER ~ 2004 /~ Attorney for PLAINTIFm ORRSTOWN BANK, : Plaintiff : V. JOSEPH D. KLOZA and WANDA M. CRAWFORD KLOZA,: husband and wife, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 2003-5997 CIVIL TERM CIVIL ACTION-LAW REPLY TO PRELIMINARY OBJECTIONS NOW, comes Orrstown Bank, by and through its attorneys, O'BRIEN, BARIC & SCHERER, and files the within Reply to Preliminary Objections and, in support thereof, sets forth the following: 1. Admitted. 2. Admitted. 3. Admitted. 4. Denied. The Amended Complaint speaks for itself. 5. Admitted. 6. Admitted. 7. Denied. The Amended Complaint speaks for itself. 8. After reasonable investigation, Plaintiff is without knowledge or information sufficient to form a belief as to the truth of this averment and it is, therefore, denied. 9. After reasonable investigation, Plaintiff is without knowledge or information sufficient to form a belief as to the truth of these averments and they are, therefore, denied. 10. After reasonable investigation, Plaintiff is without knowledge or information sufficient to form a belief as to the truth of these averments and they are, therefore, denied. 11. Admitted in part and denied in part. It is admitted only that the Defendants were officers and directors of British Network Ltd. The remaining averments are denied. In particular, whether the Defendants were acting in their positions as officers and directors of British Network Ltd. "at all relevant times" is a factual issue to be determined in this litigation. 12. Denied. To the contrary, the Defendants executed the Signature Card Agreement binding themselves as individuals. 13. After reasonable investigation, Plaintiff is without knowledge or information sufficient to form a belief as to the truth of these averments and they are, therefore, denied. 14. Denied. To the contrary, the Signature Card Agreement indicates the type of account as "Personal". 15. Admitted in part and denied in part. It is admitted only that the Defendants opened a separate account with Plaintiff. Plaintiff does not know the reason for Defendants opening the second account. 16. Denied as stated. To the contrary, the Point of Sale Agreement was executed to permit British Network Ltd. to immediately obtain the receipts generated by its customers using credit cards with these receipts being placed into the checking account referenced in the Amended Complaint. 17. Denied. To the contrary, the Defendants signed as signatories for British Network Ltd. and as individuals. 18. Admitted in part and denied in part. It is admitted only that Joseph Kloza executed the document. The capacity in which Joseph Kloza executed that document is disputed and, therefore, Plaintiff denies Defendants' characterization of the capacity in which he executed the Point of Sale Agreement. 19. Denied. Plaintiff incorporates by reference herein its answer to paragraph 18 as though set forth at length. 20. Denied. The Point of Sale Agreement as executed by the parties is attached to the Amended Complaint as Exhibit "B". 21. Denied. Plaintiff incorporates by reference herein its answer to paragraph 20 as though set forth at length. 22. Admitted in part and denied in part. It is admit~Ied only that Plaintiffhas not appended to its Amended Complaint a document referenced as a "personal guaranty". The remaining averments are denied. To the contrary, the Signature Card Agreement establishes the liability of the Defendants. Denied. To the contrary, the case cited is not applicable to support Defendants' 23. averment. 24. Denied. To the contrary, the Amended Complaint sets forth facts establishing the personal liability of the Defendants for the damages demanded. 25. Denied. To the contrary, the Amended Complaint sets forth facts sufficient to pieme the corporate veil. Moreover, additional facts will be developed during discovery in this matter. 26. Denied. To the contrary, the Amended Complaint is legally sufficient and specific so as to permit piercing of the corporate veil. Moreover, the participation theory permits liability to be established against Defendants. 27. Denied. To the contrary, British Network Ltd. does not have to be a party defendant to have its veil pierced. 28. Denied. To the contrary, British Network Ltd. :is not a necessary party as determined under the law of the Commonwealth of Pennsylvmfia. 29. Denied. To the contrary, British Network Ltd. i!s not a necessary party as determined under the law of the Commonwealth of Pennsylvania. Respectfully submitted, David A. Baric, Esquire I.D. 44853. 19 West South Street Carlisle, Pennsylvania 17013 (717) 249-6873 Attorney fi>r Plaintiff, Onrstown Bank dab.dir/orrstownbank/kloza/preliminaryobjection.rep CERTIFICATE OF SERVICE I hereby certify that on September 14, 2004, I, David A. Baric, Esquire ofO'Brien, Baric & Scherer, did serve a copy of the Reply To Preliminary Objections, via hand delivery, to the party listed below, as follows: Michael Traxler, Esquire Aborn & Kutulakis 36 South Hanover Street Carlisle, P, te~vania 17013 ~ David A. Baric, Esquire ORRSTOWN BANK, Plaimiff JOSEPH D. KLOZA and : WANDA M. CRAWFORD KLOZA,: husband and wife, : Defendants : IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 2003-5997 CIVIL TERM CIVIL ACTION-LAW PRAECIPE TO DISCONTINUE TO THE PROTHONOTARY: Please discontinue the above-captioned matter without prejudice. ~espectfully submitted,//? David A. Baric, Esquire I.D. 44853 19 West South Street Carlisle, Pennsylvania 17013 (717) 249-6873 Attorney for Plaintiff, Orrstown Bank dab.dir/orrstownbank/kloza/discontinue, pra CERTIFICATE OF SERVICE I hereby certify that on September 16, 2004, I, David A. Baric, Esquire of O'Brien, Baric & Scherer, did serve a copy of the Praecipe To Discontinue, by first class U.S. mail, postage prepaid, to the parties listed below, as follows: Michael T. Traxler, Esq. Abom& Kutulakis, LLP Car31i6slSe~ eeU~n~Hsya~;2~aStrle7~ 13 / 7 David A. Baric, Esquire