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HomeMy WebLinkAbout04-0682GUISSEPP1 BARONE and LUIGI AMBROSINO, t/d/b/a BROTHERS PIZZA, Plaintiffs VS. VINCENZO PUGLiESE, Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNA. CIVIL ACTION - LAW CONFESSION OF JUDGMENT Pursuant to the authority contained in the warrant of attorney, a copy of which is attached to the Complaint filed in this action, I appear for the Plaintiffs and confess judgment in favor of the Plaintiffs and against the Defendant as follows: (1) 17 unpaid monthly installments (September 2003 - February 2004); $34,000.00 (2) Interest on unpaid installments at 6% of amounts due; and $ 2,040.00 (3) Attorney's fees at 10% of amounts due $ 3,604.00 Total $39,644.00 Plus interest, reasonable attorney's fees and costs of suit. Prothonotary GUISSEPPI BARONE and LUIGI AMBROSINO, t/d/b/a BROTHERS PIZZA, Plaintiffs VS. VINCENZO PUGLIESE, Defendant 1N THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNA. CIVIL ACTION - LAW No. COMPLAINT Plaintiffs Guisseppi Barone and Luigi Ambrosino, by and through their counsel, Kelly, Hoffman & Goduto LLP, assert the following Complaint against Defendant, Vencenzo Pugliese: 1. Plaintiffs Guisseppi Barone and Luigi Ambrosino are adult individuals currently trading and doing business as Brothers Pizza, with a principal place of business at 520 Cockley Road, Harrisburg, Pennsylvania 17111. 2. Defendant Vincenzo Pugliese is an adult individual and has a license to do business as Brothers Pizza, 265 Cumberland Parkway, Mechanicsburg, Pennsylvania 17055 pursuant to a Business Purchase Agreement with Plaintiffs. 3. On or about January 1, 2000, Defendant Vincenzo Pugliese signed a Promissory Note wherein he promised to pay Plaintiffs the principal sum of $100,000.00. (See copy of original Promissory Note, attached hereto as Exhibit A). 4. Pursuant to the terms of the Promissory Note, Defendant promised to pay Plaintiffs the principal sum of $100,000.00 payable in equal monthly installments of $2,000.00, including interest and until fully paid, commencing on the date of execution of the Note. 5. Month to month thereafter, Defendant made partial payments on the Note through August 2002, leaving a principal balance due in the amount of $36,000.00. 6. Defendant has failed to make every $2,000.00 monthly payment from September 2002 through February 2004. 7. Pursuant to the terms of the Note, Plaintiffs are authorized to file a confession of judgment against Defendant for the amount then appearing due under the Note. Judgment has not been entered against the Defendant under the Note in any other jurisdiction. 9. Judgment is not being entered by confession against a natural person in connection with a consumer credit transaction. WHEREFORE, Plaintiffs Guisseppi Barone and Luigi Ambrosino respectfully request that this Honorable Court enter judgment in their favor and against Defendant in the amount of: (1) 17 unpaid monthly installments (September 2003 - February 2004); (2) Interest on unpaid installments at 6% of amounts due; and (3) Attorney's fees at 10% of amounts due Total $34,000.00 $ 2,040.00 $ 3,604.0O $39,644.00 Dated: February ~]~, 2004 Respectfully submitted, KELLY/7~&M~ GO D U TO LLP By ~ire Attorney I.D. #84730 Robert E. Kelly, Jr., Esquire Attorney I.D. #21925 Commerce Towers - 10th Floor 300 North Second Street P.O. Box 62003 Harrisburg, PA 17106-2003 (717) 920-8100 Attorneys for Plaintiffs Guisseppi Barone and Luigi Ambrosino VERIFICATION [, Guisseppe Barone, hereby state that I have read the foregoing Complaint, which has been drafted by counsel. The factual statements contained therein are true and correct to the best of my knowledge, information and belief, although the language is that of counsel, and, to the extent that the content of the foregoing document is that of counsel, I have relied upon counsel in making this Verification. I understand that the statements therein are made subject to the penalties of 18 Pa. C.S.A. § 4904 relating to unsworn falsifications to authorities. Dated: January t2~) , 2004 eppe VERIFICATION I, Luigi Ambrosino, hereby state that I have read the foregoing Complaint, which has been drafted by counsel. The factual statements contained therein are true and correct to the best of my knowledge, information and belief, although the language is that of counsel, and, to the extent that the content of the foregoing document is that of counsel, I have relied upon counsel in making this Verification. I understand that the statements therein are made subject to the penalties of 18 Pa. C.S.A. § 4904 relating to unsworn falsifications to authorities. J~igi Ambrosino Dated: January ~, 2004 PROMISSORY NOTE Amount: $100,000.00 Place: Mechanicsburg, PA DATE: FOR VALUE RECEIVED, the undersigned, Vincenzo Pugliese, promises to pay to Guiseppe Barone and Luigi Ambrosino, the principal sum of One Hundred Thousand ($100,000.00) Dollars, payable in equal monthly installments of Two Thousand ($2,000.00) Dollars, including interest, until fully paid, with the first payment due upon the execution of this Note. The undersigned authorizes any attorney at law to appear in any court of record, state or federal, in the United States of America, to confess judgment against the undersigned in favor of the holder of this Note for the amount then appearing due, together with interest, costs of suit and ten (10%) percent for attorney's collection fee. This warrant of attorney may be exercised, from time to time, and no one exemise of said warrant shall exhaust the same. IN WITNESS WHEREOF, this Note has been executed the day and year first a~ove noted. WITNESS: ~TN~ENZO PUGLIESE GUISSEPPI BARONE and LUIOI AMBROSINO, t/d/b/a BROTHERS PIZZA, Plaintiffs VS. VINCENZO PUGLIESE, Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNA. CIVIL ACTION - LAW No. ;oLD- NOTICE UNDER RULE 2958.1 OF JUDGMENT AND EXECUTION T}IEREON TO: VINCENZO PUGLIESE 1021 Yverdon Road Camp Hill, PA 17011 (Residence) VINCENZO PUGLIESE Brothers Pizza 265 Cumberland Parkway Mechanicsburg, PA 17055 (Business) A Judgment in the mount of $39,644.00 has been entered against you and in favor of the Plaintiffs without any prior notice or hearing based on a confession of judgment contained in a written agreement or other paper allegedly signed by you. The Sheriff may take your money or other property to pay the Judgment at any time after thirty (30) days after the date on which this Notice is served on you. You may have legal rights to defeat the Judgment or to prevent money or property from being taken. YOU MUST FILE A PETITION SEEKING RELIEF FROM THE JUDGMENT AND PRESENT IT TO A JUDGE WITHIN THIRTY (30) DAYS AFTER THE DATE ON WHICH THIS NOTICE IS SERVED ON YOU OR YOU MAY LOSE YOUR 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 LEGL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Legal Services 8 Irvine Row Carlisle, PA 17013 (7 l 7) 243-9400 Dated: February ~" ,~2004 Respectfully submitted, Attorney I.D. #84730 Robert E. Kelly, Jr., Esquire Attorney I.D. #21925 Commerce Towers - l0th Floor 300 North Second Street P.O. Box 62003 Harrisburg, PA 17106-2003 (717) 920-8100 Attorneys for Plaintiffs Guisseppi Barone and Luigi Ambrosino NOTICE TO THE DEBTOR/DEFENDANTS AS REOUIREID BY 42 Pa.C.S.A. ~ 2756 TO: V1NCENZO PUGLIESE 1021 Yverdon Road Camp Hill, PA 17011 (Residence) VINCENZO PUGLIESE Brothers Pizza 265 Cumberland Parkway Mechanicsburg, PA 17055 (Business) Attached hereto you will find a copy of Pennsylvania Rule of Civil Procedure 2959 which provides instructions regarding the procedure to follow to strike a confessed judgment. You should be further advised that any party to a confessed judgment which has been incorrectly identified is entitled to costs and reasonable attorney's fees as determined by the Court. Attorney for Plaintiffs Guisseppi Barone and Luigi Ambrosino CONFESSION OF ,}UDGMENT Rule 2959 from thc judgntcnl wilhin lhirb, days ;ll~m sc:-,'icc W, ti~c: no,ice as rcquhed by Rule 2959(a)(3). Adopted A~ri} l, I99~, effective July 1, )996 Explanato~ Comment~1996 The mits o~ civil procedure goveufiag confession of meat for money have been revised in two major respects: bar in complying wilb Jordan ~ Fox. Rothschild, O'Brien & Frankel, 20 F.3d 1250 (C.A.3 1994). The significance of the Under Rule 2958.4. tim plaintiff' must choose whether to give dfirry-days' advance notice under Rule 2958.1 or In ewe ~otice as part of the execution process under Rules 2958.2 and 2958.3. Subdivision (a) of the rul~ provides that a plaintiff who has given notice pursuant to Rule 2958.l may not proceed also under Rule 29582 or Rule 2958.3. Hvwever, once having given the required notice, the plaintiff need not give notice again on a subseq~lenl execution on th~ same judgmem The intent of Ihese ~ules is to iindt the necessity for hearings on issues o[ due process and waiver by providing dm defendam with a pr~deprivation notice and oppo~uni~ for hearing Iht merils. However, new Rule 2959(a)(2) specifies d~ree instances when the issue o[ the vo~untau, imelJigem and ~owJng waiver o[ due process rights may be raised. The first is in support of a request (Bt a stay when the courI has Rule 2959. StriMng Off or OpeMng Judglnem; ~Pleadings; Procedure Sought by petition. Except as provided in subparagraph (2), all grounds for relid whether te str~kc oil thc petition The petition Illay he likd m tl~c county ~hich thc judgment w~ls c~riginally cmcrcd, iu ~my c~lhct cmmty m wldc~ tim sherilf Ires received a writ nj CXCCLmOU dh'coted tO the sheriff to enforce the jtLdgmer~t. (2) The ground that dm waiver o[ the due process rights of notice and hearing was not volunta~, in/viii- gem and knowing shall be rai~ed only (i) in support of a further request for a stay of cxccu[ioti where the court has not stayed execution despite the timdy filing of a petition for relief from the judgment and the presemation of prima facie evidence ufa de[c[~se; and (ii) as provencal by Rule 2958.3 or Rule 2973.3. (3) if written notice is seined upon the petitioner pursuant to Rule 2956.1(c)(2) 0r Rule 2973.1(c), the petition shall he tiled wlthiu ddrty days alter such strict. Unless the defendant can demonstrate that there were compdhng reasons for the delay, a petition nor tlmdy fikd shal~ be denied. (b) If the petkion states prima facie grounds for relief tl~e court shall issue u m(e te show cause an~ may gram a stay or proceedings. Alter being se~ed wk~ a copy of the petition the pbintiff shall file an answer on or before the return day o~ the rule. Tl~e return day of tim nde sha~l be fixed by the cour~ by local m}e or spedal order (c) A par~ waives all defenses and ob~ecr~ons which ate not included in d~e petition or answer. answer shall be seined as provided in Rule 440. (e) ~e court shall dispose of Iht rule ua petition may stay proceedings on the ~etition insofar as it seeks lo open risc judgment pending disposition of the appE- cation to strike off the judgmem. I1 evidence is prod~med which in a jtt~ lrial would require the issues jodgment. (0 The lien oC the judgment or of any levy or attachln~nt shall bc presc~ed w[d~e the proceedings to 277 Rule 2959 RULES OF CiVIL PROCI~;DURI~ This is consisted wgh subdivision (a) of Rule 2959 which relief. record If Ibc judgment debtor should seek Io strike tim the original confession may be essentiah For this purpose, the judgment debtor can, under the authority of Rule 3002(c), file in the outside county a certified copy of all m any part of the record, testimony or e.~chibits in the original ~ction Ne**' Rule £959(f). 3m order of court o~cn/og a iudgraen( final disposition of the proceeding, 7 Stand. Pa,prac. 172, 1.74 §§ 138, 142. To thc contrary an order of court striking a judgment annuls the ecu of the judgment or of any execution issued on it. 7 Stand. Pa. Proc. 2,14 §§ 223. 224. However, the mere filing of a peouon to open or strike a judgmem does not affect the lien of the judgment or of any execution pending decision on tbe petition. Subdivision (D has been added to Rule 2959 to restate tbis principle Section 1722(b) of the Judicial Code authorizes the Supreme Court to promulgate general rules on the subject of liens and create a special remedy under wbieb a creditor of a judgment debtor might attack a judgment confessed by that debtor in and the filing of a bond to protect thc judgment plaintiff. Tim Act preserved the lien of any levy whicb had been made pending lermination of tbe proceedings. Tbe Act was sus- pended in 1969 by Rule 2975(5) [rescindedj with respect to and it has been repealcd by JAP. P.. Explanatory Connnent--1996 The rules of civil procedure governing confession ol jude- fl Notice hat In compIyiag witb Jot'dali v I;o34 RoO*schild, O'B,fetl & ?rwtkel, 20 F.Jd 1250 (CA,3 [994) The significance of the opinion was sta~ed by Judge R. Stanton We[tick, Jr, in S & 7' Bank v Coj,l*e, No GD 94M2141 (Alb:gbcny County, Augus~ D, 1994): rights to notice and a hearing. Under new Rule 2959(a)(3)~ a defendant must file a petition on issues of due process and waiver by providing the defendant the merns. However, new Rule 2959(a)(2) specifies three knowing waiver of due process rights may be raised, The first new Rule 2958.2. The tbird is when a defendant in possession Rule 2960. Proceedings upon Opening of Judg- ment. Pleadings. JuryTrial. Waiver If a judgment is opened in whole or in part the issues to be tried shall be defined by the complaint if a complaint bas been filed, and by the petition, answer and the order of the court opening the judgment. There shall be no further pleadings. The right to a jury trial on the opened judgment shall be deemed waived unless a party files and serves a written demand for jury trial within twenty days after the order opening judg- ment; but if the issue is referred to compulsory arbitration, Rule 1007.1 shall apply. Adopted June 27, 1969, effective .lan. i, 19'70. Ameuded Oct. 4, 19'73, effective Dec. 1, 1973: April 1, 1996, effective July 1, 1996. Explanatory Comment--1973 A new sentence bas been added to the existing Rule to;,.;:, incorporate tile principles of Rule 1007 and Rule 1007.1 respecting demand or waiver of jury trial upon an opened judgment. Tbe demand need not be made until alter the judgment is opened or, if the opened judgment is ti} c~ntpnlsory arhitl'ation, need not be made until the Rule 2961. Application of ~nendtneuts to pend lng Actions (a) The am¢l'~dntel:ts promulgated in 1996 to rules of civil procedure prohibiting the entry judgment by confession for money in co consumer credit transaction shall apply to contmenccd after thc effective date set forth in Order of thc Supreme Court. Note. Thc amendments Io Rules 2950, 295i and 2 278 Donald L. Carmelite, Esquire Attorney I.D. #84730 KELLY, HOFFMAN & GODUTO LLP Commerce Towers - 10th Floor 300 North Second Street P.O. Box 62003 Harrisburg, PA 17106-2003 (717) 920-8100 Attorneys for Plaintiffs AFFIDAVIT PURSUANT TO PA.R.C.P. 2951 (A) (2) (ii) COMMONWEALTH OF PENNSYLVANIA COUNTY OF DAUPHIN SS. I, Donald L. Carmelite, being duly sworn according to law, depose and say that I am authorized to make this Affidavit on behalf of Plaintiffs; and that judgment is not being entered by confession against a natural person in connection with a consmner credit transaction. Donald L Carmelite, Esquire Attorney for Plaintiffs SWORN TO AND SUBSCRIBED before me this ~Tr~ day of ~.a~ ,2004. My Commission Expires: ~ember, Pen~sy/vaniaAssociatior~ Donald L. Carmelite, Esquire Attorney I.D. #84730 KELLY, HOFFMAN & GODUTO LLP Commerce Towers - 10th Floor 300 North Second Street P.O. Box 62003 Harrisburg, PA 17106-2003 (717) 920-8100 Attomeys for Plaintiffs GUISSEPPI BARONE and LUIGI AMBROSINO, t/d/b/a BROTHERS PIZZA, Plaintiffs VS. VINCENZO PUGLIESE, Defendant 1N THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNA. CIVIL ACTION - LAW No. CERTIFICATION OF ADDRESSES I, Donald L. Carmelite, Esquire, attorney for Plaintiffs, certify that the present address of Plaintiffs is 520 Cockley Road, Harrisburg, Pennsylvania 1711 l, and the last known address of Defendant, Vincenzo Pugliese, is: 1021 Yverdon Road Camp Hill, PA 17011 (Residence) Brothers Pizza 265 Cumberland Parkway Mechanicsburg, PA 17055 (Business) Attorney for Plaintiffs OFFICE OF THE PROTHONOTARY COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA TO: VINCENZO PUGLIESE 1021 Yverdon Road Camp Hill, PA 17011 (Residence) VINCENZO PUGLIESE Brothers Pizza 265 Cumberland Parkway Mechanicsburg, PA 17055 Business) GUISSEPPI BARONE and LUIGI AMBROSINO, t/d/b/a BROTHERS PIZZA, Plaintiffs VS. V1NCENZO PUGLIESE, Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNA. CIVIL ACTION - LAW NOTICE Pursuant to Pa.R.C.P. Rule 236, please~advised that judgment by confession in the above proceeding was entered against you on ~g~ I 7 ,2004, in the amount of: 1. 17 unpaid monthly installmems on the Promissory Note $ 34,000.00 2. Interest on unpaid installments at 6% of amounts due $ 2,040.00 3. Attorney's fees at 10% of amounts due $ 3,604.00 Total $ 39,644.00 Plus additional interest, reasonable attorney's fees and costs of suit. Copies of all documents filed are attached hereto. Prothonotary GIUSSEPPE BARONE and LUIGI AMBROSINO, t/d/b/a BROTHERS PIZZA, Plaintiffs VINCENZO PUGLIESE, Defendant : 1N THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : : NO. 04-682 CIVIL TERM : JURY TRIAL DEMANDED DEFENDANT'S OMNIBUS PETITION TO OPEN CONFESSED JUDGMENT, APPLICATION TO STAY EXECUTION PENDING FINAL DISPOSITION, AND MOTION TO CONSOLIDATE ACTIONS Defendant Vincenzo Pugliese, by and through his attomeys, McNees Wallace & Nurick LLC, petitions this Court, pursuant to P^. R. Civ. P. 2959 to open the judgment confessed against him on February 17, 2004 and to stay execution pending final disposition of these proceedings pursuant to PA. R. Civ. P. 2959(b) and 3121(b)(2). Defendant further moves, pursuant to P^. R. CIV. P. 213, to consolidate this action with the action pending before this Court at docket number 04-691. In support of his petition and motions, Defendant states as follows: 1. On or about January 2, 2000, Defendant Vincenzo Pugliese ("Mr. Pugliese") entered into a Business Purchase Agreement ("Agreement") to purchase the Brother's Pizza located at 265 Cumberland Parkway, Mechanicsburg from Plaintiffs Giusseppe Barone and Luigi Ambrosino, t/d/b/a Brothers Pizza. A true and correct copy of the Agreement is attached hereto as Exhibit A. 2. Pursuant to the Agreement, the purchase price for the business was $150,000.00. (Exhibit A, ¶ 2.) 3. In connection with the pumhase of the business, Mr. Pugliese executed a Promissory Note for the sum of $100,000.00, payable in monthly installments of $2,000.00. (See Exhibit A, ~ 2(b), and Promissory Note attached as Exhibit A to Plaintiffs Complaint for Confession of Judgment.) 4. On February 17, 2004, Plaintiffs confessed judgment against Mr. Pugliese, alleging that in or about September, 2002, Mr. Pugliese stopped making monthly payments under the Promissory Note, leaving abalance of $36,000.00. (Complaint for Confession of Judgment, ~1~15-6.) 5. On February 18, 2004, Plaintiffs initiated a separate action in this Court, at docket number 04-691, by filing a Complaint against Mr. Pugliese for allegedly breaching the same Business Purchase Agreement by failing to make the $2,000.00 monthly payments. A true and correct copy of the Complaint, without attachment, in the companion action is attached hereto as Exhibit B and incorporated herein by reference. 6. The Complaint in the companion action alleges that Mr. Pugiiese made the last monthly payment in February, 2003, not in August, 2002 as alleged in the Complaint for Confession of Judgment. (Complaint, ¶ 6.) 7. On March 4, 2004 Mr. Pugliese filed his Answer with New Matter and Counterclaims to Plaintiffs' Complaint. A true and correct copy of the Answer with New Matter and Countemlaims is attached hereto as Exhibit C and incorporated herein by reference. 8. A confessed judgment should be opened where the petitioner: (i) moves to open within thirty days after service of notice of execution on the judgment; and, (ii) alleges a meritorious defense. 9. The judgment by confession was not entered until February 17, 2004. Accordingly, Defendant's Petition to Open is timely under P^. R. CIV. P. 2959(a)(3). 10. The confessed judgment should be opened because Plaintiffs materially breached the Agreement before Mr. Pugliese stopped making the monthly payments, and therefore Mr. Pugliese has a meritorious defense to Plaintiffs~ claims for continued payment under the Agreement and Promissory Note. 11. Plaintiffs breached the Agreement by failing to comply with a restrictive covenant contained therein. 12. Pursuant to the terms of the Agreement, Mr. Pugliese began operating a pizza shop under the name "Brother's Pizza" at 265 Cumberland Parkway, Mechanicsburg, Cumberland County, Pennsylvania, in January, 2000. 13. Paragraph 10 of the Agreement provides as follows: 10. RESTRICTIVE COVENANT. Sellers hereby agree that for a period of six (6) years, Sellers will not compete with Buyer through the operation and/or ownership of a pizza shop within a radius of three (3) miles of the business location at 265 Cumberland Parkway, Mechanicsburg, Cumberland County, Pennsylvania. 14. In February, 2003, Defendant learned that Plaintiffs had opened a pizza shop, trading and doing business as "Brothers Pizza" at 4910 Louise Drive, Mechanicsburg, Pennsylvania, which is approximately 2.5 miles fi.om Defendant's pizza shop. (See internet yellow pages showing the addresses of the two pizza shops, and Mapquest and Mapblast pages showing the distance between the two shops, all attached hereto as Exhibit D.) 15. The shop opened by Plaintiffs competes with Defendant's shop and has taken substantial lunch business from Defendant's shop. 16. Plaintiffs continue to own and operate Brothers Pizza less than three (3) miles from Defendant's shop. 17. Plaintiffs' ownership and operation of a competing shop less than three (3) miles from Defendant's shop was and is a material violation of the Agreement. 18. Mr. Pugliese continued making monthly payments pursuant to the Agreement through February, 2003, when he learned that Plaintiffs were violating the restrictive covenant. 19. Plaintiffs' material violation of the Agreement terminated further obligations of Defendant to pay any sums to Defendant, and constitutes a meritorious defense to the confessed judgment. 20. Because Defendant has a meritorious defense to the confessed judgment, execution on the judgment should be stayed pending final disposition of the proceedings, pursuant to Pa. R. Civ. P. 2959(b) and 3121(b)(2). 21. Because this action and the one initiated by Plaintiffs against Defendant at docket number 04-691 are both pending in this Court, involve common questions of law and fact, and arise from the same transaction and occurrence, the two actions should be consolidated pursuant to P^. R. Civ. P. 213 upon opening of the confessed judgment. 4 WHEREFORE, Defendant Vincenzo Pugliese respectfully requests that the judgment confessed against him be opened and that the merits of Plaintiffs' claims and Defendant's defenses and counterclaims be tried by a jury. Defendant further requests that execution on the confessedjudgment be stayed pending a final disposition of Defendant's Petition to Open, and that, upon opening of the judgment, this action be consolidated with the action docketed to number 04-691. Dated: March /f, 2004 McNEES WALLACE & NURICK LLC By Alan R. Boynton, Jr./r- Attorney I.D. No. 39850 Susan V. Metcalfe Attorney I.D. No. 85703 100 Pine Street P. O. Box 1166 Harrisburg, PA 17108-1166 (717) 232-8000 Attorneys for Defendant BUSINESS PURCHASE AGREEMENT THIS AGREEMENT, made the __ day of 2000, by and between GIUSEPPE BARONE and LUIGE AMBROSINO, trading as Brother's Pizza, hereinafter referred to as "Sellers", and VINCENZO PUGLIESE, trading as Brother's Pizza, 265 Cumberland Parkway, Mechanicsburg, PA, hereinafter referred to as "Buyer". WITNESSETH: WHEREAS, the Cumberland Parkway, and Sellers operates a pizza establishment at 265 Mechanicsburg, Cumberland County, Pennsylvania; WHEREAS, Buyer desires to acquire from Sellers certain assets of the business and the right to operate the business under the name Brother's~Pizza, 265 Cumberland Parkway, Mechanicsburg, at the same location; and WHEREAS, the parties desire to set forth the conditions under which the business transfer shall occur. NOW, THEREFORE, in consideration of the mutual promises hereinafter contained, the parties, intending to be legally bound follows: hereby, agree as 5erms and 1. SALE OF ASSETS: Sellers agree to sell and Buyer agrees to buy the following: A. All inventory of merchandise and supplies necessary in the operation of the business. B. Ail machinery, equipment, tools, furniture and leasehold improvements as identified on Exhibit "A" attached hereto and made a part hereof. C. A license to use the bus±ness trade name known as ~Brother's Pizza" and all other names, logos, trademarks and recipes used in connection with the operation of the business. D. The business telephone numbers and yellow page advertisements. E. Assignment of the commercial lease for 265 Cumberland Parkway, Mechanicsburg, Cumberland County, Pennsylvania. 2. PURCHASE PRICE. Buyer shall pay to Sellers for the purchase of said assets the sum of One Hundred Fifty Thousand {$150,000.00) Dollars at settlement, payable as follows: (a) Five Thousand ($5,000.00) Dollars, paid in advance as a deposit, receipt of which is hereby acknowledged by Sellers. (b) A promissory note with confession of. judgment in the amount of One Hundred Forty-Five Thousand ($145,000.00) Dollars, including interest, payable at the rate of Two Thousand ($2,000.00') Dollars in equal monthly installments, with the first payment due at settlement. 3. COLLATERAL TO SECURE THE BALANCE OF THE PURCHASE PRIC.~i. In order to secure the payment of the balance of the purchase price under the terms hereinabove set forth, the Buyer does hereby pledge as collateral a security interest in all inventory, fixtures, equipment and proceeds therefrom. In addition, Buyer agrees to execute a financing statement evidencing a security interest for purposes of recording in bo~h the County and the Commonwealth of Pennsylvania. 4. SETTLEMENT. parties may mutually January 1, 2000. full 2000. Settlement shall occur at such place as the agree, with an effective date retroactive to S. BUSINESS LIABILITIES AND EXPENSES. Sellers agree to assume responsibility for all operating expenses through January 1, compensation due Sellers' through January 1, 2000. 7. RISK OF LOSS. employees arising for services EMPLOYEES. Sellers shall be liable for all wages and other performed Sellers assume all risk for loss or destruction of property or damage due to fire, of God, the elements~ accident or the destruction of property losses through January 1, 2000, to Sellers' business and assets. 8. ITEMS TO BE DELIVERED BY SELLER. At settlement, Sellers shall deliver to the Buyer the following: A. theft, casualty, acts and the A Bill of Sale covering all tangible and intangible assets. B. An assignment of the lease for the business location. C. Assignment of the business telephone numbers. 9. INSPECTION/CONDITION OF PROPERTY. Buyer and Sellers acknowledge that the Buyer has made an inspection of the property to be purchased and that he is buying the property "as is". The Buyer shall be entitled to a pre-settlement inspection of the property, with the property to be in a similar and like condition as it was on the date of the execution of this Agreement. Sellers offer no warranties wi~h regard to the condition of any property being sold hereunder. i0. RESTRICTIVE COVENANT. Sellers hereby agree that for a period of six (6) years, Sellers will not compete with Buyer through the operation and/or ownership of a pizza shop within a radius of three (3) miles of the business location at 265 Cumberland Parkway, Mechanicsburg, Cumberland County, Pennsylvania. 11. BROKERAGE FEES. Each party hereto represents and warrants to the other that no broker is entitled to any commission, or similar fee, in connection with the making and carrying out of this Agreement. 12. DEFAULT. In the event Buyer violates or fails to fulfill and perform any of the terms and conditions of this Agreement, all sums paid by Buyer on account of the purchase price shall be retained by Sellers as liquidated shall be Agreement. 13. released from MISCELLANEOUS. damages for such breach, and the Sellers all liability or obligation under this A. Costs. Buyer and Sellers each agree to pay their own costs and expenses in connection with the transactions contemplated by this Agreement, including, without limitation, legal and accounting expenses. B. Survival. All representations, covenants, warranties and agreements contained in this Agreement shall survive closing and shall not terminate. C. Entire Aqreement. This Agreement constitutes the entire agreement and understanding of the parties, and no modification shall be binding upon either party unless in writing and signed by the parties hereto. D. Law. Benefit. The provisions of this Agreement shall be governed and construed in accordance with the laws of the Commonwealth of Pennsylvania. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. E. Attorneys' Fees. In the event that either party breaches this Agreement or any of the obligations or undertakings which form a part of this Agreement, the breaching party shall be obligated to reimburse the non-breaching party for reasonable attorney's fees and court costs incurred as a result of such breach. WITNESS: SELLERS: WITN~/S:,. usEy LUIGE AMBROSINO BUYER: EXHIBIT '~A" List of Business Ec[uiDment 1 Walk-in Cooler 8 Booths 8 Tables 32 Chairs 2 ConTinental Pizza Units 1 Star Grill 1 Pitco French Fryer 1 McGowan Sub Unit 1 4-Pie Bakers Pride Ovens 4 Foot Stand 6 Foot Stainless Steel Table 4 Shelves 1 Ice Machine, Macintosh 2-Door Continental Freezer 1 80-Quart Hobart Machine 1 Automatic Slicing Machine, Berkel 1 Bread Rack 1 Hand Sink 3-Bay Sink 1 Mop Sink 36 Dough Pans 2 Stoves Cash Register Ail Other Removal Fixtures and Equipment Located at 265 Parkway, Mechanicsburg, Cumberland County, PA 99-569/4260-1 Cumberland ,- EE8-17-2004 TUE 01:54 PR KRGLLP FR× NO, 717R093052 P, 02 LUIOI AMBROSINO, Plaintiffs VINCENZO PU~, Defendant IN THE COURT OF CC CUMBERLAND COLIB NO. Or- TO: VINCENZO PUGLIESE 1021 Yverdon Road Camp Hill, PA 1701 t (Residence) ~ VINCENZO PUOLIESE Brothers Pizza 265 Cumberland Parkway Mechanicsburg, PA 17055 (Business) NOTICE YOU HAVE BEEN SUED IN COURT. If you wish to defend against the elf following pages you must take action witkin t_w~nty (')O) _~s after this Corn are served, by entering a written appearance personally or by attorney and fill the Court your defenses or objections to the claims set forth against you. you fail to do so the case may proceed without you and a judgment may be en by the Court without further notice for any money claimed in the Complaint claim or relief reqnested by the Plaintiff. You may lose money or property or important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. I HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET FORT] OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRIN IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFF/CE MA PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MA' SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR CUMBERLAND COUNTY BAR ASSOCIATION 2 Liberty Avenue Carlisle, PA 17013 (717) 249-3166 (800) 990-9108 TRUE COF In Testimony wh~ MMON PLEAS TY, PENNA. ns set tbrth in the ~laint and Notice ~g in writing with are warned that if ~red against you : for any other other rights YOU DO NOT BELOW. THIS 3 A LAWYER. BE ABLE TO OFFER LEGAL WO FEE. FROM RECORD re~f, i here unto set my hand .EEB-17-2004 TUE 01:54 PN KH6 LLP F~× NO, 717~0930E AVISO USTED HA SIDO DEMANDADO/A EN CORTE. Si usted desea defender,, que se presentan m~s ~elante en las siguientes p~ginas, debe romar aeci6n d pr6ximos veinte (20) dias despu~s de la notificaci6n de esta Demonda y Avis personaknente o por medio de un abogado trna comparecencia escrita y radic escrito sus defensas de, y objeecione$ a, las demandas presentadas aqui en co adviene de que si usted falla de romar acci6n como se describe anteriormente proceder sin usted y un fallo pot cualquier suma de dinero reclamada en la de otra reclamaci6n o remedio solicitado por el demandante puede set dietado m Cone sin m~ aviso adieionaL Usted puede perder dinero o propiedad u otto,, impor£ante$ para usted. USTED DEBE LLEVAR ESTE DOCUMENT0 A SU ABOGADO INMEDI USTED NO TIENE UN ABOGADO, LLAME 0 VAYA A LA SIGUiENT OFICINA PUEDE PROVEERLE INFORMACION A CERCA DE COMO ABOGADO, SI USTED NO PUEDE PAGAR POR LOS SERVICIOS DE UN ABOGA QUE ES~TA OFICINA LE PUEDA PROVEER INFORMACION SOBRE A( OFREZCAN SERVICIOS LEGALES SIN CARGO 0 BAJO COSTO A PEI CUALIFICAN. CUMBERLAND COUNTY BAR ASSOCIATION 2 Liberty Avenue Carlisle, PA 17013 (717) 249-3166 (800) 990-9108 ?, 03 ~ de las demandas mtro de los ) radicando redo en la Cone pot ~tra suya, Se le , el caso puede ~aanda o eualquier contra suya pot la derechos ATAMENTE. SI OFICINA. ESTA 0NSEOUIR UN ), ES POSiBLE }ENCIAS QUE ' SONAS QUE GUISSEPPI BARONE and LUIGI AMBROSINO, Plaintiffs VS. VINCENZO PUGLIESE, Defendant 1N THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNA. NO. COMPLAINT Plaintiffs Guisseppi Barone and Luigi Ambrosino, by and through their counsel, Kelly, Hoffrnan & Goduto LLP, assert the following Complaint against Defendant, Vincenzo Pugliese: PARTIES 1. Plaintiffs Guisseppi Barone and Luigi Ambrosino are adult individuals currently trading and doing business as Brothers Pizza, with a principal place of business at 520 Cockley Road, Harrisburg, Permsylvania 17111. 2. Defendant Vencenzo Pugliese is an adult individual with a last known address of 1021 Yverdon Road, Camp Hill, Pennsylvania 17011. FACTS 3. On or about January 2, 2000, Defendant entered into a Business Purchase Agreement (the "Agreement") with Plaintiffs to purchase the Brothers' Pizza located at 265 Cumberland Parkway, Mechanicsburg, Cumberland County, Pennsylvania ("Cumberland Parkway Brothers Pizza"). See Business Purchase Agreement, attached hereto as Exhibit "A". 4. Pursuant to the Agreement, Plaintiffs are obligated to provide Defendants with the Cumberland Parkway Brothers Pizza, or more specifically, certain machinery, equipment, tools, furniture, leasehold improvements, and a license to use the business trade name known as Brothers Pizza and ail other names, logos, trademarks and recipes used in connection with the operation of the Cumberland Parkway Brothers Pizza. 5. According to the terms of the Agreement, Defendant is obligated to: (a) Pay Plaintiffs Five Thousand ($5,000.00) Dollars, paid in advance as a deposit; Co) Pay Plaintiffs One Hundred Forty-Five Thousand ($145,000.00) Dollars payable at the rate of Two Thousand ($2,000.00) Dollars in equal monthly installments, pursuant to a Promissory Note with confession of judgment; and (c) Pledge collateral to secure the balance of the purchase price by providing a security interest in all inventory, fixtures, equipment and proceeds therefrom to Plaintiffs. 6. Defendant has made partial payments pursuant to the Agreement tkrough February, 2003, leaving a principal balance due in the amount of $69,000.00. 7. Specifically, Defendant made the following payments to Plaintiffs totaling Seventy-Six Thousand ($76,000.00): (a) Five Thousand ($5,000.00) Dollars paid in advance; (b) 37 consecutive monthly payments of Two Thousand ($2,000.00) Dollars from January, 2000 through February, 2003. 8. Defendant is Twenty-Four Thousand ($24,000.00) Dollars in arrears for March, 2003 through February, 2004. 9. Defendant provided Plaintiffs with a security interest in all inventory, fixtures, equipment and proceeds. COUNT I BREACH OF CONTRACT 10. Paragraphs 1 through 9 of Plaintiffs' Complaint are incorporated herein by reference as if fully set forth at length. 11. Defendant entered into a contract with Plaintiffs for the purchase of the Brothers Pizza located at 265 Cumberland Parkway, Mechanicsburg, Pennsylvania. 12. Defendant has materially breached this contract by failing to make the $2,000.00 monthly payment to Plaintiffs from March, 2003 through February, 2004. 13. Plaintiffs have performed all of their duties and obligations under the contract. 14. Plaintiffs sustained damages as a result of Defendant's breach. WHEREFORE, Plaintiffs respectfully request that judgment be entered in their favor, in an amount in excess of the compulsory arbitration limit in Cumberland County, together with such other relief as the Court deems appropriate. COUNT II UNJUST ENRICHMENT 15. Paragraphs 1 through 9 of Plaintiffs' Complaint are incorporated herein by reference as if ~ully set forth at length. 16. Defendant has ceased making payments to Plaintiffs pursuant to the terms of the Agreement since March, 2003. 17. Despite not making payments to Plaintiffs, Defendant still operates the Brothers Pizza located at 265 Cumberland Parkway, Mechanicsburg, Pennsylvania. 18. As a result of Defendant's continued operation of the Brothers Pizza located at 265 Cumberland Parkway, Mechanicsburg, Pennsylvania, Defendant has benefited at no expense to himself by, including but not limited to: (a) utilizing all machinery, equipment, tools, furniture, and leasehold improvements made by Plaintiffs; (b) utilizing the trade name known as Brothers Pizza; (c) utilizing ail other names, logos, trademarks and recipes used in connection with the operation of Cumberland Parkway Brothers Pizza; (d) utilizing profits earned while operating the Cumberland Parkway Brothers Pizza. 19. It would be inequitable, under the foregoing circumstances, for Defendant to retain those benefits without paying Plaintiffs the value of the benefits conferred. 20. Based upon the foregoing, Plaintiffs seek restitution from Defendant. WHEREFORE, Plaintiffs Guisseppi Barone and Luigi Ambrosino, t/d/b/a Brother Pizza, respectfully request that judgment be entered in their favor, in an amount in excess of the compulsory arbitration limit in Cumberland County, together with such other further relief as the Court deems appropriate. Respectfully submitted, KELLY, HOFFMAN & GODUTO LLP By~ ~(~~ d L Carmelite, Esquire Attorney I.D. #84730 Robert E. Kelly, Jr., Esquire Attorney I.D. #21925 Commerce Towers - 10th Floor 300 North Second Street P.O. Box 62003 Harrisburg, PA 17106-2003 (717) 920-8100 Dated: February ~ ~ ,2004 Attorneys for Plaintiffs Guisseppi Barone and Luigi Ambrosino 4 VERIFICATION I, Luigi Ambrosino, hereby state that I have read the foregoing Complaint, which has been drafted by counsel. The factual statements contained therein are true and correct to the best of my knowledge, information and belief, although the language is that of counsel, and, to the extent that the content of the foregoing document is that of counsel, I have relied upon counsel in making this Verification. I understand that the statements therein are made subject to the penalties of 18 Pa. C.S.A. § 4904 relating to unsworn falsifications to authorities. Dated: January z~., 2004 15uigi Ambrosino VERIFICATION I, Guisseppe Barone, hereby state that I have read the foregoing Complaint, which has been drafted by counsel. The factual statements contained therein are true and correct to the best of my knowledge, information and belief, although the language is that of counsel, and, to the extent that the content of the foregoing document is that of counsel, I have relied upon counsel in making this Verification. I understand that the statements therein are made subject to the penalties of 18 Pa. C.S.A. § 4904 relating to unsworn falsifications to authorities. Dated: January O.,-~ , 2004 /j/~ss~ppe Bgrone GIUSSEPPE BARONE and LUIGI AMBROSINO, Plaintiffs VINCENZO PUGLIESE, Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. 04-691 CIVIL TERM JURY TRIAL DEMANDED TO: NOTICE TO PLEAD GIUSSEPPE BARONE and LUIGI AMBROSINO, Plaintiffs, and Donald L. Carmelite, Esquire and Robert E. Kelly, Jr., Esquire, their attorneys: YOU ARE HEREBY NOTIFIED TO FILE A WRITTEN RESPONSE TO THE ENCLOSED NEW MATTER AND COUNTERCLAIMS WITHIN TWENTY (20) DAYS FROM SERVICE HEREOF OR A JUDGMENT MAY BE ENTERED AGAINST YOU. Dated: March.. ¢, 2004 McNEEf~ ALLACE & NURI~C IAlan R. Boynton, Jr. Attorney I.D. No. 39850 Susan V. Metcalfe Attorney I.D. No. 85703 100 Pine Street P. O. Box 1166 Harrisburg, PA (717) 232-8000 Attorneys for Defendant and Counterclaimant GIUSSEPPE BARONE and LUIGI AMBROSINO, Plaintiffs VINCENZO PUGLIESE, Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. 04-691 CIVIL TERM JURY TRIAL DEMANDED ANSWER~ NEW MATTER AND COUNTERCLAIM PARTIES 1. Denied as stated. It is admitted that Plaintiffs are adult individuals and that they are currently doing business at 520 Cockley Road, Harrisburg, Pennsylvania, as "Brothers Pizza." By way of further answer, it is reasonably believed and averred that Plaintiffs are also doing business in Cumberland County, as more fully set forth below. 2. Admitted. FACTS 3. Admitted. 4. Denied as stated. The Business Purchase Agreement attached as Exhibit "A" to the Complaint ("Agreement") speaks for itself. By way of further response, it is admitted that Plaintiffs were obligated to provide Defendant with the pizza shop ("shop"), including the objects and intellectual property identified in Paragraph 4 of the Complaint. The obligations listed, however, are not comprehensive and Plaintiffs were obligated to meet additional terms as well. 5. Denied as stated. The Agreement speaks for itself. 6. Admitted in part and denied in part. It is admitted that Defendant paid to Plaintiffs pursuant to the Agreement through February, 2003. It is denied that a principal balance remains as Plaintiffs' material breach of the Agreement in February, 2003 discharged Defendant's further obligations to make further payments. 7. Denied. Defendant paid to Plaintiffs a sum in excess of $76,000. (a) Admitted. (b) Denied. Defendant paid Plaintiffs thirty-eight (38) consecutive monthly payments, fi.om January, 2000 to and including February, 2003, for a total of $76,000. 8. Denied. Defendant's duty to further pay Plaintiffs terminated in February, 2003 when Plaintiffs materially breached the Agreement. 9. Denied as stated. The Agreement speaks for itself. COUNT I BREACH OF CONTRACT 10. Defendant incorporates by reference as if set forth in full the answers to Paragraphs 1 through 9 of the Complaint. 11. Admitted. 12. Denied. Plaintiffs materially breached the Agreement prior to Defendant stopping payments. 13. Denied. Plaintiffs materially breached the Agreement by opening a competing pizza shop within two miles of the shop sold by them to Defendant. Plaintiffs further materially breached the Agreement by failing to assign the lease to Defendant. 14. Denied. Plaintiffs have suffered no harm as they materially breached the Agreement prior to Defendant's termination of payments to Plaintiffs. WHEREFORE, Defendant requests that judgment be entered in his favor and against Plaintiffs and that costs and fees be awarded to Defendant. 2 COUNT II UNJUST ENRICHMENT 15. Defendant incorporates by reference as if set forth in full the answers to Paragraphs 1 through 9 of the Complaint. 16. Admitted. 17. Admitted. 18. Denied. Defendant has not been unjustly enriched as Plaintiffs, prior to Defendant's termination of payments, deprived Defendant of the consideration due him under the Agreement by opening a competing pizza shop within two miles of the shop sold by Plaintiffs to Defendant, in violation of the terms of that Agreement. 19. Denied. Plaintiffs cannot equitably breach the terms of the Agreement intended to protect Defendant's interest in the shop and then claim harm from Defendant's conduct. By way of further response, Plaintiffs' opening of a competing shop materially harmed the strength of the shop sold by them to Defendant. 20. Denied. Plaintiffs are not entitled to restitution. WHEREFORE, Defendant requests that judgment be entered in his favor and against Plaintiffs and that costs and fees be awarded to Defendant. NEW MATTER 21. Pursuant to the terms of the Agreement, Plaintiffs were obligated to assign to Defendant the lease for the shop. Agreement, ¶¶ 1.E.; 8.B. 22. Plaintiffs failed to deliver an assignment at closing and have since never assigned the lease to Defendant. 23. Plaintiffs' failure to assign the lease has made it impossible for Defendant to sell the shop to a willing purchaser. 24. Plaintiffs~ failure to assign the lease was a material breach of the Agreement. 25. Pursuant to the terms of the Agreement, Defendant began operating a pizza shop under the name "Brother's Pizza" at 265 Cumberland Parkway, Mechanicsburg, Cumberland County, Pennsylvania, in January, 2000. 26. Paragraph 10 of the Agreement provides as follows: 10. RESTRICTIVE COVENANT. Sellers hereby agree that for a period of six (6) years, Sellers will not compete with Buyer through the operation and/or ownership of a pizza shop within a radius of three (3) miles of the business location at 265 Cumberland Parkway, Mechanicsburg, Cumberland County, Pennsylvania. 27. In February, 2003, Defendant learned that Plaintiffs had opened a pizza shop, trading and doing business as "Brother's Pizza" less than two (2) miles from Defendant's pizza shop. 28. The shop opened by Plaintiffs competes with Defendant's shop and has taken substantial lunch business from Defendant's shop. 29. Plaintiffs continue to own and operate Brother's Pizza less than two (2) miles from Defendant's shop. 30. Plaintiffs' ownership and operation of a competing shop less than two (2) miles from Defendant's shop was and is a material violation of the Agreement. 31. Plaintiffs' material violation of the Agreement terminated further obligations of Defendant to pay any sums to Defendant. WHEREFORE, Defendant requests that judgment be entered in his favor and against Plaintiffs on both Counts of the Complaint and that costs and fees be awarded to Defendant. 4 COUNTERCLAIMS COUNT I: BREACH OF CONTRACT 32. Counterclaimant Vincenzo Pugliese CPugliese") incorporates by reference as if set forth in full the responses set forth in Paragraphs 1 through 31 of his Answer and New Matter. 33. The non-competition provision set forth in the Agreement is supported by consideration as it was an integral part of Counterclaim Defendants' Giusseppe Barone and Luigi Ambrosino (Barone/Ambrosino) purchase of the pizza shop. 34. The non-competition provision set forth in the Agreement protected the legitimate business interests of Pugliese. 35. Barone/Ambrosino's actions have been in violation of the terms of the Agreement in that they have: a. directly engaged in direct competition with Pugliese within three (3) miles of Pugliese's pizza shop. b. served as an owner or operator of a pizza shop located within three(3) miles of Pugliese's pizza shop. c. failed to assign the lease to Pugliese. 36. The breach of the Agreement has been knowing, willing and voluntary. 37. As a direct result of Barone's/Ambrosino's actions, Pugliese has suffered the loss of substantial revenues and has been denied the opportunity to convey or otherwise transfer ownership of the shop to a willing buyer. WHEREFORE, Counterclaimant Vincenzo Pugliese requests that judgment be entered in its favor and against Counterclaim Defendants Giusseppe Barone and Luigi Ambrosino, that Counterclaim Defendant be declared in violation of the terms of the Agreement, that 5 Counterclaim Defendants be ordered to pay compensatory damages, as well as attorney's fees, costs and interest to Plaintiff, and other relief, as deemed appropriate by the Court. COUNT II: BREACH OF DUTY OF GOOD FAITH AND FAIR DEALING 38. Counterclaimant Vincenzo Pugliese ("Pugliese") incorporates by reference as if set forth in full the responses set forth in Paragraphs 1 through 37 of his Answer and New Matter. 39. Paragraph 1.C. of the Agreement provides as follows: 1. SALE OF ASSETS. Sellers agree to sell and Buyer agrees to buy the following: C. A license to use the business trade name known as '.'Brother's Pizza" and all other names, logos, trademarks and recipes used ~n connection with the operation of the business. 40. Barone's/Ambrosino's conduct in opening a pizza shop trading under the same name as Pugliese's shortly after assigning the right to use the "Brother's Pizza" name to Pugliese was intended to trade offof the conveyed trade name and to confuse customers as to the ownership and source of goods at the new store. 41. Barone's/Ambrosino's conduct in opening a pizza shop trading trader the same name as Pugliese's shortly after assigning the right to use the "Brother's Pizza" name to Pugliese is a breach of BaroneYAmbrosino's duty of good faith and fair dealing under the Agreement. 42. Pugliese has had numerous customers confuse the ownership of his shop with the one owned by Barone/Ambrosino, with the customers believing that both shops are owned by the same individuals. 43. As a direct result of Barone's/Ambrosino's actions, Pugliese reasonably anticipates the loss of substantial, yet incalculable, revenues. 6 WHEREFORE, Counterclaimant Vincenzo Pugliese requests that judgment be entered in its favor and against Counterclaim Defendants Giusseppe Barone and Luigi Ambrosino, that Countemlaim Defendant be declared in violation of the terms of the Agreement, that Countemlaim Defendants be ordered to pay compensatory damages and costs to Plaintiff, and such other relief as deemed appropriate by the Court. McNEES WALLACE & NLrRICK LLC C~Alan R. ~loyn~on, Jr.t Attorney I.D. No. 39850 Susan V. Metcalfe Attorney I.D. No. 85703 100 Pine Street P. O. Box 1166 Harrisburg, PA 17108-1166 (717) 232-8000 Attorneys for Defendant Dated: March _.t~_, 2004 7 3~ERIFICATION Subject to the penalties of 18 Pa. C.S. §4904, relating to unswom falsification to authorities, I hereby certify that ! have read the foregoing document and that the facts set forth therein are tree and correct to the best of my knowledge, information and belief. ncente Pugliese Dated: March _~, 2004 .CERTIFICATE OF SERVICE I hereby certify that on this date a true and correct copy of the foregoing document was served by United States first-class mail upon the following individual: Donald L. Carmelite, Esquire Robert E. Kelly, Jr., Esquire Kelly, Hoffman & Goduto LLP Commerce Towers - 10th Floor 300 North Second Street P.O. Box 62003 Harrisburg, PA 17106-2003 Dated: March ~, 2004 McNEES WALLACE & NURICK LLC squ~reAlan R Boynton, Susan V. Metcalfe, Esquire 100 Pine Street P.O. Box 1166 Harrisburg, PA 17108-1166 (717) 232-8000 Attorneys for Defendant InfoSpace Page 1 of 2 WebMarket.com ~fibt Recov~ Download MP'~s Flowers Yellow Pages ~'~ White Pages ~) Classifieds I~1 Personals Gift Cards - You never had so much fun with plastic!  Apparel Fast Food Books Jewelry Children Restraunts YOU ARE HERE > Home > MyJnfoSpace > Yellow P~.qes > Listings Yellow Pages Brothers Pi_zza ~reaguides.net Find Pizza with websites, phone numbers, addresses & maps. Restaurant Franchises www. FoodFranchise.com Pizza, ice cream, fast food, & coffee franchise opportunities here Brother's Pizza Results 1 - 2 of 2 ALL LISTINGS Brother's Pizza 265 Cumberland Parkway Mechanicsburg, PA 17055 mad J d_riving directions I +address Book previous I next 717-791-0664 Brothers Pizza 717-795-1800 4910 Louise Dr Mechanicsburg, PA 17055 map J driving directions I +address Book Sports Travel More... Sponsors Datino Personal; Photo Profiles, Singles Events & Hore at Hatch.corn! 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Search for this business: I'Multiple Categories ~ Name of business ~ Type of business City ~'echanicsburg State ['""Pennsylvania ~( qre u red ) http://ypng.infospace.com/ 1 2V4IUC203RPSPVC__info.ultim/ypv3/list.htm?&kcfg=ypu... 2/26/2004 ,, M. apQuest: Driving Directions: North ~erica Page 1 of 2 ~ la~ ¥~tl.o~ Home I I Settirlg_s I Mobile Driving Directions 265 Cumberland Pkwy, Hechanicsburg, PA 17055-5677 US - Hotel Offers - F!~ht Deals 4910 Louise Dr, Hechanicsburg, PA 17055-4800 US - Hotel Offers - Flight Deals Print I E-Nail I Download Lo PDA I Reverse I New Directions Distance Maps <0.! miles Hap 0.2 miles _Naj~ 0.2 miles Hap 1.3 miles Hap Maneuvers 1: Star~ out going East on CUHBERLAND PKWY toward GE~I-YSBURG PIKE. 2: Turn RIGHT onto GETrYSBURG PIKE. $: Turn LEFT onto E WINDING HILL RD. 4: Herge onto US-15 N via the ramp- on the left- toward CAIVlp HILL/HARRISBURG. S: Take the exit toward WESLEY DR/ROSSHOYNE RD. 6: Turn RIGHT onto ROSSMOYNE RD. 7: Turn RIGHT onto LOUISE DR. 8: End at 4910 LOUISE DR HECHANICSBURG PA 0.2 miles Hap 0.2 miles Hap 0.1 miles Hap Total Est. Time: 5 minutes Total Est. Distance: 2.47 miles Why drive when you can fly? Need a place to stay? Search for cheap flights! Find and book a hotel! Hotels -Save up to 70% on Orbitz Savers nationwide. Search Mechanicsburg, PA! Fliahts - Find Iow fares to the Harrisburg, PA area! Car Rentals -Find special offers on rental prices in the Harrisburg, PA area! MapQuest Sear¢ Enter Business or Ca Show Offers: ~ Hotels For Less Travelocity Great Rate Guaranteed. www,travelocity.cor Cheap Hotel Dea Search 1000's of Hot~ Great Rooms for Less. www. ORBITZ.com Cheap Hotels Hotels.corn- NO Credi Save Up to 70% on th www. 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Order Now! .I Start: 265 Cumberland Pkwy, Mechanicsburg, PA 17055 End: 4910 Louise Dr, Mechanicsburg, PA 17055 Total Distance: 2.5 Miles Estimated Total Time: 5 minutes Directions Miles Map Start: Depart 265 Cumberland ~ Pkwy, Mechanicsburg, PA 17055 < 0.1 on Cumberland Pky (East) 1: Turn RIGHT (South) onto Gettysburg Pike towards US-15 N / 0.2 Harrisburg 2: Turn LEFT (East) onto E Winding 0.2 Hill Rd 3: Take Ramp (LEFT) onto US-15 ht~p://mapb~ast~c~m/(rbidhg45dxuuedvazbhysa55)/directi~ns~aspx?&StartName=265+Cu~~~ 2/26/2004 MSN Maps & Directions - Directions Results Page 2 of 2 towards US-15 / Camp Hill / 1.3 Harrisburg 4: Keep RIGHT onto Ramp towards 0.3 Wesley Dr / Rossmoyne Rd 5: Turn RIGHT (South-East) onto Rossmoyne Rd towards 0.3 6: Turn RIGHT (West) onto Louise Dr End: Arrive 4910 Louise Dr, Mechanicsburg, PA 17055 0.1 Your riaht to use maos and routes generated on the MSN seryice s subiect at all times to the MSN Terms of Use. Data cred ts, copyriqht, and disclaimer~ Try MSN Internet Software for FREE! ~SNHome I MyMSN I Hotmail I Shopping I Money I People&Chat I Search i~ ~)~ ~,li~soft ~orporati~n. All rights reserved. Terms of Use Advertise TRUSTe Approved Privacy Statement GetNetWise AntFSpam PoltQ/ http://mapblast.com/(rbidhg45dxuuedvazbhysa55)/directions.aspx?&StartName=265+Cu... 2/26/2004 VERIFICATION Subject to the penalties of 18 Pa. C.S. §4904, relating to unswom falsification to authorities, I hereby certify that I have read the foregoing document and that the facts set forth therein are true and correct to the best of my knowledge, information and belief. Dated: March ~_.., 2004 CERTIFICATE OF SERVICE I hereby certify that on this date a tree and correct copy of the foregoing document was served by United States first-class mail upon the following individual: Donald L. Carmelite, Esquire Robert E. Kelly, Jr., Esquire Kelly, Hoffman & Goduto LLP Commerce Towers - l0th Floor 300 North Second Street P.O. Box 62003 Harrisburg, PA 17106-2003 Dated: March/-/, 2004 McNEES WALLACE & ~CK LLC By Alan R. Boy'ton, Jr.', Esquire Susan V. Metcalfe, Esquire 100 Pine Street P.O. Box 1166 Harrisburg, PA 17108-1166 (717) 232-8000 Attorneys for Defendant IlAR 1 0 2004 GIUSSEPPE BARONE and LUIGI AMBROSINO, t/dgo/a BROTHERS PIZZA, Plaintiffs VINCENZO PUGL1ESE, Defendant : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : NO. 04-682 CIVIL TERM : JURY TRIAL DEMANDED RULE TO SHO~/CAUSE AND ORDER STAYING EXECUTION NOW, this ! .'~ day o ,2004, upon consideration of Defendant's Omnibus Petition to Open Confessed Judgment, Application to Stay Execution Pending Final Disposition, and Motion to Consolidate Actions, a Rule is hereby issued upon Plaintiffs, Giusseppe Barone and Luigi Ambrosino, t/d/b/a Brothers Pizza, to show cause why the confessed judgment should not be opened. Execution on the confessed judgment is hereby stayed pending final disposition of Defendant's Petition to Open. RULE RETURNABLE, f,~= ^ -., .............. oqui:trt~, '~ml~L!'~ D~nn~wlyani,~ BY THE COURT: GUISSEPPI BARONE and LUIGI AMBROSINO, tJd/b/a BROTHERS PIZZA, Plaintiffs VS. VINCENZO PUGLIESE, Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNA. CWIL ACTION - LAW NO. 04-682 PLAINTIFFS GUISSEPPI BARONE AND LUIGI AMBROSINO, T/D/B/A BROTHERS PIZZA'S RESPONSE TO DEFENDANT'S OMNIBUS PETITION TO OPEN CONFESSED JUDGMENT~ APPLICATION TO STAY EXECUTION PENDING FINAL DISPOSITION~ AND MOTION TO CONSOLIDATE ACTIONS The Plaintiffs Guisseppi Barone and Luigi Ambrosino, 't/d/b/a Brothers Pizza, by and through their counsel, Kelly, Hoffman & Goduto LLP, respectfhlly file their Reply to Defendant's Omnibus Petition: 1. ADMITTED. It is ADMITTED that the Defendant purchased certain machinery, equipment, tools, furniture, leasehold improvements, and a license to use the business trade name known as Brothers Pizza and all other names, logos, trademarks and recipes used in connection with the operation of the Cumberland Parkway Brothers Pizza. By way of further Answer, the Business Purchase Agreement is a written document that speaks for itself. 2. ADMITTED. By way of further answer, the Business Purchase Agreement is a written document that speaks for itself. 3. DENIED as stated. It is ADMITTED that Defendant executed a Promissory Note for the sum of $100,000.00, payable in monthly installments of $2,000.00. By way of further answer, the Promissory Note is a written document that speaks for itself. 4. ADMITTED. By way of further Answer, the Business Purchase Agreement is a written document that speaks for itself. 5. DENIED as stated. It is ADMITTED that on Fehruary 18, 2004, Plaintiffs filed a Complaint against Defendant at Docket No. 04-691, for breachi:ag a Business Purchase Agreement. It is DENIED that the Business Purchase Agreement and the Promissory Note are the same agreement. By way of further answer, as written documents, the Business Purchase Agreement and Promissory Note speak for themselves. 6. DENIED as stated. It is ADMITTED that Plaintiffs filed a Complaint against Defendant docketed at No. 04-691 for Defendant's failure to comply with the terms of a Business Purchase Agreement, having last made the monthly payment required by the Business Purchase Agreement in February of 2003. It is further ADMITTED that Plaintiffs filed a Complaint for Confession of Judgment docketed at No. 04-682 for Defendanfs failure to comply with the terms of the Promissory Note, having last made the required monthly payment in August of 2002. It is DENIED that there is a conflict between these two pleadings. By way of further answer, it is DENIED that the Business Purchase Agreement and the Promissory Note constitute the same agreement. 7. 8. Admitted. The averments contained in Paragraph 8 of Defi:ndant's Omnibus Petition are conclusions of law to which no response is required. To the extent the averments are deemed factual, it is DENIED that Defendant has asserted a meritorious defense. 9. DENIED. The averments contained in Paragraph 9 of Defendant's Omnibus Petition are conclusions of law to which no response is required. To the extent the averments are deemed to be factual, it is ADMITTED that the confession of judgment was entered on February 17,2004. 2 10. The averments contained in Paragraph 10 of Defi~ndant's Omnibus Petition are conclusions of law to which no response is required. To the extent the averments are deemed factual and a response is required, it is DENIED that the confessed judgment should be opened. By way of further answer, it is DENIED that Plaintiffs have materially breached the Business Purchase Agreement. It is further DENIED that Defendant has asserted a meritorious defense. 11. The averments contained in Paragraph 11 are conclusions of law to which no response is required. To the extent the averments are deemed factual and a response is required, it is DENIED that Plaintiffs breached the Business Purchase Agreement by failing to comply with the restrictive covenant contained therein. 12. ADMITTED. 13. ADMITTED. 14. Plaintiffs are without sufficient information as to the truth and veracity of the averments contained in Paragraph 14 of Defendant's Omnibus Petition, and therefore, the averments are DENIED. 15. The averments contained in Paragraph 15 state conclusions of law to which no response is required. To the extent the averments are deemed factual and a response is required, it is DENIED that Plaintiffs' pizza shop competes with Defendant's shop and that it is has taken substantial lunch business from Defendant's shop. 16. The averments in Paragraph 16 of Defendant's Omnibus Petition state a conclusion of law to which no response is required. To the extent the averments are deemed factual in nature, it is DENIED that Plaintiffs own a Brothers Pizza less than three miles from Defendant's shop. 17. The averments contained in Paragraph 17 state a conclusion of law to which no response is required. To the extent that the averments are deemed factual and a response is required, it is DENIED that the Plaintiffs own and operate a competing pizza shop less than three miles from Defendant's shop and is in material violation of the Business Purchase Agreement. 18. DENIED as stated. It is ADMITTED that Defendant made monthly payments pursuant to the Business Purchase Agreement through February 2003. It is DENIED that Plaintiffs are violating the restrictive covenant contained in the Business Purchase Agreement. By way of further answer, Plaintiff did not confess judgment pursuant to the Business Purchase Agreement, rather, the confession of judgment is pursuant to the Warrant of Attorney contained in the Promissory Note signed by Defendant, and under the terms of that Note, Defendant has failed to make the monthly payments since September, 2002. 19. The averments contained in Paragraph 19 constitute conclusions of law to which no response is required. To the extent that the averments are deemed factual and a response is required, it is DENIED that Plaintiffs materially violated the Business Purchase Agreement, that Defendant's obligation to pay Plaintiffs sums under the Business Purchase Agreement has been terminated, and that the Defendant has offered a meritorious defense to the confessed judgment. 20. The averments contained in Paragraph 20 are conclusions of law to which no response is required. To the extent the averments are deemed factual and a response is required, it is DENIED that Defendant has offered a meritorious defense to the confessed judgment, and therefore, execution of the judgment should not be stayed pending final disposition of this proceeding. 21. The averments contained in Paragraph 21 are conclusions of law to which no response is required. To the extent the averments are deemed factual and a response is required, 4 it is DENIED that Plaintiffs' Complaint docketed at No. 04-691 and Plaintiffs' Confession of Judgment docketed at No. 04-682, involve common questions of law and fact, and arise from the same transaction and occurrence, such that the two actions should be consolidated. Dated: April [ ,2004 Respectfully submitted, KELLY, HOFFMAN & GODUTO LLP By ~ Attorney I.D. #84730 Robert E. Kelly, Jr., Esquire Attorney I.D. #21925 Commerce: Towers - 10th Floor 300 North Second Street P.O. Box 62003 Harrisburg:, PA 17106-2003 (717) 920-8100 Attorneys for Plaintiffs Guisseppi Barone and Luigi Ambrosino VERIFICATION I, Guisseppi Barone, hereby state that I have read the foregoing Plaintiffs Guisseppi Barone and Luigi Ambrosino, t/d/b/a Brothers Pizza's Response to Defendant's Omnibus Petition to Open Confessed Judgment, Application to Stay Execution Pending Final Disposition, and Motion to Consolidate Actions, which has been drafted by counsel. The factual statements contained therein are true and correct to the best of my knowledge, information and belief, although the language is that of counsel, and, to the extent that the content of the foregoing document is that of counsel, I have relied upon counsel in making this Verification. I understand that the statements therein are made subjec, t to the penalties of 18 Pa. C.S.A. § 4904 relating to unsworn falsifications to authorities. Dated: April ~ ,2004 sel~?i Baro~ - VERIFICATION I, Luigi Ambrosino, hereby state that I have read the foregoing Plaintiffs Guisseppi Barone and Luigi Ambrosino, t/d/b/a Brothers Pizza's Response to Defendant's Omnibus Petition to Open Confessed Judgment, Application to Stay Execution Pending Final Disposition, and Motion to Consolidate Actions, which has been drafted by counsel. The factual statements contained therein are true and correct to the best of my knowledge, information and belief, although the language is that of counsel, and, to the extent that the content of the foregoing document is that of counsel, I have rehed upon counsel in making this Verification. I understand that the statements therein are made subjec, t to the penalties of 18 Pa. C.S.A. § 4904 relating to unsworu falsifications to authorities. Dated: April ] ,2004 Ambrosino CERTIFICATE OF SERVICE On this ! day of April, 2004, I, Donald L. Carmelite, Esquire of the law firm of Kelly, Hoffman, & Goduto LLP, hereby certify that I have, this day, served a true and correct copy of the foregoing PLAINTIFFS GL~ISSEPPI BARONE AND L[IIGI AMBROSINO, T/D/B/A BROTHERS PIZZA'S RESPONSE TO DEFENDANT'S OMNIBIJSS PETITION TO OPEN CONFESSED JUDGMENT, APPLICATION TO STAY EXECUTION PENDING FINAL DISPOSITION, AND MOTION TO CONSOLIDATE ACTIONS upon the person(s) and at the address(es) below named by U.S. Mail, first class, with postage prepaid at Harrisburg, PA, addressed to: Alan R. Boynton, Jr., Esquire McNees, Wallace & Nurick LLC 100 Pine Street Harrisburg, PA 17101 ffS-6~ald L. Carmelite, Esquire FOR .... ~NG c~cE FOP'. ARGLT~ENT duplicate) TO THE PROTHONOTARY OF CU~BERL}_ND COUNTY: Pl~.~se ]ist ti~e witb_~n matter for the nem:t A=~m~_nt Court. CAPTION OF CASE (entJ_re caption must be stat~ in GUISSEPPI BARONE AND LUIGI AMBROSINO, t/d/b/a BROTHERS PIZZA~. ( PI a ~ ntiff) VINCENZO PUGLIESE -< ( l~f~ndsnt ) 2004 1. State matter to be argued (i.e., plaintiff's motion for new tr~a], def~ndunnt's da~urre_r to cu~]a~nt, etc.): Defendant's Omnibus Petition to Open Confessed Judgment, Application to Stay Execution Pending~Final Disposition, and Motion to Consolidate Actions 2. Identify_ counsel wh~]] argue case: (a) for pi a~ntiff: (b) for def~: A~dress: Donald L. Carmelite, Esquire Kelly, Hoffman & Goduto LLP Commerce Towers 10th Floor, Harrisburg, PA 17101 300 N. 2nd St. Alan R. Boynton, Jr., Esquire McNees, Wallace & Nurick 100 Pine St., P.O. Box 1166 Harrisburg, PA ].7108-1166 I ~]] notJ_~=y_ ali pcmrties ~ '~riting ~-~hin ~ days that tb/s case has be~--n ]~sted for ~t. 4. .~rgune_nt ~Coum-c Date: April 21, 2004 Attorney fo~ Plaintiffs GIUSSEPPE BARONE and LUIGI AMBROSINO, t/d/b/a BROTHERS PIZZA, PLAINTIFFS IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA VINCENZO PUGLIESE, DEFENDANT : 04-682 CIVIL TERM IN RE: PETITION OF DEFENDANT TO OPEN CONFESSED JUDGMENT AND MOTION TO CONSOLIDATE ACTIONS BEFORE BAYLEY, J. HESS, J. AND GUIDO~ J. ORDER OF COURT AND NOW, this ,~,V'~. day of May, 2004, IT IS ORDERED: (1) The confessed judgment, IS OPENED. (2) This action is consolidated with 04-691 Civil ~. Edgar B. Bayley, J. '~ Donald L. Carmelite, Esquire Commerce Towers- 10th Floor 300 N. Second Street P.O. Box 62003 Harrisburg, PA 17106-2003 For Plaintiffs Susan V. Metcalfe, Esquire McNees, Wallace & Nurick, LLC 100 Pine Street P.O. Box 1166 Harrisburg, PA 17108-1166 For Defendant ;sal GIUSSEPPE BARONE and LUIGI AMBROSINO, t/d/b/a BROTHERS PIZZA, PLAINTIFFS VINCENZO PUGLIESE, DEFENDANT IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA 04-682 CIVIL TERM IN RE: PETITION OF DEFENDANT TO OPEN CONFESSED JUDGMENT AND MOTION TO CONSOLIDATE ACTIONS BEFORE BAYLEY, J. HESS~ J. AND GUIDO~ J. Bayley, J., May 3, 2004:-- OPINION AND ORDER OF COURT On or about January 2, 2000, defendant, Vincenzo Pugliese, entered into a written Business Purchase Agreement with plaintiffs, Giusseppe Barone and Luigi Ambrosino, t/d/b/a Brothers Pizza to pumhase, "certain assets of the business and the right to operate the business under the name Brother's Pizza, 265 Cumberland Parkway, Mechanicsburg, at the same location.'" Paragraph 2 of the Agreement provides: PURCHASE PRICE. Buyer shall pay to Sellers for the purchase of said assets the sum of One Hundred Fifty Thousand ($150,000.00) Dollars at settlement, payable as follows: (a) Five Thousand ($5,000.00) Dollars, paid in advance as a deposit, receipt of which is hereby acknowledged by Sellers. (b) A promissory note with confession of judgment in the amount of One Hundred Forty-Five Thousand ($145,000.00) Dollars, including interest, payable at the rate of Two Thousand The Agreement is not dated. 04-682 CIVIL TERM ($2,000.00) Dollars in equal monthly installments, with the first payment due at settlement. On February 17, 2004, plaintiffs filed the within complaint against defendant for $39,644. They allege: 2. Defendant Vincenzo Pugliese is all adult individual and has a license to do business as Brothers Pizza, 265 Cumberland Parkway, Mechanicsburg, Pennsylvania 17055 pursuant to a Business Purchase Agreement with Plaintiffs. 3. On or about January 1,2000, Defendant Vincenzo Pugliese signed a Promissory Note wherein he promised to pay Plaintiffs the principal sum of $100,000.00. (See copy of original Promissory Note, attached hereto as Exhibit A),2 The Promissory Note signed by defendant and attached to the complaint provides: FOR VALUE RECEIVED, the undersigned, Vincenzo Pugliese, promises to pay to Giusseppe Barone and Luigi Ambrosino, the principal sum of One Hundred Thousand ($100,000.00) Dollars, payable in equal monthly installments of Two Thousand ($2,000.00) Dollars, including interest, until fully paid, with the first payment due upon the execution of this Note. The Note contains a confession of judgment clause. Plaintiffs confessed judgment against defendant for: (1) 17 unpaid monthly installments (September 2003 - February 2004): (2) Interest on unpaid installments at 6% of amounts due; and (3) Attorney's fees at 10% of amounts due Total $34,000.00 $ 2,040.00 $ 3,604.00 $39,644.00 On March 10, 2004, defendant filed: (1) a petition 1:o open the confessed The Note is not dated. -2- 04-682 CIVIL TERM judgment pursuant to Pa. Rule of Civil Procedure 2959, and (2) a motion to consolidate a civil action instituted against him by plaintiffs at 04-691 Civil Term. "A judgment taken by confession will be opened in only a limited number of circumstances, and only when the person seeking to have it opened acts promptly, alleges a meritorious defense and presents sufficient evidence of that defense to require submission of the issues to a jury." First Seneca Bank v. Laurel Mt. Development Corporation, 506 Pa. 439 (1984). The parties and this court agree that the petition 1:o open the confessed judgment was filed promptly. In his motion, defendant avers that the Promissory Note for $100,000 was executed in connection with an amount owed on the purchase of the business pursuant to the Business Purchase Agreement (the amounts were adjusted from the amount listed in the Agreement). Defendant alleges: 11. Plaintiffs breached the Agreement by failing to comply with a restrictive covenant contained therein. 12. Pursuant to the terms of the Agreement, Mr. Pugliese began operating a pizza shop under the name "Brother's Pizza" at 285 Cumberland Parkway, Mechanicsburg, Cumberland County, Pennsylvania, in January, 2000. 13. Paragraph 10 of the Agreement provides as follows: 10. RESTRICTIVE COVENANT. Sellers hereby agree that for a period of six (6) years, Sellers will not compete with Buyer through the operation and/or ownership of a pizza shop within a radius of three (3) miles of the business location at 265 Cumberland Parkway, Mechanicsburg, Cumberland County, Pennsylvania. 14. In February, 2003, Defendant learned that Plaintiffs had opened a pizza shop, trading and doing business as "Brothers Pizza" at 4910 Louise Drive, Mechanicsburg, Pennsylvania, which is approximately 2.5 miles from Defendant's pizza shop. (See internet yellow pages showing the addresses of the two pizza shops, and Mapquest and -3- 04-682 CIVIL TERM Mapblast pages showing the distance between the two shops, all attached hereto as Exhibit D.) 15. The shop opened by Plaintiffs competes with Defendant's shop and has taken substantial lunch business from Defendant's shop. 16. Plaintiffs continue to own and operate Brothers Pizza less than three (3) miles from Defendant's shop. 17. Plaintiffs ownership and operation of a competing shop less than three (3) miles from Defendant's shop ~vas and is a material violation of the Agreement. 18. Mr. Pugliese continued making monthly payments pursuant to the Agreement through February, 2003, when he learned that Plaintiffs were violating the restrictive covenant. 19. Plaintiffs' material violation of the Agreement terminated further obligations of Defendant to pay any sums to Defendant, and constitutes a meritorious defense to the confessed judgment. 20. Because Defendant has a meritorious defense to the confessed judgment, execution of the judgment should be stayed pending final disposition of the proceedings, pursuant to Pa. R. Civ. P. 2959(b) and 3121(b)(2). 21. Because this action and the one initiated by Plaintiffs against Defendant at docket number 04-691 are both pending in this Court, involve common questions of law and fact, and arise from the same transaction and occurrence, the two actions should be consolidated pursuant to PA. R. CIV. P. 313 upon opening of the confessed judgment. At 04-682, plaintiffs have sued defendant for breach of contract pursuant to the Business Purchase Agreement executed on or about January 2, 2000, and for unjust enrichment. Plaintiffs maintain that defendant owes $24,000 in arrears "for March, 2003 through February, 2004, and is being unjustly enriched by continuing to operate Brothers Pizza without making the required payments under the Business Purchase Agreement." Defendant has filed an amended answer to the complaint claiming, inter alia, that plaintiffs have "materially breached the Agreement by operating a competing pizza shop within two miles of the shop sold by them to Defendant." A Rule was entered upon plaintiffs to show cause why the relief requested in the 04-682 CIVIL TERM petition to open the confessed judgment should not be granted and the action consolidated with 04-691 Civil. Execution on the confessed judgment was stayed pending final disposition. Plaintiffs filed a response to defendant's petition and listed the issues for argument. They were briefed and argued on April 21,2004. In Lambakis v. Exar, 340 Pa. Super. 483 (1985), pursuant to an agreement appellant sold an on-going business, Athens Pizza, to appellee for $18,000. A condition of sale was that appellant refrain for a period of three years from "competing with the business being sold." In securement of the purchase, appellee executed a promissory note in the amount of $3,000. Subsequently, appellant filed a complaint alleging that appellee defaulted on an installment due under the promissory note and, as a result, exercised an option to demand that all remaining installments become immediately due and payable. Appellant confessed judgment against appellee in the amount of $2,625. Appellee filed a timely petition to open judgment in which he alleged that "no money was due on the promissory note because appellant had violated the agreement of sale by entering into another business in co~mpetition with the [appellee]." The trial court opened the confessed judgment from which an appeal followed. Citing Teodori v. Werner, 490 Pa. 58 (1980), the Superior Court of Pennsylvania affirmed the opening of the judgment noting that appellee had alleged a meritorious defense of appellant breaching the non-competition clause "[w]hich, if proven at trial, would entitle the appellee to avoid liability to the extent of his injury." In Teodori, appellant leased from appellee a retail store room in a shopping -5- 04-682 CIVIL TERM center to operate a jewelry and gift shop. The agreement provided that appellee not "lease or operate as owner any space in the shopping center or any extension thereof primarily as a jewelry or gift shop." Appellant agreed upon every default of payment of rent or breach of the agreement to empower an attorney of any court of record to appear and confess judgment against him. Subsequently,, appellee confessed judgment against appellant for, inter alia, non-payment of amounts due under the lease. Appellant filed a timely petition to open the judgment alleging that appellee violated the non-competition clause by leasing space in the shopping center to Pennsylvania Wholesalers for operation of a competing jewelry and gift shop business. The Supreme Court of Pennsylvania concluded that the confessed judgment must be opened. The Court stated: It is obvious that the landlord's non-competition promise is critical to a commercial lease agreement like the one here. 'The mere presence in a lease of a noncompetition promise by the landlord justified a conclusion that it is essential the that premise be observed if the tenant is to conduct his business on the leased property profitable.' It therefore must be concluded that absence a contrary agreement between the parties a tenant's obligations are not independent of a landlord's premise under a non-competition clause. Here, in withholding the full prescribed payments, tenant acted well within his rights. (Citation omitted.) Based on the reasoning in Lambakis and Teodori, defendant, by averring a conclusion of law that plaintiffs have breached the restrictive covenant in the Business Purchase Agreement by opening a pizza shop t/d/b/a Brothers Pizza within 2.5 miles of defendant's Brothers Pizza shop, has alleged a meritorious defense, which, if proven at trial, would entitle defendant to avoid liability for money due on the pumhase price -6- 04-682 CIVIL TERM under the terms of the Promissory Note to the extent of injury proven at trial. Plaintiffs argue that defendant stopped making payments on the Note before they learned of the alleged competing Brothers Pizza. That makes no difference if defendant is entitled to avoid any liability to the extent of his injury for the alleged breach of the restrictive covenant. Plaintiffs further argue that the Promissory Note stands alone and separate from the Business Purchase Agreement and is an unconditional promise to pay the amounts set forth therein. That argument is belied by the pleadings. In Paragraph 3 of the petition to open the confessed judgment, defendant averred: In connection with the purchase of the business, Mr. Pugliese executed a Promissory Note for the sum of $100,000.00, payable in monthly installments of $2,000.00. (See Exhibit A, ¶ 2(b), and Promissory Note attached as Exhibit A to Plaintiffs Complaint for Confession of Judgment.) Plaintiffs responded as follows: 3. DENIED as stated. It is ADMITTED that Defendant executed a Promissory Note for the sum of $100,000.00, payable in monthly installments of $2,000.00. By way of further answer, the Promissory Note is a written document that speaks for itself. This general denial "as stated," that the Promissory Note speaks for itself, does not act as a specific denial that the "FOR VALUE RECEIVED" set forth in the Note was money due under the Business Purchase Agreement. For the foregoing reasons, the confessed judgment will be opened, and the issues to be tried pursuant to Pa. Rule of Civil Procedure 2960 are, pursuant to Rule 213(a) consolidated with 04-691 Civil Term. -7- 04-682 CIVIL TERM ORDER OF COURT AND NOW, this '~'~'~_ day of May, 2004, IT IS ORDERED: (1) The confessed judgment, IS OPENED. (2) This action is consolidated with 04-691 Civil Term. Edgar B. Bayley, J. ~ Donald L. Carmelite, Esquire Commerce Towers - 10t~ Floor 300 N. Second Street P.O. Box 62003 Harrisburg, PA 17106-2003 For Plaintiffs Susan V. Metcalfe, Esquire McNees, Wallace & Nurick, LLC 100 Pine Street P.O. Box 1166 Harrisburg, PA 17108-1166 For Defendant :sal -8-