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Home My WebLink About08-3139/' KEEFER WOOD ALLEN & RAHAL, LLP v-' Charles W. Rubendall IT, Esquire Attorney I.D. No. 23172 Gary E. French, Esquire Attorney I.D. No. 25810 Donald N. Lewis III, Esquire Attorney I.D. No. 58510 210 Walnut Street, P. 0. Box 11963 Harrisburg, PA 17108-1963 717-255-8010 and 255-8038 crubendall@keeferwood.com dlewis@keeferwood.com Attorneys for plaintiff ROBERT S. GOODRICH, V. KATHY J. GOODRICH, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff CIVIL ACTION 01 - at 39 Cl Vi I Ter)", Defendant No. S 2008 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 attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Cumberland County Lawyer Referral Service Cumberland County Bar Association 2 Liberty Avenue Carlisle, PA 17013 717-249-3166 NOTICIA Le han demandado a usted en la corte. Si usted quiere defenderse de estas demandas expuestas en las paginas siguientes, usted ciene viente (20) dial de plazo al partir de la fecha de la demanda y la notifcacion. Usted debe presentar una apariencia escrita o en persona o por abodago y archivar en la corte en forma escrita sus defensas o sus objeciones a las demandas en contra de su persona. Sea avisado que si usted no se defiende, la corte tomara medidas y puede entrar una orden contra usted sin previo aviso o notificacion y por cualquier queja o alivio que es pedido en la peticion de demanda. Usted puede perder di.nero o sus propiedades o ostros derechos importantes para usted. LLEVE ESTA DEMANDA A UN ABODAGO IMMEDIATAMENTE. SI NO TIENT ABOGADO 0 SI NO TIENE EL DINERO SUFICIENTE DE ]?AGAR TAL SERVICIO, VAYA EN PERSONA 0 LLAME POR TELEFONO A LA OFICINA CUYA DIRECCION SE ENCUENTRA ESCRITA ABAJO PARA AVERIGUAR DONDE SE PUEDE CONSEGUIR ASISTENCIA LEGAL. Lawyer Referral Service Cumberland County Bar Association 2 Liberty Avenue Carlisle, PA 17013 717-249-3166 KEEFER WOOD ALLEN & RAHAL, LLP Charles W. Rubendall II, Esquire Attorney- I.D. No. 23172 Gary E. French, Esquire Attorney I.D. No. 25810 Donald M. Lewis III, Esquire Attorney I.D. No. 58510 210 Walnut Street, P. 0. Box 11963 Harrisburg, PA 17108-1963 717-255-8010 and 255-8038 Attorneys for plaintiff ROBERT S. GOODRICH, V. KATHY J. GOODRICH, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff Defendant COMPLAINT CIVIL ACTION No. 01'- ?/ ,' 2008 NOW COMES Robert S. Goodrich, plaintiff herein, by his counsel, Keefer Wood Allen & Rahal, LLP, to seek equitable relief in the form of a partition of corporate assets, appointment of a receiver and an accounting, pursuant to Pa. R. Civ. P. 1501 et seq., averring as follows: 1. Plaintiff is an adult individual residing at 335 Sou.thview Drive, Mechanicsburg, Cumberland County, Pennsylvania. 2. Defendant, Kathy J. Goodrich, is an adult individual residing at 1775 Summerfield Drive, Mechanicsburg, Cumberland County, Pennsylvania. 3. Plaintiff and defendant were husband and wife from December 26, 1998, to February 12, 2002. 4. Plaintiff and defendant own 1000 of the issued and outstanding stock of Market Square Tradition Wholesale, Inc. ("Market Square"), a Pennsylvania business corporation w-th its registered office at 1775 Summerfield Drive, Mechanicsburg, Cumberland County, Pennsylvania. 5. Ownership of and employment by Market Square provide plaintiff and his family with their primary means of support. 6. From the inception of the corporation in 1987, plaintiff owned majority control of Market Square. Just prior to a divorce settlement between plaintiff and defendant in 2002, plaintiff transferred a fifty percent (500) interest to defendant, with plaintiff retaining the remaining fifty percent (50%) interest. - 2 - 7. Market Square is the sole shareholder of Goodrich & Company Promotions, Inc. ("Goodrich & Company"), a Pennsylvania business corporation formed on May 9, 2007, having its registered office at 335 Southview Drive, Mechanicsburg, Cumberland County, Pennsylvania. 8. Market Square and Goodrich & Company are engaged in the business of producing annual trade shows for profit at venues located primarily in the northeast United States. 9. As a result of disagreements between plaintiff and defendant regarding management of Market Square and Goodrich & Company, a deadlock has arisen that hinders operation of the businesses. Since the spring of 2007, the parties have been unable to communicate or cooperate regarding business decisions impacting the corporations, and each party has taken it upon himself or herself to manage certain aspects of the corporations' businesses to the complete and utter dissatisfaction of the other party. 10. During the course of the shareholder deadlock, defendant has taken actions that are harmful to plaintiff's financial interest in Market Square, including, but not limited to, unilateral and unauthorized distribution of corporate funds to herself and to the exclusion of defendant and the unauthorized - 3 - production of certain trade shows under the name of Market Square. 11. On numerous occasions, plaintiff proposed to defendant that they divide the assets of Market Square and Goodrich & Company through a divisive reorganization under Section 355 of the Internal Revenue Code. 12. Under plaintiff's proposal, Market Square would assign certain agreed-upon assets, employees, trade shows and contract rights to Goodrich & Company in accordance with the terms of a written agreement. The remaining assets, employees, trade shows and contract rights would stay with Market Square. Upon separation, one hundred percent (100%) of the stock of Goodrich & Company would be distributed to plaintiff in a tax-free exchange for one hundred percent (100%) of his shares in Market Square. 13. Defendant has refused to concur in any partition of corporate assets. 14. Indeed, defendant has countered plaintiff's proposal with unreasonable demands, including but not limited to a demand that accounting methods used by the business from the outset of its operations be changed before defendant will consider any proposal for the division of corporate assets. - 4 - 15. Plaintiff cannot accept or justify the disruption, delay and expense that defendant's demands have entailed, which plaintiff believes are only a delaying tactic to avoid any resolution of the deadlock. 16. Because the parties each own fifty percent (500) of the shares of Market Square and cannot reach agreement to divide the company, the deadlock cannot be resolved absent court intervention. 17. Plaintiff believes that only Court intervention will remove the impasse and allow the subject businesses to prosper and grow, to the benefit of both plaintiff and defendant. COUNT I PARTITION OF CORPORATE ASSETS 18. The averments set forth in Paragraphs 1 through 17 above are incorporated herein as though fully set forth. 19. The on-going shareholder deadlock between plaintiff and defendant is negatively impacting the businesses of Market Square and Goodrich & Company, the income of plaintiff and defendant, and the future prospects of all relevant stakeholders, including the non-owner employees of both corporations. 20. The Court has authority to value the assets of the Market Square/Goodrich & Company consolidated businesses and to - 5 - partition those assets between plaintiff and defendant in a fair and equitable manner. WHEREFORE, plaintiff requests that this Honorable Court partition the assets of Market Square and Goodrich & Company by allocating one-half of the assets to plaintiff and one-half of the assets to defendant, together with such other and further relief as the Court deems appropriate. Or)TTATT T T APPOINTMENT OF RECEIVER 21. The averments set forth in Paragraphs 1 through 20 above are incorporated herein as though fully set forth. 22. Plaintiff believes, and therefore avers, that the on- going shareholder deadlock will continue to harm and impede the sound and efficient management of Market Square and Goodrich & Company, including, but not limited to, harm caused by the unilateral decisions of defendant and by poor cash management. 23., Plaintiff believes, and therefore avers, that a. neutral third-party receiver must be appointed to oversee management of the businesses pending partition of the assets by the Court. 24. During 2007, plaintiff and defendant had reached tentative agreement on appointment of a receiver in the person of - 6 - Scott A. Heintzelman, CPA, who had agreed to serve in that position pending partition of the assets. 25. Plaintiff continues to believe that Scott A. Heintzelman, CPA, would serve as a neutral receiver to oversee management of the business. WHEREFORE, Plaintiff requests that this Honorable Court enter an Order appointing Scott A. Heintzelman, CPA, as receiver for Market Square and Goodrich & Company pending partition of the corporate assets, with fees for the receiver to be paid from consolidated corporate revenues. COUNT III ACCOUNTING 26. The averments set forth in Paragraphs 1 through 25 above are incorporated herein as though fully set forth. 27.. Defendant has served as the chief financial officer of Market Square for many years and, in that position, has had full access to and control over the corporation's funds. 28. From time to time during the course of her service as chief financial officer, defendant has taken it upon herself to issue checks to herself that were not authorized by plaintiff, that were not in accord with any agreement between plaintiff and defendant, that were in excess of distributions made to - 7 - plaintiff, and that in some cases were for improper purposes (for example, defendant surreptitiously received $24,000 from Market Square to offset the value of an asset awarded to plaintiff in connection with the marital settlement agreement between the parties in 2002). 29. Plaintiff believes, and therefore avers after due investigation, that defendant took in excess of $100,000 from Market Square over a number of years in breach of her duty to the corporation and in breach of her understanding with plaintiff that all salaries and distributions from the corporation be on a 50-50 basis. 30. Defendant retains the financial books and records of Market Square for the last five (5) years commencing January 1, 2003, and should be ordered to produce an accounting of all revenues and expenditures (by payee) of the corporation during that time period. WHEREFORE, plaintiff requests that the Honorable Court enter an Order directing plaintiff to provide an accounting of all revenue and expenditures of Market Square commencing January 1, - 8 - 2003, through the date of the accounting, together with such other and further relief as the Court deems appropriate. Respectfully submitted, KEEFER WOOD ALLEN & RAHAL, LLP Dated: May 19, 2008 By V910 Ir Charles . Rubendall II I.D. # 23172 Gary E. French I.D. # 25810 Donald 114. Lewis III I.D. # 58510 210 Walnut Street. P. O. Box 11963 Harrisburg, PA 17108-1963 717-255-8010, 255-8015, and 255-8038 Attorney for plaintiff - 9 - 4 VERIFICATION The undersigned, Robert S. Goodrich, hereby verifies and states that: 1. lie is plaintiff herein; 2. The facts set forth in the foregoing complaint are true and correct to the best of his knowledge information, and belief; and 3. He is aware that false statements herein are made subject to the penalties of 18 Pa.C.S. Sec. 4904, relating to unsworn falsification to authorities. ?7 ) 76, Robert S. Goodrich Dated: May /{J 2008 -10- ROBERT S. GOODRICH, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff V. CIVIL ACTION KATHY J. GOODRICH, Defendant No. 08-3139 Civil Term ACCEPTANCE OF SERVICE I, John D. Sheridan, Esquire, of the law firm of Serratelli Schiffman Brown & Calhoun, PC, hereby state that I am authorized to accept service of process on behalf of Kathy J. Goodrich, Defendant, and hereby do so. Date: May , 2008 J LeerraaLtlli Sheridan, Esquire Schiffman Brown & PC Counsel for Defendant ?' - r r°- ? - , ?. ?? ?? -} ?? 6 ``r ?# ,a .? SERRATELLI, SCHIFFMAN, BROWN & CALHOON, P.C. Paige Macdonald-Matthes, Esquire Supreme Court ID No. 66266 2080 Linglestown Road Harrisburg, PA 17110 (717) 540-9170 Attorneys for Defendant, Kathy J. Goodrich ROBERT S. GOODRICH, : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff V. : DOCKET NO.: 2008-3139 CIVIL TERM : CIVIL ACTION - KATHY J. GOODRICH, Defendant NOTICE TO PLEAD TO: Robert S. Goodrich c/o Charles W. Rubendall, Il, Esquire Gary E. French, Esquire Keefer Wood Allen & Rahal, LLP 210 Walnut Street P.O. Box 11963 Harrisburg, PA 17108-1963 YOU ARE HEREBY NOTIFIED to plead the within Counterclaim within twenty (20) days from service hereof, or a default judgment may be entered against you. Date: June 23, 2008 Paige Macdonald-Matthes, Esquire Attorney I.D. #66266 SERR.ATELLI, SCHIFFMAN, BROWN & CALHOON, P.C. 2080 Linglestown Road Harrisburg, PA 17110 Telephone: (717) 540-9170 Attorneys for Defendant SERRATELLI, SCHIFFMAN, BROWN & CALHOON, P.C. Paige Macdonald-Matthes, Esquire Supreme Court ID No. 66266 2080 Linglestown Road Harrisburg, PA 17110 (717) 540-9170 Attorneys for Defendant, Kathy J. Goodrich ROBERT S. GOODRICH, Plaintiff V. KATHY J. GOODRICH, Defendant , IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA DOCKET NO.: 2008-3139 CIVIL TERM DEFENDANT'S ANSWER, TOGETHER WITH COUNTERCLAIM TO PLAINTIFF'S COMPLAINT AND NOW, comes Defendant, Kathy J. Goodrich ("Defendant'), by and through her counsel, Serratelli, Schiffman, Brown & Calhoon, P.C., and files her Answer, Together with Counterclaim to Plaintiff s Complaint, and in support thereof aver as follows: 1. Admitted. 2. Admitted. 3. Admitted. 4. Admitted. 5. Defendant is without knowledge sufficient to form a belief as to the truth of the matters asserted in Paragraph 5 of Plaintiff's Complaint and strict proof of the same is demanded at the time of trial. 6. Denied as stated. According to Department of State's website, Market Square Tradition Wholesale, Inc. was not created until April 26, 1999. See Exhibit "A". Defendant is without sufficient information, including access to the corporate books, to know exactly how or when shares were issued. Nonetheless, Defendant has been an active 50% equitable owner in this enterprise from the time of its inception. 7. Denied as stated. Defendant is without sufficient information to know whether Goodrich & Company Promotions, Inc. is owned by Market Square. Plaintiff, Robert S. Goodrich, took it upon himself to form Goodrich & Company Promotions, Inc. without consultation with Defendant or her business counsel. Attached and made a part of this Answer is Exhibit "B" showing the only incorporator of Goodrich & Company Promotions, Inc. is Robert S. Goodrich. Defendant was unaware of Plaintiff's unauthorized actions. It wasn't until Plaintiff's counsel sent a letter to Defendant's business counsel on July 20, 2007 stating "As of Wednesday afternoon (July 28, 2008), Goodrich & Company, a new corporate entity, became a subsidiary of Market Square", that Defendant became aware that Goodrich & Company was supposedly a wholly owned subsidiary. 8. Admitted. 9. Admitted. 10. Denied. It is denied that "during the course of the shareholder deadlock, Defendant has taken actions that are harmful to Plaintiff s financial interest." To the contrary, during the course of the shareholder deadlock, Plaintiff has taken 2 actions that are harmful to Defendant's financial interests, as well as his own. Specifically, Plaintiff has unilaterally determined to cancel shows scheduled by Market Square, disavow contracts entered into by Market Square and third party vendors and has otherwise tortiously interfered with Defendant's business interests. 11. Admitted in part and denied in part. Both Plaintiff and Defendant by and through their respective counsel have been attempting to partition Market Square so that each party could have separate enterprise under their control. Never once was there a suggestion that this be accomplished through a divisive reorganization under Internal Revenue Code §355. Defendant was not even aware that Goodrich & Company was alleged to be a subsidiary of Market Square until Defendant received Plaintiff's counsel letter of July 20, 2007. 12. Admitted in part and denied in part. It is admitted that both Parties have been negotiating to partition the assets of Market Square with the effect that Plaintiff and Defendant would each have their own enterprise going forward. Whether or not this can or will be accomplished in a tax free exchange under Internal Revenue Code §355 is the sole responsibility of Plaintiff, in that Defendant was never consulted with respect to the formation of Goodrich & Company. 13. Denied. It is denied that Defendant has "refused to concur in any partition of corporate assets." To the contrary, Plaintiff has refused to concur in the partition of corporate assets. The primary reason for Plaintiff's refusal to agree to any partitioning is that cash would need to be exchanged between the Parties depending on the timing of the partitioning. That is, shows are run at various 3 times throughout the year and monies are received generally well in advance of those shows. Depending on the date of partitioning and whose shows had already occurred during a given year, the party whose shows were yet to occur would owe the other party a sum of cash in order to equalize the distribution in the partitioning process. On more than one occasion, Plaintiff's counsel was provided with a computation of the amount of cash required to achieve an equitable distribution between the Parties. In fact, even a special accountant hired by Plaintiff, admitted that cash was required to be paid by Plaintiff to Defendant. Nonetheless, Plaintiff refused to pay any cash and provided an excuse, through this counsel, that because of certain assets received by the Defendant in their divorce, almost six years ago, that he was refusing to pay any cash with respect to the partitioning of Market Square. 14. Denied. It is denied that Defendant has "countered" Plaintiff's counterproposal with unreasonable demands. To the contrary, Plaintiff's proposals, if accepted by Defendant, would have resulted in a significant loss for Defendant. Specifically, under Plaintiff's various proposals, Plaintiff would receive all of the revenue from the trade shows yet to occur and Defendant would have to cover all of her overhead without any source of revenue until the cycle of shows came up for the following year. 15. Defendant is without knowledge sufficient to form a belief as to the truth of the averments regarding what Plaintiff "can or cannot accept" or what "disruptions" Plaintiff is referring to in paragraph 15 of Plaintiff's Complaint and strict proof of the same, if relevant, is demanded at the time of trial. Finally, and by way of 4 further reply, it is denied that Defendant has engaged in any "delay tactics." To the contrary, it is Plaintiff that has been stonewalling Defendant's efforts to divide the assets of Market Square. 16. Admitted. 17. Admitted. COUNTI Partition of Corporate Assets 18. Incorporation paragraph. No response required. 19. Admitted. 20. Denied. The averments set forth in paragraph 20 of Plaintiff's Complaint state conclusions of law to which no response is required. WHEREFORE, Defendant respectfully requests that this Honorable Court partition the assets of Market Square and Goodrich & Company (following a careful accounting and valuation of the same) by allocating them among the Parties in accordance with proper accounting principles, and in a manner which is fair, equitable and just to the Parties. COUNT II Appointment of Receiver 21. Incorporation paragraph. No response required. 22. Admitted in part and denied in part. It is admitted that the on-going shareholder deadlock will continue to harm and impede the sound and efficient management of Market Square. It is denied that Defendant has made any "unilateral decisions" which have in any way harmed and/or impeded the sound and efficient management of Market Square. To the contrary, the only one who has continued 5 to harm and impede the sound and efficient management of Market Square is Plaintiff himself. 23. Admitted in part and denied in part. Defendant is without knowledge sufficient to form a belief as to what Plaintiff "believes" and strict proof of the same, if relevant, is demanded at the time of trial. It is admitted that a neutral third party receiver must be appointed to oversee the management of the businesses pending partition of the assets by the Court. 24. Admitted in part and denied in part. It is admitted that the Parties had previously discussed the need to have a receiver appointed. It is denied that the Parties agreed that Scott A. Heintzelman, CPA should be appointed receiver. 25. Denied. Defendant is without knowledge sufficient to form a belief as to what Plaintiff "believes" and strict proof of the same, if relevant, is demanded at the time of trial. By way of further reply, it is denied that Scott A. Heintzelman, CPA should serve as the neutral receiver to oversee the management of the businesses. It is believed and therefore averred that Scott A. Heintzelman, CPA has had a business relationship with Plaintiff's counsel and therefore would not be "neutral" to serve as a receiver. WHEREFORE, Defendant respectfully requests that this Honorable Court appoint a neutral receiver, other than Scott A. Hentzelman, CPA, with fees for the receiver to be paid from consolidated corporate revenues. COUNT III Accounting 26. Incorporation paragraph. No response required. 6 27. Denied. It is denied that "Defendant has served as the chief financial officer of Market Square for many years." To the contrary, and as was represented by Plaintiff's own counsel in his letter dated August 13, 2007, Defendant served as the "Secretary/Treasurer and as such [was] not charged with making strategic business judgments." A true and correct copy of the first page of Plaintiff's counsel's letter dated August 13, 2007 is attached hereto as Exhibit "B." It is denied that Defendant has had "full access to and control over the corporation's funds." To the contrary, Plaintiff is the self-proclaimed President of Market Square and in that capacity has had full access to and control over the corporation's funds. See Exhibit "C." 28. Denied. It is denied that Defendant has issued any checks to herself that were not authorized or were not in the ordinary course of business. It is further denied that Defendant "surreptitiously received $24,000 form Market Square to offset the value of an asset awarded to Plaintiff in connection with the marital settlement agreement between the Parties in 2002. By way of further answer, it is the Plaintiff himself who improperly made purchases, to use for his own benefit, using Market Square funds to the tune of $24,000.00. It was only after this matter was brought to his attention that Plaintiff agreed, in a spirit of keeping distributions equal between the Parties, that Defendant should also be entitled to the $24,000.00 that Plaintiff had removed from Market Square for his own benefit. 29. Denied. It is denied that Defendant "took in excess of $100,000 from Market Square over a number of years in breach of her duty to the corporation." To the 7 contrary, the records from the business reveal that the Parties have taken out substantially the same amount of money from Market Square during the last five (5) years. Finally, and by way of further reply, it was Plaintiff who, without Defendant's consent, formed Goodrich & Company Promotions, Inc. using assets and resources otherwise belonging to Market Square in direct violation of his fiduciary duty to Market Square. From January 1, 2007 through September of 2007 both Plaintiff and Defendant took equal salaries. By September 2007, Market Square was short working capital and could not afford to continue paying shareholder salaries. At that point Defendant stopped taking a salary. However, Plaintiff without approval or even the knowledge of Defendant paid himself a salary from Goodrich & Company of $72,692.00. In addition, Plaintiff paid unauthorized distributions to himself from Goodrich & Company. Had such distributions been authorized, payment should have been made to Market Square, not the Plaintiff. 30. Denied. The averments set forth in paragraph 30 of Plaintiff's Complaint state conclusions of law to which no response is required. To the extent that a response would be required, Defendant specifically denies the averments in paragraph 30. As a matter of fact, Plaintiff has been provided with financial statements of Market Square each and every month since the inception of the corporation. Conversely, Defendant has only received sporadic financial statements of Goodrich & Company since its formation in May of 2007. Plaintiff has surreptitiously hidden all of his actions in Goodrich & Company and believes that he is not accountable to Defendant or Market Square. 8 WHEREFORE, Defendant, Kathy Goodrich respectfully requests that this Honorable Court enter an Order directing that Plaintiff provide an accounting of all revenue and expenditures of both Market Square and Goodrich & Company commencing January 1, 2003, through the date of accounting, and further award Defendant all such other relief as is proper and just. COUNTERCLAIM 31. The answers and averments set forth in Paragraphs 1 through 30 are incorporated herein by reference as if more fully set forth at length. 32. Plaintiff and Defendant own 100% of the issued and outstanding stock of Market Square. 33. In or about May 2007, Plaintiff unilaterally determined to form a new company, incorporated Goodrich & Company Promotions, Inc. (hereinafter "Goodrich & Company") without Defendant's prior knowledge or consent and in breach of his fiduciary duty to Market Square. 34. Only after Defendant objected to the Plaintiff's formation of Goodrich & Company, did Plaintiff's counsel begin to make averments that Goodrich & Company is a wholly owned subsidiary of Market Square. 35. Defendant believes that Market Square is the sole shareholder of Goodrich & Company. However, that belief is based solely on the representations of Plaintiff's counsel. 9 36. Upon information and belief, while serving Market Square in the capacity of "President", Plaintiff surreptitiously transferred contracts previously entered into by Market Square and third party vendors to Goodrich & Company without providing Market Square any consideration for the value of the contracts that were transferred. 37. Upon information and belief, while serving Market Square in the capacity of "President", Plaintiff surreptitiously transferred files (both paper and electronic), office supplies and materials, and office furnishings belonging to Market Square to the offices of Goodrich & Company located at 335 Southview Drive, Mechanicsburg, PA. 38. Plaintiff has taken actions that are harmful to Defendant's financial interest in Market Square, including, but not limited to, unilateral and unauthorized distribution of corporate funds to himself and to the exclusion of Defendant and the unauthorized production of certain trade shows under the name Goodrich & Company. 39. On numerous occasions, Defendant proposed to Plaintiff that they divide the assets of Market Square and Goodrich & Company. Alternatively, Defendant has, on numerous occasions, proposed to Plaintiff that Plaintiff buy-out Defendant's interest in Market Square or allow his interest to be bought out. 40. Plaintiff has refused to concur in any partition of corporate assets. 41. Indeed, Plaintiff has countered Defendant's proposals with unreasonable demands, including but not limited to bringing up issues related to the Parties' prior divorce action that was finalized in 2002. 10 42. Because the Parties each own fifty percent (50%) of the shares of Market Square and cannot reach agreement to divide the company, the deadlock cannot be resolved absent Court intervention. 43. Defendant believes that the Court's appointment of a receiver is the only way to remove the impasse and allow the subject businesses to prosper and grow, to the benefit of both Parties. WHEREFORE, Defendant, Kathy Goodrich, respectfully requests that this Honorable Court partition the assets of Market Square and Goodrich & Company in a manner which is fair and just to the parties, and further award Defendant all such other relief as is proper and just. COUNTI PARTITION OF CORPORATE ASSETS 44. The averments and answers set forth in Paragraphs 1 through 43 are incorporated by reference as if more fully set forth at length herein. 45. The on-going shareholder deadlock between the Plaintiff and Defendant is negatively impacting the business of Market Square, the income of Plaintiff and Defendant, and future prospects of all relevant stakeholders, including the non- owner employees of Market Square and Goodrich & Company. 46. Plaintiff continues to remind Defendant that he is "President" of Market Square. Plaintiff has become very unreliable and currently displays erratic behavior with regard to the scheduling of annual trade shows and has currently demonstrated poor judgment regarding the daily operations of Market Square and maintaining customer/client relations, as evidenced by the following actions: a. Unilaterally cancelling shows previously contracted by Market Square. 11 b. Reversing the order of shows where shows have both a cash and carry and order writing component. Traditionally, the cash and carry portion always preceded the order writing portion of the show. Realizing that Defendant would probably receive cash and carry shows in the partitioning process, Plaintiff unilaterally switched the order of future shows to benefit order writing shows (those that Plaintiff would receive in a partitioning), to the detriment of Defendant. c. Has proclaimed himself to be President not only of Market Square but also Goodrich & Company and has told vendors and others, "that no contract is valid unless signed by Plaintiff as President". d. "As President", Plaintiff has refused to negotiate future cash and carry dates for the benefit of Defendant (thereby jeopardizing the availability of those dates), unless Defendant would agree to Plaintiff s unreasonable demands with respect to partitioning of assets. e. Plaintiff, without consultation with Defendant, has made demands of clients to make non-refundable deposits on shows and in the process, has negatively impacted the long term relationship with such clients. f. During the negotiation process, various shows were allocated to each of the Parties, and the Parties had tentatively agreed on such allocation albeit a definitive agreement had not been executed. Now, the Plaintiff lists shows previously allocated to Defendant on the website of Goodrich & Company without consultation with Defendant. Such 12 actions have caused confusion with clients not only of Market Square but also of Goodrich & Company. g. The Parties had tentatively agreed that cash and carry shows would be allocated to Defendant and order writing shows to the Plaintiff. Without consultation with Defendant, Plaintiff had started using the term "cash and carry" on Goodrich & Company's website causing further confusion with longstanding clients. h. By a letter dated December 31, 2007, Plaintiff unilaterally determined that the previously executed shareholder agreement is "null and void" based solely on his determination in spite the fact that the agreement called for any changes to the agreement to be mutually agreed upon between the Parties thereto and reduced to a writing. 47. As a result of Plaintiff's unprofessional, erratic and inappropriate behavior, the Parties are currently having serious disagreements concerning the direction of the management of the business and affairs of Market Square. 48. Plaintiff has taken the following actions which have injured, and continue to injure the business affairs of Market Square: a. Plaintiff has mismanaged the funds of Goodrich & Company by paying himself and his new spouse excessive shares, contrary to the informal agreement that Plaintiff and Defendant would withdraw equal funds. b. Has paid himself unauthorized shareholder distributions in violation of not only their informal agreement but also Internal Revenue Code provisions dealing with distributions to shareholders. 13 c. Has jeopardized not only Market Square "S" election but also its potential ability to accomplish a tax fee spin off. 49. Due to Plaintiff's erratic and unprofessional behavior: a. The orderly operation of the business of Market Square has been seriously jeopardized; b. Market Square has been deprived the use of the cash that was received from the annual trade show events; c. Employees of Market Square feel threatened by Plaintiff, and d. Defendant, as well as employees and customers of Market Square are subjected to Plaintiff's erratic behavior. 50. As a result of Plaintiff's unprofessional, erratic and inappropriate behavior, the Parties are currently having serious disagreements concerning the direction of the management of the business and affairs of Market Square. 51. The Plaintiff and Defendant are currently deadlocked in the direction of the management of the business and affairs of Market Square and Goodrich & Company. 52. The Court has authority to value the assets of Market Square and Goodrich & Company and to partition those assets between the Plaintiff and the Defendant in a fair and equitable manner. WHEREFORE, Defendant, Kathy Goodrich, respectfully requests that this Honorable Court partition the assets of Market Square and Goodrich & Company in a manner which is fair and just to the Parties, and further award Defendant all such other relief as is proper and just. 14 COUNT II APPOINTMENT OF RECEIVER 53. The a averments and answers set forth in Paragraphs 1 through 52 are incorporated by reference as if more fully set forth at length herein. 54. Defendant believes and therefore avers that the on-going shareholder deadlock will continue to harm and impede the sound and efficient managements of Market Square and Goodrich & Company, including but not limited to the harm caused by the unilateral decisions of Plaintiff and by poor cash management. 55. Defendant believes and therefore avers that a neutral third-party receiver must be appointed to oversee the management of the businesses pending partition of the assets by the Court. 56. Defendant believes and therefore avers that James McCarthy, CPA, Esquire, would be best suited to serve as a neutral receiver to oversee the management of the two (2) businesses. WHEREFORE, Defendant, Kathy Goodrich respectfully requests that this Honorable Court enter an Order appointing James McCarthy, CPA, Esquire, as receiver for Market Square and Goodrich & Company pending partition of the corporate assets, with fees for the receiver to be paid from consolidated corporate revenues. COUNT III ACCOUNTING 57. The averments and answers set forth in Paragraphs 1 through 56 are incorporated by reference as if more fully set forth at length herein. 15 58. Plaintiff has served as President and Chief Financial Officer of Goodrich & Company since its inception and, in that position, has had full access to and control over of the corporation's funds. 59. Defendant believes and therefore avers that Plaintiff has issued checks out of Market Square accounts and deposited them into Goodrich & Company accounts without the prior knowledge or consent of Defendant. Likewise, Defendant believes and therefore avers that while acting as the "President of Market Square" Plaintiff intercepted payments that were otherwise intended for Market Square and deposited the same into his own personal accounts and/or Goodrich & Company accounts without Defendant's prior knowledge and consent. 60. Defendant believes, and therefore avers that Plaintiff has paid all of his legal fees with respect to this dispute from the assets of Goodrich & Company. Defendant on the other hand, has paid all of her legal expenses out of her personal funds. 61. Since May of 2007, Plaintiff has had bills that should have been paid by Goodrich & Company billed to Market Square. 62. Plaintiff retains the financial books and records of Goodrich & Company, as well as his own personal records for the last two years, and should be ordered to produce an accounting of all revenues and expenditures (by payee) of the corporation during that time period. WHEREFORE, Defendant, Kathy Goodrich respectfully requests that this Honorable Court enter an Order directing Plaintiff to provide an accounting of all revenue and expenditures 16 of Goodrich & Company commencing May 1, 2007, through the date of the accounting, and further award Defendant all such other relief as is proper and just. Date: June 23, 2008 Respectfully submitted, Paige Macdonald-Matthes, Esquire Attorney I.D. #66266 SERRATELLI, SCHIFFMAN, BROWN & CALHOON, P.C. 2080 Linglestown Road Harrisburg, PA 17110 Telephone: (717) 540-9170 Attorneys for Defendant, Kathy J. Goodrich 17 I verify that the statements made in the foregoing Answer Together with Counterclaim to plaintiffs Complaint are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. Section 4904, relating to unsworn falsification to authorities. A C/ 6 ?Xwffo Date; 18 CERTIFICATE OF SERVICE I, Paige Macdonald-Matthes, Esquire, hereby certify that on this 23`d day of June, 2008, I served a true and correct copy of the foregoing Defendant's Answer, Together with Counterclaim, via United States First Class Mail, postage paid, upon the following: Charles W. Rubendall, It, Esquire Gary E. French, Esquire Donald M. Lewis, III, Esquire KEEFER WOOD ALLEN & RAHAL, LLP 210 Walnut Street P.O. Box 11963 Harrisburg, PA 17108-1963 Attorneys for Plaintiff Paige Macdonald-Matthes 19 Fx4 1 dI t ,?4 Entity #: 3728397 Date Filed: 05/09/2007 Pedro A. Cort6s Secretary of the Commonwealth PENNSYLVANIA DEPARTMENT OF STATE CORPORATION BUREAU Articles of Incorporation-For Profit (15 Pa.C.S.) 0 Business-stock (§ 1306) n Management (§ 2703) n Business-nonstock (§ 2102) Professional (§ 2903) [Business-statutory close (§ 2303) Insurance (§ 3101) Cooperative (§ 7102) Name Carol L. Verish, Esquire Address Keefer Wood Allen & Rahal, LLP, P.O. Box 11963 City state Zip Code Harrisburg, PA 17108-1963 Fee: $125 Document will be returned to the name and address you enter to the left G Commonwealth of Pennsylvania 1RTICLES OF INCORPORATION 3 Page(s) In compliance with the requirements of the applicable provisions (relating to corporations and unincorporated associations), the undersigned, desiring to incorporate a corporation for profit, hereby states that: 1. The name of the corporation (corporate designator required, i. e., "corporation incorporated", "limited" "company " or any abbreviation. "Professional corporation " or "P. C'): Goodrich & Company Promotions, Inc. 2. The (a) address of this corporation's current registered office in this Commonwealth (post office box, alone, is not acceptable) or (b) name of its commercial registered office provider and the county of venue is: (a) Number and Street City State Zip County 335 Southview Drive Mechanicsburg PA 17055 Cumberland (b) Name of Commercial Registered Office Provider County c/o: 3. The corporation is incorporated under the provisions of the Business Corporation Law of 1988. 4. The aggregate number of shares authorized: 10,000 RVIS -40 jM Yd 91 -h Wd 6- OW L00Z DSCB:15-1306,2102/2303/2702/2903/3101/7102A-2 5. The name and address, including number and street, if any, of each incorporator (all incorporators must sign below): Name Address Robert S_ (Tnndrich 335 Rnnthview Drive M , .h niegbigg PA 17055 6. The specified effective date, if any: upon tiling month/day/year hour, if any 7. Additional provisions of the articles, if any, attach an 8'/2 by 11 sheet. 8. Statutory close corporation only: Neither the corporation nor any shareholder shall make an offering of any of its shares of any class that would constitute a "public offering" within the meaning of the Securities Act of 1933 (15 U.S.C. 77a et seq.) 9. Cooperative corporations only: Complete and strike out inapplicable term: The common bond of membership among its members/shareholders is: IN TESTIMONY WHEREOF, the mcorporator(s) has/have signed these Articles of Incorporation this day of . 7 V P7 Signature Signature 0 0 CHARLES W. RUBENDALL It ROBERT L. WELDON EUGENE E. PEPINSKY. JR JOHN H. ENOS= GARY E. FRENCH DONNA S. WELDON BRADFORD DORRANCE JEFFREY S. STOKES ROBERT R. CHURCH STEPHEN L. GROSE R. SCOTT SHEARER ELISE E. ROGERS CRAIG A. LONGYEAR JOHN A. FEICHTEL DONALD M. LEWIS= STEPMANIE KLEINFELTER ERIC R. AUGUSTINE TODD F. TRUNTZ CAROL L VERISH KEEFER WOOD ALLEN & RAHAL, LLP ESTABLISHED IN 1076 ATTORNEYS AT LAW OF COUNSEL 210 WALNUT STREET HEATH L ALLEN P O. BOX 11963 N. DAVID RAHAL SAMUEL C. MARRY HARRISBURG, PA 17106-1963 WEST SHORE OFFICE; PHONE 17171 Z55-8000 635 NORTH 12•^ ST, SUITE 400 LEMOYNE. PA 17043 EIN No. 23-0716135 17171 612-5000 www.keeferwood.com August 13, 2007 WRITEFrS CONTACT INFORMATION: (717) 255-8015 exlchAkeefeywood. com 3'd Floor Fax: (717) 255-8050 VIA FAX to 540-5481 John D. Sheridan, Esquire Serratelli Schiffman Brown & Calhoun, PC 2080 Linglestown Road Harrisburg, PA 17110 Re: Market Square and Goodrich Dear John: This will confirm your voice mail to me on August 7, 2007, concerning the schedule of the February Valley Forge shows. I had the voicemail transcribed for Bob's benefit, and he and I have discussed the matter in detail. Bob is of the opinion that there is no good compromise of this issue. Based on his business judgment and many years of experience in the industry (having founded the Market Square business), he believes strongly that the most appropriate business decision for the company to make is to schedule the February shows with the order writing show held during the first part of the week and the cash and carry show to follow. The reverse schedule was universally criticized by order writing vendors at the 2007 show, both in the immediate aftermath of the show and since that time. Kathy may be talking to cash and carry vendors, who could well have a different point of view, but who nevertheless constitute a much smaller share of the profit generated by the February show, Bob, of course, is president of Market Square and charged with making strategic business judgments. On the other hand, Kathy is Secretary/Treasurer and as such is not charged with making strategic business judgments. She wants to overrule Bob's decision and schedule the two shows according to her best judgment. As you and I discussed, there is no easy compromise to this disagreement, either one show or the other will be scheduled first. )-laving said all of that, Bob continues to want to work toward a resolution of the entire matter. He believes that the resolution of the February schedule should be resolved in the context of resolving the entire set of issues regarding division of the company. This obviously includes the so-called "financial separation." • 9 c )4- k? ?, + Business Entity Page 1 of 2 s r; 1 i 1 State Corporations Online Services I Corporations I Forms I Contact Corporations I Business Services Search By Business Name By Business Entity ID Verify Verify Certification Online Orders Register for Online Orders Order Business List My Images Search for Images Business Entity Filing History Date: 6/20/2008 (Select the link above to view the Business Entity's Filing History) Business Name History Name Name Type MARKET SQUARE TRADITION Current Name WHOLESALE, INC. Business Corporation - Domestic - Information Entity Number: 2873992 Status: Active Entity Creation Date: 4/26/1999 7:22:19 AM State of Business.: PA Principal Office Address: 1775 SUMMERFIELD DR MECHANICSBURG PA 17055-0 Mailing Address: No Address Officers Name: Title: Address: Name: Title: Address: Name: Title: Address: GOODRICH,ROBERT S President 1775 SUMMERFIELD DR MECHANICSBURG PA 17055-0 GOODRICH,KATHY Treasurer 1775 SUMMERFIELD DR MECHANICSBURG PA 17055-0 GOODRICH,KATHY J Vice President 1775 SUMMERFIELD DR MECHANICSBURG PA 17055-0 http://www.corporations.state.pa.us/corp/soskb/Corp.asp?l 785361 6/20/2008 Business Entity Home I Site Map I Site Feedback I View as Text Only I Employment r 0A.410 0/,- 3 o Home Copyright ® 2002 Pennsylvania Department of State. All Rights Reserved. Commonwealth of PA Privacy Statement Page 2 of 2 ttp://www.corporations.state.pa.us/corp/soskb/Corp.asp? 1785361 6/20/2008 !+LIVi -??R?{?'J 7 z: I I to cz t imp oooz r SERRATELLI, SCHIFFMAN, BROWN & CALHOON, P.C. Paige Macdonald-Matthes, Esquire Supreme Court ID No. 66266 2080 Linglestown Road Harrisburg, PA 17110 (717) 540-9170 Attorneys for Defendant, Kathy J. Goodrich ROBERT S. GOODRICH, Plaintiff V. KATHY J. GOODRICH, Defendant : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA DOCKET NO.: 2008-3139 CIVIL TERM PRAECIPE TO SUBSTITUTE VERIFICATION TO THE PROTHONOTARY: Please substitute the attached original Defendant's Verifications for the faxed copy of Defendant's Verification that was attached to Defendant's Answer, Together With Counterclaim To Plaintiff's Complaint that was filed on June 23, 2008. Respectfully submitted, Date: June 26, 2008 Paige Macdonald-Matthes, Esquire Attorney I.D. #66266 SERRATELLI, SCHIFFMAN, BROWN & CALHOON, P.C. 2080 Linglestown Road Harrisburg, PA 17110 Telephone: (717) 540-9170 Attorneys for Defendant, Kathy J. Goodrich c.Uce??iv.u?? -?11? 1nG.a7 160- VERIFICATION I verify that the statements made in the foregoing Answer Together with Counterclaim to Plaintiffs Complaint are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. Section 4904, relating to unsworn falsification to authorities. Date: CERTIFICATE OF SERVICE I, Paige Macdonald-Matthes, Esquire, hereby certify that on this 26th day of June, 2008, I served a true and correct copy of the foregoing Praecipe to Substitute Original Verification via United States First Class Mail, postage paid, upon the following: Charles W. Rubendall, II, Esquire KEEFER WOOD ALLEN & RAHAL, LLP 210 Walnut Street P.O. Box 11963 Harrisburg, PA 17108-1963 Attorneys for Plaintiff Paige Mac onald-Matthes 7 s ...3 c--a "rt"1 ?-?- --t f'ti t?J 1'T'F 1 ? .?.1 ?- ? I ? ?'?? ' '??' :, iZ 1 • • ;> £„ri .? / ) KEEFER WOOD ALLEN & RAHAL, LLP Charles W. Rubendall II, Esquire Attorney I.D. No. 23172 Gary E. French, Esquire Attorney I.D. No. 25810 Donald M. Lewis III, Esquire Attorney I.D. No. 58510 210 Walnut Street, P. 0. Box 11963 Harrisburg, PA 17108-1963 717-255-8010, 255-8015 and 255-8038 crubendall@keeferwood.com gfrench@keeferwood.com dlewis@keeferwood.com ROBERT S. GOODRICH, Plaintiff V. Attorneys for plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION KATHY J. GOODRICH, Defendant No. 08-3139 Civil Term PLAINTIFF'S ANSWER TO DEFENDANT'S COUNTERCLAIM NOW COMES plaintiff, ROBERT S. GOODRICH, by and through his attorneys, Keefer Wood Allen & Rahal, LLP, to file his answer to defendant's counterclaim, averring as follows: 31. Paragraphs 1 through 30 of plaintiff's complaint are incorporated here by reference as though fully set forth. 32. Admitted. 33. Admitted in part and denied in part. It is admitted that plaintiff formed a new corporation called Goodrich & Company Promotions, Inc. ("Goodrich & Company") on May 9, 2007. It is denied that such action breached plaintiff's fiduciary duty to Market Square Tradition Wholesale, Inc. ("Market Square"). The mere formation of a corporate entity breaches no duty whatsoever. Goodrich & Company was formed to implement a tentative, partial settlement between the parties that ultimately was never consummated. The corporation conducted no business until such time as the settlement negotiations failed. At that time, Goodrich & Company was made a wholly-owned subsidiary of Market Square. The corporation has operated as a wholly-owned subsidiary of Market Square since June 2007, with full and complete disclosure of its operations to defendant. 34. The averments set forth in paragraph 33 of this answer are incorporated here by reference. Counsel for plaintiff advised counsel for defendant of the formation of Goodrich & Company for the purpose of accepting assets and contract rights that had been tentatively allocated to plaintiff as part of the proposed settlement between the parties. In fact, some of those assets and contract rights were transferred to Goodrich & Company in furtherance of the tentative settlement and remain there today. It was only after defendant arbitrarily refused to resolve the dispute that plaintiff -2- determined that no settlement could be achieved and that Goodrich & Company should become a wholly-owned subsidiary of Market Square. 35. Admitted in part and denied in part. It is admitted that Goodrich & Company is a wholly-owned subsidiary of Market Square. After reasonable investigation, plaintiff is without knowledge or information sufficient to form a belief as to the truth of defendant's understanding regarding Goodrich & Company, and proof thereof is hereby demanded at trial, if relevant. 36. Denied. Contracts transferred from Market Square to Goodrich & Company involved capitalization of a wholly-owned subsidiary, for which no consideration is required. None of the contracts were transferred surreptitiously, and all were transferred in anticipation of eventual partition of the assets into two separate companies. Market Square still indirectly owns said contracts as the owner of Goodrich & Company. Additionally, plaintiff is and remains the lawfully elected president of Market Square, despite defendant's repeated demands that he resign from that position so that defendant can manage the assets of Market Square to the exclusion of plaintiff. 37. Denied. Office files (both paper and electronic), supplies, materials and furnishings were transferred to Goodrich & Company to capitalize the corporation as a wholly- owned subsidiary of Market Square. No consideration is required -3- for such transfers. None of the assets were transferred surreptitiously, and all were transferred in anticipation of a partition of the corporate assets into two separate companies. Market Square still indirectly owns said assets as the owner of Goodrich & Company. Additionally, as indicated above, plaintiff is and remains the lawfully elected president of Market Square. 38. Denied. All actions taken by plaintiff were and are in the best interests of Market Square and Goodrich & Company and are consistent with past practices of Market Square for many years. As president of both Market Square and Goodrich & Company, plaintiff has authority to produce shows in whatever entity he determines will best serve both companies, so long as defendant's financial interest in Market Square is taken into account. 39. Admitted in part and denied in part. It is admitted that defendant variously proposed to divide the assets of Market Square or that she be bought out by plaintiff. It is denied that defendant ever presented a proposal to separate the financial affairs of the company that was commercially reasonable or acceptable to plaintiff. Moreover, all such proposals were made as part of settlement negotiations, which are inadmissible as evidence in this case. -4- 40. Denied. Defendant's characterizations of settlement negotiations are inadmissible as evidence and are also denied as factually inaccurate. 41. Denied. Defendant's characterizations of settlement negotiations are inadmissible as evidence and are also denied as factually inaccurate. 42. Admitted. 43. Admitted. WHEREFORE, plaintiff likewise requests that this Honorable Court partition the assets of Market Square and Goodrich & Company, as previously requested in plaintiff's complaint. COUNTERCLAIM COUNT I PARTITION OF CORPORATE ASSETS 44. The averments contained in paragraphs 31 through 43 of this Answer are incorporated here by reference as though fully set forth. 45. Admitted. 46. Denied. Plaintiff has exercised business judgment relative to Market Square and Goodrich & Company in a sound manner and consistent with his twenty years of management of the older company. Plaintiff founded Market Square in 1989 and has been the creative and marketing force behind the company since its inception. Defendant's role began in 1999 and involved -5- primarily accounting staff functions until plaintiff assigned additional duties to her in 2007. All allegations contained in subparagraphs a. through h. are false and/or involve detailed descriptions of settlement negotiations that are inadmissible in the trial of this case. Plaintiff rejects any and all tentative settlement discussions that were never consummated. 47. Admitted in part and denied in part. The parties are, in fact, having serious disagreements concerning the direction and management of the business affairs of Market Square and Goodrich & Company, all of which disagreements flow from defendant's unauthorized actions that financially benefitted her to the exclusion of plaintiff. Plaintiff denies that his behavior has been in any way unprofessional, erratic, or inappropriate. 48. Denied. Plaintiff's actions, as characterized by defendant, are denied. Plaintiff's true actions are as follows: a. Plaintiff has received the same salary from the Market Square/Goodrich & Company consolidated unit that he always has received. Defendant elected to take less salary without advising plaintiff. Accordingly, defendant violated the agreement that plaintiff and defendant would withdraw equal funds -6- by taking less salary than that to which she is entitled. b. Denied. All distributions to plaintiff from Goodrich & Company are in compliance with IRS requirements governing "S" corporations. C. Denied. After reasonable investigation, plaintiff is without knowledge or information sufficient to form a belief as to the truth of the matters asserted in paragraph 48c. of defendant's counterclaim, and proof thereof is demanded at trial, if relevant. To the extent that the allegations relate to uneven distributions between two fifty-percent shareholders, defendant created the jeopardy by taking greater withdrawals than plaintiff in prior years and by taking smaller withdrawals than plaintiff in 2007 and 2008, all without plaintiff's consent. 49. Denied. Plaintiff's behavior is in no manner erratic or unprofessional, and defendant's characterizations thereof are denied. In particular, all cash of Market Square and Goodrich & Company is available on an as-needed basis by either company, and can be transferred freely back and forth between the entities. Plaintiff is overseeing the operations of both companies, but has received no requests for cash from Market Square. However, -7- plaintiff's own requests for cash transfers from Market Square to Goodrich & Company have been denied. The remaining averments are pure fabrications that have no basis in fact. 50. Admitted in part and denied in part. It is admitted that the parties are currently having serious disagreements concerning the direction of the management of the business affairs of Market Square and Goodrich & Company. It is denied that plaintiff has exhibited unprofessional, erratic and inappropriate behavior. 51. Admitted. 52. Admitted. WHEREFORE, plaintiff likewise requests that this Honorable Court partition the assets of Market Square and Goodrich & Company in a manner which is fair and just to the parties, as previously requested in plaintiff's complaint. COUNTERCLAIM COUNT II APPOINTMENT OF RECEIVER 53. The averments contained in paragraphs 31 through 52 of this answer are incorporated here by reference as though fully set forth. 54. Admitted in part and denied in part. It is admitted that the ongoing shareholder deadlock will continue to harm and impede the sound and efficient management of Market Square and Goodrich & Company. It is denied that such shareholder deadlock -8- has been caused by plaintiff or by unilateral decisions on plaintiff's part. Poor cash management has been the defendant's hallmark, not plaintiff's. 55. Admitted. 56. Denied. James McCarthy, CPA, Esquire, is a capable accountant and attorney. Nevertheless, he would not be a neutral professional, having had a business relationship with defendant's legal counsel for many years. Moreover, Messrs. McCarthy and John D. Sheridan, Esquire, defendant's business counsel, were law school classmates, after having practiced in the Harrisburg area as certified public accountants for a number of years. WHEREFORE, plaintiff respectfully requests this Honorable Court to enter an Order appointing a neutral receiver, other than James McCarthy, CPA, Esquire, to manage the affairs of market Square and Goodrich & Company pending partition of the assets, with fees for the receiver to be paid from consolidated corporate revenues. COUNTERCLAIM COUNT III ACCOUNTING 57. The averments contained in paragraphs 31 through 56 of this answer are incorporated here by reference as though fully set forth. 58. Denied. Plaintiff serves as president of Goodrich & Company. Goodrich & Company does not have an elected chief -9- financial officer. However, plaintiff is primarily responsible for the Company's financial affairs and, therefore, is the unelected chief financial officer. 59. Denied. Plaintiff denies that any mishandling of funds has been conducted or directed by him. Further, plaintiff denies that financial information has been denied or made unavailable to, or even difficult to retrieve by, defendant. Moreover, the averments of this paragraph are so general and non-specific in nature as to be incapable of a detailed response. 60. Admitted in part and denied in part. It is admitted that Goodrich & Company has paid legal fees on behalf of plaintiff. After reasonable investigation, plaintiff is without knowledge or information sufficient to form a belief as to the truth of the averment about the payment of defendant's legal fees, and proof thereof is demanded at trial, if relevant. 61. Denied. After reasonable investigation, plaintiff is without knowledge or information sufficient to form a belief as to the truth of the averments in paragraph 61 of defendant's counterclaim, and proof thereof is hereby demanded at trial, if relevant. Moreover, said averments are so general and non-specific in nature as to be incapable of a detailed response. 62. Denied. Defendant has been provided with financial statements of Goodrich & Company on a regular basis since its inception. Defendant's opinion as to alleged surreptitious and -10- hidden acts by plaintiff reflect her own paranoia and are without basis in fact. The remaining averments set forth in paragraph 62 of the counterclaim state conclusions of law to which no response is required. To the extent a response is deemed required, the averments are specifically denied. WHEREFORE, plaintiff respectfully requests a full accounting from defendant, as previously requested in plaintiff's complaint. Respectfully submitted, KEEFER WOOD ALLEN & RAHAL, LLP 00 Dated: July 14, 2008 By 6 A 4 Charles W. Rubendall II Gary E. French Donald M. Lewis III 210 Walnut Street P. O. Box 11963 Harrisburg, PA 17108-1963 717-255-8010, 255-8015, and 255-8038 Attorneys for plaintiff -11- VERIFICATION The undersigned, Robert S. Goodrich, hereby verifies and states that: 1. He is plaintiff herein; 2. The facts set forth in the foregoing answer are true and correct to the best of his knowledge, information, and belief; and 3. He is aware that false statements herein are made subject to the penalties of 18 Pa.C.S. Sec. 4904, relating to unsworn falsification to authorities. ert S. Goodrich Dated: July ??2008 CERTIFICATE OF SERVICE I, Charles W. Rubendall II, Esquire, one of the attorneys for plaintiff, hereby certify that I have served the foregoing paper upon counsel of record this date by depositing a true and correct copy of the same in the United States mail, first-class postage prepaid, addressed as follows: Paige Macdonald-Matthes, Esquire Serratelli, Schiffman, Brown & Calhoon 2080 Linglestown Road Harrisburg, PA 17110 KEEFER WOOD ALLEN & RAHAL, LLP By OVA^ 900? Charles W. Rubendall II Dated: July 14, 2008 P"4 of } C-LL ? a e`sy - ROBERT S. GOODRICH, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff V. CIVIL ACTION - LAW KATHY J. GOODRICH, Defendant No. 08-3139 Civil Term JOINT MOTION FOR THE APPOINTMENT OF A CUSTODIAN The parties, through counsel shown below, hereby move this Honorable Court to appoint a certified public accountant to serve as the custodian of the businesses addressed by this litigation, pursuant to 15 Pa.C.S. § 1767, averring as follows: 1. This action seeks the partition of corporate assets owned in equal shares by plaintiff and defendant. The corporate entities involved are Market Square Tradition Wholesale, Inc. and its wholly owned subsidiary, Goodrich & Company Promotions, Inc. At the moment these companies are being operated by the parties, although without complete cooperation or disclosure with regard to each and every management decision made, invoice received, check written, and so on. 2. As a review of the pleadings will show, although disagreement exists as to how the current situation developed, the relief sought from the Court by both parties is the same, namely, the appointment of a custodian to manage the businesses while an analysis of a proposed partition is developed, full disclosure of all accounting details by both parties to the custodian, and an eventual partition of the assets, either as agreed by the parties or directed by the Court. 3. It is anticipated that the custodian will begin work on a recommended partition of assets soon after he or she is appointed and takes charge of the financial aspects of the business, with day-to-day managerial input being received by the custodian from both parties. 4. The parties have each suggested the appointment of a particular certified public accountant in their pleadings. Neither suggestion is acceptable to the other side. 5. Thus, the Court is asked to use its own discretion in selecting a certified public accountant to serve as custodian, subject to the parties' right to challenge, if done promptly, the Court's selection based upon a perceived conflict of interest or otherwise. 6. The charges of the custodian for time and expenses incurred will be deducted from the corporate assets to be partitioned. 7. The parties suggest that the custodian be initially directed to prepare and submit a recommended partition of assets not later than sixty (60) days after all requested accounting information and documents have been received from the parties. 8. The recommended partition will be shown first to the parties for their review and comment. If agreement can be - 2 - reached on the basis of the recommendation, a stipulated order will be submitted to the Court. 9. Failing agreement on the recommended partition, the same will be filed with the Court by the custodian, with an opportunity for objections to be filed by one or both parties. 10. Thereafter, the Court will determine the manner in which the partition of assets recommended by the court-appointed custodian and the objections of any party will be briefed and argued before a decision of the Court is rendered. WHEREFORE, plaintiff and defendant respectfully request the appointment of a custodian by the Court to gather information from the parties, conduct the business addressed by this action before a partition of the assets has been achieved, and prepare a recommended partition plan for consideration of the parties and, as necessary, the Court itself. Respectfully submitted, KEEFER WOOD ALLEN & RAHAL, LLP By Charles W. Rubendall II Gary E. French Donald M. Lewis III 210 Walnut Street P. 0. Box 11963 Harrisburg, PA 17108-1963 717-255-8010, -8015 & -8038 Attorneys for plaintiff Dated: August 2 Z, 2008 Respectfully submitted, SERRATELLI, SCHIFFMAN, BROWN & CALHOON Bvzs - , Paige Macdonald-Matthes 2080 Linglestown Road Harrisburg, PA 17110 717-635-2922 Attorneys for defendant Dated: August U3 , 2008 - 3 - C? ? `?-? cy; cta ? ? ? n? r:.:_ = - ? -?:. -f, c.r . ?.,? d .. (? "`31 .. Frt ?? r^' ROBERT S. GOODRICH, Plaintiff V. KATHY J. GOODRICH, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA : NO. 08-3139 CIVIL IN RE: STATUS CONFERENCE ORDER OF COURT AND NOW, this 18th day of September, 2008, upon consideration of the Joint Motion for Appointment of a Custodian, IT IS HEREBY ORDERED AND DIRECTED that a status conference will be held on Tuesday, October 7, 2008, at 11:00 a.m. in Chambers of Courtroom No. 5 of the Cumberland County Courthouse, Carlisle, Pennsylvania. By the Court, /Charles W. Rubendall, II, Esquire Attorney for Plaintiff ? Paige Macdonald-Matthes, Esquire Attorney for Defendant bas Copts n-L-atLq-cL M. L. Ebert, Jr., J. 4?/8?U6 'v' N'V'A 1,kSNN3d ox-,, -1 C I •£ Wd 81 d3S BOOZ MViOND+ I08d ?Hl d4 301140-031H D 7 AUG z 5100 41 ip ROBERT S. GOODRICH, IN THE COURT OF COMMON PLEAS O67 F CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff V. CIVIL ACTION - LAW KATHY J. GOODRICH, . Defendant No. 08-3139 Civil Term ORDER APPOINTING CUSTODIAN Upon consideration of the joint motion for the appointment of a custodian submitted by the parties, IT IS HEREBY ORDERED that: 1. The following certified public account, JVCU-Phnelbq4.,, ?,C,PA with offices at N iDPOOKGWood 14Ve. C..fW-4t'51e- fA /?O/3 , shall be appointed as custodian by the Court, pursuant to 15 Pa.C.S. § 1767, with additional directions as follows: a. This action seeks the partition of corporate assets owned in equal shares by plaintiff and defendant. The corporate entities involved are Market Square Tradition Wholesale, Inc. and,.i,ts wholly,owned subsidiary, Goodrich & Company, Promotions, Inc. At the ti moment these companies are being operated by the parties, although without complete cooperation or disclosure with regard to each and every management decision made, invoice received, check written, and so on. l s -tam -A*ej q.:r, - C "moo •' r '" ' - d 11L 00 4? q: , '"12211' '"l' - vol f'/, 16 9Z O-Z Nd ?z 130 8002 AUACIN HiOldd 3H1. 40 ?.1 314 b. As a review of the pleadings will show, although disagreement exists as to how the current situation developed, the relief sought from the Court by both parties is the same, namely, the appointment of a custodian to manage the businesses while an analysis of a proposed partition is developed, full disclosure of all accounting details by both parties to the custodian, and an eventual partition of the assets, either as agreed by the parties or directed by the Court. C. The custodian will begin work on a recommended partition of assets soon after he or she is appointed and takes charge of the financial aspects of the business, with day-to-day managerial input being received by the custodian from both parties. d. The parties may promptly challenge the selection noted above, that is, within ten (10) days of the date of this order, by filing objections with the Court and serving a copy of said objections on the other party. e. The charges of the custodian for time and expenses incurred will be deducted from the corporate assets to be partitioned. f. The custodian shall prepare and submit a recommended partition of assets not later than sixty - 2 - (60) days after all requested accounting information and documents have been received from the parties. g. The recommended partition will be shown first to the parties for their review and comment. If agreement can be reached on the basis of the recommendation, a stipulated order will be submitted to the Court. h. Failing agreement on the recommended partition, the same will be filed with the Court by the custodian, with objections to be filed by one or both parties within twenty (20) days. i. The Court will schedule an evidentiary hearing to occur within twenty (20) days of the timely filing of the last set of objections. IT IS SO ORDERED. BY THE COURT: ?Da? og '*k -? ? 11 J. - 3 - KEEFER WOOD ALLEN & RAHAL, LLP /Charles W. Rubendall II, Esquire Attorney I.D. No. 23172 Gary E. French, Esquire Attorney I.D. No. 25810 Donald M. Lewis III, Esquire Attorney I.D. No. 58510 210 Walnut Street, P. 0. Box 11963 Harrisburg, PA 17108-1963 717-255-8010 and 255-8038 ?l?wis@keeferw,:od.eo ROBERT S. GOODRICH, Plaintiff V. KATHY J. GOODRICH, Defendant Attorneys for plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION No. 08-3139 Civil Term PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION NOW COMES Robert S. Goodrich, plaintiff herein, by his counsel, Keefer Wood Allen & Rahal, LLP, and moves this Court, after notice and hearing, to issue a preliminary injunction pursuant to 15 Pa.C.S. § 1984 and Pa. R. Civ. P. 1531, enjoining defendant, Kathy Goodrich, as follows: 1. Plaintiff and defendant are each 50% owners of a Pennsylvania business corporation known as Market Square Tradition Wholesale, Inc. ("Market Square"). Market Square is 100% owner of Goodrich & Company Promotions, Inc. ("Goodrich & Company"), also a Pennsylvania business corporation. 2. Market Square was incorporated by plaintiff in 1999. Goodrich & Company was incorporated by plaintiff in 2007 at a time when the parties were considering an amicable division of corporate assets. However, no agreement was reached. 3. Continuously since Goodrich & Company was capitalized with assets (i.e., shortly after its incorporation in 2007), it has operated as a wholly-owned subsidiary of Market Square, subject to the direction and control of Market Square's deadlocked board of directors. 4. Plaintiff is the elected president of Market Square. Defendant is the elected secretary/treasurer of Market Square. 5. In May 2008, plaintiff filed this action to seek Court assistance in dividing the corporate assets or in dissolving the corporation and distributing said assets, pursuant to the provisions of the Pennsylvania Business Corporation Law, 15 Pa.C.S. §§ 1767 and 1981, et seq. - 2 - 6. Pursuant to 15 Pa.C.S. § 1984, the Court has authority to grant injunctive relief to preserve the assets of the corporations and to carry on the business of the corporations, pending final division or dissolution and distribution of assets. 7. As stated in the complaint in this matter, Market Square/Goodrich & Company are in the business of promoting wholesale and retail craft shows. They derive income by subleasing exhibitor space and charging admission to shows that they produce at various venues in the Northeast United States. Major expenses include convention space rentals, decorator costs and advertising expenses, as well as office overhead and personnel costs. 8. The two most profitable shows of the corporations are the Valley Forge Winter Show (produced annually in January) and the Valley Forge Summer Show (produced annually in June). 9. Seventy-five (75%) of the annual revenue of the corporations is derived from the Valley Forge Winter and Summer Shows. 10. As a result of unilateral action by defendant, and without plaintiff's consent or participation, defendant has asserted exclusive control over certain assets and shows of Market Square/Goodrich & Company and has affirmatively - 3 - relinquished control to plaintiff over far fewer assets and shows of Market Square/Goodrich & Company. 11. Defendant's actions in exerting exclusive control include maintaining a Market Square website after closing longstanding email access to plaintiff's staff, entering into contract agreements with ExpoLogic, who refuses to recognize plaintiff's authority as president of the corporation, taking action to exclude plaintiff from access to Market Square computerized customer lists, terminating Goodrich & Company insurances, utilities and other necessary business services without reason and without prior notice to plaintiff, and other harmful actions'. 12. Defendant has recently taken further action that is intended to prejudice the current judicial proceedings for the division of corporate assets and that jeopardizes the value of those assets, including goodwill. 13. Prior to the Court's action on a division of corporate assets, defendant has announced that she is causing certain Market Square assets that operate what is called the cash and carry segment of the Valley Forge Winter Show to be partnered 1/ These other actions include, inter alia, unauthorized use of corporate telephone numbers, closing of email accounts, appropriating bank accounts, failures to pay invoices when due, and deletion of computer files. - 4 - with a major competitor of Market Square, Urban Expositions & Development, LLC (hereinafter "Urban"), which operates a winter show in Valley Forge that competes directly with Market Square's Winter Show. 14. Defendant intends to leave behind the original Market Square Winter Show, and then drive it out of business using the goodwill of the Market Square name along with the competitor's assets. 15. The clear purpose of defendant's actions is to partner with a competitor in order to use the Market Square name to compete unfairly against the existing Market Square Winter Show. 16. Additionally, defendant has also allied the Market Square Valley Forge Summer Show with Urban Expositions in order to destroy any possibility of that show's being awarded to plaintiff in this proceeding. 17. Defendant's actions are intended to impose a fait accompli with regard to the current court proceedings or to achieve a scorched earth result. In other words, her apparent view is that either X shows and X assets are distributed to defendant per her demands and in accordance with the public announcement already made, or the shows will go up in flames and neither party will derive any value from them. - 5 - 18. All these actions by defendant are in violation of her fiduciary obligations to Market Square. 19. The Court has authority to preserve the assets of Market Square and Goodrich & Company. 20. Plaintiff, Market Square and Goodrich & Company will suffer immediate and irreparable harm if an injunction is not granted. 21. Plaintiff has no adequate remedy at law to redress the current and impending harm from defendant's continued conduct. 22. Defendant will not suffer any appreciable injury if the requested preliminary injunction is issued because the status quo between the parties will be restored to where it was before defendant's wrongful conduct began. 23. The issuance of the requested preliminary injunction will not be contrary to the public interest. 24. Plaintiff is likely to succeed on the merits of his claims. 25. The Court should, therefore, issue a preliminary injunction, as follows: a. Ordering defendant to cease and desist from breaching or disavowing the existing January 2010 lease - 6 - for exhibition space at the Valley Forge Convention Center executed in the name of Market Square; b. Ordering defendant to cease and desist from any further action to remove assets from the control of the Court by making public announcements of what she intends to do with corporate assets; C. Relieving defendant of her duties as secretary/treasurer of Market Square and removing her from all management positions in Market Square; d. Granting plaintiff authority to take all appropriate action to void any facility leases signed by defendant without authority of the Court or unanimous action by Market Square's board of directors; e. Directing defendant to retract all announcements regarding Urban, planned events with Urban, and any other affiliations with Urban; f. Directing defendant to merge the Market Square buyer file database back into one file that both plaintiff and defendant may access and utilize fully; g. Awarding plaintiff all appropriate monetary relief to compensate him for all permanent harm that - 7 - cannot be adequately redressed by the entry of the requested preliminary injunction; and h. Granting plaintiff such other and further relief as the Court deems appropriate and just. 26. Plaintiff is prepared to promptly post appropriate security in the form of a surety bond(s) or other undertaking as the Court may direct. WHEREFORE, plaintiff respectfully requests that this Honorable Court issue a preliminary injunction enjoining and restraining defendant as prayed for herein. Respectfully submitted, KEEFER WOOD ALLEN & RAHAL, LLP Dated: February 19, 2009 By Charles W. Rubendall II I.D. # 23172 Gary E. French I.D. # 25810 Donald M. Lewis III I.D. # 58510 210 Walnut Street P. 0. Box 11963 Harrisburg, PA 17108-1963 717-255-8010, 255-8015, and 255-8038 Attorneys for plaintiff - 8 - VERIFICATION The undersigned, Robert S. Goodrich, hereby verifies and states that: 1. He is plaintiff herein; 2. The facts set forth in the foregoing motion are true and correct to the best of his knowledge, information, and belief; and 3. He is aware that false statements herein are made subject to the penalties of 18 Pa.C.S. Sec. 4904, relating to unsworn falsification to authorities. aobertt S. GooSdrich Dated: February -A'z 1 2009 CERTIFICATE OF SERVICE I, Charles W. Rubendall II, Esquire, one of the attorneys for plaintiff, hereby certify that I have served the foregoing paper upon counsel of record this date by depositing a true and correct copy of the same in the United States mail, first-class postage prepaid, addressed as follows: John D. Sheridan, Esquire Paige Macdonald-Matthes, Esquire Serratelli, Schiffman, Brown & Calhoon 2080 Linglestown Road Harrisburg, PA 17110 KEEFER WOOD ALLEN & RAHAL, LLP B y VM' Charles W. Rubendall II Dated: February 19, 2009 r,"'? rv _- ,? ? ; ` r,,..p ,.-T? .,_-? ?? T f•? ? `v? # _ .. ::: y ..... '„? FLE g ? d 1E??;'?G, ROBERT S. GOODRICH, v. KATHY J. GOODRICH, Plaintiff Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW No. 08-3139 Civil Term ORDER AND NOW, this c?'4 day of v 2009, upon consideration of plaintiff's motion for a preliminary injunction, IT IS ORDERED that a hearing be set for 5 , 2009, at a:09 o'clock in the Cumberland County Courthouse, courtroom no. 5 ?.??? ?? ?r ? ??t? 3 #,? .- ? ?'S ? ?' ?' ?? t ,:,?? <<?? ?, R,? ?? ??.? ?Ci?Z c, t =' ? . :? ??. T ;4?? .t.???-? 6 SERRATELLI, SCHIFFMAN, BROWN & CALHOON, P.C. Paige Macdonald-Matthes, Esquire Supreme Court ID No. 66266 2080 Linglestown Road Harrisburg, PA 17110 (717) 540-9170 Attorneys for Defendant, Kathy J Goodrich ROBERT S. GOODRICH, : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff : DOCKET NO.: 2008-3139 CIVIL TERM V. KATHY J. GOODRICH, Defendant DEFENDANT'S REPLY IN OPPOSITION TO PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION AND NOW, comes Defendant, Kathy J. Goodrich ("Defendant"), by and through her counsel, Serratelli, Schiffman, Brown & Calhoon, P.C., and files her Reply in Opposition to Plaintiff's Motion for Preliminary Injunction, Together with New Matter and in support thereof aver as follows: 1. Admitted in part and denied in part. It is admitted that Plaintiff and Defendant are each 50% owners of the Pennsylvania business corporation known as Market Square Tradition Wholesale, Inc. ("Market Square"). Defendant is without sufficient information to know whether Goodrich & Company Promotions, Inc. ("Goodrich & Company") is owned by Market Square. Plaintiff, Robert S. Goodrich, took it upon himself to form Goodrich & Company without consultation with Defendant or her business counsel. Attached hereto and made a part of this Reply is Exhibit "B" showing the only incorporator of Goodrich & Company is Robert S. Goodrich. Defendant was unaware of Plaintiff's unauthorized actions. It was not until Plaintiff's counsel sent a letter to Defendant's business counsel on July 20, 2007 stating "As of Wednesday afternoon (July 28, 2008), Goodrich & Company, a new corporate entity, became a subsidiary of Market Square," that Defendant became aware that Goodrich & Company was supposedly a wholly owned subsidiary. 2. Admitted in part and denied in part. It is admitted that Market Square was incorporated in 1999. It is denied that "Market Square was incorporated by Plaintiff." It is further denied that "Goodrich & Company was incorporated at a time when the parties were considering an amicable division of corporate assets." To the contrary, the parties began negotiations for the division of corporate assets in 2006. In April 2007, Plaintiff, with the assistance of his corporate counsel, unilaterally determined to form Goodrich & Company to effectuate a separation of the parties, whether or not Defendant agreed with it. In so doing, Plaintiff took whatever employees he wanted from Market Square, the shows that he desired to have, and set up operations at a new location with new telephone numbers, mailing addresses, websites, etc. 3. Denied. It is denied that "continuously since Goodrich & Company was capitalized with assets (i.e., shortly after its incorporation in 2007), it has operated as a wholly-owned subsidiary of Market Square subject to the direction and control of Market Square's deadlocked board of directors." To the contrary and as previously stated herein, in April 2007, Plaintiff, with the assistance of his 2 corporate counsel, unilaterally determined to form Goodrich & Company to effectuate a separation of the parties, whether or not Defendant agreed with it. In so doing, Plaintiff took whatever employees he wanted from Market Square, the shows that he desired to have, and set up operations at a new location with new telephone numbers, mailing addresses, websites, etc. Indeed, the Goodrich & Company was "capitalized" with assets that Plaintiff unilaterally determined to take from Market Square without prior approval or authorization from Defendant or Market Square's board of directors. Since the formation of Goodrich & Company, Defendant has not only run the day to day operations of Market Square, she has also injected her own personal funds into that company to make it a success. Plaintiff has taken no steps to insure the continued success of Market Square, and in fact has deliberately taken adverse action against Market Square, i.e. marketing shows using the Market Square name and then cancelling them at the last minute in direct contravention to his fiduciary duty to Market Square. 4. Denied. It is denied that "Plaintiff is the elected president of Market Square." To the contrary, Plaintiff appointed himself as president. It is further denied that "Defendant is the elected secretary/treasurer of Market Square." To the contrary, Plaintiff unilaterally determined to assign Defendant this title. 5. Admitted. By way of further reply, Defendant similarly filed an action to the above captioned docket number to seek court assistance in dividing the corporate assets or in dissolving the corporation and distributing said assets, pursuant to the provisions of the Pennsylvania Business Corporation Law, 15 Pa. C. S. § 1767 and § 1981, et seq. 3 6. The averments set forth in paragraph 6 of Plaintiff's Motion state conclusions of law to which no response is required. 7. Admitted in part and denied in part. With the exception of the phrase, "Market Square/Goodrich & Company," which suggests and/or implies that the two entities are in business together or are working in tandem with one another which is NOT the case, the averments set forth in paragraph 7 of Plaintiff's Motion is admitted. 8. Admitted. 9. Admitted in part and denied in part. It is admitted that seventy-five (75%) percent of the annual revenue of Market Square is derived from the Valley Forge Winter and Summer Shows. Defendant is without knowledge as to what percentage of Goodrich & Company's annual revenue is derived from those shows as Plaintiff has failed and otherwise refused to provide Defendant with the financial statements for Goodrich & Company which would presumably include this information 10. Denied. It is denied that "as a result of unilateral action by defendant, and without Plaintiff's consent or participation, Defendant has asserted exclusive control over certain assets and shows of Market Square/Goodrich & Company and has affirmatively relinquished control to Plaintiff over far fewer assets and shows of Market Square/Goodrich & Company." To the contrary, and as a preliminary matter, Market Square and Goodrich & Company are not operated together and have not been operated together since Plaintiff unilaterally (and surreptitiously) determined to form Goodrich & Company using pilfered tangible 4 and intangible assets from Market Square. It is further denied that Defendant has taken any "unilateral action" which would equate to "exclusive control over certain assets and shows of Market Square." To the contrary, Defendant, with the full knowledge and consent of Plaintiff, has run the day-to-day operations of Market Square and has injected her own personal funds into that company to make it a success. On the other hand, Plaintiff has contributed nothing to Market Square since 2007 (when he surreptitiously formed Goodrich & Company using Market Square's assets). In fact, Plaintiff has set out on a course of conduct to sabotage Defendant's efforts to make Market Square a successful business venture, as evidenced by the following: (a) Defendant started a Cash-and-Carry Show in Fredericksburg, Virginia in October of 2008. Plaintiff contacted the owner and instructed him that Defendant had no authority to sign contracts and that she could not have the show without his approval. (b) Plaintiff started an Order Writing and Cash-and Carry Show in Ohio scheduled for March 19 and 20, 2009. Plaintiff never contacted Defendant with respect to this show. (c) With respect to the Winter Show at Valley Forge last month, Plaintiff moved Defendant's Cash-and-Carry portion of the show to the end of the Order Writing Show. Cash-and-Carry for this show, since 1998, has always been at the beginning of the show. This change allowed Heritage Markets (a major competitor) to precede Plaintiff's Order Writing Show to the detriment of Defendant's Cash-and-Carry Show. Heritage Markets and Goodrich and Company do joint advertising promotions which is no small coincidence since Heritage Markets is owned by Plaintiffs sister. (d) During the Winter Show at Valley Forge, Plaintiff informed Defendant that she would not be permitted on the floor until 11:59PM the night Plaintiff's contract expired. There were no accommodations for exhibitor's to move in earlier which caused Defendant's exhibitors to set up in the middle of the night which caused nothing but ill will. (e) At that same show, Plaintiff, knowing that Market Square charges $695.00 for a 10' X 10' booth, started charging only $345.00 for the same size booth. 5 When Plaintiff did not completely sell out, he began offering the booth for free. Thus, Plaintiff took affirmative steps to undercut one of his own shows. 11. Denied. It is denied that Defendant has taken any "harmful action ... without reason and without prior notice to Plaintiff." By way of further reply, it is denied that Plaintiff was shut out of Expo Logic. To the contrary, Defendant specifically offered to provide Plaintiff with all of her information from Expo Logic. Moreover, Defendant made arrangements with Expo Logic to share all buyer information, to prove, once again, that Defendant was not withholding any information and that Plaintiff s fears and concerns were unwarranted. Ironically, and contrary to Plaintiff s claims raised herein, the ultimate result of this exercise was the revelation that Plaintiff already had been provided with the information he was seeking from Defendant. 12. Defendant is without knowledge as to what "recent further action" she is alleged to have taken that is "intended to prejudice the current judicial proceedings for the division of corporate assets and that jeopardizes the value of those assets, including goodwill," as Plaintiff s pleading is vague and ambiguous. Strict proof supporting the allegations set forth in paragraph 12 of Plaintiff s Motion is demanded at the time of trial. 13. Denied. It is denied that Defendant is "causing certain Market Square assets that operate what is called the cash and carry segment of the Valley Forge Winter show to be partnered with a major competitor of Market Square, Urban Expositions & Development, LLC (hereinafter "Urban") which operates a winter 6 show in Valley Forge that competes directly with Market Square's Winter Show." To the contrary, Defendant intends to have a Cash and Carry show in February 2010, after the Plaintiff s Order Writing Show at Valley Forge. The Valley Forge Convention Center is not large enough to accommodate both a Cash and Carry Show and Order Writing Show at the same time. Given the Plaintiff s behavior with respect to the Winter Show 2009, (as detailed herein above in paragraph 10), it is in the best interests of the exhibitors of Market Square to have both Order Writing and Cash and Carry Shows offered at the same facility. The only time that Market Square and Urban Exhibitions will be in the Greater Philadelphia Expo Center ("GPEC") simultaneously will be in February 2010. Market Square has their own contracts with GPEC as does Urban Exhibitions. 14. Denied. It is denied that "Defendant intends to leave behind the original Market Square Winter Show, and then drive it out of business using the goodwill of the Market Square name along with the competitor's assets." To the contrary, the only person trying to drive Market Square out of business is Plaintiff, as evidenced by his continued willingness to cancel shows at the eleventh hour using the Market Square name and causing confusion in the market place. 15. Denied. It is denied that "the clear purpose of Defendant's actions is to partner with a competitor in order to use the Market Square name to compete unfairly against the existing Market Square Winter Show." To the contrary, Defendant is not in partnership with, nor has any intention of entering into a partnership with a competitor in order to use the Market Square name to compete unfairly against the existing Market Square Winter Show and any suggestion that she is, is little 7 more than absurd given the fact that Defendant has infused a great deal of her own funds into Market Square in order to insure its continued successful operation. 16. Denied. It is denied that "Defendant has also allied the Market Square Valley Forge Summer Show with Urban Expositions in order to destroy any possibility of that show's being award to Plaintiff in this proceeding." 17. Denied. It is denied that "Defendant's actions are intended to impose a fait accompli with regard to the current court proceedings or to achieve a scorched earth result." To the contrary, Defendant actions are intended to keep Market Square operating in a sound and efficient manner, despite Plaintiff continued willingness to try and sabotage the business. Finally, and by way of further reply, it was Plaintiff's idea that there would be two separate companies and published this fact to the parties' clients. While Defendant has run her side of the business in a sound and efficient manner, Plaintiff has continued to run his side of the business at a deficit. Indeed, if any one has sought to achieve a "scorched earth result" it is Plaintiff, as evidenced by his recent activities at the Winter Show at the Valley Forge Convention Center in January 2009, as more fully set forth at length herein in paragraph 10. 18. The averments set forth in paragraph 18 state conclusions of law to which no response is required. In the event that it is later judicially determined that an answer is so required, it is denied that Defendant has acted in violation of her fiduciary obligation to Market Square. To the contrary, at all times relevant, Defendant has operated Market Square in a sound and efficient manner. 8 19. The averments set forth in paragraph 19 state conclusions of law to which no response is required. 20. Denied. It is denied that "Defendant should be ordered to cease and desist from breaching or disavowing the existing January 2010 lease for exhibition space at the Valley Forge Convention Center executed in the name of Market Square," for the reasons set forth in paragraph 13 herein. 21. Denied. It is denied that the "Defendant should be ordered to cease and desist from any further action to remove assets from the control of the Court by making public announcements of what she intends to do with corporate assets" as Defendant has not "removed any assets from the control of the Court by making public announcements of what she intends to do with corporate assets." To the contrary, Plaintiff has and continues to remove corporate assets from the control of the Court and further continues to act in a manner that is highly detrimental to Market Square's future and continued success in the business of promoting wholesale and retail craft shows. 22. Denied. It is denied that "Defendant should be relieved of her duties as secretary/treasurer of Market Square and removed from all management positions in Market Square." To the contrary, but for the efforts of Defendant and the infusion by Defendant of her own cash into the business where necessary, Market Square would not have achieved the success it enjoys today. Conversely, Goodrich & Company continuously operates at a deficit and continues to lose money by virtue of the poor business decisions made by and subpar management 9 skills of Plaintiff. Thus, if any one should be relieved of their duties as it pertains to these two entities it is Plaintiff, who continues to mismanage the business. 23. Denied. It is denied that "Plaintiff should be granted authority to take all appropriate action to void any facility leases signed by Defendant without authority of the Court or unanimous action by Market Square's board of directors." To the contrary, the Court should not grant Plaintiff any unilateral authority to do anything regarding the businesses, given Plaintiff's demonstrated track record of losing money, jeopardizing client relationships, and alienating vendors. 24. Denied. It is denied that "Defendant should be directed to retract all announcements regarding Urban, planned events with Urban, and any other affiliations with Urban," for all the reasons set forth herein in general and specifically in paragraph 13. 25. Denied. It is denied that "Defendant should be directed to merge buyer file database back into one file that both Plaintiff and Defendant may access and utilize fully." To the contrary, Defendant has paid for her use of the data base on behalf of Market Square. Plaintiff, acting on behalf of Goodrich & Company allowed his account with the Expo Logic to go into default due to non-payment. Thus, Plaintiff is arguing that he should be allowed to use and have access to information that he did not otherwise pay for. The Court should not indulge such folly. 26. Denied. It is denied that the "Plaintiff should be awarded his attorney fees and costs in connection with this motion and such other relief as the Court deems 10 appropriate and just." By way of further reply, there is no authority in statute or in law substantiating Plaintiff's request for counsel fees. Finally, and by way of further reply, Plaintiff does not come before this Honorable Court with clean hands. Plaintiff has routinely taken actions that have been self-serving and in direct violation of his fiduciary duty to Market Square, as most recently evidenced by his actions during the Winter Show in January 2009. Plaintiff has at all times taken actions which suit his own agenda, including but not limited to carrying on ex parte communications with the accountant appointed by the Court, Joel Flinchbaugh, and directing his counsel to have ex parte communications with the Court, as recently evidenced by Attorney Rubendall's submission of an unverified "draft" copy of the Motion for Preliminary Injunction directly to Judge Ebert. Neither Plaintiff's conduct, nor Plaintiff's counsel's blatant violation of the Rules of Civil Procedure and Professional Conduct should be condoned by this Honorable Court. WHEREFORE, Defendant, Kathy Goodrich respectfully requests that this Court: (a) Enter such preliminary and/or permanent injunctive relief as is necessary to preserve the corporate assets of Market Square and Goodrich & Company pursuant to 15 Pa. C. S. §1984; (b) Partition the assets of Market Square and Goodrich & Company in accordance with the terms and conditions set forth in Exhibit "A" attached hereto' (c) Enter an Order dissolving the two (2) corporations pursuant to 15 Pa. C.S. § 1981, et seq.; and II (d) Award Defendant all such other relief as is proper and just. Respectfully submitted, Date: February 26, 2009 .--r Paige Macdonald-Matthes, Esquire Attorney I.D. #66266 SERRATELLI, SCHIFFMAN, BROWN & CALHOON, P.C. 2080 Linglestown Road Harrisburg, PA 17110 Telephone: (717) 540-9170 Attorneys for Defendant, Kathy J. Goodrich 12 vE1tIIa1 C MON . I verify that the statements made in the foregoing Reply in opposition to Plaintes Motion for Preliminary Injunction are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. Section 4904, relating to unworn falsification to authorities. Date: ?j 13 CERTIFICATE OF SERVICE I, Paige Macdonald-Matthes, Esquire, hereby certify that on this 26`h day of February, 2009, I served a true and correct copy of the foregoing Defendant's Reply in Opposition to Plaintiff's Motion for Preliminary Injunction, via United States First Class Mail, postage paid, upon the following: Charles W. Rubendall, II, Esquire Gary E. French, Esquire Donald M. Lewis, III, Esquire KEEFER WOOD ALLEN & RAHAL, LLP 210 Walnut Street P.O. Box 11963 Harrisburg, PA 17108-1963 Attorneys for Plaintiff Paige Macdonald-Matthes ?? 14 EXHIBIT "B" DIVISION OF SHOWS Kathy Jan. - Market Square Madison Show Jan. - Madisson Orderwriting and Cash & Carry Robert Jan. - Designer Craftsman/Historic Home Shows (Retail Valley Forge) Jan. - Market Square Winter Show Valley Forge - Orderwriting Feb. - Valley Forge - Cash and Carry April - Cash & Carry New England June - Market Square/Midwest Madison (Orderwriting and Cash & Carry Wholesale) Market Square/Summer Show Valley Forge Orderwriting and Cash & Carry Sept. - Cash & Carry Valley Forge Cash & Carry Madison Oct. - Cash & Carry Marlboro Cash & Carry Valley Forge Cash & Carry Fredericksburg, VA Mar. - York Folk Art & Craft Show The Antiques Show At York Mid Atlantic Flower Show Historic Home Show At York Mar. - Market Square New England Show Orderwriting Wholesale Market Square American Made Invitational Sturbridge Market Square American Made Invitational Columbus April - Designer/Historic Home Retail Sturbridge, MA Nov. - York Folk Art & Craft Show The Antiques Show At York Show -6- {"? r? f _ ---> c a ? ', *.a # 1 ?l t"., ?-., -..? ? _.'.; .. 7 ? ?-; ?.',? SERRATELLI, SCHIFFMAN, BROWN & CALHOON, P.C. Paige Macdonald-Matthes, Esquire Supreme Court ID No. 66266 2080 Linglestown Road Harrisburg, PA 17110 (717) 540-9170 Attorneys for Defendant, Kathy J. Goodrich ROBERT S. GOODRICH, : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff DOCKET NO.: 2008-3139 CIVIL TERM V. KATHY J. GOODRICH, Defendant DEFENDANT'S MOTION TO DISMISS PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION OR IN THE ALTERNATIVE MOTION FOR SPECIAL RELIEF RE: USE OF TELEPHONIC TESTIMONY AND NOW, comes Defendant, Kathy J. Goodrich ("Defendant"), by and through her counsel, Serratelli, Schiffman, Brown & Calhoon, P. C., and files her Motion to Dismiss Plaintiff's Motion for Preliminary Injunction, Or In the Alternative, Motion for Special Relief Re: Use of Telephonic Testimony, and in support thereof aver as follows: Abbreviated Factual History Plaintiff and Defendant are each 50% owners of the Pennsylvania business corporation known as Market Square Tradition Wholesale, Inc. ("Market Square") 2. In April 2007, Plaintiff, with the assistance of his corporate counsel, unilaterally determined to form Goodrich & Company to effectuate a separation of the parties, whether or not Defendant agreed with it. In so doing, Plaintiff took whatever employees he wanted from Market Square, the shows that he desired to have, and set up operations at a new location with new telephone numbers, mailing addresses, websites, etc. Indeed, the Goodrich & Company was "capitalized" with assets that Plaintiff unilaterally determined to take from Market Square without prior approval or authorization from Defendant or Market Square's board of directors. Since the formation of Goodrich & Company, Defendant has not only run the day to day operations of Market Square, she has also injected her own personal funds into that company to make it a success. Plaintiff has taken no steps to insure the continued success of Market Square, and in fact has deliberately taken adverse action against Market Square, i.e. marketing shows using the Market Square name in conjunction with a competitor of Market Square, Heritage; giving booths away at the Valley Forge Winter Show rather than charging a fee for the same; and cancelling shows advertised as "Market Square" at the last minute in direct contravention to his fiduciary duty to Market Square. 3. As was confirmed by the testimony given by Plaintiff during the hearing on his Motion for Preliminary Injunction on Thursday, March 5, 2009, Market Square and Goodrich & Company are not operated together and have not been operated together since Plaintiff unilaterally decided to form Goodrich & Company using tangible and intangible assets from Market Square and further divided the shows between the two entities in April, 2007, as evidenced by Plaintiff's business counsel's letter to Defendant's business counsel dated April 16, 2007, which was marked as Defendant's Exhibit 2 during the March 5, 2009 hearing. 2 Facts Supporting Motion to Dismiss Plaintiffs Motion for Preliminarv Injunction 4. On or about February 19, 2009, the Plaintiff filed his Motion for Preliminary Injunction (hereinafter "Motion") with this Honorable Court. 5. In his Motion, Plaintiff alleged that Defendant "has taken harmful action ... without reason and without prior notice to Plaintiff." Specifically, Plaintiff alleged that he had been "shut out of Expo Logic" by Defendant; that Defendant is "causing certain assets of Market Square that operate what is called the cash and carry segment of the Valley Forge Winter Show to be partnered with a major competitor of Market Square, Urban Expositions & Development, LLC (hereinafter "Urban"); Defendant intends to leave behind the original Market Square Winter show, and then drive it out of business using the goodwill of Market Square name along with the competitor's assets; and Defendant has "allied the Market Square Valley Forge Summer Show with Urban Expositions in order to destroy any possibility of that show's being awarded to Plaintiff in this proceeding. 6. In the ad adamnum clause to his Motion, Plaintiff requests that this Honorable Court issue a preliminary injunction which, inter alia, prevents Defendant from continuing to operate Market Square; places Plaintiff in charge of Market Squarel; and "awards plaintiff all appropriate monetary relief to compensate him I This is indeed an ironic request given the fact that the financial statements produced during the hearing on March 9, 2009 demonstrate that Defendant has been operating Market Square profitably whereas Plaintiff has operated Goodrich & Company at a substantial loss. In fact, based on the financial statements produced by Plaintiff for Goodrich & Company during the March 9, 2009 hearing, Goodrich & Company is virtually bankrupt company. for all permanent harm that cannot be adequately redressed by the enty r of the requested preliminary injunction." (Emphasis added). 7. Despite raising the issue that he was purportedly "shut out of Expo Logic by Defendant," Plaintiff offered absolutely no testimony on this issue during the March 5, 2009 hearing. Instead, Plaintiff's counsel focused his direct examination of Plaintiff on the issue involving Urban Exposition. 8. During the March 5, 2009 hearing, Plaintiff admitted the following: a. The Winter Valley Forge Cash and Carry Show is and always has been Defendant's show; b. Defendant has operated Market Square since April 16, 2007; c. Defendant has operated Market Square since April 16, 2007 in a fiscally prudent manner, as evidenced by the Financial Statements for Market Square, which were marked as Defendant's Exhibit 4 during the March 5, 2009 hearing; d. Defendant was assigned the Winter Valley Forge Cash and Carry show, in accordance with the division of shows prepared on behalf of Plaintiff by his business counsel in a letter dated April 16, 2007; e. Plaintiff has operated Goodrich & Company at a loss since April 16, 2007, and further the current financial statements show that the business is bankrupt, as evidenced by the Financial Statements produced by Plaintiff at the March 5, 2009 hearing and which was marked as Defendant's Exhibit 3; 4 f. Plaintiff does not (and never has) considered Urban Exposition as a competitor of Market Square, as Market Square has a "niche market;" g. Plaintiff never contacted Urban Exposition in his "capacity as President of Market Square" to confirm the veracity of the claims raised in his Motion, to wit: That Defendant is "causing certain assets of Market Square that operate what is called the cash and carry segment of the Valley Forge Winter Show to be partnered with a major competitor of Market Square, Urban Expositions & Development, LLC (hereinafter "Urban"); Defendant intends to leave behind the original Market Square Winter show, and then drive it out of business using the goodwill of Market Square name along with the competitor's assets; and Defendant has "allied the Market Square Valley Forge Summer Show with Urban Expositions in order to destroy a any possibility of that show's being awarded to Plaintiff in this proceeding.; h. Plaintiff gave away booths during the 2009 Valley Forge Winter Show; i. Plaintiff's sister's company, Heritage, was given the first Cash and Carry time slot during the 2009 Valley Forge Winter Show when historically, Market Square has always had this time slot; and j. Any loss of business sustained by Plaintiff was due to the "downturn in the economy." 9. During the March 5, 2009 hearing, Plaintiff called Ken Kramer, a wholesale manufacturer of craft items who regularly attends the cash and carry show in Valley Forge, PA to testify on his behalf in general, and specifically with regard to the alleged confused reaction of buyers to Defendant's February 2009 letter - announcing the co-relocation with Urban Exposition. Mr. Kramer testified as follows: a. The materials sent by Defendant to vendors announcing the co- location with Urban Exposition at the Oakes was a good idea since the Oakes was a bigger location and Valley Forge was not a good location; b. Buyers want order writing shows and cash and carry shows in one building and thus Defendant's idea made good business sense; c. He was looking forward to attending the Winter Show in 2010 at the new venue; d. The materials sent by Defendant were not in any way confusing; and e. The only time there was any confusion in the market place was when Plaintiff sent his follow-up letter to the vendors. 10. Despite the fact that Ken Kramer was called to testify on behalf of Plaintiff, his testimony clearly supported Defendant's position and undermined the claims raised by Plaintiff in his Motion. Indeed, even the Court noted the apparent problem Mr. Kramer's testimony presented for Plaintiff. Plaintiff Cannot Satisfy the Criteria Established by the Pennsylvania Supreme Court In Order For This Court to Lawfully Enter a Preliminary Iniunction 11. There are six essential prerequisites that a party must establish prior to obtaining preliminary injunctive relief. Specifically, the party must show: (1) that the injunction is necessary to prevent immediate and irreparable harm that cannot be 6 adequately compensated by damages; (2) that greater injury would result from refusing an injunction than from granting it, and, concomitantly, that the issuance of an injunction will not substantially harm other interested parties in the proceedings; (3) that a preliminary injunction will properly restore the parties to their status as it existed immediately prior to the alleged wrongful conduct; (4) that the activity it seeks to restrain is actionable, that its right to relief is clear, and that the wrong is manifest, or, in other words, must show that it is likely to prevail on the merits; (5) that the injunction it seeks is reasonable suited to abate the offending activity; and (6) that a preliminary injunction will not adversely affect the public interest.. See Wareheim v. Wareheim, 580 Pa. 201, 860 A.2d 41, 46-47 (2004). 12. Case law is equally clear that the burden is on the party who requested the preliminary injunction and if a petitioner fails to establish any one of the six criteria, a reviewing court need not address the others. See e.g. Overland Enterprise, Inc. v. Gladstone Partners L.P., 950 A.2d 1015 (Pa. Super. 2008). 13. Based on the testimony that was given by Plaintiff and presented on behalf of Plaintiff during the March 5, 2009 hearing, it is abundantly clear that the Plaintiff cannot even prove the first prerequisite he must establish in order to obtain the injunctive relief he is seeking, (let alone the remaining five prerequisites). Specifically, by his own admission, Plaintiff's Motion was prompted by the perceived loss of business that Goodrich & Company "potentially" (as was testified to by Plaintiff during the March 5, 2009 hearing) may suffer as a result of Defendant moving Market Square's cash and carry show to the Oakes. This 7 - admission, coupled with a review of the ad adamnum-clause set forth in Plaintiff's Motion clearly demonstrates that the Plaintiffs motivation here is financial and that any potential "harm" that he may suffer is purely financial and could be thus be adequately be compensated by damages. 14. Based on the testimony that was presented during the March 5, 2009 hearing in support of Plaintiffs Motion, it is clear that Plaintiff had no reasonable basis to claim that Defendant "intends to leave behind the original Market Square Winter show, and then drive it out of business using the goodwill of Market Square name along with the competitor's assets," (especially when he could have easily contacted Urban Expositions as "President" of Market Square to confirm the same) and thus Plaintiff and his counsel filed his Motion for an improper purpose, to wit: harassment of the Defendant and the needless increase in the cost of litigation, all of which constitutes a violation of Pa. R.Civ. P. 1023.1 et seq. 15. Defendant assumes that Plaintiff will argue that he has not concluded his case and that the evidence in the form of testimony by his one (1) remaining witness, Nick Vincent, will somehow demonstrate that he is entitled to the preliminary injunction he seeks from the Court. This Honorable Court should not engage such folly, especially when the Plaintiff s own pleading and testimony has clearly revealed that Plaintiff cannot meet his burden under the Rules of Civil Procedure and established Pennsylvania Law for the grant of a preliminary injunction. 16. It is further important to note that Pa. R.Civ. P. 1531(b) provides, inter alia, that a preliminary injunction shall be granted only if the Plaintiff files a bond in an amount fixed and with security approved by the court OR the Plaintiff deposits 8 with the prothonotary legal tender of-the United States in an amount fixed by the court. 17. Based on the financial statements produced by Plaintiff, it is clear that Plaintiff does not have the wherewithal to post the required bond under Pa. R.Civ. P. 1531(b). 18. Defendant has been and will continue to be prejudiced by Plaintiff's folly unless this Honorable Court grants the relief requested herein, to wit: the dismissal of Plaintiff's Motion. 19. Plaintiff will not suffer any prejudice by the relief requested herein, as it is clear that Market Square is and at all times relevant has been in sound economic shape and has been operated in a fiscally prudent manner by Defendant since April 2007. Thus, any financial interest that Plaintiff may claim to have in Market Square (which Defendant does not concede) is well protected and preserved. 20. To allow for a second day of hearing on Plaintiff's Motion when it is clear that Plaintiff cannot meet his burden would be a complete waste of the Court's time and resources, as well as the parties' time and resources. 21. The interests of judicial economy demand that the relief requested herein be granted. WHEREFORE, Defendant, Kathy Goodrich, respectfully requests that this Honorable Court grant her Motion, cancel the hearing presently scheduled for March 23, 2009, dismiss Plaintiff's Motion for Preliminary Injunction with prejudice, and further award Defendant all such other relief as is proper and just. 9 IN THE ALTERNATIVE MOTION FOR SPECIAL RELIEF RE: TELEPHONIC TESTIMONY 22. The averments set forth in paragraphs 1 through 19 are incorporated herein by reference as if more fully set forth at length herein. 23. Defendant intends to call the following witnesses to testify on her behalf at the hearing presently scheduled for March 23, 2009 at 1:00 p.m.: Defendant, Kathy Goodrich; Heidi Henry; and Doug Miller. 24. Doug Miller is the President of Urban Exposition and is a resident of Atlanta, Georgia. 25. Defendant has previously requested and the Court had previously agreed that due to the fact that Mr. Miller's residence is a substantial distance from the Court that the Court would permit him to testify telephonically. 26. In a letter to the Court dated March 9, 2009, Plaintiff's counsel requested that Mr. Miller be compelled to travel approximately 1,374.1 miles from his home (approximate driving time of 22.6 hours) to the Court in order to testify in person on March 23, 2009. 27. Plaintiff's counsel's March 9, 2009 letter is yet one more example of Plaintiff's willingness to waste precious time and resources, disrupt business and cause annoyance. 28. Plaintiff's counsel's request that Mr. Miller (who will provide the same information that Plaintiff could have obtained himself prior to filing his Motion by virtue of a simple telephone call and indeed was required to do pursuant to Pa. R.Civ. P. 1023.1 et seq.) appear in Court to testify is grossly unreasonable, 10 especially when Plaintiff has already failed to sustain his burden of proof. Moreover, the inconvenience to Mr. Miller would not be limited to the brief period of time that he would be on the witness stand. To the contrary, Mr. Miller will have to rearrange his business schedule for more than just the one afternoon of hearing in order to travel to Carlisle, PA. Finally, Plaintiff's request is meant to further prejudice Defendant by virtue of the fact that she will have to cover the travel costs associated with Mr. Miller's round trip from Atlanta, Georgia to attend the hearing. 29. This Court has historically allowed witnesses to appear by telephone when there is a substantial distance involved. 30. The Plaintiff will not be prejudiced by the relief requested herein as the Plaintiff will still be afforded the opportunity to cross examine Mr. Miller. 31. The undersigned counsel has contacted Plaintiff's counsel regarding the contents of this Motion and Plaintiff's counsel does not concur in the same. 32. This matter has been assigned to the Honorable M.L. Ebert, Jr. WHEREFORE, Defendant, Kathy Goodrich, respectfully requests that this Honorable Court grant her Motion for Special Relief, issue an Order directing that Mr. Doug Miller may testify telephonically during the hearing on March 23, 2009 (assuming such hearing has not already been cancelled by virtue of Defendant's Motion to Dismiss 11 being granted), and further award Defendant all such other relief as is proper and just. Respectfully submitted, Date: March 11, 2009 Paige Macdonald-Matthes, Esquire Attorney I.D. #66266 SERRATELLI, SCHIFFMAN, BROWN & CALHOON, P.C. 2080 Linglestown Road Harrisburg, PA 17110 Telephone: (717) 540-9170 Attorneys for Defendant, Kathy J. Goodrich 12 VER iCATIOl\ I verify that the statements made in the foregoing Motion to Strike Plaintiffs Motion for Preliminary - Injunction/Motion for Special Relief are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. Section 4904, 'relating to unworn falsification to authorities. Date' 4-h 11) q CERTIFICATE OF SERVICE I, Paige Macdonald-Matthes, Esquire, hereby certify that on this 11th day of March, 2009, I served a true and correct copy of the foregoing Defendant's Motion to Dismiss Plaintiff's Motion for Preliminary Injunction/Motion for Special Relief, via facsimile and United States First Class Mail, postage paid, upon the following: Charles W. Rubendall, II, Esquire Gary E. French, Esquire Donald M. Lewis, III, Esquire KEEFER WOOD ALLEN & RAHAL, LLP 210 Walnut Street P.O. Box 11963 Harrisburg, PA 17108-1963 (717) 255-8003 (facsimile) Attorneys for Plaintiff With Courtesy Copy to.. The Honorable M.L. Ebert, Jr. Cumberland County Court of Common Pleas Cumberland County Courthouse One Courthouse Square Carlisle, PA 17013-3387 (717) 240-6460 (facsimile) PaiggenMacdonald-Matthes 14 ?y ?.,._ --?+ -?_ V J _.._ -? ? . . ._. 't .? Wiz. .. . ?. i , . t`^.. _? ?! C.-i ROBERT S. GOODRICH, Plaintiff V. KATHY J. GOODRICH, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA : NO. 08-3139 CIVIL IN RE: DEFENDANT'S MOTION TO DISMISS PLAINTIFF'S MOTION FOR =LIMINARY INJUNCTION OR IN THE ALTERNATIVE, MOTION FOR SPEC EF RE: USE OF TELE ORDER OF COURT AND NOW, this 16th day of March, 2009, upon consideration of the Defendant's Motion to Dismiss Plaintiff's Motion for Preliminary Injunction or in the Alternative, Motion for Special Relief Re: Use of Telephonic Testimony, IT IS HEREBY ORDERED AND DIRECTED that the Defendant's Motion to Dismiss is DENIED. IT IS FURTHER ORDERED AND DIRECTED that the Defendant's Motion for Special Relief Re: "Use of Telephonic Testimony" is GRANTED to the extent that Doug Miller, President of Urban Expositions, a resident of Atlanta, Georgia, will be permitted to testify by telephone at the hearing scheduled for March 23, 2009. By the Court, Charles W. Rubendall II Esquire Attorney for Plaintiff ,- Paige Macdonald-Matthes, Esquire Attorney for Defendant 3/«109 -', ?-4 bas `Y` M. L. Ebert, Jr., J. e :I Wd 91 8vw 60oz .,Uc .3H,i 40 ROBERT S. GOODRICH, Plaintiff V KATHY J. GOODRICH, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA 08-3139 CIVIL TERM IN RE: PRETRIAL CONFERENCE ORDER OF COURT AND NOW, this 27th day April, 2009, after conference with counsel, 1) IT IS HEREBY ORDERED AND DIRECTED that hearing on this matter will be set for August 4, 5 of 2009. 2) Robert Goodrich will be considered the moving party and the parties shall provide pretrial memorandums to the Court on or before 9 July, 2009, in the following format: I. A concise statement of each factual issue to be decided at the hearing, along with a succinct description of the issue, and a brief recitation of the type of evidence that will be presented to establish the disputed point. II. A list of witnesses the party intends to call at the hearing along with a concise statement of their anticipated testimony. III. A list of all exhibits each party anticipates presenting at the hearing. IV. A statement of any evidentiary issues each party anticipates being raised at the hearing along with copies of any cases which may be relevant to resolution of the stated issue. • Goodrich V Goodrich 08-3139 Civil Term In Re: Pretrial conference Page 2 3) IT IS FURTHER ORDERED AND DIRECTED that all discovery in this matter shall be completed on or before June 12, 2009. The parties will file formal requests for discovery, copies will be provided to the Court. 4) The appointment of Joel Flinchbaugh, custodian, is hereby vacated. ? Charles W. Rubendall, II, Esquire For the Plaintiff _,Xary E. French, Esquire For the Plaintiff _,,4aige Macdonald-Matthes, Esquire For the Defendant -,-?John D. Sheridan, Esquire For the Plaintiff .mtf 'IT IiE& By the Court, 0 1 Fed L?,'V 6 001 ROBERT S. GOODRICH, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. KATHY J. GOODRICH, Defendant NO. 08-3139 CIVIL IN RE: PRELIMINARY INJUNCTION ORDER OF COURT AND NOW, this 5th day of May, 2009, upon consideration of the Plaintiff's Motion for Preliminary Injunction, the Defendant's Reply, after hearing and the Court having scheduled an adjudicatory hearing for this case on August 4 - 5, 2009, IT IS HEREBY ORDERED AND DIRECTED that the Plaintiff's Motion for Preliminary Injunction is DENIED. By the Court, M. L. Ebert, Jr., J. /harles W. Rubendall, II, Esquire Attorney for Plaintiff ?aige Macdonald-Matthes, Esquire Attorney for Defendant bas J A*no 60:8 WV 8- AVW 60OZ Addiu,.MDH 10,,:!d 3Hi. ?O 1011 glW KEEFER WOOD ALLEN & RAHAL, LLP Charles W. Rubendall II, Esquire Attorney I.D. No. 23172 Gary E. French, Esquire Attorney I.D. No. 25810 Donald M. Lewis III, Esquire Attorney I.D. No. 58510 210 Walnut Street, P. 0. Box 11963 Harrisburg, PA 17108-1963 717-255-8010 and 255-8038 crubendall@keeferwood.com dlewis@keeferwood.com ROBERT S. GOODRICH, Plaintiff v. KATHY J. GOODRICH, Defendant Attorneys for plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION No. 08-3139 Civil Term PLAINTIFF'S RESPONSE TO DEFENDANT'S FIRST REQUEST FOR PRODUCTION OF DOCUMENTS NOW COMES plaintiff, Robert S. Goodrich, by his counsel, to respond to defendant's request for production of documents, averring as follows: 1-15. Objection. The requests are not relevant to the subject matter of the pending action, an action for partition of corporate assets, nor are the requests reasonably calculated to lead to the discovery of admissible evidence. See Pa. R. Civ. P. 4003.1. Moreover, the requests are overbroad and thus will cause w unreasonable annoyance, oppression, burden or expense. See Pa. R. Civ. P. 4011. Narrower, more focused inquiries are invited. Respectfully submitted, KEEFER WOOD ALLEN & RAHAL, LLP Dated: May 28, 2009 By Charles W. Rubendall II Gary E. French Donald M. Lewis III 210 Walnut Street P. 0. Box 11963 Harrisburg, PA 17108-1963 717-255-8010, 255-8015, and 255-8038 Attorneys for plaintiff - 2 - VERIFICATION The undersigned, Charles W. Rubendall II, hereby verifies and states that: 1. He is one of the attorneys for plaintiff herein; 2. He is authorized to make this verification on its behalf; 3. The facts set forth in the foregoing response to request for production are known to him and not exclusively to his client; 4. The facts set forth in the foregoing response to request for production are true and correct to the best of his knowledge, information, and belief; and 5. He is aware that false statements herein are made subject to the penalties of 18 Pa.C.S. § 4904, relating to unsworn falsification to authorities. 6&V'N?v Charles W. Rubendall II Dated: May 28, 2009 CERTIFICATE OF SERVICE I, Charles W. Rubendall II, Esquire, one of the attorneys for plaintiff, hereby certify that I have served the foregoing paper upon counsel of record this date by hand-delivery, addressed as follows: Paige Macdonald-Matthes, Esquire John D. Sheridan, Esquire Serratelli, Schiffman, Brown & Calhoon 2080 Linglestown Road Harrisburg, PA 17110 KEEFER WOOD ALLEN & RAHAL, LLP By 64*100mt - Charles W. Rubendall II Dated: May 28, 2009 r *'t 12 J I.a i r' t I SERRATELLI, SCHIFFMAN BROWN & CALHOON, P. C. Paige Macdonald-Matthes, Esquire Supreme Court ID No. 66266 2080 Linglestown Road Harrisburg, PA 17110 (717) 540-9170 (717) 540-5481 facsimile Attorneys for Defendant, Kathy J. Goodrich ROBERT S. GOODRICH, : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff . : DOCKET NO.: 2008-3139 CIVIL TERM V. KATHY J. GOODRICH, Defendant DEFENDANT'S MOTION TO COMPEL and MOTION FOR SANCTIONS RE: PLAINTIFF'S RESPONSE TO DEFENDANT'S FIRST REQUEST FOR PRODUCTION OF DOCUMENTS AND NOW, comes Defendant, Kathy J. Goodrich ("Defendant"), by and through her counsel, Serratelli, Schiffman, Brown & Calhoon, P.C., and files her Motion to Compel and Motion for Sanctions Re: Plaintiff's Response to Defendant's First Request for Production of Documents, and in support thereof aver as follows: Defendant served Plaintiff with her Request for Production of Documents on or about April 28, 2009. A true and correct copy of the Defendant's Request for Production of Documents is attached hereto as Exhibit "A." In accordance with the Court's April 27, 2009, Order, a copy of the Defendant's Request for Production of Documents was provided to the Honorable M. L. Ebert on even date. 2. On or about May 6, 2009, counsel for the Plaintiff served Defendant with Plaintiff's Request for Production of Documents. A true and correct copy of Plaintiff's Request for Production of Documents is attached hereto and is marked as Exhibit "B." 3. A mere cursory review of the Plaintiff's Request for Production of Documents reveals that they are substantially similar to and indeed are virtually identical to Defendant's Request for Production of Documents that had been served on Plaintiff's counsel on April 28, 2009. In fact, in an email exchange dated May 7, 2009, counsel for the respective parties joked with one another about the "striking similarity" between Defendant's Request for Production of Documents that had been served on April 28, 2009 and Plaintiff's Request for Production of Documents that had been served on May 6, 2009. A true and correct copy of the email chain is attached hereto and is marked as Exhibit "C." 4. On Wednesday, May 27, 2009, Plaintiff's business counsel, Gary French, Esquire made an inquiry to Defendant's business counsel, John Sheridan, Esquire whether or not the Plaintiff would have to respond to the Defendant's discovery requests in light of the fact that the Parties were once again negotiating a settlement of the above captioned matter. Due to the Plaintiff's past history of dragging out settlement negotiations and then backing out of the agreement just at the moment the Parties are scheduled to go to court, Defendant's business counsel advised Plaintiff's counsel in an email dated May 27, 2009, that Plaintiff still needed to respond to Defendant's Request for Production of Documents in the event that a settlement agreement could not be reached before the next scheduled hearing date. 2 5. Defendant believes and therefore avers that the only reason that Plaintiff has filed "objections" to Defendant's Request for Production of Documents is to buy Defendant additional time and to further delay the proceedings in this matter. A true and correct copy of Plaintiff's Response to Defendant's First Request for Production of Documents is attached hereto as Exhibit "D." 6. Defendant further believes and therefore avers that since Plaintiff's counsel virtually copied Defendant's counsel's Request for Production of Documents that the "objections" raised by Plaintiff are not in any way legitimate objections and indeed were filed in violation of Pa. R. Civ. P. 1023.1 et seq; Pa. R.Civ. P. 4003.1 and Pa. R. Civ. P. 4011. 7. Defendant has been prejudiced by virtue of the Plaintiff's filing of the spurious "objections" to her Request for Production of Documents in that Defendant has been forced to file the within Motion to Compel and incurred additional counsel fees and costs. 8. Defendant has been and will continue to be prejudiced unless and until this Honorable Court sanctions Plaintiff for his vexatious and dilatory conduct and further directs Plaintiff to comply with Defendant's discovery requests forthwith. 9. The above captioned action has been previously assigned to the Honorable M. L. Ebert. 10. The undersigned counsel has contacted Plaintiff/Respondent's counsel, Charles W. Rubendall, Esquire, regarding the substance of the within Motion and he does not concur in the same. 3 WHEREFORE, Defendant, Kathy Goodrich respectfully requests that this Court: (a) Enter an Order directing Plaintiff to respond to Defendant's Request for Production of Documents within 72 hours of the date of this Order; (b) Enter an Order directing Plaintiff to pay Defendant's counsel fees and costs associated with the preparation, filing and litigation of the within Motion in an amount not less than $1,500.00 within ten (10) days of the date of this Order; and (c) Award Defendant all such other relief as is proper and just. Respectfully submitted, Date: June 5, 2009 Paige Macdonald-Matthes, Esquire Attorney I.D. #66266 SERRATELLI, SCHIFFMAN, BROWN & CALHOON, P.C. 2080 Linglestown Road Harrisburg, PA 17110 Telephone: (717) 540-9170 Attorneys for Defendant, Kathy J. Goodrich 4 T TTY CATION* I verify that the statements -made in the foregoing Motion to Compel and for Sanctions are true and correct. I understand that false statements herein are made subject.to the penalties. of .18 Pa. C.S. Section 4904, relating to unworn falsification to authorities. Date; 5 CERTIFICATE OF SERVICE I, Paige Macdonald-Matthes, Esquire, hereby certify that on this 5th day of June, 2009,1 served a true and correct copy of the foregoing Defendant's Motion to Compel and For Sanctions via United States First Class Mail, postage paid, upon the following: Charles W. Rubendall, II, Esquire Gary E. French, Esquire Donald M. Lewis, III, Esquire KEEFER WOOD ALLEN & RAHAL, LLP 210 Walnut Street P.O. Box 11963 Harrisburg, PA 17108-1963 Attorneys for Plaintiff Paige Macdonald-Matthes SERRATELLI, SCHIFFMAN, BROWN & CALHOON, P.C. Paige Macdonald-Matthes, Esquire Supreme Court ID No. 66266 2080 Linglestown Road Harrisburg, PA 17110 (717) 540-9170 phone (717) 540-5481 facsimile Attorneys for Defendant, Kathy J. Goodrich ROBERT S. GOODRICH, Plaintiff V. KATHY J. GOODRICH, Defendant : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : DOCKET NO.: 2008-3139 CIVIL TERM : CIVIL ACTION DEFENDANT'S REQUEST FOR PRODUCTION OF DOCUMENTS DIRECTED TO PLAINTIFF (FIRST SET) TO: ROBERT S. GOODRICH C/o Charles W. Rubendall, II, Esquire KEEFER WOOD ALLEN & RAHAL, LLP 210 Walnut Street Harrisburg, PA 17101 AND NOW this 28 h day of April, 2009, Defendant., Kathy Goodrich, by her undersigned counsel, hereby serves the following Request for Production of Documents (First Set) on Plaintiff, Robert S. Goodrich., by and through his counsel pursuant to Rule 4009 et seq. of the Pennsylvania Rules of Civil Procedure. INSTRUCTIONS 1. You are required to file answers under oath to the following Document Requests, pursuant to Rule 4009.1 of the Pennsylvania Rules of Civil Procedure and within 30 days after service upon you. 2. As used herein, the words "you" and "your" refer to Plaintiff, Robert S. Goodrich, as well as his agents, representatives, attorneys and all other persons acting or purporting to act on behalf of either Plaintiff, Robert S. Goodrich individually or on behalf of Goodrich & Company. 3. As used herein, "identify" or "identity," when used in reference to an individual person or entity, means to state his or its name and address. 4. If a precise value, amount or date cannot be supplied in responses to a Document Request, an approximate value, amount or date should be provided. 5. In responding to these Document Requests, you are requested to identify all documents or things in your possession, custody or control, or known or available to you, regardless of whether such documents or things are possessed directly by you or by your attorneys or their agents, employees, representatives or investigators. 6. If any Document Request cannot be responded to in full, respond to the extent possible, indicating what portion of any Document Request cannot be responded to and the reason therefore. 7. To the extent that you consider any of the following Document Requests objectionable, respond to so much of each Document Request and part thereof, as is not objectionable in your view and separately state that part of each Document Request as to which you raise objections and each ground for such objection. 2 8. If you object to the identification of any document on the claim of attorney/client privilege, work product privilege, or any other privilege, identify the privilege claimed, as well as each document for which such privilege is claimed, together with the following information with respect to each such document: a. Date; b. Sender; c. Addressee; d. Subject; e. The basis on which the privilege is claimed; and f. The full identification of all persons to whom copies of any part of the document were furnished, including each person's full address, phone number, present employer and job title. DEFINITIONS 1. The words "and" and "or" shall mean "and/or." 2. The term "communication" means any writing, or oral conversation, including, but not limited to, emails, telephone conversations, meetings, letters, telegraphic and telex communications, and includes all information relating to all oral communications and "documents" (as herein above defined), whether or not any such document, or other information contained therein was transmitted by its author to any other person. 3. "Complaint" refers to the Complaint filed by Plaintiff, Robert S. Goodrich on or about May 19, 2008, in the Court of Common Pleas, Cumberland County, Pennsylvania at Docket No. 2008-3139 CIVIL TERM. 4. "Copy" when used in reference to a document means any color, or black or white facsimile reproduction of a document, regardless of whether the facsimile reproduction is made by means of carbon papers, pressure sensitive paper, xerography or other means or process. 3 5. "Defendant' 'refers to Defendant, Kathy J. Goodrich., as well as her agents, representatives, attorneys and all other persons acting or purporting to act on behalf of Defendant, Kathy J. Goodrich. 6. The word "document" or "documents" refers to any printed, written, taped, recorded, graphic, electronic, computerized printout, or other tangible matter from whatever source, including computer disks, floppy disks, hard drives, CD-ROMs, tapes, cartridges, zip drives, or other computer data storage devices, however produced or reproduced, whether in draft or otherwise, whether sent or received, or neither, including, but not limited to, the original, a copy (if the original is not available), and all non-identical copies (whether different from the original because of notes made on or attached to such copy or otherwise) of any and all writings, account statements, ledgers, bills, invoices, receipts, correspondence, letters, telegrams, cables, telexes, routing slips, contracts, proposals, agreements, minutes, acknowledgments, notes, marginalia, notations, memoranda, infra and interoffice communications, intra and interdepartmental communications, analyses, projections, work papers, books, papers, records, reports, diaries, journals, notes or recordings of telephone or other conversations, statements, questionnaires, schedules, computer programs or data, books of account, calendars, time cards, time sheets, graphs, charts, transcripts, tapes or recordings, photographs, pictures or film, ledgers, registers, work sheets, summaries, digests, financial statements, and all other information whether data, records or compilations, including all underlying, supporting or preparatory material now in your possession, custody or control, or available to you, your counsel, accountants, agents, representatives or associates. "Document" or "documents" specifically includes documents kept by individuals in their desks at home or elsewhere. 4 7. "Goodrich & Company" means the wholly owned subsidiary of Market Square Tradition Wholesale, Inc. that was formed by Plaintiff, Robert S. Goodrich on or about May 9, 2007, being the same company that has been operated since that date by Plaintiff, Robert Goodrich in the role of "President." 8. "Identify" or "identity" when used in reference to: a. An individual, shall mean to state his or her full legal name and present or last known address (including zip code), phone number, and present or last known position or business affiliation (designating which), and the job description. b. A document shall mean to state the date, author, sender, recipient, type of document or some other means of identifying it, a description of the subject matter of the document, and its present location and custodian. In the case of a document within the possession, custody or control of the Defendant, please state whether the Defendant will make it available to Plaintiffs attorney for inspection and/or copying; and in the case of a document that was, but is no longer in the possession, custody or control of Defendant, please state its present location. C. A communication shall include any oral or written communications and shall mean to state with particularity the date, maker, recipient, and substance of the communication, including the identification of all persons present during the communication, or with knowledge of the communication. d. Use of the plural form of any word shall be deemed to include the singular form, and use of the singular form shall be deemed to include the plural form. 9. "Market Square" shall mean Market Square Traditional Wholesale, Inc. 10. "Person" means any natural person, any business entity (whether a corporation, partnership, or other business association), any government or political subdivision thereof, or governmental body, commission, board, agency, bureau or department. 11. "Plaintiff"' refers to Plaintiff, Robert S. Goodrich., as well as any agents, representatives, attorneys and all other persons acting or purporting to act on behalf of Plaintiff, Robert S. Goodrich. 12. The terms refer to," «relate to," «relating to and «with regard to shall mean concern or concerning, pertain or pertaining, discuss or discussing, mention or mentioning, reflect or reflecting, assess or assessing, record or recording, comprise or comprising, consist of or consisting of, evaluate or evaluating, analyze or analyzing the specified subject. 13. Unless a specific time period or date is referred to in a particular Document Request, the relevant time period for this document request is January 1, 2007 through May 27, 2009. 6 DOCUMENT REQUESTS Please produce copies of all financial statements for Goodrich & Company for calendar years 2007-2008, and year to date for 2009. 2. Please produce copies of the 2007 and 2008 tax returns (including all schedules) prepared and filed on behalf of Goodrich & Company. 3. Please produce copies of all invoices issued by Keefer Wood Allen & Rahal, LLP to Robert S. Goodrich as President of Goodrich & Company for legal services rendered either to Goodrich & Company or to Robert S. Goodrich acting as President of Goodrich & Company between January 2007 and the present. 4. Please produce copies of all invoices issued by Keefer Wood Allen & Rahal, LLP to Robert S. Goodrich as the self appointed "President" of Market Square for legal services pertaining either to Market Square or to Robert S. Goodrich acting as "President" of Market Square between January 2007 and the present date. 5. Please produce copies of all payments received by Keefer Wood Allen & Rahal, LLP from Robert S. Goodrich, individually between January 2007 and the present date. 6. Please produce copies of all payments received by Keefer Wood Allen & Rahal, LLP from Goodrich & Company between January 2007 and the present date. 7. Please produce a complete breakdown of all salaries paid by Goodrich & Company for calendar years 2007-2009. 8. Please produce an itemized list of all automobile expenses paid by Goodrich & Company for calendar years 2007 through 2009. 7 9. Please produce copies of all contracts of insurance for which Goodrich & Company paid the associated premiums. 10. Please produce an itemized list of rents paid by Goodrich & Company and copies of corresponding leases. 11. Please produce copies of all loan applications made by Plaintiff, Robert S. Goodrich, in the name of Market Square and/or Goodrich & Company between 2006 and 2009. 12. Please produce copies of all contracts that have purportedly been signed on behalf of Market Square by Robert S. Goodrich between 2006 and 2009. 13. Please produce copies of all statements received by Goodrich & Company from American Express between 2007 and 2009. 14. Please produce a list of all payables for Goodrich & Company as of March 31, 2009. 15. Please produce a list of all accounts receivables as of March 31, 2009. Respectfully submitted, Date: April 28, 2009 Paige Macdonald-Matthes, Esquire Attorney I.D. #66266 SERRATELLI, SCHIFFMAN, BROWN & CALHOON, P.C. 2080 Linglestown Road Harrisburg, PA 17110 Telephone: (717) 540-9170 Attorneys for Defendant, Kathy J. Goodrich 8 CERTIFICATE OF SERVICE I, Paige Macdonald-Matthes, Esquire, hereby certify that on this 28'' day of April, 2008, I served a true and correct copy of the foregoing Defendant's Request for Production of Documents (First Set), via hand delivery, upon the following: Charles W. Rubendall, II, Esquire Gary E. French, Esquire KEEFER WOOD ALLEN & RAHAL, LLP 210 Walnut Street P.O. Box 11963 Harrisburg, PA 17108-1963 Attorneys for Plaintiff With Courtesy Copy to: The Honorable M.L. Ebert, Jr. Cumberland County Court of Common Pleas High and Hanover Street Carlisle, PA 17013 ?'tto:r.? •..1U,)..CV?? •'?r?o?SL? - •l.?a??-cns?.n/ Paige Macdonald-Matthes 9 KEEFER WOOD ALLEN & RAHAL, LLP Charles W. Rubendall II, Esquire Attorney I.D. No. 23172 Gary E. French, Esquire Attorney I.D. No. 25810 Donald M. Lewis III, Esquire Attorney I.D. No. 58510 210 Walnut Street, P. 0. Box 11963 Harrisburg, PA 17108-1963 717-255-8010 and 255-8038 crubendall@keeferwood.com dlewis@keeferwood.com Attorneys for plaintiff ROBERT S. GOODRICH, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff V. CIVIL ACTION KATHY J. GOODRICH, Defendant No. 08-3139 Civil Term REQUEST FOR PRODUCTION OF DOCUMENTS TO: John D. Sheridan, Esquire Paige Macdonald-Matthes, Esquire Serratelli Schiffman Brown & Calhoun, PC 2080 Linglestown Road Harrisburg, PA 17110 THIS IS A REQUEST FOR PRODUCTION OF DOCUMENTS AND TANGIBLE ITEMS. You must respond in a timely and appropriate manner, pursuant to the Pennsylvania Rules of Civil Procedure, as follows: RULE 4009.12 ANSWER TO REQUEST UPON A PARTY FOR PRODUCTION OF DOCUMENTS AND THINGS (a) The party upon whom the request is served shall within thirty days after the service of the request (1) serve an answer including objections to each numbered paragraph in the request, and (2) produce or make available to the party submitting the request those documents and things described in the request to which there is no objection. (i) Where the documents may be identified only after review of a larger group of documents, and the burden of identifying the documents would be substantially the same for the party serving the request as for the party served, the party served may afford the party serving the request reasonable opportunity to identify the documents, to examine or inspect them and to obtain copies. (b) The answer shall be in the form of a paragraph-by-paragraph response which shall (1) identify all documents or things produced or made available; (2) identify all documents or things not produced or made available because of the objection that they are not within the scope of permissible discovery under Rule 4003.2 through Rule 4003.6 inclusive and Rule 4011(c). Documents or things not produced shall be identified with reasonable particularity together with the basis for non-production; (3) specify a larger group of documents or things from which the documents or things to be produced or made available may be identified as provided by subdivision (a)(2)(i); (4) object to the request on the grounds set forth in Rule 4022(a), (b), and (e) or on the ground that the request does not meet the requirements of Rule 4009.11; (5) state that after reasonable investigation, it has been determined that there are no documents responsive to the request. (c) The answer shall be signed and verified by the party making it and signed also by the attorney making an objection if one is set forth. - 2 - (d) If a request is reasonably susceptible to one construction under which documents sought to be produced are within the scope of the request and another construction under which the documents are outside the scope of the request, the answering party shall either produce the documents or identify with reasonable particularity the documents not produced together with the basis for non-production. (Emphasis supplied.) This request for production shall be deemed continuing in nature, in accordance with the provisions of Pa. R. Civ. P. 4007.4, as amended. - 3 - The specific requests follow: 1. Financial Statements for Market Square Tradition Wholesale, Inc. ("Market Square") for calendar years 2007-2008, and year to date for 2009. RESPONSE: 2. Tax returns (including all schedules) filed by or on behalf of Market Square for 2007 and 2008. RESPONSE: 3. Copies of all invoices issued by Serratelli Schiffman Brown & Calhoun, PC, for legal services rendered to Kathy Goodrich, individually, and Market Square between 2007 and 2009. RESPONSE: 4. Copies of all payments received by Serratelli Schiffman Brown & Calhoun, PC, from Kathy Goodrich or Market Square. RESPONSE: - 4 - 5. A complete breakdown of all salaries paid by Market Square for years 2007-2009. RESPONSE: 6. An itemized list of all automobile expenses paid by Market Square for years 2007-2009. RESPONSE: 7. Copies of all contracts of insurance for which Market Square paid the associated premiums. RESPONSE: 8. An itemized list of rents paid by Market Square and copies of the corresponding leases. RESPONSE: - 5 - 9. Copies of all loan applications made by Kathy Goodrich in the name of Market Square between 2006 and 2009. RESPONSE: 10. Copies of all contracts that have purportedly been signed on behalf of Market Square by Kathy Goodrich. RESPONSE: 11. Copies of all statements received by Market Square from American Express between 2007 and 2009. RESPONSE: 12. List of all payables for Market Square as of April 30, 2009. RESPONSE: - 6 - 13. List of all accounts receivable by Market Square as of April 30, 2009. RESPONSE: KEEFER WOOD ALLEN & RAHAL, LLP Dated: May 6, 2009 BY yj? Charles W. Rubendall II Gary E. French Donald M. Lewis III 210 Walnut Street P. 0. Box 11963 Harrisburg, PA 17108-1963 717-255-8010, 255-8015, and 255-8038 Attorneys for plaintiff - 7 - CERTIFICATE OF SERVICE I, Charles W. Rubendall II, Esquire, one of the attorneys for Plaintiff, hereby certify that I have served the foregoing paper upon the Defendant this date by depositing a true and correct copy of the same in the United States mail, first-class postage prepaid, addressed as follows: John D. Sheridan, Esquire Paige Macdonald-Matthes Serratelli Schiffman Brown & Calhoun, PC 2080 Linglestown Road Harrisburg, PA 17110 KEEFER WOOD ALLEN & RAHAL, LLP By Charles W. Rubendall II Dated: May 6, 2009 Page I of I Paige Macdonald -Matthes From: Charles W. Rubendail [crubendall@keefeiwood.com] Sent: Friday, May 08, 2009 11:14 AM To: Paige Macdonald-Matthes Subject: RE: Request for Production of Documents From: Paige Macdonald -Matthes [mailto:PMacdonaid-Matthes@ssbc-law.com] Sent: Thursday, May 07, 2009 2:30 PM To: Charles W. Rubendall Cc: John Sheridan Subject: Request for Production of Documents Chip Received "your client's" request for production of documents. As they say, imitation is the best form of flattery Cu) `erratelii,. '',ch.H`r-nan, Brown & t--aflh on -"80 Urglestown Road Hamsburgl PA 17110 5 4 a'`-: 17 0 •,t ?F ,.., O:`?t Ft?;„ .. 4 «; Zr`!.tt •t-E ?Z. 3 t- oil . l 6/ I /2009 ? M KEEFER WOOD ALLEN & RAHAL, LLP Charles W. Rubendall II, Esquire Attorney I.D. No. 23172 Gary E. French, Esquire Attorney I.D. No. 25810 Donald M. Lewis ITT, Esquire Attorney I.D. No. 58510 210 Walnut Street, P. 0. Box 11963 Harrisburg, PA 17108-1963 717-255-8010 and 255-8038 crubendall@keeferwood.com dlewis@keefer.wood.com ROBERT S. GOODRICH, Plaintiff v. KATHY J. GOODRICH, Defendant Attorneys for plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION No. 08-3139 Civil Term PLAINTIFF'S RESPONSE TO DEFENDANT'S FIRST REQUEST FOR PRODUCTION OF DOCUMENTS NOW COMES plaintiff, Robert S. Goodrich, by his counsel, to respond to defendant's request for production of documents, averring as follows: 1-15. Objection. The requests are not relevant to the subject matter of the pending action, an action for partition of corporate assets, nor are the requests reasonably calculated to lead to the discovery of admissible evidence. See Pa. R. Civ. P. 4003.1. Moreover, the requests are overbroad and thus will cause unreasonable annoyance, oppression, burden or expense. See Pa. R. Civ. P. 4011. Narrower, more focused inquiries are invited. Respectfully submitted, KEEFER WOOD ALLEN & RAHAL, LLP Dated: May 28, 2009 By Charles W. Rubendall II Gary E. French Donald M. Lewis III 210 Walnut Street P. 0. Box 11963 Harrisburg, PA 17108-1963 717-255-8010, 255-8015, and 255-8038 Attorneys for plaintiff - 2 - ? r VERIFICATION The undersigned, Charles W. Rubendall II, hereby verifies and states that: 1. He is one of the attorneys for plaintiff herein; 2. He is authorized to make this verification on its behalf; 3. The facts set forth in the foregoing response to request for production are known to him and not exclusively to his client,; 4. The facts set forth in the foregoing response to request for production are true and correct to the best of his knowledge, information, and belief; and 5. He is aware that false statements herein are made subject to the penalties of 18 Pa.C.S. § 4904, relating to unsworn falsification to authorities. 64) -V Charles W. Rubendall II Dated: May 28, 2009 4 r CERTIFICATE OF SERVICE I, Charles W. Rubendall II, Esquire, one of the attorneys for plaintiff, hereby certify that I have served the foregoing paper upon counsel of record this date by hand-delivery, addressed as follows: Paige Macdonald-Matthes, Esquire John D. Sheridan, Esquire Serratelli, Schiffman, Brown & Calhoon 2080 Linglestown Road Harrisburg, PA 17110 KEEFER WOOD ALLEN & RAHAL, LLP BY 6 Charles W. Rubendall II Dated: May 28, 2009 RLED-C"FRQ4 OF "ME PP(OD-rNOTARY 2009 JUN -8 AM I8: 56 ROBERT S. GOODRICH, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. KATHY J. GOODRICH, Defendant NO. 08-3139 CIVIL ORDER OF COURT AND NOW, this 1St day of July, 2009, upon consideration of the Defendant's Motion to Compel and Motion for Sanctions, the Court being quite familiar with the nature of this dispute, IT IS HEREBY ORDERED AND DIRECTED that Plaintiff shall respond to paragraphs 1, 2, 7, 8, 9, 10, 11, 12, 13, 14, and 15 of Defendant's Request for Production of Documents on or before July 15, 2009. IT IS FURTHER ORDERED AND DIRECTED that Defendant's Motion for Sanctions in the Nature of Attorney's Fees is DENIED. By the Court, M. L. Ebert, Jr., J. Charles W. Rubendall, II, Esquire Attorney for Plaintiff ?Paige Macdonald-Matthes, Esquire Attorney for Defendant bas 0.6P'£s rntuLL 2 j/ /og FLFHD- IL 2009 JI-1' - I Piii L. • 13 L/Uk KEEFER WOOD ALLEN & RAHAL, LLP Charles W. Rubendall II, Esquire Attorney I.D. No. 23172 Gary E. French, Esquire Attorney I.D. No. 25810 Donald M. Lewis III, Esquire Attorney I.D. No. 58510 210 Walnut Street, P. 0. Box 11963 Harrisburg, PA 17108-1963 717-255-8010 and 255-8038 crubendall@keeferwood.com dlewis@keeferwood.com ROBERT S. GOODRICH, Plaintiff v. KATHY J. GOODRICH, Defendant Attorneys for plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION No. 08-3139 Civil Term PLAINTIFF'S MOTION FOR CONTINUANCE NOW COMES plaintiff, Robert S. Goodrich, through his counsel, Keefer Wood Allen & Rahal, LLP, to move this Honorable Court to continue the hearing now scheduled to commence at 9:00 a.m. on Tuesday, August 4, 2009 (and to continue into the following day), averring as follows: 1. By order of April 27, 2009, the Court issued a pre- hearing scheduling order, including dates for the conclusion of discovery and the submission of pretrial memoranda. That order also set August 4 and 5, 2009, for a hearing in this matter. 2. The parties exchanged discovery devices within the time permitted, and both parties have produced documents to the opposing party. 3. The pretrial memoranda submitted by the parties on or about July 9, 2009, however, revealed that a fundamental disagreement exists as to the scope of the hearing set for August 4 and S. 4. Counsel for plaintiff (Mr. Rubendall) wrote to the Court under date of July 10 to note the apparent disagreement as to the scope of the scheduled hearing and to request a pretrial conference or a conference call to ensure that both parties and the Court will operate on the same understanding as to issues to be addressed at the upcoming hearing. 5. A true and correct copy of the letter of July 10 from Mr. Rubendall to the Court is attached here as exhibit A. 6. In response to the letter, the Court (through an email sent on July 29) directed counsel to provide the parties' proposed division of shows through emails returned to the Court not later than the close of business today, July 29. These email messages have now been sent to the Court. 7. On the previous day, July 28, counsel for plaintiff served counsel for defendant with a notice to attend directing defendant, pursuant to Pa. R. Civ. P. 234.3, to bring two (2) categories of documents believed to exist within defendant's files to the hearing on August 4. A true and correct copy of plaintiff's notice to attend is attached as exhibit B. 8. The following day, July 29, counsel for defendant served a notice to attend upon counsel for plaintiff. This - 2 - A 0 notice directs plaintiff, pursuant to the same rule, to bring to the hearing four (4) business days thereafter a total of eight (8) categories of documents. Some of the documents listed will require compilation by plaintiff and his staff, as not all the items sought now exist in the form described in defendant's notice. 9. A true and correct copy of defendant's notice to attend is attached as exhibit C. 10. Plaintiff believes that the hearings scheduled for August 4 and 5 should be postponed until a later date for these reasons: a. First, as noted in his pretrial memorandum, plaintiff sincerely believes that a settlement agreement has already been reached. As explained in that document, a corporate reorganization agreement prepared by defendant's counsel and forwarded to plaintiff's counsel for acceptance earlier this year as a means of settling all disputes has been signed by plaintiff. If defendant will simply stand behind her proposed settlement agreement of earlier this year, the parties will have resolved their differences. b. As noted in the July 10 letter from Mr. Rubendall to the Court, there appears to be (upon a reading of the two pretrial memoranda) a significant disagreement as to the scope of issues to be addressed - 3 - ¦ at the hearing on August 4 and 5. Further discussions between the Court and counsel, following the submission of the proposed divisions of shows by email', as addressed in paragraph 6 above, will serve to overcome any potential misunderstanding in this regard. C. Particularly with regard to defendant, discovery has apparently not been completed as directed by the Court. Defendant's notice to attend seeks documents, both in terms of their substance and the volume of paper, that should have been addressed in the discovery proceedings that were to be concluded not later than June 12, 2009. Thus, if the documents sought are to be produced, and in some cases compiled into the format sought, additional time will be necessary for plaintiff to do so. Otherwise, the time available for his hearing preparation and counsel's time for hearing preparation will be unduly curtailed, to plaintiff's prejudice. 11. For all these reasons, plaintiff respectfully requests this Honorable Court to continue the hearings scheduled for August 4 and 5, 2009, until a later date, if a hearing should prove necessary at all. 1f A quick reading of the two lists submitted today reveals that they are not identical. - 4 - WHEREFORE, plaintiff respectfully requests this Honorable Court to grants his motion to continue. Respectfully submitted, KEEFER WOOD ALLEN & RAHAL, LLP Dated: July 30, 2009 By Charles W. Rubendall II Gary E. French Donald M. Lewis III 210 Walnut Street P. 0. Box 11963 Harrisburg, PA 17108-1963 717-255-8010, 255-8015, and 255-8038 Attorneys for plaintiff - 5 - ¦ CERTIFICATE ON NON-CONCURRENCE I, Charles W. Rubendall II, one of attorneys for plaintiff, hereby certify that I sought concurrence in the foregoing motion from counsel for defendant (Ms. Macdonald-Matthes). Said concurrence was declined. KEEFER WOOD ALLEN & RAHAL, LLP Dated: July 30, 2009 By Charles W. Rubendall 11 CHARLES W. RUBENDALL II ROBERT L. WELDON EUGENE E. PEPINSKY, JR. JOHN H. ENOS III GARY E. FRENCH DONNA S. WELDON BRADFORD DORRANCE JEFFREY S. STOKES ROBERT R. CHURCH STEPHEN L.GROSE R. SCOTT SHEARER ELYSE E. ROGERS CRAIG A. LONGYEAR JOHN A. FEICHTEL STEPHANIE KLEINFELTER DONALD M. LEWIS= ERIC R. AUGUSTINE TODD F. TRUNTZ CAROL L. VERISH KEEFER WOOD ALLEN & RAHAL, LLP ATTORNEYS AT LAW 210 WALNUT STREET P O. BOX 11963 HARRISBURG, PA 17108-1963 PHONE 17171 255-8000 EIN No. 23-0716135 www.keeferwood.com July 10, 2009 ESTABLISHED IN 1878 OF COUNSEL: HEATH L. ALLEN N. DAVID RAHAL SAMUEL C. HARRY WEST SHORE OFFICE: 635 NORTH 12T" ST., 4- FLOOR LEMOYNE, PA 17043 17171 612-5800 WRITER'S CONTACT INFORMATION, Vcice: 80'_(' Fax: 255-8003 crubendall@keeferwood.corn Hon. M. L. Ebert, Jr. Court of Common Pleas Cumberland County Courthouse One Courthouse Square Carlisle, PA 17013-3387 Re: Goodrich v. Goodrich No. 08-3139 Civil Term Dear Judge Ebert: In reviewing the pretrial memoranda submitted by counsel in the above matter, as well as recent correspondence between counsel, it appears that there may be some misunderstanding as to the nature of the hearing scheduled to begin August 4, 2009. It is our understanding, based upon the conference with Your Honor held April 27, 2009, that you had essentially made up your mind relative to the division of shows between the parties and that, absent a settlement, you wanted to receive evidence on what were described then as "remaining financial issues." On the other hand, it appears that defendant's counsel anticipates a broader hearing on August 4, during which a division of shows between the parties will again be addressed. Of course, defendant asserted in hearings held on March 5 and 23, 2009, that the division of shows was already a long-accomplished fact and, as a result, that defendant had full and complete management authority over her shows. We do not see how it would be possible for defendant to take a contrary position in the upcoming hearing, but we cannot foreclose that possibility. Accordingly, plaintiff requests that a pretrial conference be scheduled at Your Honor's convenience so that all parties are in agreement with regard to the parameters, if any, of the hearing scheduled for August 4. Alternatively, we will be glad to coordinate a conference call, if that will be more convenient. EXHIBIT A . - ' Hon. M. L. Ebert, Jr. Page 2 July 10, 2009 Thank you for your attention to this request. Respectfully yours, KEEFER WOOD ALLEN & RAHAL, LLP By Charles W. Rubendall II CWRII/kch cc: Paige Macdonald-Matthes, Esquire (w/encl.) John D. Sheridan, Esquire (w/encl.) Robert S. Goodrich (w/encl.) bcc: Gary E. French, Esquire (w/encl.) r r 0 KEEFER WOOD ALLEN & RAHAL, LLP Charles W. Rubendall II, Esquire Attorney I.D. No. 23172 Gary E. French, Esquire Attorney I.D. No, 25810 Donald M. Lewis III, Esquire Attorney I.D. No. 58510 r 210 Walnut Street, P. 0. Box 11963 Harrisburg, PA 17108-1963 717-255-8010 and 255-8038 crubendall@keeferwood.com dlewis@keeferwood.com Attorneys for plaintiff ROBERT S. GOODRICH, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff V. CIVIL ACTION KATHY J. GOODRICH, Defendant No. 08-3139 Civil Term NOTICE TO ATTEND TO: Kathy J. Goodrich, Defendant c/o Paige Macdonald-Matthes, Esquire Serratelli, Schiffman, Brown & Calhoon 2080 Linglestown Road Harrisburg, PA 17110 You are directed to come to the Cumberland County Courthouse, Carlisle, Pennsylvania and appear before the Honorable M. L. Ebert, Jr., on Tuesday, August 4, 2009 at 9:00 a.m., to testify on behalf of Robert S. Goodrich, plaintiff in the above-referenced action, and remain until excused. You are further directed to bring with you three (3) or more copies of the following documents: EXHIBIT B 1. Profit and loss statements for the 2007 and 2008 shows in Madison, Wisconsin and Marlboro, Massachusetts. 2. Profit and loss statements for the 2007, 2008 and 2009 Summer Valley Forge Shows produced by Ms. Goodrich. If you fail to attend and bring the requested documents as required by this Notice to Attend, you may be subject to the sanctions authorized by Rule 234.5 of the Pennsylvania Rules of Civil Procedure. Respectfully submitted, KEEFER WOOD ALLEN & RAHAL, LLP Dated: July 28, 2009 By & r - Charles W. Rubendall II Gary E. French Donald M. Lewis III 210 Walnut Street P. 0. Box 11963 Harrisburg, PA 17108-1963 717-255-8010, 255-8015, and 255-8038 Attorneys for plaintiff - 2 - ' ' s CERTIFICATE OF SERVICE I, Charles W. Rubendall II, Esquire, one of the attorneys for plaintiff, hereby certify that I have served the foregoing paper upon counsel of record this date by hand-delivery, addressed as follows: Paige Macdonald-Matthes, Esquire Serratelli, Schiffman, Brown & Calhoon 2080 Linglestown Road Harrisburg, PA 17110 KEEFER WOOD ALLEN & RAHAL, LLP By Charles W. Rubendall II Dated: July 28, 2009 1 0 ' • • ` 0 r1 f nob 5481 JUL. 29. 2009 2:56PM S. S. B. & C. Hbg, Pa. 17110 N0.2502 P. 3/4 SERRATELLI, SCHIFFMAN, BROWN & CALHOON, P.C. Paige Macdonald-Matches, Esquire Supreme Court Ili No. 66266 John D. Sheridan, Esquire Attorney ID No. 82275 2080 Linglestown Road Harrisburg, PA 17110 (717) 540-9170 Attorneys for Defendant, Kathy J. Goodrich ROBERT S. GOODRICH, Plaintiff V. I-CATHY J. GOODRICH, Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA, DOCKET NO.: 2008-3139 CIVIL TERM NOTICE TO ATTEND TO: Robert S. Goodrich c/o Charles W. Rubendall, II, Esquire Gary L. French, Esquire Keefer Wood Allen & Rahal, LLP 210 Walnut Street P.O. Box 11963 Harrisburg, PA 17108-1963 You are directed to come to the Cumberland County Courthouse, Carlisle, Pennsylvania, before the Honorable M. L. Ebert, Jr., on Tuesday, August 4, 2009 at 9:00 A.M., to testify on behalf of Kathleen Goodrich in the above case and remain until excused. You are further directed to bring with you copies of the following documents: 1. Copies of all loan applications made by Goodrich & Company, Robert Goodrich and/or Robert Goodrich and Lisa Goodrich between 2007 and the present- NOTE, EXHIBIT C 0 717 540 5481 JUL. 29. 2009 2:57PM S. S. B. & C. Hbg, Pa. 17110 NO. 2502 P. 4/4 this request calls for the actual application prepared by or on behalf of Goodrich & Company, Robert Goodrich and/or Robert Goodrich and Lisa Goodrich; 2. Copies of all loan documents; 3. A complete list of the exhibitors for the Market Square Winter 2009 Show; 4. A complete list of Goodrich & Company's vendors; 5. A complete list of vendors (together with dollar amounts) paid by Goodrich & Company in February 2009; 6. Copies of Goodrich & Company's Profit and Loss Statements for 2008 and 2009 prepared by SHOW (this is the sales by Customer Summary); 7. Copies of P&L statements for Goodrich & Company prepared by MONTH for calendar years 2008 and 2009; and 8. A complete list of any past and/or future shows signed by Bob Goodrich, as President of Market Square, including all contracts. If you fail to attend and bring the requested documents as required by this Notice to Attend, you may be subject to the sanctions authorized by Rule 234.5 of the Pennsylvania Rules of Civil Procedure. Date: July 29, 2009 Respectfully submitted, P ge\Iacdonald-Matthes vrney ID No. 66266 ohn D. Sheridan, Esquire Attorney ID No. 82275 SERRATELLI, SCHIFFMAN, BROWN & CALHOON, P.C. 2080 Linglestown Road Harrisburg, PA 17110 (717) 540-9170 Attorney for Defendant A ' ` 6 CERTIFICATE OF SERVICE I, Charles W. Rubendall II, Esquire, one of the attorneys for plaintiff, hereby certify that I have served the foregoing paper upon counsel of record this date by facsimile transmission and first-class mail, addressed as follows: Paige Macdonald-Matthes, Esquire John D. Sheridan, Esquire Serratelli, Schiffman, Brown & Calhoon 2080 Linglestown Road Harrisburg, PA 17110 Fax No.: 717-540-5481 KEEFER WOOD ALLEN & RAHAL, LLP - By Charles W. Rubendall II Dated: July 30, 2009 ?-?? f ? -1 ?. (' ? ... ?* !y N ? s^* a t Fry . {? ,.t ?L.ii9-?- ,? i SERRATELLI, SCHIFFMAN, BROWN & CALHOON, P.C. Paige Macdonald-Matthes, Esquire Supreme Court ID No. 66266 2080 Linglestown Road Harrisburg, PA 17110 (717) 540-9170 Attorneys for Defendant, Kathy J. Goodrich ROBERT S. GOODRICH, : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff V. KATHY J. GOODRICH, Defendant : DOCKET NO.: 2008-3139 CIVIL TERM DEFENDANT'S REPLY IN OPPOSITION TO PLAINTIFF'S MOTION TO QUASH NOTICE TO ATTEND AND NOW, comes Defendant, Kathy J. Goodrich ("Defendant"), by and through her counsel, Serratelli, Schiffman, Brown & Calhoon, P.C., and files her Reply in Opposition to Plaintiff's Motion to Quash Notice to Attend, and in support thereof aver as follows: 1. Denied. Defendant's Notice to Attend, a copy of which is attached to Plaintiff's Motion as Exhibit "A" is a written document that speaks for itself. 2. Denied. It is denied that the "documents sought by Defendant will require considerable time to compile and copy." It is further denied that the time compiling and copying the documents "will prejudicially impact Plaintiff's hearing preparation and his counsel's hearing preparation." By way of further reply, (and as previously addressed at length in paragraph 2 of Defendant's previously filed Reply in Opposition to Plaintiff's Motion for Continuance), while Defendant did receive some of the documents in accordance with the Court's July 1, 2009 Order, there were a number of documents that were not produced despite the fact that the Court had specifically ordered them to be produced, to wit: all loan applications (only one (1) loan statement was produced)'; a complete list of Goodrich & Company's vendors and the amount paid by Goodrich & Company 2 and Goodrich & Company's Profit and Loss Statements for 2008 and 2009 prepared by month and by show3. Given the fact that the documents that were produced by Plaintiff were produced in such close proximity to the scheduled hearings in this matter (due to the fact that Defendant had to file a Motion to Compel with the Court in order to get Plaintiff to comply with her properly served Request for Production of Documents), in the interest of judicial economy Defendant elected not to file a second motion to compel but rather simply requested that Plaintiff bring the documents otherwise directed to be produced pursuant to this Court's July 1, 2009 Order at the time of hearing by way of a Notice to Attend. 3. Denied. It is denied that "some of the documents listed in the Notice to Attend do not now exist in the form described." To the contrary, (and as will be testified to at the time of hearing if necessary), the documents requested in the "form described in the Notice to Attend" are documents that are routinely kept by Plaintiff in the normal course of his business, and in the form requested by Defendant in the Notice to Attend. 1 This should have been produced in response to Defendant's Document Request No. 11 z This should have been produced in response to Defendant's Document Request No. 14 s This should have been produced in response to Defendant's Document Request No. 1 2 4. Denied. It is denied that "some of the information sought amounts to trade secrets, for which no protection against competitive use has been offered by Defendant." To the contrary, this case involves the request of the Parties for the Court's assistance with the separation/partition of the parties' businesses. Plaintiff and Defendant have equally right to have the information requested in Defendant's Notice To Attend. 5. Denied. It is denied that "Defendant has allied herself with Urban Expositions." It is further denied that "Urban Expositions is locked in heated competition with Plaintiff through promotion of its own show in the same industry in a nearby community and at about the same time in the early months of 2010." To the contrary, (and as was testified to by both Defendant and Doug Miller, President of Urban Expositions at the early hearing before this Honorable Court), Defendant has not "allied herself with Urban Expositions" against Plaintiff, nor is Urban Expositions in "heated competition with Plaintiff." 6. Denied. It is denied that "under these circumstances, Plaintiff should be excused from producing any documents in response to Defendant's Notice to Attend between now and August 4, 2009." To the contrary, Plaintiff has not offered M legitimate reason why the documents requested in the Defendant's Notice to Attend directed to Plaintiff should not be brought to Court by Plaintiff on August 4, 2009. Finally, and by way of further reply, Defendant believes and therefore avers that Plaintiff's Motion to Quash Notice to Attend is yet one more attempt by Plaintiff to delay the proceedings, and to further prejudice Defendant by increasing her litigation costs in this matter. This is particularly evident in light of 3 ? ;t jil 34 ZAi r :? KEEFER WOOD ALLEN & RAHAL, LLP Charles W. Rubendall II, Esquire Attorney I.D. No. 23172 Gary E. French, Esquire Attorney I.D. No. 25810 Donald M. Lewis III, Esquire Attorney I.D. No. 58510 210 Walnut Street, P. 0. Box 11963 Harrisburg, PA 17108-1963 717-255-8010 and 255-8038 crubendall@keeferwood.com dlewis@keeferwood.com ROBERT S. GOODRICH, V. KATHY J. GOODRICH, Plaintiff Defendant Attorneys for plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION No. 08-3139 Civil Term PLAINTIFF'S MOTION TO QUASH DEFENDANT'S NOTICE TO ATTEND NOW COMES plaintiff, Robert S. Goodrich, through his counsel, Keefer Wood Allen & Rahal, LLP, to move this Honorable Court to quash the notice to attend recently served upon plaintiff by defendant, averring as follows: 1. The circumstances surrounding defendant's notice to attend, a copy of which is attached hereto as exhibit A, were set forth in plaintiff's motion to continue, filed with the Court yesterday, July 30. 2. The documents sought by defendant will require considerable time to compile and copy, and the time in doing so will prejudicially impact plaintiff's hearing preparation and his counsel's hearing preparation. (The hearing is set to begin on August 4, 2009.) 3. Moreover, some of the documents listed in the notice to attend do not now exist in the form described. For instance, the listing in Category 8, to be complete, would have to be compiled after extensive research of records. 4. Last, some of the information sought amounts to trade secrets, for which no protection against competitive use has been offered by defendant. 5. Category 3 seeks a "complete list of all exhibitors for the Market Square Winter 2009 Show." As the Court knows from an earlier hearing, defendant has allied herself with Urban Exhibitions, a company that is locked in heated competition with plaintiff and the show in question through promotion of its own show in the same industry in a nearby community and at about the same time in the early months of 2010. 6. Under these circumstances, plaintiff should be excused from producing any documents in response to defendant's notice to attend between now and August 4, 2009. - 2 - WHEREFORE, plaintiff respectfully requests this Honorable Court to grants its motion to quash the notice to attend recently served upon him by defendant. Respectfully submitted, KEEFER WOOD ALLEN & RAHAL, LLP Dated: July 31, 2009 By Charles W. Rubendall II Gary E. French Donald M. Lewis III 210 Walnut Street P. 0. Box 11963 Harrisburg, PA 17108-1963 717-255-8010, 255-8015, and 255-8038 Attorneys for plaintiff - 3 - CERTIFICATE ON NON-CONCURRENCE I, Charles W. Rubendall II, one of attorneys for plaintiff, hereby certify that I sought concurrence in the foregoing motion from counsel for defendant (Ms. Macdonald-Matthes). Said concurrence was declined. KEEFER WOOD ALLEN & RAHAL, LLP Dated: July 31, 2009 By Charles W. Rubendall II SERRATELLI, SCHIFFMAN, BROWN & CALHOON, P.C. Paige Macdonald-Matthes, Esquire Supreme Court ID No. 66266 John D. Sheridan, Esquire Attorney ID No. 82275 2080 Linglestown Road Harrisburg, PA 17110 (717) 540-9170 Attorneys for Defendant, Kathy J. Goodrich ROBERT S. GOODRICH, : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff DOCKET NO.: 2008-3139 CIVIL TERM V. KATHY J. GOODRICH, Defendant NOTICE TO ATTEND TO: Robert S. Goodrich c/o Charles W. Rubendall, II, Esquire Gary E. French, Esquire Keefer Wood Allen & Rahal, LLP 210 Walnut Street P.O. Box 11963 Harrisburg, PA 17108-1963 You are directed to come to the Cumberland County Courthouse, Carlisle, Pennsylvania, before the Honorable M. L. Ebert, Jr., on Tuesday, August 4, 2009 at 9:00 A.M., to testify on behalf of Kathleen Goodrich in the above case and remain until excused. You are further directed to bring with you copies of the following documents: 1. Copies of all loan applications made by Goodrich & Company, Robert Goodrich and/or Robert Goodrich and Lisa Goodrich between 2007 and the present- NOTE, EXHIBIT A this request calls for the actual application prepared by or on behalf of Goodrich & Company, Robert Goodrich and/or Robert Goodrich and Lisa Goodrich; 2. Copies of all loan documents; 3. A complete list of the exhibitors for the Market Square Winter 2009 Show; 4. A complete list of Goodrich & Company's vendors; 5. A complete list of vendors (together with dollar amounts) paid by Goodrich & Company in February 2009; 6. Copies of Goodrich & Company's Profit and Loss Statements for 2008 and 2009 prepared by SHOW (this is the sales by Customer Summary); 7. Copies of P&L statements for Goodrich & Company prepared by MONTH for calendar years 2008 and 2009; and 8. A complete list of any past and/or future shows signed by Bob Goodrich, as President of Market Square, including all contracts. If you fail to attend and bring the requested documents as required by this Notice to Attend, you may be subject to the sanctions authorized by Rule 234.5 of the Pennsylvania Rules of Civil Procedure. Date: July 29, 2009 Respectfully submitted, Y ge Macdonald-Matthes orney ID No. 66266 ohn D. Sheridan, Esquire I ttorney ID No. 82275 SERRATELLI, SCHIFFMAN, BROWN & CALHOON, P.C. 2080 Linglestown Road Harrisburg, PA 17110 (717) 540-9170 Attorney for Defendant CERTIFICATE OF SERVICE I, Charles W. Rubendall II, Esquire, one of the attorneys for plaintiff, hereby certify that I have served the foregoing paper upon counsel of record this date by facsimile transmission, addressed as follows: Paige Macdonald-Matthes, Esquire John D. Sheridan, Esquire Serratelli, Schiffman, Brown & Calhoon 2080 Linglestown Road Harrisburg, PA 17110 Fax No.: 717-540-5481 KEEFER WOOD ALLEN & RAHAL, LLP By 000 Charles W. Rubendall II Dated: July 31, 2009 t t 2 0 'Ill 9 J? L' I O ! i A . SERRATELLI, SCHIFFMAN, BROWN & CALHOON, P.C. Paige Macdonald-Matthes, Esquire Supreme Court ID No. 66266 2080 Linglestown Road Harrisburg, PA 17110 (717) 540-9170 Attorneys for Defendant, Kathy J. Goodrich ROBERT S. GOODRICH, : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff : DOCKET NO.: 2008-3139 CIVIL TERM V. KATHY J. GOODRICH, Defendant DEFENDANT'S REPLY IN OPPOSITION TO PLAINTIFF'S MOTION FOR CONTINUANCE AND NOW, comes Defendant, Kathy J. Goodrich ("Defendant"), by and through her counsel, Serratelli, Schiffman, Brown & Calhoon, P. C., and files her Reply in Opposition to Plaintiff's Motion for Continuance and in support thereof aver as follows: Admitted. 2. Admitted in part and denied in part. It is admitted that Defendant timely prepared, served and responded to Plaintiff s discovery requests. It is denied that Plaintiff timely responded to Defendant's discovery requests, as evidenced by the fact that the Defendant had to file a Motion to Compel and for Sanctions which was resolved by Order of Court dated July 1, 2009. By way of further reply, while Defendant did receive some of the documents in accordance with the Court's July 1, 2009 Order, there were a number of documents that were not produced despite the fact that the Court had specifically ordered them to be produced, to wit: all loan applications (only one (1) loan statement was produced)'; a complete list of Goodrich & Company's vendors and the amount paid by Goodrich & Company2; and Goodrich & Company's Profit and Loss Statements for 2008 and 2009 prepared by month and by show3. Given the fact that the documents that were produced by Plaintiff were produced in such close proximity to the scheduled hearings in this matter, in the interest of judicial economy Defendant elected not to file a second motion to compel but rather request that Defendant bring the documents otherwise court ordered to be produced at the time of hearing by way of a Notice to Attend. 3. Denied. It is denied that the Pre-Trial Memoranda submitted by the parties "revealed that a fundamental disagreement exists as to the scope of the hearing set for August 4 and 5. 4. Admitted in part and denied in part. It is admitted that Mr. Rubendall wrote to the Court on July 10, 2009. It is denied that there is any disagreement that would necessitate the rescheduling of the hearings previously scheduled in this matter for August 4 and August 5. 5. Admitted only as to the fact that the July 10, 2009 letter from Mr. Rubendall is attached to the Plaintiff's Motion as Exhibit "A" NOT as to the truth of the matters asserted therein. 6. Admitted. 7. Admitted. 1 This should have been produced in response to Defendant's Document Request No. 11 z This should have been produced in response to Defendant's Document Request No. 14 3 This should have been produced in response to Defendant's Document Request No. 1 2 8. Admitted in part and denied in part. It is admitted that Defendant's counsel issued Plaintiff a Notice to Attend and that a copy of the same has been attached by Plaintiff's counsel to the Motion. It is denied that "some of the documents listed will require compilation by plaintiff and his staff, as not all the items sought now exist in the form described in Defendant's notice." To the contrary, (and as will be testified to at the time of hearing if necessary), the documents requested in the "form described in the Notice to Attend" are documents kept by Plaintiff in the normal course of his business. 9. Admitted. 10. Denied. It is denied that the hearings scheduled for August 4 and August 5 should be continued. By way of further reply, none of the reasons offered by Plaintiff's counsel for the continuance request have any merit, as more specifically addressed herein below. Finally, Defendant believes and therefore avers that this is yet one more attempt by Plaintiff to delay the proceedings to further prejudice Defendant. (a) Denied. It is denied that a settlement agreement has been reached. To the contrary, there are two (2) major issues that have yet to be agreed to by the Plaintiff, to wit: Plaintiff's continued use of the name "Market Square" and Plaintiff's need to provide Defendant with additional security and indemnification regarding the past and future shows signed by Bob Goodrich as "president" of Market Square and the production of all contracts; (b) Denied for the reasons set forth in paragraph 4 above; (c) Denied. It is denied that "particularly with regard to Defendant discovery has apparently not been completed as directed by the Court" By way of further reply, Defendant incorporates the averments set forth in paragraph 2 by reference as if more fully set forth at length herein. Finally, and by way of further reply, Plaintiff has known since the date Defendant first served her Requests for Production of Documents that he would need to produce the items requested in the Notice to Attend and thus Plaintiff's claim that "the time available for his hearing preparation will be unduly curtailed, to plaintiffs prejudice" is wholly disingenuous. 11. Denied. It is denied that ANY of the reasons offered by Plaintiff in support of his request for a continuance of the August 4 and August 5, 2009 hearings supports an Order granting said request. WHEREFORE, Defendant, Kathy Goodrich respectfully requests that this Court deny Plaintiff's Motion for Continuance and further award Defendant all such other relief as is proper and just, including but not limited to an Order directing Plaintiff to comply in full with the Notice to Attend that was served on him through counsel on July 29, 2009. Respectfully submitted, Date: July 31, 2009 , 1!1 a 1 ? I a a Paige Macdonald-Matthes, Esquire Attorney I.D. #66266 SERRATELLI, SCHIFFMAN, BROWN & CALHOON, P.C. 2080 Linglestown Road Harrisburg, PA 17110 Telephone: (717) 540-9170 Attorneys for Defendant, Kathy J. Goodrich 4 CERTIFICATE OF SERVICE I, Paige Macdonald-Matthes, Esquire, hereby certify that on this 31St day of July 2009, I served a true and correct copy of the foregoing Defendant's Reply in Opposition to Plaintiff's Motion for Continuance, via facsimile and United States First Class Mail, postage paid, upon the following: Charles W. Rubendall, II, Esquire Gary E. French, Esquire Donald M. Lewis, III, Esquire KEEFER WOOD ALLEN & RAHAL, LLP 210 Walnut Street P.O. Box 11963 Harrisburg, PA 17108-1963 Fax No. (717) 255-8003 Attorneys for Plaintiff With Courtesy Copy via Hand Delivery to The Honorable M. L. Ebert, Jr. Cumberland County Court of Common Pleas One Courthouse Square Carlisle, PA 17013-3387 Cu.a,? ?? Paige Macdonald-Matthes OF i(l T I?. a"e"R 2009 JU 31 t , l L CLk". ROBERT S. GOODRICH, IN THE COURT OF COMMON PLEAS OF PLAINTIFF CUMBERLAND COUNTY, PENNSYLVANIA V. : KATHY J. GOODRICH, DEFENDANT 08-3139 CIVIL TERM ORDER OF COURT AND NOW, this 3r S-t day of July, 2009, upon consideration of the plaintiffs motion for continuance and the defendant's reply thereto, IT IS HEREBY ORDERED AND DIRECTED that the motion for a continuance, IS DENIED. By the Court, M.L. Ebert, Jr., J. ? Charles W. Rubendall, II, Esquire For Plaintiff ZPaige Macdonald-Matthes, Esquire For Defendant :sal Cop?ES ma?l?cU OF THE- ARY 2009 JUL 31 luli 2* 31 r ROBERT S. GOODRICH, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. KATHY J. GOODRICH, Defendant NO. 08-3139 CIVIL ORDER OF COURT AND NOW, this 3d day of August, 2009, upon consideration of Plaintiffs Motion to Quash Defendant's Notice to Attend and the Defendant's Reply in Opposition thereto, IT IS HEREBY ORDERED AND DIRECTED that Plaintiff shall have all documents ordered to be produced by this Court by Order dated July 1, 2009, regarding Defendant's Request for Production of Documents. IT IS FURTHER ORDERED AND DIRECTED that prior to the start of the hearing scheduled for August 4, 2009, the Court will specifically review the items requested in the Notice to Attend which Plaintiff objects to and entertain limited argument regarding the requested items. By the Court, M. L. Ebert, Jr., J. Charles W. Rubendall, II, Esquire Attorney for Plaintiff Paige Macdonald-Matthes, Esquire Attorney for Defendant Distribution of copies via facsimile only -? S g'S? bas ICE. O THE' 2009 AUG -4 M 8: 13 t y .. ROBERT S. GOODRICH, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V CIVIL ACTION - LAW KATHY J. GOODRICH, NO. 08-3139 CIVIL TERM Defendant ORDER OF COURT AND NOW, this 4th day of August, 2009, upon agreement of the parties, the Court hereby enters the following Order adopting the parties settlement agreement as more specifically stated herein as follows: THIS AGREEMENT made and entered into this 4th day of August, 2009, but effective as of the close of business on December 31, 2007, by and between ROBERT S. GOODRICH, an adult individual now or hereafter residing at 1595 West Lisburn Road, Mechanicsburg, Pennsylvania, (hereinafter "Robert"); KATHY J. GOODRICH, an adult individual residing at 1775 Summerfield Drive, Mechanicsburg, Pennsylvania, (hereinafter "Kathy"); and MARKET SQUARE TRADITIONAL WHOLESALE, INC., a Pennsylvania business corporation, (hereinafter "Market Square"). W I T N E S S E T H: WHEREAS, Robert and Kathy are each 50% shareholders of Market Square; and WHEREAS, Market Square is 100% owner of Goodrich & Company Promotions, Inc., (hereinafter "Goodrich % f & Company"), a Pennsylvania business corporation; and WHEREAS, Market Square and Goodrich & Company are engaged in the business of producing trade and retail shows for profit at venues located throughout the United States; and WHEREAS, as a result of disagreements between Robert and Kathy regarding management of Market Square, a deadlock has arisen that hinders operation of the business; and WHEREAS, the parties have agreed to divide the assets through a tax-free divisive reorganization under Internal Revenue Code Section 355; and WHEREAS, Lisa Goodrich, although not a shareholder in either Market Square or Goodrich & Company, is to be included as part of this settlement agreement for purposes of the indemnification and collateralization for the indemnification agreement set forth in paragraph 9 herein; and WHEREAS, the parties wish to enter into this Agreement to set forth the various understandings between them. NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, and intending to be legally bound, the parties hereby agree as follows: . 1. RECITALS. The Recitals set forth above are incorporated into this Agreement as though fully set forth at length. 2. FORM OF REORGANIZATION. The division of assets between Robert and Kathy shall take the form of a divisive reorganization under IRS Code Section 355. The parties shall assign business assets, employees and contract rights between the two corporations in accordance with the terms of this Agreement. Upon closing under this Agreement as hereinafter defined, the stock of Goodrich & Company shall be distributed to Robert in exchange for surrender of his shares in Market Square. At closing, Robert shall resign as an officer and director of Market Square. 3. CLOSING. The effective date of the divisive reorganization shall be the close of business on December 31, 2007 (the "Closing Date"). Robert and Goodrich & Company, using their accountant, shall be responsible for the closing of the books for Goodrich & Company for the year 2008 and Kathy, using her accountant, Scott Sniegocki, shall be responsible for the closing of the books for Market Square for the year 2008. The parties will file separate returns beginning with calendar year 2008. 4. CORPORATE ENTITY. Market Square and all goodwill associated therewith, subject to the terms of this Agreement shall be retained by Kathy. Goodrich & Company 11 1 and all goodwill associated therewith, subject to the terms of this Agreement, shall be retained by Robert. The parties recognize that they have been operating as separate entities since approximately April 2007. All assets, as well as liabilities reflected on the financial statements attached hereto as Exhibit A and incorporated herein b:y reference shall be the responsibility and benefit to each party. 5. USE OF TRADE NAME. Robert and Goodrich & Company have used the trade name "Market Square" since approximately April 2007. Effective upon the Court's acceptance of this Agreement, Robert and Goodrich & Company will cease using the Market Square name in any of their promotions, literature, web sites, etc. However, Robert shall be permitted to use the Market Square name pertaining to the January 2010 show only. In exchange for Robert's agreement to immediately cease using the name Market Square in any of his promotions, literature, web sites, etc., Kathy agrees that she will cease using the reference "Formerly held at Valley Forge Convention Center". However, she shall be permitted to use this reference as it pertains to the January 2010 show. The parties further agree that in the event of any breach of this subparagraph that the prevailing non-breaching party shall be entitled to recover all counsel fees and costs incurred in the enforcement of the terms and conditions set forth in subparagraph 5. 6. MISCELLANEOUS CORPORATE ASSETS. All telephone numbers, contract rights, employees and personal property currently held by or employed by Market Square and Goodrich & Company shall continue to be so held and/or employed after closing and the separation of -the two entities. 7. DIVISION OF SHOWS. The parties agree to divide the principal assets of Market Square and Goodrich & Company, that is, the corporate opportunities and goodwill associated with producing various shows, as set forth on Exhibit B attached hereto and incorporated herein by this reference. 8. PRIORITY TRAVEL. The assets and liabilities associated with Priority Travel shall be assigned to and assumed by Robert or Goodrich & Company effective December 30, 2008. Priority Travel will have no authority to sign hotel or room block contracts on behalf of Market Square. 9. OTHER CONTRACTUAL OBLIGATIONS. The parties hereto agree, they each have signed hereby represents and Exhibit C attached he reference constitutes contracts that he has as well as Lisa Goodrich agrees, that contracts from Market Square. Robert agrees that the contracts included on reto and incorporated herein by an accurate and complete list of signed on behalf of Market Square as "President". With the exception of those contracts which have been signed by Robert as "President" on behalf of Market Square, as identified on Exhibit C attached hereto and incorporated herein by reference, all contractual obligations of Market Square going forward are Kathy's sole and exclusive responsibility and Kathy shall indemnify and hold Robert and Goodrich & Company and Lisa Goodrich harmless regarding the same. All contractual obligations of Goodrich & Company going forward, as well as all the contractual obligations identified on Exhibit C attached hereto, are Robert's sole and exclusive responsibility and Robert, Lisa, and/or Goodrich & Company shall indemnify and hold Kathy and Market Square harmless regarding the same. As additional security for the indemnification in the event of default, Robert, Lisa and Goodrich & Company hereby pledge the following: A. The anticipated income tax refund of Robert and Lisa Goodrich from the filing of their 2008 personal income tax return, together with any refund generated by the carryback of the loss incurred in 2008 by Goodrich & Company. Said income tax refund proceeds shall be deposited into an interest bearing escrow account to be held by Joseph Goldberg, Esquire, Escrow Agent. As additional security for the indemnification in the event of default, Robert, Lisa and Goodrich & Company hereby agree to immediately execute a UCC-1 Financing Statement giving Kathy a secured interest in all assets, receivables and inventory of Goodrich & Company. 10. MUTUAL COOPERATION. The :parties acknowledge that the initial period following separation of the businesses will involve confusion on the part of exhibitors, vendors and customers of Market Square and Goodrich & Company with regard to who is responsible for the lines of business currently conducted. The parties agree to cooperate in directing exhibitors, vendors and customers to the correct operator based on the division of shows set forth on Exhibit B, whether that operator is Market Square or Goodrich & Company. Telephone calls, invoices, mail, etc., shall be forwarded to the correct recipient based upon the division of shows set forth herein. None of the parties hereto shall disparage the business conducted by the other party. 11. FURTHER DOCUMENTS. The parties agree to execute any and all written instruments, assignments, releases, deeds and other documents and writings which from time to time may become necessary to effectuate the terms of this Agreement. 12. ENTIRE AGREEMENT. The parties do hereby covenant and warrant that this Agreement contains all of the representations, promises, and agreements made by either of them to the other for the purposes set forth in the preamble herein above; that there are no claims, promises or representations not herein set forth, either oral or written, which shall or may be charged or enforced or enforceable unless reduced to writing and signed by both of the parties hereto; and the waiver of any term, condition, clause or provision of this Agreement shall in no way be deemed to be considered a waiver of any other terms, conditions, clauses or provision of this Agreement. This Agreement may be amended by the parties only by a written instrument signed by both parties hereto. 13. NONWAIVER OF PERFORMANCE. This Agreement shall remain in full force and effect unless and until terminated pursuant to the terms of this Agreement, including but not limited to the indemnification and collateralization issues set forth in paragraph 9. The failure of either party to insist on strict performance of any of the provisions of this Agreement shall not be construed as a waiver of any subsequent default of the same or similar nature. 14. INVALIDITY. If any terms, condition clause or provision of this Agreement shall be determined or declared to be void or invalid in law or otherwise, then only that term, condition, clause or provision shall be stricken from this Agreement and in all other respects, this Agreement shall be valid and continue in full force, effect and operation. Likewise, the failure of any party to meet his or her obligations under one or more of the paragraphs herein, with the exception of the satisfaction of the conditions precedent shall in no way avoid or alter the remaining obligations of the parties. 15. BREACH. If either party breaches any provision of this Agreement, then the other party shall have the right, at his or her election, to sue for such breach at law or in equity to enforce any rights and remedies which the party may have, and the party breaching this Agreement shall be responsible for legal fees and costs incurred by the other in enforcing his or her rights under this Agreement. 16. EFFECTIVE DATE. Except as otherwise specifically provided herein, this Agreement shall be effective on August 4, 2009. 17. GOVERNING LAW This Agreement shall be construed in accordance with the laws of the Commonwealth of Pennsylvania. 18. SUCCESSORS IN INTEREST. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the parties hereto, their respective heirs, executors, administrators, successors or l assigns. 19. SCRIVNER. This Agreement was drafted jointly by the parties and negotiated by each party of its own free will and in good faith, and consequently the terms set forth herein shall not be construed against any particular party based upon the drafting or the dictation of the document. IN WITNESS WHEREOF, Robert S. Goodrich, Lisa Goodrich, and Kathy J. Goodrich placed their assent to this agreement on the record pursuant to questioning by the Court. By the Court, N*M. L. Ebert, Jr., J. Charles W. Rubendall, II, Esquire Gary E. French, Esquire For the Plaintiff Paige Macdonald-Matthes, Esquire John D. 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O 0 3 cc r* 'C O 9? r 0 o c U O C 0 0 N 1 A. C 1 DIVISION OF SHOWS TAT TT TIT January - Madisson Orderwriting and Cash & Carry February - Valley Forge-Cash and Carry April - Cash & Carry New England June - Market Square/Midwest Madison (Orderwriting and Cash & Carry Wholesale.) Market Square/Summer Show, Valley Forge Orderwriting and Cash & Carry September - Cash & Carry Valley Forge Cash & Carry Madison October - Cash & Carry Marlboro Cash & Carry Valley Forge P 4 D(I=1 DT January - Designer Craftsman/Historic Home Shows (Retail Valley Forge) Market Square Winter Show Valley Forge - Orderwriting * March - York Folk Art & Craft Show The Antiques Show at York Mid-Atlantic Flower Show Historic Home Show at York Market Square New England Show Orderwriting Wholesale Market Square American Made Invitational Sturbridge Market Square American Made Invitational Columbus ** April - Designer/Historic Home Retail, Sturbridge, MA November - York Folk Art & Craft Show The Antiques Show at York w + f * With regard to the limitation of Mr. Goodrich's ability to use the Market Square name only for the 2010 show as reflected and agreed to pursuant to paragraph 5 of the agreement. ** The actual name Market Square cannot be used for any other show other than the Valley Forge show in 2010 as previously agreed to in paragraph 5. V VWTnTm r LIST OF CONTRACTS ENTERED INTO BY ROBERT ON BEHALF OF MARKET SQUARE AS PRESIDENT 1. Valley Forge Convention Center (Orderwriting and Cash & Carry - January 2009). 2. Marlboro, MA, canceled March 2009. 3. Valley Forge Convention Center (Orderwriting and Cash & Carry) - January 2010. FLM (F FE wit-IMiARY AUG 14 Ali W 25 P'0AYAM