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HomeMy WebLinkAbout01-6500MASON-NORTON COMPANY, INC. Plaintiff SCOTT W. THUMMA, Defendant : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : CIVIL ACTION-IN EQUITY NOT~CE 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 have been served. To defend against the aforementioned claims, a written appearance stating your defenses and objections must be entered and filed in writing by you, the defendant, or by an attorney. You are warned that if you fail to take action against these claims, the court may proceed without you and a judgement for any money claimed in the complaint or for any other claim required by the plaintiff may be entered against you by the cour~ without further notice. You may lose money, property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Cumberland County Bar Association 2 Liberty Avenue Carlisle, PA. 17013-- (717) 249-3166 (800) 990-9108 NOTICIA Le ban demandado a usted en la corte. Si usted quiere defenderse de estas damandas expuastas en las paginas siguientes, usted tiene viente (20) dias de plazo al partir de la fecha de la demanda y la notiflcacion. Usted debe presentar una apariencia escrita o en persona o por abogado y archivar en la corte en forrna escrita sus defensas o sus objecJones a las demandas en contra de su persona. Sea avisado que si usted no se defiende, la corte tomara rnedidas 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 dernanda. Usted puede perder dinero o sus propiedades o otros derechos importantes para usted. LLEVE ESTA DEMANDA A UN ABODAGO IMMEDIATAMENTE. SI NO TIENNE ABOGAD 0 SI NO TIENE EL DINERO SUFICIENTE DE PAGAR TAL SERVICIO, VAYA EN PERSONA 0 LLAME POR TELEFONE A LA OFICINA CUYA DIRECCION SE ENCUENTRA ESCRIDA ABAJO PARA AVERIGUAR DONDE SE PUEDE CONSEGUIR ASSISTENCIA LEGAL: Cumberland County Bar Association 2 Liberty Avenue Carlisle, PA. 17013 -- (717) 249-3166 (800) 990-9108 MASON-NORTON COMPANY, INC., Plaintiff VS. SCOTT W. THUMMA, Defendant : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PA : NO. OI- f.,,,,5"OO ~__-~c~'],..] ~"--~/~ : :CIVIL ACTION-IN EQUITY : COMPLAINT AND NOW, comes the Plaintiff Mason-Norton Company, Inc. by and through its attorneys, Purcell, Krug & Hailer, and makes the following Complaint and in support thereof avers the following: 1. The Plaintiff is Mason-Norton Company, Inc., a Pennsylvania corporation organized and existing under the laws of the Commonwealth of Pennsylvania, with an address of 310 South Tenth Street, Lemoyne, Cumberland County, Pennsylvania 17043. 2. The Defendant Scott W. Thumraa is an adult individual with a current address of 509 Fifth Street, New Cumberland, Cumberland County, Pennsylvania 17070. 3. Mason-Norton Company, Inc. is a company which provides among other services, a brokerage of speciality construction products in the cornmercial construction industry. 4. Mason-Norton Company, Inc. conducts business throughout the state of Pennsylvania, and into the states adjoining or surrounding Pennsylvania. 5. Mason-Norton Company, Inc. has spent many years and invested a substantial amount of money and time in marketing to build a positive relationship with potential customers in the geographical location in which it conducts business. 6. The Defendant is a former employee of Mason-Norton Company, Inc. 7. The Defendant was originally hired by the predecessor of Plaintiff, the Mason-Norton Company, which at the time of his employment, was a partnership consisting of Herbert N. Preble and George O. Preble. 8. Subsequent to the Defendant's employment, the partnership was merged into the present corporation, and all employment contracts were assumed by the Plaintiff corporation, inclu8~r~g the employment contract between the parties. 9. The Defendant was originally employed on or about October 11, 1984. At that time, the Defendant executed a Restrictive Covenant Agreeement, agreeing that as a condition of his employment, upon termination of his employment with Plaintiff, for a period of five years, he would not work for any other company, individual or himself in competition with Mason-Norton Company. 2 10. Thereafter, Defendant did terminate Iris employment and left the employ of Mason-Norton Company for a short period of time. 11. On or about September 20, 1989, the Defendant was re-employed, and at that time, executed another Restrictive Covenant Agreement containing the same terms referenced above. A copy of that Agreement is attached hereto and made a part hereof as Exhibit "A". 12. At the time the Defendant was re-hired by Plaintiff, he was aware that he would be required to sign the Restrictive Covenant Agreement as a condition of his re-employment, and agreed to do so. 13. On or about May 31, 2001, the Defendant terminated his employment with the Plaintiff for a second time. 14. Thereafter, Plaintiff believes and therefore avers that the Defendant took a position with Hostetter Supply Company, Inc., 1880 West Mason Avenue, York, York County, Pennsylvania 17405. 15. Hostetter Supply Company, Inc., is a business which is, in whole or in par~, in competition with the Plaintiff's business. 16. Upon information and belief, Plaintiff believes and therefore avers that the Defendant is using knowledge, skills and training received while employed by the Plaintiff, in an effort to take away business from the Plaintiff for the benefit of his present employer. 17. The Defendant's employment with a competitor, and his direct actions in attempting to solicit business away from the Plaintiff for the benefit of his new employer, business which is exclusive only to the Plaintiff, is continuing and unless enjoined by this Court will result in irreparable harm, injuz¥ and damage to the Plaintiff for which Plaintiff has no adequate remedy at law. 18. The Agreement of the par~ies as embodied in the Restrictive Covenant attached is an enforceable Agreement between the Plaintiff and Defendant and is reasonably limited in duration of time and geographic area, or can be by the Court. 19. The Defendant breached the contract with Plaintiff by: A. Taking employment with a competitor of Plair~tiff within five years from the date of termination of his employment with Plaintiff; B. Using his knowledge and information obtaiued from his employment with P1siutiff for the purpose of soliciting clients and business away from Plaintiff for the benefit of his current employer. 20. Defendant is in breach of his Agreement with Plaintiff, and has irreparably harmed, and continues to cause irreparable harm to, Plaintiff. 21. Only a Decree of Specific Performance would adequately protect the interest of Plaintiff and provide Plaintiff with the benefits for which it is entitled under the parties' Agreements. WHEREFORE, Plaintiff, Mason-Norton Company, Inc. requests this Honorable Court to: 1. Schedule a Hearing on the Plaintiff's Complaint, and; 2. After Hearing, Order specific Perfoimance of the Restrictive Covenant Agreement of the parties; and 3. Prohibit the Defendant from continuing his employment with any competitor of the Plaintiff, including his present employer, Hostetter Supply Company, Inc., and himself; and 4. Provides such other relief as the Court shall find appropriate and just. Respectfully submitted, PURCELL, KRUG & HALLER BY .Xl~trcell, Jr. 955 rth Front Street Harrisburg, PA 17102 (717) 234-4178 MASON- NORTON COMPANY HERBERT N. P~'EBT.~.. Pa~S~DE~J~ 310 S. TEI'OTFr ~T., LEMOYNE, PA. 17043 I~HONE 717-737-4558 TOILET PARTITIONS OFFICE PARTITIONS METAL WINDOWS ORNAMENTAL METAL WORK FIRE DOORB FIRE EA'TINGUIIHERS CHALKBOARD AND TRIM SKYLIGHTB WIRE.MESH PARTITIONS AND WINDOW GUARDS CURTAIN CUBICLES TELEPHONE BOOTHS IIATHLI F'Tla As a condition of my employment with Mason-Norton Company, I hereby agree that, if for any reason I must seek employment elsewhere, that for a period of 5 years following the termination of my employment with Mason-Norton Company, I will not work for any other company, individual or myself in competition with the Mason-Norton Company or Herbert N. Preble, throughout the Commonwealth of Pennsylvania. Exhibit "A" VERIFICATION COMPANY NAME: MASON-NORTON COMPANY I verify that the statements made in the foregoing Complaint are true and correct. I understand that false statements herein are made subject to the penalties of 18 PA C.S. § 4904 relating to unsworn falsification to authorities. Dated: ~,/~, ~, z M/ B~ Title MASON-NORTON COMPANY, INC., Plaintiff VS. SCOTT W. THUMMA, Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA :CIVIL ACTION-IN EQUITY . MOTION FOR TEMPORARY INJUNCTIVE RELIEF 1. The Movant is Mason-Norton Company, the Plaintiff in the above captioned matter. 2. The Plaintiff has filed a Complaint requesting specific perfo,¥nance of the Restrictive Covenant Agreement between the parties, a copy of which is attached hereto and made a part hereof as Exhibit "A". 3. The Defendant has used his employment with a competitor to tiy to affect existing business of the Plaintiff, and continues to do so since taking on his new employment. 4. The Plaintiff requests the Court to schedule a hearing and thereafter to enter an Order temporarily enjoining the Defendant from continuing his employment with Hostetter Supply Company, Inc. until trial on the merits of the Plaintiff's Complaint. WHEREFORE, the Movant requests this Honorable Court to schedule a hearing on the Plaintiff's Motion for Temporary Injunctive Relief. Respectfully submitted, PURCELL, KRUG & HALLER I.~. #29955 19 North Front Street (717) 234-4178 MASON-NORTON COMPANY, INC. Plaintiff VS. SCOTT W. THUMMA, Defendant : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : :NO. : CIVIL ACTION-IN EQUITY 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 have been served. To defend against the aforementioned claims, a written appearance stating your defenses and objections must be entered and filed in writing by you, the defendant, or by an attorney. You are warned that if you fail to take action against these claims, the court may proceed without you and a judgement for any money claimed in the complaint or for any other claim required by the plaintiff may be entered against you by the court without further notice. You may lose money, property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Cumberland County Bar Association 2 Liberty Avenue Carlisle, PA. 17013-- (717) 249-3166 (800) 990-9106 NOTICIA Le hah demandado a usted en la corte. Si usted quiere defenderse de estas damandas expuastas en las paginas siguientes, usted tiene viente (20) dias de plazo al partir de la fecha de la demanda y la notificacion. Usted debe presentar una apariencia escrita o en persona o por abogado 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 dernanda. Usted puede perder dinero o sus propiedades o otros derechos importantes para usted. LLEVE ESTA DEMANDA A UN ABODAGO IMMEDIATAMENTE. SI NO TIENNE ABOGAD O SI NO TIENE EL DINERO SUFICIENTE DE PAGAR TAL SERVICIO, VAYA EN PERSONA O LLAME POR TELEFONE A LA OFICINA CUYA DIRECCION SE ENCUENTRA ESCRIDA ABAJO PARA AVERIGUAR DONDE SE PUEDE CONSEGUIR ASSISTENCIA LEGAL: Cumberland County Bar Association 2 Liberty Avenue Carlisle, PA. 17013 -- (717) 249-3166 (800) 990-9108 em,m MASON-NORTON COMPANY, INC., Plaintiff VS. SCOT]? W. THUMMA, Defendant : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PA : : NO. : :CIVIL ACTION-IN EQUITY : COMPLAINT AND NOW, comes the Plaintiff Mason-Norton Company, Inc. by and through its attorneys, Purcell, Krug & Hailer, and makes the following Complaint and in support thereof avers the following: 1. The Plaintiff is Mason-Norton Company, Inc., a Pennsylvania corporation organized and existing under the laws of the Commonwealth of pennsylvania, with an address of 310 South Tenth Street, Lemoyne, Cumberland County, pennsylvania 17043. 2. The Defendant Scott W. Thumma is an adult individual with a current address of 509 Fifth Street, New Cumberland, Cumberland County, Pennsylvania 17070. 3. Mason-Norton Company, Inc. is a company which provides among other services, a brokerage of speciality construction products in the commercial construction industry. 4. Mason-Norton Company, Inc. conducts business throughout the state of Pennsylvania, and into the states adjoining or surrounding pennsylvania. 5. Mason-Norton Company, Inc. has spent many years and invested a substantial amount of money and time in marketing to build a positive relationship with potential customers in the geographical location in which it conducts business. 6. The Defendant is a former employee of Mason-Norton Company, Inc. 7. The Defendant was originally hired by the predecessor of Plaintiff, the Mason-Norton Company, which at the time of his employment, was a partnershiP consisting of Herbert N. Preble and George O. Preble. 8. Subsequent to the Defendant's employment, the partnership was merged into the present corporation, and all employment contracts were assumed by the Plaintiff corporation, including the employment contract between the parties. 9. The Defendant was originaUy employed on or about October 11, 1984. At that time, the Defendant executed a Restrictive Covenant Agreeement, agreeing that as a condition of his employment, upon tem-fination of his employment with plaintiff, for a period of five years, he would not-work for any other company, individual or himself in competition with Mason-Norton Company. 2 10. Thereafter, Defendant did tez,~,inate his employment and left the employ of Mason-Norton Company for a short period of time. 11. On or about September 20, 1989, the Defendant was re-employed, and at that time, executed another Restrictive Covenant Agreement containing the same te~**-,s referenced above. A copy of that Agreement is attached hereto and made a part hereof as Exhibit "A". 12. At the time the Defendant was re-hired by plaintiff, he was aware that he would be required to sign the Restrictive Covenant Agreement as a condition of his re-employment, and agreed to do so. 13. On or about May 31, 2001, the Defendant te~,~nated his employment with the Plaintiff for a second time. 14. Thereafter, Plaintiff believes and therefore avers that the Defendant took a position with Hostetter Supply Company, Inc., 1880 West Mason Avenue, York, York County, Pennsylvania 17405. 15. Hostetter Supply Company, Inc., is a business which is, in whole or in part, in competition with the PlaintifFs business. 16. Upon info~,~£,ation and belief, Plaintiff believes and therefore avers that the Defendant is using knowledge, skills and training received while employed by the Plaintiff, in an effort to take away business from the Plaintiff for the benefit of his present employer. 17. The Defendant's employment with a competitor, and his direct actions in attempting to solicit business away from the Plaintiff for the benefit of his new employer, business which is exclusive only to the Plaintiff, is continuing and unless enjoined by this Court will result in irreparable harm, injury and damage to the Plaintiff for which Plaintiff has no adequate remedy at law. 18. The Agreement of the parties as embodied in the Restrictive Covenant attached is an enforceable Agreement between the P1A~utiff and Defendant and is reasonably limited in duration of time and geographic area, or can be by the Court. 19. The Defendant breached the contract with Plaintiff by: A. Taking employment with a competitor of Plaintiff within five years from the date of termination of his employment with Plaintiff; B. Using his knowledge and information obtained from his employment with Plaintiff for the purpose of soliciting clients and business away from plaintiff for the benefit of his current employer. 20. Defendant is in breach of his Agreement with Plaintiff, and has irreparably hmmed, and continues to cause irreparable harm to, Plaintiff. 21. Only a Decree of Specific Performance would adequately protect the interest of p)~iutiff and provide Plaintiff with the benefits for which it is entitled under the parties' Agreements. WHEREFORE, Plaintiff, Mason-No~ton Company, Inc. requests this Honorable Court to: 1. Schedule a Hearing on the Plaintiff's Complaint, and; 2. After Hearing, Order specific performance of the Restrictive Covenant Agreement of the parties; and 3. Prohibit the Defendant from continuing his employment with any competitor of the Plaintiff, including his present employer, Hostetter Supply Company, Inc., and himself; and 4. Provides such other relief as the Cour~ shall find appropriate and just. Respectfully submitted, PURCELL, KRUG & HALLER . j 1~9~N29o."l~rc ell, Jr. 955 rth Front Street Harrisburg, PA 17102 (717) 234-4178 V.V.V_ E RI F I C ATI O N- COMPANY NAME: MASON-NORTON COMPANY verify that the statements made in the foregoing Complaint are true and correct. I understand that false statements herein are made subject to the penalties of 18 PA C.S. § 4904 relating to unsworn falsification to authorities. Dated: /"/~/' ~' 2_~/ _ ~.~ MASON-NORTON COMPANY, INC., Plaintiff VS. SCOTT W. THUMMA, Defendant : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PA :CIVIL ACTION-IN EQUITY MOTION FOR TEMPORARY INJUNCTIVE RELIEF 1. The Movant is Mason-Norton Company, the Plaintiff in the above captioned matter. 2. The Plaintiff has filed a Complaint requesting specific performance of the Restrictive Covenant Agreement between the parties, a copy of which is attached hereto and made a part hereof as Exhibit "A". 3. The Defendant has used his employment with a competitor to try to affect existing business of the Plaintiff, and continues to do so since taking on his new employment. 4. The Plaintiff requests the Court to schedule a hearing and thereafter to enter an Order temporarily enjoining the Defendant from continuing his employment with Hostetter Supply Company, Inc. until trial on the merits of the Plaintiff's Complaint. WHEREFORE, the Movant requests this Honorable Court to schedule a hearing on the Plaintiff's Motion for Temporary Injunctive Relief. Respectfully submitted, PURCELL, KRUG & HALLER ( I.~. #29955 k~l~__ 19 North Front Street Harrisburg, PA 17102 (717) 234-4178 2 MASON-NORTON COMPANY, INC., Plaintiff VS. SCOTT W. THUMMA, Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA :CIVIL ACTION-IN EQUITY ORDER OF COURT AND NOW, this L~ ~day of K~'~.-'~¢~C~ , 2001, upon consideration of the foregoing Motion for Temporary Injunctive Relief, a hearing is scheduled for the ~J?f--,~ day of ~ 2001, at/;3~Pf.M., in Courtroom No. / Cumberland County Courthouse, Carlisle, PA 17013. BY THE COURT, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA MASON-NORTON COMPANY, INC. : : _. ._ SCOTT W. THUMMA : .* NO. 01-6500 EQUITY TERM CIVIL ACTION-IN EQUITY DEFENDANT'S RESPONSE TO PLAINTIFF'S MOTION FOR TEMPORARY INJUNCTIVE RELIEF Admitted. Admitted in part, Denied in part. The allegations contained in tiffs Paragraph are admitted insofar as the Plaintiff has filed a Complaint requesting the alleged relief. The allegations are denied insofar as any restrictive covenant exists and/or if the same should exist, that it is enforceable. Denied. Defendant, Scott W. Thumma, specifically denies the allegations in that they are factually incorrect. Denied. The allegations are denied in that Defendant believes and, therefore avers, that Plaintiff's Complaint is meritless and without basis in law and opposes any Order enjoining Defendant from earning a livelihood. WHEREFORE, Defendant/Respondent respectfully requests that this Honorable Court deny Plaintiff's Motion and grant any other relief that the Court deems necessary and just. Respectfully submitted, BAKER LAW FIRM, LLC Timothy A. Baker, Esq[tire Identification No. 72744 3110 East Market Street Suite E York, PA 17402 (717) 600-2900 IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA MASON-NORTON COMPANY, INC. : .. : SCOTT W. THUMMA : _. NO. 01-6500 EQUITY TERM CIVIL ACTION-IN EQUITY VERIFICATION I, Scott W. Thumma, Defendant in the above-captioned matter, verify that the facts contained in the foregoing document are true and correct to the best of my knowledge and belief. I understand that false statements may be subject to penalties under 18 Pa. C.S. 4904, relating to unswom falsification to authorities. Sco~W.~ IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA MASON-NORTON COMPANY, INC. : : V. _. ._ SCOTT W. THUMMA : .. NO. 01-6500 EQUITY TERM CIVIL ACTION-IN EQUITY Certificate of Service I, Timothy A. Baker, Esquire, of Baker Law Firm LLC, 3110 East Market Street, Ste. E, York, PA 17402-2512 do hereby certify that the date set forth below, I served the following individual(s) the foregoing Pleading, by placing the same in the United States mail, postage prepaid to: John W. Purcell, Jr. PURCELL, KRUG & HALLER 1719 North Front Street Harrisburg, PA 17102 Attorney for Plaintiff Vated.~ t~[O~ ~imothy A. Baker, Esquire 3110 East Market Street Suite E York, PA 17402 717-600-2900 Attorney for Plaintiff To: Plaintiff, Mason-Norton Company, Inc. You are hereby notified to ~e a written response to the enclosed NEW MATTER within twenty (20) days from service hereof or a ludgmeot may be entered against you. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA MASON-NORTON COMPANY, INC. V. SCOTT W. THUMMA NO. 01-6500 EQUITY TERM CIVIL ACTION-IN EQUITY AND NOW, comes the Defendant, Scott W. Thumma, by and through his attorneys, Baker Law Firm, LLC, and answers Plaintiff's Complaint and avers as follows: 1. Admitted. 2. Admitted. 3. Admitted. 4. Admitted. 5. Denied. The allegations contained in this Paragraph are denied in that Plaintiff, Mason-Norton Company, Inc. has only been in existence since December 16, 1998. By way of further answer, Defendant is not aware of the amount of time and money spent by Plaintiff with regard to customer relationships, therefore, the same are denied and strict proof is demanded at trial. 6. Admitted. 10. 11. 12. 13. 14. 15. 16. Admitted. Denied. Plaintiff specifically denies that any employment contracts were assumed by Plaintiff upon incorporation and, therefore, the allegations are denied and strict proof is demanded at trial. Admitted in part, Denied in part. The allegations contained in this Paragraph are Admitted insofar as the Defendant began working for Mason-Norton Company, on or about October 11, 1984. The remaining allegations are Denied in that any restrictive covenant, if same should exist and being a document, would speak for itself and should have properly been attached to the Complaint. Admitted. Admitted in part, Denied in part. The allegations contained in this Paragraph are Admitted insofar as Defendant was re-employed by the Mason-Norton Company. The remaining allegations are denied in that any restrictive covenant, being a document, speaks for itself. Denied. Defendant was re-hired by Mason-Norton Company, a parmership, and not Plaintiff Mason-Norton Company, Inc. Admitted. Admitted. Admitted. Denied. The allegations contained in this Paragraph are denied in that the Plaintiff and Hostetter Supply Company compete based upon a low price basis. 17. Denied. The allegations contained in this Paragraph are conclusions of law which require no response, therefore, the same are denied.. Insofar as a response may be deemed required, Defendant specifically denies each and every allegation contained in this Paragraph and specific proof is demanded at trial. 18. Denied. The allegations contained in this Paragraph are conclusions of law which require no response, therefore, the same are denied. 19. Denied. The allegations contained in this Paragraph are conclusions of law which require no response, therefore, the same are denied. Insofar as a response may be deemed required, Defendant specifically denies each and every allegation contained in this Paragraph and specific proof is demanded at 20. Denied. The allegations contained in this Paragraph are conclusions of law which require no response, therefore, the same are denied. 21. Denied. The allegations contained in this Paragraph are conclusions of law which require no response, therefore, the same are denied. WHEREFORE, Defendant, Scott W. Thumma, respectfully requests that this Honorable Court dismiss Plaintiff's Complaint in its entirety and award to Defendant any other relief which this Court beheves appropriate. NEW MATTER 22. Plaintiff's Complaint fails to state a claim for which relief may be granted. 23. Plaintiff's Claim is barred by the applicable statute of limitations. 24. Plaintiff believes and therefore avers that any restrictive covenant signed by the Defendant, if any should exist, is overly broad in scope, location and time and is, therefore, unenforceable. 25. Any covenant, if any should exist, is not a contract and/or is unenfomeable as a matter of law. WltEREFORE, Defendant, Scott W. Thumma, respectfully requests that this Honorable Court dismiss Plaintiff's Complaint in its entirety and award to Defendant any other relief which this Court deems appropriate. Respectfully submitted, BAKER LAW FIRM, LLC Timothy A. ]~aker, Esqurire Identification No. 72744 3110 East Market Street Suite E York, PA 17402 (717) 600-2900 Attorney for Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA MASON-NORTON COMPANY, INC. : SCOTT W. THUMMA : NO. 01-6500 EQUITY TERM CIVIL ACTION-IN EQUITY yERIFIC__ATION I, Scott W. Thumma, Defendant in the above-captioned matter, verify that the facts contained in the foregoing document are true and correct to the best of my knowledge and belief. I understand that false statements may be subject to penalties under 18 Pa. C.S. 4904, relating to unswom falsification to authorities. Scott W. Thumma IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA MASON-NORTON COMPANY, INC. SCOTT W. THUMMA NO. 01-6500 EQUITY TERM CIVIL ACTION-IN EQUITY Certificate of Service I, Timothy A. Baker, Esquire, of Baker Law Finn LLC, 3110 East Market Street, Ste. E, York, PA 17402-2512 do hereby certify that the date set forth below, I served the following individual(s) the foregoing Pleading, by placing the same in the United States mail, postage prepaid to: John W. Purcell, Jr. PURCELL, KRUG & HALLER 1719 North Front Street Harrisburg, PA 17102 Attorney for Plaintiff Dated: ~.A ~ko\ Ti-mothy A. l~aker, Esquire 3110 East Market Street Suite E York, PA 17402 717-600-2900 Attorney for Plaintiff MASON-NORTON COMP2kNY, : INC., : Plaintiff : SCOTT W. THUMM3t, : Defendant : IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA 01-6500 EQUITY TERM CIVIL ACTION - IN EQUITY IN RE: PRELIMINARY INJUNCTION ORDER OF COURT AND NOW, this 27th day of December, 2001, upon consideration of Plaintiff's motion for temporary injunctive relief, and following a hearing, the record is declared closed, and the matter is taken under advisement. By the Court, John W. Purcell, Jr., Esquire 1719 North Front Street Harrisburg, PA 17102-2392 For the Plaintiff Stephen S. Makowski, Esquire 3110 East Market Street Suite E York, PA 17402 :mae V~NVA~NN~ ~JJtNO0 ,~b'V. LONO! cu3L'd :_:'H J. MASON-NORTON COMPANY, INC., Plaintiff SCOTT W. THUMMA, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - EQUITY NO. 01-6500 EQUITY TERM IN RE: PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION BEFORE OLER, J. PRELIMINARY INJUNCTION AND NOW, this 11th day of January, 2002, upon consideration of Plaintiff's motion for a preliminary injunction, following a hearing held on December 27, 2001, and for the reasons stated in the accompanying opinion, it is ordered, adjudged and decreed as follows: 1. Pending further order of court, Defendant is enjoined from continuing his present employment with Hostetter Supply Company, Inc., in violation of the covenant not to compete sub judice, for a period of one year from the effective date of this preliminary injunction. 2. This preliminary injunction shall become effective upon the posting of a bond or cash in the amount of $55,000.00, in accordance with Pennsylvania Rule of Civil Procedure 1531(b). 3. In the event the requisite bond or cash is not posted or deposited within 20 days of the date of this order, the order shall be deemed automatically dissolved. BY THE COURT, ~J'W;sley Ol~'Jr., J. John W. Purcell, Jr., Esq. 1719 North Front Street Harrisburg, PA 17102 Attorney for Plaintiff Stephen S. Makowski, Esq. 3110 East Market Street Suite E York, PA 17402-2512 Attorney for Defendant MASON-NORTON COMPANY, INC., Plaintiff SCOTT W. THUMMA, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COLrNTY, PENNSYLVANIA CIVIL ACTION - EQUITY NO. 01-6500 EQUITY TERM IN RE: PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION BEFORE OLER, J. OPINION and PRELIMINARY INJUNCTION OLER, J., January 11, 2002. This equity case arises out of an alleged breach by an employee of a covenant not to compete incident to his employment. For disposition at this time is a motion for a preliminary injunction filed by the employer, seeking preliminary enforcement of the covenant. A hearing on the motion was held on December 27, 2001. For the reasons stated in this Opinion, the motion for a preliminary injunction will be granted. STATEMENT OF FACTS The evidence presented at the hearing on Plaintiff's motion demonstrated the probability that Plaintiffwill be able to establish the following facts at trial: Plaintiff is Mason-Norton Company, Inc., an "S" corporation solely owned by George O. Preble, its president, and having its principal place of business at 310 South Tenth Street, Lemoyne, Cumberland County, Pennsylvania. Defendant is Scott W. Thumma, an adult individual residing at 509 Fifth Street, New Cumberland, Cumberland County, Pennsylvania. Plaintiff is in the business of selling commercial building products (e.g., windows, partitions and bathroom accessories) to contractors. The contractors, in turn, utilize the products in their construction projects. Plaintiff's sales to the contractors are generally on the basis of competitive bidding against other companies in the same business. Prior to 1992, the Mason-Norton Company was a partnership comprised of George O. Preble and his father, Herbert N. Preble; it became a sole proprietorship, owned and operated by George O. Preble, in 1992, and an "S" corporation, owned and operated by him, in 1998. Defendant joined the company as a salesperson on October 11, 19847 Incident to his employment, he executed the following covenant not to compete: As a condition of my employment with Mason-Norton Company, I hereby agree that, if for any reason I must seek employment elsewhere, that for a period of 5 years following the termination of my employment with Mason-Norton Company, I will not work for any other company, individual or myself in competition with the Mason-Norton Company or Herbert N. Preble, throughout the Commonwealth of Pennsylvania.2 Defendant left his employment with the company in 1988, and for about a year was employed as a seller of computer business forms. On September 20, 1989, he was rehired by the company. Again, incident to his employment he executed the following covenant not to compete: As a condition of my employment with Mason-Norton Company, I hereby agree that, if for any reason I must seek employment elsewhere, that for a period of 5 years following the termination of my employment with Mason-Norton Company, I will not work for any other company, individual or myself in competition with the Mason-Norton Company or Herbert N. Preble, throughout the Commonwealth of Pennsylvania.3 On May 31, 2001, Defendant voluntarily resigned from his position with Plaintiff as sales manager following an argument with its president, George O. Preble. An attempt by Mr. Preble to reestablish contact with Defendant after the argument was unsuccessful. 1 Plaintiff's Exhibit 1, Hearing, December 27, 2001 (hereinafter Plaintiff's Exhibit subsequently promoted to sales manager. 2 Plaintiff's Exhibit 2. 3 Plaintiff's Exhibit 4. ~. He was 2 Since June 15, 2001, Defendant has been employed by a competitor of Plaintiff, Hostetter Supply Company, Inc., primarily as a sales person, at an annual salary of $55,000.00 plus a bonus. The principal place of business of Hostetter Supply Company, Inc., is in York, York County, Pennsylvania, about 15 miles in distance from Plaintiff's principal place of business. The geographic area in which Plaintiff does business is primarily Pennsylvania and secondarily Maryland, New Jersey, New York, West Virginia and Delaware. The geographic area in which Defendant's present employer primarily does business is central Pennsylvania. According to testimony of Plaintiff's president, the average duration of Plaintiff's static relationship with contractors is five years. Plaintiff currently has sixteen employees, of whom only one is in sales. Its gross annual revenues total about $5,000,000.00. However, the net revenues of the company are modest.4 During his employment with Plaintiff, Defendant acquired special knowledge about Plaintiff's pricing structures and profit margins. The business in which Plaintiff and Defendant's present employer engage is highly specialized and highly competitive. The evidence supported the proposition that the restrictive covenant sub judice was appropriate to Plaintiff's reasonable business needs in terms of proscribed activity and geographic area, although the temporal extent of the restriction was, in the court's view, somewhat excessive. In the latter respect, however, the evidence more than supported the proposition that a period of at least a year was reasonable. DISCUSSION Statement of law. Several principles of law are of importance in the present context. First, with respect to preliminary injunctions, the standard has been stated as follows: According to Plaintiff's president, "[s]ometimes the state makes more money in sales tax than we do." 3 Three criteria have been established for the granting of a preliminary injunction .... They are: (1) the preliminary injunction must be necessary to prevent immediate and irreparable harm which could not be compensated for by damages; (2) greater injury would result from the denial of the preliminary injunction than from the granting of it; and (3) it would operate to restore the parties to the status quo as it existed prior to the alleged wrongful conduct. In addition to meeting all three criteria, the court must be convinced that [plaintiff's] right to a preliminary injunction is clear.., and general equity jurisdiction must be warranted. Comm. of Seventyv. Albert, 33 Pa. Commw. 44, 49, 381 A.2d 188, 190 (1977). The "purpose [of a preliminary injunction] is to preserve the status quo.., by restoring the last peaceable, noncontested status which preceded the controversy." Soja v. Factoryville Sportsmen's Club, 361 Pa. Super. 473, 477, 522 A.2d 1129, 1131 (1987). Second, where a preliminary injunction is issued, it must, as a general rule, be subject to the plaintiff's filing of Ia] bond in an amount fixed and with security approved by the court, naming the Commonwealth as obligee, conditioned that if the injunction is dissolved because improperly granted..., the plaintiff shall pay to any person injured all damages sutained by reason of granting the injunction and all legally taxable costs and fees, or [subject to the plaintiff's deposit].., with the prothonotary [of] legal tender of the United States in an amount fixed by the court to be held by the prothonotary upon the same condition as provided for the injunction bond. Pa. R.C.P. 1531(b). Third, with respect to covenants not to compete, it has been noted by Judge Hess of this Court that [c]ourts of equity will enforce.., covenants [not to compete].., when they are (1) incident to an employment relationship between the employer and employee; (2) reasonably necessary for the protection of the employer; and (3) reasonably limited in duration and geographic extent. $idco Paper Co. v. Aaron, 465 Pa. 586, 591, 351 A.2d 250, 4 257 (1976). When restrictive covenants meet this three-prong test, they are prima facie enforceable. Bettinger v. Carl Berke Associates, Inc., et al., 455 Pa. 100, 103, 314 A.2d 296, 298 (1974). Wood Co. v. Hickey, 40 Cumberland L.J. 511,514 (1990) (preliminary injunction issued); see Pennsel Communication Servs., Inc. v. DiCosimo, No. 01-2643 Civil Term (C.P. Cumberland July 9, 2001) (preliminary injunction issued); Computer Res. Assocs., Inc. v. Musselman, No. 93-0008 Equity Term (C.P. Cumberland March 16, 1993) (preliminary injunction issued). As a general rule, a covenant not to compete incident to employment will survive a change in form of the employer's business entity fi.om sole proprietorship to "S" corporation. See Seligman & Latz of Pittsburgh, Inc. v. Vernillo, 382 Pa. 161, 164, 114 A.2d 672, 673-74 (1955); Howe v. Anderson, 23 Pa. D. & C.3d 297, 301 (C.P. Adams 1982) Where unreasonableness of a covenant not to compete is an issue, the burden is upon the party asserting such unreasonableness to demonstrate it. John G. Bryant Co. v. Sling Testing and Repair, Inc., 471 Pa. 1, 12, 369 A.2d 1164, 1169 (1977) (issuance of preliminary injunction affirmed). Furthermore, an assessment of irreparable harm in the context of breach of a covenant not to compete is to be made with an understanding that "[i]t is not the initial breach of [the] covenant which necessarily establishes the existence of irreparable harm but rather the threat of the unbridled continuation of the violation and the resultant incalculable damage to the former employer's business." Id. at 7, 369 A.2d at 1167. "General covenants are reasonably limited if they are 'within such territory and during such time as may be reasonably necessary for the protection of the employer.., without imposing undue hardship on the employee.'" Jacobson & Co., Inc. v. Int'lEnv't Corp., 427 Pa. 439, 452, 235 A.2d 612, 620 (1967) (quoting Restatement of Contracts §516(f) (1932)). "What limits as to activity, geographical area, and time are appropriate in a particular case depends upon all 5 the circumstances." Restatement (Second) of Contracts §188, cmt. d (1981). The reasonableness of the temporal and geographic aspects of a restrictive covenant must be determined in light of the nature of the employer's interest to be protected. N. Am. Publ. Co. v. Bishop, 15 Phila. 448, 455 (1987) (citing Boldt Mach. & Tools, Inc. v. Wallace, 469 Pa. 504, 366 A.2d 902 (1976)). With regard to the geographic aspect of a covenant not to compete, "[t]he principle of customer-contact protection finds its expression in the general rule that the territorial restraint in a covenant not to compete will, generally speaking, be considered reasonable if the area covered by the restraint is limited to the territory in which the employee was able, during the term of his employment, to establish contact with his employer's customers." C,T. Dreschsler, Annotation, Enforceability of Restrictive Covenant, Ancillary to Employment Contract, As Affected by Territorial Extent of Restriction, 43 A.L.R.2d 94, 162 (1955). In appropriate circumstances, a covenant encompassing the area of an entire country may be upheld. See, e.g., Plunkett Chem. Co. v. Reeve, 373 Pa. 513, 95 A.2d 925 (1953) (upholding covenant encompassing the United States). "[W]hen fashioning an injunction to enforce a restrictive covenant, trial courts have broad powers to modify the restrictions imposed on the former employee to include only those restrictions reasonably necessary to protect the employer." All-Pak, Inc. v. Johnston, 694 A.2d 347, 350-51 (1997). Application of law to facts. In the present case, it appears clear that the covenant not to compete entered into was intended to encompass the activity being pursued by Defendant at his new employment. The covenant was incident to Defendant's employment relationship with Plaintiff, and has been shown for present purposes, at least to the extent provided for hereafter, reasonably necessary for protection of the employer. It further appears that the harm occasioned to Plaintiff by this breach and the threat of a continuation of the covenant's violation is immediate and irreparable as those terms are understood in this area of the law. A refusal to issue 6 a preliminary injunction would appear to carry more risk of harm than issuance of the injunction. Finally, issuance of a preliminary injunction in the present circumstances would operate to restore the parties to the status as it existed prior to the alleged wrongful conduct. For the foregoing reasons, the following preliminary injunction will be issued: PRELIMINARY INJUNCTION AND NOW, this 11th day of January, 2002, upon consideration of Plaintiff's motion for a preliminary injunction, following a hearing held on December 27, 2001, and for the reasons stated in the accompanying opinion, it is ordered, adjudged and decreed as follows: 1. Pending further order of court, Defendant is enjoined from continuing his present employment with Hostetter Supply Company, Inc., in violation of the covenant not to compete sub judice, for a period of one year from the effective date of this preliminary injunction. 2. This preliminary injunction shall become effective upon the posting of a bond or cash in the amount of $55,000.00, in accordance with Pennsylvania Rule of Civil Procedure 1531 (b). 3. In the event the requisite bond or cash is not posted or deposited within 20 days of the date of this order, the order shall be deemed automatically dissolved. BY THE COURT, John W. Purcell, Jr., Esq. 1719 North Front Street Harrisburg, PA 17102 Attorney for Plaintiff s/J. Wesley Oler, Jr. J. Wesley Oler, Jr., J. 7 Stephen S. Makowski, Esq. 3110 East Market Street Suite E York, PA 17402-2512 Attorney for Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW GEORGE P. PFALTZ, JR. MARIE KOVALICK Civil Action No.: 00-6500 Civil Term 2000 PRAECIPE TO THE PROTHONOTARY: Please mark the above-captioned matter settled, ended and discontinued. WAGMAN KREIDER & WRIGHT Plaintiff 222 E. Orange Street, P.O. Box 1522 Lancaster, PA 17608-1522 (717) 397-7000 S.Ct. ID. No.: 38022 CERTIFICATE OF SERVICE I hereby certify that I have this day served a tree and correct copy of the foregoing Praecipe upon the person set forth below and in the manner indicated: First class mail, postage prepaid: Brigid Q. Alford, Esquire Boswell, Timner, Piccola & Wickersham 315 North Front Street P.O. Box 741 Harrisburg, PA 17108-0741 Date: WAGMAN KREIDER & WRIGHT l~vid A. I~reid~er,4'A~0meys fo) Plaintiff 222 E. Orange Street, P.O. Box 1522 Lancaster, PA 17608-1522 (717) 397-7000 S.Ct. ID. No.: 38022 MASON-NORTON COMPANY, INC., Plaintiff : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA SCOTT W. THUMMA, Defendant No. 01-6500 Equity Term CIVIL ACTION - EQUITY PRAECIPE TO THE PROTHONOTARY: Please enter the appearance of Delano M. Lantz, James P. DeAngelo and McNees Wallace & Nurick LLC on behalf of Defendant, Scott W. Thumma. McNEES WAL~CE & NURICK LL, L,L~ ,, . By e ano M. Lantz ~ ) i.D. No. 21401 James P. DeAngelo I.D. No. 62377 100 Pine Street P.O. Box 1166 Harrisburg, PA 17108-1166 (717) 232-8000 Dated: January 28, 2002 Attorneys for Defendant CERTIFICATE OF SERVICF The undersigned hereby certifies that on this date a copy of the foregoing document was served by United States first-class mail, postage prepaid, upon the following: John W. Purcell, Jr., Esquire Purcell, Krug & Hailer 1719 North Front Street Harrisburg, PA 17102 Date: January 28, 2002 MASON-NORTON COMPANY, : INC., : Plaintiff : SCOTT W. THUMMA, : Defendant : IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA 01-6500 EQUITY TERM CIVIL ACTION - IN EQUITY IN RE: PRELIMINARY INJUNCTION Proceedings held before the HONORABLE J. WESLEY OLER, JR., J., Cumberland County Courthouse, Carlisle, Pennsylvania, on December 27, 2001, in Courtroom Number One. APPEAR3kNCES: John W. Purcell, Jr., Esquire For the Plaintiff Stephen S. Makowski, Esquire For the Defendant FOR THE PLAINTIFF George Preble REBUTTAL George Preble FOR THE DEFENDANT Scott W. Thumma Herbert Preble INDEX TO WITNESSES DIRECT CROSS REDIRECT RECROSS 4 28 33 -- 60 37 53 44 57 2 INDEX TO EXHIBITS FOR THE PLAINTIFF Ex. No. 1 Ex. No. 2 Ex. No. 3 Ex. No. 4 Ex. No. Ex. No. Ex. No. Ex. No. Ex. No. - W-4 form - noncompete agreement 1989 W-4 form - 1989 noncompete agreement 5 - letter 6 - letter 7 - letter 8 order record 9 letter MARKED 7 7 10 10 20 23 25 26 47 ADMITTED 37 37 37 37 37 37 37 37 59 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: This is the time and place for a hearing in the case of Mason Norton Company versus Thumma at number 01-6500 Equity Term. The hearing is on a motion for temporary injunctive relief filed on behalf of the plaintiff. We will let the record indicate that a representative of the plaintiff is in court, and that the plaintiff is represented by John W. Purcell, Jr., Esquire. The defendant is also present in court, and he is represented by Stephen S. Makowski, Esquire. Do counsel wish to make short opening statements or do you want to proceed directly to the evidence? MR. PURCELL: Your Honor, I would be happy to proceed directly into the evidence. MR. MAKOWSKI: That's acceptable. THE COURT: Ail right. Mr. Purcell. MR. PURCELL: Ail right. I would like to call my first, and actually my only witness right now, which would be George Preble. Whereupon, GEORGE PREBLE having been duly sworn, testified as follows: DIRECT EXA~4INATION BY MR. PURCELL: Q Would you state your full name and your 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 address, your business address for the record, please? A George O. Preble, 310 South Penn Street, Lemoyne, Pennsylvania. That's my business address. Q Okay. ~_nd that's the business address for the plaintiff, Mason Norton Company, Inc.? A Yes. Q Okay. What is your relationship to Mason Norton Company? A I'm the president and owner of the company. Q Are you a hundred percent stockholder? A Yes, sir. Q How long has the business been a corporation? A Since 1998. Q Okay. And prior to that date what kind of entity was the business? A partnership. Or sole proprietorship, beg A your pardon. Q Okay. proprietorship? A Q entity was it? A And for how long was Since 1992. Okay. And prior to 1992 what Q it a sole kind of It was a partnership. And as a partnership who were the partners? 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 correct? A Herbert Preble and George Preble. Herbert Preble was your father; is that A Yes, sir. Q Okay. Now, between the time it was a partnership to the time it was sole proprietorship to the time it was a corporation? A No, sir. Q The only thing that's changed is the entity, the business itself continued? A The business operates the same. Q Okay. The same employees? A Basically the same employees, yes. Q At the time that the business became a corporation, did it assume all the rights and liabilities of the previous entity? A It assumed all the rights and liabilities of the sole proprietorship. Q Okay. And then it continued seamlessly to conduct the same business as the corporate entity; is that right? A Yes, sir. Q And did that include the rights and obligations concerning the employees of the business? A Yes, sir. has the business changed at all a 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q Scott Thumma? A Yes, sir. Q Ail right. Okay. Are you familiar with the defendant, And was he an employee of Mason Norton Company? A Yes, sir. Q Can you give me first when he was first employed? Do you know? A I believe that was 1984. Q Okay. Do you know the first day that he -- his first day on the job, the first day he was hired? A I think he started to work around October the llth. (Whereupon, Plaintiff's Exhibits 1 and 2 were marked for identification.) BY MR. PURCELL: Q Prior to his first day at work on October llth, 1984, did Mr. Thumma make an application for the job? A Yes, sir. Q Was that sometime prior to October llth or was that contemporaneous with his starting employment? A That was on 9/25. So on September 25th of the same year? Yes, sir. Okay. And at the time that he applied for 7 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1 2 3 4 5 6 7 8 9 the job, did you have any discussions or was he told by the company whether he was going to be required to sign a noncompete agreement with the company? A Yes, sir. Q Okay. So when he first came to work then he had to fill out certain forms; is that correct? A That's correct. Q And one of those would have been the W-4 information for his employees withholding; is that correct? A Yes, sir. Q I'll show you what's been marked as Plaintiff's Exhibit 1. Is that a copy of the form that he filed on his -- or filled out on his first day of work? A Yes, sir. It is a W-4 form. THE COURT: Okay. May I ask a question? Is there any issue in the case as to whether the defendant was aware of the noncompete clause and whether it was incidental to his employment? MR. MAKOWSKI: Whether it was incidental perhaps. Whether he was aware, I don't believe is an issue. THE COURT: All right. I just thought we might be able to save a little time, but apparently it is an issue as to whether this clause was incidental to the employment. 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. was pled that way, with that, but I'm simply trying to lay a little ground work because the actual agreement after this, and this indicates -- will help with that issue. THE COURT: All right. that. PURCELL: Okay. I don't know that it Your Honor, so I don't know that I agree that was signed is dated if that is an issue, this MR. PURCELL: So we should probably clarify THE COURT: BY MR. PURCELL: Q Let me Plaintiff's Exhibit 2. agreement that Mr. A the W-4 form? A Q A Q work for you, talking about. Ail right. show you what's been marked as Is that a copy of a noncompete Yes, And when was that October the llth, Okay. Thumma signed? sir. signed? 1984. And that was signed the same day as Yes, sir. And it was also his first day on the job? Yes, sir. Now, subsequent to signing this and going to but prior to 1989 -- this is 1984 we're Prior to 1989 did he leave the company's 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 employ? be, no. A Yes, sir. Okay. And do you know when? I don't recall exactly when that date would Q Okay. Was he subsequently rehired though? Yes, sir. And do you know when that was? I believe the year was 1989. (Whereupon, Plaintiff,s Exhibit No. 3 was marked for identification.) BY MR. PURCELL: Q I'm going to show you what's been marked as Plaintiff's Exhibit 3, which is a two page document. Could you identify that for the Court, please? A Yes, sir. Our Exhibit Number 3 is the 1989 W-4 form that was signed by Mr. Thumma on 9/20/89. Q Okay. And I'll show you what's been marked as Plaintiff's Exhibit 4. Would you identify that? A Exhibit Number 4 is the agreement not to compete, and that was also signed on 9/20/1989. Q So when he came back to work for the company in 1989, he was required to resign the covenant not to compete, the noncompete agreement; is that right? A Yes, sir. 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 Q And did he continue to work after September 20th, 19897 sirens. he? for the company A Yes, sir, Is he still working there now? I didn't hear the question because of the Q I'm sorry. He's not working there now, is A Company now, that's correct. Q Can you hear me okay? A I'll try. Q All right. THE COURT: I talking about Mr. Thumma is not employed by Mason Norton were the record isn't unclear as to what the discussion was. MR. PURCELL: Yes. BY MR. suppose I should explain we the fire sirens outside the building so did he leave the company's employ for the PURCELL: Q So he's not presently working there. last time? Was he fired or did he voluntarily quit? A May the 31st of this year. Q Of 20017 A 2001. Q Okay. When 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Q Okay. Norton Company, Inc., quitting the job? He voluntarily quit. So he's not been employed by Mason since May 31st, 2001, as a result of That would be correct, sir. Ail right. Now, before we go any further, kind of business Mason A can you describe to the Court what Norton Company is? What kind of business does it do? A Yes. We're a niche kind of a business sells building products to the construction industry. that We are not like a Wal-Mart or a fast food chain where there's many, many businesses like those. We have our niche, and there are not many businesses like ours either in this area, in the state, or even in the United States. It's a very highly specialized business. Q All right. What do you sell, and who do you sell it to? Who are your customers generally? A We sell commercial building products to the commercial construction industry; aluminum windows, metal partitions, bathroom accessories, chalk and tack boards, all kinds of specialty items that you would find primarily in schools, churches, office buildings. Q Okay. THE COURT: We gather that you do not manufacture these? 12 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1 2 3 4 5 6 7 THE WITNESS: Sir, we do no manufacturing. We do a little manufacturing of visual display boards. THE COURT: But basically you're selling other people's products to contractors for use in the buildings the contractors are building? THE WITNESS: Yes, sir, that would be correct. THE COURT: Okay. BY MR. PURCELL: Q And effectively you're brokering between the manufacturer and the ultimate user of these goods; is that correct? a We're a manufacturer's representative. In many cases we represent the manufacturers on an exclusive basis. Q Okay. So you have exclusive contracts with some manufacturers? A Q your business bidding? A Yes, we do. Okay. Do you get much -- or does much of come through the process of competitive Yes. contractors who are bidding the project. supplier to the general contractor. Q All right. Now, are you We generally quote the general We're a material familiar with 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Hostetter Supply Company? A Would you repeat that, Mr. Purcell? Q Are you familiar with the Hostetter Supply Company? A Yes, sir. Where are they located? I believe they're located in York. And what kind of business are they in? In the same type of business that we're They actually supply materials to in. contractors on a competitive bidding basis similar to what you've just described? A Yes, sir. Q All right. Would you consider them a competitor of yours? A I would consider them a competitor of Mason Norton Company, yes. Q Do you find yourself on a regular basis competing for the same jobs? A Yes, sir. Q Okay. BY THE COURT: Q For the record, you're located in Lemoyne, Pennsylvania, in Cumberland County; is that right? A Yes, sir. 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q And Hostetter is located in York County; is that correct? A Yes, sir. Q And what is the distance approximately between the two businesses? A My guess would be 15 miles. THE COURT: Okay. Mr. Purcell. BY MR. PURCELL: Q Okay. The type of business you do, geographical location that you do your business, would that be? A surrounding Q Maryland? A Q A Q A Q A Q A Q Basically the State of and the where Pennsylvania and states. Adjoining states of Pennsylvania. Do you also do business in the State of Yes, sir. How about New Jersey? A little in New Jersey. How about New York? A little in the lower part of New York. West Virginia? West Virginia. Ohio? No, I wouldn't say too much in Ohio. Okay. So it's primarily in Pennsylvania 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 with a little bit in West Virginia and Maryland, and perhaps a little bit in New Jersey and New York; is that correct? A Q A Q your work for involve government contracts? a Government contracts. Q Schools, public buildings, A Yes, sir. Q Okay. And they are located all throughout the entire state, is that right? A Q I indicated to Delaware also. And Delaware also? Yes, sir. Okay. The type of jobs that you do much of things like that? and in those other states we mentioned; That would be correct. Okay. THE COURT: counsel, I'm sorry to interrupt, but as I have to be out of the courthouse for about 10 minutes and then I'll return. So if it's convenient we'll take a 10 minute recess and then we'll resume. MR. PURCELL: Ail right. (Whereupon, a recess was taken at 1:57 p.m.) AFTER RECESS (Whereupon, George Preble resumed the 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 stand.) oath. BY MR. THE COURT: Mr. Purcell. DIRECT EXAMINATION PURCELL: Q Okay. Mr. Preble, you are still under (cont ' d. ) Mr. Preble, we were discussing your business and Mr. Thumma. When Mr. Thumma worked for Mason Norton Company what was his position? A He was hired as a salesman. Q Okay. Did he continue as a salesman throughout the term of his employment? A He was subsequently elevated to sales manager of the company. Q Okay. So when he quit in 19 -- in this past May, was his position at that time as sales manager? A Q first of all, Yes, sir. Okay. And in his position of -- well, what were his responsibilities as salesman and sales manager? A His responsibilities were to sell to the general contractors. Q Okay. In his position as salesman and sales manager, did he learn information about the business, and specific to the business, your business, that would be helpful to any of his competitors -- to your competitors? 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Yes, he would definitely have information as far as the pricing structures are concerned and our profit margins. Q A Okay. Anything else? He would also have knowledge of people -- of exclusive manufacturers and other manufacturers that we deal with. Q Okay. If he was working for a competitor, could he use that information to outbid you on jobs in which you were mutually bidding on? MR. MAKOWSKI: Objection. if he THE COURT: On what ground? MR. MAKOWSKI: On the ground that it asks could use it. It's not a well-defined question. THE COURT: I'm sorry. I can't hear you. MR. MAKOWSKI: form of the question. THE COURT: What was wrong with the form? MR. MAKOWSKI: I'm going to object to the The form of the question. It's asking for an opinion. Purcell. asking for an opinion. the information that he THE COURT: An opinion. Okay. Mr. Do you have a response to that? MR. PURCELL: Well, I don't think it's I'm asking him if he knows whether learned from working could be used 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 to affect the bidding process. That's a statement of fact. THE COURT: overruled. BY MR. PURCELL: Q Okay. A Yes. That's not an opinion. The objection is noted, but You can answer the question. He would be aware of -- he would be aware of.our pricing structure and our percentages of profit. Q -- let's take a concrete example. Say you were -- Mason Norton was bidding on a particular job that Hostetter was also bidding on. How would the information he have be used to outbid you on that job? MR. MAKOWSKI: Okay. And how would that be used to affect Objection. This is conjecture, Your Honor. THE COURT: noted, but overruled. MR. PURCELL: THE WITNESS: All right. The objection is You can answer it. All right. There are some instances where we would buy from the same manufacturers. So if we bought from the same manufacturer that they bought from or they bought from the same manufacturer we bought from, and he's aware of what our pricing structure is, obviously he could underquote us. 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 BY MR. PURCELL: Q Okay. Now, as a broker of specialty building supplies do you have any exclusive sales contracts with manufacturers that you use to bid on the jobs? A Yes. Q Okay. Is Winco Windows -- that's W-i-n-c-o Windows one of those? A Yes, sir. Q Have you recently become aware of a situation where Mr. Thumma and his employer, Hostetter Supply, attempted to circumvent your exclusive contractual arrangement with Winco? A Yes, I am. Q I'll show you what's been marked as Plaintiff's Exhibit Number 5. Could you identify that? A Yes. This is a document that was written on Hostetter Supply Company letterhead to the Winco Window Company to the attention of Jack Hornsey and Lee Headrick. The letter is -- Q How did you obtain this letter? A I received a copy of this letter from Mr. Hornsey at Winco Window Company. Q And that's the company that you have the exclusive contract with; is that right? A Yes. Um-hum. 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q Pennsylvania; is that correct of Pennsylvania? A Well, Q Okay. A Just Q by Mr. Thumma; A Q signature, but sales/service; A And you are their representative in -- actually the greater area not entirely all Pennsylvania. in the general area that we cover. Ail right. Now, on the second paragraph of that letter -- now that letter appears to have been written is that correct? Yes. And actually it's not actually signed with a the end of the letter says Scott W. Thumma, is that right? Yes, it does. Q And that's a letter from Hostetter to Winco from Mr. Thumma, and on the second paragraph he -- and I'll read the sentence to you. It says both have steered away from Winco due to it's lack of service and hands on approach from it's current rep. Now when he's referring to the current rep, who is he referring to? A Mason Norton Company. Q Essentially he's telling Winco that they're current rep, Mason Norton Company, is guilty of a lack of service and a hands on approach? A Yes, sir. 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 What's the thrust of this letter? What is Q he trying to get from Winco in this letter? A I would say he's trying to get from Winco an opportunity to buy Winco Windows or outbuying them from Mason Norton Company. Q Okay. He's trying to circumvent the exclusive selling contract that you have? A Yes, sir. Q The representative contract you have with Winco? A Yes, sir. Q In the course of your dealings in the in the building -- specialty building supply have you had any feedback from suppliers or other that type of thing, concerning Mr. Thumma's business, business, contractors, employment? A Q Yes. And generally what have they -- what kind of feedback have you gotten? A Very negative about Mason Norton Company, and me personally. Q And specifically what's been said to you? Objection. On what ground? Hearsay. MR. MAKOWSKI: THE COURT: MR. MAKOWSKI: 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: Mr. Purcell. MR. PURCELL: Your Honor, -- I don't think it's classic hearsay. I'm not trying to I don't think it's hearsay at all. We're not offering any out-of-court statements for the purpose or proving the truth of the statement itself. We're offering the out-of-court statements for the purpose of proving that Mr. Thumma is malining the business, and saying negative things. We're not trying to prove that those negative things are true. We're trying to prove that the negative statements are being made. THE COURT: BY MR. PURCELL: The objection is sustained. Q You can't answer that one. Ail right. I'm going to show you what's been marked as Plaintiff's Exhibit Number 6. Would you identify that three page packet of documents for the Court, please? A Yes. It's a letter from Lobar Associates. Q And what is the essence of the letter? What is it? Why do we have that? A We have the letter because we had an order with Lobar Associates on the Central Penn Advanced Technology Building in Summerdale. Q And what is the date of the letter that they sent you? 23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A the essense. sheet, but the referring to; A Q A May 16th. Of this past year? May 16th of 2001. Ail right. And the second page seems to be The first page looks like it's a faxed cover second page is the letter that you're is that correct? Yes, sir. And that letter is addressed to who? The letter is addressed to Mason Norton Company to the attention of Scott Thumma. Q Ail right. And it references a job that Mason Norton Company was bidding on? A It represents a job that Mason Norton Company did bid on. Q Okay. At that time? A Yes. Q All right. And at that time Mr. Thumma was the sales manager involved in that bidding process? A Yes. Q All right. And does the letter indicate that you've been awarded the job? A Yes, sir, it does. Q It actually says the letter's to confirm Lobar Associates intent to award your trade portion for the 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 above-referenced project, and then talks about what you had to do in order to get to that point; is that correct? A Yes. Q So you had not actually received a purchase order from them at that point in time? You simply had a letter of intent; is that correct? A That would be correct. Q All right. Now, Mr. Thumma left your employ about two weeks later; is that right? A That would be correct. Q I'll show you what's been marked as Plaintiff's Exhibit 7, and I'll ask you to identify that letter. A Associates. Q A This is a letter that we received from Lobar The letter's dated July 12th, 2001. knd what does that letter inform you of? It informs us the -- this letter is to inform you that Mason Norton Company will not be providing product for the above referenced project. The owner has requested we use his supplier for this project. We apologize for any inconvenience that you have incurred for the submittal process. This in no means has any negative bearing on our business relationship with either -- with each other in the future. Q All right. Now, when it's referring to the 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 job project, had previously obtained a letter of to you? A Q are we talking about the same project that you intent to award the job Yes, sir. Do you know how much that job would have -- how much that job was? A The value of the job? Q Yeah. A My recollection was the vicinity of $10,000.00. Q All right. that it was somewhere in I'll show you a document which has been marked as Plaintiff's Exhibit 8. Perhaps you can take a look at that, identify that for the Court, and see if that refreshes your recollection. A The Exhibit Number 8 is a copy of our order record for that particular job. Q Does that indicate and refresh your recollection of how much the job was? A your profit A Q A Q Yes. The job was $11,910.00. Does it also indicate what you estimated to be on that job? Yes, sir. And what was that? $1,121.00. Now, if I understand Exhibit 7, the 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 contractor told you you're not getting that job, despite what they sent you previously? A Yes. Q And they told you that by a facimile dated July 12th, 20017 A That's correct. Q Did you check into find out exactly who that job was awarded to ultimately? A Yes, we did. And who was that awarded to? Hostetter Supply. Q Okay. Hostetter at the time A Yes, Q Now, And was Mr. Thumma working for that it was awarded to them? sir. Exhibit 4, Plaintiff's Exhibit 4, which is your noncompete agreement, talks about as a condition of employment having the employee agree that they will not seek employment with a competitor for a period of 5 years following the termination of employment with Mason Norton Company, correct? A Yes, sir. Q Is there a reason why 5 years was picked as opposed to some other time frame? A Well, we feel that over a too much of the business really changes. 5 year period not We deal with the 27 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 same manufacturers. The percentage of profit, same. Q We deal with the same contractors. the structure continues to be the So if you have a smaller number, like a two year or a three year period, that would not have been adequate to protect the interest of Mason Norton Company? A Especially in this business we do not feel that that's lonH enouHh. Q All right. MR. PURCELL: I have no other questions, Your Honor. BY MR. MAKOWSKI: THE COURT: Mr. Makowski. CROSS EXAMINATION Q Good afternoon, Mr. Preble. It's true that you and Hostetter Supply -- I'm sorry. I'll speak up. A You have to speak up, sir. I can't hear you. Q It's true that Mason Norton and Hostetter Supply solicit the same bids for contractors, correct? A Sir, I can't hear you. Q I'll just try to speak up. Is it true that Mason Norton and Hostetter Supply solicit the same bids for contractors? A Repeat that. 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Preble? Q Are you able to hear me now, Mr. TEE WITNESS: Go ahead. Did you not understand the question? THE COURT: Are you able to hear me, Mr. Preble? MR. MAKOWSKI: I don't mind moving if if I can stand over there. I'm afraid I won't be able to counsel has no objection, THE COURT: hear you either. BY MR. MAKOWSKI: Q That microphone should work. Are you able to hear me, That sounds better. Ail right. Just stop me if A Okay, Q It's Mr. Preble? I stray too far sir. true that Mason Norton and Hostetter correct? away. Supply solicit from the same contractors, A Yes. Q And that Mason Norton and Hostetter were in competition prior to Mr. Thumma working for Hostetter That would be correct. And that in this prior period you both same contractors Supply? A contracted -- or solicited bids from the on the same jobs at times? A Many times, yes. 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 Q The exhibits that are marked Plaintiff's Exhibit 2, and I believe it's 4, the agreement not to compete or the restrictive covenant, however you look at it, they're essentially the same document except for the date on there, correct? A That would be correct. Q Okay. When was Mason Norton incorporated? A When was Mason Norton Company incorporated? Q Yeah. A It was incorporated twice. Q Okay. A It was incorporated -- I believe it was incorporated when it first started some 49 years ago. Q Okay. Um-hum. I changed it to an S corporation in 1998, I A think it was. Q And it was your testimony earlier that the obligations and rights of the previous entity transferred to the new entity, correct? A Q all Yes, that's correct. Do you have any agreements, any signed agreements to that effect? A No. Q Specifically towards the restrictive covenants here, do you have any signed agreements on those? 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A No. Just the fact that everything was assumed by the corporation. Q Was new consideration given to the employees who had the restrictive covenant? A Beg your pardon, sir. Q Was anything given to the employees for the -- when this document was assumed by the new corporation? A No. Q Several of your employees have similar restrictive covenants, correct? A That would be correct. Q And you have attempted to enforce these covenants before, correct? A That's correct. Q And when you attempted to enforce them before, it was not upheld, correct? MR. PURCELL: Objection, Your Honor. I don't think what happened in the past is relevant to this situation. MR. MAKOWSKI: It is relevant in the fact that it is the same document. If one Court says that it was not upheld, it is the same document. MR. PURCELL: But it could have been for completely different reasons having nothing to do with the document itself, if, in fact, that were the case. 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: You're not talking about the same defendant? MR. MAKOWSKI: No, not the same defendant. THE COURT: The objection is sustained. BY MR. MAKOWSKI: Q You deal with manufacturers under exclusive contract, correct? A Yes. Q That means they are not allowed to supply to Hostetter Supply, correct? A I guess that would be correct, yeah. Q so if Hostetter Supply were bidding on the same job, they would not be able to use these manufacturers, correct? A That would be correct. Q And the price structure that you receive from these suppliers or these manufacturers is exclusive to Mason Norton Corporation, correct? A That would be correct, yeah. Q When Mason Norton is bidding on a contract, I guess it would be called, the price structures are not always identical on each job, are they? A don' t have There's no way for me to know that. Perhaps if I rephrase the question. a standard markup for every single job? You 32 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 no. A Every job does not have a standard markup, Q So that every job that you bid on is a separate independent job that you determine your profit structure independently, correct? A That probably is correct. MR. MAKOWSKI: I have no further questions. THE COURT: Mr. Purcell. MR. PURCELL: Just one or two just as a redirect, Your Honor. THE COURT: Sure. REDIRECT EXAMINATION BY MR. PURCELL: Q Other than Winco Windows, which we discussed earlier that you have an exclusive representative contract for, how many other contracts -- or how many other manufacturers do you have exclusive contracts with? A Probably -- including Winco, there's probably a total of about four. Q Okay. So you have the ability to be the exclusive representative for a windows manufacturer, and you have the exclusive ability to represent the manufacturing interest of at least three others; is that correct? A Yes. 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q Three other types of materials? Yes. All right. But you don't provide, and you don't bid on just four types of materials. You bid on numerous types of specialty building contracts, many of which are provided by manufacturers that you do not have an exclusive listing contract with; is that correct? A That would be correct, yes. Q All right. And in those circumstances, of course, Hostetter, as competitor, would be free to obtain pricing from the same manufacturers that you obtain from? A Yes, sir. Q And in many occasions on these competitive bidding contracts, the manufacturer of the product are specified in the contract, are they not? A That's correct. Q So you have to actually go to specific manufacturers if it's called for in the specs of a particular bid? A That would be correct. Q Okay. So the only thing that would be different in the circumstances like that would be the profit margin that you build into bid if both you and the competitor are going to the same manufacturer for the same product? 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A questions. That's correct. MR. PURCELL: Okay. I have no other THE COURT: Mr. Makowski. MR. MAKOWSKI: I have no recross. THE COURT: It would help me to have some idea of the size of the plaintiff. I don't know if we're dealing with something the size of General Motors that has thousands of operation. that MR. BY MR. PURCELL: Q Mr. employees or something that's a marginal So if counsel would ask a few questions on point it would help me. PURCELL: I'll be happy to. Preble, could you -- I guess let's start with the size of the business. What's a good measure of size of your business? Gross sales? Probably, yeah. Okay. measuring the A Q the last year? A Q A Q What roughly is your gross sales for Acceded five million. Five million dollars? Yes. And how many employees do you have to generate that type of gross sales? A There are 16, including our insulation 35 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 department. Q Okay. And in terms of net profits, can you roughly approximate what the business made over the last year? A that question. Q I would rather not divulge the answer to A A sales tax than we do. Okay. about the margin of profit? Can you tell mean is this a very competitive business? to make a dollar? It's very competitive. Okay. Sometimes the State makes more money in Honor? Then we won't go that far. How us roughly -- I Is it difficult MR. PURCELL: Okay. Does that help Your It helps. How many employees Currently there's one. Okay. Mr. Makowski, do you THE COURT: are sales people? THE WITNESS: THE COURT: have any questions along that line? MR. MAKOWSKI: No, Your Honor, I do not. THE COURT: Okay. You may step down. THE WITNESS: Yes, sir. Thank you. 36 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 witnesses. admission of the exhibits. MR. MAKOWSKI: THE COURT: Exhibits 1, 2, 3, 4, 5, 6, (Whereupon, were admitted.) call BY MR. MR. Scott Thumma. MR. PURCELL: Your Honor, I have no other The only thing I would do is move for the I have no objection. Ail right. Plaintiff's 7, and 8 are admitted. Plaintiff's Exhibits 1 through 8 THE COURT: Mr. MAKOWSKI: Makowski. Your Honor, I would like to having been duly sworn, Whereupon, SCOTT W. TMUMMA testified as DIRECT EXAMINATION MAKOWSKI: Q Good afternoon, Mr. Thumma. follows: Could you please just state your name and address for the record, Scott W. Thumma. I reside at 509 Fifth please? A Did you want the business address or home Street. address? Q That's fine. THE COURT: 509 Fifth Street. yet . Where do you currently work? Wait. We don't have an address 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 Pennsylvania. THE WITNESS: THE COURT: THE WITNESS: BY MR. MAKOWSKI: In New Cumberland, Okay. Thank you. Um-hum. 2001. Q Where are you currently employed? For Hostetter Supply Company, Incorporated. And when did you begin working there? I am going to say it would be mid June of Q Did you previously work for Mason Norton? Yes, I did. And when did you leave? It would be the very end of May, 2001, which I would approximate the 30th or 31st, in that time frame. Q Why did you leave? A I don't think the Court has two hours to hear it, but I'll be as brief as possible. I had -- and I'll cite two main reasons. In January of 2001 while riding with George Preble to a job site in Chambersburg, Pennsylvania, he had informed me that he could no longer afford me and the monies I was making at Mason Norton Company, Incorporated. He had informed me that he would understand if I would have to seek gainful employment 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 elsewhere. total service. Q the other one? That was quite a shock when you give 16 years You said there were two reasons. What was A The second reason, prior to my departure George had, after timeless episodes of citing myself as quite numerous reasons of problems going on with work and wishing for me to be out on the road more, calling on contractors more, to be a salesman, even going to the point of showing me a photocopy of what a salesman is and defined as, I asked George, do you or do you not wish me -- wish for me to be a part of Mason Norton Company. George Preble's exact words, I don't give a fuck. Q Is that when you quit? A I said not one more word. I didn't feel there was a need to say one other word. There was no employee of Mason Norton present during that confrontation. Q You heard Mr. job duties at Mason Norton. A Yes. Preble's description of your Would you agree with them? Your current employment with Hostetter, I'm doing multiple Q are you doing the same job? A Not the exact same job. facets of the business. Now instead of just selling a product to a general contractor, I have the ability to go 39 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 out quote general closing them, Q and review blue prints, to work up my own estimates, to contractors who were bidding projects, and and giving them service. You say that's at Hostetter you're able to work up your own estimates. Norton? A Q Did you do that over at Mason No, I did not. And at what point in the process is price structure and costs structure incorporated into a bid? A Well, as a general rule, as I found in getting together with Dave Hostetter and Hostetter Supply Company, Incorporated, the markups are very minimal to begin with. We follow up projects to find out where our price differentials would be job in and job out, and I have the ability to do that moreso now. However, with jobs the time list would fall within a comparable markup to what Mason Norton Company's would be. Very rarely in this industry can you go beyond 10 to 15 percent to begin with. Q I'm going to show you a document that's been labeled previously as Plaintiff's Exhibit 6. If I may, Certainly. If you could, Mr. Thumma, just please take Your Honor? THE COURT: BY MR. MAKOWSKI: Q 40 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 a look at that document and describe what it is, please. A It's a letter dated May 16th of 2001. Congratulations to Mason Norton on an intent to award a trade portion for the above-referenced project. The said name, Central Penn Advanced Technology Building, Summerdale, Pennsylvania. Q Okay. That's fine. Have you seen that document before today? A From my recollection, this particular job I was called and given a verbal order. As far as the hard copies of what's here. Q Mr. Thumma, I'm also going to show you a document that has been marked and admitted as Plaintiff's 7. Mr. Thumma, on that document there's a highlited section. Could you please read that section to the Court? A The owner has requested we use his supplier for this project. Q Hostetter Supply? A No, Q that project? A Does it indicate who that supplier is? No, it does not. Did you bid on that project on behalf of I did not. Do you know if Hostetter Supply did bid on Hostetter Supply originally bid the job at 41 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the time of the bid, which was Dave Hostetter. Q We heard Mr. Preble testify that Mason Norton does business in Pennsylvania and the surrounding states, including Maryland, New Jersey, New York, Delaware and West Virginia. Would you agree with those statements? A I would agree to Maryland. Central Pennsylvania -- or Pennsylvania, Maryland. Delaware, they had gotten into. I wouldn't really say too much at all in but, you know, if he's gotten any work there -- Where is Hostetter Supply's main area of New Jersey, Q business? A Our goal or our trajectory consists of Central Pennsylvania. Q When estimating for a bid on a particular project, which manufacturers -- strike that. How does one determine which manufacturers to use when estimating a bid? A Said manufacturers are listed in the written specifications, and we would want to utilize the specified manufacturer given a project to project basis. Q If you were using the same manufacturer for two different projects, would the profit structure on each of the jobs be identical on that product? A It really depends upon the volume of the product itself. It could fluctuate. Q Mr. Thumma, how long have you been working 42 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 in this field? A For 16 years. Q Have you worked for anyone -- have you had other types of employment during those 16 years? A Well, my brief departure from Mason Norton, had sold computer business forms for approximately a I year. Q Do you have any other employment currently? Yes, at Hostetter Supply Company. I mean outside the field. Oh, no, sir. I'm §oing to show you a document that's been labeled as Plaintiff's Exhibit 5. Mr. Thumma, that's already been identified. So if you can just describe that letter, not the actual details of it, but what was the purpose of that letter? A I had been contacted from several blazing contractors to -- and in particular this document here, a request from Zephyr Aluminum in Lancaster, Pennsylvania, who trades in not only Central Pennsylvania, but also Maryland and Delaware as well. Mason Norton Company's territory in as far as the overall outline of this area was Central Pennsylvania. This job, as you'll notice, is Cecil County, Maryland, which Winco already has an established rep. 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 Q To the best of your knowledge, Mr. Thumma, pricing and cost structure in this kind of business, are they something proprietary or are they standard throughout the industry? A It seems to fall within the standard of the industry, if you're fortunate enough to make over 15 percent on a job, God bless you, but it is a very competitive market, but from what I've seen over the years and years of following up projects, that we seem to fall right within the same realm of who we've lost to, with the somebody's made a tragic mistake on a exception of if project. Q When you were working for Mason Norton, are you aware of bids that were placed by Hostetter Supply? A Yes, when following them up with contractors that Mason Norton had bid to, yes, I was aware of Hostetter Supply. MR. MAKOWSKI: I have nothing further, Your Honor. THE COURT: Mr. Purcell. CROSS EXAMINATION BY MR. PURCELL: Q Mr. Thumma, in your experience you have 16 years working in this building specialties field; is that correct? 44 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A That is correct. Q And all of that, with the exception of recently, you gained through your employment with Mason Norton Company, correct? A That is correct. Q So everything you know about the business, you learned by working for Mason Norton Company, correct? I would say I learned an awful lot myself A too. Q Okay. While working for Mason Norton only because you were in a position of working in that particular job? A That's all I've ever known. Q And you agree, I believe, that Hostetter and Mason Norton Company are competitors for the same jobs, correct? A Q That is correct. Now, this letter that you sent to Winco, which has been marked as Plaintiff's Exhibit Number 5, was a request to obtain a pricing for Zephyr Aluminum; is that correct? A Q That is correct. And Zephyr Aluminum is within the representative geographical area for Mason Norton Company, are they not? 45 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A -- that's not The project was in Cecil County, Maryland. But that was -- that's not the answer to my the question I asked you. I asked you if Zephyr Aluminum was within the geographical location in the exclusive contract they had with Winco? A I would say yes and no if THE COURT: THE WITNESS: Aluminum trades in Central I could answer it. Sure. Yes in the fact that Zephyr Pennsylvania for Pennsylvania bids. I was attempting to bid a project in Cecil County, Maryland, not Central Pennsylvania. BY MR. PURCELL: Q Now, this letter you sent to Winco was after you had previously attempted to obtain quotations from Winco, and they had sent you a letter telling you that you through the appropriate representative; needed to do that is that correct? A Q Exhibit 5, Lancaster, That is correct. And according to the exhibit -- Plaintiff's the request came from Zephyr Aluminum out of Pennsylvania; is that correct? If you look at page 3 of that A Yes, a project, and as you can see on the -- the third page of that exhibit. Yes and no, if I could answer it that way. it was faxed from Lancaster, Pennsylvania's office for -- on Zephyr's cover 46 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 letter, the project was Cecil Community College Education Center located in Cecil County, Maryland. You can further see their office that they would work that out of would be the Baltimore area office. Q Where does it say they would work that out of the Baltimore area office? A As you can see, they're transmitting offices of Baltimore Maryland, Lancaster, Pennsylvania, and Wilmington, Delaware. Q But it doesn't indicate there that they're going to work that out of the Baltimore office, does it? A I would only assume that a job in Cecil County, territory. Q Plaintiff's Exhibit Number 9. letter? A Q Maryland would be not in Mason Norton Company's I'll show you what's been marked as Do you recognize that Yes, I do. Now, that's the letter that we just talked about a minute ago that you had received prior to sending the letter on December -- or I'm sorry, on September 13th. It's Plaintiff's Exhibit 5. Is that A Q a letter from Winco; right? That is correct. And Winco sent that letter to you. is that correct? That's 47 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 A That is correct. Q And in that letter they're responding to your interest in obtaining information and pricing information about windows; is that right? A That is correct. Q And they tell you any business you wish to do with Winco Window Company must be directed through the appropriate rep? A That is correct. Q And despite receiving that you sent them this letter two days later that's marked as Exhibit 5; is that right? A Correct. As you'll also note though, John, the appropriate rep -- project in Cecil County, Maryland is not in Mason Norton Company's territory. Q Well, were you trying to -- is what you're saying is you were trying to get pricing from Winco in contravention of different reps exclusive listing contract or Mason Norton's contract? A A price from the appropriate rep for that said given job in Cecil County, Maryland. Q well, you were actually trying to circumvent any rep; is that correct? Winco? MR. MAKOWSKI: You were going directly to I'm going to object to that. 48 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 It's beyond the scope. THE COURT: overruled. BY MR. PURCELL: Q A It's not relevant. Your objection's noted, but You can answer that. Well, it was always my understanding with the Winco Window Company that they had said given reps for territorial areas. A lot of the representatives that are out beyond Mason Norton Company's area would be granted commissional monies, which usually would encompass approximately five to six percent. My thought was on a job in Cecil County, Maryland I still might stand a chance of competing even with the appropriate rep in Cecil County, Maryland, with their six percent plus whatever I would quote that project at. Q Well, when you went to Winco with your letter of September 13th and you told them that both have steered away from Winco due to it's lack of service and hands-on approach from its current rep, what current rep were you referring to? The one down in Maryland? A The two blazing contractors I have mentioned letter that informed me that they were no longer in the interested in dealing with Mason Norton. Q Mason Norton Company in Bedford? Are those 49 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the two reps? A Q Your Honor. Honor. that Correct. Okay. MR. PURCELL: I have no other questions, MR. MAKOWSKI: I have no redirect, Your THE COURT: Ail right. One of the issues I would have to consider if I do issue a preliminary injunction is the question of the amount of the bond to be required from the plaintiff, and to that end it would be helpful to me to know what sort of salary the defendant would be losing if he did have to leave his present job. Your Honor. MR. MAKOWSKI: I can question him on that, THE COURT: BY MR. MAKOWSKI: Q Mr. Thumma, as to your present salary? Ail right. can you please A $55,000.00 a year. Q Is that a strict salary? bonuses? Commissions? A It's a salary. additional bonus at Christmas Q inform the Court Do you receive There would be an time paid weekly. Is there any other income from this 50 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 employment that we should be made aware of? that. Thank you. A No, sir. MR. MAKOWSKI: THE COURT: MR. PURCELL: THE COURT: THE WITNESS: MR. PURCELL: Thank you, Mr. Thumma. Mr. Purcell. I have no questions about Okay. You may step down. Thank you. Your Honor, I may have some rebuttal confer with my client. THE COURT: Mr. Makowski, conclude the defendant's case in chief? MR. MAKOWSKI: Actually, no, Your Honor. THE COURT: Okay. Go ahead. MR. MAKOWSKI: I would like Herbert Preble, please. testimony, if I may have a two minute break to does that it does not, to call Mr. MR. PURCELL: I would like an offer of proof, if I may, Your Honor. MR. MAKOWSKI: Your Honor, the offer of proof is such that Mr. Preble, according to Plaintiff's 2 and 4, was the President of Mason Norton Company as it's listed on the letterhead. It was for his benefit that the 51 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 questioned documents were -- came into being. It was Mr. Preble himself who drafted the document. I think it's relevant as to his intent and his understanding of these documents at the time that they were executed. THE COURT: MR. PURCELL: me then what he's offering Okay. Mr. Purcell. Well, Your Honor, it seems to is parole evidence that's attempting to modify or explain a contract which is not ambiguous on it's face. I think you can read the contract very clearly. It says what it says. Unless there's some allegation that it's ambiguous, I don't think there's anything in the pleadings indicating that. I think, you know, the four corners of the document, you can tell what it says without necessarily having somebody come in and interpret it for you. I think that's outside the realm of the witnesses purview. MR. MAKOWSKI: I disagree that it is obvious on it's face. Several factors, including employment for any other company, individual or myself in competition. Nowhere in this document is competition defined. It specifically lists myself as part of the excluded parties, so to speak. I think that it -- because these terms are undefined, I think Mr. Preble's opinion and his understanding of this document is very important. 52 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: Ail right. testimony over objection. Whereupon, HERBERT PREBLE having been duly sworn, testified as follows: DIRECT EXAMINATION I'll permit the BY MR. MAKOWSKI: Q Good afternoon, Mr. Preble. Can you hear me okay? A Yes, I can. Please state your name and address for the record. A My name is Herbert M. Preble. My address is 508 Indiana Avenue, Lemoyne, Pennsylvania. Q Thank you, Mr. Preble. Can you identify who drafted the documents that are listed as Plaintiff's 2 and 4. Let me show you one if I may, Your Honor. MR. PURCELL: Your Honor, may I have a standing objection if we're going to -- THE COURT: No. If you want to object, you should actually make the objection. It's too confusing for me to consider that there's an objection to everything that So if you feel there's something just make the objection at that time. PURCELL: Again, I don't see the might be asked. objectionable, MR. 53 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 relevancy in this situation. You're offering parole evidence. Who drafted the agreement is only relevant if you're dealing with an ambiguous document in which you're trying to construe against the drafter. I don't necessarily think we're circumstances. trying to do that under these THE COURT: Mr. Makowski. MR. MAKOWSKI: Well, I've already addressed the fact that I believe myself the document is ambiguus based on it's plain language, and as such, I just need to -- we're not trying to construe it against the drafter but merely determine what the drafter had intended to achieve with this document, and because it is arabiguous I think that it becomes relevant. MR. PURCELL: Your Honor, it's nice to say it's ambiguous, but where's the ambiguity? I think counsel must point out where the ambiguity is. MR. MAKOWSKI: I believe I already have in competition. In competition. How do you define competition? Would it be anybody that makes money? Would it be anybody that sells supplies? Would it be anybody that is a manufacturer? Can a manufacturer go directly to these people and bid themselves? You would not say the manufacturer is in competition with a broker. So I think the fact that there is vague language in there to that 54 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 extent is critical. MR. PURCELL: Well, you're asking the witness to make -- to give an opinion as to the ultimate question here, which is something that I think the Court has to do. That's the Court's responsibility, to determine what competition is, and whether the two businesses we're alleging here are in competition with each other. If there's factual questions concerning that, that's one thing, but to have someone give an opinion as to whether they're in competition or not, whether that was their intention when it was drafted, God knows how many years ago, I think is definitely outside the purview of this. THE COURT: I'll permit the testimony without binding myself to a ruling on whether the language is ambiguous or not. I'll have to take a look at it later on. BY MR. MAKOWSKI: Q Mr. Preble, I've just handed you two documents labeled as Plaintiff's 2 and Plaintiff's 4. The body of those A Q A documents, can you tell me who wrote that? Yes, sir. I wrote it. And when did you write it? I wrote it many years ago when I was the 55 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 President of Company. Q A the original corporation of Mason Norton And why did you write it? I wrote it because at that time I had a pretty well going business, and four people left me and went into business for themselves, and it bothered me so that I felt that at least I wanted other people to feel that they should stay with me and not walk off the job or if they did at least not to go into business against me. Did you ever enforce that agreement against Q anyone ? A Q I never did personally, no. Was it your understanding that that is a binding contract? A My understanding was that document it was not a binding contract -- MR. PURCELL: THE COURT: Objection. Now wait. That's not admissible. There is an objection to that opinion, and that's certainly objectionable. MR. MAKOWSKI: Was that objection sustained, Your Honor? further. THE COURT: Yes. MR. MAKOWSKI: Okay. I have nothing 56 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: Mr. Purcell. CROSS EXAMINATION BY MR. PURCELL: Q Mr. Preble, at the time that you were the president of the Mason Norton Company, and during the years that you were involved with Mason Norton Company, which I understand ended in about 1992; is that correct? A interests aside from the Mason Norton Company; correct? A Q Yeah, I would say it was about then, yeah. Okay. You also had other business is that Yes, I did. Okay. So when there's language in there talking about being in competition with Mason Norton Company or Herbert M. Preble, you were referring to all of your business interests; is that correct? A Not necessarily. That was written on Mason Norton Company paper. Q Okay. So your intention then, you're saying, is that it was to prevent employees from competing with the Mason Norton Company? A I wanted them to think -- I know I couldn't prevent them because I had had some experience before with noncompetitive clauses in contracts. Q You wanted them to think twice about leaving 57 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 you. Is that what you're saying? That is correct. And what you're saying, if I understand correctly, is you had no intention of ever enforcing this? A I never had any intention of enforcing it. Q All right. And when the employees were asked to sign it, did you tell them, I never have any intention of enforcing this. I just want you to think about it? A asking them to sign them except initially, Q Okay. MR. PURCELL: Honor. Honor. Honor. I never -- frankly, I wasn't the one who was not afterwards. No other questions, Your MR. MAKOWSKI: I have no redirect, Your THE COURT: MR. MAKOWSKI: You may step down. Thank you. The defense rests, Your THE COURT: Okay. Mr. Purcell, do you want a brief recess? MR. PURCELL: Two minutes. THE COURT: Certainly. Did you want to move for the admission of Plaintiff's Exhibit 9? MR. PURCELL: Yes. 58 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Mr. Purcell. Exhibit 9. 9 is admitted. admitted.) THE COURT: Before we forget to do that, MR. PURCELL: I would move the admission of MR. MAKOWSKI: I have no objection. THE COURT: Ail right. Plaintiff's Exhibit (Whereupon, Plaintiff's Exhibit No. 9 was THE COURT: We'll take a short recess. MR. PURCELL: Okay. Thank you. (Whereupon, a recess was taken at AFTER RECESS THE COURT: Mr. Purcell. MR. PURCELL: Your Honor, 3:20 p.m.) just on rebuttal I have a couple questions to ask my client. THE COURT: Sure. MR. PURCELL: THE COURT: (Whereupon, THE COURT: state your name again, please? THE WITNESS: Yes, O. Preble. It shouldn't take too long. We're not in any rush. George Preble was recalled.) Just for the record, would you sir. My name is George THE COURT: And, Mr. Preble, you are still 59 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 under oath. BY MR. THE WITNESS: Yes, sir. THE COURT: Mr. Purcell. DIRECT EXAMINATION PURCELL: Q George, Scott previously testified that there were two reasons why he left your employ in May of 19 -- or 2001. The first reason he gave was something to the effect of a trip he took with you where you told him you couldn't afford him, and you said you would understand if he sought employment elsewhere. Did that occur? A The trip occurred. Q Could you tell the Court what happened during that trip? A During that -- prior to that trip Mr. Thumma was on an hourly rate of pay, by the hour, plus time and a half overtime when he worked overtime. On that trip I discussed with Mr. Thumma the fact that I was going to put him on a salary basis. He was a sales manager of the company, and he was in the capacity of supervision because there was another salesman in the company, and I told him at that time that he would be put on salary. Q Did you tell him that you couldn't afford him and that you would understand if he sought employment elsewhere? 60 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A No, sir, I never told him that. Q Okay. The second item he indicated was you had some kind of a -- apparently some kind of an argument, and he asked whether you wanted him to leave and you, using an expletive, told him you didn't care essentially. Is that how it occurred? A I did not put it in those terms. I put it in the terms that I didn't give a crap what he did, but I sure didn't use the four letter word. Q Okay. And what was the argument about? I mean what were you discussing? A Well, it was precipitated by the fact that Mr. Thumma continued to get in order files and do expediting work when that was not what he was hired to do, and that was not what he was supposed to do. His job was to be the salesman of the company. The expediting part of the business was my responsibility, and he continued to do that time and time again when I asked him not to do that. Q Okay. And you had discussions and perhaps arguments about the same subject matter in the past? A Q argument s ? A Q Yes, sir. And he didn't leave after any of those That's correct. Okay. And this time he just walked out; is 61 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that correct? A Q He just walked out. Ail right. Did you attempt to contact him afterwards to patch things up? A I made an attempt that Friday evening. Q And that was the Friday that it happened; is that correct? A Q A him? I'm not sure whether it was the 31st. Okay. But that Friday you tried to call I think it was on a Friday, right, because I sit down and discuss the a run around, run around, made an attempt from ten minutes after five until about a quarter of nine calling his home constantly to say let's situation, and all I got was just run around, until his wife finally came on and answered the telephone and just ripped me for about 45 minutes. you wouldn't believe it. MRS. THUMMA: put my husband through. THE COURT: MR. PURCELL: THE COURT: MR. MAKOWSKI: I have no THE COURT: Ail right. Ripped me up and down the street, That's because of the hell you Go ahead, Mr. Purcell. I have no other questions. Okay. Mr. Makowski. cross. 62 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 BY THE COURT: Q the second time, with Mr. Thumma? A Q When the company became a corporation for did you have a new employment contract No, sir. But his checks started coming from a corporation instead of from the proprietorship? A Well, the proprietorship -- when I sole proprietor all of the contracts, agreements, A A checks, right. was the all the responsibilities of the sole proprietorship was assumed by the corporation while it was made into an S corporation. As the sole proprietorship I was the sole proprietor, and as the S corporation I'm the president, the owner, the secretary, as allowed by law. Q But the checks, I assume, started coming from the corporation? The checks that were written by the company? For salaries? Yes, they would have been corporation THE COURT: Okay. You may step down. Thank you. THE WITNESS: MR. PURCELL: THE COURT: Thank you, sir. Nothing further, Your Honor. Mr. Makowski. 63 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. I just may have a THE COURT: Ail right. of proof here would be on the Plaintiff MAKOWSKI: I have nothing further. If few moments for closing. I guess the burden so why don't I hear from Mr. Makowski first. Do you have any cases on whether a covenant not to compete is either enforceable or not enforceable when a succeeding entity has become the employer? MR. MAKOWSKI: Let me see if it's how you worded it, Your Honor. THE COURT: I gather if you do they would be in your memorandum. MR. MAKOWSKI: Yes, it is in the memorandum. I don't believe it addresses the exact specific issue you're looking for, but there is case law cited in there, and that would be our opinion. THE COURT: Okay. of your argument. MR. MAKOWSKI: Go ahead with the rest Well, Your Honor, in this case the restrictive covenant is, in our opinion, invalid in many, many different ways. First of all, just on it's face it says for a term of 5 years, and in the entire state of Pennsylvania. Now, I feel -- we feel that that is too broad as far as the geographic location and the time period. 64 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 You've heard testimony from the plaintiff himself that said that not much changes in the corporation in five years. Therefore, it sort of self defeats the purpose of the restrictive covenant if it's going to be nothing changing in one year or five years or ten years or fifteen years. The purpose of having a restrictive covenant and a noncompetition clause has gone away. As far as the entire State of Pennsylvania, I believe, again, that geograhic location is just far, far too broad. In fact many companies solicit bids within the State of Pennsylvania, and many companies bid on those bids. You've heard testimony that Hostetter Supply has been in competition with Mason Norton for years. Mason Norton has won contracts. Hostetter has won contracts. There's been nothing shown here that anything was the action of Mr. Thumma. If the Court chooses to believe the one item that was shown, the one contractor with the profit of $1100.00 roughly, again, that is one, though you've heard uncontroverted testimony that Mr. Thumma had nothing to do with that contract. The second point on that, Your Honor, in a temporary injunction the plaintiff needs to show irreparable injury, and that there's no adequate remedy at 65 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 law. In this case even if the Court were to believe that this injury -- that the $1100.00 in profit was the cause of Mr. Thumma, that is not an irreparable injury. That is available to the plaintiff when the case proceeds to full trial. The purpose of a temporary injunction is to go back to the status quo prior to. Now, it's been 6 months roughly since Mr. Thumma has left the employ of Mason Norton and has begun working with Hostetter, and in that time they produced one contract in the amount with a profit of $1100.00. There's really no immediate irreparable harm that we would seek to refrain from based on what we've seen here today. Also, Your Honor, in granting an injunction the Court should consider the harm -- the relative harms, the harm to the plaintiff if the injunction is not granted versus the harm to the defendant if it is granted. The harm to plaintiff even if the Court agrees with what was shown here today, is $1100.00. To Mr. Thumma it's his livelihood. a family. any sort of livelihood. at trial, He has A wife and a family to support, and in imposing injunction at this time would rob him of his Even despite the fact that should he prevail trial may not be any time soon. Further, the plaintiff is required to show that the right to remedy is clear or that they have a 66 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 reasonable expectation to prevail. shown here. It's been, you know, another man's word, essentially. The bottom line is, That has not been one man's word against Your Honor, in this case what they're seeking is relief based upon contracts. Contracts that Hostetter and Mason Norton very well could have been -- or bid for together before Mr. Thumma left. They will be bidding on contracts even if Mr. Thumma should be prevented from working. Some of those contracts will go to Mason Norton. Some of those will go to Hostetter. There's been no indication -- you've heard testimony that the pricing structure there is industry standard. In fact, there's been no proprietary secrets revealed. On the one hand you've heard that they have exclusive manufacturers, but then on the other hand that they're just dealing with manufacturers who supply to anybody. In that case the cost structures are identical. Also, Your Honor, as far as the agreement not to compete, the business corporate entity has changed its status. It has changed into a different entity. There's been no -- any sort of assignment agreements or any sort of reaffirmation. There's been no extra consideration given to employees in order to enforce this. In short, Your Honor, I find -- I think that the restrictive covenant is just too broad, and for the 67 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 reasons that enforce it. Purcell. I cited unenforceable, and we ask that you not THE COURT: Ail right. Thank you. Mr. MR. PURCELL: Your Honor, this is an equity action so obviously we're asking for equitable relief. The equity relief we're asking for is an injunction to be imposed against the defendant for working for a competitor in compliance with the agreement that he signed when he took his employment twice. When he took his employment twice with this company. Restrictive covenants are enforceable if they are incident to the employment relationship between the parties. The restrictions imposed by the covenant are reasonably necessary for the protection of the employer. That's reasonably necessary and not absolutely necessary. And restrictions imposed are reasonably limited in duration and geographic. That pretty much summarizes the case law involving noncompete agreements. The Court has the ability, if it feels that the geographical extent of the covenant and the time -- temporal limitations are too excessive the Court does have the ability to modify that so that it's reasonably limited to protect the interest of the employer. In this case I don't necessarily think 68 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 there's any occasion that needs to be made if you have an aHreement that for five years basically to just compete with Mason Norton Company, Mason Norton Company has put on testimony where that interest is. That's Pennsylvania primarily, partially in Maryland, and the outlining states, but primarily Pennsylvania. So the geoHraphical location would be simply not to compete with Mason Norton Company in their same localities. He could certainly work for the company and compete elsewhere. He doesn't have to compete in Pennsylvania or Maryland. Now, as far as the injunctive relief is concerned, there is no adequate remedy of law. It is impossible to figure out what jobs we're getting and what jobs we're not getting based on information that the defendant takes from one company to the other and uses to obtain business for his new employer. That really literally is impossible to figure out. The would entail Hetting into the minds of all the contractors who award the contracts that they all bid on. It would entail getting into the minds of the contractors who purchased their services without a competitive bidding process. It literally would be impossible. And then to quantify that would be even more impossible because you'd have to figure out what the profits are in each and 69 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 every one of those jobs, and you would have to do it on a continuing basis for the next -- for the rest of Mr. Thumma's life probably, if he continues to work there, at least during his working life or the working life of the corporation. So that is why equity approves of the use of the equity side of the court to obtain injunctive relief to -- I lost the word. My vocabulary fails me. Anyway you get the point. THE COURT: MR. PURCELL: Certainly. The last thing that I will mention, Your Honor, is on the question -- I don't think there -- I did some research on this. I drafted a brief. I thought if the Court wanted a brief at some point I would be happy to provide one, but I did do some research on it, and I did not see any case law that said that you needed a new contract of employment when the underlying entity of the corporation changed with every single employee. And on top of that the plaintiff came in and testified that the corporation assumed all the rights and obligations of the previous entity when it took over the business. The business continued seemlessly along. I think that's sufficient proof. There's nothing that requires a written document assigning a right to a contract from one entity to the other. 70 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 As the owner of the company, the sole owner of the company, he certainly has a right to verbally say to himself, if he had to, I hereby assign my rights to the -- all the interest in this company to the corporation. He doesn't need to have it in writing to make it effective. So you don't need to do that, and he testified that, in fact, that is what happened. The corporation assumed all of his responsibilities. It's an informal process with himself, but that's how it works. I don't think there is any case law out there that says that we have to have a new contract every time you do this. What the case law does say is that you have to have a contract. It has to be supported by consideration. Either in the beginning of the employment you have to have consideration of the employment itself or if you've already started work, you have to have additional consideration. In this case the consideration was his employment. He started a job. He knew that it was a condition of his employment, and it states on the agreement itself that as a condition of his employment he needs to agree to this noncompete provision. It's the only thing he was ever asked to sign other than the federal forms or W-4's. So it obviously was important to the business, notwithstanding 71 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 what Mr. Preble, Sr., testified to. It's binding. It's enforceable. I think all of the requirements under the law have been met, and I think an injunction -- at this point in time a temporary injunction is appropriate. THE COURT: Ail right. What I'll do is take the matter under advisement. Before we adjourn, I would be remiss if I did not note that there was an outburst in the courtroom earlier, and I chose not to exercise the powers that the Court has when such an event occurs, but I would ask counsel to exercise their good offices to be sure that when people leave the courtroom today there are no incidents, and that no further incidents occur of that sort. I realize the emotions run high and it's difficult, but we can't conduct court in that atmosphere. And we'll enter this order: AND NOW, this 27th day of December, 2001, upon consideration of Plaintiff's motion for temporary injunctive relief, and following a hearing, the record is declared closed, and the matter is taken under advisement. (End of order.) THE COURT: Very nicely presented by both counsel. There's some interesting legal issues, and I'll try to have an order entered within the next week or so. MR. PURCELL: Thank you, Your Honor. 72 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3:48 MR. MAKOWSKI: Thank you, Your Honor. THE COURT: Court is adjourned. (Whereupon, the proceedings concluded at 73 CERTIFICATION I hereby certify that the proceedings are contained fully and accurately in the notes taken by me on the above cause, and that this is a correct transcript of same. Official Court Reporter The foregoing record of the proceedings on the hearing of the within matter is hereby approved and directed to be filed. Date J. Wesley O1~_~, Jr. ,~-J~ //~Ninth Judicial Distric 74 r3uk ,~., ..... C:OUNI'Y PENNSYb/ANIA IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA JACOB R. SHANK a/k/a PETE SHANK, an individual, VS. Plaintiff, PATRICIA J. STERLING, an individual, Defendant. PLAINTIFF'S MOTION CIVIL ACTION - LAW NO. 01-6530 CIVIL FOR SUMMARY JUDGMENT AND NOW, comes the Plaintiff, Jacob R. Shank a/k/a Pete Shank {hereinafter referred to as "Shank"), by and through his counsel, Gates, Halbmner & Hatch, P.C., and makes the following motion for summary judgment against Defendant, Patricia J. Sterling: 1. Shank instituted the present action by filing a Complaint with this Court on November 19, 2001 and alleging, inter alia, that defendant was unjustly enriched. 2. Defendant was served, by hand delivery, with a copy of the Complaint and a Notice to Defend by the Cumberland County Sheriff's Office on November 20, 2001. 3. On or about December 12, 2001, Defendant filed an Answer with New Matter in response to Shank's Complaint. 4. Shank filed an Answer to Defendant's Answer with New Matter with this Court on December 20, 2002. 5. As a result of the foregoing, the relevant pleadings are closed. 6. Shank alleges, inter alia, in ins Complaint that Defendant has received significant labor and materials, at considerable effort and expense to Shank. 7. Shank alleges, inter alia, in his Complaint that Defendant appreciated the aforementioned services provided by the Plaintiff. 8. Shank alleges, inter alia, in his Complaint that Defendant wrongfully secured or passively received a benefit under such circumstances that it would be unconscionable to retain it without payment. 9. Defendant admits that Shank conferred significant benefits upon Defendant. Answer p. 1, ¶3 8~ Answer p. 5, ¶ 32. 10. Defendant admits that Defendant appreciated the benefits conferred upon Defendant. Answer p. 5, ¶ 33. 11. Defendant admits that Defendant accepted and retained the benefits provided by Shank. Answer p. 5, ¶ 34. 12. On December 28, 2001, Shank served, inter alia, Requests for Admissions upon the Defendant. A true and correct copy of which is attached hereto as Exhibit "A." 13. On or about January 22, 2002, Shank received the Defendant's Answers to Plaintiff's Request for Admissions. A true and correct copy of which is attached hereto as Exhibit "B." 14. Defendant admitted outfight thirty (30) of the forty-three (43) requests for admissions regarding the fact that Shank conferred numerous and significant benefits upon Defendant and that Defendant appreciated or realized those benefits. See Exhibit "B." 15. Defendant admitted-in-part an additional three (3) of the forty-three (43) request for admissions regarding the fact that Shank conferred numerous and significant benefits upon Defendant and that Defendant appreciated or realized those benefits. See Exhibit "B." Shank i~ not related to the Defendant by blood or mamage. See attached Exhibit 16. As the Defendant has admitted, Shank conferred upon and Defendant appreciated and accepted significant benefits over the limited period of approximately one and one-half (1 V2 ) years. 2 Answer p. 1, ¶ 3. 18. Defendant admits that no compensation or consideration has been paid to Shank in return for the significant benefits conferred upon the Defendant by Shank. Answer p. 4, ¶ 23. 19. The admitted facts indicate that Defendant has passively received a benefit under such circumstances that it would be unconscionable to retain it without payment. 20. As a result of Defendant's substantial admissions, there is no genuine issue of any material fact regarding Shank's allegation of unjust enrichment. WHEREFORE, Plaintiff, Jacob R. Shank a/kIa Pete Shank, respectfully requests that the Cou~t enter an order granting Plaintiff's Motion for Summary Judgment and entering Judgment against the Defendant, Patricia J. Sterling and in favor of Plaintiff, Jacob R. Shank a/k/a Pete Shank in the amount of eighteen thousand forty and 89/100 ($18,049.89) dollars, plus costs, attorney fees and additional interest accruing during the pendency of this action. Respectfully submitted GATES, HALBRUNER & HATCH, P.C. Albert N.~Pet~lin, l~s~l~ir~ L/o ' I Attorney I.D. No. 84180 1013 Mumma Road, Suite 100 Lemoyne, PA 17043 (717) 731-9600 (Attorneys for Plaintif0 3 CERTIFICATE OF SERVICE I, Albert N. Peterlin, Esquire, hereby certify that a true and correct copy of the foregoing Motion for Summary Judgment, has been served upon the following counsel of record by first class mail, postage prepaid, addressed as follows: James G. Morgan, Jr., Esquire Tucker, Arensberg & Swartz 111 North Front Street P.O. Box 889 Harrisburg, PA 17108-0889 GATES, HALBRUNER & HATCH, P.C. AIb'~rt N.~eterlin} E~q~r~ Attorney for the Plaintiff EXHIBIT "A" IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA JACOB R. SHANK a/Wa PETE SHANK, an individual, VS. Plaintiff, PATRICIA J. STERLING~ an individual, Defendant. CIVIL ACTION - LAW NO. 01-6550 CIVIL REQUEST FOR ADMISSIONS OF THE PLAINTIFF ADDRESSED TO THE DEFENDANT PLEASE TAKE NOTICE that the Defendant, Patricia J. Sterling is required, pursuant to Pa. R. Civ. P. 4014, to serve upon the undersigned an original of Defendant's answers in writing and under oath, to the following requests for admissions within thirty (30) days aider the service of this document. A. GENERAL INSTRUCTIONS 1. The General Instructions set forth in Plaintiff, Jacob R. Shank's Interrogatories of the Plaintiff Addressed to the Defendant are incorporated by reference as though set forth fully at length herein. B. DEFINITIONS 1. The Definitions set forth in Plaintiff, Jacob R. Shank's Interrogatories of the Plaintiff Addressed to the Defendant are incorporated by reference as though set forth fully at length herein. REQUESTS FOR ADMISSIONS 1. Plaintiffpaid the purchase price of the 1992 Cadillac automobile for the Defendant. 2. Defendant agreed to repay Plaintiffthe amount of the purchase price of the 1992 Cadillac automobile. 3. Defendant obtained possession of a certain garage door part necessary to repair said garage door. 4. Plaintiff paid for the item(s) referenced in the previous paragraph. 5. Defendant obtained possession of a certain new garage door or garage door opener for Defendant's personal residence within the past two (2) years. 6. Plaintiff paid for the item(s) referenced in the previous paragraph. 7. Defendant obtained possession of a certain range stove affixed in Defendant's personal residence within the past two (2) years. 8. Plaintiff paid for the item(s) referenced in the previous paragraph. 9. Defendant obtained possession of certain window blinds and related materials affixed in Defendant's personal residence within the past two (2) years. Plaintiffpaid for the item(s) referenced in the previous paragraph. Plaintiffinstailed the item referenced in Paragraph 8 in Defendant's personal 10. 11. residence· 12. Defendant obtained certain maintenance and repairs of Defendant's 1992 Cadillac automobile. 13. Plaintiff paid for the services referenced in the previous paragraph. 14. Defendant obtained possession of certain painting materials within the past two (2) 15. Plaintiff paid for the item(s) referenced in the previous paragraph. 16. Plaintiff painted certain rooms of Defendant's personal residence with the materials referenced in Paragraph 13. 17. Defendant obtained possession of certain stone materials for the exterior of Defendant's personal residence within the past two (2) years. 18. Plaintiff paid for the item(s) referenced in the previous paragraph. 19. Plaintiffaffixed the item(s) referenced in Paragraph 16 to the exterior premises of Defendant's personal residence. 20. Defendant obtained possession ora certain fence on the property of Defendant's personal residence within the past two (2) years. 21. Plaintiff paid for the item(s) referenced in the previous paragraph. 22. Defendant obtained possession of certain concrete materials regarding a concrete foundation on the property of Defendant's personal residence for a utility shed. 23. Plaintiffpaid for the item(s) referenced in the previous paragraph. 24. Plaintiff poured the concrete foundation for the construction of a certain utility shed upon Defendant's personal residence. Plaintiff erected a certain utility shed upon the property of Defendant's personal 25. residence. 26. Defendant obtained possession of certain landscaping materials for the borders and edging of the property of Defendant's personal residence. 27. Plaintiffpald for the item(s) referenced in the previous paragraph. 28. Defendant obtained possession of certain maintenance materials utilized for the maintenance of Defendant's personal residence within the past two (2) years. Plalntiffpald for the item(s) referenced in the previous paragraph. Defendant obtained possession of certain decorative stone materials within the past 29. 30. two (2) years. 31. 32. Plalmiffpald .for the item(s) referenced in the previous paragraph. Plaintiff affixed the item(s) referenced in Paragraph 29 to the premises of Defendant's personal residence. 33. Defendant obtained possession of certain blacktop materials applied to the driveway of Defendant's personal residence within the past two (2) years. 34. Plaintiff paid for the item(s) referenced in the previous paragraph. 35. Defendant obtained possession of a certain garbage disposal installed in Defendant's personal residence within the past two (2) years. Plaintiff paid for the item(s) referenced in the previous paragraph. Plaintiff installed the item(s) referenced in Paragraph 34 in Defendant's personal 36. 37. residence. 38. Defendant obtained possession of a certain water system installed in certain investment real property of the Defendant within the past two (2) years. 39. Plalntiffpaid for the item(s) referenced in the previous paragraph. 40. Plaintiffinstalled the item(s) referenced in Paragraph 37 in certain investment real property of the Defendant. 41. Defendant obtained possession of certain insulation materials installed in 4 Defendant's personal residence within the past two (2) years. 42. 43. residence. Plaintiff paid for the item(s) referenced in the previous paragraph. Plaintiff installed the item(s) referenced in Paragraph 40 in Defendant's personal GATES & ASSOCIATES, P.C. Date: By: .~ib~t N. P~tirlin, Es~quire - Attorney for Plaintiff, Jacob R. Shank CERTIFICATE OF SERVICE I, Albert N. Peterlin, Esquire, hereby certify that a tree and correct copy of the foregoing Request for Admissions of the Plaintiff Addressed to the Defendant, has been served upon the following counsel of record by first class mail, postage prepaid, addressed as follows: James G. Morgan, Jr. · TUCKER ARENSBERG & SWARTZ 111 North Front Street P.O. Box 889 Harrisburg, PA 17108-0889 GATES & ASSOCIATES, P.C. DATED: Albert N~ ~eteriin~ Es~'~ir~ Attorney for the Plaintiff EXHIBIT "B" JACOB R. SHANK a/k/a PETE SHANK, an Individual, Plaintiff VS. PATRIClA J. STERLING, an Individual, Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 01-6530 CIVIL JURY TRIAL DEMANDED DEFENDANT'S ANSWERS TO PLAINTIFF'S REQUEST FOR ADMISSIONS Admitted. It is admitted that Plaintiff paid the purchased price of the 1992 Cadillac automobile. Denied. It is specifically denied that Defendant agreed to repay Plaintiff for the purchase of the1992 Cadillac automobile in the amount of $6,000.00 and/or any other monetary amount. Denied. It is denied that Defendant obtained possession of a certain new garage door part necessary to repair said garage door. Admitted. It is admitted that Plaintiff paid for a serviceman to come to the house in order to determine why the garage door wasn't working. It was determined that Plaintiff left a broom in front of the electronic garage door eye which caused the garage door not to open and/or close. Once the serviceman removed the broom, the garage door began to work. o 10. 11. Admitted. It is admitted that Defendant obtained a certain new garage door or garage door opener for Defendant's personal residence within the past two (2) years. Admitted. It is admitted that Plaintiff offered to pay and paid for the new garage door or garage door opener. Admitted in part and Denied in part. It is admitted that Defendant obtained possession of a certain range stove. However, it is denied that the certain range stove was affixed in Defendant's personal property within the past two (2) years. The certain range stove was affixed in Defendant's rental property. Admitted. It is admitted that Plaintiff offered to pay and paid for the new certain range stove. Admitted in part and Denied in part. It is admitted that Defendant obtained possession of certain window blinds affixed in Defendant's personal residence within the past two (2) years. It is denied that Defendant obtained possession of related materials affixed in Defendant's personal residence within the past two (2) years. Admitted. It is admitted that Plaintiff offered to pay and paid approximately $90.00 in the Spring of 2001 for certain window blinds affixed in Defendant's personal residence within the past two (2) years. Defendant can not answer said request as stated. 2 12. Admitted. It is admitted that Defendant obtained certain maintenance and repairs of Defendant's 1992 Cadillac automobile. 13. Admitted. It is admitted that Plaintiff offered to pay and paid for certain maintenance and repairs of Defendant's 1992 Cadillac automobile. 14. Admitted. It' is admitted that Defendant obtained possession of certain painting materials within the past two (2) years. However, it is unknown by Defendant as to the specifics and quantity of those certain painting materials. 15. Admitted. It is admitted that Plaintiff offered to pay and paid for certain painting materials within the past two (2) years. 16. Denied in part and Admitted in part. It is specifically denied that Plaintiff painted certain reoms of Defendant's personal residence with the materials referenced in paragraph 14. However, it is admitted that Plaintiff did paint the kitchen ceiling and only the kitchen ceiling of Defendant's personal residence. 17. Admitted. It is admitted that Defendant obtained possession of certain stone materials for the extedor of Defendant's personal residence within the past two (2) years. 18. Admitted. It is admitted that Plaintiff offered to pay and paid for certain stone materials for extedor of Defendant's personal residence within the past two (2) years. 19. Defendant can not answer said request as stated. 3 20. Admitted. It is admitted that Defendant obtained possession of a certain fence on the property of Defendant's personal residence within the past two (2) years. 21. Admitted. It is admitted that Plaintiff offered to pay and paid for the certain fence on the property of Defendant's personal residence within the past two (2) years. 22. Admitted. It is admitted that Defendant obtained possession of certain concrete materials regarding a concrete foundation on the property of Defendant's personal residence for a utility shed. 23. Admitted. It is admitted that Plaintiff offered to pay and paid for the certain concrete materials regarding a concrete foundation on the property of Defendant's personal residence for a utility shed. 24. Admitted. It is admitted that Plaintiff poured the concrete foundation for the construction of a certain utility shed upon Defendant's person residence. By way of further answer, prior to Plaintiff pouring the concrete foundation, Defendant previously had a stone foundation area prepared for the utility shed that Plaintiff did not like and changed it to the concrete foundation. By way of further answer, Defendant assisted Plaintiff with poudng the concrete foundation for the utility shed. 25. Admitted. Plaintiff with the assistance of Plaintiff's friend, erected a certain utility shed upon the property of Defendant's personal residence. 4 26. Admitted. It is admitted that Defendant obtained possession of certain landscaping materials for the borders and edging of the property of Defendant's personal residence. 27. Admitted. It is admitted that Plaintiff offered to pay and paid for certain landscaping, materials for the borders and edging of the property of Defendant's personal residence. 28. Neither Admitted nor Denied. It is neither admitted nor denied that Defendant obtained possession of certain maintenance materials utilized for the maintenance of Defendant's personal residence within the past two (2) years. As such, Defendant can not truthfully admit nor deny the allegation. 29. Neither ^dmitted nor Denied. It is neither admitted nor denied that Plaintiff paid for maintenance materials. As such, Defendant can not truthfully admit nor deny the allegation. 30. Admitted. It is admitted that Defendant obtained possession of certain decorative stone materials within the past two (2) years. 31. Admitted. It is admitted that Plaintiff offered to pay and paid for certain decorative stone materials within the past two (2) years. 32. Defendant can not answer said request as stated. 33. Admitted. It is admitted that Defendant obtained possession of certain blacktop materials applied to the driveway of Defendant's personal residence within the past two (2) years. 5 34. Denied. It is specifically denied that Plaintiff paid for certain blacktop materials applied to the driveway of Defendant personal residence within the past two (2) years. By way of further answer, Plaintiff went down the street and obtained a free wheel barrel full of blacktop from a business laying blacktop and brought it back to Defendant's personal residence to fix a 2 by 4 foot hole in the driveway. 35. Admitted. It is admitted that Defendant obtained possession of a certain garbage disposal installed in Defendant's personal residence within the past two (2) years. 36. Admitted. It is admitted that Plaintiff offered to pay and paid for a certain garbage disposal installed in Defendant's person residence within the past two (2) years. 37. Defendant can not answer said request as stated. 38. Admitted. It is admitted that Defendant obtained possesion of a certain water system installed in certain investment real property of the Defendant within the past two (2) years. 39. Admitted. It is admitted that Plaintiff offered to pay and paid for a certain water system installed in certain investment real property of the Defendant within the past two (2) years. 40. Defendant can not answer said request as stated. 6 41. Admitted. It is admitted that Defendant obtained possession of certain insulation materials installed in Defendant's personal residence within the past two (2) years. 42. Admitted. It is admitted that Plaintiff offered to pay and paid for certain insulation materials installed in Defendant's person residence within the past two (2) years. 43. Admitted. It is admitted that Plaintiff installed certain insulation materials in Defendant's personal residence within the past two (2) years. Dated: January ~ 2002 46274.1 Respectfully submitted, TUCKER RE I ~ ~R~~/~SWARTZ Ja r~es/G':~ Morgan,/J r/, Esquire Attom~'l.D. No. 1~,/897 111 I~rth Front Street Harri{~burg, PA 17101-0889 (717) 234-4121 7 VERIFICATION I, Patricia J. Sterling, verify that the facts stated in the foregoing document are true and correct to the best of my knowledge, information and belief. I understand that any false statements made to this verification are subject to the penalties of 18 Pa. C.S.A. §4904, relating to unswom falsification to authorities. 46280.1 t~a~cia J. Sterling~ CERTIFICATE OF SERVICE AND NOW, this ~/~-day of December, 2001, I, Cathleen A. Kohr, for the firm of Tucker Arensberg & Swartz, attorneys for Defendant, hereby certify that I have this day served Defendant's Response to Plaintiff's Request for Admissions by causing a copy of the same to be placed in the United States Mail, First Class, postage prepaid, at Harrisburg, Pennsylvania, addressed as follows: Albert N. Peterlin, Esquire GATES & ASSOCIATES, P.C. 1013 Mumma Road, Suite 100 Lemoyne, PA 17043 Cathleen A. Kohr EXHIBIT 66C99 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA JACOB R. SHANK a/k/a PETE SHANK, an individual, VS. Plaintiff, PATRICIA J. STERLING, an individual, Defendant. CIVIL ACTION - LAW NO. 01-6530 CIV1L : : : : : : AFFIDAVIT OF JACOB R. SHANK COMMONWEALTH OF PENNSYLVANIA COUNTY OF CUMBERLAND I, Jacob R. Shank, being duly sworn according to law, hereby depose and say as follows: 1. I am not related to Patricia J. Sterling by blood or marriage. R. Shank ' Sworn to and subscribed before me this day of February, 2002 Notary Public