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HomeMy WebLinkAbout08-5554 RITE AID HDQTRS. CORP. and RITE AID CORPORATION, Plaintiff, vs. MADISON ONE ACME, INC. d/b/a SOLSTICE MEDICINE COMPANY, Defendant. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. a$ - ? Civil wrm COMPLAINT JURY TRIAL DEMANDED NOTICE TO DEFEND You have been sued in court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this complaint and notice are served, by entering a written appearance personally or by attorney and filing in writing with the court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the complaint or for any other claim or relief requested by the plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 Telephone: (717) 249-3166 I RITE AID HDQTRS. CORP. and RITE AID CORPORATION, Plaintiff, vs. MADISON ONE ACME, INC. d/b/a SOLSTICE MEDICINE COMPANY, Defendant. COMPLAINT JURY TRIAL DEMANDED COMPLAINT Plaintiff Rite Aid HDQTRS. CORP. and Rite Aid Corporation (collectively referred to herein as "Rite Aid"), by their undersigned attorneys, file this Complaint and allege as follows: PARTIES 1. Rite Aid Corporation is a Delaware corporation with its principal place of business at 30 Hunter Lane, Camp Hill, Cumberland County, Pennsylvania 17011. 2. Rite Aid HDQTRS. CORP. is a Delaware corporation with its principal place of business at 30 Hunter Lane, Camp Hill, Cumberland County, Pennsylvania 17011 and is the administrative contracting entity for Rite Aid Corporation. 3. On information and belief, defendant Madison One Acme, Inc. d/b/a Solstice Medicine Company ("Solstice") is a California corporation with a principal office at 215 W. Ann Street, Los Angeles, California 90012. JURISDICTION 4. This court has jurisdiction pursuant to 42 Pa.C.S. §931(a). 5. Venue in this Court is proper because the cause of action arose in IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. Cumberland County, a transaction or occurrence took place out of which the cause of action arose in Cumberland County and the parties' agreed that any disputes with respect to the parties' Guaranteed Sales Agreement would be venued in the Court of Common Pleas of Cumberland County. RELEVANT FACTS 6. Rite Aid operates drug stores in multiple states and has its headquarters and corporate offices in Cumberland County, Pennsylvania. 7. At all times relevant to this Complaint, Solstice was involved in the distribution of Ice Taps, a cough soothing medicine. 8. In April 2006, Solstice became a new vendor at Rite Aid and began to sell its Ice Taps in Rite Aid stores. A true and correct copy of the New Domestic Vendor Information Form ("New Vendor Form") Solstice signed is attached as Exhibit A. 9. In April 2006, Rite Aid and Solstice entered into a Guaranteed Sales Agreement in which Solstice guaranteed the sale of its product and agreed that Rite Aid could return any unsold product to Solistice for cash payment. A true and correct copy of the Guaranteed Sales Agreement is attached to this Complaint as Exhibit B. 10. Solstice also entered into a Rite Aid Returns Agreement providing a method for the return of any damaged, defective, outdated or discontinued product. A true and correct copy of the Rite Aid Returns Agreement is attached as Exhibit C. 11. In 2008, Rite Aid decided to discontinue the sale of Ice Taps because of slow product sales. 12. Despite guaranteeing the sale of its product and agreeing to accept, and pay for, the return of unsold products, Solstice has refused to accept the return of its product or provide cash payment to Rite Aid for the unsold product for which Rite Aid paid. -2- 13. As of September 19, 2008, Solstice's account reflects a $36,060.06 negative balance based on charges that Solstice agreed to including advertising allowances, markdowns, unsaleable product and other vendor charges. 14. Additionally, Rite Aid is still holding over $250,000 worth of product that it seeks to return. 15. As of the date of the filing of this Complaint, Solstice is in breach of its agreement with Rite Aid because it refuses to pay Rite Aid the negative account balance and the cash payment for the unsold product. 16. As of the date of the filing of this Complaint, Solstice is in breach of its agreement with Rite Aid because it refuses to accept the return of the unsold product. COUNT 1 BREACH OF CONTRACT Rite Aid vs. Solstice 17. Rite Aid incorporates the averments in paragraphs 1 through 16 above as if fully set forth herein. 18. As noted above, in April 2006, Rite Aid and Solstice entered into an agreement as evidenced by the New Vendor Form, the Rite Aid Returns Agreement and the Guaranteed Sales Agreement pursuant to which Solstice agreed to various vendor charges and guaranteed the sale of its product. 19. As of September 19, 2008, Solstice has a negative account balance of $36,060.06 and Rite Aid seeks to return over $250,000 of additional product. 20. Despite repeated requests, Solstice refuses to pay the negative account balance to Rite Aid or to accept and pay for the return of its product. 21. Rite Aid has performed all conditions precedent under all agreements under the account. -3- 22. Solstice is in breach of its contract with Rite Aid because it has failed to pay the negative balance on its account and to accept and pay for the product that Rite Aid seeks to return. 23. As of September 19, 2008, Rite Aid has suffered damages in excess of $286,060.06 due to the breaches of Solstice. WHEREFORE, Rite Aid requests judgment in an amount in excess of $286,060.06, plus interest, costs and all other amounts deemed appropriate by the Court. COUNT II UNJUST ENRICHMENT Rite Aid vs. Solstice 24. Rite Aid incorporates the averments in paragraphs 1 through 23 above as if fully set forth herein. 25. In the event Solstice contends no contractual relationship exists, Rite Aid is entitled to recover the outstanding amounts to prevent Solstice from being unjustly enriched. 26. Rite Aid has a reasonable expectation to be paid the negative balance and for the unsold product it is currently holding. 27. Rite Aid has no adequate remedy at law. 28. Rite Aid is entitled to collect the outstanding balance, plus interest, from Solstice under the doctrine of unjust enrichment. -4- WHEREFORE, Rite Aid requests judgment in its favor and against Solstice in an amount in excess of $286,060.06, plus interest, costs and all other amounts deemed appropriate by the Court. Respectfully submitted, Date: September 19, 2008 tER Downey (PA 60327) Weber (PA 89266) HAMILTON LLP Suite 200, 100 Market Street P.O. Box 1181 Harrisburg, PA 17108-1181 Phone: 717.255.1155 Fax: 717.238.0575 Email: downeyb@pepperlaw.com weber] g@pepperlaw.com Attorneys for Rite Aid Corporation and Rite Aid HDQTRS. CORP. -5- ® COrPoratlon C Vendor Name: O Madison One Acme, Inc. dba Solstice Medicine O Vendor Nn- 221 Cpoate Address: 1043 Cear E Chavez Ave. CI , State, Zin Los A ks, CA 90033 Fede M: rel Employer I. D. o? ••^?--- V C O U €0 F w A a Ot aC O N C .0 O. U 0 W 2%30 Net 31 wsonal Payment Terms: (if applic") YOU Sall to other retailers or wholesalers at a lower cyst payments must be sent to our corporate lock box at: YOU use a factor for accounts receivable t You sell / manufacture private label Products? Yea [3 No 0 New Domestic Vendor Information :jp".1043 Cesar E Chavez Ave. 0. Box 1403 Cesar E Chavez Ave. rear.: trW or eee T flls Now St" Asowanow 18% off kow PO Payment Terms: 2% tip Net lit that offered to Rile Aid? Yes Rite Aid Corporation No Attn: P.O. Box 3185 HaMsburg, PA 17105 Yes ED If Yes, Factors No M Name: Address: ------------- exclusive brand products will be tested for 00MIlance with Rib Aids standards before it Is added to a product mix. Vendors will pay for this V at a PredebrmYed rate set by RMs Aid prior to lestlng. VwKW will not change formula or method of marxdact rs tlMthg, wNftotd r written approval from Rite Aid. after Capable: base Order Aid, at 43 sob discradon, may coftw to lest eWWW lebal Items as deemed necessary to ensure contktued comPNarxe with Rib Aids hsrnenb. Vendor am required to pay for dtk t"N. no more than once every 15 months (or more if complaints are received). P Change Maintenance rent Remittance rct Movement sat Data Yes © No ? Yes Q No ? Yes Q No ? Yes © No ? Yes ? No Q Yes ? No Q Yes ? No ? Yes ? No Yes ? No be directed la 010 601, EC DOR-nent at Planned ? Data Planned Planned ? Dab Planned Planned ? Date Planned Planned ? Date Planned Planned ? Data Planned Planned ? Date Planned Planned © Date Planned 1-Jan-07 Planned ? Date Planned Planned ? Date Planned -3a" a E-Man at edi@olg rd.com. EDI i EC Program gwdes are also available Page 1 of 5 ® COrporadon 1W C i7 O r. C Q vt Is. al Z t` 'a a :e C IL a New Domestic Vendor Information Continued hipping Address: (Provide a separate roan for any additbnal bcatbru. ) ddress: 1043 Cesar E Chavez Ave. Vendor Freight Albwanoe (applied against gross purchases) i fy, State, Zip Los Anpeies CA 90033 Amount Collect Prepay X Individual Store P.O. Bulk one 323.221.8180 nntad Candace Fu Method or Payment Off Invoice Preferred; Iciness: If other. attach rate specifying reason. Vendor Freight Allowance (applied against gross purchases) Y. State, Zip Amount Collect Prepaid Individual Store P.O. Bulk Dne: Dne: Method of Payment Off Invoice prWerrad: bass If other, attach note specifying reason. Vendor Freight Alowance (appled against gross purchases) State, Zip Amount Cdlact Prepaid Individual Store P.O. Bulk M: tact, Method or Payment OR Invoice preferred; -- If other, attach note specifying reom Coded Merchandise base Order UOM: Check here to signify you have reviewed the web Site Supplier CompllancNShippkhg Instructions: r Level: Yee r or No r minimum Order: Yes or No r Minimum Order: fng UOM: Level. Yes r or No r minimum order. Yes or No r minimum order: Note: Charges may be assessed for non-UPC merchandise (See Rite AN SuPPAIer t:ornpNence Manes/ end Rite Aid Web S1b). Page 2 of 5 Paae 3 of 5 Corporation KM Corporation Page 4 of 5 Rzp Corporation C sA New Domestic Vendor Information Aid Damaged d Outdated Product D/spospyon Agreement must complete the RNs Aid Damaged 3 Outdated Product Disposition Agreement (refer to e Sales Agreement • New Vendors i Sessonal Maehandfse only :hand/se Recall Dh posffyon Agreement Mills must be completed uUk tp a copy of or Indemnftaden Agreement must cornDkete the Vendor Imdamnlar'9ttnn Using Terra: allowance comporant must be expressed as a separate item not in con)unctlon with any other component.) Each component Is mutally lye of all other programs. Co-op Funding (see enclosed) B The following Funding amounts are over and above the Annual Revolution It Funding commitment noted above. DB Shelf Displays Yes No _ $ % (based on gross purchases) 31rgte Check Rebels Ful ibneMS Yes No _ $ % Vew teems ft amont or few set valve) Yes No 'lit $ % ieallh Resource Rite Advice Yes No x $ % VmW Trade Show Participation Yes No % loom care Expos Yes No : % )tlter (rot listed above) Yes No-_ S % 'tease List: Yes No $ Yes No _ $ Yes No _ Z rice protection: Vendor provides protection of an hand and inbansit Inventory. Yes X_ No Retail Markdowns (TPR, Coupons provided by vendor) Yes X_ No (UNkm Non-Revll Contract) Is there an annual vokime Incentive / contract rebate offered? Yes No at is the annual time frame of the agreement? From: To: olume Rebate Allowance: nnual Purchase Range Rebate % Annuel Volume Target AND Fixed Volume Rebate 'orn To % $ i om To % $ $ om To $ om To % = s the volume rebate back to dollar 17 YN No rymenl (check/deduction) Monthly ?)<_ Quar" Annually use attach a separate sheet if more then one annual volume Itcendve exists. le: Payment of the Annual Revolution II Funding Commitment over and above Funding and annual value Incentive rebates will be deducted >rn our scheduled payment to you on the applicable invoice date. demnifloatlon Agreement: is agreement is rot valid until signed by a Vice President of Category Management of Rite Aid. This agreement and ttne attachments R refero are the entire Agreement between Rite Aid and Vendor for the referenced term and superceds all prior oral and wrftten agreements. This reement may be amended or modified only in writing Rite Aid and Vendor The undersigned acknowledges and agrees that the undersigned has refully reviewed the terms of this Agreement and the terms and conditions of Rite Aids Purchase order and agrees to abide by them. By ping this Agreement, the undersigned representative of Vendor represents and warrants that he/she has the power and authority to legally bind nd- r q Vendor Signature: -Sxr..e r I / V I.-- Accepted By: Date: Print Name: C)cj v? t ?? C rr i) Category Manager: Date: t3 Title: N G'} C ,\a Sl `?f<?` ' VP of Cat. Mgmnt: Date: Date (H 7' Ca. SVP of Cat. Mgmnt.. Date: N Refer to the enclosed copy of Rite Aid Accounting Policies and Procedures, which are made part of this Profile. Accounting Use Only • Supplemental Information Attached: Yes n N. M o.,..e. a . 8 e X?,.??f ? RITE AID CORPORATION GUARANTEED SALES AGREEMENT Rite Aid will consider Vendor's product(s) for distribution and sale under the terms and conditions set forth in this Agreement. In consideration of Rite Aid's agreement to review a new entry into its mix, as well as in consideration of the mutual premises contained herein, the parties agree as follows: 1. Vendor will guarantee the sale of Vendor's product(s) to Rite Aid at both Customer Service Centers (i.e. distribution centers) and retail locations. 2. During the first one hundred twenty (120) days, or such other period as Rite Aid may determine in its sole discretion (it being understood by Vendor that Rite Aid may terminate this Agreement in its sole discretion at any time, for any reason whatsoever) following the date if the Vendor's first delivery of product(s) to Rite Aid (the "Review Period"), Vendor's account will be on a review status to permit Rite Aid to assess the performance of the product(s). During the Review Period, Rite Aid will pay only for those product(s) that are actually sold, and Rite Aid's payment will be reduced by any and all cash discounts or other debit amounts (including, but not limited to, advertising, displays, markdowns and price protection) due to Rite Aid. If at the end of the Review Period, Rite Aid determines, in its sole discretion, that the Vendor's product(s) is not selling at an acceptable rate, then Rite Aid will have the right to (a) require Vendor to review and modify Vendor's marketing plan to ensure future success and (b) extend the due date of the original invoice submitted by Vendor. Rite Aid also has the right to require a cash payment, as described in paragraph (3) below. The foregoing rights are not exclusive. At the end of the Review Period, Rite Aid may terminate this Agreement, place the Vendor on Rite Aid's customary payment terms, or extend the Review Period as Rite Aid, in its sole discretion, so desires. 3. If at any time Rite Aid determines in its sole discretion that Vendor's product(s) performance continues to be unacceptable, Rite Aid will have the right to return at Vendor's expense all unsold product(s) to Vendor's facility in return for Vendor's cash payment to Rite Aid for any products for which Rite Aid has paid, but have not been sold. Vendor's payment to Rite Aid shall be made (a) by wire transfer of immediately available funds or certified check, and (b) no later than fifteen (15) days after Rite Aid has returned the product(s). Vendor acknowledges and agrees that in the event that any of Vendor's allowances are funded with "free product" from Vendor, that "free product" will be treated identically to product purchased from Vendor by Rite Aid. This includes,but is not limited to, returns of this product Vendor. 4. Upon settlement of Vendor's account, all outstanding invoices will be paid promptly, less any and all cash discounts or other debit amounts due to Rite Aid. Revised 8/01/2004 5. The terms and conditions of this Agreement are in addition to, and in no way limit, Rite Aid's rights and remedies under Rite Aid's Vendor Profile, standard terms and conditions or purchase orders. In the event of inconsistency between the terms and conditions of the Agreement and any of the foregoing documents, this Agreement will govern. 6. The parties agree that Pennsylvania law governs this Agreement not withstanding its conflicts of law provisions. Any lawsuit brought with regard to this Guaranteed Sales Agreement will be venued in the Court of Common Pleas, Cumberland County, Pennsylvania. 7. The parties specifically agree that 13 Pa. C.S.A. §2326 & 2327(b) are inapplicable and that Vendor will accept returned goods in their "as-is" condition. 8. All retums are at risk of vendor. 9. Vendor can not assign any product covered by this Agreement to any third party without the express written consent of a Vice President of Category Management. Rite Aid is enthusiastic about the opportunity to distribute product(s) into the marketplace. Rite Aid wishes you every success in your endeavor to provide a product that is unique. Please allow Rite Aid to assist you in your distribution needs by arranging for a duly authorized officer to sign and date this Agreement on behalf of your company, and return the executed letter to Rite Aid's Merchandising Department. Vendor: .adA By: io 111e1 ?YZIY? Authorized Signature Title: Pr "?ilC??r1 Date: 3 Revised 8101/2004 ?x????? c RITE AID RETURNS AGREEMENT Please note: A Separate Returns Agreement must be filled out for each vendor number. Company Name: Solstice Medicine Comnan Contact Name: Douglas Momii Phone # 323-221-8180 LZ- Fax # 323-221-2448 Vendor Number: S-Z E-Mail Address: douamomii@sosusaco com Invoice Address: 1043 Cesar E Chavez Ave Los Angeles. CA 90033 Category Manager: Associate Cateqory Manager: TERMS OF AGREEMENT: A. Unsaleable Merchandise Shipping Address: 1043 Cesar E Chavez Ave Los AngeleCA 33 Paul Marceson Jennifer Roush 1. All vendors will be charged the following processing fees for damaged, defective, outdated, and discontinued goods. These fees are based on the findings from the Joint Industry Task Force Study (JIR): DPC (Direct Product Cost) $0.085 Post Damage $0.111 Ops through Scan: $0.101 $0.297 2. All vendors must determine a method of disposition for their unsaleable products. Based on the CODE/DESCRIPTIONS listed below, the vendor representative will check (X) the method his/her company has authorized Rite Aid to use. The additional charge, shown in () at the end of the description, will be added to the charges above. CODE DESCRIPTION WIR COW) COPT X Scan and disposition is left up to the discretion of Rite Aid ($0.020)- DONA Scan and donate ($0.030) ROPT Scan, Hold, Vendor Review/Center Option ($0.127) RDON Scan, Hold, Vendor Review, Donate ($0.137) RTAK Scan, Hold, Vendor Review, Take ($0.174) RSHP Scan, Hold, Vendor Review, Ship ($0.186) Note: All Vendor Review merchandise will be held for 21 days after Invoice date for review. At that time if not reviewed, or if no decision has been provided by the manufacturer the product will be disposed of at the discretion of Rite Aid. SHBK _ Scan and ship back to vendor ($0.180) OPEN RA# REQUIRED WITH THIS OPTION RA# Rev 07/22/03 Rite Aid Returns Agreement Page 2 3. All products will be billed at Rite Aid's list cost + JIR billing factors (DPC, Post Damage Handling, Rec Charges, Disposition Charges) unless otherwise agreed to in writing by Rite Aid Corporation. Vendor billing Is not to exceed 130% of Rite Aid's list cost. 4. All changes to policies must be in writing to Rite Aid Corporation. Approved policy changes will take effect within 30 days following their approval. 5. All vendors will agree to forward a copy of their current national policy regarding reclamation to be reviewed by Rite Aid Corporation. This will be sent to: Rite Aid Corporation 30 Hunter Lane Camp Hill, PA 17011 Attention: Manager, Front End Returns B. Recall Merchandise **Please note: The dispositions on page 1 2g NgLapply to recalls. A separate agreement MUST be filled out for all recalls at the time therecall ps being activated. This allows a vendor to have a separate disposition on recalls than they have on damaged and outdated returns. The signatures below by the appropriate Category Manager of Rite Aid Corporation and the vendor representative of said company denote their understanding and acceptance of the above agreement. .4 A1jr l8 0,6 iwl _ Signature (Vendor Representative) Date S atur thoriz Rite Aid Corporation) Date Solstice Companv Rite Aid Corporation Company Rev 07/22/03 Rite Aid Returns Agreement Page 3 NOTICE PLEASE BE ADVISED THAT AS OF MARCH 18, 2005, ALL INVOICING FOR DAMAGED AND OUTDATED AND RECALLED PRODUCT IS NOW PAPERLESS. ALL INVOICES WILL BE OBTAINED BY A VENDOR DESIGNATED REPRESENTATIVE THROUGH THE UNIVERSAL SOLUTIONS INTERNATIONAL WEBSITE. PLEASE IDENTIFY THE CORRECT PERSON WITHIN YOUR COMPANY WHO REQUIRES THESE INVOICES, AND PROVIDE THE REQUESTED INFORMATION BELOW. ALL APPROPRIATE INFORMATION FOR ACCESS TO THE USI WEBSITE WILL BE SENT TO THE DESIGNATED INDIVIDUAL. All information relating to the Universal Solutions International Website should be sent to the following individual: PLEASE PRINT: Sc1-1rJI C-1e M 11iAkGIB C? ??t3 .E6-4( 6 C 6 v e ?y? ?,s Xc,el ?5 Cry ?GO dress _ m.. 3L3) ZZ( -ell i)o A'drl? ?s 11 RICO) THIS FORM MUST ACCOMPANY THE RITE AID RETURNS AGREEMENT FOR DAMAGED AND OUTDATED PRODUCT Rev 03/15!05 VERIFICATION Ron Chima signs this Verification on behalf of Rite Aid Corporation and Rite Aid HDQTRS. CORP., and does hereby verify that the foregoing Complaint was prepared with the assistance and advice of counsel, and in reliance upon counsel's advice; that the document, subject to inadvertent or undiscovered errors, is based upon and therefore limited by the records and information still in existence, presently recollected and thus far discovered in preparation of this document; and that subject to the limitations set forth herein, the statements contained in this document are true and correct to the best of his knowledge, information and belief. The language of the foregoing document is that of counsel. It is understood that the statements herein are made subject to the penalties of 18 Pa. C.S.A. § 4904 relating to unsworn falsification to authorities. RON CHIMA Date: September 19, 2008 r? L') I ? -. r -? L -•r "? , .; `? ?? ?,. f-- or RITE AID HDQTRS. CORP. and RITE AID CORPORATION, Plaintiff, VS. MADISON ONE ACME, INC. d/b/a SOLSTICE MEDICINE COMPANY, Defendant. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 08-5554 CIVIL TERM COMPLAINT JURY TRIAL DEMANDED AFFIDAVIT OF SERVICE COMMONWEALTH OF PENNSYLVANIA SS: COUNTY OF DAUPHIN THE UNDERSIGNED, Justin G. Weber, being duly sworn according to law, does depose and say as follows: 1. I am a competent adult and an attorney duly admitted to the Bar of the Supreme Court of the Commonwealth of Pennsylvania, having Attorney Identification Number 89266. 2. On September 22, 2008, I caused the Complaint to be served upon the defendant by the mailing of a true and correct copy to the defendant by United States certified mail, return receipt requested, postage prepaid, addressed as follows: Madison One Acme, Inc. d/b/a Solstice Medicine Company, 215 W. Ann Street, Los Angeles, CA 90012 and Madison One Acme, Inc. d/b/a Solstice Medicine Company, c/o May Choy, 3129 S. Hacienda Blvd. #676, Hacienda Heights, CA 91745 ("Service Addresses"). E I received the return receipts indicating that the documents were delivered to and accepted at the Service Addresses on behalf of the defendant on September 25, 2008, thereby completing service pursuant to Pa. R.C.P. 403. The return receipt cards are attached hereto as Exhibit "A." Q4'-? i-.,- LL, Date: September 29, 2008 B ian. Downey (PA 60327) AAffi G. Weber (PA 89266) PEPPER HAMILTON LLP Suite 200, 100 Market Street P.O. Box 1181 Harrisburg, PA 17108-1181 Phone: 717.255.1155 Fax: 717.238.0575 Email: downeyb@pepperlaw.com weberjg@pepperlaw.com Attorneys for Rite Aid Corporation and Rite Aid HDQTRS. CORP. SWORN TO AND SUBSCRIBED BEFORE ME THIS ..944% DAY OF ScRa-c,,vbcr , 2008. Notary ub is AONWEALTH OF PENNSYLVANIA Nadal Seal ltimbarly J. TaWw. Notary Public Gty Of HwdsW% U11 my Corrxr?ion E*= Apdi 11, Mgrnber. Pennsylvania Association of Notaries Exhi bi+- A r U.S, Postal Service el] • Iti c3 CFIfir/ ?a C r S G U1 nj Postage $ 5?P HARRjS? 0 CertlNed Fee C3 Poetrnark Return Receipt Fee ° ?(Endoreement Required) SEP 2X08 C3 Restricted Delivery Fee rU (Endoreemerrt Required) CD 1-1 ?.' X Total Postage & Fees $ ( PE Ln C3 Sent o Madison One Acme, Inc:_.d/b a Y ,r - - --------------------------------- r` , • ice Medicine Company oPb ------------------------------------------- A 90012 s Cons Rellyls 1, 2. end & Aieo 01=09111 A. Item 4 If FIsl&kftd DWWWY is desired. X ¦ Pries yowew is end addraw on the r www eo Out we trait mUrn the card to you. g s Aftch this otil6d't© the boric of the ms" w% or onto frank if space pemft t Ardde AddmaW to: Madison One Acme, inc. d/wa, Solstice Medicine Company , it 215 W, 4nn Street tos Angeles, CA 90012 0 Apert C. M dwm6*Ww dwewl 1 *wn hm 1*U Ks M Vftether dslmy actor es below: ? rio 3300u7 XXCWMMdMUN ©6tgneeeMON Merdtettdlee On 01 japom Receipt *r 4. Reetrioted t9eAaeb/r 9" Fay p rtes 2. Attide 7118511821 ®OOS P®55';7l6?M. P8 Form 3811, Febntary 2004. Dotttsetlc Return Receipt ttieeoe etr t? • ru CD v, (Domestic Mail Only, Nc ins r- 0 F F I C I A a ru X ftop • a X ? tree ? v o {?nao r raeyu, a a I'Ll (E1 ftwvv" RegWree* co '4 J, Total Poetege 6 Few $ f Ln O ro Madison One Acme, Sols_ticg_ Awwi; crP0DwNc c/o May Choy 8 0wrOft ieeeree 1, 2, anti S. Afro item 41f i?sWaled Y ke de= a Pft your r> ft wrid 1 da1 1 eer1 an the reverse so OW we cwt 10" the cod to you. • Attwh Oft Md to the beta of the "!*M , or on the *at M space pennita. Ps Form 3311, February tow Dppw m{p Rehm Receipt ,aasss ox t ra?c jw 0~ Mad u grglrow MAN ? Replrenwl Rewript tar AMrdnrrdbe D e mmw M(rN Mao: 4. Rssblceed DNMenR Oft Fbq) D MW 2. Article" mwww *Writli "" >F I 7005 182 005 2055 7982 v Poeim" " LPs ?`? c. d b a MPABY------------- --$rvr: --- #tT A. apt>tltu. x - t 1 PJ drft-a 4 An% 0 A*kweeft S. Received by (F3'lrlld ftVW Q. 1300, d Q*ift - D. Is debowy eddleerr imi I lI from eiern 1? D Yea if YE% sneer dw wy address bd ow. O No c en a ghts, 3. €Jervioem 1. Article Addressed 1o: Madison Jae Acme, Inc. 4/b/ Solstice Medicine Company c/o May Choy 3129 S. dacienda Blvd. #676 U- i d $ei CA 91745 -br CERTIFICATE OF SERVICE I hereby certify that on September 29, 2008, I served a copy of the foregoing Affidavit of Service on defendant by United States mail, first class postage prepaid, addressed as follows: Madison One Acme, Inc. d/b/a Solstice Medicine Company 215 W. Ann Street Los Angeles, CA 90012 Ju 1 G. Weber (PA 89266) m CA y C': 60 Stephen Moniak, Esquire Attorney LD. No. 80035 William C. Boak, Esquire Attorney I.D. No. 203506 RHOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendant RITE AID HDQTRS. CORP. and RITE AID CORPORATION V. Plaintiff MADISON ONE ACME, INC. d/b/a SOLSTICE MEDICINE COMPANY Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 08-5554 JURY TRIAL DEMANDED NOTICE TO PLEAD To: Rite Aid Hdqtrs. Corp. and Rite Aid Corporation c/o Brian P. Downey, Esq. and Justin G. Weber, Esq. Pepper Hamilton LLP 100 Market Street, Suite 200, P.O. Box 1181 Harrisburg, PA 17108-1181 You are hereby notified to file a written response to the enclosed New Matter and Counterclaim within twenty (20) days from service hereof or a judgment may be entered against you. By: William C. Boak One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Dated: November 3, 2008 Attorneys for Defendants Stephen Moniak, Esquire Attorney I.D. No. 80035 William C. Boak, Esquire Attorney I.D. No. 203506 RHOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendant Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 08-5554 JURY TRIAL DEMANDED ANSWER TO COMPLAINT WITH NEW MATTER AND COUNTERCLAIM NOW COMES, Defendant, Madison One Acme, Inc. d/b/a Solstice Medicine RITE AID HDQTRS. CORP. and RITE AID CORPORATION V. Plaintiff MADISON ONE ACME, INC. d/b/a SOLSTICE MEDICINE COMPANY Company ("Defendant" or "Solstice Medicine Company"), by its attorneys, Rhoads & Sinon LLP, and files the within Answer to Complaint with New Matter and Counterclaim, as follows: PARTIES Admitted upon information and belief. 2. Admitted in part, and denied in part. It is admitted that Rite Aid Hdqtrs. Corp. is a Delaware corporation with the stated address. Defendant is without knowledge or information as to whether it is "the administrative contracting entity for Rite Aid Corporation," and that allegation is denied. 3. Admitted. 719535.1 JURISDICTION 4. The averments in this paragraph constitute conclusions of law to which no response is required. 5. The averments in this paragraph constitute conclusions of law to which no response is required. RELEVANT FACTS 6. Admitted. 7. Admitted. 8. Admitted in part and denied in part. It is admitted that Solstice Medicine Company became a vendor with Rite Aid in or around April, 2006. To the extent that the Rite Aid alleges that the New Domestic Vendor Information Form attached as Exhibit "A" to the Complaint is a valid contract, that allegation is denied. The Form provides that "[t]his agreement is not valid until signed by a Vice President of Category Management of Rite Aid," and the Form was not signed by Rite Aid. 9. Admitted in part and denied in part. It is admitted that Wina Tran signed the Guaranteed Sales Agreement on or about April 13, 2006. By way of further answer, the Guaranteed Sales Agreement was not signed by Rite Aid. The Guaranteed Sales Agreement is a writing which speaks for itself, and any characterization as to the nature or contents thereof by Plaintiff is denied. 10. Admitted in part and denied in part. It is admitted that Douglas Momii signed the Rite Aid Returns Agreement on or about April 13, 2006. By way of further answer, the Rite Aid Returns Agreement was not signed by Rite Aid. The Rite Aid 2 Returns Agreement is a writing which speaks for itself, and any characterization as to the nature or contents thereof by Plaintiff is denied. 11. Admitted in part and denied in part. It is admitted only that Rite Aid discontinued the sale of lee Taps in 2008. Defendant is without knowledge or information as to Rite Aid's reasoning for doing so, and that allegation is denied. 12. Denied. The averments in this paragraph constitute conclusions of law to which no response is required. 13. Denied. It is denied that "Solstice's account reflects a $36,060.06 negative balance based on charges that Solstice agreed to including advertising allowances, markdowns, unsaleable product and other vendor charges." Strict proof thereof at time of trial is demanded. Upon information and belief, the amounts claimed by Rite Aid are improper, and represent charges applied after Rite Aid's decision to discontinue the sale of Ice Taps. By way of further answer, Rite Aid has acknowledged owing Solistice Medicine Company at least $57,540.27, and currently owes Solstice $60,015.42 for which it has not paid. 14. Denied. It is denied that Rite Aid paid $250,000 for the product which it has not sold and is demanding reimbursement. Strict proof thereof at time of trial is demanded. By way of further answer, Solstice Medicine Company furnished Rite Aid at least $128,024.00 in product free of charge, which, upon information and belief, it sold, and now seeks to recover from Solstice Medicine Company in this lawsuit. Further, Rite Aid has acknowledged owing Solistice Medicine Company at least $57,540.27, and currently owes Solstice $60,015.42 for which it has not paid. 3 15. Denied. The averments in this paragraph constitute conclusions of law to which no response is required. 16. Denied. The averments in this paragraph constitute conclusions of law to which no response is required. COUNTI BREACH OF CONTRACT (Rite Aid vs. Solstice) 17. Solstice Medicine Company incorporates paragraphs 1 through 16 of its Answer as if fully set forth herein. 18. Denied. It is denied the New Domestic Vendor Information Form attached as Exhibit "A" to the Complaint is a valid contract, as the Form provides that "[t]his agreement is not valid until signed by a Vice President of Category Management of Rite Aid," and the Form was not signed by Rite Aid. The writings referenced in this paragraph speak for themselves, and any characterization as to the nature or contents thereof by Plaintiff is denied. 19. Denied. Solstice Medicine Company incorporates its answer to paragraphs 13 and 14 above, as if fully set forth herein. 20. Admitted in part and denied in part. It is admitted only that Rite Aid made request to return product to Solstice Medicine Company. It is denied that Solstice Medicine Company is obligated to accept any such return. It is denied that Rite Aid made a request for the "negative account balance" alleged herein. Solstice Medicine Company incorporates its answer to paragraphs 13 and 14 above, as if fully set forth herein. 4 21. Denied. The averments in this paragraph constitute conclusions of law to which no response is required. 22. Denied. The averments in this paragraph constitute conclusions of law to which no response is required. It is specifically denied that Solstice Medicine Company breached any agreement with Rite Aid. 23. Denied. It denied that Rite Aid has suffered any damages, and strict proof thereof at time of trial is demanded. WHEREFORE, Defendant, Madison Acme One, Inc. d/b/a Solstice Medicine Company, requests that this Court enter judgment in its favor and against Plaintiffs, and award Defendant its costs and any other relief allowed by law. COUNT II UNJUST ENRICHMENT (,Rite Aid vs. Solstice) 24. Solstice Medicine Company incorporates paragraphs 1 through 23 of its Answer as if fully set forth herein. 25. Denied. The averments in this paragraph constitute conclusions of law to which no response is required. To the extent a response is required, it is denied that Solstice Medicine Company owes any amounts to Rite Aid, and that Rite Aid is entitled to recover any amounts "to prevent Solstice from being unjustly enriched." 26. Denied. It is denied that a "negative balance" exists. Solstice Medicine Company incorporates its answer to paragraphs 13 and 14 above, as if fully set forth herein. By way of further answer, it is denied that Rite Aid had a reasonable expectation to be paid for any product which was provided by Solstice Medicine Company free of charge. 27. Denied. The averments in this paragraph constitute conclusions of law to which no response is required. 28. Denied. The averments in this paragraph constitute conclusions of law to which no response is required. It is denied that Solstice Medicine Company has been unjustly enriched, and that Rite Aid is entitled to any recovery. WHEREFORE, Defendant, Madison Acme One, Inc. d/b/a Solstice Medicine Company, requests that this Court enter judgment in its favor and against Plaintiffs, and award Defendant its costs and any other relief allowed by law. NEW MATTER 29. Plaintiffs have failed to state a claim upon which relief can be granted as to Solstice Medicine Company. 30. Plaintiffs' claims are barred, in whole or in part, by the doctrine of accord and satisfaction. 31. Plaintiffs' claims are barred, in whole or in part, by the doctrine of estoppel. 32. Plaintiffs' claims are barred, in whole or in part, by the doctrine of failure of consideration. 33. Plaintiffs' claims are barred, in whole or in part, by their own breach of the agreement(s) upon which their claims are based. 34. Upon information and belief, amounts claimed by Rite Aid do not represent amounts Rite Aid actually paid for product. 35. Solstice Medicine Company furnished Rite Aid product free of charge on at least the following dates: August 8, 2006 and June 2, 2007. 6 36. The amount of free product furnished to Rite Aid totals at least $128,024.00. 37. Upon information and belief, Rite Aid is requesting payment for the free product it received worth at least $128,024.00 for which it never paid. 38. At no time were any of Solstice Medicine Company's "allowances funded with `free product,"' and any such allowances are expressly denied. 39. It would be unconscionable to permit Rite Aid to recoup monies for product for which it never paid. 40. By letter dated April 11, 2008, Ron S. Chima, Esquire, Rite Aid's Associate Counsel, stated to Solstice Medicine Company, "[fJrom my review of your account, it appears that you are owed $57,540.27." A copy of the April 11, 2008 letter is attached hereto as Exhibit "A," and made a part hereof. 41. In fact, Rite Aid has failed to pay any of Solstice Medicine Company's invoices for product sold in 2008, and currently owes Solstice $60,015.42 for which it has not paid. 42. Despite acknowledging that Rite Aid owes amounts to Solstice Medicine Company, Rite Aid has failed to pay all amounts owed to date. 43. The Guaranteed Sales Agreement is unenforceable because one or more of its provisions, including specifically paragraph 3, are unconscionable. 44. Plaintiffs' claims are barred, in whole or in part, by their failure to pay Solstice Medicine Company all amounts due and owing for product purchased, which is a condition to any right against Solstice Medicine Company to retain or dispose of said product. 7 45. Plaintiffs' claims are barred, in whole or in part, by their acceptance of the product for which return is sought. 46. Plaintiffs' claims are barred, in whole or in part, by their failure to seasonably notify Solstice Medicine Company of any purported rejection of product. 47. Plaintiffs' claims are barred, in whole or in part, by their failure to follow the instructions of Solstice Medicine Company for the disposition of product. 48. To the extent Rite Aid is entitled to recover on any of claims, which is denied, any such amount must be set-off by at least $128,024.00 in free product Rite Aid received, and by at least $60,015.42, the amount Rite Aid currently owes Solstice Medicine Company. 49. Plaintiffs' claims are barred, in whole or in part, by their failure to mitigate their damages, if any. 50. Plaintiffs' claim for unjust enrichment is barred by the written agreement(s) upon which Plaintiffs sue for relief in this lawsuit. 51. Upon information and belief, the charges comprising the "negative account balance" are improper, and represent charges after Rite Aid decided to discontinue the sale of Ice Taps. COUNTERCLAIM COUNTI BREACH OF CONTRACT 52. Solstice Medicine Company incorporates paragraphs 1 through 51 of its Answer as if fully set forth herein. 8 53. Beginning in 2006, Rite Aid agreed to purchase, and Solstice Medicine Company agreed to sell product known as Ice Taps, for purchase by consumers in Rite Aid stores. 54. From 2006 to 2008, Solstice Medicine Company sold and shipped approximately $588,824.00 worth of product to Rite Aid. 55. As of the time Rite Aid discontinued the sale of Ice Taps, Rite Aid owed Solstice Medicine Company at least $60,015.42 for product purchased. 56. Specifically, Rite Aid has failed to pay the following invoices and amounts for product purchased: Invoice Date Amount 74389 1/2/08 $2,136.00 74390 1/2/08 $1,424.00 76080 2/13/08 $712.00 76152 2/15/08 $1,424.00 76153 2/15/08 $1,424.00 76674 2/27/08 $712.00 76675 2/27/08 $712.00 76676 2/27/08 $1,424.00 77395 3/17/08 $1,424.00 Total: $11,392.00 True and correct copies of these invoices are attached hereto as Exhibit "B," and made a part hereof. 57. Rite Aid further owes Solstice Medicine Company $48,623.42 for amounts previously withheld under a "revolving hold," bringing the total to $60,015.42 owed to date. 58. By letter dated April 11, 2008, Ron S. Chima, Esquire, Rite Aid's Associate Counsel, stated to Solstice Medicine Company, "[flrom my review of your account, it appears that you are owed $57,540.27." See Exhibit "A" hereto. 9 59. To date, Rite Aid has failed to pay Solstice Medicine Company the amounts owed. 60. Rite Aid's failure to pay Solstice Medicine Company the amounts owed constitutes a breach of contract. 61. As a direct and proximate result of Rite Aid's breach, Solstice Medicine Company has suffered damages in an amount of at least $60,015.42, plus prejudgment and postjudgment interest. WHEREFORE, Defendant/Counterclaim Plaintiff, Madison Acme One, Inc. d/b/a Solstice Medicine Company, requests that this Court enter judgment in its favor and against Plaintiffs/Counterclaim Defendants in the amount of $60,015.42, plus prejudgment and postjudgment interest, costs and any other relief allowed by law. COUNT II ACCOUNTSTATED 62. Solstice Medicine Company incorporates paragraphs 1 through 61 of its Answer as if fully set forth herein. 63. Rite Aid's written acknowledgement as to the amounts owing to Solstice Medicine Company constitutes an account stated for which Rite Aid is liable for payment. WHEREFORE, Defendant/Counterclaim Plaintiff, Madison Acme One, Inc. d/b/a Solstice Medicine Company, requests that this Court enter judgment in its favor and against Plaintiffs/Counterclaim Defendants in the amount of $60,015.42, plus prejudgment and postjudgment interest, costs and any other relief allowed by law. 10 COUNT III UNJUST ENRICHMENT RN THE ALTERNATIVE) 64. Solstice Medicine Company incorporates paragraphs 1 through 63 of its Answer as if fully set forth herein. 65. In the event the Court determines that no enforceable contract exists between the parties, Solstice Medicine Company brings this claim in the alternative for unjust enrichment. 66. At the time Solstice Medicine Company sold product to Rite Aid, it had a reasonable expectation of payment for the reasonable value thereof from Rite Aid. 67. The reasonable value of the product sold to Rite Aid and amounts withheld under the revolving hold for which Rite Aid has not paid is $60,015.42. 68. Injustice can only be avoided if Rite Aid pays Solstice Medicine Company the reasonable value of the product and revolving hold of $60,015.42, for which Rite Aid has been unjustly enriched. WHEREFORE, Defendant/Counterclaim Plaintiff, Madison Acme One, Inc. d/b/a Solstice Medicine Company, requests that this Court enter judgment in its favor and 11 against Plaintiffs/Counterclaim Defendants in the amount of $60,015.42, plus prejudgment and postjudgment interest, costs and any other relief allowed by law. Respectfully submitted, RHOADS & SINON LLP By: 7ephen Moniak Arney I.D. No. 80035 William C. Boak Attorney I.D. No. 203506 One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendants 12 1 14 r"51A I ?' + EXHIBIT A W21111 qqqpp? RITE AID April 11, 2008 Via Federal Express Tracking Number. 8639 2023 2200 Wina Tran, CEO Solstice Medicine Company 215 W. Ann Street Los Angeles, CA 90012 Re: Rite Aid's discontinuation of Ice Tabs Dear Ms. Tran: • MAILING ADDRESS P.O. Box 3165 Harrisburg, PA 17105 • GENERAL OFFICE 30 Hunter Lane Camp Hill. PA 17011 • Telephone (717) 761-2633 • Fax (717) 975-5952 Paul Margeson, Category Manager, OTC, forwarded your April 3, 2008 letter to the Legal Department for response. As you know, Rite Aid will discontinue Ice Tabs (Rite Aid item numbers 0352569 and 0352570) for the upcoming planogram in August 2008. In your letter, you indicate that Solstice Medicine Company will not accept any returns of these items. I am enclosing a copy of the Rite Aid Guaranteed Sales Agreement that you executed on April 13, 2006. Specifically, in paragraph three (3), it states "[i]f at any time Rite Aid determines in its sole discretion that Vendor's product(s) performance continues to be unacceptable, Rite Aid will have the right to return at Vendor's expense all unsold product(s) to Vendor's facility in return for Vendor's cash payment to Rite Aid for any products for which Rite Aid has paid, but have not been sold." Please be advised that your products' performance is unacceptable as you have been told previously. Please execute the enclosed Recall Disposition Form and send back to rrry attention immediately. From my review of your account, it appears that you are owed approximately $57,540.27 by Rite Aid. However, with respect to item number 0352570, Rite Aid's on hand inventory cost is $125,344.00. With respect to item number 0352569, Rite Aid's on hand inventory cost is $124,703.00. As you can see the total is $250,047.00. Please sign return and issue payment to Rite Aid for $250,047-$57,540.27 for a total of $192,506.73 less any inventory difference in returned inventories. Ron S. Chima, Esquire TEL: 717.73().7765 FAX.- 717.975.5976 i-chinia@riteiziL,I.com If this matter is not resolved acid you do not recant your position that you will not accept any returns of these items, I will be initiating a lawsuit on behalf of Rite Aid in the Court of Common Pleas in Cumberland County in accordance with paragraph six (6) of the Guaranteed Sales Agreement. A Ve truly yours, Ron S. Chima Associate Counsel CC: Paul Margeson, Category Manager-OTC RSC(jnk Ron S. Chima, Esquire TEL: 717.730.7765 FAX. 717.975.5976 rchima@riteaid.com ?X?'b`+ ? EXHIBIT B INVOICE #: INVO074389 DATE: 01/02/2008 CUSTOMER ID: RITEAID 215 WEST ANN STREET, LOS ANGELES, CA 90012 U.S.A. TEL: 323-221-8180 FAX: 323-221-2448 WWw.SOSuSACo.cOM `w- SOLSTICE MEDICINE COMPANY Sold to : DIST. CENTER NO. 0145788920055 Shipped to: DIST. CENTER NO. 0145788920055 RITE AID HDQTRS. CORP. RITE AID HDQTRS. CORP. LIVERPOOL DISTRIBUTION CENTER LIVERPOOL DISTRIBUTION CENTER 7245 HENRY CLAY BOULEVARD 7245 HENRY CLAY BOULEVARD LIVERPOOL, NY 13088 LIVERPOOL, NY 13088 Tel: (315) 451-8000 Ter /O No. Ship Via S/O No. S/O Date Sales Rep. 2% 30NET 31 4042645 UPS GROUND ORD0058454 01/02/2008 DM Item # Description Quantity Unit Price Eat. Amount ITM12 049987013337 1 CASE 712.00 712.00 ICE TAPS MOUNTAIN MENTHOL 12CT ITBt2 049987013351 2 CASE 712.00 1,424.00 ICE TAPS BLUEBERRY BLAST 12CT Sales Amount : $ 2,136.00 Discount Amount : 0.00 3m? A'4b?11?131Es?1?'3F?#i1F?`?SF ??Olt a ?1siltvak'N`7 ° 7tlGltv?1t? All Claims Must Be Made Within 7 Days After Receipt of Goods. Tax : $ 0.00 Shipping & Handling : $ 0.00 Total Amount : $ 2,136.00 INVOICE #: INVO074390 DATE: 01/02/2008 CUSTOMER ID: RITEAID 215 WEST ANN STREET, LOS ANGELES, CA 90012 U.S.A. TEL: 323-221-8180 FAX: 323-221-2448 www.sosusAco.com 40A 9 lk #"k *4 rVAL -#4 *1 SOLSTICE MEDICINE COMPANY Sold to : DIST. CENTER NO. 0145788920055 Shipped to: DIST. CENTER NO. 0145788920053 RITE AID HDQTRS. CORP. RITE AID HDQTRS. CORP. CHARLOTTE DISTRIBUTION CENTER LIVERPOOL DISTRIBUTION CENTER 1700 STATESVILLE AVENUE 7245 HENRY CLAY BOULEVARD CHARLOTTE, NC 28206 LIVERPOOL, NY 13088 Tel: (704) 371-3653 Tern!?" /O No. Ship Via S/O No. S/O Date Sales Rep. 2% 30NET 31 4042644 UPS GROUND ORD0058453 01/02/2008 DM Item # Description Quantity Unit Price Eat. Amount ITM12 049987013337 1 CASE 712.00 712.00 ICE TAPS MOUNTAIN MENTHOL 12CT IT612 049987013351 1 CASE 712.00 712.00 ICE TAPS BLUEBERRY BLAST 12CT #o?fSY#7#)i c>E 9F '**k*aM-taA3e)*.*Ikg°tot+*A° All Claims Must Be Made Within 7 Days After Receipt of Goods. Sales Amount : Discount Amount : Tax : Shipping & Handling : Total Amount : $ 1,424.00 $ 0.00 $ 0.00 $ 0.00 $ 1,424.00 INVOICE #: INVO076080 DATE;. 02/13/2008 CUSTOMER ID: RITEAID 215 WEST ANN STREET, LOS ANGELES, CA 90012 U.S.A. TEL: 323-221-8180 FAX: 323-221-2448 WWW.SOSUSACO.COM gge rX 4 1..1 SOLSTICE MEDICINE COMPANY Sold t0 DIST. CENTER NO. 0145788920010 Shipped to: DIST. CENTER NO. 0145788920010 RITE AID HDQTRS. CORP. RITE AID HDQTRS. CORP. PERRYMAN DISTRIBUTION CENTER PERRYMAN DISTRIBUTION CENTER 601 CHELSEA ROAD (AREA 3) 601 CHELSEA ROAD (AREA 3) PERRYMAN, MD 21130 PERRYMAN, MD 21130 Tel: (410) 297-6363 Terms" /O No. Ship Via S/O No. S/O Date Sales Rep. 2% 30NET 31 4087468 UPS GROUND ORD0059724 02/13/2008 DM Item # Description Quantity Unit Price Eat. Amount ITB12 049987013351 ICE TAPS BLUEBERRY BLAST 12CT 1 CASE 712.00 712.00. ?4'SPdhdlt?lt?&.?SY?F#'F • ?1?reclFetly-ea d1?iAo*%??I • itigi3??? ° All Claims Must Be Made Within 7 Days After Receipt of Goods. Sales Amount : $ 712.00 Discount Amount : $ 0.00 Tax : $ 0.00 Shipping & Handling : $ 0.00 Total Amount : $ 712.00 INVOICE #: INVO076152 DATE: 02/15/2008 CUSTOMER ID: RITEAID 215 WEST ANN STREET, LOS ANGELES, CA 90012 U.S.A. TEL: 323-221-8180 FAX: 323-221-2448 WWW.SOSUSACO.COM 0,4 # * 4 4M -?? *I SOLSTICE MEDICINE COMPANY Sold to : Shipped to: DIST. CENTER NO. 0145788920088 RITE AID HDQTRS. CORP. RITE AID HDQTRS. CORP. LANCASTER DISTRIBUTION CENTER PO BOX 8432 2801 WEST AVENUE H. HARRISBURG, PA 17105-8432 LANCASTER, CA 93536-8342 Fax: (717) 972-3985 Tel: (661) 951-7565 Terms P/O No. Ship Via S/O No. S/O Date Sales Rep. 2% 30NET 31 4090110 UPS GROUND ORD0059787 0 52008 DM Item # Description Quantity Unit Price Eat. Amount ITM12 ?k?E >? 11J 1gDA (12 x 0.25 oz.) 1 CASE 712.00 712.00 ICE. TAPS MOUNTAIN MENTHOL 12CT IT612 A(*tT*R#AK M D* (12 x 0.025 oz.) 1 CASE 712.00 712.00 ICE TAPS BLUEBERRY BLAST 12CT Sales Amount : $ 1,424.00 * ytty , , yt #r ? Wyl.ecSt awe a n1vP kf1 • *mt-F til • DiscountAmount : $ 0.00 All Claims Must Be Made Within 7 Days After Receipt of Goods. Tax : $ 0.00 Shipping & Handling : $ 0.00 Total Amount : $ 1,424.00 INVOICE #: INVO076153 02/15/2008 215 WEST ANN STREET, DATE: LOS ANGELES, CA 90012 U.S.A. CUSTOMER ID: RITEAID TEL: 323-221-8180 FAX: 323-221-2448 WWW.SOSUSACO.COM v. J( ON # -* (9v ` SOLSTICE MEDICINE COMPANY Sold to : Shipped to: DIST. CENTER NO. 0145788920055 RITE AID HDQTRS. CORP. RITE AID HDQTRS. CORP. LIVERPOOL DISTRIBUTION CENTER PO BOX 8432 7245 HENRY CLAY BOULEVARD HARRISBURG, PA 17105-8432 LIVERPOOL, NY 13088 Fax: (717) 972-3985 Tel: (315) 451-8000 Terms P/O No. Ship Via S/O No. S/O Date Sates Rep. 2% 30NET 31 4090109 UPS GROUND R Item # Description Quantity Unit Price Ext. Amount ITM12 *00011 04Ongo* (12 x 0.25 oz.) 1 CASE 712.00 712.00 ICE TABS MOUNTAIN MENTHOL 1'2CT ITB12 ?**NAIM EMg0* (12 x 0.025 oz.) 1 CASE 712.00 712.00 ICE TAPS BLUEBERRY BLAST 12CT Sales Amount : $ 1,424.00 A.* *041444 w *** - **kw a M -e amaja .'u'4•*At**ff DisCountAmount: $ 0.00 All Claims Must Be Made Within 7 Days After Receipt of Goods. Tax : $ 0.00 Shipping & Handling : $ 0.00 Total Amount : $ 1,424.00 INVOICE #: INVO076674 02/27/2008 215 WEST ANN STREET, DATE: LOS ANGELES, CA 90012 U.S.A. CUSTOMER ID: RITEAID TEL: 323-221-8180 FAX: 323-221-2448 WWW.SOSUSACO.COM NO . ,? lama SOLSTICE MEDICINE COMPANY Sold to : Shipped to: DIST. CENTER NO. 0145788920060 RITE AID HDQTRS. CORP. RATE AID HDQTRS. CORP. RITE AID ROME DIST. CTR., INC.. PO BOX 8432 5865 SUCCESS DRIVE HARRISBURG, PA 17105-8432 ROME, NY 13440 Fax: (717) 972-3985 Tel: (315) 338-8174 Terms P/O No. Ship Via S/O No. S/O Date Sales Rep. 2%0 30NET 31 4102174 UPS GROUND ORD0060157 02/27/2008 DM Item # Description Quantity Unit Price Ext. Amount, ITM12 049987013337 iCE TAPS MOUNTAIN MENTHOL 12CT 1 CASE 712.00 712.00 in#A14b#ll?l?c}8.SP7F?FfF ?tta?tklF a lyt a t9ji?*h?? • 3k11+1#%F#n' - All Claims Must Be Made Within 7 Days After Receipt of Goods. Sales Amount : $ 712.00 Discount Amount : $ 0.00 Tax : $ 0.00 Shipping 8 Handling : $ 0.00 Total Amount : $ 712.00 INVOICE #: INVO076675 02/27/2008 215 WEST ANN STREET, DATE: LOS ANGELES, CA 90012 U.S.A. CUSTOMER ID: RITEAID TEL: 323-221-8180 FAX: 323-221-2448 WWW.SOSUSACO.COM "Ark SOLSTICE MEDICINE COMPANY Sold to Shipped to: DIST. CENTER NO. 0145788920029 RITE AID HDQTRS. CORP. RITE AID HDQTRS. CORP. PONTIAC DISTRIBUTION CENTER PO BOX 8432 5400 PERRY DRIVE HARRISBURG, PA 17105-8432 WATERFORD, MI 48329 Fax: (717) 972-3985 Tel: (248) 674-7770 Terms P/O No. Ship Via S/O No. S/O Date Sales Rep. 2% 30NET 31 4102173 UPS GROUND ORD0060156 02/27/2008 DM Item # Description Quantity Unit Price Ext. Amount 1T812 049987013351 ICE TAPS BLUEBERRY BLAST 12C1 1 CASE 712.00 712.00 io?i 1Ptfe???f,?dA?tF?f?F ' >kiasC9r B?Ot-t 9 V9ji.9a#•?a??J • 3ti1A???? All Claims Must Be Made Within 7 Days After Reoeipt of Goods. Sales Amount : 712.00 Discount Amount : $ 0.00 Tax : $ 0.00 Shipping & Handling : $ 0.00 Total Amount : $ 712.00 INVOICE #: INVO076676 02/27/2008 215 WEST ANN STREET, DATE: LOS ANGELES, CA 90012 U.S.A. CUSTOMER ID: RITEAID TEL: 323-221-8180 FAX: 323-221.2448 WWW.SOSUSACO.COM `A1 SOLSTICE MEDICINE COMPANY Sold to : Shipped to: DIST. CENTER NO. 0145788920010 RITE AID HDQTRS. CORP. RITE AID HDQTRS. CORP. PERRYMAN DISTRIBUTION CENTER PO BOX 8432 601 CHELSEA ROAD (AREA 3) HARRISBURG, PA 17105-8432 PERRYMAN, MD 21130 Fax: (717) 972-3985 Tel: (410) 297-6363 Terms. P/O No. Ship Via S/O No. S/O Date Sales Rep. 2% 30NET 31 4102172 UPS GROUND ORD0060155 02/27/2008 DM Item # Description Quantity Unit Price Ext. Amount ITM12 049987013337 1 CASE 712.00 712.00 ICE TAP5 MOUNTAIN MENTHOL 12CT IT1312 049987013351 1 CASE 712.00 712.00 ICE 'SAP BLUE13ERRY 43tAST 12CT All Claims Must Be Made Within 7 Days After Receipt of Goods. Sales Amount : $, Discount Amount : $ Tax : $ Shipping & Handling : $ Total Amount : $' 1,424.00 0.00 0.00 0.00 1,424.00 INVOICE #: INVO077395 DATE: 03/17/2008 CUSTOMER ID: RITEAID Sold to : RITE AID HDQTRS. CORP. PO BOX 8432 HARRISBURG, PA 17105-8432 Fax: (717) 972-3985 215 WEST ANN STREET, LOS ANGELES, CA 90012 U.S.A. TEL: 323-221-8180 FAX: 323-221-2448 WWW.SOSUSACO.COM Its SOLSTICE MEDICINE COMPANY Shipped to: DIST. CENTER NO. 0145788920055 RITE AID HDQTRS. CORP. LIVERPOOL DISTRIBUTION CENTER 7245 HENRY CLAY BOULEVARD LIVERPOOL. NY 13088 Tel: (315) 451-BDnn Terms P/ O No. Ship Via S/O No. S/O Date Sales Rep. 2% 30NET 31 4111623 UPS GROUND ORD0060458 03/17/2008 DM It # em Description Quantity Unit Price Eat.-Amount ITB12 r 049987013351 ICE TAPS BLUEBERRY BLAST 12CT 2 CASE 712.00 1,424.00 tn?i SPth4li?lt?'c?SP?*# iA?IkSTf aIVltB>??lm*a??] • ?tV119??? All Claims Must Be Made Within 7 Days After Receipt of Goods. Sales Amount : Discount Amount Tax : Shipping & Handling Total Amount : $ 1,424.00 $ 0.00 $ 0.00 $ 0.00 $ 1,424.00 VERIFICATION Wina So, deposes and says, subject to the penalties of 18 Pa. C.S. §4904 relating to unsworn falsification to authorities, that she is the CEO of Madison One Acme, Inc. d/b/a Solstice Medicine Company, that she makes this verification by its authority and that the facts set forth in the Answer to Complaint with New Matter and Counterclaim are true and correct to the best of her knowledge, information and belief. /0 3/ 20 -P J' Date Wina So CERTIFICATE OF SERVICE Ap I hereby certify that on this day of N vve++?T , 2008, a true and correct copy of the foregoing Answer to Complaint with New Matter and Counterclaim was served by means of United States mail, first class, postage prepaid, upon the following: Brian P. Downey Justin G. Weber Pepper Hamilton LLP 100 Market Street, Suite 200 P.O. Box 1181 Harrisburg, PA 17108-1181 tephen Mo iak ? ?} ?'") c"? ?. C."? ...{ ?,?'• - -r- ?, ...ft C -C . t S ? .? t- e y , ?°? - r-al ' ? }? '::? ? .. ? k c? RITE AID HDQTRS. CORP. and RITE AID CORPORATION, Plaintiff, VS. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 08-5554 CIVIL TERM MADISON ONE ACME, INC. d/b/a SOLSTICE MEDICINE COMPANY, Defendant. JURY TRIAL DEMANDED ANSWER OF PLAINTIFFS RITE AID CORPORATION AND RITE AID HDOTRS CORP. TO DEFENDANT'S NEW MATTER Plaintiffs Rite Aid HDQTRS. CORP. and Rite Aid Corporation (collectively "Rite Aid" or "Plaintiffs") answer Defendant's New Matter and state as follows: 29. Deny. This paragraph states a conclusion of law to which no response is required. 30. Deny. This paragraph states a conclusion of law to which no response is required. 31. Deny. This paragraph states a conclusion of law to which no response is required. 32. Deny. This paragraph states a conclusion of law to which no response is required. 33. Deny. This paragraph states a conclusion of law to which no response is required. 34. Deny. The amounts claimed by Rite Aid are the amounts due from Solstice pursuant to the parties' contracts. 35. Deny as stated. Rite Aid admits that it received product from Solstice in or about August 2006 to fund allowances for certain promotions. Solstice provided the product in lieu of a check or other payment as a way of funding Solstice's participation in certain promotions. 36. Deny. Rite Aid received approximately $71,004.64 of product from Solstice in or about August 2006 as a way of funding Solstice's participation in certain promotions. 37. Deny. The amounts claimed by Rite Aid are the amounts due pursuant to the parties' contracts. 38. Deny. In lieu of a check or other payment, Solstice provided product as a way of funding Solstice's participation in certain promotions. 39. Deny. This paragraph states a conclusion of law, to which no response is required. 40. Deny. The April 11, 2008 letter is a writing that speaks for itself and any allegation or implication inconsistent with that writing is denied. By way of further response, Solstice quotes portions of the letter out of context. As that letter indicates, as of April 11, 2008, Rite Aid was owed $192,506.73. 41. Admit in part and deny part. Plaintiffs admit that they have not made any payments to Solstice in 2008 and deny that any amount was owed to Solstice. 42. Deny. Plaintiffs have not acknowledged that any amount is owed to Solstice and they do not own Solstice any amount. 43. Deny. This paragraph states a conclusion of law to which no response is required. 44. Deny. This paragraph states a conclusion of law to which no response is required. -2- 45, Deny. This paragraph states a conclusion of law to which no response is required. 46. Deny. This paragraph states a conclusion of law to which no response is required. 47. Deny. This paragraph states a conclusion of law to which no response is required. 48. Deny. This paragraph states a conclusion of law to which no response is required. 49. Deny. This paragraph states a conclusion of law to which no response is required. 50. Deny. This paragraph states a conclusion of law to which no response is required. 51. Deny. This paragraph states a conclusion of law to which no response is required. WHEREFORE, Plaintiffs Rite Aid HDQTRS. CORP. and Rite Aid Corporation request that judgment be entered in their favor and against Solstice as requested in the Complaint. -3- Date: November 24, 2008 i . Downey (PA 60327) J stin G. Weber (PA 89266) PEPPER HAMILTON LLP Suite 200, 100 Market Street P.O. Box 1181 Harrisburg, PA 17108-1181 Phone: 717.255.1155 Fax: 717.238.0575 Email: downeyb@pepperlaw.com weberjg@pepperlaw.com Attorneys for Plaintiffs Rite Aid HDQTRS. CORP. and Rite Aid Corporation -4- VERIFICATION Ron Chima signs this Verification on behalf of Rite Aid HDQTRS. CORP. and Rite Aid Corporation, and does hereby verify that the foregoing Answer to New Matter was prepared with the assistance and advice of counsel, and in reliance upon counsel's advice; that the document, subject to inadvertent or undiscovered errors, is based upon and therefore limited by the records and information still in existence, presently recollected and thus far discovered in preparation of this document; and that subject to the limitations set forth herein, the statements contained in this document are true and correct to the best of his knowledge, information and belief. The language of the foregoing document is that of counsel. It is understood that the statements herein are made subject to the penalties of 18 Pa. C.S.A. § 4904 relating to unsworn falsification to authorities. RON CHIMA CERTIFICATE OF SERVICE I hereby certify that on November 24, 2008, I served a copy of the foregoing Preliminary Objections of Plaintiffs Rite Aid HDQTRS. CORP. and Rite Aid Corporation to Defendant's Counterclaim on counsel of record by United States mail, first class postage prepaid, addressed as follows: Stephen Moniak, Esquire William C. Boak, Esquire Rhoads & Sinon LLP One South Market Square P.O. Box 1146 Harrisburg, PA 17108-1146 6u .4n G. Weber (PA 89266) -5- r --? a ? ?y , ?z?: ? ?.. '? ?w, ?'ti? .s." «t? -` :! ;"t3 `'= --• - ... ?; . RITE AID HDQTRS. CORP. and RITE AID CORPORATION, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW Plaintiff, vs. : NO. 08-5554 CIVIL TERM MADISON ONE ACME, INC. d/b/a SOLSTICE MEDICINE COMPANY, Defendant. JURY TRIAL DEMANDED PRELIMINARY OBJECTION OF PLAINTIFFS RITE AID CORPORATION AND RITE AID HDQTRS. CORP. TO DEFENDANT'S COUNTERCLAIM Plaintiffs Rite Aid HDQTRS. CORP. and Rite Aid Corporation (collectively "Rite Aid" or "Plaintiffs") preliminarily object to Count II of Defendant Madison One Acme, Inc. d/b/a Solstice Medicine Company's ("Solstice") Counterclaim pursuant to Pa. R.C.P. 1028(a)(4) and C.C.R.P. 1028 and in support state as follows: 1. Rite Aid filed a Complaint against Solstice based on Solstice's breach of the parties' contract. 2. Rite Aid's Complaint alleges that Solstice currently owes Plaintiffs $286,060.06. 3. In response, Solstice filed counterclaims against Plaintiffs alleging claims for breach of contract (Count I), account stated (Count II) and unjust enrichment (Count III). Rite Aid's Preliminary Objection to Count II (Account Stated) Based On Solstice's Failure To State A Cause of Action Pursuant to Pa.R.C.P. 1028(a)(4). 4. A claim for an account stated requires that the defendant agree to the account. Rush's Service Center, Inc. v. Genareo, 10 Pa. D.&C.4 h 445 (C.P. Lawrence 1991). r ? 5. Solstice's account stated claim is solely based on a letter, attached as Exhibit A to Solstice's Counterclaim, in which Rite Aid requested payment of $192,506.73 from Solstice. 6. Solstice takes one sentence from the letter out of context and in part quotes Rite Aid's letter as stating "it appears that you are owed $57,540.27." (Answer with Counterclaim, para. 58). 7. In the letter Rite Aid did not admit that it owes Solstice any amount but rather set forth the calculation of the amount that Solstice owed Rite Aid. 8. Specifically, the letter outlined the amount due to Rite Aid in April 2008, $250,047, and subtracted a credit of $57,540.27, leaving a balance due to Rite Aid of $192,506.73. 9. The letter does not provide any basis for an account stated claim and Solstice fails to allege any other facts to support its claim that Rite Aid agreed to an amount due to Solstice. WHEREFORE, Rite Aid HDQTRS. CORP. and Rite Aid Corporation request that Solstice's Account Stated claim (Count II) be dismissed. Date: November 24, 2008 1::?,L t B i . Downey (PA 60327) Ju m G. Weber (PA 89266) PEPPER HAMILTON LLP Suite 200, 100 Market Street P.O. Box 1181 Harrisburg, PA 17108-1181 Phone: 717.255.1155 Fax: 717.238.0575 Email: downeyb@pepperlaw.com weberjg@pepperlaw.com Attorneys for Rite Aid HDQTRS. CORP. and Rite Aid Corporation -2- CERTIFICATE OF SERVICE I hereby certify that on November 24, 2008, I served a copy of the foregoing Preliminary Objections of Plaintiffs Rite Aid HDQTRS. CORP. and Rite Aid Corporation to Defendant's Counterclaim on counsel of record by United States mail, first class postage prepaid, addressed as follows: Stephen Moniak, Esquire William C. Boak, Esquire Rhoads & Sinon LLP One South Market Square P.O. Box 1146 Harrisburg, PA 17108-1146 usti G. eber (PA 89266) -3- Stephen Moniak, Esquire Attorney I.D. No. 80035 William C. Boak, Esquire Attorney I.D. No. 203506 RHOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendant RITE AID HDQTRS. CORP. and RITE AID CORPORATION V. Plaintiff MADISON ONE ACME, INC. d/b/a SOLSTICE MEDICINE COMPANY Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 08-5554 JURY TRIAL DEMANDED DEFENDANT'S RESPONSE TO PRELIMINARY OBJECTION OF PLAINTIFFS RITE AID CORPORATION AND RITE AID HDQTRS. CORP. TO DEFENDANT'S COUNTERCLAIM Defendant, Madison One Acme, Inc. d/b/a Solstice Medicine Company ("Solstice Medicine Company"), by its attorneys, Rhoads & Sinon LLP, files this Response to Plaintiffs' Preliminary Objection to Count II of Defendant's Counterclaim, and in support thereof aver as follows: Admitted in part and denied in part. It is admitted only that Rite Aid filed a Complaint on September 19, 2008. It is specifically denied that Solstice Medicine Company breached any contract with Plaintiffs. 2. Admitted in part and denied in part. It is admitted only that Rite Aid alleges that it is currently owed $286,060.06 in its Complaint. It is specifically denied 724691.1 that this sum is due and owing to Rite Aid. To the contrary, Plaintiffs are liable to Solstice Medicine Company as more fully set forth in the Counterclaim. 3. Admitted. Rite Aid's Preliminary Objection to Count II (Account Stated) Based on Solstice's Failure to State a Cause of Action Pursuant to Pa. R. C. P. 1028(a)(4) 4. The averments in Paragraph 4 constitute a conclusion of law to which no response is required. 5. Admitted in part and denied in part. It is admitted that Solstice Medicine Company's account stated claim arises from Rite Aid's letter dated April 11, 2008, where Rite Aid admits that "from my review of your account, it appears that you are owed $57,540.27." While Rite-Aid requested payment of amounts allegedly due from Solstice in that letter, it is specifically denied that any payment or amount is due from Solstice. 6. Admitted in part and denied in part. It is admitted only that Rite Aid admitted in its April 11, 2008 letter that "from my review of your account, it appears that you are owed $57,540.27." It is denied that Solstice "takes one sentence from the letter out of context." By way of further answer, the letter speaks for itself and any characterization thereof by Plaintiffs is denied. 7. Denied. Rite Aid specifically admitted that Solstice Medicine Company was owed the sum of $57,540.27 in the April 11, 2008 letter. By way of further answer, Rite Aid's calculation as to amounts allegedly owed by Solstice Medicine Company is specifically reduced by the $57,540.27 figure that Rite Aid admits they owe in that letter. By way of further answer, it is denied that Solstice owes any monies or amounts to Rite Aid. 2 8. Admitted in part and denied in part. It is admitted only that Rite Aid alleges in the letter that a balance is due of $192,506.73. It is specifically denied that any balance is due Rite Aid. By way of further answer, Rite Aid's subtraction of the $57,540.27 figure in its calculation lends further support to the conclusion that it admitted that this amount was owed to Solstice Medicine Company in the letter. 9. Denied. The averments in Paragraph 9 constitute conclusions of law to which no response is required. To the extent a response is required, it is clear that Rite Aid's written admission that Solstice Medicine Company is owed $57,540.27 in its April 11, 2008 letter constitutes a sufficient basis upon which to state a claim for an account stated under Pennsylvania law. WHEREFORE, Defendant/Counterclaim Plaintiff, Madison Acme One, Inc. d/b/a Solstice Medicine Company, respectfully requests that the Court enter an Order denying Plaintiffs' Preliminary Objection to Count II of the Counterclaim. Respectfully submitted, RHOADS Date: December 9, 2008 91tephen Moriiak Attorney I.D. No. 80035 William C. Boak Attorney I.D. No. 203506 One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendant 3 CERTIFICATE OF SERVICE I hereby certify that on this 9th day of December, 2008, a true and correct copy of the foregoing Defendant's Response to Preliminary Objection of Plaintiffs Rite Aid Corporation and Rite Aid Hdqtrs. Corp. to Defendant's Counterclaim was served by means of United States mail, first class, postage prepaid, upon the following: Brian P. Downey Justin G. Weber Pepper Hamilton LLP 100 Market Street, Suite 200 P.O. Box 1181 Harrisburg, PA 17108-1181 Teresa H. Laughead 61 ? rv C- ° ; " -?,, ? ?x r ; ? :?'Tr ?,? _-?; ?.. ..._ -?? r-?-? a -.., _, -. a °f v? ??7 ?.f ..t' ""? . V RITE AID HDQTRS. CORP. and RITE AID CORPORATION, Plaintiff, VS. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW : NO. 08-5554 CIVIL TERM MADISON ONE ACME, INC. d/b/a SOLSTICE MEDICINE COMPANY, Defendant. JURY TRIAL DEMANDED PRAECIPE FOR LISTING CASE FOR ARGUMENT TO THE PROTHONOTARY: Please list the above-referenced matter for the February 4, 2009 argument court. 1. Matter to be argued: Preliminary Objection of Plaintiffs Rite Aid HDQTRS.Corp. and Rite Aid Corporation to Defendant's Counterclaim 2. Counsel: a. Counsel for plaintiff who will argue the case: Justin G. Weber, Pepper Hamilton LLP, Suite 200, 100 Market Street, P.O. Box 1181, Harrisburg, PA 17108. b. Counsel for defendants who will argue the case: Stephen Moniak/William C. Boak, Rhoads & Sinon LLP, One South Market Square, P.O. Box 1146, Harrisburg, PA 17108-1146. c Date: December 17, 2008 B is P. Downey (PA 60327) J s 'n G. Weber (PA 89266) PEPPER HAMILTON LLP Suite 200, 100 Market Street P.O. Box 1181 Harrisburg, PA 17108-1181 Phone: 717.255.1155 Fax: 717.238.0575 Email: downeyb@pepperlaw.com weberjg@pepperlaw.com Attorneys for Plaintiffs Rite Aid HDQTRS. CORP. and Rite Aid Corporation CERTIFICATE OF SERVICE I hereby certify that on December 17, 2008, I served a copy of the foregoing Praecipe for Listing Case for Argument on counsel of record by United States mail, first class postage prepaid, addressed as follows: Stephen Moniak, Esquire William C. Boak, Esquire Rhoads & Sinon LLP One South Market Square P.O. Box 1146 Harrisburg, PA 17108-1146 Q'I? 'I (Vl? f Vi G. Weber (PA 89266) a^ ti Wrl C." w-4 -Tr TS G? !a1 RITE AID HDQTRS. CORP. and IN THE COURT OF COMMON PLEAS OF RITE AID CORPORATION, CUMBERLAND COUNTY, PENNSYLVANIA PLAINTIFF V. MADISON ONE ACME, INC., D/B/A SOLSTICE MEDICINE COMPANY, : DEFENDANT NO. 08-5554 CIVIL IN RE: PLAINTIFF'S PRELIMINARY OBJECTION TO DEFENDANT'S COUNTERCLAIM BEFORE BAYLEY, J., AND EBERT. J. ORDER OF COURT AND NOW, this 9th day of February, 2009, upon consideration of the Preliminary Objection of Plaintiff Rite Aid Headquarters Corporation and Rite Aid Corporation, Defendant's Response thereto, the briefs filed by the parties and after argument, IT IS HEREBY ORDERED AND DIRECTED that the Plaintiff's Preliminary Objection is DENIED. By the Court, M. L. Ebert, Jr., J. rian P. Downey, Esquire Justin G. Weber, Esquire Attorneys for Plaintiff Suite 200, 100 Market Street P. O. Box 1181 Harrisburg, PA 17108-1181 30- t I I WV 6" 83A f)DOZ Stephen Moniak, Esquire William C. Boak, Esquire Attorneys for Defendant One South Market Street P. O. Box 1146 Harrisburg, PA 17108-1146 bas J NOTICE TO PLEAD TO DEFENDANT: YOU ARE HEREBY NOTIFIED TO FILE A WRITTEN RESPONSE TO THE ENCLOSED NEW MATTER WITHIN 20 (TWENTY) DAYS FROM SERVICE HEREOF, OR A JUDGM T MAY BE E6,? TERED AGAINST YOU. / 4 /?L AT T YS FOR PLAINTIFFS RITE AID HDQTRS and 0% AID CORPORATION RITE AID HDQTRS. CORP. and RITE AID CORPORATION, Plaintiff, VS. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW : NO. 08-5554 CIVIL TERM MADISON ONE ACME, INC. d/b/a SOLSTICE MEDICINE COMPANY, Defendant. : JURY TRIAL DEMANDED ANSWER AND NEW MATTER OF PLAINTIFFS RITE AID CORPORATION AND RITE AID HPOTRS. CORP. TO DEFENDANT'S COUNTERCLAIM Plaintiffs Rite Aid HDQTRS. CORP. and Rite Aid Corporation (collectively "Rite Aid"), by their undersigned attorneys, file this Answer with New Matter to Madison One Acme, Inc. d/b/a Solstice Medicine Company's ("Solstice") Counterclaim, and state as follows: COUNTI 52. Rite Aid incorporates paragraphs 1-28 of its Complaint, and paragraphs 29-51 of its Answer to New Matter as if set forth at length. 53. Admits in part and denies in part. Rite Aid admits only that Solstice and Rite Aid entered into a business relationship beginning in or about 2006. By way of further answer, as part of that relationship, Solstice entered into a Guaranteed Sales Agreement and agreed to accept the return of, unsold product. 54. Admits. . f 55. Denis. Rite Aid denies that it owed Solstice any amount at the time it discontinued Solstice's product. 56. Admits in part and denies in part. Rite Aid admits only that Solstice has attached documents as Exh?bit B. Rite Aid denies that any amount is due to Solstice but instead avers that Solstice owes Rte Aid. 57. Denies. Rite Aid denies that it owes Solstice any amount. 58. Deis as stated. Rite Aid admits that Solstice has attached a document as Exhibit A. The letter is aiwriting that speaks for itself and any allegations inconsistent with that I writing are denied. By wD of further answer, the April 11, 2008 letter requests payment from Solstice. 59. D?nies. Rite Aid denies that it owes Solstice any amount. 60. D I enies. This paragraph states a conclusion of law to which no response is required. 61. Denies. This paragraph states a conclusion of law to which no response is i required. COUNT II ACCOUNT STATED 62. kite Aid incorporates paragraphs 1-28 of its Complaint, paragraphs 29-51 of its Answer to New Matter, and paragraphs 52-61 above as if set forth at length. 63. Denies. This paragraph states a conclusion of law to which no response is required. COUNT III 64. Rite Aid incorporates paragraphs 1-28 of its Complaint, paragraphs 29-51 l of its Answer to Ne""I Matter, and paragraphs 52-63 above as if set forth at length. i 1 -2- 65. Denies. This paragraph states a conclusion of law to which no response is required. 66. Denies. This paragraph states a conclusion of law to which no response is required. 67. Denies. This paragraph states a conclusion of law to which no response is required. 68. Denies. This paragraph states a conclusion of law to which no response is required. NEW MATTER 69. Solstice's claim fails to state a claim upon which relief may be granted. 70. Rite Aid did not breach any duty, contractual or otherwise, allegedly owed to Plaintiff. 71. Solstice's cause of action against Rite Aid may be barred by the equitable doctrines of estoppel, laches, and waiver. 72. Rite Aid is entitled to an equitable right of setoff. 73. Rite Aid does not waive any of the affirmative defenses enumerated in Pa. R.C.P. 1030 or any other'', affirmative defense and hereby gives notice that Rite Aid relies upon such other defenses as may become available or appear during the course of discovery proceedings in this case. Rite Aid reserves the right to amend this answer to assert such defenses. -3- WHEREFORE, Plaintiffs Rite Aid HDQTRS. CORP. and Rite Aid Corporation request that judgment be entered in their favor and against Solstice, and such other and further relief as this Honorable Court deems appropriate. au?L Date: March 13, 2009 B P. Downey (PA 60327) Ju tin G. Weber (PA 89266) PEPPER HAMILTON LLP Suite 200, 100 Market Street P.O. Box 1181 Harrisburg, PA 17108-1181 Phone: 717.255.1155 Fax: 717.238.0575 Email: downeyb@pepperlaw.com weberjg@pepperlaw.com Attorneys for Plaintiffs Rite Aid HDQTRS. CORP. and Rite Aid Corporation -4- VERIFICATION Ron Chima signs this Verification on behalf of Rite Aid HDQTRS. CORP. and Rite Aid Corporation, and {foes hereby verify that the foregoing Answer with New Matter of Plaintiffs Rite Aid HDQT9S. CORP. and Rite Aid Corporation to Defendant's Counterclaim was prepared with the assistance and advice of counsel, and in reliance upon counsel's advice; that the document, subject tb inadvertent or undiscovered errors, is based upon and therefore limited by the records and Wormation still in existence, presently recollected and thus far discovered in preparation of this document; and that subject to the limitations set forth herein, the statements contained in this document are true and correct to the best of his knowledge, information and belief. The language of the foregoing document is that of counsel. It is understood that the statements herein are made subject to the penalties of 18 Pa. C.S.A. § 4904 relating to unworn falsification to authorities. Ron C ma CERTIFICATE OF SERVICE I hereby certify that on March 13, 2009, I served a copy of the foregoing Answer with New Matter of Plaintiffs Rite Aid HDQTRS. CORP. and Rite Aid Corporation to Defendant's Counterclaim on counsel of record by United States mail, first class postage prepaid, addressed as follows: Stephen Moniak, Esquire William C. Boak, Esquire Rhoads & Sinon LLP One South Market Square P.O. Box 1146 Harrisburg, PA 17108-1146 LL 1111 G. Weber (PA 89266) t7 ^? c. _ ?. r ? ? t` ?- ?? ??? ? p p ? 1'i`9 ;,?; ' .... '?'7 tT. ? ??? ?' ?? ? ` !"t? ...? GJ ,? C.t! "< A Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 08-5554 JURY TRIAL DEMANDED DEFENDANT'S REPLY TO NEW MATTER Defendant, Madison One Acme, Inc. d/b/a Solstice Medicine Company ("Solstice Stephen Moniak, Esquire Attorney I.D. No. 80035 William C. Boak, Esquire Attorney I.D. No. 203506 RHOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendant RITE AID HDQTRS. CORP. and RITE AID CORPORATION V. Plaintiff MADISON ONE ACME, INC. d/b/a SOLSTICE MEDICINE COMPANY Medicine Company"), by its attorneys, Rhoads & Sinon LLP, files this Reply to Plaintiffs' New Matter in their Answer, as follows: 69. The allegations in Paragraph 69 are conclusions of law to which no response is required. 70. The allegations in Paragraph 70 are conclusions of law to which no response is required. 71. The allegations in Paragraph 71 are conclusions of law to which no response is required. 72. The allegations in Paragraph 72 are conclusions of law to which no 737906.1 response is required. To the extent that any response is required, the allegations are denied. By way of further response, Rite Aid is not entitled to "an equitable right of setoff'. 73. The allegations in Paragraph 73 are conclusions of law to which no response is required. To the extent a response is required, Rite Aid has not complied with Pa. R. Civ. P. 1030 by pleading the enumerated defenses upon which it relies in response to Defendant's Counterclaim. WHEREFORE, Defendant/Counterclaim Plaintiff, Madison One Acme, Inc. d/b/a Solstice Medicine Company, requests that this Court enter judgment in its favor on its Counterclaim, plus pre judgment and post judgment interest, costs and any other relief allowed by law. Respectfully submitted, RHOADS & SINON LLP Date: April 1, 2009 By: tephen omak Attorney I.D. No. 80035 William C. Boak Attorney I.D. No. 203506 One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendant 2 CERTIFICATE OF SERVICE I hereby forego certify that on this 1st day of qPril , 2009, a true and correct copy of the Mg Defendant's Reply to New Matter was served by means of United States mail, first class, postage prepaid, upon the following: Brian P. Downey Justin G. Weber Pepper Hamilton LLP 100 Market Street, Suite 200 P.O. Box 1181 Harrisburg, PA 17108-1181 Teresa H. Laughead FLED-Of CE oF THE pr,n-kl STAR( 1009 APR -2 Pit 1: 35 °JtiTY ILL' Irv I'i?1Y ??J???I?? RITE AID HDQTRS. CORP. and RITE AID CORPORATION V. Plaintiff MADISON ONE ACME, INC. d/b/a SOLSTICE MEDICINE COMPANY Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 08-5554 JURY TRIAL DEMANDED c? r ?r r" J W To 0, --r PRAECIPE TO DISCONTINUE WITH PREJUDICE TO THE PROTHONOTARY: Kindly discontinue all Counterclaims filed by Defendant, Madison One Acme, Inc. d/b/a Solstice Medicine Company with prejudice in accordance with Pa. R. Civ. P. 232(b). Dated: November 16, 2011 RHOADS & SINON LLP By. 7 9 ephen oniak Attorney I.D. No. 80035 One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorney for Defendant 931468.1 CERTIFICATE OF SERVICE I hereby certify that on this /? ?'4 day of November, 2011, a true and correct copy of the Praecipe to Discontinue with Prejudice was served by means of United States mail, first class, postage prepaid, upon the following: Brian P. Downey Justin G. Weber Pepper Hamilton LLP 100 Market Street, Suite 200 P.O. Box 1181 Harrisburg, PA 17108-1181 Teresa H. Laughead D 331468.1 RITE AID HDQTRS. CORP. and RITE AID CORPORATION, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL, ACTION - LAW Plaintiffs, Vs. NO. 08-5554 CIVIL TERM MADISON ONE ACME, INC. d/b/a SOLSTICE MEDICINE COMPANY, C = Q Defendant. JURY TRIAL DEMANDE 'c y :=?0 PRAECIPE TO DISCONTINUE - f 1>C: E5 TO THE PROTHONOTARY: Please mark the above-captioned matter discontinued, with prejudice, pursuant to Pa. R.C.P. 229. Date: February 27, 2012 Brian wney (PA 60327) Justin G. Weber (PA 89266) PEPPER HAMILTON LLP Suite 200, 100 Market Street P.O. Box 1181 Harrisburg, PA 17108-1181 Phone: 717.255.1155 Fax: 717.238.0575 Email: downeyb@pepperlaw.com weberjg@pepperlaw.com Attorneys for Plaintiffs Rite Aid HDQTRS. CORP. and Rite Aid Corporation CERTIFICATE OF SERVICE I hereby certify that on February 27, 2012, I served a copy of the foregoing Praecipe to Discontinue on counsel of record by United States mail, first class postage prepaid, addressed as follows: Stephen Moniak, Esquire William C. Boak, Esquire Rhoads & Sinon LLP One South Market Square P.O. Box 1146 Harrisburg, PA 17108-1146 " it ?/' Jus ' . Weber