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HomeMy WebLinkAbout04-1734Dean F. Piermattei, Esquire Attorney I.D. No. 53847 Stephanie E. DiVittore, Esquire Attorney I.D. No. 85906 Pd-IOADS & SINON LLP One South Market Sq., 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233 -5731 Attorneys for L.B. Smith, Inc. L.B. SMITH, INC., Plaintiff V. R.D. CHRISTOPHER, Defendant : 1N THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : DocketNo. 0('{'-{-'13¢ ~ NOTICE YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a wrkten appearance personally or by a~tomey 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 judgmem may be entered against you by the Court without fia-ther 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 fights 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 COURT ADMINISTRATOR 4th Floor, Cumberland County Courthouse Carlisle, PA 17013 (717) 240-6200 AVISO USTED HA SIDE DEMANDADO/A EN CORTE. Si usted desea defenderse de las demandas que se presentan mas adelante en las siguientes paginas, debe romar accion dentro de los proximos veinte (20) dias despues de la notificacion de esta Demanda y Aviso radicando personalmente o por medio de tm abogado una comparecencia escfita y radicando en la Cone por escfito sus defensas de, y objecciones a, las demandas presentadas aqui en contra suya. Se le advierte de que si usted falla de romar accion como se describe antefionnente, el caso puede proceder sin usted y tm fallo pot cualquier suma de dinero reclamada en la demanda o cualquier otra reclamacion o remedio solicitado por el demandante puede ser dictado en contra suya por la Cone sin mas aviso adicional. Usted puede perder dinero o propiedad u otros derechos importantes para usted. USTED DEBE LLEVAR ESTE DOCUMENTO A SU ABOGADO INMEDIATAMENTE. SI USTED NO TIENE UN ABOGADO O NO PUEDE PAGARLE A UNO, LLAME O VAYA A LA SIGUIENTE OFICINA PARA AVERIGUAR DONDE PUEDE ENCONTRAR ASISTENCIA LEGAL. CUMBERLAND COUNTY COURT ADMINISTRATOR 4th Floor, Cumberland County Courthouse Carlisle, PA 17013 (717) 240-6200 Dean F. Piermattei, Esquire Attorney I.D. No. 53847 Stephanie E. DiVittore, Esquire Attorney I.D. No. 85906 RHOADS & SINON LLP One South Market Sq., 12th Floor P.O. Box I 146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for L.B. Smith, Inc. L.B. SMITH, INC., : Plaintiff : V. : R.D. CHRISTOPHER, : : Defendant : IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA COMPLAINT NOW COMES, Plaintiff L.B. Smith, Inc. ("L.B. Smith"), by and through its attorneys, Rhoads & Sinon LLP, and files the within Complaint and, in support thereof, avers as follows: I. L.B. Smith is a Pennsylvania Corporation with its principal place of business located at 2010 State Road, Camp Hill, Cumberland County, Pennsylvania 17325. 2. At all relevant times, R.D. Christopher ("Christopher") was an adult individual with an address of 8207 Lee Jackson Circle, Spotsylvania, VA 22553. Christopher was, at all times relevant hereto, President and owner of Checkered Flag Equipment Sales & Transport, Inc. ("Checkered Flag"). 3. This action arises under the laws of the Commonwealth of Pennsylvania and is within the subject matter of this Court. Venue is proper pursuant to Rules 1006 and 2103 of the Pennsylvania Rules of Civil Procedure. Pa. R. Civ. P. 1006, 2103. 513458.1 4. For over 65 years, L.B. Smith was engaged in the business of the distribution and sale of heavy equipment, including road building and construction equipment. 5. In 2003, L.B. Smith determined that it would no longer continue in the business of the sale of heavy equipment, instead intending to wind up this portion of its business activities. 6. As a result, L.B. Smith became interested in selling its heavy equipment inventory, located at L.B. Smith owned and/or operated facilities throughout the Eastern United States. 7. In connection with the sale of its heavy equipment inventory, L.B. Smith contacted Christopher regarding the sale of certain equipment by Christopher and his company, Checkered Flag. 8. During the period of June and July, 2003, L.B. Smith representatives had several discussions with Christopher regarding his ability to sell L.B. Smith equipment to end users. 9. In these discussions, Christopher repeatedly represented to L.B. Smith that, in the event L.B. Smith entered into an agreement whereby L.B. Smith would authorize Checkered Flag to sell L.B. Smith equipment, Checkered Flag and Christopher would comply with the terms of the agreement, utilize best efforts to sell the equipment, provide prompt notification of the sale of the equipment and, upon sale of a piece of equipment, promptly forward payment to L.B. Smith, of an "Agreed upon" price. 10. Christopher also expressly represented, during these discussions, that Checkered Flag was performing acceptably and was not experiencing financial difficulties, -2- 11. As a result of these representations by Christopher, L.B. Smith determined it wouid utilize Checkered Flag to sell a portion of its heavy equipment inventory and entered into a Letter of Agreement for Consignment with Checkered Flag dated July 27, 2003 ("Consignment Agreement"). (A copy of the Consignment Agreement is attached hereto as Exhibit "A" and incorporated herein by reference). 12. Christopher represented to L. B. Smith that he and his company, Checkered Flag, would use its best efforts to sell L. B. Smith's Equipment as identified on the Equipment List attached to the Consignment Agreement ("Equipment"). 13. Pursuant to the discussion and understanding between the parties, the Equipment was owned by L.B. Smith, but was to be held by Christopher and Checkered Flag on consignment and, in the event of a sale, Christopher -- again consistent with Christopher's representations, -- would provide timely notification of the sale to L.B. Smith and promptly forward payments received from any customers in an amount equal to the "Agreed Price" for each piece of Equipment. 14. Based on Christopher's representations, L.B. Smith also continued with its dissolution efforts and ceased its own efforts to sell the Equipment. 15. Defendant Christopher also continually represented to L. B. Smith that he would uphold the Consignment Agreement on behalf of Checkered Flag and utilize his best efforts with respect to the sale of the Equipment, as well as payment to L.B. Smith. 16. Christopher did not, at any time, inform L.B. Smith that he or Checkered Flag would refuse to proceed with their obligations, that he or Checkered Flag would not comply with the terms of the Consignment Agreement, that his earlier representations regarding sale of the -3- Equipment or Checkered Flag's performance or payment to L.B. Smith were erroneous, or that Checkered Flag and/or Christopher were experiencing financial difficulties. 17. L.B. Smith only agreed to enter into the Consignment Agreement, allow the Equipment to leave its possession and be placed with Christopher and work with Christopher, as a result of Christopher's representations. 18. Following these discussions L.B. Smith proceeded to perform by releasing the Equipment to Christopher. 19. After performance began, L.B. Smith became aware -~ through notification by third parties which were interested in purchasing, or allegedly entered into contracts to purchase the Equipment, that Christopher was not performing consistent with his representations. 20. At this time, L.B. Smith contacted Christopher and, during frequent discussions during this period, Christopher represented to L.B. Smith that he and Checkered Flag were properly performing pursuant to Christopher's prior representations and the Consignment Agreement, and he would continue to utilize his best efforts to market and sell the Equipment, provide proper notification of such sales, and promptly forwarded -- and would continue to forward o- any and all payments received for the Equipment to L.B. Smith. 21. As a result of Christopher's representations, L.B. Smith took no steps to terminate the Consignment Agreement, or retrieve the Equipment in Christopher's possession. 22. Despite Christopher's representations however, and communications from L.B. Smith, Defendant Christopher refused to honor his obligations or proceed as specifically represented to L.B. Smith. -4- 23. Defendant Christopher, during his contact with L.B. Smith and with the intent to induce L.B. Smith to enter into the Consignment Agreement, represented that he would ensure Checkered Flag's performance of any and all contractual obligations, ensure prompt payment to L.B. Smith of funds received from the sale of Equipment, ensure immediate notification to L.B. Smith of the sale of Equipment, and he represented that he and Checkered Flag were in satisfactory financial condition. 24. Also, following execution of the Consignment Agreement, Defendant Christopher expressly represented to L.B. Smith, with the intent to induce L.B. Smith to continue to perform its obligations under the Consignment Agreement, that he and Checkered Flag were complying with the contractual obligations and wouid continue to do so, including providing notice of sales and immediate payment of funds received for the Equipment. Christopher represented that he and Checkered Flag would work to address all of L.B. Smith's concerns regarding the Consignment Agreement and would work to address any concerns of potential purchasers of L.B. Smith Equipment. 25. COUNT I - FRAUD L.B. Smith incorporates herein by reference Paragraphs 1 through 24 above. 26. Christopher's representations were false in that he: (a) failed to inform L.B. Smith of sales of the Equipment; (b) failed to remit to L. B. Smith monies from the sale of the Equipment; (c) sold Equipment and falsely represented to L. B. Smith that the Equipment was missing because it was actually on "rent". To that end, Christopher provided to L.B. Smith false rental invoices; -5- (d) gave some of the Equipment to parties in forgiveness of debt owed by Christopher and/or Checkered Flag and failed to inform L. B. Smith of the same and failed to pay L. B. Smith for this Equipment; (e) sold some of the Equipment multiple times, keeping the money from each transaction and exposing L. B. Smith to liability lawsuits; (0 failed to use his best efforts to ensure that he and Checkered Flag would dispose of the Equipment as per the parties discussions and agreement. 27. Christopher knew that his representations to L.B. Smith were false and knew and/or reasonably knew that L.B. Smith would rely upon these false representations. 28. Christopher's false representations were material in inducing L.B. Smith to agree to provide Christopher and/or Checkered Flag with the Equipment, and to enter into a Consignment Agreement and continue doing business with Christopher even when Christopher continued to represent that the Equipment not on Checkered Flag's lot was actually being rented. 29. Some of the aforementioned material misrepresentations were made prior to L.B. Smith's execution of the Consignment Agreement, or the transfer of the Equipment to Christopher's possession and were made with actual knowledge of the falsity of the statements, at the time they were made, or in mcldess disregard of the truth or falsity. 30. In justifiable reliance upon Christopher's representations, L.B. Smith agreed to do business with Christopher and Checkered Flag and agreed to transfer the Equipment to Christopher's possession. -6- 31. Christopher's representations after execution of the Consignment Agreement were also false, as he did not intend for Checkered Flag to begin honoring its contractual obligations, did not intend to work to address the concerns raised by L.B. Smith and did not intend that any and all payments received after this period would be promptly forwarded to L.B. Smith. 32. These misrepresentations were material as L.B. Smith declined to terminate the Consignment Agreement, but instead continued to perform its obligations pursuant thereto, in reliance on these misrepresentations. 33. The material misrepresentations following the Consignment Agreement were made with the intent to induce L.B. Smith to continue to perform under the Consignment Agreement. Further, these material misrepresentations were made with actual knowledge of their falsity or in reckless disregard of the troth or falsity of the statements. 34. In justifiable reliance upon Christopher's representations, L.B. Smith declined to terminate the Consignment Agreement and instead continued to honor its contractual obligations. 35. Christopher's material misrepresentations after execution of the Consignment Agreement were made with actual malice and constitute willful misconduct. 36. As a direct and proximate result of Christopher's false representations, L.B. Smith suffered damages in the amount of $3,500,000. 37. L.B. Smith is entitled to punitive damages as a result of Christopher's false and misleading statements, as the acts of Christopher were intentional, willful, and malicious and justify the imposition of punitive damages. -7- WHEREFORE, Plaintiff L.B. Smith, Inc. respectfully requests judgment in its favor and against Defendant R.D. Christopher in an amount of $3,500,000 together with interest, costs, attorneys' fees, punitive damages and any other relief that this Court deems appropriate. Respectfully submitted, RHOADS & S1NON LLP One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for L.B. Smith, Inc. -8- 04/21/04 WED 08:01 FAX 717 231 0637+ RHOADS SINON LLP ~003 VERIFICATION R.E. Jordan, II, deposes and says, subject to the penalties of 18 Pa.C.S.A. §4904 relating to unswom falsification to authorities, that he is the President of L.B. Smith, Inc., that he makes this verification by its authority and that the facts set forth in the foregoing Complaint are true and correct to the best of his knowledge, information and belief. 04/21/04 $~'ED ]3:47 b'AX 717 231 6637+ R~IOADS SINON LLP ~002 EXHIBIT "A" 04/2I/~4 WED 13:47 FAX 717 231 6637~ RHOADS SINON LLP O03 CHZCICERED FLAG £ QUIP_;Sl]ENT S.kLES A_ND TI:L&N'SP O RT, P. O. BOX 436 THORzN'BURG, ' TRGEN'IA 22565 TEL 540-582-7704 IrA_X 540-582-7708 Re: Len~.r o£Ageement T~s Le."ier cf Agreeme::t for ConsJ~rnent ser~ foxh the mutual mder.=tandMgs and a~eements by a.ud benveec L. B. Sr:,.Jti'.., ~c. (hereinafter reich',ed to as "Seller") ~nd Checkered F/zg Equipmen: 52es & Trmspo:':, inc. (here:,nmfie: screwed to as "Buyer"). Se!let ov,¢2 al! of t5~- equipment listed on Ex~'~Jbit "A", a cap}, ef v,'t,Jch is a~ached hereto (the "Equipmen:"). Selkr h~ ~ lc~ wi~ M & T B~ sec~e~ by a ~st secmfiB, interest ~ the Equipment. Buyer hereby ac~mow!edg~s the existence and confluence of fl~e ~.rst secuh~ interest h~ld byM & T Bap3:. Seller hereby cDnsigns the Equipment to Buyer for s~Ie to Buyer's customers. Buyer ack_no;vledges that Seller will file ~ f_n~c~g statement with respect m the EquiFment reflecting that the Equipment is owned by Seller and held by Buyer on consi~ent. Buyer represents there ~e na ~ec,~ed creators claimin== ~ ~terest ~ the im'enm~.' or equipment of Buyer should ~e ao~25ed of ~s censf~_mem ~ order to perfect Set[er's consi~ent [mercers e~er t~: ~/~ Seller d:sbes for Buyer to transport the Equipment, at Buyer's sole expense, to Buyer's sales !ocation. Prior to the azceptance by Buyer of eazh piece of Equipment for tra,'xspon= Seller shall provide yard p:rsopzel to st~z ~nd FAn :ash piece of Eqtfipmen~ for Buyer's inspection. Seller persomne! x~S/] st~ kb: equirmenr ~nd move il to the pick up ~e= prior to Buyer's pickup iud transport. N addition, Sel)sr'5 persopme! wi!! assist Bus'er:s &?.,ers d~ng :he loading. Buyer a~ee,: to i:xsu.,-: the EquiF. m:i~r for its .:,all ._.m~kei value wh.i!e ths Equipment is Lq Buyer's pcs_:ession from mcku? tb-.-ough deUveu' to Bu?'=r's final customers. Seller shall have cenifiz-'re cf ins"--an:: tc Bu)'e: ~:d M & T BarS: Bur:er a~ee.< to advert, is:' th~ Equipment in MTBI( 0010 8D0546 04/21/04 sTEO 13:47 FAX 717 231 6637+ RflOADS SINON LLP ~004 c~tomer~ for c~h Upo~ z sz]~ to ~ ~ p~', Buyer sh~l b: da:m~d to haw purch~d ~: ~ ' ~ - ,' "~*-~ ' each pi~c~ of Eq~mcnt sold. Upo: t%~ recei? ofpa3~ent ~om__~ . s.:ls~ ...... ,..... of z-qu m,-nt, Bu',,'er. '~-ii[ ..... t. S,..cz -ho,..~ ':a ¢-,,,,,~. -_-- -~,- .'~-:"~',~.. n-, the ~cuat of 55,260,000,00, moro or l~ss a~er a~usL~:n~s. The Pro~ssoo' Note sh~l] kn~eres~ zt ~e rm~ of one h~U of ~¢w York pfi~ for the te~ of ub~ No~. /he note shall haw te~ of six month~. A~ th= cad of ~e sLx-month te~ of ~e Noee, Bu7~ shall pay PromissoU Note bzlmnca to Seller zs ~e purch~a pSca ~or ~ unsold Equipment. Buyer ~ck~owladgas ~nd conscn~ tc S~Iler's co~ateral assi~sn: of L~s A~semcnt, ~e Th: laws of the Commonwealth of ?emnsy/vapJz shal] govern this consi~enr ~nsacfion. T~Js is ~¢ wbo]~ a~:~ment be~,een the pa~s. A~y provision of ~s Lz~¢r of A~¢ement fo,~d tc be huva~d by a co~ of compctznt j~sdizfion sba!) not ~v~idate the whole a~e~ment. he.~b.~ e×-u.e tm. Letter of A__c-eement for Comi?~ment. AGREED TO: B.12C< Title: R.EAD & AC-REED TO: CR-ECK.EP..F.D FLAG EQUIPMENT SALES TR.*-,HS?ORY. EqC. . R©BERT D, CHL~iSTO?I~ER~('- FF~SIDENT R.EAD & AQP,.EED TO: L. B. S.N.ffTH, ~3,~C. El,': . I~ _ & CEO MTBK 0011 SD0547 04/21/04 WED 13:47 FAX 717 231 6637+ RHOADS SINON LLP ~005 04/21/04 WED 13:48 FA~ 717 231 6637+ R~OADS SINON LLP ~606 sdo549 04/21/04 WED 13:49 FAX 717 231 6637. RHOADS SINON LLP ~007 }-. o_ ~0 ~o SD0550 04/21/04 ~ED 13:50 FAX 717 231 6637+ RHOADS S1NO~ LLP ~ 008 PROMISSORY NOTE TP~NSPOKT: DdC. (~n~ "Bo~cw~:'), at 6~0~ M~=8 Road, ~omb~, Vk~L~ 22565 pzo~ds~s to pay w ~ order of L. B. Sh.~TH, ~'C. (~he "Lender':), at 6375 Merc~W Drive, sum of 55,250,000.09 Mtn ~:~r~s: ~om July 22, 2003: en the mnph~ phmcipa! at tb~ m:~ of 2% Unpaid pdmeipal after th.-' Due Due shown below shill accrue interesl al z rate of 4% armuzlly until p~id. Th" tmpaid pr4..acip~ will accrue interest at fi~e end of each month until the p~cipS is paid ~ ~a!] ~'ad inter:s: .~kal/be payabl: at the ?ro~Jsso~' Not~ due date of lznum~: 22:200-4. · ),.mounts paid m Lender pm'suant to ~at ceaain Loner of A~e:ment for Cc;osignment bern:eon the p&"~ies of :yen dat~ bere'Mth .~ha/l be treated as pay'me,ts v-,'lth respect to t/'hs Note. Al! pa)~e=ts or '~L~ Note shall be applied first to Principal lnt-~res~ shall accrue on ~e 2004. if a-u), pa.',~enr obligation under this Note is not paid whe~ du:, the remai~ng unpaid principal balance and a~y acc~aed bt*rest shall becom: due ~ediate!y at the option of the Lender. The Borrower resem'es the fi~t ;o prepay this note (m v,,hole or h pm't) pr/or to the Due Date with no prepa)~tat penalt}5 If a.ny of the following o's'ems of defau!! occur, this Note and my other obligations of the Borrower ~o the Lender, sbaE become due immediately, wirhoat demand or notice: !) the fzfi 'uae of the Boxower to pay the pFincipal as. a~eed on or before ~e Due Lbs f:!L".g of bapJcmep..':y preczedi:~_gs mvoi','ing the Borrower z~ a debtor; eh.~ .=p?icetios far the z?poinmTent cfa receb er fo.- Bo.vower; 5) MTBK 0015 04/~1/04 WED 13:50 FAX 717 231 6637+ RHOADS SINDN LLP 009 CB~ C~K.E.~P,..ED FL:~,G EQL'~_ N~N7 S_~..Lr ES & 7T,.~KSPOF, T, EWC. / · /' ~.~ ~ MTBKO016 L.B. SMITH, INC., Plaintiff V. R.D. CHRISTOPHER, Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Docket No. 04-1734 - Civil CERTIFICATE OF MAILING I, Dean F. Piermattei, Esquire attorney for Plaintiff, L. B. Smith, Inc., do hereby certify that I served a copy of Plaintiffs Complaint upon Plaintiff at the address below, and hereby attached the original Certified Mail, Return Receipt Requested Receipts dated April 23, 2004 and April 24, 2004 as Exhibit "A". Date: April 27, 2004 R. D. Christopher P.O. Box 436 Thomburg, VA 22565 R.D. Christopher 8207 Lee Jackson Circle Spotsylvania, VA 22553 Respectfully submitted, RHOADS & SINOI~ LLP ~-'fdSean~iermattei, Esquire Steptlanie E. DiVIttore, Esquire One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff EXHIBIT "A" L.B. SMITH, INC., Plaintiff V. R.D. CHRISTOPHER, Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Docket No. 04-1734 - Civil PRAECIPE FOR ENTRY OF DEFAULT JUDGMENT TO THE PROTHONOTARY: Pursuant to Pa. R.Civ. P. 1037(b), kindly enter judgment of default in favor of Plaintiff, L.B. Smith, Inc. and against Defendant, R.D. Christopher, for failure to plead to the Complaint in this action within the required time. The Complaint contains a Notice to Defend within 20 days from the date of service thereof. Attached as Exhibit "A" is a copy of PlaintilTs Important Notice, which I certify was mailed by regular mail to the Defendant at his last known address on May 14, 2004, which is at least 10 days prior to the filing of this Praecipe. Notwithstanding the Notice on the Complaint and the warning on the Important Notice, the Defendant has failed to file a response to the Complaint. Please assess damages in the amount of $3,500,000, the sum certain set forth in the Complaint, together with interest, costs of suit and attorneys fees and punitive damages the later to be determined by the Court. RHOADS & SINON LLP ~fi~F.e~'~att ei, Esquire O~e.4g6uth Market Square q. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff CERTIFICATE OF SERVICE I hereby certify that on May 24, 2004, a true and correct copy of the "Praecipe for Entry of Default Judgment" was served by means of United States mail, first class, postage prepaid, upon the following: R.D. Christopher 8207 Lee Jackson Circle Spotsylvania, VA 22553 R.D. Christopher P.O. Box 436 Thomburg, VA 22565 Teresa L. Paulhamus L.B. SMITH, 1NC., Plaintiff V. R.D. CHRISTOPHER, Defendant 1N THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Docket No. 04-1734 - Civil TO: R.D. Christopher 8207 Lee Jackson Circle Spotsylvania, VA 22553 R.D. Christopher P.O. Box 436 Thomburg, VA 22565 You are hereby notified that on ~ ~,{ ~ Judgment has been entered against you in the above-captioned case: , 2004, the following Damages in the amount of $3,500,000 together with interest, costs of suit and attorneys fees and punitive damages the later to be determined by the Court. Prothonotary notice is: I hereby certify that the name and address of the proper person(s) to receive this R.D. Christopher 8207 Lee Jackson Circle Spotsylvania, VA 22553 R.D. Christopher P.O. Box 436 Thomburg, VA 22565 387662,1 EXHIBIT "A" 517657.1 L.B. SMITH, INC., Plaintiff V. R.D. CHRISTOPHER, Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Docket No. 04-1734 - Civil DATE OFNOTICE: May 14, 2004 TO: R.D. Christopher P.O. Box 436 Thomburg, VA 22565 R.D. Christopher 8207 Lee Jackson Circle Spotsylvania, VA 22553 IMPORTANT NOTICE YOU ARE IN DEFAULT BECAUSE YOU HAVE FAILED TO ENTER A WRITTEN APPEARANCE PERSONALLY OR BY ATTORNEY AND FILE IN WRITING WITH THE COURT YOUR DEFENSES OR OBJECTIONS TO THE CLAIMS SET FORTH AGAINST YOU. UNLESS YOU ACT WITHIN TEN (10) DAYS FROM THE DATE OF THIS NOTICE, A JUDGMENT MAY BE ENTERED AGAINST YOU WITHOUT A HEARING, AND YOU MAY LOSE YOUR PROPERTY OR OTHER IMPORTANT RIGHTS. YOU SHOULD TAKE THIS NOTICE TO A LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE FOLLOWING OFFICE TO FIND OUT WHERE YOU CAN GET LEGAL HELP. CUMBERLAND COUNTY COURT ADMINISTRATOR 4m Floor, Cumberland County Courthouse Carlisle, PA 17013 (717) 240-6200 NOTICIA IMPORTANTE FECHA DE AVISO: May 14, 2004 A: R.D. Christopher P.O. Box 436 Thomburg, VA 22565 R.D. Christopher 8207 Lee Jackson Circle Spotsylvania, VA 22553 USTED ESTA EN REBELDIA PORQUE HA FALLADO DE TOMAR LA ACCION REQUERIDA EN ESTE CASO. A MENOS QUE USTED TOME ACCION DENTRO DE LOS PROX1MOS DIEZ (10) DIAS DE LA FECHA DE ESTA AVISO, SE PUEDE DICTAR UN FALLO EN CONTRA SUYA SIN LLEVARSE A CABO [INA VISTA Y USTED PUEDE PERDER SU PROPIEDAD Y OTROS DERECHOS IMPORTANTES. USTED DEBE LLEVAR ESTE DOCUMENTO IMMEDIATAMENTE A SU ABOGADO. SI USTED NO TIENE UN ABOGADO O NO PUEDE PAGAR UNO, VAYA O LLAME A LA OFICINA ABA JO INDICADA PARA QUE LE INFORMEN DONDE PUEDE CONSEQUIR AYUDA LEGAL. CI_rMBERLAND COUNTY COURT ADMINISTRATOR 4~a Floor, Cumberland County Courthouse Carlisle, PA 17013 (717) 240-6200 By: Respectfully submitted, R/lOADS & SINON LLP Dean F. Piermattei, Esquire One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff CERTIFICATE OF SERVICE I hereby certify that on this 14~h, day of May, 2004, a true and correct copy of the foregoing Ten-Day Default Notice was served by means of United States mail, first class, postage prepaid, upon the following: R.D. Christopher P.O. Box 436 Thomburg, VA 22565 R.D. Christopher 8207 Lee Jackson Circle Spotsylvania, VA 22553 Teresa Paulhamus IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVA5 L.B. SMITH, INC., PLAINTIFF R.D. CHRISTOPHER, DEFENDANT NO.: 04-1734 CIVIL ANSWER TO COMPLAINT WITH NEW MATTER AND COUNTERCLAIM 1. Admitted. 2. Admitted. 3. Admitted. 4. After reasonable investigation, the without knowledge or a belief as to the truth of 5. See Answer #4 above. 6. See Answer #4 above. 7. Admitted. 8. Admitted. 9. It is alleged and asserted that Checkered Flag Equipment and Sales and Christopher did comply with all the terms of the contract, did utilize their best efforts to sell the equipment and did pay the Plaintiff approximately $900,000.00. 10. It is alleged and asserted[ that Christopher did not misrepresent any facts concerning performance of the contract nor Checkered Flag's finances. II-- Defendant is the averment. the protest. the 11. Admitted. 12. See Answer #9 above. 13. See Answer #9 above. 14. See Answer #4 above. 15. See Answer #9 above. 16. See Answer #9 above. Further, equipment from Defendant's 17. 18. 19. 20. 21. equipment the Plaintiff removed possession over Defendant's See Answer #9 above. Admitted. See Answer #9 above. See Answer #9 above. It is alleged and asserted that the Plaintiff removed from Defendant's possession over Defendant's protest. 22. 23. 24. 25. 26. 27. 28. 29. see Answer #9 See Answer #9 above. See Answer #9 above. See Answer #9 above. No answer is required. See Answer #9 above. See Answer #9 above. See Answer #9 above. Defendant says the agreement above. speaks for itself. Also -2- 30. See Answers #9 and #29 above. 31. See Answer #9 above. 32. See Answer #21 above 33. See Answer #9 above. 34. See Answer #21 above. 35. See Answer #9 above. 36. It is alleged and asserted that the Plaintiff did not suffer any damages because he breached the contract by removing the equipment from Defendant's possession. 37. See Answer #36 above. NEW ~TTER FRAUD R. D. Christopher incorporates herein by reference paragraphs 1 through 37 above. 38. The Defendant never received all of the equipment promised by the Plaintiff. This constituted a material breach of the agreement between the parties. 39. The Plaintiff, after some equipment had been delivered to the Defendant, removed it from the possession of the Defendant, over Defendant's protest. 40. The Defendant had until January 10, 2004 to fulfill his obligations pursuant to the contract. -3- Defendant contract waiver. 46. 41. The Plaintiff delivered equipment to the Defendant that was the subject of litigation without informing the Defendant of said fact. This constituted a material breach of the agreement between the parties. 42. Plaintiff's Complaint fails to state a claim upon which relief may be granted. 43. Plaintiff's failure to provide the equipment required under the terms of the contract was a material breach of the contract which bars Plaintiff's claims. 44. Plaintiff's failure to provide the equipment as required under the terms of the contract entered into between Plaintiff and Defendant bars Plaintiff's action by the defense of failure of consideration. 45. Plaintiff's failure to provide the equipment as required under the contract entered into between Plaintiff and was a surrender of Plaintiff's rights under the and Plaintiff's claim is barred by the defense of Plaintiff's failure to provide the equipment as required under the terms of the contract entered into between Plaintiff and Defendant bars Plaintiff's action by the defense of estoppel. WHEREFORE, Defendant Christophe~ respectfully requests that this Court enter judgment in his favor and against Plaintiff -4- Smith for all consequential and incidental damages, including reasonable attorney's fees and costs and such other and further relief as this Court deems just and proper. Ro Do paragraphs 1 47. with an Virginia COUNTERCLAIM AGAINST PLAINTIFF Christopher incorporates herein by reference through 46 above. R.D. Christopher ("Christopher") is an adult individual address of 8207 Lee Jackson Circle, Spotsylvania, 22553. Christopher was, at all times relevant hereto, President and owner of Checkered Flag Equipment and Sales, Inc. ("Checkered Flag"). 48. L.B. Smith is a Pennsylvania Corporation with its principal place of business located at 2010 State Road, Camp Hill, Cumberland County, Pennsylvania 17325. 49. Plaintiff is liable to Defendant in the amount of $5,000,000.00 as a result of Plaintiff's breach of the contract. 50. Plaintiff is liable to Defendant for all and any compensatory damages and consequential and incidental damages, including reasonable attorney's fees and costs. 51. Plaintiff is liable to Defendant for punitive damages. WHEREFORE, Defendant demands that judgment be entered in his favor and against Plaintiff on Defendant's counterclaim in the amount of $5,000,000.00, together with court costs and fees, or that in the event that Plaintiff has judgment against the Defendant on Plaintiff's cause o~f action, that Plaintiff's judgment be set off to the extent that Plaintiff's judgment exceeds Defendant's recovery on his claim. Respectfully submitted, By: .j~~~~ arrls, ;quire .Attorney for the Defendant 48 East Princess Street York, Pennsylvania 17403 (717) 845-3505 I.D. #10373 -6- ~S~R TO C0~LAINT WITH NEW ~TTER ~ COUNTERCLAIM yo~c~ ~ 17403 ~'17 845 ~S05 CERTIFICATE OF SERVICE AND NOW, this ~ day of~_~~___, 2004, I, James W. Harris, Esquire, hereby certify that a true and correct copy of the foregoing ANSWER TO COMPLAINT WITH NEW MATTER AND COUNTERCLAIM was served on Dean F. Piermattei, Esquire by United States Mail, first class, postage prepaid, addressed as follows: Dean F. Piermattei, Esquire Rhoads & Sinon, LLP One South Market Square P.O. Box 1146 Harrisburg, Pennsylvania 17108-1146 Attorney for the Defendant 48 East Princess Street York, Pennsylvania 17403 (717) 845-3505 I.D. #10373 L.B. SMITH, INC., PLAINTIFF R.D. CHRISTOPHER, DEFENDANT IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO: 04-1734 CIVIL DEFENDANT'S PETITION TO OPEN DEFAULT JUDGlVlENT Defendant, R.D. Christopher, by his attorney, James W. Harris, Esquire, respectfully petitions this Court to open the default judgment entered upon praecipe of Plaintiff, L.B. Smith, Inc., and avers as follows: 1. Plaintiff commenced this action on April 2, 2004, by Complaint in order to recover money damages alledging breach of contract by fraud. 2. This Complaint was not served on the Defendant immediately because it floated around in the mail and the Defendant did not receive it within a timely manner. 3. Defendant upon receiving it had to serach for counsel to represent him which took some time before he could retain counsel. 4. Plaintiff, before he could retain Attorney Harris to answer the Complaint, received a ten(10) day Default Notice on May 17, 2004. 5. On May 17, 2004, the Defendant faxed over a copy of this Notice to Attorney Harris. 6. On the afternoon of May 17, Attorney Harris called Plaintiff's Attorney, Dean Piermattei, and requested an extension, of time to answer the Complaint. 7. Attorney Piermattei called back the smme afternoon, while Attorney Harris was travelig out of state, and said his client refused to let him grant the extension. 8. Because of Attorney Harris' tight schedule and prior scheduled matters, he could not prepare an Answer and New Matter by May 24, 2004 for the Defendant. 9. Attorney Harris did file an Answer, New Matter and Counterclaim on May 27, 2004 on behalf of the Defendant. 10. Defendant possesses meritorious defenses to Plaintiff' s Complaint and allegations, for the reason that Defendant has alledged fraud in his New Matter and has countemlaimed against the Plaintiff as is more fully set forth in Defendant's Answer and New Matter attached as Exhibit "A". WHEREFORE, Defendant R.D. Christopher respectfully requests that this Court open the default judgment entered by Plaintiff L.B. Smith, in the above-captioned matter and permit Defendant to plead to the Complai!nt within twenty (20) days thereafter. Respectfully submitted, By: ~ squire 48 East Princess Street York, Pemnsylvania 17403 (717) 845-3505 I.D.//10373 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA L.B. SMITH, INC., PLAINTIFF R.D. CHRISTOPHER, DEFENDANT NC).: 04-1734 CIVIL ANSWER TO COMPLAINT WITH NEW MATTER AND COUNTERCLAIM 1. Admitted. 2. Admitted. 3. Admitted. 4. After reasonable investigation, the Defendant is without knowledge or a belief as to the truth of the averment. 5. See Answer #4 above. 6. See Answer #4 above. 7. Admitted. MAY 2 8 2004 8. Admitted. 9. It is alleged and asse]:te~'-~{-~-~ck~red Flag Equipment and Sales and Christopher did comply with all the terms of the contract, did utilize their best efforts to sell the equipment and did pay the Plaintiff approximately $900,000.00. t0. It is alleged and asserted that Christopher did not misrepresent any facts concerning performance of the contract nor Checkered Flag's finances. 11. 12. 13. 14. 15. 16. the protest. 17. 18. the protest. 22. 23. 24. 25. 26. 27. 28. 29. Admitted. See Answer #9 above. See Answer #9 above. See Answer ~4 above. See Answer ~9 above. See Answer #9 above. Further, the Plaintiff removed from Defendant's possession over Defendant's equipment 19. 20. 21. equipment above. See Answer #9 Admitted. See Answer #9 above. See Answer #9 above. It is alleged and asserted that the Plaintiff removed from Defendant's possession over Defendant's See Answer #9 above. See Answer #9 above. See Answer #9 above. No answer is required. See Answer #9 above. See Answer #9 above. See Answer #9 above. Defendant says the agreement speaks for itself. see Answer #9 above. Also -2- 30. See Answers 99 and #29 above. 31. See Answer #9 above. 32. See Answer #21 above 33. See Answer #9 above. 34. See Answer #21 above. 35. See Answer #9 above. 36. It is alleged and asserted that the Plaintiff did not suffer any damages because he breached the contract by removing the equipment from Defendant's possession. 37. See Answer #36 above. NEW MATTER FRAUD R. D. Christopher incorporates herein by reference paragraphs 1 through 37 above. 38. The Defendant never received all of the equipment promised by the Plaintiff. This constituted a material breach of the agreement between the parties. 39. The Plaintiff, after some equipment had been delivered to the Defendant, removed it from the possession of the Defendant, over Defendant's protest. 40. The Defendant had until January 10, 2004 to fulfill his obligations pursuant to the contract. -3- 41. The Plaintiff delivered equipment to the Defendant that was the subject of litigation without informing the Defendant of said fact. This constituted a material breach of the agreement between the parties. 42. Plaintiff's Complaint fails to state a claim upon which relief may be granted. 43. Plaintiff's failure to provide the equipment required under the terms of the contract was a material breach of the contract which bars Plaintiff's claims. 44. Plaintiff's failure to provide the equipment as required under the terms of the contract entered into between Plaintiff and Defendant bars Plaintiff's action by the defense of failure of consideration. 45. Plaintiff's failure to provide the equipment as required under the contract entered into between Plaintiff and Defendant was a surrender of Plaintiff' s rights under the contract and Plaintiff's claim is barred by the defense of waiver. 46. Plaintiff ' s failure to provide the equipment as required under the terms of the contract entered into between Plaintiff and Defendant bars Plaintiff's action by the defense of estoppel. WHEREFORE, Defendant Christopher respectfully requests that this Court enter judgment in his favor and against Plaintiff Smith for all consequential and incidental damages, including reasonable attorney's fees and costs and such other and further relief as this Court deems just and proper. COUNTERCLAIM AGAINS? PLAINTIFF R. D. Christopher incorporates herein by reference paragraphs 1 through 46 above. 47. R.D. Christopher ("Christopher") is an adult individual with an address of 8207 Lee Jackson Circle, Spotsylvania, Virginia 22553. Christopher was, at all times relevant hereto, President and owner of Checkered Flag Equipment and Sales, Inc. ("Checkered Flag"). 48. L.B. Smith is a Pennsylvania Corporation with its principal place of business located at 2010 State Road, Camp Hill, Cumberland County, Pennsylvania 17325. 49. Plaintiff is liable to Defendant in the amount of $5,000,000.00 as a result of Plaintiff's breach of the contract. 50. Plaintiff is liable to Defendant for all and any compensatory damages and consequential and incidental damages, including reasonable attorney's fees and costs. 51. Plaintiff is liable to Defendant for punitive damages. WHEREFORE, Defendant demands that judgment be entered in his favor and against Plaintiff on Defendant's counterclaim in the amount of $5,000,000.00, together with court costs and fees, or that in the event that Plaintiff has judgment against the Defendant on Plaintiff's cause of action, that Plaintiff's judgment be set off to the extent that Plaintiff's judgment exceeds Defendant's recovery on his claim. Respectfully submitted, By: ~ arrls, ~qulre Attorney for the Defendant 48 East Princess Street York, Pennsylvania 17403 (717) 845-3505 I.D. #10373 I verify ~hat the sta~%s ma,~s An this ANSWER TO COMPLAINT WITH NEW MATTER ~U~D COUNTERCLAIM subject ~ t~ ~n~Xttes of le Pa. C.S. 8e~iQ~ 49Q4 relmtin9 ~o CERTIFICATE OF SERVICE AND NOW, this ~ day of~~, 2004, I, James W. Harris, Esquire, hereby certify that a true and correct copy of the foregoing ANSWER TO COMPLAINT WITH NEW MATTER AND COUNTERCLAIM was served on Dean F. Piermattei, Esquire by United States Mail, first class, postage prepaid, addressed as follows: Dean F. Piermattei, Esquire Rhoads & Sinon, LLP One South Market Square P.O. Box 1146 Harrisburg, Pennsylvania 17108-1146 Attorney for the Defendant 48 East Princess Street York, Pennsylvania 17403 (717) 845-3505 I.D. #10373 DEFENDANT'S PETITION TO OPEN DEFAULT JUDGMENT ~o~d l)atol~ At,~- ~6r the ~efe~dant I ¥csrkr ~& 17403 845 3S05 iX03?3 CERTIFICATE~(~~ AND NOW, this/~ day oil, 2004, I, James W. Harris, Esqire, hereby certify that a true and ' of the foregoing DEFENDANT'S PETITION TO OPEN DEFAULT JUDGMENT was served on Dean F. Piermattei, Esquire by United States Mail, first class, postage prepaid, addressed as follows: Dean F. Piermattei, Esquire Rhoads & Sinon, LLP One South Market Square P.O. Box 1146 Harrisburg, Pennsylvania 171.08-1146 Attorney for the Defendant , 48 East Princess Street York, Pennsylvania 17 403 (717) 845-3505 I.D. #10373 1N THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA L.B. SMITH, INC., PLAINTIFF R.D. CHRISTOPHER, DEFENDANT NO.: 04-1734 CIVIL --/~ ORDER AND NOW, this day of_~ ,2004, upon consideration of Defendant s Petition to Open Default Judgment ~ __n--r-.vz: :/ .... :~, it is hereby ORDE .RED that tl~ ,~r ~ .7~.2___L?~,~___ ~ ,~ · _,, L.~- L.B. SMITH, INC., Plaintiff V. R.D. CHRISTOPHER, Defendant IN THE COLYRT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Docket No. 04-1734 - Civil NOTICE TO PLEAD TO: R.D. Christopher c/o James W. Harris, Esquire 48 East Princess Street York, PA 17403 You are hereby notified to file a written response to the enclosed New Matter within twenty (20) days from service hereof or a judgment will be en~Iered against you. Respectfully submitted, J~Ve~i~. 'l~erm at t ei, Esquire One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 232;-5731 Attorneys for Plaintiff 5227921 L.B. SMITH, INC., IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff : : Docket No. 04-1734 - Civil R.D. CHRISTOPHER, : Defendant : PLAINTIFF'S ANSWER TO DEFENDANT'S PETITION TO OPEN DEFAULT JUDGMENT NOW COMES, L.B. Smith, Inc., ("L.B. Smith") through its attorneys Rhoads & Sinon LLP and files the following Answer to Defendant's Petition to Open Default Judgment averring the following: 1. Denied. It is denied that Plaintiff commenced this action April 2, 2004 by Complaint. Rather, the Complaint was actually filed on April 21, 2004. It is admitted that the Complaint alleges that R.D. Christopher committed fraud. A copy of the Complaint is attached hereto as Exhibit "A" and incorporated herein by reference. 2. Denied. It is specifically denied that the Complaint "floated around in the mail" and that the Defendant did not receive it in a timely manner. Rather, pursuant to Pa. R.Civ. P. 4004, service was made upon the Defendant who is outside the Commonwealth of Pennsylvania, by certified mail, return receipt requested. The return receipt :shows that the Defendant accepted service on April 23, 2004 and April 24, 2004 (as the Defendant was served at two separate locations via certified mail), which is two days after the Complaint was filed. A copy of the Certificate of Service documentation is attached hereto as Exhibit "B" and incorporated herein by reference. 3. Denied. After reasonable investigation, L. B. Smith is without knowledge or information sufficient to form a belief as to the truth of the averments in this paragraph and the same are denied and proof thereof is demanded at trial. 4. Denied. After reasonable investigation, L. B. Smith is without knowledge or information sufficient to form a belief as to the truth of the averments in this paragraph and the same are denied and proof thereof is demanded at trial. It is admitted that the ten (10) day Notice of Default was prepared and sent to Defendant. 5. Denied. After reasonable investigation, L. B. Smith is without knowledge or information sufficient to form a belief as to the truth of the averments in this paragraph and the same are denied and proof thereof is demanded at trial. 6. It is admitted that on May 17, 2004, Attorney Dean Piermattei spoke with Attorney Harris. At that time, Attorney Harris requested ma extension of time to answer the Complaint. However, Attorney Harris was informed at the time, that an extension would have to be authorized by the Plaintiff and such authorization was unlikely given the prolong period of time Defendant had delayed resolving the outstanding issues in the Complaint when Defendant admitted to Plaintiff that he owed Plaintiff the money sought in the Complaint. 7. It is admitted that Attorney Piermattei called A.ttomey Harris the same day as the request for an extension of time and informed Attorney Harris' office that there would be no extension granted. The remaining allegations in this paragraph are specifically denied and specific proof is demanded at trial. It is admitted that L.B. Smith did not grant a further extension of time to the Defendant as the Defendant for months now has deceived the Plaintiff with respect to his actions regarding equipment that was provided to him on consignment and has prolonged resolution of this matter for the past six months. 8. Denied. After reasonable investigation, L. B. Smith is without knowledge or information sufficient to form a belief as to the truth of the averments in this paragraph and the same are denied and proof thereof is demanded at trial. 9. It is admitted that an Answer, New Matter and Counterclaim was filed on May 27, 2004 on behalf of the Defendant, however this was after Default Judgment had already been entered. 10. It is specifically denied that Defendant possessed a meritorious defense to Plaintiff's Complaint and allegations. By way of further answer, it is undisputed that the Defendant defrauded L.B.Smith with respect to the equipment provided to the Defendant on consignment. Specifically R. D. Christopher misled L.B.Smith as to when and if sales of the equipment took place, failed to remit to L. B.Smith monies from the sale of the equipment, used the equipment and sales proceeds to pay off personal debts and antecedent debts, sold equipment and falsely represented to L. B. Smith that it was on rent and to that end, generated invoices which proved to be false rental invoices and sold equipment multiple times to different parties, collecting the monies from all parties and absconding with the same. Christopher has admitted under oath in related litigation that he owes millions of dollars to L.B. Smith. By way of further answer, see L. B. Smith's Complaint attached hereto as Exhibit "A". WHEREFORE, L. B. Smith respectfully requests th;at this Court deny the Petition to Open Default Judgment for the reasons set forth above and the New Matter below. NEW MATTER 11. Defendant's own Petition admits that his attomey had the Complaint and was aware that no extension would be granted, a full week prior to entry of a Default Judgment. See paragraphs 4-7 of Defendant's Petition. 12. The only excuse offered by defense counsel for not answering the Complaint in a timely fashion is because he had a "tight schedule and prior scheduled matters." See paragraph 7 of Defendant's Petition. 13. It is clear under Pennsylvania law that Courts will look at the reason for failure to timely answer a Complaint and determine whether a "reasonable explanation" was provided for the failure to timely answer the Complaint prior to entry of Default Judgment. Romeo v. Looks, 535 A.2d 1101 (Pa. Super. 1987). 14. It is well established under Pennsylvania law, Courts will not accept as a reasonable excuse for setting aside Default Judgment claims that counsel had other demands on his time or was to busy. Walters v. Harleysville Mut. Cas. Cc,_., 417 Pa. 438, 2078 2d 852 (1965) (the Court would not open Default Judgment where the excuse provided was defense counsel was unable to timely file an answer because of his busy trial schedule and business appointments). 15. It is believed that Defendant has failed to put forth a legitimate reason why he failed to file a timely response to the Complaint notwithstanding the fact that he was aware of the pending deadline for default. WHEREFORE, it is respectfully requested that Defendant's Petition to Open Default Judgment be denied and Defendant's responsive pleading be stricken. Respectfully submitted, RHOADS & S1NON LLP ~~'lSi~att ei, Esquire One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff Date: July 20, 2004 CERTIFICATE OF SERVICE I hereby certify that on this 20th day of July, 2004, a true and correct copy of the foregoing was served by means of United States mail, first class, postage prepaid, upon the following: James W. Hams, Esq. 48 East Princess Street York, PA 17403 Teresa L. Paulharnus COPY Dean F. Piermattei, Esquire Attorney I.D. bio. 53847 Stephanie E. DiVittore, Esquire Attorney I.D. bio. 85906 RHOADS & SI'NON LLP One South Market Sq., 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for L.B. Smith, Inc. L.B. SMITH, INC., Plaintiff V. R.D. CHRISTOPHER, Defendant IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA : i DocketSo. 0~"~{-~¢ ~ : : NOTICE YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, yon 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 jud.gment may be entered against you by the Comet without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE;, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. CUMBERLAND COUNTY COURT .ADMINISTRATOR 4th Floor, Cumberland County Cmmhouse Carlisle, PA 17013 (717) 240-6200 AVISO USTED HA SIDE DEMANDADO/A EN CORTE. Si usted desea defenderse de las demandas que se presentan mas adelante en las siguientes pa~as, debe tomar accion dentro de los proximos veinte (20) dias despues de la notificacion de esta Demanda y Aviso radicando personalmente o por medio de un abogado una comparecencia escrita y radicando en la Corte por escrito sus defensas de, y objecciones a, las demandas pre~,;entadas aqui en contra suya. Se le advierte de que si usted falla de tomar action como se describe anteriormente, el easo puede proceder sin usted y un fallo pot cualquier suma de dinero reelamada en la demanda o cualquier otra reclamation o remedio solicitado por el demandante puede ser dictado en contra suya por la Corte sin mas aviso adicional. Usted puede perder dinero o propiedad u otros derechos importantes para usted. USTED DEBE LLEVAR ESTE DOCUMENTO A SU ABOGADO INMEDIATAMENTE. SI USTED NO TIENE UN ABOGADO O NO PUEDE PAGARLE A UNO, LLAME O VAYA A LA SIGUIENTE OFICrNA PARA AVERIGUAR DONDE PUEDE ENCONTRAR ASISTENCIA LEGAL. CUMBERLAND COUNTY COURT ADMINISTRATOR 4~ Floor, Cumberland County Courthouse Carlisle, PA 17013 (717) 240-6200 Dean F. Piermattei, Esquire Attorney I.D. No. 53847 Stephanie E. DiVittore, Esquire Attorney I.D. No. 85906 KHOADS & SINON LLP One South Market Sq., 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233 -5731 Attorneys for L.B. Smith, Inc. L.B. SMITH, INC., : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff : : V. : Docket No. R.D. CHRISTOPHER, : : Defendant : COMPLAINT NOW COMES, Plaintiff L.B. Smith, Inc. ("L.B. Smith"), by and through its attorneys, Rhoads & Sinon LLP, and files the within Complaint and, in support thereof, avers as follows: 1. L.B. Smith is a Pennsylvania Corporation with its principal place of business located at 2010 State Road, Camp Hill, Cumberland County, Pennsylvania 17325. 2. At all relevant times, R.D. Christopher ("Ckristopher") was an adult individual with an address of 8207 Lee Jackson Circle, Spotsylvania, VA 22553. Christopher was, at all times relevant hereto, President and owner of Checkered Flag Equipment Sales & Transport, Inc. ("Checkered Flag"). 3. This action arises under the laws of the Commonwealth of Pennsylvania and is within the subject matter of this Court. Venue is proper pursuant to Rules 1006 and 2103 of the Pennsylvania Rules of Civil Procedure. Pa. R. Civ. P. 1006, 2:103. 513458.1 4. For over 65 years, L.B. Smith was engaged in the business of the distribution and sale of heavy equipment, including road building and constraction equipment. 5. In 2003, L.B. Smith determined that it would no longer continue in the business of the sale of heavy equipment, instead intending to v~[nd up this portion of its business activities. 6. As a result, L.B. Smith became interested in selling its heavy equipment inventory, located at L.B. Smith owned and/or operated facilities throughout the Eastern United States. 7. In connection with the sale of its heavy equipment inventory, L.B. Smith contacted Christopher regarding the sale of certain equipment by Christopher and his company, Checkered Flag. 8. During the period of June and July, 2003, L.B. Smith representatives had several discussions with Christopher regarding his ability to sell L.B. Smith equipment to end users. 9. In these discussions, Christopher repeatedly represented to L.B. Smith that, in the event L.B. Smith entered into an agreement whereby L.B. Smith would authorize Checkered Flag to sell L.B. Smith equipment, Checkered Flag and Christopher would comply with the terms of the agreement, utilize best efforts to sell the equipment, provide prompt notification of the sale of the equipment and, upon sale of a piece of equipment, promptly forward payment L.B. Smith, of an "Agreed upon" price. 10. Christopher also expressly represented, during these discussions, that Checkered Flag was performing acceptably and was not experiencing financial difficulties. -2- 11. As a result of these representations by Christopher, L.B. Smith determined it would utilize Checkered Flag to sell a portion of its heavy equipment inventory and entered into a Letter of Agreement for Consigmnent with Checkered Flag dated July 27, 2003 ("Consignment Agreement"). (A copy of the Consigmnent Agreement is attached hereto as Exhibit "A" and incorporated herein by reference). 12. Christopher represented to L. B. Smith that he and his company, Checkered Flag, would use its best efforts to sell L. B. Smith's Equipment as identified on the Equipment List attached to the Consignment Agreement ("Equipment"). 13. Pursuant to the discussion and understanding between the parties, the Equipment was owned by L.B. Smith, but was to be held by Christopher and Checkered Flag on consignment and, in the event of a sale, Christopher -~ again consistent with Christopher's representations, -- would provide timely notification of the sale to L.B. Smith and promptly forward payments received from any customers in an amoum equal to the "Agreed Price" for each piece of Equipment. 14. Based on Christopher's representations, L.B. Smith also continued with its dissolution efforts and ceased its own efforts to sell the Equipment. 15. Defendant Christopher also continually represented to L. B. Smith that he would uphold the Consignment Agreement on behalf of Checkered l:'lag and utilize his best efforts with respect to the sale of the Equipment, as well as payment to L.B. Smith. 16. Christopher did not, at any time, inform L.B. Smith that he or Checkered Flag would refuse to proceed with their obligations, that he or Checkered Flag would not comply with the terms of the Consignment Agreement, that his earlier representations regarding sale of the -3- Equipment or Checkered Flag's performance or payment to L.B. Smith were erroneous, or that Checkered Flag and/or Christopher were experiencing financial difficulties. 17. L.B. Smith only agreed to enter into the Consignment Agreement, allow the Equipment to leave its possession and be placed with Christopher and work with Christopher, as a result of Christopher's representations. 18. Following these discussions L.B. Smith proceeded to perform by releasing the Equipment to Christopher. 19. After performance began, L.B. Smith becarae aware -- through notification by third parties which were interested in purchasing, or allegedly entered into contracts to purchase the Equipment, that Christopher was not performing consistant with his representations. 20. At this time, L.B. Smith contacted Christopher and, during frequent discussions during this period, Christopher represented to L.B. Smith that he and Checkered Flag were properly performing pursuant to Christopher's prior representations and the Consigmnent Agreement, and he would continue to utilize his best effort:s to market and sell the Equipment, provide proper notification of such sales, and promptly forwarded -- and would continue to forward -- any and all payments received for the Equipment to L.B. Smith. 21. As a result of Christopher's representations, L.B. Smith took no steps to terminate the Consignment Agreement, or retrieve the Equipment in Cl:a:istopher's possession. 22. Despite Christopher's representations howew~r, and communications from L.B. Smith, Defendant Chr/stopher refused to honor his obligations or proceed as specifically represented to L.B. Smith. -4- 23. Defendant Christopher, during his contact with L.B. Smith and with the intent to induce L.B. Smith to enter into the Consignment Agreement, represented that he would ensure Checkered Flag's performance of any and all contractual obligations, ensure prompt payment to L.B. Smith of funds received fi.om the sale of Equipment, ensure immediate notification to L.B. Smith of the sale of Equipment, and he represented thai he and Checkered Flag were in satisfactory financial condition. 24. Also, following execution of the Consignment Agreement, Defendant Christopher expressly represented to L.B. Smith, with the intent to induce L.B. Smith to continue to perform its obligations under the Consignment Agreement, that he ~nd Checkered Flag were complying with the contractual obligations and would continue to do so,, including providing notice of sales and immediate payment of funds received for the Equipment. Christopher represented that he and Checkered Flag would work to address all of L.B. Smith's concerns regarding the Consignment Agreement and would work to address any concerns of potential purchasers of L.B. Smith Equipment. COUNT I - FRAUD 25. L.B. Smith incorporates herein by reference Paragraphs 1 through 24 above. 26. Christopher's representations were false in that he: (a) failed to inform L.B. Smith of sales of the Equipment; (b) failed to remit to L. B. Smith monies from the sale of the Equipment; (c) sold Equipment and falsely represented to L. B. Smith that the Equipment was missing because it was actually on "rent". To that end, Christopher provided to L.B. Smith false rental invoices; -5- (d) gave some of the Equipment to parties in forgiveness of debt owed by Christopher and/or Checkered Flag and failed to inform L. B. Smith of the same and failed to pay L. B. Smith for this Equipment; (e) sold some of the Equipment multiple times, keeping the money from each transaction and exposing L. B. Smith to liability lawsuits; (f) failed to use his best efforts to ensure that he, and Checkered Flag would dispose of the Equipment as per the parties discussions and agreement. 27. Christopher knew that his representations to L.B. Smith were false and knew and/or reasonably knew that L.B. Smith would rely upon these false representations. 28. Christopher's false representations were material in inducing L.B. Smith to agree to provide Christopher and/or Checkered Flag with the Equipment, and to enter into a Consignment Agreement and continue doing business with Christopher even when Christopher continued to represent that the Equipment not on Checkered Flag's lot was actually being rented. 29. Some of the aforementioned material misrepresentations were made prior to L.B. Smith's execution of the Consignment Agreement, or tlhe transfer of the Equipment to Christopher's possession and were made with actual knowledge of the falsity of the statements, at the time they were made, or in reckless disregard of the truth or falsity. 30. In justifiable reliance upon Christopher's representations, L.B. Smith agreed to do business with Christopher and Checkered Flag and agreed to transfer the Equipment to Christopher's possession. -6- 31. Christopher's representations after execution of the Consignment Agreement were also false, as he did not intend for Checkered Flag to begin honoring its contractual obligations, did not intend to work to address the concerns raised by L.B. Smith and did not intend that any and all payments received after this period would be promptly forwarded to L.B. Smith. 32. These misrepresentations were material as L.B. Smith declined to terminate the Consignment Agreement, but instead continued to perform its obligations pursuant thereto, in reliance on these misrepresentations. 33. The material misrepresentations following the Consignment Agreement were made with the intent to induce L.B. Smith to continue to perform under the Consignment Agreement. Further, these material misrepresentations were made with actual knowledge of their falsity or in reckless disregard of the troth or falsity of the statements. 34. In justifiable reliance upon Christopher's representations, L.B. Smith declined to terminate the Consignment Agreement and instead continued to honor its contractual obligations. 35. Christopher's material misrepresentations aft:er execution of the Consignment Agreement were made with actual malice and constitute willfi~l misconduct. 36. As a direct and proximate result of Christopher's false representations, L.B. Smith suffered damages in the amount of $3,500,000. 37. L.B. Smith is entitled to punitive damages as a result of Christopher's false and misleading statements, as the acts of Christopher were intentional, willful, and malicious and justify the imposition of punitive damages. -7- WHEREFORE, Plaintiff L.B. Smith, Inc. respectfully requests judgment in its favor and against Defendant R.D. Christopher in an amount of $3,5:00,000 together with interest, costs, attorneys' fees, punitive damages and any other relief that this Court deems appropriate. Respectfully submitted, I~IOADS & SINON LLP ~'t~ephani~E. DiVittore, Esquire One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (1717) 233-5731 Attomeys for L.B. Smith, Inc. -8- .04/21/04 WED 08:01 FAX 717 231 6637+ RHOADS SINON LLP ~003 VERIFICATION R.E. Jordan, H, deposes and says, subject to the pemflties of 18 Pa.C.S.A. §4904 relating to unswom falsification to authorities, that he is the President of L.B. Smith, Inc., that he makes this verification by its authority and that the facts set forth in the foregoing Complaint are true and correct to the best of his knowledge, information and belief. Dated: q-~'~/- a q EXHIBIT "A" CHECKERED FLAG EQUIPS[E. NT SALES .4_ND TRANSPORT, P. O, BOX 436 THORN?BURG, TRG]LNIA 22565 TEl 540-582-7704 ~r.4.X 540-~82-7705 AU8 0 JuN 2;,_~.~_~'a: .M'?. ?Jch----d E..To?'~ E ChaL,_~z cf ,.Se Board & CEO L. B. Sh~,'ETH, ~C. 6375 .Mer':-uW .Mezhz~csb:z.-~, PA 17050 Re: len'-r of A~eemen*. fo: Co~i_m:k.ment T~s L.'.~er of A~eemer. t fur Consi~o'nment se:es z'~xh the mutual u.nderstandmgs a-~-eemen:s by ~nd bet, veer L. B. ~.rmm, ~.-c. ~erein~-rer referred to as "Seller:') and Checkered Flag '~ ;,-?o-', ~." , _.qu,._ ....... S~2es & Tr~nspor':: inc. (here's. after role:Ted to ~_ Bu).. ). Seller ov, m_~ ~! of th'. equipment listed on Ex~hJbi'£ "A", a copy of wkich is aaached hereta (th* "Equipmen:"). Sdi~r h~ a le~ wi~ M & T B~ s~cmed by a ~st secmfiB, inter,st ~ the Equipment. Buyer hzreby ac~mowledgzs thc existence and con~u~c~ of fl~e first secufi~ ~terest h~ld by M & T B a*3:. Seller hereby oonsi~s the Equipment to Buyer for sale to Buyer'~ customers. Buyer ac?_'aowledges that Seller wi!! file ~, 5_n~¢ing statement with respect to the Equipment reflecting that the Equipment is owned by Seller and held by Buyer on consi=m-~mem. Buyer represents there ~re ns sec~e~ creditors da[ming mn interest in tko inventory or equipment of Buyer that should be notified of this consi~"Lment in order to peffkct Seller's consi~ament interests other than: Seller Q__=.. Ior .... . :od-.~ - Buyer to transport the Equipment. at Buyer's sole expense, to, Buyer's sales !ooze.on. Prior to the azcep'.ance by Buyer of each piece of Equipment for trmsport, Seller shall provide yard ?ersopmel to s;,__~ ~,nd :-mn each piece of Equipment for Buyer's inspection. Seller agrees all 0£ th: Equipm.~nt will be in rzu.ning condition. Seller a__~-.ees ti.at Se!it's yard persomne! xd.!l sta,'-t the equi?menr z_nd move il to the pick up area prior to Buyer's pickup and transport, k. addition: Seller's p~-rsomnd wi!! assist Bul.'er's &%,ers d,-fing ;he loading. Buyer age_ets to iasure uh_~ Equipmenr for its Dali market value w~!~ Zht Equkpment is in Buyer's pcs:caslon from pickup through delh'eD' to Bul,~r's fina! customers. Sellzr shall have Bui.'er and M & T Ba~: named as additi~na~ ins'~-*d~ en ~uch insuran:~ ~d shall ddiver a c:n:.ficz~ c.f in~z-an:: tc B:y:r and M & T Ba~: Bui,'~r ogees to ad-,'e~is: th: Equipment in MTB K OOl 0 Buv,'r z=-.e~ to sell thc Equipment: "~ is"' ~d vdthout z c~tomer.~ for c~sk Upon a sale to a third pm'~.', Buyer sn~'. 5quigm:nt ~em ~5~:. A~ s~l:s to ~d by Buyer ~r: subject t~ s_cm~ m ..... L ~ ~ch p~sc~ of Eq~pment so~d. U~oz Bu~... Seller sh~!~ ~ soon u possible oot~u ' '~:~ '; ' " ,h-, p~,.c~ o. ~..._.~m_~.t az s~. forth o," E.'x.tSbi~ A. its salt~. ~'¢s'~'~ EZC. 3or .,"ea'.~e ~"~,)' w~-'~'. P~.~2~ ~o:-~. S~'!~:. Buyer will provide mont~y sa)ts repom~ to Se!lee mn.,-' 5( & T Be,4' and wi!! ~mnt M & T !q~ ..... ~ is loczmd ~o Buyer sh~!l execute a Pro:r-;ssow Not~, a copy of w?2:l is anached hereto as ExMbit B, at ~ rue of one h~h' ~f N~w York pfi~: for th~ t¢~ of nh: Nots. Tn~ note shall haw a of six months. At ~: ~nd of ~e sLx-month t~ of ~e Not,, Buyer sh~] pay the Promis~eW Note balmnce to Seller as ~e purch~e Ffice ~:r ~s unsold Equipment. Buyer ackmowledg=s mhd consenu to Sdler's coHateral zssi?~n: of t~s A~sement, ~e Dmmnchng statement to b* flied by Sci!st mhd ~e Pro~ssoo' Note to M & T Etak. The l=ws of ~e Commonwealth of Pemnsylv~J~ shall govern this consignment transaction. T?Js is the whole a~eement bern, eon sene om'lies. )my prevision of this Letter of A~eemenl fouzd to be 5n'¢a!Jd by a court of ccmpetenu[ ,u.dsdi:tisn shall not invflidate the whole a~eement. Ln consideration for Lbs mutual a~eements ~d '.:_ndersta.ndings bettve:n them, the p~rties he.~.o~ ex,.~u.e tm. I_.;rter of A~e~ment for Consi_.s:mmen:. ?,ZAD & r, GR_I_D TO: M & T BA-NK READ & AGREED TO: C~ECKEP~D FLAG EQLre~.IENI S.-~,ES TP.-a,R.'SPORT, IWC. _ ROBERT D. CHX.ISTOPt~R PKES[DINT R_E:~_D & AGREED TO: L. B. S.bfiIH. P~C. C_. ~2-d,L-a, OF T~II BO3~,D £ CEO MTBK 0011 o Z> PR05¢ISS OR5.' NOTE $5260.000.00 Jul v ~.. '%qt~3 · ~,orowe:--). at 620! M~l~zd Road: ~ombm-g: VL-~L~a 225~5 - om,. of L. B.' S!~'ffTH. ~C. (the ':L~nd~r':), at 6375 M,rcm?. Mash~csb:}=' pt 27050 (o: a: such e~er rla:e ~ the lendxr m~v desi~ate b x~ring) the sram of S5,250:000.00 ~i~n ~:~r:s: ~o- Ju:y 22, 2003. o:: th: mnp~d p~mc/p~! at the rate Unpaid pr!~cipaI user the Due Date shown, below sh~ll accrue interest at a rate of 4% ~,n_nually u.n~l n~d. . pfi.ucgpaJ is paid i,, ~a:'%]e tmpa:d ?..ncip~ will accrue rater:st at tiqe end of each month until the 22.. 2004.I -- ' ' and interest al, al! be payable at the: ?rom./sso,-), Note due date of Jmaum? .~anounts paid to Lender ¢OISlllh"It tO t. kat ce~a:~'l ]Loner of A~eement for C0nsi=m'~,ment be~ eon the p~ ;les of :yen date herewiLh -~hall be treated a:~ payments with respect to t. kis Note. A//p%mems on ~h;s Note shah be applied first to Principal. Interest shall accrue on the '~.p.=;d p-.-'mcipal balanc-, of the Note at the end of each mc:nth u_m/] the Due Date of J~uary ~? 2004. --, Z ~5' .~a...~nt obligation unoer th.is Note is not paid when due, the remaining unpaid phncipal br-./ance and ~v accrue~ interest shall become due i-rm'nediately at the option of Lender. The Borrower rosen'es the r4.'~.:t to pr:pay th. is note (in whole or in p:~t) prior to the Due Date with no prepa.vment penal,'..-,,. - If mn,,, of the folJowin~, events of d-foul, oc- - ' ' ~ - ' · . Borrower to'the Lender s:--~;='.-o- .. 7 ... ~m, thi.s Note a_nd my ocher obhgatmns of the · ,~=;. ;,-,.om_ cu.- m:med:atel% vqth_om domed or notice: !) the fai]~: of the Boaower to pa'~' the p~ncipal as a~eed on or before the Date " ~ the 3_ f -. : ..... fi mg o b=."-t:'-up.c., proceedings mvol.,'m.~: th.'. Bo..-_. ower a, a debtor; £r-'e me!ina cfa c--n---i a?=,-m=,, +-,, 'he h=~ o~- [VlTB I( 0015 ?,'c r"_n:wa! or ex;_~.nsi:..-. cf t,hds No_. J,lz, m ~..z,:e-,'.--_= r-ny flint oz :he Land:r ' '-: -.' ----%;'~%" C'.' L~2.~ .~:0~ , ' .... .' '~' - ..... - szz-I z_fi::: ,=o c=::x7,' or ?.e om'-,g=-:mns Bc..-ro;vs-. ~" fzh'~ 05 ~s ,Lone- ' , .' .... sma!. o'~ con_=,.'rued m accotone: wkh t,h: laws of Lh: Common'a,,,.zlth of ? e~nsyh'~.-j z. ~P O~ow=r: --: ,~~ -- :, .;. ~-' z: ~3 ,: Merc~,-.,' Dna'=, ."d*:k~%:.csbur£. PA 17050. Cl~_~ C~P~D FLAG EQL_-?:.,.-'=NT S.~-ES & T"~NSPORT. L~C. MTB K 0016 L.B. SMITH, INC., IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff V. R.D. CHRISTOPHER, Docket No. 04-1734 - Civil Defendant: CERTIFICATE OF MAILING ~ ~_~ I, De~ F. Piema~ei, Esquire aaomey for Plaintiff, L. B. Smi~, ~c., ~ h~by certify that I served a copy of Plaintiff's Complaint upon Plaintiff at the address below, and hereby attached the original Certified Mail, Remm Receipt Requested Receipts dated April 23, 2004 and April 24, 2004 as Exhibit "A". R. D. Christopher P.O. Box 436 Thomburg, VA 22565 R.D. Christopher 8207 Lee Jackson Circle Spotsylvania, VA 22553 Respectfully submitted, RHOA:DS & SINO1)I, LLP ~': D;an~,~rmattei, Esquire Step~ie E. DiVI~ore, Esquke One South M~ket Squ~e P. O. Box 1146 H~isb~g, PA 17108-1146 (717) 233-5731 Attomeys for Plaintiff Date: April 27, 2004 EXHIBIT "A" Ps Form 3811, August 2001 rl~eer~ ~lled Mall ri E~ Mall [3 ~nsumd ~. [] O.O.D. 4~ Resmcmd O~ak~¢' ~ r-m~ OYes · Complete Items 1, 2. and 3. Nao complete Item 4 ~ Rest~cted De~m~y b de,red. · · Print your name and address on the reverse so that we cen return the can:l to you. · Attach this card to the back of the mallplece. [] Imumd MaU O-~.O.D. 4. R6~",,~i D ~llve~? (E~dra Fee) OYes PS Fo~rn 3811, August 2001 Dornestb Return Receipt L.B. SMITH, INC., PLAINTIFF VS. R.D. CHRISTOPHER, DEFENDANT IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA N'O.: 04-1734 CIVIL REPLY TO PLAINTIFF'S NEW MATTER 11. Allegations #11 through/ti 5 are improperly plead as new matter except for the two cases cited under the heading of New Matter. The Plaintiff simply has regurgitated the allegations set out in the Defendant's Answer to the Complaint. Further, the cited case law is not controlling herein and therefore, is not dispositive on the issue of whether the default judgment should be opened. On the contrary, this case law supports the Defendant's reasoning for opening the default judgment. These two cases clearly set out the test for opening up a default judgment, (1) a prompt filing after entry of the default judgment, (2) giving a reasonable excuse for failure to file an answer and (3) the proffering of a defense on the merits. The Defendant has met the test herein. Finally, the Defendant lives in Virginia and l~tis counsel practices in Pennsylvania. Plaintiff's counsel was aware of this fact from the beginning of this litigation and defense counsel emphatically conveyed this to Plaintiff's connsel on May 17 and his reasons for not being able to file an answer that week because Defendant's counsel was on the way out of state when he spoke to Plaintiff's counsel. In addition, defense counsel had not had an opportunity to meet with the Defendant or to review anY documentation for the purpose of preparing an answer. Lastly, the Defendant filed his answer one day after the default judgment was entered. WHEREFORE, the Defendant prays that this Honorable Court enter judgment in favor of the Defendant. Respectfully submitted, By: .... . . James W Hams, Esquire Attorney for the Plaintiff 48 East Princess Street York, Pennsylvania 17403 (717) 845-3505 I.D. #10373 CERTIFICATE OF SERVICE AND NOW, this .~~dayday o .f~~, 004, I, James W. t of the foregoing REPLY Harris, Esquire, hereby certify that a true ant- correct cop3 TO PLAINTIFF'S NEW MATTER was served on Dean F. Piermattei, Esquire by United States Mail, first class, postage prepaid, addressed as follows: Dean F. Piermattei, Esquire Rhoads & Sinon, LLP One South Market Square P.O. Box 1146 Harrisburg, Pennsylvania 17108-1146 Jame~W l-fa3ns, Esqmre Attorney for the Defendant 48 East Princess Street York, Pennsylvania 17 403 (717) 845-3505 I.D.//10373