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HomeMy WebLinkAbout09-0678PETERS & WASILEFSKI By: Charles E. Wasilefski, Esquire Attorney #21027 2931 North Front Street Harrisburg, PA 17110 [7171238-7555 Attorneys for Plaintiff, Nature's Value, Inc. NATURE'S VALUE, INC., IN THE COURT OF Plaintiff COMMON PLEAS FOR CUMBERLAND COUNTY, V. PENNSYLVANIA RITE AID CORPORATION, NO. ?? Defendant CIVIL ACTION - LAW JURY TRIAL DEMANDED NOTICE YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER, 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 S. Bedford Street Carlisle, PA 17013 (717) 249-3166 (800) 990-9108 AVISO USTED HA SIDO DEMANDADO/A EN CORTE. Si usted desea defenderse de las demandas que se presentan mas adelante en las siguientes paginas, debe tomar acci6n dentro de los pr6ximos veinte (20) dias despu6s de la notificaci6n 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 presentadas aqui en contra suya. Se le advierte de que si usted falla de tomar acci6n como se describe anteriormente, el caso puede proceder sin usted y un fallo por cualquier suma de dinero reclamada en la demanda o cualquier otra reclamaci6n 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, LLAME O VAYA A LA SIGUIENTE OFICINA. ESTA OFICINA PUEDE PROVEERLE INFORMACION A CERCA DE COMO CONSEGUIR UN ABOGADO. SI USTED NO PUEDE PAGAR POR LOS SERVICIOS DE UN ABOGADO, ES POSIBLE QUE ESTA OFICINA LE PUEDA PROVEER INFORMACION SOBRE AGENCIAS QUE OFREZCAN SERVICIOS LEGALES SIN CARGO O BAJO COSTO A PERSONAS QUE CUALIFICAN. CUMBERLAND COUNTY BAR ASSOCIATION 32 S. Bedford Street Carlisle, PA 17013 (717) 249-3166 (800) 990-9108 PETERS & WASILEFSKI By: Charles E. Wasilefski, Esquire Attorney x{21027 2931 North Front Street Harrisburg, PA 17110 [717] 238-7555 Attorneys for Plaintiff, Nature's Value, Inc. NATURE'S VALUE, INC., Plaintiff V. RITE AID CORPORATION, Defendant IN THE COURT OF COMMON PLEAS FOR CUMBERLAND COUNTY, PENNSYLVANIA NO.D?1 G79 /e CIVIL ACTION - LAW JURY TRIAL DEMANDED COMPLAINT NOW COMES, Plaintiff, Nature's Value, Inc. ("Nature's Value"), by and through its attorneys, Peters & Wasilefski, and files this Complaint against Defendant, Rite Aid Corporation ("Rite Aid"), for the following reasons: 1. Plaintiff, Nature's Value, is a California corporation that has its principal office located at 1270 E. Arcacia, Ontario, California 91761. 2. Defendant, Rite Aid, is a corporation having its principal office located at 30 Hunter Lane, Camp Hill, Cumberland County, Pennsylvania 17011 and is doing business throughout the Commonwealth of Pennsylvania. 3. On or about December 8, 2006, Defendant, Rite Aid, entered into a Guaranteed Sales Agreement with Plaintiff, Nature's Value, for purposes of purchasing and selling Plaintiff, Nature's Value, health products at Defendant, Rite Aid's, customer service centers and retail locations. See Guaranteed Sales Agreement attached hereto as Exhibit "A". 4. Pursuant to the Guaranteed Sales Agreement, since December 8, 2006, Plaintiff, Nature's Value, has produced, sold, delivered and invoiced product to Defendant, Rite Aid, that has the invoiced value of One Million Six Hundred Sixty-nine Thousand Two Hundred Ninety-two Dollars and Sixteen Cents ($1,669,292.16) as of March 20, 2008. 5. As a part of the ongoing relationship, Defendant, Rite Aid, required Defendant, Nature's Value, to fund advertising campaigns, promotional items, display allowances, trade show displays, free product, product returns and other sundry costs and expenses. Such items were to be credited to Defendant, Rite Aid, in the sum of One Million Two Hundred Eighty-seven Thousand, Six Hundred Sixty Dollars and Three Cents ($1,287,660.03), if Defendant, Rite Aid, complied with its payment obligations to promptly pay invoices issued by Plaintiff, Nature's Value, for product sold and delivered to Defendant, Rite Aid. 6. In spite of Plaintiff, Nature's Value, producing, selling and delivering product valued at One Million Six Hundred Sixty-nine Thousand Two Hundred Ninety- two Dollars and Sixteen Cents ($1,669,292.16) as of March 20, 2008, Defendant, Rite Aid, has failed to pay and/or refused to pay anything to Plaintiff, Nature's Value, for the product that it has ordered and received. 7. On August 2, 2007, Plaintiff, Nature's Value, sent a letter to Defendant, Rite Aid, outlining the status of the expenditures and the account stated as of that time 2 and to request that the sum of Five Hundred Seven Thousand Two Hundred Seventy-five Dollars and Twelve Cents ($507,275.12) be paid to Plaintiff, Nature's Value. See Letter dated August 2, 2007 attached hereto as Exhibit "B". 8. Receiving no payment toward the product sold and delivered to Defendant, Rite Aid, on March 19, 2008, Plaintiff, Nature's Value, again demanded a resolution to the outstanding monies owed by Defendant, Rite Aid, on the account. See Letter date March 19, 2008 attached hereto as Exhibit "C". 9. Taking into consideration credits that would be taken if Defendant, Rite Aid, would be compliant with its payment obligations, as of March 20, 2008, the statement of account owed by Defendant, Rite Aid, is in the slum of Three Hundred Eighty-one Thousand Two Hundred Thirty-Six Dollars and Sixty-one Cents ($381,236.61). See Statement of Account as of March 20, 2008 attached hereto as Exhibit "D". COUNTI BREACH OF CONTRACT (For Goods Sold and Delivered) 10. Plaintiff, Nature's Value, incorporates the allegations contained in Paragraphs 1 through 9 above as if fully rewritten herein. 11. Defendant, Rite Aid, has ordered and received product sold and delivered to Defendant, Rite-Aid, and has failed and refused to pay for any product that it has accepted and from which it has received financial and other benefit. 12. Pursuant to the Guaranteed Sales Agreement dated December 8, 2006, Defendant, Rite Aid, was required to promptly pay all outstanding, invoices. 3 13. As a result of its failure to promptly pay all outstanding invoices, Defendant, Rite Aid, has breached the contract and Plaintiff, Nature's Value, has sustained damage in the sum of One Million Six Hundred Sixty-nine Thousand Two Hundred Ninety-two Dollars and Sixteen Cents ($1,669,292.16), which represents the value of the product that was ordered by, sold and delivered to Defendant, Rite Aid, WHEREFORE, Plaintiff, Nature's Value, demands judgment against Defendant, Rite Aid, in the sum of One Million Six Hundred Sixty-nine Thousand Two Hundred Ninety-two Dollars and Sixteen Cents ($1,669,292.16) plus pre judgment interest, post judgment interest, attorneys' fees and the costs of this litigation. COUNT II FAILURE TO PAY ACCOUNT STATED 14. Plaintiff, Nature's Value, incorporates the allegations contained in Paragraphs 1 through 9 above as if fully rewritten herein. 15. In accordance with the Guaranteed Sales Agreement, Defendant, Rite Aid, is to promptly pay all outstanding invoices, less any and all cash discounts or other debit amounts due to Defendant, Rite Aid. 16. Taking into consideration that Defendant, Rite Aids is to receive credit for all cash discounts or other debit amounts due to it, as of March 20, 2008, the Account Stated and owed by Defendant, Rite Aid, is in the sum of Throe Hundred Eighty-one Thousand Two Hundred Thirty-six Dollars and Sixty-one Cents ($381,236.61). See Account Stated attached hereto as Exhibit "D". 4 17. Plaintiff, Nature's Value, has demanded payment in full on the Account Stated and Defendant, Rite Aid, has failed and refused to make any payment on the account. 18. By reason of Defendant, Rite Aid's, failure and refusal to pay the amount of the account stated, Plaintiff, Nature's Value, has been damaged in an amount of at least Three Hundred Eighty-one Thousand Two Hundred Thirty-six Dollars and Sixty- one Cents ($381,236.61). WHEREFORE, Plaintiff, Nature's Value, demands judgment against Defendant, Rite Aid, in the sum of Three Hundred Eighty-one Thousand Two Hundred Thirty-six Dollars and Sixty-one Cents ($381,236.61).plus pre judgment interest, post judgment interest, attorneys' fees and the costs of this litigation. COUNT III UNJUST ENRICHMENT 19. Plaintiff, Nature's Value, incorporates the allegations contained in Paragraphs 1 through 9 above as if fully rewritten herein. 20. Plaintiff, Nature's Value, has produced for, sold and delivered to Defendant, Rite Aid, product with a value of One Million Six Hundred Sixty-nine Thousand Two Hundred Ninety-two Dollars and Sixteen Cents ($,669,292.16). 21. Defendant, Rite Aid, has received and accepted Product from Plaintiff, Nature's Value, and placed such product into the stream of commerce in its retail stores without paying for such product. 5 Aid has received financial and other benefits as a result 22. Defendant, Rite of receiving and accepting the delivery of said product and placing said product into the stream of commerce. 23. Defendant, Rite Aid, has been unjustly enrichll d by receiving and accepting such product without paying for it and Plaintiff, Nature's Value, has been damaged in the sum of One Million Six Hundred Sixty-nine Thousand Two Hundred Ninety-two Dollars and Sixteen Cents ($1,669,292.16). WHEREFORE, Plaintiff, Nature's Value, demands judgment against Defendant, Rite Aid, in the sum of One Million Six Hundred Sixty-nine Thousand Two Hundred Ninety-two Dollars and Sixteen Cents ($1,669,292.16) plus pre judgment interest, post judgment interest, attorneys' fees and the costs of this litigation. I COUNT IV CONVERSION 24. Plaintiff, Nature's Value, incorporates the allegations contained in Paragraphs 1 through 9 above as if fully rewritten herein. 25. Defendant, Rite Aid, has received and accepted product from Plaintiff, Nature's Value, that has a value of One Million Six Hundred Sixty-nine Thousand Two Hundred Ninety-two Dollars and Sixteen Cents ($1,669,292.16) and has refused to pay for such product. 26. Defendant, Rite Aid, has converted said product for its own financial benefit and gain. 27. As a result of the conversion of said product for the sole financial benefit of Defendant, Rite Aid, Plaintiff, Nature's Value, has been damaged in the sum of One 6 Million Six Hundred Sixty-nine Thousand Two Hundred Ninety-t*O Dollars and Sixteen Cents ($1,669,292.16). WHEREFORE, Plaintiff, Nature's Value, demands judgment against Defendant, Rite Aid, in the sum of One Million Six Hundred Sixty-nine Thousand Two Hundred Ninety-two Dollars and Sixteen Cents ($1,669,292.16) plus pre jiudgment interest, post judgment interest, attorneys' fees and the costs of this litigation. PETERS & WASILEFSKI By: Charles E. W ilefski Attorney ID #$1027 2931 North Front Street Harrisburg, P 17110-1250 [717] 238-755 , Ext. 110 Attorney for Plaintiff, Nature's Value, Inc. Date: January 15, 2009 7 VERIFICATION II II I hereby affirm that the following facts are corre?t: Nature's Value, Inc. is the Plaintiff in the foregoing action and I am authorized to execute this verification on its behalf. The attached IComplaint is based upon information that I have furnished to my counsel and information that ll has been gathered by my counsel in preparation of the prosecution of the lawsuit. The language of the Complaint is that of counsel and not of me. I have read the Complaint and to the extent that Complaint is based upon information which I have given to my counsel, it is true and correct to the best of my knowledge, information and belief. To the extent that the content of the Complaint is that of counsel, I have relied upon counsel in making this verification. I hereby acknowledge that the facts set forth in the aforesaid Complaint are made subject to the penalties of 18 Pa. C.S. Section 4904 relating to unsworn falsification to authorities. Dated: /- .23 - ° 1 - 60f? ,. RITE AID CORPORATION GUARANTEED SALES AGREEMENT i Rite Aid will consider Vendor's product(s) for distribution and sale un r the terms and conditions set forth in this Agreement, In consideration of Rite Aid's ent to review a new entry into its mix, as well as in consideration of the mutual premises co tained 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 twee 120) dam,. such other pe 0a s Rite Aid may determine in its sole discretion (it b understood by Vendor Rite Aid may terminate this Agreement in its sole discretion at any time, for y reason whatsoever) following the date if the Vendor's first delivery of product(s) to 'te Aid (the "Review Period"), Vendor's account will be on a review status to permit 'te Aid to assess the performance of the product(s). During the Review Period, Rite 'd will pay only for those product(s) that are actually sold, and Rite Aid's paymentw 11 be reduced by any and all cash discounts or other debit amounts (including, but not linni 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 Ven '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 foregoing rights are not exclusive. At the end of the Review Period, Rite Aid may this Agreement, place the Vendor on Rite Aid's customary payment terms, or e d 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 Ven Ilor's product(s) performance continues to be unacceptable, Rite Aid will have th right to return at Vendor's expense all unsold product(s) to Vendor's facility in re urn for Vendor's cash payment to Rite Aid for any products for which Rite Aid has pai4 4 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 (1 )dafter Rite Aid has returned the product(s). Vendor acknowledges and agrees event that any of Vendor's allowances are funded with "free product" from Vendo , 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 to 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 A3 RaVISM 8/01/2004 IIII 6. 7. 8. 9. ?I The terms and conditions of this Agreement are in addition to, 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 to s and conditions of the Agreement and any of the foregoing documents, this Agreement ill govern. The parties agree that Pennsylvania law governs this Agreement of withstanding its conflicts of law provisions. Any lawsuit brought with regard to s Guaranteed Sales Agreement will be venued in the Court of Common Pleas, Cumb rland County, Pennsylvania. The parties specifically agree that 13 Pa. C.S.A. §2326 & 2327(b? that Vendor will accept returned goods in their "as-is" condition. All returns are at risk of vendor. Vendor can not assign any product covered by this Agreement to the express written consent of a Vice President of Category Mana are inapplicable and third party without 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 a thorized officer to sign and date this Agreement on behalf of your company, and return the executed letter to Rite Aid's Merchandising Department. Vendor: Nature's Value Inc.-NatureStar® By: Joan Fei Title: C O Authorized Signature Date: 12/08/2006 Revised VO 1/2W4 cxklbl+ I SB 2 August 2007 Rite Aid Mr. Ric Clarke 30 Hunter Lane Camp Hill, PA 17011 Dear Ric, I write you this correspondence because I really need your help.. You were very candid and upfront in describing the performance expectati as we started this partnership back in June of 2006. As with any new busin partner, we were full of great optimism regarding our brands potential for you would hold us to and distribution ,ess in your stores. Our optimism was reflected in all our business decisions, we invested in a si ificant national print media campaign, we financed the production of the dedicated wing racks to the tune of $210,110.21, and embraced your promotional venues to the maximum extent possible. In fact, we have had a total of $229,402.77 in deductions to support the variety of promotional venues you offer including TPR's, markdowns, and in-store/direct mail adv ising. The Rite Aid show we also supported at a cost of $ 16,250.00. As you know the Rite Aid opening order was supported with a deduction fo the free fill to the tune of $381,956.96. The Brooks-Eckerd opening order deduction is for $173,040.00. Our returned merchandise credits to date total $ 15,369.20 (through 10 July 007) and based on the discontinued items (Memory, Immune, Cardio) current inventory report we ill incur an aggregate return value of $372,159.60 sometime in August. We have recently received a new Purchase Order for the retained four sku's Omega, Cholesterol, Bone, and Probiotic) totaling $147,924.48, but it does not match in value wi the $173,000.00 deduction for the slotting fees (based on 3pcs/ 4sku's in 1,750 locations). W are very pleased to be able to continue this item mix with Rite Aid. You were after all, and still are at this juncture our biggest retail partner. While we understand you are compelled to protect Rite Aid's business inters must wonder when we will finally be in a position to enjoy a more standard relationship? After processing the latest PO's we will have shipped over $ 1; which we have no payment. We are at a loss at how we can continue to be hi accounts receivable position, as it is not a sustainable business model. www.naturestarusa.com 1-888-882-2672 Te1:909.930.1878 Fax: 909.930.5438 1770 S. Vineyard Ave. Ontario, CA 91761 in our partnership, we ,ounts receivable 8,920.90 in goods for . in this current Copyright 0 2005 Nature's Value Inc. All rights reserved. The improvement in our receivables with Rite Aid would go a long way toward the fimding of additional advertising and direct response initiatives! To recap our current account status I give you the following aggregate 1) Total Sales (including pending Brooks-Eckerd) $ 1,348,920.90 2) Rite Aid Free Goods deduction $ 381,956.96 3) Brooks-Eckerd Free Goods deduction $ 173,040 4) Promotional, Marketing, and Show Deductions $ 229,402.77 5) Slotting Fees-Brooks Eckerd $36,000.00 6) Returned Goods Deductions $ 21,246.14 Net Due Receivable $507,.275.12 We approximate as of this day that the value of the discontinued/return $372,159.60. will be Ric, we are looking forward to the effect of the TV series "Discoveries in A ternative Medicine" which premiered on the 26`h of July. Not only are we one of two corporates onsors to this show, but we will also be featured in a full segment of the show August 9th, and again ':)n August 23`d. DirecTV is picking up the show in December, when the household reach will grow from 35 million to over 50 million households. Given our history with Rite Aid, and our inclusion in the new schematics, is it possible to re-visit our accounts receivable/payable status with you? I believe we have established enough of a partnership at this juncture to request this initiative? I appreciate anything you can do to help us out. Regards, Gerard J. McCann Vice President of Sales and Marketing Nature's Value Inc-NatureStafrm 1770 S. Vineyard Ave. Ontario, CA 91761 909-930-1878 Ext 125 www.nWA=tanisa.com 1-888-882-2672 Tel: 909.930.1878 Fax: 909.930.5438 1770 S. Vineyard Ave. Ontario, CA 91761 Copyright 0 2005 Nature's Value Inc. All rights reserved. ?y ?e E?x + L 19 March 2008 Rite Aid Mr. Ric Clarke 30 Hunter Lane Camp Hill, PA 17011 Ric, To update you on what has transpired since the conference c Dimond, Anthony Raissen, Jeannette Buck and I, 1 will recap On the 29th of February, the day of the conference call, we pi advertising plan created by InterQuantum that detailed a Nat plan of 1.5 million dollars that was scheduled to commence c of April. On a subsequent follow up conversation with Joan Fei, I was was not yet assured, as there were a number of Rite Aid queE not able to answer. These included a reconciliation of our acc inventory status that had yet to be proffered by Rite Aid to get our account status. We submitted a request for reconciliation have not yet received a response regarding. - As of today we solicit funding. It should be noted that the AR history with Rite Aid has been impediment in securing enthusiastic partners interest or fundi noted that we have shipped over $1.65 million in product, as $200K in displays over the last 22 months. We also supporte 750K in print and radio advertising, which unfortunately did rn desired results. We have not been able to collect on any of tl' date. II involving Steve [s follows; forward an nal advertising or around the 15tH d that the funding ns that we were nts AR, AP, and clear picture of ,t month that we continuing to ?e major a. It should also be ell as invested the line with over produce the invoice totals to Due to our current AR status with Rite Aid, naturally our partn rs were seriously concerned about the prospects for a return on their investme t, and for reaching an item turn that would create a more traditional cash flow rel tionship. With respect to your request for start dates, forms of media spend, as of today we cannot give you a solid answer. Ric, securing funding with our partners is to achieve a more tradi with Rite Aid. This will, of course, require some coordination you. Nature's Value, Inc. NatureStar 1270 E. Acacia. Ontario, CA 91761 Tel: 909.930.1878 Fax: 909.930.5438 www.naturestarusa.com I advertising believe the key in 1al AR situation d support from We have been trying very hard, since day one, to make our rel tionship a win- win relationship for both of our companies. We are sure Rite A d wants to see the same goal accomplished. Meanwhile, we continue to dialogue with our partners and other potential investors and will keep you apprised of an news when we receive it. Regards, Gerard J. McCann Vice President of Sales and Marketing Nature's Value Inc.-NatureStar 1270 East Acacia St. Ontario, CA 91762 909-930-1878 Ext 125 Nature's Value, Inc. NatureStar 1270 E. Acacia. 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Q SHERIFF'S RETURN - REGULAR CASE NO: 2009-00678 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND NATURES VALUE INC VS RITE AID CORPORATION STEVE BENDER Sheriff or Deputy Sheriff of Cumberland County,Pennsylvania, who being duly sworn according to law, says, the within COMPLAINT & NOTICE RITE AID CORPORATION DEFENDANT was served upon the , at 0010:40 HOURS, on the 12th day of February-, 2009 at 30 HUNTER LANE CAMP HILL, PA 17011 TRACY LANDIS PARALEGAL by handing to a true and attested copy of COMPLAINT & NOTICE together with and at the same time directing Her attention to the contents thereof. Sheriff's Costs: Docketing 18.00 Service 13.50 Affidavit .00 Surcharge 10.00 Postage .42 41.92 Sworn and Subscibed to before me this day So Answers: R. Thomas Kline 02/13/2009 PETERS & WASILEFSKI By: Deputy Sheriff of A. D. 2, 7' lr, NATURE'S VALUE, INC., IN THE COURT OF COMMON PLEAS FOR CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, VS. NO. 09-678 Civil Term RITE AID CORPORATION, CIVIL ACTION - LAW Defendant. : JURY TRIAL DEMANDED ENTRY OF APPEARANCE TO THE PROTHONOTARY: Kindly enter the appearances of Brian P. Downey, Justin G. Weber, and the firm of Pepper Hamilton LLP on behalf of Defendant, Rite Aid Corporation. Dated: February 23, 2009 J ti G. Weber (PA 89266) P ER HAMILTON LLP 100 Market Street, Suite 200 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 Defendant Rite Aid Corporation CERTIFICATE OF SERVICE I, Brian P. Downey, hereby certify that on February 23, 2009, a true and correct copy of the foregoing Entry of Appearance was served via First Class, U.S. Mail, postage prepaid, upon the following: Charles E. Wasilefski, Esquire Peters & Wasilefski 2931 North Front Street Harrisburg. PA 17110 c - ? - ?, _ €-?1 --??-?,_ ?? f? ? ??' 1 '?/ ^ f • ? .. _ } ? _,,. ,, ?', ? ..u. ?. ? _.. ?1 ? I _ r TO: Nature's Value, Inc.: You are hereby notified to file a written response to the following New Matter and Counterclaim within (20) days of the date of service hereof or a judgment may be entered against you. usti G. Weber (PA 89266) rney for Defendant Rite Aid Corporation NATURE'S VALUE, INC. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, NO. 09-678 CIVIL TERM VS. RITE AID CORPORATION, CIVIL ACTION - LAW Defendant. JURY TRIAL DEMANDED ANSWER WITH NEW MATTER AND COUNTERCLAIM Nature's Value, Inc. ("Nature's Value") has brought this contract action despite the fact that Nature's Value guaranteed the sale of its product and that the clear language of the parties' agreement permits Rite Aid to return unsold product to Nature's Value. Instead of accepting the return of its unsold product as required by the parties' agreement, Nature's Value now seeks to have Rite Aid pay for the unsold product. Nature's Value's claim, which is directly contrary to the written agreements between it and Rite Aid, should be rejected. Rite Aid, by and through its undersigned attorneys, hereby responds to Nature's Value's Complaint and brings a counterclaim against it as follows: 1. Admits on information and belief. 2. Admits. 3. Admits in part and denies in part. Rite Aid admits that Nature's Value and Rite Aid entered into a Guaranteed Sales Agreement. That document, as a writing, speaks for itself and any allegation inconsistent with that document is denied. The express terms of the Guaranteed Sales Agreement undermine Nature's Value's claim. Rite Aid admits that a copy of the Guaranteed Sales Agreement is attached to Plaintiff's Complaint. By way of further answer, Nature's Value has not complied with the terms of the Guaranteed Sales Agreement. 4. Admits in part and denies in part. Rite Aid admits only that Nature's Value delivered and invoiced product to Rite Aid and that those invoices were in the amount of One Million Six Hundred Sixty-Nine Thousand Two Hundred Ninety-Two Dollars and Sixteen Cents as of March 20, 2008. Rite Aid denies any suggestion that it owes any money to Nature's Value. To the contrary, as set forth in more detail below, Nature's Value owes money to Rite Aid. 5. Admits in part and denies in part. Rite Aid admits that the parties agreed that Nature's Value would fund certain advertising campaigns, promotional activity, display allowances, trade show participation, free product, and product returns. Rite Aid denies that such items were only to be credited to Rite Aid in the event Rite Aid paid certain moneys to Nature's Value. To the contrary, Rite Aid was entitled to full credit for these agreed upon costs to Nature's Value. Rite Aid denies any suggestion that Nature's Value paid for all of the advertising it promised Rite Aid that it would purchase. Rite Aid denies any suggestion that it owes any money to Nature's Value. To the contrary, as set forth in more detail below, Nature's Value owes money to Rite Aid. 6. Admits in part and denies in part. Rite Aid admits that Nature's Value has requested payment from Rite Aid. Rite Aid denies, however, that any payment is due or that it -2- has improperly refused to pay for any merchandise. To the contrary, as set forth in more detail below, Nature's Value owes money to Rite Aid. 7. Admits in part and denies in part. Rite Aid admits that Nature's Value sent the letter attached as Exhibit B to the Complaint. That document, as a writing, speaks for itself and any allegation inconsistent with that document is denied. Rite Aid denies that the letter accurately describes the account between Rite Aid and Nature's Value. To the contrary, as set forth in more detail below, Nature's Value owes money to Rite Aid. 8. Admits in part and denies in part. Rite Aid admits that Nature's Value sent the letter attached as Exhibit C to the Complaint. That document, as a writing, speaks for itself and any allegation inconsistent with that document is denied. Rite Aid denies that the letter accurately describes the account between Rite Aid and Nature's Value. To the contrary, as set forth in more detail below, Nature's Value owes money to Rite Aid. 9. Admits in part and denies in part. Rite Aid admits that Nature's Value has attached what purports to be a Statement of Account as Exhibit D to the Complaint. That document, as a writing, speaks for itself and any allegation inconsistent with that document is denied. Rite Aid denies that Exhibit D accurately describes the account between Rite Aid and Nature's Value. To the contrary, as set forth in more detail below, Nature's Value owes money to Rite Aid. COUNT I - BREACH OF CONTRACT 10. Rite Aid incorporates by reference the allegations contained in Paragraphs 1 through 9 above as fully as though the same were set forth at length herein. 11. Admits in part and denies in part. Rite Aid admits that it has ordered and received certain products from Nature's Value pursuant to the agreements between the parties. -3- Rite Aid denies that it has failed and refused to pay for any product that it has accepted and from which it has received financial and other benefit. Rite Aid denies any suggestion that it owes money to Nature's Value. To the contrary, as set forth in more detail below, Nature's Value owes money to Rite Aid. 12. Denies. The allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required and, therefore, such allegations are deemed to be denied. To the extent any response may be required, Rite Aid denies that it is required to pay any money to Nature's Value pursuant to the terms of the Guaranteed Sales Agreement. To the contrary, as set forth in more detail below, Nature's Value owes money to Rite Aid. By way of further answer, the Guaranteed Sales Agreement is a written document which speaks for itself and Rite Aid denies all allegations that are contrary to the terms of that document. 13. Denies. The allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required and, therefore, such allegations are deemed to be denied. To the extent any response may be required, Rite Aid denies that it is required to pay any money to Nature's Value pursuant to the terms of the Guaranteed Sales Agreement. To the contrary, as set forth in more detail below, Nature's Value owes money to Rite Aid. By way of further answer, the Guaranteed Sales Agreement is a written document which speaks for itself and Rite Aid denies all allegations that are contrary to the terms of that document. WHEREFORE, Rite Aid requests judgment in its favor plus interest, costs and all other amounts deemed appropriate by the Court. -4- COUNT II - ACCOUNT STATED 14. Rite Aid incorporates by reference the allegations contained in Paragraphs 1 through 13 above as fully as though the same were set forth at length herein. 15. Denies. The allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required and, therefore, such allegations are deemed to be denied. To the extent any response may be required, Rite Aid denies that it is required to pay any money to Nature's Value pursuant to the terms of the Guaranteed Sales Agreement. To the contrary, as set forth in more detail below, Nature's Value owes money to Rite Aid. By way of further answer, the Guaranteed Sales Agreement is a written document which speaks for itself and Rite Aid denies all allegations that are contrary to the terms of that document. 16. Denies. The allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required and, therefore, such allegations are deemed to be denied. To the extent any response may be required, Rite Aid denies that it is required to pay any money to Nature's Value pursuant to the terms of the Guaranteed Sales Agreement. By way of further answer, the Guaranteed Sales Agreement is a written document which speaks for itself and Rite Aid denies all allegations that are contrary to the terms of that document. Rite Aid denies that Exhibit D accurately describes the account between Rite Aid and Nature's Value. To the contrary, as set forth in more detail below, Nature's Value owes money to Rite Aid. 17. Admits in part and denies in part. Rite Aid admits only that Nature's Value has asked Rite Aid to pay money that is not owed to Nature's Value. Rite Aid denies that it owes any money to Nature's Value. Rite Aid admits that it has declined to pay money to -5- Nature's Value to which Nature's Value is not entitled. By way of further answer, the Guaranteed Sales Agreement is a written document which speaks for itself and Rite Aid denies all allegations that are contrary to the terms of that document. Rite Aid denies that Exhibit D accurately describes the account between Rite Aid and Nature's Value. To the contrary, as set forth in more detail below, Nature's Value owes money to Rite Aid. 18. Denies. The allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required and, therefore, such allegations are deemed to be denied. To the extent any response may be required, Rite Aid denies that it owes any money to Nature's Value. To the contrary, as set forth in more detail below, Nature's Value owes money to Rite Aid. WHEREFORE, Rite Aid requests judgment in its favor plus interest, costs and all other amounts deemed appropriate by the Court. COUNT III - UNJUST ENRICHMENT 19. Rite Aid incorporates by reference the allegations contained in Paragraphs 1 through 18 above as fully as though the same were set forth at length herein. 20. Admits in part and denies in part. Rite Aid admits that it has ordered and received certain products from Nature's Value pursuant to the agreements between the parties. Rite Aid denies that it has failed and refused to pay for any product for which money is owed. Rite Aid denies any suggestion that it owes money to Nature's Value. To the contrary, as set forth in more detail below, Nature's Value owes money to Rite Aid. 21. Admits in part and denies in part. Rite Aid admits that it has ordered and received certain products from Nature's Value pursuant to the agreements between the parties. Rite Aid admits that portions of that product have been placed for sale in Rite Aid's stores. Rite -6- Aid denies that it has failed and refused to pay for any product for which money is owed. Rite Aid denies any suggestion that it owes money to Nature's Value. To the contrary, as set forth in more detail below, Nature's Value owes money to Rite Aid. 22. Denies. Rite Aid denies that it has received financial benefit from product produced by Nature's Value. To the contrary, as set forth in more detail below, Nature's Value's account with Rite Aid reveals that Nature's Value owes money to Rite Aid. 23. Denies. The allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required and, therefore, such allegations are deemed to be denied. To the extent any response may be required, Rite Aid denies that it has been unjustly enriched or that it owes any money to Nature's Value. To the contrary, as set forth in more detail below, Nature's Value owes money to Rite Aid. WHEREFORE, Rite Aid requests judgment in its favor plus interest, costs and all other amounts deemed appropriate by the Court. COUNT IV - CONVERSION 24. Rite Aid incorporates by reference the allegations contained in Paragraphs 1 through 23 above as fully as though the same were set forth at length herein. 25. Admits in part and denies in part. Rite Aid admits that it has ordered and received certain products from Nature's Value pursuant to the agreements between the parties. Rite Aid denies that it has failed and refused to pay for any product for which money is owed. Rite Aid denies any suggestion that it owes money to Nature's Value. To the contrary, as set forth in more detail below, Nature's Value owes money to Rite Aid. By way of further answer, Rite Aid has attempted to return product to Nature's Value pursuant to the terms of the agreements between the parties and Nature's Value has refused to accept such product. -7- 26. Denies. Rite Aid denies that it has converted any product of Nature's Value. To the contrary, Rite Aid has not converted any product of Nature's Value. By way of further answer, the allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required and, therefore, such allegations are deemed to be denied. 27. Denies. Rite Aid denies that it has converted any product of Nature's Value. To the contrary, Rite Aid has not converted any product of Nature's Value. Rite Aid denies that Nature's Value has been damaged by any conduct of Rite Aid. Rite Aid denies any suggestion that it owes any money to Nature's Value. To the contrary, as set forth in more detail below, Nature's Value owes money to Rite Aid. By way of further answer, the allegations contained in this paragraph constitute purported conclusions of law to which no responsive pleading is required and, therefore, such allegations are deemed to be denied. WHEREFORE, Rite Aid requests judgment in its favor plus interest, costs and all other amounts deemed appropriate by the Court. -8- NEW MATTER 28. Plaintiff's claim fails to state a claim upon which relief may be granted. 29. Rite Aid did not breach any duty, contractual or otherwise, allegedly owed to Plaintiff. 30. Plaintiff's cause of action against Rite Aid is barred by the equitable doctrines of estoppel, laches, and waiver. 31. Plaintiff's claims are barred in whole or in part by the applicable statute of limitations. 32. Plaintiff s claims are barred because Plaintiff failed to perform pursuant to its agreement with Rite Aid. 33. Plaintiff's claims are barred by the terms of the parties' contract. 34. Plaintiff's claims are barred by the doctrine of unclean hands. 35. Plaintiff has not suffered compensable injuries or damages and, therefore, plaintiff lacks standing to assert any claim against Rite Aid. 36. Plaintiff's claims are not well grounded in fact and are not warranted by existing law or a good faith argument for the extension, modification or reversal of existing law. 37. Plaintiff's tort claims are barred in whole or in part by the economic loss doctrine. 38. Plaintiff's tort claims are barred in whole or in part by the gist of the action doctrine. 39. Rite Aid is entitled to an equitable right of setoff. 40. 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 the defendant relies upon such other defenses as may become available or appear during the course of -9- discovery proceedings in this case. Rite Aid reserves the right to amend this answer to assert such defenses. WHEREFORE, Defendant Rite Aid Corporation requests that judgment be entered in its favor and against Plaintiff Nature's Value, and such other and further relief as this Honorable Court deems appropriate. COUNTERCLAIM Plaintiff Rite Aid Corporation ("Rite Aid"), by its undersigned attorneys, files this Counterclaim alleging as follows: PARTIES 41. Rite Aid is a Delaware corporation with its principal place of business at 30 Hunter Lane, Camp Hill, PA 17011. 42. On information and belief, Counterclaim Nature's Value is a California corporation with a principal place of business at 1270 E. Arcacia, Ontario, CA 91761. JURISDICTION 43. This court has jurisdiction pursuant to 42 Pa. C.S. §93l(a). RELEVANT FACTS 44. At all times relevant to this claim, Nature's Value was involved in the distribution of diet supplements. 45. On or about December 8, 2006, Rite Aid and Nature's Value, entered into a Guaranteed Sales Agreement ("GSA"), a valid and enforceable contract, which provided that Rite Aid would consider certain Nature's Value products for distribution and sale. A true and correct copy of the GSA is attached as Exhibit A. 46. The GSA provided that Nature's Value would guarantee the sale of its product. -10- 47. Rite Aid and Nature's Value also entered into a Rite Aid Returns Agreement ("Returns Agreement") which provided the manner in which certain Nature's Value product could be returned to Nature's Value. A true and correct copy of the Returns Agreement, a valid and enforceable written contract, is attached as Exhibit B. 48. Rite Aid and Nature's Value also entered into certain Promotional Funding Agreements. True and correct copies of the Promotional Funding Agreements are attached as Exhibit C. 49. Pursuant to the terms of GSA, Nature's Value guaranteed the sale of its products. 50. Pursuant to the terms of GSA, during the Review Period, as that term is defined in the GSA, Nature's Value would be entitled to receive payment only for product actually which payments are to be reduced by moneys owed to Rite Aid by Nature's Value. 51. Pursuant to the terms of GSA, Rite Aid was granted sole discretion to extend the Review Period. 52. Nature's Value represented to Rite Aid that Nature's Value would spend $2,000,000.00 in advertising to market its products which were to be sold in Rite Aid stores. 53. Nature's Value did not spend the promised $2,000,000.00 in advertising to market its products which were to be sold in Rite Aid stores. 54. Pursuant to the terms of GSA, Rite Aid extended the Review Period due to the poor sales of Nature's Values' products. 55. Pursuant to the terms of GSA, the Review Period is currently still ongoing. 56. Pursuant to the terms of GSA and the Returns Agreement, Rite Aid has returned or attempted to return product to Nature's Value. -11- 57. In violation of the terms of its agreements with Rite Aid, Nature's Value has refused to accept the return of many of its products. 58. Nature's Value is in breach of the GSA and the Returns Agreement (and related account contracts and agreements) by failing to accept the return of product and to pay Rite Aid for the return of unsold product. 59. As a result of Nature's Value's breach of its agreements with Rite Aid, Nature's Value owes Rite Aid an amount not less than $450,000.00. COUNTI BREACH OF CONTRACT Rite Aid vs. Nature's Value 60. Rite Aid incorporates the averments in paragraphs 1-59 above as if fully set forth herein. 61. As noted above, Rite Aid and Nature's Value entered into the GSA and the Returns Agreement, valid and enforceable written agreements under which Rite Aid agreed to consider Nature's Value's products for sale in it stores and Nature's Value agreed, inter alia, to guarantee the sale of Nature's Value's products to Rite Aid. 62. The GSA and the Returns Agreement provide that Rite Aid may return unsold product to Nature's Value. 63. Nature's Value has breached its contract with Rite Aid by failing to accept the return of unsold items. 64. Rite Aid has substantially performed all conditions precedent under the GSA, Returns Agreement, and all related agreements under the account. -12- 65. Rite Aid has suffered damages due to Nature's Value's breach of the agreement and owes Rite Aid an amount not less than $450,000.00, as a result of its breach of the agreements. WHEREFORE, Rite Aid requests judgment in its favor in an amount not less than $450,000.00 plus interest, costs and all other amounts deemed appropriate by the Court. COUNT II BREACH OF CONTRACT Rite Aid vs. Nature's Value 66. Rite Aid incorporates the averments in paragraphs 1-65 above as if fully set forth herein. 67. As noted above, Rite Aid and Nature's Value entered into the GSA in which Nature's Value agreed, inter alia, that Pennsylvania law would govern the GSA and that "[a]ny lawsuit brought with regard to this Guaranteed Sales Agreement will be venued in the Court of Common Pleas, Cumberland County, Pennsylvania." (Exhibit A, ¶6) 68. Despite having made that agreement, on or about July 11, 2008, Nature's Value commenced an action captioned as Nature's Value, Inc. vs. Rite Aid Corporation, No. CV 08-05235 SJO (JWJx) against Rite Aid regarding the GSA in the Superior Court of the State of California for the County of Los Angeles. ("California Action"). 69. Nature's Value's decision to bring suit regarding the GSA in California rather than in Cumberland County, Pennsylvania, constitutes a breach of the GSA. 70. On November 5, 2008, the Superior Court of the State of California for the County of Los Angeles dismissed the California Action on the grounds that the GSA required that all litigation regarding the GSA be venued in Cumberland County, Pennsylvania. (A true -13- and correct copy of the November 5, 2008, Order Granting Defendant's Motion to Dismiss for Lack of Venue is attached hereto as Exhibit D). 71. As a result of Nature's Value's breach of the GSA, Rite Aid was forced to incur legal fees and costs to defend itself against the California Action and to assert its right to have a litigation regarding the GSA venued in Cumberland County, Pennsylvania. 72. Rite Aid is entitled to recover the legal fees and costs it was required to incur to defend itself in the California Action. WHEREFORE, Rite Aid requests judgment in its favor, plus interest, costs and all other amounts deemed appropriate by the Court. COUNT III UNJUST ENRICHMENT Rite Aid vs. Nature's Value 73. Rite Aid incorporates the averments in paragraphs I through 72 above as if fully set forth herein. 74. In the event Nature's Value contends no contractual relationship exists, Rite Aid is entitled to recover the outstanding amounts to prevent Nature's Value from being unjustly enriched. 75. Rite Aid has a reasonable expectation to be paid the negative balance and for the unsold product it is currently holding. 76. Rite Aid has no adequate remedy at law. 77. Rite Aid is entitled to collect the outstanding balance, plus interest, from Nature's Value under the doctrine of unjust enrichment. -14- WHEREFORE, Rite Aid requests judgment in its favor and against Nature's Value in an amount not less than $450,000.00 plus interest, costs and all other amounts deemed appropriate by the Court. Lu- 134an P owney (PA 59891) Ju . Weber (PA 89266) PEPPER HAMILTON LLP 100 Market Street, Suite 200 Post Office Box 1181 Harrisburg, PA 17108-1181 Telephone: 717.255.1170 Fax: 717.238.0575 Email: downeyb@pepperlaw.com weberjg@pepperlaw.com Attorneys for Defendant Date: February 27, 2009 Rite Aid Corporation -15- 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 to 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 9MI12004 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.:ny 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. All returns 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: Nature's Value Inc.-NatureStar® By: Joan Fei Title: CEO Authorized Signature Date: 12/08/2006 Revised 8/01/2004 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: 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 to 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. All returns 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: Nature's Value Inc-NatureStar TM By: and J. nn Title: Vice President Sales je? Authoriz Signature Date: 19 January 2006 Revised 8/01/2004 03/17/2006 17:29 909-930-5438 NATURESTAR BIOTECH PAGE 05/09 RITE AID RETURNS AGREEMENT Please note' A Separate Returns Agreement must be filled out for each vendor number. Company Name: Nature's Value-NatureStarTm Contact Name: Gerard J. McCann Vendor Number: Invoice Address: 1770 S. Vineyard Ave. Ontario. CA 91761 Phone #909-930-1878 Fax 108909-930-5438 E-Mail Address: gmocann@naturestarusa.com Shipping Address: Same Category Manager: Mr. Ric Clarke Associate Category Manager: Ms. Cheryl Gill TERMS OF AGREEMENT: A. Unsaleable Merchandise 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 CODEIDESCRIPTIONS 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 f4IR COST) COPT Scan and disposition is left up to the discretion of Rite Aid ($0.020) DONA Scan and donate ($0.030) SH13K X Scan and ship back to vendor ($0.160) OPEN RAN REOIJIRED WITH THIS OPTION RA# Yes NOTE: Any product remaining in the reclamation centers for 45 days from the date of invoice, without a Return Authorization Number, will be disposed of at the discretion of Rite Aid Corporation. Rite Aid Corporation will not entertain ANY requests for payback of product that falls into this category. 3. All products will be billed at Rite Aid's current list cost + JIR billing factors (DPC, Post Damage Handling, RCC 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. Rev 01/12/06 03/17/2006 17:29 909-930-5438 NATURESTAR BIOTECH PAGE 06/09 Rite Aid Returns Agreement Page 2 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. S. 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 S. All damaged and outdated invoices are available through the Rite Aid Paperless Invoice System using the Carolina Supply Chain Services Website et www.carolinasuoelvchainservicea.com. Vendors should contact the Manager, Front End Returns, at 717-214-8832 to request setup of their Company's authorized user. (See Page 3) B. Recall Merchandise Please note! The dlsposltlons on page 122 NOT appy to recalls. A separate agreement MUST be filled out for all recalls at the time the recall is being activated, This allows a vendor to have a separate d'rsposMon on recalls than they have on damaged and outdated returns. 1. All recall Invoices are available through the Rite Aid Paperless' Invoice System using the Carolina Supply Chain Services Websfbe at www.caroiinasugg_bmhaineervices.com. Vendors should contact the Manager, Front End Returns, at 717-214-8832 to request setup of their Company's authorized user. (See Page 3) The signatures below by the appropriate Category Manager of Rite Aid Corporation and the vendor represe tativWofeal pany d enote their understanding and acceptance of the above agreement. nature (Npresentative) D Signature (Authorized by Rite Aid Corporation) Date Nature's Value Inc.- NatureStarTm Company Rite Aid Corporation Rev 01/12108 03/17/2006 17:29 909-930-5438 NATURESTAR BIOTECH PAGE 07/09 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 CAROLINA SUPPLY CHAIN SERVICES WESSITE. 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 CSCS WEBSITE WILL BE SENT TO THE DESIGNATED INDIVIDUAL. All information relating to the Carolina Supply Chain Services Website should be sent to the following individual: PLEASE PRINT: Nature's Value Inc.- NatureStar I Vendor Nang Vendor Number 1770 S. Vineyard Ave. Ontario CA 91761 Address Gerard J. McCann city state Zip 909-930-1878 Ext 126 Contact Name Phone gmccann@naturesterusa.com E-mail Address IT name) 17 March 2006 THIS FORM MUST ACCOMPANY THE RITE AID RETURNS AGREEMENT FOR DAMAGED AND OUTDATED PRODUCT Rev Ill 11 7AIA ALL-STATE LEGALV 800-222-0510 0 Contract # 0200899 • Rite Aid Promotional Funding Agreement Fiscal Year 2009 Company Name: NATURE'S VALUE INC-NATURESTAF Category Manager: CLARKE, RIC Billing Address: STEVE DIMOND & ASSOCIATES Vendor #: 36387 1503 NEAR THICKER LANE STEVENSON MD 21153 Contact: Steve Dimond Phone: 410-653-6560 Fax#:4104844261 Email: sdimond642@aol.com NATURE'S VALUE INC-NATURE: (Supplier) hereby agrees to participate in Rite Aid's Fiscal Year2009 supplier promotional program in the amount indicated herein. The amount to be paid by the Supplier will be % of Rite Aid's Gross purchases of Supplier's products between March 2, 2008 and February 28, 2009 (but not less than the Minimum Promotional Funding Commitment set forth below). The Funding will be used to develop and co-execute marketing support deemed appropriate by Supplier's Rite Aid Category Manager for promoting and advancing the sales of Supplier's products in Rite Aid stores. The Promotional Funding is in addition to and not in substitution for or -inution of any negotiated pricing, payment terms, volume incentives, rebates, other contract hase incentives, funding for retail markdowns, off-shelf displays, Single Check Rebate fulfillment, new items, new store allowances, Health Resource Rite Advice participation, Trade Show participation, Rite Aid Health and Beauty Expos, Rite Aid Foundation Charity Golf Classic, or other programs now existing or that may be developed from time to time. The Supplier's Minimum Promotional Funding Commitment is firm and non-cancelable. Proof of performance will not be provided. Invoicing (for deduction from amounts owing by Rite Aid to Supplier) of the Minimum Promotional Funding Commitment will occur in 4 equal instalments on or about 5/1/08 , 8/1/08 , 11/1/08 and 2/1/09 . The Promotional Funding is based onGross purchases between March 2, 2008 and February 28, 2009 . If actual Gross purchases exceed the Forecasted Gross Purchases set forth below, the additional funding will be billed and deducted in the final invoicing on or about 3/1/09. MINIMUM PROMOTIONAL FUNDING COMMITMENT: FORECASTED GROSS P HASES: A--1horized Signature: / Rite Aid Category Manager. 1? • 7- '? P i Name: L A ` ? Rite Aid Vice President: Date: A. L ? ?' ! Title: ? A-' L? Date: ? ;' / a IM Contract # 0153192 • • Rite Aid Promotional Funding Agreement Fiscal Year 2008 Company Name: NATURE'S VALUE INC-NATURES1 Category Manager.CLARKE, RIC Billing Address: STEVE DIMOND & ASSOCIATES Vendor #: 36387 1503 NEAR THICKER LANE STEVENSON MD 21153 Contact: Steve Dimond Phone: 410-653-6560 Fax#:4104844261 Email: sdimond642@aol.com NATURE'S VALUE INC-NATURE; (Supplier) hereby agrees to participate in Rite Aid's Fiscal YeaR008 supplier promotional program in the amount indicated herein. The amount to be paid by the Supplier will be I% of Rite Aid's Gross purchasesof Supplier's products between March 4, 2007 and March 1, 2008 (but not less than the Minimum Promotional Funding Commitment set forth below). The Funding will be used to develop and co-execute marketing support deemed appropriate by Supplier's Rite Aid Category Manager for promoting and advancing the sales of Supplier's products in Rite Aid stores. The Promotional Funding is in addition to and not in substitution for or diminution of any negotiated pricing, payment terms, volume incentives, rebates, other contract purchase incentives, funding for retail markdowns, off-shelf displays, Single Check Rebate Ifillment, new items, new store allowances, Health Resource Rite Advice participation, Trade Show . rticipation, Rite Aid Health and Beauty Expos, Rite Aid Foundation Charity Golf Classic, or other programs now existing or that may be developed from time to time. . Supplier's Minimum Promotional Funding Commitment is firm and non-cancelable. Prof of performance will not be provided. Invoicing (for deduction from amounts owing by Rite Aid to Supplier) of the Minimum Promotional Funding Commitment will occur in4 equal instalments on or about 6/3/07 , 9/2/07 , 12/2/07 and 3/2/08 . The Promotional Funding is based onGross purchases between March 4, 2007 and March 1, 2008 . If actual Gross purchases exceed the Forecasted Gross Purchases set forth below, the additional funding will be billed and deducted in the final invoicing on or about N/A. MINIMUM PROMOTIONAL FUNDING COMMITMENT: FORECASTED GROSS PURCHASES: Authorized Signatu R(te Z) f ,1 ?rv P inted Name: /l H ?fil ,_(l L4J h Rite, Date: Title:_ Date $ INY6cdo LI TF D contract Rita Aid Promotional Funding Agreement Fiscal Year 2007 Category Mgr./Assoc. Category Mgr.: Company Name: Nkgmis Vilna Inc. 124 Vendor* Mh Billing Address: 1503 tw 1hicker I" S6euers= ND 21153 Contact- Sbae Db=*d Phone # (410)653-eW Fax #: Lg1Q} N93=wtar 24 (Supplier) hereby agrees to participate in Rite Aid's Fiscal Year 2007 supplier promotional program in the amount indicated herein. The amount to be paid by Supplier will be 10 % of Rite Aid's gross purchases of Supplier's products for Rite Aid's fiscal year ending March 3, 2007, (but not less than the Minimum Promotional Funding Commitment set forth below). The Funding will be used to develop and co-execute marketing support deemed appropriate by Suppliers Rite Aid Category Manager for promoting and advancing the sales of Supplier's products in Rite Aid stores. The Promotional Funding is in addition to and not in substitution for or diminution of any negotiated pricing, payment terms, volume incentives, rebates, other contract purchase incentives, funding for retail markdowns, off-shelf displays, Single Check Rebate fulfillment, new ;`-ms, new store allowances, Health Resource Rite Advice participation, Trade Show participation, .e Aid Health and Beauty Expos, Rite Aid Foundation Charity Golf Classic, or other programs now existing or that may be developed from time to time. The Supplier's Minimum Promotional Funding Commitment is firm and non-cancelable. Proof of performance will not be provided. Invoicing (for deduction from amounts owing by Rite Aid to Supplier) of Minimum Promotional Funding Commitment will occur in four equal installments on or about 511106, 8/1106, 11/1/06, and 2/1/07. The Promotional Funding is based on actual fiscal year 2007, (March 5, 2006 - March 3, 2007) gross purchases. If actual gross purchases exceed the Forecasted Gross Purchases set forth below, the additional funding will be billed and deducted in the final invoicing on or about 3/4107. MINIMUM PROMOTIONAL FUNDING COMMITMENT: FORECASTED GROSS PU CHASES' Authorized Signature: Category Mgr.: Printed Name: Gr d J. NL- Rite Aid Vice President: Dabs: 44/x.. Titie: vise Ptaside[t Rite Aid Date: $ 185,000.00 t0/Z0 39Cd i0310IS WISA?n IaN --- v $ 1,850,000.00 Case 2:08-cv-05235-SJO-JWJ Document 17 Filed 11105/2008 Page 1 Of 4 1 2 3 4 51 6 71 8 9 10 11 12 13 14. 15 16 17 18 19 20 21 22 23 24 2V1A 2E JS-6 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA NATURE'S VALUE, INC., Plaintiff, v. RITE AID CORPORATION, Defendant. NO. CV 08-05235 SJO (JWJx) ORDER GRANTING DEFENDANT'S MOTION TO DISMISS FOR IMPROPER VENUE [Docket No. 5] This matter is before the Court on Defendant Rite Aid Corporation's ("Rite Aid") Motion to Dismiss for Improper Venue, filed August 15, 2008. Plaintiff Nature's Value, Inc. ("Nature's Value') filed an Opposition, to which Rite Aid replied. The Court found this matter suitable for disposition without oral argument and vacated the hearing set for September 29, 2008. See Fed. R. Civ. P. 78(b). Because of the following reasons, Rite Aid's Motion is GRANTED. 1. BACKGROUND Nature's Value, a manufacturer of pharmaceutical preparations and nutritional supplements, entered into a Guaranteed Sales Agreement (the "Agreement") with Rite Aid to distribute and sell its products at Rite Aid stores. (Agreement, filed as Def.'s Reply Ex. A.) The Agreement includes a forum selection and choice of law clause that states: "The parties agree that Pennsylvania law governs this Agreement notwithstanding its conflicts of law provisions. Any lawsuit brought with regard to this Guaranteed Sales Agreement will be venued in the Court of Common Pleas, 27 28 Case 2:08-cv-05235-SJO-JWJ Document 17 Filed 11/05/2008 Page 2 of 4 1 Cumberland County, Pennsylvania." (Agreement 16.) Nature's Value alleges that It sold and 2 delivered over $1 million worth of goods to Rite Aid for which Rite Aid refused to pay, and that Rite 3 Aid agreed it owed nearly $400,000 to Nature's Value but refused to pay. (Compl. IN 4, 9.) 4 Nature's Value brought suit against Rite Aid alleging claims for (1) goods sold and delivered; and 5 (2) account stated. Rite Aid now moves to dismiss Nature's Value's Complaint under Federal Rule 6 of Civil Procedure 12(b)(3), claiming venue in California is improper due to the Agreement's forum 7 selection clause. 8 11. DISCUSSION 9 Federal law governs the enforcement of forum selection clauses in diversity cases. 10 Manetti-Farrow, Inc. v. Gucci America, Inc. 858 F.2d 509, 513 (9th Cir.1988). Under federal law, 11 forum selection clauses are presumed valid and enforceable unless enforcement would be 12 "unreasonable and unjust, or the clause was invalid for such reasons as fraud or overreaching." 13 Bremen v. Zapata Off-Shore Co., 92 S. Ct. 1907, 1916 (1972). 14 Here, neither party disputes that the Agreement's forum selection clause is reasonable, just, 15 and entered into voluntarily. Instead, the parties dispute whether Nature's Value's claims are 16 governed by the clause, and whether the clause is mandatory or permissive. 17 A. The Forum Selection Clause Governs Nature's Value's Claims. 18 Nature's Value argues its claim for account stated does not arise from the Agreement 19 because "when an account is assented to, it becomes a new contract. An action on it is not 20 founded upon the original items, but upon the balance agreed to by the parties. Inquiry may not 21 be had into those matters at all." Gleason v. Klamer, 163 Cal. Rptr. 483, 485 (Cal. Ct. App. 22 1980). Nature's Value further argues that its claim for goods sold and delivered is "not brought 23 on any explicit contract" and that Rite Aid "might attempt to plead and prove [the contract] as an 24 affirmative defense."' (Pl.'s Opp'n 3.) 25 26 ' Nature's Value offers no authority to support its contention that Right Aid must assert the 27 Agreement as an affirmative defense. Moreover, under Rule 12(b)(3), a court can consider facts outside the pleadings in determining the effect of a forum selection clause on proper venue. 28 Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 324 (9th Cir. 1996). 2 Case 2:08-cv-05235-SJO-JWJ Document 17 Filed 11/05/2008 Page 3 of 4 1 "In determining whether a forum selection clause applies to non-contract claims, the Ninth 2 Circuit has adopted the approach which upholds the forum selection clause where the claims 3 alleged in the complaint relate to the interpretation of the Agreement." Nextrade, Inc. v. Hyosung, 4 (Am.), Inc., 122 Fed. Appx. 892, 894 (9th Cir. 2005) (citing Manetti-Farrow, Inc. v. Gucci America, 5 Inc., 858 F.2d 509, 514 (9th Cir. 1988)). Here, the Agreement contains terms regarding the return 6 of unsold products (Agreement 112-3) and account payments (Agreement 14.) Thus, Nature's 7 Value's claims relate to the interpretation of the contract. This view is consistent with that of 8 numerous other federal courts that have found account stated claims subject to forum selection .9 clauses.. See, e.g., Ingenieria Alimentaria Del Matatipac, S.A. de C. V. v. Ocean Garden Products 10 Inc., No. 06-2400,2007 U.S. Dist. LEXIS 40015, at *16 (May 31, 2007 S.D. Cal.) (applying a forum 11 selection clause to and dismissing all of plaintiffs claims, including a claim for account stated); 12 Nautilus, Inc. v. Gately's LLC, No. 06-5665, 2006 U.S. Dist. LEXIS 91916, at *6 (Dec. 20, 2006 13 W.D. Wash.) (holding forum selection clause that provided exclusive jurisdiction over "any 14 controversies or claims arising out of this Agreement! 'governed plaintiffs account stated claim). 15 Thus, the Agreement's forums selection clause governs Nature's Value's claims. 16 B. The Forum Selection Clause Is Mandatory. Not Permissive. 17 Nature's Value claims the forum selection clause's statement that "any lawsuit brought with 18 regard to this Guaranteed Sales Agreement will be venued in the Court of Common Pleas, 19 Cumberland County, Pennsylvania" (Agreement ¶ 6, emphasis added) is ambiguous because 20 "venue" is defined in the dictionary only as a noun, and the term "venue" does not connote 21 exclusivity since venue may be proper in more than one district. (Pl.'s Reply 34.) However, the 22 phrase "will be" is clearly mandatory, not permissive, and requiring lawsuits to be "venued" in a 23 particular place is akin to requiring that they be brought there. See Docksider, Ltd. v. Sea 24 Technology, Ltd., 875 F.2d 762, 764 (9th Cir. 1989) (holding that where the term 'venue' is used 25 with mandatory language, the state or district designated is the exclusive forum). Thus, the 26 Agreement's forum selection clause requires Nature's Value to bring its claims in the Court of 27 Common Pleas, Cumberland County, Pennsylvania. 1 28 3 Case 2:08-cv-05235-SJO-JWJ Document 17 Filed 11/05/2008 Page 4 of 4 1 III. RULING 2 For the foregoing reasons, Rite Aid's Motion to Dismiss is GRANTED. 3 IT IS SO ORDERED. 4 November 5, 2008 /S/ S. James Oteo 5 S. JAMES OTERO 6 UNITED STATES DISTRICT JUDGE 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 VERIFICATION Ric Clarke signs this Verification on behalf of Rite Aid Corporation, 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. lX RI CLARKE CERTIFICATE OF SERVICE I certify that on February 27, 2009,1 caused a true and correct copy of the foregoing Answer With New Matter and Counterclaim to be served upon counsel of record by United States mail, first class postage prepaid, addressed as follows: Charles Wasilefski, Esquire Peters & Wasilefski 2931 North Front Street Harrisburg, PA 17110 bt G. Weber (PA 89266) k ? +•^^,. ? ? ' -- s .,,R1 ? ? F ??. ' ma _?~ c.} -'..'t. PETERS & WASILEFSKI By: Charles E. Wasilefski, Esquire Attorney #21027 2931 North Front Street Harrisburg, PA 17110 [7171238-7555 Attorneys for Plaintiff, Nature's Value, Inc. NATURE'S VALUE, INC., Plaintiff V. IN THE COURT OF COMMON PLEAS FOR CUMBERLAND COUNTY, PENNSYLVANIA RITE AID CORPORATION, Defendant NO. 09-678 CIVIL TERM CIVIL ACTION - LAW JURY TRIAL DEMANDED REPLY OF PLAINTIFF, NATURE'S VALUE, INC., TO NEW MATTER FILED BY DEFENDANT, RITE AID CORPORATION NOW COMES, Plaintiff, Nature's Value, Inc. ("Nature's Value"), by and through its attorneys, Peters & Wasilefski, and replies to the New Matter filed by Defendant, Rite Aid Corporation ("Rite Aid"), as follows: 1. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 28 of the New Matter filed by Defendant, Rite Aid. Plaintiff, Nature's Value; is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer is necessary, it is specifically denied that the Complaint fails to state a claim upon which relief may be granted. To the contrary, the Complaint does state claims upon which relief can and should be granted. 2. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 29 of the New Matter filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer is necessary, it is specifically denied that Defendant, Rite Aid, did not breach any duty owed to Plaintiff, Nature's Value. To the contrary, Defendant, Rite Aid, did breach its duties to Plaintiff, Nature's Value, as specifically set forth in the Complaint. 3. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 30 of the New Matter filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer is necessary, it is specifically denied that the doctrines of estoppel, laches and waiver are applicable to the facts and circumstances in this case. To the contrary, the doctrines of estoppel, laches and waiver have no applicability to the facts and circumstances of this matter. 4. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 31 of the New Matter filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer is necessary, it is specifically denied that Plaintiff's claims are barred by any statute of limitations. To the contrary, statute of limitations do not bar the claims raised by Plaintiff, Nature's Value, in the Complaint. 5. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 32 2 of the New Matter filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer is necessary, it is specifically denied that Plaintiff, Nature's Value, failed to perform its duties pursuant to the agreements. To the contrary, Plaintiff, Nature's Value, fully performed its duties pursuant to its agreements and therefore there is no bar to recovery. 6. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 33 of the New Matter filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer is necessary, it is specifically denied that Plaintiff's claims are barred by any of the terms of the agreements between the parties. To the contrary, the agreements do not bar the claims raised by Plaintiff, Nature's Value, in the Complaint. 7. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 34 of the New Matter filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer is necessary, it is specifically denied that the doctrine of unclean hands is applicable to the facts and circumstances in this case. To the contrary, the doctrine of unclean hands has no applicability to the facts and circumstances of this case. 8. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 35 3 of the New Matter riled by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer is necessary, it is specifically alleged in the Complaint that Plaintiff, Nature's Value, has suffered damages as a result of Defendant, Rite Aid's, breach of contract, failure to pay account stated, unjust enrichment and/or conversion. Therefore, Plaintiff, Nature's Value, does have standing to assert the claim against Defendant, Rite Aid. 9. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 36 of the New Matter filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer is necessary, it is specifically alleged that the facts and circumstances and the law fully support Plaintiff, Nature's Value's, claims in this matter. 10. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 37 of the New Matter filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer is necessary, it is specifically denied that the economic loss doctrine is applicable to the facts and circumstances in this case. To the contrary, the economic loss doctrine has no applicability to the facts and circumstances of this case. 11. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 38 4 of the New Matter filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer is necessary, it is specifically denied that the gist of the action doctrine is applicable to the facts and circumstances in this case. To the contrary, the gist of the action doctrine has no applicability to the facts and circumstances of this matter. 12. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 39 of the New Matter filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer is necessary, it is specifically denied that Defendant, Rite Aid, is entitled to any setoff under the facts and circumstances in this case. To the contrary, Defendant, Rite Aid, is not entitled to a set off pursuant to the facts and circumstances of this case. 13. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 40 of the New Matter filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer is necessary, it is specifically alleged that if Defendant, Rite Aid, has not pled its affirmative defenses, any such affirmative defenses not properly alleged at this time are waived. WHEREFORE, Plaintiff, Nature's Value, demands judgment against Defendant, Rite Aid, as requested in the various causes of action and the prayer for relief set forth in 5 the Complaint. PETERS & WASILEFSKI B Charles E. Wasilefski Attorney ID #21027 2931 North Front Street Harrisburg, PA 17110-1250 [717] 238-7555, Ext. 110 Attorney for Plaintiff, Nature's Value, Inc. Date: March 17, 2009 6 VRTF TIt N I hereby affirm that the following facts are correct: Nature's Value, Inc. is the Plaintiff in the foregoing action and I am authorized to execute this verification on its behalf The attached Reply to New Matter is based upon information that I have furnished to my counsel and information that has been gathered by my counsel in preparation of the prosecution of the lawsuit. The language of the Reply to New Matter is that of counsel and not of me. I have read the Reply to New Matter and to the extent that Reply to New Matter is based upon information which I have given to my counsel, it is true and correct to the hest of my knowledge, information and belief. To the extent that the content of the Reply to New Matter is that of counsel, T have relied upon counsel in making this verification. I hereby acknowledge that the facts set forth in the aforesaid Reply to New Matter' are made subject to the penalties of 18 Pa. C.S. Section 4904 relating, to unsworn falsification to authorities. Dated: 7 '? 4 NATURE'S VALUE, INC., Plaintiff V. RITE AID CORPORATION, Defendant . IN THE COURT OF COMMON PLEAS FOR CUMBERLAND COUNTY, PENNSYLVANIA NO. 09-678 CIVIL TERM CIVIL ACTION - LAW JURY TRIAL DEMANDED CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing REPLY OF PLAINTIFF, NATURE'S VALUE, INC., TO NEW MATTER' FILED BY DEFENDANT, RITE AID CORPORATION has been served on all parties of interest by placing the same in the United States mail, first-class postage pre-paid, at Harrisburg, Pennsylvania on this r?n day of ?S_ , 2009 and addressed as follows: Brian P. Downey, Esquire Justin G. Weber, Esquire PEPPER HAMILTON LLP 100 Market Street, Suite 200 Post Office Box 1181 Harrisburg, Pennsylvania 17108-1181 (Attorneys for Defendant, Rite Aid) Peters & Wasilefski rM? ? f 1 f"' Cf =? i 7 7 .. ?j ?}? c?n R { PETERS & WASILEFSKI By: Charles E. Wasilefski, Esquire Attorney #21027 2931 North Front Street Harrisburg, PA 17110 [717] 238-7555 Attorneys for Plaintiff, Nature's Value, Inc. NATURE'S VALUE, INC., Plaintiff V. RITE AID CORPORATION, Defendant IN THE COURT OF COMMON PLEAS FOR CUMBERLAND COUNTY, PENNSYLVANIA NO. 09-678 CIVIL TERM CIVIL ACTION - LAW JURY TRIAL DEMANDED NOTICE TO PLEAD TO: DEFENDANT AND ITS COUNSEL YOU ARE REQUIRED to plead to the within Answer with New Matter to Counterclaim within twenty (20) days of service hereof, or a default judgment may be entered against you. PETERS & WASILEFSKI I By: CHARLES E. WASILEFSKI Attorney ID #21027 2931 North Front Street Harrisburg, PA 17110 [717] 238-7555 Attorney for Plaintiff Dated: March 20, 2009 L 1 PETERS & WASILEFSKI By: Charles E. Wasilefski, Esquire Attorney #21027 2931 North Front Street Harrisburg, PA 17110 [7171238-7555 Attorneys for Plaintiff, Nature's Value, Inc. NATURE'S VALUE, INC., Plaintiff V. RITE AID CORPORATION, Defendant IN THE COURT OF COMMON PLEAS FOR CUMBERLAND COUNTY, PENNSYLVANIA NO. 09-678 CIVIL TERM CIVIL ACTION - LAW JURY TRIAL DEMANDED ANSWER WITH NEW MATTER OF PLAINTIFF, NATURE'S VALUE, INC., TO COUNTERCLAIM FILED BY DEFENDANT, RITE AID CORPORATION NOW COMES, Plaintiff, Nature's Value, Inc. ("Nature's Value"), by and through its attorneys, Peters & Wasilefski, and answers the Counterclaim filed by Defendant, Rite Aid Corporation ("Rite Aid"), as follows: 1. Upon information and belief, Plaintiff, Nature's Value, admits the allegations contained in Paragraph 41 of the Counterclaim filed by Defendant, Rite Aid. 2. Plaintiff, Nature's Value, admits the allegations contained in Paragraph 42 of the Counterclaim filed by Defendant, Rite Aid. 3. Plaintiff, Nature's Value, admits the allegations contained in Paragraph 43 of the Counterclaim filed by Defendant, Rite Aid. 4. Plaintiff, Nature's Value, admits the allegations contained in Paragraph 44 of the Counterclaim filed by Defendant, Rite Aid. 5. Plaintiff, Nature's Value, admits in part and denies in part the allegations contained in Paragraph 45 of the Counterclaim filed by Defendant, Rite Aid. It is admitted that on or about December 8, 2006, Plaintiff, Nature's Value, and Defendant, Rite Aid, entered into a Rite Aid Corporation Guaranteed Sales Agreement and that a copy of said Agreement is attached to the Complaint as Exhibit "A". That document is a writing that speaks for itself and any allegation inconsistent with the writing is denied. The allegations contained in Paragraph 45 of the Counterclaim are an attempt to paraphrase and provide a self serving interpretation of the writing which is specifically denied. 6. Plaintiff, Nature's Value, admits in part and denies in part the allegations contained in Paragraph 46 of the Counterclaim filed by Defendant, Rite Aid. It is admitted that on or about December 8, 2006, Plaintiff, Nature's Value, and Defendant, Rite Aid, entered into a Rite Aid Corporation Guaranteed Sales Agreement and that a copy of said Agreement is attached to the Complaint as Exhibit "A". That document is a writing that speaks for itself and any allegation inconsistent with the writing is denied. The allegations contained in Paragraph 46 of the Counterclaim are an attempt to paraphrase and provide a self serving interpretation of the writing which is specifically denied. 7. Plaintiff, Nature's Value, admits in part and denies in part the allegations contained in Paragraph 47 of the Counterclaim filed by Defendant, Rite Aid. It is 2 admitted that on or about March 17, 2006, Plaintiff, Nature's Value, and Defendant, Rite Aid, entered into a Rite Aid Returns Agreement and that a copy of said Agreement is attached to the Counterclaim as Exhibit "B". That document is a writing that speaks for itself and any allegation inconsistent with the writing is denied. The allegations contained in Paragraph 47 of the Counterclaim are an attempt to paraphrase and provide a self serving interpretation of the writing which is specifically denied. 8. Plaintiff, Nature's Value, admits in part and denies in part the allegations contained in Paragraph 48 of the Counterclaim filed by Defendant, Rite Aid. It is admitted that on or about January 4, 2008, Plaintiff, Nature's Value, and Defendant, Rite Aid, entered into a Rite Aid Promotional Funding Agreement and that a copy of said Agreement is attached to the Counterclaim as Exhibit "C". That document is a writing that speaks for itself and any allegation inconsistent with the writing is denied. The allegations contained in Paragraph 48 of the Counterclaim are an attempt to paraphrase and provide a self serving interpretation of the writing which is specifically denied. 9. Plaintiff, Nature's Value, admits in part and denies in part the allegations contained in Paragraph 49 of the Counterclaim filed by Defendant, Rite Aid. It is admitted that on or about December 8, 2006, Plaintiff, Nature's Value, and Defendant, Rite Aid, entered into a Rite Aid Corporation Guaranteed Sales Agreement and that a copy of said Agreement is attached to the Complaint as Exhibit "A". That document is a writing that speaks for itself and any allegation inconsistent with the writing is denied. The allegations contained in Paragraph 49 of the Counterclaim are an attempt to 3 paraphrase and provide a self serving interpretation of the writing which is specifically denied. 10. Plaintiff, Nature's Value, admits in part and denies in part the allegations contained in Paragraph 50 of the Counterclaim filed by Defendant, Rite Aid. It is admitted that on or about December 8, 2006, Plaintiff, Nature's Value, and Defendant, Rite Aid, entered into a Rite Aid Corporation Guaranteed Sales Agreement and that a copy of said Agreement is attached to the Complaint as Exhibit "A". That document is a writing that speaks for itself and any allegation inconsistent with the writing is denied. The allegations contained in Paragraph 50 of the Counterclaim are an attempt to paraphrase and provide a self serving interpretation of the writing which is specifically denied. 11. Plaintiff, Nature's Value, admits in part and denies in part the allegations contained in Paragraph 51 of the Counterclaim filed by Defendant, Rite Aid. It is admitted that on or about December 8, 2006, Plaintiff, Nature's Value, and Defendant, Rite Aid, entered into a Rite Aid Corporation Guaranteed Sales Agreement and that a copy of said Agreement is attached to the Complaint as Exhibit "A". That document is a writing that speaks for itself and any allegation inconsistent with the writing is denied. The allegations contained in Paragraph 51 of the Counterclaim are an attempt to paraphrase and provide a self serving interpretation of the writing which is specifically denied. 12. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 52 of the Counterclaim filed by Defendant, Rite Aid. To the contrary, the writings that form 4 the agreements between Plaintiff, Nature's Value, and Defendant, Rite Aid, do not provide any such requirement nor do the documents make reference to any such representation so as to make any such alleged representation, which is specifically denied, a part of any agreement between Plaintiff, Nature's Value, and Defendant, Rite Aid. 13. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 53 of the Counterclaim filed by Defendant, Rite Aid. It is denied that there was any requirement or duty of Plaintiff, Nature's Value, to expend $2,000,000 for advertising as part of its agreements with Defendant, Rite Aid. To the contrary, there was no such representation or agreement. 14. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 54 of the Counterclaim filed by Defendant, Rite Aid. To the knowledge of Plaintiff, Nature's Value, the review period was not extended and therefore is no longer applicable regarding the transactions between Plaintiff, Nature's Value, and Defendant, Rite Aid. 15. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 55 of the Counterclaim filed by Defendant, Rite Aid. To the knowledge of Plaintiff, Nature's Value the review period was not extended and therefore is no longer applicable regarding the transactions between Plaintiff, Nature's Value, and Defendant, Rite Aid. 16. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 56 of the Counterclaim filed by Defendant, Rite Aid. To the contrary, any returns or attempts at return of product was contrary to the terms of the agreements, including the 5 Rite Aid Returns Agreement, and therefore in violation and breach of the agreements between the parties. 17. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 57 of the Counterclaim filed by Defendant, Rite Aid. To the contrary, any returns or attempts to return product was contrary to the terms of the agreements, including the Rite Aid Returns Agreement, and therefore in violation and breach of the agreements between the parties. Where Plaintiff, Nature's Value, has refused to accept the return of product it is because such returns were in violation and breach of the agreements by Defendant, Rite Aid. 18. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 58 of the Counterclaim filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer may be necessary, it is specifically denied that Plaintiff, Nature's Value, is in breach of any of its agreements with Defendant, Rite Aid. To the contrary, Plaintiff, Nature's Value, incorporates the allegations contained in its Complaint as if fully rewritten herein. At all times relevant, it is Defendant, Rite Aid that has breached its agreements with Plaintiff, Nature's Value, and has failed to pay for product ordered and received by Defendant, Rite Aid, and sold to third parties. Additionally, Defendant, Rite Aid, has also violated and breached its agreements with Plaintiff, Nature's Value, in other respects, including inappropriate return of product that is in breach of its agreements with Plaintiff, Nature's Value. 6 19. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 59 of the Counterclaim filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer may be necessary, it is specifically denied that Plaintiff, Nature's Value, is in breach of any of its agreements with Defendant, Rite Aid. To the contrary, Plaintiff, Nature's Value, incorporates the allegations contained in its Complaint as if fully rewritten herein. At all times relevant, it is Defendant, Rite Aid that has breached its agreements with Plaintiff, Nature's Value, and has failed to pay for product ordered and received by Defendant, Rite Aid, and sold to third parties. Additionally, Defendant, Rite Aid, has also violated and breached its agreements with Plaintiff, Nature's Value, in other respects, including inappropriate return of product that is in breach of its agreements with Plaintiff, Nature's Value. Plaintiff, Nature's Value, does not owe any monies to Defendant, Rite Aid. To the contrary, it is Defendant, Rite Aid, that owes Plaintiff, Nature's Value, a sum in excess of One Million Dollars ($1,000,000.00) for product ordered, purchased and received from Plaintiff, Nature's Value. COUNTI BREACH OF CONTRACT RITE AID V. NATURE'S VALUE 20. Plaintiff, Nature's Value, incorporates its answers contained in Paragraphs 1 through 19 above and the allegations contained in its Complaint as if fully rewritten herein in response to Paragraph 60 of the Counterclaim filed by Defendant, Rite Aid. 7 21. Plaintiff, Nature's Value, admits in part and denies in part the allegations contained in Paragraph 61 of the Counterclaim filed by Defendant, Rite Aid. It is admitted that on or about December 8, 2006, Plaintiff, Nature's Value, and Defendant, Rite Aid, entered into a Rite Aid Corporation Guaranteed Sales Agreement and on or about March 17, 2006, Plaintiff, Nature's Value, and Defendant, Rite Aid, entered into a Rite Aid Returns Agreement. Said documents are writings that speak for themselves and any allegation inconsistent with the writings is denied. The allegations contained in Paragraph 61 of the Counterclaim are an attempt to paraphrase and provide a self serving interpretation of the writing which is specifically denied. 22. Plaintiff, Nature's Value, admits in part and denies in part the allegations contained in Paragraph 62 of the Counterclaim filed by Defendant, Rite Aid. It is admitted that on or about December 8, 2006, Plaintiff, Nature's Value, and Defendant, Rite Aid, entered into a Rite Aid Corporation Guaranteed Sales Agreement and on or about March 17, 2006, Plaintiff, Nature's Value, and Defendant, Rite Aid, enter into the Rite Aid Returns Agreement. Said documents are writings that speak for themselves and any allegation inconsistent with the writings is denied. The allegations contained in Paragraph 62 of the Counterclaim are an attempt to paraphrase and provide a self serving interpretation of the writing which is specifically denied. 23. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 63 of the Counterclaim filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer may be necessary, it is specifically 8 denied that Plaintiff, Nature's Value, is in breach of any of its agreements with Defendant, Rite Aid. To the contrary, Plaintiff, Nature's Value, incorporates the allegations contained in its Complaint as if fully rewritten herein. At all times relevant, it is Defendant, Rite Aid that has breached its agreements with Plaintiff, Nature's Value, and has failed to pay for product ordered and received by Defendant, Rite Aid, and sold to third parties. Additionally, Defendant, Rite Aid, has also violated and breached its agreements with Plaintiff, Nature's Value, in other respects, including inappropriate return of product that is in breach of its agreements with Plaintiff, Nature's Value. 24. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 64 of the Counterclaim filed by Defendant, Rite Aid. To the contrary, Plaintiff, Nature's Value, incorporates the allegations contained in its Complaint as if fully rewritten herein. At all times relevant, it is Defendant, Rite Aid that has breached its agreements with Plaintiff, Nature's Value, and has failed to pay for product ordered and received by Defendant, Rite Aid and sold to third parties. Additionally, Defendant, Rine Aid, has also violated and breached its agreements with Plaintiff, Nature's Value, in other respects, including inappropriate return of product that is in breach of its agreements with Plaintiff, Nature's Value. 25. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 65 of the Counterclaim filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer may be necessary, it is specifically denied that Plaintiff, Nature's Value, is in breach of any of its agreements with 9 Defendant, Rite Aid. To the contrary, Plaintiff, Nature's Value, incorporates the allegations contained in its Complaint as if fully rewritten herein. At all times relevant, it is Defendant, Rite Aid that has breached its agreements with Plaintiff, Nature's Value, and has failed to pay for product ordered and received by Defendant, Rite Aid and sold to third parties. Additionally, Defendant, Rite Aid, has also violated and breached its agreements with Plaintiff, Nature's Value, in other respects, including inappropriate return of product that is in breach of its agreements with Plaintiff, Nature's Value. Plaintiff, Nature's Value, does not owe any monies to Defendant, Rite Aid. To the contrary, it is Defendant, Rite Aid that owes Plaintiff, Nature's Value, a sum in excess of One Million Dollars ($1,000,000.00) for product ordered, purchased and received from Plaintiff, Nature's Value. With regard to any claim for damages, which is specifically denied, after reasonable investigation, Plaintiff, Nature's Value is without knowledge or information sufficient to form a belief as to the truth of said allegations and proof thereof is demanded at trial. WHEREFORE, Plaintiff, Nature's Value, demands that the Counterclaim filed by Defendant, Rite Aid, be dismissed. COUNT II BREACH OF CONTRACT RITE AID V. NATURE'S VALUE 26. Plaintiff, Nature's Value, incorporates its answers contained in Paragraphs 1 through 25 above and the allegations contained in its Complaint as if fully rewritten 10 herein in response to Paragraph 66 of the Counterclaim filed by Defendant, Rite Aid. 27. Plaintiff, Nature's Value, admits in part and denies in part the allegations contained in Paragraph 67 of the Counterclaim filed by Defendant, Rite Aid. It is admitted that on or about December 8, 2006, Plaintiff, Nature's Value, and Defendant, Rite Aid, entered into a Rite Aid Corporation Guaranteed Sales Agreement. Said document is a writing that speaks for itself and any allegation inconsistent with the writing is denied. The allegations contained in Paragraph 67 of the Counterclaim are an attempt to paraphrase and provide a self serving interpretation of the writing which is specifically denied. 28. Plaintiff, Nature's Value, admits the allegations contained in Paragraph 68 of the Counterclaim filed by Defendant, Rite Aid. 29. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 69 of the Counterclaim filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer may be necessary, it is specifically denied that the commencement of the lawsuit in California is a breach of any agreement. Said document is a writing that speaks for itself and any allegation inconsistent with the writing is denied. The allegations contained in Paragraph 69 of the Counterclaim are an attempt to paraphrase and provide a self serving interpretation of the writing which is specifically denied. 30. Plaintiff, Nature's Value, admits the allegations contained in Paragraph 70 11 of the Counterclaim filed by Defendant, Rite Aid. 31. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 71 of the Counterclaim filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer may be necessary, it is specifically denied that Plaintiff, Nature's Value, breached any of its agreements with Defendant, Rite Aid. To the contrary, at all times relevant, Plaintiff, Nature's Value, has complied with all aspects if its agreements with Defendant, Rite Aid. The filing of the action in California is not a breach of the agreement. With regard to the allegations related to alleged damages, which are specifically denied, after reasonable investigation, Plaintiff, Nature's Value, is without knowledge or information sufficient to form a belief as to the truth of said allegations and proof thereof is demanded at trial. 32. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 72 of the Counterclaim filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer is necessary, it is specifically denied that Defendant, Rite Aid, is entitled to the relief requested. To the contrary, there is nothing in the Agreement that would create entitlement to recover legal fees and costs. WHEREFORE, Plaintiff, Nature's Value, demands that the Counterclaim filed by Defendant, Rite Aid, be dismissed. 12 COUNT III UNJUST ENRICHMENT RITE AID V. NATURE'S VALUE 33. Plaintiff, Nature's Value, incorporates its answers contained in Paragraphs 1 through 32 above and the allegations contained in its Complaint as if fully rewritten herein in response to Paragraph 73 of the Counterclaim filed by Defendant, Rite Aid. 34. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 74 of the Counterclaim filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer may be necessary, Plaintiff, Nature's Value, incorporates its Complaint as if fully rewritten herein. In further answer, Plaintiff, Nature's Value, denies that Defendant, Rite Aid, is entitled to collect any monies from Plaintiff, Nature's Value. To the contrary, Defendant, Rite Aid, owes in excess of One Million Dollars ($1,000,000.00) to Plaintiff, Nature's Value, for product that was ordered and received by Defendant, Rite Aid, for which it has not paid any sums. It is not Plaintiff, Nature's Value, that has been unjustly enriched, it is Defendant, Rite Aid, that has been unjustly enriched as a result of ordering and receiving product without paying for it. 35. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 75 of the Counterclaim filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further 13 answer is required. To the extent that an answer may be necessary, Plaintiff, Nature's Value, specifically denies that Defendant, Rite Aid, is entitled to be paid anything under the facts and circumstances of this case. To the contrary, Defendant, Rite Aid, has ordered, purchased and received product from Plaintiff, Nature's Value, and has not paid for said product. To the contrary, Defendant, Rite Aid, owes in excess of One Million Dollars ($1,000,000.00) to Plaintiff, Nature's Value, for product that was ordered and received by Defendant, Rite Aid, for which it has not paid any sums. 36. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 76 of the Counterclaim filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer may be necessary, it is specifically denied that Defendant, Rite Aid, has no remedy at law. 37. Plaintiff, Nature's Value, denies the allegations contained in Paragraph 77 of the Counterclaim filed by Defendant, Rite Aid. Plaintiff, Nature's Value, is advised and therefore avers that said allegations are conclusions of law to which no further answer is required. To the extent that an answer may be necessary, Plaintiff, Nature's Value, specifically denies that Defendant, Rite Aid, is entitled to be paid anything under the facts and circumstances of this case. To the contrary, Defendant, Rite Aid, has ordered, purchased and received product from Plaintiff, Nature's Value, and has not paid for said product. To the contrary, Defendant, Rite Aid, owes in excess of One Million Dollars ($1,000,000.00) to Plaintiff, Nature's Value, for product that was ordered and received by Defendant, Rite Aid, for which it has not paid any sums. It has been 14 Defendant, Rite Aid, that has been unjustly enriched as a result of the facts and circumstances of this case. WHEREFORE, Plaintiff, Nature's Value, demands that the Counterclaim filed by Defendant, Rite Aid, be dismissed. NEW MATTER TO COUNTERCLAIM 38. Plaintiff, Nature's Value, incorporates its Complaint as if fully rewritten herein. 39. As a result of its failure to promptly pay all outstanding invoices, Defendant, Rite Aid, has breached the contract and Plaintiff, Nature's Value, has sustained damage in the sum of One Million Six Hundred Sixty-nine Thousand Two Hundred Ninety-two Dollars and Sixteen Cents ($1,669,292.16), which represents the value of the product that was ordered by, sold and delivered to Defendant, Rite Aid. 40. By reason of Defendant, Rite Aid's, failure and refusal to pay the amount of the account stated, Plaintiff, Nature's Value, has been damaged in an amount of at least Three Hundred Eighty-one Thousand Two Hundred Thirty-six Dollars and Sixty- one Cents ($381,236.61). 41. Defendant, Rite Aid, has been unjustly enriched by receiving and accepting such product without paying for it and Plaintiff, Nature's Value, has been damaged in the sum of One Million Six Hundred Sixty-nine Thousand Two Hundred Ninety-two Dollars and Sixteen Cents ($1,669,292.16). 15 42. As a result of the conversion of said product for the sole financial benefit of Defendant, Rite Aid, Plaintiff, Nature's Value, has been damaged in the sum of One Million Six Hundred Sixty-nine Thousand Two Hundred Ninety-two Dollars and Sixteen Cents ($1,669,292.16). 43. The Counterclaim filed by Defendant, Rite Aid, fails to state a claim upon which relief may be granted. 44. The various agreements between the parties of this matter were documents prepared by Defendant, Rite Aid, and the terms of the agreements were non-negotiable. 45. The various agreements between the parties of this matter may be considered contracts of adhesion and interpreted strictly against the drafter, Defendant, Rite Aid. 46. Plaintiff, Nature's Value, complied with all of the requirements of the agreements between the parties. 47. Defendant, Rite Aid, has not complied with the requirements of the agreements between the parties. 48. The Counterclaim filed by Defendant, Rite Aid, is barred by the equitable doctrines of estoppel, laches and waiver. 49. The Counterclaim filed by Defendant, Rite Aid, is barred by the applicable statute of limitations. 50. Plaintiff, Nature's Value, 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 the Plaintiff, Nature's Value, relies upon such other defenses as may become 16 available or appear during the course of discovery proceedings in this case. Plaintiff, Nature's Value, reserves the right to amend this Answer with New Matter to the Counterclaim to assert such defenses. WHEREFORE, Plaintiff, Nature's Value, demands that the Counterclaim filed by Defendant, Rite Aid, be dismissed. PETERS & WASILEFSKI By Charles E. Wasilefski Attorney ID #21027 2931 North Front Street Harrisburg, PA 17110-1250 [717] 238-7555, Ext. 110 Attorney for Plaintiff, Nature's Value, Inc. Date: March 17, 2009 17 VERIFICATION I hereby affirm that the following facts arc correct: Nature's Value, Inc. is the Plaintiff in the foregoing action and I am authorized to execute this verification on its behalf. The attached Answer with New Matter to Counterclaim is based upon information that I have furnished to my counsel and information that has been gathered by my counsel in preparation of the prosecution of the lawsuit. The language of the Answer with New Matter to Counterclaim' is that of counsel and not of mc. I have read the Answer with New Matter to Countcrclaiim and to the extent that Answer with New Matter to Counterclaim is based upon information which I have given to my counsel, it is true and correct to the best of my knowledge, information and belief. To the extent that the content of the Answer with New Matter to Counterclaim is that of counsel, I have relied upon counsel in making this verification. I hereby acknowledge that the facts set forth in the aforesaid Answer with Now Matter to Counterclaim are made subiect to the penalties of 18 Pa. C.S. Section 4904 relating to unsworn falsification to authorities. Dated. / 9 (,zoo 9 NATURE'S VALUE, INC., Plaintiff V. . RITE AID CORPORATION, Defendant IN THE COURT OF COMMON PLEAS FOR CUMBERLAND COUNTY, PENNSYLVANIA NO. 09-678 CIVIL TERM CIVIL ACTION - LAW JURY TRIAL DEMANDED CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing ANSWER WITH NEW MATTER OF PLAINTIFF, NATURE'S VALUE, INC., TO COUNTERCLAIM FILED BY DEFENDANT, RITE AID CORPORATION has been served on all parties of interest by placing the same in the United States mail, first- class postage pre-paid, at Harrisburg, Pennsylvania on this day of 2009 and addressed as follows: Brian P. Downey, Esquire Justin G. Weber, Esquire PEPPER HAMILTON LLP 100 Market Street, Suite 200 Post Office Box 1181 Harrisburg, Pennsylvania 17108-1181 (Attorneys for Defendant, Rite Aid) Peters & Wasilefski ?- C- -4 wv -cry C9 NATURE'S VALUE, INC. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, NO. 09-678 CIVIL TERM VS. RITE AID CORPORATION, : CIVIL ACTION - LAW Defendant. : JURY TRIAL DEMANDED - CERTIFICATE PREREQUISITE TO SERVICE OF SUBPOENA PURSUANT TO RULE 4009.22 As a prerequisite to service of a subpoena for documents and things pursuant to Rule 4009.22, Defendant's counsel certifies that counsel for plaintiff Nature's Value, Inc. has agreed to waive the notice period pursuant to Pa. R. Civ. P. 4009.21 et seq. rian . Downey (PA 59891 . n G. Weber (PA 89266) PEPPER HAMILTON LLP 100 Market Street, Suite 200 Post Office Box 1181 Harrisburg, PA 17108-1181 Telephone : 717.2 5 5.115 5 Fax: 717.238.0575 Email: downeyb@pepperlaw.com weberjg@pepperlaw.com Attorneys for Defendant Date: March 25, 2009 Rite Aid Corporation CERTIFICATE OF SERVICE I certify that on March 25, 2009, I caused a true and correct copy of the foregoing Certificate Prerequisite to Service of Subpoena Pursuant to Rule 4009.22 to be served upon counsel of record by United States mail, first class postage prepaid, addressed as follows: Charles E. Wasilefski, Esquire Peters & Wasilefski 2931 North Front Street Harrisburg, PA 17110 (?4g L Lt- J*tVG. Weber (PA 89266) s f.y "JI 1:3 C., " --< NATURE'S VALUE, INC. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, NO. 09-678 CIVIL TERM vs. RITE AID CORPORATION, CIVIL ACTION - LAW Defendant. JURY TRIAL DEMANDED ANSWER OF RITE AID CORPORATION TO NATURE'S VALUE. INC.'S NEW MATTER Rite Aid Corporation, by and through its undersigned attorneys, hereby responds to Nature's Value, Inc.'s ("Nature's Value" or "Plaintiff') New Matter as follows: 38. Rite Aid Corporation ("Rite Aid") incorporates its response to Plaintiff's complaint as set forth herein. 39. Denies. This paragraph states conclusions of law to which no response is required and accordingly they are denied. To the extent an answer is required, Rite Aid admits only that Nature's Value delivered and invoiced product to Rite Aid and that those invoices were in the amount of $1,669,292.16 as of March 20, 2008. Rite Aid denies any suggestion that it owes any money to Nature's Value. To the contrary, as set forth in Rite Aid's counterclaim, Nature's Value owes money to Rite Aid. 40. Denies. This paragraph states a conclusion of law to which no response is required and accordingly it is denied. If a response is required, Rite Aid denies any suggestion that it owes any money to Nature's Value. To the contrary, as set forth in Rite Aid's counterclaim, Nature's Value owes money to Rite Aid. 41. Denies. This paragraph states a conclusion of law to which no response is required and accordingly it is denied. If a response is required, Rite Aid denies any suggestion that it owes any money to Nature's Value. To the contrary, as set forth in Rite Aid's counterclaim, Nature's Value owes money to Rite Aid. 42. Denies. This paragraph states a conclusion of law to which no response is required and accordingly it is denied. If a response is required, Rite Aid denies any suggestion that it owes any money to Nature's Value. To the contrary, as set forth in Rite Aid's counterclaim, Nature's Value owes money to Rite Aid. 43. Denies. This paragraph states a conclusion of law to which no response is required and accordingly it is denied. 44. Admits in part and denies in part. Rite Aid admits only that it prepared certain agreements between the parties in this matter and denies that the terms of the agreements it prepared were non-negotiable. By way of further response, Rite Aid is unaware that Nature's Value requested any revisions to the documents. 45. Denies. This paragraph states a conclusion of law to which no response is required and accordingly it is denied. 46. Denies. This paragraph states a conclusion of law to which no response is required and accordingly it is denied. By way of further response, as set forth in Rite Aid's counterclaim, Nature's Value has not complied with the requirements of the agreements between the parties. 47. Denies. This paragraph states a conclusion of law to which no response is required and accordingly it is denied. If an answer is required, Rite Aid has complied with all material requirements of the agreements between the parties. -2- 48. Denies. This paragraph states a conclusion of law to which no response is required and accordingly it is denied. 49. Denies. This paragraph states a conclusion of law to which no response is required and accordingly it is denied. 50. Denies. This paragraph states a conclusion of law to which no response is required and accordingly it is denied. WHEREFORE, Rite Aid requests that the Court grant judgment in its favor as requested in its counterclaim, that the complaint filed by Nature's Value be dismissed, and any other relief that this Court deems appropriate. 11??.k ?? UJ B ian . Downey (PA 59891) Ju ' G. Weber (PA 89266) PEPPER HAMILTON LLP 100 Market Street, Suite 200 Post Office Box 1181 Harrisburg, PA 17108-1181 Telephone: 717.255.1155 Fax: 717.238.0575 Email: downeyb@pepperlaw.com weberj g@pepperlaw.com Attorneys for Defendant Date: April 1, 2009 Rite Aid Corporation -3- VERIFICATION Ron Chima signs this Verification on behalf of Rite Aid Corporation, and does hereby verify that the foregoing Answer of Rite Aid Corporation to Nature's Value, Inc.'s 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 certify that on April 1, 2009, I caused a true and correct copy of the foregoing Answer of Rite Aid Corporation to Nature's Value, Inc. 's New Matter to be served upon counsel of record by United States mail, first class postage prepaid, addressed as follows: Charles E. Wasilefski, Esquire Peters & Wasilefski 2931 North Front Street Harrisburg, PA 17110 ust' G. Weber (PA 89266) F -WOE OF THE PPOT? NOTARY 209 APR -2 AM ? 52 VENN'SYLVANIA NATURE'S VALUE, INC. vs RITE AID CORPORATION ~ tl• i r„ - ' 1 .. S ~- ~~~- 09-0678 _ ';:, ~ ~.~ ~ Case No. --- - -- '~: Statement of Intention to Proceed fo the Court: Nature's Value, Inc. t:,harles E. Wasilefski, Esquire Print Name_ _ October 22, 2012 Date: _ _ intends to proceed with the above captioned matter. i'. _ ~, ~ ~ ~ Sign Nam, ~ ~ _, t~%c.L(`~-'`~^~- Nature's Value,~,~nc. Attorney for Explanatory Comment l he Supreme Court of Pennsylvania has promulgated new Rule of Civil Procedure 230.2 governing the termination of inactive case, and amended Rule or Judicial Administration 1901. Two aspects of the recommendatiun merit comment. I. Rule o_/civii Procedure New Rule of Civil Procedure 230.2 has been promulgated to govern the termination of inactive cases within the scope of the Pennsylvania Rules of Civil Procedure. The termination of these cases for inactivity was previously governed by Rule of Judicial Administration 1901 acrd local rules promulgated pursuant to it. New Rule 2 30.2 is tailored to the needs of civil actions. It provides a complete procedure and a uniform statewide practice, preempting local rule,. This rule was promulgated in response to the decision of the Supreme Court in Shop v. Eagle, 551 Pa. 360,710 A.2d 1104 (1998) in which the court held that "prejudice to the defendant as a result of delay in prosecution is required before a case may be dismissed pursuant to local rules implementing Rule of Judicial Administration 1901." Rule of.ludicial Administration 1901(b) has been amended to accommodate the new rule of civil procedure. The general policy of the prompt disposition of matters set forth in subdivision (a) of that rule continues to he applicable. 11 Inactire Ccrses The purpose of Rule 230.2 is to eliminate inactive cases from the judicial system. "fhe process is initiated by the court. After giving notice of intent to terminate an action for inactivity, the course of the procedure is with the parties. If the parries de not wish to pursue the case, they will take no action and "the Prothonotary shall enter an order as of course terminating the matter with prejudice for failure to prosecute.." I f a party wishes to pursue the matter. he or she ~.vill file a notice of intention to proceed and the action shall continue. a. N here the action has been terminated If the action is terminated when a party believes that it should not have been terminated, that party may proceed under Ru1e230(d) for relief from the order of termination. An example of such an occurrence might be the termination of a viable action when the aggrieved party did not receive the notice of intent to terminate and thus did not timely file the notice of intention to proceed. The timing of the tiling of the petition to reinstate the action is important. If the petition is tiled within thirty days of the entry of the order of termination on the docket, subdivision (d)(2) provides that the court must grant the petition and reinstate the action. If the petition is filed later than the thirty-day period, subdivision (d)(3) requires that the plaintiff must make a showing to the court that the petition was promptly filed and that there is a reasonable explanation or legitimate excuse both for the failure to file the notice of intention to proceed prior to the envy of the order of termination on the docket and for the failure to file the petition within the thirty-day period under subdivision (dl(2). li Where: the action has not been terminated An action which has not been terminated but which continues upon the filing of a notice of intention to proceed may have been the subject of inordinate delay. In such an instance, the aggrieved party may pursue the remedy of a common law non pros which exits independently of termination under Rule 230.2. NATURE'S VALUE, INC., Plaintiff v. RITE ALD CORPORATION, Defendant IN THE COURT OF COMMON PLEAS FOR CUMBERLAND COUNTY, PENNSYLVANIA NO. 09-678 CIVIL TERM CIVIL ACTION -LAW JURY TRIAL DEMANDED CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing STATEMENT OF INTENTION TO PROCEED has been served on all parties of interest by placing the same in the United States mail, first-class postage pre-paid, at Harrisburg, Pennsylvania on this ~_ day of ~'`~ ~~] 2012 and addressed as follows: Brian P. Downey, Esquire Justin G. Weber, F,squire PEPPER HAMILTON LLP 100 Market Street, Suite 200 Post Office Box r 181 Harrisburg, Pennsylvania. 17108-1181 (Attorneys for Defendant, Rite Aid) Peters & Wasilefski ~.. ~, NATURE'S VALUE INC. `- vs RITE AID CORPORATION ?1 # 1g. u 0 09-678 Civil Term , 3 J?S Yt_\1 ttIA Case No. To the Court: Statement of Intention to Proceed Defendant Rite Aid Corporation Print Name Justin G. Weber October 23, 2012 Date: intends to proceed with the above captioned matter. Sign Name Defendant Rite Aid Corporation Attorney for Explanatory Comment The Supreme Court of Pennsylvania has promulgated new Rule of Civil Procedure 230.2 governing the termination of inactive cases and amended Rule of Judicial Administration 1901. Two aspects of the recommendation merit comment. 1. Rule of civil Procedure New Rule of Civil Procedure 230.2 has been promulgated to govern the termination of inactive cases within the scope of the Pennsylvania Rules of Civil Procedure. The termination of these cases for inactivity was previously governed by Rule of Judicial Administration 1901 and local rules promulgated pursuant to it. New Rule 230.2 is tailored to the needs of civil actions. It provides a complete procedure and a uniform statewide practice, preempting local rules. This rule was promulgated in response to the decision of the Supreme Court in Shop v. Eagle, 551 Pa. 360,710 A.2d 1104 (1998) in which the court held that "prejudice to the defendant as a result of delay in prosecution is required before a case may be dismissed pursuant to local rules implementing Rule of Judicial Administration 1901." Rule of Judicial Administration 1901(b) has been amended to accommodate the new rule of civil procedure. The general policy of the prompt disposition of matters set forth in subdivision (a) of that rule continues to be applicable. II Inactive Cases The purpose of Rule 230.2 is to eliminate inactive cases from the judicial system. The process is initiated by the court. After giving notice of intent to terminate an action for inactivity, the course of the procedure is with the parties. If the parties do not wish to pursue the case, they will take no action and "the Prothonotary shall enter an order as of course terminating the matter with prejudice for failure to prosecute." If a party wishes to pursue the matter, he or she will file a notice of intention to proceed and the action shall continue. a. Where the action has been terminated If the action is terminated when a party believes that it should not have been terminated, that party may proceed under Rule230(d) for relief from the order of termination. An example of such an occurrence might be the termination of a viable action when the aggrieved party did not receive the notice of intent to terminate and thus did not timely file the notice of intention to proceed. The timing of the filing of the petition to reinstate the action is important. If the petition is filed within thirty days of the entry of the order of termination on the docket, subdivision (d)(2) provides that the court must grant the petition and reinstate the action. If the petition is filed later than the thirty-day period, subdivision (d)(3) requires that the plaintiff must make a showing to the court that the petition was promptly filed and that there is a reasonable explanation or legitimate excuse both for the failure to file the notice of intention to proceed prior to the entry of the order of termination on the docket and for the failure to file the petition within the thirty-day period under subdivision (d)(2). B. Where the action has not been terminated An action which has not been terminated but which continues upon the filing of a notice of intention to proceed may have been the subject of inordinate delay. In such an instance, the aggrieved party may pursue the remedy of a common law non pros which exits independently of termination under Rule 230.2. V CERTIFICATE OF SERVICE I hereby certify that on October 23, 2012,1 served a copy of the foregoing Statement of Intention to Proceed on counsel of record by United States mail, first class postage prepaid, addressed as follows: Charles E. Wasilefski, Esquire Peters & Wasilefski 2931 North Front Street Harrisburg, PA 17110 _a L Ju m '. Weber (PA 89266)