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HomeMy WebLinkAbout09-7265 PNC BANK, N.A., : IN THE COURT OF COMMON PLEAS Plaintiff, : OF CUMBERLAND COUNTY, PA : CIVIL ACTION -LAW . NO. q LOWELL R. GATES, Defendant, 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 nay 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 LAYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. CUMBERLAND COUNTY BAR ASSOCIATION 32 SOUTH BEDFORD STREET CARLISLE, PA 17013 (717) 249-3166 PNC BANK, N.A., : IN THE COURT OF COMMON PLEAS Plaintiff, : OF CUMBERLAND COUNTY, PA : CIVIL ACTION - LAW : NO. LOWELL R. GATES, Defendant, COMPLAINT 1.) Plaintiff PNC Bank, N.A., is a national bank with its place of business in Hampden Township, Cumberland County, Pennsylvania. 2.) Defendant Lowell R. Gates is an adult individual, sui juris, a resident of Cumberland County, Pennsylvania. 3.) At all times material to this litigation, Defendant Lowell R. Gates was licensed to practice law in the Commonwealth of Pennsylvania, his identification number is 46779. 4.) Plaintiff is the executor of the Last Will and Testament of William G. Magaro, deceased who died June 6, 1990. 5.) At the time of his death William G. Magaro owned a 75% interest in a Pennsylvania general partnership known as Variety Investments. 6.) In 1957 Variety Investments registered the fictitious name Variety Amusements and thereafter the Variety Investments partnership did business as Variety Amusements. 7.) At all times material to this litigation Variety Investments owned and had possession of 9600 shares of Greenray Industries, Inc. stock issued October 12 1967, in the name of Variety Amusements, represented by stock certificate number' 176, attached as Exhibit 1. 8.) In 1990 a company known as C-MAC Quartz Crystals Industries offered to redeem the Greenray Industries, Inc. stock owned by Variety Investments from Variety Amusements, the registered owner, for $34,560.00 which offer was accepted. COUNT 1 PNC BANK, N.A. V. LOWELL R GATES, ATTORNEY FOR EXECUTOR 9•) Paragraphs 1 thru 8 are incorporated by reference. 10.) The stock certificate was delivered by PNC Bank, N.A. plaintiff to Lowell R. Gates, Esquire who received the certificate as an asset of Variety Investments and agreed to submit the certificate to C-MAC Quartz Crystal l Industries for redemption on behalf of the partnership. 11.) At all times material to this litigation defendant Lowell R. Gates, Esquire knew Variety Investments owned the stock and that the Magaro estate owned a 75% partnership share and was entitled to 75% of the sale proceeds or $25,920.00. 12.) The stock was delivered by defendant to C-MAC Quartz Crystal which paid Variety Amusements $34,560.00. 13.) Defendant failed to account to plaintiff for the proceeds of the stock redemption and instead permitted the money to be deposited in a bank account owned by Variety Machines, Inc., a company in which the estate had no interest. 14.) A creditor of Variety Machines, Inc. attached the bank account into which the stock redemption proceeds were deposited and as a result the mone forfeited to the creditor. y was 2 I 5.) Defendant was professionally negligent while actin for PNC N.A. in the redemption of the Greenray Industries, Inc. stock g BUIIK9 and as a result the William G. Magaro estate lost its share of the sale proceeds in the amount of $25,920.00. WHEREFORE plaintiff demands judgment in its favor against defendant for $25,920.00 plus interest from September 26, 2009 and costs. PNC BANK, N.A., EXECUTOR V. LOWELL R. GATES, ESQUIRE IN HIS CAPACITY AS AGENT FOR GATES AND ASSOCIATES P.C. AND GATES, HALBRUNER & HATCH, P.C. 16.) Paragraphs 17.) thru 14 are incorporated by reference. Defendant filed a 15 Count Cumberland County complaint for legal fees to No. 03-6247 in which two professional corporations Gates and A P.C. and Gates, Halbruner & Hatch , , P.C, were plaintiffs and PNC Bank Associates, executor of the William G. Magaro estate was one N.A. often defendants. 18.) In the complaint a claim is made for legal services rendered to PNC Bank, N. A. as executor of the William G. Magaro estate in the amount of $8,961.74 which included the legal services provided in the sale of the Industries Inc. stock. Greenray 19.) PNC Bank, N.A. denied liability and counterclaimed alleging the corporations were liable for failure to pay the proceeds of the Gree two Inc. stock sale to Variety investments. m'aY Industries, 20•) After a jury trial both professional corporations were held liable to 3 PNC Bank, N.A., executor of the William G. Magaro estate in the amount of $23,576.53 for failure to pay the proceeds of the sale of the Greenray Industries Inc. stock to Variety Investments. 21.) On March 18, 2008 judgment was entered against Gates and Associates, P.C. in favor of PNC Bank, N.A. , Executor of the William G. Ma estate in the amount of $23, 576.53. garo 22•) The Superior Court (2165MDA2007) affirmed the award in favor of PNC Bank, N.A. on February 26, 2009. 23.) On March 20, 2009 judgment was entered against Gates, Halbruner and Hatch, P.C. in favor of PNC Bank, N.A. , Executor of the estate of Willi Magaro in the amount of $23, 576.53. am G 24.) Defendant was professionally negligent in rendering legal services to Gates and Associates, P.C. and Gates, Halbruner and Hatch, P.C. which faile account to PNC Bank, N.A. for the stock sale proceeds to d to which the William G. Magaro estate was entitled. 25.) At all times material to this litigation defendant remains ersonall liable and accountable for the negligent and wrongful acts co p y rendering professional services on behalf of the corporations committed which caused the loss to PNC Bank, N.A., Executor. WHEREFORE, plaintiff demands judgment in its favor and against defendant in the account of $23,576.53 plus interest from September 26, 2007 a( o P Plus costs. Dated: Jo M. Ea k' -?. Market Square Building Mechanicsburg, PA 17055 (717) 766-3172 ID # 06351 4 VERIFICATION I, Linda Lundberg, hereby verify that the statements of fact made in the foregoing instrument are true and correct to the best of my knowledga information and belief. I understand that any false statements therein are subject to the crriimina Penalties contained in 18 Pa. C.S. 4904, relating to unsworn falsification to criminal authorities. ROG %9)?3V. NINJ F= u. Linda Lundberg,v ,,eF RCS PNC Bank, N.A. 5 1. $ 1 i! I I F 1 1 I 1 M I 1 ? 1 1 1 \ &I ? 1 n 0 o L ? ? N I Sp ? ? w 1 FL a I Ki 1 an m 1 O a cm A n? C H ocon rn ? o 1 i?.? o 1 1 CD < C?`1 Z S D 1 1 • M• ` 1 1 ? 0 I a I A Gates 0000099 FILED C?FFKCE OE THE PP,) ;-NOTARY 2009 OCT 21 Ph 2: 18 G?? spa ? ? a-3 ? 3gS ?, 170 P3 PNC BANK, N.A., : IN THE COURT OF COMMON PLEAS Plaintiff, : OF CUMBERLAND COUNTY, PA LOWELL R. GATES, Defendant, : CIVIL ACTION - LAW : NO. 09-7265 ACCEPTANCE OF SERVICE I accept services of the within Complaint on behalf of defendant and acknowledge receipt of a certified copy thereof. Dated: October 22, 2009 Sarah E.C. McCarroll, Esquire Attorney for defendant FILED-Of FiCE OF THE PROTHfNMARY 2009 NOV -2 FM 3, 3 0? PENNSYLVANIA. Sarah E. McCarroll, Esq. PA ID #91102 Gates, Halbruner, Hatch & Guise, P.C. 1013 Mumma Road, Suite 100 Lemoyne, PA 17043 717.731.9600 717.731.9627 s.mccarroll(a-,gateslawfi.rm.com IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA PNC BANK, N.A., Plaintiff, No. 09-7265 V. LOWELL R. GATES, Defendant, Civil Action - Law & Equity Previously Assigned to Judge Oler DEFENDANT LOWELL R. GATES' PRELIMINARY OBJECTIONS TO COMPLAINT Defendant, Lowell R. Gates, Esq. by his undersigned attorney, Objects to the Complaint and avers as follows: 1. A pleading or cause of action may be dismissed for legal insufficiency pursuant to Pa. R.C.P. 1028(a)(4). 2. A demurrer tests the legal sufficiency of the pleading and, as a result, the review is limited to the content of the pleading. 3. All well-pleaded material, factual averments are presumed to be true for the purpose of testing the legal sufficiency of the pleading. 4. Conclusions of law, unwarranted inferences from the facts, argumentative allegations, or expressions of opinion are not considered true for the purpose of testing the legal sufficiency of the pleading. 5. A complaint may be dismissed based on preliminary objection of lack of capacity to sue under Pa. R.C.P. 1028(a)(5). 1. LEGAL INSUFFICIENCY 6. PNC Bank's complaint should be dismissed because res judicata bars the action. 7. Plaintiff was a defendant and counter-claim plaintiff in a prior action involving the same facts and circumstances under case number 2003-6247. 8. The case was tried and judgment, in part, was entered against Gates & Associates, P.C. and Gates, Halbruner, & Hatch, P.C. 9. Lowell R. Gates, the defendant in the instant case, was not a party to case number 2003-6247, but based on the facts alleged in the current complaint, would have been an indispensible party in the prior action. 10. On March 25, 2009 PNC Bank filed a Petition for Rule to Show Cause in case 2003- 6247, requesting that Lowell R. Gates be declared personally liable for the judgment against Gates & Associates and Gates, Halbruner, & Hatch, P.C.. 11. After a timely response, this Honorable Court issued an order on April 27, 2009 and denied the Petition. A true and correct copy is attached as Exhibit A. 12. PNC Bank, in filing the instant complaint, is attempting to hold Lowell R. Gates personally liable in an action that was already decided on the merits. 2 13. Res judicata and collateral estoppel prevent PNC Bank from again attempting to hold Lowell R. Gates personally liable because this Court already ruled on that issue. Relief Wherefore, the Complaint should be dismissed with prejudice for legal insufficiency II. LEGAL INSUFFICIENCY 14. PNC Bank's complaint is legally insufficient because the applicable statute of limitations has expired. 15. The events and actions alleged in PNC Bank's complaint occurred in 2000 and 2001. 16. Under 42 Pa.C.S.A. § 5524, a two year statute of limitations applies to professional negligence. Relief Wherefore, the complaint should be dismissed with prejudice for legal insufficiency. III. LACK OF CAPACITY TO SUE 17. Plaintiff alleges causes of action against Lowell R. Gates for professional negligence while acting for PNC Bank and in rending legal services to Gates & Associates, P.C. Complaint paragraphs 15 and 24. 18. Plaintiff failed to allege a contract or agreement for Lowell R. Gates to act on behalf of PNC Bank. 3 19. In redeeming the stock certificate, Lowell R. Gates was acting on behalf of the Estate of David Magaro and his client, Marie K. Magaro, Administratrix. 20. PNC Bank failed to allege privity with Gates & Associates, P.C. or allege any relationship that would allow PNC Bank to sue on behalf of Gates & Associates, P.C. 21. PNC Bank is not a shareholder of Gates & Associates P.C. or Gates, Halbruner, & Hatch, P.C. nor is PNC Bank a fiduciary of either entity, either of which would allow PNC Bank to bring a derivative action on behalf of Gates & Associates P.C. or Gates, Halbruner, & Hatch, P.C. 22. Gates & Associates, P.C. is an inactive entity and does not have a successor-in-interest. 23. PNC Bank does not have, nor did it allege a contractual relationship with Gates & Associates P.C. or Gates, Halbruner, & Hatch, P.C. or any other related entity. Relief Wherefore, the complaint should be dismissed with prejudice for legal insufficiency. Conclusion Wherefore, for all the foregoing reasons, Defendant Lowell R. Gates respectfully requests this Honorable Court dismiss the Complaint with prejudice. Respectfully Submitted, November 19, 2009 Sarah E. McCarroll, Esq. PA ID #91102 Gates, Halbruner, Hatch & Guise, P.C. 1013 Mumma Road, Suite 100 Lemoyne, PA 17043 717.731.9600/717.731.9627 4 GATES & ASSOCIATES, : IN THE COURT OF COMMON PLEAS OF P.C. and GATES, CUMBERLAND COUNTY, PENNSYLVANIA HALBRUNNER & HATCH, P.C., Plaintiffs V. : CIVIL ACTION - LAW MARIE K. MAGARO a/k/a/ MARIE K. McANDREW, Administrator c.t.a. of THE ESTATE OF DAVID : W. MAGARO DECEASED; MARIE K. MAGARO a/k/a McANDREW, individually; JAMES P. McANDREW, individually; MARIE K. McANDREW AND JAMES P. McANDREW PARTNERSHIP; ANTONIO W. MAGARO, : individually; VARIETY MACHINES, INC.; VARIETY INVESTMENTS; PNC BANK, N.A., EXECUTOR FOR THE ESTATE OF WILLIAM G. MAGARO; MARIE'S PORTRAIT STUDIO, INC. ; and MAGARO' S SPORTING GOODS, INC., Defendants NO. 03-6247 CIVIL TERM IN RE: PETITION FOR RULE TO SHOW CAUSE BEFORE OLER, J. ORDER OF COURT ANDN OW, this 27`h day of April, 2009, upon consideration of the Petition for Rule To Show Cause filed by PNC Bank, Executor of the Estate of William G. Magaro, and of the Response filed by Lowell R. Gates, Esq., and it appearing to the court that the relief requested by Petitioner would involve an untimely joinder of a nonparty, the petition is denied. BY THE COURT, ? Lowell R. Gates, Esq. Sarah E. McCarroll, Esq. Suite 100 1013 Mumma Road Lemoyne, PA 17043 /Shaun Attorney for Plaintiffs E. O'Toole, Esq. MILLER LIPSITT, LLC 2813 North Second Street Harrisburg, PA 17110 Attorneys for Defendants Antonio W. Magaro, Variety Machines, Inc., and Magaro's Sporting Goods, Inc. Sarah E. McCarroll PA 91102 Gates, Halbruner, Hatch & Guise, P.C. 1013 Mumma Road, Suite 100 Lemoyne, PA 17043 717.731.9600 717.731.9627 s.mccarroll(a,gateslawfirm.com IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA PNC BANK, N.A., Plaintiff, V. LOWELL R. GATES, Defendant, No. 09-7265 Civil Action - Law & Equity VERIFICATION I, Lowell R. Gates, the representative of the respondents hereby verify that the statements made in the foregoing Preliminary Objections are true and correct to the best of my information, knowledge and belief. I understand that false statements herein a made subject to the penalties of 18 Pa.C.S. Section 4904, relating to unsworn falsification ai thorities. Date: November 19, 2009 Lowell R( Gates Sarah E. McCarroll PA 91102 Gates, Halbruner, Hatch & Guise, P.C. 1013 Mumma Road, Suite 100 Lemoyne, PA 17043 717.731.9600 717.731.9627 s.mccarroll(a)gateslawfirm.com IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA PNC BANK, N.A., V. LOWELL R. GATES, No. 09-7265 Civil Action - Law & Equity CERTIFICATE OF SERVICE I, Sarah McCarroll, adult individual, hereby certify that a true and correct copy of the foregoing Preliminary Objections has been served this day upon the following counsel of record by United States first class mail, postage prepaid, addressed as follows: John M. Eakin, Esquire Market Square Building Mechanicsburg, PA 17055 Attorney for PNC Bank Dated: November 20, 2009 Plaintiff, Defendant, Sarah E. McCarroll, Esquire Attorney ID # 91102 1013 Mumma Road, Suite 100 Lemoyne, PA 17043-1144 (717) 731-9600 I (717) 731-9627 s. mccarroll Agateslawfirm.com FILE" - OFD",-E ^F THE, FRI77t ', `?ARY 2009 NOV 20 Pik 3: 07 CUt PITY PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and submitted in triplicate) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: (List the within matter for the next Argument Court.) CAPTION OF CASE (entire caption must be stated in full) PNC BANK N.A. Executor of Estate of Willaim G. Magaro, deceased vs. Lowell R. Gates 09 7265 Term No 1. State matter to be argued (i.e., plaintiffs motion for new trial, defendant's demurrer to complaint, etc.): 2. Identify all counsel who will argue cases: (a) for plaintiffs: John M. Eakin, Market Square Building, Mechanicsburg, PA 17055 (Name and Address) Gates, Halbruner, Hatch and Guise, PC. 1013 Mumma Road, Suite 100, (b) for defendants: Lemoyne, PA 17043 (Name and Address) 3. 1 will notify all parties in writing within two days that this case has been listed for argument. 4. Argument Court Date: January6, 2010 ft4L Signat e John N. Eakin Print your name Plantiff November 2009 Attorney for Date: INSTRUCTIONS: 1. Two copies of all briefs must be filed with the COURT ADMINISTRATOR (not the Prothonotary) before argument. 2. The moving party shall file and serve their brief 12 days prior to argument. 3. The responding party shall file their brief 5 days prior to argument. 4. If argument is continued new briefs must be filed with the COURT ADMINISTRATOR (not the Prothonotary) after the case is relisted. CAI AL OF THIF P OITIOMMARY 2009 NOY 24 P 1: 314 CUPrr? ':_.UN Y PENNSYLVANIA PNC BANK, N.A., EXECUTOR IN THE COURT OF COMMON PLEAS OF OF ESTATE OF WILLIAM G. CUMBERLAND COUNTY, PENNSYLVANIA MAGARO, Plaintiff v. LOWELL R. GATES, Defendant CIVIL ACTION -LAW NO. 09-7265 CIVIL TERM IN RE: DEFENDANT'S PRELIMINARY OBJECTIONS TO PLAINTIFF'S COMPLAINT BEFORE OLER, GUIDO and EBERT, JJ. ORDER OF COURT AND NOW, this 7`" day of January, 2010, upon consideration of Defendant Lowell R. Gates' Preliminary Objections to Complaint, and following oral argument held on January 6, 2010, the preliminary objections are denied and Defendant is afforded a period of 20 days from the date of this order to file an answer to Plaintiff's Complaint. / John M. Eakin, Esq. Market Square Building Mechanicsburg, PA 17055 Attorney for Plaintiff /Sarah E. McCarroll, Esq. 1013 Mumma Road Suite 100 Lemoyne, PA 17043-1144 Attorney for Defendant rr, Cc~ 4 ~t1s rn~. ~ 1~.~~ I !l ~3l !v ~~ 1 J C~ ~J C.7 ,n ~'' s ~ T "t ; _ `- ~ ,. ., -, `~ ~~ -'c - w - _ N _ =~ ~..~ BY THE COURT, 7 Sarah E. McCarroll, Esq. PA ID #91102 Gates, Halbruner, Hatch & Guise, P.C. 1013 Mumma Road, Suite 100 Lemoyne, PA 17043 717.731.9600 717.731.9627 s.mccarrollna ~ateslawfirm com ~~~~~--i ,.,~,,,~- .:. (", 1. ~. C~,~ ~t ' :_ ,,: r.~F ~ r~ ,, .l. ,~.'- IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA PNC BANK, N.A., Plaintiff, v. LOWELL R. GATES, Defendant, No. 09-7265 Civil Action -Law & Equity ANSWER AND NEW MATTER Defendant, Lowell R. Gates, Esq. by his undersigned attorney, hereby files this Answer and New Matters and responds as follows: 1. Admitted upon information and belief. 2. Admitted. 3. Admitted. 4. Admitted. 5. Admitted. 6. Denied. Variety Investments did not do business as Variety Amusements and strict proof is demanded at trial. 7. Denied. Variety Amusements owned and had possession of the Greenray Industries, Inc. stock and strict proof is demanded at trial. 8. Admitted in part and denied in part. It is admitted that in 1990, a company known as C-MAC Quartz Crystals Industries offered to redeem the Greenray Industries, Inc. stock. The remaining allegations are denied and strict proof is demanded at trial. Count 1 9. Responses to paragraphs 1 through 8 are incorporated herein by reference. 10. Admitted in part and denied in part. It is admitted that Lowell R. Gates received the stock certificated from PNC Bank. Although the law firm of Gates & Associates, PC, in fact, submitted the stock certificate for redemption, it is denied that Gates agreed to submit the stock certificate on behalf of the partnership, or any particular person or entity. 11. It is denied that Gates knew Variety Investments partnership owned the stock and strict proof is demanded at trial. The remainder of the allegations are denied and strict proof is demanded at trial. 12. Denied and strict proof is demanded at trial. Gates did not submit the stock certificate and related redemption documents to C-MAC Quartz Crystal. Another attorney with Gates & Associates, P.C. submitted the stock redemption documents. 13. Denied. Gates did not authorize or permit the money to be deposited in a bank account owned by Variety Machines, Inc. The remaining allegations are denied and strict proof is demanded at trial. 14. After reasonable investigation, defendant is without knowledge or information sufficient to form a belief as to the trust of an averment and therefore the allegations are denied. 2 15. Denied. Gates was not professionally negligent and strict proof is demanded at trial. Count 2 16. Responses to paragraphs 1 through 15 are incorporated herein by reference. 17. Denied. The document of record speaks for itself. The facts averred in new matter are incorporated herein by reference. 18. Denied. The document of record speaks for itself. The facts averred in new matter are incorporated herein by reference. 19. Denied. The document of record speaks for itself. 20. It is denied that Gates & Associates, PC and Gates, Halbruner & Hatch, PC were held liable after a jury trial. The Honorable Judge Oler conducted a bench trial to decide the case. 21. Admitted. 22. Admitted. 23. Admitted. 24. Denied and strict proof thereof is demanded at trial. It is denied that Lowell Gates was professionally negligent in rendering legal services and strict proof thereof is demanded at trial. By way of further answer, it is denied that Lowell Gates or Gates & Associates, PC or Gates, Halbruner & Hatch, PC had a legal obligation to account to PNC Bank, NA for the stock sale. 3 25. Denied and strict proof thereof is demanded at trial. It is denied that Lowell Gates committed any negligent and wrongful acts. It is denied that Lowell Gates is personally liable and accountable for negligent and wrongful acts which caused the loss to PNC Bank. NEW MATTER 26. Plaintiff was a defendant and counter-claim plaintiff in a prior action under case number 2003-6247 which case involved the same facts and circumstances. 27. Gates & Associates, PC sued PNC Bank, NA, executor for the William G. Magaro Estate, because of its secondary liability as a general partner in the Variety Investments general partnership, and not because PNC Bank, NA was primarily liable as executor by engaging Gates & Associates, PC directly. 28. PNC Bank, NA did not hire or engage the law firm of Gates & Associates, PC. PNC Bank, NA hired its own separate legal counsel, Mette, Evans & Woodside and Attorney John Eakin. 29. Gates & Associates, PC was only engaged by and only represented the Estate of David Magaro and its Administrator Marie Magaro. 30. Lowell R. Gates, the defendant in the instant case, was not a party to case number 2003-6247. 31. Based on the facts alleged in the current complaint, Lowell R. Gates would have been an indispensible party in prior action 2003-6247. 32. On March 25, 2009, PNC Bank, NA filed a Petition for Rule to Show Cause in case 2003- 6247, requesting that Lowell R. Gates be declared personally liable for the judgment against Gates & Associates, PC and Gates, Halbruner & Hatch, PC. 4 33. After a timely response, this Honorable Court issued an order on Apri127, 2009 denying the Petition. See Exhibit A of Defendant's Preliminary Objections. 34. PNC Bank, NA in filing the instant complaint, is attempting to hold Lowell R. Gates personally liable in an action that was already decided on the merits. 35. Res judicata and collateral estoppel prevent PNC Bank from again attempting to hold Lowell R. Gates personally liable because this Court already ruled on that issue. 36. Defendant asserts the defense of res judicata. 37. Defendant asserts the defense of collateral estoppel. 38. The events alleged in PNC Bank's instant complaint occurred in 2000 and 2001. 39. Under 42 Pa. C.S. § 5524, a two year statute of limitations applies to professional negligence. 40. Defendant asserts the defense that the applicable statue of limitations has expired. 41. Plaintiff did not allege a contract or agreement for Lowell R. Gates to act on behalf of PNC Bank, NA. 42. PNC Bank, NA requested that Marie Magaro, Administratrix of the Estate of David Magaro, redeem the Greenray Industries, Inc. stock certificate. 43. Despite specific instruction by Gates & Associates, PC, C-MAC's transfer agent sent the stock proceeds to "Variety Amusements" at 116 East Allen Street, Mechanicsburg, Pennsylvania, which same address also served as the corporate headquarters for Variety Machines, Inc. 5 44. Lowell Gates had no obligation to account to PNC Bank, NA. 45. PNC Bank, NA did not allege privity with Gates & Associates, PC or Gates, Halbruner & Hatch, PC, or allege any relationship that would allow PNC Bank, NA to sue on behalf of Gates & Associates, PC. 46. PNC Bank, NA is not a shareholder of Gates & Associates PC or Gates, Halbruner & Hatch, PC, neither is PNC Bank a fiduciary of either entity, either of which would allow PNC Bank to bring a derivative action on behalf of Gates & Associates PC or Gates, Halbruner & Hatch, PC. 47 Gates & Associates, PC is an inactive entity and does not have a successor-in-interest. 48. PNC Bank, NA does not have, nor did it allege a contractual relationship with Gates & Associates PC or Gates, Halbruner & Hatch, PC or any other related entity. 49. Defendant asserts the defense of lack of privity. Wherefore, for all the foregoing reasons, Defendant Lowell R. Gates respectfully requests this Honorable Court dismiss the Complaint and all counts with prejudice. Respectfully Submitted, January 22, 2010 Sarah E. McCarron, Esq. PA ID #91102 Gates, Halbruner, Hatch & Guise, PC 1013 Mumma Road, Suite 100 Lemoyne, PA 17043 717.731.9600/717.731.9627 s.mccarroll~a aateslawfirm.com 6 Sarah E. McCarroll PA 91102 Gates, Halbruner, Hatch & Guise, P.C. 1013 Mumma Road, Suite 100 Lemoyne, PA 17043 717.731.9600 717.731.9627 s. mccarrollna,gateslawfirm. com IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA PNC BANK, N.A., Plaintiff, v. LOWELL R. GATES, Defendant, No. 09-7265 Civil Action -Law & Equity VERIFICATION I, Lowell R. Gates, the representative of the respondents ereby verify that the statements made in the foregoing Answer and New Matter are true and c t to the best of my information, knowledge and belief. I understand that false statements he ein a made subject to the penalties of 18 Pa.C.S. Section 4904, relating to unsworn falsificati t authorities. Date: January 11, 2010 ~--Jr ~' Lowell Gates Sarah E. McCarron PA 91102 Gates, Halbruner, Hatch & Guise, P.C. 1013 Mumma Road, Suite 100 Lemoyne, PA 17043 717.731.9600 717.731.9627 s.mccarroll(a~~ateslawfirm com IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA PNC BANK, N.A., v. LOWELL R. GATES, Plaintiff, Defendant, No. 09-7265 Civil Action -Law & Equity CERTIFICATE OF SERVICE I, Sarah McCarron, adult individual, hereby certify that a true and correct copy of the foregoing Answer and New Matter has been served this day upon the following counsel of record by United States first class mail, postage prepaid, addressed as follows: John M. Eakin, Esquire Market Square Building Mechanicsburg, PA 17055 Attorney for PNC Bank Dated: January 22, 2010 'Sarah E. McCarron, Esquire Attorney ID # 91102 1013 Mumma Road, Suite 100 Lemoyne, PA 17043-1144 (717) 731-9600 / (717) 731-9627 s.mccarroll(a~~ateslawfirm com PNC BANK NA, EXECUTOR OF THE : IN THE COURT OF COMMON PLEAS ESTATE OF WILLIAM G. MAGARO : OF CUMBERLAND COUNTY. DECEASED VS LOWELL R. GATES PENNSYLVANIA ~ o G CIVIL ACTION -LAW ~ cr' ~ f -~ ca -'~ ~ -n ~ ~ r„ • NO 09 - 7265 ~}~: ~ i= ~ ~ ~ ~ ~ ~=~ REPLY ~- Plaintiff responds to New Matter in defendant's Answer as follows: 26.) It is denied that plaintiff and defendant were parties in the case filed to 2003-6247 and on the contrary the parties to said action were PNC Bank NA, Executor of the estate of William G. Magaro, defendant and counterclaim plaintiff and Gates & Associates PC and Gates, Halbruner & Hatch PC, plaintiffs and counterclaim defendants. 27.) No responsive pleading is required as this paragraph pertains to defendant's state of mind and the reason for making the allegations neither of which requires an answer. 28.) It is admitted plaintiff retained Mette, Evans and Woodside PC and John M. Eakin as attorneys for the estate of William G. Magaro, deceased. The agreement to redeem the stock was with defendant. 29.) It is denied that Gates & Associates P.C. was only engaged by and only represented the David Magaro estate. On the contrary Gates & Associates P.C. alleged it was engaged by and rendered legal services, for which it sued for legal fees on behalf of the following defendants in the action filed to case 2003-6247; viz Marie K. Magaro a/k/a Marie K. McAndrew, administrator of the estate of David W. Magaro, deceased, Marie K. Magaro a/k/a McAndrew individually, James P. McAndrew individually, Marie K. Magaro and James P. McAndrew partnership, Antonio W. Magaro, individually, Variety Machines, Inc., Variety Investments, Marie's' Portrait Studio Inc. and Magaro's Sporting Goods, Inc. and PNC Bank NA, Executor of the William G. Magaro estate. 30.) Admitted. 31.) The only indispensable parties in case 2003-6247 were those designated as plaintiffs or defendants therein. 32.) Admitted. 33.) It is admitted that the petition was properly dismissed because Lowell R. Gates was not a party to the case filed to 2003-6247. 34.) It is denied that the individual liability of Lowell R. Gates has already been decided and on the contrary the only liability resulting from the counterclaim in case 2003-6247 was against Gates & Associates, PC and Gates, Halbruner & Hatch PC. 35.) To the extent that the allegations of this paragraph consist of an opinion as to the doctrines of res judicata and collateral estoppel no answer is required. It is denied the court has ruled on the personal liability of defendant. 36.) The answer to paragraph 35 is incorporated herein by reference. 37.) The answer to paragraph 35 is incorporated herein by reference. 38.) The events on which plaintiffs claim is based culminated in the opinion of the Superior Court on February 26, 2009 which affirmed that Gates & Associates P.C. and Gates, Halbruner & Hatch, P.C. were each liable to plaintiff for professional negligence in causing the loss of the proceeds of the Greenray Industries, Inc. stock redemption. 2 39.) This is a legal opinion and requires no answer. 40.) This is a legal opinion and requires no answer. 41.) The averments in the complaint speak for themselves and allege an agreement to redeem the stock and remit the proceeds. 42.) It is denied that Marie Magaro was requested to redeem the Greenray Industries stock certificate and on the contrary the certificate was delivered to defendant by the executor for redemption. 43.) This averment begs the question as the allegation; "Despite specific instructions by Gates & Associates, P.C." makes it impossible to answer the allegation without knowledge of these instructions. 44.) Defendant had an obligation to account to plaintiff for the Greenray Industries, Inc. stock which obligation was confirmed by the Superior Court on February 26, 2009. 45.) This paragraph cannot be answered as pleaded as it implies plaintiff must obtain permission from Gates & Associates PC to bring this action against defendant. There is no such requirement. 46.) It is admitted that plaintiff is not a shareholder of either Gates & Associates, P.C., a defunked corporation or Gates, Halbruner & Hatch P.C.. To the extent it is alleged plaintiff cannot bring this action against defendant this is a legal opinion which required no Answer. 47.) Plaintiff is at a loss in replying to this allegation. Gates & Associates, P.C. is a Pennsylvania professional corporation established in 1992. In correspondence dated April 2, 2009, plaintiff was informed by defendant that the corporation became "inactive" in 2001. It is still active according to the Pennsylvania Corporation Bureau. It was a plaintiff in this case 2003-6247 which 3 began December 2, 2003, it participated in a four day trial in September 2007 and was awarded legal fees against four parties, it issued execution against three defendants in December 2007, it entered judgment in favor of PNC Bank on March 13, 2009. In answer to interrogatories dated April 2, 2009 it is alleged the corporation was out of business since 2001. 48.) The contractual relationship between Plaintiff and Gates & Associates, P.C. and Gates, Halbruner & Hatch, P.C. has been litigated in the case 2003-6247 and is incorporated by reference. 49.) This is a legal conclusion and requires no answer. WHEREFORE Plaintiff moves for judgment. Dated: February ~ , 2010 Jo .Eakin Att ey for Plaintiff VERIFICATION I, Linda Lundberg, hereby verify that the statements of fact made in the foregoing instrument are true and correct to the best of my knowledge, information and belief. I understand that any false statements therein are subject to the criminal penalties contained in 18 Pa. C.S. 4904, relating to unsworn falsification to authorities. i~ ~ . ~ /"1 „ Linda Lundberg 4 CERTIFICATE OF SERVICE I hereby certify that I served a copy of the foregoing document upon the person(s) indicated below by depositing a copy of the same in the United States mail, postage prepaid, at Mechanicsburg, Pennsylvania and addressed as follows: Lowell R. Gates, Esquire c/o Sarah E. McCarroll, Esquire Gates, Halbruner, Hatch & Guise 1013 Mumma Road, Suite 100 Lemoyne, PA 17043 Date: Febru ° ~-y ~{ , 2010 By_ ~ ~ Jo .Eakin, Esquire 5 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA PNC BANK, N.A., Plaintiff, No. 09-7265 v. n LOWELL R. GATES, Civil Action -Law & Eq Defendant, =-; rf ~ , .:=.. `.} NOTICE OF APPEAL ; ~- :-~ FROM AWARD OF BOARD OF ARBITRATORS TO THE PROTHONOTARY: N q ~~ b N G' Notice is given that Defendant, Lowell R. Gates appeals from the award of the board of arbitrators entered in this case on May 10, 2010. A jury trial is demanded (Check the line if a jury trial is demanded. Otherwise jury trial is waived.) I hereby certify that (1) the compensation of the arbitrators has been paid, or (Strike out the inapplicable clause.) Lowell Ijl. Gates, Appellant .~J ~~ "T't ~,+ ~.3 [11 =i=. _ i.`1 f-~, .,~ ~35b.00 {gyp ATT-~f Ct~~ 13tao5 e.~ aya~QS PNC Bank, N.A. Executor of the Estate of William G. Margaro In The Court Of Common Pleas Cumberland Plaintiff County, Pennsylvania No. 09-7265 -Civil Term Lowell R. Gates, Defendant Civil Action -Law. Oath We do solemnly swear (or affirm) that we will support, obey and defend the Constitution of the U 'ted States and the Constitution of this Commonwealth and that we will discharge rties of office Michael M. Badowski. Esquire Name Coyne & Coyne, P.C. Law Firm 3901 Market Street Address Law Firm 352 South Sporting Hill Road Address Margolis Edelstein Law Firm 3510 Trindle Road Address Camp Hill, PA 17011 Mechanicsburg, PA 17050 Camp Hill, PA 17011 City, Zip City, Zip City, Zip Award We, the undersigned arbitrators, having been duly appointed and sworn (or affirmed}, make the following award: (Note: If damages for delay are awarded, they shall be separately stated.) ~~ s,~,~- ,~ L dog Qi°PJy~`~~ ~„~~ Date of Hearing: May 10, 2010 Henry F. Co ne Esquire ( hairman) Date of Award: `2. Jai h s 'r~' Esquire Notice of Entry of Award Now, the 1D~L day of , 2010, at,~~_ ~.M., the :above aware wa_s entered upon the docket and notice thereof given mail to the parties or them attorneys. Arbitra s' compensation to be paid upon appeal Prothonotary $ •3~h. ~~) --; °~~ COPYi~ROM RECORD M TesNmon~r wh~r~bct, t h~» un1D sit ny frnd By: ~a a.. asaac~ ae c.~wr, Ps. ~~~ ~~ %~" / Henry F. Coyne, Esquire James M. Bach, Esquire Name (Chairman) Name k,~ .~.~Xr i~lM ..r tS `J.•~J~~ ~'fii. ~~') ~ ..~ ,~~r w~., ,~tGi~~;Yiri Sarah E. McCarron PA 91102 Gates, Halbruner, Hatch & Guise, P.C. 1013 Mumma Road, Suite 100 Lemoyne, PA 17043 717.731.9600 717.731.9627 s.mccarroll(a,gateslawfirm.com IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA PNC BANK, N.A., Plaintiff, No. 09-7265 v. LOWELL R. GATES, Defendant, Civil Action -Law & Equity CERTIFICATE OF SERVICE I, Sarah McCarron, adult individual, hereby certify that a true and correct copy of the foregoing Notice of Appeal has been served this day upon the following counsel of record by United States first class mail, postage prepaid, addressed as follows: John M. Eakin, Esquire Market Square Building Mechanicsburg, PA 17055 Attorney for PNC Bank Dated: May 14, 2010 --~ Sarah E. McCarron, Esquire Attorney ID # 91102 1013 Mumma Road, Suite 100 Lemoyne, PA 17043-1144 (717) 731-9600 / (717) 731-9627 s.mccarroll(a~~ateslawfirm. com -` r '~ Lowell R. Gates, Esq. PA ID #46779 Gates, Halbruner, Hatch & Guise, P.C. 1013 Mumma Road, Suite 100 Lemoyne, PA 17043 Phone 717.731.9600 Fax 717.731.9627 l.r. ates(c~~ateslawfirm.com F~v~~~ r t .~„ny t 1 ~ -~1-' 210 J'~i~~ ~~~ ` `~ i ~ ~ t; '~j~~;Y F~~~. ~.,,~~ nw. ~.. V~ IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA PNC BANK, N.A., Plaintiff, v. LOWELL R. GATES, Defendant, No. 09-7265 Civil Action -Law & Equity RESPONDENT'S REPLY TO RULE TO SHOW CAUSE Respondent, Lowell R. Gates, Esq., by his undersigned attorney, replies to PNC Bank, N.A.'s Petition for Rule to Show Cause and avers as follows: 1. Admitted. 2. Admitted. 3. Admitted. 4. Admitted. 5. Admitted. 6. Denied. NEW MATTER 7. This action was commenced by Complaint filed on October 21, 2009. 8. The facts alleged in the Complaint began July 5, 2000 and ended November 27, 2000. 9. This new complaint alleges a professional malpractice claim, and since Defendant Lowell R. Gates never represented Plaintiff PNC Bank, N.A., i.e., there was no contract between Defendant Lowell R. Gates and Plaintiff PNC Bank, N.A., a two (2) year statute of limitations would apply, if at all, and this action was filed six (6) years and eleven (11) months after the expiration of the statute of limitations. 42 Pa. C.S. Sections 5524 and 5525. 10. The prior case was captioned as "Gates & Associates, P. C. and Gates, Halbruner & Hatch, P. C. v. Marie K. Magaro, a/k/a Marie K. McAndrew, Administrator, c, t. a. of the Estate of David W. Magaro, Deceased, et. al. "and was docket at case number 2003-6247, and fully developed and tried the exact same facts as are being alleged in this subsequent case. 11. Lowell R. Gates was not a party to the prior case at docket number 2003- 6247. 12. In case number 2003-6247, there was exhaustive discovery spanning many years. 13. After six (6) days of testimony and hundreds of documents admitted into evidence during a bench trial before the Honorable Judge Wesley Oler, all of the same facts as alleged in this case were developed and tried, and this Court rendered a verdict over two and one-half (2 ''/z) years ago. 2 14. There are no witnesses to this new case that have not already been deposed or have not already testified to the facts of this case. 15. All documents in Respondent/Defendant's possession have been copied and supplied to Petitioner/Plaintiff. 16. Any discovery requested by Petitioner/Plaintiff in this new case would be duplicative and vexatious. 17. The pleadings in this new case are now closed as all responsive pleadings have been timely filed. 18. Within the next sixty (60) days, Defendant/Respondent intends to prepare and file a Motion for Summary Judgment, including specifically the issues of statute of limitations, res judicata and collateral estoppel. 19. PNC Bank, N.A.'s reliance on Rule of Appellate Procedure 1701(b)(4) is misplaced, as Rule 1701(b)(4) is inapplicable in this case. Wherefore, Respondent/Defendant respectfully requests this Honorable Court deny Petitioner/Plaintiff s Petition for Rule to Show Cause. Respectfully Dated: June 28, 2010 r ~~~~~ Lowe R. Gates, Esquire Atto ey ID # 46779 101 Mumma Road, Suite 100 Le oyne, PA 17043-1144 Ph ne: (717) 731-9600 Fax: (717) 731-9627 l.r.~atesna,~ateslawfirm com 3 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA PNC BANK, N.A., v. LOWELL R. GATES, Plaintiff, Defendant, VERIFICATION No. 09-7265 Civil Action -Law & Equity I, Lowell R. Gates, hereby verify that the statements made in the foregoing Reply to Rule to Show Cause are true and correct to the best of my information, knowled and belief. I understand that false statements herein are made subject to the penaltie of 8 Pa. C.S. Section 4904, relating to unsworn falsification to authorities. Date: June 28, 2010 Lowell R. 1N THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA PNC BANK, N.A., Plaintiff, v. LOWELL R. GATES, Defendant, No. 09-7265 Civil Action -Law & Equity CERTIFICATE OF SERVICE I, Lowell R. Gates, Esq., an adult individual, hereby certify that a true and correct copy of the foregoing Respondent's Reply to Rule to Show Cause has been served this day upon the following counsel of record by United States first class mail, postage prepaid, addressed as follows: John M. Eakin, Esquire Market Square Building Mechanicsburg, PA 17055 Attorney for PNC Bank %/~I~ Dated: June 28, 2010 Lowell .Gates, Esquire Atto ey ID # 46779 101 Mumma Road, Suite 100 Lemoyne, PA 17043-1144 Phone: (717) 731-9600 Fax: (717) 731-9627 1. r. gates na,gates l awfirm. com C~ ~FI1f,~ r RAECIPE FOR LISTING CASE FOR TRIAL 2~ ~ ~ ~~~~ + ~ ~,j e ~ . ~ 5 ust be typewritten and submitted in triplicate) , TO THE PROTHONO ARY OF CUMBERLAND COUNTY ~'~' `;+ ~~~ ~`~~+~~~,~ ~): t, Please list a following case: ^ for JURY trial at the next term of civil court. ® for trial without a jury. CAPTION OF CASE (entire caption must be PNC 3A>u K , IV A-TT D EX~CutoK ofi 1"N ~ ~ sT~~r E a ~ ~ ~ . Nlr~~,q Ro vs. 'ated in full) iAL ~4SSOC=~Tr~~I T L!_ ~'/~ /Ul (Plaintiff) (check one) ® Civil Action -Law ^ Appeal from arbitration (other) The trial list will be called on and Trials commence on (Defendant) Pretrials will be held on (Briefs are due S days before pretrials No. d-1 - ? ~ ~D S , ~= I Term LoV~1 E L~ 1Z . G~~T~S vs. Indicate the attorney Indicate mal counsel for ~~ 1 ~S I-I lei This case is ready for parties if known: ~ ~ rc ~-~ .~- (t- t~ 1 S L-~ Signed: ,,~ Z~- Print Name: al,L,(~ d~'J , ~A,cu ,~ Attorney for: '~,~~,,~~ ~oZSdaPd Q~q ~k ~ SS3 3 will try case for the party who files this praecipe: R~ ~yso53 Lowell R. Gates, Esq. PA ID #46779 Gates, Halbruner, Hatch & Guise, P.C. 1013 Mumma Road, Suite 100 Lemoyne, PA 17043 Phone: 717.731.9600 -t V J l i Fax: 717.731.9627 R l.r. ag tesaggteslawfirm.com u IN THE COURT OF COMMON PLEAS "? ..o OF w CUMBERLAND COUNTY, PENNSYLVANIA c PNC BANK, N.A., Plaintiff, No. 09-7265 V. LOWELL R. GATES, Defendant, Civil Action - Law MOTION TO STRIKE CASE FROM TRIAL LIST Defendant Lowell R. Gates, brings the following Motion to Strike Case from Trial List, and in support thereof, avers as follows: 1. On or about October 21, 2009, Plaintiff PNC Bank, N.A. filed its Complaint in this matter. 2. Defendant filed Preliminary Objectionsto Plaintiffs Complaint alleging, among other things, that the application of the statute of limitations barred Plaintiff s claims against Defendant. 3. After the court denied the preliminary objections, Defendant filed his Answer and New Matter on January 22, 2010. 1 4. Plaintiff PNC Bank, N.A. filed its Reply to New Matter on February 4, 2010. 5. An arbitration was held on May 10, 2010 and Defendant filed a Notice of Appeal on May 18, 2010. 6. On June 3, 2010, PNC Bank, N.A. filed a Petition for Rule to Show Cause why PNC Bank, N.A. should not be allowed to conduct additional discovery. 7. On June 28, 2010, Defendant Lowell R. Gates filed his Reply to Rule to Show Cause and on July 9, 2010 this Honorable Judge Hess sign an Order authorizing additional discovery limited to the issue of whether plaintiff s right to recover is time barred by the statute of limitations. 8. On July 19, 2010, Plaintiff PNC Bank, N.A. served Interrogatories and Request for Production of Documents on Defendant. 9. On the same day, July 19, 2010, Plaintiff PNC Bank, N.A. filed a Praecipe for Listing Case for Trial. 10. Defendant has asserted throughout this case, that exhaustive discovery was already conducted in the prior case at Docket Number 03- 6247, and that no additional discovery would produce any useful or meaningful documents. 11. Nevertheless, Plaintiff wasted this Court's time and wasted Defendant's time and resources by filing a Petition for Rule to Show Cause why PNC Bank, N.A. should not be allowed to conduct additional discovery, and thereby, forcing Defendant to respond to this rule to show case. 12. Furthermore, Defendant has already spent time and effort reviewing Plaintiffs most recent discovery requests. 13. This case would benefit from a Summary Judgment Motion which will allow this 2 Court to deal directly with the issue of the statute of limitations. 14. In his Reply to Rule to Show Cause, Defendant previously stated that he would file a Motion for Summary Judgment, which Defendant believes prompted Plaintiffs counsel to file the Praecipe for Listing Case for Trial. 15. Defendant believes that it would take three to four days to conduct a trial of this case, which would be a waste of this Court's time, in light of the fact that the application of the statute of limitations is the pivotal issue in this case. WHEREFORE, Defendant Lowell R. Gates respectfully requests this Court strike this case from the trial list and permit Defendant adequate time to prepare and file a Motion for Summary Judgment with appropriate response for Plaintiff and an appropriate briefing schedule. Dated: August 20, 2010 Respectfully b itted, GATES, BR ER, HATCH & GUISE, P.C. l Lowe R. Gates, Esquire, PA I No. 46779 1013(Mumma Road, Suite 100 Lemoyne, Pennsylvania 17043 Phone: (717) 731-9600 Fax: (717) 731-9627 Attorneys for Plaintiff 3 Lowell R. Gates, Esq. PA ID #46779 Gates, Halbruner, Hatch & Guise, P.C. 1013 Mumma Road, Suite 100 Lemoyne, PA 17043 Phone: 717.731.9600 Fax: 717.731.9627 l.r. atesngateslawfirm.com PNC BANK, N.A., IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, V. LOWELL R. GATES, Defendant, VERIFICATION No. 09-7265 Civil Action - Law I, Lowell R. Gates, hereby verify that the statements made in the foregoing Motion to Strike Case from Trial List are true and correct to the best of my information, knowledge and belief. I further verify that I have authority to so act on behalf of the Plaintiff. I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. Section 4904, relating to unsworn falsification to authorities. Date: August 20, 2010 4 Lowell R. Gates, Esq. PA ID #46779 Gates, Halbruner, Hatch & Guise, P.C. 1013 Mumma Road, Suite 100 Lemoyne, PA 17043 Phone: 717.731.9600 Fax: 717.731.9627 l.r. ates ,,.aateslawfirm.com PNC BANK, N.A., IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, No. 09-7265 V. LOWELL R. GATES, Defendant, Civil Action - Law CERTIFICATE OF SERVICE ?day of August, 2010, I, Lowell R. Gates, Esquire, of the firm of AND NOW, this , Q Gates, Halbruner, Hatch & Guise, P.C., hereby certify that I this day served a true and correct copy of Defendant's Motion to Strike Case from Trial List upon the party listed below via United States Mail, postage prepaid, addressed as follows: John M. Eakin, Esquire Market Square Building Mechanicsburg, PA 17055 Attorney for PNC Bank, N.A. Respectfully itted, GATES, tj ER, HATCH & GUISE, P.C. Lowe R. Gates, Esquire PA I No. 46779 1013 Mumma Road, Suite 100 Lemoyne, Pennsylvania 17043 Phone: (717) 731-9600 Fax: (717) 731-9627 Attorneys for Plaintiff' 5 PNC BANK, NATIONAL IN THE COURT OF COMMON PLEAS OF ASSOCIATION, EXECUTOR OF CUMBERLAND COUNTY, PENNSYLVANIA THE ESTATE OF WILLIAM G. MAGARO, Plaintiff V. CIVIL ACTION - LAW LOWELL R. GATES, Defendant NO. 09-7265 CIVIL TERM IN RE: PRETRIAL CONFERENCE A pretrial conference was held on Monday, August 23, 2010, before the Honorable Edward E. Guido, Judge. The Plaintiff was represented by John M. Eakin, Esquire. The Defendant appeared pro se. This is a professional negligence action that the parties estimate will take one day to try. We will schedule trial for November 3, 2010, commencing at 9:30 a.m. There are several pretrial matters that need to be resolved prior to that date. Defendant shall file his responses to the outstanding interrogatories by August 27, 2010. We will conduct a discovery conference in chambers on September 8, 2010, at 11:30 a.m., to resolve any objections. All motions in limine, including the issues raised by Plaintiff in its pretrial statement, shall be filed, with supporting authority, by August 27, 2010. Any responses, with supporting authority, shall be filed by September 20, 2010. d' Any motions for summary judgment shall be filed by September 20, 2010. Responses shall be filed by October 11, 2010. The parties, briefs shall be filed in chambers by October 25, 2010. By the Court, Edward E. Guido, J. ./John M. Eakin, Esquire Market Square Building Mechanicsburg, PA 17055 For the Plaintiff i ?'Iwell R. Gates, Esquire Gates, Halbruner, Hatch & Guise, P.C. 1013 Mumma Road, Suite 100 Lemoyne, PA 17043 Defendant, Pro se Court Administrator srs t iEs rrly Lcct PNC BANK, NATIONAL ASSOCIATION, EXECUTOR OF THE ESTATE OF WILLIAM G. YAGARO, Plaintiff V. LOWELL R. GATES, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW . NO. 09-7265 CIVIL TERM ORDER OF COURT AND NOW, this 23rd day of August, 2010, Defendant's Motion to Strike Case from the Trial List is DENIED. By the Court, Edward E. Guido, J. John M. Eakin, Esquire Market: Square Building Mechanicsburg, PA 17055 For the Plaintiff well R. Gates, Esquire Gates, Halbruner, Hatch & Guise, P.C. 101.3 Mumma Road, Suite 100 Lemoyne, PA 17043 Defendant, Pro se Court Administrator trator C0 7 L ;LS t)qv t LSr1 srs Z?:; rR 'Z3 M C A IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA PNC BANK, N.A., Plaintiff, V. LOWELL R. GATES, Defendant, No. 09-7265 t ?z _r7ICE sd J3: v _ P11 Civil Action - Law & Equity DEFENDANT'S MOTION FOR SUMMARY JUDGMENT Defendant, Lowell R. Gates, files this Motion for Summary Judgment and in support thereof avers as follows: 1. After the relevant pleadings are closed, but within such time as not to unreasonably delay the trial, any party may move for Summary Judgment on the pleadings under Pa. R.C.P. § 1035.2. 2. This action was commenced by Plaintiff PNC Bank, N.A. when it filed the Complaint on October 21, 2009. 3. Defendant filed timely Preliminary Objections which were denied and, subsequently, Defendant filed an Answer and New Matter on January 22, 2010. 4. Plaintiff filed a Reply to New Matter on February 4, 2010. 5. The pleadings are now closed as all responsive pleadings have been timely filed. 6. Defendant moves for summary judgment in its favor because Plaintiff brought an action that is barred by the doctrine of res judicata. f 7. Also, Defendant moves for summary judgment in its favor because Plaintiff brought an action that is barred by the expiration of the statute of limitations. 8. PNC Bank, N.A.'s complaint alleges that Defendant should be held personally liable for an alleged professional negligence action by Gates & Associates, PC and Gates, Halbruner & Hatch, PC, both Pennsylvania professional corporations for which Defendant Lowell R. Gates was employed as an attorney. 9. The facts supporting the alleged professional negligence action by Lowell R. Gates occurred during the period May, 2000 to November, 2000, culminating in a letter dated November 27, 2000 written by Lowell R. Gates to Mette, Evans & Woodside, one of several law firms representing the Estate of William Magaro. (Please refer to Exhibits B and C, attached hereto as Bates Stamping "Gates 0000091" and "Gates 0000087-88".) 10. This Court has already issued an order denying Plaintiff's effort to include Defendant as a party to this litigation. (A true and correct copy of this Court's April 27, 2009 Order of Court is attached hereto as Exhibit `A'.) Judge Oler denied Plaintiff's Petition for Rule to Show Cause which attempted to join Lowell R. Gates to the prior case under docket number No. 03-6247. This Court held "that the relief requested by Plaintiff would involve an untimely joinder of a nonparty ...." A court will take judicial notice of its own records. Hawkey v. Workman's Compensation Appeal Board, 56 Pa. Cmwlth., 425 A.2d 40 (1981). 11. By its filing this new October 21, 2009 complaint against Defendant Lowell R. Gates, Plaintiff tries to avoid this Court's April 27, 2009 Order denying the addition of Defendant Lowell R. Gates as a nonparty. Plaintiff is attempting to re-litigate 2 the same cause of action ensuing from Docket No. 03-6247 by asserting a personal negligence liability claim against Defendant Lowell R. Gates for the actions of Gates & Associates, P.C. and Gates, Halbruner & Hatch, P.C. 12. Plaintiff did not seek to add Lowell R. Gates, in a timely fashion, as an additional defendant for the same cause of action during the earlier litigation involving Gates & Associates, P.C. and Gates, Halbruner & Hatch, P.C. During the earlier litigation, Plaintiff had ample opportunity to seek discovery against Gates & Associates, P.C. and Gates, Halbruner & Hatch, P.C. 13. "Res judicata applies not only to claims actually litigated, but also to claims which could have been litigated during the first proceeding if they were a part of the same cause of action." Osiris Enterprises and Antonio F. Moscatiello v. Borough of Whitehall, 236 Fed. Appx. 760 C.A.3 Pa. 2007. 14. Plaintiff may not bring a professional negligence liability claim against Defendant merely because Defendant was closely associated with, and in fact was an employee of, Gates & Associates, P.C. 15. "Res judicata applies equally when there is complete identity of parties, in privity with prior parties, or when the parties have an otherwise close or particular relationship." Greenberg v. Potomac Health Systems Inc., 869 F. Supp. 328, 330 (E.D. Pa. 1994). 16. Plaintiff may not tailor the details of previous litigation to support a professional negligence liability claim against Defendant for the same cause of action arising from No. 03-6247. This is the essence of res judicata. "Res Judicata is found when in both the old and new proceedings, the subject matter and the ultimate issues are 3 the same." Knox v. Pennsylvania Bd. Of Probation and Parole, 138 Cmwlth, 344, 588, A.2d. 79 (Pa. Cmwlth, 1991). 17. Moreover, Plaintiff may not modify the details of previous litigation in an attempt to sell the instant action as one with original properties when in fact both actions are fundamentally and identically the same. The Pennsylvania Supreme Court has ruled that a Plaintiff must bring all his claims for damages that arise from the same cause at the same time. Spinelli v. Maxwell, 430 Pa. 478, 480 (1968). 18. Plaintiff's action is simultaneously barred by the applicable statute of limitations. 19. 42 Pa. C.S. §5524(7) confers a two-year statute of limitation on "[ajny other action or proceeding to recover damages for injury to person or property which is founded on negligent, intentional, or otherwise tortious conduct ...." (42 Pa. C.S. §5524(7)). 20. Plaintiff filed a Petition for Rule to Show Cause on March 25, 2009 in the case at docket number 03-6247, requesting that Defendant be added as an additional defendant and recognized as personally liable for judgments against Gates & Associates, P.C. and Gates, Halbruner & Hatch, P.C. In so doing, Plaintiff attempted to add Lowell R. Gates as a defendant six (6) years and four (4) months after the expiration of the appropriate statute of limitations. 21. Defendant Lowell R. Gates was not hired by Plaintiff PNC Bank, N.A., and therefore, Lowell Gates and PNC Bank, N.A. did not have an attorney-client relationship and no contractual relationship existed between the two parties. 4 22. In sum, Plaintiff claims that Defendant acted negligently by offering deficient advice that ultimately led to the loss of the Greenray Industries, Inc. stock proceeds. This is the crux of Plaintiffs argument, and accordingly, the incident for which Plaintiff now seeks recovery. 23. During the course of May, 2000 to September, 2000, attorneys and employees of Gates & Associates, P.C. acted to notify and provide the necessary information to the transfer agent in Canada, to surrender the Greenray Industries, Inc. common stock. By October, 2000, both Plaintiff PNC Bank, N.A. and Plaintiff's attorneys knew or should have known that PNC Bank's ownership of the stock proceeds was being challenged. Ultimately, both Plaintiff PNC Bank, N.A. and Plaintiff's attorneys had knowledge of the actual, written communicated to them by Defendant no later than November 27, 2000, which letter would have put them on notice that PNC Bank's ownership of the stock proceeds was being challenged. 24. Antonio W. Magaro, owner and President of Variety Machines, Inc., received notification from Defendant wherein Defendant instructed Antonio Magaro that the stock proceeds not be used in anyway because of a dispute over the ownership that would likely be asserted by PNC Bank, N.A., executor of the Estate of William Magaro, and that the stock proceeds should be held in escrow. This letter was dated October 27, 2000. (A true and correct copy of the October 27, 2000 letter to Antonio W. Magaro is attached hereto as Exhibit `C'). 25. A letter detailing the location of the stock proceed money and Defendant's position as to rightful ownership of proceed money was sent to Mette, Evans & 5 Woodside, attorneys for the Plaintiff, on November 27, 2000 (A true and correct copy of this letter is attached hereto as Exhibit `C') 26. The plain meaning of the language from 42 Pa. C.S. §5524 states Plaintiff's responsibility to file an action pertaining to the events surrounding the Greenray Industries, Inc. stock proceeds within two years of the incident in question. 27. Plaintiff had knowledge of all facts asserted in the instant action as of, or about October 2000, and ultimately, by November 27, 2000. Plaintiff had the right, if at all, to assert this claim against Defendant within two years from on or about November 27, 2000. 28. "The purpose of these limitations periods is to expedite litigation and thus discourage delay and the presentation of stale claims. In light of the important purpose served by limitations periods, this Court has held that statutes of limitation are to be strictly construed." Gustine Uniontown Assocs., Ltd. v. Anthony Crane Rental, Inc. L.P., 577 Pa. 14, 842 A.2d 334, 345 (2004). 29. To the extent Plaintiff relies on the final resolution of the case docketed at 2003-6247; since Defendant Lowell Gates was not a party to that action, he is not liable as a result of the judgment. Any attempt to bind Defendant as an individual, additional party to this action flies in the face of the doctrine that is res judicata. 30. To the extent Plaintiff relies on the existence of the case docketed at 2003- 6247; an underlying case does not toll the statute of limitations, nor does an appeal of an underlying case. Wachovia Bank v. Ferretti, 935 A.2d 565, 2007 Pa. 320 (2007). Plaintiff may not be permitted to disregard the rights of Defendant that are inherent in a statute of limitations. "The elapse of more than eight years since the events in question 6 during which time `memories fade, witnesses disappear or die and evidence is lost." Robbins & Seventko Orthopedic Surgeons, Inc. v. Geisenberger, 449 Pa. Super at 369, 674 A.2d at 248 (1996). Wherefore, Defendant respectfully requests this Honorable Court grant Defendant's Motion for Summary Judgment and dismiss Plaintiff's Complaint with prejudice. Dated: September 20, 2010 LR. Gates, Esq. Halbruner , Hatch & Guise, PC 1umma Road, Suite 100 L ne, PA 17043-1144 Phone: (717) 731-9600 Facsimile: (717) 731-9627 I.r.gates ggateslawfirm.com 7 EXhiblt A IN RE: PETITION FOR RULE TO SHOW CAUSE BEFORE OLER, J. ORDER OF COURT ANDN OW, this 27`h day of April, 2009, upon consideration of the Petition for Rule To Show Cause filed by PNC Bank, Executor of the Estate of William G. Magaro, and of the Response filed by Lowell R. Gates, Esq., and it appearing to the court that the relief requested by Petitioner would involve an untimely joinder of a nonparty, the petition is denied. BY THE COURT, ? Lowell R. Gates, Esq. Sarah E. McCarroll, Esq. Suite 100 1013 Mumma Road Lemoyne, PA 17043 Attorney for Plaintiffs /Shaun E. O'Toole, Esq. MILLER LIPSITT, LLC 2813 North Second Street Harrisburg, PA 17110 Attorneys for Defendants Antonio W. Magaro, Variety Machines, Inc., and Magaro's Sporting Goods, Inc. Exhibit B LAW OFFICES OF SATES & ASSOCIATES, P.C. 1013 MUMMA ROAD • SUITE 100 ? LEMOYNE, PENNSYLVANIA 17043 (717) 731-9600 ? FAX: (717) 731-9627 LOWELL R. GATES Also Admitted to Massachusetts Bar MARK E. HALBRUNER Also Admitted to New Jersey Bar SUSAN KAY CANDIELLO CRAIG A. HATCH SCOTT W. POHLMAN Also Admitled to New York Bar CORY J. SNOOK Antonio W. Magaro Variety Machines, Inc. 116 East Allen Street Mechanicsburg, PA 17055 BRANCH OFFICE 3 WEST MONUMENT SQUARE. SUITE 304 LEWISTOWN, PA 17044 (717) 248.6909 October 27, 2000 WEB SITE: www.GateslawFum.cam Re: - Greenray Industries, Inc.; Common Stock Liquidation rear .bony: Based on our telephone conversation of today, it is my understanding that you have now received a check from Georgeson Shareholder Communications Canada representing the liquidation proceeds of the Greenray Industries, Inc. common stock. It is also my understanding that you will be depositing the check into an escrow account on behalf of Variety Machines, Inc., t.d.b.a. Variety Amusements. As you may know, the Estate of William Magaro may protest the fact that the Greenray Industries, Inc. liquidation proceeds belong to Variety Machines, Inc. It may take some time to resolve this issue. in the meantime, I request that the fi=nds not be used in any way, but that they be kept in the escrow account, preferably in an interest bearing account, until this matter is resolved. At your earliest convenience, please send to me a copy of the check you received from Georgeson Shareholder Communications Canada. Also, please send me a copy of the bank statement for the escrow account showing the deposited amount. In the near future, I will be contacting the attorneys for the Estate of William Magaro regarding the Greenray Industries, Inc, common questions please do not hesitate to give me a call. matter. In the meantime, if you have any R. LRG:vmr cc: Marie K. McAndrew, Administratrix, ja. Gates 0000091 . , Exhibit C LAW OFFICES OF GA'Z'ES &ASSOCIATES, P.C. 1013 MUMMA ROAD - SUITE 100 • LEMOYNE, PENNSYLVANIA 17043 (717) 731-9600 • FAX: (717) 731-9627 LOWELL R. GATES Also Admitted to Massachusetts Bar MARK E.HALBRUNER Also Admitted to New Jersey Bar SUSAN KAY CANDIELLO CRAIG A. HATCH CORY J. SNOOK November 27, 2000 Elyse E. Rogers. Esq. Mette. Evans & Woodside 3401 North Front Street P.O. Box 5950 Harrisburg, PA 17110-0950 RE: Variety Investments Greenray Industries Stock Dear Ms. Rogers: BRANCH OFFICE: 3 WEST MONUMENT SOUARE.:UIT;: LEWISTOWN, PA 1704; (717) 2486909 WEB SITE: www.GatesLaWFtm.com I have been doing some research into the background of Variety Investments and Variety Amusements. As you know, Variety Investments was a general partnership owned seventy-five (75%) percent by William G. Magaro and twenty-five (25%) percent by David W. Magaro. Variety Amusements is the fictitious name registered to Variety Machines, Inc. The Greenray Industries stock was registered in the name of Variety Amusements, and the address registered with the stock is 116 East Allen Street, Mechanicsburg, PA 17055. Variety Investments was registered with the PA Department of State as a fictitious name with an address of 354 Stumpstown Road, Mechanicsburg, PA 17055. In addition, the EIN registered with the stock is the EIN of Variety Machines, Inc. Therefore, it is our position that any proceeds from the Greenray Industries stock belong solely to Variety Amusements, the fictitious name under which Variety Machines, Inc. operates. As you know, David W. Magaro became the sole shareholder of Variety Machines, Inc. before his death. Upon the death of David W. Magaro and after execution of a Sales Agreement, Antonio W. Magaro is now the sole shareholder of Variety Machines, Inc. As further evidence that Variety Machines, Inc. had a habit of owning stock in various companies, there are minutes of special meetings of the Directors in the corporate minute book of Variety Machines, Inc. where it was resolved that the corporation would sell various stocks registered in the name of Variety Amusements. Admittedly, Greenray Industries is not specifically mentioned in any of these minutes, but we had been informed by Mr. Robert Walkenstein, the corporations accountant, that Variety Machines, Inc. never owned any stock. These minutes clearly refute that contention. Gates 0000087 Elyse E. Rogers, Esq. Variety Investments/Greenray Industries Stock November 27, 2000 Page -2- Additionally, it is our position that your client, P.N.C. Bank, N.A., may owe our client, the estate of David W. Magaro, interest on money that should have been received as a result of David W. Magaro's signing of the Irrevocable Stock or Bond Power for the Greenray Industries stock in March, 1991. Mr. Magaro gave that signed certificate to James Best at P.N.C. Bank, N.A., but the certificate was never redeemed and basically sat at P.N.C. Bank, N.A. for quite a few years. This money could have earned a substantial amount of interest in that time if the money had been disbursed to Mr. Magaro in a timely fashion. Please contact me as soon as possible if you dispute the fact that Variety Machines, Inc. is entitled to the proceeds from the Greenray Industries stock. We would like to resolve this matter in an expeditious manner. If we do not hear from you within ten (10) days from the date of this letter, we will assume that you agree that Variety Machines, Inc. is entitled to the proceeds and we will release the money to Variety Machines, Inc. Thank you for your time and Gates c1LRG/cjs cc: Antonio W. Magaro Marie K. McAndrew, Administratrix, c.t.a. Gates 0000088 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA PNC BANK, N.A., V. LOWELL R. GATES, No. 09-7265 Civil Action - Law CERTIFICATE OF SERVICE I, Lowell R. Gates, Esq., an adult individual, hereby certify that a true and correct copy of the foregoing Defendant's Motion for Summary Judgment has been served this day upon the following counsel of record and to the Chambers of Judge Guido by United States first class mail, postage prepaid, addressed as follows: John M. Eakin, Esquire Market Square Building Mechanicsburg, PA 17055 Attorney for PNC Bank Dated: September 20, 2010 Plaintiff, Defendant, Lowell V. Gates, Esquire Attorn ID # 46779 1013 umma Road, Suite 100 Lemo e. PA 17043-1144 Phone: (717) 731-9600 Fax: (717) 731-9627 1.r.gates&ateslawfirm.com PNC BANK, NATIONAL ASSOCIATION, : IN THE COURT OF COMMON PLEAS OF EXECUTOR OF CUMBERLAND COUNTY, PENNSYLVANIA THE ESTATE OF WILLIAM MAGARO CIVIL ACTION -LAW G ? ? . Plaintiff, NO. 09-7265 _ -? cn r ca c7 LOWELL R. GATES, 4C:), Defendant :X C ANSWER OF PNC BANK N.A., EXECUTOR OF ESTATE OF WILLIAM G. MAGARO TO DEFENDANT MOTION FOR SUMMARY JUDGMENT PNC Bank N.A., plaintiff answers defendants' motion for summary judgment as follows: 1. Admitted 2. Admitted 3. Admitted 4. Admitted 5. It is admitted the Complaint, Answer and Reply have been timely filed. 6. This allegation is a legal opinion which requires no answer. 7. This allegation is a legal opinion which requires no answer. 8. The Complaint speaks for itself. 9. The professional negligence of defendant has been judicially determined in No. 03-6247. 10. The allegations in this paragraph all pertain to the existence of a 1 genuine issue of a material fact which must be resolved before summary judgment is appropriate. 11. The allegations in this paragraph all pertain to the existence of a genuine issue of a material fact which must be resolved before summary judgment is appropriate. 12. The allegations in this paragraph all pertain to the existence of a genuine issue of a material fact which must be resolved before summary judgment is appropriate. 13. This allegation is a legal opinion which requires no answer. 14. The allegations in this paragraph all pertain to the existence of a genuine issue of a material fact which must be resolved before summary judgment is appropriate. 15. This allegation is a legal opinion which requires no answer. 16. This allegation is a legal opinion which requires no answer. 17. The allegations in this paragraph all pertain to the existence of a genuine issue of a material fact which musf be resolved before summary judgment is appropriate. 18. This allegation is a legal opinion which requires no answer. 19. This allegation is a legal opinion which requires no answer. 20. The allegations in this paragraph all pertain to the existence of a genuine issue of a material fact which must be resolved before summary judgment is appropriate. 2 21. The allegations in this paragraph all pertain to the existence of a genuine issue of a material fact which must be resolved before summary judgment is appropriate. 22. This allegation is a legal opinion which requires no answer. 23. The allegations in this paragraph all pertain to the existence of a genuine issue of a material fact which must be resolved before summary judgment is appropriate. 24. The allegations in this paragraph all pertain to the existence of a genuine issue of a material fact which must be resolved before summary judgment is appropriate. 25. The allegations in this paragraph all pertain to the existence of a genuine issue of a material fact which must be resolved before summary judgment is appropriate. 26. This allegation is a legal opinion which requires no answer. 27. This allegation is a legal opinion which requires no answer. 28. This allegation is a legal opinion which requires no answer. 29. This allegation is a legal opinion which requires no answer. 30. This allegation is a legal opinion which requires no answer. WHEREFORE, plaintiff moves for dismissal of defendant's motion for summary judgment. This motion is a litany of legal opinions, irrelevant arguments 3 and miscellaneous factors which leave unresolved factual matters all of which preclude the grant of summary judgment. Date September 30,2010 L? Johr?'/M. Eakin Market Square Building Mechanicsburg, PA 17055 (717) 766-3172 ID # 06351 VERIFICATION I, John M. Eakin, hereby verify that the statements of fact made in the foregoing instrument are true and correct to the best of my knowledge, information and belief. I understand that any false statements therein are subject to the criminal penalties contained in 18 Pa. C.S. 4904, relating to unsworn falsification to authorities. John M. Eakin Market Square Building Mechanicsburg, PA 17055 (717) 766-3172 ID #06351 CERTIFICATE OF SERVICE I hereby certify that I served a copy of the foregoing document upon the person(s) indicated below by depositing a copy of the same in the United States mail, postage prepaid, at Mechanicsburg, Pennsylvania and addressed as follows: Lowell R. Gates, Esquire 1013 Mumma Road, Suite 100 Lemoyne, PA 17043 Date: September 30, 2010 By: Jo . Eakin, Esquire 4 ?" + ? 1 c IN THE COURT OF COMMON PLEA- OF CUMBERLAND COUNTY, PENNSYLVANI, 7 , t 4J ,•`; ?1 ?lR ,1 1 1 ?'111 s* PNC BANK, N.A., V. Plaintiff, LOWELL R. GATES, Defendant, No. 09-7265 Civil Action - Law & Equity DEFENDANT'S RESPONSE IN OPPOSITION TO PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT Defendant, Lowell R. Gates, files this Response in Opposition to Plaintiff s Motion for Summary Judgment pursuant to Pa. R.C.P. §1035.3 and asks this Honorable Court to deny PNC Bank, N.A.'s Motion for Summary Judgment, and in support thereof avers as follows: Admitted. 2. (a.) Denied in part. Gates & Associates, P.C. is a Pennsylvania Professional Corporation and was formed in January 1992 and was actively engaged in the practice of law from approximately February 1992 through December 31, 2001, at which point it became an inactive corporation with the exception of collecting a few accounts receivable. Please see attached two (2) letter from Attorney Sarah McCarroll dated March 17, 2009 and April 2, 2009, respectively, attached as Exhibit 1. Copies of Gates & Associates, P.C.'s 2003 IRS Form I I20S indicating a final return, and a letter from the PA Department of Revenue dated August 2, 2005 attached as Exhibit 2. The only assets owned by Gates & Associates, P.C. were accounts receivable owed by several clients, including Antonio W. Magaro and the Estate of David W. Magaro. (b.) Denied in part. Lowell R. Gates has not been an employee of Gates & Associates, P.C. since January 2002 at which time Gates & Associates, P.C. became inactive. (c.) Denied. PNC Bank, N.A.'s Counter-Claim under the case docketed at 03- 6247 speaks for itself. Upon a thorough review of PNC Bank, N.A.'s Counter-Claim under the case docketed at 03-6247, it is unclear what theory of recovery PNC Bank, N.A. was claiming against the counter-claim defendants Gates & Associates, P.C. and Gates, Halbruner & Hatch, P.C. Lowell R. Gates was not a Plaintiff or Counter-Claim Defendant the case docketed at 03-6247. (d.) Admitted. (e.) Denied. Gates & Associates, P.C. was not found liable for the reasons stated. In paragraphs 23-27 of the "Findings of Fact" contained within Judge Oler's Adjudication at case 03-6247, prior Plaintiffs Gates & Associates, P.C. and Gates, Halbruner & Hatch, P.C. successfully converted the Greenray Industries, Inc. common stock, but the Canadian transfer agent sent the proceeds to check directly to Antonio W. Magaro on behalf of Variety Machines, Inc. The vast majority of this legal work was performed by Attorney Scott Pohlman, an associate attorney at Gates & Associates, P.C. and, subsequently, Gates, Halbruner & Hatch, P.C. Because Antonio Magaro refused to turn over the stock proceeds, Lowell R. Gates instructed Antonio Magaro to place the proceeds in escrow. Specifically, in paragraph 26 of the "Findings of Fact" contained within Judge Oler's Adjudication, Judge Oler appears to have held Gates & Associates, 2 P.C. liable to PNC Bank, N.A. because of Lowell R. Gates's acquiescence in the position of Antonio Magaro that the escrowed proceeds were the property of Variety Machines, Inc. Based on the sole and self-serving testimony of Antonio Magaro, Judge Oler held Gates & Associates, P.C. liable to PNC Bank, N.A. due to the law firm's mere "acquiescence," and despite the clear written documentation sent to Antonio Magaro by Gates & Associates, P.C. to the contrary. In the transcript, it is clear that Antonio Magaro is equivocating about the apparent telephone call to Gates & Associates, P.C., and is uncertain who at the law firm he spoke to or when he made the call or other details of the call. (£) Denied. The response contained above in paragraph (e.) is incorporated herein in its entirety. By way of further response, (g.) Denied. The Superior Court's decision speaks for itself. (h.) Denied. The Superior Court's decision speaks for itself. (i.) Denied. This averment is a conclusion of law and does not require a response. By way of further response, Counter-Claim Plaintiff PNC Bank, N.A. knew all of these facts in 2003 when it filed its counter-claim against Gates & Associates, P.C. and Gates, Halbruner & Hatch, P.C. and could have added Lowell R. Gates as an additional defendant to its counter-claim. However, PNC Bank, N.A. chose not to add Lowell Gates and should not now be allowed to do so. 0.) Denied. This averment is a conclusion of law and does not require a response. By way of further response, the doctrines of collateral estoppel and res judicata do not apply in the manner Plaintiff asserts. All material facts pertaining to liability have not been decided in case No. 03-6247 as Plaintiff raises new liability claims 3 under No. 09-7265. Namely, that Defendant offered advice of a negligent sort that resulted in the loss of stock proceeds money. This claim is inconsistent with the facts. (k.) Denied. This averment is a conclusion of law and does not require a response. By way of further response, the provision of 15 Pa. C.S.A. §2925(b) necessary to establish the liability of Lowell R. Gates, Esq. for the negligence of Gates & Associates, P.C. has not been satisfied. (l.) Denied. This averment is a conclusion of law and does not require a response. By way of further response, Plaintiff is not entitled to judgment as a matter of law as Plaintiff s claim depicts an action that is barred by the doctrine of res judicata and Plaintiff's action is simultaneously barred by the expiration of the statute of limitations. 42 Pa. C.S.A. §5524(7) confers a two-year statute of limitation on "[a]ny other action or proceeding to recover damages for injury to person or property which is founded on negligent, intentional, or otherwise tortious conduct ...." (42 Pa. C.S.A. §5524(7)). Plaintiff makes this claim six (6) years and four (4) months after the expiration of the statute of limitations. As a matter of law, Plaintiff is barred from recovery of any sort. NEW MATTER 3. PNC Bank, N.A.'s Motion for Summary Judgment is not verified as required by Pa. R.C.P. §1024. 4. Under Pa. R.C.P. §2252, PNC Bank, N.A. could have joined Lowell R. Gates as an additional counter-claim defendant as of right or with permission in the prior case docketed at number 03-6247. However, the time limits specified in Rule 2252 have now long sense passed for PNC Bank to join Lowell R. Gates as an additional defendant. 4 PNC Bank's new claim is an attempt to side-step the statute of limitations and the restrictions on joining an additional defendant. Wherefore, Defendant respectfully requests this Honorable Court deny Plaintiff s Motion for Summary Judgment. Dated: October 11, 2010 Respectfully Lowell R. Gates, Esq. PA I No. 46779 Gate , Halbruner, Hatch & Guise, PC 1013 Mumma Road, Suite 100 Lemoyne, PA 17043-1144 Phone: (717) 731-9600 Facsimile: (717) 731-9627 l.r. ateskizateslawfirm.com 5 1 ? ftib? BUREAU OF COMPLIANCE BUSINESS CLEARANCE P.O. BOX 280947 HARRISBURG, PA 17128-0947 Commonwealth of Pennsylvania Department of Revenue August 02, 2005 GATES & ASSOCIATES P C 1013 MUMMA RD LEMOYNE PA 17 0 4 3 Dear Sir or Madam: RE Box Number: 3498-595 EIN: 251673750 The Bureau of Compliance, Business Clearance Section, has processed the Out of Existence/Withdrawal Affidavit for the above referenced company. This company has been marked out of existence on the records of the Pennsylvania Department of Revenue with an effective date of 12/31/2003 and has been relieved of the responsibility of filing corporate tax reports. If you have any further questions, please call. Sincerely, T H .l. t.. 13a e2 is O/E Mergers Section Clearance & Collection Division (717) 787-4883 LAW OFFICES OF GVTES, HALBRUNER ..HATCH, P.C. 1013 MUMMA ROAD • SUITE 100 • LEMOYNE, PENNSYLVANIA 17043 (717) 731-9600 • FAX: (717) 731-9627 -LL R. GATES, LL M. CORRESPONDENCE ADDRESS: BRANCH OFFICE: M. in Taxation. Lemoyne Office 3 WEST MONUMENT SQUARE, SURE 304 Admitted to Massachusetts Bar 17044 C E. HALBRUNER WEB SITE: LE (717) 2N48; PA 8808 G A. HATCH, CELA www.GatesLawFirm.com ? 2 'dried as an Elder Law Attorney by National Elder Law Foundation rON R. GUISE 3 Admitted to practice before the Patent 3 Trademark Office W E.-McCARROLL March 17, 2009 John M. Eakin Market Square Building Mechanicsburg, PA 17055 RE: Gates & Associates, P.C. v. PNC Bank Dear Mr. Eakin, STACEY L NACE ParelegeUOllks Manager TRACI L SEPKOVIC Paralegal VALERIE LONG Paralegal TRACI L SHERIDAN Paralegal Thank you for your letter of March 13, 2009. As you know, judgment was entered against Gates & Associates, P.C., a now defunct corporation. Gates & Associates, P.C. has no funds and is not able to pay the judgment. However, we would consider assigning our claims against Tony Magaro and related entitles to PNC Bank. Thank you. Sincerely, Gates, Halbruner, Hatch & Guise, P.C. Sarah E. McCarroll LAW OFFICES OF GATES, HALBRUNER &. HATCH, PX* 1013 MUMMA ROAD • SUITE 100 • LEMOYNE, PENNSYLVANIA 17043 /ELL R. GATES, LL M. - M. In Taxation so Admitted to Massachusetts Bar IK E HALBRUNER JG A. HATCH, CELA milled as an Eider Law Attorney by a National Elder Law Foundation TON R. GUISE so Admitted to Practice before the S. Patent. Trademark Office AH E. McCARROLL (717) 731-9600 • FAX: (717) 731-9627 CORRESPONDENCE ADDRESS: Lemoyne Office WEB SITE: www:GatesLawFirm.com April 2, 2009 John M. Eakin Attorney at Law Market Square Building Mechanicsburg, PA 17055 RE: Gates v. Magaro Dear Mr. Eakin, r r.- r; BRANCH OFFICE: 3 WEST MONUMENT SQUARE, SUITE 304 LEW(SSTOWN PA 17 ? ? 6909 STACEY L ParalegallUbcs Manager TRACI L SEPKOVIC Paralegal VALERIE LONG Paralegal TRACI L SHERIDAN Paralegal Enclosed please find the Responses to the Interrogatories served upon Gates & Associates, P.C. and Gates, Halbruner & Hatch, P.C. Gates & Associates was established as a professional corporation in 4 992. Gates & Associates became inactive in 2001 and does not have any assets or liability outside of the instant litigation. Gates, Halbruner & Hatch, P.C. was established in 2001 and became inactive in 2006. The successor to Gates, Halbruner & Hatch, P.C. is GHH Group, P.C. which does not have any assets or liability outside of the instant litigation. You will find this information verified by the Pennsylvania Department of State. I am sure that you are also aware that Lowell Gates is married and collecting from him personally will prove challenging. In an effort to avoid further costs and wasted time, Mr. Gates is willing to offer PNC Bank the sum of $5,000.00 as settlement in full of the outstanding judgments. Please let me know if your client is willing to accept our offer. Thank you. Sincerely, Sarah E. McCarroll Encl. LAW OFFICES OF GATES, HALBRUNER, HATCH & GUISE, P.C. 1013 MUMMA ROAD • SUITE 100 • LEMOYNE, PENNSYLVANIA 17043 (717) 731-9600 • FAX: (717) 731-9627 LOWELL R. GATES, LL. M. CORRESPONDENCE ADDRESS: LL M. in Taxation Lemoyne Office Also Admitted to Massachusetts Bar WEB SITE: MARK E. HALBRUNER www.GatesLawFirm.com CRAIG A. HATCH, CELA Certified as an Elder Law Attorney by the National Elder Law Foundation CLIFTON R. GUISE 21 2006 Februar Also Admitted to practice before the , y U.S. Patent & Trademark Office JAIME D. BLACK Of Counsel VIA CERTIFIED U.S. MAIL RETURN RECEIPT REQUESTED Commonwealth of Pennsylvania Department of Revenue Bureau of Compliance Out of Existence/Merger Section P.O. Box 280947 Harrisburg, PA 17128-0947 1?E: Out of Existence Affidavit Gates & Associates, P.C. Dear Sir or Madam: BRANCH OFFICE: 3 WEST MONUMENT SQUARE, SUITE 304 LEWISTOWN, PA 17044 (717) 248-6909 STACEY L. NACE Paralegal/Office Manager TRACI L. SEPKOVIC Paralegal VALERIE LONG Paralegal TRACI L. SHERIDAN Paralegal Please find enclosed the out of existence affidavit along with the distribution of assets fonn for the above referenced Corporation. If you have any questions please feel free to contact me. Sincerely, Clifton R. Guise, Esq. CRG REV-238 CM (12-04) 23800011016 COMMONWEALTH OF PENNSYLVANIA DEPARTMENT OF REVENUE BUREAU OF COMPLIANCE OUT OF EXISTENCEIMERGER SECTION PO BOX 280947 HARRISBURG, PA 17128-0947 TELEPHONE NUMBER (717) 783-6052 TT# (800) 447-3020 (Services for Taxpayers with Special Hearing and/or Speaking Needs Only) PLEASE PRINT OR TYPE INFORMATION DEPARTMENT USE ONLY BOX NUMBER TAX TYPE K- THIS FORM WILL NOT BE PROCESSED IF NOT PROPERLY SIGNED AND NOTARIZED NOTE: If filing a final RCT-101 corporate report for the year 2002 and forward, complete the "corporate status change" section in the RCT 101 in lieu of filing this form. NOTE: The reverse side of this form must be completed. Section A pertains to a PA corporation or a foreign corporation that operated wholly within Pennsylvania. Section B pertains to all other foreign corporations. Date of Incorporation or 1/27/1992 Account ID/Corp. Box # 2073750 Certificate of Authority State of Incorporation Pennsylvania Entity ID (EIN) 25-1673750 Name of Corporation/Taxpayer Gates & Associates, P.C. I, the "Affiant,"was connected with the above corporation and have knowledge of its affairs. Said corporation ceased to transact business in Pennsylvania on or about « 1213112001 Month Day Year and all assets were sold, assigned or distributed on 12/3112001 and since that time, Month Day Year the corporation has not owned any property located in Pennsylvania, nor maintained an office therein, nor has performed any sales activity, and does not intend to transact further business in the Commonwealth. ' If corporation never transacted business or held assets in Pennsylvania, please use the words NEVER TRANSACTED BUSINESS in place of a cessation date. The filing of this Affidavit does not affect the status of the Certificate of Incorporation/Authority of this corporation but does permit the Department of State to relinquish the use of the present name of the corporation to another corporation. This affidavit is not to be filed by a PA corporation utilizing its PA charter to conduct business in another state. Out of state corporations soliciting business in Pennsylvania are subject to tax and should file this document only upon ceasing activity in Pennsylvania. Sworn to and subscribed before me this day of (Notary Public, District Justice, or Authorized Agent, Department of Revenue) OUT OF EXISTENCE/WITHDRAWAL AFFIDAVIT TITLE: President , year (Signature of Affiant) 1013 Mumma Road, Suite 100 Lemoyne, PA 17043 My commission expires , year (Present address of Affiant) (Notary Signature and Seal) ITelephone Number (717 ) 731-9600 PLEASE PRINT OR TYPE INFORMATION NO FILING FEE 23800011016 Z o 0 3 a g ? w p ? 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K N O M d N T O E O J n T 0 2 a ?' ??? GATESASSOCI 02/14/2004 4:20 PM Form 1120S U., acome Tax Return for an S Corp. Aion ? Do not file this form unless the corporation has timely filed Form 2553 to elect to be an S corporation. OMB No. 1545-0130 2003 Department of the Treasury Internal Revenue Service ? See separate instructions. For calendar year 2003, or tax ear begin ing and ending A Effective date of election Name Number, street, and room or suite no. (If a P.O. box, see page 12 of the instr.) C Employer identification number as an s corporation Use the IRS GATES & ASSOCIATES, P.C. 25-1673750 1/27/92 label. D Date incorporated B Business code other- wise 1013 Mumma Road, Suite 100 1/27/92 number (see pages , print or City or town, state, and ZIP code E Total assets (see page 12 of 31-33 of the Instr.) type. instructions) 541110 Lemoyne PA 17043-1144 $ 0 F Check applicable boxes: (1) Initial return (2) x Final retum (3) Name change (4) Address change (5) Amended return G Enter number of shareholders in the corporation at end of the tax year ...... ? 1 nn linpc 1a thrni inh 91 Spp nanP 19 of the inctrijr inns for more information- la Gross rcpt. or sales 5, 8 5 4 b Less rtn. and allowances ( c Bal ? I c 5,854 line 8) 2 Cost of goods sold (Schedule A Income . , Subtract line 2 from line 1 c 3 Gross profit 3 5 , 8 5 4 ............ . ............ . .... . . . . .. • ........................ . line 18 attach Form 4797 Part II 4 Net gain loss from Form 4797 4 , , 5 Other income (loss) (attach schedule) . .............................................................. 6 Total income (loss). Add lines 3 through 5 ....................................................... ? 6 5,854 7 Compensation of officers 7 ........................................................... 8 Salaries and wages (less employment credits) 8 . ............. . ... . .............. . ..... . ........ . 9 Repairs and maintenance 9 ...................................................................... 10 Bad debts 10 ........................................................................................ 11 Rents 11 Deduction .................................................................... 12 Taxes and licenses 12 2 , 3 4 2 ................................................................................ 13 Interest 13 398 (see page 13 of the instructions ............................................................ ..... ...................... 14a Depreciation (Attach Form 4562) ... 14a b Depreciation claimed on Schedule A and elsewhere on return 14b c Subtract line 14b from line 14a 4c for 15 Depletion (Do not deduct oil and gas depletion.) 15 limitations) ....................................... 16 Advertising 16 ............................... 17 Pension, profit-sharing, etc., plans 17 .. ......... ............... . .... ............ ................ 18 Employee benefit programs 18 ........................................................................ 19 Other deductions (attach schedule) See Stmt 1 19 12,162 ................... 20 Total deductions. Add the amounts shown in the far right column for lines 7 through 19 ? 20 14 , 9 0 2 ............... 21 Ordinary income loss from trade or business activities. Subtract line 20 from line 6 ...................... 21 - 9 , 0 4 8 22 Tax: a Excess net passive income tax (attach sch.) 22a b Tax from Schedule D (Form 1120S) 22b ................................... c Add lines 22a and 22b (see page 17 of the instructions for additional taxes) ................................................... ............................ 22c Tax and Payments 23 Payments: a 2003 estimated tax payments and amount applied from 2002 return 23a b Tax deposited with Form 7004 23b c Credit for Federal tax paid on fuels (attach Form 4136) 23c d Add lines 23a through 23c .. . 3d ................................ ...... ................... 24 Estimated tax penalty (See page 17 of instructions). Check if Form 2220 is attached ? 24 25 Tax due. If line 23d is smaller than the total of lines 22c and 24, enter amount owed. ..................... 26 Overpayment. If Ii 23d is larger than the total of lines 22c and 24, enter amount overpaid ............... 25 26 27 Enter amount of fin 26 ypu want: Credited tq?2004 estimated tax ? Refunded ? 27 Sign Here under penalties of perjury, dec that I have a t is return, including accompanying schedules and statements, May the IRS discuss this return with the preparer and to th st of my kno and belief, it f ru o , and complete. Declaration of reparer (other than taxpayer) is based o q informati which preparer s k ge. shown below see instr. ? X Yes No ' 2=L ?•- /4 ' PRESIDENT Si nature of o ffil., LOWELt G TES % / Date Title Paid Preparer / si natur Date 2/14/04 Check if 1 self-employed Preparer's SSN or PTIN P 0 0 0 6 2 7 7 2 Preparer's Firms fume (or yours EIN Use Only if self-employed). ' address, and ZIP code Phone no. For Paperwork Reduction Act Notice, see the separate instructions. r // 7/ C Corm 1120S(2003) DAA GATESASSOCI 02114/2004 4:20 PM form '1120S (2003) GATES & ASSOC. ES, P. C. 25-16 50 S;Kadles Cost of Goods Sold see page 18 of the instructions Page 2 1 Inventory at beginning of year .................................................................... 1 2 Purchases ............................... ................................................................... 3 Cost of labor ................................................................................................. 3 4 Additional section 263A costs (attach schedule) ................................................................. 5 Other costs (attach schedule) ................................................................................ . 6 Total. Add lines Ithrough 5 .............................................................................. 7 Inventory at end of year .... , .. . 8 Cost of goods sold. Subtract line 7 from line 6. Enter here and on page 1, line 2 - 8 9a 1 Cost as described in Regulations section 1.471-3 Check all methods used for valuing closing inventory: (i) 1 Lowerof cost or market as described in Regulations section 1.471-4 (ii) H (iii) (specify method used and attach explanation) 10 ................................................. Other ................................. b Check if there was a writedown of subnormal goods as described in Regulations section 1.471-2(c) ? 8 c Check if the LIFO inventory method was adopted this tax year for any goods (if checked, attach Form 970) ? d If the LIFO inventory method was used for this tax year, enter percentage (or amounts) of closing inventory computed under LIFO ............................................................................... I 9d . e If property is produced or acquired for resale, do the rules of Section 263A apply to the corporation? Yes No H f Was there any change in determining quantities, cost, or valuations between opening and closing inventory? No Yes Check method of accounting: (a) UK Cash (b) U Accrual (c) U Other (specify) 10 ...................................... See pages 31 through 33 of the instructions and enter the: (a) Business activity? ... LAW FIRM (b) Product or service 10 LEGAL . . . ..............SERVICES .............. At the end of the tax year, did the corporation own, directly or indirectly, 50% or more of the voting stock of a domestic corporation? (For rules of attribution, see section 267(c).) If "Yes," attach a schedule showing: (a) name, address, and employer identification number and (b) percentage owned Was the corporation a member of a controlled group subject to the provisions of section 1561? Check this box if the corporation has filed or is required to file Form 8264, Application for Registration of a Tax Shelter ............. ? Check this box if the corporation issued publicly offered debt instruments with original issue discount ............................. ? If checked, the corporation may have to file Form 8281, Information Return for Publicly Offered Original Issue Discount Instruments. If the corporation: (a) was a C corporation before it elected to be an S corporation or the corporation acquired an asset with a basis determined by reference to its basis (or the basis of any other property) in the hands of a C corporation and (b) has net unrealized built-in gain (defined in section 1374(d)(1)) in excess of the net recognized built-in gain from prior years, enter the net unrealized built-in gain reduced by net recognized built-in gain from prior years ........................................................................................ ? $ ....................... ? Check this box if the corporation had accumulated earnings and profits at the close of the tax year ? Are the corporation's total receipts (see page 19 of the instructions) for the tax year and its total assets at the end of the tax year less than $250,000? If "Yes," the corporation is not required to complete Schedules L and M-1. No X X ............................ Note: if the corporation had assets or operated a business in a foreign country or U.S. possession, it may be required to attach Schedule N (Form 1120), Foreign Operations of U.S. Corporations, to this return. See Schedule N for details. #3 Shareholders' Shares of Income, Credits, Deductions, etc. a Pro rata share items b Total amount 1 Ordinary income (loss) from trade or business activities (page 1, line 21) 1 - 9 , 0 4 8 2 Net income (loss) from rental real estate activities (attach Form 8825) 2 3a Gross income from other rental activities 3a ...................... b Expenses from other rental activities (attach schedule) 3b ............. c Net income (loss) from other rental activities. Subtract line 3b from line 3a c Income 4 Portfolio income (loss): a Interest income 4a (Loss) ................................................................................. b Dividends: (1) Qualified dividends ? (2) Total ordinary dividends ? 4b(2) c Royalty income 4c ................................................................................. d Net short-term capital gain (loss): (1) Post-May 5, 2003 ? (2) Entire year ? 4d(2) e Net long-term capital gain (loss): (1) Post-May 5, 2003 ? (2) Entire year ? 4e(2) ............. ... f Other portfolio income (loss) (attach schedule) 4f ..................................................... 5 Net section 1231 gain (loss) (attach Form 4797): (a) Post-May 5, 2003 ? (b) Entire year ? 5(b) ....................... 6 Other income loss attach schedule ............................................................. 6 DAA Form 1120S (2003) GATESASSOCI 02/1412004 4:20 PM 1? c Form 11205 (2003) WUL 150 a A0MV% LA__ X5M , r . u . 6 7 - 10 / _/ .') V Page 3 S1i [ Shareholders' Shares of Income Credits Deductions etc. continued a Pro rata share items b Total amount 7 Charitable contributions (attach schedule) .............................. ............. . . 7 Deduction . ... . ....... 8 Section 179 expense deduction (attach Form 4562) ............................................ .. 8 .. . 9 Deductions related to portfolio income (loss) (itemize) ........................................... 9 .... 10 Other deductions attach schedule .... 10 Invest- t 11a Interest expense on investment debts ..................................................... .. men Interest . b (1) Investment income included on lines 4a, 4b(2), 4c, and 4f on page 2 * --- 2 Investment ex nse included online 9 above ................................................ Ib(2) 12a Credit for alcohol used as a fuel (attach Form 6478) ....................................... 12a Low-income housing credit: (1) From partnerships to which section 420)(5) applies ............... . .. . . . .. . .. . . ... . .... . .... . . .............. .............. .............. ............. 12b(l) (2) Other than on line 12b(1 ) ............................................ 12b(2) Credits C Qualified rehabilitation expenditures related to rental real estate activities (attach Form 3468) ....................... 12c d Credits (other than credits shown on lines 12b and 12c) related to rental real estate activities 12d e Credits related to other rental activities ............................................................ 129 13 Other credits ................................................................................... 13 14a Depreciation adjustment on property placed in service after 1986 14a Adjust- b Adjusted gain or loss ............................................................................ 14b ments d T c Depletion (other than oil and gas) .................................................. . . 14c an ax . . ...... d (1) Gross income from oil, gas, or geothermal properties ................................. . .. . .... 14d(l) Preference . (2) Deductions allocable to oil, gas, or geothermal properties ..................................... 14d(2) Items . e Other ad'ustments and tax reference items attach schedule ....................................... 14e 15a Name of foreign country or U.S. possession ................................................... b Gross income from all sources .............. 15b c Gross income sourced at shareholder level ........................................................ 15c d Foreign gross income sourced at corporate level: (1) Passive .................................................................................. .............. 15d(l) (2) Listed categories (attach schedule) .......................................................... 15d(2) (3) General limitation .......................................................................... 15d(3) Foreign Taxes a Deductions allocated and apportioned at shareholder level: (1) Interest expense .......................................................................... 15e 1 (2) Other .................................................................................... 15e 2 If Deductions allocated and apportioned at corporate level to foreign source income: (1) Passive .................................................................................. 15f(l) (2) Listed categories (attach schedule) 15f(2) 3 General limitation g Total foreign taxes (check one): ? D Paid Accrued 15 h Reduction in taxes available for credit attach schedule 15h 16 Section 59(ex2) expenditures: a Type ? b Amount 10, ......................................... 16b 17 Tax-exempt interest income ...................................................................... 17 18 Other tax-exempt income ........................................................................ 18 19 Nondeductible expenses ......................................................................... 19 Other 20 Total property distributions (including cash) other than dividends reported on line 22 below .............. 20 21 Other items and amounts required to be reported separately to shareholders (attach schedule) 22 Total dividend distributions paid from accumulated earnings and profits ............................... 22 23 Income (loss). (Required only if Schedule M-1 must be completed.) Combine lines 1 through 6 in column (b). From the result, subtract the sum of lines 7 through 11 a, 15g, and 16b ................. r23 Form 1120S (2003) DAA GATESASSOCI 02/14/2004 4:20 PM r - Formll20S(2003) GATES & ASSOCi _,'ES, P.C. 25-16-150 Page4 Note: The corporation is not required to com fete Schedules L and M-1 if question 9 of Schedule B Is answered Yes." Balance Sheets per Books Beginning of tax year End of tax year Assets (a) b c d 1 Cash ................................... .: 2a Trade notes and accounts receivable b Less allowance for bad debts 3 Inventories ::•::; »>::> s»>s:>;;><;:»>:' .......:...... ' .......................... 4 government obligations S U . 5 Tax-exempt securities Other current assets ............ 7 to shareholders Loans t ... :.:.: . : :::. ..:.. ::.: : >;: .............. .;:.::.;:;•;:•:;.:;::. 8 Mortgage and real estate loans ...... ... ' : 9 Other investments ........................ ......;;:;.::;.::.;;::•;:.: .::.;:.;:::.;:•::.;;:•;:::.: 10a Buildings and other depreciable assets .. b Less accumulated depreciation 11a Depletable assets ........................ b Less accumulated depletion 12 Y amortization) Land net of an ......... 13a (amortizable only) Intangible assets ........................... b Less accumulated amortization ............ 4 1 Other assets attach sch. 15 Total assets i ty Liabilities and Shareholders' Equ 16 Accounts payable 17 notes bonds payable in less than 1 year Mortgages, 18 Other current liabilities .................... " 19 Loans from shareholders 20 Mortgages, notes, bonds payable in 1 year or more 21 h. Other liabilities attach sc 22 Capital stock :::. .:::::: : 23 Additional paid-in capital ........ .. .. 24 Retained earnings .... ....:::::•;: ......: -:.: -::::: ;......: ....... :: :::.:::.....:..... .....:.:. ;: . 25 Adjustments to shareholders' . ' equity attach schedule ;:.;.:..;:::: : :..::.::.:.: 26 Less cost of treasury stock .......... . ' ' ' 27 Total liabilities and shareholders' ui . So eON Ilt'F Reconciliation of Income Loss per Boo ks With Income Loss per Return 1 Net income (loss) per books 5 Income recorded on books this year not included 2 Income included on Schedule K. lines 1 on Schedule K, lines 1 through 6 (itemize): through 6, not recorded on books this year a Tax-exempt interest $ (itemize): . ......................................... ....................................... 6 Deductions included on Schedule K, lines 3 Expenses recorded on books this year not 1 through 11 a, 15g, and 16b, not charged included on Schedule K, lines 1 through against book income this year (itemize): 11 a, 15g, and 16b (itemize): a Depreciation $ ........................... a Depreciation $ b • ....................... entertainment $ .................................... 7 Add lines 5 and 6 .......................... ........................................ 8 Income (loss) (Schedule K, line 23). Line 4 less 4 Add lines 1 through 3 ................... line 7 Analysis of Accumulated Adjustments Account, Other Adjustments Account, and Shareholders' Undistributed Taxable Income Previous) Taxed see page 29 of the instructions A Accumulated (b) Other ad'us menu c) Shareholders' undistributed 1 Balance at beginning of tax year 3,278 2 Ordinary income from page 1, line 21 3 Other additions .......................... 4 Loss from page 1, line 21 91048..... ................. _ 5 Other reductions ......................... .:::::. 6 Combine lines 1 through 5 -5,770 7 Distributions other than dividend distributions 8 Balance at end of tax year. Subtract line 7 from line 6 - 5 , 7 7 0 DAA Form 1120S (2003) GATESASSOCI 03/07/2005 5:26 PM ?r Form1120S(2003) GATES & ASSOCIATES, P.C. 25-167.,/50 Page4 Note: The corporation is not required to coin lete Schedules L and M-1 If question 9 of Schedule B Is answered "Yes." 4jkj„> Balance Sheets per Books Beginning of tax year End of tax year Assets a b c d ............ ................................. 3,288 .. 1 Cash ................ nd accounts receivable t T d no es a ra e 2a ss allowance for bad debts b L e i '• i' 3 Inventor es . ations bli t g o governmen U.S. 4 iti s t »>: secur e 5 Tax-exemp t t asse s Other curren 6 ld s t h h . o er o s are Loans 7 ............. ... loans tate l d ............. . es rea an Mortgage 8 nts i t h O >z<> <'><>"<:::>;::;;<_<;::: :<::»::»::»:;:;>::::: » nves me er 9 t :. s and other depreciable assets ildin B 10 s»-. - - . g u a b Less accumulated depreciation table assets De le Zi ::::::::::::::::.::::::::: ......:: p a ................ __... b Less accumulated depletion d net of an amortization) L 12 s .... . »> : ':>«:ss>:::<>iis::`.:::<::: :. . : an _..__.... .._ . _ ......... . i able onl ible assets amortz only) Intan 13a g b Less accumulated amortization ......... .. ... sch. (attach 4 Other assets 1 `>:>sz >>>:`; 3 8 , 0 Total assets 15 ... Shareholders' Equity Liabilities and ............ ................................... >>::;:<?:<?:>:?: .:..... ................................................ ;><;>:;>:;<::ss:<?::?:?»»s:::?:>:?>>;::>:>::?>::>si;xt::: .:::::::::::..::::.::::::::.::.:::::::._:.::. . ::• >::•:•;:•:;;•::•;:•;:;•:-:;•;:•:;-;;:•: ;::: •;:: ;:-;:.: ": •: ......................... . able a Accounts 16 ..... p y than 1 bonds payable in less es notes Ye 7 Mort a es , g g , 18 Other current liabilities from shareholders Loans 19 . .... ................................ . . bonds able in 1 ear or more notes 20 pay Y a es Mort .... .. . , g g , h. (attach sc 21 Other liabilities ital stock 22 Ca ,., p ............................. .......... . ............ 23 Additional paid-in capital 24 Retained earnings 3,278 .:.;•:.:::: :................ 0 . ............. 25 Adjustments to shareholders' :: :::<;a;:;>: : . equity attach schedule 26 Less cost of treasury stock .............. ;;,;:-;:;;:;;>;:•: •.:>:;:;;:;;:;.;;;: 27 Total liabilities and shareholders' equity 3 , 2 8 8 0 ftoww" Reconciliation of Income Loss per Boo ks With Income Loss per Return 1 Net income (loss) per books -9, 048 5 Income recorded on books this year not included 2 Income included on Schedule K, lines 1 on Schedule K, fines 1 through 6 (itemize through 6, not recorded on books this year a Tax-exempt interest $ (itemize): . ......................................... 6 Deductions included on Schedule K, lines 3 Expenses recorded on books this year not 1 through 11a, 15g, and 16b, not charged included on Schedule K, lines 1 through against book income this year (itemize): 11 a, 15g, and 16b (itemize): a Depreciation $ ........................... a Depreciation $ . ......................................... b Travel end entertainment $ .... • . , .... " . " ......... . 7 Add lines 5 and 6 .......................... 8 Income (loss) (Schedule K, line 23). Line 4 less 4 Addlines lthrou h 3 ................... -9,0481 line 7........ ............................. -9,048 Analysis of Accumulated Adjustments Account, Other Adjustments Account, and Shareholders' ' Undistributed Taxab le Income Previous) Taxed see page 29 of the instructions a) Accumulated (b) Other ad"us ments c) Sharehoklers' undistributed a n 1 Balance at beginning of tax year 3,278 .............................................................. .................................................................. ' 2 Ordinary income from page 1 line 21 ............................................................... ................................................................... 3 Other additions Stmt 2 5,770 4 Loss from page 1, line 21 ................. 9 , 04 8 ............ `»>":<> `:'<'<><<>'> .:: s'<><>»><< >»: >::>i:>:=>:>.:»»»> 5 Other reductions ......................... 6 Combine lines 1 through 5 7 Distributions other than dividend distributions 8 Balance at end of tax year. Subtract line 7 from line 6 DAA Form 1120S (2003) GA I tJAS: CUU UZ11IWZUU4 4:ZU FM SCHEDULE K-1 ShareholL -'s 's Share of Income, Credits, Dedi, .ions, etc. (Form 1120S) ? See separate instructions. For calendar year 2003 or tax year Department of the Treasury In101 l;?-.n. W SGMI!`A beoinnina and ending 6711 OMB No. 1545-0130 2003 Shareholders identifying number ? 2 0 0- 5 2- 0 0 9 6 corporations identifying number ? 25-1673750 Shareholder's name, address, and ZIP code Corporation's name, address, and ZIP code LOWELL R. GATES 551 Harvest Lane Mechanicsburg PA 17055 GATES & ASSOCIATES, P.C. 1013 Mumma Road, Suite 100 Lemovne PA 17043-1144 A Shareholder's percentage of stock ownership for tax year (see instructions for Schedule K-1) ? 100.000000% ..... ............ B Internal Revenue Service Center where corporation filed its return ? Cincinnati, OH 4 5 9 9 9 ............................................................................. C Tax shelter registration number (see instructions for Schedule K-1) ? n Check annlir-ghle hnYes M1 n Final K-1 121 F1 Amanded K-1 (a) Pro rata share items (b) Amount (c) Form 1040 filers enter the amount in column b on: 1 Ordinary income (loss) from trade or business activities 1 -9,0 4 8 See page 4 of the 2 Net income (loss) from rental real estate activities 2 Shareholders Instructions for 3 Net income (loss) from other rental activities 3 Schedule K-1 (Form 1120S). 4 Portfolio income (loss): a Interest income . . . . .. . . . .. . . 4a Form 1040, line 8a ...... .. ... ...... ...... .. .. ... ... . .. b (1) Qualified dividends .. . . . . .. . . . . 4b (I Form 1040, line 9b .. ... ..... .. ... ... .. ... ... . ... (2) Total ordinary dividends . . . . . . 4b(2' Form 1040, line 9a .. ... .......... ... .. .. . . . c Royalty income .... . . .... . . .......... . .. . ... . .. . .. .. . . 4c Sch. E, Part 1, line 4 d (1) Net short-term capital gain (loss) (post-May 5, 2003) 4d 1 Sch. D, line 5, col. (g) Income (2) Net short-term capital gain (loss) (entire year) 4d(2 Sch. D, line 5, col. (f) (Loss) a (1) Net long-term capital gain (loss) (post-May 5, 2003) ...... , ..... 4e (l Sch. D, line 12, col. (g) (2) Net long-term capital gain (loss) (entire year) 4e(2 Sch. D, line 12, col. (f) If Other portfolio income (loss) (attach schedule) 41f (Enter on applicable In. of your rtn.) 5a Net section 1231 gain (loss) (post-May 5, 2003) .................... Sa See Shareholder's Instructions b Net section 1231 gain (loss) (entire year) .......................... 5b for Schedule K-1 (Form 11205). 6 Other income loss attach schedule ............................. 6 Enter on applicable in. of our nn. 7 Charitable contributions (attach schedule) 7 Sch. A, line 15 or 16 8 Section 179 expense deduction 8 See page 5 of the Shareholder's Deductions 9 Deductions related to portfolio income (loss) (attach schedule) 9 instructions for Schedule K-1 10 Other deductions attach schedule .. . . ..................... . ... . . 10 (Form 1120S). Investment 11a Interest expense on investment debts 1la Form 4952, line 1 Interest b (1) Investment income included on lines 4a, 4b(2), 4c, and 41' above 11b (I See Shareholder's Instructions 2 Investment expenses included on line 9 above . ........ . ... . . . . 11b(2 for Schedule K-1 Form 11205 . 12a Credit for alcohol used as fuel 12a Form 6478, line 10 b Low-income housing credit: (1) From section 420)(5) partnerships ............................ 12b (I (2) Other than on line 12b(1) 12b 2 Form 8586, line 5 Credits c Qualified rehabilitation expenditures related to rental real estate activities ...................................................... 12c d Credits (other than credits shown on lines 12b and 12c) related to rental real estate activities "..""".."""....""""""'... 12d See page 6 and 7 of the Shareholder's Instructions for e Credits related to other rental activities ............................ 12e Schedule K-1 (Form 1120S). 13 Other credits ................................................... 13 For Paperwork Reduction Act Notice, see the Instructions for Form 1120S. Schedule K-1 (Form 1120S) 2003 There are no amounts for Page 2 DAA IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA PNC BANK, N.A., Plaintiff, No. 09-7265 V. LOWELL R. GATES, Civil Action - Law & Equity Defendant, VERIFICATION I, Lowell R. Gates, hereby verify that the statements made in the foregoing Response in Opposition to Plaintiffs Motion for Summary Judgment are true and correct to the best of my information, knowledge and belief. I understand that false stat s herein are made subject to the penalties of 18 Pa. C.S. Section 4904, relating to unworn si cation to authorities. Date: October 11, 2010 Lowell R( Gates IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA PNC BANK, N.A., V. LOWELL R. GATES, Plaintiff, Defendant, No. 09-7265 Civil Action - Law CERTIFICATE OF SERVICE I, Lowell R. Gates, Esq., an adult individual, hereby certify that a true and correct copy of the foregoing Defendant's Response in Opposition to Plaintiffs Motion for Summary Judgment has been served this day upon the following counsel of record by United States first class mail, postage prepaid, addressed as follows: John M. Eakin, Esquire Market Square Building Mechanicsburg, PA 17055 Attorney for PNC Bank Dated: October 11, 2010 Lowell A. (Yates, Esquire Attorny ID # 46779 1013 Mumma Road, Suite 100 Lemo e, PA 17043-1144 Phone: (717) 731-9600 Fax: (717) 731-9627 l.r. agtes(a gateslawfirm.com jj i } R PNC BANK, NATIONAL ASSOCIATION : IN THE COURT OF COMMON PLEAS OF EXECUTOR OF THE ESTATE OF :CUMBERLAND COUNTY, PENNSYLVANIA WILLIAM G. MAGARO, Plaintiff : NO. 2009 - 7265 CIVIL TERM © 'Yi r*t ~' c7 ~,r,~ LOWELL R. GATES, m~ -=-'z' ~--, -+ rn~ -o~ ~' Defendant Wiz' ~' ~ ° ~ ~~ ~ - ~. ~ ~ ~ O - c , ~ ~; rr dc7 ~ n ~ IN RE: CROSS MOTIONS FOR SUMMARY JUDGMENT = cn D -~ ao ~ -< BEFORE GUIDO. J. MEMORANDUM OPINION AND ORDER The parties have filed cross motions for summary judgment. After reviewing the motions, the record in this action as well as the related action at 2003-6247, and the briefs filed by the parties in support of their respective positions, it is clear that there is no genuine issue of fact with regard to the dates when Defendant's alleged legal malpractice occurred. We are further satisfied that the current action is time barred. Therefore, we will enter the order that follows. ORDER AND NOW, this 28T" day of OCTOBER, 2010, Plaintiff's Motion for Summary Judgment is DENIED. Defendant's Motions for Summary judgment is GRANTED. The trial scheduled for NOVEMBER 3, 2010, is CANCELLED. y the Court, Edward E. Guido, J. OHN M. EAKIN, ESQUIRE MARKET SQUARE BUILDING MECHANICSBURG, PA 17055 ~WELI R. GATES, ESQUIRE GATES, HALBRUNER, HATCH & GUISE, P.C. 1013 MUMMA ROAD, SUITE 100 LEMOYNE, PA 17043 :sid l..:D~t~' m7i ~__Z~