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HomeMy WebLinkAbout09-8336TAM SYSTEMS, INC., IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. : DOCKET NO. Oq' L CUBED CORPORATION, d/b/a TAM SYSTEMS, LENARD L. LOBAUGH, JR. & MARTIN M. SACKS & ASSOCIATES, Defendants : CIVIL ACTION - LAW : JURY TRIAL DEMANDED To: L Cubed Corporation c/o John H. Pieft ak, Esquire Reager & Adler, PC 2331 Market Street Camp Hill, PA 17011 NOTICE TO DEFEND You have been sued in Court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 Telephone No. (717) 249-3166 TAM SYSTEMS, INC., IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. DOCKET NO. L CUBED CORPORATION, d/b/a TAM SYSTEMS, LENARD L. LOBAUGH, JR. & MARTIN M. SACKS & ASSOCIATES, Defendants : CIVIL ACTION - LAW : JURY TRIAL DEMANDED To: Lenard L. Lobaugh, Jr. c/o John H. Pietrzak, Esquire Reager & Adler, PC 2331 Market Street Camp Hill, PA 17011 NOTICE TO DEFEND You have been sued in Court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAIL THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 Telephone No. (717) 249-3166 TAM SYSTEMS, INC., Plaintiff V. L CUBED CORPORATION, d/b/a TAM SYSTEMS, LENARD L. LOBAUGH, JR. & MARTIN M. SACKS & ASSOCIATES, Defendants IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA : DOCKET NO. : CIVIL ACTION - LAW : JURY TRIAL DEMANDED To: Martin M. Sacks & Associates 4775 Linglestown Road Harrisburg, PA 17112 NOTICE TO DEFEND You have been sued in Court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 Telephone No. (717) 249-3166 Salzmann Hughes, P.C. James D. Hughes, Esquire Attorney I.D. No. BY: David H. Martineau, Esquire Attorney I.D. No. 84127 354 Alexander Spring Road, Suite 1 Carlisle, PA 17015 Telephone: 717-249-6333 Attorneys for P imiff TAM SYSTEMS, INC., Plaintiff V. L CUBED CORPORATION, d/b/a TAM SYSTEMS, LENARD L. LOBAUGH, JR. & MARTIN M. SACKS & ASSOCIATES, Defendants IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA DOCKET NO. O 9 - ?334 Ct(?J 7,Gw, CIVIL ACTION - LAW JURY TRIAL DEMANDED COMPLAINT AND NOW, comes the Plaintiff, TAM Systems, Inc., by and through its counsel, SALZMANN HUGHES, P.C., and files this Complaint and in support thereof avers the following: 1 2. 3. Plaintiff, TAM Systems, Inc. (hereinafter "TAM Systems") is a Pennsylvania business corporation with an address at 1250 South Mountain Road, Dillsburg, York County, Pennsylvania 17019. Defendant, L Cubed Corporation, d/b/a TAM Systems (hereinafter "L Cubed") is a Pennsylvania business corporation with its registered address at 1248 South Mountain Road, Dillsburg, York County, Pennsylvania 17019. Defendant Lenard L. Lobaugh, Jr. (hereinafter "Lobaugh") is an adult individual who at all times relevant hereto has been the President of L Cubed. 4. Defendant, Martin M. Sacks & Associates is an accounting firm with an address at 4775 Linglestown Road, Harrisburg, Dauphin County, Pennsylvania 17112 (hereinafter referred to as "Sacks'). 5. Until March 1, 2006, TAM Systems operated a construction business at 1248 South Mountain Road, Dillsburg, Pennsylvania 17019, owning certain assets, both tangible and intangible, goodwill and contracts for business (hereinafter referred to as the "Business"). 6. On March 1, 2006, the parties conducted settlement on the sale of the Business from TAM Systems to L Cubed (hereinafter referred to as "Settlement") 7. The sale of the Business from TAM Systems to L Cubed was in the form of an asset sale including goodwill and the right to operate under the name "TAM Systems" (hereinafter referred to as the "Asset Sale") 8. From March 1, 2006 until present, L Cubed has operated the Business. 9. Prior to the March 1, 2006 settlement, the parties negotiated the terms of an Asset Purchase Agreement, executed at Settlement, setting forth the terms and conditions of the Asset Sale. A true and correct copy of the Asset Purchase Agreement is attached hereto as Exhibit "A" and incorporated herein by this reference. 10. L Cubed was represented by legal counsel during the negotiations of the Asset Purchase Agreement and at Settlement. 11. Paragraph 8(c) of the Asset Purchase Agreement provided that as part of the purchase price for the Business, L Cubed would pay TAM Systems an amount based upon the Gross Profits of the Business as follows: Buyer [L Cubed] shall pay to Seller [TAM Systems] ten percent (10%) of Buyer's Gross Profits derived from the business sold hereunder for a period of six (6) years after the Closing Date. Buyer shall pay said Gross Profits to Seller within thirty (30) days of each anniversary of the Closing Date during the said six (6) year period. For the purposes of this Agreement, Gross Profits shall mean the gross profits as shown on Buyer's tax return. 12. The Closing Date as that term is used in the Asset Purchase Agreement is March 1, 2006. 13. All negotiations for the Asset Purchase Agreement took place in Carlisle, Cumberland County, Pennsylvania. 14. Settlement occurred in Carlisle, Cumberland County, Pennsylvania. 15. The transaction of the asset sale of the Business from TAM Systems to L Cubed, which is the subject matter of this Complaint, occurred in Cumberland County, Pennsylvania. 16. During the period that the parties were negotiating the terms of the Asset Sale, TAM Systems provided L Cubed with current and historical financial records, including, but not limited to tax returns, for the Business. 17. All financial records provided to L Cubed relating to the Gross Profits of the Business as reported on a tax return were kept using a standard cost accounting system. (hereinafter referred to as "Standard Accounting"). 18. At the time of forming the Asset Purchase Agreement, all negotiations between the parties were based upon records kept using Standard Accounting. 19. At all times prior to entering into the Asset Purchase Agreement and conducting Settlement, the understanding of the parties regarding the profitability of the Business was based upon Standard Accounting. 20. At no time prior to Settlement, did the parties discuss the possibility of utilizing any alternative accounting method. 21. The agreed upon terms of the Asset Sale and the definitive Asset Purchase Agreement between the parties were based upon utilization of Standard Accounting. 22. Plaintiff filed a tax return for the year 2006 on or about March 15, 2007 for the portion of the calendar year 2006 during which L Cubed owned the Business (hereinafter referred to as the "2006 Original Return"). The 2006 Original Return is incorporated herein by this reference, but not attached to this Complaint at Defendant L Cubed's request. 23. The 2006 Original Return utilized Standard Accounting. 24. It is believed that L Cubed maintained its internal accounting records utilizing the same Standard Accounting. 25. The 2006 Original Return reported a Gross Profit of One Million Three Hundred Sixty- Two Thousand Three Hundred Seventy-Five Dollars ($1,362,375). 26. The amount of the Purchase Price due from L Cubed to TAM Systems pursuant to paragraph 8(c) of the Asset Purchase Agreement for the period of March 1, 2006 through December 31, 2006 is One Hundred Thirty-Six Thousand Two Hundred Thirty-Seven and 50/100 Dollars ($136,237.50). 27. After filing the 2006 Original Return, L Cubed expressed its opinion that payment of $136,237.50 was too high. 28. After filing the 2006 Original Return, L Cubed refused to pay TAM Systems the amount due by the date due under the Asset Purchase Agreement or upon later demand by TAM Systems. 29. After filing the 2006 Original Return, L Cubed instead requested that TAM Systems agree to amend the Asset Purchase Agreement in order to reduce the amount of money owed to TAM Systems based upon the profitability of the Business for 2006 and future years. 30. TAM Systems did not agree to any proposed amendment to the Asset Purchase Agreement. 31. By letter from counsel of July 20, 2007, L Cubed informed TAM Systems that because TAM Systems did not agree to amend the Asset Purchase Agreement, it intended to file an amended tax return for 2006 utilizing the full absorption accounting method (hereinafter referred to as "Full Absorption Accounting"). 32. The effect of amending the 2006 tax return would be to artificially decrease the gross profits reported. 33. On or about March 7, 2008, L Cubed filed an amended 2006 tax return (hereinafter referred to as the "2006 Amended Return") reporting a gross profit of Five Hundred Forty-Six Thousand Eight Hundred Ninety Eight Dollars ($546,898). The 2006 Amended Return is incorporated herein by this reference, but not attached to this Complaint at Defendant L Cubed's request. 34. Filing the 2006 Amended Return increased the taxable ordinary business income of L Cubed from $293,838 to $331,540. 35. The Full Absorption Accounting method is intended to for use by businesses that hold significant amounts of inventory for long periods of time. 36. The Business does not hold significant amounts of inventory for long periods of time. 37. There was no legitimate business purpose to amending the tax returns to utilize the Full Absorption Accounting. 38. In its letter of July 20, 2007, L Cubed made clear that it would change accounting methods only to affect the amount of money due to TAM Systems under the Asset Purchase Agreement. 39. On or about March 18, 2008, L Cubed filed a tax return for the calendar year of 2007, utilizing Full Absorption Accounting (hereinafter referred to as the "2007 Return"). The 2007 Return is incorporated herein by this reference, but not attached to this Complaint at Defendant L Cubed's request. 40. The 2007 Return reported a gross profit of Four Hundred Thirty-Eight Thousand Four Hundred Eighty-Seven Dollars ($438,487). 41. On or about March 20, 2009, L Cubed filed an amended tax return for the calendar year of 2008, utilizing Full Absorption Accounting (hereinafter referred to as the "2008 Return"). The 2008 Return is incorporated herein by this reference, but not attached to this Complaint at Defendant L Cubed's request. 42. L Cubed had previously filed an original 2008 tax return showing the same gross profit as the amended 2008 Return and utilizing the same accounting method. 43. The 2008 Return reported a gross profit of Nine Hundred One Thousand Seven Hundred Eighty-Six Dollars ($901,786). 44. TAM Systems has made repeated demands for payment of sums due to it under the Asset Purchase Agreement. 45. Despite TAM Systems' repeated demands, L Cubed has not paid the money due to TAM Systems under the Asset Purchase Agreement. 46. Despite TAM Systems' repeated demands, L Cubed has never even tendered payment of amounts due for 2006 through 2008 as reflected by its own accounting. 47. The Asset Purchase Agreement provides that L Cubed will pay TAM Systems costs of suit and reasonable attorney fees if L Cubed breaches the Asset Purchase Agreement. 48. All actions taken by L Cubed set forth in this Complaint were taken at the direction of Lobaugh, President of the company. 49. In addition to L Cubed, Lobaugh, Jr. individually, is liable to Plaintiff under the doctrine of participation. COUNTI BREACH OF CONTRACT (TAM Systems, Inc. v. L Cubed Corporation & Lenard L. Lobaugh, Jr.) 50. The allegations set forth in Paragraphs 1 through 49 of this Complaint are incorporated herein as if set forth in full. 51. L Cubed has an obligation under the Asset Purchase Agreement to pay TAM Systems ten percent (10%) of gross profits of the business for the years 2006 through 2008. 52. The payment to TAM Systems based upon the gross profits of the Business for 2006 was due no later than March 31, 2007. 53. The payment to TAM Systems based upon the gross profits of the Business for 2007 was due no later than March 31, 2008. 54. The payment to TAM Systems based upon the gross profits of the Business for 2008 was due no later than March 31, 2009. 55. The expectations of the parties at the time of entering into the Asset Purchase Agreement was for the gross profits of the Business to be determined using Standard Accounting. 56. For the time period of March 1, 2006 through December 31, 2006, L Cubed owes TAM Systems the sum of One Hundred Thirty-Six Thousand Two Hundred Thirty-Seven and 50/100 Dollars ($136,237.50). 57. Analysis of the 2007 Return reveals that gross profits as determined by Standard Accounting for the time period of January 1, 2007 through December 31, 2007 are approximately One Million Three Hundred Forty Thousand Ninety-Six Dollars ($1,340,096). 58. For the time period of January 1, 2007 through December 31, 2007, L Cubed owes TAM Systems the sum of One Hundred Thirty-Four Thousand Nine and 60/100 Dollars ($134,009.60). 59. Analysis of 2008 Return reveals that gross profits as determined by Standard Accounting for the time period of January 1, 2008 through December 31, 2008 are approximately One Million Eight Hundred Seventy Thousand Two Hundred Fifty-Four Dollars ($1,870,254). 60. For the time period of January 1, 2008 through December 31, 2008, L Cubed owes TAM Systems the sum of One Hundred Eighty-Seven Thousand Twenty-Five and 40/100 Dollars ($187,025.40). 61. L Cubed has not yet reported its gross profits for January 1, 2009 through March 1, 2009. 62. The total sum owing from L Cubed to TAM Systems for the period of March 1, 2006 through December 31, 2008 is Four Hundred Fifty-Seven Thousand Two Hundred Seventy-Two and 501100 Dollars ($457,272.50) plus additional sums due based upon the currently unreported gross profit from January 1, 2009 through March 1, 2009. 63. The sum of $457,272.50 plus additional sums based upon the currently unreported gross profit from January 1, 2009 through March 1, 2009, have been due and owing to TAM Systems since at least March 31, 2009. 64. L Cubed has breached its obligation to pay TAM Systems the portion of the purchase price related to the gross profits of the Business, as set forth under Paragraph 8(c) of the Asset Purchase Agreement by failing to pay TAM Systems the sum of Four Hundred Fifty-Seven Thousand Two Hundred Seventy-Two and 501100 Dollars ($457,272.50) plus additional sums due based upon the currently unreported gross profit from January 1, 2009 through March 1, 2009. 65. As a result of L Cubed's breach of its obligations under the Asset Purchase Agreement, TAM Systems has suffered damages in the amount of Four Hundred Fifty-Seven Thousand Two Hundred Seventy-Two and 50/100 Dollars ($457,272.50) plus additional sums due based upon the currently unreported gross profit from January 1, 2009 through March 1, 2009. 66. All actions taken by L Cubed set forth in Count I of this Complaint were taken at the direction of Lobaugh. 67. In addition to L Cubed, Lobaugh, individually, is liable to Plaintiff under the doctrine of participation. WHEREFORE, Plaintiff, TAM Systems, Inc., prays this Honorable Court to enter judgment in favor of Plaintiff and against Defendants L Cubed Corporation, d/b/a TAM Systems and Lenard L. Lobaugh, Jr. in an amount exceeding Four Hundred Fifty-Seven Thousand Two Hundred Seventy-Two and 501100 Dollars ($457,272.50) plus reasonable attorney fees and costs of suit and interest. COUNT II UNJUST ENRICHMENT (TAM Systems, Inc. v. L Cubed Corporation & Lenard L. Lobaugh, Jr.) (Plead in the Alternative) 68. The allegations set forth in Paragraphs 1 through 67 of this Complaint are incorporated herein as if set forth in full. 69. TAM Systems conferred a benefit upon L Cubed by transferring all assets of the Business to L Cubed on or about March 1, 2006. 70. The Business was desired by L Cubed. 71. L Cubed has retained the Business. 72. L Cubed has operated the Business at all times since March 1, 2006, deriving a profit therefrom. 73. L Cubed would be unjustly enriched if it were permitted to retain the Business without paying TAM Systems the fair market value of the Business. 74. The agreement of the parties with respect to purchase price, reflected in the terms of the Asset Purchase Agreement was an arm's length transaction with both parties represented by counsel. 75. The arm's length agreement of the parties with respect to purchase price as reflected in the terms of the Asset Purchase Agreement, is the fair market value of the Business. 76. It is reasonable to expect that the performance of the Business for the period of 2009, 2010, 2011 and January 1, 2012 through April 30, 2012 will be at least on par with the performance of the Business from March 1, 2006 through December 31, 2008. 77. L Cubed has been unjustly enriched in the value of the Business over and above what they paid to TAM Systems at Settlement. 78. Based upon the past profitability of the Business and an expectation of similar future performance, L Cubed has been unjustly enriched in the amount of approximately Eight Hundred Ninety-Nine Thousand Seven Hundred Forty-Eight and 90/100 ($899,748.90). 79. As a result of L Cubed's unjust enrichment, TAM Systems has been damaged in the amount of the value of the benefit conferred, Eight Hundred Ninety-Nine Thousand Seven Hundred Forty-Eight and 90/100 ($899,748.90). 80. All actions taken by L Cubed set forth in Count II of this Complaint were taken at the direction of Lobaugh. 81. In addition to L Cubed, Lobaugh, individually, is liable to Plaintiff under the doctrine of participation. WHEREFORE, Plaintiff prays this Honorable Court to enter judgment in favor of Plaintiff, TAM Systems, Inc. and against Defendants L Cubed Corporation, d/b/a TAM Systems and Lenard L. Lobaugh, Jr. in the amount of Eight Hundred Ninety-Nine Thousand Seven Hundred Forty-Eight and 90/100 ($899,748.90) plus reasonable attorney fees and costs of suit and interest. COUNT III QUANTUM MERUIT (TAM Systems v. L Cubed Corporation & Lenard L. Lobaugh, Jr.) (Plead in the Alternative) 82. The allegations set forth in Paragraphs 1 through 81 of this Complaint are incorporated herein by this reference. 83. TAM Systems has conferred a benefit upon L Cubed in the form of transferring the Business to L Cubed. 84. Defendant accepted and retained the benefit of the Business. 85. Based upon the past profitability of the Business and an expectation of similar future performance, the fair and reasonable value of the Business over and above what was paid at Settlement is Eight Hundred Ninety-Nine Thousand Seven Hundred Forty-Eight and 90/100 ($899,748.90). 86. Despite TAM Systems' reasonable demands, L Cubed has failed to pay the sum of Eight Hundred Ninety-Nine Thousand Seven Hundred Forty-Eight and 90/100 ($899,748.90) to Tam Systems. 87. All actions taken by L Cubed set forth in Count III of this Complaint were taken at the direction of Lobaugh. 88. In addition to L Cubed, Lobaugh, individually, is liable to Plaintiff under the doctrine of participation. WHEREFORE, Plaintiff prays this Honorable Court to enter judgment in favor of Plaintiff, TAM Systems, Inc. and against Defendants L Cubed Corporation, d/b/a TAM Systems and Lenard L. Lobaugh, Jr. in the amount of Eight Hundred Ninety-Nine Thousand Seven Hundred Forty-Eight and 90/100 ($899,748.90) plus reasonable attorney fees and costs of suit and interest. COUNT IV Tortious Interference with Existing Contractual ReiosnsWW (TAM Systems v. Martin M. Sacks & Associates) 89. The allegations set forth in Paragraphs 1 through 88 of this Complaint are incorporated herein by this reference. 90. The Asset Purchase Agreement is an existing contract between TAM Systems and L Cubed. 91. During the time period of March 2006 to present, Sacks provided accounting services to L Cubed, including, but not limited to the preparation of L Cubed's federal tax returns. 92. It is believed and therefore averred that Sacks provided L Cubed with the recommendation that switching to Full Absorption Accounting would result in a lower gross profit being reported on L Cubed's federal tax return. 93. It is believed and therefore averred that Sacks had knowledge of the terms of the Asset Purchase Agreement with respect to L Cubed's gross profits at the time of the recommendation referred to in Paragraph 83 above. 94. It is believed and therefore averred that Sacks acted as described in this Count IV with the intent to assist L Cubed's attempt to artificially lower the payments due to TAM Systems under the Asset Purchase Agreement. 95. Sacks did not act with any privilege or legitimate justification. 96. As a result of Sacks actions, TAM Systems has been damaged in the amount of Four Hundred Fifty-Seven Thousand Two Hundred Seventy-Two and 501100 Dollars ($457,272.50) plus additional sums due based upon the currently unreported gross profit from January 1, 2009 through March 1, 2009. WHEREFORE, Plaintiff prays this Honorable Court to enter judgment in favor of Plaintiff, TAM Systems, Inc. and against Defendant Martin M. Sacks & Associates, in the amount exceeding Four Hundred Fifty-Seven Thousand Two Hundred Seventy-Two and 501100 Dollars ($457,272.50) plus reasonable attorney fees and costs of suit and interest. COUNT V CIVIL CONSPIRACY (TAM Systems v. L Cubed Corporation, Lenard L. Lobaugh, Jr. & Martin M. Sacks & Associates) 97. The allegations set forth in Paragraphs 1 through 96 of this Complaint are incorporated herein by this reference. 98. Defendant Sacks provides accounting services to L Cubed. 99. Sacks prepared all tax returns relevant to this Complaint for L Cubed Corporation, including, without limitation, the 2006 Original Return, the 2006 Amended Return, the 2007 Return and the 2008 Return. 100. It is believed and therefore averred that Sacks advised L Cubed that switching to Full Absorption Accounting would reduce its obligation to TAM Systems under the Asset Purchase Agreement. 101. Sacks assisted L Cubed in attempting to defraud TAM Systems by preparing and filing the 2006 Amended Return, the 2007 Return and the 2008 Return utilizing an accounting method specifically chosen to artificially reduce the amounts owed to TAM Systems under the Asset Purchase Agreement. 102. Sacks and L Cubed acted for the common purpose of breaching the Asset Purchase Agreement by artificially lowering the amounts shown as Gross Profits on L Cubed's income tax returns for 2006, 2007 and 2008. 103. As a result of the actions taken by Sacks and L Cubed, TAM Systems has been damaged in the amount of Four Hundred Fifty-Seven Thousand Two Hundred Seventy-Two and 501100 Dollars ($457,272.50) plus additional sums due based upon the currently unreported gross profit from January 1, 2009 through March 1, 2009. 104. All actions taken by L Cubed set forth in Count I of this Complaint were taken at the direction of Lobaugh. 105. In addition to L Cubed, Lobaugh, individually, is liable to Plaintiff under the doctrine of participation. WHEREFORE, Plaintiff prays this Honorable Court to enter judgment in favor of Plaintiff, TAM Systems, Inc. and against Defendants, L Cubed Corporation, d/b/a TAM Systems, Lenard L. Lobaugh, Jr. and Martin M. Sacks & Associates, in the amount of Four Hundred Fifty-Seven Thousand Two Hundred Seventy-Two and 501100 Dollars ($457,272.50) plus reasonable attorney fees and costs of suit and interest. COUNT VI DECLARATORY JUDG NT (TAM Systems v. L Cubed Corporation) 106. The allegations set forth in Paragraphs 1 through 105 of this Complaint are incorporated herein by this reference. 107. Asset Purchase Agreement provides for payments based upon the gross profit of the Business for 2009, 2010, 2011 and January through February 2012 which sums have not been determined and are not yet due. 108. Defendant L Cubed may attempt to utilize the same Full Absorption Accounting to artificially limit the gross profits of the Business in determining amounts due to TAM Systems in the future. 109. The issues raised in this Complaint may come before the Court again in future years. 110. If L Cubed continues to utilize the Full Absorption Accounting, TAM Systems may be subjected to the need for repeated litigation of the same issue. I 11. The issue of the accounting method to be utilized in determining the sum due to TAM Systems under the Asset Purchase Agreement is a proper issue for declaratory judgment. WHEREFORE, Plaintiff, TAM Systems, Inc., prays this Honorable Court to enter declaratory judgment, directing that future sums due to TAM Systems, Inc. under the terms of the Asset Purchase Agreement of March 1, 2006 be determined utilizing Standard Accounting practices. SALZMANN HUGHES, P.C. By: James D. Hughes, Esquire Attorney I.D. 58884 David H. Martineau, Esquire Attorney I.D. No. 84127 354 Alexander Spring Road, Suite 1 Carlisle, PA 17015 (717) 249-6333 Attorneys for Plaintiff Dated: December 2, 2009 EXHIBIT "A" ASSET PURCHASE AGREEMENT BETWEEN TAM SYSTEMS, INC. L CUBED CORPORATION DATED MARCH 1, 2006 ASSET PURCHASE AGREEMENT -V I".4*41e THIS ASSET PURCHASE AGREEMENT, is made as of this / day ofd, 2006, by and between TAM SYSTEMS, INC., a business corporation organized and existing under the laws of the Commonwealth of Pennsylvania, with its principal offices located -at 1248 South Mountain Road, Dillsburg, York County, Pennsylvania 17019 (hereinafter referred to as "Seller"), and L CUBED CORPORATION; a Pennsylvania corporation to have its principal place of business at 1248 South Mountain Road, Dillsburg, York County, Pennsylvania 17019 (hereinafter referred to as "Buyer"). WITNESSETH: WHEREAS, Seller currently operates an agricultural and commercial construction business, located at 1248 South Mountain Road, Dillsburg, York County, Pennsylvania; and WHEREAS, Seller is; desirous of selling to Buyer substantially all of Seller's assets and Buyer is desirous of purchasing the same from the Seller upon on the terms and conditions hereinafter set forth. NOW THEREFORE, in consideration of the mutual covenants contained herein, in reliance upon the representations and warranties contained herein, and subject to the conditions contained herein, the parties hereto agree as follows: 1. SALE OF ASSETS: Seller agrees to sell and deliver to Buyer, and Buyer agrees to purchase and take from Seller, all of Seller's inventory, furnishings, leasehold improvements, fixtures supplies, goodwill, customer lists and other rights owned by Seller for use in the operation of Seller's business, the same being more particularly described in Exhibit "A", attached hereto and incorporated herein by this reference (herein collectively called "Assets") Page 1 of 19 Specifically excluded from the Assets to be sold under this Agreement are those assets listed on Exhibit "A-1 ", attached hereto and incorporated herein by this reference. Except' as otherwise disclosed herein, Seller shall transfer all right, title and interest in the Assets to Buyer, free and clear of all liens, encumbrances, security interests, restrictions and claims of any nature whatsoever except those which are created herein and those which have been disclosed to Buyer in this Asset Purchase 2. ASSUMMON OF LIABII,ITMS: Buyer shall assume those liabilities of Seller as set forth on Exhibit `B", attached hereto and incorporated herein by this reference and indemnify and hold Seller harmless from the same. Seller shall remain liable for all accrued salaries, wages, vacation pay and benefits as well as all sales, income and other applicable taxes accruing to the date of Closing. 3. INSURANCE: Buyer shall establish its own health insurance and workers compensation insurance for those employees hired by Buyer. 4. LEASE OF REAL AND PERSONAL PROPERTY: a. Personal Proper_yt (1) Cranes: At Closing, Buyer shall enter into a lease agreement for a Pioneer crane, listed as number 21 on the Seller's list of motor vehicles (the "Crane Lease"), which Crane Lew shall be in a form that releases Seller from any and all responsibility under Seller lease for said crane. Seller shall use its best efforts to assure the Lessor agrees to the lease agreement with Buyer. Seller and Buyer acknowledge that Seller has rights under a lease to a Harleysville Crane, which lease is expressly excluded from the Assets which are part of this sale and which lease shall be retained by Seller. At or prior to Closing, as defined below, Page 2 of 19 (2) Automobiles: Buyer shall assume leases to the following four (4) trucks as of the Closing Date: (a) 2001 F550 (Motor Vehicle No. 60) (b) 2001 F450 (Motor Vehicle No. 61) (c) 2001 F550 (Motor Vehicle No. 62) ' (d) 2001 F550 (Motor Vehicle No: 63) (the "Truck Leases") (3) Forklift. Buyer shall assume the lease for a Gradall forklift listed as number 65 as on the Seller's list of motor vehicles, as of the Closing Date. Seller use its best efforts to assure the Lessor agrees to the assumption of the lease by Buyer. b. Real Prop gyt : Buyer shall enter into a commercial lease agreement for the real property located at 4248 South Mountain Road, Dillsburg, York County, Pennsylvania in a form mutually agreeable. to both Buyer and the property owner (the "Land Lease"), which lease agreement shall expressly relieve Seller from any and all obligations under any lease of Seller for said real property. The monthly rent for said commercial lease shall be $700.00 and the lease shall be triple net to Buyer. The lease shall have a term of one (1) year. 5. ACCOUNTS RECEIVABLE / PAYABLE: a. Accounts Payable: Buyer shall not receive or assume any rights or obligations to accounts payable unless specifically set fort in Exhibit "B". b. Accgunts Receivable: Buyer shall not receive or assume any rights or obligations to accounts receivable of Seller other than as expressly set forth herein. Buyer shall collect accounts receivable on behalf of Seller for a period of sixty (60) days following Closing. • This obligation shall not require Buyer to undertake collection actions on behalf of Seller. Further, Buyer shall provide Seller with an accounting of all receipts Buyer collects on behalf of Seller, showing all amounts collected and all amounts Page 3 of 19 remaining due to Seller after sixty (60) days post Closing, which Buyer shall provide to . Seller no later than seventy-five (75) days after Closing. After said sixty (60) day period, Buyer shall not have any obligation to collect any accounts of behalf of Seller, but should Buyer receive any monies on Seller's accounts receivable, Buyer shall promptly turn over such sums to Seller. Buyer shall cooperate with Seller by indorsing any checks made payable to Buyer, but rightly due to Seller during or after the initial sixty (60) period post Closing. Buyer shall pay to Seller all amounts received on Seller's behalf under this Paragraph 5 within ten (10) days.of the receipt of such monies. In lieu of Buyer paying such funds to Seller, where such monies are received in the form of a check, Buyer shall indorse said check if required and provide such check to Seller within ten (10) days of Buyer's receipt of said check. C. Prepaid Accounts: Buyer shall pay to Seller, at Closing, such prorated portion of any obligations of the business prepaid by Seller for such period accounts are prepaid extending beyond the Closing Date. 6. WORK IN PROGRESS: At Closing, Seller shall assign all contracts for work in progress or otherwise listed on Exhibit "C" to Buyer. Buyer shall pay to Seller ten (10%) of the get profits of the works in progress listed on Exhibit "C". No percentage of any loss on works in progress shall be attributable to Seller. Buyer shall pay to Seller all profits allocable to Seller with respect to works in progress within ten (10) days of the receipt of the final fees for each project, but in no even later than one (1) year form the Closing Date, regardless of the status of work completion or collections of fees unless the customer fails or refuses to pay based upon an alleged defect in work performed by Seller or insolvency of the customer. The parties recognize that Seller has invested a significant amount of time and resources to acquire contracts relating to the construction of an ethanol plant currently scheduled to be located in Franklin County, Pennsylvania. If Buyer enters into a contract for work relating to said ethanol plant within one (1) year after the Closing Date, said contract shall be treated as a work in progress under the terms of this Agreement and Buyer shall pay to Seller ten percent (10%) of the net Page 4 of 19 profits to Buyer relating to such contract in addition to any other sums due to Seiler under this Agreement. With respect to the works in progress listed as Waste Management Building and Larry Jester Bin on Exhibit "C", Buyer shall first apply any sums due to Seller-under this Paragraph 6 to the clients' deposit, which is to be retained by Seller, and then, any amount due under this Paragraph 6 over and above the amount of the deposit shall be paid to Seller under the terms set forth above. The deposits on each project, retained by Seller, are: Waste Management Building: $37,000.00 Larry Jester Bin $20,000.00 7. CLOSING DATE: All of the transactions contemplated herein shall be consummated at the respective time and place as the parties hereto may mutually agree upon on or before March 3.1, 2006, unless otherwise extended in writing by agreement of the parties hereto (herein called "Closing Date" or "Closing"). Regardless of the specific Closing Date, the transaction contemplated hereunder shall be effective as of the first (l') day of March 2006. -8.. PURCHASE PRICE:. Buyer shall pay to Seller for the Assets the sum of five hundred and five thousand one hundred and fifty six and 00/100 Dollars ($505,156.00) plus ten percent (1011%) of the Gross Profits (as defined in subsection b.) of Buyer relating the business sold hereunder for a period of six (6) years after the Closing Date as set for the under subparagraph c and the prepaid amounts as set forth in subparagraph b below. below (herein called "Purchase Price"). The parties agree that the Purchase Price shall be paid in United States Dollars and be allocated in the manner set forth on the attached Exhibit "D", attached hereto and incorporated herein by this reference. The Purchase Price shall be paid as follows: a. . At Closing or within ten (10) days thereafter, Buyer shall tender to the Seller a sum of five hundred and five thousand one hundred and fifty six and 001100 Dollars ($505,156.00) to Seller via a bank check, attorney escrow check or other certified Page 5 of 19 funds, a part of which shall be paid directly to M&T Bank for the release of security interests in the Assets with the remainder being paid to Seller; and b. At Closing or within ten (10) days thereafter, Buyer shall tender to the Seller such prepaid amounts as are due under Paragraph 5. c.; and c. Buyer shall pay to Seller ten percent (10%) of Buyer's Gross Profits derived from the business sold hereunder for a period of six (6) years after the Closing Date. Buyer shall pay said Gross Profits to Seller within thirty (30) days of each anniversary of the Closing Date during the said six (6) year period. For the purposes of this Agreement, Gross Profits shall mean the gross profits -as shown on Buyer's tax return 9. CONDITION OF ASSETS AND RISK OF LOSS: Buyer asserts that it has had the opportunity to inspect the Assets prior to time of executing this Asset Purchase Agreement and acknowledges that the Assets are in a condition acceptable to Buyer. Seller does not warrant the condition of the Assets and the Assets are sold "AS IS", with no express or implied warranties thereon, including warranties of merchantability or fitness for a particular purpose, other than the manufacturers` warranties existing on such assets as of the date of Closing hereunder. Seller shall maintain the Assets in their present condition and state of repair between the date of this Agreement and the Closing Date, ordinary wear and tear alone excepted. Seller shall bear all risk of damage to or loss of the Assets until the Closing Date. After the Closing Date, Buyer shall bear all risk of damage to or loss of the Assets. 10. TAXES PAID: Seller shall comply with all provisions of the Pennsylvania Fiscal Code, as amended, in connection with its sale of the Assets to Buyer. Seller hereby covenants and agrees to pay any and all taxes due on a federal, state or local level as a result of this transaction and that any and all such taxes shall be solely the responsibility of the Seller. Seller also certifies that, to the best of its knowledge, all taxes which may result in any lien against the Assets, including any and all unemployment taxes, have been paid or will be paid Page 6 of 19 from the proceeds of this sale. In the event that any such taxes remain outstanding, the Seller shall promptly pay the same to the appropriate taxing authority and hereby agrees to indemnify and hold harmless the Buyer from any and all claims, judgments and liens as a result thereof. This warranty and representation shall survive the Closing for a period not to exceed six (6) years after the Closing Date. Further, Buyer shall have the right to set off any and all liabilities so imposed upon the Buyer against any amount(s) due or to become due from Buyer to Seller under the terms of this Agreement. 11. EMPLOYEES: a. Buyer shall enter into an employment contract with Galen Julius under terms mutually agreeable to Buyer and Galen Julius. b. Seller currently retains three (3) employees on disability, Chuck Freeburn, Walter Clegg and Robert Smith. These three disabled employees shall remain the responsibility of Seller after the Closing Date and until the following dates: Chuck Freeburn May 4, 2006 Walter Clege April 5, 2006 Robert Smith June 29, 2006 Notwithstanding the above dates, at any such time as Buyer may hire any of the above mentioned persons as an employee of Buyer, Buyer assume all responsibility for said person as an employee of Buyer. C. Pension Plans - Seller shall retain all responsibility for any pension plans in place for the benefit of Seller's employees which Seller shall administer in accordance with the terms and conditions of such plans. Buyer may elect to establish a pension plan for any of Buyer's employees, which plan shall be administered separate and apart from Seller's pension plans. Page 7 of 19 12. SELLER'S COVENANTS, REPRESENTATIONS AND WARRANTIES: Seller hereby covenants, represents and warrants to Buyer that to the best of Seller's knowledge, information and belief a. Seller is the sole owner of the Assets with full right and lawful authority to sell and deliver the same to Buyer hereunder, and the sale and delivery of the Assets to Buyer hereunder will not violate the rights or interests of any person or entity; b. Seller has not entered into any other agreement regarding the sale or transfer of any of the Assets which is still in effect; C. Seller is not involved as a debtor in any proceedings under any federal or state bankruptcy or insolvency laws; All of the covenants, representations and warranties of Seller set forth in this Agreement shall be deemed to have been made again by Seller at Closing and shall survive Closing for a period of six (6) years. 13. CONDITIONS PRECEDENT TO CLOSING - BUYER: Buyer's obligation to purchase and take the Assets from Seller and to comply with any other obligations imposed upon Buyer under this Agreement are conditioned and contingent upon the occurrence of each of the following events or existence of each of the following circumstances Seller's compliance with all the other terms and conditions of this Agreement which are to be performed or observed by it on or before the Closing Date. 14. CONDITION PRECEDENT TO CLOSING - SELLER: Seller's obligation to sell and deliver the Assets to Buyer and to comply with any other obligations imposed upon Seller under this Agreement is conditioned and contingent upon Buyer's compliance with all the Page 8 of 19 terms and conditions of this Agreement which are to be performed or observed by Buyer on or before the Closing Date. 16. CLOSING DOCUMENTS: a. Seller shall duly execute and deliver to Buyer the following documents and instruments at Closing: A Bill of Sale in form acceptable to Buyer and Seiler, which exhibit is incorporated herein by this reference, said document duly executed by Seller, transferring good and marketable title to the Assets to Buyer; 2. Such other documents and instruments as are reasonably requested by Buyer in connection herewith; 3. Minutes or Consent of Board of Directors of Seller authorizing all actions contemplated under the Sales Agreements. b. Buyer shall duly execute or cause to have executed and deliver to Seller the following documents and instruments at Closing: 1. Minutes or resolutions of the Board of Directors of Buyer authorizing all actions contemplated under the Sales Agreements; 2. All other documents required under the Sales Agreements; and 3. . Such other documents and instruments as are reasonably requested by Seller in connection herewith. . 16. OTHER DOCUMENTS: Seller and Buyer shall also deliver to each other, both before and after Closing; such other documents and instruments as may be reasonably required for the proper consummation of the transactions contemplated in this Agreement and for the proper ftdfillment of the covenants, representations and warranties contained in this Agreement. 17. INDEMNIFICATION AND SETOFF: Each party agrees to indemnify and hold harmless the other party for and from any and all liability or loss the other party may suffer Page 9 of 19 (including but not limited to court costs and reasonable attorney's fees) on account of a party's breach of any term, covenant, warranty or representation set forth herein or in any of the documents and instruments executed or delivered in connection herewith. All the terms, covenants, warranties and representations set forth herein shall survive Closing and the execution and/or delivery of any documents and/or instruments before, at or after Closing for a period of six (6) years. Further, Buyer shall have the right to set off any and all liabilities so imposed upon the Buyer against any amount(s) due or to become due from Buyer to Seller under the terms of this Agreement. 18. NOTICES: Any notice to be given hereunder shall be given in writing and delivered personally or by registered or certified mail, return receipt requested, postage prepaid, to the respective parties at the following locations: Seller: Marlin C. Fleming, President TAM. Systems,-Inc. 1248 South Mountain Road Dillsburg, PA 17109 Copy to : James D. Hughes, Esquire Salzmann Hughes, P.C. 354 Alexander Spring Road, Suite 1 Carlisle, PA 17013 Buyer: Leonard L. Lobaugh, Jr. 5 Logan Drive Gardners, PA 17324 Copy to: David A. Baric, Esquire O'Brien, Baric & Scherer 19 West South Street Carlisle, PA 17013 19. NO BROKER'S CONMSSION: Neither party hereto shall be liable for any broker's commission in connection with the transactions hereunder, and each party acimowledges Page 10 of 19 and represents to the other party that it has not had any dealings, negotiations or consultations with any broker concerning the transactions hereunder for which compensation is due. 20. CONFIDENTIALITY: All parties hereto agree that all of the terms and conditions of this Agreement shall remain confidential and shall only be relayed to the parties hereto or their duly appointed representatives to the extent that such terms and conditions are not considered public knowledge or a part of the public domain or as necessary to enforce the terms of this Agreement. 21. WAIVER - CONFLICT OF INTEREST: In order to retain a certain continuity of knowledge and experience with the business to be sold hereunder with respect to legal representation, the parties recognize that Buyer has been a party to discussion with Seller and Seller's counsel, Salzmann Hughes, P.C., who has also assisted Buyer with other legal matter prior to the execution of this Agreement. Buyer and Seller acknowledge that Salzmann Hughes, P.C. has been the legal counsel for Seller, has represented Seller during the course of this transaction, and the possibility that a conflict of interest could exist. Buyer and Seller hereby waive any and all conflict of interest on the part of Salzmann Hughes, P.C. with regard to any prior representation of Buyer and current representation of Seller in this transaction. Buyer specifically recognizes that Salzmann Hughes, P.C. represents the Seller during the course of the transaction contemplated under this Agreement and does not represent Buyer for that purpose. 22. SEVERABILITY: Any provision of this Agreement which is invalid or unenforceable in any jurisdiction or under any circumstance shall be ineffective to the extent of such invalidity or unenforceability only without invalidating or rendering unenforceable the remaining provisions hereof in such jurisdiction or under such circumstances, and any such invalidity or unenforceability shall not invalidate or render unenforceable such provision in any other jurisdiction or under any other circumstances. Page 11 of 19 23. COOPERATION: Subject to the terms. and conditions hereof, each of the parties hereto shall use its best efforts to take, or cause to be taken, such action, to execute and deliver, or cause to be executed and delivered, such additional documents and instruments and to do, or cause to be done, all things necessary, proper or advisable under the provisions of this Agreement and under applicable law to consummate and make effective the transactions and undertakings contemplated by this Agreement and to vest in Buyer all right, title and interest in and to the Assets or Inventory, whether at or after the Closing. 24. BULK SALES LAW COMPLIANCE: The parties hereto expressly waive compliance with the provisions of the Pennsylvania Bulk Sales Law, and the Seller shall indemnify and hold the Buyer harmless from and against any and all liabilities imposed upon the Buyer resulting from such non-compliance, other than with respect to the Liabilities assumed by the-Buyer pursuant to this Agreement. Further, Buyer shall have the right to set off any and all liabilities so-imposed upon the Buyer against any amount(s) due or to become due from Buyer to Seller under the terms of this Agreement. 25. ASSIGNMENT. This Agreement shall not be assignable by the Seller without the prior written consent of Buyer. The Buyer shall have the right at any time prior to Closing to assign this Agreement to its nominee without obtaining the Seller's consent provided however that any such assignment shall only be effective if it is assigned to an entity which is owned at least filly-one percent (51%) by Leonard L. Lobaugh, Jr.. In all other cases, this Agreement shall not be assignable by Buyer without the prior written consent of Seller. To the extent assignable, this Agreement shall be binding upon, and inure to the benefit of the Buyer and its successors and assigns and the Seller and its successors and assigns. 26. NAME RIGHTS: At Closing, Seller shall execute and deliver to Buyer a consent to Buyer's appropriation of the name "TAM SYSTEMS", which Seller shall not grant to anyone other than Buyer prior to, at or after Closing, but which name Seller shall continue to use until such time as Seller has completed the process of winding up and dissolving Seller Page 12 of 19 corporation. Seller shall move promptly after Closing to wind up and dissolve. Seller shall not have the right to continue operating the corporation as providing construction services or materials to the public, except as permitted under Paragraph 27 below, after the Closing and Seller shall not do so. At such time as Seller dissolves as a corporate entity, Seller shall consent to the appropriation of exclusive rights to the name "TAM SYSTEMS" to Buyer and Seller shall prepare and deliver to Buyer any reasonably required documentation of said consent. 27. NON-COMPETITION: For a period of six (6) years from the date of closing, Seiler and Marlin C. Fleming agree they will not operate, own, work for or have any affiliation with any business which offers substantially the same services or materials or could be said to compete with Buyer within two hundred (200) miles of Dillsburg, Pennsylvania. Notwithstanding any other provision in this Agreement to the contrary, nothing in this Agreement shall prohibit Seller from selling any and all assets presently owned of Seller not being purchased by Buyer hereunder, whether or not such sale competes directly or indirectly with Buyer. 28. NUSCELLANEOUS: This Agreement shall be construed under and governed by the laws of the Commonwealth of Pennsylvania. This Agreement constitutes the entire agreement between the parties with respect to the sale and transfer of the Assets and Inventory, and there are no agreements, conditions or understandings, either oral or written, between Seller and Buyer relating to these matters other than those which are contained in this Agreement. For the purposes of interpreting this Agreement, the masculine shall include the feminine and neuter, and vice versa, and the singular shall include the plural, and vice versa, unless contrary intent appears. The subject headings of the paragraphs of this Agreement are included for the purpose of convenience only and shall in no way affect the meaning or construction of any term or provision hereof. The above WHEREAS clauses and the attached Exhibits are integral and substantive parts of this Agreement and are hereby incorporated herein by reference. This Agreement shall inure to the benefit of and shall be binding upon each of the parties hereto and their respective heirs, executors, administrators, successors and assigns. This Agreement may be Page 13 of 19 altered or amended only by a written agreement signed by both Seller and Buyer. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. IN WITNESS WHEREOF, and intending to be legally bound, the parties hereto formally execute this Agreement of Sale as of the day and year first above written. SELLER ATTEST: TAM.SYSTEMS, INC. BY= (SEAL) *rlln C. Fuming, 1dent WITNESS: (SEAL) arti -n BUYER A . ST: L CUBED CORPORATION d L. gh, Jr ej4AL) nar Page 14 of 19 VERIFICATION I have read the statements made in this document and they are true and correct to the best of my knowledge, information and belief. I understand that false statements herein made are subject to the penalties of 18 Pa.C.S.A. § 4904, relating to unsworn falsification to authorities. TAM SYSTEMS, INC. By: arlin Fleming, President Date: z6/-J ?o p Q RT 7r l ' _? _ { = Op 'NOT ?• v C"a, ?- qa a3 q u? ?' FILL=C~-,lrr'r;~ roc TI-'~ ,. 2Q l a Jf~ d 15 P~ 2~ ~ 5 _.,. TAM SYSTEMS, INC., IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PA Plaintiff v. L CUBED CORPORATION d/b/a : TAM SYSTEMS, LENARD L. LOBAUGH JR. AND MARTIN M. SACKS & ASSOCIATES : CIVIL ACTION -LAW NO. 09-8336-CV JURY TRIAL DEMANDED Defendants PRELIMINARY OBJECTIONS OF DEFENDANT MARTIN M. SACKS & ASSOCIATES IN RESPONSE TO COMPLAINT Defendant Martin M. Sacks & Associates ("Sacks"), by and through its undersigned counsel, Marshall, Dennehey, Warner, Coleman & Goggin, respectfully submits these Preliminary Objections in response to Plaintiffs Complaint, and in support thereof states the following: 1. Plaintiff commenced this action by filing a Complaint on December 2, 2009. 2. Plaintiff has consented to an extension of time up through and including January 15, 2010 within which Sacks may respond to the Complaint. Accordingly, these objections are timely. 3. The pertinent facts as alleged in the Complaint, when viewed in a light most favorable to Plaintiff, are as follows: a. Until March 1, 2006, Plaintiff operated a construction business in Dillsburg, PA, owning certain assets, both tangible and intangible, good will and contracts for business, see Plaintiffs Complaint, ¶5; b. On March 1, 2006, Plaintiff and Defendant L Cubed Corporation ("L Cubed") conducted a settlement on the sale of the business from Plaintiff to L Cubed, see id., ¶6; c. The sale of the business was in the form of an asset sale, including good will and the right to operate under the name TAM Systems, see id., ¶7; d. Prior to the March 1, 2006 settlement, Plaintiff and L Cubed negotiated the terms of an Asset Purchase Agreement, setting forth the terms and conditions of the asset sale, see id., ¶9; e. The Asset Purchase Agreement, in pertinent part, provided that as part of the purchase price for the business, L Cubed would pay Plaintiff an amount based upon the gross profits of the business, see id., ¶11; f. Specifically, L Cubed agreed to pay Plaintiff 10% of its gross profits derived from the business for a period of six years after the March 1, 2006 closing date, as shown on L Cubed's tax returns, see id.; g. L Cubed filed an amended tax return for 2006 utilizing the full absorption accounting method, reporting a gross profit of $546,898.00, see id., ¶¶31-33; h. L Cubed filed a tax return for 2007 utilizing the full absorption accounting method, reporting a gross profit of $438,487.00, see id., ¶¶39-40; and i. L Cubed filed a tax return for 2008 utilizing the full absorption accounting method, reporting a gross profit of $901,786, see id., ¶¶41-43. 2 4. The only s ecific factual alle ations set forth in the Complaint, as they relate or pertain to Sacks, viewed in a light most favorable to Plaintiff, are the following: a. Sacks is an accounting firm which maintains offices in Harrisburg, PA, see Plaintiff s Complaint, ¶4; b. During the time period March 2006 to present, Sacks provided accounting services to L Cubed, including the preparation of L Cubed's federal tax returns for 2006, 2007 and 2008, see id., ¶¶91, 99; c. Sacks provided L Cubed with the recommendation that switching to the full absorption accounting method would result in a lower gross profit being reported on L Cubed's federal tax return, see id., ¶92; d. Sacks had knowledge of the terms of the Asset Purchase Agreement with respect to L Cubed's gross profits at the time it provided L Cubed with the aforedescribed recommendation, see id., ¶93; e. Sacks advised L Cubed that switching to the full absorption accounting method would reduce its obligation to Plaintiff under the Asset Purchase Agreement, see id., ¶100; f. Sacks acted with the intent to assist L Cubed's attempt to lower the payments due to Plaintiff under the Asset Purchase Agreement, see id., ¶94; and g. Sacks prepared and filed L Cubed's 2006 amended return, 2007 return and 2008 return utilizing an accounting method specifically chosen to reduce the amounts owed to Plaintiff under the Asset Purchase Agreement, see id., ¶101. 5. The gravamen of Plaintiffs Complaint appears to be that L Cubed knowingly switched from utilizing the standard cost accounting method to the full absorption accounting 3 method in connection with preparing its 2006, 2007 and 2008 tax returns solely for the purpose of reducing the amount owed to Plaintiff under the terms of the Asset Purchase Agreement. 6. Plaintiffs claims against L Cubed and its principal, Defendant Lenard L. Lobaugh, Jr., sound in breach of contract, unjust enrichment, quantum meruit, civil conspiracy, as well as for declaratory relief. 7. Plaintiffs Complaint also sets forth two separate causes of action against Sacks: tortious interference with existing contractual relationship (Count IV) and civil conspiracy (Count V). PRELIMINARY OBJECTION IN THE NATURE OF A DEMURRER AS TO COUNT IV OF PLAINTIFF'S COMPLAINT - PA. R.C.P 1028(A)(4) 8. When considering a preliminary objection to a complaint in the nature of a demurrer, the court's review is limited to the content of the pleading. In re Adoption of S.P.T., 783 A.2d 779, 782 (Pa. Super. 2001). 9. In determining whether a demurrer should be sustained and the complaint dismissed, the question presented is "whether, on the facts averred, the law says with certainty that no recovery is possible." Commonwealth v. Locust Twp , 968 A. 2d 1263, 1269 (Pa. 2009). In deciding the demurrer, a court must consider as true every well-pleaded material fact set forth in the complaint, as well as all inferences reasonably deducible from those facts. Ibid. A demurrer does not admit the pleader's conclusions of law, however. Ibid. 10. When the complaint shows on its face that the claim is devoid of merit, the demurrer should be sustained. Ibid. 11. As noted above, Count IV of Plaintiffs Complaint purports to set forth a claim for tortious interference against Sacks. 4 12. To sustain a cause of action for tortious interference, a plaintiff must demonstrate that: (1) there is an existing contractual relationship between the plaintiff and a third party; (2) the defendant interfered with the performance of that contract by inducing a breach or otherwise causing the third party not to perform; (3) the defendant was not privileged to act in this manner; and (4) the plaintiff suffered pecuniary loss as a result of the breach of contract. Al Hamilton Contracting Co. v. Cowder, 434 Pa. Super. 491, 498, 644 A.2d 188 (Pa. Super. 1994) (citations omitted). 13. Further, one who intentionally causes a third person not to perform a contract with another does not interfere improperly with the other's contractual relation by giving the third person truthful information. Geyer v. Steinbronn, 351 Pa. Super. 536, 553, 506 A.2d 901 (Pa. Super. 1986) (citing Restatement (Second) of Torts §772)). 14. Plaintiffs tortious interference claim against Sacks fails as a matter of law for the following reasons: a. The Asset Purchase Agreement did not prohibit L Cubed's use of the full absorption accounting method for purposes of preparing its federal income tax returns, and thus Sacks' recommendation to L Cubed to utilize that particular method did not induce L Cubed to breach any terms of the Asset Purchase Agreement or cause L Cubed not to perform under the Asset Purchase Agreement; b. Sacks was privileged to provide L Cubed, its client, with accounting advice concerning the use of the full absorption accounting method for purposes of preparing its federal income tax returns; and 5 c. Plaintiff does not allege that Sacks provided L Cubed with untruthful information or advice concerning the use of the full absorption accounting method for tax reporting purposes. 15. In light of the foregoing, Sacks' demurrer should be sustained, and Count IV of the Complaint should be dismissed in its entirety, with prejudice and without leave to amend. PRELIMINARY OBJECTION IN THE NATURE OF A DEMURRERR AS TO COUNT V OF PLAINTIFF'S COMPLAINT - PA RCP 1028(A)(4) 16. As noted above, Count V of Plaintiffs Complaint purports to set forth a claim for civil conspiracy against Sacks, L Cubed and Lobaugh. 17. The apparent basis for this claim, as it pertains to Sacks, is that Sacks allegedly conspired with L Cubed and "acted for the common purpose" of breaching the Asset Purchase Agreement by "artificially" lowering L Cubed's reported gross profits for 2006, 2007 and 2008 by utilizing the full absorption method. See Plaintiffs Complaint, ¶102. 18. To state a claim for civil conspiracy, a plaintiff must allege (1) a combination of two or more persons acting with a common purpose to do an unlawful act or do a lawful act by unlawful means or for an unlawful purpose; (2) an overt act done in pursuance of the common purpose; and (3) actual legal damage. Goldstein v. Phillip Morris Inc , 854 A.2d 585, 590 (Pa. Super. 2004). 19. Further, when stating a claim for conspiracy, a plaintiff may not merely make conclusory allegations of conspiracy. Grose v. Proctor & Gamble Paper Prods , 866 A.2d 437, 441 (Pa. Super. 2005). Rather, only allegations which are particularized, such as those alleging the period of the conspiracy, the object of the conspiracy, and actions taken in furtherance of the conspiracy will be deemed sufficient. Ibid. 6 20. Moreover, "absent a civil cause of action for a particular act, there can be no cause of action for civil conspiracy to commit that act." McKeeman v. Corestates Bank N A , 2000 PA Super 117, 751 A. 2d 655, 660 (Pa. Super. 2000). 21. In addition, malice is an essential part of a conspiracy. "The mere fact that two or more persons, each with the right to do a thing, happen to do that thing at the same time is not by itself an actionable conspiracy." Burnside v. Abbott Laboratories., 351 Pa. Super. 264, 505 A. 2d 973, 980 (Pa. Super. 1985). 22. Plaintiffs civil conspiracy claim against Sacks fails as a matter of law for the following reasons: a. Sacks, in its capacity as agent of L Cubed, is legally incapable of conspiring with L Cubed, its principal, within the context of providing accounting advice to L Cubed; b. Plaintiff has failed to plead sufficient facts giving rise to any particular cause of action against Sacks, and thus there can be no cause of action for civil conspiracy; c. The mere fact that Sacks recommended that L Cubed utilize the full absorption method for tax preparation purposes, and that L Cubed in fact utilized the particular method in the preparation of its 2006 (amended), 2007 and 2008 returns ,which method was not prohibited under the Asset Purchase Agreement, is not by itself an actionable conspiracy; and d. Plaintiff has failed to plead particularized allegations sufficient to sustain the conspiracy claim. 23. In light of the foregoing, Sacks' demurrer should be sustained, and Count V of the Complaint should be dismissed as it pertains to Sacks, with prejudice and without leave to amend. 7 WHEREFORE, Defendant Martin M. Sacks & Associates respectfully requests that this Honorable Court sustain its preliminary objections and dismiss Count IV and V of Plaintiffs Complaint. Respectfully submitted, MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN By: ~ ~ Arthur W. efco, Esquire PA Id. No. 12909 1845 Walnut Street Philadelphia, PA 19103 (215) 575-2588 awlefco cr,mdwcg.com By: ~ Christop r J. Conrad, E wire PA Id. o. 202348 4200 Crums Mill Road, Suite B Harrisburg, PA 17112 (717) 651-3531 cjconrad(a~mdwc .com O 1 /5487401.v 1 8 CERTIFICATE OF SERVICE The undersigned, as counsel for Defendant Martin M. Sacks and Associates, hereby certifies that a copy of the foregoing Preliminary Objections was served via United States Mail, postage prepaid, on the `-~. .day of January 2010, upon the following counsel of record: David H. Martineau, Esquire John H. Pietrzak, Esquire Salzmann Hughes, PC Reager & Adler, PC 354 Alexander Spring Road, Suite 1 2331 Market Street Carlisle, PA 17015 Camp Hill, PA 17011 Respectfully submitted, MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGG~I~N BY~ ~-~~J/lJ,~.~i~/~ CHRISTOPHER J. CONRAD, ESQUIRE Pa. I.D. No. 02348 4200 Crums Mill Road, Suite B Harrisburg, PA 17112 (717)651-3531 Attorneys for Defendant Martin M. Sacks and Associates 9 TAM SYSTEMS, INC., ; Plaintiff v. L CUBED CORPORATION d/b/a TAM SYSTEMS, LENARD L. LOBAUGH JR. AND MARTIN M. SACKS & ASSOCIATES IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PA CIVIL ACTION -LAW NO. 09-8336-CV JURY TRIAL DEMANDED Defendants ORDER SUSTAINING PRELIMINARY OBJECTIONS OF DEFENDANT MARTIN M. SACKS & ASSOCIATES IN RESPONSE TO COMPLAINT AND NOW, this day of 2010, upon consideration of the Preliminary Objections and supporting brief submitted on behalf of Defendant Martin M. Sacks & Associates ("Sacks") in response to the Complaint, and Plaintiff s opposition thereto, it is hereby ORDERED that the Preliminary Objections are SUSTAINED, and Counts IV and V of Plaintiffs Complaint, as they pertain to Sacks, are hereby DISMISSED, with prejudice and without leave to amend. BY THE COURT: J. G4~A(. PRAECIPE FOR LISTING CASE FOR ARGUMENT ~ ~-f~?~~nT,.~y (Must be typewritten and submitted in duplicate) 2~~~ J/~~~ ~ P1~ 2~ 4 5 TO THE PROTHONOTARY OF CUMBERLAND COUNTY: (List the within matte~¢rij~;R_he next Argument -~, court.) ~ ,~,~1; J CAPTION OF CASE (entire caption must be stated in full) TAM SYSTEMS, INC. Plaintiffs vs. L CUBED CORPORATION D/B/A TAM SYSTEMS, LENARD L. LOBAUGH, JR. AND MARTIN M. SACKS & ASSOCIATES. Defendants. No. 09-8336 Term 1. State matter to be argued (i.e., plaintiffs motion for new trial, defendant's demurrer to complaint, etc.): Defendant Martin M. Sacks & Associates' Preliminary Objections 2. Identify all counsel who will argue cases: (a) for plaintiffs: David H. Martineau. Esquire 354 Alexander Spring Road, Suite 1 Carlisle PA 17015 (Name and Address) (b) for defendants: Arthur W. Lefco, Esquire 1845 Walnut Street Philadelphia PA 19103 (Name and Address) 3. I will notify all parties in writing within two days that this case has been listed for argument. 4. Argument Court Date: February 17 2010 Signature ARTHUR W. LEFCO, ESQUIRE Print your name / l~ /1 v Attorney for Martin M. Sacks & Associates Date: _ l / 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. CA~AL PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and submitted in triplicate) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: (List the within matter for t~e neff_' Argument Court.) - ° --------------------: ~ ~ ~ . y-~. CAPTION OF CASE "= (entire caption must be stated in full) `~.~ ~': TAM Systems, Inc. '~_ ~- ~' °y :' ' ra vs. - L Cubed Corporation d/b/a ~ ~'' r, TAM Systems, Inc., Leonard Lobaugh, Jr. and Martin M. Sacks & Assoc. No 8336 2009 Term ''; i ~~ '" ; ~ -, ; i .~, ~-- ---~ ,..~,.,• :~ 1. State matter to be argued (i.e., plaintiffs motion for new trial, defendant's demurrer to complaint, etc.): Defendants L Cubed and Leonard Lobaugh's Preliminary Objections 2. Identify all counsel who will argue cases: (a) for plaintiffs: David H. Martineau, Esq., Salzmann Hughes (Name and Address) 354 Alexander Spring Road, Suite 1, Carlisle, PA 17015 (b) for defendants: John H. Pietrzak, Esquire, Reager & Adler, P.C., 2331 (Name and Address) 2331 Market Street, Camp Hill, PA 17011 3. I will notify all parties in writing within two days that this case has been listed for argument. 4. Ar ument Court Date: Fe~ruarv 17, 2010 Print your name Defendants L Cubed Corp. and Leonarc January 22, 2010 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. John H. Pietrzak, Esquire TAM SYSTEMS, INC., Plaintiff v. L CUBED CORPORATION, d/b/a TAM SYSTEMS, LEONARD L. LOBAUGH, JR. and MARTIN M. SACKS & ASSOCIATES Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSY~,VA~IA `~ r- -:, ~~ ---~ . --~ CIVIL ACTION ~~~ . =~ r- ~:,: .-. ~ _ .. ,~_; NO. 09-8336 CIVIL TERM IN RE: DEFENDANTS' PRELIMINARY OBJECTIONS TO PLAINTIFF'S COMPLAINT BEFORE OLER and EBERT, JJ. ORDER OF COURT AND NOW, this 30~' day of April, 2010, upon consideration of the preliminary objections filed on behalf of Defendants, following oral argument held on February 17, 2010, and for the reasons stated in the accompanying opinion, it is ordered and directed as follows: 1. Defendants L Cubed Corporation and Leonard L. Lobaugh, Jr.'s Preliminary Objections to Plaintiffs Complaint, are granted in part and denied in part. The demurrers relating to Plaintiffs' claims against Leonard L. Lobaugh, Jr., at Count I for breach of contract, at Count II for Unjust Enrichment, and at Count III for Quantum Meruit are granted, these Counts are dismissed as to Defendant Lobaugh, and the preliminary objections are otherwise denied. 2. The Preliminary Objections of Defendant Martin M. Sacks & Associates in Response to Complaint are denied; and 3. Defendants are afforded a period of 20 days from the date of this order to file an answer to the surviving claims of Plaintiff. David H. Martineau, Esquire Salzmann Hughes P.C. 3 54 Alexander Spring Road Suite 1 Carlisle, PA 17015 Attorney for Plaintiff Arthur W. Lefco, Esquire Christopher J. Conrad, Esquire Marshall, Dennehey, Warner, Coleman & Goggin 1845 Walnut Street Philadelphia, PA 19103 Attorney for Defendant Martin M. Sacks & Associates / l iieodore A. Adler, Esquire John H. Pietrzak, Esquire Reager & Adler P.C. 2331 Market Street Camp Hill, PA 17011 Attorneys for Defendants L Cubed Corporation and Leonard L. Lobaugh 1r. eo ~ ~s ,-n.~,~~c s/s f ~v rYl BY THE COURT, TAM SYSTEMS, INC., Plaintiff v. L CUBED CORPORATION, d/b/a TAM SYSTEMS, LEONARD L. LOBAUGH, JR. and MARTIN M. SACKS & ASSOCIATES, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION NO. 09-8336 CIVIL TERM IN RE: DEFENDANTS' PRELIMINARY OBJECTIONS TO PLAINTIFF'S COMPLAINT BEFORE OLER and EBERT, JJ. ORDER OF COURT OLER, J., Apri130, 2010. In this civil action, Plaintiff, TAM Systems, Inc., has brought suit against L Cubed Corporation, d/b/a TAM Systems, Leonard L. Lobaugh Jr., individually, and Martin M. Sacks & Associates, arising out of a contract entered into between Plaintiff and Defendant L Cubed Corporation.l For disposition at this time are preliminary objections filed on behalf of Defendants L Cubed Corporation and Leonard L. Lobaugh, Jr.,2 and preliminary objections filed on behalf of Defendant Martin M. Sacks & Associates to Plaintiff s complaint.3 For the reasons stated in this opinion, the preliminary objections of Defendants L Cubed Corporation and Leonard L. Lobaugh will be granted in part and denied in part, and the preliminary objections of Defendant Martin M. Sacks & Associates will be denied. STATEMENT OF FACTS ~ Plaintiff s Complaint, filed December 2, 2009. z Defendants L Cubed Corporation and Leonard L. Lobaugh, Jr.'s Preliminary Objections to Plaintiffls Complaint, filed January 19, 2010. s Preliminary Objections of Defendant Martin M. Sacks & Associates in Response to Complaint, filed January 15, 2010. The allegations of Plaintiff's complaint may be summarized as follows: Plaintiff TAM Systems, Inc. (hereinafter "TAM Systems") is a Pennsylvania corporation with its principal place of business at 1250 South Mountain Road, Dillsburg, York County, Pennsylvania.4 Defendant L Cubed Corporation d/b/a TAM Systems (hereinafter "L Cubed") is a Pennsylvania corporation with its principal place of business at 1248 South Mountain Road, Dillsburg, York County, Pennsylvania.5 Defendant Leonard L. Lobaugh, Jr. (hereinafter "Lobaugh") is an adult individual who at all times relevant to the action has been the President of L Cubed.6 Defendant Martin M. Sacks & Associates (hereinafter "Sacks") is a Pennsylvania accounting firm with its principal place of business at 4775 Linglestown Road, Harrisburg, Dauphin County, Pennsylvania. On March 1, 2006, TAM Systems entered into a contract for the sale of part of its business to L Cubed.g The transaction was in the form of an asset sale in which L Cubed purchased the assets, goodwill and right to operate under the name of TAM Systems.9 Paragraph 8(c) of the Asset Purchase Agreement read: Buyer [L Cubed] shall pay to Seller [TAM Systems] ten percent (10%) of Buyer's Gross Profits derived from the business sold hereunder for a period of six (6) years after the closing date. Buyer shall pay said Gross Profits to seller within thirty (30) days of each anniversary of the Closing Date during the said (6) year period. For the purposes of this Agreement, Gross Profits shall mean the gross profits as shown on Buyer's tax return.lo As of the closing date, all financial records were being maintained using a standard cost accounting system." In 2006, for the first year of the contract, a tax return a Plaintiff s Complaint, ¶1, filed December 2, 2009. 5 Plaintiff's Complaint, ¶2, filed December 2, 2009. 6 Plaintiffls Complaint, ¶3, filed December 2, 2009. Plaintiff's Complaint, ¶4, filed December 2, 2009. s Plaintiff's Complaint, ¶6, filed December 2, 2009. 9 Plaintiff's Complaint, ¶7, filed December 2, 2009. 10 Plaintiff's Complaint, ¶11, filed December 2, 2009. 11 Plaintiffls Complaint, ¶17, filed December 2, 2009. 2 was filed using the standard cost accounting system.12 Based upon a gross profit of $1,362,375.00, L Cubed owed TAM Systems $136,237.50 under the terms of the Asset Purchase Agreement.13 L Cubed refused to pay any money due under the Asset Purchase Agreement,14 and instead filed an amended tax return utilizing the full absorption accounting method.15 This decreased L Cubed's gross profit to $546,898.16 L Cubed maintained this accounting practice through subsequent years; however, at no time has L Cubed paid any money to TAM Systems due under the Asset Purchase Agreement, even as due under its altered accounting practices." Defendant Lobaugh, while acting in his capacity as President of Defendant L Cubed, conspired with Defendant Sacks to artificially lower the revenue earned by Defendant L Cubed by using the full absorption accounting method instead of the standard accounting method.18 Defendant Sacks, at all times relevant, provided accounting services to Defendant L Cubed.19 Defendant Sacks provided, advised and assisted Defendant L Cubed in changing its accounting methods for the purpose of reducing the amount owed to Plaintiff under the sales agreement.20 Plaintiff brought suit in five counts against Defendants individually and collectively, including (1) Breach of Contract against Defendants L Cubed and Lobaugh (Count I), (2) Unjust Enrichment against Defendants L Cubed and Lobaugh (Count II), (3) Quantum Meruit against Defendants L Cubed and Lobaugh (Count III), (4) Tortious Interference with Existing Contractual Relationship against Defendant Sacks (Count IV), 12 Plaintiff s Complaint, ¶25, filed December 2, 2009. 13 Plaintiff's Complaint, ¶25, filed December 2, 2009. 14 Plaintiff's Complaint, ¶28, filed December 2, 2009. 15 Plaintiff's Complaint, ¶31, filed December 2, 2009. 16 Plaintiff's Complaint, ¶33, filed December 2, 2009. "Plaintiff's Complaint, ¶39-46, filed December 2, 2009. 'g Plaintiff's Complaint, ¶31-38, 100-103, filed December 2, 2009. 19 Plaintiff's Complaint, ¶99, filed December 2, 2009. 20 Plaintiff's Complaint, ¶100-102, filed December 2, 2009. 3 and (5) Civil Conspiracy against all Defendants (Count V).21 Plaintiff also is seeking a declaratory judgment against Defendant L Cubed that "Gross Profits" must be calculated for tax years 2009-2012 using standard accounting practices (Count VI).22 For disposition at this time are various preliminary objections of Defendants to Plaintiff s complaint. Defendants L Cubed and Lobaugh have filed four preliminary objections which may be summarized as follows.23 Their first preliminary objection, in the nature of a demurrer, asserts that Plaintiff, in Counts I, II, III and V of its complaint, has failed to allege facts necessary to support a conclusion that Leonard L. Lobaugh, Jr., is individually liable on those claims.24 Defendants' second preliminary objection, in the nature of a demurrer, asserts that Plaintiff, in Count I of its complaint, has failed to allege facts necessary to support a conclusion that L Cubed breached the Asset Sales Agreement in its utilization of a full absorption accounting method.25 Defendants' third preliminary objection, in the nature of a demurrer, asserts that Plaintiff, in Counts II and III of its complaint, has failed to state a cause of action for unjust enrichment or quantum meruit.26 Defendants' fourth preliminary objection, in the nature of a demurrer, asserts that Plaintiff, in Count V of its complaint, is foreclosed from bringing a cause of action for civil conspiracy, as the gist of the action doctrine precludes a contract claim from being raised as a tort claim.27 21 Plaintiff's Complaint, filed December 2, 2009. 22 Plaintiff's Complaint, filed December 2, 2009. zs Defendants L Cubed Corporation and Leonard L. Lobaugh, Jr.'s Preliminary Objections to Plaintiff's Complaint, filed January 19, 201. za Defendants L Cubed Corporation and Leonard L. Lobaugh, Jr.'s Preliminary Objections to Plaintiff's Complaint, filed January 19, 2010 zs Defendants L Cubed Corporation and Leonard L. Lobaugh, Jr.'s Preliminary Objections to Plaintiff's Complaint, filed January 19, 2010 z6 Defendants L Cubed Corporation and Leonard L. Lobaugh, Jr.'s Preliminary Objections to Plaintiff's Complaint, filed January 19, 2010 27 Defendants L Cubed Corporation and Leonard L. Lobaugh, Jr.'s Preliminary Objections to Plaintiff's Complaint, filed January 19, 2010 4 Defendant Sacks has filed two preliminary objections, which may be summarized as follows.Zg Defendant's first preliminary objection, in the nature of a demurrer, asserts that Plaintiff, in Count IV of its complaint, has failed to state a cause of action for tortious interference, because Sacks was justified in recommending that its client utilize the full absorption accounting method, a technique that was not prohibited under the Asset Sales Agreement.29 Defendant's second preliminary objection, in the nature of a demurrer, asserts that Plaintiff, in Count V of its complaint, has failed to state a cause of action for civil conspiracy.30 Argument was held on February 17, 2010, relating to Defendants' preliminary objections. DISCUSSION A preliminary objection to a complaint in the nature of a demurrer is appropriate where the complaint is legally insufficient to sustain a cause of action recognized by law. Pa. R.C.P. 1028(a)(4). Preliminary objections in the nature of a demurrer require the court to resolve the issues solely on the basis of the challenged pleading; in general, no testimony or other evidence outside of the pleading may be considered to dispose of the legal issues presented by the demurrer. Cooper v. Church of St. Benedict, 2008 PA Super 171, ¶2, 954 A.2d 1216, 1218 (2008), citing Hess v. Fox Rothschild, LLP, 2007 PA Super 133, ¶18, 925 A.2d 798, 805, appeal denied, 596 Pa. 733, 945 A.2d 771 (2008). When considering a demurrer to a complaint, the court must accept all material facts set forth in the complaint, as well as all inferences reasonably deducible therefrom, as admitted and true and decide whether, based on the facts averred, recovery is impossible as a matter of law. Wagner v. Waitlevertch, 2001 PA Super 100, ¶6, 774 A.2d 1247, 1250, citing Wiernik v. PHH U.S. Mortg. Corp., 1999 PA Super 193, 736 A.2d 28 Preliminary Objections of Defendant Martin M. Sacks & Associates in Response to Complaint, filed January 15, 2010. z9 Preliminary Objections of Defendant Martin M. Sacks & Associates in Response to Complaint, filed January 15, 2010. 3o Preliminary Objections of Defendant Martin M. Sacks & Associates in Response to Complaint, filed January 15, 2010. 5 616, appeal denied, 561 Pa. 700, 751 A.2d 193 (2000). "A demurrer admits every well- pleaded material fact set forth in the pleadings to which it is addressed as well as all inferences reasonably deducible therefrom, but not conclusions of law." Wicks v. Milzoco Builders, Inc., 503 Pa. 614, 623, 470 A.2d 86, 91 (1983). A demurrer should be sustained only if, after the averments of the complaint are assumed to be true, the plaintiff has failed to assert a legally cognizable cause of action and, therefore, cannot prevail. Lerner v. Lerner, 2008 PA Super 183, ¶11, 954 A.2d 1229, 1234, citing Kramer v. Dunn, 2000 PA Super 101, ¶18, 749 A.2d 984, 990. The general rule in Pennsylvania is that "whenever a corporation makes a contract, it is the contract of the legal entity of the artificial being created by the charter, and not the contract of the individual members." Wicks v. Milzoco Builders, Inc., 503 Pa. 614, 620, 470 A.2d 86, 89 (1983). Pennsylvania recognizes two means by which individuals may be held liable for actions of a corporation: by way of a piercing of the corporate veil and pursuant to the participation theory. Nordi v. Keystone Health Plan West Inc., 2010 PA Super 11, ¶20, - 989 A.2d 376, 384. Where the court pierces the corporate veil, the owner is liable because the corporation is not a bona fide independent entity; therefore, its acts are truly his. Under the participation theory, the court imposes liability on the individual as an actor rather than as an owner. Such liability is not predicated on a finding that the corporation is a sham and a mere alter ego of the individual corporate officer. Instead, liability attaches where the record establishes the individual's participation in the tortious activity. **** The general, if not universal, rule is that an officer of a corporation who takes part in the commission of a tort by the corporation is personally liable therefore; but that an officer of a corporation who takes no part in the commission of the tort committed by the corporation is not personally liable to third persons for such a tort, nor for the acts of other agents, officers or employees of the corporation in committing it, unless he specifically directed the particular act to be done or participated, or cooperated therein. Id. (citations omitted). 6 The prevailing view in Pennsylvania case law is that the participation theory is applicable to claims sounding in tort, and not contract. See Nordi v. Keystone Health Plan West Inc., 2010 PA Super 11, 989 A.2d 326; Parker Oil Co. v. Mico Petrol and Heating Oil, LLC., 2009 PA Super 105, 979 A.2d 854; Com. ex rel. Corbett v. Manson, 903 A.2d 69 (Pa. Cmwlth 2006). A minority view suggests that the participation theory can be applied in contract cases. See First Realvest, Inc. v. Avery Builders, Inc., 410 Pa. Super 572, 600 A.2d 601 (1991) (stating that "[s]hareholders, officers and directors are not held liable for the corporation's breach of contract, absent an establishment of the participation theory ...." This view has been utilized in cases where the individual actor has incurred personal obligations under the disputed contract. See In Re Eastern Continuous Forms, Inc., 302 B.R. 320 (Bkrtcy. E.D. Pa. 2003). In the present case, Plaintiff's complaint fails to allege any specific promises made under the contract by Defendant Lobaugh. Further, the complaint is silent with respect to specific acts alleged to have been performed by Lobaugh other than to aver that "[a]11 actions taken by L Cubed ...were taken at the direction of Lobaugh." 31 The demurrer of Defendants L Cubed and Lobaugh to Counts I, II, and III of Plaintiff's complaint as they relate to Defendant Lobaugh will be granted. To properly bring a claim for breach of contract, a plaintiff must allege, in the complaint: "1) the existence of a contract, including its essential terms; 2) a breach of a duty imposed by the contract; and 3) resultant damages." Pittsburgh Construction Co. v. Griffith, 2003 PA Super 374, ¶13, 834 A.2d 572, 580 (citations omitted). In the present case, for the purposes of preliminary objections, Plaintiff's complaint has satisfied this requirement. Therefore, the second preliminary objection of Defendants L Cubed and Lobaugh will be denied. The Pennsylvania Rules of Civil Procedure permit causes of action and defenses to be pled in the alternative. Pa. R.C.P. 1020(c); see Rollinson v. Clarke-DeMarco, 83 Pa. D. & C.4th 467, 478 (Pa.Com.Pl., Mercer County 2007). Unjust enrichment and 31 Plaintiff s Complaint, ¶66, 80, 87, filed December 2, 2009. 7 quantum meruit can be properly pleaded in the alternative to a breach of contract claim. Id., citing, Birchwood Lakes Community Association Inc. v. Comis, 296 Pa. Super. 77, 86, 442 A.2d 304, 308 (1980); see also Lugo v. Farmers Pride, Inc., 2009 PA Super, 5, 967 A.2d 963. "Moreover, causes of action that are inconsistent are permitted so long as they are pleaded at separate counts. [T]heories of breach of contract and unjust enrichment must be pleaded alternatively in order to allow recovery under the latter theory where an express contract cannot be proven ...." Lugo v. Farmers Pride, Inc., 2009 PA Super, 5, ¶16, 967 A.2d 963, 970 (emphasis in original). At this stage of the proceedings, it has not yet been determined whether the alleged express contract is valid, and, as such, alternative pleadings of unjust enrichment and quantum meruit are proper. Therefore, Defendant L Cubed and Lobaugh's third preliminary objection will be denied. An action for civil conspiracy must allege "(1) a combination of two or more persons acting with a common purpose to do an unlawful act or to do a lawful act by unlawful means or for an unlawful purpose, (2) an overt act done in pursuance of the common purpose, and (3) actual legal damage." Phillips v. Selig, 2008 PA Super 244, ¶46, 959 A.2d 420, 437. For purposes of a demurrer, Plaintiff has properly pleaded an action for civil conspiracy. As pleaded, the alleged conspiracy involved the lawful act of filing a tax return with the unlawful purpose of defrauding Plaintiff. The action is one premised in tort, and, therefore, the gist of the action doctrine is inapplicable. Therefore, the fourth preliminary objection of Defendants L Cubed and Lobaugh will be denied. For these same reasons, Defendant Sacks' second preliminary objection will also be denied A pleading of tortious interference with contractual relations must allege the following elements: "(1) the existence of a contractual relationship between the plaintiff and a third party; (2) purposeful action on the part of the defendant intended to harm the relationship; (3) the absence of privilege or justification on the part of the defendant; and (4) actual damages resulting from the defendant's conduct." Hillis Adjustment Agency, Inc. v. Graham Co., 2006 PA Super 330, ¶12, 911 A.2d 1008, 1012. The Pennsylvania Superior Court has recently adopted comment b of the Restatement (Second) of Torts §772(a), which states: 8 There is of course no liability for interference with a contract or with a prospective contractual relation on the part of one who merely gives truthful information to another. The interference in this instance is clearly not improper. This is true even though the facts are marshaled in such a way that they speak for themselves and the person to whom the information is given immediately recognizes them as a reason for breaking his contract or refusing to deal with another. It is also true whether or not the information is requested. Walnut Street Associates, Inc. v. Brokerage Concepts, Inc., 2009 PA Super 191, ¶10, 982 A.2d 94, 99 (quoting Restatement (Second) of Torts §772(a), comment b). The Restatement (Second) of Torts § 772 (1979) states that "[o]ne who intentionally causes a third person not to perform a contract or not to enter into a prospective contractual relation with another does not interfere improperly with the other's contractual relation, by giving the third person (a) truthful information, or (b) honest advice within the scope of a request for the advice." Id. At this stage of the proceedings, it would be premature for the court to declare that the alleged accounting advice of Defendant Sacks was made in good faith or was not intended to deprive Plaintiff of the benefit of its contractual bargain. For this reason, Defendant Sacks' first preliminary objection must also be denied. For the foregoing reasons, the following order will be entered: ORDER OF COURT AND NOW, this 30~' day of April, 2010, upon consideration of the preliminary objections filed on behalf of Defendants, following oral argument held on February 17, 2010, and for the reasons stated in the accompanying opinion, it is ordered and directed as follows: 1. Defendants L Cubed Corporation and Leonard L. Lobaugh, Jr.'s Preliminary Objections to Plaintiff's Complaint, are granted in part and denied in part. The demurrers relating to Plaintiffs' claims against Leonard L. Lobaugh, Jr., at Count I for breach of contract, at Count II for Unjust Enrichment, and at Count III for Quantum Meruit are granted, these Counts 9 are dismissed as to Defendant Lobaugh, and the preliminary objections are otherwise denied. 2. The Preliminary Objections of Defendant Martin M. Sacks & Associates in Response to Complaint are denied; and 3. Defendants are afforded a period of 20 days from the date of this order to file an answer to the surviving claims of Plaintiff. BY THE COURT, s/ J. Wesley Oler, Jr. J. Wesley Oler, Jr., J. David H. Martineau, Esquire Salzmann Hughes P.C. 354 Alexander Spring Road Suite 1 Carlisle, PA 17015 Attorney for Plaintiff Arthur W. Lefco, Esquire Christopher J. Conrad, Esquire Marshall, Dennehey, Warner, Coleman & Goggin 1845 Walnut Street Philadelphia, PA 19103 Attorney for Defendant Martin M. Sacks & Associates Theodore A. Adler, Esquire John H. Pietrzak, Esquire Reager & Adler P.C. 2331 Market Street Camp Hill, PA 17011 Attorneys for Defendants L Cubed Corporation and Leonard L. Lobaugh Jr. 10 ~s !~ TAM SYSTEMS, INC., IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PA Plaintiff CIVIL ACTION -LAW v. N0.09-8336-CV L CUBED CORPORATION d/b/a TAM SYSTEMS, LENARD L. LOBAUGH : JURY TRIAL DEMANDED JR. AND MARTIN M. SACKS & ASSOCIATES Defendants TO: TAM Systems, Inc. ~ N _ c/o David H. Martineau, Esquire-=~ a Salzmann Hughes, P.C. _ _ ~ =~' 354 Alexander Spring Road "~ ` " ~ _~~~~~ Suite 1 ~ ~: ~ ~ "~ ,' ,_+_, Carlisle, PA 17015 3 . ~, You are hereby notified to plead to the within New Matter within twenty (20);;~ays ~ er ~1' ~,.T .:~ service hereof, or a default judgment maybe entered against you. Respectfully submitted, MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN By: ~ ~f Arthur . Lefco, Esquire PA Id. No. 12909 1845 Walnut Street Philadelphia, PA 19103 (215) 575-2588 awlefco ,mdwcg.com By: Christc~5her J. Conrad, Esquire PA Id. No. 202348 4200 Crums Mill Road, Suite B Harrisburg, PA 17112 (717) 651-3531 cjconrad ,mdwcg com r , TAM SYSTEMS, INC., Plaintiff v. L CUBED CORPORATION d/b/a TAM SYSTEMS, LENARD L. LOBAUGH JR. AND MARTIN M. SACKS & ASSOCIATES Defendants : IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PA CIVIL ACTION -LAW NO. 09-8336-CV JURY TRIAL DEMANDED ANSWER WITH NEW MATTER OF DEFENDANT MARTIN M. SACKS & ASSOCIATES Defendant Martin M. Sacks & Associates ("Sacks"), by and through its undersigned counsel, Marshall, Dennehey, Warner, Coleman & Goggin, hereby answers the Complaint of Plaintiff TAM Systems, Inc., and in support thereof states the following: 1. Admitted upon information and belief. 2. Admitted upon information and belief. 3. Admitted upon information and belief. 4. Admitted. 5. Admitted upon information and belief. 6. Admitted upon information and belief. 7. Admitted upon information and belief. 8. Admitted upon information and belief. 9. Admitted in part; denied in part. It is admitted, upon information and belief, that prior to March 1, 2006 Plaintiff and Defendant L Cubed Corporation ("L Cubed") negotiated the terms of a certain Asset Purchase Agreement (hereinafter "the Agreement"). The Agreement is a document that speaks for itself, however, and any attempt by Plaintiff to interpret or characterize the same is strictly denied. Strict proof thereof is demanded, to the extent relevant. 10. Admitted upon information and belief. 11. Denied. The Agreement is a document that speaks for itself, and any attempt by Plaintiff to interpret or characterize the same is strictly denied. Strict proof thereof is demanded, to the extents relevant. 12. Admitted upon information and belief. 13. Admitted upon information and belief. 14. Admitted upon information and belief. 15. Admitted upon information and belief. 16. Admitted upon information and belief. 17. Denied. All financial records provided to L Cubed are documents that speak for themselves, and any attempt by Plaintiff to interpret or characterize the same is strictly denied. Strict proof thereof is demanded, to the extent relevant. 18. Denied. Defendant lacks knowledge or information sufficient to form a belief as to the truth of the allegations set forth in this Paragraph, and accordingly they are denied. Strict proof thereof is demanded, to the extent relevant. By way of further response, Defendant was not a party to the Agreement, and Defendant was not in any way involved, either directly or indirectly, with the negotiation of any terms or conditions of the Agreement. 19. Denied. Defendant lacks knowledge or information sufficient to form a belief as to the truth of the allegations set forth in this Paragraph, and accordingly they are denied. Strict proof thereof is demanded, to the extent relevant. By way of further response, Defendant was 2 not a party to the Agreement, and Defendant was not in any way involved, either directly or indirectly, with the negotiations of any terms or conditions of the Agreement. 20. Denied. Defendant lacks knowledge or information sufficient to form a belief as to the truth of the allegations set forth in this Paragraph, and accordingly they are denied. Strict proof thereof is demanded, to the extent relevant. By way of further response, Defendant was not a party to the Agreement, and Defendant was not in any way involved, either directly or indirectly, with the negotiations of any terms or conditions of the Agreement. 21. Denied. Defendant lacks knowledge or information sufficient to form a belief as to the truth of the allegations set forth in this Paragraph, and accordingly they are denied. Strict proof thereof is demanded, to the extent relevant. By way of further response, Defendant was not a party to the Agreement, and Defendant was not in any way involved, either directly or indirectly, with the negotiations of any terms or conditions of the Agreement. Byway of further response, the Agreement does not specify a particular method of accounting to be utilized in the preparation of L Cubed's tax returns. 22. Admitted in part; denied in part. It is admitted that L Cubed filed a return for the tax year 2006 on or about March 15, 2007. The 2006 return is a document that speaks for itself, and any attempt by Plaintiff to interpret or characterize the same is strictly denied. Strict proof thereof is demanded, to the extent relevant. 23. Denied. The 2006 return is a document that speaks for itself, and any attempt by Plaintiff to interpret or characterize the same is strictly denied. Strict proof thereof is demanded, to the extent relevant. 3 24. Denied. Defendant lacks knowledge or information sufficient to form a belief as to the truth of the allegations set forth in this Paragraph, and accordingly they are denied. Strict proof thereof is demanded, to the extent relevant. 25. Denied. The 2006 return is a document that speaks for itself, and any attempt by Plaintiff to interpret or characterize the same is strictly denied. Strict proof thereof is demanded, to the extent relevant. 26. Denied. The Agreement is a document that speaks for itself, and any attempt by Plaintiff to interpret or characterize the same is strictly denied. Strict proof thereof is demanded, to the extent relevant. 27. Denied. Defendant lacks knowledge or information sufficient to form a belief as to the truth of the allegations set forth in this Paragraph, and accordingly they are denied. Strict proof thereof is demanded, to the extent relevant. 28. Denied. By way of further response, Defendant believes and therefore avers that L Cubed attempted to make one or more payments to Plaintiff, which Plaintiff has refused. 29. Denied. Defendant lacks knowledge or information sufficient to form a belief as to the truth of the allegations set forth in this Paragraph, and accordingly they are denied. Strict proof thereof is demanded, to the extent relevant. 30. Denied. Defendant lacks knowledge or information sufficient to form a belief as to the truth of the allegations set forth in this Paragraph, and accordingly they are denied. Strict proof thereof is demanded, to the extent relevant. 31. Denied. Defendant lacks knowledge or information sufficient to form a belief as to the truth of the allegations set forth in this Paragraph, and accordingly they are denied. By way of further response, the letter from counsel referenced in this Paragraph is a document that 4 speaks for itself, and any attempt by Plaintiff to interpret or characterize the same is strictly denied. Strict proof thereof is demanded, to the extent relevant. 32. Denied. It is specifically denied that the effect of L Cubed's use of the full absorption accounting method would "artificially decrease" gross profits reported. By way of further response, the full absorption method of accounting is recognized and accepted as a fair and proper method of business accounting. The method complies in all respects with the requirements of the Internal Revenue Service to report taxable income on federal income tax returns. 33. Admitted in part; denied in part. It is admitted that L Cubed filed an amended 2006 tax return on or about March 7, 2008. The amended 2006 is a document that speaks for itself, and any attempt by Plaintiff to interpret or characterize the same is strictly denied. Strict proof thereof is demanded, to the extent relevant. 34. Denied. The amended 2006 return is a document that speaks for itself, and any attempt by Plaintiff to interpret or characterize the same is strictly denied. Strict proof thereof is demanded, to the extent relevant. 35. Denied. By way of further response, the full absorption method of accounting is recognized and accepted as a fair and proper method of business accounting. The method complies in all respects with the requirements of the Internal Revenue Service to report taxable income on federal income tax returns. 36. Denied. Defendant lacks knowledge or information sufficient to form a belief as to the truth of the allegations set forth in this Paragraph, and accordingly they are denied. Strict proof thereof is demanded, to the extent relevant. 5 37. Denied. By way of further response, the full absorption method of accounting is recognized and accepted as a fair and proper method of business accounting. The method complies in all respects with the requirements of the Internal Revenue Service to report taxable income on federal income tax returns. 38. Denied. The letter referenced in this Paragraph is a document that speaks for itself, and any attempt by Plaintiff to interpret or characterize the same is strictly denied. Strict proof thereof is demanded, to the extent relevant. 39. Admitted in part; denied in part. It is admitted that L Cubed filed a tax return for the tax year 2007 on or about March 18, 2008. The 2007 return is a document that speaks for itself, and any attempt by Plaintiff to interpret or characterize the same is strictly denied. Strict proof thereof is demanded, to the extent relevant. 40. Denied. The 2007 return is a document that speaks for itself, and any attempt by Plaintiff to interpret or characterize the same is strictly denied. Strict proof thereof is demanded, to the extent relevant. 41. Admitted in part; denied in part. It is admitted that L Cubed filed an amended tax return for the tax year 2008 on or about March 20, 2009. The amended 2008 tax return is a document that speaks for itself, and any attempt by Plaintiff to interpret or characterize the same is strictly denied. Strict proof thereof is demanded, to the extent relevant. 42. Admitted in part; denied in part. It is admitted that L Cubed previously filed an original 2008 tax return. The original 2008 tax return is a document that speaks for itself, and any attempt by Plaintiff to interpret or characterize the same is strictly denied. Strict proof thereof is demanded, to the extent relevant. 6 43. Denied. The 2008 return is a document that speaks for itself, and any attempt by Plaintiff to interpret or characterize the same is strictly denied. Strict proof thereof is demanded, to the extent relevant. 44. It is admitted, upon information and belief, that Plaintiff has made demands for payment of L Cubed. Byway of further response, Defendant avers, upon information and belief, that L Cubed has made, or attempted to make one, or more payments pursuant to the terms of the Agreement, which Plaintiff has refused. 45. Denied. By way of further response, Defendant avers, upon information and belief, that Defendant L Cubed has attempted to make payment to Plaintiff pursuant to the terms of the Agreement, which Plaintiff has denied. 46. Denied. By way of further response, Defendant avers, upon information and belief, that Defendant L Cubed has made, or attempted to make, one or more payments to Plaintiff pursuant to the terms of the Agreement, which Plaintiff has denied. 47. Denied. The Agreement is a document that speaks for itself, and any attempt by Plaintiff to interpret or characterize the same is strictly denied. Strict proof thereof is demanded, to the extent relevant. 48. Denied. Defendant lacks knowledge or information sufficient to form a belief as to the truth of the allegations set forth in this Paragraph, and accordingly, they are denied. Strict proof thereof is demanded, to the extent relevant. 49. Denied. The allegations of this Paragraph constitute conclusions of law to which no further response is required. To the extent the allegations of this Paragraph are deemed to be wholly and factual in nature, the allegations are directed to a party or parties other than Answering Defendant, and no response is provided. 7 COUNTI BREACH OF CONTRACT (TAM Svstems, Inc. v. L Cubed Coruoration and Lenard L Lobau~h, Jr ) 50. Defendant incorporates by reference its response to Paragraph 1 through 49 above as if more fully set forth at length herein. 51. - 67. The allegations of these Paragraphs are directed to parties other than Defendant, and accordingly no response is provided. To the extent the allegations can be construed and/or interpreted so as to apply to Defendant, they are denied. Strict proof thereof is demanded, to the extent relevant. COUNT II UNJUST ENRICHMENT (TAM Svstems, Inc. v. L Cubed Coraoration and Lenard L Lobaugh, Jr ) 68. Defendant incorporates by reference its response to Paragraph 1 through 67 above as if more fully set forth at length herein. 69. - 81. The allegations of these Paragraphs are directed to parties other than Defendant, and accordingly no response is provided. To the extent the allegations can be construed and/or interpreted so as to apply to Defendant, they are denied. Strict proof thereof is demanded, to the extent relevant. COUNT III QUANTUM MERUIT TAM Systems, Inc. v. L Cubed Coruoration and Lenard L Lobaugh, Jr ) 82. Defendant incorporates by reference its response to Paragraph 1 through 81 above as if more fully set forth at length herein. 83. - 88. The allegations of these Paragraphs are directed to parties other than Defendant, and accordingly no response is provided. To the extent the allegations can be 8 construed and/or interpreted so as to apply to Defendant, they are denied. Strict proof thereof is demanded, to the extent relevant. COUNT IV TORTIOUS INTERFERENCE WITH EXISTING CONTRACTUAL RELATIONSHIP (TAM Systems, Inc. v. Martin M. Sacks & Associates) 89. Defendant incorporates by reference its response to Paragraph 1 through 88 above as if more fully set forth at length herein. 90. Admitted in part; denied in part. It is admitted only that Plaintiff and L Cubed are parties to the Agreement. The balance of the allegations of this paragraph constitute conclusions of law to which no further response is required, and accordingly they are denied. By way of further response, the Agreement is a document that speaks for itself, and any attempt by Plaintiff to interpret or characterize the same is strictly denied. Strict proof thereof is demanded, to the extent relevant. 91. Admitted. 92. Admitted. 93. Admitted with qualification. Defendant believes that Plaintiff intended to refer to Paragraph 92, and not Paragraph 83. 94. Denied. It is specifically denied that Defendant intended to assist L Cubed to artificially lower the payments due to Plaintiff under the Agreement. By way of further response, the Agreement did not prohibit L Cubed's use of the full absorption accounting method for purposes of preparing its federal income tax returns. 95. Denied. The allegations of this paragraph constitute conclusions of law to which no further response is required, and accordingly they are denied. To the extent the allegations of this paragraph are deemed to be wholly factual in nature, they are denied. Strict proof thereof is 9 demanded, to the extent relevant. By way of further response, Defendant was privileged to provide L Cubed with accounting advice concerning the use of the full absorption accounting method for purposes of preparing its federal income tax returns. 96. Denied. It is specifically denied that Plaintiff has sustained any actual damages as a result of any allegedly tortious or wrongful conduct on the part of Defendant. COUNT V CIVIL CONSPIRACY (TAM Systems, Inc, v. L Cubed Coruoration. and Lenard L Lobaugh, Jr , and Martin M. Sacks & Associates) 97. Defendant incorporates by reference its response to Paragraph 1 through 96 above as if more fully set forth at length herein. 98. Admitted. 99. Admitted. By way of further response, Defendant also prepared L Cubed's amended 2008 return. 100. Defendant admits it advised L Cubed that utilizing the full absorption accounting method for purposes of preparing its federal income tax returns potentially would result in a change in the amount of gross income being reported. By way of further response, the Agreement did not prohibit L Cubed's use of the full absorption accounting method for purposes of preparing its federal income tax returns. 101. Denied. It is specifically denied that Defendant attempted to defraud Plaintiff in any respect. 102. Denied. It is specifically denied .that Defendant separately or together with L Cubed for the common purpose of breaching the Agreement. By way of further response, the 10 Agreement did not prohibit L Cubed's use of the full absorption accounting method for purposes of preparing its federal income tax returns. 103. Denied. It is specifically denied that Plaintiff has sustained any actual damages as a result of any allegedly tortious or wrongful conduct on the part of Defendant. 104. The allegations of this Paragraph are directed to parties other than Defendant, and accordingly no response is provided. To the extent the allegations can be construed and/or interpreted so as to apply to Defendant, they are denied. Strict proof thereof is demanded, to the extent relevant. 105. The allegations of this Paragraph are directed to parties other than Defendant, and accordingly no response is provided. To the extent the allegations can be construed and/or interpreted so as to apply to Defendant, they are denied. Strict proof thereof is demanded, to the extent relevant. COUNT VI DECLARATORY JUDGMENT (TAM Systems. Inc. v. L Cubed Corporation) 106. Defendant incorporates by reference its response to Paragraph 1 through 105 above as if more fully set forth at length herein. 107. - 111. The allegations of these Paragraphs are directed to parties other than Defendant, and accordingly no response is provided. To the extent the allegations can be construed and/or interpreted so as to apply to Defendant, they are denied. Strict proof thereof is demanded, to the extent relevant. 11 WHEREFORE, Defendant Martin M. Sacks & Associates respectfully requests that Plaintiffs Complaint be dismissed in its entirety, with prejudice, together with cost of suit and such other relief as the Court may deem appropriate. NEW MATTER 112. Defendant incorporates by reference its response to Paragraph 1 through 111 above as if more fully set forth at length herein. 113. Plaintiff has failed to state a claim or claims against Defendant upon which relief maybe granted. 114. Plaintiff and L Cubed agreed at closing on March 1, 2006 that the payments due from L Cubed to Plaintiff, pursuant to Paragraph 8(c) of the Agreement, were to be based upon ten percent (10%) of L Cubed's reported net income, rather than its ross rofits, during the applicable time period, even though Paragraph 8(c} of the Agreement itself specified that payments were to be based upon gross profits. Plaintiff and L Cubed also agreed at closing to prepare and execute a separate written agreement reflecting the actual and agreed upon method and basis for calculating L Cubed's payments due; however, Plaintiff ultimately refused or otherwise failed to negotiate or execute any such separate agreement. 115. The full absorption method of accounting is recognized and accepted as a fair and proper method of business accounting. The method complies in all respects with the requirements of the Internal Revenue Service to report taxable income on federal income tax returns. 12 116. The Asset Purchase Agreement did not prohibit L Cubed's use of the full absorption accounting method for purposes of preparing its federal income tax returns. 117. Defendant's recommendation to L Cubed to utilize the full absorption accounting method did not induce L Cubed to breach any terms of the Asset Purchase Agreement or otherwise cause L Cubed not to perform under the Asset Purchase Agreement. 118. Defendant was privileged to provide L Cubed with accounting advice concerning the use of the full absorption accounting method for purposes of preparing its federal income tax returns. 119. Defendant did not provide L Cubed Corporation with untruthful information or advice concerning the use of the full absorption accounting method for tax reporting purposes. 120. Defendant, in its capacity as agent of Defendant L Cubed Corporation, is legally incapable of conspiring with L Cubed, its principal, within the context of providing accounting advice to L Cubed. 121. Plaintiff has failed to allege or set forth facts giving rise to any particular cause of action against Defendant, and thus Plaintiffs claim for civil conspiracy as against this Defendant is not cognizable as a matter of law. 122. The mere fact that Defendant recommended that L Cubed utilize the full absorption accounting method for tax preparation purposes, and that L Cubed in fact utilized the particular method in its preparation of one or more federal income tax returns, which method was not prohibited under the Asset Purchase Agreement, is not by itself an actionable conspiracy. 123. Some or all of Plaintiffs claims may be barred by the applicable statutes of limitation. 13 124. No act or omission or conduct on the part of Defendant was a substantial contributing factor in causing or contributing to any of the injuries and damages Plaintiff is alleged to have suffered, which are expressly denied. 125. Plaintiff has not suffered any damages as a matter of law. 126. Plaintiff has failed to mitigate its damages. 127. Defendant specifically and explicitly raises the defense of privilege. 128. Plaintiffs injuries and damages, if any, were caused by acts or omissions on the part of others whom Defendant had no control or right of control as a matter of law. WHEREFORE, Defendant Martin M. Sacks & Associates respectfully request that Plaintiffs Complaint be dismissed in its entirety, with prejudice, together with cost of suit and such other relief as the Court may deem appropriate. Respectfully submitted, MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN By: Arthur . Lefco, Esquire PA Id. No. 12909 1845 Walnut Street Philadelphia, PA 19103 (215) 575-2588 awlefco ,mdwc .com ~~// ~ By: ~_L2~x. ~/_ Christo er J. Conrad, Es ire PA Id. No. 202348 4200 Crums Mill Road, Suite B Harrisburg, PA 17112 (717) 651-3531 ciconrad(cr~,mdwc .com 14 VERIFICATION I verify that I have read the foregoing document and verify that the facts set forth herein are true and correct to the best of my knowledge, information and belief. To the extent that the foregoing document and/or its language is that of counsel, I have relied upon counsel making this Verification. I understand that any false statements made herein are subject to the penalties of 18 Pa. C.S. §4904 relating to unsworn falsification to authorities. RICHARD BLUIS, CPA 15 CERTIFICATE OF SERVICE The undersigned, as counsel for Defendant Martin M. Sacks and Associates, hereby certifies that a copy of the foregoing Answer with New Matter was served via United States Mail, postage prepaid, on the ,~~ day of May 2010, upon the following counsel of record: David H. Martineau, Esquire Salzmann Hughes, PC 354 Alexander Spring Road, Suite 1 Carlisle, PA 17015 Theodore Adler, Esquire Reager & Adler, PC 2331 Market Street Camp Hill, PA 17011 Respectfully submitted, MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN By: CHRISTO ER J. CONRAD, ESQUIRE Pa. I.D. No. 202348 4200 Crums Mill Road, Suite B Harrisburg, PA 17112 (717) 651-3531 Attorneys for Defendant Martin M. Sacks and Associates OS/601388.v1 16 F ~'~ ~'t'., , ' Salzmann Hughes, P.C. Hughes Esquire James D i 1 p i t ; L~ . , Attorney I.D. No. 58884 ~ s tn ~q~4~ -~9 ~ t ~ BY: David H. Martineau, Esquire O ~, f U ~ " Attorney LD. No. 84127 ,;;~~~ y . -, ~ 354 Alexander Spring Road, Suite 1 t` ~p ~,~- :wt} t C13N' 'L` ;~~~'"~ Carlisle, PA 17015 ~ ~r-~~j~tiJ~ Telephone: 717-249-6333 Attorneys for Plaintiff TAM SYSTEMS, INC., Plaintiff v. L CUBED CORPORATION, d/b/a TAM SYSTEMS, LENARD L. LOBAUGH, JR. & MARTIN M. SACKS & ASSOCIATES, Defendants IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA DOCKET N0.2009-8336 CIVIL ACTION -LAW JURY TRIAL DEMANDED PLAINTIFF'S RESPONSE TO NEW MATTER OF DEFENDANT MARTIN M. SACKS & ASSOCIATES AND NOW, comes the Plaintiff, TAM Systems, Inc., by and through its counsel, SALZMANN HUGHES, P.C., and responds to New Matter of Defendant Martin M. Sacks & Associates to Plaintiff's Complaint as follows: 112. Plaintiff incorporates its allegations of Paragraphs 1 though 111 of Plaintiff s Complaint as if set forth in full. 113. Denied. Paragraph 113 contains a conclusion of law to which no responsive pleading is required. To the extent that a responsive pleading is required, the same is denied as the pleading Defendant's Preliminary Objection on this matter has already been denied. 114. Denied. The allegations of Paragraph 114 are false and without basis. The Asset Purchase Agreement is a written document that speaks for itself, which is in direct and explicit opposition to the allegation of Paragraph 114. 115. It is admitted that the full absorption accounting method is an accepted accounting practice that is accepted by the Internal Revenue Service in certain cases but it is not appropriate when the entity involved is not involved in manufacturing. It is denied that this is at all relevant to Plaintiffls claim. 116. Denied. The written document of the Asset Purchase Agreement is silent as to accounting practices and the understanding of the parties at the time of entering into the agreement was that the accounting method would remain the same as that which the negotiations were based upon. 117. Denied. As set forth in Plaintiffls Complaint, Defendant Martin M. Sacks & Associates ("Sacks") actions relating to the accounting methods did induce Defendants L Cubed Corporation ("L Cubed") and Lenard L. Lobaugh, Jr. ("Lobaugh") to breach the Asset Purchase Agreement. 118. Denied. Defendant Sacks is not protected by an applicable privilege. Defendant is not privileged to provide advice for the purpose of avoiding contractual liability to Plaintiff. 119. Denied. Plaintiff does not have sufficient knowledge at this time to admit or deny the specifics of all advice Defendant Sacks provided to Defendants L Cubed and Lobaugh. The same is therefore denied and strict proof is required 120. Denied. It is denied that Defendants Sacks acted as agent for Defendant L Cubed and/or Lobaugh. 121. Paragraph 121 contains a conclusion of law to which no responsive pleading is required. To the extent that a responsive pleading is required, the same is denied as Defendant Sacks' Preliminary Objection on this matter has already been denied. 122. Paragraph 122 contains a conclusion of law to which no responsive pleading is required. To the extent that a responsive pleading is required, the same is denied as Defendant Sacks' Preliminary Objection on this matter has already been denied. 123. Denied. Paragraph 123 contains a conclusion of law to which no responsive pleading is required. To the extent that a responsive pleading is required, the same is denied. 124. Denied. As set forth in Plaintiff s Complaint, Defendant Sacks' actions did substantially contribute to the injuries sustained by Plaintiff. 125. Denied. Paragraph 125 contains a conclusion of law to which no responsive pleading is required. To the extent that a responsive pleading is required, the same is denied. 126. Denied. Defendant Sacks has not plead facts that would suggest Plaintiff could have mitigated its damages and indeed there is no means by which Plaintiff could mitigate his damages. Paragraph 126 is therefore denied. 127. Denied. Paragraph 127 asserts a defense and does not contain a factual statement to be admitted or denied. It is denied that Defendant Sacks' is protected by any applicable privilege. 128. Denied. Where it is admitted that other Defendant are jointly liable to Plaintiff, as set forth in Plaintiffs Complaint, it is denied that Defendant Sacks' liability is in any way diminished by the acts of other parties. WHEREFORE, Plaintiff, TAM Systems, Inc., prays this Honorable Court to enter judgment in favor of Plaintiff and against Defendants L Cubed Corporation, d/b/a TAM Systems and Lenard L. Lobaugh, Jr. as requested in the various counts to Plaintiff s Complaint. SALZMANN HUGHES, P.C. ~i~ ,~c J kK 1~ 2D/d By: I /~ i~~ ames D. Hughes, Esquire Attorney I.D. 58884 David H. Martineau, Esquire Attorney I.D. No. 84127 354 Alexander Spring Road, Suite 1 Carlisle, PA 17015 (717) 249-6333 Attorneys for Plaintiff VERIFICATION I have read the statements made in this document and they are true and correct to the best of my knowledge, information and belief. I understand that false statements herein made are subject to the penalties of 18 Pa.C.S.A. § 4904, relating to unsworn falsification to authorities. TAM SYSTEMS, INC. By: arlin Fleming, Preside. Date: ~i off. ~ CERTIFICATE OF SERVICE I, David H. Martineau, Esquire, hereby certify that on the 9~' day of June 2010, I served a true and correct copy of the foregoing document by depositing the same in the United States Mail, fist class mail, postage prepaid, and addressed to the following: Arthur W. Lefco, Esquire MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN 1845 Walnut Street Philadelphia, PA 19103 Christopher J. Conrad, Esquire MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN 4200 Crumbs Mill Road, Suite B Harrisburg, PA 17112 Theodore A. Adler, Esquire REAGER & ADLER, P.C. 2331 Market Street Camp Hill, PA 17011 David H. Martineau TAM SYSTEMS, INC., Plaintiff v. L CUBED CORPORATION, d/b/a TAM SYSTEMS, LENARD L. LOBAUGH, JR. & MARTIN M. SACKS & ASSOCIATES, Defendants IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA DOCKET NO. 2009-8336 CIVIL ACTION -LAW JURY TRIAL DEMANDED To: L Cubed Corporation c/o John H. Pietrzak, Esquire Reager & Adler, PC 2331 Market Street Camp Hill, PA 17011 NOTICE TO PLEAD YOU ARE HEREBY NOTIFIED TO FILE A WRITTEN RESPONSE TO THE WITHIN NEW MATTER WITHIN TWENTY (20) DAYS FROM SERVICE HEREOF OR A JUDGMENT MAY BE ENTERED AGAINST YOU. SALZMANN HUGHES, P.C. er: ~H Date: ,~ sae, R, ~'/e David H. Martineau, Esquire Attorney I.D. No. 84127 354 Alexander Spring Road, Suite 1 Carlisle, PA 17015 (717) 249-6333 N <, D ~ _ 1.fl a ' ., ; ~ ~~ .t ~ r' ~ ~ - ~ ~ s { - - .s-, ~ .... I i ~:l •' ~„• h, G ^~ TAM SYSTEMS, INC., Plaintiff v. L CUBED CORPORATION, d/b/a TAM SYSTEMS, LENARD L. LOBAUGH, JR. & MARTIN M. SACKS & ASSOCIATES, Defendants IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA DOCKET N0.2008-3090 CIVIL ACTION -LAW JURY TRIAL DEMANDED To: Leonard L. Lobaugh, Jr. c/o John H. Pietrzak, Esquire Reager & Adler, PC 2331 Market Street Camp Hill, PA 17011 NOTICE TO PLEAD YOU ARE HEREBY NOTIFIED TO FILE A WRITTEN RESPONSE TO THE WITHIN NEW MATTER WITHIN TWENTY (20) DAYS FROM SERVICE HEREOF OR A JUDGMENT MAY BE ENTERED AGAINST YOU. Date: ,f',,,,,~ 9 , z~sio SALZMANN HUGHES, P.C. By: ~ ~i'~ David H. Martineau, Esquire Attorney I.D. No. 84127 354 Alexander Spring Road, Suite 1 Carlisle, PA 17015 (717)249-6333 Salzmann Hughes, P.C. James D. Hughes, Esquire Attorney I.D. No. BY: David H. Martineau, Esquire Attorney I.D. No. 84127 354 Alexander Spring Road, Suite 1 Carlisle, PA 17015 Telephone: 717-249-6333 Attorneys for Plaintiff TAM SYSTEMS, INC., Plaintiff v. L CUBED CORPORATION, d/b/a TAM SYSTEMS, LENARD L. LOBAUGH, JR. & MARTIN M. SACKS & ASSOCIATES, Defendants IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA DOCKET NO. CIVIL ACTION -LAW JURY TRIAL DEMANDED PLAINTIFF'S RESPONSE TO NEW MATTER OF DEFENDANTS L CUBED CORPORATION d/b/a TAM SYSTEMS INC. AND LEONARD L. LOBAUGH JR. TO PLAINTIFF'S COMPLAINT WITH NEW MATTER AND NOW, comes the Plaintiff, TAM Systems, Inc., by and through its counsel, SALZMANN HUGHES, P.C., and responds to New Matter of Defendants L Cubed Corporation and Leonard L. Lobaugh to Plaintiff s Complaint as follows: 1. 2. The Asset Purchase Agreement is a writing that speaks for itself. Paragraph 1 is denied to the extent that it attempts to mischaracterize or is in any way inconsistent with the written document. The Asset Purchase Agreement is a writing that speaks for itself. Paragraph 2 is denied to the extent that it attempts to mischaracterize or is in any way inconsistent with the written document. By way of further response, there is no provision of the Asset Purchase Agreement permitting Defendants to select an accounting method inapplicable to their business for the purpose of avoiding liability to Plaintiff. 3. The Asset Purchase Agreement is a writing that speaks for itself. Paragraph 3 is denied to the extent that it attempts to mischaracterize or is in any way inconsistent with the written document. 4. The Asset Purchase Agreement is a writing that speaks for itself. Paragraph 4 is denied to the extent that it attempts to mischaracterize or is in any way inconsistent with the written document. 5. Denied. Defendants L Cubed Corporation and Lobaugh do not aver what set off exists, therefore the same is denied. By way of further response, no set off arguably exists that would result in the alleged net total of $1,025.92 as alleged by Defendants and such allegation is specifically denied. 6. Denied. As set forth in Paragraph 5, Defendants L Cubed Corporation and Lobaugh have alleged inaccurate figures without basis and any further allegation upon such figures is likewise denied. Byway of further response, it is admitted that the payment of March 23, 2007 left a balance remaining due to Plaintiff and was not paid nor accepted as payment in full of any debt. 7. Denied. Defendants have not yet provided Plaintiff with any documentation regarding 2009. Therefore, Plaintiff is without knowledge sufficient to admit or deny the allegations of Paragraph 7. The same is therefore denied and strict proof is requested. By way of further response, Defendants have not tendered payment of any sum for 2009 in breach of the terms of the Asset Purchase Agreement. 8. Denied. Although Plaintiff denies the allegations regarding the sums due set forth in Defendants L Cubed Corporation's and Lobaugh's New Matter, even those Defendants allege in Paragraphs 6 and 7 of their New Matter that they have not paid Plaintiff in accordance with the requirements of the Asset Purchase Agreement. 9. Denied. Paragraph 9 contains a conclusion of law to which no responsive pleading is required. To the extent that a responsive pleading is required, the same is denied. By way of further response, Defendants L Cubed Corporation and Lobaugh do not allege facts supporting the defense of accord and satisfaction. To the contrary, in Paragraph 6 of their New Matter, they allege that the only payment identified by them was not made in full satisfaction of any debt. 10. Denied. Paragraph 10 contains a conclusion of law to which no responsive pleading is required. To the extent that a responsive pleading is required, the same is denied. By way of further response, Defendants L Cubed .Corporation and Lobaugh do not allege facts supporting the defense of equitable estoppel. 11. Denied. Paragraph 11 contains a conclusion of law to which no responsive pleading is required. To the extent that a responsive pleading is required, the same is denied. By way of further response, Defendants L Cubed Corporation and Lobaugh do not allege facts supporting the equitable defense of latches. 12. Denied. Paragraph 12 contains a conclusion of law to which no responsive pleading is required. To the extent that a responsive pleading is required, the same is denied. By way of further response, Defendants L Cubed Corporation and Lobaugh do not allege facts supporting the defense of statute of limitations. 13. Denied. Paragraph 13 contains a conclusion of law to which no responsive pleading is required. To the extent that a responsive pleading is required, the same is denied. By way of further response, Defendants L Cubed Corporation and Lobaugh do not allege facts supporting the defense of waiver. 14. Denied. Paragraph 14 contains a conclusion of law to which no responsive pleading is required. To the extent that a responsive pleading is required, the same is denied. By way of further response, Defendants L Cubed Corporation and Lobaugh do not allege facts supporting the defense of gist of the action. 15. Denied. Paragraph 15 contains a conclusion of law to which no responsive pleading is required. To the extent that a responsive pleading is required, the same is denied. By way of further response, Defendants L Cubed Corporation and Lobaugh do not allege facts supporting the equitable defense of unclean hands. 16. Denied. Even Defendants L Cubed Corporation and Lobaugh have alleged that they have not fully complied with the terms of the Asset Purchase Agreement. Plaintiff incorporates its response to Paragraph 8 herein. 17. Denied. Paragraph 17 contains a conclusion of law to which no responsive pleading is required. To the extent that a responsive pleading is required, the same is denied. By way of further response, Defendants L Cubed Corporation and Lobaugh's allegations mirror their Preliminary Objection to Plaintiff's Complaint which was denied as to the counts to which Defendants' New Matter is applicable. Defendants' defense alleged in Paragraph 17 is barred by Res Judicata. NEW MATTER TO DEFENDANTS L CUBED AND LEONARD L. LOBAUGH'S NEW MATTER TO PLAINTIFF'S COMPLAINT 18. Defendants L Cubed Corporation and Leonard L. Lobaugh alleged certain unspecified set offs against the amounts due to Plaintiff under the Asset Purchase Agreement. 19. To the extent that any such set offs arise from any alleged breach of the Asset Purchase Agreement or any other agreement between Plaintiff and Defendants, such New Matter is in the nature of a counter-claim against Plaintiff. 20. Any alleged set off in the nature of a counter-claim against Plaintiff arising prior to May 18, 2006, based upon a contractual obligation is barred by the applicable statute of limitations. 21. Any alleged set off in the nature of a counter-claim against Plaintiff arising prior to May 18, 2008, based upon any theory of tort is barred by the applicable statute of limitations. 22. To the extent that any portion of the set off alleged by Defendants includes sums related to the events that were the subject of a claim brought by L Cubed Corporation against TAM Systems, Inc. and Marlin C. Fleming before the Honorable Richard T. Thomas, District Justice, at Civil Docket No. CV-0000144-07, such claims of set off are barred by Res Judicata, as the same are the subject of a final, non-appealable judgment in favor of TAM Systems, Inc. and Marlin C. Fleming. 23. At no time prior to Settlement, did the parties discuss the possibility of utilizing any alternative accounting method. 24. The agreed upon terms of the Asset Sale and the definitive Asset Purchase Agreement between the parties were based upon utilization of Standard Accounting. 25. Some or all of the Defendant's alleged set off has already been set off against other sums owed by Defendant to Plaintiff. 26. The Asset Purchase Agreement provides Defendant L Cubed with the right of set off only in specific, limited circumstances. 27. Some of all of the Defendant's alleges set off is not permissible set off pursuant to the terms of the Asset Purchase Agreement. WHEREFORE, Plaintiff, TAM Systems, Inc., prays this Honorable Court to enter judgment in favor of Plaintiff and against Defendants L Cubed Corporation, d/b/a TAM Systems and Leonard L. Lobaugh, Jr. as requested in the various counts to Plaintiff's Complaint. SALZMANN HUGHES, P.C. /aTs• JNnt 9~ ZO10 By: ~ James D. Hughes, Esquire Attorney I.D. 58884 David H. Martineau, Esquire Attorney I.D. No. 84127 354 Alexander Spring Road, Suite 1 Carlisle, PA 17015 (717) 249-6333 Attorneys for Plaintiff VERIFICATION I have read the statements made in this document and they are true and correct to the best of my knowledge, information and belief. I understand that false statements herein made are subject to the penalties of 18 Pa.C.S.A. § 4904, relating to unsworn falsification to authorities. TAM SYSTEMS, INC. By: arlin Fleming, President Date: ~ ,'Z.. / d CERTIFICATE OF SERVICE I, David H. Martineau, Esquire, hereby certify that on the 9~' day of June 2010, I served a true and correct copy of the foregoing document by depositing the same in the United States Mail, fist class mail, postage prepaid, and addressed to the following: Arthur W. Lefco, Esquire MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN 1845 Walnut Street Philadelphia, PA 19103 Christopher J. Conrad, Esquire MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN 4200 Crumbs Mill Road, Suite B Harrisburg, PA 17112 Theodore A. Adler, Esquire REAGER & ADLER, P.C. 2331 Market Street Camp Hill, PA 17011 . ~% ~ ,a David H. Martineau TAM SYSTEMS, INC., Plaintiff v. IN THE COURT OF OF CUMBERLAND CIVIL ACTION -LAW NO. 09-8336-CV L CUBED CORPORATION d/b/a TAM SYSTEMS, LENARD L. LOBAUGH JR. AND MARTIN M. SACKS & ASSOCIATES, Defendants v. DAVID A. BARK, ESQUIRE AND BARK SCHERER, Additional Defendants TO: David A. Baric, Esquire Baric Scherer 19 West South Street Carlisle, PA 17013 Baric Scherer 19 West South Street Carlisle, PA 17013 You have been sued in court. If you wish to defend against the claim following pages, you must take action within twenty (20) days after this Joind Notice are served, by entering a written appearance personally or by atton writing with the court your defenses or objections to the claims set forth agar warned that if you fail to do so the case may proceed without you and a judgme~ against you by the Court without further notice for any money claimed in the any other claim or relief requested by the Plaintiff or Original Defendant(s) money or property or other rights important to you. ZON PLEAS TY, PA c~ ca -~,;,= !~r~ , ~~- ~=~ ; ". , ~' ...,~. . c~. ~: r. t .~, w r cst ~~; ~ =r 'n r- -.,;.~, :~ '_7 °~- -<- set forth in the Complaint and y and filing in you. You are maybe entered ~mplaint or for You may lose YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ON IF YOU DO NOT HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET RTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRI~ A LAWYER. JURY TRIAL D NOTICE 1 IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAI] LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NCB Cumberland County Bar Association 32 Bedford Street Carlisle, PA 17013 (717) 249-3166 By: By: MARSHALL, DENNEHEY, W COLEMAN & GOGGIN Arthur W(~,efco, Esquire PA Id. No. 12909 1845 Walnut Street Philadelphia, PA 19103 (215) 575-2588 J~ Christopher J. Conrad, Esquire PA Id. No. 202348 4200 Crums Mill Road, Suite B Harrisburg, PA 17112 (717) 651-3531 cj conrad(a,mdwcg. com 2 VIAY BE ABLE MAY OFFER FEE. TAM SYSTEMS, INC., Plaintiff v. L CUBED CORPORATION d/b/a TAM SYSTEMS, LENARD L. LOBAUGH JR. AND MARTIN M. SACKS & ASSOCIATES, Defendants v. : DAVID A. BARK, ESQUIRE AND BARK SCHERER, Additional Defendants IN THE COURT OF OF CUMBERLAND CIVIL ACTION -LAW NO. 09-8336-CV JURY TRIAL D AGAINST ADDITIONAL DEFENDANTS DAVID A. BARK, ESQUI] SCHERER Defendant Martin M. Sacks & Associates ("Sacks"), by and throw counsel, Marshall, Dennehey, Warner, Coleman & Goggin, hereby assE Additional Defendants David A. Baric, Esquire and Baric Scherer, as follows: 1. Additional Defendant David A. Baric, Esquire ("Baric") is an at1 practice law in the Commonwealth of Pennsylvania who maintains a principal located at 19 West South Street, Carlisle, Cumberland County, Pennsylvania. 2. Additional Defendant Baric Scherer ("BS") is, upon inforrnatio~ unincorporated entity operating as a law firm, which maintains a principal 1 located at 19 ~JVest South Street, Carlisle, Cumberland County, Pennsylvania. 1PLEAS ,PA IA' its undersigned claims against licensed to of business and belief, an ice of business 3 3. Upon information and belief, Baric at all relevant times acted as an and/ or within the course and scope of his employment with BS. 4. On December 2, 2009, Plaintiff TAM Systems, Inc. ("Plaintiff') this matter against original Defendants L Cubed Corporation d/b/a TAM Lenard L. Lobaugh, Jr. ("Lobaugh"), L Cubed's principal, and Sacks. A true of Plaintiffs Complaint is attached hereto as Exhibit "A" and is incorporated By incorporating Plaintiffs Complaint herein by reference, Sacks does not thereof. 5. According to Plaintiffs Complaint - a. Until March 1, 2006, Plaintiff operated a construction authorized agent d a Complaint in ms ("L Cubed"), nd accurate copy ein by reference. iit the averments in Dillsburg, PA, owning certain assets, both tangible and intangible, good will and contracts ~or business; b. On March 1, 2006, Plaintiff and L Cubed conducted a of the business from Plaintiff to L Cubed; c. The sale of the business was in the form of an asset sale, and the right to operate under the name "TAM Systems"; d. Prior to the March 1, 2006 settlement, Plaintiff and L terms of an Asset Purchase Agreement ("Agreement"), setting forth the terms the asset sale; e. The Asset Purchase Agreement, in pertinent part, provided purchase price for the business, L Cubed would pay Plaintiff an amount profits of the business; on the sale good will negotiated the conditions of as part of the t upon the gross 4 f. Specifically, L Cubed agreed to pay Plaintiff 10% of its gr©~s profits derived from the business for a period of six years after the March 1, 2006 closing Cubed's tax returns. 6. Plaintiff alleges that "standard cost accounting" was to be uti Cubed's gross profits; however, the Agreement itself did not specify the method be utilized to calculate L Cubed's gross profits. 7. Sacks was not involved in any way in the negotiation of the Sacks present at closing. 8. L Cubed did not engage Sacks to provide accounting services the March 1, 2006 closing. 9. The Complaint, as it pertains to Sacks, alleges in pertinent part advice, which was provided post-closing, L Cubed knowingly switched from ~ cost accounting" to the full absorption accounting method in connection with (amended), 2007 and 2008 tax returns, solely for the purpose of reducing the Plaintiff under the terms of the Agreement. 10. Plaintiff has alleged that Sacks' provision of accounting advice in rise to claims for tortious interference with contractual relations and civil c Sacks expressly denies. COUNTI 11. Sacks incorporates herein by reference Paragraphs 1 - 10 of this J if more fully set forth at length herein. as shown on L to calculate L of accounting to nor was some time after upon Sacks' izin~ "standard its 2006 amount owed to regard gives which Complaint as 5 12. Baric and BS were retained by Defendants L Cubed and with legal counsel and representation, including in connection with the closing of the Agreement at issue. 13. Upon information and belief, Baric also was present and provided representation to L Cubed and Lobaugh at closing on March 1, 2006. 14. Upon information and belief, Plaintiff, L Cubed, and their respecti verbally agreed at closing, and prior to execution of all closing documents, that from L Cubed to Plaintiff, pursuant to the Agreement, were to be based upon 1 reported net income, rather than its gross profits, during the applicable time peg the Agreement itself erroneously specified that payments were to be based upon 15. Upon information and belief, no amendments, corrections, or the written Agreement prior to closing to reflect the parties' verbal agreement as to the method and basis for calculating L Cubed's payments due. 16. Upon information and belief, Baric advised L Cubed to documents, including the Agreement, as they existed, and to close the the Agreement reflected an erroneous or ambiguous term as to the calculating L Cubed's payments due under the Agreement. 17. Upon information and belief, Plaintiff and L Cubed orally agreed prepare and execute a separate written agreement reflecting the actual and and basis for calculating L Cubed's payments due. 18. Upon information and belief, Baric agreed to undertake the written agreement and actually provided one or more drafts of said counsel for review. to provide them ion, drafting and ;gal counsel and 'e legal counsel, ie payments due 1% of L Cubed's od, even though ~-oss profits. is were made to d understanding ate the closing ~n, even though l and basis for or to closing to ;d upon method of this separate nt to Plaintiffs 6 19. Upon information and belief, Plaintiff ultimately refused or negotiate or execute any such separate agreement. 20. Plaintiff has and continues to demand that payments due by L Agreement are to be based upon L Cubed's reported gross profits, utilizing accounting" method. 21. Baric, in his capacity as L Cubed's and Lobaugh's legal counsel, advise L Cubed not to execute the Agreement and any related closing d Agreement, as drafted, contained an erroneous or ambiguous term as to the r calculating L Cubed's payments due under the Agreement, and he breached to do so. 22. Additionally, BS owed and breached a duty to L Cubed and oversee Baric in his representation of L Cubed and Lobaugh at all times in any event, is vicariously liable for his conduct. 23. Sacks would not have been requested by L Cubed to provide concerning the full absorption accounting method and its use in connection failed to under the "standard cost owed a duty to while the and basis for duty by failing to supervise and hereto, and/ or advice preparing L Cubed's federal tax returns if the parties had confirmed in writing prior to closing (or, alternatively confirmed in writing post-closing) that that the payments due Plaintiff, pursuant to the Agreement, were to be based upon 10% of L income, and not its gross profits. 24. Accordingly, if Plaintiff is entitled to recover any damages as Complaint against Sacks, then Baric and BS are solely liable for such damages. L Cubed to 's reported net set forth in its 7 25. Alternatively, if Plaintiff is entitled to recover any damages Complaint against Sacks, then Baric and BS are liable over to Sacks for inden jointly and severally liable for contribution with Sacks. WHEREFORE, in the event that Defendant Martin M. Sacks & Associ to Plaintiff, Defendant demands judgment against Additional Defendants Esquire and Baric Scherer in the amount of any judgment against said De alternative, demands judgment for contribution and/ or indemnification in fu Defendants. By: By: Respectfully submitted, MARSHALL, DENNEHEY, WA COLEMAN & GOGGIN ~J Arthur . Lefco, Esquire PA Id. No. 12909 1845 Walnut Street Philadelphia, PA 19103 (215) 575-2588 awlefcona,mdwc .com /i ~ n Christopher J. Conrad, Esquire PA Id. No. 202348 4200 Crums Mill Road, Suite B Harrisburg, PA 17112 (717) 651-3531 ciconrad(a,mdwc~ com 8 set forth in its fication, and/ or is found liable vid A. Baric, idant, or, in the from Additional VERIFICATION I verify that I have read the foregoing document and verify that the set forth herein are true and correct to the best of my knowledge, information and belief. To the extent that the foregoing document and/or its language is that of counsel, I have relied upon c~unsel making this Verification. I understand that any false statements made herein are subject to the ~enalties of 18 Pa. C.S. §4904 relating to unsworn falsification to authorities. RICHARD BLUIS, CPA 9 CERTIFICATE OF SERVICE The undersigned, as counsel for Defendant Martin M. Sacks and certifies that a copy of the foregoing Joinder Complaint was served via Un postage prepaid, on the ~ day of July 2010, upon the following counsel c David H. Martineau, Esquire Salzmann Hughes, PC 354 Alexander Spring Road, Suite 1 Carlisle, PA 17015 Theodore Adler, Esquire Reager & Adler, PC 2331 Market Street Camp Hill, PA 17011 David A. Baric, Esquire Baric Scherer 19 West South Street Carlisle, PA 17013 Baric Scherer 19 West South Street Carlisle, PA 17013 Respectfully submitted, MARSHALL, DENNEHEY, WA COLEMAN & GOGGIN By: ~ ~ J ~~ CHRIST PHER J. CONRA , ES Pa. I.D. No. 202348 4200 Crums Mill Road, Suite B Harrisburg, PA 17112 (717) 651-3531 Attorneys for Defendant Martin M. Associates O I /5886668.v 1 10 hereby States Mail, f record: and 700510.doc 7` -- ,'~~`,, ~lr 3 P~1. ~~ r a ~f ~j, pi... ~, iT'1~ { r ~ ~lr IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA TAM SYSTEMS, INC., 09-8336-CV Plaintiff, Additional Defendant. Counsel of record for this party: ' Joseph S. D. Christof, II, Esquire Pa. I.D. # 19699 Nancy R. Winschel, Esquire Pa. I.D. # 34617 Byron R. Kaster, Esquire Pa. I.D. # 91707 DICKIE, McCAMEY & CHILCOTE, P.C. Firm # 067 Two PPG Place, Suite 400 Pittsburgh, PA 15222-5402 (412) 281-7272 v. CIVIL ACTION No. 09-8336-CV Issue No. L CUBED CORPORATION d/b/a TAM SYSTEMS, LENARD L. LOBAUGH JR., AND MARTIN M. SACKS & ASSOCIATES, PRAECIPE TO ENTER APPEARANCE Code: Defendant, Filed on behalf of Additional Defendants, ~~ DAVID A. BARK, ESQUIRE, AND BARK SCHERER DAVID A. BARK, ESQUIRE AND BARK SCHERER, JURY TRIAL DEMANDED IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA TAM SYSTEMS, INC., CIVIL ACTION Plaintiff, No. 09-8336-CV v. L CUBED CORPORATION d/b/a TAM SYSTEMS, LENARD L. LOBAUGH JR., AND MARTIN M. SACKS & ASSOCIATES, Defendant, v. DAVID A. BARK, ESQUIRE AND BARK SCHERER, Additional Defendant. PRAECIPE TO ENTER APPEARANCE TO: CUMBERLAND COUNTY PROTHONOTARY: Kindly enter the appearance of Joseph S.D. Christof, II, Nancy R. Winschel and Byron R. Kaster as counsel for David A. Baric, Esquire, and Baric Scherer, Additional Defendants in the above-captioned matter. Respectfully submitted, DICKIE, McCAMEY & CHILCOTE, P.C. By: Joseph S. D. Christof, II Nancy R. Winschel Byron R. Kaster Two PPG Place Pittsburgh, PA 15222-5402 (412) 281-7272 Counsel for Additional Defendants. CERTIFICATE OF SERVICE The undersigned hereby certifies that a true and correct copy of the foregoing PRAECIPE TO ENTER APPEARANCE has been served on this __~~ day of July, 2010, by U. S. first-class mail, postage prepaid, to following counsel of record: David H. Martineau, Esquire Saltzmann Hughes, PC 354 Alexander Spring Road, Suite 1 Carlisle, PA 17015 Theodore Adler, Esquire Reager & Adler, PC 2331 Market Street Camp Hill, PA 17011 Christopher J. Conrad, Esquire Marshall, Dennehey, Warner, Coleman & Goggin 4200 Crums Mill Road Suite B Harrisburg, PA 17112 DICKIE, McCAMEY & CHILCOTE, P.C. By: Joseph . D. Christof, II Counsel for Additional Defendants, David A. Baric, Esquire, and Baric Scherer a TAM SYSTEMS, INC., Plaintiff, v. L CUBED CORPORATION d/b/a TAM SYSTEMS, LEONARD L. LOBAUGH JR. AND MARTIN M. SACKS & ASSOCIATES, Defendants, V. DAVID A. BARK ESQUIRE AND BARK SCHERER, Additional Defendants. PRAECIPE TO ENTER APPEARANCE TO: CUMBERLAND COUNTY PROTHONOTARY: ~.~ C? ~' , i .. ~ ~ -~, ~ U - ~_~ ~ <, ~ ~ uu3 ~ --, -. ~ -- ::._: ~ ., p .. -, ;4 ~:~, c c ._ d' c Kindly enter the appearance of Joseph S.D. Christof, II, Nancy R. Winschel and Byron R. Kaster as counsel for David A. Baric, Esquire, and Baric Scherer, Additional Defendants in the above-captioned matter. 09-8336-CV IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PA N0.09-8336-CV CIVIL ACTION -LAW JURY TRIAL DEMANDED Respectfully submitted, DICKIE, McCAMEY & CHILCOTE, P.C. By: Joseph S. D. Christof, II, Esquire Pa. I.D. # 19699 Nancy R. Winschel, Esquire Pa. I.D. # 34617 Byron R. Kaster, Esquire Pa. I.D. # 91707 Two PPG Place Pittsburgh, PA 15222-5402 (412) 281-7272 Counsel for Additional Defendants. CERTIFICATE OF SERVICE The undersigned hereby certifies that a true and correct copy of the foregoing PRAECIPE TO ENTER APPEARANCE has been served on this 9`" day of August 2010, by U. S. first-class mail, postage prepaid, to following counsel of record: David H. Martineau, Esquire Saltzmann Hughes, PC 354 Alexander Spring Road, Suite 1 Carlisle, PA 17015 Theodore Adler, Esquire Reager & Adler, PC 2331 Market Street Camp Hill, PA 17011 Christopher J. Conrad, Esquire Marshall, Dennehey, Warner, Coleman & Goggin 4200 Crums Mill Road Suite B Harrisburg, PA 17112 DICKIE, McCAMEY & CHILCOTE, P.C. By: Bryon R. Kaster, Esquire Counsel for Additional Defendants, David A. Baric, Esquire, and Baric Scherer TAM SYSTEMS, INC., Plaintiff, v. L CUBED CORPORATION d/b/a TAM SYSTEMS, LEONARD L. LOBAUGH JR. AND MARTIN M. SACKS & ASSOCIATES, Defendants, v. DAVID A. BARK ESQUIRE AND BARK SCHERER, Additional Defendants. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PA NO. 09-8336-CV CIVIL ACTION -LAW JURY TRIAL DEMANDED PRELIMINARY OBJECTIONS OF ADDITIONAL DEFENDANTS AND NOW, comes Additional Defendants, David A. Baric, Esq. and Baric Scherer, (herein referred to collectively as "Additional Defendants") by and through their counsel, Dickie, McCamey & Chilcote, P.C. and hereby objects to the Joinder Complaint of Defendant Martin M. Sacks & Associates as follows: 1. Plaintiff commenced this lawsuit on December 2, 2009 with the filing of a Complaint. 2. Plaintiff is a Pennsylvania corporation that operated a construction business (hereinafter referred to as the "Business") in Dillsburg, Pennsylvania until March 1, 2006. (See Complaint, ¶¶1 and 5.) 3. On March 1, 2006, the Business was sold to Defendant L Cubed Corporation ("Defendant L Cubed"). See Complaint, ¶6.) 4. It is alleged that Defendant Martin M. Sacks & Associates ("Defendant Sacks") "provided accounting services to L Cubed." (Complaint, ¶91.) 5. The Business owned "certain assets, both tangible and intangible, goodwill and contracts for business." (Complaint, ¶5.) 6. Prior to the sale, Plaintiff and Defendant L Cubed had "negotiated the terms of an Asset Purchase Agreement", which "set[] forth the terms and conditions of the Asset Sale." (Complaint, ¶9.) 7. Accordingly to the Complaint, "the Asset Purchase Agreement provided that as part of the purchase price of the Business, [Defendant L Cubed] would pay [Plaintiff) an amount based upon the Gross Profits of the Business." (Complaint, ¶11.) 8. From March 1, 2006 to the present, Defendant L Cubed has operated the business. (See Complaint, ¶8.) 9. 'This lawsuit involves the payment of sums allegedly due to Plaintiff by Defendant L Cubed pursuant to the Asset Purchase Agreement. See Complaint, ¶¶44 and 45.) 10. The lawsuit further involves the question of whether the calculation of "Gross Profits" for the purposes of the Asset Purchase Agreement should be determined using "Standard Accounting" or "Full Absorption Accounting". (See Complaint, ¶¶17 to 49.) 2 11. Plaintiff alleges that Defendant Sacks recommended to Defendant L Cubed that it switch to "Full Absorption Accounting" in an "attempt to artificially lower the payments due to [Plaintiff) under the Asset Purchase Agreement." (Complaint, ¶94.) 12. Plaintiff has asserted "Tortious .Interference with Existing Contractual Relationship" and "Civil Conspiracy" claims against Defendant Sacks. 13. On January 15, 2010, Defendant Sacks filed Preliminary Objections to the Complaint. 14. On January 19, 2010, Defendant L Cubed and Lenard L. Lobaugh, Jr. ("Defendant Lobaugh")1 filed Preliminary Objections to the Complaint. 15. On May 5, 2010, the Honorable J. Wesley Oler, Jr. entered an order disposing of the Preliminary Objections. 16. On May 19, 2010, Defendants L Cubed and Defendant Lobaugh filed their Answer with New Matter. 17. On May 27, 2010, Defendant Sacks filed its Answer with New Matter. 18. On June 15, 2010, Defendant Sacks filed a Motion for Leave to Join Additional Defendants, which was granted by Judge Oler on June 22, 2010. 19. Defendant Sacks filed its Joinder Complaint on July 9, 2010. 20. Additional Defendants are an attorney and his law firm. See Joinder Complaint, ¶¶1 and 2.) ~ Defendant Lobaugh is the President of L Cubed. See Complaint, ¶3.) 3 21. Additional Defendants were, according to the Joinder Complaint, "retained by Defendants L Cubed and Lobaugh to provide them with legal counsel and representation." (Joinder Complaint, ¶12.) 22. Defendant Sacks alleges that Additional Defendants were negligent, and that "if Plaintiff is entitled to recover any damages as set forth in its Complaint against Sacks, then [Additional Defendants] are solely liable for such damages." (Joinder Complaint, ¶24.) 23. Alternatively, it is alleged that "if Plaintiff is entitled to recover any damages as set forth in its Complaint against Sacks, then [Additional Defendants] are liable over to Sacks for indemnification, and / or jointly and severally liable for contribution with Sacks." (Joinder Complaint, ¶25.) 24. The Joinder Complaint should be dismissed because Defendant Sacks does not have a viable cause of action for legal malpractice against the Additional Defendants because Defendant Sacks is not in privity with the Additional Defendants. Preliminary Objection -Demurrer 25. "A person not previously a party who is joined as an additional defendant may object to the joinder by filing preliminary objections asserting prejudice or any other ground set forth in Rule 1028." Pa.R.Civ.P. 2253(c). 26. Rule 1028 of the Pennsylvania Rules of Civil Procedure allows for Preliminary Objections based on legal insufficiency of a pleading or a demurrer. See, Pa.R.Civ.P. 1028(a)(4). 4 27. In ruling on a demurrer, the Pennsylvania Supreme Court has stated: A demurrer is an assertion that a complaint does not set forth a cause of action or a claim upon which relief can be granted. In disposing of a demurrer every well pleaded, material, relevant fact set forth in the pleading to which it is filed, together with all reasonable inference there from, is admitted as true. A demurrer will only be sustained where a complaint or pleading shows with certainty that upon the facts averred therein, the law will not permit the plaintiff or pleading party to recover. [Citations omitted.] Cost v. Cost, 677 A.2d 1250, 1252 (1996). 28. Under Pennsylvania law, the general rule is that an attorney will be held liable for negligence only to his client. See, Mentzer v. Rhey, Inc. v. Ferrari, 367 Pa.Super. 123, 126, 532 A.2d 484, 486 (Pa.Super. 1987). See, also, Austin J. Richards, Inc. v. McClaffertv, 371 Pa.Super. 269, 278, 538 A.2d 11, 15 (Pa.Super. 1988)("The general rule is that an attorney cannot be held liable for negligence to a third person with whom he has no contract of employment."). But, see, Somers v. Gross, 393 Pa.Super. 509, 574 A.2d 1056 (Pa.Super. 1990).2 29. In Ferrari, the Superior Court held that an original defendant had no cause of action against the plaintiff s attorney because the original defendant was not in privity with the plaintiff s attorney and thus could not join the attorneys as third-party defendants. See, Ferrari, 532 A.2d at 486. z In Somers, the Superior Court recognized in a professional negligence action against accountants that accountant defendants may join the plaintiff's attorney as an additional defendant on the theory that the attorney is solely liable to the plaintiff on the cause of action alleged. See, Somers, 393 Pa.Super. 509, 510-1 1, 574 A.2d 1056, 1057 (Pa.Super. 1990). Somers, however, is inapposite to this case. In Somers, "the cause of action alleged in the original complaint and in the joinder complaint [were] the same." Id., 574 A.2d at 1061. On the other hand, in this case Plaintiff has sued Defendant Sacks for "Tortious Interference with Existing Contractual Relationship" and "Civil Conspiracy". (Complaint, Counts IV and V.) The Joinder Complaint, however, alleges professional negligence by the Additional Defendants. (Joinder Complaint, Count I.) Where "the joinder complaint alleged liability of the attorney on a cause of action different from that pleaded by the plaintiff against [the accountant defendant]," the Somers court recognized that joinder would have been improper. Somers, 574 A.2d at 1060. 5 30. In McClaffertv, the court similarly concluded that an original defendant has no viable cause of action against another party's attorneys for advice which they gave to their client. See, McClaffertv, 538 A.2d at 15. 31. The Superior Court in McClaffertv dismissed the joinder claims against the plaintiffs attorneys, reasoning: "To attempt to interject a legal malpractice claim and compel the plaintiff to seek recovery against her attorneys because of alleged negligent advice ... was clearly improper .... The plaintiff did not assert a claim for malpractice against her attorneys, and the defendant will not be allowed to force her to do so in her action against the defendant." Id., 538 A.2d at 16. 32. Here, as in Ferrari and McClaffertv, the original defendant, Defendant Sacks, is not in privity with the plaintiffs attorneys, the Additional Defendants. (See, generally, Joinder Complaint (no allegation of an attorney-client relationship between Additional Defendants and Defendant Sacks).) 33. Therefore, Defendant Sacks has no cause of action against Additional Defendants. See, Ferrari, 532 A.2d at 486 ("because appellant Ferrari is not in privity with plaintiff s attorneys, he has no cause of action against them and thus may not, under Pa.R.C.P. 2252(a), join the attorneys as third-party defendants."). See, also, McClaffertv, 538 A.2d at 15 ("the defendant can have no cause of action against the attorneys because of advice which the attorneys gave their client."). 34. Because Defendant Sacks has no viable cause of action against Additional Defendants, Additional Defendants' demurrer should be sustained and the Joinder Complaint dismissed. See, Cost, 677 A.2d 1252 (recognizing that a demurrer should 6 "be sustained where a complaint or pleading shows with certainty that upon the facts averred therein, the law will not permit the plaintiff or pleading party to recover."). 35. In accordance with C.C.R.P. 208.3, Judge Oler entered an Order on April 30, 2010 ruling upon Defendants' Preliminary Objections. Judge Oler also entered an order on June 22, 2010 granting Defendant Sacks leave to join Additional Defendants. WHEREFORE, Additional Defendants request that this Honorable Court dismiss the Joinder Complaint with prejudice. Respectfully Submitted, DICKIE, MCCAMEY & CHILCOTE, P.C. /~ Date: August 9, 2010 By; Bryon R. Kaster, Esquire ATTORNEY I.D. NO. 91707 1200 Camp Hill Bypass Suite 205 Camp Hill, PA 17011 Joseph S.D. Christof II, Esgiure ATTORNEY I.D. NO. 19699 Two PPG Place Pittsburgh, PA 15222-5402 (412) 281-7272 Counsel for Additional Defendants. 7 CERTIFICATE OF SERVICE AND NOW, August 9, 2010, I, Bryon R. Kaster, Esquire, hereby certify that I did serve a true and correct copy of the foregoing PRELIMINARY OBJECTIONS upon all counsel of record by depositing, or causing to be deposited, same in the U.S. mail, postage prepaid, at Camp Hill, Pennsylvania, addressed as follows: By First-Class Mail: David H. Martineau, Esquire Saltzmann Hughes, PC 354 Alexander Spring Road, Suite 1 Carlisle, PA 17015 Theodore Adler, Esquire Reager & Adler, PC 2331 Market Street Camp Hill, PA 17011 Christopher J. Conrad, Esquire Marshall, Dennehey, Warner, Coleman & Goggin 4200 Crums Mill Road Suite B Harrisburg, PA 17112 Bryon R. Kaster, Esquire 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.) October 6, 2010 CAPTION OF CASE TAM SYTEMS, INC. V. L CUBED CORP V. DAVID BARK, ESQ., ET. AL. (entire caption must be stated in full) TAM SYSTEMS, INC. C; ~ ~~~ vs. L. CUBED COPROATION, ET. AL. ~ ~ VS. ~~ w ,~ ;~~ ~ DAVID A. BARK ES UIRE AND BARK SCHERER 8336 09 c-- Q No. , ~ Terrt~-; ~ , ;7 ~, {_ _. ,-; 1. State matter to be argued (i.e., plaintiffs motion for new trial, defendant's demtir[er to ~'~' ~D complaint, etc.): =: ~ PRELIMINARY OBJECTION OF ADDITIONAL DEFENDANTS ~: 2. Identify all counsel who will argue cases: ~~~ - ~ -ri (a) for plaintiffs: ~ 1, "` David H. Hartineau, Esquire, 354 Alexander Spring Rd, Suite I, Carlisle, PA 17015 C (Name and Address) (b) for defendants: Theodore Adler, Esquire, 2331 Market Street, Camp Hill, PA 17011 (Name and Address) Christopher Conrad, 4200 Crums Mills Rd., Suite B, Harrisburg, PA 17112 3. I will notify all parties in writing within two days that this case has been listed for argument. 4. Argument Court Date: October 6, 2010 Signature Bryon R. Kaster Print your name Additional Defendant Date: August 2010 Attorney for INSTRUCTIONS: 1. Original and 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. TAM SYSTEMS, INC., IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PA Plaintiff CIVIL ACTION - LAW V. NO. 09-8336-CV L CUBED CORPORATION d/b/a TAM SYSTEMS, LENARD L. LOBAUGH : JURY TRIAL DEMANDED JR. AND MARTIN M. SACKS & ASSOCIATES Defendants DAVID A. BARIC, ESQUIRE AND BARK SCHERER, Additional Defendants -G ANSWER OF DEFENDANT MARTIN M. SACKS & ASSOCIATES TO PRELIMINARY OBJECTIONS OF ADDITIONAL DEFENDANTS Defendant Martin M. Sacks & Associates ("Sacks"), by its attorneys, Marshall, Dennehey, Warner, Coleman & Goggin, hereby answers the Preliminary Objections of Additional Defendants David A. Baric, Esquire and Baric Scherer, and in support thereof states the following: 1. Admitted to the extent that Additional Defendants have accurately quoted from, cited and/ or paraphrased the allegations set forth in Plaintiffs Complaint. 2. Admitted to the extent that Additional Defendants have accurately quoted from, cited and/ or paraphrased the allegations set forth in Plaintiffs Complaint. 3. Admitted to the extent that Additional Defendants have accurately quoted from, cited and/ or paraphrased the allegations set forth in Plaintiffs Complaint. 4. Admitted to the extent that Additional Defendants have accurately quoted from, cited and/ or paraphrased the allegations set forth in Plaintiffs Complaint. r 5. Admitted to the extent that Additional Defendants have accurately quoted from, cited and/ or paraphrased the allegations set forth in Plaintiffs Complaint. 6. Admitted to the extent that Additional Defendants have accurately quoted from, cited and/ or paraphrased the allegations set forth in Plaintiffs Complaint. 7. Admitted to the extent that Additional Defendants have accurately quoted from, cited and/ or paraphrased the allegations set forth in Plaintiffs Complaint. 8. Admitted to the extent that Additional Defendants have accurately quoted from, cited and/ or paraphrased the allegations set forth in Plaintiffs Complaint. 9. Admitted to the extent that Additional Defendants have accurately quoted from, cited and/ or paraphrased the allegations set forth in Plaintiffs Complaint. 10. Admitted to the extent that Additional Defendants have accurately quoted from, cited and/ or paraphrased the allegations set forth in Plaintiffs Complaint. 11. Admitted to the extent that Additional Defendants have accurately quoted from, cited and/ or paraphrased the allegations set forth in Plaintiffs Complaint. 12. Admitted to the extent that Additional Defendants have accurately quoted from, cited and/ or paraphrased the allegations set forth in Plaintiffs Complaint. 13. Admitted. 14. Admitted. 15. Admitted. 16. Admitted. 17. Admitted. 18. Admitted. 19. Admitted. 2 r 20. Admitted. 21. Denied. The facts are as set forth in the Joinder Complaint. To the extent that Additional Defendants are characterizing or limiting such facts that apply to them, such characterization is denied. 22. Denied. The facts are as set forth in the Joinder Complaint. To the extent that Additional Defendants are characterizing or limiting such facts that apply to them, such characterization is denied. 23. Denied. The facts are as set forth in the Joinder Complaint. To the extent that Additional Defendants are characterizing or limiting such facts that apply to them, such characterization is denied. 24. Denied. The averments of this paragraph constitute conclusions of law to which no further response is required, and accordingly they are denied. PRELIMINARY OBJECTION - DEMURRER 25. Denied. The averments of this paragraph constitute conclusions of law to which no further response is required, and accordingly they are denied. 26. Denied. The averments of this paragraph constitute conclusions of law to which no further response is required, and accordingly they are denied. 27. Denied. The averments of this paragraph constitute conclusions of law to which no further response is required, and accordingly they are denied. 28. Denied. The averments of this paragraph constitute conclusions of law to which no further response is required, and accordingly they are denied. 29. Denied. The averments of this paragraph constitute conclusions of law to which no further response is required, and accordingly they are denied. 3 30. Denied. The averments of this paragraph constitute conclusions of law to which no further response is required, and accordingly they are denied. 31. Denied. The averments of this paragraph constitute conclusions of law to which no further response is required, and accordingly they are denied. 32. Denied. The averments of this paragraph constitute conclusions of law to which no further response is required, and accordingly they are denied. 33. Denied. The averments of this paragraph constitute conclusions of law to which no further response is required, and accordingly they are denied. 34. Denied. The averments of this paragraph constitute conclusions of law to which no further response is required, and accordingly they are denied. 35. Admitted. WHEREFORE, Defendant Martin M. Sacks & Associates respectfully requests that this Honorable Court deny and overrule Additional Defendants' Preliminary Objections. Respectfully submitted, MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN By: Arthur W. fco, Esquire PA Id. No. 2909 1845 Walnut Street Philadelphia, PA 19103 (215) 575-2588 awlefco@mdwcg.com By: Christoph J. Conrad, Esquire PA Id. No. 202348 4200 Crums Mill Road, Suite B Harrisburg, PA 17112 (717) 651-3531 cjconrad@mdwcg.com 4 VERIFICATION I verify that I have read the foregoing document and verify that the facts set forth herein are true and correct to the best of my knowledge, information and belief. To the extent that the foregoing document and/or its language is that of counsel, I have relied upon counsel making this Verification. I understand that any false statements made herein are subject to the penalties of 18 Pa. C.S. §4904 relating to unsworn falsification to authorities. RICHARD BLUIS, CPA 5 CERTIFICATE OF SERVICE The undersigned, as counsel for Defendant Martin M. Sacks and Associates, hereby cert ifies that a copy of the foregoing Answer to Preliminary Objections of Additional Defendants was served via United States Mail, postage prepaid, on the day of August, 2010, upon the following counsel of record: David H. Martineau, Esquire Salzmann Hughes, PC 354 Alexander Spring Road, Suite 1 Carlisle, PA 17015 Theodore Adler, Esquire Reager & Adler, PC 2331 Market Street Camp Hill, PA 17011 Bryon R. Kaster, Esquire Dickie, McCamey & Chilcote, P.C. 1200 Camp Hill Bypass, Suite 205 Camp Hill, PA 17011-3700 Respectfully submitted, MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN B C' Y: --) ?, -""/ CHRISTO ER J. CONRAD, ESQUIRE Pa. I.D. No. 202348 4200 Crums Mill Road, Suite B Harrisburg, PA 17112 (717) 651-3531 Attorneys for Defendant Martin M. Sacks and Associates ~, , TAM SYSTEMS, INC., Plaintiff v. L CUBED CORPORATION d/b/a TAM SYSTEMS, LENARD L. LOBAUGH JR. AND MARTIN M. SACKS & ASSOCIATES Defendants CERTIFICATE OF MERIT A5 TO ADDITIONAL DEFENDANTS DAVID A. BARK. ESQUIRE AND BARK SCHERER The undersigned counsel for Defendant Martin M. Sacks & Associates certify that: IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PA CIVIL ACTION -LAW N0.09-8336-CV JURY TRIAL DEMANDED ~~., ~~ c a -v Z ... 0 w 0 ~i •~ [X] an appropriate licensed professional has supplied a written statement to the undersigned that there is a basis to conclude that the care, skill or knowledge exercised or exhibited by Additional Defendant David A. Baric, Esquire in the treatment, practice, or work that is the subject of the Joinder Complaint, fell outside acceptable professional standards and that such conduct was a cause in bringing about the harm; AND [X] the claim that additional Defendant Baric Scherer deviated. from an acceptable professional standard is based solely on allegation that other licensed professionals for whom this Additional Defendant is responsible deviated from an acceptable professional standard and an appropriate licensed professional has supplied a written statement to the undersigned that there is a basis to conclude that the care, skill or knowledge exercised or exhibited by the other licensed professional in the treatment, practice or work that is the subject of the Joinder Complaint, fell outside acceptable professional standards and that such conduct was a cause in bringing about the harm. Respectfully submitted, MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN By: Arthur . Lefco, Esquire PA Id. o. 12909 1845 Walnut Street Philadelphia, PA 19103 (215) 575-2588 awlefco mdwc .com By: 'sto J. Conrad, Esq ' e PA. Id. 0. 202348 4200 Crums Mill Road, Suite B Harrisburg, PA 17112 (717)-651- 651-3531 cj conradna,mdwcg. com Date: August 30, 2010 2 CERTIFICATE OF SERVICE The undersigned, as counsel for Defendant Martin M. Sacks and Associates, hereby certifies that a copy of the foregoing Answer to Preliminary Objections of Additional Defendants was served via United States Mail, postage prepaid, on the 30th day of August, 2010, upon the following counsel of record: David H. Martineau, Esquire Theodore Adler, Esquire Salzmann Hughes, PC Reager & Adler, PC 354 Alexander Spring Road, Suite 1 2331 Market Street Carlisle, PA 17015 Camp Hill, PA 17011 Bryon R. Kaster, Esquire Dickie, McCamey & Chilcote, P.C. 1200 Camp Hill Bypass, Suite 205 Camp Hill, PA 17011-3700 Respectfully submitted, MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN By: ~ ~ ~~ CHRISTOPHE~J. CONRA~, ESQ~(JIRE Pa. I.D. No. 20 348 4200 Crums Mill Road, Suite B Harrisburg, PA 17112 (717) 651-3531 Attorneys for Defendant, Martin M. Sacks and Associates OS/631784.v1 3 1 TAM SYSTEMS, INC., IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PA Plaintiff CIVIL ACTION - LAW V. NO. 09-8336-CV L CUBED CORPORATION d/b/a TAM SYSTEMS, LENARD L. LOBAUGH : JURY TRIAL DEMANDED JR. AND MARTIN M. SACKS & - >; ASSOCIATES s- n -A U) -n Defendants - rn 4 DAVID A. BARIC, ESQUIRE AND BARIC SCHERER, Additional Defendants CERTIFICATE OF MERIT AS TO ADDITIONAL DEFENDANT DAVID A. BARIC, ESQUIRE The undersigned counsel for Defendant Martin M. Sacks & Associates certify that: [X] an appropriate licensed professional has supplied a written statement to the undersigned that there is a basis to conclude that the care, skill or knowledge exercised or exhibited by Additional Defendant in the treatment, practice, or work that is the subject of the Joinder Complaint, fell outside acceptable professional standards and that such conduct was a cause in bringing about the harm; AND/ OR [ ] the claim that Defendant deviated from an acceptable professional standard is based solely on allegation that other licensed professionals for whom this Defendant is responsible deviated from an acceptable professional standard and an appropriate licensed professional has supplied a written statement to the undersigned that there is a basis to conclude that the care, skill or knowledge exercised or exhibited by the other licensed professional in the treatment, practice or work that is the subject of the Complaint, fell outside acceptable professional standards and that such conduct was a cause in bringing about the harm; OR [ ] expert testimony of an appropriate licensed professional is unnecessary for prosecution of the claim against this Defendant. Respectfully submitted, MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN //"/" h4l, "?d ZL2 By: A ur . Lefco, Esquire PA Id. No. 12909 1845 Walnut Street Philadelphia, PA 19103 (215) 575-2588 awlefco(a-,mdwcp-?co'm By: Christ her J. Conrad, Es uire PA. Id. No. 202348 4200 Crums Mill Road, Suite B Harrisburg, PA 17112 (717)-651- 651-3531 cjconrad mdwc , com Date: September 2, 2010 CERTIFICATE OF SERVICE The undersigned, as counsel for Defendant Martin M. Sacks and Associates, hereby certifies that a copy of the foregoing Certificate of Merit was served via United States Mail, postage prepaid, on the 2nd day of September, 2010, upon the following counsel of record: David H. Martineau, Esquire Theodore Adler, Esquire Salzmann Hughes, PC Reager & Adler, PC 354 Alexander Spring Road, Suite 1 2331 Market Street Carlisle, PA 17015 Camp Hill, PA 17011 Bryon R. Kaster, Esquire Dickie, McCarney & Chilcote, P.C. 1200 Camp Hill Bypass, Suite 205 Camp Hill, PA 17011-3700 Respectfully submitted, MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN By: CHRISTOP R J. CONRAD, SQUIRE Pa. I.D. No. 202348 4200 Crums Mill Road, Suite B Harrisburg, PA 17112 (717) 651-3531 Attorneys for Defendant, Martin M. Sachs and Associates 3 ,r ' TAM SYSTEMS, INC., Plaintiff' V. L CUBED CORPORATION d/b/a TAM SYSTEMS, LENARD L. LOBAUGH : JR. AND MARTIN M. SACKS & ASSOCIATES Defendants V. DAVID A. BARIC, ESQUIRE AND BARIC SCHERER, Additional Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PA CIVIL ACTION - LAW NO. 09-8336-CV JURY TRIAL DEMANDED 7f Mr J .? C- CERTIFICATE OF MERIT AS TO ADDITIONAL DEFENDANT AND BARIC SCHERER The undersigned counsel for Defendant Martin M. Sacks & Associates certify that: [ ] an appropriate licensed professional has supplied a written statement to the undersigned that there is a basis to conclude that the care, skill or knowledge exercised or exhibited by Additional Defendant in the treatment, practice, or work that is the subject of the Joinder Complaint, fell outside acceptable professional standards and that such conduct was a cause in bringing about the harm; AND/ OR [X] the claim that Additional Defendant deviated from an acceptable professional standard is based solely on allegation that other licensed professionals for whom this Additional Defendant is responsible deviated from an acceptable professional standard and an appropriate 1 . . licensed professional has supplied a written statement to the undersigned that there is a basis to conclude that the care, skill or knowledge exercised or exhibited by the other licensed professional in the treatment, practice or work that is the subject of the Joinder Complaint, fell outside acceptable professional standards and that such conduct was a cause in bringing about the harm; OR [ ] expert testimony of an appropriate licensed professional is unnecessary for prosecution of the claim against this Defendant. Respectfully submitted, MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN By:' rt r W. Lefco, Esquire PA Id. No. 12909 1845 Walnut Street Philadelphia, PA 19103 (215) 575-2588 awlef/cogmdwcg.com By: ! G Christo er J. Conra , Esquire PA. Id. No. 202348 4200 Crums Mill Road, Suite B Harrisburg, PA 17112 (717)-651- 651-3531 ciconradC&,mdwc ,_com Date: September 2, 2010 2 V ' CERTIFICATE OF SERVICE The undersigned, as counsel for Defendant Martin M. Sacks and Associates, hereby certifies that a copy of the foregoing Certificate of Merit was served via United States Mail, postage prepaid, on the 2"a day of September, 2010, upon the following counsel of record: David H. Martineau, Esquire Theodore Adler, Esquire Salzmann Hughes, PC Reager & Adler, PC 354 Alexander Spring Road, Suite 1 2331 Market Street Carlisle, PA 17015 Camp Hill, PA 17011 Bryon R. Kaster, Esquire Dickie, McCamey & Chilcote, P.C. 1200 Camp Hill Bypass, Suite 205 Camp Hill, PA 17011-3700 Respectfully submitted, MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN By: ?vJ CHRISTOPH J. C D, ESQUIRE Pa. I.D. No. 202348 4200 Crums Mill Road, Suite B Harrisburg, PA 17112 (717) 651-3531 Attorneys for Defendant, Martin M. Sacks and Associates 3 #38 TAM SYSTEMS, INC., Plaintiff V. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA L CUBED CORPORATION d/b/a TAM SYSTEMS, LEONARD L. LOBAUGH JR. AND MARTIN M. SACKS AND ASSOCIATES, Defendant V. DAVID A. BARK, ESQUIRE & BARK AND SCHERER, Additional Defendants N0.2009-8336 CIVIL TERM 0 r~ c o -~•~ a .~ ~' a m ~ ~~ s n. ~~ -t ~ 'r ~ --s o c ~ -~ o ~- ~ ~ ~- ~ ~~ N T1 ~f ~ --' ~ -~ -< IN RE: PRELIMINARY OBJECTIONS IN THE NATURE OF A DEMURRER TO THE JOINDER COMPLAINT BEFORE GUIDO. MASLAND JJ. ORDER OF COURT AND NOW, this 15TH day of OCTOBER, 2010, there being no privity of contract between Defendant Martin M. Sacks and Associates and the additional Defendants, the preliminary objections of the additional Defendants to the joinder complaint sounding in legal malpractice are SUSTAINED and the joinder complaint is DISMISSED. ~,--. y the Co , J Bryon R. Kaster, Esquire oseph S.D. Christof, II, Esquire Edward E. Guido, J. Court Administrator - ~c~~s~i~ :sld e ~~ ,-~~ L ® is /rv ~~ Salzmann Hughes, P.C. E73 .. ? James D. Hughes, Esquire - :,, W ; --y- Attorney I.D. No. 58884 BY: David H. Martineau, Esquire Attorney I.D. No. 84127 f- -? 354 Alexander Spring Road, Suite l Carlisle, PA 17015 • Telephone: 717x249-6333 Attorneys for Plaintiff - > TAM SYSTEMS, INC., IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. DOCKET NO. 2009-8336 L CUBED CORPORATION, d/b/a CIVIL ACTION - LAW TAM SYSTEMS, LENARD L. LOBAUGH, JR. & MARTIN M. SACKS &' ASSOCIATES, Defendants JURY TRIAL DEMANDED PRAECIPE TO DISCONTINUE TO THE PROTHONOTARY: Please mark the above captioned case settled and discontinued with prejudice pursuant to Pa.R.C.P. 229(a). By: May 29, 2012 Respectfully Submitted, SALZMANN HUGHES, P.C. \\) James D. Hughes, Esquire Attorney I.D. 58884 David H. Martineau, Esquire Attorney I.D. No. 84127 354 Alexander Spring Road, Suite 1 Carlisle, PA 17015 (717) 249-6333 Attorneys for Plaintiff CERTIFICATE OF SERVICE I, David H. Martineau, Esquire, hereby certify that on the 29th day of May 2012, 1 served a true and correct copy of the foregoing Praecipe to Discontinue by depositing the same in the United States Mail, fist class mail, postage prepaid, and addressed to the following: Arthur W. Lefco, Esquire MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN 1845 Walnut Street Philadelphia, PA 19103 Christopher J. Conrad, Esquire MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN 4200 Crumbs Mill Road, Suite B Harrisburg, PA 17112 Theodore A. Adler, Esquire REAGER & ADLER, P.C. 2331 Market Street Camp Hill, PA 17011 David H. Martineau