HomeMy WebLinkAbout10-2612MEYERSON & O'NEILL
By: Jack Meyerson, Esquire
Peter A. Greiner, Esquire
Identification Nos. 16405/81957
1700 Market Street, Suite 3025
Philadelphia, PA 19103
(215) 972-1376
KEITH TOLBERT, SR.
1275 Gayman Road
Chambersburg, PA 17202
Plaintiff
V.
RALPH E. TOLBERT MASONRY,
950 Hollywell Avenue
Chambersburg, PA 17201
and
RALPH E. TOLBERT
1262 Sollenberger Road
Chambersburg, PA 17201
and
KURT TOLBERT
1675 Gayman Road
Chambersburg, PA 17202
Defendants
NOTICE
APP
200 "PR 1) 1,r'91f?
Attorneys for Plaintiff
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PA
CIVIL ACTION- LAW
INC. :
NO. 16 -o`dg,I --k C tot, L'-7&z-Py-1
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 171013
1-800-990-9108
(717) 249-3166
AVISO
Le han demandado a usted en la corte. Si usted quiere defenderse de estas
demandas expuestas en las paginas siguientes, usted tiene veinte (20) dia de
plazo al partir de la fecha de la demanda y la notificaci6n. Hace falta asentar
una comparencia escrita o en persona o con un abogada y entregar a la corte
en forma escrita sus defensas o sus objeciones a las demandas en contra de su
persona. Sea avisado que si usted no se difiende, la corte tomara medidas y
puede continuer la demanda en contra suya sin previo aviso o notificaci6n.
Adembs, la corte puede dicidir a favor del demandante y requiere que usted
cumpla con todas las provisioner de esta demanda. Usted puede perder dinero
o sus propiedades u otros derechos importantes para usted.
LLEVE ESTA DEMANDA A UN ABOGADO INMEDIATAMENTE. SI
NO TIENE ABOGADO 0 SI NO TIENE EL DINERO SUFFICIENTE DE
PAGAR TAL SERVICIO. VAYA EN PERSONA O LLAME POR
TELEFONO A LA OFICINA CUYA DIRECCION SE ENCUENTRA
ESCRITAABAJO PARA AVERIGUAR DONDE SE PUEDE CONSEGUIR
ASISTENCIA LEGAL.
CUMBERLAND COUNTY BAR ASSOCIATION
32 South Bedford Street
Carlisle, 171013
1-800-990-9108
(717) 249-3166
e K? 70??
1t '?
MEYERSON & O'NEILL
By: Jack Meyerson, Esquire
Peter A. Greiner, Esquire
Identification Nos. 16405/81957
1700 Market Street, Suite 3025
Philadelphia, PA 19103
(215) 972-1376
KEITH TOLBERT, SR.
1275 Gayman Road
Chambersburg, PA 17202
Plaintiff
V.
RALPH E. TOLBERT MASONRY, INC
950 Hollywell Avenue
Chambersburg, PA 17201
and
RALPH E. TOLBERT
1262 Sollenberger Road
Chambersburg, PA 17201
and
KURT TOLBERT
1675 Gayman Road
Chambersburg, PA 17202
Defendants
Attorneys for Plaintiff
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY, PA
CIVIL ACTION- LAW
NO.
VERIFIED COMPLAINT
Plaintiff, Keith Tolbert, Sr., for his verified complaint avers as follows:
PRELIMINARY STATEMENT
1. This action arises following the negotiation of a settlement of Plaintiffs
minority shareholder claims which Defendants without valid justification have reneged
on and refused to fund. More particularly, Plaintiff Keith Tolbert is a minority
shareholder of Defendant Ralph E. Tolbert Masonry ("RETM"). Plaintiff alleged that he
was frozen out of RETM, as Defendants Ralph E. Tolbert and Kurt Tolbert, his father
and brother, respectively, who together own the controlling 55% share of RETM, had
taken control of the businesses and systematically paid themselves and others money
ti
in violation of their fiduciary duties to the company and its shareholders, without the
knowledge and/or consent of the other shareholder, Plaintiff Keith Tolbert. In lieu of
filing a derivative action in the Court of Common Pleas, Plaintiff and Defendants agreed
to mediate their dispute before a private, third-party mediator, Theodore Adler, Esq.
With the assistance of the Mr. Adler, the parties agreed to a settlement of their dispute.
The parties executed a hand-written settlement agreement and release in the
mediator's office that night, which was reviewed and signed by all parties, with their
counsel present and witnessed by the mediator. However, Defendants are now
refusing to perform their obligations under the contract and are thus, in breach of the
enforceable contract, the signed settlement agreement.
PARTIES
2. Plaintiff, Keith Tolbert, Sr., is an individual residing at 1275 Gayman
Road, Chambersburg, PA is a minority shareholder of defendant RETM owning 45% of
the shares of RETM.
3. Defendant RETM is a Pennsylvania corporation with its principal place of
business and registered office in the Commonwealth located at 950 Hollywell Avenue,
Chambersburg, PA.
4. Defendant Kurt Tolbert is an individual and resident of the Commonwealth
of Pennsylvania residing at 1675 Gayman Road, Chambersburg, PA, who at all times
relevant thereto and at present is one of the controlling parties of RETM, as he owns
45% of the shares of RETM and is Vice-President of RETM. Defendant Kurt Tolbert is
the brother of Plaintiff.
5. Defendant Ralph E. Tolbert, is an individual and resident of the
2
Commonwealth of Pennsylvania, residing at 1262 Sollenberger Road, Chambersburg,
PA, who at all times relevant thereto and at present is one of the controlling parties of
RETM, as he owns 10% of the shares of RETM and is President of RETM. Defendant
Ralph Tolbert is the father of Plaintiff.
6. This court has jurisdiction over defendants and this cause of action
as the matters complained of occurred within the Commonwealth of Pennsylvania, and
the parties are residents of the Commonwealth of Pennsylvania. Venue is appropriate
pursuant to Pa. R. Civ. 1006, as the contract which is the source of this claim was
negotiated and signed in Camp Hill, Cumberland County, Pennsylvania.
OPERATIVE FACTS
7. Beginning in January 2007, Plaintiff Keith Tolbert has been a 45%
shareholder of RETM. For many years prior to that until approximately April 2009,
Plaintiff was also employed by RETM.
8. Plaintiff was asked to leave the employ of RETM in April 2009, due to a
falling out with his fellow shareholder, Defendant Kurt Tolbert. The two of them tried
unsuccessfully to negotiate a buy-out of Plaintiffs shares of RETM through June 2009.
9. On or about July 10, 2009, after numerous requests for access to the
books and records of the corporation, Plaintiff filed a suit in mandamus in this Court at
Case No. 2009-3230 against RETM , Ralph E. Tolbert, and Kurt Tolbert, seeking an
Order compelling production of those requested documents. The parties resolved the
mandamus action, and Plaintiff was given access to some of the records of RETM.
10. Upon review of the records, Plaintiff determined that he had a possible
claim individually, and derivatively on behalf of the corporation, against Ralph and Kurt
3
t1 1?
Tolbert for what he perceived to be improper actions in diverting the assets of the
corporation for their own personal gain, and to the detriment of the corporation and its
shareholders, including Plaintiff Keith Tolbert. Plaintiff, through his counsel, notified
Defendants' counsel of his potential claims, and the parties agreed that in lieu of filing a
derivative action in the Court of Common Pleas, where Plaintiff would have sought the
appointment of a receiver in advance of dissolution of the corporation, Plaintiff and
Defendants would mediate their dispute before a private, third-party mediator,
Theodore Adler, Esq.
11. On or about, March 8, 2010, the parties met with Mr. Adler, to attempt to
resolve the disputes amongst them including Plaintiff's status as a former employee of
RETM and shareholder of RETM. The parties also sought to settle Plaintiffs claims
through a purchase of Plaintiff's shares in RETM. All parties and their respective
counsel were present at the March 8, 2010 meeting at Mr. Adler's office in Camp Hill,
PA.
12. With the assistance of Mr. Adler, the parties agreed to a settlement of
their disputes at Mr. Adler's office in Camp Hill, PA.
13. The parties executed a hand-written settlement agreement and release
in Mr. Adler's office that night, which was reviewed and signed by all parties, with their
counsel present and witnessed by Mr. Adler. A copy of that Settlement Agreement and
Mutual Release ("SAMR") is attached hereto as Exhibit "A."
14. In summary, the terms were as follows: Defendants would pay to Plaintiff
Keith Tolbert the total sum of $380,000.00 in exchange for any and all interest he had
in RETM and for all parties to waive all claims amongst themselves for the alleged
4
improper actions of Defendants Ralph and Kurt Tolbert in mismanaging RETM and
misappropriating RETM's funds for their own benefit, as well as any corresponding
claims Defendants may have had against Plaintiff.
15. Additionally, the parties agreed that unless F&M Trust, the bank that has
two sizable loans with RETM, agreed in writing to the terms of the settlement and gave
its "express written approval," that the SAMR was null and void. See Exhibit "A" at 15.
16. Under the terms of the SAMR, Defendants were obligated to transmit the
SAMR to F&M Trust ("the bank") within two (2) days of the signing of the SAMR, so they
could review it.
17. Counsel for the Defendants, Andrew J. Benchoff, Esq., forwarded a copy
of the SAMR to Kenneth Brookens of F&M Trust on March 9, 2010. A copy of the e-
mails sent by Mr. Benchoff to Mr. Brookens and Mr. Brookens reply are attached hereto
as Exhibit "B."
18. On March 19, 2010, Mr. Brookens, as well as counsel for F&M Trust,
Stephen E. Patterson, Esq., along with Mr. Benchoff and Plaintiff's counsel, Peter A.
Greiner, conducted a phone conference wherein they disclosed to the parties that it
was the bank's position that the terms of the SAMR did not constitute an event of
default under the terms of their loans with RETM. Mr. Patterson indicated that this
position would be reduced to writing and circulated to the parties in this case.
19. Mr. Brookens forwarded an e-mail and attached letter to Mr. Benchoff
later that same day, March 19, 2010. A copy of that e-mail and attachment is attached
hereto as Exhibit "C." In the letter and e-mail, Mr. Brookens reiterated the bank's
position in express written terms, that the terms of the SAMR would in no way place
5
RETM in default of their obligations under the terms of the loans with F&M Trust, and
that the bank "trust(s) this letter will assist you in concluding the transactions
contemplated by the Settlement Agreement." See Exhibit "C."
20. Defendants' counsel, Mr. Benchoff, responded to the bank's position in an
e-mail to counsel for Plaintiff that he and his clients believed that F&M Trust's position
opened the door for the bank to be able to find RETM in default of the loans at any time
for performing under the SAMR. A copy of that e-mail and attachments is attached
hereto as Exhibit "D." Accordingly, he stated that his clients were "not comfortable with
going forward" with the SAMR and declared the agreement "null and void." See Exhibit
"D.11
21. Counsel for Plaintiff, along with the mediator, Mr. Adler, made several
attempts to clarify Mr. Benchoffs and his clients' misunderstanding about the bank's
position, but Mr. Benchoff continually refused to speak with Plaintiffs counsel or
discuss the matter with the bank or its attorney. See a-mails between Plaintiffs
counsel, the mediator, and Mr. Benchoff, attached hereto as Exhibit "E."
22. Finally, on April 5, 2010, Mr. Benchoff sent an e-mail to the mediator and
Plaintiffs counsel, once again stating his client's position that they would not go through
with the settlement. A copy of the April 5, 2010 e-mail from Mr. Benchoff to the
mediator is attached hereto as Exhibit "F."
23. In that same e-mail, Mr. Benchoff again stated that he and his clients had
no interest in speaking with the bank to resolve the alleged problems Defendants
claimed to have with the bank's position, as communicated on March 19, 2010. See
Exhibit "F."
6
24. Mr. Benchoff also stated in the April 5, 2010 e-mail for the first time that
the financial situation of RETM was a factor in why his clients had decided to refuse to
go forward with the settlement. Id.
25. Plaintiff's counsel sent an e-mail later that same day to Mr. Benchoff
offering to conference with the bank's attorney who would address the Defendants'
issues with the bank's position, but Mr. Benchoff refused to even discuss the matter
with the bank's attorney in a return e-mail later that day. A copy of those a-mails are
attached hereto as Exhibit "G."
COUNT I -
BREACH OF CONTRACT
26. Plaintiff incorporates by reference the preceding paragraphs of his
Complaint as though the same were set forth herein at length.
27. On March 8, 2010, Plaintiff Keith Tolbert entered into a valid, binding,
written contract with Defendants Ralph E. Tolbert and Kurt Tolbert, individually and on
behalf of Defendant RETM, to settle and release all claims amongst the parties arising
out of Plaintiffs employment by and ownership of RETM for valid consideration to be
paid to Plaintiff under the terms of the SAMR. See Exhibit A."
28. Plaintiff has performed all of the conditions of the contract required of him
by the SAMR and is ready an willing to render any and all future performance under the
terms of the SAMR.
29. Defendants have repudiated the contract reached on March 8, 2010,
claiming (1) the financial situation of the Defendants, and (2) the failure to satisfy a
condition precedent; the failure of F&M Trust to provide "express written approval" of
7
the settlement, pursuant to paragraph 5 of the SAMR. See Exhibit "F."
30. Defendants' position is without merit, as F&M Trust, a third party with no
privity to the contract between Plaintiff and Defendants, has satisfied the provision of
paragraph 5 of the SAMR in its letter of March 19, 2010, wherein it expressly provides
in writing that the terms of the SAMR "do not constitute an Event of Default" under
either of the loans F&M has with Defendants, thus providing the express written
approval sought by the parties to the SAMR.
31. Plaintiff has continually brought this fact to Defendants' attention and
sought to clear up any alleged misunderstanding on Defendants' part, yet Defendants
and their counsel refuse to even discuss the matter with Plaintiffs counsel or the bank,
continually stating their repudiation of the contract, despite the clear language in the
March 19, 2010 letter to the contrary.
32. Under the terms of the SAMR, Defendants were contractually obligated to
pay Plaintiff the sum of $20,000.00 within two (2) days of the bank's approval, and
another $30,000.00 within fourteen (14) days after the first payment.
33. The bank's letter was dated March 19, 2010. Accordingly, the first
payment of $20,000.00 was due to Plaintiff from Defendants by March 21, 2010. The
second payment of $30,000.00 was due to Plaintiff by April 4, 2010.
34. To date, Defendants have refused to make the payments described
herein and have repudiated the SAMR as stated herein.
35. Defendants' attorney's representation that they believe that the "express
written approval" provision of the bank has not been met and that the bank has left
open the possibility of the bank sometime in the future finding Defendants in default for
8
the payments provided for in the SAMR to Plaintiff under clause (3) of the Negative
Covenant is without merit, as described herein, and is merely a ruse seeking to cover
up Defendants' change of heart in performing under the terms of the SAMR, as
Defendants' attorney will not even entertain the possibility of a clarifying discussion with
the bank or its attorney, which would eliminate the need for the instant Motion.
36. Accordingly, Defendants are in breach of the terms of the SAMR, a legally
binding contract.
WHEREFORE, Plaintiff respectfully prays that this Honorable Court enter an
Order:
(a) finding Defendants in default of their obligations under the
Settlement Agreement and Mutual Release;
(b) directing that Defendants specifically perform the terms of the
Settlement Agreement and Mutual Release;
(c) reducing to judgment the total amount agreed between the parties,
$380,000.00, in favor of Plaintiff Keith Tolbert against Defendants
jointly and severally;
(d) imposing interest and reasonable counsel fees and costs
associated with this Motion, as will be supplied by Plaintiffs
counsel at the time of the Order; and
(e) such other relief as the Court deems just, proper and equitable.
Respectfully submitted,
Dated: K'2a Ito Peter A. Greiner
Jack Meyerson
Meyerson & O'Neill
1700 Market Street, Suite 3025
Philadelphia, PA 19103
Attorneys for Plaintiff Keith Tolbert, Sr.
9
VERIFICATION
Keith Tolbert, Sr. hereby verifies that he is the plaintiff in this action; that the
statements made in the foregoing Pleading are true and correct to the best of his
knowledge, information and belief; and that these statements are made subject to the
penalties of 18 Pa. C.S. §4904 relating to unsworn falsification to authorities.
KEITH TOLE RT, SR.
DATE: 4" g /L)
10
EXHIBIT "A"
In re: Mediation between
Ralph E. and Kurt E. Tolbert
and
Keith Tolbert_ Sr.
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
WHEREAS, Ralph E. and Kurt E. Tolbert (RKT) and Keith Tolbert, Sr. (KT) are
shareholders in a company known as Ralph E. Tolbert Masonry, Inc. (RETM); and
WHEREAS, KT has terminated his employment with RETM; and
WHEREAS, numerous disputes, controversies and claims have arisen as a result
of KT's terminating his employment with RETM.
NOW THEREFORE, in consideration of the following mutual promises,
undertakings, covenants and representations contained herein, the parties, intending to be legally
bound, agree as follows:
(A)
I . As to RKT the following: V-K r ?h d? ET+^ s N ?ru- 4 fl
'[o 1L TIE Sv-A bF 425 Ioa4. ao gci ^(s-t? C45£ of 9,115t,.A9S
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or' To - rout is 414,44 /sHOf-
3. Payment and/or other actions set forth above constitute adequate
consideration for this agreement and its undertakings, including the covenants, representations
and promises as provided hereinabove and otherwise from and to all parties to this agreement.
4. This agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors, unless and until superseded by a substitute agreement signed
by all parties.
S ??E 2wf t a?? s (? co `?ej?'k Ur*-
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e? s ! (?e ?wtd a- d Vtz
EXHIBIT "B"
Peter Greiner
From: Ken Brookens [Ken.Brookens@f-mtrust.com]
Sent: Tuesday, March 09, 2010 10:37 AM
To: Andrew Benchoff
Cc: Kurt Tolbert (E-mail); Peter Greiner; Kurt Tolbert (E-mail 2); Ralph Tolbert (E-mail)
Subject: Re: Settlement Agreement and Mutual Release
To all,
This is to notify everyone that I am in receipt of the Settlement Agreement.
Sincerely,
Ken
Kenneth W. Brookens
Commercial Services Relationship Manager Assistant Vice President
(717) 261-3523 (direct)
(717) 261-3688 (fax)
http://www.fmtrustonline.com
Financial Solutions...from people you know
>>> Andrew Benchoff <Andrew@kornfield.net> 3/9/2010 8:36 AM >>>
Dear Mr. Brookens,
The attached Settlement Agreement and Mutual Release pertaining to Ralph E. Tolbert
Masonry, Inc. and its shareholders is conditioned on lender approval. We had to deliver
it to you within 2 days of its signature. I am copying counsel for Keith Tolbert so he is
aware of its delivery to you. Could you please let us know if you have any questions
about it. Kurt and I would also like to discuss it with you when you have the
opportunity. Thank you.
AJ <<SettlementAgreement.03.08.10.pdf>>
Andrew J. Benchoff, Esq.
Kornfield and Benchoff, LLP
17 North Church Street
Waynesboro, PA 17268
(717) 762-8222
(717) 762-6544 FAX
andrew@kornfield.net
NOTICE: The information contained in this transmission is intended for the exclusive use
of the addressee(s) and may contain information that is privileged, confidential, and/or
protected from disclosure. If you are not the intended recipient, do not disseminate,
distribute or copy this communication. If you have received this transmission in error,
please immediately reply to the sender and then delete it. Thank you for your compliance.
PRIVILEGED AND CONFIDENTIAL:
This communication, including attachments, is for the exclusive use of addressee and may
contain proprietary, confidential and/or privileged information. If you are not the
intended recipient, any use, copying, disclosure, dissemination or distribution is
strictly prohibited. If you are not the intended recipient, please notify the sender
immediately by return e-mail, delete this communication and destroy all copies.
I
EXHIBIT "C"
March `19, 2010
Ralph E. Tolbert Masonry, Inc.
Mr. Ralph E. Tolbert
Mr. Kurt E. Tolbert
950 Hollywell Avenue
Chambersburg, PA 17201
In re: Mediation between Ralph E. and Kurt E. Tolbert and Keith Tolbert, Sr.
Dear Messrs. Tolbert:
You have presented to us a copy of a certain Settlement Agreement and Mutual Release
(the "Settlement Agreement"), dated March 8, 2010, in connection with the captioned
matter.
We have reviewed the Settlement Agreement, and have concluded that the terms thereof,
if fully complied with, do not constitute an Event of Default under the Loan Documents
covering either the $920,000 term loan or the $850,000 line of credit loan entered into by
Ralph E. Tolbert Masonry, Inc. (the "Company") with the Bank on January 29, 2010.
However, we call your attention to the provisions contained in the $920,000 Promissory
Note under the heading "Default in Favor of Third Parties," and remind you that a default
under the Settlement Agreement could constitute an Event of Default under said
Promissory Note and the related Loan Documents.
Please also be reminded that the Company's right to pay dividends on the Company's
stock is limited by and subject to the provisions of clause (3) of the Negative Covenant,
entitled "Continuity of Operations," contained in the Business Loan Agreement.
Accordingly, prior to the payment of any such dividends, the Company must obtain the
written consent of the Bank, even though such payment or payments are proposed to be
made following the satisfaction by the Company of the financial obligations incurred by
it under the Settlement Agreement.
The Bank reserves in all respects all of it rights and remedies set forth in the Loan
Documents, including, without limitation, its enforcement rights and remedies.
We trust that this letter will assist you in concluding the transactions contemplated by the
Settlement Agreement.
Very trul yours
Ke th W. ens
Assistant Vice President
Commercial Services Relationship Manager
717-264-6116, aW2"1 16 . P.O. BoX 6010 Chambersburg, PA 17201-6010
1? A?1V C t/C L S fl, t+tl tf $ ; f .Q?l+t Q #? F Y 0 ll Kd OW
F-I
EXHIBIT "D"
Peter 6Wner
From: Andrew Benchoff [Andrew@kornfield.net]
Sent: Monday, March 22, 2010 2:17 PM
To: Peter Greiner
Cc: Ralph Tolbert (E-mail); Kurt Tolbert (E-mail); Kurt Tolbert (E-mail 2)
Subject: FW: Settlement Agreement and Mutual Release
Attachments: Tolbert Letter 3-19-10.pdf; Clause(3)ofNegativeCovenants.pdf
Tolbert Letter Clause(3)ofNegativ
3-19-10.pdf (34... eCovenants.p...
Pete,
Below is the e-mail from F&M Trust along with an attached letter dated March 19, 2010,
which I was able to review with my clients this morning.
Clause (3) of the Negative Covenants explains in pertinent part that Borrower covenants
and agrees without the prior written consent of Lender Borrower shall not " . . . (3) pay
any dividends on Borrower's stock . . ., or purchase or retire any of Borrower's
outstanding shares or alter or amend Borrower's capital structure." The relevant language
is attached.
The Tolberts are not comfortable going forward under the Settlement Agreement and Mutual
Release because F&M Trust refused to approve the agreement, and F&M Trust will be able to
consider the Settlement Agreement and Mutual Release an Event of Default under the Loan
Documents at any time given the bank's reservation of rights in the letter. Therefore,
the agreement is null and void.
Please let me know if you have any questions or comments. Thanks.
AJ
Andrew J. Benchoff, Esq.
Kornfield and Benchoff, LLP
17 North Church Street
Waynesboro, PA 17268
(717) 762-8222
(717) 762-6544 FAX
andrew@kornfield.net
NOTICE: The information contained in this transmission is intended for the exclusive use
of the addressee(s) and may contain information that is privileged, confidential, and/or
protected from disclosure. If you are not the intended recipient, do not disseminate,
distribute or copy this communication. If you have received this transmission in error,
please immediately reply to the sender and then delete it. Thank you for your compliance.
-----Original Message-----
From: Ken Brookens [mailto:Ken.Brookens@f-mtrust.com]
Sent: Friday, March 19, 2010 5:18 PM
To: Kurt Tolbert
Cc: Bill Snell; Andrew Benchoff; Steve Patterson
Subject: Settlement Agreement and Mutual Release
Kurt,
In reviewing the March 08, 2010 Settlement Agreement and Mutual Release (SAMR) with our
attorney, we are of the opinion that providing an approval (or disapproval), as required
under line item #5 of the SAMR, may and/or could, attach the Bank as a party to the
agreement. As such, we have decided to provide you with a letter reflecting that we have
1
reviewed the SAMR and that the terms do not or will not place the business in default,
provided the company complies fully with the SAMR. I will prepare the original letter for
mailing; however, a copy has been attached to this email. If you have any questions,
please do not hesitate to contact me.
Best Regards,
Ken
PRIVILEGED AND CONFIDENTIAL:
This communication, including attachments, is for the exclusive use of addressee and may
contain proprietary, confidential and/or privileged information. If you are not the
intended recipient, any use, copying, disclosure, dissemination or distribution is
strictly prohibited. If you are not the intended recipient, please notify the sender
immediately by return e-mail, delete this communication and destroy all copies.
2
EXHIBIT "E"
Peter Greiner
From: Andrew Benchoff [Andrew@kornfield.net]
Sent: Thursday, March 25, 2010 1:41 PM
To: Peter Greiner
Cc: Jack Meyerson; Ralph Tolbert (E-mail); Kurt Tolbert (E-mail); Kurt Tolbert (E-mail 2)
Subject: RE: Settlement Agreement and Mutual Release
Pete,
I will speak with my clients about your e-mail and see what they think. The bank-approval
contingency in the Settlement Agreement and Mutual Release is clear and unequivocal and
has not been and will not be met. The bank's e-mail and letter speak for themselves. To
suggest that the contingency has been met is simply incorrect. I must also point out
again that Clause (3) of the Negative Covenants, which the bank also referenced in its
letter, prohibits the company from purchasing outstanding shares or altering the company's
capital structure without prior written approval.
After Ken Brookens verbally stated F&M Trust's position to us by telephone, you even
questioned Mr. Brookens that the Settlement Agreement and Mutual Release required express
written approval not simply a statement that the Settlement Agreement and Mutual Release
was not an Event of Default under the Loan Documents. Attorney Steve Patterson then
explained the bank's position and why F&M Trust was unwilling to expressly approve the
Settlement Agreement and Mutual Release. Because of the bank's requirements of and on the
company, the Tolberts required express written approval by the bank to perform under the
Settlement Agreement and Mutual Release, which was not received.
My clients have spent substantial time and resources addressing your client's claims and
if they do not want me to speak to you by telephone about matters we clearly disagree
about, then I will honor that decision. If, however, they direct me to follow-up with you
by telephone I will. In either event, we are confident that if litigation ensues a Court
will dismiss any application to dissolve the company based on your client's unclean hands
and urge you to reassess your client's legal position in that regard.
AJ
Andrew J. Benchoff, Esq.
Kornfield and Benchoff, LLP
17 North Church Street
Waynesboro, PA 17268
(717) 762-8222
(717) 762-6544 FAX
andrew@kornfield.net
NOTICE: The information contained in this transmission is intended for the exclusive use
of the addressee(s) and may contain information that is privileged, confidential, and/or
protected from disclosure. If you are not the intended recipient, do not disseminate,
distribute or copy this communication. If you have received this transmission in error,
please immediately reply to the sender and then delete it. Thank you for your compliance.
-----Original Message-----
From: Peter Greiner [mailto:pgreiner@meyersonlawfirm.com]
Sent: Thursday, March 25, 2010 12:17 PM
To: Andrew Benchoff
Cc: Jack Meyerson
Subject: RE: Settlement Agreement and Mutual Release
AJ:
We are very troubled not only by your clients' position in abandoning the settlement but
your refusal to even pick up the phone to discuss these issues. Our reading of the bank's
letter is that the bank expressly stated that they do not believe that the settlement the
parties agreed to impacts the terms and obligations of the loans Tolbert Masonry has with
1
F&M Trust. While they did not expressly use the word "approve" regarding the settlement,
as they indicated they could not do as a third party, they clearly indicated the
settlement was not an "Event of Default." To take their position any other way other than
that their letter was an "approval" of the settlement for purposes of the settlement seems
to be counterintuitive.
We believe the parties entered into a legally binding contract when they agreed to the
terms of the Settlement Agreement and Mutual Release on March 8, 2010. The provision for
bank approval has been met, yet your clients, for some reason, refuse to honor the terms
of the agreement and claim the agreement is "null and void." The only other alternative
for the parties is litigation, which your clients certainly must know will mean the end of
Tolbert Masonry. It is in everyone's best interests to at least speak about the issues
your client have in light of the bank's letter and to seek clarification of the bank's
position, if necessary.
Please respond to this letter by the end of business today. Jack and I are available for
a call at your convenience today or tomorrow. We look forward to hearing from you.
Thanks.
Pete
Peter A Greiner, Esquire
Meyerson & O'Neill
1700 Market Street
Suite 3025
Philadelphia, Pa. 19103
(215) 972-1376
fax: (215) 972-0277
www.meyersonlawfirm.com
NOTICE: This email message and any attachments hereto contain confidential information and
may be protected by the attorney-client privilege and/or work product doctrine. If you are
not the intended recipient, you must not review, disclose, copy, disseminate, distribute
or use any of the information contained in, or attached to this email transmission. If you
have received this email in error, please immediately notify me by forwarding this email
to pgreiner@meyersonlawfirm.com or by telephone at (215) 972-1376 and then delete the
message and its attachments from your computer. Thank you.
-----Original Message-----
From: Andrew Benchoff [mailto:Andrew@kornfield.net]
Sent: Tuesday, March 23, 2010 7:42 AM
To: Peter Greiner; Jack Meyerson
Cc: Ralph Tolbert (E-mail); Kurt Tolbert (E-mail); Kurt Tolbert (E-mail
2)
Subject: RE: Settlement Agreement and Mutual Release
Pete and Jack,
With all due respect, I am not sure there is anything further to talk about with regard to
the Settlement Agreement and Mutual Release. Mr.
Brookens' March 19 e-mail and March 19 letter clearly states that the bank will not
approve the Settlement Agreement and Mutual Release. The express, written approval
contingency has not and will not be met.
Clause (3) of the Negative Covenants (referenced below and in the March
19 letter) also makes the Settlement Agreement and Mutual Release impossible to perform.
Therefore, the Settlement Agreement and Mutual Release is null and void. If you have
comments or questions I suggest you put them in writing and I will certainly forward them
to my clients for their consideration. Thanks.
AJ
Andrew J. Benchoff, Esq.
Kornfield and Benchoff, LLP
17 North Church Street
Waynesboro, PA 17268
(717) 762-8222
2
(717)„762-6544 FAX
4ndrew@kornfield.net
NOTICE: The information contained in this transmission is intended for the exclusive use
of the addressee(s) and may contain information that is privileged, confidential, and/or
protected from disclosure. If you are not the intended recipient, do not disseminate,
distribute or copy this communication. If you have received this transmission in error,
please immediately reply to the sender and then delete it. Thank you for your compliance.
-----Original Message-----
From: Peter Greiner [mailto:pgreiner@meyersonlawfirm.com]
Sent: Monday, March 22, 2010 9:30 PM
To: Andrew Benchoff
Cc: Jack Meyerson
Subject: RE: Settlement Agreement and Mutual Release
AJ :
We would like to speak with you to discuss the bank's letter and your client's position.
Are you available Wed. afternoon after 2:00 pm to speak with me and Jack? Please let me
know if we can speak then.
Thanks.
Pete
Peter A Greiner, Esquire
Meyerson & O'Neill
1700 Market Street
Suite 3025
Philadelphia, Pa. 19103
(215) 972-1376
fax: (215) 972-0277
www.meyersonlawfirm.com
NOTICE: This email message and any attachments hereto contain confidential information and
may be protected by the attorney-client privilege and/or work product doctrine. If you are
not the intended recipient, you must not review, disclose, copy, disseminate, distribute
or use any of the information contained in, or attached to this email transmission. If you
have received this email in error, please immediately notify me by forwarding this email
to pgreiner@meyersonlawfirm.com or by telephone at (215) 972-1376 and then delete the
message and its attachments from your computer. Thank you
-----Original Message-----
From: Andrew Benchoff [mailto:Andrew@kornfield.net]
Sent: Monday, March 22, 2010 2:17 PM
To: Peter Greiner
Cc: Ralph Tolbert (E-mail); Kurt Tolbert (E-mail); Kurt Tolbert (E-mail
2)
Subject: FW: Settlement Agreement and Mutual Release
Pete,
Below is the e-mail from F&M Trust along with an attached letter dated March 19, 2010,
which I was able to review with my clients this morning.
Clause (3) of the Negative Covenants explains in pertinent part that Borrower covenants
and agrees without the prior written consent of Lender Borrower shall not " . . . (3) pay
any dividends on Borrower's stock . . ., or purchase or retire any of Borrower's
outstanding shares or alter or amend Borrower's capital structure." The relevant language
is attached.
3
The Tolberts are not comfortable going forward under the Settlement Agreement and Mutual
Release because F&M Trust refused to approve the agreement, and F&M Trust will be able to
consider the Settlement Agreement and Mutual Release an Event of Default under the Loan
Documents at any time given the bank's reservation of rights in the letter. Therefore,
the agreement is null and void.
Please let me know if you have any questions or comments. Thanks.
AJ
Andrew J. Benchoff, Esq.
Kornfield and Benchoff, LLP
17 North Church Street
Waynesboro, PA 17268
(717) 762-8222
(717) 762-6544 FAX
andrew@kornfield.net
NOTICE: The information contained in this transmission is intended for the exclusive use
of the addressee(s) and may contain information that is privileged, confidential, and/or
protected from disclosure. If you are not the intended recipient, do not disseminate,
distribute or copy this communication. If you have received this transmission in error,
please immediately reply to the sender and then delete it. Thank you for your compliance.
-----Original Message-----
From: Ken Brookens [mailto:Ken.Brookens@f-mtrust.com]
Sent: Friday, March 19, 2010 5:18 PM
To: Kurt Tolbert
Cc: Bill Snell; Andrew Benchoff; Steve Patterson
Subject: Settlement Agreement and Mutual Release
Kurt,
In reviewing the March 08, 2010 Settlement Agreement and Mutual Release
(SAMR) with our attorney, we are of the opinion that providing an approval (or
disapproval), as required under line item #5 of the SAMR, may and/or could, attach the
Bank as a party to the agreement. As such, we have decided to provide you with a letter
reflecting that we have reviewed the SAMR and that the terms do not or will not place the
business in default, provided the company complies fully with the SAMR.
I will prepare the original letter for mailing; however, a copy has been attached to this
email. If you have any questions, please do not hesitate to contact me.
Best Regards,
Ken
PRIVILEGED AND CONFIDENTIAL:
This communication, including attachments, is for the exclusive use of addressee and may
contain proprietary, confidential and/or privileged information. If you are not the
intended recipient, any use, copying, disclosure, dissemination or distribution is
strictly prohibited. If you are not the intended recipient, please notify the sender
immediately by return e-mail, delete this communication and destroy all copies.
4
Page 2 of 3
Sent: Monday, March 29, 2010 11:38 AM
To: Andrew Benchoff
Subject: RE: Tolbert Mediation
AJ: this is a follow-up to our phone conversation. In that conversation I suggested a conference call with
the bank and its counsel to discuss a modification to its March 19, 2010 letter so as to allay your client's
concerns. If the bank were to state in writing that (a) payments to fund the settlement agreement are not
considered dividends, (b) that such payments do not need prior bank approval and (c) making the
payments provided for in the settlement agreement does not constitute a default under clause (3) of the
Negative Covenant, will your clients move forward with the settlement? Thanks. Ted
Theodore A. Adler Esq.
Reager & Adler PC
2331 Market Street
Camp Hill, Pa. 17011
717-763-1383
717-730-7366 (fax)
tadler __reageradlerpc.com
From: Andrew Benchoff [mailto:Andrew@kornfield.net]
Sent: Tuesday, February 23, 2010 12:56 PM
To: Ted Adler
Subject: RE: Tolbert Mediation
Dear Mr. Adler,
This Friday, February 26 1 am scheduled to be at the Conference for County Bar Leaders in Lancaster
County all day. In addition, I am in the midst of preparing for a custody conciliation conference scheduled
for Tuesday, March 2, trial scheduled for March 3, and working on several other pressing matters. Based
on those matters I respectfully request an extension of the deadline by which I must file Party One's
mediation memoranda through Tuesday, March 2. With that deadline I can have Party One's mediation
memoranda and exhibits in the mail to you by the end of the day on March 1 at the latest (and I will be able
to provide you with at least faxed copies of Party One's mediation memoranda by March 1 as well).
Thank you for your consideration in this matter. Please let me know if that request is workable. Talk to
you soon.
AJ
Andrew J. Benchoff, Esq.
Kornfield and Benchoff, LLP
17 North Church Street
Waynesboro, PA 17268
(717) 762-8222
(717) 762-6544 FAX
andrew@kornfield.net
NOTICE: The information contained in this transmission is intended for the exclusive use of the addressee
(s) and may contain information that is privileged, confidential, and/or protected from disclosure. If you are
not the intended recipient, do not disseminate, distribute or copy this communication. If you have received
this transmission in error, please immediately reply to the sender and then delete it. Thank you for your
compliance.
-----Original Message-----
From: Alana Souders [mailto:asouders@ReagerAdlerpc.com]
4/6/2010
Page 1 of 4
Peter Greiner
From: Ted Adler [TAdler@ReagerAdierpc.com]
Sent: Monday, March 29, 2010 6:09 PM
To: Peter Greiner
Subject: Re: Tolbert v. Tolbert Masonry
I have not heard back since I sent him an email this morning. Ted
Sent from my Whone
On Mar 29, 2010, at 6:06 PM, "Peter Greiner" <nereiner @meyersonlawfirm.com> wrote:
Ted:
Just wondering if you heard anything more from AJ today. I spoke with Steve Patterson, and he
agreed that the bank's position was not intended to reserve any right to find Tolbert Masonry in
default for payments to our client as "dividends." It sounds like he would be amenable to putting
that in writing, but he said he wanted to speak with AJ first.
Our client is understandably losing patience with this turn of events. We hope we can get this issue
resolved this week. I am available tomorrow to speak with you and AJ, and I can arrange to get
Steve and Ken Brookens from the bank on the line, if need be. If we can't get this worked out, we
will have no choice but to explore all available legal options and their respective consequences,
which I'm not sure AJ's clients fully understand.
Thank you for your continuing efforts. Talk to you soon
Pete
Peter A Greiner, Esquire
Meyerson & O'Neill
1700 Market Street
Suite 3025
Philadelphia, Pa. 19103
(215) 972-1376
fax: (215) 972-0277
www.meyersonlawfirm.com
NOTICE: This email message and any attachments hereto contain confidential information
and may be protected by the attorney-client privilege and/or work product doctrine. If you
are not the intended recipient, you must not review, disclose, copy, disseminate, distribute
or use any of the information contained in, or attached to this email transmission. If you
have received this email in error, please immediately notify me by forwarding this email to
p refiner o,meyersonlawfirm.com or by telephone at (215) 972-1376 and then delete the
message and its attachments from your computer. Thank you
From: Peter Greiner
Sent: Friday, March 26, 2010 4:14 PM
To: Ted Adler'
4/6/2010
Page 1 of 1
Peter Greiner
From: Ted Adler [TAdier@ReagerAdlerpc.com]
Sent: Tuesday, March 30, 2010 1:54 PM
To: Andrew Benchoff
Cc: Peter Greiner
Subject: Tolbert Masonry
AJ; have you spoken to your clients regarding the language I suggested in my email to you yesterday and the
willingness of your clients to participate in a conference call with the bank? Please let me know one way or the
other by the end of the day. Thank you.
Theodore A. Adler Esq.
Reager & Adler PC
2331 Market Street
Camp Hill, Pa. 17011
717-763-1383
717-730-7366 (fax)
tadler reageradierpc.com
4/6/2010
EXHIBIT "F"
Page 1 of 3
Peter Greiner
From: Andrew Benchoff [Andrew@kornfield.net]
Sent: Monday, April 05, 2010 9:08 AM
To: Ted Adler
Cc: Ralph Tolbert (E-mail); Kurt Tolbert (E-mail); Kurt Tolbert (E-mail 2); Peter Greiner
Subject: RE: Tolbert Mediation
Ted,
Due to the company's financial situation caused by Keith Tolbert and the corresponding obligations owed to F&M
Trust as the company's first-place priority lender, my clients Ralph and Kurt Tolbert required a clear and
unambiguous contingency under the Settlement Agreement and Mutual Release in order for it to take effect;
namely, they required and the Agreement requires the express written approval of F&M Trust.
Per the Agreement we promptly submitted it to F&M Trust the day following the mediation for F&M Trust's
consideration.
After some deliberation Ken Brookens of F&M Trust sent the company an e-mail stating that F&M Trust could not
approve the Agreement. He also sent a letter stating that F&M Trust would not view the Settlement Agreement
and Mutual Release as an Event of Default under the Loan Documents at that time while also referencing Clause
(3) of the Negative Covenants, which prohibits the payment of dividends and prohibits the company from
purchasing outstanding shares of stock (the very intent of the Agreement). Moreover, Mr. Brookens reminded the
company of F&M Trust's enforcement and other rights and remedies and expressly reserved them. Based on the
e-mail and the letter F&M Trust could call the company's Loan at any time upon any payment to Keith in its
discretion. The company cannot be put in that tenuous position. I believe Pete Greiner sent you copies of the e-
mail and the letter based on our discussion, but if not I can provide you with copies of them.
Due to the financial situation of the company and based on F&M Trust's clear position that it will not approve the
Agreement, the Agreement contingency in paragraph 5 has not and will not be met. My clients are unwilling to
revisit F&M Trust at this time because the company needed F&M Trust's approval to be comfortable moving
forward under the Agreement. My clients are confident based upon F&M Trust's unequivocal position that there
would be no benefit to revisiting the failed contingency.
Please let me know if you have any additional questions or comments. Despite your desire to facilitate
agreement between the parties, I trust that you understand my clients' position. Thank you.
AJ
Andrew J. Benchoff, Esq.
Kornfield and Benchoff, LLP
17 North Church Street
Waynesboro, PA 17268
(717) 762-8222
(717) 762-6544 FAX
andrew@kornfield.net
NOTICE: The information contained in this transmission is intended for the exclusive use of the addressee(s) and
may contain information that is privileged, confidential, and/or protected from disclosure. If you are not the
intended recipient, do not disseminate, distribute or copy this communication. If you have received this
transmission in error, please immediately reply to the sender and then delete it. Thank you for your compliance.
-----Original Message-----
From: Ted Adler [mailto:TAdler@ReagerAdlerpc.com]
4/6/2010
EXHIBIT "G"
Page 1 of 5
Peter Greiner
From: Andrew Benchoff [Andrew@kornfield.net]
Sent: Monday, April 05, 2010 5:09 PM
To: Peter Greiner
Cc: Ralph Tolbert (E-mail); Kurt Tolbert (E-mail); Kurt Tolbert (E-mail 2)
Subject: RE: Tolbert Mediation
Pete,
My e-mail speaks for itself, and many of your assumptions are incorrect. I am aware of the state of the law with
regard to the enforcement of a settlement. I am also aware that an express written contingency on which an
agreement is based must be met in order for a settlement to take effect. Clearly that has not happened. Your
attempts to have my clients waive or revisit the required contingency under the Settlement Agreement and Mutual
Release does not eliminate it, and your characterization that the contingency was somehow met does not make it
so.
I just concluded an afternoon appointment, but I will copy my clients on this e-mail response and reach out to
them in the morning when time permits. I trust I will be able to respond to you by the end of the day tomorrow
with their position and whether they are willing to authorize me to discuss this matter with F&M Trust further.
I must advise you that you have a duty not to bring frivolous or meritless litigation pursuant to Pa.R.C.P. 1023.1.
You should also proceed with caution in making unsolicited inquiries to F&M Trust, or its counsel, or interfering in
my client's contractual relations with F&M Trust.
Sincerely,
AJ
Andrew J. Benchoff, Esq.
Kornfield and Benchoff, LLP
17 North Church Street
Waynesboro, PA 17268
(717) 762-8222
(717) 762-6544 FAX
andrew@kornfield.net
NOTICE: The information contained in this transmission is intended for the exclusive use of the addressee(s) and
may contain information that is privileged, confidential, and/or protected from disclosure. If you are not the
intended recipient, do not disseminate, distribute or copy this communication. If you have received this
transmission in error, please immediately reply to the sender and then delete it. Thank you for your compliance.
-----Original Message-----
From: Peter Greiner [mailto:pgreiner@meyersonlawfirm.com]
Sent: Monday, April 05, 2010 3:59 PM
To: Andrew Benchoff; Ted Adler
Cc: Steve Patterson; Jack Meyerson
Subject: RE: Tolbert Mediation
AJ:
We are extremely disappointed that your clients have decided to take this position. It seems apparent,
based on your latest e-mail, that the real reason why your clients have chosen to back out of the settlement
4/6/2010
Page 2 of 5
has more to do with money than the alleged issue with the bank's approval. If that is the case, please be
advised that the inability or refusal to pay a settlement is not a valid basis to seek to avoid the obligations
of such a contract.
As to your clients' alleged concerns regarding the bank's position regarding the settlement, we are
prepared to have a call with you and Steve Patterson, counsel for the bank, to clarify the bank's position. I
have apprised Mr. Patterson of your clients' belief regarding the bank's position, that somehow the bank
has reserved the ability to find your clients in default of the loans for payments under the settlement
agreement to Keith Tolbert, and he is prepared to clarify the bank's position for you. I will not speak for Mr.
Patterson or the bank, but it is our position, and we believe the position of any judge in Chambersburg, that
"express written approval" by the bank, as provided in the settlement agreement, has been met, and that
our settlement will be enforced.
Please advise me by 5:00 pm today whether you are interested in speaking with Mr. Patterson and me
about this issue. If you choose not to, please be advised that we are presently filing a motion to enforce
the settlement against your clients in the Franklin County Court of Common Pleas. We believe that our
motion will be granted without much fanfare, and that your clients will not only be liable for a judgment
against them for the amount of the settlement, but they will also owe fees and costs for the prosecution of
the motion. However, if for some reason the judge does not enforce the settlement, we have prepared and
will file our complaint for a derivative action on behalf of Ralph E. Tolbert Masonry, Inc. seeking a receiver
and dissolution of the company for your clients' alleged self-dealing and harmful actions toward the
company and its shareholders.
Thank you for your prompt attention to this matter.
Very truly yours,
Peter A Greiner, Esquire
Meyerson & O'Neill
1700 Market Street
Suite 3025
Philadelphia, PA 19103
(215) 972-1376
fax: (215) 972-0277
www.meyersonlawfirm.com
NOTICE: This email message and any attachments hereto contain confidential information and
may be protected by the attorney-client privilege and/or work product doctrine. If you are not the
intended recipient, you must not review, disclose, copy, disseminate, distribute or use any of the
information contained in, or attached to this email transmission. If you have received this email in
error, please immediately notify me by forwarding this email to pgreiner@meyersonlawfirm.com
or by telephone at (215) 972-1376 and then delete the message and its attachments from your
computer. Thank you.
From: Andrew Benchoff [mailto:Andrew@kornfield.net]
Sent: Monday, April 05, 2010 9:08 AM
To: Ted Adler
Cc: Ralph Tolbert (E-mail); Kurt Tolbert (E-mail); Kurt Tolbert (E-mail 2); Peter Greiner
Subject: RE: Tolbert Mediation
Ted,
Due to the company's financial situation caused by Keith Tolbert and the corresponding obligations owed
to F&M Trust as the company's first-place priority lender, my clients Ralph and Kurt Tolbert required a clear
4/6/2010
Page 3 of 5
. , , S.
and unambiguous contingency under the Settlement Agreement and Mutual Release in order for it to take
effect; namely, they required and the Agreement requires the express written approval of F&M Trust.
Per the Agreement we promptly submitted it to F&M Trust the day following the mediation for F&M Trust's
consideration.
After some deliberation Ken Brookens of F&M Trust sent the company an e-mail stating that F&M Trust
could not approve the Agreement. He also sent a letter stating that F&M Trust would not view the
Settlement Agreement and Mutual Release as an Event of Default under the Loan Documents at that
time while also referencing Clause (3) of the Negative Covenants, which prohibits the payment of dividends
and prohibits the company from purchasing outstanding shares of stock (the very intent of the Agreement).
Moreover, Mr. Brookens reminded the company of F&M Trust's enforcement and other rights and remedies
and expressly reserved them. Based on the e-mail and the letter F&M Trust could call the company's Loan
at any time upon any payment to Keith in its discretion. The company cannot be put in that tenuous
position. I believe Pete Greiner sent you copies of the e-mail and the letter based on our discussion, but if
not I can provide you with copies of them.
Due to the financial situation of the company and based on F&M Trust's clear position that it will not
approve the Agreement, the Agreement contingency in paragraph 5 has not and will not be met. My clients
are unwilling to revisit F&M Trust at this time because the company needed F&M Trust's approval to be
comfortable moving forward under the Agreement. My clients are confident based upon F&M Trust's
unequivocal position that there would be no benefit to revisiting the failed contingency.
Please let me know if you have any additional questions or comments. Despite your desire to facilitate
agreement between the parties, I trust that you understand my clients' position. Thank you.
AJ
Andrew J. Benchoff, Esq.
Kornfield and Benchoff, LLP
17 North Church Street
Waynesboro, PA 17268
(717) 762-8222
(717) 762-6544 FAX
and rew@kornfield. net
NOTICE: The information contained in this transmission is intended for the exclusive use of the addressee
(s) and may contain information that is privileged, confidential, and/or protected from disclosure. If you are
not the intended recipient, do not disseminate, distribute or copy this communication. If you have received
this transmission in error, please immediately reply to the sender and then delete it. Thank you for your
compliance.
-----Original Message-----
From: Ted Adler [mailto:TAdier@ReagerAdlerpc.com]
Sent: Monday, March 29, 2010 11:38 AM
To: Andrew Benchoff
Subject: RE: Tolbert Mediation
AJ: this is a follow-up to our phone conversation. In that conversation I suggested a conference call
with the bank and its counsel to discuss a modification to its March 19, 2010 letter so as to allay
your client's concerns. If the bank were to state in writing that (a) payments to fund the settlement
agreement are not considered dividends, (b) that such payments do not need prior bank approval
and (c) making the payments provided for in the settlement agreement does not constitute a default
under clause (3) of the Negative Covenant, will your clients move forward with the settlement?
Thanks. Ted
Theodore A. Adler Esq.
4/6/2010
Page 4 of 5
,A , 4
Reager & Adler PC
2331 Market Street
Camp Hill, Pa. 17011
717-763-1383
717-730-7366 (fax)
tadler@reageradlerpc. com
From: Andrew Benchoff [mailto:Andrew@kornfield.net]
Sent: Tuesday, February 23, 2010 12:56 PM
To: Ted Adler
Subject: RE: Tolbert Mediation
Dear Mr. Adler,
This Friday, February 26 1 am scheduled to be at the Conference for County Bar Leaders in
Lancaster County all day. In addition, I am in the midst of preparing for a custody conciliation
conference scheduled for Tuesday, March 2, trial scheduled for March 3, and working on several
other pressing matters. Based on those matters 1 respectfully request an extension of the deadline
by which I must file Party One's mediation memoranda through Tuesday, March 2. With that
deadline I can have Party One's mediation memoranda and exhibits in the mail to you by the end of
the day on March 1 at the latest (and I will be able to provide you with at least faxed copies of Party
One's mediation memoranda by March 1 as well).
Thank you for your consideration in this matter. Please let me know if that request is workable.
Talk to you soon.
AJ
Andrew J. Benchoff, Esq.
Kornfield and Benchoff, LLP
17 North Church Street
Waynesboro, PA 17268
(717) 762-8222
(717) 762-6544 FAX
andrew@kornfield.net
NOTICE: The information contained in this transmission is intended for the exclusive use of the
addressee(s) and may contain information that is privileged, confidential, and/or protected from
disclosure. If you are not the intended recipient, do not disseminate, distribute or copy this
communication. If you have received this transmission in error, please immediately reply to the
sender and then delete it. Thank you for your compliance.
-----Original Message-----
From: Alana Souders [mailto:asouders@ReagerAdlerpc.com]
Sent: Monday, February 22, 2010 1:51 PM
To: Andrew Benchoff
Cc: Ted Adler
Subject: Tolbert Mediation
Attached is a copy of the Confidential Mediation Agreement, which was executed by
counsel for Keith Tolbert.
Thank you.
4/6/2010
Page 5 of 5
Alana L. Souders
Legal Assistant to Theodore A. Adler, Esquire
Reager & Adler, P.C.
2331 Market Street
Camp Hill, PA 17011
(ph) 717-763-1383, ext. 131
(fax) 717-730-7366
www.ReagerAdlerPC.com
The information contained in this e-mail message is intended only for the personal and confidential use of the recipient(s)
named above. This message may be any attomey-client communication and as such is privileged and confidential. If the
reader of this message is not the intended recipient or an agent responsible for delivering it to the intended recipient, you are
hereby notified that you have received this document in error and that any review, dissemination, distribution, or copying of
this message is strictly prohibited. If you have received this communication in error, please notify us immediately by e-mail,
and delete the original message at once.
Circular 230 Disclosure: Unless expressly stated otherwise, this communication is not intended to be used by any taxpayer
and may not be used or relied upon by any taxpayer for the purpose of avoiding penalties that may be imposed under the
Internal Revenue Code of 1986, as amended. No one, without our express prior written consent, may use any part of this
communication to promote, market, or recommend to another party any tax-related transactions or matters that may be
addressed herein. Thank you. Reager & Adler, PC
4/6/2010
Andrew J. Benchoff, Esq.
Attorney for Defendants
Kornfield and Benchoff, LLP
17 North Church Street
Waynesboro, PA 17268
(717) 762-8222
FAX 762-6544
andrew@kornfield.net
Atty. I.D. #89159
KEITH TOLBERT, SR.,
Plaintiff
v
RALPH E. TOLBERT
MASONRY, INC., RALPH E.
TOLBERT, and KURT
TOLBERT,
Defendants
r +~ Ir t ~~ 1^~
CUC~.. "~i.11~TY
IN THE COURT OF COMMON PLEAS OF
THE 9TH JUDICIAL DISTRICT, PA.
CUMBERLAND COUNTY
CIVIL ACTION -LAW
No. 10-2612 Civil Term
. Judge:
DEFENDANTS' PRELIMINARY OBJECTIONS
TO PLAINTIFF'S VERIFIED COMPLAINT
NOW COME Defendants, Ralph E. Tolbert Masonry, Inc., Ralph E. Tolbert, and
Kurt Tolbert, by and through their attorney, Andrew J. Benchoff, Esq., and set forth
Defendants' Preliminary Objections to Plaintiff's Verified Complaint, as follows:
Legal Insufficiency (Demurrer) of
Counts I-Breach of Contract Brought by Plaintiff Against Defendant
Pursuant to Pa.R.C.P. No. 1028(a)(4)
1. Plaintiff has brought a one (1) count Verified Complaint ("the Complaint")
alleging the claim of breach of contract by and against Defendants.
2. Pursuant to Pa.R.C.P. No. 1028(a)(4) a party may file a preliminary objection
alleging the legal insufficiency of a pleading (demurrer).
3. The SAMR is attached to the Complaint as Exhibit "A."
4. Paragraph 5 of the SAMR states, "The entire agreement shall be contingent upon
express written approval from F&M Trust. In the even F&M Trust does not approve this
agreement in writing, the entire agreement shall be null and void."
5. Paragraph 1(E) of the SAMR states, "RETM (Ralph E. Tolbert Masonry, Inc.)
and RKT (Ralph and Kurt Tolbert) shall bring the facts and terms of the instant
settlement to F&M Bank within 2 days of the date of this agreement for approval. RETM
and RKT shall inform Meyerson & O'Neill immediately upon any information from the
bank about the approval of this settlement."
6. In paragraph 18 of the Complaint Defendant referred to a March 19, 2010
teleconference between counsel about F&M Trust's position with regard to the SAMR.
7. Later on March 19, 2010 Kenneth Brookens of F&M Trust sent Defendants and
the undersigned an e-mail and a letter regarding the SAMR. The letter is attached as
Exhibit "C," however, the a-mail is not attached to Exhibit "C." The March 19, 2010 e-
mail from Mr. Brookens is, however, included within Exhibit "D," and within Exhibit
"E." The March 19, 2010 e-mail and the March 19, 2010 letter (collectively referred to
hereinafter as "the March 19 Communications").
8. Within the March 19 Communications Mr. Brookens stated in pertinent part, "In
reviewing the March 08, 2010 Settlement Agreement and Mutual Release (SAMR) with
our attorney, we are of the opinion that providing an approval (or disapproval), as
required under line item # 5 of the SAMR, may and/or could, attach the Bank as a party
to the agreement. As such, we have decided to provide you with a letter reflecting that
we have reviewed the SAMR and that the terms do not or will not place the business in
default, provided the company complies fully with the SAMR."
9. Under the SAMR, Defendants bargained for "express written approval from F&M
Trust."
10. F&M Trust did not provide express written approval and specifically disavowed
its willingness to provide express written approval of the SAMR's terms.
11. The "express written approval from F&M Trust" contingency has not been met as
a matter of law.
12. To be sure, and as contained in Exhibit "E," the undersigned reminded counsel for
Plaintiff via a March 25, 2010 e-mail that, "After Ken Brookens verbally stated F&M
Trust's position to us by telephone, you even questioned Mr. Brookens that the
Settlement Agreement and Mutual Release required express written approval not simply
a statement that the Settlement Agreement and Mutual Release was not an Event of
Default under the Loan Documents," which question by Plaintiff's counsel acknowledged
and admitted that the contingency had not been met.
13. In addition, and as reflected in his March 29, 2010 e-mail to the undersigned as
contained within Exhibit "F," Theodore A. Adler, Esq., who mediated the SAMR, " .. .
suggested a conference call with the bank and its counsel to discuss a modification to its
March 19, 2010 letter so as to allay your client's concerns," thus, acknowledging the
contingency had not been met.
14. Count I of the Complaint, regarding Breach of Contract, is legally insufficient as a
matter of law because it does not state a legal claim on which relief can be granted and it
should be dismissed with prejudice.
15. In the request for relief (WHEREFORE) clause of the Complaint, Plaintiff prayed
for reasonable counsel fees.
16. Plaintiff has failed to specify any contractual or statutory authority for his request
for counsel fees.
17. Absent a contractual provision authorizing such fees or statutory authorization,
Plaintiff has no legal basis for seeking an award of counsel fees.
18. Plaintiff has failed to state a valid cause of action under Pennsylvania law for
breach of contract and/or counsel fees.
WHEREFORE, for the foregoing reasons, Defendants respectfully request that
this Honorable Court sustain and grant this preliminary objection in the nature of a
demurrer and dismiss Plaintiff's Complaint with prejudice.
Failure of a Pleading to Conform to Law or Rule of Court or Inclusion of
Scandalous or Impertinent Matter-Pursuant to Pa.R.C.P. No. 1028(a)(2)
19. Paragraphs 1 through 18 above are incorporated herein by reference.
20. Pursuant to Pa.R.C.P. No. 1028(a)(2) a party may file a preliminary objection
alleging failure of a pleading to conform to law or rule of court or inclusion of scandalous
or impertinent matter.
21. The Complaint alleges a breach of contract claim, but contains scandalous and/or
impertinent matter unnecessary for a resolution of the claim by this Honorable Court all
of which is objectionable and should be stricken as follows:
A.) Paragraph 1 of the Complaint improperly includes a Preliminary
Statement with Plaintiff s impressions, positions, and perspective leading
up to execution of the SAMR on March 8, 2010;
B.) Paragraphs 7 through 10 improperly include Plaintiff s
impressions, positions, and perspectives leading up to the execution of the
SAMR on March 8, 2010;
C.) Paragraph 14 improperly includes Plaintiffs impressions,
positions, and perspectives as to alleged improper actions and
mismanagement of RETM by Ralph and Kurt Tolbert;
D.) Paragraphs 20 through 25 improperly include Plaintiff s
impressions, positions, and perspectives as to Defendants' position that the
contingency within the SAMR had not been met;
E.) Paragraph 30 improperly
being "without merit"; and,
F.) Paragraph 35 improperly
being "without merit".
characterizes Defendants' position as
characterizes Defendants' position as
22. If the Complaint survives the first objection in the nature of a demurrer in whole
or in part, this Honorable Court can properly determine any breach of contract claim
based upon the remaining paragraph allegations in the Complaint, the Exhibit "A"
SAMR, the Exhibit "B" a-mail dated March 9, 2010, the Exhibit "C" letter dated March
19, 2010, the March 19, 2010 e-mail from Ken Brookens to Defendants and the
undersigned which is not included within Exhibit "C" but which accompanied the March
19, 2010 letter and is included within Exhibit "D," and within Exhibit "E," and any
responsive pleading filed by Defendants.
WHEREFORE, for the foregoing reasons, Defendants respectfully request that
this Honorable Court sustain and grant this preliminary objection and strike off with
prejudice paragraphs 1, 7-10, 14, 20-25, 30, and 35 (along with any corresponding
exhibits entirely related thereto) to eliminate any and all references direct or indirect to
the improperly included and identified scandalous and/or impertinent matter.
Insufficient Specificity of aPleading-Pursuant to Pa.R.C.P. No. 1028(a)(3)
23. Paragraphs 1 through 22 above are incorporated herein by reference.
24. Pursuant to Pa.R.C.P. No. 1028(a)(3) a party may file a preliminary objection
alleging failure of a pleading to set forth sufficiently specific facts.
25. Paragraph 1 of the Complaint includes an allegation that " ...Defendants ...had
taken control of the businesses and systematically paid themselves and others money in
violation of their fiduciary duties to the company and its shareholders, without the
knowledge and/or consent of the other shareholder, Plaintiff Keith Tolbert."
26. The Paragraph 1 allegation that Defendants paid themselves and others is vague
and overbroad and is not sufficiently specific as required by Pa.R.C.P. 1019.
27. If the paragraph 1 allegation that Defendants paid themselves and others survives
the first and/or second objections, Defendants will require a more specific pleading with
regard to the paragraph 1 allegation identified above in order to properly prepare and
present their defense(s) to this Honorable Court.
WHEREFORE, for the foregoing reasons, Defendants respectfully request that, if
the Complaint survives the first and/or second objections in whole or in part, this
Honorable Court sustain and grant this preliminary objection and order Plaintiff to file a
more specific pleading that is factually sufficient in order for Defendants to properly
prepare and present their defense(s).
By
Andrew J. Benchoff, Esq.
Attorney for Defendants
Kornfield and Benchoff, LLP
17 North Church Street
Waynesboro, PA 17268
(717) 762-8222
FAX 762-6544
andrew@kornfield.net
Atty. I.D. #89159
KEITH TOLBERT, SR., IN THE COURT OF COMMON PLEAS OF
THE 9TH JUDICIAL DISTRICT, PA.
Plaintiff .
CUMBERLAND COUNTY
v
CIVIL ACTION -LAW
RALPH E. TOLBERT
MASONRY, INC., RALPH E.
TOLBERT, and KURT .
TOLBERT, .
Defendants No. 10-2612 Civil Term
. Judge:
CERTIFICATE OF SERVICE
This is to certify that in this case, not yet assigned to a Judge, complete copies of
all papers contained in the Defendants' Preliminary Objections to Plaintiff's Verified
Complaint have been served upon the following person(s), by the following means and
dates stated:
Jack Meyerson, Esq.
Peter A. Greiner, Esq.
Meyerson & O'Neill
1700 Market Street, Suite 3025
Philadelphia, PA 19103
Via: First Class U.S. Mail
Date: May ~, 2010
I verify that the statements made in this Certificate are true and correct. I
understand that false statements herein are made subject to the penalties of 18 Pa. C.S.A.
Section 4904 relating to unsworn falsification to authorities.
KORNFI~bIa and BENCHOFF. LLP
By
J. B
'for
PRAECIPE FOR LISTING CASE FOR ARGUMENT
(Must be typewritten and submitted in triplicate)
TO THE PROTHONOTARY OF CUMBERLAND COUNTY: (List the within matter for the next
Argument Court.)
CAPTION 4F CASE
(entire caption must i5e stated in full)
Keith Tolbert, Sr.
vs.
Ralph E. Tolbert Masonry, Inc., Ralph E. Tolbert, and
Kurt Tolbert
1. State matter to be argued'(i.e., plaintiffs rrmgtion for new trial, defendant's demurrer tv
complaint, etc.):
Defendants' Preliminary Objections to Plaintiffs Verified Complaint
2. identify all counsel who will argue cases:
ra
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(a) for plaintiffs:
Peter A.. Greiner, Esq.
(Name and Address)
Meyerson & OTieill, 1700 Market Street, Suite 3025, Philadelphia, PA 19103
(b} for defendants:
Andrew J. Benchoff, Esq.
(Name and Address)
Komtield &Benchoff, LLP, 17 N. Church Street, Waynesboro, PA 17268
3. I will notify a!I parties in writing within two days that this case has been listed for
argument.
4. Argument Court Date: August 18, 2010
Signature
Peter A. Greiner, Esq.
Print your name
Plaintff Keith Tolbert, Sr.
1 Q . ~ / _ ~ ~ Attorney for
Date: ~$ (0
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 retisted.
PRAECIPE FOR LISTING CASE FOR ARGUMENT
(Must be typewritten and submitted in triplicate)
TO THE PROTHONOTARY OF CUMBERLAND COUNTY
Argument Court.)
CAPTION OF CASE
(entire caption must be stated in full)
Keith Tolbert, Sr.
vs.
Ralph E. Tolbert Masonry, Inc., Ralph E. Tolbert, and Kurt
Tolbert
4 -. A 4
he next
_t
(List the within matter for
`
?
-------------------------
't? t-" F
M l t
No. 2612 2010 Term
1. State matter to be argued (i.e., plaintiffs motion for new trial, defendant's demurrer to
complaint, etc.):
Defendants' Preliminary Obiections to Plaintiffs Verified Complaint
2. Identify all counsel who will argue cases:
(a) for plaintiffs:
Peter A. Greiner, Esq.
(Name and Address)
Meyerson & O Neill, 1700 Market Street, Suite 3025, Philadelphia, PA 19103
(b) for defendants:
Andrew J. Benchoff, Esq.
(Name and Address)
Komfield & Benchoff, LLP, 17 N. Church Street, Waynesboro, PA 17268
3. 1 will notify all parties in writing within two days that this case has been listed for
argument.
4. Argument Court Date: October 6, 2010
Date: September 9, 2010
Signature
Peter A. Greiner, Esq.
Print your name
Plaintff Keith Tolbert, Sr.
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.
KEITH TOLBERT, SR.,
PLAINTIFF
V.
RALPH TOLBERT MASONRY, INC.,
AND RALPH TOLBERT,
AND KURT TOLBERT,
DEFENDANTS
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
NO. 10-2612 CIVIL
IN RE: DEFENDANTS' PRELIMINARY OBJECTIONS
BEFORE HESS, J, AND EBERT, J.
ORDER OF COURT
AND NOW, this 14th day of December, 2010, upon consideration of the
Defendants' Preliminary Objections to Plaintiff's Verified Complaint, the Plaintiff's
Response thereto, and after argument,
IT IS HEREBY ORDERED AND DIRECTED that the Defendants' Preliminary
Objections are OVERRULED. Defendants are directed to Answer the Plaintiff's
Complaint within twenty (20) days.
By the Court,
a,
Peter A. Greiner, Esquire
Attorney for Plaintiff
1700 Market Street, Suite 3025
Philadelphia, PA 19103
V Andrew J. Benchoff, Esquire
Attorney for Defendants
17 North Church Street
Waynesboro, PA 17268
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Andrew J. Benchoff, Esq.
Attorney for Defendants
Kornfield and Benchoff, LLP
17 North Church Street
Waynesboro, PA 17268
(717) 762-8222
FAX 762-6544
andrew@kornfield.net
Atty. I.D. #89159
KEITH TOLBERT, SR.,
Plaintiff
v
RALPH E. TOLBERT
MASONRY, INC., RALPH E.
TOLBERT, and KURT
TOLBERT,
Defendants
FILEii-0-r -,:
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LJi1 : ii
PENNSYLVA'111 A5
: IN THE COURT OF COMMON PLEAS OF
: THE 9TH JUDICIAL DISTRICT, PA.
CUMBERLAND COUNTY
CIVIL ACTION - LAW
: No. 10-2612 Civil Term
. Judge:
To: Keith Tolbert, Sr.
c/o Jack Meyerson, Esq.
Peter A. Greiner, Esq.
Meyerson & O'Neill
1700 Market Street, Suite 3025
Philadelphia, PA 19103
You are hereby notified to plead to the enclosed Defendants' New Matter and
Counterclaim within twenty (20) days from service hereof or a default judgment may be
entered against you.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF
YOU DO NOT HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET
FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION
ABOUT HIRING A LAWYER.
IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE
ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY
OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO
FEE.
PA Bar Association Lawyer Referral Service
P.O. Box 186, 100 South Street
Harrisburg, PA 17108
Telephone Number: 800-692-7375
Date: Aecew -r 30, ,?00 B3
Andrew J. Benchoff, Esq.
Attorney for Defendants
Kornfield and Benchoff, LLP
17 North Church Street
Waynesboro, PA 17268
(717) 762-8222
FAX 762-6544
andrew@kornfield.net
Atty. I.D. #89159
KEITH TOLBERT, SR,
Plaintiff
v
RALPH E. TOLBERT
MASONRY, INC., RALPH E.
TOLBERT, and KURT
TOLBERT,
Defendants
: IN THE COURT OF COMMON PLEAS OF
: THE 9TH JUDICIAL DISTRICT, PA.
: CUMBERLAND COUNTY
: CIVIL ACTION -LAW
: No. 10-2612 Civil Term
. Judge:
DEFENDANTS' ANSWER TO PLAINTIFF'S VERIFIED COMPLAINT
WITH DEFENDANTS' NEW MATTER AND COUNTERCLAIM
NOW COME Defendants, Ralph E. Tolbert Masonry, Inc., Ralph E. Tolbert, and
Kurt Tolbert, by and through their attorney, Andrew J. Benchoff, Esq., and set forth
Defendants' Answer to Plaintiffs Verified Complaint with Defendants' New Matter and
Counterclaim, as follows:
Answer to Plaintiffs Verified Complaint
1. The Preliminary Statement paragraph is admitted in part and denied in part. It is
denied in that the averments contained in paragraph 1 of the Verified Complaint ("the
Complaint") contain conclusions of law and legal characterizations to which no
responsive pleading is required. To the extent that a response is required, and by way of
explanation, this action was brought by Plaintiff related to a Settlement Agreement and
Mutual Release dated March 8, 2010 ("SAMR") between Plaintiff and Defendants ("the
parties"), the contingencies of which were not and have not been met (emphasis added).
The SAMR is null and void and Defendants have not funded the SAMR because F&M
Trust, the first priority lender to RETM, did not provide express written approval of the
SAMR, a contingency required by paragraph 5 of the SAMR. See Exhibit "A" and
Exhibit "C" of the Complaint. Therefore, pursuant to paragraph 5 of the SAMR the
entire SAMR is null and void. Further denied in that Plaintiffs averments about being
"frozen out" of RETM and the background leading to the mediation and execution of the
SAMR are irrelevant or, if relevant, prejudicial. By way of explanation, and without
waiver of any relevancy or unfair prejudice objections, Plaintiff voluntarily quit his job at
Ralph E. Tolbert Masonry, Inc. ("RETM") on or around April, 2009-he was not frozen
out as alleged. While employed with RETM from 2003 through on or about April, 2009,
Plaintiff was a Vice President and Treasurer of RETM and. was responsible for making
transactional disbursements to vendors, maintaining custody of the corporate records and
for interacting with RETM's accountant to properly account for RETM's transactions.
By virtue of being a corporate officer of RETM, Plaintiff knew or should have known
about RETM's transactions as they occurred or within a reasonable time of their
occurrence and he handled the transactions, and/or agreed to or acquiesced in the said
transactions of RETM. In fact, many of the transactions handled by Plaintiff were
unknown to Defendants Kurt Tolbert and Ralph Tolbert until after they were able to
review the corporate records of RETM after Plaintiffs departure. It is believed and
therefore averred that by unanimous consent of the shareholders of RETM through 2008,
or by his own affirmative act as he was in control of the purse strings of the corporation,
Plaintiff consented to and agreed to any and all actions taken by RETM or Defendants
Kurt Tolbert and Ralph Tolbert. The only relevant facts before this Honorable Court
based on the Complaint should be the SAMR and F&M Trust's position concerning the
SAMR based on its loan and related agreements with Defendants, some of which position
is set forth in the March 19, 2010 letter response to Defendants. See Exhibit "A" and
Exhibit "C" of the Complaint. Further denied for the reasons set forth in Defendants'
New Matter, all of which is incorporated herein by reference. Without waiver of the
relevancy and unfair prejudice objections, the averments are admitted only in that the
parties did agree to mediate before a private, third-party mediator, Theodore Adler, Esq.
("Mr. Adler") in an attempt to resolve their disputes and a buy-out of Plaintiffs shares;
however, the contingencies Defendants required in the SAMR, as aforesaid, were not and
have not been met.
Response to Parties
2. Admitted.
3. Admitted.
4. Admitted in part and denied in part. This paragraph is admitted in that Defendant
Kurt Tolbert is an adult individual residing at 1675 Brechbill. Road in Chambersburg (not
on Gayman Road as alleged) who owns 45% of the shares of RETM. Denied in that the
averments of this paragraph contain conclusions of law to which no responsive pleading
is required. To the extent that a response is required, same is denied in that the allegation
that Defendant Kurt Tolbert is and "at all relevant times" has been a controlling
shareholder is irrelevant and, if relevant, prejudicial. Furthermore, Defendant Kurt
Tolbert has not been a controlling party of RETM "at all relevant times"; to the contrary,
Plaintiff was a Vice President prior to voluntarily quitting his job in April, 2009 and
continues to own 45% of the shares of RETM.
5. Admitted in part and denied in part. This paragraph is admitted in that Defendant
Ralph Tolbert is an adult individual residing in Chambersburg as alleged who owns 10%
of the shares of RETM. Denied in that the averments of this paragraph contain
conclusions of law to which no responsive pleading is required. To the extent that a
response is required, same is denied in that the allegation that Defendant Ralph Tolbert is
and "at all relevant times" has been a controlling shareholder is irrelevant and, if relevant,
prejudicial. Furthermore, Defendant Ralph Tolbert has not been a controlling party of
RETM "at all relevant times"; to the contrary, Plaintiff was a Vice President prior to
voluntarily quitting his job in April, 2009 and continues to own 45% of the shares of
RETM.
6. Admitted.
Response to Operative Facts
7. Admitted, and by way of further explanation, it is believed and therefore averred
that Plaintiff was employed by RETM from 1979 through on or about April, 2009, and
from 2003 through on or about June, 2009, Plaintiff was Treasurer of RETM and was
responsible for maintaining custody of the corporate records and for interacting with
RETM's accountant to properly account for RETM's transactions.
8. Admitted in part and denied in part. Although same is irrelevant or, if relevant,
prejudicial, it is admitted only that Defendants did unsuccessfully attempt to buy-out
Plaintiff's shares of RETM. Denied in that Plaintiff was not asked to leave, but instead
voluntarily quit his employment with RETM on or about April, 2009. More specifically,
Plaintiff gave Defendant Kurt Tolbert an ultimatum that either he or Defendant Kurt
Tolbert would need to leave Defendant RETM's employ to which ultimatum Defendant
Kurt Tolbert stated, "I'm staying".
9. Admitted in part and denied in part. Denied in that the mandamus action was
filed in the Franklin County Court of Common Pleas at Civil Action Docket No. 2009-
3230. The remaining averments contained within this paragraph are irrelevant or, if
relevant, prejudicial. Without waiver of the relevancy or unfair prejudice objections,
Defendants admit that the suit was filed and that Plaintiff agreed to reasonable terms
demanded by Defendants in order to receive access to the corporate records, after which
Defendants provided access to the corporate records and Plaintiff voluntarily
discontinued the mandamus action.
10. Admitted in part and denied. Denied in that after reasonable investigation,
Defendants are without knowledge or information sufficient with which to form a
response to the allegation that Plaintiff determined that he had a possible claim
individually, and derivatively on behalf of the corporation, against Defendants Ralph
Tolbert and Kurt Tolbert for what he perceived to be improper actions in diverting the
assets of RETM for their own personal gain, and to the detriment of RETM and its
shareholders, including Plaintiff; therefore, and strict proof thereof is demanded at trial.
Further denied in that Plaintiff voluntarily quit his job at Ralph E. Tolbert Masonry, Inc.
("RETM") on or around April, 2009-he was not frozen out as alleged. While employed
with RETM from 2003 through on or about April, 2009, Plaintiff was a Vice President
and Treasurer of RETM and was responsible for making transactional disbursements to
vendors, maintaining custody of the corporate records and :for interacting with RETM's
accountant to properly account for RETM's transactions. By virtue of being a corporate
officer of RETM, Plaintiff knew or should have known about RETM's transactions as
they occurred or within a reasonable time of their occurrence and he handled the
transactions, and/or agreed to or acquiesced in the said transactions of RETM. In fact,
many of the transactions handled by Plaintiff were unknown to Defendants Kurt Tolbert
and Ralph Tolbert until after they were able to review the corporate records of RETM
after Plaintiff s departure. It is believed and therefore averred that by unanimous consent
of the shareholders of RETM through 2008, Plaintiff was in control of the purse strings of
the corporation and consented to and agreed to any and all actions taken by RETM or
Defendants Kurt Tolbert and Ralph Tolbert.
11. Although same is irrelevant or, if relevant, prejudicial, it is admitted that the
parties along with their respective counsel attempted to negotiate a buy-out Plaintiff's
shares of RETM before Mr. Adler in his Camp Hill offices on March 8, 2010. Without
waiver of the relevancy and unfair prejudice objections, but by way of further
explanation, Defendants also sought to address and resolve their claims against Plaintiff
for improperly diverting corporate assets for his personal gain and committing waste
against RETM, all while Plaintiff was in control of the purse strings of the corporation as
set forth in more detail above.
12. Admitted in part and denied in part. It is admitted that the parties executed the
SAMR. It is denied in that the contingencies of the SAMR were not and have not been
met (emphasis added). The SAMR is null and void and Defendants have not funded the
SAMR because F&M Trust, the first priority lender to RETM, did not provide express
written approval of the SAMR, a contingency required by paragraph 5 of the SAMR. See
Exhibit "A" and Exhibit "C" of the Complaint. Therefore, pursuant to paragraph 5 of the
SAMR the entire SAMR is null and void.
13. Admitted in part and denied in part. It is admitted that the parties executed the
SAMR. It is denied in that the contingencies of the SAMR were not and have not been
met (emphasis added). The SAMR is null and void and Defendants have not funded the
SAMR because F&M Trust, the first priority lender to RETM, did not provide express
written approval of the SAMR, a contingency required by paragraph 5 of the SAMR. See
Exhibit "A" and Exhibit "C" of the Complaint. Therefore, pursuant to paragraph 5 of the
SAMR the entire SAMR is null and void.
14. Denied. This paragraph contains conclusions of law to which no responsive
pleading is required. To the extent that a response is required, same is denied in that the
SAMR is a written document that speaks for itself and any legal characterization
concerning the reasons underlying its execution are irrelevant or, if relevant, prejudicial
as this Honorable Court is vested with the power to interpret it. Without waiver of the
relevancy and unfair prejudice objections, but by way of further explanation, Defendants
also sought to address and resolve their claims against Plaintiff for improperly diverting
corporate assets for his personal gain and committing waste against RETM, all while
Plaintiff was in control of the purse strings of the corporation as set forth in more detail
above.
15. Admitted.
16. Admitted.
17. Admitted.
18. Admitted in part and denied in part. Admitted only that the parties did have a
telephone conference on March 19, 2010 to discuss the SAMR. Denied in that the March
19, 2010 e-mail ("the E-mail) and March 19, 2010 letter ("the Letter") are writings that
speak for themselves. Further denied in that at the outset of the March 19, 2010
telephone conference, Mr. Brookens and Attorney Patterson, both on behalf of F&M
Trust, stated that F&M Trust was not in a position to and would not approve the SAMR
as written in writing (as required by paragraph 5 of the SAMR), and that a letter would be
forthcoming regarding F&M Trust's position about the SAMR.
19. Admitted in part and denied in part. Admitted only that Mr. Brookens on behalf
of F&M Trust sent the E-mail and the Letter to the undersigned, counsel for Defendants
on March 19, 2010. Denied in that the E-mail and the Letter are writings that speak for
themselves. Further denied for the reasons set forth in Defendants' New Matter, which is
incorporated herein by reference.
20. Admitted in part and denied in part. Although same is irrelevant or, if relevant,
prejudicial, it is admitted only that the undersigned, counsel for Defendants sent the
referenced e-mail and attachments based on and in response to the E-mail and the Letter
sent from Mr. Brookens of F&M Trust to Defendants. Denied in that the undersigned,
counsel for Defendants' e-mail and the attachments thereto are writings that speak for
themselves. The relevant language of Clause (3) of the Negative Covenants attached to
the referenced e-mail is attached hereto as Exhibit "D-1," and incorporated herein by
reference. Further denied in that F&M Trust, the first priority lender to RETM, did not
provide express written approval of the SAMR, a contingency required by paragraph 5 of
the SAMR. Further denied for the reasons set forth in Defendants' New Matter, which is
incorporated herein by reference.
21. Denied. The averments of this paragraph contain conclusions of law to which no
responsive pleading is required. To the extent that a response is required, same is denied
in that the Exhibit "B" communications are irrelevant or, if relevant, prejudicial. Without
waiver of the relevancy and unfair prejudice objections, the Exhibit "E" communications
are writings that speak for themselves. Further denied in that F&M Trust, the first
priority lender to RETM, did not provide express written approval of the SAMR, a
contingency required by paragraph 5 of the SAMR. Further denied for the reasons set
forth in Defendants' New Matter, which is incorporated herein by reference.
22. Denied. The averments of this paragraph contain conclusions of law to which no
responsive pleading is required. To the extent that a response is required, same is denied
in that Exhibit "F" is irrelevant or, if relevant, prejudicial. Without waiver of the
relevancy and unfair prejudice objections, Exhibit `F" is a writing that speaks for itself.
Further denied in that F&M Trust, the first priority lender to RETM, did not provide
express written approval of the SAMR, a contingency required by paragraph 5 of the
SAMR. Further denied for the reasons set forth in Defendants' New Matter, which is
incorporated herein by reference.
23. The response to paragraph 22 above is restated and incorporated herein by
reference.
24. The response to paragraph 22 above is restated and incorporated herein by
reference.
25. Denied. The averments of this paragraph contain conclusions of law to which no
responsive pleading is required. To the extent that a response is required, same is denied
in that the Exhibit "G" communications are irrelevant or, if relevant, prejudicial. Without
waiver of the relevancy and unfair prejudice objections, the Exhibit "G" communications
are writings that speak for themselves. Further denied in that F&M Trust, the first
priority lender to RETM, did not provide express written approval of the SAMR, a
contingency required by paragraph 5 of the SAMR. Further denied for the reasons set
forth in Defendants' New Matter, which is incorporated herein by reference.
Response to Count I-Breach of Contract
26. Paragraphs 1 through 25 above are incorporated herein by reference.
27. Denied. The averments of this paragraph contain conclusions of law to which no
responsive pleading is required. To the extent that a response is required, same is denied
in that F&M Trust, the first priority lender to RETM, did not provide express written
approval of the SAMR, a contingency required by paragraph 5 of the SAMR; therefore,
the SAMR is null and void. See Exhibit "A" and Exhibit "C" of the Complaint. Further
denied for the reasons set forth in Defendants' New Matter, which is incorporated herein
by reference.
28. Denied. The averments of this paragraph contain conclusions of law to which no
responsive pleading is required. To the extent that a response is required, same is denied
in that F&M Trust, the first priority lender to RETM, did not provide express written
approval of the SAMR, a contingency required by paragraph 5 of the SAMR; therefore,
the SAMR is null and void. See Exhibit "A" and Exhibit "C" of the Complaint. Further
denied for the reasons set forth in Defendants' New Matter, which is incorporated herein
by reference.
29. Denied. The averments of this paragraph contain conclusions of law to which no
responsive pleading is required. To the extent that a response is required, same is denied
in that F&M Trust, the first priority lender to RETM, did not provide express written
approval of the SAMR, a contingency required by paragraph 5 of the SAMR; therefore,
the SAMR is null and void. See Exhibit "A" and Exhibit "C " of the Complaint. Further
denied in that the a-mails and communications from the undersigned, counsel for
Defendants, are irrelevant or, if relevant, prejudicial. Without waiver of the relevancy
and unfair prejudice objections, the communications from the undersigned, counsel for
Defendants within Exhibit "D", Exhibit "E," Exhibit "F," and Exhibit "G" are writings
that speak for themselves. Further denied for the reasons set forth in Defendants' New
Matter, which is incorporated herein by reference.
30. Denied. The averments of this paragraph contain conclusions of law to which no
responsive pleading is required. To the extent that a response is required, same is denied
in that F&M Trust, the first priority lender to RETM, did not provide express written
approval of the SAMR, a contingency required by paragraph 5 of the SAMR; therefore,
the SAMR is null and void. See Exhibit "A" and Exhibit "C" of the Complaint. Further
denied in that Plaintiff's position is without merit based on the clear language of Exhibit
"C" and in light of the relevant language of Clause (3) of the Negative Covenants
attached to the referenced e-mail, which is attached hereto as Exhibit "D-1," and
incorporated herein by reference. Further denied for the reasons set forth in Defendants'
New Matter, which is incorporated herein by reference.
31. Admitted in part and denied in part. Denied in that the averments of this
paragraph contain conclusions of law to which no responsive pleading is required. To the
extent that a response is required, same is denied in that F&M Trust, the first priority
lender to RETM, did not provide express written approval of the SAMR, a contingency
required by paragraph 5 of the SAMR; therefore, the SAMR is null and void. See Exhibit
"A" and Exhibit "C" of the Complaint. Further denied in that Plaintiff's counsel's
interpretation and position about the SAMR, the E-mail and the Letter is irrelevant.
Without waiver of the relevancy objection, this paragraph is admitted only that Plaintiff's
counsel has repeatedly restated his position about the SAMR, the E-mail and the Letter to
the undersigned, counsel for Defendants.
32. Denied. The averments of this paragraph contain conclusions of law to which no
responsive pleading is required. To the extent that a response is required, same is denied
in that F&M Trust, the first priority lender to RETM, did not provide express written
approval of the SAMR, a contingency required by paragraph 5 of the SAMR; therefore,
the SAMR is null and void and no payments were or are due. See Exhibit "A" and
Exhibit "C" of the Complaint. Further denied in that Plaintiff's position is without merit
based on the clear language of Exhibit "C" and in light of the relevant language of Clause
(3) of the Negative Covenants attached to the referenced e-mail, which is attached hereto
as Exhibit "D-1," and incorporated herein by reference. Further denied for the reasons
set forth in Defendants' New Matter, which is incorporated herein by reference.
33. Denied. The averments of this paragraph contain conclusions of law to which no
responsive pleading is required. To the extent that a response is required, same is denied
in that F&M Trust, the first priority lender to RETM, did not provide express written
approval of the SAMR, a contingency required by paragraph 5 of the SAMR; therefore,
the SAMR is null and void and no payments were or are due thereunder. See Exhibit "A"
and Exhibit "C" of the Complaint. Further denied in that Plaintiff's position is without
merit based on the clear language of Exhibit "C" and in light of the relevant language of
Clause (3) of the Negative Covenants attached to the referenced e-mail, which is attached
hereto as Exhibit "D-1," and incorporated herein by reference. Further denied for the
reasons set forth in Defendants' New Matter, which is incorporated herein by reference.
34. Denied. The averments of this paragraph contain conclusions of law to which no
responsive pleading is required. To the extent that a response is required, same is denied
in that F&M Trust, the first priority lender to RETM, did not provide express written
approval of the SAMR, a contingency required by paragraph 5 of the SAMR; therefore,
the SAMR is null and void and no payments were or are due thereunder. See Exhibit "A"
and Exhibit "C" of the Complaint. Further denied in that Plaintiff's position is without
merit based on the clear language of Exhibit "C" and in light of the relevant language of
Clause (3) of the Negative Covenants attached to the referenced e-mail, which is attached
hereto as Exhibit "D-1," and incorporated herein by reference. Further denied for the
reasons set forth in Defendants' New Matter, which is incorporated herein by reference.
35. Denied. The averments of this paragraph contain conclusions of law to which no
responsive pleading is required. To the extent that a response is required, same is denied
in that F&M Trust, the first priority lender to RETM, did not provide express written
approval of the SAMR, a contingency required by paragraph 5 of the SAMR; therefore,
the SAMR is null and void and no payments were or are due thereunder. See Exhibit "A"
and Exhibit "C" of the Complaint. Further denied in that Plaintiffs position is without
merit based on the clear language of Exhibit "C" and in light of the relevant language of
Clause (3) of the Negative Covenants attached to the referenced e-mail, which is attached
hereto as Exhibit "D-1," and incorporated herein by reference. Further denied in that the
communications from the undersigned, counsel for Defendants within Exhibit "D",
Exhibit "E," Exhibit "F," and Exhibit "G" are writings that speak for themselves. Further
denied for the reasons set forth in Defendants' New Matter, which is incorporated herein
by reference.
36. Denied. The averments of this paragraph contain conclusions of law to which no
responsive pleading is required. To the extent that a response is required, same is denied
in that F&M Trust, the first priority lender to RETM, did not provide express written
approval of the SAMR, a contingency required by paragraph 5 of the SAMR; therefore,
the SAMR is null and void and no payments were or are due thereunder. See Exhibit "A"
and Exhibit "C" of the Complaint. Further denied in that Plaintiff's position is without
merit based on the clear language of Exhibit "C" and in light of the relevant language of
Clause (3) of the Negative Covenants attached to the referenced e-mail, which is attached
hereto as Exhibit "D-1," and incorporated herein by reference. Further denied in that the
communications from the undersigned, counsel for Defendants within Exhibit "D",
Exhibit "E," Exhibit "F," and Exhibit "G" are writings that speak for themselves. Further
denied for the reasons set forth in Defendants' New Matter, which is incorporated herein
by reference.
WHEREFORE, Defendants respectfully request that this Honorable Court dismiss
Plaintiff's Verified Complaint with prejudice, enter judgment in favor of Defendants and
against Plaintiff thereon, and enter judgment in favor of Defendants (Counter-Plaintiffs)
and against Plaintiff (Counter-Defendant) on Defendants' Counterclaim.
Defendants' New Matter
37. Paragraphs 1 through 36 above are incorporated herein by reference.
38. Plaintiff's averments about being "frozen out" of and being asked to leave RETM
and the background leading to the mediation and execution of the SAMR are irrelevant
or, if relevant, prejudicial.
39. Without waiver of the relevancy and unfair prejudice objections set forth above,
Defendants aver as follows to support that Plaintiff was not "frozen out" of RETM:
A.) Plaintiff was an employee of RETM from 1979 through on or about April,
2009;
B.) Plaintiff was Treasurer of RETM from 2003 through on or about June,
2009, when the position of Treasurer was filled by the affirmative vote of the
shareholders;
C.) As Treasurer of RETM, Plaintiff was responsible for making transactional
disbursements to vendors, maintaining custody of the corporate records and for
interacting with RETM's accountant to properly account for RETM's
transactions;
D.) By virtue of being a corporate officer of RETM, Plaintiff knew or should
have known about RETM's transactions as they occurred or within a reasonable
time of their occurrence and he handled the transactions, and/or agreed to or
acquiesced in the said transactions of RETM. In fact, many of the transactions
handled by Plaintiff were unknown to Defendants Kurt Tolbert and Ralph Tolbert
until after they were able to review the corporate records of RETM after
Plaintiff's departure;
E.) It is believed and therefore averred that by unanimous consent of the
shareholders of RETM through 2008, or by his own affirmative act as he was in
control of the purse strings of the corporation, Plaintiff consented to and agreed to
any and all actions taken by RETM or Defendants Kurt Tolbert and Ralph
Tolbert.
F.) Same cannot be said of the actions taken by Plaintiff. For example, in
2006, Plaintiff and his son Keith, Jr. decided to buy a lot located at 4755
Rumler Road in Chambersburg, Franklin County, Pennsylvania, and build a home
on it without Defendant Kurt Tolbert or Defendant Ralph Tolbert's knowledge.
Without authority or permission from the other shareholders Keith, Sr. took
$183,105.00 out of RETM to purchase the land, and put the land in Keith, Jr.'s
name; and,
G.) Plaintiff voluntarily quit his employment with RETM on or around April,
2009.
40. The only relevant facts before this Honorable Court based on the Complaint
should be the SAMR and F&M Trust's position concerning the SAMR based on its loan
and related agreements with Defendants, some of which position is set forth in the Letter.
See Exhibit "A" and Exhibit "C" of the Complaint, and Exhibit "D-1" of this Answer
with Defendants' New Matter and Counterclaim.
41. The SAMR is null and void and Defendants have not funded the SAMR because
F&M Trust, the first priority lender to RETM, did not provide express written approval of
the SAMR, a contingency required by paragraph 5 of the SAMR. See Exhibit "A" and
Exhibit "C" of the Complaint, and Exhibit "D-1" of this Answer with Defendants' New
Matter and Counterclaim.
42. Specifically, Mr. Brookens stated to Defendants that, "the Company's right to pay
dividends on the Company's stock is limited by and subject to the provisions of Clause
(3) of the Negative Covenant, entitled `Continuity of Operations,' contained in the
Business Loan Agreement." Mr. Brookens also stated that "the Bank reserves in all
respects all of its rights and remedies set forth in the Loan Documents, including, without
limitation, its enforcement rights and remedies." See Exhibit "C" of the Complaint.
43. Additionally, as contained in Exhibit "B," the undersigned reminded counsel for
Plaintiff via a March 25, 2010 e-mail that, "After Ken Brookens verbally stated F&M
Trust's position to us by telephone, you even questioned Mr. Brookens that the SAMR
required express written approval not simply a statement that the Settlement Agreement
and Mutual Release was not an Event of Default under the Loan Documents," which
question by Plaintiff's counsel acknowledged and admitted that the contingency had not
been met. In addition, and as reflected in his March 29, 2010 e-mail to the undersigned
as contained within Exhibit "F," Mr. Adler, whom mediated the SAMR, " ... suggested a
conference call with the bank and its counsel to discuss a modification to its March 19,
2010 letter so as to allay your client's concerns," thus, acknowledging the contingency
had not been met. See Exhibit "B" and Exhibit "F" of the Complaint.
44. RETM has two sizable loans with F&M Trust, both of which are guaranteed
personally by Defendant Kurt Tolbert, along with his wife Kern Tolbert, and both of
which are guaranteed by collateralized real estate owned by Defendant Ralph Tolbert on
which the company operates and maintains its principal place of business.
45. Among other terms of the loan and related agreements between one or more of
Defendants and F&M Trust, Clause (3) of the Negative Covenants, copy attached as
Exhibit "D-1," which is incorporated herein by reference and referenced in the Letter,
prohibits the company from purchasing outstanding shares or altering the company's
capital structure without the prior written consent of F&M Trust.
46. Defendants' primary obligations are to F&M Trust and Defendants carefully
chose the wording used in paragraph 5 of the SAMR in that they bargained for express
approval of the SAMR in writing because of Defendants' paramount obligations to F&M
Trust.
47. Defendants did not receive the benefit of their bargain, i.e. express approval of the
SAMR in writing.
48. Defendants required fulfillment of the "express written approval" contingency in
order to fund the SAMR because they did not want to be placed in a position that made it
more likely that RETM and/or the other Defendants would default under their loan
agreements with F&M Trust.
49. The undersigned, counsel for Defendants repeatedly stated Defendants' position
about the SAMR, the E-mail and the Letter to counsel for Plaintiff within Exhibit "D",
Exhibit "B," Exhibit "F," and Exhibit "G".
50. It is believed and therefore averred that F&M Trust did not expressly approve the
SAMR as written in writing because, among other things, F&M Trust did not approve of
its terms as written, because F&M Trust believed the SAMR, if approved, may have
caused the company financial hardship during the term of the SAMR even though
execution was not a per se Event of Default under the Loan Documents, and because
F&M Trust did not want to be construed as a party to the SAMR.
51. It is believed and therefore averred that F&M Trust would have provided (and
may still be willing to provide) "express written approval" of some form of settlement
agreement and mutual release between Plaintiff and Defendants with which F&M Trust
was (and is ) comfortable and of which F&M Trust was (and is) in support.
52. Plaintiff's position and breach of contract claim is without merit.
53. Each and every part of an agreement "must be taken into consideration and given
effect, if possible, and the intention of the parties must be ascertained from the entire
instrument." Marcinak v. Southeastern Greene Sch. Dist., 375 Pa. Super. 486, 491, 544
A.2d 1025, 1027 (1988). Contract interpretation is a question of law that requires the
court to ascertain and give effect to the intent of the contracting parties as embodied in
the written agreement. Robert F. Felte. Inc. v. White. 451 Pa. 137, 144, 302 A.2d 347,
351 (1973). Courts assume that a contract's language is chosen carefully and that the
parties are mindful of the meaning of the language used. Steuart v. McChesney, 498 Pa.
45, 51, 444 A.2d 659, 662. "`When a writing is clear and unequivocal, its meaning must
be determined by its contents alone."' Murphy v. Duquesne University Of The Holy
Ghost 565 Pa. 571, 591, 777 A.2d 418, 429 (2001) (quoting East Crossroads Center Inc.
v. Mellon Stuart Co.. 416 Pa. 229, 231, 205 A.2d 865, 866 (1965)).
54. This Honorable Court can ascertain and interpret the SAMR, and the failure of the
paragraph 5 contingency, based on the clear, unequivocal, and unambiguous terms of the
SAMR and the law cited above.
55. In the request for relief ()WHEREFORE) clause of the Complaint, Plaintiff prayed
for reasonable counsel fees, but failed to specify any contractual or statutory authority for
his request for counsel fees.
56. The only reference to statutory and legal authority for such a counsel fee claim in
the Response to Defendants' Preliminary Objections to Plaintiff's Verified Complaint
was to 42 Pa.C.S.A. § 2503(7) and Stonegate Vill. Homes Ass'n. v. Kenneth Kratz
Mgmt. Co., 2006 Pa. Dist. & Cnty. Dec. LEXIS 98 (Pa. County Ct. 2006).
57. Plaintiff has no claim to counsel fees as a matter of law because Plaintiff's
counsel fee claim was not related to Defendants' conduct occurring during litigation as is
required by 42 Pa.C.S.A. § 2503(7) and Stonegate Vill. Homes Ass'n. v. Kenneth Kratz
Mgmt. Co., 2006 Pa. Dist. & Cnty. Dec. LEXIS 98 (Pa. County Ct. 2006).
58. In the request for relief (WHEREFORE) clause of the Complaint, Plaintiff prayed
for alternative relief under (b) and (c), i.e. that (b) Defendants specifically perform the
terms of the SAMR, and (c) reducing to judgment the total amount agreed between the
parties, $380,000.00, in favor of Plaintiff and against Defendants jointly and severally.
59. At the time of execution of the SAMR, the home at 4755 Rumler Road,
Chambersburg, Franklin County, Pennsylvania ("the Rumler Road Property"), was under
an Agreement for the Sale of Real Estate dated January 30, 2009 (which was in part
negotiated by or through Plaintiff on behalf of his son) between Keith B. Tolbert, Jr., as
Seller, and Donald Lerch and Margaret Lerch, as Buyers, under which Mr. and Mrs.
Lerch agreed to purchase the home for $400,000.00 ("the Agreement of Sale").
Contemporaneous thereto, Mr. and Mrs. Lerch entered into a Residential Lease (which
was in part negotiated by or through Plaintiff on behalf of his son) with Keith B. Tolbert,
Jr. and agreed to lease the Rumler Road Property from Keith B. Tolbert, Jr. as Landlord.
60. Prior to the Agreement of Sale, Plaintiff on behalf of Defendant RETM took out a
construction loan with F&M Trust to construct the home on the Rumler Road Property;
and, subsequent to the Agreement of Sale Keith B. Tolbert, Jr. conveyed the Rumler
Road Property to his grandfather, Defendant Ralph Tolbert, because of the previously
unknown lot purchase of the Rumler Road Property (as discussed in paragraph 39F.)
above).
61. The settlement under the Agreement of Sale was to be on March 15, 2011, or
before if Buyers and Seller agreed.
62. However, on June 16, 2010, counsel for Defendants notified counsel for Plaintiff
by letter that Mr. and Mrs. Lerch's May payment was short $1,200.00, Mr. and Mrs.
Lerch's June payment was not made, and that Mr. and Mrs. Lerch vacated the home on
9 r s
the Rumler Road Property on June 2, 2010, all in repudiation of the Agreement of Sale
and the Residential Lease.
63. Neither Plaintiff nor counsel for Plaintiff has responded in any way to the
undersigned, counsel for Defendants' letter of June 16, 2010.
64. It is believed and therefore averred that Mr. and Mrs. Lerch were and are
judgment-proof, and that pursuing a claim against them under the repudiated Agreement
of Sale would not have been in the financial best interests of either Plaintiffs or
Defendants.
65. Because of Mr. and Mrs. Lerch's repudiation of the Agreement of Sale and the
Residential Lease, " ... the settlement of the home at 4755 R.umler Road, Chambersburg,
PA ..." as contemplated under paragraph 1(A) of the null and void SAMR did not and
could not have occurred even assuming arguendo that the SAMR was not null and void.
66. Because of Mr. and Mrs. Lerch's repudiation of the Agreement of Sale RKT
(Defendants Ralph and Kurt Tolbert) and RETM's payment to KT (Plaintiff) of the sum
of $80,000.00 as contemplated under the paragraph 1(A) Rumler Road settlement
payment term of the null and void SAMR ("the Settlement Payment Term") would have
been legally impossible and/or legally impracticable to perform, or the purpose of the
Settlement Payment Term would have been frustrated in that the supervening event of
Mr. and Mrs. Lerch's repudiation was not reasonably foreseeable at the time of execution
of the SAMR, and such repudiation destroyed the purpose of the Settlement Payment
Term as it was understood by the parties to the SAMR, even assuming arguendo that the
SAMR was not null and void.
67. For those reasons, Defendant Ralph Tolbert and Defendant RETM re-listed the
Rumler Road Property for sale in June, 2010.
68. Because Defendant RETM was servicing the construction loan on the Rumler
Road Property at a cost of on or about $1,655.00/month, because real estate prices were
decreasing, and at the advice of its accountant and F&M Trust, on September 30, 2010
Defendant Ralph Tolbert and Defendant RETM accepted an offer to purchase the Rumler
Road Property for $310,000.00, which offer was significantly higher than other offers
received from June, 2010 through September, 2010 (the prior offers were in the
approximate range of $280,000).
69. At settlement under the new agreement of sale for the Rumler Road Property,
there were no net proceeds and Defendant RETM paid a shortfall of approximately
$28,000.00 remaining on the construction loan to F&M Trust.
70. Prior to settlement under the new agreement of sale for the Rumler Road
Property, Defendants communicated the facts set forth in paragraphs 68 and 69 above to
Plaintiff.
71. Under paragraph 1(A) of the null and void SAMR, Defendants were only required
to make $20,000.00 payments to Plaintiff when the capital account of Defendant RETM
reached and/or exceeded $250,000.00, every month that. Defendant RETM capital
account exceeds $250,000.00 until Defendants have paid Plaintiff $250,000.00 in
monthly payments.
72. Plaintiff would not have been entitled to judgment for $380,000.00 jointly and
severally against Defendants under the null and void SAMR assuming arguendo that the
SAMR was not null and void because the capital account of Defendant RETM has not
reached and/or exceeded $250,000.00 since execution of the SAMR; rather, even
assuming arguendo that the null and void SAMR was in effect, Defendants would only
have been obliged to make the $20,000.00 and the $30,000.00 payments under paragraph
1(A) of the SAMR.
WHEREFORE, Defendants respectfully request that this Honorable Court dismiss
Plaintiff s Verified Complaint with prejudice, enter judgment in favor of Defendants and
against Plaintiff thereon, and enter judgment in favor of Defendants (Counter-Plaintiffs)
and against Plaintiff (Counter-Defendant) on Defendants' Counterclaim.
Counterclaim
73. Paragraphs 1 through 72 above are incorporated herein by reference.
74. Plaintiff s position and breach of contract claim is without merit.
75. Pursuant to 42 Pa.C.S.A. § 2503(7) and Stonegate Vill. Homes Ass'n. v. Kenneth
Kratz Marnt. Co., 2006 Pa. Dist. & Cnty. Dec. LEXIS 98 (Pa. County Ct. 2006),
Plaintiffs position during the pendency of this litigation is dilatory, obdurate, and/or
vexatious.
76. Defendants have suffered and will continue to suffer damages as a result of
Plaintiffs claim in that Defendants have retained the undersigned counsel to represent
them in this matter, and have incurred and will continue to incur counsel fees related to
the representation.
77. It is believed and therefore averred that Plaintiff's claim, which lacks merit, was
brought for dilatory, obdurate, and/or vexatious purposes, and Plaintiffs continued
conduct during the pendency of this matter based on the clear language of the SAMR is
dilatory, obdurate, and/or vexatious.
78. Based on Plaintiffs conduct as described herein, Defendants are entitled to an
award of reasonable counsel fees as a sanction against Plaintiff pursuant to 42 Pa.C.S.A.
§ 2503(7) and Stonegate Vill. Homes Ass'n. v. Kenneth Kratz M mom, 2006 Pa. Dist.
& Cnty. Dec. LEXIS 98 (Pa. County Ct. 2006).
WHEREFORE, Defendants (Counter-Plaintiffs) respectfully request that this
Honorable Court dismiss Plaintiff's Verified Complaint with prejudice, and enter
judgment in favor of Defendants (Counter-Plaintiffs) and against Plaintiff (Counter-
Defendant) for Defendants' (Counter-Plaintiffs') reasonable counsel fees, proof of which
will be presented at the time of trial or hearing thereon.
B3
.
I verify that the statements made in this Defendants' Answer to Plaintiffs
Verified Complaint with Defendants' New Matter and Counterclaim are true and correct.
I understand that false statements herein are made subject to the penalties of 18 Pa.C.S.A.
Section 4904, relating to unsworn falsification to authorities.
RALPH E. TOLBERT MASONRY, INC.
By C?
Ralph 9 Tolbert
By
Kurt E. Tolbert
I verify that the statements made in this Defendants' Answer to Plaintiff's
Verified Complaint with Defendants' New Matter and Counterclaim are true and correct.
I understand that false statements herein are made subject to the penalties of 18 Pa.C.S.A.
Section 4904, relating to unsworn falsification to authorities.
Ralph E. Tolbert
I verify that the statements made in this Defendants' Answer to Plaintiff's
Verified Complaint with Defendants' New Matter and Counterclaim are true and correct.
I understand that false statements herein are made subject to the penalties of 18 Pa.C.S.A.
Section 4904, relating to unsworn falsification to authorities.
Kurt E. Tolbert
V n• •
NEGATIVE COVENANTS. Borrower covenants and agrees with lender that while this Agreement Is In effect, Borrower shad not, without the
prior written consent of Lender
Csplls Eapantsheee. Make or contract to make capital expandHraa, Including loesshsld improvements. In any fiscal Vow In excess of
• er Incur lobithy for ne. set property ltmbuding both real and psnonal property)
b an NO MA together with capital expend tries, I In any fiscal year exceed such sum.
Indebbdnsss and Lines. 11) Except for trade debt incurred in the normal course of business and khdabledness to Lander contemplated by
this Agraeme create Imur or assume oddhtonai khdeMadnses for borrowed money, kckXbq ospks losses, In excess of the eggregets
amount of !< 56.OOER . IM sell, transfer, mortgage, ssslgn, pledge. tease, grant a security
BUSINESS LOAN AGREEMENT IASSET BASED}
(Cofninued) Page q
Iriersst In, or encumber arty of Borrower's waste lexcept as allowed as Permitted Lions), or 131 sell with recourse any of Borrower's
accounts, except to Lender.
Condmilly of Operafte. (11 Engage In any business activities substantially different than dhesa In which Borrower Is presently engaged.
(2) comae operations. IkNWats, merge, transfer, acquire or consolidate with any other entity, sharps its nam, dissolve of trander of sell
Collateral out of the ordinary course of business, or 181 pay any dividends on Borrower's stock (other than dhldands payable In Its stook,
provided, however that notwithstanding the foregoing, but only so long as no Evil of Default has occurred and Is cwtdnukq or would
result from the payment of dIvI I Ice, It Borrower is a •Sube apter 8 Corporation' loo defied In the Infernal Revenue Cods of 1888, as
amended). Borrower may pay cash dividends on its stock to its shareholders from time to the In amounts necessary to enable the
shareholders to pay Income taxes and molts satimated Income tax payments to am" their Whtiss under federal ofd state low, which
arise solely from their status as Shsrehcders of a Subchapter S Corporation because of their ownership of shares of Borrowges stook, or
purchase or retire any of Sorrower's outstanding shares or attar or amend Borrower's capital strueturs.
Loans' Acquisitions sad Guarerntias. (11 Exempt as expressly stated hereafter, ban, Invest In or advance money or assets to any other
person, enterprise or amity, (21 purehoss, orests or acquire any Interest in'sny other enterprise or soft, or (3) Incur any obligation es
surety or guarantor other than In the ordinary course of business. The following exceptions are expressly exempted from the foregoing
restrictions: l60.000A0.
Agreements, Emus Into any agreement oernalhirg any provisions which would be violated or breached by the performance of Borrower's
obligations ender this Agreement or In connection herewith.
EXHIBIT
0-1
..
Andrew J. Benchoff, Esq.
Attorney for Defendants
Kornfield and Senchoff, LLP
17 North Church Street
Waynesboro, PA 17268
(717) 762-8222
PAX 762-6544
andrew@kornfield.net
Atty. I.D. #89159
KEITH TOLBERT, SR., : IN THE COURT OF COMMON PLEAS OF
: THE 9TH JUDICIAL DISTRICT, PA.
Plaintiff
CUMBERLAND COUNTY
v
CIVIL ACTION -LAW
RALPH E. TOLBERT
MASONRY, INC., RALPH E.
TOLBERT, and KURT -
TOLBERT,
Defendants : No. 10-2612 Civil Term
. Judge:
CERTIFICATE OF SERVICE
This is to certify that in this case, not yet assigned to a Judge, complete copies of
all papers contained in the Defendants' Answer to Plaintiffs Verified Complaint with
Defendants' New Matter and Counterclaim have been served upon the following
person(s), by the following means and dates stated:
Jack Meyerson, Esq.
Peter A. Greiner, Esq.
Meyerson & O'Neill
1700 Market Street, Suite 3025
Philadelphia, PA 19103
Via: First Class U.S. Mail
Date: December 30 , 2010
I verify that the statements made in this Certificate are true and correct. I
understand that false statements herein are made subject to the penalties of 18 Pa. C.S.A.
Section 4904 relating to unsworn falsification to authorities.
K
B
.
THOINOTA", `
Andrew J. Benchoff, Esq.
Attorney for Defendants
Kornfield and Benchoff, LLP
20H FEB -4 PP l: 3
17 North Church Street
Waynesb
oro, PA 17268
ERLAD COUNTY
762-8222
FAX7' rUM$
PENNSYLVANIA
762-6544
andrew@kornfield.net
Atty. I.D. #89159
KEITH TOLBERT, SR., : IN THE COURT OF COMMON PLEAS OF
: THE 9TH JUDICIAL DISTRICT, PA.
Plaintiff .
CUMBERLAND COUNTY
V. .
CIVIL ACTION -LAW
RALPH E. TOLBERT .
MASONRY, INC., RALPH E.
TOLBERT, and KURT
TOLBERT,
Defendants : No. 10-2612 Civil Term
. Judge:
: Jury Trial Demanded
DEFENDANTS' DEMAND FOR JURY TRIAL
TO THE HONORABLE JUDGES OF THE SAID COURT OF COMMON PLEAS:
Defendants Ralph E. Tolbert Masonry, Inc., Ralph E. Tolbert, and Kurt Tolbert
hereby demand a jury trial pursuant to Pa.R.C.P. No. 1007.1.
Date: February , 2011
By
Andrew J. Benchoff, Esq.
Attorney for Defendants
Kornfield and Benchoff, LLP
17 North Church Street
Waynesboro, PA 17268
(717) 762-8222
FAX 762-6544
andrew@kornfield.net
Atty. I.D. #89159
KEITH TOLBERT, SR., : IN THE COURT OF COMMON PLEAS OF
: THE 9TH JUDICIAL DISTRICT, PA.
Plaintiff ,
: CUMBERLAND COUNTY
V. ,
CIVIL ACTION - LAW
RALPH E. TOLBERT ,
MASONRY, INC., RALPH E. ,
TOLBERT, and KURT ,
TOLBERT, ,
Defendants : No. 10-2612 Civil Term
: Judge:
: Jury Trial Demanded
CERTIFICATE OF SERVICE
This is to certify that in this case, not yet assigned to a Judge, complete copies of
all papers contained in the Defendants' Demand for Jury Trial have been served upon the
following person(s), by the following means and dates stated:
Jack Meyerson, Esq.
Peter A. Greiner, Esq.
Meyerson & O'Neill
1700 Market Street, Suite 3025
Philadelphia, PA 19103
Via: First Class U.S. Mail
Date: February 3 , 2011
I verify that the statements made in this Certificate are true and correct. I
understand that false statements herein are made subject to the penalties of 18 Pa. C.S.A.
Section 4904 relating to unsworn falsification to authorities.
MEYERSON & O'NEILL
By: Jack Meyerson, Esquire
Peter A. Greiner, Esquire
Identification Nos. 16405/81957
1700 Market Street, Suite 3025
Philadelphia, PA 19103
(215) 972-1376
KEITH TOLBERT, SR.
Plaintiff
1=11 _ED-O FIH
_I_HEE P, ROTHONOTAR
2011 JUL -1 AM 10-- 24
CUMBERLAND COUNTY
PENNSYLVANIA
Attorneys for Plaintiff
IN THE COURT OF COMMON PLEAS
OF THE 9T" JUDICIAL DISTRICT, PA
V.
RALPH E. TOLBERT MASONRY, INC.
and
RALPH E. TOLBERT
and
KURT TOLBERT
Defendants
CUMBERLAND COUNTY
CIVIL ACTION- LAW
NO. 10-2612
PRAECIPE TO DISCONTINUE ACTION
TO THE PROTHONOTARY:
Pursuant to Pa. R.C.P. 229(a), please mark the above as discontinued and
ended.
Peter A. Greiner
Meyerson & O'Neill
1700 Market Street, Ste. 3025
Philadelphia, PA 19103
DATED: July 6, 2011
MEYERSON & O'NEILL
By: Jack Meyerson, Esquire
Peter A. Greiner, Esquire
Identification Nos. 16405/81957
1700 Market Street, Suite 3025
Philadelphia, PA 19103
(215) 972-1376
KEITH TOLBERT, SR.
Plaintiff
V.
RALPH E. TOLBERT MASONRY, INC.
and
RALPH E. TOLBERT
and
KURT TOLBERT
Defendants
CERTIFICATION OF SERVICE
Attorneys for Plaintiff
IN THE COURT OF COMMON PLEAS
OF THE 9T" JUDICIAL DISTRICT, PA
CUMBERLAND COUNTY
CIVIL ACTION- LAW
NO. 10-2612
This is to certify that in the case not yet assigned a judge, complete copy of the
Praecipe to Discontinue Action has been served upon the following persons, by the
following means and on dates stated:
Name and address:
Means of Service:
Date of Service:
Andrew J. Benchoff, Esq.
Kornfield & Benchoff, LLP
17 N. Church Street
Waynesboro, PA 17268
Counsel for Defendants
E-mail
U.S. Mail
July 6, 2011
Sent July 6, 2011
I verify that the statements made in this Certification are true and correct. I
understand that any false statements made herein are made subject to the penalties of
18 Pa.C.S.A. § 4904 relating to unsworn falsification to authorities.
MEYERSON & O'NEILL
By: 4?
Peter A. Greiner, Esq.
Attorney for Plaintiff Keith Tolbert, Sr.