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HomeMy WebLinkAbout10-3863 WEBB S. HERSPERGER, M.D., Plaintiff V. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA No. !b 3812 0- v L KESSLER'S AUTO GLASS, LLC, MARSHALL KESSLER and JENNIFER CIVIL ACTION KESSLER, jointly and individually Defendants 2ot,5 P'i+nQ'r vliitwa. Cnurl?sle, VA lZo iS PRAECIPE FOR WRIT OF SUMMONS McNEES WALLACE & NURICK LLC By Alan R. Boynto , Jr. Supreme Court I.D. 39850 100 Pine Street, P.O. Box 1166 Harrisburg, PA 17108-1166 717-232-8000 Attorneys for Plaintiff Date- June 10, 2010 TO THE PROTHONOTARY OF SAID COURT: Please issue writ of summons in the above-captioned action. The Writ of Summons shall be issued and forwarded to Attorney. t, 7, M, 7 , ?Y3S57 4 WEBB S. HERSPERGER, M.D., IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V. No. KESSLER'S AUTO GLASS, LLC, MARSHALL KESSLER and JENNIFER CIVIL ACTION KESSLER, jointly and individually Defendants WRIT OF SUMMONS TO: KESSLER'S AUTO GLASS, LLC, MARSHALL KESSLER and JENNIFER KESSLER, jointly and individually: YOU ARE HEREBY NOTIFIED that Webb S. Hersperger, M.D., Plaintiff, has commenced an action against you. Date: (,//f//b David Buell, Protho otary By: (Deputy) Seal of the Court SHERIFF'S OFFICE OF CUMBERLAND COUNTY Ronny R Anderson Sheriff ~Q~,,,titr of uair,lr~rfr~r~ ~L.lr~l~t L~r' ,,_ ~~ -~.~;~- ~ ; ~ ,17 ~ ARY Jody S Smith Chief Deputy Richard W Stewart Solicitor Webb S. Hersperger, MD vs. Kessler's Auto Glass, LLC (et al.) #~ ~~ ~r~~~~E ~.:~ T.._ ~~~~I~~ Case Number 2010-3863 SHERIFF'S RETURN OF SERVICE 06/28/2010 08:25 PM -Shawn Harrison, Deputy Sheriff, who being duly sworn according to law, states that on June 28, 2010 at 2020 hours, he served a true copy of the within Writ of Summons, upo a within named defendant, to wit: Jennifer Kessler, by making known unto herself personally, at 2 65 Ritner Highway, Carlisle, Cumberland County, Pennsylvania 17015 its contents and at th~~e t' a anding to her personally the said true and correct copy of the same. 111111 - RISON, DEPUTY 06/28/2010 08:25 PM -Shawn Harrison, Deputy Sheriff, who being duly sworn according to la ,states that on June 28, 2010 at 2020 hours, he served a true copy of the within Writ of Summons, up the within named defendant, to wit: Marshall Kessler, by making known unto himself per Ily, a 2 5 Ritner Highway, Carlisle, Cumberland County, Pennsylvania 17015 its contents and at he me ti handing to him personally the said true and correct copy of the same. _ WN HARRI~ON, DEPUTY 06/28/2010 08:25 PM -Shawn Harrison, Deputy Sheriff, who being duly sworn according to law, states that on June 28, 2010 at 2020 hours, he served a true copy of the within Writ of Summons, upon the within named defendant, to wit: Kessler's Auto Glass, LLC, by making known unto Ma h II Kes ler, Owner of Kessler's Auto Glass, LLC at 2065 Ritner Highway, Carlisle, Cumberland County, n syl a is 17015 its contents and at the same time handing to him personally the said true and corre y th same. S AWN HA RISON, DEPUTY SHERIFF COST: $65.40 June 29, 2010 SO ANSWERS, ~~---_ RON R ANDERSON, SHERIFF i.c) CountySuite Sheriff, Teleosoft. Inr,. .{ J WEBB S. HERSPERGER, M.D., IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V. : No. 2010-3863 C-) r. KESSLER'S AUTO GLASS, LLC, MARSHALL KESSLER and JENNIFER CIVIL ACTION ?M KESSLER, jointly and individually u; `-' Defendants -e N 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 34 S. Bedford Street Carlisle, Pennsylvania 17013 717-249-3166 McNEES WALLACE & NURICK LLC By 49144 Efo4e t4 Alan R. Boyr. At torney I. D. No. 39850 100 Pine Street P. O. Box 1166 Harrisburg, PA 17108-1166 (717) 232-5000 Attorneys for Plaintiff -,, ?o Dated: December 1, 2010 WEBB S. HERSPERGER, M.D., IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V. No. 2010-3863 KESSLER'S AUTO GLASS, LLC, MARSHALL KESSLER and JENNIFER CIVIL ACTION KESSLER, jointly and individually Defendants COMPLAINT AND NOW COMES Plaintiff Webb S. Hersperger, M.D., by his attorneys, McNees, Wallace & Nurick, and makes the following Complaint against Defendants Kessler's Auto Glass, LLC ("KAG"), Marshall Kessler and Jennifer Kessler, jointly and individually. A. PARTIES 1. Plaintiff is an adult individual residing in Silver Spring Township, Cumberland County, Pennsylvania. 2. Defendant KAG is a Pennsylvania limited liability company having its principal place of business at 2065 Ritner Highway, Carlisle, Cumberland County, Pennsylvania. 3. KAG is engaged in the business of automotive window repair and replacement. 4. Defendants Marshall and Jennifer Kessler ("the Kesslers") are adult individuals who reside at 2065 Ritner Highway, Carlisle, Cumberland County, Pennsylvania. The Kesslers are husband and wife. - 1 - B. FACTUAL BACKGROUND 5. In December 2009, Plaintiff agreed to support the Kesslers in an effort to create a new business, to be known as "Kesslers Auto Glass." 6. Plaintiff and Marshall Kessler then met with the executive director of the Murata Business Incubator to discuss creation of a new glass replacement and repair business. 7. The business plan submitted to the Murata Business Incubator was well received and Marshall Kessler was encouraged to seek financial backing for the anticipated enterprise. 8. On December 21, 2009, Plaintiff and Defendants entered into an agreement identified therein as a Business Agreement ("Business Agreement"), pursuant to which Plaintiff would be a 40% owner of the glass repair and replacement business in return for his providing start-up funding for the enterprise. 9. The Business Agreement was executed by the Kesslers on January 10, 2010. A true and correct copy of the Business Agreement is attached hereto as Exhibit "A." 10. Almost immediately following execution of the Business Agreement, KAG began business operations. 11. Pursuant to the Business Agreement, Plaintiff began providing start up funding to KAG and began to pay bills for the business. -2- 12. On December 29, 2009, Plaintiff provided the sum of $15,350.00 to permit KAG to purchase a vehicle to be used for business purposes. 13. Also on December 29, 2009, Plaintiff provided the sum of $6,000.00 for the purchase of glass installation equipment. 14. Between January 1, 2010 and April 30, 2010, Plaintiff invested an additional $52,761.00 in start-up costs for KAG, for a total investment to date of $74,110.50. 15. In January, 2010, without informing Plaintiff of such action, and contrary to the terms of the Business Agreement, Marshall Kessler formed KAG as a Pennsylvania limited liability company, with himself as the sole member. A true and correct copy of the Pennsylvania Department of State Corporations Bureau filing for the entity is attached hereto as Exhibit "B." 16. Marshall Kessler did not advise Plaintiff of his formation of KAG until May, 2010, at which time he presented Plaintiff with several proposed documents, including a draft "Buy-Sell Agreement" to Plaintiff. The draft agreement identified Marshall Kessler as the "Owner" of the business, with Plaintiff identified as an "Investor." A true and correct copy of the proposed Buy-Sell Agreement is attached hereto as Exhibit "C." 17. The draft Buy-Sell Agreement identified KAG as a "partnership," a representation inconsistent with both the creation of the limited liability company by Marshall Kessler in January 2010 and the identification of Plaintiff as an investor and -3- Marshall Kessler as the Owner of the business. A true and correct copy of the draft Buy-Sell draft agreement is attached hereto as Exhibit "B." 18. The draft Buy-Sell agreement was not entered into or executed by the parties. 19. The Kesslers have sole and exclusive control of all business and financial records of KAG. 20. Pursuant to the Business Agreement, Marshall Kessler was to be paid a sum of $2,500 per month in salary. 21. Upon information and belief, Marshall Kessler has unilaterally, and contrary to the terms of the Business Agreement, increased his compensation. 22. Upon information and belief, Marshall Kessler has drawn, or plans to draw, profits from KAG without providing Plaintiff with 40% of all such profits. 23. Marshall Kessler, allegedly on advice of his counsel, has refused to further discuss any matters relating to KAG with Plaintiff. 24. Marshall Kessler has further refused to identify his counsel so that communications could be made through counsel. COUNTI BREACH OF CONTRACT 25. Plaintiff incorporates Paragraphs 1 - 24 of this Complaint as if set forth in full. -4- 26. The Business Agreement is a valid and binding contract between Plaintiff and Defendants. 27. Pursuant to the Business Agreement, Plaintiff has a 40% ownership of KAG. 28. Defendants have materially breached the Business Agreement by a. creating KAG as a limited liability company with Marshall Kessler as the sole owner; b. unilaterally modifying Marshall Kessler's compensation to a level inconsistent with that agreed to by the parties; C. failing to provide Plaintiff with 40% of the profits of the enterprise; and d. refusing to provide Plaintiff with information about the business activities of KAG. 29. As a result of Defendants" breaches of the contract, Plaintiff has suffered damages, including but not limited to, lost profits, business expenses, and additional costs. WHEREFORE, Plaintiff requests that judgment be entered in his favor and against Defendants and Plaintiff be awarded (1) compensatory damages in excess of the arbitration limits of this Court; (2) an order compelling Defendants to specifically perform the terms of the Business Agreement, (3) costs and interest to Plaintiff; and (4) such other relief as deemed appropriate and just. COUNT If PROMISSORY ESTOPPEL -5- (Pled in the Alternative to Count 1) 30. Plaintiff incorporates Paragraphs 1 - 24 of this Complaint as if set forth in full. 31. The doctrine of promissory estoppel, as set forth in § 90 of the Restatement (Second) of Contracts, has been adopted in the Commonwealth of Pennsylvania. 32. Promissory estoppel arises when a party relies to his detriment on the representations or promises of another party such that, to prevent the relying party from being harmed, the inducing party will be estopped from showing that the facts are not as the relying party understood them to be. 33. Promissory estoppel is applicable to enforce a promise which may not otherwise be supported by consideration or be otherwise enforceable in contract. 34. Defendants, through the Business Agreement, made promises and representations to Plaintiff that Plaintiff would, based upon his investment in KAG, be 40% owner of KAG. 35. Defendants knew, or reasonably should have known, that such promises and representations would induce Plaintiff to invest substantial sums in a business created by Defendants. 36. Based upon the promises and representations of Defendants and the expectation of a 40% ownership interest in the automotive business established by -6- Defendants, Plaintiff did actually expend substantial funds for the benefit of KAG and Defendants, which KAG has utilized in the operation of its business. 37. Injustice can only be avoided by enforcement of the promises made by Defendants in the Business Agreement. WHEREFORE, should the Court determine, for whatever reason, that the Business Agreement is not enforceable in contract, Plaintiff demands, in the alternative, that judgment be entered in his favor and against Defendants on Count II of his Complaint and that (1) the promises set forth by Defendants in the Business Agreement be enforced under the doctrine of promissory estoppel; (2) Plaintiff be awarded compensatory damages in excess of the arbitration limits of this Court, as well as costs and interest; and (3) the Court grant such other relief as deemed appropriate and just. COUNT III UNJUST ENRICHMENT (Pled in the Alternative to Count 1) 38. Plaintiff incorporates Paragraphs 1 - 24 of this Complaint as if set forth in full. 39. The doctrine of unjust enrichment, as set forth in the Restatement of Restitution has been adopted in the Commonwealth of Pennsylvania. 40. Under the doctrine of unjust enrichment, a party receiving a benefit from another party is required to pay the value of such benefit to avoid the party being unjustly enriched at the expense of the other party. -7- 41. Defendants have received from Plaintiff the sum of $74,110.50 to enable it start and engage in business operations. 42. Absent the funds received from Plaintiff, Defendants would not have been able to start or operate KAG. 43. Allowing Defendants to retain the benefit of the funds provided by Plaintiff without compensating Plaintiff for the value thereof would be unjust. WHEREFORE, should the Court determine, for whatever reason, that the Business Agreement is not enforceable in contract, Plaintiff demands, in the alternative, that judgment be entered in its favor and against Defendant on Count III of his Complaint and that (1) Defendants be compelled to compensate Plaintiff the full value of the enrichment conferred upon Defendants, as well as costs and interest; and (2) the Court grant such other relief as deemed appropriate and just. COUNT IV FRAUDULENT MISREPRESENTATION 44. Plaintiff incorporates Paragraphs 1 - 24 of this Complaint as if set forth in full. 45. Defendants induced Plaintiff to invest substantial funds in a business enterprise started by Defendants by representing (1) that Plaintiff was to be a 40% owner thereof; and (2) Defendant Marshall Kessler, although to be a 60% owner of said business, was to be paid compensation of $2,500 per month. -8- 46. In making these representations, Defendants did not disclose that they had no intention of allowing the creation of a business under which Plaintiff would be a 40% owner or which would restrict Marshall Kessler's salary to $2,500 per month. 47. Defendants knew, but did not disclose, at the time that they accepted funds from Plaintiff for the start-up and business operations of KAG, that they were applying such funds to an enterprise in which Marshall Kessler was the sole owner thereof. 48. Plaintiff was induced by Defendants' representations of material facts, as identified above, to provide to Defendants substantial funds to start up and operate KAG. 49. But for Defendants' representations, Plaintiff would not have provided to Defendants the sum of $74,110.50. 50. Defendants willfully schemed to cause, and did in fact cause, the wrongful conveyance of Plaintiffs funds to Defendants with no intention of providing the ownership interest promised in consideration for such conveyance. 51. The fraudulent conduct of Defendants described above evinced a high degree of moral turpitude and demonstrated such wanton dishonesty as to imply a complete indifference to civil obligations. 52. As a result of the foregoing, Plaintiff has suffered substantial harm. WHEREFORE, Plaintiff demands that judgment be entered in his favor and against Defendants on Count IV of the Complaint and that Plaintiff be awarded (1) -9- compensatory damages in excess of the arbitration limits of this Court; (2) costs and interest; (3) punitive damages; and (4) such other relief as deemed appropriate and just. COUNT V BREACH OF FIDUCIARY DUTY - OPPRESSION OF MINORITY OWNER BY MARSHALL KESSLER 53. Plaintiff incorporates Paragraphs 1 - 24 of this Complaint as if set forth in full. 54. Pursuant to the Business Agreement, Plaintiff is a 40% owner of KAG. 55. A majority owner of a business owes a fiduciary duty to protect the reasonable expectations of the minority shareholders. 56. "Shareholder oppression" occurs when a majority shareholder uses his majority position to defeat the reasonable expectations of the minority shareholder. 57. Majority shareholders may not use their power to exclude minority shareholders from their share of the benefits accruing from the business. 58. Defendant Marshall Kessler has denied Plaintiff access to the books and records of KAG. 59. Defendant Marshall Kessler has refused to provide to Plaintiff 40% of profits distributed by KAC. 60. Defendant Marshall Kessler has refused to communicate with Plaintiff regarding any aspect of the operation or management of KAG. -10- 61. Upon information and belief, Defendant Marshall Kessler has diverted and utilized KAG assets for personal expenses of himself and Defendant Jennifer Kessler. 62. Defendant Marshall Kessler's conduct has not been in the best interests of Plaintiff, the minority shareholder. 63. Defendant Marshall Kessler's conduct has constituted a breach of his fiduciary duty to Plaintiff. 64. Defendant Marshall Kessler's conduct has been to the detriment of Plaintiff as it has prevented Plaintiff from gaining the full value of his 40% ownership interest in KAG. WHEREFORE, Plaintiff demands that judgment be entered in his favor and against Defendant Marshall Kessler on Count V of the Complaint and that Plaintiff be awarded (1) compensatory damages in excess of the arbitration limits of this Court; (2) costs and interest; (3) punitive damages; and (4) such other relief as deemed appropriate and just. COUNT VI MISAPPROPRIATION OF CORPORATE ASSETS BY MARSHALL KESSLER 65. Plaintiff incorporates Paragraphs 1 - 24 of this Complaint as if set forth in full. 66. Upon information and belief, and as set forth above, Defendant Marshall Kessler has diverted and utilized corporate funds of KAG for personal benefit. - 11 - 67. Defendant Marshall Kessler's conduct has been in breach of his fiduciary duty to KAG and its owners. 68. Marshall Kessler has been unjustly enriched through his diversion of corporate assets for personal use. WHEREFORE, Plaintiff demands judgment in his favor and against Defendant Marshall Kessler on Count VI of the Complaint and that Defendant Marshall Kessler be ordered to return to KAG all KAG funds utilized by him for personal expenses and benefit; and that Marshall Kessler be ordered to pay to Plaintiff the attorneys fees, costs and expenses incurred in protecting the assets of KAG. McNEES WALLACE & NURICK LLC BY 010440!9 Cyl Alan R. Boyn , Jr. Attorney I.D. No. 39850 100 Pine Street P. O. Box 1166 Harrisburg, PA 17108-1166 (717) 232-5000 Attorneys for Plaintiff Dated: December 1, 2010 -12- VERIFICATION Subject to the penalties of 18 Pa. C.S. §4904, relating to unswom falsification to authorities, I hereby certify that I have read the foregoing document and that the facts set forth therein are true and correct to the best of my knowledge, information and belief. 11?? h2)-- Webb S. Hersperger, M.D. Dated: December 1, 2010 l? ???? ? %. Business Agreement between Marshall and Jenn Kessler and Webb S. Hersperger,M.D. 21 December 2009 Marshall and Jenn wish to establish an automotive related business that will engage in various aspects of auto care. This endeavor will recognize the expertise and training of Marshall and the Financial support of Webb S. Hersperger, M.D. . Financial backing to establish the business , which includes considerable risk as a new business will recognize in ownership both the Kesslers and Dr. Hersperger. Start up funds of approximately $25,000.00 to $30,000.00 will be utilized to purchase an appropriate service vehicle and other necessary equipment, establish business relationships and accounts. There will be included appropriate insurance coverage to cover business liability and outstanding business related indebtedness , in the event of an accident or other unforeseen unfavorable events. Salary to Marshall as the business is initiated will be established at $2,500. 00/ month gross pay. Ownership of the business will recognize both the expertise and management capabilities of Marshall as 60% owner and Dr. Hersperger as 40 % owner. Signed: Marshall Kessler /-"C'/ date Jenn Kessler date Webb S. Hersperg r, M. O. date - 20 0 ;? ??? ??? Business Entity Page 1 of 1 Corporations Online Services I Corporations I Forms I Contact Corporations I Business Services Search Business Entity By Business Name Filing History By Business Entity ID Date: 12/1/2010 (Select the link above to Verify view the Business Entity's Verify Certification Filing History) Online Orders Register for Online Orders Business Name History Order Good Standing Order Certified Documents Name Name Type Order Business List Kessler's Auto Glass, LLC Current Name My Images Search for Images Limited Liability Company - Domestic - Information Entity Number: 3927986 Status: Active Entity Creation Date: 1/12/2010 State of Business.: PA Registered Office Address: 2065 Ritner Highway Carlisle PA 17015 Cumberland Mailing Address: No Address U n o Horr.e Copyright ® 2002 Pennsylvania Department of State. All Rights Reserved. Commonwealth of PA Privacy Statement https://www.corporations. state.pa.us/core/soskb/Corp.asp?2815021 12/1/2010 ??1? ?, ?j DRAFT Kessler's Auto Glass Buy-Sell Agreement Agreement made on the _ day of , 20, between Marshall Kessler, d.b.a. Kessler's Auto Glass, LLC of 2065 Ritner Highway, Carlisle, PA 17015, referred to herein as "Owner", and Dr. Webb S. Hersperger, Jr. of 53 Creek Bank Drive, Mechanicsburg, PA 17050, referred to herein as "Investor.". Whereas, Owner and Investor are engaged in the business of auto glass repair and replacement, hereinafter referred to as Business, under the Partnership name of Kessler's Auto Glass, and the Partnership's principal place of business is at 2065 Ritner Highway, Carlisle, PA 17015; and Whereas, Owner and Investor desire (1) to provide for the sale by a Partner during his or her lifetime, or by a deceased Partner's estate, with the purchase of such interest by the remaining Partner to be at a price fairly established; and (2) to provide all or a substantial part of the funds for the purchase in the case of a sale by a deceased Partner's estate. Now, therefore, for and in consideration of the mutual covenants contained in this agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows (both individually and for the Partnership as an entity): 1. At this time, each Partner's interest in the Partnership is as follows: Owner owns 51 %; and Investor owns 49%. 2. While this agreement is in effect, neither Partner shall have the right to assign, encumber or dispose of his/her interest in the Partnership except as provided herein. 3. Upon the death of a Partner, his/her estate shall sell, and the surviving Partner shall purchase, the deceased partner's entire interest in the Partnership for the price and pursuant to the other terms provided herein. The Partners expressly agree that upon the death of Investor, the surviving Partner shall continue the business as a sole proprietorship, or in such other form of business as said surviving Partner shall choose with minimal interruption. 4. If either Partner desires to withdraw from the Partnership or to sell or otherwise dispose of any part of his/her interest during his/her lifetime, he/she shall give the other Partner (herein 1 referred to as Remaining Partner) written notice of his/her intention. If there is a prospective transferee other than the Remaining Partner, such notice shall state the name and address of such transferee and the terms and conditions of the proposed transfer. 5. Upon receipt of such written notice referred to in Paragraph 4, the Remaining Partner shall have the right to purchase all of the interest offered for sale or transfer. The purchase price shall be the amount established in Paragraphs 8 and 9 below; provided, however, that if a lower price was stated in the notice to the Partnership, the Remaining Partner shall have the right to purchase said partnership interest at such lower price. 6. The Remaining Partner shall pay for the interest of the selling Partner in cash (or by cash and a Promissory Note as described in Paragraph 7) on the date of sale, and thereafter the selling Partner shall not participate in the profits of the Business. 7. The Remaining Partner shall have the right to pay for the interest he/she purchases upon the following terms: 75 % of the purchase price in cash upon the date of exercise of the option to purchase with the balance to be evidenced by a Promissory Note containing the following provisions: A. The unpaid balance of said Note shall bear interest at the rate of 2_% per annum. B. Principal and interest shall be due and payable at the address of selling partner in 12 consecutive equal monthly installments on the first day of each month beginning on the first day of the month following the exercise of this option by Remaining Partner. Each subsequent monthly installment shall be due and payable on the first day of each succeeding month thereafter until the entire indebtedness evidenced by this Note is fully paid. C. In the event default is made in the payment of this Note at maturity, or of any installment thereof, whether maturing by expiration of time, by default as herein provided, and same is placed in the hands of an attorney for collection, then an additional amount of Fifteen Percent (15%) on the principal and interest of this Note shall be added to the same as a collection fee, and the failure to pay any installment when due shall mature the entire indebtedness at the option of the holder of this Note. D. The Remaining Partner may prepay the principal amount outstanding in whole or in part without penalty. The holder of this Note may require that any partial prepayments (i) be on the date monthly installments are due, and (ii) be in the amount of that part of one or more monthly installments which would be applicable to principal. Any partial prepayment shall be applied against the principal amount outstanding and shall not postpone the due date of any subsequent monthly installments or change the amount of such installments, unless the holder of this Note shall otherwise agree in writing. E. The Remaining Partner shall waive presentation for payment, demand, protest, diligence in collecting, and notice of dishonor, notice of extension of time, notice of protest, and notice of nonpayment of this Note. 8. Owner and Investor agree that at this time the fair market value of the Partnership's assets, including goodwill is $150,000, and the purchase price to be paid by the Remaining Partner pursuant to this Agreement shall be 75% of that amount. This value shall remain effective for the purposes herein until there is a redetermination of the value as provided in Paragraph 9. 9. At the end of each fiscal year of the Partnership, the Partners shall redetermine this value and shall indicate the new values by entries in Schedule A attached hereto. Each new set of values entered in Schedule A shall be signed by both Partners, and the last value entered opposite in Schedule A shall be controlling for the purposes of this Agreement. In determining the value of a deceased Partner's interest in the Partnership after his/her death, the excess of the death claim proceeds over the cash values of the insurance policies on his/her life which are subject to this Agreement at the time of his/her death shall not be taken into account. 10. To assure that all or a substantial part of the purchase price of a deceased Partner's interest will be available in cash upon his/her death, the Partnership has purchased key man life insurance on the lives of each Partner from the Insurance Company in the amount of $ with the Partnership as the beneficiary. 11. The Procedure upon the death of a Partner shall be as follows: A. The surviving Partner, on behalf of the Partnership as beneficiary, shall promptly file a claim to collect in cash the one-sum death proceeds of the policies on the deceased Partner's life. Upon the collection of such proceeds and the qualification of a personal representative for the deceased Partner, the surviving Partner shall pay over to the personal representative an amount equal to the full proceeds collected, in part or in full payment for the deceased Partner's interest in the Partnership. Should Investor die within five years of the date of this agreement, Partner shall pay to Investor 5% of the net worth of the company in addition to the Investor's interest in the Partnership. 3 B. If the one-sum death proceeds of the policy on the deceased Partner's life is less than the total purchase price for his/her interest as provided herein, the surviving partner, on behalf of the Partnership, shall either pay the balance forthwith in cash, or in lieu of such cash payment shall execute and deliver to the personal representative of the deceased partner's estate a Promissory Note containing the following provisions: i. The unpaid balance of said Note shall bear interest at the rate of 2% per annum. ii. Principal and interest shall be due and payable, at such address as the personal representative of the deceased partner shall designate to the surviving Partner in writing, in 12 consecutive equal monthly installments on the first day of each month beginning on the first day of the month following the payment of the insurance proceeds to the personal representative of the deceased partner's estate. Each subsequent monthly installment shall be due and payable on the first day of each succeeding month thereafter until the entire indebtedness evidenced by this Note is fully paid. W. In the event default is made in the payment of this Note at maturity, or of any installment thereof, whether maturing by expiration of time, by default as herein provided, and same is placed in the hands of an attorney for collection, then an additional amount of Fifteen Percent (15%) on the principal and interest of this Note shall be added to the same as a collection fee, and the failure to pay any installment when due shall mature the entire indebtedness at the option of the holder of this Note. iv. The surviving Partner may prepay the principal amount outstanding in whole or in part without penalty. The holder of this Note may require that any partial prepayments (i) be on the date monthly installments are due, and (ii) be in the amount of that part of one or more monthly installments which would be applicable to principal. Any partial prepayment shall be applied against the principal amount outstanding and shall not postpone the due date of any subsequent monthly installments or change the amount of such installments, unless the holder of this Note shall otherwise agree in writing. v. The surviving Partner shall waive presentation for payment, demand, protest, diligence in collecting, and notice of dishonor, notice of extension of time, notice of protest, and notice of nonpayment of this Note. D. The personal representative of the deceased Partner shall promptly execute (and shall cause any other party or parties whose signatures may be necessary to transfer a complete title to the deceased Partner's interest to execute) and, concurrently with receipt of the full purchase price for the deceased Partner's interest (either in cash, or in cash and note, as provided above), shall deliver all instruments necessary to effectuate the transfer of the deceased Partner's interest in and to the Partnership, as of the date of the deceased Partner's death. Transfer of such interest shall be made free and clear of all taxes, debts, claims, or other encumbrances whatsoever, except for any promissory note given pursuant to Subparagraph C. E. Concurrently with the transfer to the Partnership of the deceased Partner's interest, the surviving Partner shall execute and deliver to the personal representative of the deceased Partner, an instrument or instruments by which the surviving Partner assures that all the debts and obligations of the Partnership shall be timely paid and shall indemnify the deceased Partner's estate against all Partnership liabilities and any and all claims by the surviving Partner or by Partnership creditors. 12. Each Partner shall have the right to purchase from the Partnership any policy or policies on his/her life which are subject to this agreement upon withdrawing from the Partnership during his/her lifetime as provided above; or upon the termination of this Agreement during his/her lifetime, under any of the circumstances enumerated in below. This right of purchase shall be exercised as to each policy by paying to the Partnership, in cash, an amount equal to the cash surrender value as defined in the policy, adjusted to the date of transfer of ownership of the policy to the purchaser. The right of purchase shall lapse if it is not exercised within 90 days after occurrence of the event giving rise to the right of purchase. 13. This Agreement shall terminate upon: A. The written agreement of the Partnership and the Partners; B. The dissolution of the Partnership other than by the death of a Partner; or C. The death of both Owner and Investor simultaneously, or within a period of 90 days. 14. This Agreement shall be binding upon the Partners, their heirs, legal representatives, successors and assignees; and upon the Partnership, its successors and assigns. 15. The Partnership, the Partners, the personal representative of any deceased Partner, and all 5 other parties bound by this agreement shall promptly execute and deliver any and all papers or instruments necessary or desirable to carry out the provisions of this Agreement. 16. Any notice provided for under this Agreement shall be deemed duly given if delivered or mailed by certified or registered mail to the party entitled to receive such notice at the address of the office of the Partnership. 17. Notwithstanding the foregoing, and anything herein to the contrary notwithstanding, any dispute under this agreement shall be required to be resolved by binding arbitration of the parties hereto. If the parties cannot agree on an arbitrator, each party shall select one arbitrator and both arbitrators shall then select a third. The third arbitrator so selected shall arbitrate said dispute. The arbitration shall be governed by the rules of the American Arbitration Association then in force and effect. 18. This Agreement shall be construed according to the law of the State of Pennsylvania. WITNESS our signatures as of the day and date first above stated. Marshall Kessler Webb S. Hersperger, Jr. Date Date 6 i . a CERTIFICATE OF SERVICE The undersigned hereby certifies that on this date, a true and correct copy of the foregoing document was served via first-class mail upon the following: Marshall and Jennifer Kessler 2065 Ritner Highway Carlisle, PA 17015 Kessler's Auto Glass, LLC Ritner Highway Carlisle, PA 17015 li&, t?eOO..tOAj Alan R. Boynton, Jr. December 1, 2010 FILED-DFg iCE OF THE RROT11 "10 T ° ?:`, 2010 DEC 28 PM 1*?' UMBERL AND C 0'. RE M,'y I N Douglas C. Lovelace, Jr., Esquire Attorney Identification Number: 83889 36 Donegal Drive Carlisle, PA 17013 (717) 385-1866 WEBB S. HERSPERGER, M.D. : IN THE COURT OF COMMON PLEAS Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V. : No. 2010-3863 KESSLER'S AUTO GLASS, LLC MARSHALL KESSLER AND JENNIFER : CIVIL ACTION KESSLER, jointly and individually Defendants PRAECIPE TO ENTER APPEARANCE To The Prothonotary: Kindly enter my appearance as attorney for the Defendants in the above captioned matter. Date: December 28, 2010 zr'o?w K? 4ee DOUGLAS C. LOVELACE, JR., Esquire Attorney for Defendants ??'??t??lTl ',.Ir •• ?t.pp y d ? WEBB S. HERSPERGER, M.D. : IN THE COURT OF COMMON PLEAS Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V. : No. 2010-3863 KESSLER'S AUTO GLASS, LLC, MARSHALL KESSLER AND JENNIFER : CIVIL ACTION KESSLER, jointly and individually Defendants NOTICE TO PLEAD To: Webb S. Hersperger, M.D., through his attorney, Alan R. Boynton, Esquire, McNees Walace & Nurick, LLC, 100 Pine Street, P.O. Box 1166, Harrisburg, PA 17108-1166. You are hereby notified to plead to the within New Matter, within twenty days from service hereof, or a default judgment may be entered against you Date: December 28, 2010 Very respectfully, r DOU LAS C. LQACE, JR., Esquire Attorney Identification Number: 83889 36 Donegal Drive Carlisle, PA 17013 (717) 385-1866 Attorney for Defendants Douglas C. Lovelace, Jr., Esquire Attorney Identification Number: 83889 36 Donegal Drive Carlisle, PA 17013 (717) 385-1866 WEBB S. HERSPERGER, M.D. Plaintiff V. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA : No. 2010-3863 KESSLER'S AUTO GLASS, LLC, MARSHALL KESSLER AND JENNIFER : CIVIL ACTION KESSLER, jointly and individually Defendants DEFENDANTS' ANSWER WITH NEW MATTER TO PLAINTIFF'S COMPLAINT AND NOW, December 28, 2010, Defendants, by their attorney, Douglas C. Lovelace, Jr., files this Answer With new Matter to Plaintiff's Complaint and avers as follows: ANSWER 1. Admitted. 2. Admitted. A. PARTIES 3. Admitted. 4. Admitted and denied in part. Defendants Kessler's Auto Glass and Marshall Kessler admit that Marshall Kessler and Jennifer Kessler are adult individuals; reside at 2056 Ritner Highway, Carlisle, Cumberland County, Pennsylvania; and are husband and wife. Defendants Kessler's Auto Glass and Marshall Kessler and Jennifer Kessler deny she is a party to this action. B. FACTUAL BASIS 5. Denied as stated. Defendants aver that Plaintiff specifically agreed to provide Marshall and Jennifer Kessler financial backing to enable them to establish an automotive related business. By way of further answer, Plaintiff and Defendants agreed that Plaintiff would have no role in running the business. 6. Admitted. 7. Denied. Defendants did not submit a business plan to Murata Business. 8. Denied. Plaintiff and Marshall Kessler entered into a business agreement drafted by Plaintiff. Upon information and belief, Defendants aver that different documents exist that purport to evidence the business agreement entered into by Defendants and Plaintiff, none of which was executed on December 21, 2009. By way of further answer, Defendants aver that they did not agree to Plaintiff owning 40% of the proposed company, but that in return for Plaintiffs financial support of the proposed company, Defendants agreed that Plaintiff would be entitled to 40% of the company's profits, to be determined after Defendant Marshall Kessler's salary had been paid. 9. Denied. The document presented as Exhibit "A" to Plaintiff's Complaint speaks for itself. By way of further answer, upon information and belief, Defendants aver that the document presented as Exhibit "A" to Plaintiffs Complaint is not a true and correct copy of the agreement Plaintiff and Defendants entered into; but rather, appears to be a forgery. 2 10. Denied as stated. Defendants began operating their company, Kessler Auto Glass, LLC, on or about January 18, 2010. 11. Admitted. 12. Admitted. 13. Admitted. 14. Admitted. 15. Admitted in part and denied in part. Defendant Marshall Kessler admits to having created a limited liability company named Kessler's Auto Glass, LLC. Defendants specifically deny that formation of the said company was contrary to the agreement Defendants had with Plaintiff. Defendants aver that at all relevant times Plaintiff was aware that Marshall Kessler planned to form his own company and that Plaintiffs role was that of an investor, whose only interest in the company was entitlement to 40% of the company's profits, after all expenses, to include Marshall Kessler's salary, were paid. Defendants also aver that Plaintiff was fully aware of the formation of Kessler's Auto Glass, LLC and did not object to its formation until April 6, 2010, after Plaintiff conversed with a D.J. Willard who advised Plaintiff that in the business agreement Plaintiff had with Defendants, Plaintiff must have the controlling interest. Immediately thereafter, Plaintiff insisted on modifications of Kessler's Auto Glass, LLC's operating agreement. Defendants deny Plaintiffs averment as to Exhibit "B" to Plaintiffs Complaint, as it is a document that speaks for itself. 16. Denied. Plaintiff, by his own admission, was aware of Kessler's Auto Glass, LLC's operating agreement well in advance of May 2010. By way of further answer, Defendant Marshall Kessler informed Plaintiff in late December 2009 that Defendant planned to organize Kessler's Auto Glass as a limited liability company, and in late January 2010 Defendant Marshall 3 Kessler informed Plaintiff that he had so organized the company. Plaintiff did not object to the organization of Kessler's Auto Glass as a limited liability company until after Plaintiff received advice from a friend, D.J. Willard, on or about April 6, 2010, recommending that Plaintiff secure a controlling interest in the company. Soon thereafter Plaintiff attempted to have the company's operating agreement modified to give Plaintiff a larger interest in the company. By way of further answer, Defendants also deny the remainder of Plaintiff's multiple averments in this paragraph, due to Plaintiff's failure to identify the proposed documents, except for an alleged "Buy-Sell Agreement," that Plaintiff alleges Defendant Marshall Kessler presented to Plaintiff. By way of further answer, Defendants deny that Exhibit "C" of Plaintiffs Complaint is a true and correct copy of a "Buy-Sell Agreement" Defendants presented to Plaintiff. Exhibit "C" of Plaintiffs Complaint is a document that speaks for itself. By way of further answer, upon information and belief, Defendants aver that Exhibit "C" of Plaintiffs Complaint is a copy of a proposed document that contains revisions directed by the Plaintiff. 17. Denied as stated. The document presented as Exhibit "C" of Plaintiffs Complaint speaks for itself and Defendants specifically deny and object to Plaintiffs incorrect characterization of the document. By way of further answer, the first paragraph of Exhibit "C" of Plaintiffs Complaint states Kessler's Auto Glass, LLC is owned by Marshall Kessler and Plaintiff is an "Investor" in the company. Throughout the remainder of the incoherent draft document, "owner," "investor," 'partnership" and "partner" are used in confusing and difficult to reconcile contexts. 18. Admitted. 19. Denied as stated. Marshall and Jennifer Kessler have control of business and financial records of Kessler's Auto Glass, LLC. 4 20. Denied as stated. Defendants admit that Defendant Marshall Kessler's initial agreement with Plaintiff set Marshall Kessler's salary, while the business was being initiated, at $2,500.00 per month. Defendants aver that at a meeting held on April 15, 2010, attended by Defendants, Plaintiff, and their counsel, Plaintiff agreed to increase Marshall Kessler's salary to $44,500 per year. 21. Denied. At a meeting held on April 15, 2010, attended by Defendants, Plaintiff, and their counsel, Plaintiff agreed to increase Marshall Kessler's salary to $44,500 per year. 22. Denied. Marshall Kessler has not drawn nor does he intend to draw profits from Kessler's Auto Glass, LLC, without providing Plaintiff 40% of such profits, and Defendants demand strict proof to the contrary at trial. 23. Denied. Marshall and Jennifer Kessler continued to discuss matters with Plaintiff up until the time Plaintiff unilaterally decided to initiate formal litigation, notwithstanding Defendants' warning that the expense of litigation could easily force the company into bankruptcy. 24. Denied. Marshall Kessler did not enter into a representation agreement with counsel until after Plaintiff initiated the present litigation. COUNTI BREACH OF CONTRACT 25. Defendants incorporate by reference their responses contained in paragraphs 1 through 24, as though set forth herein at length. 26. Denied. Plaintiff's averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. If and to the extent Plaintiffs averment is determined not to be a conclusion of law, Defendants aver that the Business 5 Agreement does not accurately state the agreement into which Defendant Marshall Kessler and Plaintiff entered. By way of further answer, Plaintiff and Defendants agreed that Plaintiff would provide financial support for the formation of Kessler's Auto Glass, LLC in return for the right to receive 40% of the company's profits, to be determined after Defendant Marshall Kessler's salary and other business expenses had been paid. By way of further answer, Defendants aver that Defendants and Plaintiff jointly understood and agreed that Plaintiffs interest in Kessler's Auto Glass, LLC was and is limited to payment of 40% of the company's profits, if and when the company earned profits. By way of further answer, Defendants aver that Plaintiff began taking actions to alter the aforementioned agreements after Plaintiff solicited and received advice from a friend, D.J. Willard, on or about April 6, 2010, recommending that Plaintiff secure a controlling interest in the company 27. Denied. Plaintiff's averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. If and to the extent Plaintiff's averment is determined not to be a conclusion of law, Defendants aver that the Business Agreement does not accurately state the agreement into which Defendant Marshall Kessler and Plaintiff entered. By way of further answer, Plaintiff and Defendant Marshall Kessler agreed that Plaintiff would provide financial support for the formation of Kessler's Auto Glass, LLC in return for the right to receive 40% of the company's profits, to be determined after Defendant Marshall Kessler's salary and other business expenses had been paid. By way of further answer, Defendant avers that Defendant and Plaintiff jointly understood and agreed that Plaintiffs interest in Kessler's Auto Glass, LLC was, and is, limited to payment of 40% of the company's profits, if and when the company earned profits. By way of further answer, Defendants aver that Plaintiff began taking actions to alter the aforementioned agreement after Plaintiff solicited and 6 received advice from a friend, D.J. Willard, on or about April 6, 2010, recommending that Plaintiff secure a controlling interest in the company. 28. Denied in total and in all subparts. Plaintiff's averments are incorrect conclusions of law to which no response is required under the Pennsylvania Rules of Civil Procedure. If and to the extent Plaintiffs averments are determined not to be conclusions of law, Defendants incorporate by reference their responses contained in paragraphs 1 through 27, as though stated at length herein. 29. Denied. Plaintiff's averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. If and to the extent Plaintiffs averment is determined not to be a conclusion of law, Defendants specifically deny that Plaintiff has suffered any damages, including but not limited to, lost profits, business expenses, or any additional cost. By way of further answer, Defendants aver that Plaintiff was fully aware of the risk involved in investing in a new company when he agreed to invest in Kessler's Auto Glass, LLC, but now attempts to claim damages because the company has not yet achieved profitable status. WHEREFORE, Defendant respectfully requests that this Honorable Court dismiss Plaintiffs Complaint with prejudice, assess all costs and attorney fees against Plaintiff, and provide Defendant such other relief as the Court deems just and appropriate. COUNT II PROMISSORY ESTOPPEL 30. Defendants incorporate by reference their responses contained in paragraphs 1 through 29, as though set forth herein at length. 31. Admitted. 7 32. Denied. Plaintiff's averment is a conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. 33. Denied. Plaintiff s averment is a conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. 34. Denied. Plaintiff's averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. If and to the extent Plaintiff's averment is determined not to be a conclusion of law, Defendants specifically deny that they and Plaintiff entered into any business agreement beyond agreeing that Plaintiff is entitled to distribution of 40% of Kessler's Auto Glass, LLC's profits, if and when the company becomes profitable. 35. Denied. Plaintiff's averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. If and to the extent Plaintiffs averment is determined not to be a conclusion of law, Defendants specifically deny that they and Plaintiff entered into any business agreement beyond agreeing that Plaintiff is entitled to distribution of 40% of Kessler's Auto Glass, LLC's profits, if and when the company becomes profitable. 36. Denied. Plaintiff's averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. If and to the extent Plaintiffs averment is determined not to be a conclusion of law, Defendants specifically deny that they and Plaintiff entered into any business agreement beyond agreeing that Plaintiff is entitled to distribution of 40% of Kessler's Auto Glass, LLC's profits, if and when the company would become profitable. 8 37. Denied. Plaintiff's averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. If and to the extent Plaintiffs averment is determined not to be a conclusion of law, Defendants specifically deny that they and Plaintiff entered into any business agreement beyond agreeing that Plaintiff is entitled to distribution of 40% of Kessler's Auto Glass, LLC's profits, if and when the company would become profitable. WHEREFORE, Defendant respectfully requests that this Honorable Court dismiss Plaintiffs Complaint with prejudice, assess all costs and attorney fees against Plaintiff, and provide Defendant such other relief as the Court deems just and appropriate. COUNT III UNJUST ENRICHMENT 38. Defendants incorporate by reference their responses contained in paragraphs 1 through 37, as though set forth herein at length. 39. Admitted. 40. Denied. Plaintiffs averment is a conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. 41. Admitted. 42. Denied. Defendants would have secured alternative financing for their promising business. By way of further answer, Plaintiff actively sought to invest in Kessler's Auto Glass, LLC, in the hope of increasing his wealth through a desirable return on his investment, once Kessler's Auto Glass, LLC became profitable. 43. Denied. Plaintiff s averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. If and to the extent Plaintiffs 9 averment is determined not to be a conclusion of law, Defendants specifically deny that retention of the funds Plaintiff provided without compensating Plaintiff for the value thereof would be unjust. By way of further answer, Defendants aver that Plaintiff actively sought to invest in Kessler's Auto Glass, LLC in the hope of increasing his wealth through a desirable return on his investment, once Kessler's Auto Glass, LLC became profitable. By way of further answer, Defendants aver that at all relevant times Plaintiff was and remains fully aware of the risk of investing in a new business, but now seeks to escape that risk. By way of further answer, Defendants aver that the value of Plaintiffs investment in Kessler's Auto Glass, LLC remains, notwithstanding that the company has not yet achieved a profitable state. WHEREFORE, Defendant respectfully requests that this Honorable Court dismiss Plaintiff's Complaint with prejudice, assess all costs and attorney fees against Plaintiff, and provide Defendant such other relief as the Court deems just and appropriate. COUNT IV FRAUDULENT MISREPRESENTATION 44. Defendants incorporate by reference their responses contained in paragraphs 1 through 43, as though set forth herein at length. 45. Denied. Plaintiffs averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. If and to the extent Plaintiffs averment is determined not to be a conclusion of law, Defendants specifically deny that Plaintiff was to be a 40% owner of Kessler's Auto Glass, LLC, and that Marshall Kessler was to be paid $2,500.00 per month and incorporate by reference their responses contained in paragraphs 1 through 43, as though set forth herein at length. 10 46. Denied. Plaintiffs averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. If and to the extent Plaintiffs averment is determined not to be a conclusion of law, Defendants aver that in all discussions with Plaintiff leading to formation of the agreement by which Plaintiff would provide financial support for Kessler's Auto Glass, LLC, Plaintiff and Defendant Marshall Kessler understood and agreed that the only interest Plaintiff would have in Kessler's Auto Glass, LLC would be the right to receive 40% of the company's profits, if and when the company became profitable. By way of further answer, Defendants incorporate by reference their responses contained in paragraphs 1 through 45, as though set forth herein at length. 47. Denied. Plaintiff's averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. If and to the extent Plaintiffs averment is determined not to be a conclusion of law, Defendants incorporate by reference their responses contained in paragraphs 1 through 46, as though set forth herein at length. By way of further answer, Plaintiff knew and understood at all relevant times that his role was that of an investor entitled to 40% of the company's profits, if and when Kessler's Auto Glass, LLC realized profits, and not that of an owner of the company. By way of further answer, Plaintiff acknowledged on numerous occasions that the company would belong to the Marshall Kessler and began to insist on an ownership interest for Plaintiff only after being advised on or about April 6, 2010, by D.J. Willard that in the business agreement Plaintiff had with Defendants, Plaintiff must have the controlling interest. At that point, Plaintiff sought to alter the relationship he had with Defendants. 48. Denied. Plaintiff's averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. If and to the extent Plaintiffs 11 averment is determined not to be a conclusion of law, Defendants incorporate by reference their responses contained in paragraphs 1 through 43, as though set forth herein at length. By way of further answer, Defendants aver that Plaintiff actively sought to invest in Kessler's Auto Glass, LLC, in the hope of increasing his wealth through a desirable return on his investment, once Kessler's Auto Glass, LLC became profitable. By way of further answer, Defendants aver that at all relevant times Plaintiff was and remains fully aware of the risk of investing in a new business, but now seeks to escape that risk. 49. Denied. Defendants aver that Plaintiff actively sought to invest in Kessler's Auto Glass, LLC, in the hope of increasing his wealth through a desirable return on investment, with full knowledge of the risk involved, but now seeks to escape that risk. 50. Denied. Plaintiff's averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. By way of further answer, and to the extent that Plaintiff's averment is not considered a conclusion of law, Defendants specifically deny that they willfully schemed to cause, and did cause, the wrongful conveyance of Plaintiffs funds to Defendants with no intention of providing the interest in the company's profits promised by Defendant Marshall Kessler. By way of further answer, Defendants incorporate by reference their responses contained in paragraphs 1 through 49 as though set forth herein at length. By way of further answer, Plaintiff provided financial support to Kessler's Auto Glass, LLC, with the knowledge that all he was entitled to was a 40% share in the business' profits in return for his financial support, that there was risk that such profits would not eventuate for some time, if at all, and that he had no other interest in the Kessler's Auto Glass, LLC. 51. Denied. Plaintiff's outrageous averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. By way of further 12 answer, and to the extent that Plaintiffs averment is not considered a conclusion of law, Defendants specifically deny any fraudulent conduct. By way of further answer, Defendants incorporate by reference their responses contained in paragraphs 1 through 50 as though set forth herein at length. By way of further answer, Plaintiff provided financial support to Kessler's Auto Glass, LLC, with the knowledge that all he was entitled to was a 40% share in the business' profits in return for his financial support, that there was risk that such profits would not eventuate for some time, if at all, and that he had no other interest in Kessler's Auto Glass, LLC. 52. Denied. Plaintiff's averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. By way of further answer, and to the extent that Plaintiff's averment is not considered a conclusion of law, Defendants aver Plaintiff has not suffered any harm beyond that which Plaintiff knowingly risked when he provided financial support to Kessler's Auto Glass, LLC \. By way of further answer, Defendants aver that Kessler's Auto Glass, LLC is still progressing toward profitability and when it is able will distribute 40% of its profits to Plaintiff. WHEREFORE, Defendant respectfully requests that this Honorable Court dismiss Plaintiff's Complaint with prejudice, assess all costs and attorney fees against Plaintiff, and provide Defendant such other relief as the Court deems just and appropriate. COUNT V BREACH OF FIDUCIARY DUTY 53. Defendants incorporate by reference their responses contained in paragraphs 1 through 52, as though set forth herein at length. 54. Denied. Plaintiff's averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. If and to the extent that Plaintiffs 13 averment is not considered a conclusion of law, Defendants aver that Plaintiffs interest in Kessler's Auto Glass, LLC is the right to receive 40% of the company's profits if and when they eventuate. 55. Denied. Plaintiff's averment is a conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. 56. Denied. Plaintiff s averment is a conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. 57. Plaintiff's averment is a conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. 58. Denied. Defendants have not received a formal request from Plaintiff to inspect the company's records and stand ready to permit such inspection should Plaintiff so request. 59. Denied. Kessler's Auto Glass, LLC, as a new company has yet to realize profits that can be distributed. 60. Denied. Marshall Kessler, as well as Jennifer Kessler, communicated repeatedly with Plaintiff, until Plaintiff truncated such communication by initiating the present litigation. By way of further answer, Plaintiff agreed that he would have no part in the operation or management of Kessler's Auto Glass, LLC. By way of further answer, upon information and belief, Defendants aver that Plaintiff sought operation and management authority over Kessler's Auto Glass, LLC subsequent to, and as a result of, his discussion with D.J. Willard, on or about April 6, 2010, who recommended to Plaintiff that he secure a controlling interest in the company. 61. Denied. Defendants deny Plaintiffs averment that Marshall Kessler improperly diverted or used Kessler's Auto Glass, LLC assets for personal expenses, and demand strict proof of Plaintiffs averment at trial, if relevant. 14 62. Denied. Plaintiff's averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. In the event and to the extent Plaintiffs averment is determined not to be a conclusion of law, Defendants aver that Marshall Kessler has consistently acted in the best interest of Kessler's Auto Glass, LLC to make it a profitable company as soon as possible. By way of further answer, Defendants deny that Plaintiff is a minority shareholder in Defendants' company, but rather provided financial support for the company in the hope of receiving a profitable return on his investment. 63. Denied. Plaintiff's averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. In the event and to the extent Plaintiffs averment is determined not to be a conclusion of law, Defendants specifically deny that Marshall Kessler breached a fiduciary duty owed to Plaintiff and demand strict proof to the contrary at trial, if relevant. 64. Denied. Plaintiff's averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. In the event and to the extent Plaintiff's averment is determined not to be a conclusion of law, Defendants incorporate by reference their responses contained in paragraphs 1 through 63 as though set forth herein at length. By way of further answer, Defendants aver that Plaintiff provided financial support to Kessler's Auto Glass, LLC, with the knowledge that all he was entitled to was a 40% share in the business' profits in return for his financial support, that there was risk that such profits would not eventuate for some time, if at all, and that he had no other interest in Kessler's Auto Glass, LLC. By way of further answer, Defendants aver that Kessler's Auto Glass, LLC continues to progress toward a profitable state and that Plaintiffs initiation of the instant litigation is premature, at best. 15 WHEREFORE, Defendant respectfully requests that this Honorable Court dismiss Plaintiff's Complaint with prejudice, assess all costs and attorney fees against Plaintiff, and provide Defendant such other relief as the Court deems just and appropriate. COUNT VI MISAPPROPRIATION OF CORPORATE ASSETS BY MARSHALL KESSLER 65. Defendants incorporate by reference their responses contained in paragraphs 1 through 64, as though set forth herein at length. 66. Denied. Marshall Kessler has used Kessler's Auto Glass, LLC funds in accordance with the company operating agreement and Defendants' agreement with Plaintiff, and strict proof to the contrary is demanded at trial, if relevant. 67. Denied. Plaintiff's averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. In the event and to the extent Plaintiffs averment is not considered a conclusion of law, Defendants specifically deny that Marshall Kessler has breached his fiduciary duty to Kessler's Auto Glass, LLC and incorporate by reference their responses contained in paragraphs 1 through 66, as though set forth herein at length. 68. Denied. Plaintiff's averment is an incorrect conclusion of law to which no response is required under the Pennsylvania Rules of Civil Procedure. In the event and to the extent Plaintiffs averment is not considered a conclusion of law, Defendants specifically deny that Marshall Kessler has been unjustly enriched by diverting Kessler's Auto Glass, LLC assets for personal use and demand strict proof to the contrary at trial, if relevant. By way of further answer, Defendants incorporate by reference their responses contained in paragraphs 1 through 67, as though set forth herein at length. 16 NEW MATTER 69. Defendants incorporate by reference their responses contained in paragraphs 1 through 68, as though set forth herein at length. 70. With respect to his business relationship with Defendants, Plaintiff referred to himself as both a lender and investor. 71. After agreeing with Defendants that he would receive 40% of Kessler's Auto Glass, LLC's profits, Plaintiff demanded to receive a larger percentages of Kessler's Auto Glass, LLC's profits in return for his investment. 72. Plaintiff requested that he be repaid the amount of his financial support to Kessler's Auto Glass, LLC, with interest, and agreed that when he was repaid he would no longer have an interest in Kessler's Auto Glass, LLC. 73. At a meeting held on April 15, 2010, attended by Defendants, Plaintiff, and their counsel, Plaintiff agreed to increase Marshall Kessler's salary to $44,500 per year. 74. Plaintiff was and remains fully aware that after the aforementioned April 15, 2010 meeting, Marshall Kessler's salary was $44,500 per year, and Plaintiff voiced no objection to that salary until he commenced the present litigation. 75. On or about April 6, 2010, Plaintiff consulted D.J. Willard concerning Plaintiff's business relationship with Defendants. During the course of such consultation, D.J. Willard advised Plaintiff that Plaintiff must have the controlling interest in Kessler's Auto Glass, LLC. 76. On or about early April 2010, Plaintiff advised Defendant Marshall Kessler and counsel to draft an amendment to the Kessler's Auto Glass, LLC operating agreement naming Plaintiff as a 49% owner. 17 77. Subsequent to his April 6, 2010 consultation with D.J. Willard, Plaintiff continually sought to alter his business relationship with Defendant Marshall Kessler in order to gain greater control of Kessler's Auto Glass, LLC. 78. Subsequent to his April 6, 2010 consultation with D.J. Willard, Plaintiff continually harangued, harassed and threatened Defendants, in an effort to gain greater control over Kessler's Auto Glass, LLC. 79. Plaintiff initially agreed to provide financial support to Kessler's Auto Glass, LLC with the expectation of receiving 40% of the company's profits, if and when the company became profitable. 80. Upon providing financial support to Kessler's Auto Glass, LLC, Plaintiff was aware of the risk that Kessler's Auto Glass, LLC may not become profitable for some time, if ever. 81. Upon providing financial support to Kessler's Auto Glass, LLC, Plaintiff did not request to play any role in the operation or management of Kessler's Auto Glass, LLC. On the contrary, Plaintiff knew and agreed that Defendant Marshall Kessler would operate and manage Kessler's Auto Glass, LLC. 82. Becoming impatient with the pace at which Kessler's Auto Glass, LLC is progressing toward profitability, Plaintiff seeks to alter his agreement with Defendant Marshall Kessler, in order to gain operation and management authority over Kessler's Auto Glass, LLC. 83. Plaintiff has offered to formalize his status with Kessler's Auto Glass, LLC as that of a secured creditor. 84. Plaintiff's Complaint fails to state a cause of action, upon which relief may be granted. 18 85. Plaintiffs initiation of this litigation is vexatious and designed to coerce Defendant Marshall Kessler into either giving Plaintiff a measure of control over Kessler's Auto Glass, LLC or repaying Plaintiff his investment in the company with interest, conditions that were not part of Plaintiffs and Defendant Marshall Kessler's agreement. 86. Plaintiff s claim is barred or limited by the doctrine of unclean hands. 87. Plaintiff's claim is barred or limited by the doctrine of laches. 88. Plaintiff's claim is barred or limited by the doctrine of estoppel. 89. Plaintiff's claim is barred or limited by the doctrine of release. 90. Plaintiffs claim is barred or limited by the doctrine of waiver. 91. Plaintiff's claim is barred or limited by the doctrine of duress. 92. Plaintiffs claim is barred or limited by the doctrine of justification. Respectfully submitted by: Douglas C. Lovelace, Jr., Esquire Attorney ID No. 83889 36 Donegal Drive Carlisle, PA 17013 (717) 385-1866 Attorney for Defendants Dated: December 28, 2010 19 VERIFICATION The undersigned does hereby verify, subject to the penalties of 18 Pa. C.S.A. § 4904, relating to unworn falsification to authorities, that the facts and circumstances set forth in the foregoing Answer with New Matter to Plaintiffs Complaint are true and correct to the best of his knowledge, information, and belief. e2z '00VO/i Date: December 28, 2010 Marshall Kessler Defendant CERTIFICATE OF SERVICE I, Douglas C. Lovelace, Jr., attorney for the Defendant hereby certify that on December 28, 2010, I served a true and correct copy of the foregoing Answer with New Matter to Plaintiffs Complaint upon the below named individual by depositing the same in the United States mail, first class, postage prepaid, at Carlisle, Cumberland County, Pennsylvania. SERVED UPON: Alan R. Boynton, Esquire McNees Wallace & Nurick, LLC 100 Pine Street P.O. Box 1166 Harrisburg, PA 17108-1166 Attorney for Plaintiff e?Y Douglas C. Lovelace, Jr., Esquire Attorney Identification Number: 83889 36 Donegal Drive Carlisle, PA 17013 (717) 385-1866 WEBB S. HERSPERGER, M.D., IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. : No. 2010-3863 KESSLER'S AUTO GLASS, LLC, MARSHALL KESSLER and JENNIFER CIVIL ACTION C) KESSLER jointly and individually N , Defendants r 1 $r ? rn r_ -0rn ci ?:o pO REPLY TO NEW MATTER , - ?._ --, o -n z F3 AND NOW COMES Webb S. Hersperger, M.D., by his attorneys, McN s -- C) rn _4 .? Wallace & Nurick, LLC, who replies to the New Matter of Defendants as follows. N W s ;:0 -'• 69. Plaintiff incorporates by reference Paragraphs 1 through 68 of the Complaint as if set forth in full. 70. Denied as stated. As set forth in the Business Agreement attached as Exhibit "A" to the Complaint, Plaintiff is a 40% owner of the business. Plaintiff has invested substantial sums in the business and is, therefore, an investor. Plaintiff has offered to convert his ownership interest to that of a lender.. Such offer was not accepted by Defendants. 71. Denied as stated. As set forth in the Business Agreement attached as Exhibit "A" to the Complaint, Plaintiff was to be a 40% owner of the business in return for his payment of the start-up costs of the business, estimated at approximately $25,000.00 - $30,000.00. After start-up costs paid by Plaintiff exceeded twice that amount, Plaintiff sought an increase in his ownership interest in the business. - 1 - 72. Denied as stated. Upon a dispute arising, and Defendant Marshall Kessler stating that he wanted to be sole owner of the business, and in response to Defendant Marshall Kessler's proposal to buy-out Plaintiffs ownership interest, Plaintiff did offer to relinquish his ownership interest upon agreement to repayment of his investment, with interest. No response to said proposal was received and the proposal is now withdrawn. 73. Denied. By way of further response, during discussions about an increase in Plaintiffs ownership interest, Plaintiff did agree to an increase of Marshall Kessler's salary to $42,500.00 per year. 74. Denied. Plaintiff understood that, between the formation of the business and April 15, 2010, Marshall Kessler was to be paid at a salary of $2,500.00 per week, and thereafter at a salary of $42,500.00 per year. 75. Denied as stated. Because Plaintiff had not previously been an owner in a small business of this nature, Plaintiff did have a discussion with D. Willard, a local businessman and entrepreneur, relating to Plaintiffs arrangement with Defendants. Based on the proportional degrees of investment and risk, Mr. Willard expressed concern over the agreed upon percentages of ownership. 76. Denied as stated. Plaintiff did convey to Defendant Marshall Kessler the concerns expressed by Mr. Willard. Counsel retained by Mr. Kessler was asked to prepare documents increasing Plaintiffs ownership interest, but preserving Mr. Kessler's majority interest. -2- 77. Denied. Plaintiff has not continually sought to alter his business relationship with Defendant Marshall Kessler. Plaintiff admits that he has undertaken steps to protect his rights as a minority owner of the business, which Defendants have generally ignored. 78. Denied. Plaintiff has not harangued, harassed or threatened Defendants. Plaintiff admits that he has undertaken steps to protect his rights as a minority owner of the business, which Defendants have generally ignored. 79. Denied. Plaintiff initially, and finally, agreed to be a 40% owner of the business. Such ownership interest does include the right to 40% of the profits of the company. 80. Admitted that, upon agreeing to be a 40% owner of the business, Plaintiff understood that the company might not become profitable. 81. Denied as stated. Upon agreeing to be a 40% owner of the business, Plaintiff did not request any role in the operation or management of the business and understood that Defendant Marshall Kessler would be responsible for the day to day operation and management of the company. 82. Denied. Plaintiff has not been impatient with the pace at which KAG is progressing toward profitability. By way of further response, Plaintiffs concern has been with the protection of his 40% ownership interest. Plaintiff has no interest in the day to day operation and management of KAG. -3- 83. Denied. Plaintiffs status with KAG is as a 40% owner. Plaintiff, to resolve a dispute with Defendants, has offered to convert his ownership interest to that of a secured creditor. 84. Denied. The Complaint sets forth causes of action upon which relief may be granted. 85. Denied. This action was initiated because of Defendants' conduct and breaches of agreements and duties to Plaintiff. 86. Denied. Plaintiffs claim is not barred or limited by the doctrine of unclean hands. 87. Denied. Plaintiffs claim is not barred or limited by the doctrine of laches. 88. Denied. Plaintiffs claim is not barred or limited by the doctrine of estoppel. 89. Denied. Plaintiffs claim is not barred or limited by the doctrine of release. 90. Denied. Plaintiffs claim is not barred or limited by the doctrine of waiver. 91. Denied. Plaintiffs claim is not barred or limited by the doctrine of duress. -4- 92. Denied. Plaintiffs claim is not barred or limited by the doctrine of justification. McNEES WALLACE & NURICK LLC Y Alan R. Boynton, r. Attorney I.D. No. 39850 100 Pine Street P. O. Box 1166 Harrisburg, PA 17108-1166 (717) 232-5000 Attorneys for Plaintiff Dated: January 14, 2011 -5- VERIFICATION Subject to the penalties of 18 Pa. C.S. §4904, relating to unswom falsification to authorities, I hereby certify that I have read the foregoing document and that the facts set forth therein are true and correct to the best of my knowledge, information and belief. q?k"--?A r t-- Webb S. Hers , M. D. Dated: January IA 2011 -5- CERTIFICATE OF SERVICE The undersigned hereby certifies that on this date, a true and correct copy of the foregoing document was served via first-class mail upon the following: Douglas C. Lovelace, Jr., Esq. 36 Donegal Drive Carlisle, PA 17013 V4VI Alan R. Boynton, January 14, 2011 David 1). Bildt 'Prothonotary Office of the Trothonotary Cum6erfand County, Pennsylvania ?�yrkS. Solionage, ES'Q Solicitor —3gic,3 CIVIL TERM ORDER OF TERMINATION OF COURT CASES AND NOW THIS 28TH DAY OF OCTOBER, 2014, AFTER MAILING NOTICE OF INTENTION TO PROCEED AND RECEIVING NO RESPONSE —THE ABOVE CASE IS HEREBY TERMINATED WITH PREJUDICE IN ACCORDANCE WITH PA R.C.P.230.2. BY THE COURT, DAVID D. BUELL PROTHONOTARY One Courthouse Square 0 Suite100 0 Car(isCe SPA 0 c1 Hone 717 240-6195 0 Ex, -_717 240-6573