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HomeMy WebLinkAbout01-2664 In the Court of Common Pleas of Cumberland County, Pennsylvania Civil Division Michael A. Shaffer, } No. ~ Plaintiff, } } v. } } Judge Susan Graybill as an individual } and as Adminlstratrix of the } Estate of Dennis M. Graybill; } Minuteman Press } International, n New York eorpor-} ntion; nnd Robert Emmett } Defendants. } Jury Trial Demanded NOTICE TO DEFEND Notice You have been sued in cou~t. If you wish to defend against these claims, you must ta~e action within twenty (20) days aRer this complaint and notice are served by entering an appearance personally or by an attorney and filing in writing with the Court your defenses or objections. You are warned that if you fall to do so the ease may proceed without you and a judgment may be entered against you by the court without further notice. A judgment may also be entered against you 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 Lawyer Referral Service Cumberland County Bar Association 2 Liberty Avenue Carlisle, PA 17013 (717) 249-3166 1-800-990-910g an office in Wayne, PA. He may be served in person at 489 Devon Park Drive, Suite 307, Wayne, PA 19087. 6. The court has jurisdiction over these proceedings because the Minuteman Press franchise sold to Plaintiffby Defendants Graybill is located in Cumberland County and the mount in controversy exceeds the minimum jurisdictional amounts of the court. 7. The court has venue over these proceedings because all or part of the cause of action arose in Cumberland County and Defendants Graybill maintained a place of business in Lemoyne, Cumberland County, PA, and reside in Cumberland County, PA. Facts Common to Ali Counts 8. On or about August, 2000, Defendants Graybill were operating a Minuteman Press franchise in Lemoyne under contract with Defendant MMPI. Defendants Graybill were desirous of selling the franchise to Plaintiffund did so on September 6, 2000. Plaintiffentered into various contracts with Defendants Graybill, Defendant MMPI in pursuance of the purchase of the franchise. Count ! 9. This count sounds in tort. 10. Throughout the relevant time frame alleged in Paragraph 9, all Defendants entered into a conspiracy with one another to unload a failing business on Plaintiffby agreeing to materially defraud Plaintiffby falsely inducing him to enter into a contract to purchase and to purchase the Minuteman Press franchise located in Lemoyne, PA. Defendant Emmett was the regional representative of Defendant MMPI and had authority speak for and to bind the corporation. I 1. Defendants Graybill were the owners of the franchise. Defendants Graybill made material misrepresentations as to the financial viability of the franchise and these were made to falsely induce Plaintiffto purchase the Minuteman Press franchise of Lemoyne as an ongoing and viable enterprise with sufficient income to pay expenses and support the store owner and two employees. 12. Defendants Graybill conspired with one another, MMPI and Emmett to represent the Lemoyne franchise as a viable entity that would make a profit and that Plaintiff would start seeing those profits within three months. Defendants Graybill materially misrepresented the financial viability of the Lemoyne franchise. Defendants MMPI and Emmett materially assisted Defendants Graybill to do so. Defendants MMPI and Emmett also made material misrepresentations to induce Plaintiffto purchase the franchise and materially assisted Defendants Graybill in unloading an unprofitable franchise on Plaintiff; these misrepresentations were made by Defendant Emmett, MMPI's regional representative. 13. The following misrepresentations were made by one or more ofthe Defendants: a. Defendants Graybill materially misrepresented the financial viability ofthe Lemoyne franchise by representing that monthly operating expenses were in the range of $7,000.00 when in fact monthly operating expenses were in the range of $12,000.00. Plaintiffexpressly obtained copies of the cheeks written for expenses by the franchise and refused to purchase the franchise because the operating expenses were too high at $12,000.00 per month. Defendant Emmett represented to Plaintiff in response that many of the checks were for personal expenditures and that the operating expenses for the franchise were only $7,000.00 per month. Defendants Graybill confirmed Emmett's misrepresentation. This was a very material factor to Plaintiffbecanse the franchise's monthly income was only in the $5,000.00 range. b. Defendant Emmett materially misrepresented the financial viability of the Lemoyne franchise by representing that Plaintiffneed earn only $2,000.00 per month over and above what the franchise was bringing in in order to make a profit when in fact Plaintiffneeded more than $7,000.00 more per month in gross sales just to break even. c. Defendants MMPI and Emmctt materially misrepresented to Plaintiffthe financial viability of the Lemoyne franchise by making the same representations as set forth in Paragraphs 13a and 13b. Said Defendants conspired with Defendants Graybill to make these misrepresentations. d. Defendants MMPI and Emmet~ materially misrepresented to Plaintiff'that he would not only be able to meet expenses within a very short period oftime but that he would also realize a gross profit of 30% of gross sales within that same time merely by following MMPI's marketing program, which was to make twenty new contacts per day. Plaintiffdid so but was unable to make a profit on the franchise. e. Defendants MMPI and Emmett materially misrepresented to Plaintiffthat the only reason why the Lemoyne franchise was not already making a profit was because Defendant Dennis M. Graybill, now deceased, was not able due to his poor health to make enough marketing calls to generate additional sales. 14. Plaintiffwas damaged by these misrepresentations in the loss of the amounts that he paid to Defendants Graybill to purchase the franchise, in the amounts that he paid Defendant MMPI for the transfer of the franchise and to attend its school for new owners, and in the loss of working capital and the amounts that had to be borrowed to operate the franchise from month to month. Consequential damages were suffered by Plaintiffin the amounts that he could not earn because he was devoting his full time to operation of the franchise instead of his former employment as well as amounts he owes to his landlord and Textron Financial Corporation from contracts that were necessitated by his pumhase ofthe franchise. Further consequential damages stemmed from the inevitable loss of credit reputation when he was unable to repay the money he borrowed to keep the franchise operating from month to month. Count il 15. On or about September 1, 2000, Plaintiff entered into a written contract with Defendant MMPI which was labeled as the Franchise Agreement. Immediately upon entering the Agreement, Plaintiff was sent to New York for an explanation of what to do to make the franchise viable. He was promised in writing all needed technical assistance and advice. This assistance and advice was based on the express corporate formula that ifthe franchisee did what MMPI told him to do, he would meet expenses and make a profit. Plaintiff was expressly told by MMPI that all he would have to do was manage the franchise, make twenty cold calls a day, leave all work to the employees, and, by doing so, he would make significant profits. These promises were made in order to induce Plaintiffto entcr into the franchise agreement and were again made in the training school in New York. These promises were made in the Franchise Agreement or were made in supplementation of the written agreement or were made in order to induce Plaintiffto enter into the written agreement. In other words, follow our program and you will realize a pretax profit ofone third of your gross sales. 16. These promises were breached by MMPI. At no time was the income from the franchise sufficient to even meet expenses and within six months of purchasing the franchise, Plaintiffwas forced to close his doors due to excessive expenses. 18. Damages that flow from these breaches of contract and false promises include the loss ofthe money that was paid to MMPI to transfer the franchise to Plaintiff and send him to training school in New York. Consequential damages include the loss of what was paid by Plaintiffto the franchise owners to purchase the franchise, the loss ofoperating capital, the waste of the assets of Plaintiff's franchise, and the various contractual payments needed to pay the landlord and the equipment lessor. Further direct damages resulted from the extreme mental anguish suffered by Plaintiffwhich were intentionally inflicted as the result of the torts alleged in this Complaint. These damages are in an amount in excess of the minimum jurisdictional limits of the court. Count III 19. Defendant MMPI would not transfer the franchise to Plaintiffwithout first receiving a financial application from the Plaintiffcalling for a disclosure of all assets.. After reviewing Plaintiff's financial statements, MMPI caused the sale of the franchise in Lemoyne to Plaintiff and transferred the franchise to Plaintiff and caused him to expend significant amounts for training and for anticipated losses from operation of the franchise within the first three months. 20. Having required Plaintiffto submit a financial application listing all assets of Plaintiff, Defendant MMPI at all times material to this Complaint, knew or should have known that Plaintiffhad insufficient income and assets to operate the franchise for even the three months at the end of which Plaintiffwas promised that he would be making profits. As the superior bargaining party, MMPI was under a duty to disclose to Plaintiff that he had insufficient income and assets with which to purchase the Lemoyne franchise. This negligence on the pan of MMPI caused Plaintiffto suffer not only monetary damages but also an entitlement to damages for extreme emotional distress in amounts in excess of the minimum jurisdictional limits of the court. I verify that the facts contained in the Complaint are tree and correct to the best of my knowledge, information and belief. I understand that any false statements are made subject to the penalties of 18 Pa.C.S.A. Sec. 4904 relating to unsworn falsification. ~Vl~ichael Shaffer 20.1. Plaintiffhas further been consequentially damaged by these defendants in an amount in excess of the minimum jurisdictional amount of the court for extreme mental anguish intentionally inflicted upon him as the result of the loss of his life savings. Count IV 22. Each of the torts complained about were committed with such deliberateness and willfulness and in such reckless disregard of the rights of Plaintiffso as to entitle him to punitive damages in an amount in excess of the minimum jurisdictional amounts of the court. Incorporation by Reference 23. Each Count hereof is incorporated in each other Count by reference. Each Paragraph hereof is incorporated in each other Paragraph by reference. Wherefore, Plaintiffprays that after trial hereof, he be awarded actual and consequential and punitive damages, each in an amount in excess of the minimum jurisdictional limits of the court against each defendant and against all defendants jointly and severally for their joint misconduct and for such other and further relief in law and in equity to which Plaintiffmay be justly entitled. Respectfully Submitted, Robert J. White Counsel for Plaintiff' PBN 32487 PO Box 3005 York, PA 17402 (717) 699-4534 FAX (717) 699-2895 Verification ~ In the Court o1' Common Pleas of Cumberland County, Pennsylvania . vs. ~o. ~/-~'~'f" ~'~'~/ Civil. 19. Prolhonolary 19_ Attorney for Plaintiff In the Court of Common Pleas of Cumberland County, Pennsylv:mia Civil Division Michael A. Shaffer J No. ~)j -. '~o~/ Ci'~'~ / /"~t.-/~ Plaintiff, } v. } Judge Susan A. Graybill, et al., Defendants. } Jury Trial Demanded NOTICE TO DEFEND Notice You have been sued in court. If you wish to defend against these claims, you must take action within twenty (20) days after this complaint and notice are served by entering an appearancc personally or by an attorney and filing in writing with the Court your defenses or objections. You are warned that if you fail to do so the ease may proceed without you and a jndgment ma), be entered against you by the court without further notice. A judgment may also be entered against you 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. York County Lawyer Referral Service 137 E. Market Street York, PA 17401 (717) 854-8755 AVISO Usted ha sido dornandado cn torte. Si usled quiere dclt. mlcrse en co/lira de estas demandas, usted debe romar aecion dentro de vicnte (20) dias despues ..itlc esta queja y aviso scan servidos. registrando una compamcencia personalmente o pot su abogad y Ilenando en esccrito en la cone su defensa u objectiones con [:l corte. Usted esta ad~ t. rlklo que si fallah de hacerlo, el casa puede seguir sin usted y un desicion pued ser regisl ~':ttlo en eontr.'t suya pot la corte sin ningun otra aviso. Ademas, la eorte pued deeidir :~ I'avor del demaadante y requiere que usted eumpia eon todas las provisiones de esta dem:mda. Usted puede perder dinero o sus propriedades u otros derechos important'e para uste¢l. USTED DEBE LLEVAR ESTE DOCUMENTO A .'q;. ' ABOGADO NO PUEDE PAGAR UNO VAYA O LLAME POR TELEFONO A LA ¢ }I"FICINA ESr'RITA ABA JO PARA AVERIGULAR DONDE USTED PUED CONSEQI qRE ASSIST.[NCIA LEGAL. York County Lawyer Referral Service 137 E. Market Street York, PA 17401 (717} 854-8755 In the Court of Common Pleas of Cumberland County, Pennsylvania Civil Division Michael A. Shnffer } No. 2001-2664 Civil Term Plaintiff, } } v. } } Susan Grnybill } et al., } Defendnnts } Jury Trial Demnnded Plaintiff's First Amended Complaint with Action for Declaratory Judgment Comes now Plaintiffand amends his Complaint with Action for Declaratory Judgment and states the following additional causes of action: Count VI 32. Plaintiff's Complaint is incorporated heroin by reference, the same as if fully set forth herein. 33. In the Disclosure Document of Minuteman Press International, Inc. which which was required by FTC rules and is dated August, 1999, the following disclosure is made on page 12 about an FTC action against Defendant MMPI and others: Federal Trade Commission. Plaintiff. v. Minuternnn Press Inte~ational. Inc.. Sneed¥ Sian-A-Arama. USA. Inc., Roy W. Titus and Jeffrey Haber. Dcfct~dant~ (CV 93-2496) Filed on June 4, 1993, in the United States District Court, Eastern District of New York. On December 18, 1998, an injunction was filed prohibiting the Defendant's excluding Haber from doing the following: A. Making, or assisting in the making of, expressly or by implication, orally or in writing, to any prospective franchisee any statement of past, present or future sales, income, or gross or net profits ofany existing or prospective franchisee or group of franchisees, unless at the time of making such representation the defendant possesses written material that provides a reasonable basis for the representation. B.Violating any provision of the Rule 16 C.F.R. Part 436 or the rule as it may later be amended and the disclosure requirements of the UFOC in effect at the time. C. Assessing or collecting a transfer/training fee from any franchisee who sells or assigns its franchise nnless the selling franchisee received a copy cfa disclosure statement indicating that such fee wet, Id be charged. D. Failing to monitor and investigate any complaints about compliance with the rule or the injunction. E. To cooperate with the Commission in the enforcement of this injunction. Section A of this disclosure relates to precisely the san~e marketing methods and misrepresentations that are set forth in Counts I through IV ofthe PlaintifFs Complaint, which are incorporated herein by reference. The disclosure omits material facts and is affirmatively misleading. 34. Defendant MMPI's misrepresentations, omissions, false statements, actions and inactions violate state blue sky laws, federal FTC rules, federal securities laws, the criminal law of the Commonwealth of Pennsylvania, and federal criminal law. Not only has MMPI violated civil law but also criminal law in the manner in which it falsely induced Plaintiff to purchase the existing Minuteman franchise in Lemoyne. 35. Defendant Emmett materially assisted MMPI to do or fail to do those actions set forth in Paragraph 34. 36. Defendants Graybill may or may not have assisted MMPI and Emmett to do or fail to do those actions set forth in Paragraph 34. Defendants Graybill materially assisted Defendants MMPI and Emmett to market by unlawful methods as set forth in Counts I through IV of the PlaintifFs Complaint and has therefore assisted the latter Defendants to violate state blue sky laws, federal FTC rules, and federal securities laws and state and federal criminal laws.. 37. In particular, the following written misrepresentations or omissions to state material facts needed to make the misrepresentation true have been made or not made with respect to the Disclosure Statement disclosure of then existing litigation as set forth in Paragraph 33: a. MMPI and Emmett failed to disclose that the FTC was complaining about the precise marketing methods that MMPI and Emmett used in the marketing ofexisting franchises to particular franchisees, all as more fully set forth in Counts I through IV, which are incorporated herein by reference. b. MMPI failed to disclose the full nature and extent ofthe relief sought by the FTC by omitting all those disclosures set forth in Paragraph 34, in particular the fact that the FTC was attempting to prohibit it fi'om marketing any existing franchise in the manner in which the Lemoyne franchise was marketed to Plaintiffas more fully set forth in Counts I through IV, which are incorporated herein by reference. c. Defendants Graybill, MMPI and Emmett failed to disclose to Plaintiff material financial information as required by the FTC request for injunctive relief when Emmettt falsely told Plaintiffthat the Graybill expenses to operate the franchise were about $7,000.00 per month and made the other misrepresentations set forth in Counts I through IV. d. MMPI failed to disclose to Plaintiffthat the FTC was alleging that MMPI and others were liable for false and misleading claims about earnings, gross sales and profitability levels. Emmett and unnamed co-conspirators in the home office of MMPI were making those same false and misleading claims to Plaintiff. Defendants Graybill were materially assisting Emmett to do so. e. MMPI failed to disclose that the litigation involved FTC claims that it and its officers violated federal consumer protection and franchise disclosure laws f. MMPI failed to disclose that the FTC was complaining about sales pitches made by MMPI to prospective franchisees about gross earnings and profits they could expect to see by buying and operating MMPI's quick print and sign shops. g. MMPI failed to disclose that the FTC was seeking hefty monetary damages to those prospective franchisees who suffered monetary damage from the violation of the federal consumer protection and franchise disclosure laws. h. MMPI failed to disclose that the FTC accused MMPI and its sales force ofan unlawful pattern ofprnviding false and unsubstantiated information about earnings to people interested in buying one of MMPI's franchises. i. MMPI failed to disclose that the FTC was attacking its written disclaimer statement that no earnings claims were made or authorized by MMPI as being unenforceable in the FTC action. j. MMPI failed to disclose that the contradiction between its written disclaimers and a franchisor's actual practices was a violation of the FTC Act. The actual practices in this case were committed by Defendants Graybill, MMPI and Emmett.and certain unnamed co- conspiratorss in MMPI's home office. k. MMPI failed to disclose that the FTC was complaining about the common-sense net impression from its actions in marketing its franchises that the purchaser was being furnished important specific eamings claims information to assist in the decision making process, notwithstanding the general disclaimers about earnings.. 38. Defendants are therefore estopped from relying on their disclaimer clauses in their contracts with Plaintiffas a defense made to the claims of Plaintiffby collateral estoppel and their own misrepresentations made as part ora common scheme to defraud purchasers of MMPI franchises that the purchaser was being furnished important specific earnings claims information to assist in his decision making process and then forcing the purchaser to sign a bald faced lie that the precise inforn~ation had nolo been provided. Plaintiff. The conspiracy between Defendants Graybill, Emmett and MPI was so specific that al/ Defendants are liable for all misrepresentations and the actions and inactions of one another, the same as if they had performed the misrepresentations, actions and inactions as an individual. Count VII 39. This Count sounds in equity. 40. Plaintiff was presented with a written Franchise Agreement which affirmatively requires him to seek non-binding arbitration of his claims against MMPI. This clause is a contract of adhesion, since Plaintiff simply had no bargaining power when he entered into the Agreement. The contract was dictated by MMPI on a take it or leave it basis; no input from Plaintiffwas permitted; this clause is required of all who wish to purchase a franchise from MMPI. In addition, under all the circumstances of this case, it would be inequitable to enforce this prevision ofthe contract because this clause was designed by MMPI to further its unlawful schemes and activities as set forth in the other Counts of this action 41. Plaintiffaks the court for a declaratory judgment canceling that clause of the contract and for rescission ofthe contract. Wherefore, in addition to the relief requested in PlaintifFs Complaint with Action for Declaratory Judgment, Plaintiff requests such other and further relief at law and in equity as arise from these additional Counts together with a declaratory judgment that the arbitration clause of the MMPI contract with Plaintiffbe rescinded. Notice to Plead Plead to the First Amended Complaint within 20 days of service or default judgment may be entered against you. Respectfully Submitted, Robert J. White Counsel for Plaintiff PO Box 3005 York, PA 17402 (717) 6994534 FAX (717) 699-2895 Certificate of Service Thc undersigned certifies that he has mailed a copy ofthis First Amended Complaint with Action for Declaratory Judgment to each Defendant on May 19, 2001 by first class mail addressed as follows: MMPI by serving Peter T. Bauer, General Counsel, Minuteman Press Intemationai, Inc., 1640 New Highway, Farmingdale, NY 1 ! 735 Defendant Robert Emmett at 489 Devon Park Drive, Suite 307, Wayne, PA 19087 Robe~ J. White Verification I verify that the facts contained in this First Amended Complaint with Action for Declaratory Judgment are true and correct to the best of my knowledge, information and belief. I understand that any false statements are made subject to the penalties of 18 Pa.C.S.A. Sec. 4904 relating to unswom falsification. Michael Shaffer BUCHANAN INGERSOLL Attorneys for Defendants PROFESSIONAL CORPORATION Minuteman Press International, Inc. and By: Harris J. Chernow Robert Emmett PA I.D. No.: 52577 By: Arthur L. Pressman PA I.D. No.: 10124 By: John J. Jacko, III PA I.D. No.: 67477 Eleven Penn Center, 14th Floor 1835 Market Street Philadelphia, PA 19103-2985 (215) 665-3854 MICHAEL A. SHAFFER, : COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, Plaintiff, : PENNSYLVANIA V. i : DOCKETNO.: 2001-2664 SUSAN GRAYBILL AS INDIVIDUAL AND AS : ADMINISTRATRIX OF THE ESTATE OF : DENNIS M. GRAYBILL;. : MINUTEMAN PRESS INTERNATIONAL, INC., : and ROBERT EMMETT, : : Defendants. NOTICE THAT ACTION HAS BEEN REMOVF~D TO: Prothonotary Marvin Beshore, Esquire Court of Common Pleas Milspaw & Beshore Cumberland County, Pennsylvania 130 State Street P.O. Box 946 Robert J. White, Esquire Harrisburg, PA 17108-0946 P.O. Box 3005 York, PA 17402 PLEASE TAKE NOTICE that on this 13th day of June 2001, Defendants Minuteman Press International, Inc. ("Minuteman Press") and Robert Emmett have, pursuant to federal law, filed with the Clerk of the United States District Court for the Middle District of Pennsylvania, the attached copy of their Notice of Removal in the Court of Common Pleas of Cumberland County, Pennsylvania. Pursuant to 28 U.S.C. §1446(d), this court is respectfully requested to proceed no further in this action, unless and until the action is remanded by the United States District Court. Notice of the Removal has also been given to all of the other parties in this action. This action was removed to the United States District Court under the authority of 28 U.S.C. §1446. s J. Cl~me"w ur L. Pressman John J. Jacko, III PA I.D. Nos.: 52577/10124/67477 BUCHANAN INGERSOLL PROFESSIONAL CORPORATION 11 Penn Center, 14th Floor 1835 Market Street Philadelphia, PA 19103 Phone: (215) 665-8700 Fax: (215) 665-8760 Dated: June 15, 2001 IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA MICHAEL A. SHAFFER, : v. Plaintiff, 1 : g~I~ACTiO]~_~~6 5 SUSAN GRAYBILL AS AN INDIVIDUAL AND : (Judge ) AS ADMINISTRATRIX OF THE ESTATE OF : DENNIS M. GRAYBILL : MINUTEMAN PRESS INTERNATIONAL, INC., : F{LED and ROBERT EMMETT, : : HARRISBURG Defendants. JUl~l NOTICE OF REMOVAL yARY E. D'ANDJ;I~,A, CLERK ~'er_.__ AND NOW, Defendants Minuteman Press International, Inc. ("Minuteman ~ K - Rober~ Emmet!, by and through their counsel, Buchanan Ingersoll Professional Corporation, and pursuant to 28 U.S.C. § § 1331, 1367, 1441 and 144/5, hereby provide Notice of Removal of this act/on from thc Courl of Common Pleas of Cumberland County, Pennsylvania to the United States District Court for the Middle District of Pennsylvania. As grounds thereof, Minuteman Press and Robert Emmet! state as follows: l. This is an action ora civil nature in which the Dis!r/ct Courts of the United States have been given original jurisdiction in that it ar{scs under the laws of the United States within the meaning of 28 U.S.C. §1331. 2. Minuteman Press and Robert Enunett are defendants in a civil action filed in, and presently pending before, the Court of Common Pleas of Cumberland County, Pennsylvania. captioned Michael ,,~. Shaffer v. Susan Graybill as an individual and as ,4dministratri.~ of the Estate of Dennis M. Gra. vbill; Minuteman Press International. a Ness, York corporation; and Robert E~trnett. Docket No.: 2001-2664. 3. Minuteman Press received a copy of the Complaint in Law with Action for Declaratory Judgment ("Complaint") via certified mail on or shortly after May 3, 2001. A copy ofthe Complaint is attached hereto as Exhibit "A." 4. In the Complaint, Plaintiffallegedly asserted claims, inter alia, for fraud in the inducement, conspiracy, misrepresentation, breach of contract and negligence against the defendants with respect to Plaintiff's pumhase ora Minuteman Press franchise located in Lemoyne, Pennsylvania and a certain franchise agreement ("Franchise Agreement") dated September 1, 2000 to which Plaintiff and Minuteman Press were parties. 5. On or shortly after May 19, 2001 and before any defendant answered moved or otherwise pled to the Complaint, Plaintiff filed his First Amended Complaint with Action for Declaratory Judgment ("First Amended Complaint"). 6. The certificate of service attached to the First Amended Complaint states that Plaintiff served the First Amended Complaint on Minuteman Press via First-Class, U.S. Mail on May 19, 2001. Minuteman Press received a copy of the First Amended Compliant on or shortly after May 21, 2001 - the date postmarked on the envelope. A copy of the First Amended Complaint is attached hereto as Exhibit "B." 7. In the First Amended Complaint, Plaintiff incorporates the Complaint by reference and adds Count VI alleging misrepresentation, omissions, false statements and -2- conspiracy in violation of various unspecified "blue sky laws. federul FFC rules, federal securities laws, the criminal law of the Commonwealth of Pennsylvania, and federal criminal law." See Exhibit "B" at ¶34 (emphasis added). The First Amended Complaint alleges in Count VII that a clause in the Franchise Agreement requiring non-binding arbitration of PlaintifPs claims against Minuteman Press is a contract oradhesion and seeks "such other and further relief at law and in equity as arise from these additional Counts together with a declaratory judgment that the arbitration clanse of the contract be cancelled and the contract be rescinded." Exhibit "B" at Count VII. g. The First Amended Complaint is the pleading setting forth the federal laws, claims and issues upon which removal of this action is based. This Notice is timely filed pursuant to 28 U.S.C. § 1446(b) as it is being filed within thirty (30) days of Minuteman Press' receipt of a copy of the First Amended Complaint raising for the first time the federal questions which support this ~moval. 9. The other bases of relief asserted by Plaintiff in the Complaint and the First Amended Complaint all arise out ofthe same set of facts and are part of the same case and controversy, such that this Court has supplemental jurisdiction of them within the meaning of 28 U.S.C. 1367(a). I 0. To date, Minuteman Press and Robert Emmett have not received any other process, pleadings or orders in this matter aside from the above-referenced Complaint and First Amended Complaint. 11. Minuteman Press and Robert Emmett will promptly file a copy of this Notice with the Prothonotary of the Court of Common Pleas of Cumberland County, Pannsylvania and will serve a copy of this Notice upon counsel for Plainti ff. -3- 12. Minuteman Press and Robert Emmett specifically reserve and do not waive their right to assert any defenses and claims, including but not limited to the defenses of lack of jurisdiction over the person, improper venue, insufficiency of process, or insufficiency of'service of process, failur~ to state a claim upon which relief can be granted, or failure to join a party indispensable under Rule 19, consistent with Fed. R.Civ. P. 12 and DiCesare-Engler Productions. Inc.. v. Mainman Ltd., 421 F. Supp. 116 (W.D. Pa. 1976). 13. Co-defendant Susan Graybill, as an individual and as Administratrix ofthe Estate of Dennis M. Graybill joins in this Notice of Removal as evidenced by the Joinder in Removal attached hereto as Exhibit "C." WHEREFORE, Defendants Minuteman Press International, Inc. and Robert Emmett request that this matter proceed before this Court as an action properly removed. s J. ~e~w, Esquire ur L. Pressman, Esquire John J. Jacko. HI, Esquire PA I.D. Nos.: 52577/10124/67477 BUCHANAN INGERSOLL PROleESSIONAL CORPORATION Eleven Penn Center, 14th Floor Philadelphia, PA 19103-2985 (215) 665-8700 - Telephone (215) 665-8760 - Facsimile Attorneys for Defendants Minuteman Press International, inc. and Robert Emmett Dated: June 15, 2001 -4- 1 ~NOTICE OF .J~t~IC[.~L ASSI~ This c~e h~ b~ assi~ed to ~e Iudici~ 0ffic~ ~dicated below. Co,scl ~d all p~ ~ adds~ ~t ~ere is m Office of~e Clerk ~ the Fed~al Co~ouses ~ Scrmton, H~sb~g md Willlmspo~, Pe~sylv~a. Ple~e file ~ pleM~s ~rectly ~th ~e ' · · Clerk s Office m wMch ~o Judici~ Officer is sta~oned. Do not ~le my cou~esy copies ~ ~e com. h a~ord~ M~ ~o lo~ ~es, co~cl will file ~e ofi~ ~ ~o mpi~ of a~ plea~gs, mofiom, mmorm~ md o~ docmm~ ~c~t dismv~ mated, Mth tho Cl~k's Office. Co~el should file ~y ~tional c~ies M~ ~e Cl~k's R~es, m 0~ of Co~ ur ~ m~ by ~o Offi~ ~ m~y bo ~ by ~o Loc~ ~s~.~u~ci~ Offi~r list~ below. CLE~S.O ~ ~ SS Wil~ L Ne~on Fed~ B~I~ & U,S. Dis~ct Co~e ~ ~u~e A. ~d Caputo 235 N. W~n Argue ~ Y~ge ~es M. M~ey P.O. Box 1148 Scrmto~ P~Iv~a 18~01 ~ Y~ge W~ J. Ne~on (570) 207-~600 ~ Yudge ~ p. Conaboy ~ ~udge ~ M. _ i,/ Judge Sylvia H. Rainbo U.S. District Courthouse _ _ ~'udge Yvette Kano 228 W'~lnut Street P.O. Box 983 .~_ Judge William W. Caldwell Harrisburg, Pennsylvania 17108 (717) 2.21-3920 _ _ ludge ~ames 1~. McClure U.S. District Courthouso ~ Sudge Malcolm Muir 240 W. Third Street P.O. Box 608 Williamspo~ Pennsylvania 17701 ~ (570) 323-6380 NOTE: This case has bea~ refuted to the U.S. Magistrate'-'-'--------lud§e noted below. Please fil"t~'i'~-a~-- documents at the location indicated, - _ Magistrate Judg~ L Andrew Smyser Harrisburg Address -- _Magistrate Judge l~alachy l~'mion Scranton Address -.____ Magistrate Judge Thomas M. Blewitt Scranton Address ,~FV 0~ ~,,, CIVIL COVER SHEET APPENDIX B OF DENNIS M G~YBILI.. M[NLITEMAN PRES~ INTERNATIONAL [NC'. AND COL~TY OF RESIDENCE OF FIRST LISTED DEFENDANT (~ U.S. PLAINTIFF CASES ONLY) (C} A~ORNEYS (FI~t NAME. ADDRESS. AND TELEPHONE A~O~EY~ IIF KNO~) ,A~,5 J CHE~OW. ESQUIRE ROBERT J WHITE. ~U]~ --JUN L I I PENN CENTER. 14TH FLOOR MI~PAW AND BESHO~ PE~ PHILADELPHIA. PA IqI0] I~0 STATE ST~ET 11. BASIS OF JUP. ISDICTION ~'t.^c~^~x~so~aoxosLv~ IlL CITIZENSHIP OF PRINCIPAL PARTIES m.^cz,,~ x rs osz .o~ Citizen or Subje¢l of a [] 3 r-[ 3 Slate Foreign Nation [] 6 [] 0 IX'. NATURE OF SUITE (PLACE .4N X IN ONE BOX ONL ~ VII. REQUEST IN C'HEC~ ,~ T.tS ~ .X CLASS ACTION DEMAND S c'h.t ¥~s o.,~ ,~d,.~d.~ ,.,o,~,t .... COM PLAINT: I [] U~.D~. ~. ~. :, ~URY D~AND' ~ ~'~ ~ ~o UNITED STATES bi~ I R]~ COURT /~'~//~ ~ A In the Court of Common Pleas of Cumberland Count, Pennsylvania Civil Division Michael A. Shaffer, No. ~=--~.~t~COL'~ ~ Plaintiff, Judge _ Susan Graybiil as an individual and as Administrntrix of the Estate of Dennis M. Grnybill; Minuteman Press International, a New York corpor- ation; and Robert Emmett _.~.. Defendants Jury Trial Demanded ~" :" NOTICE TO DEFEND ~-'= .... Notice You have been sued in court. If you wish to defend against these claims, you must take action within twenty (20) days aRer this complaint and notice are served by entering an appearance personally or by an attorney and filing in writing with the Court your defenses or objections. 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. A judgment may also be entered against you 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 Lawyer Referral Service Cumberland County Bar Association 2 Liberty. Avenue Carlisle, PA 17013 (717) 249-3166 1-800-990-9108 [RUE COPY FROM RECORD m T~-"-','Jmony wl~ar~I. I here unto s~ my Ilarm .:,Id t~ ~ of ~ld Coo~ at Ca~lr, a, o.otary AVI$O Usted ha sido domandado en corte. Si usted quiere de£enderse en contra de estas dem:md~s, usted debe romar .~ccion dentro cle viente (20) dias despues que esta queja y aviso sean servidos. registrnndo una comp.~r.~cencia per$onalmente o pot su abogad y Ilenando en esccHto en la corte su def'ensa u objectiones con Ia corte. Usted esta advertido que si fallah de h-',cerlo, el casa puede seguir si,n usted .v un desicion pued ~er.re, gistrado ea contra su.va pot la corte sin ningun otrn avlso. Ademns. la torte pued dec~d~r a favor del demandante v requiere que usted cumpin con todns Ins provisiones de esta demnnda. Usted puede perder dinero o sus propriedndes u otros derechos importante parn usted. USTED DEBE LLEVAR £STE DOCUMENTO A SU ABOGADO NO PUEDE PAGAR UNO VAYA O LLAME POR TELEFONO A LA OFFICINA ESCRITA ABA JO PAR_-X AVERIGULAR DONDE USTED PUED CONSEQUIRE ASSISTANCIA LEGAL. Cumberland County Lawyer Referral Service Cumberl~d County Ba~ Association 2 Liberty. Avenue C~rlisle. PA 17013 (717) 249-3166 1-800-990-9108 In the Court of Common Pleas of Cumberland County.. Pennsylvnnin Civil Division Michael Shnffer, } No. Plaintiff, } } v. } Susnn Graybili as an individual } Judge and as Administrntrix of the Estate of Dennis M. Graybill, Minuteman Press International, Inc.. and Robert Emmett Defendants. } Jury. Trial Demanded Complaint in Law with Action for Declarntory Judgment Comes now Plaintiff and complains of each Defendant as follows. Parties, Jurisdiction and Venue 1. Plaintiffis Michael Shaffer who resides at 38 Bentz Mill Road. East Berlin, PA 17316. 2. Defendant Susan Graybill is an individual who operated a Minuteman Press franchise in Lemoyne, PA, and may be served in person at 1145 Highland Drive, Mechanicsburg, PA 17055. 3. Defendant Susan Graybill as Administratrix ofthe Estate ofDennis M. Graybill, deceased, may be served in person at 1145 Highland Drive, Mechanicsburg, PA 17055. 4. Defendant Minuteman Press International, Inc. (hereafter MMPI) is a New York corporation with its home office in Farmingdale, New York. It may be served by certified mail addressed to its registered agent, Peter T. Bauer, General Counsel, Minuteman Press International, Inc., 1640 New Highway, Fanningdale, NY 11735. 5. Defendant Robert Emmett is an individual and representative of MMPI and maintains 'an office in Wayne, PA. He may be served in person at 489 Devon Park Drive, Suite 307, Wayne, PA 19087. 6. The court has jurisdiction over these proceedings because the Minuteman Press franch,se sold to Plainttffby Defendants Graybill is located ~n Cumberland County and the amount in controversy exceeds the minimum jurisdictional amounts of the court. 7. The court has venue over these proceedings because all or part of the cause of action arose in Cumberland Cou:'x~y and Defendants Gr'~ybill maintained a place of business in Lemoyne. Cumberland County, PA, and reside in Cumberland County, PA. Facts Common to All Connts 8. On or about August, 2000. Defendants Graybill were operating a Minuteman Press franchise in Lemoyne under contract with Defendant MMPI. Defendants Graybill were desirous of selling the franchise to Plaintiffand did so on September 6. 2000. Plaintiffentered into various contracts with Defendants Graybill, Defendant MMPI in pursuance of the purchase of the franchise. Count I 9. This :ount sounds in tort. 10. Throughout the relevant time frame alleged in Paragraph 9, all Defendants entered into a conspiracy with one another to unload a failing business on Plaintiffby agreeing to materially defraud Plaintiffby falsely inducing him to enter into a contract to purchase and to purchase the Minuteman Press franchise located in Lemoyne, PA. Defendant Emmett was the regional representative of Defendant MMPI and had authority, speak for and to bind the corporation. I 1. Defendants Graybi[I were the owners of the franchise. Defendants Graybill made material misrepresentations as to the financial viability of the franchise and these were made to falsely reduce Plaintiffto purchase the >Iinuteman Press franchise of kemoy'ne as an ongoing and viable enterprise with sufficient income to pay expenses and support the store owner and two employees. 12. Defendants Graybill conspired with one another, MMPI and Emmen to represent the Lemoyne franchise as a viable entity that would make a profit and that Plaintiff would start seeing those profits within three months. Defendants Graybill materially misrepresented the financial viability o£the Lemoyne franchise. Defendants MMP! and Emmett materially assisted Defendants Graybill to do so. Defendants MMPI and Fmmett also made material misrepresentations to induce Plaintiff to purchase the franchise and materially assisted Defendants Graybill in unloading an unprofitable franchise on Plaintiff; these misrepresentations were made by Defendant Emmett, MMPI's regional representative. 13. The following misrepresentations were made by one or more of the Defendants: a. Defendants Graybill materially misrepresented the financial viability of the Lemo.vne franchise by representing that monthly operating expenses were in the range of $7,000.00 when in fact monthly operating expenses were in the range of $12,000.00. Plaintiffexpressly obtained copies ofthe checks written for expenses by the franchise and refused to purchase the franchise because the operating expenses were too high at $12,000.00 per month. Defendant Emmett represented to Plaintiff in response that many of the checks were for personal expenditures and that the operating expenses for the franchise were only $7,000.00 per month. Defendants Graybill confirmed Emmett's misrepresentation. This was a very material factor to Plaintiff because the franchise's monthly income was only in the $5,000.00 range. b. Defendant Emmett materially misrepresented the financial viability of the Lemo.,,xte fi'anchise by representing that Plaintiff need earn only $2,000.00 per month over and above what the fi'anchise was bringing in in order to make a profit when in fact Plaintiffneeded more than $7,000.00 more per month in gross sales just to break even. c. Defendants MlvIPI and Emmen materially misrepresented to Plaintiffthe financial viability of the Lemo.vne t?anchise by making the same representations as set forth m Paragraphs 13a and 13b. Said Defendants conspired with Defendants Graybill to make these misrepresentations. d. Defendants MMPI and Emmett materially misrepresented to Plaintiffthat he would not only be able to meet expenses within a very. short period of time but that he would also realize a gross profit of 30% of gross sales within that same time merely by following MMPI's marketing program, which was to make twenty new contacts per day. Plaintiffdid so but was unable to make a profit on the fi'anchise. e. Defendants MMPI and Enunett materially misrepresented to Plaintiff that the only reason why the Lemoyne franchise was not already making a profit was because Defendant Dennis M. Graybill. now deceased, was not able due to his poor health to make enough marketing calls to generate additional sales. 14. Plaintiffwas damaged by these misrepresentations in the loss ofthe amounts that he paid to Defendants Graybill to purchase the franchise, in the amounts that he paid Defendant MlvlPI for the transfer of the franchise and to at~end its school for new owners, and in the loss of working capital and the amounts that had to be borrowed to operate the franchise fi.om month to month. Consequential damages were suffered by Plaintiffin the amounts that he could not earn 'because he was devoting his fi~ll time to operation of the franchise instead ofhis former employment as well as amounts he owes to his landlord and Textron Financial Corporation fi'om contracts that were necessitated by his purchase of the franchise. Further consequential damages stemmed fi'om the inevitable loss of'credit reputation when he was unable to repay the money he borrowed to keep the franchise operating from month to month. Count Il 15. On or about September 1, 2000, Plaintiff entered into a written contract with Defendant MMPI which was labeled as the Franchise Agreement. Immediately upon entenng the Agreement, Plaintiffwas sent to New York for an explanation of what to do to make the fi'anchise viable. He was promised in writing all needed technical assistance and advice. This assistance and advice was based on the express corporate formula that if the franchisee did what MMPI told him to do, he would meet expenses and make a profit. Plaintiffwas expressly told by MMPI that all he would have to do was manage the franchise, make twenty cold calls a day, leave all work to the employees, and, by doing so, he would make significant profits. These promises were made in order to induce Plaintiffto enter into the franchise agreement and were again made in the training school in New York. These promises were made in the Franchise Agreement or were made in supplementation of the written agreement or were made in order to induce Plaintiffto enter into the written agreement. In other words, follow our program and you will realize a pretax profit of one third of your gross sales. 16. These promises were breached by MMPI. At no time was the income fi'om the franchise sufficient to even meet expenses and within six months of purchasing the franchise, Plaintiffwas forced to close his doors due to excessive expenses. 18. Damages that flow fi'om these breaches of contract and false promises include the 'loss o[.the money that was paid to MMPI to transfer the franchise to Plaintiffand send him to training school in New York. Consequential damages include the loss of what was paid by Plaintiffto the franchise owners to purchase the franchise, the loss of'operating capital, the waste o[.the assets o[.Plaintiff's franchise, and the various contractual payments needed to pay the landlord and the equipment lessor. Further direct damages resulted from the extreme mental anguish suffered by Plaintiffwhich were intentionally inflicted as the result ot"the torts alleged in this Complaint. These damages are in an amount in excess of'the minimum jurisdictional limits of the court. Count III 19. Defendant MMPI would not transfer the franchise to Plaintiffwithout first receiving a financial application from the Plaintiffcalling for a disclosure of all assets.. After reviewing Plaintiff's financial statements, MMPI caused the sale of'the franchise in Lemo.vne to Plaintiff and transferred the franchise to Plaintiffand caused him to expend significant amounts ['or training and for anticipated losses fi.om operation of'the franchise within the first three months. 20. Having required Plaintiff to submit a financial application listing all assets of Plaintiff, Defendant 1VuMPI at all times material to this Complaint, knew or should have known that Plaintiffhad insufficient income and assets to operate the franchise for even the three months at the end of'which Plaintiffwas promised that he would be making profits. As the superior bargaining party, B,'LMPI was under a duty to disclose to Plaintiff that he had insufficient income and assets with which to purchase the Lemoyne franchise. This negligence on the part of IVIMPI caused Plaintiffto suffer not only monetary damages but also an entitlement to damages for exlxeme emotional distress in a.mounts in excess of the minimum jurisdictional limits of the court. · [ verify that the facts contained in the Complaint are tree and correct to the best ofmy knowledge, information and belief'. I understand that any false statements are made subject to the penalties of 18 Pa.C.S.A. Sec. 4904 relating to unswom falsification. ,-- , ., ,/..'? /)~, bKMichael ShatTer 20.1. Plaintiffhas further been consequentially damaged by these defendants in an amount in excess of the minimum jurisdictional amount of the court for extreme mental anguish intentionally inflicted upon him as the result of the loss of his life savings. Count IV 22. Each of the torts complained about were committed with such deliberateness and willfulness and in such reckless disregard of the rights of Plaintiffso as to entitle him to punitive damages in an amount in excess of the minimum jurisdictional amounts of the court. Incorporation by Reference 23. Each Count hereof is incorporated in each other Count by reference. Each Paragraph hereof is incorporated in each other Paragraph by reference. Wherefore, Plaintiff prays that after trial hereof, he be awarded actual and consequential and punitive damages, each in an amount in excess of the minimum jurisdictional limits of the court against each defendant and against all defendants jointly and severally for their joint misconduct and for such other and further relief in law and in equity to which Plaintiff may be justly entitled. Respectfully Submitted, Robert J. White Counsel for Plaintiff PBN 32487 PO Box 3005 York, PA 17402 (717) 699-4534 FAX (717) 699-2895 Verification B In the Court of Common Pleas of Cumberland Count3... Pennsylvania Civil Division Michael A. Shaffer } No. 2001-2664 Civil Term Plaintiff, } v. } Susan Graybill et al., Defendants } Jury Trial Demanded Plaintiff's First Amended Complaint with Action for Declaratory Judgment Comes now Plaintiffand amends his Complaint with Action for Declarato~' Judgment and states the r'olloxving additional causes o£action: Count VI 32, Plaintiff's Complaint is incorporated herein by reference, the same as if fully set forth herein. 33. In the Disclosure Document of Minuteman Press International, Inc. which which was required by FTC roles and is dated August, 1999. the following disclosure is made on page 12 about an FTC action against Defendant MMPI and others: 'tess International. Inc.. Speedy Si~-A-Arama. USA. Inc.. Roy W. Titus and Jeffrey Haber, Defendants (CV 93-2496) Filed on June 4, 1993, in the United States District Court, Eastern District of New York. On December 18, 1998, an injunction was filed prohibiting the Defendant's excluding Haber from doing the following: A. Making, or assisting in the making of, expressly or by implication, orally or in writing, to any prospective franchisee any statement of past. present or future sales, income, or ~oss or net profits of any existing or prospective franchisee or group of franchisees, unless at the time of making such representation the defendant possesses written material that provides a reasonable basis for the representation. B.Violating any provision of the Rule 16 C.F.R. Part 436 or the rule as it may later be amended and the disclosure requirements ofthe UFOC in effect at the time. C. Assessing or collecting :z transfer.'training fee from ;my franchisee who sells or assi~s its i"ranchise unless the se[lin~ franchisee received a copy ora disclosure statement indicating that such fee would be charged. D. Failing to monitor and investigate complaints about comp(i;mce with the rule or the injunction. E. To cooperate with the Commission in the en~'orcemcn[ ol'this injunction. Section .~. or'this disclosure tel=res [o precisely the same marketing methods and misrepresentations that are se[ forth in Counts I through iV of the PlaintifFs Compl.~int. which :~re incorporated herein by reference. The disclosure omits material/~.c[s and is aft~rmati,,'ely misleading. 34. De£endant ,'V[~lPl's misrepresentations, omissions, false statements, actions and inactions violate state blue sky laws. federal FTC rules, ~'ederal securities l.~ws, the criminal law or'the Commonwealth or' Permsy[vania, and federal criminal [aw. No[ only has M~IP[ violated civil law' but also criminal law in the manner in which it falsely induced Plamt]i'T to purchase the existing Minuteman franchise in £emoyne. 3.5. Defendant Emmett materially assisted MMPI to do or fail to do those actions set forth in Paragraph .34. 36. Defendants Graybill may or may not have assisted MMPI and En'u'nett to do or fail to do those actions set forth in Paragraph 34. Defendants Graybi[1 materially assisted Defendants MMPI and F-mmett to market by unlawful methods as set t'orth in Counts [ through IV o.r the PlaintitT's Complaint and has therefore assisted the latter Defend;mrs to violate state blue sky laws, federal FTC rules, and federal securities laws ;md state and federal criminal la,vs.. .37. in particular, the following written misrepresentations or omissions to st-',te material facts needed to make the misrepresentation true h~ve been made or not made with respect to the Disclosure Statement disclosure of then existing litigation as set t'orth in Paragraph 33: a. MMPI and Emmett failed to disclose that the FTC was complaining about the precise marketing methods that MMPI and Emmett used in the marketing of existing franchises to particular franchisees, all as more fully set forth m Counts [ through Ix,.'. ;vhtch are incorporated herein by reference. b. MMPI lhiled to disclose the full nature and extent of the relief sought by the FTC by ommmg all those disclosures set irbrth in Paragraph 34. m particular the fact that the FTC was attempting to prohibit it from marketing any existing franchise in the manner in which the I' emoyne franchise :,,'as marketed to Plaintit'f as more thlly set Forth in Counts I through [%'. which are incorporated herein by reference. c. Defendants Graybill. MMPI and Emmett Failed to disclose to Plainuff material financial information as required by the FTC request for injunctive relieF,.vhen Emmem falsely told Plaintiffthat the Graybill expenses to operate the franchise were about S7.000.00 per month and made the other misrepresentations set forth in Counts I through IV. d. MMPI tailed to disclose to Plaintiffthat the FTC was alleging that MMPI and others were liable for false and misleading claims about earnings, gross sales and profitability levels. Emmett and unnamed co-conspirators in the home office of MMPI were making those same false and misleading claims to Plaintiff. Defendants Graybill were materially assisting Emmen to do so. e. MMPI failed to disclose that the litigation involved FTC claims that it and its officers violated federal consumer protection and franchise disclosure laws f. MMPI failed to disclose that the FTC was complaining about sales pitches made by MN[P! to prospective franchisees about gross earnings and profits they could expect to see by buying and operating MMPI's quick print and sign shops. g. MMP[ thiled to disclose that the FTC was seeking hetty monetary, damages to those pmspecti~'e franchisees who suffered monetary, damage fi.om the violation of the t'ederal consumer protection and franchise disclosure laws. h. MMPI failed to disclose that the FTC accused MMPI and its sales force of an unlawful pattern of providing false and unsubstantiated information about earnings to people interested in buying one of MMPl's franchises. i. MMPI failed to disclose that the FTC was attacking its written disclaimer statement that no earnings claims were made or authorized by MMPI as being unentbrceable in the FTC action. j. MMPI failed to disclose that the contradiction between its written disclaimers and a franchisor's actual practices was a violation of the FTC Act. The actual practices in this case were committed by Defendants Graybill. MMPI and Emmett.and certain unnamed co- conspiratorss in MMPI's home office. k. MMPI failed to disclose that the FTC was complaining about the common-sense net impression from its actions in marketing its franchises that the pumhaser was being furnished important specific earnings claims information to assist in the decision making process. notwithstanding the general disclaimers about earnings.. 38. Defendants are therefore estopped fi.om relying on their disclaimer clauses in their contracts with Plaintiff as a defense made to the claims of Plaintiff by collateral estoppel and their own misrepresentations made as part of a common scheme to defraud purchasers of *IMPI fi.anchises that the pumhaser was being furnished important specific earnings claims information to assist in his decision making process and then forcing the pumhaser to sign a bald faced lie that the precise information had not been provided. Plaintiff. The conspiracy between Del'endants Graybill. Emmett and NIP[ was so speciHc that all Defendants are liable for all misrepresentations and the actions and inactions of one another, the same as il'they had performed thc misrepresentations, actions and mact~ons as an Individual. Count VII 39. This Cou. nt sounds in equity. 40. P[ainti ff was presented with a written Franchise Agreement which affirmatively requires him to seek non-binding arbitration of his claims against MMPI. This clause is a contract of adhesion, since Plaintiff simply had no bargaining power wl~en he entered into the Agreement. The contract was dictated by *IMP[ on a take it or leave it basis: no input from Plaintiff was permitted; this clause is required of all who wish to purchase a franchise from MMPI. In addition, under all the circumstances of this case, it would be inequitable to enl'orce this provision of the contract because this clause was designed by MMPI to further its unlawful schemes and activities as set forth in the other Counts of this action · ,1.1. Plaintiffaks the court for a declaratory judgment canceling that clause ofthe contract and for rescission of the contract. Wherefore. in addition to the relief requested in Plaintiff's Complaint with Action for Declaratory. Jud_~rtent, Plaintiff requests such other and further relief at law and in equity as arise from these additional Counts together with a declaratory, judgment that the arbitration clause of the MMPI contract with Plaintiffbe rescinded. Notice to Plead Plead to the First Amended Complaint within 20 days of service or default judgment may be entered against you. Respectfully Submitted. Robert I. White Counsel for Plaintiff PO Box 3005 York. PA 17402 (717) 699-4534 F,,-LY (717) 699-2895 Certificate of Service The undersigned certifies that he has mailed a copy of this First ..-kmended Complaint with Action for Declaratory, Judgment to each Defendant on May 19, 2001 by first class mail addressed as follows: MMPI by serving Peter T. Bauer. General Counsel, Minuteman Press International. Inc.. 1640 New Highway, Farmingdale, ,NY 11735 Defendant Robert Emmett at 489 Devon Park Drive, Suite 307, Wayne. PA 19087 Robert J. White Verification I verify, that the facts contained in this First Amended Complaint with Action for Declaratory Judgment are tree and correct to the best of my knowledge, information and belief. I understand that any false statements are made subject to the penalties of 18 Pa.C.S.A. Sec. 4904 relating to unswom falsification. Michael Shaffer C IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA MICHAEL A. SHAFFER, : Plaintiff, : : v. : CIVIL ACTION NO. 01-CV- : SUSAN GRAYBILL AS AN INDIVIDUAL AND : AS ADMINISTRATRIX OF THE ESTATE OF : DENNIS M. GRAYBILL, : MINUTEMAN PRESS INTERNATIONAL, INC., : and ROBERT EMME'I'r, : : Defendants. JOINDER IN REMOV.~I. Defendants Susan Graybill as an individual and as Executrix' of the Estate of Dennis M. Graybill, co-defendants in the above-captioned action, join in the Notice o£Removal by Defendants Minuteman Press International, Inc. and Rober~ Emmett to which this Joinder is t Ivfar~/B~sh~}re, l~s}l'~ire PA I.D. No.: 31979 MILSPAW & BESHORE 130 State Street P.O. Box 946 Harrisburg, PA 17108-0946 Telephone: 717-236-0781 Facsimile: 717-236-0791 Attorneys for Defendants Susan Graybill as an individual and as ['~lt"g' 2001 Administrallix ofthe Es. tate of Dennis M. Graybill Dated: June Misidentified in the Complaint as "Administratrix". CERTIFICATE OF SERVICE I, John J. Jacko, III, hereby certify that on or about this 15th day of June 2001, I hereby served a tree and correct copy of attached Notice of Removal, via First-Class, U.S. Mail or as otherwise specifically indicated, upon the following: Robert J. White, Esquire P.O. Box 3005 York, PA 17402 Marvin Beshore, Esquire (via hand delivery) Milspaw & Beshore 130 State Street P.O. Box 946 Harrisburg, PA 17108-0946 Prothonotary (via hand delivery) Cumberland County Court of'Common Pleas I Courthouse Square Carlisle, PA 17013 John./ 4~7843 -I;PtILI CERTIFICATE OF SERVICE I, Jolm J. Jacko, Ill, hereby certify that on or about this 15th day of June 2001, I hereby served a tree and correct copy ofattached Notice That Action Has Been Removed, via First-Class, U.S. Mail or as otherwise specifically indicated, upon the following: Robert J. White, Esquire P.O. Box 3005 York, PA 17402 Marvin Beshore, Esquire (via hand delivery) Milspaw & Beshore 130 State Street P.O. Box 946 Harrisburg, PA 17108-0946 Prothonotary (via hand delivery) Cumberland Cotmty Court of Common Pleas I Courthouse Square Carlisle, PA 17013 457840 .I;PHLI Curtis R. Long Renee K. Simpson Prothonotary Dcputy Pmlhonolary John E. Slike Solicitor Docke~ No. c~/- ,,,~ ~, ~/(~,v,/ T~ ~I~D STATES DIST~CT CO~T FOR THE ~DDLE DIST~CT OF PE~S~V~IA Please acknowledge receipt of this case by signing and dating this document. Please send thi~ back to: PROTHONOTARY OFFICE CUMBERLAND COUNTY COURTHOUSE ONE COURTHOUSE SQUARE CARLISLE, PA 17013 Attn: Becky Record received: Date: / (signature & title) One Courthouse Square · Carlisle, Pennsylvania 17013 · (717)240-6195 · Fax (717)240-6573 SHERIFF'S RETURN - U.S. CERTIFIED MAIL CASE NO: 2001-02664 P COMMONWEALTH OF PENNSYLVANIA COUNTY OF CUMBERLAND SHAFFER MICHAEL A VS. GRAYBILL SUSAN ET AL R. Thomas Kline , Sheriff of Cumberland County, Pennsylvania, who being duly sworn according to law served the within named DEFENDANT ,MINUTEMAN PRESS INTERNATIONAL , INC by United States Certified Mail postage prepaid, on the 3rd day of May ,2001 at 0008:00 HOURS, at 1640 NEW HIGHWAY FARMINGDALE, NY 11735 , a true and attested copy of the attached COMPLAINT & NOTICE Together with REINSTATED # The returned receipt card was signed by on 00/00/0000 Additional Comments: RETURN CARD NEVER RECEIVED IN SHERIFF'S OFFICE TO DATE. Additional Comments . Sheriff's Costs: So Cert Mail 3.95 R. Thomas Kline Affidavit .00 Sheriff of Cumberland County Surcharge 10.00 .00 19.95 Paid by ROBERT J. W/~ITE on 07/02/2001 Sworn a~d subscri~d to before me this 9~ day of~_~ ~L~/ A.D. ' J ~othonotary SHERIFF'S RETURN - OUT OF COUNTY CASE NO: 2001-02664 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND SHAFFER MICHAEL A VS GRAYBILL SUSAN ET AL R. Thomas Kline , Sheriff or Deputy Sheriff who being duly sworn according to law, says, that he made a diligent search and and inquiry for the within named DEFENDANT , to wit: GRAYBILL SUSAN but was unable to locate Her in his bailiwick. He therefore deputized the sheriff of YORK County, Pennsylvania, to serve the within COMPLAINT & NOTICE On July 2nd , 2001 , this office was in receipt of the attached return from YORK Sheriff's Costs: So answers. Docketing 18.00 Out of County 9.00 Surcharge 10.00 R. ~ Kline DEP. YORK CO 33.80 Sheriff of Cumberland County .00 70.80 07/02/2001 ROBERT J. WHITE Sworn and subscribed to before me this ~ day of ~,1 a.D. t t Prothonotai~ ' SHERIFF'S RETURN - OUT OF COUNTY CASE NO: 2001-02664 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND SHAFFER MICHAEL A VS GRAYBILL SUSAN ET AL R. Thomas Kline , Sheriff or Deputy Sheriff who being duly sworn according to law, says, that he made a diligent search and and inquiry for the within named DEFENDANT , to wit: GRAYBILL SUSAN AS ADMIN OF EST OF DENNIS M. GRAYBILL but was unable to locate Her in his bailiwick. He therefore deputized the sheriff of YORK County, Pennsylvania, to serve the within COMPLAINT & NOTICE On July 2nd , 2001 , this office was in receipt of the attached return from YORK Sheriff's Costs: So answers~-- Docketin9 6.00 Out of County .00 Surcharge 10.00 R. Thomas Kline .00 Sheriff of Cumberland County .00 16.00 07/02/2001 ROBERT J. WHITE Sworn and subscribed to before me this ~ day of 2-~/ A.D. · ~ Prothonot~r~ ' SHERIFF'S RETURN - OUT OF COUNTY CASE NO: 2001-02664 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND SEAFFER MICHAEL A VS GRAYBILL SUSAN ET AL R. Thomas Kline , Sheriff or Deputy Sheriff who being duly sworn according to law, says, that he made a diligent search and and inquiry for the within named DEFENDANT , to wit: EMMETT ROBERT but was unable to locate Him in his bailiwick. He therefore deputized the sheriff of CHESTER County, Pennsylvania, to serve the within COMPLAINT & NOTICE On July 2nd , 2001 , this office was in receipt of the attached return from CHESTER Sheriff's Costs: So answers: Docketing 6.00 ~~! Out of County 9.00 Surcharge 10.00 R. ' Kline Dep. Chester Co 150.00 Sheriff of Cumberland County .00 175.00 07/02/2001 ROBERT J. W/qITE Sworn and subscribed to before me this ~6, day of~,~ / ~c---,3 ! A.D. i /--- Prothono~a~'y ' In The Court of Common Pleas of Cumberland County., Pennsylvania ~J. chael Shaffer ~t¢/~.~b~ Susan Graybi]l, et. al. //~ /~. Serve: Robert Emmett No. 01-2664 Civil Now, 5 / 3 / 01 ,20 O O, I, SHERIFF OF CI/IVlBERLAND COUNTY, PA, do hereby depulize the Sheriff of Chester County to execute Uhis Writ. this deputation being made at the request and risk of the Plainti~. ~'~te ~"~,-0/ SheriffofCumberland County, PA $ /.r~.et~ ~i~l "-:. R~ceiot No. ,~'~'?~'~ _.~ ... :,m. Arid it fS i :'"'"' .f- ,.T&, -~! I :':" '" ;" 5 '.,.~:. ~Tow,. ~,,,,/ ~,~ ,:'O0/,at ~."~ o'oJock ~ ('~',~¥;P;,d copy ofthe origi~a! and made known to_,/J/~;~,,~/t'' ,~/,~, /9/~t~ tc~' ~',.~..g'.*'¢' the contents thereof. '""~..j,_._Nol~. _l~po_ [ Shoriffof County, P.A. .... ~'~ COSTS Swor~ and subscribed before SERVICE rae t~s ~g day of___~_~ ,20 ~/ MILEAGE $ COUNTY OF YORK OFFICE OF THE SHERIFF 28 EAST MARKET ST., YORK, PA 17401 (? I 7) 771-960 I SHERIFF SERVICE INSTRUCTIONS PROCESS RECEIPT and AFFIDAVIT OF RETURN PLEASE TYPE OI~.Y LINE 1 THRU 22 , PLaiNTiFF,S/ DO NOT DETACH ANY COPIES ~NU~SER 2001--2664 3 DEFENDANT/S/ 14. 'PIPE OF WRIT OR COIdPLAi~'~'---~-- ..%'u.~an Graybill, et. al. Reinstated Notice SERVE { 5 NAME OF INDMOUAL. CO:.'.pS.~;y. CORPORATION. ETC TO SERVE OR DESCRIPTION OF PROPE~ ~Y TO'SE LEVIED, ATTACHED. OR SOLD Susan Gaz~oill AT NOW _~ ,20 I, SHERIFF ~~, do hereby deputize the sheriff of York COUNTY to ex~~.~nd m~aJ~.e re~lllk~of according to law. This deputization being made at the request and risk of the plaintiff. ,- -'~-~ S. SPECIAL INSTRUCTIONS OR OTHER INFORMATION THAT WILL ASSIST IN EXPEDITING SERVICE. ADVANCE FEE PAID BY Cb3~ERLAND COUNTY S~ERIFF wittlou ~`~tchm~n~u~f`~.--~??~?-N-~f~B~WA~¥~-~F~W~&~A~yd~p~e~n"u~nm~· an ' · 9' I~t:~*~-['~ [' ~ · WI'I L'-F~AT'"r"~'Z~,~ JY I ORIGINATOR art~ SIGRAI~'JRE J 10 TELEPHONE NUMBER 111 DATE FILED ~:O BOX 3005, YORK, PA 17402 (717) 699-4534 6/8/0[ CUMBERLAND COUNTY SHERIFF ?e. HOWSERVED. PERSORA/( ) RESIDENCE~L POS~C( ) POE( ) SHERiFF'S OFFICE ( ) OTHER/~ · ........... COUNTY OF YORK ' -' OFFICE OF THE SHERIFF (71'/) 771-9601 28 EAST MARKET ST., YORK, PA 17401 SHERIFF SERVICE I ' BISTRLICTk~.S PROCESS RECEIPT and AFFIDAVIT OF RETURN P~EASE TYPE' ONLY.EEJE 1 THRU 12 1 PLAINTIFF/S/ DO NOT DETACH ANY COP~S ~' ~'"",r ! ~ qhaf'fc-r 2. Co~O~RTNUMBER 2001._2664LC.~l%r[£ 3 DEFENDANT/S/ "., 4. TYPE OF WRIT OR COMPLAINT 6. AD~,r4C~ (~, 114t=Ei' OR RFO Wf'l~l BOX NUMBER. APT NO., CFFY. BORn. ~P.. STATE AND ZIP CODE) AT NOW ~.,,~ ,.-~' ...... ~ -~c ~ .~L O15TCLASBMAJL OPOSTED r~OTHER "~ COONTY'to execute this Writ and make retum thereof according to law. This deputizatJon being made at the reqpest and risk of the plaintiff. 8. SPECIAL INSTRUCTIONS OR OTHER INFORMAllON THAT WILL ASSIST IN EXPEDITING SERVICE: .~. lin} 9. TY~',Eh~' ._~* .'~,~ .~ ~fl~..A~ ~' .~.~ ~ATF~E y I OR G ~TOR a~ S G~TURE ...........  10. TELEP~NE NUMBER ~11. ~TE FILED ['~ ?.'X ', }.t.,, y;;i..~. ?A , 7,~? 7;Tt ,.)~..,.=?.~ ..... SPA~ ~OW FOR U~ OF ~ S~ - ~ ~T ~ ~OW ~ ~ 't 23 Advance Costs 24. Service Costs I 25. N/F I 26. Mileage '..=:+c=! 28. Sub TOtal