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HomeMy WebLinkAbout02-3947 NMCAVANAUGH MICHAELS, LTD., Plaintiff/Counterclaim Defendant V. SMITH & MASON FAMILY PRACTICE ASSOCIATES, LTD., Defendant/Counterclaim Plaintiff IN THE COURT OF COMMON PLEAS:- OF CUMBERLAND COUNTY PENNSYLVANIA r*i- • IJ ? .. .n [ -.. NO. 2002-3947 `:- HEALTH CARE PROFESSIONAL MANAGEMENT SERVICES, LTD., Petitioner CONCURRED-IN PETITION TO SUBSTITUTE TRANSFEREE AS PLAINTIFF PURSUANT TO PA.R.C.P. 2004 NOW COMES the Petitioner, Health Care Professional Management Services, Ltd. ("Petitioner" or "HCPMS")), by and through its attorneys, Cunningham & Chemicoff, P.C., and as its Concurred-In Petition to Substitute Transferee as Plaintiff Pursuant to Pa.R.C.P. 2004, and avers the following: 1. Plaintiff, Cavanaugh Michaels, Ltd. ("CML") instituted this action by the filing of a Writ of Summons on August 19, 2002. 2. A complaint was subsequently filed by CML, alleging breach of contract, quantum meruit, and fraud, and seeking a declaratory judgment. 3. On or about July 7`h, 2004 Neil Slenker, Esquire filed an Answer with New Matter and Counterclaim on behalf of Defendant, Smith & Mason Family Practice Associates, Ltd. ("Defendant"),to which CML timely replied, thus closing the pleadings. 1 4. Discovery has commenced in this case. 5. On March 22, 20.12, Bruce J. Warshawsky, Esquire and the law firm of Cunningham & Chernicoff, P.C. entered an appearance on behalf of CML, thus allowing the withdrawal of appearance of CML's prior counsel, Andrew W. Barbin, Esquire. 6. On February 27, 2012, Lee Cavanaugh ("Cavanaugh"), a then-employee and shareholder of CML (now known as Michaels & Associates, P.C.), entered into that certain Settlement Agreement and Release which contemplated, inter alia, that Cavanaugh's corporation, Petitioner HCPMS, would be assigned certain outstanding accounts of CML in exchange for a release of certain claims that Cavanaugh had against CML and other shareholders of CML (the "Settlement Agreement") and the sale of his interest in CML to its remaining shareholders. A true, correct, and complete copy of the Settlement Agreement is attached hereto, incorporated herein, and marked as Exhibit "A." The Settlement .Agreement contains and incorporates an Assignment and Assumption Agreement (the "Assignment") that, inter alia, assigns to HCPMS the accounts, including the matter which is the subject of this action. 7. Pennsylvania Rule of Civil Procedure 2004 authorizes a court to substitute a transferee for a plaintiff who has previously commenced an action and subsequently transfers his or her interest therein. 8. By virtue of the Settlement Agreement and the incorporated Assignment, Petitioner is now the real party in interest, having been assigned the rights and assumed the obligations of CML in this action. 9. Petitioner hereby stipulates and agrees that it shall assume and be responsible for any and all liability on the part of Cavanaugh Michaels, Ltd relative to Defendant's Counterclaim, the same 2 as if Cavanaugh Michaels were still a Counterclaim Defendant. 10. Subject to the stipulation and agreement set forth in paragraph 9, Counsel for the Defendant, Neil Slenker, concurs in the relief sought herein by Petitioner. WHEREFORE, your. Petitioner, Health Care Professional Management Services, Ltd, respectfully requests that this Honorable Court substitute Health Care Professional Management Services, Ltd. as Plaintiff and Counterclaim Defendant in this action. Respectfully submitted, Date: 2 J 2013 CONSENTED TO BY: CUNNINGHAM & CHERNICOFF, P.C. 7 PP By: Bru e,, Warsha ky, E uire Supn?me Court ID No: 58799 Nicholas A. Fanelli Supreme Court ID No: 308136 2320 North Second Street Harrisburg, PA 17110 Attorneys for Petitioner Smith and Mason Family Practice Associates, Ltd. By: 117-311 5 Neil Slenker, Esquire, Its: Counsel of Record VERIFICATION I, Lee Cavanaugh, authorized agent of Health Care Professional Management Services, Ltd., hereby verify that the statements made in the foregoing are true and correct based on my personal knowledge or upon information and belief. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S. §4904, relating to unsworn falsification to authorities Date: 11 Z o t ?j EXHIBIT `A' SETTLEMENT AGREEMENT AND RELEASE THIS SETTLEMENT AGREEMENT AND RELEASE ("Agreement") is made this day of ?? !J 2012, by and between LEE E. CAVANAUGH, an adult individual, and HEALTH CARE PROFESSIONAL MANAGEMENT SERVICES, LTD., a professional limited liability company, both of 302 West Elmwood Avenue, Mechanicsburg, PA 17055, hereinafter collectively called "Cavanaugh" and sometimes identified individually, and MICHAELS & ASSOCIATES, P.C., formerly Cavanaugh Michaels, Ltd., a Pennsylvania for- profit corporation, of 161 Old Schoolhouse Lane, Suite 3, Mechanicsburg, PA 17055, hereinafter called "Corporation", DAVID L. MICHAELS, 11 and JANICE M. MICHAELS, adult individuals of 161 Old Schoolhouse Lane, Suite 3, Mechanicsburg, PA 17055, hereinafter sometimes collectively called "Michaels" and sometimes identified individually. BACKGROUND: 1. On or about December 31, 2009, Cavanaugh and David L, Michaels, II and Janice M. Michaels were equal shareholders and employees of Corporation; and 2. Thereafter, Cavanaugh's employment with Corporation ceased on or before January 31, 2010 and claims have arisen between the parties regarding Cavanaugh's shareholder and employment status with the Corporation; and 3. Health Care Professional Management Services, Ltd ("HCPMS") is a Pennsylvania Professional Limited Liability Company of which Cavanaugh is the sole member; and 4. Cavanaugh, Michaels, HCPMS and Corporation have reached an agreement to forever resolve and terminate all claims between them arising out of Cavanaugh's former employment and shareholder status with Corporation; and 5. Cavanaugh, Michaels and Corporation desire to confirm their understanding in writing. NOW, THEREFORE, for and in consideration of the foregoing, together with the promises and covenants set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, each intending to be legally bound, agree as follows: 1. Background. The Background set forth above is hereby made part of this Agreement and incorporated herein. 2. Consideration. A. Cavanaugh hereby resigns as an officer, director and shareholder of the Corporation effective December 31, 2009. On or after January 1, 2010 all parties hereto were and continue to be permitted to provide services to clients of the Corporation. B. Cavanaugh owns one-third (666.66 shares) of outstanding common stock (2,000 shares) of the Corporation. For and in consideration of Ten Thousand ($10,000.00) Dollars, Cavanaugh shall sell 333.33 shares of his common stock to David L. Michaels, II. For and in consideration of Ten Thousand ($10,000.00) Dollars,- Cavanaugh shall sell 333.33 shares of his common stock to Janice M. Michaels. Cavanaugh shall deliver and duly endorse over to Michaels each of the share certificate(s) representing his shares. In the event that Cavanaugh's share certificates cannot be located, he shall execute an affidavit of lost share certificate(s) and confirm the conveyances. The aforesaid payments to Cavanaugh shall be made at the time of the parties' execution of this Agreement and upon receipt of stock certificate(s) or affidavit of lost certificate(s) by Michaels. The consideration tendered herein shall be for the shares which have a collective paid-in capital value of Five Thousand Dollars ($5,000.00). C. Within thirty (30) days of the parties' execution of this Agreement, Corporation shall pay to HCPMS Ten Thousand ($10,000.00) Dollars and within sixty (60) days of the parties' execution of this Agreement, Corporation shall pay to HCPMS an additional Ten Thousand ($10,000.00) Dollars. Corporation's 2 payments shall be documented by an IRS Form 1099 issued to HCPMS and, in addition to the Assignment of Accounts Receivable in Sub-Paragraph E, below is for resolution of compensation and related claims arising from Cavanaugh's termination of shareholder and officer status with Corporation. HCPMS shall provide a completed W-9 form to Corporation at the time this Agreement is executed. D. Within sixty (60) days of the parties' execution of this Agreement, Corporation shall distribute all of Cavanaugh's 401(k) retirement fund held by the Corporation to accounts designated in writing by Cavanaugh. To the extent practical, said distribution shall be in kind and to a fund or funds designated by Cavanaugh. E. Corporation shall assign to HCPMS the following accounts receivable held on the books of Corporation as of the date of the parties' execution of this Agreement as evidenced in the attached Exhibit "A" which shall be executed by the parties contemporaneously hereto, to wit: (1) Smith and Mason Family Practice. (2) Marianne Tegeler. (3) Advanced Kitchen and Bath, Inc. (4) Advanced Kitchen and Bath Partnership. (5) William Frank. (6) Perfect Solutions, Inc. 3. Closed Files of the Corporation. Closed and inactive client files of the Corporation which are presently stored at 601 East Simpson Street, Mechanicsburg, Pennsylvania, real estate owned by Cavanaugh, shall be removed by Corporation within sixty (60) days of the parties' execution of this Agreement. The closed and inactive client files shall 3 be destroyed in a timely fashion by Corporation or stored according to their professional responsibility requirements. Cavanaugh agrees to cooperate with Corporation by providing access to his property for Corporation to inspect, categorize and remove the files. Cavanaugh will cooperate with any scheduling of a disposal or on-site shredding company which Corporation may choose to dispatch or shred the unwanted files. Prior to Corporation performing this task, Cavanaugh will remove and take possession of the client files listed in Paragraph 2.E. above. 4. Mutual Release. Pursuant to the Agreement of the parties as contained herein, Cavanaugh, Michaels and Corporation do hereby remise, release and forever discharge each other, their successors, assigns, directors, officers, servants, agents, shareholders and employees of and from any and all claims, demands or losses against each other, or because of any matter or thing done, admitted or suffered to be done by any one of them against the other prior to and including the date hereof, specifically including those that may have been the subject of or part of the claims between the parties which were resolved by mediation before David A. Fitzsimons, Esquire on January 23, 2012. The purpose of this Agreement is to memorialize the Memorandum of Understanding executed by the parties' counsel on January 23, 2012, which is incorporated herein by reference, and to forever release and discharge the parties who participated in the mediation, Cavanaugh, Michaels and Corporation, from any and all claims between them arising out of Cavanaugh's shareholder and officer status with the Corporation which is terminated hereby. 5. No Admission of Liability. The parties agree that this Agreement does not constitute, nor should it constitute, an admission of liability by any of the parties hereto and is entered for purposes of settling disputes which have arisen between them. 6. Severability. In the event a court of competent jurisdiction declares any provision of this Agreement to be illegal or invalid, such declaration will not invalidate or otherwise affect the enforceability of the remaining provisions of this Agreement. 7. Successors and Assigns. The covenants, terms and provisions set forth herein shall inure to the benefit of and be enforceable by the parties, their successors, assigns and successors in interest, affiliated or related companies. 4 a 8. Cooperation. All parties to this Agreement agree to cooperate with each other and to make, execute, acknowledge and deliver such instruments and take such further action as may be necessary to carry out the purposes and intentions of this Agreement. 9. Attorneys' Fees for Enforcement. In the event that either party breaches any provisions of this Agreement, and the other party is required to file a legal action to enforce the terms hereof, the breaching party will pay all reasonable attorneys' fees, court costs and expenses which are incurred by the other party in enforcing this Agreement. 10. Governing Law. This Agreement will be construed, and the rights and obligations of the parties determined, exclusively in accordance with the substantive law of the Commonwealth of Pennsylvania with exclusive venue in the Court of Common Pleas of Cumberland County, Pennsylvania. [THIS SPACE LEFT INTENTIONALLY BLANK] 5 .M' IN WITNESS WHEREOF, intending to be legally bound hereby, each of the parties hereto have set their hands and seals the day and year first above written. This Agreement may be executed in duplicate counterparts. Witness: 20 IZ Date Lee av HEALTH CARE PROFESSIONAL MANAGEMENT SERVICES, LTD. Witness: /:4718431915,v,15, By: Date "tee E. Cava g , ole m ber 'z I)o I ? X4,", Date David L. Michaels, II 02.ob,IZ. Date Janie . Michaels MICHAE & ASSOCIATES, P.C.: Z. G, Z012. By: .7r- David L. Michaels, II, President 6 ASSIGNMENT AND ASSUMPTION AGREEMENT This Assignment and Assumption Agreement (the "Assignment") is made on 2012, by and between Michaels and Associates, P.C. (formerly Cavanaugh Michaels, Ltd.) ("Assignor"), a Pennsylvania Professional Corporation, AND Health Care Professional Management Services, Ltd. ("Assignee"), a Pennsylvania Professional Limited Liability Company. BACKGROUND A. Assignor is a corporation (an accounting firm) which recognizes on its financial records certain Accounts Receivable for the following clients as of December 31, 2009: 1. Smith and Mason Family Practice; 2. Marianne Tegeler; 3. Advanced Kitchen and Bath, Inc.; 4. Advanced Kitchen and Bath Partnership; 5. William Frank; and 6. Perfect Solutions, Inc. (collectively the "Assigned Accounts"), representing all accounts due and owing to Assignor from such entities and individuals (the "Assigned AR") . B. Assignor and Assignee are parties (along with their respective principals, David L. Michaels II/Janice M. Michaels and Lee E. Cavanaugh) to a Settlement Agreement and Release (the "Agreement"), of even date herewith to which this Assignment shall be attached as an Exhibit. Pursuant to the Agreement, Assignor desires to assign to Assignee, and Assignee desire to assume, all of the rights and obligations and duties of Assignor to the Assigned AR and the Assigned Accounts. NOW, THEREFORE, THIS ASSIGNMENT, WITNESSETH, that for and in consideration of the Background above, which is deemed by the parties to be a material and substantive part of this Assignment, the promises herein and for other good and valuable consideration, hand paid, the receipt and sufficiency of which are hereby acknowledged by the parties, Assignor and Assignee agree as follows: A. 1. Assignment by Assignor. Assignor hereby assigns, transfers, sells and conveys unto Assignee, and Assignee hereby accepts the assignment, title, transfer, sale and conveyance of all of Assignor's right, title and interest in, to the Assigned AR and any and all monies owed to Assignor by the Assigned Accounts, as of the date hereof. 2. Assumption by Assignee. By execution hereof, Assignee hereby assumes and agrees to perform all duties, obligations and responsibilities of Assignor under or in connection with the Assigned Accounts. 3. Successors. This Assignment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 4. Assignor's Representation. Assignor has not previously signed, conveyed or hypothecated any portion of its right, title or interest in and to the Assigned AR or the Assigned Accounts. Applicable Law. This Assignment shall be interpreted and construed in accordance with the laws of Pennsylvania. 6. Effective Date. This Assignment shall be effective upon the parties execution hereof. Assignor acknowledges it has not received any payment on Assigned Accounts on or after January 1, 2010. 7. Indemnification. Assignor does hereby indemnify and hold harmless Assignee, including attorney's fees, from any claims, by the Assigned Accounts for claims arising prior to the effective date of this Assignment. Assignee does hereby indemnify and hold harmless Assignor, including attorney's fees, for claims by the Assigned Accounts arising on or after the effective date of this Assignment. IN WITNESS WHEREOF, the parties hereto have affixed their hands and seals on the day and year first above written. WITNESS: By: WITNESS: :47958Ov4 M' haels & Associates, P.C. ASSIGNEE: Health Care Professional Management Services, Ltd. Ay- tee E. Ca , Presideid CERTIFICATE OF SERVICE I, Julieanne Ametrano, Legal Assistant with the law office of Cunningham & Chernicoff, P.C., hereby certify that a true and correct copy of the PETITION TO SUBSTITUTE TRANSFEREE AS PLAINTIFF PURSUANT TO PA.R.C.P. 2004 has been served by depositing same in first class U.S. Mail on the following parties indicated: Neil A. Slenker, Esquire Stock & Leader,P.C. 6' Floor, 221 West Philadelphia Street York, PA 17404 Counsel for Defendant Date: r - ,? 1 .2013 CUNNINGHAM & CHERNICOFF, P.C. By: (L"Z4? T Ametrano :h Second Street PA 17110 (717) 238-6570 F:\Home\BJW\DOCS\CAVANAUGH.LEE\Smitb Maaon Family Piaetiee\Rule 2004 Petition.wpd