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HomeMy WebLinkAbout14-3671 Supreme Court of Pennsylvania Court of Common, Pleas For Prothonotary Use Only: Civil"Cover Sheet Docket No: CUMBERLAND County The it?fortnation collected on this form is used solely for court administration purposes. This form does not supplement or replace thefling and service of'pleadings or other papers as required by lair or rules of court. Commencement of Action: S 0 Complaint [7 Writ of Summons Petition Transfer from Another Jurisdiction 0 Declaration of Taking E C, Lead Plaintiff's Name: Lead Defendant's Name: Opus Surgical, LLC S1 Spine, LLC T Dollar Amount Requested: Mwithin arbitration limits I Are money damages requested? ED Yes 0 No (check one) ©x outside arbitration limits O N Is this a Class Action Suit? M Yes [E No Is this an MDJAppeal? Yes M No A Name of Plaintiff/Appellant's Attorney: Alan R. Boynton, Esq. and Dana W. Chilson, Esq. ::It cl here if you have no a€tt€rr»rev(tare:a Scl ISE Ittesentcd [Pro sel Liti-ant) Nature of the Case: Place an"X"to the left of the ONE case category that most accurately describes your PRIMARY CASE. If you are making more than one type of claim, check the one that you consider most important. TORT(do not include Mass Tort) CONTRACT(do not include Judgments) CIVIL APPEALS Intentional Buyer Plaintiff Administrative Agencies Malicious Prosecution Debt Collection:Credit Card F1 Board of Assessment rl Motor Vehicle rl Debt Collection: Other ❑ Board of Elections rl Nuisance f7 Dept.of Transportation F1 Premises Liability Statutory Appeal:Other S F1 Product Liability (does not include Employment Dispute: E mass tort) © Slander/Libel/Defamation Discrimination C ® Other: E] Employment Dispute:Other Zoning Board T © Other: I ©x Other: O MASS TORT Breach of Contract 0 Asbestos N M Tobacco E] Toxic Tort-DES El Toxic Tort-Implant REAL PROPERTY MISCELLANEOUS Toxic Waste ® Other: � Ejectment ® Common Law/Statutory Arbitration B Eminent Domain/Condemnation F] Declaratory Judgment El Ground Rent E] Mandamus 0 Landlord/Tenant Dispute Non-Domestic Relations 0 Mortgage Foreclosure:Residential Restraining Order PROFESSIONAL LIABLITY El Mortgage Foreclosure:Commercial El Quo Warranto M Dental E] Partition D Replevin © Legal rl Quiet Title Other: rl Medical E] Other: 0 Other Professional: Updated 1/1/2011 k Alan R. Boynton, Jr. �' T f ' Attorney I.D. No. 39850 Dana W. Chilsonu`'I'y ! 1� T' f', JLr`I°, g Attorney I.D. No. 208718 McNees Wallace& N urick LLC 717-232 8000 t PENNS YL V ° Y OU,IT P.O. Box 1166 Hafrisburg, PA 17108-1166 Attorneys for Plaintiff Opus Surgical, LLC OPUS SURGICAL, LLC, IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENN YLVANIA V. : CASE NO. H- 3V ) �U�l S 1 SPINE, LLC, Defendant CIVIL ACTION NOTICE 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, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT�AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 32 S. Bedford Street Carlisle, Pennsylvania 717-249-3166 36? ysY � h r Respectfully submitted, r McNees Wallace & Nurick LLC 6y Alan R. Boynteffi, Jr. Attorney ID No. 39850 Dana W. Chilson Attorney ID No. 208718 100 Pine Street P. O. Box 1166 I f Harrisburg, PA 17108-1166 Phone: (717) 232-8000 Attorneys for Plaintiff Opus Surgical, LLC Dated: June 17, 2014 1 i 1_ Alan R. Boynton, Jr. Attorney I.D. No. 39850 Dana W. Chilson Attorney I.D. No. 208718 McNees Wallace & N urick LLC 100 Pine Street 717-232-8000 P.O. Box 1166 Harrisburg, PA 1 71 08-1 166 Attorneys for Plaintiff Opus Surgical, LLC OPUS SURGICAL, LLC, IN THE COURT OF COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. CASE NO. S1 SPINE, LLC, Defendant CIVIL ACTION COMPLAINT Plaintiff Opus Surgical, LLC, by and through its undersigned counsel, hereby files this Complaint against Defendant S1 Spine, LLC, and in support thereof avers as follows: FACTUAL BACKGROUND A. The Parties and Venue 1. Plaintiff Opus Surgical, LLC ("Opus") is a Pennsylvania limited liability company with a principal place of business located at 601 Southridge Drive, Mechanicsburg, Pennsylvania 17055. 2. Opus is in the business of selling medical devices to medical professionals, and is wholly owned by Robert and Caroline Antonelli. 3. Defendant S1 Spine, LLC ("Sl") is a Pennsylvania limited liability company with a registered address of 4001 1 st Avenue, Lafayette Hill, Pennsylvania 19444. 4. Venue is proper in this Court pursuant to Pa.R.C.P. 2179(a)(3) and (4). e t—. B. The Relationship Between Opus and S1 5. Robert Antonelli has been in the business of selling medical products to physicians since 1992. 6. Between October 2004 and January 2010, Robert Antonelli was a principal for L5 Surgical, which distributed products for Globus Medical Co. 7. In January 2010, Robert Antonelli left Globus and began compliance with a one year noncompetition agreement with Globus. 8. In September 2010, a court determined that the noncompetition agreement with Globus was no longer enforceable. Contemporaneously therewith, Robert and Caroline Antonelli formed Opus. 9. In or about October 2010, S1 approached Opus and proposed that Opus sell medical products for S1. Pursuant to the proposed arrangement, Opus would keep 80% of the monies collected from vendors and hospitals from sales of products, and S1 would keep 20% of the proceeds. S1 proposed handling contract negotiations with vendors, billing and invoicing vendors and hospitals, and collecting all monies due. 10. Upon information and belief, S1 sought to engage Antonelli to take advantage of his contacts in the spinal surgery field, especially with Dr. Steven Wolf("Dr. Wolf') at Holy Spirit Hospital and Dr. Stan Grabias ("Dr. Grabias") at Reading Hospital, and to gain entry into the market for the sale of spinal products to medical professionals. 11. Opus initially agreed to the approach proposed by S1 and the parties proceeded under an independent contractor relationship consistent with the approach proposed by S1 for a period of three months. 12. In January 2011, the parties renegotiated the arrangement. It was orally agreed to establish an annual management fee of$225,000, to be paid to S1 on a monthly basis of$18,750 per month. S1 agreed to continue to handle Opus' billing processes, to 2 Y ' purchase and pay for products acquired from third party vendors and sold by Opus, to handle collections of account receivables, and to negotiate and manage third party vendor, contracts. 13. Under the revised agreement, after payment of(1) the monthly management fee of$18,750 to S1, and (2) the costs of products sold by Opus, S1 would pay to Opus 100% of all remaining sums. Opus would also be paid any commissions paid by third party vendors for the sale of their products by Opus. 14. As with the initial agreement, Opus remained an independent contractor and the parties did not execute noncompetition or nondisclosure agreements. 15. The parties complied with the terms of the revised agreement from February 2011 through November 2013. 16. The relationship between S1 and Opus during this period was as independent contractors, with no rights of exclusivity, no limitations on termination, and no obligations other than as described above. 17. Although an independent contractor, S1 served as Opus' agent in S1's performance of its management agreement obligations, particularly in its interactions with Opus' vendors and Opus' clients, including Reading Hospital, Holy Spirit Hospital, and Dr. Wolf. In these interactions, then, S1, had a fiduciary duty to act in the best interest of Opus and to not undermine Opus' relationships with its clients. C. 4Web 18. In early 2013, Opus became familiar with 4Web, a Texas-based manufacturing company owned by Jessee Hunt. 19. 4Web manufactures advanced medical devices and was interested in selling its products in central Pennsylvania. 3 rti e 1� 20. Opus believed that 4Web's products were attractive and decided to sell them to physician clients of Opus. 21. To effectuate the arrangement, and because S1 was handling Opus' purchases from third party vendors, Opus introduced 4Web to S1. 22. Shortly thereafter, Opus began to sell 4Web's products and S1 handled the billings and collections relating to Opus' sale of 4Web's products. 23. Opus sold 4Web products to Holy Spirit Hospital at what Opus believed was a market appropriate price. It advised S1 of the price. 24. Consistent with the terms of the revised agreement, when Opus sold 4Web products, S1 collected payment from the applicable buyer (Holy Spirit Hospital) and paid 4Web for the cost of its products from this payment. S1 then paid Opus the difference. 25. Opus had no agreement of with, or obligations to, 4Web. 26. At some point in mid 2013, but unbeknownst to Opus, S1 entered into a written contract directly with 4Web ("the S1/4Web Agreement"). 27. To date, Opus has not been provided a copy of the S1/4Web Agreement. 28. Upon reasonable belief, the S1/4Web Agreement confirmed that S1 was a distributor of 4Web products, specifically for the 4Web ALIF Truss device and the 4Web Cervical Truss device. 29. Upon reasonable belief, but unknown to Opus until December 2013, 4Web and S1 agreed that S1 would not charge more than $4,050 for the sale of 4Web's ALIF Truss device and no more than $1,000 for 4Web's Cervical Truss device. 30. Prior to entry into the S1/4Web Agreement, S1 knew that Opus had been selling 4Web's products for considerably more than was agreed to by S1 and 4Web but continued to bill and collect payment from Holy Spirit Hospital at a price higher than S1 and 4Web had agreed to charge. 4 o � f- 31. Neither S1 nor 4Web informed Opus of their agreement or of the pricing limitations relating to the ALIF Truss device and the 4Web Cervical Truss device. 32. Opus had no agreement with S1 which in any way limited the amounts which Opus could charge for the sale of products to any purchaser. 33. Without knowledge of any cap on what could be charged by it, Opus continued to charge $8,900 for the 4Web ALIF Truss device and $2,450 for the 4Web Cervical Truss device, which Opus believed to be the fair market value for those products. I 34. S1, which did know about the billing restriction, nevertheless billed Opus client Holy Spirit Hospital, which purchased the 4Web products, $8,900 for the ALIF product r and $2,450 for the Cervical product sold by Opus. D. S1's Unilateral Change to the Agreement 35. In the fall of 2013, S1 insisted on renegotiating the terms of the revised agreement, particularly in relation to Opus sales to Holy Spirit Hospital. 36. Under the new arrangement proposed by S1, S1 would continue to provide management services to Opus. However, it would reduce its monthly management fee by 50% and Opus would no longer receive all of the monies collected from vendors and Holy Spirit Hospital. Instead, Opus would receive only a 20% commission, with S1 keeping 80% of all sums received beyond the costs of the products. i 37. Since acceptance of the terms proposed by S1 would result in an estimated 60% decrease in revenues to Opus, Opus initially declined to renegotiate the agreement. 38. On November 20, 2013, S1 reiterated its demand that Opus accept the f changes to the compensation structure, and stated that the change would occur effective December 1, 2013. 39. When Opus did not respond to S1's demand to change the terms of the Agreement, S1 called a meeting on November 27, 2013 at Holy Spirit Hospital. During that 5 i 4 n r'. meeting, S1 personnel made clear that Opus had no choice but to accept the new arrangement because "the leverage had shifted" with Mr. Antonelli's contacts at Holy Spirit Hospital, that S1 now had the leverage in the relationship, and that S1 could squeeze out Opus if it so desired. 40. Subsequent to the November 27, 2013 meeting, Opus learned that S1 had been maneuvering to transfer all of the Holy Spirit Hospital work to S1 through a family relationship between a direct employee of S1, who was Dr. Wolfs son. 41. Upon information and belief, S1 also made a financial proposal to Dr. Wolf which would allow him to considerably increase his revenues if it dealt directly with S1 and eliminated his relationship with Opus. 42. When Opus had still not accepted the revised terms, on December 16, 2013, S1 informed Opus that S1 was not able to pay Opus for its November 2013 fees, which amounted to $194,597. 43. Opus believed that S1 was refusing payment until Opus confirmed its acceptance of the modified revised agreement and, on December 17, 2013, despite his reservations regarding the new terms, Mr. Antonelli conveyed Opus' consent to the new payment proposal. 44. Confirming Opus' belief as to the reasons for the delay in payment, on the same day that Opus agreed to modify the Agreement, S1 issued a check for the full amount of the November 2013 commissions and sent it to Opus. 45. Opus received the S1 check on Friday, December 20, 2013 and deposited the check on the next business day, Monday, December 23, 2013. E. 4Web's Relationship With S1 46. In mid-December 2013, Opus, through a happenstance conversation with the President of 4Web, learned of the existence of the S1/4Web Agreement and, in particular, 6 k- r , the cap on the price to Holy Spirit Hospital for the ALIF Truss device and the 4Web Cervical Truss device. 47. To avoid complicity in a potential breach of contract, Opus promptly informed 4Web that it was not aware of the cap and had been charging Holy Spirit Hospital what it believed to be the fair market value of the products. 48. Upon information and belief, in mid December 2013, 4Web conducted an investigation and determined the full extent of S1's breach. 49. Upon information and belief, on December 30, 2013, 4Web informed S1 that it was terminating the S1/4Web agreement. 50. On December 30, 2013, without any reason or notice to Opus, but upon receiving notice of termination from 4Web, S1 put a stop payment on the check which it had sent to Opus. 51. On December 31, 2013, S1 sent a letter to Opus brazenly blaming it for 4Web's termination, even though Opus was not even aware of the S1/4Web Agreement and even though S1 had for a number of months billed Hol Spirit Hospital for an amount 9 Y p p directly and knowingly in breach of the S1/4Web Agreement. F. Opus' Termination of the Agreement 52. In light of S1's actions in stopping payment of the November 2013 commissions, making false allegations relating to S1's breach of its agreement with 4Web, and aggressively interfering with Opus' relationships at Holy Spirit Hospital, Opus terminated its relationship with S1, effective December 31, 2013. 53. In addition to the November 2013 commissions, S1 has additionally failed to pay Opus its commissions for December 2013, which amount to $67,553. 7 z + 54. On January 3, 2014, Opus sent S1 a demand letter for payment of the November 2013 and December 2013 fees. A true and correct copy of the January 3, 2014 letter is attached hereto as Exhibit A. 55. In mid-January 2014, Opus learned that S1 falsely told 4Web that Opus knew of the contractual restriction regarding the ALIF Truss device and the Cervical Truss device, and that Opus was responsible for the breach of the agreement between 4Web and S1. 56. Upon information and belief, S1 made similar allegations to Dr. Wolf, with whom Mr. Antonelli previously had a longstanding, strong relationship. 57. Upon information and belief, S1 took further steps to interfere with and effectuate the termination of the relationship between Dr. Wolf and Opus. 58. Shortly thereafter, Dr. Wolf informed Opus that he was terminating his relationship with Opus and was switching all of his business to S1. 59. The loss of business with Dr. Wolf and Holy Spirit Hospital has resulted, and will result, in significant financial harm to Opus. COUNT BREACH OF CONTRACT 60. Plaintiff incorporates herein by reference paragraphs 1 through 59, above, as if set forth fully herein. 61. Pursuant to Pa.R.C.P. No. 1019(h), Opus bases this count on the terms of the oral revised agreement, as set forth above. 62. Pursuant to the terms of the revised agreement, S1 owes to Opus the sum of $262,150.00 for November 2013 and December 2013 commissions. 63. As set forth at length above, S1 has failed and refused to pay Opus its November 2013 and December 2013 commissions. 8 i r• 64. S1 has breached its contractual obligations to Opus by failing to pay Opus the sums due and owing to Opus pursuant to the revised agreement. 65. Opus has been damaged by S1's breach of its contractual obligations. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant S1 Spine, LLC in the sum of$262,150.00, an amount outside the court's compulsory arbitration limits, plus interest and costs as allowed by law. COUNT II UNJUST ENRICHMENT 66. Plaintiff incorporates herein by reference paragraphs 1 through 59, above, as if set forth fully herein. 67. As described more fully above, S1 has received from customers of Opus the sum of$262,150.00 beyond the costs of products sold by Opus and the management fee owed to S1 for November and December 2013. 68. As described more fully above, S1 has been unjustly enriched in the amount of $262,150.00. 69. S1 was aware of and fully recognized that it owed Opus the sum of$262,150.00 for November 2013 and December 2013 commissions. 70. S1 benefited from failing to pay Opus the sums due and owing to it. 71. S1 has been unjustly enriched from said benefit by not paying Opus the sums due and owing to it. 72. An inequity will result if S1 is not required by pay Opus the sums due and owing to it. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant S1 Spine, LLC and an award of damages in the sum of 9 V� f C ' f $262,150.00, an amount outside the court's compulsory arbitration limits, plus interest and costs as allowed by law. COUNT III TORTIOUS INTERFERENCE WITH CURRENT AND PROSPECTIVE CONTRACTUAL RELATIONS 73. Plaintiff incorporates herein by reference paragraphs 1 through 59, above, as if set forth fully herein. 74. Opus had a long standing relationship with Dr. Wolf, in which Opus would sell, and Dr. Wolf and Holy Spirit Hospital would purchase, medical equipment sold by Opus. 75. The relationship with Dr. Wolf existed long before any relationship between Opus and S1. 76. The aforesaid actions of S1, including, but not limited to, S1's negotiation, then willful breach, of the S1/4Web Agreement, S1's false and misleading statements to Dr. Wolf regarding Opus' sale of the the ALIF Truss device and the Cervical Truss device, together with S1's intentional and active undermining of the relationship even while being paid by Opus to provide management services to support the relationship between Opus and Dr. Wolf, constitute intentional and willful interference with Opus' current relationship with Dr. Wolf. 77. The aforesaid actions of S1 also constitute intentional and willful interference with Opus' prospective relationship with Dr. Wolf. 78. S1's actions were without justification or privilege. 79. As a result of S1's actions, Opus has been damaged, and will continue to be damaged, in that Opus will suffer lost revenue, profits, and customer goodwill. i 10 i 80. As a result of S1's actions, Opus has lost, and reasonably anticipates continued loss of, substantial revenues. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant S1 Spine, LLC, an award of damages in an amount outside the court's compulsory arbitration limits, an accounting of all funds paid by Holy Spirit Hospital to S1, an accounting of all funds paid by S1 and related entities to Dr. Wolf, plus interest and costs as allowed by law. COUNT IV DEFAMATION 81. Opus incorporates herein by reference paragraphs 1 through 59, above, as if set forth fully herein. 82. This claim is for defamation in violation of the common law of the Commonwealth of Pennsylvania and 42 Pa.C.S.A. § 8343. 83. The statements made by S1 to 4Web, Dr. Wolf, and Holy Spirit that Opus knew of the S1/4Web contractual restriction regarding the ALIF Truss device and the Cervical Truss device, and that Opus was responsible for S1's breach of the arrangement between 4Web and S1, were objectively false and defamatory in nature. 84. S1 made these statements to Holy Spirit, 4Web, and/or Dr. Wolf. 85. The defamatory statements were not true, privileged, or a matter of public concern. 86. These defamatory statements caused substantial harm to the reputation of Opus among Dr. Wolf and 4Web. 87. These defamatory statements directly resulted in the termination of Opus' relationship with at least Holy Spirit and Dr. Wolf. 11 y 88. As a result of S1's actions, Opus has been damaged, and will continue to be damaged, in that Opus will suffer lost revenue, profits, and customer goodwill. 89. As a result of S1's actions, Opus reasonably anticipates continued loss of substantial revenues for an extended period of time. f WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant S1 Spine, LLC and an award of damages in an amount outside the court's compulsory arbitration limits, plus interest and costs as allowed by law. COUNT V BREACH OF FIDUCIARY DUTY 90. Opus incorporates herein by reference paragraphs 1 through 59, above, as if set forth fully herein. 91. S1, as Opus' agent under the terms of the revised agreement, owed a fiduciary duty to Opus to not undermine its relationship with its customers and clients. 92. S1, while performing its obligations under the revised agreement, intentionally sought to, and succeeded in, undermining and interfering with Opus' relationship with Holy Spirit Hospital and Dr. Wolf. i 93. S1's objective in undermining the relationship between Opus and Holy Spirit and Dr. Wolf was to appropriate that relationship and to attain revenues which would otherwise have been earned by Opus. 94. S1's conduct was successful in getting Holy Spirit and Dr. Wolf to terminate their relationship with Opus and to transfer all such work to S1. 95. S1's conduct constituted a breach of its fiduciary duty to Opus. 96. S1's breach of its fiduciary duty to Opus has caused, and will cause, significant damages to Opus. 12 i u WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant S1 Spine, LLC, and award damages in an amount outside the court's compulsory arbitration limits, plus interest and costs as allowed by law. COUNT VI BUSINESS DISPARAGEMENT 97. Opus incorporates herein by reference paragraphs 1 through 59, above, as if set forth fully herein. 98. The statements made by S1 to 4Web, Dr. Wolf and Holy Spirit that Opus knew of the S1/4Web contractual restriction regarding the ALIF Truss device and the Cervical Truss device, and that Opus was responsible for S1's breach of the arrangement between 4Web and S1, were objectively false and intended to harm Opus. 99. S1 made these statements to Holy Spirit, 4Web, and/or Dr. Wolf. 100. The statements were not true, privileged, or a matter of public concern. 101. These defamatory statements caused harm to the reputation of Opus among Dr. Wolf and 4Web. 102. These defamatory statements directly resulted in the termination of Opus' relationship with Holy Spirit and Dr. Wolf. 103. As such, S1 is liable for business disparagement in violation of the common law of the Commonwealth of Pennsylvania. 104. As a result of S1's actions, Opus has been damaged, and will continue to be damaged, in that Opus will suffer lost revenue, profits, and customer goodwill. 105. As a result of S1's actions, Opus reasonably anticipates continued loss of substantial revenues for an extended period of time. 13 2♦ WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant S1 Spine, LLC, an award of damages in an amount outside the } court's compulsory arbitration limits, plus interest and costs as may be allowed by law. MCNEES WALLACE & NURICK LLC B 0 Y Alan R. Boyntbfi, Jr. Attorney ID No. 39850 Dana W. Chilson Attorney ID No. 208718 100 Pine Street P. O. Box 1166 Harrisburg, PA 17108-1166 Phone: (717) 232-8000 Fax: (717) 237-5300 Attorneys for Plaintiff Opus Surgical, LLC Dated: June 17, 2014 14 s 4 VERIFICATION I hereby verify that I am a Member of Opus Surgical, LLC and am authorized to execute this verification on its behalf. I further verify that the facts contained in the foregoing Complaint are true and correct to the best of my information, knowledge, and belief and are made subject to the penalties of 18 Pa. C.S.A. §4904 relating to unsworn falsification to authorities. OPUS SURGICAL, LLC o ert Antonelli Dated: June , 2014 �....._._._.__..._ _........_.._..._ ................. _........... i 1� 3 _ I i i I i w � I i I I - I Exhibit A f t _i vMrNees Wallace & Nurick Lac ALAN R.BOYNTON,JR. 100 Pine Street o PO Box 1166-Harrisburg,PA 17168-1166 DIRECT DAA::717) 60-16 52 DIRECT FAX:(717)260-1665 Tel: 717,232.80013 e Fax: 717.237.5300 E-MAIL ADDRESS:A130YNTONa@MWN.COM January 3, 2014 David P. Heim, Esq. BOCHETTO & LENTZ, P.G. 1524 Locust Street Philadelphia, PA 19102 Re: S 1 Spine LLC and Opus Surgical, LLC; Past Due Commissions Dear Mr. Heim: As you know, this office is counsel to Opus Surgical, LLC ("Opus"). We are writing to you regarding the amounts due and owing by S 1 Spine, LLC ("S 1 Spine") to Opus. Pursuant to'the arrangement between the parties, S 1 Spine owes Opus $213,347 in commissions for November 2013. After subtracting S 1 Spine's management fee of$18,750, Opus is owed $194,597. On December 17, 2013, S 1 Spine issued to Opus check number 3010 in the amount of$194,597, but put a stop payment on the check on December 30, 2013. Although my client contacted S 1 Spine - several times in regard to the stop payment, S 1 Spine failed to respond to my client's communications. As such, Opus is stilled owed $194,597 for the November 2013's commissions. Based upon S 1 Spine's conduct, Opus terminated the agreement between the parties effective December 30, 2013. S 1 Spine thus also owes Opus $67,553 in commissions for December 2013. Please note that the December 2013 commission total is after the deduction of S 1 Spine's management fee of$9,375, which went into effect December 1, 2013 pursuant to S 1 Spine's directive. In all, S 1 Spine owes Opus $262,150. S 1 Spine has failed to pay Opus the sums owed to it. As such, please be advised that if this account is not brought current within ten (10) days from the date of this letter, Opus will have no choice but to consider formal legal action against S 1 Spine. Any legal action against S 1 Spine will seek not only the principal sum due and owing, but also interest and costs as allowed by law. While Opus would prefer to amicably resolve this matter, it will not refrain from using all the resources at its disposal to collect the aforementioned amounts. www.mwn.com HARRISBURG, PA .• LANCASTER, PA SCRANTON, PA • STATE COLLEGE, PA • COLUMBUS, OH • WASHINGTON, DC 10 a David P. Heim,.Esq. January 3, 2014 Page 2 If you wish to discuss this matter, please feel free to contact me at the above- referenced number. Sincerely, McNEES WALLACE & NURICK LLC By Alan R. Boynton, Jr. SHERIFF'S OFFICE OF CUMBERLAND COUNTY Ronny R Anderson Sheriff - vt,'Y 4irlbe,,, Jody S Smith ri 2: Chief Deputy 1 7 Richard W Stewart Solicitor CF Et,NSYLVAW OPUS Surgical, LLC Case Number vs. Si Spine, LLC 2014-3671 SHERIFF'S RETURN OF SERVICE 06/19/2014 Sheriff Ronny R Anderson, being duly sworn according to law, states he made diligent search and inquiry for the within named Defendant to wit: Si Spine, LLC, but was unable to locate the Defendant in the Sheriffs bailiwick.The Sheriff therefore deputizes the Sheriff of Montgomery, Pennsylvania to serve the within Complaint&Notice according to law. 07/14/2014 The requested Complaint& Notice served by the Sheriff of Montgomery County upon Shelia Hirach,who accepted for Si Spine, LLC, at 4001 1st Avenue, Lafayette Hill, PA 19444. Russell Bono, Sheriff, Return of Service attached to and made part of the within record. SHERIFF COST: $28.00 SO ANSWERS, July 14, 2014 RONNY R ANDERSON, SHERIFF 4a Srlf / f5 rt /'45 ,RIFF S OFFICE OF CUMBERLAND COUNTY Ronny R Anderson Sheriff Jody S Smith Richard W Stewart Chief Deputy Solicitor OPUS Surgical, LLC vs. Case Number S1 Spine, LLC 2014-3671 SERVICE COVER SHEET c‘EN S '�rlc t etaiis�'- e." � ' o Category: Civil Action -Complaint& Notice Zone: wManner: Deputize Expires: 07/18/2014 Warrant: Notes: v rn J Serve T° Final ery Served: PersonallyAdult In Charge • Posted hen = Name: S1 Spine, LLC g Other w Primary 4001 1st Avenue Adult In 5 I r� j ur Address: Lafayette Hill, PA 19444 Charge: `=Y� Q .. u- Phone: DOB: Relation: (F( f w Alternate —(L l z Address: Date: -t Time: HPhone: Deputy: t,�,j� Mileage: co c Attorney/Originator; Q Name: Alan R. Boynton, Jr. Phone: 717-237-5352 Service Attempts:• Date: n Time: ✓ Mileage: T N Deputy: I Notes/Special Instructions: _ :. Mfr_ in ill W S Now, June 19, 2014 I, Sheriff of Cumberland County, Pennsylvania do hereby deputize the Sheriff of r icri< memo wU ry County to execute service of the documents herewith and make return thereof according to law. *. '� a Return To: Q) ° Cumberland County Sheriff's Office v) One Courthouse Square Carlisle, PA 17013 Ronny R Anderson, Sheriff SIDNEY L. GOLD & ASSOCIATES, P.C. Sidney L. Gold, Esquire 1835 Market Street - Suite 515 Philadelphia, PA 19103 (215) 569-1999 OPUS SURGICAL, LLC, v. S 1 SPINE, LLC Plaintiff, Defendant. Attorneys for Defendant : COURT OF COMMON PLEAS : CUMBERLAND COUNTY . CIVIL TRIAL DIVISION : NO.: 14-3671 : JURY TRIAL DEMANDED NOTICE OF ENTRY OF APPEARANCE Kindly enter my appearance counsel for the Defendant in connection with the above captioned matter. By: DATED: July 25, 2014 SIDNEY L. GOLD & ASSOC., P.C. 7 IDNEY L. GOLD, ESQUIRE Attorney I.D. NO: 21374 1835 Market Street, Suite 515 Philadelphia, PA 19103 (215) 569-1999 Attorney for Defendant CERTIFICATE OF SERVICE I hereby certify that on this date I caused a true and correct copy of a Notice of Entry of Appearance to be served by United States Mail, First Class Service, properly addressed and postage prepaid, upon the following: Alan R. Boynton, Jr. Dana W. Chilson McNees Wallace & Nurick, LLC 100 Pine Street P.O. 1166 Harrisburg, PA 17108-1166 717-232-80001 Phone aboynton@mwn.com Attorneys for Plaintiff, Opus Surgical, LLC By: DATED: July 25, 2014 SIDNEY L. GOLD & ASSOC., P.C. IDNEY L. GOLD, ESQUIRE Attorney I.D. NO: 21374 1835 Market Street, Suite 515 Philadelphia, PA 19103 (215) 569-1999 Attorney for Defendant SIDNEY L. GOLD & ASSOCIATES, P.C. Sidney L. Gold, Esquire Neelima Vanguri, Esquire Valerie Weisman, Esquire 1835 Market Street - Suite 515 Philadelphia, PA 19103 (215) 569-1999 OPUS SURGICAL, LLC, v. S 1 SPINE, LLC Plaintiff, Defendant. THIS IS NOT AN ARBITRATION MATTER, THIS IS A MAJOR JURY TRIAL Attorneysf `Dfendant COURT OF COMMON PLEAS CUMBERLAND COUNTY CIVIL TRIAL DIVISION . NO.: 14-3671 JURY TRIAL DEMANDED STIPULATION TO EXTEND TIME It is hereby STIPULATED AND AGREED, by and between counsel for the Plaintiff, Alan R. Boynton, Jr., Esquire and counsel for the Defendant, Sidney L. Gold, Esquire that the Defcridant has an extension of time until Monday, August 25, 2014, to file a responsive pleading in resp nse ;rs to Plaintiff's Civil Action Complaint filed on June 19, 2014. By: Alan R. Boynton,/, Esqui Dana W. Chilson, Esquire 100 Pine Street P.O. 1166 Harrisburg, PA 17108-1166 215) 232-8000 Attorney for Plaintiff Dated: .0 Qci plies PeLu t $/ %1Y Sidney L. Gold & Assoc., P.C. By: Sidney L. Gold, Esquire Neelima Vanguri, Esquire Valerie Weisman, Esquire 1835 Market Street, Suite 515 Philadelphia, PA 19103 (215) 569-1999 Attorneys for Defendant 00 xi) L- r�> xs tT1-- rn CD --t C) -t , CD- 7 TO: Plaintiff You are hereby notified to plead to the within Preliminary Objections within twenty (20) days from service hereof or a deJilt judgment may be entered against you. SIDNEY L. GOLD & ASSOCIATES, P.C. Sidney L. Gold, Esquire 1835 Market Street - Suite 515 Philadelphia, PA 19103 (215) 569-1999 OPUS SURGICAL, LLC, V. Si SPINE, LLC Attorneys for Defendant • • COURT OF COMMON PLEAS Plaintiff; • ▪ CUMBERLAND COUNTY Defendant. C") :▪ •'., -0 .... -.. rnCt rn ▪ ni — CIVIL TRIAL DIVISION ._(.1<'.. NO.: 14-3671 r - JURY TRIAL DEMANDEf) r -- PRELIMINARY OBJECTIONS OF DEFENDANT Si SPINE, LLC TO THE COMPLAINT OF PLAINTIFF OPUS SURGICAL, LLC Pursuant to Pennsylvania Rule of Civil Procedure 1028(a), Defendant Si Spine, LLC ("Sl"), by and through its undersigned counsel, Sidney L. Gold & Associates, P.C., hereby asserts these preliminary objections to the Complaint filed by Plaintiff Opus Surgical, LLC ("Opus"). In support of its preliminary objections, Si states as follows: I. RELEVANT BACKGROUND 1. On June 19, 2014, Opus Surgical, LLC ("Opus") filed a Complaint against Defendant S1 in the Court of Common Pleas of Cumberland County. 2. In its Complaint, Opus describes the business relationship between SI and Opus. (See Plaintiff's Complaint attached hereto and marked as "Exhibit A."). 3. S1 and Opus were engaged in an independent contractor relationship. (See Exhibit A at ¶¶ 11, 14 and 16). 4. Opus asserts causes of action against S1 for Breach of Contract (Count I), Unjust Enrichment (Count II), Tortious Interference with Current and Prospective Contractual Relations (Count III), Defamation (Count IV), Breach of Fiduciary Duty (Count V), and Business Disparagement (Count VI). (See Exhibit A). 5. As set forth in detail below, S 1's preliminary objections to Counts III, IV, V, and VI of Opus' Complaint should be sustained pursuant to Pennsylvania Rule of Civil Procedure 1028(a). II. PRELIMINARY OBJECTIONS A. Preliminary Objections to Count III of Plaintiff's Complaint Pursuant to Pa.R.Civ.P. 1028(a)(4) - Legal Insufficiency of a Pleading 6. Si incorporates by reference paragraphs 1 through 6 as if fully set forth herein. 7. Preliminary Objections should be sustained pursuant to Pennsylvania Rule of Civil Procedure 1028(a)(4) where the Complaint fails to state a claim upon which relief can be granted. See Tucker v. Philadelphia Daily News, 757 A.2d 938, 941-42 (Pa. Super. 2000). 8. Under Pennsylvania law, if the complaint indicates on its face that the claim is legally insufficient and that the law will not permit recovery, the court must sustain the demurrer. Hydrair, Inc. v. National Environmental Balancing Bureau, 2000 Phila. Ct. Com. Pl. LEXIS 72, *3 (Phila. Ct. Corn. Pl. July 27, 2000), citing Pa. R.C.P. 1028(a); Smith v. Wagner, 588 A.2d 1308, 1310 (Pa. Super. Ct. 1991). 9. In the instant matter, Opus has failed to allege sufficient facts to make out a claim based on Tortious Interference with Current Contractual Relations as set forth in Count III of its Complaint. 10. The elements of a cause of action for Tortious Interference with Current Contractual Relations are: (1) the existence of a contractual relation between the complainant and a third party; (2) purposeful action on the part of the defendant, specifically intended to harm the existing relation; (3) the absence of privilege or justification on the part of the defendant; and (4) the occasioning of actual legal damage as a result of the defendant's conduct. Pawlowski v. Smorto, 588 A.2d 36, 39-40 Pa. Super. (1991); See also Al Hamilton Contracting Co. v. Cowder, 434 Pa. Super. 491, 497 (1994). 11. The threshold question in an action for Tortious Interference with Current Contractual Relations is whether or not there was a contract. Id. 3 12. Opus' Complaint fails to allege the existence of a contract between Dr. Wolf and Opus. 13. Therefore, the Complaint has not stated a claim upon which relief can be granted with respect to Tortious Interference with Current Contractual Relations and Defendant's preliminary objections must be sustained. Rutherfoord v. Presbyterian - University Hospital, 417 Pa. Super. 316, 332, (1992) (stating that the existence of a contractual relationship between the plaintiff and a third person is an essential element of tortious interference). WHEREFORE, S1 respectfully requests that the Court sustain its preliminary objection and dismiss Count III of Opus' Complaint with prejudice. herein. B. Preliminary Objections to Count III of Plaintiff's Complaint Pursuant to Pa.R.Civ.P. 1028(a)(3) - Factual Insufficiency of a Pleading 14. S1 incorporates by reference paragraphs 1 through 13 as if fully set forth 15. The Pennsylvania Rules of Civil Procedure allow a party to file Preliminary objections based upon insufficient specificity in a pleading. Pa.R.Civ.P. 1028(a)(3). 16. Rule 1019(a) requires that the complaint synopsize the essential facts to support the claim. Krajsa v. Keypunch, Inc., 424 Pa. Super. 230, 235 (1993) (recognizing that "liberal construction" of the Rules of Civil Procedure does not entail total disregard of those rules concerning pleading). 4 17. Opus' allegations do not include a sufficiently specific description of those acts which Plaintiff claims support its claim for Tortious Interference with Current and Prospective Contractual Relations. 18. The elements of a cause of action for Tortious Interference with Current Contractual Relations are: (1) there is an existing contractual relationship between the plaintiff and a third party; (2) the defendant interfered with the performance of that contract by inducing a breach or otherwise causing the third party not to perform; (3) the defendant was not privileged to act in this manner; and (4) the plaintiff suffered pecuniary loss as a result of the breach of contract. Al Hamilton Contracting Co., 434 Pa. Super. at 497. 19. Opus' Complaint fails to allege facts to support its claim that Opus was entitled by contract to the benefit of Dr. Wolf's business in that the Complaint does not allege that there was a contract between Opus and Dr. Wolf. 20. To set forth a legally sufficient cause of action for Tortious Interference with Prospective Contractual Relations, the following elements must be pled: (1) the existence of a prospective contractual relation between the complainant and a third party: (2) purposeful action on the part of the defendant, specifically intended to prevent a prospective relation from occurring; (3) the absence of privilege or justification on the part of the defendant; and (4) the occasioning of actual legal damage as a result of the defendant's conduct. Id. 5 21. Opus' Complaint does not include sufficient factual allegations to support its claim for Tortious Interference with Prospective Contractual Relations since it only asserts conclusory statements with vague and uncertain suggestions that S1 engaged in some harmful act. 22. By way of example, the Complaint claims that "upon information and belief' S1 "took further steps to interfere with and effectuate the termination of the relationship between Dr. Wolf and Opus," yet Opus fails to state any factual circumstances to support these allegations. (Exhibit A at ¶57). 23. Similarly, the Complaint claims that "upon information and belief' Defendant "made similar allegations to Dr. Wolf' relating to an alleged breach of contract between 4Web and Sl. (Exhibit A at ¶56). 24. Additionally, Opus alleges that, "upon information and belief," 51 made a "financial proposal" to Dr. Wolf to cause him to cease business dealings with Opus. (Exhibit A at ¶41). 25. None of the aforesaid acts are described with any degree of certainty or detail and are merely conclusions without any basis in fact. 26. Accordingly, for all the above reasons, Opus' Complaint with respect to its claim of Tortious Interference with Current and Prospective Contractual Relations is factually deficient. 6 WHEREFORE, S1 respectfully requests that the Court sustain its preliminary objection and dismiss Count III of Opus' Complaint with prejudice. C. Preliminary Objections to Count IV of Plaintiffs Complaint Pursuant to Pa.R.Civ.P. 1028(a)(3) - Factual Insufficiency of a Pleading 27. S1 incorporates by reference paragraphs 1 through 26 as if fully set forth herein. 28. In Pennsylvania, "the pleadings must define the issues and thus every act or performance to that end must be set forth in the complaint." Estate of Swift by Swift v. Northeastern Hosp., 456 Pa. Super. 330 (1997). 29. Opus' allegations are factually insufficient as they do not set forth with adequate specificity the acts which allegedly support its claim for Defamation in Count IV. 30. A cause of action for defamation requires the pleader to state the following elements: (1) the defamatory character of the communication; (2) the communication's publication by the defendant; (3) its application to the plaintiff; (4) the understanding of the recipient of the communication's defamatory meaning; (5) the understanding of the recipient that the communication as intended to be applied to the plaintiff; (6) special harm resulting from the communication's publication; and (7) abuse of a conditionally privileged occasion. Jaindl v. Mohr, 432 Pa.Super. 220, 229 (1994), affd, 541 Pa. 163, (1995) (citation omitted). 7 31. Generally, Pennsylvania Rule of Civil Procedure 1019 sets forth the requirements for the contents of pleadings. That rule provides in pertinent part: "(a) The material facts on which a cause of action or defense is based shall be stated in a concise and summary Form. (b) Averments of fraud or mistake shall be averred with particularity. Malice, intent, knowledge, and other conditions of mind may be averred generally.... (f) Averments of time, place, and items of special damage shall be specifically stated." 32. However, in a defamation action, the pleading standard is stricter. The complaint on its face must specifically identify what allegedly defamatory statements were made by whom and to whom. Smith v. School District of Philadelphia, 112 F. Supp. 2d 417, 429 (E.D.Pa. 2000); Jaindl, 432 Pa. Super. at 229. 33. Defamation allegations are subject to dismissal if the complaint fails to provide the requisite specificity. See Moses v. McWilliams, 379 Pa. Super. 150, 170, (1988); Kryeski v. Schott Glass Technologies. Inc., 9 Pa. D. & C. 4th 399, 410 (Lacka. Co. 1991) (defamation averments which do not specifically identify "what was said" and "when it was said" lack sufficient specificity under Moses). 34. In its Complaint, Opus fails to specifically allege the identities of the particular individuals who it claims made defamatory statements, and also fails to allege the identities of the particular individuals to whom they were made. 35. The Complaint merely alleges that "Sl" told "4Web" that Opus was responsible for the breach of agreement between 4Web and Sl, and that "S 1" made some defamatory remark to "Holy Spirit" as well. (Exhibit A at ¶¶ 55, 83, 84 and 87). 8 36. A corporation is a creature of legal fiction which can "act" only through its officers, directors and other agents. Daniel Adams Associates, Inc. v. Rimbach Pub., Inc., 360 Pa. Super. 72, 79 (1987). 37. By omitting the specific officers, directors, or agents of S1 who allegedly conveyed defamatory messages, the Plaintiff has failed to plead with adequate specificity. 38. Similarly, the Complaint omits which officers, directors, or agents of 4Web or Holy Spirit allegedly received the said messages. 39. Furthermore, with respect to the defamatory remarks allegedly made by "Sl" to Dr. Wolf, the specificity is also lacking since Opus merely alleges that "Sl" made "similar allegations" to Dr. Wolf. (Exhibit A at ¶ 56). 40. Opus makes the bald assertion that defamatory statements were made by S1 to Holy Spirit, yet fails to assert a single fact relating to this claim. (Exhibit A at ¶¶ 83, 84 and 87). 41. Additionally, while Opus alleges S 1's defamatory statement was made to "4Web" in "mid-January 2014," it fails to allege when any such comment was made to Dr. Wolf or Holy Spirit. 42. The Complaint further lacks the factual specificity required to support a claim that Opus' reputation was actually impacted by the alleged defamatory comments with respect to Holy Spirit or 4Web, or that any damage at all was suffered as a direct result of S1's alleged defamatory remarks to Holy Spirit or 4Web. 9 43. Based on the foregoing, Opus has failed to plead sufficient facts to set forth a claim for defamation. WHEREFORE, S1 respectfully requests that the Court sustain its preliminary objection and dismiss Count IV of Opus' Complaint with prejudice. herein. D. Preliminary Objections to Count V of Plaintiff's Complaint Pursuant to Pa.R.Civ.P. 1028(a)(4) - Legal Insufficiency of a Pleading 44. S1 incorporates by reference paragraphs 1 through 43 as is fully set forth 45. In Count V of its Complaint, Opus purports to allege a cause of action against S1 for breach of fiduciary duty. 46. While Opus asserts numerous times that the relationship that existed between Opus and S1 was that of independent contractors, it additionally alleges that Si was an agent of Opus, and accordingly owed a fiduciary duty to Opus. (Exhibit A at ¶¶ 11, 14, 16, and 17) 47. Inasmuch as Opus and S1 had independent contractor relationships with one another, Opus' claim that S1 breached its fiduciary duty to Opus fails as a matter of law, as no fiduciary duty existed. Further, Opus fails to plead sufficient facts to establish that S1 was, in fact, Opus' agent. 48. In order for a fiduciary duty to exist between two entities, the party asserting that such a duty exists, must prove that there is an agency relationship between the parties. Scott v. Purcell, 415 A.2d 56, 61 n. 8 (Pa. 1980). 10 49. Not every act that one party may take on another's behalf, however, gives rise to an agency relationship. Basile v. H&R Block, 761 A.2d 1115 (Pa. 2000). Specifically, "[t]he special relationship arising from an agency agreement, with its concomitant heightened duty, cannot arise from any and all actions, no matter how trivial, arguably undertaken on another's behalf Rather, the action must be a matter of consequence or trust, such as the ability to actually bind the principal or alter the principal's legal relations." Id. at 1121. 50. Other than simply stating that S1 is an agent of Opus, Opus has failed to plead any facts to demonstrate that S1 was in a position of power great enough to bind Opus in any legal relations or relationships with third parties. 51. S1 and Opus had an independent contractor relationship, and as such, had an arm's length relationship with one another. See In re Anonymous No. 140 D.B 89, 1993 Pa. LEXIS 374 at 8-9 (1993) (stating that "`arms -length' transactions can be entered into by ...independent contractors..."). "An arms -length transaction, by definition, is one wherein the parties thereto negotiate on equal footing or terms, neither party exercising control or undue influence on the other." Id. at 8. 52. Under Pennsylvania law, parties to contracts that are entered into at arms - length, such as the agreement entered into between Opus and Si, do not owe each other fiduciary duties absent a special relationship giving rise to a fiduciary duty. See Etoll, Inc. v. Elias/Savion Advertising, Inc., 811 A.2d 10, 22-23 (Pa. Super. Ct. 2002) (citing 11 Valley Forge Convention & Visitors Bureau v. Visitor's Servs., Inc., 28 F. Supp. 2d 947, 952-53 (E.D. Pa. 1998) ("if parties to routine arms length commercial transactions for the provision of needed goods or services were held to have a "special relationship," virtually every breach of such a contract would support a tort claim [for breach of fiduciary duty].")); see also Elliot v. Clawson, 204 A.2d 272, 273 (Pa. 1964) (no special relationship between parties to arms length business contract). 53. Further, "[a] confidential or fiduciary relationship does not exist merely because one party relies on and pays for the specialized skill or expertise of the other party. MRED General Partner, LLC v. Tower Economics Company, Inc., 2005 Phila. Ct. Com. Pl. LEXIS 124 at 5-6 (2005). 54. Opus does not, and cannot plead a "weakness, dependence, or trust, justifiably reposed" on S1 in the course of its contractual relationship with S 1, and accordingly cannot prove the existence of a fiduciary duty that either party had towards the other. Etoll, 811 A.2d at 23. 55. Accordingly, in light of the fact that the relationship between Opus and S1 was that of independent contractors and as such was an arms -length relationship, Count V of Opus' Complaint should be dismissed with prejudice pursuant to Pennsylvania Rule of Civil Procedure 1028(a)(4). WHEREFORE, S1 respectfully requests that the Court sustain its preliminary objection and dismiss Count V of Opus' Complaint with prejudice. 12 herein. E. Preliminary Objections to Count III of Plaintiffs Complaint Pursuant to Pa.R.Civ.P. 1028(a)(4) - Legal Insufficiency of a Pleading 56. S1 incorporates by reference paragraphs 1 through 55 as is fully set forth 57. Count V of Opus' Complaint alleges a tort cause of action against S 1. 58. Opus' tort claim is barred by the "gist of the action" doctrine because this claim arises solely from the contract between Opus and S1. 59. The "gist of the action" doctrine provides that "when a plaintiff alleges that the defendant committed a tort in the course of carrying out a contractual agreement, Pennsylvania courts examine the claim and determine whether the `gist' or gravemen of it sounds in contract or tort." Freestone v. New England Log Homes, Inc., 819 A.2d 550, 554 (Pa. Super. Ct. 2003) (quoting Yocca v. Pittsburgh Steelers Sports, Inc., 806 A.2d 936, 944 (Pa. Commw. Ct. 2002)). 60. Further, the "gist of the action" doctrine is designed to maintain the conceptual distinction between breach of contract and tort claims." Pennsylvania Manufacturers' Assoc. Ins. Co. v. L.B. Smith, Inc., 831 A.2d 1178, 1182 (Pa. Super. Ct. 2003) (quoting Etoll, Inc. v. Elias/Savion Advertising, Inc., 811 A.2d 10, 14 (Pa. Super. Ct. 2002)). 61. In determining whether a cause of action arising from a contractual relationship can be maintained in tort, Pennsylvania courts have held that the "wrong ascribed to the defendant must be the gist of the action with the contract being collateral. 13 Redevelopment Authority of Cambria County v. Int'! Ins. Co., 685 A.2d 581, 590 (Pa. Super. Ct. 1996). 62. Here, Opus' tort claim is inextricably linked to the contract it had with S1 because its tort claims are based upon the same conduct that forms the basis for Opus' breach of contract claim. 63. Accordingly, in light of the fact that the "gist of the action" doctrine bars Opus' tort claim, Count V of Opus' Complaint should be dismissed with prejudice pursuant to Pennsylvania Rule of Civil Procedure 1028(a)(4). WHEREFORE, S1 respectfully requests that the Court sustain its preliminary objection and dismiss Count V of Opus' Complaint with prejudice. F. Preliminary Objections to Count VI of Plaintiffs Complaint Pursuant to Pa.R.Civ.P. 1028(a)(3) - Factual Insufficiency of a Pleading 64. S1 incorporates by reference paragraphs 1 through 63 as is fully set forth herein. 65. Opus alleges that S1 falsely told 4Web that Opus was responsible for breaching the agreement between 4Web and Sl. (Exhibit A at ¶ 55). 66. Opus further alleges that it suspects S1 made similar allegations to Dr. Wolf, and that S1 "took further steps to interfere with and effectuate the termination of the relationship between Dr. Wolf and Opus." (Exhibit A at ¶¶ 56 & 57). 67. Under Pennsylvania law, the tort for business disparagement requires the plaintiff to prove the existence of a disparaging statement along with the fact that: "(1) the 14 statement was false; (2) that the publisher either intends the publication to cause pecuniary loss or reasonably should recognize that publication will result in pecuniary loss; (3) that pecuniary loss does in fact result; and (4) that the publisher either knew that the statement is false or acts in reckless disregard of its truth or falsity." Hemispherx Biopharma, Inc. v. Manuel P. Asensio, Asensio & Company, Inc., 2002 Phila. Ct. Com. Pl. LEXIS 72, citing Pro Gold Mfg., Inc. v. Tribune Review Newspaper Co., 761 A.2d 553, 555-56 (Pa. Super. 2000) (citing Restatement (Second) of Torts § 623A (1977)). 68. Opus does not plead that it suffered any loss as a result of the alleged false statement that S1 made to 4Web. 69. Opus is unable to specify whether a disparaging statement was made to Dr. Wolf. 70. Opus is further unable to identify any steps that S1 took to interfere with and effectuate the termination of the relationship between Dr. Wolf and Opus. 71. Accordingly, in light of the fact that Plaintiff does not sufficiently plead the elements required for a claim of Business Disparagement, Count VI of Opus' Complaint should be dismissed with prejudice pursuant to Pennsylvania Rule of Civil Procedure 1028(a)(3). 15 WHEREFORE, S1 respectfully requests that the Court sustain its preliminary objection and dismiss Count VI of Opus' Complaint with prejudice. By: DATED: August 22, 2014 16 SIDNEY L. GOLD & ASSOC., P.C. SIDNEY L. GOLD, ESQUIRE Attrney I.D. NO: 21374 1835 Market Street, Suite 515 Philadelphia, PA 19103 (215) 569-1999 Attorney for Defendant VERIFICATION I, Sidney L. Gold, Esquire verify that I am the attorney for the Defendant, in this matter and that I am authorized to take this verification on behalf of the Defendant. I verify also that the facts stated in the attached Preliminary Objections are true and correct to the best of my information, knowledge and belief I understand that the statements herein are made subject to the penalties of 18 Pa. C.S. Section 4904, relating to unsworn falsification to authorities. SIDNEY L. GOLD & ASSOC., P.C. SI 1. ' EY L. GOLD, ESQUIRE Attorney for Defendant ,S1 Spine, LLC Dated: August 25, 2014 CERTIFICATE OF SERVICE I hereby certify that on this date I caused a true and correct copy of Defendant's Preliminary Objections to Plaintiff's Complaint to be served by e-mail and United States Mail, First Class Service, properly addressed and postage prepaid, upon the following: Alan R. Boynton, Jr. Dana W. Chilson McNees Wallace & Nurick, LLC 100 Pine Street P.O. 1166 Harrisburg, PA 17108-1166 717-232-80001 Phone aboynton@mwn.com Attorneys for Plaintiff, Opus Surgical, LLC By: DATED: August 25, 2014 SIDNEY L. GOLD & ASSOC., P.C. SID L. GOL i , " • IRE Attorney I.D. NO: 21374 1835 Market Street, Suite 515 Philadelphia, PA 19103 (215) 569-1999 Attorney for Defendant, S1 Spine, LLC S E C T I 0 N A S E c T 0 N Supreme Court. of. Pennsylvania Court cif. Cammonyleas • Civil Cover.Sh'A"eet CUMBERIANO County For Prothonotary Use Only: Petition Declaration of Taking Docket No: , 3 i 1 The information collected on this form is used solely for court udminis/ratitm purposes. This firm does nut xupplernma ur replace the lin and and service of pleaditt.s or other paperx as required b}• law or rules of court. Commencement of Action: Petition Declaration of Taking 0 Complaint 0 Writ of Summons ■ Q Transfer from Another Jurisdiction 0 Lead Plaintiffs Name:. Opus Surgical, LLC Lead Defendant's Name: Si Spine, LLC Are money damages requested? 0 Yes •© No Dollar Amount Requested: ❑within arbitration limits (check one) (outside arbitration limits Is this a Class Action Solt? 0 Yes 0 No Is this an MDJAppeal? ❑ Yes Q No Name of Plaintiff/Appellant's Attorney: Alan R. Boynton, Esq. and Dana W. Chilson, Esq. 0 Checlt here if yuu have no attorney (are a Sclf-Represcntl:d Pro Sci Litigant) Nature a the Case: Place an "X" to the left of the ONE case category thatmost.accuratrly descrihoc your PRIMARY CASE. Ifyou are making more than one type of claim, check the one that you consider most important. TORT (do not include Mass Tort) ❑ Intentional Q Malicious Prosecution ❑ Motor Vehicle ❑ Nuisance ❑ Premises Liability ❑ Product Liability (does not Include mass Tort) Slander/Libel/ Defamation Other. MASS TORT 0 Asbestos Q Tobacco ❑ Toxic Tort - DES ❑ Toxic Tort - Implant ❑ Toxic Waste ❑ Other: PROFESSIONAL LIABLITY ❑ Dental O Legal ❑ Medical ❑ Other Professional: CONTRACT (do not Include Judgments) 0 Buyer Plaintiff Q Debt Collection: Credit Card 0 Debt Collection: Other 0 Employment Dispute: Discrimination 0 Employment Dispute: Other Other. Breach of Contract REAL PROPERTY ❑ Ejectment © Eminent Domain/Condemnation ❑ Ground Rent ❑ Landlord/Tenant Dispute ❑ Mortgage Foreclosure: Residential ❑ Mortgage Foreclosure: Commercial ❑ Partition ❑ Quict Title ❑ Other. CIVIL APPEALS Administrative Agencies O Board of Assessment ❑ Board of Elections Dept. of Transportation Statutory Appeal: Other Q Zoning Board O Other. MISCELLANEOUS ❑ Common Law/Statutory Arbitration ❑ Declaratory Judgment El Mandamus ❑ Non -Domestic Relations Restraining Order 0 Quo Warranto ❑ Replevin ❑ Other: d !/!/7011 Alan R. Boynton, Jr. Attorney I.D. No. 39850 Dana W. Chilson Attorney I.D. No. 208718 McNees Wallace & Nurick LLC 100 Pine Street 717-232-8000 P.O. Box 1166 Harrisburg, PA 17108-1166 • rYY.» OF HE PROMONOT,Iff ; 204 JUN 19 41.110: 56 PEN NSYL AN/A;ITy A Attorneys for Plaintiff Opus Surgical, LLC OPUS SURGICAL, LLC, Plaintiff v. S 1 SPINE, LLC, : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENN YLVANIA CASE NO. H.' 31/7/ all Defendant : CIVIL ACTION NOTICE 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 attomey'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, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO • PROVIDE YOU WITH INFORMATION ABOUT,AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 32 S. Bedford Street Carlisle, Pennsylvania 717-249-3166 C �J 600 IDS !33/() j�� 367 ySy • t. • L Dated: June 17, 2014 Respectfully submitted, McNees Wallace & Nurick LLC By • Alan R. Boynt¢fi, Jr. Attomey ID No. 39850 Dana W. Chilson Attorney ID No. 208718 • 100 Pine Street P. O. Box 1166 .1 Harrisburg, PA 17108-1166 ' Phone: (717) 232-8000 • Attorneys for Plaintiff Opus Surgical, LLC 1 • •: •1 Alan R. Boynton, Jr. Attorney 1.D. No. 39850 Dana W. Chilson Attorney I.D. No. 208718 McNees Wallace & Nurick LLC 100 Pine Street 717.232-8000 P.O. Box 1166 Harrisburg, PA 17108-1166 Attorneys for Plaintiff Opus Surgical, LLC OPUS SURGICAL LLC, : IN THE COURT OF COMMON PLEAS Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA v. : CASE NO. Si SPINE, LLC, Defendant : CIVIL ACTION COMPLAINT Plaintiff Opus Surgical, LLC, by and through its undersigned counsel, hereby files this Complaint against Defendant Si Spine, LLC, and in support thereof avers as follows: FACTUAL BACKGROUND A. The Parties and Venue 1. Plaintiff Opus Surgical, LLC ("Opus") is a Pennsylvania limited liability company with a principal place of business located at 601 Southridge Drive, Mechanicsburg, Pennsylvania 17055. 2. Opus is in the business of selling medical devices to medical professionals, and is wholly owned by Robert and Caroline Antonelli. 3. Defendant S1 Spine, LLC ("S1") is a Pennsylvania limited liability company with a registered address of 4001 15' Avenue, Lafayette Hill, Pennsylvania 19444.. 4. Venue is proper in this Court pursuant to Pa.R.C.P. 2179(a)(3) and (4). • B. The Relationship Between Opus and S1 5. Robed Antonelli has been in the business of selling medical products to physicians since 1992. 6. Between October 2004 and January 2010, Robert Antonelli was a principal for L5 Surgical, which distributed products for Globus Medical Co. 7. • In January 2010, Robert Antonelli left Globus and began compliance with a one year noncompetition agreement with Globus. 8. In September 2010, a court determined that the noncompetition agreement with Globus was no longer enforceable. Contemporaneously therewith, Robert and Caroline Antonelli formed Opus. 9. In or about October 2010, S1 approached Opus and proposed that Opus sell medical products for 81. Pursuant to the proposed arrangement, Opus would keep 80% of the monies collected from vendors and hospitals from sales of products, and 81 would keep 20% of the proceeds. Si proposed handling contract negotiations with vendors, billing and invoicing vendors and hospitals, and collecting all monies due. 10. Upon information and belief, Si sought to engage Antonelli to take advantage of his contacts in the spinal surgery field, especially with Dr. Steven Wolf ("Dr. Wolf') at Holy Spirit Hospital and Dr. Stan Grabias ("Dr. Grabias") at Reading Hospital, and to gain entry into the market for the sale of spinal products to medical professionals. 11. Opus initially agreed to the approach proposed by Si and the parties proceeded under an independent contractor relationship consistent with the approach proposed by Si for a period of three months. 12. In January 2011, the parties renegotiated the arrangement. It was orally agreed to establish an annual management fee of $225,000, to be paid to S1 on a monthly basis of $18,750 per month. Si agreed to continue to handle Opus' billing processes, to 2 purchase and pay for products acquired from third party vendors and sold by Opus, to handle collections of account receivables, and to negotiate and manage third party vendor. contracts. 13. Under the revised agreement, after payment of (1) the monthly management fee of $18,750 to Si, and (2) the costs of products sold by Opus, S1 would pay to Opus 100% of all remaining sums. Opus would also be paid any commissions paid by third party vendors for the sale of their products by Opus. 14. As with the initial agreement, Opus remained an independent contractor and the parties did not execute noncompetition or nondisclosure agreements. 15. The parties complied with the terms of the revised agreement from February 2011 through November 2013. 16. The relationship between 81 and Opus during this period was as independent contractors, with no rights of exclusivity, no limitations on termination, and no obligations other than as described above. 17. Although an independent contractor, S1 served as Opus' agent in S1's performance of its management agreement obligations, particularly in its interactions with Opus' vendors and Opus' clients, including Reading Hospital, Holy Spirit Hospital, and Dr. Wolf. In these interactions, then, S1, had a fiduciary duty to act in the best interest of Opus and to not undermine Opus' relationships with its clients. C. 4Web 18. In early 2013. Opus became familiar with 4Web, a Texas-based manufacturing company owned by Jessee Hunt. 19. 4Web manufactures advanced medical devices and was interested in selling its products in central Pennsylvania. 3 20. Opus believed that 4Web's products were attractive and decided to sell them to physician clients of Opus. 21. To effectuate the arrangement, and because 81 was handling Opus' purchases from third party vendors, Opus introduced 4Web to S1. 22. Shortly thereafter, Opus began to sell 4Web's products and S1 handled the billings and collections relating to Opus' sale of 4Web's products. 23. Opus sold 4Web products to Holy Spirit Hospital at what Opus believed was a market appropriate price. It advised 81 of the price. 24. Consistent with the terms of the revised agreement, when Opus sold 4Web products, 81 collected payment from the applicable buyer (Holy Spirit Hospital) and paid 4Web for the cost of its products from this payment. 81 then paid Opus the difference. 25. Opus had no agreement of with, or obligations to, 4Web. 26. At some point in mid 2013, but unbeknownst to Opus, 81 entered into a written contract directly with 4Web ("the S1/4Web Agreement"). 27. To date, Opus has not been provided a copy of the S1/4Web Agreement. .28. Upon reasonable belief, the S1/4Web Agreement confirmed that S1 was a distributor of 4Web products, specifically for the 4Web AUF Truss device and the 4Web Cervical Truss device. 29. Upon reasonable belief, but unknown to Opus until December 2013, 4Web and Si agreed that S1 would not charge more than $4,050 for the sale of 4Web's ALIF Truss device and no more than $1,000 for 4Web's Cervical Truss device. 30. Prior to entry into the S1/4Web Agreement, S1 knew that Opus had been selling 4Web's products for considerably more than was agreed to by 81 and 4Web but continued to bill and collect payment from Holy Spirit Hospital at a price higher than Si and 4Web had agreed to charge. 4 31. Neither 81 nor 4Web informed Opus of their agreement or of the pricing limitations relating to the ALIF Truss device and the 4Web Cervical Truss device. 32. Opus had no agreement with Si which in any way limited the amounts which Opus could charge for the sale of products to any purchaser. 33. Without knowledge of any cap on what could be charged by it, Opus continued to charge $8,900 for the 4Web ALIF Truss device and $2,450 for the 4Web Cervical Truss device, which Opus believed to be the fair market value for those products. 34. S1, which did know about the billing restriction, nevertheless billed Opus client Holy Spirit Hospital, which purchased the 4Web products, $8,900 for the ALIF product and $2,450 for the Cervical product sold by Opus. D. St's Unilateral Change to the Agreement 35. In the fall of 2013, 61 insisted on renegotiating the terms of the revised agreement, particularly in relation to Opus sales to Holy Spirit Hospital. 36. Under the new arrangement proposed by 81, 61 would continue to provide management services to Opus. However. It would reduce its monthly management fee by 50% and Opus would no longer receive all of the monies collected from vendors and Holy Spirit Hospital. Instead, Opus would ,receive only a 20% commission, with S1 keeping 80% of all sums received beyond the costs of the products. 37. Since acceptance of the terms proposed by S1 would result in an estimated 60% decrease in revenues to Opus, Opus initially declined to renegotiate the agreement. 38. On November 20, 2013, S1 reiterated its demand that Opus accept the changes to the compensation structure, and stated that the change would occur effective December 1, 2013. 39. When Opus did not respond to S1's demand to change the terms of the Agreement, Si celled a meeting on November 27, 2013 at Holy Spirit Hospital. During that 5 meeting, S1 personnel made clear that Opus had no choice but to accept the new arrangement because "the leverage had shifted" with Mr. Antonetli's contacts at Holy Spirit Hospital, that Si new had the leverage in the relationship, and that 51 could squeeze out Opus if it so desired. 40. Subsequent to the November 27, 2013 meeting, Opus learned that 51 had been maneuvering to transfer all of the Holy Spirit Hospital work to 51 through a family relationship between a direct employee of 51, who was Dr. Wolfs son. 41. Upon information and belief, 51 also made a financial proposal to Dr. Wolf which would allow him to considerably increase his revenues if it dealt directly with 51 and eliminated his relationship with Opus. 42. When Opus had still not accepted the revised terms, on December 16, 2013, Si informed Opus that 51 was not able to pay Opus for its November 2013 fees, which amounted to $194,597. 43. Opus believed that 81 was refusing payment until Opus confirmed its acceptance of the modified revised agreement and, on December 17, 2013, despite his reservations regarding the new terms, Mr. Antonelli conveyed Opus' consent to the new payment proposal. 44. Confirming Opus' belief as to the reasons for the delay in payment, on the same day that Opus agreed to modify the Agreement, 51 issued a check for the full amount of the November 2013 commissions and sent it to Opus. 45. Opus received the 51 check on Friday, December 20, 2013 and deposited the check on the next business day, Monday, December 23, 2013. E. 4Web's Relationship With S1 46. In mid-December 2013, Opus, through a happenstance conversation with the President of 4Web, learned of the existence of the S1/4Web Agreement and, in particular, 6 the cap on the price to Holy Spirit Hospital for the ALIF Truss device and the 4Web Cervical Truss device. 47. To avoid complicity in a potential breach of contract, Opus promptly informed 4Web that it was not aware of the cap and had been charging Holy Spirit Hospital what it believed to be the fair market value of the products. 48. Upon information and belief, in mid December 2013, 4Web conducted an investigation and determined the full extent of S1's breach. 49. Upon information and belief, on December 30, 2013, 4Web informed S1 that it was terminating the S1/4Web agreement. 50. On December 30, 2013, without any reason or notice to Opus, but upon receiving notice of termination from 4Web, S1 put a stop payment on the check which it had sent to Opus. 51. On December 31, 2013, S1 sent a letter to Opus brazenly blaming it for 4Web's termination, even though Opus was not even aware of the 81/4Web Agreement and even though S1 had. for a number of months, billed Holy Spirit Hospital for an amount directly and knowingly in breach of the S1/4Web Agreement. F. Opus' Termination of the Agreement 52. In Tight of S1's actions In stopping payment of the November 2013 commissions, making false allegations relating to Sts breach of its agreement with 4Web, and aggressively interfering with Opus' relationships at Holy Spirit Hospital, Opus terminated its relationship with S1, effective December 31, 2013. 53. In addition to the November 2013 commissions, 81 has additionally failed to pay Opus its commissions for December 2013, which amount to $67,553. 7 54. On January 3, 2014, Opus sent Si a demand letter for payment of the November 2013 and December 2013 fees. A true and correct copy of the January 3, 2014 letter is attached hereto as Exhibit A. 55. In mid-January 2014, Opus learned that -S1 falsely told 4Web that Opus knew of the contractual restriction regarding the AUF Truss device and the Cervical Truss device, and that Opus was responsible for the breach of the agreement between 4Web and Si, 56. Upon information and belief, Si made similar allegations to Dr. Wolf, with whom Mr. Antonelli previously had a longstanding, strong relationship. 57. Upon information and belief, S1 took further steps to interfere with and effectuate the termination of the relationship between Dr. Wolf and Opus. 58. Shortly thereafter, Dr. Wolf infonned Opus that he was terminating his relationship with Opus and was switching all of his business to S1. 59. The loss of business with Dr. Wolf and Holy Spirit Hospital has resulted, and will result, in significant financial harm to Opus. COUNT 1 BREACH OF CONTRACT 60. Plaintiff incorporates herein by reference paragraphs 1 through 59, above, as if set forth fully herein. 61. Pursuant to Pa.R.C.P. No. 1019(h), Opus bases this count on the terms of the oral revised agreement, as set forth above. 62. Pursuant to the terms of the revised agreement, S1 owes to Opus the sum of $262,150.00 for November 2013 and December 2013 commissions. 63. As set forth at length above, S1 has failed and refused to pay Opus its November 2013 and December 2013 commissions. 8 64. S1 has breached its contractual obligations to Opus by failing to pay Opus the sums due and owing to Opus pursuant to the revised agreement. 65. Opus has been damaged by S1's breach of its contractual obligations. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant S1 Spine, LLC in the sum of $262,150.00, an amount outside the court's compulsory arbitration limits, plus interest and costs as allowed by law. COUNT 11 UNJUST ENRICHMENT 66. Plaintiff incorporates herein by reference paragraphs 1 through 59, above. as if set forth fully herein. 67. As described more fully above, S1 has received from customers of Opus the sum of $262,150.00 beyond the costs of products sold by Opus and the management fee owed to S1 for November and December 2013. 68. As described more fully above, 81 has been unjustly enriched in the amount of $262,150.00. 69. Si was aware of and fully recognized that it owed Opus the sum of $262,150.00 for November 2013 and December 2013 commissions. 70. S1 benefited from failing to pay Opus the sums due and owing to it. 71. S1 has been unjustly enriched from said benefit by not paying Opus the sums due and owing to it. 72. An inequity will result if S1 is not required by pay Opus the sums due and owing to it. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant SI Spine, LLC and an award of damages in the sum of 9 $262,150.00, an amount outside the court's compulsory arbitration limits, plus interest and costs as allowed by law. COUNT III TORTIOUS INTERFERENCE WITH CURRENT AND PROSPECTIVE CONTRACTUAL RELATIONS 73. Plaintiff incorporates herein by reference paragraphs 1 through 59, above, as if set forth fully herein. 74. Opus had a long standing relationship with Dr. Wolf, in which Opus would sell, and Dr. Wolf and Holy Spirit Hospital would purchase, medical equipment sold by Opus. 75. The relationship with Dr. Wolf existed long before any relationship between Opus and S1. 76. The aforesaid actions of 81, including, but not limited to, 81's negotiation, then willful breach, of the S1/4Web Agreement, S1's false and misleading statements to Dr. Wolf regarding Opus' sale of the the ALIF Truss device and the Cervical Truss device, together with S1's intentional and active undermining of the relationship even while being paid by Opus to provide management services to support the relationship between Opus and Dr. Wolf, constitute intentional and willful interference with Opus' current relationship with Dr. Wolf. 77. The aforesaid actions of S1 also constitute intentional and willful interference with Opus' prospective relationship with Dr. Wolf. 78. Sl's actions were without justification or privilege. 79. As a result of S1's actions, Opus has been damaged, and will continue to be damaged, in that Opus will suffer lost revenue, profits, and customer goodwill. 10 80. As a result of S1's actions, Opus has lost, and reasonably anticipates continued Toss of, substantial revenues. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant 81 Spine, LLC, an award of damages in an amount outside the court's compulsory arbitration limits, an accounting of all funds paid by Holy Spirit Hospital to S1, an accounting of all funds paid by S1 and related entities to Dr. Wolf, plus interest and costs as allowed by .law. COUNT IV DEFAMATION 81. Opus incorporates herein by reference paragraphs 1 through 59, above, as if set forth fully herein. 82. This claim is for defamation in violation of the common taw of the Commonwealth of Pennsylvania and 42 Pa.C.S.A. § 8343. 83. The statements made by 81 to 4Web, Dr. Wolf, and Holy Spirit that Opus knew of the S1/4Web contractual restriction regarding the ALIF Truss device and the Cervical Truss device, and that Opus was responsible for S1's breach of the arrangement between 4Web and 51, were objectively false and defamatory in nature. 84. 81 made these statements to Holy Spirit, 4Web, and/or Dr. Wolf. 85. The defamatory statements were not true, privileged, or a matter of public concern. 86. These defamatory statements caused substantial harm to the reputation of Opus among Dr. Wolf and 4Web. 87. These defamatory statements directly resulted in the termination of Opus' relationship with at least Holy Spirit and Dr. Wolf. 11 88. As a result of S1's actions, Opus has been damaged, and will continue to be damaged, in that Opus will suffer lost revenue, profits, and customer goodwill. 89. As a result of S1's actions, Opus reasonably anticipates continued loss of substantial revenues for an extended period of time. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant Si Spine, LLC and an award of damages in an amount outside the court's compulsory arbitration limits, plus interest and costs as allowed by law. COUNT V BREACH OF FIDUCIARY DUTY 90. Opus incorporates herein by reference paragraphs 1 through 59, above, as if set forth fully herein. 91. 51, as Opus' agent under the temis of the revised agreement, owed a fiduciary duty to Opus to not undermine its relationship with its customers and clients. 92. SI, while performing its obligations under the revised agreement, intentionally sought to, and succeeded in, undermining and interfering with Opus' relationship with Holy Spirit Hospital and Dr. Wolf. 93. S1's objective in undermining the relationship between Opus and Holy Spirit and Dr. Wolf was to appropriate that relationship and to attain revenues which would otherwise have been eamed by Opus. 94. S1's conduct was successful in getting Holy Spirit and Dr. Wolf to terminate their relationship with Opus and to transfer all such work to 81. • 95. St's conduct constituted a breach of its fiduciary duty to Opus. 96. S1's breach of its fiduciary duty to Opus has caused, and will cause, significant damages to Opus. 12 WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant S1 Spine, LLC, and award damages in an amount outside the court's compulsory arbitration limits, plus interest and costs as allowed by law. COUNT VI BUSINESS DISPARAGEMENT 97. Opus incorporates herein by reference paragraphs 1 through 59, above, as if set forth fully herein. 98. The statements made by 81 to 4Web, Dr. Wolf and Holy Spirit that Opus knew of the S1/4Web contractual restriction regarding the ALIF Truss device and the Cervical Truss device, and that Opus was responsible for S1's breach of the arrangement between 4Web and 51, were objectively false and intended to harm Opus. 99. 81 made these statements to Holy. Spirit, 4Web, and/or Dr. Wolf. 100. The statements were not true, privileged, or a matter of public concern. 101. These defamatory statements caused harm to the reputation of Opus among Dr. Wolf and 4Web. 102. These defamatory statements directly resulted in the termination of Opus' relationship with Holy Spirit and Dr. Wolf. 103. As such, S1 is liable for business disparagement in violation of the common law of the Commonwealth of Pennsylvania. 104. As a result of S1's actions, Opus has been damaged, and will continue to be damaged, in that Opus will suffer lost revenue, profits, and customer goodwill. 105. As a result of St's actions, Opus reasonably anticipates continued foss of substantial revenues for an extended period of time. 13 4 • WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant SI Spine, LLC, an award of damages in an amount outside the courts compulsory arbitration limits, plus interest and costs as may be allowed by law. • MCNEES WALLACE &NURICK LLC By alht-. a Alan R. Boyn , Jr. Attorney ID No. 39850 Dana W. Chilson Attorney ID No. 208/18 100 Pine Street P0. Box 1166 Harrisburg, PA 17108-1166 Phone: (717) 232-8000 Fax: (717) 237-5300 Dated: June 17, 2014 Attorneys for Plaintiff Opus Surgical, LLC 14 fau 111 Wallace & Nurick LLC 100 Pine Street • PO Box 1166 • Harrisburg, PA 17108-1166 Tel: 717.232.8000 • Fax: 717.237.5300 January 3, 2014 David P. Heim, Esq. BOCHETTO & LENTZ, P.O. 1524 Locust Street Philadelphia, PA • 19102 Aum R. BOYNTON, JR. DIRECT. DIM. (717) 237.5352 DIRECT FAX (717) 260-1665 E-hMR ADDRESS: AeoYNTON©MwN.coM Re: S 1 Spine LLC and Opus Surgical, LLC; Past Due Commissions Dear Mr. Heim: As you know, this office is counsel to Opus Surgical, LLC ("Opus"). We are writing to you regarding the amounts due and owing by 5 1 Spine, LLC CS 1 Spine") to Opus. Pursuant tothe arrangement between the parties. 5 1 Spine owes Opus $213,347 in commissions for November 2013. After subtracting S 1 Spine's • management fee of $18,750, Opus is owed $194,597. On December 17, 2013, S 1 Spine issued to Opus check numbei 3010 in the amount of $194,597, but put a stop payment on the check on December 30, 2013. 'Although my client contacted S 1 Spine several times in regard to the stop payment, 5 1 Spine failed to respond to my client's communications. As such, Opus is stilled owed $194,597 for the November 2013's commissions. Based upon S 1 Spine's conduct, Opus terminated the agreement between the parties effective December 30, 2013. S 1 Spine thus also owes Opus $67,553 in commissions for December 2013. Please note that the December 2013 commission total is after the deduction of S 1 Spine's management fee of $9,375, which went into effect December 1, 2013 pursuant to S 1 Spine's directive. In all, S 1 Spine owes Opus • $262,150. ' S•1 Spine has failed to pay Opus the sums owed to it. As such, please be • advised that if this account is not brought current -within ten (10) days frorn the date of this tetter, Opus will have no choice but to consider formal legal action against S 1 Spine. Any legal action against S 1' Spine will seek not only the principal sum due and owing, but also interest and costs as allowed by taw: While Opus would prefer to amicably resolve this matter, It will not refrain from using all the resources at its disposal to collect the aforementioned amounts. www.mwn.com HARRISBURG, PA . • LANCASTER, PA • SCRANTON, PA • STATE COLLEGE, PA • COLUMBUS, OH • WASHINGTON, DG 3 �^ David P. Heim,.Esq. January 3, 2014 Page 2 If you wish to discuss this matter, please feel free to contact me at the above - referenced number. Sincerely, • McNEES WALLACE & NURICK LLC By • Alan R. Boynton, Jr. J!7/2014 Opus Surgical, LLC v. S 1 Spine, LLC Opus Surgical, LLC v. S 1 Spine, LLC From: John Shinkowsky Sent: Mon, Jul 7, 2014 at 4:00 pm To: office@brservices.com 2014_07_07_15_49_16.pdf (866.9 KB) Invoice 29673.pdf (38 KB) — Download all Requested documents and our invoice are attached. We appreciate the opportunity to be of service to you. John F. Shinkowsky, CPP, CH Owner Shinkowsky Investigations 4511 Jonestown Road, 2nd Floor Post Office Box 126538 Harrisburg, PA 17112 (717) 540-0631 FAX: (800) 996-1246 www.harrisburgpi.com htlps ://apps .r ac ks pac e.comkers ons/vdebmai I/11.2.15- R C/popup. php?ws i d= 4e9e2b1e19367acbc 1cd23945b6532beOda8a2b6/r1404764304042 1/1 Alan R. Boynton, Jr. Attorney I.D. No. 39850 Dana W. Chilson Attorney I.D. No. 208718 McNees Wallace & N urick LLC 100 Pine Street 717-232-8000 P.O. Box 1166 Harrisburg, PA 17108-1166 FILED -OFFICE OF THE r TH ONO TA Y 2R SEP 1 1 PM 2:16 CUMBERLAND COUNTY PENNSYLVANIA Attorneys for Plaintiff Opus Surgical, LLC OPUS SURGICAL, LLC, Plaintiff v. S 1 SPINE, LLC, Defendant : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA 1 CASE NO. 114 -5L,17 I : CIVIL ACTION NOTICE 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, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 32 S. Bedford Street Carlisle, Pennsylvania 717-249-3166 Respectfully submitted, McNees allace & Nurick LLC By Alan R. Boynton, Jr. Attorney ID No. 39850 Dana W. Chilson Attorney ID No. 208718 100 Pine Street P. 0. Box 1166 Harrisburg, PA 17108-1166 Phone: (717) 232-8000 Attorneys for Plaintiff Opus Surgical, LLC Dated: September 11, 2014 Alan R. Boynton, Jr. Attorney I.D. No. 39850 Dana W. Chilson Attorney I.D. No. 208718 McNees Wallace & Nurick LLC 100 Pine Street 717-232-8000 P.O. Box 1166 Harrisburg, PA 17108-1166 Attorneys for Plaintiff Opus Surgical, LLC OPUS SURGICAL, LLC, : IN THE COURT OF COMMON PLEAS Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA CASE NO. 14-3671 Si SPINE, LLC, Defendant : CIVIL ACTION AMENDED COMPLAINT Plaintiff Opus Surgical, LLC, by and through its undersigned counsel, hereby files this Amended Complaint against Defendant Si Spine, LLC, and in support thereof avers as follows: FACTUAL BACKGROUND A. The Parties and Venue 1. Plaintiff Opus Surgical, LLC ("Opus") is a Pennsylvania limited liability company with a principal place of business located at 601 Southridge Drive, Mechanicsburg, Pennsylvania 17055. 2. Opus is in the business of selling medical devices to medical professionals, and is wholly owned by Robert and Caroline Antonelli. 3. Defendant Si Spine, LLC ("Si") is a Pennsylvania limited liability company with a registered address of 4001 1st Avenue, Lafayette Hill, Pennsylvania 19444. Robert Morris is the principal member of S1. 4. Venue is proper in this Court pursuant to Pa.R.C.P. 2179(a)(3) and (4). B. The Relationship Between Opus and S1 5. Robert Antonelli has been in the business of selling medical products to physicians since 1992. 6. Between October 2004 and January 2010, Robert Antonelli was a principal for L5 Surgical, which distributed products for Globus Medical Co. 7. In January 2010, Robert Antonelli left Globus and began compliance with a one year noncompetition agreement with Globus. 8. In September 2010, a court determined that the noncompetition agreement with Globus was no longer enforceable. Contemporaneously therewith, Robert and Caroline Antonelli formed Opus. 9. In or about October 2010, Si approached Opus and proposed that Opus sell medical products for Si. Pursuant to the proposed arrangement, Opus would keep 80% of the monies collected from vendors and hospitals from sales of products, and S1 would keep 20% of the proceeds. S1 proposed handling contract negotiations with vendors, billing and invoicing vendors and hospitals, and collecting all monies due. 10. Upon information and belief, S1 sought to engage Antonelli to take advantage of his contacts in the spinal surgery field, especially with Dr. Steven Wolf ("Dr. Wolf') at Holy Spirit Hospital and Dr. Stan Grabias ("Dr. Grabias") at Reading Hospital, and to gain entry into the market for the sale of spinal products to medical professionals. 11, Opus initially agreed to the approach proposed by Si and the parties proceeded under an independent contractor relationship consistent with the approach proposed by S1 for a period of three months. 12. In January 2011, the parties renegotiated the arrangement. It was orally agreed to establish an annual management fee of $225,000, to be paid to S1 on a monthly basis of $18,750 per month. Si agreed to continue to handle Opus' billing processes, to 2 purchase and pay for products acquired from third party vendors and sold by Opus, to handle collections of account receivables, and to negotiate and manage third party vendor contracts. 13. Under the revised agreement, after payment of (1) the monthly management fee of $18,750 to S1, and (2) the costs of products sold by Opus, S1 would pay to Opus 100% of all remaining sums. Opus would also be paid any commissions paid by third party vendors for the sale of their products by Opus. 14. As with the initial agreement, Opus remained an independent contractor and the parties did not execute noncompetition or nondisclosure agreements. 15. The parties complied with the terms of the revised agreement from February 2011 through November 2013. 16. The relationship between S1 and Opus during this period was as independent contractors, with no rights of exclusivity, no limitations on termination, and no obligations other than as described above. 17. Although an independent contractor, Si served as Opus' agent in S1's performance of its management agreement obligations, particularly in its interactions with Opus' vendors and Opus' clients, including Reading Hospital, Holy Spirit Hospital, and Dr. Wolf. In these interactions, then, Si, had a fiduciary duty to act in the best interest of Opus and to not undermine Opus' relationships with its clients. C. 4Web 18. In early 2013, Opus became familiar with 4Web, a Texas-based manufacturing company owned by Jessee Hunt. 19. 4Web manufactures advanced medical devices and was interested in selling its products in central Pennsylvania. 20. Opus believed that 4Web's products were attractive and decided to sell them to physician clients of Opus. 21. To effectuate the arrangement, and because S1 was handling Opus' purchases from third party vendors, Opus introduced 4Web to S1. 22. Shortly thereafter, Opus began to sell 4Web's products and S1 handled the billings and collections relating to Opus' sale of 4Web's products. 23. Opus sold 4Web products to Holy Spirit Hospital at what Opus believed was a market appropriate price. It advised S1 of the price. 24. Consistent with the terms of the revised agreement, when Opus sold 4Web products, S1 collected payment from the applicable buyer (Holy Spirit Hospital) and paid 4Web for the cost of its products from this payment. S1 then paid Opus the difference. 25. Opus had no agreement with, or obligations to, 4Web. 26. At some point in mid 2013, but unbeknownst to Opus, S1 entered into a written contract directly with 4Web ("the S1/4Web Agreement"). 27. To date, Opus has not been provided a copy of the S1/4Web Agreement. 28. Upon reasonable belief, the S1/4Web Agreement confirmed that S1 was a distributor of 4Web products, specifically for the 4Web ALIF Truss device and the 4Web Cervical Truss device. 29. Upon reasonable belief, but unknown to Opus until December 2013, 4Web and S1 agreed that S1 would not charge more than $4,050 for the sale of 4Web's ALIF Truss device and no more than $1,000 for 4Web's Cervical Truss device. 30. Prior to entry into the S1/4Web Agreement, S1 knew that Opus had been selling 4Web's products for considerably more than was agreed to by S1 and 4Web but continued to bill and collect payment from Holy Spirit Hospital at a price higher than S1 and 4Web had agreed to charge. 4 31. Neither Si nor 4Web informed Opus of their agreement or of the pricing limitations relating to the ALIF Truss device and the 4Web Cervical Truss device. 32. Opus had no agreement with Si which in any way limited the amounts which Opus could charge for the sale of products to any purchaser. 33. Without knowledge of any cap on what could be charged by it, Opus continued to charge $8,900 for the 4Web ALIF Truss device and $2,450 for the 4Web Cervical Truss device, which Opus believed to be the fair market value for those products. 34. Si, which did know about the billing restriction, nevertheless billed Opus client Holy Spirit Hospital, which purchased the 4Web products, $8,900 for the ALIF product and $2,450 for the Cervical product sold by Opus. D. Si's Unilateral Change to the Agreement 35. In the fall of 2013, Si insisted on renegotiating the terms of the revised agreement, particularly in relation to Opus sales to Holy Spirit Hospital. 36. Under the new arrangement proposed by S1, Si would continue to provide management services to Opus. However, it would reduce its monthly management fee by 50% and Opus would no longer receive all of the monies collected from vendors and Holy Spirit Hospital. Instead, Opus would receive only a 20% commission, with S1 keeping 80% of all sums received beyond the costs of the products. 37. Since acceptance of the terms proposed by Si would result in an estimated 60% decrease in revenues to Opus, Opus initially declined to renegotiate the agreement. 38. On November 20, 2013, Si reiterated its demand that Opus accept the changes to the compensation structure, and stated that the change would occur effective December 1, 2013. 39. When Opus did not respond to Sts demand to change the terms of the Agreement, Si called a meeting on November 27, 2013 at Holy Spirit Hospital. During that 5 meeting, S1 personnel made clear that Opus had no choice but to accept the new arrangement because "the leverage had shifted" with Mr. Antonelli's contacts at Holy Spirit Hospital, that S1 now had the leverage in the relationship, and that S1 could squeeze out Opus if it so desired. 40. Subsequent to the November 27, 2013 meeting, Opus learned that S1 had been maneuvering to transfer all of the Holy Spirit Hospital work to S1 through a family relationship between a direct employee of S1, who was Dr. Wolfs son. 41. Upon information and belief, S1 also made a financial proposal to Dr. Wolf which would allow him to considerably increase his revenues if it dealt directly with S1 and eliminated his relationship with Opus. 42. When Opus had still not accepted the revised terms, on December 16, 2013, S1 informed Opus that S1 was not able to pay Opus for its November 2013 fees, which amounted to $194,597. 43. Opus believed that S1 was refusing payment until Opus confirmed its acceptance of the modified revised agreement and, on December 17, 2013, despite his reservations regarding the new terms, Mr. Antonelli conveyed Opus' consent to the new payment proposal. 44. Confirming Opus' belief as to the reasons for the delay in payment, on the same day that Opus agreed to modify the Agreement, S1 issued a check for the full amount of the November 2013 commissions and sent it to Opus. 45. Opus received the S1 check on Friday, December 20, 2013 and deposited the check on the next business day, Monday, December 23, 2013. 6 E. 4Web's Relationship With Si 46. In mid-December 2013, Opus, through a happenstance conversation with the President of 4Web, learned of the existence of the S1/4Web Agreement and, in particular, the cap on the price to Holy Spirit Hospital for the ALIF Truss device and the 4Web Cervical Truss device. 47. To avoid complicity in a potential breach of contract, Opus promptly informed 4Web that it was not aware of the cap and had been charging Holy Spirit Hospital what it believed to be the fair market value of the products. 48. Upon information and belief, in mid December 2013, 4Web conducted an investigation and determined the full extent of Sts breach. 49. Upon information and belief, on December 30, 2013, 4Web informed S1 that it was terminating the S1/4Web agreement. 50. On December 30, 2013, without any reason or notice to Opus, but upon receiving notice of termination from 4Web, S1 put a stop payment on the check which it had sent to Opus. 51. On December 31, 2013, Si sent a letter to Opus brazenly blaming it for 4Web's termination, even though Opus was not even aware of the S1/4Web Agreement and even though Si had, for a number of months, billed Holy Spirit Hospital for an amount directly and knowingly in breach of the S1/4Web Agreement. F. Opus' Termination of the Agreement 52. In light of Sts actions in stopping payment of the November 2013 commissions, making false allegations relating to Sts breach of its agreement with 4Web, and aggressively interfering with Opus' relationships at Holy Spirit Hospital, Opus terminated its relationship with S1, effective December 31, 2013. 7 53. In addition to the November 2013 commissions, S1 has additionally failed to pay Opus its commissions for December 2013, which amount to $67,553. 54. On January 3, 2014, Opus sent Si a demand letter for payment of the November 2013 and December 2013 fees. A true and correct copy of the January 3, 2014 letter is attached hereto as Exhibit A. 55. In mid-January 2014, Opus learned that Robert Morris of S1 falsely told Jessee Hunt of 4Web that Opus knew of the contractual restriction regarding the ALIF Truss device and the Cervical Truss device, and that Opus was responsible for the breach of the agreement between 4Web and S1. 56. Upon information and belief, in mid-January 2014 or shortly thereafter, Robert Morris falsely told Dr. Wolf, with whom Mr. Antonelli previously had a longstanding, strong relationship, that Opus knew of the contractual restriction regarding the ALIF Truss device and the Cervical Truss device, and that Opus was responsible for the breach of the agreement between 4Web and 81. 57. Shortly thereafter, Dr. Wolf informed Opus that he was terminating his relationship with Opus and was switching all of his business to S1. 58. The loss of business with Dr. Wolf and Holy Spirit Hospital has resulted, and will result, in significant financial harm to Opus. COUNT 1 BREACH OF CONTRACT 59. Plaintiff incorporates herein by reference paragraphs 1 through 58, above, as if set forth fully herein. 60. Pursuant to Pa.R.C.P. No. 1019(h), Opus bases this count on the terms of the oral revised agreement, as set forth above. 8 61. Pursuant to the terms of the revised agreement, Si owes to Opus the sum of $262,150.00 for November 2013 and December 2013 commissions. 62. As set forth at length above, 51 has failed and refused to pay Opus its November 2013 and December 2013 commissions. 63. 51 has breached its contractual obligations to Opus by failing to pay Opus the sums due and owing to Opus pursuant to the revised agreement. 64. Opus has been damaged by S1's breach of its contractual obligations. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant 51 Spine, LLC in the sum of $262,150.00, an amount outside the courts compulsory arbitration limits, plus interest and costs as allowed by law. COUNT II UNJUST ENRICHMENT 65. Plaintiff incorporates herein by reference paragraphs 1 through 58, above, as if set forth fully herein. 65. As described more fully above, 51 has received from customers of Opus the sum of $262,150.00 beyond the costs of products sold by Opus and the management fee owed to Si for November and December 2013. 67. As described more fully above, Si has been unjustly enriched in the amount of $262,150.00. 68. Si was aware of and fully recognized that it owed Opus the sum of $262,150.00 for November 2013 and December 2013 commissions. 69. S1 benefited from failing to pay Opus the sums due and owing to it. 70. S1 has been unjustly enriched from said benefit by not paying Opus the sums due and owing to it. 9 71. An inequity will result if Si is not required by pay Opus the sums due and owing to it. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant Si Spine, LLC and an award of damages in the sum of $262,150.00, an amount outside the court's compulsory arbitration limits, plus interest and costs as allowed by law. COUNT III TORTIOUS INTERFERENCE WITH CURRENT AND PROSPECTIVE BUSINESS RELATIONS 72. Plaintiff incorporates herein by reference paragraphs 1 through 58, above, as if set forth fully herein. 73. Opus had a long standing relationship with Dr. Wolf, in which Opus would sell, and Dr. Wolf and Holy Spirit Hospital would purchase, medical equipment sold by Opus. 74. The relationship with Dr. Wolf existed long before any relationship between Opus and Si. 75. The aforesaid actions of S1, including, but not limited to, S Vs negotiation, then willful breach, of the S1/4Web Agreement, Sts false and misleading statements to Dr. Wolf regarding Opus' sale of the ALIF Truss device and the Cervical Truss device, together with S 1's intentional and active undermining of the relationship even while being paid by Opus to provide management services to support the relationship between Opus and Dr. Wolf, constitute intentional and willful interference with Opus' current relationship with Dr. Wolf. 76. The aforesaid actions of Si also constitute intentional and willful interference with Opus' prospective relationship with Dr. Wolf. 10 77. Sts actions were without justification or privilege. 78. As a result of SI 's actions, Opus has been damaged, and will continue to be damaged, in that Opus will suffer lost revenue, profits, and customer goodwill. 79. As a result of Sts actions, Opus has lost, and reasonably anticipates continued loss of, substantial revenues. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant Si Spine, LLC, an award of damages in an amount outside the court's compulsory arbitration limits, an accounting of all funds paid by Holy Spirit Hospital to Si, an accounting of all funds paid by Si and related entities to Dr. Wolf, plus interest and costs as allowed by law. COUNT IV DEFAMATION 80. Opus incorporates herein by reference paragraphs 1 through 58, above, as if set forth fully herein. 81. This claim is for defamation in violation of the common law of the Commonwealth of Pennsylvania and 42 Pa.C.S.A. § 8343. 82. In January 2014, Robert Morris, the principal member of Si, stated to Jessee Hunt of 4Web, that Opus knew of the S1/4Web contractual restriction regarding the ALIF Truss device and the Cervical Truss device, and that Opus was responsible for Sts breach of the arrangement between 4Web and Si. Such a statement is objectively false and defamatory in nature. 83. In January 2014, Robert Morris, the principal member of Si, stated to Dr. Wolf, who is Opus' principal contact at Holy Spirit, that Opus knew of the S1/4Web contractual restriction regarding the ALIF Truss device and the Cervical Truss device, and 11 that Opus was responsible for Sl's breach of the arrangement between 4Web and Sl. Such a statement was objectively false and defamatory in nature. 84. The defamatory statements were not true, privileged, or a matter of public concern. 85. Robert Morris knew and appreciated the defamatory nature of the aforementioned statements. 86. These defamatory statements caused substantial harm to the reputation of Opus among Dr. Wolf and Jessee Hunt of 4Web. 87. These defamatory statements directly resulted in the termination of Opus' relationship with at least Holy Spirit and Dr. Wolf. 88. As a result of Robert Morris' statements, Opus has been damaged, and will continue to be damaged, in that Opus will suffer lost revenue, profits, and customer goodwill. 89. As a result of Robert Morris' statements, Opus reasonably anticipates continued loss of substantial revenues for an extended period of time. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant S1 Spine, LLC and an award of damages in an amount outside the court's compulsory arbitration limits, plus interest and costs as allowed by law. COUNT V BREACH OF FIDUCIARY DUTY 90. Opus incorporates herein by reference paragraphs 1 through 58, above, as if set forth fully herein. 91. As described at length above, the relationship between Si and Opus was such that Opus authorized (either expressly or by implication) S1 to act as its agent, 12 particularly in its interactions with Opus' vendors and Opus' clients, including Reading Hospital, Holy Spirit Hospital, and Dr. Wolf. 92. Si, as Opus' agent under the terms of the revised agreement, owed a fiduciary duty to Opus to not undermine its relationship with its customers and clients. 93. Si, while performing its obligations under the revised agreement, intentionally sought to, and succeeded in, undermining and interfering with Opus' relationship with Holy Spirit Hospital and Dr. Wolf. 94. Sts objective in undermining the relationship between Opus and Holy Spirit and Dr. Wolf was to appropriate that relationship and to attain revenues which would otherwise have been earned by Opus. 95. Sts conduct was successful in getting Holy Spirit and Dr. Wolf to terminate their relationship with Opus and to transfer all such work to Si. 96. S1's conduct constituted a breach of its fiduciary duty to Opus. 97. Sts breach of its fiduciary duty to Opus has caused, and will cause, significant damages to Opus. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant 51 Spine, LLC, and award damages in an amount outside the court's compulsory arbitration limits, plus interest and costs as allowed by law. COUNT VI BUSINESS DISPARAGEMENT 98. Opus incorporates herein by reference paragraphs 1 through 58, above, as if set forth fully herein. 99. In January 2014, Robert Morris, the principal member of Si, stated to Jessee Hunt of 4Web, that Opus knew of the S1/4Web contractual restriction regarding the ALIF Truss device and the Cervical Truss device, and that Opus was responsible for Sts breach 13 1r* of the arrangement between 4Web and Sl. Such a statement is objectively false and defamatory in nature. 100. In January 2014, Robert Morris, the principal member of Si, stated to Dr. Wolf, who is Opus' principal contact at Holy Spirit, that Opus knew of the S1/4Web contractual restriction regarding the ALIF Truss device and the Cervical Truss device, and that Opus was responsible for Sts breach of the arrangement between 4Web and Si. Such a statement was objectively false and defamatory in nature. 101. The statements were not true, privileged, or a matter of public concern. 102. Robert Morris knew the aforementioned statements were not true. 103. These disparaging statements caused harm to the reputation of Opus among Dr. Wolf and Jessee Hunt of 4Web. 104. These disparaging statements directly resulted in the termination of Opus' relationship with Holy Spirit and Dr. Wolf. 105. As a result of Robert Morris' statements, Opus has been damaged, and will continue to be damaged, in that Opus has already and will in the future suffer loss of revenue, profits, and customer goodwill. 106. As a result of Robert Morris' statements, Opus has suffered loss of substantial revenues and will continue to suffer loss of substantial revenues. 107. Si is liable for business disparagement in violation of the common law of the Commonwealth of Pennsylvania. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant S1 Spine, LLC, an award of damages in an amount outside the court's compulsory arbitration limits, plus interest and costs as may be allowed by law. VFRITIPATIQN 1 hereby verify that 1 am a 11/4/lembet of Opus 'Surgital. LLC and am authOnzed to execute this verification on its t)ohalf. 1 fennel- verify that the facts contained in the torepoing Amended Complaint are true and erect to the best of:my information, knowledge and tel and ate made subject to thepenalties of 18 Pa. C.S,A, § 4904 relating to unsworn iicatonto authorities OPUS SURGICAL LLC Rotxut.Antonelli Dated: September lb, 2.014 111 McNees Wallace & Nurick LLC January 17, 2014 David P. Heim, Esq. BOCHETTO & LENTZ, P.C. 1524 Locust Street Philadelphia, PA 19102 Re: S 1 Spine LLC and Opus Surgical, LLC Dear Mr. Heim: '11 ALAN R. BOYNTON, JR. DIRECT DIAL: (717) 237-5352 DIRECT FAX: (717) 260-1665 E-MAIL ADDRESS: ABOYNTON@MWN.COM We We have completed our investigation and assessment of the matters identified in your letter of December 13 to Robert Antonelli, as well as other issues raised by our clients (Opus Surgical, LLC, Robert Antonelli and Caroline Antonelli) and respond as follows. Opus is in the business of selling medical devices to medical professionals. The company is wholly owned by Robert and Caroline Antonelli. Neither Mr. or Mrs. Antonelli is employed by any other entity. Approximately three years ago, Opus entered, into an oral agreement with Si Spine LLC. Under the terms of the agreement, Opus was to sell products to several select surgeons. S1 was aware that Mr. Antonelli had maintained a longstanding relationship with these surgeons and that they were loyal to him. Per agreement of the parties, Opus was to receive 100% of the profits (all income beyond the cost to Si in purchasing products) collected from Reading and Holy Spirit hospitals. Si agreed to provide management services, .including billing processes and collections of account receivables, as well as negotiating and managing vendor contracts. Opus agreed to pay Si a monthly management fee of $18,750. The relationship between the parties was as independent contractors, with no rights of exclusivity, no limitations on termination and no obligations other than as described above. No non -disclosure agreement was entered into between the parties and no fiduciary relationship existed. In early 2013, Opus introduced Si to 4Web, a Texas-based company owned by Jessee Hunt. 4Web manufactures state-of-the-art medical devices and was interested in selling said products in central Pennsylvania. Consistent with its arrangement with Si, all billings and collections were handled by Si. At some point later in 2013, but nit www.mwn.com a I tOPACTFR PA ° SCRANTON, PA • STATE COLLEGE, PA • COLUMBUS, OH 0 WASHINGTON, DC January 17, 2014 Page 2 unbeknownst to Opus, Si apparently entered into a contract directly with 4Web, pursuant to which S1 was made a distributor of 4Web products. Those two parties agreed that Si would not charge more than $4,050 to Holy Spirit for the ALIF Truss device and no more than $1,000 for the Cervical Truss Device. Neither S1 nor 4Web informed Opus of the agreement or the pricing limitation. Without knowledge of any cap on what could be charged to Holy Spirit Hospital, Opus continued to charge $8,900 for the ALIF Truss cage and $2,450 for the 4Web Cervical Truss cage. Si, which did know about the billing restriction, nevertheless billed Holy Spirit $8,900 for the ALIF product and $2,450 for the Cervical product. In the fall of 2013, S1 insisted that Opus revise the arrangement between the two companies, particularly in relation to Holy Spirit. While Si reduced the monthly management fee by 50%, it also eliminated the agreement by which Opus received all of the profits on sales to Holy Spirit. Instead, it would receive only a 20% commission. This would result in an 60% decrease in revenues to Opus. On November 20, 2013, Robert Morris reiterated Sts demand that Opus accept the changes to the compensation structure and stated that the change would occur effective December 1. With no response yet from Opus, at a meeting on November 27 at Holy Spirit, Si personnel made clear that Opus had no choice because "the leverage had shifted" with Mr. Antonelli's surgeon at Holy Spirit and that S1 now had the leverage in the relationship. Although Opus hesitated in doing so because of the dramatic change in compensation, on December 13, it confirmed that Si -had been maneUvering to transfer all of the Holy Spirit work to Si through a family relationship between a direct employee of Si and Dr. Wolf at Holy Spirit. On December 16th, Si stated that it was not able to pay Opus for November fees. On the next day, Dec. 17th, 2013 Mr. Antonelli conveyed Opus' consent to the new payment proposal. Immediately and on the same day, a check for the full amount was released to Opus. On December 20, the check was received. It was deposited on December 23. In mid December 2013, through a happenstance conversation with Mr. Hunt, Opus learned of the existence of the agreement between Si and 4Web and, in particular, of the cap on the price to Holy Spirit. Opus informed 4Web that it was not aware of the cap and had been charging Holy Spirit what it believed to be the fair market value of the product. This disclosure was necessary as failure to disclose exactly what was being charged could be construed as Opus being complicit in a direct breach of a contract entered into between S1 and 4Web. January 17, 2014 Page 3 In late December, 4Web conducted an audit with Holy Spirit and determined the full extent of S1's breach. On December 30, 4Web terminated its agreement with 51. On the same day, Si stopped payment on the check to Opus. On December 31, Si sent a letter to Opus brazenly blaming it for 4Web's termination, even though Opus was not even aware of the agreement between Si and 4Web and even though S1 had, for a number of months, billed Holy Spirit for an amount known by it to be directly in breach of its (not Opus') agreement with 4Web. In light of Sts actions in stopping payment, making false allegations, the false letter from its counsel on December 13 and S1's aggressively interfering with Opus' relationships at Holy Spirit, Opus promptly terminated its relationship with S1. On January 3, Opus sent a demand letter for payment of the November and December fees. On the same date, Robert Morris proposed that the parties meet to discuss separation. Mr. Antonelli responded with three possible dates. No response to this proposal or to the demand letter has since been received. Mr. Antonelli, as was known and acknowledged in writing by Si in March 2011, had a longstanding, strong relationship with several surgeons. These surgeons, in the words of S1's counsel at the time, "had extreme confidence in him, and enjoyed working with him." One of those surgeons was Dr. Wolf, at Holy Spirit. Opus has recently learned that S1 has told 4Web and probably Dr. Wolf that Opus knew of the contractual restriction and that it was responsible for the breach. 51 has further taken steps to interfere with and effectuate the termination of the relationship between Dr. Wolf and Opus. S1's false statements and its interference with Opus' longstanding surgeon and hospital relationships exposes Si to a significant claim for damages. Opus' profits from Holy Spirit exceeded $1 million per year. Based on history and the ages of the principals, these profits will be lost for at least ten years. Because of the likelihood of punitive damages from the tortious interference, the claim against your clients will be for an amount an excess of this. My clients have strong substantive claims, compelling third party witnesses, significant damages and the resources to bring this matter to judicial resolution. They are, however, willing to discuss an amicable separation and resolution, but that must be based upon two fundamental premises: (1) immediate payment of the November and January 17, 2014 Page 4 December fees to Opus; and (2) payment of 20% commissions to Opus on all sales to Holy Spirit for a period of five years. If you wish to discuss the matter, please contact me at your convenience. Very truly yours, McNEES WALLACE & NURICK LLC By ARB Alan R. Boynton, Jr. 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, postage prepaid, upon the following: Sidney L. Gold, Esq. Sidney L. Gold & Assoc., P.C. 1835 Market Street, Suite 515 Philadelphia, PA 19103 Dana Windisch Chilson Attorneys for Plaintiff Dated: September 11, 2014 TO: Plaintiff You are hereby notified to plead to the within Preliminary Objections within twenty (20) days from service hereof or a ult judgment may be entered against you. SIDNEY L. GOLD & ASSOCIATES, P.C. Sidney L. Gold, Esquire I.D. No. 21374 1835 Market Street - Suite 515 Philadelphia, PA 19103 (215) 569-1999 OPUS SURGICAL, LLC, V. Si SPINE, LLC Plaintiff; Defendant. • • • • • • • • Attorneys for Defendant -0 c-) COURT OF COMMON PIAS CUMBERLAND COUNTY CIVIL CIVIL TRIAL DIVISION NO.: 14-3671 : JURY TRIAL DEMANDED PRELIMINARY OBJECTIONS OF DEFENDANT Si SPINE, LLC TO THE AMENDED COMPLAINT OF PLAINTIFF OPUS SURGICAL, LLC Pursuant to Pennsylvania Rule of Civil Procedure 1028(a), Defendant Si Spine, LLC ("SI"), by and through its undersigned counsel, Sidney L. Gold & Associates, P.C., hereby asserts these preliminary objections to the Amended Complaint filed by Plaintiff Opus Surgical, LLC ("Opus"). In support of its preliminary objections, Si states as follows: I. RELEVANT BACKGROUND 1 On September 10, 2014, Opus Surgical, LLC ("Opus") filed an Amended Complaint against Defendant Si in the Court of Common Pleas of Cumberland County. 2. In its Amended Complaint, Opus describes the business relationship between Si and Opus. (See Plaintiff's Amended Complaint attached hereto and marked as "Exhibit A."). 3. Si and Opus were engaged in an independent contractor relationship. (See Exhibit A at irf 11, 14 and 16). 4. Opus asserts causes of action against S1 for Breach of Contract (Count I), Unjust Enrichment (Count II), Tortious Interference with Current and Prospective Contractual Relations (Count III), Defamation (Count IV), Breach of Fiduciary Duty (Count V), and Business Disparagement (Count VI). (See Exhibit A). 5. As set forth in detail below, Sits preliminary objections to Counts III and V of Opus' Amended Complaint should be sustained pursuant to Pennsylvania Rule of Civil Procedure 1028(a). II. PRELIMINARY OBJECTIONS A. Preliminary Objections to Count III of Plaintiff's Amended Complaint Pursuant to Pa.R.Civ.P. 1028(a)(4) - Legal Insufficiency of a Pleading 6. Si incorporates by reference paragraphs 1 through 5 as if fully set forth herein. 7. Preliminary Objections should be sustained pursuant to Pennsylvania Rule of Civil Procedure 1028(a)(4) where the Complaint fails to state a claim upon which relief can be granted. See Tucker v. Philadelphia Daily News, 757 A.2d 938, 941-42 (Pa. Super. 2000). 2 8. Under Pennsylvania law, if the complaint indicates on its face that the claim is legally insufficient and that the law will not permit recovery, the court must sustain the demurrer. Hydrair, Inc. v. National Environmental Balancing Bureau, 2000 Phila. Ct. Corn. Pl. LEXIS 72, *3 (Phila. Ct. Corn. Pl. July 27, 2000), citing Pa. R.C.P. 1028(a); Smith v. Wagner, 588 A.2d 1308, 1310 (Pa. Super. Ct. 1991). 9. In the instant matter, Opus has failed to allege sufficient facts to make out a claim based on Tortious Interference with Current Contractual Relations as set forth in Count III of its Amended Complaint. 10. The elements of a cause of action for Tortious Interference with Current Contractual Relations are: (1) the existence of a contractual relation between the complainant and a third party; (2) purposeful action on the part of the defendant, specifically intended to harm the existing relation; (3) the absence of privilege or justification on the part of the defendant; and (4) the occasioning of actual legal damage as a result of the defendant's conduct. Pawlowski v. Smorto, 588 A.2d 36, 39-40 (Pa. Super. 1991); See also Al Hamilton Contracting Co. v. Cowder, 434 Pa. Super. 491, 497 (1994). 11. The threshold question in an action for Tortious Interference with Current Contractual Relations is whether or not there was a contract. Id. 12. Opus' Complaint fails to allege the existence of a contract between Dr. Wolf and Opus. 13. Therefore, the Amended Complaint has not stated a claim upon which relief can be granted with respect to Tortious Interference with Current Contractual Relations and Defendant's preliminary objections must be sustained. Rutherfoord v. Presbyterian - University Hospital, 417 Pa. Super. 316, 332 (1992) (stating that the existence of a contractual relationship between the plaintiff and a third person is an essential element of tortious interference). WHEREFORE, SI respectfully requests that the Court sustain its preliminary objection and dismiss Count III of Opus' Amended Complaint with prejudice. herein. B. Preliminary Objections to Count III of Plaintiff's Amended Complaint Pursuant to Pa.R.Civ.P. 1028(a)(3) - Factual Insufficiency of a Pleading 14. S1 incorporates by reference paragraphs 1 through 13 as if fully set forth 15. The Pennsylvania Rules of Civil Procedure allow a party to file Preliminary objections based upon insufficient specificity in a pleading. Pa.R.Civ.P. 1028(a)(3). 16. Rule 1019(a) requires that the complaint synopsize the essential facts to support the claim. Krajsa v. Keypunch, Inc., 424 Pa. Super. 230, 235 (1993) (recognizing that "liberal construction" of the Rules of Civil Procedure does not entail total disregard of those rules concerning pleading). 4 17. Opus' allegations do not include a sufficiently specific description of those acts which Plaintiff claims support its claim for Tortious Interference with Current and Prospective Contractual Relations. 18. The elements of a cause of action for Tortious Interference with Current Contractual Relations are: (1) there is an existing contractual relationship between the plaintiff and a third party; (2) the defendant interfered with the performance of that contract by inducing a breach or otherwise causing the third party not to perform; (3) the defendant was not privileged to act in this manner; and (4) the plaintiff suffered pecuniary loss as a result of the breach of contract. Al Hamilton Contracting Co., 434 Pa. Super. at 497. 19. Opus' Amended Complaint fails to allege facts to support its claim that Opus was entitled by contract to the benefit of Dr. Wolf s business in that the Amended Complaint does not allege that there was a contract between Opus and Dr. Wolf. 20. To set forth a legally sufficient cause of action for Tortious Interference with Prospective Contractual Relations, the following elements must be pled: (1) the existence of a prospective contractual relation between the complainant and a third party: (2) purposeful action on the part of the defendant, specifically intended to prevent a prospective relation from occurring; (3) the absence of privilege or justification on the part of the defendant; and (4) the occasioning of actual legal damage as a result of the defendant's conduct. Id. 5 21. Opus' Amended Complaint does not include sufficient factual allegations to support its claim for Tortious Interference with Prospective Contractual Relations since it only asserts vague and uncertain suggestions that Si engaged in some harmful act. 22. By way of example, the Amended Complaint claims that "upon information and belief' Si "made a "financial proposal" to Dr. Wolf to cause him to cease business dealings with Opus. (Exhibit A at 1141). 23. The aforesaid act is not described with any degree of certainty or detail and it does not have any factual connection to the actual legal damage allegedly suffered by Plaintiff as a result of the Defendant's conduct. 24. Similarly, the Amended Complaint claims Robert Morris told Dr. Wolf that Opus was responsible for a breach of agreement between 4Web and Si (Exhibit A at ¶56), yet fails to describe with any degree of certainty or detail how this conduct caused any actual legal damage to Plaintiff. 25. Accordingly, for all the above reasons, Opus' Amended Complaint with respect to its claim of Tortious Interference with Current and Prospective Contractual Relations is factually deficient. WHEREFORE, Si respectfully requests that the Court sustain its preliminary objection and dismiss Count III of Opus' Amended Complaint with prejudice. 6 C. Preliminary Objections to Count V of Plaintiffs Amended Complaint Pursuant to Pa.R.Civ.P. 1028(a)(4) - Legal Insufficiency of a Pleading 26. Si incorporates by reference paragraphs 1 through 25 as is fully set forth herein. 27. In Count V of its Amended Complaint, Opus purports to allege a cause of action against Si for breach of fiduciary duty. 28. While Opus asserts numerous times that the relationship that existed between Opus and 51 was that of independent contractors, it additionally alleges that S1 was an agent of Opus, and accordingly owed a fiduciary duty to Opus. (Exhibit A at ¶¶ 11, 14, 16, and 17) 29. Inasmuch as Opus and Si had independent contractor relationships with one another, Opus' claim that Si breached its fiduciary duty to Opus fails as a matter of law, as no fiduciary duty existed. Further, Opus fails to plead sufficient facts to establish that Si was, in fact, Opus' agent. 30. In order for a fiduciary duty to exist between two entities, the party asserting that such a duty exists, must prove that there is an agency relationship between the parties. Scott v. Purcell, 415 A.2d 56, 61 n. 8 (Pa. 1980). 7 31. Not every act that one party may take on another's behalf, however, gives rise to an agency relationship. Basile v. H&R Block, 761 A.2d 1115 (Pa. 2000). Specifically, "[t]he special relationship arising from an agency agreement, with its concomitant heightened duty, cannot arise from any and all actions, no matter how trivial, arguably undertaken on another's behalf. Rather, the action must be a matter of consequence or trust, such as the ability to actually bind the principal or alter the principal's legal relations." Id. at 1121. 32. Other than simply stating that Si is an agent of Opus, Opus has failed to plead any facts to demonstrate that Si was in a position of power great enough to bind Opus in any legal relations or relationships with third parties. 33. Si and Opus had an independent contractor relationship, and as such, had an arm's length relationship with one another. See In re Anonymous No. 140 D.B 89, 1993 Pa. LEXIS 374 at 8-9 (1993) (stating that "'arms -length' transactions can be entered into by ...independent contractors..."). "An arms -length transaction, by definition, is one wherein the parties thereto negotiate on equal footing or terms, neither party exercising control or undue influence on the other." Id. at 8. 34. Under Pennsylvania law, parties to contracts that are entered into at arms - length, such as the agreement entered into between Opus and Si, do not owe each other fiduciary duties absent a special relationship giving rise to a fiduciary duty. See Etoll, Inc. v. Elias/Savion Advertising, Inc., 811 A.2d 10, 22-23 (Pa. Super. Ct. 2002) (citing Valley Forge Convention & Visitors Bureau v. Visitor's Servs., Inc., 28 F. Supp. 2d 947, 952-53 (E.D. Pa. 1998) ("if parties to routine arms length commercial transactions for the 8 provision of needed goods or services were held to have a "special relationship," virtually every breach of such a contract would support a tort claim [for breach of fiduciary duty].")); see also Elliot v. Clawson, 204 A.2d 272, 273 (Pa. 1964) (no special relationship between parties to arms length business contract). 35. Further, "[a] confidential or fiduciary relationship does not exist merely because one party relies on and pays for the specialized skill or expertise of the other party. MRED General Partner, LLC v. Tower Economics Company, Inc., 2005 Phila. Ct. Corn. P1. LEXIS 124 at 5-6 (2005). 36. Opus does not, and cannot plead a "weakness, dependence, or trust, justifiably reposed" on Si in the course of its contractual relationship with Si, and accordingly cannot prove the existence of a fiduciary duty that either party had towards the other. Etoll, 811 A.2d at 23. 37. Accordingly, in light of the fact that the relationship between Opus and Si was that of independent contractors and as such was an arms -length relationship, Count V of Opus' Amended Complaint should be dismissed with prejudice pursuant to Pennsylvania Rule of Civil Procedure 1028(a)(4). WHEREFORE, S1 respectfully requests that the Court sustain its preliminary objection and dismiss Count V of Opus' Amended Complaint with prejudice. herein. D. Preliminary Objections to Count V of Plaintiff's Amended Complaint Pursuant to Pa.R.Civ.P. 1028(a)(4) - Legal Insufficiency of a Pleading 38. SI incorporates by reference paragraphs 1 through 37 as is fully set forth 9 39. Count V of Opus' Amended Complaint alleges a tort cause of action against Si. 40. Opus' tort claim is barred by the "gist of the action" doctrine because this claim arises solely from the contract between Opus and S 1. 41. The "gist of the action" doctrine provides that "when a plaintiff alleges that the defendant committed a tort in the course of carrying out a contractual agreement, Pennsylvania courts examine the claim and determine whether the 'gist' or gravemen of it sounds in contract or tort." Freestone v. New England Log Homes, Inc., 819 A.2d 550, 554 (Pa. Super. Ct. 2003) (quoting Yocca v. Pittsburgh Steelers Sports, Inc., 806 A.2d 936, 944 (Pa. Commw. Ct. 2002)). 42. Further, the "gist of the action" doctrine is designed to maintain the conceptual distinction between breach of contract and tort claims." Pennsylvania Manufacturers' Assoc. Ins. Co. v. L.B. Smith, Inc., 831 A.2d 1178, 1182 (Pa. Super. Ct. 2003) (quoting Etoll, Inc. v. Elias/Savion Advertising, Inc., 811 A.2d 10, 14 (Pa. Super. Ct. 2002)). 43. In determining whether a cause of action arising from a contractual relationship can be maintained in tort, Pennsylvania courts have held that the "wrong ascribed to the defendant must be the gist of the action with the contract being collateral. Redevelopment Authority of Cambria County v. Int'l Ins. Co., 685 A.2d 581, 590 (Pa. Super. Ct. 1996). 10 44. Here, Opus' tort claim is inextricably linked to the contract it had with Si because its tort claims are based upon the same conduct that forms the basis for Opus' breach of contract claim. 45. Accordingly, in light of the fact that the "gist of the action" doctrine bars Opus' tort claim, Count V of Opus' Amended Complaint should be dismissed with prejudice pursuant to Pennsylvania Rule of Civil Procedure 1028(a)(4). WHEREFORE, Si respectfully requests that the Court sustain its preliminary objection and dismiss Count V of Opus' Amended Complaint with prejudice. By: DATED: October 1, 2014 SIDNEY L. GOLD & ASSOC., P.C. SIDNEY L. GOLD, ESQUIRE Attorney I.D. NO: 21374 1835 Market Street, Suite 515 Philadelphia, PA 19103 (215) 569-1999 Attorney for Defendant 11 VERIFICATION I, Sidney L. Gold, Esquire verify that I am the attorney for the Defendant, in this matter and that I am authorized to take this verification on behalf of the Defendant. I verify also that the facts stated in the attached Preliminary Objections are true and correct to the best of my information, knowledge and belief. I understand that the statements herein are made subject to the penalties of 18 Pa. C.S. Section 4904, relating to unsworn falsification to authorities. SIDNEY L. GOLD & ASSOP. SIDNEY L. GOLD, ESQUIRE Attorney for Defendant ,S1 Spine, LLC Dated: October 1, 2014 CERTIFICATE OF SERVICE I hereby certify that on this date I caused a true and correct copy of Defendant's Preliminary Objections to Plaintiffs Amended Complaint to be served by e-mail and United States Mail, First Class Service, properly addressed and postage prepaid, upon the following: Alan R. Boynton, Jr. Dana W. Chilson McNees Wallace & Nurick, LLC 100 Pine Street P.O. 1166 Harrisburg, PA 17108-1166 717-232-80001 Phone aboynton@mwn.com Attorneys for Plaintiff, Opus Surgical, LLC By: DATED: October 1, 2014 SIDNEY L. 6LD & ASSOC., P.C. SIDNEX L. GOLD, ESQUIRE Attorney I.D. NO: 21374 1835 Market Street, Suite 515 Philadelphia, PA 19103 (215) 569-1999 Attorney for Defendant, S1 Spine, LLC Alan R. Boynton, Jr. Attorney LD. No. 39850 Dana W. Chilson Attorney I.D. No. 208718 McNees Wallace & Nurick LLC 100 Pine Street 717-232-8000 P.O. Box 1166 Harrisburg, PA 17108-1166 Attorneys for Plaintiff Opus Surgical, LLC al/le/Wed Coqlag/ OPUS SURGICAL, LLC, : IN THE COURT OF COMMON PLEAS Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V. : CASE NO. S 'I SPINE, LLC, Defendant : CIVIL ACTION NOTICE 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, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 32 S. Bedford Street Carlisle, Pennsylvania 717-249-3166 ( DEFENDANT'S g EXHIBIT Respectfully submitted, McNees lace & Nurick LLC By Alan R. Boynton, Jr. Attorney ID No. 39850 Dana W. Chilson Attorney ID No. 208718 100 Pine Street P.O. Box 1166 Harrisburg, PA 17108-1166 Phone: (717) 232-8000 Attorneys for Plaintiff Opus Surgical, LLC Dated: September 11, 2014 Alan R. Boynton, Jr. Attorney I.D. No. 39850 Dana W. Chilson Attorney I.D. No. 208718 McNees Wallace & Nurick LLC 100 Pine Street 717-232-8000 P.O. Box 1166 Harrisburg, PA 17108-1166 Attorneys for Plaintiff Opus Surgical, LLC OPUS SURGICAL, LLC, : IN THE COURT OF COMMON PLEAS Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA v. : CASE NO, 14-3671 Si SPINE, LLC, Defendant : CIVIL ACTION AMENDED COMPLAINT Plaintiff Opus Surgical, LLC, by and through its undersigned counsel, hereby files this Amended Complaint against Defendant Si Spine, LLC, and in support thereof avers as follows: FACTUAL BACKGROUND A. The Parties and Venue 1. Plaintiff Opus Surgical, LLC ("Opus") is a Pennsylvania limited liability company with a principal place of business located at 601 Southridge Drive, Mechanicsburg, Pennsylvania 17055. 2. Opus is in the business of selling medical devices to medical professionals, and is wholly owned by Robert and Caroline Antonelli. 3. Defendant Si Spine, LLC ("S1") is a Pennsylvania limited liability company with a registered address of 4001 1st Avenue, Lafayette Hill, Pennsylvania 19444. Robert Morris is the principal member of S1. 4. Venue is proper in this Court pursuant to Pa.R.C.P. 2179(a)(3) and (4). B. The Relationship Between Opus and S1 5. Robert Antonelli has been in the business of selling medical products to physicians since 1992. 6. Between October 2004 and January 2010, Robert Antonelli was a principal for L5 Surgical, which distributed products for Globus Medical Co. 7. In January 2010, Robert Antonelli left Globus and began compliance with a one year noncompetition agreement with Globus. 8, In September 2010, a court determined that the noncompetition agreement with Globus was no longer enforceable. Contemporaneously therewith, Robert and Caroline Antonelli formed Opus. 9. In or about October 2010, Si approached Opus and proposed that Opus sell medical products for Si. Pursuant to the proposed arrangement, Opus would keep 80% of the monies collected from vendors and hospitals from sales of products, and S1 would keep 20% of the proceeds. Si proposed handling contract negotiations with vendors, billing and invoicing vendors and hospitals, and collecting all monies due. 10. Upon information and belief, S1 sought to engage Antonelli to take advantage of his contacts in the spinal surgery field, especially with Dr. Steven Wolf ("Dr. Wolf") at Holy Spirit Hospital and Dr. Stan Grabias ("Dr. Grabias") at Reading Hospital, and to gain entry into the market for the sale of spinal products to medical professionals. 11. Opus initially agreed to the approach proposed by S1 and the parties proceeded under an independent contractor relationship consistent with the approach proposed by Si for a period of three months. 12. In January 2011, the parties renegotiated the arrangement. It was orally agreed to establish an annual management fee of $225,000, to be paid to Si on a monthly basis of $18,750 per month. Si agreed to continue to handle Opus' billing processes, to 2 purchase and pay for products acquired from third party vendors and sold by Opus, to handle collections of account receivables, and to negotiate and manage third party vendor contracts. 13. Under the revised agreement, after payment of (1) the monthly management fee of $18,750 to Si, and (2) the costs of products sold by Opus, Si would pay to Opus 100% of all remaining sums. Opus would also be paid any commissions paid by third party vendors for the sale of their products by Opus. 14. As with the initial agreement, Opus remained an independent contractor and the parties did not execute noncompetition or nondisclosure agreements. 15. The parties complied with the terms of the revised agreement from February 2011 through November 2013. 16. The relationship between SI and Opus during this period was as independent contractors, with no rights of exclusivity, no limitations on termination, and no obligations other than as described above. 17. Although an independent contractor, S1 served as Opus' agent in S1's performance of its management agreement obligations, particularly in its interactions with Opus' vendors and Opus' clients, including Reading Hospital, Holy Spirit Hospital, and Dr. Wolf. In these interactions, then, S1, had a fiduciary duty to act in the best interest of Opus and to not undermine Opus' relationships with its clients. C. 4Web 18. In early 2013, Opus became familiar with 4Web, a Texas-based manufacturing company owned by Jessee Hunt. 19. 4Web manufactures advanced medical devices and was interested in selling its products in central Pennsylvania. 3 20. Opus believed that 4Web's products were attractive and decided to sell them to physician clients of Opus. 21. To effectuate the arrangement, and because S1 was handling Opus' purchases from third party vendors, Opus introduced 4Web to Si. 22. Shortly thereafter, Opus began to sell 4Web's products and Si handled the billings and collections relating to Opus' sale of 4Web's products. 23. Opus sold 4Web products to Holy Spirit Hospital at what Opus believed was a market appropriate price. It advised Si of the price. 24. Consistent with the terms of the revised agreement, when Opus sold 4Web products, S1 collected payment from the applicable buyer (Holy Spirit Hospital) and paid 4Web for the cost of its products from this payment. Si then paid Opus the difference. 25. Opus had no agreement with, or obligations to, 4Web. 26. At some point in mid 2013, but unbeknownst to Opus, Si entered into a written contract directly with 4Web ("the S1/4Web Agreement"). 27, To date, Opus has not been provided a copy of the S1/4Web Agreement. 28. Upon reasonable belief, the S1/4Web Agreement confirmed that S1 was a distributor of 4Web products, specifically for the 4Web ALIF Truss device and the 4Web Cervical Truss device. 29. Upon reasonable belief, but unknown to Opus until December 2013, 4Web and Si agreed that S1 would not charge more than $4,050 for the sale of 4Web's ALIF Truss device and no more than $1,000 for 4Web's Cervical Truss device. 30. Prior to entry into the S1/4Web Agreement, S1 knew that Opus had been selling 4Web's products for considerably more than was agreed to by Si and 4Web but continued to bill and collect payment from Holy Spirit Hospital at a price higher than Si and 4Web had agreed to charge. 4 31. Neither Si nor 4Web informed Opus of their agreement or of the pricing limitations relating to the ALIF Truss device and the 4Web Cervical Truss device. 32. Opus had no agreement with Si which in any way limited the amounts which Opus could charge for the sale of products to any purchaser. 33. Without knowledge of any cap on what could be charged by it, Opus continued to charge $8,900 for the 4Web ALIF Truss device and $2,450 for the 4Web Cervical Truss device, which Opus believed to be the fair market value for those products. 34. S1, which did know about the billing restriction, nevertheless billed Opus client Holy Spirit Hospital, which purchased the 4Web products, $8,900 for the ALIF product and $2,450 for the Cervical product sold by Opus. D. Sl's Unilateral Change to the Agreement 35. In the fall of 2013, Si insisted on renegotiating the terms of the revised agreement, particularly in relation to Opus sales to Holy Spirit Hospital. 36. Under the new arrangement proposed by Si, Si would continue to provide management services to Opus. However, it would reduce its monthly management fee by 50% and Opus would no longer receive all of the monies collected from vendors and Holy Spirit Hospital, Instead, Opus would receive only a 20% commission, with S1 keeping 80% of all sums received beyond the costs of the products. 37. Since acceptance of the terms proposed by Si would result in an estimated 60% decrease in revenues to Opus, Opus initially declined to renegotiate the agreement. 38. On November 20, 2013, Si reiterated its demand that Opus accept the changes to the compensation structure, and stated that the change would occur effective December 1, 2013. 39. When Opus did not respond to S1's demand to change the terms of the Agreement, Si called a meeting on November 27, 2013 at Holy Spirit Hospital. During that 5 meeting, Si personnel made clear that Opus had no choice but to accept the new arrangement because "the leverage had shifted" with Mr. Antonelli's contacts at Holy Spirit Hospital, that Si now had the leverage in the relationship, and that SI could squeeze out Opus if it so desired. 40. Subsequent to the November 27, 2013 meeting, Opus learned that Si had been maneuvering to transfer all of the Holy Spirit Hospital work to S1 through a family relationship between a direct employee of Si, who was Dr. Wolfs son. 41. Upon information and belief, Si also made a financial proposal to Dr. Wolf which would allow him to considerably increase his revenues if it dealt directly with SI and eliminated his relationship with Opus. 42. When Opus had still not accepted the revised terms, on December 16, 2013, S1 informed Opus that Si was not able to pay Opus for its November 2013 fees, which amounted to $194,597. 43. Opus believed that SI was refusing payment until Opus confirmed its acceptance of the modified revised agreement and, on December 17, 2013, despite his reservations regarding the new terms, Mr. Antonelli conveyed Opus' consent to the new payment proposal. 44. Confirming Opus' belief as to the reasons for the delay in payment, on the same day that Opus agreed to modify the Agreement, S1 issued a check for the full amount of the November 2013 commissions and sent it to Opus. 45. Opus received the S1 check on Friday, December 20, 2013 and deposited the check on the next business day, Monday, December 23, 2013. 6 E. 4Web's Relationship With S1 46. In mid-December 2013, Opus, through a happenstance conversation with the President of 4Web, learned of the existence of the S1/4Web Agreement and, in particular, the cap on the price to Holy Spirit Hospital for the ALIF Truss device and the 4Web Cervical Truss device. 47. To avoid complicity in a potential breach of contract, Opus promptly informed 4Web that it was not aware of the cap and had been charging Holy Spirit Hospital what it believed to be the fair market value of the products. 48. Upon information and belief, in mid December 2013, 4Web conducted an investigation and determined the full extent of S1's breach. 49. Upon information and belief, on December 30, 2013, 4Web informed SI that it was terminating the S1/4Web agreement. 50. On December 30, 2013, without any reason or notice to Opus, but upon receiving notice of termination from 4Web, Si put a stop payment on the check which it had sent to Opus. 51. On December 31, 2013, Si sent a letter to Opus brazenly blaming it for 4Web's termination, even though Opus was not even aware of the S1/4Web Agreement and even though S1 had, for a number of months, billed Holy Spirit Hospital for an amount directly and knowingly in breach of the S1/4Web Agreement. F. Opus' Termination of the Agreement 52. In light of S1's actions in stopping payment of the November 2013 commissions, making false allegations relating to S1's breach of its agreement with 4Web, and aggressively interfering with Opus' relationships at Holy Spirit Hospital, Opus terminated its relationship with Si, effective December 31, 2013. 7 53. In addition to the November 2013 commissions, S1 has additionally failed to pay Opus its commissions for December 2013, which amount to $67,553. 54. On January 3, 2014, Opus sent S1 a demand letter for payment of the November 2013 and December 2013 fees. A true and correct copy of the January 3, 2014 letter is attached hereto as Exhibit A. 55. In mid-January 2014, Opus learned that Robert Morris of S1 falsely told Jessee Hunt of 4Web that Opus knew of the contractual restriction regarding the ALIF Truss device and the Cervical Truss device, and that Opus was responsible for the breach of the agreement between 4Web and S1. 56. Upon information and belief, in mid-January 2014 or shortly thereafter, Robert Morris falsely told Dr. Wolf, with whom Mr. Antonelli previously had a longstanding, strong relationship, that Opus knew of the contractual restriction regarding the ALIF Truss device and the Cervical Truss device, and that Opus was responsible for the breach of the agreement between 4Web and S1. 57. Shortly thereafter, Dr. Wolf informed Opus that he was terminating his relationship with Opus and was switching all of his business to Si. 58. The loss of business with Dr. Wolf and Holy Spirit Hospital has resulted, and will result, in significant financial harm to Opus. COUNT I BREACH OF CONTRACT 59. Plaintiff incorporates herein by reference paragraphs 1 through 58, above, as if set forth fully herein. 60: Pursuant to Pa.R.C.P. No. 1019(h), Opus bases this count on the terms of the oral revised agreement, as set forth above. 61. Pursuant to the terms of the revised agreement, Si owes to Opus the sum of $262,150.00 for November 2013 and December 2013 commissions. 62. As set forth at length above, S1 has failed and refused to pay Opus its November 2013 and December 2013 commissions. 63. Si has breached its contractual obligations to Opus by failing to pay Opus the sums due and owing to Opus pursuant to the revised agreement. 64. Opus has been damaged by S1's breach of its contractual obligations. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant S1 Spine, LLC in the sum of $262,150.00, an amount outside the courts compulsory arbitration limits, plus interest and costs as allowed by law. COUNT II UNJUST ENRICHIVIENT 65. Plaintiff incorporates herein by reference paragraphs 1 through 58, above, as if set forth fully herein. 65. As described more fully above, Si has received from customers of Opus the sum of $262,150.00 beyond the costs of products sold by Opus and the management fee owed to S1 for November and December 2013. 67. As described more fully above, S1 has been unjustly enriched in the amount of $262,150.00. 68. Si was aware of and fully recognized that it owed Opus the sum of $262,150.00 for November 2013 and December 2013 commissions. 69. Si benefited from failing to pay Opus the sums due and owing to it. 70. S1 has been unjustly enriched from said benefit by not paying Opus the sums due and owing to it. 9 71. An inequity will result if Si is not required by pay Opus the sums due and owing to it. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant S1 Spine, LLC and an award of damages in the sum of $262,150.00, an amount outside the court's compulsory arbitration limits, plus interest and costs as allowed by law. COUNT III TORTIOUS INTERFERENCE WITH CURRENT AND PROSPECTIVE BUSINESS RELATIONS 72. Plaintiff incorporates herein by reference paragraphs 1 through 58, above, as if set forth fully herein. 73. Opus had a long standing relationship with Dr. Wolf, in which Opus would sell, and Dr. Wolf and Holy Spirit Hospital would purchase, medical equipment sold by Opus. 74. The relationship with Dr. Wolf existed long before any relationship between Opus and S1. 75. The aforesaid actions of Si, including, but not limited to, Sl's negotiation, then willful breach, of the S1/4Web Agreement, S1's false and misleading statements to Dr. Wolf regarding Opus' sale of the ALIF Truss device and the Cervical Truss device, together with Sts intentional and active undermining of the relationship even while being paid by Opus to provide management services to support the relationship between Opus and Dr. Wolf, constitute intentional and willful interference with Opus' current relationship with Dr. Wolf. 76. The aforesaid actions of S1 also constitute intentional and willful interference with Opus' prospective relationship with Dr. Wolf. 10 77. S1's actions were without justification or privilege. 78. As a result of Sts actions, Opus has been damaged, and will continue to be damaged, in that Opus will suffer lost revenue, profits, and customer goodwill. 79. As a result of S1's actions, Opus has lost, and reasonably anticipates continued loss of, substantial revenues. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant Si Spine, LLC, an award of damages in an amount outside the court's compulsory arbitration limits, an accounting of all funds paid by Holy Spirit Hospital to Si, an accounting of all funds paid by Si and related entities to Dr. Wolf, plus interest and costs as allowed by law. COUNT IV DEFAMATION 80. Opus incorporates herein by reference paragraphs 1 through 58, above, as if set forth fully herein. 81. This claim is for defamation in violation of the common law of the Commonwealth of Pennsylvania and 42 Pa.C.S.A. § 8343. 82. In January 2014, Robert Morris, the principal member of S1, stated to Jessee Hunt of 4Web, that Opus knew of the S1/4Web contractual restriction regarding the ALIF Truss device and the Cervical Truss device, and that Opus was responsible for S1's breach of the arrangement between 4Web and Si. Such a statement is objectively false and defamatory in nature. 83. In January 2014, Robert Morris, the principal member of Si, stated to Dr. Wolf, who is Opus' principal contact at Holy Spirit, that Opus knew of the S1/4Web contractual restriction regarding the ALIF Truss device and the Cervical Truss device, and 11 that Opus was responsible for Sl's breach of the arrangement between 4Web and Sl. Such a statement was objectively false and defamatory in nature. 84. The defamatory statements were not true, privileged, or a matter of public concern. 85. Robert Morris knew and appreciated the defamatory nature of the aforementioned statements. 86. These defamatory statements caused substantial harm to the reputation of Opus among Dr. Wolf and „lessee Hunt of 4Web. 87. These defamatory statements directly resulted in the termination of Opus' relationship with at least Holy Spirit and Dr. Wolf. 88. As a result of Robert Morris' statements, Opus has been damaged, and will continue to be damaged, in that Opus will suffer lost revenue, profits, and customer goodwill. 89. As a result of Robert Morris' statements, Opus reasonably anticipates continued loss of substantial revenues for an extended period of time. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant S1 Spine, LLC and an award of damages in an amount outside the court's compulsory arbitration limits, plus interest and costs as allowed by law. COUNT V BREACH OF FIDUCIARY DUTY 90. Opus incorporates herein by reference paragraphs 1 through 58, above, as if set forth fully herein. 91. As described at length above, the relationship between S1 and Opus was such that Opus authorized (either expressly or by implication) S1 to act as its agent, 12 particularly in its interactions with Opus' vendors and Opus' clients, including Reading Hospital, Holy Spirit Hospital, and Dr. Wolf. 92. Si, as Opus' agent under the terms of the revised agreement, owed a fiduciary duty to Opus to not undermine its relationship with its customers and clients. 93. Si, while performing its obligations under the revised agreement, intentionally sought to, and succeeded in, undermining and interfering with Opus' relationship with Holy Spirit Hospital and Dr. Wolf. 94. S1's objective in undermining the relationship between Opus and Holy Spirit and Dr. Wolf was to appropriate that relationship and to attain revenues which would otherwise have been earned by Opus. 95. S1's conduct was successful in getting Holy Spirit and Dr. Wolf to terminate their relationship with Opus and to transfer all such work to S1. 96. S1's conduct constituted a breach of its fiduciary duty to Opus. 97. S1's breach of its fiduciary duty to Opus has caused, and will cause, significant damages to Opus. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant Si Spine, LLC, and award damages in an amount outside the court's compulsory arbitration limits, plus interest and costs as allowed by law. COUNT VI BUSINESS DISPARAGEMENT 98. Opus incorporates herein by reference paragraphs 1 through 58, above, as if set forth fully herein. 99. In January 2014, Robert Morris, the principal member of Si, stated to Jessee Hunt of 4Web, that Opus knew of the S1/4Web contractual restriction regarding the ALIF Truss device and the Cervical Truss device, and that Opus was responsible for Sts breach 13 of the arrangement between 4Web and S1. Such a statement is objectively false and defamatory in nature. 100. In January 2014, Robert Morris, the principal member of S1, stated to Dr. Wolf, who is Opus' principal contact at Holy Spirit, that Opus knew of the S1/4Web contractual restriction regarding the ALIF Truss device and the Cervical Truss device, and that Opus was responsible for S1's breach of the arrangement between 4Web and Si. Such a statement was objectively false and defamatory in nature. 101. The statements were not true, privileged, or a matter of public concern. 102. Robert Morris knew the aforementioned statements were not true. 103, These disparaging statements caused harm to the reputation of Opus among Dr. Wolf and Jessee Hunt of 4Web. 104. These disparaging statements directly resulted in the termination of Opus' relationship with Holy Spirit and Dr. Wolf. 105. As a result of Robert Morris' statements, Opus has been damaged, and will continue to be damaged, in that Opus has already and will in the future suffer loss of revenue, profits, and customer goodwill. 106. As a result of Robert Morris' statements, Opus has suffered loss of substantial revenues and will continue to suffer loss of substantial revenues. 107. S1 is liable for business disparagement in violation of the common law of the Commonwealth of Pennsylvania. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court enter judgment in its favor and against Defendant Si Spine, LLC, an award of damages in an amount outside the court's compulsory arbitration limits, plus interest and costs as may be allowed by law. 14 Dated: September 11, 2014 MCNEES WALLACE & NURICK LLC By Alan R. Boy ton, J Attorney ID No. 39850 Dana W. Chilson Attorney ID No. 208718 100 Pine Street P. O. Box 1166 Harrisburg, PA 17108-1166 Phone: (717) 232-8000 Fax: (717) 237-5300 Attorneys for Plaintiff Opus Surgical, LLC 15 YeRilEfPf.kTIRN. thereby verity that Irm a Member of Opus Surgical, LLC and am authorized to execute this verification on its behalf. I Other verify that The facts oontalnod the foregoing Amended Complaint an! true and cermet to the beat army Information, knowledge, and belief end are made subject to the penalties of le Pa. C.S,A, § 4904 relating to unsworn falsification to authorities. Dated 5eptemberj, 2014 OPU R�bert An1nahhi cNees allace & Nurick LLC January 17, 2014 David P. Heim, Esq. BOCHETTO & LENTZ, P.C. 1524 Locust Street Philadelphia, PA 19102 Re: S 'I Spine LLC and Opus Surgical, LLC Dear Mr. Heim: ALAN R. BOYNTON, JR. DIRECT DIAL: (717) 237-5352 DIRECT FAX: (717) 260-1665 E-MAIL ADDRESS: ABOYNTON@MWN.COm We have completed our investigation and assessment of the matters identified in your letter of December 13 to Robert Antonelli, as well as other issues raised by our clients (Opus Surgical, LLC, Robert Antonelli and Caroline Antonelli) and respond as follows. Opus is in the business of selling medical devices to medical professionals. The company is wholly owned by Robert and Caroline Antonelli. Neither Mr. or Mrs. Antonelli is employed by any other entity. Approximately three years ago, Opus entered into an oral agreement with Si Spine LLC. Under the terms of the agreement, Opus was to sell products to several select surgeons. S1 was aware that Mr. Antonelli had maintained a longstanding relationship with these surgeons and that they were loyal to him. Per agreement of the parties, Opus was to receive 100% of the profits (all income beyond the cost to Si in purchasing products) collected from Reading and Holy Spirit hospitals. Si agreed to provide management services, including billing processes and collections of account receivables, as well as negotiating and managing vendor contracts. Opus agreed to pay Si a monthly management fee of $18,750. The relationship between the parties was as independent contractors, with no rights of exclusivity, no limitations on termination and no obligations other than as described above. No non -disclosure agreement was entered into between the parties and no fiduciary relationship existed. In early 2013, Opus introduced Si to 4Web, a Texas-based company owned by Jessee Hunt. 4Web manufactures state-of-the-art medical devices and was interested in selling said products in central Pennsylvania. Consistent with its arrangement with Si, all billings and collections were handled by S1. At some point later in 2013, but www.mwmcom January 17, 2014 Page 2 unbeknownst to Opus, S1 apparently entered into a contract directly with 4Web, pursuant to which Si was made a distributor of 4Web products. Those two parties agreed that Si would not charge more than $4,050 to Holy Spirit for the ALIF Truss device and no more than $1,000 for the Cervical Truss Device. Neither Si nor 4Web informed Opus of the agreement or the pricing limitation. Without knowledge of any cap on what could be charged to Holy Spirit Hospital, Opus continued to charge $8,900 for the ALIF Truss cage and $2,450 for the 4Web Cervical Truss cage. S1, which did know about the billing restriction, nevertheless billed Holy Spirit $8,900 for the ALIF product and $2,450 for the Cervical product. In the fall of 2013, S1 insisted that Opus revise the arrangement between the two companies, particularly in relation to Holy Spirit. While Si reduced the monthly management fee by 50%, it also eliminated the agreement by which Opus received all of the profits on sales to Holy Spirit. Instead, it would receive only a 20% commission. This would result in an 60% decrease in revenues to Opus. On November 20, 2013, Robert Morris reiterated S1's demand that Opus accept the changes to the compensation structure and stated that the change would occur effective December 1. With no response yet from Opus, at a meeting on November 27 at Holy Spirit, Si personnel made clear that Opus had no choice because "the leverage had shifted" with Mr. Antonelli's surgeon at Holy Spirit and that Si now had the leverage in the relationship. Although Opus hesitated in doing so because of the dramatic change in compensation, on December 13, it confirmed that Srhad been maneuvering to transfer all of the Holy Spirit work to S1 through a family relationship between a direct employee of Si and Dr. Wolf at Holy Spirit. On December 16th, Si stated that it was not able to pay Opus for November fees. On the next day, Dec. 17th, 2013 Mr. Antonelli conveyed Opus' consent to the new payment proposal. Immediately and on the same day, a check for the full amount was released to Opus. On December 20, the check was received. It was deposited on December 23. In mid December 2013, through a happenstance conversation with Mr. Hunt, Opus learned of the existence of the agreement between Si and 4Web and, in particular, of the cap on the price to Holy Spirit. Opus informed 4Web that it was not aware of the cap and had been charging Holy Spirit what it believed to be the fair market value of the product. This disclosure was necessary as failure to disclose exactly what was being charged could be construed as Opus being complicit in a direct breach of a contract entered into between S1 and 4Web. January 17, 2014 Page 3 In. late December, 4Web conducted an audit with Holy Spirit and determined the full extent of SI's breach. On December 30, 4Web terminated its agreement with Si. On the same day, Si stopped payment on the check to Opus. On December 31, S1 sent a letter to Opus brazenly blaming it for 4Web's termination, even though Opus was not even aware of the agreement between S1 and 4Web and even though S1 had, for a number of months, billed Holy Spirit for an amount known by it to be directly in breach of its (not Opus') agreement with 4Web. In light of S1's actions in stopping payment, making false allegations, the false letter from its counsel on December 13 and S1's aggressively interfering with Opus' relationships at Holy Spirit, Opus promptly terminated its relationship with Si. On January 3, Opus sent a demand letter for payment of the November and December fees. On the same date, Robert Morris proposed that the parties meet to discuss separation. Mr. Antonelli responded with three possible dates. No response to this proposal or to the demand letter has since been received. Mr. Antonelli, as was known and acknowledged in writing by Si in March 2011, had a longstanding, strong relationship with several surgeons. These surgeons, in the words of Sts counsel at the time, "had extreme confidence in him, and enjoyed working with him." One of those surgeons was Dr. Wolf, at Holy Spirit. Opus has recently learned that S1 has told 4Web and probably Dr. Wolf that Opus knew of the contractual restriction and that it was responsible for the breach. Si has further taken steps to interfere with and effectuate the termination of the relationship between Dr. Wolf and Opus. Sts false statements and its interference with Opus' longstanding surgeon and hospital relationships exposes Si to a significant claim for damages. Opus' profits from Holy Spirit exceeded $1 million per year. Based on history and the ages of the principals, these profits will be lost for at least ten years. Because of the likelihood of punitive damages from the tortious interference, the claim against your clients will be for an amount an excess of this. My clients have strong substantive claims, compelling third party witnesses, significant damages and the resources to bring this matter to judicial resolution. They are, however, willing to discuss an amicable separation and resolution, but that must be based upon two fundamental premises: (1) immediate payment of the November and January 17, 2014 Page 4 December fees to Opus; and (2) payment of 20% commissions to Opus on all sales to Holy Spirit for a period of five years. If you wish to discuss the matter, please contact me at your convenience. Very truly yours, McNEES WALLACE & NURI K LLC By ARB Alan R. Boynton, Jr. 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, postage prepaid, upon the following: Sidney L. Gold, Esq. Sidney L Gold & Assoc., P.C. 1835 Market Street, Suite 515 Philadelphia, PA 19103 Dana Windisch Chilson Attorneys for Plaintiff Dated: September 11, 2014 Alan R. Boynton, Jr. Attorney I.D. No. 39850 Dana W. Chilson Attorney I.D. No. 208718 McNees Wallace & Nurick LLC 100 Pine Street 717-232-8000 P.O. Box 1166 Harrisburg, PA 17108-1166 Or THE C 4 U UTA 2014 CP- -tf 10: I 7 .Pit7-• I FE,, riD COI ir L-V41,11;Ai Attorneys for Plaintiff Opus Surgical, LLC OPUS SURGICAL, LLC, Plaintiff V. Si SPINE, LLC, : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA : CASE NO. 14-3671 Defendant : CIVIL ACTION PLAINTIFF'S ANSWER TO DEFENDANT'S PRELIMINARY OBJECTIONS TO AMENDED COMPLAINT Plaintiff Opus Surgical, LLC ("Opus"), by and through its undersigned counsel, hereby files this answer to the Preliminary Objections of Defendants S1 Spine, LLC ("S1") to Opus' Amended Complaint.1 I. RELEVANT BACKGROUND 1. Admitted. 2. Admitted. The Amended Complaint, however, is a document that speaks for itself, and any characterizations inconsistent therewith are denied. 3. Admitted. 4. Admitted. 5. Denied. Paragraph 5 sets forth conclusions of law to which no response is required. To the extent a response is deemed required, the averments of paragraph 5 are denied as without merit 1 Opus will file its Brief in Opposition to Sts Preliminary Objections in accordance with C.C.R.P. 1028. II. PRELIMINARY OBJECTIONS A. Preliminary Objections to Count Ill of Plaintiffs Amended Complaint Pursuant to Pa.R.C.P. No. 1028(a)(4) Should Be Denied. 6. Opus incorporates paragraphs 1 through 5 above, as if set forth in full herein. 7. Admitted in part and denied in part. It is admitted that Si has paraphrased the general principals of Pa.R.C.P. No, 1028(a)(4). It is denied that Sts preliminary objections to Count Ill of the Amended Complaint should be sustained. 8. Admitted in part and denied in part. It is admitted that Si has paraphrased the general principals of Pa.R.C.P. No. 1028(a)(4). It is denied that Si's preliminary objections to Count III of the Amended Complaint should be sustained. 9. Denied. The Amended Complaint has alleged sufficient facts to state a cause of action for Tortious Interference with Current and Prospective Business Relations. 10, Denied. Paragraph 10 sets forth conclusions of law to which no response is required. To the extent a response is deemed required, the averments of paragraph 10 are denied. By way of further response, Opus has alleged sufficient facts to state a cause of action for Tortious Interference with Current and Prospective Business Relations. 11. Denied. Paragraph 11 sets forth conclusions of law to which no response is required. To the extent a response is deemed required, the averments of paragraph 11 are denied. By way of further response, Opus has alleged sufficient facts to state a cause of action for Tortious Interference with Current and Prospective Business Relations. 12. Denied. Paragraph 12 sets forth conclusions of law to which no response is required. To the extent a response is deemed required, the averments of paragraph 12 are denied. By way of further response, Opus has alleged sufficient facts to state a cause of action for Tortious Interference with Current and Prospective Business Relations. 2 13. Denied. Paragraph 13 sets forth conclusions of law to which no response is required. To the extent a response is deemed required, the averments of paragraph 13 are denied. By way of further response, Opus has alleged sufficient facts to state a cause of action for Tortious Interference with Current and Prospective Business Relations. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court deny Defendant Si Spine, LLC's Preliminary Objections and enter judgment in its favor and against Defendant 51 Spine, LLC. B. Preliminary Objections to Count III of Plaintiffs Amended Complaint Pursuant to Pa.R.C.P. No. 1028(a)(3) Should Be Denied. 14. Opus incorporates paragraphs 1 through 13, above as if set forth in full herein. 15. Admitted in part and denied in part. It is admitted that Si has paraphrased the general principals of Pa.R.C.P. No. 1028(a)(3). It is denied that Sts preliminary objections to Count III of the Amended Complaint should be sustained. 16. Denied. Paragraph 16 sets forth conclusions of law to which no response is required. To the extent a response is deemed required, the averments of paragraph 16 are denied. 17. Denied. The allegations of the Amended Complaint set forth a sufficiently specific description of the facts needed to support Opus' claim for Tortious Interference with current and prospective contractual relations. 18. Denied. Paragraph 18 sets forth conclusions of law to which no response is required. To the extent a response is deemed required, the averments of paragraph 18 are denied. 19. Denied. Opus has alleged sufficient facts to state a cause of action for Tortious Interference with Current and Prospective Business Relations. 3 20. Denied. Paragraph 20 sets forth conclusions of law to which no response is required. To the extent a response is deemed required, the averments of paragraph 20 are denied. 21. Denied. Opus has alleged sufficient facts to state a cause of action for Tortious Interference with Current and Prospective Business Relations. 22. Denied. The Amended Complaint is a document that speaks for itself, and any characterizations inconsistent therewith are denied. By way of further response, the Amended Complaint sets forth sufficient factual detail to support Opus' claim for Tortious Interference with Current and Prospective Business Relations. 23. Denied. The Amended Complaint is a document that speaks for itself, and any characterizations inconsistent therewith are denied. By way of further response, the factual averments and details plead by Opus are sufficient to support its claim for Tortious Interference with Current and Prospective Business Relations. 24. Denied. The Amended Complaint is a document that speaks for itself, and any characterizations inconsistent therewith are denied. By way of further response, the factual averments are pled in sufficient factual detail to support Opus' claim for Tortious Interference with Current and Prospective Business Relations. 25. Denied. The Amended Complaint sets forth sufficient factual detail to support Opus' claim for Tortious Interference with Current and Prospective Business Relations. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court deny Defendant S1 Spine, LLC's Preliminary Objections and enter judgment in its favor and against Defendant Si Spine, LLC. 4 herein. C. Preliminary Objections to Count V of Plaintiffs Amended Complaint Pursuant to Pa.R.C.P. No. 1028(a)(4) Should Be Denied. 26. Opus incorporates paragraphs 1 through 25, above as if set forth in full 27. Admitted. 28. Denied as stated. The Amended Complaint is a document that speaks for itself, and any characterizations inconsistent therewith are denied. By way of further response, it is admitted Opus avers that SI was the agent of Opus in Opus' relationship with Dr% Wolf. 29. Denied. The Amended Complaint sets forth a cognizable cause of action for breach of fiduciary duty based upon the facts averred and the legal duty owed by Si to Opus. 30. Denied. Paragraph 30 sets forth conclusions of law to which no response is required. 31. Denied. Paragraph 31 sets forth a partial quote from a case and a conclusions of law to which no response is required. 32. Denied. The Amended Complaint is a document that speaks for itself, and any characterizations inconsistent therewith are denied. By way of further response, the factual averments set forth in the Amended Complaint make clear that Si was representing Opus' interests in its relationship with Dr. Wolf and that Si was serving as Opus' agent. 33. Denied. Paragraph 33 sets forth conclusions of law to which no response is required. 34. Denied. Paragraph 34 sets forth conclusions of law to which no response is required. 5 35. Denied. Paragraph 35 sets forth conclusions of law to which no response is required. 36. Denied. The Amended Complaint sets forth sufficient facts and a cognizable cause of action for breach of fiduciary duty by S1. 37. Denied. The conduct of Si is subject to liability for breach of fiduciary duty and the Amended Complaint sets forth a cognizable cause of action for breach of fiduciary duty because S1's duty to Opus arose out of the agency relationship between the parties. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court deny Defendant Si Spine, LLC's Preliminary Objections and enter judgment in its favor and against Defendant Si Spine, LLC. D. Preliminary Objections to Count V of Plaintiffs Amended Complaint Pursuant to Pa.R.C.P. No. 1028(a)(4) Should Be Denied. 38. Opus incorporates paragraphs 1 through 37, above as if set forth in full herein. 39. Admitted. 40. Denied. Count V is not barred by the "gist of the action" doctrine. 41. Denied. Paragraph 41 sets forth conclusions of law to which no response is required. 42. Denied. Paragraph 42 sets forth conclusions of law to which no response is required. 43. Denied. Paragraph 43 sets forth conclusions of law to which no response is required. 44. Denied. The conduct of Si is subject to liability for breach of fiduciary duty and the Amended Complaint sets forth a cognizable cause of action for breach of fiduciary duty because S1's duty to Opus arose out of the agency relationship between the parties. 6 45. Denied. The Amended Complaint sets forth a cognizable cause of action for - breach of fiduciary duty. WHEREFORE, Plaintiff Opus Surgical, LLC requests this Court deny Defendant Si Spine, LLC's Preliminary Objections and enter judgment in its favor and against Defendant Si Spine, LLC. Dated: October 20, 2014 MCNEESWALLACE & NURICK LLC By Alan R. Boynton, Jr. Attorney ID No. 39850 Dana W. Chilson Attorney ID No. 208718 100 Pine Street P. O. Box 1166 Harrisburg, PA 17108-1166 Phone: (717) 232-8000 Fax: (717) 237-5300 Attorneys for Plaintiff Opus Surgical, LLC 7 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, postage prepaid, upon the following: Sidney L. Gold, Esq. Sidney L. Gold & Assoc., P.C. 1835 Market Street, Suite 515 Philadelphia, PA 19103 Dana Windisch Chilson Attorneys for Plaintiff Dated: October 20, 2014 OPUS SURGICAL, LLC, : IN THE COURT OF COMMON PLEAS Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA v. : CASE NO. 14-3671 Si SPINE, LLC, Defendant AND NOW, this : CIVIL ACTION ORDER day of , 2014, upon consideration of the Preliminary Objections of Defendant S1 Spine, LLC, and the response of Plaintiff Opus Surgical, LLC thereto, it is hereby ORDERED that the preliminary objections are DENIED in their entirety. Defendant S1 Spine, LLC is further ORDERED to file an answer to Plaintiffs Amended Complaint within twenty (20) days of this Order. BY THE COURT: J. PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and submitted in triplicate) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: (List the within matter for Argument Court.) Defendant's Preliminary Objections to Amended Compi CAPTION OF CASE (entire caption must be stated in full) OPUS SURGICAL, LLC VS. S1 SPINE, LLC No 14 3671 Term 1. State matter to be argued (i.e., plaintiff's motion for new trial, defendant's demurrer to complaint, etc.): Defendant's Preliminary Objections to Amended Complaint 2. Identify all counsel who will argue cases: (a) for plaintiffs: Dana W. Chilson (Name and Address) 100 Pine Street, P.O. Box 1166, Harrisburg, PA 17101 (b) for defendants: Sidney L. Gold (Name and Address) 1835 Markey Street, Suite 515, Philadelphia, PA 19103 3. I will notify all parties in writing within two days that this case has been listed for argument. 4. Argument Court Date: November 14, 2014 Date: 10- a0 -1L/ Signature 1,t7 . Com' is M Print your name Plaintiff Opus Surgical, LLC Attorney for INSTRUCTIONS: 1. Original and two copies of all briefs must be filed with the COURT ADMINISTRATOR (not the Prothonotary) before argument. 2. The moving party shall file and serve their brief 14 days prior to argument. 3. The responding party shall file their brief 7 days prior to argument. 4. If argument is continued new briefs must be filed with the COURT ADMINISTRATOR (not the Prothonotary) after the case is relisted. ?67 / �.kk3�ass1 eNp PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and submitted in triplicate) C) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: (List the within matter for --the ett- Argument Court.) Defendant's Preliminary Objections to Amended Comply CAPTION OF CASE (entire caption must be stated in full) Opus Surgical, LLC vs. S1 Spine LLC No. 14 3671 Term 1. State matter to be argued (i.e., plaintiff's motion for new trial, defendant's demurrer to complaint, etc.): Defendant's Preliminary Objections to Plaintiffs Amended Complaint 2. Identify all counsel who will argue cases: (a) for plaintiffs: Dana W.Chilson, Esquire (Name and Address) 100 Pine Street, P.O. Box 1166, Harrisburg, PA 17101 (b) for defendants: Sidney L. Gold,Esquire & Valerie Weisman, Esquire (Name and Address) 1835 Market St., Ste 515, Philadelphia, PA 19103 3. I will notify all parties in writing within two days that this case has been listed for argument. 4. Argument Court Date: December 19, 2014 Date: November 5, 2014 Signature &d ne y1. Co /c/, Print yourefame Defendant S1 Spine, LLC Attorney for INSTRUCTIONS: 1. Original and two copies of all briefs must be filed with the COURT ADMINISTRATOR (not the Prothonotary) before argument. 2. The moving party shall file and serve their brief 14 days prior to argument. 3. The responding party shall file their brief 7 days prior to argument. 4. If argument is continued new briefs must be filed with the COURT ADMINISTRATOR (not the Prothonotary) after the case is relisted. Cout-f 10. poi# NA/ 369 Rw3/36fLoo? SIDNEY L. GOLD & ASSOCIATES, P.C. Sidney L. Gold, Esquire I.D. No.: 21374 Neelima Vanguri, Esquire I.D. No.: 311449 1835 Market Street - Suite 515 Philadelphia, PA 19103 (215) 569-1999 OPUS SURGICAL, LLC, v. S 1 SPINE, LLC Plaintiff, Defendant. Attorneys for Defendant • ▪ COURT OF COMMON PLEAS : CUMBERLAND COUNTY : CIVIL TRIAL DIVISION . NO.: 14-3671 JURY TRIAL DEMANDED NOTICE OF ENTRY OF APPEARANCE Kindly enter my appearance as co -counsel for the Defendant in connection with the above captioned matter. By: DATED: December 15, 2014 SIDNEY L. GOLD & ASSOC., P.C. NEELIMA VAN URI, ESQUIRE Attorney I.D. NO: 311449 1835 Market Street, Suite 515 Philadelphia, PA 19103 (215) 569-1999 Attorneys for Defendant CERTIFICATE OF SERVICE I hereby certify that on this date I caused a true and correct copy of a Notice of Entry of Appearance to be served by e-mail and/or United States Mail, First Class Service, properly addressed and postage prepaid, upon the following: Alan R. Boynton, Jr. Dana W. Chilson McNees Wallace & Nurick, LLC 100 Pine Street P.O. 1166 Harrisburg, PA 17108-1166 717-232-8000j Phone aboynton@mwn.com Attorneys for Plaintiff, Opus Surgical, LLC By: DATED: December 15, 2014 SIDN Y L. GOLD & ASSOC., P.C. NBELIMA VANGU , ESQUIRE Attorney I.D. NO: 311449 1835 Market Street, Suite 515 Philadelphia, PA 19103 (215) 569-1999 Attorneys for Defendant OPUS SURGICAL, LLC, - Plaintiff V. of cumberbob IN THE COURT OF COMMON PLEAS OF THE NINTH JUDICIAL DISTRICT S 1 SPINE, LLC, 2014-3671 Civil Term Defendant IN RE: PRELIMINARY OBJECTIONS BEFORE HESS, EBERT, AND PLACEY JJ. ORDER OF COURT AND NOW, this 6th day of January 2015, upon consideration of the Defendant's Preliminary Objections, and following Argument on the Motion, Defendant's Preliminary Objections are DENIED. Th" A. Placey C.P.J. Distribution: Dana W. Chilson, Esq. ,.--'Sidney L. Gold, Esq. Le£r � - - /� �i S - _