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HomeMy WebLinkAbout14-4037 Supreme Co..., - ennsylvania h CourOfrC031<1lno tPleas For Prothonotary Use Only: L i� C� t �et Docket No: CU 8 RL7 N1� " / � �D — ." County � . , A The information collected on this form is used solely for court administration purposes. This forrnn does not supplement or replace the filing and service of pleadings or other papers as required by law or rules of court. Commencement of Action: i° S Complaint ® Writ of Summons Petition Transfer from Another Jurisdiction [3 Declaration of Taking C Lead Plaintiff's Name: Lead Defendant's Name: C R. F FAGER COMPANY DARWIN K. BROSIUS T Dollar Amount Requested: Owithin arbitration limits I Are money damages requested? J Yes 0 No (check one) ®outside arbitration limits O N Is this a Class Action Suit? n Yes S No Is this an MDJAppeal? © Yes 0 No A Name of Plaintiff/Appellant's Attorney: John A. Feichtel, Esquire I ® Check here if you have no attorney(are a Self-Represented [Pro Sel Litigant) i 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. I TORT(do not include Mass Tort) CONTRACT (do not.include Judgments) CIVIL APPEALS j Il Intentional 13 Buyer Plaintiff Administrative Agencies ® Malicious Prosecution Debt Collection: Credit Card Board of Assessment E3 Motor Vehicle ® Debt Collection: Other Board of Elections Nuisance ® Dept.of Transportation ® Premises Liability E3 Statutory Appeal:Other S ® Product Liability(does not include i E mass tort) rA Employment Dispute: Slander/Libel/Defamation Discrimination C ® Other: 0 Employment Dispute:Other Zoning Board ,I, Other: I J Other: O MASS TORT Asbestos N Tobacco Toxic Tort-DES Toxic Tort-Implant REAL PROPERTY MISCELLANEOUS n Toxic Waste I B U Other: ® Ejectment � Common Law/Statutory Arbitration ® Eminent Domain/Condemnation [9 Declaratory Judgment Ground Rent 17 Mandamus 0 Landlord/Tenant Dispute ® Non-Domestic Relations 0 Mortgage Foreclosure:Residential Restraining Order PROFESSIONAL LIABLITY j3 Mortgage Foreclosure:Commercial Quo Warranto ® Dental [3 Partition FA Replevin El Legal [3 Quiet Title ®Other: 0 Medical [3 Other: 3 Other Professional: Updated 1/112011 V� 113E L PY LVAt , t ENNS Paul W. Minnich Barley Snyder 100 East Market Street York; PA 17401 717-846-8888 Fax: 717-843-8492 pminnich@barley.com PA 74453 John A. Feichtel Saidis, Sullivan&Rogers 635 North 12th Street Suite 400 Lemoyne, PA 17043 717-612-5803 Fax: 717-612-5805 jfeichtel@ssr-attomeys.com PA 77426 Attorneys for Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA R. F. FAGER COMPANY, No. Plaintiff Civil Action Declaratory Judgment V. DARWIN K. BROSIUS, Defendant NOTICE TO DEFEND YOU HAVE BEEN SUED IN COURT. IF YOU WISH TO DEFEND AGAINST THE CLAIMS SET FORTH IN THE FOLLOWING PAGES, YOU MUST TAKE ACTION WITHIN TWENTY(20) DAYS AFTER THIS COMPLAINT AND NOTICE ARE SERVED BY ENTERING A WRITTEN APPEARANCE PERSONALLY OR BY ATTORNEY AND FILING IN WRITING WITH THE COURT YOUR DEFENSES OR OBJECTIONS TO THE CLAIMS SET FORTH AGAINST YOU. YOU ARE WARNED THAT IF YOU FAIL TO DO SO, THE CASE MAY PROCEED WITHOUT YOU AND A JUDGMENT MAY BE ENTERED AGAINST YOU BY THE COURT WITHOUT FURTHER NOTICE FOR ANY MONEY CLAIMED IN THE COMPLAINT OR FOR ANY OTHER CLAIM OR RELIEF REQUESTED BY THE PLAINTIFF. YOU MAY LOSE MONEY OR PROPERTY OR OTHER RIGHTS IMPORTANT TO YOU. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER, 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 South Bedford Street Carlisle, PA 17013 Telephone No. (717) 249-3166 or (800) 990-9108 r AVISO USTED HA SIDO DEMANDADO EN LA CORTE. Si usted desea defenderse de las quejas expuestas en las pdginas siguientes, debe tomar accion dentro de veinte(20) dias a partir de la fecha en que recibio la demanda y el aviso. Usted debe presentar comparecencia escrita en persona o por abogado y presentar en la Corte por escrito sus defensas o sus objeciones a las demandas en su contra. Se le avisa que si no se defiende, el caso puede proceder sin usted y la Corte puede decidir en su contra sin mas aviso o notificacion por cualquier dinero reclamado en la demanda o por cualquier otra queja o compensacion reclamados por el Demandante. USTED PUEDE PERDER DINERO, O PROPIEDADES U OTROS DERECHOS IMPORTANTES PARA USTED. LLEVE ESTA DEMANDA A UN ABOGADO IMMEDIATAMENTE. SI USTED NO TIENE O NO CONOCE UN ABOGADO, VAYA O LLAME A LA OFICINA EN LA DIRECCION ESCRITA ABAJO PARA AVERIGUAR DONDE PUEDE OBTENER ASISTENCIA LEGAL. SI USTED NO PUEDE PARARLE A UN ABOGADO, ESTA OFICINA PUEDE PROVEERE INFORMACION ACERCA AGENCIAS QUE PUEDAN OFRECER SERVICIOS LEGAL A PERSONAS ELIGIBLE AQ UN HONORARIO REDUCIDO O GRATIS. CUMBERLAND COUNTY BAR ASSOCIATION 32 South Bedford Street Carlisle,PA 17013 Telephone No. (717) 249-3166 or (800) 990-9108 Paul W. Minnich Barley Snyder 100 East Market Street York, PA 17401 717-846-8888 Fax: 717-843-8492 pminnich@barley.com PA 74453 John A. Feichtel Saidis, Sullivan&Rogers 635 North 12th Street Suite 400 Lemoyne, PA 17043 717-612-5803 Fax: 717-612-5805 jfeichtel@ssr-attomeys.com PA 77426 Attorneys for Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA R. F. FAGER COMPANY, No. Plaintiff Civil Action Declaratory Judgment V. DARWIN K. BROSIUS, Defendant COMPLAINT Plaintiff, R. F. Fager Company,by its undersigned counsel, files the following Complaint for Declaratory Judgment: 1 1. Plaintiff is R. F. Fager Company, a Pennsylvania corporation which has an office and place of business at 2058 State Road, Camp Hill, Cumberland County, Pennsylvania 17011 (Company or Fager). 2. Defendant is Darwin K. Brosius, an adult individual who resides at Lot 8, 62 Landvale Road,York Haven, York County, Pennsylvania 17370 (Brosius). 3. This Court has jurisdiction in this action pursuant to 42 Pa.C.S.A. § 5301. 4. Venue properly lies in Cumberland County as Plaintiff has its offices and principal place of business in Cumberland County and all corporate actions giving rise to the causes of action at issue occurred exclusively in Cumberland County. 5. Plaintiff brings this action pursuant to the Declaratory Judgments Act, 42 Pa.C.S.A. §7531, et seq. 6. The Declaratory Judgments Act is available to obtain the declaration of existing legal rights, duties, or status of parties if the declaration will aid in a determination of a genuine, justiciable controversy. 7. This case presents actual and justiciable controversies between the Company and Brosius as set forth below. 8. Absent declaration from this Court, the rights, status, and other legal relations of the parties are uncertain. 9. All parties who have an interest that would be affected by the declarations requested herein have been joined in the instant action. 2 10. The Company began as a partnership in 1966 and was incorporated in 1974. It is the leading distributor of a wide range of plumbing, heating, cooling, roofing, electrical and industrial hose products in Central Pennsylvania. 11. The Company has been and remains family owned and operated. The Company takes pride in its start with a modest beginning, as being founded by hard working, intelligent men with conservative roots which has carried over into its business practices. 12. Brosius is a second generation owner and employee,being the son of the Company's co-founder, Delroy Brosius. Brosius was employed by the Company until September 2013 as an outside sales person. 13. Brosius became a shareholder of the Company in 1978 and owns approximately 13% of the outstanding shares. 14. During the course of his employment, Brosius was accorded highly favorable treatment by the Company including the following: (a) The Company provided no interest loans to Brosius for many of the years of his employment and was never denied a loan request. (b) Brosius was allowed to purchase product from the Company and carried a large accounts receivable balance which he was allowed to roll over year after year with no interest accruing. (c) Despite having a number of DUI and related criminal charges as outlined infra, Brosius was not disciplined or terminated until he missed over six weeks of work due to incarceration resulting from a DUI charge and parole violation. 3 (d) Brosius chose to work a shorter work week than all other employee shareholders. (e) Brosius was asked to,but refused to, work Saturdays like all other employee shareholders of the Company. (f) Brosius undertook no management responsibility and never provided any general input for the betterment of the Company. (g) Brosius attended fewer than half of the monthly sales meetings which was a core responsibility of the outside sales staff of which Brosius was a member. (h) Brosius rarely took calls via his cellular telephone and, instead, calls were diverted to his voicemail which was almost always full. (i) Brosius's unavailability via telephone created significant inconvenience to customers and fellow employees. 0) Brosius never notified Company management of any of his drinking-related charges except on one occasion when approached by a Director and advised that he needed to do so. (k) Brosius refused to utilize the Company's new business software which was installed in 2008. Brosius refused to even login and never attempted to access information vital to assisting customers. In fact, Brosius was the only full-time outside salesman that did not access the computer system on an almost daily basis. 4 (1) Brosius colluded with an inside company representative to conceal from management his work release situation and dishonestly misrepresented who his direct supervisor was to conceal from Company management his criminal misconduct. Request for Declaratory Judgment No. 1 Termination of Employment Proper 15. Fager incorporates by reference paragraphs 1 through 14 above. 16. By letter dated September 18, 2013, the Company terminated Brosius' employment, effective immediately, due to his "continued unavailability" for work. 17. In fact, Brosius has a long history of alcohol related arrests, as evidenced by Court records as follows: (a) April 13, 1999, driving under the influence and related charges in Perry County; (b) October 11, 2004, driving while impaired (with highest rate of alcohol) and related charges in Cumberland County; (c) July 12, 2005, driving while impaired (with the highest rate of alcohol) and related charges in Cumberland County; (d) September 16, 2005, driving while impaired (with highest rate of alcohol) and related charges in Cumberland County; (e) February 16, 2006, failing to stop and give aid, failing to notify policy of accident involving injury, giving false information, and related charges in Cumberland County; 5 (f) November 7, 2011, driving under the influence and related charges in Cumberland County; (g) On August 5, 2013, driving while intoxicated and driving while under license suspension in York County. 18. During Brosius's most recent period of incarceration, Brosius repeatedly represented to his brother, Darrell Brosius, that he was resigning from the Company voluntarily and Brosius asked his brother, Darrell, to communicate this to Company management. 19. Brosius has contested his termination and has stated he is entitled to employment so long as he desires. 20. The Company and Brosius never entered into an employment agreement, either written or oral. 21. The Company believes and therefore avers that Brosius' employment with the Company was "at will" as that term has been interpreted by Pennsylvania case law. 22. The Company believes and therefore avers that the mere fact that Brosius is a shareholder does not entitle him to lifetime employment. 23. Brosius' behavior as described above is inconsistent with the Company's reputation in the community and in the industry and is contrary to its written policies. 24. The Company has a written"Drug and Alcohol Free Workplace Policy" (Alcohol Policy)which prohibits all employees from involvement in illegal alcohol related conduct, including driving under the influence. In addition, the Alcohol Policy requires an employee who is convicted of an alcohol violation to notify the Company's Human Resources Manager within 6 five days after conviction. The Alcohol Policy provides that the Company is entitled, under its own independent authority, to take disciplinary action against an employee, including termination. The relevant portions of the Alcohol Policy are attached and made a part hereof as Exhibit A. 25. In addition, the Company has distributed an Employee Handbook by which it sets forth general information and guidelines regarding employment with the Company and explains the Company's policies and procedures. 26. Brosius' alcohol related conduct as described above is contrary to the Standards of Conduct set forth in the Employee Handbook. As stated in the Employee Handbook alcohol violations constitute a flagrant violation of the Company's policy. The relevant excerpt from the Employee Handbook is attached as Exhibit B. 27. An actual controversy exists as to whether the Company terminated Brosius' employment for just cause as he has threatened legal action regarding the circumstances surrounding his termination. 28. Only the entry of a declaratory judgment will terminate the uncertainty and controversy regarding the nature of Brosius' termination. 29. Accordingly, the Company seeks a determination that Brosius had no guarantee of employment, that absent any employment agreement he was an"at will" employee, and his termination of employment was for just cause. WHEREFORE, Plaintiff, R. F. Fager Company, seeks a judicial determination that its termination of Defendant, Darwin K. Brosius, was proper. 7 Request for Declaratory Judgment No. 2 Purchase and Sale of Colt Plumbing, Inc., Ratified by Shareholders and Directors 30. Fager incorporates by reference paragraphs 1 through 29 above. 31. Brosius has threatened litigation regarding the Company's purchase in 1996 and sale in 2003 of a local wholesale plumbing business, Colt Plumbing, Inc. (Colt). 32. The Company's purchase of Colt and its subsequent sale to a third party were done with approval and ratification of its Board of Directors and the shareholders -- all material terms disclosed and agreed upon and with the benefit of legal counsel. In fact, the transactions were discussed and unanimously approved at joint meetings of the shareholders and directors. 33. Brosius has made certain allegations regarding the transactions which are based on half-truths and hindsight and which are not relevant in 2014, a decade after the sale. 34. Brosius had knowledge of the Colt transactions at the time they occurred and made no objection despite the fact that the Colt acquisition and sale resulted in a financial loss to the Company. 35. The Company therefore seeks a determination that Brosius is estopped from bringing any claims against the Company relating to its transactions vis-a-vis Colt-- the purchase in 1996 and the sale in 2003 -- due to waiver, the passage of time and the relevant statute of limitations. WHEREFORE, Plaintiff, R. F. Fager Company, seeks a judicial determination that Defendant, Darwin K. Brosius, is estopped from bringing any action or claims against the Company as to its purchase and sale of Colt Plumbing, Inc. 8 Request for Declaratory Judgment No. 3 Fager Leasing, Inc. Reduced Capital Expenditures 36. Fager incorporates by reference paragraphs 1 through 35 above. 37. Brosius has threatened litigation regarding the formation and operation of an entity known as Fager Leasing. 38. Fager Leasing was formed as a vehicle to purchase assets for lease back to the Company as a means of reducing the Company's capital expenditures. This system was established as a legitimate business practice and provided a benefit to all Company shareholders. 39. This business method was disclosed to all shareholders. 40. Fager Leasing ceased operation in 2007 -- seven years ago. 41. Brosius never objected to or otherwise questioned this business practice. 42. The Company therefore seeks a determination that Brosius is estopped from bringing claims against the Company with regard to Fager Leasing due to waiver, the passage of time and the relevant statute of limitations. WHEREFORE, Plaintiff, R. F. Fager Company, seeks a judicial determination that Defendant, Darwin K. Brosius, is estopped from bringing any action or claims against the Company as to its dealings with Fager Leasing. Request for Declaratory Judgment No. 4 Peleton Investments, LLC Had No Impact on Brosius 43. Fager incorporates by reference paragraphs 1 through 42 above. 44. Brosius has threatened litigation regarding the fon-nation and operation of Peleton Investments, LLC (Peleton)by Bryce F. Fager, a Company shareholder. 9 45. The Company acknowledges that Peleton's registered address was the Company's Camp Hill address, which was done for convenience only. The address has now been changed. 46. The Company avers that Peleton was an investment vehicle of Bryce Fager, is unrelated to the Company and, further, is unrelated to Brosius. 47. Peleton purchases goods from the Company at a profit and there is no detriment to the Company as a result of these sales. 48. The Company believes and therefore avers that its shareholders are entitled to own personal investments outside of the Company. 49. The Company therefore seeks a determination that Brosius is estopped from bringing claims against the Company with regard to Peleton in that this relationship has no detrimental impact on the Company or Brosius and in fact has no actual connection to the Company or Brosius. WHEREFORE, Plaintiff, R. F. Fager Company, seeks a judicial determination that Defendant, Darwin K. Brosius, is estopped from bringing any action or claims against the Company as to Peleton Investments, LLC. Request for Declaratory Judgment No. 5 Compensation Paid to Majority Shareholders Fair and Reasonable 50. Fager incorporates by reference paragraphs 1 through 49 above. 51. Brosius has threatened litigation with regard to the compensation paid to the majority shareholders Richard Fulton Fager, Jr. and Bryce F. Fager for the years 2000 through 2012. 10 52. The compensation, including salary,bonus and other fringe benefits paid to these shareholders was established by Company management in consultation with the Company's outside accountant, is fair and reasonable, and consistent with the percentage ownership of these shareholders. 53. The Company believes and therefore avers that the compensation is fair and reasonable, accords with like positions in the industry, accords with similar positions in the community, and accords with the benefit received by the Company for the services provided. 54. The Company therefore seeks a determination that Brosius is estopped from challenging at this time the compensation paid to the majority shareholders during the period 2000 through 2012. WHEREFORE, Plaintiff, R. F. Fager Company, seeks a judicial determination that Defendant, Darwin K. Brosius, is estopped from bringing any action or claims against the Company as to compensation paid to the majority shareholders. Request for Declaratory Judgment No. 6 Distributions to Shareholders Sound Business Decision 55. Fager incorporates by reference paragraphs 1 through 54 above. 56. Brosius has threatened litigation against the Company due to its decisions regarding the percent of profits distributed to shareholders. 57. In fact, the Company managed strong growth despite the recession which began in 2008 and the share value of Brosius and all other shareholders doubled from 2000 to 2012. 11 58. As confirmed by its balance sheet and financial records, the Company has been financially successful during its entire existence. 59. The Company believes and therefore avers that its distribution formula has been based on sound business practice. The Company believes and therefore avers that Brosius has failed to demonstrate or produce any evidence to the contrary. 60. The Company believes and therefore avers that Brosius' percent of distributions has been paid directly in accordance with his percentage ownership. 61. The Company therefore seeks a determination that Brosius is estopped from challenging at this time the distributions to shareholders. WHEREFORE, Plaintiff, R. F. Fager Company, seeks a judicial determination that Defendant, Darwin K. Brosius, is estopped from bringing any action or claims against the Company as to distributions to shareholders. Request for Declaratory Judgment No. 7 Customer Accounts and Bonus Payment 62. Fager incorporates by reference paragraphs 1 through 61 above. 63. Brosius has alleged that the Company stripped him of customer accounts which he developed and from which he was entitled to commissions. 64. Brosius has alleged that the Company failed to pay him a 2013 bonus. 65. Brosius has threatened litigation on these issues. 66. The Company believes and therefore avers that it has acted reasonably and responsibly in maintaining customer accounts. 12 67. The Company believes and therefore avers that it has acted reasonably and responsibly in awarding bonuses. 68. The Company believes and therefore avers that it has exercised sound business judgment with regard to customer accounts and to any bonus earned or unearned by Brosius. 69. The Company therefore seeks a determination that Brosius is estopped from challenging the Company's actions at this time. WHEREFORE, Plaintiff, R. F. Fager Company, seeks a judicial determination that Defendant, Darwin K. Brosius, is estopped from bringing any action or claims against the Company as to its customer accounts or an award of a 2013 bonus to him. Request for Declaratory Judgment No. 8 Purchase of Brosius' Stock 70. Fager incorporates by reference paragraphs 1 through 69 above. 71. Brosius has threatened litigation as to the Company's valuation of his stock. 72. The Shareholders Agreement provides at paragraph 3 the Company has the option to purchase a shareholder's stock upon said shareholder's cessation of employment. 73. A dispute has arisen between Brosius and the Company with regard to the buyout of Brosius' Company stock. 74. The Shareholders Agreement provides at paragraph 20 that any controversy arising out of or relating to the Shareholders Agreement shall be settled by arbitration. 13 75. Inasmuch as Brosius has threatened legal action regarding his termination of employment which triggered the Company's option to purchase his shares, the Company desires a determination that these matters are rightfully settled by arbitration. WHEREFORE, Plaintiff, R. F. Fager Company, seeks a judicial determination that all issues related to the purchase of Company shares owned by Defendant, Darwin K. Brosius, shall be settled by arbitration. Conversion 76. Fager incorporates by reference paragraphs 1 through 75 above. 77. Brosius at various times during the course of his employment converted for his own use plumbing supplies and materials which were property of the Company for his own use and benefit without making payment to the Company. 78. Brosius's conversion of plumbing supplies and materials was done without the Company's consent and was in violation of the Company's property rights. 79. The aforementioned conduct of Brosius constitutes conversion by Brosius. 14 WHEREFORE, Plaintiff, R. F. Fager Company, seeks judgment in its favor and against Brosius in an amount not to exceed the jurisdictional limits for compulsory arbitration in Cumberland County. BARLEY SNYDER By: ` Paul W innic 100aE st Market Street York, PA 17401 717-846-8888 Fax: 717-843-8492 pminnich@barley.com PA 74453 John A. Feichtel Saidis, Sullivan&Rogers 635 North 12th Street Suite 400 Lemoyne, PA 17043 717-612-5803 Fax: 717-612-5805 jfeichtel@ssr-attomeys.com PA 77426 Attorneys for Plaintiff 4369350 15 EXHIBIT A R.F. Fager Company Drug and Alcohol Free Workplace Policy 1. Purpose R.F. Fager Company(hereinafter referred to as the "Company") is committed to providing and a safe workplace for all employees. The Company recognizes that drug and alcohol abuse impairs employee productivity and performance and poses a direct and significant threat to employee safety. For these reasons and additionally recognizing other adverse legal,economic and social consequences of substance abuse,this Drug and Alcohol Free Workplace Policy is adopted and enforced in order to: a. protects employee safety, health, and well-being; b. protects company property, equipment, and operations; c. protects those who come into contact with, do business with or buy from Company; d. maintains consumer confidence; e. maintains high employee morale; f. comply with the legal mandates of the Federal Motor Carrier Safety Administration (FMCSA) of the United States Department of Transportation;and g. deters illicit drug and on-the-job alcohol use. 2. Scope and Applicability A. Scope. This policy establishes the Company's policy and procedures regarding; (i) alcohol use and abuse; and (►i)the illegal and misuse of drugs, including illegal drugs, prescription drugs and over- the-counter medication. The term illegal or illicit drugs include all controlled substances,the possession of which is illegal under federal law. This Policy shall apply to all employees including full-time, part- time and temporary(hereinafter referred to as "employees")as well as applicants within the organization without exception. This Policy also applies to temporary workers provided by employment agencies;the Discipline Section, however, does not apply. Instead, if a worker supplied by a temporary employment agency violates the policy; the placement agency will be advised that the worker should not be sent for further work at the Company. It is the duty of an employee to review and understand the policy,the benefits of the policy to the employees and to the Company,the effects of drugs and alcohol misuse on individuals and their families,and the use of alcohol and drug tests. A few provisions apply only to employees subject to the DOT requirements,those employees are referred to as"DOT covered" or"DOT regulated" employees. For the Company, DOT covered employees are those who must have a Commercial Driver's License (CDL)to perform their job duties. The Company also has adopted policy provisions, under its independent authority as an employer,that apply to DOT covered employees. For purposes of DOT regulations, "performing a safety-sensitive function" means a DOT covered employee is considered to be performing a safety-sensitive function during any period in which he or she is actually performing, ready to perform or immediately available 1 3. Compliance with..and modification of policy A. Compliance a condition of employment. The Company requires that all employees, at all levels within the organization,to comply with this Drug and Alcohol Free Workplace Policy as a condition of employment. B. Employment relationship unchanged. The Policy does not create an expressed or implied employment contract. This Policy does not affect an employee's status as an "employee at-will,"which, under Pennsylvania law, simply means that an employee may resign his/her employment or be terminated at any time for any or no reason whatsoever. C. Policy Modification. This Policy supersedes any other Company policy or practice on the subject of drug and alcohol use, abuse and testing. At any time, the Company may unilaterally amend, supplement, modify or change any part of this Policy, including changes necessary to comply with federal, state or local laws. D. Safety Manager. If you have any questions regarding this policy, please direct them to the Safety or Human Resources Manager who coordinate the drug-free workplace program for the Company. This Policy shall be effective October 1, 2010. 4 Drug and Alcohol Prohibited Conduit. A. Illegal Drugs (1) DOT employees. Under DOT regulations, no DOT covered employee shall report for duty or remain on duty requiring performance of safety-sensitive functions when the driver uses any controlled substance unless pursuant to a prescription. Additionally, no DOT covered employee shall report for duty, remain on-duty or perform a safety-sensitive function, if the driver tests positive for a controlled substance. (2) All employees. Under its independent authority as an employer,the Company prohibits all employees from selling, manufacturing, distributing, conveying, dispensing, using, possessing, purchasing, obtaining, being under the influence of or testing positive for the illegal use of drugs at any time. B. Prescription Drugs (1) DOT Employees. Under DOT regulations, no DOT covered employee shall report for duty or remain on duty requiring the performance of safety-sensitive functions when the DOT regulated employee uses any controlled substance, except when the use is pursuant to the instructions of a physician who has advised that employee that the substance does not adversely affect the employee's ability to safely operate a commercial motor vehicle. (2) All Employees. The Company prohibits all employees from illegally selling, manufacturing, distributing, dispensing, using, possessing, purchasing or obtaining prescription drugs at any time; a being under the influence of, or testing positive for, prescription drugs illegally obtained or used at any time. In addition, the Company prohibits an employee while on-duty,while on work premises, during lunch or other breaks,while representing the Company or while operating a motor vehicle from being 3 under the influence of legally obtained and used prescription drugs that affect the individual's functioning in such a way as to jeopardize the safety of the employee or others or to substantially impair job performance. It shall be a violation of this Policy for an employee to fail to report, as required below in Paragraph 5, prescription drug use that is likely to affect the employee's functioning in such a way as to jeopardize the safety of the employee or others or to substantially impair job performance. C. Over-the-Counter Drugs Under its independent authority,the Company prohibits all employees from being under the influence of, or testing positive for, mood-altering over-the-counter drugs used contrary to the product's labeling(i.e... misuse of over-the-counter drugs) while on-duty,on work premises, during lunch or other breaks or while representing the Company. In addition, while on-duty,while on work premises, during lunch or other breaks, while representing the Company or operating a motor vehicle, an employee shall not be under the influence of, or test positive for, properly-used over-the-counter drugs that affect the individual's functioning or behavior in such a way as to jeopardize the safety of the employee or others or to substantially impair iob performance. It shall be a violation of this Policy for an employee to fail to report, as required below in Paragraph 5, over-the-counter drug use that is likely to affect the individual's functioning in such a way as to jeopardize the safety of the individual or others or to substantially impair job performance. D Atcb�Fiot (1) AI(emptoyees The Gornpany prohibits empCuyees from iifegafly possessing,using, tlrstrrb attempting to distribute manufacture,dispense,or be inuQlveI.d in iflega al�ahol relate conduct, includFng, but,not limited to driving under the influence and under age drrrikingtyiol'ations while on i he work site,:while on duty; during lunch or other breaks, wfrle representing the Company or while opera. ingxa rnotorvehicle Furthermore,tFe Company prohibits ali employees from,'possessing opened containers, usrn consurnirig, disti bating atteetptmg to d�strrbute,;rrtan �u "tp is p ufae '"S1ng,.testing posttiye for,or ben under the influence of alcohol, while '6 dut`Y Bunn. lunch o, other breaks,on work remises`at s g, `, � k any time)`;while representing the Coirtpany or while operating 't' 'v (a)Alcohol Ralrcy Exception The,ONtY exception rs an`authorrzed busyness r�lateci function(on RF Fager Company premises)for Corrtrap tars and Clients: This regriires,prior authorgation by comparty,owners(l?�ck,Jt` Bryce„j AdditronaJly,the date,time'and list of a!!company employees in+rRy.ed rn the function will be marntarned and pravided'1 the'Human Resources Manager: (2) DOT employees. Additionally, in accordance with DOT regulations,the following conduct is prohibited for DOT covered employees: (1) reporting for duty or remaining on duty requiring the performance of safety- sensitive functions while having an alcohol concentration of 0.02 or greater; 4 (2) being on duty or operating a commercial motor vehicle while the driver possesses alcohol, unless the alcohol is manifested and transported as part of a shipment; (3) performing safety-sensitive functions within four hours after using alcohol; (4) consuming alcohol within the eight hours following an accident or before a post- accident alcohol test is performed (whichever is sooner) if the accident would require a post-accident alcohol test as specified in this Policy; (5) refusing to submit to post-accident, random, reasonable suspicion,or follow-up alcohol tests; and (6) performing safety-sensitive functions while having an alcohol concentration of 0.02 or greater. 5 Duty to Report A ConVct[ons;An errplayee wha is'canv�cted fora drug{aw or:alcohaf:vrolation must notify the Co`mpany's Human Resources aManager na Fater than five calendar daysafter the conviction A corrvct�on means a finding of;guiity(nc{udirg a plea of no"'lo contederej ar impas�tion of sentence,or f3otht by`anyjudicial body charged wrth tie respons�b�lity to determine uiolat�on of the Federal or State A. Or'icludmg the Di'sti ict of Columbia?criminal drug/alcohol statutes The term "criminal drug statue" means a'cr�mtnaf statute invafving manufacture,d�str►butron,dispensation, use;br possessEor of any controlleC substance B. Prescription and Over-the-Counter drug use. Whenever an employee is legally prescribed drugs or directed by a physician to use over-the-counter drugs, it is the employee's responsibility to ask the prescriber whether the drug or medicine, it taken as prescribed or directed, is likely to affect the employee's work performance in such a way that it would jeopardize safety, or substantially reduce the employee's effectiveness, if so,the employee is obligated to report that fact to the Company's Human resources Manager. Additionally, if an employee is legally using an over-the-counter drug whose labeling indicates that its use is likely to affect the employee's work performance in such a way that it would jeopardize safety, or substantially reduce the employee's work effectiveness,the employee is obligated to report that fact to the Company's Human Resources Manager. When required to report,an employee is not required or asked to report his or her medical condition or the drugs uses;the employee should merely report that he or she is using medication that is likely to affect work performance in such a way that it would jeopardize safety,or substantially reduce effectiveness. The Company will then determine whether the employee may continue to work during the course of treatment and may seek a second opinion or require the employee to be examined by a physician of the Company's choice. The Company may rely on the second opinion rather than that of the employee's physician. 5 (2) Breath. If an employee is unable to provide a breath sample for an alcohol test,then the Company shall direct the employee to obtain an evaluation as soon as possible from a licensed physician who is acceptable to the Company concerning the employee's medical ability to provide an adequate amount of breath. The physician shall provide the Company with a written statement of his determination and its basis. If the physician is unable to make this determination,then the employee's failure to provide an adequate breath sample shall be regarded.as a refusal to test. 7. Confidentiality of Drug Test Results. All drug and alcohol test results will be reported to the Human Resources Manager or designee. All records regarding whether and when a drug test and/or was conducted and the results are confidential. They shall be maintained in secured files under the control of the Human Resources Manager. The test results will not be included in personnel files. An individual's drug/alcohol testing information and results will only be disclosed: (a) on a need to know basis, including, but not limited to the MRO, the company President the Safety Manager and Human Resources Manager: (b) with an individual's written authorization: (c)to the decision maker in a legal action initiated by or on behalf of the employee or placed at issue by the employee in any legal, administrative or other proceeding; or(d) as otherwise required by federal, state, or local law. An employee shall have the right to see the results of his/her own test results. Non-specific statistical data related to drug and/or alcohol testing and rehabilitation and training records may be released to any governmental agency upon request. S ? D�scplInefor Pol�cy1/io�atEons In accordance with DOT regulations, no DOT covered employee shall perform safety-sensitive functions, including driving a commercial motor vehicle, if the DOT covered employee has engaged in conduct prohibited by this Policy. Note: in addition, any DOT covered employee who is found to have an alcohol concentration of 0.02 or greater must immediately be removed from his or her safety-sensitive position until the start of the DOT covered employee's next regularly scheduled duty period, but not less than 24 hours following administration of the test. The other consequences imposed by the regulations do not apply; however, the Company is able to take action independent of the regulations that is otherwise consistent with the law. The Company, under its own'independent:authorty as an employer,also may take disciplinary actron agCF ainst an"employee, DOT and non DOT regulaled.employees, up to and nclud ng termmatron for anY violation of thrs Policy In considerrng what disciplrne,:to �mpase the Com,pa`ny's mana�genent may co,nsrder'the fol`towmg factors J . seriousMess of fhe violation;the length of employe serv[ce,the rep_etrtrvene�s afthe employee's violatron of the substance abuse policy;prior work performance; employee`s retatonshrps wrtti co workers and supervisors;the eriaployee's previous dissiphnry ret o preu►ous instances of misconduct that have been called to the employee's attention,trarning,`and e 13 �.t. *fh _t.v,�.` impw`o't'in±yn"g'zya. 4 o'Sru :la,res`izx fd�.,s�c'i;5.p.ln,s'a""'h"'— hw��`e�,- t.1� D Pi 3- `.q -�te:(ecimry, n9?rv.•:.Sa_ n iVnclvde termrn_ation�o,,f,�ernployrnent„{Asecond_v�olat►on,�of th�s,Policy w�fi resul6t�m�emp{oyment te,rmmatiori If the results of a drug and/or alcohol test of a job applicant are positive, he or she will not be hired and the conditional offer of employment shall be withdrawn. 9. Referral to Law Enforcement. In addition to imposing discipline, the Company may refer to the appropriate law enforcement agency, information regarding a violation of this Policy when it deems appropriate. 10. Searches. The Company may provide lockers, storage areas, equipment,vehicles, offices, desks or work stations for use by employees during work hours. All such items are considered to be company property, even while an employee is using them. The Company reserves the right to search any Company property, at any time,with or without notice or cause, including the aforementioned items. Inspections of Company property will be conducted by management and/or the Human Resources Manager. 14 EXHIBIT B Roo 0 --------------- Employee Handbook January zoio If anyone believes that he or she has been subjected to and not have the ability. In other cases, discrimination in violation of this policy, or have attitude, behaviors,and/or effect may be the questions about the administration of this policy,the cause. employee should immediately contact a Company Owner or HR Manager or file a grievance, • Failure to follow rules,policies,directions,etc: This category is for infractions that involve the STANDARDS OF CONDUCT violation of work rules; attendance; safety It is the policy of R.F. Fager, Co.to treat all employee guidelines, policies; Federal,State, and Local performance and discipline problems in a fair and laws;or specific direction/instructions from a consistent manner. In all but the most serious cases, manager. each employee will be advised of the incorrect . o Flagrant violations: This category includes a behavior, and given an opportunity to correct the ry problem. This system is the only method used by R.F. of theft; physical abuse;verbal abuse; Fager, Co.for the purpose of employee discipline. This destruction of property; inappropriate behavior provision does not constitute a contractual undertaking. towards customer; drug, alcohol, or firearm Prior to beginning"formal" progressive discipline, it is violationss,etc. generally our practice to offer coaching and counseling Gormally progressive discipline is followed for like to the employee. This is up to the discretion of offenses. However, a Final Written Warning may follow Department Heads and Company Owners and is used in a Written warning for issues in the same "category" situations where the issue needs to be corrected. even if they are not the same specific infraction. Consistent with our philosophy that any discipline, with Written Warnings limited exception, is intended to be corrective in nature, An employee who refuses or who is unable to correct R.F. Fager,Co. will generally use a four(4)step process. unsatisfactory performance or conduct after a These steps are: reasonable period will receive a written warning, in Verbal Warning accordance with the Progressive Discipline Policy. This Written Warning written warning will refer to previous coaching and Final Written Warning counseling sessions, if any. The warnings will be very Termination specific as to the incorrect behavior and spell out further consequences if the behavior is not corrected. * I (*Suspension can also be used depending upon the n Written Warning and Termination situations, circumstances of the situation, at the sole discretion of supportive documentation will be included where Company Owners.) appropriate. In some circumstances, due to the seriousness of the If a time limit for corrective action has been set,this will infraction, it may be appropriate to skip a step or be indicated. The form will be reviewed and signed by proceed directly to a Final Written Warning or the employee. If the employee refuses to sign it,the Suspension, and possibly to immediate termination Supervisor, Company Owner, or Human Resources which is the sole determination of Company Owners. Manager will make a notification as appropriate that the notice was read to the employee who refused to The following categories define the majority of sign it. A copy of this form will be retained in the discipline situations. employee's personnel file. • Failure to perform job requirements: This Suspension category is for situations where the individual is Company Owners have the authority to suspend unable to perform the accountabilities of the employees for serious violations or as part of the position at an acceptable level, with or without progressive discipline policy dependent upon the reasonable accommodation. In some cases,the circumstances. Suspension of an employee(the individual may be making an appropriate effort temporary removal of an employee from work) is used by management to communicate the seriousness of the 21 VERIFICATION I, Richard Fager,Jr., being authorized to do so, hereby verify that the facts set forth in the foregoing Complaint are true and correct to the best of my knowledge, information and belief. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S.A. §4904 relating to unsworn falsification to authorities. Dated: Richard Fage , i E f l i E i WILLIAM BALABAN & ASSOCIATES, LLC By: William R. Balaban, Esquire (PA ID #19667) WBalaban(a,BalabanAndAssociates.com Matthew D. Coble, Esquire (PA ID #89603) MCoble(a,BalabanAndAssociates.com Governors' Row 27 North Front Street Harrisburg, PA 17101 Telephone: (717) 695-2901 Telecopy: (717) 695-7914 Attorneys for Defendant, Darwin K. Brosius R.F. FAGER COMPANY, vs. DARWIN K. BROSIUS, iii PROiHW-WTiRY 2514 JUL 21 VIII: 04 CUMBERLAND COUNTY PENNSYLVANIA : IN THE COURT OF COMMON PLEAS Plaintiff, : OF CUMBERLAND COUNTY, : PENNSYLVANIA : No. 14-4037 CIVIL : Declaratory Judgment Defendant. : NOTICE TO PLEAD To: R.F. Fager Company You are hereby notified to file a written response to the enclosed Preliminary Objections of Darwin K. Brosius to your Complaint for Declaratory Judgment within twenty days of service thereof or judgment may be entered against you. 1 Dated: July 18, 2014 Respectfully submitted, WILLIAM BALABAN & ASSOCIATES, LLC By: 5 c/U� 1/� William R. Balaban, Esquire (PA ID #19677) WBalaban(a,BalabanAndAssociates.com Matthew D. Coble, Esquire (PA ID #89603) MCob1e(a�BalabanAndAssociates.com Governors' Row 27 North Front Street Harrisburg, PA 17101-1606 (717) 695-2901 (phone) (717) 695-7914 (fax) Attorneys for Darwin K. Brosius 2 WILLIAM BALABAN & ASSOCIATES, LLC By: William R. Balaban, Esquire (PA ID #19667) WBalabanABalabanAndAssociates.com Matthew D. Coble, Esquire (PA ID #89603) MCoble(a,BalabanAndAssociates.com Governors' Row 27 North Front Street Harrisburg, PA 17101 Telephone: (717) 695-2901 Telecopy: (717) 695-7914 Attorneys for Defendant, Darwin K. Brosius R.F. FAGER COMPANY, vs. DARWIN K. BROSIUS, : IN THE COURT OF COMMON PLEAS Plaintiff, : OF CUMBERLAND COUNTY, : PENNSYLVANIA : No. 14-4037 CIVIL : Declaratory Judgment Defendant. : DARWIN K. BROSIUS' PRELIMINARY OBJECTIONS TO PLAINTIFF'S DECLARATORY JUDGMENT COMPLAINT Defendant, Darwin K. Brosius ("Mr. Brosius") preliminarily objects to the Declaratory Judgment Complaint filed by the Plaintiff, R.F. Fager Company ("Company"), as follows: FACTUAL BACKGROUND 1. Mr. Brosius, is a long-time shareholder of the Company; and at various times in the past has also served as an officer, director and employee of the Company; indeed, Plaintiff's father, Mr. Delroy D. Brosius (deceased), originally founded the Company with Richard F. Fager (deceased), in the 1960's. 3 2. Mr. Brosius and the Company are parties to a Shareholders' Agreement dated May 19, 2004 (the "Shareholders' Agreement"). 3. Mr. Brosius received a Federal Express letter package dated September 18, 2013 terminating his employment effective immediately due to his "continued unavailability" for work. 4. On October 30, 2013, Mr. Brosius, by and through his undersigned attorneys, and in accordance with Section 1508 of the Pennsylvania Business Corporation Law (15 Pa.C.S. § 1508), made a written request on the Company to produce for inspection and examination its corporate books and records in order to determine: (a) whether the corporation was being properly managed, (b) the manner in which the corporation's finances have been managed; (c) the manner in which the business and affairs of the corporation have been conducted; (d) the value of the corporation's assets; (e) the value of his interest in the corporation, and f) the identity and extent of the other shareholders' interests in the corporation. 4. Mr. Brosius thereafter commenced an action in the Court of Common Pleas of Dauphin County, Pennsylvania on November 7, 2013 to compel the Statutory Inspection and Examination of the Corporate Books and Records of the R.F. Fager Company (Dauphin County Docket No. 2013 -CV -9745 -MP) ("Dauphin County Lawsuit No. 1"). 5. On November 7, 2013, a Rule was then issued upon the Company to show cause why an order directing the inspection and examination sought should not be granted, and then, without any intervention by the Dauphin County Court of Common Pleas, Mr. Brosius and the Company made acceptable arrangements with Mr. Brosius for the inspection of the books and records of the Company to take place. 6. Thereafter, on November 15, 2013, Mr. Brosius through his counsel informed the Dauphin County Court of Common Pleas that the Company intended to comply with Mr. 4 Brosius' October 30, 2013 request for inspection and examination of the Company's books and records. 7. In light of the Company's compliance with the request, Mr. Brosius' counsel requested and the Court did issue an Order dated November 15, 2013 discharging its November 7, 2013 Rule to Show Cause, and retaining jurisdiction over the case. 8. On November 20 and 21, 2013, Mr. Brosius through his counsel and agents undertook an inspection and examination of the corporate books and records of the Company that were made available. 9. During the course of his books and records inspection, serial acts of minority shareholder oppression, self-dealing and breaches of fiduciary duty by the 2 majority shareholders of the Company, Richard Fulton Fager, Jr and Bryce F. Fager, were revealed. 10. It also was revealed during the course of the inspection and examination that certain records, including those pertaining to acts of self-dealing by the majority shareholders, Richard Fulton Fager, Jr and Bryce F. Fager, had been "destroyed". 11. On November 29, 2013, the Company exercised its option to purchase all of the shares (673.33) of the Company owned by Mr. Brosius pursuant to the Shareholders' Agreement. 12. On December 5, 2013, the Company provided Mr. Brosius with a copy of a valuation performed McKonly & Asbury, LLP, as of August 31, 2013, and insisted that it wanted to close on its purchase of the stock prior to year end. 13. Mr. Brosius promptly informed the Company that there would be no closing until he had completed his evaluation and response to the McKonly & Asbury, LLP valuation, and the issues contained in his response were completely resolved. 5 14. On Monday, December 23, 2013 at 5:19 PM (one business day before Christmas Day), the Company's counsel e-mailed Mr. Brosius' counsel notifying him that the purchase of and a closing on the Company's shares owned by Mr. Brosius would take place on Thursday, December 26, 2013 at 2:00 PM (one day after Christmas Day). 15. The Company also informed Mr. Brosius at that time that unless he attended the unilaterally scheduled closing and surrendered his shares, the Company would "cancel" all of his shares on the books of the Company with the purported purchase price ($2,184,908.72) to be held in escrow. 16. The next day, December 24, 2013, Mr. Brosius provided the Company's counsel with his evaluation and substantive objections to the December 5, 2013 McKonly & Asbury, LLP valuation as of August 31, 2013. 17. On the morning of December 26, 2013, Mr. Brosius' counsel informed the Company of his intention to file an Emergency Motion with the Dauphin County Court seeking to stop the Company's unilateral cancellation of his shares. 18. The Company's counsel informed Mr. Brosius' counsel shortly thereafter that the closing and the cancellation of his shares would proceed as scheduled on Thursday, December 26, 2013 at 2:00 PM, unless otherwise ordered by the Dauphin County Court of Common Pleas, notwithstanding Mr. Brosius' objections. 19. Given the exigencies associated with the Company's imminent, unilateral disposition and cancellation of the Mr. Brosius' shares, he sought and obtained emergency relief from the Dauphin County Court of Common Pleas (Dauphin County Lawsuit No. 1) prior to the scheduled Thursday, December 26, 2013, 2:00 PM closing. 6 20. By Order dated December 26, 2013, the Court in Dauphin County Lawsuit No. 1 set the matter for a hearing and directed that the Company take no action with respect to the Company shares owned by the Mr. Brosius; otherwise his shares of the Company would have been gone and under the control of the majority shareholder, Richard Fulton Fager, Jr. & Bryce F. Fager. 21. Had it been permitted to move forward and carry out its plan, the Company and the majority shareholders, Richard Fulton Fager, Jr. and Bryce F. Fager, may well have succeeded in unilaterally stripping Mr. Brosius of his property and ownership interests in the Company stock at a value that is far less than the stock is actually worth under the circumstances, and without due consideration to the minority shareholder oppression, majority shareholders' self-dealing and breaches of fiduciary duty more fully described herein. 22. Since that time, Mr. Brosius and the Company have been engaged in settlement discussions; at the request of the parties, the Dauphin Court has continued the hearing in the pending Dauphin County Lawsuit No. 1 numerous times; a hearing is scheduled to take place on August 5, 2014. See Exhibit "A", May 29, 2014 Order of Court, attached. 23. During the course of the parties' settlement discussions and at the request of the Company's attorney, Mr. Brosius' counsel, on May 6, 2014, shared with the Company's attorneys a lengthy draft Complaint his counsel had prepared against the the majority shareholders, Richard Fulton Fager and Bryce F. Fager individually, as well as the Company. See Exhibit "B", May 6, 2014 email by and between counsel for the parties, attached. 24. The draft Complaint clearly indicated Mr. Brosius' intended forum (the Dauphin County Court of Common Pleas), as well as all of the defendants (Richard Fulton Fager, Jr., Bryce F. Fager and the Company) and the various detailed claims against them. Id. 7 25. Counsel for Richard Fulton Pager, Jr., Bryce F. Pager and the Company had previously expressed his belief that receiving a copy of the draft Dauphin County Complaint might facilitate settlement discussions between the parties. 26. Settlement negotiations have continued until very recently, when to his surprise and disappointment, Mr. Brosius was served the morning of Monday, July 14, 2014 with the Declaratory Judgment Complaint filed by the Company in this Court. 27. The Company never gave any indication of its intention to file this suit; in fact, at the time the suit was filed, Mr. Brosius and his counsel were engaged in what they believed at the time was a good faith attempt to resolve the disputes between the parties. 28. Indeed, Richard Fulton Fager, Jr. Bryce F. Fager and the Company provided Mr. Brosius until the close of business on Friday, July 11, 2014 to respond to various settlement offers made by them; and did in fact call Mr. Brosius' counsel mid-afternoon on Friday, July 11, 2014 to ascertain the status of the current settlement proposals, while these good -faith negotiation (at least on Mr. Brosius' part) were on-going the Company nevertheless had already filed its Complaint in this Court several days earlier. 29. Mr. Brosius had agreed as requested by the Company not to file the Dauphin County Complaint he had prepared and provided to Richard Fulton Fager, Jr., Bryce F. Fager and the Company weeks earlier so that further settlement discussions could be explored, in good faith. 30. Mr. Brosius quickly learned upon being served on July 14, 2014 with the Declaratory Judgment Complaint in this Court that the Company had no intention of further pursuing settlement discussions in good faith, and instead was more concerned with commencing its own lawsuit against Mr. Brosius without his knowledge, and on its own terms. 8 31. In reality, while the Company was purporting to engage in settlement discussions with Mr. Brosius, it was plotting to take unfair advantage of Mr. Brosius' agreement to hold off on filing his Dauphin County Complaint against the majority shareholders and the Company by racing to this Courthouse on July 9, 2014 to file its Declaratory Judgment Complaint (and the whole time knowing that Mr. Brosius is represented by counsel; but nonetheless did not serve him until several days later, on July 14, 2014). 32. In its Declaratory Judgment Complaint, the Company sets forth, chapter and verse, what it perceives as its defenses to each of the claims Mr. Brosius detailed against Richard Fulton Fager, Jr., Bryce F. Fager and the Company in the draft Complaint he shared with them on May 6, 2014. 33. Mr. Brosius filed his Dauphin County Complaint (Case No. 2014 -CV -6283 -CV against the majority shareholders, Richard Fulton Fager, Jr. and Bryce F. Fager, and the Company ("Dauphin County Lawsuit No. 2") on Monday, July 14, 2014 and immediately served copies on Richard Fulton Fager, Jr. and Bryce F. Fager, and the Company. 34. For several reasons, the Declaratory Judgment Complaint filed by the Company against Mr. Brosius must be dismissed. full. FIRST PRELIMINARY OBJECTION Pa. R. C. P. 1028(a)(4) Demurrer 35. Mr. Brosius incorporates by reference the preceding paragraphs as if set forth in 36. Pennsylvania Rule of Civil Procedure 1028(a)(4) supports a preliminary objection where a complaint is legally insufficient. Pa. R.C.P. 1028(a)(4). 9 37. As noted, Dauphin County Lawsuit No. 1 has been pending since November 2013 and is scheduled for a hearing next month. Additionally, the Dauphin County Court of Common has issued a total of 9 Orders. 38. Moreover, Richard Fulton Fager, Jr., Bryce F. Fager, the Company and their counsel have all been fully aware of the contents of the Complaint that Mr. Brosius was forced to file as the result of the Company's abrupt and without notice filing of this lawsuit in its deceitful effort to leap into court and select its own venue by filing the captioned declaratory judgment action. 39. The Fagers and the Company were fully aware of the parties Mr. Brosius intended to sue, the claims against them, and most importantly for the purpose of these preliminary objections, Mr. Brosius' choice of forum, the Dauphin County Court of Common Pleas, where litigation has been going on since November 2013. 40. From the Company's perspective, i.e., forum -shopping in an effort to preempt Mr. Brosius' right to file his lawsuit, the filing of the Company's Declaratory Judgment Complaint in this Court is understandable under the circumstances; however, it simply is not permissible or appropriate under the law of this Commonwealth. 41. Under Pennsylvania law, a plaintiff may not utilize a declaratory judgment action which amounts to a "mere tactical maneuver designed to test the validity of a defense to a future lawsuit" and to usurp a plaintiff's choice of forum. Osram Sylvania Prods., Inc. v. Consump Commods, Inc., 845 A.2d 846, 848 (Pa. Super. 2004). 42. On several occasions, this very Court has sustained preliminary objections on the basis of the Osram case, and properly dismissed those actions, each of which involved tactical ploys such as the one employed by the Company here. See, e.g., Questmont' Strategic Wealth 10 Advisors, Inc. v. Hanshaw, No. 2013-6073 (Jan. 6, 2014 Order of Judges Guido, Masland and Peck); Dawn & Associates Realty, LLC v. Rankin (No. 2005-2823) (December 5, 2005 Order of Judge Hesss). 43. Consequently, the Declaratory Judgment Complaint is legally insufficient and must be dismissed. WHEREFORE, Mr. Brosius respectfully requests that this Preliminary Objection be sustained, and that the Court dismiss the Declaratory Judgment Complaint with prejudice; and for such other and further relief as this court deems appropriate. full. SECOND PRELIMINARY OBJECTION Pa. R. C. P. 1028(a)(4) Demurrer 44. Mr. Brosius incorporates by reference the preceding paragraphs as if set forth in 45. Pennsylvania Rule of Civil Procedure 1028(a)(4) supports a preliminary objection where a complaint is legally insufficient. Pa. R.C.P. 1028(a)(4). 46. As the Superior Court observed in the Osram Sylvania case, la] declaratory judgment proceeding is one in equity." Osram Sylvania Prods., Inc., 845 A.2d at 849. 47. As more fully discussed above, while the Company was purporting to engage in genuine settlement discussions with Mr. Brosius, it was plotting to take unfair advantage of Mr. Brosius' agreement to hold off on filing his Dauphin County Complaint against the majority shareholders and the Company by its racing to this Courthouse on July 9, 2014 to file the captioned Declaratory Judgment Complaint (and the whole time knowing that Mr. Brosius is 11 represented by counsel; but nonetheless did not serve him until several days later, on July 14, 2014). 48. Under such circumstances, equitable relief is unavailable to the Company based on the manner in which it commenced this suit: A court may deprive a party of equitable relief where, to the detriment of the other party, the party applying for such relief is guilty of bad conduct relating to the matter at issue. The doctrine of unclean hands requires that one seeking equity act fairly and without fraud or deceit as to the controversy in issue ... . Terraciano v. Pa. Dep't Transp., 753 A.2d 233, 237-238 (Pa. 2000) 49. The Company's conduct in filing this lawsuit against Brosius bars the very relief it seeks from this Court. 50. Consequently, the Declaratory Judgment Complaint is legally insufficient and must be dismissed. WHEREFORE, Mr. Brosius respectfully requests that this Preliminary Objection be sustained, and that the Court dismiss the Declaratory Judgment Complaint with prejudice; and for such other and further relief as this court deems appropriate. THIRD PRELIMINARY OBJECTION Pa. R. C. P. 1028(a)(5) Failure to Join Indispensable Parties 51. Mr. Brosius incorporates by reference the preceding paragraphs as if set forth in full. 52. Pennsylvania Rule of Civil Procedure 1028(a)(5) supports a preliminary objection for failure to join indispensable parties. Pa. R.C.P. 1028(a)(5). 53. In its Declaratory Judgment Complaint, the Company is the only named plaintiff seeking declarations with respect to the claims asserted by Mr. Brosius. 12 54. As the Company has been aware for months, however, Mr. Brosius principal claims are against the majority shareholders, Richard Fulton Fager, Jr. and Bryce F. Fager, for serial acts of minority shareholder oppression, self-dealing and breaches of fiduciary duty. 55. Clearly, the Company's Declaratory Judgment Complaint was designed to shield the Fagers from becoming individual parties to the case, so that they would not have to answer the allegations that Mr. Brosius had previously apprised them of months earlier in the draft Dauphin County Complaint that was shared with them and their counsel at their request. 56. The failure to join indispensable parties deprives a court of subject matter jurisdiction with respect to a declaratory judgment claim. Vale Chem. Co. v. Hartford Accident & Indemnity Co., 516 A.2d 684, 685 (Pa. 1986). 57. Moreover, there is a statutory requirement that all interested parties shall be joined in a declaratory judgment action: General rule. — When declaratory relief is sought all persons shall be made parties who have or claim any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceeding. 42 Pa. C.S. § 7540(a). 58. Richard Fulton Fager, Jr. and Bryce F. Fager were and are interested and indispensable parties to any lawsuit that revolves around the serial acts of minority shareholder oppression, self-dealing and breaches of fiduciary duty perpetrated by them. 59. Consequently, the Declaratory Judgment Complaint is legally insufficient and must be dismissed for failure to join indispensable parties. WHEREFORE, Mr. Brosius respectfully requests that this Preliminary Objection be sustained, and that the Court dismiss the Declaratory Judgment Complaint with prejudice; and for such other and further relief as this court deems appropriate. 13 FOURTH PRELIMINARY OBJECTION Pa. R. C. P. 1028(a)(4) Demurrer 60. Mr. Brosius incorporates by reference the preceding paragraphs as if set forth in full. 61. Pennsylvania Rule of Civil Procedure 1028(a)(4) supports a preliminary objection where a complaint is legally insufficient. Pa. R.C.P. 1028(a)(4). 62. In its Declaratory Judgment Complaint, the Company purports to assert a claim for conversion of Company property against Mr. Brosius. See Complaint, p. 14 63. The Company vaguely asserts "at various times during the course of his employment", Mr. Brosius converted Company supplies and materials for his own use. Id. 64. Under Pennsylvania law, a conversion is the "deprivation of another's right of property in, or use or possession of, a chattel, without the owner's consent and without lawful justification." Paves v. Carson, 765 A.2d 1128, 1134 (Pa. Super. 2000). 65. Several substantive impediments are associated with the Company's conversion claim. 66. Initially, and as noted by the Company in its Declaratory Judgment Complaint, Mr. Brosius owns 13.3% of the Company, and hence has an ownership interest in each and every piece of property owned by the Company. 67. Mr. Brosius cannot legally have converted property he owns in part. 68. Moreover, Mr. Brosius was a Company employee for in excess of 40 years; any alleged conversion by him that occurred more than 2 years ago is time-barred; the Declaratory Judgment Complaint fails to specify any particular alleged incident of conversion. 14 69. Finally, the use of plumbing supplies by Mr. Brosius and other employees and owners' of the Company was with the Company's full knowledge and consent, rendering the conversion claim legally deficient for an additional reason. 70. Consequently, the conversion claim set forth in the Declaratory Judgment Complaint is legally insufficient and must be dismissed. WHEREFORE, Mr. Brosius respectfully requests that this Preliminary Objection be sustained, and that the Court dismiss the conversion claim set forth in the Declaratory Judgment Complaint with prejudice; and for such other and further relief as this court deems appropriate. Dated: July 18, 2014 Respectfully submitted, WILLIAM BALABAN & ASSOCIATES, LLC By: GLV William R. Balaban, Esquire (PA ID #19677) WBalaban(&,BalabanAndAssociates.com Matthew D. Coble, Esquire (PA ID #89603) MCobleABalabanAndAssociates.eom Governors' Row 27 North Front Street Harrisburg, PA 17101-1606 (717) 695-2901 (phone) (717) 695-7914 (fax) 15 Attorneys for Darwin K. Brosius Exhibit "A" DARWIN K. BROSIUS, V. : IN THE COURT OF COMMON PLEAS DAUPHIN COUNTY, PENNSYLVANIA Plaintiff : NO. 2013 -CV -9745 -MP R.F. FAGER COMPANY, Defendant : CIVIL ACTION — LAW Wo, 3 T3 1*--- rri 1.0 -r c-7) C) .);;.C Cr: Coa • gn ORDER AND NOW, this ,1 day of May, 2014, prior to the Hearing scheduled on May 29, 2014, and upon agreement of all parties, IT IS HEREBY ORDERED AND DECREED that the Hearing previously scheduled for May 29, 2014 at 9:00 a.m. is hereby CONTINUED to August 5, 2014 at 9:00 a.m. in Courtroom No. 5 of the Dauphin County Court House. Counsel/the parties shall check-in with Chambers of the undersigned, located on the third floor of the Dauphin County Courthouse, fifteen (15) minutes prior to the scheduled time of the hearing. IT IS FURTHER ORDERED that other than the above change, the balance of this Court's March 14, 2014 Order shall remain in full force and effect. BY THE COURT: Bernard L. Coates, • 1111 WA* oorlity at lote0"n0 is true and correct copy i<tne, onoinci DISTRIBUTION: William R. Balaban, Esquire, Matthew D. Coble, Esquire, William Balaban & Associates, LLC, 27 North Front Street, Harrisburg, PA 17101; (717) 695-2901 (phone); (717) 695-7914 (fax); W13alaban@BalabanAnd Associates. c ona, MCobl c@B al abanAnd A ssoci atcs. corn (e-mail); (Counsel for Movant, Darwin K. Brosius. Paul W. Minnich, Esquire, Barley Snyder, 100 East Market Street, York, PA 17401: (717) 852- 4976 (phone)1 (717) 843-8492 (fax); pminnich@barley.com (email); (Counsel for the R.F. Fager Company). John A. Feichtel, Esquire, Saidis, Sullivan & Rogers, Suite 400, 635 North 12th Street, Lemoyne, PA 17043: (717) 612-5803 (phone); (717) 612-5805 (fax); jfeichtel@ssr- attorneys.com (e-mail); (Counsel for the R.F. Fager Company). C— NPVIA 1—%• C Exhibit "B" Bill Balaban From: Bill Balaban Sent: Tuesday, May 06, 2014 1:15 PM To: 'Minnich, Paul W. Cc: John A. Feichtel; Matt Coble Subject: RE: Darwin K. Brosius Attachments: 5-644 DRAFT complaint v Dick, Bryce & Corp-Final.pdf Paul: Thank you for your below e-mail. Attached is Darwin Brosius' draft complaint. We anticipate filing it on May 14, 2014, unless we here otherwise from you. Regards, Bill From: Minnich, Paul W. [mailto:pminnich@barley.com] Sent: Sunday, May 04, 2014 8:49 PM To: Bill Balaban Cc: John A. Feichtel; Matt Coble Subject: RE: Darwin K. Brosius I have authority to accept service of the complaint on behalf of the Company and Richard and Bryce individually. Upon reviewing it, I can get back to you regarding the issue of potential settlement Thanks, Paul Paul W. Minnich, Esquire 100 East Market Street York, PA 17401 T: 717-852-4976 I F: 717-843-8492 Bio I vCard I www.barley.com PRACTICE Bark Sn der EXCELLENCEATTORNEYS AT LAW Nothing contained in this email or any attachments is intended to be used, or can be used, to avoid penalties under the Internal Revenue Code or applicable state and local tax provisions. This email and any attachments may contain privileged and confidential information and are solely for the use of the senders intended recipient(s). If you received this email in error, please notify the sender by reply email and delete all copies and attachments. Thank you. From: Bill Balaban [mailto:wbalabanObalabanandassociates.com] Sent: Friday, May 02, 2014 2:09 PM To: Minnich, Paul W. Cc: John A. Feichtel; Matt Coble Subject: RE: Darwin K. Brosius 1 Paul: This will acknowledge your below e-mail regarding your forthcoming comments to our mark-ups on the Confidentiality Agreement. Having not received the R.F. Fager Company's reply to our April 8, 2014 letter, we are moving forward with the filing of our Complaint. While Mr. Brosius has been eminently patient, he is no longer prepared to sit idiy by as more time passes with absolutely no meaningful input from the Company. Please let us know if you will accept service on behalf of the Corporation and Richard and Bryce individually. If you do agree to accept service, we will delay filing the Complaint for 5 business days to provide you the opportunity to review it and discuss it with the Fagers. Otherwise, we anticipate filing the Complaint Monday, and dispatching the Sheriff's Office for personal service. Regards, Bill From: Minnich, Paul W. [maihn:ominnich(abaday.com] Sent: ThursdayMay 01, 2014 11:04 PM To: Bill Balaban Cc: John A. Feichtel; Matt Coble Subject: Re: Darwin K. Brosius Thanks Bill. I returned Monday but had to deal with a trial on Tuesday and two hearings on Wednesday. I have a few modifications to your draft of the confidentiality agreement which I will forward to you tomorrow. Sent from my iPad On Apr 28, 2014, at 1:34 PM, "Bill Balaban" <wbalaban@balabanandassociates.com> wrote: 2 VERIFICATION I, Darwin K. Brosius, hereby state, subject to the penalties contained in 18 Pa. C.S. § 4904 relating to unsworn falsification to authorities, that the facts set forth in the foregoing document are true and correct to the best of my knowledge, information and belief. Dated: Darwin K. Brosius CERTIFICATE OF SERVICE I hereby certify that I served a true and correct copy of the foregoing Preliminary Objections of Darwin K. Brosius upon the following in the manner indicated below: VIA REGULAR UNITED STATES MAIL Paul W. Minnich, Esquire Barley Snyder 100 East Market Street York, PA 17401 E-MAIL: pminnich@barley.com John A. Feichtel, Esquire Saidis, Sullivan & Rogers Suite 400635 North 12th Street Lemoyne, PA 17043 E-MAIL: jfeichtel@ssr-attorneys.com Dated: July 18, 2014 Ilkakt2d Matthew D. Coble, Esquire 16 0 FILED-OFF6.CE OF THE PROTHONOTARY 2014 AUC -6 PM 2: t6 E U PE NNSYLVAN A Y Paul W. Minnich Barley Snyder 100 East Market Street York, PA 17401 717-846-8888 Fax: 717-843-8492 pminnich@barley.com PA 74453 John A. Feichtel Saidis, Sullivan & Rogers 635 North 12th Street Suite 400 Lemoyne, PA 17043 717-612-5803 Fax: 717-612-5805 jfeichtel@ssr-attorneys.com PA 77426 Attorneys for Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA R. F. FAGER COMPANY, v. DARWIN K. BROSIUS, Plaintiff Defendant No. 14-4037 Civil Civil Action Declaratory Judgment NOTICE TO DEFEND YOU HAVE BEEN SUED IN COURT. IF YOU WISH TO DEFEND AGAINST THE CLAIMS SET FORTH IN THE FOLLOWING PAGES, YOU MUST TAKE ACTION WITHIN TWENTY (20) DAYS AFTER THIS COMPLAINT AND NOTICE ARE SERVED BY ENTERING A WRITTEN APPEARANCE PERSONALLY OR BY ATTORNEY AND FILING IN WRITING WITH THE COURT YOUR DEFENSES OR OBJECTIONS TO THE CLAIMS SET FORTH AGAINST YOU. YOU ARE WARNED THAT IF YOU FAIL TO DO SO, THE CASE MAY PROCEED WITHOUT YOU AND A JUDGMENT MAY BE ENTERED AGAINST YOU BY THE COURT WITHOUT FURTHER NOTICE FOR ANY MONEY CLAIMED IN THE COMPLAINT OR FOR ANY OTHER CLAIM OR RELIEF REQUESTED BY THE PLAINTIFF. YOU MAY LOSE MONEY OR PROPERTY OR OTHER RIGHTS IMPORTANT TO YOU. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER, 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 South Bedford Street Carlisle, PA 17013 Telephone No. (717) 249-3166 or (800) 990-9108 AVISO USTED HA SIDO DEMANDADO EN LA CORTE. Si usted desea defenderse de las quejas expuestas en las paginas siguientes, debe tomar accion dentro de veinte (20) dias a partir de la fecha en que recibio la demanda y el aviso. Usted debe presentar comparecencia escrita en persona o por abogado y presentar en la Corte por escrito sus defensas o sus objeciones a las demandas en su contra. Se le avisa que si no se defiende, el caso puede proceder sin usted y la Corte puede decidir en su contra sin mas aviso o notificacion por cualquier dinero reclarado en la demanda o por cualquier otra queja o compensacion reclamados por el Demandante. USTED PUEDE PERDER DINERO, 0 PROPIEDADES U OTROS DERECHOS IMPORTANTES PARA USTED. LLEVE ESTA DEMANDA A UN ABOGADO IMMEDIATAMENTE. SI USTED NO TIENE 0 NO CONOCE UN ABOGADO, VAYA 0 LLAME A LA OFICINA EN LA DIRECCION ESCRITA ABAJO PARA AVERIGUAR DONDE PUEDE OBTENER ASISTENCIA LEGAL. SI USTED NO PUEDE PARARLE A UN ABOGADO, STA OFICINA PUEDE PROVEERE INFORMACION ACERCA AGENCIAS QUE PUEDAN OFRECER SERVICIOS LEGAL A PERSONAS ELIGIBLE AQ UN HONORARIO REDUCIDO 0 GRATIS. CUMBERLAND COUNTY BAR ASSOCIATION 32 South Bedford Street Carlisle, PA 17013 Telephone No. (717) 249-3166 or (800) 990-9108 Paul W. Minnich Barley Snyder 100 East Market Street York, PA 17401 717-846-8888 Fax: 717-843-8492 pminnich@barley. corn PA 74453 John A. Feichtel Saidis, Sullivan & Rogers 635 North 12th Street Suite 400 Lemoyne, PA 17043 717-612-5803 Fax: 717-612-5805 jfeichtel@ssr-attorneys.com PA 77426 Attorneys for Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA R. F. FAGER COMPANY, v. DARWIN K. BROSIUS, Plaintiff Defendant No. 14-4037 Civil Civil Action Declaratory Judgment AMENDED COMPLAINT Plaintiff, R. F. Fager Company, by its undersigned counsel, files the following Amended Complaint: 1 1. Plaintiff is R. F. Fager Company, a Pennsylvania corporation which has an office and place of business at 2058 State Road, Camp Hill, Cumberland County, Pennsylvania 17011 (Company or Fager). 2. Defendant is Darwin K. Brosius, an adult individual who resides at Lot 8, 62 Landvale Road, York Haven, York County, Pennsylvania 17370 (Brosius). 3. This Court has jurisdiction in this action pursuant to 42 Pa.C.S.A. § 5301. 4. Venue properly lies in Cumberland County as Plaintiff has its offices and principal place of business in Cumberland County and all corporate actions giving rise to the causes of action at issue occurred exclusively in Cumberland County. 5. Plaintiff brings this action pursuant to the Declaratory Judgments Act, 42 Pa.C.S.A. §7531, et seq. 6. The Declaratory Judgments Act is available to obtain the declaration of existing legal rights, duties, or status of parties if the declaration will aid in a determination of a genuine, justiciable controversy. 7. This case presents actual and justiciable controversies between the Company and Brosius as set forth below. 8. Absent declaration from this Court, the rights, status, and other legal relations of the parties are uncertain. 9. All parties who have an interest that would be affected by the declarations requested herein have been joined in the instant action. 2 10. The Company began as a partnership in 1966 and was incorporated in 1974. It is the leading distributor of a wide range of plumbing, heating, cooling, roofing, electrical and industrial hose products in Central Pennsylvania. 11. The Company has been and remains family owned and operated. The Company takes pride in its start with a modest beginning, as being founded by hard working, intelligent men with conservative roots which has carried over into its business practices. 12. Brosius is a second generation owner and employee, being the son of the Company's co-founder, Delroy Brosius. Brosius was employed by the Company until September 2013 as an outside sales person. 13. Brosius became a shareholder of the Company in 1978 and owns approximately 13% of the outstanding shares. 14. During the course of his employment, Brosius was accorded highly favorable treatment by the Company including the following: (a) The Company provided no interest loans to Brosius for many of the years of his employment and was never denied a loan request. (b) Brosius was allowed to purchase product from the Company and carried a large accounts receivable balance which he was allowed to roll over year after year with no interest accruing. (c) Despite having a number of DUI and related criminal charges as outlined infra, Brosius was not disciplined or terminated until he missed over six weeks of work due to incarceration resulting from a DUI charge and parole violation. 3 (d) Brosius chose to work a shorter work week than all other employee shareholders. (e) Brosius was asked to, but refused to, work Saturdays like all other employee shareholders of the Company. (f) Brosius undertook no management responsibility and never provided any general input for the betterment of the Company. (g) Brosius attended fewer than half of the monthly sales meetings which was a core responsibility of the outside sales staff of which Brosius was a member. (h) Brosius rarely took calls via his cellular telephone and, instead, calls were diverted to his voicemail which was almost always full. (i) Brosius's unavailability via telephone created significant inconvenience to customers and fellow employees. (j) Brosius never notified Company management of any of his drinking -related charges except on one occasion when approached by a Director and advised that he needed to do so. (k) Brosius refused to utilize the Company's new business software which was installed in 2008. Brosius refused to even login and never attempted to access information vital to assisting customers. In fact, Brosius was the only full-time outside salesman that did not access the computer system on an almost daily basis. 4 (1) Brosius colluded with an inside company representative to conceal from management his work release situation and dishonestly misrepresented who his direct supervisor was to conceal from Company management his criminal misconduct. Request for Declaratory Judgment No. 1 Termination of Employment Proper 15. Fager incorporates by reference paragraphs 1 through 14 above. 16. By letter dated September 18, 2013, the Company terminated Brosius' employment, effective immediately, due to his "continued unavailability" for work. 17. In fact, Brosius has a long history of alcohol related arrests, as evidenced by Court records as follows: (a) April 13, 1999, driving under the influence and related charges in Perry County; (b) October 11, 2004, driving while impaired (with highest rate of alcohol) and related charges in Cumberland County; (c) July 12, 2005, driving while impaired (with the highest rate of alcohol) and related charges in Cumberland County; (d) September 16, 2005, driving while impaired (with highest rate of alcohol) and related charges in Cumberland County; (e) February 16, 2006, failing to stop and give aid, failing to notify policy of accident involving injury, giving false information, and related charges in Cumberland County; 5 (f) November 7, 2011, driving under the influence and related charges in Cumberland County; (g) On August 5, 2013, driving while intoxicated and driving while under license suspension in York County. 18. During Brosius's most recent period of incarceration, Brosius repeatedly represented to his brother, Darrell Brosius, that he was resigning from the Company voluntarily and Brosius asked his brother, Darrell, to communicate this to Company management. 19. Brosius has contested his termination and has stated he is entitled to employment so long as he desires. 20. The Company and Brosius never entered into an employment agreement, either written or oral. 21. The Company believes and therefore avers that Brosius' employment with the Company was "at will" as that term has been interpreted by Pennsylvania case law. 22. The Company believes and therefore avers that the mere fact that Brosius is a shareholder does not entitle him to lifetime employment. 23. Brosius' behavior as described above is inconsistent with the Company's reputation in the community and in the industry and is contrary to its written policies. 24. The Company has a written "Drug and Alcohol Free Workplace Policy" (Alcohol Policy) which prohibits all employees from involvement in illegal alcohol related conduct, including driving under the influence. In addition, the Alcohol Policy requires an employee who is convicted of an alcohol violation to notify the Company's Human Resources Manager within 6 five days after conviction. The Alcohol Policy provides that the Company is entitled, under its own independent authority, to take disciplinary action against an employee, including termination. The relevant portions of the Alcohol Policy are attached and made a part hereof as Exhibit A. 25. In addition, the Company has distributed an Employee Handbook by which it sets forth general information and guidelines regarding employment with the Company and explains the Company's policies and procedures. 26. Brosius' alcohol related conduct as described above is contrary to the Standards of Conduct set forth in the Employee Handbook. As stated in the Employee Handbook alcohol violations constitute a flagrant violation of the Company's policy. The relevant excerpt from the Employee Handbook is attached as Exhibit B. 27. An actual controversy exists as to whether the Company terminated Brosius' employment for just cause as he has threatened legal action regarding the circumstances surrounding his termination. 28. Only the entry of a declaratory judgment will terminate the uncertainty and controversy regarding the nature of Brosius' termination. 29. Accordingly, the Company seeks a determination that Brosius had no guarantee of employment, that absent any employment agreement he was an "at will" employee, and his termination of employment was for just cause. WHEREFORE, Plaintiff, R. F. Fager Company, seeks a judicial determination that its termination of Defendant, Darwin K. Brosius, was proper. 7 Request for Declaratory Judgment No. 2 Purchase and Sale of Colt Plumbing, Inc., Ratified by Shareholders and Directors 30. Fager incorporates by reference paragraphs 1 through 29 above. 31. Brosius has threatened litigation regarding the Company's purchase in 1996 and sale in 2003 of a local wholesale plumbing business, Colt Plumbing, Inc. (Colt). 32. The Company's purchase of Colt and its subsequent sale to a third party were done with approval and ratification of its Board of Directors and the shareholders -- all material terms disclosed and agreed upon and with the benefit of legal counsel. In fact, the transactions were discussed and unanimously approved at joint meetings of the shareholders and directors. 33. Brosius has made certain allegations regarding the transactions which are based on half-truths and hindsight and which are not relevant in 2014, a decade after the sale. 34. Brosius had knowledge of the Colt transactions at the time they occurred and made no objection despite the fact that the Colt acquisition and sale resulted in a financial loss to the Company. 35. The Company therefore seeks a determination that Brosius is estopped from bringing any claims against the Company relating to its transactions vis-a-vis Colt -- the purchase in 1996 and the sale in 2003 -- due to waiver, the passage of time and the relevant statute of limitations. WHEREFORE, Plaintiff, R. F. Fager Company, seeks a judicial determination that Defendant, Darwin K. Brosius, is estopped from bringing any action or claims against the Company as to its purchase and sale of Colt Plumbing, Inc. 8 Request for Declaratory Judgment No. 3 Fager Leasing, Inc. Reduced Capital Expenditures 36. Fager incorporates by reference paragraphs 1 through 35 above. 37. Brosius has threatened litigation regarding the formation and operation of an entity known as Fager Leasing. 38. Fager Leasing was formed as a vehicle to purchase assets for lease back to the Company as a means of reducing the Company's capital expenditures. This system was established as a legitimate business practice and provided a benefit to all Company shareholders. 39. This business method was disclosed to all shareholders. 40. Fager Leasing ceased operation in 2007 -- seven years ago. 41. Brosius never objected to or otherwise questioned this business practice. 42. The Company therefore seeks a determination that Brosius is estopped from bringing claims against the Company with regard to Fager Leasing due to waiver, the passage of time and the relevant statute of limitations. WHEREFORE, Plaintiff, R. F. Fager Company, seeks a judicial determination that Defendant, Darwin K. Brosius, is estopped from bringing any action or claims against the Company as to its dealings with Fager Leasing. Request for Declaratory Judgment No. 4 Peleton Investments, LLC Had No Impact on Brosius 43. Fager incorporates by reference paragraphs 1 through 42 above. 44. Brosius has threatened litigation regarding the formation and operation of Peleton Investments, LLC (Peleton) by Bryce F. Fager, a Company shareholder. 9 45. The Company acknowledges that Peleton's registered address was the Company's Camp Hill address, which was done for convenience only. The address has now been changed. 46. The Company avers that Peleton was an investment vehicle of Bryce Fager, is unrelated to the Company and, further, is unrelated to Brosius. 47. Peleton purchases goods from the Company at a profit and there is no detriment to the Company as a result of these sales. 48. The Company believes and therefore avers that its shareholders are entitled to own personal investments outside of the Company. 49. The Company therefore seeks a determination that Brosius is estopped from bringing claims against the Company with regard to Peleton in that this relationship has no detrimental impact on the Company or Brosius and in fact has no actual connection to the Company or .Brosius. WHEREFORE, Plaintiff, R. F. Fager Company, seeks a judicial determination that Defendant, Darwin K. Brosius, is estopped from bringing any action or claims against the Company as to Peleton Investments, LLC. Request for Declaratory Judgment No. 5 Compensation Paid to Majority Shareholders Fair and Reasonable 50. Fager incorporates by reference paragraphs 1 through 49 above. 51. Brosius has threatened litigation with regard to the compensation paid to the majority shareholders Richard Fulton Fager, Jr. and Bryce F. Fager for the years 2000 through 2012. 10 52. The compensation, including salary, bonus and other fringe benefits paid to these shareholders was established by Company management in consultation with the Company's outside accountant, is fair and reasonable, and consistent with the percentage ownership of these shareholders. 53. The Company believes and therefore avers that the compensation is fair and reasonable, accords with like positions in the industry, accords with similar positions in the community, and accords with the benefit received by the Company for the services provided. 54. The Company therefore seeks a determination that Brosius is estopped from challenging at this time the compensation paid to the majority shareholders during the period 2000 through 2012. WHEREFORE, Plaintiff, R. F. Fager Company, seeks a judicial determination that Defendant, Darwin K. Brosius, is estopped from bringing any action or claims against the Company as to compensation paid to the majority shareholders. Request for Declaratory Judgment No. 6 Distributions to Shareholders Sound Business Decision 55. Fager incorporates by reference paragraphs 1 through 54 above. 56. Brosius has threatened litigation against the Company due to its decisions regarding the percent of profits distributed to shareholders. 57. In fact, the Company managed strong growth despite the recession which began in 2008 and the share value of Brosius and all other shareholders doubled from 2000 to 2012. 11 58. As confirmed by its balance sheet and financial records, the Company has been financially successful during its entire existence. 59. The Company believes and therefore avers that its distribution formula has been based on sound business practice. The Company believes and therefore avers that Brosius has failed to demonstrate or produce any evidence to the contrary. 60. The Company believes and therefore avers that Brosius' percent of distributions has been paid directly in accordance with his percentage ownership. 61. The Company therefore seeks a determination that Brosius is estopped from challenging at this time the distributions to shareholders. WHEREFORE, Plaintiff, R. F. Fager Company, seeks a judicial determination that Defendant, Darwin K. Brosius, is estopped from bringing any action or claims against the Company as to distributions to shareholders. Request for Declaratory Judgment No. 7 Customer Accounts and Bonus Payment 62. Fager incorporates by reference paragraphs 1 through 61 above. 63. Brosius has alleged that the Company stripped him of customer accounts which he developed and from which he was entitled to commissions. 64. Brosius has alleged that the Company failed to pay him a 2013 bonus. 65. Brosius has threatened litigation on these issues. 66. The Company believes and therefore avers that it has acted reasonably and responsibly in maintaining customer accounts. 12 67. The Company believes and therefore avers that it has acted reasonably and responsibly in awarding bonuses. 68. The Company believes and therefore avers that it has exercised sound business judgment with regard to customer accounts and to any bonus earned or unearned by Brosius. 69. The Company therefore seeks a determination that Brosius is estopped from challenging the Company's actions at this time. WHEREFORE, Plaintiff, R. F. Fager Company, seeks a judicial determination that Defendant, Darwin K. Brosius, is estopped from bringing any action or claims against the Company as to its customer accounts or an award of a 2013 bonus to him. Conversion 70. Fager incorporates by reference paragraphs 1 through 69 above. 71. Brosius at various times during the course of his employment appropriated for his own use various plumbing supplies and materials which were owned by the Company 72. Specifically, Brosius appropriated for his own use the following: (a) On or about August 23, 2012, a 5' piece of copper tubing. 73. Brosius failed to pay for the plumbing supplies and material or reimburse the Company for same in any respect. 74. The aforementioned conduct of Brosius constitutes conversion by Brosius. 75. Brosius's conversion of plumbing supplies and materials was done without the Company's consent and was without lawful justification. 13 76. Brosius's conversion of the property was in violation of the Company's property rights. 77. As a result of Brosius' conversion as described, the Company has been deprived of its right in or the use of the property. WHEREFORE, Plaintiff, R. F. Fager Company, seeks judgment in its favor and against Darwin K. Brosius for conversion in an amount not to exceed the jurisdictional limits for compulsory arbitration in Cumberland County. Unjust Enrichment 78. Fager incorporates by reference paragraphs 1 through 77 above. 79. During the period January 5, 2012, through September 6, 2013, Brosius held a receivable account with the Company by which he purchased items on open account and which he promised to pay net 30 days. 80. A statement showing the current balance of the open account is attached and made a part hereof as Exhibit C. 81. As shown on Exhibit C, the current outstanding balance owing is $27,633.48. 82. Although the Company has requested Brosius to pay the outstanding balance due, he has failed and refused to do so. 83. Due to his failure to pay the sums rightfully due the Company, Brosius has profited and enriched himself at the Company's expense. 84. As a result of Brosius's unjust enrichment, Fager has suffered a loss in the amount of $27,633.48, and a demand is hereby made therefor. 14 WHEREFORE, Plaintiff, R. F. Fager Company, seeks judgment in its favor and against Darwin K. Brosius for unjust enrichment in the amount of $27,633.48, plus interest and costs of suit. BARLEY SNYDER P. . Minnie 0 East Market Street York, PA 17401 717-846-8888 Fax: 717-843-8492 pminnich@barley.com PA 74453 John A. Feichtel Saidis, Sullivan & Rogers 635 North 12th Street Suite 400 Lemoyne, PA 17043 717-612-5803 Fax: 717-612-5805 jfeichtel@ssr-attorneys.com PA 77426 Attorneys for Plaintiff 4393594.2 EXHIBIT A R.F. Fager Company Drug and Alcohol Free Workplace Policy 1. Purpose R.F. Fager Company (hereinafter referred to as the "Company") is committed to providing and a safe workplace for all employees. The Company recognizes that drug and alcohol abuse impairs employee productivity and performance and poses a direct and significant threat to employee safety. For these reasons and additionally recognizing other adverse legal, economic and social consequences of substance abuse, this Drug and Alcohol Free Workplace Policy is adopted and enforced in order to: a. protects employee safety, health, and well-being; b. protects company property, equipment, and operations; c. protects those who come into contact with, do business with or buy from Company; d. maintains consumer confidence; e. maintains high employee morale; f. comply with the legal mandates of the Federal Motor Carrier Safety Administration (FMCSA) of the United States Department of Transportation; and g. deters illicit drug and on-the-job alcohol use. 2. Scope and Applicability A. Scope. This policy establishes the Company's policy and procedures regarding; (i) alcohol use and abuse; and (ii) the illegal and misuse of drugs, including illegal drugs, prescription drugs and over- the-counter medication. The term illegal or illicit drugs include all controlled substances, the possession of which is illegal under federal law. This Policy shall apply to all employees including full-time, part- time and temporary (hereinafter referred to as "employees") as well as applicants within the organization without exception. This Policy also applies to temporary workers provided by employment agencies; the Discipline Section, however, does not apply. Instead, if a worker supplied by a temporary employment agency violates the policy; the placement agency will be advised that the worker should not be sent for further work at the Company. It is the duty of an employee to review and understand the policy, the benefits of the policy to the employees and to the Company, the effects of drugs and alcohol misuse on individuals and their families, and the use of alcohol and drug tests. A few provisions apply only to employees subject to the DOT requirements, those employees are referred to as "DOT covered" or "DOT regulated" employees. For the Company, DOT covered employees are those who must have a Commercial Driver's License (CDL) to perform their job duties. The Company also has adopted policy provisions, under its independent authority as an employer, that apply to DOT covered employees. For purposes of DOT regulations, "performing a safety -sensitive function" means a DOT covered employee is considered to be performing a safety -sensitive function during any period in which he or she is actually performing, ready to perform or immediately available 1 3. Compliance with and modification of policy A. Compliance a condition of employment. The Company requires that all employees, at all levels within the organization, to comply with this Drug and Alcohol Free Workplace Policy as a condition of employment. B. Employment relationship unchanged. The Policy does not create an expressed or implied employment contract. This Policy does not affect an employee's status as an "employee at -will," which, under Pennsylvania law, simply means that an employee may resign his/her employment or be terminated at any time for any or no reason whatsoever. C. Policy Modification. This Policy supersedes any other Company policy or practice on the subject of drug and alcohol use, abuse and testing. At any time, the Company may unilaterally amend, supplement, modify or change any part of this Policy, including changes necessary to comply with federal, state or local laws. D. Safety Manager. If you have any questions regarding this policy, please direct them to the Safety or Human Resources Manager who coordinate the drug-free workplace program for the Company. This Policy shall be effective October 1, 2010. an col lol Prohibited Coni A. Illegal Drugs (1) DOT employees. Under DOT regulations, no DOT covered employee shall report for duty or remain on duty requiring performance of safety -sensitive functions when the driver uses any controlled substance unless pursuant to a prescription. Additionally, no DOT covered employee shall report for duty, remain on -duty or perform a safety -sensitive function, if the driver tests positive for a controlled substance. (2) All employees. Under its independent authority as an employer, the Company prohibits all employees from selling, manufacturing, distributing, conveying, dispensing, using, possessing, purchasing, obtaining, being under the influence of or testing positive for the illegal use of drugs at any time. B. Prescription Drugs (1) DOT Employees. Under DOT regulations, no DOT covered employee shall report for duty or remain on duty requiring the performance of safety -sensitive functions when the DOT regulated employee uses any controlled substance, except when the use is pursuant to the instructions of a physician who has advised that employee that the substance does not adversely affect the employee's ability to safely operate a commercial motor vehicle. (2) All Employees. The Company prohibits all employees from illegally selling, manufacturing, distributing, dispensing, using, possessing, purchasing or obtaining prescription drugs at any time; a being under the influence of, or testing positive for, prescription drugs illegally obtained or used at any time. In addition, the Company prohibits an employee while on -duty, while on work premises, during lunch or other breaks, while representing the Company or while operating a motor vehicle from being 3 under the influence of legally obtained and used prescription drugs that affect the individual's functioning in such a way as to jeopardize the safety of the employee or others or to substantially impair job performance. It shall be a violation of this Policy for an employee to fail to report, as required below in Paragraph 5, prescription drug use that is likely to affect the employee's functioning in such a way as to jeopardize the safety of the employee or others or to substantially impair job performance. C. Over -the -Counter Drugs Under its independent authority, the Company prohibits all employees from being under the influence of, or testing positive for, mood -altering over-the-counter drugs used contrary to the product's labeling (i.e... misuse of over-the-counter drugs) while on -duty, on work premises, during lunch or other breaks or while representing the Company. In addition, while on -duty, while on work premises, during lunch or other breaks, while representing the Company or operating a motor vehicle, an employee shall not be under the influence of, or test positive for, properly -used over-the-counter drugs that affect the individual's functioning or behavior in such a way as to jeopardize the safety of the employee or others or to substantially impair job performance. It shall be a violation of this Policy for an employee to fail to report, as required below in Paragraph 5, over-the-counter drug use that is likely to affect the individual's functioning in such a way as to jeopardize the safety of the individual or others or to substantially impair job performance. D. Alco istributing ora` conduct, including, but no while on;the work site, whi while operatingAa motorve urtherinore' ossessing, using;. e involved !wale alcohc. consum ng,::` being under; arty time), while representin, tea:: le representing t violations ompany or tits ail employees from possessing opened containers, using istrrbute, manufacturing, dispersing, testing positive for, or unch'or other breaks, on work premises( at function (on4RF, Fager Companyxl uires?prior authorization by cop ionally, the date, time; and list of ai functi`on;vui e maintained ani rovi_ except on,.is premises) fore pan owners LIS -1.68'g tents€ uman ees involved in the esources onager: (2) DOT employees. Additionally, in accordance with DOT regulations, the following conduct is prohibited for DOT covered employees: (1) reporting for duty or remaining on duty requiring the performance of safety - sensitive functions while having an alcohol concentration of 0.02 or greater; 4 (2) being on duty or operating a commercial motor vehicle while the driver possesses alcohol, unless the alcohol is manifested and transported as part of a shipment; (3) performing safety -sensitive functions within four hours after using alcohol; (4) consuming alcohol within the eight hours following an accident or before a post- accident alcohol test is performed (whichever is sooner) if the accident would require a post -accident alcohol test as specified in this Policy; (5) refusing to submit to post -accident, random, reasonable suspicion, or follow-up alcohol tests; and (6) performing safety -sensitive functions while having an alcohol concentration of 0.02 or greater. It tO_ Y` A Convictions An employee who isconvicted or a druglaw oralcohol violation must noti Company's Human Resources Manager no later than five:calendar days after the comic conviction means afinding of`guilty (`mctuding a plea of nolo confedere) or impositionxof sentence,, or harged with the responsibility_.to determineviolation ofthe Federal or State ©lornbia)•criminal drug/a`lcohol,statutes .The term."criminal'drug statue" both, by any�udicial (including the DWre means a criminal star controlled e involving.rnanufae ure, distribution, dispensation,, use, or possession of any sustance= B. Prescription and Over -the -Counter drug use. Whenever an employee is legally prescribed drugs or directed by a physician to use over-the-counter drugs, it is the employee's responsibility to ask the prescriber whether the drug or medicine, it taken as prescribed or directed, is likely to affect the employee's work performance in such a way that it would jeopardize safety, or substantially reduce the employee's effectiveness, if so, the employee is obligated to report that fact to the Company's Human resources Manager. Additionally, if an employee is legally using an over-the-counter drug whose labeling indicates that its use is likely to affect the employee's work performance in such a way that it would jeopardize safety, or substantially reduce the employee's work effectiveness, the employee is obligated to report that fact to the Company's Human Resources Manager. When required to report, an employee is not required or asked to report his or her medical condition or the drugs uses; the employee should merely report that he or she is using medication that is likely to affect work performance in such a way that it would jeopardize safety, or substantially reduce effectiveness. The Company will then determine whether the employee may continue to work during the course of treatment and may seek a second opinion or require the employee to be examined by a physician of the Company's choice. The Company may rely on the second opinion rather than that of the employee's physician. 5 (2) Breath. If an employee is unable to provide a breath sample for an alcohol test, then the Company shall direct the employee to obtain an evaluation as soon as possible from a licensed physician who is acceptable to the Company concerning the employee's medical ability to provide an adequate amount of breath. The physician shall provide the Company with a written statement of his determination and its basis. If the physician is unable to make this determination, then the employee's failure to provide an adequate breath sample shall be regarded as a refusal to test. 7. Confidentiality of Drug Test Results. All drug and alcohol test results will be reported to the Human Resources Manager or designee. All records regarding whether and when a drug test and/or was conducted and the results are confidential. They shall be maintained in secured files under the control of the Human Resources Manager. The test results will not be included in personnel files. An individual's drug/alcohol testing information and results will only be disclosed: (a) on a need to know basis, including, but not limited to the MRO, the company President the Safety Manager and Human Resources Manager: (b) with an individual's written authorization: (c) to the decision maker in a legal action initiated by or on behalf of the employee or placed at issue by the employee in any legal, administrative or other proceeding; or (d) as otherwise required by federal, state, or local law. An employee shall have the right to see the results of his/her own test results. Non-specific statistical data related to drug and/or alcohol testing and rehabilitation and training records may be released to any governmental agency upon request. scrpline f+ solations In accordance with DOT regulations, no DOT covered employee shall perform safety -sensitive functions, including driving a commercial motor vehicle, if the DOT covered employee has engaged in conduct prohibited by this Policy. Note: In addition, any DOT covered employee who is found to have an alcohol concentration of 0.02 or greater must immediately be removed from his or her safety -sensitive position until the start of the DOT covered employee's next regularly scheduled duty period, but not less than 24 hours following administration of the test. The other consequences imposed by the regulations do not apply; however, the Company is able to take action independent of the regulations that is otherwise consistent with the law. The Company under ifs own'independent autho #y as an employer, aaso may_take d scipl r%a`ry action against an employee, DOT and'rion DOT regulated employees, up>to and including termination fol` anyviolation of this oticy In'considenng what discipline;to impose the Company's managem nt may consider:the fol;lb'wing tactors ;the seriou tress of the violation; the Length of employee service the repetitiveness of the efnployee's violation of the'substance abuse policy`; prior work performance•; employee's retattonships'with co workers and supervisors; the employee's previous disciplinary record; r previous instances of misconduct that have been called to the employee's attention, training _and.the 13 isciI)linezma`/ nave or: econd oolation o nclu a termrnatronrof empioymen� �; termination: Ro erations Disci lorarYaction can p P.�, �s olicy°;ynfiresuitinemp oyment If the results of a drug and/or alcohol test of a job applicant are positive, he or she will not be hired and the conditional offer of employment shall be withdrawn. 9. Referral to Law Enforcement. In addition to imposing discipline, the Company may refer to the appropriate law enforcement agency, information regarding a violation of this Policy when it deems appropriate. 10. Searches. The Company may provide lockers, storage areas, equipment, vehicles, offices, desks or work stations for use by employees during work hours. All such items are considered to be company property, even while an employee is using them. The Company reserves the right to search any Company property, at any time, with or without notice or cause, including the aforementioned items. Inspections of Company property will be conducted by management and/or the Human Resources Manager. 14 EXHIBIT B Employee Handbook January 2010 If anyone believes that he or she has been suto discrimination in violation of this policyor have questions about the administration of this policy, the employee should immediately contact a Company Owner or HR Manager or file a grievance. STANDARDS OF CONDUCT It is the policy of R..F. Fager, Co. to treat all employee performance and discipline problems in a fair and consistent manner. in all but the most serious cases, each employee will be advised of the incorrect behavior, and given an opportunity to correct the problem. This system is the only method used by R.F. Fager, Co. for the purpose of employee discipline. This provision does not constitute a contractual undertaking. Prior to beginning "formal" progressive discipline, it is generally our practice to offer coaching and counseling to the employee. This is up to the discretion of Department Heads and Company Owners and is used in situations where the issue needs to be corrected. Consistent with our philosophy that any discipline, with limited exception, is intended to be corrective in nature, R.F. Fager, Co. will generally use a four (4) step process. These steps are: Verbal Warning Written Warning Final Written Warning Termination (*Suspension can also be used depending upon the circumstances of the situation, at the sole discretion of Company Owners.) In some circumstancesdue to the seriousness of the' infraction, it may be appropriate to skip a step or proceed directly to a Final Written Warning or Suspension, and possibly to immediate termination which is the sole determination of Company Owners. The following categoriesdehnethemakoritvof discipline situations. • Failure to. perform job reQuirements: This category is for situations w.here the individual is unable to perform the accountabilities of the position at an acceptable level, with or without reasonable accommodation. In some cases, the individual may be making an appropriate effort 21 and not have the ability. In other cases attitude, behaviors, and/or effect may be the cause. • Failure to follow rules, olicies,directions, etc: This category is for nfractions that involvedhe violation of w.orkrules; attendance; safety guidelines, policies; Federal, State, and Local laws; or specific direction/instructions from a manager. Flagrant violations: This category includes acts of theft; physical abuse; verbal abuse destruction of propertyinappropriate behavior towards a customer; drug, alcohol, or firearm violations, etc. Normally progressive discipline is followed for like offenses. However, a Final Written Warning may follow a Written warning for issues in the same "category" even if they are not the same specific infraction. Written Warnings An employee who refuses or who is unable to correct unsatisfactory performance or conduct after a reasonable period will receive a written warning, in accordance with the Progressive Discipline Policy. This written warning will refer to previous coaching and counseling sessions, if any. The warnings will be very specific as to the incorrect behavior and spell out further consequences if the behavior is not corrected. In Written Warning and Termination situations, supportive documentation will be included where appropriate. If a time limit for corrective action has been setthis will be indicated. The form will be reviewed and signed by the employee. If the employee refuses to sign it, the Supervisor, Company Owner, or Human Resources Manager will make a notification as appropriate that the notice was read to the employee who refused to sign it. A copy of this form will be retained in the employee's personnel fi|e. Suspension Company Owners have the authority to suspend employees for serious violations, or as part of the progressive discipline policy dependent upon the circumstances. Suspension of an employee (the temporary removal of an employee from work) is used by management to communicate the seriousness of the EXHIBIT C R. F. FAGER CO. 2058 STATE RD. CAMP HILL PA 17011 717-761-0660 Fax 717-761-6428 CUSTOMER DARWIN BROSIUS 1200 ROSSMOYNE DRIVE MECHANICSBURG, PA 17055 Statement REMIT TO: R. F. FAGER CO. 2058 STATE RD. CAMP HILL PA 17011 717-761-0660 STATEMENT DATE CUST NO. 07/31/14 1778 PAGE NO. 1 of 7 DATE INVOICE NUMBER PURCHASE ORDER NUMBER INVOICE AMOUNT PAYMENTS/CREDITS NET DUE 01/05/12 S1775972.001 DUNCANON 44.58 01/14/12 S1782140.001 marysville 1,188.29 01/19/12 S1785734.001 marysville job 205.47 01/26/12 S1782152.001 marysville job 96.58 01/26/12 S1789841.001 marysville 3.70 0.1/30./12.5178.9383.001 1,453.12 01/30/12 51792229.001 MARYSVILLE 1,975.10 02/02/12 51794951.001 marysville 33.81 02/02/12 S1794969.001 66.54 02/13/12 S1801466.001 TOOL 127.04. 02/15/12 S1803343.001 MARYSVILLE 989.08. 02/17/12 51804749.001 MARYSVILLE 25.91 02/22/12 S1807496.001 112.01 02/23/12 S1808753.001. 2.22 02/27/12 51810497.001 61.65 02/28/12 S1808751.001 5,37 02/28/12 S1811195.001 DARVE 146.79 02/29/12 S1812074.001 164.71 02/29/12 S1812218.001 215.12 03/02/12 S1814358.001 DARV TRUCK STOCK 21.62 03/05/12 S1815060.001 97.95 03/06/12 S1816083.001 386.82 03/06/12 S1816100.001 20.67. 03/08/12 S1817932.001 PERSONAL 9.82 03/08/12 S1817965.00.1 return -201.23 03/09/12 S1818574.001 PERSONAL 293.37 03/22/12 S1827090.001 marysville 286.34 03/22/12 S1827186.001 36.06 03/26/12 51828678.001 MARYSVILLE 85.90 03/26/12 51829151.001 MARYSVILLE 63.02 PREV BALANCE PAYMENTS CREDITS PURCHASES SERVICE CHARGE NEW BALANCE FUTURE CURRENT 31-60 DAYS 61-90 DAYS OVER 90 DAYS R. F. FAGER CO. 2058 STATE R.D. CAMP HILL PA 17011 717-761-0660 Fax 717-761-6428 CUSTOMER DARWIN BROSIUS 1200 ROSSMOYNE DRIVE MECHANICSBURG, PA 17055 Statement REMIT TO: R. F. FAGER CO. 2058 STATE RD. CAMP HILL PA 17011 717-761-0660 STATEMENT DATE CUST NO. 07/31/14 1778 PAGE NO. 2 of 7 DATE INVOICE NUMBER PURCHASE ORDER NUMBER INVOICE AMOUNT PAYMENTS/CREDITS NET DUE 03/3'0/12 S1832586.001 45.54 04/02/12 51803343.002 MARYSVILLE 24.94 04/03./12 S1834789.001 return -92.85 04/05/12 S1836225.001 MARYSVILL 181.77 04/05/12 5.1836247.001 MARYSVILL 46.85 04/06/12 51836994.001 PICK-UP 46.30 04/09/12 S1838309.001 5.96 04/10/12 S1838969.001 387.84 04/12/12 S1840719.001 333.23 04/16/12 S1842176.001 70.39 04/17/12 S1842810.001 DUNCANNON 25.44 04/18/12 S1843946.001 ED COOMBS 232.11 04/20/12 S1845897.001 34,07, 04/24/12 51847699.001 APARTMENTS 280.94 04/25/12 S1848142.001 42.44 04/25/12 51848754.001 133.46. 04/26/12 S1849411.001 22.67 04/27/12 S1816162.001 -20.67 04/30/12 5185.1627.001 MARYSVILLE 23.29 05/02/12 S1853365.001 RIVER HOUSE 36.72 05/03/12 S1851558.001 203.15 05/07/12 S1856134.001 29.46 05/07/12 51856147.001 DUNCANNON 73.47 05/07/12 S1856288.001 11.12' 05/07/12 S1856604.001 VERBAL DARV 23.48 05/07/12 81856613.001 VERBAL DARV 10.53 05/14/12 51860227.001 DARV PER 27.40 05/14/12 S1860228.001 DARV -27.40 05/14/12 51860231,001 DUNCANNON 15.80 05/14/12 51860239.001 RETURN -12.25 PREV BALANCE PAYMENTS CREDITS PURCHASES SERVICE CHARGE NEW BALANCE FUTURE CURRENT 31-60 DAYS 61.90 DAYS OVER 90 DAYS R. F. FAGER CO. 2058 STATE RD. CAMP HILL PA 17011 717-761-0660 Fax 717-761-6428 CUSTOMER DARWIN BROSIUS 1200 ROSSMOYNE DRIVE MECHANICSBURG, PA 17055 Statement REMIT TO: R. F. EAGER CO. 2058 STATE RD. CAMP HILL PA 17011 717-761-0660 STATEMENT DATE CUST NO. 07/31/14 1778 PAGE NO. 3 of 7 DATE INVOICE NUMBER PURCHASE ORDER NUMBER INVOICE AMOUNT PAYMENTS/CREDITS NET DUE 05/14/12 S1860804.001 DARV 143.68 05/18/12 S1863943.001 52.37 05/22/12 51865382,001 DUNCANNON 30.64 05/22/12 S1866066.001 23.15 05/24/12 S1862346.001 DUNCANNON 35.20 05/25/12 51868406.001 RIVER 46.04 06/12/12 S1878173.001 DOLORES 898.77 06/12/12 S1879121.001 CJ'S -- APTS. 11.67 06/12/12 S1879514.001 14.56 06/12/12 S1879527.001 DELOURIS 669.23 06/15/12 S1881784.001 erick 42.68 06/22/12 S1886478.001 eric job 55.55 06/26/12 51888414.001 DUNCANNON 958.00 06/27./12.S1889212.001 ERIC 78.12 06/28/12 S1876519,001 35.63 07/02/12 51892093.001 DUNCANNON 100.71 07/09/12 S1891348.001 -35.63 07/11/12 S1897901.001 DUNCANNON 32.79 07/17/12 51901783.001 STOCK 185.40 07/17/12 S1901922.001 STOCK 28.14 07/17/12 S1902245.0.01 24.39 07/18/12 S1902698.001 D/W 1.62 07/20/12 S1904780.001 HOUSE 41.05 07/25/12 S1907814.001 5.59 07/26/12 51908617.001 DARVE BROSIUS 15.12 07/30/12 S1903445.001 WELL PUMP 2,036.12 07/30/12 5.1910236.001 92.64 07/31/12 S1911000.001 LOU 40.10 07/31/12 S1911485.001 8.89 08/01/12 S1912234.001 DARVE 12.34 PREV BALANCE PAYMENTS CREDITS PURCHASES SERVICE CHARGE NEW BALANCE FUTURE CURRENT 31-60 DAYS 61-90 DAYS OVER 90 DAYS R. F. FAGER CO. 2058 STATE RD. CAMP HILL PA 17011 717-761-0660 Fax 717-761-6428 CUSTOMER DARWIN BROSIUS 1200 ROSSMOYNE DRIVE MECHANICSBURG, PA 17055 Statement REMIT TO: R. F. FAGER CO. 2058 STATE RD. CAMP HILL PA 17011 717-761-0660 STATEMENT DATE CUST NO. 1 07/31/14 1778 PAGE NO. 4 of 7 DATE INVOICE NUMBER PURCHASE ORDER NUMBER INVOICE AMOUNT PAYMENTS/CREDITS NET DUE 08/03/12 51914158.001 DARV 14.83 08/06/12 51914654.001 ERIC 48.51 08/07/12 51915280.001 LAU 1,204.22 08/08/12 51916847.001 4.58 08/09/12 51917686.001 HEAT PUMP 52.88. 08/11/12 S1918983.001 13.78 08/14/12 S1920178.001 river/NIKKI 121.91 08/15/12 S1921337.001 BOAT 38.36 08/17/12 S1922907.001 240.08 08/20/12 S1921941.001 MIKE LAU 930.64 08/22/12 S1925388.001 duncannon 8.09 08/23/12 51926928.001 65.55 08/24/12 S1927374.001 DUNCANNON 328.31 08/24/12 S1927515.001 78.97 08/29/12 S1930543.001 2100 rossmoyne 58.86 08/30/12 51931504.001 19.77 09/06/12 S1935430.001 DARVS HOUSE 45.64 09/20/12 S1944602.001 TOOLS 147.26 09/2.0/12 S1944626.001 HOUSE 14.85 09/21/12 S1630472.002 DARVES HOUSE 501.35 09/24/12 S1946845.001 LAU 34.77 09/27/12 51949726.001 DENNIS 27.17 09/27/12 S1949766.001 1200 ROSSMOYNE 15.92 09/28/12 51950253..001 16.19 10/03/12 S1953888.001 31.64 10/10/12 51959037.001 DUNACNNON 112.15 10/10/12 S1959097.001 66.64 10/12/12 51960375..001 DARVE 11.49 10/19/12 S1965526.001 94.21 10/19/12 S1965870.001 DUNCANNON 55.55 PREY BALANCE PAYMENTS CREDITS PURCHASES SERVICE CHARGE NEW BALANCE FUTURE CURRENT 31.60 DAYS 61.90 DAYS OVER 90 DAYS. R. F. FAGER CO. 2058 STATE RD. CAMP HILL PA 17011 717-761-0660 Fax 717-761-6428 CUSTOMER DARWIN BROSIUS 1200 ROSSMOYNE DRIVE MECHANICSBURG, PA 17055 Statement REMIT TO: R. F. FAGER CO. 2058 STATE RD. CAMP HILL PA 17011 717-761-0660 STATEMENT DATE COST NO. 0 7/3 1/ 14 ' 1778 NET DUE PAGE NO. S1970681.001 5 of 7 DATE INVOICE NUMBER PURCHASE ORDER NUMBER INVOICE AMOUNT PAYMENTS/CREDITS NET DUE 10/26/12 S1970681.001 DUNCANNON 140.78 10/29/12 S1972237.001 440 8.65 11/16/12 31957934.001 63.01 11/23/12 S1990330.001 JULIUS 24.93 11/26/12 51957934.002 18.13 12/03/12 51996070.001 DUNCANNON 36.50 12/04/12 S1997303.001 163.72 12/12/12 S2003115.001 11.80 01/14/13 S2022047.001 APARTMENTS 29.29 01/14/13 S2022277.001 5.84 01/14/13 S2022565.001 5.84 01/23/13 32028732.001 DUNCANNON 50.89 01/24/13 S2030193.001 HOTSHOT 11.26 01/25/13 32030622.001 DUNCANON 21.34 01/26/13 52031217.001 MARYSVILLE 9.12 01/28/13 S2030599,001 275.60 01/30/13 52033999.001 156.07 02/13/13 S2043756.001 DUNCANNON 108.45 02/14/13 S2044573.001 10.21 02/20/13 S2048295.001 63.50 02/22/13 52050410,001 PERSONAL 27.98 02/25/13 S2051213.001 179.15 02/28/13 S2054346.001 130.51 03/01/13 S2054648,001 wilson job 211.83 03/11/13 52055516.001 152.25 04/02/13 S2076736.001 river house 252-.23 04/11/13 S2083439.001 30.53 04/11/13 52083506,001 JOHN 75.49 04/25/13 S2091682.001 duncanon 513.88 04/25/13 S2093210.001 6.28 PREV BALANCE PAYMENTS CREDITS PURCHASES SERVICE CHARGE NEW BALANCE FUTURE CURRENT 31-60 DAYS 61-90 DAYS OVER 90 DAYS R. F. FAGER CO. 2058 STATE RD. CAMP HILL PA 17011 717-761-0660 Fax 717-761-6428 CUSTOMER DARWIN BROSIUS 1200 ROSSMOYNE DRIVE M.ECHANICSBURG, PA 17055 Statement REMIT TO: R. F. FAGER CO. 2058 STATE RD. CAMP HILL PA 17011 717-761-0660 STATEMENT DATE CUST NO. 07/31/14 1778 PAGE NO. 6 of 7 DATE INVOICE NUMBER PURCHASE ORDER NUMBER INVOICE AMOUNT PAYMENTS/CREDITS NET DUE 04/29/13 52094917.001 RIVER HOUSE 470.16 04/30/13 S2095730.001 RIVER HOUSE 33.70 05/02/13 S2098000.001 RIVER 196.55 05/02/13 S2098286.001 RIVER 93.74 05/13/13 52104609.001 RIVER LOT 159.38 05/14/13 52105493.001 RIVER 57.12 05/14/13 S2105926.001 PARTS 12.16 05/20/13 52107443.001 TANK 153.33 05/22/13 S2111182.001 618.28 05/23/13 S2112396.001 72.38 05/24/13 S2113378.001 TOOLS 62.89 05/31/13 S2117481.001 303.75 05/31/13 S2117633.001 TRUCK STOCK 1,057.25 05/31/13 S2117769.001 APTS 25.59 06/03/13 S2113468.001 11.72 06/03/13 S2117745.001 DARWIN 26.75 06/04/13 S2120468.001 PARTS 45.07 06/05/13 S2121657.001 14.68 06/06/13 S2122074.001 PARTS 3.90 06/07/13 S2122970.001 19.89 06/10/13 S2124187.001 26.75 06/13/13 S2127234.001 5.96 06/27/13 S2137082.001 STOCK 420.09 06/27/13 52137090.001 STOCK 6.00 07/01/13 S2139196.001 8.94 07/02/13 S2140162.001 73.32 07/10/13 52145272.001 33.20 07/12/13 S2146843.001 25.75 07/19/13 S2151704.001 70.03 07/22/13.52141775.001 FRYER GAS VALVE 195.42 PREV BALANCE PAYMENTS CREDITS PURCHASES SERVICE CHARGE NEW BALANCE FUTURE CURRENT 31-60 DAYS 61-90 DAYS OVER 90 DAYS R. F. EAGER CO. 2058 STATE RD. CAMP HILL PA 17011 717-761-0660 Fax 717-761-6428 CUSTOMER DARWIN BROSIUS 1200 ROSSMOYNE DRIVE MECHANICSBURG, PA 17055 Statement REMIT TO: R. F. FACER CO. 2058 STATE RD. CAMP HILL PA 17011 717-761-0660 STATEMENT DATE CUST NO. 07/31/14 1778 PAGE NO. 7 of 7 DATE INVOICE NUMBER PURCHASE ORDER NUMBER INVOICE AMOUNT PAYMENTS/CREDITS NET DUE 07/22/13 S2153156.001 HOUSE 0.00 21.66 07/24/13 S2154920.001 0.00 27,633.48 6.00 07/27/13 S2157373.001 falls hotel 173.21 08/01/13 S2159012.001 TOOLS 5.09 09/06/13 S2185718..001 darv,s house 7.35. PREV BALANCE PAYMENTS CURRENT CREDITS 31-60 DAYS PURCHASES SERVICE CHARGE NEW BALANCE 27,633.48 0.00 0.00 0.00 0.00 0.00 27,633.48 FUTURE CURRENT 31-60 DAYS 61-90 DAYS OVER 90 DAYS 0.00 0.00 0.00 0.00 27,633.48 All past due balances, subject to FINANCE CHARGES of 1.50% per month. VERIFICATION I, Richard Fager, Jr., being authorized to do so, hereby verify that the facts set forth in the foregoing Amended Complaint are true and correct to the best of my knowledge, information and belief. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S.A. §4904 relating to unsworn falsification to authorities. Dated: In/4- o it Richard Fager, Jr. CERTIFICATE OF SERVICE I hereby certify that on this date a true and correct copy of the foregoing Amended Complaint is being served by first class mail, postage prepaid at Lemoyne, Pennsylvania, addressed as follows: Date: August , 2014 William R. Balaban, Esquire William Balaban & Associates, LLC Governors' Row 27 North Front Street Harrisburg, PA 17101-1606 BARLEY SNYDER Paul , Minnich 100 East Market Street York, PA 17401 717-846-8888 Fax: 717-843-8492 pminnich@barley.com PA 74453 John A. Feichtel Saidis, Sullivan & Rogers 635 North 12th Street Suite 400 Lemoyne, PA 17043 717-612-5803 Fax: 717-612-5805 jfeichtel@ssr-attorneys.com PA 77426 Attorneys for Defendants Ronny R Anderson Sheriff Jody S Smith Chief Deputy Richard W Stewart Solicitor SHERIFF'S OFFICE OF CUMBERLAND COUNTY OF THE PROTHONO TAi`i 2014 AUG €4 PM 3:05 CUMBERLAND COUNTY PENNSYLVANIA ov 01 (uul?6eprjrfb OFFICE OF THE SHERIFF R.F. Fager Company vs. Darwin K. Brosius Case Number 2014-4037 SHERIFF'S RETURN OF SERVICE 07/09/2014 Sheriff Ronny R Anderson, being duly sworn according to law, states he made diligent search and inquiry for the within named Defendant to wit: Darwin K. Brosius, but was unable to locate the Defendant in the Sheriffs bailiwick. The Sheriff therefore deputizes the Sheriff of York, Pennsylvania to serve the within Complaint & Notice according to law. 07/14/2014 08:27 AM - The requested Complaint & Notice served by the Sheriff of York County upon Darwin K. Brosius, personally, at 62 Landvale Road, Lot 8, York Haven, PA 17370. Richard Keuerleber, Sheriff, Return of Service attached to and made part of the within record. SHERIFF COST: $37.49 SO ANSWERS, August 12, 2014 RONNY R ANDERSON, SHERIFF (c) CountySuite Sheriff, Toleosoff. Inc. Richard P Keuerleber Sheriff Michael S. Hose Chief Deputy, Operations SHERIFF'S OFFICE OF YORK COUNTY PETER J. MANGAN, ESQ. Solicitor Richard E Rice, II Chief Deputy, Administration R. F. FAGER COMPANY vs. Case Number DARWIN K. BROSIUS 14-4037 CIVIL SHERIFF'S RETURN OF SERVICE 07/14/2014 08:27 AM - DEPUTY TODD STAHL, BEING DULY SWORN ACCORDING TO LAW, SERVED THE REQUESTED COMPLAINT & NOTICE BY "PERSONALLY" HANDING A TRUE COPY TO A PERSON REPRESENTING THEMSELVES TO BE THE DEFENDANT, TO WIT: DARWIN K. BROSIUS AT 62 LANDVALE ROAD, LOT 8, YORK HAVEN, PA 17370. SHERIFF COST: $34.76 \\\\1:A1/4.O�D STA L, DEPUTY WERS, August 06, 2014 ' !CHARD P KEUERL BER, SHERIFF COMMONWEALTH CF .PENNSYLVANIA ;; tarial Sea` Lisd L.: i norpe, ,Notary, Fubltc City of Yotk, York County My Commissibn Expires :pug. 12, 2017 MEMBER,.PEMNSYCV,-.41, AScCC14Ti._,,, r;; NOTARIES Affirmed and subscribed to before me this 6TH day of AUGUST NOTARY 2014 (c) CountySuite Sheriff. Teleosoft, Inc. WILLIAM BALABAN & ASSOCIATES, LLC By: William R. Balaban, Esquire (PA ID #19667) WBalaban(a,BalabanAndAssociates.com Matthew D. Coble, Esquire (PA ID #89603) MCob1e(a BalabanAndAssociates.com Governors' Row 27 North Front Street Harrisburg, PA 17101 Telephone: (717) 695-2901 Telecopy: (717) 695-7914 Attorneys for Defendant, Darwin K. Brosius R.F. FAGER COMPANY, vs. DARWIN K. BROSIUS, 'FILED -OFFICE OF THE PROTHONOTARY AUG 22 PM 12: 23 CUMBERLAND COUNTY PENNSYLVI-i,NI : IN THE COURT OF COMMON PLEAS Plaintiff, : OF CUMBERLAND COUNTY, : PENNSYLVANIA : No. 14-4037 CIVIL : Declaratory Judgment Defendant. : DARWIN K. BROSIUS' PRELIMINARY OBJECTIONS TO PLAINTIFF'S AMENDED DECLARATORY JUDGMENT COMPLAINT Defendant, Darwin K. Brosius ("Mr. Brosius"), preliminarily objects to the Amended Declaratory Judgment Complaint filed by the Plaintiff, R.F. Fager Company ("Company"), as follows: FACTUAL BACKGROUND 1. Mr. Brosius is a long-time shareholder of the Company; and at various times in the past has also served as an officer, director and employee of the Company; indeed, Plaintiff's father, Mr. Delroy D. Brosius (deceased), originally founded the Company with Richard F. Fager (deceased), in the 1960s. 2. Mr. Brosius and the Company are parties to a Shareholders' Agreement dated May 19, 2004 (the "Shareholders' Agreement"). 3. Mr. Brosius received a Federal Express letter package dated September 18, 2013 terminating his employment effective immediately due to his "continued unavailability" for work. 4. On October 30, 2013, Mr. Brosius, by and through his undersigned attorneys, and in accordance with Section 1508 of the Pennsylvania Business Corporation Law (15 Pa.C.S. § 1508), made a written request on the Company to produce for inspection and examination its corporate books and records in order to determine: (a) whether the corporation was being properly managed, (b) the manner in which the corporation's finances have been managed; (c) the manner in which the business and affairs of the corporation have been conducted; (d) the value of the corporation's assets; (e) the value of his interest in the corporation, and f) the identity and extent of the other shareholders' interests in the corporation. 4. Mr. Brosius thereafter commenced an action in the Court of Common Pleas of Dauphin County, Pennsylvania on November 7, 2013 to compel the Statutory Inspection and Examination of the Corporate Books and Records of the R.F. Fager Company (Dauphin County Docket No. 2013 -CV -9745 -MP) ("Dauphin County Lawsuit No. 1"). 5. That same day, a Rule was issued on the Company to show cause why an order directing the inspection and examination sought should not be granted, and then, without any intervention by the Dauphin County Court of Common Pleas, Mr. Brosius and the Company made acceptable arrangements for the inspection of the books and records of the Company to take place. 6. Thereafter, on November 15, 2013, Mr. Brosius through his counsel informed the Dauphin County Court of Common Pleas that the Company intended to comply with Mr. 2 Brosius' October 30, 2013 request for inspection and examination of the Company's books and records, and in light of the Company's compliance with the request, Mr. Brosius' counsel requested and the Court did issue an Order dated November 15, 2013 discharging its November 7, 2013 Rule to Show Cause, and retaining jurisdiction over the case. 7. On November 20 and 21, 2013, Mr. Brosius through his counsel and agents undertook an inspection and examination of the corporate books 'and records of the Company that were made available. 8. During the course of his books and records inspection, serial acts of minority shareholder oppression, self-dealing and breaches of fiduciary duty by the 2 majority shareholders of the Company, Richard Fulton Fager, Jr and Bryce F. Fager, were revealed. 9. It also was revealed during the course of the inspection and examination that certain records, including those pertaining to certain acts of self-dealing by the majority shareholders, Richard Fulton Fager, Jr and Bryce F. Fager, had been "destroyed". 10. On November 29, 2013, the Company exercised its option to purchase all of the shares (673.33) of the Company owned by Mr. Brosius pursuant to the Shareholders' Agreement. 11. On December 5, 2013, the Company provided Mr. Brosius with a copy .of a valuation performed McKonly & Asbury, LLP, as of August 31, 2013, and insisted that it wanted to close on its purchase of the stock prior to year-end. 12. Mr. Brosius promptly informed the Company that there would be no closing until he had completed his evaluation and response to the McKonly & Asbury, LLP valuation, and the issues contained in his response were completely resolved. 13. On Monday, December 23, 2013 at 5:19 PM (one business day before Christmas Day), the Company's counsel e-mailed Mr. Brosius' counsel notifying him that the purchase of 3 and a closing on the Company's shares owned by Mr. Brosius would take place on Thursday, December 26, 2013 at 2:00 PM (one day after Christmas Day). 14. The Company also informed Mr. Brosius at that time that unless he attended the unilaterally scheduled closing and surrendered his shares, the Company would "cancel" all of his shares on the books of the Company with the purported purchase price ($2,184,908.72) to be held in escrow. 15. The next day, December 24, 2013, Mr. Brosius provided the Company's counsel with his evaluation and substantive objections to the December 5, 2013 McKonly & Asbury, LLP valuation as of August 31, 2013. 16. On the morning of December 26, 2013, Mr. Brosius' counsel informed the Company of his intention to file an Emergency Motion with the Dauphin County Court seeking to stop the Company's unilateral cancellation of his shares. 17. The Company's counsel informed Mr. Brosius' counsel shortly thereafter that the closing and the cancellation of his shares would proceed as scheduled on Thursday, December 26, 2013 at 2:00 PM, unless otherwise ordered by the Dauphin County Court of Common Pleas, notwithstanding Mr. Brosius' objections. 18. Given the exigencies associated with the Company's imminent, unilateral disposition and cancellation of the Mr. Brosius' shares, he sought and obtained emergency relief from the Dauphin County Court of Common Pleas (Dauphin County Lawsuit No. 1) prior to the scheduled Thursday, December 26, 2013, 2:00 PM closing. 19. By Order dated December 27, 2013, the Court in Dauphin County Lawsuit No. 1 set the matter for a hearing on January 7, 2014 and directed that the Company take no action with respect to the Company shares owned by the Mr. Brosius; otherwise his shares of the 4 Company would have been gone and under the control of the majority shareholders, Richard Fulton Fager, Jr. and Bryce F. Fager. 20. Had it been permitted to move forward and carry out its plan, the majority shareholders, Richard Fulton Fager, Jr. and Bryce F. Fager, may well have succeeded in unilaterally stripping Mr. Brosius of his property and ownership interests in the Company stock at a value that is far less than the stock is actually worth under the circumstances, and without due consideration to the minority shareholder oppression, majority shareholders' self-dealing and breaches of fiduciary duty uncovered by Mr. Brosius. 21. Since that time, Mr. Brosius and the majority shareholders have been engaged in settlement discussions; at the request of the parties, the Dauphin County Court has continued the hearing in the pending Dauphin County Lawsuit No. 1 numerous times; a hearing is scheduled to take place on September 5, 2014. See Exhibit "A", August 4, 2014 Order of Court, attached. 22. During the course of the parties' settlement discussions and at the request of counsel for the majority shareholders and the Company, Mr. Brosius' counsel, on May 6, 2014, shared with the Company's attorneys a lengthy draft Complaint his counsel had prepared against the majority shareholders, Richard Fulton Fager and Bryce F. Fager individually, as well as the Company. See Exhibit "B", May 6, 2014 e-mail by and between counsel for the parties, attached. 23. The draft Complaint clearly indicated Mr. Brosius' intended forum (the Dauphin County Court of Common Pleas), as well as all of the defendants (Richard Fulton Fager, Jr., Bryce F. Fager and the Company), and the various detailed claims against them. Id. 5 24. Counsel for Richard Fulton Fager, Jr., Bryce F. Fager and the Company had previously expressed his belief that receiving a copy of the draft Dauphin County Complaint might facilitate settlement discussions between the parties (see Exhibit "B"). 25. Settlement negotiations continued until very recently, when to his surprise and disappointment, Mr. Brosius was served the morning of Monday, July 14, 2014 with the Declaratory Judgment Complaint filed by the Company in this Court. 26. Neither the majority shareholders, the Company nor its counsel ever gave any indication of any intention to file this suit; in fact, at the time the suit was filed, Mr. Brosius and his counsel were engaged in what they believed at the time was a good faith attempt to resolve the disputes between the parties. 27. Indeed, Richard Fulton Fager, Jr. Bryce F. Fager and the Company provided Mr. Brosius until the close of business on Friday, July 11, 2014 to respond to various settlement offers made by them; and did in fact call Mr. Brosius' counsel mid-afternoon on Friday, July 11, 2014 to ascertain the status of the current settlement proposals. 28. While Mr. Brosius believed that the parties were continuing with good -faith negotiations, the majority shareholders and the Company had actually filed their Declaratory Judgment Complaint several days earlier. 29. Mr. Brosius had agreed as requested by the Company not to file the Dauphin County Complaint he had prepared and provided to Richard Fulton Fager, Jr., Bryce F. Fager and to the Company weeks earlier so that further settlement discussions could be explored, in good faith. 30. Mr. Brosius quickly learned upon being served on July 14, 2014 with the Declaratory Judgment Complaint in this Court that the Company had no intention of further 6 pursuing settlement discussions in good faith, and instead was more concerned with commencing its own lawsuit against Mr. Brosius without his knowledge, and on its own terms. 31. In reality, while the Company and its majority shareholders were purporting to engage in settlement discussions with Mr. Brosius, they were plotting to take unfair advantage of Mr. Brosius' agreement to hold off on filing his Dauphin County Complaint against the majority shareholders and the Company by racing to this Courthouse on July 9, 2014 to file their. Declaratory Judgment Complaint (all the while knowing that Mr. Brosius is represented by counsel; but nonetheless did not serve him until several days later, on July 14, 2014). 32. In its original and Amended Declaratory Judgment Complaints, the Company sets forth, chapter and verse, what it perceives as its defenses to each of the claims Mr. Brosius detailed against Richard Fulton Fager, Jr., Bryce F. Fager and the Company in the draft Complaint he shared with them on May 6, 2014. 33. Mr. Brosius filed his Dauphin County Complaint (Case No. 2014 -CV -6283 -CV) against the majority shareholders, Richard Fulton Fager, Jr. and Bryce F. Fager, and the Company ("Dauphin County Lawsuit No. 2") on Monday, July 14, 2014 and immediately served copies on counsel for Richard Fulton Fager, Jr. and Bryce F. Fager, and the Company. 34. On July 18, 2014, Mr. Brosius filed preliminary objections to this Declaratory Judgment Complaint, including on the basis that the Declaratory Judgment Complaint was merely an inappropriate attempt to preempt Mr. Brosius' claims in his chosen forum against the majority shareholders, Richard Fulton Fager, Jr. and Bryce F. Fager, and the Company. 35. In response to Mr. Brosius' preliminary objections, the Company filed an Amended Declaratory Judgment Complaint on August 6, 2014. 7 36. The only differences between the original Declaratory Judgment Complaint and the Amended Declaratory Judgment Complaint are that one of the eight declarations sought is removed (with respect to the purchase of Mr. Brosius' stock), and a claim for unjust enrichment is added as a new claim. 37. For several reasons, the Amended Declaratory Judgment Complaint filed by the Company against Mr. Brosius must be dismissed because the Amended Declaratory Judgment Complaint, just like the initial Declaratory Judgment Complaint filed by the Company, suffers from various substantive and incurable flaws. FIRST PRELIMINARY OBJECTION Pa. R. C. P. 1028(a)(4) Demurrer 38. Mr. Brosius incorporates by reference the preceding paragraphs as if set forth in full. 39. Pennsylvania Rule of Civil Procedure 1028(a)(4) supports a preliminary objection where a complaint is legally insufficient. Pa. R.C.P. 1028(a)(4). 40. As noted, Dauphin County Lawsuit No. 1 has been pending since November 2013 and is scheduled for a hearing next month. Additionally, the Dauphin County Court of Common has issued a total of 11 Orders in that case. 41. Moreover, Richard Fulton Fager, Jr., Bryce F. Fager, the Company and their counsel were fully aware of the contents of the Complaint that Mr. Brosius had prepared against them when they chose to abruptly file this declaratory judgment lawsuit during ongoing settlement discussions, seeking declarations with respect to each and every item identified in Mr. Brosius' draft Complaint. 8 42. The majority shareholders and the Company were fully aware of the parties Mr. Brosius intended to sue, the claims against them, and most importantly for the purpose of these preliminary objections, Mr. Brosius' choice of forum, the Dauphin County Court of Common Pleas, where litigation was initially instituted and has been ongoing on since November 2013. 43. Under the circumstances, the filing of this declaratory judgment lawsuit by the Company is not permissible or appropriate under the law of this Commonwealth, and amounts to arbitrary, vexatious and bad faith conduct, which is expressly prohibited by statute (42 Pa.C.S. § 2503(9)). 44. Under Pennsylvania law, a plaintiff cannot utilize a declaratory judgment action which amounts to a "mere tactical maneuver designed to test the validity of a defense to a future lawsuit", and to thereby usurp a plaintiff's choice of forum. Osram Sylvania Prods., Inc. v. Consump Commods, Inc., 845 A.2d 846, 848 (Pa. Super. 2004). 45. On several occasions, this very Court has sustained preliminary objections on the basis of the Osram case, and properly dismissed those actions, each of which involved tactical ploys such as the one employed by the Company here. See, e.g., Questmont Strategic Wealth Advisors, Inc. v. Hanshaw, No. 2013-6073 (Jan. 6, 2014 Order of Judges Guido, Masland and Peck); Dawn & Associates Realty, LLC v. Rankin (No. 2005-2823) (December 5, 2005 Order of Judge Hess). 46. Consequently, the Amended Declaratory Judgment Complaint is legally insufficient and must be dismissed. WHEREFORE, Mr. Brosius respectfully requests that this Preliminary Objection be sustained, that the Court dismiss the Amended Declaratory Judgment Complaint with prejudice, 9 and that the Court award such other and further relief as deemed appropriate, including an award of attorneys' fees. SECOND PRELIMINARY OBJECTION Pa. R. C. P. 1028(a)(4) Demurrer 47. Mr. Brosius incorporates by reference the preceding paragraphs as if set forth in full. 48. Pennsylvania Rule of Civil Procedure 1028(a)(4) supports a preliminary objection where a complaint is legally insufficient. Pa. R.C.P. 1028(a)(4). 49. As the Superior Court observed in the Osram case, "[a] declaratory judgment proceeding is one in equity." Osram Sylvania Prods., Inc., 845 A.2d at 849. 50. As more fully discussed above, while the Company was purporting to engage in settlement discussions with Mr. Brosius, it was plotting to take unfair advantage of Mr. Brosius' agreement to hold off on filing his Dauphin County Complaint against the majority shareholders and the Company by racing to this Courthouse on July 9, 2014 to file its Declaratory Judgment Complaint. 51. At the same time, the majority shareholders and Company knew that Mr. Brosius was represented by counsel, and yet deliberately chose not to serve undersigned counsel with a courtesy copy or otherwise with a copy of its Declaratory Judgment Complaint; instead, Mr. Brosius was served by the York County Sheriff several days later, on July 14, 2014 at his home in York County. 52. Under such circumstances, equitable relief is unavailable to the Company based on the manner in which it commenced this suit: A court may deprive a party of equitable relief where, to the detriment of the other party, the party applying for such relief is guilty of bad conduct relating to the 10 matter at issue. The doctrine of unclean hands requires that one seeking equity act fairly and without fraud or deceit as to the controversy in issue ... . Terraciano v. Pa. Dep't Transp., 753 A.2d 233, 237-238 (Pa. 2000) 53. The Company's conduct in filing this lawsuit against Brosius bars the very relief it seeks from this Court. 54. Consequently, the Amended Declaratory Judgment Complaint is legally insufficient and must be dismissed. WHEREFORE, Mr. Brosius respectfully requests that this Preliminary Objection be sustained, that the Court dismiss the Amended Declaratory Judgment Complaint with prejudice, and that the Court award such other and further relief as deemed appropriate, including an award of attorneys' fees. THIRD PRELIMINARY OBJECTION Pa. R. C. P. 1028(a)(5) Failure to Join Indispensable Parties 55. Mr. Brosius incorporates by reference the preceding paragraphs as if set forth in full. 56. Pennsylvania Rule of Civil Procedure 1028(a)(5) supports a preliminary objection for failure to join indispensable parties. Pa. R.C.P. 1028(a)(5). 57. In its Amended Declaratory Judgment Complaint, the Company is the only named plaintiff seeking declarations with respect to the claims asserted by Mr. Brosius. 58. As the Company has been aware for months, however, Mr. Brosius' claims are against the majority shareholders, Richard Fulton Fager, Jr. and Bryce F. Fager, for serial acts of minority shareholder oppression, self-dealing and breaches of fiduciary duty. 59. Clearly, the Company's original and Amended Declaratory Judgment Complaint were designed to shield Richard Fulton Fager, Jr. and Bryce F. Fager from becoming individual 11 parties to the case, so that they would not have to answer the allegations that Mr. Brosius had previously apprised them of months earlier in the draft Dauphin County Complaint that was shared with them and their counsel at their request on May 6, 2014. 60. The failure to join indispensable parties deprives a court of subject matter jurisdiction with respect to a declaratory judgment claim. Vale Chem. Co. v. Hartford Accident & Indemnity Co., 516 A.2d 684, 685 (Pa. 1986). 61. Moreover, there is a statutory requirement that all interested parties shall be joined in a declaratory judgment action: General rule. — When declaratory relief is sought all persons shall be made parties who have or claim any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceeding. 42 Pa. C.S. § 7540(a). 62. Richard Fulton Fager, Jr. and Bryce F. Fager were and are interested and indispensable parties to any lawsuit that revolves around the serial acts of minority shareholder oppression, self-dealing and breaches of fiduciary duty perpetrated by them. 63. Consequently, the Amended Declaratory Judgment Complaint is legally insufficient and must be dismissed for failure to join indispensable parties. WHEREFORE, Mr. Brosius respectfully requests that this Preliminary Objection be sustained, that the Court dismiss the Amended Declaratory Judgment Complaint with prejudice, and that the Court award such other and further relief as deemed appropriate, including an award of attorneys' fees. 12 FOURTH PRELIMINARY OBJECTION Pa. R. C. P. 1028(a)(4) Demurrer 64. Mr. Brosius incorporates by reference the preceding paragraphs as if set forth in full. 65. Pennsylvania Rule of Civil Procedure 1028(a)(4) supports a preliminary objection where a complaint is legally insufficient. Pa. R.C.P. 1028(a)(4). 66. In its Amended Declaratory Judgment Complaint, the Company purports to assert a claim for conversion of Company property against Mr. Brosius. See Amended Declaratory Judgment Complaint, p. 13 67. The Company vaguely asserts, "... at various times during the course of his employment ...", Mr. Brosius converted Company supplies and materials for his own use, "Specifically, ... a 5' piece of copper tubing.". Id. 68. Under Pennsylvania law, a conversion is the "deprivation of another's right of property in, or use or possession of, a chattel, without the owner's consent and without lawful justification." Paves v. Carson, 765 A.2d 1128, 1134 (Pa. Super. 2000). 69. Several substantive impediments are associated with the Company's conversion claim. 70. Initially, and as noted by the Company in its Amended Declaratory Judgment Complaint, Mr. Brosius owns 13.3% of the Company, and hence has an ownership interest in each and every piece of property owned by the Company. 71. Mr. Brosius cannot legally have converted property he owns in part. 72. Moreover, Mr. Brosius was a Company employee for in excess of 40 years; any alleged conversion by him that occurred more than 2 years ago is time-barred; the Amended 13 1 Declaratory Judgment Complaint fails to specify any particular alleged incident of conversion, with the exception of a 5' piece of copper tubing in August of 2012. 73. Finally, the use of plumbing supplies by Mr. Brosius and other employees and owners' of the Company was with the Company's full knowledge and consent, rendering the conversion claim legally deficient for an additional reason. 74. Consequently, the conversion claim set forth in the Amended Declaratory Judgment Complaint is legally insufficient and must be dismissed. WHEREFORE, Mr. Brosius respectfully requests that this Preliminary Objection be sustained, that the Court dismiss the conversion claim set forth in the Amended Declaratory Judgment Complaint with prejudice, and that the Court award such other and further relief as deemed appropriate, including an award of attorneys' fees. FIFTH PRELIMINARY OBJECTION Pa. R. C. P. 1028(a)(6) Pendency of a Prior Action 75. Mr. Brosius incorporates by reference the preceding paragraphs as if set forth in full. 76. Pennsylvania Rule of Civil Procedure 1028(a)(6) supports a preliminary objection on the basis that a prior action is pending. Pa. R.C.P. 1028(a)(6). 77. In its Amended Declaratory Judgment Complaint, the Company purports to assert a new claim, for unjust enrichment, against Mr. Brosius. See Complaint, p. 15. 78. This new claim for unjust enrichment was not included in the original Declaratory Judgment Complaint, and was filed after Mr. Brosius filed Dauphin County Lawsuit No. 2 against the majority shareholders, Richard Fulton Fager, Jr. and Bryce F. Fager, and the Company. 14 79. Under the circumstances, any unjust enrichment claim the Company believes it may have may only properly be asserted against Mr. Brosius in Dauphin County Lawsuit No. 2 since it was filed prior to the Company's assertion of its unjust enrichment claim in the captioned matter. 80. Consequently, the unjust enrichment claim set forth in the Amended Declaratory Judgment Complaint is legally insufficient and must be dismissed. WHEREFORE, Mr. Brosius respectfully requests that this Preliminary Objection be sustained, that the Court dismiss the unjust enrichment claim set forth in the Amended Declaratory Judgment Complaint with prejudice, and that the Court award such other and further relief as deemed appropriate, including an award of attorneys' fees. SIXTH PRELIMINARY OBJECTION Pa. R. C. P. 1028(a)(2) Failure to Conform to Law or Rule of Court 81. Mr. Brosius incorporates by reference the preceding paragraphs as if set forth in full. 82. Pennsylvania Rule of Civil Procedure 1028(a)(2) supports a preliminary objection to a complaint where the complaint fails to conform to law or rule of court. See Pa.R.C.P. 1028(a)(2). 83. Pennsylvania Rule of Civil Procedure 1033 permits a party at any time, with consent of the other party or by leave of court to, "change the form of action, correct the name of a party or amend his pleading." Pa. R. Civ. P. 1033. 84. While the filing of an amended complaint as of right in response to preliminary objections is very common under Rule 1028(c), it is rather uncommon for an amended complaint 15 in response to preliminary objections to include an entirely new claim, such as the claim for unjust enrichment asserted in the Amended Declaratory Judgment Complaint. 85. Under the circumstances, the Company should have sought to obtain Mr. Brosius' consent to add the new claim, or sought leave of Court for permission to include the new claim. 86. The Company did neither, and consequently, the unjust enrichment claim set forth in the Amended Declaratory Judgment Complaint is legally insufficient and must be dismissed. WHEREFORE, Mr. Brosius respectfully requests that this Preliminary Objection be sustained, that the Court dismiss the unjust enrichment claim set forth in the Amended Declaratory Judgment Complaint with prejudice, and that the Court award such other and further relief as deemed appropriate, including an award of attorneys' fees. SEVENTH PRELIMINARY OBJECTION Pa. R. C. P. 1028(a)(4) Demurrer 87. Mr. Brosius incorporates by reference the preceding paragraphs as if set forth in full. 88. Pennsylvania Rule of Civil Procedure 1028(a)(4) supports a preliminary objection where a complaint is legally insufficient. Pa. R.C.P. 1028(a)(4). 89. Under Pennsylvania law, a claim for unjust enrichment has three elements, including (1) benefits conferred on defendant by a plaintiff; (2) appreciation of such benefits by a defendant; and (3) acceptance and retention of such benefits under circumstances that it would be inequitable for the defendant to retain the benefit without payment of value. AmeriPro Search Inc. v. Fleming Steel Co., 787 A.2d 988 (Pa. Super. 2001). 16 90. The most significant element of the doctrine of unjust enrichment is whether the enrichment of the defendant is unjust; the doctrine does not apply simply because the defendant may have benefited as the result of the actions of the plaintiff. Id. 91. As noted above, Mr. Brosius owns 13.3% of the Company, and hence has an ownership interest in each and every piece of property owned by the Company. 92. Moreover, and as also noted above, the Company and the majority shareholders, Richard Fulton Fager, Jr. and Bryce F. Fager, sought to unilaterally strip Mr. Brosius of his property and ownership interests in the Company stock at a value that is far less than the stock is actually worth under the circumstances, and without due consideration to the minority shareholder oppression, majority shareholders' self-dealing and breaches of fiduciary duty more fully described herein. 93. Under the circumstances, there simply is no way any enrichment to Mr. Brosius (assuming there was an enrichment) was unjust, as he was and is an owner of the Company, and where the majority shareholders have engaged in minority shareholder oppression, majority shareholders' self-dealing and breaches of fiduciary duty which have substantially harmed- Mr. Brosius. 94. Consequently, the unjust enrichment claim set forth in the Amended Declaratory Judgment Complaint is legally insufficient and must be dismissed. 17 WHEREFORE, Mr. Brosius respectfully requests that this Preliminary Objection be sustained, that the Court dismiss the unjust enrichment claim set forth in the Amended Declaratory Judgment Complaint with prejudice, and that the Court award such other and further relief as deemed appropriate, including an award of attorneys' fees Dated: August 21, 2014 Respectfully submitted, WILLIAM BALABAN & ASSOCIATES, LLC By: /;,:e( -3Z641, --- William R. Balaban, Esquire (PA ID #19677) WBalaban(a,BalabanAndAssociates.com Matthew D. Coble, Esquire (PA ID #89603) MCoble(li BalabanAndAssociates.com Governors' Row 27 North Front Street Harrisburg, PA 17101-1606 (717) 695-2901 (phone) (717) 695-7914 (fax) 18 Attorneys for Darwin K. Brosius Exhibit "A" DARWIN K. BROSIUS, : IN THE COURT OF COMMON PLEAS DAUPHIN COUNTY, PENNSYLVANIA Plaintiff : NO. 2013 -CV -9745 -MP V. R.F. FAGER COMPANY, Defendant CIVIL ACTION — LAW ORDER AND NOW, this " day of August, 2014, upon consideration of Darwin K. Brosius' Reply in Opposition to Motion to Allow Telephonic Testimony, IT IS HEREBY ORDERED AND DECREED that the Hearing previously scheduled for August 5, 2014 at 9:00 a.m. is hereby CONTINUED to September 4, 2014 at 1:00 p.m. in Courtroom No. 5 of the Dauphin County Courthouse. Counsel shall check-in with the Chambers of the undersigned, located on the third floor, fifteen (15) minutes prior to the scheduled time of. the Hearing. IT IS FURTHER ORDERED that a Rule is hereby issued upon the Defendant to sliow cause, if any, why the request of counsel fees to Mr. Brosius, as requested in Darwin K. Brosius' Reply in Opposition to Motion to Allow Telephonic Testimony, should not be granted. Rule returnable at the Hearing on September 4, 2014 in Courtroom No. 5 of the Dauphin County Courthouse. IT IS FURTHER ORDERED that other than the above change, the balance of this Court's March 14, 2014 Order shall remain in full force and effect. BY THE COURT: Bernard L. Coates, Jr. Judge Distribution: William R. Balaban, Esq./Matthew D. Coble, Esq., William Balaban & Associates, LLC, 27 North Front Street, Harrisburg, PA 17101 (fax: 717-695-7914) John A. Feichtel, Esq., Saidis, Sullivan, & Rogers, Suite 400, 635 North 12th Street, Lemoyne, PA 17043 (fax: 717-612-5805) Paul W. Mirinich, Esq., Barley Snyder, 100 East Market Street, York, PA 17401 (fax: 717-843- 8492) Chambers of the Honorable Bernard L. Coates, Jr. Bill Balaban From: Bill Balaban Sent Tuesday, May 06, 2014 1:15 PM To: 'Minnich, Paul W.' Cc: John A. Feichtel; Matt Coble Subject: RE: Darwin K. Brosius Attachments: 5-6-14 DRAFT complaint v Dick, Bryce & Corp-Final.pdf Paul: Thank you for your below e-mail. Attached is Darwin Brosius' draft complaint. We anticipate filing it on May 14, 2014, unless we here otherwise from you. Regards, Bill From: Minnich, Paul W. [mailto:pminnich@barley.com] Sent: Sunday, May 04, 2014 8:49 PM To: Bill Balaban Cc: John A. Feichtel; Matt Coble Subject: RE: Darwin K. Brosius I have authority to accept service of the complaint on behalf of the Company and Richard and Bryce individually. Upon reviewing it, I can get back to you regarding the issue of potential settlement Thanks, Paul Paul W. Minnich, Esquire 100 East Market Street York, PA 17401 T: 717-852-49761 F: 717-843-8492 Bio vCard 1 www.barley.com LPRACTICF uICE 11.NCEuir4 't 13 -ley snwler 'Ik Nothing contained in this email or any attachments is intended to be used, or can be used, to avoid penalties under the Internal Revenue Code or applicable state and local tax provisions. This email and any attachments may contain privileged and confidential information and are solely for the use of the sender's intended reciplent4). If you received this email In error, please notiie sender by reply email and delete all copies and attachments. Thankyou. From: Bill Balaban [mailto:wbalabanObalabanandassociates.com) Sent: Friday, May 02, 2014 2:09 PM To: Minnich, Paul W. Cc: John A. Felchtel; Matt Coble Subject: RE: Darwin K. Brosius 1 Paul: This will acknowledge your below e-mail regarding your forthcoming comments to our mark-ups on the Confidentiality Agreement. Having not received the R.F. Fager Company's reply to our April 8, 2014 Ietter, we are moving forward with the filing of our Complaint. WhiIe Mr. Brosius has beeri eminently patient, he is no Ionger prepared to sit idly by as more time passes with absolutely no meaningful input from the Company. Please let us know if you will accept service on behalf of the Corporation and Richard and Bryce individually. If you do agree to accept service, we will delay filing the Complaint for 5 business days to provide you the opportunity to review it and discuss it with the Fagers. Otherwise, we anticipate filing the Complaint Monday, and dispatching the Sheriff's Office for personal service. From: Minnich, Paul W. [mailto:pminnichabarley.comi Sent: Thursday, May 01, 2014 11:04 PM To: Bill Balaban Cc: John A. Feichtel; Matt Coble Subject: Re: Darwin K. Brosius Thanks Bill. 1 returned Monday but had to deal with a trialon Tuesday and two hearings on Wednesday|have a few modifications to your draft of the confidentiality agreement which I will forward to you tomorrow. Sent from my iPad On Apr 28, 2014, at 1:34 PM, "Bill Balaban" <wbalaban@balabanandassociates.com> wrote: 2 � IJ VERIFICATION 1, Darwin K. Brosius, hereby state, subject to the penalties contained in 18 Pa. C.S. § 4904 relating to unsworn falsification to authorities, that the facts set forth in the foregoing document are true and correct to the best of my knowledge, information and belief. auxiLve, !.1 / 0.70 R.F. FAGER COMPANY, vs. DARWIN K. BROSIUS, : IN THE COURT OF COMMON PLEAS Plaintiff, : OF CUMBERLAND COUNTY, : PENNSYLVANIA : No. 14-4037 CIVIL : Declaratory Judgment Defendant. : CERTIFICATE OF SERVICE I hereby certify that I served a true and correct copy of the foregoing Preliminary Objections of Darwin K. Brosius to Amended Declaratory Judgment Complaint upon the following in the manner indicated below: Dated: August 21, 2014 VIA REGULAR UNITED STATES MAIL Paul W. Minnich, Esquire Barley Snyder 100 East Market Street York, PA 17401 E-MAIL: pminnich@barley.com John A. Feichtel, Esquire Saidis, Sullivan & Rogers Suite 400635 North 12th Street Lemoyne, PA 17043 E-MAIL: jfeichtel@ssr-attorneys.com Matthew D. Coble, Esquire 19 R.F. FAGER COMPANY, Plaintiff, V. DARWIN K. BROSIUS, Defendant. ru )('T r' ?ThSEP -8 PK 3: 26 CUMBERLAND COUNTY IN THE COUTtEINtit YiCAMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Civil Action — Declaratory Judgment No. 14-4037 Civil PLAINTIFF R.F. FAGER COMPANY'S PRELIMINARY OBJECTIONS TO DEFENDANT DARWIN K. BROSIUS' PRELIMINARY OBJECTIONS TO PLAINTIFF'S COMPLAINT Plaintiff R.F. Fager Company, through its attorneys, Barley Snyder, hereby files the following Preliminary Objections to Darwin K. Brosius' Preliminary Objections to the Complaint, and in support thereof, asserts as follows: 1 Plaintiff R.F. Fager Company ("Fager"), the former employer of Defendant Darwin K. Brosius ("Brosius"), seeks from this Court a declaratory judgment that the termination of Brosius' employment with Fager was proper and further that Fager properly refused to pay certain bonuses to Brosius. 2. Additionally, Fager has asserted claims against Brosius for conversion and unjust enrichment arising out of Brosius' misappropriation of Fager supplies and materials and the taking of an account receivable owned by Fager. 3. Additionally, Fager seeks declaratory judgment with respect to various corporate actions undertaken by Fager and challenged by Brosius as a minority shareholder of Fager. 4. Brosius has filed four sets of preliminary objections to the Fager complaint. Three of those preliminary objections are captioned "Demurrer," and assert that the complaint is 4430866.1 legally insufficient. The remaining preliminary objection is captioned "Failure to Join Indispensable Parties," and asserts that Fager has failed to join certain parties against whom Brosius wishes to assert claims. 5. Brosius' preliminary objections include a "Factual Background," consisting of 34 numbered paragraphs, most of which contain factual assertions not included in the Fager complaint. Also, the preliminary objections have attached to them certain e-mail communications between counsel. 6. In recognition of the fact that his preliminary objections contain new facts, Brosius attached to the preliminary objections his verification to the extensive presentation of new facts. 7. Preliminary objections in the nature of a demurrer require the Court to resolve the issues solely on the basis of the pleadings. No testimony or other evidence outside of the complaint may be considered to dispose of the legal issues presented by the demurrer. Foster v. UPMC Southside Hospital, 2 A.3d 655 (Pa. Super. 2010). Stated otherwise, when ruling on preliminary objections, the court is limited to a review of the allegations set forth in the challenged pleading. Bradford County Citizens in Action v. Board of Commissioners of Bradford County, 439 A.2d 1346 (Pa. Cmwlth. 1982). 8. Brosius' preliminary objections in the nature of a demurrer all rely upon facts or evidence outside of the Fager complaint, and therefore, cannot be considered. 9. Where preliminary objections are improper in form, the opposing party may file preliminary objections to the improper preliminary objections. Bradford County Citizens in Action v. Board of Commissioners of Bradford County, supra. 4430866J 2 10. Inasmuch Brosius' preliminary objections in the nature of a demurrer rely upon facts and evidence not within the complaint, Brosius' preliminary objections are improper, and should be stricken pursuant to Pennsylvania Rule of Civil Procedure 1028(a)(2) for failure of a pleading to conform to law or rule of court. 11. With respect to Brosius' remaining preliminary objection, failure to join an indispensable party, under Pennsylvania law, a party is considered "indispensable" only when the party has such an interest in the dispute that a final decree cannot be made without affecting that party's rights or leaving the controversy in such a condition that a final determination may be wholly inconsistent with equity and good conscience. Alternatively, the party's presence is indispensable where that party's rights are so connected with the claims of the litigants that no decree can be made between them without impairing such rights. Mechanicsburg Area School District v. Kline, 431 A.2d 953 (Pa. 1981). 12. Contrary to Brosius' allegations, the majority shareholders of Fager are not indispensable parties to the declaratory judgments sought by Fager. 13. At most, Brosius may wish to pursue certain related claims against the majority shareholders, but that does not render the majority shareholders indispensable parties in this litigation brought by Fager. 14. Given that Brosius' preliminary objections asserting an alleged failure to join indispensable parties lacks any legal merit and is premised upon facts outside of the complaint, Brosius' preliminary objections asserting a failure to join an indispensable party should be dismissed. WHEREFORE, R.F. Fager Company respectfully requests that its preliminary objections to Defendant Darwin K. Brosius' preliminary objections be sustained, that Defendant 4430866.1 3 Brosius' preliminary objections be stricken or dismissed, and that Defendant Brosius be directed to file an answer to the R.F. Fager Company complaint. Dated: BARLE-Y--SNY Minnict squire 100 East Market Street York, PA 17401 T: 717-846-8888 F: 717-843-8492 pminnich@barley.com Court ID 74453 John A. Feichtel, Esquire Saidis, Sullivan & Rogers 635 North 12th Street, Suite 400 Lemoyne, PA 17043 T: 717-612-5803 F: 717-612-5805 jfeichtel@ssr-attorneys.com Court ID 77426 4430866.1 4 Attorneys for Plaintiff R.F. Fager Company CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing document has been served this 8th day of September, 2014, by first class mail, postage prepaid, upon: William R. Balaban, Esquire William Balaban & Associates LLC Governors' Row 27 North Front Street Harrisburg, PA 17101-1606 BARLEY SNYDER By: Paul W Minnich, Esquire 100 East Market Street York, PA 17401 T: 717-846-8888 F: 717-843-8492 pminnich@barley.com Court ID 74453 4430866.1 5 ECKERT SEAMANS CHERIN & MELLOTT, LLC LeRoy S. Zimmerman, Esquire (PA 07278) Adam M. Shienvold, Esquire (PA 81941) 213 Market Street, Eighth Floor Harrisburg, PA 17101 717-237-6000 ashienvolda,eckertseamans.com IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA C.7 ..p -p --? v cD R.F. Fager Company, : 14 -4037 -CIVIL c Plaintiff -0- r,rnri -o `fl rr, v. : Declaratory Judgment 'c.:3 -4 CD M y —n Darwin K. Brosius, C?_ Defendant. cE CD PRAECIPE FOR ENTRY OF APPEARANCE To the Prothonotary: Please enter the appearance of LeRoy S. Zimmerman, Esquire, Adam M. Shienvold, Esquire, and Eckert Seamans Cherin & Mellott, LLC, on behalf of Plaintiff in the above -captioned matter. Respectfully submitted, Jar. LeRoZimmerman, squire (PA 07278) ECKERT SEAMANS CHERIN & MELLOTT, LLC Date: September 23, 2014 Counsel for Plaintiff {L0567954.1} CERTIFICATE OF SERVICE I certify that on this 23rd day of September, 2014, I served a copy of the foregoing PRAECIPE FOR ENTRY OF APPEARANCE via United States First -Class mail, which service satisfies the Pennsylvania Rules of Civil Procedure, addressed to: William A. Balaban, Esquire Matthew D. Coble, Esquire William Balaban & Associates, LLC 27 North Front Street Harrisburg, PA 17101 wbalabanabalabanandassociates.com mcobleabalabanandassociates.com John A. Feichtel, Esquire Saidis, Sullivan & Rogers 635 North 12th. Street, Suite 400 Lemoyne, PA 17043 jfeichtel@ssr-attorneys.com Paul W. Minnich, Esquire Barley Snyder 100 East Market Street, York, PA 17401 pminnich@barley.com {L0567954.1} 2 e oy S. Zi merman, Esquire Counsel for Plaintiff Leroy S. Zimmerman, Esquire Adam M. Shienvold, Esquire Eckert Seamans Cherin & Mellott, LLC 213 Market Street, Eighth Floor Harrisburg, PA 17101 R.F. FAGER COMPANY, vs. DARWIN K. BROSIUS, 7;f:-.- t.) R 2011/1:01/ Ail 10: 38 . 11:;EiiL YLVAN1COUNTY PEONS A : IN THE COURT OF COMMON PLEAS Plaintiff, : OF CUMBERLAND COUNTY, : PENNSYLVANIA : No. 14-4037 CIVIL : Declaratory Judgment Defendant. : PRAECIPE TO SETTLE, DISCONTINUE AND END WITH PREJUDICE To the Prothonotary: Kindly mark the above -captioned action settled, discontinued and ended with prejudice. Dated: November 14, 2014 Respectfully submitted, ECICERT SEAMANS CHERIN & MELLOTT, LLC e oy S. immerman, Esqu Adam M. Shienvold, Esquire 213 Market Street, Eighth Floor Harrisburg, PA 17101 " Attorneys for Plaintiff, R.F. Fager Company R.F. FAGER COMPANY, vs. DARWIN K. BROSIUS, Plaintiff, Defendant. : IN THE COURT OF COMMON PLEAS : OF CUMBERLAND COUNTY, PENNSYLVANIA : No. 14-4037 CIVIL : Declaratory Judgment CERTIFICATE OF SERVICE I, Adam M. Shienvold, Esquire, hereby certify that I served a true and correct copy of the foregoing Praecipe to Settle, Discontinue and End with Prejudice upon the following in the manner indicated below: VIA HAND DELIVERY: William R. Balaban, Esquire Matthew D. Coble, Esquire WILLIAM BALABAN & ASSOCIATES, LLC Governors' Row 27 North Front Street Harrisburg, PA 17101-1606 (717) 695-2901 (phone) (717) 695-7914 (fax) Attorneys for Defendant, Darwin K. Brosius Dated: November 14, 2014 Shienvold, Esqu