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HomeMy WebLinkAbout14-4393 Supreme Cou�of'Pennsylvania COurt�ODM M%0 Pleas For Prothonotary Use Only: ". � r W4 Ili�f, C,RiI Cover��heet Docket No: SI ����y'c si`..7d 1.lrP Cu'"W"N.- County The information collected on this form is used solely for court administration purposes. This form does not supplement or replace the filing and service of pleadings or other papers as required by lain or rules of court. ' Commencement of Action: El Complaint F1_1 Writ of Summons J Petition S El Transfer from Another Jurisdiction Declaration of Taking iE Lead Plaintiff's Name: Lead Defendant's Name: C Massimo Zanetti Beverage USA, Inc. Rite Aid Corporation T Dollar Amount Requested: `�l within arbitration limits I Are money damages requested? [X! Yes !f No (check one) x)outside arbitration limits O N Is this a Class Action Suit? C' Yes El No Is this an MDJAppeal? 0 Yes E No A Name of Plaintiff/Appellant's Attorney: John R. Zonarich, Esq. l� Check here if you have no attorney(are a Self-Represented (Pro Se] Litigant) ' Nature of the Case: Place an"X"to the left of the ONE case category that most accurately describes your PRIMARY CASE. If you are making more than one type of claim,check the one that you consider most important. TORT(do not include Mass Tort) CONTRACT(do not include Judgments) CIVIL APPEALS Q Intentional Q Buyer Plaintiff Administrative Agencies Malicious Prosecution Debt Collection:Credit Card El Board of Assessment E] Motor Vehicle El Debt Collection: Other Board of Elections Nuisance r r Dept.of Transportation Premises Liability ❑ Statutory Appeal:Other S E] Product Liability(does not include tort) �-1 Employment Dispute: mass E Discrimination =i Slander/Libel/Defamation C Q Other: f-1 Employment Dispute:Other [3 Zoning Board j (] Other: ,r I - xi Other: O MASS TORT Contract-Seller Plaintiff Asbestos N 0 Tobacco Toxic Tort-DES I Toxic Tort-Implant REAL PROPERTY MISCELLANEOUS Toxic Waste 71 Ejectment _ Common Law/Statutory Arbitration B 0 Other: 0 Eminent Domain/Condemnation 1 Declaratory Judgment El Ground Rent Il Mandamus Landlord/Tenant Dispute L1 Non-Domestic Relations Mortgage Foreclosure:Residential Restraining Order PROFESSIONAL LIABLITY Q Mortgage Foreclosure:Commercial Quo Warranto J Dental Partition (]Replevin Q Legal Quiet Title El Other: Medical Other: Other Professional: i I Updated 1/1/2011 MASSIMO ZANETTI BEVERAGE IN THE COURT OF COMMON PLEAS OF USA, INC., a Delaware corporation, CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, CIVIL ACTION—LAW vs. NO. - c3 f —'!Ue4�0 RITE AID CORPORATION, r a Delaware corporation, Defendant. JURY TRIAL DEMANDED NOTICE YOU HAVE BEEN SUED IN COURT. IF YOU WISH TO DEFEND AGAINST THE CLAIMS SET FORTH IN THE FOLLOWING PAGES, YOU MUST TAKE ACTION WITHIN TWENTY (20) DAYS AFTER THIS COMPLAINT AND NOTICE ARE SERVED, BY ENTERING A WRITTEN APPEARANCE PERSONALLY OR BY AN 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 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 1-800-990-9108 717-249-3166 rri rn � fT: ..:. 1--- .�' r- jqi :Z �-� 304038 SKARLATOSZONARICH LLC John R.Zonarich,Esq. Kathy Speaker MacNett,Esq. John B.Zonarich,Esq. Brian W.Mains,Esq. Skarlatos&Zonarich Building 17 South Second Street,6`h Floor Harrisburg,Pennsylvania 17101 Telephone: 717.233.1000 Fax: 717.233.6740 Email:jrz@skarlatoszonarich.com ksm@skarlatoszonarich.com jbz@skariatoszonarich.com bmains@skarlatoszonarich.com Attorneys for Plaintiff' Massimo Zanetti Beverage USA,Inc. MASSIMO ZANETTI BEVERAGE IN THE COURT OF COMMON PLEAS OF USA, INC., a Delaware corporation, CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, CIVIL ACTION—LAW VS. NO. RITE AID CORPORATION, a Delaware corporation, Defendant. JURY TRIAL DEMANDED COMPLAINT NOW COMES Plaintiff, Massimo Zanetti Beverage USA, Inc. ("MZB"), by and through its attorneys, SkarlatosZonarich LLC, to make the following Complaint against Defendant Rite Aid Corporation("Rite Aid"): 1. This case arises from payments due and owing MZB for the sale of its coffee to Rite Aid for distribution and sale at Rite Aid's retail stores. PARTIES 2. Plaintiff MZB is a Delaware corporation with its corporate headquarters at 1200 Court Street, Portsmouth, Virginia. MZB roasts, packages and distributes various brands of coffee to commercial vendors throughout the United States of America. -1- 3. Defendant Rite Aid is a Delaware corporation with its corporate headquarters at 30 Hunter Lane, Camp Hill, Cumberland County, Pennsylvania. Rite Aid is the third largest retail drugstore chain in the United States operating some 4,587 stores in 31 states across the country and the District of Columbia. JURISDICTION AND VENUE 4. Pursuant to applicable law, this court has proper jurisdiction over this matter and is a proper venue for its resolution. Moreover, the parties have entered into an agreement which contains a forum selection clause indicating Cumberland County, Pennsylvania as the proper forum. FACTS 5. On February 21, 2006, MZB signed an agreement with Rite Aid entitled Rite Aid Corporation Guaranteed Sales Agreement ("Guaranteed Sales Agreement") for the sale of MZB's products at Rite Aid's Customer Service Centers and retail locations. 6. On or about January 1, 2007, Rite Aid began ordering coffee from MZB to be sold in Rite Aid's retail stores. 7. Rite Aid agreed to promptly pay MZB in accordance with MZB's invoices for each shipment of coffee it received. 8. Rite Aid accepted the shipments of coffee from MZB without reservation. 9. From January of 2007 through January of 2012, Rite Aid would deduct from its payments to MZB approximately 2.0% of the invoice amount to account for "D&O" (an industry term abbreviation for "dated and obsolete") product. D&O deductions of 2% of the invoice amount are consistent with the industry practice of the food and beverage retail sector for goods that include coffee.. -2- 10. Beginning on or about January of 2012 and continuing through October of 2013, Rite Aid significantly and unilaterally increased the D&O deductions it applied to MZB's invoices. Rite Aid began deducting up to 16% of the invoice amount from its payments to MZB. 11. The increased deductions taken by Rite Aid were excessive, without justification and were not consistent with either industry practices or the prior practices of the parties throughout the years of their dealings. 12. In response to the increased deductions, MZB and Rite Aid made numerous attempts, including a meeting of senior-level management individuals from both companies at Rite Aid's headquarters in Camp Hill, Pennsylvania, to resolve the inconsistent and excessive D&O practices and remedy their negative effects on the parties' business dealings. 13. Rite Aid acknowledged harm caused to the ongoing business relationship between the parties and offered no justification for its pattern of inconsistent and excessive D&O practices, and through numerous sales discussion and negotiations, committed to repair the harm. 14. However, Rite Aid failed to remedy the inconsistent and excessive D&O practices and the business relationship continued to suffer. 15. Unable to resolve the inconsistent and excessive D&O practices, MZB insisted that Rite Aid pay MZB for each order of coffee in advance of the shipment beginning on or about October of 2013. Rite Aid refused and MZB ceased further shipment of coffee to Rite Aid in October of 2013. 16. Rite Aid has refused and continues to refuse to fully pay MZB as invoiced, or provide other compensation for the coffee it ordered and received between -3- January of 2012 through October of 2013. COUNT BREACH OF CONTRACT 17. MZB incorporates by reference the preceding paragraphs of this Complaint as though fully set forth at length herein. 18. MZB fully performed its work and satisfied all conditions precedent, including roasting, packaging and shipping coffee to Rite Aid as ordered and requested by Rite Aid and as reflected in the invoices presented to Rite Aid by MZB. 19. Rite Aid ordered, received, and accepted coffee from MZB without reservation and sold the coffee in its stores. 20. Rite Aid's failure to pay MZB in full for the coffee it ordered, received, accepted and sold constitutes a material breach of contract. 21. It is believed and therefore averred, that as a direct and proximate cause of Rite Aid's breach of contract, MZB has been damaged in the principal sum of at least some Four Hundred Sixty-Nine Thousand Dollars ($469,000). WHEREFORE, Plaintiff Massimo Zanetti Beverage USA, Inc. claims of Defendant Rite Aid Corporation a sum in excess of the limits of mandatory arbitration in Cumberland County, Pennsylvania, together with lawful interest thereon, attorney's fees, costs of suit and any other relief that the court may deem necessary or appropriate. COUNT II UNJUST ENRICHMENT 22. MZB incorporates by reference the preceding paragraphs of this Complaint as though fully set forth at length herein. -4- 23. Rite Aid ordered, received, and accepted coffee from MZB without reservation and sold the coffee in its stores. 24. Rite Aid knew MZB would expect to be fully compensated for the coffee it ordered, received, accepted and sold in its stores. 25. Rite Aid has not fully paid MZB, or provided other just compensation for the coffee. 26. It would be inequitable and unjust to allow Rite Aid to retain the benefit of the coffee that it ordered, received, accepted and sold in its stores without fully paying MZB the fair market value for such product. WHEREFORE, Plaintiff Massimo Zanetti Beverage USA, Inc. claims of Defendant Rite Aid Corporation a sum in excess of the limits of mandatory arbitration in Cumberland County, Pennsylvania, together with lawful interest thereon, attorney's fees, costs of suit and any other relief that the court may deem necessary or appropriate. Respectfully submitted, atosZo C Dated: July 25, 2014 By: - 4t��4 Vd Zonari ,Esq.cationNo. 2 Speaker MacNett,Esq. Identification No. 35529 John B. Zonarich,Esq. Identification No. 79989 Brian W. Mains,Esq. Identification No. 310479 -5- Skarlatos &Zonarich Building 17 South Second Street, 6th Floor Harrisburg, PA 17101 Telephone 717.233.1000 Facsimile: 717.23 3.6740 Email: jrz@skarlatoszonarich.com ksm@skarlatoszonarich.com jbz@skarlatoszonarich.com bmains@skarlatoszonarich.com Attorneys for Plaintiff Massimo Zanetti Beverage USA, Inc. -6- VERIFICATION I, Wayne Goodman, General Counsel, hereby certify that the facts set forth in the Complaint are based upon information which I have furnished to counsel, as well as upon information which has been gathered by counsel and/or others acting on my behalf in this matter. The language in the Complaint is that of counsel and not my own. I have read the Complaint, and to the extent it is based upon information which I have given to counsel, it is true and correct to the best of my knowledge, information and belief. To the extent that the content of the Complaint is that of counsel, I have relied upon counsel in making this Verification. I hereby acknowledge that the facts set forth in the aforesaid Complaint are made subject to the penalties of 18 Pa.C.S.A. §4904 relating to unsworn falsification to authorities. Dated: July 25,2014 By: a oodman, General Counsel Ma IoZanetti Beverage USA, Inc. MASSIMO ZANETTI BEVERAGE USA, INC., vs. RITE AID CORPORATION, Plaintiff, Defendant. : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION NO. 2014-4393 11 (") rte.--k. -v C cr+ x 3 7.7 _(- cr..�-. v p PRAECIPE FOR ENTRY OF APPEARANCE TO THE PROTHONOTARY: Kindly enter the appearances of Brian P. Downey and Tucker R. Hull of Pepper Hamilton LLP as counsel for Defendant Rite Aid Corporation. August 5, 2014 #29204483 vl (PA 5 A 30642 P PP m , "+ LP Suite 200, 100 MarkeL..Str P.O. Box 1181 Harrisburg, PA 17108-1181 (717) 255-1155 (717) 238-0575 (fax) downeyb@pepperlaw.com hullt@pepperlaw.com Attorneys for Defendant Rite Aid Corporation CERTIFICATE OF SERVICE I, Brian P. Downey, hereby certify that on August 5, 2014, a true and correct copy of the foregoing was served via First Class, U.S. Mail, postage prepaid, upon the following: John R. Zonarich, Esq. SkarlatosZonarich LLC 17 South Second Street, 6th Floor Harrisburg, PA 17101 Attorney for Plaintiff Massimo Zanetti Beverage USA, Inc. -2- #29204483 vl Ronny R Anderson Sheriff Jody S Smith Chief Deputy Richard W Stewart Solicitor SHERIFF'S OFFICE OF CUMBERLAND COUNTY i THE PROTNOOTARC 2014 AUG 114 Ptd 3: 00 CUMBERLAND COUNTY PENNSYLVANIA Massimo Zanetti Beverage USA, Inc. vs. Rite Aid Corporation Case Number 2014-4393 SHERIFF'S RETURN OF SERVICE 07/25/2014 Sheriff Ronny R Anderson, being duly sworn according to law, states he made diligent search and inquiry for the within named Defendant to wit: Rite Aid Corporation, but was unable to locate the Defendant in the Sheriffs bailiwick. The Sheriff therefore deputizes the Sheriff of Dauphin, Pennsylvania to serve the within Complaint & Notice according to law. 07/31/2014 08:40 AM - The requested Complaint & Notice served by the Sheriff of Dauphin County upon Bob Sersch, who accepted for Rite Aid Corporation, at c/o CT Corporation, 116 Pine Street, Suite 320, Harrisburg, PA 17101. Jack Lotwick, Sheriff, Return of Service attached to and made part of the within record. SHERIFF COST: $37.00 SO ANSWERS, August 12, 2014 RON(' R ANDERSON, SHERIFF (c! ountySuite She t, Tclnosoft. Inc. (01...litit of tft e. tea Shelley Ruhl Real Estate Deputy Matthew L. Owens Solicitor Commonwealth of Pennsylvania County of Dauphin Dauphin County 101 Market Street Harrisburg, Pennsylvania 17101-2079 ph: (717) 780-6590 fax: (717) 255-2889 Jack Lotwick Sheriff Jack Duignan Chief Deputy Michael W. Rinehart Assistant Chief Deputy MASSIMO ZANETTI BEVERAGE USA, INC., A DELAWARE CORPORATION VS RITE AID CORPORATION Sheriffs Return No. 2014-T-2147 OTHER COUNTY NO. 2014-4393 And now: JULY 31, 2014 at 8:40:00 AM served the within NOTICE & COMPLAINT upon RITE AID CORPORATION by personally handing to BOB SERSCH * 1 true attested copy of the original NOTICE & COMPLAINT and making known to him/her the contents thereof at C/O CT CORP, 116 PINE STREET, SUITE 320 HARRISBURG PA 17101 * SR. CORPORATE OPERATIONS SPECIALIST Sworn and subscribed to before me this 6TH day of August, 2014 COMMONWEALTH OF PENNSYLVANIA NOTARIAL SEAL Karen M. Hoffman, Notary Public City of Harrisburg, Dauphin County My Commission Expires January 8, 2018 So Annsswers, i! OO Sheriff of Dauphin County, Pa. By L Deputy Sheriff Deputy: BROCK FASNACHT Sheriffs Costs: $41.25 7/30/2014 MASSIMO ZANETTI BEVERAGE IN THE COURT OF COMMON PLEAS OF USA, INC., a Delaware corporation, CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, CIVIL ACTION — LAW v. NO.: 14-4393 RITE AID CORPORATION, JURY TRIAL DEMANDED a Delaware corporation, Defendant. NOTICE TO PLEAD C-,, rn� TIP -T -3-r al -. s -11 -- I ca) To: Massimo Zanetti Beverage USA, Inc. :c s9h. c/o John R Zonarich, Esq. zc Lc, C=r SkarlatosZonarich LLC 17 South Second Street, 6th Floor Harrisburg, PA 17101 You are hereby notified to file a written response to the enclosed Answer With New Matter And Counterclaim within twenty (20) days from service hereof or a judgment may be entered against you. Dated: August 26, 2014 /. f Brian P. Downey (PA 59891) Tucker R. Hull (PA 306426) PEPPER HAMILTON LLP Suite 200 100 Market Street P.O. Box 1181 Harrisburg, PA 17108-1181 717.255.1155 Email: downeyb@pepperlaw.com hullt@pepperlaw.com Attorneys for Defendant MASSIMO ZANETTI BEVERAGE IN THE COURT OF COMMON PLEAS OF USA, INC., a Delaware corporation, CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, CIVIL ACTION — LAW v. NO.: 14-4393 RITE AID CORPORATION, •JURY TRIAL DEMANDED a Delaware corporation, Defendant. • ANSWER WITH NEW MATTER AND COUNTERCLAIM Defendant Rite Aid Corporation ("Rite Aid"), by and through its undersigned counsel, hereby answers the complaint of plaintiff Massimo Zanetti Beverage USA, Inc. ("MZB") as follows: 1. Admitted in part and denied in part. Rite Aid admits that the parties' relationship arose as a result of MZB selling coffee to Rite Aid for distribution and sale at Rite Aid's retail stores but denies that it owes any payments to MZB. By way of further response, MZB owes Rite Aid $271,493.01. Parties 2. Admitted upon information and belief. 3. Admitted. Jurisdiction and Venue 4. Admitted Facts 5. Admitted. 6. Admitted. 7. Denied as stated. The relationship between Rite Aid and MZB is governed by the written documents executed by the parties, documents that speak for themselves, and any characterization inconsistent therewith is strictly denied. By way of further response, at all times relevant hereto Rite Aid made payments to MZB in accordance with the agreements executed by the parties. 8. Denied as stated. Rite Aid admits that it accepted shipments of coffee from MZB. Rite Aid denies that all coffee shipments were accepted without reservation. To the contrary, the shipments were received pursuant to the terms of the parties agreements, including by not limited to the Guaranteed Sales Agreement. 9. Admitted in part and denied in part. Rite Aid denies that "D&O" is an industry term abbreviation for "dated and obsolete." To the contrary D&O is an industry term abbreviation for damaged and outdated. Rite Aid admits that D&O deductions are standard industry practice. Rite Aid denies the remaining averments of this paragraph. Between January 2007 and January 2012 the amount of D&O MZB product varied from time to time depending on a variety of factors including, but not limited to, the effect of MZB's marketing efforts and lack thereof. Rite Aid further denies that there is a particular D&O percentage that is consistent across the food and beverage retail sector. By way of further response, the D&O deductions taken by Rite Aid were not based on any industry practice, but rather based on the particular goods provided by MZB and the ability of Rite Aid to sell them. By way of still further response, all D&O deductions taken by Rite Aid were authorized by the agreements executed by the parties. 10. Denied as stated. Since January of 2012 the amount of D&O MZB product varied from time to time depending on a variety of factors including, but not limited to, -2- the effect of MZB's marketing efforts and lack thereof. Rite Aid admits that the amount of D&O product increased but denies that Rite Aid "unilaterally increased the D&O deductions." To the contrary, as the amount of D&O MZB product increased the amount of deductions attributable to the D&O MZB product increased. 11. Denied. Rite Aid denies that any deductions it took were excessive, without justification or inconsistent with industry practices or the prior practices of the parties throughout the years of their dealings. By way of further response, all deductions taken by Rite Aid were valid and authorized by the agreements executed by the parties. By way of further response Rite Aid incorporates its response to paragraph 10 above as fully as though the same were set forth at length herein. 12. Admitted in part and denied in part. Rite Aid admits that the parties met to discuss the status of their business dealings but denies that Rite Aid's deductions were inconsistent or excessive. To the contrary, all deductions taken by Rite Aid were valid and authorized by the agreements executed by the parties. 13. Denied. Rite Aid denies that it caused harm, or that it ever "acknowledged" that it had caused harm, to the ongoing business relationship between the parties and denies that its D&O practices were inconsistent or excessive. Rite Aid admits that it attempted to work with MZB to develop a more productive business relationship. 14. Denied. Rite Aid denies that it engaged in any inconsistent or excessive D&O practices. Rite Aid also denies that the parties' business relationships suffered as a result of Rite Aid's D&O practices. By way of still further response, all deductions taken by Rite Aid were valid and authorized by the agreements executed by the parties. By way of further response -3- Rite Aid incorporates its response to paragraph 10 above as fully as though the same were set forth at length herein. 15. Admitted in part and denied in part. Rite Aid admits that on or about October 2013 MZB attempted unilaterally to change the terms of the parties' business relationship by insisting that Rite Aid pay MZB for each order of coffee in advance of shipment. Rite Aid admits that it rejected MZB's unilateral attempt to change the terms of the parties' business relationship. Rite Aid further admits that MZB ceased further shipment of coffee to Rite Aid in October 2013. Rite Aid denies, however, that it engaged in inconsistent or excessive D&O practices. By way of further response, all deductions taken by Rite Aid were valid and authorized by the agreements executed by the parties. By way of further response Rite Aid incorporates its response to paragraph 10 above as fully as though the same were set forth at length herein. 16. Admitted in part and denied in part. Rite Aid admits that it has refused to pay the full amounts invoiced by MZB but denies that it has any obligation to do so. Rite Aid denies that MZB has not been fully compensated for the coffee ordered and received by Rite Aid between January 2012 and October 2013. To the contrary, Rite Aid has compensated MZB consistent with the agreements executed by the parties — agreements that authorize all of the deductions that Rite Aid has taken against MZB invoices. By way of further response, MZB has a negative account balance due and owing to Rite Aid of $271,493.01, representing deductions that Rite Aid was authorized to take pursuant to the agreements executed by the parties. COUNT I BREACH OF CONTRACT 17. Rite Aid incorporates by reference its responses to the preceding paragraphs as if fully set forth herein. -4- 18. Denied. Rite Aid denies that MZB fully performed its work and satisfied all conditions precedent. By way of further response, a portion of the coffee supplied by MZB was unsaleable as determined by Rite Aid and as reflected in the deductions taken against MZB's account. That a portion of the coffee supplied by MZB was unsaleable is a decision that Rite Aid was authorized to unilaterally make pursuant to the agreements executed by the parties. 19. Admitted in part and denied in part. Rite Aid admits that it ordered, received and accepted coffee from MZB and sold the coffee in its stores. Rite Aid denies that all coffee was accepted without reservation. To the contrary, a portion of the coffee received by Rite Aid was unsalable, and at all times relevant to this dispute Rite Aid had reserved its right to return unsold or unsaleable product. 20. Denied. Rite Aid denies that it failed to pay MZB in full for the coffee it ordered, received, accepted and sold. To the contrary, Rite Aid paid all invoiced amounts minus only the amounts that Rite Aid was authorized to deduct pursuant to the agreements executed by the parties. The remaining averments of this paragraph constitute conclusions of law to which no response is required. To the extent that a response is deemed necessary, Rite Aid denies that it has breached any contract with MZB. By way of still further response, MZB is in breach of the parties' contract by failing to pay the negative account balance of $271,493.01 that is due and owing to Rite Aid. 21. Admitted in part and denied in part. Rite Aid admits, upon information and belief, that MZB believes that it has been damaged. Rite Aid denies, however, that it has caused any damage to MZB. To the contrary, MZB has breached the contract between the parties by refusing to pay the negative account balance due and owing to Rite Aid of $271,493.01. -5- COUNT II UNJUST ENRICHMENT 22. Rite Aid incorporates by reference its responses above as if fully set forth herein. 23. Admitted in part and denied in part. Rite Aid admits that it ordered, received and accepted coffee from MZB and sold the coffee in its stores. Rite Aid denies that all coffee was accepted without reservation. To the contrary, a portion of the coffee received by Rite Aid was unsalable, and at all times relevant to this dispute Rite Aid had reserved its right to return unsold or unsaleable product. 24. Denied as stated. Rite Aid is without knowledge sufficient to form a belief as to the expectations of MZB. Rite Aid denies the implication that it failed to compensate MZB according to the terms of the parties' relationship. By way of further response, Rite Aid expected to compensate MZB consistent with the written agreements executed by the parties and, in fact, compensated MZB consistent with the terms of those agreements. 25. Denied. Rite Aid denies that it has not fully paid MZB or provided just compensation for the coffee. To the contrary, Rite Aid has compensated MZB consistent with the agreements executed by the parties. 26. The averments of this paragraph constitute conclusions of law to which no response is required. To the extent that a response is deemed necessary, Rite Aid denies that it has been unjustly enriched or that MZB has not been fully compensated for the fair market value of the product order received, accepted and sold by Rite Aid. WHEREFORE, Defendant Rite Aid Corporation demands: (a) dismissal of Complaint with prejudice; (b) an award of fees and costs to Rite Aid; and (c) such other relief as the Court deems just and proper. -6- NEW MATTER 27. MZB's Complaint fails to state a claim upon which relief may be granted. 28. Rite Aid did not breach any duty, contractual or otherwise, allegedly owed, to MZB. 29. MZB's causes of action against Rite Aid may be barred by the equitable doctrines of estoppel, laches, and/or waiver. 30. Rite Aid is entitled to an equitable right of set-off. 31. MZB's claims are barred, in whole or in part, by the applicable statute of limitations. 32. MZB's claims are barred, in whole or in part, because Rite Aid complied with all applicable terms of the agreements between the parties. 33. MZB has not suffered compensable injuries or damages and, therefore, lack standing to assert any claim against Rite Aid. 34. Rite Aid does not waive any of the affirmative defenses in Pa.R.C.P. 1030 or any other affirmative defense and hereby gives notice that Rite Aid relies upon such other defenses as may become available or appear during the course of discovery proceeding in this case. Rite Aid reserves the right to amend this Answer to assert such defenses. WHEREFORE, Defendant Rite Aid Corporation demands: (a) dismissal of Complaint with prejudice; (b) an award of fees and costs to Rite Aid; and (c) such other relief as the Court deems just and proper. COUNTERCLAIMS Relevant Facts 35. Rite Aid is a national drug store chain with its principal office in Cumberland County, Pennsylvania. -7- 36. At all times relevant to this Counterclaim, MZB was involved in the sale of, inter alia, coffee. 37. Rite Aid and MZB entered into a Guaranteed Sales Agreement ("GSA") in which MZB "guarantee[d] the sale of [MZB's] product to Rite Aid at both Customer Service Centers (i.e., distribution centers) and retail locations." A true and correct copy of the GSA is attached hereto as Exhibit A. 38. Under the GSA, Rite Aid had the right to return all unsold product to MZB for a cash refund. 39. Specifically, the GSA provided that: If, at any time, Rite Aid determines in its sole discretion that [MZB's] product(s) performance continues to be unacceptable, Rite Aid will have the right to return at [MZB's] expense all unsold product(s) to [MZB's] facility in return for [MZB's] cash payment to Rite Aid for any products for which Rite Aid has paid, but have not been sold. See Exhibit A. 40. Rite Aid determined in its sole discretion that MZB's product performance was unacceptable and demanded a cash refund for products that had not been sold. 41. In breach of the GSA, MZB has failed and refused to guarantee the sale of its products. 42. In breach of the GSA, MZB has refused to refund Rite Aid the expense of all unsold product for which Rite Aid has paid but that has not been sold. 43. On February 21, 2006, Rite Aid and MZB entered into a Returns Agreement that provided the manner in which MZB's products could be returned to MZB. A true and correct copy of the Returns Agreement is attached hereto as Exhibit B. -8- 44. The Returns Agreement permitted MZB to direct how Rite Aid should handle damaged, defective, outdated and discontinued goods ("unsaleable"). See Exhibit B. 45. Pursuant to the Returns Agreement, MZB agreed to pay processing fees for unsaleable product. See Exhibit B. 46. MZB also decided that the unsalable products should be scanned and donated at a cost of $0.030 per item in addition to the other processing fees outlined in the Returns Agreement. See Exhibit B. 47. At various times during the parties' business relationship, MZB incurred fees pursuant to the Returns Agreement some of which MZB now refuses to pay. 48. During the parties' business relationship, Rite Aid and MZB also entered into other agreements regarding the marketing and promotion of MZB's Products in Rite Aid's stores. 49. Due to the fees and expenses charged pursuant to the agreements described above ("Fees"), MZB's account with Rite Aid has a negative balance of $87,670.51. A true and correct copy of MZB's statement of account is attached hereto as Exhibit C. 50. In addition to the negative account balance of $87,670.51 that MZB owes to Rite Aid, MZB also owes Rite Aid for outdated product for which MZB refuses to issue a cash refund as well as for product that Rite Aid had to markdown for sale. 51. Specifically, Rite Aid is in possession of $27,416.00 worth of coffee that expired before being sold. 52. Under the GSA and Returns Agreement, MZB was obligated to accept the return of the expired product for a full cash refund. -9- 53. MZB has refused to accept the return of the $27,416.00 worth of expired product and has refused to issue a cash refund to Rite Aid. 54. Because MZB refused to accept the return of the expired product, Rite Aid will be forced to incur the expense of disposing of it. 55. MZB's refusal to accept the return of the expired product was a breach of the agreements between the parties and caused damage to Rite Aid in an amount in excess of $27,416.00. These damages are not reflected in the statement of account that is attached hereto as Exhibit C. of its product. 56. Rite Aid has been further damaged by MZB's refusal to fund a markdown 57. As of March 16, 2014, Rite Aid was in possession of 49,332 units of MZB product at a cost to Rite Aid of $312,813. 58. Because MZB product performance continued to be unacceptable as of March 16, 2014, Rite Aid had a contractual right to return all 49,332 units of MZB product for a full cash refund of $312,813 pursuant to the GSA and Rite Aid Returns Agreements. See Exhibits A and B. 59. Because MZB had refused to ship additional product and had effectively ended its business relationship with Rite Aid, the 49,332 units of MZB product that were in Rite Aid's possession as of March 16, 2014, were marked down for sale instead of being returned to MZB. industry. 60. A markdown of product in situations such as this is customary in the -10- 61. The custom in the industry is that the vendor (i.e. MZB) funds the markdowns at 50% of cost. 62. As a result, MZB should have funded $156,406.50 of the product markdown. 63. MZB refused to pay anything to Rite Aid to fund the markdown, and, as a result, Rite Aid incurred an additional $156,406.50 in damages. These damages are not reflected on the statement of account that is attached hereto as Exhibit C. 64. As of the date of the filing of this Counterclaim, MZB is in breach of the GSA, the Returns Agreement, and other related account contracts and agreements because it refuses to pay Rite Aid the negative balance on its account, refused to accept the return of expired product for a cash refund and failed to fund the product markdown. 65. In total, Rite Aid has been damaged in an amount in excess of $271,493.01 as a result of MZB's breaches of the parties' agreements. COUNT I BREACH OF CONTRACT 66. Rite Aid incorporates by reference its responses above as if fully set forth herein. 67. As noted above, Rite Aid and MZB entered into various valid and enforceable written agreements under which MZB agreed to pay certain Fees. . 68. Rite Aid has performed all conditions precedent under all agreements with MZB. 69. MZB is in breach of the GSA, the Returns Agreement and other related Agreements because it has failed to pay the negative balance on its account and has failed to accept the return of expired product for a cash refund. -11- 70. As of the date of the filing of this Complaint, Rite Aid has suffered damages in excess of $115,086.51 as the result of MZB's breaches of various agreements between the parties. 71. MZB's unjustified refusal to issue a cash refund has caused ongoing damage to Rite Aid. WHEREFORE, Rite Aid requests judgment against MZB in amount in excess of $115,086.51, plus interest, costs and all other amounts deemed appropriate by the Court. COUNT II UNJUST ENRICHMENT 72. Rite Aid incorporates its responses above as if fully set forth herein. 73. In the event MZB contends that no enforceable contractual relationship exists between the parties, Rite Aid is entitled to recover the outstanding amount in order to prevent MZB from being unjustly enriched. 74. As is customary in the industry, MZB was to pay for certain Fees associated with the sale of its product and to guarantee the sale of that product. 75. MZB currently owes Rite Aid $87,670.51 in Fees. 76. Rite Aid has a reasonable expectation to receive the Fees incurred and to be able to return its product to MZB at MZB's cost. 77. MZB reasonably should have expected to pay the Fees as such Fees are customary in the industry. 78. It would be inequitable for MZB to retain the benefit of the $87,670.51 in Fees. 79. MZB has also refused to accept the return of $27,416.00 worth of expired product that Rite Aid has been unable to sell. -12- 80. Rite Aid has a reasonable expectation to be able to return expired product to MZB at MZB's cost. 81. MZB reasonably should have expected to accept the return of expired product at its own cost. 82. It would be inequitable for MZB to retain the benefit of the $27,416.00 of expired product that Rite Aid is unable to sell. 83. MZB has also refused to fund the markdown of 49,332 units of its product at a cost of $312,813. 84. As is customary in the industry when a vendor terminates a business relationship, the vendor funds a markdown of all remaining product at 50% of cost. 85. Rite Aid has a reasonable expectation that MZB will fund the markdown of the 49,332 units of product that were in Rite Aid's possession after MZB terminated the relationship with Rite Aid at 50% of cost. 86. MZB reasonably should have expected to fund the markdown of the 49,332 units of product at 50% of cost. 87. It would be inequitable for MZB to retain the full benefit of the $312,813 of product without funding a product markdown at 50% of cost. 88. As a result, MZB has been unjustly enriched in the additional amount of $156,406.50 89. In the event the contracts are deemed to be unenforceable, Rite Aid has no adequate remedy at law. 90. Rite Aid is entitled to collect the outstanding balance, plus interest, from MZB under the Doctrine of Unjust Enrichment. -13- WHEREFORE, Rite Aid requests that judgment be entered against MZB in the amount of $271,493.01, plus interest, costs, and all other amounts deemed appropriate by the Court. Dated: August 26, 2014 Brian P. Downey (PA 59891) Tucker R. Hull (PA 306426) PEPPER HAMILTON LLP Suite 200 100 Market Street P.O. Box 1181 Harrisburg, PA 17108-1181 717.255.1155 Email: downeyb@pepperlaw.com hullt@pepperlaw.com Attorneys for Defendant -14- VERIFICATION Brian Shanahan signs this Verification on behalf of Rite Aid Corporation, and does hereby verify that the foregoing Answer With New Matter And Counterclaim was prepared with the assistance and advice of counsel, and in reliance upon counsel's advice; that the document, subject to inadvertent or undiscovered errors, is based upon and therefore limited by the records and information still in existence, presently recollected and thus far discovered in preparation of this document; and that subject to the limitations set forth herein, the statements contained in this document are true and correct to the best of her knowledge, information and belief. The language of the foregoing document is that of counsel. It is understood that the statements herein are made subject to the penalties of 18 Pa. C.S. § 4904 relating to unsworn falsification to authorities. Name: Brian Shanahan Title: Category Manager Date: August 9.6, 2014 CERTIFICATE OF SERVICE I hereby certify that on August 26, 2014, a copy of the foregoing document was served by United States mail, first class postage prepaid, addressed as follows: John R. Zonarich, Esq. SkarlatosZonarich LLC 17 South Second Street, 6th Floor Harrisburg, PA 17101 Attorney for Plaintiff Massimo Zanetti Beverage USA, Inc. Tucker R. Hull (63915) Exhibit A RA Books Unsaleables 0082863446 Unsaleables 00e8127452 Unsaleables 0090155445 Coupons NC3389508 Markdowns 0548752 Connolly Post Audit Claim CC 132187 Unsaleables 0084347446 Unsaleables 0089787452 Unsaleables 0091808445 Connolly Post Audit Claim CC132086 Unsaleables 0085937446 Unsaleables 0091580452 Unsaleables 0093542445 Unsaleables 0087352446 Unsaleables 0093247452 Unsaleables 0095176445 Coupons NC3389511 Unsaleables 0088727446 Unsaleables 0094849452 Unsaleables 0096867445 Markdowns 0516585 Markdowns 0582092 Unsaleables 0090278446 Unsaleables 0096625452 Unsaleables 0098482445 Unsaleables 0091801446 Unsaleables 0098391452 Unsaleables 0100113445 MASSIMO ZANETTI BEVERAGE USA V#33895 Statement of the Account as of 5-20-14 te, Dsc 10/18/2013 10/21/2013 (4,342.98) $ 10/16/2013 10/21/2013 8 (2,769.68) $ 10/18/2013 10/21/2013 $ (4,401.96) $ 10/26/2013 10/23/2013 $ (16.45) 5 10/24/2013 11/12/2013 $ (10,096.25) $ 11/20/2013 11/20/2013 $ (1,025.37) $ 11/22/2013 11/25/2013 $, (4,179.98) $ 11/22/2013 11/25/2013 $ (4,292.78) $ 11/22/2013 11/25/2013 $ (5,928.12) $ 12/4/2013 12/4/2013 $ (502.46) $ 12/20/2013 12/23/2013 $ (3,333.45) $ 12/20/2013 12/23/2013 $ (1,522.86) $ 12/20/2013 12/23/2013 $ (5,772.92) $ 1/17/2014 1/20/2014 $ (1,301.72) $ 1/17/2014 1/20/2014 $ (2,134.02) $ 1/17/2014 1/20/2014 $ (2,570.97) $ 1/25/2013 1/222014 $ (26.47) $ 2/21/2014 2/24/2014 $ (3,577.03) $ 2/21/2014 2/24/2014 $ (7,668.83) $ 2/21/2014 2/24/2014 $ (4,479.78) $ 3/7/2014 3/7/2014 $ (6,571.95) $ 3/7/2014 3/7/2014 $ (54.90) $ 3/21/2014 3/24/2014 $ (1,299.82) $ 3/21/2014 3/24/2014 $ (1,729.28) 5 3/21/2014 3/24/2014 $ (2,430.36) $ 4/18/2014 4/21/2014 $ (882.95) $ 4/18/2014 4/21/2014 8 (2,104.95) $ 4/18/2014 4/21/2014 $ (2,652.22) $ :'--(:..' Pm Anit.'?‘-;:;.Mist AM(':'':: •••:.:NetAmi",;',-,:,'"I: $ - $ - $ (4,342.98) $ 8 $ - $ (2,769.68) $ $ $ - $ (4,401.96) $ $ $ - $ (1645) $ $ $ - $ (10,096.25) $ $ $ $ (1,025.37) $ $ $ $ (4,179.98) $ $ $ $ (4,292.78) $ $ $ $ (5,928.12) $ $ $ $ (502.46) $ $ $ $ (3,33145) $ $ $ $ (1,522.86) $ $ $ $ (5,772.92) $ 8 $ $ (1,301.72) $ $ 5 $ (2,134.02) $ $ $ $ (2,570.97) $ - $ $ $ (26.47) $ - ' $ $ $ (3,577.03) $ - $ $ $ (7,668.83) $ - $ $ $ (4,47938) $ - $ $ $ (6,571.95) $ - $ $ $ (54.90) 5 - $ $ $ (1,299.82) $ - $ $ $ (1,729.28) $ - $ $ $ (2,430.36) $ - $ $ $ (882.95) $ - $ $ $ (2,104.95) $ - $ $ $ (2,652.22) Total: (67,670.51 $ - 87,670.51) As of 5-20-14 Page 1 of 1 Exhibit B RITE AID CORPORATION GUARANTEED SALES AGREEMENT Rite Aid will consider Vendor's product(s) for distribution and sale under the terms and conditions set forth in this Agreement. In consideration of Rite Aid's agreement to review a new entry into its mix, as well as in consideration of the mutual premises contained herein, the parties agree as follows: Vendor will guarantee the sale of Vendor's product(s) to Rite Aid at both Customer Service Centers (i.e. distribution centers) and retail locations. 2. During the first one hundred twenty (120) days, or such other period as Rite Aid may determine in its sole discretion (it being understood by Vendor that Rite Aid may terminate this Agreement in its sole discretion at any time, for any reason whatsoever) following the date if the Vendor's first delivery of product(s) to Rite Aid (the "Review Period"), Vendor's account will be on a review status to permit Rite Aid to assess the performance of the product(s). During the Review Period, Rite Aid will pay only for those product(s) that are actually sold, and Rite Aid's payment will be reduced by any and all cash discounts or other debit amounts (including, but not limited to, advertising, displays, markdowns and price protection) due to Rite Aid. If at the end of the Review Period, Rite Aid determines, in its sole discretion, that the Vendor's product(s) is not selling at an acceptable rate, then Rite Aid will have the right to (a) require Vendor to review and modify Vendor's marketing plan to ensure future success and (b) extend the due date of the original invoice submitted by Vendor. Rite Aid also has the right to require a cash payment, as described in paragraph (3) below. The foregoing rights are not exclusive. At the end of the Review Period, Rite Aid may terminate this Agreement, place the Vendor on Rite Aid's customary payment terms, or extend the Review Period as Rite Aid, in its sole discretion, so desires. 3. If at any time Rite Aid determines in its sole discretion that Vendor's product(s) performance continues to be unacceptable, Rite Aid will have the right to return at Vendor's expense all unsold product(s) to Vendor's facility in return for Vendor's cash payment to Rite Aid for any products for which Rite Aid has paid, but have not been sold. Vendor's payment to Rite Aid shall be made (a) by wire transfer of immediately available funds or certified check, and (b) no later than fifteen (15) days after Rite Aid has retumed the product(s). Vendor acknowledges and agrees that in the event that any of Vendor's allowances are funded with "free product" from Vendor, that "free product" will be treated identically to product purchased from Vendor by Rite Aid. This includes,but is not limited to, retums of this product Vendor. 4. Upon settlement of Vendor's account, all outstanding invoices will be paid promptly, less any and all cash discounts or other debit amounts due to Rite Aid. Revised 8/01 /2004 5. The terms and conditions of this Agreement are in addition to, and in no way limit, Rite Aid's rights and remedies under Rite Aid's Vendor Profile, standard terms and conditions or purchase orders. In the event of inconsistency between the terms and conditions of the Agreement and any of the foregoing documents, this Agreement will govern. 6. The parties agree that Pennsylvania law govems this Agreement not withstanding its conflicts of law provisions. Any lawsuit brought with regard to this Guaranteed Sales Agreement will be venued in the Court of Common Pleas, Cumberland County, Pennsylvania. 7. The parties specifically agree that 13 Pa. C.S.A. §2326 & 2327(b) are inapplicable and that Vendor will accept returned goods in their "as -is" condition. 8. All returns are at risk of vendor. 9. Vendor can not assign any product covered by this Agreement to any third party without the express written consent of a Vice President of Category Management. Rite Aid is enthusiastic about the opportunity to distribute product(s) into the marketplace. Rite Aid wishes you every success in your endeavor to provide a product that is unique. Please allow Rite Aid to assist you in your distribution needs by arranging for a duly authorized officer to sign and date this Agreement on behalf of your company, and return the executed letter to Rite Aid's Merchandising Department. ' /,.' Vendor: !/"f��✓G. j ._ .tet l t ' By: Title: Title: C C. 0, 0. Authorize Date: Revised Rro 12004 Exhibit C RITE AID RETURNS AGREEMENT Please note: A Separate Returns Agreement must be filled out for each vendor number. ievex e�(3f Company Name: OCI(6SIMO Contact Name: VM(1OlilcY 'C (J , "a Phone# Fax # E -Mail Address: Vendor Number: * 32n5 Category Manager: Shipping Address: Ln Associate Category Manager: TERMS OF AGREEMENT: A. Unsaleable Merchandise 1. All vendors will be charged the following processing fees for damaged, defective, outdated, and discontinued goods. These fees are based on the findings from the Joint Industry Task Force Study (JIR): DPC (Direct Product Cost) Post Damage Ops through Scan: $0.085 $0.111 $0.101 $0.297 2. All vendors must determine a method of disposition for their unsaleable products. Based on the CODE/DESCRIPTIONS listed below, the vendor representative will check (X) the method his/her company has authorized Rite Aid to use. The additional charge, shown in () at the end of the description, will be added to the charges above. CODE DESCRIPTION (JIR COSTZ COPT Scan and disposition is left up to the discretion of Rite Aid ($0.020) DONA )( Scan and donate ($0.030) SHBK _ Scan and ship back to vendor ($0.180) OPEN RA# REQUIRED WITH THIS OPTION RA# NOTE: Any product remaining in the reclamation centers for 45 days from the date of invoice, without a Return Authorization Number, will be disposed of at the discretion of Rite Aid Corporation. Rite Aid Corporation will not entertain ANY requests for payback of product that falls into this category. . All products will be billed at Rite Aid's current list cost + JIR billing factors (DPC, Post Damage Handling, RCC Charges, Disposition Charges) unless otherwise agreed to in writing by Rite Aid Corporation. Vendor billing is not to exceed 130% of Rite Aid's list cost. Rev 01112/06 Rite Aid Returns Agreement Page 2 . All changes to policies must be in writing to Rite Aid Corporation. Approved policy changes will take effect within 30 days following their approval. 5. All vendors will agree to forward a copy of their current national policy regarding reclamation to be reviewed by Rite Aid Corporation. This will be sent to: Rite Aid Corporation 30 Hunter Lane Camp Hill, PA 17011 Attention: Manager, Front End Returns 6. All damaged and outdated invoices are available through the Rite Aid Paperless Invoice System using the Carolina Supply Chain Services Website at www.carolinasupplvchainservices.com. Vendors should contact the Manager, Front End Returns, at 717-214-8832 to request setup of their Company's authorized user. (See Page 3) B. Recall Merchandise Please note: The dispositions on page 1 DO NOT apply to recalls. A separate agreement MUST be ed out for all recalls at the time the recall is being activated. This allows a vendor to have a eparate disposition on recalls than they have on damaged and outdated returns. 1. .All recall invoices are available through the Rite Aid Paperless Invoice System using the Carolina Supply Chain Services Website at www.carolinasurolvchainservices.com. Vendors should contact the Manager, Front End Returns, at 717-214-8832 to request setup of their Company's authorized user. (See Page 3) The signatures below by the appropriate Category Manager of Rite Aid Corporation and the vendor representative of said company denote their understanding and acceptance of the above agreement. )1/ Date Sigrfature (Authorized y Rite Aid Corporation) Date Rev 01/12/06 Rite Aid Corporation Rite Aid Returns Agreement Page 3 NOTICE PLEASE BE ADVISED THAT AS OF MARCH 18, 2005, ALL INVOICING FOR DAMAGED AND OUTDATED AND RECALLED PRODUCT IS NOW PAPERLESS. ALL INVOICES WILL BE OBTAINED BY A VENDOR DESIGNATED REPRESENTATIVE THROUGH THE CAROLINA SUPPLY CHAIN SERVICES WEBSITE. PLEASE IDENTIFY THE CORRECT PERSON WITHIN YOUR COMPANY WHO REQUIRES THESE INVOICES, AND PROVIDE THE REQUESTED INFORMATION BELOW. ALL APPROPRIATE INFORMATION FOR A CCESS TO THE CSCS WEBSITE WILL BE SENT TO THE DESIGNATED INDIVIDUAL. All information relating to the Carolina Supply Chain Services Website should be sent to the following individual: PLEASE PRINT: r1A i f1 /1 JE7 i ek/ER/16C u5A Vendor Name Vendor Number VA ,23,-(31-/ Address " City State Zip - sI2» �Caavi n e -S 0 ContacName Phone aeo.o-1tnd zi3-usA,Cor1 E-mail Address V li 1L n E. got l e - Authorized by (print name) Sign Date THIS FORM MUST ACCOMPANY THE RITE AID RETURNS AGREEMENT FOR DAMAGED AND OUTDATED PRODUCT Rev 01/12/06 MASSIMO ZANETTI BEVERAGE . USA, INC., a Delaware corporation, . Plaintiff, v. RITE AID CORPORATION, a Delaware corporation, Defendant. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION — LAW NO.: 14-4393 JURY TRIAL DEMANDED NOTICE TO PLEAD To: Massimo Zanetti Beverage USA, Inc. do John B. Zonarich, Esq. SkarlatosZonarich LLC 17 South Second Street, 6th Floor Harrisburg, PA 17101 You are hereby notified to file a written response to the enclosed Amended Answer With New Matter And Counterclaim within twenty (20) days from service hereof or a judgment may be entered against you. Dated: September 5, 2014 Brian P. Downey (PA 59891) Tucker R. Hull (PA 306426) PEPPER HAMILTON LLP Suite 200 100 Market Street P.O. Box 1181 Harrisburg, PA 17108-1181 717.255.1155 Email: downeyb@pepperlaw.com hullt@pepperlaw. com Attorneys for Defendant MASSIMO ZANETTI BEVERAGE USA, INC., a Delaware corporation, Plaintiff, V. RITE AID CORPORATION, a Delaware corporation, Defendant. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION — LAW NO.: 14-4393 JURY TRIAL DEMANDED AMENDED ANSWER WITH NEW MATTER AND COUNTERCLAIM Defendant Rite Aid Corporation ("Rite Aid"), by and through its undersigned counsel, hereby files an Amended Answer with New Matter and Counterclaim' to the complaint of plaintiff Massimo Zanetti Beverage USA, Inc. ("MZB") and states as follows: 1. Admitted in part and denied in part. Rite Aid admits that the parties' relationship arose as a result of MZB selling coffee to Rite Aid for distribution and sale at Rite Aid's retail stores but denies that it owes any payments to MZB. By way of further response, MZB owes Rite Aid $271,493.01. Parties 2. Admitted upon information and belief. 3. Admitted. Jurisdiction and Venue 4. Admitted The substance of this Amended Answer with New Matter and Counterclaim is identical to the substance of the original Answer with New Matter and Counterclaim that was filed by Rite Aid in the this matter. This Amended Answer is being filed only to remedy the fact that the exhibits in the original Answer with New Matter and Counterclaim were out of order. Facts 5. Admitted. 6. Admitted. 7. Denied as stated. The relationship between Rite Aid and MZB is governed by the written documents executed by the parties, documents that speak for themselves, and any characterization inconsistent therewith is strictly denied. By way of further response, at all times relevant hereto Rite Aid made payments to MZB in accordance with the agreements executed by the parties. 8. Denied as stated. Rite Aid admits that it accepted shipments of coffee from MZB. Rite Aid denies that all coffee shipments were accepted without reservation. To the contrary, the shipments were received pursuant to the terms of the parties agreements, including by not limited to the Guaranteed Sales Agreement. 9. Admitted in part and denied in part. Rite Aid denies that "D&O" is an industry term abbreviation for "dated and obsolete." To the contrary D&O is an industry term abbreviation for damaged and outdated. Rite Aid admits that D&O deductions are standard industry practice. Rite Aid denies the remaining averments of this paragraph. Between January 2007 and January 2012 the amount of D&O MZB product varied from time to time depending on a variety of factors including, but not limited to, the effect of MZB's marketing efforts and lack thereof. Rite Aid further denies that there is a particular D&O percentage that is consistent across the food and beverage retail sector. By way of further response, the D&O deductions taken by Rite Aid were not based on any industry practice, but rather based on the particular goods provided by MZB and the ability of Rite Aid to sell them. By way of still further response, all D&O deductions taken by Rite Aid were authorized by the agreements executed by the parties. -2- 10. Denied as stated. Since January of 2012 the amount of D&O MZB product varied from time to time depending on a variety of factors including, but not limited to, the effect of MZB's marketing efforts and lack thereof. Rite Aid admits that the amount of D&O product increased but denies that Rite Aid "unilaterally increased the D&O deductions." To the contrary, as the amount of D&O MZB product increased the amount of deductions attributable to the D&O MZB product increased. 11. Denied. Rite Aid denies that any deductions it took were excessive, without justification or inconsistent with industry practices or the prior practices of the parties throughout the years of their dealings. By way of further response, all deductions taken by Rite Aid were valid and authorized by the agreements executed by the parties. By way of further response Rite Aid incorporates its response to paragraph 10 above as fully as though the same were set forth at length herein. 12. Admitted in part and denied in part. Rite Aid admits that the parties met to discuss the status of their business dealings but denies that Rite Aid's deductions were inconsistent or excessive. To the contrary, all deductions taken by Rite Aid were valid and authorized by the agreements executed by the parties. 13. Denied. Rite Aid denies that it caused harm, or that it ever "acknowledged" that it had caused harm, to the ongoing business relationship between the parties and denies that its D&O practices were inconsistent or excessive. Rite Aid admits that it attempted to work with MZB to develop a more productive business relationship. 14. Denied. Rite Aid denies that it engaged in any inconsistent or excessive D&O practices. Rite Aid also denies that the parties' business relationships suffered as a result of Rite Aid's D&O practices. By way of still further response, all deductions taken by Rite Aid were valid and authorized by the agreements executed by the parties. By way of further response Rite Aid incorporates its response to paragraph 10 above as fully as though the same were set forth at length herein. 15. Admitted in part and denied in part. Rite Aid admits that on or about October 2013 MZB attempted unilaterally to change the terms of the parties' business relationship by insisting that Rite Aid pay MZB for each order of coffee in advance of shipment. Rite Aid admits that it rejected MZB's unilateral attempt to change the terms of the parties' business relationship. Rite Aid further admits that MZB ceased further shipment of coffee to Rite Aid in October 2013. Rite Aid denies, however, that it engaged in inconsistent or excessive D&O practices. By way of further response, all deductions taken by Rite Aid were valid and authorized by the agreements executed by the parties. By way of further response Rite Aid incorporates its response to paragraph 10 above as fully as though the same were set forth at length herein. 16. Admitted in part and denied in part. Rite Aid admits that it has refused to pay the full amounts invoiced by MZB but denies that it has any obligation to do so. Rite Aid denies that MZB has not been fully compensated for the coffee ordered and received by Rite Aid between January 2012 and October 2013. To the contrary, Rite Aid has compensated MZB consistent with the agreements executed by the parties — agreements that authorize all of the deductions that Rite Aid has taken against MZB invoices. By way of further response, MZB has a negative account balance due and owing to Rite Aid of $271,493.01, representing deductions that Rite Aid was authorized to take pursuant to the agreements executed by the parties. -4- COUNT I BREACH OF CONTRACT 17. Rite Aid incorporates by reference its responses to the preceding paragraphs as if fully set forth herein. 18. Denied. Rite Aid denies that MZB fully performed its work and satisfied all conditions precedent. By way of further response, a portion of the coffee supplied by MZB was unsaleable as determined by Rite Aid and as reflected in the deductions taken against MZB's account. That a portion of the coffee supplied by MZB was unsaleable is a decision that Rite Aid was authorized to unilaterally make pursuant to the agreements executed by the parties. 19. Admitted in part and denied in part. Rite Aid admits that it ordered, received and accepted coffee from MZB and sold the coffee in its stores. Rite Aid denies that all coffee was accepted without reservation. To the contrary, a portion of the coffee received by Rite Aid was unsalable, and at all times relevant to this dispute Rite Aid had reserved its right to return unsold or unsaleable product. 20. Denied. Rite Aid denies that it failed to pay MZB in full for the coffee it ordered, received, accepted and sold. To the contrary, Rite Aid paid all invoiced amounts minus only the amounts that Rite Aid was authorized to deduct pursuant to the agreements executed by the parties. The remaining averments of this paragraph constitute conclusions of law to which no response is required. To the extent that a response is deemed necessary, Rite Aid denies that it has breached any contract with MZB. By way of still further response, MZB is in breach of the parties' contract by failing to pay the negative account balance of $271,493.01 that is due and owing to Rite Aid. 21. Admitted in part and denied in part. Rite Aid admits, upon information and belief, that MZB believes that it has been damaged. Rite Aid denies, however, that it has -5- caused any damage to MZB. To the contrary, MZB has breached the contract between the parties by refusing to pay the negative account balance due and owing to Rite Aid of $271,493.01. COUNT II UNJUST ENRICHMENT 22. Rite Aid incorporates by reference its responses above as if fully set forth herein. 23. Admitted in part and denied in part. Rite Aid admits that it ordered, received and accepted coffee from MZB and sold the coffee in its stores. Rite Aid denies that all coffee was accepted without reservation. To the contrary, a portion of the coffee received by Rite Aid was unsalable, and at all times relevant to this dispute Rite Aid had reserved its right to return unsold or unsaleable product. 24. Denied as stated. Rite Aid is without knowledge sufficient to form a belief as to the expectations of MZB. Rite Aid denies the implication that it failed to compensate MZB according to the terms of the parties' relationship. By way of further response, Rite Aid expected to compensate MZB consistent with the written agreements executed by the parties and, in fact, compensated MZB consistent with the terms of those agreements. 25. Denied. Rite Aid denies that it has not fully paid MZB or provided just compensation for the coffee. To the contrary, Rite Aid has compensated MZB consistent with the agreements executed by the parties. 26. The averments of this paragraph constitute conclusions of law to which no response is required. To the extent that a response is deemed necessary, Rite Aid denies that it has been unjustly enriched or that MZB has not been fully compensated for the fair market value of the product order received, accepted and sold by Rite Aid. -6- WHEREFORE, Defendant Rite Aid Corporation demands: (a) dismissal of Complaint with prejudice; (b) an award of fees and costs to Rite Aid; and (c) such other relief as the Court deems just and proper. NEW MATTER 27. MZB's Complaint fails to state a claim upon which relief may be granted. 28. Rite Aid did not breach any duty, contractual or otherwise, allegedly owed, to MZB. 29. MZB's causes of action against Rite Aid may be barred by the equitable doctrines of estoppel, laches, and/or waiver. 30. Rite Aid is entitled to an equitable right of set-off. 31. MZB's claims are barred, in whole or in part, by the applicable statute of limitations. 32. MZB's claims are barred, in whole or in part, because Rite Aid complied with all applicable terms of the agreements between the parties. 33. MZB has not suffered compensable injuries or damages and, therefore, lack standing to assert any claim against Rite Aid. 34. Rite Aid does not waive any of the affirmative defenses in Pa.R.C.P. 1030 or any other affirmative defense and hereby gives notice that Rite Aid relies upon such other defenses as may become available or appear during the course of discovery proceeding in this case. Rite Aid reserves the right to amend this Answer to assert such defenses. WHEREFORE, Defendant Rite Aid Corporation demands: (a) dismissal of Complaint with prejudice; (b) an award of fees and costs to Rite Aid; and (c) such other relief as the Court deems just and proper. -7- COUNTERCLAIMS Relevant Facts 35. Rite Aid is a national drug store chain with its principal office in Cumberland County, Pennsylvania. 36. At all times relevant to this Counterclaim, MZB was involved in the sale of, inter alia, coffee. 37. Rite Aid and MZB entered into a Guaranteed Sales Agreement ("GSA") in which MZB "guarantee[d] the sale of [MZB's] product to Rite Aid at both Customer Service Centers (i.e., distribution centers) and retail locations." A true and correct copy of the GSA is attached hereto as Exhibit A. 38. Under the GSA, Rite Aid had the right to return all unsold product to MZB for a cash refund. 39. Specifically, the GSA provided that: If, at any time, Rite Aid determines in its sole discretion that [MZB's] product(s) performance continues to be unacceptable, Rite Aid will have the right to return at [MZB's] expense all unsold product(s) to [MZB's] facility in return for [MZB's] cash payment to Rite Aid for any products for which Rite Aid has paid, but have not been sold. See Exhibit A. 40. Rite Aid determined in its sole discretion that MZB's product performance was unacceptable and demanded a cash refund for products that had not been sold. 41. In breach of the GSA, MZB has failed and refused to guarantee the sale of its products. 42. In breach of the GSA, MZB has refused to refund Rite Aid the expense of all unsold product for which Rite Aid has paid but that has not been sold. -8- 43. On February 21, 2006, Rite Aid and MZB entered into a Returns Agreement that provided the manner in which MZB's products could be returned to MZB. A true and correct copy of the Returns Agreement is attached hereto as Exhibit B. 44. The Returns Agreement permitted MZB to direct how Rite Aid should handle damaged, defective, outdated and discontinued goods ("unsaleable"). See Exhibit B. 45. Pursuant to the Returns Agreement, MZB agreed to pay processing fees for unsaleable product. See Exhibit B. 46. MZB also decided that the unsalable products should be scanned and donated at a cost of $0.030 per item in addition to the other processing fees outlined in the Returns Agreement. See Exhibit B. 47. At various times during the parties' business relationship, MZB incurred fees pursuant to the Returns Agreement some of which MZB now refuses to pay. 48. During the parties' business relationship, Rite Aid and MZB also entered into other agreements regarding the marketing and promotion of MZB's Products in Rite Aid's stores. 49. Due to the fees and expenses charged pursuant to the agreements described above ("Fees"), MZB's account with Rite Aid has a negative balance of $87,670.51. A true and correct copy of MZB's statement of account is attached hereto as Exhibit C. 50. In addition to the negative account balance of $87,670.51 that MZB owes to Rite Aid, MZB also owes Rite Aid for outdated product for which MZB refuses to issue a cash refund as well as for product that Rite Aid had to markdown for sale. 51. Specifically, Rite Aid is in possession of $27,416.00 worth of coffee that expired before being sold. -9- 52. Under the GSA and Returns Agreement, MZB was obligated to accept the return of the expired product for a full cash refund. 53. MZB has refused to accept the return of the $27,416.00 worth of expired product and has refused to issue a cash refund to Rite Aid. 54. Because MZB refused to accept the return of the expired product, Rite Aid will be forced to incur the expense of disposing of it. 55. MZB's refusal to accept the return of the expired product was a breach of the agreements between the parties and caused damage to Rite Aid in an amount in excess of $27,416.00. These damages are not reflected in the statement of account that is attached hereto as Exhibit C. of its product. 56. Rite Aid has been further damaged by MZB's refusal to fund a markdown 57. As of March 16, 2014, Rite Aid was in possession of 49,332 units of MZB product at a cost to Rite Aid of $312,813. 58. Because MZB product performance continued to be unacceptable as of March 16, 2014, Rite Aid had a contractual right to return all 49,332 units of MZB product for a full cash refund of $312,813 pursuant to the GSA and Rite Aid Returns Agreements. See Exhibits A and B. 59. Because MZB had refused to ship additional product and had effectively ended its business relationship with Rite Aid, the 49,332 units of MZB product that were in Rite Aid's possession as of March 16, 2014, were marked down for sale instead of being returned to MZB. -10- 60. A markdown of product in situations such as this is customary in the industry. 61. The custom in the industry is that the vendor (L e. MZB) funds the markdowns at 50% of cost. 62. As a result, MZB should have funded $156,406.50 of the product markdown. 63. MZB refused to pay anything to Rite Aid to fund the markdown, and, as a result, Rite Aid incurred an additional $156,406.50 in damages. These damages are not reflected on the statement of account that is attached hereto as Exhibit C. 64. As of the date of the filing of this Counterclaim, MZB is in breach of the GSA, the Returns Agreement, and other related account contracts and agreements because it refuses to pay Rite Aid the negative balance on its account, refused to accept the return of expired product for a cash refund and failed to fund the product markdown. 65. In total, Rite Aid has been damaged in an amount in excess of $271,493.01 as a result of MZB's breaches of the parties' agreements. COUNT I BREACH OF CONTRACT 66. Rite Aid incorporates by reference its responses above as if fully set forth herein. 67. As noted above, Rite Aid and MZB entered into various valid and enforceable written agreements under which MZB agreed to pay certain Fees. 68. Rite Aid has performed all conditions precedent under all agreements with MZB. -11- 69. MZB is in breach of the GSA, the Returns Agreement and other related Agreements because it has failed to pay the negative balance on its account and has failed to accept the return of expired product for a cash refund. 70. As of the date of the filing of this Complaint, Rite Aid has suffered damages in excess of $115,086.51 as the result of MZB's breaches of various agreements between the parties. 71. MZB's unjustified refusal to issue a cash refund has caused ongoing damage to Rite Aid. WHEREFORE, Rite Aid requests judgment against MZB in amount in excess of $115,086.51, plus interest, costs and all other amounts deemed appropriate by the Court. COUNT II UNJUST ENRICHMENT 72. Rite Aid incorporates its responses above as if fully set forth herein. 73. In the event MZB contends that no enforceable contractual relationship exists between the parties, Rite Aid is entitled to recover the outstanding amount in order to prevent MZB from being unjustly enriched. 74. As is customary in the industry, MZB was to pay for certain Fees associated with the sale of its product and to guarantee the sale of that product. 75. MZB currently owes Rite Aid $87,670.51 in Fees. 76. Rite Aid has a reasonable expectation to receive the Fees incurred and to be able to return its product to MZB at MZB's cost. 77. MZB reasonably should have expected to pay the Fees as such Fees are customary in the industry. -12- Fees. 78. It would be inequitable for MZB to retain the benefit of the $87,670.51 in 79. MZB has also refused to accept the return of $27,416.00 worth of expired product that Rite Aid has been unable to sell. 80. Rite Aid has a reasonable expectation to be able to return expired product to MZB at MZB's cost. 81. MZB reasonably should have expected to accept the return of expired product at its own cost. 82. It would be inequitable for MZB to retain the benefit of the $27,416.00 of expired product that Rite Aid is unable to sell. 83. MZB has also refused to fund the markdown of 49,332 units of its product at a cost of $312,813. 84. As is customary in the industry when a vendor terminates a business relationship, the vendor funds a markdown of all remaining product at 50% of cost. 85. Rite Aid has a reasonable expectation that MZB will fund the markdown of the 49,332 units of product that were in Rite Aid's possession after MZB terminated the relationship with Rite Aid at 50% of cost. 86. MZB reasonably should have expected to fund the markdown of the 49,332 units of product at 50% of cost. 87. It would be inequitable for MZB to retain the full benefit of the $312,813 of product without funding a product markdown at 50% of cost. 88. As a result, MZB has been unjustly enriched in the additional amount of $156,406.50 -13- 89. In the event the contracts are deemed to be unenforceable, Rite Aid has no adequate remedy at law. 90. Rite Aid is entitled to collect the outstanding balance, plus interest, from MZB under the Doctrine of Unjust Enrichment. WHEREFORE, Rite Aid requests that judgment be entered against MZB in the amount of $271,493.01, plus interest, costs, and all other amounts deemed appropriate by the Court. Dated: September 5, 2014 Brian P. Downey (PA 59891) Tucker R. Hull (PA 306426) PEPPER HAMILTON LLP Suite 200 100 Market Street P.O. Box 1181 Harrisburg, PA 17108-1181 717.255.1155 Email: downeyb@pepperlaw. corn hullt@pepperlaw. corn Attorneys for Defendant -14- VERIFICATION Brian Shanahan signs this Verification on behalf of Rite Aid Corporation, and does hereby verify that the foregoing Answer With New Matter And Counterclaim was prepared with the assistance and advice of counsel, and in reliance upon counsel's advice; that the document, subject to inadvertent or undiscovered errors, is based upon and therefore limited by the records and information still in existence, presently recollected and thus far discovered in preparation of this document; and that subject to the limitations set forth herein, the statements contained in this document are true and correct to the best of her knowledge, information and belief. The language of the foregoing document is that of counsel. It is understood that the statements herein are made subject to the penalties of 18 Pa. C.S. § 4904 relating to unsworn falsification to authorities. Name: Brian Shanahan Title: Category Manager Date: August a6, 2014 Exhibit A RITE AID CORPORATION GUARANTEED SALES AGREEMENT Rite Aid will consider Vendor's product(s) for distribution and sale under the terms and conditions set forth in this Agreement. In consideration of Rite Aid's agreement to review a new entry into its mix, as well as in consideration of the mutual premises contained herein, the parties agree as follows: I. Vendor will guarantee the sale of Vendor's product(s) to Rite Aid at both Customer Service Centers (i.e. distribution centers) and retail locations. 2. During the first one hundred twenty (120) days, or such other period as Rite Aid may determine in its sole discretion (it being understood by Vendor that Rite Aid may terminate this Agreement in its sole discretion at any time, for any reason whatsoever) following the date if the Vendor's first delivery of product(s) to Rite Aid (the "Review Period"), Vendor's account will be on a review status to permit Rite Aid to assess the performance of the product(s). During the Review Period, Rite Aid will pay only for those product(s) that are actually sold, and Rite Aid's payment will be reduced by any and all cash discounts or other debit amounts (including, but not limited to, advertising, displays, markdowns and price protection) due to Rite Aid. If at the end of the Review Period, Rite Aid determines, in its sole discretion, that the Vendor's product(s) is not selling at an acceptable rate, then Rite Aid will have the right to (a) require Vendor to review and modify Vendor's marketing plan to ensure future success and (b) extend the due date of the original invoice submitted by Vendor. Rite Aid also has the right to require a cash payment, as described in paragraph (3) below. The foregoing rights are not exclusive. At the end of the Review Period, Rite Aid may terminate this Agreement, place the Vendor on Rite Aid's customary payment terms, or extend the Review Period as Rite Aid, in its sole discretion, so desires. 3. If at any time Rite Aid determines in its sole discretion that Vendor's product(s) performance continues to be unacceptable, Rite Aid will have the right to return at Vendor's expense all unsold product(s) to Vendor's facility in return for Vendor's cash payment to Rite Aid for any products for which Rite Aid has paid, but have not been sold. Vendor's payment to Rite Aid shall be made (a) by wire transfer of immediately available funds or certified check, and (b) no later than fifteen (15) days after Rite Aid has returned the product(s). Vendor acknowledges and agrees that in the event that any of Vendor's allowances are funded with "free product" from Vendor, that "free product" will be treated identically to product purchased from Vendor by Rite Aid. This includes,but is not limited to, returns of this product Vendor. 4. Upon settlement of Vendor's account, all outstanding invoices will be paid promptly, less any and all cash discounts or other debit amounts due to Rite Aid. Revised 3/0I/2004 5. The terms and conditions of this Agreement are in addition to, and in no way limit, Rite Aid's rights and remedies under Rite Aid's Vendor Profile, standard terms and conditions or purchase orders. In the event of inconsistency between the terms and conditions of the Agreement and any of the foregoing documents, this Agreement will govern. 6. The parties agree that Pennsylvania law governs this Agreement not withstanding its conflicts of law provisions. Any lawsuit brought with regard to this Guaranteed Sales Agreement will be venued in the Court of Common Pleas, Cumberland County, Pennsylvania 7. The parties specifically agree that 13 Pa. C.S.A. §2326 & 2327(b) are inapplicable and that Vendor will accept returned goods in their "as -is" condition. 8. All returns are at risk of vendor. 9. Vendor can not assign any product covered by this Agreement to any third party without the express written consent of a Vice President of Category Management. Rite Aid is enthusiastic about the opportunity to distribute product(s) into the marketplace. Rite Aid wishes you every success in your endeavor to provide a product that is unique. Please allow Rite Aid to assist you in your distribution needs by arranging for a duly authorized officer to sign and date this Agreement on behalf of your company, and return the executed letter to Rite Aid's Merchandising Department. Vendor: By:'...Tir1, Authorizer ature 21 0 C Date: Revised SI/0 I /2004 Glc# Title: C.O. 0. Exhibit B RITE AID RETURNS AGREEMENT Please note: A Separate Returns Agreement must be filled out for each vendor nu be OQC)Si.M8 iIY1,vac e x,(51 Company Name: Contact Name: WIVINOCEY l,Y (U S Nor' Phone # 7s1 t� I Fax # /C�` (t Vendor Number: 379 -IL5 E -Mail Address: IMP. Vkca\\NROA -)(3( L\cct Shipping Address: IOC, 7 Category Manager: Associate Category Manager: TERMS OF AGREEMENT: A. Unsaleable Merchandise 1. All vendors will be charged the following processing fees for damaged, defective, outdated, and discontinued goods. These fees are based on the findings from the Joint Industry Task Force Study (JIR): DPC (Direct Product Cost) Post Damage Ops through Scan: $0.085 $0.111 $0.101 $0.297 2. All vendors must determine a method of disposition for their unsaleable products. Based on the CODE/DESCRIPTIONS listed below, the vendor representative will check (X) the method his/her company has authorized Rite Aid to use. The additional charge, shown in () at the end of the description, will be added to the charges above. CODE DESCRIPTION (JIR COST) COPT Scan and disposition is left up to the discretion of Rite Aid ($0.020) DONA )( Scan and donate ($0.030) SHBK _ Scan and ship back to vendor ($0.180) OPEN RA# REQUIRED WITH THIS OPTION RA# NOTE: Any product remaining in the reclamation centers for 45 days from the date of invoice, without a Return Authorization Number, will be disposed of at the discretion of Rite Aid Corporation. Rite Aid Corporation will not entertain ANY requests for payback of product that falls into this category. All products will be billed at Rite Aid's current list cost + JIR billing factors (DPC, Post Damage Handling, RCC Charges, Disposition Charges) unless otherwise agreed to in writing by Rite Aid Corporation. Vendor billing is not to exceed 130% of Rite Aid's list cost. Rev 01/12/06 Rite Aid Returns Agreement Page 2 All changes to policies must be in writing to Rite Aid Corporation. Approved policy changes will take effect within 30 days following their approval. 5. All vendors will agree to forward a copy of their current national policy regarding reclamation to be reviewed by Rite Aid Corporation. This will be sent to: Rite Aid Corporation 30 Hunter Lane Camp Hill, PA 17011 Attention: Manager, Front End Returns 6. All damaged and outdated invoices are available through the Rite Aid Paperless Invoice System using the Carolina Supply Chain Services Website at www.carolinasupplvchainservices.com. Vendors should contact the Manager, Front End Returns, at 717-214-8832 to request setup of their Company's authorized user. (See Page 3) B. Recall Merchandise Please note: The dispositions on page 1 DO NOT apply to recalls. A separate agreement MUST be filled out for all recalls at the time the recall is being activated. This allows a vendor to have a eparate disposition on recalls than they have on damaged and outdated returns. 1. All recall Invoices are available through the Rite Aid Paperless Invoice System using the Carolina Supply Chain Services Website at www.carolinasupplvchainservices.com. Vendors should contact the Manager, Front End Returns, at 717-214-8832 to request setup of their Company's authorized user. (See Page 3) The signatures below by the appropriate Category Manager of Rite Aid Corporation and the vendor representative of said company denote their understanding and acceptance of the above agreement.06 ca, re (Vend Representative late Rev 01/12/06 Sig )/1 re (Authonzed y Rite Aid Corporation) Date Rite Aid Corporation Rite Aid Returns Agreement Page 3 NOTICE PLEASE BE ADVISED THAT AS OF MARCH 18, 2005, ALL INVOICING FOR DAMAGED AND OUTDATED AND RECALLED PRODUCT IS NOW PAPERLESS. ALL INVOICES WILL BE OBTAINED BY A VENDOR DESIGNATED REPRESENTATIVE THROUGH THE CAROLINA SUPPLY CHAIN SERVICES WEBSITE. PLEASE IDENTIFY THE CORRECT PERSON WITHIN YOUR COMPANY WHO REQUIRES THESE INVOICES, AND PROVIDE THE REQUESTED INFORMATION BELOW. ALL APPROPRIATE INFORMATION FOR A CCESS TO THE CSCS WEBSITE WILL BE SENT TO THE DESIGNATED INDIVIDUAL. All information relating to the Carolina Supply Chain Services Website should be sent to the following individual: PLEASE PRINT: r7 3iM AM RA6 .)5A Vendor Name P.Q. BOX Vendor Number o t< VA Q23'3 LI Address "City State i Zip -}53 - S�3`� " `7 I Z -L `ncyavi e _Sk),)4 Lt/id Contact Name SUK11t -1 1 (01 P rl 213- USIA •Cort Phone E-mail Address �(11,,,k.3ot- Authorized by (print name)` iti/a Date THIS FORM MUST ACCOMPANY THE RITE AID RETURNS AGREEMENT FOR DAMAGED AND OUTDATED PRODUCT Rev 01/12/06 Exhibit C RA Books Unsaleables Unsaleables Unsaleables Coupons Markdowns Connolly Post Audit Claim Unsaleables Unsateables Unsaleables Connolly Post Audit Claim Unsaleables Unsaleables Unsaleables Unsaleables Unsaleables Unsaleables Coupons Unsaleables Unsaleables Unsateables Markdowns Markdowns Unsaleables Unsaleables Unsaleables Unsateables Unsaleables Unsaleables MASSIMO ZANETTI BEVERAGE USA V#33895 Statement of the Account as of 5-20-14 y y 'Dat► �ueAaEe: ;Gln sAmt °x" 1G9_# rcAmtMkicAmt' # Ai»t x`_ 11 0082863446 10/18/2013 10/21/2013 $ (4,342.98) $ $ $ $ $ (4,342.98) D088127452 10/18/2013 10/21/2013 5 (2,769.68) $ $ $ - $ $ (2,769.68) 0090155445 10/18/2013 10/21/2013 $ (4,401.96) $ - $ - $ $ $ (4,401.96) NC3389508 10/26/2013 10/232013 $ (16.45) 8 S - $ $ - $ (16.45) 0548752 10/24/2013 11/12/2013 $ (10,096.25) $ $ - $ - $ - $ (10,096.25) CC132187 11/202013 11/20/2013 $ (1,025.37) $ - S $ - S - $ (1,025.37) D084347446 11/222013 11/25/2013 $ (4,179.98) $ $ - $ $ S (4,179.98) D689787452 11/22/2013 11252013 $ (4,292.78) $ - $ - $ - S - $ (4,292.78) D091868445 11/22/2013 11252013 S (5,928.12) $ $ - $ - $ - $ (5.928.12) CC132086 12/4/2013 12/42013 $ (502.46) $ - $ $ - $ - $ (502.46) D085937446 12/202013 12/23/2013 $ (3,333.45) $ $ - S S - $ (3,333.45) 0091580452 12/20/2013 12/23/2013 $ (1,522.86) $ - $ $ $ - S (1,522.86) 0093542445 12/20/2013 12/23/2013 $ (5,772.92) $ - $ $ - 5 - $ (5,772.92) D087352446 1/17/2014 1202014 $ (1,301.72) $ - $ - $ S - $ (1,301.72) D093247452 1/17/2014 1/202014 $ (2,134.02) S - $ - $ - $ $ (2.134.02) D095176445 1/17/2014 1/20/2014 $ (2,570.97) $ - S - $ - 5 - 5 (2,570.97) NC3389511 1/25/2013 1/22/2014 $ (26.47) $ $ - S - $ - S (26.47) D088727446 2/21/2014 2/24/2014 5 (3,577.03) $ $ $ - S S (3,577.03) 0094849452 2/21/2014 2242014 $ (7,668.83) $ - $ - $ S - $ (7,668.83) 0096867445 2212014 2242014 $ (4,479.78) S - $ - $ $ $ (4,479.78) 0516585 3/7/2014 3/7/2014 S (6,571.95) $ $ - $ - S S (6,571.95) 0582092 3/72014 3/7/2014 $ (54.90) S - $ - S - $ - $ (54.90) D090278446 3212014 3/24/2014 $ (1,299.82) $ $ $ - $ 5 (1,299.82) D096625452 3/21/2014 3/24/2014 S (1,729.28) $ - $ - $ $ - $ (1,729.28) 0098482445 3/21/2014 3/242014 $ (2,430.36) 5 - $ - S - $ S (2,430.36) 0091801446 4/18/2014 4/212014 $ (882.95) $ - $ - $ S - $ (882.95) 0098391452 4/18/2014 4/21/2014 $ (2,104.95) 5 - $ S - S S (2.104.95) 0100113445 4/18/2014 4/21/2014 $ (2,652.22) $ - $ $ - $ $ (2,652.22) Total: $ (87,670.51) $ - S - $ $ - $ (87,670.51) As of 5-20-14 Page 1 of 1 CERTIFICATE OF SERVICE I hereby certify that on September 5, 2014, a copy of the foregoing document was served by United States mail, first class postage prepaid, addressed as follows: John B. Zonarich, Esq. SkarlatosZonarich LLC 17 South Second Street, 6th Floor Harrisburg, PA 17101 Attorney for Plaintiff Massimo Zanetti Beverage USA, Inc. Tucker R. Hull (63915) MASSIMO ZANETTI BEVERAGE USA, INC., a Delaware corporation, Plaintiff, vs. RITE AID CORPORATION, a Delaware corporation, : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA : CIVIL ACTION—LAW : NO.: 14-4393 Civil Term Defendant. : JURY TRIAL DEMANDED NOTICE TO PLEAD C) -1; Coe) ri -- zrn • `cam cr,�-- N C) d . W —4 C) r_ .6 y ."'7`1 Q Cts, v 1-j' cp r -< ro You are hereby notified to file a written response to the enclosed New Matter within twenty (20) days from service hereof or a judgment may be enter -d against you. Sk 1,. Dated: September 22, 2014 By: •:1. osZ rich LLC Jo CAT ' '.+ , Esq. Ident ication N v . 19632 Kathy Speaker acNett, Esq. Identification No. 35529 John B. Zonarich, Esq. Identification No. 79989 Brian W. Mains, Esq. Identification No. 310479 Skarlatos & Zonarich Building 17 South Second Street, 6th Floor Harrisburg, PA 17101 Telephone 717.233.1000 Facsimile: 717.233.6740 Email: jrz@skarlatoszonarich.com ksm@skarlatoszonarich.com jbz@skartatoszonarich:com bmains@skarlatoszonarich.com Attorneys, for Plaintiff Massimo Zanetti Beverage USA, Inc. SKARLATOSZONARICH LLC John R. Zonarich, Esq. Kathy Speaker MacNett, Esq. John B. Zonarich, Esq. Brian W. Mains, Esq. Skarlatos & Zonarich Building 17 South Second Street, 6th Floor Harrisburg, Pennsylvania 17101 Telephone: 717. 233.1000 Fax: 717.233.6740 Email: jrz@skarlatoszonarich.com ksm@skarlatoszonarich.com jbz@skarlatoszonarich.com bmains@skarlatoszonarich.com Attorneys for Plaintiff Massimo Zanetti Beverage USA, Inc. MASSIMO ZANETTI BEVERAGE USA, INC., a Delaware corporation, Plaintiff, vs. RITE AID CORPORATION, a Delaware corporation, Defendant. : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA : CIVIL ACTION—LAW : NO.: 14-4393 Civil Term : JURY TRIAL DEMANDED REPLY TO AMENDED ANSWER WITH NEW MATTER AND COUNTERCLAIM NOW COMES Plaintiff, Massimo Zanetti Beverage USA, Inc. ("MZB"), by and through its attorneys, SkarlatosZonarich LLC, to reply to the Amended Answer with New Matter and Counterclaim of Defendant Rite Aid Corporation ("Rite Aid"): REPLY TO NEW MATTER 27. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required, MZB denies that its Complaint fails to state a claim upon which relief may be granted. By way of further response, paragraphs 1-26 of MZB's Complaint are incorporated by reference as if -1- fully set forth herein. 28. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required, Rite Aid did breach certain duties owed to MZB as is more specifically set forth in MZB's Complaint. Paragraphs 1-26 of MZB's Complaint are incorporated by reference as if fully set forth herein. 29. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required, MZB denies that its causes of action against Rite Aid may be barred by the equitable doctrines of estoppel, laches or waiver. 30. Denied. The averment of this paragraph states a conclusion of law to which no response is required. Accordingly, said averment is denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required, MZB denies that Rite Aid is entitled to an equitable right of set-off. 31. Denied. The averment of this paragraph states a conclusion of law to which no response is required. Accordingly, said averment is denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required, MZB denies that its claims are barred, in whole or in part, by the applicable statute of limitations. 32. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required, Rite Aid -2- did not comply with all applicable terms of the agreements between the parties as is more specifically set forth in MZB's Complaint. Paragraphs 1-26 of MZB's Complaint are incorporated by reference as if fully set forth herein. 33. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required, MZB suffered compensable injuries and damages as is more specifically set forth in its Complaint. Paragraphs 1-26 of MZB's Complaint are incorporated by reference as if fully set forth herein. 34. The Pennsylvania Rules of Civil Procedure concerning affirmative defenses, including Pa.R.C.P. 1030, speak for themselves. WHEREFORE, Plaintiff Massimo Zanetti Beverage USA, Inc. claims of Defendant Rite Aid Corporation a sum in excess of the limits of mandatory arbitration in Cumberland County, Pennsylvania, together with lawful interest thereon, attorney's fees, costs of suit and any other relief that the court may deem necessary or appropriate. REPLY TO COUNTERCLAIMS Relevant Facts 35. Admitted. 36. Admitted. 37. Admitted in part and denied in part. It is admitted only that Rite Aid and MZB entered into a Guaranteed Sales Agreement ("GSA") and that a true and correct copy of the GSA is attached to Rite Aid's "Amended Answer with New Matter and Counterclaim" as Exhibit A. The remainder of the averment is denied. The GSA is a written document that -3- speaks for itself and any characterization inconsistent therewith is strictly denied. By way of further response, it is denied that the GSA controls or is applicable to the entire relationship and all dealings between the parties. 38. Denied as stated. The GSA is a written document that speaks for itself and any characterization inconsistent therewith is strictly denied. By way of further response, it is denied that the GSA controls or is applicable to the entire relationship and all dealings between the parties. 39. Admitted in part and denied in part. It is admitted only that the quoted sentence appears in the GSA. Since the quoted sentence is only one sentence of many in the GSA, the GSA must be read in its entirety and any characterization inconsistent therewith is strictly denied. By way of further response, it is denied that the GSA controls or is applicable to the entire relationship and all dealings between the parties. 40. Denied as stated. Rite Aid did not demand a cash refund from MZB for products that had not been sold. In further response, while MZB is without knowledge or information sufficient to form a belief as to what Rite Aid "determined in its sole discretion", at no time did Rite Aid communicate to MZB that MZB's performance was unacceptable; accordingly, this averment is denied. 41. Denied as stated. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required, the GSA is a written document that speaks for itself and any characterization inconsistent therewith is strictly denied. By way of further response, it is denied that the GSA controls or is applicable to the entire relationship and all dealings between the parties. -4- 42. Denied as stated. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required, the GSA is a written document that speaks for itself and any characterization inconsistent therewith is strictly denied. By way of further response, it is denied that the GSA controls or is applicable to the entire relationship and all dealings between the parties. 43. Admitted in part and denied in part. It is admitted only that Rite Aid and MZB entered into a Returns Agreement and that a true and correct copy of the Returns Agreement is attached to Rite Aid's "Amended Answer with New Matter and Counterclaim" as Exhibit B. The remainder of the averment is denied. The Returns Agreement is a written document that speaks for itself and any characterization inconsistent therewith is strictly denied. By way of further response, it is denied that the Returns Agreement controls or is applicable to the entire relationship and all dealings between the parties. 44. Denied as stated. The Returns Agreement is a written document that speaks for itself and any characterization inconsistent therewith is strictly denied. By way of further response, it is denied that the Returns Agreement controls or is applicable to the entire relationship and all dealings between the parties. 45. Denied as stated. The Returns Agreement is a written document that speaks for itself and any characterization inconsistent therewith is strictly denied. By way of further response, it is denied that the Returns Agreement controls or is applicable to the entire relationship and all dealings between the parties. 46. Denied as stated. The Returns Agreement is a written document that speaks for itself and any characterization inconsistent therewith is strictly denied. By way of further -5- response, it is denied that the Returns Agreement controls or is applicable to the entire relationship and all dealings between the parties. 47. Denied as stated. The averments of this paragraph are unintelligible as written. In further response, and to the extent that this paragraph contains one or more typographical errors (including but not limited to the averment that MZB incurred fees), the averment is denied. MZB is without knowledge or information sufficient to form a belief as to what fees are referred to; therefore, MZB denies the same. By way of further response, it is denied that the Returns Agreement controls or is applicable to the entire relationship and all dealings between the parties. 48. Denied as stated. MZB is without knowledge or information sufficient to form a belief as to what "other agreements regarding the marketing and promotion of MZB's Products in Rite Aid's stores" are referred to; therefore, MZB denies the same. 49. Denied as stated. MZB is without knowledge or information sufficient to form a belief as to what "fees and expenses" and also what "agreements" are referred to; therefore, MZB denies the same. 50. Denied as stated. MZB's reply to Rite Aid's paragraph 49 is incorporated as if fully set forth herein. Additionally, MZB is without knowledge or information sufficient to foul' a belief as to what "outdated product" and also what "product that Rite Aid had to markdown for sale" is referred to; therefore, MZB denies the same. 51. Denied as stated. MZB is without knowledge or information sufficient to form a belief as to what is in Rite Aid's possession; therefore, MZB denies the same. In further response, MZB's replies to Rite Aid's paragraphs 49 and 50 are incorporated as if fully set forth herein. -6- 52. Denied as stated. The GSA and the Returns Agreement are written documents that speak for themselves and any characterization inconsistent therewith is strictly denied. In further response, MZB's reply to Rite Aid's paragraph 51 is incorporated as if fully set forth herein. In still further response, it is denied that the GSA and Returns Agreement control or are applicable to the entire relationship and all dealings between the parties. 53. Denied. MZB did not refuse to accept the return of an alleged $27,416.00 worth of expired product and MZB did not refuse to issue a cash refund to Rite Aid. In further response, Rite Aid never attempted to return an alleged $27,416.00 worth of expired product to MZB and, similarly, Rite Aid did not request a cash refund from MZB. 54. Denied as stated. MZB's replies to Rite Aid's paragraphs 51 through 53 are incorporated as if fully set forth herein. By way of further response, MZB is without knowledge or information sufficient to form a belief as to whether Rite Aid will be "forced" and therefore MZB denies the same. 55. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required, MZB is without knowledge or information sufficient to form a belief as to what "agreements between the parties" Rite Aid refers and therefore, MZB denies the same. In further response, it is denied that the GSA and Returns Agreement control or are applicable to the entire relationship and all dealings between the parties. In still further response, MZB's replies to Rite Aid's paragraphs 51 through 54 are incorporated as if fully set forth herein. 56. Denied. MZB is without knowledge or information sufficient to form a belief as to what "product" the alleged refusal refers to, and therefore, MZB denies the same. In -7- further response, MZB denies that an obligation to markdown its product existed. 57. Denied. MZB is without knowledge or information sufficient to form a belief as to the "units of MZB product" in Rite Aid's possession, or the "cost to Rite Aid"; therefore, MZB denies the same. 58. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required, the GSA and Returns Agreement are written documents that speak for themselves, and any characterization inconsistent therewith is strictly denied. In further response, it is denied that the GSA and Returns Agreement control or are applicable to the entire relationship and all dealings between the parties. 59. Denied. MZB denies that it "had effectively ended its business relationship with Rite Aid." MZB's reply to Rite Aid's paragraph 57 is incorporated as if fully set forth herein. By way of further reply, MZB is without knowledge or information sufficient to form a belief as to "units of MZB product" in Rite Aid's possession and whether they "were marked down for sale"; therefore, MZB denies the same. 60. Denied as stated. Markdowns of a product by a retailer such as Rite Aid are not considered customary in the industry but rather, if they occur, are determined by a retailer on a case by case basis. 61. Denied as stated. The participation by a vendor in a retailer's markdowns, if they occur, and the level of any such participation, are negotiated on a case by case basis between the vendor and the retailer. 62. Denied as stated. MZB's replies to Rite Aid's paragraphs 60 and 61 are -8- incorporated as if fully set forth herein. By way of further reply, Rite Aid and MZB did not negotiate a $156,406.50 contribution or other participation by MZB in Rite Aid's product markdown, if it occurred. 63. Denied as stated. MZB's replies to Rite Aid's paragraphs 60 through 62 are incorporated as if fully set forth herein. 64. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required, the GSA and Returns Agreement are written documents that speak for themselves, and any characterization inconsistent therewith is strictly denied. In further response, MZB is without knowledge or information sufficient to form a belief as to "other related account contracts and agreements" and therefore, MZB denies the same. In still further response, it is denied that the GSA and Returns Agreement control or are applicable to the entire relationship and all dealings between the parties. 65. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. COUNT I BREACH OF CONTRACT 66. MZB incorporates by reference each of the foregoing paragraphs as if fully set forth herein. 67. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required, MZB is -9- without knowledge or information sufficient to form a belief as to what "various valid and enforceable written agreements" are referred to; therefore, MZB denies the same. 68. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required, MZB is without knowledge or information sufficient to form a belief as to what "conditions precedent" under what "agreements" are referred to; therefore, MZB denies the same. 69. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required, MZB is without knowledge or information sufficient to form a belief as to what "other related Agreements" are referred to; therefore, MZB denies the same. In further response, it is denied that the GSA and Returns Agreement control or are applicable to the entire relationship and all dealings between the parties. In still further response, Rite Aid never attempted to return "expired product" to MZB and, similarly, Rite Aid never requested or otherwise sought "a cash refund" from MZB. 70. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required, MZB is without knowledge or information sufficient to form a belief as to what "various agreements between the parties" are referred to; therefore, MZB denies the same. 71. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if -10- admissible, is demanded at time of trial. WHEREFORE, MZB demands: (a) dismissal of Rite Aid's Counterclaims with prejudice; (b) an award of fees and costs to MZB; and (c) such other relief as the Court deems just and proper. COUNT II UNJUST ENRICHMENT 72. MZB incorporates by reference each of the foregoing paragraphs as if fully set forth herein. 73. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. 74. Denied as stated. The averments of this paragraph are unintelligible as written. Accordingly, MZB is without knowledge or information sufficient to form a belief as to what Fees or customs are referred to; therefore, MZB denies the same. 75. Denied. MZB does not owe Rite Aid; to the contrary, Rite Aid owes MZB amounts as set forth in MZB's Complaint. 76. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. 77. Denied as stated. The averments of this paragraph are unintelligible as written. Accordingly, MZB is without knowledge or information sufficient to form a belief as to what Fees or customs are referred to; therefore, MZB denies the same. 78. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if -11- admissible, is demanded at time of trial. 79. Denied. MZB did not refuse to accept the return of $27,416.00 worth . of product that Rite Aid was allegedly unable to sell. In further response, Rite Aid did not make such a demand, and therefore, there was no refusal by MZB. 80. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required, given the circumstances as set forth in MZB's Complaint, any such expectation is unreasonable. 81. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required, given the circumstances as set forth in MZB's Complaint, any such expectation is unreasonable. 82. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. 83. Denied. MZB's replies to Rite Aid's paragraphs 59 through 63 are incorporated as if fully set forth herein. 84. Denied. MZB's replies to Rite Aid's paragraphs 59 through 63 are incorporated as if fully set forth herein. 85. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required MZB's replies to Rite Aid's paragraphs 59 through 63 are incorporated as if fully set forth herein. -12- 86. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required MZB's replies to Rite Aid's paragraphs 59 through 63 are incorporated as if fully set forth herein. 87. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required MZB's replies to Rite Aid's paragraphs 59 through 63 are incorporated as if fully set forth herein. 88. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required MZB's replies to Rite Aid's paragraphs 59 through 63 are incorporated as if fully set forth herein. 89. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. To the extent that a response is required, MZB is without knowledge or information sufficient to foim a belief as to what "contracts" are referred to and, in addition, Rite Aid has no need of any remedy, at law or otherwise, as it has suffered no actionable harm. 90. Denied. The averments of this paragraph state conclusions of law to which no response is required. Accordingly, said averments are denied and strict proof thereof, if admissible, is demanded at time of trial. WHEREFORE, MZB demands: (a) dismissal of Rite Aid's Counterclaims with prejudice; (b) an award of fees and costs to MZB; and (c) such other relief as the Court deems -13- just and proper. NEW MATTER 91. Rite Aid's Counterclaims fail to state claims upon which relief may be granted. 92. MZB did not breach any duty, contractual or otherwise, allegedly owed, to Rite Aid. 93. Rite Aid's causes of action against MZB are barred by the equitable doctrines of estoppel, laches, and/or waiver. 94. MZB is entitled to an equitable right of set-off. 95. Rite Aid' s claims are barred, in whole or in part, by the applicable statute of limitations. 96. Rite Aid's claims are barred, in whole or in part, because MZB complied with all applicable terms of the agreements between the parties. 97. Rite Aid has not suffered compensable injuries or damages and, therefore, lacks standing to assert any claim against MZB. WHEREFORE, MZB demands: (a) dismissal of Rite Aid's Counterclaims with prejudice; (b) an award of fees and costs to MZB; and (c) such other relief as the Court deems just and proper. Dated: September 22, 2014 By: -14- Respectfully submitted, Skarlat sZonch LLC Jo o c Esq. Iden 'icationN19632 Kathy Speaker : cNett, Esq. Identification No. 35529 John B. Zonarich, Esq. Identification No. 79989 Brian W. Mains, Esq. Identification No. 310479 Skarlatos & Zonarich Building 17 South Second Street, 6th Floor Harrisburg, PA 17101 Telephone 717.233.1000 Facsimile: 717.233.6740 Email: jrz@skarlatoszonarich.com ksm@skarlatoszonarich.com jbz@skarlatoszonarich.com bmains@skarlatoszonarich.com Attorneys for Plaintiff Massimo Zanetti Beverage USA, Inc. -15- VERIFICATION I, Clay Dockery, Division Vice President Corporate Brands, hereby certify that the facts set forth in the preceding document are based upon information which I have furnished to counsel, as well as upon information which has been gathered by counsel and/or others acting on my behalf in this matter. The language in the document is that of counsel and not my own. I have read the document, and to the extent it is based upon information which I have given to counsel, it is true and correct to the best of my knowledge, information and belief. To the extent that the content of the document is that of counsel, I have relied upon counsel in making this Verification. I hereby acknowledge that the facts set forth in the aforesaid document are made subject to the penalties of 18 Pa.C.S.A. §4904 relating to unsworn falsification to authorities. Dated: September ?,,2014 By: Clay Do .l'cery, Division Vice Pr ;:'dent Corporate Brands Massimo Zanetti Beverage USA, Inc. CERTIFICATE OF SERVICE I, Sherry L. Devlin, an employee with the law firm of SkarlatosZonarich LLC, hereby certify that the foregoing REPLY TO AMENDED ANSWER WITH NEW MATTER AND COUNTERCLAIM was served upon the person(s) indicated below through the United States mail, first class postage prepaid, unless otherwise noted: Date: September 22, 2014 Tucker R. Hull, Esquire PEPPER HAMILTON LLP 100 Market Street, Suite 200 P.O. Box 1181 Harrisburg, PA 17108-1181 Attorneys for Defendants cherry L. Dev n Legal Assistant Kt MASSIMO ZANETTI BEVERAGE USA, INC., a Delaware corporation, Plaintiff, v. RITE AID CORPORATION, a Delaware corporation, Defendant. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, •PENNRYL,V`ANJA CIVIL ACTION — LAW NO.: 14-4393 JURY TRIAL DEMANDED c-� –4 CA) -v RITE AID'S ANSWER TO PLAINTIFF'S NEW MATTER TO COUNTERCLAIM Defendant Rite Aid Corporation ("Rite Aid"), by and through its undersigned counsel, hereby files this Answer to Plaintiffs New Matter to Counterclaim and states as follows: 91. response is required. 92. response is required. 93. response is required. 94. response is required. 95. response is required. 96. ANSWER TO COUNTERCLAIM Denies. Rite Aid denies Paragraph 91 as a conclusion of law to which no Denies. Rite Aid denies Paragraph 92 as a conclusion of law to which no Denies. Rite Aid denies Paragraph 93 as a conclusion of law to which no Denies. Rite Aid denies Paragraph 94 as a conclusion of law to which no Denies. Rite Aid denies Paragraph 95 as a conclusion of law to which no Denies. Rite Aid denies Paragraph 96 as a conclusion of law to which no response is required. By way of further response, MZB is in breach of the GSA and the Returns 4 Agreement because it has failed to pay the negative balance on its account and has failed to accept the return of expired product for a cash refund. 97. Denies. Rite Aid denies Paragraph 97 as a conclusion of law to which no response is required. By way of further response, Rite Aid has been damaged in an amount in excess of $271,493.01 as a result of MZB's breaches of the agreements between the parties. WHEREFORE, Rite Aid requests that judgment be entered against MZB in the amount of $271,493.01, plus interest, costs, and all other amounts deemed appropriate by the Court. October 13, 2014 Brian P. Downey (PA 59891) Tucker R. Hull (PA 306426) PEPPER HAMILTON LLP Suite 200 100 Market Street P.O. Box 1181 Harrisburg, PA 17108-1181 717.255.1155 866.422.1305 (direct fax) downeyb@pepperlaw.com hullt@pepperlaw.com Attorneys for Defendant, Rite Aid Corporation -2- p CERTIFICATE OF SERVICE I hereby certify that on October 13, 2014, a copy of the foregoing document was served by United States mail, first class postage prepaid, addressed as follows: John B. Zonarich, Esq. SkarlatosZonarich LLC 17 South Second Street, 6th Floor Harrisburg, PA 17101 Attorney for Plaintiff Massimo Zanetti Beverage USA, Inc. Tucker R. Hull (63915) -3-