The URL can be used to link to this page

Home My WebLink About01-5053 Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAMAR L. LIGHT, v. Docket No. 0 J - 5053 C, V ~ \ SMITH LAND & IMPROVEMENT CORPORA nON and BALD EAGLE INSVRANCE CO., LTD., Defendants CIVIL ACTION - LAW ACTION FOR DECLARATORY JUDGMENT NOTICE YOU HAVE BEEN SVED IN COVRT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment maybe 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 ALA WYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Cumberland County Bar Association 2 Liberty Avenue Carlisle, P A 17013 (717) 249-3166 Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAMAR L. LIGHT, v. Docket No. SMITH LAND & IMPROVEMENT CORPORATION and BALD EAGLE INSURANCE CO., LTD., Defendants CIVIL ACTION - LAW ACTION FOR DECLARATORY JUDGMENT NOTICIA Le han demandado a usted en la corte. Si usted qui ere defenderse de estas demandas expuestas en las paginas siguientes, usted tiene viente (20) dias de plazo al partir de la fecha de la demanda y la notificacion. Usted Debe presentar una apariencia escrita 0 en persona 0 por abogado y archivar en la corte en forma escrita sus defensas 0 sus objeciones alas demandas en contra de su persona. Sea avisado que si usted no se defiende, la corte tomara medidas y puede entrar una orden contra usted sin previo a viso 0 notificacion, y por cualquier queja 0 alivio que es pedido en la peticion de demanda. Usted puede perder dinero 0 sus propiedades 0 otros derechos importantes para usted. LLEVE EST A DEMANDA A UN ABODAGO INMEDIA T AMENTE. SI NO TIENE ABOGADO 0 SI NO TIENE EL DINERO SUFICIENTE DE P AGAR TAL SERVICIO, V A Y A EN PERSONA 0 LLAME POR TELEFONO A LA OFICINA CUY A DIRECCION SE ENCUENTRA ESCRIT A ABAJO PARA A VERIGUAR DONDE SE PUEDE CONSEGUIR ASISTENCIA LEGAL. Cumberland County Bar Association 2 Liberty Avenue Carlisle, P A 17013 (717) 249-3166 Plaintiff : IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAMAR L. LIGHT, v. Docket No. d \ - ,t::j.)53 SMITH LAND & IMPROVEMENT CORPORATION and BALD EAGLE INSURANCE CO., LTD., Defendants CIVIL ACTION - LAW ACTION FOR DECLARATORY JUDGMENT COMPLAINT I. Plaintiff, Lamar Light (hereinafter, "Light"), is an adult individual who resides at 1528 High Meadow Lane, Mechanicsburg, Cumberland County, Pennsylvania 17055. 2. Defendant, Smith Land & Improvement Corporation (hereinafter, "Smith") is a Delaware corporation which operates a place of business at 2001 State Road, Camp Hill, Cumberland County, Pennsylvania 17001-8134. 3. Upon information and belief, it is averred that Defendant, Bald Eagle Insurance Company Ltd. (hereinafter, "Bald Eagle"), is a Pennsylvania corporation, which operates a place of business at 2001 State Road, Camp Hill, Pennsylvania 17001. 4. Defendant Bald Eagle is a wholly owned subsidiary of Defendant Smith. 5. From 1986 through 2000, Light was employed by Smith as a key executive officer and Chief Operations Officer of one of Smith's primary divisions. 6. Light owned a substantial amount of common stock of Defendant Smith, which was subject to the Stockholder's Agreement, hereinafter identified. 7. On June 27, 1998, Smith and Light entered into an "Amended Stockholders Agreement" which amended the terms of an earlier Stockholder's Agreement. A true and correct copy ofthe said Amended Stockholders Agreement is attached hereto, marked as Exhibit "A", and made a part hereof by reference thereto. 8. Said Amended Stockholders Agreement was thereafterratified by Smith's Board of Directors on August 6, 1998. 9. Said Amended Stockholders Agreement does provide that upon termination of the employment relationship by either party, Smith is obligated to purchase the shares held by Light. 10. On October 31, 2000, in response to comments from Mr. Richard Jordan, Light advised Richard Jordan, the Chief Executive Officer of Smith, that he would resign due to professional differences with other Smith management. 11. Prior to this discussion, Light spoke to Robert C. Sherwood -- Smith's Vice President and Chief Financial Officer - who assured Light that Smith had enjoyed a successful business year and that if Light were to resign, the book value / acquisition price of Light's Class "B" Common Stock would assuredly reach the $4,000,000.00 ceiling provided for in the Amended Stockholders Agreement. 12. Sherwood was aware, or should reasonably have been aware, that Light would rely upon these assurances in reaching his decision to resign. 2 13. In point of fact, on or about January 2,2001, at the request of Smith, Light did deliver his stock certificates to Smith and, pursuant to the above-excerpted provisions of the Amended Stockholders Agreement, he received a Judgment Promissory Note evidencing a principal payment amount of $4,000,000.00. A true and correct copy of the said Note is attached hereto as Exhibit "B". 14. The Judgment Promissory Note was signed by Smith/Bald Eagle, and Light had no participation whatsoever with regard to the language or form of said Note. IS. The Judgment Promissory Note identifies the Defendant Bald Eagle as the maker ofthe Note because Defendant Smith elected to assign its right and obligation to acquire Light's stock to Bald Eagle (as is provided for under the Amended Stockholders Agreement), which is a wholly owned subsidiary of Smith. See (Exhibit "B".) 16. When the Judgement Promissory Note, previously identified as Exhibit "B", was provided to Light, no agent, servant or employee of either Defendant advised Light that the Note was conditional or subject to any future adjustment, review or alteration based upon subsequent financial reports whatsoever. 17. In point of fact, initial payment was made pursuant to the terms of the said Note. 18. On or about April 11 , 2001, Smith advised Light that it believed its initial financial estimates were in error and that the true book value of his stock - according to the Auditors' report- totaled $ 3, 415,094.00. Light was given financial reports, but no further written explanation. 3 19. Smith then requested that Light accept a revised Judgment Promissory Note evidencing a principal sum debt in the amount set forth in the preceding paragraph, and that he return the original Judgment Promissory Note, previously identified as Exhibit "B," to Smith. A true and correct copy ofthe purportedly "revised" Promissory Note is attached hereto and marked as Exhibit "C". 20. Smith further advised that it was repudiating its obligations under the original Note regardless of whether Light returned it to Smith. 21. On April 12, 2001, Smith breached the terms of the original January 2, 2001 Judgment Promissory Note by remitting to Light a check in the amount of $48, 118.00, which represented a quarterly payment based upon a "revised" principal sum of$3, 415,094.00 (see Exhibit "C") rather than the principal sum correctly identified in the original Promissory Note, identified previously as Exhibit "B". 22. Light believes and therefore avers that the original Judgment Promissory Note is enforceable, and that he is therefore entitled to receive the entire principal sum of $4,000,000.00, plus interest over time as is Smith's obligation under the January 2,2001 Note. See Exhibit "8". 23. The Pennsylvania Declaratory Judgment Act authorizes this Court to determine the validity of any written contract or instrument and to declare the rights, status or other legal relations of the parties bound under its terms either before or subsequent to a breach thereof. See 42 Pa.c.s. ~ 7533. 4 WHEREFORE, Plaintiff, Lamar Light, requests that this Honorable Court issue a declaration that the January 2,2001 Judgment Promissory Note is a legally binding document which obligates the Defendants to pay, as provided, the principal sum of $4,000,000.00 plus interest to Light; and that said Note also authorizes Light to confess judgment, accelerate payment of those sums and collect attorneys' fees if the Defendants fail to comply with their obligations under the Note, and an order awarding costs and any other remedy this Court deems just and appropriate. Respectfully Submitted, CALDW LL & KEARNS Date:\k{~ 2-4 \L~I 01-283/29133 James . I Attorn y J.D. Dougla E. erman Attorney J.D. No. 86569 3631 North Front Street Harrisburg, Pennsylvania 17110 (717) 232-7661 Attorneys for Plaintiff. Lamar Light 5 VERIFICATION I, Lamar Light, verify that the averments in the foregoing Complaint are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. 94904, relating to unsworn falsification to authorities. By ~ ;{ ~ ~/6-22-9B/t9S/123551/#1 AMENDED STOCKHOLDERS AGREEMENT THIS is an Amendment, dated June )..7 1998, by and between L. L. Light, an individual (hereinafter "Stockholder"), and Smith Land & Improvement Corporation, a Delaware corporation (hereinafter "Corporation"), to an Agreement dated August 1, 1986, also between the Stockholder and the Corporation. WITNESSETH: WHEREAS, Stockholder is one of a number of key employees of Corporation who manage and supervise the operations of Corporation and its subsidiaries; and WHEREAS, Stockholder as a key employee was permitted to acquire a certain number of shares of Class A Common Stock (voting stock) and Class B Common Stock (non-voting equity stock) as an incentive to remain as one of the key employees of the Corporation to manage and supervise the future operations of Corporation and its subsidiaries; and WHEREAS, as an incentive for Stockholder to remain as a key employee of Corporation, it is deemed necessary to impose certain conditions upon the transferability of said Class A Common Stock and Class B Common Stock in the event that employment of Stockholder with the Corporation is terminated for any reason; and WHEREAS, the parties wish to amend and restate the entire Stockholders Agreement dated August 1, 1986, as follows: NOW, THEREFORE, in consideration of the aforesaid premises and mutual covenants hereinafter set forth, the parties hereto agree as follows: 1. That in the event, for any reason (including resignation, dismissal, total disability or death), the employment of Stockholder is terminated at any time (in all cases a "Termination Event"), then upon the occurrence.of said Termination Event, Corporation shall have the obligation to acquire from said Stockholder or his legal representative all (but not less than all) of the Class A Common Stock and Class B Common Stock of Corporation issued and held by said Stockholder. The Stockholder or his legal representatives shall give prompt notice of the Termination Event. Upon the occurrence of the Termination Event, all rights and benefits of said Class A Common Stock and Class B Common Stock shall cease and terminate except to receive the price therefor as hereinafter established. - 2 - 2. The acquisition of the Class A Common Stock shall be by redemption and the redemption price to be paid therefor is Eleven Dollars ($11.00) per share. The acquisition of the Class B Common Stock shall be by purchase and the purchase price thereof shall be the book value thereof as established by the Auditors of the Corporation as of the end of the month immediately preceding the Termination Event; provided, however, that the purchase price shall not be less than $2,500,000 and shall not be more than $4,000,000. 3. Corporation shall have the option of paying the purchase price in whole or in part in a lump sum or partly or wholly in annual, quarterly or monthly installments over a period of no more than ten (10) years with interest on such deferred payments from the date of the Termination Event at the daily base rate of interest as charged by Dauphin Deposit Bank and Trust Company, Harrisburg, Pennsylvania, or its successor, less 200 basis points. The deferred purchase price shall be represented by a Judgment Promissory Note executed and delivered by the Corporation to Stockholder or his legal representative. The form and substance of the Judgment Promissory Note shall be in substantially the same form as set forth in Exhibit A attached hereto and made a part hereof. Except as hereinafter provided, any lump sum payment shall be made within sixty (60) days of the receipt by Corporation from the auditors of Corporation of the established purchase price and - 3 - if payment of the purchase price is to be made in installments, the payment of the first installment shall commence sixty (60) days from the date of the receipt by Corporation of the established purchase price from the auditors of Corporation, but in no case later than six months from the date of the Termination Event. 4. In the event of purchase of Class B Common Stock prior to Stockholder attaining age 65, Corporation shall have the further option of postponing the payment of the lump sum payment or commencing payment of the first installment until said Stockholder shall have attained the age of sixty-five (65) years; provided, however, that should Corporation elect to postpone the lump sum or installment payments until Stockholder attains the age of sixty- five (65) years, (a) the Corporation shall nevertheless make quarterly payments of interest only until commencing lump sum or installment payments; and (b) should Stockholder die before attaining the age of sixty-five (65) years, then in such event, Corporation will be required to pay to Stockholder's legal representative, within sixty (60) days of the death of Stockholder, either the lump sum payment or commence the installment payments. In the event Stockholder should die after installment payments have been commenced, Corporation shall make such installment payments to Stockholder's legal representative. In the event Stockholder's legal representative is discharged, installment payments shall be - 4 - continued to be made to the legal heirs of the Stockholder's Estate. 5. Corporation shall have the option of assigning its right and obligation to purchase Stockholder's Class B Common Stock to a subsidiary or other affiliated corporation, provided that Corporation shall in such case guarantee payment of the purchase price upon request of the Stockholder. 6. In the event of the death of Stockholder after the commencement of installment payments under Paragraph 3, or if installment payments commence at the death of Stockholder pursuant to paragraph 4(b), then the payment of the balance of principal remaining unpaid at the death of Stockholder shall be accelerated in such amount as computed by Stockholder's legal representative, under written certification delivered to Corporation, to be the estimated amount to pay the federal estate tax and state inheritance tax, which amount shall be paid as cash to Stockholder's legal representative as soon as possible after receipt from Stockholder's legal representative of the certified amount, but not later than thirty (30) days after such receipt, the payment being first credited to accrued interest and then to principal. The remaining unpaid principal balance of the Note will continue to be paid in equal periodic installments plus accrued interest over the remaining term of the Note. - 5 - 7. The Certificates of Class A Common Stock and Class B issued to Stockholder shall carry the following legend imprinted thereon: "This Certificate is subject to a Stock- holder's Agreement dated June ':1.7 , 1998, by and between L. L. Light and Smith Land & Improvement Corporation whereby Smith Land & Improvement Corporation has an obligation to purchase this Stock under certain terms and conditions. A copy of said Agreement is on file with the Secretary of the Corporation. By acceptance of this Certificate, the holder thereof agrees to be bound by the terms of said Agreement." 8. This Agreement and the conditions hereof are supplementary and in addition to the conditions and restrictions imposed upon the Class A Common Stock and Class B Common Stock as set forth in Article Fourth of the Certificate of Incorporation, as amended. 9. In the event any provision or condition of this Agreement shall be held invalid, illegal or unenforceable, in whole or in part, neither the validity of the remaining part of such provision or condition, nor the validity of any other provision or condition of this Agreement, shall in any way be affected thereby. 10. The terms and conditions of this Agreement shall be binding upon and shall inure to the benefit of and be enforceable by Corporation, its successors and assigns, and by the stockholders - 6 - and the executors, administrators, heirs and legal representatives of Stockholder. 11. This Agreement shall be governed by the laws of the Commonwealth of Pennsylvania. IN WITNESS WHEREOF, the parties hereto have caused this Stockholders Agreement to be duly executed the day and year first above written. WITNESSETH: ~~e~ ATTEST: (SEAL) STOCKHOLDER: e(z~ CORPORATION: SMITH LAND & IMPROVEMENT CORPORATION By, ?r~-T Name: Title: - 7 - [Z/8S] EXIIJBIT. A JUOGf4EHT PRIDllSSORV HOTE $ Date Camp Hill, Pennsylvania Place fOR VALUE RECEIVED, the und~rslgned smith Llind I IIIProvellent Corporation Corporation r--I partnership r--I Indlyldual iLl (NOTE: 2001 If corporation, Insert state of Incorporation) state Road, camp BIll, Pennsylvania 17011 Address .' hereinafter called "Haker", promises to pay to . an individual ~~4~Xi~mc~lIJM residing at IlKOlilt>>xxat hereinafter called "/lOlder". at Illptlce ~1....JtlI. above, or It such other pllce as the Holder hereof may from time to time designate by notice In writing, the principIl sum of I. which said principal payments shall be mlde as IS followS: Principal Payment Due Date together with Interest on the unpaid principII balance at the rate of % per annum computed on a dilly basis. , The Haker shall have the right at any time to anticipate and prepay the principal .balance due or any portion thereof. plus Interest, if any. In the event any lnstalllnent of principal Indlor interest is not paid on the due dlte Iforeslld, or should Haker make an Issignment for benefit of creditors or should loIakor become subject to Iny proceedln9s. volunhry or involuntary, under federal or State laws relating to blnkruptcy or insolvency, then in such event, the Holder hereof. at its option, may declare the entire unpaid principal bllance plus interest, If any, on the Hate as immediately due and plyable by written declaration addressed to Haker, Ind Holder may thereupon Immedlltely proceed upon any legal or equitable remedles Ivallatrle to Holder, includlng a Confess Judgment as herelnafer provided. The Haker agrees to pay 111 costs of collection, Including reasonable attorney's fees, in the event of default. . The Haker hereby waives presentment of payment, demand, protest, notice of protest, . and not lee of dishonor. To secure payment of the indebtedness due under the Note, and if permitted by the law of the pllce Where this Note has been made, the Maker hereof authorizes llJ,,:.j irrevocably any attorney, admitted to practice before a Court of proper jurisdiction in the place where this Hote is made. to appear on behalf of the Holder hereof in any such'proper Court, in term time or vacation, at any time after said indebted- ness shall become due, tiy acceleration or otherwise, .and confess a judgment ~IHhollt process in favor of the Holder hereof, for such amount as may be due hereunder, together with Court costs and attorney's fees not exceeding 15X, and to waive any errors which may appear in such proceeding, and consent to immediate execution on such judgment, hereby ra~4fylng and confirming all that said authority may do by virtue hereof. This Note s.hall be governed and construed ~and under the laws of the State of r7 Maryland r7 Virginia ~{Other PENNSYLVANIA . SIGHED, SEAlED and DELIVERED at place above stated on the date and year first here written. - ". . SIGNATURE By 'If Corporation: SMITH' LAND . IMPROVEMENT CORPORATIO Hame of Corporate Maker ~lgntng Uttlcer's Iltle' JUDGEMENT PROMISSORY NO'rE $4.000.000,00 Amount January 2, 2001 Date Camp Hill, Pennsylvania Place FOR VELUE RECEIVED. the undersigned Bald Eagle Insurance Company. Ltd. xx Corporation I Partnership Individual (NOTE If corporation, insert State of Incorporation here) 2001 Slate Road. Camp Hill, Pennsylvania 17011 Address hereinafter called "Maker", promises to pay to Lamar L. Light , an Individual residing at 1528 High Meadow Lane. MechanicsburQ, PA 17055 hereinafter called ~Holder", at place above, or at such other place as the Holder hereof may from time to time designate by notice in writing, the principal sum of Four Million and 00/100 Dollars I $4.000.000.00 which said principal payments shall be made as follows: Princioal Payment $400.000,00 $3.600.000.00 Due Date January 10. 2001 Payable in Thirty Six (36) Quarterly Installments of $100.000.00 Commencing January 10, 2002 and each Quarter Thereafter per annum together with interest on the unpaid principal balance at the rate of computed on a daily basis. The Maker shall have the right at any time to anticipate and prepay the principal balance due or any portion thereof, plus interest, if any. In the event any installment of principal andlor interest is not paid on the due date aforesaid, or should Maker make an assigment for benefit of creditors or should Maker become subject to any proceedings, voluntary or involuntary, under Federal or State laws relating to bankruptcy or insolvency, then In such event, the Holder hereof, at its option, may dedare the entire unpaid principal balance plus Interest, if any, on the Note as immediately due and payable by written declaration addressed to Maker, and Holder may thereupon immediately proceed upon any legal or equitable remedies available to Holder, including a Confess Judgment as hereinafter provided, The Maker agrees to pay all costs of collection, including reasonable attorney's fees, in the event of default. The Maker hereby waives, presentment of payment, demand, protest, notice of protest, and notice of dishonor. To secure payment of the indebtedness due under the Note, and if permitted by the law of the place where this Note has been made, the Maker hereof authorizes irrevocably any attorney, admitted to practice before a Court of proper jurisdiction in the place where this Note is made, to appear on behalf of the Holder hereof in any such proper Court, in term time or vacation, at any time after said indebtedness shall become due, by acceleration or othelWise, and confess a judgment without process in favor of the Holder hereof, for such amount as may be due hereunder, together with Court costs and attorney's fees not exceeding 15%, and to waive any errors which may appear in such proceeding, and consent to Immediate execution on such judgment, hereby ratifying and confirming all that said authority may do by virtue hereof. This Note shall be governed SInd construed by and under the laws of the State of Pennsylvania. SIGNED, SEALED, and DELIVERED at place above stated on the date and year first here written. . Interesl Rate will be at the Daily Base Rate of Inlerest as charged by Allfirsl Bal)k. Harrisburg, PA or Its successor, less 200 BasIs Points If Corporation: SIGNATURE Bald Ea Ie Insurance Com an l TD Name of Corporate Maker b Signing 0008('8 TItle Vice President JUDGEMENT PROMISSORY NOTE $3,415.094,00 Amount Revised Per Final Audit. April 11. 2001 Dale Camp Hill, Pennsylvania Place FOR VELUE RECEIVED. the undersigned Bald Eagle Insurance Company, Ltd. xx Corporation I Partnership Individual (NOTE: If corporation, insert State of Incorporation here) 2001 State Road, Camp Hill, Pennsylvania 17011 Address hereinafter called "Maker", promises to pay to Lamar L. Light , an Individual residing at 1528 Hi h Meadow Lane, Mechanicsbur . PA 17055 hereinafter called "Holder". at place above, or at such other place as the Holder hereof may from time to time designate by notice in writing, the principal sum of Three Million Four Hundred Fifteen Thousand and Nine Four Doilars and 00/100------_____,________________ __ ______._ __ _ __ $3,415.094.00 which said principal payments shall be made as follows: Princioal PaYment $400,000.00 $3,015.094.00 Due Date January 10, 2001 Payable in Thirty Six (36) Quarterly Installments of $83.753.00 Commencing January 10, 2002 and each Quarter Thereafter per annum together with interest on the unpaid principal balance at the rate of computed on a daily basis. The Maker shall have the right at any time to anticipate and prepay the principal balance due or any portion thereof, plus interest, if any. In the event any installment of principal and/or interest is not paid on the due date aforesaid, or should Maker make an ass/9mant for benefit of creditors or should Maker become subject to any proceedings, voluntary or involuntary, under Federal or State laws relating to bankruptcy or insolvency, then in such event, the Holder hereof, at its option, may declare the entire unpaid principal balance plus interest, if any, on the Note as immedIately due and payable by written declaration addressed to Maker, and Holder may thereupon immediately proceed upon any legal or equitable remedies available to Holder, Including a Confess Judgment as hereinafter provided. The Maker agrees to pay all costs of collection, including reasonable attorney's fees, in the event of default. The Maker hereby waives presentment of payment, demand, protest, notIce of protest, and notice of dishonor. To secure payment of the indebtedness due under the Note, and if pennitted by the law of the place where this Note has been made, the Maker hereof authorizes Irrevocably any attorney, admitted to practice before a Court of proper jurisdiction In the place where this Note is made, to appear on behalf of the Holder hereof in any such proper Court, in term time or vacation, at any time after said indebtedness shall become due, by acceleration or otherwIse, and confess a jUdgment without process in favor of the Holder hereof, for such amount as may be due hereunder, together with Court costs and attorney's fees not exceeding 15%, and to waive any errors which may appear in such proceeding, and consent to immediate execution on such Judgment, hereby ratifying and confirming all that said authority may do by virtue hereof. This Note shall be governed and construed by and under the laws of the State of Pennsylvania. SIGNED, SEALED, and DELIVERED at place above stated on the date and year first here written. . tnterest Rate will be at the Dally Base Rate of Interest as charged by Allfirsl Bank, Harrisburg, PA or Its successor. less 200 Basis Polnts If Corporation: SIGNATURE Bald Eagle Insurance Company L TO N.m.m~leM~~ by P / R. C. !WOOd SIgning Offlce"s Title Vice President CERTIFICA TE OF SERVICE AND NOW, this ~ day of August, 2001, I hereby certify that I have served a copy of the within document on the following by depositing a true and correct copy of the same in the U.S. Mails at Harrisburg, Pennsylvania, postage prepaid, addressed to: John P. Manbeck, Esquire Rhoads & Sinon, LLP One South Market Square, 12th Floor P. O. Box 1146 Harrisburg, PAl 71 08-1146 CALDWELL & KEARNS By 1n11li$i~Al) -~ ) (.-. L- 0fJ ~) .- B:: .::..::: U .~ .2:t:' ~ (), ~ J '- .~ ~ go rb ro -3 r- <:::J- ~ l:2 ~ - ~& '-.J l') l') to lIJ , z i5 0 0 w c:: c i= w " <( < ..: " " -' 0 ..: w 0 ~ z ~ ~ f- o ..: 0 ..: z > t<l u I 0 -' ~ U) " >- ...J < >- " U) z w ...J 0 Z I Z W ~ 0 Z '" " W ~ ~ 0 0 lL o ~ f- z f- ~ (j ...J " ..: '" <( " ~ ::J U < M m U) '" '" ..: I LAMAR L. LIGHT, Plaintiff : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA v. SMITH LAND & IMPROVEMENT CORPORATION and BALD EAGLE INSURANCE CO., LTD., Defendants : Docket No. 0 1- ~()S 3- c... "1,/ : CIVIL ACTION - LAW : ACTION FOR DECLARATORY JUDGMENT ACCEPTANCE OF SERVICE I accept service of the Complaint (as original process) on behalf of the Defendants and certify that I am authorized to do so. Date: B/~()/()/ I ' ohn P. Manbeck, Esquire Rhoads & Sinon, LLP One South Market Square, 12th Floor P. O. Box 1146 Harrisburg, PA 17108-1146 Attorney for Defendants 01-283/29027 CERTIFICATE OF SERVICE AND NOW, this lJ#1 day of September, 2001, I hereby certify that I have served a copy ofthe within document on the following by depositing a true and correct copy ofthe same in the U.S. Mails at Harrisburg, Pennsylvania, postage prepaid, addressed to: John P. Manbeck, Esquire RHOADS & SINON, LLP One South Market Square 12th Floor P.O. Box 1146 Harrisburg, P A 17108-1146 CALDWELL & KEARNS By: ~~ ('") C> 0 ~ -n tI) --I rgc.o f'T1 (;~ ;;g m -0 Z:n --a rn tiS; <::> '''6 \,'.) ~o -0 ;'::!:r ~o 'j d ::x (('5 z -m 5>3- w ~ .. ~ r~ ~ FORM NO.: 01162-Bf. 07163-BL' 0116l>-GY' 07156-WH < " . I > ;U ;U VI () W W > > c m > ~ ;U W " r " - -< 0 0 Z -< , ::E 0 M 1) 0 W '" ~ ;U ~ 1"1 z ~ z 0 r z I I '" z r VI ~ -< > -< ~ VI r l?'> r 0 c ~ z > 0 ~ -< " ^ ~ ~ 1"1 w r 0 > ~ > " > ~ > 'J M ::;: " ;U M 0 Z - ~ Z (5 (J) , VI W W (') 0 0 C ..... ;r,: <.f) ,-< -OeD ,." ;Ti :J] mrn -0 Z::D ~ tJjs;: ---;fri <=> ''"'0 -<L~ ,,c) 1 kV -0 ~j~T-: ~o :J: i"'"):::D ::."'C) -0 C;':' C)m )>c: ~ -~ ,,-.> ~ -< Dean F. Piermattei, Esquire Attorney LD. No. 53847 RHOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendant LAMAR L. LIGHT, Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. CIVIL ACTION - LAW NO. 01-5053-CIVIL SMITH LAND & IMPROVEMENT: CORPORATIONS and BALD EAGLE INSURANCE CO., LTD, Defendants NOTICE TO PLEAD TO: Lamar L. Light c/o James R. Clippinger Caldwell & Kearns 3631 North Front Street Harrisburg, PA 17110 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 entered against you. Respectfully submitted, RHOADS M~LP. .. B~ 1"-' (A \'l'\Uh~ Dean F. Piermattei One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendants Date: October 1, 2001 402880.1 Dean F. Piermattei, Esquire Attorney J.D. No. 53847 RHOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendants LAMAR L. LIGHT, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYL VANIA Plaintiff v. CIVIL ACTION LAW : NO. 01-5053 - CIVIL SMITH LAND & IMPROVEMENT CORPORATION, and BALD EAGLE INSURANCE CO., LTD, Defendant : ACTION FOR DECLARATORY JUDGMENT ANSWER. NEW MATTER AND COUNTER- CLAIM AND NOW COMES Smith Land & Improvement Corporation ("Smith Land") and Bald Eagle Insurance Co., Ltd., ("Bald Eagle") through its attorneys Rhoads & Sinon LLP and Dean F. Piermattei and avers the following in response to Plaintiff's Complaint. I. Admitted. 2. Admitted. 3. Denied. It is denied that Bald Eagle is a Pennsylvania Corporation which operates a place of business at 2001 State Road, Camp Hill, Pennsylvania 17011. Rather Bald Eagle is a British Virgin Island Company. 4. Admitted. 5. It is admitted that from January 29, 1986 through January 26, 1989j'!Lamar Light was Executive Vice President and Chief Operating Officer of L.B. Smith, Inc. and from January 27, 1989 through his resignation Lamar Light was the President and Chief Operating Officer of L.B. Smith, Inc. - I - 401327.1 6. It is admitted that the Plaintiff owned common stock in Smith Land which was subject to the Stockholder's Agreement. 7. Admitted. It is admitted that Exhibit "A" to the Complaint is the June 27, 1998 Amended Stockholder's Agreement and that this Agreement is binding on the parties and controlled the repurchase of Plaintiff' stock by Smith Land. 8. Admitted. 9. Denied as stated. The Amended Stockholder's Agreement speaks for itself. By way of further answer, with respect to the repurchasing of Plaintiff's stock, paragraph 2 specifically states the following: The acquisition of the Class A Common Stock shall be by redemption and the redemption price to be paid therefor is Eleven Dollars ($11.00) per share. The acquisition of the class B Common Stock shall be by purchase and the purchase price thereof shall be the book value thereof as established by the Auditors of the Corporation as of the end of the month immediately preceding the Termination Event; provided, however, that the purchase price shall not be less than $2,500,000 and shall not be more than $4,000,000. 10. Admitted with clarification. The allegations in this paragraph are admitted however, Plaintiff's resignation was not effective until December 31, 2000. 11. Denied. It is specifically denied that the Plaintiff spoke to Robert C. Sherwood regarding the book value/acquisition price of Plaintiffs Class "B" Common Stock prior to announcing his intent to resign or terminate his employment with L.B. Smith. Rather, after Plaintiff announced that he would be terminating his employment with L.B. Smith, Mr. Light had a conversation with Mr. Sherwood regarding the book value/acquisition price of his Class "B" Common Stock. At that time the parties understood that the repurchase of the stock would be governed by the Amended Stockholder's Agreement. All parties mistakenly believed that the -2- book value of Plaintiffs stock may exceed the $4,000,000 maximum repurchase price, however, all parties knew at that time that the auditors had not completed their book value determination as required by paragraph 2 of the Amended Stockholder's Agreement. 12. Denied. It is specifically denied that Sherwood knew or reasonably should have known that Light would rely upon any statement regarding the book value/acquisition price of Plaintiff's Class "B" Common Stock. Rather, to the contrary, all parties clearly understood that the Amended Stockholder's Agreement controlled the repurchase of Plaintiff's stock and accordingly, book value would be determined by the Auditors. 13. Admitted with clarification. It is admitted that Plaintiff did deliver stock certificates and received a Judgment Promissory Note in the amount of $4,000,000, and said note is attached as Exhibit "B" to Plaintiff's Complaint. The Judgment Promissory Note speaks for itself. By way of further answer, at all relevant times, the parties understood and agreed that the repurchase of Plaintiff's stock would be pursuant to the Amended Stockholder's Agreement. At the time of Plaintiff's termination, the Auditor's determination of book value had not been completed and so as to avoid delay in the initial payments to the Plaintiff, the Defendants issued a promissory note for the maximum repurchase amount of $4,000,000 with the understanding that the Auditor's determination would control, and if said repurchase amount was less that $4,000,000 an adjustment to Defendants payment obligations would be made. 14. Admitted in part. It is admitted that the Promissory Note was signed by Bald Eagle Insurance Company, Ltd. The remaining allegations in this paragraph are specifically denied. 15. Admitted. - 3 - 16. Denied. The allegations in this paragraph are specifically denied. By way of further answer, the Plaintiff was well aware that any repurchase of his stock would be governed by the Amended Stockholder's Agreement and to the extent that the book value determination did not warrant the $4,000,0000 repurchase price for Plaintiffs stock, an adjustment would be made consistent with the requirements of the Amended Stockholder's Agreement. Furthermore, at the time the Promissory Note was provided to the Plaintiff, he was aware that the Auditors had not concluded their book value determination. 17. Denied as stated. It is admitted that the initial repurchase payment was made to the Plaintiff. Any implication that said payment constitutes an agreement that $4,000,000 is actually owed to the Plaintiff for the repurchase of his stock is specifically denied for the reasons set forth above. 18. It is admitted that Smith Land advised Light that the book value of his stock was not $4,000,000, and further advised Plaintiff that the true book value of the stock according to the Auditors' determination was $3,415,094. At all relevant times, the Plaintiff had the opportunity to verify the Auditor's determination of book value which supports this repurchase price pursuant to the Amended Stockholder's Agreement, however, Plaintiff has refused to take steps to verify the Auditors' findings. 19. Admitted. 20. Denied as stated. The allegations in this paragraph are denied as stated. It is admitted that Smith Land advised Plaintiff that the Auditors concluded that the book value repurchase price for Plaintiff's stock pursuant to the Amended Stockholder's Agreement would total $3,415,094 rather than $4,000,000. At that time it was requested that Plaintiff abide by the terms of the Amended Stockholder's Agreement and accept this amount as the purchase price. -4- Pursuant to the Amended Stockholder's Agreement, Bald Eagle supplied a second promissory note in the amount of$3,415,094 which Plaintiff has refused to accept. 21. This paragraph contains conclusions of law which do not require a response. To the extent that this paragraph contains allegations of fact, they are specifically denied for the reasons set forth in paragraphs 1 through 20 above. 22. This paragraph contains a conclusion of law which does not require a response. To the extent that this paragraph contains allegations of fact they are specifically denied for the reasons set forth above. By way of further answer, the $4,000,000 Promissory Note is not enforceable and the parties should be governed by the Amended Stockholder's Agreement. 23. This is a conclusion of law and does not require a response. WHEREFORE, the Defendants respectfully requested that: (1) this Court deny Plaintiff's request for judgment declaring that the January 2, 2001 Judgment Promissory Note is legally binding and obligates the Defendants to pay the sum of $4,000,000 plus interest to the Plaintiff; (2) deny Plaintiff's request for a declaratory judgment that the Plaintiff is entitled to confess judgment and accelerated payment for the sums set forth in the January 2, 2001 Judgment Promissory Note; and (3) this Court enter a judgment declaring that the parties are bound by the June 27, 1998 Amended Stockholder's Agreement and that the January 2, 2001 Judgment Promissory Note is not binding upon the parties. NEW MATTER 24. At all relevant times the parties fully understood that the repurchase of the Plaintiff's Stock would be governed by the Amended Stockholders Agreement. 25. At the time the Judgment Promissory Note for $4,000,000 was provided to the Plaintiff, both parties maintained a mistaken belief that the Auditor determination would set the - 5 - book value for Plaintiff's Stock in excess of the maximum $4,000,000 repurchase price set forth in the Amended Stockholders Agreement. 26. At the time the initial Judgment Promissory Note for $4,000,000 was provided to the Plaintiff, the Auditors had not completed their book value determination pursuant to the Amended Stockholder Agreement. 27. The initial Judgment Promissory Note for $4,000,000 provided to the Plaintiff was done as a matter of convenience so as not to delay the initial payment to the Plaintiff for the repurchase of his stock while the Auditors concluded their book value determination. 28. At the time the initial Judgment Promissory Note for $4,000,000 was provided to the Plaintiff, both parties were under the mistaken belief that the Auditor's book value determination would result in a payment of $4,000,000 to the Plaintiff. 29. The Judgment Promissory note should be set aside on the basis of mutual mistake 30. Alternatively, to the extent that the Plaintiff was aware of the true book value of his Stock, the Judgment Promissory Note of January 2, 2001 should be rescinded as Plaintiff failed to disclose this knowledge to the Defendant at the time the Note was issued. 31. The Plaintiff, by signing the Amended Shareholders Agreement, represented that he would adhere to the terms of said Agreement and accordingly, the Plaintiff is now estopped from attempting to enforce the Judgment Promissory Note of January 2, 2001. 32. To the extent that Plaintiff had knowledge that the book value of the stock would not exceed the $4,000,000 and failed to share this information with the Defendants, the Judgment Promissory Note of January 2, 2001 should be set aside based on unilateral mistake, misrepresentation, and fraud. -6- 33. Plaintiffs claim for enforcement of the January 2, 2001 Judgment Promissory Note should be dismissed as Plaintiff consented to a repurchase of the stock pursuant to the Amended Shareholder's Agreement. WHEREFORE, the Defendants respectfully requested that: (1) this Court deny Plaintiffs request for judgment declaring that the January 2, 2001 Judgment Promissory Note is legally binding and obligates the Defendants to pay the sum of $4,000,000 plus interest to the Plaintiff; (2) deny Plaintiff s request for a declaratory judgment that the Plaintiff is entitled to confess judgment and accelerated payment for the sums set forth in the January 2, 2001 Judgment Promissory Note; and (3) this Court enter a judgment declaring that the parties are bound by the June 27, 1998 Amended Stockholder's Agreement and that the January 2, 2001 Judgment Promissory Note is not binding upon the parties. Respectfully submitted, RHOADS & By: ean F. Piermattei One South Market Square P. O. Box 1146 Harrisburg, P A 17108-1146 (717) 233-5731 Attorneys for Defendants -7- OCT-DI-2DDl MON 11:19 AM L B SMITH INC CORPORATt FAX NO. 717+7318325 P. UJ . VERlFICAT,.lQN Rich~rd Ii. Jordan. n, deposes and says, subject to the l'lmaltics of 18 Pa. C.S. ~ 4904 relaling to unsworn falsHic.\tion to authorities, that lIe is the Chahman, CEO and Prcsidenl of Smith Land & Improvement Corporation llnd Bald Bnglc Insurance Co., Ltd., that he makes this verilication by its aulhority and that the facls set forth ill the foregoing Answer. New Malter and CIll1l\tcrclnim arc lruc and correct to the besL ofllis knowlcdge, infomllllion and belier. p"le:_.__,./O-/-Ol --- _8. CERTIFICATE OF SERVICE I hereby certify that on this 1 st day of October, 2001 a true and correct copy of the foregoing was served by means of United States mail, postage pre-paid, upon the following: James R. Clippinger, Esquire Caldwell & Kearns 3631 North Front Street Harrisburg, PA 17110 () ~) ~~o..\ ~Uj..-tU!L~ Teresa Paulhamus C) c) r-~ .~,,"' ~ -0 b.: c") rn I : -,,~.. ~ .-f_., I "f 2:: <:I.' ,'., r-;: ( j ~: ~j=: .'". S;;U E::j c.:: Z :" -j -< CO I I I I , I i I I I i Dean F. Piermattei, Esquire Attorney I.D. No. 53847 RHOADS & SINON LLP One South Market Square, 12th P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendants Floor LAMAR L. LIGHT, Plaintiff : IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA v. : CIVIL ACTION LAW :NO. 01-5053-CIVIL SMITH LAND & IMPROVEMENT CORPORATIONS and BALD EAGLE INSURANCE CO., LTD Defendant : JURY TRIAL DEMANDED PRAECIPE TO SUBSTITUTE VERIFICATION TO: THE PROTHONOTARY Kindly substitute the attached Verification for the Verification attached to Defendants' Answer with New Matter which was filed on or about October 2, 2001. RHOADS & SINON . ermattei th Market Square elfth Floor .0. Box 1146 Harrisburg, PA 17108-1146 (717) 233 -5731 Attorneys for Defendants 403405.1 CERTIFICATE OF SERVICE I hereby certify that on this 3rd day of October, 2001, a true and correct copy of the foregoing "Praecipe to Substitute Verification" was served by means of United States mail, first class, postage prepaid, upon the following: James R. Clippinger, Esquire Caldwell & Kerns 3631 North Front Street Harrisburg, PA 17110 ~~~ Teresa Paulhamus o [.; :5,. l:")lL nln; 2::1' Zr" en ,. -< ..;:.~ ~'-.-' ~':'::" ,,~C ) Pc 2:: =< C) c::) ;;;-) ."-/ I :.,,) :.....1 , , :_~~ ~ VERIFICATION Richard E. Jordan, II, deposes and says, subject to the penalties of 18 Pa. C.S. 9 4904 relating to unsworn falsification to authorities, that he is the Chairman, CEO and President of Smith Land & Improvement Corporation and Bald Eagle Insurance Co., Ltd., that he makes this verification by its authority and that the facts set forth in the foregoing Answer, New Matter and Counterclaim are true and correct to the best of his knowledge, information and belief. Date: /0-/ -01 ~ gjJ;M'~.JL Richard E. Jon"'- II - 8 - Dean F. Piermattei, Esquire Attorney I.D. No. 53847 RHOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendant LAMAR L. LIGHT, Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. CIVIL ACTION - LAW NO. 01-5053-CIVIL SMITH LAND & IMPROVEMENT: CORPORATION and BALD EAGLE INSURANCE CO., L TD, Defendants NOTICE OF SERVICE TO: CUMBERLAND COUNTY PROTHONOTARY Please take Notice that the Defendants First Request for Production of Documents Directed to Plaintiff and First Set of Interrogatories Directed to Plaintiff upon Plaintiffs attorney, James R. Clippinger, Esquire in this matter on December 10, 2001 by United States Mail. Respectfully submitted, RHOADS & SINON LLP /":. .lermattei 6~th Market Square . O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendants Date: December 11,2001 391280.1 CERTIFICATE OF SERVICE I hereby certify that on this 11th day of December, 2001, a true and correct copy of the foregoing Notice of Service was served by means of United States mail, first class, postage prepaid, upon the following: James R. Clippinger, Esquire Caldwell & Kearns 3631 North Front Street Harrisburg, PA 17110-1533 ~~~ Teresa Paulhamus 0 0 C) C .... :e::. r:::J "'tJ rn f"Tl m r7. " Z :1. Z C r'-' ~ ),~ . !<:C- -0 :':=;:;C: ~~g ~.,.~ ---1 ~ '_n -1~_ :i:J -< <0 --<. ~ Dean F. Piermattei, Esquire Attorney LD. No. 53847 RHOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendant LAMAR L. LIGHT, Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. CIVIL ACTION - LAW NO. 01-5053-CIVIL SMITH LAND & IMPROVEMENT: CORPORATION and BALD EAGLE INSURANCE CO., L TD, Defendants NOTICE OF SERVICE TO: CUMBERLAND COUNTY PROTHONOTARY Please take Notice that the Defendants' Answer to Plaintiffs First Request for Production of Documents was served upon Plaintiffs attorney, James R. Clippinger, Esquire in this matter on December 14, 2001 by United States Mail. Respectfully submitted, RHOADS & SINON LLP Date: December 17,2001 ~. ~...,. ..~'-- .--:::> ..", .,,_....~ BY0" /~ .~..'~ -.-------.., />f>ear\,., iermattei c: ./ ,,/ ." OltG South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendants 411791.1 ... CERTIFICATE OF SERVICE I hereby certify that on this 17th day of December, 2001, a true and correct copy of the foregoing Notice of Service was served by means of United States mail, first class, postage prepaid, upon the following: James R. Clippinger, Esquire Caldwell & Kearns 3631 North Front Street Harrisburg, PA 17110-1533 ~"-~ 2 Teresa Paulhamus 00 ~~r ~co~ ~ ~ ""\ I _ j::', ~t. (') ~ -olJ' rnrl', Z"T' zt. (/) i-': -< ~, r:::;C~' ~;: e-..... bb :;:>c Z ~ C) r:-:J r" n C) -on C,fJ .....) :.n (P ,'--', ;~:. ~ LAMAR L. LIGHT, Plaintiff v. SMITH LAND & IMPROVEMENT CORPORA nON and BALD EAGLE INSURANCE CO., LTD., Defendants :IN THE COURT OF COMMON PLEAS :CUMBERLAND COUNTY, :PENNSYL VANIA :DOCKET NO. 01-5053 :CIVIL ACTION - LAW :ACTION FOR DECLARATORY :JUDGMENT PLAINTIFF'S ANSWERS TO DEFENDANTS' FIRST SET OF INTERROGATORIES DIRECTED TO PLAINTIFF CALDWELL & KEARNS By: James . lippinger, Esquire Attorney ID No. 07159 Douglas E. Herman, Esquire Attorney ID No. 86569 3631 North Front Street Harrisburg, PA 17110-1533 (717) 232-7661 Attorney for Plaintiff, Lamar L. Light Dean F. Piermattei, Esquire Attorney I.D. No. 53847 RHOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, P A 171 08-1146 (717) 233-5731 Attorneys for Defendant LAMAR L. LIGHT, Plaintiff v. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 01-5053-CIVIL SMITH LAND & IMPROVEMENT : CORPORATION and BALD: EAGLE INSURANCE CO., LTD, Defendants DEFENDANTS' FIRST INTERROGATORIES DIRECl'ED TO PLAINTIFF TO: Lamar L. Light c/o James R Clippinger Caldwell & Kearns 3631 North Front Street Harrisburg, P A 1711 0 PLEASE TAKE NOTICE that you are hereby required, pursuant to Pennsylvania Rule of Civil Procedure No. 4001, et~. to serve upon the undersigned a copy of your answers and objections, if any, in writing and under oath, to the following Interrogatories within thirty (30) days after service of the Interrogatories. The answers shall be inserted in the spaces provided. If there is insufficient space to answer an Interrogatory, the remainder of the answer shall follow on a supplemental sheet. These Interrogatories shall be deemed to be continuing Interrogatories. Ifbetween the time of filing your answers and the time of trial of this matter, you, or anyone acting on your behalf, learn of any further information not contained in your answers, or if you learn that any information set forth in your answers is or has become inaccurate or incorrect, you shall promptly file and serve supplemental answers. 403466. ) - 1 - 1. State: a. b. c. d. e. f. g. h. INTERROGATORIES your full name; each other name, if any, which you have used or by which you have been know; the address of your present residence and the address of each other residence which you have had during the past five years; your present occupation and the name and address of your employer; date of your birth; your Social Security number; your military service and positions held, if any; and the schools you have attended and the degrees or certificates awarded, if any. ~"-_._-------""----"'.'--'- 2. State with particularity the factual basis for each claim or defense you are asserting in this case. 3. Identify- each person who has knowledge offacts concerning the allegations contained in your complaint and the facts of which each is knowledgeable. --~"'~-_.,.~,._---~--,...._.,_..+..._-_.._,-...-- - 4. If you know of anyone that has given any statement (as defined by the Rules of Civil Procedure) concerning this action or its subject matter, state: a. the identity of such person; b. when, where, by whom, and to whom each statement was made, and whether it was reduced to writing or otherwise recorded; and c. the identity of any person who has custody of any such statement that was reduced to writing or otherwise recorded. 5. Identify documents (except reports of experts subject to Pa. R.C.P. No. 4003.5) which describe the incident or the cause thereof. 6. If you, or someone not an expert subject to Pa. R.C.P. 4003.5, conducted any investigations of the incident, identify: a. each person, and the employer of each person, who conducted any investigation( s); and b. all notes, reports or other documents prepared during or as a result of the investigation(s) and the persons who have custody thereof. 7. Identify each person you intend to calI as a non-expert witness at the trial of this case, and for each person identified state your relationship with the witness and the substance of the facts to which the witness is expected to testify. .~---"'._-_.._-,-~--,. 8. Identify each expert you intend to call as a witness at the trial of this matter, and for each expert state: a. the subject matter about which the expert is expected to testify; and b. the substance of the facts and opinions to which the expert is expected to testify and.a SlQJlmary of the grounds for each opinion. (You may file as your answer to this interrogatory the report of the expert or have the interrogatory answered by yOur expert.) 9. Identify all exhibits that you intend to use at the trial of this matter and state whether they will be used during the liability or damages portions of the trial. 10. IT you intend to use any book, magazine, or other such writing at trial, state: a. the name of the writing; b. the author of the writing; c. the publisher of the writing; d. the date of publication of the writing; and e. the identity of the custodian of the writing. 11. IT you intend to use anyadmission(s) of a party at trial, identify such admission(s). -'""'--"'---"-~'~'-'~"-,,, 12. Are you withholding any documents from production in response to Defendants' first request for production of documents on the grounds of privilege or immunity? If so, identify each such document and separately as to each: a. state the grounds upon which the document was withheld (e.g. attorney client privilege or work product immunity) and the complete factual basis for the claim of privilege or immunity; b. in the case of an allegedly privileged document, identify all persons who have been privy to it, including, but not limited to, all cc and bee recipients, and in the case of an allegedly privileged communication also identify all persons who were privy to the underlying communication; c. in the case of a document that is allegedly work product, identify the litigation in connection with which, or in anticipation of which, the document was prepared, and identify all persons who have been privy to the document; and d. identify each interrogatory and each document request to which the respective document is responsive. . _..-..~.."--.__.~-~.. 13. Do you have a records retention or other similar policy which sets forth the manner and timing of retention of your business or other records or regarding the destruction of such records? If you answer to the foregoing is "yes," please state the following: a. describe the record retention or destmction policy; b. identify those persons who are responsible for maintaining or carrying out said policy; c. identify all document which set forth such policy or which otherwise pertain, refer or relate to such policy; d. identify all documents which are otherwise responsive to the request for production of documents which have been destroyed or discarded pursuant to such policy. RHOADS & SINON LLP By: F . attei One Market Square P. . Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendants -----'-_._._--"----,.~..-. PLAINTIFF'S ANSWERS 1. See below. (a) Lamar Leonard Light. (b) None. (c) 1528 High Meadow Lane Mechanicsburg, P A 17055 (d) Self-employed consultant. Work from home office. (e) July 12, 1934. (f) 169-26-0147. (g) United States Marine Corps; Captain. (h) Palmyra High School; Allegheny College, B.A. 2. Plaintiffs Complaint adequately sets forth the factual basis upon which his claim for declaratory relief is premised. In summary the Plaintiff contends that the Defendants are obligated to comply with the terms set forth in the January 2,2001 Judgment Promissory Note (reflecting the Defendants' Obligation to pay the Plaintiffthe sum of $4,000,000.00) in exchange for his class-B common stock. No caveats or conditions were set forth in the Note, and Plaintiff relied upon the oral and written representations of Defendants ' agents that the sum of$4,OOO,000.OO would, in fact, be paid to him over the course of time as provided for in the judgment Promissory Note. 3. A. Lamar Light - all pertinent facts in support of Plaintiffs claims. B. Richard Jordan - the facts underlying Plaintiffs decision to resign and facts pertaining to the two Promissory Notes and the reasons for the change in value. C. Robert C. Sherwood - the facts underlying Plaintiffs decision to resign and the facts pertaining to the two Promissory Notes and the reasons for the change in value. D. Sara Cowen - the facts surrounding Plaintiffs resignation. E. Tim Hanlon, Treasurer, L.B. Smith, Inc.-- the facts surrounding preparation and distribution of the two Promissory Notes as they relate to Plaintiffs claims. F. Mr. Jeffrey Troutman, First Union Bank - the facts surrounding preparation and distribution of the two Promissory Notes as they relate to Plaintiffs claims. Plaintiffs belief and understanding about what Defendants owed Plaintiff. (insofar as Mr. Troutman assisted Mr. Light in his financial planning). 4. No such statements exist. 5. Plaintiff has prepared no such written documents. Please see Plaintiffs response to Defendant's Request for Production of Documents to the extent that letters addressed to Plaintiff from the Defendant(s) are responsive to this query. 6. No such investigations have been conducted. 7. Plaintiff has not yet decided who will be called as witnesses at the trial of this matter, and he specifically reserves the right to supplement this response the course oflitigation. Please refer to Answer number 3 for those who may be called and the substance of their proposed testimony. 8. Plaintiff has not identified any experts at the present time. Plaintiff specifically reserves the right to supplement this response during the course oflitigation. 9. Plaintiff has yet to determine the Exhibits which he will introduce at trial. Plaintiffshall provide this information as it becomes available. 10. None are anticipated at this time; however, Plaintiffhas yet to determine the Exhibits which he will introduce at trial. Plaintiff specifically reserves the right to supplement this response during the course oflitigation. 11. Plaintiff has yet to determine what if any admissions of Defendants' agents he will seek to introduce at trial. Plaintiff shall provide this information as it becomes available. 12. No documents are being withheld on any of the grounds set forth in Defendants' Interrogatory. 13. Mr. Light has no such policy for his personal papers and affairs. 01-283 /34382 VERIFICATION I, Lamar Light, verify that the Answers to Defendant's Interrogatories are true and correct to the best of my knowledge. I understand that false statements herein are made subject to the penalties of 18 Pa. C.S. 94904, relating to unsworn falsification to authorities. By: ~~~ Lamar Light CERTIFICATE OF SERVICE AND NOW, this /7 day of January, 2002, I hereby certify that I have served a copy of the Plaintiffs Answer to Defendants' Interrogatories on the following by depositing a true and correct copy of the same in the U.S. Mails at Harrisburg, Pennsylvania, postage prepaid, addressed to: Dean F. Piermattei, Esquire Rhoads & Sinon, LLP One South Market Square, 12th Floor P. O. Box 1146 Harrisburg, P A 171 08-1146 CALDWELL & KEARNS By ~l;;O(~j/l.u .,... L:c; "':':, , . .-:1' C :""".1 \:::~ ~ t~i~ :~ C.") ~ ::::--,. ~- :lJ ~l.. PRAECIPE FOR LISTING CASE FOR TRIAL (Must be typewritten and submitted in duplicate) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: Please list the following case: (Check One) ( ) for JURY trial at the next term of civil court. ( X ) for trial without a jury. CAPTION OF CASE (entire caption must be stated in full) (Check One) ( X) Civil Action - Law I..-::U1lar L. Light, ( ) Appeal from Arbitration ( ) (Other) Plaintiff The trial list will be called on v. Trials commence on Smi th Land & Improvement Corporation and Bald Eagle Insurance Co., Ltd., Pretrials will be held on (Briefs are due five (5) days before pretrials.) Defendants (The party listing this case for trial shall provide forthwith a copy of the Praecipe to all counsel, pursuant to Local Ru]e 2]4.1.) No. 01 Civil 5053 2001 Indicate the attorney who will try case for the party who files this praecipe: James R. Clippinqer, Esquire - Caldwell & Kearns, 3631 N. Front street, Harrisburg, PA 17110 Indicate trial counsel for other parties ifknown: Dean F. Piennattei, Esquire, Rhoads & Sinon, One South Market Square, Harrisburg, PA 17108-1146 This case is ready for trial. Signed: Date: ~r 12. 2002 Plaintiff Attorney for: FORMS/28434 (') ~ -ol~ Q~llc; ",:.:.---, f5~:' ~.';:; ~~::' ~~~ =<! C:J :'0 -- t::) '.'.,- , , ...'.~ en ::0 -< LAMAR L. LIGHT IN THE COm~T OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA V. SMITH LAND & IMPROVEMENT CORPORATION AND BALD EAGLE INSURANCE CO., LTD. NO. 2001-5053 CIVIL \ CIVIL ACTION - LAW ORDER OF COURT AND NOW, this 25TH day of NOVEMBER, 2002, a pretrial conference in the above-captioned matter is SCHEDULED for WEDNESDAY, DECEMBER 18, 2002, at 1:00 p.m. in Chambers of the undersigned judge, Cumberland County Courthouse, Carlisle, Pennsylvania. Pretrial memorandum shall be submitted by counsel in accordance with C.C.R.P. 212-4, at least five (5) days prior to the pretrial conference. TRIAL in the matter will be scheduled at the pretrial conference. Counsel are directed to have their calendars available. Dean Piermattei, Esq. Guido, J. cc: James Taryn Dixon Court Administrator . . V'INVA1ASNN3d JJ.NnOO ON\'1i:f-38rJrlO B I :8 WV 9 G ^ON GO AWlONCi{LOUd 2111 .:10 3:JL:l~o-(i::nl:! NOV 1 4 200t ~ PRAECIPE FOR LISTING CASE JFOR TRIAL (Must be typewritten and submitted in duplicate) c::;) 1"'..:1 :-- . ._) Please list the following case: .-.'..' TO THE PROTHONOTARY OF CUMBERLAND COUNTY: (Check One) ( ) for JURY trial at the next term of civil court. ( X ) for trial without a jury. 0' CAPTION OF CASE (entire caption must be stated in full) (Check One) ( x) Civil Action - Law La.mar L. Light, ( ) Appeal from Arbitration ( ) (Other) Plaintiff The trial list will be called on v. Trials commence on Smith land & Improvenent Corporation and Bald Fagle Insurance Co., Ltd., Pretrials will be held on (Briefs are due five (5) days before pretrials.) Defendants (The party listing this case for trial shall provide forthwith a copy of the Praecipe to all counsel, pursuant to Local Rule 214. \.) No. 01 Civil 5053 2001 Indicate the attorney who will try case for the party who files this praecipe: Janes R. Clippinqer, Esquire - Caldwell & Kearns, 3631 N. Front street, HarriSburg, PA 17110 Indicate trial counsel for other parties ifknown: DeanF. Piennattei, Esquire, Rhoads & Sinon, <iIe South Market Square, Harrisburg, PA 17108-1146 Signed: l~ ~<:> ~ ames R. Cli nr Esquire This case is ready for trial. Date: ~ 12. 2002 Print N Plaintiff Attorney for: _ FORMS/28434 LAMAR L. LIGHT, Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA V. SMITH LAND & IMPROVEMENT CORPORATION and BALD EAGLE INSURANCE CO., LTD., Defendant 01-5053 CIVIL TERM PRETRIAL CONFERENCE At a pretrial conference held December 18, 2002, before Edward E. Guido, Judge. Present for the Plaintiff was James R. Clippinger, Esquire, and for Defendant, Dean F. Piermattei, Esquire. It appears that the matter is not at issue since both sides need to do additional discovery. They will agree upon a time frame and request a scheduling order from the judge assigned to handle this case. It appears to the Court that we are a friend of Plaintiff's family. Consequently, we are recusing ourselves from further involvement in this case. The Court Administrator is directed to advise counsel which judge will be assigned to this case so that they may direct their scheduling order to him. Edward E. Guido, J. vOames R. Clippinger, Esquire For Plaintiff It > t~~A- R~ J~-2'7"O~ V Dean F. Piermattei, Esquire For Defendant ViNVJ\lASNN3d AlNn08 C}tltV7H38i"4no 6E:~,~~O~~ Atfr,l(kJI...,;,;'" :;,. --'-11- ji,J VINVA1"SNN3d A.lNnO~] G\]\{\1:J38V'lna 'ZS :S Ud LZ :l3020 :10 t\J''''IC\\..,r''',~~, ~~, (\ ^f.JQ,. I'l'~.-j. :<",....,-,.<<... - -j~';\J:~_\J"{l:r.nj 1i/1H/U3 wbU 1U:33 t<AX 717 Z31 titj37-l- LAMAR L. LIGHT, Plaintiff v. SMITH LAND & IMPROVEMENT CORPORATION & BALD EAGLE INSURANCE CO., LTD., Defendants SMITH LAND & IMPROVEMENT CORPORATION, Plaintiff v_ LAMAR LIGHT, Defendant LAMAR L. LIGHT, Plaintiff v. BALD EAGLE INSURANCE CO., LTD. & SMITH LAND & DEVELOPMENT CORP_ Defendants KHUAV~ ~lNUN LLP l{i] 004 IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5053 CIVIL ACTION - LAW and IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYL VANIA NO. 03-834 Civil Term CIVIL ACTION - LAW and IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. 03-1849 CIVIL ACTION - LAW JOINT MOTION FOR CONSOLIDATION 493099.1 ll/l~/UJ \'VblJ lU:;SJ FAA III lJl IjIj;S'/~ I<HUAU::l :ilNUN LLt-' l,QJ uu5 NOW COME Lamar Light ("Light"), Smith Land & Improvement Corporation ("Smith Land") and Bald Eagle Insurance Co., Ltd. ("Bald Eagle"), by and through their attorneys, Caldwell & Kerns and Rhoads & Sinon LLP, and file the within Joint Motion for Consolidation as follows: 1. The facts underlying each of the above-captioned actions involve the conduct and obligations of Light and Smith Land and Bald Eagle during Light's tenure as Chief Operating Officer, Executive Vice President and President of L.B. Smith, Inc., a wholly owned subsidiary of Smith Land, as well as documents executed as a result of those positions including, without limitation, a Judgment Promissory Note and Guaranty both dated January 2, 2001, a Judgment Promissory Note [and Guaranty both] deted April 11, 2001, an Amended Stockholders Agreement dated June 27,1998. 2. In that respect, a dispute arose following Light's resignation on October 31, 2000, effective December 31, 2000. After Light's resignation, the parties' disputed the terms, primary price, of Smith Land's obligation to repurchase the Smith Land Stock from Light under the above-listed documents. 3. By Complaint dated August 29, 2001, Light initiated suit against Smith Land and Bald Eagle, No. 01-5053, alleging a claim for declaratory judgment regarding the 2001 Judgment Promissory Note (hereinafter the "Light Action"). Smith Land and Bald Eagle's Answer and New Matter filed to the Light's Complaint disputes the amount which should be paid to Light for the redemption of the stock. 49590U - 2- LIJ.1~/V.) ntv .1V:.).) ~AA ,~( ~.)~ 004(~ KtiUAI):'.t ::, 1 ~~ur'1l LLt' li1J UUt; 4. By Writ of Summons dated February 25, 2003, Smith Land initiated suit against Light at this Court's Docket No. 03-834 (hereinafter the "Smith Land Action"). In the Complaint filed in Smith Land Action on or about October 23, 2003 it is alleged that Light breached his fiduciary duties as an officer of L.B.Smith and that his actions artificially inflated the value of the Smith Land Stock redeemed from Light. 5. By Complaint dated April 22, 2003, Light initiated a second action against Smith Land and Bald Eagle at this Court's Docket No. 03-1849 confessing judgment against Smith Land and Bald Eagle pursuant to the April II, 2001 Judgment Promissory and Guaranty Note, (alleging default of payment) which was given to Light when the Smith Land Stock was redeemed (hereinafter the "Declaratory Action"). Smith Land and Bald Eagle has contested entry of the confessed judgment. The confessed judgment against Smith Land has been set aside by stipulation however, the parties are still litigating the appropriateness of the confessed judgment entered against Bald Eagle and the claim against Smith Land in accord with Pa. R.C.P. Rule ~2960. 6. The parties in the above actions have undertaken partial discovery. 7. An Order dated September 22,2003 by the Honorable Kevin A. Hess was issued in the Declararory Action setting a deadline for discovery of October 31, 2003 and scheduled a hearing for January 8, 2003 in that action. 8. The parties believe that the public interest, as well as judicial economy and avoidance of cost and delay, would best be served by consolidation of the three actions. -3- LLIL~/UJ "nU LU;JJ rAA ILl ~~t OOJ/~ t<:.tlUAU;) ;) U'ljUl~ LLr' tgj UU I 9. Specifically, these actions should be consolidated where, as here, the three actions involve common questions of law and fact and arise from the same transaction or occurrence, i.e. Light's actions while employed at L.B. Smith and the affect of those actions on the price of the stock, documents relating to Light's employment. the value of Smith Land Stock and the repurchase allegations of Smith Land and Bald Eagle. 10. Because additional discovery remains necessary for trial in these actions, however, at this time, the parties request that the Court cancel the hearing scheduled in the Declaratory Action and allow the parties to proceed with discovery for all three actions which the Parties believe can reasonably be completed before March 31, 2004. 11. At such time the parties can mutually conclude that discovery will be completed by March 31, 2004, or such earlier date as the parties determine, the matter shall be rescheduled for trial with this Court. WHEREFORE, Lamar L. Light, Smith Land & Improvement Corporation and Bald Eagle Insurance Co., Ltd., respectfully request that this Honorable Court enter an Order (1) granting the consolidation of the following actions: 1. Lamar L. Light v. Smith Land & Development Corporation and Bald Eagle Insurance Co., Ltd., Docket No. 01-5053; 2. Smith Land & Development Corporation v. Lamar L. Light, Docket No. 03-834; and 3. Lamar L. Light v. Smith Land & Development Corporation and Bald Eagle Insurance Co., Ltd., Docket No. 03-1849 - 4- 1111Y/03 WhU 10:34 FAX 717 231 6637- KHUAU~ ~!NUN LLP I4J 008 (2) canceling the hearing scheduled for January 8, 2004 in Docket No. 03-1849; and (3) allowing the Parties to conduct discovery in the aforementioned consolidated case through March 31, 2004 and thereafter reschedule the same for trial with this Court. FOR LAMAR L. LIGHT: FOR SMITH LAND & BALD EAGLE: CALDWELL & KEARNS RHOADS & SINON LLP By: Jame~.~~ 3631 orth Front ~~;~r\) Harrisb g, PA 17110 (717) 232-7661 B I,E uare, P.O. Box 1146 - 5- ("') <::> 0 ~ (..) -,-, Cl .'-' -ace i'Y\ :-~~ ?J mn"' " Z::r~ I ",.,)71. t;. t;.. :'JIl J"". r'-' >.1- -<".: -,;j~ ~C; ;>> "l> C' :J:: :~ LC' $' 9 0 c: ~ L, r:- ::< 0::> -< 1.L/ .L::1/U.) "1:'.1) .LU;.)L rAA ILl ~.).L OO')I~ LAMAR L. LIGHT, Plaintiff v. SMITH LAND & IMPROVEMENT CORPORATION & BALD EAGLE INSURANCE CO., LTD., Defendants SMITH LAND & IMPROVEMENT CORPORATION, Plaintiff v. LAMAR LIGHT, Defendant LAMAR L. LIGHT, Plaintiff v. BALD EAGLE INSURANCE CO., LTD. & SMITH LAND & DEVELOPMENT CORP. Defendants AND NOW, this 6'~ .KnUl\1J~ ;) 11'lUl'lj LLr I.gj UUL DEe 0 ~ 2003 ~ 'It : IN THE COURT OF COMMON PLEAS 2MBERLAND COUNTY, PENNSYLVANIA . NO. 01-5053 CIVIL ACTION - LAW and IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. 03-834 Civil Term CIVIL ACTION - LAW and IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. 03-1849 CIVIL ACTION - LAW ORDER day of pu--W , 2003, upon consideration of the Parties' Joint Motion for Consolidation, it is hereby ORDERED that: ItINVA1ASNN3d JJ.NnOO or-.!\-fl838Wno OS:/ Wd c- JiU Sf) ^!:ilflONG~~K\',] ;1'1: :JO 3r'IJ';O", rJ~,il V.J_,. -J .-.,.r II/1H/UJ WhU 1U:32 FAA/li 231 bti3/+ KHUAV:::i :::ilNUN LLP I4IlJUJ (I) The Motion for Consolidation is GRANTED and the following actions are hereby consolidated 1. Lamar L. Light v. Smith Land & Development Corporation and Bald Eagle Insurance Co., Ltd., Docket No. 01-5053; 2. Smith Land & Development Corporation v. Lamar L. Light, Docket No. 03-834; and 3. Lamar L. Light v. Smith Land & Development Corporation and Bald Eagle Insurance Co., Ltd., Docket No. 03-1849 (2) The hearing currently scheduled for January 8, 2004 in Docket No. 03-1849 is cancelled, and; (3) The Parties shaH conduct discovery in the aforementioned consolidated case through March 31, 2004 and thereafter as appropriate reschedule list the matter for a hearing with this Court. /l J. ~ ('6) \ g.' OJ LAMAR L. LIGHT, Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYL VANIA v. / NO.01-5053 ./ SMITH LAND & IMPROVEMENT CORPORATION & BALD EAGLE INSURANCE CO., LTD., Defendants CIVIL ACTION -- LAW and SMITH LAND & IMPROVEMENT CORPORATION, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff JUDGE HESS v. NO. 03-834 Civil Term LAMAR LIGHT, Defendant CIVIL ACTION - LAW and LAMAR L. LIGHT, Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. NO. 03-1849 BALD EAGLE INSURANCE CO., LTD. & SMITH LAND & DEVELOPMENT CORP. JUDGE HESS Defendants CIVIL ACTION - LAW PLAINTIFF, SMITH LAND & IMPROVEMENT CORPORATION'S REPLY TO NEW MATTER OF DEFENDANT LAMAR LIGHT 500252.1 NOW COMES Plaintiff, Smith Land & Improvement Corporation ("Smith Land"), by and through its attorneys, Rhoads & Sinon LLP and files this Reply to New Matter of Defendant, Lamar Light ("Light") as follows: 46. Denied. Tbe allegations of this paragraph are specifically denied. Rather to the contrary, Light failed to act in an appropriate manner and breached his fiduciary obligations for the reasons set forth in the Complaint. 47. Admitted in part and denied in part. It is admitted that Light was responsible as chief operating officer of L.B.Smith, Inc. ("Smith") for developing and implementing valuation policies, practices and procedures with respect to the inventory for Smith. One of Light's primary responsibilities as an officer of Smith was to properly and profitably manage Smith's inventory which included monitoring and overseeing the actions of the vice presidents and branch managers and ensuring that these individuals followed Light's inventory practice, procedures and policies. While Light periodically advised officers of Smith and Smith Land of his policies, practices and procedures, these officers relied solely on Light's judgment to ensure that Light developed, maintained and implemented prudent and profitable policies, practices and procedures with respect to the operations of Smith, and in particular the inventory of Smith, so as to ensure that the best interest of the company were served. Tbe remaining allegations in this paragraph are specifically denied. 48. Denied. It is specifically denied that Light did not know of or approve transactions involving acquisition of used equipment or trade-ins. Rather, the acquisition of used equipment whether through purchases or trade-ins, was one of the primary responsibilities of Light who was responsible for overseeing, managing, and maintaining appropriate inventory for Smith. Often times, - 2 - Light was involved in transactions involving used equipment before, during and after the transaction. Particularly in instances where the transaction involved larger dollar amounts. 49. Denied. The allegations in this paragraph are sp,ecifically denied for the reasons set forth in paragraphs 47 and 48 above. By way of further answ~:r, Light would frequently converse with the Vice President and Branch Managers regarding the equipment transactions taking place. This was one of Lights primary responsibilities as Chief Operating Officer. 50. Denied as stated. It is admitted that Rick Jordan would tell Light on a regular basis that he must reduce the levels of inventory. Light continually represented that he was properly managing inventory levels. The remaining allegations in this paragraph are specifically denied and specific proof thereof is demanded at trial. 51. It is admitted that the valuation of equipment could be effected by changes in manufacturer's pricing, however, generally manufacturers had pri<:e increases on a yearly basis with a few exceptions. The remaining allegations are specifically denied and proof of the same is demanded at trial. 52. It is admitted that the valuation of the equipment could be effected by competitors' pricing of equipment. The remaining allegations in this paragraph are specifically denied and proof of the same is demanded at trial. 53. Admitted in part and denied in part. It is admitted that quarterly meetings did occur, however, very little time during these meetings was allocated towards discussing equipment valuations. Rather, Light continually reassured the officers of Smith and Smith Land that he was competently and appropriately managing the inventory of Smith in a manner that was in the best interest of the company. Accordingly, the other officers of Smith and Smith Land relied upon Light - 3 - as the Chief Operating Officer ("COO") with respect to this area of corporate affairs. The remaining allegations in this paragraph are specifically denied and proof of the same is demanded at trial. 54. Denied. To the extent that weekly reports were generated, they are documents which speak for themselves, and any attempt on Light's part to misconstrue the same is specifically denied. On the occasion when weekly reports were generated, there were: few trade-ins listed on the reports. Furthermore, as a Chief Operating Officer for Smith, Light was primarily responsible for appropriately valuing the inventory of Smith. 55. Denied. After reasonable investigation, Smith Land is without knowledge or information sufficient to form a belief as to the truth of the averments in this paragraph and the same are denied and proof thereof is demanded 56. Denied. The allegations in this paragraph are spedfically denied for the reasons set forth above. By way of further answer, as Chief Operating Officer and the person primarily responsible for overseeing the inventory of Smith, Light was the only person who knew inventory values. Light was responsible for selecting the machines which would receive "writedowns" and was responsible for determining the amount of the writedowns. 57. Denied. The allegations in this paragraph are specifically denied. Specific proof of the same is demanded of Light. 58. It is admitted that Light was annually involved in meetings with auditors. Any and all information for the valuation of inventory for Smith which was provided to the auditors, came solely from Light. -4- 59. Denied. The allegations in this paragraph are specifically denied as set forth in paragraph 48 above. The remaining allegations in this paragraph are specifically denied and proof thereof is demanded at trial. 60. Denied. After reasonable investigation Smith Land is without sufficient information or knowledge to form a belief as to what "Light believes" and accordingly, these allegations are denied. By way of further answer, Light's successor sufficiently, prudently and appropriately managed the affairs of Smith with the objective of pursing the best interest of the company, given the circumstances existing as a result of Light's actions. 61. Denied. The allegations in this paragraph are specifically denied for the reasons set forth above. By way of further answer, Light was solely responsible for developing, implementing and overseeing all policies, practices, and procedures associated with the valuation and managing of the inventory. The remaining allegations are denied. After reasonable investigation, Smith Land is without sufficient information or knowledge to form a belief as to the truth of the averments in this paragraph and therefore the same are denied and proof thereof is d~:manded at trial. 62. Admitted in part. It is admitted that on one occasion TEREX and VOLVO each changed the content of their equipment so as to lessen the value of the equipment. However, these companies as well as other manufacturers which Smith dealt with, increased prices on a regular basis. Any adverse affect on the valuation of Smith's inventory was primarily as a result of Light's improper valuation policy and practices. The remaining allegations are denied since after reasonable investigation, Smith Land is without sufficient information or knowledge to form a belief as to the truth of these averments and proof thereof is demanded at trial. - 5 - 63. Denied. Smith is without sufficient information or knowledge after reasonable investigation to understand the "inappropriate action" which Light is referring to and accordingly, the allegations of this paragraph are denied and specific proof is demanded at trial. By way of further answer, any actions taken by Smith after Light's departure were done solely to correct the improper business actions taken by Light and were done with the objectiv~: of pursuing the best interest of the company. 64. Denied. The allegations in this paragraph are specifically denied and proof of the same is demanded from Light at trial. By way of further answer, TEREX ceased doing business with Smith because of Smith's expansion into the VOLVO equipment market place which began when Light was Chief Operating Officer at Smith. 65. Denied. It is specifically denied that Light was not responsible for the 3332 account. By way of further answer, Light as COO had responsibility for the 3332 account. 66. Denied. After reasonable investigation, Smith is without sufficient information or knowledge to form a belief as to Light's beliefs and accordingly, tile allegations in this paragraph are specifically denied. By way of further answer, any actions taken by Light's successor were necessitated by Light's failure to act in Smith's best interest as detailed in the Complaint and this Reply. Light's successor did not act inappropriately or arbitrarily in dealing with the 3332 accounts. 67. Denied. After reasonable investigation Smith is without sufficient information or knowledge to know of the rebates or credits that were to be neceived from manufacturers and accordingly, is unable to verify the accuracy of these allegations and the same are denied. 68. Denied. It is specifically denied that Light was not aware or did not approve in advance any recourse transaction before the transactions took place. Rather, Light was involved with -6- regional vice presidents and branch managers regarding these transactions and ultimately was responsible for authorizing all such transactions. 69-72. These paragraphs contain a conclusion of law and do not require a response. To the extent these paragraphs contain factual averments, they are denied for the reasons set forth in the Complaint and Reply. Furthermore, any factually allegations in these paragraphs are denied since after reasonable investigation, Smith is without sufficient information or knowledge to form a believe as to the truth of these averments and proof there of is demanded aT trial. 73. Denied. The allegations in this paragraph are specifically denied. Rather, the executives at Smith and Smith Land relied upon Light as COO to maintain, manage and appropriately evaluate Smith's inventory. By way of further answer, Light was Jrequently told to reduce inventory levels however, Light continually reassured corporate executives of Smith and Smith Land that he was appropriately managing this inventory. 74. Denied. The allegations in this paragraph are specifically denied for the reasons set forth in the Complaint and this Reply. 75. Denied. Recourse transactions are not common pracTices of Smith. By way of further answer, Light's authorizations of such transactions were poor business decisions and a violation of his fiduciary obligations to Smith. Said transactions were not structured to be in the best interest of Smith, but rather to benefit Light either directly or indirectly. -7- WHEREFORE, L.B. Smith respectfully requests that this Court enter judgment in favor of the Smith Land & Improvement Corporation and against Defendant, Lamar Light together with costs and fees as may be allowed by law. Respectfully submitted, RHOADS & SINON P By: l~v\-- CYh\R-fh1 /J:p Dean F. Piermattei, Esquire One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Plaintiff, Smith Land & Improvement Corporation - 8 - JAN-06-2004 TUE 03:06 PM L B SMITH CORPORATE FAX NO, '7 RIIOAIlS SINON LLP Ol/UG/U4 TUE 14: 33 FAX 717 231 663 _,. I 7177955303 P. 02/02 ~002 ~ -.../ VERIFrCA TIO~ Richard E, Jordan, n, deposes and says, subject to the penalties of I g Pa, C.S, ~ 4904 relating to unsworn falsifialtion to authorities, that I am the Chainnan, CEO and President of Smith land & Improvement Corporation and that I make this verification by its authority and that the facts set forth in the foregoing are true and correct to thc best of my 1aI0wledge, infonnation and belief Date; l-k?J#j- :a- ?JH~ 2r= R'ichar~rdan n . CERTIFICATE OF SERVICE I hereby certify that on this 6th day of January, 2004, a true and correct copy of the foregoing was served by means of facsimile and United States Mail, Postage Prepaid upon the following: James R. Clippinger, Esquire Caldwell & Kearns 3631 North Front Street Harrisburg, PA 17110 /\ () ~) uJJ!.Lt1t (lLJ ) Teresa L:J;ulhamus (') c- ~,~ ". - 1 .~ , '" = = _C" <- ::r_ Z I 0'> o .'11 ':l! rn:n ,- "Dr"n '00 () .1.. ~S~i c.jin 7"1 :u -1: .x:- CJ a :r.) -< LAMARL. LIGHT, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v. NO. 01-5053 SMITH LAND & IMPROVEMENT CORPORATION & BALD EAGLE INSURANCE CO., LTD., Defendants CIVIL ACTION - LAW and SMITH LAND & IMPROVEMENT CORPORATION, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff JUDGE HESS v. NO. 03-834 Civil Term LAMAR LIGHT, Defendant CIVIL ACTION - LAW and LAMARL. LIGHT, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v. NO. 03-1849 BALD EAGLE INSURANCE CO., LTD. & SMITH LAND & DEVELOPMENT CORP. JUDGE HESS Defendants CIVIL ACTION - LAW MOTION TO AMEND THE PLEADINGS NOW COME Smith Land & Improvement Corporation and Bald Eagle Insurance Co., Ltd. (collectively "Smith Land"), by and through their attorneys, Rhoads & Sinon LLP, and file the following Motion to Amend the Pleadings stating as follows: 1. On August 29, 2001, Lamar Light ("Light") filed a Complaint against Smith Land seeking damages allegedly owed by Smith Land pursuant to a Judgment Promissory Note issued 56688&.1 in connection with Light's employment at Smith Land, Cumberland County Docket No. 01- 5053. 2. Specifically, Light alleged that pursuant to an Amended Stockholder's Agreement between Light and Smith Land, Smith Land was obligated to purchase all shares in Smith Land held by Light upon his resignation. (Complaint, ~9). 3. In the Complaint, Light asserts that Smith Land represented that the value ofthese shares would reach $4,000,000, the ceiling set forth in the Stockholder's Agreement. (Complaint, ~11). 4. On October 2, 2001, Smith Land filed an Answer and New Matter denying any liability to Light. In the Answer, Smith Land explains that the Stockholder's Agreement sets forth a floor and ceiling with respect to the purchase price of Light's stock, $2,500,000 and $4,000,000, respectively. (Answer & New Matter, ~9). 5. In the Answer and New Matter, Smith Land also asserts that the true book value of Light's stock, based on its Auditors' determination, was $3,415,094. (Answer & New Matter, ~~18, 20). 6. Since that time, Light's action has been consolidated with litigation by Smith Land against Light, Cumberland County Docket No. 03-834, and a Confession of Judgment Action filed by Light against Smith Land, Docket No. 03-1849. 7. The parties have engaged in discovery in these consolidated actions. -2- 8. This discovery and further accountings on behalf of Smith Land have revealed that the actual book value of Light's stock is not $3,415,094. Instead, the further accounting has discovered that there were liabilities not properly accounted for in the $3,415,094 determination. 9. Once these liabilities were correctly computed, the actual book value of the Light stock to be repurchased under the Amended Stockholder's Agreement is zero or a negative number. As a result, the valuation puts into effect the floor value of the stock, $2,500,000, as set forth in the Amended Stockholder's Agreement. 10. Smith Land seeks to amend the Answer and New Matter to properly state the actual value of the Light stock as zero or a negative number and implicate the floor set forth in the Amended Stockholder's Agreement. 11. Under Rule 1033 of the Pennsylvania Rules of Civil Procedure, amendment of pleadings is allowed at any time. Pa. R. Civ. P. 1033. 12. Courts are clear, moreover, that leave to amend a pleading should be liberally granted at any stage of the pleadings unless there is an error of law or resulting prejudice to an adverse party. Connor v. Alleghenv General Hospital, 501 Pa. 306, 310, 461 A.2d 600, 602 (1983). Further, the right to amend pleadings is normally granted with liberality so as to secure the determination of cases on their merits whenever possible. 13. In the present matter, amendment of the Answer & New Matter is not an error of law and no prejudice will result from the modification of these allegations. Further, this amendment does not implicate any statute oflimitations and does not add parties to the litigation. - 3- 14. Despite the Rule and caselaw requiring liberal amendment of pleadings, counsel for Smith Land contacted counsel for Light and counsel refused to agree to permit Smith Land to amend the Answer & New Matter, requiring Court Order. WHEREFORE, Smith Land & Improvement Corporation and Bald Eagle Insurance Co., Ltd. respectfully request that this Honorable Court grant their Motion to Amend the Pleadings and enter an Order permitting them to amend the Answer & New Matter within twenty (20) days of the date of the Order. Respectfully submitted, RHOADS & SINON LLP By; [?-p( -tv~ff~ ('7lCli) Dean F. Piermattei, EsqUire Stephanie E. DiVittore, Esquire One South Market Square P. O. Box 1146 Harrisburg, P A 17108-1146 (717) 233-5731 Attorneys for Smith Land & Improvement Corporation & Bald Eagle Insurance Co., Ltd. - 4- CERTIFICATE OF SERVICE I hereby certify that on this g!!2 day of June, 2005, a true and correct copy of the foregoing Motion to Amend the Pleadings was served by means of facsimile and United States Mail, postage prepaid upon the following: James R. Clippinger, Esquire Caldwell & Kearns 3631 North Front Street Harrisburg, PA 17110 ~Q~v., ) Teresa L. Paulhamus Q "'" -.;-;.~' . 9~~ r , . (,fl-' c- ~~ . oj; ~~~~ .-> = C::> <./., L_ C::, :.Ice - C> ~' .,; -" -( "~ > - C:-? ~ ~-n [11p -rJ\:Q -hC" t~~f~" "fi~ ~::~~ '::::, ~ C< - (..n - 566826.1 LAMAR L. LIGHT, Plaintiff v. SMITH LAND & IMPROVEMENT CORPORATION & BALD EAGLE INSURANCE CO., LTD., Defendants SMITH LAND & IMPROVEMENT CORPORATION, Plaintiff v. LAMAR LIGHT, Defendant LAMAR L. LIGHT, Plaintiff v. BALD EAGLE INSURANCE CO., LTD. & SMITH LAND & DEVELOPMENT CORP. Defendants IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYL VANIA NO. 01-5053 CIVIL ACTION - LAW and IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYL VANIA JUDGE HESS NO. 03-834 Civil Term CIVIL ACTION - LAW and IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYL VANIA NO. 03-1849 JUDGE HESS CIVIL ACTION - LAW MOTION FOR ISSUANCE OF SCHEDULING ORDER NOW COME Smith Land & Improvement Corporation and Bald Eagle Insurance Co., Ltd. (collectively "Smith Land"), by and through their attorneys, Rhoads & Sinon LLP, and file the following Motion for Issuance of Scheduling Order stating as follows; I. On October 22, 2003, Smith Land filed a Complaint against Lamar Light ("Light") seeking damages based on Light's breach of fiduciary duty and tortious interference in connection with his resignation as an officer and employee of Smith Land, Cumberland County Docket No. 03-834. 2. Prior to that time, on August 29, 2001, Light had filed an action against Smith Land seeking a declaration that a Promissory Note, issued by Bald Eagle in connection with an Amended Shareholders' Agreement between Smith Land and Light, was valid and enforceable, Cumberland County Docket No. 01-5053. 3. On April 22, 2003, Light filed a Confession of Judgment Complaint confessing judgment, under the Promissory Note, against Smith Land in the amount of $2,674,220.93, Cumberland County Docket No. 03-1849. 4. These three actions were consolidated by Court Order dated December 5, 2003. 5. In the December 5, 2003 Order issued by this Court, this Court directed that the parties should proceed with discovery "through March 31, 2004 and thereafter as appropriate. . . ." (December 5, 2003 Court Order). 6. Based on the volume of documents produced in this case, however, as well as the availability of witnesses, the parties agreed they would attempt to complete factual discovery by the end of June, 2005, provided the necessary depositions could be completed by that time. (A copy of February 23,2005 correspondence from Light's counsel confirming the same is attached hereto as Exhibit "A" and incorporated herein by reference). -2- 7. Since that time, the parties have moved forward with discovery, conducting written discovery and depositions in accordance with the Pennsylvania Rules of Civil Procedure and direction of this Court. 8. In that respect, the parties proceeded with document production and exchanging interrogatories. This included production of extensive corporate records from Smith Land, a company which closed over 2 years ago requiring retrieval ofthose records from storage. 9. Light then proceeded with scheduling depositions of Smith Land witnesses. Specifically, Light's first round of depositions of Smith Land witnesses included the depositions of Nicole Broscius, Ryan Sherwood, Richard E. Jordan, II, and Tim Hanlon. These depositions began February 17, 2005 and were completed February 21, 2005. 10. Light scheduled his second round of depositions of Smith Land witnesses, Michael Kline, Kevin Mitchell, James McGrew and Scott Rumberger. These depositions were completed in April, 2005. 11. Thereafter, Smith Land proceeded to schedule depositions of individuals identified by Light in his discovery responses as individuals with knowledge of the facts at issue in this litigation and individuals he intends to call as witnesses during the trial in this litigation. Smith Land identified the following witnesses for the first round of depositions: Jeffrey Troutman, Sean Collins, James Mackinson, Chris Wilmont, John Banes, Robert Somers, Craig Adams and Chad Hollinger. Smith Land also indicated it would conduct a second round of depositions, deposing Lamar Light and Mike Savastio. - 3 - 12. These depositions were scheduled for the weeks of May 9, 2005 and June 13, 2005. The first week of depositions were cancelled, however, as the parties were discussing mutual resolution ofthis action. 13. With respect to the second week of depositions, Light's counsel indicated that, to the extent the matter could not be resolved through settlement, he would discuss the availability of the witnesses for the depositions at a settlement conference the parties were conducting on June 7, 2005. 14. At the settlement conference, when no settlement could be reached, Light's counsel expressly represented that he took steps to have the witnesses available for deposition the week of June 13, 2005. Consistent with these representations, counsel for Smith Land forwarded a letter confirming this schedule June 7, 2005, the date of the settlement conference. (A copy of this correspondence is attached hereto as Exhibit "B" and incorporated herein by reference). 15. Despite these representations, on June 8, 2005, Light's counsel forwarded correspondence indicating that they would produce only Somers, Banes, Light and Savastio. The correspondence states that because Light no longer anticipates calling the remaining individuals as witnesses, they will not produce them for deposition. (A copy of the June 8, 2005 correspondence is attached hereto as Exhibit "c" and incorporated herein by reference). 16. Instead, Light's counsel requires Smith Land's counsel to contact these individuals, most of whom are located outside the Commonwealth including Florida and North Carolina, and arrange for the depositions. Further, Light indicated subpoenas would be required for two of the witnesses he agreed to produce. - 4- 17. Based on Light's refusal to produce individuals with knowledge as identified by him in discovery, and his failure to inform Smith Land of the same until June 8, 2005, Smith Land requires additional time to complete factual discovery. 18. Counsel for Smith Land also has scheduling conflicts, as he is scheduled for an arbitration in Baltimore, Maryland beginning Sunday, June 19,2005, depositions in Philadelphia the week of July 11, 2005 and a jury trial in Lancaster County the week of July 25, 2005. Counsel reasonably believes, though, that factual discovery can be completed by August 31, 2005. 19. As a result, Smith Land requests that this Court issue a scheduling order setting forth the following deadlines in this matter: completion of factual discovery August 31, 2005, expert reports due September 30, 2005, rebuttal reports due October 15, 2005 and trial thereafter. 20. Smith Land submits that this request is made for good cause and is reasonable in light of the fact that it seeks an additional two month period to complete factual discovery where Light's depositions were only completed in April, 2005. 21. Smith Land contacted counsel for Light, Jeffrey McGuire, Esquire, and counsel refused to agree to these scheduling deadlines. - 5 - WHEREFORE, Smith Land & Improvement Corporation and Bald Eagle Insurance Co., Ltd. respectfully request that this Honorable Court grant their Motion for Scheduling Order and enter an Order permitting them to continue with discovery, setting the deadline for completion of factual discovery for August 31, 2005, the deadline for exchange of expert reports of September 30,2005, and the deadline for exchange of rebuttal reports of October 15,2005. Respectfully submitted, RHOADS & SINON LLP By: !;?PI e v vVLA-tj---c.--L I >6() Dean F. Piermattei, Esquire ' Stephanie E. DiVittore, Esquire One South Market Square P. O. Box 1146 Harrisburg, P A 17108-1146 (717) 233-5731 Attorneys for Smith Land & Improvement Corporation & Bald Eagle Insurance Co., Ltd. - 6 - EXHIBIT "A" CALDWELL & KEARNS A PROF"ESSJONAL CORPORATION JAMES R. CLIPPINGER CHARLES J. DEHART. III JAMES D. CAMPSELL. JR. JAMES L. GOLOSMITH P. DANIEL. AL.TLAND JEFF"REY T. McGUIRE. STANLEY J. A. L.ASKOWSKI DOUGLAS K. MARSICO BRETT M. WOODBURN RAY J. MICHALOWSKI DOUGLAS L. CASSEL "ALSO A MEMBER 01'" NJ BAR ATTORNEYS AT LAW OF COUNSEL. RICHARD L. KEARNS CARL G. WASS 3631 NORTH FRONT STREET HARRISBURG, PENNSYLVANIA 17lJO-1533 THOMAS D. CALDWELL. JR. 11928- 20011 February 23,2005 717-232-7661 ,,"AX: 7t7-232-2766 thefirrn@caldwellkearns.com Dean F. Piermattei , Esquire Rhoads & Sinon, LLP One South Market Square, 12th Floor P. O. Box 1146 Harrisburg, PAl 71 08-1146 Re: Lieht vs. Smith Land & Improvement. et al. Cumberland County Civil Action No. 01-053 Smith Land & Improvement Corporation vs. Lieht Cumberland County Civil Action No. 03-834 Lieht vs. Bald Eaele Insurance Co.. et al. Cumberland County Civil Action No. 03-1849 Dear Dean: At depositions we discussed further discovery and a discovery deadline in this case. You are going to hold March 30th, 31 st and April I ", as well as the week of May 9th and the week of June 13th for depositions so that we can conclude the discovery in this case on or before June 30th. Please let me know if any of these dates do not work for you or your clients. At this point, Mr. Rumsberger has indicated that he is available for his deposition on Wednesday, March 30th at 1:00 p.m. I have spoken with Attorney DeMarco who is checking on the availability ofthe accountants. JTM:dlj cc: Lamar L. Light 01-283/84797 EXHIBIT "B" A /~ ij'" ).;,tt ~,,' ,..--<,? .-v/:~./. j~~*:, G-'l !,;;.>c:..v //..J" t"lj,\~\,-i). Rf{bADS ~~ & SINON LLP Dean F. Piermattei ph (717) 233-5731 fx (717) 231-6637 dpiermattei@rhoads-sinon.com FILE NO, 12991148 .-._-~. ._.~_.-----_._--~._---------.~--- June 7, 2005 Re: Li!!ht v. Smith Land & Imvrovement et al. James R. Clippinger, Esquire Caldwell & Kearns 3631 North Front Street Harrisburg, P A 1711 0 VIA FACSIMILE (717) 232-2766 & REGULAR MAIL Dear Jim: Assuming settlement is not going to take place as per my letter of June 7, 2005, I would like to begin taking depositions in our offices on June 14, 2005. I would like to take the depositions of the following individuals: Jeffrey Troutman, Sean Collins, James Mackinson, Chris Wilmont, John Banes, Robert Somers, Craig Adams and Chad Hollinger. Thereafter I intend to produce their transcripts to some experts who are assisting in this matter and I would like to conduct the second round involving the deposition of Lamar Light and Mike Savastio and any other witnesses deemed to be relevant in this matter. Furthermore, I am unable to conclude our discovery by the end of June as we originally contemplated. I am currently working with several experts and they are in the process of reviewing the deposition transcripts from the most recent round of depositions. Additionally, I wish to provide them with the deposition transcripts for the above-mentioned individuals. To the extent any additional paper discovery is required based on the depositions, I will request the same from you and thereafter, I will provide you with our expert reports. I would also request that you provide me in advance with any expert reports that you have in light of the fact that I have requested the same through our discovery. I anticipate that the time period required to conclude depositions and any other paper discovery along with producing expert reports would take several more months putting discovery to the end of August. I do not believe this is unreasonable and if you are unwilling to work with me on this time-frame, I will move forward with requesting a scheduling conference with the Court. Very truly yours, RHOADS & SINON LLP ,.----' --"-~....:, ""'By:" , DeaJil::~<Piermattei > DFP/tlp 561302.1 Rhoads &. Sinon LLP . Attorneys at Law. Twelfth Floor. One South Market Square. P. O. Box 1146 Harrisburg, PA 17108-1146' ph (717) 233-5731' fx (717) 232-1459' www.rhoads-sinon.com --- EXHIBIT "C" JUN-O~-2005 WED 03:19 PM .~ FAX NO. p, 02/Ui: \ CAl-PW~1.1 ,.. PAOFES~I()'" ...J.6,ME:5 R. CLIPP/NQE:R CH"~L.ES .). t:l~HA'H. III JAME:5 D. CAMPBEL,L. JR. -'AME:5 I.. GOl..D5MlTH p, CANIEl- ","11."'''''D -'E::FFRE;'" T. M.;:Q;UIfi'll;" 5TANI.~T .J. A. ..",SI<:,OWSKI OCUGL.....S \(, M...FfS(CO 5R'ETT /01. WCOt!I!iU~N FlAT ",I, MICHAl.OWSKI PouQL.~S I.. O;::.t.1$5EL. -AI..:>Q " ""tMEltJl OF" N..J liAR ATTOFlNE U,,",SCL. .. KE:ARNS, . W....S~ 3631 NORTH HARRISBURG: Pl':NI l"LPWt:l.l., J". .100,11 June 8, 201 IZ-7eel 13il1-:i7l$ie V.lIkl!lilI115.~rn VlAFAX @ 231-6637 Dean F. Picm1attei , Esquire Rhoads & Sinon. LLP One South Market Square, 12'" Floor P. O. Box 1I46 Hanisburg, PA 17108.1146 Rc: Lhrht vs. Smith Land & ImDTovcmcnt. ct al. Cumberland County Civil Action No. 01-0S3 Dear Dean: We have received your faxes of June 7, and June 8, concerning settlemL'Ilt, discovery and amending the pleadings in this case. 11 seems clear to us that this case is not going to settle at this point. We believ.e that after mal, we will receive ajudgrnent in excess of $4,000,000 and the only reason we are willing; to discuss settlement is because wc understand that collection will be difficult. We need to move fOrward with discovery. We will be tiling a motion with the Court in an effort to preclude any discovery by your clients, after June 30. In addition, we will be opposing your motion to amend the pleadings at this time. We believe this is merely a further delaying tactic. With regard to the specific depositions, Mr. Somers is available at 9:00 a,m. on Tuesday moming. Mr. Banes is available at 9:00 a.m. on WedneSday morning. With regard to the other individuals you have listed. we do not anticipate calling them to tho tTial of this matter; therefore, if you wish to depose them you will need to contact them to make the arrangements. Mr. Light and Mil..-e Savast!o can be avajJable on a Thursday or Friday, if you want me to schedule them. ' With regard to Mr. Banes and Mr. Somers, YOll will need to provide me with subpoenas in advance so that I can deliver the subpoenas to them (so they can provide them to their employers, if necessary). lTM:se ce: Lamar Light () \ 283188855 James R. Clippinger, Esquire Caldwell & Kearns 3631 North Front Street Harrisburg, P A 17110 o CERTI~TE OF SERVICE I hereby certify that on this ~ day of June, 2005, a true and correct copy of the foregoing Motion for Issuance of Scheduling Order was served by means of facsimile and United States Mail, postage prepaid upon the following: o c .-> c.:? C:.:> 1:,.'"' L-- (~,:: $<\'- - c' , -<-. :< ~~ -- Q. --' ::r:~ rne. :'f. \::'~~ c) fl-). ".0-\': -~~1-j -) , . fTl '~1 ~ri ..c:::. 2';:; - <..;0 ~- . LAMAR L. LIGHT, Plaintiff, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. NO.OJ-5053 -- SMITH LAND & IMPROVEMENT CORPORATION & BALD EAGLE INSURANCE CO., LTD., Defendant CIVIL ACTION - LAW And IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYL VANIA SMITH LAND & IMPROVEMENT CORPORATION, Plaintiff, v. JUDGE HESS NO. 03-834 CIVIL TERM LAMAR LIGHT, Defendant, CIVIL ACTION - LAW And IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAMAR LIGHT, Plaintiff, v. NO. 03-1849 BALD EAGLE INSURANCE CO., LTD. & SMITH LAND & DEVELOPMENT CORP., JUDGE HESS Defendant. CIVIL ACTION - LAW LAMAR LIGHT'S REPLY TO SMITH LAND'S MOTION TO AMEND THE PLEADINGS AND NOW comes Lamar L. Light, by and through his attorneys, Caldwell & Kearns, reply to Smith Land & Improvement Corporation's (hereinafter, "Smith") Motion to Amend the Pleadings and avers the following: I. Admitted. 2. Admitted. . . 3. Admitted. By way of further answer, Richard E. Jordan, II, the Chairman and CEO of Smith Land and Improvement Corporation admitted that it was his belief that the value of the shares would exceed Four Million Dollars ($4,000,000.00) and it was his decision to pay Lamar Light Four Million Dollars ($4,000,000.00). See Deposition of Richard E. Jordan, II, page 62. A true and correct copy of this page is attached hereto as Exhibit "A" and incorporated herein by reference. 4. Admitted. 5. Admitted. 6. Admitted. 7. Admitted. 8. Denied. By way of further answer, the auditors testified and there has been no discovery indicating the auditor's valuation was incorrect. By way of further answer, there has been no discovery conducted by Smith Land that revealed any change in the actual book value of Light's stock. 9. Denied. 10. Admitted. II. Admitted. 12. Admitted. 13. Denied. It is believed and therefore alleged that this is merely a further attempt to delay the trial of this matter. 14. Admitted. 2 WHEREFORE, Lamar L. Light requests that Your Honorable Court deny Smith Land's Motion to Amend the Pleadings. Respectfully submitted, Date: June 17,2005 L & KEARNS ~ By: Jef . McGuire, Esquire ey ID No. #73617 ames R. Clippinger, Esquire Attorney ID No. 07159 3631 North Front Street Harrisburg, PA 17110-1533 (717) 232-7661 Attorneys for Plaintiff/Respondent, Lamar Light 01-283/89168 3 . ------ ~;\,rI- ~ ~ - . 62 some way? A Not at the 3.4. Q At the $4 million number? A It was not calculated at the four. It was a guesstimate. We guessed that it would be there. It was the most expeditious way to get them into a payment mode of starting to receive payments for the equity in the company that we owed them. I never sat and calculated it. I can tell you that. Q Okay. Do you know who did the calculation? A I don't believe anybody did. I believe it was my instruction to Mr. Sherwood to do the note for 4 million. And I honestly thought that's how we would end up. I thought we would end up, and it would be done. Because we were at a point that we would have -- it would have been 4 million. And -- but as we got into year end adjustments and so forth, it was reduced. Q Okay. A We shouldn't have done it. I mean, I'll be the first one to say. And I'll take full blame for issuing it because it was the wrong thing to do because we did not make the calculation. It was not our place to do it. That's the place of the auditors doing the year end financial statements. CERTIFICATE OF SERVICE AND NOW, this 1J!!day of ~ , 2005, I hereby certify that I have served a copy of the within document on the following by depositing a true and correct copy of the same in the U.S. Mails at Harrisburg, Pennsylvania, postage prepaid, addressed to: Dean F. Piermattei, Esquire Rhoads & Sinon, LLP One South Market Square, 12th Floor P. O. Box 1146 Harrisburg, PAl 71 08-1146 CALDWELL & KEARNS By: 01/283/89168 r-;) C) c:;> -1"' C;,;,') ,p L._--: c,' -~.. f") (.:") ....1~' -" ~~.,.,. (~.? c;;> . v. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5053 ..,/ LAMAR L. UGHT, Plaintiff, SMITH LAND & IMPROVEMENT CORPORATION & BALD EAGLE INSURANCE CO., LTD., Defendant SMITH LAND & IMPROVEMENT CORPORATION, Plaintiff, CIVIL ACTION - LAW And IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. JUDGE HESS NO. 03-834 CIVIL TERM LAMAR LIGHT, Defendant, CIVIL ACTION - LAW And IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAMAR LIGHT, Plaintiff, v. NO. 03-1849 BALD EAGLE INSURANCE CO., LTD. & SMITH LAND & DEVELOPMENT CORP., JUDGE HESS Defendant. CIVIL ACTION - LAW LAMAR LIGHT'S REPLY IN OPPOSITION TO SMITH LAND'S REOUESTED SCHEDULING ORDER AND NOW comes Lamar Light aIkIa Lamar L. Light, by and through his atlomeys, Caldwell & Kearns, and files the within Reply in opposition to Smith Land & Improvement Corporation's (hereinafter, "Smith Land") requested Scheduling Order and avers the following: I. Admitted. 2. Admitted. 3. Admitted. . , 4. Admitted. 5. Admitted. 6. Admitted in part. It is admitted that the parties have agreed that factual discovery would be completed by June 30, 2005. Exhibit "A" is a true and correct copy of the undersigned's February 23,2005, correspondence. 7. Admitted. 8. Admitted in part. It is admitted that Smith Land produced extensive records. It is unknown whether those records were retrieved from storage. 9. Admitted. 10. Admitted. 11. Admitted in part. It is admitted that Smith Land has identified the listed witnesses for a "first round of depositions" for the first time on June 7, 2005. By way of further answer, only two of the witnesses listed in the "first round of depositions" are witnesses which Light presently intends to call at the trial of this matter. 12. Admitted in part. It is admitted that per our March 14, 2005, correspondence, the weeks of May 12, and June 13,2005, were being held for depositions in this case. Smith Land cancelled the depositions the week of May 9, allegedly because an effort would be made to settle the case; although, no offer was ever made in this matter until June 7, 2005. By way of further answer, Light agreed to the canceling of the depositions the week of May 9 with the understanding that discovery would still be completed by the June 30 deadline. 13. Admitted. By way of further answer, we had requested that the witnesses Smith Land wished to depose be identified several times prior to the settlement conference. 2 , ~ " 14. Admitted. By way of further answer, Light asked aU the witnesses he listed to try to be available during the weeks of May 9, and June 13,2005. Light will make every effort to cooperate with obtaining the witness depositions. However, the only witnesses that we have any actual control over, are Mr. Light and Mr. Savastio whom Smith Land has not deposed despite their availability. 15. Denied as stated. See paragraph 14. By way of further answer, see the March 14, 2005, correspondence from the undersigned, which is a letter indicating which witnesses we intend to call to the trial ofthis matter as requested by Smith Land's counsel in order to streamline the depositions. A copy of the March 14,2005, correspondence is attached hereto as Exhibit "A" and incorporated herein by reference. 16. Denied as stated. It is not clear under what basis Smith Land's counsel believes depositions ofthe additional witnesses are necessary as they are not currently listed as witnesses by any party in this matter. 17. Denied. By way of further answer, Smith Land first identified what witnesses they wished to depose on June 8, 2005, and included numerous witnesses that the undersigned previously indicated would not be called at the trial of this matter. By way of further answer, this side has requested numerous times to move forward with and schedule the depositions, both during the week of May 9, and June 13,2005. By way of example, see the undersigned's letter dated April 28, 2005, a copy of which is attached hereto as Exhibit "B" and incorporated herein by reference as weU as a letter of May 10,2005, attached hereto as Exhibit "C" and incorporated herein by reference. 18. Admitted based on information and belief. 19. It is admitted that Smith Land is requesting a Scheduling Order as set forth. By way of further answer, Lamar Light would request a Scheduling Order setting forth that factual discovery be 3 .1 . completed by June 30, 2005, expert reports by July 30, 2005, and rebuttal reports by August 30, 2005, with trial to commence in September. 20. Denied. 21. Denied by way of further answer. This case has been pending since 2001. Discovery deadlines have previously been set and modified on numerous occasions and two weeks were set aside for Smith Land to conduct the depositions. Of the ten days set aside, Smith Land cancelled one full week and took only two depositions. It is believed that this is merely another attempt to delay the trial of this matter. WHEREFORE, Lamar Light requests that Your Honorable Court enter a scheduling order setting a deadline for completion offactual discovery for June 30, 2005, the deadline for exchange of expert reports of July 30,2005, and a deadline for exchange of rebuttal reports for August 30, 2005. Respectfully submitted, Date: June 17, 2005 L & KEARNS ~/ By: J . McGuire, Esquire Attorney ID No. #73617 James R. Clippinger, Esquire Attorney ID No. 07159 3631 North Front Street Harrisburg, P A 17110-1533 (717) 232-7661 Attorneys for Respondent, Lamar Light 01-283/89164 4 , " . ., -b)hlbl'+ A ~ .. CALDWELL & KEARNS A PROF"ESSIONAL CORPORATION JAMES R. CLtPP1NGER CHARLES.J DCHI'.RT. III JAMES D. CAMPBELL. JR JAMES L. GOLDSMITH P. DANtEL ALTLAND JEFFR(.Y T, Mc.GUIRE- STANLEY J. A. LASKOWSKI DOUGLAS K. MARSICO BRETT M. WOODBURN RAY J. MICHALOWSKI OOUGLAS L. CASSEL ATTORNEYS AT LAW OF COUNSEL RICHARO L. KEARNS CARL G, WASS 3631 NORTH FRONT STREET HARRISBURG. PENNSYLVANIA 17ll0-1533 THOMAS D. CALDWELL. JR. 1)928 - 20011 -ALSO A MEMBER of N.J BAR March 14,2005 '717-232-7661 FAX: 717-232-2766 thefrrm@caldwellkearns.com Dean F. Piermattei , Esquire Rhoads & Sinon, LLP One South Market Square, 12th Floor P. O. Box 1146 Harrisburg, PA 17108-1146 Re: Light vs. Smith Land & Improvement, et al. Cumberland County Civil Action No. 01-053 Smith Land & Improvement Corporation vs. Light Cumberland County Civil Action No. 03-834 Light vs. Bald Eagle Insurance Co., et al. Cumberland County Civil Action No. 03-1849 Dear Dean: Based upon the information we have at this point regarding your client's claims in this matter, we anticipate calling the following witnesses at the trial of this matter: John Banes. Craig Cleary, Pat Sherwood. Bob Summers, Mark Dowdell, John Seroskie, Troy Abel, Mike Savastio and Lamar Light. In addition to the previously listed witnesses, we reserve the right to call Rocky Chemo, Jim Dodle, and Collin Robinson, in addition to any witnesses you have previously identified, whether or not we depose them. I hope this is helpful. Obviously, if you are willing to advise us who are calling at trial, and for what issues, or if you are willing to drop some of the allegations in your Complaint, we may be able to further narrow our witness list. Very tml y yours, Jeffrey T. McGuire CALDWELL & KEARNS JTM:dlj 01-283/85547 . ,I I Cyh,'bA B ~ - H.,l <; I'"~ l\;:;~L' "",\..,'n<f.."; , . , " . , , ,. CALDWELL & KEARNS' A PROFESSIONAL CORPORATION JAMES R. CLIPPINGER CHARLES J. DEHART. III JAMES D. CAMPBELL, JR JAMES L. GOLDSMITH P DANIEL ALTLAND JE:FFREY T. McGUIRE- STANLE:Y J. A. LASKOWSKI DOUGLAS K. MARSICO BRETT M. WOODBURN RAY.). MICHALOWSKI DOUGLAS L. CASSEL .ALSO A MEMBER OF N..J SAR ATTORNEYS AT LAW OF COUNSEL RICHARD L KEARNS CARL G WASS 3631 NORTH FRONT STREET HARRISBURG, PENNSYLVANIA 17110-/533 THO,.,....S D. CALDWELL. JR (I928.2001) April 28. 2005 717-232-7661 FAX, 717-232-2766 thefirm@caldweHkeams.com VIA FAX @ 231-6637 Dean F. Piennattei , Esquire Rhoads & Sinon, LLP One South Market Square, 12''' Floor P.O Box 1146 Harrisburg, PA 17108-1146 Re: Lil!:ht vs. Smith Land & Improvement, et al. Cumberland County Civil Action No. 01-053 Smith Land & Improvement Corporation vs. Lil!:ht Cumberland County Civil Action No. 03-834 Lil!:ht vs. Bald Eal!:le Insurance Co., et at Cumberland County Civil Action No. 03-1849 Dear Dean: I need 10 know whether YOII are pianning to proeeed with any depositions the week of May 91h My client and I are a((emptin~~ to hold the entire week, but we have not hcard from y"U, nor have you givcn us an opportunity to contact any of the potentia] witnesses to dctemline their availability. ] know you indicated a desire to talk settlcment; however, wc want to maintain our agrcement to conclude discovery by the cnd of June, and it is our firm intention to list this matter for trial upon completion of discovery and no later than the end of June. Please let mc know whcther we are going forward with any depositions in Mayor any depositions during the week of June 1311" which week I am also holding. JTM:dlj 87.150 . ., ~ " - . ., &kblf e , , . , . . . \ CALDWELL & KEARNS A PROFESSIONAL CORPORATION JAMES R CLIPPINGER CHARLES J. DEHART. III JAMES D. CAMPBELL. JR JAMES L. GOLDSMITH P. DANIEL ALTLAND JEFFREY T. McGUIRE. STANLEY J A. LA5KOWS":1 DOUGLAS K. MARSICO BRETT M. WOODBURN RAY J. MICHALOWSKI DOUGLAS L. CASSEL 4ALSO A MEMBER OF N..I BAR ATTORNEYS AT LAW OF COUNSEL RICHARD L. KEARNS CARL G, WASS 3631 NORTH FRONT STREET HARRISBURG, PENNSYLVANIA 17110-1533 THOMAS D. CALDWELL. JR 11928- 20011 May 10, 2005 717-232.7661 VIA FAX@ 231-6637 & U.S. Mail Dean F. Plermattei , Esquire Rhoads & Smon, LLP One South Market Squarc, 1 t" Floor P. O. Box 1146 Ilarrisburg, I' A 17108-1146 FAX 717-232.2766 thefirm@caldwellkearns,com Re: Light VS. Smith Land & Improvement, et a!. Cumberland County Civil Action No. 01-053 Smith Land & In1Jlrovemcnt Corporation VS. Light Cumberland County Civil Action No. 03-834 Light vs, Bald Eagle Insurance Co., ct a!. Cumberland County Civil Action No. 03-1849 Dear Dean: In response to your letter of May (J, 2005, I have sat down \vith Mr. Light and \vc cannot abrree to your evaluation that the starting point 1(:)1' any settlement diSCUSSIOn would be that the C:lass B stock had an equity value of$O at the time Lamar Llght's stock \vas to be purchased. \Ve remain IIlterested III settlement discussions and look forward to a gcnU!l1C settlement offer li"om y'our clients. IIo\\'ever, this case needs to move fonvard as it has heen pendll1g for several .years with no settlement otTer made by your clienh. \\/ith regard to the upcoming depositIons, obVIOusly we will produce Lamar LIght and r believe as long as you provide us \vith a subpoena. that we can produce hIs son-in-law, Mike SavastlO. Othcrvvlsc, wIth regard to any other Witnesses, I have no control over them, and you will need to subpoena them. It is my hclicl" that your client has all of the addresses; however, we arc III the process of trYlllg to (ktcnnine cun"ent addresses for these \\-itncsses. \Ve \vIll do our best to work with you regarding the schcdullllg of the depositions. Very truly' )'ollrs. Jefliey r. MC(;lme CAI.DWEI.L & KEARNS .lTM:dIJ CC' Lamar Light (via boX) 87698 . ... \ I . . f, CERTIFICATE OF SERVICE ~~AL served a copy of the within document on the following by depositing a true and correct copy of AND NOW, this ~ay of , 2005, I hereby certify that I have the same in the U.S. Mails at Harrisburg, Pennsylvania, postage prepaid, addressed to: Dean F. Piermattei, Esquire Rhoads & Sinon, LLP One South Market Square, 12th Floor P. O. Box 1146 Harrisburg, P A 17108-11 46 CALDWELL & KEARNS 01/283/89164 By 4A sJ!~ r--' S c./1 (/1 o ."f1 "> C) -r:> _;i:~ (....1 f'"',) c..~ LAMARL. LIGHT, Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA vs. CIVIL ACTION - LA W NO. 01-505'3 CIVIL......./' SMITH LAND & IMPROVEMENT: CORPORATION & BALD EAGLE: INSURANCE CO., LTD., Defendants SMITH LAND & IMPROVEMENT: CORPORATION, Plaintiffs IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA vs. CIVIL ACTION - LAW NO. 03-834 CIVIL LAMAR LIGHT, Defendant LAMAR L. LIGHT, Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COU.~TY, PENNSYLVANIA vs. CIVIL ACTION - LAW NO. 03-1949 CIVIL BALD EAGLE INSURANCE CO., LTD. & SMITH LAND & DEVELOPMENT CORP., Defendants IN RE; MOTION TO AMEND THE PLEADINGS ORDER AND NOW, this 2 'Z ~ day of June, 2005, a brief argument on the within motion to amend the pleadings is set for Thursday, August 4, 2005, at 4:00 p.m., in Courtroom Number 4, Cumberland County Courthouse, Carlisle, P A. BY THE COURT, -124. , ~ (\.'ir ~ )YifOIlP~rOJd \~, Sc,o ee~.1) falJ James R. Clippinger, Esquire For the Lamar L. Light Dean F. Piermattei,Esquire For Smith Land & Improvement Corporation & Bald Eagle Insurance Co., Ltd. :rlm LAMAR L. LIGHT, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA vs. ~. CI ACTION - LAW : 0.01-5053 CIVIL SMITH LAND & IMPROVEMEN CORPORATION & BALD EAGLE: INSURANCE CO., LTD., Defendants SMITH LAND & IMPROVEMENT: CORPORATION, Plaintiffs IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA vs. CIVIL ACTION - LAW NO. 03-834 CIVIL LAMAR LIGHT, Defendant LAMAR L. LIGHT, Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA vs. CIVIL ACTION - LAW NO. 03-1949 CIVIL BALD EAGLE INSURANCE CO., LTD. & SMITH LAND & DEVELOPMENT CORP., Defendants IN RE: MOTION TO AMEND THE PLEADINGS ORDER AND NOW, this '/. day of August, 2005, the motion of Smith Land to amend the pleadings is granted and it is directed that the amendment be filed within seven (7) days. BY THE COURT, .~ ~00 f\ db,a ,.AiL ':,1 (' " :\1 qd ,. ';;"-") ~'U u r... - .,J{ffrey McGuire, Esquire For Lamar L. Light ....Dean F. Piermattei,Esquire For Smith Land & Improvement Corporation & Bald Eagle Insurance Co., Ltd. :rlm LAMAR L. LIGHT, Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYL VANIA vs. ~. C fL ACTION - LAW : 0.01-5053 CIVIL SMITH LAND & IMPROVEMEN . CORPORATION & BALD EAGLE: INSURANCE CO., LTD., Defendants SMITH LAND & IMPROVEMENT; CORPORATION, Plaintiffs IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYL VANIA vs. CIVIL ACTION - LAW NO. 03-834 CIVIL LAMAR LIGHT, Defendant vs. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 03-1949 CIVIL LAMARL. LIGHT, Plaintiff BALD EAGLE INSURANCE CO., LTD. & SMITH LAND & DEVELOPMENT CORP., Defendants IN RE: STATUS CONFERENCE ORDER AND NOW, this 4.f . day of August, 2005, following conference call with counsel, it is ordered and directed that the parties adhere to the following case management order; 1. All discovery, other than the furnishing of expert reports, shall be completed on or before August 31, 2005. 2. All expert reports shall be forthcoming no later than September 23,2005. 3. Any rebuttal expert reports shall be furnished on or before October 21, 2005. C I 'i lid '1- Nr" .- ''''\:) S:"U17 " " ~o 4. Any surrebuttal expert reports shall be due on or before October 28, 2005. Either party is authorized to list this case for trial during the term commencing November 7, 2005. The court notes that the last day for setting down cases for this trial term is September 19,2005. BY THE COURT, v.kffrey McGuire, Esquire For Lamar L. Light vlfean F. Piermattei,Esquire For Smith Land & Improvement Corporation & Bald Eagle Insurance Co., Ltd. :r1m ~ ,oJ ~.O\; U Dean F. Pierrnattei, Esquire Attorney 1.0. No. 53847 RHOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, P A 17108-1146 (717) 233-5731 Attorneys for Defendants LAMAR L. LIGHT, Plaintiff : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA v. : CIVIL ACTION LAW ; NO. 01-5053 - CIVIL SMITH LAND & IMPROVEMENT CORPORATION, and BALD EAGLE INSURANCE CO., LTD, Defendants ; ACTION FOR DECLARATORY JUDGMENT To: Plaintiff Lamar L. Light c/o Jeffrey McGuire, Esquire Caldwell & Kearns 3631 North Front Street Harrisburg, P A 1711 0 NOTICE TO PLEAD YOU ARE HEREBY NOTIFIED TO FILE A WRITTEN RESPONSE TO THE ENCLOSED NEW MATTER WITHIN TWENTY (20) DAYS FROM SERVICE HEREOF OR A JUDGMENT MAYBE ENTERED AGAINST YOU. Respectfully submitted, RHOADS & SINON LLP By: ';r{?, e- v ~ tt v<---/ '5 => Dean F. Piermattei, Esquire One South Market Square P. O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendants Dean F. Pierrnattei, Esquire Attorney J.D. No. 53847 RHOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, P A 17108-1146 (717) 233-5731 Attorneys for Defendants LAMAR L. LIGHT, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v. CIVIL ACTION LAW ; NO. 01-5053 - CIVIL SMITH LAND & IMPROVEMENT CORPORATION, and BALD EAGLE INSURANCE CO., LTD, Defendants : ACTION FOR DECLARATORY JUDGMENT DEFENDANTS' FIRST AMENDED ANSWER & NEW MATTER NOW COME Defendants Smith Land & Improvement Corporation ("Smith Land") and Bald Eagle Insurance Co., Ltd., ("Bald Eagle") through their attorneys, Rhoads & Sinon LLP, and aver the following in response to Plaintiffs Complaint: 1. Admitted. 2. Admitted. 3. Denied. It is denied that Bald Eagle is a Pennsylvania Corporation which operates a place of business at 2001 State Road, Camp Hill, Pennsylvania 17011. By way of further response, Bald Eagle is a British Virgin Island Company. 4. Admitted. 5. It is admitted that from January 29,1986 through January 26, 1989, Lamar Light ("Light") was Executive Vice President and Chief Operating Officer of L.B. Smith, Inc. and from January 27, 1989 through his resignation, Light was the President and Chief Operating Officer ofL.B. Smith, Inc. 6. It is admitted that the Plaintiff owned common stock in Smith Land which was subject to the Stockholder's Agreement. 7. Admitted. It is admitted that Exhibit "A" to the Complaint is the June 27, 1998 Amended Stockholder's Agreement and that this Agreement is binding on the parties and controlled the repurchase of Plaintiff stock by Smith Land. 8. Admitted. 9. Denied as stated. The Amended Stockholder's Agreement is a writing which speaks for itself. By way of further answer, with respect to the repurchasing of Plaintiff s stock, paragraph 2 specifically states the following; The acquisition of the Class A Common Stock shall be by redemption and the redemption price to be paid therefor is Eleven Dollars ($11.00) per share. The acquisition of the class B Common Stock shall be by purchase and the purchase price thereof shall be the book value thereof as established by the Auditors of the Corporation as of the end of the month immediately preceding the Termination Event; provided, however, that the purchase price shall not be less than $2,500,000 and shall not be more than $4,000,000. 10. Admitted with clarification. The allegations in this paragraph are admitted, however, Plaintiffs resignation was not effective until December 31,2000. -2- 11. Denied. It is specifically denied that the Plaintiff spoke to Robert C. Sherwood regarding the book value/acquisition price of Plaintiffs Class "B" Common Stock prior to announcing his intent to resign or terminate his employment with L.B. Smith. Instead, after Plaintiff announced that he would be terminating his employment with L.B. Smith, Light had a conversation with Mr. Sherwood regarding the book value/acquisition price of his Class "B" Common Stock. At that time, the parties understood that the repurchase of the stock would be governed by the Amended Stockholder's Agreement. All parties mistakenly believed that the book value of Plaintiffs stock may exceed the $4,000,000 maximum repurchase price. All parties new at that time, however, that the auditors had not completed their book value determination as required by paragraph 2 of the Amended Stockholder's Agreement. 12. Denied. It is specifically denied that Sherwood knew or reasonably should have known that Light would rely upon any statement regarding the book value/acquisition price of Plaintiff's Class "B" Common Stock. Rather, to the contrary, all parties clearly understood that the Amended Stockholder's Agreement controlled the repurchase of Plaintiffs stock and accordingly, book value govern the purchase price of the stock. 13. Admitted with clarification. It is admitted that Plaintiff did deliver stock certificates and received a Judgment Promissory Note in the amount of $4,000,000, and said note is attached as Exhibit "B" to Plaintiffs Complaint. The Judgment Promissory Note is a writing which speaks for itself. By way of further answer, at all relevant times, the parties understood and agreed that the repurchase of Plaintiffs stock would be pursuant to the Amended Stockholder's Agreement and would be for book value. At the time of Plaintiffs termination, the Auditor's determination of book value had not been completed and so as to avoid delay in the initial payments to the Plaintiff, the Defendants issued a promissory note for the maximum -3- repurchase amount of $4,000,000 with the understanding that book value would control, and if said repurchase amount was less that $4,000,000 an adjustment to Defendants payment obligations would be made. 14. Admitted in part, denied in part. It is admitted that the Promissory Note was signed by Bald Eagle Insurance Company, Ltd. The remaining allegations in this paragraph are specifically denied. 15. Admitted. 16. Denied. The allegations in this paragraph are specifically denied. By way of further answer, the Plaintiff was well aware that any repurchase of his stock would be governed by the Amended Stockholder's Agreement and to the extent that the book value determination did not warrant the $4,000,0000 repurchase price for Plaintiffs stock, an adjustment would be made consistent with the requirements of the Amended Stockholder's Agreement. Furthermore, at the time the Promissory Note was provided to the Plaintiff, he was aware that the Auditors had not concluded their book value determination. 17. Denied as stated. It is admitted that the initial repurchase payment was made to the Plaintiff. Any implication that said payment constitutes an agre~ent that $4,000,000 is actually owed to the Plaintiff for the repurchase of his stock is specifically denied for the reasons set forth above. 18. It is admitted that Smith Land advised Light that the book value of his stock was not $4,000,000, and further advised Plaintiff that the book value of the stock according to the Auditors' determination was $3,415,094. At all relevant times, the Plaintiff had the opportunity to verify the Auditor's determination of book value which supports this repurchase price -4- 21. This paragraph contains conclusions oflaw which do not require a response. To the extent that a response is deemed appropriate, the same are specifically denied for the reasons set forth in Paragraphs I through 20 above. 22. This paragraph contains a conclusion of law which does not require a response. To the extent that a response is deemed appropriate, the same are specifically denied for the reasons set forth in Paragraphs I through 20 above. By way of further answer, the $4,000,000 Promissory Note is not enforceable and the parties should be governed by the book value. 23. This paragraph contains conclusions of law which do not require a response. To the extent that a response is deemed appropriate, the same are specifically denied for the reasons set forth in Paragraphs 1 through 20 above. WHEREFORE Defendants Smith Land & Improvement Corporation and Bald Eagle Insurance Company, Limited respectfully request that: (I) this Court deny Plaintiffs request for judgment declaring that the January 2, 2001 Judgment Promissory Note is legally binding and obligates the Defendants to pay the sum of $4,000,000 plus interest to the Plaintiff; (2) deny Plaintiff's request for a declaratory judgment that the Plaintiff is entitled to confess judgment and accelerated payment for the sums set forth in the January 2, 2001 Judgment Promissory Note; and (3) enter a judgment declaring that the parties are bound by the June 27, 1998 Amended Stockholder's Agreement and that the January 2, 2001 Judgment Promissory Note is not binding upon the parties. NEW MATTER 24. At all relevant times the parties fully understood that the repurchase of the Plaintiff's Stock would be governed by the Amended Stockholders Agreement. -6- 25. At the time the Judgment Promissory Note for $4,000,000 was provided to the Plaintiff, both parties maintained a mistaken belief that the Auditor determination would set the book value for Plaintiffs Stock in excess of the maximum $4,000,000 repurchase price set forth in the Amended Stockholders Agreement. 26. At the time the initial Judgment Promissory Note for $4,000,000 was provided to the Plaintiff, the Auditors had not completed their book value determination pursuant to the Amended Stockholder Agreement. 27. The initial Judgment Promissory Note for $4,000,000 provided to the Plaintiff was done as a matter of convenience so as not to delay the initial payment to the Plaintiff for the repurchase of his stock while the Auditors concluded their book value determination. 28. At the time the initial Judgment Promissory Note for $4,000,000 was provided to the Plaintiff, both parties were under the mistaken belief that the Auditor's book value determination would result in a payment of $4,000,000 to the Plaintiff. 29. The Judgment Promissory note should be set aside on the basis of mutual mistake 30. Alternatively, to the extent that the Plaintiff was aware of the true book value of his Stock, the Judgment Promissory Note of January 2, 2001 should be rescinded as Plaintiff failed to disclose this knowledge to the Defendants at the time the Note was issued. 31. The Plaintiff, by signing the Amended Shareholders Agreement, represented that he would adhere to the terms of said Agreement and accordingly, the Plaintiff is now estopped from attempting to enforce the Judgment Promissory Note of January 2,2001. - 7 - 32. To the extent that Plaintiff had knowledge that the book value of the stock would not exceed the $4,000,000 and failed to share this information with the Defendants, the Judgment Promissory Note of January 2, 2001 should be set asidl: based on unilateral mistake, misrepresentation, and fraud. 33. Plaintiffs claim for enforcement of the January 2, 2001 Judgment Promissory Note should be dismissed as Plaintiff consented to a repurchase of the stock pursuant to the Amended Shareholder's Agreement. 34. At all relevant times the parties were well aware that the book value would control the purchase price ofthe stock. 35. At the time the Auditor's Report was issued indicating a book value that would equate to approximately a buy back price of $2,400,000, the Defendants were unaware that because of Light's actions or inactions and failure to properly manage L.B. Smith, Inc., the true book value was substantially lower. This lower book value would have resulted in a buy back price of zero or an amount significantly lower than the floor of $2,500,000. 36. The subsequent Promissory Note in the amount of $2,400,000 was issued without knowing the true book value. 37. Subsequent to Light's departure, events have unfolded to reveal that Light mismanaged the inventory of L.B.Smith to the extent that it was booked at a minimum valued amount which Light supported through his statements to the Auditors. Furthermore, certain recourse deals were transacted while Light was President ofL.B. Smith for which reserves were not set aside. Additionally, Light failed to take periodic inventory of the equipment attachments and as a result, there were attachments missing from inventory with a value of approximately - 8 - $1,000,000. These acts, combined with other acts, had a significant impact on the book value number and acted to reduce the purchase price of the stock. 38. Had Smith Land and Bald Eagle known the truth about the book value of the company, they would not have issued a note in the amount of $3,400,000. WHEREFORE, Defendants Smith Land & Improvement Corporation and Bald Eagle Insurance Company, Limited respectfully request that (1) this Court deny Plaintiff's request for judgment declaring that the January 2, 2001 Judgment Promissory Note is legally binding and obligates the Defendants to pay the sum of $4,000,000 plus interest to the Plaintiff; (2) deny Plaintiff's request for a declaratory judgment that the Plaintiff is entitled to confess judgment and accelerated payment for the sums set forth in the January 2, 200 I Judgment Promissory Note; (3) this Court enter a judgment declaring that the parties are bound by the June 27,1998 Amended Stockholder's Agreement and that the January 2, 2001 Judgment Promissory Note is not binding upon the parties; and (4) enter Judgment relating to the Purchase Price which is based on the true book value of the company at the time the value was to be determined. Respectfully submitted, RHOADS & SINON LLP By: vI' { l . "'^""^ II-.e-i It? c?> Dean F. Pielmattei ' One South Market Square P. 0, Box 1146 Harrisburg, PAl 71 08-1146 (717) 233-5731 Attorneys for Defendants - 9 - VERIFICATION Richard E. Jordan, II, deposes and says, subject to the penalties of 18 Pa. C.S. S4904 relating to unsworn falsification to authorities, that he is the Chairman, CEO and President of Smith Land & Improvement Corporation and Bald Eagle Insurance Co., Ltd., that he makes this verification by its authority and that the facts set forth in the Defendants' Amended Answer, New Matter are true and correct to the best of his knowledge, information and belief. Date ,?/;/ /O.C;- . I CERTIFICATE OF SERVICE I hereby certify that on this 11th day of August 2005, a true and correct copy of the foregoing First Amended Answer & New Matter was served by means of United States mail, first class, postage prepaid, upon the following: Jeffrey McGuire, Esquire Caldwell & Kearns 3631 North Front Street Harrisburg, PA 17110 /j r c I.. ~j'K,v-- dnL,LlJ'-'M.f(\-,pJ () r; "':"'- ...., i~L' t~:: f! , <'" <) r,:';~ ~:h :J r--> = = <.n :- c: G') ~ :I!:n rt1,.- -"m6 ::t' o .:-1 Ii :.t:..,., 00 ..::..~ eTl o --1 ;Z; ;~ -0 :x '1? .r::- tv LAMAR L. LIGHT, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v. NO. 01-5053 ..../ SMITH LAND & IMPROVEMENT CORPORATION & BALD EAGLE INSURANCE CO., LTD., Defendants CNIL ACTION - LAW and SMITH LAND & IMPROVEMENT CORPORATION, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff JUDGE HESS v. NO. 03-834 Civil Term LAMAR LIGHT, Defendant CIVIL ACTION - LAW and LAMAR L. LIGHT, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v. NO. 03-1849 BALD EAGLE INSURANCE CO., LTD. & SMITH LAND & DEVELOPMENT CORP. JUDGE HESS Defendants CIVIL ACTION - LAW PRAECIPE FOR ENTRY OF APPEARANCE To the Prothonotary: Please enter my appearance on behalf of Smith Land & Improvement Corporation, Bald Eagle Insurance Co., Ltd., and Smith Land & Development Corp. Papers may be served at the address set forth below. 575783.1 .c,c,', 'oF ',.., """"..)"..,,. Date: Respectfully submitted, RHOADS & SINON LLP 4~w'.23 ,;zcJa.5 BY:~O~~ David J. Stau Pa. Sup. Ct. I. D. 84236 RHOADS & SINON LLP One South Market Square, 12th Floor Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendant Smith Land & Improvement Corporation, Bald Eagle Insurance Co., Ltd., and Smith Land & Development Corp. CERTIFICATE OF SERVICE I hereby certify that on this 1) rd'day of ~ ' 2005, a true and correct copy of the foregoing Praecipe for Entry of Appearance, was served by means of United States mail, first class, postage prepaid, upon the following: Jeffrey T. McGuire, Esquire Caldwell & Kearns 3631 North Front Street Harrisburg, PA 17110-1533 Attorney for Lamar L. Light ~ c'7f~/ Teresa Laughead to"~ .. . n c ...., => => ~, '?:: '--- (,:'") '::' o ." -l ::I:-n rnr=: -nrTi 'CJO ;') I ~'-,C) ~S~ /::rn C.J -\ '10" ~ :D:*' ~ '2 -' LAMAR L. LIGHT, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v. ./ NO.01-5053 -.../ SMITH LAND & IMPROVEMENT CORPORA nON & BALD EAGLE INSURANCE CO., LTD., Defendants CIVIL ACTION - LAW and SMITH LAND & IMPROVEMENT CORPORATION, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff JUDGE HESS v. NO. 03-834 Civil Term LAMAR LIGHT, Defendant CIVIL ACTION - LAW and LAMAR L. LIGHT, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff v. NO. 03-1849 BALD EAGLE INSURANCE CO., LTD. & SMITH LAND & DEVELOPMENT CORP. JUDGE HESS Defendants CIVIL ACTION - LAW OBJECTIONS TO SUBPOENA DIRECTED TO MICHAEL J. ROMANO, ESQUIRE, PURSUANT TO RULE 4009.21 575778.1 Smith Land & hnprovement Corporation, Smith Land & Development Corp., and Bald Eagle Insurance Company, Ltd., come pursuant to Pa. R. C. P. 4009.21 (c) and jointly object to Plaintiff Lamar Light's Subpoena to Produce Documents or Things Directed to Attorney Michael J. Romano, Esquire. These parties object to the subpoena that is attached as Exhibit A to this Objection for the following reasons; 1. The information sought by the subpoena has previously been made the object of a Protective Order issued by Hon. Ann Marie Donio, U. S. M. J., in the matter of Financial Federal Credit. InC., v. L. B. Smith. Inc. Volvo Construction Eouipment North America. Inc.. and/or Volvo Construction Eouipment Finance North America. Inc., No. 04-2080 (D. N. J.) ("FFCI"). Attached as Exhibit B is a copy of that Protective Order. 2. Attorney Michael J. Romano, Esquire, is counsel for Plaintiff Financial Federal Credit, Inc. in FFCI and received what documents he possesses from Defendant L. B. Smith, Inc., pursuant to the Protective Order. 3. The information requested also includes information that the Protective Order describes as "relating to the confidential business operations and/or confidential financial information of. . . related entities," namely, Smith Land & Improvement Corporation. Exhibit B,11. 4. The Protective Order makes no exception or provision for reproducing this fif_""on ill ,,,",, in nili~ Iiti"tioo,=~t ill ~~.0' Date: ~ ~3 ~()(}.6 / ~ Dean . Pierma 1 Pa. Sup. Ct. I. D. 53847 David J. Staudt Pa. Sup. Ct. I. D. 84236 RHOADS & SINON LLP One South Market Square, 12th Floor Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Defendant Smith Land & Improvement Corporation and Bald Eagle Insurance Co., Ltd. CERTIFICATE OF SERVICE I hereby certify that on this J 3,..d day of ~ ,2005, a true and correct copy of the foregoing Objection to Subpoena Directed to Attorney Michael F. Romano, Esquire, was served by means of United States mail, first class, postage prepaid, upon the following: Jeffrey T. McGuire, Esquire Caldwell & Kearns 3631 North Front Street Harrisburg,PA 17110-1533 Attorney for Lamar L. Light ~ i OJJJ,J-.nnrJ ) Teresa Laughead ~ LAMAR L. LIGHT, Plaintiff, IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. NO. 01-5053 SMITH LAND & IMPROVEMENT CORPORATION & BALD EAGLE INSURANCE CO., LTD., Defendant CIVIL ACTION -- LAW And IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA SMITH LAND & IMPROVEMENT CORPORATION, Plaintiff, v. JUDGE HESS NO. 03-834 CIVIL TERM LAMAR LIGHT, Defendant, CIVIL ACTION - LAW And IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYL VANIA LAMAR LIGHT, Plaintiff, v. NO. 03-1849 BALD EAGLE INSURANCE CO., LTD. & SMITH LAND & DEVELOPMENT CORP., JUDGE HESS Defendant. CIVIL ACTION - LAW NOTICE OF INTENT TO SERVE A SUBPOENA TO PRODUCE DOCUMENTS AND THINGS FOR DISCOVERY PURSUANT TO RULE 4009.21 Lamar Light intends to serve a subpoena identical to the one that is attached to this notice. You have twenty (20) days from the date listed below in which to file of record and serve upon the undersigned an objection to the subpoena. If no objection is made the subpoena may be served. 'l ~& ~;) ( By: ~ Date: ey, . cGuire, Esquire o ey J.D. No. 73617 63 North Front Street Harrisburg, PAl 711 0 (717) 232-7661 Attorneys for Plaintiff, Lamar Light COMMONWEAL TH OF PENNSYLVANIA COUNTY OF CUMBERLAND LAMAR L. LIGHT, Plaintiff, v. NO.OJ-5053 SMITH LAND & IMPROVEMENT CORPORATION & BALD EAGLE INSURANCE CO, LTD., Defendant CIVIL ACTION - LAW And SMITH LAND & IMPROVEMENT CORPORATION, Plaintiff, v. JUDGE HESS NO. 03-834 CIVIL TERM LAMAR LIGHT, Defendant, CIVIL ACTION - LAW And LAMAR LIGHT. Plaintiff, v. NO. 03-1849 BALD EAGLE INSURANCE CO.. LTD. & SMITH LAND & DEVELOPMENT CORP., JUDGE HESS Defendant. CIVIL ACTION - LAW ALL THREE ACTIONS CONSOLIDATED SUBPOENA TO PRODUCE DOCUMENTS OR THlNGS FOR DISCOVERY PURSUANT TO RULE 4009.22 TO: Michael J. Romano, Esquire 52 Newton Avenue Woodbury, NJ 08096 Within twenty (20) days after service of this subpoena, you are ordered by the Court to produce the foIl owing documents or things: AIl records received in the discoverv from L. B. Smith. Inc. in the litigation case titled Financial Federal Credit. Inc. v. L. B. Smith. Inc.. Volvo constructions Equipment North America. Inc., and/or Volvo Construction Equipment Finance North America. Inc. Re: Case No. 04-2080 (JHR) and your File No. 014-FFCI-007-<LBS) In particular. copies of all deposition transcripts. interrogatory responses and documents produced by L. B. Smith. Inc. at: 3631 North Front Street, Harrisburg. PA 17110-1533. You may deliver or mail legible copies of the documents or produce things by this subpoena, together WJth the certificate of comphance, to the party making this request at the address hsted above. You have the right to seek in advance the reasonable cost of preparing the copies or producing the things sought. If you faJI to produce the documents or things required by this subpoena within twenty (20) days after its sen'lCe, the party serving this subpoena may seek a court order compelling you to comply with it. THIS SUBPOENA WAS ISSUED AT THE REQUEST OF THE FOLLOWING PERSON: Name: Jeffrey T. McGuire. Esquire Address: 363] North Front Street Harrisburg, PA 17110-1533 Telephone: 717-232-766 ] Supreme Court I.D # 736 I 7 Attorney For: Lamar Light BY THE COURT: Prothonotary, Civil Div' . n o O./U! ,P.~},/ /J/:t "- / Deputy Date: Hu ~ I.:l. ,;J fY).. " S al of th~ Court '----- 2 __~_!:.1/01/0~~.J.~_Il~~jlf~llAMD DodlJ~~WQNf1Md 11/03/2004 Page 1 of6 @003 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY FINANCIAL FEDERAL CREDIT, INC., Civil No. 04-2080 Plaintiff v. L.B.SMITH, INC., VOLVO CONSTRUCTION EQUIPMENT NORTH AMERICA, INC. and/or VOLVO CONSTRUCTIONEQlITPMENT FINANCE NORTH AMERICA, INC., Defendants AND NOW, ORDERED: !'JlPTECTIVE ORDER thi, ~,.j doy of ~ 2004, IT IS HEREBY 1. All documents or any other information produced by either Party relating to the confidential business operations and/or confidential financial information of said Party or any related entities (exclusive of any documents which either party already has in the opposing Party's possession, and/or which could be acquired in the ordinary course of business, and/or are a matter of public record) shall be deemed to be Confidential Infotmation. Such documents and information are hereinafter referred to as "Confidential Information", and shall be marked "Confidential. " SJCSI54U ,._....:...!:~Qli04CMl!l!J. ~~~~m2DB02JlHaBAMD Do~t i!'WON JIMld 11/03/2004 Page 2 of 6 @OQ4 2. Confidential Information shall be used solely for the pUIpOsc of conducting this litigation and not for any business or other purpose whatsoever, including but not limited to any other pending or future litigation. Confidential Infonnation may be disclosed to the following persons only: (a) The Parties. (b) Attorneys of record and other attorneys retained by the Parties (the "Attorneys") in the above entitled matter and the Attorneys' legal assistants, secretarial and clerical personnel. (e) Outside investigators and experts, including but not limited to expert witnesses, and their clerical assistants who are engaged in assisting the Attorneys in the preparation of conduct of this case, but only upon the signature by such person prior to such disclosure of an affidavit in the form attached hereto as Attachment A, which affidavit shall be retained by the Attorneys for the party that discloses such Confidential Information. (d) Any deposition or trial witness who, in the judgment of the Attorneys is required to be shown such material in order to assist such attorncy in the preparation for or the conduct of this litigation, but only upon the signature by such person prior to such disclosure of an affidavit in the form attached hereto as -2. ~. 1l/0Y.Q.4cMglI 1eca~c~2Wo}j~If~~A'MD Dod!JI91MWt 2WON fMd 11/03/2004 Page 3 of 6 fi!Jo05 Attachment A, which affidavit shan be retained by the Attorneys of record for the Party that discloses such Confidential Information. 3. Confidential Information shall be kept in a secure location when not in use, and access to those facilities shall be given only to the Attorneys describecl above and their associated lawyers, legal assistants, secretarial and clerical personnel who are engaged in assisting them in this litigation. 4. All Confidential Information that is filed with the Court shall be filed under seal, pursuant to the rules and/or procedures of the Court. S. Material designated Confidential pursuant to this Order may be disclosed in the course of a deposition to a deponent who by virtue of his or her position has access to or knowledge of such Confidential Information. In all other circumstances, disclosure of material designated Confidential pursuant to this Order may be made to a deponent in the course of a deposition, but only upon the signature by the deponent prior to such disclosure of an affidavit in the form attached hereto as Attachment A, which affidavit shall be retained by the Attorney of record for the Party that discloses such Confidential Information. A deponent shall be permitted to examine any portion of the transcript of his or her deposition (including exhibits) that contains Confidential Information prior to signing the deposition transcript, but shall not be permitted to retain a copy of any Confidential Information. -3. " _lV01/04dg~ t~da~c~~2WO:lA~~Aj(AD DodalWlfr\'i 28~ON f1rJ'd 11/03/2004 Page 4 of 6 ~006 6. Prior to oral hearings, or testimony at the trial of this case, the Parties, in the event that it is known reasonably in advance of such hearing or testimony that matters involving Confidential Infonnation will be raised, shall so advise each other. If such Confidential Infonnation is expected to be referred to or discussed, the parties may ask the Court to consider measureS to ensure the preservation of the confidentiality of the Confidential Infonnation. 7. Unless modified or vacated by the Court, this Order shall remain in effect from the date hereof until the termination of this litigation, at which time all Confidential Infonnation and any and all copies thereof must be returned by the Parties to the opposing Parties' Attorneys or destroyed by the opposing Parties' Attorneys, except that the Attorneys may retain one copy of all pleadings tiled with the Court which contain or refer to Confidential Infonnation. 8. In the event that any Party designates documents as Confidential Information, and any other Party disputes said designation, the Party which disputes said designation shall first contact the Party that designated the Confidential Information and articulate the reasons that said designation is disputed, and provide the Party which designated the documents as Confidential Infonnation with the opponunity to remove said designation. If, after good faith efforts among counsel, the Parties are unable to come to mutual agreement as to whethcr certain documents - 4- __V/01l04 dgY, w)a-!C~.,u'<0~3L.a~31~D RHOADS SlNON liP @007 LUll JHK AIVI Document LIj FfTed 11/03/2004 Page 5 of 6 constitute Confidential Infonnarion, the Party disputing the designation l1llIY contact to the Court to resolve the Parties' dispute. 9. This Order shall be binding on all Parties to this Litigation, as well as individuals that review and sign &hibit A. , J. llSMJ - 5 - 11/01104 Gillie ~QIilMcRl\()2OI!02Jl-l~G"'MD Do~t ~ON If.Md 11103/2004 Page 6 of 6 ~ 008 AITACHMENT A STATE OF COUNTY OF 1. My name is I live at I am employed as (state position) ____ by (state name and address of employer) 2. I am aware that an Order regarding the confidentiality of eertain documents and other information produced by the parties has been exccuttld in the case of Financial Federal Credit Inc. v. L.B. Smith. Inc.. Volvo Construction EauiDment North America. Inc. and/or Volvo Constnr(:tion Equipment Finance North Amenca,JDc., Civil Action No. 04-CV-2080/JHR; 3. I promise that documents and infonnation designated as Confidential under the Order entered in the above litigation will be used by me only in connection with the above referenced case and not for any business or other purpose whatsoever, including but not limited to any other pending or future litigation. 4. I understand that any use by me of documents or information designated as Confidential under the Order, or any portion or summaries thereof, in any manner contrary to the provisions of the Order may rcnder me in contempt of Court. I declare under penalty of perjury that the foregoing is true and correct. Executed this day of ,200~. (Signature) o ~: ~ c::-::::> C.n :P' ("'.: ;~-) ,,,-, ,&:- .;' :::7': -' Q. ~ fl1P .,.,m "'")1:( <>,t.,} -,,',j ""....'"' (;;;CJ --:1'"11 . J ':::-1 '-':-"" 'SJ, .-<., -_.~ S) v. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5053 / CIVIL ACTION - LAW LAMAR 1. LIGHT, Plaintiff SMITH LAND & IMPROVEMENT CORPORATION & BALD EAGLE INSURANCE CO., LTD., Defendants and SMITH LAND & IMPROVEMENT CORPORATION, Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. LAMAR LIGHT, Defendant NO. 03-834 Civil Term CIVIL ACTION - LAW and LAMAR 1. LIGHT, Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. BALD EAGLE INSURANCE CO., L TO. & SMITH LAND & DEVELOPMENT CORP. NO. 03-1849 CIVIL ACTION - LAW Defendants CERTIFICATE PREREQUISITE TO SERVICE OF A SUBPOENA PURSUANT TO RULE 4009.22 As a prerequisite to service of a subpoena for documents and things pursuant to Rule 4009.22, Smith Land & Improvement Corporation certifies that: 1. a notice of intent to serve a subpoena with a copy of the subpoena attached thereto was originally faxed to each party at least twenty days prior to the date on which the subpoena was sought to be served; 2. counsel for Lamar L. Light agreed to waive objections to the subpoena; 3. a copy of the August 10, 2005 letter from counsel for Lamar L. Light is attached to this certificate as Exhibit "A"; 4. changes to the Subpoena requested by counsel for Lamar L. Light were made; " 573811.1 5. a notice of intent with the revised subpoena attached was faxed to each party on August 30, 2005; 6. a copy of the re-served notice of intent, including the revised subpoena, is attached to this certificate at Exhibit "B"; and 7. the subpoena which will be served is identical to the subpoena which is attached to the notice of intent which was served on August 30, 2005. RHOADS & SINON LLP By: IW { -lj; ~~ / t, 0t> Dean F. Piermattei { Stephanie E. DiVittore One South Market Square P.O. Box 1146 Harrisburg,PA 17108-1146 (717) 233-5731 Attorneys for Smith Land & Improvement Corporation Date: August 30, 2005 t:Xhlbl fA, 3 j AUG-lo-2005 WED 06:03 PM FAX N'J. P. 01/01 CALDWELL & KEARNS -'^I'"IE:S R. CLIPPINGER CMARLl!:$ J, t1E:M.MH. III .JAMCS O. CAMP8E:L.L.. .JR, JAMES to. GOL.P5MrTH P. C1ANltL ALTL..AND .Jt:FF"RF:T T. McGUlfO:E:" STANLEY J. A. LASKowSlC1 DOUGLAS K, MAFlSIC:o Bf;5:TT "". \/IIOOPBURIIl R A.T .1. ""ICI-lALOWSICI OOUGL....lii I.. C.-.SSI:L ....1-5\;1 " JIlE:I"llJEi'l IWlF N.I D^t:l A I"FlOF'I:SSloNAL Co"~OI'/lATION ATTORNEYS AT LAW 01" COUNSEL. ""cH...RD L. ICE:^RNS CARL G. w...se 3631 NORTH FRONT STRE:ET HARFlISl3lJRG, PENNSYLVANIA 17110-11533 THDM...... p, C;:.U.ClWELL, .Jpt. 11.31....0011 August 10, 2005 ,,7.!2a.7SEiI I""'X~ "'17-a::l~-27aCl 1hefll1"nOcllldwttRk..ma.com VIA FACSIMILE: 231-6637 Dcan F. Piermattei, Esquire Rhoads & Sinon, LLP One South Market Square, 12'h Floor P. O. Box 1146 Harrisburg, P A 17108-1146 Re: Lll!:bt vs. Smith Land & ImDrovemcnt. et al. Cumberland County Nos. 01-5053, 03-834, 03-1849 Dear Dean: I waive the 20-day objection period and have no objection to you serving the subpoena. I would ask that you change the subpoena to ask for documents rclatcd to the years 1999 and 2002, for all ofthc categories you are requesting. If you are not willing to do that, plea.~e let me know so that I can send my own subpoena. JTM:se cc: Lamar Light 01283/91416 . ,. ;'"// ((61 ," ,. ? Ai- V &-- ea/lc.1/ //(t\~~i " D "LT.QI A ns --=-~ ~ MIl ~ J~~ & SINON LLP Pauline S. Joy ph (717) 231-6680 ft (717) 231-6637 pjoy@rhoadspsinon.com FILE NO 1299/148 ....-.-..---.-------..--...----.-.".---...----------.-...~..__._--""-_._-_._-,.._._--_._---,,_..__._----,,------"------~.__._,._".._----_.._----- August 30, 2005 Re: Lil!ht v. Smith Land & Improvement. et al. Cumberland County Nos. 01-5053. 03-834. 03-1849 Jeffrey T. McGuire, Esquire Caldwell & Kearns 3631 North Front Street Harrisburg, PA 17110-1533 VIA FACSIMILE 232-2766 And U.S. Mail Dear McGuire: To confirm my earlier voice mail to you, I am enclosing a Notice of Intent with a Subpoena to Price Waterhouse Coopers revised to reflect your request of August 10, 2005 to subpoena records for 2002. I am re-serving the Notice to conform to the Pennsylvania Rules of Civil Procedure which require that the Subpoena be identical to that attached to the Notice. We will be personally serving the Subpoena today. Should you have any questions, please do not hesitate to call me. Very truly yours, RHOADS & SINON LLP Enclosure ./J. D.....).~.i By: ' ~ ()I/ ~I Pauline S. Joy Paralegal to Dean F. Piermattei cc: Dean F. Piermattei, Esq. (w/encl.) 576666.1 Rhoads &. Sinon LLP . Attorneys at Law. Twelfth Floor. One South Market Square. P.O. Box 1146 Harrisburg, PA 17108-1146 . ph (717) 233.5731 . fx (717) 232-1459 . www.rhoads-sinon.com v. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5053 CIVIL ACTION - LAW LAMAR L. LIGHT, Plaiotiff SMITH LAND & IMPROVEMENT CORPORATION & BALD EAGLE INSURANCE CO., LTD., Defendants and SMITH LAND & IMPROVEMENT CORPORATION, Plaiotiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. LAMAR LIGHT, Defendant NO. 03-834 Civil Term CIVIL ACTION - LAW and LAMAR L. LIGHT, Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. BALD EAGLE INSURANCE CO., LTD. & SMITH LAND & DEVELOPMENT CORP. NO. 03-1849 CIVIL ACTION - LAW Defendants NOTICE OF INTENT TO SERVE A SUBPOENA TO PRODUCE DOCUMENTS AND THINGS FOR DISCOVERY PURSUANT TO RULE 4009.21 Smith Land & Improv=ent Corporation intends to serve a subpoena identical to the one that is attached to this notice. You have twenty (20) days from the date listed below in which to file of record and serve upon the undersigned an objection to the subpoena. If no objection is made, the subpoena may be served. RHOADS & SINON LLP &i~1J /05 By: 127P?~7f7T'::> Dean F. Piermattei Stephanie E. DiVittore One South Market Square P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 233-5731 Attorneys for Smith Land & Improv=ent Corp. 573754.1 v. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5053 CIVIL ACTION - LAW LAMAR L. LIGHT, Plaintiff SMITH LAND & IMPROVEMENT CORPORATION & BALD EAGLE INSURANCE CO., LTD., Defendants and SMITH LAND & IMPROVEMENT CORPORATION, Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYL V ANLA v. LAMAR LIGHT, Defendant NO. 03-834 Civil Term Crvn.. ACTION - LAW and LAMAR L. LIGHT, Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYL V ANLA NO. 03-1849 CIVIL ACTION - LAW v. BALD EAGLE INSURANCE CO., LTD. & SMITH LAND & DEVELOPMENT CORP. Defendants SUBPOENA TO PRODUCE DOCUMENTS OR THINGS FOR DISCOVERY PURSUANT TO RULE 4009.22 TO: Price Waterhouse Coopers LLP One South Market Square Harrisburg, P A 17108 Withio twenty (20) days after service of this subpoena, you are ordered by the court to produce the following documents or thiogs: SEE ATTACHED at: Rhoads & Sinon LLP. One South Market Square. 12th Floor. Harrisburg. Pennsvlvania 17101. You may deliver or mail legible copies of the documents or produce thiogs requested by this subpoena, together with the certificate of compliance, to the party making this request at the address listed above. You have the right to seek in advance the reasonable cost of preparing the copies or producing the things sought. If you fail to prodUce the documents or thiogs required by this subpoena, withio twenty (20) days after its service, the party serving this subpoena may seek a court order compelling you to comply with it. Tms SUBPOENA WAS ISSUED AT THE REQUEST OF THE FOLLOWING PERSON: Name: Dean F. Piennattei, Esquire Telephone: (717) 233-5731 Address: Rhoads & Sinon, LLP ID #: 53847 P.O. Box 1146 Attorney for Smith Land & Improvement Corp. Harrisburg, PAl 71 08-1146 DATE: ~i-U( q :J./Y)r . BY THE COURT: ~ (JJJ~"~,~"" (Prothono~). ______ 4.40........0 e ~fi'AJ uty) Seal of the Court ings.RSDOCS. #573752.\'1- YOU ARE ORDERED AND SUBPOENAED TO PRODUCE THE FOLLOWING: 1. All documents relating to the equipment inventory audit for L.B. Smith, Inc. for the year 2000 which was performed in 2001, including all notes or documents relating to discussions with L.B. Smith, Inc. The information should include all documentation related to the determination ofthe fair value of the equipment in those instances where cost exceeded fair value. 2. All statements or summaries of adjusted differences for the audits performed for 1999, 2000,2001 and 2002. 3. All documents relating to audit adjustments for the audits relating to the years 1999, 2000, 2001 and 2002. 4. All documents relating to audit adjustments waived for the years 1999,2000,2001 and 2002. These documents should include an explanation as to why the adjustments were waived. 5. All documents relating to unadjusted trial balances along with documents reflecting adjustments for the years 1999,2000,2001 and 2002. 6. AIl work papers relating to Price Waterhouse Cooper's search for unrecorded liabilities, contingencies and subsequent events. CERTIFICATE OF SERVICE I hereby certify that on this.,;io-;P- day of ~~> f- ,2005, a true and correct copy of the foregoing Certificate Prerequisite to Service of Subpoena was served by means of United States mail, first class, postage prepaid, upon the following; Jeffrey T. McGuire, Esquire Caldwell & Kearns 3631 North Front Street Harrisburg, PA l7110 ~~~ (") ,..' ~ <g. <:; "'c> -:1'11 .,::"'"' c:: {'"i1 ;.;:;;.- G' ','--' (.,j ~:)'d - 't2; p."() ....".. l ;::.z,rf\ ':? ~\ ~:p "~~ en .;.9- -'- .....l PRAECIPE FOR LISTING CASE FOR TRIAL o (Must be typewritten and submitted in duplicate) TO THE PROTONOTARY OF CUMBERLAND COUNTY Please list the following case: o for JURY trial at the next term of civil court [gI for trial without a jury. -------------------------------------------------------------------------------------------------------- CAPTION OF CASE (entire caption must be stated in full) (check one) [gI Civil Action - Law o Appeal from arbitration o (other) LAMAR L. LIGHT, Plaintiff, v. IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA NO. 01-5053 ~ SMITH LAND & IMPROVEMENT CORPORATION & BALD EAGLE INSURANCE CO., LTD., Defendant CIVIL ACTION - LAW And IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA SMITH LAND & IMPROVEMENT CORPORATION, Plaintiff, v. JUDGE HESS NO. 03-834 CIVIL TERM LAMAR LIGHT, Defendant, CIVIL ACTION - LAW And IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAMAR LIGHT, Plaintiff, v. NO. 03-1849 BALD EAGLE INSURANCE CO., LTD. & SMITH LAND & DEVELOPMENT CORP., JUDGE HESS Defendant CIVIL ACTION - LAW The trial list will be called on N/ A and Trials commence on 11/07/05 Pretrials will be held on lOll 9/05 (Briefs are due 5 days before pretrials) No.: See Consolidated Actions listed above, Civil Term Indicate the attorney who will try case for the party who files this Praecipe. Jeffrev T. McGuire. Esquire. 3631 North Front Street. Harrisburg. PA 17110-1533 Indicate trial counsel for other parties if known: Dean F. Piermattei. Esquire. One South Market Square. 12th Floor. Harrisburg. P A 17108-1146. e: Jeffrey T. McGuire This case is ready for trial. Signed: Date: September 19. 2005 Attorney for: Lamar L. Light 92910 2 (") ....> ~ = c:: = ,,;' <J' "O~'\ (/> ~-n ri"'f rn "7 , --0 rnr::::: '~>' [- - -Om u~y u:> :,P~ r;: \-~ :::'t . ,;" - -0 ;r::n '0-",-' :J: ~}B yiC~ r:-? Om -"-' ~ C) ~ Ui Dean F. Piermattei, Esquire Attorney 1.0. No. 53847 Stephanie E. DiVittore, Esquire Attorney 1.0. No. 85906 RHOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, P A 17108-1146 (717) 233-5731 Attorneys for Defendants LAMAR L. LIGHT Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. CIVIL ACTION - LAW NO. 01-5053 SMITH LAND & IMPROVEMENT CORPORA TION and BALD EAGLE INSURANCE CO., LTD. Defendants ACTION FOR DECLARATORY JUDGMENT DEFENDANTS' OBJECTIONS TO LISTING CASE FOR TRIAL NOW COME Defendants Smith Land & Improvement Corporation and Bald Eagle Insurance Co., Ltd. (collectively "Smith Land"), by and through their attorneys, Rhoads & Sinon LLP, and file the within Objections to Listing Case for Trial for the November 7, 2005 term and states the following in support thereof: I. On October 22, 2003, Smith Land filed a Complaint against Lamar Light ("Light") seeking damages based on Light's breach of fiduciary duty and tortious interference in connection with his resignation as an officer and employee of Smith Land, Cumberland County Docket No. 03-834. 2. Prior to that time, on August 29, 2001, Light had filed an action against Smith Land seeking a declaration that a Promissory Note, issued by Bald Eagle in connection with an 580736.1 Amended Shareholders' Agreement between Smith Land and Light, was valid and enforceable, Cumberland County Docket No. 01-5053. 3. On April 22, 2003, Light filed a Confession of Judgment Complaint confessing judgment, under the Promissory Note, against Smith Land in the amount of $2,674,220.93, Cumberland County Docket No. 03-1849. 4. These three actions were consolidated by Court Order dated December 5,2003. 5. Since that time, the parties have moved forward with discovery, conducting written discovery and depositions in accordance with the Pennsylvania Rules of Civil Procedure and direction of this Court. 6. Counsel for Plaintiff filed a Praecipe for Listing Case for Trial on September 19, 2005, seeking to have this matter tried beginning on November 7, 2005. 7. Smith Land acknowledges that discovery in this matter is complete. The difficulty with this listing, however, is that lead counsel and the associate involved in this case are currently scheduled for trial beginning October 31, 2005 in the Dauphin County Court of Common Pleas. (A copy of the July 29,2005 Order from the Honorable Lawrence F. Clark, Jr. scheduling Pendolino v. Hess, Docket No. 2003-CV-2969 for trial beginning October 31, 2005 is attached hereto as Exhibit "A" and incorporated herein by ref(:rence). 8. It is not certain that the Pendolino trial will be completed in order to begin trial in this case on November 7, 2005. Even if complete, however, IIrial the week preceding this matter will not present sufficient time for preparation. 9. The schedule for completion of this case was discussed during a conference call pursuant to Motions filed on behalf of Smith Land. At that time, the parties agreed to a discovery schedule which has been met and a schedule for production of expert reports which Smith Land has met. Additionally, at that time we agreed the parties could most likely list the case for the November term. At the time counsel for Smith Land made that comment, however, he was unaware the trial term began Noyember 7, 2005. Currently trial counsel is expecting the birth of his son for that same week, with a November 9, 2005 due date. 10. This continuance is requested in good faith, based on prior conflicts, and not designed to unnecessarily delay resolution ofthis case. WHEREFORE, Defendants Smith Land & Improvement Corporation and Bald Eagle Insurance Co., Ltd. respectfully request that this Court remove the above-captioned action from the November 7, 2005 civil trial term. Respectfully submitted, RHOADS & SINON LLP By: {/PIe (. (.."~ #-"C--r. ('i E0 Dean F. Piermattei I Stephanie E. DiVittore One South Market Square P. O. Box 1146 Harrisburg, P A 17108-1146 (717) 233-5731 Attorneys for Defendants JODI PENDOLINO IN THE COURT OF COMMON PLEAS VS OF DAUPHIN COUNTY, PENNSYLVANIA MICHAEL HESS, INDIVIDUALLY and: MICHAEL and CATHY HESS AS TRUSTEES OF MICHAEL B. HESS TRUST NO. 2003-CV-2969 MICHAEL HESS AND CATHY HESS, TRUSTEES OF THE MICHAEL B. HESS LIVING TRUST IN THE COURT OF COMMON PLEAS : OF DAUPHIN COUNTY, PENNSYLVANIA VS JODI E. PENDOLINO NO. 2004-NT-113 o R D E R AND NOW, this 29th day of July, 2005, the above-captioned cases are stricken from the August, 2005 Civil Court Term. The Deputy Court Administrator is directed to automatically list the cases for the October, 2005 Civil Court Term. Distribution Thomas E. Brenner, Esquire Dean Piermattei, Esquire SEP OD2bZ005 Freeman, Esquire, Deputy ud~ .... ~. c: -r:! '"'0::::: fTI- z:Z:: Zn :>0 c Administrato~ -< awrence F. Clark, Jr., Court t hi:.:i ~:':. c;.wrily tti~1 the foregoing is a t"'jtl (li1<1 C(jm;~;I..crJPY~()f!tlS orighlal f!/J{j. (I ( . \" "tOW!) C '17 ~ ~!.,t:'~:~.~L:-l/!:!.:!-,~- ProthbnDt~lY ...... = = "" en l'Tl "'0 I N ~ :x N - #:" Ul ~ ~ ;:c. 00:;" -l-ri,." :::" c-; 0- ;zn!:: ofTI< -10["1'1 :>..,,0 :::>:l -< CERTIFICATE OF SERVICE I hereby certify that on this 't't"'-" day of October, 2005, a true and correct copy of the foregoing Defendants' Objections to Listing Case for Trial was served by means of United States mail, first class, postage prepaid, upon the following: Jeffrey T. McGuire, Esquire Caldwell & Kearns 3631 North Front Street Harrisburg, PA 17110 <}>1h V l'~ - 4- (j C'. ....., <"'" C? <-" c:> n -, I ~ o -., ::::I _L"Tl r11p -1.110 H;s; t~~") """"In ;~ "i, :< -n ~";,. -' '-:';> U1 ...- Dean F. Piermattei, Esquire Attorney J.D. No. 53847 Stephanie E. DiVittore, Esquire Attorney I.D. No. 85906 RHOADS & SINON LLP One South Market Square, 12th Floor P.O. Box 1146 Harrisburg, P A ] 7 J 08-1 J 46 (717) 233-5731 Attorneys for Defendants Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA LAMAR L. LIGHT v. CIVIL ACTION - LAW NO. 01-5053 SMITH LAND & IMPROVEMENT CORPORATION and BALD EAGLE INSURANCE CO., LTD. Defendants ACTION FOR DECLARATORY JUDGMENT DEFENDANTS' MOTION TO ENLARGE DEADLINE FOR SUBMISSION OF SURREBUTTAL EXPERT REPORT NOW COME Defendants Smith Land & Improvement Corporation and Bald Eagle Insurance Co., Ltd. (collectively "Smith"), and moves this Court to extend the deadline for submission of Smith's Surrebuttal to Plaintiff s Rebuttal Expert Report. In support of such motion, Smith avers as follows: 1. On October 22, 2003, Smith Land filed a Complaint against Lamar Light ("Light") seeking damages based on Light's breach of fiduciary duty and tortious interference in connection with his resignation as an officer and employee of Smith Land, Cumberland County Docket No. 03-834. 2. Prior to that time, on August 29, 2001, Light had filed an action against Smith Land seeking a declaration that a Promissory Note, issued by Bald Eagle in connection with an 5829791 Amended Shareholders' Agreement between Smith Land and Light, was valid and enforceable, Cumberland County Docket No. 01-5053. 3. On April 22, 2003, Light filed a Confession of Judgment Complaint confessing judgment, under the Promissory Note, against Smith Land in the amount of $2,674,220.93, Cumberland County Docket No. 03-1849. 4. These three actions were consolidated by Court Order dated December 5, 2003. 5. Since that time, the parties have moved forward with discovery, conducting written discovery and depositions in accordance with the Pennsylvania Rules of Civil Procedure and direction of this Court. 6. Counsel for Plaintiff filed a Praecipe for Listing Case for Trial on September 19, 2005, seeking to have this matter tried beginning on November 7, 2005. 7. Smith filed Objections to that listing based on a previously scheduled jury trial beginning October 31, 2005, as well as the upcoming birth oflead counsel's child, currently due November 9,2005. 8. This Court struck this action from the November 7, 2005 trial schedule, directing that because this matter is a non-jury trial, it shall be listed pursuant to the Cumberland County Rules of Procedure with the assigned Judge. 9, As a result, this matter is not yet scheduled for trial, but will not proceed on November 7,2005. 10. Prior to this time, the parties agreed on deadlines for submission of expert reports, rebuttal expert reports and subsequent replies. 11. In accordance with this schedule, Smith forwarded its expert report to counsel for Plaintiff on September 23,2005. 12. Plaintiff opted not to produce an expert report except for a rebuttal report which was due on October 21,2005. 13. While Plaintiffs rebuttal expert report was due on or before Friday, October 21, 2005. Counsel for Smith, however, did not receive this report until Monday, October 24,2005. 14. Smith's Surrebuttal Report is due on or before October 28,2005. 15. The rebuttal report forwarded by counsel is 30 pages, with over 20 pages of attachments. 16. Smith intends to submit a reply to this rebuttal report. The deadline, however, is problematic based on the delay in receipt, the length of the report and the fact that Smith's expert will not be in for 2 days this week based on observance ofthe Jewish holidays. 17. At this time, based on these facts, Smith requests a 1 week extension until Friday, November 4, 2005 for submission of its Surrebuttal Expert Report which will address only the contentions that should have properly been part of the rebuttal reports. 18. Such extension is based on good cause and is not proposed in order to cause undue delay. Such extension, moreover, will not result in delay of resolution of this case as it is not currently scheduled for trial. 19. Counsel for Plaintiff was contacted and does not concur in this request. WHEREFORE, Defendants Smith Land & hnprovement Corporation and Bald Eagle Insurance Co., Limited respectfully request that this Honorable Court grant an extension for submission ofthe Smith Defendants' Surrebuttal Expert Report until Friday, November 4,2005. Respectfully submitted, RHOADS & SINON LLP By: f7pl -e v i/\.(--C-\.. H '--r:~? Cr) Dean F. Picrmattei Stephanie E. DiVittore One South Market Square P. O. Box 1146 Harrisburg, P A 171 08-1146 (717) 233-5731 Attorneys for Smith Land & Improvement Corp. & Bald Eagle Insurance Co., Ltd. CERTIFICATE OF SERVICE t-- I hereby certify that on this -/.'-\ day of () l. +r ~pv/ , 2005, a true and correct copy of the foregoing document was served by means of United States mail, first class, postage prepaid, upon the following: JeffMcGuirc, Esquire Caldwell & Kearns 3631 North Front Street Harrisburg, P A 17110 c;,.b>-c \.- t -1-+-<-'.-.. "-- -- ~ - .., . LAMAR L. LIGHT, Plaintiff vs. SMITH LAND & IMPROVEMENT: CORPORATION & BALD EAGLE : INSURANCE CO., LTD., Defendants SMITH LAND & IMPROVEMENT: CORPORATION, Plaintiffs vs. LAMAR LIGHT, Defendant LAMAR L. LIGHT, Plaintiff vs. BALD EAGLE INSURANCE CO., LTD. & SMITH LAND & DEVELOPMENT CORP., Defendants AND NOW, this IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW / NO. 01-5053 CIVIL IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 03-834 CIVIL IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 03-1949 CIVIL IN RE: NONJURY TRIAL ORDER Z 1-' day of October, 2005, a pretrial conference in the above captioned matter is set for Wednesday, November 16, 2005, at 9:00 a.m. in the Chambers of the undersigned. ~~, r;0~ ,'} \D BY THE COURT, .IJJ c ,., .'.' .' . ... . Jeffrey McGuire, Esquire For Lamar L. Light Dean F. Piermattei,Esquire For Smith Land & Improvement Corporation & Bald Eagle Insurance Co., Ltd. :r\m "\ OCT 2 6 200~ LAMAR L. LIGHT Plaintiff IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA v. CIVIL ACTION - LAW NO. 01-5053 SMITH LAND & IMPROVEMENT CORPORATION and BALD EAGLE INSURANCE CO., LTD. Defendants ACTION FOR DECLARATORY JUDGMENT ORDER AND NOW, this :t 7' day of October, 2005, upon consideration of Defendants' Motion to Enlarge Deadline for Submission of Surrebuttal Expert Report and all responses thereto, it is hereby ORDERED that said Motion is GRANTED. Defendants' Surrebuttal Expert Report is due on or before Friday, November 4,2005. BY THE COURT: ,~ , J. ~.O' 10,t= ,-..C.J . (/ '") {, '-' "I .... LAMAR L. LIGHT, Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA vs. CIVIL ACTION - LAW NO. 01-5053 CIVIL SMITH LAND & IMPROVEMENT: CORPORA TlON & BALD EAGLE : INSURANCE CO., LTD., Defendants SMITH LAND & IMPROVEMENT: CORPORATION, Plaintiffs IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA vs. CIVIL ACTION - LAW NO, 03-834 CIVIL LAMAR LIGHT, Defendant LAMAR L. LIGHT, Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA vs. CIVIL ACTION - LA W NO. 03-1949 CIVIL BALD EAGLE INSURANCE CO., LTD. & SMITH LAND & DEVELOPMENT CORP., Defendants IN RE: PRETRIAL CONFERENCE Present at a pretrial conference held November 16, 2005, were Jeffrey T. McGuire, Esquire, attomey for the plaintiff, and Dean F. Piermattei, Esquire, attorney for the defendants. This matter involyes the consolidation of three separate law suits, Lanlar Light has filed a declaratory action based on a promissory note seeking monies as a result of the redemption of his stock in Smith Land which was redeemed at the time he retired. Light has also filed an action seeking to confess judgment on a promissory note issued in connection with his retirement. Smith Land has filed suit against Mr. Light based on the latter's breach of fiduciary duty in connection with his employment for L.B. Smith, Inc. no :.\ C i :(~:) :;:.J 1 ~I"-'J ,...,. ,..I- ~,"....' , ~ i '1 ------ --- - - Counsel agreed that the trial would begin with testimony concerning the claim on the promissory note. The defense would then offer evidence concerning the diminution in value of the stock of Smith Land. The defendant would then adduce testimony in support of its claim against Mr. Light. The final phase of the trial would involve Light's defense of Smith Land's claims. The court was alerted to the possibility that there will be challenges to the admissibility of certain expert testimony in this case. Rulings thereon will have to await the time of trial. Mr. Piermattei expressed surprise at the number of witnesses listed in the plaintiffs pretrial memorandum. He indicated that he had received correspondence from Mr. McGuire to the effect that Lamar Light would only call four witnesses. Counsel will review the correspondence which was exchanged and attempt to resolve this matter. This relatively complicated case will require three days of trial. The matter has been set to commence on Wednesday, March 22, 2006, at 9:30 a.m. November 16,2005 ~(. ftJ Kej' Hess, J. ~frey McGuire, Esquire For Lamar L. Light :rlm CL.o? \\,\0 JOean F. Piermattei,Esquire For Smith Land & Improvement ,\ Corporation & Bald Eagle Insurance Co., Ltd. vs. : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYT V A NT A \~O. 01-5053 , LAMAR L. LIGHT Plaintiff SMITH LAND & IMPROVEMENT: CORPORATION & BALD EAGLE INSURANCE CO., LTD. Defendants : CIVIL ACTION - LAW OR\G\NAL and SMITH LAND & IMPROVEMENT: IN THE COURT OF COMMON PLEAS CORPORATION, : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff vs. : NO. 03-834 Civil Term LAMAR LIGHT, Defendant CIVIL ACTION - LAW and LAMAR L. LIGHT Plaintiff : IN THE COURT OF COMMON PLEAS : CUMBERLAND COUNTY, PENNSYLVANIA vs. : NO. 03-1849 BALD EAGLE INSURANCE CO., L TD & SMITH LAND & DEVELOPMENT CORP. Defendants : CIVIL ACTION - LAW DEFENDANT'S MOTION IN LIMINE AS TO EXPERT TESTIMONY AND NOW, comes the Defendant, Lamar Light, by and through his attomeys, Caldwell & Kearns, and files this Motion in Limine to preclude the admission of the expert testimony described more fully below, and in support thereof ayers as follows. 1. Smith Land instituted its action against Defendant by Writ of Summons filed on or about February 25,2003. 2. A subsequent Complaint was filed on or about October 22,2003, and alleged that Defendant's breach of fiduciary duties to Plaintiff resulted in damages in the form of excessive salaries and bonuses being paid to Light's family members. 3. Additionally, the Complaint alleged that Defendant's tortuous interference with third parties regarding the sale of a portion of Plaintiffs business operation and assets resulted in damage to Plaintiffs reputation and legal expenses. I. Motion to Exclude the Expert Report of Hunyady Appraisal Services 4. Defendant incorporates by reference paragraphs (1) - (3) above. 5. In the course of their discovery, Plaintiff identified Hunyady Appraisal Service as one oftheir experts. 6. On or about September 6, 2005, Hunyady Appraisal Services issued a report in which it offered a "retroactive hypothetical 'desktop' valuation." A true and correct copy is attached hereto as Exhihit "A. " 7. This "retroactive hypothetical 'desktop' valuation" was completed by Hunyady without inspection or verification of any of the infornlation provided to them. 8. In fact, the "retroactive hypothetical 'desktop' valuation" specifically states that it was assigned by assumption made solely through information provided by Plaintiff and is reported by the expert to be hypothetical and speculative. 9. Hypothetical reports may only be used where the facts assumed in the hypothetical were all established by competent eyidence. Commonwealth v. Rollins, 738 A.2d 435 (Pa. 1999). 2 10. No matter how skilled or experienced a witness may be, he will not be permitted to guess or to state judgment based on mere conjecture or assumption. Mauger and Co. v. A.C.A.B, 598 A.2d 1035 (Pa.Comwlth. 1991). 11. Hunyady Appraisal Services specifically states in the "Desktop Appraisal Report" that the appraisal is a "hypothetical 'desktop' valuation" based on assumption and is merely speculative. 12. The Hunyady Appraisal Report fails to state that the facts used in the hypothetical are based on competent evidence which appear on the record. 13. Further, the number assignment given to the equipment in the Hunyady Appraisal Report was never established on the record. 14. An expert may not state a conclusion based on evidence not found in the record. Commonwealth v. Blasioli, 685 A.2d 151 (Pa.Super 1996). 15. The Hunyady Appraisal Report states in the "valuation methodology" portion of the report that the values have been determined by (1) information provided by L.B. Smith, (2) own personal experiences in similar circumstances, (3) opinions of others in the industry who are considered knowledgeable in the field, and (4) various guides and publications used and accepted in the industry to help determine value. 16. The data described in (3) and (4) above are too vague to be considered "disclosure" because the opposing party has no way to determine whether the persons and/or publications used by Hunyady are of the type reasonably relied on by others in the field. 17. The Disclosure Rule mandates that an expert state the facts or data upon which an opinion is based. Pa. FRE 705. 18. Expert testimony that is expressed in a deficient manner is considered 3 incompetent. Kally v. Thackary Crane Rental, 874 A.2d 649 (2005). 19. The Hunyady Appraisal Report is expressed in a deficient manner due to its failure to base the hypothetical and speculative report on facts which are established by competent evidence and that appear on the record. 20. The Hunyady Appraisal Report is also expressed in a deficient manner due to its failure to base the number assignment used in the report on evidence found in the record. 21. Finally, the Hunyady Appraisal Report is expressed in a deficient manner due to its failure to state that facts or data upon which an opinion is based. WHEREFORE, Defendant, Lamar Light, respectfully request that this Honorable Court prohibit Plaintiffs from introducing evidence or testimony based on the report of Hunyady Appraisal Services. II. Motion to Exclude the Expert Testimony of Marc S. Dickler, CPA 22. Defendant incorporates by reference paragraphs (1) - (21) above. 23. In the course of discovery, Plaintiff identified Marc S. Dicklar, CPA, as another one of their experts. 24. In 2005, Marc S. Dicklar, CPA, from American Express Tax and Business Services, Inc. prepared a report and analysis regarding this case. 25. This report and analysis written by Marc S. Dicklar relied in part on the hypothetical and speculative "Desktop Appraisal Report" written by Hunyady Appraisal Services. 26. In Pennsylvania, there are no legal restrictions on the information relied upon by 4 an expert, except that the information itself is admissible or is of a type reasonably relied upon by experts in the field. Readinger v. W.C.A.B (Epler Masonarv), 855 A.2d 952. 27. Hunyady's report is not ofthe type reasonably relied on by experts nor is the information relied upon in the report are not established by competent evidence because the report is hypothetical and speculative. 28. Marc S. Dicklar's reliance on the Hunyady Appraisal Report is in violation of FRE 703, which requires that the data in which an expert bases his opinion must be the type that is either admissible itself or reasonably relied upon by experts in the field. 29. Additionally, an expert may not state a conclusion which is based on evidence not found in the record. Commonwealth v. Blasioli, 685 A.2d 151 (Pa.Super 1996). 30. The inventory data provided in the chart which was included in Marc S. Dicklar's expert report does not match with the inventory list which Defendant was provided with in discovery. 31. The expert report of Marc S. Dicklar relies on data that is not based on evidence found in the record. 32. The expert report of Marc S. Dicklar is expressed in a deficient manner due to its reliance on the Hunyady Appraisal Report. 33. The expert report of Marc S. Dicklar is expressed in a deficient manner due to its reliance on evidence not found in the record. 34. Marc S. Dicklar's report should therefore be considered incompetent. WHEREFORE, Defendant, Lamar Light, respectfully request that this Honorable Court prohibit Plaintiffs from introducing evidence or testimony based on the report and analysis of Marc S. Dicklar, CPA. 5 . . III. Motion to Exclude Any Evidence of Light's Duty or Breach Thereof. 35. Plaintiff has identified no expert as to what Mr. Light's duties were or as to how he breached his duties. 36. Mr. Light served as the President and Chief Operating Officer ofL. B. Smith as a heavy construction equipment dealer. 37. Expert testimony is necessary to establish negligent practice in any profession. Storm v. Golden, 538 A.2d 61 (Pa. Super. 1988). 38. The allegation here is that Mr. Light breeched his fiduciary duty which is more than mere negligence. 39. The issues in this case are beyond the common knowledge, intelligence, training and experience of the average juror and requires expert testimony. See, Marlin v. W. W. Babcock, 1990 W.L. 902461 (Phila.). WHEREFORE, Defendant, Lamar Light, respectfully request that this Honorable Court prohibit Plaintiffs from introducing evidence or testimony based on the report and analysis of Marc S. Dicklar, CPA. Respectfully submitted, Date: B)dl/')OCp f J By: ELL & KEARNS ~-- . McGuire, Esquire to ey lD No. #73617 James R. Clippinger, Esquire Attorney lD No. 07159 3631 North Front Street Harrisburg, P A 17110-1533 (717) 232-7661 Attorneys for Plaintiff/Respondent, Lamar Light 01-283/94249 6 ~ CERTIFICATE OF SERVICE AND NOW, this 22nd day of March, 2006, I hereby certify that I have served a copy of the within document on the following by providing a true and correct copy of the same by hand delivery to: Dean F. Piermattei, Esquire Rhoads & Sinon, LLP One South Market Square, 12th Floor P. O. Box 1146 Harrisburg, P A 17108-1146 By: LL & KEARNS ~ .....~ &. '!~'.'''''''- .,:j,-.J ~~ I (0 : qJ ?~1 \!Hl) '}'":P7 G~ U;;/'I )'.)0(., JD