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"\ ,. /, " ",' \' \~.."-: MATT CORPORATION ) IN THE COURT OF COMMON PlaintilT ) PLEAS OF CUMBERLAND ) COUNTY, PENNSYLVANIA vs ) ) NO, 95-4002 DOMINGO T, ALVEAR, M,D, ) NO, 95-4003 .,/ and VENERANDA B, ALVEAR, M,D, ) Defendants ) ) vs ) ) CIVIL ACTION LAW CHARLES R, DAVIS, ) Additional Defendant ) PRAECIPE TO ENTER APPEARANCE TO THE PROTHONOTARY: Please enter the appearance of the undersigned on behalf of the PlaintilT, Matt Corporation and the Additional Defendant, Charles R, Davis, c~~ SamOe L, Andes Altomey for PlaintilT and Additional Defendant Supreme Court 10 17225 525 North 12th Street Lemoyne, PA 17043 (717) 761-5361 and Central Dauohin Reilltv~, a civil miltter docketed to 95-7311 in the Court of Common Pleas of Cumberland County, Pennsylvania, added Nauman, Smith, Shissler & Hall, ilmong others, as an Additional Defendant in that suit, A copy of the Writ is attached hereto as Exhibit "A" ilnd mil de a part hereof, 4. 200 North Third. rnc" is the landlord of Nauman, Smith, Shissler & Hall. 5. At the time of the filing and service of the Writ of Summons to join Nauman. Smith, Shissler & Hall as an Additional Defendant in the Miller & Norford matter, Charles R, Davis was a principal and shareholder in 200 North Third, rnc. 6. Because of the aforementioned actions of 200 North Third, rnc., and Charles R. Davis in regard to the Mi ller I< Norford matter, Nauman, Smith, Shissler & Hall found i tseH unable to continue its representation of MATT Corporation and Charles R. Davis in the above matter and advised Mr. Davis to seek other counsel in a letter dated February 16, 1996, a copy of which is attached hereto as Exhibit "B" and made a pat-t hereof, 7. On March 15, 1996, Petitioner received a letter from Samuel L. Andes, Esquire ("Andes"). dated March 14, 1996, informing Petitioner that Andes had been retained to represent MATT Corporation and Charles R. Davis in the above matter, A copy of the letter from Andes to Petitioner is attached hereto as Exhibit "C" and made a part hereof. 2 8. On May 9, 1996, Petitioner sent Andes a Praecipe wherein Nauman, Smith, Shissler & Hall withdrew as counsel of record for MATT Corporation and Charles R, Davis, and a lettet. requesting that Andes file the aforementioned Praecipe along with his own Praecipe entering his appearance on behalf of MATT Corporation and Charles R. Davis. A copy of Petitioner's Praecipe and the May 9. 1996, letter from petitioner to Andes is attached hereto as Exhibit "D" and made a part hereof. 9. Despite numerous pledges to do so since May 9, 1996. Andes has failed to file the aforementioned Praecipes entering his appearance and withdrawing the appearance of Petitioner as counsel of record for MATT corporation and Charles R, Davis. 10, The withdraw of Nauman, Smith, Shissler & Hall as counsel of record for MATT Corporation, Plaintiff, and Charles R. Davis, Additional Defendant, is necessary to avoid confusion as to who is representing those parties in the above matter. 11. The withdraw of Nauman. Smith, Shissler & Hall as counsel of record for MATT Corporation, Plaintiff, and Charles R. Davis, Additional Defendant, will cause those parties no hardship, as they have retained Samuel L. Andes, Esquire, for representation in the above matter, as evidenced by Exhibit "C" attached hereto. 3 v. I III THE COURT or COMMOIl PLEAS I CUKBERLAIlD COUNTY, pBNNSYLVANIA I I 110. 95-4002 I I I 110. 95-4003 I I I I CIVIL ACTIOII - LAW I I KAT'1' CORlIORATIOII, plaintiff v. DOIlIIlGO T. ALVEU, II.D. an4 VlIlIRAIlDA B. ALVIU, II.D. Defsn4ants CRULI8 a. DAVI8, A44itiona1 Dsfsn4ant pRABCIpB TO WITHDRAW APPEARANCB Please enter upon the docket that the undersigned is withdrawin9 its appearance as counsel of record for MATT B Defendant. corporation, Plaintiff, and Charles R. AND BALL Counsel for: Plaintiff and Additional Defendant Date: May 9, 1996 !? lO l!l en ." j}o_ r.. '"/ ~r' r: ~;~i . I ~:. ~ :.-.: r,;~. , , '-I ~i '.J) .." -'a ' ) I ., .;: r I'- , - ;S' s: .' .. - ,":') ~- ... ~ -, CJ1 n '0 (") ~~; ..;,--, "i1 tJji.,; , :--1 c: ,j;J:'J t (1,' .::,: ~':i' ' 1'.:> q~ oi.,,:' 0 .'J '. i:!( -" J 'I~ '...., ..-~ 0\_. f~:: i.' ~ .... :'''1:") r'c' ~".:' lim .!.,,!:' :fJ ::'J => :";1 - 0) -, MATT CORPORATION, plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA v. . . DOMINGO T. ALVEAR, M.D. and VENERANDA B. ALVEAR, Defendants M.D., : CIVIL ACTION - LAW v. . , CHARLES R. DAVISr Additional Defendant NO. 95-4003 CIVIL TERM IN RE: PLAINTIFF'S PRELIMINARY OBJECTIONS TO DEFENDANTS' COUNTERCLAIM BEFORE HESS and OLER. JJ. ORDER OF COURT AND NOW, this \~t day of March, 1996, after careful consideration of Plaintiff's preliminary objections to Defendants' counterclaim, and for the reasons stated in the accompanying opinion, the portion of Count II of Defendants' counterclaim alleging conversion of proceeds of sales of assets of Geneva Properties, Inc. r is DISMISSED, unless Defendants join Geneva Properties, Inc., as a counterclaim plaintiff within 30 days of the date of this order; Plaintiff's remainin9 preliminary objections are DENIED. BY THE COURT, ~ J. esley Oler Benjamin C. Dunlap, Jr., Esq. 200 North Third Street P.O. Box 840 Harrisburgr PA 17108 Attorney for Plaintiff Ronald M. Lucasr Esq. . 'I," "."! 1 , , ' .. .1 '! I, I' : . . . I ~ '. ~, J ,',. .J ...._. '..:. ,J NO. 95-4003 CIVIL TERM certain payments Plaintiff allegedly made on Defendants' behalf.' Defendante have filed a counterclaim containing five counte. Count I ie for fraud, contending that Plaintiff mierepreeented to Defendants the financial proepects of a company named Geneva Properties, Inc., while serving as manager of Geneva's development project, as a result of which Defendants made unwise loans to Geneva. Count II is for conversion, maintaining that Plaintiff misappropriated proceeds from sales of Geneva property and mieappropriated funde which Defendants had intended to be loans from them to Geneva. Count III is for breach of fiduciary duty, asserting that Plaintiff breached a fiduciary duty to Defendants by misappropriating the aforesaid loans. Count IV is for negligent misrepresentation, contending that Plaintiff negligently misrepresented to Defendants the financial prospects of Geneva, as a reeult of which Defendants made an unwise cash contribution to Geneva. Count V is for breach of contract, maintaining that Plaintiff breached an agreement between it and Geneva, whereby Plaintiff was to use a portion of funds loaned by Defendants to Geneva to service debts of Defendants (who were allegedly third-party beneficiaries). Plaintiff's Complaint, Specifically, Plaintiff contends that it made payments to a bank in the amounts of (a) $4,013.44 on a debt of both Defendants and (b) $7,003.25 on a debt of Defendant Veneranda B. Alvear, M.D, rd. 2 NO. 95-4003 CIVIL TERM plaintiff has filed preliminary objections to Counts II (conversion), III (breach of fiduciary duty) and V (breach of contract) of Defendants' counterclaim, based upon Defendants' failure to join Geneva Properties, Inc., an allegedly indispensable plaintiff on the counterclaim. Argument on Plaintiff's preliminary objections was held on December 6, 1995. STATEMENT OF THE LAW Two rules of civil procedure are pertinent to this issue. Pennsylvania Rule of Civil Procedure 2227(a), relating to compulsory joinder, provides as follows: "Persons havin9 only a joint interest in the subject matter of an action must be joined on the same side as plaintiffs or defendants.'" This rule requires the dismissal of an action brought without the joinder of a necessary party.' Rule 1032 provides that a party waives all defenses and objections which are not raised either by preliminary objection, answer or reply except, inter alia, "that whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter or that there has been a failure to join an indispensable party, the court shall... dismiss the action." In Pennsylvania, an indispensable party is one whose rights . Pa. R.C.P. 2227(a) (emphasis added). . Grimme Combustion, Inc. v. Mergentime Corp., 406 Pa, Super. 620, 629, 595 A.2d 77, 81 (1991). 3 NO. 95-4003 CIVIL TERM are so directly connected with and affected by litigation that he or she must be a party of record to protect such rights, and his or her absence renders any order or decree of court null and void for want of jurisdiction,- In Mechanicsburg Area School District v. Kline r 1 the Pennsylvania Supreme Court set forth the followin9 guidelines for determining whether a party is to be considered indispensable in pending litigation I 1. Do absent parties have a right or interest related to the claim? 2. If so, what is the nature of that right or interest? 3. Is that right or interest essential to the merits of the issue? 4. Can justice be afforded without violating the due process rights of absent parties? Another factor to be considered is whether a final adjudication of the controversy without joining that party would leave the defendant at risk of incurring multiple or inconsistent obligations with respect to the BaDle liability.. Finally, the focus of an inquiry into whether a party is indispensable is to be upon the protection of the rights of the absent party, rather than the effect of joinder upon litigation difficulties. Grinune - Columbia Gas Transmission Corp. v. Diamond Fuel Co., 464 Pa. 377, 379, 346 A.2d 788, 789 (1974). 494 Pa. 476r 481, 431 A.2d 953, 956 (1981). · Fiore v. Oakwood Plaza Shopping Center, Inc., 401 Pa. Super. 446, 463r 585 A.2d 1012, 1020 (1991) (emphasis added). 1 4 NO. 95-4003 CIVIL TERM Combustion, Inc. v. Mergentine Corp., 406 Pa. Super. 620, 629, 595 A.2d 77, 81 (l991), citing E-Z Parks, Inc. v. Philadelphia Parking Authority, 103 Pa. Commw. 627, 521 A.2d 71, appeal denied, 517 Pa. 610, 536 A.2d 1334 (1987). Pennsylvania Rule of Civil Procedure 2227 provides for compulsory joinder in "very limited situations.... [It] is not predicated upon some administrative benefit to be gained by joinder but upon the unity and identity of the interests of the co-owners who are to be joined." Kelly v. Carborundum Co., 307 Pa. Super. 361, 368-69, 453 A.2d 624, 628, aff'd, 504 Pa. 238, 470 A.2d 969 (1982) . By way of example of the limited application of the compulsory joinder rule, it has been noted that "[a] third party beneficiary has a distinct right which entitles him to sue individually without joining the obligee of the original contract." 4 Anderson, Pennsylvania Civil Practice S2227. 6, at 125 (1991 Supp.), citing Manor Shopping Center Merchants Ass'n v. Ever Fast Fabrics, Inc., 59 Lancaster L.R. 341, 36 Pa. D. & C.2d 401 (1964). APPLICATION OF LAW TO FACTS In this case, the portion of count II of Defendants' counterclaim alleging a conversion of proceeds of sales of assets of Geneva Properties, Inc., by Plaintiff seems to the court to involve an interest of Defendants which is, at most, only a joint interest with Geneva (if it can be said to be an interest of Defendants at all). For this reason, Plaintiff's preliminary 5 NO. 95-4003 CIVIL TERM objections will be sustained with respect to that portion of count II alleging conversion of proceeds of sales of property of Geneva Properties, Inc. The balance of count IIr alleging conversion of loans made by Defendants, count III, alleging breach of a fiduciary duty to Defendants by misappropriation of their loans, and count V, alleging breach of a contractual duty to Defendants as third party beneficiaries, do not appear to involve "only" joint interests of Defendants, but rather distinct rights on the part of Defendants, independent of corresponding or related interests of Geneva. For this reason, the balance of Plaintiff's preliminary objections will be denied. ORDER OF COURT AND NOW, this 1st day of March, 1996, after careful consideration of Plaintiff's preliminary objections to Defendants' counterclaim, and for the reasons stated in the accompanyin9 opinion, the portion of Count II of Defendants' counterclaim allegin9 conversion of proceeds of sales of assets of Geneva Properties, Inc., is DISMISSED, unless Defendants join Geneva Properties, Inc., as a counterclaim plaintiff within 30 days of the 6 and breach of contract, under a third party beneficiary theory, in Count V, Thereafter, the Alvears filed a Writ of Summons to join Charles R, Davis as an additional defendant. On or about October 25, 1995, Matt Corporation filed its Preliminary Objections to the Answer with New Matter and Counterclaim for failure to join a necessary party. Those Preliminary Objections are now before this Honorable Court for decision. II, Factual Background Geneva Properties contracted with the Matt Corporation in 1993 to manage Brighton Place, a residential condominium development Geneva owned. The Alvears assert that they are third party beneficiaries under the Geneva/Matt Corporation contract (hereinafter the "contract"), and the Alvears included the contract in its Counterclaim to illustrate that Matt Corporation's breach of its duties under the contract resulted in significant damages to the Alvears, and to refute Matt Corporation's assertion that it had been directed to make payments on behalf of the Alvears. The contract specifically provides that Matt Corporation had no responsibility to fund payments to any vendors, since all such payments would be Geneva's responsibility. All of the counts contained in the Counterclaim relate to damages the Alvears incurred as a result of Matt Corporation actions. The Alvears have not asserted any cause of action on behalf of Geneva Properties, Inc. m. Legal Araument Matt Corporation has alleged that Geneva is an indispensable party to this action, and because the Alvears failed to join Geneva, the Court lacks subject matter jurisdiction -2- over Count II (conversion), Count 1lI (breach of fiduciary duty) and Count V (breach of contract, under a third party beneficiary theory) of the Counterclaim, Because Geneva is not an indispensable party to this action, it need not be joined, and the Preliminary Objections should be dismissed, Preliminary objections may be sustained only when they are clear and free from doubt. Powers v, Pennl!}'lvania Department of Health. 121 Pa, Commonwealth Ct. 321, 550 A,2d 857, app. den'd" 524 Pa. 636, 574 A,2d 75 (1988), Any doubts concerning a preliminary objection must be resolved against the party filing the objection. Aetna Electroplatin~ Co. v, Jenkins, 335 Pa, Superior Ct. 283, 484 A.2d 134 (1984). The Plaintiff based its assertion that Geneva is an indispensable party to this action on the grounds that the Counterclaim asserted causes of action or rights of Geneva, The Plaintiff argues that Count II of the Counterclaim is based upon Matt Corporation's Improper use of the funds of "Geneva Properties." Plaintiffs Brief, Page 5. This Is simply inaccurate, Count II of the Defendant's Counterclaim specifically provides that the funds converted by Matt Corporation belonged to the A1vears', not Geneva. See Counterclaim, Count II. In addition, Plaintiff asserts that the A1vears have alleged that Matt Corporation, "in the pelformance of its contract with Geneva, allegedly breached a fiduciary duty owed to them [the A1vears] as individuals," Pia/ntiffs Brief, Page 5, This Is also inaccurate. Count III of the Defendants' Counterclaim specifically provides that Matt Corporation had a fiduciary duty to tire A/vears because Matt Corporation was the custodian of $261,343.00 of the A1vears' money. See Counterclaim, Count Ill. It Is clear -3- that Count III of the Alvears' Counterclaim is not predicated on Matt Corporation's contractual duties to Geneva. The pleadings are clear that the Alvears entrusted this substantial amount of money to Matt Corporation with the understanding that it would be used for the benefit of Geneva. Consequently, this Count is obviously based on Matt Corporation's failure to use the A1vears' money for Geneva's benefit. The Plaintiff also alleges that Count V of the Counterclaim is based upon Matt Corporation's breach of its contract with Geneva. The Plaintiffs brief again misses the mark, because Count V rests on the A1vears' status as third-party beneficiaries to the Matt Corporation-Geneva contract. See Countere/aim, Count V. Matt Corporation owed certain duties to the A1vears which are separate and distinct from Matt Corporation's duties to Geneva Properties, Count V of the Counterclaim seeks damages for Matt Corporation's breach of its duties to the A1vears as third-party beneficiaries. The Plaintiff correctly cites MechanicsbuTg Area School District v. Kline, 494 Pa. 476, 431 A.2d 953 (1981), as setting forth the test to determine whether a party is necessary or indispensable in an action. Plaintiffs Brief, Page 5. A critical element of this test is whether a party's right or interest in a matter is "essential to the merits of the claim." MechanicsbuTg Area School District, 431 A,2d 953, 956 (emphasis supplied), In the present case, it is clear that Geneva has no right or interest sufficient to support a finding that it is a necessary or indispensable party to this action. To the extent that the Plaintiff can demonstrate that Geneva has any interest in this litigation, it is clear that no such interest is "essential to the merits" of the A1vears' claims against Matt Corporation, -4- such as would support a finding that Geneva Is an indispensable party, Nason v, Commonwealth, 90 Pa, Cmwlth, 130, 494 A,2d 499 (1985), The A1vears' claims against the Matt Corporation are separate and distinct from any interest Geneva may have as a result of its relationship with Matt Corporation, and cannot be affected positively or negatively by any outcome In this case, Further, the A1vears' relationship with Matt Corporation is discrete from Geneva's relationship with Matt Corporation. Since the Court can clearly issue a decree as to rights and liabilities vis a vis Matt Corporation and the A1vears in the absence of Geneva, Geneva is not an indispensable party, Grimme Combustion, 1nc, v, Mergentime Corporation, 406 Pa. Superior Ct. 620, 595 A,2d 77, appeal denied, 530 Pa. 644, 607 A,2d 254 (/991). In addition, there is no possibility that any Geneva right will expire as a result of this litigation, nor is any claim accruing to Geneva potentially affected. Mechanicsburg Area School District, supra. Geneva cannot be prejudiced by continuing this action without them, and the Preliminary Objections should be dismissed. E-Z Parks, Inc. v. Philadelphia Parking Authority, 113 Pa, Cmwlth. 528, 521 A.2d 391 (/988). At best, the Plaintiffs may be in a position to argue that this case is governed by Rule 2'-29 of the Pennsylvania Rules of Civil Procedure relating to permissive joinder. That Rule provides that a Plaintiff may join as a defendant persons against whom he asserts any right to relief jointly, severally, separately, or in the alternative in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences if any common question of law or fact affecting the liability of all such persons will arise in the action. Pa. R,C,P. 2229(b), However, the A1vears assert no .5- causes of action against Gcneva and, as a result, have no obligation to bring Geneva into the case. Id, It appears that it would have been more appropriate for Matt Corporation to have joined Geneva as a dcfendant since Geneva had sole responsibility for making payments to creditors, and that is the issue underlying Matt Corporation's claim in this matter. Under no circumstances can Gencva be found liable to the Alvears under the claims set forth in the Counterclaim. Geneva is not named as a Defendant in the Counterclaim, and the Defendants' Counterclaim asserts that Matt Corporation only is liable for the damages, Geneva is not in privity with the Matt Corporation nor is Geneva responsible for Matt Corporation's breaches of its various duties to the A1vears. Consequently, Geneva Properties has no interest in a counterclaim and no right that is so directly connected with and affected by the litigation that Geneva must be a party of record to protect its rights, Mechanicsburg Area School District v. Kline, supra. Matt Corporation has also argued that Geneva Properties is a necessary or indispensable party because the failure to join Geneva could subject the Matt Corporation to the risk of incurring double, multiple, or inconsistent obligations. Fiori v. Oakwood Plaza Shopping Center, 401 Pa. SlIperior Ct, 406, 585 A.2d 1012 (1991). The Plaintiff argues that Counts II, III, and V of the Defendants' Counterclaim arise under the contract between Geneva and the Matt Corporation. Plaintiffs Brief, Page 9. Again, the Plaintiffs argument is inaccurate. The counterclaims arise because of Matt Corporation's duties to the Alvears, not as a result of Matt Corporation's duties to Geneva. Geneva may well have additional rights that it could assert against the Matt -6- Corporation, but those rights are distinct from the Alvears and are not implicated in this litigation. A5 a rtsult, it is clear that Geneva Properties, Inc, has no rights or interests that are so pervasively connected with the claims of the litigant that no relief can be granted without impairing or infringing upon the rights of Geneva Properties, Mechanicsburg Area School District, supra, A final adjudication of this action can be made without joining Geneva since there is no risk that the Matt Corporation could incur multiple or inconsistent obligations with respect to the same potential liability, A5 noted, the Matt Corporation's potential liability to both Geneva and the Alvears are substantively distinct. Fiori, supra. Consequently, there is possibility that Matt Corporation can incur multiple or inconsistent obligations with respect to the same potential liability. Fiori, supra. Matt Corporation's liability to the A1vears' and to Geneva is not the same, rd. Finally, the only potential feason for joining Geneva as a party to this suit is that the Alvears have averred as a defense to the Matt Corporation Complaint that Geneva is solely liable over to the Matt Corporation. To the extent that this Court believes it should rely on that averment to direct the Alvears to join Geneva Properties, the A1vears will voluntarily amend their Answer with New Matter and Counterclaim to remove any such averment regarding Geneva's liability toward the Matt Corporation. .7. MATT CORPORATION, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 95-4003 Plaintiff v. DOMINGO T. ALVEAR, M,D. : and VENERANDA B, ALVEAR, M,D,,: CIVIL ACTION - LAW Defendants v. Charles R. Davis, Additional Defendant CERTIFICATE OF SERVICE / rr I, ANTHONY J. NESTICO, hereby certify that on the ...L- day of December, 1995, I caused a true and correct copy of the foregoing Brief in Opposition to Plaintiffs Preliminary Objections to be served upon the following individuals by the following methods: Benjamin C. Dunlap, Jr., Esquire Nauman, Smith, Shissler & Hall 200 N. Third Street 18th Floor Harrisburg, PA 17108-0840 Counsel for Matt Corporation (VIA HAND DELIVERY) Charles R. Davis 1200 Camp Hin Bypass P.O. Box 901 Camp Hin, PA 17001-0901 (VIA FIRST CLASS MAIL) ~ //J !f:t! ~ ANTHO~ . NESTICO J l'! i ((II ,. 1. - P.>A.' t F ~ . '^" "'1 .. "~-r:-,";"'-~ r-~."..".~n_",,",>(i":";::'__:'- :" : ~ , the separate actions under Docket No. 95-4003 on August 22, 1995, which was granted on August 25, 1995, Defendants filed their Answer with New Matter and counterclaim on September 22, 1995. Defendants filed an Amended Answer with New Matter and Counterclaim on October 5, 1995. Defendants filed a praecipe and writ of summons to join Charles R. Davis as an additional defendant on October 4, 1995, which was served on October 11, 1995. Matt Corporation filed its preliminary objections to Defendants' Amended Answer With New Matter and Counterclaim for Failure to Join a Necessary Party, pursuant to Pennsylvania Rule of civil Procedure 102B(a) (5), on October 25, 1995. Factual Backoround During 1993, Matt corporation, Plaintiff, was retained to provide property management services to Geneva Properties, Inc. Amended Answer With New Matter ann Counterclaim at , 7. During that time period. Matt Corporation advanced funds to make payments on certain personal loan obligations of the Defendants Alvear with Pennsylvania National Bank and Pennsylvania State Bank. ~ Complaint at " 12, 20. In its complaint, Matt Corporation sued to recover the funds it advanced on behalf of the Defendants Alvear. In addition to denying that Matt corporation advanced funds to make payments on the aforementioned personal loan obligations of 2 the Defendants Alvear in their Amended Answer With New Matter and Counterclaim, ~ ~ at " 12, 20, the Defendants Alvear counterclaimed against Matt Corporation, with counts sounding in fraud, conversion, breach of fiduciary duty. negligent misrepresentation and breach of contract. As the basis for the various counts in their Counterclaim, the Defendants Alvear introduced the agreement which Geneva Properties entered into with Matt Corporation on August 6, 1992, as Exhibit "A" to their Amended Answer With New Matter and Counterclaim (hereinafter "Contract"). ~ at , 33. The Defendants Alvear also aver the sole responsibility of Geneva Properties for any damages proven by Matt Corporation. ~ at , 58. The Defendants Alvear are not parties to the aforementioned Contract, however, nor did they join Geneva properties, Inc., as a party to the present action. Leoal Aroument A necessary or indispensable party is one whose rights or interests are so pervasively connected with the claims of the litigants that no relief can be granted without impairing or infringing upon those rights, DeCoatsworth v , Jones, 414 Pa. Super, 589, 607 A.2d 1094, 1098 (1992), modified, 639 A.2d 792. A party is necessary or indispensable if a final adjudication of the action without joining that party would leave a defendant at risk 3 of incurring multiple or inconsistent obligations regarding the same liability. Fiore v. Oakwood Plaza Shoeeinq Center, 401 Pa, super. 406, 585 A.2d 1012, 1020 (1991). See qenerallv 3 Standard Pat Practice 2d Parties ~ 14:177. The plaintiff must join all necessary or indispensable parties as parties of record. columbia Gas Transmission Core, v, Diamond Fuel Co" 464 Pa. 377, 346 A.2d 788, 789 (1975). The court has no authority to proceed with the action if an indispensable party is not joined and unless the defect is rectified, the court is required to dismiss the action. Pa.R.C.P. 1032(b); id.; vale Chemical Co. v, Hartford Acc. & Indem" 512 Pat 290, 516 A.2d 684, 687-88 (1986). The rule mandating joinder of indispensable parties is based upon the need to protect the due process rights of absent parties. Grimme Combustion. Inc. v, Merqentime Corn" 406 Pat Super. 620, 595 A.2d 77, 81 (1991), aneeal denied, 530 Pa. 644, 607 A.2d 254. It is also based upon the principle of public policy which requires that a decree should finally and completely determine the rights that all persons have in the subject matter decided, so that the parties may safely obey and act upon the decree and further proceedings may be avoided. Hanna v, Chester Times, 303 Pa. 252, 256, 154 A. 591 (1931). A judgment operates as final and conclusive only between the parties to the suit, Id. It does not operate as res judicata against a non-party, which is ordinarily not barred from 4 Counterclaim that Matt Corporation allegedly breached its contract with Geneva Properties. Inc.' See id, at ~ 94. As the basis for their counterclaims. the individual Defendants Alvear introduce the agreement which Geneva Properties entered into with Matt Corporation on August 6. 1992, as Exhibit "A" to their Amended Answer With New Matter dnd Counterclaim. IQ... at ~ 33. The rights asserted by Defendants in Count II for conversion of Geneva Properties funds. in Count III for breach of a fiduciary duty and in Count V for breach of contract are claims which, if true, are claims which Geneva Properties would have under its Contract with the Plaintiff. Matt Corporation. The duties owed by Matt Corporation under the Contract, including any alleged duty as a fiduciary, were owed to Geneva Properties, not Defendants. The Pennsylvania Supreme Court has cited the following test for determining when the interests of an absent party are essential to the merits of an action: In Pennsylvania. an indispensable party is one whose rights are so directly connected with and affected by litigation that he must be a party of record to protect such rights. Mechanicsburo Area School District v, Kline. suera, 431 A.2d at 957. quotin~ Columbia Gas Transmission Core. v, Diamond Fuel Co., suera. , It is unclear from their Amended Answer With New Matter and Counterclaim whethur the Defendants Alvear are alleging Matt Corporation's breach of the agreement entered into with Geneva Properties on August 6, 1992. i.....!iL... their Exhibit "A". or a separate agreement between Matt Corporation and Geneva Properties. In either case, however, the principles discussed regarding Count V of the Counterclaim are the same, 6 Assuming, arquendo, that the individual Defendants Alvear have any rights as asserted in Counts I I, I I I and V of the i l' counterclaim, those rights would arise from the Contract between Matt Corporation and Geneva Properties, Inc, The rights of Geneva Properties under the Contract are directly connected with any rights allegedly owed by Matt Corporation to the individual Defendants Alvear under Counts II, III and V, as the Contract upon which the Counts are based was with Geneva Properties, not Defendants. It therefore follows that Geneva Properties is a necessary or indispensable party to the present action because its rights "are so directly connected with and affected by [the] litigation that [it] must be a party of record to protect such rights." Mechanicsburq Area School District v, Kline, suora, 431 A.2d at 957. Significantly, the Defendants Alvear aver that Geneva Properties, Inc., "is solely liable to the Plaintiff to the extent Plaintiff proves any actual damages." Amended Answer With New Matter and Counterclaim at , 58. The Defendants Alvear thereby attempt to fend off Plaintiff's claims against themselves by alleging that Geneva Properties, Inc., is solely responsible for Plaintiff's damages, notwithstanding that they have failed to make Geneva Properties a party, Defendants further aver that an agreement existed between Matt Corporation, Geneva Properties and Defendants that Matt Corporation would use part of the funds 7 provided to Geneva Properties to service the debt Defendants incurred in order to obtain the funds to loan to G~neva. ~ at ~ 40. If the person Geneva Properties, Inc., was involved to the degree Defendants aver, then they should have made it a party. These averments provide clear evidence of Geneva Properties' interest in the outcome of this litigation, Geneva Properties could be burdened with liability for the payment of Matt Corporation's claims against the Defendants Alvear if those damages are determined to be the responsibility of Geneva Properties rather than Defendants. Additionally, Geneva Properties' alleged participation in an agreement for Matt Corporation to use part of the funds loaned by Defendants to Geneva Properties to service the debt incurred by Defendants would also affect the interests of Geneva Properties. See Waksmunski v. Delqinis, 391 Pat Super. 37, 570 A.2d BB, 92 (1990). Geneva Properties' status as a necessary or indispensable party is not diminished by the fact that one of the Defendants, Domingo T. Alvear, M.D., is president and largest shareholder of Geneva Properties, Inc. See Amended Answer With New Matter at ~ 5. Where an individual and a corporation have distinctly separate interests in the litigation, both are necessary or indispensable parties to the action, even if the individual is also an officer of the corporation. Columbia Gas Transmission Corp. v. Diamond Fuel Co" supra, 346 A.2d at 7B9. B Geneva Properties, Inc., likewise qualifies as a necessary or indispensable party under the second basis for determining such status, .l...JL., that a failure to require joinder would SUbject Matt Corporation to the "risk of incurring double, multiple or inconsistent obligations." See Fiore v. Oakwood Plaza Shooeinq Center, suora, 585 A,2d at 1020. Because Counts II, III and V of Defendants' Counterclaim arise under the Contract between Geneva and Plaintiff Matt Corporation. any judgment in favor of Defendants on any of these Counts could subject Matt Corporation to the risk of incurring double, multiple or inconsistent obligations in any subsequent litigation if Geneva Properties is not joined in the present action. See Gardner v, Alleqhenv Countv, 382 Pa. 88, 95- 96, 114 A.2d 491 (1955), Based upon the Defendant Alvears' allegations, Geneva Properties, Inc" is a necessary or indispensable party to the present action as its rights and interests are so pervasively connected with the claims of the litigants that no relief can be granted without impairing or infringing upon the rights of Geneva and because a final adjudication of the action without joining Geneva Properties would leave Matt Corporation at risk of incurring multiple or inconsistent obligations in respect to the same potential liability. Therefore, because an indispensable person, Geneva Properties, Inc., has not been made a party to this action, this Honorable Court lacks subject matter jurisdiction over Counts II, III and V 9 of Defendants' Counterclaim and Counts II, II I and V should be dismissed. Furthermore, Paragraphs 33, 34, 55, 58 and Exhibit "A" to Defendants' Amended Answer With New Matter and Counterclaim, which support Counts II, III and V, should be ordered stricken, NAUMAN, SMITH, SHISSLER AND HALL by: .l:;f2t.'-'I....""'.." L Vt, ;.....,.~ ,Ii Benjamin C. Dunlap, Jr., Esqu1~e ' Supreme Court 10 #66283 200 North Third Street, PO Box 840 Harrisburg, PA 17108 Telephone: 717/236-3010 Counsel for Matt Corporation, Plaintiff Date: November 13, 1995 10 , I , . j ~ t>'S(ovf~Y " .. ...........- , " ,.~- , . relevant to the subject matter of the case nor is it likely to lead to the discovery of relevant information, 3. MATT corporation objects to Request for Production No.3 on the basis that it is overly broad and vague and that it does not relate to the claim or defense of the party seeking discovery or to the claim or defense of any other party and is therefore not relevant to the subject matter of the case nor is it likely to lead to the discovery of relevant information, 4. MATT corporation objects to Request for Production No.4 on the basis that it is overly broad and vague and that it does not relate to the claim or defense of the party seeking discovery or to the claim or defense of any other party and is therefore not relevant to the subject matter of the case nor is it likely to lead to the discovery of relevant information. 5. MATT corporation objects to Request for production No.5 on the basis that it is overly broad and vague and that it does not relate to the claim or defense of the party seeking discovery or to the claim or defense of any other party and is therefore not relevant to the subject matter of the case nor is it likely to lead to the discovery of relevant information. , , . , 12. There are no cancelled checks drawn on any Geneva Properties account relevant to any actions alleged in the Complaint, In addition, MATT Corporation objects to Request for Production No, 12 on the basis that it is overly broad and vague and that it does not relate to the claim or defense of the party seekin9 discovery or to the claim or defense of any other party and is therefore not relevant to the subject matter of the case nor is it likely to lead to the discovery of relevant information, 13. MATT Corporation objects to Request for Production No, 13 on the basis that it is overly broad and vague snf that it does not relate to the claim or defense of the party seeking discovery or to the claim or defense of any other party and is therefore not relevant to the subject matter of the case nor is it likely to lead to the discovery of relevant information. 14. MATT Corporation objects to Request for Production No. 14 on the basis that it is overly broad and vague and that it does not relate to the claim or defense of the party seeking discovery or to the claim or defense of any other party and is therefore not relevant to the subject matter of the case nor is it likely to lead to the discovery of relevant information. ~ .' M,A TT Corporation , , 1200 Camp H,li BvPnsl PO, Bo. 9011 Camp 11>11, I'A 17001,0901/1717) 737,30031 FAX 17171 761,0578 April 14, 1995 Veneranda B. Alvear, M.D. Domin90 T. Alvear, M.D. 60 Pleasant Grove Road Hechanicsburg, PA 17055 INVOICE For payments made to Pennsylvania state Bank on account of personal loan obligations of Veneranda B. Alvear, M.D., and Domin90 T. Alvear, M.D., per the direction of Domin90 T. Alvear, M.D. I I I I i I I I ! I i 1 I , i i MATT Corporation P.O. BOle 901 camp Hill, PA 17001-0901 .,- ~ATT Corporation 1200 Camp H,li BvPas./ P.O. Boo 901/ Camp HIli, PA 17001.0901/11171 737.3003/ FAX 17171761.0578 April 14, 1995 Veneranda B. Alvear, H.D. 60 Pleasant Grove Road Hechanicsburg, PA 17055 INVOICE For payments made to Pennsylvania National Bank, Custodian for GLAHH Anesthesia services, Ltd. Retirement Plan, on account of personal loans made by the Plan to Veneranda B. Alvear, H.D., per the direction of Domingo T. Alvear, H.D. Payment 03-08-93 $1,310.86 03-17-93 $ 990.06 06-30-93 $4,007.58 Interest on Unpaid Balance S 694.75 TOTAL AMOUNT DUE BY 4/20/95 $7.003.25 Remit to : MATT Corporation P.O. Box 901 Camp Hill, PA 17001-0901 ~nnsylvania NationaJ~ ^~~~~ CAPITAL TRUST DEPARTMENT ONE KEYSTONE PLAZA FRONT & MARKET STREETS P.O. BOX 2063 HARRISBURG, PA 171lJ5.2063 l71n 237-4970 FAX 171n 237-4999 -...! - February 26, 1993 Veneranda B. Alvear, M.D. 60 Pleasant Grove Road Mechanicsburg, PA 17055 RBQOBST POR PAYNBNT LOAN I Glamm Anesthesia Retirement Savings Plan $ 851.45 Payment Due 03/23/93 LOAN I Glamm Anesthesia Profit Sharing Plan $ 138.61 Payment Due 03/23/93 TOTAL AMOtJN'1' DOB $ 990.06 Please use the envelope enclosed to remit payment. Enclose a copy of this request with payment. ,till ,. Depoofted to U,o crodJl 01 . P~e I . Tru'l Dopn'lIncal. ^"''',"ce 01 ~do""m'nt :UDunl...J ~.II'i,r.I'!. r.;,r.!: 1'"~ 'lrtw Com. .Iny. Alloonll,ll',~ lIay Cu IIlu 'll,.Mr'lit .)(Ud. ,lOll Dcnk "'Ill 1'1\1I1 (;Qg,1lIIlIl 01 All_a, Po. TMI Dtputm_ 'ftwt .-., \ ' h1.1I'l.t;TATE h.h,";" . O.'r,,' ill '!>l.. .', r~ Ifflt 1;"1' to. .:. ,..- I... '7 b' \I~I';~',I'~ 04 lUr ~t '1' r. J) _. .n "'I .~~I\f.., ' ,', n ~\ II I ..:,,,!ii N i:1~"'1l ~ 5~g! ~ 21' ~ ,I, " .., jii 11I'11 '. lie' l~'l ,'. I~:a I ! , i 1 I I I 1 ".< s '.J~I ~:' ''0) I~I ,; ,,-/ ,',-; ......... In ." ,j-) '_~I ,.:. '.'; .... ...-"'- ..._--~.-..... ,'::" .--.:.., 001 Z 1 (j 0 7 ~ PENNSVLVANIA Nil'T:LJN/iL "'J\'vK &"1. ('L I' f" ...' * ,J' fl.: '_. .'1\. .031 301 .~61 ~ tll.; . J )3 ':-J 1'" .' II 3... . i t.,; (J\ ," (J\ 0 " 0 ;) )l " ~ ..j:. , ,'. "; ...., II: .. :E 8 " no: .. .. :1':1 I ",I II .-r . '" ,';', ~. , ;..' --- ". 1 tJo' . ~ nl.5lTtl toT ~"'J11a I " . . '" .""-~ . " -,:---..~ f .. .' COMMONWEALTH OF PENNSYLVANIA . COUNTY OF: CUMBERLAND 09-3-04 COMMON PLEAS NOTIFICATION REQUEST FORM PLAINTIFF NAk,l:1 "nIl AIMNllll!l ~ATT CORPORATION 1200 CAMP HILL BY-PASS CAMP HILL, PA 17011 L -, MIIII Ul\' Nn ILI",,,,"..II<1" 17055-0000 DH~NDANr: . tjAUI "n,l AllOUl ntJ 'ALVEAR, M,D" VENERANDA 60 PLEASANT GROVE RD. MECHANICSBURG, PA 17055 L VS, ) J ,.Jr A"dl~'" GLENN R. FARNER 5002 LENKER STREET MECHANICSBURG, PA , , , , I..."h.~ 17171 761-0230 B, ET AL. -, GLENN R. FARNER 5002 LENKER STREET MECHANICSBURG, PA 17055-0000 Dockel No.: CV-0000209-95 Dale Filed: 4/21/95 .." Disposition Dale; 6/29/95 Plealo be ndvlaod thai nn appeal hns beon filod In lho nbovo captioned cnlo. Kindlv uta Ihla form to Indlcolo Iho fOlulla In thla cIlo,_ond raturn to tho Inuing authority (lilted abovo). RESULT OF APPEAL Common Plel' Judge SUMMARY APPEAL APPEAL STRICKEN, .pp..1 hn. boon di.nllowod. APPEAL DISCONTINUED. oppenl hos beon disontinucd bV oppcllnnl. DISTRICT JUSTICE DECISION UPHELD. court has ronched lomo decision 01 oliglnal dlslrict luatlco decision. _ district jUltico oHico Is to collect romalnlng finos/coatl. APPEAL SUCCESSFUL. court has reached decision favornble to defondant. tull rofund to bo Inuod by dielrlct jU6tico oHico, portlol rofund 10 bo Inuod by dir.hlct ju&tico oHico. REVISED DISTRIBUTION OF FINES AND COSTS II district justlco oHico II to ISlluo R partial ,olund, plonllo Indicate any now dllltrlbutlon In the amount(s) of fino' nnd cOlli RI n rOlull of Iho court', doci&lon. FINE COUNTY CRT COST STATE CRT COST STATE csn HEARING COST EMS CAT JCP DVC CVC CCD ~ ...~. OTHERlplen.o .pnclly) CIVIL APPEAL APPEAL STRICKEN" .pponl hn. boon di.ollowod. APPEAL DISCONTINUED - oppeRI hRS beon disconllnuod by oppoUnnt. . ", DISTRICT JUSTICE DEq1SION UPHELD, court h.. lonched tho .omo docl.lon o.lho dl.blclju.Uco ludgment. DISTRICT JUSTICE DEdlSION DISMISSED, court hn. .onchod 0 docl.lon thnl doo. not concur with Iho di.lrlcllu,Uco judgmont. WRIT OF CERTIORARI WRIT STRICKEN, npponl hn. boen dl.nllowod. WRIT DISCONTINUED, w.il h.. boon diIConllnuod by nppollnnt. DISTRICT JUSTICE DECISION SET ASIOE, the cn.o will bo rohenld duo 10 illogul.'ily,lnck oIIUlI.dlcUon, o. Imp.opor venuo. WRIT OISM1SGED. dlltrlct JUllico docl&lon WAI not found 10 bo flRwod, locking IUllldlcllon. 0' havinG Imp,oper vonue. STATEMENT OF OBJECTION CPI.... give a gen...llumm.ry 0' 'he ,,"ull") OBJECTION DISCONTINUED. oblocllol\ haa boon dloconllnuod by Iho nppellonl OBJECTION DENIED. obJoctlon hns boon donied by the Courl of Common Pions. OBJECTION UPHELD. appollant'a objocllon hna boon uphold by tho Courl of Common Plaos. AOPC 129.95 FORM PRINTED: 7/31/95 15:51:11 COMMlINWIAl 'H 0' P1NNIYlYANIA rnUil 0' COMMONPli.s NOTICE OF APPEAL fROM Cuml..-, r 1 and JIJDlllAI 0 ,.,et DISTRICT JUSTICE JUDGMENT COMMON PLlAS No. 95-4003 civil Turm NOTICE OF APPEAL Nolice ii given 1001 the appellant hen filed in the above Caul t of COl1111'1on PltOu\ un nppeul from the judgment rendtned by tint Di\trict Ju,tice on the dole and in the cooo mentioned below. Th=~:NI'l~~~~:r~;;-~~d Venernnda 13.-~;~~~;'-M.lJ.-~- r~~~:;:Th"(jl>r----_n- --- "AfiiIUof"lmuA"Nf-U"'._- .----.---~----_.- (I"""~' -- -----..---~I-...il----------_,.7m.>- 60 Pheasant Grove Hoad ~lcchanic5burg ~-'^ 17055 Dilfor~m~-' ".Iit L"'~ Of (i",-.;'..,;! -_._-~-----~~---;t);';;-;;&;iI~--- ~"'o/"" "~::~"5 '"'I~,.Hoo ~;l"n7t~~;~".? ^,,ca,~M.O. T\>. bk,~k-~iil~~ ~:ood ONLY wrn;n thi. rKl;~lil~:~ ,equiled undet PeL RCP.JP N;"i,ic,i.l';' w.Js ~tl}iffNhs~-~!~~~~~q~o.- 10D8&. Thi. Notice of Appeal, when received by the Di.lricl Ju.lice, will opetale a. 0 100' (6) ill actiO/1/JO/om Dis/,ic/ Justica, IJ() MUST SUPERSEDEAS 10 Ihe judgmenl fOl po..e..;on in Ihi. eo... FILE A COMPLAINT within /WfJllty (20) days .llta( liIillg his NOTICE 01 APPEAL. ---------------. -s~1iI.JrUfl' i,i hll"hNIIJ;.~I-'-~~--tW--bt'f'(jiy- ...- .'RAECfp"fTO ENTER RULE TO FILE COMPLAINT AND RuIETO FILf~-__M' (This sccliorJ 01 101m 10 be usm ONLY when ill~~,/I."" w,,, DUENDIINT Is'-''' f'" flCPJI'. No_ 100117) III ilCl,OII oelOl" D'slflcl Jus/ico. IF NOT USED, delilch IrOln copy 01 nOI''''' 01 ,11~Jml 10 I~' Sf"V'" "1'0" ill~~'/I",) PRAECIPE, To Pralhonotary Enler rulo upon _____-1-.lat!;__Cgrpo):at:ign. __ __ _ _ _ m____ ,oppelleel'), 10 filo 0 complaint in Ihi. appeal N.~rlfl o/.l;f.ll'l.'IHI (CommonPleo.No. 95-4003 Ciuil T_t:..r~___}WithinlwenIYI20}daY~~c ;,=OI~If~enlrY . . tofnonpro< 11;J'I.V of. ,>1'/1,11" Of hIS ll!hVnt!)' Of agent Anthony J. st' co, Esq. RULEI To Matt Corporation__ _ _ _ ,oppelleel'} Urn() III ""11'/.'1'1'" (1) You are notified that 0 rule h hereby entered upon you to file 0 wmplainl in Ihis appeal within twenty (20) days after the date of servke of this rule upon you by penonal service Of' by certified Of registe,ed mail Dolt: (2) If you do nol file 0 comploinl within Ihi. lime, 0 JUDGMENT OF NON PROS Will BE ENTERED AGAINST YOU. d ~L6-.~ ~' / 1/ S9'GoI~ i 1""'" .... .1 ~~. .1 .. ... " ~"" ~, ~ _,. ,~ ... .1 -~ July 28, ,19----2.~ tt,u- I COUIT fiLl TO II FILlD WITH PIOTHONOTAIY AOJ'C3IHW PROOF OF SERVICE OF NOTICE OF APPEAL AND RULE TO FILE COMPLAINT (Tn" ""'01'" "'IV/C" AWS I HE Infn \','111/10'1 f/vr (51 1M YI: Mlrn (,1ili!] 1/,,, nr;licu of iJppe,1/, Cflcck iJp"lico~1o bC'DS) CO_ONWfAlltt Of PfNN'YlVMUA COUNTY 0.______________. '" AFFIDAVIT: I h.,.by 'WOOI or nil..," Iho' I '.,VW [J 11 [.":!'lY of 111I! Nolinl Ilf Apr"!!!. COIlI01,m .:100-, No", {J.lttJ of ."J"VIr:OJ.__ ~'H._'~" -"-' 'Q--~_., rf)(r!lp' olkllllUd hOlut", olld \lpa., Ihu Up~41:llt"', (mirna' II) r 1 h. l\f~I'\nll :l 'Wfvicft u.___' ujJon tho District JUlflco do'lgnulod Ihoroln on [] hi ['mon"' '.I<lco 0 by (ccrI;flcd) (lcO','orcd) ,"ull, .o"de". , on [j h,' ('"IHtlfl[!d) (foaitICtf.".J) 1I1nil, 'Sr1ndc,'! receipt nll(ldiloJ ilDfOlo. [J Ill1d lurthn thol H,tvcd lhu null: In nil' q ("1,n11101111 UCC0I11Fl)nyltl'J lhe ubol/o r~olltu of Appuul upon thu appellee(l) to whom tllfl RIll11 wm nddrm,wd Ill' _~ ,. _ ___~.___.~__. 19._____.. [J b, p-:!ltllllUI &0(\1'\(') [J b,;, Iccr'ified) trcOI~"rcd) muil. 5cndcI's ulI.tllpl allndlUd hllftJlu SWORN THIS (AFFIRMED) AND SUBSCRlBrD BHORE Mf. DAY OF , 19_ SlQno_ oIelll,lI/ SWnatur8 01 o'flCl.,I bclotfJ wflum ""idJVII Wll~ md':~ r.oIc/f1CJo1 "", COfnmlulon !uplres on ,19_, - I.,.. c-:: ~~v~ " '~'''r~ f-'- ~I r-. ~, i;..-;; ,Jo. ,7'. r- I q;:~ CD -t::- '-' r-. (1-. '" f")" ...... \-1 ~ <:> ~ .t:- V\ Ii" r ,- ;"-' V~ c- .() ..... C> - "'" , ...,. -.. ~ c.ro ':) \.)oJ I' ~ "" '-'" r-. \ t- '" ,- I"' .... I - .... '\ ~ ('" -, ~ \ ~ s i C_NWIAltN Of 'INNlnVANIA COUIT 0' COMMON "IAI----- LlU1U>.'1 J ,lIld JUDIC'A' DIIUle! NOTICE O' APPEAL FROM DISTRICT JUSTICE JUDGMENT COMMON 'UAI No. '1~1-,1011l ,'; VII ')'ul:m NOTICE OF APPEAL Nolic. I. given lhol Ih. appoJlonl I.ll Wed in Ih. obov. COUll 01 Common PIoo. 011 upp.ollrom Ih. judgm.nl ,.nderod by Ih. Di.lriet Ju.tie. on the dolo ood in lhe co.. montioMd below. NAAll Of AH'fU.ANT 1J..-.IIIWl" 'j', Al \'(',11, i-l,n, ADOtl1' Of AH'fUANI 60 1'1 Il'iltl/lnt G..u"e 1(0'}(1 . . ------...........IMAi1b111<o15lw..ronn .._~'_l~!_y~.-:I_~~.:_~_~~!!_.j_:~~~~_.~__I- \ C\ ~~(l~~. [) ~____~_ 1)- J~~~ ~,I.:clL'HllL.:.IL,uI\J Jli'\ 17055 I. COOl: DAtE Of ~Nf u;;.!Y/YS QAiM NO ~:::~.~:~:~~:;,i:,~_~~l:_-..-~~=-. ..IlCtlHll'JO 'I. IdVI.'''I'':.;~;~~' antI 1iGllA1"1.0I"jJiPiimlfoi1innOi~lf"""JZ'11l:1.'-Ul(.I;l IJ, lIivOo'.r, CV 19. 20~".'J~ LT 19 Thh block will b. oigned ONLY when Ihi. nololion I. required UndOf Pel RCP JP. No lDDBB. Thh Nolie. 01 App.ol, when received by Ih. Oi.I,icl Ju.li<o, will operate o. a SUPERSEDEAS to tho judgmont lor po..e..ion in Ihi. co... S/f",,'uru III PmthOlJotiUY 01 Ot';i~;iy---- ~_.- .~- - .--. Ant:huHY J. N'-'GL1cu, I'~Jq. If appel/anI was CLAIMANT (see Pa, R.C'p,J.P, No, 100' (6) in action beloro Districl Justico, he MUST FILE A COMPLAINT within IWllnty (20) days after Wing his NOTICE 01 APPEAL. PRAECIPE TO INTER RULE TO FILE COMPIAINT AND RULE TO FILE (This section olfo,m 10 be used ONLY IVhe'll (lWCl/ant IVilS DEfENDIINr (see Pa. nC.P.J.P. No. 1001(7) in action before District Justice. If NOT USED, dellJCl1 I,onl c~y 01 /lO/lce 0/ .1ppc.ll /0 be SVfV()(!UpOf1 fl/J(JCI/ee). PRAECIPE I To Prolhonotory Enlor rul. upon ..11Ll l~orp:)l"t I UIl ._...._... ,oppelloo(.), to fil. 0 complaint In !hi. ~ N.lIrlf.! III 'lI,)l'/It~{'t 6' 95-400:1 CluB 1'..rl11 (COI1lI1'OO Plea. No ) wilhin 'wenly (201 day. after .ervi" 01 'u L RULE I To ~Io:itt Corporul:ioll Nwoo 01 nwollt..>t.'(sJ , oppelloo('I. Anthony ,1, (I) y"" ant notified lhot a ,ule i. hoteby entOfed upon you to file 0 complainl in thi. appeol within twenly (20) cloy. after the dolo 01 _vie. 01 thi. rule upon you by p.nonoJ .Ofyie. 01 by certified 01 regi.l....d moil (2) H you do not file 0 complaint wilhin thi. limo, a JUDGMENT OF NON PROS WILL BE ENTERED AGAINST YOU. (3) The dot. 01 .."ic. 01 thi. rule if 'Ofyi" wo. by mail b the dolo 01 I11Olfing. . ) Date:_,July 28, ,19--2.~ " tl ~ \' \ ( ;! ,L" 1'1::J,S1tJ ' i (j ~oI_ya AOf1C J IN'" COUIT fiLE -. ",' -"-'"' - l\f~\'tttIllJNtc~ ".. , " --' , , T ......-~~~c~-...-..-.~:. .~.-- ;~::.t. .,. ,.." ./ / i' . O'''''la'U - F'IU~l - , ',.;' .--- , . -~~ . -.. ~ . ..0_'" ..-,1 - , j " " , . -'.1 .~,.- , T I 5. Domingo T. Alvear, M.D., is the president of Geneva Properties, Inc., a Pennsylvania corporation. 6. Geneva Properties, Inc., is the titled owner of a residential condominium complex known as "Brighton Place," located adjacent to Geneva Drive in Upper Allen Township, Cumberland County. Pennsylvania. 7. During 1993, Matt corporation was providing property management services to Geneva Properties, Inc., including the advancement of funds to pay for service costs incurred for the Brighton Place project, pursuant to an agreement under which Geneva Properties, Inc., would reimburse Matt corporation for the latter's out-of-pocket costs. COUNT I Matt CorDoration v. Dominoo T. Alvear, M.D., and Veneranda B. Alvear. H.D. 8. The averments of Paragraphs 1-7 above are incorporated herein by reference as if stated in full. 9. During 1993, Domingo T. Alvear, H.D., and Veneranda B. Alvear, M.D., had a line of credit with Pennsylvania state Bank with an approved credit line of $100,000.00. 10. At the same time that Matt corporation was providing property management services to Geneva Properties, Inc., Domingo T. Alvear requested that Matt Corporation advance funds to make 2 payments on the aforementioned line of credit of Domingo T. Alvear and Veneranda B. Alvear with Pennsylvania state Bank. 11. The parties agreed that Matt Corporation would make payments on the aforementioned line of credit of Domingo T. Alvear and Veneranda B. Alvear with the understanding that the funds would be promptly repaid upon billing by Matt Corporation. 12. Pursuant to the parties' agreement, Matt Corporation advanced funds on the following dates and in the following amounts for payments on the aforementioned personal loan obligation of Domingo T. Alvear and Veneranda B. Alvear: March 5, 1993 $ 364.93 June 3, 1993 $ 584.55 September 8, 1993 $2,054.67 December 28, 1993 S 648.27 TOTAL $4,013.44 13. FOllowing billing of the above amounts by Hatt Corporation, Domingo T. Alvear and Veneranda B. Alvear failed and refused and continue to fail and to refuse to pay the funds advanced by Matt Corporation on their behalf. WHEREFORE, Matt corporation, Plaintiff, requests that this Honorable Court enter jUdgment in favor of Plaintiff and against Domingo T. Alvear, H.D., and Veneranda B. Alvear, M.D., jointly and severally, in the amount of Four Thousand Thirteen and 44/100 Dollars ($4,013.44), in accordance with the agreement between the J parties, plus prejudgment interest and costs, which total amount is within the jurisdictional limit for compulsory arbitration. COUNT II Matt Corcoration v. Veneranda B. Alvear. M.D. 14. The averments of Paragraphs 1-13 above are incorporated herein by reference as if stated in full. 15. Veneranda B. Alvear, M.D., is vice president of GLAMM Anesthesia Services, Ltd., a Pennsylvania corporation headquartered at 100 Chestnut street, suite 100, Harrisburg, Pennsylvania. 16. It is believed and therefore averred that Veneranda B. Alvear, M.D., is custodian of the GLAMM Anesthesia Retirement Savings Plan and the GLAMM Anesthesia Profit Sharing Plan, which are on deposit with Pennsylvania National Bank. It is further believed and therefore averred that Veneranda B. Alvear borrowed funds from the aforementioned plans prior to February 26, 1993. 17. At the same time that Matt corporation was providing property management services to Geneva Properties, Inc., Domingo T. Alvear requested that Matt corporation advance funds to make payments to Pennsylvania National Bank on the aforementioned loan obligations of Veneranda B. Alvear, M.D., for funds borrowed from the GLAMM Anesthesia Retirement Savings Plan and the GLAMM Anesthesia Profit sharing Plan. lB. In making this request, Domingo T. Alvear, M.D., was acting as the agent of Veneranda B. Alvear, M.D. 4 19. Matt Corporation and Veneranda B. Alvear, M.D., acting through her agent, Domingo T. Alvear, agreed that Matt Corporation would make payments on the aforementioned loan obligations of Veneranda B. Alvear for funds borrowed from the GLAMM Anesthesia Retirement Savings Plan and the GLAMM Anesthesia Profit Sharing Plan, with the understanding that the funds would be promptly repaid upon billing by Matt corporation. 20. Pursuant to the request of Domingo T. Alvear, H.D., and the agreement between the parties, Matt corporation advanced funds on the following dates and in the fOllowing amounts for payments on the aforementioned personal loan obligations of Veneranda B. Alvear, M.D.: March 8, 1993 $1,310.86 March 17, 1993 $ 990.06 June 30, 1993 $4,007.58 TOTAL $7,003.25 21. Following billing of the above amounts by Hatt corporation, Veneranda B. Alvear, M.D., failed and refused and continues to fail and to refuse to pay the funds advanced by Hatt Corporation on her behalf. WHEREFORE, Matt Corporation, Plaintiff, requests that this Honorable Court enter judgment in favor of Plaintiff and against Veneranda B. Alvear, H.D., Defendant, in the amount of Seven Thousand Three and 25/100 Dollars ($7,003.25), plus prejudgment 5 21. Denied as stated. To the extent that the averments in this paragraph imply that Domingo T. Alvear or Veneranda 8, Alvear had an obligation to pay the funds billed by the Matt Corporation, the averments are specifically denied, It is admitted that neither DomingD T, Alvear nor Veneranda B. Alvear paid the Matt Corporation the funds requested. By way of further response, it Is denied that either Domingo T. Alvear or Veneranda B, Alvear had any obligation to do so. Strict proof thereof is demanded at trial. WHEREFORE, the Defendants, Domingo T, Alvear and Veneranda B. Alvear, respectfully request that this Honorable Court dismiss Count I of the Plaintiffs Complaint, enter judgment in the Defendants' favor, and award the Defendantl any other costl that this Court deems just and appropriate. NEW MATfER 22. The foregoing numbered paragraphs are incorporated herein by reference. 23. The claims contained in Counts I and II are barred under the doctrine of failure of consideration. 24, The claims contained in Countl I and II are barred as a result of fraud, 25. The claims contained in Counts I and II are barred under the doctrine of laches, 26, The claims contained in Countl I and II are barred as a result of the applicable statute of frauds, 27, The claims contained in Countl I and II are barred under the applicable statute of limitations, 28. Plaintiffs damages, if any, are subject to setoff, .6. COUNTERCLAIM AND NOW. pursuant to Rule 1031 of the Pennsylvania Rules of Civil Procedure, the Defendants set forth the following Counterclaim and aver in support thereof R5 follows: 29, Matt Corporation is owned and operated by Charles Davis (hereinafter "Davis"). 30, All of the selVices Matt Corporation provided to Geneva Properties, Inc, (hereinafter "Geneva") were performed by Davis, 31. Prior to Geneva retaining Matt Corporation, Davis represented himself R5 an expert property manager. 32. As a result of Davis' representations regarding his real estate expertise, Geneva hired Matt Corporation R5 its manager. 33, Geneva entered into an agreement with Matt Corporation on August 6, 1992 (a copy of the agreement is attached hereto and incorporated herein as Exhibit "A"), 34, Matt Corporation's duties specifically included acting R5 Geneva's representative to oversee all ownership responsibilities for the Brighton Place project. See Agreement. 6/1. A. J, 35. Matt Corporation's duties also included the management of Brighton Place, preparing financial projections for Geneva, organizing sales efforts, and coordinating the building schedule for the Brighton Place. 36. While Matt Corporation prepared building schedules and sales forecR5I1, Matt Corporation never revised the building schedules or sales forecR511 even durin. or .7. after the winter of 1993. when the severe weather and snowfall clearly precluded any building for the majority of the winter, 37. Malt CorporatitJn made numerous representations to the owners of Geneva, including Domingo T. Alvear, regarding Geneva's potential profitability, 38, Malt Corporation represented that after a loan of a substantial amount of cash. Geneva would become profitable, 39. In order to loan funds to Geneva, Domingo T. Alvear and Veneranda 8, Alvear (hereinafter the "A1vears") were required to borrow substantial amounts of casb, 40. Before the A1vears agreed to borrow these funds and loan them to Geneva, Matt Corporation, Geneva, and the A1vears agreed that Matt Corporation would use part of the funds it received from the A1vears to selVice the debt the A1vears' incurred to loan these funds to Geneva, 41. As a result of the representations made by Matt Corporation regarding Geneva's profitability and Matt Corporation's and Geneva's agreement that Geneva would service the aforementioned debt, the A1vears loaned Geneva $61,323,00 in August, 1992, $100.000.00 in September, 1992, and an additional $100.000,00 in Janual)', 1993. 42, These loans were made directly to Matt Corporation and the funds were to be delivered to Geneva. 43, The A1vears' loans to Geneva, based upon Matt Corporation's representationl, totalled $261,343.00. .8. 44. To date, Matt Corporatioll has never accounted for the three loans made by the Alvears to Matt Corporation for the benefit of Geneva, 45. During 1994, Matt Corporation continued to act as property manager for Geneva Properties, 46. During 1994. 29 units developed by Geneva in Brighton Place were sold to buyers. 47, As a result of those sales. Geneva should have received net proceeds of $58,64\.9\. A copy of a summaI)' of Geneva's sales for 1994 is attached hereto and incorporated herein as Exhibit "B." 48. The Alvears believe and therefore aver that Matt Corporation never directed these proceeds to any Geneva account. 49. The Alvears believe and therefore aver that Matt Corporation took possession of the proceeds at the various closings and never turned them over to Geneva. 50, To date, Matt Corporation has never supplied the Alvears with an accurate accounting for these proceeds. 51. In addition. as a result of the property settlements in 1994. Matt Corporation obtained "payoffs" from the settlements. 52, These payoffs were made to Matt Corporation at the closings and totaled $18,262,27 for the units sold during 1994. 53. Matt Corporation has never satisfactorily accounted to the A1vears for these payoffs, 54. The Alvears never requested that Matt CorporatiDn use, nor consented to Matt CorporatiDn using, its own funds to service the aforementioned debt. 55. The Agreement between Matt Corporation and Geneva attached hereto as Exhibit "A" specifically provides in relevant part: .9- , , , Matt Corporation shall have /10 responsihility to ftmd payme/l~I' to said vendors and third partie,f, such responsibility to fund being solely that of IGeneva], . , , Agreeme/ll, Ill. C (empha.ris supplied). 56. The AlveaTS believe and therefore aver that the Matt Corporation never used Its own funds to selVice the loan debt. 57, The A1veaTS believe and therefore aver that the Matt Corporation used funds from other properties it managed to service the aforementioned debt, 58. Geneva is solely liable to the Plaintiff to the extent Plaintiff proves any actual damages. COUNT I . FRAUD 59. The foregoing numbered paragraphs are incorporated herein by reference. 60, Matt Corporation misrepresented the financial health of Geneva by stating that the company would be profitable if the A1vears loaned additional cash to Geneva, 61. Matt Corporation made these representations verbally and through written projections of income provided to the A1veaTS. 62. By making the misrepresentations, Matt Corporation intended to Induce the A1vears to make additional cash contributions to the company. 63, The A1veaTS were induced to make additional cash contributions to the company. 64, The A1vears justifiably relied on Matt Corporation's mlsrepresentation, since It was hired as Geneva's manager. 65, As a result of the Alvears' justifiable reliance on Matt Corporation's misrepresentation, the Alvears have suffered significant damages, as set forth above. -10- 66, As a result of Matt Corporations' actions, the Alvears have Incurred and will continue to incur significant costs pursuant to their personal guarantees of a loan made by Consumers Life Insurance Company to Geneva. WHEREFORE. the Alvears respectfully demand judgment against Matt Corporation in an amount in excess of the maximum amount requiring mandatory arbitration. together with any other relief which this Court deems just and appropriate. COUNT II . CONVERSION 67. The foregoing numbered paragraphs are incorporated herein by reference, 68. The A1vears believe and therefore aver that Matt Corporation received and held the proceeds from unit sales which were intended to be delivered to Geneva Properties, 69, The A1vears believe and therefore aver that Matt Corporation received and held the A1vears' loans, which were intended to be delivered to Geneva Properties, 70. On numerous occasions, the A1vears requested accountings of tbe proceeds and funds received by Matt Corporation. 71. Matt Corporation has refused to provide an accounting of tbe proceeds and funda, 72, The A1vears believe and tberefore aver that some or all of the proceeds and funds delivered to Matt Corporation for Geneva Properties were diverted from Geneva Properties. 73. The A1vears believe and therefore aver that Defendant Matt Corporation used the funds Intended to be delivered to Geneva for the use and benefit of Matt Corporation, 74. Defendant Matt Corporation has failed and refused and continues to fall and refuse to return said proceeds and funds to the Alvears, -II- WHEREFORE, the Alvears respectfully demand judgment against Matt Corporation in an amount in excess of the maximum amount requiring mandatoI)' arbitration, together with any other relief which this Court deems just and appropriate. COUNT III . BREACH OF FIDUCIARY DUTY 75, The foregoing numbered paragraphs are incorporated herein by reference. 76, As custodian of $261,343 of the A1vears' money, Matt Corporation had a fiducial)' duty to the A1vears, regarding the use and protection of the A1vean' loans to Geneva, 77. As a fiducial)', Matt Corporation had an obligation to the A1vean to use the loans in a reasonable and prudent manner, 78. Matt Corporation failed to use the A1vean' loans to Geneva in a reasonable and prudent manner. 79, Matt Corporation has failed to account for any of the loaned funds, 80. The A1vean believe and therefore aver that Matt Corporation failed to direct the A1vean' funds to Geneva. 81. Because of Matt Corporation's misuse of the loaned funds, Matt Corporation breached its fiducial)' obligations to the A1vears. 82. As a result of Matt Corporation's breach of its fiducial)' obligations, the A1vean have incurred significant damages which are in excess of the maximum amount requiring mandatoI)' arbitration. WHEREFORE, Domingo T. Alvear and Veneranda 8, Alvear respectfully demand judgment against Matt Corporation in an amount in excess of the maximum amount requiring mandatoI)' arbitration I together with any other relief which this Court deems just and appropriate, -12- COUNT IV . NEGUGENT MISREPRESENTATION 83, The foregoing numbered paragraphs arc incorporated herein by reference. 84, Matt Corporation made numerous representations to the owners of Geneva, Including Domingo T, Alvear, regarding Geneva's potential profitability. 85. Matt Corporation represented that after several loans. Geneva would become profitable. 86, As a result of Matt Corporation's representations, Domingo T, A1veaT aDd VeDeraDda B. Alvear made a cash cODtributioD iD August, 1992 to GeDeva iD the amouDt of $61,343,00. 87, Matt CorporatioD prepared buildiDg schedules aDd sales forecasts for GeDeva. 88. Matt CorporatioD kDew that the A1vears were relying OD his represeDtatioD for guidaDce iD their business transactioDs with GeDeva. 89, Matt CorporatioD Dever revised the buildiDg schedules or sales forecasts eveD duriDg the winter of 1993, when the severe weather and sDowfall clearly precluded any building for the majority of the winter. 90, The infonnation Matt CorporatioD supplied to the A1vears was false, 91. Matt CorporatioD failed to exercise reasoDable care or competeDce iD obtaiDiDg or commuDicating this iDfonnation. 92. As a result of Matt CorporatioD's actioDs, the A1vean have iDcurred sigDificant damages which are in excess of the maximum amount requiring maDdatory arbitration, WHEREFORE, Domingo T, Alvear and Veneranda B. Alvear respectfully demand judgment against Matt Corporation in an amount in excess of the maximum -13- amount requiring mandatory arbitration, together with any other relief which this Court deems just and appropriate, COUNT V . BREACIf OF CONTRACT 93. The foregoing numbered paragraphs are incorporated herein by reference. 94. Matt Corporation entered into a contract with Geneva whereby Matt Corporation agreed to use proceeds from the Alvears' loans to pay interest on the funds the A1vears borrowed in order to make the loans, 95. Both Geneva and Matt Corporation intended to benefit the A1vears by agreeing to use a portion of the loans to pay the A1vears' interest costs they incurred in borrowing the money to make the loans. 96. The purpose of the agreement was to induce the A1vears to make the loan, and to benefit them by servicing the loans' costs, 97. Matt Corporation's agreement to use a portion of the loaned funds to service the A1vears' loan costs demonstrates that Matt Corporation intended to give the A1vears the benefit of his promised perfonnance. 98. Geneva's agreement to use a portion of the loaned funds to service the A1vean' loan costs demonstrates that it intended to give the A1vears the benefit of ita promised perfonnance. -14- ,1-;L-~4 :,. :JI:.1 :,;('~A i:W.:F:~v.'D, r.~~.:I:&~r. u : L'); I' .'J J '-... .. ? jlji.': i: .". ?, . MANAGEMENT AGREEMENT THIS AGREEMENT, made C8 of the 6th day ot AU9U1t, 1992, by and between GENEVA PROPERTIES, INC,. a Pennsylvania busine.s corporation ("owner") and MATT Corporation, a Pennsylvania busine.. corporation ("MATT"). WJ:TNESSETH WHEREAS, OWner i. the owner ot an approximate ten (10) acre tract ot real property known as Brighton P1a~e .ituate adjacent to Geneva Drive in Upper Allen TownShip, cumberland County, Penn.ylvania, on Which residential condominium unit5 are erected and on which turther site improvements and .eventy-one (71) additional condominium units are to be constructe~; and WHEREAS, owner raquir.. property con.truction and develcp- ..ant m.nag..ent service. and condominium owner's assooiation .anagement .e~lc.., and MATT 1s ready as dn independent contrac- tor to perform such services. NOW ~EREFOR!, in con.ideration of the .ervices to be randered, the compensation to b. paid. and mutual covenants harein oontainod, tho partie., intending to be legally bound, hereby agree a. follows I I. Owner hereby employs KA~r as an independent contc~ctor to perform the ..rvice. described herein and agree. to pay MATT the compen..tion agreed upon herein. MATT accepts such employment and agr.e. to perrorm the .ervices as outlined. II. Dutie. of MATTI A. Construction and Development Hanagement 1. Negotiate with and develop a contraot with a ein- q1e veneral contractor to complete .ite develop- ment construction and build-out or the Brighton Place Condominium project. 2. Aot as Owner'. representative with the general oontractor throughout the construction phase. 3. Act as OWner'. representative to overs.e all own- er.hip re.ponsibilitie. tor the 8righton Place project. 4. Conduat weekly job meating. an4 ~.k. report. to OWner weekly or the progr... or the job. EXHIBIT "A /1 "'~'II Uk....' co l). Act as lia1son with 1111 mun.Lu1pdl And other gov- ernment and regUlatory bodies having jurisdiction over the project. ..l-.;l-....' ',;:.'.f" :;(1'\ ~'E:'r:F. ""10 "';1',:, 't .. J "" . ,..,.1 ,I .. .... "\', I 1\...... I w.... .. 9 ~J:j:I; 'l)r: ." ; . J.. J. , .. 6. Develop marketing plan and oversee condominium sales by one or more independent brckeraqe fi~.. 7. Review and implement all contraot. .Ide tor the p~oYiDione of qood8 and 8orvic8. for the project. 8. Act as liaison on behalf of the Owner with the project mortqaqe lender and p~ovid. periodio pr09- ress reports to said lender. 9. Cau.e to be performed all necessary remedial con- struction work for condominium unite previously aon.t~ot.d with unfiniehed or defective work. B. condominium A880ciation 1. Act as Owner's representative to manage all phases of the condominium a..ociation until completion of construction of the entire Brighton Place CondO- minium project and thereafter act as manaqer of the oondominium a..oci.tion on b~hftlf of the a..o- oiation. a. Kalntain the bOO~B and ~ecord. of the condominium allllociation. 3, Issue periodic atatement. to condcminium owners and collect the monthly due.. 4. Maintain separate bank account and financial re- cords accounting for all receipts and expenditure. on behalf of the condo~inium ..aociation. 5. Receive and aot upon all complaints by association mellbel's. 6. PeriodicallY in8p.~t tne project to insure that appropriate levels of maintenance and repair are performed. 7. Arrange for and supervise scheduled maintenance for the project, such as snow removal, lawn care and qeneral landscape work. III. own.rlm RcoponeibilitieQ for pay~gnt A. As compen.ation for the foregoing construction and development management services and ror condominium Assooiation management, MATT .ha11 be paid a monthly te. of Five Thousand Dollars ($5,000) per month payable on the firBt day of each month from the date herecf until completion of all neW construction. Thera.ftar, MATT ahal1 be paid a monthly tee for condominium -2- :~ 9< l,j: I ' ')' " .. r U,/. J: a..oaiation management services in an amount to be aqreed upon between OWner and MATT. In the event that extraordinary services are required or in the event extraordinary circum.tances require an inordinate commitment ot time ot personnel of MATT in the pertorming ot the above management servic.., MATT .ha11 be entitled to reaeive additional compensation for such extraordi- nary services at a rat. of Eighty Dollars ($80) per hour for otticers ot MATT corporA~ion and o~ner hourly Charges a. agreed between MATT and Owner. All supervision and coordination of work pertormed by MATT hereunder aa Owner's representative is included in ~e above monthly compen.ation. 8. OWner eha11 r.i.bur.. MATT tor .11 out-ot-pocket coete incurred by it on behalf of Owner for providing aervices hereun- der, inClUding, but not limited to, telephone, printing, photo- copyinq, po.tage, con.ultant services, maintenance service. and equipm.nt rental. C. MATT .hal1 receive and review all vendor invoices for .upplies, .aterials and labor furnished by third party vendors to Owner for the projoct, and Owner ohall make available to MATT funde to cau.. to b. paid such vendor., .s well a. other neces- .ary expen.e. for the property such 8S real property taxeR and insuranc. pr..iums. MATT sna1l provide to own.r a monthly sUllIIDary ot .uch approv.d invoJ.CBs alonq with a rsqu..t for pavm.nt by OWn.r, which request ehall be honored by Owner within ten (10) working day. of receipt thereof so as to permit MATT to pay s.id invoice. p~omptly. All of such billings from vendor. and others .s set forth on the monthly invoiQ8 to Owner shall be billed at COat without MATT being paid any fee in addition to Lts above manage.ent t.. on account of proce..inq ths aame. MATT shall have no re.ponsibility to fund payments to said vendors and third parti.., such responsibility to fund being sol.ly that ot owner. All suoh invoices bv vendors and others shall be mad. Ln the name ot owner and directed to the care of MATT at itR regular offic. mailing address. IV. Consents and Approvals It 1. agr.ed that MATT .hould ..cur. approval from Owner tor any expenditure. over Five Thousand Dollar. ($5,000) and that all contracts for construction, purchase of condominium units and like matt.r. shall b. pre.ented to Own.r for approval prior to the execution thereof by MATT as Own.r'. r.presentative. V. Tem af Agr.eent This Agr....nt .hall bs 1n ettect tor a p.riod ot one (lJ y..r fron the date hereof, unless terminated earlier by mutual con..nt or by one af the parties giving written notice thereof to the other party no less than sixty (60) days before termination. -3- - - -......._. II ,,... ,.." II'LI"" "~....I' 118IHAlI ~ - = 2 tIC - ~ i f E It .. ~;; ii\l ~ i' ;S h'... '.;. :.. ;:. h' -1 7, ,I~' ;Ii 0..: r;, I. J' .... 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S ~;~ ~ ~~ M~ ~~~~ ~ I ~ ~ -- Q ~~ R~~ ~~~~ . '" ~ii~gli~~i~_~I~~i~a~;:.~~ ~ ~ i . -~ ......K~.- i...q~--~---",c -"'o:s % ":;'.-1;; ~- ..---.----.~=-;:.. ~~~_~ -~~~ ~~-.-m~~. 3~2- ;..;- 3t1 ~_ .':j...~_:O::, .C\:.!=~"''':.I e: '" :s..~5-'" ...::!;J::;..;,==i~:=~i!liEN::<:.,;1l t;~_~:a3~~~~-~~---~.~-~--~---i -=~w.p~;~2e~~:S~!~~~!~:.s;!!5;S ~=eE~~=~~===;~~=-=:=-:::=~==~ .. ,';'1...._ _.~.~.: ,;- :..~.... ....:-::;. .;: ~.:-, '.. ;-; S;;. ".:- ,,,": :: ":' ,.,.... - .' r ' - - ;! - - N - - 3 :: - 'I. .\ .... 3 :; i! ::i 5 " - - N r, ~ :ll - . ~ ~ ;i - 5 specifically denied that the Matt Corporation was retained to advance funds to pay for services and costs incurred for the Brighton Place project. It is further specifically denied that an agreement existed under which Geneva Properties, Inc, would reimburse the Matt Corporation for the latter's out-of-pocket expenses. Strict proof thereof is demanded. COUNT I MATI' CORPORATION v. DOMINGO T. ALVEAR. M.D. and VENERANDA B. ALVEAR. M.D. 8, The foregoing numbered paragrapbs are incorporated herein by reference. 9, Admitted, 10. Denied. It is specifically denied tbat Defendant Domingo T, Alvear requested that tbe Matt Corporation advance funds to make payments on tbe aforementioned line of credit with Pennsylvania State Bank, Strict proof thereof is demanded. 11, Denied, It is specifically denied that Domingo T, Alvear and Veneranda B, Alvear ever agreed tbat the Matt Corporation would make payments on the aforementioned line of credit with the understanding that the funds would be promptly repaid upon billing by tbe Matt Corporation, Strict proof thereof is demanded. 12, Denied. It is specifically denied tbat Domingo T. Alvear and Veneranda B. Alvear ever requested the Matt Corporation to make any such payments. It Is -3. .' billed by the Mall Corporation, the averments are specifically denied, It is admiued that neither Domingo T, Alvear nor Veneranda B, Alvear paid the Mall Corporation the funds requested, By way of further response. it is denied that either Domingo T. Alvear or Veneranda B. Alvear had any obligation to do so. Strict proof thereof is demanded at trial. WHEREFORE. the Defendants. Domingo T, Alvear and Veneranda 8, Alvear, respectfully request that this Honorable Court dismiss Count I of the Plaintiffs Complaint. enter judgment in the Defendants' favor, and award the Defendants any other costs that this Court deems just and appropriate, NEW MAlTER 22, The foregoing numbered paragraphs are incorporated herein by reference. 23. The claims contained in Counts I and II are barred under the doctrine of failure of consideration. 24. The claims contained in Counts I and II are barred as a result of fraud. 25. The claims contained in Counts I and II are barred under the doctrine of laches. 26. The claims contained in Counts I and II are barred as a result of the applicable statute of frauds, 27. The claims contained in Counts I and II are barred under the applicable statute of limitations, 28. Plaintiffs damages, if any. are subject to setoff, 29, Matt Corporation is owned and operated by Charles Davis (hereinafter "Davis"). .6. 30, All of the selVices Matt Corporation provided to Geneva Properties, Inc, (hereinafter "Geneva") were performed by Davis, 31. Prior to Geneva retaining Matt Corporation, Davis represented himself as an expert property manager. 32. A5 a result of Davis' representations regarding his real estate expertise, Geneva hired Matt Corporation as its manager, 33. Matt Corporation was retained to prepare financial projections for Geneva, organize sales efforts. and coordinate the building schedule for the Brighton Place Condominium. 34. Matt Corporation made numerous representations to the owners of Geneva, including Domingo T. Alvear, regarding Geneva's profitability, 35, Matt Corporation represented that after an infusion of additional casb, Geneva would become profitable. 36. A5 a result of Matt Corporation's representations, Domingo T. Alvear and Veneranda B. Alvear (hereinafter the "A1vears") made a cash contribution in August, 1992 to Geneva in the amount of $61,343,00, 37, These funds were given directly to Matt Corporation on behalf of Geneva, 38. Thereafter, Matt Corporation made additional representations regarding Geneva, stating that Geneva would become profitable, but tbat additional casb was needed, 39. A5 a result, the A1vears agreed to loan Geneva additional money. .7. 40. Matt Corporation and the A1vears agreed that Geneva would use part of the funds it received from the Alvears to service the debt the Alvears' incurred to loan funds to Geneva. 41. Matt Corporation, as manager of Geneva, agreed to use Geneva's funds in the manner set forth in the preceding paragraph. 42, The A1vears never requested that Matt Corporation use, nor consented to Matt Corporation using. its own funds to service the aforementioned debt. 43. The A1vears believe and therefore aver that the Matt Corporation never used its own funds to service the loan debt. 44, The A1vears believe and therefore aver that the Matt Corporation used funds from other properties it managed to service the aforementioned debt. 45. Geneva is solely liable to the Plaintiff to the extent Plaintiff proves any actual damages. 46, Matt Corporation has never accounted for any of the funds loaned by the A1vears, WHEREFORE. Defendants respectfully request that this Honorable Court Dismiss the Plaintiffs Complaint. COUNTERCLAIM AND NOW, pursuant to Rule 1031 of the Pennsylvania Rules of Civil Procedure I the Defendants set forth the following Counterclaim and aver in support thereof as follows: 47. The foregoing numbered paTagraphs are incorporated herein by reference. .8- 48, As a result of the representations made by Matt Corporation regarding Geneva's profitability and Matt Corporation's agreement that Geneva would service the aforementioned debt. the Alvears loaned Geneva $61.323 in August, 1992, $100,000,00 in September, 1992. and an additional $100,000,00 in Janual)', 1993, 49. These loans were made directly to Matt Corporation and the funds were to be delivered to Geneva, 50, The A1vears' loans to Geneva based upon Matt Corporation's representations totalled $261,343,00. . 51. To date, Matt Corporation has never accounted for the three loans made by the A1vears to Matt Corporation for the benefit of Geneva, 52. During 1994, Matt Corporation continued to act as property manager for Geneva Properties, 53. During 1994, 29 units developed by Geneva in Brighton Place were sold to buyers, 54, As a result of those sales, Geneva should have received net proceeds of $58.641.91. A copy of a summaI)' of Geneva's sales for 1994 is attached hereto and incorporated herein as Exhibit "A." 55. Counterclaimants believe and therefore aver that Matt Corporation never directed these proceeds to any Geneva account. 56, Counterclaimants believe and therefore aver that Matt Corporation took possession of the proceeds at the various closings and never turned them over to Geneva. 57, To date, Matt Corporation has never supplied counterclaimants with an accurate accounting for these proceeds, .9. 58. In addition, as a result of the property settlements in 1994, Matt Corporation obtained "payoffs" from the settlements. 59, These payoffs were made to Matt Corporation at the closings and totaled $18,262.27 for the units sold during 1994, 60, Matt Corporation has never satisfactorily accounted to Counterclaimants for these payoffs, COUNT I . FRAUD 61. The foregoing numbered paragraphs are incorporated herein by reference. 62, Matt Corporation misrepresented the financial health of Geneva by stating that the company would be profitable if additional cash contributions were made. 63. Matt Corporation made these representations verbally and through written projections of income provided to the counterclaimants. 64. By making the misrepresentations. Matt Corporation intended to induce the Alvears to make additional cash contributions to the company. 65. The Alvears justifiably relied on Matt Corporation's misrepTesentation, since it was hired as Geneva's manager. 66. AB a result of the Alvear's justifiable reliance on Matt Corporation's misrepresentation, the Alvears have suffered significant damages. as set forth above. 67, AB a result of Matt Corporations' actions, the A1vears have incurred and will continue to incur significant costs pursuant to their personal guarantees of a loan made by Consumers Life Insurance Company to Geneva. -10- WHEREFORE, countercJalmants respectfully demand judgment against Mati Corporation in an amount in excess of the maximum amount requiring mandatory arbitration, together with any other relief which this Court deems just and appropriate. COUNT II . CONVERSION 68. The foregoing numbered paragraphs are incorporated herein by reference, 69. Counterclaimants believe and therefore aver that Malt Corporation received and held the proceeds from unit sales which were intended to be delivered to Geneva Properties, 70, Counterclaimants believe and therefore aver that Mati Corporation received and held the loans countercJaimants' loans, which were intended to be delivered to Geneva Properties, 71. On numerous occasions, counterclaim ants requested accountings of the proceeds and funds received by Mati Corporation. 72, Malt Corporation has refusell to provide any accounting of the proceeds and funds, 73, Counterclaim ants believe and therefore aver that some or all of the proceeds and funds delivered to Malt Corporation for Geneva Properties were diverted from Geneva Properties, 74, Counterclaimanls believe and therefore aver that Defendant Malt Corporation used the funds intended to be delivered to Geneva for the use and benefit of Malt Corporation, 75. Defendant Malt Corporation has failed and refused and continues to fail and refuse to return said proceeds and funds to counterclaimanls .11- 1-'- t'>.' :-7.-'''. -- --- 6.ncTtc~~ - &ii' ..~.__.-.j..,=..,,-,,,+ j , '" --- " , .... -o?__-__ ...,-~ -'0' f - .,....~~"~~ 1"'- . ,,~':i ..:'.- ,"."_c:-~ia.;:.. 2. Defendants admit that during 1993, MATT Corporation was retained to provide certain property management services to Geneva Properties, Inc., in paragraph 7 of their Amended Answer With New Matter and counterclaim. 3. As the basis for their various counterclaims, Defendants introduce the agreement which Geneva Properties entered into with MATT Corporation on August 6, 1992, as Exhibit "A" to their Amended Answer With New Matter and Counterclaim, ~ at ~ 33. 4. Defendants assert in Count II of their Counterclaim that MATT Corporation allegedly converted proceeds and funds of Geneva Properties for MATT Corporation's own use and benefit. ~ at .. 72-74. 5. Defendants assert in Count II I of their Counterclaim that MATT Corporation breached a fiduciary duty allegedly owed to them as individuals. Id. at " 76-78. 6. Defendants assert in Count V of their Counterclaim that MATT Corporation allegedly breached its contract with Geneva Properties, Inc. ~ id. at , 94. 7, Counts II, III and V of Defendants' Counterclaim asoert causes of action which are those of Geneva Propertien, Inc" not Defendants. Plaintiffs' contract, upon which the foregoing Countll are based, was with Geneva Properties, Inc., not De(ondantu. 8. Furthermore, Defendants aver that an ilgn~I~lI1ollt flxiuted between MATT Corporation, Geneva Properties <1lld lJl!londilntn that MATT Corporation would use part of the funds lOilned by the ^lvoal'o 2 to Geneva Properties to service the debt the Alvears incurred in order to loan the funds to Geneva Properties. Amended Answer With New Matter and Counterclaim, , 40. 9. Defendants later assert that Geneva Properties, Inc., "is solely liable to the Plaintiff to the extent Plaintiff proves any actual damages." Id. at , 58. 10. In paragraph 58, the Alvears defend against Plaintiff's claims by asserting the alleged sole responsibility of Geneva Properties, Inc., rather than their own liability, for Plaintiff's damages. 11. Geneva Properties, Inc., is a necessary party to the above action because it has the sole right to any cause of action asserted under the contract between it and MATT Corporation, attached as Exhibit "A" to Defendants' Amended Answer With New Matter and counterclaim, and specifically to the asserted causes of action in Counts II, III and V of Defendants' Counterclaim. 12. Geneva Properties, Inc., is a necessary party to the above action because justice cannot be afforded without violating the due process rights of Geneva properties, should it be found solely liable to plaintiff for its damages. 13. A final adjudication of the controversy without joining Geneva Properties would leave MATT Corporation at risk of incurring multiple or inconsistent obligations in regard to the same potential liabilities as those asserted by Defendants in Counts II, III and V of their Counterclaim, which arise under the 3