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HomeMy WebLinkAbout97-5946 civilRANDALL. FISHEL, Plaintiff, Vo MIDSTATE COMMUNICATIONS CORPORATION, Defendant. :IN THE COURT OF COMMON PLEAS OF · CUMBE~AND COUNTY, PENNSYLVANIA :No. 97-5946 CIVIL : : CIVIL ACTION- LAW : : JURY TRIAL DEMANDED .IN RE: PLAINTIFF'S MOTION FOR PREEMPTORY JUDGMENT .BEFORE BAYLEY, J., GUIDO~ J. ORDER OF COURT AND NOW, this ~ '/Ytkday of JULY, 1998, after argument, the Plaintiff s Motion for Preemptory Judgment is GRANTED. Defendant shall make available to Plaintiff, his agem or attorney, the share register, books and records of account, and records of the proceedings of the incorporators, shareholders and directors. The term "books and records of account" shall include, but not be limited to, the corporation's tax returns. Plaintiff, his agent or attorney, may examine such documents and/or make copies or extracts therefrom. Elizabeth G. Dixon, Esquire Attorney for Plaintiff By the Edward E. Guido, J. Edwin A~D. Schwartz, Esquire Attorney for Defendant RANDALL. FISHEL, Plaintiff, Vo MIDSTATE COMMUNICATIONS CORPORATION, Defendant. - IN THE COURT OF COMMON PLEAS OF · CUMBERLAND COUNTY, PENNSYLVANIA · No. 97-5946 CIVIL · · : CIVIL ACTION- LAW o · JURY TRIAL DEMANDED IN RE: PI,A1NTIFF'S MOTION FOR PREEMPTORY JUDGMENT BEFORE BAYLEY~ J.~ GUIDO, J. OPINION AND ORDER OF COURT Plaintiff, a shareholder and former general manager of Defendant, initiated this mandamus action seeking access to Defendant's corporate records. On March 18, 1998 Plaintiff filed a Motion for Preemptory Judgmem. Argument was held before this Court on May 27, 1998 and the matter is now ready for disposition. DISCUSSION The Plaintiff argues that he is emitled to inspect the books and records of Midstate pursuant to Section 1508 of the Business Corporation Law (15 Pa.C.S.A. § 1508).~ He further argues that he has met the criteria set forth in Section 1508(c) and is, therefore, entitled to preemptory judgmem on this issue. We agree. The standard for granting preemptory judgment is similar to that for granting summary judgrnem. There can exist no genuine issue of material fact and the petitioner must be entitled to XSection 1508 reads in relevant part: (b) Right of inspection.--Every shareholder shall, upon written verified demand stating the purpose thereof, have a fight to examine, in person or by agent or attorney, during the usual hours of business for any proper purpose, the share register, books and records of account, and records of the proceedings of the incorporators, shareholders and directors and to make copies or extracts therefrom. No. 97-5946 CIVIL judgment as a matter of law. Washowich v. McKeesport Mun. Water Auth., 94 Pa. Commw. 509, 512-513, 503 A.2d 1084, 1086 (1986). We believe the Plaintiff has met that standard in the instant case. In order to be entitled to relief under Section 1508 of the Business Corporation Law, the Plaintiff must establish the following: (2) (3) He is a shareholder. He has complied with the provisions of Section 1508 with regard to the form and manner of making demand for inspection. He seeks the inspection for a proper purpose. The Defendant concedes that Plaintiff is a shareholder.2 Defendant further admits that it received a verified letter from Plaimiff requesting an inspection of all books and records of the Corporation.~ The verified letter sets forth Plaintiff's stated purpose "to understand the business operations and financial status of Midstate Communications Corporation as well as analyze and understand the nature and extem of my financial interest concerning [the corporation].''4 The Defendant's only objection to Plaintiff's motion for Preemptory Judgment is that Plaintiff's request is not for a proper purpOse.~ It argues that since Plaintiff has been the general manager of Defendant he should be well aware of the business operations of the Corporation. However, Defendant does not address Plaintiff's stated purpose of understanding the financial 2Answer ¶ 3. ~Reply to Pl.'s Mot. for Preemptory J. ¶ 4. 4pl.'s Mot. for Preemptory J. Ex. A. ~Reply to Pl.'s Mot. for Preemptory J. ¶ 5. No. 97-5946 CIVIL status of the corporation as well as the value of his financial interest therein. These are both proper purposes. Friedm_an v. Altoona Pipe and Steel Supply Co., 460 F.2d 1212 (3rd Cir. 1972). Therefore, we believe that Plaintiff is emitled to the relief requested. At oral argument, the parties raised an ancillary matter which we will address now in the interest of judicial economy. The Plaintiff has requested Midstate's income tax returns, but the Defendant claims they do not fall under the category of"books and records." We believe that they do. The tax returns may shed fight on the actual value of Midstate and could help make clear to the Plaintiff the exact nature and value of his interest. Reilly v. Coppertech, Inc., 19 D. & C. 3d 349, 351 (C.P. Lehigh 1981). Therefore, Midstate must make the requested income tax returns available to the Plaintiff. The Defendant argues that the Plaintiff had an obligation to pay for part of the preparation fees for the tax returns. It further argues that since Plaintiff has not satisfied this obligation, he should not be allowed access to the tax returns. The Defendant does not cite any authority to support its position. Section 1508 outlines the requirements a shareholder must satisfy in order to inspect the books and records of the corporation. These requirements do not include the satisfaction of any alleged debts owing to the corporation. Any claim Defendant might have against Pla/ntiff for failing to pay a portion of the tax preparation charges is not properly before US. AND NOW, this ORDER ~__~ay of JULY, 1998, after argument, the Plaintiff's Motion for Preemptory Judgment is GRANTED. Defendant shall make available to Plaintiff, his agent or No. 97-5946 CIVIL attorney, the share register, books and records of account, and records of the proceedings of the incorporators, shareholders and directors. The term "books and records of accoum" shall include, but not be limited to, the corporation's tax returns. Plaintiff, his agent or attorney, may examine such documems and/or make copies or extracts therefrom. By the Court, /s/Edward E. Guido. J. Edward E. Guido, J. Elizabeth G. Dixon, Esquire Attorney for Plaintiff Edwin A.D. Schwartz, Esquire Attorney for Defendant