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Home My WebLink About99-2666 CivilNEEMA THAKRAR, Plaintiff Vo WILLIAM H. HOOK, JR.; CURT E. SUTER; and JEFFREY A. AUSTIN; EAGLE DEVELOPMENT CORPORATION; and CUMBERLAND MOTOR INNS, INC., Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 99-2666 CIVIL TERM IN RE: DEFENDANTS' PRELIMINARY OBJECTIONS TO PLAINTIFF'S COMPLAINT BEFORE OLER, J.* ORDER OF COURT AND NOW, this ~Z['L'day of November, 1999, upon consideration 0f Defendants' preliminary objections to Plaintiff's complaint, and for the reasons stated in the accompanying opinion, the preliminary objections are granted as to Count 1 of Plaintiff's complaint (breach of contract), that count is dismissed, and the remaining preliminary objections are denied. BY THE COURT, Allen C. Warshaw, Esq. 305 North Front Street 5th Floor P.O. Box 1003 Harrisburg, PA 17108-1003 Attorney for Plaintiff William A. Duncan, Esq. 1 Irvine Row Carlisle, PA 17013 Attorney for Defendants :rc * Hoffer, P.J., did not participate in the consideration or disposition of this case. NEEMA THAKRAR, Plaintiff Vo WILLIAM H. HOOK, JR.; CURT E. SUTER; and JEFFREY A. AUSTIN; EAGLE DEVELOPMENT CORPORATION; and CUMBERLAND MOTOR INNS, INC., Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 99-2666 CIVIL TERM -- IN RE: DEFENDANTS' PRELIMINARY OBJECTIONS TO PLAINTIFF' S COMPLAINT BEFORE OLER, J.1 OPINION and ORDER OF COURT Oler, J., November 12, 1999. In this civil action at law, an individual plaintiff has filed claims against (1) several individual defendants for breach of contract, (2) the individuals and a corporation for minority shareholder oppression, and (3) the individuals and a second corporation for minority shareholder oppression. For disposition at this time are preliminary objections filed by Defendants to Plaintiff's complaint. Defendants' preliminary objections consist of (1) a motion to strike Plaintiff's claim for breach of contract against the individual defendants due to a lack of standing on the part of Plaintiff, (2) a motion to strike Plaintiff's claim t Hoffer, P.J., did not participate in the consideration or disposition of this case. against Defendant Eagle Development Corporation on the ground that the claim is based on a failure of the corporation to distribute profits or declare a dividend, which is not a corporate duty, and (3) a motion to strike Plaintiff's claim against Defendant Cumberland Motor Inns, Inc., on the same ground. Plaintiff has agreed to a dismissal of her claim for breach of contract.2 Defendants' preliminary objections were argued on August 11, 1999. For the reasons stated in this opinion, the preliminary objection which is not contested will be granted and the preliminary objections which are contested will be denied. STATEMENT OF FACTS Plaintiff's complaint alleges, in pertinent part, that on June 12, 1980, her husband and the individual defendants entered into a written contract which governed their development, through the corporate defendants, of two tracts of land. The complaint avers that she and her husband were minority shareholders of the corporations, and that eventually the individual defendants, who were also shareholders, corporation, consideration. requested. caused the corporations to distribute corporate funds to a third formed and owned by the individual defendants, for inadequate Damages in excess of $50,000.00 in favor of Plaintiff are 2 Plaintiff's Brief in Opposition to Defendants' Preliminary Objections to Plaintiff's Complaint, at 6 n.2. 2 DISCUSSION It is well settled in Pennsylvania that "[t]he test on preliminary objections [which would result in dismissal of a claim] is whether it is clear and free from doubt from all of the facts pleaded that the pleader will be unable to prove facts legally sufficient to establish his right to relief." Bower v. Bower, 531 Pa. 54, 57, 611 A.2d 181, 182 (1992). In determining whether to grant such a preliminary objection, the "[c]ourt must consider as true all of the well-pleaded material facts set forth in [the pleading challenged] and all reasonable inferences that may be drawn from those facts." Id. Moreover, such "preliminary objections will only be sustained if clear and free from doubt." Triage, Inc. v. Commonwealth of Pennsylvania, Department of Transportation, 113 Pa. Commw. 348, 354 n.7, 537 A.2d 903,907 n.7 (1988). In support of the preliminary objections to Plaintiff's claims against the corporate defendants, Defendants argue that the claims are essentially demands for distribution of profits and that a shareholder has no right to receipt of corporate profits in the absence of a declaration of a dividend.3 However, a review of the complaint tends to support the argument of Plaintiff that "[P]laintiff is not 3 Defendants' Brief' in Support of Preliminary Objections to Plaintiff's Complaint, at 6-8. complaining because profits were not distributed. She is complaining that profits were distributed but that she was excluded from that distribution.''4 The court is therefore unable to agree with Defendants that the counts of Plaintiff's complaint alleging minority shareholder oppression by the corporate defendants should be stricken on the theory that they constitute claims for breach of a nonexistent duty to distribute profits to shareholders.5 For the foregoing reasons, the following order is entered: ORDER OF COURT AND NOW, this 12th day of November, 1999, upon consideration of Defendants' preliminary objections to Plaintiff's complaint, and for the reasons stated in the accompanying opinion, the preliminary objections are granted as to Count 1 of Plaintiff's complaint (breach of contract), that count is dismissed, and the remaining preliminary objections are denied. 4 Plaintiff's Brief in Opposition to Defendants' Preliminary Objections to PlaintiWs Complaint, at 6. 5 Defendants observe in their brief in support of their preliminary objections that Plaintiff's claims for minority shareholder oppression are unclear as to whether they constitute causes of action for personal relief on behalf of Plaintiff or stockholders' derivative suits. Defendant's Brief in Support of Preliminary Objections to Plaintiff's Complaint, at 6-7. The court accepts Plaintiff's representation that the claims are not stockholder's derivative suits. Plaintiff's Brief in Opposition to Defendants' Preliminary Objections to Plaintiff's Complaint, at 6 n.3. 4 BY THE COURT, s/J. Wesley Oler, Jr. J. Wesley Oler, Jr., J. Allen C. Warshaw, Esq. 305 North Front Street 5th Floor P.O. Box 1003 Harrisburg, PA 17108-1003 Attorney for Plaintiff William A. Duncan, Esq. 1 Irvine Row Carlisle, PA 17013 Attorney for Defendants :rc 5