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HomeMy WebLinkAbout95-6259 EquityMARK A. THESEN, Plaintiff Ve DAVID M. GIBBLE, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - EQUITY NO. 95-6259 EQUITY TERM IN RE: ADJUDICATION BEFORE OLER, J. DECREE NISI AND NOW, this ~day of April, 1998, upon consideration of Plaintiff's complaint and Defendant's counterclaim, and of the various objections and motions filed by the parties, following an equity trial, and for the reasons stated in the accompanying opinion, it is hereby ordered, adjudged and decreed as follows: 1. The partnership between the parties is dissolved. 2. Defendant shall pay to Plaintiff the sum of $16,007.09, with interest sec. leg. from August 14, 1995. 3. Plaintiff's claim for breach of contract is dismissed; Defendant's counterclaims for conversion and tortious interference with contracts are dismissed. 4. All other objections and motions are denied. Scott D. Moore, Esq. 26 West High Street Carlisle, PA 17013 Attorney for Plaintiff BY THE COURT, Wesley O~, David A. Flores, Esq. 2306 Columbia Avenue Lancaster, PA 17603 Attorney for Defendant MARK A. THESEN, Plaintiff V® DAVID M. GIBBLE, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - EQUITY NO. 95-6259 EQUITY TERM IN RE: ADJUDICATION BEFORE OLER, J. OPINION and DECREE NISI Oler, J., April 17, 1998 In this equity case Plaintiff has sued for dissolution of a partnership and an accounting, and for breach of contract. Defendant has counterclaimed for conversion, tortious interference with contracts, and an accounting. Trial was held on Wednesday, October 29, 1997, and Thursday, October 30, 1997. The court entered a partial adjudication in this matter on December 5, 1997, finding, inter alia, that Plaintiff and Defendant had formed an unwritten partnership that terminated on August 14, 1995, that the property and liabilities of the partnership as of August 14, 1995, were to be divided on a 50/50 basis between the parties, and that the parties had mutually divided contracts still outstanding between themselves. Accordingly, each party was ordered to file an accounting and a proposed schedule of distribution with respect to partnership property and liabilities as of August 14, 1995. Defendant's Objections to and Motion To Strike Plaintiff's Proposed Accounting and Proposed Schedule of Distribution, Plaintiff Mark A. Thesen's Response to Defendant's Objections to and Motion To Strike Plaintiff's Proposed Account and Proposed Schedule of Distribution, NO. 95-6259 EQUITY TERM Defendant's Reply in Support of Objections and Motion To Strike, Plaintiff's Response to Defendant's Reply in Support of Objections to Motion To Strike, Defendant's Sur-Reply to Plaintiff's Response on Damages, and Plaintiff's Sur-Response to Defendant's Sur-Reply on Damages were subsequently filed. Based on the evidence presented at trial and the parties' accountings and proposed schedules of distribution, the following Findings of Fact, Conclusions of Law and Decree Nisi are made and entered: FINDINGS OF FACT 1. The court herein incorporates the Findings of Fact made in its partial adjudication of this matter on December 5, 1997. 2. Following the termination of the partnership Thesen withdrew tools and equipment valued at $3,473.25, as follows:~ a. Power scraper b. Demolition hammer c. 20-foot ladder d. Concrete planer e. Metabo grinders f. Diamond cut blades g. Step ladder h. Tuff tool box i. Trailer hitch j. Bed liner k. Ladder rack 1. Answering machine m. Scale master n. Fax machine o. Generator p. Glass blower $344.48 $421.88 $116.60 $210.94 $311.53 $315.88 $84.79 $62.54 $88.23 $147.34 $520.55 $74.19 $114.32 $381.59 $151.80 $126.59 3. Additionally, Thesen withdrew materials valued at Vol. II, N.T. 271-73. NO. 95-6259 EQUITY TERM $1,511.24.2 4. Gibble retained $3,652.00 in tools and supplies following the termination3 as well as the other assets of the partnership, with the exception of those contracts received by Thesen.4 5. Both Thesen and Gibble presented evidence that work was completed on certain contracts during the term of the partnership, as found by the court, and that a total of $81,280.82 was received from these contracts, in the following particulars:s a. Milton Hershey (Wohlsen Construction Company) b. Hampden Township EMS (T.L. Warner) c. Exit II WWTP (Wagman Construction) d. John Cope's Corn (E.F. Martzall, Inc.) e. Sidewalk Recaulk (High Assoc. Ltd.) f. Home Depot (Perry Construction Group) g. Milton Hershey School (Consolidated Constr.) h. Weis Markets - Ephrata (Nelson Constr. Group) i. Mount Joy Sportsman Association (MJSA) j. New Penn Motor Freight (R.S. Mowery) $15,250.00 $5,175.35 $455.00 $2,975.00 $612.00 $21,102.00 $13,732.00 $667.00 $2,847.00 $11,450.47 Vol. II N.T. 269; Defendant's Ex. 5-A . 3 Defendant David Gibble's Accounting for Assets and Liabilities of Gibble Construction Co. and Proposed Schedule of Distribution. 4 Thesen did not withdraw any other assets of the partnership. Vol. II, N.T. 262-63; Defendant's Ex. 5-A (invoices). 3 NO. 95-6259 EQUITY TERM k. Granito Residence (C.H.E.) 1. Milton Hershey School (Alexander Construction) m. Georgi's (McMichael Construction) n. Century Eight Center (McMichael Construction) o. Carlisle MRI (McCoy Brothers) $1,155.00 $4,926.00 $362.00 $72.00 $500.00 6. Additionally, certain contracts were not completed at the date of termination of the parties' business relationship. As of August 14, 1995, the partnership had received $22,554.00 from these contracts, as follows:6 a. Masonic Homes Phase 4 (Lancaster Masonry) b. Northside Elementary (Wohlsen Construction Co.) c. Paxtonia Elementary (Wohlsen Construction Co.) d. Cumberland Valley Motors (R.S. Mowery) e. MifflinburgWWTP (Howard Robson) f. Gettysburg Times (McCoy Brothers) g. Garden Spot H.S. (Benchmark Construction) $9,363.00 $2,070.00 $8,478.00 $494.00 $2,149.00 $0.00 $0.00 7. It is noted that the court previously found that (1) upon the termination of their business relationship, the parties individually undertook to complete the contracts on which work had not been completed by August 14, 1995, (2) that such a division of the partnership's future responsibilities and income potential by the parties represented a practical approach to resolving the Defendant's Ex. 5-A (invoices). 4 NO. 95-6259 EQUITY TERM termination of their business relationship, and (3) that the expenses and income from a given project attributable to work performed after August 14, 1995, were to be borne and received by the party assuming responsibility for the project.7 8. Testimony and exhibits presented during trial indicate that, during the relevant time period, the partnership incurred $61,851.66 in expenses, as follows: a. Advertising b. Sealants c. Telephone d. Bank Charges e. Insurance f. Office Supplies g. Postage h. Dues (Union and Builder's Exchange Membership) i. Labor $105.468 $20,223.419 $4,096.87~° $67.75~ $3,505.63~2 $525.41~3 $62.67TM $484.00~ $3,541.30~6 13. See Partial Adjudication, December 5, 1997, paragraphs 12- Vol. II, N.T. 280; Defendant's Ex. 5-A. Vol. II, N.T. 286; Defendant's Exs. 5-A, 5-D. Vol. II, N.T. 287; Defendant's Ex. 5-B. Vol. II, N.T. 280; Defendant's Ex. 5-A. Vol. II, N.T. 282-83; Defendant's Ex. 5-A. Vol. II, N.T. 284; Defendant's Ex. 5-A. Id. Vol. II, N.T. 281; Defendant's Ex. 5-A. Vol. II, N.T. 286; Defendant's Ex. 5-B. NO. 95-6259 EQUITY TERM j. Garage Rental k. Fuel for gas blowers 1. Interest (credit card) m. Attorney's fees to draft agreement n. Repairs o. Miscellaneous supplies p. Tools and machinery q. Salary/draws to Thesen r. Salary/draws to Gibble $1,375.00~7 $3.59~8 $873.78TM $500.002° $116.832~ $3,081.9822 $342.4223 $11,686.002¢ $11,259.562~ ~7 $250 per month for five and one-half months. Vol. II, N.T. 281, 300. Vol. II, N.T. 281; Defendant's Ex. 5-A. Vol. II, N.T. 283, 301. Vol. II, N.T. 285; Defendant's Ex. 5-A. Vol. II, N.T. 285. Vol. II, N.T. 284; Defendant's Ex. 5-A. Vol. II, N.T. 287. 24 Defendant's exhibit D-13 (Itemized Balance Sheet) indicates that Thesen received $11,686.00 in payments during the term of the partnership, as follows: $300.00 (3/12/95); $400.00 (3/23/95); $400.00 (3/30/95); $400.00 (04/05/95); $400.00 (04/12/95); $400.00 (04/19/95); $500.00 (04/29/95); $400.00 (05/05/95); $400.00 (05/15/95); $36.00 (05/16/95); $450.00 (05/23/95); $450.00 (5/31/95); $550.00 (06/07/95); $550.00 (06/14/95); $550.00 (06/20/95); $550.00 (07/03/95); $550.00 (07/05/95); $750.00 (07/08/95); $600.00 (07/17/95); $600.00 (07/19/95); $600.00 (07/29/95); $675.00 (08/01/95); and $1,175 (08/07/95). Thesen testified that he received $11,636.00 in payments. Vol. I, N.T. 59. The court assumes that the company records were kept more carefully than Thesen's personal records in this instance; therefore, Thesen will be considered to have received $11,686.00 in payments from the partnership. 2~ Defendant's exhibit D-13 (Itemized Balance Sheet) indicates that Gibble received $11,259.56 in payments during the term of the partnership, as follows: $313.68 (03/20/95); $150.00 (04/02/95); $600.00 (04/05/95); $496.88 (05/10/95); $450.00 (06/01/95); $50.00 (06/03/95); $313.68 (07/08/95); $2,750.00 (07/08/95); $600.00 (07/29/95); $4,365.00 (07/29/95); $90.00 ((07/29/95); $362.22 6 NO. 95-6259 EQUITY TERM 9. On June 3, 1995, Gibble received a payment in the amount of $12,119.40 from the partnership.26 This payment represented part of a withdrawal by Gibble totalling $17,000.00 which it was agreed he would accept as full satisfaction for his capital contribution to the partnership in the form of preexisting contracts.27 In addition to the $12,119.40 payment from the partnership, Gibble received $3,600.00 from work performed by the partnership for Wohlsen Construction Company and $1,280.60 from work performed for Consolidated Construction, for a total of $17,000.00.28 Therefore, the $12,119.40 payment was not a salary/draw to Gibble. 10. On August 14, 1995, the date of termination, Gibble received a payment of $1,266.00 and a payment of $24,940.54 from the partnership. Since these payments were made on the date of termination, the court does not consider them to have been agreed upon salary/draws by the parties. 11. The court notes that Defendant's exhibit D-14 (Itemized Profit and Loss Statement) indicates that the partnership also incurred expenses for warranty repairs in the amount of $373.00. The warranty repair expenses were incurred after August 14, 1995. Since they were incurred after the relevant time period, they will (08/01/95); and $718.10 (08/02/95). Defendant's Ex. D-13 (Itemized Balance Sheet). Vol. II, N.T. 315. Vol. II, N.T. 315. 7 NO. 95-6259 EQUITY TERM not be considered. 13. The court notes that Defendant's exhibit D-14 (Itemized Profit and Loss Statement) further indicates that the partnership incurred expenses for a truck in the amount of $3,655.40, for utilities in the amount of $75.00, and for travel in the amount of $38.20. Because no testimony, invoices, or receipts were entered into evidence regarding the travel, truck, or utilities expenses referenced in Defendant's profit and loss statement, they will not be considered as expenses to the partnership. 14. Defendant testified that the partnership also incurred expenses for interest on a truck loan in the amount of $258.79.29 The court notes that both parties brought a truck into the partnership and neither party is alleging that his respective truck is a partnership asset. Therefore, the interest on the truck loan will not be considered an expense of the partnership. 1 5 . The court has exercised its best judgment in valuing the partnership assets, and based on the evidence presented at trial and upon consideration of the fact that during the relevant time period the partnership earned $81,280.82 from completed contracts and $22,554.00 from uncompleted contracts, the partnership incurred expenses of $61,851.66, Gibble withdrew $17,000.00 from the business in full satisfaction of his capital contribution in the Vol. II, N.T. 283, 301. 8 NO. 95-6259 EQUITY TERM form of preexisting contracts,3° and expenses paid and draws received by each party up to the point of the partnership's termination were in accordance with the parties' mutual agreement,3~ the court finds that the partnership was valued at $~1,983.16 as of the date of termination, August 14, 1995, entitling each party, at that time, to $20,991.58, which represents a fifty percent share of the partnership; however, it is noted that following the termination of the partnership, Defendant retained all the assets of the partnership except $4,984.49 in tools and supplies which Plaintiff withdrew from the partnership and certain contracts which the parties subsequently divided among themselves. CONCLUSIONS OF LAW 1. The court has jurisdiction of the parties herein and the subject matter of their dispute. 2. Dissolution of the partnership is appropriate. 3. Plaintiff is entitled to receive $16,007.09 in addition to the tools and supplies valued at $4,984.49 which he withdrew from the partnership. 4. Defendant is entitled to retain $17,339.58 and $3,652.00 Partial Adjudication, December 5, 1997, paragraphs 6-7. 3~ Partial Adjudication, December 5, 1997, paragraphs 8-9. The court notes that this does not include the $26,206.54 which Defendant withdrew from the partnership on the date of termination, as such a large withdrawal on the date of termination can not be considered to have been received in accordance with the parties mutual agreement during the term of the partnership. 9 NO. 95-6259 EQUITY TERM in tools and supplies.. DECREE NISI AND NOW, this 17th day of April, 1998, upon consideration of Plaintiff's complaint and Defendant's counterclaim, and of the various objections and motions filed by the parties, following an equity trial, and for the reasons stated in the accompanying opinion, it is hereby ordered, adjudged and decreed as follows: 1. The partnership between the parties is dissolved. 2. Defendant shall pay to Plaintiff the sum of $16,007.09, with interest sec. leg. from August 14, 1995. 3. Plaintiff's claim for breach of contract is dismissed; Defendant's counterclaims for conversion and tortious interference with contracts are dismissed. 4. All other objections and motions are denied. BY THE COURT, Scott D. Moore, Esq. 26 West High Street Carlisle, PA 17013 Attorney for Plaintiff David A. Flores, Esq. 2306 Columbia Avenue Lancaster, PA 17603 Attorney for Defendant J. Wesley Oler, Jr. J. Wesley Oler, Jr. J. 10