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ELEANOR R. HILL v. HUBERT H. HILL AND STANLEY R. GRIFFIN AND HILL EQUIPMENT COMPANY (05/30/80)

filed: May 30, 1980.

ELEANOR R. HILL, INDIVIDUALLY AND ON BEHALF OF HERSELF AND ALL OTHER STOCKHOLDERS OF HILL EQUIPMENT COMPANY, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, APPELLANTS,
v.
HUBERT H. HILL AND STANLEY R. GRIFFIN AND HILL EQUIPMENT COMPANY, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA



No. 14 April Term, 1979, Appeal from the Order of the Court of Common Pleas of Fayette County, Civil Action - Equity at No. 2788 in Equity

COUNSEL

Paul V. Mahoney, Uniontown, for appellants.

David E. Cohen, Uniontown, for appellees.

Cercone, President Judge, and Montgomery and Lipez, JJ. Lipez, J., filed a concurring opinion. Cercone, President Judge, joins in this majority opinion as well as in the concurring opinion filed by Lipez, J.

Author: Montgomery

[ 279 Pa. Super. Page 156]

This equity action was initiated by Appellant to secure an accounting from the individual Defendants-Appellees on the basis of an alleged breach by Appellees of their fiduciary duties as Directors of Hill Equipment Company (hereinafter referred to as "Hill Co."). Further, the Appellee sought to secure a declaration that certain assets acquired by Hillcrest Oil Service Equipment Company (hereinafter referred to as "Hillcrest Co.") from the Hill Co. should be held in trust for the benefit of Appellants.

Plaintiff-Appellant Eleanor R. Hill and Defendant-Appellee Hubert H. Hill were husband and wife.*fn1 The record in this case demonstrates that underlying the dispute between the parties was a marital and property dispute between Mr. and Mrs. Hill. Certain facts appear undisputed in the record. In 1968, Mr. and Mrs. Hill incorporated Hill Co.

[ 279 Pa. Super. Page 157]

Of the 2,700 shares authorized, Mrs. Hill was issued 1,349 and Mr. Hill received 1,351. Both Mr. and Mrs. Hill were on the Board of Directors, along with the Defendant-Appellee, Stanley R. Griffin, who was the accountant for Hill Co. Mr. Hill was the President and manager of the concern, which engaged primarily in the installation of equipment in gasoline service stations. Mrs. Hill worked as a full-time bookkeeper of the company until September 20, 1971, when she was dismissed from that position. Despite the termination of that employment, Mrs. Hill continued to serve as a director until 1974, receiving a director's fee of $125.00 weekly during this period.

During the years 1971 through 1974, Mr. Hill also operated two car wash businesses known as Colonial Car Wash (in Connellsville, Pennsylvania) and Maple Lane Car Wash (in Uniontown, Pennsylvania). Hill Co. serviced these stations at various times. In March, 1973, Mr. Hill organized Hillcrest Co. to conduct a similar business to that being conducted by Hill Co. However, Hillcrest Co. did not actually start to do business until June, 1974. Mr. Hill and Stanley R. Griffin were officers and directors of Hillcrest Company.

Prior to her discharge from employment in 1971, Mrs. Hill was also employed by her husband as a bookkeeper for the two car washes which he owned as an individual. The real estate on which the Connellsville car wash was operated was held by Mr. and Mrs. Hill as tenants by the entireties. The land on which the Uniontown car wash was operated was leased from a third party. The equipment used by both car wash facilities was held, in a separate proceeding, to belong to Mrs. Hill as a surviving tenant by the entireties.*fn2

After extended hearings in the lower court, the Chancellor issued the following Decree Nisi:

1. That all injunctions and orders heretofore entered, particularly including the order of June 17, 1975, enjoining the dissolution of the Hill Equipment Company, remain in full force and effect until further order of the Court.

[ 279 Pa. Super. Page 1582]

. That the estate of Hubert H. Hill account for all transactions between the Hillcrest Oil Equipment Service Company and the Hill Equipment Company, particularly including the sale of a car wash conveyor and rental for the use of the Hill Equipment Company equipment and shop.

3. That such accounting reflect the then existing fair market value of all benefits derived by Hillcrest from all of its transactions with Hill Equipment Company, particularly including the sale of a car wash conveyor and rental for the use of the Hill Equipment Company equipment and shop, with full credit for amounts already paid.

4. That the Estate of Hubert H. Hill pay the amount found to be owed to the ...


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