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KELLYTOWN COMPANY C/O MINERAL MANAGEMENT CORPORATION v. ROBERT A. WILLIAMS (02/20/81)

filed: February 20, 1981.

KELLYTOWN COMPANY C/O MINERAL MANAGEMENT CORPORATION,
v.
ROBERT A. WILLIAMS, APPELLANT



No. 1071 April Term, 1978, Appeal from the Order of the Court of Common Pleas of Clearfield County, Civil Action--Equity No. 74-19

COUNSEL

Leonard Dubin, Clearfield, for appellant.

F. Cortez Bell, Jr., Clearfield, for appellee.

Price, Brosky and Montgomery, JJ.

Author: Brosky

[ 284 Pa. Super. Page 615]

Appellee, Kellytown Company (Kellytown) and Mineral Management Corporation, filed a complaint in Equity (R 2a) on August 12, 1974 against Robert A. Williams (Williams) individually to pierce the corporate veils of Dean Coal Company (Dean) and Doral Coal Corporation (Doral) respectively, [the two companies involved in the underlying transaction] and hold Robert A. Williams personally liable for damages in an amount alleged to be in excess of $10,000.

An answer to the complaint was filed on October 21, 1974 (R 18a) denying all the material allegations of the complaint.

The basis for appellee's action is predicated on an agreement consisting of four letters, Exhibits 1, 2, 3, and 4, all prepared by appellee, and the testimony of George R. Shiarella (24a).

Appellee's Exhibit No. 1 is a letter written by Kellytown Company (Kellytown) to Doral dated September 17, 1971, reciting they are the owners of and have contracted for startup extractive operations on 1,736 acres of coal leases known as the Kellytown Project located in Clearfield County, Pennsylvania. Doral was engaged to operate "Kellytown's coal properties," as independent contractors. As compensation, Kellytown agreed to pay "Doral" 65% of the gross sales of all coal produced or $5.75 per ton produced. This letter was signed Kellytown Company by Mineral Management Corporation, G. R. Shiarella, President, and accepted by Doral Coal Corporation, Robert Williams, President, attested by Mark Williams, Secretary (corporate seal imprinted).

Appellee's Exhibit No. 2 is a letter from Doral Coal Corporation (Doral) dated September 17, 1971 to Kellytown (prepared and typed by Kellytown) Re: Turnkey Contract for Coal Project, located in Clearfield County, Pennsylvania. Doral agreed to the Turnkey price of $500,000 for all the work necessary to begin extractive coal mining operations to

[ 284 Pa. Super. Page 616]

    develop and exploit the Clarion Coal Seam on the 1,736 acres of coal which consists of subsisting and existing leases. A royalty of $.10 per ton of all coal extracted for supplying tangible equipment necessary on the property. Payment of the Turnkey price for startup operations was to be made by cash or check in three installments totaling $300,000. Delivery of Kellytown's Promissory Note in the amount of $200,000. This letter was signed Doral Coal Corporation by Robert Williams, President (corporate seal imprinted), agreed to and accepted on the 21st day of September, 1971 by Kellytown Company by Mineral Management Corporation, G. R. Shiarella, President.

Appellee's Exhibit No. 3 is a typed letter from Kellytown Company c/o Mineral Management Corporation, 477 Madison Avenue, New York, New York, 10022, to Dean Coal Company, dated September 17, 1971, appointing it as exclusive sales agent for all coal produced from Kellytown's properties known as the Kellytown Project for a period ending March 1, 1974, and agreeing to pay "Dean" a sales commission equal to four percent of the gross sales price of all coal sold. This letter is signed Kellytown Company by Mineral Management Corporation, G. R. Shiarella, President, agreed to and accepted the 17th day of September, 1971, Dean Coal Company, Inc., by Robert Williams, President (corporate seal imprinted).

Appellant's Exhibit No. 4 is a letter (prepared by Kellytown) from Dean Coal Company, Inc., dated September 17, 1971, addressed "To whom it may concern" advising that all negotiations and understandings prior to September 17, 1971 and not set forth in the papers signed as of this date are specifically cancelled and null and void; and that no understandings or conditions not incorporated therein shall have any force or effect. In addition to the four exhibits, a letter dated September 21, 1971 from Mineral to Dean and Doral advising Dean to establish a segregated funds account, all withdrawals will require two signatures, amongst ...


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