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Bair v. Purcell

August 2, 2007


The opinion of the court was delivered by: Chief Judge Kane


Before the Court are Defendants' Motion for Summary Judgment (Doc. No. 32), seeking judgment in their favor on all counts of the amended complaint, and Plaintiffs' Motion for Partial Summary Judgment (Doc. No. 34), seeking judgment in their favor on Count III of the amended complaint. The motions have been fully briefed and are ripe for adjudication.


In 1998, Defendant Francis "Corky" Purcell incorporated Defendant Appalachian Baking Company, Inc. ("Appalachian Baking") under Pennsylvania law as a closely-held business corporation. Appalachian Baking maintains a business office and conducts business operations in Harrisburg, Pennsylvania. That same year, Appalachian Baking entered into a ten-year franchise agreement with the Atlanta Bread Company International, Inc., pursuant to which Appalachian Baking was granted exclusive development rights for Atlanta Bread Company stores in Dauphin, Cumberland, and Lebanon counties, the State College, Pennsylvania region, and the Baltimore, Maryland area. At the time, Francis Purcell was the sole shareholder of Appalachian Baking.

Prior to their involvement with Appalachian Baking, Plaintiffs Curtis Bair and Patrice Bair (husband and wife) lived and worked in Atlanta, Georgia. Curtis Bair and Francis Purcell were friends and had previously worked together, primarily on a Peachtree Pretzel Time, Inc., franchise. (Curtis Bair First Supp. Decl. ¶ 7, Doc. No. 55-4.) Curtis Bair held a ten-percent ownership in the franchise, and both he and his wife worked for the pretzel franchise operation. (Id. ¶¶ 7-8, 20.) During a Peachtree Pretzel Time stockholders meeting in May 1998, Francis Purcell, his wife Norma Purcell, Plaintiffs, and Deborah and Jay James (future shareholders of Appalachian Baking) began discussing various franchise opportunities, including Atlanta Bread Company. Later that year, Francis Purcell informed Plaintiffs that he had decided to pursue an Atlanta Bread Company franchise, and Curtis Bair agreed to allow Francis Purcell to use part of their equity in Peachtree Pretzel Time to pay the franchise fee and other start-up expenses of Appalachian Baking. (Id. ¶ 20.) During this time, Plaintiffs claim that Francis Purcell represented to them that he planned to open ten to fifteen Atlanta Bread Company stores and that Plaintiffs would play a long-term role in the company. (Id. ¶ 12.)

In June 2000, Francis Purcell sent Curtis Bair a packet of documents to be circulated to potential investors in Appalachian Baking. The packet included an offering and subscription memorandum, a confidential descriptive memorandum, a form subscription agreement, a form shareholder joinder, and a form shareholders agreement. (Pl. Exs. 4.1, 4.2, 20, 22, Doc. No. 43.) The confidential descriptive memorandum stated that the company planned to "operate one or more retail bakery and café restaurants under the name Atlanta Bread Company" within their exclusive development territory. (Pl. Ex. 4.2.) The form shareholders agreement, dated June 1, 2000, listed Curtis Bair as a shareholder in the company and as a member of the board of directors.*fn2 (Pl. Ex. 22.) However, this form agreement was circulated unsigned and contained blanks spaces where additional information was to be filled in later. (Id.) Specifically, the form agreement does not indicate how many of the total shares of the company were owned by the parties and reserved space to add the names of additional investors. (Id.) Plaintiffs allege that Curtis Bair signed ten copies of the form shareholders agreement, returned the copies to Francis Purcell, and became a party to the shareholders agreement.*fn3 (Doc. No. 36, ¶ 47.) Defendants dispute this allegation. (Doc. No. 67, ¶ 47.)

The corporate records of Appalachian Baking contain a different June 1, 2000, shareholders agreement. (Pl. Ex. 23, Doc. No. 35.) This agreement lists Francis Purcell as the sole shareholder of Appalachian Baking, although an attached exhibit lists Francis and Norma Purcell as co-owning one hundred percent of the company's shares, or 77 shares.*fn4 (Id.) The agreement is signed by Francis and Norma Purcell, as witnessed by their daughter Jessica Purcell.*fn5 (Id.) Notwithstanding the other differences between this agreement and the form shareholders agreement contained in the packet of documents provided to potential investors, this agreement still listed Curtis Bair as a member of the board of directors and provided that all board members must be shareholders. (Id. §§ 2.02-2.03.) Curtis Bair signed neither this agreement nor a joinder agreement. Defendants allege that they asked Curtis Bair to sign, but that he refused. (Doc. No. 67, ¶ 53; see also Stuart Sacks Affidavit ¶¶ 5-6, Def. Ex. Y, Doc. No. 60-3. ) Plaintiffs allege that the first time Curtis Bair was informed that he was not a party to the shareholders agreement was on December 12, 2003, during the meeting in which he was voted off the board of directors. (Doc. No. 36, ¶¶ 54, 94.)

On June 7, 2000, Appalachian Baking entered into a ten-year lease for a restaurant location in Harrisburg, Pennsylvania. On June 20, 2000, Robert and Lori Green -- friends of the Purcells -- executed a shareholder joinder to the Appalachian Baking shareholders agreement and agreed to purchase six shares of the company's stock for $100,000, or approximately $16,666 per share. On July 28, 2000, Deborah and Jay James -- Norma Purcell's sister and brother-in-law -- executed a shareholder joinder to the Appalachian Baking shareholders agreement and agreed to purchase two shares of the company's stock for $40,000, or $20,000 a share. Appalachian Baking issued the above shares of stock on February 5, 2001. On August 8, 2001, the company issued Curtis Bair fifteen shares of stock at no price. (Doc. No. 36, ¶ 28.)

On February 5, 2001, Norma Purcell became co-owner of Francis Purcell's majority shareholding in Appalachian Baking. (Doc. Nos. 36, ¶ 12; 67, ¶ 12.)

The parties agree that on May 22, 2001, Appalachian Baking held its first shareholders and board meeting in Las Vegas, Nevada, during which the officers and directors of the company were elected. (Doc. Nos. 36, ¶ 30; 67, ¶ 30.) The parties further agree that the company's records contain no minutes from the May 22, 2001, meeting; rather, the corporate records indicate that the company's officers and directors were elected at a shareholders meeting held on December 20, 2001. (Pl. Ex. 18, Doc. No. 35.) According to the minutes, Francis Purcell, Norma Purcell, and Curtis Bair were elected as directors of the company, and the directors elected the following officers: Francis Purcell, president and treasurer; Norma Purcell, vice president; and Curtis Bair, secretary. (Id.)

Appalachian Baking's first and only Atlanta Bread Company restaurant ("the restaurant") opened in July 2001 with John Krulock as store manager. Despite the successful opening, John Krulock became unhappy with his position. Shortly after the opening, Curtis Bair quit his job in Atlanta and relocated to Pennsylvania to assist with operating the restaurant, under the title of vice president of store operations.*fn6 Patrice Bair remained in Georgia to sell their house and coordinate their move to Pennsylvania. After joining her husband in Harrisburg, Patrice Bair began working at the restaurant as a catering coordinator in August 2001.

The record indicates that in early 2002, Francis Purcell and Curtis Bair began to disagree about the direction of the company. Curtis Bair expected the company to grow quickly and open additional restaurant locations throughout the exclusive development territory. However, on April 9, 2002, Francis Purcell informed Curtis Bair that he was not planning to open any more restaurants and wanted to retire from the company. In early May 2002, Francis Purcell announced his intention to sell his and his wife's controlling interest in the company to his daughter, Jessica Kiely.

Plaintiffs allege that on May 2, 2002, Francis Purcell offered to purchase Curtis Bair's shares of stock in the company for $203,000, or approximately $13,533 per share. (Doc. No. 36, ¶ 72.) Plaintiffs claim that Curtis Bair verbally accepted Purcell's offer the same day. (Id. ¶ 73.) Defendants contend that Curtis Bair offered to have his stock redeemed by the company for $203,000, but an agreement was never finalized.

On May 10, 2002, Francis Purcell prepared a stock-purchase letter addressed to Deborah and Jay James, and Lori Green,*fn7 wherein Francis Purcell stated that he was planning to purchase Curtis Bair's shares for $203,000, and sell his and his wife's controlling shares to Jessica Kiely for $200,000 plus assumption of the corporation's current debt of over $425,000. In the letter, Francis Purcell offered Lori Green and the Jameses the following four options: (1) purchase a proportional share of Curtis Bair's 15% interest; (2) purchase a proportional share of Francis Purcell's 77% interest; (3) sell their shares to the company for their initial purchase price plus 10% interest compounded over two years; and/or (4) keep their current ownership in the company. (Pl. Ex. 34, Doc. No. 35.) Lori Green and Deborah and Jay James agreed to sell their shares to Appalachian Baking.

After Curtis Bair received a copy of the above-mentioned letter, he discussed with Francis Purcell the option of purchasing the restaurant or Purcells' controlling shares.

Defendants argue that these negotiations amounted to a series of offers and counteroffers for the redemption of Curtis Bair's own stock and the proposed purchase of control of the company. (Doc. No. 67, ¶ 74.1.) Plaintiffs characterize the negotiations as discussions during which Curtis Bair never abandoned or modified his earlier acceptance of the $203,000 stock buy-out offer. (Doc. No. 36, ¶ 74.1.) Although the above letter was not addressed to him, on June 24, 2002, Curtis Bair attempted to memorialize his understanding of the stock-purchase agreement he allegedly had with Francis Purcell by handwriting "I Curtis Bair elect to sell my shares under option A: sell my shares for $203,000" along the bottom of the letter, signing it thereafter, and creating a new option on the attached form. (Pl. Ex. 35, Doc. No. 35.) Curtis Bair sent a copy of this marked letter back to Francis Purcell.

On July 20, 2002, Appalachian Baking held a joint meeting of the shareholders and members of the board of directors. At the meeting, Francis Purcell voted his and Norma Purcell's shares, and the shares of Lori Green by proxy, for the company to redeem Ms. Green and the James' shares at the price specified in the May 10, 2002, letter. Francis Purcell also voted his and Norma Purcell's shares, and the shares of Lori Green by proxy, against redemption of Curtis Bair's stock. Curtis Bair offered to sell his shares to the other shareholders, but each declined his offer.

In August 2002, Curtis Bair's position was eliminated and his employment with the company was terminated.*fn8 That same month, Patrice Bair's position was also eliminated, and she was terminated from employment. In September 2002, Francis Purcell, on behalf of Appalachian Baking, terminated the company's exclusive development rights agreement with Atlanta Bread Company International.

In January 2003, Francis Purcell requested that Curtis Bair sign two letters of resignation prepared by Purcell, one seeking Bair's resignation from the board of directors and the other seeking his resignation as corporate secretary. Bair refused to sign either letter. On November 13, 2003, Curtis Bair issued a letter demanding that the company or Francis Purcell purchase his 15 shares of stock for $203,000 pursuant to their stock buy-out agreement, and that the company satisfy the unpaid wages owed to Patrice Bair. A few days thereafter, Francis Purcell directed the company's attorney to schedule a combined special meeting of the company's shareholders and board of directors. At that meeting, Francis Purcell moved to amend section 4.03(a) of the company's bylaws to reduce the number of members on the board of directors from three to two. Curtis Bair objected to the amendment. However, Francis Purcell voted his and his wife's controlling interest in the company in favor of the amendment and the motion carried. Francis Purcell then moved for nomination of members to fill the two seats on the board of directors. Francis Purcell nominated himself and his daughter Jessica Kiely and then voted his and his wife's controlling interest in the company in favor of the nominations. Francis Purcell then nominated and voted for the following officers: himself as president and treasurer; Oliver Kiely as vice-president; and Jessica Kiely as secretary. Curtis Bair attempted to object to the voting, but was advised that he was not entitled to participate in the election of officers since he was no longer a member of the board of directors.

As of the date the motions and related briefs were filed, Curtis Bair continues to hold his 15 shares of Appalachian Baking. The company has not declared any dividends, and Curtis Bair receives no salary from the company since he no longer holds any position with Appalachian Baking, either as an employee, director, or officer.


Summary judgment is proper where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56; White v. Westinghouse Elec. Co., 862 F.2d 56, 59 (3d Cir. 1988). A factual dispute is material if it might affect the outcome of the suit under the applicable law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute is genuine only if there is a sufficient evidentiary basis that would allow a reasonable fact finder to return a verdict for the non-moving party. Id. at 249. The evidence presented must be viewed in the light most favorable to the non-moving party. Id. The inquiry is whether the evidence presents a sufficient disagreement to require submission to the jury or whether it is so one-sided that one party must prevail as a matter of law. Id. at 251-52. This standard does not change by virtue of cross-motions being presented. United States v. Hall, 730 F. Supp. 646, 648 (M.D. Pa. 1990).

The moving party has the initial burden of identifying evidence that it believes shows an absence of a genuine issue of material fact. Childers v. Joseph, 842 F.2d 689, 694 (3d Cir. 1988). Once the moving party has shown that there is an absence of evidence to support the non-moving party's claims, the nonmoving party may not simply sit back and rest on the allegations in the complaint. Instead, the nonmoving party must "go beyond the pleadings and by [its] own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial." Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) (internal quotations omitted). The evidence must be viewed in the light most favorable to the non-movant. See Groman v. Township of Manalapan, 47 F.3d 628, 633 (3d Cir. 1995). Summary judgment should be granted where a party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden at trial." Celotex, 477 U.S. at 322.

With respect to the sufficiency of the evidence that the nonmoving party must provide, a court should grant summary judgment where the non-movant's evidence is merely colorable, conclusory or speculative. Anderson, 477 U.S. at 249-50. There must be more than a scintilla of evidence supporting the nonmoving party and more than some metaphysical doubt as to the material facts. Id. at 252; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).


Plaintiffs initiated the above-captioned matter by filing a complaint on June 23, 2004. (Doc. No. 1.) On August 12, 2004, Plaintiffs filed an amended complaint. (Doc. No. 4.) In their amended complaint, Plaintiffs allege the following claims in twelve separate counts: breach of the stock buy-out agreement; breach of employment contract; breach of fiduciary duties; negligent misrepresentation; intentional misrepresentation; equitable estoppel; violation of the Pennsylvania Wage Payment and Collection Law; unjust enrichment; two counts of aiding and abetting; civil conspiracy; and punitive damages. (Id.) On July 6, 2005, Defendants moved for summary judgment on all counts (Doc. No. 32), and two days later, Plaintiffs moved for partial summary judgment on Count III, their claim against Francis and Norma Purcell for breach of fiduciary duties (Doc. No. 34). The Court will address the various counts in the order in which they appear in the amended complaint.

Count I: Breach of Buy-out Agreement

In Count I, Plaintiffs allege that Francis Purcell, Norma Purcell, and Appalachian Baking breached an oral agreement with Curtis Bair to purchase his 15 shares of the corporation for $203,000.*fn9 (Doc. No. 4.) Curtis Bair testified that Francis Purcell made the offer on May 2, 2002, and Bair accepted the offer the same day. (Bair Dep. at 300; Curtis Bair's First Supp. Decl. ¶ 34.) Plaintiffs also point to the May 10, 2002, memorandum sent to Lori Green and Jay and Deborah James, wherein Francis Purcell wrote that he was "planning to purchase the sock of Curtis Bair representing 15% of the company for $203,000[]" and giving the other stockholders an opportunity to match his offer. (Pl. Exs. 34-35, Doc. No. 35.) Plaintiffs further contend that on or about July 22, 2002, Defendants Francis and Norma Purcell assured the Bairs that they would complete the buy-out agreement by the end of 2002. (Curtis Bair First Supp. Decl. ¶ 37; see also Doc. No. 4, at 24-25.) Defendants argue that even if Francis Purcell offered to purchase the shares, Curtis Bair rejected the offer and submitted a counteroffer. (Doc. No. 33, at 30-31; Francis Purcell Affidavit, ¶ 10, Def. Ex. B, Doc. No. 32-2.)

There appears to be a genuine factual dispute as to whether Francis Purcell agreed to purchase Curtis Bair's 15 shares, and whether he did so in his individual capacity or on behalf of the corporation. (Pl. Ex. 9, Francis Purcell's Dep. at 20-21; Doc. No. 36, ¶ 72.) The parties also dispute whether Curtis Bair accepted the $203,000 offer or made a counteroffer, thereby rejecting the original offer. See Yarnell v. Almy, 703 A.2d 535, 539 (Pa. Super. Ct. 1997) ("A reply [to an offer] which purports to accept an offer, but instead changes the terms of the offer, is not an acceptance, but, rather, is a counter-offer, which has the effect of terminating the offer. . . . [I]t is well established that the acceptance of any offer or counter-offer must be unconditional and absolute") (citations and internal quotations omitted). A reasonable jury could credit Curtis Bair's testimony, buttressed by the May 10, 2002, memorandum, and find that a valid buy-out agreement existed between Curtis Bair and Francis Purcell, on behalf of himself or on behalf of Appalachian Baking. Accordingly, Defendants' motion for summary judgment on this count as to Francis Purcell and Appalachian Baking must be denied.

On the other hand, the record does not support a finding by a reasonable jury that Norma Purcell had any involvement in the stock buy-out agreement. Plaintiffs do not allege that Norma Purcell offered to purchase Curtis Bair's shares in her individual capacity. In fact, the parties agree (to some extent) that Norma Purcell resisted becoming involved with corporate matters. (Doc. Nos. 55, at 17-18; 33, at 9-10.) It appears that Plaintiff implicates Norma Purcell in this count only because she jointly owned a majority interest in the corporation, not because she had any personal involvement with the alleged agreement. (Doc. No. 55, at 28-30.) Because the Court will not pierce Appalachian Baking's corporate veil to hold Norma Purcell individually liable based on her investment status (discussed in more detail below), the Court will grant summary judgment on this count in her favor.

Count II: Breach of Employment Contract/Additional Consideration

In Count II, Plaintiffs allege that Appalachian Baking, Francis Purcell, and Norma Purcell breached "long-term employment agreement[s]" with Curtis and Patrice Bair when Defendants terminated, or allowed to be terminated, the Bairs' positions with the corporation without cause. (Doc. No. 4, ¶¶ 88, 92-93.) Defendants argue that no such employment agreement existed and that Plaintiffs were employed at will. (Doc. No. 33, at 25.)

There is a strong presumption of employment-at-will under Pennsylvania law for all employer-employee relationships. Murray v. Commercial Union Ins. Co., 782 F.2d 432, 435 (3d Cir. 1986). Under the at-will employment doctrine, an employee or employer can end the employment relationship at any time for any reason. Id. The presumption of at-will employment can be overcome by showing that there is an express contract between the parties, with a provision stating that an employee can only be terminated "for cause." Scott v. Extracorporeal, Inc., 545 A.2d 334, 336-37 (Pa. Super. Ct. 1988).

An "implied-in-fact" contract can also suffice if additional consideration passed from the employee to the employer "from which the court can infer the parties intended to overcome the at-will presumption." Raines v. Haverford Col., 849 F. Supp. 1009, 1012 (E.D. Pa. 1994) (citing Ruzicki v. Catholic Cemeteries, Inc., 610 A.2d 495, 497 (Pa. Super. Ct. 1992)). The presumption of at-will employment may be overcome by a showing that the employee provided additional consideration to the employer and that termination of employment would result in great hardship or loss to the party known to both employer and employee when the contract was made. Darlington v. Gen. Elec., 504 A.2d 306, 314 (Pa. Super. Ct. 1986), overruled on other grounds by Clay v. Advanced Computer Applications, Inc., 559 A.2d 917 (Pa. 1989). One type of consideration often discussed is the relocation of an employee, particularly when accompanied by relocation of a family. Shaffer v. BNP/Cooper Neff, Inc., No. 98-71, 1998 U.S. Dist. LEXIS 14013, 1998 WL 575135, at *4 (E.D. Pa. Sept. 4, 1998) (collecting cases). Other relevant factors include abandonment of other job opportunities and the sale of a home. Marsh v. Boyle, 530 A.2d 491, 494 (Pa. Super. Ct. 1987).

Under Pennsylvania law, oral representations as to the predicted duration of employment do not modify the at-will presumption. Marsh v. Boyle, 530 A.2d 491, 494 (Pa. Super. Ct. 1987) (stating that "the employer's assurances that Appellant would be working as publisher 'for at least two years' was not sufficiently definite to take the agreement out of the at-will employment presumption"); see also Engstrom v. John Nuveen & Co., Inc., 668 F. Supp. 953, 959 (E.D. Pa. 1987) ("The contractual provision necessary to overcome the at-will presumption must be for a specific and definite term, not vague or conclusory"); Braun v. Kelsey-Hayes Co., 635 F. Supp. 75, 77 (E.D. Pa. 1986) (holding that verbal representations that plaintiff would be employed so long as he performed his job satisfactorily did not modify at-will status).

The determination of whether such factors constitute sufficient consideration to overcome the at-will presumption is a jury question. Cashdollar v. Mercy Hosp. of Pittsburgh, 595 A.2d 70, 73 (Pa. Super. Ct. 1991). The Court may only rule on the issue when the record evidence "is so clear that no reasonable [person] would determine the issue before the court in any way but one[.]" Shaffer, 1998 WL 575135, at *7 (quoting Darlington, 504 A.2d at 312); see also Martin v. Safeguard Scientifics, 17 F. Supp. 2d 357, 369 (E.D. Pa. 1998) (same). Here, Plaintiffs have presented evidence from which a jury could find that Appalachian Baking received sufficient "additional consideration" to overcome the presumption that Plaintiffs were at-will employees. For example, Plaintiffs contends that, shortly after the restaurant opened, Francis Purcell asked Curtis Bair to relocate to Harrisburg as quickly as possible and that, in light of this request, Curtis Bair resigned from his job in Georgia and promptly moved to Harrisburg, leaving his wife behind to pack up their belongings and sell their house. (Doc. No. 36, ¶¶ 37-41.) Because of the need to relocate quickly, Plaintiffs sold their home in Georgia in a compressed time frame and under distressed conditions. (Curtis Bair Dep. at 244, 246, Doc. No. 55-3, Ex. 1); (Curtis Bair First Supp. Decl. ¶ 26., Doc. No. 55-4, Ex. 2). In addition to the circumstances surrounding their relocation, Plaintiffs claim that they turned down other employment offers in order accept employment at Appalachian Baking. (Curtis Bair First Supp. Decl. ¶ 23.1.) Plaintiffs have also introduced evidence which, if believed, would support a finding that Plaintiffs "c[a]me to the employment relation with bargaining strength greater than that of the usual employee." Darlington, 504 A.2d at 314; (E.g. Curtis Bair First Supp. Decl. ¶ 14) ("The Purcells . . . said that they would not be able to pursue the new venture without us. . . ."); (id. ¶ 20) (Curtis Bair had agreed to permit the Purcells' use of $70,000 of the equity in Peachtree Pretzel Time, Inc., a company in which Curtis Bair owned a 10% interest, in order to pay the franchise fee and related start-up costs for Appalachian Baking). In light of the evidence of Plaintiffs' relocation, the distressed sale of their home, their decision to forego other employment opportunities, and their arguably stronger bargaining power than the average employee, a jury could find that Plaintiffs provided "additional consideration," indicating that the parties intended to overcome the at-will presumption. Accordingly, Defendants' motion for summary judgment on Count II as to Appalachian Baking will be denied.

Lastly, Defendants argue that no cause of action exists in Count II against Francis and Norma Purcell in their individual capacities, generally or by virtue of their status as majority co-shareholders. Defendants persuasively contend that, if an employment agreement existed, it existed between Plaintiffs and Appalachian Baking, and to the extent that Francis and Norma Purcell acted, they acted under the role as corporate officials in order to secure employees for Appalachian Baking. (Doc. No. 33, at 16.) Plaintiffs counter that the Purcells "assumed a personal obligation in the contract itself" when they failed to disclose that they were acting on behalf of the corporation. (Doc. No. 55, at 19.) The Court finds this argument to be without merit. The record is replete with documentation that the Bairs were employed and paid by Appalachian Baking, not the Purcells. (Def. Exs. L & M, Doc. No. 32-3) (Curtis and Patrice Bair's W-2 and unemployment compensation notices listing Appalachian Baking as their employer); (Appalachian Baking's admissions, Pl. Ex. 17, at 1-2). No reasonable jury could find, based upon this record, that an employer/employee relationship existed directly between the Purcells and Bairs outside of the corporation. Thus, in order to recover from Norma or Francis Purcell individually, Plaintiffs would have to establish that piercing the corporate veil is warranted.

Plaintiffs contend that individual liability should attach to Norma and Francis Purcell because the circumstances of this case require that the corporate form -- and the protections that this form generally affords shareholders -- be disregarded. Plaintiffs argue that Appalachian Baking was so dominated and controlled by the Purcells, particularly Francis Purcell, that the corporation was not a separate legal entity; rather, it was a sham, a mere alter-ego of the majority shareholders. (Doc. No. 55, at 14-19.)

Pennsylvania generally recognizes that the corporate veil may be pierced "whenever it is necessary to avoid injustice." Rinck v. Rinck, 526 A.2d 1221, 1223 (Pa. Super. Ct. 1987). However, there is a strong presumption in Pennsylvania against piercing the corporate veil.

Lumax Indus., Inc. v. Aultman, 669 A.2d 893, 895 (Pa. 1994) (quoting Wedner v. Unemployment Board, 296 A.2d 792, 794 (Pa. 1972)). Although there is no definitive test for piercing the corporate veil under Pennsylvania law, courts are instructed to apply a totality-ofthe-circumstances test when determining whether to impose individual liability on a shareholder. First Realvest, Inc. v. Avery Builders, Inc., 600 A.2d 601, 604 (Pa. Super. Ct. 1991). In Ashley v. Ashley, 393 A.2d 637 (Pa. 1978), the Pennsylvania Supreme Court set forth the following principles to guide the determination of whether the corporate form should be disregarded and whether one individual or corporation should be deemed the alter-ego of another:

This legal fiction of a separate corporate entity was designed to serve convenience and justice, and will be disregarded whenever justice or public policy demand and where rights of innocent parties are not prejudiced nor the theory of the corporate entity rendered useless. We have said that whenever one in control of a corporation uses that control, or uses the corporate assets, to further his or ...

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