SAINT JUSTIN MARTYR :                      IN THE COURT OF COMMON PLEAS
HOUSE OF STUDIES, INC. :                      OF PIKE COUNTY
:
Plaintiffs :
:
v. :                      CIVIL ACTION LAW & EQUITY
:
SOCIETY OF ST. JOHN, as agent :                      JURY TRIAL DEMANDED
and representative of BISHOP :
JAMES C. TIMLIN and the :
DIOCESE OF SCRANTON, :
300 Wyoming Avenue :
Scranton, PA 18503 :
:
Defendant :                      NO. 2002-CIV-434

 

COMPLAINT

NOW COMES the Plaintiff, Saint Justin Martyr House of Studies, Inc., by and through undersigned counsel, and hereby complains of Defendant as follows:

I. PARTIES

1. Plaintiff, St. Justin Martyr House of Studies, Inc., is a corporation duly organized and existing under the laws of the Commonwealth of Pennsylvania, having its principal place of business located at 142 Market Road, Greeley, Pennsylvania. The sole purpose of the corporation is to establish the College of St. Justin Martyr.

2. Defendant, Society of St. John, an incorporated diocesan clerical association, is, and was at all times herein, an agent, servant and representative of Bishop James C. Timlin and the Diocese of Scranton, with the Society of St. John's business located at 702 Route 434, Shohola, Pennsylvania, and the Diocese of Scranton's business office located at 300 Wyoming Avenue, Scranton, Pennsylvania.

II. ALLEGATIONS

3. Beginning in 1998, prior to the incorporation of the Plaintiff, the Defendant, Society of St. John, conducted a major fund raising effort aimed at Catholic donors with the stated intent of creating a Catholic village and college to be located in Shohola, Pike County, Pennsylvania.

4. During these fund raising efforts, the Defendant, Society of St. John, specifically through its Superior General Father Carlos Urrutigoity, misrepresented to the potential donors the fact that a portion of the monies generated from the prospective donors would be utilized for a liberal arts college.

5. Various forms of advertising were utilized in attracting the prospective donors and it is believed, on information and belief, that the Society of St. John has raised over five million dollars.

6. Despite the fact that the Society represented to the potential donors the fact that a portion of the funds would be utilized for the creation of a liberal arts college, very little money was actually directed by the Society to the college project.

7. Since Plaintiff's incorporation on August 9, 2000, the Defendant, Society of St. John, continued fund raising under the guise that a portion of the monies generated would be utilized for the College of St. Justin Martyr.

III. COUNT ONE – INTERFERENCE WITH PROSPECTIVE

CONTRACTUAL RELATIONS

8. Paragraphs 1 through 7 are incorporated by reference as if fully set forth at length herein.

9. Subsequent to reports from August to October 2001 by the Plaintiff to the Defendant, the Most Reverend James C. Timlin, alleging financial misconduct and improper behavior on the part of members of the Defendant, Society of St. John, the Defendants, Society of St. John and Most Reverend James C. Timlin, Bishop of the Diocese of Scranton, did jointly reject in October 2001, after previously approving, the proposal of the Plaintiff to open the College of St. Justin Martyr in the Diocese of Scranton.

10. Subsequent to October 15, 2001, agents, servants and employees of the Society of St. John have contacted prospective donors by email and other forms of communication advising the prospective donors the College of St. Justin Martyr had been suppressed by the Diocese of Scranton. The Defendants intentionally and unlawfully solicited prospective donors asserting that the college project of the Plaintiff was one of their principal missions. These communications resulted in the repudiation of business for the College.

11. Defendants intentionally contacted and solicited prospective donors of the Plaintiff.

12. Furthermore, the Defendants have harmed the reputation of the Plaintiff through various communications suggesting, among other things, the Plaintiff had engaged in a "hostile takeover" of the Defendant's, Society of St. John's, college project and had no right to solicit funds.

13. Through such improper conduct, Defendants sought to induce the donors to disregard the efforts of the Plaintiff in establishing a Catholic college.

14. As a direct and proximate result of the unlawful interference, Plaintiff has and will suffer substantial financial injury and harm.

15. Such conduct constitutes intentional, improper, non-privileged interference with Plaintiff's business and its contractual relations with students and prospective donors.

WHEREFORE, Plaintiff seeks damages in excess of Seventy-five Thousand ($75,000.00) Dollars, plus interest and costs.

IV. COUNT TWO – INTENTIONAL MISREPRESENTATION

16. Paragraphs 1 through 15 are incorporated by reference as if fully set forth at length herein.

17. The actions of the Defendant, Society of St. John, specifically its Superior General, Father Urrutigoity, amounted to an intentional misrepresentation.

18. Father Urrutigoity and the Society of St. John consistently misrepresented to the Plaintiff all aspects of the Catholic college project as well as the financial condition of the Society.

19. The misrepresentations were material to the Plaintiff's efforts to establish a Catholic college.

20. The misrepresentations of the Defendant, Society of St. John, specifically Father Carlos Urrutigoity, its Superior General, were made falsely with the knowledge of its falsity or recklessness as to whether those representations were true or false.

21. Said misrepresentations were made with the intention of misleading donors into relying upon representations concerning their donation to the college project.

22. The misrepresentations were made by Defendant, Society of St. John, specifically through Father Carlos Urrutigoity, and the reliance upon these misrepresentations not knowing same to be intentional or false, directly impacted upon donations to the Plaintiff.

23. The loss of funds to the Plaintiff as a result of the intentional misrepresentations of the Defendant, Society of St. John, specifically through Father Carlos Urrutigoity, its Superior General, were the proximate causation of the damages to the Plaintiff.

WHEREFORE, Plaintiff demands a judgment against the Defendant, jointly and severally, in an amount in excess of Seventy-five Thousand ($75,000.00) Dollars, exclusive of interest and costs.

V. COUNT THREE – NEGLIGENT MISREPRESENTATION

24. Paragraphs 1 through 23 are incorporated by reference as if fully set forth at length herein.

25. The Plaintiff avers, upon information and belief, that the Society of St. John consistently misrepresented the facts concerning the college project in Shohola, Pennsylvania, under circumstances in which the Defendant, Society of St. John, specifically its Superior General, Father Carlos Urrutigoity, should have known of its falsity.

26. The representatives above referenced were made to donors of the Plaintiff with an intent to induce them to donate significant sums of money to the Society concerning the Catholic college project in Shohola, Pike County, Pennsylvania.

27. The misrepresentations set forth above resulted in injury to the Plaintiff, who never received a portion of the funds and who acted in justifiable reliance upon the misrepresentations made by the Society.

WHEREFORE, Plaintiff demands judgment against the Defendant, jointly and severally, in an amount in excess of Seventy-five Thousand ($75,000.00) Dollars, exclusive of interest and costs.

VI. COUNT FOUR - AGENCY

28. Paragraphs 1 through 27 are incorporated by reference as if fully set forth at length herein.

29. At all times material herein, the Society of St. John was the agent of the Diocese of Scranton whose recognition of the Society established the Society as a public diocesan clerical association of the Christian Faithful.

30. At all times material herein, the members of the Society of St. John acted as agents for the Diocese of Scranton.

31. As a direct and proximate result of the agency alleged, Bishop James C. Timlin and the Diocese of Scranton are liable for the acts, omissions, and contractual obligations of the Society of St. John.

WHEREFORE, the Plaintiff, Saint Justin Martyr House of Studies, Inc., respectfully requests this Court to:

    1. Enter judgment in favor of the Plaintiff for injuries, losses and damages determined to have been sustained by the Plaintiff as a result of the Society's breaches described herein, plus costs, together with interest.
    2. Punitive damages; and
    3. An award of costs and attorney's fees.

Plaintiff demands a jury trial on all issues raised herein.

VII. COUNT FIVE – EQUITABLE ACCOUNTING

32. Paragraphs 1 through 31 are incorporated by reference as if fully set forth at length herein.

33. At all times pertinent to this action, the Defendants were a fiduciary of and stood in a confidential relationship with the Plaintiff, in that the Defendants were responsible for collecting the donations, paying the obligations of the venture from the donations and otherwise generally overseeing and managing the finances for the college venture and project.

34. It is believed, and therefore averred, that Defendant, Society of St. John, received proceeds from the prospective donors in an amount in excess of five million dollars.

35. Although the college project was never completed, Defendant, in violation of its fiduciary and confidential relationship and in violation of its obligations to the Plaintiff, has defrauded, and continues to defraud, the Plaintiff as follows:

    1. Defendant, Society of St. John, has failed, and continues to fail, to place the proceeds in a special bank account in the name of the Plaintiff and has improperly commingled the proceeds of the Plaintiff with its own funds;
    2. Defendant has failed, and continues to fail, to provide to the Plaintiff its pro rata share of the monies donated;
    3. Plaintiff believes, and therefore avers, that Defendant, Society of St. John, has been and continues to improperly spend, waste, disburse and otherwise utilize the proceeds for its own personal use and benefit rather than for the use and benefit of the college project;
    4. Defendant, Society of St. John, has improperly borrowed additional funds under the guise that the funds would be utilized for the College project without Plaintiff's authorization or consent;
    5. Defendant, as aforesaid, failed and refused, and continues to fail and refuse, to provide the funds for the college project; and
    6. Plaintiff does not have an adequate remedy at law.

WHEREFORE, Plaintiff demands that an Order be entered:

    1. Directing Defendant to account to Plaintiff for all proceeds received by it;
    2. Enjoining the Defendant, Society of St. John, from spending or utilizing any of the proceeds for its own personal use and/or benefit, or for any other person or entity other than the college project, and then only upon the express written approval of the Plaintiff or further Order of this Court;
    3. Directing Defendant to place into a special escrow bank account in the names of both parties, an amount equal to the one-third (1/3) of the proceeds received by the Defendant;
    4. Directing Defendant to conduct an accounting of all monies generated by the Society from prospective donors where a portion of said money was to be raised for the sake of the college project so that the Plaintiff's respective share in the net amount of the proceeds may be determined;
    5. Directing Defendant to satisfy any remaining valid obligations of the college project presently outstanding;
    6. Directing Defendant to pay over to Plaintiff one-third of the total amount of the proceeds generated through the fund raising efforts, plus interest, attorney's fees and entering judgment in favor of the Plaintiff and against the Defendant in such amounts;
    7. Enjoining the Defendant, Society of St. John, its officers, agents, servants and employees from further borrowing, paying or otherwise transacting any business or transactions in the name of the College on its behalf or in the name or on behalf of any other venture which pertains or relates in any way to the Plaintiff, unless upon further written Order of this Court, or upon express written approval from the Plaintiff; and
    8. Granting such other and further relief as this Court may deem appropriate.

Respectfully submitted,

DOUGLAS A. CLARK, ESQUIRE

410 Jefferson Ave.

Scranton, Pennsylvania 18510

(570) 961-1414

Attorney for Plaintiff

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