Industrial Heat Files Motion to Dismiss Rossi Lawsuit

https://en.wikipedia.org/wiki/On_the_Internet,_nobody_knows_you're_a_dog (fair use claimed here, see Wikipedia image for original license)

Quote from DNI

It seems to me that the second amendment isn't signed by Leonardo either.

Here is what happens. A user casually reads a document and reports what is in it inaccurately. Others then pick it up, often, and quote it as fact, or then add their own spin.

I could have done that. I almost did, here, because my first response here, I started to write, then saw I missed something about the document. (What I wrote before was not correct.)

Anyone can read the source, the signatures are on page https://animpossibleinvention.files.wordpress.com/2016/04/rossi_et_al_v_darden_et_al__flsdce-16-21199__0001-4.pdf</a> .<br>
I like to point to sources and then others sometimes complain that I write too much. I should just give my knee-jerk, summary opinions like everyone else, right?

The amendment begins with reciting the parties to the agreement:
1. Leonardo Corporation, a New Hampshire corporation
2. Andrea Rossi
3. Ampenergo, Inc, and Ohio corporation
4. Industrial Heat, LLC a Delaware limited liability company.

There were spaces for four signatures. In order, they were IH, Leonardo, Rossi, and Ampenergo.

I had thought that Rossi signed for Leonardo. I messed the extra signature space above that. He signed for himself. The Leonardo
signature line is blank, as is the Ampenergo signature.

Now, how did this happen? Rossi is meeting with Darden, say. He wants this amendment signed. After some checking, Darden signs, and Rossi signs the IH copy. We don't know what IH actually has, because, remember, the MTD is based entirely on what was in the Complaint, including the documents.

Now, suppose Rossi has a careful, competent attorney. Any attorney should spot this immediately. Filing the document this way would freeze it. The attorney might suggest that Rossi sign it, in both places, if he was authorized. (If he was not authorized, the amendment was truly invalid). I would want to ask an attorney about this, but the signatures are not dated.

Dated? What was the date? I looked. The agreement was not dated either. There is a blank for the day of October, 2013, to be filled in. Did Darden notice that, signing it? Maybe. If it were me, and I noticed that, I might sign if I did not care, at all, what day it was in October, 2013. Or I'd date it, which would be better, sometimes these things turn out to matter, later.

In any case, my own non-lawyer intuition is that signing it later, if Rossi was already authorized to act for Leonardo and Ampenergo, would not be a legal problem. But now that this has been filed, altering the document in any way would be risky. Did IH have an unsigned copy, though? However, Rossi made it easy for IH, by presenting that error in the filing.

There is another error in the complaint filing. At the end of the Agreement, there is a page that was not part of it, a compliance notice from JM Chemicals, Inc. to IH. This obviously was created much later, but is undated, and, my opinion, would be almost useless as such. Or was it from JM Chemical Products, Inc? There was a change to that, and it's initialed, but also not dated. A compliance notice ("claim") would be valid as of the date signed, and then could be relied on. No date, nothing to rely on!

In any case, to my knowledge, the inclusion of that page released to the public the identity of the "customer." The sale of electric power to that customer was alleged in the complaint, and this was the entire basis for claiming the jurisdiction of the Florida District Court. Yet the customer was not named in the complaint itself. It looks like IH etc are not contesting the claim of Florida jurisdiction, I believe that they formally "appeared."

Another person here asked about other filings from IH. Here is a page showing the case docket, also linked from Lewan's blog: https://www.pacermonitor.com/p…ossi_et_al_v_Darden_et_al

Waiver of Service was filed April 13, 2016 by all defendants. If anyone was going to contest jurisdiction, they might have filed a motion to quash service of the summons. Those are really fun. If there is any technical defect, you blow the plaintiff's case out of the water with no further ado. Of course, they might then do something else, but if there are statutory periods that must toll, it may start all over again.

They didn't go there. Instead, the Motion to Dismiss was filed, which requires legal "appearance." In a Motion to Quash, there you are in court, but saying, in effect, "I'm not here." I don't have to be here. Vaporize the summons.

So... that docket page doesn't show the MTD. It's an independent site and is delayed. The Court is a U.S. Court, the Florida Southern District Court. This is the judge assigned: https://en.wikipedia.org/wiki/Cecilia_Altonaga

Okay, will someone pay my way to go and watch the proceedings? Nice. Ahem. Setting that aside, as grossly politically incorrect ...

The direct court information is accessible through PACER. I registered a PACER account and then found that the Florida court information is down from 5 PM today (about two hours ago for us, until Monday, for maintenance. There is a fee for access through PACER, but it is ten cents per page, and does not apply if charges are less than $15 per quarter....

So this is why those independent sites exist. They obtain access and then provide it to the public, and can sell advertising, charge fees, etc. The page linked on Lewan's blog sells the documents, if you pay $49 per month, for $0.15 per page. If you pay them $99 per month, they reduce the fee to $0.10 per page, which might be what it costs them! Nice profit for automatic activity, eh?

However, I doubt that IH has filed anything else today. Motion to Dismiss makes all the other stuff they might file moot. That's the whole point of a Motion to Dismiss. Stop this nonsense.

Quote from Dewey Weaver

Now are you going to explain what you know about "leaks" and "12 inch wafers".

I'll explain what I know about leaks. Human beings leak. Some leak out of both ends, present company excepted, of course. At some point I may be revealing something I know about Steve Krivit. It's about time that someone turns those tables. But not today.

That information leaks means almost nothing, it proves nothing. That someone has inside information, for example, does not prove they are an insider. It may indicate that they know someone who knows someone with inside information, who talked. Because someone says something rarely known does not mean that whatever else they know or think they know is correct.

A stopped clock is right twice a day.

Quote from axil

IH gave Rossi a carte blanche approval in section 5 of the licence agreement for all changes without IH approval that Rossi is REQUIRED to make to pass the 1 MW test. This I do not understand.

The 12 inch wafer is Rossi's patented IP. If Rossi increases the power of this wafer from a configuration requiring 6 sub-units to an improved configuration requiring only 4 wafers housed in 4 units, this change is allowed to meet the 1 MW test requirement as required in the licence agreement.

This is what we do as human beings. We interpret what we see, and emphasize parts of it which we consider important and deprecate other parts. We especially remember what has some emotional impact, what is "meaningful" to us. This is actually necessary information filtering, to a degree, but ... it has effects that to rise above common thinking, we must recognize.

What did the agreement actually say? Let's start with the obvious: the word "carte blanche" wasn't in there. Here is the language:
The Agreement.

Quote

Each of Leonardo and Rossi will use their commercially reasonably best efforts to cause Guaranteed Performance to be achieved, including making repairs, adjustments and alterations to the Plant as needed to achieve Guaranteed Peformance.

On the face of it, this would generally be about ordinary repairs and adjustments. But "alterations" is included. What would that be about? Does that mean that he can substitute something radically different?

Back up. The context. Agreements will be interpreted in context, not just according to whatever meanings one might assign to the words. What is "the Plant"? The Agreement is actually quite clear. For the Guaranteed Performance test, it is the 1 MW E-CAT plant sold and delivered to IH in 2013. Rossi had provided, if he followed the Agreement, all the IP necessary to make and operate this plant. It is not some other plant, unless IH consents. It was not a moving target, it was specific.

In the second Amendment October (2013), a "six cylinder Hot Cat unit" was specified. The 400 days for the GPT was specified as beginning on a date "agreed to in writing between the Parties." Now, there was a date agreed to specified in writing in the original Agreement. It began the day after delivery. This was very odd, actually. However, if the plant was ready to go, this would not be a problem!

However, testing a 1 MW power plant is not so easy! Nevertheless, this is what Rossi and IH appear to have agreed to; but was there a date set in writing other than the original date (which would have expired in 2014)?

Rossi does not allege this written agreement in the Complaint, even though it is fundamental, as pointed out in the Motion to Dismiss.

In any case, a radical substitution of some new product for the original would be outside what was contemplated in the Agreement, that's my opinion. The Second Amendment (which IH is challenging based on lack of complete sign-off as required, but let's assume that is considered a mere formal defect and is set aside) specifies a particular unit. Was this different from what was delivered to IH in August, 2013? My guess is not. That second Amendment was shortly after delivery, October, 2013. This was about giving time to arrange the test, it appears reasonable on the face, but ... at that point, I would not think that it was contemplated that the test would not begin until February 19, 2015.

IH has not alleged that they did not consent in some way. At this point, they are only pointing out glaring facts about the Complaint, considered entirely within itself, that would allow it to be dismissed. They have only hinted at more problems. It is not their job to provide evidence that would support Rossi's case, should they have it (not yet, at least). All these things that we will imagine about fairness, etc., do not apply. This is the very beginning of a case.

Now, were I the judge here, I would look at the complaint and the response and I would think like this: these parties are mismatched. Rossi is or is represented by an idiot, or both. (Remember, this is what I imagine she might think, not what she would say. She would never say that!) IH is represented by competent, professional attorneys, presenting clear and legally substantiated arguments. And then she might bend over backwards to find a way to interpret all this as allowing the case to go ahead, because judges do care about justice. However, they also are obligated to follow law and procedure. What I'd expect is that she would give time for the plaintiffs to amend the complaint. That's about it.

It occurs to me to mention the Statute of Frauds. (So as not to confuse the unfamiliar, this is about making fraud more difficult, not about fraud itself.)

This was a contract to be performed in over a year. It must be in writing to be enforceable. I'm not an attorney, but I expect that the modification must be in writing. It could not merely be verbal. These little technical details could have cost Rossi $89 million or more. Hard lesson, I'd say. But as others have said, maybe he will pull a rabbit out of the hat.

Popcorn, anyone? :popcorn:

My lawyer friend's thought: Rossi and IH are in cahoots, to make Rossi look bad, so that competition will think, "Ah, this was all nonsense!" I don't think so, but I don't think it's impossible. There would be, so far, nothing illegal about it. :beer:

Quote from Abd Ul-Rahman Lomax

My lawyer friend's thought: Rossi and IH are in cahoots, to make Rossi look bad, so that competition will think, "Ah, this was all nonsense!" I don't think so, but I don't think it's impossible. There would be, so far, nothing illegal about it.

That's probably the only way Dewey's posting makes sense

Looking at the e-catworld comments, my comment about "nobody knows you are a dog" still stands, but people can tell that you don't know your butt from a loophole. There is Rage Against Lawyers, claims of legal malpractice because IH lawyers are protecting IH, and general naive loopiness. Anything worth noting? There are some writers pointing out the obvious, or not-so-obvious if you don't actually read the documents and the history. They are reading the documents! And then there are the others.

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By not paying the $89M, the contract has not been fulfilled. Therefore it is breached and can be declared void in it's entirety by a jury.

Total lack of understanding of contract law. There were people wishing that David French would comment. He has on that point. This is a collection issue. It doesn't void the contract unless the contract explicitly says it does. If the terms were fulfilled, then IH would owe Rossi $89 million. This is a matter of law, it would not go to a jury, I think. Juries try fact.

Ah, common education sucks.

Quote

Sanjeev

It all reads like an innocent defense with no counter accusations of
fraud or bad test, until you read the footnote#1. I completely ignored
it as its divided into two pages till I read the comments !
This is going to be a long battle.

Mats Lewan

Right. Expect several next steps.

Display More

Sanjeev: head screwed on straight. Mats: Maybe. If Rossi amends the complaint, this might go foward. As it is, I think the suit will evaporate rapidly with no other steps. Of course, then what? Rossi could possibly refile a proper complaint. Or IH could sue for return of the $11.5 million, and could claim fraud and triple damages.... Or ... it could be a stalemate, nothing happens and Rossi's licenses are clouded.

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So we should not get excited by the fact that "nothing about the eCat" is much involved in this response. The lawsuit was about a breech of contract. Their response was to try and show why the lawsuit should be dismissed based upon the lack of breech. It will be up to the judge whether IH prevails in this response.

This is basically correct; however, the Motion to Dismiss is entirely focused on showing that if every fact alleged in the complaint is true, the claims of the plaintiffs were not supported. I think the judge is likely to agree, but to allow the plaintiffs to amend, and then it might go forward in some way.

Same writer:

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The next step will be to have IH lawyers meet with Rossi lawyers and state something like "you are going to lose. You should settle now out of court and minimize the damage" (I am not saying that Rossi will lose, I am saying that is what the discussion will be) IH will pressure the Rossi camp to settle out of court. They are only interested in saving court expenses and not paying the $89 million. Perhaps getting some of the $11.5 million back. They could care less what we think on this blog as if they "won" or "lost".

If Rossi does not settle, then I believe they will bring in the big gun and not only defend their position, but counter sue for the $11.5 million back. Rossi better have good lawyers! In contract cases, moral "right or wrong" is not what the courts will decide on. It will be if the wording of the contract has been met to the letter.

Pretty much what I'd expect. It does depend on what they want. If the Rossi IP was worthless, yes. If it's valuable, maybe not. Crystal ball broken. Not enough information to know.

As is common when Ain't Lawyers Awful comes up, the litigation against MacDonalds for a customer scalded by their hot coffee is mentioned. Standard ignorant rant. See Wikipedia, it's a decent article.

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Also, where did Rossi's complaint allege fraud on IH's part? That I don't recall, and they say they are only answering points from the complaint, so I missed that part.

Edit: I also find it amusing they hired one of the best law firms around and this is what they get. Maybe a counter suit is still in the works, or a real defense, after this try.

Lazy. How about reading the complaint if you don't remember Rossi's claim of fraud? Count VI. Fraud and Deceit. So then Rossi claims, from that, triple damages. The action at this point was, as others point out there, perfect for the case at this point. The Motion does not address anything but the Complaint itself. Why defend against claims in an improper complaint? Yes. If the complaint is not dismissed, "real defense" will begin.

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I have not had a chance to read motion yet, but it is Contracts 101 that absence of a signature on an agreement does not invalidate the agreement, if the parties to it proceed and operate as if it was in effect. A signature is not a necessary element for a contract to be valid. I do have a JD degree, although I am not a practicing attorney.

The person is roughly correct. However, Rossi did not allege the elements that would establish the unsigned agreement as valid. Further, there is the statute of frauds to consider. So I would not be so sure about this. In any case, this is merely part of a Motion to Dismiss. The IH attorneys will put there, more or less, every flaw they can find in the Complaint. We don't know that the parties proceeded "as if it was in effect." The apparent acquiescence of IH to what Rossi was doing may have been under protest, for example. However, that would be outside the Complaint. This was simply an possible flaw. The Motion to Dismiss will not be shown to the jury, if the case proceeds. So many on e-cat world seem to have a thoroughly defective understanding of what happens in court. They think this will make IH "look bad," that they don't defend on the merits.

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I agree, its a weak argument, as the amendment text clearly says that all the parties need not sign.

That was a misreading. All parties must sign. However, they need not all sign on every copy, as long as collectively all have signed. Rossi does not establish this central fact in the Complaint. What's weird is that he didn't supply the signatures on his own copy! Had he done so, he'd have had a perfected agreement.