Industrial Heat’s Motion to Dismiss Denied in Part, Granted in Part

    Quote from Shane D.

    The same elements [of this case] that made us shameless addicts, would appeal to them [the court] the same way I would think.


    You're the judge, or a clerk, sitting in an office somewhere in a courthouse in Florida, and this case is dropped in your inbox. It might as well be about a dispute about a flying saucer or flux-capacitor factory. That would have been entertainment for the day. But the sums of money involved and the stature of the defendants would make the case fascinating to someone coming upon the story without much context. It is possible that they might have a hard time not smirking when they think about the case.

    Quote from frankwtu

    Maybe you could provide evidence Mary???

    Mary doesn't have an evidence on that level. IH may have. We have rumors, which are not evidence. There may be a counterclaim for fraud from IH. If so, it will indicate they have sufficient evidence. Rossi has claimed fraud with basically no evidence beyond his memory of a conversation four years ago, in which he was allegedly told things that were contrary to the Agreement and common sense. The judge decided that his word was enough to allow that claim to survive, but ... I've been told that a fraud claim is very, very difficult in a civil case like this, especially when the real issue is a collection action.


    So, you don't make your house payment, so the lender sues you not only for the payment and/or possession of the property, but for fraud, because you never intended to pay, yet you assured them you would have no problem because your Rich Uncle would cover it. And, by the way, they sue your Uncle too. And this all happens four years later, after you have made substantial payments.

    Quote from Wyttenbach

    This was to much for abd!


    He buzzed all his sherpas to vote you down... Just interesting to see how abd's think tank handles the matter...


    I had not seen this and so I certainly did not "buzz" anyone. My "think tank?" Hey, I like that. Who are these people?


    Let's take a look.



    Court jester? Cool!!! The Court Jester was the only one who could tell the King the truth. It was a position of danger, to be sure, and required high skill.


    Now, the voting, as of now:
    Likes


    Sifferkoll, Wyttenback and Walker, three trolls or worse, zero surprise. Hermes is often right with them.
    Dislikes:


    None were "buzzed." This was natural response, just as I doubt that, say, Keieueue contacted anyone to get them to vote.


    Jed Rothwell often upvotes my comments (and I his), though we also often disagree on this or that.


    Mary Yugo, thanks.


    I don't really know the others.


    This vote was not really about me, it was about Keieueue. There is a barrage of pure ad-hominem, gratuitous attack on lenr-forum.com. It makes the site less useful.


    While we are a bit off-topic here, Sifferkoll may have a conflict of interest with regard to Rossi or affiliated companies. Since he has been so active accusing people -- falsely -- of being on the IH or "APCO" payroll, I wonder if he cares to disclose it.

    Quote from Abdel Ramen Lameox

    Court jester? Cool!!! The Court Jester was the only one who could tell the King the truth. It was a position of danger, to be sure, and required high skill.


    Some kingdoms are rotten, surely a man of your knowledge knows this, cycles and all that stuff... wonder what purpose serves a court buffoon when his king is a corrupt overweight uncaring slob watching his realm crumble... maybe provide him entertainment for his last days? or try to hang to fleeting domination, by having his aides spreading propaganda?
    It would seem congruent with the situation of "non-pathological, dogmatic science" at the moment, with all this incoming groundbreaking tech which requires to rethink theoretical foundations; just look at what guys like "cam" write, trying to stay safe in their blanket denials.
    Also think of the impending shitstorm that will break when it is widely known that there has been technology suppression through character assassination, threats, harassment, or even physical assassination. Plebs are gonna be mad!



    Quote from Abdel Ramen Lameox

    There is a barrage of pure ad-hominem, gratuitous attack on lenr-forum.com. It makes the site less useful.


    Oh my you poor little thing, how could anyone ever want to have a jab at such a proper, informative and helpful user.
    You just wasted half a page with your regular quote-and-drivel, it sure does make the site very useful -for your bank account maybe?-


    But hey, that's already two times I addressed you this week, I should be careful not to look too deep into the abyss, as it's looking back at me.
    Also you will drag me down to your level and beat me through the sheer experience you've developed through filibustering, dishonesty, lying and being a total nuisance.

    Quote from Abd Ul-Rahman Lomax

    I had not seen this and so I certainly did not "buzz" anyone.


    You don't know the identity of THhuxly..? I will not tell... and of the other first three rare guests.. that down-voted K.? three others are new ones since some hours...


    Sorry that I miss spelled (think-) spin-tank Your affiliated Institute. If You need likes, then that of Your children have far more weight...


    Trolls are persons (originally ghosts) which nowadays promote external interests and may directly or indirectly earn money of their acting... I guess this matches Your (or Siffis) position much better than mine...

    Frank may wish to correct the spelling in his headline, it should read: Motion to Dismiss Ruling - Summary
    Or maybe "Order" would be better. That's what it calls itself.


    I commended Frank on writing this, though, as I wrote, it was a bit thin. So here I will flesh it out. This necessarily becomes long. Those who want instant summaries already have them. The Order itself is 25 pages.


    Quote from frankwtu

    Its a good read and I recommend it to everyone otherwise there will be much cherry picking.

    And misunderstanding. For example, Frank has already commented elsewhere that what the judge wrote showed she must have read the ERV report. I responded there. Judge ALTONAGA quotes ERV reports in her ‘background’ summary.


    The Order begins with a recital of background, and that recital is sourced to the documents filed by Rossi. It assumes that everything in them is true, excepting conclusory statements, perhaps. As well, some may think that a motion to dismiss a count based on certain arguments being rejected as to dismissal, means that the arguments are dismissed. No. It is only that the judge decided that Rossi should have a chance to establish contrary fact. In at least one case, what she assumed from Rossi is preposterous when we know the underlying facts. But that was her job. Assume truth. By the way, this is a very useful practice in general. Just don't get stuck with it.


    Quote

    This is my personal understanding of the ruling which must be read in full on the link to gain a full understanding.


    A. Count I - ALLOWED Breach of Contract for Non-PaymentRuling: Regarding Defendants’ “six-cylinder” argument, there is insufficient information in the record to determine whether the six-cylinder unit is simply another name for the E-Cat Unit. Accordingly, the Court will allow discovery to proceed on this matter before ruling. Thus, the Court declines to dismiss Count I.

    From the Order:

    Construing the facts in the light most favorable to Plaintiffs, the Court finds the Second
    Amendment is valid despite the fact Leonardo, AmpEnergo, and IPH did not sign it.
    Importantly, Defendants’ conduct before and after the signing parties executed the Second
    Amendment indicates Defendants’ assent to the amendment’s provisions.


    In other words, she asserted estoppel. i.e, that behavior -- as asserted by Rossi! -- signified acceptance. I expected that, instead, she would allow the Plaintiff to amend, but this was proceduraly simpler. Depending on facts not known to me, defendants might still claim a failure, i.e., suppose that Rossi's account of the events is incomplete and biased. Suppose that IH formally objected, and refused to sign the necessary document, but told Rossi that they would otherwise coooperate but would not be bound by the result of the test. I have no idea if they did that, at that point. They were still operating on a hope that Rossi would show them how to make devices that worked. So they would not have wanted to set him off. This, then, created defacto consent, my opinion.


    Quote

    B. Count II - DISMISSED: Breach of Contract for Exceeding the Scope of the License The Court agrees. A plain reading of the License Agreement reveals the agreement does not refer, even generally, to whether Plaintiffs can apply for a patent based on E-Cat IP or tell others they own E-Cat IP. C.f. Bayer Healthcare LLC v. Gen-Probe Inc., No. CIVA Case 1:16-cv-21199-CMA Document 24 Entered on FLSD Docket 07/19/2016 Page 9 of 25. 05-12084-RCL, 2006 WL 6499322, at *5–6 (D. Mass. July 26, 2006) (declining to dismiss breach-of-contract claim connected to the plaintiff’s patent infringement claim where the contract specifically limited the rights of both parties to the “patent rights or other intellectual property rights of the other party for any use or application other than those expressly and specifically granted by the Agreement.”). Accordingly, dismissal of Count II is warranted.

    Count II was fluff, patently contrary to the Agreement itself. And claiming that some action not prohibited in the Agreement was a violation of the Agreement would be fluff as well. The judge notes that if there were some claim here, it would be a patent infringement claim, and no actual infringement is claimed, a patent application not being an infringement.

    Quote


    C. Count III - ALLOWED: Unjust Enrichment In essence, Plaintiffs may not have a cause of action for breach-of-contract pursuant to the License Agreement if it is determined they did not fulfill conditions precedent to fulfillment of the contract. Accordingly, dismissal of Plaintiffs’ unjust enrichment claim is premature. Until an express contract is proven, a motion to dismiss a claim for unjust enrichment on these grounds is premature.”

    This was narrow, on technical grounds. Suppose the Agreement is found invalid. If the Agreement is valid, it precludes a claim for unjust enrichment (since the Agreement covers it.) However, it is quite possible that IH will accept that the Agreement was valid, and that even seems likely. In that case, IH could move Summary Judgment on this Count, and I assume it would be granted. It did not occur to me that the Agreement might not be valid, because I know the behavior of the parties, and that they are both claiming it is valid (I expect). She doesn't. So this was one of my three erroneous predictions.

    Quote

    D. Count IV - ALLOWED: Misappropriation of Trade Secrets(1) plaintiff conferred a benefit on the defendant; (2) defendant voluntarily accepts and retains the benefit conferred; and (3) the circumstances are such that it would be inequitable for the defendant to retain the benefit without paying the value thereof to the plaintiff.”)) Court must construe allegations in the light most favorable to Plaintiffs. A party who uses improper means to acquire a trade secret and then “disclos[es] or use ” this trade secret without the owner’s consent misappropriates the trade secret under the FUTSA. Taking these allegations as true, it is plausible Defendants’ disclosure of the E-Cat IP to Plaintiffs’ third-party competitors may have constituted trade secret misappropriation. Accordingly, dismissal of Count IV is unwarranted at this time.

    Here I was thinking about actual disclosures to possible licensees. However, what if IH had disclosed secrets to pure competitors, to harm Rossi? She is allowing that. I would have required there to be a specific basis for the claim, a specific allegation. Still, she is clearly bending over backwards to do what she wrote, to construe allegations in the light most favorable to Plaintiffs. Again, IH can probably dispose of this at trial, unless Rossi has some sort of surprise information. Just because she accepts the Count at this time does not mean that she would not accept a Motion for Summary Judgement after there is an Answer and response from Plaintiff, or later, after discovery.


    This is the first four counts. I will cover the remainder separately. But one more detail:


    Quote

    PS: Sorry, I cant get rid of the line through, its all relevant.

    Frank did follow the instructions I provided. The strikeout is gone. It is easy to sometimes overlook the obvious. I'm 72. Happens to me all the time.

    Abd Ul-Rahman Lomax


    Quote from Abd Ul-Rahman Lomax

    Frank did follow the instructions I provided. The strikeout is gone. It is easy to sometimes overlook the obvious. I'm 72. Happens to me all the time.


    I did know how to do this I tried it before you mentioned it but for some reason it didn't work for me, however, I am grateful to Rends who did the job for me, thanks.


    We have a saying to ASSUME makes an ASS out of U and ME, so perhaps we are better advised to stick to the facts.


    Best regards
    Frank

    Frank, I said "I don't know how they will prove fraud" and you answered by asking me for evidence? Isn't "I don't know" clear enough? I am not in on IH's thinking! Or what facts they have or think they have. I could prove fraud if I was Rossi's client but that doesn't speak for IH. The evidence I would use would be test data from a proper experiment with an ecat or several. And then I would contrast that with all the lying claims (robotic factories, multiple non-existent customers, etc. etc.) that Rossi made.

    Continuing my extensions of Frank's summary of the Order:


    Quote from frankwtu

    E. Count V - DISMISSED: Civil ConspiracyComplaint must contain accusations which are sufficient to put the Defendants on notice as to how the actions of individual Defendants were at odds with rather than on behalf of, the corporation, to the point where the individuals’ interests can be said to be separable and distinct from the corporation’s.” (alterations added; internal citations omitted)). Accordingly, the intra-corporate conspiracy doctrine bars Count V as presently pled.

    To decide this, the judge relied on Rossi's claim:


    Cherokee entirely owns and funds IH, one of its holding companies. (See id.¶¶ 41–43).

    In fact, Rossi did not claim that Cherokee entirely owned IH. Rather, he claimed that Darden told him that. However, the judge apparently decided to assume this, and if this were true, then Officers of a corporation cannot conspire with the corporation, they are considered as a single actor. However, even without that incorrect assumption, the argument would still apply as to Industrial Heat vis-a-vis Darden and Vaughn. So even without that incorrect assumption, the dismissal would stand.


    Quote

    F. Count VI - ALLOWED: Fraud and DeceitReading the facts in the light most favorable to Plaintiffs, the Court finds Plaintiffs adequately plead a claim for fraudulent inducement. The cases cited by Defendants do not address situations, such as here, where several Defendants did not sign the contract, but nonetheless: (1) participated in fraudulently inducing Plaintiffs to sign the contract; and (2) owned or were otherwise substantially related to the Defendants who did sign the contract. (See id.). Due to the particular facts of the instant case, dismissal of the non-signing Defendants is not warranted.

    Note item 2: The judge assumes that Cherokee Partners owned IH. There is, in fact, nothing alleged connecting Cherokee to the Agreement other than Rossi's statement. IH was not funded by Cherokee, but separately, and Cherokee had and has no ownership interest in IH, and the only relationship is a coincidence of officers. I'd have been tougher on the plaintiff here, but this will fail quickly, I predict. It is possible that Cherokee will appeal, because there is nothing specific *about Cherokee itself* in the Complaint other than the signing taking place in Cherokee's office, whereas the Agreement was not with Cherokee at all. If Darden and Vaughn did, in fact, mislead Rossi -- which is going to be difficult to prove even if true, and it may well not be true at all -- there could be a case for fraud and deceit against them, though it's thin. But not against Cherokee, as Darden and Vaughn took care to keep Cherokee out of it. Meeting in the office is simply not enough. If I were making a deal with a corporation, I'd want an officer's signature with the claim they were signing for the corporation. Reliance on verbal assurances otherwise, even if true, should be barred by the statute of frauds and by the Entire Agreement clause in the Agreement.


    G. Count VII - DISMISSED: Constructive and Equitable Fraud A confidential or fiduciary relationship exists where “confidence is reposed by one party and a trust is accepted by the other, or where confidence has been acquired and abused.” The factual allegations do not show the parties entered into a confidential or fiduciary relationship to support a constructive or equitable fraud claim. The absence of a fiduciary or confidential relationship compels dismissal of Count VII.[/quote]This was quite a stretch by Rossi's attorney.


    Quote

    H. Count VIII - DISMISSED: Patent Infringement[Filing a patent application] is not the making, using, offering to sell, selling, or importing of an invention. It is the act of approaching an agency of the government in order to obtain a limited privilege and to fulfill a public goal of making knowledge of an invention available to the public. It is not commercializing an invention, which requires introducing an invention into commerce, or making preparations to do so. ……….. Accordingly, Count VIII is dismissed.

    Yes, this was one of the first comments I read by an attorney on the complaint. The claim was preposterous.


    With a formatting error, Frank had the following as part of the paragraph above.


    Quote

    I. Grouping Defendants Together in Several Claims….(collective references to defendants and allegations of fraud did not violate Rule 9(b) where complaint alleged sufficient facts and enough specific allegations as to separate defendants). Accordingly, the Court will not dismiss any claims on this basis.

    I was a bit surprised by this, but I'm not motivated to go over it. This will come out in the wash.


    Quote

    Conclusion1. Counts II, V, VII, and VIII are DISMISSED without prejudice.2. All other counts remain intact.

    Just to emphasise what seems to be missed. The Order does not decide that arguments presented in the Motion to Dismiss are necessarily incorrect or legally unjustified, but that more evidence would be needed. Some Counts might be dismissed later, after the Answer and reply to it are filed, under Motions for Summary Judgment.

    Quote from "pissed off Abd"

    Sifferkoll may have a conflict of interest with regard to Rossi


    I've been pretty transperent that I have an interest in Rossi building a factory in Sweden.

    Mary


    Quote from Mary Yugo

    Frank, I said "I don't know how they will prove fraud" and you answered by asking me for evidence? Isn't "I don't know" clear enough?


    So when you call Rossi a 'fraud' you haven't a clue why you just said that it just came to you in a flash.


    Well we sort of had a clue this was the case anyway, thanks for the confirmation.


    Best regards
    Frank

    • Official Post
    Quote from Wyttenbach

    IH is an office within Cherokee <--- we call this inside... Or more clear: The letterbox of IH is managed by Cherokee!


    This kind of separation is known in banking as a 'Chinese Wall' - in the banking case the alleged division between trading activities and the safeguarding/investment of client funds. We all know how permeable that was.

    Quote from Wyttenbach

    IH is an office within Cherokee <--- we call this inside... Or more clear: The letterbox of IH is managed by Cherokee!

    So if I have a problem with a business that has a post office box, I should sue the U.S. Postal Service?


    Yes, there is a relationship, an obvious one, but is it one of control? And what we are describing here are legalities and legal realities. Coincidence of officers is not enough. Officers are like attorneys. If two clients share the same attorney, can you sue one based on the actions of the other? Or if the attorney commits some tort, can you sue the clients?


    Corporations are called "limited liability" because they are designed to compartmentalize liability. Cherokee is best understood as a collection of partners, "limited partners." That means "limited liability." The partners are not responsible for the possible misbehavior of the officers or the company -- unless their participation, more than by investing, can be shown. IH Holdings International also has Darden as a Director and as CEO. IHHI may have as much as $50 million in assets. IHHI actually appears to own IH. Can Rossi go after IHHI on this basis?


    No. And Woodford, which tossed in the $50 million, might be a tad upset. Darden is an officer of many limited partnerships, but they are all distinct entities, with different investors (i.e., owners). He may have "personal influence," I'm sure he does, but ... that is not control, legally, because with each partnership, he is responsible as an officer to the owners. As an officer of Cherokee, he is responsible to the Cherokee investors, and they have the power to remove him. And they could sue him for malfeasance.


    He can't just spend Cherokee money or commit Cherokee to some Agreement without going through the company approval process.


    Cherokee does start many projects, by creating limited partnerships and then becoming one of the partners, and the article from Fortune, as I recall, says their typical investment is $25 million. But they did not do this with IH. IH was formed independently, by Darden and Vaughn and others. It is IH on the hook for required payments, if they are due. Not Cherokee, and that Rossi claim doesn't have a snowball's chance in hell, once more facts are in the record, and only was left by the judge because Rossi asserted it, and "IH gets mail at the Cherokee office" flat is nowhere near the evidence that would be needed.


    Money. Follow the money.

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