Rossi vs IH: (Update: Sep. 9 — Leonardo Responds to Defendants’ Motion for Judgments on the Pleadings)

Quote from Shane D.

The key here is that 28 Jan 2015 meeting where Penon laid out the protocol for Doral. Obviously, both walked away from that with different impressions as to what Doral was for. Rossi thought GPT, IH a commercial, R/D endeavor. If IH has no correspondence, or legally binding document supporting their version of the meeting, they would have left themselves exposed to this estoppel defense. And since they have not produced such a document yet, I think the judge will deny this Motion for Judgement.

First of all, it is quite possible that the Judge will deny the Motion. That is generic with motions to dismiss; that Darden hit 4/8 with the primary Motion to Dismiss was high. In the Motion for Count 1, the Judge hinted that if she knew that the "Six Cylinder Unit" was not just another name for 1 MW E-cat Plant, she might have granted dismissal. IH is taking her up on that. In response, Rossi is claiming estoppel again, ignoring the requirement for an agreement in writing -- which was in the Darden motion, though not underscored.

The question is whether or not sufficient fact is alleged in the Complaint to sustain the claim that Doral was a GPT. Rossi claims that the January 2015 meeting was such and so but has provided no evidence of that, no specific claim of what was said, and the meeting apparently set a measurement protocol. Rossi does not actually state that "Guaranteed Performance Test" or "ERV" were mentioned, much less that they were accepted. The factual core of the Rossi claim is that a measurement protocol was accepted. That this was a GPT is "Rossi says." Now, is that enough? In order to claim estoppel on this issue, my sense is that something more specific is required, and the Judge might require Rossi to provide it. If Rossi cannot show that there was an actual agreement to a "GPT," as distinct from an agreement to a measurement protocol, then the Complaint is toast and there is no sense in going on.

One of the arguments in legal advice out there is that Motions to Dismiss can cause a plaintiff to make their case stronger. I.e., might not be the best thing to do. The Judge may make a conditional ruling. Notice how this was done by the Magistrate with the Motion to Quash. Something like, "If JMP does not provide information on James A. Bass by such-and-such a date, the subpoena may be issued."

"If Plaintiff does not claim specific evidence of clear consent by Defendants to a Guaranteed Performance Test, whether in writing or otherwise, by such and such a date, as an amendment to the complaint, and other than the mere claim from plaintiff calling it a Guaranteed Performance Test in retrospect, Count I will be ordered dismissed."

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That leaves IH with their two strongest defenses; the customer was fake, and the test was rigged. Oddly, so far (case is early yet) Rossi, nor his lawyers seem the least bit concerned about the fake customer. Wonder why?

I have a suspicion that losing this case is part of Rossi's plan. Think about it!

The situation with the customer and the secrecy involved leads to great difficulty in convincing a jury that the test was fair and not fraudulent. IH can, from evidence we have already seen, establish that Rossi was deceptive in setting up the Doral installation. It will probably establish that the money paid to IH, if it was paid, by the customer, came from Rossi. This stinks, massively.

Obviously, if that money actually came from a real customer, actually using the power, it will have the opposite impact.

So why were the subpoenas to two banks and an accountant quashed (at Rossi motion)? The protocol and procedure and courtesy here is that if Darden wants to know where the money came from, he asks Rossi -- or Johnson, both, with interrogatories or mandated depositions. It is assumed that, as testimony under oath, they will not lie. If they do, that's a criminal offense. And, of course, those banks are not going to flush their account records down the drain.

I have some suspicion that Johnson had no idea what Rossi was up to.

Quote from Shane D.

The key here is that 28 Jan 2015 meeting where Penon laid out the protocol for Doral. Obviously, both walked away from that with different impressions as to what Doral was for. Rossi thought GPT, IH a commercial, R/D endeavor. If IH has no correspondence, or legally binding document supporting their version of the meeting, they would have left themselves exposed to this estoppel defense. And since they have not produced such a document yet, I think the judge will deny this Motion for Judgement

Going over what we have on that meeting:
From the Complaint:

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64. On or before August 13,2014, ROSSI and LEONARDO located a customer in
Miami, Florida, who agreed to allow its facility to be used for the Guaranteed Performance Test
and even agreed to pay IH up to One Thousand Dollars ($1,000.00) per day for the energy
produced by the E-Cat Unit during the Guaranteed Performance Test.

We have the agreement between IH and the "customer," executed August 13, 2014, as Exhibit 17. We also have the email in which Rossi previously proposed that installation, as Exhibit 16. Neither mention any "test." The mention in paragraph 64 of the Complaint, then, is a later description, not implied in the documents.

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65. Accordingly, on January 28,2015, the ERV prepared and submitted to the parties
a proposed test protocol for the Guaranteed Performance Test. After suggesting minor changes to
the test protocol, and clarifying other points, DARDEN on behalf of IH andlor IPH agreed to the
test protocol prior to the commencement of the Guaranteed Performance Test.

How was the "ERV" determined for this "test"? A full GPT protocol would include specific standards for determining satisfaction of the requirements of the Second Amendment. Further, an agreement to a GPT protocol, even, would not necessarily be an agreement to the commencement of the test. (For example, there would be conditions of the test, such as full access by IH.) All this would have been covered with a written agreement. Rossi's documents note that a written agreement to the commencement was required, but he never alleges it happened. Did the "ERV protocol" specifically claim that Penon was "ERV"? Did it describe the coming "test" as a "Guaranteed Performance Test"?

Given the central nature of this to the Rossi claims, the lack of allegation that documents exist, and specific claims about the content of the documents (such as attaching them as Exhibits) has to be puzzling, if Rossi has a real complaint. If he has evidence, he could have disposed of this issue back in April with one document exhibit.

He is complaining about legal costs being created by IH defensive motions, but the entire case he filed, if he doesn't have those documents or can establish by clear testimony, not his usual conclusory fluff, that there was consent, is a waste. It might survive a motion to dismiss, if the Judge decides that his claim of "Guaranteed Performance Test" is enough. But as discovery proceeds, the truth will become far more clear, and at trial, even more so. Unless something happened that Rossi has provide no evidence for, the ultimate conclusion is quite clear: there was no Guaranteed Performance Test, and, no, we do not disregard explicit requirements for signed documents unless justice absolutely requires it.

Rossi clearly set up the conditions for IH to think of Doral as a sale of power and a demonstration, not as a GPT. He was leading them down the rosy path, promising lots of money. I don't think they bought it at all, but they decided that confronting him was premature, maybe he would still show them how to make working devices. Once they confronted him, no, it would be impossible. Paranoid Rossi will go to any lengths.

i do think they did confront him. I don't know when. It might have been early on, explaining his frosty mail in July 2015. Reading the Terms Sheet, it did not allow repossession during the term. JMP had possession of the plant(s). It might have taken legal action to get them back. Meanwhile, was JMP paying (up to) $30,000 per month? (We do not know if IH actually invoiced them. I have stated, with my 20-20 hindsight, that I'd have issued those invoices even if I suspected the whole thing was a fraud. The money could always be refunded if there was a problem. $300,000 in hand is worth more than the nothing that they were staring at, perhaps.)