Rossi v. Darden developments - Part 1

  • There are many scattered threads with news and commentary about the lawsuit, Rossi v. Darden. This thread is created to hold news and commentary on the case, specifically. I will edit this post, as I have time, to link to other relevant threads, and will add news about the case here. If anyone desires extensive discussion, a new thread may be created and linked from here.


    This is not systematic, just adding links as I notice them:


    Rossi vs IH: (Update: Sep. 9 20– James A. Bass now a Third Party in IH’s Counter Complaint)
    Leonardo's Motion to Dismiss

  • Document 52:


    I had expected this would appear and wondered why it had not.


    Annesser was working for Silver Law Group, http://silverlawgroup.com/john-annesser/ when Rossi v. Darden was filed.
    Patricia Silver was the mainstay of the firm, with high experience. http://silverlawgroup.com/patricia-silver/


    She would never, ever, say anything about the case, but my guess is that when she finally looked at it, her reaction was "get me out of here!" If she advised Rossi, it may have been advice he didn't like.


    Her name was on the initial filing, but that work was shoddy


    This is all speculation, of course. How involved the new lawyers are is unclear, Chaiken and Evans did appear at the discovery hearing before the Magistrate. Annesser has still written almost everything. We may never know what actually happened, unless, say, Rossi sues his lawyers.


    (I edited this to remove speculation about whether or not Annesser had actually left the Silver Law Group. I forgot that I'd seen the linked-in page in August, confirming that Silver Law Group was Annessers' former employer. The speculation here that Rossi made the change to PBYA because of their technology expertise would not explain why Annesser went there. I think it's the other way around. Annesser moved and Rossi simply kept his attorney. But this is speculation. So far, Annesser is doing almost all the work. And I remain unimpressed. Two and a half pages of legal arguments on fluff? I.e., the violation of the tax provisions of the Agreement, trivial to answer in a couple of sentences without a pile of authorities. In the end, what IH was doing with that -- and certain other claims -- is establishing a pattern of Rossi sloppiness about keeping agreements. Technical expertise is probably largely moot in this case, almost all the issues are legal.)

  • It is my understanding that more than one person (who told me by email) has written the Silver Law firm and has apprised them fully about Rossi's past criminal record. The emails also included concise explanations about why Rossi could not possibly be telling the truth about the ecat and that all ecats almost certainly did not work. Maybe they did some additional checking on their own and realized the whole case was a giant turkey that was going to turn around and bite them.

  • From ECW:


    Quote

    LuFong: Looks more like Rossi's lawyers (Annesser, Chaiken) changed law firms from The Silver Law Group to PERLMAN, BAJANDAS, YEVOLI & ALBRIGHT, P.L. but maybe this also may amount to a change in law firms as well



    Quote

    Ged: Seems you hit it smack dab in the nose https://www.linkedin.com/in/john-annesser-esq-8b13b013 changed groups in August according to his profile (looks like a jump up in his career too). Neither firm has updated their websites yet though.

  • List of posts in this series <--link


    Filed Friday, September 23, 2016. Newvortex filename is 0054.0_Rossi_Motion_to_Strike.pdf


    The full title is

    Quote

    PLAINTIFFS’ MOTION TO STRIKE IN PART DEFENDANTS’ SECOND AMENDED ANSWER, AFFIRMATIVE DEFENSES, COUNTERCLAIMS AND THIRD PARTY CLAIMS, OR IN THE ALTERNATIVE, MOTION FOR A MORE DEFINITE STATEMENT


    Plaintiffs, Andrea Rossi and Leonardo Corporation (“Plaintiffs”), hereby move pursuant to Federal Rules of Civil Procedure 8, 12(f) and Local Rule 7.1 for an order striking Defendants’ Second Amended Affirmative Defenses 1, 2, 3, 4, 6, 7, 9 and 10, and Paragraphs 126-133 of Count II of Defendants Second Amended Counterclaim titled “Failure to Pay Taxes” [DE: 50]. In the alternative, Defendants move pursuant to Federal Rule of Civil Procedure 12(e) and Local Rule 7.1 for a more definite statement of the affirmative defenses.


    These are my notes.


    To prepare for this, I read https://en.wikipedia.org/wiki/Affirmative_defense

    Quote

    An affirmative defense to a civil lawsuit or criminal charge is a fact or set of facts other than those alleged by the plaintiff or prosecutor which, if proven by the defendant, defeats or mitigates the legal consequences of the defendant's otherwise unlawful conduct. In civil lawsuits, affirmative defenses include the statute of limitations, the statute of frauds, waiver, and other affirmative defenses such as those listed in Rule 8 (c) of the Federal Rules of Civil Procedure. In criminal prosecutions, examples of affirmative defenses are self defense,[1] insanity, and the statute of limitations.


    Annesser recites legal standards:

    Quote

    An affirmative defense may be stricken if it is insufficient as a matter of law. .... A legally
    sufficient affirmative defense ... gives “fair notice of the defense” and “the grounds upon which it rests.”


    “While [a party] need not provide detailed factual allegations, they must provide more than bare-bones conclusions. [A party] should not be left to discover the bare minimum facts constituting a defense until discovery. “[A] motion to strike an affirmative defense is typically denied unless the defense (1) has no possible relation to the controversy, (2) may cause prejudice to one of the parties, or (3) fails to satisfy the general pleading requirements of Rule 8.


    https://www.law.cornell.edu/rules/frcp/rule_8


    Quote

    “Under this standard, an affirmative defense that merely offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do.”... Instead, a defense would have to contain enough factual matter to “raise a right to relief above the speculative level.” Id. (citation omitted). Moreover, an affirmative defense is established only when ‘a defendant admits the essential facts of the complaint and sets up other facts in justification or avoidance.’”


    On the last point, https://casetext.com/case/sparta-ins-co-v-colareta is cited.


    Quote

    B. Standard to Strike Other Immaterial Impertinent or Scandalous Matters.
    ... “The purpose of a motion to strike is to clean up the pleadings, streamline litigation, and avoid unnecessary forays into immaterial matters.”


    “The Court enjoys broad discretion in determining whether to grant or deny a motion to strike.”


    Notwithstanding, “a court will not exercise its discretion under the rule to strike a pleading unless the matter sought to be omitted has no possible relationship to the controversy, may confuse the issues, or otherwise prejudice a party.”


    Annesser then moves

    Quote

    ... to strike the Defendants’ Affirmative Defenses number 1, 2, 3, 4, 6, 7, 9 and 10 ...


    Notice that 5 and 8 are not included.
    From the Defendant's Second Amended Answer etc.:

    Quote

    5. Plaintiffs’ claims are barred, in whole or in part, as a result of Plaintiffs’ antecedent breaches of contract. For example, Plaintiffs breached the License Agreement, prior to the breaches of contract alleged by Plaintiffs in the Complaint, by, inter alia, improperly disclosing the E-Cat IP and the terms of the License Agreement to unauthorized third parties, failing to assign certain patents and/or patent applications to IPH, failing to inform or consult with Industrial Heat and IPH on the existence of certain patent applications and failing to fully prosecute patent applications related to the E-Cat IP, failing to report and pay taxes on payments/revenue made under the License Agreement, and failing to keep the original Leonardo entity active. See Counterclaims and Third-Party Claims ¶¶ 11, 39-46, 64-83, 93-133 infra.


    This is actually core, prior breach by Leonardo, but the specific violations are not the most egregious (which would be failure to transfer working technology to IH as agreed.) Rossi also breached the Terms Sheet agreement by excluding the IH engineer, and this action, had the test been a GPT, would have damaged its reliability.


    Quote

    8. Plaintiffs’ claims are barred, in whole or in part, because any injury that Plaintiffs may have suffered was proximately caused or contributed to by the acts or omissions of Plaintiffs and/or third parties other than Defendants. As reflected in Paragraphs 64, 71, 95, 101, 104 supra, Paragraphs 39-40, 69-76, 100-108 infra, and Ninth Defense infra, any purported “injury” to Plaintiffs relating to any alleged disclosure of the E-Cat IP or any “unjust enrichment”-type benefit allegedly conferred on Industrial Heat or IPH was a product of (1) their agreeing in the License Agreement to provide the E-Cat IP to Industrial Heat without any limitation on Industrial Heat’s ability and right to disclose the E-Cat IP to anyone it chose, (2) their relinquishing in the License Agreement any claim to any prior or collateral agreement not reflected in the License Agreement and the written documents referenced therein, (3) their disclosures in patent applications and otherwise, and (4) their decision to conduct operations in Florida under the fraudulently induced Term Sheet and after the “Guaranteed Performance” period under the License Agreement expired.


    I would have stated, at the end, "after the ... period ... expired and without any written agreement of the parties to a formal test.

  • From the Second Amended Answer, Affirmative Defenses

    Quote

    1. Plaintiff Leonardo lacks standing to bring any claims against Defendants because the assignment of the License Agreement from Leonardo Corporation, Inc., a New Hampshire corporation (“Leonardo New Hampshire”), to Plaintiff Leonardo was invalid. As explained in Paragraph 8 supra, Leonardo New Hampshire is the party to the License Agreement. Per the License Agreement and the First Amendment, Leonardo New Hampshire could not assign any Case rights under the License Agreement to anyone else, either “voluntarily, involuntarily, by operation of law or otherwise.” See Counterclaims and Third-Party Claims ¶ 44 infra. Rossi also lacks standing to bring the remaining breach of contract claim in the Complaint because the payment that is the basis of that claim (Count I) is due, if at all, to Leonardo New Hampshire, not Rossi. See Answer ¶¶ 74, 80 supra


    Before turning to Annesser's motion, this struck me at first as ridiculous. Okay, so Leonardo moved from New Hampshire to Florida. So what? However, this stands as another example of Rossi sloppiness. There are two corporations involved, one formed in New Hampshire and one in Florida. The default presumption is that these are different legal entities. What would overcome that?


    Taking this straight, the Agreement was between Rossi, Leonardo (New Hampshire), Ampenergo, and IH. It provided for payments to "Leonardo." On the face, there is a problem. The agreement prohibits "assignment" without permission from the other parties. However, there is a process for a corporation to move from one state to another. Was that process followed? The claim is made in note 1 of paragraph 8 of the Complaint:


    Quote

    1 LEONARDO CORPORATION, a New Hampshire Corporation, was merged into LEONARDO CORPORATION, a Florida Corporation, wherein the Florida Corporation was the surviving entity.


    It might be relevant when this occurred, assuming it did occur. This would require the filing of a merge form with Florida (and maybe the dissolution of the New Hampshire corporation. I do not read the Agreement as providing that Leonardo Corporation may not move to another state, i.e,. form a new corporation and merge the original into it. As a complete merge, a full transfer of rights and responsibilities, the new corporation is effectively the same as the old. So, I can more or less anticipate Annesser's argument.


    Annesser takes three pages to address this. I'm appalled. As is often pointed out to me, brevity is the soul of wit. (but I'm not writing legal pleadings! "Wit," legally, is what will clearly and effectively communicate to a judge or jury what they need to know to make a decision. More can be less. In the other direction, it should be complete, but with no fluff.)


    The argument boils down to: this was a merger, not an assignment. Explaining the application of Florida law to this might take, if Annesser wants to be thorough, a couple of sentences. He has:


    Quote

    If, on the other hand, Defendant is claiming that Leonardo NH assigned the License Agreement to Plaintiff Leonardo outside of the merger, such defense (a) fails to accept the allegations of the Complaint as true, and (b) fails to plead any factual basis for
    their conclusory allegation that such assignment was “invalid” thereby failing to satisfy the requisite pleading requirements.


    As I understand it, an Affirmative Defense need not accept that allegations of the complaint are true; that would be the rule for a Motion to Dismiss or to Strike. An Affirmative Defense may deny the allegations of the Complaint. However, I'm not seeing evidence in Defense 1. It does not raise the possibility of merger and deny that a merger took place. However, this is remediable, and so what I expect is that the judge will require that Defendants drop the first Affirmative Defense or amend it to allege that the shift was not a merger.


    The Agreement, however, clearly prohibits assignment without consent.


    If a merger took place, duly registered with Florida and with notice to IH, my opinion is that this would not require the consent of IH. This could have happened at any time before the filing of the Complaint. Further, if that was not satisfied, it would still be remediable. It would be inequitable to dismiss the suit on this technical ground, as long as it were remedied promptly. However, IH is not asking for dismissal, but raising a possible defense.


    Being "wrong" is not a ground for striking an Affirmative Defense, unless the error is not controversial, and the Rossi claim of "merger," as stated, is conclusory. The judge will not do internet research to find out the truth about dates and a merge document, but will rule based on what is filed by the parties. Most of Annesser's argument is belaboring the obvious, and arguing that the Defense is wrong.


    Such a fundamental matter as the standing of a plaintiff to sue should not have been left to a conclusory footnote. While it was not necessary to attach proof of merger, a specific, dated reference to acts of merger would have been enough. I cannot myself research the Florida situation today because the state corporation site is down until Monday.


    As part of this analysis, and as an educational exercise (for me!) I want to make predictions. I am not a lawyer, and I know a real lawyer who refuses to make predictions. With the original Motion to Dismiss, I predicted the outcome. On the core dismissal motion (Count 1) I correctly predicted that it would not be dismissed at that point. There were seven other counts; I predicted dismissal of all, and four were dismissed. So ... not bad. I give myself a B. On Count 1, I did suggest that the judge would require the plaintiff to amend to allege estoppel; instead, she inferred it (which was a bit more efficient, and I apply that precedent here.)


    So, prediction (which may shift if IH responds): the judge has three options.

    • sustain the motion to strike. I don't see this as possible at this point because Annesser has not alleged sufficient fact. I find it remarkable that with three pages, he doesn't simply say when the merger took place.
    • reject the motion, leaving AD 1 intact.
    • require IH to amend AD 1 to specifically address merger (yes or no! -- which could include "maybe, we don't know," which is then effectively "no merger established," or to withdraw the AD (presumably being satisfied that a merger took place).


    If there are other amendments to be required, she may toss this in the hopper. If not, there is more fuss involved in fixing this than it is worth. She will take the second course as keeping things simple. If an affirmative defense is wrong, and especially in this case, it would be easily handled by stipulation later or even, if necessary, at trial, but I doubt it would get that far. IH will not want to get up at trial and argue an indefensible position. Color that Dumb.


    IH notes that the corporations existed as separate entities during the events covered by the case. I do not see that as relevant, as long as there was merger before the filing. Further, even after filing, this would be a remediable defect, as I describe above.

  • From the Second Amended Answer, Affirmative Defenses

    Quote

    2. Plaintiffs have failed to state a claim upon which relief may be granted. The bases for such are stated in Defendants’ Motion to Dismiss [D.E. 17], Defendants’ reply on same [D.E. 19], and this pleading. See, e.g., First Defense supra.


    I would dislike this as a judge. I should not have to read large documents to extract the "bases" for this. However, here it is:


    D.E. 17, page 5 (see the original for legal authorities cited. There is original emphasis in bold. I have added emphasis to one line in bold italics.


    This has been much misunderstood. The Complaint as filed (and as it still stands) was blatantly defective. The Second Amendment was signed by IH and Rossi, but not by AEG, nor by Lenonardo Corporation, nor by IPH. The defect was remediable, as to Leonardo, possibly as to AEG, and not as to IPH, perhaps, but the IPH signature could be challenged as not necessary (and the same for Leonardo if Rossi wholly owns Leonardo, as IH does IPH). It is this defect that might be remedied by estoppel through the conduct of the parties, if other evidence shows defacto acceptance of an otherwise-proper Guaranteed Performance Test. The same is true of the Six Cylinder Unit issue. I.e, if IH did, in fact, agree to the Doral plant operating period as a "GPT," rather than something else, in particular a sale of power and demonstration installation for guests, this estoppel could be established and a later reliance on the strict letter of the Agreement would be inequitable.


    However, estoppel must be pled, and Rossi avoided this. Hence it is not surprising in the least that IH moved for dismissal on this basis. The judge, however, could have allowed Rossi to amend, and chose, instead, to simply infer estoppel. She postponed judgment on the "Six Cylinder Unit" issue, pending knowledge as to whether or not this was merely another name for "E-Cat Plant." Because it was possible that the arguments given above could be defeated with more evidence, she did not grant dismissal at that point. However, for whatever reason, IH did not emphasis what I have emphasized above, the issue of an agreement in writing to the start date. There is no allegation of such a writing, nor anything more than vague allusions to some possible agreement, not explicit. If the written agreement existed, one would have thought that it would have been placed in evidence, because it would entirely kill this issue; whereas, without it, the issue will kill Rossi v. Darden.


    At this point, Jones Day may consider the "Six Cylinder Unit" issue enough, given the judge's prior comment.


    Now, Annesser's motion....


    Quote

    ... Defendants are simply attempting to re-litigate their Motion to Dismiss in hopes that they may achieve a different result. This Court has already determined that the Plaintiffs’ surviving claims sufficiently state a cause of action and Defendants should not be permitted a second bite at the apple so as to relitigate the same issues yet again under the guise of an affirmative defense. Accordingly, the defense must be stricken.


    I can be brief here. the Court ruled as described that plaintiff's claims sufficiently state a cause of action, if taken as entirely true. That is sufficient to survive a motion to dismiss. Now the plaintiff is moving to strike this as an affirmative defense, which requires a similar assumption in the other direction: that the defendants factual claims are to be assumed to be true.


    Annesser claims that there are only conclusory statements. This is blatantly false.
    Facts were alleged

    • regarding the original agreement and setup of the GPT.
    • about the GPT not having taken place timely, by that standard.
    • about the second amendment and its signatures
    • about the requirement of the second amendment for a written agreement as to the date.
    • about the Six Cylinder unit
    • about the lack of evidence of agreement to start the test with some other Plant than the Six Cylinder Unit.

    Prediction: The motion to strike this Affirmative Defense will be denied.

  • From the Second Amended Answer, Affirmative Defenses


    Because some have been complaining about "legalese," some terms:
    Equitable claims: http://litigation.findlaw.com/…-and-equitable-claim.html / claims seeking relief by some action, injunction, or prohibition, as distinct from money damages. "Equity" generally refers to fairness.
    Estoppel: http://www.duhaime.org/LegalDictionary/E/Estoppel.aspx "Estoppel is the law's way of saying "you can't have your cake and eat it." If IH actually agreed to a GPT, and the conduct of the parties was consistent with that, IH might be estopped from claiming there was no GPT because of some technical defect.
    Waiver: http://thelawdictionary.org/waiver/ the forgoing of some right or conduct signifying that the right has been abandoned. This can be similar to estoppel.
    Laches: https://en.wikipedia.org/wiki/Laches_(equity) "a lack of diligence and activity in making a legal claim, or moving forward with legal enforcement of a right, in particular with regard to equity; hence, it is an unreasonable delay that can be viewed as prejudicing the opposing [defending] party. When asserted in litigation, it is an equity defense, that is, a defense to a claim for an equitable remedy."


    The last sentence of the defense appears to be a reference to the claims of fraudulent representation as to the involvement of Cherokee and the availability of funding from Cherokee. The Agreement was explicit that it was with a new corporation, Industrial Heat, and it included a standard Entire Agreement clause. IH would claim that even if Rossi were deceived as to whom he was dealing with, in the year ensuing before he actually arranged Validation, and transferred the 1 MW Plant and, allegedly, the IP, he could have withdrawn from the agreement by refunding the $1.5 million, which he was allowed to do if he so chose. To assert this four years later is barred by laches, and also violates waiver and estoppel and the Statute of Frauds.


    Annesser finds the defense vague, and, in part, it still is, in my opinion, as to the first part. The reference to massive sections of the countercomplaint without specifics, I find confusing. The relation of the alleged fraudulent inducement to estoppel, waiver, and laches is obscure to me.


    However, In spite of his initial complaint, Annesser seems to have figured out what, at least, part of this is about:


    Quote

    Logically, Plaintiffs were fraudulently induced to do something – enter into the License Agreement. Defendants now argue that their fraud should be ignored because they were successful in duping
    Plaintiffs to “sign on the dotted line.” There is no legal support for this position, and, accordingly, the defense must be stricken.


    Annesser is ignoring the very substantial lapse of time before Rossi alleges any complaint about whom he had the agreement with. He signed the agreement in 2012, it iincluded an "entire agreement clause," and he received the benefit of the Agreement as to not only the initial payment securing the agreement of $1.5 million, but the later $10 million and other, benefits (Including very substantial payments to his friends, Penon and Fabiani, and, as well increased credibility because of the involvement of IH. The signing of the agreement, with ample time to review it with an attorney, was a waiver of reliance on any prior representations. The delay was laches, it is unconscionable for Rossi to have benefited from the agreement for years, as-is, then to repudiate it based on his original misundertanding -- or even deception.


    The Annesser argument would make mincemeat of contract law. Yes. If a person realizes or comes to believe that he has been deceived, and this is important to him, he can generally back out of the agreement if this is promptly asserted. Rossi had a year before there were any relatively irrevocable events.


    Quote

    ... Defendants fail to give Plaintiffs any notice – fair or otherwise – of the “other applicable equitable doctrines” upon which they intend to rely in this defense. Defendants merely assert that they rely upon “other applicable equitable doctrines.” [DE: 50 at *22]. Defendants fail to make any legal or factual allegation in support of this defense as they cannot do so in good faith.


    The failure to make a factual allegation in connection with that claim is one thing, the claim about the impossibility of doing so in good faith is reactive fluff.


    I am not familiar with the level of specificity required in these defenses. I've read plenty of cases, but not the initial pleadings, only judgments and sometimes some later arguments.


    Prediction: the Judge will reject the motion or will require that more specifics be alleged with regard to part of it or that those vague parts be striken. The point is that the plaintiff should be aware of the round outlines of the defense.

  • Taking this straight, the Agreement was between Rossi, Leonardo (New Hampshire), Ampenergo, and IH. It provided for payments to "Leonardo." On the face, there is a problem. The agreement prohibits "assignment" without permission from the other parties. However, there is a process for a corporation to move from one state to another. Was that process followed? The claim is made in note 1 of paragraph 8 of the Complaint:


    The merger (document) took place March 21, 2016, but was retroactive to January 1, 2015.
    Andrea Rossi is listed as President of Leonardo New Hampshire, but CEO of Leonardo Florida. (Which one (or both) is the one that Johnson is President of?)
    Both companies are reported on the merger document to be owned by the same person.
    The document is numbered P10000091220 (Florida).


    Annesser is the lawyer for the merger.


    It is possible that the New Hampshire Leonardo was dissolved before the merger, which is why the merger was made retroactive, but I would have to locate that document.

  • March 21, 2016, when the merger was carried out, is after the end of the purported GPT. I think this was done in a rush in response to something, but I don't recall what. How far back in time would the merger need to be to deal with IH's challenge of standing, and would January 1, 2015, be sufficient? I know that IH and Rossi started dealing in business several years before that. If the merger was initiated as late as 2016, will there be a basis for overruling the retroactive part? Could IH argue that it had a relevant interest in whether there was a merger or an assignment (or no assignment), apart from the question of standing for the lawsuit?

  • @Eric Walker,
    The timing of the merger paperwork is just about right for the ERV report completion.
    There may be some other NH-FL complications , but they need a closer look too.
    Seems like the FL Leonardo may have paid for some patent/application transfers (quite some time ago), which were part of the IH deal with the NH Leonardo. But following these tangled Leonardos around is a bit tricky to figure which one had what, when.


  • Here is a link to the Florida merger document: http://search.sunbiz.org/Inquiry/CorporationSearch/ConvertTiffToPDF?storagePath=COR%5C2016%5C0401%5C83334474.Tif&documentNumber=P10000091220
    The dates make it reasonably obvious what was going on. Rossi and Annesser were preparing for the lawsuit (before the "ERV" report had been issued), and this was a detail to clean up. The document explicitly shows urgency.
    Was IH notified of the merger? If not, then they were sued by a "strange corporation" with whom they had no agreement, and their legal reaction (challenging standing) is then at least understandable.


    Quote

    It is possible that the New Hampshire Leonardo was dissolved before the merger, which is why the merger was made retroactive, but I would have to locate that document.


    More information about Leonardo Florida:
    Incorporated 11/8/2010. Original President, Director, and Registered Agent: Rossi. Original Secretary and Director: James R. Travis of New Hampshire. This was personally filed by Rossi. http://search.sunbiz.org/Inquiry/CorporationSearch/ConvertTiffToPDF?storagePath=COR%5C2010%5C1115%5C84053446.Tif&documentNumber=P10000091220
    Apr 22, 2013 new registered agent Henry Johnson.
    Jul 10, 2013 Travis no longer listed, but signed as "Accountant." This would be the Travis whose subpoena was quashed, Doc. 42.
    Mar 03, 2014 Rossi CEO, Johnson President


    So .... Johnson was established as President of Leonardo Florida before the Terms Sheet agreement with IH. However, at that point, the IH Agreement was with Leonardo New Hampshire, the merger did not take place until a few days before Rossi v. Darden was filed. Was IH aware of Leonardo Florida? Maybe. Maybe not. The Accountant for Leonardo Florida was from New Hampshire. Let's see what we find there.


    https://www.sos.nh.gov/corporate/soskb/Corp.asp?414253
    Status: Good Standing. Registered Agent: James R Travis.
    1997 formed Andrea Rossi sole incorporator
    1998 attorney assigned as registered agent.
    2005 James R. Travis registered agent.
    2008 Travis listed as officer.
    2014, 2015, no annual report.
    8/28/2015 Admin Dissolution/Suspension
    3/18/2016 Reinstatement Filed


    The reinstatement document was signed by Rossi, dated 3/3/2016. There was a reinstatement fee of $135, plus the two missing annual reports were filed, with a fee of $150 each, including the late fee, and then the 2016 report was filed, normal fee of $100.


    So.... I see all this as preparation for the suit. The Agreement provided that payment be made to Leonardo, which was the New Hampshire corporation. We have not seen the demand letter Rossi wrote, presumably March 29. We do not know if or when IH was notified of the merger.

  • March 21, 2016, when the merger was carried out, is after the end of the purported GPT. I think this was done in a rush in response to something, but I don't recall what. How far back in time would the merger need to be to deal with IH's challenge of standing, and would January 1, 2015, be sufficient? I know that IH and Rossi started dealing in business several years before that. If the merger was initiated as late as 2016, will there be a basis for overruling the retroactive part? Could IH argue that it had a relevant interest in whether there was a merger or an assignment (or no assignment), apart from the question of standing for the lawsuit?


    There is no problem with standing if IH New Hampshire was merged into IH Florida prior to filing the suit, and it was. A few days before!


    Annesser is correct that a merger was involved, not an assignment. However, if IH was also preparing for suit, at the time of preparation, there were two distinct corporations, so an assignment could have been assumed. That was an error. Attorneys make mistakes.


    If there was lack of notice to IH, this would be a nuisance problem. It could excuse the IH error. In some cases, errors can result in sanctions, one of the cases I read, studying Annesser's motion to strike, an attorney certified that there had been a pre-filing conference with the opposing party's counsel, when, in fact, he had been confused with another client, there had been no conference. He was fined for the trouble caused, (over $300, as I recall,) but then it became moot.


    What I see here is one more example of Rossi sloppiness. If Rossi consulted counsel about the Agreement (over $100 million involved!), he has conveniently forgotten what they told him. The whole thing about "they deceived me" was contrary to what any attorney would have told him.

  • So does the merger backdating to 2015 prevent legal problems with patents and applications held by the FL Leonardo entity that were included in the 2012 deal with IH and the NH Leonardo?


    There is a possible technical issue there; and IH points out that the two entities existed at the same time. Rossi's actions and inactions created a mess. My sense is that the merger adequately addressed that, though there may still be a problem, as I mentioned, with notice to IH. We do not know when IH realized that the New Hampshire corporation had been shut down for nonfiling of reports.


    However, this is a trivial issue compared to many others. It is like the tax issue. If Rossi has now filed and paid all the taxes, and has no tax liens or reasonably possible tax liens, there is no present violation or harm to IH. But there was a contract violation then, if there were unpaid taxes. This reminds me to look at the first Rossi motion to dismiss counterclaims. Document 41. (This is now moot and has been dismissed as such.)


    This is what I had remembered:


    Quote

    Even if Plaintiffs had not paid all appropriate taxes, they have, there is absolutely no legal basis for Defendants baseless and conclusory allegation that there is a “likelihood” that the E-Cat IP will be the subject of a tax lien.


    I read that as more or less an admission that there had been some tax delinquency. I look at it now and see a different way to read it. I still notice that they did not claim that the taxes were paid on time. Given all the other sloppiness that we have seen, a tax delinquency would not be surprising.


    This happens all the time and is not normally any big issue. However, there is a contractual requirement, and, on the face of it, if there was a delinquency, there was a violation of the contract. IH is now explicitly not claiming current damages, reserving the right to claim such in the future under the contingency of a problem.


    Rossi wants this dismissed because he does not want the issue of old tax problems to be introduced. He could probably avoid that by stipulating the problem. I.e., that there was a delinquency, and that it was remedied. Otherwise if he denies what IH has as "information and belief," this could go to the jury, which is exactly what he does not want, and for obvious reasons. Annesser complains about IH motives here, but this is likely to be seen by the judge as whining. If Rossi was delinquent, he set up this problem.


    If not, then he needs to create clarity on that. A stipulation or statement under oath, under penalty of perjury, could nail this. A statement by an accountant would help. Both of these, if fraudulent, could be serious offenses, but if true, not a problem.


    As matters stand, I don't see how the judge can strike the claim. The claim is specific, and can be addressed by establishing the fact. The source of the "information and belief" may not be admissible as evidence, but IH would have the opportunity to establish the issue, and the matter being in the complaint will allow discovery, i.e., mandatory statement under oath.

  • Docket item 55:

    Quote

    PAPERLESS NOTICE of Hearing on 54 MOTION to Strike 50 Answer to Complaint, Third Party Complaint, Counterclaim, in Part Second Amended Answer, Affirmative Defenses, Counterclaims, and Third Party Claims, or in the Alternative, MOTION for More Definite Statement: Motion Hearing set for 10/14/2016 08:30 AM in Miami Division before Judge Cecilia M. Altonaga.


    (This item is not downloadable except as a docket download, which I don't normally do. So I don't see these until Pacermonitor has them.)

  • From the Second Amended Answer, Affirmative Defenses

    Quote

    4. Plaintiffs’ equitable claims are barred, in whole or in part, by reason of Plaintiffs’ unclean hands. Plaintiffs engaged in a scheme to deceive Defendants by, inter alia, improperly manipulating the Validation and Guaranteed Performance testing processes, fraudulently inducing Industrial Heat to enter the Term Sheet, and engaging in the other conduct alleged in support of the fraudulent inducement and FDUTPA claims pled infra. See Counterclaims and Third-Party Claims ¶¶ 1-11, 50-57, 69-92, 134-148 infra & Answer ¶¶ 57, 64, 71 supra


    Annesser alleges lack of the specificity required for this defense. Rather than spend a lot of time compiling specifics, I'm punting at this point. I am familiar with the IH Answer, in general. There are many specific allegations with time and place and the other elements Annesser claims are missing. Because the basis for the defense is clear in round outlines, the judge will not allow this claim to be struck; the most she would do is to require more detail.


    Based on her prior response to the Darden Motion to Dismiss, she is likely to simply allow any unclarity be resolved in discovery, instead of further complicating the pleadings.

  • (AD 5 is not subject to a motion to strike, see above)


    From the Second Amended Answer, Affirmative Defenses:

    Quote

    6. Plaintiffs’ claims are barred, in whole or in part, as a result of Plaintiffs’ unlawful actions, including their conduct in violation of the Florida Deceptive and Unfair Trade Practices Act. This is reflected in the allegations in support of the claims pled against Plaintiffs infra, including the allegations in support of the FDUTPA claim pled infra. See id. ¶¶ 140-148 infra.


    This is worth copying the cited material:


    Annesser again alleges the lack of specificity. I look at the defense, and know that there are specific allegations covering what is listed in the Count.
    I looked at some cases cited by Annesser.

    Quote

    To state a defense under the Florida Deceptive and Unfair Trade Practices Act (“FDUPTA”), Defendants must allege: “(1) a deceptive act or unfair practice; (2) causation, and; (3) actual damages.” Randolph v. J.M. Smucker Co., No. 13 80581-CIV, 2014 WL 1018007 at *4 (S.D. Fla. Mar. 14, 2014) (citing Mantz v. TRS Recovery Servs., Inc., 11–80580–CIV, 2011 WL 5515303 at *2 (S.D. Fla. Nov.8, 2011)); see also KC Leisure, Inc. v. Haber, 972 So.2d 1069, 1073 (Fla. 5th DCA 2008). Defendants fail to set forth the elements of this defense with the requisite specificity required by Rule 9, Fed. R. Civ. P. In fact, in an effort to conceal such pleading deficiency, as a factual basis for such defense, Defendants merely claim that the alleged “unlawful actions” are reflected in the entirety of Defendants Second Amended Counterclaim and Third-Party Claims. Defendants incorporation of the entirety of its Second Amended Counterclaim and Third Party Claims is not only improper, but it fails to provide the requisite notice to Plaintiffs of the specific allegations upon which Defendants rely to support their sixth affirmative defense. According, this defense must be stricken. Moreover, at no point in Defendants’ pleadings do Defendants allege any actual damages. Defendants’ FDUPTA defense is insufficient as a matter of law and must be stricken.


    https://casetext.com/case/randolph-v-jm-smucker-co is a later ruling. "On March 14, 2014, the Honorable Kenneth A. Marra, United States District Judge, dismissed Count IV of the Complaint, and, while leave to amend was provided, Plaintiff opted not to do so. See Order, ECF No. [25]." Looking at this case from the later ruling, it was much likelier to be vague."
    https://casetext.com/case/mantz-v-trs-recovery-services-2 interesting case with a pro se plaintiff. My opinion is that this order supports rejecting the motion to strike, and, again, the most severe response would be an order to clarify. I don't think the judge will consider that necessary.
    KC Leisure, Inc. v. Haber ... again seems to support rejecting the motion to strike.


    Judges do not require pleadings to be perfect. Given the Second Amended Answer and the Counterclaims, Rossi would certainly know what is being pled.


    The motion to strike appears dilatory, a way to avoid addressing the core issues of the Answer and Countercomplaint. I predict that the judge will not grant the motion to strike. It is possible that she will require more specificity (perhaps a dollar amount for damages?), but at this point it seems the specificity is adequate.

  • From the Second Amended Answer, Affirmative Defenses:

    Quote

    7. Plaintiffs’ claims are barred, in whole or in part, as a result of Plaintiffs’
    fraudulent misrepresentations. Those fraudulent representations are pled infra. See id. ¶¶ 1-11,
    32-92, 134-148 infra


    Is this sufficiently specific? I don't know. The AD section is a summary of what is elsewhere in the counter-complaint.


    Annesser:


    Quote

    Notwithstanding the fact that most of the allegations cited in support of this defense are entirely irrelevant to the elements necessary to state a prima facie defense of fraudulent misrepresentation, some of Defendants allegations do assert that there were fraudulent statements made by "Rossi, both in his individual capacity and as the representative of Leonardo, and Johnson, both in his individual capacity and as the representative of JMP." (DE:30, ¶74, 75, 135, 137). With the exception of one email alleged to be made by Rossi, Defendant IH fails to specifically state (a) the specific alleged fraudulent statements that were purportedly made, (b) to whom such statements were made, (c) which individual and/or entity made such statement(s), and (d) what each such individual and/or entity obtained as a consequence of the fraud. See Id. "Where multiple parties are charged with fraud, the complaint must distinguish among defendants and specify their respective roles in the fraud."


    This is remarkable. The claim is basically that Jones Day was too wordy. As I see it, the "irrelevant" paragraphs were necessary to establish context for the allegations of fraudulent representation. And even one such allegation would be enough to sustain the Affirmative Defense. I see Annesser's motion as straying perilously close to frivolous. For each counter-defendant, there are specific evidences provided as to deceptive statements or actions. If these are about the third party counterdefendants, it is essentially not Rossi's business, except as conspiracy may be claimed.


    I am moved to quote the Latin legal maxim: mendax, mendax, braccae in ignis.


    The motion will be rejected; again, it is not impossible that amendment will be requested, but I consider it unlikely. These motions by Annesser are useless at best, other than to create some delay.

  • (AD 8 is not subject to a motion to strike, see above)


    From the Second Amended Answer, Affirmative Defenses:


    Quote

    9. Plaintiffs’ fraud claim is barred because of the merger and integration provision in the License Agreement (Section 16.8) as well as the ratification provision in the First Amendment (Section 2). Per the License Agreement Section 16.8, that document and other written documents identified therein “contain the entire agreement among the parties” and “supersede[d] all prior agreements, written or oral.” Per the First Amendment Section 2, the parties acknowledged, “ratified[,] and confirmed” the License Agreement.


    The Rossi fraud claim is based on alleged misrepresentations about Cherokee Partners. see Complaint (document 1), such alleged misrepresentations being made before the Agreement was signed. The Licence agreement contains a standard Entire Agreement clause. These are designed to prevent disputes like this. When signing such an agreement, a party is well-advised to ensure that they are not relying on promises that are not contained in the agreement. In particular, any verbal promise that involves performance beyond one year will generally be unenforceable. ("Statute of Frauds.")


    Here, six months after signing the Agreement, Rossi signed the First Amendment that ratified and confirmed the agreement. It is only later, after almost four years, that he raises the problem with Cherokee, and the motivation is obviuos: to have deep pockets to go after.


    What does Annesser assert?


    Quote

    Defendants’ ninth affirmative defense is insufficient as a matter of law as if fails to offer any justification, excuse or avoidance of Plaintiffs claims. To begin, Defendants fail to state which, if any, of Plaintiffs’ claims the defense is directed to. Logically, the only claim which this defense could apply to is Plaintiffs’ claim for fraud in the inducement, yet this defense fails to provide an excuse, justification and/or avoidance of Plaintiffs’ fraudulent inducement claim as a matter of law. “Under Florida law, the existence of a merger or integration clause, which purports to make oral agreements not incorporated into the written contract unenforceable, does not affect the oral representations which are alleged to have fraudulently induced a person to enter into the agreement.


    Lucky guess, Annesser. Maybe the phrase "the Rossi fraud claim" helped you?


    Oral representations might still be fraudulent and, under some conditions, actionable, so the principle asserted by Annesser is correct. Does it apply here? Annesser's interpretation would make mincemeat of standard contract law. Annesser ignores the "ratification," serving as one of many acts creating estoppel, and the lapse of time (laches).


    Quote

    TEC Serv, LLC v. Crabb, 11-62040-CIV, 2013 WL 11326552, at *6 (S.D. Fla. Jan. 23, 2013) (citing McArthur Dairy, LLC v. McCowtree Brothers Dairy, Inc., et. al, 09-62033-CIV, 2011 WL 2731283, at *4 (S.D. Fla. July 13, 2011)


    TEC Serv, LLC v. Crabb I could not find the relevant document. I could go to PACER for this, I think, but am not.
    However, McArthur Dairy, LLC v. McCowtree Brothers Dairy, Inc. is at http://cases.justia.com/federa…31/81/0.pdf?ts=1428887948
    I can certainly see why this is cited:

    Quote

    Under Florida law, “[t]he existence of a merger or integration clause, which purports to make oral agreements not incorporated into the written contract unenforceable, does not affect oral representations which are alleged to have fraudulently induced a person to enter into the agreement.” Mejia v. Jurich, 7891 So. 2d 1175, 1178 (Fla. Dist. Ct. App. 2001); Nobles v. Citizens Mortgage Corp., 479 So. 2d 822 (Fla. Dist. Ct. App. 1985) (“oral agreements or representations may be introduced into evidence to prove that a contract was procured by fraud notwithstanding such a merger clause.”)


    Whether or not a misrepresentation is of a nature so as to bypass the "entire agreement" provision could be a factual issue, requiring a jury determination, or it could be legal, but striking the affirmative defense because it might not be applicable would be inequitable. The entire agreement clause is relevant and might be effective. The argument in McArthur Dairy is that if a contract was entered into on a fraudulent representation, the contract is void. In that case the conduct of the parties and equity would be consdiered.


    It seems that Rossi took full advantage of the benefit of the Agreement, while it served him, then alleged fraud only when he wanted deep pockets to go after. Annesser ignores the "ratification." He would be estopped from this claim by his conduct over the next four years. He would have had the right to back out of the Agreement before the Validation Test and the $10 million payment, and he would have held the cards to do so. All he'd have had to do would be to return the $1.5 million payment. Instead, he elected to go ahead, to seek to earn that payment by running the Validation Test, and then to earn the $89 million with a GPT.


    The strongest basis for his claim that his real agreement was with Cherokee is these claims from the Complaint:

    Quote

    38. At each of the aforementioned meetings, DARDEN, VAUGHN and CHEROKEE repeatedly stated that "CHEROKEE has billions of dollars at its disposal, and is willing to pay ROSSI and LEONARDO" to license the E-Cat IP.


    Quote

    41. Upon arrival at the CHEROKEE office, Defendants DARDEN and VAUGHN informed ROSSI and LEONARDO that they had formed a new business entity named INDUSTRIAL HEAT,LLc,which was a "branch of Cherokee Investment Partners ,LLC- to serve as the holding company for the E-Cat license, and that the License Agreement would be signed by the new company.


    Quote

    43. Upon expressing concern about the new company, to induce ROSSI and LEONARDO's execution of the license agreement, DARDEN and VAUGHN, with full knowledge of the falsity of their statements, assured ROSSI and LEONARDO that:
    a. "CHEROKEE and INDUSTRIAL HEAT,LLC are the same company";
    b. that IH was "entirely owned and funded by" CHEROKEE; and
    c. that "CHEROKEE guaranteed that LEONARDO will be paid in accordance with the License Agreement."


    Reviewing this, details and consequences pop out now that I did not see at first.


    Assuming, arguendo, that Cherokee was a guarantor, Cherokee is not in default, because the alleged debt of IH has not been perfected; it is legally controversial.


    Here, Annesser acknowledges that IH is a separate company (by calling the representation that they are the same company "false.") He also is denying that there was a guarantee, i.e., this was "false." If there was no guarantee, Cherokee is not liable, even after a default. Conceivably Darden and Vaughn could be on the hook for fraudulent representation, but then there are other arguments relieving them, very likely.


    In fact, they were not the same company. The foundation for the fraud claim is verbal statements made, and ironic here is that for the fraud counterclaim Annesser is complaining about vagueness, but the Rossi claims are quite vague as to exactly who said what and when, and this was pointed out in the Darden Motion to Dismiss, rejected by the judge, in part in reliance on interpreting a Rossi assertion (the one quoted above) that IH and Cherokee were the same company, i.e., that IH was a wholly-owned subsidiary.


    So what did Darden and Vaughn actually say? This is why the Statute of Frauds exists. People remember of conversations what seemed important to them, and where there are strong emotional reactions, or even without that, the memories shift with time. Language is back-supplied from impressions. I can imagine things that they could have said that were true, when said, but that changed as the Agreement was put together. Perhaps they got legal counsel that Cherokee could not enter into this agreement. But Darden is a principal at Cherokee. Vaughn is a "manager," colloquially, but his role there has probably been overstated. Darden and Vaughn could have raised the $89 million if it were warranted, not through Cherokee, but through the personal contacts they have, which cannot be completely separated from what Darden has as a principal at Cherokee. The representation may not have been misleading at all. If Rossi had completed a genuine GPT, IH would have raised the money, and Darden's assurances to Rossi would have been aimed at calming his fears that they might not be able to pay.


    I do not see that Jones Day has alleged violation of the Statute of Frauds, which is blatant in this case. They do mention estoppel and laches, which are relevant here. Rossi wants estoppel to apply when it comes to the delay over the GPT, but not when it comes to the Cherokee issue.


    Having cake/Eating cake.

  • From the Second Amended Answer, Affirmative Defenses:


    Quote

    10. Plaintiffs’ non-contract claims are barred, in whole or in part, because Plaintiffs’ alleged damages are too speculative. The Complaint does not include any factual allegations that would place Defendants on notice as to the purported damages suffered as a result of Defendants’ alleged conduct aside from what is covered by Count I (breach of contract), let alone a non-speculative basis for measuring any such purported damages.


    Annesser has:

    Quote

    Defendants fail to assert any factual support whatsoever for their claim that Plaintiffs’ non-contractual damages claims are too speculative, nor do they even attempt to identify what element(s) of damages they believe to be speculative. Defendants fail to allege, for example, how or why Plaintiffs’ damages for unjust enrichment, misappropriation of trade secrets and fraud and deceit are insufficiently stated despite statutory and common law support therefor.


    Four of eight original Rossi Counts were struck.


    COUNT I: BREACH OF CONTRACT (NON.PAYMENT) (IH & IPH) is intact and is exempted from the claim of lack of specificity, since the damage is obvious: $89 million, assuming the factual basis for Count I is confirmed.


    COUNT II: BREACH OF CONTRACT (EXCEEDING SCOPE OF LICENSE) (IH & IPH) was dismissed, my summary, for terminal cluelessness.


    COUNT III: UNJUST ENRICHMENT (IH & IPH stands (dismissal was considered premature, because if the GPT was invalid, as the judge hints it might be, then there could be some element of unjust enrichment. Suppose, for example, that IH was making money hand over fist from a technology that, for technical reasons, they have not paid the inventor for. However, the damages are not clear at all. There is no evidence that IH has received any value at all, i.e., "enrichment."


    COUNT IV: MISAPPROPRIATION OF TRADE SECRETS (DARDEN, VAUGHN, CHEROKEE,IH & IPH) This was again kept on the bare possibility that facts might come out to support the charge. However, there is no specific allegation of damages, merely a conclusory statement that they have been damaged, with no specificity at all.


    COUNT V: CIVIL CONSPIRACY TO MISAPPROPRIATE TRADE SECRETS (IH,IPH, CHEROKEE, DARDEN & VAUGHN) was dismissed. In discussion, the judge has " Cherokee entirely owns and funds IH, one of its holding companies." This is an assumption the judge made based on a possible misinterpretation of one of Rossi's claims. Ironically, that claim was then the basis for dismissing this count. For now, let's consider this moot; that claim about Cherokee was part of the basis for keeping Cherokee as a defendant.


    COUNT VI: FRAUD AND DECEIT (IH,IpH, CHEROKEE, DARDEN & VAUGHN) stands, though it may be very difficult to show at trial. However,any damage to Rossi from the alleged fraud, beyond the nonpayment, is very unclear. That Cherokee was not, in fact, the owner of IH is not responsible for the nonpayment. If Cherokee was a guarantor, the occasion for guarantor payment has not arisen. (It would not arise merely because IH did not pay; the debt would need to be legally established, I'd think, unless there were a specific contract, which very much did not exist.)


    COUNT VII: CONSTRUCTIVE & EQUITABLE FRAUD (IH,IPH, DARDEN & VAUGHN) was dismissed. One of the repeated Rossi claims is that IH disclosed his trade secrets to "competitors." No evidence of such has actually been alleged, this was a bare conclusory claim.


    COUNT VIII: PATENT INFRINGEMENT (U.S. PATENT) (IH & IPH) was dismissed.


    I see no specific damages alleged, beyond what IH acknowledges, the nonpayment of $89 million. While some of the alleged damages might be amenable to proof, the present motion is a motion to strike, and whether or not a claim becomes specific enough to stand is not established at this point. Striking the affirmative defense, then, would be premature. The plaintiff should be on notice that if damages do not become specified, the claims might be dismissed on motion at some point, that's how I understand this.


    The judge will not grant this motion.

  • From the Motion to Strike:

    Quote

    DEFENDANTS’ COUNTERCLAIM
    Plaintiffs, Andrea Rossi and Leonardo Corporation respectfully move this Court to Strike
    Paragraphs 126 through 133 of Defendants Second Amended Counterclaim as such material is
    immaterial, impertinent and scandalous and therefore properly stricken pursuant to Rule 12(f), Fed.
    R. Civ. P. I.


    Count II (Breach of Contract) – Failure to Pay Taxes Is Improper.


    From the Second Amended Answer and Countercomplaint:



    This is one in a series of alleged breaches of contract. An allegation on "information and belief" is allowed. It is specific. It cannot be said that this is unrelated to Rossi's performance of the Agreement. The statement in paragraph 126 is mild, but might be considered inflammatory. The point of 128 is to establish why the provision about taxes was in the Agreement. There was an unusual concern, because of the history.


    This motion betrays a hypersensitivity. Annesser claims:


    Quote

    ... even if such allegation was true (it is not), such allegation would not give rise to a viable cause of action or defense. Moreover, any “tax issues” that the Plaintiffs may have had in the past would not be admissible in this proceeding, much less
    give rise to a claim or defense in this case. It is clear that the sole purpose of asserting such impertinent and scandalous allegations was to defame the Plaintiffs while hiding behind the litigation privilege as a shield. But for the instant case, and perhaps still, the clearly unsupported and defamatory statements made by Defendants would be actionable at law.


    The scandalousness involved in the allegation is mild. The Italian tax history is true, so "such allegation" must refer to the claim that Rossi did not file all taxes on time. We already know that Rossi failed to file information returns for Leonardo New Hampshire. Failing to file a return on time is a fairly common event. It means little, particularly if no taxes are due, and when taxes are due and the delay is not long, penalties are mild. Is Annesser claiming that no returns were delinquent during the period or now? This is a bit different from what IH acknowledges Leonardo and Rossi have assured them, that's about liens, which are a later consequence of failure to pay taxes, it can take years.


    If so, and if Rossi is willing to affirm this under oath, I would think that IH might drop this. If Rossi was, however, delinquent at any point as to taxes, he would have been in violation of the Agreement and this becomes relevant to the case. As matters stand, I don't see how the judge can strike this, it is sufficiently relevant because of the Agreement provision.

  • (links)


    Rossi Motion to Strike introduction and coverage of Affirmative Defenses not moved for strike
    Rossi Motion to Strike, re AD 1 Leonardo Florida not Leonardo New Hampshire. Assignment vs. Merger.
    Rossi Motion to Strike, re AD 2 failure to state a claim
    Rossi Motion to Strike, re AD 3 estoppel, waiver, laches, and other applicable equitable doctrines.
    Rossi Motion to Strike, re AD 4 unclean hands
    Rossi Motion to Strike, re AD 6 
    plaintiff's unlawful actions
    Rossi Motion to Strike, re AD7 fraudulent misrepresentations.
    Rossi Motion to Strike, re AD10 damages speculative.
    Rossi Motion to Strike, Counter-complaint tax issue
    Hearing on motion to strike scheduled 10/14/2016 08:30 AM in Miami Division before Judge Cecilia M. Altonaga
    IH_response_in_opposition_to_MTS
    Order on Motion to Strike

  • A hearing notice appeared on the docket a bit ago. As I have no idea of specifics involved, I did not comment on it. This was the notice:

    Quote

    PAPERLESS NOTICE of Hearing: Status Conference, re: service of Third Party Complaint, set for 10/7/2016 12:30 PM in Miami Division before Judge Cecilia M. Altonaga.


    I think it likely this will be postponed, there is a little detail like a cat 4 hurricane set to hit Florida Friday morning, the 7th.


    Probably the wrath of God for .... something or other.


    (I hope everyone in Florida is safe, there is a strong media drumbeat to evacuate. Sensible. Not to mess with.)

  • As predicted, the Hearing for October 7 was reset, the new date was October 14. The result of that hearing is Document 67. The hearing minutes are Document 66, but this is not a public document. It is possible it could be obtained through the court reporter (as with other hearing minutes). Document 67 provides results, but not the reasons for the orders, which were given in "open court." I.e., orally.


    The October 7 hearing was to handle "service of a third party complaint." From Document 67, this was service of Penon. The Order as issued October 14:

    Quote

    3. Defendants shall show proof of service on Third-Party Defendant, Fabio Penon by
    November 14, 2016, failing which he will be dismissed without prejudice.


    What is this about?
    Federal Rules of Civil Procedure › TITLE II. COMMENCING AN ACTION; SERVICE OF PROCESS, PLEADINGS, MOTIONS, AND ORDERS


    Rule 4. Summons

    Quote

    (m) Time Limit for Service.
    If a defendant is not served within 90 days after the complaint is filed, the court—on motion or on its own after notice to the plaintiff—must dismiss the action without prejudice against that defendant or order that service be made within a specified time. But if the plaintiff shows good cause for the failure, the court must extend the time for service for an appropriate period. This subdivision (m) does not apply to service in a foreign country under Rule 4(f) or 4(j)(1) or to service of a notice under Rule 71.1(d)(3)(A).


    Rule 4(f):


    Rule 4(j) is not relevant here, nor is Rule 71.
    There is extensive discussion of Rule 4 at https://www.law.cornell.edu/rules/frcp/rule_4#rule_4_f. I have not reviewed this, I am merely looking for the round outline here.


    If IH is having difficulty serving Penon, but is pursuing it with due diligence, I consider it unlikely that Penon will actually be dismissed, even if IH fails to meet the November 14 deadline; they could request more time. IH has a presumed town in Italy of principal residence of Penon, but we do not know more details, and Penon might be avoiding service. He did not join in the special appearance for Fabiani and Johnson, which would have given him more time to respond. He might prefer to stonewall this, and he might get away with it for a time, but ... it will leave Rossi without his star witness, crucial to his case, needed to testify to the "ERV Report."


    While it is possible that this report can be introduced anyway (an attorney would know better about this), its value would be drastically reduced without Penon available to affirm it and to answer questions about it. Maybe I should read some Rules of Evidence.


    (So I did. Ugh. Can of worms.)
    Other aspects of the October 14 order will be separately covered.

  • This is a filing by IH of final argument before the hearing scheduled for October 14, where the Judge ruled on the Rossi Motion to Strike. To review, In the Second Amended Answer, Affirmative Defenses, and countercomplaint (Document 50), IH listed ten Affirmative Defenses, plus a paragraph on "additional defenses." Rossi, in Document 54,


    Quote

    ... request that this Court enter an Order striking Defendants’ Affirmative Defenses 1, 2, 3, 4, 6, 7, 9 and 10 or, alternatively, requiring Defendants
    to provide a more definite statement thereof; striking Paragraphs 126-133 of Defendants Second Amended Counterclaim as immaterial, irrelevant and scandalous matter


    A reminder for readers, an Affirmative Defense is a claim that a condition exists that makes the plaintiff's claim invalid even if the allegations of the plaintiff are true. I.e. As an example, the plaintiff having "unclean hands," or having violated the underlying contract, thus excusing the defendants' nonperformance. The first affirmative defense was that the Leonardo Corporation that filed the lawsuit (with Rossi) is not the Leonardo Corporation that was a signatory to the Agreement. Sloppy, eh?


    I am not now reviewing the IH final arguments, as we have the Judge's Order as Document 67, I will cover below. I might come back and expand this.