Rossi has spoken. We now have his case, in broad terms, and there is a whopper 'hidden' in the middle.
In the first part of his response, Rossi responds to IH's allegations. This is the longer section because IH put forth so many allegations.
Rossi's response in this first part can be summarized [edited by me, sigmoidal, to remove misattribution] as denying all alegations.
As such, there is not much to be learned in this first section.
The next section contains Rossi's affirmative defenses. This is where Rossi asserts his version of why IH is wrong. This is much more informative, as it reveals the case Rossi would try to make to a jury, should the case ever make it that far. Rossi makes 14 such affirmative defenses. I am not a lawyer, but nonetheless I've attempted to summarize them here as I understand them, and briefly opine on their merits. If you'd like to skip to the good part, see 4) below.
1) Voluntary payment. I understand this to essentially mean: "Since IH paid the 11.5 Million to Rossi voluntarily, it's Rossi's. IH doesn't have any basis for getting it back." This might be true if there were no violations of contractual terms, and if there were no fraud. However, IH laid out numerous contractual failings for the 10 million, at least. IH will have to prove breaches of contract, but if successful, I don't see how this defense can be successful for anything but the initial 1.5 million payment.
2)Estoppel, waiver and laches. Here Rossi claims that IH fraudulently induced him into the contract with no ability or intent to pay. This gets to the heart of Rossi's story. He's going to try to make the case that he was suckered into the deal assuming IH had the ability to pay. And he's going to try to make the case that the reason IH is counter suing him and making all these 'false claims' against him is that from the beginning, they never intended to pay, and in any case could not pay him. He then specifically gives an example regarding the 'secret sauce' and Rossi and Cook's scientific article.
This example regarding Cook's publication seems to me to be an absurd defense, since their agreement clearly assigned all rights to IH, limited Rossi on disclosure, while not limiting IH disclosure in any way.
He then claims estoppel, saying that IH understood that the 1 year test was indeed a GPT, behaved that way, and only objected at the end as part of their clever scheme since they never intended to pay.
No evidence to support this is provided.
3) Unclean Hands. IH "never had the means, nor the intention..." to pay. No evidence provided.
Although this seems like a weak defense, it might be the best one Rossi has. However, this is unlikely to succeed, because we know from their tax filings that they had (and presumably still have) 50 Million available. While not the full amount, given their history, it seems unlikely that a jury would conclude that they couldn't raise the additional 39 Million. Further, Rossi sued them before any payment could have been due, had his version of the story been true.
4) Ratification. Rossi states that "prior to agreeing to the Term Sheet, IH had knowledge as to the facts and circumstances to which they now complain".
This short and simple Affirmative Defense is actually the most interesting Affirmative Defense of them all!
Why? Because it shows us that he really is making the absurdly ridiculous assertion that the Term Sheet is the GPT agreement! Now we finally know for sure. He really is going to try to make this case that he rightfully should receive the 89 Million payment based on the Term Sheet. This is so informative because it reveals that there is no other document for a GPT! If there were another document, he would have certainly referred to it in this Affirmative Defense No. 4 (or elsewhere). But he doesn't. This is remarkable. I think this the clearest evidence yet that Rossi is insane. We know he himself presented this Term Sheet agreement as a "masterpiece" to IH when he created it - it seems he believed his own lies!
I think the Term Sheet as GPT agreement "speaks for itself" as Rossi (or Annesser) frequently says in this response. But it needed any further context, IH has provided it in their response and counter-claims.
5) Antecedent breach. IH demands for E-Cat licenses were made prior to final payment
I'm not sure how relevant this is, since there are no E-Cats to license or sell. In any case, the 10M payment was for the IP, with IH claiming Rossi didn't deliver, or didn't work (or both).
6) No 'certificate of authority' for a foreign corporation.
Now we're well into the "throw everything on the wall to see if anything sticks" territory.
7) Acquiescence. Reference 2 above.
ibid. Why try to make this point twice? I would think this makes Annesser look sloppy.
8 ) Judicial estoppel. IH asserts Leonardo lacks standing, but IH is suing Leonardo.
Well, maybe... But they're also suing Rossi individually. One or the other (or both) are getting sued.
9) Lack of Capacity. IPH has the rights, not IH.
Here is the defense we could anticipate from Rossi's Motions To Dismiss: IH is not IPH and can't bring suit.
More 'see what sticks' (SWS)?
10) Merger and Integration. More SWS
11) Failure to Mitigate Damages. Here we see Rossi alleging that IH did not take any steps to mitigate damage even though they "knew well before Feb 15, 2016 that Rossi and Leonardo could not achieve GPT"
This might be an effective defense if there was a credible signed GPT document. But now we know that Rossi is asserting that the Term Sheet IS the GPT agreement. Good luck with that! Also, in order for this defense to prevail, it would need to be true that 'Leonardo could not achieve GPT'. If this defense succeeds, isn't that a pyrrhic victory of sorts? I.e "You're wrong because you knew this GPT was a scam long ago". Maybe this is the Bob Dylan "If you ain't got nothin', you got nothin' to loose" defense.
12) Recoupment and Set Off. Argument to limit damages IH should receive from Rossi (if any) due to 'prior breaches' (by IH) of the license.
13) Modification. IH's 'conduct and oral agreements' agreed to a year-long test which they are now claiming breach and non-performance.
This seems like a repeat of 2) above. In any case, it confirms that there was no written GPT. This defense just confirms the most important information (Defense #4) regarding this entire response.
14) Promissory Estoppel. This sounds more like a summary then a new defense. It repeats defenses 2, 3, 4, 7, 11, and 13, some of which are repeats themselves (7, 13). To me this makes Annesser look flailing and clumsy.
Finally, there is information in what does NOT exist in the defenses. For instance, there is no allegation that IH accepted payment for any of the heat per the Term Sheet. If they had accepted payment, surely Rossi would have used this as evidence that they agreed to the Term Sheet. But he does not.
Abd postulated a Wabbit in order to make contingencies on conclusions, given the lack of information. Actually, I think he would agree that there are two wabbit contingencies: 1) A signed, valid GPT (not Term Sheet) is a definite wabbit; 2) A real JMP company using real heat to make a real product is another wabbit.
Of these, Abd argued, and I agree, that really the first is the only one that matters legally in this court case. What Rossi's response shows is that there is no wabbit #1. We don't really need to provide that contingency any more. Rossi has no hope of winning this case. At this point, it seems it's only a matter of how badly he loses the case (damages paid to IH).
From my perspective, we now know that Rossi has no realistic hope of prevailing in this legal action.
Wabbit #2 would be a nearly incomprehensible win for LENR and mankind generally.
Sadly, I believe this response by Rossi makes the probability of wabbit #2 existing at least an order of magnitude less likely than the already minuscule probability of before.
P.S. Abd, I for one, miss your commentary. It would be much higher quality than mine.
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