With Rossi, an emphatic No means “I can get away with saying this.”

Thanks to LENR Calender, I noticed this question on JONP:

Alberto
April 15, 2017 at 1:23 PM

Dear Dr Andrea Rossi:
In a blog has been published that the firm USQL, of Engineer Fulvio Fabiani, belongs to the same trust that owns Leonardo Corporation (Florida Energy Trust): is it true?

Andrea Rossi
April 15, 2017 at 2:05 PM

Alberto:
It is totally false that the company USQL belongs, directly or indirectly, to any trust that owns any quote of Leonardo Corporation. If any blog has published this information, it must be clear that:
1- this information is false , therefore who published it is a fraudolent bloggist, probably paid to make a so blatant falsification. Should he, or she, be a journalist, for such a falsification this fraudster would have been fired.
2- this information gives the measure of the low level of the puppets
3- the ownership of USQL has been published in the deposition sworn by Eng. Fabiani, that has been disclosed in the pacemaker of the Court. The ownership of USQL is also very easy to verify in the published documents and in the public register of the USA companies:also such document has been published in Court.
Clearly our foes, not having true arguments to make their case better, are now recurring to false statements.
Warm Regards,
A.R

In many court documents, I’ve seen recently, Rossi makes statements that other statements are false (“disputed”) when the reality is that the statements are true, as stated, but Rossi restates them to make them arguably false. There is — or was — a relationship between Florida Energy Trust and both USQL and Leonardo Corporation (Florida). In a deposition, Rossi is unclear about who owns Florida Energy Trust, but he thinks he is the sole beneficiary. The owner of Leonardo Corporation (Florida) is Florida Energy Trust, to be sure.

That is, the ownership of LC (FL) is different from LC (NH) which was owned entirely by Rossi. This then creates some problems, because LC NH was party to the Agreement, the First Amendment, and then the proposed and failed Second Amendment, and Leonardo FL, which existed from 2010 on, i.e., at the same time as LC NH was signing with Industrial Heat, has separate ownership (even if Rossi is the beneficiary). Rossi claims that NH merged into FL, but … when is unclear.

Rossi’s response to the IH Motion for Summary Judgment is completely inadequate on this. No evidence is shown of the merger. There is other evidence to review, to be sure, but …. what do I immediately find now?

First of all, Florida Energy Trust (FET) was reported as 100% owner of Leonardo Corporation for 2012. What Leonardo Corporation? The EIN is 90- 0780933. The address of the corporation is c/o Andrea Rossi, 1331 Lincoln Road, Unit 601, Miami Beach FL 33139. We know there was a $1.5 million payment to LC (NH, from the Agreement) in 2012. This is greater than the entire income of the Leonardo reporting. The return is signed by Travis, the New Hampshire accountant.

The 2013 LC return shows the same EIN, address, and FET ownership. We know there was a payment of $10 million to LC (NH?) in 2013. This is, again, much more than the entire income reported for this Leonardo. (The original return apparently claimed about $3 million in income. The amendment reduces this to less than $1 million.) There is also a deduction for “Florida taxes.” This is not conclusive but indicates a Florida corporation.

I conclude that this return is for Leonardo Florida, in spite of the accountant being in New Hampshire, and that the IH payments went into Leonardo NH. Rossi simply continued to use the same accountant for 2012. These returns do not cover the IH payments, but Rossi claims a merger, which would merge all the income and expenses as well. If so, the merger happened after 2013. It is possible there is evidence re the merger somewhere in the mountain of documents recently filed.

Then, from that 2013 return, LC Florida loaned $35,000 to USQL. It also shows an “investment” in a MW Plant of $1,248,617. Given that Rossi sold a 1 MW plant to IH in 2013, and was not known to have another, this is very odd. In any case, the $11.5 million paid as directed by Rossi did not go to LC FL, but likely to LC NH.

Now, USQL. This is their 2013 incorporation document.  It shows the Registered Agent as Johnson. Yes, the same Johnson. Two Managing Members are shown: Fabio Fabiani and Florida Energy Trust. I understand that his is unusual for a managing member of an LLC to be an organization.

The office of USQL is the Rossi address above (including Unit 601)

This is a 2014 reinstatement for USQL. It still shows FET as a managing member. 2015, the same. The same Unit 601 address. The 2015 return was filed March 3, 2015. The Doral plant was in operation.

2016, however, FET is dropped, same in 2017. The 2016 report was filed February 23, 2016, and the address was changed to Unit 401. The 2017 report was filed about a week ago, still with the same address, Unit 401, though Fabiani is known to now be living in Russia. Johnson is still the registered agent.

Now, what Rossi wrote. It’s more or less correct, as to the present state, perhaps, but it is the “less correct” that is something so common with Rossi. From his vehement denial one would think that there was no connection between FET and USQL. However, there was a connection. It was dropped at about the time of the end of the GPT.

What happened to the $35,000 that LC (FL) loaned to USQL? The Leonardo tax returns we have — which may not be all the “Leonardo” returns — contain numerous red flags that I’d expect an IRS auditor to be interested in, and this question about USQL is of some small interest.

Not a large interest. Why Rossi didn’t just say the truth could remain a mystery, except that deceptive claims that are in some way true seem to be SOP for him. A simple response would have been “At one time, FET was a manager of USQL, along with Fabio. That was dropped in March, 2016.”

However, around this time, Fabiani’s equipment — his computer and electronics — was thrown outside at the Plant, Fabiani retrieved it from the trash. He writes to Murray, shortly, that Rossi thinks he is a spy. He’s lost his job. When Rossi filed the lawsuit, I think he saw the train coming down the track, and got out of town, even though he is still using the condo as address (apparently, it’s owned by Rossi). He is more or less screwed, but I hope that he saved enough to see him through.

Fabiani was a friend of Rossi’s wife. That’s how he got involved. He seems to have remained loyal to Rossi, and it is not clear whether or not he knew about the frauds. I think his Lewan interview that I previously reported on was sincere.

Rossi is paranoid, hair-trigger reactive. Someone on a blog mentions an obsolete fact — I had seen this and may even have repeated it, though I was not the source — and he starts frothing at the mouth.

 

Fanning the flames

The December 2015 letter from Annesser, Andrea Rossi’s attorney, to IH counsel Jones Day, I find of high interest. Instead of attempting to negotiate a settlement of a rapidly-escalating dispute, Annesser fanned the flames.

He was, it’s true, advocating Rossi’s positions, but including Rossi’s gross misunderstandings and errors, and apparently not doing his own due diligence.

It appears that Annesser either did not understand the issues or was unwilling to distinguish between fact and interpretation. He treats the Rossi opinions and claims as established fact, and the IH opinions and claims as “disengenuous.” He pretends that matters are completely clear but, when it comes time to establish fact with sworn testimony and documentary evidence, are thin to non-existent.

It was always a puzzle, as soon as we saw the Complaint, why there was no allegation of the Second Amendment required written acceptance of the start date of the GPT, but only vague and indirect evidence, such as participation of Darden in reviewing the test plans of Penon. We did not learn until recently that Ampenergo never signed the undated Second Amendment, something that was obvious from the document included with the Annesser letter.

I had wondered if Annesser had noticed the problem. I also wondered if Annesser had accidentally included the Johnson OFAC document with the License Agreement, which revealed the customer identity. The lawsuit, and Annesser responses to the IH Motion to Dismiss, showed me that this was not a sophisticated attorney; rather, he was more like a hired thug, whose job was to attempt to intimidate the opposition.

So, anyway, here is a paragraph by paragraph analysis of that letter.

Page 1, paragraph 1, terms the IH claims “misstatements.” The difference is one of interpretation, and the fact here is that IH’s interpretation of facts differed from Rossi’s. Calling them misstatements rather than variant intepretations was slighly pugnacious; I personally wonder if Annesser understood the issues, or if he was merely proceeding based on Rossi’s rants. (We get to see Rossi Rant in some of his depositions.)

Paragraph 2 “There is no merit whatsoever” simply denies the IH position, ostensibly about the ERV and the GPT, confusing the use of Penon as an Engineer Responsible for Validation, who could be engaged for such entirely distinct from a “Guaranteed Performance Test.” A case may be made, it’s reasonable, that IH either directly supported or allowed Penon to be “engaged.” The legal question, what we used to call ages ago the $64,000 Question — it is now more than $64 million — is whether or not the power installation is a GPT. In all the documents asserted by Annesser, now, there is no evidence that Darden or IH ever accepted Doral as a “GPT,” and certainly they did not do so as a written consent. The strongest comment I have seen so far, dug up from an email to a Texas Instruments engineer, was a reference to the upcoming plant move as being a long-term test, required of Rossi. Required for what, though, was unclear. There are reasons for an agreement to specific written agreement, it is precisely to avoid controversies like this.

Page 2, Paragraph 3. Contrary to Annesser’s assertion, there is no assumption that the ERV is the same for both tests. The way the Agreement was written, there is the possibility of a continuation, it seems to be a default; however, the Second Amendment, allowing postponing the GPT, covered this with the requirement for written agreement on the start date. Any party could decline to sign, thus requiring further negotiation — and that withholding of agreement could potentially be for any reason. Because of this, many on Planet Rossi have claimed that the Agreement was unfair to Rossi; however, if IH, as an example, had unfairly defeated the purpose of the Agreement by unreasonably withholding consent, the matter could have been arbitrated or adjudicated before starting a “GPT” without a clear agreement.

It is common for business agreements to be unclear in ways that can lead to difficulties later, if the parties cease cooperation. What is apparent is that Rossi, before the December letter, had ceased cooperation, and Annesser apparently does not recognize this; at the same time, Annesser was supporting the refusal of access to the Doral Plant by IH as specifically requested, as allowed per the Term Sheet that Rossi and Johnson had signed. By refusing access, Rossi was effectively guaranteeing that IH would not accept the “ERV Report.”

It appears from documents that, while IH considered that the time had passed for the agreed GPT, they were still willing to pay for performance, but this would clearly mean “performance satisfactory to them.” Rossi did not seem to understand the importance of that, but was attempting to force IH to pay even if the conditions created by Rossi behavior made it impossible for them to raise the funds to pay. A good attorney would have explained this to Rossi and would have negotiated with Jones Day, especially in determining the basis for the Jones Day positions.

Paragraph 4. Annesser quotes the “agreed to in writing between the parties” clause, but, remarkably, does not point to or claim any written agreement on the start date. And he refers to the attached Second Amendment, which is not “agreed to in writing between the parties.” Did he notice what was missing?

Paragraph 5 has it that agreement was “unambiguous and clear that the current testing is, and always has been, being conducted as the Guaranteed Performance validation. Any claim to the contrary by your clients is disengenuous.”

For something allegedly unambiguous and clear, hard evidence has been elusive. By taking a pugnacious stance, with this mail, Annesser was sealing the rupture between Industrial Heat and Rossi. It may have been inevitable, if Rossi has been a fraud from the beginning, but if Rossi was not a fraud, the Annesser intervention probably guaranteed that Rossi would never again be able to raise substantial funding. No sane investor would risk it. And if Rossi really had something, a good attorney would have encouraged and facilitated finding ways to show that, to enable IH to raise the funding needed to pay Rossi and continue development. It’s obvious: if Rossi could not or would not show IH how to actually make devices that pass fully-independent testing (no compromises with Rossi’s paranoia), Rossi was doomed to business failure.

Paragraph 6 was Annesser’s joining Rossi in his patent paranoia. The position taken was completely incorrect. That patent was filed, I’ve understood, because the Lugano report was about to come out, and would have taken the IP into the public domain. Rossi did not write the patent, it was filed by IH, as something the Agreement allowed them to do, to protect the IP. The Dameron co-inventor issue was a choice made by IH, as IH made the Lugano reactor and Dameron may have made some contribution, even if very small, and that was merely a necessary legal precaution. Nothing was taken away from Rossi’s property; but it injured his fantasies. As a result, Rossi refused to assign the patent as required, thus violating the Licence Agreement. Way to go, Annesser, encouraging your client to violate an agreement, creating one more prior breach.

(Rossi has often claimed that IH only objected when it was time to pay. That was just another lie by Rossi, one of a stream of them. IH, in fact, objected many times, in many ways. By December, 2015, still two months before the end of the test, and over three months before the alleged “time to pay,” IH was formally objecting, and clearly because the Rossi claim to “GPT” had also become explicit. When that happened, exactly, is not yet clear to me. But the first action by Rossi that began the clear rupture was the refusal to admit Murray to the Plant in July, 2015. At that point, I imagine that IH was scratching its collective head, wondering how to deal with this bridge too far.)

Page 3, paragraph 7 continues to call “clear” what is not. The aspects of the lawsuit that covered this “Dameron co-inventor” issue were dismissed as part of the IH MTD (dismissing four out of eight counts in an MTD prior to discovery was a remarkable success rate), so we have not seen evidence on that. However, just as that patent was precautionary, so too the co-inventor issue was precautionary. Annesser, however, goes further to deny any right to “underlying IP” or “further developments,” which appears directly contradictory to the License Agreement.

Paragraph 8 goes into the issue of patent applications outside of the “territory.” This was, again, legally incorrect. Patent applications are never patent infringement, and all those applications, if I am correct, listed Rossi as inventor. Again, IH whacked that claim with their MTD. This was all fueling the fire, helping convince Rossi that he was right, that IH was attempting to screw him over.

Paragraph 9 deals with an alleged restriction, based on the language of the License Agreement, section 1, but … Annesser has missed the next words in that section, providing for the right to grant sublicenses, and also, the Right of First Offer, providing contingent rights in other territories, thus giving IH an interest in proper patenting outside of the licensed territory, and, as well, the Agreement granted rights with respect to any future developments.

Paragraph 10 is an argument over language. What is clear is that the License was granted upon the payment of $1.5 million and then $10 million. The GPT set up a conditional additional payment, but because it was possible that the GPT would not occur, that cannot be said to be truly the “price.” Rather, it was one of the considerations of the Agreement. Yes, the IH communication could be considered an “anticipatory breach,” so the legal concern is obvious. However, it would be rare, in good-faith business dealings, that a letter like Annesser’s would be appropriate. Rather, what would be crucial would be to open up communications, to seek common ground and mutual benefit. Annesser did the opposite.

Page 4. Annesser proposes a meeting with between his clients and Jones Day and their client. That would likely have been a waste of time. However, Annesser and Jones Day meeting could have been a great idea. On the other hand, by encouraging Rossi to authorize him to file the lawsuit, he created a huge pile of billable hours. It may have seemed like a great career move. Even if his client ends up being totally effed.

Who made the decision to include as defendants Cherokee, and Darden and Vaughn personally? That almost fell to the MTD, but Altonaga took as fact the Rossi claim that Cherokee was owner of IH. That decision guaranteed that Cherokee funding would be available for defense, and it also probably guaranteed that even if Rossi somehow won the suit, no corporate money (or money from those involved with major corporations) would ever again touch him. Maybe he could crowd-fund his future projects.

 

Appeal to consequences

Appeal to consequences is a well-known logical fallacy, amply present in the Rossi objections to the IH SOMF (statement of material facts). I have begun to compare the IH SOMF, a crucial part of the Motion for Summary Judgment, on this page.  I have looked through Paragraph 25, so far. While Rossi disputes many of the claimed facts, these are not actually disputes over the facts, which are, as expected for a MSJ, simple and clear. Rossi doesn’t like the consequences, so quibbles over inconsequential details of wording, with many irrelevancies. The most devastating effective admission, so far, is a showing that Leonardo NH and Leonardo FL were separate corporations, and, so far, no evidence of the claimed merger has appeared; rather, the opposite. They were, and apparently remain, distinct corporations with distinct ownership and state identities.

This is a formula for setting up the judge to reject all arguments. A good judge might be able to avoid that inertia, but judges are, indeed, human. Give them a series of spurious arguments, a real argument might be lost in the noise.

Mats Lewan buys condo in Cloud Cuckoo Land

Well, that headline is perhaps a bit dramatic. But, I’ll confess, I was shocked by seeing the following from someone whom I had treated as a friend, long into the past (back in my Wikipedia days), and with whom I had positive correspondence.

I had been considering writing a post about a Lewan blog entry that was mentioned in a comment here.

Rossi’s engineer: ‘I have seen things you people wouldn’t believe’ (November 25, 2015)

After an interesting interview, which reveals that Fabiani clearly believes that Rossi’s work is real — and that he has seen amazing things — Lewan gives this:

Since mid-February 2015, Rossi and his US industrial partner Industrial Heat are running a one-year commercial trial on a customer’s site with a heat plant producing 1 MW. The plant is made up of four 250kW modules, each based on E-Cat technology. Unless something unexpected happens, the trial, which is controlled by a major independent third party certification institute, should be concluded by February or March 2016, and the results should then be presented.

In the comments, Lewan explains a bit:

November 25, 2015 at 11:25
@Slad
Everyone I have talked to confirm that a major independent third party certification institute is involved in the control of the 1-year test and that this institute will also be able to confirm the results when they are presented. I have no further proof though.

Mats does not tell us — at all — who “everyone I have talked to” is, but we know he talked with Fabiani, who would know of the involvement of a “major independent third party certification institute,” and we know he talked to Levi, who might have known of such. And did he talk with Rossi?

Since there was no such institute involved, only Penon, we know that Lewan relied on unreliable sources. He does acknowledge having no “further proof,” but that’s weak. It implies that the evidence for what he wrote was strong. That’s not the only problem.

IH allowed the installation, but as a sale of power, and only secondarily as a trial, with the idea that if Rossi clearly demonstrated to IH that there was substantial power generated, they might voluntarily pay him $89 million on that basis. The Doral demonstration was not the “Guaranteed Performance Test” of the IH-Rossi-Ampenergo Agreement, because Ampenergo explicitly refused to sign the Second Amendment allowing the GPT to be postponed. Rossi covered up this fact in his Complaint, though it was obvious from the start that the Ampenergo signature was missing. The Rossi attempts, in his pleadings, to convert some kind of vague consent to a test into the specifics of a GPT, even though there were obvious elements of a GPT missing; and not only signatures, but matters of substance, such as the ability of IH to actually observe the “test” in detail. Rossi excluded IH experts, twice (in July and in December).

The whole thing stunk, from lies about the customer at the start, to what appears now to be a hastily-invented “heat exchanger” that nobody saw, and that would have been very visible. Yet Mats is still stuck in his glorious past, where he was the world’s foremost confidant of Andrea Rossi. He wonders about conflict of interest, but has a huge one, a subtle one. When people criticize Rossi, or threaten his interests and plan in some way, he cuts them off, and he had done this over and over, and Mats knows this behavior. If any of the Lugano team had questioned what Levi and Rossi were doing (and Rossi was apparently there the whole time, and the Swedish team, not, not what the Lugano Report implied), they’d have been history.

Mats has never cleaned up that mess. Believe me, if I find a major error here, even years later, I will at least annotate it. That is what a responsible journalist will do, if he or she can.

So then we have this sequence on E-Cat World:

Critique of the Smith Report from the JONP

Mats LewanSunday, April 9, 2017 9:54 AM [post time extracted from HTML]

I think there’s a list of advisors to IH somewhere. Anyone remember where it is?

Andreas Moraitis Mats Lewan • a day ago

214-23, p. 7.

That is here. It was actually a list of potential places for investment, and then included a list of advisors. None of this was a description of actual payments. Jed Rothwell is on the list of advisors, and has continually maintained that he has received no payments from IH, but this was used to, once again, accuse him of being paid by IH. He is known to have visited them in North Carolina, and that was then misinterpreted to indicate that he had visited the Plant in Florida (which he has always denied, and which would then make a certain IH response to interrogatories into perjury — unless Rossi arranged the visit, which seems a tad unlikely, given that Rossi excluded Rothwell from visiting him in Italy years before — and in spite of that, behind the scenes, Rothwell was a supporter of Rossi, arguing that people he trusted had seen the technology and it was real). Rothwell later reassessed that opinion, apparently after seeing data from Penon, which had all the obvious defects that have become public now, with the court filings.

Lewan is clearly not using the Rossi v. Darden resources here. They may be searched. The core page is the Docket page. Yes, it’s a huge amount of information. So resources are being created for analysis. That takes time. We just had a huge amount of data dumped on us. Much of it is redundant, but then, much is not.

The best organization is probably found in the Motions for Summary Judgment, where each party puts its best and strongest case forward. I was going to start with an analysis of the Rossi MSJ, but the exhibit references were such a mess (almost all incorrect), and it depended so strongly on a legal claim that has failed, the attempt to exclude all IPH claims based on an allegedly defective corporate deposition, that my opinion became that making it the core of a study would be a waste of time, so I started with RvD: Study of 203:IH Motion for Summary Judgment

This document also includes all the support paragraphs from DE 207. This is the case as it appears from the IH Motion. Anyone who actually wants to understand Rossi v. Darden would do well to study this. But it’s huge, still. I will be going through it, point by point and the first analysis will be looking for what is clearly established as fact, and what is not, what might remain legitimately controversial. At first impression, some of the IH claims are that, not as clear as required for Summary Judgment, they might require determination of fact by a fact-finder, i.e., a jury. However, there are many layers to this IH strategy, and the strongest aspects are likely to blow the Rossi case out of the water, leaving only the counterclaims active. At that point, settlement becomes far more likely.

Now, to come to what astounded me, though I’d certainly seen signs a year ago, that Mats was falling for a conspiracy theory, in spite of his warning to Sifferkoll.

Mats Lewana day ago

Anyone knows what the rules are for presenting evidence that hasn’t been brought up earlier, when the case goes up in court in June?

Josh G Mats Lewan • a day ago

Go ask Abd. Double dare you. (-;

Mats Lewan Josh G • a day ago

BTW do we know if Abd works for IH or not?

Once upon a time, Mats was a reporter and would have asked me that question directly. Now he asks with a “we” that is a narrow group of people. IH would obviously know if I work for them, and so would I, so, for starters, I’d be excluded from “we” or the question would be meaningless. This question was brought up many times, and Rossi himself accused me of being a paid puppet.

At one time, Mats was officially staff at LENR Forum. That disappeared. This blog is open for anyone to comment, and author privileges will be granted to real people, and Mats is real. Even if a bit deluded. This went on.

Josh G Mats Lewan • a day ago

Not sure but I don’t think we’ve seen any evidence to support it other than his quixotic behavior on IH’s behalf. But I stopped following things for quite awhile until the mid-March filings. So not sure.

SG Mats Lewan • 19 hours ago

I think he claimed that he has been paid to blog by somebody, but not IH.

I am attempting to respond there, the editor keeps locking up. But this would be it:

I suppose I should correct this. I have not been “paid to blog” by anybody. I was collecting documents and putting them in the filespace for the newvortex list, and an attorney, not connected with IH at all, offered to pay my PACER expenses. I have received a total of $50 so far, I may ask for more, and another person, also not connected with IH other than being long-term interested in LENR, has offered additional support, enough that I will probably be able to go to Miami to cover the trial if it happens. Enough to cover my travel, I may still need more to cover details like hotel.

I later started the blog when I was temporarily banned on LENR Forum, and then got serious about it when the newvortex archive became unusable (a yahoogroup problem) and LF banned me “permanently.” (Fun question: for what?)

One of the functions of the blog is to build analytical resources, as distinct from endless debate that goes nowhere, i.e., Blog Normal. This is intended long-term for general cold fusion issues, but is currently being used for Rossi v. Darden.

Mats would be most welcome as a participant, but he lost his status as a neutral analyst some time ago. He could recover, if he chooses to. It would take some work, and his excuse has been that he is too busy. It would be fun to guide him through the maze of documents in the case. One step at a time, which is rarely done. Mostly people start with conclusions (on more than one side — I hope that readers realize there are more than two “sides” here).

As to Mats’ question, others have answered reasonably, but not necessarily addressing the point clearly, and Mats himself summarizes it incorrectly:

Mats Lewan GiveADogABone • a day ago

In fact, I don’t interpret it as a blanket ban. Rather that most of the evidence is presented during discovery. But it doesn’t exclude some evidence to be presented in court, as long as it doesn’t contradict earlier depositions or testimonials, I guess.

It’s somewhat shocking that Mats will guess, but he declared previously that he did not have time to do actual research, the kind expected for a journalist.

The reality is that witnesses will be on the stand, and either side may ask them questions, and they may answer outside of what they said before. However, if what they say is new, an attorney may object. To introduce new evidence will require the permission of the Judge. It is not exactly a “blanket ban,” but failure to disclose evidence to the other parties can result in sanctions, all the way up to total dismissal of a party’s case.

“Contradiction” is not a characteristic of evidence, but of the assessment of evidence. Evidence could not be excluded based on contradiction. Rather, if there is contradiction in admissible evidence, there can be a question for a jury to resolve.

However, what may not be realized here is that the Motions for Summary Judgment do not necessarily disclose all the evidence. Rather, there is a huge volume of evidence — truly enormous — that was disclosed in discovery. As long as it was disclosed, it may be introduced at trial. What is disclosed in discovery is generally attested under penalty of perjury.

IH has adduced enough evidence, my present opinion — remember, I am in process of studying the materials — to obtain summary judgment on the core claim of Rossi, breach of contract re the $89 million, and if that claim is gone, so is the rest of his lawsuit. Because, then, there would be no trial on that claim, we can expect Rossi to go all-out in his Reply. We do have that Reply at this point, but I have not studied it. I will, comparing each point with the evidence we have.


Drama ensued. See the comments below. Someone apparently spoofed Mats Lewan, using his name and, most importantly, his real email address, so that the avatar displayed would be picked up from Gravatar, which we have enabled. The second post of this user started out more or less innocuously, but then the user edited it to add a gross sexual reference. Mats complained on LENR Forum, which is a bit odd, since I’m banned there and don’t necessarily see everything. However, THHuxleynew pointed out that post here. There are some aspects of possible interest in what ensued.

On LENR Forum, Mats Lewan wrote (creating a new topic)

ALERT:
Abd ulRahman Lomax yesterday posted a blog post at http://coldfusioncommunity.net…ndo-in-cloud-cuckoo-land/ commenting some of my actions and reports.
Under the blogpost there are comments made by Mats Lewan.

These comments are NOT made by me.
They are false and fraudulent, made up in short, and if Abd ulRahman Lomax reads this, I expect him to delete those comments immediately.

Apparently I read the second remark before it was edited to add the truly offensive remark. The rest of the material in those posts matched, at least to a degree, what Mats had posted elsewhere. Impersonation is still a major public offense, not to be tolerated. I might have some view that I might express in one context, but may not want to express it in other contexts, and that should be my right. But trolls may disagree.

THHuxleynew wrote:

Mats – perhaps you could post this on Abd’s site. It will immediately let you do this – I think. Then he would certainly get it, and also he could check IP etc… Furthermore the correction gets seen faster than if you wait for Abd.

THH was completely correct. Mats’ response was relatively unskillful. The basic harm — someone thinking that was him — could be most quickly addressed by Mats himself posting a comment exposing the impersonation, and confirming this by email from his known email address. Because Mats has not posted, his first comment would need to be approved, though it might be approved simply by using that same email address. (It was on his personal domain, and he obviously uses it wherever the gravatar shows up.)

Posting on LENR forum then drew more attention, exactly what trolls often want, and the obscene comment was then repeated there, and obviously was read by moderators who didn’t care.

Alan Smith wrote:

THHuxleynew wrote:

Mats – perhaps you could post this on Abd’s site.

I don’t expect that to happen in a hurry.

Classic Alan Smith, useless snark. Why not? I used to have direct email communication with Mats. Has Mats fallen into a Krivit hole? I will agree in one way, it is odd that Mats did not communicate directly with me. Maybe the fumes on Planet Rossi finally created too much mind-rot. It would also have been somewhat effective if Mats had responded to my comment on E-Cat World, in reply to his question there, since I get notification of responses.

THHuxleynew wrote:

Alan Smith wrote:

I don’t expect that to happen in a hurry.

I’ve done it for him. Though why he should not be able to do it himself is beyond me.

And indeed THH did post here, something actually useful. Alan Smith continues to emit smoke:

Able but unwilling I expect. I would be too.

Yes, Alan would be. Why? For the same reason that Alan Smith banned me from LF: he can’t stand my presence, he knows I can see what he does. So all this does come up:

AlainCo wrote:

Abd answered and leaked the IP of the fraudster

http://coldfusioncommunity.net…cuckoo-land/#comment-2382

[This link is a bit better, juicier. –Abd]

If there is disagreement with Abd, I estimate it is more about Doxxing/Transparency/Shaming vs Privacy than about tolerance to fraud.

Thanks, Alain. Zero tolerance here for fraudulent posting (which is not about disagreements, nor would it be about ordinary socking. Socking that impersonates another is generally illegal, and Mats had good reason to expect me to correct the situation. He wanted me to delete it. Because there were responses, I elected to not delete, but changed the user name to “(spoofed) Mats Lewan,” and used strike-out for the text, only actually deleting the obscenity. I think it is of interest that someone would spoof Lewan, and I think that it could be useful to find out who that would be.

And that is why I revealed the IP. I also have more data, obtained from the server logs. True administration at LENR Forum would very likely be able to identify the fraudster, at least with other accounts. However, what I found was that not only do moderators there not have access to IP information, neither do administrators; someone has server access, and that is probably Barty and the Owner. So if Barty wants to address this, he could. I’d happily correspond with him. I have also provided the information directly to Mats.

This is all standard stuff for WikiMedia Foundation administrators, and I was one. Privacy is respected, but the right to privacy is lost when one commits certain offenses. (Access to normally private IP information is confined to Checkusers and others with that level of privilege on WMF wikis, but any stand-alone blog owner, running on their own domain, has access to that information, it is in the raw server logs.)

LENR Calendar wrote:

THHuxleynew wrote:

I’ve done it for him. Though why he should not be able to do it himself is beyond me.

Abd wouldn’t be able to tell which user is the real one. Mats here has been verified.

Oh, I was able to tell. I already had been suspicious about the IP, but Lewan accessing the internet from student housing wasn’t impossible, so I didn’t reject the post on that basis. Yes. The LF Lewan account is long-standing, thus verified, which I immediately knew; however, at the first plausible allegation of spoofing, I’d have quarantined that post so that it could do no harm, pending resolution. I also have had direct email communication with Lewan, and verification would be trivial.

There is no rush, but perhaps, out of this, Lewan will start to help clean up the mess that he helped to create. I’d be happy to assist. One easy step at a time.

From Russia, with love

DTravchenko
October 30, 2015 at 10:14 AM
Dear Andrea Rossi:

What do you think of the sceptics that continue to say the E-Cat will not work?
From Russia, with love,
DT

Andrea Rossi
October 30, 2015 at 12:40 PM

D. Travchenko:
Maybe they are right: at this stage I cannot exclude they are. Time is gentleman, we’ll listen from him the truth.
Warm Regards,
A.R.

On LENR-Forum, Paradigmnoia wrote:

Rules against doxxing prevent me from being explicit, but DT (from Russia with love) has signed off at least once with another pair of initials familiar to us.

Doxxing as an internet offense arose as a protection of anonymity, but not as an encouragement of sock puppetry, which is also normally considered an offense. Forum administrators have access to post information information that would normally reveal sock puppetry. As well, doxxing of “public figures,” i.e., internet identities revealed elsewhere, where the alleged “puppet masters” are public figures, has always been, on sophisticated fora, allowed and is even considered necessary. Consider Wikipedia articles about government officials “anonymously” edited from the office of the official.

LENR Forum has never acknowledged banning a user for “sock puppetry.” It has warned and sanctioned users for exposing sock puppetry (rightly or wrongly). “Doxxing” has no been clearly defined. Claiming sock puppetry is not, in ordinary internet-speak, doxxing. In this case, P. points to what I recall (but could not readily find) as an example where a poster on JONP apparently accidentally signed the post as “A.R.”

The poster in question has commonly posted under what may be a real name, DTravchenko, but the content has been pure Planet Rossi, using common Rossi tropes. Because this is all (AFAIK) on Rossi’s blog, JONP, only Rossi knows for sure, but … pointing out a clear fact, publically accessible, where, if the fact is true, does not reveal the true identity of an actual and unique person, not the known public figure, is not “doxxing.” It is attempting to understand the public record. If DT is Rossi, there is no person harmed by the revelation, i.e., becoming subject to harassment, as might have happened, say, with the doxxing of “Thomas Clarke.” However, even the Thomas Clarke case is bizarre. Thomas Clarke is a real name, so all that “doxxing” did was to identify the specific person with that name. Then the allegation can be made that Thomas Clarke continued to post using a pseudonym. Is pointing this out “doxxing”?

Because we think of “doxxing” as Bad, we want to fit the actions into a category, so we can know if it is Good or Bad. This is common — and defective — ontology. Revealing the pseudonyms of Thomas Clarke is a trivial exercise, anyone who cares can find out. Because Pseudonym is so trivially identified with the real identity — when that identity could have easily been hidden, it is not as offensive as some deeper doxxing with more possible real-life harm would be. For example, there is an English fellow who pretended to be a Muslim and who went on the pilgrimage, and who wrote about it. He used a pseudonym. Revealing his real-life identity could expose him to harassment or worse. That would be serious, and highly offensive doxxing.

If a professional supports Rossi, at this point, it could indeed harm their professional reputation. There is a lesser possibility of harm from any professional’s support of LENR. So I’m sympathetic to desires for anonymity; however, this is a double-edged sword. Anonymous testimony is only useful for creating avenues for confirmation, it cannot be accepted as truth (i.e., with probity depending on the character of the witness).

Some writers, anonymous, develop a reputation for reliability. There are a few anonymous writers whose analyses can — my opinion — generally be trusted, and a few real-name authors who are quite untrustworthy. So the whole issue is complex, not simple.

I was unable to find D. Travchenko in internet searches connected with LENR and Rossi, except as comments on JONP, and then quoted elsewhere. It would be odd for someone with such an intense and frequently-expressed interest in Rossi to not comment or show up anywhere else. That, together with the obvious Planet Rossi points of view, which are quite idiosyncratic (aspects may show up with any Rossi supporter, but there are particular modes of language that are common only with Rossi and certain possible sock puppets), indicates a likelihood that DTravchenko or DT (“From Russia with love”) is Andrea Rossi, setting up questions he wants to stand or to answer, but maintaining deniability.

If DT were to post on LENR Forum, for example, that would create administrative knowledge there indicating identity. The same with E-Cat World. Rossi may trust Frank Acland more, but ultimately, Rossi trusts nobody. How he treated Fabiani is appalling. One can see in the Fabiani correspondence how torn he is between his loyalty to Rossi and his professional responsibility (to provide information to IH, all set up by Rossi — the actual contract was between IH and USQL and a half-owner of USQL was Florida Energy Trust, which Rossi has claimed — or hinted, he’s not completely explicit, he left room for “plausible deniability” — is essentially him.)

 

Rossi refuses to comment on RvD. Yeah, right.

And, of course, E-Cat World picks up on it. So far, nobody seems to notice that there is no specified source for the factual claim, i.e., that Smith has claimed such and such. But first, an actual direct comment on case issues:

Mark
April 4, 2017 at 10:36 AM

Dr Andrea Rossi:
1- was JMC directed by you?
2- did IH- Darden know who was the director of JMP?
3- was the owner of JMC directly or indirectly a relative of yours?
4- did IH- Darden ever complain about the owner or the director of JMP before or during the performance test?
5- did you ever say or write that JMP was owned by Johnson Matthey?
6- did ever Darden-IH ask you who was the owner of JMP during the validation test?
7- did Darden use JMP for his promotion, knowing who was the director of it?
8- why Darden-IH have not been able to enter in the JMP area where the plant of JMP was installed?
Since these issues have been already disclosed in the documents published by the Court, can you answer?
Regards,
Mark

Andrea Rossi
April 4, 2017 at 1:37 PM

Mark:
Evidence in documents speaks for itself and says:
1- yes
2- yes, since 2014
3- no
4- never
5- never
6- never
7- yes, he demanded Jim Bass to give good reference to his investors
8- because the agreement between JMP and IH vetoed to IH to enter the area of JMP and vice versa
Warm Regards,
A.R.

Control the questions, you can control the answers to create desired impressions. The above is a direct comment on case issues, contrary to Rossi’s repeated intention not to comment. The questions are designed to allow him to answer with “truthiness,” but are highly misleading.

1- was JMC directed by you?

He now answers Yes, but I will be reviewing all his answers and comments on this. That JMC (-> JMP) was created and managed as Rossi’s idea, with Rossi being in full charge, with there being no independence other than purely formal — and that very weak –, is entirely contrary to the representations made in negotiations leading up to the Term Sheet and the later transfer, as well as many, many comments Rossi made on JONP, and his comments in emails where he had, for example, a talk with the Director of JMP, as if this were someone else, all of which is evidenced with documents from Rossi, as well as others entered as sworn testimony, in support for the IH Motion for Summary Judgment.

2- did IH- Darden know who was the director of JMP?

The real question would be when Darden knew. Rossi says much and the meaning can be vague. Rossi may be, here, assuming that because he said X, Darden therefore knew X. However, very much that Rossi said was in contradiction to X. Here, he acknowledges himself as Director. However, he has also claimed that Bass was the Director. But Bass was hired by, worked for, and was responsible to Rossi.

The customer was not at all “independent,” as repeated claimed by Rossi.

3- was the owner of JMC directly or indirectly a relative of yours?

On paper, no. In practice, it was Johnson, entirely following Rossi’s instructions. On paper, it was a trust created by a friend of Rossi, and who put in no money and took no part in JMC/JMP activities. Rossi created “plausible deniability.” But he also created impressions in the minds of others, quite the contrary of his later denials. Creating those impressions can be civil fraud. (Civil fraud does not require mens rea (evil intention), it could be inadvertent. If the false impressions were reasonable, i.e., they could be reasonably formed, civil fraud may exist.)

4 – did IH- Darden ever complain about the owner or the director of JMP before or during the performance test?

He did express concern. However, the question here would be intended to ask if Darden ever complained to Rossi about it. Until Darden knew the facts about JMC/JMP, fully, he’d have been unlikely to complain, but this depends on when he knew these facts. He apparently figured out that Johnson was Rossi’s lawyer, before the Plant was moved, and Darden concluded that a lawyer was unlikely to be lying, so he went ahead. That did not establish Rossi as the Director of JMP, because it continued to be represented, apparently, that there was a real customer, not Rossi, as owner. The identity of the owner was not disclosed, except that we see clear evidence that it was implied that it was Johnson Matthey, and Johnson participated in maintaining that impression.

5- did you ever say or write that JMP was owned by Johnson Matthey?

At the time in question, JMP was known as JMC, and there is clear evidence that the Johnson Matthey connection, very obviously implied in some way (and then Rossi said something like “I should not have mentioned them” — clearly implying that he had mentioned them. Where else did they get the idea?)

Rossi is lying here, and it is possible that this will be his most direct and deepest downfall.

6- did ever Darden-IH ask you who was the owner of JMP during the validation test?

JMP did not exist during the “Validation Test.” He must mean the alleged “Guaranteed Performance Test.” Darden already had information on the owner, from the OMC certification, and it was false, not true when Johnson signed that. The owner was not a “U.K. entity,” it was a U.S. trust, with Johnson fully in legal control of it.

7- did Darden use JMP for his promotion, knowing who was the director of it?

This is not established in the case, this is all Rossi Says. Rossi thinks that IH “promotion” is important. It is not. IH was deceived, willfully, by Rossi, and made comments on occasion reflecting that deception. Darden also expressed reservations, a concern about the alleged customer. Rossi never points to the contrary evidence, just to his own justifications and rationalizations.

8- why Darden-IH have not been able to enter in the JMP area where the plant of JMP was installed?

Because Rossi refused it. Rossi was in complete control of JMP. His answer here was:

8- because the agreement between JMP and IH vetoed to IH to enter the area of JMP and vice versa

Liar. The Term Sheet does not “veto” that. It does not mention the “area of JMP,” nor any restriction on IH access, even though later Rossi rejected IH access to the Plant, and Johnson supported this when access was formally requested in December. It also contains representations that were false when written and agreed to.

Since these issues have been already disclosed in the documents published by the Court, can you answer?

This comment shows a common Rossi trope. The court does not publish the documents, the parties file them and then PACER makes them available to the public. The parties derive “issues” from the documents, and Rossi is here presenting his defense. The defense can be false or misleading, but “documents” are, at this stage, sworn testimony. For the first time in the case, beginning with his depositions, Rossi could go to prison for making false or misleading statements.

More will be added later.

RvD: Study of 203:IH Motion for Summary Judgment

WORKING DRAFT

Study document

Text on this page is from Rossi v. Darden, filed 03/22/2017 0203.0_IH_Motion_for_Summary_Judgment (MSJ)

DEFENDANTS’/COUNTERPLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT AND MEMORANDUM OF LAW IN SUPPORT THEREOF

The Support document, 207, as imported and linked to the Exhibits, has been appended to the Motion here in order to simplify internal links and create a single study.

DEFENDANTS’/COUNTERPLAINTIFFS’ STATEMENT OF MATERIAL FACTS IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT (SOMF) with 75 exhibits. There are unsealed versions of some exhibits found with 04/06/2017 0247.0_IH_supp_207_MSJ previously filed under seal, see the Docket index for the lists of exhibits, annotated.

This document will reference citations in the MSJ so that claimed facts and evidence may be easily studied.

DEFENDANTS’/COUNTERPLAINTIFFS’ MOTION FOR
SUMMARY JUDGMENT AND MEMORANDUM OF LAW IN SUPPORT THEREOF

TABLE OF CONTENTS

Pagination refers to the original document, but anchors are used here.

INTRODUCTION … 1
BACKGROUND  … 1
LEGAL STANDARD … 2
ARGUMENT … 3
== I. Industrial Heat and IPH Are Entitled to Summary Judgment on Complaint Count I and AACT Count I … 3
==== A. Plaintiffs Lack Standing to Bring a Breach of Contract Claim Based on the Alleged Failure to Pay $89 Million under the License Agreement … 5
==== B. Rossi Intentionally Deceived Industrial Heat into Agreeing to Test Fewer E-Cat Units for the Validation Test in Ferrara, Italy … 5
==== C. Plaintiffs Breached the License Agreement by Failing to Abide by the Terms of the Validation Protocol … 7
==== D. Plaintiffs Breached the License Agreement Prior to the Date Plaintiffs Claim They Were Entitled to an $89 Million Payment Because Plaintiffs Failed to Achieve “Guaranteed Performance” As Defined By the License Agreement … 7
==== E. Plaintiffs Breached the License Agreement by Failing to Measure the Flow of the Heated Fluid During the Purported Guaranteed Performance Test … 10
==== F. Plaintiffs’ Prior Breaches of the License Agreement Entitle Industrial Heat and IPH to Summary Judgment on Count I of the Complaint … 10
== II. Industrial Heat and IPH Are Due Summary Judgment on Complaint Count III … 11
== III. Defendants Are Entitled to Summary Judgment on Complaint Count IV … 12
== IV. Defendants Are Entitled to Summary Judgment on Complaint Count VI … 15
==== A. Defendants Are Entitled to Summary Judgment on Count VI Because Plaintiffs Fail to Adduce Evidence of Separate Damages for Fraud … 15
==== B. Plaintiffs’ Fraud Claim Cannot Be Proven Because Evidence of Defendants’ Alleged Misrepresentations Is Barred by the Parol Evidence Rule … 16
== V. IPH Is Entitled to Summary Judgment on the AACT Count II … 17
==== A. Breach of Confidentiality Provisions … 17
==== B. Failure to Assign Licensed Patents … 18
==== C. Failure to Inform and Consult on Patent Applications and Abandonment of Patent Applications … 19
==== D. Covenant Not to Compete … 19
==== E. Failure to Pay Taxes … 20
==== F. Failure to Enable Replication of the E-Cat Technology … 21
== VI. Industrial Heat Is Entitled to Summary Judgment on AACT Count III … 21
== VII. Industrial Heat and IPH Are Entitled to Summary Judgment on AACT Count IV … 23
==== A. Rossi, Leonardo, Johnson, J.M … 24
====== 1. The First Part of the Scheme … 24
====== 2. The Second Part of the Scheme … 24
====== 3. The Third Part of the Scheme. … 27
==== B. The FDUTPA Defendants’ Deceptive Acts or Unfair Practices Caused Industrial Heat and IPH to Suffer Actual Damages … 27
== VIII. Industrial Heat Is Entitled to Summary Judgment on the AACT Count V … 28
CONCLUSION … 30

TABLE OF AUTHORITIES

CASES
Alhassid v. Bank of Am., N.A., 14-CIV-20484, 2015 WL 11216721 (S.D. Fla. Sept. 14, 2015) … 3
All Pro Sports Camp, Inc. v. Walt Disney Co., 727 So.2d 363 (Fla. 1999) … 12
Amer. Red Cross v. Palm Beach Blood Bank, Inc., 143 F.3d 1407 (11th Cir. 1998) … 12, 13
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) … 3
Beverage Canners, Inc. v. Cott Corp., 372 So.2d 954 (Fla. 3rd DCA 1979) … 3
Burger King Corp. v. Huynh, No. 11-22602-CIV, 2011 WL 6190163 (S.D. Fla. Dec. 5, 2011) … 3
Butler v. Yusem, 44 So.3d 102 (Fla. 2010) … 22
Celotex Corp. v. Catrett, 477 U.S. 317 (1986) … 3
Chatlos v. Morse Auto Rentals, Inc., 183 So.2d 854 (Fla. 3d DCA 1966) … 10
Cheezem Dev. Corp. v. Intracoastal Sales & Serv., Inc., 336 So.2d 1210, 1212 (Fla. 2d DCA 1976) … 10
D & M Jupiter, Inc. v. Friedopfer, 853 So.2d 485 (Fla. Dist. Ct. App. 2003) … 6
Deere Constr., LLC v. Cemex Constr. Materials Fla., LLC, 198 F.Supp.3d 1332, 1342 (S.D. Fla. July 2016) … 24
Del Monte Fresh Produce Co. v. Dole Food Co., Inc., 136 F. Supp. 2d 1271 (S.D. Fla. 2001) … 12, 13, 14
Destiny Const. Co. v. Martin K. Eby Const., 662 So.2d 388 (Fla. Dist. Ct. App. 1995) … 3
Diamond “S” Dev. Corp. v. Mercantile Bank, 989 So.2d 696 (Fla. Dist. Ct. App. 2008) … 11
Eclipse Med., Inc. v. Am. Hydro-Surgical Instruments, Inc., 262 F. Supp. 2d 1334 (S.D. Fla. 1999) … 16, 17
Energy Smart Indus., LLC v. Morning Views Hotels-Beverly Hills, LLC, 660 Fed. App’x. 859 (11th Cir. 2016) … 6
Fito v. Attorneys’ Title Ins. Fund, Inc., 83 So.3d 755 (Fla. Dist. Ct. App. 2011) … 11
Galstaldi v. Sunvest Cmtys. USA, LLC, 637 F.Supp.2d 1045 (S.D. Fla. 2009) … 24
GEICO Gen. Ins. Co. v. Hoy, 136 So.3d 647 (Fla. Dist. Ct. App. 2013) … 22
Hickson Corp. v. N. Crossarm Co., Inc., 357 F.3d 1256 (11th Cir. 2004) … 2, 3
Jeld-Wen, Inc. v. Nebula Glass Intern., Inc., 05-60860-CIV, 2007 WL 5960207 (S.D. Fla. May 15, 2007) … 3
Kopel v. Kopel, No. SC13-992, 2017 WL 372074 (Fla. Jan. 26, 2017) … 11
Levenger Co. v. Feldman, 516 F. Supp. 2d 1272 (S.D. Fla. 2007) … 12
Managed Care Sols., Inc. v. Cmty. Health Sys., Inc., 10-60170-CIV, 2012 WL 12861133 (S.D. Fla. May 14, 2012) … 10
Marshall Construction, Ltd. v. Coastal Sheet Metal & Roofing, Inc., 569 So.2d 845 (Fla. Dist. Ct. App. 1990) … 3, 7
Mazzoni Farms, Inc. v. E.I. DuPont De Nemours and Co., 761 So.2d 306 (Fla. 2000) … 6, 15, 22, 23
Moriber v. Dreiling, 194 So.3d 369 (Fla. Dist. Ct. App. 2016) … 22
MSM Golf, L.L.C. v. Newgent, 853 So.2d 1086, 1087 (Fla. Dist. Ct. App. 2003) … 3
Nature’s Prods., Inc. v. Natrol, Inc., 990 F.Supp.2d 1307 (S.D. Fla. 2013) … 24
Network Tallahassee, Inc. v. Embarq Corp., No. 4:10cv38-RH/WCS, 2010 WL 4569897 (N.D. Fla. Sept. 20, 2010) … 14
Ocean Commc’ns, Inc. v. Bubeck, 956 So.2d 1222 (Fla. Dist. Ct. App. 2007) … 11
Okeechobee Resorts, L.L.C. v. E Z Cash Pawn, Inc., 145 So.3d 989 (Fla. Dist. Ct. App. 2014) … 6
Porsche Cars N. Am., Inc. v. Diamond, 140 So.3d 1090 (Fla. Dist. Ct. App. 2014) … 11
Rollins, Inc. v. Butland, 951 So.2d 860 (Fla. Dist. Ct. App. 2006) … 24
Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984) … 13
Skinner v. Haugseth, 426 So.2d 1127 (Fla. Dist. Ct. App. 1983) … 8, 9
Stowell v. Ted S. Finkel Inv. Servs., Inc., 641 F.2d 323 (5th Cir. 1981) … 15
Sundance Apartments I, Inc. v. Gen. Elec. Capital Corp., 581 F.Supp.2d 1215 (S.D. Fla. 2008) … 24
Swiss Watch Int’l v. Movado Grp., No. 00-7703-CIV, 2001 WL 36270979 (S.D. Fla. Sept. 5, 2001) … 11
Treiber v. StorCOMM, Inc., No. 303CV1040J32MMH, 2005 WL 2012275 (M.D. Fla. Aug. 16, 2005) … 12, 13
Typographical Serv., Inc. v. Itek Corp., 721 F.2d 1317 (11th Cir. 1983) … 17
United States v. Four Parcels of Real Prop., 941 F.2d 1428 (11th Cir. 1991) … 2
Ussc Holdings Corp. v. TK Prods., LLC, No. 3:16-cv-00398-RJC-WGC, 2016 WL 7116009 (D. Nev. Dec. 6, 2016) … 13
Vega v. T-Mobile USA, Inc., 564 F.3d 1256 (11th Cir. 2009) … 3
Vital Pharm., Inc. v. Balboa Capital Corp., No. 14-62469-CIV, 2016 WL 4479370, at *4 (S.D. Fla. Aug. 25, 2016) … 3, 30
Williams v. Peak Resorts Int’l Inc., 676 So.2d 513 (Fla. 1996) … 15
STATUTES
Fla. Stat. § 401.204(1) … 24
Fla. Stat. § 688.002 … 12
Fla. Stat. § 688.008(1) … 12
Florida Deceptive and Unfair Trade Practices Act … passim
Florida’s Uniform Trade Secrets Act … 12
Italian Law … 4
OTHER AUTHORITIES
2d Amendment … 9
Fed. R. Civ. P. 56(a) … 2
Federal Rule of Civil Procedure 56 … 1

INTRODUCTION

Pursuant to Federal Rule of Civil Procedure 56, Defendants Tom Darden (“Darden”), John T. Vaughn (“Vaughn”), Industrial Heat, LLC (“Industrial Heat”), IPH International B.V. (“IPH”), and Cherokee Investment Partners, LLC (“Cherokee”) hereby move for summary judgment on all remaining Counts of the Complaint (Counts I, III, IV, and VI), and Industrial Heat and IPH (Counter-Plaintiffs) hereby move for summary judgment on all Counts of the Fourth Amended Answer, Additional Defenses, Counterclaims, and Third-Party Claims (“AACT”), in the above-captioned case. Accompanying this motion is a statement of material facts as to which it is contended that there does not exist a genuine issue to be tried.

As explained below, there can be no genuine dispute as to any material fact regarding the claims in Counts I (breach of contract), III (unjust enrichment), IV (misappropriation), and VI (fraud and deceit) of the Complaint, or regarding the claims in Counts I (breach of contract), II (breach of contract), III (fraudulent inducement), IV (violation of the Florida Deceptive and Unfair Trade Practices Act), and V (breach of contract) of the AACT. Accordingly, Defendants/Counter-Plaintiffs are entitled to judgment as a matter of law.

BACKGROUND

Plaintiffs Andrea Rossi (“Rossi”) Leonardo Corporation (“Leonardo”) (collectively, “Plaintiffs”) claim to have invented a technology called the “E-Cat,” capable of producing far more energy than it consumes. In October 2012, Industrial Heat entered into a License Agreement whereby Rossi and Leonardo granted to Industrial Heat a license with Plaintiffs to license and obtain this E-Cat technology (the “E-Cat IP”). Under that Agreement, Industrial Heat agreed to one absolute payment and two conditional payments. It would pay $1.5 million entering the Agreement, $10 million if Plaintiffs could complete a 24-hour “Validation Test” using a plant containing a collection of E-Cat reactors (the “1 MW Plant”), and $89 million if thereafter Plaintiffs could operate the 1 MW Plant for 350 out of 400 days at the same level (or better) than the initial Validation Test (the “Guaranteed Performance” test).

In October 2012, Industrial Heat paid Leonardo $1.5 million. On April 29, 2013, a day before the Validation Test, the parties executed the First Amendment to the License Agreement (“First Amendment”). Afterwards, the Validation Test took place in Ferrara, Italy and Industrial Heat assigned certain of its rights under the License Agreement to IPH. Following the Validation Test, IPH paid Leonardo an additional $10 million. In exchange, Plaintiffs purportedly transferred all of the E-Cat IP to Industrial Heat and IPH.

Leonardo delivered to 1 MW Plant to Industrial Heat in August 2013. Nearly a year later, in June 2014, Plaintiffs advised Industrial Heat that they had found a “customer” in Doral, Florida that allegedly had a commercial need for the steam produced by the 1 MW Plant. That customer turned out to be Third-Party Defendant J.M. Products, Inc. (“J.M. Products”), which had been recently incorporated by Third-Party Defendant Henry Johnson (“Johnson”). Industrial Heat entered into an agreement (the “Term Sheet”) with J.M. Products and Leonardo that involved sending the 1 MW Plant to J.M. Products’ facility in Doral.

From February 2015 to February 2016, Plaintiffs claim to have been operating the 1 MW Plant in Doral for J.M. Products and, in doing so, achieving results that would satisfy the criteria for the “Guaranteed Performance” test under the License Agreement.

Plaintiffs filed their eight-count Complaint (“Compl.”) against Defendants in April 2016. [D.E. 1]. In ruling on Defendants’ motion to dismiss, the Court dismissed four of the counts but sustained four of the counts. [D.E. 24]. Thereafter, Defendants answered the Complaint and Industrial Heat and IPH asserted counterclaims or third-party claims against Plaintiffs, J.M. Products, Johnson, James Bass, Fulvio Fabiani (“Fabiani”) and his company, United States Quantum Leap (“USQL”). After several rounds of briefing, the Court has upheld all of the counterclaims and third party claims, which are now contained in the AACT. [D.E. 132].

LEGAL STANDARD

I. Summary Judgment Standard

A motion for summary judgment must be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Whereas “[a]n issue of fact is ‘material’ if, under the applicable substantive law, it might affect the outcome of the case, [a]n issue of fact is ‘genuine’ if the record taken as a whole could lead a rational trier of fact to find for the nonmoving party.” Hickson Corp. v. N. Crossarm Co., Inc., 357 F.3d 1256, 1259-60 (11th Cir. 2004). A moving party “may discharge [its] ‘initial responsibility’ by showing that there is an absence of evidence to support the nonmoving party’s case or by showing that the nonmoving party will be unable to prove its case at trial.” Id. (quoting United States v. Four Parcels of Real Prop., 941 F.2d 1428, 1437-38 (11th Cir. 1991)).

Once the movant bears its initial burden, summary judgment must be granted if the nonmovant “fails to make a showing sufficient to establish the existence of an element essential to that party’s case as to which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see also Hickson Corp., 357 F.3d at 1260. Ultimately, “[the] court must decide ‘whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.’” Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986)).

II. Breach of Contract Elements

To prevail on a breach of contract claim, a party must prove the existence of a contract and a material breach of the contract. Vital Pharm., Inc. v. Balboa Capital Corp., No. 14-62469-CIV, 2016 WL 4479370, at *4 (S.D. Fla. Aug. 25, 2016); Burger King Corp. v. Huynh, No. 11- 22602-CIV, 2011 WL 6190163, at *5 (S.D. Fla. Dec. 5, 2011) (quoting Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1272 (11th Cir. 2009)). The party must also have performed (or been excused from performing) its obligations imposed by the contract prior to the other party’s breach. See Marshall Const., Ltd. v. Coastal Sheet Metal & Roofing, Inc., 569 So.2d 845, 848 (Fla. Dist. Ct. App. 1990). A party often also seeks to prove some damages to compensate it for another party’s breach (either on summary judgment or at a trial), but Florida law is clear that proof of actual damages is not necessary to prevail on a breach of contract claim. See, e.g., See MSM Golf, L.L.C. v. Newgent, 853 So.2d 1086, 1087 (Fla. Dist. Ct. App. 2003); Destiny Const. Co. v. Martin K. Eby Const., 662 So.2d 388, 390 (Fla. Dist. Ct. App. 1995); Beverage Canners, Inc. v. Cott Corp., 372 So.2d 954, 956 (Fla. 3rd DCA 1979). Thus, this Court has granted summary judgment on liability for breach of contract and for nominal damages, even where actual damages and proximate cause have not been proven. Jeld-Wen, Inc. v. Nebula Glass Intern., Inc., 05-60860-CIV, 2007 WL 5960207, at *13 (S.D. Fla. May 15, 2007); Alhassid v. Bank of Am., N.A., 14-CIV-20484, 2015 WL 11216721, at *5 (S.D. Fla. Sept. 14, 2015).

ARGUMENT

I. Industrial Heat and IPH Are Entitled to Summary Judgment on Complaint Count I and AACT Count I.

Summary judgment must be entered in favor of Industrial Heat and IPH on (a) their breach of contract claim against Plaintiffs in Count I of the AACT and (b) Plaintiffs’ breach of contract claim in Count I of the Complaint.

Under the License Agreement, Industrial Heat was to make an initial $1.5 million payment to Leonardo, which it made. Defs.’ Statement of Material Facts in Support of Mot. for Summary Judgment (“SOMF”) ¶ 4. Thereafter, Leonardo and Rossi were to successfully perform the Validation Test to be entitled to an additional $10 million payment. The Validation test was to be performed using the 1 MW Plant, which for a 24 hour period had to produce at least six times the energy it consumed in the form of “steam … consistently 100 degrees Celsius or greater.” License Agreement (SOMF Ex. 1) § 4. The Validation Test was to be certified by an Expert Responsible for Validation (“ERV”), who would “measure the flow of the heated fluid” from the 1 MW Plant and the temperature difference “of the fluid before and after the ECAT reaction.” Id. The 1 MW Plant would involve at least 54 E-Cat reactors. SOMF ¶ 5.

Roughly one week before the Validation Test was to be performed, Rossi told Industrial Heat that the full 1 MW Plant could not be tested under Italian law, but Italian law would allow testing of a smaller number of reactors:

This morning I had a meeting with the Health Office of the Province of Ferrara, which has to authorize the 24 hours test (it is unthinkable to make it without authorization, we could be stopped by the police upon a phone call due to the noise of the air escape of the condensers, because we must dissipate the energy not having any possible utilization for it.) We found an acceptable solution. He explained to me that the Italian Law “DPR (Decreto del Presidente della Repubblica) # 551- Dec. 21 1999 requests an authorization for any plant that makes more than 35 kWh/h and this authorization takes at least 6 months. But we are advantaged, because LENR do not exist in the known technology, therefore when we say 35 kWh we say kWh consumed, because plants that produce more than the energy they consume “do not exist.” Now, 35 x 6=210 kW[.] Therefore if we can consume up to 35 kWh/h without authorization, this implies that in out LENR case I can produce up to 210 kWh/h, which is a consistent amount of energy. …
SOMF ¶ 6.

Rossi later agreed that Italian law would allow the Validation Test to be done using 30 reactors. SOMF ¶ 7. In reliance on this, the First Amendment was created and executed, which allowed the Validation Test to be done using “30 individual E-Cat reactors, … tested for a period of 24 hours.” SOMF ¶ 8 & Ex. 5. Then, just before the Validation Test was to begin, Rossi claimed that Italian law was even more restrictive and would only permit using 18 e-cat reactors for the Validation Test. SOMF ¶ 15. On that basis, the Validation Test was conducted using only 18 E-Cat reactors. SOMF ¶ 18. The Validation Test lasted 23.5 hours and did not involve measuring the flow of the heated fluid out of the e-cat reactors. SOMF ¶ 19.

A. Plaintiffs Lack Standing to Bring a Breach of Contract Claim Based on the Alleged Failure to Pay $89 Million under the License Agreement.

The sole breach identified in Complaint Count I is the alleged failure to make the contingent $89 million payment under the License Agreement. As is clear from the Agreement (Section 3.2(c)), that payment – if in fact it were due – would only have to be made to Leonardo Corp., a New Hampshire corporation (“Leonardo-N.H.”). See License Agreement (SOMF Ex. 1) § 3.2(c). Moreover, Rossi has testified that he is no longer the owner of Leonardo or Leonardo-N.H. SOMF ¶ 10. Rossi thus has no standing to assert a breach of the License Agreement for the alleged failure to pay money to Leonardo-N.H. In addition, Leonardo claims it is the successor to Leonardo-N.H. because Leonardo-N.H. was merged into it. But Leonardo-N.H. still exists, so Plaintiff Leonardo appears not to be a proper party either. SOMF ¶ 106.

B. Rossi Intentionally Deceived Industrial Heat into Agreeing to Test Fewer ECat Units for the Validation Test in Ferrara, Italy.

Rossi’s claim that the Validation Test had to be limited to 30 e-cat reactors, and then later to only 18 e-cat reactors, in order to comply with Italian law was an intentionally false statement. As Rossi testified at his deposition (and confirmed at his deposition as the corporate representative for Leonardo), he did meet with a Ferrara Health Office official but was told there was no mechanism under Italian law to authorize the Validation Test. According to Rossi, however, the official told him he could go forward with his test as long as his neighbors did not complain. SOMF ¶ 16; Rossi Dep. (SOMF Ex. 2) 148:12-149:7 (“But if you find some kind of an agreement with your outdoor-with your neighbor, we don’t come.”). Thereafter, Rossi claims, he went to those who lived near where the Validation Test site was to be conducted and got them to agree not to call government authorities as long as the Validation Test did not make too much noise. Rossi Dep. (SOMF Ex. 2) 149:19-23 (Rossi testifying that neighbors told him
“[y]ou don’t make too much noise, and we can accept it because we want to sleep”).

There is no dispute that the License Agreement exists, that Industrial Heat complied with its obligations under that Agreement prior to the validation test (it had paid Leonardo the initial $1.5 million). See SOMF ¶¶ 1, [and SOMF] 4. There also can be no dispute that Leonardo and Rossi breached the License Agreement because they only used 18 E-Cat reactors for the Validation Test, and that Industrial Heat and IPH were damaged as a result of the breach both for having made the subsequent payment of $10 million under License Agreement §§ 3.2(b) and 4, and for not having the initial $1.5 million payment to Leonardo returned (among other damages). See SOMF ¶¶ 4, [and SOMF] 15; License Agreement (SOMF Ex. 1) § 3.2(b).

The First Amendment does not change this conclusion. First, it was procured by Rossi’s fraud on behalf of Leonardo. Rossi falsely represented that Italian law prohibited the Validation Test as set forth in the License Agreement but allowed the testing of fewer E-Cat reactors (30, to be specific). See SOMF ¶¶ 6, [and SOMF] 7. Industrial Heat relied on this false representation in entering into the First Amendment. SOMF ¶ 17; see also Darden Dep. (SOMF Ex. 9) 200:5-15 (“How about . . . running the fraction of the units in the Ferrara test. You know, what’s that about. I mean, we thought it was all legitimate like, okay, well, I guess there’s some law that says…you can’t run an energy device larger than whatever the size was.”). Rossi and Leonardo cannot avoid their breach of the License Agreement by fraudulently inducing an amendment to the Agreement. See Mazzoni Farms, Inc. v. E.I. DuPont De Nemours and Co., 761 So.2d 306, 313 (Fla. 2000). Second, Rossi and Leonardo did not even comply with the First Amendment. That amendment required the testing of 30 E-Cat reactors, but Rossi and Leonardo only tested 18 ECat reactors. See SOMF ¶¶ 7, [and SOMF] 8, [and SOMF] 18; 1st Amendment (SOMF Ex. 5) Ex. A.

Finally, the subsequent payment of $10 million to Leonardo does not excuse Rossi and Leonardo’s contract breach. The payment does not modify the License Agreement, which could only be “amended, superseded, canceled, renewed or extended, and the terms hereof may be waived, only by a written instrument signed by the Parties or, in the case of a waiver, by the Party waiving compliance.” License Agreement (SOMF Ex. 1) § 16.9. Moreover, any reduction in the number of reactors (down to 18) was not supported by any additional consideration by Rossi or Leonardo, but rather was procured by their fraud. Rossi and Leonardo cannot alter their contractual obligations by fraud. See D & M Jupiter, Inc. v. Friedopfer, 853 So.2d 485, 489 (Fla. Dist. Ct. App. 2003); see also Okeechobee Resorts, L.L.C. v. E Z Cash Pawn, Inc., 145 So.3d 989, 993 (Fla. Dist. Ct. App. 2014); Energy Smart Indus., LLC v. Morning Views Hotels-Beverly Hills, LLC, 660 Fed. App’x. 859, 863 (11th Cir. 2016).

For the foregoing reasons, Industrial Heat and IPH are entitled to summary judgment on Count I of the AACT for breach of contract. [1]


[1] Industrial Heat and IPH’s damages are not limited to the $1.5 million and $10 million payments made to Leonardo discussed above. Industrial Heat also made a payment to AEG based on Rossi and Leonardo achieving Validation that was not required because Rossi and Leonardo did not achieve Validation, and Industrial Heat and IPH paid for additional sums to Plaintiffs as well as to others following the Validation Test (mainly reimbursements for expenses or payments for services) that they never should have had to pay. See SOMF ¶ 22.


They are also entitled to summary judgment on Count I of Plaintiffs’ Complaint for breach of contract because there can be no subsequent breach, as alleged by Plaintiffs, for Industrial Heat and/or IPH not making an additional $89 million payment under the License Agreement after Rossi and Leonardo previously breached the Agreement by not correctly performing the validation test. This not only constituted a prior breach of the License Agreement barring Plaintiffs’ claim of a subsequent breach, see Marshall Construction, 569 So.2d at 848, but also allowed for the termination of the Agreement. See
License Agreement (SOMF Ex. 1) § 4.

C. Plaintiffs Breached the License Agreement by Failing to Abide by the Terms of the Validation Protocol.

The Validation Test not only failed based on the testing of too few E-Cat reactors. The License Agreement, both as originally drafted and even if amended by the First Amendment, required not only that the Validation Test include more reactors than tested, but also required that the testing period be 24 hours and that the measurement for the testing measure “the flow of the heated fluid” from the E-Cat reactors. License Agreement (SOMF Ex. 1) § 4. Neither of these requirements was met: As reflected in the validation report by Penon, the testing was only conducted for 23.5 hours and a flow meter was used to measure the flow of the fluid entering into the E-Cat reactors, but no flow meter (or other device) was used to measure the flow of the heated fluid out of the e-cat reactors. See SOMF ¶ 19.

As explained in Section I.B. supra, the fact that Plaintiffs did not comply with the validation testing requirements of the License Agreement means that Industrial Heat and IPH are entitled to summary judgment on Count I of the AACT for breach of contract as well as on Count I of the Complaint for breach of contract.

D. Plaintiffs Breached the License Agreement Prior to the Date Plaintiffs Claim They Were Entitled to an $89 Million Payment Because Plaintiffs Failed to Achieve “Guaranteed Performance” As Defined by the License Agreement.

Industrial Heat and IPH are also entitled to summary judgment on Plaintiffs’ Count I for additional reasons. Count I is predicated on Plaintiffs’ contention that they properly performed the “guaranteed performance” test provided for in the License Agreement as a predicate to Leonardo being entitled to an additional $89 million payment. But this is indisputably incorrect.

The License Agreement is crystal clear as to when Rossi and Leonardo were to conduct any “guaranteed performance” test:

Payment of the amount set forth in Section 3(c) above is contingent upon the Plant operating at the same level (or better) at which Validation was achieved for a period of 350 days (even if not consecutive) within a 400 day period commencing on the date immediately following delivery of the Plant to the Company [i.e., Industrial Heat] (‘Guaranteed Performance’).”
License Agreement (SOMF Ex. 1) § 5.

There is no dispute that Rossi and Leonardo did not complete any “guaranteed performance” test within the time period set by the License Agreement. As they admit in their Complaint, the 1 MW Plant was delivered to Industrial Heat in August 2013. SOMF ¶ 23. As they also admit in their Complaint, they did not commence a “guaranteed performance” test either in 2013 or even in 2014. Instead, they did not allegedly commence such a test until 2015. SOMF ¶ 24. By no later than October 2013, however, Rossi and Leonardo could no longer comply with the License Agreement requirement to operate the 1 MW Plant for “a period of 350 days (even if not consecutive) within a 400 day period commencing on the date immediately following delivery of the 1 MW Plant to the Company.” License Agreement (SOMF Ex. 1) § 5. [2]


[2] After the passage of 51 days following delivery of the Plant to IH, Rossi and Leonardo could no longer operate the Plant for 350 out of 400 days “immediately following delivery.”


In an effort to avoid this obvious and correct outcome, Plaintiffs contend that a Proposed Second Amendment to the License Agreement (“Proposed Second Amendment”) provided them with additional time to commence a “guaranteed performance” test. This contention fails for at least two independent reasons.

First, the Proposed Second Amendment was not effective because it was not signed and executed by all parties. See SOMF ¶¶ 26-30. The general rule on enforceability of contracts where all parties are not signatories is that “a contract not signed by all of the parties, but otherwise valid, may be upheld against a signing party, unless the nature or the wording of the contract indicates that his signature was conditioned upon all other parties signing the contract.” Skinner v. Haugseth, 426 So.2d 1127, 1131 (Fla. Dist. Ct. App. 1983). The Proposed Second Amendment is little more than a page long, but Section 3 makes the parties’ intentions expressly clear: “This Amendment may be executed in counterparts . . . provided that one or more counterparts collectively shall contain the signatures of all Parties to this Amendment.” (emphasis added). Proposed 2d Amendment (SOMF Ex. 15) § 3. [3]


[3] This is distinguishable from the contract at issue in Skinner, where there was “nothing in the contract specifying [Defendant’s] intent not to go through with the sale if [Plaintiff] did not sign.” Skinner, 426 So.2d at 1131. The Proposed Second Amendment dictated that it was ineffective unless all parties signed at least one counterpart.


The Proposed Second Amendment was not effective because it was not signed by either AEG or IPH (or, for that matter, by Rossi in his individual capacity). SOMF ¶¶ 27, 30; Proposed 2d Amendment (SOMF Ex. 15). Both were essential to any Agreement modification. Most of Industrial Heat’s rights under the Agreement had previously been assigned to IPH (with Rossi and Leonardo’s consent) under an Assignment and Assumption of the License Agreement (“Assignment Agreement”). See 1st Amendment (SOMF Ex. 5) § 16.7; Assignment Agreement (SOMF Ex. 7); SOMF ¶¶ 12, 13. Altering what would constitute “guaranteed performance” under the Agreement would directly impact those rights. In addition, AEG could have received an additional payment if Rossi and Leonardo satisfied the Agreement’s “guaranteed performance” requirement. SOMF ¶ 27. AEG thus had a direct interest in any change to the Agreement that would alter what had to be done to satisfy guaranteed performance. See id.

Not surprisingly, the parties recognized that the Proposed Second Amendment was not effective absent the signatures of all the relevant parties. SOMF ¶¶ 27, 32. Indeed, even Rossi admitted that the Proposed Second Amendment was not effective because AEG did not execute it. See SOMF ¶ 31.

Second, even if the Proposed Second Amendment was effective, it is crystal clear that the “guaranteed performance” test thereunder could not be conducted using the 1 MW Plant; rather, a different “Six Cylinder Unit” needed to be used for any such test:

Payment of the amount set forth in Section 3(c) above is contingent upon a six cylinder Hot Cat unit reasonably acceptable to the Company (the “Six Cylinder Unit”) operating at the same level (or better) at which Validation was achieved for a period of 350 days (even if not consecutive) within a 400 day period commencing on the date agreed to in writing between the Parties (“Guaranteed
Performance”).

Proposed 2d Amendment (SOMF Ex. 15) § 5.

There is no question that what Rossi and Leonardo used for their alleged “guaranteed performance” test was the 1 MW Plant, not the Six Cylinder Unit. These devices are clearly distinct: The latter is a round, tub unit containing six hot cat reactor units and is used to heat oil rather than water. SOMF ¶ 34. The Six Cylinder Unit remains in North Carolina and was never sent to Florida, for testing or otherwise. SOMF ¶ 35.

In short, Plaintiffs’ Count I for breach of contract fails because Plaintiffs did not fulfill their obligation regarding “guaranteed performance” under the License Agreement, which was a condition precedent to either Industrial Heat and IPH being obligated to pay $89 million under the Agreement. See License Agreement (SOMF Ex. 1) § 5 (if guaranteed performance is not achieved, “the Company shall not be required to pay any amount pursuant to Section 3[.2](c)”).

E. Plaintiffs Breached the License Agreement by Failing to Measure the Flow of the Heated Fluid During the Purported Guaranteed Performance Test.

Defendants are entitled to summary judgment in their favor on the respective parties’ claims for breach of contract because, even if the Proposed Second Amendment is effective, Plaintiffs failed to comply with the requirements for achieving “guaranteed performance” under the License Agreement. That performance had to be “at the same level (or better) at which Validation was achieved,” which in turn required Penon to “measure the flow of the heated fluid.” License Agreement (SOMF Ex. 1) §§ 4, 5. According to Penon’s own testimony, he never measured the heated fluid as required by the License Agreement. SOMF ¶ 20. This failure, like the prior breaches by Plaintiffs, precluded Plaintiffs’ right to seek a payment of $89 million from Industrial Heat. As a result, Plaintiffs’ claim for breach of contract fails because the requirements of the License Agreement were not satisfied.

F. Plaintiffs’ Prior Breaches of the License Agreement Entitle Industrial Heat and IPH to Summary Judgment on Count I of the Complaint.

Because Plaintiffs’ breaches of the License Agreement were prior to any alleged breach of the Agreement by Industrial Heat or IPH, Plaintiffs cannot prevail on Count I. It is well established that a “[p]rior material breach of a contract excuses further performance by the other party.” See Managed Care Sols., Inc. v. Cmty. Health Sys., Inc., 10-60170-CIV, 2012 WL 12861133, at *6 (S.D. Fla. May 14, 2012), report and recommendation adopted, 10-60170-CIV, 2012 WL 12861134 (S.D. Fla. June 4, 2012) (citing Cheezem Dev. Corp. v. Intracoastal Sales & Serv., Inc., 336 So.2d 1210, 1212 (Fla. 2d DCA 1976) (“As the party who initially committed a substantial breach of the contract, Intracoastal was not entitled to avail itself of a claimed subsequent breach by Cheezem.”) (citing Chatlos v. Morse Auto Rentals, Inc., 183 So.2d 854,
855 (Fla. 3d DCA 1966)). Summary judgment in favor of Industrial Heat an IPH on Count I of the Complaint is thus warranted.

II. Industrial Heat and IPH Are Due Summary Judgment on Complaint Count III.

Summary judgment must be entered in favor of Industrial Heat and IPH on Plaintiffs’ claim for unjust enrichment in Count III of the Complaint. That Count alleges that Industrial Heat and IPH would be unjustly enriched if allowed to retain the license granted under the License Agreement without paying Plaintiffs $89 million. Compl. ¶ 91.

To prevail on such a claim, Plaintiffs must establish that: (1) Plaintiffs conferred a benefit on Industrial Heat and IPH; (2) Industrial Heat and IPH voluntarily accepted and retained the benefit conferred; and (3) the circumstances are such that it would be inequitable for Industrial Heat and IPH to retain the benefit without paying the value thereof to Plaintiffs. See Porsche Cars N. Am., Inc. v. Diamond, 140 So.3d 1090, 1100 (Fla. Dist. Ct. App. 2014) (citing Fito v. Attorneys’ Title Ins. Fund, Inc., 83 So.3d 755, 758 (Fla. Dist. Ct. App. 2011)).

A party cannot pursue a quasi-contract claim for unjust enrichment if an express contract exists concerning the same subject matter as the party’s claim for unjust enrichment. See Diamond “S” Dev. Corp. v. Mercantile Bank, 989 So.2d 696, 697 (Fla. Dist. Ct. App. 2008) (citing Ocean Commc’ns, Inc. v. Bubeck, 956 So.2d 1222, 1225 (Fla. Dist. Ct. App. 2007)). Hence, Count III fails as a matter of law because the License Agreement is an express contract (a fact which neither side disputes) that concerns the same subject matter as Plaintiffs’ claim for unjust enrichment claim – namely, a license of the E-Cat IP to Industrial Heat. Compl. ¶ 89. Furthermore, Plaintiffs’ unjust enrichment claim is fatally flawed because it ignores the reality that the alleged benefit conferred – the “license to use the E-Cat IP,” id. – was only conferred per the terms of the License Agreement. If the Agreement is valid, then Industrial Heat and/or IPH have all the benefits created by the Agreement, including a license of the E-Cat IP and the right to sub-license the E-Cat IP to whomever they choose. If the Agreement is not valid, then Industrial Heat and IPH do not have the supposed benefit that is the basis of Court III – they would not have a “license to use the E-Cat IP.” Compl. ¶ 89.

An unjust enrichment claim also requires proof that Plaintiffs “directly conferred a benefit on [Industrial Heat and IPH]; an indirect benefit is insufficient.” Swiss Watch Int’l v. Movado Grp., No. 00-7703-CIV, 2001 WL 36270979, at *4 (S.D. Fla. Sept. 5, 2001); see also Kopel v. Kopel, No. SC13-992, 2017 WL 372074, at *5 (Fla. Jan. 26, 2017) (“[t]o prevail on an unjust enrichment claim, [a] plaintiff must directly confer a benefit to the defendant”). No such direct benefit was conferred here because the license was without value – the undisputed evidence is that neither Industrial Heat nor IPH ever sub-licensed the E-Cat IP for profit, never created a product or service that could be sold based on the E-Cat IP, and indeed never were able to generate the results Rossi and Leonardo claimed using the E-Cat IP. See SOMF ¶¶ 38-40. [38 . 39 . 40] For the foregoing reasons, Industrial Heat and IPH are entitled to summary judgment on the unjust enrichment claim in Plaintiffs’ Complaint (Count III).

III. Defendants Are Entitled to Summary Judgment on Complaint Count IV.

Because Plaintiffs licensed the E-Cat IP to Industrial Heat and later, through an assignment, to IPH – and because each entity was allowed to grant sublicenses to the E-Cat IP to anyone it selected (License Agreement (SOMF Ex. 1) § 1) – there is no question of material fact as to whether Plaintiffs protected the E-Cat IP from disclosure as required for Count IV’s misappropriation claim. To prove a claim for misappropriation of trade secrets, a plaintiff must prove that “(1) the plaintiff possessed secret information and took reasonable steps to protect its secrecy and (2) the secret it possessed was misappropriated, either by one who knew or had reason to know that the secret was improperly obtained or by one who used improper means to obtain it.” Del Monte Fresh Produce Co. v. Dole Food Co., Inc., 136 F. Supp. 2d 1271, 1291 (S.D. Fla. 2001) (citing Fla. Stat. § 688.002) (emphasis added). [4] Thus, under the first step, “[f]or there to be actionable misappropriation, the party asserting trade secret protection bears the dual burden of describing the alleged trade secret information and also showing that it has taken reasonable steps to protect this secrecy.” [5] Levenger Co. v. Feldman, 516 F. Supp. 2d 1272, 1287 (S.D. Fla. 2007) (emphasis added) (citing Amer. Red Cross v. Palm Beach Blood Bank, Inc., 143 F.3d 1407, 1410 (11th Cir. 1998)); see also Del Monte Fresh Produce Co., 136 F. Supp. 2d at 1291 (“To qualify as a trade secret, the information that the plaintiff seeks to protect must derive economic value from not being readily ascertainable by others and must be the subject of reasonable efforts to protect its secrecy.”) (citing Amer. Red Cross, 143 F.3d at 1410).


[4] Although Plaintiffs fail to cite it in the Complaint, “Florida’s Uniform Trade Secrets Act preempts common law torts concerning trade secret misappropriation.” Treiber v. StorCOMM, Inc., No. 303CV1040J32MMH, 2005 WL 2012275, at *4 (M.D. Fla. Aug. 16, 2005) (citing Fla. Stat. § 688.008(1); All Pro Sports Camp, Inc. v. Walt Disney Co., 727 So.2d 363, 367 (Fla. 1999)).
[5] Plaintiffs also failed to meet their obligation of describing “with reasonable particularity” the confidential information or trade secrets which they claim that Defendants misappropriated. Levenger Co., 516 F. Supp. 2d at 1287. Summary judgment in Defendants’ favor is warranted for this additional reason.


In this case, Plaintiffs cannot show that they “took reasonable steps to protect [the] secrecy” of the E-Cat technology because they willingly—and virtually without limitation, including as to confidentiality—transferred the E-Cat technology to Industrial Heat and later to IPH under the License Agreement and the Assignment Agreement, respectively. See License Agreement (SOMF Ex. 1); SOMF ¶ 3; Del Monte Fresh Produce Co., 136 F. Supp. 2d at 1291.

As the United Supreme Court has explained, “[i]f an individual discloses his trade secret to others who are under no obligation to protect the confidentiality of the information . . . his property right is extinguished.” Thus, by definition, there was no misappropriation here.
Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1002 (1984).

Indeed, neither Industrial Heat nor IPH were under any obligation under the License Agreement to keep the E-Cat technology confidential; both were authorized to grant sublicenses to anyone they selected. SOMF ¶ 3. Instead, the non-disclosure obligation extended only to
Plaintiffs under the License Agreement, the terms of which thus dictate entry of summary judgment in Defendants’ favor on Count IV. See License Agreement (SOMF Ex. 1) § 16.4; Ussc Holdings Corp. v. TK Prods., LLC, No. 3:16-cv-00398-RJC-WGC, 2016 WL 7116009, at *4-5
(D. Nev. Dec. 6, 2016) (in determining whether plaintiffs “employed reasonable measures to maintain the secrecy of its trade secrets,” the court must conduct a “review and interpretation of the Agreement” by asking, “[f]or example, does the Agreement contain non-disclosure or confidentiality provisions relative to trade secrets?”) (citation omitted). Indeed, Plaintiffs do not even allege that either Industrial Heat or IPH had an obligation to maintain the confidentiality of the E-Cat technology under the License Agreement. Cf. id. at *4 (“[Plaintiff] has not asserted that the terms of the License Agreement prohibited Plaintiffs from divulging trade secrets.”). They do not because they cannot.

By signing the License Agreement authorizing the use or disclosure (including sublicensing) of the E-Cat IP by Industrial Heat and IPH, Plaintiffs did the opposite of protecting the secrecy of their intellectual property; they surrendered to Industrial Heat and IPH the right to hold confidential, or disseminate, the E-Cat IP. See SOMF ¶ 3; Treiber, 2005 WL 2012275, at *4 (concluding that, by asserting “that defendant breached the confidentiality clause of the license agreement by misusing confidential information to which it was entrusted,” “plaintiff has not plead” a claim for misappropriation of trade secrets).

In denying Defendants’ Motion to Dismiss ([D.E. 24]), the Court identified as a question of fact for discovery whether Plaintiffs took steps to protect their trade secrets by signing individual confidentiality agreements with Defendants. [D.E. 24] at 12 (construing allegations in Plaintiffs’ favor “at the motion-to-dismiss phase”). There are, however, no such separate confidentiality agreements. Moreover, while any confidentiality agreements Plaintiffs had with third parties would have no bearing on whether Defendants misappropriated the E-Cat IP, the Court need not even reach that issue. When asked in an interrogatory about third-party confidentiality agreements, Plaintiffs identified none. [6]
See SOMF ¶ 41.


[6] Plaintiffs also objected to the propriety of Defendants’ interrogatory seeking information regarding their alleged third-party confidentiality agreements. Of course, Plaintiffs cannot have it both ways; they cannot endeavor to create a question for discovery by putting the existence of third-party confidentiality agreements at issue then claim that they are an improper subject of discovery. Cf. Network Tallahassee, Inc. v. Embarq Corp., No. 4:10cv38-RH/WCS, 2010 WL 4569897, at*1 (N.D. Fla. Sept. 20, 2010) (“The party may object to discovery or not, but the party cannot have it both ways.”).


By the same token, Defendants did not obtain the E-Cat IP (including any potential trade secret therein) by improper means or disclose it without Plaintiffs’ consent. Del Monte Fresh Produce Co., 136 F. Supp. 2d at 1291 (setting forth remaining elements of misappropriation). As explained infra, summary judgment is warranted on Plaintiffs’ fraud and deceit claim, so it cannot form the basis for the argument that Defendants obtained trade secrets by improper means. Moreover, the alleged fraudulent inducement does not go to the right of Industrial Heat and IPH to have, and to license others to have, the E-Cat IP under the License Agreement. Plaintiffs do not and cannot dispute that Industrial Heat and IPH made the payments to Plaintiffs under the Agreement (to the tune of $11.5 million) to trigger and warrant the E-Cat IP transfer pursuant to the Agreement. License Agreement (SOMF Ex. 1) § 1.1, 3.2(b). Moreover, there has been no disclosure of whatever might be claimed to constitute a trade secret within the E-Cat IP. Defendants maintained the confidentiality of the undisclosed E-Cat IP (even assuming arguendo that it constituted a trade secret). For example, Darden did not share the recipe for the “secret sauce” even with Vaughn, much less with any third party. Defendants did so not because such was required by the License Agreement, but to protect Industrial Heat’s and IPH’s rights in the E-Cat IP. Nevertheless, Defendants’ protection of the E-Cat IP for their own interests means that Plaintiffs can show no improper disclosure of that IP.

Because there is no genuine dispute of a material fact, this Court should enter summary judgment for Defendants as to Count IV.

IV. Defendants Are Entitled to Summary Judgment on Complaint Count VI.

In denying Defendants’ motion to dismiss, the Court held that in Count VI, Plaintiffs had “alleg[d] a plausible fraudulent inducement claim,” and that “it [wa]s possible discovery [would] reveal separate damages” for this claim. [D.E. 24] at 19. Under Florida law, a fraud or misrepresentation claim requires “(1) a false statement of fact (2) known by the defendant to be false at the time it was made, and (3) made for the purpose of inducing the plaintiff to act in reliance thereon; (4) action by the plaintiff in reliance on the correctness of the representations; and (5) resulting damages to the plaintiff.” Stowell v. Ted S. Finkel Inv. Servs., Inc., 641 F.2d 323, 325 (5th Cir. 1981) (quotation omitted). As a matter of law, Plaintiffs in this case cannot show that a false statement was knowingly made for the purpose of inducing reliance. Nor can they show any resulting damages. Indeed, Count VI is simply a misfired attempt to recast their breach of contract claim as a fraud claim. Because governing law requires that Plaintiffs allege and prove separate damages for fraud, and because the parol evidence rule bars Plaintiffs’ unfounded allegations that Industrial Heat and IPH are not the true parties in interest regarding the License Agreement, summary judgment is warranted on Count VI.

A. Defendants Are Entitled to Summary Judgment on Count VI Because Plaintiffs Fail to Adduce Evidence of Separate Damages for Fraud.

Defendants are entitled to summary judgment on Count VI because Plaintiffs fail to adduce evidence regarding separate damages for fraud as distinct from damages stemming from an alleged breach of the License Agreement. “Florida law provides for an election of remedies in fraudulent inducement cases: rescission, whereby the party repudiates the transaction, or damages, whereby the party ratifies the contract.” Mazzoni Farms, Inc. v. E.I. DuPont De Nemours & Co., 761 So.2d 306, 313 (Fla. 2000). However, “[i]t is well settled that a party may not recover damages for both breach of contract and fraud unless the party first establishes that the damages arising from the fraud are separate or distinguishable from the damages arising from the breach of contract.” Williams v. Peak Resorts Int’l Inc., 676 So.2d 513, 517 (Fla. 1996) (citing cases for the proposition that a plaintiff cannot get damages for fraud that duplicate damages for breach of contract).

Here, Plaintiffs allege that Defendants misrepresented that (a) Industrial Heat and Cherokee had funds in excess of $100 million to pay Plaintiffs for the license of the E-Cat IP; (b) upon completion of the Guaranteed Performance test, Industrial Heat would pay Plaintiffs the full amount of the license fee; (c) Industrial Heat and Cherokee are the same and/or Industrial Heat is a wholly owned subsidiary of Cherokee; and (d) Cherokee would guarantee the payment of the license fee by Industrial Heat. Compl. ¶ 112. Plaintiffs further allege that Defendants intentionally failed to disclose that they intended to breach the License Agreement. Id. These claims of fraud relate exclusively to the alleged breach of the License Agreement; no separate damages are alleged anywhere in the Complaint. SOMF ¶ 42. Quite to the contrary, what the facts reveal here are that Industrial Heat and IPH have paid Plaintiffs $11.5 million (along with various expenses over time), and yet they do not have an E-Cat product to sell and they are not earning licensing revenue from any E-Cat IP.

Plaintiffs have neither identified separate damages for fraud nor alleged pre-contract fraudulent conduct that is unrelated to their breach of contract claim. SOMF ¶ 42. Thus, there is nothing for the jury to decide on Count VI and summary judgment is warranted for Defendants.

B. Plaintiffs’ Fraud Claim Cannot Be Proven Because Evidence of Defendants’ Alleged Misrepresentations Is Barred by the Parol Evidence Rule.

Second, Plaintiffs’ fraud claim cannot be proven at trial as a matter of law because any evidence of Defendants’ alleged misrepresentations regarding the true party in interest under the License Agreement is barred by the parol evidence rule.

Plaintiffs’ fraudulent inducement claim is predicated on them allegedly being falsely told that Cherokee would be a party to or guarantor of the License Agreement to ensure that Plaintiffs were paid. Compl. ¶ 112. Of course, no such guarantee can be found anywhere in the License Agreement itself, which conspicuously fails to mention Cherokee or any Cherokee-named entity in its eighteen pages of dense, single spaced text. See License Agreement (SOMF Ex. 1). Thus, the License Agreement is the beginning and end of the matter here.

Florida law makes clear that the parol evidence rule “forbids a party from providing evidence of prior or contemporaneous representations to vary or contradict the clear and unambiguous terms of a contract” because “the effect of introducing such promises . . . would be to vary the terms of the parties’ Agreement.” Eclipse Med., Inc. v. Am. Hydro-Surgical Instruments, Inc., 262 F. Supp. 2d 1334, 1343 (S.D. Fla. 1999). In other words, there is “no relief for oral misrepresentation where specific points [are] covered in contract.” Id. (citing Typographical Serv., Inc. v. Itek Corp., 721 F.2d 1317, 1320 (11th Cir. 1983)). Plaintiffs argue here that Defendants orally represented that a Cherokee entity would guarantee Industrial Heat’s obligations under the License Agreement. By its terms, however, the License Agreement was between Plaintiffs and Industrial Heat. SOMF ¶¶ 1-2. Moreover, it contains an integration clause. License Agreement (SOMF Ex. 1) § 16.8. As “the Agreement’s provisions . . . are clear and unambiguous, therefore[,] any claims based on . . . alleged misrepresentations of a different [nature] simply cannot, as a matter of law, be considered.” Eclipse Med., Inc., 262 F. Supp. 2d at 1343. Accordingly, because Plaintiffs as a matter of law cannot introduce evidence of the alleged promise that a Cherokee entity was the true party in interest—assuming for the sake of argument that such evidence even exists, which it does not—the Court must enter summary judgment for Defendants on Count VI.

V. IPH Is Entitled to Summary Judgment on the AACT Count II.

IPH is entitled to summary judgment as to Count II of the 4th Amended AACT, for various breaches of the License Agreement by Rossi and Leonardo, including Leonardo and Rossi’s failure to (i) comply with the confidentiality provision, (ii) assign licensed patents, (iii) inform and consult on patents, (iv) comply with the covenant not to compete, (v) pay taxes, and (vi) enable replication of the E-Cat technology.

Rossi and Leonardo do not dispute that a License Agreement existed between Industrial Heat, Rossi and Leonardo, and that Industrial Heat’s rights under the License Agreement were assigned to IPH by virtue of the Assignment Agreement executed on April 29, 2013. See SOMF ¶¶ 1, 12, 13. The undisputed facts show that Rossi and Leonardo breached the License Agreement on various occasions detailed below. Accordingly, even without and before IPH proves its damages, IPH is entitled to summary judgment as to Rossi and Leonardo’s liability for the breaches of contract and for at least nominal damages.

A. Breach of Confidentiality Provisions

It is indisputable that Rossi and Leonardo breached the confidentiality provision of the License Agreement. Section 16.4 specifically provides that:

No publicity release or public announcement concerning this Agreement or the transaction contemplated hereby shall be made by Leonardo, Rossi, AEG or the Company without written advance approval thereof by each of Leonardo and the Company. While this Agreement is in effect and after this Agreement terminates, each party hereto and its Affiliates shall keep confidential and shall not disclose, the terms of this Agreement to any other person without the prior consent of each other Party hereto…

License Agreement (SOMF Ex. 1) § 16.4. Rossi and Leonardo have repeatedly made public disclosures of specific terms of the License Agreement without Industrial Heat or IPH’s “written advance approval.” These public disclosures by Rossi and Leonardo include statements on Rossi’s website, Journal of Nuclear Physics (“JONP”), www.journal-of-nuclear-physics.com, which reveal that the License Agreement required a test of the 1 MW Plant, a test to be conducted over 400 days, a test involving 350 days of operation of the 1 MW Plant, and a guaranteed performance or “guarantees of performance” test. See SOMF ¶ 43.

These disclosures by Rossi and Leonardo are too numerous to list, but for example, on July 2, 2015 Rossi stated:

My uninterrupted presence in the plant installed in the factory of the Customer of IH [Industrial Heat] is due to the fact that it is our first plant installed in the factory of a Customer, operating for unlimited time. We have to be always presnt for at least 1 year due to our contractual agreement[.]

See SOMF ¶ 43; SOMF Ex. 25 at July 2, 2015. Again, on December 21, 2015, in response to a question about the timing of the “test on course” for the 1 MW Plant, Rossi stated:

It is not possible to state a precise date, because we have to complete 350 days of efficient operation within a period of 400 days from the official start up of the test on course. The 400 days will expire at the end of March, while the date the test will have been finished will depend on how many days the plant will have been stopped for ordinary and extraordinary maintainance (sic) and reparations. …

See SOMF ¶ 43; SOMF Ex. 25 at Dec. 21, 2015. Rossi and Leonardo also publicly disclosed the License Agreement and all of the terms therein by publicly filing the License Agreement as an attachment to the Complaint, without any attempt to seal the attachment. See Compl. Ex. B. Rossi and Leonardo did not obtain Industrial Heat or IPH’s written advance approval prior to making these disclosures, and therefore, were in direct violation of the License Agreement.

B. Failure to Assign Licensed Patents

Rossi and Leonardo breached the License Agreement by failing to assign to IPH the Licensed Patents as defined in § 16.1 and Exhibit A of the License Agreement. Section 10 of the License Agreement provides: “Upon the request of the Company, Leonardo and Rossi shall assign to the Company the Licensed Patents with respect to the Territory.” License Agreement (SOMF Ex. 1) § 10. On February 17, 2016, counsel for Counter-Plaintiffs sent a letter to counsel for Rossi and Leonardo requesting assignment of the Licensed Patents to IPH. SOMF ¶ 46.

Rossi and Leonardo failed to execute the requested assignment in contravention of the License Agreement. See SOMF ¶ 47.

C. Failure to Inform and Consult on Patent Applications and Abandonment of Patent Applications

Leonardo breached the License Agreement by failing to inform and consult with IPH regarding patent applications. Section 7.1 contains clear directives relating to informing and consulting with IPH regarding patent prosecution and maintenance of the E-Cat IP: For each patent application and patent under the Licensed Patents, Leonardo shall:
. . .
(d) keep the Company currently informed of the filing and progress in all material aspects of the prosecution of such patent application, and the issuance of patents from any such patent application;
(e) consult with the Company concerning any decisions which could affect the scope or enforcement of any issued claims or the potential abandonment of such patent application or patent; and
(f) notify the Company in writing of any additions, deletions or changes in the status of such patent or patent application.
License Agreement (SOMF Ex. 1) § 7.1. Similarly, Section 7.2 of the License Agreement states:

“If Leonardo wishes to abandon any patent application or patent that is a Licensed Patent, it shall give the Company ninety (90) days prior written notice of the desired abandonment. Leonardo shall not abandon any such Licensed Patent except upon the prior written consent of the Company.” Id. § 7.2. There are over one hundred (100) patent applications relating to the Licensed Patents that Leonardo filed without informing IPH and that Leonardo abandoned without prior written notice to IPH, in contravention of the License Agreement. SOMF ¶¶ 48, 49. Leonardo also failed to keep Industrial Heat and IPH informed as to the status of those patent applications, and charged them for “fees and expenses associated with [Leonardo’s patent] activities” that Leonardo was obligated to bear. [7]


7 As a result of this breach by Rossi and Leonardo, IPH has suffered damages in the form of fees and expenses charged by Leonardo and/or Rossi to IPH for preparing, filing or prosecuting patent applications that should have been borne by Leonardo. See, e.g., SOMF ¶ 50.


This conduct – collectively and separately – was a breach of sections 7.1 and 7.2 of the License Agreement.

D. Covenant Not to Compete

Rossi and Leonardo breached the License Agreement’s covenant not to compete. The Agreement contains a clear and defined non-compete provision prohibiting Plaintiffs, while performing services for Industrial Heat and for two years thereafter, from being “connected in any manner with any business or enterprise . . . engaged in the design, development, manufacture, distribution, lease, rental or sale of any E-Cat Products, or the provision of any services related thereto” absent Industrial Heat’s prior written consent. License Agreement (SOMF Ex. 1) § 13.3 (emphasis added). Notwithstanding this covenant not to compete, Rossi and Leonardo have been open in broadcasting that they are engaged in designing and developing what are classified as “E-Cat Products” under the License Agreement. SOMF ¶ 51 & Exs. 24-25. For example, Rossi has publicly stated that in June 2016 he conducted a “very important test” with a “very important customer” that was not Industrial Heat or IPH. See SOMF Ex. 29 at Resp. No. 3; SOMF Ex. 25 at April 27 & June 26, 2016. This constitutes a clear violation of the non-compete provision.

E. Failure to Pay Taxes

At least Leonardo, if not also Rossi, breached the License Agreement by failing to pay taxes on the monies received from Industrial Heat and IPH pursuant to the Agreement.

In light of past taxation issues Rossi had with the Italian government, the License Agreement has several carefully crafted provisions to ensure that Leonardo and Rossi would comply with their tax obligations as they relate to payments from Counter-Plaintiffs. See License Agreement (SOMF Ex. 1) §§ 12(j), 13.5, 12(a), & 12(e); AACT ¶ 125; [D.E. 140] ¶ 125.

First, the License Agreement required a representation from both Leonardo and Rossi that each has filed all necessary “tax returns or reports” and “has paid all taxes required by any jurisdiction or subdivision or agency thereof” prior to entering the Agreement. License Agreement (SOMF Ex. 1) § 12(j). Second, the License Agreement required each party to file all necessary documentation and returns as to any tax applicable to its or his “respective revenues derived . . . in respect of the E-Cat IP.” Id. § 13.5. Third, IPH had Rossi and Leonardo provide it with a signed certificate certifying that all of their representations and warranties from the License Agreement, which included their representations as to compliance with their tax obligations, were true and correct as of the date of April 29, 2013, and would continue to be true after Leonardo was paid $10 million under the License Agreement. See SOMF ¶ 14.

[redacted]

In light of the foregoing, it is clear that at least Leonardo, in breach of the License
Agreement, failed properly to report and pay taxes on all of its 2012 and 2013 revenue.

F. Failure to Enable Replication of the E-Cat Technology

Finally, Counter-Defendants breached the License Agreement by failing to provide the intellectual property and services necessary for Counter-Plaintiffs to replicate the results claimed from the E-Cat technology. Leonardo and Rossi represented and warranted in the License Agreement that the E-Cat IP delivered under the License Agreement is “all the…intellectual property that [is] necessary or useful for the Company to develop, manufacture, make…and sell…all the products deriving from the E-Cat IP.” License Agreement (SOMF Ex. 1) §12 (b). Additionally, the License Agreement requires Rossi to “provide ongoing training and support to the Company in the use of the [1 MW] Plant and the production of the E-Cat Products…to enable it to utilize the E-Cat IP, operate the [1 MW] Plant and produce E-Cat Products.” Id. § 13.3. Indeed, a core aspect of the License Agreement was for Industrial Heat or IPH to be able to replicate and commercialize the E-Cat technology.

It is undisputed that Industrial Heat and IPH have never been able to produce an E-Cat product that functions in the manner Plaintiffs claim and that they have never been able to replicate the results Plaintiffs claimed from the E-Cat IP. This fact is supported by ample record evidence. See SOMF ¶ 40. Accordingly, Plaintiffs have failed to satisfy their obligations under License Agreement §§ 12(b) and 13.3.

VI. Industrial Heat Is Entitled to Summary Judgment on AACT Count III.

Industrial Heat is entitled to summary judgment in its favor on Count III of the AACT for fraudulent inducement to enter into the Term Sheet. Under Florida law, the elements of fraudulent inducement are: (1) a false statement concerning a material fact; (2) the representor’s knowledge that the representation is false; (3) an intention that the representation induce another to act on it; and (4) consequent injury by the party acting in reliance on the representation. Moriber v. Dreiling, 194 So.3d 369, 373 (Fla. Dist. Ct. App. 2016) (citing Butler v. Yusem, 44 So.3d 102, 105 (Fla. 2010); GEICO Gen. Ins. Co. v. Hoy, 136 So.3d 647, 651 (Fla. Dist. Ct. App. 2013)). A party that proves fraudulent inducement may elect rescission as the remedy, which involves both voiding the contract and returning the parties to the status quo that existed before the contract was executed. See Mazzoni Farms, Inc. v. E.I. DuPont De Nemours & Co., 761 So.2d 306, 313 (Fla. Dist. Ct. App. 2000).

Rossi, on behalf of Leonardo, and Johnson, on behalf of J.M. Products, made numerous false statements of material fact or omissions of material fact to Industrial Heat prior to execution of the Term Sheet (August 13, 2014) to induce Industrial Heat to enter the Term Sheet. Notably, and without a factual basis to be disputed, they represented (among other things) that: (a) J.M. Products [8] was affiliated with a well known United Kingdom specialty chemicals and precious metals company called Johnson Matthey, see SOMF ¶¶ 57, 60-64 [60 . 61 . 62 . 63 . 64], and (b) J.M. Products had a need for, and was going to use, the steam Leonardo could produce from the 1 MW Plant in a chemical manufacturing process, see SOMF ¶¶ 56, 59, & 62.


[8] At the time, J.M. Products was known as J.M. Chemical Products, Inc. It later changed its name to J.M. Products. See SOMF ¶ 58.


As to the first false representation, Johnson further backed up the representation by signing a compliance certificate stating that J.M. Products was “owned by an entity formed in the United Kingdom.” SOMF ¶ 65. (Johnson would also later send letters representing J.M. Products to be an “Advanced Derivatives of Johnson Matthew Platinum Sponges.” See SOMF ¶ 74b ). As to the second false representation, Rossi and Leonardo pointed to this as an independent check on how the 1 MW Plant would operate – in other words, that a “real Customer” would be purchasing the steam produced by Leonardo to use in a real manufacturing process would confirm that such steam was in fact being produced and the 1 MW Plant was operating as promised by Rossi and Leonardo, because if it was not, this “real Customer” would certainly complain. See SOMF ¶ 59.

These representations were unquestionably false: J.M. Products was never affiliated in any way with Johnson Matthey. SOMF ¶¶ 67, 79. In fact, the closest the two ever came is that Rossi, on behalf of J.M. Products, once asked for a price quote from Johnson Matthey for the purchase of platinum sponge, and then later bought some filters from a Johnson Matthey subsidiary in the United States (to mine them for platinum sponge contained therein). SOMF ¶ 68. J.M. Products also did not have a chemical manufacturing process in place with a need for the steam to be produced by the 1 MW Plant. In fact, J.M. Products had no operations at the time Rossi, Leonardo, Johnson, and J.M. Products induced Industrial Heat to enter the Term Sheet. SOMF ¶ 66.

The foregoing false statements were made to induce Industrial Heat to enter into the Term Sheet and allow the 1 MW Plant to be moved from its facilities in North Carolina (where it obviously could closely monitor any operation of, and any output from, the 1 MW Plant) to an alleged J.M. Products location in Florida, removed from Industrial Heat’s immediate oversight. See SOMF ¶ 69. (Discovery has revealed that the Florida location was rented after the Term Sheet was signed, and that it was rented by Rossi for Leonardo, which in turn walled off a portion of the location for J.M. Products to “operate.” See SOMF ¶ 72). As expected, Industrial Heat did in fact rely on these representations and allowed the 1 MW Plant to be moved to Florida. It would not have done so had it known that J.M. Products had no affiliation with Johnson Matthey and no real manufacturing process to operate in Florida. See SOMF ¶¶ 70, 71.

As a result of Industrial Heat being fraudulently induced to enter into the Term Sheet, it is entitled to rescission of the Term Sheet. See Mazzoni Farms, Inc. 761 So.2d at 313. It is also entitled to recoup the moneys it paid subsequent to entering the Term Sheet for the operation and maintenance of the 1 MW Plant while in Florida, including the expenses associated with paying for the services of Fulvio Fabiani and Barry West to assist Rossi in the operation and maintenance of the Plant. Industrial Heat would not have incurred these costs if the Term Sheet had not been entered and the 1 MW Plant had not been moved to Florida. Accordingly, these costs must be reimbursed to return to the status quo before the Term Sheet was entered. See id. [9]


[9] Industrial Heat should also be allowed to recover its costs associated with this litigation because this litigation never would have arisen if the 1 MW Plant were not moved to Florida, giving Plaintiffs the cover they needed to allegedly conduct a “guaranteed performance” test away from Industrial Heat’s direct oversight. Without that cover, they would not have been able to conduct their alleged test, upon which all of their claims in the Complaint are based.


VII. Industrial Heat and IPH Are Entitled to Summary Judgment on AACT Count IV. Counter-Plaintiffs are entitled to at least partial summary judgment on Count IV of the AACT for Counter-Defendants’ and Third Party Defendants’ violations of the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”).

The elements of a FDUTPA violation are: (1) a deceptive act or unfair practice; (2) causation; and (3) actual damages. Rollins, Inc. v. Butland, 951 So.2d 860, 869 (Fla. Dist. Ct. App. 2006). FDUTPA claims can encompass a broad variety of conduct, and are not limited to parties’ contractual relationships or conduct involving fraud. See Fla. Stat. § 401.204(1); Nature’s Prods., Inc. v. Natrol, Inc., 990 F.Supp.2d 1307, 1322 (S.D. Fla. 2013); Deere Constr., LLC v. Cemex Constr. Materials Fla., LLC, 198 F.Supp.3d 1332, 1342 (S.D. Fla. July 2016) (quoting Galstaldi v. Sunvest Cmtys. USA, LLC, 637 F.Supp.2d 1045, 1058 (S.D. Fla. 2009). A FDUTPA claim does not require “show[ing] [that] [a] defendant was the principal actor involved in the violative acts, or that [a] defendant initiated those acts.” Galstaldi, 637 F.Supp.2d at 1056. “[I]t is sufficient to allege that a party directly participated in a violation of the FDUTPA, even if that violation was initiated by another.” Sundance Apartments I, Inc. v. Gen. Elec. Capital Corp., 581 F.Supp.2d 1215, 1222 (S.D. Fla. 2008).

A. Rossi, Leonardo, Johnson, J.M. Products, Bass, Fabiani, and USQL Engaged in a Variety of Deceptive Acts or Unfair Practices Connected with the 1 MW Plant’s Operation in Florida.

Rossi, Leonardo, Johnson, J.M. Products, Bass, Fabiani, and USQL (“the FDUTPA Defendants”) participated in a variety of deceptive acts or unfair practices which collectively formed an overarching scheme to deceive Industrial Heat and IPH into allowing Rossi and Leonardo to move the 1 MW Plant to Florida and operate it there, to obtain money from Industrial Heat and IPH to which they were not otherwise entitled, and to manipulate an alleged “guaranteed performance” test.

1. The First Part of the Scheme.

First, Rossi, Leonardo, Johnson, and J.M. Products defrauded Industrial Heat and IPH into agreeing to relocate the 1 MW Plant to Florida. The undisputed facts proving this step in the scheme are described in more detail in Section VI supra.

2. The Second Part of the Scheme.

Second, the FDUTPA Defendants deceived Industrial Heat and IPH as to the reliability, independence, accuracy, success, and benefit of the 1 MW Plant’s operations and performance in Florida. They also prevented and blocked Industrial Heat and IPH from verifying the operations and performance of the 1 MW Plant.

Rossi, Leonardo, Johnson, J.M. Products, and Bass created the intentionally false illusion that J.M. Products was a “real customer” of Leonardo using the steam produced by the 1 MW Plant. They did so to falsely substantiate the reliability and independence of the 1 MW Plant’s operations and performance. Specifically, Rossi and Bass: (a) represented J.M. Products as an entity separate from Rossi and Leonardo by, for example, distinguishing it from Rossi and Leonardo in discussions with Industrial Heat and others, see SOMF ¶ 73a; (b) held out Bass as J.M. Products’ “Director of Engineering,” see SOMF ¶¶ 73b, 75a; (c) represented J.M. Products as having its own operations and using the 1 MW Plant’s steam to manufacture and process its own products, see SOMF ¶¶ 73c, 75b; and (d) represented J.M. Products as satisfied with the power it was purportedly receiving from the 1 MW Plant, see SOMF ¶¶ 73d, 75c. Johnson and J.M. Products also portrayed J.M. Products as receiving, measuring and being satisfied with the power it was purportedly receiving from the 1 MW Plant by sending monthly letters to Industrial Heat stating the amount of power it was receiving and offering to pay for such power. See SOMF ¶ 74a. Separately, Rossi, Leonardo, Johnson, and J.M. Products continued to portray J.M. Products as a credible company by representing that it was affiliated with Johnson Matthey. See SOMF ¶¶ 73e, 74b.

Rossi, Leonardo, Johnson, J.M. Products, and Bass’s representations and actions were meant to present J.M. Products as a check on, and confirmation of, claims by Rossi, Leonardo, and Penon that the 1 MW Plant was operating effectively and producing an extraordinarily high volume of steam. SOMF ¶ 76. The reality, however, was far different. J.M. Products had no manufacturing process to use the steam allegedly produced by the 1 MW Plant, made no products, and had no customers other than Leonardo itself. See SOMF ¶ 77. Rossi and Leonardo entirely controlled and funded J.M. Products and Bass. SOMF ¶ 78. Bass was hired as J.M. Products’ independent contractor (not employee) by Rossi and Leonardo, and worked under the direction of Rossi and Leonardo. SOMF ¶ 78a. Johnson and Bass had little to no knowledge of J.M. Products’ supposed business and operations. SOMF ¶ 78b. The Johnson/J.M. Products monthly letters on the power J.M. Products was allegedly receiving from the 1 MW Plant were drafted and the information contained therein provided by Rossi. SOMF ¶ 78c. J.M. Products was not an affiliate of Johnson Matthey, but rather owned by a U.S. trust over which Johnson had control as trustee. SOMF ¶ 79.

Rossi, Leonardo, Fabiani, and USQL also deceived Industrial Heat and IPH as to the accuracy and success of the 1 MW Plant’s operations and the accuracy of measurements of the 1 MW Plant’s performance. Rossi and Leonardo (through Penon) and Fabiani and USQL (themselves and through Penon) provided measurement data to Industrial Heat and IPH (see SOMF ¶ 80) that was fabricated, obtained as the result of manipulating the 1 MW Plant’s operations, or incomplete such as to render it misleading. For one, the power absorption data that Fabiani and Penon provided Industrial Heat and IPH (which were nearly identical to each other, see SOMF ¶ 81) materially conflicted with the data provided by Florida Power and Light (“FPL”). Indeed, during certain time periods, the false data from Fabiani and Penon reflecting that the 1 MW Plant used more power than FPL was providing to the entire warehouse facility where the 1 MW Plant was located – an impossible feat even if every single light, fan and computer at the warehouse was turned off during these time periods. See SOMF ¶ 82. Rossi and Leonardo admitted to Industrial Heat and IPH that FPL’s electrical usage data “[would] be a confirmation of the [1 MW Plant’s] COP.” See SOMF ¶ 59 & Ex. 34 at 4th Am. AACT Ex. 16. Fabiani and Penon provided fabricated electrical usage data instead of the real data from FPL in order to avoid Industrial Heat and IPH being able to use the real data as a check or confirmation of Rossi and Leonardo’s claims about the 1 MW Plant’s performance. Furthermore, Rossi and Leonardo withheld material information when providing data to Penon, particularly (a) discrepancies between measurements taken from Leonardo’s side of the Doral facility and measurements taken from J.M. Products’ side of the Doral facility; and (b) instances when the 1 MW Plant had operational problems or had to be shut down. SOMF ¶ 83. This information is material to understanding the implications and significance of Penon’s data, and thus withholding it renders such data incomplete and misleading.

Rossi, Leonardo, Johnson, J.M. Products, Fabiani, and USQL prevented or blocked Industrial Heat or IPH from verifying the 1 MW Plant’s operations and performance. To begin, Rossi and Leonardo altered the 1 MW Plant’s setup in Florida from the design created by Industrial Heat personnel in North Carolina in order to make evaluating the 1 MW Plant’s performance more difficult. SOMF ¶ 84. For example, the 1 MW Plant was designed to produce steam, yet Rossi and Leonardo removed the steam trap and condensate line placed on the pipe intended to carry the steam out of the 1 MW Plant. See id. These devices would have helped measure whether the 1 MW Plant was producing pure steam as claimed or just water or a combination of water and steam. In addition, Rossi and Leonardo refused to grant Industrial Heat personnel access to the Doral facility in both July and December 2015 (which refusal Johnson and J.M. Products complied with and enforced). See SOMF ¶¶ 86, 87. Rossi and Leonardo (again with J.M. Products’ concurrence) also prohibited Industrial Heat personnel from entering or knowing anything about J.M. Products’ side of the Doral facility entirely. SOMF ¶ 85. Once an Industrial Heat engineer finally gained access to the Doral facility in February 2016, he was promptly able to determine that Rossi and Leonardo’s claims about the performance of the 1 MW Plant – claims that had been backed up by the other FDUTPA Defendants – were simply impossible. See SOMF ¶ 88.

For their part, following the completion of the purported Guaranteed Performance test, Fabiani and USQL refused to provide Industrial Heat with data that they had collected during the purported test, despite Industrial Heat’s request for and despite initially committing to produce such data. SOMF ¶¶ 96-99. [96 . 97 . 98 . 99] Fabiani (on behalf of USQL), along with Rossi (on behalf of Leonardo and J.M. Products), also removed, modified, or destroyed data and equipment from the Doral facility following the completion of the purported “guaranteed performance test” without notifying or obtaining the consent of Industrial Heat or IPH. SOMF ¶¶ 37, 104, 105. All of this, of course, was on top of Fabiani and USQL providing fabricated data to Industrial Heat and IPH during the purported test, as noted already above.

3. The Third Part of the Scheme.

Third, Rossi and Leonardo demanded payment of $89 million under the License Agreement based on the scheme in which all the FDUTPA Defendants participated. Rossi and Leonardo claimed entitlement to $89 million based on Penon’s “final report” stating that the “guaranteed performance test” had been completed and satisfied pursuant to the License Agreement. Compl. ¶¶ 72-74; AACT at 13, 14. This illusory entitlement arose from the cumulative effect of the first two parts of the scheme: (1) Rossi, Leonardo, Johnson, and J.M. Products successfully manipulating Industrial Heat into agreeing to the 1 MW Plant’s relocation to Florida and (2) all FDUTPA Defendants portraying the 1 MW Plant’s operations and performance as reliable, independent, accurate, and successful. See Section VII supra.

B. The FDUTPA Defendants’ Deceptive Acts or Unfair Practices Caused Industrial Heat and IPH to Suffer Actual Damages.

The scheme orchestrated by the FDUTPA Defendants damaged Industrial Heat and IPH. Industrial Heat and IPH relied on this scheme in reimbursing the FDUTPA Defendants’ expenses and in incurring their own expenses. Specifically, they relied on Rossi, Leonardo, Johnson, and J.M. Products’ manipulation as to the 1 MW Plant’s relocation to Florida in paying for (1) the 1 MW Plant’s transportation to Florida; (2) the procurement and delivery of equipment for the 1 MW Plant’s reassembly in Florida; and (3) the procurement and transportation of personnel to assemble the 1 MW Plant in Florida. See Section VI supra; SOMF ¶ 89. They also relied on the FDUTPA Defendants’ portrayal of J.M. Products and representations of measurement data and performance in paying for, among other things, (1) repairs and maintenance to the 1 MW Plant; (2) new equipment for the Doral warehouse facility; and (3) personnel to work at the warehouse and on maintenance of the 1 MW Plant (such as Barry West, T. Barker Dameron, Joe Murray, and Fabiani). See SOMF ¶ 89.

Furthermore, Industrial Heat and IPH clearly incurred actual damages arising from this litigation, as Rossi and Leonardo would have had no basis to sue Industrial Heat and IPH if they had not been able to use J.M. Products and the 1 MW Plant’s relocation to Florida as a cover for conducting the purported Guaranteed Performance test. See Section VII.A. supra.

VIII. Industrial Heat Is Entitled to Summary Judgment on the AACT Count V.

Industrial Heat is entitled to partial summary judgment on its breach of contract claim (Count V) against Third-Party Defendants Fulvio Fabiani (“Fabiani”) and United States Quantum Leap, LLC (“USQL”) (collectively, the “USQL Defendants”) because the undisputed facts show that the USQL Defendants breached Section 6 of the parties’ Technical and Consulting Agreement (the “USQL Agreement”).

Here, a contract existed between Industrial Heat and the USQL Defendants, and the contract remained in existence at the time of the breach by the USQL Defendants. On or about September 1, 2013, Industrial Heat and USQL entered into the original USQL Agreement pursuant to which Fabiani and USQL were to provide services to Industrial Heat related to the manufacture and development of products relating to the E-Cat IP. SOMF ¶ 90. Fabiani executed a joinder to the USQL Agreement, agreeing to be bound by certain provisions contained therein, including Section 6 relating to “Rights to Materials.” SOMF ¶ 91. The USQL Agreement was renewed and extended in August of 2014, and again in July of 2015. See SOMF ¶¶ 92, 94. Fabiani executed joinders in connection with both of those renewals. See SOMF ¶¶ 93, 95. The USQL Defendants do not dispute that the termination date of the USQL Agreement was March 31, 2016. See SOMF ¶ 100.

Section 6 of the USQL Agreement provides:

All Confidential Information, records, files, memoranda, reports, drawings, plans, designs, specifications, tests and results, recordings, documents and the like (together with all copies thereof), including any of the foregoing that are electronically maintained, relating to the business of Industrial Heat or the engagement of USQL [and Fabiani] pursuant to this Agreement that USQL [and Fabiani] shall use or prepare or come in contact with in the course of, or as a result of, the engagement of USQL [and Fabiani] under this Agreement shall remain the sole property of Industrial Heat or shall be deemed contracted for as a part of the services provided hereunder…Upon termination of this Agreement or upon the prior demand of Industrial Heat, USQL [and Fabiani] shall immediately return all such items and materials (and all copies thereof, including any electronically maintained copies) to Industrial Heat and shall not thereafter cause removal thereof from Industrial Heat’s premises…

USQL Agreement (SOMF Ex. 67) § 6. Thus, upon termination of the contract or upon earlier demand by Industrial Heat, the contract required the USQL Defendants to provide Industrial  Heat with all data and other documents they “use[d] or prepare[d] or c[a]me into contact with” in connection with the services they provided during the testing of the 1 MW Plant. Id. Such documents are the “sole property of Industrial Heat” or are specifically deemed contracted for as a part of the services provided. Id.

It is not disputed that the USQL Defendants refused to provide Industrial Heat with data and documents to which it was contractually entitled, despite repeated requests to do so. On February 23, 2016, Fabiani acknowledged that the USQL Defendants would provide Industrial Heat with “all electrical and thermal data of the system throughout the period of the test” and an “official report to bring to light all the flaws and functional deficiencies of the system,” which would also mention all “plant stop periods (total or partial)” and the reasons therefor. SOMF ¶ 96 & Ex. 70. Fabiani delivered no such data and documents to Industrial Heat. Industrial Heat repeatedly requested from the USQL Defendants copies of the promised raw thermal and electrical data as well as the final report relating to the testing in Doral. See SOMF ¶¶ 97-98. Industrial Heat also requested flow meter records the USQL Defendants represented they had. Id. Notwithstanding Industrial Heat’s repeated demands for the USQL Defendants to provide it with what the USQL Agreement made Industrial Heat’s sole property, the USQL Defendants refused. See SOMF ¶ 99. Their actions breached Section 6 of the USQL Agreement.

Additionally, Fabiani testified that he had other relevant documents and data that he did not provide to Industrial Heat, including data from thermocouples that were installed on individual E-Cat reactors in the 1 MW Plant, and e-mails to Penon that contained data about the operation of the 1 MW Plant. See SOMF ¶ 104. By contract, these documents and data were the “sole property” of Industrial Heat and needed to be turned over to Industrial Heat no later than “[u]pon termination of th[e USQL] Agreement.” See USQL Agreement (SOMF Ex. 67) § 6. [missing text?] documents and data. See SOMF ¶ 104. This conduct constitutes a further breach of Section 6 of
the USQL Agreement. [10]


10 The USQL Defendants contend that their duty to provide data and documents to Industrial Heat pursuant to the USQL Agreement was excused based on Industrial Heat’s “precedent breach” of failing to pay the final invoice under the Agreement. [D.E. 149] at 20. This argument fails. First, the USQL Defendants’ breach occurred before any obligation of Industrial Heat to pay the final invoice. The USQL Defendants’ final invoice dated March 30, 2016 was received by Industrial Heat on April 6, 2016. See SOMF ¶ 101. Industrial Heat had fifteen days from then to pay the invoice, so payment was due by April 21, 2016. USQL Agreement (SOMF Ex. 68) § 10. The USQL Defendants breached the USQL Agreement well before that by failing to comply with Industrial Heat’s information request on March 22, 2016 (and multiple times thereafter). See SOMF ¶¶ 97-99. Second, notwithstanding the USQL Defendants’ breach, Industrial Heat repeatedly offered to pay the USQL final invoice if the USQL Defendants would provide the documents and data they were required to provide under the Agreement, but the USQL Defendants refused to comply with their obligations under the Agreement. See SOMF ¶¶ 98, 99.


There can be no dispute that Industrial Heat has demonstrated damages resulting from the USQL Defendants’ breach. Industrial Heat paid the USQL Defendants $10,500 per month from February 2015 through February 2016 and also paid Fabiani’s monthly rent of $1,370 during that time period. See SOMF ¶¶ 102, 103. Industrial Heat, however, did not get the benefit of its bargan [sic] because the USQL Defendants refused to provide Industrial Heat with the documents and data that were “the sole property of Industrial Heat” or “contracted for as a part of the services provided”. USQL Agreement (SOMF Ex. 67) § 6. Partial summary judgment in favor of Industrial Heat as to Count V of the AACT is warranted. See Vital Pharm., Inc., 2016 WL 4479370, at *9.

CONCLUSION

For these reasons, the Court should grant summary judgment in Defendants’/CounterPlaintiffs’ favor on Counts I, III, IV, and VI of the Complaint, and on all Counts of the 4th Amended AACT.

Study document

(exists also as a separate page.)

DEFENDANTS’/COUNTERPLAINTIFFS’ STATEMENT OF MATERIAL FACTS IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT

referring to

DEFENDANTS’/COUNTERPLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT AND MEMORANDUM OF LAW IN SUPPORT THEREOF

This copy is being annotated with links to cited documents. Comments not a part of the document will be in brackets if very brief (such as “[sic]”) or in indented italics. It is intended that this document be neutral, separate pages may be created and linked at the end for opinion and assessments. Please note any errors in Comments at the end of this page.

Each numbered paragraph in this document has an anchor numbered as the paragraph. For example, paragraph 107 may be linked by appending “#107” to the URL of this page. Using the present URL:

http://coldfusioncommunity.net/rvd-study-of-207ih-statement-of-material-fact-supporting-msj/#107


DEFENDANTS’ STATEMENT OF MATERIAL FACTS IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT

Defendants Thomas Darden (“Darden”), John T. Vaughn (“Vaughn”), and Cherokee
Investment Partners, LLC (“Cherokee”) (collectively, “Defendants”) and Defendant-CounterPlaintiffs
Industrial Heat, LLC (“Industrial Heat”) and IPH International, B.V. (“IPH”), in
accordance with Rule 56 of the Federal Rules of Civil Procedure and Local Rule 56.1, submit the
following statement of material facts as to which they contend there does not exist a genuine
issue to be tried:

1. On October 26, 2012, Industrial Heat, Leonardo Corporation, a New Hampshire Corporation “Leonardo NH”), Plaintiff Andrea Rossi (“Rossi”), and AmpEnergo, Inc. (“AEG”) executed and entered into a License Agreement. See Ex. 1, a true and correct copy of the License Agreement.

2. Plaintiff Leonardo Corporation, a Florida corporation (“Leonardo FL”) did not execute and was not a party to the License Agreement.[1] See id.


[1] For the sake of simplicity, a reference to “Leonardo” means Leonardo FL and/or Leonardo NH.



3. There are no provisions in the License Agreement requiring Industrial Heat to keep confidential the E-Cat IP (as that term is defined in the License Agreement). See id.

4. On or about October 26, 2012, Industrial Heat made the initial payment of $1.5 million to Leonardo NH as specified in the Section 3.2(a) of the License Agreement. See Compl. ¶ 47; 4th Am. AACT at 8.

5. The 1 MW Plant was to involve at least 54 E-Cat reactors for the 24-hour Validation Test contemplated in Section 4 of the License Agreement. See Rossi Dep. (excerpts of which are attached hereto as Composite Ex. 2) 151:1-2.

6. On April 23, 2013, Rossi represented to Industrial Heat that: (a) he had met with Health Office of the Province of Ferrara; (b) that the Health Office had to authorize the 24-hour Validation Test contemplated in Section 4 of the License Agreement; and (c) that, because of the requirements of Italian law, he planned to test only 25% of the number of reactors contemplated in the License Agreement. See Ex. 2 at 151:1-2; Ex. 3 (4th Am. Answer, Additional Defenses, Countercls., & Third-Party Claims (“4th Am. AACT”) Ex. 9).

7. On April 24, 2013, Rossi represented to Industrial Heat that Italian law would allow the Validation Test to be done using 30 reactors. See Ex. 4 ([IH-00098392-00098396]).

8. On or about April 29, 2013, Industrial Heat, Leonardo NH, Rossi, and AEG executed and entered into a First Amendment to the License Agreement (“First Amendment”). See Ex. 5, a true and correct copy of the First Amendment.

9. Leonardo FL was not a party to the First Amendment. See id.

10. Rossi is not the owner of Leonardo FL. See Ex. 2 at 38:21-39:17.

11. Neither Industrial Heat nor IPH ever consented to any assignment by Leonardo NH of Leonardo NH’s rights under the License Agreement or First Amendment to Leonardo FL. See Darden Decl. (attached hereto as Ex. 6) at ¶ 8.

12. On or about April 29, 2013, Industrial Heat and IPH entered an Assignment and Assumption of License Agreement (“Assignment and Agreement”). See Ex. 7, a true and correct copy of the Assignment and Assumption.

13. Rossi and Leonardo NH consented to the Assignment and Agreement. See Ex. 5 § 1;

14. On or about April 29, 2013, Leonardo NH and Rossi executed a Certificate certifying to IPH that the representations and warranties in the License Agreement, as amended by the First Amendment, remained true and correct. See Ex. 8, a true and correct copy of the Certificate.

15. Immediately prior to commencing the Validation Test, Rossi claimed that Italian law was even more restrictive, and only would permit using 18 E-Cat reactors for the test. See Ex. 6 at ¶ 9.

16. In fact, the Ferrara Health Office told Rossi that he could proceed with the Validation Test without any restriction on the number of reactors to be tested. See Ex. 2 at 148:12-149:7, 149:19-23;

17. Industrial Heat relied on Rossi’s false representations regarding Italian law in entering into the First Amendment. See Ex. 6 at ¶ 7; Darden Dep. (excerpts of which are attached hereto as Composite Ex. 9) 200:5-15.

18. During the purported Validation Test that commenced on April 30, 2013, 18 ECat reactors were operated as “Unit A” (as “Unit A” is defined in the First Amendment). See Penon Dep. (excerpts of which are attached hereto as Composite Ex. 10) 149:25-151:12, 154:6-13; Ex. 11 (Penon Dep. Ex. 8).

19. The purported Validation Test that commenced on April 30, 2013 and concluded on May 1, 2013 was not performed for a duration of twenty-four consecutive hours (but rather for only 23.5 hours). See id.

20. The purported Validation Test that commenced on April 30, 2013 did not “measure the flow of the heated fluid and the Delta T between the temperature of the fluid before and after the E-Cat reaction,” as specified in the First Amendment. See id. [Abd note: see Exhibit 11, Delta T was not reported, fluid before was assumed to be at boiling point, “in order to be conservative.”)

21. Industrial Heat paid $10 million to Leonardo on or about May 2, 2013. See Compl. ¶ 58; 4th Am. AACT at 10. [this is pdf page 11, document numbered page 10.]

22. Industrial Heat also paid $3,219,950 to AEG on or about August 12, 2013. See AEG Dep. (excerpts of which are attached hereto as Composite Ex. 12) 190:23-191:8; Ex. 13 ([AE000255-000256]).

23. In August 2013, the E-Cat Unit was delivered to Industrial Heat at its facility in North Carolina. See Compl. ¶ 59; 4th Am. AACT at 10.  [¶ 59] ( The “E-Cat Unit” is defined in the License Agreement as the “Plant” and is sometimes referred to as the “1 MW E-Cat Unit” or the “1 MW Plant.”

24. Rossi and Leonardo did not commence a “Guaranteed Performance Test” in 2013 or 2014. In fact, they did allegedly commence such a test until 2015. See Compl. ¶ 66; Pls.’ Resp. & Objections to Industrial Heat’s 1st Req. for Admissions (attached hereto as Ex. 14) at Resp. Nos. 36 & 37.

25. Rossi and Leonardo did not complete any “Guaranteed Performance Test” within the time period set forth in Section 5 of the License Agreement. See id.; Ex. 1 § 5. [link is to original filing, not the much larger file provided as Exhibit 1]

26. In October 2013, Industrial Heat and Rossi executed a proposed Second Amendment to the License Agreement (the “Proposed Second Amendment”), which is dated “October __, 2013.” See Ex. 15, a true and correct copy of the Proposed Second Amendment.

27. AEG did not sign the Proposed Second Amendment. See id. AEG, which stood to earn money if a “Guaranteed Performance Test” was successful, understood that their considered refusal to sign the Proposed Second Amendment rendered the document invalid. See Ex. 12 at 79:2-18, 87:2-11; Ex. 16 ([IH-00089736-00089743]).

28. Leonardo NH did not sign the Proposed Second Amendment. See Ex. 15

29. Leonardo FL did not sign the Proposed Second Amendment. See id.

30. IPH did not sign the Proposed Second Amendment. See id.

31. On April 30, 2014, Rossi admitted that the Proposed Second Amendment was not effective because AEG did not sign it. See Leonardo Corp. Dep. (excerpts of which are attached hereto as Composite Ex. 17) 195:19-196:24; Composite Ex. 18 [IH 0091696-0091697] (AEG Dep. Ex. 15 [sic., Ex 17]; Leonardo Corp. Dep. Ex. 15).

32. Industrial Heat also recognized that the Proposed Second Amendment was not effective absent the signatures of all relevant parties. See Industrial Heat Dep. (excerpts of which are attached hereto as Composite Ex. 19) at 202:11-16.

33. The Proposed Second Amendment addressed the testing of “a six cylinder Hot Cat unit reasonably acceptable to [Industrial Heat]” (the “Six Cylinder Unit”), not the E-Cat Unit that was the subject of the License Agreement and the First Amendment. See Ex. 15.

34. The Six Cylinder Unit in the Proposed Second Amendment is separate and distinct from the 1 MW E-Cat Unit or 1 MW Plant as referenced in the License Agreement, the First Amendment, and the Complaint. The Six Cylinder Unit is a round, tub unit containing six hot cat reactor units and is used to heat oil rather than water. See Ex. 2 at 172:21-173:8, 174:5-8Ex. 17 at 196:25-197:13; Ex. 20 (Rossi Dep. Ex. 12).

35. The Six Cylinder remains in North Carolina and was never sent to Florida. See Ex. 2 at 174:22-25; Ex. 6 at ¶ 15.

36. What Rossi and Leonardo used for their purported “Guaranteed Performance Test” in Florida was the 1 MW Plant, not the Six Cylinder Unit. See Ex. 14 at Resp. No. 1.

37. Rossi claims that, after performance of the “test,” he dismantled a heat exchanger and all associated piping that supposedly dissipated heat generated by the 1 MW Plant during the purported “Guaranteed Performance Test.” See Ex. 17 at 271:1-272:2.

38. Neither Industrial Heat nor IPH ever sub-licensed the E-Cat IP for profit. See Ex. 6 at ¶ 16; Ex. 19 at 40:25-41:10.

39. Neither Industrial Heat nor IPH ever created a product or service that could be sold based on the E-Cat IP. See id.

40. Neither Industrial Heat nor IPH were ever able to replicate the results Rossi and Leonardo claimed using the E-Cat IP. See Ex. 6 at ¶ 16; Ex. 9 at 100:7-101:5; Ex. 12 at 210:6-10; Ex. 19 at 40:25-41:10, 148:13-149:17, 150:14-151:4, 182:6-8; Vaughn Dep. (excerpts of which are attached hereto as Composite Ex. 21) 106:14-107:1, 128:24-129:9, 249:7-14); Ex. 22 [orig. filed under seal, refiled 247] (AEG Dep. Ex. 20).

41. Rossi and Leonardo did not enter into any confidentiality agreements with third parties regarding the E-Cat IP. See Pls.’ Resp. & Objections to Industrial Heat’s 2d Set of Interrog. (attached hereto as Ex. 24) at Resp. No. 18.

42. Rossi and Leonardo have neither suffered nor alleged any cognizable damages as result of the fraud alleged in Count VI of the Complaint that are distinct from damages they claim to have been suffered as a result of alleged breaches of the License Agreement. See Compl. ¶ 117, Prayer for Relief ¶ H.

43. Rossi has made public disclosures on his website, Journal of Nuclear Physics (“JONP”), revealing specific terms of the License Agreement. Specifically, Rossi publicly disclosed that that the License Agreement required a test of the 1 MW Plant, a test to be conducted over 400 days, a test involving 350 days of operation of the 1 MW Plant, and a guaranteed performance or “guarantees of performance” test. See JONP (excerpts of which are attached hereto as Composite Ex. 25) at July 2, 2015 & Dec. 21, 2015; Industrial Heat’s Resp. & Objections to Rossi’s 2d Set of Interrog. (attached hereto as Ex. 26) at Resp. Nos. 1-4.

44. Rossi made these public disclosures without written advance approval from either Industrial Heat or IPH. See Ex. 6 at ¶ 11.

45. Rossi and Leonardo filed the License Agreement in the public docket of this Court without written advance approval of Industrial Heat or IPH. See Compl. Ex. B.

46. By letter dated February 17, 2016, Jones Day on behalf of IPH requested Rossi and Leonardo to assign to IPH the Licensed Patents (as defined in the License Agreement) with respect to the Territory (as also defined in the License Agreement). Jones Day enclosed an assignment with the letter. A true and correct copy of the February 16, 2016 letter and the assignment enclosed therewith is attached hereto as Ex. 27.

[Abd note: I do not find the License agreement clear on the definition of “Licensed Patents.” The list of patents in the Agreement, styled Exhibit A, is vague. However, the Agreement preamble strongly implies that all related technology is included, and not just “E-Cat.” How this affects this IH claim, I am not yet sure.]


47. Rossi and Leonardo did not execute the assignment as requested by letter of February 16, 2016. See Pace Decl. (attached hereto as Ex. 28) at ¶ 6.

48. Leonardo filed over one hundred patent applications relating to the Licensed Patents (as defined in the License Agreement) without informing IPH. See IPH’s Resp. & Objections to Rossi’s 1st Set of Interrogs. (attached hereto as Ex. 29) at Resp. No. 5 & Ex. A.

49. Leonardo abandoned over one hundred patent applications relating to the Licensed Patents (as defined in the License Agreement) without prior written notice to IPH. See id.

50. Leonardo charged Industrial Heat and IPH for fees and expenses associated with Leonardo’s patent activities, and Industrial Heat and IPH paid those fees and expenses. See Composite Ex. 30 [originally filed under seal] ([IH-00131929]; [IH-00014673]; [IH-00003745-00003746]; [IH-00013195-00013196]; [IH-00092023-00092024]; [IH-00011989-0011990]; Leonardo Corp. Dep. Ex. 7).

51. Rossi and Leonardo are engaged in designing and developing what are classified as “E-Cat Products” under the License Agreement with persons or entities other than Industrial Heat and IPH. See Ex. 25 at Feb. 9, 11, 13, 18, 20, 21, & 22, March 25 & 30, April 27, June 26, & July 23, 2016; Ex. 29 at Resp No. 2.

52. Rossi and Leonardo have engaged in design and development activities with ABB Group and Hydro Fusion, Ltd. See Ex. 17 at 234:21-235:3; Ex. 25 at June 4, June 14, July 16, July 23, July 24, Aug. 8, Oct. 2, Oct. 6, & Nov. 15, 2016; Ex. 29 at Resp. No. 3.

53. The IRS Form 1120 for the year 2012 filed by Leonardo FL, as produced by Plaintiffs in this action, is attached as Exhibit 31 ([Rossi_00011665-00011684]).

54. The IRS Form 1120X for the year 2013 filed by Leonardo FL, as produced by Plaintiffs in this action, is attached as Composite Exhibit 32 [filed under seal] ([Rossi_00011685-00011704]; [Rossi_00011715-00011734]; [Rossi_00011736-00011751]).

55. The IRS Form 1040NR for the year 2013 filed by Rossi, as produced by Plaintiffs in this action, is attached as Exhibit 33 [filed under seal] ([AE000358]).

56. Beginning in June 2014, Rossi, on behalf of Leonardo, repeatedly stated to Industrial Heat that he had “found” a “customer” with its own facility [in] Florida, and that this “customer” had a commercial need for, and was going to use in a chemical manufacturing process, steam that Rossi and Leonardo intended to produce from the 1 MW Plant. See Ex. 2 at 183:9-184:5, 199:9-16; Ex. 9 at 164:19-23; Ex. 19 at 215:3-10, 229:17-21, 232:15-23; Ex. 21 at 180:8-22, 181:7-17, 194:17-20, 198:16-20, 267:18-268:4, 268:23-269:4; Composite Ex. 34 (4th Am. AACT Ex. 16; Rossi Dep. Exs. 13 & 14; [IH-00011175-00011176]).

57. Rossi also represented, on behalf of Leonardo, that this “customer” was affiliated with Johnson Matthey, plc (“Johnson Matthey”), a British multinational specialty chemical company with over £10 billion in revenue. See Ex. 9 at 172:6-173:12, 185:18-186:2, 186:9-18; Ex. 19 at 213:25-214:9, 215:3-10, 229:21-230:5; 231:22-232:23; Ex. 21 at 180:13-181:25, 194:9-16; Composite Ex. 35 ([IH-00090895-00090896]). [Besides the initial correspondence, see particularly this page.]

58. This “customer” was Third-Party Defendant J.M. Products, Inc. (“J.M. Products”), who at the time was known as J.M. Chemical Products, Inc. See Ex. 2 at 183:9-184:11; J.M. Products Dep. (excerpts of which are attached hereto as Ex. 36) 66:22-67:2 [not highlighted]; Johnson Dep. (excerpts of which are attached hereto as Ex. 37) 88:8-21, 97:13-18; Composite Ex. 38 (Johnson Dep. Exs. 11 & 12).

59. Rossi asserted to Industrial Heat that having a “real customer” with a need for steam would be an independent check on how the 1 MW Plant would operate, in that the “customer’s” purchase of the Plant’s steam would confirm that such steam was being produced. See Ex. 17 at 242:21-243:2; Ex. 34 at [sic, “formerly presented as”] 4th Am. AACT Ex. 16.

60. The original drafts of a proposed Term Sheet, by which Industrial Heat would agree to move the 1 MW Plant from its facility in North Carolina to the “customer’s” facility in Florida, were prepared by Rossi and named the “customer” as Johnson Matthey. See Composite Ex. 39 ([IH-00007120-00007123]; [IH-00007129-00007131]).

61. Every attempt made by Industrial Heat to investigate or contact the “customer,” a counter-party to the proposed Term Sheet, was rebuffed by Rossi, on the basis that Johnson Matthey did not want its name associated with the venture at the time. See Ex. 9 at 177:11-178:2; Ex. 19 at 228:4-11; Ex. 21 at 198:7-20, 199:20-200:3, 271:7-16; Composite Ex. 40 ([IH-00090826-00090827]; [IH-00007113-00007114]; [IH-00007117-00007118]);

62. On July 28, 2014, Industrial Heat, Rossi, and Third-Party Defendant Henry Johnson (“Johnson”) met in North Carolina to discuss moving the 1 MW Plant from Industrial Heat’s facility in North Carolina to J.M. Products’ facility in Florida. Ex. 9 at 173:21-174:2; Ex. 37 at 230:18-231:6. Prior to the meeting, Rossi had told Industrial Heat that the purpose of the meeting would be to meet a Johnson Matthey representative. See Ex. 9 at 171:14-172:3, 174:3-11; Ex. 19 at 226:1-6, 226:14-227:2; Ex. 21 at 205:8-9, 270:21-24. During the meeting, Rossi introduced Johnson as J.M. Products’ president, and further represented (with Johnson’s acquiescence and adoption) that J.M. Products was affiliated with Johnson Matthey. See Ex. 9 at 174:12-175:11; Ex. 19 at 226:6-13, 228:4-11; Ex. 21 at 203:6-9, 203:15-20, 204:11-21, 205:17-23, 269:8-270:6; Ex. 37 at 237:13-22. Both Rossi and Johnson further represented that J.M.
Products had its own facility in Florida, and was intending to use steam produced by the 1 MW Plant in a chemical manufacturing process. See Ex. 9 at 175:12-176:14, 180:7-12, 181:5-14; Ex. 37 at 237:13-22.

63. Following the July 28, 2014 meeting, Rossi continued to make representations to cause Industrial Heat to believe that J.M. Products was affiliated with Johnson Matthey, and that publicly identifying Johnson Matthey would lose J.M. Products as a “customer.” See Composite Ex. 41 ([IH-00011864]; [IH-00011871-00011872]; [IH-00011867-00011870]);

64. Also following the July 28, 2014 meeting, Rossi changed the “customer” in the proposed Term Sheet to J.M. Products, insisting that Johnson Matthey did not want its involvement in the venture to be known. See Ex. 9 at 185:18-186:8; Ex. 21 at 194:9-16, 274:14-20, 275:7-8, 275:15-20, 275:25-276:3; Ex. 42 ([IH-00089932-00089938]).

65. Further, on August 6, 2014, Johnson, on behalf of J.M. Products, signed a representation that J.M. Products “[was] owned by an entity formed in the United Kingdom.” See Ex. 37 at 239:15-240:2, 247:16-249:25; Composite Ex. 43 (Johnson Dep. Exs. 50, 51, & 52).

66. From the time Rossi first raised the “customer” with Industrial Heat to the time the Term Sheet was executed, J.M. Products did not have a chemical manufacturing process in place with a need for the steam to be produced by the 1 MW Plant. In fact, it did not have any operations at all. See Ex. 2 at 191:18-192:1; Ex. 36 at 34:9-14; Ex. 37 at 31:19-25, 35:13-15, 90:25-91:3, 219:19-221:15, 222:3-24, 235:19-236:2.

67. Also during this time period, J.M. Products was not in any way affiliated with Johnson Matthey; it was owned by a U.S. trust over which Johnson had control as trustee. See Ex. 2 at 202:8-203:11; Ex. 36 at 111:11-112:7, 204:21-205:19; Ex. 37 at 14:21-15:12, 171:13-173:3, 240:7-20, 243:20-244:1.

68. The only connections between J.M. Products and Johnson Matthey were that Rossi, on behalf of J.M. Products, once asked for a price quote from Johnson Matthey for the purchase of platinum sponge, and then later bought some filters from a Johnson Matthey subsidiary in the United States (to mine them for platinum sponge contained therein). See Ex. 2 at 201:14-203:11; Ex. 17 at 215:14-218:14, 221:8-223:16; Ex. 36 at 104:3-112:17; Ex. 37 at 125:8-127:25; Ex. 44 (Leonardo Corp. Dep. Ex. 17).

69. Rossi, on behalf of Leonardo, and Johnson, on behalf of J.M. Products, each made these representations regarding the “customer” to induce Industrial Heat to sign a Term Sheet to allow Rossi and Leonardo to move the 1 MW Plant to Florida. See Ex. 2 at 192:21-25, 200:1-3; Ex. 9 at 177:11-178:2, 185:18-186:8; Ex. 19 at 191:13-16, 192:15-20, 215:6-10, 218:9-13, 226:1-228:11, 236:22-237:20; Ex. 34; Ex. 37 at 230:18-231:6, 232:9-19, 234:2-235:18, 237:13-22.

70. In reliance on these representations, Industrial Heat entered into a Term Sheet on or about August 13, 2014 with Leonardo and J.M. Products. See Ex. 9 at 156:24-162:5, 164:19-167:14, 169:21-24, 180:15-181:3, 191:21-23; Ex. 19 at 191:21-24, 213:25-214:19, 215:20-216:12, 217:12-221:3, 231:24-232:20; Ex. 21 at 182:5-183:8, 184:7-15, 185:3-10, 197: 8-16, 198:7-201:2, 267:18-268:7, 272:5-12, 276:19-277:9. A true and correct copy of the final executed Term Sheet is attached hereto as Exhibit 45.

71. Industrial Heat would not have entered into the Term Sheet or allowed Rossi to remove the 1 MW Plant to Florida if Industrial Heat had known that the “customer” had no affiliation with Johnson Matthey or any other publicly traded company, and no real manufacturing process or need for steam or heat. See Ex. 6 at ¶ 14; Ex. 19 at 218:2-221:3.

72. Rossi rented the premises at 7861 N.W. 46th Street, Doral, FL 33166 (the “Doral Facility”) on behalf of Leonardo. See Ex. 2 at 200:9-17; Ex. 36 at 24:25-25:9, 72:7-20, 83:6-17; Ex. 37 at 40:25-41:6, 110:12-111:18, 123:10-17; Composite Ex. 46 (Johnson Dep. Ex. 15; J.M. Products Dep. Ex. 3).

73. After the 1 MW Plant moved to the Doral Location, Rossi, acting at times for Leonardo, and at other times for J.M. Products, took the following steps to create the intentionally false illusion that J.M. Products was a “real customer” of Leonardo using steam produced by the 1 MW Plant:
a. Distinguishing J.M. Products from Rossi and Leonardo in communications with Industrial Heat and with others, and instructing others to do the same. See Composite Ex. 47 (Leonardo Corp. Dep. Ex. 20; Johnson Dep. Exs. 17 & 23; AEG Dep. Ex. 28; Bass Dep. Ex. 20; Rossi_00004860).
b. Holding out Third-Party Defendant James Bass (“Bass”) as J.M. Products’ “Director of Engineering.” See Bass Dep. (excerpts of which are attached hereto as Composite Ex. 48) 157:2-15.
c. Representing J.M. Products as having its own operations and a use for the 1 MW Plant’s steam. See Ex. 19 at 285:6-23; Ex. 47 at Leonardo Corp. Dep. Ex. 20.
d. Representing J.M. Products as being satisfied with the power it was purportedly receiving from the 1 MW Plant. See Ex. 47 at Leonardo Corp. Dep. Ex. 20.
e. Representing J.M. Products as being affiliated with Johnson Matthey. See Ex. 9 at 179:16-180:12; Ex. 19 at 229:21-230:5; Ex. 49 ([IH-00011231]).

74. After the 1 MW Plant moved to the Doral Location, Johnson, acting for J.M. Products, took the following steps to create the intentionally false illusion that J.M. Products was a “real customer” of Leonardo using steam produced by the 1 MW Plant:
a. Sending letters to Industrial Heat on the amount of power J.M. Products was
receiving and offering to pay for such power. See Ex. 9 at 294:16-295:18; Ex. 19
at 288:16-18; Ex. 21 at 246:14-17; Ex. 37 at 120:15-121:1, 167:24-168:2,168:13
169:3, 170:22-171:3; 172:23-173:12, 174:17-21, 178:23-179:3, 179:16-25;
Composite Ex. 50 (Johnson Dep. Exs. 18, 32, 34, 35, 36, 37, 38, & 39; Rossi Dep.
Ex. 21).
b. Sending letters to Industrial Heat representing J.M. Products to be an “Advanced
Derivatives of Johnson Matthew Platinum Sponges.” See Ex. 37 at 123:10-124:4,
171:13-173:3; Ex. 50 at Johnson Dep. Exs. 34 & 35.

75. After the 1 MW Plant moved to the Doral Location, Bass took the following steps to create the intentionally false illusion that J.M. Products was a “real customer” of Leonardo using steam produced by the 1 MW Plant:
a. Holding out himself as J.M. Products’ “Director of Engineering.” See Ex. 9 at 227:21-228:6; Ex. 19 at 289:2-7, 291:23-292:1; Ex. 36 at 44:5-9; Ex. 48 at 158:7-159:17; Ex. 51 (Bass Dep. Ex. 28)
b. Representing J.M. Products as having its own operations and a use for the 1 MW Plant’s steam. See Ex. 9 at 228:7-24, 291:8-12; Ex. 19 at 285:6-23.
c. Representing J.M. Products as being satisfied with the power it was purportedly receiving from the 1 MW Plant. See Ex. 9 at 295:25-296:12; Ex. 36 at 56:4-15, 61:9-18.

76. Each of Rossi, Leonardo, Johnson, J.M. Products, and Bass intended, by the actions enumerated above, to present J.M. Products to Industrial Heat as a check on, and confirmation of, claims by Rossi, Leonardo, and Fabio Penon (“Penon”) that the 1 MW Plant was operating effectively and producing a high volume of steam. See Ex. 17 at 242:21-243:2; Ex. 47 at Leonardo Corp. Dep. Ex. 20.

77. In reality, following the execution of the Term Sheet, J.M. Products had no manufacturing process to use the steam allegedly produced by the 1 MW Plant, made no products, and had no customers other than Leonardo itself. See Ex. 36 at 31:3-25, 32:14-17, 77:16-23, 233:14-16, 237:12-15, 248:23-249:3; Ex. 37 at 19:13-21:17, 22:24-23:8, 50:16-23, 53:7-11, 198:9-11, 224:20-226:10; Ex. 48 at 71:1-15, 133:23135:12, 136:12-19; Stokes Dep. (excerpts of which are attached hereto as Composite Ex. 52) 92:6-21, 93:21-94:6, 165:1-21, 191:16-22, 199:18-200:5.

78. In addition, Rossi and Leonardo entirely controlled and funded J.M. Products and Bass. See Ex. 17 at 207:24-209:13, 227:11-15; Ex. 36 at 17:6-16, 18:4-20, 22:16-23:4, 24:13-25:9; Ex. 37 at 56:13-15, 116:9-18, 117:23-118:1, 142:6-16, 144:16-146:14, 153:14-155:25, 158:5-11, 160:1-162:7, 229:8-18, 241:23-25; Ex. 48 at 96:13-20, 97:5-17, 98:1-3; Composite Ex. 53 (Johnson Dep. Exs. 16, 27, 29, 30, & 31). Moreover:
a. Bass was hired as J.M. Products’ independent contractor (not employee) by Rossi, and worked under Rossi’s direction. Ex. 17 at 209:14-18; Ex. 36 at 26:4-13; Ex. 37 at 59:22-60:3, 119:8-120:4, 156:1-9, 158:5-11, 162:8-163:15, 165:22-167:3; Ex. 48 at 98:1-3.
b. Johnson and Bass had little to no knowledge of J.M. Products’ supposed business and operations. See Ex. 37 at 19:13-21:17, 22:24-23:8, 50:16-23, 53:7-11, 56:7-10, 198:9-21, 217:5-12; Ex. 48 at 27:15-28:16, 41:17-42:18, 71:1-15.
c. The monthly letters to Industrial Heat prepared on J.M. Products letterhead and signed by Johnson, which reported levels of power allegedly received from the 1 MW Plant, were drafted and the information contained therein provided by Rossi. See Ex. 2 at 271:11-272:2, 276:6-23; Ex. 37 at 121:2-12, 167:15-169:8, 170:9-171:3, 173:6-174:3, 179:23-179:25; Ex. 47 at Johnson Dep. Ex. 17; Ex. 50 at
Johnson Dep. Exs. 34, 35, 36, 37, & 38; Ex. 54 (Johnson Dep. Exs. 18 & 33).

79. In addition, J.M. Products was not an affiliate of Johnson Matthey and was not controlled by a trust formed in the United Kingdom. Rather, it was owned by a United States trust over which Johnson had control as a trustee. See Ex. 2 at 202:8-203:11; Ex. 36 at 111:11-112:7, 204:21-205:19; Ex. 37 at 14:21-15:12, 171:13-173:3, 240:7-20, 243:20-244:1.

80. Rossi and Third-Party Defendant Fulvio Fabiani (“Fabiani”), acting on behalf of Third-Party Defendant United States Quantum Leap, LLC (“USQL”), provided measurement data to Fabio Penon , who in turn provided that information to Industrial Heat and IPH. Fabiani also provided his own separate measurement data to Industrial Heat and IPH. See Ex. 10 at 101:12-102:3, 105:6-21, 107:4-10, 115:17-116:6, 117:20-118:8, 137:6-13, 169:19-171:20, 190:2-191:3; Ex. 17 at 16:15-17:1, 29:6-16, 37:16-38:5, 156:12-19, 178:25-180:10; Ex. 21 at 256:7-22; Composite Ex. 55 (Fabiani Dep. Ex. 3; Penon Dep. Exs. 16, 19, 21, & 26); Fabiani Dep. (excerpts of which are attached hereto as Composite Ex. 56) 38:3-18, 39:11– 40:12, 44:14-48:9, 87:16-88:23, 99:5-8, 100:8-22, 142:5-10;

81. Fabiani and Penon’s measurement data regarding the 1 MW Plant’s power absorption were nearly identical. See Ex. 55 at Fabiani Dep. Ex. 3 & Penon Dep. Ex. 21; Ex. 56 at 99:5-8, 100:8-22; Murray Dep. (excerpts of which are attached hereto as Composite Ex. 57) 118:16-119:5, 147:2-13, 251:18-252:7; Composite Ex. 58 (Murray Dep. Exs. 8 & 11).

82. The power absorption data that Fabiani and Penon provided Industrial Heat and IPH reflected that during certain time periods, the 1 MW Plant was [sic, strike “was”] used more power than Florida Power and Light (“FPL”) was providing to the entire warehouse facility where the 1 MW Plant was located. Ex. 55 at Fabiani Dep. Ex. 3 & Penon Dep. Ex. 21; Ex. 56 at 99:5-8, 100:8-22; Ex. 57 at 254:13-260:14, 279:14-283:6, 367:8-368:7; Ex. 58; Composite Ex. 59 (Murray Dep. Exs. 12 & 13).

83. When providing measurement data to Penon, Rossi withheld information regarding (a) discrepancies between measurements taken from Leonardo’s portion of the Doral Facility and measurements taken from JMP’s portion of the Doral Facility; and (b) instances when the Plant had operational problems or had to be shut down. Ex. 17 at 131:9-13, 132:16-24, 250:14-251:4.

84. When the 1 MW Plant was sent to and then reassembled in Florida, Rossi, on behalf of Leonardo, redesigned its configuration in a manner that made evaluating its performance more difficult. For example, the 1 MW Plant was designed to produce steam, yet Rossi removed the steam trap and condensate line placed on the pipe intended to carry the steam out of the 1 MW Plant. Dameron Dep. (excerpts of which are attached hereto as Composite Ex. 60) 181:8-21, 184:23-185:15, 192:12-197:14, 198:24-201:13, 203:15-22; West Dep. (excerpts of which are  attached hereto as Composite Ex. 61) 88:3-16, 89:16-19, 91:3-25, 110:20-24, 139:5-11.

85. Rossi, on behalf of Leonardo, walled off a portion of the Doral Facility for the ostensible purpose of creating a space within which J.M. Products would “operate.” Rossi, with Johnson and J.M. Products’ concurrence, thereafter prohibited Industrial Heat personnel from entering the J.M. Products side of the Doral Facility or learning about J.M. Products’ supposed operations. See Ex. 21 at 238:7-239:8; Ex. 36 at 38:3-6; Ex. 57 at 216:9-11, 314:10-13; Ex. 61 at 81:6-11, 82:14-17, 100:22-101:7, 157:23-158:2, 159:4-15, 178:16-19, 180:11-23, 181:7-9, 206:12-21, 210:23-212:3, 226:3-12; Composite Ex. 62 (Bass Dep. Exs. 25, 26, & 27).

86. Rossi, on behalf of Leonardo, refused to grant Joseph Murray (“Murray”), an Industrial Heat employee, access to the Doral Facility in July 2015. Johnson, on behalf of J.M. Products, complied with and enforced this refusal. Ex. 19 at 247:13-16, 258:7-9; Ex. 21 at 62:19-20, 239:23-25, 240:7-241:12; Ex. 57 at 66:14-18, 130:3-14; Ex. 63 (4th Am. AACT Ex. 19).

87. Rossi, on behalf of Leonardo, again refused to grant Industrial Heat access to the Doral Facility in December 2015. Again, Johnson, on behalf of J.M. Products, complied with and enforced this refusal. Ex. 37 at 182:11-183:6, 184:23-185:19, 187:1-14, 228:11-229:6; Composite Ex. 64 (Johnson Dep. Exs. 40 & 41).

88. Once Murray gained access to the Plant in February 2016, he was promptly able to determine that Rossi’s claims about the Plant were false. See Ex. 57 at 145:5-8; Ex. 65 (4th Am. AACT Ex. 5).

89. The scheme orchestrated by Rossi, Leonardo, Johnson, J.M. Products, Bass, Fabiani, and USQL, including Rossi, Leonardo, Johnson, and J.M. Products’ inducement of Industrial Heat to enter the Term Sheet, caused Industrial Heat and IPH to pay for (1) the Plant’s transportation to Florida; (2) the procurement and delivery of equipment for the Plant’s reassembly in Florida; (3) the procurement and transportation of personnel to assemble the Plant in Florida; (4) repairs and maintenance of the 1 MW Plant; (5) new equipment for the Doral Facility; and (6) personnel to work at the Doral Facility, including Barry West (an independent contractor), T. Barker Dameron (an Industrial Heat employee), Murray, and Fabiani. See Ex. 9 at 249:14-20, 305:21-306:5 [no 305-306 in doc]; Ex. 10 at 119:10-15; Ex. 17 at 134:24-135:4, 137:16-138:18, 141:16-142:17,  143:14-144:16, 145:11-148:24, 295:11-18; Ex. 19 at 241:19-242:8, 292:7-20;
Ex. 21 at 247:1-6; Ex. 30 [originally filed under seal]; Ex. 57 at 82:21-83:8; Ex. 66 ([IH-00131928])

90. On or about September 1, 2013, Industrial Heat entered into a Technical Consulting Agreement with USQL, through its sole member, Fabiani (“USQL Agreement”). A true and correct copy of the USQL Agreement is attached as Exhibit 67.

91. On September 9, 2013, Fabiani executed a joinder to the USQL Agreement, agreeing to be bound by certain provisions contained therein, including Section 6 relating to “Rights to Materials.” See id.

92. On or around August 1, 2014, the USQL Agreement was renewed and extended. See Ex. 6 at ¶ 12. Composite Ex. 68 ([IH-00012657-00012658]; [IH-00012659-00012666]).

93. Also on August 1, 2014, Fabiani executed a joinder to the August 2014 extension of the USQL Agreement, again agreeing to be bound by certain provisions contained therein, including Section 6 relating to “Rights to Materials.” See id.

94. The USQL Agreement was renewed and extended again in or about July 2015. The renewal extended the USQL Agreement from September 2015 to March 31, 2016. See Ex. 6 at ¶ 12; Composite Ex. 69 (4th Am. AACT Exs. 28 & 29; [IH-00017713]; [IH-00017714-00017721]).

95. Fabiani also executed a joinder to the 2015 extension of the USQL Agreement again agreeing to be bound by certain provisions contained therein, including Section 6 relating to “Rights to Materials.” See id.

96. On February 23, 2016, Fabiani acknowledged that Fabiani, on behalf of USQL, would provide Industrial Heat with “all electrical and thermal data of the system throughout the period of the test” and an “official report to bring to light all the flaws and functional deficiencies of the system,” which would also mention all “plant stop periods (total or partial)” and the reasons therefor. See Ex. 70 (4th Am. AACT Ex. 21).

97. Beginning in March 2016, Industrial Heat repeatedly requested from Fabiani, on behalf of USQL, copies of the promised raw thermal and electrical data as well as the final report relating to the testing in Doral. Industrial Heat also requested flow meter records that Fabiani had represented he had. See Ex. 71 ([IH-00011081-00011802]).

98. In April and May 2016, Industrial Heat requested these documents and data again. See Composite Ex. 72 (Fabiani Dep. Ex. 11; [IH-00011074]).

99. Fabiani refused to provide Industrial Heat with the requested documents and data. See Ex. 19 at 270:7-22; Ex. 56 at 142:11-19; Ex. 57 at 116:18-117:3, 193:8-194:8, 352:11-353:9, 366:25-367:7; Ex. 73 (Murray Dep. Ex. 4).

100. The termination date of the USQL Agreement was March 31, 2016. See Ex. 56 at 82:6-19; Ex. 69 at 4th Am. AACT Ex. 29 [see at 124.30_Fabiani_email_re_contract]; 4th Am. AACT at 66; [D.E. 149] ¶ 152.

101. On March 30, 2016, USQL, through Fabiani, issued its final invoice to Industrial Heat. Industrial Heat received this invoice on April 6, 2016. See Composite Ex. 74 ([IH-00015792]; [IH-00015793-IH-00015801]; [IH-00015802]).

102. Industrial Heat paid Fabiani/USQL $10,500 per month for services under the USQL Agreement from February 2015 to February 2016. See Ex. 66.

103. Industrial Heat also paid Fabiani’s rent in the amount of $1,370 per month during the same period. See id.

104. Following the termination of the 1 MW Plant testing in the Doral Facility, Fabiani, on behalf of USQL, destroyed certain data and communications regarding the 1 MW Plant’s operations. See Ex. 56 at 33:10-37:12, 38:3-40:16, 46:3-8, 93:8-15 [not included in composite], 138:6-13.

105. Also following termination of the 1 MW Plant testing in the Doral Facility, Rossi, on behalf of both Leonardo and J.M. Products, dismantled a heat exchanger on the J.M. Products side of the facility, as well as the pipes encompassing the exchanger, that supposedly dissipated heat for 1 MW Plant. See Ex. 2 at 236:10-237:18; Ex. 17 at 271:25-274:10, 277:14-17; Ex. 36 at 81:21-82:14, 84:14-85:22, 92:19-95:6, 151:5-152:20, 251:19-252:6.

106. Leonardo NH still exists in good standing as a New Hampshire corporation. See Ex. 75.

107. A declaration by John T. Vaughn (Vice President of Industrial Heat) authenticating certain exhibits to this statement of material facts is attached hereto as Exhibit 23. [this exhibit is blank]  A declaration by Christopher R. J. Pace, counsel for Defendants, authenticating other exhibits to this statement of material facts is attached hereto as Exhibit 28.


Additional editor notes:

Exhibits 31-33, Leonardo and Rossi tax returns were not cited. Presumably they were cited or referenced in the redacted sections of the IH Motion for Summary Judgment, Section E.

How is the weather on Planet Rossi?

Blustery.

Peter Gluck posts links to his blog in many places, and I saw this yesterday. I’m mentioned (the day before). Speak of the Master of Hot Places….
EGO OUT, April 6, 2017

A year of litigation- the scales of Justitia have  great loads of stuff- facts and assumptions. Facts have weight the assumption not- just now a selection/separation process takes place. 4-5 months and we will have the Verdict.

Indeed. However, we might have some verdicts, at least, within roughly a month, how long I expect it will take to handle the three pending Motions for Summary Judgment.

For the time given, the IH party is making huge efforts to kill the Penon ERV Report.

Actually, this is Peter’s myopic version of what is happening. Continue reading “How is the weather on Planet Rossi?”

Studying Rossi v. Darden Motions for Summary Judgment

Motions for Summary Judgment are handled by Federal Rule 56.

While it can be fun to express opinions, simple or complex, without study, just because we can (especially if we admin the blog) it is much more fun, long-term, to Know WTF one is talking about. Capiche?

Hence, when the Parties went wild March 22 with Motions, I realized that to study these motions would be haphazard at best, unless tools were created …

I have compiled a neutral study tool, one of a number to be put together:

RvD: Study of 207:IH Statement of material fact supporting MSJ

This has anchors at each paragraph that can be used to quickly reference it. (The IH MSJ references these paragraphs.) It also has links to specific pages of evidence, which then can facilitate putting together all the evidence (at least from the IH side) for a particular point. Continue reading “Studying Rossi v. Darden Motions for Summary Judgment”

Camel legs splayed

I bring in files on the back of a camel, and the files posted on PACER for Rossi v. Darden did not break the back of the camel, but his legs are splayed out and he’s refusing to move until he’s given a break. Downloading all the files posted yesterday would be $104.10. I downloaded the main files, so people can start reading them, and the files are presumably described in the main documents. So that was $9 of the total. Eric may possibly download the rest (and it is also substantial work, not just paying PACER) but this is getting ridiculous.

So I am starting a GoFundMe campaign to raise money for purposes of covering expenses, and, as well, will be accepting direct donations to Infusion Institute, Inc., and this will serve as a kick in the butt to get that nonprofit tax-deductible status application going. I’ve been running on a few donations from 2013 and 2014, money is still left, but … it’s time to get this show truly on the road.

I also suggest that anyone who has PACER files that are not yet hosted yet could email them to me (or other transfer can be arranged). Parties certainly have the files, their attorneys are emailed them immediately and they don’t have to pay. For the files, that is, the attorneys are a mere $350 per hour or so.

I am planning to go to the trial, if it happens. I intend to take the bus, because it will not only be cheaper than flying, it will allow me to make some stops along the way, such as in Washington DC, where there are some major LENR personalities. Once I consider how easy it is for me to get to the bus terminal, compared to the airport, it is not all that much extra time.

So I will also be looking for hosting, if possible, to save on hotels. Let me know if interested in supporting me this way with a comment here. The email addresses of those who leave comments are visible to me (or any admin here), so I would write back.

GoFundMe donations may be anonymous if the donor desires. I will be given the identity of any donor, but that will be kept private. Donations with conditions attached other than those given in the campaign may not be accepted. Money can’t buy me love.


And then, when the camel is getting to his feet, a new pleading dropped with a collection of enormous files, my WordPress blog is chugging away at uploading them. One of the 42 exhibit files is 34 MB. 19 of them are more than 2 MB.

A little knowledge is a dangerous thing

I’m working on study documents. Doing work like this is how I learn, it’s how I become familiar with the documents. I’ve been watching LENR Forum and E-Cat World, and I see plenty of people commenting who obviously know a little, not a lot. They’ve seen some document that confirms what they believe, they take some accidental implication and run with it. And Sifferkoll is up to his old tricks. Ah, later.

I had started to work with RvD: Study of 214:Rossi Motion for Summary Judgment because I wanted to study the Rossi side first. However, 214 is so full of errors — almost all exhibit numbers are incorrect, for example, and the Motion is heavily based on something that didn’t happen: the exclusion of all IPH claims. Or at least it hasn’t yet happened. Since it is days of work to prepare one of these study documents, I put it off and started working on the IH side, with RvD: Study of 203:IH Motion for Summary Judgment

And then I realized that this document heavily depends on RvD: Study of 207:IH Statement of material fact supporting MSJ. So I decided to compile and link this first. You can see more or less what it will look like, I just need to complete it.

The statement of material fact is a boiled-down summary, filtered for significance, and some of it, so far, has blown my mind.

For example I thought that the IH claim that Leonardo Florida was not the same corporation as IH had the agreement with was a bit silly. However, I think I was wrong. Basically, I had assumed that this was just a move to Florida. Okay, the New Hampshire corporation still exists, so the claim of merger may be shaky, but … it’s still Rossi, really, right?

Actually, no. Rossi does not own Leonardo Florida. It is owned by a trust. Trustee is Johnson. IH may have a point, even a strong point.

That Ampenergo deliberately refused to sign the Second Amendment that allowed a later GPT is telling. All this, I will review in detail, studying the documents. Rossi, then, knew the ropes, before the Doral “test” began.

This is just one of many points that come up in the documents. For example, Penon explains why he did not respond to the Murray questions. It was because, he claimed, these were the same questions Murray had asked in February. Of course, the Murray document was deliberately a memorialization of those questions. Penon’s English is pretty bad, apparently. Let’s give his response the best construction. He believed he had answered the questions, but perhaps Murray did not understand. By this time there were lawyers involved on both sides, and it would be suggested to Murray that he ask the questions formally, in writing. So he did. And Penon, hired jointly by Rossi and IH to make or validate measurements, consciously refused to answer. His reason is irrelevant. IH apparently, then, refused to pay him his final payment, and Rossi paid it.

IH excerpts from the Penon deposition.

This was terminally sloppy. Penon depended heavily on data provided by Rossi and Fabiani. While data was stored on his computer at the Plant (possibly still there), Fabiani obviously had access to it. This was not an independent review.

As with the Lugano text and Levi, Penon reports as fact what he was told by Rossi. (Lugano, the reason for not calibrating at full input power, and Ferrara, the reason for only testing 18 reactors.)

So why did IH put up with this? Darden does explain, but the general reason is obvious. In order to continue to deal with Rossi, it was necessary to be maximally compliant and not argue with him, or show any need to confirm independently. If they did, it would be End of Test. Go eff yourself. Rossi had done this many times.

To complete their goal (which was twofold: to obtain and commercialize the technology, or, in the alternative, to determine that there was no technology at the levels claimed or even close), they needed to extend the relationship with Rossi, though not outside of “reason.” I.e., they were not about to agree with Rossi that Doral was the GPT and Penon the ERV, but they also were not going to start screaming that Rossi is Wrong.

They decided to watch, and then, when possible, to verify. And the beginning of that process — sending Murray — was where Rossi drew his own line. Murray was refused, and Rossi says why. Spy.

Annesser was quickly involved, and it appears that Annesser may have encouraged the breakdown, instead of calming it. Annesser apparently advised Rossi and Johnson to reject the December request for access, that is, to violate the Term Sheet, this time clearly. At that point, IH may have believed that the Doral warehouse was rented by JMP, controlled by Johnson, and may have had no idea that Rossi himself had rented the warehouse.

Annesser is in this up to his eyeballs, but that will not be relevant to the present case, unless a motion for sanctions is entered after the basic case is resolved. I no longer have any wonder that Annesser left Silver Law Group. This would be very unlikely to be something that Ruth Silver would approve.

(But she would never say that, and I’ve dealt with a law firm that had represented a plaintiff suing me. One partner started to say to me that maybe they were on the “wrong side,” and the other said to him — quite correctly — not to say that. It was obvious anyway, and these attorneys had advised the client, obviously, to settle with me, and that was quickly done. It looks like Annesser did not advise Rossi to settle differences, but to fight, not let these big guys push him around, and probably they will settle. Besides, this was his chance to sue a $2.2 billion corporation. These don’t come around every day. Even if he did need to stretch the law a bit.)

RvD: Study of 207:IH Statement of material fact supporting MSJ

WORKING DRAFT

This document will now be used to collate factual claims, based on responses by Rossi and the 3rd party defendants. This will be used to assess and distinguish fact from controversial conclusions.

While this is being compiled, I (Abd) am adding comments; when the compilation is done, this page will be copyied to an opinion page, and this page will be edited to remove all commentary other than neutral editorial remarks. There is a goal on CFC to distinguish factual pages from posts (which are generally opinion with no requirement for neutrality) and opinion and discussion pages. Discussion is presently in order for all pages, but CFC may move to organize this more tightly.

Rossi responses from 0238.0_Rossi_Resp_to_203_207_IH_-MSJ.pdf

Third-party defendants’ responses are from 0243.0 _3pDef_Opposition_to_IH_MSJ 203 & 207 “STATEMENT OF MATERIAL FACTS IN OPPOSITION [1]


[1] The relevant excerpts of the deposition testimony cited herein have either been attached as an exhibit to the Third-Party Defendants Combined Motion for Partial Summary Judgment (ECF No. .242), Counter-Plaintiffs’ Statement of Material Facts (ECF No. 207) or to this Motion as a supplemental exhibit (Supp. Ex.) in the following manner: Rossi Depo. Tr. (ECF No. 207-2); Darden Depo. Tr. (ECF No. 207-9, Supp. Ex. A); Penon Depo. Tr. (ECF No. 207-10, Supp. Ex. H); Leonardo Depo. Tr. (ECF No. 207-17); IH Depo. Tr. (ECF No. 207-19, Supp. Ex. B); Vaughn Depo. Tr. (ECF No. 207-21, Supp. Ex. F); JM Products Depo. Tr. (ECF No. 207-36); Johnson Depo. Tr. (ECF No. 207-37); Bass Depo. Tr. (ECF No. 207-38, Supp. Ex. E); Stokes Depo. Tr. (ECF No. 207-52); Murray Depo. Tr. (ECF No. 207-57, Supp. Ex. G); Dameron Depo. Tr. (ECF No. 207-60, Supp. Ex. I); West Depo. Tr. (ECF No. 207-61, Supp. Ex. D); Mazzarino Depo. Tr. (Supp. Ex. C).


Study document

DEFENDANTS’/COUNTERPLAINTIFFS’ STATEMENT OF MATERIAL FACTS IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT

referring to

DEFENDANTS’/COUNTERPLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT AND MEMORANDUM OF LAW IN SUPPORT THEREOF

This copy is being annotated with links to cited documents. Comments not a part of the document will be in brackets if very brief (such as “[sic]”) or in indented italics. It is intended that this document be neutral, separate pages may be created and linked at the end for opinion and assessments. Please note any errors in Comments at the end of this page.

Each numbered paragraph in this document has an anchor numbered as the paragraph. For example, paragraph 107 may be linked by appending “#107” to the URL of this page. Using the present URL:

http://coldfusioncommunity.net/rvd-study-of-207ih-statement-of-material-fact-supporting-msj/#107


DEFENDANTS’ STATEMENT OF MATERIAL FACTS IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT

Defendants Thomas Darden (“Darden”), John T. Vaughn (“Vaughn”), and Cherokee
Investment Partners, LLC (“Cherokee”) (collectively, “Defendants”) and Defendant-CounterPlaintiffs
Industrial Heat, LLC (“Industrial Heat”) and IPH International, B.V. (“IPH”), in
accordance with Rule 56 of the Federal Rules of Civil Procedure and Local Rule 56.1, submit the
following statement of material facts as to which they contend there does not exist a genuine
issue to be tried:

1. On October 26, 2012, Industrial Heat, Leonardo Corporation, a New Hampshire Corporation “Leonardo NH”), Plaintiff Andrea Rossi (“Rossi”), and AmpEnergo, Inc. (“AEG”) executed and entered into a License Agreement. See Ex. 1, a true and correct copy of the License Agreement.

1. Undisputed.

 
2. Plaintiff Leonardo Corporation, a Florida corporation (“Leonardo FL”) did not execute and was not a party to the License Agreement.[1] See id.


[1] For the sake of simplicity, a reference to “Leonardo” means Leonardo FL and/or Leonardo NH.


Abd comment: The Agreement is explicit, it is with a “New Hampshire corporation.” In 2012, there were two corporations: FL and NH.

2. Disputed. Plaintiff Leonardo Corporation, a Florida corporation, executed and is party to the License Agreement by virtue of its merger with the New Hampshire incarnation of Leonardo Corporation. See Supp. Ex. 43 (Rossi_00011827-44).

Abd comment: This is silly. Rossi may argue that the NH corporation was later merged with FL, though it appears that Leonardo-NH still exists. But arguing that it was the FL corporation that executed the agreement is flying in the face of obvious fact. The exhibit cited is the 2010 incorporation of LC-FL and does not bear on the issue.


3. There are no provisions in the License Agreement requiring Industrial Heat to keep confidential the E-Cat IP (as that term is defined in the License Agreement). See id.

3. Disputed. Section 16.4 of the License Agreement requires IH and its assignee, IPH, by virtue of the Assignment and Assumption of License Agreement, to keep confidential the E-Cat IP as that term is defined in the License Agreement. See Ex. 4 (License Agreement).

Abd comment: Section 16.4, explicit page link added above, is about “Publicity,” and does not allow any of the parties (IH, Rossi, LC, or AEG) to disclose the terms of the Agreement without the written advance approval of both IH and LC. There is then a paragraph that deals with the obligations of LC, Rossi, and AEG with regard to “the E-Cat IP,” and there is no such provision binding the “Company,” i.e., IH. Unless there is something else, this claim falls on its face.


4. On or about October 26, 2012, Industrial Heat made the initial payment of $1.5 million to Leonardo NH as specified in the Section 3.2(a) of the License Agreement. See Compl. ¶ 47; 4th Am. AACT at 8.

4. Undisputed.


5. The 1 MW Plant was to involve at least 54 E-Cat reactors for the 24-hour Validation Test contemplated in Section 4 of the License Agreement. See Rossi Dep. (excerpts of which are attached hereto as Composite Ex. 2) 151:1-2.

Abd note: Section 4 does not specify the number of reactors. This may be inferred from the apparent intention to test the “Plant,” with claim power as 1 MW (The “1 MW E-cat Unit,” but is not explicit.

I will below break up the long Rossi paragraph 5 into sections.

5. Disputed. The License Agreement does not provide that at least 54 E-Cat reactors would be
used for the Validation Test, and Dr. Rossi did not testify that at least 54 reactors were required to be tested. See Ex. 4; Defs.’ Ex. 2 at 151:1-2.

Abd comment: Rossi described in the IH reference the number of devices in the Plant. “Ex. 4” appears to be confused. This is likely intended to be DE 238-4, which is labeled “Exhibit 46,” it is a supplemental affidavit of Ross. I find it clear that the Agreement contemplated a test of the full Plant. Rossi is getting ahead of the need to claim what he needs to claim, arguing against the obvious foundation instead of what might more reasonably be argued, later details. IH, for its part, has not here explicitly argued the “full plant” expectation, but replaces it with a defective claim.

On or about April 24, 2013, the parties mutually agreed in writing to test 30 reactors for purposes of the Validation Test. See Supp. Ex. 44 (IH-00098392-96). The First Amendment to the License Agreement provided for testing of 30 E-Cat reactors over a period of 24 hours. See Ex. 5 (First Amendment, Ex. A). Defendant Darden represented to Dr. Rossi that the amount of power produced, rather than the number of reactors tested, mattered. See Supp. Ex. 45 at 149:18-150:4. In fact, Defendants admitted that testing fewer units would make it more difficult for Plaintiffs to achieve the necessary results to entitle to Plaintiffs to receive payment under the License Agreement. See Supp. Ex. 69 (IH-00133919). The ERV certified the Validation Test results pursuant to amended section 4 of the License Agreement. See Ex. 12. Defendants did not object to the ERV’s report. See Ex. 3 at 152:21-154:25; Ex. 14, at 257:15-20; 340:4-12. On June 9, 2013, Defendants tendered the $10 million payment as contemplated by section 3.2(b) of the License Agreement. See, e.g., Countercl. ¶¶ 58, 94.

Abd comment: This is all irrelevant, arguing against the implications of a fact, not the fact. There was an expectation of a full test. Rossi argues that IH later accepted something less than that. This is not negating the original expectation. Rossi is arguing for the sake of arguing, it seems.

The Darden comment (Supp. Ex. 69) is not relevant here. Nor is the ERV certification, nor the $10 million payment. This is addressing an argument about the meanings of facts, not the facts themselves. However, perhaps he will refer to this in the legal arguments.

The figure of 30 reactors was clearly a reduction, so a reduction from what? Obviously, from a full test of the Plant. And that full test, as previously understood, is all that #5 is referring to. 


6. On April 23, 2013, Rossi represented to Industrial Heat that: (a) he had met with Health Office of the Province of Ferrara; (b) that the Health Office had to authorize the 24-hour Validation Test contemplated in Section 4 of the License Agreement; and (c) that, because of the requirements of Italian law, he planned to test only 25% of the number of reactors contemplated in the License Agreement. See Ex. 2 at 151:1-2; Ex. 3 (4th Am. Answer, Additional Defenses, Countercls., & Third-Party Claims (“4th Am. AACT”) Ex. 9).

Abd comment: Ex 2 is the Rossi deposition, and it begins to discuss the Validation Test in detail. Rossi’s description, beginning on page 146, is consistent with the above. On page 150, Rossi proposes using “one third of the power or one fourth.” Pace’s comment at line 24 is priceless. Strictly speaking, this was not a “requirement of Italian law,” but a workaround, i.e., dealing with a problem of possible noise complaints. No complaints, no problem.

Again, breaking up the Rossi response into sections:

6. Disputed. In April 2013, Dr. Rossi met with the Regional Agency for the Protection of the Environment of Ferrara to ensure that the Validation Test could take place without official interruption. See Supp. Ex. 45 at 145:19-150:12.  The Agency informed Dr. Rossi that he was required to obtain authorization prior to conducting the test, but that if neighboring residents would agree to the test the Agency would not interfere. Id. at 148:20-149:11.

Abd comment: This is not a dispute, it is a restatement. The Agency “informed” Rossi, and Rossi, passing that on, was passing on — or inventing — a claim about “Italian law,” merely informal.

In an effort to minimize noise disturbance and ensure uninterrupted operation of the Validation Test, Dr. Rossi proposed to test 30 reactors. See id. at 145:19- 150:12; Supp. Ex. 44.

Abd comment: Supp. Ex 44 is an email from Rossi to Darden, in which he does proposes testing 30 reactors, responding to a Darden suggestion for a reduced test. But in that same mail, Darden makes other suggestions, ameliorating the problem, which Rossi rejects. Darden allows Penon as the ERV, but then wants other experts to observe. And Rossi agrees to a “double test,” i.e., 24 hours with one set of reactors and another 24 hours with another. This is all very much looking like bait and switch. I recommend reading the whole email.

As noted in paragraph 5 supra, Defendants did not object to this arrangement. At no time did Dr. Rossi interpret, claim to have interpreted, or claim direct knowledge of Italian law; rather, Dr. Rossi communicated his understanding of what the Regional Agency told him. See Supp. Ex. 46 ¶¶ 7-8. Defendant IPH, the party bringing this claim, has no knowledge whatsoever about any representations that Dr. Rossi purportedly made on April 23, 2013 with respect to conversations with Italian agencies or Italian law. See Supp. Ex. 47 at 13:21-16:1. Defendant Vaughn testified that he had no evidence that Dr. Rossi did not meet with the Ferrara Health Office. See Supp. Ex. 48 at 261:21– 262:9. 

This is not an actual dispute but a restatement using slightly different language. Then the comment about Abd comment: IPH is irrelevant, part of Rossi’s claim that the IPH deposition by Fogleman was defective, which has likely been remedied. So far, IH has not claimed that Rossi did not meet with the Ferrrara Health Office. Instead of simply accepting — or making minor corrections, Rossi disputes and tosses in the kitchen sink. I doubt that this will be popular with the Judge. So far, this is, relatively speaking, fluff. It’s part of an extended IH narrative, giving background, but, so far, the background is as stated.

(The background is that Rossi sets up conditions, then they shift, and Rossi always has some excuse for it. Did he actually meet with the Health Office? This would be quite difficult to prove either way without more information, such as whom he actually claims to have met with. The meeting was apparently informal, and there would likely be no record. Thus, plausible deniability. I find it truly remarkable that Rossi introduces the Vaughn denial here. The question in the Vaughn deposition is based on the countercomplaint, not the SOMF. The core of Vaughn’s testimony is that IH has researched Italian law, and it was not as Rossi represented. Exactly how not was not stated. This, however, is not truly material. The Rossi explanation is plausible, and … convenient.)


7. On April 24, 2013, Rossi represented to Industrial Heat that Italian law would allow the Validation Test to be done using 30 reactors. See Ex. 4 ([IH-00098392-00098396]).

7. Disputed. At no time did Dr. Rossi interpret, claim to have interpreted, or claim direct knowledge of Italian law; rather, Dr. Rossi communicated his understanding of what the Regional Agency told him. See Supp. Ex. 46 ¶¶ 7-8. Dr. Rossi made no reference to Italian law in document IH- 00098392-96. See Defs.’ Ex. 4. Dr. Rossi proposed testing 30 reactors in an effort to minimize noise pollution to neighbors and ensure that the Validation Test would not be interrupted by Ferrara authorities. See Supp. Ex. 45 at 145:19-150:12; Defs.’ Ex. 4.

Abd comment: It  is remarkable to see, here, Rossi Speak, because this was either written by his lawyers or at least reviewed by them. “Interruption by Ferrara authorities” would be a legal problem. The core claim here by IH is that Rossi represented to them that a Test with 30 reactors would resolve the problem. This is not in dispute.


8. On or about April 29, 2013, Industrial Heat, Leonardo NH, Rossi, and AEG executed and entered into a First Amendment to the License Agreement (“First Amendment”). See Ex. 5, a true and correct copy of the First Amendment.

8. Undisputed.


9. Leonardo FL was not a party to the First Amendment. See id.

9. Disputed. Leonardo Corporation Florida is a party to the First Amendment by virtue of the merger of the New Hampshire and Florida incarnations of the company. See Supp. Ex. 43.

Abd comment: What is literally obvious from the document is being denied. The First Amendment was executed by Rossi for “Leonardo Corporation, a New Hampshire corporation.” Notice the shift in tense. IH SOMF 9 has “was not a party,” Rossi’s response has “is a party.” The Rossi claim is that the Florida corporation (it co-existed, it was not a separate “incarnation”) became a party by merger; however the NH corporation still exists, it has apparently not been merged, it has not lost its identity. It would file separate tax returns, etc. Rossi is. again, arguing against plain fact, based on how those facts might separately be interpreted. It’s transparent. The Judge will see all this. Rossi is setting up conditions for judicial prejudice against his arguments, judges are human. Bad Idea, I’d think. But the whole lawsuit was a Bad Idea.

Supp. Ex. 43 is the Florida incorporation in 2010. What does this have to do with the claim of merger? Other evidence shows that there were two corporations, and the Agreement and Amendment are explicit as to what corporation is involved. It was NH, not FL. So when did the NH corporation lose its identity in the FL one? The legal question would be, then, what would happen with the rights and responsibilities of the NH corporation. Except it appears that the merger was never completed. Or was it? Where is the evidence of that?


10. Rossi is not the owner of Leonardo FL. See Ex. 2 at 38:21-39:17.

Abd comment: Watch Rossi flop around like a fish out of water. The statement is obvious. Ex. 2 is a Rossi deposition, and is quite clear. Rossi does not own Leonardo FL, but owns Leonardo NH. And this is all present tense. There are two separate corporations, not merged. (If there is a merger, there would be only one ownership.) I can imagine Annesser cringing when Rossi said what he said. The owner of Leonardo FL is a trust, Florida Energy Trust, and Rossi was not sure about the “beneficiary” of the trust. 

10. Disputed. Dr. Rossi is the beneficial owner of Leonardo Corporation Florida. See Supp. Ex. 45 at 50:15-23.

Abd comment: Annesser set him straight. However, the fact remains that ownership is distinct. “Beneficial owner” is not the same as “owner.” This is all playing with words. The ownership of Leonardo NH and Leonardo FL is different. There could be tax implications, etc. The difference in ownership indicates a continued separate identity, not a merger. With a merger, the original corporation passes out of existence. That is how the successor may assume the rights and responsibilities of the original (including for tax purposes).


11. Neither Industrial Heat nor IPH ever consented to any assignment by Leonardo NH of Leonardo NH’s rights under the License Agreement or First Amendment to Leonardo FL. See Darden Decl. (attached hereto as Ex. 6) at ¶ 8.

11. Disputed. Leonardo Corporation of New Hampshire merged into Leonardo Corporation of
Florida such that as a matter of law there is no assignment. See Supp. Ex. 43.

Abd comment: The “dispute” acknowledges “no assignment,” thus agreeing with IH ¶ 11. However, no evidence for a merger has been adduced here. Contrary evidence is actually admitted, such as the Rossi deposition. Supp. Ex. 43 is simply the 2010 incorporation of Leonardo FL, clearly not merged with NH. I get the distinct impression of shooting fish in a barrel here. Creating a series of purely argumentative disputes, without substance, is a formula for creating judicial inertia toward rejection. It is not going to help the Rossi case.


12. On or about April 29, 2013, Industrial Heat and IPH entered an Assignment and Assumption of License Agreement (“Assignment and Agreement”). See Ex. 7, a true and correct copy of the Assignment and Assumption.

12. Undisputed.


13. Rossi and Leonardo NH consented to the Assignment and Agreement. See Ex. 5 § 1;

13. Disputed. Plaintiffs Rossi and Leonardo Corporation executed the Assignment and Assumption of License Agreement entered into between IH and IPH based on IH’s representation that IPH was a wholly owned subsidiary of IH. See Supp. Ex. 49 (IH-00015708). In addition, Defendants assured Plaintiffs that IPH, like IH, was owned under the Cherokee umbrella and that IPH was Cherokee Fund. See Supp. Ex. 45 at 156:16-157:13.

Abd comment: There is no dispute here with IH paragraph 13. IPH is a wholly owned subsidiary of IH, this is not disputed. What Rossi claims he was “assured” is contrary to the Agreement and to law, and Rossi has introduced no evidence for this other than his own statement about the import of conversations five years ago.. The owners (shareholders) of Cherokee and IH (now owned entirely by IHHI, Ltd, a U.K. corporation) are and have always been distinct. Cherokee and IH share certain officers. Ex. 49 does not support the Rossi narration here. Ex. 45 is Rossi’s deposition about the meeting. Others were present, but no evidence have I see of any confirmation of the representation, which was vague; the fact is that Darden is CEO of Cherokee, and has access to funding, but simply not  Cherokee funding in itself. Darden’s assurance, if it was made, was not necessarily what Rossi understood. And this is why verbal agreements cannot generally create financial obligations more than a year in the future, the Statute of Frauds. See also the Parol Evidence Rule. Rossi had most of a year in which to reconsider the Agreement; up until the $10 million payment, he could have backed out simply by refunding the $1.5 million. Any attorney would have told him that Cherokee was not on the hook.


14. On or about April 29, 2013, Leonardo NH and Rossi executed a Certificate certifying to IPH that the representations and warranties in the License Agreement, as amended by the First Amendment, remained true and correct. See Ex. 8, a true and correct copy of the Certificate.

14. Undisputed.


15. Immediately prior to commencing the Validation Test, Rossi claimed that Italian law was even more restrictive, and only would permit using 18 E-Cat reactors for the test. See Ex. 6 at ¶ 9.

15. Disputed. At no time did Dr. Rossi interpret, claim to have interpreted, or claim direct knowledge of Italian law; rather, Dr. Rossi communicated his understanding of what the Regional Agency for the Protection of the Environment of Ferrara told him. See Supp. Ex. 46 ¶¶ 7-8. The Agency informed Dr. Rossi that: “in Italy we do not have authorizations for experiments. There is not something that is called an authorization for 36 hours. You are either authorized or you are not.” Defs.’ Ex. 2 at 148:12-25. A restriction on the number of reactors was necessary to obtaining agreement from neighboring residents, as the number of reactors affected the noise generated during the Validation Tests. See Supp. Ex. 46 ¶¶ 3-5. Based upon the Ferrara Agency’s representation, Dr. Rossi determined that an appropriate level would be the number of reactors actually tested. See Supp. Ex. 46 ¶ 6. Defendants consented to testing 18 reactors and paid the $10 million payment under the License Agreement. See Countercl. ¶¶ 58, 94. See facts in ¶ 6, supra. 

Abd comment: There is no substantial disagreement here. The IH “Italian law” could mean “the regulatory conditions in Italy.” That is all. Rossi first reduced the number of reactors to 30, based on these conditions, attempting to reduce “noise pollution,” and suggested running two 24-hour tests with 30 reactors each; then, very likely with no additional visit to the “Office,” Rossi again reduced the number of reactors to be tested and the idea of multiple tests disappeared. The question of IH acceptance of the Validation Test is separate. What is being shown is classic bait and switch, a pattern of behavior that later shows up with regard to the Doral negotiations and activities, and in the light of the claimed IH inability to independently verify the Rossi technology, this all increases the impression of fraud. Proof is not required for civil fraud, merely the preponderance of the evidence. We will see how IH uses these facts in their Motion for Summary Judgment; at this point, Rossi is arguing against fact, based on other considerations.

(However, there is now IH answer to this, and there was another email from Rossi that referred to a specific law. I am not yet pulling in all that information.)


16. In fact, the Ferrara Health Office told Rossi that he could proceed with the Validation Test without any restriction on the number of reactors to be tested. See Ex. 2 at 148:12-149:7, 149:19-23;

16. Disputed. In April 2013, the Regional Agency for the Protection of the Environment of Ferrara informed Dr. Rossi that he was required to obtain authorization prior to conducting the test, but that if neighboring residents would agree to the test the Agency would not interfere. See Supp. Ex. 45 at 148:20-149:11. A restriction on the number of reactors was necessary to obtaining agreement from neighboring residents, as the number of reactors affected the noise generated during the Validation Tests. See Supp. Ex. 46 ¶¶ 4-6. Defendant IPH, the party bringing this claim, has no knowledge whatsoever about any representations that Dr. Rossi purportedly made on April 23, 2013 with respect to conversations with Italian agencies or Italian law. See Supp. Ex. 47 at 13:21-16:1. Defendant Vaughn testified that he had no evidence that Dr. Rossi did not meet with the Ferrara Health Office. See Supp. Ex. 48 at 261:21-262:9.

Abd comment: Rossi is beating a dead horse. It would very likely have been easy to obtain the consent of the neighbors. Pay them, or offer to put them up at a resort for the night. Etc. Coming just before the Test, as a further reduction from a full Plant test as contemplated, to 30 reactors in two sets (i.e., two days), to 18 reactors once, this was stretching and stretching. It may have been completely acceptable to IH, but is then seen in the light of later events. The IPH “no knowledge” issue is dead, rejected by the Magistrate and Judge, assuming the additional deposition was taken.

Rossi may be correct that there is no evidence of no visit, but above, IH does not contest the visit, rather, IH now relies on what Rossi said he was told, which was as stated. Effectively, the issue is noise, not the number of reactors. Using a quieter heat exchanger would have been another solution. IH, in fact, wanted to get the show on the road, to get the reactor and the technology delivered to them, so they could thoroughly verify it and raise the money for the next payment. So they tolerated the Rossi fuss.


17. Industrial Heat relied on Rossi’s false representations regarding Italian law in entering into the First Amendment. See Ex. 6 at ¶ 7; Darden Dep. (excerpts of which are attached hereto as Composite Ex. 9) 200:5-15.

Abd comment: Take out the word “false” and the statement appears true. This was the reduction to 30. What about the reduction, then, to 18?

17. Disputed. Dr. Rossi made no representations to Defendants regarding Italian law. See Supp. Ex. 46 ¶¶ 7-8. Rather, Rossi determined the number of units to be tested based upon his discussions with the Regional Agency for the Protection of the Environment of Ferrara, as indicated supra. See id. ¶¶ 2-6.

Abd comment: Missing here: when were the discussions? There has been no claim of more than one visit. The reduction to 30 was allegedly  based on the visit to the environmental protection office. Was there further discussion? There is no claim of it. This is all a patchwork quilt, rationalizations and justifications, attempting to avoid the obvious. It may not matter for the MSJ. This is a taste of what IH would present at trial. What is the factual issue here, on which an MSJ would turn?


18. During the purported Validation Test that commenced on April 30, 2013, 18 ECat reactors were operated as “Unit A” (as “Unit A” is defined in the First Amendment). See Penon Dep. (excerpts of which are attached hereto as Composite Ex. 10) 149:25-151:12, 154:6-13; Ex. 11 (Penon Dep. Ex. 8).

18. Undisputed.


19. The purported Validation Test that commenced on April 30, 2013 and concluded on May 1, 2013 was not performed for a duration of twenty-four consecutive hours (but rather for only 23.5 hours). See id.

19. Disputed. Defendants and their associates were present at all material times during the Validation Test, and made no objections to the actual test and presented no objections afterward. See Supp. Ex. 48 at 86:17-22; Supp. Ex. 68 at 151:13-16. After the ERV produced a final reporting clearly showing the test parameters and results, Defendants tendered the $10 million payment in accordance with the License Agreement. See Countercl. ¶¶ 56, 58; See also Ex. 9 at 97:14-22.

Abd comment: Again, no dispute here. Rossi adds other alleged facts, that’s all, anticipating IH arguments. IH had made objections, previously, and Rossi declined to accommodate them (i.e., independent experts to observe). It was clear by 2013 that Rossi would not tolerate extensive independent testing, but IH apparently hoped that he would transfer the technology so that they could independently test it.

Ex. 48 is the Vaughn deposition, and Vaughn confirms that he attended the Validation Test. There is no dispute shown, no contradiction with the IH facts. Ex. 68 is from the Mazzarino deposition, and indicates he met with Rossi and Vaughn, in Ferrara, but did not believe there was a test under way. What I see here is Rossi, or Annesser, putting together any scrap he can find. The Mazzarino snippet is essentially irrelevant. The counterclaim is not evidence. And what is “Ex. 9”? Whose exhibit, attached to what document? I checked various possibilities. None fit. However, then I remembered that the Rossi MSJ had a numbering error for all the Exhibits (which did not have exhibit cover pages). This is Exhibit 10 from DE 214. So I have linked to that above.


20. The purported Validation Test that commenced on April 30, 2013 did not “measure the flow of the heated fluid and the Delta T between the temperature of the fluid before and after the E-Cat reaction,” as specified in the First Amendment. See id. [Abd note: see Exhibit 11, Delta T was not reported, fluid before was assumed to be at boiling point, “in order to be conservative.”)

20. Disputed. The mutually agreed to ERV, Fabio Penon, performed all measurements required by the mutually agreed to Validation Protocol. See Ex. 3 at 115:4-25, 121:7– 11; Exs. 11, 12. After the ERV produced a final reporting clearly showing the test parameters and results, Defendants tendered the $10 million payment in accordance with the License Agreement. See Countercl. ¶¶ 56, 58; See also Ex. 9 at 97:14-22.

Yet again, Rossi is disputing plain fact, obvious from the evidence, by then asserting other fact considered relevant to conclusions. There is no actual dispute here with IH paragraph 20. Rossi’s exhibit references are to exhibits attached to DE 214, his own Motion for Partial Summary Judgment.


21. Industrial Heat paid $10 million to Leonardo on or about May 2, 2013. See Compl. ¶ 58; 4th Am. AACT at 10. [this is pdf page 11, document numbered page 10.]

21. Disputed. On June 9, 2013, after Validation, IH released, through an escrow agent, the $10 million payment in satisfaction of section 3.2(b) of the License Agreement. See Countercl. ¶¶ 58, 94; Ex. 9 at 97:19-22; Ex. 3 at 142:12-16; Ex. 13 at 142:6-16; Ex. 17 at 102:24-103:22.

The complaint is vague. IH would have paid the $10 million first, then later would have released it. The June 9 date is correct as to release, per Counterclaim 94. There appears to be no real dispute here.


22. Industrial Heat also paid $3,219,950 to AEG on or about August 12, 2013. See AEG Dep. (excerpts of which are attached hereto as Composite Ex. 12) 190:23-191:8; Ex. 13 ([AE000255-000256]).

22. Disputed. Defendants’ citation reads that it is AEG’s “understanding that the validation testing in Italy with Penon that resulted in the $10 or $15 million payment was in April/May of 2013.” See Defs.’ Ex. 12 at 190:23-191:8. To the extent that Industrial Heat paid AEG any money, Plaintiffs are not in a position to confirm or deny such information. 

There is no dispute here. Rossi surely knew that Ampenergo was being compensated through a separate agreement, this is mentioned in the IH/Leonardo/AEG Agreement.


23. In August 2013, the E-Cat Unit was delivered to Industrial Heat at its facility in North Carolina. See Compl. ¶ 59; 4th Am. AACT at 10.  [¶ 59] ( The “E-Cat Unit” is defined in the License Agreement as the “Plant” and is sometimes referred to as the “1 MW E-Cat Unit” or the “1 MW Plant.”

23. Undisputed.


24. Rossi and Leonardo did not commence a “Guaranteed Performance Test” in 2013 or 2014. In fact, they did [not] allegedly commence such a test until 2015. See Compl. ¶ 66; Pls.’ Resp. & Objections to Industrial Heat’s 1st Req. for Admissions (attached hereto as Ex. 14) at Resp. Nos. 36 & 37.

split for commentary:

24. Disputed. Plaintiffs did not own or control the 1MW Plant after October 2012; rather, Defendant IH owned the Plant in 2013. See Countercl. ¶ 4; Ex. 3 at 105:9-15; Ex. 9 at 115:25-116:4; Ex. 4 at § 3.2(a). Defendants admitted that they could have started the 1MW Plant for testing at any time. See Supp. Ex. 50 at 116:5-17.

Ex. 50 does have an admission, but in context, it implies the opposite of the above: “We could have started it ourselves, and we actually talked about doing that a fair amount.· Rossi vehemently objected to that and said, “No, I need the help working on these other devices.”· You know, he didn’t want us to start working on that.

Defendants prevented Plaintiffs from commencing the Guaranteed Performance Test in 2013 and 2014 by representing to Plaintiffs on numerous occasions that the parties needed authorization from a North Carolina Health Department but were unable to obtain such authorization. See Supp. Ex. 45 at 192:25-197:11.

The reference is to a Rossi “rant,” literally called that on page 194. I recommend reading the whole thing and realizing that this was largely about 2014, after the Rossi proposal to move the plant to Florida. There is a direct contradiction in Darden and Vaughn depositions to the Rossi testimony about being told “hundreds of times” by Darden and also by Vaughn that they could not start the plant because of a problem with the Health Department. And, in the end, all this is irrelevant. The GPT was not started in 2013 and 2014, regardless of reason. Rossi makes a great deal out of lack of objection to this or that by Darden and Vaughn, but … Rossi could have insisted on starting the test, or he could have claimed that they were improperly dragging their feet. However, after 50 days after delivery, AEG signoff on a postponent was necessary, and that was deliberately refused by AEG.

In June 2014, Defendants sought and obtained a report from Stephen Browne, a nuclear radiation compliance consultant, on whether the E-Cat technology would be subject to North Carolina State or federal licensing requirements or safety regulations to operate. See Supp. Ex. 51 (IH-00003735); see also Supp. Ex. 52 at 211:18-213:10.

Exhibit 51 does not support the narrative. That report indicated no regulatory concern. Ex. 52 is vague on the issue. This is not evidence that regulatory concerns delayed the GPT.

In addition, in June 2014,when Plaintiffs brought to Defendants’ attention that Defendants had not – since 2013 – indicated where to install and operate the 1MW Plant since 2013, Defendant Darden responded that “ideally we would not make a decision about this new location for a while longer” and that the “decision [could] wait a while.” See Supp. Ex. 53 (IH-00117296-97). Moreover, Defendants felt that Plaintiffs’ attention to the Lugano test was more important than tests with Defendants. See Supp. Ex. 54 (IH-00020901-05); Supp. Ex. 52 at 133:6-18).

The import of Ex. 53 is the opposite of the apparent intention in context. Darden was writing about the possibility of moving the plant  to Florida, and was still thinking that the plant would be started up locally, because there was a customer. This is consistent with Rossi’s proposal for Florida, his claim that Florida would be much better. There is no coherent story here of IH standing in the way, but it is equally possible that the IH narrative of Rossi refusing to work on the Plant is what happened.

What is central for the purpose of the MSJ is the missing agreement to postpone the GPT, and, in addition, to a signed acceptance of the start date, which was also a requirement of the Second Amendment, should that Amendment be considered to have gone into force, somehow, between IH and Rossi and leaving AEG out. The central fact in this paragraph is that the GPT was not timely performed, so, then, some new agreement would be needed to proceed. Rossi, instead, proposed a sale of power and demonstration plant in Florida. It was never clearly designated as a GPT, until claims much later.

There is no dispute here, only complicated reasons or rationalizations. Essentially, Rossi is admitting that there was no GPT in 2013 nor in 2014, but claiming it was their fault. However, the IH claim does not assign fault or blame in this paragraph, it only states the undisputed fact.


25. Rossi and Leonardo did not complete any “Guaranteed Performance Test” within the time period set forth in Section 5 of the License Agreement. See id.; Ex. 1 § 5. [link is to original filing, not the much larger file provided as Exhibit 1]

Rossi response split for comment:

25. Disputed. The parties agreed in writing and through performance that the time for the GPT
would be extended. See Ex. 7.

Ex. 7 is the Second Amendment. Rossi refers to “parties,” but there were four parties to the Agreement: Leonardo (NH), Rossi, AEG, and IH. AEG deliberately did not agree, did not sign. The Leonardo signature was also missing — see the signature page –, and the Amendment was undated. Ex. 7 is not evidence of an agreement in writing. That document was a proposed agreement that failed, and a separate agreement, not requiring AEG, was not contemplated or mentioned (until recent filings in this case).

However, Plaintiffs completed the Guaranteed Performance Test within the time period set forth in Section 5 of the License Agreement as amended by the Second Amendment and subsequent agreements between the parties.

The License Agreement was not amended by that proposal. This is obvious. Other agreements may have arisen, and estoppel may be possible (though I doubt it), but claiming that the incomplete Second Amendment is in effect is mendacious. Rossi knew AEG had not signed. He has stated that he thought that this only meant that the Second Amendment did not apply to them, but it was one piece, and it also required that all parties agree in writing to the start of a GPT. If the desire was to replace that failed Second Amendment with some new side-agreement between IH and Rossi, this wasn’t done. The only new agreement was the Term Sheet.

See Ex. 7; Ex. 22; Ex. 3 at 189:1-18, 214:21-215:1, 215:20-216:5. As of September 2014, Defendants represented to potential competitors at Texas Instruments that Dr. Rossi would be taking the 1MW Plant to Florida to “begin operating it continuously (this is a requirement of our contract with him).” See Supp. Ex. 70 at IH-00107402. At no point in time prior to November 2015 did Defendants indicate that the time for performance had expired. See Ex. 1 ¶ 26; Ex. 3 at 202:17-203:4 [sic, duplicate reference ->], 186:9-17, 202:17-203:4, 203:22-204:9; Ex. 17 at 140:6– 15.

Again, the dispute is not with the fact in paragraph 25. 


26. In October 2013, Industrial Heat and Rossi executed a proposed Second Amendment to the License Agreement (the “Proposed Second Amendment”), which is dated “October __, 2013.” See Ex. 15, a true and correct copy of the Proposed Second Amendment.

26. Disputed. In October 2013, Defendant IH, Rossi, and Leonardo executed the Second Amendment to the License Agreement, which extended the time for the commencement of the GPT. See Ex. 7; Defs.’ Ex. 15. Dr. Rossi signed the Second Amendment on behalf of himself and Leonardo Corporation. See Supp. Ex. 45 at 180:6-22.

Ex. 7 is just another copy of the amendment, Def’s exhibit 15 was already cited, and the signature for Leonardo is missing on all produced copies. There is no dispute with the stated fact. Rossi’s deposition (Ex. 45) simply confirms his confusion. Leonardo Corporation is a party, and all parties must agree in writing. While this could be a remediable defect, it remains as a defect, and a glaring one (this was noticed before IH had responded, it was apparent from the Complaint exhibits.) I assumed this was merely a characteristic of Rossi’s copy. No. The Leonardo lacuna was accidental, obviously but the Ampenergo lacuna was deliberate and fatal to that amendment. The missing Leonardo signature could have caused a problem later. Suppose Rossi decided he didn’t like the amendment, he could claim that he needed to consult with his corporate advisers, and they rejected it. What is actually shown by that missing signature is sloppiness, lack of concern for actual documentary fact.


27. AEG did not sign the Proposed Second Amendment. See id. AEG, which stood to earn money if a “Guaranteed Performance Test” was successful, understood that their considered refusal to sign the Proposed Second Amendment rendered the document invalid. See Ex. 12 at 79:2-18, 87:2-11; Ex. 16 ([IH-00089736-00089743]).

This is the doozy, a legal term that means something like “Wabbit.” We knew that the Amenergo signature was missing, but only the more extensive evidence revealed later showed that this was not some mere oversight. Ampenergo was certainly an interested party, with the right to approve or withhold approval of amendments (and then, later, if the Second Amendment were approved, to approve or withhold approval of the start of the GPT). From the likelihood that, if that written approval existed, it would have been asserted by Rossi ab initio, I assumed that Rossi never requested such written approval, a fatal defect. But it was worse. Ampenergo had deliberately refused to sign, and Rossi knew it. Watch him flop around on the deck:

27. Disputed. AEG’s corporate representative testified that he could not remember whether AEG executed the Second Amendment. See Supp. Ex. 55 at 78:22-79:18.

The Rossi lawyer takes advantage of a momentary confusion, because the next answer shows that Cassarino is fully aware of the missing signature, because it was discussed with Rossi.

AEG also testified that that they understood that by not signing the Second Amendment, the amendment would not be binding upon them. See Defs.’ Ex. 12 at 79:2-18, 87:2-11; Defs.’ Ex. 16 (IH-00089736-43).

Rossi omits that another reason was given at Defs’ Ex. 12 at 80-2:

… we felt that it wasn’t in his best interest or our best interest to sign this.

AEG testified that it did not favor the Second Amendment because AEG believed that the terms thereof would have a negative impact on their fee arrangement with Defendants. See Defs.’ Ex. 12 at 79:6-18.

Perhaps Rossi counsel believes that evidence looks stronger if cited five times from various copies. The reasons (there was more than one) are actually irrelevant. They did not sign the proposed amendment, so it was invalid. The parties could continue to cooperate toward the common purpose, and AEG trusted that. IH and Rossi could have drafted a different agreement, between the two of them. They were not prohibited from making separate agreements (such as the Term Sheet). But the amendment as drafted, including AEG, failed. End of question, and probably the end of the Rossi claims in the lawsuit.

A distinct agreement could have been made with Ampenergo, providing for payment to Ampenergo under mutually agreed conditions (otherwise the separate agreement between Rossi and Leonardo could harm AEG). These are all obvious routes to take. But Rossi, by this time desperate for a “test,” yet unwilling to do such a test under IH supervision, insisted on his fake customer, pretending it was Johnson Matthey, with his attorney (President of Leonardo Florida) creating a faux GPT entirely under his control, clear fraud, now proven, beyond anything Rossi had done before.

This is all so obvious, as a legal matter, that Summary Judgment is very likely. There was no GPT, and the rest is moot. It doesn’t matter if the reactors performed or not, except to the parties, who will do what they choose with the information they have. AEG is an investor in IH, and seems happy. Rossi will still be facing the counterclaims, and I will be examining those closely. Settlement becomes more likely, through Rossi might decide to hold out until the very bitter end.

Rossi’s core defense seems to be that “they didn’t tell me.” But it is not clear whether or not Rossi was told, or what he was told, because, in context, IH may have assumed he knew (the fact was obvious) and there were verbal exchanges where the details were not remembered. Rossi’s attorney fishes for a denial that there was a statement that the $89 million payment could no longer be earned, but that was not IH’s position, which was clearly that a verifiably independent test, showing significant performance, would allow them to raise the money, and to pay Rossi (and AEG), voluntarily, but in accordance with the substance of the Agreement. That would have been ordinary business.

Rossi tossed a monkey wrench into the heart of this possibility by creating a fraudulent test with a fake customer, and many other conditions that would not foster IH confidence, and that confidence was necessary. When Rossi refused access to Murray, the IH engineer, in July 2015, it was all over but the shouting. Rossi, instead, believed that the world ran on how he interpreted things, and that IH was obligated to pay if there was this or that condition resembling the GPT. He tried to force them to pay, and trying to force business partners to do anything is always a bad idea. They will often dig in their heels, even if you are right as rain. 


28. Leonardo NH did not sign the Proposed Second Amendment. See Ex. 15

Yes. The proposed Amendment was explicity with the New Hampshire corporation as a party, same as the Agreement and 1st Amendment. Agreements with corporations would generally include the state of incorporation, because there can be corporations in various states with the same name. States will not allow this as to active corporations. This is all basic corporation law and practice, very simple. Clear and simple, though, is not Rossi’s Way.

28. Disputed. Dr. Rossi signed the Second Amendment on behalf of himself and Leonardo Corporation. See Supp. Ex. 45 at 180:6-22).

Ex. 45, a Rossi deposition, as cited, only shows Rossi confusion. He signed for himself and speculates that this counted for both himself and Leonardo, but he correctly signed the Agreement and First Amendment. This was an obvious oversight, and had the parties considered the Second Amendment important, it would have been pointed out to him and he would presumably have signed. However, that did not happen. This missing signature was an easily remediable defect, trivial, in fact. In a face-to-face meeting, the document would have been handed back to him with a request that he also sign for Leonardo. That correction never occurred, and it is obvious why: it was moot, because AEG deliberately refused to sign, and IH and Rossi did not then enter into a separate agreement, as would have been possible.


29. Leonardo FL did not sign the Proposed Second Amendment. See id.

LC FL existed from 2010 on. It was not a party to the Agreement or the Amendments. Rossi asserts his own identity with his corporations, without regard to legal details, but then attempts to assert that JMP was independent, even if entirely controlled by him, with only figureheads as owner and president, i.e., his friends, the beneficiary of a trust known only to Johnson, and Johnson. So Rossi uses corporations to hide. In spite of the buzz on Planet Rossi, IH was private, but hid nothing. IHHI was formed in 2015 to assume full ownership of IH, and that is all reasonably open and clear. There is no flim-flam, there is an openly declared and very risky investment possibility for shareholders, with all the normal restrictions to prevent people from tossing their life savings in.

29. Disputed. See disputed facts in ¶ 28, supra.

It is absolutely obvious that LC FL did not sign. Nothing in ¶ 28 negates that. Rossi is playing a game of “Yes, but.” (Or possibly, No, because,”) when the reasons given do not negate the asserted clear fact. LC FL did not sign. Period. What that means would be something else to discuss, but without accepting the clear facts, there is no accepted factual basis. Because the fact here is so clear, by arguing against it Rossi is setting up what I call “judicial inertia.” A judge will, properly, not reject a claim because the judge has just rejected dozens of claims, but, in actual practice. it can happen, because judges are human, not robots.

I am not familiar with actual practice in replies like this. Perhaps “disputed” is used if some clarifying additional fact is to be added. Were I an attorney here, I’d try to avoid that, i.e., instead of “No, because” I would write “Yes, but for context and significance, also see X,Y,Z.” I will be seeing how IH conducts itself with the Rossi MSJ.


30. IPH did not sign the Proposed Second Amendment. See id.

There was no space for IPH to sign. Whether or not this is relevant (it might be, but this is fuzzy to me), this would not be strong enough to negate an amendment signed by all the original parties. This would have been a defect to be noticed and addressed by Rossi counsel, in 2013, but the Amendment probably never got to that stage. IH and AEG didn’t care, because IH appears to have intended to pay Rossi if there was a clear, independent demonstration of major COP, regardless of technicalities.

30. Undisputed.

Yay! Go Team Rossi!


31. On April 30, 2014, Rossi admitted that the Proposed Second Amendment was not effective because AEG did not sign it. See Leonardo Corp. Dep. (excerpts of which are attached hereto as Composite Ex. 17) 195:19-196:24; Composite Ex. 18 [IH 0091696-0091697] (AEG Dep. Ex. 15 [sic., Ex 17]; Leonardo Corp. Dep. Ex. 15).

31. Disputed. Dr. Rossi understood that the Second Amendment was not valid with respect to AEG. See Supp. Ex. 46 ¶ 9.

That is true. It was not valid with respect to AEG. However, AEG was a party to the Agreement, and if an amendment was “not valid with respect to” a party, the amendment was not valid with respect to any party, because the agreement explicitly required the agreement of all parties, to be amended. The signature of an agreeing party might be conditional upon the agreement of all parties, and the equitable reasons for this are obvious. If there is a situation like this, the refusal of a party to sign, it is possible that some side-agreement could be negotiated, but that was not done. The amendment failed, and, above, Rossi is effectively giving an unqualified legal opinion, as an implication. There is no dispute over the fact here. Rossi was quite aware that AEG had not signed, and that this refusal was deliberate. Therefore the Second Amendment had failed, as written.

There are further defects, including the lack of the Second Amendment requirement for a written agreement among all the parties to set the revised start date. That requirement was obvious and necessary. Otherwise IH could have started their own highly-controlled “GPT,” by engaging Penon directly, bypassing Rossi. Rossi’s participation was not a requirement for the GPT. If Rossi had fully transferred the IP, as required, IH could have excluded Rossi, in fact.

So there are a series of problems with the Rossi position: 1. No valid Second Amendment. 2. Second Amendment required a test with a “Six Cylinder Unit.” That could have been fixed with a written agreement signed by all parties. That doesn’t exist, unless Rossi defines “parties” differently from the Agreement. The legal term for this situation is “sloppy mess.”

And then, 3. There was no required written agreement to the Doral test start date. And there are even more problems beyond that. There is no factual dispute here, only a legal dispute, one that the Judge may resolve.


32. Industrial Heat also recognized that the Proposed Second Amendment was not effective absent the signatures of all relevant parties. See Industrial Heat Dep. (excerpts of which are attached hereto as Composite Ex. 19) at 202:11-16.

This is utterly obvious (whether or not later notice, as described, was circulated). This, then, explains the otherwise puzzling lack of IH objection to problems with the Penon protocol, and other defects in the Doral set-up. Were this a GPT, IH would have been extremely cautious, would have insisted on other expert participation, not just the already-known-to-be-sloppy Penon. But they knew it could not be, because they had not agreed to it in a valid amendment. It appears that Rossi, in all communications about Doral, did not call that a “GPT,” and generally avoided even calling it a “test.” All references were vague. Without such a claim, there was nothing for IH to object to. Lack of communication cuts both ways. Once it appeared to IH that Rossi was claiming GPT, they did object, and that became formal around the beginning of December, 2015.

Rossi has elsewhere lied about when IH objected, claiming that they only objected when “it was time to pay.” That was never true. They objected over four months before the payment allegedly became due.

32. Disputed. Dr. Rossi has no information with respect to what IH wrongfully or rightfully believed, but maintains that IH never circulated any written notice to Plaintiffs that the Second Amendment was not in effect. See Supp. Ex. 46 ¶ 10.

“Written notice” is not the factual claim here, though a vague claim is made in the deposition. Were the IH opinion a mere conclusion without clear basis, there would be a problem. But it was not. What was shown in evidence is that Rossi knew that AEG had not signed, and it is also shown that AEG considered the Second Amendment to be invalid, and that this was deliberate on their part, knowing that Rossi wanted them to sign.

IH depended on the obvious implications, and “not in effect” seems to have been unchallenged by Rossi, who proceeded to create a faux GPT without nailing this down. It is not as if he was some helpless naif, up against a billion-dollar corporation (which he has more or less claimed). He had the money to consult counsel, but seems to have failed to do so, many times, until he was furious with IH for not trusting him, and suspicious that they were trying to steal his IP without paying for it. The first action in the record that we can see, so far, appears to be the refusal to allow Murray (as a “spy,” he wrote in his Answer) to visit the Plant, as required by the Term Sheet. That would never have been permitted in a GPT, but was acceptable, even though a violation, in a sale of power with Rossi supervising the Plant and the ERV almost as an afterthought, not actually monitoring the plant, but depending on Rossi and Fabiani for data, it appears.

There is no factual dispute. The lack of complete communication does not establish estoppel, which is what I’m sure Rossi will be claiming. A GPT required clear conditions, not vague implications. The proposed Second Amendment maintained that, but Rossi wants it both ways: he wants to hold the amendment as valid, with respect to the obligations of IH and LC, but then as defective and moot as regards the device to be tested and the start date. 


33. The Proposed Second Amendment addressed the testing of “a six cylinder Hot Cat unit reasonably acceptable to [Industrial Heat]” (the “Six Cylinder Unit”), not the E-Cat Unit that was the subject of the License Agreement and the First Amendment. See Ex. 15.

33. Undisputed.

This was a point raised by IH in their MTD. The Judge was clearly inclined to dismiss the Complaint based on this, but, based on Rossi representations, decided to wait for Discovery. Rossi argued against it (I may come back and reference that), thus leading to massive legal expenses. She wanted to know if the 6 Cylinder Unit was distinct from the 1 MW E-cat, or merely another name for it. 


34. The Six Cylinder Unit in the Proposed Second Amendment is separate and distinct from the 1 MW E-Cat Unit or 1 MW Plant as referenced in the License Agreement, the First Amendment, and the Complaint. The Six Cylinder Unit is a round, tub unit containing six hot cat reactor units and is used to heat oil rather than water. See Ex. 2 at 172:21-173:8, 174:5-8Ex. 17 at 196:25-197:13; Ex. 20 (Rossi Dep. Ex. 12).

34. Disputed. The Six Cylinder Unit differs from the 1MW Plant, and can be used to heat
water as well as oil. See Supp. Ex. 46 ¶ 11.

There is no factual dispute here. The cited declaration merely says what is shown here, which is irrelevant. It differs, it is “separate and distinct,” as claimed, and the Rossi declaration merely states this in a different way, it “differs.” That implies, clearly, that it is separate and distinguishable. It appears that it seemed advisable at the time to run the test based on the 6 cylinder unit, which also explains the delay, and this is consistent with other evidence as to Rossi not being interested in testing the Plant when it was in North Carolina, but wanting to focus on improvements. 


35. The Six Cylinder remains in North Carolina and was never sent to Florida. See Ex. 2 at 174:22-25; Ex. 6 at ¶ 15.

35. Undisputed.

Bingo.


36. What Rossi and Leonardo used for their purported “Guaranteed Performance Test” in Florida was the 1 MW Plant, not the Six Cylinder Unit. See Ex. 14 at Resp. No. 1.

36. Disputed. Plaintiffs and Defendants agreed to substitute the 1MW Plant for the Six Cylinder Unit for purposes of the GPT and shipped the same to Florida. See Ex. 13 at 144:8-15; Ex. 24Ex. 1 ¶¶ 16-17; Ex. 9 at 156:24-157:2; Ex. 3 at 214:21-215:1; 215:20-216:5; Ex. 1 ¶ 16. [duplicated reference]

This is additional alleged fact that does not negate ¶ 36. When the move to Florida was being negotiated, it was not termed by any party the “GPT.” Even “test” was not mentioned in the Term Sheet. I assume that IH would have agreed to whatever Rossi wanted for the plant to be installed there. There were, in fact, two plants shipped to Florida, the original 1 MW Plant composed of regular E-cats, and another 1 MW Plant composed of “Big Frankies,” the 250 KW units, four of them, which were actually used for the Penon report. This fuzziness would not have been allowed in a real GPT. Imagine this taken to an extreme, Rossi has an assembly of 1000 reactors, and can pick and choose which ones would be used at any time. This would defeat the reasonable purpose of a large-scale test, to show reliability. The entire GPT concept was flawed in this way, but IH agreed to it because they wanted to give Rossi every opportunity to demonstrate the technology, and to show them how to make working reactors. Rossi wanted something else, it is obvious. He wanted to sell his cake for $100 million and keep it, too.

Ex 13 at 144:8-13 does not show “GPT”, but actually distinguishes GPT from Doral. Rossi generated massive confusion by creating a distinct “350 day test,” so that references to such a test would not be seen as references to the GPT, thus avoiding the question until the test was already running.

Ex. 24 references preparation by Rossi in May-September, 2015, of the “1 MW Plant” for a continuous 350 day test “per the terms of the agreement.” This is the strongest implied acceptance of Doral as a GPT that I have seen. It was not a communication with Rossi, and it does not validate that Doral was the GPT, because IH was apparently prepared to pay for actual performance (i.e, resembling the contemplated GPT) regardless of the Second Amendment. That is, this shows that IH was aware of the resemblance of Doral to the GPT. At this point, IH had assurances from Rossi that there was an independent customer there, and a highly reputable “real customer,” who was prepared to pay for power, which would have constituted a form of independent validation.  They also expected, per the Term Sheet that had been signed, to have full access to the Plant for the duration of the “test.” By this time, they may have become particularly suspicious, but if it was not the GPT, they were safe; if they were not satisfied, they would simply not accept those results. We can see in this communication, as in many others, that they were serious seeking confirmation of Rossi claims. If they were actually looking to not pay, as Rossi has claimed, they carried on the charade privately as well, including with investors and, here as an internal communication.

Ex. 1 ¶¶ 16-17, a Rossi affidavit, uses “guaranteed performance test,” which is conclusory. Rossi may well have believed that Doral was the GPT, but never explicitly communicated this to IH, nor did they to him. The evidence above shows that IH was aware of the resemblance, but their motivation at this time with Rossi was clearly to not rock the boat, and to give him ample opportunity to demonstrate the technology with independent validation (which, here, would not be Penon, but the “US representatives of JM” — Johnson Matthey, as he obviously called them or implied — deciding to pay for independently measured power production. So they would not be expected to confront Rossi on this, until Rossi clearly asserted “GPT.” We do not know when this first occurred, but it must have been before December, 2015.

Ex. 9 at 156:24-157:2 does not show any acceptance of Doral as a GPT, but as an opportunity for a demonstration. Yes, IH allowed the 1 MW plant to be used in Florida, and “6 Cylinder Unit” did not come up because the Second Amendment, which required that unit, was void. A new agreement would have been needed to re-activate the GPT as a fixed creation of a requirement to pay, because the original Agreement on it had failed due to lapse of time, and Ampenergo refused to approve the Amendment. The fact remains that had the Second Amendment been valid, a 6 Cylinder Unit would have been required. Easily fixed, just create a new amendment covering the actual devices used, a matter of no more than a few hours work, trivial. But not done.

Ex. 3 at 214:21-215:1; 215:20-216:5 covers IH reliance on the “Johnson Matthey” representations and how “6 cylinder unit” was not discussed. All this clearly supports the failure of the Second Amendment. The 6 cylinder unit issue was not brought up because the Second Amendment had failed, and they all knew that, so there was no insistence on the letter of it, i.e., 6 Cylinder unit. There is no mention of Doral as a GPT, but on page 271, Annesser says “I am going to call it a general performance test.” Yeah, right.

Annesser then conflates and confuses what IH was thinking in 2014 with the actual requirements of the originally contemplated GPT, which did not involve a “customer.” He is trying to make the point that “customer” was irrelevant to GPT, and this is correct. But Doral was not presented to IH as a GPT, but rather as a sale of power, with a reputable customer who would, according to Rossi, after a few months of success, openly reveal their identity, and “customer” was very important, then, to Doral. Annesser is talking out of both sides of his mouth, like Rossi. A perfect couple.

The IH paragraph is simply showing that Doral did not satisfy the GPT as described in the Second Amendment, even if the Second Amendment were valid. No evidence has been shown that IH was obligated to pay for performance outside the original GPT requirements. That IH allowed Rossi to run a similar test does not negate that, it would not create the fixed obligation contemplated. The only way to do that would have been to create the signed, written agreement of all the parties — or, if some party unreasonably refused, to have the dispute adjudicated before running the test. Meanwhile, if Rossi had a real technology, he would be free to continue developing it, and to sell it outside the licensed territory, such as in Sweden, where he had supporters. Instead, Rossi elected to pursue his own fantasies.


37. Rossi claims that, after performance of the “test,” he dismantled a heat exchanger and all associated piping that supposedly dissipated heat generated by the 1 MW Plant during the purported “Guaranteed Performance Test.” See Ex. 17 at 271:1-272:2.

37. Disputed. After the GPT concluded, Dr. Rossi re-purposed the piping that comprised the heat exchanger that dissipated heat generated by operation of the 1MW Plant. See Defs.’ Ex. 17 at 271:1- 272:2.

This is not a denial of ¶ 37. The same evidence is cited. It is an acceptance, with “dismantling” simply being replaced by “re-purposed.” That makes what difference? We will see how this was used in the arguments, but an alleged legitimate purpose of an action of spoliation does not convert spoliation into something harmless. We know that Rossi was threatening to sue IH by December, 2015, so Rossi — or his counsel — knew that the Doral plant — and the usage and dissipation of power — would be evidence. Any attorney would have explained to him that “repurposing” the installation, simply dismantling it, without adequate notice to the other party, could be spoliation. He allegedly built a major heat exchanger, which would, if it existed, radically shift how the heat dissipation issue would be seen, but when he was questioned, on his blog, about heat dissipation, he first claimed “endothermic reactions,” and when that was clearly seen as bogus, not possible under Doral conditions, then then added heat dissipation through ceiling vents. He did not mention “heat exchanger.” There would be no trade secrets involved with a heat exchanger. And then he dismantled the heat exhanger, apparently without every photographing it, not to mention allowing IH inspection, trivial to arrange. 


38. Neither Industrial Heat nor IPH ever sub-licensed the E-Cat IP for profit. See Ex. 6 at ¶ 16; Ex. 19 at 40:25-41:10.

38. Disputed. Plaintiffs raised $50 million in investment capital based upon the E-Cat technology; as such, it is not undisputed that Defendants ever sub-licensed the E-Cat IP for profit. See Exs. 3, 34, 35.

Ex. 3 is a long Vaughn deposition, I’m not going to search through it looking for a negative. If Vaughn acknowledged license for profit, surely it would have at least one page reference. Ex. 34 is a 14 page memo from Darden to Lamacraft (Woodford), April 2015. Parts have been redacted, but Rossi does not allege any specifics here, not even vaguely. Ex. 35 is a Lamacraft reply to Darden, based on a Darden mail, March 3, informing him of the upcoming press release, and Lamacraft replies:

This is clearly very disappointing, given that Rossi’s technology was a core element of the original investment.

However, this does not negate the IH claim. Because IH was willing to invest about $20 million in the possibility of Rossi Reality, they had demonstrated a bold willingness to take risks, where many others had out-of-hand rejected Rossi based on his past and the lack of clear independent confirmation, in order to obtain that confirmation directly. It was always possible that this would fail, and if Woodford did not realize that, they had not done the due diligence that they claimed — and they likely did. But it was still disappointing! If Rossi had fulfilled his part of the Agreement, transferring a replicable technology, IH (and Woodford) would have been in line for very high profit.

This has been a classic Rossi confusion. Raising investment capital is not “profit.” The $50 million investment, by Woodford in IHHI, Ltd., was in May, 2015, and this was not invested in IH or IPH, and did not involve a license. IHHI also purchased IH, totally, becoming the sole owner. That money has partially been invested in other LENR research, which might be coordinated through IH, their subsidiary. Rossi was angry about this, apparently, because this meant that the Woodford money was not directly available to satisfy IH obligations; Woodford’s loss would be limited to a loss of value of IH stock, thus IHHI stock, while the only continued major asset of IH could be the license (assigned to IPH, wholly owned by IH).

The relevant fact here stands: IH has not sold sublicenses. It may have disclosed the IP under NDA for purposes of testing, which would not be “for profit,” but rather for confirmation and information. In theory, the Rossi patents are worthless if they depend on a secret ingredient or process.

One would expect more clarity from attorneys, but, obviously, it is not manifest.

It may be argued that the serious exploration of Rossi technology was partially a basis for the Woodford investment. I actually assume that, but Woodford’s vision was not limited to Rossi, they had studied the entire field.


39. Neither Industrial Heat nor IPH ever created a product or service that could be sold based on the E-Cat IP. See id.

39. Disputed. Plaintiffs raised $50 million in investment capital based upon the E-Cat technology; as such, it is not undisputed that Defendants ever created a product or service that could be sold based on the E-Cat IP. See Exs. 3, 34, 35. [see 38 for links]

Same confusion. See above, 38. IH and IPH have had no sales revenue. The investment goal of IH was to confirm the technology, and then sell licenses for production, but it could have been possible to create a company to manufacture devices. None of this was possible without independent confirmation, that should, if the Rossi devices were as represented, been easy to do. IH claims it never happened, and because this would have been worth billions of dollars, or even trillions, to them, the IH reports and claims are devastating to the idea that the Rossi technology is real. 


40. Neither Industrial Heat nor IPH were ever able to replicate the results Rossi and Leonardo claimed using the E-Cat IP. See Ex. 6 at ¶ 16; Ex. 9 at 100:7-101:5; Ex. 12 at 210:6-10; Ex. 19 at 40:25-41:10, 148:13-149:17, 150:14-151:4, 182:6-8; Vaughn Dep. (excerpts of which are attached hereto as Composite Ex. 21) 106:14-107:1, 128:24-129:9, 249:7-14); Ex. 22 [orig. filed under seal, refiled 247] (AEG Dep. Ex. 20).

40. Disputed. Defendants have reported, on numerous occasions, their ability to replicate.

This dispute is based on confusion between replication and reliability of the same. It is possible to replicate an error. The history of LENR is replete with claims of excess heat that could not be confirmed except by repeating an error in measurement — or making a different, new error. (There are enough confirmed results to conclude that LENR is real, but there are still major problems with repeatability and reliability.) What Rossi will point to is examples where IH found some result that appeared to show excess heat. They continued to investigate, and found that these were either in error, based on incorrect measurements (often using Rossi methods), or were not repeatable, i.e., there may have been some error, but it was not identified. For a commercial technology, reliability is absolutely necessary, at least on a statistical basis. 

See, e.g., Supp. Ex. 67 (IH-00000861) (COP 4.0); Ex. 3 at 163:23-164:25; Ex. 19. The term “replicate” does not appear, in any variation of the term, in the License Agreement or amendments thereto. See Ex. 4; Ex. 5; Ex. 7; Ex. 13 at 149:9-12. IH testified that Defendants did not explicitly include a replication requirement in the License Agreement. See Ex. 13 at 149:25-150:6. Defendant IPH, the only entity with contractual rights to the E-Cat IP, has no knowledge or evidence about its own claims regarding its purported inability to replicate. See Ex. 17 at 25:25-26:17, 41:11-42:7.

These are all vague. The IPH issue is a technical one, Rossi is claiming violations of deposition rules, but, in fact, IPH simply referred certain questions to IH knowledge, since IPH is wholly-owned by IH and IH was handling all technnical processes, IPH being merely an IP holding company. Rossi has not prevailed on the claim of rule violations, and another deposition is possible, there is, as this is written, a hearing on April 20.


41. Rossi and Leonardo did not enter into any confidentiality agreements with third parties regarding the E-Cat IP. See Pls.’ Resp. & Objections to Industrial Heat’s 2d Set of Interrog. (attached hereto as Ex. 24) at Resp. No. 18.

41. Disputed. Plaintiffs carefully crafted public communications to only disclose information that had previously been made public by virtue of patent filings, eliminating any need to enter into confidentiality agreements. See Defs.’ Ex. 24 at Resp. No. 18.

This does not dispute paragraph 41. It simply claims that such was not necessary.


42. Rossi and Leonardo have neither suffered nor alleged any cognizable damages as result of the fraud alleged in Count VI of the Complaint that are distinct from damages they claim to have been suffered as a result of alleged breaches of the License Agreement. See Compl. ¶ 117, Prayer for Relief ¶ H.

42. Disputed. Plaintiffs have incurred and continue to incur the costs of the present litigation to collect payment from companies that do not have the resources to pay. See Supp. Ex. 71 (Supplement to Defendant Industrial Heat, LLC’s Amended Responses and Objections to Plaintiff Andrea Rossi’s First Set of Interrogatories, No. 16).

Very funny. However, Supp. Ex. 71 shows the opposite (they had the resources to pay, in ordinary fashion for such a payment from a venture capital company). This is not some additional damage, it would be, if legitimate, damage from the breach itself. Rossi has increased his legal expenses by using lawyers to beat dead horses.

When IH promised to pay the $10 million, it did not have the funds. IH officers had an ability to raise them, and when the money was needed, they did so in a timely fashion. They were prepared for the possible $89 million expense per Ex. 71. They also knew, by the time that would become due, that they were not going to pay because of fraudulent representation, a bridge too far.


43. Rossi has made public disclosures on his website, Journal of Nuclear Physics (“JONP”), revealing specific terms of the License Agreement. Specifically, Rossi publicly disclosed that that the License Agreement required a test of the 1 MW Plant, a test to be conducted over 400 days, a test involving 350 days of operation of the 1 MW Plant, and a guaranteed performance or “guarantees of performance” test. See JONP (excerpts of which are attached hereto as Composite Ex. 25) at July 2, 2015 & Dec. 21, 2015; Industrial Heat’s Resp. & Objections to Rossi’s 2d Set of Interrog. (attached hereto as Ex. 26) at Resp. Nos. 1-4.

43. Disputed. Defendant IPH testified that it did not know what specific confidential information Plaintiffs disclosed, and further indicated that he did not know of any proof or facts that IPH has in support of this claim. See Ex. 17 at 62:24-63:23. Defendant IPH testified that IPH did not know of any evidence or proof that IPH had in support of its claim for breach of Section 16.4 of the License Agreement. See Ex. 17 at 48:24-49:19. 

This is the bankrupt 30(b)6 claim. Rossi counsel knew that IPH was going to answer as they did, because of the deposition negotiations. It is above miscast as “did not know,” instead of what was actually said. It could be legally true, if IH had been unavailable for deposition. Rossi won a small victory here, IH liability for the costs of a single deposition, but failed to score the necessary touchdown. This was a Hail Mary pass, a sign of desperation if they have no other evidence to present. The facts were not disputed.


44. Rossi made these public disclosures without written advance approval from either Industrial Heat or IPH. See Ex. 6 at ¶ 11.

44. Disputed. Defendant IPH testified that IPH did not know what specific confidential information Plaintiffs disclosed in violation of section 16.4, and further indicated that he did not know of any proof or facts that IPH has in support of this claim. See Ex. 17 at 62:24-63:23. Defendant IPH testified that IPH did not know of any evidence or proof that IPH had in support of its claim for breach of Section 16.4 of the License Agreement. See Ex. 17 at 48:24-49:19.

See 43.


45. Rossi and Leonardo filed the License Agreement in the public docket of this Court without written advance approval of Industrial Heat or IPH. See Compl. Ex. B.

45. Disputed. Plaintiffs were permitted by law to file with the Court documents necessary to support their claims, without advance approval from any party. See Ex. 4.

Ex. 4 is just another copy of Compl. Ex. B (as to what is relevant here.) Rossi is not disputing the fact, but arguing that it was necessary or justified, as with so many of these oppositions. On general principles, I find that offensive. If an agreement is confidential, and disclosure could harm a party, disclosing the agreement without permission would require, to not be a violation of the non-disclosure agreement, permission of the Court. The issue of necessity is a separate issue. Rossi did file the Agreement as claimed, he is simply confirming SOMF 45. In traffic court, I have heard this plea: “Guilty with an explanation.” Strictly speaking, that is “Guilty,” even though a magistrate might dismiss the charges if satisfied by the explanation, or may reduce or eliminate any fine.


46. By letter dated February 17, 2016, Jones Day on behalf of IPH requested Rossi and Leonardo to assign to IPH the Licensed Patents (as defined in the License Agreement) with respect to the Territory (as also defined in the License Agreement). Jones Day enclosed an assignment with the letter. A true and correct copy of the February 16, 2016 letter and the assignment enclosed therewith is attached hereto as Ex. 27.

[Abd note: I do not find the License agreement clear on the definition of “Licensed Patents.” The list of patents in the Agreement, styled Exhibit A, is vague. However, the Agreement preamble strongly implies that all related technology is included, and not just “E-Cat.” How this affects this IH claim, I am not yet sure.] However, IH should have, here, cited Section 10 of the Agreement. To be sure, it is cited in the letter, Ex. 27.

46. Disputed. The License Agreement itself grants to Defendants the purported “assignment” that Defendants sought in their February 2016 letter, thereby rendering the letter and its request redundant and unnecessary. See Ex. 4 § 1 (the License Agreement grants to Defendants “the exclusive right and license under the Patents and other E-Cat IP to develop, manufacture, make, have made, use, have used, offer to sell, have offered for sale, sell, have sold, import, and have imported all the products deriving from the E-Cat IP in the Territory.” In addition, as early as October 2013, Defendants had no intention of making the $89 million payment to Plaintiffs. See, e.g., Ex. 9 at 117-121. IPH and IH readily admit that they did not pay the $89 million sought by Plaintiffs. See Countercl. ¶¶ 74, 80; Ex. 17 at 108:23-25. 

The Darden deposition (Ex. 9) was clear and showed that Darden did tell Rossi that the opportunity for the GPT had passed, that the Ampenergo refusal to sign voided the Second Amendment. (Thus contradicting oppositions above.) Later, Rossi self-servingly claimed that the Ampenergo refusal did not have that effect, but he knew otherwise — or reasonably would have known, per the evidence that Rossi here adduces, that deposition. However, Darden did not say “we have no intention of making the $89 million payment,” unless we narrow and restrict the meaning of that phrase to be the very specific payment for the very specific performance. If Darden had actually said that, at the time, Rossi’s effort to set up a Test in Doral would have made no sense at all. Rather, Darden asserted, to Rossi, a willingness to negotiate with him for a way to earn that. I had previously inferred that this would have been the IH position, from their behavior. Rossi had the opportunity to earn the $89 million, by actually satisfying IH, instead of by setting up a one-year  test, real or fake. Even when IH realized that the “customer” was actually Rossi himself, wearing a different hat and hiring a “Director of Engineering” to do minor tasks under Rossi direction, if IH had been able to inspect, with their own engineer, the reactor in operation, and the application of power in the “customer area,” and if they found the operation satisfactory they would happily have paid the $89 million. As many have pointed out, for such a working reactor, $89 million was cheap, and, in fact, Rossi’s supporters have often claimed that Rossi deliberately withheld the technology from them, since they had promised to pay so little. This withholding would be consistent with the Rossi claim about why he excluded Murray. (“Spy.”) One excludes a spy if one has something to conceal.

Here, Rossi is admitting prior breach of the Agreement, with no adequate justification. The $89 million was not yet due, even if the Test were genuine. The breach indicated Rossi’s intention to disregard the underlying intentions of the Agreement, based on his conclusion that IH could not be trusted, which had been operative since his exclusion of Murray from the Doral facilities in July, 2015. The argument about assignment not being necessary is conclusory and contrary to the language of the Agreement, (Section 10), which Rossi does not deny.

A good attorney would have advised Rossi to drop the cudgel, and would have assisted in negotiations. But Rossi would have had to trust his attorney. Instead, Annesser replied pugnaciously and threateningly. Did Annesser encourage Rossi in his suicidal intentions? Or did Rossi firmly decide on the course, with Annesser then acting as his attorney to advance those intentions? This issue may come up after the trial, or summary judgment, if there is a motion for sanctions.


47. Rossi and Leonardo did not execute the assignment as requested by letter of February 16, 2016. See Pace Decl. (attached hereto as Ex. 28) at ¶ 6.

47. Disputed. As early as October 2013, Defendants had no intention of making the $89 million payment to Plaintiffs. See, e.g., Ex. 9 at 117-121. IPH and IH readily admit that they did not pay the $89 million sought by Plaintiffs. See Countercl. ¶¶ 74, 80; Ex. 17 at 108:23-25. In fact, Defendants represented to Plaintiffs that Defendants had the funds to pay the $89 million under the License Agreement when, in fact, they never had such funds. See Supp. Ex. 52 at 259:9-11. Finally, IPH’s corporate representative was unable to offer any proof or evidence that there had been a failure to assign any patents, and did not know when such a failure occurred. See Ex. 17 at 63:24-64:18, 73:7-16; Ex. 9 at 240:18-241:3

Rossi counsel is attempting to repeat the fraud claim hand over fist, but the left hand does not know what the right hand is doing. Above, Rossi admits, by citing it without correcting the implications, that he knew the Second Amendment was void, because the IH claim that the time for a GPT had passed was based on the Ampenergo refusal to sign the extension. So his claims that IH did not inform him, made elsewhere, are completely bogus. And then, here, he is attempting to justify a refusal to satisfy a no-skin-off-his-teeth assignment request, clearly required by the Agreement, based on an alleged anticipatory breach, thereby creating one more justification for a refusal to pay, prior breach by Rossi, though there were others before that.

The “never had such funds” argument is rooted in a completely erroneous concept that when promising to pay a sum, one must have the funds available. People routinely buy houses promising to pay, but typically don’t have the funds on hand. Rather, they believe they can obtain them (generally with a mortgage, and the mortgage negotiations follow the acceptance of the offer, though one might have pre-approval. In this case, IH has testified it had preapproval of additional investment if needed. That the argument is advanced with reference to a deposition that shows this demonstrates something between desperation and incompetence. For Annesser’s sake, I hope he has documentation of Rossi insisting on these arguments, and even then he could face a motion for sanctions. At least Rossi couldn’t sue him for legal malpractice. On the other hand, Rossi might sue anyway, if he loses. After all, if Rossi Loses, it must be someone else’s fault. The buck stops over there.

And then Rossi uses the bankrupt 30(b)6 argument. This was rejected by Court Order, with DE 246. Twice, actually, because, as 246 points out, the first motion was rejected as inappropriately filed with Altonaga instead of with the Magistrate.


48. Leonardo filed over one hundred patent applications relating to the Licensed Patents (as defined in the License Agreement) without informing IPH. See IPH’s Resp. & Objections to Rossi’s 1st Set of Interrogs. (attached hereto as Ex. 29) at Resp. No. 5 & Ex. A.

48. Disputed. Leonardo did not file any patent application relating to the Licensed Patents without informing IPH. See Ex. 1 ¶ 26. Moreover, IPH’s corporate representative was unable to offer any proof or evidence that Plaintiffs filed patent applications without informing IPH, and did not know which or how many applications were purportedly so filed. See Ex. 17 at 66:20-68:2, 73:17-74:5. Defendant Darden testified that he was not aware of such patents. See Ex. 9 at 138:5-17.

Exhibit A to the 1st Rossi Interrogatories, cited in 48, has a list of applications filed without informing IH, attested by Vaughn. Vaughn is the one who did the research and who knew. Rossi has shown that Fogelman did not know the specifics (referring to IH, i.e., Vaughn) and that Darden did not know the specifics. And then Rossi relies upon the non-knowledge by the corporate representative, following his bankrupt 30(b)6 argument (which is based on a defective reading of case law).

Rossi could negate the claim, if not true, easily, by adducing evidence of the provision of information. Instead he relies on cherry-picking the voluminous evidence for ignorance. The strongest of these would be the IPH 30(b)(6) issue, because, if the defect is not remedied, (in this case, by supplying Vaughn for an additional deposition for IPH), IPH could, indeed, be legally estopped from presenting evidence on this, and IPH is the counter-plaintiff here. Because the evidence was already available before both the IPH (Fogleman) and IH (Vaughn) depositions, it is quite shaky, though, that Rossi could succeed in that sanction being applied. This was all legal nitpicking, without substance. Rossi filed applications without notifying IH, which creates a breach, even if there were no actual damages, Rossi has already lost that argument (i.e., the defective claim if there are not actual damages, there is no breach).

If there is disagreement about patents being “Licensed Patents,” then Rossi could easily and explicitly deny that, but has not done so, instead electing to hide behind the 30(b)(6) screen.


49. Leonardo abandoned over one hundred patent applications relating to the Licensed Patents (as defined in the License Agreement) without prior written notice to IPH. See id. [Exhibit B]

49. Disputed. Leonardo did not abandon any patent application or Licensed Patent without the prior written consent of IPH. See Ex. 1 ¶ 25. Moreover, IPH’s corporate representative was unable to offer any proof or evidence that Plaintiffs abandoned patent applications without informing IPH, and did not know which or how many applications were purportedly so abandoned. See Ex. 17 at 66:20-68:2, 73:17-74:5.

The Rossi affidavit, Ex. 1, at 25, is conclusory. An absence is claimed, and Rossi testifies there is no absence, but does not actually testify, or show with evidence, at least as cited, any actual compliance with regard to the defects clearly asserted in the IPH interrogatory. Rossi relies on the apparent ignorance of Fogleman and Darden as to the facts, but ignores the Vaughn attested evidence. Did Rossi ask Vaughn? I don’t know at this point. But he has not yet claimed it.


50. Leonardo charged Industrial Heat and IPH for fees and expenses associated with Leonardo’s patent activities, and Industrial Heat and IPH paid those fees and expenses. See Composite Ex. 30 [originally filed under seal] ([IH-00131929]; [IH-00014673]; [IH-00003745-00003746]; [IH-00013195-00013196]; [IH-00092023-00092024]; [IH-00011989-0011990]; Leonardo Corp. Dep. Ex. 7).

50. Disputed. IPH testified that it was not aware of the damages associated with any purported breach of the License Agreement with respect to Leonardo’s patent activities. See Ex. 17 at 70:25-71:5. Defendant Darden testified that neither IH nor IPH had computed damages related to any purported violation of any such provision of the License Agreement. See Ex. 9 at 7-24.

Again the bankrupt 30(b)(6) claim that misrepresents what the IPH representative actually stated, he referred to IH, and, in context, this was a referral to Vaughn, and, as I recall, a Vaughn deposition was scheduled for the next day (if this is incorrect, someone correct me).

The non-computation of actual damages is not evidence against a claim of breach of contract. At this point, the evidence shows a breach of contract, and that evidence has not been impeached. There is an apparent conflict with the Rossi testimony, but that testimony is conclusory, not substantive. Rossi does not testify that he complied with the Agreement for any of the voluminous asserted defects. His testimony could simply be the result of his own ignorance.

The reference to Ex. 9, the Darden deposition, does not make sense. The page number appears to be missing. The substance is covered on page 240. For a number of breaches, damages would be speculative. However, it could arise in the future that there is actual damage, so breach is important to establish, if it exists. The breach of failure to assign could be, I’d think, easily remedied, but breach through abandonment of patents might not.

Rossi is making (repeatedly) moot arguments.


51. Rossi and Leonardo are engaged in designing and developing what are classified as “E-Cat Products” under the License Agreement with persons or entities other than Industrial Heat and IPH. See Ex. 25 at Feb. 9, 11, 13, 18 [multiple], 20, 21, & 22, March 25 [multiple] & 30, April 27, June 26, & July 23 [multiple], 2016; Ex. 29 at Resp No. 2.

51. Disputed. Plaintiffs are not engaged in designing and developing E-Cat Products as defined under the License Agreement within the Territory defined in the License Agreement. See Ex. 4. Plaintiffs have not engaged in prohibited competition in violation of the License Agreement. See Ex. 1 ¶ 26.

Ex. 1, Rossi’s testimony, is conclusory, probably hinging on the definition of “E-Cat products.” That will require a more detailed examination. The Territory is not relevant here. If Rossi is developing such products, it does not matter where this takes place, IH has a right under the agreement this development. Rossi is confusing licensing local production and sale with the IP. 

Rossi’s denial in Ex. 1 is about sale of products. Paragraph 51 is about design and development.

Ex. 4 is just the Agreement. Neither IH nor Rossi, here, reference the specific relevant section of the Agreement. It would be, from the Preamble, much stronger than specific technology called “E-Cat.” It would appear to cover all energy production and related technology, thus the Quark-X. Because this could compete with the “E-Cat” technology, it would be covered. IH also has, from the Agreement, a right of first offer outside the territory. Section 13.4 also covers new developments.

Rossi does not offer specific denials, only a blanket conclusion. Let’s look at the specifics, here. I link to the original JONP posts.

February 9, 2016 at 4:31 PM

very premature, but I want to add that today the E-Cat X made a tremendous step forward a massive production. Today I am very happy. …

February 11, 2016 at 8:35 AM
… at 08.27 a.m. of Thursday Feb 11 2016:
1 MW E-Cat stable
E-Cat X operating and still very promising.
Surely we will work also in France. F9.
The E-Cat X is now developed in a new factory wherein Leonardo Corporation will dedicate its production.
We are already preparing the structure for a massive production, F9. I am working with a US engineer expert of the involved matter indirectly in contact with aerospace concerns. He is not involved in the 1MW issue. He is in the scientific commettee of Leonardo Corporation. …

February 13, 2016 at 3:55 PM
… Leonardo Corporation will manufacture in its own factories, outsourcing in part the production.
The production will be made in the uSA and in Europe.
The locations will be disclosed if F9 will be positive, in due time.
The first application has already been done, it is, as well known, in the USA in the factory of a Customer and it is a 1 MW E-Cat that produces thermal energy. …

February 18, 2016 at 3:09 PM …
1. If Leonardo Corporation is now “100% focused” on the E-Cat X, does that mean that a lot more people inside the company have now seen it and are working on it (no longer restricted access)?
2. You refer to a “presentation” of E-Cat X this year. Is this going to be a public presentation, perhaps livestreamed?
3. Will the location and the customer of the E-Cat X in operation in an industy be disclosed in 2016?
4. Will you provide us with a photograph of the E-Cat X in 2016? …

February 18, 2016 at 8:06 PM
… 1- The people working on the E-Cat X is different from the people that worked on the 1 MW E-Cat. I made a new Team specific for this, because the approach is different, even if treasures the experience made with the former E-Cats. I needed an epochè, a revolution of points of view. The Great Team that worked on the 1 MW E-Cat will continue the work on this kind of technology. F9 for both technologies
2- Premature, even if I dream it
3- Premature
4- Hopefully …

February 20, 2016 at 12:53 PM …
the new factory of Leonardo Corporation in which the E-Cat X will be manufactured is in Florida. I must repeat F9, but I can add that in these very days we are making exponential progress. We are very close to be ready to make 1 million pcs/year, technologically speaking. From the moment I will decide that we are ready to start to the moment in which we will start the production line, it will take not more than 3 months. All is already organized. Now that I can give to this concern my full time, we are advancing very fast. …

February 21, 2016 at 6:26 AM
[Q] I have some questions if I may, all assuming F9 = positive.
1- You said that IH is licensed to produce E-cats for the Americas and China. Does that also include E-cat X’s (in the future)?
2- Is it right to assume that the rest of the world will be supplied by the Leonardo Company?
3- I believe you mentioned that Sweden will have a production plant for Europe. Do you intend to produce E-cats at more locations in Europe and Asia?
4- You work strongly together with a jet specialist. Do you expect to test an E-cat jet this year?

February 21, 2016 at 9:42 AM
1- yes
2- no, Industrial Heat has also other Territories in the license agreement
3- eventually yes if opportune
4- yes

February 22, 2016 at 10:52 AM
Feb 22 at 10.50 a.m.:
The E-Cat X are operating well. Now I am focused exclusively on it, during this “period of grace” between the end of the 1 MW E-Cat test end and the dlivery of the report by the ERV.

March 25, 2016 at 9:21 AM
Leonardo Corporation is prepared and ready.
The deliveries of all the robotized lines will be fast, I already signed the MOU, the factory is already ready and I designed the E-Cat QuarkX in a way that will ease the manufacturing, because I have designed it together with the robot experts I am working with and the electronic engineers I am making with the prototypes.
Leonardo Corporation is ready, do not worry. We will be very fast with the distribution, because we want to burn out ALL our possible competitors, whose only strategy I can see is hope to be ready to copy our products, pretending they will have invented them. They will be beaten in two fronts: patent violation and price: Leonardo Corporation will start immediately with very low prices, due to the massive production they will not be ready to do. I have pretty good intelligence about all what is happening around, what really is behind the chatters and there is nobody ready with any structure necessary to compete with us, let alone a product. Leonardo Corporation will have warships, they will have paper ships, made of the same substance of my paper ships I used to make and test in the fountain of the zoo of Milan ( Milano, Italy ) when I was 4 years old, with the engineering assistance of my dad. This having been said, I must add that there is also some competitor that is working very seriously and upon technology really different from ours: but they don’t talk, as I did until 2011.
F8, F9.

March 25, 2016 at 1:12 PM, answered at March 25, 2016 at 3:28 PM [adds little beyond confirming that production of the Quark-X is not just “rolling,” it is “rock and rolling.”]

March 30, 2016 at 12:13 AM
[Q] Congratulations for the good news, and good luck for tomorrow’s ABB meeting. You will need it, to convince the “Professor”: you know, the one who, according to the other robots, thinks cogito ergo sum.

March 30, 2016 at 10:55 AM
Sure: the meeting with ABB has been made this morning and has been the start up.

March 30, 2016 at 10:03 AM
[Q] How went the meeting with ABB?

March 30, 2016 at 10:58 AM
Very well, the job has been started.

April 27, 2016 at 7:01 AM
In June we will have a very important test with a very important Customer. We are increasing the worktime to be ready for that with a mature QuarkX.

June 26, 2016 at 2:08 AM
The QuarkX is very promising, the work is developing positively, the reaction of the Partner is positive.

July 23, 2016 at 1:04 PM
Can you give us an update on the status of your work on the different versions of the E-Cat.

a) How is work going with the 1MW E-Cat plants?
b) Do you have multiple customers with orders in for the 1MW E-Cat plants (low temperature)?
c) How is work going with the QuarkX?
d) Is the QuarkX mature enough to be incorporated into industrial plants?
e) Do you have any customers with orders in for QuarkX plants?
f) What is the status of having a factory or factories ready to produce your products?

July 23, 2016 at 3:27 PM
a) Well
b) Yes
c) still very promising
d) not yet
e) pre orders
f) in the USA we are producing industrial; in Sweden we are preparing the factory

July 23, 2016 at 6:10 PM
That is great news about producing industrial E-Cats in the US factory.
Is this accomplished through manual labor or robotics?

July 23, 2016 at 7:29 PM
Manual labour, so far, but we are working very hard to complete our production capacity with the help of ABB.
I really hope we will have our robotized lines at least installed by the end of the year. I really hope, but there are problems to be resolved. A lot of work has still to be done

The context here is an IH claim that Rossi and Leonardo are engaged in designing and developing what are classified as “E-Cat Products” under the License Agreement with persons or entities other than Industrial Heat and IPH. The blog posts are not sworn testimony (though they are introduced with attestation as being true copies, I think), and perhaps Rossi was lying or exaggerating. However, those posts are a basis for IH to assert their claim, and in the absence of any specific attested denials, it is possible this could be considered established. Among other things, Rossi claims to be producing E-Cat devices in the United States, which would be a violation of the License if not with permission. Is it a breach of contract to falsely claim to be breaching the contract? I would expect that equity would declare that it is, i.e., that it could be considered as such, even if the breach did not actually occur. I’ll be watching with interest how this plays out before the Judge.


52. Rossi and Leonardo have engaged in design and development activities with ABB Group and Hydro Fusion, Ltd. See Ex. 17 at 234:21-235:3; Ex. 25 at June 4, June 14, July 16July 23, July 24, Aug. 8, Oct. 2, Oct. 6, & Nov. 15, 2016; Ex. 29 at Resp. No. 3.

52. Disputed. Plaintiffs are not engaged in prohibited design and development activities
within the Territory defined in the License Agreement. See Ex. 4. Plaintiffs have not engaged in
prohibited competition in violation of the License Agreement. See Ex. 1 ¶ 26.

Again, Rossi does not deny IH ¶ 52, but claims it was not prohibited. IH Ex. 17 is remarkable, how Rossi evades questions. However, he admits enough to show that he was lying — being grossly misleading — in at least some of his blog posts. That’s a video deposition. Rossi evading questions could be shown to the jury. Ex. 4 is simply the Agreement, and the exact application of the Agreement to this situation is not specified, and Ex. 1, Rossi’s affidavit, is conclusory and nonspecific. From his video deposition (IH Ex. 17), a straighter admission would be that, on JONP, he was lying or exaggerating or presenting his ideas and plans as if they were actualized.


53. The IRS Form 1120 for the year 2012 filed by Leonardo FL, as produced by Plaintiffs in this action, is attached as Exhibit 31 [originally filed under seal, now here] ([Rossi_00011665-00011684]).

53. Undisputed.


54. The IRS Form 1120X for the year 2013 filed by Leonardo FL, as produced by Plaintiffs in this action, is attached as Composite Exhibit 32 [originally filed under seal] ([Rossi_00011685-00011704]; [Rossi_00011715-00011734]; [Rossi_00011736-00011751]).

54. Undisputed.


55. The IRS Form 1040NR for the year 2013 filed by Rossi, as produced by Plaintiffs in this action, is attached as Exhibit 33 [originally filed under seal] ([AE000358]).

55. Disputed. Non-Party AEG produced the document contained in Defs.’ Ex. 33. Plaintiffs produced amended tax returns for the year 2013 as bates-range Rossi_00011736-51.

No difference in the documents is claimed. This is perhaps a clarification of a moot detail, rather than an actual dispute.


56. Beginning in June 2014, Rossi, on behalf of Leonardo, repeatedly stated to Industrial Heat that he had “found” a “customer” with its own facility [in] Florida, and that this “customer” had a commercial need for, and was going to use in a chemical manufacturing process, steam that Rossi and Leonardo intended to produce from the 1 MW Plant. See Ex. 2 at 183:9-184:5, 199:9-16; Ex. 9 at 164:19-23; Ex. 19 at 215:3-10, 229:17-21, 232:15-23; Ex. 21 at 180:8-22, 181:7-17, 194:17-20, 198:16-20, 267:18-268:4, 268:23-269:4; Composite Ex. 34 (4th Am. AACT Ex. 16; Rossi Dep. Exs. 13 & 14; [IH-00011175-00011176]).

56. Disputed. Dr. Rossi reported to Defendants that Plaintiffs and Defendants had a potential customer who could use steam produced from the E-Cat. See Supp. Ex. 45 at 191:17-192:24).

Rossi attempts to recast the fact to allow “potential customer” — which may then exist only as a Rossi fantasy, to be conjured up as a corporation allegedly owned by a “U.K. entity,” — which did not exist — as distinct from already operating customer. The clearest evidence on this is the Rossi email proposing the arrangement, AACT Ex. 16.

The Rossi deposition cited is remarkable and close to the core of the case. Rossi calls what he wrote to IH “rhetoric.” He claims that in Italian, one may present a possibility as a fact. That may also be done in English, “rhetorically,” but with someone who wishes to avoid misleading others, the distinction will be made clear. If Rossi is not now lying about the issue, he was nevertheless negligent in distinguishing fact from fantasy. Consider: “I have a fantasy of a customer who ….” There would have been no problem in that as a declaration of possibility. And then IH might say, “Great! If you can find one, that would be super!” However, IH actually had a customer lined up, apparently, and Rossi was making out that this other customer was much, much better, and he gave reasons. Rhetoric? Sure. Rhetoric designed to make a choice against their interests, and pursuing Rossi’s own. Rossi clearly pretended that the customer already existed as an independent entity. This has become totally clear.


57. Rossi also represented, on behalf of Leonardo, that this “customer” was affiliated with Johnson Matthey, plc (“Johnson Matthey”), a British multinational specialty chemical company with over £10 billion in revenue. See Ex. 9 at 172:6-173:12, 185:18-186:2, 186:9-18; Ex. 19 at 213:25-214:9, 215:3-10, 229:21-230:5; 231:22-232:23; Ex. 21 at 180:13-181:25, 194:9-16; Composite Ex. 35 ([IH-00090895-00090896]).

[Besides the initial correspondence, see particularly this page.]

57. Disputed. Dr. Rossi did not represent to Defendants that J.M. Products was an affiliate of Johnson Matthey. See Supp. Ex. 46 ¶ 13. Dr. Rossi represented to Plaintiffs that J.M. Products was a newly formed company that Henry Johnson – Dr. Rossi’s attorney – would serve as the company’s CEO and that Dr. Rossi would run the operations for the first year of business. See Supp. Ex. 56 (IH- 00011867, IH-00012026). Henry Johnson never intended J.M. to stand for Johnson Matthey, and Dr. Rossi never told Henry Johnson that J.M. Products would be related in any way to Johnson Matthey. See Supp. Ex. 57 at 124:5-25, 171:13-19).

Rossi is making a specific denial here, whereas the fact asserted is different. The representation was obviously that Johnson Matthey was to be the real customer, and that JM would later openly acknowledge it. The Rossi affidavit (Supp. Ex. 46) appears close to perjury, over or beyond the boundary. Somebody brought in “Johnson Matthey.” Rossi clearly allowed that impression to live, and only gradually moved away from it, as shown by multiple emails. Someone told Bass about Johnson Matthey, and someone told Johnson about “Advanced Derivatives of Johnson Matthew Platinum Sponge.” Johnson would not have just made that up himself. And that is clearly “related” in some way. Johnson also represented that JMP was owned by a “U.K. entity,” this fitting in with the JM story. Where did that come from? If JMP was simply a local enterprise, why even bring up the “U.K.”? It makes no sense except as part of a plan to make it appear that the real customer was Johnson Matthey. Johnson knew that the owner of JM Chemical Products, as incorporated, was the Platinum America Trust, managed entirely by Johnson, on behalf of Rossi’s friend, who contributed nothing but his name, JMC/JMP was entirely operated and managed by Rossi, anything else was formal fluff.

Most of the facts asserted in this Rossi opposition are not relevant to the claim in the IH paragraph. As to the intention of the name, Rossi denies an intention, based on a fragment of deposition, that JM stood for Johnson Matthey, but does not assert any other origin of the name.

It is completely clear that IH believed that the customer was Johnson Matthey, and indicated that in numerous ways to Rossi, and Rossi, far from correcting them, essentially confirmed it, by asking them not to talk to the real Johnson Matthey, because it would upset them, and then asserting that he should not have mentioned them, because of a desire for secrecy.


58. This “customer” was Third-Party Defendant J.M. Products, Inc. (“J.M. Products”), who at the time was known as J.M. Chemical Products, Inc. See Ex. 2 at 183:9-184:11; J.M. Products Dep. (excerpts of which are attached hereto as Ex. 36) 66:22-67:2 [not highlighted]; Johnson Dep. (excerpts of which are attached hereto as Ex. 37) 88:8-21, 97:13-18; Composite Ex. 38 (Johnson Dep. Exs. 11 & 12).

58. Disputed. See disputed facts in ¶ 57, supra.

No fact from ¶ 58 is contradicted here.


59. Rossi asserted to Industrial Heat that having a “real customer” with a need for steam would be an independent check on how the 1 MW Plant would operate, in that the “customer’s” purchase of the Plant’s steam would confirm that such steam was being produced. See Ex. 17 at 242:21-243:2; Ex. 34 at [sic, “formerly presented as”] 4th Am. AACT Ex. 16.

59. Disputed. Dr. Rossi represented to Defendants that J.M. Products would use steam heat produced by the 1MW Plant to treat platinum sponge to create catalyzers for sale. See Supp. Ex. 58 (IH- 00012026); Supp. Ex. 45 at 185:23-186:20. IPH has no proof to contradict this representation. See Ex. 17 at 149:19-150:8 [no page 149]. In fact, J.M. Products did use steam generated by the 1MW Plant to create platinum-sponge and/or grapheme [sic] based catalyzers for sale to Leonardo. See Supp. Ex. 59 at 214:23-215:3, 220:16-19, 225:5-10. Regardless, Defendants did not care what J.M. Products was using steam for or what the company was producing. See Supp. Ex. 48 at 196:8-196:11. Finally, Defendants’ cited testimony and documents do not stand for the proposition for which Defendants cite them; Defendants misstate the cited testimony. See Defs.’ Ex. 17 at 79:1-80:14 [no page], 139:6-140:3 [sic, seems irrelevant], 174:1-15 [no page], 242:21-243:2.

The facts alleged here do not contradict IH ¶ 59. Three cited pages do not exist, and yet another exists but does not appear to be relevant. There is some error here.

It is not stated what specific testimony is misstated. So let’s look at all of it.

Ex. 17 at 242:21-243:2.

Q. Later you talk about how the — there will be confirmation. Will be able to find confirmation of the COP by what is invoiced to J.M. Products versus what — by Leonardo, versus what is invoiced to J.M. Products for the electrical bill from FPL, correct?

A. Yes.

Ex. 34, Rossi emails (not “testimony”) is more about the general context of the proposal. ¶ 59 may have been written mostly from general understanding and personal memories, and then Ex. 17 was shown for specific evidence on this narrow issue, and Ex. 34 for background. I don’t see any clear misrepresentation here. In Ex. 34, the deliberate representation of JMP as independent, with production necessities, is clear. It is also clear that Rossi claims that IH failed to find a customer in North Carolina are false. They had a customer ready to go.

I don’t see any misrepresentation here. However, Rossi answered Yes to what may have been a leading question.


60. The original drafts of a proposed Term Sheet, by which Industrial Heat would agree to move the 1 MW Plant from its facility in North Carolina to the “customer’s” facility in Florida, were prepared by Rossi and named the “customer” as Johnson Matthey. See Composite Ex. 39 ([IH-00007120-00007123]; [IH-00007129-00007131]).

60. Disputed. Dr. Rossi represented to Defendants that J.M. Products was a newly formed company that Henry Johnson – Dr. Rossi’s attorney – would serve as the company’s CEO and that Dr. Rossi would run the operations for the first year of business. See Supp. Ex. 56. As such, Plaintiffs clarified to Defendants in drafts of the Term Sheet that there should be no reference to Johnson Matthey, and any such references were deleted. See Supp. Ex. 60 (Rossi_00001328). Furthermore, there is no evidence showing that Dr. Rossi drafted the term sheet. See Supp. Ex. 61 (IH-00007120).

Rossi surely knows who introduced “Johnson Matthey” to the conversation. There are many evidences, this is not a mere suspicion or unsupported claim. The claimed representation about Johnson, etc., supported by Ex. 56, was later. Ex. 56 does not represent that Rossi would run the operations of JMP. The Rossi email of June 10 does not assert that Rossi will run the operations of JMP for a year, but rather that he will run the “Plant” for that time, and in context, that is clearly the “1 MW Plant.”

The mails where Rossi asks for removal of “Johnson Matthey” do not explain it as an error, and do not treat it as any surprise. It is not plausible that this was introduced by IH without Rossi suggesting it, and there are other evidences, such as the Bass-Rossi emails.

The Darden email (Supp. Ex 61) loosely confirms that the first draft (“sketich”) was by Rossi. I would expect that the actual email with the first draft will be available. Darden modified it, following it, sending it to the lawyers July 10, 2014 and a copy back to Rossi. Supp. Ex 61, though, is not as complete as IH Ex. 39. IH Ex. 39 has the actual document in it. The version sent back to Rossi, allegedly following his sketch, names the customer as Johnson Matthey. Rossi does not immediately object to it. July 9, Rossi requested this and called the customer “JM.”


61. Every attempt made by Industrial Heat to investigate or contact the “customer,” a counter-party to the proposed Term Sheet, was rebuffed by Rossi, on the basis that Johnson Matthey did not want its name associated with the venture at the time. See Ex. 9 at 177:11-178:2; Ex. 19 at 228:4-11; Ex. 21 at 198:7-20, 199:20-200:3, 271:7-16; Composite Ex. 40 ([IH-00090826-00090827]; [IH-00007113-00007114]; [IH-00007117-00007118]);

61. Disputed. Defendants could have, but did not, make any attempts to “investigate” or
“contact” Johnson Matthey to confirm any purported arrangement with them or any related entity. See, e.g., Supp. Ex. 48 at 200:5-201:2. Defendants never called Johnson Matthey to speak with them about any agreements or arrangements. See id. at 195:25-196:11. Defendants never requested a letter from Johnson Matthey or any other written confirmation that would validate Dr. Rossi’s alleged representations. See id. at 201:3-6. Defendants did no due diligence into whether the customer had a facility in Florida. See Supp. Ex. 52 at 232:10-18. Defendants did not ask to see the customer’s facility where the 1MW Plant would operate. See Supp. Ex. 48 at 195:25-196:11. Defendants did not care what the customer would be doing. See id. at 196:8-196:11. The extent of Defendants’ due diligence with respect to the customer was to check Secretary of State filings to determine where J.M. Products was formed and to ask Dr. Rossi and Henry Johnson to sign an OFAC compliance document. See Supp. Ex. 52 at 229:3-10. The Compliance with OFAC statement was signed by Henry Johnson on behalf of J.M. Products, Inc. See Supp. Ex. 62 (OFAC Statement). None of the documents to which Defendants cite support their purported “undisputed fact” that Dr. Rossi ever rebuffed any of Defendants’ attempts to contact the actual customer – J.M. Products – or Johnson Matthey. See Defs.’ Ex. 40. 

Rossi is recounting what they did not do, and citing irrelevancies (such as not caring what the customer would be doing, which in context must mean not caring about the specific processs, not a blank check as Rossi is implying. That there was a real chemical process, being run by a real chemical company, was, in fact, important, as is expressed in documents). What does it mean to “rebuff” an attempt to contact. In context, it could simply mean that Rossi claimed it would cause harm if they attempted to contact the customer. Does the evidence show that?

First of all, was that plausible. Johnson Matthey, called JM in the early correspondence, is a major chemical company, and it is plausible that they might want an involvement with a LENR test to be secret, until they were sure that it was working well, and that is what Rossi claimed.

Ex. 9 at 177:11-178:2 This is Darden recounting his recollection of conversations in 2014. It is a bit fuzzy — he may have conflated more than one conversation, or exactly where and when something was said — but he recalls wanting to contact JM and Rossi said he would bring the President. And then he was surprised, the President just didn’t seem to be a “Johnson Matthey kind of guy.” And it wasn’t, of course, it was Johnson, Rossi’s attorney. As part of this testimony, Darden says that “Rossi or Johnson” said that “they wanted it to be a separate subsidiary, they didn’t want their name on it.” All this, then supports the IH “Johnson Matthey” narrative, it would make no sense for an independent new company. So when Darden wanted to talk with “JM,” Rossi supplied Johnson for it. That was a kind of rebuff, a substitution, a switch. And then there are rationalizations for it.

Ex. 19 at 228:4-11; this is Vaughn confirming Darden’s story, with more detail.

we wanted to meet a representative and we were even willing to go to the UK to meet somebody at Johnson Matthey who could affirm what he was saying. He [Rossi] said, Well, actually, I will have their representative come up. He is in Miami. And we will meet in Raleigh. And that is the meeting at Red Robin

This was arguably an attempt to prevent IH from directly meeting with IH.

Ex. 21 at 198:7-20, Vaughn testified that Rossi argued strongly against a proposed meeting with Johnson Matthey, that the Miami project was “very confidential” and they “didn’t want anyone to know.” If Rossi was not lying, it could indeed have done harm to contact JM directly.

199:20-200:3, supports this.

271:7-16; is also explicit.

A. Correct. We did not contact Johnson Matthey. I did not. And that was because Andrea had said, you know, Henry Johnson is the representative of Johnson Matthey and, you know, you can’t contact them, they want this to be super confidential, you guys aren’t to — that will make them nervous if you guys contact them or, you know, mess things up

Composite Ex. 40,  Page 3 is an email from Rossi confirming the IH narrative on JM. He represents the real company in London as preferring to act as the U.S. company (“JM corp”) because of their “terror” to get engaged, being a public company. The IH story here is so clear and so thoroughly evidenced that, indeed, it is not legitimately disputed except by distorting the record, as Rossi does in this opposition. If, indeed, that is legitimate. I don’t expect it to fly.

I am struck by the chutzpah of Rossi, having deceived them like this, arguing that they could have checked with JM, as if that was a big failure and might excuse his own behavior. Of course they could have, but they might as well have tossed Rossi in the street right then, the effect would have been similar. Rossi does not continue to do business with people who want to confirm what he claims and are clear about that.


62. On July 28, 2014, Industrial Heat, Rossi, and Third-Party Defendant Henry Johnson (“Johnson”) met in North Carolina to discuss moving the 1 MW Plant from Industrial Heat’s facility in North Carolina to J.M. Products’ facility in Florida. Ex. 9 at 173:21-174:2; Ex. 37 at 230:18-231:6. Prior to the meeting, Rossi had told Industrial Heat that the purpose of the meeting would be to meet a Johnson Matthey representative. See Ex. 9 at 171:14-172:3, 174:3-11; Ex. 19 at 226:1-6, 226:14-227:2; Ex. 21 at 205:8-9, 270:21-24. During the meeting, Rossi introduced Johnson as J.M. Products’ president, and further represented (with Johnson’s acquiescence and adoption) that J.M. Products was affiliated with Johnson Matthey. See Ex. 9 at 174:12-175:11; Ex. 19 at 226:6-13, 228:4-11; Ex. 21 at 203:6-9, 203:15-20, 204:11-21, 205:17-23, 269:8-270:6; Ex. 37 at 237:13-22. Both Rossi and Johnson further represented that J.M.
Products had its own facility in Florida, and was intending to use steam produced by the 1 MW Plant in a chemical manufacturing process. See Ex. 9 at 175:12-176:14, 180:7-12, 181:5-14; Ex. 37 at 237:13-22.

62. Disputed. On or about July 2014, Dr. Rossi and Henry Johnson met with Defendants Darden and Vaughn in North Carolina to discuss the proposal to relocate the 1MW Plant to Florida and how J.M. Products would utilize the Plant. See Defs.’ Ex. 37 at 230:18-231:6. At no time prior to that meeting did Dr. Rossi represent to Defendants that there would be a meeting with any Johnson Matthey representative. See Supp. Ex. 46 ¶ 14. During the July meeting, Dr. Rossi informed Defendant Darden that J.M. Products’ only “association or affiliation with Johnson Matthey” was that J.M. Products would “obtain materials from Johnson Matthey and process those materials.” See Defs.’ Ex. 37 at 237:13-22. In fact, J.M. Products did use steam generated by the 1MW Plant to create platinum-sponge and/or grapheme based catalyzers for sale to Leonardo. See Supp. Ex. 59 at 214:23-215:3, 220:16-19, 225:5-10. Subsequent to that meeting, Defendants sent Barry West to help set up the Doral facility. See Supp. Ex. 63 at 87:5-8.

There are some direct contradictions in testimony here. I can see I am going to need to create a timeline. What is being presented by Rossi is cherry-picked, where it is not entirely irrelevant. I.e., why is Bass mentioned? It has nothing to do with the issue here. Nor is what JMP actually used the alleged steam for. I am, at this point, stopping detailed analysis of each response. I may come back and complete that, or may make exceptions as I see them, but I prefer to move ahead with the basic presentation of this document. What I am finding, reading all this, is a very clear understanding of what happened, of the facts, as distinct from all the interpretations and what often amount to excuses or justifications.

3pD: 62. Disputed. On or about July 28, 2014, Johnson and Andrea Rossi (“Rossi”) met with IH in North Carolina to discuss the proposal to relocate the Plant to Florida and how JM Products would utilize the Plant. See Johnson Depo. Tr. at 230:18-231:6. None of the documents that IH cites to supports the purportedly undisputed fact that any representation as to any affiliation between Johnson Matthey and JM Products. In fact, IH was informed that the only “affiliation” with Johnson Matthey was that JM Products would obtain materials from Johnson Matthey and process those materials. See Johnson Depo. Tr. at 237:13-22. IH knew that JM Products was a newly formed company and not yet operating. See Darden Depo. Tr. at 177:1-3, 177:8-10. JM Products used steam produced by the Plant to create platinum sponge and/or graphene based catalyzers for sale to Leonardo. See Leonardo Depo. Tr. at 214:23-215:3, 220:16-19, 225:5-10.

“None of the documents that IH cites to support” is clearly false or misleading. There was clearly representation of affiliation, as a background to the meeting on July 28. Johnson acknowledges questions that, as presented, assumed he represented Johnson Matthey. There is no question that JMC/JMC were separate, and the only actual affiliation was as described. But there was a represented affiliation, shown in many documents and testimonies. None of this conflicts with JMP being a newly formed company. When Rossi changed the name on the Term Sheet to JMC from JM and “Johnson Matthey,” it was clearly indicated as the result of the desire of the “real customer” for secrecy, with representations that after a time, they would allow it to be open.

The real customer was Rossi himself, with a corporate shell formed, with Rossi in total control of it. He made all JMP decisions, and paid for all expenses, with a paper excuse, that this would be covered by the sale of products to Leonardo, so … Rossi would process some products, wearing the JMP hat, and then sell them to himself, wearing the Leonardo hat. None of this, if open and acknowledged, would have been allowed by IH. The argument presented for the move was that JM was a real customer, actually engaged in manufacture of chemical produces, a highly reputable chemical manufacturing company, independent, and Rossi reported conversations with the management of JM (i.e., by this time, JMP), that were preposterous, with what we know. Rossi was talking to himself?

 


63. Following the July 28, 2014 meeting, Rossi continued to make representations to cause Industrial Heat to believe that J.M. Products was affiliated with Johnson Matthey, and that publicly identifying Johnson Matthey would lose J.M. Products as a “customer.” See Composite Ex. 41 ([IH-00011864]; [IH-00011871-00011872]; [IH-00011867-00011870]);

63. Disputed. At all times subsequent to the July 2014 meeting, Dr. Rossi represented to Defendants that J.M. Products was a new company and that Defendants would be working with J.M. Products. See Defs.’ Ex. 41. The extent of Dr. Rossi’s representations regarding Johnson Matthey was that J.M. Products would use Johnson Matthey as a supplier. See Defs.’ Ex. 41. Dr. Rossi’s references to anonymity refer exclusively to J.M. Products, and not Johnson Matthey. See Supp. Ex. 46 ¶ 15.

This is appalling. It is recasting the obvious meaning of Rossi’s email, in context, and denying the obvious implications of that mail and previous ones. Rossi did not respond to suggestions that IH meet with Johnson Matthey in London with correction of the (now-alleged) error, he responded with warning that this could cause great harm. His reference to anonymity could indeed be taken as claimed here, but only as a later attempt to explain away the obvious. JMP was Rossi, start to finish, lock, stock, and barrel, all except for some pieces of paper being pushed around. Yet Rossi presents the concern about anonymity as being from an independent company. A public company, in the U.K., and then Johnson represented that the owner of JM Chemical Products was a “U.K. entity,” and then claims that this was a plan, later abandoned. A plan for what purpose? Why would one even dream of setting up a UK entity? It’s obvious: to be more able to pretend that the representation in the OFAC statement was true. Johnson certified what was not true.

3pD: (no response)


64. Also following the July 28, 2014 meeting, Rossi changed the “customer” in the proposed Term Sheet to J.M. Products, insisting that Johnson Matthey did not want its involvement in the venture to be known. See Ex. 9 at 185:18-186:8; Ex. 21 at 194:9-16, 274:14-20, 275:7-8, 275:15-20, 275:25-276:3; Ex. 42 ([IH-00089932-00089938]).

64. Disputed. Dr. Rossi represented to Defendants that J.M. Products was a newly formed company that Henry Johnson – Dr. Rossi’s attorney – would serve as the company’s CEO and that Dr. Rossi would run the operations for the first year of business. See Supp. Ex. 56. As such, Plaintiffs clarified to Defendants in drafts of the Term Sheet that there should be no reference to Johnson Matthey, and any such references were deleted. See Supp. Ex. 60. Furthermore, there is no evidence showing that Dr. Rossi drafted the term sheet. See Supp. Ex. 61. 

 Supp. Ex. 61 shows that Rossi sent a draft to IH, and that IH then used it to create the first draft that has been entered as evidence. This exhibit supports that Rossi drafted the agreement, and the full sequence supports that it originally named Johnson Matthey as customer, also called “JM” in the documents. Supp. Ex. 60 only shows that the agreement was amended as claimed by IH. By some point in the discussions, it was indeed revealed that JMP was a “newly formed company,” but it continued to be represented that JMP was owned by JM. What Rossi represented in removing the name was that JM did not want any formal involvement, but the JM was the actual company of interest, but that they were not to be contacted, it could cause harm. From testimony, IH made a choice to rely on these representations, and Rossi’s arguments to induce the agreement did rely on them, they make no sense if referred to a “new company,” and especially a new company that we now know had no existence other than as paper, with actual funding and all operations conducted by Rossi, with Johnson again supporting with paper and secretarial help.

65. Further, on August 6, 2014, Johnson, on behalf of J.M. Products, signed a representation that J.M. Products “[was] owned by an entity formed in the United Kingdom.” See Ex. 37 at 239:15-240:2, 247:16-249:25; Composite Ex. 43 (Johnson Dep. Exs. 50, 51, & 52).

65. Disputed. J.M. Products was intended to be established in the United Kingdom, but due
to high costs associated with incorporation the situs was changed. See Defs.’ Ex. 37 at 240:16-20.

This is nonsense, it neglects the sequence. By the time of the OFAC declaration, the owning entity (Platinum America Trust) existed as paper in Johnson’s office. JMP had been incorporated. The declaration used the present tense, implying an actually-existent owner, or, at the least, some “entity” in the U.K. — as an unincorporated association or at least an individual actually in the U.K. — when the fact was that the trust owning JMP was in Florida, and the beneficial owner was Italian, with no indication that he resided or worked in the U.K.

The OFAC declaration, on the face, appears to have been created to maintain the impression that the real owner of JMP was Johnson-Matthey, which is certainly a “U.K. entity,” and no other cause or reason for planning the creation of a U.K. entity has been asserted or imagined.

It would not have been necessary to incorporate in the U.K. “Entity” is quite general and not only corporations are entities. However, this was all part of the deception.

Johnson’s deposition (Def. Ex. 37) acknowledges evidence that the representations to IH were designed to create an impression while creating plausible deniability, i.e., that JMP was actually new and independent, with IH supposedly being informed of this, and they were, but in a manner that left the “Johnson Matthey” impression intact, and with this attorney certification, IH considered that the likelihood of false representation was low.

3pD: 65. JM Products was intended to be established in the United Kingdom, but due to high costs associated with incorporation it was formed elsewhere. See Johnson Depo. Tr. at 240:16-20.

This is obviously after-the-fact rationalization. If JMP was a U.S. company, not related to Johnson-Matthey, there was no reason at all for an “entity” in the U.K. It is clear why that was represented: to support the narrative that the real customer was as originally stated, a U.K. company, Johnson-Matthey, “JM” in documents, and that JMP, nee JMC, was just a U.S. company formed for the purpose, with Johnson as incorporator (not initially realized to be Rossi’s attorney, but thought to be the representative of Johnson-Matthey) . That is why Johnson was asked questions about Johnson-Matthey and about the intended process.

Johnson supported this by remaining silent as Rossi answered at that meeting, by signing the OFAC document, by creating the paper owner, Platinum America Trust, knowing that this was a sham designed to support Rossi by creating a fake independent customer, and with those invoice requests that were not independent measures, but entirely created on Rossi say-so. Johnson enabled Rossi’s fraudulent representations, and his status as an attorney, even when they discovered who he was, led them to continue to rely on the representations.


66. From the time Rossi first raised the “customer” with Industrial Heat to the time the Term Sheet was executed, J.M. Products did not have a chemical manufacturing process in place with a need for the steam to be produced by the 1 MW Plant. In fact, it did not have any operations at all. See Ex. 2 at 191:18-192:1; Ex. 36 at 34:9-14; Ex. 37 at 31:19-25, 35:13-15, 90:25-91:3, 219:19-221:15, 222:3-24, 235:19-236:2.

66. Disputed. At all relevant times prior to execution of the Term Sheet, Defendants knew that J.M. Products would be a newly formed company not yet operating business. See Supp. Ex. 56; See also Supp. Ex. 46 ¶ 12. At all relevant times, Defendants knew that the Doral Facility was not yet up and running. See Defs.’ Ex. 36 at 34:9-20.

“At all relevant times” is vague. “J.M. Products” would be a new company, yes, but JM was an existing company, and Rossi maintained the illusion that JM was the “real customer” for some time, having made sure that IH would not contact the real JM, because it could cause the deal to fall apart, so intent were they on secrecy.

3pD: 66. Disputed. At all relevant times prior to the execution of the Term Sheet, CounterPlaintiffs knew that JM Products would be a newly formed company and not yet operating. See Darden Depo. Tr. at 177:1-3, 177:8-10.

The cited deposition shows that Darden was following representations that JMP was a corporation formed to represent Johnson-Matthey (JM). There is no clear conflict between that fraudulent representation and “newly formed company.” A purely new company, however, would not have the reputation that was considered important in the earliest negotiations. 


67. Also during this time period, J.M. Products was not in any way affiliated with Johnson Matthey; it was owned by a U.S. trust over which Johnson had control as trustee. See Ex. 2 at 202:8-203:11; Ex. 36 at 111:11-112:7, 204:21-205:19; Ex. 37 at 14:21-15:12, 171:13-173:3, 240:7-20, 243:20-244:1.

67. Disputed. Dr. Rossi made clear to Defendants that J.M. Products was a newly formed company. See Supp. Ex. 56. Dr. Rossi made clear to Defendants that J.M. Products would use Johnson Matthey as a supplier. See Defs.’ Ex. 41.

Ex. 41 is Rossi explaining that the “Customer” would not accept further disclosure — this was Rossi pretending there was some customer other than him and some paper set up by Johnson — but “after 3-4 months of good operation” they will make an official outing.” Of course, that never happened. There was no “Customer,” only Rossi puppet theater. Meanwhile, Rossi did not make clear what is claimed above. Rather Rossi wrote that IH would be “allowed to say to their investors that Johnson Matthey is the main supplier of JMC and that the same buys from JMC all the production not bought by other customers.” This was all nonsense. There was no chemical plant, beyond what amounted, at best, to some experimental processing, something that absolutely did not need a megawatt of power. This was all a ruse to create a context where Rossi could pretend that a customer was buying power for some actual application, to allow him to run a faux GPT entirely under his control. He was the customer. Johnson did whatever he said.

3pD: 67. IH knew that the only “affiliation” with Johnson Matthey was that JM Products would obtain materials from Johnson Matthey and process those materials. See Johnson Depo. Tr. at 237:13-22.

No, IH did not know that as the “only affiliation,” they were told that this is what they could say. Rossi created an impression that the true customer behind JMP was Johnson Matthey. As part of this story, they were told what is here represented. There was then a very small quantity of material actually purchased, on an occasion.


68. The only connections between J.M. Products and Johnson Matthey were that Rossi, on behalf of J.M. Products, once asked for a price quote from Johnson Matthey for the purchase of platinum sponge, and then later bought some filters from a Johnson Matthey subsidiary in the United States (to mine them for platinum sponge contained therein). See Ex. 2 at 201:14-203:11; Ex. 17 at 215:14-218:14, 221:8-223:16; Ex. 36 at 104:3-112:17; Ex. 37 at 125:8-127:25; Ex. 44 (Leonardo Corp. Dep. Ex. 17).

68. Disputed. Dr. Rossi made clear to Defendants that J.M. Products was a newly formed company. See Supp. Ex. 56. Dr. Rossi made clear to Defendants that J.M. Products would use Johnson Matthey as a supplier. See Defs.’ Ex. 41. In fact, J.M. Products purchased product from Johnson Matthey. See Supp. Ex. 64 at 108:1-16.

The reality was far from what Rossi had represented, with Johnson’s participation.

3pD: 68. See ¶67, supra.


69. Rossi, on behalf of Leonardo, and Johnson, on behalf of J.M. Products, each made these representations regarding the “customer” to induce Industrial Heat to sign a Term Sheet to allow Rossi and Leonardo to move the 1 MW Plant to Florida. See Ex. 2 at 192:21-25, 200:1-3; Ex. 9 at 177:11-178:2, 185:18-186:8; Ex. 19 at 191:13-16, 192:15-20, 215:6-10, 218:9-13, 226:1-228:11, 236:22-237:20; Ex. 34; Ex. 37 at 230:18-231:6, 232:9-19, 234:2-235:18, 237:13-22.

69. Disputed. Plaintiffs never intended to induce Defendants into signing a Term Sheet and made no false representations with respect to J.M. Products. See Supp. Ex. 46 ¶ 46. [sic. ¶ 22] In addition, Defendants mutually benefitted from the use of a customer in that they actually brought investors to the Doral Facility in order to solicit and obtain over $50 million in investment funds. See Ex. 3 at 170:9-14, 204:25-205:5; 206:6-207:6; Ex. 34. Finally, Defendants testified that with respect to a customer, they simply wanted to “accommodate” Dr. Rossi. See Supp. Ex. 48 at 184:7-15. Defendants’ “goal” was to determine whether the 1MW Plant produced a “real serious significant energy output.” See id. at 184:7– 15. Defendants did not care what the customer would be doing. See id. at 196:8-196:11.

3pD: 69. Disputed. Johnson and JM Products did not make any false representations with respect to JM Products. See Johnson Depo. Tr. at 237:13-22; Vaughn Depo. Tr. at 204:22-24, 270:18-20; IH Depo. Tr. at 227:21-228:3, 228:20-229:2. There is no evidence that established Johnson was present when any alleged representations regarding Johnson Matthey were made. See id. Furthermore, IH testified that it was “trying to be accommodative” and “trying to keep [Rossi] happy” when it allowed the Plant to move to Florida. See IH Depo. Tr. 214:15-19, 215:25-216:1; see also Vaughn Depo. Tr. at 272:9-10. [272 missing from 243-6 Ex. F, but present in IH 207.21.]

There is evidence that Johnson was present when representations were made, but it is in the form of summary memories, not specific language. The OFAC declaration is acknowledged as false, it was, on the face, a statement of fact, not intention, and that false “fact” supported the Johnson Matthey story.


70. In reliance on these representations, Industrial Heat entered into a Term Sheet on or about August 13, 2014 with Leonardo and J.M. Products. See Ex. 9 at 156:24-162:5, 164:19-167:14, 169:21-24, 180:15-181:3, 191:21-23; Ex. 19 at 191:21-24, 213:25-214:19, 215:20-216:12, 217:12-221:3, 231:24-232:20; Ex. 21 at 182:5-183:8, 184:7-15, 185:3-10, 197: 8-16, 198:7-201:2, 267:18-268:7, 272:5-12, 276:19-277:9. A true and correct copy of the final executed Term Sheet is attached hereto as Exhibit 45.

70. Disputed. Defendants entered into the Term Sheet because they simply wanted to “accommodate” Dr. Rossi. See id. at 184:7-15. Defendants’ “goal” was to determine whether the 1MW Plant produced a “real serious significant energy output.” See id. at 184:7-15. Defendants did not care what the customer would be doing. See id. at 196:8-196:11. In addition, they intended to, and did, solicit and obtain $50 million in investment funds. See Ex. 3 at 170:9-14, 204:25-205:5; 206:6-207:6; Ex. 34.

3pD: 70. Disputed. IH entered into the Term Sheet because it was trying to accommodate Rossi. See IH Depo. Tr. 214:15-19, 215:25-216:1; see also Vaughn Depo. Tr. at 272:9-10.  IH did not care about what the customer would be doing. See Vaughn Depo. Tr. at 196:8-11. [p. 196 and 272 missing from Ex. F, IH 207-21 used here.] In addition, Counter-Plaintiffs solicited and obtained $50 million in investment funds after IH entered into the Term Sheet. See IH Depo. Tr. at 170:9-14, 204:25-205:5, 206:6-207:6. It is undisputed that JM Products, Leonardo, and IH entered into the Term Sheet on or about August 13, 2014. See ECF No. 132-17. [link is to original filing, 29-17]

 


71. Industrial Heat would not have entered into the Term Sheet or allowed Rossi to remove the 1 MW Plant to Florida if Industrial Heat had known that the “customer” had no affiliation with Johnson Matthey or any other publicly traded company, and no real manufacturing process or need for steam or heat. See Ex. 6 at ¶ 14; Ex. 19 at 218:2-221:3.

71. Disputed. See Disputed Facts in ¶ 70, supra.

3pD: 71. Disputed. See ¶70, supra.


72. Rossi rented the premises at 7861 N.W. 46th Street, Doral, FL 33166 (the “Doral Facility”) on behalf of Leonardo. See Ex. 2 at 200:9-17; Ex. 36 at 24:25-25:9, 72:7-20, 83:6-17; Ex. 37 at 40:25-41:6, 110:12-111:18, 123:10-17; Composite Ex. 46 (Johnson Dep. Ex. 15; J.M. Products Dep. Ex. 3).

72. Undisputed.

3pD: 72. Undisputed.


73. After the 1 MW Plant moved to the Doral Location, Rossi, acting at times for Leonardo, and at other times for J.M. Products, took the following steps to create the intentionally false illusion that J.M. Products was a “real customer” of Leonardo using steam produced by the 1 MW Plant:
a. Distinguishing J.M. Products from Rossi and Leonardo in communications with Industrial Heat and with others, and instructing others to do the same. See Composite Ex. 47 (Leonardo Corp. Dep. Ex. 20; Johnson Dep. Exs. 17 & 23; AEG Dep. Ex. 28; Bass Dep. Ex. 20; Rossi_00004860).
b. Holding out Third-Party Defendant James Bass (“Bass”) as J.M. Products’ “Director of Engineering.” See Bass Dep. (excerpts of which are attached hereto as Composite Ex. 48) 157:2-15.
c. Representing J.M. Products as having its own operations and a use for the 1 MW Plant’s steam. See Ex. 19 at 285:6-23; Ex. 47 at Leonardo Corp. Dep. Ex. 20.
d. Representing J.M. Products as being satisfied with the power it was purportedly receiving from the 1 MW Plant. See Ex. 47 at Leonardo Corp. Dep. Ex. 20.
e. Representing J.M. Products as being affiliated with Johnson Matthey. See Ex. 9 at 179:16-180:12; Ex. 19 at 229:21-230:5; Ex. 49 ([IH-00011231]).

73. Disputed. J.M. Products was a real customer who used steam produced by the 1MW Plant to treat platinum sponge to create catalyzers for sale. See Supp. Exs. 58, 45 at 185:23-186:20. IPH has no proof to contradict this representation. See Ex. 17 at 149:19-150:8. [sic. no page 149.] In fact, J.M. Products did use steam generated by the 1MW Plant to create platinum-sponge and/or grapheme based catalyzers for sale to Leonardo. See Supp. Ex. 59 at 214:23-215:3, 220:16-19, 225:5-10. Regardless, Defendants did not care what J.M. Products was using steam for or what the company was producing. See Supp. Ex. 48 at 196:8– 196:11. 

a. At all times, Dr. Rossi distinguished J.M. Products from Rossi and Leonardo: (a) to respect corporate formalities; and (b) because the entities and individuals were separate and distinct. See Supp. Ex. 46 ¶ 17.
b. James Bass actually served as Director of Engineering and independent contractor for J.M. Products. See Defs.’ Ex. 48 at 57:2-15 [sic. no page 52]
c. J.M. Products used steam produced by the 1MW Plant to treat platinum sponge to create
catalyzers for sale. See Supp. Exs. 58, 45 at 185:23-186:20. IPH has no proof to contradict this
representation. See Ex. 17 at 149:19-150:8 [sic. no page 149.]. In addition, J.M. Products had its own operations that
consisted of using steam heat to create catalyzers. See Supp. Ex. 59 at 214:23-215:3, 220:16-19, 225:5-10.
d. J.M. Products was in fact satisfied with the power that it was receiving from the 1MW Plant. See Defs.’ Ex. 47 at Leonardo Corp. Dep. Ex. 20.
e. Dr. Rossi made clear to Defendants that J.M. Products was a newly formed company. See Supp. Ex. 56. Dr. Rossi made clear to Defendants that J.M. Products would use Johnson Matthey as a supplier. See Defs.’ Ex. 41.

3pD: 73. Disputed. JM Products used steam produced by the Plant to create platinum
sponge and/or graphene based catalyzers for sale to Leonardo. See Leonardo Depo. Tr. at
214:23-215:3, 220:16-19, 225:5-10. Counter-Plaintiffs do not cite to any evidence that supports
the “undisputed fact” that Rossi was acting on behalf of JM Products “at other times.”
a. The entities and individuals are separate and distinct. In addition, Rossi
distinguished JM Products from Rossi and Leonardo to respect corporate formalities. See ECF
No. 238-4 (Plaintiffs’ Supp. Ex. 46 ¶17).
b. Bass is in fact an engineer and he was the Director of Engineering during his time
with JM Products. See Bass Depo. Tr. at 8:17-21, 157:2-15.
c. See ¶73, supra.
d. JM Products was in fact satisfied with the power that it was receiving from the
Plant. See ECF No. 207-47 at Leonardo Corp. Dep. Ex. 20.
e. Counter-Plaintiffs knew that JM Products would be a newly formed company and
not yet operating. See Darden Depo. Tr. at 177:1-3, 177:8-10. In addition, Rossi made clear to
Defendants that JM Products would use Johnson Matthey as a supplier. See ECF No. 207-41.

74. After the 1 MW Plant moved to the Doral Location, Johnson, acting for J.M. Products, took the following steps to create the intentionally false illusion that J.M. Products was a “real customer” of Leonardo using steam produced by the 1 MW Plant:
a. Sending letters to Industrial Heat on the amount of power J.M. Products was
receiving and offering to pay for such power. See Ex. 9 at 294:16-295:18; Ex. 19
at 288:16-18; Ex. 21 at 246:14-17; Ex. 37 at 120:15-121:1, 167:24-168:2,168:13
169:3, 170:22-171:3; 172:23-173:12, 174:17-21, 178:23-179:3, 179:16-25;
Composite Ex. 50 (Johnson Dep. Exs. 18, 32, 34, 35, 36, 37, 38, & 39; Rossi Dep.
Ex. 21).
b. Sending letters to Industrial Heat representing J.M. Products to be an “Advanced
Derivatives of Johnson Matthew Platinum Sponges.” See Ex. 37 at 123:10-124:4,
171:13-173:3; Ex. 50 at Johnson Dep. Exs. 34 & 35.

74. Plaintiffs reserve the right to dispute these purported “facts” to the extent that Defendants
prospectively assert the “facts” against Plaintiffs.

3pD: 74. Disputed. JM Products used steam produced by the Plant to create platinum
sponge and/or graphene based catalyzers for sale to Leonardo. See Leonardo Depo. Tr. at
214:23-215:3, 220:16-19, 225:5-10.

a. Johnson was told that the steam from the Plant was being utilized. See Johnson Depo. Tr. at 50:16-23.
b. Johnson did not send letters to IH representing that JM Products was a derivative of Johnson Matthey. See Johnson Depo. Tr. at 124:5-19. Johnson believed that the caption on the letters (“Advanced Derivatives of Johnson Matthew Platinum Sponges”) meant “a product that is
produced using Johnson Matthey platinum sponge, a derivative of the sponge.” See id

 


75. After the 1 MW Plant moved to the Doral Location, Bass took the following steps to create the intentionally false illusion that J.M. Products was a “real customer” of Leonardo using steam produced by the 1 MW Plant:
a. Holding out himself as J.M. Products’ “Director of Engineering.” See Ex. 9 at 227:21-228:6; Ex. 19 at 289:2-7, 291:23-292:1; Ex. 36 at 44:5-9; Ex. 48 at 158:7-159:17; Ex. 51 (Bass Dep. Ex. 28)
b. Representing J.M. Products as having its own operations and a use for the 1 MW Plant’s steam. See Ex. 9 at 228:7-24, 291:8-12; Ex. 19 at 285:6-23.
c. Representing J.M. Products as being satisfied with the power it was purportedly receiving from the 1 MW Plant. See Ex. 9 at 295:25-296:12; Ex. 36 at 56:4-15, 61:9-18.

75. See ¶ 74, supra.

3pD: 75. Disputed. JM Products used steam produced by the Plant to create platinum sponge and/or graphene based catalyzers for sale to Leonardo. See Leonardo Depo. Tr. at 214:23-215:3, 220:16-19, 225:5-10. a. Bass is in fact an engineer and he was the Director of Engineering during his time with JM Products. See Bass Depo. Tr. at 8:17-21, 157:2-15.
b. See ¶75, supra. In addition, Bass was told that JM Products was working with
platinum sponge and graphene. See Bass Depo. Tr. at 27:9-29:10.
c. JM Products was in fact satisfied with the power that it was receiving from the
Plant. See ECF No. 207-47 at Leonardo Corp. Dep. Ex. 20. In addition, Bass was told that JM
Products was working with platinum sponge and graphene. See Bass Depo. Tr. at 27:9-29:10.


76. Each of Rossi, Leonardo, Johnson, J.M. Products, and Bass intended, by the actions enumerated above, to present J.M. Products to Industrial Heat as a check on, and confirmation of, claims by Rossi, Leonardo, and Fabio Penon (“Penon”) that the 1 MW Plant was operating effectively and producing a high volume of steam. See Ex. 17 at 242:21-243:2; Ex. 47 at Leonardo Corp. Dep. Ex. 20.

76. As indicated above, Plaintiffs engaged in no wrongful activity. See ¶¶ 1-75, supra. The 1MW Plant operated as indicated in the reports that the ERV, Fabio Penon, circulated to Plaintiffs and Defendants. See Ex. 32; Ex. 36.

3pD: 76. Disputed. As indicated above, JM Products, Johnson, and Bass did not engage in
any wrongful activity. See ¶¶62, 65-75, supra. In addition, they did not represent to CounterPlaintiffs the coefficient of performance (“COP”) of the Plant. See IH Depo. Tr. at 286:20-287:5, 287:9-16, 288:10-21; Darden Depo. Tr. at 302:8-10. Lastly, Fabio Penon was responsible for
measuring and reporting the operation and COP of the Plant to Counter-Plaintiffs. See ECF No.
214 at Ex. 3, 9, 10.


77. In reality, following the execution of the Term Sheet, J.M. Products had no manufacturing process to use the steam allegedly produced by the 1 MW Plant, made no products, and had no customers other than Leonardo itself. See Ex. 36 at 31:3-25, 32:14-17, 77:16-23, 233:14-16, 237:12-15, 248:23-249:3; Ex. 37 at 19:13-21:17, 22:24-23:8, 50:16-23, 53:7-11, 198:9-11, 224:20-226:10; Ex. 48 at 71:1-15, 133:23135:12, 136:12-19; Stokes Dep. (excerpts of which are attached hereto as Composite Ex. 52) 92:6-21, 93:21-94:6, 165:1-21, 191:16-22, 199:18-200:5.

77. J.M. Products did use steam generated by the 1MW Plant to create platinum-sponge and/or graphene based catalyzers for sale to Leonardo. See Supp. Ex. 59 at 214:23-215:3, 220:16-19, 225:5-10; Supp. Ex. 58; Supp. Ex. 45 at 185:23-186:20. IPH has no proof to contradict this representation. See Ex. 17 at 149:19-150:8.

3pD: 77. Disputed. JM Products used steam produced by the Plant to create platinum sponge and/or graphene based catalyzers for sale to Leonardo. See Leonardo Depo. Tr. at 214:23-215:3, 220:16-19, 225:5-10; see also Rossi Depo. Tr. at 185:23-186:20 (relevant portion found in ECF No. 238-3); see also ECF No. 238-16.


78. In addition, Rossi and Leonardo entirely controlled and funded J.M. Products and Bass. See Ex. 17 at 207:24-209:13, 227:11-15; Ex. 36 at 17:6-16, 18:4-20, 22:16-23:4, 24:13-25:9; Ex. 37 at 56:13-15, 116:9-18, 117:23-118:1, 142:6-16, 144:16-146:14, 153:14-155:25, 158:5-11, 160:1-162:7, 229:8-18, 241:23-25; Ex. 48 at 96:13-20, 97:5-17, 98:1-3; Composite Ex. 53 (Johnson Dep. Exs. 16, 27, 29, 30, & 31). Moreover:
a. Bass was hired as J.M. Products’ independent contractor (not employee) by Rossi, and worked under Rossi’s direction. Ex. 17 at 209:14-18; Ex. 36 at 26:4-13; Ex. 37 at 59:22-60:3, 119:8-120:4, 156:1-9, 158:5-11, 162:8-163:15, 165:22-167:3; Ex. 48 at 98:1-3.
b. Johnson and Bass had little to no knowledge of J.M. Products’ supposed business and operations. See Ex. 37 at 19:13-21:17, 22:24-23:8, 50:16-23, 53:7-11, 56:7-10, 198:9-21, 217:5-12; Ex. 48 at 27:15-28:16, 41:17-42:18, 71:1-15.
c. The monthly letters to Industrial Heat prepared on J.M. Products letterhead and signed by Johnson, which reported levels of power allegedly received from the 1 MW Plant, were drafted and the information contained therein provided by Rossi. See Ex. 2 at 271:11-272:2, 276:6-23; Ex. 37 at 121:2-12, 167:15-169:8, 170:9-171:3, 173:6-174:3, 179:23-179:25; Ex. 47 at Johnson Dep. Ex. 17; Ex. 50 at
Johnson Dep. Exs. 34, 35, 36, 37, & 38; Ex. 54 (Johnson Dep. Exs. 18 & 33).

78. In exchange and consideration for J.M. Products’ sale to Leonardo Corporation of the catalysts that J.M. Products produced using the 1MW Plant steam, Leonardo Corporation paid J.M. Products’ expenses and employee/contractor income. See Defs.’ Ex. 17 at 208:3-209:21. Dr. Rossi controlled J.M. Products’ technical and product development activities, as well as the company’s day-today
activities. See Defs.’ Ex. 36 at 17:11-16, 22:23-23:1. At all relevant times, Defendants knew that Dr.
Rossi would direct the operations of the J.M. Products. See Defs.’ Ex. 36 at 34:15-20.
a. Dr. Rossi hired Mr. Bass on behalf of J.M. Products and on an independent contractor
basis, and gave him the title “Director of Engineering.” See Defs.’ Ex. 17 at 209:17-18; Defs.’ Ex. 36 at 26:11-13. Defendant IPH has no knowledge about whether Mr. Bass was J.M. Products’ Director of Engineering. See Supp. Ex. 47 at 161:7-162:8. Defendant Vaughn testified that he had no reason to believe that Mr. Bass was not J.M. Products’ Director of Engineering. See Supp. Ex. 52 at 294:20-
295:2).
b. See ¶ 74, supra.
c. Undisputed. 

3pD: 78. Disputed. At all material times, Counter-Plaintiffs knew that Rossi would direct the operations of JM Products’ facility. See JM Products Depo. Tr. at 34:15-20. In addition, Leonardo paid JM Products’ expenses pursuant to an agreement whereby JM Products would provide to Leonardo the catalysts that JM Products produced using the steam from the Plant. See Leonardo Depo. Tr. 208:3-209:21.

a. Bass is in fact an engineer and he was the Director of Engineering during his time
with JM Products. See Bass Depo. Tr. at 8:17-21, 157:2-15. Vaughn testified that he had no
reason to believe that Bass was not JM Products’ Director of Engineering. See Vaughn Depo. Tr.
at 294:20-295:2.
b. Johnson’s and Bass’ roles at JM Products did not entail the operation of the Plant.
See Johnson Depo. Tr. 234:3-15, 237:23-238:1; Bass Depo. Tr. 113:13-17. Johnson and Bass
were told what the operation of JM Products entailed. See Johnson Depo. Tr. at 50:16-23; Bass
Depo. Tr. at 8:17-21, 157:2-15.
c. Undisputed


79. In addition, J.M. Products was not an affiliate of Johnson Matthey and was not controlled by a trust formed in the United Kingdom. Rather, it was owned by a United States trust over which Johnson had control as a trustee. See Ex. 2 at 202:8-203:11; Ex. 36 at 111:11-112:7, 204:21-205:19; Ex. 37 at 14:21-15:12, 171:13-173:3, 240:7-20, 243:20-244:1.

79. Dr. Rossi made clear to Defendants that J.M. Products was a newly formed company. See Supp. Ex. 56. Dr. Rossi made clear to Defendants that J.M. Products would use Johnson Matthey as a supplier. See Defs.’ Ex. 41. J.M. Products was intended to be established in the United Kingdom, but due to high costs associated with incorporation the situs was changed. See Defs.’ Ex. 37 at 240:16-20.

3pD: 79. IH was informed that the only “affiliation” with Johnson Matthey was that JM Products would obtain materials from Johnson Matthey and process those materials. See Johnson Depo. Tr. at 237:13-22. IH knew that JM Products was a newly formed company and not yet operating. See Darden Depo. Tr. at 177:1-3, 177:8-10. Counter-Plaintiffs were informed that “the operation of [JM Products] was going to be handled by Andrea Rossi.” See Johnson Depo. Tr. 245:1-2. JM Products was intended to be established in the United Kingdom, but due to high costs associated with incorporation it was formed elsewhere. See Johnson Depo. Tr. at 240:16- 20.


80. Rossi and Third-Party Defendant Fulvio Fabiani (“Fabiani”), acting on behalf of Third-Party Defendant United States Quantum Leap, LLC (“USQL”), provided measurement data to Fabio Penon , who in turn provided that information to Industrial Heat and IPH. Fabiani also provided his own separate measurement data to Industrial Heat and IPH. See Ex. 10 at 101:12-102:3, 105:6-21, 107:4-10, 115:17-116:6, 117:20-118:8, 137:6-13, 169:19-171:20, 190:2-191:3; Ex. 17 at 16:15-17:1, 29:6-16, 37:16-38:5, 156:12-19, 178:25-180:10; Ex. 21 at 256:7-22; Composite Ex. 55 (Fabiani Dep. Ex. 3; Penon Dep. Exs. 16, 19, 21, & 26); Fabiani Dep. (excerpts of which are attached hereto as Composite Ex. 56) 38:3-18, 39:11– 40:12, 44:14-48:9, 87:16-88:23, 99:5-8, 100:8-22, 142:5-10;

80. When necessary, Mr. Fabiani transmitted to Fabio Penon data that was stored on equipment used to measure the 1MW Plant output. See Supp. Ex. 65 at 105:6-106:4. None of the data could be manipulated without the equipment recording such manipulation. See id. at 105:6-106:4, 171:2- 10. The only data that Dr. Rossi transmitted to Fabio Penon was a logbook containing performance data. See Supp. Ex. 59 at 37:16-38:5. At all times, Dr. Rossi rigorously logged information relevant to the logbook, including “water flow, the water temperature, the steam temperature, the bars, etcetera.” See id. at 132:16-19.


81. Fabiani and Penon’s measurement data regarding the 1 MW Plant’s power absorption were nearly identical. See Ex. 55 at Fabiani Dep. Ex. 3 & Penon Dep. Ex. 21; Ex. 56 at 99:5-8, 100:8-22; Murray Dep. (excerpts of which are attached hereto as Composite Ex. 57) 118:16-119:5, 147:2-13, 251:18-252:7; Composite Ex. 58 (Murray Dep. Exs. 8 & 11).

81. See ¶ 74, supra.

3pD: 81. Fabiani and USQL assert that the 1 MW Plant’s power absorption measurement data speaks for itself. The arguments made by the Third-Party Plaintiffs that the data was somehow fabricated, manipulated, incomplete or misleading is denied. Third-Party Plaintiffs fail to cite any record evidence whatsoever to substantiate their allegations and assertions that the data was somehow fabricated, manipulated, incomplete or misleading. Quite the contrary, there is no record evidence that Fabiani manipulated the E-Cat data provided to Industrial Heat. See Third-Party Defendants Statement of Undisputed Material Facts Nos. 15, 16 & 29 (ECF No. 242).


82. The power absorption data that Fabiani and Penon provided Industrial Heat and IPH reflected that during certain time periods, the 1 MW Plant was [sic, strike “was”] used more power than Florida Power and Light (“FPL”) was providing to the entire warehouse facility where the 1 MW Plant was located. Ex. 55 at Fabiani Dep. Ex. 3 & Penon Dep. Ex. 21; Ex. 56 at 99:5-8, 100:8-22; Ex. 57 at 254:13-260:14, 279:14-283:6, 367:8-368:7; Ex. 58; Composite Ex. 59 (Murray Dep. Exs. 12 & 13).

82. See ¶ 74, supra.

3pD: 82. Fabiani and USQL assert that the discrepancies between the 1 MW Plant’s power absorption measurement data provided by Fabiani and the FPL readings are not probative of the claim that Fabiani’s data was somehow fabricated, manipulated, incomplete or misleading. Fabiani and USQL deny that any data was somehow fabricated, manipulated, incomplete or misleading. Mr. Joseph Murray, a former Vice President of Industrial Heat and expert witness tendered by the Third-Party Plaintiffs, testified that he had “no evidence whatsoever” that the discrepancy between Fabiani’s power absorption data and the FPL readings were the result of manipulation. (Murray Depo. Tr. 257:8-20; 368:8-14). 


83. When providing measurement data to Penon, Rossi withheld information regarding (a) discrepancies between measurements taken from Leonardo’s portion of the Doral Facility and measurements taken from JMP’s portion of the Doral Facility; and (b) instances when the Plant had operational problems or had to be shut down. Ex. 17 at 131:9-13, 132:16-24, 250:14-251:4.

83. The testimony to which Defendants cite does not support the proposition that Plaintiffs were required to provide such data to Penon or that they did not provide such data to Penon. Dr. Rossi transmitted to Fabio Penon a logbook containing performance data. See Supp. Ex. 59 at 37:16-38:5. At all times, Dr. Rossi rigorously logged information relevant to the logbook, including “water flow, the water temperature, the steam temperature, the bars, etcetera.” See id. at 132:16-19. Dr. Rossi never withheld purported “discrepancies between measurements taken from Leonardo’s portion of the Doral Facility and measurements taken from JMP’s portion of the Doral Facility.” See Supp. Ex. 46 ¶ 20.

3pD: no response.


84. When the 1 MW Plant was sent to and then reassembled in Florida, Rossi, on behalf of Leonardo, redesigned its configuration in a manner that made evaluating its performance more difficult. For example, the 1 MW Plant was designed to produce steam, yet Rossi removed the steam trap and condensate line placed on the pipe intended to carry the steam out of the 1 MW Plant. Dameron Dep. (excerpts of which are attached hereto as Composite Ex. 60) 181:8-21, 184:23-185:15, 192:12-197:14, 198:24-201:13, 203:15-22; West Dep. (excerpts of which are  attached hereto as Composite Ex. 61) 88:3-16, 89:16-19, 91:3-25, 110:20-24, 139:5-11.

84. The 1MW Plant was sent to Florida in a container whose construction was not yet complete. See Supp. Ex. 45 at 248:6-10). When the container arrived in Florida, Plaintiffs completed the construction. See id. Plaintiffs made no substantial changes to the container or 1MW Plant, including any changes that would make evaluating the 1MW Plant’s performance more difficult. See id. at 249:17- 250:16; Supp. Ex. 46 ¶ 19. Plaintiffs did not remove any steam trap. See Supp. Ex. 45 at 248:11-19. 

3pD: no response.


85. Rossi, on behalf of Leonardo, walled off a portion of the Doral Facility for the ostensible purpose of creating a space within which J.M. Products would “operate.” Rossi, with Johnson and J.M. Products’ concurrence, thereafter prohibited Industrial Heat personnel from entering the J.M. Products side of the Doral Facility or learning about J.M. Products’ supposed operations. See Ex. 21 at 238:7-239:8; Ex. 36 at 38:3-6; Ex. 57 at 216:9-11, 314:10-13; Ex. 61 at 81:6-11, 82:14-17, 100:22-101:7, 157:23-158:2, 159:4-15, 178:16-19, 180:11-23, 181:7-9, 206:12-21, 210:23-212:3, 226:3-12; Composite Ex. 62 (Bass Dep. Exs. 25, 26, & 27).

85. Plaintiffs did not have the authority to grant Defendants access to the J.M. Products side of the Doral Facility. See Supp. Ex. 46 ¶ 18.


86. Rossi, on behalf of Leonardo, refused to grant Joseph Murray (“Murray”), an Industrial Heat employee, access to the Doral Facility in July 2015. Johnson, on behalf of J.M. Products, complied with and enforced this refusal. Ex. 19 at 247:13-16, 258:7-9; Ex. 21 at 62:19-20, 239:23-25, 240:7-241:12; Ex. 57 at 66:14-18, 130:3-14; Ex. 63 (4th Am. AACT Ex. 19).

86. See ¶ 74, supra.


87. Rossi, on behalf of Leonardo, again refused to grant Industrial Heat access to the Doral Facility in December 2015. Again, Johnson, on behalf of J.M. Products, complied with and enforced this refusal. Ex. 37 at 182:11-183:6, 184:23-185:19, 187:1-14, 228:11-229:6; Composite Ex. 64 (Johnson Dep. Exs. 40 & 41).

87. See ¶ 74, supra.


88. Once Murray gained access to the Plant in February 2016, he was promptly able to determine that Rossi’s claims about the Plant were false. See Ex. 57 at 145:5-8; Ex. 65 (4th Am. AACT Ex. 5).

88. None of Dr. Rossi’s claims about the 1MW Plant were false. See Supp. Ex. 46 ¶ 21.
Murray is not a qualified to assess Dr. Rossi’s claims about the 1MW Plant. See Supp. Ex. 66 (Expert
Report of Dr. K. Wong).


89. The scheme orchestrated by Rossi, Leonardo, Johnson, J.M. Products, Bass, Fabiani, and USQL, including Rossi, Leonardo, Johnson, and J.M. Products’ inducement of Industrial Heat to enter the Term Sheet, caused Industrial Heat and IPH to pay for (1) the Plant’s transportation to Florida; (2) the procurement and delivery of equipment for the Plant’s reassembly in Florida; (3) the procurement and transportation of personnel to assemble the Plant in Florida; (4) repairs and maintenance of the 1 MW Plant; (5) new equipment for the Doral Facility; and (6) personnel to work at the Doral Facility, including Barry West (an independent contractor), T. Barker Dameron (an Industrial Heat employee), Murray, and Fabiani. See Ex. 9 at 249:14-20, 305:21-306:5 [no 305-306 in doc]; Ex. 10 at 119:10-15; Ex. 17 at 134:24-135:4, 137:16-138:18, 141:16-142:17,  143:14-144:16, 145:11-148:24, 295:11-18; Ex. 19 at 241:19-242:8, 292:7-20; Ex. 21 at 247:1-6; Ex. 30 [originally filed under seal]; Ex. 57 at 82:21-83:8; Ex. 66 ([IH-00131928])

89. Plaintiffs never orchestrated any fraudulent scheme to induce Defendants into any action whatsoever, and Defendants had full knowledge regarding J.M. Products, its new facility, and its officer (Henry Johnson). See Supp. Ex. 46 ¶ 22; See also facts outlined in paragraphs 1-88 supra.


90. On or about September 1, 2013, Industrial Heat entered into a Technical Consulting Agreement with USQL, through its sole member, Fabiani (“USQL Agreement”). A true and correct copy of the USQL Agreement is attached as Exhibit 67.

90. – 104. See ¶ 74, supra.


91. On September 9, 2013, Fabiani executed a joinder to the USQL Agreement, agreeing to be bound by certain provisions contained therein, including Section 6 relating to “Rights to Materials.” See id.

90. – 104. See ¶ 74, supra.


92. On or around August 1, 2014, the USQL Agreement was renewed and extended. See Ex. 6 at ¶ 12. Composite Ex. 68 ([IH-00012657-00012658]; [IH-00012659-00012666]).

90. – 104. See ¶ 74, supra.


93. Also on August 1, 2014, Fabiani executed a joinder to the August 2014 extension of the USQL Agreement, again agreeing to be bound by certain provisions contained therein, including Section 6 relating to “Rights to Materials.” See id.

90. – 104. See ¶ 74, supra.


94. The USQL Agreement was renewed and extended again in or about July 2015. The renewal extended the USQL Agreement from September 2015 to March 31, 2016. See Ex. 6 at ¶ 12; Composite Ex. 69 (4th Am. AACT Exs. 28 & 29; [IH-00017713]; [IH-00017714-00017721]).

90. – 104. See ¶ 74, supra.


95. Fabiani also executed a joinder to the 2015 extension of the USQL Agreement again agreeing to be bound by certain provisions contained therein, including Section 6 relating to “Rights to Materials.” See id.

90. – 104. See ¶ 74, supra.


96. On February 23, 2016, Fabiani acknowledged that Fabiani, on behalf of USQL, would provide Industrial Heat with “all electrical and thermal data of the system throughout the period of the test” and an “official report to bring to light all the flaws and functional deficiencies of the system,” which would also mention all “plant stop periods (total or partial)” and the reasons therefor. See Ex. 70 (4th Am. AACT Ex. 21).

90. – 104. See ¶ 74, supra.


97. Beginning in March 2016, Industrial Heat repeatedly requested from Fabiani, on behalf of USQL, copies of the promised raw thermal and electrical data as well as the final report relating to the testing in Doral. Industrial Heat also requested flow meter records that Fabiani had represented he had. See Ex. 71 ([IH-00011081-00011802]).

90. – 104. See ¶ 74, supra.


98. In April and May 2016, Industrial Heat requested these documents and data again. See Composite Ex. 72 (Fabiani Dep. Ex. 11; [IH-00011074]).

90. – 104. See ¶ 74, supra.


99. Fabiani refused to provide Industrial Heat with the requested documents and data. See Ex. 19 at 270:7-22; Ex. 56 at 142:11-19; Ex. 57 at 116:18-117:3, 193:8-194:8, 352:11-353:9, 366:25-367:7; Ex. 73 (Murray Dep. Ex. 4).

90. – 104. See ¶ 74, supra.


100. The termination date of the USQL Agreement was March 31, 2016. See Ex. 56 at 82:6-19; Ex. 69 at 4th Am. AACT Ex. 29 [see at 124.30_Fabiani_email_re_contract]; 4th Am. AACT at 66; [D.E. 149] ¶ 152.

90. – 104. See ¶ 74, supra.

 

101. On March 30, 2016, USQL, through Fabiani, issued its final invoice to Industrial Heat. Industrial Heat received this invoice on April 6, 2016. See Composite Ex. 74 ([IH-00015792]; [IH-00015793-IH-00015801]; [IH-00015802]).

90. – 104. See ¶ 74, supra.


102. Industrial Heat paid Fabiani/USQL $10,500 per month for services under the USQL Agreement from February 2015 to February 2016. See Ex. 66.

90. – 104. See ¶ 74, supra.


103. Industrial Heat also paid Fabiani’s rent in the amount of $1,370 per month during the same period. See id.

90. – 104. See ¶ 74, supra.


104. Following the termination of the 1 MW Plant testing in the Doral Facility, Fabiani, on behalf of USQL, destroyed certain data and communications regarding the 1 MW Plant’s operations. See Ex. 56 at 33:10-37:12, 38:3-40:16, 46:3-8, 93:8-15 [not included in composite], 138:6-13.

90. – 104. See ¶ 74, supra.


105. Also following termination of the 1 MW Plant testing in the Doral Facility, Rossi, on behalf of both Leonardo and J.M. Products, dismantled a heat exchanger on the J.M. Products side of the facility, as well as the pipes encompassing the exchanger, that supposedly dissipated heat for 1 MW Plant. See Ex. 2 at 236:10-237:18; Ex. 17 at 271:25-274:10, 277:14-17; Ex. 36 at 81:21-82:14, 84:14-85:22, 92:19-95:6, 151:5-152:20, 251:19-252:6.

105. Undisputed.


106. Leonardo NH still exists in good standing as a New Hampshire corporation. See Ex. 75.

106. Leonardo Corporation New Hampshire merged with Leonardo Corporation of Florida. See Supp. Ex. 43.

Supp. Ex. 43 does not evidence a merger. It is merely the Florida incorporation, before the Agreement with IH was executed in 2012. The IH Agreement was explicitly with the New Hampshire corporation, and the First Amendment and the proposed Second Amendment in 2013 were also explicitly with LC NH. There is no document that has been shown regarding the alleged merger. No merger date has been alleged.


107. A declaration by John T. Vaughn (Vice President of Industrial Heat) authenticating certain exhibits to this statement of material facts is attached hereto as Exhibit 23. [this exhibit is blank]  A declaration by Christopher R. J. Pace, counsel for Defendants, authenticating other exhibits to this statement of material facts is attached hereto as Exhibit 28.

107. Undisputed.


Additional editor notes:

Exhibits 31-33, Leonardo and Rossi tax returns were not cited. Presumably they were cited or referenced in the redacted sections of the IH Motion for Summary Judgment, Section E.

How to find Rossi v. Darden documents

On LENR Forum, Zeus46 wrote:

Is there a Barry West or Dewey deposition somewhere amongst this document avalanche?

Someone might point out to this fellow that the docket reference here is annotated. On that page, a browser search for Barry West immediately pops up the deposition. It’s about 92 pages out of 235.

Dewey Weaver is mentioned in a number of annotations; the third is the deposition. Unfortunately, it’s just six pages out of what must be more than 250.

I plan to extend and expand the annotations.

I’d go crazy if not for that index. Okay, okay, I’m crazy anyway, spending days creating study documents from the Motions for Summary Judgment. But this is how I learn stuff, by often-boring exposure, I become familiar with it. (Those documents should be ready by the end of this week. The core of the Rossi study is published as a draft, but when I realized there is a good chance that whole thing will need to be rewritten, I stopped work on it and started on the IH Motion.

Rossi summary flim-flam

I am starting study of the Motions for Summary Judgment. I decided to start with the Rossi motion first, so as to avoid some level of bias coming from getting fired up by the IH Motion. At this point I am compiling a study document, a page copied from the motion, in blog format, and intended to create both internal and external links for references. And what I immediately have discovered is that every Rossi exhibit reference I have looked at is incorrect. The motion is a mess. However, what about the intentions? They may not be much better. Continue reading “Rossi summary flim-flam”

RvD: Study of 214:Rossi Motion for Summary Judgment

WORKING DRAFT

This copy of Plaintiff’s Motion for Partial Summary Judgment will be annotated with links to cited documents and other neutral supports. Comments not a part of the document will be in brackets if very brief (such as “[sic]”) or in indented italics. It is intended that this document be neutral, separate pages may be created and linked at the end for opinion and assessments. Please note any errors in Comments at the end of this page.

An error in exhibit naming (see paragraph 2 below) led to all exhibit numbers beyond 2 to be incorrect. Except for that first example (“Exhibit 2A” is linked to Exhibit 3) the links are corrected, but the text is not annotated.

Continue reading “RvD: Study of 214:Rossi Motion for Summary Judgment”

Slogging through the muck

Yesterday, prepping and uploading files for the Docket page, I was concerned I’d develop RSI. I am still annotating the docket and it will probably not be finished today. I need to stop periodically to wash the slime off my face. The deposition of Henry Johnson is particularly fascinating for a glimpse into this side of Planet Rossi. Put that together with the corporate deposition of JMP represented by Andrea Rossi, and everything else: there was only Rossi and Rossi Says, there was no independent customer, JMP was a corporate sock puppet, and …

lying liars lie. Continue reading “Slogging through the muck”

Wabbit! A hidden heat exchanger! That explains everything!

Yesterday, a blizzard of paper hit the docket, the last one (203) at 11:59 PM. We can now see more of the IH case, but my first impression of the IH Motion for Summary Judgment: I’m disappointed. Far too much of it is focused on weaker points, and … I see no reference to the lack of signed agreement to the GPT, as required clearly by the Second Amendment to the Agreement. This was the strongest point available, as far as I can tell. Rather, they focus more on the signature difficulties with the Second Agreement itself, a point which can be defeated by estoppel far more easily.

On the other hand, now we know what Rossi is claiming happened with the heat. Naturally, he lied about it on JONP, but Planet Rossi will easily forgive that. Think of the children with cancer! Nobody’s perfect!

We know it now because of the IH Motion to exclude the testimony of the Rossi expert. This expert explained that a heat exchanger in the second story of the “JMP warehouse” could have dissipated the heat, and that heat was conducted there by piping. How does he know? Rossi told him.

There is also an IH motion to sanction Rossi and third-party defendants Fabiani and Johnson for spoliation of evidence. That heat exchanger? Completely removed by Rossi et al, along with the piping for the reactor connections with the customer area. When the experts visited the Plant, nothing was there but some small pellets, Wabbit droppings, apparently, glowing with a mysterious blue light.

As well, according to IH, Fabiani destroyed all his evidentiary records and emails, and so did Rossi. Who needs this old trash? Besides, hard drive space is expensive.

I have not yet obtained the exhibits supporting the IH claims.

While IH apparently filed a motion to seal, they then filed a redacted version without waiting. The table of contents shows it as 30 pages, perhaps, but the PDF is 39 pages. Altonaga didn’t say anything about the cover, roman numerals, i through vi, and then there were two pages for the signature and statement of service. It’s squeaking, but seems to have stayed within the limit.

Rossi filed a motion to seal  (1) MOTION FOR PARTIAL SUMMARY JUDGMENT AND (2) DAUBERT MOTION TO STRIKE AND EXCLUDE DEFENDANTS’ EXPERTS WITH ATTACHED EXHIBITS

Johnson, Fabiani, and Bass filed a motion to seal  THE COMBINED MOTION FOR PARTIAL SUMMARY JUDGMENT which does not appear to have an attached proposed order…. details, details, so many details. Altonaga might just deny it anyway, from past practice.

There is also a hearing today with IH claims about discovery problems. The notice was amended with additional issues.

 

 

What if we provide a magnifying glass?

About the judge in Rossi v. Darden denying the requested page limits in Motions for Judgment.

Paradigmnoia wrote:

Dewey Weaver, I don’t suppose the font can be made smaller to fit more onto the limited page space…

Devious bastards think alike, we do. The same idea occurred to me, however, I know too much. I could not find the rule immediately, but pleadings must be in a certain form. That covers font size. I did find the federal appellate pleading rules, 14 point minimum for proportional spacing. Or 10.5 characters per inch maximum of a monospaced font. Pica typewriter, basically, 10 cps, for those who remember such ancient contraptions, if I’m correct (“elite” was 12 cps).

Footnotes might be smaller type, do I remember seeing that? I’ll come back and annotate this based on the record. I would want to look at the actual court rules. Do not violate the intention of the rules.

However, there is no limitation on type size for exhibits, and one could present exhibits in forms even more clearly than what has already been done, with various devices to compress and collapse. Look at the existing exhibits, they are highly wasteful. This would require care. Sometimes a rewritten copy might be submitted with a certification of “true copy” and a reference for verification. For example, deposition transcripts could be vastly condensed. More than one document could be presented in a single exhibit, easily.

I don’t think there is a limitation on the number of exhibits, however, or pages in exhibits. So for the Motion for Judgment and statement of facts, brevity will be the soul of wit. Continue reading “What if we provide a magnifying glass?”

And here come the motions for summary judgment

All the parties but one set (Fabiani and USQL) have filed a joint motion to file motions for summary judgment and exhibits under seal, temporarily, for two weeks.

The Parties have been under very tight deadlines in this matter to complete discovery, and are still in the process of resolving some discovery disputes. At the same time, they are working on filing their motions due this week. As such, it would be extremely difficult for the Parties also to meet and confer adequately about the specific items accompanying their motions for summary judgment that should be sealed for the long term. Temporarily sealing the motions and their exhibits for fourteen (14) days would allow the Parties sufficient time (a) to meet and confer in a meaningful manner about the specific items that should remain sealed versus those that would be made publicly available after the expiration of the temporary seal and (b) to prepare and file sealing motions as to the specific items they believe should remain sealed.

While counsel for Third-Party Defendants United States Quantum Leap, LLC and Fulvio Fabiani agreed to a prior version of this motion, counsel for Defendants was unable to obtain their approval prior to filing the current version.

So we may not see these motions and exhibits for two weeks, and some exhibits, possibly, we may not see at all. However, this may move the case forward.

Update and discussion

Summary Judgement. and see also Dispositive motion. For Rossi v. Darden, deadlines were set July 1, 2016, by the Order setting schedule.

February 27, 2017. All discovery, including expert discovery, is completed.
March 21, 2017. All pre-trial motions and Daubert motions (which include motions to strike experts) are filed. Each party is limited to filing one Daubert motion. If all evidentiary issues cannot be addressed in a 20-page memorandum, leave to exceed the page limit will be granted. The parties are reminded that Daubert motions must contain the Local Rule 7.1(a)(3) certification.

Daubert motion.

IH has filed a motion, and a second motion to exceed the page limit. Rossi has also filed a motion for an extra day and to exceed the page limit. I expect these to be granted.

There was a joint motion to temporarily seal motions for summary judgment, to facilitate filing. This would be because confidential material may be necessary for the motions, and resolving confidentiality issues may take time, whereas the deadline is today (March 21). As a joint motion that serves to expedite the process, while still ultimately publishing what can be published, with other items remaining sealed by court order, I expect this to be granted, so we will see motions filed by tomorrow. I would interpret that the Rossi request would give everyone an extra day, but I’d also advise a party not to count on that. Always file a request, don’t just assume!

So when Dewey Weaver said this would be a busy week, he wasn’t kidding. Motions for Summary Judgment will lay out the strongest aspects of a case, from a party’s point of view. What has been, until now, only known to the parties because it was disclosed in Discovery, but was not revealed due to disputes, will become public; the joint motion will only delay that two weeks. OMG! I can’t stand it! I wanna know NOW! What do you mean two weeks? That sounds like forever!

Ah, well, it’s not forever.

LENR Forum conversation has become a series of sound bites, where some users fully display their … let’s call it “position.” A place where they sit.

So the peanut gallery here has some comments. (I watched, as a kid, Howdy Doody, it may even have been the first television program I saw.)

Rionrlty wrote:

sigmoidal wrote:

This was in response to ele’s post, which I covered the other day, saying much the same:

Methinks you overestimate yourself. Your post belies any semblance of you being a ‘realist’.

1) There is no evidence that ‘they collected about $100 Million’. You made that up – no reality there. Then you say there was ‘no problem with the test’ despite the reality of abundant evidence and testimony that a) there was no agreement to a test, b) there was nothing close to 1MW being produced

2) There is no evidence that ‘$100 Million has disappeared’. That is your fantasy. No reality there.

3) There is no evidence that ‘These other technologies … have almost no commercial value but IH investors have been told they are a gold mine.” You have no evidence that IH told any investors anything about other technologies. That is your fantasy. No reality there.

4) There is no evidence that “The new technology inventors (Piantelli et. al.) have been paid … with shares of IH or other ’empty boxes'”. That is your fantasy. No reality there.

5) There is no evidence that “Darden is paying real money to actors…”. That is your fantasy. No reality there.

The realists here know one thing for sure: Your posts here have little to nothing to do with reality.

There is a saying: ‘a dog would rather be kicked than ignored’. I just kicked you with reality. Perhaps that’s what you were hoping for. You can expect to be ignored in the future.

ele’s fantasies are no less real than any other of the speculations going on here. None of us have enough hard evidence to be jumping the conclusions that most express here. Also I believe whole heartedly that forum posters are being paid, perhaps by both sides, to distribute fud and misdirection hoping to influence the public, and therefore possibly jurors, to there way of thinking. It’s a new world with the proliferation of the internet and sentiments like that are nearly impossible to repress.

On behalf of all those who are getting older, I am profoundly embarrassed. Please, my friends, someone, if you see me losing it like this, tell me; ask me to find someone I trust, and consult with them, and to listen to him or her without attachment.

Sigmoidal was frank and direct and to the point. It’s not whether he is right or wrong, but he wrote about specifics, and they were all points that could be backed with evidence or with a challenge to produce evidence. Rionrlty replies with, first of all, a firm conclusion (“none of us have enough hard evidence”), asserted without evidence or specificity (what conclusions?), followed by a reassertion of a “whole-hearted belief” in a paranoid fantasy, showing the development of such a belief without evidence (or in my experience, even contrary to evidence, and, in this case, evidence that the alleged agenda would be a major waste of money).

(At least it would be a waste of money for the IH side. Rossi, on the other hand, may believe that his future depends on his fans; however, that he might possibly have a motive does not establish that he actually paid anyone, and I’ve seen no evidence that he has. The only evidence, mostly circumstantial, is that he uses sock puppets. We might learn about that from the case. There was a claim from Dewey Weaver that there had been linguistic analysis proving it. Maybe, certainly linguistic markers can be seen in some cases.)

Dewey Weaver wrote:

RiRi – It looks like you’ve earned honorary citizenship on Planet Rossi in record time – comes with a passport and everything! This also comes with an honorary PhD in the discipline of your choice so let R know if you want to move into the sciences overnight as well. Everyday is a new day on Planet Rossi and I can tell that you’re going to be very happy there. Congrats!!

Keep the cluelessness coming – you’re making fast friends in the best of places.

Dewey Weaver continued:

I forgot to mention that an honorary JD is also available as part of the P.R. citizenship package – you’re already demonstrating Planet Rossi acumen, intellect and character – they need some fresh legal brains on top of that. I think that is the way you should go. You can instantly add value to the Planet.

I very much doubt that Dewey Weaver is “paid” to comment on blogs or in fora. That’s not his contract — which we have seen. However, he often is purely sarcastic, without providing new information. There would not be anything here to ask about, if interested in facts. Nobody is going to change their opinions in favor of IH or against Rossi based on these comments, so if he was paid to “influence” public opinion, this is not how he would do it.

This is classic Dewey Weaver banter. I do recommend understanding who Dewey Weaver is, and what he does. He is a gateway to millions of dollars in funding for LENR research, possibly. Or, from the Planet Rossi point of view, he represents the largest danger to the Energy Future of Humanity, the vast conspiracy to suppress Rossi’s Nobel-Prize-Worthy work. This is a real person, using his real name, and it’s possible to talk to him on the phone, and it’s possible to meet him. He is not an internet fantasy. He has actual experience and real knowledge, there is no doubt about that. Set aside the sarcastic banter, I haven’t seen him lie, though he, like all of us, had made some mistakes, created some imprecision in expression. What he wrote here is obviously not “fact,” but opinion or impression.

Rigel wrote:

Hi Dewey, You promised a big week, you should be sharpening your big stick.

It’s shaping up to be a big week in the lawsuit. Monday brought a flurry of paper. The big news is coming: Motions for Judgment. These have the potential to

(1) reveal a much fuller picture of the evidentiary landscape, whereas until now we have largely been extrapolating and inferring. We will get to see some much clearer, I expect.

(2) Possibly resolve aspects of the case, leaving increased possibilities for settlement.

IH Fanboy wrote:

@Dewey, Were you not warned away from here? Told to cool it? You might get your bosses upset, careful.

Concern Trolling. I can predict some of the answer, but first Dewey was not “warned away.” What he wrote, less than two weeks ago:

Dewey Weaver wrote:

I’ve been asked to tone it down on the blogs for a little while …

In response to IHFB’s concern trolling, Dewey wrote, yes, what I expected:

IHFB – I am my own boss – super busy these days. I’ll post when the ridiculousness of Planet Rossi earns some much needed love.

There was no court order, the Motion for Sanctions that referred to Dewey Weaver’s comments is still pending, last I looked. Dewey is independent, and not an agent for Industrial Heat, as such. Obviously, he shares interests with IH. They might request that he “tone it down,” but they could not actually enforce this, except by terminating the contract, and what he has done, so far, seems far from adequate to justify that. Besides, some of the other IH people might enjoy Dewey saying what they might think. They would not be responsible for it unless they authorize it.

Dewey sometimes reveals fact. IHFB obviously doesn’t want fact unless it promotes his position. He is not as fanatic as ele or rionrlty, to be sure.

SSC wrote:

Jack Cole wrote:

Given that AR tends to point the finger at others for what he is doing, one might speculate that he has been engaged in harassment, intimidation, and bribery during the course of the suit.

This is a truly absurd reasoning and totally lacking in objectivity. Too often the documents about the process have been interpreted by IH supporters according to their cheer, without any kind of detachment and lucidity. In this way they just throw mud on the protagonists …. a questionable pastime.

I did not go back to read Jack Cole in context, but what was quoted was not “reasoning.” It was a comment on human psychology, and Cole stated it accurately. If a person accuses others of X, one may speculate that the person has done or would do X, given the conditions. Cole did not claim that Rossi had bribed anyone. However, some of his legal behavior looks like harassment. So, as to SSC, clearly identifiable from contribution record as Planet Rossi, pot, kettle, black.

SSC went on:

Apparently the Ecat was an interesting object for Darden as long as he had not to pay for it ….

Following Rossi closely (this is almost verbatim from Rossi), Planet Rossi neglects that IH not only paid $11.5 million to Rossi but also much more, in claimed attempts to make devices according to Rossi’s guidance (and Rossi was quite proud that IH made the Lugano device); total investment was likely $20 million (the original stock offering) or more.

Explosions and mergers are a clear sign of the veracity of the effect, so IH’s problems were those related to control and reproducibility of the phenomenon, but its existence was not questionable.

That is nonsense. A researcher was killed by the explosion of a cold fusion device at SRI, early on, about 1990 or so. That proved? The report was that a recombiner failure was followed by sudden recombination, leading to an explosion. Chemical in nature. When I first saw Rossi demonstrations in 2011 (not in person), I thought, that could make a nice pipe bomb, heating water in a confined space. There is no question that explosions could indicate something unusual. Or not. Scientifically, one would then look more deeply, study the conditions. Explosions happen from sudden reactions that cascade rapidly. A containment failure can look like an explosion, as with some MFMP experiments. If there is substantial pressure, as in any Parkhomov replication, failure may be abrupt and catastrophic. An explosion from LENR would almost certainly be preceded by an easily-observable build-up of heat. Too much heat will destroy the reaction environment. Very difficult to get a nuclear explosion this way. The issue would be energy release, is it more than chemistry and ordinary physics could explain? Just a little chemistry, if triggered rapidly, can create a spectacular explosion!

What is being demonstrated is a lack of understanding of the field and of ordinary conditions encountered in LENR work.

The Darden email showed Darden as “encouraged.” However, Darden also clearly saw the work as preliminary. There was no analysis of failure modes, only a seat-of-the-pants description of appearance. Definitely, the explosions were interesting. But not proof, not yet, not with more work.

Yet when Darden has found advantageous to deny the effect, he has not hesitate to say that it was all a hoax.

This is, again, classic Planet Rossi. Darden has not said that. One might notice that these (trolls?) don’t cite sources. Where did Darden say that? Yet this has been repeated over and over, and supporters believe what they read from other supporters. Where is the beef?

This is what IH has claimed in the lawsuit:

9. During the same time period, Counter-Plaintiffs continued their own efforts to replicate Rossi’s purported results using the E-Cat IP that Leonardo and Rossi had provided them when they received the $10 million payment. Using the E-Cat technology Leonardo and Rossi directly provided them, Counter-Plaintiffs were unable to replicate any of Leonardo and Rossi’s claimed results or otherwise generate measurable excess energy. This led Counter-Plaintiffs to realize that there were only three possible conclusions: 1) Leonardo and Rossi’s claimed results, including the purported results from the Validation, were fabricated; 2) Leonardo and Rossi did not provide all of the E-Cat IP to Counter-Plaintiffs as was required under the License Agreement in exchange for the $10 million payment; or 3) both.

Rossi’s response to this was to point out the logical error. There are more than three possible conclusions! Of course there are, but it would be crazy for IH to list all of them. For example, IH did not list the possibility that they are lying SOBs, or that they were incompetent boobs who couldn’t boil water with a working stove and clear instructions. And none of the possibilities listed included the idea that the entire technology was a hoax, just the claimed results for a 1 MW plant, and what Rossi had purportedly showed them.

“Measurable excess energy” obviously does not include some level of heat results, but must mean “significant energy” not later found to be artifact or error.

I do not understand how so many people here continue to treat these people as if they were true gentlemen!

Honi soit qui mal y pense.

Now, given all this, I list two possibilities:

SSC is a lying troll.

SSC is an incompetent boob.

SSC wrote:

IH Fanboy wrote:

I think Darden felt like he needed to discredit those earlier tests, and the professors involved, to place IH in a stronger position before a jury with respect to the Doral test. And so it looks like he went about using his means and influence to do that.

I agree with you. IH has created the reactor used in Lugano and then has declared that any reactor made from them never worked. IH now has an interest in discrediting the test in order to continue to prove their point.

Of course he agrees. Great minds think alike, birds of a feather flock together.

However, where is evidence that Darden attempted to discredit Lugano? Where did he attempt to discredit the professors? Standard on Planet Rossi: unsubstantiated claims, passed back and forth to create an impression of obvious agreement on fact. Yet there is no fact here. IH never “declared that any reactor from them never worked.” The Lugano test is mentioned in the AACT. It is not claimed there that it did not work, but that the COP was lower than Rossi claims for other devices. And then “later criticism” is mentioned, which is just a fact. That report has been extensively criticized, and has not been defended by the scientists, other than, very poorly, Levi.

“Prove their point?” The possibility of evidence on Lugano being introduced at trial is very, very low. Only if a smoking gun were found in discovery, clear evidence of improper influence by Rossi on the Lugano test, might it, then, come up. I don’t expect that.

SSC wrote:

Shane D. wrote:

He also wrote in the report that Rossi was only there to start it up at the beginning, and came back at the end to assist draw the fuel sample, but we now know Rossi/Fabiani, were there maybe the whole time.

Being present does not mean to intervene. The Ecat belongs to Rossi and he tried to protect it from strangers (they were guests of a company where could have been spies or thieves). In fact, in the Lugano report has been written that: “Throughout the test, no further intervention or interference on his part occurred; moreover, all phases of the test were monitored directly by the collaboration.” (Lugano Report, page 7). As you can read, in this report the authors say that Rossi didn’t interfer, they did not say that he wasn’t there.

The authors of the Lugano report did not lie. Rather, they wrote things that were readily misinterpreted, in favor of creating an impression that the test was more unshakably independent than it actually was. I’d read the Lugano report many times. I assumed, from it, that Rossi was only there at the beginning and at the end. As well, I assume that the Lugano team was there for the whole time. Based on the Darden email, neither of these was the case. Rossi operates in many ways like a magician, through the direction of attention. He distracts. Something led the Lugano team to make some gross errors, some of which were quite visible, even to Darden, with minimal information, but writing after the test had started. They were immediately visible to McKubre, who wrote a very early review in which he pointed out what was missing, and also considered the heavy reliance on IR thermometry without high expertise and full calibrations to be risky. And yet McKubre’s reaction was to trust the Lugano team and to consider the results interesting. And they were interesting, but apparently it cannot be determined from the if there was excess heat, or not, but if there was heat, it was far less than they had estimated.

The Darden email makes it clearer how those mistakes might have been made; the test was basically run by close friends of Rossi, with Rossi there the whole time. Rossi had been expressing nervousness about the test, publically. He didn’t reveal that he was there. He emphasized “independent professors,” as he had done with Levi and the Ferrara test. Many eyebrows went up when the lead author, an allegedly independent professor, was Levi.

And then the Doral test …. the Agreement contemplated a truly independent test for the GPT. Not one with Rossi there constantly, supervising everything in fact, hiding the steam output, in complete control except in name. If the technology was real, Rossi was nevertheless, and repeatedly, clouding the tests, creating more and more opportunity for suspicion. Mats Lewan said it in his book, Rossi wants to look like a fraud. He actually would have a relatively sane business purpose for that.

Some on Planet Rossi have opined that Rossi was doing this to get out of the contract with IH, which would, in fact, match his prior claimed behavior with Hydro Fusion. The basis for that would be that IH was allegedly paying too little, it was worth billions when they had only promised $100 million. Those proposing this approved of it as smart business.

SSC wrote:

sigmoidal wrote:

And this thought occurred to me regarding Uzi Sha. Apparently, from googling, he either has some significant finances or knows people with significant finances in Eastern Europe and Russia. So suppose he see’s what IH is doing, and hopes that he (or his contacts) can get a piece of the action in Europe or other places that don’t fall under the IH’s territory or compete directly with IH. He might reasonably want to find ways to get resources to move LENR implementation forward (ultimately for profit). And if so, he might reasonably be in contact with Darden regarding IH’s progress.

This speculation by sigmoidal, while reasonable, is unnecessarily complicated. From the Levi Declaration, Uzi Sha represented himself and another as representing investors in Eastern Europe and Russia who were investigating energy sources for Israel. So Uzi Sha is looking into LENR, and specifically into the Rossi claims. The first contact between Levi and the two was in May, 2016, about a month after the lawsuit was filed, which was the first time that the terms of the Agreement became available. That Industrial Heat was working with Rossi was, however, widely known. So they want to find out more, so they contacted Zalli, an Israeli lawyer who may have been working with IH, that I do not  find clear, and wrote to Darden, asking for information. Darden gave them contact information for Rossi, Johnson, Fabiani, and Penon — which may be what they had requested. None of this seems unusual or odd to me. It is possible that Darden gave them more information in another email, but if it was purely in an email to Zalli, and if there was an attorney-client relationship, that would be privileged. Sha was on cc, and if so, that may not qualify for privilege. But SSC doesn’t get it:

The territories not covered by IH are covered by Rossi, then what sense would have for Uzi to contact IH?

Both IH and Rossi would sell licenses. There are three reasons to contact IH. First of all, anyone interested in serious investment in LENR would do well to at least talk with IH, it would be crazy not to. Secondly, we don’t know how much Uzi knew, he was looking into possibilities. From what Darden told Zalli and Sha, which was not merely contact information for Rossi, but also for Johnson and Penon and Fabiani, he may have wanted to know more about the test, and Darden referred him to those who were there, for the whole time. However, there is a reference to other emails, and this mail was marked confidential, and Zalli is an attorney. Naturally, Rossi is attempting strenuously to get those mails, and IH resisted, and so far seems to have been successful (but this may still be open).

This was all raised as evidence presented by Rossi that Darden was attempting to harass and threaten and bribe Levi, though Sha, and this is what is obvious: the evidence presented doesn’t show that, at all, it is paranoid, and the Levi Declaration speaks volumes about Levi. It is absolutely not a major coincidence, not surprising, that someone interested in LENR might contact IH. I would, for sure. I think Rothwell has actually visited them. I’m likely to, in the not-distant future.

Dewey Weaver wrote:

Careful SSC – you’ll want to manage your energy with all the inbound stress heading Planet Rossi’s way. Be sure to empty your spittoon frequently – that pattern is figured out as well.

I see you noticed that Jack is prescient!

 

Aw, [expletive deleted], loose lips sink ships. At least this looks like loose lips. Quoted above:

Jack Cole wrote:

Given that AR tends to point the finger at others for what he is doing, one might speculate that he has been engaged in harassment, intimidation, and bribery during the course of the suit.

I read this is a claim that there is evidence for what Jack merely speculated about. Rossi filed his Motion for Sanctions based on the thinnest of evidence. That Motion is still pending. ‘Nuff said. I didn’t say anything. Did anyone say anything?

SSC barged ahead:

zorud wrote:

Peter Gluck – what is your explanation why Rossi refuses to share his “invention” publicly or in a way that the mainstream science can follow up and replicate, and AR finally deserves what he is claimin to be awarded for (Nobel prize)?

Would you personally behave exactly like him if you would have found out or “invented” what he claims to have????

Why he should give away the discovery of the century? You would share a winning lottery ticket?

SSC follows the same black and white thinking as Rossi. First of all, Zorud didn’t really state it clearly. There are two aspects to the Rossi claims. First of all, Rossi does apparently believe that he should be considered for the Nobel Prize and that this is realistic, but the Nobel Prize is for science, which means public knowledge, not some secret. Secondly, the lottery ticket will not win if it is not open for inspection. The holder of the ticket can swear up and down that it’s the winning combination, but it will require an independent examination to actually win. Don’t wait too long! Rossi is not going to be able to bring his technology to market without major investment, and he is not going to gain that investment without truly independent testing, fully trusted by the investor, is allowed.

Rossi actually did win the lottery, that IH agreed to invest in his technology was very much abnormal. With the Hydro Fusion letter, IH knew that Rossi could not be trusted, but they decided to invest anyway. And the result? Rossi took their money and spat in their face, suing them and accusing them of fraud. When we are paranoid, it will often lead us to treat others very badly. Whether we have a real technology or not.

SSC wrote:

Bob wrote:

Everyone was led to believe, even the final report was worded as such, that Rossi was not involved in the tests except at the very beginning and end. It turns out the he conducted the entire test!

Seriously? And where is it written that he conducted the entire test? Just because Darden said that Rossi was present it does not mean that he intervened. This seems the classic “word of mouth”, where at each step the story is magnified ….

I’m not getting that SSC is familiar with the Lugano Report. There were five basic phases:

  1. Setup and running the dummy
  2. Setup and fuel the test reactor and start it up.
  3. Watch paint dry.
  4. Shut down the test reactor.
  5. Remove fuel for analysis.

From the Lugano report, Rossi was there for 1, 2, 4, and 5. What was there to do in phase 3? Effectively, Rossi ran the entire test, took every critical action. (There was a point where someone (who?) decided to increase the input power in the middle. I had assumed that they contacted Rossi and asked him if it was acceptable. But he was actually there, and might even have suggested it. Rossi’s presence could assert itself in many ways. This was not how to run an independent test, it was already pretty clear and got clearer with that Darden mail.

(Watching paint dry is McKubre’s term for the excitement of watching LENR, normally.)

SSC went on and on with evidence-free potshots, it becomes tedious.

ele wrote:

Dewey Weaver wrote:

I am my own boss – super busy these days.

Oh Ho ! Darden has fired you and you are looking for a new Job ?

I suspect, though I am not entirely convinced, that ele is Rossi, and this is a comment that Rossi might make, with his poor English and business comprehension. Dewey was never an employee of IH or Darden. He is a contractor, independent, not some flunky. And my guess is that he’s quite busy creating value for IH, finding worthwhile projects to fund. But I don’t know, and he does have other businesses.

ele wrote:

sigmoidal wrote:

Your posts here have little to nothing to do with reality.

Why are you so angry ? Maybe I have touched a nerve ?

Trolls exist to make people angry. And they often will accuse those, who show disgust for what they do, of emotional over-reaction. It’s SOP.

If you really are not connected with IH why to react so bitterly ?

On Planet Rossi, anyone who does not fawn over Rossi must be in cahoots with IH.

Mine are fantasies ? Not really.

ele does not begin with what a sober participant in discussions would do, establish what he’s talking about. What alleged fantasy? I think there were many, but this would probably be what he is now going to show evidence for.

ele wrote:

1) First of all they collected about 100 M$ saying to their investors that they bought the IP of Rossi and showing them the 1MW plant during the one year test. No problem with the test was risen about the test and even about Lugano or any other test in this phase.

2) Seems that 100 M$ has disappeared (no trace in documents) and so IH decided not to pay Rossi (losing the IP) and IH told the investors thet it has substituted the Rossi technology with others.

What’s true here? They did say to potential investors and investors that they had bought the Rossi IP. That is simple fact. They showed a few investors and possible investors the Doral plant. That’s documented. However, what did they tell these investors? By Doral, their narrative is that they knew that their own reactors did not work. When ele writes that “they collected,” he’s not precise. Who collected? He is claiming that $100 million disappeared, but where did it appear in the first place? ele’s narration is that Darden collected plenty of money, enough to pay Rossi, but hid it somewhere, or lost it (what, gambling on the emdrive? What?) and that is why he’s not paying Rossi. Wouldn’t that piss off his investors, if they invested because of Rossi?

So, back to ele’s response to sigmoidal:

For example the fact that Darden collected money (even in China) is quite notorious:

“Darden collected money” loses the fact that money was invested in companies, not handed to Darden. Darden did collect money, in 2013. In 2012, apparently Darden and Mazzarino paid $1.5 million of their own money either directly to Rossi or into Industrial Heat to secure the Agreement, and then, to pay the $10 million, they created a stock offering, this is public record, and initially raised $11.5 million. Darden and Mazzarino and Vaughn own more than a controlling interest … in what? Not in IH! In IHHI! There are many investors involved, they are all listed on the IHHI company page run by the British government. All the IH investors were bought out by IHHI, in return for stock, apparently. But then more money went, promptly, into IHHI.

There is no sign of Chinese investment in IH or IHHI. If Darden operates with China as he does with Cherokee Partners, a Chinese company would be started. Evidence of this would have been disclosed in Discovery, so we may see some of it.

e.g. http://www.e-catworld.com/2014…-center-in-tianjin-china/

The 2014 news report on which that E-Cat World story was based is dead; however it can be read on the Wayback Machine. There is nothing in that story about investment in IH or money being given to Darden. If anything, it might be the other way around. The story, in Chinese, can be read with Google Translate. There are few details, this was typical ECW spin-out.

I suspect that Chinese money tends to be smart money. If they wanted to put a lot of money into LENR — and they might — it would go into a company they can control, and that would be right up Darden’s alley, it’s what he does. This story does not at all establish what ele is claiming.

And also from financial times…… https://ftalphaville.ft.com/20…in-a-cold-fusion-company/

ROTFL!!! Here on this blog: Financial Times slapdash knee-jerk reaction passes for journalism

The Financial Times article requires registration. ele quotes:

……in May 2015, Neil Woodford invested £32m of his clients’ money in a company working on cold fusion. ……

Interesting isen’t it ?

Woodford invested $50 million (denominated in U.S. dollars) in “a company.” What company? IH? No. IHHI, which was formed in England. IHHI bought all the stock in IH, apparently for stock in IHHI. IHHI issued $50 million in preferred stock which went to Woodford. Preferred stock was about $45 per share, whereas ordinary stock was cheap. However, preferred stock has no more voting rights than ordinary, if I’m correct. So Darden et al have control of IHHI, but Woodford would not take it kindly if they tried to cheat him, I’d suspect. Pissing off people who have the kind of financial clout that Woodford had would not be a formula for living a happy life.

The initial stock offering was $20 million total. While I’ve seen no documentation showing that it was fully subscribed, I suspect that it was. And that money was spent. It did not “disappear.” People who run companies like that where money disappears can easily end up in jail, why ruin a good day with garbage like that? Darden seems to be doing quite well, before LENR came along.

IHHI has financial reports. Much of the $50 million is left, but they intend to spend it all and to need more, and they believe it is available. What came out in the discovery process that we got a glimpse of is that Woodford had committed an additional $150 million if needed.

But this was not in IH and was out of the reach of Rossi. IH probably has few assets other than the Rossi license, which is worth what?

ele is a lying troll, we can see it here.

People who are merely mistaken don’t behave like this.

This is really funny: ele wrote:

sigmoidal wrote:

This is proof positive that Darden is morally ghastly, a coward and deceiver. (But only on Planet Rossi)

Oh “Planet Rossi” Who is the guy that invented it ? NO….. It can’t be YOU….. he he he he……

On the one hand, Dewey Weaver coined the term. However it caught on and many use it. On the other hand, who writes “he he he he” commonly?

Here, ele completely ignores the actual issue, the claims that Darden avoided deposition, when, apparently, he was deposed immediately after the depositions of Fogelman, claimed by Rossi and Planet Rossi to be proof that Darden was avoiding deposition.

IH Fanboy wrote: (responding to the sigmoidal comment)

While we are all speculating, I’ll speculate that Darden ducked and dodged in his personal deposition as he was not “speaking” for any of the entities.

Actually, sigmoidal was not speculating. However, one who is speaking for the entities would not be guilty of perjury if the company had misled him or her, because the representative is not necessarily speaking for themselves, but as informed. If such actually knew and said that they did not know, that would be perjury. However, if Darden were to say “I don’t know,” and actually knew — and this can often be shown — that would be perjury and he could go to jail. It is much easier to “duck and dodge” as a 30(b)(6) deponent, but it can harm the company at trial. Darden is a personal defendant as well as being an officer of the companies. He is definitely in the hot seat in a deposition in this case. He would, I’m sure, be very careful. Sitting in a deposition, facing lawyers who are not your friends, is no time to get chatty.

sigmoidal answered brilliantly.

About the IH appeal from the Magistrate’s decision about the DRV (Dewey Weaver) privilege issue, (which has now been scheduled for hearing)

IH Fanboy wrote,

Dewey says he is his own boss, so not sure how IH’s argument that he is an agent holds up. Which means his emails ought not to be privileged. Maybe Dewey should have heeded IH’s advice and stayed clear of here.

A breath of fresh air compared with ele. However, still clueless. Perhaps IHFB should read the argument IH has presented and the exhibits. The Magistrate was apparently confused by this “agent” issue, because, as pointed out, there was a conflict in the evidence on that. However, this was actually moot, because the evidence is that Dewey had his own agreements with the attorneys in question. This, then, did not depend on agency.

After it was revealed that the Judge had denied the motion to seal,

Dewey Weaver wrote:

This Judge is tough! Going to be some good stuff in the exhibits tomorrow night.

Maybe. Actually, the Judge’s Order was procedural, and I’m not sure I agree with it. The Seal requested was temporary, to get the process moving. She will now, if the procedure she reminded them of is used, need to review, in short order, many motions to seal. Maybe her way is better, I don’t know. She is the judge, which means she gets to decide, and I doubt that anyone will appeal this.

So if I read this and the parties’ intentions correctly, we will see a pile of motions to seal tomorrow, not the Motions for Summary Judgment, but they will exist as clerk-sealed until she rules on each one. However, a party might decide to file without requesting seal.

Fair and balanced jury? Yeah, right!

That’s a Planet Rossi trope. Recent Planet Rossi comments have explained that internet discussions are being warped by attacks against Rossi by “paid” advocates for IH. When it is pointed out that a for-profit venture capital company, operating mostly with high privacy, would not pay for this, because they gain nothing from Rossi looking like he always apparently wanted to look (like a con artist or fake), it is then asserted that the purpose of this is to influence the jury in Rossi v. Darden.

Mostly this is being advocated by people with no deep knowledge of the jury system and how it works. A surprising possible exception is rionrlty, an American, using his real name, with apparent experience as a real estate broker, now retired. With an assumed long career, one might think he’d have more experience than to assert what he’s asserting. I will here examine what is being said about the jury selection process and rules, and provide sourced information about this.

Bottom line, not only is it unlawful to attempt to influence the jury selection process or to present “information” to the jurors outside of the court process, but it is also unlawful for the jurors, who are under oath, to lie about their experience and knowledge of the case or case issues, and they will be asked. It is also unlawful for them to violate the rules, which include any attempt to obtain outside information about the parties or issues, that they don’t already have and admitted having. It is not automatic that a juror would be excused if they knew something about the case and the parties; but it is a factor that the judge and attorneys would consider.

In the end, the goal of the Judge will be that the plaintiff(s) and defendant(s) agree that the jury, as selected and having been questioned, under oath, about all this, have been fairly selected and will be fair and impartial. Continue reading “Fair and balanced jury? Yeah, right!”