Fabiani on the hook again?

IH just filed a motion for leave to amend their AACT, a fourth amendment (as proposed) They attach exhibits, 28 and 29, that show that the Fabiani contract with IH was explicitly renewed, contrary to an apparent claim or misunderstanding of non-renewal that was used by the Judge to dismiss Count V, against Fabiani for Breach of Contract.

(Thanks to Eric Walker for posting Exhibit A, it saved me a few dollars. Every little bit helps.)

In other documents, Rossi was ordered to provide discovery to which he had objected. A deadline of January 17 was provided, even though the order was dated January 27. Presumably the order was issued in court at the hearing on January 10, so Rossi had a week. Rumor (from Dewey Weaver) is that Rossi provided massive discovery recently.

I will be reviewing this in detail. One order requires him to provide all test data for his devices:

Plaintiffs’ production of documents in response to Request No. 1 shall include
documents relating to testing performed on the E-Cat or using E-Cat technology (or technology related to or derivative of the E-Cat technology), including testing performed subsequent to February 15,2016.

That could include Quark-X, or was Quark-X entirely independent, a completely new discovery or invention by Rossi? (Unlikely.)

Mr. Rossi not gonna like this. (Even if it were independent, it would likely be “competing technology” which is covered by the Agreement. But it is unlikely to be completely independent.) If he does not disclose, and if the rest of the case is not clearly resolved, with the Agreement invalidated, there could be further legal action.

Speculation: Rossi will withdraw his lawsuit and attempt to settle the countersuit, claiming that he needs to focus on the new technology. If IH does not agree to abandon claims that Quark-X is related and covered by the Agreement, Rossi will move all operations to Sweden. IH might then sue him there.

The suit against Penon has been abandoned, apparently IH did not perfect service. However, they could sue him in Italy, and claim as damages all Rossi-related costs, not just what they paid him.

Perhaps he might join Fabiani in Russia. If Sweden doesn’t work out, maybe Rossi, too.

An anthem for Planet Rossi:

Are we having fun yet?

Lenr-forum commentary:

LENR-Calender wrote:

Fabiani’s new contract (exhibit 28) was supposed to start in September 1, 2015 and end on March 31, 2015 (sic)

Maybe the e-cat also acts as a time machine?

This is highlighted in the document. It is an obvious typo. To nail that, IH added an email from Fabiani that clearly understood the agreement as extended until 31 March, 2016.

sigmoidal wrote:

122 – IH gives Notice of Filing. (The filing is contained in 122-1)
122-1 – IH’s Proposed Order on Discovery (this is what they hope the court will order)

What I imagine happened here is that the Magistrate asked Pacer to write the order. The Notice says “In compliance with the Court’s request.” This was the outcome of the Hearing held on January 10. At that hearing, which then explains the mystery below of an apparently retroactive order.

A point of interest here is that IH emphasizes in 4)
… [Rossi] shall include documents relating to testing…, including testing performed subsequent to February 15, 2016.
I mentioned this in an earlier post – that Rossi seemed very resistant to providing data after mid February.

123 – Court’s actual Order on Discovery. The court grants IH’s proposed Order in it’s entirety, adding an additional requirement that IH provide ‘Bates numbering’ (which is simply adding a unique page number to each page provided), in their responses to Rossi’s interrogatories 8,9,12,13.

It’s a bit strange to me that the court order was made 1/27/2017 stating that Rossi produce the answers ‘by January 13, 2017’, but so it goes.

The order was issued verbally on January 10, apparently. This was just cleanup. Relevant to the January 10 hearing, the compilation here has:

01/09/2017 0105.0_Discovery_Hearing_Notice
== 0105.1_Rossi_Response_to_IH_requests
01/10/2017 0107.0 Minute Entry (no doc)

PAPERLESS Minute Entry for proceedings held before Magistrate Judge John J. O’Sullivan: Discovery Hearing held on 1/10/2017. Total time in court: 45 minutes. Attorney Appearance(s): Christopher Rebel Jude Pace, Christopher Martin Lomax, John William Annesser, II, Brian W. Chaiken, Erika Handelson, Christopher Perre. (Digital 10:05:32) (cg1) (Entered: 01/10/2017)

Turning to Doc 124, IH is requesting permission to amend the AACT. My sense at this point is that if the Judge does not grant this permission, IH may have an appealable issue. I intend to review the arguments presented and the Motion to Dismiss order, to understand the etiology of this mess.

Because they attached the proposed amended AACT as “Exhibit A,” and then all the number exhibits, the PACER attachment number is bumped up one from the Exhibit number. Nuisance.

If the IH Motion is granted, Bass returns to being a defendant along with Fabiani.

I was, in fact, surprised at the dismissal without opportunity to amend being explicitly given. I agree that it could be argued that Bass, as an example, did not do actual harm to IH, except that this, absent a clearer study of evidence, is unclear. Bass participated in a scheme to deceive IH, to encourage them to continue to trust that there was a real customer (and that other causes of suspicion were misleading, perhaps).

sigmoidal wrote: 

It appears that Bass is no longer being sued by IH.

Bass is listed as a defendant on page 28 of Exhibit A, and again as a Third Party Defendant, Paragraph 21.  Bass is included in Count IV only, the FDUTPA count, Paragraph 140.

Eric Walker wrote:

Curious whether someone familiar with litigation in US federal courts knows something about the amount of evidence that is typically filed during this phase of a trial. Is there a strategy to use the minimum amount of evidence necessary to sustain a set of claims?

I won’t call myself “familiar.” I have never read a case in such detail before. Having said that, Jones Day, presenting profuse exhibits, seems to be way overkill compared to what is legally necessary, and then, sometimes, understated as to what might be legally necessary. It is enough in the pleadings to allege evidence, the exhibits are not a formal entry into the trial record. This is not yet a trial, it is setting up conditions for a trial. The pleadings must be clear as to specific allegations that can possibly be entered and established according to the rules of evidence. Rossi, for example, has alleged fraud on the part of IH, but based entirely on his own idea or claim that he was misled. That was considered enough by the Judge to allow the fraud claim to stand, even though it is quite unlikely that it could be established in the trial. Maybe, in discovery, Rossi will discover a smoking gun.

This makes the dismissal of Fabiani difficult to understand. I review this on RvD: dismissal of 3rd party claims.

Conclusion: Given the pleadings, in which IH missed the significance of the Fabiani’s lawyers’ objections and responded unskillfully, the Judge was correct to dismiss Count V given what she was presented. However, if she erred, it would be in not inviting IH to correct the defect, which may have been possible with or without a writing. The problem was that they asserted failure to perform specifically on an expired contract, instead of alleging a contract in force (even if verbal).

There were probably three contracts, and IH pleadings assumed only one. They would be the original contract, one probably renewed in September, 2014, and then the renewal in September, 2015, which we have now seen. They simply talked about “the USQL Agreement,” without being specific about which one (I.e, for purposes of the counterclaim, the USQL Agreement effective September 1, 2015.)

The Fabiani attorney nailed them on this. He was actually quite clear.

Jack Cole wrote:

A couple of details that I note. Darden’s signature is not on Fabiani’s contract. Secondly, the order on discovery has the wrong date that the materials are due. The date the materials are due is prior to the signing date.

That is simply a copy. It evidences an actual agreement, as shown by the behavior of the parties. IH paid Fabiani as agreed (all except for the end, when Fabiani was clearly failing to perform). Courts see little defects like this all the time. It is quite possible that there were two copies of the Agreement, and that the other copy has all signatures. This all gets ironed out when evidence is presented, formally, in court, there will be sworn testimony about it, which is evidence in itself.

As to the due date for discovery, the Order Jack is referring to was issued in court on January 10, apparently, and the due date was three days after that. Yeah, it looks weird, but that’s all. I don’t know why it took so long to get the draft Order presented … but it did. Judges and Magistrates will do this. Most Orders are written by the attorneys for the parties. The Judge or Magistrate approves and signs, or doesn’t approve, or may write something of their own.

Wyttenbach wrote:

sigmoidal wrote:

Stop spreading FUD. Your responses and conclusions are incorrect, non-sensical and incoherent.

May be you didn’t notice the wrong numbers on the document header and the title inside…

This is classic Wyttenbach. W. is unusual because he is a real-name user who is effectively a troll. Notice the lack of specificity. Wyttenbach has a PhD in mathematics. I once pointed this out on LF, and this was considered “outing.” But it is easy to find. What I see with W. is a not uncommon pattern, someone with high success in an academic field, or at least with credentials, who is socially disabled, apparently unable to interact with normal socialization. “Maybe you didn’t notice” is a veiled accusation. What is he referring to? What “wrong numbers”? He doesn’t say.

Looking back at sigmoidal’s post, it has this:

(Your reference to 124-27 is a picture of the Doral warehouse.)

One might assume that W. would know how to make a clear reference. To support a point, he cited “124-27.” In these discussions, that would normally be taken to refer to Doc 124, attachment 27. However, W., intended, instead, Doc 124.1, paragraph 27. The reference was flawed. Doc 124 has no paragraph 27, and what W. quotes (below) is from Exhibit A, the proposed AACT. There is no “wrong number” except in W.’s original post. The W. type of troll attributes their own error (or imprecise language) to the misunderstanding of others. Continuing W.’s post:

Here the citation of IH’s claims of doc. 124.01

Here he correctly cites the document he is referring to. It is the original Answer. Previously he had cited it as “124-57.” He proceeds to ignore the actual critique from sigmoidal, which was of his statement: “1 IH now claims that the original 24h validation test for the 10 mio. [million dollar] Payment has been done incorrectly.” signmoidal is pointing out that this is not new, as W. implied by “now.” Continuing:

57. Defendants admit that from April 30 to May 1, 2013, Penon conducted measurements in connection with the Validation test of certain E-Cat reactors operated by Plaintiffs. Defendants deny the remaining allegations in Paragraph 57. The Validation test did not follow the Validation protocol as set forth in the License Agreement and the First Amendment (the “Validation Protocol”). For example, the Validation Protocol required 30 E- Cat reactors to be operated as a unit (“Unit A”) for twenty-four consecutive hours. However, only 18 E-Cat reactors were operated as Unit A during the testing period. In addition, the Validation Protocol required the flow of heated fluid from the E-Cat reactors to be measured during the Validation test. However, these measurements were not taken during the Validation test. Furthermore, the Validation Protocol required that twenty-four consecutive hours of testing be done on Unit A. However, less than twenty-four consecutive hours of testing was done on Unit A. There are various other examples of the Validation Protocol not being followed during the Validation test.

There is no claim there of a “payment being done incorrectly.” It is commentary, later analysis, that the test was not done according to the declared protocol. Whether or not to pay was an IH choice. They elected to set aside the problems, some of which they knew at the time, and to go ahead with the plan of the Agreement. Some of the representations made by Rossi at the time, IH claims, were not factual, and that part they did not necessarily know.

The above quotation is identical to the original Answer.

The rest can be read in the following (..58..) paragraphs where IH confesses that they have been fooled…

They do not actually “confess” that. What W. does is to project implications on text, the implications being his, not actually in the text. Basic epistemological error. Pure trolls may do this deliberately. Probably W. does it because he is in some kind of fog. The Answer, here, does not mention being “fooled.” We may, from other claims, infer that IH chose to take Rossi’s word for certain alleged facts. That choice does not necessarily involve being fooled. It may have been an eye-wide-open choice, aware of risks. In such a choice, one is not taking responsibility for actual fraud or deception, the other party remains accountable. If they actually knew that the representations were false, if it was not merely some speculation, the matter would shift. W. appears to be assuming actual knowledge.

I guess, that after reading this, you understand something more about business and how it should not be done… Paying for an invalid test…

W. has missed the arc of this case. IH, by going ahead, “crushed the tests,” obtaining the information they had decided was necessary in order to work for LENR development. They were then rewarded for this by Woodford, who gave them $50 million in May, 2015, and who apparently committed, as needed, $150 million more. IH’s implied stupidity here led to a $200 million possibility. But, of course, according to the self-imagined business expert, it was foolish. My question: how can I be foolish like this?

I am actually trained in this. Part of the training was to do one “unreasonable” thing a day. What happens when one does this? Hint: the sky does not fall. “Reason” is not what it’s cracked up to be. It’s a useful tool, but given the driver’s seat, it will drive us right into the ground, and certainly it cannot create new possibilities, because almost by definition, they are “unreasonable.” What IH did was obviously, by ordinary thinking, “unreasonable.” Yet … $200 million … maybe they are crazy, all right, crazy like a fox.

quote has been attributed to Stephen Hawking. Source unknown.

sigmoidal pointed out much of the above. Reality 1, Wyttenbach 0.

THHuxleynew also chimed in.

Wyttenbach, undeterred, continued with invented FUD.
Honi soit qui mal y pense.

Dewey Weaver wrote:

When Rossi says, on JNOP, to pay no attention to this round of exhibits and wait until the end of the trail then you know you need to pay attention. I’m surprised that 124-06 (Exhibit 5), a letter from Joe Murray to Penon, has not gotten some attention from this crew this weekend.

124.06 is, as Dewey points out, the infamous Exhibit 5. It is not new, nor are any of the exhibits new except for 28 and 29 (now -29 and -30, but which may become the new AACT -28 and -29. There has been no special occasion here to consider Exhibit 5. I have not downloaded duplicate exhibits from PACER, and they are referenced here from the original publications in the Docket. So this is 29-5.

What’s going on, on JONP?

January 29, 2017 at 8:31 AM

Dr Andrea Rossi
All the papers deposited in Court recently are very difficult to be understood: can you explain what is going on?

Andrea Rossi
January 29, 2017 at 9:00 AM

I strongly suggest not to lose time reading documents produced in this preliminar period, because it is like to understand a big painting observing one square centimeter of it here and there across the canvas, abstract from the global context that gives the meaning to every particular. What is really going on and the related situation will be understandable only at the end of the trial. Persons talking of it now are just displacing air with their tongues.
Warm Regards,

This is pretty funny. Yes. Understanding what is going on is not necessary easy, to someone who is unfamiliar with the “big painting.” If I dove in now and just read the “recently” deposited documents, I’d be confused myself. But I don’t. I have read all the documents, often more than once, and I know much of the historical context. Rossi seems to think, above, that he understands. Perhaps he does, but, if so, he has been misleading, and his past efforts to confuse others have become clear in some of the documents.

Full understanding will not necessarily arrive at the “end of the trial.” Rather, likely, narrow legal issues will be decided by a judge and, some of them, by a jury. While we can never be sure that Rossi has no hidden Wabbit, there is no apparent evidence, so far, that he does. IH has been very open about much of their evidence, Rossi has been, effectively, secretive. However, in the actual trial, he must have disclosed whatever evidence he has to IH, or it will be excluded. He cannot spring a surprise at trial and get away with it.

Watch for a Motion for Judgment before the trial. The basis is obvious, but until Discovery is complete, the Motion might fail. If what appears to be the case (by strong inference) actually turns out to be the real situation, Rossi v. Darden will be dismissed in toto without a trial. However, the counterclaim will still stand, so unless there is a settlement, there will still be a trial, but no longer one in which Rossi could possibly win anything.

Dewey Weaver wrote:

Rossi has not offered to buy the IH license back but is welcome to do so at full price including $1.5M for the 1MW container and all legal expenses incurred by IH to date.

Aw, Dewey, this kind of comment in the past has created much confusion, as I recall. You are not a “representative” of IH, so this is not an offer, though it might be an indication. IH has spent much more than $11.5 million on the Rossi technology even before legal expenses. However, to settle the case, IH might well agree to some settlement. Whether or not to return the License to Rossi for compensation is a decision that is not completely obvious to me, because of the hedge value that the License has. Rossi has previously faked failure — as his explanation — to get out of a contract. My sense at this point, though, is that the hedge is not worth full price ($10 million). Selling the reactor back for $1.5 million, but what reactor? There are two or three. It would have been quite sensible for Rossi to buy back the reactor(s) and then sell it or them to someone else, if they actually works as he claims. But Rossi does not operate on “sensible.”

Zephyr_AWT wrote:

OK, but do you have some source for it? The question also is, if IH owns the license before paying full price of it and successful ending of Guaranteed Performance Test.

Otherwise the Guaranteed Performance Test would have no meaning – but the answering of this question would require the deeper experience in law, which I haven’t.

Z’s “it” is unclear. This is an unsourced statement from Dewey Weaver, an IH insider but not a representative. So he is his own source. However, Z has another question, does IH own the License already? Yes, they do. Source? The License Agreement. The Agreement was partially binding before the Validation Test. After that Test and with payment of the $10 million, IH clearly owned a License for the territory, which is about half the world. There was then an additional contingent payment. There is no provision in the Agreement for automatic cancellation of the License for nonpayment, and such would likely be considered inequitable anyway. Rather, if the payment were to be found to have been due, it would simply be a debt. The License was not declared as security for the debt.

The GPT was independent of the License, even though the Agreement calls the GPT payment part of the full price. All nonpayment would mean, then, would be that the full price has not been paid, but only part. A court could decide that nonpayment was inequitable and that the License should be returned (it seems possible), but would probably then want the $10 million returned (otherwise it would be inequitable in the other direction).

In California, as I recall, if a party makes a firm offer to settle that is refused, and the later decision is not more favorable to the refusing party, costs may be awarded to the prevailing party even if otherwise the party would have to bear the costs of “winning.” I don’t know about Florida. To my knowledge, there has been no binding offer to settle. See a discussion of the California law.

There is a Florida law. It is different from the California law, in my opinion less effective and more likely to cause harm. However, it might still be used by IH. The possible harm to the offering party is caused by a 33% margin required for the provisions to be effective. I have not examined the various contingencies. If someone receives a settlement offer under this provision, obtaining the best legal counsel would be strongly advised.

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Author: Abd ulRahman Lomax

See http://coldfusioncommunity.net/biography-abd-ul-rahman-lomax/

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