On LENR Forum, oldguy wrote:
And how would estoppel work if there are three parties that were to agree to any changes. It is unclear that Ampenegro gave any indication of approval of any changes to the agreement.
An essential legal fact in Rossi v. Darden. There is no doubt that Ampenergo (AEG) deliberately rejected the Second Amendment. This is so clear that it’s a bit of a tragedy that the Judge did not take this on board and rule for Summary Judgment on what depends on this Amendment (like the entire initial Rossi case). However, that’s not the question here.
The Agreement was quite explicit about full agreement of the parties to amend it, and Ampenergo was a party. Payments were due to AEG per the separate agreement between IH and AEG. As a very interested party, then, AEG would have had standing to sue IH for failure to pay the $89 million, if they believed it was due. It appears from the record that they did not believe that, and, unlike Rossi, they are not greedy and insane. They obviously trusted IH, and do not believe that this trust was violated.
Rossi wrote in an email to Cassarino (AEG) that the Second Amendment was “cancelled.” That was Rossi-speak, commonly imprecise. It failed, it was a draft that was never completed. It could have been completed at any time, it did not have a time limit in it. It did contain two signatures out of the four required: a signature for IH, and of Rossi, who neglected to sign for Leonardo Corporation. That latter defect would have been of little consequence because, with everything else in place, a party will be estopped from asserting some minor technical error, and given who Rossi was with respect to Leonardo, Lenardo would not have later been able to successfully claim, “No we never signed it. Go after Mr. Rossi personally.”
(Notice how Annesser and Chaiken have argued quite the reverse with respect to Cherokee. The Agreement did not contemplate a relationship with Cherokee, and was obviously created as an Industrial Heat agreement to avoid that. Darden was not about to approve an agreement with a contingent liability of $100 million, which is about four times the standard Cherokee investment in a project, and this project was far outside of normal Cherokee investment. Investors could have sued them. The agreement contained an integration clause, but that didn’t stop Annesser from asserting the legally impossible, and it worked, because their pleadings had asserted or implied that Cherokee was a sole owner of Industrial Heat, which was never true, it was only true that officers of Cherokee were involved.
It was also possibly true that Darden and Vaughn assured Rossi that if the payments became due, they would be able to raise the money. After all, look at Cherokee! Rossi tends to interpret everything as what he wants it to mean, but any attorney would have told him that, no, read the Agreement. There is no Cherokee guarantee unless you have it in writing. Oral representations (which can easily be misunderstood or misremembered) are not valid for actions to take place more than a year into the future, and an integration clause makes them explicitly invalid from the start.
We also know that the Second Amendment was a draft only, because the date was never filled in, and there is the matter of the “Six Cylinder Unit,” obviously an idea from 2013.
So, what the Second Amendment draft shows, however is that IH was willing to set aside the fixed timing of the original License agreement. To use technical language, that agreement was really dumb ab initio, the problem was easily anticipated. My assumption is that Rossi wrote this; regardless the stupidity is moot. The timing failed. At that point there was no liability of IH to pay the $89 million.
However, because there was obviously a (proposed) agreement between Rossi and IH, and because IH and Rossi were free to make separate agreements (and did, vide the Term Sheet with JMC), and if the conduct of the parties shows that they behaved as if the Second Amendment were valid, it is possible that IH would be estopped from claiming that there was no agreement. This is the legal theory Annesser is operating on.
The evidence of such an agreement is very thin. Key question: what were the terms of this unwritten agreement? When would the Guaranteed Performance Test begin? The Second Amendment was explicit that it would begin as agreed upon in writing by all the parties. If we are going to reduce the Amendment to a separate agreement between IH and Rossi, no such written agreement has been found. It appears to me that Rossi decided to create a GPT, but to avoid asking IH to agree. What he did was to set up some of the conditions of a GPT: an installation that would monitor the operation of the Plant, as supervised by a person who was previously the Engineer Responsible for Validation, and it would last, as a test, for 350-400 days. To encourage IH to agree to this, Rossi lied about the “customer,” repeatedly and plainly, it is not deniable. He avoided any confrontation over “GPT,” but blames IH for not objecting to a “GPT” to what he did not claim until much later.
He attempts to convert a lack of objection, when the issue was not ever raised, into an agreement to accept.
Rossi has diligently searched for and has found evidence that IH knew that a test was under way, and apparently called it a 350 day test in one email. This was not an email sent to Rossi, and he could not have relied upon it. The existence of correspondence between Darden and Penon over a test protocol shows that Darden knew that there was a test aspect to Doral. But a “test aspect” does not equal “GPT.” The conditions of a GPT were never anything other than explicit, and a major one was agreement of the parties as to start date (which would allow them to effectively object to any aspect of a proposed GPT that was not satisfactory to them.) IH would have reasonably believed that they were adequately protected.
I don’t know that anyone anticipated just how insane Rossi was. The steps IH took to protect themselves appear to be reasonable within ordinary business practice, even dealing with frauds. In my study of the evidence, it appears to me that Rossi has perjured himself, directly contradicting clear documentary evidence. That’s insane. It is a puzzle that Annesser and Chaiken have allowed this, and may speak volumes about what those two attorneys are up to.
So, in theory Rossi and IH could have separately agreed on an equivalent to a GPT. If so, AEG would have rights, pursuant to the original Agreement, if a payment to Rossi were of the nature of royalties or licensing fees (and it is easily arguable that, if this was the equivalent of a GPT payment, that AEG would have a right to payment.)
However, there is a lack of evidence that there was such an agreement, only some vague noises or hints. This was not a GPT as contemplated. In the contemplated GPT, IH would have physical control of the reactor. It is not clear if Rossi would have any right to touch it, but if his being kept away from the reactor could have arguably caused it to fail or to not function after a failure (or at all), he could have argued, fairly, that he should have the right; IH would then have, I assume, provided for tightly managed “interference.” Really, to be careful, Rossi would have not touched the controls, but would have instructed someone from IH what to do (and this is how the Lugano test might have been accomplished to keep it relatively independent).
It would have been insane for IH to agree to what Rossi actually set up as a “GPT.” What evidence exists shows that IH was reluctant to directly challenge Rossi, preferring to follow a long-term strategy, a necessity ab initio, of “give Rossi what he wants.” Without that strategy, there would have been no continued agreement, it would have failed in 2013, if not earlier. IH would not have answered the critical questions that they had: whether or not, in spite of all the obvious appearances, Rossi actually had, underneath the blatant bluster and deceptions, something real.
They did not find out with complete certainty, that could be impossible (unless we learn more than we presently know). Even if Rossi totally faked the GPT, he might have had something previously, Storms has opined that Rossi had something, and lost it, which, given the history of LENR, has to be considered possible. He kept trying to improve it! This is not science, it is rather primitive engineering. Given something as poorly understood as LENR, one would properly hold on to positive results until they were thoroughly documented and examine, not keep working to “improve” them before knowing in detail their reliability (measured!) and such matters as ash (if the heat is as Rossi claims, there should be abundant ash, increasing quantitatively with accumulated energy release).
(That error, though, is common in the history of LENR.)
However, IH created enough evidence by the interaction to know, and for the world to know, that Rossi is utterly untrustworthy, that he has fooled scientists into issuing reports that are blatantly in error — and that cannot be published under peer review. Given that Rossi’s claims were entirely outside the envelope of what existed before, there is no reason to believe him, and to have high skepticism of any test where he was present and at all active. We know without doubt that Rossi has faked tests. IH took a risky path, seeking to develop deeper knowledge, deeper than simply repeating fact or innuendo about Rossi’s past. They gained that knowledge, and it is now available to the world, regardless of the outcome of Rossi v. Darden. No sane investor will touch Rossi with a ten-foot pole, not because of any alleged IH campaign to denigrate Rossi, but because of his own very obvious actions. It was actually obvious from his Complaint: his attempt to pierce the corporate veil would put off any investor using corporate forms for liability protection, his inclusion of Cherokee as a defendant, the major activity of Darden and Vaughn and their cash cow, and his willingness to file a blatantly deceptive Complain and to tenaciously defend the indefensible in it, and his claim of fraud based only on an alleged failure to pay and Rossi suspicion, all would mean that an investor would be risking more, perhaps much more, than actual payments, starting with high legal fees to defend against and insane and highly persistent inventor.
There is more in the crazy results from the “ERV,” the claim in them of steady power of 750 or 1000 KW, without any evidence of necessary heat exchange (and Rossi’s public deceptions about this, until he finally claimed a “second floor heat exhanger”). If I saw that a jury was convinced by this, I would still think it ridiculously unlikely, given all the known facts.)
Of course, I have not yet seen the presentations in a trial. Nobody has. Lawyers will point out that everything could shift, which is true. But we have seen the better part of a year of diligent efforts to discover and present evidence for the Rossi case, with the best result, from a Rossi point of view, being that the contrary wasn’t considered proven yet. Rossi will have to prove his claims to the satisfaction of a jury to prevail on any point. The motion re spoliation failed, but a jury could still decide spoliation, and one of the first words I heard from an attorney about this cases was one word: “spoliation.” This was about the removal of the test instrumentation by Penon.
I can see many possible Jones Day errors, such as not vigorously objecting immediately to that spoliation, such as not requiring Rossi to keep all evidence in place (like the piping or anything else necessary for reactor operation) — or to allow full documentation by IH if anything relevant was to be removed, and, in the pleadings, failing to lean on the absence of the written agreement required by the Second Amendment. They barely mentioned it. That was a much stronger and clearer argument than the matter of signatures and “Six Cylinder Unit,” which can easily smell like technicalities, readily estopped. Written agreement was fundamental.