Rossi answers the countercomplaint


This was three days late, but that is now legally moot. (But see Better late than never, or better let sleeping dogs lie?)

I have compiled a merge of the IH Counter-Complaint with the Rossi Answer paragraphs, so that they may easily be seen together, and I added links to exhibit files, again for convenience. This now outlines the counterclaim case.

Those who have been looking for a Wabbit won’t find it here, the Answer is mostly formulaic denial. (But something is described below that is truly remarkable, amazing that Rossi counsel let this by. It’s not a Wabbit but a Toad, as in “I toad you so.”

There are some claims of interest, but almost no specific evidence is indicated. There are no attachments.


I woke up this morning realizing that, indeed, there is no Wabbit that I’ve noticed so far, here, but a Toad. My emphasis and insertion:

81. Plaintiffs admit that certain visitors were permitted access to the E-Cat Plant in Doral, Florida at the request of Defendants, including several investors, who, on information and belief, made multi-million dollar investments into Industrial Heat based on representations made by Darden and Vaughn as to the efficacy of the E-Cat technology. Plaintiffs further admit that Mr. Joseph Murray was denied access to the plant on one occasion in 2015 because it appeared that Mr. Murray had improper motives, including but not limited [to] obtaining information to be passed on to a competitor for Leonardo, for wanting to visit the Plant. Plaintiffs deny the remaining allegations contained in Paragraph 81 of the Counterclaim and demand strict proof thereof.

The reason given for denial of access is consistent with Rossi’s general behavior with regard to any independent examination of the E-Cat technology. However, above, Rossi has denied failure to disclose the technology to Industrial Heat, and that is inconsistent with the above claim.

Rossi has, in fact, claimed the “improper motives” for Industrial Heat itself, and the only difference with Murray would be that he was an engineer and might observe a secret, which, then, according to Rossi’s assessment of his or IH’s motives, Industrial Heat could then disclose to “competitors.” Yet this would be equivalent to licensing the technology to “competitors,” which IH was explicitly allowed to do. In order to license it, though, they must understand how to create the heat effect.

I am astonished that Rossi’s attorney would allow Rossi to say this, but, in the end, Annesser works for Rossi, and the representation here is not false. Rossi does appear to believe the statement about the investors, and “it appeared” would be “appeared to Rossi.”

However, that appearance shows that Rossi was still hiding something from Industrial Heat. It could be a secret that would allow the reactors to work, or it could be a secret as to how Rossi makes it appear that they work, but this, then, requires that Rossi had not, in his mind, transferred all the technology.

As well, if this was his reason for not allowing the visit, and if it was personal about Murray, something Rossi somehow knew, there is no sign that he disclosed this to Industrial Heat, which could, then, have retained another engineer. Instead, he did not deny just “one occasion,” but any additional visits by anyone not already mutually authorized, until the “test” was complete.

The typographical error is a sign of haste (and there are many others). This filing was three days late. Most of it is boilerplate. What took so long? I can guess.

Rossi has also disclosed another paranoid fantasy.

Affirmative Defense No.3:
Counter-Plaintiffs’ equitable claims are barred, in whole or in part, by reason of CounterPlaintiffs’
unclean hands. Counter-Plaintiffs and the Defendants engaged in a scheme to deceive
the Counter-Defendants by, inter alia, fraudulently inducing Counter-Defendants to enter into
the License Agreement with an entity that was without the financial means to make payment on
its obligations. Counter-Plaintiffs never had the means, nor the intention, to honor its payment
obligations. See Complaint at ¶ 38-46.

The payment obligation referred to would be the $89 million payment triggered by a fully successful Guaranteed Performance Test. However, agreements for future payments are routinely made by individuals and corporations which do not directly possess the means, but as a statement of intention. Rossi claims that IH had no intention to pay, but he has asserted no evidence for this claim. His technology, if IH had been able to independently verify his claims, would easily have allowed them to raise the $89 million, and they had “means” to obtain that, specifically, well-established connections with people and partnerships with wealth to invest.

This “unclean hands” argument would make any promise to pay a balloon payment in a mortgage into fraud, unless the promisor already has the money, when, in fact, such payments are often expected to be made by refinancing. Rossi has, through discovery, confirmed what would have been obvious: they didn’t have the $89 million. But could they have borrowed it, or obtained additional investment, or some combination of these?

Given Rossi’s behavior with Murray, they could not. IH’s “failure” can be directly traced to Rossi’s lack of cooperation, if he actually has a working technology. There is substantial doubt regarding that.

I have reviewed the entire Answer, merging it so that it can be compared with the counterclaim paragraphs.

I have also similarly reviewed the IH Answer to the Rossi Complaint.

There is discussion of the Answer on lenr-forum. I begin to review it on  Discussions of the Rossi Answer.

Author: Abd ulRahman Lomax


9 thoughts on “Rossi answers the countercomplaint”

  1. Thanks for the preliminary review and I look forward to you more indepth one.

    I also noticed a couple of interesting tidbits. One being that Rossi is claiming that IH specifically agreed the 1 year test was the GPT. But again, no supporting evidence such as a letter, memo or even a verbal situation.

    Another was that “lack of sufficient knowledge” claim about J.M. Products and the Doral plant. Since Johnson is the president, this is quite extraordinary.

    That APCO was hired and provided Rossi with “Mantras” to answer his own questions! No supporting evidence. One does not need a high powered, expensive PR firm to make up a few alias’ and I guess this is proof that Rossi uses Sock Puppets on JONP.

    Is there enough here to keep the judge from dismissing the case?

    1. I don’t think so, if IH makes a focused effort.
      Rossi has always claimed IH agreed. But has shown only very weak evidence, the Penon plan that was sent to IH (a copy of which is attached to DE 70.1). The requirement of the 2nd amendment for the signed approval of all parties for the GPT start date was a strong one. While estoppel is possible, evidence of consent would have to be much stronger, showing that Rossi then depended on an explicit consent.
      I just compiled a similar document for the original IH Answer to the Rossi complaint. It’s striking how flimsy it was. The claim of fraud is based on alleged oral representations four years ago. While it is possible to establish such, it is very difficult, and then there is the provision in the agreement that prior discussions were not a part of it, that the Agreement was the full agreement of the parties. This is standard, precisely to avoid messes like this. What Rossi was actually told — which IH denies — might even resemble what Rossi claimed, but was different, though in a way that Rossi might not remember. He would remember, normally, what he wanted it to mean. It’s easy to imagine. Rossi had a year to figure out what was deficient about the Agreement and back out, a year to ask an attorney about what he believed, and he didn’t.
      Lawyers tell me that no matter how clear it seems, an actual case can work out differently than we might expect. that’s not going to stop me from having expectations and making predictions. Consider how Rossi has a reputation for being very convincing, in person. So his hope may be to get before a jury and turn on all the charm. He’s going to have more dfficulty getting by the Judge, who almost dismissed the whole case ab initio, on the “Six Cylinder Unit” issue, which was not their strongest argument.

      The APCO thing is irrelevant. It does show what Rossi introduced it to show, I think it was an act of desperation, he found an email with the mantras. Notice he doesn’t say that they actually gave the mantras to him, nor that he actually followed their advice.

      I think the “own questions” thing was just sloppy work by Annesser, not catching a possible Rossi error. It meant not “his questions,” but “questions of his.”

      1. Thanks for the response.

        I have not seen the answers from the other parties, Fabiani, Penon, Bass and Johnson. Is there a date that these are to be submitted?

        If we see no submissions from them, what might that imply?

        1. Their Motion to Dismiss was mooted December 5, and they have 14 days to either file a new motion or Answer. That would be today. So, hey, I’ll check PACER!.

          Sure enough, they filed a new MTD. I’ll have it up in a few minutes.

  2. This is interesting.

    While Plaintiffs
    admit that a COP in excess of 10 was achieved during the validation test, Plaintiffs deny any
    inference that the measurement of the COP was made by the Plaintiffs. To the contrary, the COP
    measurements were made by the agreed upon third party Expert Responsible for Validation
    (“ERV”) and the measurement of a COP greater than 10 was reported by the ERV.

    AR is setting Penon up to take the fall, but Penon is nowhere to be found.

    1. Penon is a professional, he is clever enough not to show up to court.

      It’s a civil hearing, not a criminal one, they are not going to chase him. I was once invited to attend a similar hearing, and the solution was simple… Ignore it and next time drive into Hungary rather arrive by air…

      1. My sense at this point is that Penon has either been served with notice or that process is pending such that the judge is not going to dismiss him. (It may be possible to serve Penon in Italy through publication in a certain way, and then there is time allowed.) The reason for my suspicion is in this order from the judge.

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

        They had a month, and it’s been a month since that deadline.

          1. It means that Penon could end up with a civil judgement in that Florida Federal Court, if he doesn’t respond after being served. This is not criminal, so “extradited” is totally irrelevant, who mentioned being extradited? If he has no assets within reach of the Court, then he might very well just stay away. However, a quick look at the legal issues leads me to think that he might be at risk of an Italian court recognizing the U.S. decision, or IH could sue him in Italy. Penon should definitely consult an attorney. There could be high risk for him. As well, there is his reputation as a consultant. The documents in the record regarding Penon would not exactly be great selling points for any future work. Unless, of course, someone wants to hire him to fake some tests. On the other hand, seems he did a poor job of that as well.

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