RvD: Judge rules on 3rd Party Motion to Dismiss

The Order:

1. Count IV is DISMISSED as to Third-Party Defendants, J.M. Products, Inc.; Henry Johnson; James A. Bass; United States Quantum Leap, LLC; and Fulvio Fabiani.

2. Count V is DISMISSED.

3. Count III remains intact.

The relevant Complaint is part of:

11/23/2016 0078-0_3rd_amended_ih_answer (AACT)

The arguments presented, and the Order were:

12/19/2016 0090.0_3rd_party_MTD refiled after original MTD mooted
01/03/2017 0101.0_IH_Opposition_to_3rdP_MTD
01/10/2017 0110.0_3pD_Reply_to_IH_response_to_MTD
0120.0_Order_on_3rd_Party_MTD Count III intact, Counts IV & V dismissed.

COUNT III: FRAUDULENT INDUCEMENT (Term Sheet) (Industrial Heat against Rossi, Leonardo, JMP, and Johnson)

COUNT IV: FLORIDA DECEPTIVE AND UNFAIR TRADE PRACTICES ACT (Industrial Heat and IPH against all Counter-Defendants and Third-Party Defendants)

COUNT V: BREACH OF CONTRACT (Industrial Heat against Fabiani and USQL)

So where does this leave the 3rd Party defendants? All but Johnson just had the claims against them dismissed. Can IH appeal this? I will look at the arguments before having much opinion on that. Whether they can appeal and do appeal are different issues.

The core issues in the case remain on the table, and Johnson remains possibly liable. The Dismissal of Counts IV and V apply only to the 3rd Party defendants, not to Rossi and Leonardo, where those counts stand, see the prior Order on the Rossi MTD.

Study of Order:

RvD:Analysis of 3P MTD arguments

Count III was already accepted by the Court as to Rossi, and was kept as to Johnson because there was adequate allegation to establish possibility of IH claims and damage being accepted at trial or before.
Count IV was dismissed as to 3rd party defendants because direct harm to IH from them was not specifically claimed. For example, was there actually detrimental reliance on Bass’s representations? Not claimed, merely implied that this was part of a scheme, which it was, but not that it increased harm to IH.
Count V was dismissed because the Agreement with USQL, Fabiani’s LLC, expired and required written renewal. This has other implications.

The result of this, for me, is that Rossi’s position is gloomier, because he did not allege the required written consent to the start date for a GPT, nor has he, apparently, provided evidence in Discovery, but he relies on estoppel, and the Judge just denied what was essentially an estoppel claim of IH against Fabiani, that the original agreement continued because they continued paying him.

If I am correct, all relevant charges are now dismissed against Bass and Fabiani. All claims against Rossi stand. IH may rely now on other means to obtain records and information from Bass and Fabiani, and may subpoena them for the trial. But they will need to get moving, because the Judge denied the Motion for time. There are some lessons there. Why, indeed, did they delay starting Discovery for so long?

The IH Motion to Dismiss failed to shut down the complaint, 07/19/2016. It was reasonable to delay discovery until a short time after that. I do not have the date when Rossi served IH with the first production request, but the response was dated October 7, 2016.

The Protective Order was not entered until October 14, 2016. This was quite late, three months after Discovery would have begun. IH started to deal with alleged Rossi noncooperation on November 8, about two weeks after a similar Rossi hearing request. The hearing noticed, December 6, was cancelled by IH. There was then another hearing notice, for January 10. That hearing was held, but any Order coming out of it has not been published. Hence, while IH has complained about Rossi not being responsive, Rossi is not delinquent. If the Magistrate orders response, he will probably give a deadline.

An explanation of Discovery process: a party may ask pretty much any question they deem relevant. A responding party may answer, or may object. Objections should not be frivolous, but all objections stand unless overruled by the Judge (in this case, the Magistrate). There is a default only if the magistrate orders response and the party does not respond. IH has failed to pursue discovery with diligence. The Judge is, more or less, slapping them on the wrist. No excuses, guys, get to work!

Something has been missing at Jones Day.

This Order was effectively appealed with a new Amended Complaint offered.

Author: Abd ulRahman Lomax

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

2 thoughts on “RvD: Judge rules on 3rd Party Motion to Dismiss”

  1. Thank you for the update.

    I must say I am very surprised! I could see possibly count IV as it could be difficult to prove and link all the requirements. However, it appeared fairly clear that Fabiani did not live up to his contract by withholding information, etc.

    Since Bass evidently had no contract or legal dealings with IH, I suppose it would be hard to prove fraud. But still….

    Plant Rossi will have a field day with this I am sure. It will be taken as “proof” that Rossi has been telling the truth, even though it is nothing of the sort.

    I am still very surprised by the dismissal against Fabiani. ???

    1. You’re welcome, and thanks for the acknowledgement. I am studying the Judge’s arguments in the page I created for that, it’s linked from the post, I think. It is in process, I have only completed the study re count III, which is still intact, but which only accuses Rossi and Johnson. For your immediate benefit, I have updated that draft to show where I am. I hope to finish it tonight.

      There are aspects of the ruling that are, so far, unclear to me. What about Penon, for example? I’m in the middle of Count IV now. She starts out by generally rejecting the counter defendant’s arguments, but I think she ended up with on critical element missing with respect to the elements necessary. I don’t know if the defect can be remedied, or if it is fundamental, or if the decision is reversible. With III she was right on, and identified a major weakness in the IH pleading, but kept III anyway, because they had alleged enough without that.

      Motions to Dismiss are famously difficult, and the Order today is a total dismissal as to the claims against Bass, Fabiani, and maybe Penon. Yes. It’s surprising. On the other hand, this should be no joy to Planet Rossi, because on similar issues, the Judge completely dismissed his own Motion to Dismiss. Those counts remain in place for him.

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