With regard to the IH request to amend, the Judge ordered opposing parties to file yesterday (January 30, 2017) and IH to reply by today. Oppositions were filed by attorneys for Fabiani, Johnson/Bass, and Rossi.
For us in the peanut gallery, of greatest interest are the exhibits Rossi attached. Exhibit 1 appears to be part of Penon’s Final Report.
The Judge approved the request. IH dodged a bullet there, I did predict the Judge would approve. In fact, she gave the reasons for not approving (as had the counterclaim defendants) … and then approved based on an assessment of “due diligence” due, I’d say, to the complexity of the Motion to Dismiss history. I would translate that to “barely adequate diligence.” She then allowed the cc defendants the statutory time for motions, however, she has firmly rejected the “failure to state a claim” argument.
Below are my comments before the Order.
(Rossi showed monthly utility bills in Exhibit 2. Exhibit 1 appears to be the full Plant data from the Penon Report, and that has, then, daily reports of power, which, from the IH plot, is almost always identical to Fabiani’s data. However, it is immediately apparent that Penon and Fabiani may have been measuring power in the actual circuit supplying the Plant, whereas the utility company would be reporting full power to JMP. This might well explain the discrepancy; however, that explanation has not been advanced, and the extra power is sometimes roughly as high as the Fabiani/Penon power (and Penon was presumably relying on data provided by … by whom? How?)
For purposes of the motion, the Rossi exhibits are irrelevant. They are presented as an alleged factual contradiction to the IH claim of Fabiani misrepresentation, but not only do they not contradict the claim, necessarily, but this is an attempt to induce a factual judgment, as distinct from a legal one. IH claimed Fabiani misrepresented electrical input data and to resolve this requires comparison between specific Fabiani-provided data, and the actual electrical records. Rossi provides the power data from the utility company and appendices from the Final Report, presumably of the “ERV.” Without seeing the specific Fabiani data, we cannot assess that.
As to the legal arguments, much time was wasted by the Judge’s radical dismissal of Counts IV and V. Rossi well expresses the confusion. It is unclear whether or not Bass actually contributed to IH losses, however, enough had been present to indicate the possibility. I find IH’s original pleadings to be unclear (as did the Judge), and, as well, except for the Fabiani contract, they remain unclear. The Judge, however, passed over similar unclarity in the Rossi complaint, on the basis that Discovery could bring out the facts.
Objection to the amended complaints asserts that no actual damage was caused, by, say, Bass, because, allegedly, Bass was not involved in the decision to move the Plant to Florida, but … that is not the only damage asserted, there were continued payments of expenses, to Fabiani, to Penon, and, as well, to Barry West. I am seeing, in the Dismissal, a factual claim rejected, which could be judicial error. This is clearest with the Fabiani contract. IH claimed that there was a contract in force. Rossi’s opposition claims there is no evidence that IH accepted the contract (because Darden’s signature is missing). Yet it is clear, on evidence already presented, that there was an operational agreement between Fabiani and IH, and IH was paying Fabiani as if the contract were in place. I have little doubt that IH could establish, at least, estoppel on this.
The irony here is that Rossi had not signed the Second Amendment he was depending on, on behalf of Leonardo, nor had Ampenergo signed. The Judge allowed his claim to stand, pending Discovery.
IH presented too much evidence, that’s becoming clear. Too much evidence, not enough clear and simple claim. Evidence is not actually needed before trial, if I’m correct, only clear claims. They claimed a contract with Fabiani, and they claimed breach by failing to deliver information as promised, and they claimed harm from this. That is all possible, and it should have been enough. They erred in referring to “the agreement” as if this was what they had presented, which had expired. They did not clearly allege a continued written contract.
Fabiani’s attorney argues:
3. Contrary to the arguments raised by the Defendants in the Motion for Leave, this effort to amend should have been attempted many months ago when the Defendants were put on notice by the Third-Party Defendants of the deficiencies within the original allegations of the Third-Party Claims. This is especially true given that the Pre-Trial Schedule [ECF No. 23] set the deadline for the amendment of pleadings and to add parties as August 11, 2016.
I agree with him. They should have, though I don’t know that the deadline mentioned is fixed. After all, IH already amended their complaint based on the Judge’s Order, after that deadline.
There is a simpler fix here than the Judge allowing the Amendment (which could then create a new cycle of motions), rather, she could reverse her Order of Dismissal, based on having given inadequate opportunity for IH to remedy defects, but essentially as failing to recognize IH’s claim of a valid contract (which could even have been an oral extension; the operative contract then being the oral extension, not, technically, the original contract, but it could agree to continuing the same terms), and possible damages from deceptive acts (which need not be the major expense of moving the reactor to Florida), and allow the original complaint to proceed intact. The counter-defendant’s claims of legal insufficiency, depending on Discovery, could still be the subject of a later Motion for Judgment.
For example, was there a copy of the Fabiani contract that was signed by Darden? It is possible that this existed, but is in the possession of Fabiani. After all, he is the one who would want and need that copy. Discovery should bring this out, or if it’s missing, estoppel could easily be asserted here based on behavior of the parties.
Better late than never, and they served up dessert with the entree. They have, this time, very clearly addressed all the issues. They substantiate the claim of Fabiani misreporting of power with a chart that shows daily power usage. Who knew one could get that? This chart is one that they compiled. As evidence, in itself, it is incomplete, but the data from which it was compiled could be evidence, and at this point, all they have to do is assert evidence, as distinct from conclusions.
My sense is that they have done this, and the legal arguments, as well, appear sound, though I have not reviewed authorities. They assert that the dismissal was without prejudice, whereas the counter-defendants argue, effectively, that it was final. I do not recall the dismissal as making a statement about with or without prejudice, so we may find out (but a first dismissal without prejudice on such relatively weak grounds would have been improper and certainly appealable.)