I am starting study of the Motions for Summary Judgment. I decided to start with the Rossi motion first, so as to avoid some level of bias coming from getting fired up by the IH Motion. At this point I am compiling a study document, a page copied from the motion, in blog format, and intended to create both internal and external links for references. And what I immediately have discovered is that every Rossi exhibit reference I have looked at is incorrect. The motion is a mess. However, what about the intentions? They may not be much better.
This is just one example of many I have noticed. (Edit: I start to note more, below.)
46. In fact, Defendants told their own purported witness, Mr. Rick Smith, that they agreed to the GPT Protocol. See Smith Depo. Tr. at 108:13-22, appended hereto as Composite Ex. 27.
It is not Exhibit 27. It is Exhibit 28. What did Smith actually say? Is “GPT” mentioned? No. This a Rossi deception, present from the beginning of the complaint, equating a “test” with the very specific contractual “General Performance Test,” and is repeated many times in the Motion.
There was a Penon test plan, it has been mentioned many times. It is unclear if IH ever agreed to it, but they did allow it to proceed. From the deposition:
Q. I’m going to stop you for a moment. You said in discussions with Mr. Murray, he felt it was deficient. Did you do your own evaluation of the test plan?
A. Oh, yeah. Oh, yeah.
Q. And that evaluation was done for what purpose?
A. To determine if it was a proper way to test a device of this sort.
Q. Okay. And did anyone ever tell you in this case that the defendants, Ms. — I’m sorry, Industrial Heat and IPH International B.V. agreed to that test
A. They have, yes.
Q. They did tell you that?
A. They did, yes.
Q. Okay. So you were aware that that was an agreed-to test plan?
A. I am aware of that.
Q. And your opinion is that it is somehow deficient?
A. Correct, it is deficient, yes, sir.
There is no doubt that a test plan was submitted to IH by Penon. I think IH has later claimed that the plan was not followed in some aspect or other, but that is not important here. As well, I have not previously seen evidence that Darden or someone from IH actually agreed to the plan, but given what I know about how IH was treating Rossi at that point, still, and if they had objections, I’d expect them to largely sit on them and to agree or at least not to strongly object.
However, none of the discussions we have seen, so far, refer to the Doral plant as a Guaranteed Performance Test. However, the Penon plan did call itself a 350-day test. That would not make it a “Guaranteed Performance Test.” What was required for that was clear signed agreement to the start date (which would presumably then also cover any conditions, such as the identity of the ERV for the GPT).
In the context of this discussion, Smith would not necessarily have “Guaranteed Performance Test” in mind. Just a test protocol that he’d been shown.
This is appalling in a Motion for Summary Judgment, a waste of time. The MSJ also appears to violate the page restrictions issued by the judge the day before. IH exactly met the restriction (30 pages, not counting front matter, signature and certification). The Rossi motion is 39 pages. The judge ordered no more than 30. A separate Statement of Facts is allowed, however, 15 pages. Exhibits are not counted. Rossi included a “Statement of Undisputed Material Facts” within the Motion, starting on page 3.
There is another issue here. Smith is an expert, but this bit of testimony is hearsay. It does not identify who told him the alleged fact. It could have been anyone “connected with the case.” I do think it quite possible that someone from IH or IPH (which are really the same for almost all purposes, as IH is sole owner of IPH) told Smith that they had accepted the Penon plan, whether or not they had reservations about it. However, this is not fundamental to the case, like much of what Rossi claims in the MSJ.
Rossi’s attorneys would know that their chances of succeeding in an MSJ on their claims are somewhere between zero and tiny. So why are they trying? Grandstanding, my sense. This is for a broader audience. Some of these arguments will seem plausible. Remember, these motions will not be shown to a jury. So if not to convince the judge, they are for something else.
The source of the exhibit reference errors may be seen in the draft study. A piece of a Vaughn deposition was cited, in the section Statement of Undisputed Material Facts, Ex. 2, to establish the URL of the Cherokee web site, and then photos and information from that page was cited as “Exhibit 2A.” However, it was actually Exhibit 3. All later exhibit numbers, then, AFAIK at this point, are bumped up by one.
The MSJ was dated as signed March 22, 2017, along with the certificate of service for that date. However, the page we have was actually filed March 23, the extended deadline. I assume that this was the document actually filed March 22 with a motion to seal, which the judge rejected without comment (DE 213, no document), so it was reposted.
The MSJ relies heavily on the legal theory that IPH is estopped from asserting whatever the corporate representative did not confirm, as if the Rossi Motion for Sanctions, DE 179, filed 3/17/2017, might be granted. In fact, the Judge rejected this Motion, 3/20/2017, as improper. This was a discovery dispute (and the Rossi Motion for Sanctions shows the nature of the dispute, IH had objected to the corporate representatives being asked questions where the source of the information would be another witness also being deposed, so this was fishing for exactly what Rossi was asserting, some defect in the representative testimony. It was a trap.
The Magistrate issued an order, March 24, ruling that the depositions for Cherokee and IPH were “insufficient,” and ordering that new testimony be arranged, and with costs awarded to Rossi. Whether IH will decide that this is worth appealing (they could, easily, based on what appears of the circumstances, but the public cannot see the details of the hearing, so this may be incorrect.) This deficient testimony, then, cannot be used to estop the IPH claims, so very much of the Rossi MSJ is blown out of the water, it will need to be rewritten and resubmitted, if the Judge allows (and I think she would). If IH handles that testimony properly, they now know exactly what Rossi will be claiming, and will presumably offer testimony as needed. And if Rossi does not ask the necessary questions, too bad. He won’t be able, then, to claim IPH “failed to answer” questions he did not ask.
Meanwhile on Planet Rossi, the principal party is smug and satisfied, claiming to believe he’s winning, directly or through a sock.
March 25, 2017 at 4:28 PM
Interesting: IH figured the 1 MW plant test had failed because it started late, so they didn’t have to pay him (Rossi)** “But they never told him this”. And … Woodward’s $50 million only bought 5% of IH’s shares, when IH had only the IP of Andrea Rossi in its portfolio (eventually they bought toilet paper pretending it is IP from Rossi’s competitors, to be able to say to their investors that they still have an IP even if they have no more the IP of Rossi.
March 25, 2017 at 5:16 PM
The more you read the discovery documents, the more you understand why we are satisfied of our position in the litigation.
Warm Regards, A.R.
Echoing Rossi’s arguments in the case, “A. Mikhail” misrepresents the IH-Woodward facts. Woodward received preferred shares, roughly $45 each, giving them certain priority rights. The preferred shares have the same voting rights as ordinary shares, which have a par value of $0.01. These documents have been public since May 2015. The percentage of shares is correct (I think), but it is like treating items of currency as all equal, such that a penny is counted the same as a $50 bill. This is a device for maintaining routine operational control of a company with the founders while allowing a large equity for an investor. Woodward controls the equity in the company, by a large margin, and if IH did not consider Woodward’s interests, well, this is probably why IHHI was formed in the United Kingdom! They could sue locally. Rossi’s bringing this up in the lawsuit was completely irrelevant, it is not an issue in the case, but exists in his own deranged thinking as Very Important.
I have not yet seen clear evidence for this, but only some hints in the vast pile of evidence dumped into the docket last week, but IH, until the middle of the Doral Year, was still acting as if they hoped Rossi might actually demonstrate major heat. Given Rossi’s history and propensity for walking away from investors and tests at the slightest hint of any suspicion or lack of total surrender to the Rossi Plan, IH probably did not confront him with all the details that were starting to appear, to become more and more obvious. Until they did, which was not, as Rossi claimed later, only when the payment was due, it was long before that. The breakdown can be seen clearly by July, 2015, when Rossi refused admittance to Murray, the IH Engineer, clearly violating the Term Sheet. Rossi hid behind JMP necessities for this, but he was JMP, de facto. Johnson deferred to Rossi, claiming that Rossi’s attorney had advised him not to deal with IH, but only with Rossi. So Johnson violated the Term sheet, refusing admittance, in effect.
I am spending a lot of time with the study page for the Rossi Motion. It might be radically changed, and most of the work is actually formatting and cross-referencing, which could become obsolete. So I may turn to a study of the IH MSJ, and return to the Rossi one if it does not become moot. (As it stands, the Study document is neutral.)
Standard in the current version, though, is that Rossi uses the terms “ERV” and “GPT” and reads them into any mention of a test. It is not just the example cited above, it is heavily woven through the MSJ, and that practice, then, if allowed, converts testimony not intended by the witness to be a confirmation of the fact of a GPT, into testimony that appears to do so.
I was not happy when the Judge refused to allow additional time for discovery and Daubert or MSJs. It created major time stress, which then leads to errors and confusion. This became a massively complex case, with multiple counterclaim defendants — and plausible claims of fraudulent inducement, spoliation of evidence, etc. How can a Motion for Summary Judgment be in order if there remain significant discovery disputes?