EFTA01147552.pdf

IN THE CIRCUIT COURT OF THE 15th JUDICIAL CIRCUIT IN AND FOR PALM BEACH COUNTY, FLORIDA CIVIL DIVISION AG CASE NO. 502009CA040800XXXXMB Judge David F. Crow JEFFREY EPSTEIN, Plaintiff/Counter-Defendant, v. SCOTT ROTHSTEIN, individually, and BRADLEY J. EDWARDS, individually, Defendants/Counter-Plaintiffs. PLAINTIFF/COUNTER-DEFENDANT JEFFREY EPSTEIN'S MEMORANDUM OF LAW IN OPPOSITION TO DAMAGES PLED IN BRADLEY EDWARDS' SECOND AMENDED COUNTERCLAIM Plaintiff/Counter-Defendant Jeffrey Epstein ("Epstein"), by and through his undersigned counsel, pursuant to this Court's Order on March 29, 2012, respectfully submits this Memorandum Of Law In Opposition To Damages Pled In Bradley Edwards' Second Amended Counterclaim, and states as follows: In his Second Amended Counterclaim, Edwards seeks the following damages from Epstein for alleged abuse of process: injury to Edwards' reputation, "interference in his professional relationships, the loss of the value of his time required to be diverted from his professional responsibilities, and the cost of defending against Epstein's spurious and baseless claims." (Second Amended Counterclaim, ¶17). Edwards seeks precisely the same damages for alleged malicious prosecution. (See Second Amended Counterclaim, ¶33). No other damages are specifically pled. EFTA01147552  Epstein v. Rothstein and Edwards Case No. 502009CA040800XXXXMB/Div. AG As more fully set forth below, the compensatory damages demanded by Edwards are not recoverable as a matter of law. First, Edwards seeks "damages including but not limited to..." various elements of damages. (See Second Amended Counterclaim, ¶17 and 33). Just as this Court has precluded Epstein from seeking unspecified damages by pleading "damages including but not limited to ...", Edwards should be held to the same standard and likewise be barred from seeking any unspecified damages in support of his claims against Epstein. Damages for these torts are special damages that need to be pled. Second, under Florida law, Edwards cannot recover compensatory damages for the alleged loss or use of his own time participating in the subject litigation, regardless of whether such participation resulted in time "diverted from his professional responsibilities" (¶17) or "interfere[d] in his professional relationships" (id.). The court stated in Miami Nat? Bank v. Nunez, 541 So. 2d 1259, 1260 (Fla. 3d DCA 1989) that "[w]e find no precedent for awarding a litigant compensatory damages for her own...participation in the preparation for litigation." (Emphasis added). See also Maulden v. Corbin, 537 So. 2d 1085 (Fla. 1st DCA 1989) (ruling that an attorney was not entitled to compensation for his time participating in litigation when he engaged counsel to represent him in the matter). Since Edwards has engaged Mr. Scarola from the outset of this case to represent him, Edwards cannot claim as damages his time assisting counsel or involvement in the subject litigation that purportedly interfered with his professional relationships. Third, Edwards' claim for damages to reputation is based solely on purportedly baseless allegations and statements contained in the pleadings, motions and other papers filed by Epstein 2 EFTA01147553  Epstein v. Rothstein and Edwards Case No. 502009CA040800XXXXMB/Div. AG in the prosecution of Epstein's claims against Edwards.' Edwards' Second Amended Counterclaim does not allege that there were allegations or statements by Epstein outside the confines of the subject litigation that injured his reputation. Nor does Edwards allege how "every motion, request for production, every subpoena issued ..." (Second Amended Counterclaim, 116) could possibly have caused injury to his reputation. Under settled Florida law, all allegations in a complaint, as well as statements made in the course of litigation, are subject to an absolute privilege and thus will not support a claim for injury to reputation. See, e.g., Fridovich v. Fridovich, 598 So. 2d 65 (Fla. 1992) (defamatory statements made in the course of judicial proceedings are absolutely privileged). Accordingly, absent any operative allegations in the Second Amended Counterclaim that Epstein made defamatory statements outside the subject litigation, or otherwise injured Edwards' reputation other than what is said in pleadings, Edwards has no lawful basis to recover damages for injury to reputation, and his claim for damages to his reputation should be stricken. Fourth, Edwards is not entitled to recover damages for "the cost of defending against Epstein's spurious and baseless claims" (¶17) for abuse of process, or any other damages allegedly caused by the filing or service of a purportedly baseless lawsuit. Given the fact that the mere filing or service of a spurious claim is not in itself actionable as abuse of process, see, e.g., McMurray v. U-Haul Co., 425 So. 2d 1208, 1209 (Fla. 4'h DCA 1983); Blue v Weinstein, 381 So. 2d 308, 310 (Fla. 3d DCA 1980), it necessarily follows that Edwards is barred from recovering attorney's fees incurred defending a purportedly baseless lawsuit and any other damages allegedly resulting from the filing of that lawsuit. ' By contrast, Epstein claims that Edwards committed various acts that were not undertaken in furtherance of the underlying litigation. 3 EFTA01147554  Epstein v. Rothstein and Edwards Case No. 502009CA040800XXXXMB/Div. AG Fifth, abuse of process is based on process used for an immediate purpose other than that for which it was designed. See, e.g., McMurray v. U-Haul Co., 425 So. 2d 1208 and n. 1 (Fla. 4th DCA 1983). Edwards, however, does not allege that any specific process was used by Epstein for any immediate purpose for which it was not designed (see 116, Second Amended Counterclaim), claiming only that everything done by Epstein in prosecuting his claims against Edwards was generally improper.2 Since Edwards has not identified acts taken for a purpose other than what has been intended and instead states they are all invalid because the lawsuit is invalid, these damages are not recoverable at all for abuse of process. The claim is nothing more than a thinly-veiled malicious prosecution claim, see Blue, 381 So. 2d at 311, which held that claims for damages for a baseless lawsuit are not recoverable because it is not an abuse of process claim but a "thinly-veiled malicious prosecution claim." Finally, no damages for malicious prosecution are recoverable by Edwards because there was no prior lawsuit that ended with a "bona fide termination" in his favor. Alamo Rent-A-Car, Inc. v. Mancusi, 632 So. 2d 1352 (Fla. 1994). In order to comply with the Court's Order to address damages only, Epstein needs to incorporate certain arguments previously made that bear directly on the Court's Order to address damages. Edwards has not alleged that the "first suit, on which the malicious prosecution suit is based, ended in a manner indicating the original defendant's innocence of the charges ...so that a court handling the malicious prosecution suit, can conclude with confidence that the termination of the first suit was not only favorable to the defendant in that suit, but also that it demonstrated the first suit's lack of merit." Doss v. Bank of 2 The Court's Order dismissing the Amended Counterclaim required that Edwards "set forth with more specificity the alleged improper or perverted use of process..." All Edwards did was attach the docket sheet instead of saying "every single act," which does not comply with this Court's Order. 4 EFTA01147555  Epstein v. Rothstein and Edwards Case No. 502009CA040800XXXXMB/Div. AG America, 857 So. 2d 991 (Fla. 56 DCA 2003) (emphasis added). See also Waite v. Ward, 413 So. 2d 830, 831 (Fla. 1s' DCA 1982) (malicious prosecution action "cannot be filed until the original action is concluded.") (emphasis added); Blue, 381 So. 2d 308 (same). Instead Edwards has attempted to argue that "abandoned counts" from the first Complaint constitute a bona fide termination, but such is not the law. The law as noted above is based on termination of the lawsuit in toto, not counts within the lawsuit. There has been no determination that a previous lawsuit lacked merit. Epstein respectfully asks the Court to recall that Epstein was directed to replead the Amended Complaint so the Court could address certain discovery issues. Respectfully, the fact that Epstein did not refile certain counts does not mean that Edwards obtained a favorable determination of innocence. Epstein intended to leave those counts pending until certain discovery he has sought, and is still seeking, was obtained. Thus, there is still a likelihood that Epstein will ask to reinstate those counts, and that such counts may be added, thus precluding a malicious prosecution claim based on those "abandoned counts." Moreover, Epstein's pending abuse of process claim essentially incorporates the operative factual allegations of the prior dropped claims, thus precluding any valid argument that there was a bona fide termination in favor of Edwards. Thus, unless and until Epstein's lawsuit against Edwards is concluded in its entirety and all claims have been resolved, there can be no determination as to how the lawsuit terminated for purposes of a malicious prosecution claim, and no basis to seek damages for malicious prosecution. Finally, assuming arguendo that the Court were to view the dismissal of Epstein's initial claims for RICO, fraud and conspiracy and §772.101, Fla. Stat., as providing a basis for a malicious prosecution claim by Edwards, Edwards' damages for malicious prosecution must be limited to any damages arising solely from the prosecution of those counts up until the time they 5 EFTA01147556  Epstein v. Rothstein and Edwards Case No. 502009CA040800XXXXMB/Div. AG were dropped. Edwards cannot recover malicious prosecution damages resulting from Epstein's ongoing prosecution of his abuse of process claim, because it has not terminated in Edwards' favor. WHEREFORE, Counter-Defendant Jeffrey Epstein respectfully requests that Edwards' damages claims be stricken for the reasons set forth above. CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing was sent on this 18'h day of April, 2012 via U.S. Mail to: Lilly Ann Sanchez, Esq., The L•S Law Firm, Four Seasons Tower, 15'h Floor, 1441 Brickell Avenue, Miami, FL 33131; Jack Alan Goldberger, Esq., Atterbury, Goldberger & Weiss, P.A., 250 Australian Avenue South, Suite 1400, West Palm Beach, FL 33401-5012; Marc S. Nurik, Esq., Law Offices of Marc S. Nurik, One East Broward Boulevard, Suite 700, Fort Lauderdale, FL 33301; and Bradley J. Edwards, Esq., Farmer, Jaffe, Weissing, Edwards, Fistos & Lehrman, P.L., 425 North Andrews Avenue, Suite 2, Fort Lauderdale, FL 33301; and by hand delivery to Jack Scarola, Esq., Searcy Denney Scarola Barnhart & Shipley, P.A., 2139 Palm Beach Lakes Boulevard, West Palm Beach, FL 33409. Respectfully submitted, Joseph L. Ackerman, Jr. Florida Bar No. 235954 FOWLER WHITE BURNETT, P.A. 901 Phillips Point West 777 South Flagler Drive West Palm Beach, Florida 33401 Telephone: (561) 802-9044 Facsimile: (561) 802-9976 Attorneys for Plaintiff Jeffrey Epstein and 6 EFTA01147557  Epstein v. Rothstein and Edwards Case No. 502009CA040800XXXXMB/Div. AG Christopher E. Knight Florida Bar. No. 607363 FOWLER WHITE BURNETT, P.A. Espirito Santo Plaza, 14th Floor 1395 Brickell Avenue Miami, Florida 33131 Telephone: (305) 789-9200 Facsimile: (305) 789-9201 Attorneys for Plaintiff Jeffrey Epstein 7 EFTA01147558