Filing # 61938207 E-Filed 09/25/2017 01:11:08 PM

Filing # 61938207 E-Filed 09/25/2017 01:11:08 PM IN THE CIRCUIT COURT OF THE FIFTEENTH JUDICIAL CIRCUIT, IN AND FOR PALM BEACH COUNTY, FLORIDA. CASE NO. 502009CA040800XXXXMB JEFFREY EPSTEIN, Plaintiff/Counter-Defendant, -VS- SCOTT ROTHSTEIN, individually and BRADLEY J. EDWARDS, individually, Defendants/Counter-Plaintiffs. DEFENDANT/COUNTER-PLAINTIFF BRADLEY EDWARDS' MOTION TO STRIKE PLAINTIFF/COUNTER-DEFENDANT JEFFREY EPSTEIN'S MOTION FOR SUMMARY JUDGMENT ON THE FOURTH AMENDED COUNTERCLAIM AND SUPPORTING MEMORANDUM OF LAW Defendant/Counter-Plaintiff, Bradley J. Edwards, individually, by and through his undersigned counsel, hereby files this Motion to Strike Plaintiff/Counter-Defendant Jeffrey Epstein's Motion for Summary Judgment on the Fourth Amended Counterclaim and Supporting Memorandum of Law, based on the law of the case doctrine. RELEVANT PROCEDURAL BACKGROUND In the Fourth Amended Counterclaim, Edwards raised two claims against Epstein: 1) abuse of process and 2) malicious prosecution. As to the malicious prosecution claim, Edwards alleged that the filing of the original complaint by Epstein constituted malicious prosecution because Epstein filed it for the sole purpose of "further attempting to intimidate Edwards ... and others into abandoning or settling their legitimate claims for less than their just and reasonable value." I EFTA00613501 After the filing of the Fourth Amended Complaint, Epstein moved for summary judgment, arguing as to the malicious prosecution claim that summary judgment was required based upon the litigation privilege. Alternatively, Epstein argued that the claim failed as a matter of law because the "undisputed facts" established that there was probable cause for his original action against Edwards which barred a claim for malicious prosecution. He also claimed that Edwards could never establish a bona fide termination in his favor. The absence of probable cause for the prosecution and bona fide termination in the plaintiff's favor are two of six elements of a claim for malicious prosecution. See Rivernider v. Meyer, 174 So.3d 602, 604 (Fla. 4th DCA 2015) (noting the six elements to a malicious prosecution claim: 1) the commencement of a judicial proceeding; 2) its legal causation by the present defendant against the plaintiff; 3) its bona fide termination in favor of the plaintiff; 4) the absence of probable cause for the prosecution; 5) malice; and 6) damages). Edwards responded to the Motion, fully addressing both the litigation privilege argument and the probable cause and bona fide termination arguments. At the hearing on the Motion for Summary Judgment, this Court explained that it "would not grant the motion because of at least those two reasons; that is that I believe that there are questions of fact related to the probable cause issue, as well as the bona fide determination issue additionally." (1127/14 hearing transcript, p.24) (A copy of the transcript is attached as Exhibit A). Thus, the Court determined, based upon the evidence submitted and the argument. that the probable cause issue was one for the jury. However, this Court granted summary judgment in favor of Epstein based on the litigation privilege, relying on Wolfe v. Foreman, 128 So.3d 67 (Fla. 3d DCA 2013). Accordingly, Final Judgment was entered in favor of Epstein. 2 EFTA00613502 Edwards appealed the summary judgment, addressing in his Initial Brief only the litigation privilege issue, as that was the basis upon which this Court ruled against Edwards. In his Answer Brief, Epstein argued: In addition, Appellee argued in his Summary Judgment motion that Appellant could not satisfy all of the elements of a Malicious Prosecution claim, including that the suit by Appellee against Appellant resulted in a bona-fide termination in favor of Appellant. Appellee took a voluntary dismissal without prejudice, which does not constitute a bona-fide termination, one of the six essential elements of a malicious prosecution claim. See Valdes v. GAB Robins, 924 So.2d 862 (Fla. 3d DCA 2006). Appellant neither addresses nor submits argument as to Appellee's assertion, so this is not addressed in this Answer Brief. Rather, Appellee reasserts all argument as delineated in his original Motion for Summary Judgment and relies thereupon. (AB, p.7, n1) (emphasis added). (A copy of Epstein's Answer Brief is attached as Exhibit B). While the appeal was pending at the Fourth District, that court issued an opinion in Fischer v. Debrincat, 169 So.3d 1204 (Fla. 4th DCA 2015), approved, 217 So.3d 68 (Fla. 2017). In Fischer, the court held that the litigation privilege could not be applied to bar a claim for malicious prosecution or abuse of process. The court certified conflict with Wolfe; the Florida Supreme Court ultimately approved Fischer and disapproved the Third District's decision in Wolfe. In its Opinion in this case, the Fourth District held that its decision in Fischer controlled as to the litigation privilege issue. Edwards v. Epstein, 178 So.3d 942, 943 (Fla. 4th DCA 2015), rev. denied, No. SC15-2286, 2017 WL 2492567 (Fla. June 9, 2017). However, the court did not stop there. The court also addressed the probable cause issue. As to that issue, the court held: Epstein suggests that this case could be decided on a tipsy coachman analysis, as he alleges that all the elements of the cause of action were not present. However, the trial court specifically found that material issues of fact remained as to the elements of the claim. Based upon the facts presented and the inferences which may be drawn from those facts, we will not disturb the trial court's evaluation. 3 EFTA00613503 Id. (emphasis added). Thus, the Fourth District considered Epstein's probable cause argument and expressly affirmed this Court's decision that summary judgment was not appropriate on that issue. ARGUMENT This Court's decision that there was a genuine issue of material fact as to the probable cause issue was considered and approved by the Fourth District Court of Appeal; further consideration of the issue is barred by the law of the case doctrine. "The doctrine of the law of the case requires that questions of law actually decided on appeal must govern the case in the same court and the trial court, through all subsequent stages of the proceedings." Florida Dept. of Transp. v. Juliano, 801 So.2d 101, 105-06 (Fla. 2001) (citing Greene v. Massey, 384 So.2d 24, 28 (Fla. 1980) ("All points of law which have been adjudicated become the law of the case and are, except in exceptional circumstances, no longer open for discussion or consideration in subsequent proceedings in the case."); Strazzu//a v. Hendrick, 177 So.2d 1, 3 (Fla. 1965)). "Under the law of the case doctrine, a trial court is bound to follow prior rulings of the appellate court as long as the facts on which such decision are based continue to be the facts of the case." Id. at 106. Epstein asks this Court to grant summary judgment in his favor on the basis that there is no genuine issue of material fact that he had probable cause to bring his original action against Edwards. However, Epstein made this same argument to the Fourth District in his Answer Brief. The Fourth District rejected it and approved this Court's ruling on that issue, and "the facts on which this decision [was] based continue to be the facts of the case." Juliano, 801 So.2d at 106. Therefore, the law of the case doctrine binds this Court to follow the Fourth District's holding (and therefore this Court's prior determination) on this issue. The Fourth District Court of 4 EFTA00613504 Appeal has already affirmed this Court's decision that there is a genuine issue of material fact as to probable cause; thus, consideration of this issue by this Court again is precluded by the law of the case doctrine. Gabor v. Gabor & Co., Inc., 599 So.2d 737, 739 (Fla. 3d DCA 1992), is directly on point. In Gabor, the appellate court held that there was a genuine issue of material fact as to the claim in question and reversed the trial court's entry of summary judgment. On remand, the trial court considered the same issue again in a successive motion for summary judgment and entered summary judgment as to the claim in question. On appeal of the second summary judgment, the appellate court again reversed, based upon the law of the case doctrine. The court explained: In the case sub judice, this court had determined in the previous appeal that a genuine issue of material fact existed as to whether Frank and Ronald Gabor acted in their capacities as directors or officers of the corporations during the events which formed the basis of Sussex's complaint. On remand, the record reflects that the Gabors did not present any evidence different from, or in addition to, the evidence previously presented to the trial court on this point. Applying the "law of the case" doctrine, therefore, it was error for the trial court to enter summary judgment on a point previously determined not amenable to a summary judgment. Gabor v. Gabor & Co., Inc., 599 So.2d 737, 739 (Fla. 3d DCA 1992); see also United Auto. Ins. Co. v. Comprehensive Health Or., 173 So.3d 1061, 1066 (Fla. 3d DCA 2015) (entry of summary judgment, which was affirmed on appeal, precluded trial court readdressing the same issue on remand); Wallace v. P. L. Dodge Meml Hosp., 399 So.2d 114, 115 (Ha. 3d DCA 1981) (holding that the appellate court's determination that there were genuine issues of material fact as to a claim constituted law of the case on remand). Therefore, for the reasons stated above, this Court is obligated to deny Epstein's Motion for Summary Judgment based upon the law of the case doctrine, and there is no need to even 5 EFTA00613505 hear argument on it. This Court previously ruled on this precise issue and the Fourth District upheld its determination. Wherefore, for the reasons stated above, Edwards requests that this Court strike Epstein's Motion for Summary Judgment. I HEREBY CERTIFY that a true copy of the foregoing was furnished to all counsel on the attached service list, by email, on September 25, 2017. Jack Scarola, Esq. SEARCY DENNEY SCAROLA BARNHART & SHIPLEY, P.A. 2139 Palm Beach Lakes Blvd. West Palm Beach, FL 33409 WM, BURLINGTON & ROCKENBACH, P.A. Courthouse Commons/Suite 350 444 West Railroad Avenue FL 33401 Attorneys for Bradley J. Edwards By:/s/ Philip M. Burlington PHILIP M. BURLINGTON Florida Bar No. 285862 By:/s/ Nichole J. Segal NICHOLE J. SEGAL Florida Bar No. 41232 /kbt 6 EFTA00613506 SERVICE LIST Epstein v. Rothstein/Edwards Case No. 502009CA040800XXXXMB W. Chester Brewer, Jr., Esq. W. CHESTER BREWER, JR., P.A. 250 S. Australian Ave., Ste. 1400 West Palm Beach, FL 33401 Attorneys for Jeffrey Epstein Fred Haddad, Esq. FRED HADDAD, P.A. 1 Financial Plaza, Ste. 2612 Attorneys for Jeffrey Epstein Mark Nurik, Esq. LAW OFFICES OF MARC S. NURIK 1 E. Broward Blvd., Ste. 700 Fort Lauderdale. FL 33301 Attorneys for Scott Rothstein Jack Goldberger, Esq. ATTERBURY, GOLDBERGER & WEISS, P.A. 250 S. Australian Ave., Ste. 1400 O1 Attorneys for Jeffrey Epstein Tonja Haddad Coleman, Esq. TONJA HADDAD, P.A. 5315 SE 7th Street., Ste. 301 Fort Lauderdale, FL 33301 ttorneys or e rey pstein Bradley J. Edwards, Esq. FARMER, JAFFE, WEISSING, EDWARDS, FISTOS & LEHRMAN, P.L. 425 N. Andrews Ave., Ste. 2 7 EFTA00613507 1 IN THE CIRCUIT COURT OF THE 15th JUDICIAL CIRCUIT IN AND FOR PALM BEACH COUNTY, FLORIDA CASE NO. 502009CA040800XXXXMBAG JEFFREY EPSTEIN, Plaintiff, -vs- SCOTT ROTHSTEIN, .individually, and BRADLEY J. EDWARDS, individually, Defendants. TRANSCRIPT OF HEARING PROCEEDINGS COPY DATE TAKEN: Monday, January 27, 2014 TIME: 3:00 p.m. - 4:23 p.m. PLACE: Palm Beach County Courthouse 205 N. Dixie Highway Courtroom 9C West Palm Beach, FL 33401 BEFORE: Donald Hafele, Circuit Judge This cause came on to be heard at the time and place aforesaid, when and where the following proceedings were stenographically reported by: Robyn Maxwell, RPR, FPR, CLR Realtime Systems Administrator www.phippsreporting.com 888 811-3408 001211 Exhibit A EFTA00613508 1 2 3 APPEARANCES: On behalf of the Plaintiff: 4 W. CHESTER BREWER, JR., P.A. 250 South Australian Avenue 3 Suite 1400 West Palm Beach, FL 33401 6 561.655.4777 BY: W. CHESTER BREWER, JR., ESQUIRE [email protected] 7 8 ATTERBURY, GOLDBERGER & WEISS, PA 9 250 South Australian Avenue Suite 1400 10 West Palm Beach, FL 33401 561.659.8300 11 BY: JACK A. GOLDBERGER, ESQUIRE [email protected] 12 13 TONJA HADDAD, PA 315 SE 7th Street 14 Suite 301 Fort Lauderdale, FL 33301 15 954.467.1223 BY: TONJA HADDAD COLEMAN, ESQUIRE [email protected] 16 17 On behalf of Bradley J. Edwards: 18 SEARCY, DENNEY, SCAROLA, BARNHART & SHIPLEY, P.A. 19 2139 Palm Beach Lakes Boulevard West Palm Beach, FL 33409 20 561.686.6300 BY: JACK SCAROLA, ESQUIRE 21 [email protected] BY: WILLIAM B. KING, ESQUIRE 22 [email protected] 23 24 25 2 www.phippsreporting.com 888 811-3408 001212 EFTA00613509 3 1 Thereupon, 2 the following proceedings began at 3:00 p.m.: 3 THE COURT: Good afternoon, everybody. 4 Thark you so much. Have a seat. Welcome. 5 MR. BREWER: Good afternoon, Your Honor. 6 THE COURT: I had the opportunity to read 7 the binder and the materials sent to me by 8 respective counsel. I don't think the case should 9 take two hours. 10 MR. BREWER: No. 11 THE COURT: So what I'm going to ask you to 12 do is kindly tailor your arguments to one-half 13 hour apiece. And the movant may split up the time 14 to save some moments for rebuttal. And I think 15 that should more than adequately deal with the 16 matter. 17 I think the United States Supreme Court 18 heard the Brown vs. Board Of Education and gave 19 20 minutes a side. So if that can be done in that 20 amount of time, I think we can take care of this. 21 And, of course, you all realize and I 22 don't think this has anything whatsoever to do 23 with the matter, but I should let you know that I 24 handled the state claims that involved Mr. Epstein 25 when I was in Division B. So I have a significant www.phippsreporting.com 888 811-3408 001213 EFTA00613510 4 1. amount of familiarity with the claims that were 2 made. However, until I met with Judge Crow 3 involving this case, I had no knowledge whatsoever 4 that a separate and independent action had been brought by Mr. Epstein against the Rothstein 6 entities and Mr. Edwards. So to that extent, I 7 just to want let you know, as you probably already 8 did already know, that I handled those cases I 9 believe to their conclusion, at or near the time 10 that I left that division two years ago or so. 11 Okay. So are you Ms. Haddad? 12 MS. HADDAD: I am. 13 THE COURT: Will you be arguing on behalf 14 Mr. Epstein? 15 MS. HADDAD: No, Judge. I don't have -- 16 Mr. Brewer will be arguing on our behalf because, 17 as you can hear, I have a cold. 18 THE COURT: All right. 19 Mr. Scarola, did you want to say something? 20 MR. SCAROLA: I did, Your Honor. I just 21 wanted to clarify one matter which I believe to be 22 of some significance. 23 THE COURT: Sure. Of course. 24 MR. SCAROLA: And that is Your Honor 25 referenced a claim against the Rothstein entities www.phippsreporting.com 888 811-3408 001214 EFTA00613511 5 1 and that is not the case. 2 THE COURT: It was just Rothstein 3 individually? 4 rat. SCAROLA: It was just against 5 Mr. Rothstein individually. That claim has never 6 really been defended and -- against Mr. Edwards. 7 And the focus of these motions is only on 8 Mr. Edwards' claims for abuse of process and 9 malicious prosecution. 10 THE COURT: The later I knew. My apologies 11 for misstating the number of defendants involved. 12 MR. SCAROLA: No apology necessary, sir. 13 THE COURT: The only defendants involved -- 14 and they may have been voluntarily dismissed 15 without prejudice; is that accurate? 16 MR. SCAROLA: There was a voluntary 17 dismissal of the initial claims brought against 18 Mr. Edwards, that's correct, sir, on the eve of 19 summary judgment hearing. 20 THE COURT: I remember that being written 21 in your papers. 22 MR. SCAROLA: Yes, sir. 23 THE COURT: So is Epstein's claim against. 24 Rot-istein still viable at this juncture? 25 MS. HADDAD: Yes, Your Honor, it is. www.phippsreporting.com 888 811-3408 001215 EFTA00613512 6 TEE COURT: So the dismissed case without 2 prejudice was to -- was as to Mr. Edwards only. 3 MR. SCAROLA: The claims against LM, ono of 4 victims of Mr. Epstein's conduct, those claims are 5 also dismissed. 6 TEE COURT: Okay. Thank you for that 7 clarification. I much appreciate it. 8 Mr. Brewer. 9 MR. BREWER: Yes, sir. Well, first of all, 10 Your Honor, I'm Chester Brewer appearing on behalf 11 of Jeffrey Epstein. 12 We have before you today a motion for 13 summary judgment filed on behalf Mr. Epstein with 14 regard to a counterclaim that was filed by 15. Mr. Edwards. The case is currently set before 16 Your Honor, specially set I might say, for a 17 three-week or proposed three-week trial, and it is 18 currently set for May the 6th of this year. 19 One thing that I did want to talk to the 20 Court about before going into the procedural 21 history is in the package that was provided to you 22 by counsel for Mr. Edwards there is a statement or 23 interview that is with a young lady by the name of 24 Virginia Roberts. Now, I don't know whether you 25 have had an opportunity to read it or not. www.phippereporting.com 888 811-3408 001216 EFTA00613513 7 1 THE COURT: I didn't. I saw the reference 2 to Ms. Roberts. Who is she? 3 MR. BREMER: Ms. Roberts was an alleged 4 victim of Mr. Epstein. There was an interview 5 taken of her by Mr. Scarola and I believe 6 Mr. Edwards. There's a transcript of that interview which is neither sworn to nor even 8 signed. It's something that could not be used for 9 any purpose in the trial of this matter, even for 10 impeachment. So if Your Honor has not read it, I 11 won't go into it. 12 TEM COURT: No, I have not read it. I just saw the name Virginia Roberts bandied about on 14 several different occasions, so that's all I know. 15 And as you can tell, I didn't know her 16 relationship to the case. 17 MR. BREMER: Okay. Your Honor, the 18 procedural history here is there were a number of 19 claims brought by alleged victims of Mr. Epstein. 20 There were a number of different attorneys that 21 were involved. And a number of different cases 22 were filed both in federal court and in state 23 court on behalf of these alleged victims. The 24 cases proceeded, as you've said, some of them were 25 before you. They have all now -- per my www.phippsreporting.com 888 811-3408 001217 EFTA00613514 8 information, they have now all concluded although 2 there may still be some investigations. 3 THE COURT: Mr. Edwards at his latest 4 deposition indicated that there's still the 5 victim's case that's going on in the federal 6 court. 7 MR. BREWER: Nothing has happened on that 8 for a quite some period of time now. 9 The -- 10 MR. RING: Judge, if I may, in response to 11 your question. I'm not sure what victim's case 12 that's referencing. All -- all of the cases -- 13 THE COURT: This was a federal statutory -- 14 MR. KING: I -- 15 THE COURT: -- that Mr. Edwards indicates 16 he's doing pro bono on behalf of two of the 17 alleged victims. 18 MR. KING: You're correct. 19 THE COURT: In the Epstein matters. 20 MR. RING: That's correct. Sorry for the 21 interruption. 22 THE COURT: That's okay. 23 MR. BREWER: During the course of those 24 cases, there was some rather unusual discovery 25 that was taking place. And it was learned, and I www.phippsreporting.com 888 811-3408 001218 EFTA00613515 9 I'll get into this towards the end of my 2 presentation, but there were a number of things 3 that were learned by Mr. Epstein in and around 4 November of 2009 -- November/December 2009. He 5 filed a lawsuit against Mr. Rothstein, 6 Mr. Edwards, and LM who is one of the alleged 7 victims. One of the counts in that was for 8 malicious -- I believe it's -- he only had abuse 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 of process along with some other counts. In response to that complaint, Mr. Scarola on behalf of Mr. Edwards filed a counterclaim. That counterclaim went through several amendments, but the fourth amended counterclaim speaks to two causes of action; that is abuse of process and malicious prosecution. So those are what we're here to talk about today, is abuse of process and malicious prosecution as it relates to Mr. Epstein's original claim against Mr. Edwards. In response to Mr. Edwards' counterclaim, there were a number of affirmative defenses raised, but one of them that was raised was the litigation privilege. And we are here today to talk with you about the litigation privilege and its current state as espoused by the Florida Supreme Court and the Third District Court Of www.phippsreporting.com 888 811-3408 001219 EFTA00613516 :0 1 Appeals and, in fact, the Fourth District Court Of 2 Appeals. 3 THE COURT: One thing I wanted to interrupt 4 you on is this Wolfe case and its current status 3 and the -- I'll call the -- I'll call.it the 6 Edwards side to make things be easier. But the 7 Edwards side has raised the issue that apparently 8 this Wolfe case is still in rehearing and 9 therefore of no precedential value to the court. 10 Mr. King, did you want to speak briefly to 11 that? 12 MR. KING: Yeah. We submitted a notice of 13 correcLion to Judge Sasser the other day who stood 14 in for you on the page extension. 15 THE COURT: Right. 16 MR. KING: We gave her that and asked her 17 to turn that over to you. 18 THE COURT: I didn't get it. 19 MR. KING: Okay. What's actually happened 20 is and it's confusing because Westlaw's whole 21 history on this, and Mr. Brewer also understands 22 23 24 25 this because he ran into the same problem. My reading of the history that Westlaw contains indicates that the mandate has issued but they still use the caveat "this is a Westlaw www.phippereporting.cam 888 811-3408 001220 EFTA00613517 11 1 citation only, it's not in the final published 2 format, and therefore it can be changed at any 3 time." But with the issuance of the mandate, that 4 signifies that it is -- the rehearing is denied 5 and it is now final. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2C 21 22 23 24 2.3 TER COURT: Okay. Thank you for that. I did not know that until right now. MR. BREWER: So let's get into the Wolfe case. That's where we're headed next. And really there's a trilogy of cases. There's the Levin case, the Echevarria case, if I'm somewhere close to pronouncing that correctly, and the Wolfe case. All of them deal with litigation privilege which dates back to 1917. And I think that we are all most familiar with the standard that defamation cases, if the, quote, alleged defamation occurred during the course of a judicial proceeding would be protected by the litigation privilege and no action could be taken on them. Over the years different courts looked at it. There was an attempt -- there were attempts made to determine how far and to which causes of action the litigation privilege would apply. The seminal case now for us, I guess, now is Levin. This was Levin, Mabie suing. It was www.phippareporting.com 888 811-3408 001221 EFTA00613518 12 1 actually a tortious interference case. But the 2 case went up to the Florida Supreme Court. And 3 the issue before them was how far is this 4 privilege or to what causes of action should this 5 privilege apply? 6 And the Levin court came out and said that 7 it would apply to all torts, including the one 8 that was before them which was tortious 9 interference. And that the standard for 10 determining whether the action complained of would 11 be whether that action had some relation to the 12 proceeding, the judicial preceding. 13 Later on the question came up, Well, should 14 that -- it's the -- we've already determined that 15 it applies to all torts. And so, does it also 16 apply to statutory violations or cases involving 17 statutory violations? And that's the Echevarria 18 case, also in front of the Florida Supreme Court, 19 some 13 or 14 years after Levin, and they found, 20 yes, that it does apply to, essentially, all civil 21 judicial proceedings. 22 Now, the issues before us are the 23 litigation privilege as it applies to abuse of 24 process and malicious prosecution. That was all 25 brought to a head in the Wolfe case. In the Wolfe www.phippsreporting.com 888 811-3408 001222 EFTA00613519 13 1 case, the Third District Court Of Appeal was faced 2 with the issue of do the -- does the litigation 3 privilege apply in those two causes of action. 4 The answer was yes. The Wolfe case or the 5 Wolfe court went back and essentially referred back to and analyzed the Levin and Echevarria 7 cases. And that's why I say it's kind of a 8 trilogy. 9 And in the Wolfe case it was determined 10 that this was not -- not only was it privileged 11 for any actions that were related to the judicial 12 process, it was an absolute privilege. 13 Now, in our case, we have exactly the same 14 issue. We've got a complaint that was filed that :5 is alleged in the counterclaim to be malicious 16 prosecution. We also have the pleadings, 17 everything that was filed after the initiation of 18 the judicial pleading -- judicial process. It's 19 claimed to be an abuse of process. 20 In fact, in answers to interrogatories and 21 all of the discovery that has been had from the 22 Edwards side, they have said that the filing of 23 the complaint was in itself it was untrue, the 24 information that was there was untrue; Epstein 25 should have known it was untrue, and that he had a www.phippereporting.com 888 811-3408 001223 EFTA00613520 14 1 bad purpose in filing which was to intimidate or 2 extort Mr. Edwards and his client. 3 That's been put to bed in the Wolfe case 4 because the litigation privilege absolutely 5 applies and is absolute. The Wolfe case states 6 that they could think -- or the Wolfe court stated 7 they could think of no action that would be more 8 related to the judicial process than the filing of 9 a complaint. So a complaint, the filing of the 10 complaint is privileged. 11 Then going back, and then as they related 12 to the Levin case and the Echevarria case, they 13 said anything that was related to the judicial 14 process -- discovery, depositions, 15 interrogatories -- as long as they were related, 16 they were protected by -- the participants were '7 protected by the litigation privilege. 18 They -- in the trilogy, and I forget which 19 one of the cases it was, but they go even further 20 and clarify that the claim "a bad motive" is 21 really irrelevant to these causes of action when you were talking about the litigation privilege. 23 The -- let me see, where am I here? 24 In the Wolfe case it was a motion for 25 judgment on the pleadings. In some of these other www.phippsreporting.com 888 811-3408 001224 EFTA00613521 15 1 cases it was motion for summary judgment. And in 2 all of these cases they found that the litigation 3 privilege barred the causes of action that were 4 being claimed. 5 The argument has been made by the other 6 sides that because Mr. Edwards -- or, excuse me, 7 because Mr. Epstein had no reason to file the 8 original complaint that he filed, that somehow or 9 another the litigation privilege should not apply. 10 And that because he shouldn't have filed the 11 original complaint, everything that he did 12 thereafter was an abuse of process. 13 We would put it to Your Honor that's not 14 the standard as espoused by the Third District 15 Court Of Appeal, the Fourth District Court Of 16 Appeal, or the Florida Supreme Court. The :7 standard is: Did the action have some relation to 18 the judicial proceeding? :9 THE COURT: I think at least in trying to 20 distinguish Wolfe, but at the same time taking a 21 more global approach, the Edwards' side is 22 suggesting that timing and the length of time 23 subsequent to the settlement of the pending claims 24 and his continuing to prosecute the suit more so on the malicious prosecution side would distance www.phipporeporting.com 888 811-3408 001225 EFTA00613522 16 1 itself from Wolfe, because in Wolfe I believe the 2 court made clear that it was a brief prosecution 3 of the action and was not protracted. How do you 4 respond to that concern? 5 MR. BREWER: I respond by quoting the 6 Florida Supreme Court, which is: If the action -- 7 and whether they're talking one action, 20 actions 8 or 40 actions, if the action is related to the 9 judicial preceding, then you have a litigation 10 privilege. THE COURT: And that can go on essentially 12 forever in your mind? 13 MR. BREWER: I don't know that it can go on 14 forever because also they were talking, 15 particularly in the Levin case, about protections 16 that would be afforded to litigants. But those 17 protections would not be through a cause of action 18 for malicious prosecution or abuse of process; 19 rather, it would be through the court with 20 contempt proceedings, perhaps. It would be 21 through the Florida Bar for, you know, 22 inappropriate actions taken by an attorney. It 23 could be perjury for a litigant which would be 24 handled by the state. 25 THE COURT: I don't think perjury. Not if re - www.phippereporting.com 888 811-3408 001226 EFTA00613523 1 2 5 6 it's guised in the litigation privilege, but perhaps you're right that it could be met with 57.105 standards. HR. BREWER: 57.105 was the one I was just getting ready to get to, Your Honor. So there are protections against what you're talking about, but 7 again, I have to go back to what did the Supreme 8 Court tell us. 9 I did want to touch also on another point 10 that was raised in our motion, which is that the 11 Complaint, at least insofar as malicious 12 prosecution, has to fail because there is probable 13 cause demonstrated for Mr. Epstein to have filed 14 or at least have reason to believe that he could 15 file -- properly file the claim that he -- that he 16 did file. 17 TEE COURT: Is probable cause always a 18 legal -- purely legal determination? 19 MR. BREWER: No. No. If there are 20 questions of fact that are involved with the 21 probable cause, the questions of fact are for the 22 determination of the jury. The jury -- the judge 23 then takes those determinations of the jury to 24 make a finding of probable cause. But it is in 25 the -- at the end of the day the court -- the www.phippsreporting.com 888 811-3408 001227 EFTA00613524 18 1 issue of probable cause is a matter of law for determination by the court. But the threshold for establishing' probable cause in a civil action is really rather low. Because it is whether the defendant could have 6 reasonable -- what the -- what the defendant could 7 have reasonably believed at the time of asserting S the claim. 9 So I want to go briefly through what 10 Mr. Epstein knew or was available to him at the 11 time November/December of 2009. :2 First, undisputed, Mr. Edwards was a 13 partner at the Rothstein firm. It's also 14 undisputed and it had been admitted by 15 Mr. Rothstein that this firm was the front for one 16 of the largest Ponzi schemes in Florida history. 17 At the time, Mr. Edwards was the lead attorney for 18 three cases that were being brought by the 19 Rothstein firm against Mr. Epstein. 20 During the litigation there were numerous 21 discovery attempts which appeared to be unrelated 22 to those; and that was trying to get flight 23 manifests, take depositions of people who may have 24 been on flights on Mr. Epstein's planes, some 25 very, very prominent names. And these things were www.phippsreporting.com 888 811-3408 001228 EFTA00613525 19 escalating during that time period. And it was 2 very, very strange. 3' In late November of 2009 there was an 4 explanation as to why those things were going on. 5 And the Rothstein firm imploded. And there was a 6 complaint that was brought by Bill Scherer 7 believe down -- I don't know if it was Broward 8 County or Dade County. 9 TEE COURT: Yeah, I'm familiar with all 10 that. 11 I remember that day. Do you remember that 12 day, Mr. Edwards? 13 MR. EDWARDS: I remember it like yesterday. 14 MR. BREWER: In any event, he filed a 15 complaint on behalf of a group of investors that 16 we refer to as Razorback. And if I can find it. 17 Here we go. One of allegations in the complaint 18 in Razorback was, additionally, "Rothstein used 19 RRA's representation in the Epstein case to pursue 20 issues and evidence unrelated to the underlying 21 litigation but which was potentially beneficial to 22 lure investors into the Ponzi scheme." 23 TSB COURT: You -- five out of the six of 24 25 you know me very well, receptive to argument. and I always am very You guys know that. The www.phippsreporting.com 888 811-3408 001229 EFTA00613526 20 1 only one is Ms. Haddad. I think -- I'm not sure 2 if we met before. But I just feel like the 3 probable cause aspect just carries with it too 4 many factual issues for me to rule as a matter of 5 law, so I don't think that I can grant relief on 6 the probable cause issue vel non. So if you will, 7 please move on to -- 8 MR. BREWER: On that note, because I was -- 9 I will close. 10 THE COURT: Okay. Thank you very much, 11 Mr. Brewer. 12 MR. BREWER: No, I will close by -- 13 THE COURT: On that issue? 14 MR. BREWER: I will close on that issue. 15 THE COURT: Very well. 16 MR. BREWER: But I would like to close by 17 quoting a very prominent attorney. 18 TEE COURT: Sounds like a plan. 19 MR. BREWER: This is something that was 20 before Judge Crow. 21 And it begins out of the attorney saying, 22 "Tab 4, Levin vs. Middle -- Levin vs. Middlebrook 23 is the Tab No. 18?" 24 Judge Crow says, "I read it a thousand 25 times." www.phippsreporting.com 888 811-3406 001230 EFTA00613527 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 The attorneys says, "Yes, sir, I'm sure you have." "THE COURT: You have to give it to me again, though." ATTORNEY: "I will be happy to do that." •• "THE COURT: This deals with the litigation privilege?" The attorney then goes on to say, "Yes, sir, it does deal with litigation privilege. Echevarria also deals with the litigation privilege. Delmonico stands for the proposition that the issues with regard to privilege are some issues of law for the court to determine. And I provided Your Honor with highlighted copies. I'm providing opposing counsel with highlighted copies as well. "THE COURT: Okay." TEE ATTORNEY: "Basic point here, Your Honor, is that the litigation privilege is an absolute privilege. Once it is established that the actions occur within the course and scope of the litigation, the privilege applies absolutely as a matter of public policy. "The basis of those decisions, that if there's misconduct in the course of litigation -- www.phippsreporting.com 888 811-3408 001231 EFTA00613528 22 1 if you're talking about improper discovery, if 2 you're filing improper motions -- there are 3 remedies that are available to the court through 4 the court's inherent power to control its own 5 litigation; through the contempt powers of the 6 court through Florida Statute 57.105, and through 7 the filing of bar grievances. And it will cripple 8 the system if litigants are obligated to respond 9 to separate litigation just because somebody has 10 alleged you noticed the deposition that shouldn't 11 have been noticed. You filed a motion that 12 shouldn't have been filed." 13 That prominent attorney is Mr. Scarola. 14 THE COURT: In an unrelated case? 15 MR. BREWER: In this case. In this case 16 when they were arguing that Mr. Edwards was 17 entitled to the litigation privilege with regard 18 to Mr. Epstein's complaint. 19 TEE COURT: Okay. Who -- 20 Off the record for a minute. 21 (Discussion off the record.) 22 THE COURT: Okay. Mr. King, please. 23 MR. KING: Thank, Your Honor. William King 24 and Jack Scarola, Your Honor, for Mr. Edwards who 25 is seated with us at the table. www.phippsreporting.com 888 811-3408 001232 EFTA00613529 23 May it please the Court. 2 THE COURT: Please. 3 MR. RING: In light of the Court's ruling 4 on the probable cause issue, I am not going to get 5 into all of the facts with which we did not have 6 an opportunity to identify in detail. I'll simply 7 say to the Court that there still exists the issue 8 of the bona fide determination they have not 9 raised here today. And so, the submission of the 10 facts that we have submitted, that we've prepared 11 for you, would bear on that unless they have -- 12 likewise, because of factual disputes, they're 13 basically taking the position that is no longer -- 14 that's no longer an issue either for purposes of 15 this summary judgment. 16 Pursuant -- 17 THE COURT: Let me stop you, Mr. King, so 18 that you're not confused by my preliminary 19 statements to Mr. Brewer. And that is, that the 20 global issue that's covered by, as Mr. Brewer puts 21 it, the trilogy of cases, the Levin, Echevarria, 22 and now this Wolfe case is not being disposed of 23 or is not being ceded by Mr. Brewer here. They're 24 still claiming that both counts are covered by the 25 Wolfe, Levin, and Echevarria cases. www.phippsreporting.com 888 811-3408 001233 EFTA00613530 24 1 My statement is only if, in fact, those 2 cases are, and now the Wolfe case which is now, in 3 my view, on point relative to both abuse of 4 process and malicious prosecution claims globally, if that case for some reason doesn't cover that, 6 then the elements of the malicious prosecution 7 claim are off the table. In other words, I would not grant the motion because of at least those two reasons; that is that I believe that there are • kJ questions of fact related to the probable cause 11 issue, as well as the bona fide determination 12 issue additionally. 13 MR. RING: And I understand the Court's 14 ruling in that regard. 15 THE COURT: Okay. :6 MR. KING: My only point was they raised in :7 their initial brief an issue of whether there was 18 a bona fide termination. That, likewise, is very 19 fact specific. 20 TER COURT: I agree and that's why I want 21 to make clear that that standing alone, the 22 elements of the malicious prosecution claim as 23 opposed to the abuse of process claim, which I 24 will handle separately, will not muster in summary 25 judgment in my view. www.phippsreporting.com 888 811-3408 001234 EFTA00613531 25 1 MR. KING: Thank you. 2 Then let me focus, then, on the litigation 3 privilege, Judge, since that's the key issue that 4 the Court is dealing with today. 5 THE COURT: Thank you. 6 MR. KING: It is our position that a 7 conflict currently exists with regards to the 8 issue whether the litigation privilege bars a 9 malicious prosecution claim. And 2 have cited to 10 the case Olson vs. Johnson, 961 So2d. 356, the 11 Second DCA's opinion in 2007, after both Levin and 12 Echevarria. And it holds that malicious 13 prosecution claims are not barred by the 14 litigation privilege. 15 Then you have Wolfe that stands in 16 contradistinction to that which holds that it 17 does. Although, as I'll point out in a few 18 moments, one of -- Judge Shepherd in his 19 concurring opinion doesn't -- he doesn't rely on 20 that, on that theory. 21 Our position is that Olson vs. Johnson sets 22 forth the accurate and more persuasive 23 proposition; that is that it does not bar a 24 malicious prosecution claim. Even though Olson 25 vs. Johnson dealt with complaints by a complaining www.phippareporting.com 888 811-3408 001235 EFTA00613532 26 1 witness in a case that only resulted in a 2 malicious prosecution claim leading to a wrongful 3 arrest, doesn't -- the facts of the case itself do 4 not go so far as to address issues of what happens 5 once a civil complaint is filed. But the 6 proposition that that Olson states is unequivocal; 7 that is the litigation privilege does not apply to 8 malicious prosecution. 9 Now, when we get to Judge Sasser's opinion, 10 which I submit in all of the cases that have been 11 cited by everyone, Judge Sasser's opinion is the 12 most 13 very 14 case 15 16 17 18 19 MR. KING: That is the decision in -- bear 20 with me, Judge. 21 THE COURT: No problem. 22 MR. KING: That is the decision in Johnson 23 vs. Libow, a 2012 -- Westlaw 4068409 in 2012. 24 THE COURT: Okay. 25 MR. KING: It is concise. It's to the cogent, most well-reasoned, and rejects those propositions that two judges in the Wolfe adopt. So let me -- let me just suggest to the Court -- THE COURT: Which Judge Sasser? I'm trying to figure out which one you are talking about. www.phippsreporting.com 888 811-3408 001236 EFTA00613533 27 1 point. And I'll address that in just a few 2 moments. 3 THE COURT: All right. Thanks. 4 MR. KING: Now, what's interesting about 3 Wolfe, and what's almost inexplicable about Wolfe, 6 is that it ignores its own prior precedent by 7 Judge Cope in his concurring decision in Boca 8 Investors Group vs. Potash, 835 So2d. 273. 9 THE COURT: That was a concurring opinion? 10 MR. KING: Yes, that was his concurring 11 opinion. 12 THE COURT: Okay. 13 MR. KING: Of course, as you know, 14 Cudge Cope is very well-respected and his opinions 15 are very articulate, but it also ignores a 16 Third DCA's full panel's decision in SCI Funeral 17 Servcies Inc. vs. Henry, 839 So2d. 702 at Note 4, 18 Third DCA opinion in 2000, both of which both 19 Judge Cope and the panel in the SCI case note that 20 the Supreme Court's citation in Levin to Wright 21 vs. Yurko, which I cited in the memorandum, which 22 was a Fifth DCA decision back in 1984, implicitly 23 24 25 recognizes -- that is the Supreme Court itself implicitly recognizes that malicious prosecution claims are not subject to the litigation www.phippsreporting.com 888 811-3408 001237 EFTA00613534 28 1 privilege. 2 And if you read Wright vs. Yurko, you read 3 Judge Cope's concurring opinion, and you read the 4 panel's footnote in SCI, one should not come up 5 with any other conclusion other than that's what 6 the Supreme Court did. So you have Wolfe standing 7 in contradistinction to its own -- to its own 8 precedent, which they don't address at all in Wolfe, and it stands importantly in 10 contradistinction to the Supreme Court's own 11 position on that -- on that doctrine. 12 I -- I would dare say that the Third 13 District will always stand alone on that 14 proposition. Any other district court which is 15 1.6 17 18 19 20 21 22 23 24 25 going to undertake this issue will not follow that ruling. And the Supreme Court itself, if it ever gets on the cert's jurisdiction, will not either. Other courts have likewise commented that the litigation privilege would not bar a malicious prosecution claim. I have cited you to the decision of Judge Corrigan in North Star Capital Acquisition, LLC vs. Krig, 611 F.Supp.2d 1324 (M.D. Fla. 2009), another decision that was decided after Levin and Echevarria. And the court in that case discussed -- let me just for a moment www.phippereporting.com 888 811-3408 001238 EFTA00613535 29 1 here -- 2 Well, the bottom line is Judge Corrigan 3 commented about the litigation privilege and 4 stated that neither malicious prosecution nor 5 abuse of process would be barred by the litigation 6 privilege. 7 I have also cited the Cruz vs. Angelides, 8 the Middle District of -- I'm sorry, 9 574 Sold. 278, Second DCA 1991, which also 10 suggests that malicious prosecution would not be 11 barred by the litigation privilege. 12 But as I've indicated, the most cogent and 13 well articulated opinion on this subject is 14 Judge Sasser's opinion in Johnson vs. Libow. She 15 16 17 18 19 20 21 22 23 24 25 expressly revoked the arguments that are raised by Wolfe, which arguments, of course, are opposed by the assertion in Olson. The court noted the following -- and these are the very compelling reasons why Wolfe would not apply to a malicious prosecution claim. As she said, "Levin involved actions taken during the course of proceedings" and as you remember what Levin was; that was a situation where there was a motion to disqualify counsel. Then ultimately, when they didn't call counsel, www.phippsreporting.com 888 811-3408 001239 EFTA00613536 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 30 they filed a separate interference claim and the court barred that on the litigation privilege. But the court stated that when you're dealing with the malicious prosecution lawsuit, it's fundamentally different. It involves the filing of a baseless action against a defendant. And the purpose of a malicious prosecution action is to prevent vexatious prosecution or litigation. "The purpose of the litigation privilege," she stated expressly, "is not to preclude the tort of malicious prosecution. And if the litigation privilege was applicable to the filing of a suit, the tort of malicious prosecution would not survive." And as the Court is well aware, the malicious prosecution has been recognized as 17 it's an ancient tort in Florida. It's always been 18 around. The Supreme Court has addressed it in the 19 past specifically. And one cannot lightly accept 20 the proposition that the Supreme Court, which 21 itself has indicated -- implicitly indicated at 22 least that the litigation privilege would not bar 23 a malicious prosecution claim. That the Supreme 24 Court itself would not adhere to the those rulings 25 and overturn a century of law recognizing the tort www.phippsreporting.com 888 811-3408 001240 EFTA00613537 31 1 of malicious prosecution. 2 We also submit that Wolfe is 3 distinguishable because the litigation privilege 4 was applied to the attorneys in that case. The 5 attorneys were involved, and I need not go over 6 all of the facts of the case, but it was a very, 7 very brief involvement by the lawyers. As I 8 suggested in the brief, lawyers may end up being 9 given a broader immunity under the litigation 10 privilege because of their obligations to their 11 clients to carry out their legal and ethical 12 responsibilities. 13 And the facts of that case are somewhat 4 compelling in that the attorneys who make a brief 15 appearance shouldn't be exposed to a:: of this. 16. Maybe their -- maybe the thought process was 17 something along the lines, well, we don't want to 18 put the attorneys through this. This should be 19 cut out right at the beginning. 20 THE COURT: Off the record for one second. 21 MR. KING: Yes. 22 (Discussion off the record.) 23 MR. KING: And I cited the Taylor case, 24 which was a Supreme Court of Idaho decision, which 25 discusses that issue and which shows that for www.phippereporting.com 888 811-3408 001241 EFTA00613538 32 1 those very reasons that I identified, lawyers 2 should have a greater opportunity to -- 3 opportunity to seize upon immunity which would cut 4 off their liability early on. So whether it's a 5 qualified immunity or absolute immunity discussed 6 in that decision, whatever, perhaps that was 7 the -- a factor or although they don't cite to 8 Taylor, but maybe that's a factor in Wolfe. 9 THE COURT: I guess I understand your 10 position that you're taking in terms of in the 11 Wolfe context, because as I indicated to 12 Mr. Brewer during his argument, the court made it 13 a point to indicate the very brief involvement of 14 the Kenny Knachwalter firm. But since I did ask 15 Ty question off the record, I'll indicate what I :6 did ask was whether or not Mr. Epstein was :7 represented at all times material to the 1.8 allegations now made by Mr. Edwards. And Mr. King 19: has answered in the affirmative. 20 I'm having difficulty then with trying to 21 reconcile why the claim was only brought against 22 Mr. Epstein as opposed to his attorneys, 23 especially where the emphasis has been made quite 24 strongly that despite the settlements that went on 25 Epstein, essentially himself as related to the www.phippsreporting.com 888 811-3408 001242 EFTA00613539 33 1 court, was the guiding influence here in 2 proceeding against Mr. Edwards in a -- for a -- 3 for a time period.that you believe is actionable. 4 fait. KING: Well, one response, without going into the entire tortured history of 6 Mr. Epstein's actions and the various machinations 7 that he undertook, the initial complaint which 8 charged Mr. Edwards with all sorts of horrific 9 crimes -- fraud, perjury, conspiracy to commit 10 perjury, securities fraud, general fraud, 11 extorsion, all -- all specific crimes that were 12 alleged against him, the lawyers who were involved 13 in that case withdrew. They abandoned those 14 claims. 15 Well, we can't ask them why, but I submit 16 that what happens is the evolution of that case 17 then becomes a case involving merely -- I 18 shouldn't say merely abuse of process, abuse of 19 process. So one response is that's a situation 20