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Page 1 Page 3 IN THE CIRCUIT COURT OF THE 15714 JUDICIAL CIRCUIT IN 1 PROCEEDINGS AND FOR PALM BEACH COUNTY, FLORIDA 2 - - - CASE NO. 501009CA040800XXXXMB AG 3 THE BAILIFF: All rise. Court is now in 4 session. The Honorable David Crow presiding. Jeffrey Epstein, 5 MR. CRITTON: Good morning. Plaintiff. 6 MR. SCAROLA: Good morning, Judge. SCOTT ROTHSTEIN, individually, 7 THE WITNESS: Were here on Epstein versus BRADLEY J. EDWARDS, individually, and L.M. individually, Defendants. / 8 9 10 Rothstein, et al. So, I've read the materials you guys submitted on both sides and also read the counterclaim. HEARING BEFORE. THE HONORABLE 11 MR. SCAROLA: Thank you. We rest. DAVID F. CROW 12 MR. CRITTON: When he tries to talk, PLAINTIFFS MOTION FOR JUDGMENT ON THE PLEADINGS OR 13 remember that, Judge Crow. IN THE ALTERNATIVE A MOTION FOR SUMMARY JUDGMENT 0114 THE COURT: Go ahead. THE COUNTERCLAIM 15 MR. CRITTON: May it please The Court. 16 Your Honor, Bob Critton on behalf of Tuesday, May II, 2010 Palm Beach County Courthouse 17 Mr. Epstein. West Palm Beach, Florida 31401 18 Basically ifs a motion for judgment on 8:15 - 8:32 am. 19 the pleadings or in the alternative a motion 20 for summary judgment on the counterclaim. I 21 think it's more appropriately a summary Reported By: Cynthia Hopkins, RPR, FPR 22 judgment than it is a claim for a judgment on Notary Public, State of Florida 23 the pleadings. Prose Court Reporting Job No . 1783 24 25 Mr. Edwards argues through his counsel that, in essence, Mr. Epstein's a bad person. Page 2 Page 4 APPEARANCES: 1. So no matter what happens in any case, 2 3 On behalf of the Plaintiff: 2 Mr. Epstein loses. It's a consistent argument ROBERT D. CRITTON, JR, ESQUIRE 3 I hear all the time. The good part about it is 4 BURMAN, CRITTON, LUTTIER & COLEMAN, LLI' 4 we get to apply the law to the facts of the 303 Banyan Boulevard 5 case and therefore, I think that very clearly 5 Suite 400 West Palm Beach, Florida 33401 6 my client is entitled to a summary judgment. 6 Phone: 561.842.2820 7 The reasons there are as follows: And I 7 8 am going to touch first a little bit on the 8 On behalf of the Defendants: 9 response because they claim that there is 9 JACK SCAROLA, ESQUIRE SEARCY, DENNEY, SCAROLA, 10 additional discovery to be done, but they don't 10 BARNHART & SHIPLEY, P.A. 11 identify any discovery that they wish to do. 2139 Palm Beach Lakes Boulevard 12 The depositions of Mr. Edwards have been take:.. 11 West Palm Beach, Florida 33409 13 It has not been completed because we have a 12 Phone: 561.686.6300 14 motion to compel which is set in front of The 13 15 Court or at least we filed. The deposition of 14 16 Mr. Epstein is done. 15 17 No doubt neither portion of Mr. Edwards 16 17 18 nor of Mr. Epstein's affidavits were filed. 18 19 There is no deposition testimony of any kind 19 20 opposing that says that somehow Mr. Epstein was 20 21 using the process; that is, the complaint 21 22 22 post-filing for the purposes for a bad purpose 23 23 which is the key legal issue in all of these 24 24 cases; that is, something has to occur after 25 25 the issuance of process, nor have any 1 (Pages 1 to 4) (561) 832-7500 PROSE COURT REPORTING AGENCY, INC. (561) 832-7506 Electronically signed by cynthia hopkins (601-0614764934) 1711dtte99-3413•48314360.213afab2oe454 EFTA00724269 Page 5 1 affidavits been filed. 2 The key portions or the operative portions 3 of the allegations in the complaint directed to 4 my client in the counterclaim are really 5 Paragraphs 9, 10, and II. And the key is the 6 action was filed for the sole purpose to 7 intimidate Edwards into settling these cases. 8 In Paragraph 10 they talk about there is a 9 lack of notice under the criminal, tinder the 10 Civil Theft Statute 772.11. One, we think it's 11 not applicable. Two is we don't think notice 12 is required. It's part of the -- that is, it 13 doesn't go to the issue of the motion for 14 summary judgment. 15 Secondly, there is no 772.11 claim in the 16 case. The closest thing to it is the 772.103 17 and 104 claim that has been filed, therefore, 18 it is not applicable. 19 And in Paragraph 11 of the counterclaim 20 they say: Epstein has ulterior motives and 21 purposes in exercising such illegal, improper, 22 or perverted use of the process. 23 In this particular instance, as I 24 indicated I think that — of course, well, you 25 are familiar with the summary judgment Page 7 1 denied error in granting summary judgment. 2 There is nothing to suggest that anything 3 occurred post-filing. 4 And they go down and they cite relying on 5 McMurray versus U-Haul which is the Fourth 6 District case, which holds that the mere filing 7 of a complaint and having process served is not 8 enough to show abuse of process. The trial 9 court properly found that Russell showed — and 10 again this is in the McMurray case — the 11 non-existence of a genuine issue of material 12 fact and dispute. Furthermore Russell 13 established that Della-Donna failed to allege 14 and there was no evidence of any act by Russell 15 which constitutes a misuse of the process after 16 it was served. 17 And again if you want, the court goes to 18 the McMurray case, the heart of the McMurray 19 case which is the Fourth DCA case at Footnote 20 2, I'm sorry, Keynote 2. But within the 21 confines of the case they describe the 22 allegations, abuse of process. Then they go on 23 and they talk about why it's not applicable and 24 they say, abuse of process — and they talk 25 about: In essence the alleged that the Page 6 1 standard. 1 won't belabor that issue, but the 1 2 key issue is there any evidence by Mr. Epstein, 2 3 of anyone that Mr. Epstein was using the 3 4 process or using the lawsuit post-filing of the 4 5 lawsuit; that is, other than the filing the 5 6 lawsuit for a wrongful purpose or for a 6 7 wrongful act. And in this instance the 7 8 allegations of the counterclaim, and again, the 8 9 complete lack of any supporting affidavit 9 10 indicates, affidavits or testimony, indicates 10 11 that there is absolutely no evidence in that 11 12 regard. 12 13 The two key cases I believe that are 13 14 applicable here are the McMurray case versus 14 15 U-Haul which we have cited, 425 So.2nd 1208; 15 16 and the Della-Donna case which is 512 So.2nd 16 17 1051. Within the Della-Donna case there were 17 18 claims for malicious prosecution. And it's a 18 19 Fourth District, so I am going to go to that 19 20 case first. 20 21 They sued for malicious, Mr. Della-Donna 21 22 sued for malicious prosecution, abuse of 22 23 process, and liable. And at page, at the 23 24 Footnotes 5, 6, and 7 doaling with the abuse of 24 25 process claim, the court said the trial court 25 —......,... .—,...... Page appellee's complaint had been filed and summons issued for a multitude of improper purposes, to bankrupt Mr. McMurray, to coerce him to pay monies, to coerce settlement, to coerce concessions from him and appellee's competitor, to bankrupt a competitor to get back at him, all of these parade of horribles under these circumstances. And they said: As we discussed hereinafter, this parade of horribles may well sustain an ultimate action against appellee for malicious prosecution should it not prevail on its complaints against the appellants. However, all appellee has done is file a complaint and have process served upon appellee. Abuse of process in this case requires more; namely, an act which constituted misuse of the process after it was issued. There is no such allegation of a post-issuance act other than service of what was issued under the circumstances. And it goes on and describes abuse of process. In Am.Jur. it stays: An abuse of process differs from an action for malicious erosecution and that the later is concerned 2 (Pages 5 to 8) (561) 832-7500 PROSE COURT REPORTING AGENCY, INC. (561) 832-7506 Electronically signed by cynthia hopkins (601-0614764934) 176dkk99.34be-4e31•b350.28atab2ao454 EFTA00724270 Page 9 1 with maliciously causing process to issue, 2 while the former is concerned with the improper 3 use of the process after it has been issued. 4 My last point, Your Honor, is they cite a 5 case called Scozari, and within the Scozari 6 case it involved abuse of process involving 1 extortion. The difference in that case and 8 what that case turned on is Scozari, within the 9 confines of the case, testified that he was 10 using the lawsuit as a bargaining chip to 11 resolve a collateral custody dispute. So he 12 testified within the case: I am using this 13 case as a bargaining chip. 14 So, what he is doing with that process 15 after it is issued is to use it as a bargaining 16 process within the custody case. And the 17 second aspect is he also was trying to get a 18 lien imposed post-service of process or service 19 of process itself. 20 So very clear in Scozari, which cites 21 again back to Della-Donna and it cites to 22 McMurray is there was something that occurred 23 after the issuance. And I think based on, 24 based upon at least the facts as they exist at 25 this point, there is no basis for the abuse of Page 11 1 It is not our obligation to come forward 2 at this point to demonstrate that all of the 3 allegations of the complaint can, in fact, be 4 substantiated. It is the burden of the moving 5 party, and I am telling the Court something 6 that the Court is well aware of, but it's his 7 burden to demonstrate that those allegations 8 cannot be substantiated by competent evidence. 9 The only depositions that have been taken 10 in this case are the depositions of Mr. Epstein 11 and the depositions of, and the deposition of 12 Mr. Edwards. Mr. Epstein did what Mr. Epstein 13 has been doing and knew he would do at the time 14 of filing of this complaint; and that is, he 15 refused to provide absolutely any substantive 16 information about anything and asserted his 17 Fifth Amendment privilege. There is no 18 substantive evidence from Mr. Epstein at all. 19 THE COURT: What is the case that you are 20 relying upon? I mean, I am familiar with the 21 general proposition that abuse of process as 22 compared to malicious prosecution, it is not a 23 matter of whether the case has merit to begin 24 with but there is something after the filing of 25 the suit for which you're seeking something I Page 10 1 process cause, cause of action which is the 2 only cause of action pled. And we're entitled 3 to a summary judgment and it's a matter of law. 4 Thank you. 5 THE COURT: Thank you. Yes, sir. 6 MR. SCAROLA: Good morning, Your Honor. 7 THE COURT: Good morning. 8 MR. SCAROLA: Your Honor, this case 9 presents a very clear issue for determination 10 by the Court. If there is a factual and legal 11 basis for the filing of an action, then the 12 existence of an improper motive does not 13 provide the basis alone for the filing of an 14 abusive process case. If, however, there is no 15 factual basis and no legal basis for the filing 16 of a cause of action, and the issuance of 17 process is done without any reasonable 18 justification for the purpose of accomplishing 19 some extortionate objective, then the case law 20 says there is an abuse of process. 21 Now, discovery in this case has not been 22 completed. The issuance of a summary judgment 23 under these circumstance would clearly be 24 premature, and Mr. Critton has reversed the 25 burden of Proof on a summary iudgment matter. Page 12 1 that is for improper purpose. 2 Do you understand what I am saying? And 3 like if you sued, if even though the lawsuit 4 may have collateral effect in doing something, 5 ifs not necessarily the fact that you filed 6 the lawsuit It may be a malicious prosecution 7 if it is thrown out, but it doesn't constitute 8 an abuse of process. Abuse of process, you 9 file a suit and then as a part of that suit, 10 you issue some kind of subpoena to somebody in 11 order to force them to stop prosecuting a 12 criminal procedure. 13 MR. SCAROLA: Those are the cases that the 14 Counter-Defendant relies upon and has cited to 15 the Court. 16 THE COURT: Right. 17 MR. SCAROLA: The case upon which we rely 18 is the Scozari case and the Miami Herald 19 Publishing Company versus Ferre case. They are 2O cited in our memo. And the holding in Scozari 21 that is instructive here is -- this is a Third 22 DCA case: If there was a reasonable basis in 23 law and fact to initiate the judicial 24 proceedings, then processes were justified even 25 though they may have served some other 3 (Pages 9 to 12) (561) 832-7500 PROSE COURT REPORTING AGENCY, INC. (561) 832-7506 Eisetronleally signed by eynthim bodkins (001.051.9704934) 1760•9944bewits31-146048afebbie464 EFTA00724271 Page 13 1 collateral purpose. And the court talks about 2 the fact that the purpose may have been 3 entirely improper, but if you had a reasonable 4 basis for filing the claim, no abuse of 5 process. 6 The important part for our purpose today 7 is the qualification of that statement. The 8 court says: However, if there was no 9 reasonable basis in law and fact to bring the 10 action, and in this case it was to impress a 11 lien upon property, and this was done without 12 any reasonable justification under the law and 13 to force and to compel the appellant to resolve 14 some custody dispute, induce the appellant to 15 pay money, or tie up the appellant's property, 16 then there has been an abuse of process simply 17 by the filing of the complaint itself. 18 THE COURT: And you have alleged in your 19 complaint that there is absolutely no evidence 20 to support these, and therefore are false 21 assertions? 22 MR. SCAROLA: Yes, sir. That allegation 23 specifically appears in the complaint, no 24 reasonable basis whatsoever, an expectation 25 that he was going to assert his Fifth Amendment Page 15 1 effort to try to intimidate those Plaintiffs 2 who are suing Mr. Epstein and the lawyers who 3 are bringing those suits, letting them know 4 that this very wealthy individual is willing to 5 stop at nothing in order to try to deter them 6 from pursuing their just claims. 7 So,1 suggest to you that these facts are 8 extraordinary. They are unique. And they fall 9 well within the recognized exception to the 10 general rule upon which the Counter-Defendant 11 is relying and seeking summary judgment. 12 THE COURT: Okay. Thank you. Briefly, I 13 have another hearing. Thirty seconds, 14 Mr. Critton. 15 MR. CRITTON: That should be more than 16 enough for a rare occasion. 17 THE COURT: Seldom enough for you. 18 MR. CRITTON: There is no discovery, again 19 Plaintiffs counsel or Mr. Scarola has told you 20 no discovery that needs to be done under the 21 circumstances. lie has filed nothing in 22 response. 23 Look at the Scozari case because I think 24 if the Court looks at that case, there is no 25 exception to the rule what Scorsese -- it's not 4 Page 14 1. right and could not possibly support this 2 claim. 3 THE COURT: And the burden now would be on 4 him to show that there was some basis for it 5 rather than you to show -- 6 MR. SCAROLA: That's our position. That 7 is what it comes down to. And he has failed to 8 meet that burden particularly as he has 9 acknowledged the only discovery in this case is 1.0 basically no discovery at all. 11 When he took Mr. Edwards' deposition for 12 purposes we contend of simply trying to get 13 discovery in this case that he would not have 14 been permitted to get in the underlying actions 15 that Mr. Edwards is prosecuting, Mr. Edwards 16 appropriately asserted attorney-client 17 privilege and work-product privilege. 18 This lawsuit, and if you look at the 19 allegations of the complaint, it's full of 20 speculation about things that Mr. Edwards may 21 have done because there is no evidence that 22 Mr. Edwards ever did anything wrong at all. 23 This lawsuit was nothing but a press 24 release under the cloak of the immunity that 25 attaches to the filing of a complaint, and an (561) 832-7500 Page 16 1 Martin Scorsese -- what Scozari says is it says 2 there is no abuse of process however when the 3 process is used to accomplish the result for 4 which it was created, i.e., filing a lawsuit 5 for damages which it has done, regardless of an 6 incidental or concurrent motive or spite or 7 ulterior purpose. 8 It goes on and on and Headnote 8 and not 9 the headnote but the actual facts, and it says 10 this case is different. it is not an exception 11 to the rule. The rule is the rule. But this 12 case is different because they filed testimony 13 of Scozari, of Barone (phonetic). 14 THE COURT: Which showed his purpose to be 15 to do something other than the purpose for 16 which the lawsuit was filed. 17 MR. CRITTON: Correct 18 THE COURT: Okay. 19 MR. CRITTON: I am using it as a 20 bargaining chip. 21 THE COURT: Okay. Stay with me. He has 22 alleged that. Okay. He has alleged that. He 23 has alleged exactly what you just said the 24 testimony was in that case. 25 MR. CRITTON: Okay. Butt - 4 (Pages 13 to 16) PROSE COURT REPORTING AGENCY, INC. (561) 832-7506 Electronically signed by cynthia hopkins (607.061.976.2934) 176dtie99-34be-4x31-b350-2Safab2ae4154 EFTA00724272 Page 17 Page 19 1 THE COURT: It's your motion. It's your 1 CERTIFICATE 2 burden to show that's not true; not his burden 2 3 to show it is true. 3 STATE OF FLORIDA 4 MR. CRITTON: But the cases say if they 4 COUNTY OF PALM BEACH 5 allege an ulterior purpose; Mr. Epstein filed 5 6 this case for an ulterior purpose. 6 7 THE COURT: Mr. Critton, you're 7 I, Cynthia Hopkins, Registered Professional 8 misunderstanding me. What he is saying is that 8 Reporter and Florida Professional Reporter, State o: 9 you not, did not file it for an ulterior 9 Florida at large, certify that I was authorized to 10 purpose. The whole purpose here is you had no 10 and did stenographically report the foregoing 11 basis for filing this suit. That's what he is 11 proceedings and that the transcript is a true and 12 saying, which is the same thing as if he had 12 complete record of my stenographic notes. 13 your client say under oath, I did this for no 13 14 Dated this 26th day of May, 2010. 14 other purpose than to, this, just like in that 15 15 case. And it's your obligation at summary 16 Cie " ' 41-1 16 judgment to come forward and say, no, that's Cynthia Hopkins, RP 17 not true. 17 18 MR. CRITTON: I disagree, Your Honor, 18 Job #1783 19 because under the circumstance what these cases 19 20 say, if the case was filed for its apparem Y0 21 purpose with the four causes of action -- 21 22 THE COURT: That's not what it says. 22 23 That's not what his complaint says. 23 24 Mt CRITTON: Well, of course. It says 24 25 it's filed for an ulterior purpose. 25 Page 18 1 THE COURT: No. no, no, no. He says more 2 than that. He says there is no, absolutely no 3 factual basis for it therefore there can be no 4 legitimate purpose for it. 5 MR. CRITTON: But under those 6 circumstances, there has been no motion to 7 dismiss. He doesn't come in and argue that 8 under the circumstances, Judge. And under that 9 set of circumstances, every case would be is 10 there is really no factual basis for it under 11 those circumstances. 12 THE COURT: I'm not sure. I will go back 13 and look at these cases again. Do you-all have 14 a proposed order? 15 MR. SCAROLA: I have a blank order. 16 THE COURT: I do understand the issue and 17 I am going to look at the Scozari case. 18 MR. CRITTON: Scozari. 19 THE COURT: Whatever it is. 20 MR. SCAROLA: S-c-o-r-a-z-l. 21 THE COURT: I understand you, Mr. Critton. 22 I have been there before. I understand the law 23 issue, but I am going to look at this case. 24 MR. CRITTON: All right. 25 (The hearing was concluded.) 5 (Pages 17 to 19) PROSE COURT REPORTING AGENCY, INC. Electronically signed by cynthia hooking (601.051.976.2934) 175d8099-34be-4a31-12350-28afab2.4454 EFTA00724273