EFTA00612483.pdf

IN THE DISTRICT COURT OF APPEAL OF FLORIDA FOURTH DISTRICT CASE NO. 4D14-2282 BRADLEY J. EDWARDS, Appellant, v. JEFFREY EPSTEIN, Appellee. MOTION FOR LEAVE TO FILE SUPPLEMENTAL ARGUMENT The appellee, Jeffrey Epstein, respectfully moves for leave to file the supplemental argument contained herein on the following grounds: 1. The trial judge entered summary final judgment in favor of Epstein on the ground that the litigation privilege bars the malicious prosecution and abuse of process claims filed against Epstein by the appellant, Bradley J. Edwards. The trial judge relied in part upon the then binding precedent of Wolfe v. Foreman, 128 So. 3d 67 (Fla. 3d DCA 2013) (holding that the litigation privilege applies to causes of action for malicious prosecution and abuse of process). Edwards appealed and is challenging the final judgment solely as to the malicious prosecution claim. 2. After the parties' briefs were filed, this Court issued its decision in Fischer v. Debrincat, 169 So. 3d 1204 (Fla. 4th DCA 2015), declining to follow Wolfe and EFTA00612483 certifying conflict with Wolfe regarding application of the litigation privilege to a cause of action for malicious prosecution. 3. Shortly thereafter, oral argument was set for October 20, 2015. 4. Edwards filed a motion to cancel the oral argument, arguing that based upon Fischer, this Court should summarily reverse the order granting summary judgment as to the cause of action for malicious prosecution. 5. Citing health problems, Epstein's counsel, John Beranek, moved for a 30- day extension of time to file a response, noting the possibility that new counsel might have to appear on behalf of Epstein. 6. The undersigned counsel for Epstein entered his appearance on September 17, 2015 and moved to substitute for Epstein's counsel. The undersigned contacted Edwards' counsel seeking his consent to an additional brief extension of time for filing Epstein's response to the motion to cancel oral argument, indicating that Edwards' motion would be opposed based in part upon the tipsy coachman doctrine. An agreement could not be reached. 7. On September 18, 2015, this Court granted Epstein's motion to substitute counsel. 8. On the same day, Edwards moved to withdraw his motion to cancel oral argument. -2- EFTA00612484 9. Epstein respectfully seeks leave to file the accompanying supplemental argument in view of the following: a. Epstein's prior counsel relied in the answer brief almost exclusively upon Wolfe for affirmance. Fischer was issued by this Court after Edwards' reply brief was filed, thereby dramatically changing the landscape of this appeal. b. Edwards filed a motion to cancel the oral argument based upon Fischer. In the motion, Edwards presented his argument why Fischer is dispositive in favor of reversal. Edwards moved to withdraw the motion after learning that the undersigned intended to file a response arguing why Fischer is distinguishable and why affirmance is warranted upon an alternative ground. c. "Review of an order granting summary judgment is de novo." Gomez v. Fradin, 41 So. 3d 1068, 1071 (Fla. 4th DCA 2010). Summary judgment for a defendant in a malicious prosecution action is appropriate based upon the existence of probable cause for the original proceeding even where some of the facts are in dispute, as along as there is no dispute with respect to the material facts on that element. Dorf v. Usher, 514 So. 2d 68 (Fla. 4th DCA 1987). In such a case, probable cause becomes a question of law for the court. Id. d. Epstein moved for summary judgment not only on the ground of litigation privilege, but also Edwards could not, as a matter of law, establish an -3- EFTA00612485 essential element of the malicious prosecution cause of action, namely, the absence of probable cause for Epstein's original proceeding. That is to say, the material facts that were not in dispute in the case at bar were sufficient, as a matter of law, to meet the minimal threshold required to establish probable cause for Epstein's original proceeding, so as to defeat Edwards' cause of action for malicious prosecution upon a motion for summary judgment. The undisputed material facts establishing probable cause for Epstein's lawsuit against Edwards were extensively detailed and documented in Epstein's motion for summary judgment (R. 808-818) and also recounted in his affidavit in support of the motion for summary judgment. (R. 833- 837). When argument at the summary judgment hearing commenced with the facts underlying probable cause (SR. 1227-1229), the judge interrupted, stating: "But 'just feel like the probable cause aspect just carries with it too many factual issues for me to rule as a matter of law, so I don't think that I can grant relief on the probable cause issue vel non. So if you will, please move on ...." (SR. 1230). After some additional discussion, the judge clarified his ruling as follows: "... I believe that there are questions of fact related to the probable cause issue...." (SR. 1234). From that point on, the hearing focused solely upon the litigation privilege issues. e. As noted, the parties' briefs in this appeal were filed before Fischer was decided. Although the focus of Epstein's answer brief was almost entirely that -4- EFTA00612486 summary judgment was mandated by Wolfe, Epstein did note in his answer brief that there were alternative grounds for affirmance and therefore he "reassert[ed] all argument as delineated in his original motion for summary judgment and relies thereupon." Answer Brief of Epstein at 7, n.1 (emphasis supplied). f. There is a dispositive alternative ground for affirmance, namely, the failure of Edwards' malicious prosecution claim based upon the existence ofprobable cause as a matter of law. This question of law is properly before this Court under the long-standing tipsy coachman doctrine that a reviewing court is bound to review the entire lower court record and must affirm a lower court's judgment if it is legally correct, regardless of the trial court's reasoning in reaching its conclusion. See, e.g., Berg v. Young, No. 4D13-2364, 2015 WL 5125418 (Fla. 4th DCA Sept. 2, 2015) ("[T]he final judgment may be affirmed pursuant to tipsy coachman doctrine because the trial court `reache[d] the right result, but for the wrong reasons.") (quoting Advanced Chiropractic & Rehab. Ctr. Corp. v. United Auto. Ins. Co., 103 So. 3d 866, 869 (Fla. 4th DCA 2012)); see also Shands Teaching Hosp. and Clinics, Inc. v. Mercury Ins. Co. of Fla., 97 So. 3d 204, 207 (Fla. 2010) ("Because the record supports the trial court's judgment on this alternative theory, we conclude that the trial court properly ruled in favor of Shands."); Applegate v. Barnett Bank of Tallahassee, 377 So. 2d 1150, 1152 (Fla.1979) ("Even when based on erroneous reasoning, a -5- EFTA00612487 conclusion or decision of a trial court will generally be affirmed if the evidence or an alternative theory supports it."). g. Therefore, "if a trial court reaches the right result, but for the wrong reasons, it will be upheld if there is any basis which would support the judgment in the record." Dade Cnty. Sch. Bd. v. Radio Station WQBA, 731 So. 2d 638, 644 (Fla.1999). "This rule applies in cases of summary judgments as well." Landis v. Allstate Ins. Co., 546 So. 2d 1051, 1053 (Fla. 1989); see also Rivernider, supra (holding that although trial judge erred in granting summary judgment based upon the litigation privilege, affirmance was nevertheless required upon an alternative ground). h. Here, although the trial judge based his summary judgment in favor of Epstein solely upon the litigation privilege, the record supports the judgment under the alternative theory that the essential element of absence of probable cause for Epstein's original proceeding is lacking in Edwards' malicious prosecution claim as discussed below. i. Resolution of the probable cause issue in this appeal also serves the interest of judicial economy as it would be a waste of time, expenses and resources to reverse and remand for a trial if a judgment entered in favor of Edwards would be subject to reversal on a ground this Court can now resolve based upon a summary judgment record that is fully developed on the pleadings upon the issue of probable -6- EFTA00612488 cause which presents a question of law. See Robertson v. State, 829 So. 2d 901, 907 (Fla. 2005) ("The key to the application of this doctrine of appellate efficiency is that there must have been support for the alternative theory or principle of law in the record before the trial court."). WHEREFORE, the appellee respectfully requests leave to present the following supplemental argument. SUPPLEMENTAL ARGUMENT Edwards argued in his motion to cancel oral argument that Fischer is dispositive in favor of reversal. Although Edwards filed a motion to withdraw his motion to cancel oral argument, Edwards will undoubtedly make the same claim at oral argument. For two reasons, Epstein disagrees that reversal is mandated by Fischer. First, Fischer is distinguishable. Fischer holds that the litigation privilege bars a malicious prosecution action only where all of the elements of the malicious prosecution claim are satisfied. Here, the element of absence of probable cause is not satisfied. Second, and related to the first reason, affirmance is warranted upon an alternative ground, namely, that Edwards' malicious prosecution claim fails due to the existence of probable cause for Epstein's underlying lawsuit as a matter of law. Background Facts In 2009, Epstein tiled a four-count complaint against three defendants -7- EFTA00612489 including: Edwards, and his then partner Scott Rothstein. The four counts alleged: (1) violations of Florida's Civil Remedies for Criminal Practices Act; (2) violations of Florida's Racketeering Influenced and Corrupt Organization Act; (3) abuse of process; and (4) fraud. Epstein's complaint set forth details of a Pont scheme that Edwards, Rothstein, and others perpetrated through their law firm, Rothstein, Rosenfeldt, and Adler, P.A. ("RRA"). (It 1-36).' The scheme included fraudulent promises to investors of multi-million dollar recoveries against Epstein from various civil actions. Shortly before Epstein's complaint was filed, Edwards' partner, Rothstein, was disbarred by the Supreme Court of Florida, and charged by the United States Government with various federal crimes arising out of the scheme. Epstein eventually narrowed his claims against Edwards in his second amended complaint to include a single cause of action against Edwards for abuse of process. (R. 300-316). In response to Epstein's original complaint, Edwards filed an answer and counterclaim. (R. 121-136). The counterclaim alleged one cause of action for abuse of process. (It 132-135). Edwards subsequently amended the counterclaim to add malicious prosecution. (R. 330-337). The malicious prosecution claim was based solely upon the mere filing of the complaint by Epstein against Edwards. (R. 750- ' The symbol "R" designates the record on appeal, "SR' designates the supplemental record, and "Ex." designates the two exhibits attached hereto. -8- EFTA00612490 755). Epstein denied liability as to each of the two causes of action alleged by Edwards. Epstein also asserted affirmative defenses, including the litigation privilege. (R. 776-785). Epstein eventually voluntarily dismissed his lawsuit against Edwards without prejudice. Epstein moved for summary judgment on several grounds (R. 806-832), including that Edwards' abuse of process and malicious prosecution claims were bared by the litigation privilege and that the malicious prosecution cause of action failed on the essential element of absence of probable cause for Epstein's underlying action. The trial judge entered a written order granting Epstein's motion for summary judgment (R. 1202-1204) finding that because Edwards conceded that all of the misconduct alleged on the part of Epstein occurred during the course of judicial proceedings and related to the proceedings, the litigation privilege applied to both the abuse of process and malicious prosecution claims, and also finding that Levin, Middlebrooks, Moves & Mitchell v. U.S. Fire Ins. Co., 639 So. 2d 606 (Fla. 1994), Echevarria, McCalla, Raymer, Barrett & Frappier v. Cole, 950 So. 2d 380 (Fla. 2007), and Wolfe provided "binding precedent in this area of law." (R. 1203).2 Final Levin and Echevarria hold that the litigation privilege must be afforded to any act occurring during the course of a judicial proceeding so long as the act has some relation to the proceeding. See Echevarria, 950 So. 2d at 384 (quoting Levin, 639 So. 2d at 608). At the summary judgment hearing, Edwards conceded that his malicious prosecution claim was not based upon any act occurring outside the judicial proceeding. (SR. 54). The trial judge expressly took Edwards' concession into account in his ruling. (SR. 57). -9- EFTA00612491 judgment was thereafter entered in favor of Epstein (R. 1208) and Edwards appealed. On appeal, Edwards is not challenging the judgment entered against him on his abuse of process claim. Fischer is Distinguishable This Court held as follows in Fischer: The issue presented in this appeal is whether the litigation privilege bars a claim for malicious prosecution. In appellant's malicious prosecution action below, the trial court granted appellees' motion for summary judgment and later entered final judgment against appellant. We reverse and hold that the litigation privilege cannot be applied to bar the filing of a claim for malicious prosecution where the elements of that tort are satisfied. Fischer, 169 So. 3d at 1205 (emphasis supplied). A plaintiff in a malicious prosecution action must satisfy the following six elements: "(1) an original criminal or civil judicial proceeding against the present plaintiff was commenced or continued; (2) the present defendant was the legal cause of the original proceeding against the present plaintiff as the defendant in the original proceeding; (3) the termination of the original proceeding constituted a bona fide termination of that proceeding in favor of the present plaintiff; (4) there was an absence of probable cause for the original proceeding; (5) there was malice on the part of the present defendant, and (6) the plaintiff suffered damage as a result of the original proceeding." Fischer, 169 So. 3d at 1206 (quoting Alamo Rent—A—Car, Inc. v. Mancusi, 632 So.2d 1352, 1355 (Fla.1994)). The holding in Fischer was restated in Rivernider v. Meyer, No. 4D14-819, 2015 WL 5244635 (Fla. 4th DCA Sept. 9, 2015) as follows: -10- EFTA00612492 Recently, in Fischer v. Debrincat, 40 Fla. Weekly D1635 (Fla. 4th DCA July 15, 2015), our Court held that the litigation privilege cannot be applied to bar an action for malicious prosecution where all of the elements o f malicious prosecution are satisfied. Here, in its first finding, the trial court stated that Rivernider's claims were bared by the litigation privilege because the contested acts "occurred during and arose out of and were related to and connected with a pending civil action." However, pursuant to Fischer, the litigation privilege does not apply in such cases unless an element of malicious prosecution is lacking. Accordingly, considering this first finding alone, the trial court erred in granting final summary judgment based upon the litigation privilege. Id. at *2. Here, the element of absence of probable cause for Epstein's original action was "not satisfied" because, as specifically found by the trial judge (SR. 24, lines 9- 12), that element is disputed. The element of an absence of probable cause is also "lacking" as a matter of law for the reasons stated below. Thus, contrary to Edwards' argument in his motion to cancel oral argument, Fischer is materially distinguishable from the case at bar. -11- EFTA00612493 Affirmance Is Warranted upon the Alternative Ground That Edwards' Malicious Prosecution Action Lacks the Essential Element of Absence of Probable Cause for the Original Proceeding as a Matter of Law. The Undisputed Material Facts Epstein's motion for summary judgment (R. 806-832) was supported by his affidavit. (R. 833-837). The affidavit is attached hereto as Ex. 1. In pertinent part, Epstein explained that he filed his action against Edwards based upon the facts described in detail in the section of his summary judgment motion recounting the undisputed material facts. That section is attached as Ex. 2 with only non-substantive edits, including moving the citations to the documentation supporting the facts to footnotes. In pertinent part, Epstein's affidavit alleged the following as probable cause for the filing of the complaint: I filed the Action against Rothstein and Edwards because, based on the facts described below and in the Summary Judgment Motion, I believed at the time of filing my original Complaint that these two individuals, and other unknown partners of theirs at Rothstein, Rosenfeldt, Adler ("RRA"), engaged in serious misconduct involving a widely publicized illegal Ponzi scheme operated through their law firm (the "Ponzi Scheme") that featured the very civil cases litigated against me by Edwards which were being used to defraud potential investors in the Ponzi Scheme. In early November 2009, stories in the press, on the news, and on the internet were legion about the implosion of RRA, the Pont Scheme perpetrated at that firm, and the misuse in the Ponzi Scheme of certain civil cases then being litigated against me by RRA partner, Edwards. The cases Edwards was litigating against me, which are described in the -12- EFTA00612494 Summary Judgment Motion (the "Epstein Cases"), were being used to defraud investors out of millions of dollars and to fund the RRA Pont Scheme. In November 2009, I also became aware of news stories that as a result of the Ponzi scheme at RRA, the Florida Bar had commenced investigations into over one-half of the attorneys employed by RRA. At or about the same time in November 2009, I also became aware that the law firm of Conrad Scherer filed a Complaint against Scott Rothstein and others, Razorback Funding, LLC, et al. v. Scott W. Rothstein, et al., Case No. 09-062943(19) (hereinafter referenced as the "Razorback Complaint"), on behalf of some of the Ponzi Scheme investors. Upon reviewing the Razorback Complaint, I learned that the Razorback Complaint detailed the use of the Epstein Cases (i.e., the cases being litigated against me by Edwards) to defraud investors in the Ponzi Scheme; including, but not limited to, improper discovery practices and other methods to bolster the cases? Among the allegations in the Razorback Complaint regarding the Epstein cases are the following. "Representatives of D3 were offered `the opportunity' to invest in a pre-suit $30,000,000.00 court settlement against Epstein involving a different underage female plaintiff. To augment his concocted story, Rothstein invited D3 to his office to view the thirteen banker's boxes of actual case files in Jane Doe in order to demonstrate that the claims against Epstein were legitimate and that the evidence against Epstein was real. In particular, Rothstein claimed that his investigative team discovered that there were high-profile witnesses onboard Epstein's private jet where some of the alleged sexual assaults took place and showed D3 copies of a flight log purportedly containing names of celebrities, dignitaries and international figures. Because of these potentially explosive facts, putative defendant Epstein had allegedly offered $200,000,000.00 for settlement of the claims held by various young women who were his victims. Additionally, Rothstein used RRA's representation in the Epstein case to pursue issues and evidence unrelated to the underlying litigation but which was potentially beneficial to lure investors into the Ponzi scheme. For instance, RRA relentlessly pursued flight data and passenger manifests regarding flights Epstein took with other famous individuals. RRA also inappropriately attempted to take the depositions of these celebrities in a deliberate effort to bolster Rothstein's lies." (Ex. 2 at 2-3; R. 810-11) -13- EFTA00612495 Prior to my filing the initial Complaint in the Action, I also became aware that the Federal government filed an Information against Scott Rothstein, which included allegations of RRA as an "Enterprise" in which Rothstein and his yet unidentified co-conspirators engaged in a racketeering conspiracy, money laundering conspiracy, mail and wire fraud conspiracy, and wire fraud, and specifically alleged that (a) potential investors were told by Rothstein and other co-conspirators that confidential settlement agreements were available for purchase; (b) settlements were allegedly available in amounts ranging from hundreds of thousands of dollars to millions of dollars and could be purchased at a discount and repaid to the investors at face value over time; (c) Rothstein and other co-conspirators utilized the offices of RRA and the offices of other co-conspirators to convince potential investors of the legitimacy and success of the law firm, which enhanced the credibility of the purported investment opportunity; (d) Rothstein and other co-conspirators utilized funds obtained through the Ponzi Scheme to supplement and support the operation and activities of RRA, to expand RRA by the hiring of additional attorneys and support staff, to fund salaries and bonuses, and to acquire larger and more elaborate office space and equipment in order to enrich the personal wealth of persons employed by and associated with the RRA Enterprise. Prior to filing the initial Complaint in the Action, consistent with the allegations made by the press, in the Razorback Complaint, and in the Rothstein Information, it was clear that the activity in the Epstein Cases being litigated by Edwards intensified substantially during the short six (6) months during which Edwards was a partner at RRA from April 2009 through the end of October 2009.4 Furthermore, during that six (6)-month period, questionable discovery like that detailed in the Razorback Complaint had taken place in the Epstein Cases being litigated against me by Edwards, including Edwards noticing the depositions of famous dignitaries and celebrities such as Bill Clinton, Edwards admitted in his March 23, 2010 deposition that there were between $300,000 and $500,000 in litigation and investigation related expenditures on the Epstein Cases during that short period of time during which he was a partner at RRA. Yet, Edwards testified that expenditures on the Epstein Cases during the preceding eight months, when the cases were not being prosecuted by RRA, may not have even exceeded $25,000. (Ex. 2 at 6; R. 813-14). -14- EFTA00612496 Donald Trump and David Copperfield, who appeared to have no connection whatsoever to any claims of misconduct made by Edwards's clients. Equally consistent with the allegations in the press and in the Razorback Complaint that the Epstein Cases were being deliberately misused for purposes unrelated to the litigation in order to lure investors into the Ponzi Scheme is the fact that on July 24, 2009, Edwards filed a two hundred thirty-four (234) page, one fifty-six (156) count federal complaint against me on behalf of a plaintiff, LM, for whom Edwards was already prosecuting a case against me in state court involving the very same facts alleged in the federal complaint. The complaint was filed in federal court, but was never served on me or prosecuted, leading me to conclude that the only reason it was filed was to enhance the case files shown at the offices of RRA to potential investors in the Pont Scheme. Also while a partner at RRA, Edwards filed a motion in Federal court in which he requested that the court order me to post a fifteen million dollar bond in the Jane Doe case. This case, according to the Razorback Complaint, was being touted at that time to investors in the Pont Scheme. In connection with that motion, Edwards filed papers discussing my net worth and filed supplemental papers purporting to list in great detail my vehicles, planes and other items of substantial value, all at a time when, according to the accounts in the press, the Information and Razorback Complaint, the Ponzi Scheme was unraveling and the need for new investors in the Pont Scheme was becoming urgent. The court rejected the Motion, calling it "devoid of evidence." (R. 833-837). The Record Demonstrates Probable Cause for Epstein's Lawsuit In Goldstein v. Sabena, 88 So. 2d 910 (Fla. 1956), the Supreme Court of Florida explained the meaning of probable cause in the context of a malicious -15- EFTA00612497 prosecution action as follows: Probable cause is defined as `A reasonable ground of suspicion, supported by circumstances sufficiently strong in themselves to warrant a cautious man in the belief that the person accused is guilty of the offense with which he is charged.' Dunnavant v. State, Fla., 46 So. 2d 871, 874 [(Fla. 1950)]. This, as well as other acceptable definitions of the term, indicates that one need not be certain of the outcome of a criminal or civil proceeding to have probable cause for instituting such an action. "Probable cause in the context of a civil suit is measured by a lesser standard than in a criminal suit." Wright v. Yurko, 446 So. 2d 1162, 1166 (Fla.5th DCA 1984). "The standard for establishing probable cause in a civil action is extremely low and easily satisfied." Gill v. Kostroff 82 F. Supp. 2d 1354, 1364 (M.D. Fla. 2000) (applying Florida law). Even in the criminal context, such as when analyzing probable cause to support a search warrant, probable cause can be inferred from the facts. See State v. Powers, 388 So. 2d 1050, 1051 (Fla. 4th DCA 1980). The detailed and documented facts from Epstein's affidavit quoted above and attached as Ex. 1 along with the undisputed facts recounted in his summary judgment motion (Ex. 2) clearly meet the extremely low and easily satisfied standard for probable cause for filing a lawsuit. In the trial court, Edwards argued that probable cause was lacking based upon events that took place after Epstein filed his lawsuit against Edwards. (R. 841-44). -16- EFTA00612498 Such post-lawsuit events are legally irrelevant because the probable cause determination is controlled by the facts relied upon by Epstein at the time he filed his complaint. See Gill v. Kostroff, 82 F.Supp. 2d at 1364 ("A determination of whether probable cause exists is based on the facts known by the defendant in the malicious prosecution action at the time the underlying action was initiated, not some later point in time."). In Yurko, the Fifth District concluded: "The affidavit here shows Yurko reasonably researched and investigated his case, and had a tenable theory to present to the court and jury." 446 So. 2d at 1167. Here, both the affidavit of Epstein and the documented statement of undisputed material facts in the motion for summary judgment show that Epstein's lawsuit was supported by probable cause as a matter of law and that the summary judgment should therefore be affirmed. Conclusion The appellee respectfully requests that the Court affirm the final summary judgment. Alternatively, in the event of affirmance based upon Fischer, the appellee requests that the Court certify conflict with Wolfe as it did in Fischer. Respectfully submitted, LAW FFI E F PA L MORRIS, P.A. -17- EFTA00612499 sl Paul Morris PAUL MORRIS Counsel for Appellee CERTIFICATE OF SERVICE I hereby certify that on this 18th day of September, 2015, a copy of the foregoing was emailed to those on the list below. s/ Paul Morris SERVICE LIST: William B. King Searcy Denny Scarola Barnhart & Shipley, P.A. Philip M. Burlington Burlington & Rockenbach, P.A. Imo Tonja Haddad Coleman -18- EFTA00612500 W. Chester Brewer, Jr. W. Chester Brewer. Jr P.A. Tonja Haddad Coleman, P.A. Bradley J. Edwards Fanner, Jaffe, Weissing, Edwards, Fred Haddad Fred Haddad, P.A. Mark Nurik Law Offices of Mark S. Nurik Jack Goldberger Atterburv. Goldberger & Weiss. P.A. -19- EFTA00612501 Electronically Filed 09/26/2013 08:24:50 PM ET *** FILED: PALM BEACH COUNTY. FL SHARON R BOCK. CLERK."* IN THE CIRCUIT COURT OF THE FIFTEENTH JUDICIAL CIRCUIT IN AND FOR PALM BEACH COUNTY, FLORIDA JEFFREY EPSTEIN, Plaintiff/Counter-Defendant, Case No. 50 2009 CA 040800XXXXMBAG vs. SCOTT ROTHSTEIN, individually, BRADLEY J. EDWARDS, individually, Defendant/Counter-Plaintiff. AFFIDAVIT OF JEFFREY EPSTEIN The undersigned, Jeffrey E. Epstein, having first been duly sworn, hereby deposes and says: 1. I am over eighteen (18) years old and have personal knowledge of the facts stated herein. 2. I am the Counter-Defendant in the above captioned action (the "Action") and submit this Affidavit in support of my Motion for Summary Judgment (the "Summary Judgment Motion") with respect to the Fourth Amended Counterclaim (the "Counterclaim") of Counter-Plaintiff Bradley Edwards ("Edwards"). 3. In the Counterclaim Edwards has asserted unsupported claims against me for Abuse of Process and Malicious Prosecution. 4. As more fully described below, at the time that I commenced the Action against Edwards and Scott Rothstein ("Rothstein") in December 2009, I had a good faith basis for filing the same, based on the facts that existed at the time I filed suit, as set forth below and more fully in my Summary Judgment Motion. 1 000833 EXHIBIT 1 EFTA00612502 5. I filed the Action against Rothstein and Edwards because, based on the facts described below and in the Summary Judgment Motion, I believed at the time of filing my original Complaint that these two individuals, and other unknown partners of theirs at Rothstein, Rosenfeldt, Adler ("RRA"), engaged in serious misconduct involving a widely publicized illegal Ponzi scheme operated through their law firm (the "Ponzi Scheme") that featured the very civil cases litigated against me by Edwards, which were being used to defraud potential investors in the Ponzi Scheme. 6. In early November 2009, stories in the press, on the news, and on the internet were legion about the implosion of RRA, the Ponzi Scheme perpetrated at that firm, and the misuse in the Ponzi Scheme of certain civil cases then being litigated against me by RRA partner, Edwards. The cases Edwards was litigating against me, which are described in the Summary Judgment Motion (the "Epstein Cases"), were being used to defraud investors out of millions of dollars and to fund the RRA Ponzi Scheme. 7. In November 2009, I also became aware of news stories that as a result of the Ponzi scheme at RRA, the Florida Bar had commenced investigations into over one- half of the attorneys employed by RRA. 8. At or about the same time in November 2009, 1 also became aware that the law firm of Conrad Scherer filed a Complaint against Scott Rothstein and others, Razorback Funding, LLC, et al. v. Scott W. Rothstein, et aL, Case No. 09-062943(19) (hereinafter referenced as the "Razorback Complaint"), on behalf of some of the Ponzi Scheme investors. 9. Upon reviewing the Razorback Complaint, I learned that the Razorback Complaint detailed the use of the Epstein Cases (i.e., the cases being litigated against me 2 000834 EXHIBIT 1 EFTA00612503 by Edwards) to defraud investors in the Ponzi Scheme; including, but not limited to, improper discovery practices and other methods to bolster the cases. 10. Prior to my filing the initial Complaint in the Action, I also became aware that the Federal government filed an Information against Scott Rothstein, which included allegations of RRA as an "Enterprise" in which Rothstein and his yet unidentified co- conspirators engaged in a racketeering conspiracy, money laundering conspiracy, mail and wire fraud conspiracy, and wire fraud, and specifically alleged that (a) potential investors were told by Rothstein and other co-conspirators that confidential settlement agreements were available for purchase; (b) settlements were allegedly available in amounts ranging from hundreds of thousands of dollars to millions of dollars and could be purchased at a discount and repaid to the investors at face value over time; (c) Rothstein and other co-conspirators utilized the offices of RRA and the offices of other co-conspirators to convince potential investors of the legitimacy and success of the law firm, which enhanced the credibility of the purported investment opportunity; (d) Rothstein and other co-conspirators utilized funds obtained through the Ponzi Scheme to supplement and support the operation and activities of RRA, to expand RRA by the hiring of additional attorneys and support staff, to fund salaries and bonuses, and to acquire larger and more elaborate office space and equipment in order to enrich the personal wealth of persons employed by and associated with the RRA Enterprise. 11. Prior to filing the initial Complaint in the Action, consistent with the allegations made by the press, in the Razorback Complaint, and in the Rothstein Information, it was clear that the activity in the Epstein Cases being litigated by Edwards intensified substantially during the short six (6) months during which Edwards was a 3 000835 EXHIBIT 1 EFTA00612504 partner at RRA from April 2009 through the end of October 2009. Furthermore, during that six (6)-month period, questionable discovery like that detailed in the Razorback Complaint had taken place in the Epstein Cases being litigated against me by Edwards, including Edwards noticing the depositions of famous dignitaries and celebrities such as Bill Clinton, Donald Trump and David Copperfield, who appeared to have no connection whatsoever to any claims of misconduct made by Edwards's clients. 12. Equally consistent with the allegations in the press and in the Razorback Complaint that the Epstein Cases were being deliberately misused for purposes unrelated to the litigation in order to lure investors into the Ponzi Scheme is the fact that on July 24, 2009, Edwards filed a two hundred thirty-four (234) page, one fifty-six (156) count federal complaint against me on behalf of a plaintiff, LM, for whom Edwards was already prosecuting a case against me in state court involving the very same facts alleged in the federal complaint. The complaint was filed in federal court, but was never served on me or prosecuted, leading me to conclude that the only reason it was filed was to enhance the case files shown at the offices of RRA to potential investors in the Ponzi Scheme. 13. Also while a partner at RRA, Edwards filed a motion in Federal court in which he requested that the court order me to post a fifteen million dollar bond in the Jane Doe case. This case, according to the Razorback Complaint, was being touted at that same time to investors in the Ponzi Scheme. In connection with that motion, Edwards filed papers discussing my net worth and filed supplemental papers purporting to list in great detail my vehicles, planes and other items of substantial value, all at a time when, according to the accounts in the press, the Information and the Razorback Complaint, the Ponzi Scheme was unraveling and the need for new investors in the Ponzi Scheme was becoming urgent. The court rejected the Motion, calling it "devoid of evidence." 4 000836 EXHIBIT 1 EFTA00612505 14. The facts set forth above and in the Summary Judgment Motion were the facts upon which I relied in (a) determining that I had incurred damages, such as attorneys fees and disbursements paid to defend against these actions which appeared to be unrelated to the underlying litigation against me, and (b) asserting my causes of action against Edwards and Rothstein in the Action. FURTHER AFFI JEFFREY EPS STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) _ - Sworn and subscribed to before me, the undersigned authority, by Jeffrey Epstein, this 25th day of September, 2013. :hdlsilh.IIIII.Mr adh l I Noisy PutAc - State of Nrw Yon 0 NOT NO. 01631235700 I Darnedlo Mn volt County I I W comnissico its Jul 3. 2017 5 000837 EXHIBIT 1 EFTA00612506 Epstein's Statement of Undisputed Material Facts In support of his motion for summary judgment, Epstein submitted a detailed statement ofundisputed facts which included references to supporting documentation. (R. 808-818). Those facts, along with the references as footnotes, are recounted below. Edwards was a partner at Rothstein Rosenfeld Adler ("RRA") from April 2009 through November 2009.' During that time, his firm was a front for the largest Ponzi scheme in Florida's history,2 and RRA, through its partner, Edwards, was prosecuting three civil cases against Epstein (the "Epstein Cases").3 In early November 2009, Epstein learned that RRA had imploded, and that the Epstein Cases had been used to defraud investors of millions of dollars and fund the RRA Ponzi scheme." Edwards ' R. 809: citing deposition testimony of Bradley Edwards dated March 23, 2010; deposition of Scott W Rothstein in In re: Rothstein Rosenfeldt Adler, PA; 09-34791-RBR and Razorback Funding, LLC, et al. v. Scott W Rothstein, et al., Case No. 09-062943. R. 809, citing information charging Scott W Rothstein in United States of America v. Scott W Rothstein, 09-60331-CR-COHN; Epstein's Answer and Affirmative Defenses to Edwards' Fourth Amended Counterclaim; depositions of Scott W Rothstein in In re: Rothstein Rosenfeldt Adler, PA; 09-34791-RBR and Razorback Funding, LW, et al. v. Scott W Rothstein, et al., Case No. 09-062943. R. 809, citing pleadings in LM v. Jeffrey Epstein, 502008CA028051XXXXMB AB; EW v. Jeffrey Epstein, 502008CA028058XXXXMB AB; and Jane Doe v. Jeffrey Epstein, 08-80893- CIV Marra/Johnson; deposition of Jeffrey Epstein, p. 23, line 4; p. 38, line 22. R. 809-10, citing amended complaint in Razorback Funding, LLC, et al. v. Scott W Rothstein, et al., Case No. 09-062943; see deposition of Bradley Edwards dated March 23, 2010; depositions of Scott W Rothstein in In re Rothstein Rosenfeldt Adler, PA; 09-34791-RBR and Razorback Funding, LLC, et al. v. Scott W Rothstein, et al., Case No. 09-062943; deposition of -1- EXHIBIT 2 EFTA00612507 was the lead counsel and the supervising attorney over each of the Epstein Cases used to lure investors and fund the Ponzi scheme.' In late November 2009, Epstein was alerted that as a result of the Ponzi scheme at RRA, the Florida Bar commenced investigations into 49 of the 70 attorneys employed by RRA.6 At or about the same time in November 2009, the press reported that the law firm Conrad Scherer filed a complaint against Scott Rothstein and others in Razorback Funding, LLC, et al. v. Scott W Rothstein, et al., Case No. 09-062943 ("Razorback Complaint"), on behalf of some of the Pont scheme investors. Mr. Scherer asserted the following in the Razorback Complaint at pages 16-17 regarding the Epstein cases: In certain instances, the purported settlements, albeit fraudulent, were based on actual cases being handled by RRA. For example, one of the settlements involved herein was based upon facts surrounding Jeffrey Epstein, the infamous billionaire financier. In fact, RRA did have inside information due to its representation of one of Epstein's alleged victims in a civil case styled Jane Doe v. Jeffrey Epstein, pending in the Southern District of Florida. Representatives of D3 were offered "the opportunity" to invest in a pre-suit Jeffrey Epstein. R. 810, citing pleadings in LM v. Jeffrey Epstein, 502008CA028051XXXXMB AB; EW v. Jeffrey Epstein, 502008CA028058XXXXMB AB; and Jane Doe v. Jeffrey Epstein, 08-80893-CIV Marra/Johnson. 6 R. 810, citing The Florida Bar Daily News Summary dated November 23, 2009; deposition of Jeffrey Epstein, p. 68, line 16; p. 69; line 2. -2- EXHIBIT 2 EFTA00612508 $30,000,000.00 court settlement against Epstein involving a different underage female plaintiff. To augment his concocted story Rothstein invited D3 to his office to view the thirteen banker's boxes of actual case files in Jane Doe in order to demonstrate that the claims against Epstein were legitimate and that the evidence against Epstein was real. In particular, Rothstein claimed that his investigative team discovered that there were high-profile witnesses onboard Epstein's private jet where some of the alleged sexual assaults took place and showed D3 copies of a flight log purportedly containing names of celebrities, dignitaries and international figures. Because of these potentially explosive facts, putative defendant Epstein had allegedly offered $200,000,000.00 for settlement of the claims held by various young women who were his victims. Adding fuel to the fire, the investigative team representative privately told a D3 representative that they found three additional claimants which Rothstein did not yet know about. *** Additionally, Rothstein used RRA's representation in the Epstein case to pursue issues and evidence unrelated to the underlying litigation but which was potentially beneficial to lure investors into the Ponzi scheme. For instance, RRA relentlessly pursued flight data and passenger manifests regarding flights Epstein took with other famous individuals knowing full well that no under age [sic] women were on board and no illicit activities took place. RRA also inappropriately attempted to take the depositions of these celebrities in a deliberate effort to bolster Rothstein's lies. (R. 810-11). All of the deposition subpoenas and discovery requests to which the Razorback Complaint refers were served by Edwards at the time that Edwards was a partner at -3- EXHIBIT 2 EFTA00612509 RRA and the lead attorney on the Epstein Cases.' The allegations in the Razorback Complaint that the Epstein Cases were used to lure investors in the Ponzi Scheme were confirmed by, among other facts, the sworn testimony of Scott Rothstein.' On December 1, 2009, also before Epstein filed suit, a 37-page information against Scott Rothstein was filed by the United States. The Government's information included allegations of Racketeering Conspiracy, Money Laundering Conspiracy, Mail and Wire Fraud Conspiracy, and Wire Fraud.' The Information repeatedly references RRA as the "Enterprise" with which Rothstein and his co- conspirators were associated and by which they were employed. There were no co- conspirators identified by name. Rather, the Information charges that "Rothstein and his conspirators, known and unknown,' participated in or conspired to participate in `racketeering activity' to further the Ponzi scheme. R. 811-12, citing letter dated July 22, 2009 from Edwards, attached as Exhibit 3 to his deposition of March 23, 2010; dockets and pleadings in LM v. Jeffrey Epstein, 502008 CA 028051XXXXMB AB; EW v. Jeffrey Epstein, 502008CA028058XXXXMB AB; LM v. Jeffrey Epstein, 09-81092 Marra/Johnson and Jane Doe v. Jeffrey Epstein, 08-80893-CIV Marra/Johnson; copies of subpoenas; deposition of Jeffrey Epstein, p. 23, line 4; p. 38, line 22; initial complaint filed by Epstein dated December 9, 2009, pages 13-20. R. 812, citing deposition of Scott W Rothstein in In re: Rothstein Rosenfeldt Adler, PA; 09-34791-RBR and Razorback Funding, LLC, et al. v. Scott W Rothstein, et al., Case No. 09-062943. R. 812, citing information charging Scott W Rothstein in United States v. Scott W. Rothstein, 09-60331-CR-COHN. -4- EXHIBIT 2 EFTA00612510 Specifically, the Government alleged in the Information that: The potential investors were told by defendant ROTHSTEIN and other co- conspirators that confidential settlement agreements were available for purchase. The purported settlements were allegedly available in amounts ranging from hundreds of thousands of dollars to millions of dollars and could be purchased at a discount and repaid to the investors at face value over time. Defendant ROTHSTEIN and other co-conspirators utilized the offices of RRA and the offices of other co-conspirators to convince potential investors of the legitimacy and success of the law firm, which enhanced the credibility of the purported investment opportunity. Defendant ROTHSTEIN and other co-conspirators made false and misleading statements and omissions which were intended to fraudulently induce potential investors into purchasing the confidential settlements." The information further alleged: Defendant ROTHSTEIN and other co-conspirators utilized funds obtained through the "Ponzi" scheme to supplement and support the operation and activities of RRA, to expand RRA by the hiring of additional attorneys and support staff, to fund salaries and bonuses, and to acquire larger and more elaborate office space and equipment in order to enrich the personal wealth of persons employed by and associated with the Enterprise." Scott Rothstein, Edwards' partner at RRA, admitted to and was convicted for these acts that occurred at RRA and is serving a fifty-year sentence.' Several other partners of RRA have also been federally charged and/or 10 I I Id . 12 R. 813, citing plea agreement, United States v. Rothstein, 09-6033 I-CR-COHN. -5- EXHIBIT 2 EFTA00612511 convicted, and the Government has confirmed that the events at RRA are still the subject of an active, ongoing investigation In addition, questionable discovery practices in the Epstein Cases, such as those alleged in the Razorback Complaint, intensified drastically in the short 6 months during which Edwards was a partner at RRA." Edwards admitted that there were between $300,000 and $500,000 in litigation and investigation related expenditures on the Epstein Cases during that short period of time during which he was a partner at RRA, yet Edwards testified that expenditures on the Epstein Cases during the preceding eight months, when the cases were not being prosecuted by RRA, may not have even exceeded $25,000." Further, according to Edwards' own privilege log that was filed in the RRA bankruptcy matter, there were more than eighteen attorneys and staff members at RRA working on the Epstein Cases during the time in question.15 While Edwards '3 R. 813, citing pleadings and docket sheet inMv. Epstein, 502008 CA 028051 XXXXMB ABS. Epstein, 502008CA028058XXXXMB AB; Jane Doe v. Epstein, 08-80893-CIV Marra/Johnson. '' R. 813-14, citing deposition of Bradley Edwards dated March 23, 2010, p. 17, lines 6-23; p. 178, lines 11-21. IS R. 814, citing dockets and pleadings in LM v. Epstein, 502008CA028051XXXXMB AB; EW v. Epstein, 502008CA028058XXXXMB AB; and Jane Doe v. Epstein, 08-80893-CIV Marra/Johnson; see also privilege log of Farmer, Jaffe, Weissing, Edwards, Fistos & Lehrman, February 23, 2011 as filed in this matter and in In re: Rothstein Rosenfeldt Adler, P.A., 09-34791-RBR. -6- EXHIBIT 2 EFTA00612512 prosecuted the Epstein Cases at RRA, he repeatedly utilized the services of a convicted felon, members of the press, and former federal agents for investigating and prosecuting the cases against Epstein.16 On July 23, 2009, Edwards held a meeting at RRA with all attorneys regarding the Epstein Cases." The next day, on July 24, 2009, Edwards filed a 234-page, 156- count federal complaint against Epstein on behalf of a plaintiff, , for whom Edwards was already prosecuting a case against Epstein in state court involving the very same facts alleged in the federal complaint!' The complaint was filed in federal court, but was never served on Epstein. Also while a partner at RRA in June, 2009, Edwards filed a motion in Federal court in which he requested that the court order Epstein to post a fifteen million dollar bond in the Jane Doe case that was being touted to the investors.19 Epstein responded in opposition and Edwards filed his reply on July 23, 2009, the same day as the 16 R. 814, citing privilege log of Farmer, Jaffe, Weissing, Edwards, Fistos & Lehrman; deposition of Jeffrey Epstein, p. 34, lin g filed by Bradley Edwards as to communications between Edwards an lectronic communications between Edwards and various members of the press. 17 R. 814, citing privilege log of Farmer, Jaffe, Weissing, Edwards, Fistos & Lehrman. R. 815, citing M. v. Epstein, 09-81092 Marra/Johnson, deposition of Jeffrey Epstein, p. 23, line 4; p. 38, line 22. 19 R. 815, citing Jane Doe v. Epstein, 08-80893-CIV Marra/Johnson; Razorback Funding, LLC, et al. v. Scott W Rothstein, et al., Case No. 09-062943. -7- EXHIBIT 2 EFTA00612513 meeting of RRA attorneys regarding the Epstein Cases referenced above. In his reply, Edwards discussed at length Epstein's net worth. On October 16, 2009, Edwards filed a Notice of Additional Evidence in which he listed in great detail vehicles, planes, and other items of substantial value purportedly owned by Epstein.' All of this took place at the exact time, according to Rothstein and the Government, that the Ponzi scheme was unraveling.' The court rejected Edwards' bond motion in its order entered in Jane Doe No. 2 v. Epstein, November 5, 2009, 08-cv-80119 (R. 815), stating: Plaintiff's [Edwards'] motion is entirely devoid of evidence of Defendant's [Epstein's] alleged fraudulent transfers. The Court declines to conclude that Defendant is fraudulently transferring assets based upon the adverse inferences relied upon by Plaintiff. Plaintiff's supplemental filing regarding the titles of approximately five of Defendant's vehicles is clearly de minimis, particularly in light of Plaintiff's repeated characterization of Defendant as a "billionaire." Additionally, as soon as Edwards arrived at RRA, Edwards and his partners set and/or took depositions of three of Epstein's pilots and the "wealthy and influential friends" of Epstein who were identified to the Ponzi scheme investors, including former President Clinton, Donald Trump, and David Copperfield, though none of 20 R. 815, citing Jane Doe v. Epstein, 08-80893-CIV Marra/Johnson; copies of Motion, Response, Reply, and Order. 21 R. 815, citing depositions of Rothstein in In re: Rothstein Rosenfeldt Adler, PA, 09-34791-RBR. -8- EXHIBIT 2 EFTA00612514 Edwards' clients claimed to have any interactions with any of these famous individuals or been on Epstein's plane.22 Further, not one of these people had any personal knowledge of the claims Edwards was prosecuting against Epstein." There was evidence of a deliberate and systematic attack developed by Edwards and RRA, as espoused by a former FBI Agent employed by RRA at the time of the Ponzi scheme to "go after those close to Epstein."24 Finally, while Epstein's suit was pending against Edwards, Rothstein was deposed. At the morning session of deposition on December 12, 2011, Rothstein was asked the following about Bradley Edwards: Q: Brad Edwards, would he have reported illegal activity? A: I don't know. Q: Would he have reported trust account defalcations? 22 R. 816, citing letter dated July 22, 2009 from Edwards, attached as Exhibit 3 to his deposition of March 23, 2010; deposition of Jeffrey Epstein, p. 36, line 10; p.37, line 3; dockets and pleadings in 11111 v. Epstein, 502008CA028051XXXXMB AB; v. Epstein, 502008 CA 028058XXXXMB AB; and Jane Doe v. Epstein, 08-80893-CIV Marra/Johnson. 21 R. 816, amended complaint in Razorback Funding, LLC, et al. v. Scott W Rothstein, et al., Case No. 09-062943(19); deposition of Scott W Rothstein in In re: Rothstein Rosenfeldt Adler, PA; 09-34791-RBR and Razorback Funding, LLC, et al. v. Scott W Rothstein, et al., Case No. 09-062943(19); letter dated July 22, 2009 from Edwards, attached as Exhibit 3 to his deposition of March 23, 2010; dockets and pleadings in. v. Epstein, 502008 CA 028051XXXXMB AB; =v. Epstein, 502008CA028058XXXXMB AB; and Jane Doe v. Epstein, 08-80893-CIV Marra/Johnson; deposition of Jeffrey Epstein, p. 23, line 4; p. 38, line 22; p.89, line 11; p. 93, line 2. 24 R. 817, citing electronic communication from Cam Holmes to Bradley Edwards dated July 29, 2009 ("I think our best bet is to go after those close to Epstein."). -9- EXHIBIT 2 EFTA00612515 A: I don't know." Rothstein's response to the same line of questioning when asked about all of the other attorneys with whom Edwards worked, such as Gary Fanner, Seth Lehrman, and Mark Fistos was, unequivocally, "yes", that they would have reported illegal activity." In the afternoon session of his deposition on that same day, Rothstein was again questioned regarding Edwards: Q: When you were asked - this morning about Brad Edwards you really hesitated. I don't know if you know you did that, You were answering yes no maybe so. On him you really paused. A: On the question as whether or not he would have turned us in, you mean? Q: Whether he was a player or whether he was involved and you didn't quite answer. A: Just because of the way I knew Brad and socialized with him, I did not know that he was at that level. There are certain people, Barry Stone, second he found out about it would have absolutely done what was appropriately- supposed to do from an ethical standpoint. And then there were people who I would say would never do that. And then there are people in the middle. I believe Brad Edwards is probably in the middle." 25 R. 817, citing deposition of Scott Rothstein, December 12, 2011, p. 31, lines 1-6. 26 Id. at lines 7-24. " R. 817-18, citing deposition of Scott Rothstein dated December 12, 2011, p. 61, line 15; p. 62, line 6. -I 0- EXHIBIT 2 EFTA00612516 The above facts were relied upon by Epstein at the time of the filing of his complaint and the two amendments thereto, and relied upon as probable cause to assert his causes of action against Rothstein and Edwards." 28 R. 818, citing Affidavit of Jeffrey Epstein in support of his Motion 11w Summary Judgment. -I I- EXHIBIT 2 EFTA00612517