Gerry Armstrong--Declaration of Michael Walton 06-04-1997

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MICHAEL WALTON
700 Larkspur Landing Circle, Suite 165
Larkspur, CA 94939
(415) 456-7920
In Propria Persona

SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF MARIN

CHURCH OF SCIENTOLOGY
INTERNATIONAL, a California
not-for-profit religious
corporation,

Plaintiff,

vs.

GERALD ARMSTRONG; MICHAEL

WALTON; THE GERALD ARMSTRONG CORPORATION, a California for
profit corporation; DOES 1
through 100, inclusive,

Defendants.

AND RELATED CROSS-ACTIONS

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CASE NO. 157 680

DEFENDANT MICHAEL WALTON'S
DECLARATION IN SUPPORT OF
OPPOSITION TO SCIENTOLOGY'S
REQUEST FOR ATTACHMENT

Date: June 13, 1997
Time: 9:00 A.M.
Dept: One
Trial: None Set

I, Michael Walton, declare as follows:

1. I am a defendant in this action. I have personal knowledge

of the facts set forth below and, if called upon, I could and would

competently testify thereto.

2. In the Spring of 1990 Gerald Armstrong and I entered into

an agreement whereby I would terminate my law practice in Playa del

Rey, California, give up my residence in Playa del Rey and relocate

to 707 Fawn Drive, San Anselmo in Marin County; I would commit to

a one year time period in which we would live at the Fawn Drive

residence. Armstrong and I would be co-owners of the property and

would hold our respective interests as tenants in common. We would

both be responsible as "borrowers" on the mortgage loan used to

purchase the property and we would both execute a deed of trust in

favor of the mortgage lender. Armstrong would provide the down

payment for the residence and would establish a money fund in both

our names which would be an amount calculated to cover the mortgage

payments, insurance payments, taxes and upkeep of the residence

exclusive of any personal expenses for one year (approximately

$40,000).

3. We further agreed that during that year we would

investigate the possibility of developing certain creative and

artistic ideas that Armstrong had already identified and any other

creative or artistic projects that may arise. I would handle the

"legal" aspects of marketing the creative ideas and would

contribute to idea development as able.

4. In addition, I had been and was still Armstrong's legal

counsel in Scientology's appeal from a Los Angeles Superior Court

decision in Armstrong's favor. We both believed that Armstrong

could provide much more effective assistance to me in responding to

the appeal if we were in the same location. Considerable document

review was necessary in preparation and Armstrong was the main

source of explaining the chronology of events that covered more

than a dozen years and the complex technical language and structure

of Scientology.

5. Pursuant to the agreement, Armstrong and I purchased the

Fawn Drive residence in May 1990. We obtained a substantial loan

for the mortgage and we executed the appropriate deeds of trust and

other loan documents. We set up a joint checking account to handle

the "house account fund" which was approximately $40,000.

6. We continued to work on Scientology's appeal and on July

9, 1990, I filed Armstrong's Respondents Brief. The Court of Appeal

affirmed the lower court's decision.

7. Armstrong and I investigated the potential commercial and

artistic impact of a number of Armstrong's projects or would be

projects. None were ever brought to market in a commercially viable

way.

8. During the summer of 1990, approximately two months into

our agreement, Armstrong informed me that he did not want to be

bound by our agreement. He told me that he had had a vision from

his "God" and that he needed to divest himself and be free to go

where he was called.

9. In August 1990, Armstrong turned over full

responsibility for managing the house fund to me indicating that he

had no intention of handling it in the future. I began to write

checks from our joint account to pay the house expenses as they

came due as per the original agreement.

10. Finally, in August 1990, Armstrong deeded his one-half

interest in the Fawn Drive residence to me. While I did not pay

Armstrong directly any money for the transfer, I agreed to assume

full responsibility for the mortgage loan and to be fully

responsible for all future taxes, upkeep, repairs, insurance and

any other cost related to the property. Additionally, I released

him from the remaining term (approximately 10 months) of our

agreement.

11. Originally, Armstrong indicated to me that he was going to

deed his interest to a third party. I reminded him of our agreement

and told him that I would never have given up my life and law

practice in Los Angeles and incurred liability for a substantial

mortgage had it not been for our agreement. I told him that a third

party transfer was unacceptable to me. When he told me a day or so

later that he was going to transfer his 1/2 interest to me, I

indicated that his decision was acceptable to me and I wished him

well in his new found freedom.

12. Several months later, I refinanced the mortgage loan

dropping Armstrong as a borrower and since August 1990, I and my

family have been fully responsible for maintaining and improving

the property. I encouraged Armstrong to continue to live at the

residence for as long as he liked; however, Armstrong moved out in

August 1991.

13. I believe that each aspect of my agreement with Armstrong

and its subsequent alteration was fair, legal and binding.

14. Armstrong never expressed any intent in divesting himself

of property in 1990 or any other time to keep money from any

creditor. Given that I had obtained liability for a substantial

mortgage and all that I had given up and risked by moving away from

my home, friends and business in southern California in order to

commit a year of my time to helping develop Armstrong's creative

ideas, I believe that when Armstrong decided after two months that

he could not fulfill the remaining ten months of our agreement and

that he must forgo all ownership responsibility on the Fawn Drive

residence in order to be able to follow his conscience, the only

fair result was for Armstrong to transfer his interest in the

property to me- not for the purpose of avoiding a creditor that did

not yet exist, but rather in order to mitigate the unjust results

and damages to me of his decision not to perform the remainder of

our agreement.

I declare under penalty of perjury pursuant to the laws of

California that the foregoing is true and correct.

Dated: June 4, 1997

[signed]

Michael Walton

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