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IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF MARIN ---oOo---
DEPOSITION OF: LYNN R. FARNY Monday, July 11, 1994 VOLUME I
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INDEX Witness: LYNN R. FARNY
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Monday, the 1lth day of July 1994, commencing at the hour of 10:15 o'clock a.m. thereof, at the conference room of 900 Larkspur Landing Circle, Larkspur, California, before me, PENNY L. GILMORE, a Certified Shorthand Reporter licensed by the State of California, personally appeared: LYNN R. FARNY a witness herein, who, being by me first duly sworn, was thereupon examined and interrogated as is hereinafter set forth. ---oOo---
Esq., representing the Law Offices of Bowles & Moxon, 6255 Sunset Boulevard, Suite 2000, Hollywood, California 90028, 15 appeared as counsel on behalf of Plaintiff.
Offices of Michael L. Walton, 700 Larkspur Landing Circle, Suite 120, Larkspur, California 94939, a defendant, appeared in pro per.
Ford Greene, 711 Sir Francis Drake Boulevard, San Anselmo, California 94960, appeared as counsel on behalf of Defendant Gerald Armstrong. |
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Circle, Suite 185, Larkspur, California 94939, appeared as the referee in said action.
---oOo--- |
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EXAMINATION BY:
record and spell it, please.
spelling; F-A-R-N-Y.
that right?
International, the plaintiff.
mailing address.
employee of the Scientology Church?
Church?
your question? The witness asked for clarification.
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a parishioner of the Scientology religion.
Scientology? Do you understand my question?
interpretation and my question?
parishioner, is there a difference in your mind?
all. No.
There's obviously a difference between the corporate entity, the Church of Scientology International that's a party in the case, and the Scientology religion. You can say how long have you been a Catholic and how long have you been a member of the Catholic Church, how long have you been a member of St. Michael's Diocese. That's a distinction we are asking you to clarify. If you ask a clear question, no problem.
corporation? Are you an employee of the corporation?
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organization? When I say "the organization," I'm talking about the organization that filed the lawsuit in this litigation. Do you understand that?
Prior to my becoming secretary of the corporation for the Church of Scientology International I was an employee for approximately four years.
having any kind of title?
and progressing until the last?
Scientology International I've worked in the legal department. I've had various job titles, some of which I don't remember, but they're all in the area of litigation working in either a paralegal capacity or as an executive over the department in which the paralegals work.
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since you have worked in it? What's the maximum number of people in that department from the time you worked in it until now?
some point as to how large or small the department is?
of experience that this witness has. This witness is here on behalf of the plaintiff and I'm going to be asking a lot of questions. I need to know if he's qualified. I'm looking at what his qualifications are.
you are interested in?
is.
department is is irrelevant to how much experience he has.
been working with 50 people, for example, he's been number two in charge of 50 people, that would indicate a lot of experience than if he's been working with one person and |
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he's been the second in command.
background.
it, just approximately?
over any of these people?
deposition taken?
times.
Scientology litigation? |
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enough depositions to know that. Could you tell me just briefly what your formal education is?
legal department -- and I refer to it because I'm not sure what you do call it -- what is that department called?
the Legal Bureau have you had any other training either formal or informal in the law in California: paralegal courses, that's the sort of thing I'm looking at.
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aspects of the law, but other than that, no.
things that you do in the legal department currently?
the action.
clarification? Was this witness subpoenaed or noticed by name or is he represented by representative capacity?
what his connection to the plaintiff is.
involving Church of Scientology International. By that I mean making sure any cases we have have counsel to litigate and that counsel is provided with the assistance required, coordinate activities for one case to the next. I keep the board books for the corporat1on; ratify contracts; enter into contracts at the direction of the board; open bank accounts, that sort of thing.
Mr. Partkin?
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an employee of Scientology -- again, I recognize that Scientology has a lot of meanings and we'll get into that in a little while -- for now when I say Scientology or the organization I'm talking about the entity that's brought suit here. Do you understand that?
lawyers.
"Church" you are talking about the Church of Scientology International?
the folks are ,and what their relationships are, but at this point because I am such a novice in this area I can only --
expertise.
in these litigations, and what I'm talking about is in deposition.
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yourself to attend a deposition or does someone tell you to go to a deposition?
calls for -- it's impossible to answer that.
no idea which half of the question I have answered.
days if we get real technical. I don't mean to make it real technical. We can certainly do it that way. All I want to know is how you came to be here as opposed to any of the other people who could have come.
gets put on a piece of paper on a transcript any ambiguities are difficult to interpret. In any event, I think I understand your question. If you want to ask it again, otherwise I'm prepared to answer.
testify. However, it's always counsel's decision who represents the Church in a given proceeding. But I don't recall a time when someone has said that I would be the |
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witness
unless, of course, it's one of the lawyers who
said we have a corporate representative deposition notice and I assume you will be the witness. Generally I would be the one to make the decision.
then -- and we'll talk specifically about this case rather than for purposes of this question -- have you read the pleadings and the discovery in this case?
Cross-complaint. Most of the discovery; perhaps not all of it.
Scientology cases is someone assigned to respond to the
say Scientology gets a Request for Production of Documents; the attorney then gives it to someone in 19 Scientology. Who would they give it to, the legal department?
initially?
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this step doesn't depend --I would sit down with the lawyer and go over what the parameters are of it and decide on a course of action I would take in order to gather up the materials to respond to it, then either myself or one of the staff, one of the paralegal staff would go about finding the documents, or whatever, give them to the lawyer, sit down, go over, determine what's responsive, and the lawyer would draft the response.
be assigned?
assigning in this particular action, assigning any of your staff to respond to any of the litigation requests, the discovery requests?
things or xeroxing or whatever, but I worked out the response with counsel. Responses, actually.
documents today for me?
Notice.
I indicated to both your counsel last week I've never been |
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served
with any documents pursuant to --I'm not sure if
it's Mr. Armstrong's request or Mr. Armstrong's corporation's request, but I understand there were some documents pursuant to that request. And as I understand from the letter I received I believe last week, week before last, there were either some supplemental responses that were served or some supplemental responses that were I to be served. Do you know anything about those supplemental responses?
Supplemental responses to document requests in this case? There's one in preparation, yes.
of documents which responded to a document request?
letter I sent them out. Take a look, you should have gotten them.
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one did you send it to?
wouldn't want you to get the --
Landing address. Here, let me give you my card.
they were originally responded to. They were sent to an address for you. Obviously you didn't get them. I don't know where they were. We served everything on this office.
office -address I think it would be a lot clearer because there have been a lot of things I haven't gotten.
sometimes I don't, although the proofs of service say I have been faxed sometimes I don't get them. In this case I am going to need whatever documents have been served.
been some documents that have come in?
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number one, it's not your deposition. Number two, that would fall within the joint defense privilege and I object to any response to that question.
got a letter recently and it indicates from Mrs. Bartilson some supplemental documents were being sent out and I've not gotten anything, so...
the Cross-complaint then you know who I am with respect to this lawsuit?
to any other Scientology-related lawsuits?
suits that we're involved in.
to any other Scientology-related lawsuits?
Armstrong cases?
lawsuit. |
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breach case in Los Angeles. I'm not certain of that, but we saw each other at a hearing at a trial involving Church of Scientology International in the spring of 1990 wherein Mr. Armstrong sought to appear voluntarily. Well, there was a subpoena served and there was a hearing on the matter, and to my knowledge we have never run across each other beyond that.
as his counsel in any Scientology-related litigation?
representing him during the settlement negotiations in 1986 providing advice to him in addition to the advice he was receiving from Mr. Flynn.
cases where I have represented Mr. Armstrong as his counsel in Scientology-related litigation?
forgotten something perhaps you can reacquaint me with it.
during the time that Mr. Armstrong appeared in his appeal? Actually it was Scientology's appeal in what this group commonly refers to as Armstrong I.
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time
period?
legal department.
the time that the appeal was finally decided?
We've spent a lot of time on background. I don't know specifically what he was doing at a specific time. If he would state the relevance to any of the allegations.
position here. Scientology has sued me for three or four million dollars and they're basing that number on some litigation that's been ongoing for a dozen years, and I have not been a party to any of the prior lawsuits, Armstrong I, II, III and IV, with the exception of having represented Gerry in an appeal on Armstrong I.
on this thing, if I'm a defendant I'm entitled to know what I'm defending against, and to begin with, I want to understand a little bit about this organization that's suing me.
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history. I have virtually no history with this organization. And to properly defend myself I'm going to have to find out some very basic facts.
action. He's a party to the lawsuit because Gerry committed property to him, that's why he's a party. The background information as to what this witness was doing at the time Gerry was appealing something else has absolutely no relevance to anything that's at issue in this case. This is a small and simple case. It's about property that was conveyed in 1990, that's how we eliminated the other discovery that's been done in this case.
conspiracy between the two, I think it would be relevant to go on to see what the witness knows about the association between Mr. Walton and Mr. Armstrong, since that's one of the allegations. To that extent, on that basis I'll allow that line of questioning.
What he was asking was what particularly was the witness doing at a certain point in time.
if I'm wrong and we can redirect your question -- but I |
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thought he was attempting to find out whether the witness was involved in the appeal and what the relationship was with Mr. Walton.
witness wants to answer that question, I have no problem.
is mine which is when was the oral argument.
questions. If you don't remember, that's fine.
will help answer the question. If you don't want to answer, that's fine.
'91. I was not involved in the litigation. The oral argument was in February.
was I doing then?
them with what information they needed in order to produce |
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the briefs and get ready for oral argument.
name on any of the pleadings that issued from Gerry's camp as his counsel on the appeal?
correct.
this lawsuit?
Gerald Armstrong in Scientology-related litigation?
represented him as a lawyer since he is not.
Douglas, the former Scientologist?
problem recognizing which Michael Douglas I was referring to.
this lawsuit?
Mr. Armstrong in any Scientology-related litigation?
would be no. |
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connection with testimony that Mr. Armstrong, Gerry, has given in this litigation?
Armstrong's money, I have a vague recollection of that; otherwise, no.
litigation?
Gerry Armstrong in any Scientology-related litigation?
know.
the names that Mr. Armstrong testified that he had given property to?
Mr. Armstrong in any Scientology-related litigation?
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don't.
Laurie Eaton has been named as a defendant in the current litigation?
is?
believe it's Nancy Dincalci.
this litigation?
Gerald Armstrong in any Scientology-related litigation?
know who that is?
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as well as the Douglases, I believe it's come up through discovery, are the directors of Gerry Armstrong's corporation. So to that degree they would be defendants because the corporation is a defendant. I want to clarify that. But as individuals they may not be. Anyway, Bambi, I believe, has been named as a defendant.
that he divested --of the people that he's testified that he divested to who were beneficiaries of his divestment, Michael Walton, that is me, is the only person who's been named and served in this lawsuit?
ambiguous. I don't understand what you are asking. It's also compound.
testimony.
I said. |
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released his interest in certain property in 1991, 1990, 1991 and that's what gave rise to this lawsuit?
"understand." I don't know if you are asking for his personal knowledge or allegations he has read based on Mr. Armstrong's testimony or a conclusion you may have drawn.
We'll get it clear.
record.
course, is why there's only one named and served defendant.
sued. I don't understand why no one else is being sued. What I'm trying to get at is why Scientology selected me and if they did only select me because I represented Gerry on a prior lawsuit I want to get --
has had information, specific testimony from Mr. Armstrong regarding other beneficiaries, I'm going to call those |
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people, who received property from Mr. Armstrong at the same time I did. Why has Scientology not filed a lawsuit against them?
evidence we had is that you got the lion's share. You got the house, which was worth nearly half a million dollars and a substantial amount of cash. I'm not certain we knew of the extent to which any of these other individuals received property or money.
to recall the evidence in this case is they got small amounts. When we filed the suit that's the best evidence we had.
Bambi as a defendant and perhaps, you know... Beyond that I don't know the answer to your question. If it was the government I would say prosecutorial discretion. We're not.
however, you have had an opportunity to take Mr. Armstrong's deposition; is that correct?
Scientology?
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Scientology. Maybe if you say plaintiff or CSI, identify it that way.
beginning I could use it that way, but if it's confusing I'll certainly use "plaintiff."
deposition?
direct order I believe from the referee in this case, exactly what the property in general terms, the property was that Mr .Armstrong gave away?
conclusion that all the property that Mr. Armstrong gave away has been revealed. You are asking for a conclusion of the witness whether or not there's been a full disclosure.
too, and I don't know what you have done.
testifying to.
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to?
Armstrong's deposition?
deposition?
know, let's start with that, do you know what Mr. Armstrong's testimony is as to what he gave away?
money to various individuals, forgiven debts; he gave you the house; substantial amount of cash. As far as a specific memory quiz on how much, as I sit here I wouldn't be able to remember it. The deposition record would be a better reflection of that. But I do remember testimony to that effect, yes.
named defendant. What about Ms. Phippeny, was she named as a defendant for the same reason?
the reason was why someone was sued. I don't know what the relevance is. As to why you were sued, you got that information and it's, again, asking for a conclusion. It's also potentially asking for attorney/client |
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privileged information. Obviously he is a representative of the parties and has had communications from counsel suing or not suing particular individuals, the relative strengths and weaknesses, and whatnot. So I also object on attorney-client basis.
the attorney-client privilege. However, to the extent that I may have been singled out for inclusion in this lawsuit because I represented Gerald Armstrong in a prior litigation, and to the extent that Scientology may understand that this lawsuit has little or no merit, to the extent that this may be an attempt to destroy pursuant to what the courts have called black PR --
now. The witness already testified that you received the lion's share. In fact, I think the testimony was you received something in the neighborhood of 70 to 80 percent of the proceeds of the settlement. Now if you consider that's an inconsequential amount of money, that you received no benefit from it whatsoever, it was just given to you, that it wasn't a fraudulent transfer to you of virtually all of his property, well, if you consider that black PR you can have any conclusion you want.
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asking the witness questions and I'm not quite clear what the question was or what its purpose was. If you want to rephrase it and make it direct so he can have a direct objection perhaps I can rule on it.
what a lion's share is in any given meal. If you want to rephrase it.
establish a couple more things here.
just now indicated that Mr. Armstrong gave me a house that had a worth of $397,000.
of the house. The witness testified earlier what he thought it might be worth. It's in the record.
was paying attention to what he said and heard the number or whether I have any knowledge of the value of the house he gave you for no consideration?
ahead. |
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$397,000?
value of the house is somewhere in the area of $400,000, give or take whatever.
property record. We do have the property records concerning the house.
that would have given you the idea it was around 400,000?
testimony as to the value or whether that was indicated in any of the property records, I'm just not certain. I remember reading in a document that that was the approximate value of the house, as far as I know, that no one is disputing that.
loan document?
credit for a mortgage owed have been included in that 397,000? |
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397,000. I said around 400,000. Your question is would that have included a mortgage? Is that the equity in the house or is that the overall value of the house, whatever?
it's approaching its limit -- is that Armstrong owned it free and clear -- but I'm not certain of that fact -- at the time it was conveyed to you.
have something to do with the transfer?
understand Scientology produced pursuant to a document request in this litigation.
receive this document; it was brought to my attention. I want to find out now if in fact it was a document Scientology produced and what it is.
The relevance is that it was produced? |
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it, it was produced in a document request by Scientology. Mr .Armstrong and Mr .Armstrong' s corporation requested certain documents responsive to this litigation and this was one of the documents that was produced. If it wasn't relevant, why did Scientology produce it?
you think someone else thought it might be relevant?
then I object to the relevance without a proper ruling.
produced it.
relevance is other than you think someone else may have produced it.
I would like to find out about them.
allegations concerning you?
find out whether or not this witness knows it was produced |
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in the document production in this litigation.
response to a document request in this litigation?
at it.
produced in this litigation, yes.
this document?
document came from?
plaintiff?
looks like my writing in terms of content. It's a typewritten document.
produced?
evidence that someone directed it to be written. |
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second question, I don't remember.
exhibit since you are asking questions about it?
your writing?
from the Griffith Park tapes, the material discussing the breaches. The material concerning Ford Greene does not appear to be originated from something I wrote. And, again, as to the earlier portions of it it was either -- there was an earlier incarnation of this that this material came from a draft, if you will.
Armstrong. That's, I believe, your document number 200298 on page one. Is that Scientology-marked numeration?
would have been our Bates stamp. It goes, for clarity, through 200302. Ford is happy with that.
referred to attachments that were produced when this original document was produced.
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but
I don't remember.
this document that you did, was that within the Legal Bureau?
understand.
don't really know where it was generated but you did some work on it and you don't know who directed it to be done, I'm striving to sort of figure out, narrow down where it came from.
and start over.
forgive me.
produced?
You mean produced to Ford Greene in this litigation?
this? Can you explain to me so I understand why? |
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statement so as to respond to Gerald Armstrong's many media appearances and other statements he was uttering in violation of his settlement agreement. So it was prepared so we would have a response to communicate the truth, things which Gerry tends to leave out of the things he says.
a press release? No.
answer to that. I assume that was part of the overruled objection earlier, was the objection to your second question that you to before that? Is there one?
relevance to this case what this term is?
speak for a long period of time without me understanding anything that's going on because of the sort of sub- language that exist in Scientology, some of which I read and don't understand. I need to understand some of the basic things that go on, some of the basic language. I |
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just want to know what it is. If this is it, I want to
know that, too.
pack is.
relevance to this lawsuit? What does this term have to do with this lawsuit? I don't understand.
is so I can't really rule on this except does it appear in here? Does it appear someplace? From whence does it come?
you're not in deposition.
he needs it defined.
again, I'm not sure about this, a dead agent pack and black propaganda are two ways that I'm told that Scientology attacks its perceived enemies, and there is an attack on me in this document that was produced as a response to a document production in this litigation. I'm trying to find out what this document is and why there's an attack on me in it.
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document, for one.
produced as part of a dead agent pack plan or something, fine. Without more on what dead agent pack means I can't --
definition so we can get back to the deposition. slang. It refers to a pack which compiles the truth about someone who's been telling lies, and the term springs from Sun Tsu's book on war and wherein he describes various different types of agents and one which he describes as dead agent is one who's been feeding lies whose lies have been exposed; and as an information source he is dead in the eyes of the individuals to whom he has been spreading false information.
those days he was dead more that just as an information source. But today it's slang for information pack which, I if you will, communicates the truth about the individual in such a way that their credibility with the source to whom they have been spreading false information no longer exists.
comes up again? You are talking a pack? |
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someone
is spreading lies about someone to destroy their
reputation. The way you deal with that is document the truth, and then the people to whom the black propaganda has been spread hopefully no longer believe the lies.
whom this document was disseminated?
whom this document would have been disseminated?
have been disseminated where needful to correct false reports. I don't remember to whom it was disseminated.
the fifth full paragraph, it says "Walton also knew of Armstrong's intention to breach the agreement and was thus fully aware of the fraudulent nature of the conveyance." Do you see that line?
has in their possession that would support this statement?
sentence and a conclusion in the second half. I assume you want the first half. The second half of the sentence |
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flows from the first half; the basis for the second half of
the sentence is the first half of the sentence. You want the basis for you knew his intention to breach the agreement?
appear in the RTC v. YANNY trial of March '90 where we outlined the entire argument of Armstrong striving to breach the settlement agreement. This was prior to him divesting himself of his assets to you.
co-defendant that you were aware of his breaches of the settlement agreement, at least some of them. So that's the basis for that. As I said, the second half of the sentence is a conclusion based on the facts underlined in the first half.
recipients of Armstrong's assets was an attorney named Walton."
"Walton also knew of Armstrong's intention to breach the agreement," that's what I'm talking about. Then the conclusion that flows from that is, "...was thus fully aware of the fraudulent nature of the conveyance."
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his breaches of the settlement agreement.
response. The initial part of the response had to do with some incident where I stood up at a Yanny --
witness at the Yanny trial, you were there with him. I don't remember if you made an appearance but you were there in the courtroom with him. I believe you did introduce yourself. The entire argument of why he should not be permitted to testify was laid out and the fact that it violated his settlement agreement, et cetera. So...
Earl Grew or Bill Gresham, counsel for the Church, who was was trying that case.
respect to me in this litigation?
Armstrong's breaches of the settlement agreement. That's all I indicated at that time.
of Armstrong's intention to breach. I listed that as one of the issues because I happened to be there that day and saw you receive the information --
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you, but I'm not sure how that indicia of that set of circumstances that you just testified to, is indicia of Armstrong's --
is.
question... You are asking for a legal conclusion. You asked for a fact. He gave you reasons why he believed that. It's been asked and answered. I object on that basis. If you have a specific question, go ahead.
Scientology has that indicate that I knew of, that I was fully aware of the fraudulent nature of the conveyance?
discovery exchanged back and forth in this case and there's been deposition testimony by your co-defendant that you knew of his breaches of the settlement agreement. So I don't want to limit the evidence available in the case that's already on the record by way of this memory |
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quiz, but certainly there was that day in, I believe,
March '90 that indicated his intention to breach and we argued that there was an active breach by his participation in that proceeding because of the sham nature in which he had arranged to be served with the subpoena. There was no valid reason for him to be there. The judge, for whatever reason, saw fit to exclude him. There has been deposition testimony from Mr. Armstrong of your knowledge of the breaches of the agreement. There has been --
was I aware of? We're talking about before the fact here.
his testimony that you were aware that he had no intention of abiding by the settlement agreement for his own reasons which he stated specifically. I don't remember, but it's in his deposition.
one breach that you accused Mr. Armstrong of doing that I knew about in advance? I'm talking about specific breaches here.
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The relevance is that every time Mr .Armstrong allegedly breached an agreement Scientology is looking to me for $150,000.
we're looking for from you, sir, I don't want you to --
clear, so if you can rephrase the question. I'm not going to foreclose the area, but that particular question isn't clear and the reason it isn't clear to me, if I remember back that far, is you are not saying -- is the point in time and you are not making clear, you are not connecting up whether or not the knowledge -- when the knowledge of the breach was supposed to be.
notes might this be a good time for a break?
other attorneys to make objections instead of this double tag deal? |
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is entitled to individual counsel. She's representing the plaintiff, okay?
one person starts to talk he or she be allowed to finish what they are saying before there's any interruption. If it's inaccurate or there's some objections, certainly it may be appropriate to make it, but I'm not sure in the middle of someone speaking it's appropriate to jump in and interrupt.
with respect to my answers? A couple of times you jumped in a bit early.
appreciate it a lot.
can.
Scientology International was formed?
names?
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Productions, a registered dba for CSI.
one other called the Uniform Exchange. It's a division that acquires our uniforms and such. I think they have a registered dba. Other than that I don't think so.
staff in bulk, contracts with tailors to make them, such as that.
some question as to what Scientology, when I used "Scientology," what that meant. How many, if you know, how many Scientology-related organizations are there?
ambiguous. Related organizations? You mean other religions like any church of any religion is related in the sense there's churches? There are churches of Scientology.
I have Religious Technology Center, Church of Scientology International, Church of Scientology California. I don't know if there are any others. This is on a face sheet on an Appellate District Division. I'm just wondering. I'm trying to get an idea in my mind if CSI has some related |
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entity and where it is in the scheme of things.
question is how many?
approximately?
separate organizations? Could you explain to me?
of one that controls all the others?
I'll answer it anyway.
performs the function of the Mother Church regarding the entire religion and its individual component churches, missions and groups. That organization is Church of Scientology International.
organization? |
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organization?
organization.
and service marks of Scientology. It licenses us to use those marks and is responsible for the purity of the technology of our religion.
service marks on any of the technology?
management is there a Board of Directors?
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Do you know the names of those individuals?
Michael Rinder, R-I-N-D-E-R; Kirk Weilend, W-E-I-L-E-N-D; Guillaume Lesevre, G-U-I-L-L-A-U-M-E, L-E-S-E-V-R-E; and Katherine Rinder.
that's all of them.
pre-determined regularity?
what the point is in a fraudulent conveyance case what the activities are of the board. We gave you their identity and the fact there is one, what further relevance is there?
how the inner workings of this organization, plaintiff organization, how it works in order to try to put together some defense. I don't have the facts, and if I specifically ask something and can't get an answer from the person that Scientology has provided, then I would like to know who to go to who may have the answer.
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would you move along?
board meets. Explain to me what the relevance is.
often they meet and if there are minutes of any of these meetings that reflect the fact that the board has decided that these lawsuits should be filed. If this is not a board-sanctioned activity, then it's probably not a proper activity.
proper or improper activity according to the board.
they may not -- whoever has done this may not represent the Church of Scientology International.
at this point in what's been said. I will say I do not appear to have and do not know the contents of the Cross-complaint, if any. So I don't know whose Cross-complaint it is and what it alleges. So I have no idea if there's any relevance on that and I have not attempted to memorize the affirmative defense here, but from what you have given me I'll sustain the objection.
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minutes of its meetings?
address, the location of the board?
meets?
are kept?
beginning that's one of my functions, to keep them, maintain custody of them in my file cabinet.
vice-president is Liesa Goodman; and Janet Weiland, W-E-I-L-A-N-D. Liesa is spelled L-I-E-S-A.
Weiland on the board. That's Janet's ex-husband. It's not relevant to this. |
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name is Leslie Browning. And the treasurer is Jonathan Epstein.
the underlying lawsuit in this matter.
counter-claim?
need to know what the allegations are.
a creditor of Gerald Armstrong?
conclusion.
sense, but if they are a creditor I'm entitled to get that information. You see what's happened here is that plaintiff, Scientology, as I've said, has sued me for seven million dollars based upon, as far as I can tell, upon Mr. Armstrong's alleged breach of a settlement agreement in a lawsuit that's titled Armstrong I out in Los Angeles Superior Court, a case that was settled in 1985 or '86, something like that. |
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breaches Scientology is claiming that Mr .Armstrong deposed of money. Using that, they say that they are a creditor.
what it is that Mr. Armstrong allegedly did with my participation according to parts of the allegation of the current Complaint that make me allegedly responsible for a seven-million-dollar debt. Is that clear? Does that answer your question?
You don't understand.
Mr. Armstrong has done that gives rise to a seven-million- dollar liability.
you should file a demurrer.
overruled.
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tell, in this Complaint.
you are arguing with each other. If you have a question to ask, go ahead and ask it, then we can figure it out from there.
the alleged breaches of the contract that Scientology is relying on in order to collect damages in this case that either Gerry or some entity related to Gerry has done?
object to this question, Your Honor, on the basis that the breaches form the basis, as Mr. Walton has said in his roundabout way, for a lawsuit that is ongoing in Los I Angeles. All those breaches are delineated in the Complaint in this action that have been provided to Mr. Walton and provided to Mr. Greene and Mr. Armstrong, and those breaches are all delineated there at great length, all the facts that are being litigated there.
for discovery as to facts relevant to that action. This is an action for declaratory relief based on the concept that once judgment is obtained in that case, we want to be able to obtain property that Mr. Armstrong fraudulently conveyed.
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Angeles suit?
into the allegations of this Complaint. Included in the allegations of this Complaint are the so-called, at least the general allegation of breaches in the other action. I understand it's not necessary that plaintiff try the case and become a judgment creditor in order to sustain this, but I think Mr. Walton is entitled to know the background upon which you are asserting an indebtedness, whether it's correct or not, and from that standpoint I would rule that he can go into what is the basis upon which you are pleading an indebtedness from Armstrong to the plaintiff.
irrelevant at this point because we're only asserting in this case there was a fraudulent transfer of money to Mr. Walton. That's what's relevant in this case. Whether or not there is ultimately prevailing in the other case or not is not relevant here at this point in time.
new Code. I'm trying to find cases that flush it out. However, I would concede that counsel may be true, he may be correct if there were not the conspiracy allegation. What the allegation is is that I conspired with |
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Mr. Armstrong to do these things that they allege in some lawsuit to which I am not a party, and based upon my conspiracy with him I'm brought in to the tune of 2.8 or 3.8 million dollars, which is substantially more than what the transfer was worth.
interpretation of the uniform fraudulent transfer act, that's one thing. What I'm trying to figure out is what exactly did I conspire to do. What I am being accused of conspiring to do I don't know.
not need to go into all the facts into which the LA suit is based, but why don't you direct your question, then, to the allegation of conspiracy and the fraudulent transfer. To the extent there's an overlap you are certainly entitled to go into it, but I will revise my current -- my previous ruling that you can go into the whole area, but just keep it in connection with this Complaint and the conspiracy complaint and get some nexus from this of what you are going into.
to Set Aside Fraudulent Transfers.
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Complaint. I'm just going to ask you questions regarding the Complaint.
once.
and keep out of this until asked, but I am going to start asserting when we start getting off the track. So Mr. Walton is entitled to go ahead and ask general questions and ask your recollection, if that need be, if that's the approach he wants to use.
to ask questions with reference to the Complaint, that's fine.
way he was intending to proceed.
Scientology has filed a Complaint and alleged a conspiracy between Gerald Armstrong and Michael Walton, correct?
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the Complaint, I understand, do you have any facts or any
information to support that allegation, only the conspiracy allegation? We're not taking about damages or breach of contract or any conveyance.
can do it this way, as Mr. Farny characterized it as a I memory quiz. He can give whatever information he recalls. He's here as a representative of the party. If we want to do that and not allow him to look at the Complaint and see what he knows, give him a grade, we can do that. I don't know what the point is if you want to get his best testimony. So I object to the procedure.
it's too broad. What supports the conspiracy. A conspiracy is made up of various parts. You will have to go through each part.
Farny, specifying what Complaint you are looking at? I believe there have been a couple of Complaints in LA.
looking at. I'm looking at the Verified Complaint To Set Aside Fraudulent Transfers and For Damages; Conspiracy, |
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filed July 23, 1993.
sure the record is clear.
number two: "In or about February of 1990, Armstrong began to take a series of actions which directly violated provisions of the agreement."
Corydon, Joseph Yanny. There are a few others. Vicky and Richard Aznaran; Malcolm Nothling; Denise Cantin and Sam Ochi. The latter two aren't actually litigants. Those are the ones I recall as I sit here.
February of 1990?
Yanny and I believe Aznaran, but I'm not certain about that.
know?
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subpoena for deposition and gave testimony beyond that
which was directly called for by the questions asked so as to actively and voluntarily support that litigant in violation of the agreement settlement. He may also have done other things.
than just merely honoring whatever legal obligation he would have had with respect to that litigation.
deposition transcript. I was there the day we had the hearing concerning his motion --sorry, concerning his deposition. He came in with Corydon and his lawyer and appeared to be actively assisting them in preparation for the argument.
those parties?
hear and I got the general sense that he was helping them. He appeared to be like saying things along the nature of "they're going to claim this; they're going to claim that," but I don't remember the specifics of it as I sit here. |
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hearing; up comes one of Yanny's co-defendants and comes up to the group that was standing there, which was Gerry and Bent Corydon. And his lawyer shakes everybody's hand and it was apparent to me, because I was standing fairly close, maybe 20, 30 feet away, that they had been expecting this gentleman. And the gentlemen then handed Mr. Armstrong a subpoena. I could hear words to the effect: Here's your subpoena, Gerry. And they all burst out laughing having a great old time about the subpoena.
that. About a month or so later, if my time sense is correct, we had the hearing at the trial.
earlier than February. My recollection is it was earlier than February. It may have been February, I'm not certain of that, but just to be fair. In fact, I seem to recall in the fall of '89; it wasn't until the fall of '89, but I don't remember.
specifics regarding Gerry's breach of the contract that gave rise to this Complaint?
us for quite a long time. |
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What specifically, which cases or what matters?
I'm going to object, Your Honor, because Aznaran is specifically part of the Los Angeles action and is being dealt with in detail there. We can ask the witness to do a synopsis, perhaps.
think paragraph 45, plaintiff's request for punitive damages, states that defendants Walton, Armstrong and the corporation knew of Armstrong's obligation to plaintiff and knew that plaintiff's claim could only be satisfied out of the property.
of Armstrong's actions, I think he's entitled to go into what the action and intended actions are.
place after the transfer of the property, that' s why I'm having a little bit of a difficult time with it.
difficult time with the breath of the allegations here and with the dates. So if you want to make it a cutoff date then I can rule on that. But the allegation for punitive damages does state knowledge of Armstrong's actions and intended actions, so he's certainly entitled to go into |
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that, what those actions are.
being talked about is what acts he took. I think you used the word "actions" in relation to the lawsuit asking about the Aznaran action, so if we can get a clarification on that when you get back to your question I would appreciate it.
acts the plaintiff is referring to that Mr. Armstrong did, you may pursue that under the allegation -- because of the allegations in paragraph 45.
just to make it clear. I'm trying to find out what it is that Scientology has alleged that Gerry has done and that I conspired with him to do. So I'm trying to start with the beginning which, according to this Complaint, was in February of 1990. And after I determine what it is that he's alleged to have done I'm going to try to find out how it is I conspired with him, just so you know where we're going.
Corydon and two incidents there, and Yanny. And I took it as one incident which was Gerry working for him as a
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paralegal.
And I think when we get these individual
incidents out of the way maybe we can break them down.
a question?
your witness who seemed to be confused.
working for him as a paralegal?
allegedly breached the contract by working as a paralegal in the Aznaran case. Did I miss that?
that Gerry allegedly did that allegedly breaches the agreement?
that case as well.
in determining damages Scientology is sort of charging -- how does Scientology arrive at the damages number?
conclusion. |
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communications.
Walton. Mr. Walton is entitled to know what the basis of the damages is and if it's being computed at X dollars per Offense.
the questions.
damages computed by offense?
forth in this Complaint the damages amount that we had calculated at the time we filed the most recent incarnation of the breach action in Los Angeles as it constituted itself at that time. That was based upon an amount set forth for violation of the liquidated damages provision to the settlement agreement, which was $50,000 per breach plus damages according to proof and punitive damages.
I'm not a lawyer so it's going to be incomplete, I'm sure -- but that each person to whom assets were transferred in a fraudulent manner would only be liable to the extent that they received assets. Now if I'm wrong |
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then I'm sure my counsel can correct me, but that's my
understanding of one of the positions here as regards purely the fraudulent conveyance of it.
have raised the issue of whatever fraud, pressure or malice was engaged upon on your part that gave rise to punitive damages in that aspect of it.
but that's my understanding of the basis of damages in this case.
damage clause, that's the original underlying contract; is that correct?
injunctive relief sought as well as damages according to proof for violation of the provisions of the agreement that aren't pinned to the liquidated damages clause.
pursuant to the liquidated damages clause. Can you do that?
occurrences which generated $50,000 in liquidated damages?
Because he's asking him to enumerate what's in the Second |
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Amended Complaint in the Los Angeles action which is set forth there in each separate breach and which ones are connected with the damages and provisions and which ones aren't.
witness but I think it's a waste of time and I don't think it's particularly relevant at this point. Mr. Farny outlined the basis for damages in this action against this witness and it doesn't include the details of any of those breaches.
Why is it relevant here?
again I'm trying to determine what it is. It's sort of like a two-part thing here. We have this underlying lawsuit to which I am not a party; I have no idea what's going on in that lawsuit. But based upon that lawsuit Scientology is claiming some three or four million dollars in damages all of which, not just a little bit of which but all of which they're claiming that I'm equally liable for. I don't know what they are. I don't know what it is that Scientology claims Gerry Armstrong has done, but whatever it is they're claiming he's done they're claiming that I have conspired with him to do it. I cannot even come close to defending unless I know what it is I'm
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accused of conspiring to do.
the conspiracy?
scope of conspiracy.
to enable to fraudulently divest himself of the assets. That's what's complained of in this action.
paragraph 42: "The defendant conspired and agreed to hide any and all future assets by Armstrong and his corporation. They agreed that Walton could take ownership of his assets of value." So long as Armstrong is breaching the agreement, that's the conspiracy alleged and it's alleged pretty clearly. It's not that he conspired with Gerry to breach the agreement. If it were that he would be a party to the Los Angeles action.
conspirator can be held liable for the whole thing and you also have your punitive damage claim where you are alleging that Walton knew of the actions and intended actions against plaintiff.
million in punitive damages now. As far as the actions are concerned I already said that those are relevant and |
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you can go into that. I'm still not clear as to why, what
the relevance of each particular item of damage is.
I'm sure what the relevance to me is is I'm trying to be able to address each of these allegations and sort of in order of what I consider of importance, and one of the things that is important to me is their value. As an example, it's my understanding -- and I'm trying to elicit that testimony -- Mr. Armstrong wrote a letter subsequent to this 19 --
he wrote the letter but...
number of people and I'm trying to find out if each of those copies was worth $50,000 or just the letter was worth $50,000. I'm trying to see how this figure of $3,800,000, $1,800,000 plus the sanctions that are set forth there and exemplary -- general damages of 1.8 million, exemplary and punitive damages in the sum of three million, I would like to find out what this 1.8 million dollars in damages is.
under this conspiracy clause and you are entitled to go into that. Okay.
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---o0o---
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---o0o---
understand you haven't served Mr. Miscavige with a subpoena so his deposition is not on.
him.
---o0o--- EXAMINATION RESUMED BY:
figure out what this 1.8 million dollars in general damages is enumerated in the Complaint. Do you know if the 1.8 million is a factor of multiplying $50,000 by the number of alleged breaches?
sequentially from the very first one in terms of time until the last one?
the breach complaint in the order it appears there. That's the easiest way for me to do it and I see another copy over there. We can do it chronologically but I think I'd be flipping back and forth in the document, although |
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it appears chronologically in the Complaint.
Complaint.
through we wouldn't progress chronologically, we could make sure we have dates of each of these alleged breaches.
combined, essentially the two Complaints, right, in LA?
exhibit to make it part of this record?
are what the basic allegations are and basic testimony and utilize that.
is.
it. If you have any specific questions about any allegations you can consider flushing them out. |
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relying on the allegations in the Complaint.
in this action were verified by the attorney in the office it's legalese, we know how they're produced. It doesn't give me enough factual information to intelligently respond. I have no idea what a lot of this stuff is and certainly those of you who have been in the Scientology business for a long time now –-
you coined the term earlier. This is just a legal complaint. Having an understanding of Scientology isn't required. If you have specific questions, why don't you ask the witness, that's what he's here for. Otherwise, it's pointless to have him read the Complaint.
give me the very first – in this case I think we're going to have to do it in chronological order – the very first breach of contract Mr. Armstrong allegedly did that gave rise to 50,000-dollar liquidated damages.
suing on aren't necessarily the same thing.
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million
–
the Aznaran case beginning in June of 1991. This is alleged in the First Cause of Action. Wait a minute, wait a minute, hang on. It's the assistance to the Aznaran as alleged not in the First Cause of Action but the Second Cause of Action which encompasses his assistance to Aznaran and Yanny beginning on page seven.
the RTC v YANNY case.
A. Religious Technology Center versus Josheph Yanny.
you have in front of you, Mr. Walton.
Yanny case?
second declaration and formed paralegal services for Mr. Yanny around that time in the summer of '91.
services?
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50,000 breaches.
breach for the two declarations. Q. Is there any 50,000-dollar damage claim for the paralegal services?
Action, but I'm just not certain it appears. So, yes, although it's vague it specifically references the two declarations and references the paragraphs 7G and 10 of the agreement which concerned liquidated damages for disclosures.
paragraph of the Complaint which alleges what paragraphs of the settlement agreement were violated by the conduct alleged in this Cause of Action and that conduct is referred to in paragraphs 30 and 31.
document was filed on behalf of Scientology by Scientology attorneys, and if you are finding it hard to understand what it represents you can certainly sympathize with me.
you are sued in which we have alleged that you have conspired with Gerry Armstrong to receive his money for no |
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fair compensation. Nowhere do we ever allege that you
conspired with him to breach the settlement agreement. He was doing that. What you conspired with him to do is make him judment proof, to stash his assets with you, survive the litigation and take it back or not at the end. So I'm having a little difficulty talking about another case I wasn't necessarily prepared to discuss today. I am more than happy to because I understand your reasoning for wanting to have the information, but if I have to refer to the Complaint which, including exhibits, stands nearly a half inch tall, excuse me if I have to do that. Do you see what I'm saying?
understand your answer.
unclear also. You are asking him to combine both the liquidated and other damages in here. Obviously the liquidated damages, according to the Complaint --
Here's where I think I sent you off the rail is you asked me what Armstrong did with regard to Yanny and I answered it independent of a reference to this Cause of Action. Then we came back to finding that conduct within this Cause of Action, and two of the three instances I gave are expressed here; the third isn't. |
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answering the third one. I saw what's reflected on the documents and I think that's why I threw you off with my original answer.
deposition I asked you – Let me ask you again. If I repeat, please forgive me.
is a factor of multiplying $50,000 by the number of alleged breaches that Mr. Armstrong committed?
numbers are expressed here and we can total them up. There are different types of damages alleged in the underlying Armstrong breach case. One is for disclosures of information, which is liquidated damages connected to that; one is for aid, and that's consequential damages according to proof. We're just talking about the liquidated damages here. I believe you are correct, although we can just take a calculator out and take what's expressed on pages 29 onward and add it up.
and multiply those by 50,000?
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really harassing and unnecessary for this witness. All the breaches are laid out in the Complaint. They are all there and you can take out a calculator and we'll take five minutes or we can sit this witness down for hours and hours of testimony for what? I think it's harassment at this point. We can do it; we'll sit here and do it.
there any specific questions that aren't covered in the Complaint? If you want to test an allegation or something, fine; but if it's just listing them, if they're already there. . . I don't want to interrupt your taking of the deposition, but at the same time if you are just -- you say is this in the Complaint and the answer is yes, I see that in the Complaint, we're not getting anywhere.
would like to be able to ask questions about these individual allegations. Simply reading a Complaint that some lawyer has prepared doesn't really tell me what happened.
telling me what more you want. You are asking him, first of all, to list it. If it's already listed then you can go ahead and read it out of the Complaint if you want it read into the deposition, but I don't know what you are |
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doing. I don't have the Complaint; I don't know where you
are going and there's been an objection. Lead me or direct me.
further points in there why don't you ask rather than go through --
of Action and ask specific questions about specific paragraphs.
me, and I don't mean to be obstreperous.
we'll be talking about the Verified Second Amended Complaint, Damages for Preliminary and Permanent Injunctive Relief for Breach of Contract in Superior Court, State of California, County of Los Angeles, BC 052395.
employment by Yanny to work on the Aznaran's litigation is a direct violation of paragraphs 7G and 10 of the Agreement." Is this part and parcel of the alleged breach that gives rise to a claim of $50,000?
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assistance. That's consequential damages according to
proof and that was the third part of what I was talking about. The declarations are in the next Cause of Action.
occasion that caused the breach?
together a response to a TRO, preliminary injunction application we sought in a second suit we had in regard to Julian who worked in his office and helped prepare papers.
Yanny and Armstrong both admitted it.
what declaration that is?
Maybe they start later in the attachments, declarations of Gerald Armstrong, July 16th, 1991.
support of?
preliminary injunctive relief against him representing the Aznarans because Mr. Yanny had been our former lawyer and to do so violated his duties as our attorney. He was subsequently disqualified from the Aznaran cases as their lawyer, in any event. |
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number if I showed it to you?
to me, certainly.
lawyers first.
the previous case.
other than the declarations in Yanny? Anything else he did, Mr. Armstrong did that Scientology was aware of?
question. Anything other than what I've said, that's what I recall here.
Second Cause of Action references two declarations filed by Yanny, executed by Armstrong filed by Yanny, paragraph 31 . Are these the same two declarations that you referenced in the First Cause of Action?
declarations per se. This one references an aid he gave in working as a paralegal in the preparation of them. This Cause of Action concerns -- let me finish -- the declarations, the disclosures in the declarations that resulted. So to the degree, yeah, they're the same
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declarations we're talking about.
declarations that Mr. Armstrong gave Mr. Yanny, Mr. Armstrong executed and that Mr. Yanny submitted to the court, those same two declarations give rise to the breaches that are claimed in the First Cause of Action and the Second Cause of Action; is that right?
concerns Armstrong's work for Yanny as a paralegal in defense of that phase of the RTC v YANNY litigation. That work not only encompassed the preparation of the declarations, it's that assistance.
information in the declarations themselves give rise to the Second Cause of Action. We may be saying the same thing. I want to make sure we're talking about different types of conduct in the First and Second and there are actually different claims for damages in the two Causes of Action.
what other specific breaches is Scientology alleging that Mr. Armstrong committed in the First Cause of Action?
He already listed them for you. The declarations were part of his answer. |
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specifically.
working in Yanny's office helping Yanny prepare papers to resist our effort to get him disqualified from representing the Aznarans by way of an injunctive relief in this case or through a disqualification motion in the Aznaran case.
breach of the contract?
of?
Cause of Action, in the Second Cause of Action is it fair to say this 50,000-dollar liquidated damages refers to the two declarations, result because of the two declarations that Mr. Armstrong executed?
at that point.
what the alleged breach is in the Third Cause of Action?
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is -- thanks, I was a little distracted.
more softly.
Greene as a paralegal to work on the Aznaran case as a paralegal, both Ford Greene and another lawyer, John Elstead. These are the services he provided for them at that time.
of the case, that's how he has described it. That seems a pretty ample description.
like -- I'm still not sure exactly what it would be.
said in his deposition and such is that a compilation of documents for the case, assisting the lawyer, I would imagine helping to prepare drafts because I know he did that with Michael Flynn before the '86 settlement. I couldn't imagine he wouldn't be. That isn't necessarily something I know. |
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case that was? Is there a way to reference it so I can find it?
point that out to you.
document production included deposition transcripts from the other action.
I checked and it was sent to your office. I will be sure you get it again. It's a document production that Mr. Armstrong testified to. At least perhaps a fairer thing to do, a more fruitful way to gain the information would be to depose Mr. Armstrong again, ask him what it was.
is different from the address than what you put on the Notice of Deposition. What is the formal address that you wish to have documents served to you in this case? We got a P.O. box on the Notice; you have an address on your card. We have been sending things to what you have designated.
Drive and I have continually gotten service things there; |
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in the middle of the night some guy on a motorcycle came
by, all kinds of things. Either the Post Office box or Larkspur Landing will work.
keep it clean.
helped so far. I don't want to argue about this. Let's move on.
material. We'll make another copy.
a Proof of Service?
documents from Mr. Greene.
document entitled Lis Pendens, was the last lis pendens that indicated a service not only to myself and Mr. Greene but a number of other attorneys, and, again, I didn't receive anything nor did the declarations indicate that any of the other attorneys did. All I'm suggesting, even |
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though you are sending things that maybe they're getting lost, not only with me but other people, as well.
Go ahead with the deposition, we'll make sure you're covered.
through 23, although it was subsequently transferred to Texas and had a different case number.
witness about, Mr. Walton --
is there anything else specifically that you know about that Mr. Armstrong did for Mr. Greene, specific stuff that he did?
one you are asking me about?
specific acts that are complained of in subsequent Causes of Action that concern this. Beyond that, that's what I recall right now. |
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to the paralegal services which Armstrong has provided to Ford Greene and John Elstead on the Aznaran litigation, Armstrong also provided Aznaran with a declaration dated August 26, 1991 and filed in the Aznaran case."
what Scientology alleges gave rise to a 50,000 liquidated damages?
couple of seconds? I want to grab a copy of this Complaint. I have a copy out in my car.
second. On the First Cause of Action the date is alleged to be June 1991 and July 1991.
you wanted to put a bright line on it, it was when Gerry traveled to LA with Yanny, but that seems to be
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as
good a bright line as any.
reasons set forth in the Complaint.
date July 16th, 1991, no?
say exactly when the hearings were that are referred to in paragraph 31, but they were in the summer of '91.
with Yanny, which I believe wasn't very long.
of 1991 Armstrong began work for Greene's offices as a paralegal. That's the time that this Cause of Action accrued?
the dismissal of the Aznaran case. |
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26, 1991; is that right?
about that time, but it's the act of providing the declaration that bears that date that was filed in the case.
paralegal services which Armstrong has provided Ford Greene and John Elstead on the Aznaran litigation, Armstrong also provided the Aznarans with a declaration dated August 26, 1991 and filed in the Aznaran case."
the paralegal services sort of definition as a separate breach?
of the declaration is separate from the activity of providing paralegal services but aren't necessarily exclusive of each other, but it's a separate activity.
damages?
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the declaration?
contained in that declaration, what kind of information?
description that's contained in this Complaint, I just don't remember. I haven't read it recently.
ten line 20, it says: "In that declaration…" – referring to the same declaration we were discussing the last three or four minutes – " … Armstrong describes some of his alleged experiences with an concerning plaintiff and purports to authenticate copies of certain documents. These actions and disclosures are violations of paragraph 7(G), 7(H), and 10 of the Agreement requiring Armstrong pay to CSI 50,000 in liquidated damages."
purported to authenticate?
they're attached to the declaration, so it's easy to look at them.
to the Complaint? |
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Cause of Action. First one is the Settlement Agreement itself, and the next exhibit picks up with the Fifth Cause
Cause of Action accrued on or about March 19th, 1992.
so.
March 19th, 1993, Armstrong, acting through Ford Greene as his agent, transmitted a press release to various members of the media including Cable News Network, San Francisco Chronicle, San Francisco Examiner, and the Marin County Independent Journal."
that Mr. Greene was Armstrong's agent at that time? Do you know of any?
the case we originally filed here in Marin County which became the breach case in LA, and that was filed about three weeks before that. In any event, by the next |
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day we knew because
both of them were on CNN.
be easier: "Said press release violated the Agreement in that it constituted disclosures by Armstrong, through Ford Greene as his agent, of his experiences with Scientology as prohibited by paragraph two."
your response was at this time Ford Greene was his lawyer; am I correct?
Mr. Armstrong was represented by Mr. Greene?
press release, and I saw that he did give an interview to CNN. He wasn't really shying away from the media.
date -- well, I think it was the beginning of March, around the first week of March we filed the breach action up here because we had attempted to enforce the settlement agreement in Los Angeles where the underlying case was originally pending, and the judge who took Judge Breckenridge's place was of the opinion that Marin County |
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had the jurisdiction over the dispute because that's where
Armstrong lives.
here; got a TRO and then there was a motion to transfer the case. It then got transferred down to LA. While the litigation was pending Armstrong continued the course of conduct he had embarked upon, which is basically ignoring the Settlement Agreement which he didn't believe he was bound by, for whatever reason. We won't go into that now.
consolidated two lawsuits and that concerned all the breaches into one Complaint which alleged them chronologically so we have one clean package that will be tried by the trial court. So even though we're now in the fifth of 20 Causes of Action, it happened during the course of this litigation.
one?
March fourth.
February.
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against Armstrong in Marin County?
press release?
damages for the dissemination of that press release?
paragraph 47, the dates of these allegations of March 19th and 20th --
issuance of the press release?
1992, Armstrong and Greene, acting as Armstrong's agent, granted the media additional interviews which also violated paragraph two to the Agreement."
from Armstrong in one of the interviews. |
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the misrepresentations Hubbard has made about himself since the beginning of Dianetics until the day he died." Is that the quote?
that the Church found actionable?
the entire broadcast, the CNN broadcast which contains the interviews is attached as Exhibit C.
legal conclusions; if you can answer it, I would appreciate it -- this is the second time I've seen "Armstrong and Greene, acting as Armstrong's agent, granted the media additional interviews which also violated paragraph two."
that Mr: Armstrong's attorney might do is a breach of the contract?
indicated.
conclusion.
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so far about Mr. Greene being Armstrong's lawyer. It may be there.
Greene is Armstrong's agent other than being his attorney?
he's asking the witness to draw a legal conclusion about what's agency and what's not.
what you're asking about. I'm going to instruct him not to answer unless I get some kind of cross-order on that one.
on.
Action, it's not just the quote that Scientology finds actionable, it's the entire process of granting media additional interviews of which the quote was part; is that fair?
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objection.
If we're going to go through the Complaint
line by line just reading the Complaint, it seems pointless and it's wasting everybody's time.
concerned.
everybody is paying for it.
it. I'm trying to find out if there's anything else going on here.
here
to ask if there's anything outside what's stated in the Complaint why not ask that rather than reading the Complaint. You are literally just wasting all our time. I have been sitting here patiently; I'm not patient anymore.
Greene granting additional interviews, that's a 50,000 dollar liquidated damages?
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Whether Greene facilitated in helping to set it up, or
whatever, I think that's what the lawyers intended when they wrote paragraph seven. Greene didn't settle this, Gerry did. That's the interview we objected to.
interview that you're objecting to?
have the outtakes from the interviews.
Seventh Cause of Action on or about February 1992, how many dates do we have in here?
for?
violated the agreement, 50 for each of the five.
is that in February Mr. Armstrong agreed to appear as an expert witness in some litigation; is that accurate?
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Complaint -- my objection is we're doing exactly what you
said you weren't going to do; you are reading the Complaint, asking what is said in the Complaint is what is said in the Complaint. It's been verified. If you want to ask him anything other than what's in it, that's fine. I want to move along. There's no point in sitting here while you read the Complaint.
be addressed?
through the Complaint like I was sort of --
as you read it. It's obviously right, it's there. If you mean is that there, it is there.
information.
believe.
question.
that isn't correct to your knowledge? Is there any part of the Complaint that isn't right? |
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have been amplified through the discovery in the case for which we have more precision now where we had just a generality then, I would say no. I am still satisfied with the Complaint as I was when I verified it. There's been no discovery taken since April. Yes, I'm satisfied with it.
takeoff for further questions, that's fine.
50,000-dollar liquidated claims go with which alleged breaches.
of help to you, beginning on page 29 it states which Causes of Action we are seeking liquidated damages for, which Causes of Action we're seeking some other form of relief for. They are pretty succinctly set out here if you understand the difference in the types of aid and assistance to litigants, and there's disclosure of information. The liquidated damages comes from disclosure of information. So where you see a paragraph that alleges disclosure of information, that is going to translate over to page 29 and over into a liquidated damages claim. It's really simple.
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of Action and maybe I'll become more clear, and if I don't
then certainly I'll try another tact.
any questions. At the same time, your reading something in the Complaint is unnecessary.
Cause of Action, and it starts on page 20 and it describes
alleged entitles it to $950,000 in liquidated damages. Can you explain that to me?
the Complaint as an Exhibit E is nine pages long and provides an extensive amount of information. Now each of the individuals designated in paragraph 87 received a copy of this letter, so it's the disclosure of information to those individuals at $50,000 a pop which totals 950,000.
Complaint?
Q. This is a letter dated December 22nd, 1992 addressed to David Miscavige care of Laurie Bartilson, addressed to David Miscavige and all other individuals who participate in the control of Scientology in care of |
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Laurie
Bartilson. Is that the letter?
50,000, is that how Scientology got to 950,000?
arithmetic inaccuracies, but I just looked through it and it looked correct.
was represented by Mr. Greene on December 22, 1992?
Did I do it right?
damages from Mr. Armstrong for copying his attorney a letter?
either.
adverse litigants and their attorneys. Those disclosures made to those individuals form the bulk of the cc list are listed in paragraph 87, I believe it is, that Mr. Farny |
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testified about. They're listed in the Complaint.
paragraph 87?
list does Scientology claim there's a 50,000-dollar breach?
attorney before I answer that.
only come up with 850. I think Greene and Morantz were on there in error because they were counsel of record, so there appears to be a typo.
those two names.
breach to disclose it to her.
knowledge?
occasions, but yeah. |
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Aznarans and we're alleging Armstrong having worked for him was a breach. So disclosures of information certainly helped us out by putting the disclosures in writing, made it easier to prove.
asked and answered. If it is, forgive me and we will go right past it. But look very carefully at the dates of this Complaint in terms of allegations and just confirm them for me that they're all accurate.
Complaint for this Cause of Action?
do that?
Mr. Farny, what you are going to do is first Mr. Walton is going to withdraw the last question and you are going to |
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review the Complaint tonight and advise him tomorrow if
there are any dated on the Second Amended Verified Complaint in LA that is inaccurate; is that right?
deposition and you are going to conclude your part before Mr. Walton continues?
a tag-team deposition. ---o0o--- EXAMINATION BY:
you know, I represent Gerald Armstrong and The Gerald Armstrong Corporation who are defendants in this matter.
been taken dozens of times before and you have sat in on many more than that, I would like to clarify with you that if you don't understand the question that I ask you tell me because if you answer it I'm going to assume you understood the question that I'm asking. That sounds good to you, doesn't it?
been deposed dozens of times. At least a dozen.
times. |
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organization related to the Scientology religion?
also, just for the record, I'm not going to adopt Mr. Walton's use of the term "Scientology." I'm going to use Scientology generically to refer to the Scientology religion at large and have that be distinct and separate from CSI or plaintiff, which is the actual litigant in these proceedings. Does that work for you?
affiliation with Scientology more or less continuous from that point?
was that in consequence of taking a personality test?
practices are not relevant. For the purposes for which |
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Mr. Farny is capable and competent to represent CSI in this
deposition is relevant, but his personal religious practices, what courses he's taken, about any religious practice he's been involved in is not only irrelevant it's protected.
beliefs wouldn't be an issue in this case.
questions, Mr. Moxon, I'm asking Mr. Farny questions with respect to the depth and extent of his involvement with Scientology.
interrupt you -- the reason that is relevant is that it goes to his qualifications to serve, one, on the board as an officer of CSI; and, two, it goes to his knowledge and understanding of Scientology practices as certain matters with respect to the Scientology practices of fair game and other types of things have been alleged as being involved in Armstrong's affirmative defense.
seeking to inquire into the truth or validity of whatever it is that Mr. Farny believes; that is clearly an area that is impermissible. I'm not asking him about that. I |
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just want to know what he's done.
specific religious practices which is exactly what you asked are in fact protected. The issues you raised are not issues in this lawsuit. There's no practice of fair game in Scientology, nothwithstanding your allegations or what Mr. Armstrong has alleged. You can't just allege and turn this into a trial of the Scientology religion. This is a fraudulent conveyance case. Whether or not Mr. Farny has a belief or practice in Scientology doesn't matter. It's completely irrelevant. And the extent to which he has practiced Scientology is protected. So whether or not you think it's relevant doesn't matter because it's protected. So I object on constitutional grounds and privacy grounds.
Number one, the practice of fair game is alleged under the unclean hands affirmative defense of Armstrong's Verified Answer. The practice of fair game as ruled by the California Court of Appeal in WOLLERSHEIM versus SCIENTOLOGY is not a protected religious practice.
witness is foundational with respect to what it is that he understands about Scientology and what the basis is for |
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his understanding and it's tied directly to the --
not going to go with what Mr. Walton did. There is one witness here that's been designated by the Church of Scientology International and I'm going to have one lawyer, not two lawyers. --
because I believe that it's absolutely improper for two lawyers to be representing one witness who in response to Mr. Walton's generic "give me a witness for CSI" has been produced. I want one lawyer objecting. I don't want to get double-teamed and tag-teamed. It's improper and it's not fair.
first. This is a designated witness and as such he is not appearing personally, and as such --
ahead and respond.
I am here representing him personally and as an agent for |
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the Church. Mrs. Bartilson is representing the Church
itself and the Church's interests per se.
not a party.
corporation, CSI.
International is the --
is an important issue. There's no reason why we can't both --
going to be representing CSI, the plaintiff. Now if there's something that goes personally to the witness outside the scope of that, then the other lawyer is representing him in that; is that correct?
claim.
his personal appearance attorney, but any objections that the corporation plaintiff has are party objections and will be handled by that party's lawyer; is that correct?
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who's objecting to what here.
that both of these lawyers are from Bowles & Moxon. It's not like they're separate counsel. Both these people are from the same law firm. And this witness was designated by them to speak on behalf of the corporation and that's what he's here to testify about.
alleged in affirmative defenses which stand and that's what I want to ask him about. I want to get from him what his understanding and background is with respect to his knowledge of the beliefs and practices of Scientology.
behalf of CSI. Mr. Greene filed a Second Amended Cross-complaint on behalf of Mr. Armstrong on which he made the allegations concerning fair game, and so on and so forth, referring specifically to paragraph 70. That and most of the other paragraphs in this Cross-complaint were stricken by the court as irrelevant and not necessary to the action on June 17th. I have a copy with the stricken paragraphs marked for Your Honor.
alleged double representation is Mr. Armstrong has sued individuals as well simply because they are |
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Scientologists,
so he has no compunction whatsoever as to
suing individual members of the Church because of their affiliation. Mr. Farny certainly has some rights here not to be sued and not to be attacked by Mr. Armstrong.
party to this suit; is that right?
attorney and the plaintiff may have an attorney and the objections will be made appropriately: If it's a personal objection, it will be made by the personal attorney; if it's a party objection, it will be made by the attorney for the party.
right?
saying, Mr. Greene, that this has some basis in the unclean hands defense?
Sixth Affirmative Defense and also the Eleventh Affirmative Defense of duress and undue influence.
stricken, absolutely stricken by the judge. It's out |
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of there.
Honor. You have a copy of the Answer there. I have a copy of the Answer here. The Answer stands.
for fraudulent conveyance of property. I don't see it. Anybody can allege it but that doesn't make it --
question that gave rise to this whole debacle was asking about what kind of Scientology tests Mr. Farny has taken. That has absolutely nothing to do with these issues. That is a personal matter of Mr. Farny and has nothing remotely to do with even his allegation as to fair game
it was before, that Mr. Farny's breath and extent of involvement with Scientology is directly relevant to his knowledge of its practices as has been alleged in the Eleventh Affirmative Defense of duress and undue influence. The practice of fair game is an issue in this lawsuit. One who becomes affiliated with Scientology does not become aware of fair game right away; one becomes aware of fair game only after a certain amount of involvement and I want to emphasize this individual also is here as an official of CSI, and CSI claims to be the Mother Church. |
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the religious beliefs, et cetera, I don't think that's too relevant. I'm not ruling out fair play.
out what fair game is supposed to be. I'm not ruling that out. I don't think it's necessary to go into the detail on the joining and the membership in the Church, and the interest in that does not outweigh the right to privacy. That's the ruling on that question.
his knowledge of Scientology does not outweigh the right of privacy involved in that as to that particular question when he joined and that type of thing.
we will look at that when we get there.
that your ruling would be without prejudice subject to me providing you with some written authorities and argument on that.
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How long was it from December of 1976 until the point that
you first became active in wearing some sort of legal hat for Scientology?
documents, Freedom of Information Act. I think that's my first involvement in legal affairs with the Church.
half?
were rendering those services?
Information Act documents on behalf of CSI?
been involved in one sort of legal capacity or another for an entity, whatever its name may be, that's affiliated with the Scientology religion?
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ascribed to the term, quote, "hat," close quote, by Scientology?
themselves or a compilation of material necessary to translate those duties.
and, two, the materials that train the person to do those duties.
to say that one is basically a job description, one definition of the term hat; and the other definition of the term hat refers to the materials that are used to train the person to do the job?
a legal capacity for CSI did you then move to a different legal capacity in your affiliation with Scientology?
privacy as to this.
all the background. With respect to his role, what he did |
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and what his entire history is in the Church is not
relevant to the fraudulent conveyance in this case. What's relevant is he's been proffered as a person who's testified. He's been corporate secretary for a number of years.
being improper. I think if the objection is going to be brought it's going to have to be brought by the party plaintiff. You are not protecting him personally; you are protecting or objecting to something in connection with the party.
getting into his whole background in the Church.
with his background with the Church; he is entitled to go into this since it is this witness that verified the underlying complaint in Los Angeles, or was it this one? He verified one of these complaints.
Verified Complaint in Los Angeles.
a period of over ten years prior to any incidents in this case.
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question because you said -- you talked about some legal
capacity. Do you mean when is the next time I worked in a legal area?
word, when you were doing the FOIA analysis?
documents.
the services you performed at that time?
employee of the Church or any Church at that time; I was volunteering.
volunteer or otherwise, that you performed in connection with legal matters having to do with Scientology?
weeks assisting the lawyers on a case involving some individuals affiliated with the Church in collating and analyzing documents.
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Are you aware of a component that used to be part of Scientology that was known as the Guardian's Office?
just made a reference to your second job, as it were, involved with the criminal prosecution in Washington, D.C. of Mary Sue Hubbard and Ann Kello (phonetic) and Duke Synder and the rest of those people?
didn't you?
out in LA.
an objection for CSI. References to the Guardian's Office, and so forth, were all made in the Second Complaint and were all stricken by the court. We're very, very far afield and it was long ago. The corporation, that plaintiff, was not formed until 1981. None of the action that is alleged in this Complaint occurred before that. We're talking about what jobs Mr. Farny did as a volunteer on other cases in 1979. I think it's |
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irrelevant.
proffered by CSI to speak on behalf of the corporation. This witness verified the Complaint. I'm entitled to inquire of this witness what his knowledge is of what in the Answer we have alleged to be the practice of fair game.
relevance of Mr. Farny's Guardian Office activities is his knowledge of practices engaged in by Scientology that know no limit in terms of legal constraints or ethical constraints that the rest of the country lives by, and I am entitled to inquire of this witness specifically what his knowledge of those matters is and that's what I'm doing.
asking him questions and regarding which he worked resulted in guilty pleas to felony charges of obstruction of justice, of burglarization of federal governmental offices, and the stealing of documents, and for these people to say that that kind of knowledge is not relevant when one another affirmative defense asserted by Armstrong is that the agreement that Armstrong is alleged to have violated constitutes a violation of public policy because |
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it's an obstruction of justice and seeks to suppress
evidence is all relevant to the approach of Scientology to suppressing any kind of information that may be damaging to it. And this witness has that kind of information and as Armstrong's lawyer I'm entitled to get it.
more closely to this lawsuit. I can see where it may be relevant in LA, but whether or not there may be a --
exact defenses that have been asserted in LA are asserted here and that defense primarily is that that agreement or 44 affirmative defenses worth is a piece of garbage, and one of the reasons why it's a piece of garbage is because of the reasons I just stated. So the tie-in is already there. If that agreement does not stand up, that constitutes a complete defense for Armstrong here and now. So it is relevant and it is not at all to be truncated on the basis that Gee, that's in Los Angeles. What's in Los Angeles is also in Marin County.
action. That was opposed and CSI prevailed in this opposition.
here ruled -- and maybe this can be clarified for me -- that the allegation of the indebtedness, the question of |
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the indebtedness is being tried in LA. And this here is a
question of fraudulent conveyance, not the question of the indebtedness or potential indebtedness; is that correct?
Answer in Los Angeles and the Answer here. I drafted them. They're the same Answers. The defense here is the defense to the contract. There is no question that the house was conveyed. The entitlement that CSI asserts to even bring the fraudulent conveyance action is predicated on having a claim. We say they don't have any claim because the instrument upon which CSI relies to assert such claim itself is void: That's what we're talking about.
discussed the very same issues about the validity of this agreement. Mr. Greene raised all 44 defenses when he appealed the injunction that we got in Los Angeles. The Court of Appeals, second district, said the agreement did not violate public policy and it upheld the injunction.
chasing a fairy tale. However, Judge Thomas said this is a fraudulent conveyance action. You yourself limited my discovery when I was asking for financial records with Mr. Armstrong to 1990. That was the cutoff date, the bright red letter line you imposed on my discovery. Now |
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he's trying to go back to 1977 to ask questions that are
about things that are in a Cross-complaint that Judge Thomas has stricken.
included and they have nothing to do with anything he alleged. What he included are the first sentence of paragraph 69 and paragraph -- first part of 73. Here's the order.
this certain thing came up with the parts of the Complaint that were stricken.
of a single declaration and discovery in this action and that's it.
been talking about, and I'll run it by you, is maybe call it a day for today, give you a chance to look at this a little bit more because whatever your decision is is a very important one.
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Looking at this Cross-complaint, which has been redacted
or crossed out, et cetera, it appears that paragraph 55 that says that Cross-defendants, who I assume are CSI, have abused the process of this court in a wrongful manner to accomplish purposes, tah-dah, tah-dah, suppression of evidence, retaliation, etc. 55 is still in, as I understand it. 56 is in?
stricken.
as well as the demurrer. Nine through 54, those are introductory allegations concerning abuse of process then go to the specifics.
is still in, 57, 58 are still in. Then we go up --
says Judge Thomas on March 25, 1994 issued an order in Armstrong Corp. Is that us?
Armstrong, that's this order here that we have?
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73 is also stricken.
is in, half is out.
24 is still in.
district court action.
what I'm relying on is not limited, again, to the Cross-complaint. It's a little diverted looking at the Cross-complaint. What I'm relying on is the Answer and the affirmative defenses as well as Judge Thomas's ruling of March 25th, '94 wherein he indicates that with respect to granting the demurrer as to the Cause of Action for declaratory relief on the Cross-complaint he says that the issues that we were seeking a declaration on would be resolved in the underlying Complaint or in Los Angeles. So he has not by any stretch of the imagination excluded from his pervue the issues which we are raising here today.
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The one I'm talking about is March 25, '94. And the one you are looking at is 6-17-94.
preliminary?
injunction.
see it?
Cross-complaint to which a demurrer was sustained which included a cause of action for declaratory relief.
Thomas on the legality of the so-called --
about?
over. We'll resume tomorrow morning at ten.
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---o0o---
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administer oaths pursuant to Section 8211 of the California Code of Civil Procedure, do hereby certify that LYNN ROBERT FARNY, the witness in the foregoing deposition, was by me duly sworn to testify the truth, the whole truth and nothing but the truth in the within-entitled cause; that said deposition was taken at the time and place herein stated, that the testimony of said witness was reported by me, a Certified Shorthand Reporter and a disinterested person, and was thereafter transcribed into computer-assisted transcription under my direction.
attorney for either or any of the parties in the foregoing depositon and caption named, nor in any way interested in the outcome of-the cause named in said caption.
this 6th day of August 1994.
I hereby certify this copy is a [signed Penny L. Gilmore]
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