Gerry Armstrong--Michael Walton's Opposition To Right to Attach Order and Claim of Exemption 06-06-1997

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MICHAEL WALTON SBN97947
700 Larkspur Landing Circle, #165
Larkspur, CA 94939
(415) 456- 7920
(415) 456-8026 Facsimile
In Propria Persona

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

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

Plaintiff,

vs.

GERALD ARMSTRONG; MICHAEL

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

Defendants.

AND RELATED CROSS-ACTIONS

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CASE NO. 157 680

DEFENDANT MICHAEL WALTON'S
OPPOSITION TO ATTACHMENT;
POINTS AND AUTHORITIES

Date: June 13, 1997
Time: 9:00 A.M.
Dept: One
Trial: No Trial Date

1.INTRODUCTION

Plaintiff is seeking a writ of attachment against alleged

insurance proceeds, in a matter where plaintiff did not present any

evidence regarding any amount of a judgement to which plaintiff

would allegedly be entitled, in a matter which is not appropriate

for attachment, and in a matter wherein plaintiff has not sought a

writ of attachment previously to protect its rights, and is now

seeking a writ not for purposes of collecting a debt but for the

purposes of harassment.

Under such circumstances, plaintiff is not entitled to a right

to attach order.

2. STATEMENT OF FACTUAL AND PROCEDURAL BACKGROUND

The instant lawsuit is based upon claims by plaintiff, Church

of Scientology International ("CSI"), that Defendant Gerald

Armstrong transferred his interest in the residence located at 707

Fawn Drive in San Anselmo to defendant Michael Walton receiving no

consideration in return. Scientology obtained a judgment against

Armstrong in a non related lawsuit regarding liquidated damages.

Armstrong filed for bankruptcy protection which was granted. In

June 1996 Scientology obtained permission to continue this action

against Walton. There is no trial date scheduled.

Although the subject matter of this action is real property

originally held in the name of defendant, and now held in the name

of Solina Walton, plaintiff has never previously sought a writ of

attachment against the real property. Plaintiff now asserts on the

basis of inadmissable evidence, to which defendant objects, that

the real property was burned in a fire, and the plaintiff wishes to

attach insurance proceeds.

Defendant does not dispute that a one-half interest in real

property was transferred to him without payment of money in August

1990. Plaintiff, however, nowhere asserts what the value of that

property was at the time of The transfer. Plaintiff also nowhere

asserts that Gerald Armstrong, at the time of the transfer, had

incurred any obligation to plaintiff.

Defendant, in fact, believes he was entitled to receive Mr.

Armstrong's one half interest, because Mr. Armstrong had decided he

no longer wished to participate in the agreement which had induced

defendant to leave his law practice and home in Southern

California, move to San Anselmo, and execute a substantial mortgage

on a home. There was no intent to defraud anyone by this

transaction. Rather, defendant avoided sustaining more damages

than he already did sustain through the actions o Mr. Armstrong.

3. ATTACHMENT IS NOT AUTHORIZED IN THIS INSTANCE

The remedy of attachment is wholly statutory, its scope and

procedure are limited by the statutes, and these statutes are

strictly construed. (Nakasone v. Randall (1982) 129 C.A.3d 757, 181

C.R. 324.) California's Attachment Law is very specific in

describing when an attachment is authorized. C.C.P. 483.010 reads

in pertinent part, "Section(a) Except as otherwise provided by

statute, an attachment may be issued only in an action on a claim

or claims for money, each of which is based upon a contract,

express or implied, where the total amount of the claim or claims

is a fixed or readily ascertainable amount not less than $500

exclusive of costs, interest, and attorney's fees ...(c) If the

action is against a defendant who is a natural person, an

attachment may be issued only on a claim which arises out of the

conduct by the defendant of a trade, business, or profession. An

attachment may not be issued on a claim against a defendant who is

a natural person if the claim is based on the sale or lease of

property, a license to use property, or the loan of money where the

property sold or leased, or licensed for use, the services

furnished, or the money loaned was used by defendant primarily for

personal, family, or household purposes."

Scientology's claims against Walton do not satisfy any

requirement of the attachment statutes. This action is not an

action on a claim for money based upon a contract where the total

amount of the claim is readily ascertainable. There is no contract

in this action. There is no readily ascertainable amount that

Scientology can claim is due from Walton. Nor is this an action

which arises out of conduct by Walton or by Armstrong or any other

named defendant in this action (or even the contract action against

Armstrong) of a trade, business or profession. Scientology argues

that Civil Code Section 3439.07(a) (2) provides that a creditor may

attach a transferred asset "in accordance with the procedures

described in the attachment statutes, Code of Civil Procedure

Sections 481.010,et.seq." These sections do not authorize attachment

in this kind action. It appears from the statute allowing attachment

that this provision is not intended to allow for a writ of

attachment in the action against the transferee, but is to allow the

creditor to attempt attachment against the property in the action

against the transferee then left to make a third party claim. See,

e.g., Whitehouse v. Six Corp. (1995) 40 Cal.App.4th 527, 533. In

this event, the burden of proof is on the creditor to show the

transfer was fraudulent. Id. At 535. The attachment remedy is

narrowly limited to liquidated, unsecured, nonfrivolous claims,

which, if against individual debtors, must relate to business

matters." Code of Civil Procedure, section 483.010.

4. SCIENTOLOGY HAS NOT SHOWN THE PROBABLE VALIDITY OF ITS

CLAIM.

A. Scientology Has Not Shown Any Evidence Regarding Any

Amount of Judgment It Could Possibly Obtain.

CCP Section 484.090 requires that to issue a right to attach

order, the court must find that plaintiff has established the

probable validity of the claim. CCP Section 481.190 provides that

probable validity means that it is more likely than not that

plaintiff will obtain judgment on the claim.

Civil Code Section 3439.08(b) and (c) provide that if a transfer

is avoidable, the creditor can recover judgment for the lesser of

the value of the asset transferred at the time of the transfer, or

the amount necessary to satisfy the claim.

Plaintiff has introduced absolutely no evidence whatsoever,

even by way of inadmissable evidence, to establish that it can

obtain a judgement in any amount under CC 3439.08 (b) and (c). All

plaintiff has done is to show that some property was transferred.

It was, in fact, a half interest in a residence. The evidence

introduced by defendant, however, shows that there was a house with

a mortgage. The evidence does not show what the equity was, if any,

in said property. Plaintiff made no attempt whatsoever to introduce

any such evidence. Under the evidence introduced by plaintiff, it

is certainly possible that the value of the property transferred was

zero, if the market value of the property at the time of the

transfer did not exceed the amount of liens against the property at

the time.

There is no evidence introduced to show that the plaintiff

could possibly be entitled to judgment under CC 3439.08 (b) and (c),

and plaintiff has not established the probable validity of the

claim.

B. There is No Showing of Actual Intent to Defraud.

Plaintiff asserts that there is a showing of actual intent to

defraud under 3439.04. The declaration of Michael Walton in

opposition to this motion shows otherwise. There was simply no

intent to defraud. Plaintiff did not even allege that any conduct

for which liability arose on the part of Mr. Armstrong occurred

prior to the transfer of the property.

Under the circumstances, even if plaintiff could allege the

value of the property at the time of transfer, plaintiff cannot be

said to have carried its burden of showing the probable validity of

the claim of an actual intent to defraud, and plaintiff is not

entitled to a judgement.

5. THE CLAIM IS NOT IN A READILY ASCERTAINABLE AMOUNT.

CCP Section 483.015 provides that the amount (a) provides that

the attachment is authorized only where the amount of the claim is

readily ascertainable.

As seen above, if there is a claim, it must be in an amount no

greater than the value of the property transferred, and there is no

evidence whatsoever of the value. Therefore, the amount of the

claim is not readily ascertainable.

Further, CC Section 3439.08(d) provides that the amount of any

judgment is to be reduced by the value given to the debtor for the

transfer. If the property transferred had any value, any judgment

would have to be reduced by the value given by defendant, especially

in not pursuing any claims against Mr. Armstrong for the damages

suffered by defendant in leaving his law practice and home and

entering into the mortgage arrangement. The amount of the claim

cannot be readily ascertainable.

6. THE ATTACHMENT IS FOR THE PURPOSE OF HARASSMENT OF

DEFENDANT, NOT FOR THE PURPOSE OF RECOVERY ON THE CLAIM; OTHERWISE

PLAINTIFF WOULD HAVE SOUGHT ATTACHMENT LONG AGO, AND NOT JUST WHEN

DEFENDANT MAY SEEK TO REBUILD A HOUSE.

CCP Section 484.090(a)(3) requires that a right to attach order

may be issued only if the court finds that the attachment is not

sought for a purpose other than the recovery on the claim on which

the attachment is based.

Plaintiff has never sought attachment in this action.

Obviously, plaintiff was always aware of the existence of the house,

as it is the subject of the action. Such real property, if there is

a right to attach, can be the subject of attachment. CCP

487.010(c)(1) .

Plaintiff now seeks attachment only because it believes that

it can, under the circumstances harass defendant through that

remedy. If plaintiff obtained an attachment against real property,

it would only provide security for the judgement, and not provide

substantial harassment of the defendant, since it would only act as

a lien until the time of judgment, and then be eliminated once

defendant prevails.

Now, however, plaintiff believes that there may be insurance

proceeds (depending on the liens of mortgage holders). If plaintiff

could attach such proceeds, plaintiff could prevent defendant form

being able to rebuild his family's home. For years, the property

has been free of a lien of plaintiff, and plaintiff sought no lien.

Defendant could have sold the property at any time and taken the

equity, if any, out of the house.

Only now, when defendant would obviously need insurance

proceeds to rebuild a house and rebuild a life does plaintiff choose

to seek the remedy of attachment. This makes sense only if the

purpose of the attachment is not recovery on the claim, but

harassment of defendant. Scientology has been free to prosecute its

claim against defendant since June 1996 and has not done so.

Scientology has given no notice to defendant or this court that the

bancruptcy court had lifted the automatic stay. There is still no

trial date. Scientology is not entitled to attachment by virtue of

CCP 484.090(a)(3).

7. EQUITABLE LIEN NOT SUBJECT TO ATTACHMENT

Scientology has filed this action claiming an equitable lien

on Walton's property as a result of an alleged fraudulent transfer.

Attachment is not allowed on a claim secured by "any interest in

real property arising from agreement, statute, or other rule of

law, including a mortgage or deed of trust of realty, and a

statutory, common law, or equitable lien."(C.C.P. 483.010(b)).

Therefore, Scientolgy is not entitled to an attachment.

CONCLUSION

For all the reasons stated above, defendant Michael Walton

respectfully requests that the court deny plaintiff's application

for a right to attach order and writ of attachment.

[signed Michael Walton]

Michael Walton

PROOF OF SERVICE BY MAIL
STATE OF CALIFORNIA, COUNTY OF MARIN

I am a resident of the county aforesaid; I am over the

age of eighteen years and not a party to the within entitled

action; my business address is 700 Larkspur Landing Circle, Suite

120, Larkspur CA 94939.

On March 6, 1997, I served the within NOTICE OF

OPPOSITION TO RIGHT TO ATTACH ORDER, DEFENDANT MICHAEL WALTON'S

OBJECTION TO ATTACMENT; POINTS AND AUTHORITIES; and MICHAEL

WALTON'S DECLARATION IN SUPPORT OF OPPOSITION TO SCIENTOLOGY'S

REQUEST FOR ATTACHMENT on the interested parties by placing true

copies thereof enclosed in sealed envelopes with postage thereon

fully prepaid, in the United States mail at San Anselmo, California

addressed as follows:

Andrew Wilson
Wilson Campilongo LLP
115 Sansome, Suite 400
San Francisco, CA 94104

Gerald Armstrong
715 Sir Francis Drake
San Anselmo, CA 94960

Executed on June 6, 1997 at Larkspur, California.

I declare under penalty of perjury that the foregoing is

true and correct.

_________________________

See also Walton Declaration 06-04-1997
Notice of Opposition [ .pdf ]

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