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Case No. A107100

COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT, DIVISION FOUR

CHURCH OF SCIENTOLOGY
INTERNATIONAL, A California
nonprofit religious corporation

Plaintiff and Appellant,

vs.

GERALD ARMSTRONG,an Individual,

Defendant and Respondent.


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Appeal Case No. A107100

[Consolidated with Case No.
A107095]

On Appeal from the Superior Court of the State of California
County of Marin
Honorable Lynn Duryee


RESPONDENT’S BRIEF


 

 

Gerry Armstrong
#1-45950 Alexander Avenue
Chilliwack, B.C. V2P 1L5
Canada
(604) 703-1373
gerry@gerryarmstrong.org

 

TABLE OF CONTENTS

TABLE OF AUTHORITIES

 

ii

INTRODUCTION

 

1

STATEMENT OF THE CASE

 

8

ARGUMENT

I. Law compels a trial

II. The Marin Court’s Judgment of
Unconscionability is Reasoned and Sound

III. The Liquidated Damages Are, But May Not
Lawfully Be, Punishment

 

31

31


35


46

CONCLUSION

 

49

i

TABLE OF AUTHORITIES

Cases

Hong v. Somerset, 161 Cal. App.3d 111 (1984)

 

33, 34

Kinney v. United HealthCare Services, Inc. (App. 4 Dist.
1999) 83 Cal.Rptr.2d 348, 70 Cal.App.4th 1322

 


43

 

Scientology v. Armstrong (1991) 232 Cal.App.3d 1060,
283 Cal.Rptr. 917

 


10, 11

 

Ting v. AT & T, N.D.Cal.2002,182 F.Supp.2d 902,
affirmed in part, reversed in part 319 F.3d 1126, certiorari
denied 124 S.Ct. 53, 157L.Ed.2d 24, 2003

 



43
 

Statutes

CCC §1670.5

 

31, 32, 33,
34, 35, 49

CCC §3359

 

46

18 USC §241

 

3

18 USC §242

 

3
 

Other Authorities

International Religious Freedom Act of 1998
7

ii

 

[See also: Table of Contents for Exhibits]

 

 

INTRODUCTION

Plaintiff and appellant Scientology organization (“Scientology”)

appeals from a judgment of the Marin County Superior Court that

Scientology states “immunize[s] the defendant [and respondent Gerry

Armstrong (“Armstrong”)] from any future liability for breaching a contract

he admits having breached well over 200 times, has been adjudicated to

have breached 137 times, and which he vows to continue to breach

indefinitely in the future.” Appellant’s Open Brief (“AOB”), pg. 1.

Armstrong agrees with Scientology’s interpretation of the meaning

and effect of the Marin Court’s judgment. Armstrong has “breached”

Scientology’s “contract” tens or hundreds of thousands of times, or more,

and he will continue to breach said contract, because it is impossible, and in

fact unlawful, for Armstrong to not do so. It is therefore eminently just that

the Court acted to immunize Armstrong from liability for the future

“breaches” of Scientology’s “contract” that he must commit.

The Marin Court stated in its judgment from which Scientology here

appeals: “It would be unconscionable to punish [Armstrong] beyond what

the benefit was that was conferred to him.” Scientology’s Exhibits in

Support of Petition for A Writ of Certiorari, (“Exs., ___: (Bates stamp

page nos.) ___ ”), Judgment, 18:361. What Scientology is attempting to do here,

seeking millions of dollars in “liquidated damages,” and potentially seeking

trillions or quadrillions of dollars or more, as will become obvious if this

case is ever permitted to be understood, is indeed unconscionable.

What Scientology also seeks, which this Court should not allow, are

all the advantages, threat and black propaganda1 opportunities that such


1Black Propaganda, [or] “black PR,”is the term Scientology founder L.
Ron Hubbard directed be used and Scientology uses for its policy and
practice of destroying a fair game target’s reputation, credibility and life

1

 

perpetual “indebtedness” would confer to this organization as a “judgment

creditor.” If such astronomical debt and the attendant lifetime of fair

game2 were not enough punishment, Scientology also seeks in this Court by

writ petition, Case No. A107095, consolidated herewith, (“Petition”) to

have Armstrong further punished by jailing and fining him for 145 or so


with covert and overt, relentless and pervasive libel and slander. Answer of
Gerry Armstrong, Exs.15: 214.

2Scientology founder L. Ron Hubbard ordered, and Scientologists accept
as true, that there is a class of citizens called “Suppressive Persons or
“SPs,”who are the most evil people in the world, destructive, criminal, and
deserving no mercy or rights. Hubbard called Scientology’s policy for
treatment of SPs “Fair Game,”and provided examples and types of Fair
Game to be applied to SPs in various policy letters or directives. E.g. in his
policy letter “ Penalties for Lower Conditions, Hubbard wrote:

ENEMY — SP Order. Fair game. May be deprived of
property or injured by any means by any Scientologist
without any discipline of the Scientologist.
May be tricked, sued or lied to or destroyed.

Scientology declared Armstrong to be a “ Suppressive Person” right after he
left the organization in December 1981 and has considered him an SP and
Fair Gamed him ever since. Armstrong’s Respondent’s Appendix
(“RApp.___ ”) Declaration of Gerry Armstrong in Support of Opposition to
Motion for Summary Judgment, filed March 9, 2004. RApp.258.

The California Court of Appeal, Second District wrote about Scientology’s
Fair Gaming of Armstrong:

Commencing in February 1982, the international Church of
Scientology issued a series of “suppressive person declares”
in effect labelling Armstrong an enemy of the Church and
charging that he had taken an unauthorized leave, was
spreading destructive rumors about senior Church officials,
and secretly planned to leave the Church. These “declares”
subjected Armstrong to the “Fair Game Doctrine” of the
Church, which permits a suppressive person to be “tricked,
sued or lied to or destroyed ... [or] deprived of property or
injured by any means by any Scientologist. ...”

Scientology v. Armstrong (1991) 232 Cal.App.3d 1060, 1067, 283
Cal.Rptr. 917
.

2

 

“breaches.” This punishment Scientology seeks is especially cruel and

repugnant because at trial the Marin Court had vacated these ludicrous jail

sentences and fines, finding that Armstrong had already been punished

enough.

Granting Scientology the punishment it seeks to subject Armstrong

to by this appeal and by writ petition would naturally also set in place the

judicial machinery for thousands more jail sentences and fines for

thousands more breaches. If Scientology’s seeking to have Armstrong

punished beyond what the benefit was that was conferred to him is

unconscionable, which it cannot but be, Scientology’s petition and this

appeal, seeking exactly such punishment, in spades, are also

unconscionable, which indeed they are. Obviously unconscionability is

what was envisioned when exceptions were created to the principles of res

judicata and collateral estoppel, upon which Scientology bases its efforts to

do, and have this Court do, more of the unconscionable. Scientology’s

continuing to seek judicial enforcement of what has already been adjudged

unconscionable must be unconscionably unconscionable. Scientology’s

remedy by law is not to get this Court to impose the punishment

Scientology seeks pursuant to its “contract’s” unconscionable clauses, but

to submit to a hearing or trial on the circumstances at the time the

“contract” was made, its setting, purpose and effect.

Scientology’s actions to deprive Armstrong of his civil rights, by

threat, fraud, “contract” and abuse of the Justice System, in which abuse

Scientology’s appeal and petition in this Court are now a part, are unlawful,

being in violation of U.S. Federal Criminal Civil Rights statutes,

specifically 18 USC §§ 241, 242 . This Court has the authority and

opportunity to now put an end to Scientology’s use of the California Court

System to destroy Armstrong’s rights and privileges secured to him by the

Constitution and laws of the United States.

3

 

Armstrong is not attempting to deprive anyone or any organization

of their lawful rights of any kind. Scientology’s “contract” is

unconscionably one-sided. What Scientology is attempting to do to

Armstrong is the product of a criminal conspiracy, in which by “contract”

every Scientology or Scientology-related organization, corporation, or

entity and all of their directors, officers, employees, volunteers, agents,

assigns, and lawyers are “beneficiaries.” Mutual Release and Settlement

Agreement, Exs., 1:1,2. It would be unconscionable, in fact unlawful, for

this Court to negate the immunization from future liability that the Marin

Court gave Armstrong, and punish him for his discussion of any criminal

conspiracy. Armstrong is discussing the criminal conspiracy that has for

twenty-three years actively and continuously targeted and victimized him

and sought to deprive him of his lawful rights and privileges. Res judicata

and collateral estoppel cannot be used to prohibit and punish the discussion

of a criminal conspiracy, which prohibition and punishment result in the

unlawful protection, survival and even reward of the conspiracy.

Scientology insists that it is a “church” and a “religion,” organized

for religious purposes. Armstrong is a religious person, and the “breaches”

of Scientology’s “contract” for which Scientology wants him punished at

the rate of $50,000 per utterance, plus punish him with jail sentences and

fines, are his free exercise of his religious rights guaranteed by the First

Amendment to the U.S. Constitution. These communications are

inarguably Armstrong’s religious expression of his religious beliefs about a

religion.

Because for freedom of religion to exist a person must be free to

change his mind and his beliefs about a religion, and necessarily therefore

change his religious expressions in exercise of his religion and religious

beliefs, he cannot lawfully be bound by contract enforced by secular courts

to one form of religious expression. Logically, res judicata and collateral

4

 

estoppel also cannot be used to bind a person to a particular, judicially

ordered, prohibition of his religious expression, for the simple reason that

changing his religion and his religious beliefs cannot be lawfully judicially

prohibited. To do so is simple religious persecution. The present issue is

not identical to whatever was litigated in any prior proceeding for the

simple reason that, as Armstrong’s history and communications manifestly

show, he has, since any such proceedings, changed his religion, his

religious beliefs and his expressions of those religious beliefs.

Armstrong as an individual has the same guaranteed right of

religious free exercise granted by law to the Scientology enterprise. But

Armstrong is also the founder and director of his own church and religion,

the Church of Wogs (“CoW”), which has a publicly stated religious

purpose of opposing those who persecute wogs. “Wogs” is Scientology’s

and Scientologists’ “theological” term for non-Scientologists, a disparaging

word, parallel to “infidels” in Christian scripture. If the Christians

persecuted infidels, it is altogether possible that a Church of Infidels would

arise, as CoW has arisen as a divine and reasonable response to the

persecution of wogs by the Scientologists. CoW is utterly universalist,

being akin to the brotherhood of man. It is only Scientology and

Scientologists who persecute wogs as wogs, and Armstrong’s

communications about and in opposition to Scientology and Scientologists

are his expressions and free exercise of his wog religion and his wog

religious beliefs, and comprise CoW’s Scriptures. All of the hundreds,or

hundreds of thousands, of “breaches” for which Scientology wants this

Court to direct the Marin Court to assess Armstrong $50,000 each in

“liquidated damages,” and to jail and fine him, are his religious expressions

of his religious beliefs about a religion, and are moreover religious

scripture, and completely protected by the First Amendment.

5

 

It is inconceivable that this Court would ever consider enforcing

some Christian “church’s” “contract” that prevented a person, on penalty of

$50,000 per utterance, plus jailing and fines, from expressing his religious

beliefs about his religious experiences in the Christian religion. Armstrong

does not believe this Court would consider enforcing such a “contract,” and

he has found no instance where such a “contract” prohibiting anyone from

expressing his beliefs about Christianity, or even practicing Christianity,

was ever concocted, much less judicially enforced, in America.

If this Court would not enforce a “contract” that prevented a person

from expressing his religious beliefs about his religious experiences with

the Christian religion, and from communicating Christian scripture, but

would enforce a “contract” that prevented a person from expressing his

religious beliefs about his religious experiences with the Scientology

“religion,” and from communicating his own Church’s Scripture, then this

Court assists in the establishment of Scientology as a favored State

Religion, which establishment is forbidden by the First Amendment. If this

Court would enforce “contracts” that prevent people from expressing their

religious beliefs about their religious experiences with any or all religions,

or prevent people from changing religions, their religious beliefs or their

religious expressions about religions, and if such enforcement is in

accordance with some law, then that law must have been made in violation

of the First Amendment, which specifically prohibits such a law from being

made.

All of Armstrong’s religious expressions in free exercise of his

religion for which Scientology seeks $50,000 per utterance, and to further

punish him with jailing and fines, and seeks this Court’s imprimatur on

such punishment, occurred outside California and outside the U.S.

Armstrong is a Canadian citizen living in Canada. A number of his

expressions of his religious beliefs for which Scientology seeks to have him

6

 

jailed and fined also occurred in Europe. Even if this Court conceivably

has some lawful authority to prohibit, limit or punish someone’s free

exercise of religion in California, this Court has no such authority to

prohibit, limit or punish anyone’s religious free exercise in Canada or

Europe, or anywhere beyond California. Pursuant to the U.S.’s

International Religious Freedom Act of 1998 (“IRFA”), the U.S. President,

Congress, Department of State, and U.S. missions around the world are

required by law to defend and assist Armstrong’s free exercise of religion

outside the U.S. and to condemn the actions Scientology is taking, and now

asks this Court to abet, to suppress his free exercise of religion outside the

U.S. All of Armstrong’s utterances constituting his free exercise of his

religion, for which Scientology seeks to punish him with the onerous

financial penalty of $50,000 per utterance, and jailing and fines, were made

after the date of the U.S.’s enactment of the IRFA, which was January 27,

1998.

Ford Greene, Armstrong’s lawyer at the April 9, 2004 trial, accepted

his representation only the day before trial, did not have time to study the

case and the facts and issues therein, and consequently at trial did not

present the vital facts that Armstrong’s utterances for which Scientology

sought to punish him occurred outside the U.S.; that these utterances are

Armstrong’s expression of his religious beliefs protected by the religious

exercise clause of the First Amendment; that what Scientology was doing

to Armstrong was a gross violation of U.S. civil rights criminal statutes;

that the IRFA applied to all Armstrong expressions for which Scientology

sought to punish him; and that by the IRFA the U.S. was required to

promote and protect such religious expressions. Until 1995, Greene had

represented Armstrong in the earlier Marin Scientology v. Armstrong cases,

nos. 152229 and 157680, which are now consolidated with the case, no. C

7

 

021632, from which this appeal arises, but Greene had not been involved

with these cases since 1995.

Scientology has unclean hands in this matter, significantly in its use

of its first wrongly obtained contempt order to wrongly achieve the

dismissal of Armstrong’s appeal in this Court from the summary judgment

that Scientology should never have obtained in the first place. Scientology

should be denied the use of this Court to pursue the instant appeal and to

obtain the writ it also seeks.

To rule in Armstrong’s favor in this appeal, involving gargantuan

but explicit numbers and sums of money, it is only necessary to do the

math.

STATEMENT OF THE CASE

Scientology says that the essential facts in this case are not, and

never were in dispute. AOB, 1. This is simply untrue. The essential facts

in this case, up to the judgment of Marin Court Judge Gary W. Thomas

filed May 2, 1996 (Exs.,7) are provided in the section “Armstrong’s History

with Scientology,” pp. 3-29 in his appellant’s opening brief in the appeal

Armstrong filed from Judge Thomas’ injunction and judgment, Scientology

v. Armstrong, Case No. A075027, in this Court. That is a prior appeal in

the same case, and Armstrong incorporates herein by reference thereto said

opening brief (“AOB-A075027”) the clerk’s transcript on appeal (“CT-

A075027”), and all other documents comprising the record in that appeal.

Scientology falsely states, and has been falsely stating for years, that

Armstrong fled to Canada after being convicted of contempt by Judge

Thomas to avoid jail sentences, e.g.:

To avoid the jail sentences imposed for his contempt
convictions, Armstrong fled to Canada, from where he
committed the breaches that spawned the instant action.

AOB, 5, and

8

 

On June 5, 1997, Judge Thomas issued an order of contempt,
finding that Armstrong “willfully disobeyed the Order.” [ ]
Judge Thomas ordered that Armstrong pay a fine of $1,000
and be confined in the County Jail for two days.[ ] Armstrong
fled the jurisdiction, and on August 6, 1997, Judge Thomas
issued a bench warrant for his arrest.

Petition, 6,7.

Armstrong left California and traveled to Canada in January 1997.

Without notice to Armstrong of any contempt hearing, Scientology

obtained its first contempt order against him, as Scientology here states, on

June 5, 1997. Armstrong has stated when and why he left California in

many public and sworn statements, e.g.:

I obtained my first internet connection in early January, 1997,
while living in San Anselmo, and within a few days
discovered that someone had put on their internet web site the
submission Scientology had made to the IRS in response to
the IRS’s Form 1023 request. The organization, up until that
time, had lost all significant legal cases with the IRS, was
held to be non-tax exempt, and was facing a huge tax liability.
Scientology’s 1023 submission contained sections of black
PR on me, a true and correct copy of which, downloaded
from the internet, is appended hereto as Exhibit [F]. This
1023 response was the basis of the organization’s obtaining
tax exemption for all its associated corporate entities in 1993.
I believe that Scientology’s 1023 response was submitted to
the IRS in 1991 or 1992. On information and belief,
Scientology supreme dictator, or leader, David Miscavige
announced in 1993 that when Scientology triumphed in its
war on the IRS the organization was facing a billion dollar tax
liability. The importance of my earlier litigation and
testimony to the IRS in its denial of Scientology’s tax
exemption is shown by Scientology’s own statements in the
1023 response:

“the Service has continuously thrust the
Armstrong case at us, demanding an
explanation.” (Ex.F, 1)

9

 

“The IRS CID, however, absorbed
Breckenridge’s3 findings as the definitive
statement of what Scientology is, and used this
decision and the Flynn witnesses who testified
at the trial as the nucleus of their investigation.”
(Ex. F, 4)

Scientology’s statements about me and my earlier litigation,
Scientology v. Armstrong, Los Angeles Superior Court Case
No. C 420153, are in fact and conclusion false. The depth of
Scientology’s black PRing of me in its submission to the IRS
is shown by its statement:

“As we shall demonstrate below, all this
decision ever involved was Armstrong’s state of
mind, which subsequently obtained evidence
proved conclusively to be one sordid, sado-
masochistic nightmare. Furthermore,
Armstrong’s state of mind horror stories have
fallen on deaf ears in recent litigation. Relying
on Armstrong or the Armstrong decision is
wholly unjustified.” (Ex.F, 1)


3 Los Angeles Superior Court Judge Paul G. Breckenridge, Jr. (retired)
presided at the 1984 court trial of Scientology v. Armstrong, Case No. C
420153. Judge Breckenridge issued a lengthy decision after a lengthy trial,
which became the judgment in the case. CT-A075027, 5948-5974. The
judgment was affirmed on appeal, Scientology v. Armstrong (1991) 232
Cal.App.3d 1060, 283 Cal.Rptr. 917.

Judge Breckenridge stated in his decision:

In addition to violating and abusing its own members civil
rights, the organization over the years with its “Fair Game”
doctrine has harassed and abused those persons not in the
Church whom it perceives as enemies. The organization
clearly is schizophrenic and paranoid, and this bizarre
combination seems to be a reflection of its founder LRH. The
evidence portrays a man who has been virtually a
pathological liar when it comes to his history, background,
and achievements. The writings and documents in evidence
additionally reflect his egoism, greed, avarice, lust for power,
and vindictiveness and aggressiveness against persons
perceived by him to be disloyal or hostile.

CT-A075027, 5955,5966.

10

 

The decision rendered by Judge Breckenridge in that case,
along with the California Court of Appeal opinion affirming
that decision (Scientology v. Armstrong, (1991), 232
Cal.App.3rd 1060, 283 Cal.Rptr. 917) are appended hereto as
Exhibit [G]. I believe that to counter the IRS’s use of the
decision, Scientology concocted this scheme to black PR me
to the IRS, and anyone else the organization could get to
listen. Scientology submitted these false statements to the IRS
during a time the organization was attempting to judicially
silence me with its “settlement agreement,” and thus prevent
me from responding to its falsehoods. It was also significant
to me when I discovered this black PR that Scientology had
not produced these statements about me in discovery in this
case (Marin SC 152229/157680) when it was before Judge
Thomas, even though the IRS 1023 document was relevant
and of a type and nature of documents which were ordered
produced to me. When I read this black PR in Scientology’s
statement to the IRS on which its tax exemption is based, and
having experienced Scientology’s years of fair game, and
indeed feeling like I was being fair gamed by Judge Thomas
and could never get a fair hearing before him, I immediately
decided to escape. I believe that Scientology will do anything
to silence me completely and forever. I also believe that
Scientology’s false submission to the IRS and its obtaining of
its tax exemption based thereon constitutes a massive fraud
upon the people of not only the US but the world. I therefore
had to leave the US, where Scientology could prevent me
from correcting this fraud, and have me harmed in many ways
to so prevent me, to be in a country where I have legal
protection from Scientology’s abuse of the justice system and
where I could work to correct its fraud.

Declaration of Gerald Armstrong in Support of Opposition to Scientology’s

application for OSC re contempt, dated January 9, 2001, Exs., 12:123-4.

Section of Scientology’s 1992 IRS Form 1023 responses, Ex. F to

Armstrong’s January 9 declaration. RApp.4-7.

On January 23, 1997, after deciding to leave California, as described

above, Armstrong was served with a subpoena for production of documents

by defendant Grady Ward in the case of Religious Technology Center v.

11

 

Ward, U.S. District Court for the Northern District of California, Case No.

C-96-20207 RMW. RApp.10. The following day, Armstrong received a

letter from attorney Andrew H. Wilson, attorney for Scientology herein, in

which Wilson insisted Armstrong not produce the documents Ward had

subpoenaed, and threatened Armstrong with prosecution based on Judge

Thomas’ injunction. RApp.12. Armstrong wrote a declaration dated

January 26, 1997 identifying himself and describing his relevant testimony

as a subpoenaed witness, his Scientology-related expertise, his own

complex legal circumstances, and the Wilson threat that caused Armstrong

to write the declaration, and mailed the declaration to the District Court

Judge presiding in the Ward case, the Honorable Ronald M. Whyte.

Armstrong also mailed a copy of the declaration to the attorney of record

for the Scientology plaintiff in that case. RApp.13-57. Armstrong has

described these events in several declarations in a number of legal

proceedings; e.g.:

On January 23, 1997 I received a subpoena for production of
documents, a true and correct copy of which is appended
hereto as Exhibit [I], from defendant Grady Ward in the case
of RTC v. Ward, US District Court for the Northern District
of California, case no. C-96-20207 RMW. Mr. Ward’s
subpoena states:

“You are commanded to produce and permit
inspection and copying of the following
documents or objects [ ]:
All documents and declarations authored by
yourself documenting abuse, fraud, and
unlawful acts by the Church of Scientology
Enterprise or any of its investigators, such as
Eugene Martin Ingram.” (Ex. I)

On January 24, 1997 I received by fax a letter, a true and
correct copy of which is appended hereto as Exhibit [J], from
Scientology attorney Andrew H. Wilson, threatening
prosecution in the Superior Court if I provide the documents
to Mr. Ward as subpoenaed. Mr. Wilson’s statement in the
second paragraph that my “obligation to produce documents

12

 

in response to lawfully issued and served subpoena is
unquestioned” I took to be an effort to give plausible
deniability to the threat and the clear obstruction of justice
contained in the rest of the letter. I understood Mr. Wilson to
be saying for Scientology, “We know you have a legal right
to produce the subpoenaed documents, but we’re going to
prosecute you anyway.” His threat of “further conflict and
annoyance” from Scientology unless, as he insisted, I
withheld the subpoenaed documents from Mr. Ward is very
clear. In response to Mr. Wilson’s threat, I sent the
declaration to Judge Whyte, who, I believed, and still believe,
was the proper person to be advised of and curtail
Scientology’s interference with a witness in the cases before
him.
          [ ] Mr. Wilson’s threat that I would be prosecuted for
producing documents to Mr. Ward, even though I had been
subpoenaed was not the first time Scientology lawyers had
made such a threat. When I was served with a deposition
subpoena in the Corydon v. Scientology case in the fall of
1989, Scientology attorney Heller threatened me multiple
times with being sued if I testified, even though he
acknowledged I had been served. Mr. Heller’s threats are
detailed in my appellant’s opening brief. (Ex. A, 11-13) In my
opinion, Scientology’s and its lawyers’ misuse of the
settlement agreement” and the Injunction in order to obstruct
justice, even beyond how these documents on their face
obstruct justice, demonstrates that the intent of the documents
and their creators is unlawful.

Exs.12:126-127.

In his declaration of January 26, 1997, Armstrong stated why he was

sending it to Judge Whyte:

On January 23, 1997 I received in the mail from Grady Ward
a subpoena, a true and correct copy of which is attached
hereto as Exhibit [T], for production of documents in his case.
           [ ] On January 24 I received from attorney Andrew H.
Wilson a fax letter, a true and correct copy of which is
attached hereto as Exhibit [U], threatening prosecution in
Armstrong IV if I provide documents to Mr. Ward pursuant to
his subpoena. This letter is frightening to me, and supports
why I am sending this declaration directly to the Court, and
why the “settlement agreement” and the Thomas order are

13

 

illegal. Mr. Ward does not have the time to wait for my
testimony until Scientology’s motion for protective order is
heard before he must file this testimony. In my opinion, that
is precisely why Mr. Wilson has sent his threat letter.

RApp.55; and Declaration of Gerald Armstrong in Support of Opposition to

Motion for Summary Judgment, dated March 2, 2004, RApp.267,268.

On February 19, 1997, following Armstrong’s moving to Canada,

Scientology filed an application for an OSC re contempt in Marin Superior

Court seeking to have Armstrong punished for sending Judge Whyte his

declaration concerning attorney Wilson’s January 24, 1997 threat.

RApp.13-57. Armstrong was never served with Scientology’s application.

He recently obtained from the Office of the Clerk of the Marin County

Court a copy of the Declaration of Andrew H. Wilson in Support of Ex

Parte Application for Order to Show Cause Re Contempt, dated February

14, 1997, and filed February 19, 1997. RApp.58-62

Nowhere in his February 14 declaration does Wilson mention

Armstrong’s having been subpoenaed, or Wilson’s threatening letter of

January 24 to Armstrong, or the reason Armstrong stated in his January 26

declaration to Judge Whyte for sending his declaration: Wilson’s clear and

unlawful threat to Armstrong, a subpoenaed witness in the Ward case.

Wilson states in his February 14 declaration:

          14. Armstrong’s Declaration consists of a verbose
regurgitation of every imagined wrong done to Armstrong,
and a host of other “victims,” by CSI and its affiliates since
the late 1970s. In it, Armstrong states that he is sending the
Declaration to Judge Whyte directly so as not to violate the
Injunction. Declaration at ¶10. Armstrong has concluded that
he can properly send the Declaration to Judge Whyte because
he is only prohibited from assisting persons litigating against
CSI and affiliates, and that the Declaration is provided to
assist Judge Whyte to assist him in “judging litigations
involving the orders ‘beneficiaries’.” RApp.61.

14

 

This mischaracterizes what Armstrong actually stated in para.10 of

his January 26 declaration:

10. This order does not, however, prohibit me from
voluntarily assisting a person judging litigations involving the
order’s “beneficiaries.” I believe that the United States
District Court is a “governmental organ or entity” excluded
from the prohibitions of the order. (See, Ex. A, 8:1,2; 6,7) I
am therefor providing the original of this declaration to the
Court. I also believe that it would be improper to send this
declaration to the Court in secret, thus I am sending copies to
the parties or their counsel.

RApp.17. As Armstrong stated in his January 26 declaration, the injunction

specifically excluded governmental organs or entities from the class of

persons which the injunction prohibited him from voluntarily assisting.

Exs., 5:91,92, paras. nos. 1,2,3.

Wilson states in his February 14, 1997 declaration:

5. The Honorable Ronald Sohigian entered the Preliminary
injunction in late May, 1992. Less than a month later, I was
questioning Mr. Armstrong at a deposition when he testified
on his intention to ignore the settlement agreement and Judge
Sohigian's Order:

A. When, I mean, I have, I have absolutely no
intention of honoring that settlement agreement.
I cannot. I cannot logically. I cannot ethically. I
cannot morally. I cannot psychically. I cannot
philosophically. I cannot spiritually. I cannot in
any way. And it is firmly my intention to not
honor it.

RApp.59. Armstrong’s deposition testimony is very clear that he is

testifying about Scientology’s “contract” and not about the preliminary

injunction entered by Los Angeles Superior Court Judge Ronald Sohigian.

Wilson is fibbing. RApp.9

Wilson states in his February 14, 1997 declaration:

16. While the preliminary injunction which preceded the
Order was in effect, Armstrong willfully disobeyed it on

15

 

numerous occasions. This gave rise to an earlier Order To
Show Cause Re Contempt, which was heard in December
1994 by the Honorable Diane Wayne. I represented CSI at
that hearing. Armstrong admitted the violations and pled for
mercy from the court. Judge Wayne discharged the contempt
but admonished Armstrong to conduct himself appropriately
in the future.

RApp.61. This is false. The May 28, 1992 “preliminary injunction” was

much narrower than Judge Thomas’ “permanent injunction” and Armstrong

willfully violated it on no occasion. Order, CT-A075027, 91-94. Los

Angeles Superior Court Judge Diane conducted a hearing on Scientology’s

OSC re contempt against Armstrong on July 28, 1994, and issued her order

denying the OSC the next day. Armstrong at no time violated the

preliminary injunction, and at no time “admitted the violations” as he had

committed none. In her order, Judge Wayne discharged the OSC and

Armstrong, and said not one word admonishing Armstrong for anything.

CT-A075027, 7499-501. There was no later hearing conducted by Judge

Wayne in December 1994.

On February 18, 1997 Judge Thomas issued an OSC re contempt,

which was never served on Armstrong. Judge Thomas signed an order of

contempt, filed June 5, 1997, finding Armstrong in contempt of court for

sending his January 26, 1997 declaration to Judge Whyte, and punishing

Armstrong with a fine of $1,000.00 and 48 hours in jail. Exs.8:100. There

is no mention in the order of Ward’s subpoena to Armstrong, Wilson’s

letter of January 24 to Armstrong, or the actual reason Armstrong stated in

his January 26 declaration for sending his declaration to Judge Whyte:

Wilson threatening Armstrong after he was served with a subpoena in the

Ward case.

The June 5, 1997 order states:

5. ARMSTRONG willfully disobeyed the order. On or about
January 26, 1997, ARMSTRONG sent a document entitled

16

 

DECLARATION OF GERALD ARMSTRONG to United
States District Judge Ronald M. Whyte. Judge Whyte was at
the tine presiding over three cases in which the plaintiff is
RTC. In the Declaration, ARMSTRONG recites his
understanding that he was prohibited from sending such a
Declaration directly to litigants end states that he is instead
sending it directly to Judge Whyte in the hopes of influencing
his decision on a pending matter. This evidences
ARMSTRONG’s willful disobedience of the Order and
Judgment.

Exs. 8:100.

Nowhere in his January 26, 1997 declaration does Armstrong state

that he sent it directly to Judge Whyte in the hopes of influencing his

decision. The only reason why Armstrong wrote his declaration and sent it

to Judge Whyte was to report Wilson’s threat to Armstrong, a subpoenaed,

knowledgeable witness in the Ward case, over which Judge Whyte

presided. Armstrong did request Judge Whyte to prohibit Scientology from

interfering with him as a witness, but that request too was made only

because of Wilson’s threat. RApp.57

On or about August 25, 1997, while living in Canada, Armstrong

timely filed his opening brief in the appeal he had taken from the Marin

Court injunction. AOB-A075027.

About November 18, 1997 Scientology filed a motion to dismiss

Armstrong’s appeal, claiming that, by Judge Thomas’ June 5, 1997

contempt order punishing Armstrong for reporting the Wilson threat by

declaration to Judge Whyte, Armstrong was a fugitive from justice and

therefore should be denied any aid from the Court. Motion-A075027.

Scientology’s motion to dismiss Armstrong’s appeal was signed by

attorney Wilson and supported by a declaration of Wilson dated November

18, 1997. Wilson Declaration-A075027.

Nowhere in the motion, memorandum of points and authorities

(“Memo”) or his declaration does Wilson mention Ward’s subpoenaing

17

 

Armstrong, Wilson’s letter of January 24, 1997, or the reason Armstrong

stated in his January 26 declaration to Judge Whyte for sending the

declaration: Wilson’s threatening of Armstrong, a subpoenaed witness in

the Ward case.

Scientology states in its motion to dismiss:

The court below held appellant Gerald Armstrong in
contempt of court for willful violation of the permanent
injunction which is the subject of this appeal and punished
Armstrong by imposing a fine of $1,000.00 and a term of
confinement in the County Jail for a period not to exceed 48
hours. Rather than discharging the contempt order of the
Superior Court, or properly noticing a timely appeal from it,
Armstrong fled the United States and is prosecuting this
appeal from Canada. The appeal should therefore be
dismissed.

Motion-A075027, Memo, 1. As shown, Scientology obtained its order of

contempt June 5, 1997. Armstrong had left California in January.

Scientology repeats the same falsehood later in its motion to dismiss

Armstrong’s appeal:

Armstrong did not appeal the Order of Contempt and the time
for filing a notice of appeal of that Order has passed.¶
Rather, in the face of the Order of Contempt, Armstrong fled
the United States. He has not paid the $1,000 fine and he has
not submitted to confinement in the county jail.

Motion-A075027, Memo.5. Armstrong could not have appealed because

he was not served with the contempt order. He left the US months before

Scientology obtained the contempt order, not in the face of it.

Wilson states in his November 18, 1997 declaration:

[O]n January 26, 1994, Armstrong submitted a 45 page
declaration against the Religious Technology Center
("RTC"), one of the named beneficiaries of the 1986
Settlement Agreement. He sent this declaration, containing
material directly violating the agreement and Order, to the
Hon. Ronald M. Whyte [ ] Accordingly, CSI moved for an

18

 

Order to Show Cause why Armstrong should not be held in
contempt of court for his actions. Rather than responding to
the OSC Armstrong fled the country, moving to Canada
where, to the best of my knowledge, he currently resides.
Armstrong's flight required that we serve the Order to Show
Cause by publication.

Wilson Declaration-A075027, p. 6. Again this is false. Armstrong did not

know of the OSC until Scientology filed its motion to dismiss his appeal in

this Court. Armstrong was in Canada before Scientology applied for its

OSC so he could not have fled “rather than responding.”

Wilson states in his November 18, 1997 declaration:

In settling this litigation, it was the Church's desire to end its
relationship with Armstrong once and for all. In order to
accomplish this, the Church insisted [that Armstrong end his]
voluntary support to anti-Scientology litigants [,] return to the
Church documents which he had stolen and [ ] refrain from
discussing with third parties his experiences with the
Scientology religion and to keep confidential all terms of the
settlement itself. [ ] In May, 1992, [ ] the Hon. Ronald
Sohigian entered a preliminary injunction which prohibited
Armstrong from further violations of the key provisions of the
settlement agreement.
[ ] In June, 1992 I took Armstrong's deposition in this case.
During the deposition, in the face of Armstrong's assertions
that he did not consider himself restrained in any way by the
contract which he had entered with CSI in 1986, I questioned
him as to whether he intended to obey the order of Judge
Sohigan. Armstrong responded:

A. When I mean, I have, I have absolutely no
intention of honoring that settlement agreement.

Wilson Declaration-A075027, p. 2-3.

In the deposition section Wilson quotes, he did not question

Armstrong about Judge Sohigian’s order, and Armstrong did not discuss or

refer to that order. Wilson asked Armstrong about the “settlement

agreement” and Armstrong answered about the “settlement agreement.”

19

 

Wilson Declaration-A075027, p. 3, Exhibit A thereto, excerpt of Armstrong

deposition, dated June 24, 1992 Also, RApp.8,9.

Armstrong had “stolen” no documents. Judge Breckenridge found

the justification for Armstrong’s conduct manifest, and the Scientology

plaintiffs’ causes of action for conversion must fail. CT-A075027, 5959.

Scientology repeats the false claim of “stolen” documents in its motion to

dismiss the appeal. Motion-A075027, Memo.2.

Judge Sohigian’s May 28, 1992 preliminary injunction did not

prohibit Armstrong from further violations of the “key provisions of the

settlement agreement” that Wilson identifies, but prohibited Armstrong

only from voluntarily assisting claimants against Scientology. The

preliminary injunction did not prohibit Armstrong from voluntarily

assisting defendants against Scientology, or from discussing his

experiences with Scientology or the settlement’s terms. CT-A075027, 91-

94. The prohibitions contained in Scientology’s “contract” were much

broader, and contained conditions that are unlawful on their face; e.g.,

avoidance of service of process, Exs.1: 10-11, para. 7H; non-assistance to

government agencies, Id, 13, para. 10.

On December 17, 1997, Armstrong filed a request in this Court for

extension of time, requesting “an extension until December 30, 1997 to file

his opposition to Scientology’s motion to dismiss this appeal.” Request-

A075027. This Court erroneously considered Armstrong request for an

extension of time to be his “opposition to the motion to dismiss” and

dismissed his appeal on December 23, 1997. Order, Exs.7:97.

Armstrong appended to his request for extension, in order to

demonstrate his diligence, good faith and intention to file an opposition, a

declaration he had written to support what would be the opposition he

requested an extension of time to file. Armstrong does not possess that

declaration, but is including in his respondent’s appendix a copy of his

20

 

declaration dated December 27, 1997 that was written to support the

opposition for which he requested time to file, and which can be compared

to the declaration appended to said request that was filed. RApp.84-132.

Prior to this Court’s dismissal of Armstrong’s appeal, he

communicated by telephone with a clerk in this Court, and understood from

the clerk that his extension request was granted. Armstrong spoke to the

clerk by telephone on or about December 27 to advise the Court that his

opposition would be filed by December 30, and at that time learned from

the clerk that the appeal had been dismissed, and that he could not file his

opposition. Armstrong was devastated with this development, and

coincident with this shocking ruling was for a period of a week or more

extremely ill. When he recovered, because he was denied the aid of the

California Courts to correct the injustice and abuse in those Courts that

Scientology was perpetrating, Armstrong believed he had no choice but to

expose and combat that injustice and abuse without the Courts’ aid, and

seek justice in the international court of public consciousness. Armstrong

has done so ever since, as shown by his postings to the Internet newsgroup

alt.religion.scientology, for which Scientology wants him punished.

Appellant’s Appendix (“AApp.”), 96-399. See, e.g., Armstrong’s May 22,

1998 posting, which is a declaration Armstrong executed May 6, 1998 and

filed in Armstrong v. Miscavige, et al., U.S. District Court, District of

Nevada, No. CV-N-97-00670-ECR (RAM) in response to Scientology’s

motion to dismiss, which was supported by a declaration of Andrew

Wilson.

44. I am more certain than ever that the orders of the
Marin Superior Court, upon which the Scientology
defendants herein rely to claim that I am a fugitive from
justice, and to support their motion to dismiss this case,
impermissibly violate the US Constitution's guarantees of
First Amendment freedoms, are against public policy and
illegal. I can no more be legally judicially compelled to not

21

 

mention L. Ron Hubbard, Scientology or my experiences in
that "religion" than another US citizen can be legally
judicially compelled to not mention, on penalty of fine and
imprisonment, God, Jesus Christ, the Christian religion, or the
person's religious experiences in that religion. I do not believe
that the right to discuss a religion or religious experiences or
reform a religion can legally be contracted away or judicially
prohibited and punished. I am certain that the Marin Court's
order, which Scientology interprets to permit that
organization and its agents to say or publish whatever they
want about me, and prohibit me from responding or punish
me with fines and imprisonment if I do respond, is against
public policy, obstructive of justice, and illegal. This
interpretation by Scientology is articulated in a letter dated
February 25, 1997 from attorney Wilson to my attorney
George Abbott, a true and correct copy of which is appended
hereto as Exhibit M. Mr. Wilson states in that letter that I am
not free "to communicate orally, in writing or by any
other legal means available to [me] to fully correct [ ] alleged
lies and distortions." (Ex. M p.1, para 3). The Scientology
organization leaders and their agents have subjected me for
over fifteen years to a massive international black PR assault
on my character, credibility, safety and peace. I cannot
believe that I can, in this country, be legally prohibited from
defending myself. I cannot believe that our justice system will
continue to permit this modern day slavery.

AApp.7:109-110.

About December 16, 1997, while its motion to dismiss Armstrong’s

appeal was pending, Scientology filed an application for an OSC re

contempt in the Marin Superior Court seeking to have Armstrong punished

for Internet postings he made in Canada, an appearance on UK television,

and media interviews in Germany. RApp.71-83. Said application, signed

by attorney Wilson, was supported by a declaration of Wilson dated

December 1, 1997. RApp.64-70.

In his December 1, 1997 declaration, Wilson repeats the same

falsehoods he had used to obtain Scientology’s first contempt order against

Armstrong and the dismissal of Armstrong’s appeal.

22

 

The Honorable Ronald Sohigian entered the Preliminary
Injunction in late May, 1992. Less than a month later, I was
questioning Mr. Armstrong at a deposition when he testified
of his intention to ignore the settlement agreement and Judge
Sohigian's Order:

A. When, I mean, I have, I have absolutely no intention of honoring that settlement agreement.

RApp.65.

While the preliminary injunction which preceded the Order
was in effect, Armstrong willfully disobeyed it on numerous
occasions. This gave rise to an earlier Order To Show Cause
Re Contempt, which was heard in December 1994 by the
Honorable Diane Wayne. I represented CSI at that hearing.
Armstrong admitted the violations and pled for mercy from
the court. Judge Wayne discharged the contempt but
admonished Armstrong to conduct himself appropriately in
the future.

RApp.66.

Mr. Wilson also states in his December 1, 1997 declaration:

I am informed and believe that, beginning in approximately
1990, Armstrong fraudulently transferred substantially all of
his assets and began repeatedly breaching almost every
covenant he made in the Agreement.

RApp.65. Armstrong made no fraudulent transfer. Wilson and other people

serving Scientology’s purposes have disseminated this falsehood

continuously for over a decade. See, e.g., Internet posting of December 19,

2002, in Exhibit D to Armstrong declaration of March 2, 2004.

Armstrong hid his money by giving it away.
[...]
Gerry Armstrong tried a variety of maneuvers (including
establishing a bogus corporation) in an effort to protect the
proceeds he received in his settlement with the Church of
Scientology.
When that didn't work, he transferred the proceeds to others.
That's when he began his "witty" ruse that he was a Prophet
of God [R].

RApp.145,

23

 

In fact, on June 13, 1997, after a hearing on Scientology’s

application for writ of attachment to seize a house that had been

Armstrong’s years before, Judge Thomas had ruled that there was no

fraudulent transfer.

Plaintiff's application for a right to attach order and writ of
attachment is denied. Plaintiff has not established the
probable validity of its claim that defendant transferred the
subject property to Walton "[w]ith actual intent to hinder,
delay, or defraud" plaintiff. Plaintiff's own evidence shows
that defendant never believed the settlement agreement was
enforceable and thus would not have expected plaintiff would
be able to recover under the liquidated damages provision.[ ]
thus, this supports the conclusion that defendant gave away
his property because of his calling from God rather than to
avoid his obligations to plaintiff.

RApp.63. Scientology never appealed this ruling, it has been final for

seven years, and Scientology has done nothing to prosecute its fraudulent

fraudulent conveyance lawsuit ever since. Wilson knew of Judge Thomas’

June 13, 1997 ruling when Wilson wrote his December 1, 1997 declaration

because, as the ruling shows, Wilson was present in court when the ruling

was made. RApp.63.

Scientology concludes its December 1, 1997 application with a

demand that Armstrong be prosecuted criminally.

Further, upon finding Armstrong in contempt under Code of
Civil Procedure § 1209, et seq., referral to the District
Attorney for misdemeanor prosecution under Penal Code §
166(4) is also necessary to curtail Armstrong's continued
defiance of this Court's authority.

RApp.80,81.

As Armstrong’s May 22, 1998 posting to the Internet, quoted supra,

shows, Wilson submitted the same set of falsehoods in the Nevada

litigation as Wilson had used to have Armstrong punished for contempt of

court and have his appeal dismissed.

24

 

22. CSI and RTC also supports their motions to
dismiss with a declaration executed by attorney Andrew
Wilson which contains a substantial number of untruths. Mr.
Wilson states:
          " In late January, 1997, I learned of actions by
Mr. Armstrong that I believed were clear violations of the
[October, 1995] Injunction. Armstrong sent to the Hon.
Ronald M. Whyte, the United States District Judge presiding
over three cases in which the plaintiff is Religious
Technology Center ("RTC"), a beneficiary of the Injunction, a
letter and lengthy declaration disseminating information
denouncing CSI and its related entities. ¶ This was not
Armstrong's first violation of the Injunction. Prior to that,
Armstrong repeatedly and wilfully disobeyed the preliminary
injunction which preceded the permanent injunction. (Wilson
Decl. 2:20-26) I at no time disobeyed the "preliminary
injunction." Between 1992 and 1994 Scientology attempted to
have me sentenced and jailed for several non-existent
"violations" or "contempts" which its agents manufactured.
All of the alleged contempts were discharged, and Mr.
Wilson, who participated in the contempt proceedings, is
fully aware of this fact.
          23. I sent the declaration and letter, true and correct
copies of which are appended hereto as Exhibit D, to Judge
Whyte to properly report an improper threat received from
attorney Wilson. I had been subpoenaed by defendant Grady
Ward to produce documents in the case of RTC v. Ward, US
District Court for the Northern District of California, case no.
C-96-20207 RMW. A true and correct copy of the subpoena
is appended hereto as Exhibit E. The following day I received
from Mr. Wilson a letter, a copy of which is appended hereto
as Exhibit F, threatening "further conflict and annoyance"
between me and Scientology if I produced the subpoenaed
documents. I considered and still consider Wilson's threat to
be obstructive of justice and so reported it to Judge Whyte. I
had been threatened by Scientology lawyers on a number of
other occasions when I had earlier been subpoenaed as a
witness in Scientology-related litigations.

AApp.7:103, 4.

On February 11, 1998, Judge Thomas signed a contempt order

against Armstrong, for 13 violations of the injunction, consisting of 8

25

 

Internet postings in Canada and 5 media interviews in Europe. Judge

Thomas punished Armstrong with a sentence of 2 days in jail and a fine of

$200 for each of the violations, and ordered him to surrender by February

10, 1998. The contempt order was filed February 20. Exs.10:103-7.

On or about November 13, 2000, Scientology filed an application for

an OSC re contempt, signed by Wilson and supported by a declaration

of Wilson dated November 13, 2000, seeking to have Armstrong punished for

131 Internet postings he made in Canada, two talks in Florida, and a media

interview in Denmark. RApp.154-165. In the application and his

declaration, Wilson repeats the falsehoods he had used to obtain the earlier

contempt orders and the dismissal of Armstrong’s appeal: that Armstrong

had fraudulently transferred all of his assets RApp.157,162; that

Armstrong’s sending his declaration to Judge Whyte about Wilson’s threat

was a violation of Judge Thomas’ injunction RApp.157, 163; that

Armstrong fled California in response to the first contempt judgment and

moved out of California to avoid arrest RApp.157; that Armstrong testified

in deposition that he intended to ignore Judge Sohigian’s preliminary

injunction RApp.162. Wilson and Scientology also falsely stated: “There

was no appeal from the Injunction.” RApp.159.

In the November 13, 2000 application, Wilson and Scientology

again urged the Marin Court to punish Armstrong criminally.

Armstrong has willfully treated this Court's authority with
such callous disregard that he should be criminally sanctioned
by fine and imprisonment under Code of Civil Procedure §
1218.

RApp.160.

Armstrong filed an opposition to Scientology’s application for an

OSC dated January 9, 2001 supported by a declaration also dated January 9,

2001. In his declaration, Armstrong refuted Wilson’s and Scientology’s old

repeated false statements in their November 13, 2000 application and

26

 

declaration, refuted newly made false statements in their papers, and

emphatically rejected the notion that Judge Thomas’ injunction and

contempt orders are lawful. Exs.12:110-140.

On July 12, 2001, Marin Judge Vernon F. Smith, who had inherited

the case from Judge Thomas who had retired, signed an order of contempt,

filed July 13, 2001, ruling that the injunction was valid and enforceable and

finding Armstrong in contempt of court, but not imposing a specific

punishment at that time. Exs.13:141-144.

On April 2, 2002 Scientology filed another lawsuit in Marin

Superior Court, CV 021632, against Armstrong, Robert Minton and the

Lisa McPherson Trust, seeking $10,050,000 from Armstrong for 204

“breaches” of Scientology’s “contract.” The 204 claimed “breaches”

included the 131 Internet postings identified in Scientology’s November 13,

2000 application for OSC, plus 73 “new” “breaches.” Exs.14:145.

Armstrong, then living in Germany, filed his answer November 19, 2002.

Exs.15:211-295.

On November 17, 2003, Scientology filed a motion for summary

judgment, claiming there was no triable issue of fact because Armstrong

had admitted committing the “breaches,” and seeking $50,000 for each

“breach.”

On March 9, 2004 Armstrong filed his opposition to the summary

judgment motion, supported by his declaration dated March 2, 2004.

RApp.256-299. Armstrong’s evidence in support of his opposition

included: Ex. A, his complaint report executed February 16, 2004

(RApp.168-255) to the U.S. Department of Justice Civil Rights Division

identifying a number of Federal crimes being committed against him and

others by “beneficiaries” to the “contract” that Scientology wants this Court

to enforce; Ex. B, L. Ron Hubbard’s policy letter and “religious scripture”

Battle Tactics” (RApp.1-3) that Armstrong had studied inside Scientology,

27

 

which orders aggressive, criminal acts and “war” against Scientology's

"enemies" such as Armstrong;” Ex. D, excerpt of Internet postings

(RApp.133-153) black PRing Armstrong made by individuals serving

Scientology’s interests; Ex. F, the decision dated June 20, 1984 in

Scientology v. Armstrong, Los Angeles Superior Court case no. C 420153

(CT-A075027, 5948-5974); Ex. G, subpoena (RApp.10-11) served on

Armstrong January 23, 1997 in the Ward case; Ex. H, Wilson's letter

(RApp.12) of January 24, 1997; Ex. I, Armstrong's declaration (RApp.13-

57) dated January 26, 1997, sent to the judge in the Ward case; and

Armstrong’s resume (RApp.166,167)

On March 17, 2004, Scientology filed a motion to strike

Armstrong’s evidence in support of his opposition to Scientology’s

summary judgment motion.

On March 23, 2004, Marin Superior Court Judge Lynn Duryee

denied Scientology’s motion for summary judgment. RApp.300.

Scientology did not appeal.

On April 2, 2004 Judge Duryee conducted a hearing Scientology’s

motion to strike, and issued an order denying the motion. RApp.301-303.

On April 9, 2004 the trial of Scientology’s complaint against

Armstrong proceeded, resulting in Judge Duryee’s judgment awarding

Scientology $500,000 in liquidated damages, but rejecting Scientology’s

claim of $50,000 for each of the 131 or more “breaches” as unconscionable.

Mr. Armstrong received a benefit under the settlement
agreement of $800,000. And I think it would be
unconscionable to punish him beyond what the benefit was
that conferred to him. He's previously been sanctioned in the
sum of $300,000.
So my thought is to enter judgment for the
plaintiff, on the admitted violations, of $500,000.

RT, Exs.16:350.

28

 

Judge Duryee also discharged the contempt punishment against

Armstrong ordered in 1997 and 1998 by Judge Thomas.

And in my view the bench warrants that have been previously
issued on the contempt citation, which call for, looks like,
around 30 days in jail, I would discharge the jail and the
contempt citation, the contempt punishment, with
the entry of the judgment of $500,000.

Exs.16:350-351

Attorney Wilson then pleaded with the Court to sentence Armstrong

for the July 13, 2001 order of Judge Smith finding Armstrong in contempt

for 131 or more violations of the injunction but not imposing specific

punishment.

Mr. Wilson: Right. So if I can take a third bite at the apple.

Sentence him on that one. Something.

Exs.16:356. Judge Duryee then sentenced Armstrong, and deemed

the punishment served by Armstrong’s appearance in court.

The court: All right.
So on the order of contempt issued July 13th, 2001, the court
sentences you to five days in jail and a fine of $1,000. The
fine is -- the fine is concurrent with the judgment that's been
rendered in this action and the jail time is deemed served by
your appearance in court here today.

Exs. 16:357

On May 20, 2004 the Marin Court issued its Order Granting

Plaintiff’s Motion for Judgment. Exs.18:361. On the same date, the Court

also issued an Order Re Sentences for Contempt discharging the sentences

imposed by Judge Thomas, and deeming the sentence on Judge Smith’s

July 13, 2001 contempt order served by Armstrong’s appearance.

Scientology then appealed.

In its opening brief, signed by Wilson, Scientology twice

states as fact that Armstrong was convicted of “criminal contempt.”

This appeal is related to, and has been consolidated with,
Church of Scientology v. Superior Court, Case No. A107095.

29

 

That matter arises from the trial court's sua sponte vacation
and discharge of two sentences for criminal contempt
previously imposed by the Honorable Gary Thomas

AOB, 1

Armstrong was twice convicted of criminal contempt in
proceedings before Judge Thomas for violating the permanent
injunction. Exs., Tabs 8 and 10. To avoid the jail sentences
imposed for his contempt convictions, Armstrong fled to
Canada

AOB, 5

In its writ petition, also signed by Wilson, Scientology 3 times states

that Armstrong was guilty of “criminal contempt.”

The Court did not explain how a fine for criminal contempt
payable to the court can be "concurrent" with a civil judgment
for damages payable to a party. Nor did it explain how an
appearance in court is the equivalent of serving a five-day jail
sentence.

Petition, 12

19. The Superior Court committed clear legal error in holding
that a compensatory damages judgment in the Related Action
for different violations of the contract and permanent
injunction can satisfy orders of criminal contempt in the
Action.

Petition, 13

In the First and Second Orders of Contempt, Judge Thomas
found Armstrong guilty of contempt and sentenced him to
fines totaling $3,600 and 28 days of confinement. In the Third
Order of Contempt, Judge Duryee sentenced Armstrong to a
$1,000 fine and five days of confinement. These sentences
were criminal contempt sanctions

Petition, 19

Wilson cannot but know that the contempt orders in this case are not

for criminal contempt but for civil contempt. Wilson himself twice urged

the Marin Court in the applications for an OSC re contempt to refer

Scientology’s contempt allegations to the District Attorney for criminal

prosecution, which on both occasions the Court did not do. RApp.81,160.

The bench warrants that followed the contempt orders that Wilson calls

30

 

“criminal contempt” were prepared by him and state very clearly that the

matters are “civil.” Exs.9:101; Exs.11:108.

ARGUMENT

I. Law compels a trial


California Civil Code §1670.5, is the governing law in this case, and

very clear:

(a) If the court as a matter of law finds the contract or any

clause of the contract to have been unconscionable at the time

it was made the court may refuse to enforce the contract, or it

may enforce the remainder of the contract without the

unconscionable clause, or it may so limit the application of

any unconscionable clause as to avoid any unconscionable result.

(b) When it is claimed or appears to the court that the contract

or any clause thereof may be unconscionable the parties shall

be afforded a reasonable opportunity to present evidence as to

its commercial setting, purpose, and effect to aid the court in

making the determination.

There is no doubt whatsoever that Judge Duryee found the contract

or its clauses unconscionable. The essence of and reason for her judgment

is unconscionability. The reason she gave for her judgment, in 2004, as

unconscionability applied to the contract’s liquidated damages provision,

was that, in this case, liquidated damages to Scientology beyond what

Scientology had given Armstrong in settlement of his lawsuit and other

claims against Scientology, in 1986, would be unconscionable. In this case,

31

 

Scientology was seeking liquidated damages 20 times the monetary amount

given to Armstrong to settle his claims up to December 1986.4

Judge Duryee linked what she meant by unconscionability to the

liquidated damages’ unreasonableness.

The Court: Well, liquidated damages have to be reasonable. I
think it's unreasonable to go beyond the amount that was paid
to Mr. Armstrong.

Exs.16:351.

Judge Duryee acted, as provided by CCC §1670.5, to limit the

application of Scientology’s unconscionable liquidated damages clause as

to avoid the unconscionable result of Armstrong being assessed monetary

damages for millions or trillions of dollars or more, lawsuit after lawsuit,

for the rest of his life.

Scientology obviously does not like Judge Duryee’s emphatic

judgment that its “contract,” by which it had hounded Armstrong around

the world, bankrupted him and threatened him for 18 years, is

unconscionable. Indeed, Scientology should be very concerned, because

Judge Duryee’s judgment not only ends Scientology’s drive for judicial

enforcement, but exposes all of what Scientology and its beneficiaries, such

as attorney Wilson, have done to enforce the unconscionable “contract” or


4 Because the distribution of the lump sum that Scientology gave to
attorney Michael Flynn in settlement of all of the Flynn-related cases
against Scientology, including Armstrong’s, was unknown to Scientology,
Armstrong’s position is that therefore the amount he was given by Flynn
out of that lump sum to settle with Scientology is irrelevant; i.e.,
Scientology’s “contract” to be lawful had to be lawful when signed if
Armstrong had been given $800,000 or $8. What Armstrong had actually
been given to dismiss his case against Scientology and release it and a host
of beneficiaries from all claims up to the date he signed was about
$515,000. Thus 20 times the benefit that was conferred to Armstrong is
$10,300,000, which is only five “breaches” more than what Scientology
was seeking in this case, $10,050,000. This sum is actually 19.515 times
what Armstrong received.

32

 

otherwise unconscionably shudder Armstrong into silence. But

Scientology is not going about undoing Judge Duryee’s judgment that its

“contract” is unconscionable in the way prescribed by law.

Since it appeared to Judge Duryee that the contract not only may be

unconscionable but is unconscionable, and Scientology desires to invalidate

that judgment of unconscionability, Scientology must avail itself of the

evidentiary hearing that it is to be afforded by CCC §1670.5. Scientology

must present evidence of the circumstances at the time the “contract” was

made that demonstrate that its unconscionable clauses were not then

unconscionable. Armstrong must be afforded such an evidentiary hearing

to demonstrate that the unconscionable clauses that Judge Duryee found to

be unconscionable were indeed unconscionable at the time the “contract”

was made.

CCC §1670.5 requires that to challenge the judgment of

unconscionability Scientology must present evidence as to the commercial

setting at the time the “contract” was made, its purpose and effect. The

time when Judge Thomas, years later, signed his summary adjudication

orders finding the unconscionable “contract” “reasonable” and

“enforceable” is not relevant to the determination of the reasonableness or

unconscionability of the “contract” at the time it was made, except as an

effect of the unconscionable “contract.” Obviously, to assist the Court in

determining the effect of Scientology’s unconscionable contract, there

exists now 18 years of evidence of that effect, which includes Judge

Thomas’ actions and orders enforcing that unconscionable “contract.”

Thus a later judgment of unconscionability as to the “contract” must be an

automatic exception to the application of collateral estoppel and res judicata

to Judge Thomas’ judgment. Scientology, citing Hong v. Somerset, 161

Cal. App. 3d 111 (1984) admits as much.

33

 

Moreover, the reasonableness of a liquidated damages
provision is determined as of the date of the execution of the
contract, not at the time of the breach, and certainly not at the
time of a subsequent judgment finding breach.

AOB, 15

Scientology is attempting to improperly avoid submitting to an

evidentiary hearing on the circumstances at the time the “contract” was

made, which is Scientology’s “remedy” provided by law, by getting this

Court to overrule the Marin Court’s judgment of unconscionability. This

Court cannot overrule the judgment of unconscionability, however, because

this Court is not the trier of fact as to the circumstances at the time the

“contract” was made, concerning which no evidence has yet been adduced

because there has been no hearing.

As afforded by CCC §1670.5, Armstrong himself requests and

hereby submits to an evidentiary hearing on the “contract’s” commercial

setting, purpose, and effect to aid the trial court in making any

determination that remains to be made as to the “contract’s”

unconscionability. From the day in 1986 when he was pressured and

deceived into signing Scientology’s unconscionable “contract” Armstrong

has considered that “contract” unconscionable. From the day in 1992 when

Scientology served on him its first lawsuit to enforce its unconscionable

“contract” Armstrong has sought an evidentiary hearing, indeed a trial, on

the circumstances at the time the “contract” was made in order to

demonstrate its unconscionability. From the days in 1995 when Judge

Thomas made his summary adjudication rulings denying Armstrong a trial

on the circumstances at the time the unconscionable “contract was made”

Armstrong has protested that the denial of the trial that he sought was

improper. From the day that this Court improperly dismissed Armstrong’s

appeal from Judge Thomas’ denial of the trial Armstrong sought Armstrong

has protested that improper dismissal. Judge Duryee’s unconscionability

34

 

judgment has proven Armstrong right, and CCC §1670.5 now gives him,

and Scientology, the evidentiary hearing, or trial, that he was previously

improperly denied.

II. The Marin Court’s Judgment of Unconscionabilty is Reasoned
and Sound

Scientology says:

Armstrong was collaterally estopped to challenge the
liquidated damage clause's reasonableness and enforceability,
especially after the trial court rejected the defenses by which
Armstrong sought to raise such precluded issues.

AOB, 10. That assertion is arguable, but does not have to be argued

because it does not describe what happened at trial. Judge Duryee herself

challenged the reasonableness and enforceability of the liquidated damages

clause, and found that clause unconscionable.

Contrary to what Scientology would like this Court to believe, Judge

Duryee’s finding that Armstrong had no defenses, that his affirmative

defenses had all been lost to him by Judge Thomas’ grant of Scientology’s

summary adjudication motions, while she also found the “contract’s”

liquidated damages clause unconscionable, supports and reinforces her

unconscionability judgment. If Scientology’s “contract” is unconscionable,

which it has been adjudged to be and therefore must always have been, then

the earlier elimination of Armstrong’s defenses to the enforcement of the

unconscionable “contract,” by the “contract’s” enforcement, must be

unconscionably unconscionable. Unconscionability is itself, of course, an

affirmative defense.

Scientology acknowledges that Judge Duryee herself declared the

“contract” unconscionable because it called for punishment far beyond

what Armstrong received.

The trial court initiated the concept that CSI's judgment must
be limited to $800,000. Even the fervent imaginations of

35

 

Armstrong and his counsel did not conjure up such an
inappropriate argument. The issue was never briefed, and the
trial court gave itself no opportunity to reflect upon the
wisdom of its idea.

AOB, 17. Scientology is, however, wrong about Armstrong and his lawyer

not contemplating this argument. In truth, Armstrong’s fervent imagination

had envisioned the very absurdity that leads to the very obscene

unconscionability that Judge Duryee cannot but have observed in order to

arrive at her judgment. Armstrong provided testimony about the monetary

absurdity of the liquidated damages clause in his declaration in support of

his opposition to Scientology’s summary judgment filed March 9, 2004.

RApp.256-274.

Since Scientology has affirmed and insisted that virtually any
utterance by me that mentions Scientology or my thoughts
about Scientology or any of the entities comprising the
"beneficiaries" to the subject "contract is worth $50,000.00, it
is obvious that Scientology cheated me when it claimed it
purchased my right and ability to make such utterances. If my
Usenet post stating "I'll say $1,500,000. That's my figure."
[AApp.52:182] is worth $50,000.00, then "I'll say $1,500,001.
That's my figure." is also worth $50,000.00, as is "I'll say
$1,500,002. That's my figure." and "I'll say $1,500,003. That's
my figure." etc. I believe that I can generate utterances, orally
and by computer and other communication media, that would
have a value of trillions, or even quadrillions, or more dollars
a day. Accepting Scientology’s own monetary valuation of
my utterances, the organization cheated me out of quintillions
of dollars, or over a lifetime even sextillions of dollars, with
its cruelly unfair peanuts "settlement" "payment." For
Scientology to purchase my rights, ability and utterances that
the organization claims it purchased, it would have to pay me
what my potential utterances are worth, sextillions.

RApp.265

There is no doubt that Judge Duryee had read Armstrong’s March 2,

2004 declaration, which contains testimony about this and other absurdities,

about Scientology’s impermissible and criminal deprivation of his

36

 

Constitutionally guaranteed rights and privileges, and about other

Scientology behavior that shocks the conscience. She had in fact read

Armstrong’s declaration twice, and immediately prior to trial, because

Scientology had moved to strike this very declaration, and she had studied

the declaration to arrive at her denial of Scientology’s motion.

RApp.301,302.

Although attorney Greene had not approached the unconscionability of

the liquidated damages clause precisely as Judge Duryee did, his fervent

imagination was also well aware that it is unconscionable.

In the instant case, there is serious unconscionability in the
procedural sense given the inequality of bargaining power
between Scientology and Armstrong, as discussed above and
set forth in greater detail; in Armstrong's separate statement.
What is most obvious is the substantive unconscionability. It
is clear that as Scientology seeks to have it enforced, the
agreement is one-sided: Scientology can slander Armstrong
and he must remain mute or get hit with a $50,000 liquidated
damage assessment: What is the possibl[e] justification for
such a one-sided agreement? If you listen to Scientology, it is
because Armstrong is a liar and fomenter of anti-Scientology
litigation. But if what Scientology says is true, you must
throw out the decision of Judge Breckenridge which has been
affirmed on appeal in a published decision. That makes no
sense. It makes no sense to accept the characterization of an
organization that has a long recorded history of abuse of
individuals and the legal system and to disregard a well-
respected superior court judge.

Armstrong’s Defendant's Opposition to Motion for Summary Adjudication

on the Thirteenth, Sixteenth, Seventeenth, and Nineteenth Causes of

Action, § IV. “The Liquidated Damages Provisions are Unconscionable,”

filed September 18, 1995, CT-A075027, 8248-8250

Any idea that Scientology is conveying that Judge Duryee’s

judgment of unconscionability was out of the blue is baseless. Her

conscience must have been shocked, and she could not help but be troubled

37

 

by the light she must reflect with that judgment onto her former colleague

in the Marin Court. That Judge Thomas had adjudged the “contract”

reasonable and enforceable, and conscionable, and had used his authority to

enforce it, when, no matter what Armstrong had done, was doing, or would

do, the “contract” is patently unconscionable, would grieve any judge with

a heart. The “contract” must have been to Judge Duryee extremely

unconscionable given what she had to confront and transcend in order to

render her judgment: the principles of res judicata and collateral estoppel,

Scientology, and judging her fellow Marin County Judge, who had abetted

the unconscionable almost a decade ago, by denying Armstrong a fair trial

in which he could present his defenses, including unconscionability. Thus

Judge Duryee’s unconscionability judgment is profound, and rendered by

her only after considerable thought, and after a search of her conscience

that Scientology’s “contract” had shocked.

Obviously even before the trial Judge Duryee had pondered the

unconscionability of Scientology’s seeking in “damages” many times more

than what Armstrong had received to dismiss his claims. She asked

Scientology attorney Wilson about it even before she asked for opening

statements.

The court: So here's my question. The contract between the
parties was based on consideration of the church paying
$800,000 to Mr. Armstrong. So now we have subsequent
actions where Mr. Armstrong continues to have monetary
liquidated damages imposed against him for his violation of
the settlement agreement. [ ] So what happens when we
reach the point that he has an obligation to pay the Church
more than what he received? What about that? How does that
affect the rights between the parties?

Exs.16: 309 Wilson’s answer: “Doesn’t affect it at all.”

Later in the trial, attorney Greene responded to the Court’s question.

38

 

to your question about what happens when he accumulates
enough liquidated damages hits to equal the consideration
that he got, if that -- if there was no washout the injustice to
Armstrong would be forever. Scientology could say whatever
they want about him. He would be effectively gagged and
tied. And if he refused to be gagged and tied, and if he made
the choices to speak out and tell the truth as he knew it, the
range of punishment for doing that would be limitless. That's
just simply unfair and unjust. And based on the injustice
exception to the rule of res judicata we would submit that this
proceeding is worthy of a full hearing.

Exs.16:314,315 Judge Duryee agreed with Greene.

Also early in the proceeding, the Court obtained from Wilson two

very important admissions that helped her to arrive at her unconscionability

judgment: that Scientology’s punishment of Armstrong with its “contract”

would go on forever; and that other key “contractual” conditions relating to

the liquidated damages clause were also completely one-sided.

Mr. Wilson: [Armstrong] bargained for the liquidated
provision that provided for $50,000 for each breach. That was
in the nature of incentive for him not to breach.
The Court: So your position is once he made that deal he
forever gave up his rights to speech against the church?
Mr. Wilson: He did.

Exs.16:309.

The agreement says that Armstrong can't say anything about
the church and it doesn't say that the church can't say
anything about Armstrong.

Exs.16:318 Greene then articulated the effect of such complete one-

sidedness in Scientology’s “contract.”

what we have is Scientology attempting to employ a
completely one-sided contract to be able to pound on
Armstrong in court in the furtherance of their fair game
policy that says that enemies of Scientology can be sued, lied
to, tricked, or otherwise destroyed by Scientology without
any adverse consequences.

Exs.16:319,320

39

 

After hearing opening statements on Scientology’s motion to

preclude Armstrong from introducing any evidence on his defenses, Judge

Duryee called a recess to study the documents submitted in the matter.

I'm going to take this motion under submission. I'm going to
take a closer look at some of the documents.
So don't go anywhere. I'm just going to go to my chambers
and read some of these materials closer.

Exs.16:349

When she returned to the bench, Judge Duryee granted

Scientology’s motion for a directed verdict ruling that Armstrong’s

defenses had been previously litigated so he had none. She also said stated:

the court has listened to the opening statements of the
defense. [Exs.16:328-344] And even if those things were
proven to be true, there is no ambiguity in the settlement
agreement. And defendant, in accepting that money, did
undertake to abide by the terms and conditions of the
settlement agreement. And that particular provision was not
bilateral, it was unilateral. So that even if the church said
horrible things about Mr. Armstrong, he is not justified to
violate the terms of the settlement agreement, but would have
other remedies under the law.

Exs.16:350.5


5  The horrible things that Scientology and the individuals serving its
purposes have done to and published about Armstrong also would shock
any decent person’s conscience. See, e.g., excerpted Usenet postings, Ex.
D to Armstrong’s March 2, 2004 declaration. RApp.133-153: “fled the
United States because there is a warrant out for his arrest” RApp.134; “had
himself photographed by a newspaper naked” RApp.134; RApp.134; “a liar. He never
worked with [Hubbard]” RApp.135; “Gerry Armstrong is one big fraud and
very stupid” RApp. 135; “He took those documents in secret cooperation
with criminal infiltrators of Scientology that forged the documents;”
RApp.135; “one sick, deranged, twisted fuck like you” RApp.137; “a
loathsome coward” RApp.138; “Once Gerry has had his fill using Caroline
[Armstrong’s wife], he’ll unceremoniously dump her” RApp.138;
“operating like a brainwashed cultist” RApp.139; “Mentally unsound
individuals like Gerry Armstrong” RApp.140; “you’re nothing more than a
hypocritical blowhard” RApp.142; “[Armstrong’s wife Caroline will] be
viewed as yesterday’s rubbish by the scam artist” RApp.144; “Gerry

40

 

Judge Duryee then declared Scientology’s effort to punish

Armstrong beyond what the benefit was that was conferred on him

unconscionable, and awarded Scientology $500,000 in liquidated damages.

Since Scientology had been awarded $300,000 in liquidated damages by

Judge Thomas in his judgment, Judge Duryee’s award gave Scientology a

total of $800,000 in judgments, the amount it claimed to have paid

Armstrong to settle his lawsuit and other claims against Scientology and the

“contract’s” other beneficiaries.

Wilson stated during the trial that Scientology just wanted its money

back, and would rescind the “contract” if it got its money.

I can tell you that if Mr. Armstrong today would like to pay
the money back we'll rescind the agreement. I mean this is not
about the church of Scientology trying to be punitive. This is
about the church of Scientology trying not to be a victim.

Exs.16:323

Judge Duryee questioned Wilson about the apparent contradiction in the damages Scientology was seeking.

The Court: You're asking for monetary damages for 131
postings and you're also saying that if Mr. Armstrong wants
to give the church the money back the church will rescind the
agreement?
Mr. Wilson: That's right.

Exs.16:326

When Wilson protested Judge Duryee’s limiting liquidated damages

to what was conferred on Armstrong, she again questioned Wilson about

Scientology’s willingness to rescind its “contract,” and associated her

monetary judgment with rescission.


Armstrong is a cad and a bounder who can not be relied on for behavior
befitting a decent human being” RApp.146; “a fucking liar” RApp.146;“a
thin-skinned paranoid egomaniac with zero sense of humor” RApp.149;
“Gerry’s insanity” RApp.150; “self-destructing” RApp.150; “Gerry
Armstrong’s logic doesn’t meet any of the minimal standards to so qualify”
RApp.151.

41

 

The Court: But you told me that the church was willing to discharge the --
Mr. Wilson: We would rescind the agreement.
The Court: Rescind the agreement if he gave you the money
back. The courts are not responsible for collection. All we can
do is issue orders. But given the church's position I think
returning to the church the benefits that were conferred to Mr.
Armstrong reaches the same result.

Exs.16:354

In Scientology’s opening brief there is no mention of Wilson’s

representation to the trial court that Scientology only wanted its money

back and would rescind its unconscionable contract if it got the money it

was awarded.

As Scientology says in its writ petition, following the April 9, 2004

trial, Wilson and Greene submitted to the Court different proposed orders

on the trial rulings. Petition, 12. On May 20, 2004, the Court issued its

own Order Granting Plaintiff’s Motion for Judgment. Judge Duryee thus

had 40 days to reflect upon the wisdom of her judgment of

unconscionability in this case before she confirmed it in writing.

Nevertheless, she did not waiver in the certainty of her judgment.

Mr. Armstrong received a benefit under the settlement
agreement of $800,000. It would be unconscionable to punish
him beyond what the benefit was that was conferred to him.
Armstrong was previously sanctioned in the sum of $300,000.
Judgment is therefore entered for plaintiff, on the admitted
violations, of $500,000.

Exs.18:361

The following appears to be a very good statement on

unconscionability as the term is used in contract law:

Under California law, unconscionability has both a
procedural and substantive element: the procedural element of
unconscionability focuses on oppression, which arises from
an inequality of bargaining power that results in no real
negotiation and an absence of meaningful choice, or surprise,
which involves the extent to which the supposedly agreed-

42

 

upon terms are hidden in a prolix printed form drafted by the
party seeking to enforce them, while the substantive element
of unconscionability traditionally involves contract terms that
are so one-sided as to shock the conscience or that impose
harsh or oppressive terms.

Ting v. AT & T, N.D.Cal.2002, 182 F.Supp.2d 902, affirmed in part,

reversed in part 319 F.3d 1126, certiorari denied 124 S.Ct. 53, 157

L.Ed.2d 24, 2003 WL 1988529.

California law also addresses the relationship of procedural to

substantive elements of unconscionability:

Although both procedural and substantive unconscionability
must be present before a contract or contract provision is
rendered unenforceable on grounds of unconscionability,
those elements are reviewed in tandem such that the greater
the degree of substantive unconscionability, the less the
degree of procedural unconscionability that is required to
annul the contract or clause.

Kinney v. United HealthCare Services, Inc. (App. 4 Dist. 1999) 83

Cal.Rptr.2d 348, 70 Cal.App.4th 1322.

Scientology might argue that because Armstrong was prevented by

res judicata from putting on his defenses, and therefore prevented from

presenting evidence as to why he signed the “contract,” Judge Duryee could

not know anything about oppression, Scientology’s and Armstrong’s

relative bargaining power, no negotiation, or no meaningful choice; so the

necessary procedural unconscionability could not be present. But Judge

Duryee had listened to Greene, and she had read Armstrong’s March 2,

2004 declaration in opposition to Scientology’s summary judgment motion,

which provides more than sufficient procedural unconscionability, to go

with the obvious substantive unconscionability that shocked her

conscience, to support her conclusion and judgment of unconscionability.

She knew what Armstrong was stating about no real negotiations,

and knew he had been stating it for almost 15 years.

43

 

there was absolutely no negotiation by me with Scientology,
or even via Flynn with Scientology, regarding liquidated
damages and no discussion whatsoever regarding their
reasonableness. It was completely understood by me at the
time of the settlement that the liquidated damages condition
and amount were utterly unreasonable. I am certain that they
are just as unreasonable today, and, I believe, even more
unreasonable given the now obvious conclusion that this
liquidated damages condition, its enforcement by Judge
Thomas, and every way in which it has been used by
Scientology against me and against others, constitute acts in
furtherance of serious civil rights crimes.

Declaration, March 2, 2004, RApp.264.

Armstrong also described the oppression:

At the time of the December 1986 "settlement," my attorney
Michael Flynn told me that if I didn’t sign Scientology’s
"contract," Scientology would continue to Fair Game me,
Flynn and his family, the other Scientology victims that Flynn
represented, and Fair Game anyone else Scientology wanted.
I knew very well what Fair Game was, and understood very
well the terrible threat that Scientology was making. I have
described this duress in my sworn Complaint Report, Ex. A,
p. 37, para. 123

The burden of having to sign Scientology’s
onerous, indeed impossible, "contract" in order
to have the organization stop its fair game
attacks on my attorney and his family, on his
clients, on my friends, on the rest of humanity,
and on myself, was unbearable.

RApp.262.

Armstrong also provided his knowledge of the bargaining power of

Scientology in relation to his own bargaining power.

At the time of the "settlement," Scientology was a billion
dollar enterprise, whereas I had no money whatsoever and no
bargaining power. Scientology had hundreds of lawyers. My
lawyer had been compromised by Scientology to the point
that he was pressuring me on Scientology’s behalf to sign the
"contract" to have Fair Game end against him and his family,
assuring me that Scientology would end Fair Game forever if

44

 

signed, and also insisting that the liquidated damages
condition was not worth the paper it’s printed on.

RApp.266.

Even if Judge Duryee had not known any of the facts about the

circumstances when the “contract” was made, its terms are so one-sided as

to shock the conscience, and harsh, and oppressive. It is obvious that she

found the liquidated damages clause oppressive because she acted to limit

the application of that clause. The clause that Scientology wants this Court

to enforce, by which Scientology could collect astronomical sums from

Armstrong for the rest of his life, and chase him around the galaxy, is

clearly oppressive, and the result of enforcement would be unconscionable.

Judge Duryee zeroed in on the “contract’s” utter one-sidedness, and

declared it unilateral just before rendering her judgment. Scientology, and

all the beneficiaries including attorney Wilson, can say all the horrible

things they want about Armstrong, and Armstrong can say nothing about

any of them. Scientology gets $50,000 from Armstrong per utterance,

which Scientology’s attacks precipitate, and Armstrong gets nothing from

Scientology or the beneficiaries when they run global black PR campaigns

against him. Scientology also says that there is no limit to how many

utterances it can collect for, and enforcement of the liquidated damages

clause would continue until Armstrong’s death. Acting oblivious to their

“contract’s” flaming unconscionability, Scientology was suing Armstrong

in the Marin Court for ten million dollars for two hundred utterances.

Scientology contends:

the trial court's conclusion that it would be "unconscionable"
for CSI to recover cumulative damages an amount in excess
of what it paid Armstrong under the terms of the contract is
without legal support or merit. A liquidated damages
provision that has already been adjudicated as reasonable and
enforceable cannot become unconscionable just because one
party to the contract decides to commit several hundred
willful breaches.

45

 

AOB, 17.

CCC §3359 completely supports the trial court’s conclusion.

Damages must, in all cases, be reasonable, and where an
obligation of any kind appears to create a right to
unconscionable and grossly oppressive damages, contrary to
substantial justice, no more than reasonable damages can be
recovered.

Armstrong does not accept that any damages are reasonable. It appeared to

Judge Duryee, however, that the “contract” created a “right” for

Scientology to unconscionable and grossly oppressive damages, in the

millions, billions or trillions of dollars, and thus, applying CCC §3359, she

limited damages to the “reasonable” amount of what Armstrong in 1986

received to dismiss his claims.

The “contract’s” liquidated damages clause did not become

unconscionable because Armstrong decided to commit several hundred, or

hundreds of thousands of breaches. The clause was unconscionable when

the “contract” was made.

III. The Liquidated Damages Are, But May Not Lawfully Be,

Punishment

Wilson asserts that Armstrong did not consider Scientology’s

liquidated damages awards against him punishment.

Mr. Wilson: [Armstrong] needs to be punished for that or
else what you're saying is that anybody can do it.
The Court: Some people might consider a $800,000 judgment
against them to be punishment.
Mr. Wilson: Mr. Armstrong doesn't. He told you he doesn't.
He told you he's going to keep doing it.

Exs.16:352,353. This is false, and proven false by everything Armstrong

has said or written about Scientology’s “religious” persecution and

punishment of him from the day he was compelled to sign the “contract.”

The monetary judgments Scientology obtained are punishment, the jail

46

 

sentences and fines are punishment, forcing Armstrong into bankruptcy is

punishment, and the “contract’s” clauses that he cannot but breach are

punishment. That Scientology’s punishing of Armstrong has not resulted in

his being silenced about Scientology and its punishment is no evidence

whatsoever that the punishment is not punishment.

In a wicked twist of logic, Scientology argues that because the law

does not permit liquidated damages to be punishment, the punishment that

its liquidated damages clause subjects Armstrong to cannot be punishment;

otherwise the liquidated damages would be punishment, which liquidated

damages cannot by law be.

The trial court erred in confusing cumulative judgments
exceeding $800,000 with punishment because, as a matter of
law, liquidated damages are not and cannot be punishment.
The trial court also had no authority to limit CSI's recovery
under the liquidated damages provision by characterizing it as
"unconscionable." A reasonable, enforceable liquidated
damages provision is, by definition, not unconscionable.

AOB, 11

Scientology is correct that liquidated damages cannot be

punishment. That Scientology’s liquidated damages clause acts as

punishment means it cannot be a lawfully enforceable contractual term. It

cannot possibly mean, as Scientology insists, that because the liquidated

damages clause is a liquidated damages clause the punishment it inflicts

cannot be punishment because the law does not permit liquidated damages

to be punishment.

Scientology’s argument that its liquidated damages provision cannot

now be unconscionable because Judge Thomas said in 1995 that it was

“reasonable” and “enforceable” is equally spurious. The import of the

liquidated damages provision now being adjudged unconscionable is that

Judge Thomas’ findings of reasonableness and enforceability were

erroneous. It would be ridiculous and result in a terribly unconscionable

47

 

result if unconscionable contract terms that shocked a judge’s conscience

with their one-sidedness and oppressiveness must nevertheless be enforced

because some other judge, whose conscience was not shocked by the one-

sidedness and oppressiveness, earlier ruled the terms were reasonable and

enforceable. Scientology in fact may not use Judge Thomas’ 1995

judgment to “prove” the “contract’s” conscionability because

unconscionability is determined from evidence as to the “contract’s”

commercial setting, purpose and effect at the time the “contract” was made,

December 1986.

Supporting Judge Duryee’s judgment, Los Angeles Superior Court

Judge Geernaert, who had inherited the first Scientology v. Armstrong case,

C 420153, after Judge Breckenridge retired, and to whom Scientology went

in 1991 to enforce its “contract,” before going to Marin County, obviously

had his conscience shocked, and stated in effect that Judge Breckenridge’s

conscience would also have been shocked by Scientology’s “contract.”

So my belief is Judge Breckenridge, being a very careful
judge....if he had been presented that whole agreement and if
he had been asked to order its performance, he would have
dug his feet in because that is one .... I'll say one of the most
ambiguous, one-sided agreements I have ever read. And I
would not have ordered the enforcement of hardly any of the
terms if I had been asked to, even on the threat that, okay the
case is not settled.
I know we like to settle cases. But we don't like to settle cases
and, in effect, prostrate the court system into making an order
which is not fair or in the public interest.

Transcript of 12/23/91 hearing, CT-A075027, 7700) Judge Duryee’s 2004

judgment of unconscionability is confirmation of Judge Geernaert’s 1991

ruling, and a strong indication that Judge Thomas’ 1995 order, as Judge

Geernaert warned, had prostrated the court system, was not fair, and not in

the public interest.

48

 

Scientology as much as admits the liquidated damages it seeks are

punishment in its writ petition.

Judge Duryee vacated the two prior sentences of contempt
previously issued by Judge Thomas in the Action, on the
ground that the new judgment in the Related Action for
$500,000 in compensatory damages (which Armstrong is
utterly incapable of paying) was punishment enough

Petition, 11. Armstrong is even more utterly incapable of paying

$10,050,000. But Scientology doesn’t want the money; it wants

punishment. Armstrong may be able to discharge the $500,000 in

bankruptcy, or the $10,050,000. But if liquidated damages are not limited,

Scientology can keep filing lawsuits, on which there is no limit, and

Armstrong, who cannot but breach Scientology’s “contract,” could not

discharge any monetary judgments by bankruptcy, because bankruptcy law

permits him to seek bankruptcy protection only every seven years.

Scientology would thus achieve the unlawful purpose of its liquidated

damages of punishing Armstrong into financial obliteration.

_______________

Armstrong’s arguments relating to unclean hands, free religious

exercise, criminal deprivation of rights, and arithmetic absurdities are

presented in his opposition to Scientology’s writ petition in Case No.

A107095 and incorporated herein by reference.

CONCLUSION

The terms in its “contract” that Scientology seeks to enforce have

been adjudged unconscionable. Scientology’s legal remedy is to submit to

a hearing prescribed by CCC §1670.5. Armstrong also requests such a

hearing for himself, which he is to be afforded.

Or, because of Scientology’s unclean hands herein, and because of

the grotesque unconscionability of its “contractual” terms, and their clear

violations of public policy, Armstrong’s civil rights, and U.S. criminal

49

 

statutes, this Court has the authority to act to declare those terms unlawful

and to prevent Scientology from any further judicial actions to enforce

these terms.

Dated: December 1, 2004

  Gerry Armstrong
Gerry Armstrong
#1-45950 Alexander Avenue
Chilliwack, B.C. V2P 1L5
Canada
604-703-1373
gerry@gerryarmstrong.org

 

 

CERTIFICATE OF LENGTH

Pursuant to Rule 14(c)(1) of the California Rules of Court,

respondent Gerry Armstrong certifies that the number of words in this brief,

according to the word count of the computer program used to prepare the

brief, is 13,999 words.

  Gerry Armstrong
Gerry Armstrong

50

 

PROOF OF SERVICE

           I am employed in the Province of British Columbia, Canada. I am over
the age of eighteen years and am not a party to the above-entitled action. My
business address is #1-45950 Alexander Avenue, Chilliwack, B.C. V2P 1L5.

           On December 1, 2004 I served the following documents:

RESPONDENT’S BRIEF and
RESPONDENT’S APPENDIX, VOLS, I, II, III & IV

on the following persons on the date set forth below, by placing true copies
thereof enclosed in sealed envelopes addressed as stated on the service list, as
follows:

XX By Mail I caused such envelope with postage thereon fully
prepaid to be placed in the Canadian mail at
Chilliwack, B.C., Canada.

Andrew H. Wilson, Esq.
Wilson Campilongo LLP
475 Gate 5 Road, Suite 212
Sausalito, CA 94965-1475
U.S.A.

Clerk of the Superior Court
Marin County Superior Court
3501 Civic Center Drive
San Rafael, CA 94913
U.S.A.
(Hon. Lynn Duryee)

California Supreme Court (5 copies of brief)
350 McAllister Street
San Francisco, CA 94102

          I declare under penalty of perjury under the laws of Canada, the United

States, and the State of California that the above is true and correct.

Executed on December 1, 2004 at Chilliwack, B.C., Canada


 

Caroline Letkeman
Caroline Letkeman
_________________________
(Signature)
   

 

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