CONTOS & BUNCH 5855 Topanga Canyon Boulevard Suite 400 Woodland Hills, California 91367-4694 Telephone (818) 716-9400 Attorneys for Defendant and Cross-Complainant GERALD ARMSTRONG

[stamped] ORIGINAL FILED NOV 5 - 1986 COUNTY CLERK

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

CHURCH OF SCIENTOLOGY OF CALIFORNIA, a California Corporation; Plaintiff, vs. GERALD ARMSTRONG, et al., Defendants. AND RELATED CROSS-ACTIONS

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No. C 420 153 [Severed Action] OPPOSITION OF CROSS-COMPLAINANT GERALD ARMSTRONG TO MOTION FOR SUMMARY ADJUDICATION OF ISSUES;  MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF; DECLARATION OF GERALD ARMSTRONG DATE: November 19, 1986 TIME: 9:00 a.m. DEPT: 57

COMES NOW, cross-complainant Gerald Armstrong, and submits the following Memorandum in opposition to the Motion for Summary Adjudication of Cross-Defendant Church of Scientology of California:
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I

THE FIRST CAUSE OF ACTION FOR FRAUD IS NOT BARRED BY THE STATUTE OF LIMITATIONS

Cross-defendant contends that Armstrong’s fraud allegation as to the confidentiality of auditing and the “religious” status of Scientology are barred by the three year statute of limitations. Cross-defendant,  however, has taken a “blinders” approach in its argument, choosing to look at a few statements of Armstrong and avoiding all other evidence.

If the court looks at the entire picture, it is clear that Armstrong could not have brought suit prior to the time he left Scientology in December 1981, and that his cause of action is therefore not barred by the three year statute.

A. THE ALLEGATIONS REGARDING CONFIDENTIALITY OF AUDITING INFORMATION ARE NOT BARRED BY THE STATUTE OF LIMITATIONS.

Cross-defendant’s argument is based solely on Armstrong’s “admissions against interest” as contained in his answers to interrogatories served in 1983 (See Exhibit “A” to Motion, Interrogatory No. 16.)

Although Armstrong discovered, while he was in the organization, that auditing folders were culled for “crimes,” he was mentally incapable of taking any action.

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Cross-defendant omits from its citation of Armstrong’s answers to interrogatories (See Exhibit “A” to Motion), those portions of his answers wherein he describes his broken will, his inability to control his own life, his complete manipulation by the Organization, his feelings of terror and the system of control and deprivation that was exerted over him. (See Declaration of Gerald Armstrong filed herewith, p. 9-12, paragraph 8- 9.)

At that time and until he left the Organization in 1981, Armstrong was wholly incapable of action against the organization for a number of reasons.

First, as a member of Scientology, Armstrong was made to sign waivers, non-disclosure and release bonds, as well as staff contracts containing promises to forbear from litigation. Attached hereto as Exhibit [M] is a Nondisclosure and Release bond signed by Armstrong on March 18, 1977. At page 2 of Exhibit “M” it states:

“. . . he/she (Obligor) will never disclose any information, data, or knowledge he/she has or will learn about the organization of the church, or any of the church’s affiliated churches, missions, or organizations, including but not limited to their internal structures, functions or activities, and certain information which may be

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orally imparted to the Obligor in the course of his/her having been a staff member of the Church.” In the event of a disclosure, the obligor promises to pay $10,000 to “the Church.”

At trial of the complainant in this case, Armstrong testified that he was ordered to sign several of such documents while he was in the RPF (Rehabilitation Project Force - the Scientology prison). At the time, he was under a form of mind control sufficient to make him sign virtually any document. Although the document was not explained to him, he had heard that he would be obligated to pay $10,000 if he disclosed any information, data or knowledge about Scientology. (A copy of said trial testimony of May 10, 1984, p. 1465-1466 is attached hereto as Exhibit [N]).

Second, as explained by Armstrong in his answers to interrogatories, he was in the RPF from July 1, 1976 to
December 1, 1977, where he was “humiliated, degraded, terrorized and defrauded” to the extent that he “lost self respect and rationality.” (See Exhibit “A” to Motion, p. 23).

It was during the years 1976 and 1977 that Armstrong was forced to participate in culling of auditing folders. However, because of his fear of reprisal, his desire to believe in the good of the Organization, his total manipulation by the system of reporting “overts” or critical thoughts, and his understanding that he was responsible for

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payment of $10,000 as the result of a disclosure, Armstrong was incapable of action. This incapability was the direct result of the action and policies of cross-defendant.

The organization adhered to a strict system of “ethics” and punishment. This is evidenced by a number of
Hubbard’s policies, one of which is particularly applicable here.

Policy Letter of 23 December 1965 entitled Suppressive Acts; Suppression of Scientology and Scientologists; The Fair Game Law, lists various “suppressive” acts for which an individual becomes “Fair Game.” Among those are:

“. . . testifying hostilely before state or public inquiries into Scientology. . . reporting or threatening to report Scientology or Scientologists to civil authorities . . . bringing civil suit against any Scientology organization or Scientologist . . . testifying as a hostile witness against Scientology in public.” (A copy of said Policy Letter is attached hereto as Exhibit “O.” See p. 553.)

Armstrong was aware of this policy, and it added to his fear that the organization would use Fair Game for any his fear that the organization would use Fair Game for any

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activity involving litigation. Direct evidence that Scientology practiced its Fair Game policy against litigants and critics, is shown by the treatment to which Armstrong was and is subjected since the filing of his cross-complaint.

Third, in staff contracts which Scientology members are forced to sign, the organization routinely includes the following language:

“. . . I recognize, understand and agree that in consideration for the Church permitting me to become an active participant pursuant to this declaration, I shall not commence any action or assert any claim against either or both of them (L. Ron Hubbard or Mary Sue Hubbard), their heirs, successors, or assigns, based on any matter arising out of or in connection with the Church . . .” (See Declaration of Religious Commitment and Application for Active Participation on Church Staff, attached hereto as Exhibit [P], p. 3.)

There is no question but that the intimidation tactics used by the Organization to control and manipulate

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activity involving litigation. Direct evidence that Scientology practiced its Fair Game policy against litigants and critics, is shown by the treatment to which Armstrong was and is subjected since the filing of his cross complaint.

Third, in staff contracts which Scientology members are forced to sign, the organization routinely includes the following language:

“. . . I recognize, understand and agree that in consideration for the Church permitting me to become an active participant pursuant to this declaration, I shall not commence any action or assert any claim against either or both of them (L. Ron Hubbard or Mary Sue Hubbard), their heirs, successors, or assigns, based on any matter arising out of or in connection with the Church . . .” (See Declaration of Religious Commitment and Application for Active Participation on Church Staff, attached hereto as [P] , p. 3.)

There is no question but that the intimidation tactics used by the Organization to control and manipulate

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members include the representations that one cannot sue the Organization or the Hubbards for fear of the Fair Game doctrine. It is in this climate and pursuant to these policies that Armstrong became mindless,  following the directives and orders of superiors, incapable of rational choice.

Mind control was the basis for reversal of the dismissal of a complaint for personal injury on statute of limitations grounds in Roney v Siri Singh Sahib Harbhajan Singh Yogi, 103 N.M. 89, 703 P.2d 186 (1985) (A copy of the opinion is attached as Exhibit [Q].)

Roney involved a woman who, as a member of the Sikh Dharma Brotherhood, underwent a tubal ligation rendering her sterile. She was told that her problems were centered on her ovaries which had to be removed. It was not until a year and a half after she left the Sikhs that she regained her “free will and comprehension” allowing her to file suit.

Id. at 188. By that time, the three year statute of limitations had expired. In reversing the trial court’s dismissal of the complaint, the Court of Appeals of New Mexico held:

“Because she alleges that the continuation of her ‘lack of free will and comprehension’ was a direct and proximate result of defendants’ mind and body control techniques, she is, in effect, also alleging

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that she could not have reasonably known her cause of action within the statutory period.” Id. at 188.

Although Roney was venued in New Mexico, Armstrong cites it here because of the striking analogy to the circumstances of his mind control by Scientology. Like the plaintiff in Roney, Armstrong did not  reasonably” know his causes of action until he left the Organization in 1981 because he was bereft of his free will. Until then, he labored under the false representations and mind control tactics of cross-defendant and Hubbard, incapable of rational thought.

His failure to act upon his causes of action is a direct result of the intimidating, harassive and wrongful conduct he underwent while a member of cross-defendant. Cross-Defendant should not now be allowed to assert the statute of limitations bar where the delay in filing suit was a direct result of cross-defendant’s  intimidation and manipulation of Armstrong.

In that regard, although cross-defendant argues that Armstrong should have investigated the misrepresentations with respect to the confidentiality of auditing, it was cross-defendant who prevented Armstrong from doing so through the conduct outlined above and described more fully, infra, under subsection B.

Thus, the case of Miller v. Bechtel Corp. (1983) 33 Cal.3d 868, 191 Cal.Rptr. 619 cited by cross-defendant is

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not applicable. In Miller, plaintiff failed to investigate her cause of action where she had every opportunity to do so and was in contact with her attorney. Clearly, the circumstances of this case are far from what occurred in Miller.

B. CROSS-DEFENDANT MUST BE ESTOPPED FROM ASSERTING A STATUTE OF LIMITATIONS DEFENSE IN THAT CROSS-DEFENDANT INDUCED THE DELAY THROUGH ITS OWN WRONGFUL CONDUCT.

As set forth in Armstrong’s answer to Interrogatory No., propounded by cross-defendant, Armstrong lived under tremendous intimidation tactics designed to destroy his will. 16 (See Exhibit “A” to motion, pp. 21-30.) In 1976, he was locked up and maintained under guard for three weeks by the G.O., during which time he was forced to write up lists of his “crimes”. He was then sent to the RPF in 1976 where he remained for seventeen months. In the RPF he was humiliated, degraded and terrorized by being treated like a criminal and denied access to all outside contact. He was forced to work for long hours without sufficient rest or sleep.

Armstrong saw those who asked to leave the RPF locked up and abused, forced to sign lists of “crimes”. He also signed a number of non-disclosure and release bonds promising not to divulge activities of Scientology. In 1978, Armstrong was again assigned to the RPF, where he remained through the spring of 1979. During this time, he was forced to do manual labor for sixteen hours per

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day over several months and was paid less than $9.00 per week. Armstrong slept in cramped conditions and ate only leftover food. He was punished, deprived of contact with the outside world and completely manipulated and controlled.

It was in this atmosphere that Armstrong was forced to participate in the culling of auditing folders and forced to allow his own folders to be culled.

Based upon the harsh treatment and punishments meted out for “crimes,” based upon the non-disclosure and release bonds he signed and based upon the written policies of the Organization dealing with suppressive persons, Armstrong could not act as a reasonable person. His will had been broken and his rational thought gone.

It was not until 1981, when he began reviewing voluminous documents on the life of Hubbard that he slowly came to his senses, culminating in his departure from Scientology in December 1981.

As a result of the threats, physical and emotional abuse, and intimidation incurred by  Armstrong at the hands of cross-defendant, he was prevented from bringing suit. Clear issues and questions of fact arise which would make summary judgment inappropriate.

California case law supports the proposition that a defendant may be estopped to plead the statute of limitations where the defendant induced the plaintiff by fraud, misrepresentations or deception from filing a timely action. Moss v. Underwriters Report (1938) 12 Ca1.2d 266, 83 P.2d 503. The estoppel doctrine is one founded in equity where

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it is stated that “no man may take advantage of his own wrong.” Glus v. Brooklyn Eastern District Terminal (1979) 359 U.S. 231, 3 L.Ed. 2d 770, 79 S.Ct. 760. The court in Glus further observed that the principle of estoppel has been applied in many cases of both law and equity to bar an inequitable reliance on the statute of limitation.

The purpose of the statute of limitations is to provide repose and protect persons against the burden of having to defend against stale claims. Wyatt v. Union Mortgage Co. (1979) 157 Ca1.Rptr. 392, 598 P.2d 45. Here there is no need to protect the cross-defendant since it is the very culprit who fraudulently induced Armstrong from bringing suit. Moreover, the threats and intimidations continued even after Armstrong left the Organization when it labelled Armstrong a “Suppressive Person” and sent private investigators to his house to harass him and his wife, when it surreptitiously and unlawfully videotaped him in 1984 and when it continued to reveal portions of his auditing files, among other things.

In Wyatt, supra, the court held that:

“Just as the statute of limitations does not run against an action based on fraud so long as fraud remains concealed, so ought the statute to be tolled even after fraud is discovered, for so long as sheer economic duress or undue influence

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embedded in fraud continues to hold the victim in place.”

It is clear from Armstrong’s declaration and answers to interrogatories that the fear and harassment continues to date and is heightened by the fact that cross-defendant has made blatant “revelations” from Armstrong’s auditing folders, failing to advise the court that the majority of the “revelations” never occurred. This has caused Armstrong extreme emotional distress.

Armstrong has established sufficient facts to show that he was prevented from filing suit in this case because of intimidating, threatening and coercive behavior of the cross-defendant. Thus cross-defendant should be barred from now taking advantage of its tortious conduct:

“A plaintiff’s right to relief in cases of fraud and deceit is not dependent upon technical legal definitions. The defendant, having by fraud and deceit concealed material facts and by misrepresentations hindered the plaintiff from bringing an action within the statutory period is estopped from taking advantage of his own wrong.

The statute of limitations was intended as a shield for the

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defendant’s protection against stale claims, but he may not use it to perpetuate a fraud upon a diligent plaintiff.” Pashley v. Pacific Electric Co. (1944) 25 Ca1.2d 226,153 P.2d 325.

C. CROSS-DEFENDANT CONTINUES TO VIOLATE ITS REPRESENTATION THAT AUDITING FILES ARE CONFIDENTIAL.

In the face of strenuous arguments made over the past four years in this case that auding files are confidential, cross-defendant allowed its attorneys to review, copy and index Armstrong’s auditing files. Cross-Defendant also filed a document with the court wherein cross-defendant allegedly cites incidents taken from the folders. (Armstrong declaration, pp. 1-2, paragraphs 3-4.)

Armstrong asked for the folders through discovery to see whether they had been culled as he believes they were. He did not ask for them so the contents could be published by cross-defendant. There is no question that his folders contain personal information. However, in its own twisted way, cross-defendant, the “protector” of auditing “sanctity,” has taken the liberty of allegedly revealing portions of the folders in a court filing. (Armstrong declaration, pp. 5-7, paragraph 6.)

Another example of this continuing fraud is found in the admissions contained in the B-1 materials produced by

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cross-defendant. The B-1 file shows conclusively that Armstrong’s auditing folders were culled after he left the Organization in 1981. Armstrong did not learn of this culling until the B-1 materials were made available to him in 1985 during his testimony in the Christofferson case. (Armstrong declaration, p. 7-9, paragraph 7.)

Armstrong never knew of the existence of B-1 files kept on individuals while he was in Scientology. (See Exhibit “A” to Motion, p. 29, lines 17-20.) He also had no knowledge of the existence of GO 121669, the policy regarding culling of auditing files (See Exhibit “A” to motion, p. 9, lines 14-19). He discovered these matters only after he left the Organization in 1981.

Scientology continued its fraudulent conduct toward him after he left as evidenced by the  information contained in his B-1 file and in the court filing of alleged excerpts from his auditing folder.

As long as cross-defendant continues to commit such wrongful acts against Armstrong, his causes of action for fraud, emotional distress, and breach of contract will not accrue. Wyatt v. Union Mortgage Co. (1979) 24 Cal.3d 773, 157 Cal.Rptr. 392, 598 P.2d 45.

D. THE FRAUD CAUSE OF ACTION CONTAINS NO ALLEGATIONS OF “RELIGIOUS STATUS”

Cross-defendant argues that Armstrong was “aware” of the “Church’s scientific, non-religious status by September, 1975.” This argument makes no sense in that

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Armstrong has never alleged that Scientology was a religion. To the contrary, Armstrong has alleged that  Scientology held itself out as a scientifically guaranteed process, designed to cure all the ills and problems known to man. It is this representation which Armstrong believes is fraudulent. The testimony cited by cross-defendant in its Motion coincides with Armstrong’s allegations. (See Motion, p. 13.) Armstrong testified that he joined Scientology on the basis of the representation that Scientology was the “science of knowing how to know,” and not on the basis of any representation that it was a religion. In fact, his testimony clearly states that the “religious” cloak of Scientology was just a “cover.” Thus, cross-defendant’s arguments make no sense.

E. THE STATUTE OF LIMITATIONS DOES NOT BAR ALLEGATIONS REGARDING THE BENEFITS OF AUDITING BECAUSE THE MISREPRESENTATIONS WERE CONTINUING IN NATURE.

Once again, cross-defendant tells only part of the story when it argues that Armstrong had doubts as to the “workability” of Scientology in November 1969.

Pursuant to the Declaration of Gerald Armstrong filed herewith, cross-defendant used a “bait and switch” approach when making representations regarding the benefits of auditing. (Armstrong Declaration, p. 14, ln. 5-16.)

When Armstrong felt the auditing he was receiving did not resolve problems, he was told that the resolution would

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occur at the level of “Clear.” When it did not occur at the level of “Clear,” he was told it would occur at the level of “OT III.”

That is the typical tactic used by cross-defendant to maintain control over and manipulate the will of members. It is the proverbial “dangling carrot” that will be reached with just a little more auditing and money.

Of course, it must be kept in mind that Armstrong was always laboring under fear of reprisal or punishment for any “overt” or critical thought regarding Scientology, the Scientology process or the Hubbards. Thus, he was incapable of investigating the “unworkability” of auditing.

It was only until a stroke of good fortune befell him and he became Hubbard Archivist that he was slowly able to piece together a picture of a fraud so massive that it brought him back to rational thought and compelled him to leave Scientology. He could never have performed this investigation without the permission given to him by L. Ron Hubbard following Armstrong’s discovery of archive documents.

Clearly, questions of fact exist as to the “bait and switch” techniques used by cross-defendant to force individuals into continuing the auditing process. Additional questions of fact exist as to the system of  ethics and punishment used by cross-defendant to drive members into submission, taking from them their free and rational thought.

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II

THE SECOND CAUSE OF ACTION FOR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS IS NOT PARTIALLY BARRED BY THE STATUTE OF LIMITATIONS

Cross-Defendant makes the same argument as to the second cause of action that it set forth with respect to the first cause of action for fraud. Cross-Defendant seeks to bar those allegations of the second cause of action regarding the violation of auditing confidentiality allegedly known to Armstrong by 1977.

Armstrong thus incorporates by reference all of the arguments made under Section I of this opposition, supra.

III

THE FOURTH CAUSE OF ACTION FOR BREACH OF CONTRACT IS NOT PARTIALLY  BARRED BY THE STATUTE OF LIMITATIONS

Again, cross-defendant makes the same argument as contained under the arguments for the first cause of action for fraud. Cross-Defendant seeks summary adjudication as to the allegations regarding the benefits of auditing, the status of Scientology and the confidentiality of auditing folders.

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Armstrong thus incorporates by reference all of the arguments made under Section I of this opposition, supra.

IV

CONCLUSION

Based upon the foregoing, it is respectfully submitted that numerous questions of fact exist as to the treatment of Armstrong by the Organization in the form of punishment, intimidation, threats and  harassment; the resulting state of Armstrong’s mind and his inability to function as a reasonably prudent or rational person; the written policies of the organization linking suppressive acts to litigation and the resulting punishments therefor; the effect of the non-disclosure and release bonds as well as the arguments to forbear from litigation; and the general attitude of cross-defendant to anyone slightly critical of Scientology or Hubbard to have committed “crimes” and “overts,” with its attendant effect on Armstrong and his inability to file suit.

Additionally, there are the continuing acts of cross-defendant in violating the confidentiality of auditing folders which it has so vehemently maintained are sacrosanct, and the continuing tortious conduct of cross-defendant in harassing Armstrong and intentionally causing him emotional distress.

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It is thus respectfully requested that the motion for summary adjudication be denied.

DATED: November 5 , 1986

CONTOS & BUNCH By: [signed] JULIA DRAGOJEVIC Attorneys for Defendant and Cross-Complainant GERALD ARMSTRONG

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Exhibit [M] Non-disclosure and Release Bond [.pdf]

Exhibit [N] Transcript re Bond May 10, 1984

Exhibit [P] Cult Employee Contract [.pdf]

Exhibit [Q] 103 N.M. 89, 703 P.2d 186 (1985) [.pdf]