Defendant's reply to motion to set an evidentiary hearing pursuant to CCC § 1670.5

CSI v. Gerald Armstrong, Robert Minton, Lisa McPherson Trust

Gerry Armstrong
#2-46298 Yale Road
Chilliwack, B.C. V2P 2P6
In Propria Persona






Case No.: CV 021632
Consolidated with Cases Nos. 15229 and 157680


Date: October 5, 2007
Time: 9:00 a.m.
Department L


Defendant Gerry Armstrong (“Armstrong”) respectfully submits that the opposition (“Opposition”) filed by Plaintiff Church of Scientology International (“Scientology”) provides no credible reason to deny Armstrong’s motion to set an evidentiary hearing pursuant to California Civil Code Section 1670.5(b) as to the commercial setting, purpose and effect of the contract Scientology seeks to enforce against Armstrong in this case to determine the unconscionability of certain of the contract’s clauses. This Court has already granted Scientology’s motion to reinstate jail sentences against Armstrong and to issue a warrant for his arrest; and he restates here his motion to this Court to stay the warrant and any other actions by Scientology against him until after such an evidentiary hearing has been held and this Court has made such a determination.


Armstrong identified in his motion the statute that provides the specific remedy in exactly this matter or kind of matter, C.C.C. § 1670.5 (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.

Armstrong identified where it apparently appeared to this Court that at least one clause of Scientology’s contract is unconscionable (the clause that punished Armstrong with limitless liquidated damages). (Motion, Memorandum 1:1-14) Armstrong also identified his own claim, and made that claim to this Court, that certain of the contract’s clauses are unconscionable. (See, e.g., Motion 2:7-9; Memorandum 1:18-20)

Scientology offers no alternative remedy to that provided by C.C.C. § 1670.5 (b) for the

circumstance arising in this case from this Court’s ruling, and Armstrong’s joint claim, that a clause or clauses in the contract Scientology seeks to enforce are unconscionable. (Opposition, 1:1-5:4)

Although Scientology terribly misstates what Armstrong is saying or claiming in his motion, and although Scientology does not acknowledge that Armstrong is claiming to this Court that certain clauses in the contract are unconscionable, Scientology does not show that Armstrong did not make the claim, or even deny that he made it. (Opposition, 1:1-5:4) On this basis alone, this Court should grant Armstrong’s motion.

In its opposition, while not addressing Armstrong’s claim that certain of its contract’s clauses are unconscionable, and that consequently he is to be afforded the reasonable evidentiary opportunity C.C.C. § 1670.5 (b) provides, Scientology addresses this Court’s findings respecting unconscionability, which have the same consequence, only to the extent of denying that these findings were ever made. Scientology does not show or claim that, if this Court had made the findings it made as Armstrong states, the remedy C.C.C. § 1670.5 (b) provides is not the proper remedy. Since this Court did make the findings with respect to unconscionability that Armstrong identifies in his motion, the proper remedy is the one provided by C.C.C. § 1670.5 (b).

The only mentions Scientology makes of C.C.C. § 1670.5 in its opposition to Armstrong’s motion for a hearing pursuant to this statute, are in the document caption and proof of service where Scientology misidentifies it as “CCP §1670.5” and in the first sentence where the section number is provided without even a code in which it’s a statute. Scientology has completely non-confronted the statutorily mandated remedy in this case and circumstance, which is not just Armstrong’s
remedy but Scientology’s remedy as well.



Scientology states:

Even if Armstrong retained the ability to address the merits, the central assertion of his Opposition (sic) is simply false. Armstrong claims that this Court found some aspect of the settlement agreement to be unconscionable, thus giving him, he asserts, the ability to re-argue the propriety of the settlement agreement. The Court made no such finding. (Opposition 4:13-16.

Armstrong is not asserting that this Court’s findings of unconscionability or the appearance of unconscionability give him “the ability to re-argue the propriety of the settlement agreement.” He is asserting that this Court’s findings, just as his own claims to this Court do, give him the right to be afforded a reasonable opportunity to present evidence as to the contract’s commercial setting, purpose and effect to aid this Court in making the determination as to certain clauses’ unconscionability.

Armstrong asserts moreover that this reasonable opportunity should be in the form of an evidentiary hearing on those three evidentiary areas for the purpose of identifying procedural and substantive unconscionability. It very well may be that after such a hearing this Court determines certain clauses to be improper, but Armstrong is not now arguing or re-arguing their impropriety. Armstrong has simply moved for an evidentiary hearing to aid the court in making the determination as to those certain clauses’ unconscionability.

Scientology states:

Rather, Armstrong illogically latches upon the Court's choice of words in finding that a"punishment" greater than $800,000 against Armstrong for violating the injunction would be "unconscionable" as this was the amount Armstrong received in the settlement agreement many years ago. That is certainly not a finding that the settlement agreement is unconscionable (Opposition 4:17-21)

Scientology is engaging in a ridiculous straw man argument, completely misrepresenting Armstrong’s position. With respect to liquidated damages, what this Court found to be unconscionable was the clause that permitted Scientology to punish Armstrong limitlessly and forever. This Court acted, as directed by C.C.C. § 1670.5 (a) to limit the application of that unconscionable clause as to avoid the obvious unconscionable result. If the contractual clause that permits Scientology to punish Armstrong with liquidated damages without limit is not and was never an actual contractual clause, as Scientology is now implying, then Scientology is acknowledging, essentially, colossal malicious prosecution in filing this case and the earlier cases for millions of dollars in liquidated damages, and gargantuan abuse of process in pursuing those millions and threatening Armstrong with them up to the Court of Appeal.

Having taken the position throughout these decades of litigation that the contract contains a clause that permits it to punish Armstrong limitlessly with liquidated damages, Scientology may not


now take the position that this clause does not exist. As Scientology itself observes, quoting from In re Marriage of Balcof (2006) 141 Cal.App.4th 1509,47 Cal.Rptr.3d 183, Joyce v. Simi Valley Unified School District (2003) 110 Cal.App.4th 292,304,1 Cal.Rptr.3d 712, 721-722 ("Litigants are not free to continually reinvent their position on legal issues that have been resolved against them by an appellate court.") Scientology voluntarily dismissed its appeal from this Court’s 2004 judgment that found that the clause, which exists, and which permitted Scientology to punish Armstrong without end with limitless liquidated damages, is unconscionable.

It is not necessary, or even rational that a trial court must find the complete subject contract in a case unconscionable before affording the parties the reasonable opportunity C.C.C. § 1670.5 (b) mandates. Scientology is riding a cart-before-the horse argument. All that C.C.C. § 1670.5 (b) requires is that it be claimed or appear to the court that any clause in the contract may be unconscionable, and the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose, and effect.

It also appeared that this Court also found that the clauses that prohibit Armstrong from uttering his religious experiences, knowledge or beliefs about the Scientology religion and the Scientology religious class beneficiaries while permitting Scientology and the beneficiaries to say anything horrible they want about Armstrong, and the clauses that permit Scientology to have Armstrong jailed and fined for uttering such utterances while Scientology and the beneficiaries may attack and pursue Armstrong, his loved ones, associates, friends, religious class and fellow wogs or human beings in order to goad him to make such utterances, may also be unconscionable.

This Court already acted, both at trial on April 9, 2004, and in its order re sentences of May 20, 2004, to limit the application of those clauses as to avoid unconscionable results. That the Court of Appeal reinstated the sentences against Armstrong is, in his motion for an evidentiary hearing pursuant to C.C.C. § 1670.5 (b), and in his right to be afforded a reasonable opportunity for such a hearing, irrelevant, except as that reinstatement of sentences is another unconscionable result or effect of application of the contract’s unconscionable clauses.


As Armstrong states in his opposition to Scientology’s motion to reinstate jail sentences and issue an arrest warrant, this Court also made findings at trial concerning certain of the contract’s clauses which constitute indicia of unconscionability. (Armstrong Opposition, 9:17-24)


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 law. (Declaration of Gerry Armstrong in Support of Motion (“GA Dec”) Ex. B, 56:12-17)

Liquidated damages have to be reasonable. I think it's unreasonable to go beyond the amount that was paid to Mr. Armstrong. (GA Dec Ex. B, 57: 21-23)

One of the remedies that Armstrong has under law is the remedy provided by C.C.C. § 1670.5 (b), which he has moved this Court to afford him.

The clauses in Scientology’s contract (GA Dec Ex. A) that Armstrong is claiming to this Court are unconscionable are:

1. Para. 7D, the clause requiring Armstrong to maintain strict confidentiality and silence;
2. Para. 7D, the clause penalizing Armstrong with liquidated damages of $50,000 per utterance;
3. Para. 7F, the clause prohibiting Armstrong from seeking Scientology religious services;
4. Para. 7G, the clause prohibiting Armstrong from voluntarily assisting or cooperating with persons adverse to the contract’s beneficiaries identified in para. 1 (the “beneficiaries”);
5. Para. 7G, the clause prohibiting Armstrong from cooperating with any organizations aligned against Scientology or the beneficiaries;
6. Para. 7H, the clause prohibiting Armstrong from voluntarily testifying or participating in judicial, administrative or legislative proceeding adverse to Scientology or the beneficiaries;
7. Para. 7I, the clause prohibiting use of evidence in litigation;
8. Para. 10, the clause prohibiting Armstrong from assisting or advising individuals, partnerships, associations, corporations, or governmental agencies contemplating any claim or engaged in litigation or involved in or contemplating any activity adverse to Scientology or the beneficiaries.

All of these clauses are one-sided, and their effects, including the injunction by which Scientology wants Armstrong to be jailed and fined and punished without limit until death, are all one-sided, unfair, harsh, oppressive, and without justification, and all of these qualities are judicially used descriptors of unconscionability. 7. Para. 7I is in function one-sided because Armstrong is the only party who would want to use the prohibited evidence, as he must do here in the evidentiary hearing he seeks. Because of the nature and purpose of the contract and the entity that seeks to enforce it, clauses that Armstrong contends are unconscionable grow more unconscionable through time. The more horrible things
Scientology and the beneficiaries say about Armstrong, or his loved ones, friends, associates, class and fellows, and threaten and punish him if he responds to defend himself or Scientology’s other wog or human targets, the more unconscionable the clause that permits such sociopathic unfairness becomes. The unconscionable clauses in Scientology’s contract act, unconscionably, as an incentive to the people who run Scientology to do ever more unconscionableness.


Armstrong has not illogically latched upon the Court's choice of words in its finding that the limitless clause or catch in the liquidated damages provision was “unconscionable.” The record shows that this Court chose its words, and this word, very carefully, and could only by law have chosen this word if this Court’s very conscience had been shocked by the contract or its terms. Scientology has not shown that this Court’s conscience was not shocked, or even attempted to show it. It would have been illogical if Armstrong had not grasped this Court’s words and not sought the relief from Scientology’s persecution that a finding, or appearance, or claim, of unconscionability that C.C.C. § 1670.5, the “unconscionability statute,” offers him. Contractual unconscionability, which C.C.C. § 1670.5 addresses and operates to remedy, has been analyzed in several appellate opinions; e.g., American Software, Inc. v. Ali (1996) 46 Cal. App. 4th 1386; 54 Cal. Rptr. 2d 477:

In 1979, our Legislature enacted Civil Code section 1670.5, which codified the established doctrine that a court can refuse to enforce an unconscionable provision in a contract. 1 (For a review of the legislative history of Civ. Code, § 1670.5, see IMO Development Corp. v. Dow Corning Corp. (1982) 135 Cal. App. 3d 451, 459-460 [185 Cal. Rptr. 341].) While the term “unconscionability” is not defined by statute, the official comment explains the term as follows: “The basic test is whether, in the light of the general background and the needs of the particular case, the clauses involved are so one-sided as to be unconscionable under the circumstances existing at the time of the making of the contract. . . . The principle is one of the prevention of oppression and unfair surprise [citation] and not of disturbance of allocation of risks because of superior bargaining power.” [Citation]

Most California cases analyze unconscionability as having two separate elements-- procedural and substantive. 2 [Citation] Substantive unconscionability focuses on the actual terms of the agreement, while procedural unconscionability focuses on the manner in which the contract was negotiated and the circumstances of the parties. California courts generally require a showing of both procedural and substantive unconscionability at the time the contract was made. [Citation] Some courts have indicated that a sliding scale applies--for example, a contract with extraordinarily oppressive substantive terms will require less in the way of procedural unconscionability. [Citation]

Indicia of procedural unconscionability include “oppression, arising from inequality of bargaining power and the absence of real negotiation or a meaningful choice” and “surprise, resulting from hiding the disputed term in a prolix document.” [Citation] Substantive unconscionability is indicated by contract terms so one-sided as to “shock the conscience.” [Citation]

The clauses involved here in Scientology’s contract are provably so one-sided as to be unconscionable under the circumstances existing at the time of the making of the contract. Twenty years of provable unjustified oppression has resulted. There was no negotiation – zero – and Armstrong was permitted none. It was presented to him as a contract of adhesion – take it or everyone is fair game and


you’ll be responsible – and legally unenforceable – “it’s not worth the paper it’s printed on.” Given this Court’s unconscionability finding, it may be possible now to understand why there was no negotiation, and why Armstrong yet signed Scientology’s contract. His own attorney Michael J. Flynn, who was also his employer and friend, told him what he already knew upon reading the contract: that the clauses Armstrong has identified above as unconscionable were exactly that, unconscionable. Mr. Flynn used the word “unenforceable” to describe these clauses, but Armstrong understood that it was their conscience-shocking impossibility, oppression, unreasonableness, unfairness, inhumanity and indeed obscenity, that made them unenforceable. Armstrong’s conscience was shocked when he read Scientology’s contract, which to add to the shock was sprung on him by surprise, and his conscience has continued to be shocked by the contract and Scientology’s unconscionable threats and efforts to enforce it every day since. For Armstrong there was no meaningful choice.

From Bolter v. Superior Court (Harris Research, Inc.) (2001) 87 Cal. App. 4th 900; 104 Cal. Rptr. 2d 888:

The procedural element focuses on the unequal bargaining positions and hidden terms common in the context of adhesion contracts. [Citation] While courts have defined the substantive element in various ways, it traditionally involves contract terms that are so one-sided as to ‘shock the conscience,’ or that impose harsh or oppressive terms. [Citation]

Both elements need not be present to the same degree. “The more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” [Citation] Additionally, a “claim of unconscionability often cannot be determined merely by examining the face of a contract, but will require inquiry into its [commercial] setting,
purpose, and effect.” [Citation]

Thus, “unconscionability analysis begins with an inquiry into whether the contract is one of adhesion. [Citation] ‘The term [contract of adhesion] signifies a standardized contract, which, imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it.’ [Citation]

Scientology imposed and drafted the contract. The relative bargaining strengths of Armstrong and Scientology are obvious, and like a butterfly to a herd of bucking goats. That Judge Thomas didn’t acknowledge this clear disparity of bargaining strengths is unconscionable, but this can be corrected or its unconscionable results terminated with the evidentiary hearing pursuant to C.C.C. § 1670.5, which, as Bolter, supra reinforces, inquires into the contract’s commercial setting, purpose and effect. Just the list of the corporate Scientology organizations, entities and individuals that in 1986 comprised the contract’s beneficiaries shows millions of times Armstrong’s bargaining strength. (GA Dec Ex. A, p. 1,


para. 1) The commercial setting includes the joint settlement of the cases or claims of some twenty clients of Mr. Flynn, who was, like Armstrong, a major Scientology target, and who had his own cases and claims against Scientology, and overarching conflicts of interest.


Scientology states:

Armstrong's continuing efforts to re-litigate matters already adjudicated are frivolous, and destroy the time of the Court and parties alike. The motion should be rejected and Armstrong censured. ¶ Armstrong has repeatedly lost on the merits of the issues he raises. [ ] Thus, it is the law of the case that the issues Armstrong again raises, are res judicata, and may not be litigated again. (Opposition 1-21-2-6)

The matter of the unconscionability of Scientology’s contract has never been adjudicated. Scientology is asking this Court to censure Armstrong for Scientology’s own straw frivolousness. Scientology points to no such adjudication, and none exists. Scientology’s assertion that Armstrong is trying to re-litigate this matter is false. Whatever litigation or adjudication has occurred in this case over the years, it was not the opportunity for Armstrong to be heard that C.C.C. § 1670.5 affords him and the adjudication of unconscionability or not after such hearing.

The remedy is eminently fair. Scientology also gets to present evidence as to the contract’s commercial setting, purpose and effect to aid this Court in making the determination, which Scientology suggests it already possesses but does not, that the clauses Armstrong claims are unconscionable are not unconscionable. There has been no such determination as the result of the kind of judicial testing and analysis that the cases on unconscionability cited above show is expected in California courts.

Armstrong has not only not repeatedly lost on the merits of the issue he raises, to wit, the unconscionability of the eight clauses identified above, Armstrong has never lost on the merits of the issue. The only way he can lose on the merits of the issue is if he is afforded the opportunity to be heard that C.C.C. § 1670.5 affords him and this Court determines after such a [fair] hearing that those clauses are not unconscionable. The law of the case now includes the judgment that Scientology’s limitless liquidated damages clause is unconscionable. That judgment merits a full and fair hearing on the contract’s commercial setting, purpose and effect to determine any other clauses’ unconscionability. That hearing has never occurred; and res judicata cannot lawfully be employed to stop it from occurring.

From Black's Law Dictionary, Fifth Edition (1979):

Res judicata [ ] A matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by judgment. Rule that a final judgment rendered by a court of competent jurisdiction on the merits is conclusive as to the rights of the parties and their privies, and, as to them, constitutes an absolute bar to a subsequent action involving the same claim,


demand or cause of action. [Citation] And to be applicable, requires identity in thing sued for as well as identity of cause of action, of persons and parties to action, and of quality in persons for or against whom claim is made. The sum and substance of the whole rule is that a matter once judicially decided is finally decided. [Citation]

Myriad California cases state the same principle; e.g., J.R. Norton Company v. Agricultural Labor Relations Board (UFWA, AFL-CIO) 192 Cal.App. 3d 874; 238 Cal.Rptr. 87; 1987:

Res judicata effect will be given only to those matters which were directly in issue and in fact decided. (Code Civ. Proc., § 1911; County of L.A. v. Continental Corp. (1952) 113 Cal.App.2d 207, 219 [248 P.2d 157].)

Scientology points to Armstrong’s effort over many years to put before one court or another the evidence of substantive and procedural unconscionability that would shock their consciences. He achieved that, essentially, in 1991 in Los Angeles Superior Court with Judge Geernaert.

I'll say one of the most ambiguous, one-sided agreements that I have ever read. And I would have not 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.GA Dec, Ex. L.

Scientology simply commenced a new action to enforce its unconscionable clauses in Marin County, where Judge Thomas’ conscience was for whatever reason not shocked. Armstrong contends that, tragically, Judge Thomas, moreover, acted improperly to facilitate the unconscionable results Scientology sought.1 Scientology quotes from Armstrong’s Answer dated July 21, 1992 (Opposition Ex. A.), in which Armstrong pled unconscionability as an affirmative defense, to support the assertion that all the central issues regarding enforceability of the contract had been litigated and adjudicated. (Opposition 2:18-22) It is true that unconscionability was in issue, but it was not in fact or truth decided. Therefore, res judicata effect must not be given to this matter to prevent Armstrong from being afforded the reasonable [and fair] opportunity C.C.C. § 1670.5 (b) mandates so that he can have it decided.

The Court of Appeal did not rule that the contract’s clauses are not unconscionable, and did not bar Armstrong from being afforded the opportunity or hearing he is seeking. The Court of Appeal stated only that he “is foreclosed from challenging the merits of the contempt orders in this writ proceeding.”
1 The “Order of Summary Judgment as to the 13th, 16th, 17th and 19th Causes of Action,” (Opposition, Ex. B) that Judge Thomas signed states: “Defendant’s evidence does not raise an inference that plaintiff’s calculation [of liquidated damages] is “unfathomable” (Fourteenth cause of action seeks $50,000 for each of 18 letters.” This is $900,000 for a single letter. (Ex. A hereto) This Court has since adjudged that sum, and by rational necessity the clause that permitted it, unconscionable. Judge Thomas also ordered Armstrong jailed and fined (the first contempt) for reporting to a U.S. District Court Judge in a case in which Armstrong had been subpoenaed that Scientology had threatened him with enforcement of Judge Thomas’ injunction if Armstrong obeyed the subpoena. Scientology then used Judge Thomas’ improper sentence to get Armstrong’s appeal from Judge Thomas’ injunction dismissed. (Opposition 3:3, Ex. D)


Opposition Ex. E, p.6) The Court of Appeal did not say that this Court, unique among all the other Courts of California, is barred from policing its cases for unconscionable contracts, or, contracts’ unconscionable clauses, or barred from having its conscience shocked.


This Court has now done what the Court of Appeal directed in its October 19, 2005 order. Additionally, this Court has granted Scientology’s motion to issue a new bench warrant for Armstrong's arrest. This Court can now, in the interest of justice, stay the warrant and be in full compliance with the Court of Appeal’s order. At trial in April 2004, this Court stayed the warrants, which issued from the same sentences that have now been reinstated, until a hearing on their validity occurred, and Scientology’s attorney agreed. It is now no less proper and just to stay the new warrant.

THE COURT: Well, so what occurs to me is to stay the warrants, to set them for a
hearing at the end of this case.
MR. GREENE: That would be great.
THE COURT: So there's not a concern about his being taken into custody, but we have a
hearing date on the validity of them and the sentencing on the third contempt.
MR. WILSON: That's fine. (Ex. B hereto, p. 6)

The Court of Appeal did not say that this Court is barred from staying any proceedings or actions before it if not staying them would yield a potentially unconscionable result, as it would here, or for any other reason. The evidentiary hearing that Armstrong seeks is not specifically a hearing on the validity of the contempt orders, although potentially these orders could be invalidated if the clauses from which they result are found to be unconscionable, and unenforceable, after such evidentiary hearing.


There has been no ruling on the issues of procedural unconscionability, substantive unconscionability, the commercial setting between the parties in December 1986, what really was the contract’s purpose, and what has been its effect. Because this never happened, because there has been no fair trial or hearing, there are twenty years of effect, much of it, Armstrong contends, unconscionable, on which evidence can be presented. If Scientology were really not trying to achieve the unconscionable it would welcome an evidentiary hearing that would get to the truth in what Armstrong is claiming.

Scientology has not shown any lawful reason to deny Armstrong’s motion to set an evidentiary hearing pursuant to C.C.C. § 1670.5(b) and to stay the warrant for his arrest until after such an evidentiary hearing, and his motion should be granted.

Dated: September 27, 2007

Gerry Armstrong

Respectfully submitted,
Gerry Armstrong



I am over the age of eighteen years and am not a party to the within action. My business address is #2-46298 Yale Road, Chilliwack, B.C. V2P 2P6 Canada

I served the following document:


on the following person on the date set forth below, by UPS Overnight Courier to the addressee below:

Kendrick L. Moxon, Esquire
Moxon & Kobrin
3055 Wilshire Blvd., Suite 900
Los Angeles, CA 90010

and by e-mail to:

I declare under penalty of perjury under the laws of California, the United States and Canada

that the above is true and correct.

Executed on September 27, 2007 at Chilliwack, B.C., Canada.

Caroline Letkeman
Caroline Letkeman