Gerry Armstrong--Verified Complaint 152229

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[CT] 1

Andrew H. Wilson
WILSON, RYAN & CAMPILONGO
235 Montgomery Street
Suite 450
San Francisco, California 94104
(415) 391-3900

Laurie J. Bartilson
BOWLES & MOXON
6255 Sunset Boulevard
Suite 2000
Hollywood, California 90028
(213) 661-4030

Attorneys for Plaintiff
CHURCH OF SCIENTOLOGY INTERNATIONAL

[stamps:] FILED
FEB - 4 1992
HOWARD HANSON
MARIN COUNTY CLERK
by P.Fan, Deputy
FILED
APR 13 1992
JAMES H. DEMPSEY, CLERK
Nelly Au
BY NELLY AU, DEPUTY
Case Assigned To
JUDGE DAVID HOROWITZ
BC052395
FILED
NOV 16 1994
HOWARD HANSON
MARIN COUNTY CLERK

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF MARIN

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

Plaintiff,

vs.

GERALD ARMSTRONG; DOES 1
through 25, inclusive,

Defendants.

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Case No. [stamp] 152229 [HW 157680]

VERIFIED COMPLAINT FOR
DAMAGES AND FOR
PRELIMINARY AND PERMANENT
INJUNCTIVE RELIEF FOR
BREACH OF CONTRACT

Plaintiff, by its attorneys, Wilson, Ryan & Campilongo and

Bowles & Moxon, alleges:

NATURE OF THE ACTION

In violation of the express terms and spirit of a

settlement agreement ("the Agreement") entered into in December,

1986, defendant Gerald Armstrong ("Armstrong") has embarked on a

deliberate campaign designed to aid plaintiff's litigation

adversaries, breach the confidentiality provisions of the Agreement,

and foment litigation, hatred and ill-will toward

[CT] 2

plaintiff.

2. Five years ago, plaintiff Church of Scientology

International ("CSI") entered into the Agreement with Armstrong, on

its own behalf and for the benefit of numerous third-party

beneficiaries. The Agreement provided for a mutual release and

waiver of all claims arising out of a cross-complaint which

defendant Armstrong had filed in the case of Church of Scientology

of California v. Gerald Armstrong, Los Angeles Superior Court No. C

420153. Armstrong, a former Church member who sought, by both

litigation and covert means, to disrupt the activities of his former

faith, displayed through the years an intense and abiding hatred for

the Churches, and an eagerness to annoy and harass his former co-

religionists by spreading enmity and hatred among members and former

members. Plaintiff sought, with the Agreement, to end all of

Armstrong's covert activities against it, along with the litigation

itself. For that reason, the Agreement contained carefully

negotiated and agreed-upon confidentiality provisions and provisions

prohibiting Armstrong from fomenting litigation against plaintiff by

third parties. These provisions were bargained for by plaintiff to

put an end to the enmity and strife generated by Mr. Armstrong once

and for all.

3. This action arises out of deliberate and repeated breaches

by Armstrong of these and other express provisions of the settlement

Agreement. Although plaintiff fully performed all of its

obligations under the Agreement, Armstrong appears to consider that

his obligations under the Agreement ended as soon as he had finished

spending the money he extracted from plaintiff as the price of his

signature. In June, 1991, Armstrong began a systematic campaign to

[CT] 3

foment litigation against plaintiff by providing confidential

information, copies of the Agreement, declarations, and "paralegal"

assistance to litigants actively engaged in litigation against his

former adversaries. Although plaintiff has repeatedly demanded that

Armstrong end his constant and repeated breach of the provisions of

the Agreement, Armstrong appears to delight in renewing his annoying

and harassing activities, admitting to them in sworn declarations,

and refusing to end his improper liaisons.

4. With this complaint, plaintiff seeks the Court's aid in

obtaining the peace for which it bargained more than five years ago.

Plaintiff requests liquidated damages pursuant to the terms of the

Agreement, as well as injunctive relief to prevent additional and

future breaches of the Agreement by Armstrong.

THE PARTIES

5. Plaintiff Church of Scientology International is a non-

profit religious corporation incorporated under the laws of the

State of California, having its principal offices in Los Angeles,

California. Plaintiff CSI is the Mother Church of the Scientology

religion.

6. Defendant Gerald Armstrong is a resident of Marin County,

California.

7. Plaintiff is ignorant of the names and capacities of the

defendants identified as DOES 1 through 25, inclusive, and thus

brings suit against those defendants by their true names upon the

ascertainment of their true names and capacities, and their

responsibility for the conduct alleged herein.

/ / /

[CT] 4

THE CONTRACT

8. On or about December 6, 1986, CSI and Armstrong entered

into a written confidential settlement Agreement, described in

Paragraph 1 of this Complaint.

9. The Agreement was entered into by plaintiff and defendant

Armstrong, with the participation of their respective counsel after

full negotiation. Each provision of the Agreement was carefully

framed by the parties and their counsel to accurately reflect the

agreement of the parties.

10. Plaintiff specifically negotiated for and obtained from

Armstrong the provisions in the Agreement delineated in paragraphs

7(D), 7(H), 7(G), 10 and paragraphs 12 through 18, because it was

well aware, through investigation, that Armstrong had undertaken a

series of covert activities, apart from the litigation, which were

intended by Armstrong to discredit Church leaders, spark government

raids into the churches, create phony "evidence" of wrongdoing

against the Churches, and, ultimately, destroy the Churches and

their leadership.

11. In November, 1984, Armstrong was plotting against the

Scientology Churches and seeking out staff members in the church who

would be willing to assist him in overthrowing Church leadership.

The church obtained information about Armstrong's plans and, through

a police-sanctioned investigation , provided Armstrong with the

"defectors" he sought. On four separate occasions in November,

1984, Armstrong met with two individuals that he considered to be

defectors, whom he knew as "Joey" and "Mike." In reality, both

"Joey" and "Mike" were loyal Church members who, with permission

from the Los Angeles police, agreed to have their conversations with

[CT] 5

Armstrong surreptitiously videotaped. during the course of these

conversations, Armstrong:

a. Demanded that "Joey" provide him with copies

of documents published by the Churches so that he could forge

documents in the same style. Armstrong wanted "Joey" to then

plant these Armstrong creations in the Church's files so that

Armstrong could tip off the Internal Revenue Service Criminal

Investigations Division ("CID"), and the incriminating

documents would be found in a resulting raid;

b. Sought to "set up" the defection of a senior

Scientologist by finding a woman to seduce him;

c. Told "Joey" all about his conversations with Al

Lipkin, an investigator for the L.A. CID, and attempted

to get "Joey" to call Lipkin and give him false information

that would implicate the church's leaders in the misuse of

donations; and

d. Instructed "Mike" on the methods of creating a

lawsuit against the church leadership based on nothing at

all:

ARMSTRONG: They can allege it. They can
allege it. They don't even have -- they can
allege it.

RINDER: So they don't even have to have the
document sitting in front of them and then--

ARMSTRONG: F____ing say the organization destroys
the documents.

* * *

Where are the -- we don't have to prove a goddamn
thing. We don't have to prove s___t; we just have to
allege it.

/ / /

[CT] 6

Given Armstrong's propensity to create trouble for the Churches

regardless of truth, the Churches naturally considered such

provisions to be an integral and necessary part of any settlement.

12. The Agreement also provided that plaintiff CSI would pay

to Armstrong's attorney, Michael Flynn, a lump sum amount intended

to settle not just Armstrong's case, but the cases of other clients

of Mr. Flynn as well, and that Mr. Flynn would pay to Armstrong a

portion of that settlement amount. The exact amount of the portion

to be paid to Armstrong by Mr. Flynn was maintained as confidential

between Mr. Flynn and Armstrong.

13. CSI paid to Mr. Flynn the lump sum settlement amount.

14. Mr. Flynn paid to Armstrong his confidential portion of

the lump sum settlement amount.

15. Plaintiff CSI has performed all of its obligations

pursuant to the Agreement.

FIRST CAUSE OF ACTION

(Against Armstrong for Breach of Contract)

16. Plaintiff realleges paragraphs 1 - 15, inclusive, and

incorporates them herein by reference.

17. Vicki and Richard Aznaran ("the Aznarans") are former

Scientology parishioners currently engaged in litigation against,

inter alia, RTC and CSI, in the case of Vicki J. Aznaran, et al. v.

Church of Scientology of California, et al., United States District

Court for the Central District of California, Case No. CV 88-1786

JMI (Ex).

18. In June, 1991, the Aznarans discharged their attorney,

Ford Greene, and retained attorney Joseph A. Yanny to represent

them.

[CT] 7

19. While acting as the Aznarans' counsel, Yanny hired Gerald

Armstrong as a paralegal to help Yanny on the Aznaran case.

20. In July, 1991, Armstrong agreed to travel from Marin

County to Los Angeles and asked Yanny to pay him $500 for his

proposed help.

21. In July, 1991, Armstrong did travel to Los Angeles as he

had agreed, stayed with Yanny on July 15 and July 16, 1991, and

provided Yanny with paralegal assistance and a declaration for the

Aznaran case.

22. Yanny is former counsel to CSI, and his substitution into

the case was vacated by the Court sua sponte on July 24, 1991, the

Court noting that Yanny's retention as the Aznarans' counsel was

"highly prejudicial" to RTC and CSI.

23. Armstrong's acceptance of employment by Yanny to work on

the Aznarans' litigation is a direct violation of Paragraphs 7(G)

and 10 of the Agreement.

24. As a direct and proximate result of Armstrong's breach of

the agreement by providing paralegal assistance to Yanny in the

Aznarans' litigation, plaintiff has incurred damages which are not

presently calculable. In no event, however, are they less than

$800,000. Consequently, for this breach plaintiff seeks compensatory

and consequential damages according to proof.

SECOND CAUSE OF ACTION

(Against Armstrong for Breach of Contract)

25. Plaintiff realleges paragraphs 1 - 15, 17-23, inclusive,

and incorporates them herein by reference.

33. After Yanny entered his appearance in the Aznarans' case

and indicated to CSI's counsel that he represented Gerald Armstrong

[CT] 8

as well, CSI brought suit against Yanny in the case of Religious

Technology Center, et al. v. Joseph A. Yanny, et al., Los Angeles

Superior Court No. BC 033035 ("RTC v. Yanny"). In that action,

plaintiff sought and obtained a Temporary Restraining Order and a

Preliminary Injunction against Yanny, which prohibit Yanny from

aiding, advising, or representing, directly or indirectly, the

Aznarans or Armstrong, on any matters relating to the plaintiff.

27. At the hearings before the Court on the temporary

restraining order and the injunction, Yanny filed two declarations

prepared and executed by Armstrong on July 16, 1991. The

declarations were offered by Yanny as part of Yanny's defense, which

was ultimately rejected by the Court when it issued its injunction.

28. Armstrong's aid to Yanny in the RTC v. Yanny case is a

direct violation of Paragraphs 7(G) and 10 of the Agreement.

29. Armstrong attached as an exhibit to one of his July 16,

1991 declarations a copy of the Agreement, the terms of which he had

agreed, pursuant to paragraph 18(D), to keep confidential. This

disclosure of the terms of the Agreement is a violation of its non-

disclosure provisions, requiring that Armstrong pay to CSI, RTC and

CSC $50,000 in liquidated damages.

30. Despite demand by plaintiff, Armstrong has failed and

refused to pay them the $50,000 owed in liquidated damages for this

breach of the Agreement.

THIRD CAUSE OF ACTION

(Against All Defendants for Breach of Contract)

31. Plaintiff realleges paragraphs 1 - 15, 17-23, 26-30,

inclusive, and incorporates them herein by reference.

32. After Yanny's substitution into the Aznarans' case was

[CT] 9

summarily vacated, Ford Greene was reinstated as the Aznarans'

counsel of record. Ford Greene's law offices are located in San

Anselmo, California.

33. In or about August, 1991, Armstrong began working in Ford

Greene's office for Greene as a paralegal on the Aznarans' case.

Armstrong's employment in Greene's office has continued to the

present. Armstrong's activities constitute a daily and continuing

breach of his contract, rendering plaintiff's bargain a nullity.

34. Plaintiff CSI has already incurred, and continues to incur,

damages as a direct and proximate result of Armstrong's provision of

aid to Greene in the Aznarans' case. Those damages are not

presently calculable and will cease only when Armstrong is ordered

to stop his improper conduct. In no event, however, are they less

than $800,000. Consequently, for this breach plaintiff seeks

compensatory and consequential damages according to proof.

FOURTH CAUSE OF ACTION

(Against All Defendants for Breach of Contract)

35. Plaintiff realleges paragraphs 1-15, 17-23, 26-30, 32-34,

inclusive, and incorporates them herein by reference.

36. In addition to the paralegal services which Armstrong has

provided to Ford Greene on the Aznarans' litigation, Armstrong also

provided the Aznarans with a declaration, dated August 26, 1991, and

filed in the Aznarans' case. In that declaration, Armstrong

describes some of his alleged experiences with and concerning

plaintiff, and purports to authenticate copies of certain documents.

These actions and disclosures are violations of Paragraphs 7(G),

7(H) and 10 of the Agreement, requiring that Armstrong pay to CSI

and RTC $50,000 in liquidated damages.

[CT] 10

37. Despite demand by plaintiff, Armstrong has failed and

refused to comply with the liquidated damages provision by paying

$50,000 to plaintiff as demanded for this breach of the Agreement.

FIFTH CAUSE OF ACTION

(Against All Defendants for Injunctive Relief)

38. Plaintiff realleges paragraphs 1-15, 17-23, 26-30, 32-34,

36-37, inclusive, and incorporates them herein by reference.

39. As a direct and proximate result of Armstrong's breach of

the agreement by providing assistance to Greene in the Aznarans'

litigation, which breach is, on information and belief, persistent

and continuing, CSI is and will continue to be irreparably harmed,

and unless Armstrong and those acting in concert with him are

temporarily, preliminarily and permanently enjoined from continuing

that unlawful conduct, further irreparable harm will be caused to

CSI.

40. Further, as a direct and proximate result of Armstrong's

breach of the agreement by providing assistance to Yanny in Yanny's

litigation, which breach is, on information and belief, persistent

and continuing, CSI is and will continue to be irreparably harmed,

and unless Armstrong and those acting in concert with him are

temporarily, preliminarily and permanently enjoined from continuing

that unlawful conduct, further irreparable harm will be caused to

CSI.

WHEREFORE, plaintiff prays for judgment as follows:

ON THE FIRST CAUSE OF ACTION

1. For compensatory and consequential damages according to

proof, but in no event less than $800,000.

2. For attorneys' fees and costs of suit.

[CT] 11

ON THE SECOND CAUSE OF ACTION

1. For liquidated damages in the amount of $50,000.

2. For attorneys' fees and costs of suit.

ON THE THIRD CAUSE OF ACTION

1. For compensatory and consequential damages according to

proof, but in no event less than $800,000.

2. For attorneys' fees and costs of suit.

ON THE FOURTH CAUSE OF ACTION

1. For liquidated damages in the amount of $50,000.

2. For attorneys' fees and costs of suit.

ON THE FIFTH CAUSE OF ACTION

1. For a temporary restraining order, preliminary injunction

and a permanent injunction enjoining defendants from violating the

terms of the Agreement.

ON ALL CAUSES OF ACTION

1. For such other and further relief as the Court may deem

just and proper.

DATED: February 4, 1992

WILSON RYAN & CAMPILONGO

By: [signed] Andrew H. Wilson
Andrew H. Wilson

Laurie J. Bartilson
BOWLES & MOXON

Attorneys for Plaintiff
Church of Scientology
International

[CT] 12

VERIFICATION

I, ANDREW H. WILSON, declare as follows:

I am one of the attorneys for the Plaintiff Church

of Scientology International in the above-entitled matter. I have

read the foregoing Verified Complaint for Damages and for

Preliminary and Permanent Injunctive Relief for Breach of Contract

and know the contents thereof, which are true of my own knowledge

except as to those matters which are stated on information and

belief, and as to those matters, I believe it to be true.

I declare under the penalty of perjury pursuant to

the laws of the State of California that the foregoing is true and

correct. Executed on February 4, 1992, at San Francisco,

California.

[signed] Andrew H.Wilson
ANDREW H. WILSON

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