Gerry Armstrong--PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR SUMMARY JUDGMENT 11-17-2003

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ANDREW H. WILSON, SBN 63209
WILSON CAMPILONGO LLP
475 Gate Five Road, Suite 212
Sausalito, CA 94965-1475
Telephone: (415) 289-7100
Facsimile: (415) 289-7110

Attorney for Plaintiff
CHURCH OF SCIENTOLOGY INTERNATIONAL

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF MARIN

CHURCH OF SCIENTOLOGY INTERNATIONAL, a California
nonprofit religious corporation,

Plaintiff,

vs.

GERALD ARMSTRONG, an
individual; and DOES 1 THROUGH
50,c cv inclusive,

Defendants.

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CASE NO. CV021632

PLAINTIFF'S NOTICE OF MOTION
AND MOTION FOR SUMMARY
JUDGMENT; POINTS AND
AUTHORITIES IN SUPPORT THEREOF;

[SEPARATE STATEMENT OF
UNDISPUTED FACTS AND
DECLARATION OF ANDREW WILSON
FILED CONCURRENTLY HEREWITH]

Date: February 3, 2004
Time: 9:00 a.m.
Dept: L

Complaint Filed: April 2, 2002
Trial Date: March 5, 2004

TO DEFENDANT GERALD ARMSTRONG AND HIS ATTORNEY OF RECORD:

PLEASE TAKE NOTICE that on February 3, 2004, at 9:00 a.m. in Department L of this

Court, located at 3501 Civic Center Drive, San Rafael CA, 94903. Plaintiff, Church of

Scientology International ("CSI") will move this Court for summary judgment in favor of

plaintiff and against defendant, Gerald Armstrong ("Armstrong") as to CSI's first cause of action

for breach of contract.

This motion is made upon the grounds that: (1) there are no triable issues of material fact

PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR SUMMARY JUDGMENT

because Armstrong has admitted committing the 201 breaches of contract alleged in the First

Cause of Action (1); (2) The Agreement mandates an award of Fifty Thousand Dollars ($50,000)

for each such breach; (3) CSI and Armstrong were parties in prior proceedings in which the

validity and enforceability of the Agreement were vigorously litigated and finally adjudicated,

resulting in a judgment on the merits in favor of plaintiff Because there are no triable issues of

fact as to either liability or damages, and because the validity and enforceability of the Agreement

were litigated and conclusively determined in a prior proceeding which terminated with a final

judgment on the merits, plaintiff is entitled to summary judgment as a matter of law.

This motion is based upon this notice, the memorandum of points and authorities, the separate

statement of undisputed facts, the Declaration of Andrew Wilson and exhibits, all of which are

attached hereto and served and filed herewith, and such other and further matters as may properly

be brought before the Court.

Dated: November 17, 2003

Respectfully submitted,

WILSON CAMPILONGO LLP

By: [signed] Andrew H. Wilson

Andrew H. Wilson

Attorney for Plaintiff
CHURCH OF SCIENTOLOGY INTERNATIONAL

PLAINTIFF'S NOTICE OF MOTION AND MOTION FOR SUMMARY JUDGMENT

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MEMORANDUM OF POINTS AND AUTHORITIES

I. INTRODUCTION

This case was brought by plaintiff CSI against Armstrong for breach of contract and

conspiracy to breach contract, and against defendants Robert Minton and the Lisa McPherson

Trust for intentional interference with contractual relations and conspiracy to breach contract.

Plaintiff has dismissed the claims against Robert Minton and the Trust. What remains is

plaintiff's first cause of action for breach of contract against Armstrong, which arises out of a

Mutual Release of All Claims and Settlement Agreement ("Agreement") by which the

contracting parties settled then extant litigation and gave mutual releases of known and

unknown claims. Specifically, Plaintiff asserts that Armstrong has committed 201 separate and

distinct breaches of the Paragraph 7(D) of the Agreement which provides for the award of

$50,000 for each breach, or a total of $10,050,000.

As shown below, Armstrong has admitted committing the breaches, and the validity of the

Agreement was already raised and litigated between plaintiff and Armstrong in a prior

proceeding in this Court, which resulted in a final judgment on the merits in plaintiff's favor.

Subsequent contempt proceedings based on Armstrong's violation of the injunction resulted in a

finding of contempt based on 131 of the 201 breaches of the Agreement alleged in the First

Cause of Action. Because there are no issues of material fact and because Armstrong is

collaterally estopped to challenge the validity or enforceability of the Agreement, plaintiff is

entitled to judgment on its first cause of action as a matter of law in the amount of $10,050,000.

II. STATEMENT OF UNDISPUTED FACTS

On December 6, 1986, CSI and Armstrong entered into a Mutual Release of All Claims and

Settlement Agreement ("Agreement") in the case entitled Church of Scientology International v.

Armstrong, Case No. C 420153 (Separate Statement, Undisputed Fact No.1). In consideration,

Armstrong made various covenants, including the following contained in paragraph 7(D) of the

Agreement:

Plaintiff agrees never to create or publish, or attempt to publish, and/or assist
another to create for publication by means of magazine, article, book or other
similar form, any writing or broadcast or to assist another to create, write, film

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION FOR SUMMARY JUDGMENT

or video tape or audio tape any show, program or movie, or to grant interviews
or discuss with others, concerning their experiences with the Church of
Scientology, or concerning their personal or indirectly acquired knowledge or
information concerning the Church of Scientology, L. Ron Hubbard or any of
the organizations, individuals and entities listed in Paragraph 1 above. Plaintiff
further agrees that he will maintain strict confidentiality and silence with respect
to his experiences with the Church of Scientology and any knowledge or
information he may have concerning the Church of Scientology, L. Ron
Hubbard, or any of the organizations, individuals or entities listed in Paragraph
1 above. . . . Plaintiff agrees that if the terms of this paragraph are breached by
him, that CSI and the other Releasees would be entitled to liquidated damages
in the amount of $50,000 for each such breach.

(Separate Statement, Undisputed Fact No. 1).

Several years later, plaintiff filed a breach of contract action against Armstrong which was

finally determined in this Court in the case entitled Church of Scientology International v.

Armstrong, Case Nos. 152229 and 157680 ("Consolidated Action"). (Separate Statement,

Undisputed Fact Nos. 2 and 3).¹

In the Consolidated Action, plaintiff sought liquidated damages pursuant to the terms of the

Agreement, as well as injunctive relief to prevent any future breaches of the Agreement by

Armstrong, including breaches of paragraph 7(D) of the Agreement. (Separate Statement,

Undisputed Fact Nos. 2 and 3).

Armstrong, represented by counsel, cross-complained against plaintiff in the Consolidated

Action challenging the validity of the Agreement on a number of grounds, including violation of

the First Amendment, illegality and duress. (Separate Statement, Undisputed Fact No. 4).

Thereafter, these issues were vigorously litigated between the parties in the Consolidated

Action. On October 17, 1995, following a motion for summary adjudication of issues brought by

CSI against Armstrong, this Court entered an Order of Permanent Injunction in the Consolidated

Action adjudicating the following:

¹CSI originally filed this action in this Court. Armstrong successfully sought a change of
venue to Los Angeles County. However, after CSI's motion for preliminary injunction was
granted, Armstrong consented to a transfer of the action to Marin County, where a Final
Judgment of Permanent Injunction was entered by the Hon Gary Thomas.

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION FOR SUMMARY JUDGMENT

"1. Plaintiff and defendant freely and voluntarily entered into a Mutual Release

of All Claims and Settlement Agreement in December, 1986.

2. Plaintiff performed all of its obligations pursuant to the Agreement.

3. Defendant Armstrong received substantial consideration for the promises which he

made in the Agreement.

4. Since 1990, defendant Armstrong has repeatedly breached paragraphs

7(D) . . .

9. Defendant Armstrong has reiterated numerous times that he intends to continue

breaching the Agreement unless he is ordered by the Court to cease and desist . . .

10. Plaintiff's legal remedies are inadequate insofar as the scope of the relief ordered

below is concerned . . .

Accordingly, the Court finds that entry of a permanent injunction in this action

is necessary in this action because pecuniary compensation could not afford the

Church adequate relief, and the restraint is necessary in order to prevent a

multiplicity of actions for breach of contract."

Thereafter, the court permanently enjoined Armstrong from "doing directly or indirectly any

of the following":

"Facilitating in any manner the creation, publication, broadcast, writing,

filming, audio recording, video recording, electronic recording or reproduction

of any kind of any book, article, film, television program, radio program,

treatment, declaration, screenplay or other literary, artistic or documentary work

of any kind which discusses, refers to or mentions Scientology, the Church

and/or any of the Beneficiaries (which includes plaintiff herein, CSI);

5. Discussing with anyone, not a member of Armstrong's immediate family or

his attorney, Scientology, the Church, and/or any of the Beneficiaries (including

CSI)"

(Separate Statement, Undisputed Fact No. 6).

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION FOR SUMMARY JUDGMENT

On May 2, 1996, the Order of Permanent Injunction was incorporated into a judgment

against Armstrong. (Separate Statement, Undisputed Fact No. 7).

Thereafter, on or about November 13, 2000, plaintiff applied Ex Parte to the Court in the

Consolidated Action for an Order to Show Cause why Armstrong should not be held in

contempt for violating the October 17, 1995 Order of Permanent Injunction for engaging in 131

breaches of the October 17, 1995 Injunction. (Separate Statement, Undisputed Fact No. 8).

These 131 breaches consisted of postings that Armstrong made on the Internet between the years

1998 through 2000 and are the same breaches at issue in plaintiff's case here. These postings

are written publications in which he discusses his and others' experiences in the Church of

Scientology and he makes mention of and discusses information he has concerning the Church

of Scientology. (Separate Statement, Undisputed Fact Nos. 2 and 9). Armstrong was given an

opportunity and did file an opposition to the Ex Parte Application, asserting the same arguments

he proffered earlier in the Consolidated Action. (Separate Statement, Undisputed Fact No. 10).

On July 12, 2001, the court issued its decision in an Order of Contempt finding that

Armstrong had, in fact, violated the terms of the Injunction by engaging in 131 breaches of the

Agreement which are at issue here:

Petitioner (CSI) has shown that: (1) During the period of February 20, 1998 to
"July 10, 2000, ARMSTRONG made a total of 131 postings on the Internet, each
of which violated one or more provisions of the Injunction . . .;

ARMSTRONG did not deny these violations. In his January 9, 2001
declaration under penalty of perjury, ARMSTRONG stated, "I have violated
Scientology's Injunction thousands of times since former Marin County
Superior Court Judge [Gary Thomas] signed it in October, 1995.

(Separate Statement, Undisputed Fact No. 11).

Armstrong's conduct did not change, resulting in this action to recover for the 131 breaches

upon which the contempt finding were based and 70 additional breaches. Armstrong's Answer

admits the 201 breaches alleged in the First Cause of Action. Separate Statement, Undisputed

Fact No. 12.

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION FOR SUMMARY JUDGMENT

III. ARGUMENT

A. Applicable Legal Standards

A motion for summary judgment shall be granted if all the papers submitted show there are

no triable issues as to any material facts and the moving party is entitled to judgment as a matter

of law. C.C.P. § 437c(c). To be "material" for purposes of a summary judgment proceeding, a

fact must relate to some claim or defense in issue under the pleadings, and it must also be

essential to the judgment in some way. Zavala v. Arce (1997) 58 Cal.App.4th 915, 926, 68

Cal.Rptr.2d 571. Plaintiffs' burden on summary judgment is to "produce admissible evidence

on each element of a cause of action entitling them to judgment." C.C.P. § 437c(o)(1); Hunter v.

Pacific Mechanical Corporation (1995) 37 Cal.App.4th 1282, 1287, 44 Cal.Rptr.2d 335, 337.

Admissions of material fact made by the opposing party in pleadings are particularly

appropriate support for a summary judgment motion. Pinewood Investors v. City of Oxnard,

133 Cal. App. 2d 3d 1030, 1034-35 (1982); Savage v. Pacific Gas & Electric Co. v. Savage, 21

Cal. App. 4^th 434, 444 (1993). Weil & Brown, Civil Procedure Before Trial, § 10:20, at p.10-7,

Rutter Group (2003).

The doctrine of res judicata "not only is properly raised by a motion for summary judgment,

but also is a proper ground upon which to grant a summary judgment." Lederer v. Rohrbasser

(1986) 179 Cal.App.3d 290, 296, 224 Cal.Rptr. 791, 794. "Summary judgment is an appropriate

remedy when the doctrine of res judicata in its subsidiary form of collateral estoppel refutes all

triable issues of fact suggested by the pleadings." Southwell, M.D. v. Mallery, Stern & Warford,

et al. (1987) 194 Cal.App.3d 140, 144, 239 Cal.Rptr. 371, 374.

Res judicata has two aspects. One is where it operates as a bar and prevents the parties

from relitigating a cause of action a second time. The other aspect, known as collateral

estoppel, is what is involved here. Collateral estoppel "causes a judgment in a previous action

between the same parties to operate in the second action as a conclusive adjudication as to

whatever issues were actually and necessarily decided in the first action." Id., Lederer.

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION FOR SUMMARY JUDGMENT

IV. ARGUMENT

A. Armstrong Has Admitted All Material Facts Upon Which This Motion is Predicated.

It is hard to imagine a more appropriate case for a granting of summary judgment. The First

Cause of Action of the Complaint herein specifies 201 instances in which Armstrong breached the

provisions of Paragraph 7(D) of the Agreement. Armstrong has not only admitted that he committed

those breaches, he has boasted of it, bragging that "Armstrong has committed ... a grand total of

more than 100,000 separate and distinct breaches of Paragraph 7D of the mutual release." See,

Answer of Gerry Armstrong, Wilson Decl. ¶3, Exhibit B thereto; Plaintiff's Undisputed Fact Nos.

6, 9, 11, 12. In the light of the admissions contained in Armstrong's Answer, there can be no issues

of material fact concerning whether or not the breaches occurred. Likewise, there can be no disputes

of material fact as to either the fact or amount of damage, as Paragraph 7 (D) clearly provides for

an award of $50,000 for each breach.

Moreover, 131 of the 201 breaches alleged in the First Cause of Action were the basis for a

contempt order issued by this Court in the Consolidated Action. Separate Statement, Undisputed

Fact No. 11. The Final Injunction issued by the Hon Gary W. Thomas tracked the language of

Paragraph 7 (D) of the Agreement. See, Wilson Decl. ¶7, and Wilson Decl. ¶2, Exhibit A (¶ 7 (D)

at 6-7). Thus, the Court's finding on July 12, 2001 that Armstrong made a total of 131 postings on

the Internet which violated the Order of Permanent Injunction is also a finding that those 131

postings were also breaches of Paragraph 7 (D).

B. Armstrong is Collaterally Estopped to Deny Either the Existence of the breaches

or the enforceability of the Agreement.

The California Supreme Court has held that, under the doctrine of collateral estoppel, "prior

judicial determination of a legal issue with respect to specific facts may be given effect in a

subsequent action between the same parties." Chern v. Bank of America (1976) 15 Cal.3d. 866, 871,

127 Cal.Rptr. 110, 113. To successfully assert collateral estoppel, plaintiff must establish the

following elements: (1) the issue raised in the present action is identical to one litigated in a prior

proceeding; (2) the prior proceeding resulted in final judgment on the merits; and (3) the party

against whom the doctrine is being asserted was a party or in privity with a party to the prior

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION FOR SUMMARY JUDGMENT

proceeding. Grinham v. Fielder (2002) 99 Cal.App.4th 1049, 1054, 121 Cal.Rptr.2d 468, 471.

The issues raised by plaintiff's breach of contract action here are (1) whether or not the

Agreement is enforceable; and (2) whether Armstrong's 131 postings violated paragraph 7(D) of

the Agreement sufficient to warrant damages in the amount of $655,000. There is no question that

the elements for collateral estoppel are applicable here.

First, the validity and enforceability of the Agreement was aggressively contested by Armstrong

through all possible legal process available to him in that matter. When judgment was decided

against him on this issue, he sought reconsideration of it. When that was denied, he appealed.

Thus, he had every opportunity and indeed, took all opportunities to litigate this issue. The result

was a judgment in favor of plaintiff, in which the Court found that the Agreement was valid and its

terms enforceable. See, Wilson Decl. ¶6, Exhibit E, Armstrong's Cross Complaint; Wilson Decl.

¶7, Exhibit F, Order of Permanent Injunction; Wilson Decl. ¶8, Exhibit 11 Consolidated Judgment.

Second, while the breaches of paragraph 7(D) that were litigated in the Consolidated Action

resulted in a judgment in favor of CSI were not the ones at issue here, the Court did issue an

injunction against Armstrong which expressly prohibited him from (1) discussing his experiences

with the Church of Scientology with others; and (2) discussing any information with others

concerning the Church of Scientology, provisions taken directly out of paragraph 7(D) of the

Agreement.

Thereafter, in the same Consolidated Action, plaintiff instituted a contempt proceeding,

seeking a determination as to whether or not 131 postings in which Armstrong discussed with

others, information regarding his knowledge and experiences with the Church of Scientology, were

a direct breach of the Court's injunction and consequently, paragraph 7(D) of the Agreement,

expressly prohibiting such conduct. This issue was litigated between the parties, resulting in a

judicial determination that, by making these 131 postings, Armstrong had, in fact, breached his

obligations under the Court's injunction expressly prohibiting such conduct. Indeed, Armstrong

admitted the breaches.

Thus, the issues raised by plaintiff's first cause of action here for breach of contract related to

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION FOR SUMMARY JUDGMENT

the legality, validity and enforceability of the Agreement and to 131 of the 201 breaches of the

Agreement alleged here have already been conclusively determined and cannot be relitigated here.

V. CONCLUSION

As the foregoing shows, there are no issues of material fact. Armstrong has admitted

committing the 201 breaches alleged in the First Cause of Action. The Agreement was found to

be valid and enforceable in the Consolidated Action, which terminated in a final judgment on the

merits. A contempt proceeding in the Consolidated Action resulted ina finding that Armstrong

committed 131 of the 201 breaches at issue here. There is also no dispute of fact as to the

amount of damages which should be awarded. The Agreement clearly specifies that $50,000

shall be awarded for each breach. Accordingly, plaintiff is entitled to summary judgment on its

first cause of action for breach of contract, as a matter of law, in the amount of $10,050,00.

Dated: November 17, 2003

Respectfully submitted,

WILSON CAMPILONGO LLP

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

Attorneys for Plaintiff
CHURCH OF SCIENTOLOGY
INTERNATIONAL

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION FOR SUMMARY JUDGMENT

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