Scientology's highest management has told its members for years" not one thin dime for Wollersheim," but it blinked and reacted in a panic. It raced to get the money into the court to stop the filing of the following brief by Wollersheim's lawyers. This is *such* a nice piece of work thought that we just had to share it with the long suffering readers of a.r.s. :-) Larry has some comments which will be posted in this thread after not filed filings.

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO AMEND JUDGMENTS
1. BASIS OF MOTION.

Defendant Larry Wollersheim seeks to amend the June 3, 1994 and November 8, 1996 final judgments awarding him costs and attorneys' fees, to add Religious Technology Center ("RTC") and Church of Scientology International ("CSI") as real party plaintiffs and judgment debtors. Those judgments are for the amounts of $132,676.57 and $298,039.74, respectively.

Overwhelming evidence shows that RTC and CSI are the alter egos of plaintiff Church of Scientology of California ("CSC") and have been since RTC and CSI were incorporated in the early 1980s. As a matter of Scientology doctrine, a single individual, "Sea Org" Captain and RTC's Chairman of the Board, David Miscavige, wields unchallenged control over all Scientology matters -- including the instant litigation -- unhampered by such bothersome details as corporate boundaries.

As a result, the unity of interest between Scientology's corporations is so pervasive as to expose the notion of their independent existences as an utter ruse. CSC, in particular, is nothing more than a shell. RTC and CSI have financed and controlled CSC's case against Mr. Wollersheim since its inception.

The equities in this matter fall squarely on the side of Larry Wollersheim and demand that this motion be granted. If not, an inequitable result will follow, because CSC's assets have been willfully depleted, leaving it without adequate means to satisfy the judgments against it.

2. FACTUAL AND PROCEDURAL HISTORY.

a. Mr. Wollersheim's Scientology Experience.

Larry Wollersheim joined the Church of Scientology in 1968 and participated in its exercises for years before leaving.

While associated with Scientology, Mr. Wollersheim experienced severe psychological distress and eventually contemplated suicide. Finally, having decided his problems were directly related to his Scientology activity, he resisted the coercive measures designed to keep him in the organization, and quit.

In 1980, Mr. Wollersheim filed suit against CSC for fraud and infliction of emotional injury (hereinafter, that case is referred to as "Wollersheim I"). When the case was tried in 1986, a unanimous jury found Scientology had subjected him to "fair game," a form of punishment by which Scientology enemies may be "injured by any means," including being "tricked, sued or lied to or destroyed." SS-2.

In addition to the psychological torture he endured, both while in Scientology and after fleeing it, Mr. Wollersheim's evidence established Scientology's effective scheme to ruin his successful photography business. The business went bankrupt. In July of 1986, the jury awarded him $30 million.

CSC filed the present lawsuit, seeking to set aside the Wollersheim I judgment, in 1993, nearly seven years after the jury in that case reached its verdict. In the intervening years, the underlying case wound its way through the appeals courts, a process in which Mr. Wollersheim consistently prevailed. When CSC's appellate road was near its dead end, this case surfaced.

/ / / b. After Many Years as Scientology's Chief Organization, CSC Was Gutted, and RTC and CSI Were Incorporated, Diverting Funds Away from CSC Largely to Frustrate Mr.

Wollersheim's Ability to Collect a Judgment.

When Mr. Wollersheim filed suit against CSC in 1980, it was the dominant Scientology entity. SS-4. Incorporated in California in 1954, CSC was Scientology's "mother church." SS-5.

As of July 1981, CSC's net worth was $340 million. SS-6.

Beginning in late 1981, Scientology underwent an ostensible reorganization. As a result of this project, which was called "Mission Corporate Category Sort-Out" ("MCCS"), 60 to 70 percent of CSC was divested by the end of December 1981. SS-7. When, in 1985, it appeared to Scientology that Mr. Wollersheim might win his lawsuit, the decision was made to strip CSC of what was left.

SS-8. Thus, the remaining 30 to 40 percent of CSC was gone by May of 1985. SS-9. A year later, Wollersheim I would go to trial.

After the MCCS reorganization, CSC was no longer the central entity. Instead, CSI had been formed to become the new "mother church," overseeing most other Scientology organizations, including CSC. SS-10. Under the new hierarchy, the only entity superior to CSI was RTC, which purported to own and license certain rights to CSI and other entities. SS-11.

While the reorganization was engineered partly to defraud the government, the looting of CSC's assets was specifically designed to prevent Mr. Wollersheim, among others, from ever collecting a judgment. SS-12. At an October 1982 conference of "mission holders" (franchisees), Scientology officials Lyman Spurlock and David Miscavige, both of whom were founding trustees of RTC in 1981, announced the goal of the reorganization: to make Scientology "impregnable." SS-13.

Elaborating on this message, Miscavige assured the meeting's attendees that the MCCS project had resulted in a "corporate structure [which] assures Scientology being around for eternity."

SS-14.

Before the reorganization, the most prosperous units in Scientology were included under CSC's corporate umbrella, and CSC received regular income from them. SS-15. For example, prior to 1981, local Scientology branches such as those in San Francisco and Los Angeles paid monthly management fees to CSC. SS-16.

After the corporate "sort-out," however, those payments -- which range from five to 10 percent of weekly receipts from 98 organizations -- were routed to the newly formed CSI. SS-17.

The result: 25% of CSI's revenue consists of "management payments" received from Scientology organizations. SS-18.

That these management payments are significant is seen in the example of the Flag Service Organization, a one-time branch of CSC. In 1981, it became a separate corporation known as Church of Scientology Flag Service Organization (CSFSO). SS-19.

Like Scientology's other organizations, CSFSO began making its payments to CSI after the MCCS project; by 1989, CSI was receiving some $200,000 per week in fees from CSFSO alone. SS-20.

Its income stream having been stripped from it, CSC became a "dormant" corporation devoid of activity. SS-21. In its 1993 application for 501(c)(3) tax exempt status, CSI represented that CSC had been inactive since at least 1991 -- two years before it filed this lawsuit. SS-22. As CSC's president, Neil Levin, has testified, this "inactive" status means CSC has no employees and transacts no business. SS-23. President Levin himself, who last received a salary from CSC the year before this lawsuit was filed, devotes no time to the performance of CSC- related duties. SS-25. Instead, his energy is spent on his true employment -- within CSI's Office of Special Affairs. SS-26.

Just as the use of CSC as a repository of revenue was aborted, so have its assets been depleted -- an action taken expressly to thwart efforts by Mr. Wollersheim to collect a judgment. SS-12. As of April 1986, CSC claimed a net worth of $18.6 million. SS-30. In July of that year, just after Mr.

Wollersheim won his $30 million verdict, one of CSC's directors, Lynn Farny, agreed on the record that CSC would not dispose of its assets except in the ordinary course of business. SS-33. Of course, by the time of Mr. Farny's pledge, CSC's "ordinary course of business" no longer included any revenue-generating activity -- all income was now being routed to CSI and/or RTC.

Two months later, in September of 1986, CSC moved the trial court for a waiver of Code of Civil Procedure 917.1's requirement that a bond equal to twice the amount of the judgment be posted to stay its enforcement on appeal. In his minute order, Judge Ronald Swearinger, ruling on CSC's motion, rebuffed CSC's claim of indigency:

"Proof has shown that [CSC] transferred virtually all of its assets and functions out to other Scientology entities subsequent to the filing of this action and as late as just before a scheduled trial date in this case. If the defendant is indeed indigent, it is an indigency of its own making. Proof has shown that Scientology as an overall entity is comprised of numerous operating entities, including defendant, and that they are all inter-related, being parts of a monolithic whole. Transfers of assets and functions from one entity to other entities are more pro forma than actual. In the case of the transfers in question here, they are seen as mere 'jiggery pokery.' The power to transfer out to a sister entity is the power to transfer back in 'when the heat is off,' so to speak. The claim of relative indigency is not believed by the court and the court has had ample opportunity to examine and consider the credibility of the defendant during 5-1/2 months of trial and extended post-trial proceedings." SS-34.

The depletion of CSC's assets was attributable in part to the settlement of other lawsuits against it. One such settlement, in the amount of $800,000, was achieved in late 1986 on behalf of ex-Scientologist Gerald Armstrong. SS-35. In a stunning move which unmistakably reveals the unity of interest among Scientology's corporations, the 1986 settlement agreement with Armstrong was executed by CSI, a non-party. CSC, the actual cross-defendant in the case, was merely named as a beneficiary of that agreement. So was RTC. SS-36.

Not surprisingly, by May 1995, CSC's assets had dwindled to $35,000, on deposit in a Luxembourg bank. Another account had been opened at a New York bank on CSC's behalf -- with CSI funds -- in order to pay a sanctions award issued against CSC. SS-38.

CSC now holds neither real estate nor personal property anywhere in the world. SS-39. Thus, in keeping with Scientology's goals, plaintiff CSC has become just a ransacked shell whose only purpose is to sue Larry Wollersheim.

c. The Unity of Interest Between CSC, CSI and RTC is Clear; In Scientology, the Parameters of the Corporate Structure are Ignored in Favor of a Supreme Authority Called the Sea Org.

Its 1981 "reorganization" notwithstanding, all of Scientology's professed labyrinth of corporations is a sham. As noted, both the Wollersheim I trial judge and the Ninth Circuit Court of Appeals, in U.S. v. Zolin, 905 F.2d 1344 (9th Cir.

1990), have denounced the fraudulent purposes underlying Scientology's corporate scheme. Even more fundamentally, the United States Claims Court, in attempting to untangle the corporate web in Church of Spiritual Technology v. United States, 26 Cl. Ct. 713 (1992), aff'd., 991 F.2d 812 (Fed. Cir. 1993), finally declared:

"After carefully examining the record and attempting to understand the nominal corporate structure of Scientology it is apparent to the court that it is something of a deceptis visus. Real control is exercised less formally, but more tangibly, through an unincorporated association, the Sea Organization, more commonly referred to as the Sea Org.

....

"[Church of Spiritual Technology ("CST")] staff and officers are required to be members of the Sea Org, which gives CST the distinction of being a Sea Org Church. CSI, RTC, ..., in short, all high ranking organizations are Sea Org Churches." (26 Cl. Ct. at p.

718.)

As the Claims Court recognized, the seat of power in Scientology resides firmly in the Sea Org. It is from the Sea Org that the strings in all Scientology organizations -- irrespective of corporate boundaries -- are pulled. SS-42. The compliance of Scientology corporations with orders from the Sea Org is ensured by the policy of appointing only Sea Org officers to the corporations' highest posts. SS-43.

The highest ranking Sea Org officer is Captain David Miscavige. SS-44. As previously noted, Miscavige was also a founding trustee of RTC and is now its chairman of the board.

SS-45.

Importantly, although Miscavige presently associates himself with RTC, his corporate affiliation is actually immaterial; it is as the most senior officer in the Sea Org, that he runs the whole Scientology show. Thus, in the mid-1980s, Miscavige reigned over Scientology from his position as chairman of Author Services, Inc. (ASI), a for-profit corporation ostensibly created as a literary agency for L. Ron Hubbard. SS-47. In 1987, during an IRS investigation of ASI's ties to Scientology's non-profit corporations, Miscavige simply moved the seat of power to RTC and appointed himself chairman of the board. SS-48.

d. David Miscavige and Other Sea Org Officers Within RTC and CSI Have Controlled This Litigation and the Defense of the Underlying Wollersheim I Case All Along.

It must be remembered that, as a purportedly indigent and "dormant" entity, CSC could not have prosecuted the instant lawsuit on its own behalf. Management of the case had to have come from somewhere else, and it did: Sea Org officers operating within RTC and CSI have controlled CSC's litigation with Mr.

Wollersheim for more than 15 years.

The central figure in the collaborative scheme to manipulate CSC's litigation with Mr. Wollersheim is Sea Org Captain David Miscavige. Before moving to RTC, Miscavige managed the defense of Wollersheim I from his post at ASI, assisted by other Sea Org officers. SS-49. So interested was Miscavige in the Wollersheim I case that he attended the trial. SS-51.

During the discovery phase of Wollersheim I, Vicki Aznaran, a Sea Org officer and managerial official of RTC who later became its president, received a command to destroy certain documents which the court had ordered CSC to produce to Mr. Wollersheim.

SS-53. The directive to destroy them was issued by David Miscavige. SS-55.

Next, in keeping with L. Ron Hubbard's "scriptural" edict to use litigation as a weapon against Scientology enemies, the Wollersheim II case emerged. Filed in November of 1985 -- by RTC and CSI -- the case sought to derail Mr. Wollersheim's lawsuit against CSC. In it, plaintiffs alleged that the possession and use of certain documents by Mr. Wollersheim, his attorneys and experts in the case against CSC constituted RICO violations and copyright infringement, among other things. SS-57.

Although RTC and CSI would be its plaintiffs, the decision to file the Wollersheim II case was made by, among others, Sea Org officers David Miscavige, Norman Starkey, and Marty Rathbun -- all of whom were then associated with ASI, a purportedly separate corporation! SS-50, 58. Also participating in this decision was RTC officer Vicki Aznaran. SS-58.

Among the attorneys representing RTC and CSI in Wollersheim II was Earle Cooley, who was simultaneously defending CSC in Wollersheim I. SS-59. Incredibly, both RTC and CSI claimed, as elements of their damages in Wollersheim II, the costs and damages arising out of Mr. Wollersheim's case against CSC! SS- 60. The RICO statement containing this claim was signed on behalf of RTC and CSI by Attorney Kendrick Moxon, who also represented CSC in Wollersheim I post-trial matters, and who again represents CSC in this case. SS-61.

In May of 1990, District Court Judge James Ideman dismissed the Wollersheim II complaint, adopting the recommendations of Special Master James Kolts, who had found:

"The plaintiffs' case against the [] defendants borders on the frivolous and malicious, boiling down to penalizing an attorney simply for conducting necessary discovery to represent his or her client's case."

(Emphasis added.) SS-64.

Ever litigious, RTC and CSI appealed the dismissal of their claims against the Wollersheim II defendants; curiously, their Amended Notice of Appeal was filed on behalf of not only RTC and CSI, but CSC -- a nonparty -- as well. SS-66. The Ninth Circuit affirmed. SS-67.

Once the Wollersheim I trial was over, a discussion among high-ranking Scientology officials was led by Sea Org officer Marty Rathbun. Rathbun, who would soon become RTC's president and a trustee of CSI (SS-50), told the group of a plan to steal the medical records of Charles O'Reilly, one of Mr. Wollersheim's attorneys. SS-68. This plan was ordered by David Miscavige.

SS-70. The goal was to obtain information which might be useful in blackmailing O'Reilly into easing off the $30 million verdict.

SS-71.

e. CSI Provided the Financial Support Needed to Defend Wollersheim I and Prosecute the Present Action.

By its own admission, the looting of CSC left it without any resources -- and certainly not enough to bring or maintain this action. Enter CSI, which all along had been providing the financial support CSC needed to litigate against Mr.

Wollersheim. SS-72.

Scientology maintains a "central reserve system" to fund such things as legal affairs and "emergencies." SS-73. Among the entities participating in this system are CSI and CSC. SS- 74. The fund is administered by a committee consisting entirely of CSI staff members. SS-75.

The reserve's expenditures are considerable. In each of the years 1987 and 1988, for example, the committee authorized $12 million for expenses related to lawsuits and "defense of the activities" of Scientology. SS-76.

Whether through this fund or by some other route, CSI paid CSC's defense costs arising from Wollersheim I. SS-72. CSI has also financed the present litigation. SS-77. And, as CSC President Levin has testified, he recalls no written agreement between CSI and CSC for the repayment of attorneys fees. SS-78.

Consequently, although Mr. Wollersheim won his 1986 verdict of $30 million against CSC, it was CSI which mounted the counterattack. Its funding of the present lawsuit was part of the strategy to prevent Mr. Wollersheim from enforcing his judgment -- a campaign which has been successful to this day, more than a decade after the verdict. "Not One Thin Dime For Wollersheim" was and is the battle cry. SS-79.

Nor, according to CSI, would any claimant be paid a dime; in a 1982 bulletin to Scientology "orgs," CSI claimed the "new, totally secure corporate set-up" would protect Scientology as follows:

"Not one individual has successfully obtained one dime in any effort to attack the Church. Strong legal precedent set in recent months ensures they never will.

"Whereas in 1981 the Church was faced with several dozen court cases of major proportion, we are now handling - and successfully - just the last handful with ease. The Church and its members have gained a great deal of respect as law abiding organizations and citizens.

"THUS ALL POSSIBLE LEGAL THREAT TO THE CHURCH OR THE FOUNDER ARE BEING HANDLED FAVORABLY." (Underscore and capital lettering in original; bold type emphasis added.) SS-80.

Perhaps the most interesting aspect of this bulletin is its reference to lawsuits against "the Church" -- rather than against the individual corporations. Clearly, Scientology approaches litigation against any of its entities as something to be dealt with by all of them.

This is further illustrated by a balance sheet, submitted by CSI to the IRS in 1993 in connection with Scientology's bid for 501(c)(3) tax-exempt status. Listed as a liability of CSI's on that document is a "$30 million judgment on appeal" -- the same judgment Mr. Wollersheim had won against CSC. SS-81.

f. RTC's Retributive Efforts Against Mr. Wollersheim Based on His Judgment Against CSC Continue to the Present Day.

The interest of RTC in CSC's litigation with Mr. Wollersheim persists even today. In the ongoing Wollersheim V case, the Colorado District Court matter involving claims of copyright infringement and trade secret misappropriation, plaintiff RTC began by petitioning the magistrate, in August of 1995, for an ex parte Writ of Seizure as authorized under federal copyright laws. SS-82. Among the lawyers representing plaintiffs in case is the same Earle Cooley who tried the Wollersheim I matter and appeared in both Wollersheim II and III. SS-84.

The petition having been granted, agents of RTC raided the home of Larry Wollersheim, purportedly for the authorized purpose of locating L. Ron Hubbard-authored material whose RTC- owned copyrights were allegedly being infringed. SS-86. As part of the raid, RTC ran a word search of Mr. Wollersheim's computer.

Amazingly, among the keywords used in the search were "Swearinger" (the judge in Mr. Wollersheim's case against CSC) and "O'Reilly" (Mr. Wollersheim's attorney in that case). SS-87.

Another of RTC's search terms was "Leipold," referring to Mr. Wollersheim's attorney in this case. SS-87. The results of such a search, as RTC and its counsel well knew, could only have turned up material relevant to Mr. Wollersheim's litigation with CSC (material protected by the attorney-client privilege or attorney work product doctrine) -- but absolutely nothing authorized by the magistrate's narrow order allowing a search for specific, copyrighted material. Nor could RTC's use of these search terms have produced anything relevant to its current claims against Mr. Wollersheim.

Moreover, attached to RTC's verified first amended complaint in Wollersheim V is a copy of a "confidentiality agreement"

executed solely between CSC and Mr. Wollersheim. SS-89. That RTC has a copy of that agreement, and claims to be its beneficiary, is telling; it seems even Scientology's corporations themselves forget they are supposed to be separate.

3. EQUITY DEMANDS THE FINAL JUDGMENTS AGAINST PLAINTIFF CSC, AWARDING COSTS AND ATTORNEYS FEES TO DEFENDANT WOLLERSHEIM, BE AMENDED TO INCLUDE RTC AND CSI AS JUDGMENT DEBTORS BECAUSE THE EVIDENCE FIRMLY ESTABLISHES RTC AND CSI HAVE MANIPULATED AND CONTROLLED CSC'S LITIGATION WITH LARRY WOLLERSHEIM FROM THE BEGINNING.

California law strongly supports Mr. Wollersheim's effort to amend the June 3, 1994 and November 8, 1996 judgments awarding him costs and fees, to add RTC and CSI as judgment debtors.

a. Courts Have Broad Discretion to Amend Judgments to Add Additional Judgment Debtors as Justice Requires.

First, the Court is vested with discretion to use all means to carry its jurisdiction into effect by Code of Civil Procedure 187. Included among the courts' powers under Section 187 is the authority to amend a judgment at any time to add additional judgment debtors. (NEC Electronics Inc. v. Hurt (1989) 208 Cal.App.3d 772, 778; Mirabito v. San Francisco Dairy Co. (1935) 8 Cal.App.2d 54, 57.)

Moreover, "[t]he greatest liberality is to be encouraged in the allowance of such amendments in order to see that justice is done." (Carr v. Barnabey's Hotel Corp. (1994) 23 Cal.App.4th 14, 20.)

Justice cries out for amendment of the judgments awarded to Mr. Wollersheim in this case. As the Court of Appeal observed in upholding the anti-SLAPP judgment of dismissal herein:

"...an examination of the history of the underlying litigation reveals that the instant action is consistent with a pattern of conduct by the Church to employ every means, regardless of merit, to frustrate or undermine Wollersheim's petition activity." (Church of Scientology of California v. Wollersheim, supra, 42 Cal.App.4th 628, 648; emphasis added.)

One of the many means Scientology has used to undermine Mr.

Wollersheim's victories is the "corporate reorganization." It is no coincidence that the razing of CSC in favor of RTC and CSI began just after the Wollersheim I case was filed and was completed just before it went to trial.

The case at bar is simply a further manifestation of Scientology's continuing campaign to punish Mr. Wollersheim. The only way justice will be done is to deny RTC and CSI the fruit of their endeavors.

b. Mr. Wollersheim's Mountain of Evidence Far Exceeds the Burden of Proof He Must Sustain to Prevail.

The standard of proof in a motion of this type requires the moving party to overcome the presumption of the separate existence of the corporate entity. (Mid-Century Insurance Co. v.

Gardner (1992) 9 Cal.App.4th 1205, 1212.) The judgment is properly amended where the movant shows substantial evidence that a party's alter ego should be held accountable for that party's wrong. (NEC Electronics, supra, 208 Cal.App.3d at p. 777;

Ukegawa Brothers v. Agricultural Labor Relations Board (1989) 212 Cal.App.3d 1314, 1323.)

By any measure, Mr. Wollersheim's evidence is substantial, providing dramatic proof that Scientology is but one organization, run by its Sea Org officials. Moreover, the veracity of the evidence can hardly be challenged: the overwhelming majority of it comes from the mouths, and word processors, of Scientology officials themselves.

c. Application of the Alter Ego Doctrine is Warranted Where, as Here, a Sufficiently Strong Unity of Interest Exists Between the Entities in Question and Failure to Apply the Doctrine Would Lead to an Inequitable Result.

In general, when determining whether to employ the alter ego doctrine, two factors should be considered: 1) whether there is such unity of interest and ownership that the separate personalities of the corporation and the purportedly "distinct"

entity no longer exist, and 2) whether, if the acts are treated as those of the corporation alone, an inequitable result will follow. (Sheard v. Superior Court (1974) 40 Cal.App.3d 207, 211- 212.)

There is no litmus test to determine when an entity's corporate veil should appropriately be pierced; rather, the result depends on the circumstances of each particular case.

(Mid-Century Insurance Co., supra, 9 Cal.App.4th at p. 1212.)

Where some conduct amounting to bad faith makes it inequitable for an entity to hide behind the corporate veil, the alter ego doctrine is properly employed. (Id. at p. 1213.)

RTC and CSI have surely set a new standard for conduct amounting to bad faith. Intent on keeping Scientology "impregnable," they have used CSC as both a sword and a shield.

After first gutting it of assets to thwart the enforcement of Mr.

Wollersheim's hard-won multimillion dollar judgment, they then used it as a weapon to, in the appellate court's words, "bludgeon [Mr. Wollersheim] into submission." (CSC v. Wollersheim, supra, 42 Cal.App.4th at p. 649.) There can be no more appropriate circumstances than these in which to amend a judgment to add alter egos.

1. The Absolute Unity of Interest Between CSC, RTC and CSI Forecloses the Notion That They Retain Separate Personalities.

As has been conclusively demonstrated, there is just one Scientology, a clandestine society proffering imaginary corporate lines to keep the public confused and at bay. Even if its corporations are taken at face value, it is clear the same Sea Org officers, starting with David Miscavige, wield power over all the entities. Plainly, these Sea Org leaders have, through RTC and CSI, financed and controlled CSC's litigation with Mr.

Wollersheim.

None of the cases located by Mr. Wollersheim's counsel, in which the alter ego doctrine was held applicable, even come close to involving the volume or quality of evidence Mr. Wollersheim places before the Court. For example, in Carr v. Barnabey's Hotel Corp, supra, the plaintiff sued a corporation (Barnabey's) and obtained a judgment, later learning a partnership (Peppercorn) was the true principal. In upholding the amendment of the judgment adding Peppercorn as a defendant, the court first noted that Peppercorn's failure to advise the plaintiff an entity other than Barnabey's owned the hotel in question "approached a fraud on the court." (23 Cal.App.4th at p. 20.) The court further observed:

"The same lawyer represented Barnabey's and Peppercorn.

Although the record does not tell us who paid for the defense, we know that Barnabey's, in whose name the defense was conducted, had no assets." (23 Cal.App.4th at p. 21.)

Here, there is an overlap in legal representation between CSC, RTC and CSI, as was true in Carr. Also, as in Carr, CSC's assets have long since been depleted, leaving it unable to pay its litigation expenses. But here, there is more: we do know who has paid CSC's legal bills -- CSI. Finally, and importantly, the dissipation of CSC's assets was undertaken for the specific purpose of warding off Mr. Wollersheim's anticipated collection efforts. Thus, the evidence at bar is much weightier, and demonstrates a greater degree of fraud, than that which warranted the amendment of the judgment in Carr.

Indeed, Mr. Wollersheim's evidence suffices no matter which of California's published alter ego cases is used as the yardstick. For example:

In Thomson v. L. C. Roney & Co. (1952) 112 Cal.App.2d 420, a corporation was held to be the alter ego of the defendant/judgment debtor, where 1) all of defendant's assets had been transferred to the corporation prior to commencement of the action, but the entities retained an interlocking directorate and mutual officers and gave no outward indication of a change; 2) the corporation had furnished defendant with large sums of money without formal resolution; 3) the corporation had the power to take action which was binding on defendant; and 4) both entities had the same attorney. (112 Cal.App.2d at pp. 428-429.)

In Mirabito v. San Francisco Dairy Co. (1935) 8 Cal.App.2d 54, a corporation which had assumed the defendant's assets was its alter ego, where: 1) the entities shared a president, vice-president and secretary; 2) the secretary had verified the answer; and 3) the defendant was a "nonoperating" company but appeared active because the alter ego corporation conducted business in the name of the defendant. (8 Cal.App.2d at p. 58.)

In Jack Farenbaugh & Son v. Belmont Construction (1987) 194 Cal.App.3d 1023, the doctrine was properly applied to an individual who, according to the declaration of movant's attorney, participated in the litigation by taking a deposition, trying the case and attending the judgment debtor exam. (194 Cal.App.3d at p. 1030.)

As in these cases, Mr. Wollersheim's evidence establishes that: RTC and CSI officials actively participated in his litigation with CSC; CSC is a nonoperating shell funded by CSI;

the same attorneys have represented all three entities (in some cases simultaneously); and, all of the corporations share common goals. Of course, Mr. Wollersheim has an additional bit of crucial evidence: CSC was gutted, and RTC and CSI were formed, specifically to defraud Mr. Wollersheim and others.

Thus, the "unity of interest" factor, as set forth in Sheard v. Superior Court, supra, weighs solidly in favor of defendant Wollersheim.

/ / / 2. The Equities Fall Entirely On the Side of Defendant Wollersheim.

The unity of interest between RTC, CSI and CSC having been solidly established, the next question under Sheard is whether an inequitable result will follow if the judgments are not amended.

Initially, in weighing the equities, it is crucial to remember that Mr. Wollersheim is the defendant in this lawsuit. Unlike the plaintiffs in the alter ego cases cited infra, he had no role in determining which entity would be on the opposite side of the lawsuit from him!

If Mr. Wollersheim knew from the outset of this case that RTC and CSI were the proper plaintiffs, there was initially no reason for him to seek the court's affirmation of the point; he was not the party seeking redress. It is only since the judgments awarding him costs and attorneys fees have become final that Mr. Wollersheim has had a stake in seeing that the proper parties are present in this litigation.

Inequity has stalked Mr. Wollersheim for the entire history of his involvement with Scientology. He has weathered years of brutal litigation with the organization -- bravely prosecuting a claim that a unanimous jury and every subsequent reviewing court has agreed was worth multi-millions of dollars -- only to be harassed at every turn. Rather than receiving the proceeds from his fairly-won judgment, he has received four summons and complaints, three of which have been ruled meritless so far.

Nearly eleven years after the verdict he persevered to win, Larry Wollersheim has yet to collect a dime.

Instead, he has dodged another bullet, launched at him in the form of this case, and has come away with two more money judgments in his favor.

The analysis of the Court of Appeal, examining the history of this litigation and the underlying Wollersheim I matter, reveals that the inequity wrought by Scientology's behavior is so severe as to have undermined Mr. Wollersheim's constitutional rights:

"The Church argues that it has every right to exhaust its legal remedies, including appeal rights. We agree.

However, when a litigant continuously and unsuccessfully uses the litigation process in filing unmeritorious motions, appeals and lawsuits, such actions have constitutional implications..." (CSC v.

Wollersheim, supra, 42 Cal.App.4th at p. 649.)

The unmeritorious motions, appeals and lawsuits about which the appellate panel spoke were not financed by the "indigent"

CSC; they were paid for by CSI. They were managed by RTC. They have caused Mr. Wollersheim untold years of torment and, as the CSC v. Wollersheim panel found worthy of note, the litigation has cost him at least $300,000 of his own money and put him another $900,000 in debt. (Id. at p. 649, fn. 6.)

There can be nothing inequitable about saying "Enough!" to Scientology's "jiggery, pokery" tactics and holding the true parties, RTC and CSI, responsible for the judgments rendered in this case. An observation by the court in Mirabito v. San Francisco Dairy Co., supra, is particularly apt in this case:

"To hold otherwise upon the facts herein would be to deny respondent the fruits of fairly contested litigation, place a premium upon acts and conduct which have misled a litigant, and frustrate the very purpose of our jurisprudence." (8 Cal.App.2d at p. 60.)

d. Granting This Motion Will Not Offend the Due Process Rights of RTC or CSI.

The amendments Mr. Wollersheim seeks do not give rise to due process concerns because, as alter egos of CSC, RTC and CSI controlled this litigation and thus were virtually represented in the lawsuit. (See, Ukegawa Brothers, supra, 212 Cal.App.3d at pp. 1322-1324; Carr, supra, 23 Cal.App.4th at pp. 21-22.)

In Farenbaugh & Son v. Belmont Construction, Inc., supra, 194 Cal.App.3d 1023, the appellate panel noted the "new"

defendant's active participation in the original trial "satisfies the elements of fair trial as required by due process." (194 Cal.App.3d at p. 1031.)

To add RTC and CSI as plaintiffs and judgment debtors will not be to add new parties; rather, it will merely serve the equitable purpose of correcting the judgment to reflect the names of the true parties who took part in the litigation all along.

(See, i.e., NEC Electronics, supra, 208 Cal.App.3d at p. 778.)

4. CONCLUSION.

As the evidence conclusively demonstrates, Mr. Wollersheim's victories in this case have been won against at least three entities, RTC, CSI and CSC, even though only one of them has cared to call itself a plaintiff. RTC's and CSI's control of this case having been firmly established, and the equities falling entirely on the side of Mr. Wollersheim, he respectfully requests that the Court grant this motion and add Religious Technology Center and Church of Scientology International as judgment debtors on the two final judgments dated June 3, 1994 and November 8, 1996.

Dated: April __, 1997 HAGENBAUGH & MURPHY By____________________________ DANIEL A. LEIPOLD Attorneys for Defendant, Larry Wollersheim

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