Title: Reply to Opposition
Motion of CSI to renewed motion to amend judgement--Wollersheim
Author: LMT News <firstname.lastname@example.org>
Date: Mon, 31 Jan 2000 18:34:43 -0500
Daniel A. Leipold, State Bar No. 77159
Cathy L. Shipe, State Bar No. 156453
LEIPOLD, DONOHUE & SHIPE, LLP
960-A West Seventeenth Street
Santa Ana, CA 92706
Telephone: (714) 796-1555
Facsimile: (714) 796-1550
Craig J. Stein, State Bar No. 98041
GARTENBERG JAFFE GELFAND & STEIN LLP
11755 Wilshire Boulevard, Ste. 1230
Los Angeles, CA 90025-1518
Telephone: (310) 479-0044
Ford Greene, State Bar No. 107601
HUB LAW OFFICES
711 Sir Francis Drake Blvd.
San Anselmo, CA 94960
Telephone: (415) 258-0360
Attorney for Plaintiff,
LAWRENCE DOMINICK WOLLERSHEIM
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES
LAWRENCE DOMINICK WOLLERSHEIM Plaintiff, vs.CHURCH OF
SCIENTOLOGY OF CALIFORNIA Defendant ))))))))))))) Case
No.: C 332 027REPLY TO OPPOSITION OF CHURCH OF SCIENTOLOGY INTERNATIONAL TO
RENEWED MOTION TO AMEND JUDGMENTDate: February 18, 2000 Time: 8:30
1. PRELIMINARY NOTE.
No doubt because it lost the first time this motion was heard, Church of
Scientology International ("CSI") submits a greatly more voluminous filing
for this, its second bite at the apple.
Yet, despite the increase in rhetoric, the basic theme is the same.
Respondents spend much paper on largely incompetent, self-serving and/or
demonstrably false declarations, in an absurd effort to make themselves seem
the victims of Mr. Wollersheim. This, despite the fact that both CSI and
RTC have verifiably spent over a decade, and untold millions of dollars,
devising and executing novel ways of keeping Mr. Wollersheim tied up in the
courts. They did this while the present case was in its pre-trial phase,
and they have done it without pause ever since. Quite obviously, there is
only one reason why: to avenge Mr. Wollersheim's lawsuit against CSC.
Just as before, CSI's opposition actually adds to the mass of evidence
supporting plaintiff's alter ego claim. The most blatant example of this
regards Attorney William Drescher, who now represents CSI in opposition to
the renewed motion but has previously represented CSC in this same case.
Mr. Drescher represented CSC's President Levin at his 1995 deposition, held
in connection with Mr. Wollersheim's collection effort. Seven months
earlier, in October 1994, Mr. Drescher had also argued -- unsuccessfully --
on CSC's behalf that there was no existing judgment. Although the resulting
court order established that there was, indeed, a judgment, and that
interest on it had begun to accrue in 1986, Mr. Drescher and his cohorts
nevertheless went on to shop CSC's argument in a new department, moving for
an order setting the interest. For their efforts, CSC and Mr. Drescher were
sanctioned $3600; the fine was paid by CSI, Mr. Drescher's current client.
(Supplemental Declaration of Craig J. Stein submitted herewith, 10-11, 15,
21-22; and, Exhibits "O-99," "P-99," "T-99" and "DDD-99.")
Thus is seen not only the required unity of interest between CSI and CSC
(Mid-Century Insurance Co. v. Gardner (1992) 9 Cal.App.4th 1205, 1212), but
also the sort of overlapping legal representation that is highly relevant in
the alter ego analysis. (See, i.e., Carr v. Barnabey's Hotel Corp. (1994)
23 Cal.App.4th 14, 21.)
Still, the sharing of attorneys is mild in comparison to the outright
falsehoods CSI proffers about its ostensibly disinterested status in this
litigation. As shown below, dramatic evidence newly located by Mr.
Wollersheim unmistakably demonstrates that CSI has been here all along --
intimately involved in determining CSC's legal strategy.
Just as CSI's factual assertions are baseless, its legal arguments lack
substance. This Reply addresses both aspects of CSI's Opposition.
2. CSI'S BULKY SUBMISSION CONTAINS DUBIOUS ASSERTIONS THAT ARE EXPOSED
AS FOLLY BY ASTONISHING NEW EVIDENCE SHOWING HOW CLOSELY CSI GUIDED CSC'S
In rebutting the factual contentions made in CSI's opposition,
plaintiff begins with CSI's central assertion: that it "had no role in this
case." (CSI Opp., p. 11.)
CSI's effort to defeat Mr. Wollersheim's motion rests mainly on the
declaration of CSC's president, Neil Levin. (CSI Opp., p. 12, and
respondents' joint Exhibit "5".) In it, Levin boldly (and incompetently,
inasmuch as he acknowledges having held no position of authority at CSC
until three years post trial) swears "[n]o employee, officer or director of
RTC or CSI participated in formulating trial strategy or defense tactics in
this matter." (Levin Dec., 11.)
Given Mr. Levin's seeming certainty in this regard, it should be
inconceivable that CSI's president, Heber Jentzsch, would have been
videotaped in the wake of the trial, mocking the jury and its $30 million
verdict against CSC, in front of an audience of Scientologists -- and
disclosing details of the post-trial strategy. Yet, that is precisely what
happened, as Mr. Wollersheim's new, irrefutable video evidence shows.
(Exhibits "XX-99" and "III-99" submitted herewith, and accompanying
Supplemental Decl. of Daniel A. Leipold, 21-24.)
In the videotape, Jentzsch implicitly acknowledges having been present at
the trial ("we could hear your shouts of 'Religious Freedom Now' through the
walls on the fourteenth floor!"). And, there can be no mistake about what
CSI's Jentzsch means when he talks of injustice committed against "us" -- or
about the follow-up measures undertaken by "our legal people."
Moreover, despite doggedly insisting it was uninvolved in financing CSC's
defense, CSI fails to even address -- much less rebut -- evidence showing
that funds for Scientology litigation, including CSC's, came from a "central
reserve system" run by CSI staff members. (See, Exhibit "B" to original
motion, pp. 151572, 151574, 151578.) Indeed, CSI cannot rebut this
evidence, because it was taken directly from its own petition for tax-exempt
status submitted to the IRS.
Thus, even if Mr. Wollersheim possessed no other evidence at all, the
admissions of CSI President Jentzsch and the funding mechanism detailed in
CSI's IRS application would, when viewed in light of applicable case law,
suffice to demonstrate the alter ego relationship of CSI and CSC in this
Of course, Mr. Wollersheim has submitted additional supporting evidence -- a
veritable mountain of it. Still, as CSI acknowledges, Mr. Wollersheim need
not prove that CSI is CSC's alter ego for all purposes (even though a
thorough review of the record hardly leaves this in doubt ). Instead, Mr.
Wollersheim's only burden is to show by a mere preponderance of the evidence
that CSI "had control of the previous litigation, and thus [was] virtually
represented in the lawsuit." (Hall, Goodhue, Haisley & Barker, Inc. v.
Marconi Conference Center Board (1996) 41 Cal.App.4th 1551, 1555.)
Though it professes disdain for Mr. Wollersheim's vast evidentiary
base, CSI directly disputes only a tiny fraction of the approximately 60
items of evidence plaintiff has submitted before now, most of which consists
of utterances by Scientology officials themselves. Thus, even if CSI's
opposition were entirely valid, there would still be much more than a mere
preponderance weighing in plaintiff's favor. Yet, CSI's opposition is not
valid, because it is based largely on dubious assertions. To wit:
A. Respondents' Suggestions That Jesse Prince And Stacy Young Lack
Credibility Contradict Scientology's Own Prior Recognition Of Their
Knowledge And Expertise.
Both Mr. Prince and Ms. Young served Scientology for years in positions of
high accountability. Mr. Prince, in particular, occupied Scientology's top
echelons, especially with RTC. His resultant proficiency on the subject of
Scientology has made him a sought-after expert witness since his departure
from the organization.
Similarly, Ms. Young, who held a position of great trust as a Scientology
Sea Org member and public relations specialist for many years, gained rare
knowledge about the inner workings of the sect. She, too, has performed
expert witness services in Scientology litigation since leaving.
In these capacities, Mr. Prince and Ms. Young have been reimbursed for
expenses and/or compensated for their time -- just as CSI's and RTC's
attorney declarants most certainly have been. There is nothing
inappropriate about remunerating experts.
Further, as CSI's evidence shows, Ms. Young's supposed "complete ignorance
about all Scientology corporate affairs" (CSI Opp., p. 4) is merely a lack
of memory about specific dates and names. CSI and RTC do not -- indeed,
they cannot -- dispute the knowledge of actual events to which she has
Nor is respondents' attempted renunciation of Jesse Prince availing. As
more fully set forth in plaintiff's reply to RTC's opposition, Mr. Prince's
expertise has been acknowledged, on tape and in public, by, inter alia,
Scientology's lawyer, Earle Cooley, and David Miscavige himself.
B. Respondents' Ineffectual Attempt To Repudiate Vicki Aznaran's Prior
Sworn Testimony Ignores The Substantial Historical Base That Corroborates
Respondents urge the Court to disregard the 1990 and 1993 Vicki
Aznaran declarations plaintiff has submitted. In them, among other things,
Ms. Aznaran admits she destroyed Wollersheim-related documents in
disobeyance of the Court's order -- while she was an RTC official, and at
David Miscavige's behest. Although those declarations are detailed, precise
and corroborative of other evidence Mr. Wollersheim presents, CSI and RTC
insist they are useless because Ms. Aznaran has retracted her statements.
Yet, the declarations respondents submit in support of their
argument are peculiar in several respects. First, CSI and RTC offer no less
than five declarations of Ms. Aznaran -- all different, and, curiously, all
signed on the same day: May 19, 1994. The timing of these five "new"
declarations is remarkable, inasmuch as all were signed on the very same day
Ms. Aznaran "settled" her litigation against Scientology behind the backs of
her attorneys of record. (Supplemental Decl. of Ford Greene at 2-10.)
Of particular interest are the contradictions between statements in Ms.
Aznaran's pre-settlement sworn testimony and FBI interview and those in her
post-settlement "recantations." (Exh. "CCC-99," submitted herewith.) While
the former is full of detail and is corroborated by Joseph Yanny, Jesse
Prince and the Youngs, the latter is general and conclusory.
Moreover, though respondents ask the Court to disregard Ms. Aznaran's prior
sworn testimony, they nonetheless would have the Court give credence to her
now-presented opinion that Stacy Young lacks Scientology expertise.
Given Scientology's well-known and documented use of intimidation tactics to
control disaffected members, a highly plausible explanation for Ms.
Aznaran's turnabout is that she was cajoled into signing the declarations
CSI and RTC now present. Copious evidence of Scientology's pattern and
practice of harassment, including the L. Ron Hubbard-authored policy of
"Fair Game," is in the record now before the Court. In fact, such tactics,
which have also been acknowledged time and time again by other courts,
specifically led the appellate panel in Wollersheim IV to comment that:
"... 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 v. Wollersheim
(1996) 42 Cal.App.4th 628, 648.)
In these circumstances, it is profoundly more reasonable to credit
the 1990 and 1993 Aznaran declarations than to give credence to the five
"new" ones respondents offer. Given the totality of the circumstances, the
original declarations are inherently more trustworthy. It is within the
province of this Court to weigh the evidence and determine which of it to
credit in the context of this proceeding (Associated Vendors Inc. v. Oakland
Meat Co., Inc. (1962) 210 Cal.App.2d 825, 836), and Mr. Wollersheim urges
that "new" Aznaran declarations should properly be discounted.
C. Respondents' Self-Serving Declarations Do Not Vitiate The Weight Of
Evidence Showing Scientology's Corporate Re-Organization Was Calculated Only
Frustrate The Government And Judgment Creditors Like Lawrence Wollersheim.
Respondents' self-serving declarations are ineffective to refute Mr.
Wollersheim's detailed showing that the corporate reorganization by which
CSI and RTC were created intentionally left CSC without any purpose beyond
serving such wrongful purposes as that of a litigation sword and shield.
Indeed, most of respondents' evidence is shown on examination to be devoid
of reason or credibility. To address each instance would mean the
submission of a book rather than a brief; instead, Mr. Wollersheim cites
three examples here (and respectfully invites the Court to review the
concurrently submitted declarations of Robert Vaughn Young and Jesse Prince
(Supplemental Declaration), which meticulously expose the fantasy woven by
respondents' collective "evidence"):
· In dismissing Mr. Wollersheim's evidence about the "MCCS" corporate
reorganization plan as "unavailing," CSI refers to an interview with one
Laurel Sullivan (CSI Exh. 18, Walsh Decl., 4-5), claiming Ms. Sullivan's
comments constitute proof that MCCS was "scrapped." Yet, according to a
1984 sworn declaration of Ms. Sullivan (submitted herewith as Exhibit
"AA-99"), what was denominated the "MCCS" process was interrupted only
because of her disagreement with David Miscavige about how to best protect
the then-living L. Ron Hubbard. As Ms. Sullivan declared, the ensuing
corporate reorganization did nothing to alter the fact that "complete
control" of Scientology was exercised by its founder -- and Miscavige's
predecessor in the Sea Org -- L. Ron Hubbard. (Exh. "AA-99," Sullivan
· Although acknowledging they were the sole plaintiffs in Wollersheim
II, CSI and RTC insist there was nothing untoward about claiming as an item
of damages the judgment against CSC from this case. The reason, they say,
is because CSC was a party to the case with which Wollersheim II was
consolidated, RTC v. Scott. (See, RTC Opp., p. 11.) They thus absurdly ask
the Court to believe that CSC sued someone named Robin Scott in a different
case and, in so doing, claimed as an item of its damages the jury's verdict
against it from this case.
· Primarily through the declaration of its own Director, Michael
Rinder, CSI spins the 1981 corporate reorganization as a benign and
legitimate process instituted after criminal conduct by "an autonomous
renegade unit" -- a group that included L. Ron Hubbard's wife, Mary Sue --
caused "a period of upheaval." (CSI Opp., p. 7.) In so doing, CSI ignores
the wealth of independent evidence before the Court -- and multiple
published opinions -- which expose the reorganization as a fraud. (See,
i.e., Church of Spiritual Technology v. U.S., supra, 26 Cl.Ct. 713, aff'd.
991 F.2d 812 (Fed. Cir. 1993.); U.S. v. Zolin (9th Cir. 1990) 905 F.2d
3. CSI MISCONSTRUES THE LAW AND OFFERS UNAVAILING ARGUMENTS AS A
A. The Case On Which CSI Relies In Suggesting Plaintiff's Alter Ego
Theory Is "Unsound" Is Wholly Distinguishable.
Roman Catholic Archbishop of San Francisco v. Superior Court (1971) 15
Cal.App.3d 405, on which CSI relies for the proposition that Mr.
Wollersheim's alter ego theory has been "judicially rejected as unsound," is
entirely unlike the case at bar. There, despite having contracted with a
Swiss monk, the plaintiff hoped to attach liability for the claimed breach
to the Archbishop of San Francisco. The attendant alter ego claim was based
solely on the fact that the Vatican controlled both the Swiss monastery and
the San Francisco diocese. (15 Cal.App.3d at pp. 408-409).
Crucially, the evidence in that case established that the Archbishop had had
no direct connection to either the contract at issue or the Swiss monk.
(Id. at p. 411.) Thus, although they shared a common leader, the Archbishop
and the Swiss order were not alter egos of each other, and the Archbishop
could not be held to answer for the actions of the breaching friar. (Id. at
Here, conversely, the same individuals weave in and out of the
corporations, according to the whims of the Sea Org. Particularly where this
litigation is concerned, the result is an incestuous Scientology soup in
which all corporate boundaries are lost in the broth. Neil Levin, CSC's
president and the director of CSI's legal department, serves as just one
Consequently, Mr. Wollersheim's alter ego motion is wholly unlike
that in the Roman Catholic Archbishop case. CSI and RTC are the alter egos
of CSC because, in Scientology, power to control the corporations is wielded
by the Sea Org, (and by David Miscavige as its autocrat ). Regarding this
case against CSC in particular, the Sea Org's power was directed through
officials at CSI and RTC.
B. CSI's Footnoted Reference To Due Process Concerns Presents
No Viable Argument For Conducting This Proceeding In A Bifurcated Fashion.
Though both respondents acknowledge the Court's July 16, 1999 offer to allow
live testimony at the hearing on the present motion (CSI Opp., p. 3 fn. 2;
RTC Opp., p. 3 fn. 2) neither of them elects to do so. Instead, they argue
in footnotes that this proceeding should be treated essentially as a summary
judgment one, in which the Court's only proper task is to determine the
existence of "triable issues of fact." (Ibid.)
Respondents thus hope to preserve a chance for yet another bite at the
apple. Yet, they cite no authority for their proposition. There is none.
In Rosenthal v. Great Western Financial Securities Corp. (1996) 14 Cal.4th
394, the California Supreme Court considered whether due process concerns
prevented the decision in an equitable proceeding from being made based on
declarations rather than live testimony. Like CSI and RTC, the Rosenthal
appellant argued that "when the declarations and documentary evidence
present a triable material factual dispute... the trial court must proceed
to a summary bench trial of the issues" and that "failure to resolve a
material issue of fact by an evidentiary hearing is an abuse of discretion."
(Id. at p. 414.)
The Supreme Court rejected this notion, holding instead that "[t]here is
simply no authority for the proposition that a trial court necessarily
abuses its discretion, in a motion proceeding, by resolving evidentiary
conflicts without hearing live testimony." (Ibid.)
Obviously, nearly every proceeding by which an alter ego defendant is bound
to a previously-rendered judgment is one in which the issue is contested.
Nonetheless, the court is well within its province under Code of Civil
Procedure Section 187 to make a final determination of the issue -- that is,
to make findings of fact -- by weighing the conflicting evidence presented
to it, whether in declaration form or by live testimony. (See, i.e.,
Schoenberg v. Romike Properties (1967) 251 Cal.App.2d 154.)
Despite these authorities, respondents claim they are constitutionally
entitled to a full trial with live witness testimony. If granted, their
request will launch yet another circus trial -- more than 15 years after the
conclusion of the first one. Most assuredly, it will be as long and drawn
out as they can cause it to be. Yet, their dogma aside, the Constitution
does not mandate the provision of such a trial.
The fallacy of respondents' position is that it is based on the false
premise that CSI and RTC are strangers to this litigation. As case after
case construing the alter ego doctrine notes, amendment of a judgment to add
an alter ego is
"...an equitable procedure based on the theory that the court is not
amending the judgment to add a new defendant but is merely inserting the
correct name of the real defendant.... Such a procedure is an appropriate
and complete method by which to bind new ... defendants where it can be
demonstrated that in their capacity as alter ego of the corporation they in
fact had control of the previous litigation, and thus were virtually
represented in the lawsuit." (Hall, Goodhue, Haisley & Barker, Inc. v.
Marconi Conference Center Board, supra, 41 Cal.App.4th at p. 1555; emphasis
In arguing the present fact-finding mission requires a live hearing,
respondents rely on a single phrase from Goldberg v. Kelly (1970) 397 U.S.
254. But, the only question before the Goldberg Court was whether a citizen
might be deprived of welfare before receiving a hearing. While holding that
a pre-termination hearing was required, the Court did not specify the
requirements of the "later constitutionally fair proceeding," since those
requirements were not at issue. (397 U.S. at p. 261.)
In Jack Farenbaugh & Son v. Belmont Construction, Inc. (1987) 194
Cal.App.3d 1023, the court affirmed an alter ego finding which was based on
documents filed by only the moving party, despite the responding party's
objection at the hearing. (194 Cal.App.3d at p. 1028.) Such a result is in
harmony with California's policy that "[t]he greatest liberality is to be
encouraged in the allowance of [alter ego] amendments in order to see that
justice is done." (Carr v. Barnabey's Hotel Corp., supra, 23 Cal.App.4th at
Despite the expected contrary assertions of CSI and RTC,
"[p]rocedural due process is a watchword, not the unwavering equivalent of a
formal hearing." (Greenholtz v. Nebraska Penal Inmates (1979) 442 U.S. 1,
C. Respondents' Collateral Arguments Invoking The Doctrine Of
Laches Fail Because They Are Judicially Estopped And Because The Court Had
No Jurisdiction To Amend The Judgment While It Was On Appeal.
Respondents' papers filed in connection with the present motion urge the
Court not to grant it because of plaintiff's purported inexcusable delay in
filing it. The doctrine of judicial estoppel, and the Court's absence of
jurisdiction during the pendency of CSC's appeal, preclude this argument.
1. As Late As December 1994, CSI's Lawyer Argued There Was No Judgment.
As noted, in CSC's October 1994 opposition to plaintiff's motion for the
appointment of a receiver to enforce his judgment, CSI's present attorney,
William Drescher, argued there was "no judgment." (Supplemental Decl. of
Craig J. Stein, 10, and Exh. "0-99.") After Judge Wayne, sitting in
Department 86 of this Court, rejected that argument in December 1994, CSC
filed the frivolous motion to set interest that led to Judge Leahy's $3600
sanction order. (Supplemental Stein Decl., 11, 15; and, Exh. "T-99.")
Incredibly, just before undertaking these antics, CSC, with financial
backing from CSI, took a wholly inconsistent position, filing a motion to
"Stay Enforcement of Judgment" when bringing the Wollersheim IV action. Of
course, this was the very same judgment they would soon claim did not exist!
(Supplemental Stein Decl., 12 and Exh. "Q-99.") The motion became moot when
the trial court dismissed Wollersheim IV pursuant to Code of Civil Procedure
Section 425.16, the "anti-SLAPP" statute.
Thus, while having once prayed for an order staying the enforcement of a
judgment it later claimed did not exist, Scientology now argues plaintiff
waited too long to enforce the very same judgment.
2. Judicial Estoppel Prevents Litigants From "Playing Fast And
Loose With The Courts."
The Doctrine of Judicial Estoppel, also known as the Doctrine of Preclusion
of Inconsistent Positions, is
"...invoked to prevent a party from changing its position over the course of
judicial proceedings when such positional changes have an adverse impact on
the judicial process.... The policies underlying preclusion of inconsistent
positions are general consideration[s] of the orderly administration of
justice and regard for the dignity of judicial proceedings.... Judicial
estoppel is intended to protect against a litigant playing fast and loose
with the courts." (Jackson v. County of Los Angeles (1997) 60 Cal.App.4th
171, 181 (citations omitted).)
Generally, judicial estoppel applies when: (1) the same party has taken two
positions; (2) the positions were taken in judicial or quasi-judicial
administrative proceedings; (3) the party was successful in asserting the
first position (i.e. the tribunal adopted the position or accepted it as
true); (4) the two positions are totally inconsistent; and (5) the first
position was not taken as a result of ignorance, fraud or mistake. (Id. at
Here, of course, the third factor (requiring that the party be successful in
asserting its first position) is not present, inasmuch as Scientology was
unsuccessful in arguing there was no judgment or, alternatively, that the
judgment should be stayed against enforcement. However, this does not
preclude the application of the doctrine. In anticipating the likelihood of
a situation such as the one now at bar, the Jackson court recognized that
judicial estoppel is an equitable doctrine and that, consequently,
circumstances may warrant its application even if the litigant's earlier
position was not adopted. (Ibid., fn. 8.)
If any case is ripe for applying the doctrine of judicial estoppel, surely
it is this one. The litigation history between the parties proves, beyond
a shadow of a doubt, that the Scientology entities will resort to any
gambit, whether meritorious or not, to both frustrate Plaintiff Wollersheim
and obstruct the judicial process. Of course, in examining the history of
this litigation, the Court of Appeal has already noted Scientology's use of
the litigation process to "bludgeon" Mr. Wollersheim into submission.
(Church of Scientology v. Wollersheim, supra, 42 Cal.App.4th at p. 649.)
The same court recognized the practical effect of these tactics: to so delay
and enlarge the litigation process as to cause Mr. Wollersheim to expend all
of the judgment in an effort to collect it. (Ibid.)
The equitable principal underlying judicial estoppel should in all propriety
be employed to preclude Scientology from prevailing on its laches claim.
3. The Court Lacked Jurisdiction To Amend The Judgment
Until All Appeals Were Final.
In their collateral pleadings, respondents suggest there are two
fallacies in plaintiff's argument that the Court lacked jurisdiction to
amend the judgment during the appellate process. Their suggestions are
One ground CSI and RTC asserts is found in California Rules of
Court, Rule 48(a) which provides, in part:
Whenever a substitution of parties to a pending appeal is
necessary, it shall be made by proper proceeding instituted for that purpose
in the superior court. (Emphasis added.)
This Court Rule is designed to support the substitution of a
"necessary party" -- for example, where one party to the action dies and a
personal representative takes the party's place, or the transferee of an
interest takes the place of the transferor, or a Guardian Ad Litem is
replaced. (9 Witkin, Cal. Procedure 4th Ed. Appeal § 175 at p. 232.) The
rule does not apply to the situation in which the judgment is amended
following entry pursuant to Code of Civil Procedure Section 187. In the
latter instance, by virtue of the statutory provision vesting the court with
"all the means necessary to carry [its judgments or orders] into effect...,"
the court is empowered to amend a judgment to make it speak the truth.
Moreover, respondents' reliance upon Jines v. Abarbanel (1978) 77
Cal.App.3d 702 is misplaced. In that case, the appellate panel expressly
stated that the trial court did not have jurisdiction to amend the judgment
following the filing of the appeal.
In particular, the Jines court stated, "(t)he issue here is whether
the superior court had the power to add the corporation as a party defendant
and judgment debtor after the judgment had been entered and an appeal
taken." On this issue the Jines panel held the trial court lacked such
power. (Id. at p. 715.)
Code of Civil Procedure Section 916(a) states:
Except as provided by Section 917.1 to 917.9, inclusive, and
in Section 116.810, the perfecting of an appeal stays proceedings in the
trial court upon the judgment or order appeal from or upon the matters
embraced therein or affected thereby, including enforcement of the judgment
or order, but the trial court may proceed upon any other matter embraced in
the action and not affected by the judgment or order.
In Laidlaw Waste Systems, Inc. v. Bay Cities Services, Inc. (1996)
43 Cal.App.4th 630, judgment was entered on August 26, 1993 and a notice of
appeal filed on October 19, 1993. On October 26, 1993, defendant Bay Cities
submitted a different proposed judgment, which was entered on October 28,
1993. Then, on January 28, 1994, the trial court, sua sponte, issued an
order setting aside the first judgment from August 1993 and replaced it with
the October 1993 judgment.
Holding that this action was beyond the trial court's jurisdiction,
the appellate panel noted the second judgment "...varie[d] materially from
the first judgment..." and said the trial court "...lost jurisdiction to
materially modify or vacate the first judgment after Laidlaw filed its
notice of appeal...." (Id. at 641; emphasis added.)
As the Laidlaw court recognized, the trial court cannot materially
alter a judgment following the filing of a notice of appeal. The Jines
court made the exact same determination.
In Jines, the court recognized that the issue before it was whether
the superior court "...had power to add ... a party defendant and judgment
debtor after... an appeal (was) taken." (Jines, supra, 77 Cal.App.3d at p.
715.) Having announced the issue, the Jines court held:
"The amendment to the judgment was sought and granted as a
change of substance: to impose liability on a distinct entity not previously
mentioned, and to grant relief not theretofore sought, considered or
ordered." (Ibid.; emphasis added.)
The court thus decided that adding a party not previously mentioned
substantively changed the judgment and as such, under Code of Civil
Procedure Section 916(a), the trial court was without the jurisdiction to so
amend the judgment. The court's statement that "(t)here was no legal basis
for the post-judgment order adding the corporation as a judgment debtor"
(id. at p. 917) is precisely correct, because the trial court did not have
the jurisdiction to change the "substance" of, or to "materially" alter, the
judgment following the perfection of the appeal. The Jines court's
discussion of "alter ego" theories is nothing more than dicta.
Simply stated, pending appeal, "...the trial court has no power to
amend or correct the judgment." (Huskey v. Berini, (1955) 135 Cal.App.2d
613, 617; citations omitted.) Thus, plaintiff could not have moved to amend
his judgment during the appellate process -- one that, even according to
CSC's own filing, was extant at least until the Notice of Final Judgment was
filed in 1994. (See, Exhibit "V" to original motion.)
Having solidly demonstrated CSI's status as CSC's alter ego in this
case, Plaintiff Wollersheim respectfully submits that his motion to amend
the judgment must, in equity, be granted.
DATED: January 14, 2000
LEIPOLD, DONOHUE & SHIPE, LLP
CATHY L. SHIPE
Attorneys for Plaintiff,