Larry Wollersheim v. Church of Scientology of California
Published: Dec. 13, 1997 | Result Date: Oct. 29, 1997 | Filing Date: Jan. 1, 1900 |Case number: C332027 – $6,025,850
Judge
Court
L.A. Superior Central
Attorneys
Plaintiff
Robert F. Donohue
(Taylor Blessey LLP)
Craig J. Stein
(The Stein Law Firm)
Defendant
Facts
Plaintiff, Lawrence Wollersheim, a former member of defendant Church Scientology of California (CSC), initially obtained a $30 million verdict in compensatory and punitive damages against defendant in 1986. Prior to trial, Scientology reorganized its corporate structure, wherein the Church of Scientology International (CSI) became the new "mother church" replacing CSC. Religious Technology Center (RTC) was formed in 1982 and became the owner and protector of Scientology service marks and products. CSC became an inactive corporation with no income, assets, employees or business. At trial in 1986, Plaintiff alleged that defendant intentionally and negligently inflicted severe emotional injury on him through the use of certain practices during his years in Scientology, which aggravated his mental condition. These practices included "auditing" wherein Plaintiff was forced to undergo a strenuous regime for six weeks aboard a ship maintained by defendant. Although plaintiff attempted to escape, he alleged he was seized by Scientology members, who held him captive until he agreed to continue with these practices. Additionally, plaintiff allged that Scientology auditors convinced him to "disconnect" from his family, which meant he was no longer to have any contact with them. Plaintiff also claimed the defendant engaged in "fair game," a practice of retribution and threatened retribution against members who left or otherwise posed a threat to the organization. Plaintiff claimed this practice forced him into continued participation in Scientology's other practices which were harming him emotionally. Plaintiff, then represented by different counsel, sued defendant alleging fraud and intentional and negligent infliction of emotional injury. In 1986, a jury issued a verdict for $30 million in compensatory and punitive damages. On appeal, the Second District found substantial evidence to support its decision that defendant had committed the tort of intentional infliction of emotional injury against plaintiff and that there was sufficient evidence of "auditing" and other practices conducted in a coercive environment. The appeals court also found that none of the practices were "voluntary religious practices otherwise entitled to constitutional protection under the First Amendment religious freedom guarantees." However, in 1989, the appeals court reduced judgment to $500,000 in compensatory and $2 million in punitive damages. Both sides appealed to the California Supreme Court which declined review. Both sides appealed to the U.S. Supreme Court which denied plaintiff's petition but granted CSC's petition and remanded to the state appellate court for reconsideration on the punitive damages issue following its decision in Pacific Mut. Life Ins. Co. v. Haslip. On remand, the appellate court essentially affirmed its prior decision. The U.S. Supreme Court denied Scientiology's petition for review, and the judgment became final in March 1994. In 1993, in a separate lawsuit, Scientology sued Wollersheim to set aside the judgment on the ground of claimed judicial bias during trial. The trial court granted Wollersheim's special motion to strike the complaint pursuant to the state's anti-SLAPP suit (strategic lawsuits against public participation). The appellate court affirmed the judgment and an award of attorney fees for $130,506.71, holding among other things, that the history of the underlying litigation revealed that Scientology's action against Wollersheim was "consistent with a pattern of conduct by the church to employ every means, regardless of merit, to frustrate or undermine [Wollersheim's] petition activity." Wollersheim was awarded an additional $240,000 in attorney fees on appeal. Plaintiff, through present counsel, Craig Stein, Daniel Leipold, Robert Donohue and Cathy Shipe, then moved to amend the judgment rendered agaisnt defendant CSC to include real party defendants and judgment debtors, CSI and RTC.
Settlement Discussions
The plaintiff made a C.C.P. º998 settlement demand for $______________. The defendant made a C.C.P. º998 offer of compromise for $______________ .
Result
FACTS CONTINUED: Plaintiff claimed that CSC's reorganization occurred partly to prevent him from collecting his judgment against CSC. RESULT: The trial court concluded that defendants' leaders "acted in bad faith which would result in an injustice to plaintiff if CSI's and RTC's corporate separateness were maintained and they were not added as judgment debtors. In a 6-page order issued October 29, 1997, the court concluded that CSI and RTC were the alter egos of CSC. The court based its findings on a number of factors including that CSI and RTC had sufficient unity of interest and ownership with CSC, that CSI and RTC controlled the litigation, that CSI financed the lawsuit, used the same counsel, that RTC's chairman and highest officer supervised and controlled the defense and ordered the destruction of certain files the court ordered CSC to produce to plaintiff. Consequently, plaintiff was permitted to amend the judgment to include CSI and RTC, the real party defendants and judgment debtors. On Nov. 17, 1997, defendant CSI posted a bond in the amount of $9,045.229.40 to undertake an appeal of the reported decision.
Other Information
The result was reached approximately 17 years after the case was filed.
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