25 Years Later, a High-Profile Superior Court Case Is Still on the Active List

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A jury trial is slated to start in Los Angeles Superior Court Tuesday in a case in which an attorney who failed to secure a written representation agreement is seeking to recover the reasonable value of her services.

So far, that probably seems hum drum. What makes this case worthy of note is that the proceeding will take place in Case No. C332027—which was filed on July 28, 1980.

The name of this 25-year-old case will probably sound familiar. It’s Wollersheim v. Church of Scientology. Five Court of Appeal opinions have come in the case (including an unpublished one not discussed here), and action was taken in the case at one point by the U.S. Supreme Court.

The plaintiff, Larry Wollersheim, is an ex-Scientologist. He sued the church for severe emotional distress based on its brainwashing of him, and won. On May 9, 2002, the church filed a cross complaint in interpleader, depositing with the clerk of the court the sum of $8,674,843, the amount of the judgment plus interest.

Attorney Leta Schlosser is seeking a large chunk of money—it’s not clear how much—as recompense for legal services she performed for Wollersheim during the period from about February 1990 though May 2002. She has already received $100,000.

Before getting into the pending proceeding, let’s go back to the start. Wollersheim, who had long suffered from manic depression, joined the church in 1969. That, he was to find out, was a mistake.

Most churches seek to solidify family relationships. Not the Church of Scientology. Using coercive techniques, it induced Wollersheim to “disconnect”—that is, cease all contact with—his wife, parents, and other family members.

Wollersheim was held captive on a ship, prohibited from seeking help for his mental problems from a doctor, psychiatrist or priest, and later forced into bankruptcy through actions in retaliation for his leaving the church in late 1979 or early 1980.

Following a 94-day trial, a jury in 1986 awarded Wollersheim $5 million in compensatory damages and $25 million in punitive damages. Div. Seven of this district’s Court of Appeal, in a 1989 opinion by Justice Earl Johnson Jr., affirmed the judgment for Wollersheim on his cause of action for intentional inflection of emotion distress, but pared the award to half a million dollars in compensatory damages and $2 million in punitive damages.

As to the compensatory damages, Johnson wrote:

“Wollersheim’s psychological injury although permanent and severe is not totally disabling. Moreover, even Wollersheim admits Scientology’s conduct only aggravated a preexisting psychological condition; Scientology did not create the condition. While the jury awarded Wollersheim $5 million in compensatory damages, we determine the evidence only justifies an award of $500,000.”

A $25 million punitive-damage award, he said, would be incommensurate with the compensatory damages.

The California Supreme Court denied review. However, the United States Supreme Court granted certiorari, vacated the judgment, and remanded the case to the Court of Appeal for consideration of the constitutionality of the punitive-damage award in light of a U.S. high court ruling filed two weeks earlier.

The ball back in its court, Div. Seven in 1992 determined that the punitive-damage award in favor of Wollersheim, as slashed, met federal constitutional standards. The $500,000/$2 million award was reinstated.

The case, 12 years after it was filed, now appeared to have reached its conclusion.

Wrong.

The California Supreme Court this time granted review. While the matter was pending in that court, the church in 1993 brought a new action in Los Angeles Superior Court collaterally attacking the judgment. New evidence, it contended, showed that the trial judge, Los Angeles Superior Court Judge Ronald Swearinger (who died the year before), had been biased against the church.

One basis was Swearinger’s belief, formed during the trial, that Scientologists had drowned his collie in the family swimming pool. I remember Swearinger telling me about the incident at the time in a phone conversation—and, yes, he was upset.

Fortunately for the safety of dogs, the challenge failed. (I don’t know if the Scientologists killed Swearinger’s dog or not — but either way, setting aside a judgment based on a judge’s perception that a party had slain the family pet would have invited future caninocide as a means of establishing judicial bias.) Then-Los Angeles Superior Court Judge Edward Y. Kakita granted Wollersheim’s anti-SLAPP motion and awarded $130,506.71 in attorney fees to the plaintiff. The church appealed.

Div. Three of this district’s Court of Appeal affirmed Kakita in a 1996 opinion by Justice Richard Aldrich. One of the points Aldrich made was this:

“The Church’s numerous claims of judicial and jury bias and prejudice were adjudicated at earlier stages of the litigation. Yet the Church waited seven years to file the instant lawsuit alleging the same facts to support its complaint. Clearly the Church is too late.”

Meanwhile, the California Supreme Court had dismissed its grant of review. (Does all this this strike you as resembling a ping pong match…one with a player batting at the ball from each of the four sides of the table?)

Liability having been established, and no further appeals available, how could there be further litigation?

Well, it seems that after Wollersheim sued the Church of Scientology of California, the church was reorganized and the two new entities were formed: the Church of Scientology International and the Religious Technology Center. Wollersheim’s judgment was against the “Church of Scientology.” The plaintiff wanted to add the new entities as judgment debtors and moved for an order declaring that they were alter egos of the church.

Los Angeles Superior Court Judge John Shook granted the motion, but did so based on “substantial evidence.” That wasn’t good enough, then-Court of Appeal Justice John Zebrowski said in his 1999 opinion for Div. Two, declaring that the “preponderance of the evidence” standard generally applicable in civil cases pertained.

The matter was remanded to the trial court.

The Church of Scientology was out of the case once it handed over the $8.7 million in 2002.

The court released $100,000 of the interpleaded funds to Schlosser—but she wants more, and has filed a cross complaint to get it. All other claims have been satisfied.

On an anti-Scientology website, Wollersheim commented last May:

“Of the 8.7 million about 5.4 million was paid out in the first year by the court to all the lawyers I used over 22 years and to me to meet tax obligations on the judgment.”

On Sept. 30, Los Angeles Superior Court Judge Robert Hess granted Wollersheim’s motion for the release to him of the remaining impounded funds, amounting to about $1.8 million. He did so over the protest of Schlosser that the money might be so diverted as to render it impossible for her to collect further sums.

Hess said in a written order:

“[T]he purpose of an interpleader action is not to ensure collectability of a judgment….To the extent this is the real purpose behind Ms. Schlosser’s opposition, the Court is not persuaded that it provides either a legal or an equitable basis for withholding disbursal of the funds.”

The judge complained in a footnote:

“The Court notes that it has been extraordinarily difficult to pin Ms. Schlosser down as to what amount she claims she is owed for legal services, since she has at various times claimed to be entitled to sums ranging from approximately $617,000 to over $2.5 million….It is not an exaggeration to compare attempts to have her state a sum certain to the experience of trying to nail a piece of Jello to a board.”

Wollersheim’s attorney, Craig J. Stein of the Brentwood law firm of Gelfand Stein & Wasson LLP, told me that Schlosser has “claimed as much as $5 million.”

Her latest reckoning of the worth of her services, stated in a deposition, is somewhere between $600,000 to $1.2 million, he said.

The inability to pin down a figure, Stein remarked, is “one of the frustrating aspects of this case.”

He said it is conceivable that a jury would find that she’s “not entitled to anything at all.”

Schlosser is relegated to recovery on a quantum meruit basis, under the Rules of Professional Conduct, because there was no written attorney-client agreement.

Neither Schlosser nor her attorney, William Gwire of San Francisco, was available for comment.

Wollersheim has not received any of the funds which Hess ordered released to him. Schlosser on Oct. 5 filed in the Court of Appeal a petition for writ of supersedeas to stay enforcement of the distribution order. The following day, Div. Two issued a stay “pending further order of this court.”

RELATED LITIGATION

Some of the members of the cast of characters in Wollersheim v. Church of Scientology have sparred with other cast members in other arenas.

• Greene, Broillet, Panish & Wheeler (now Greene, Broillet & Wheeler, LLP) was the law firm that won the jury verdict for Wollersheim. It did have a written agreement with Wollersheim, and the agreement entitled it to a contingency fee of 40 percent of any recovery. In September, 1994, Wollersheim was trying to find a law firm to handle the collection for him and was having trouble because of Greene, Broillet, Panish & Wheeler’s 40 percent interest. That firm agreed to cap its take at $600,000.

Once the $8.7 million was deposited with the court, the law firm asked the court to disburse to it $600,000 plus interest from September, 1994. Hess observed that the question was whether the interest on the $600,000 should go to Greene, Broillet, Panish & Wheeler “which has been unpaid since it started the representation in 1980, or whether it should go to Mr. Wollersheim, who waited until 2002 to collect for the injuries inflicted upon him almost a quarter-century ago.”

The law firm, he held, was entitled to interest.

Div. Two, in an opinion by Justice Judith Ashmann-Gerst, last year reversed, explaining that there was no provision in the parties’ 1994 agreement for interest, “and consequently interest was not due and payable under the parties’ agreement.”

Scientology’s abuse of the law

The purpose of the suit is to harass and discourage rather than to win. The law can be used very easily to harass, and enough harassment on somebody who is simply on the thin edge anyway, well knowing that he is not authorized, will generally be sufficient to cause his professional decease. If possible, of course, ruin him utterly.
– L. Ron Hubbard, A Manual on the Dissemination of Material, 1955 (See: The Purpose of a Lawsuit is to Harass)

• Religious Technology Center v. Wollersheim was decided by the Ninth U.S. Circuit Court of Appeals in 1986. It reversed a preliminary injunction issued by District Judge Mariana R. Pfaelzer Court of the Central District of California, pursuant to the Racketeer Influenced and Corrupt Organization Act, barring a splinter church from disseminating confidential spiritual materials allegedly stolen from the Church of Scientology.

The new church purportedly slipped the secret scriptures to Schlosser, then one of Wollersheim’s attorneys. The Church of Scientology sued on Nov. 4, 1985, three days after Swearinger declined to seal the materials.

The appeals court, in an opinion by Judge Harry Pregerson, held that “injunctive relief is not available to a private plaintiff in a civil RICO action” and that the scriptures were not a “trade secret” under California law because they lacked commercial value.

The church and its Religious Technology Center pursued the action against Greene, Broillet, Panish & Wheeler, and against Schlosser, Wollersheim, and others, seeking damages. It alleged that Wollersheim’s lawyers tried to blackmail it by threatening to release the scriptures to the public if it didn’t settle the lawsuit.

Then-U.S. District Judge James Ideman of the Central District of California (now retired) dismissed those defendants who were sued based on their involvement in the Wollersheim suit. He found there was no evidence of a “pattern of racketeering activity,” required to establish liability under the RICO statute. Ideman also determined that use of the documents in the litigation for the purpose of preparing expert witnesses was “fair use” and did not violate the copyright gained on the materials in 1986.

The Ninth Circuit in 1992 affirmed.

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Oct. 28, 2005 Column
Roger M. Grace: Perspectives

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This post was last updated: May. 9, 2014