Monday, November 28, 2005

Opening Statement by Wollersheim's attorney, Craig Stein - Cult Collection

This is the opening statement my attorney made for this Scientology collection case in LA. Much has gone on in court since my last update, but I have been so busy here days nights and weekends with adjustments and further trial prep and adjustment work I did not have the time to even add to this blog. I hope to do a update for the last 2 weeks of trial during the next week of trial.

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You know, after more than 25 years of being a lawyer I’ve been called a lot of things. But yesterday, was the first time anybody ever referred to me as being “rag tag.” I’m still not sure what to make of that.

Anyway, thank you very much for your patience and willingness to serve. Getting to this point has been simply an ordeal. My client, Lawrence Wollersheim and I are going to do our best to speed the process along from this point so you can complete your work, make a fair and reasoned decision, and get back to your regular life and your friends and family.

I’ve thought long and hard on how to provide you with a look into how this case can best be introduced, and what came to me was something one of my law professors said to us during orientation on my first day of law school, nearly 30 years ago.

The professor said, if your case is strong on the facts, pound the facts. If your case is strong on the law, pound the law. However, he said, if you’ve got a weak case, pound the table!”

Well, the evidence and the law will demonstrate that Lawrence’s case is both strong on the law and strong on the facts, and so that is where Lawrence will place his emphasis, and his trust and his confidence in you to see this through to the end, and reach the truth.

Let me all ask you this question, and I am not looking for an answer or a show of hands, but, lets say you hired a painter to paint two rooms in your house, and you made a contract with that painter to pay $500 for the work. And let’s say the painter finished his work and gave you a bill for $2000. And when you asked why, the painter said, well, I raised my rates. And let’s say when you balked at paying that bill, because it wasn’t your agreement, the painter said, well, now that you’ve breached my contract I’m going to ignore the contract and sue you for the reasonable value of my services, and by the way, according to me, the reasonable value of my services are $5000. And the painter then sues you for that?

How about instead of a painter, it was a lawyer who you thought you could trust, and had trusted for more than 20 years, that pulled this stunt. How would you feel then?

Lawyer’s are not painters. Lawyer’s owe their client’s, the highest possible degree of fidelity . This obligation is often called a fiduciary duty. It is the highest duty of care and honesty possible, and the law imposes this duty on lawyers in their dealings with their clients.

Yesterday Mr. Gwire asked you how much you would pay for food if you were starving, or for water if you were dying of thirst?

Well let’s look at it another way, if the person selling the food and water had a legal duty to you of the highest fidelity, would you expect that person to try to take advantage of you because of your situation, or would you expect that person to be a paragon of candor and fairness?

I am going to read a quote to you from a 100 year old decision of a California Court of Appeal.

DEMONSTRATE:
“An attorney at law should be a paragon of candor, fairness, honor, and fidelity in all his dealings with those who placed their trust in his ability and integrity, and he will at all times and under all circumstances be held to the full measure of what ought to be.” Sanguinetti v. Rosen, (1906) 12 Cal.App. 623, 630.

I would like you to keep that quote in mind when you listen to the evidence presented to you in this case.

The real purpose of this opening statement is to tell you what the evidence and law will show. I am going to do my best to be brief, but there is a fair amount of ground to cover.

One of the most important things that the evidence will show is that Lawrence and Ms. Schlosser had a contract that covered the authorized services that Ms. Schlosser was to perform, and specified the hourly rate for which she would be compensated.

Yesterday, Mr. Gwire showed you a 1989 letter that Lawrence wrote to Ms. Schlosser and pointed to language in that letter and said that the agreement was that Lawrence would pay Ms. Schlosser whatever she thought was fair. There’s no denying that Lawrence wrote that. Ms. Schlosser would like you to believe that was her agreement and because of it she can charge whatever she wants under the banner of “fair”. However, that letter is not the agreement.

What the evidence will show is that two years later, in 1991, Lawrence and Ms. Schlosser negotiated exactly what it was that they both thought was fair, and Lawrence wrote that down too.

Mr. Gwire tried to characterize the 1991 letter as a confirmation of what Lawrence would pay Ms. Schlosser for the work she performed in the time period before the letter. But let’s look at the letter a little bit more closely.

DEMONSTRATE:
What the letter says, and what they negotiated in 1991 was, that Lawrence would pay her, her “standard fee” of $150 per hour for her “CONTINUED CRITICAL CONSULTING WORK”. Lawrence did not write that he would pay her $150 per hour for the work Ms. Schlosser did a year prior to the letter, rather it was for the “continued” work.

What the evidence will show is that Lawrence did not ever want Ms. Schlosser to be his lead lawyer, or even to be his lawyer at all. What he wanted her to do is “consult” with the “lead” lawyers he hired her to provide them with the historical context of this case, and to help the lead lawyers locate historical documents that were related to the case. This is essentially the role of a paralegal, not a lawyer.

What the evidence will also show is that Lawrence has ALWAYS been willing to pay Ms. Schlosser for her work under the terms of this Agreement. The evidence will show that this is the only agreement they ever reached. The evidence will show that Lawrence is an honest and decent man.

What the evidence and the law will show is that there is specific law that makes it mandatory for a lawyer to put her fee agreement with her client in writing.

What the evidence will show is that Ms. Schlosser disobeyed this mandatory law. Ms. Schlosser claimed to have made various versions of a fee agreement with Lawrence, but never put a single one in writing - even though she claims to have rendered services to him for 12 years.

What the evidence will also show is that Ms. Schlosser is trying to take advantage of the fact that she did not follow this mandatory law - by trying to recover more than she agreed that she would be entitled to. It will be obvious that Ms. Schlosser thinks she made a bad deal, and is now trying to figure out how to get out from under it.
The evidence and the law that makes it mandatory for a lawyer to put the agreement is writing is designed to protect the client. The law does not make it mandatory for a client to put the agreement in writing.

What the evidence and the law will show is that a lawyer may not unilaterally raise her billing rates without the prior informed consent of the client.

What the evidence will show is that Ms. Schlosser never informed Lawrence that she was raising her billing rate to him, and that Ms. Schlosser never obtained Lawrence’s informed consent to raise her rates.

The evidence and law will show that the reason a lawyer must obtain the client’s prior informed consent before rasing her rates, is so that the client can make a choice, accept the new rate, decline the new rate, negotiate a different rate, or terminate the relationship with the lawyer.

What the evidence and law will show is that if a lawyer doesn’t put her agreement in writing, or if there is some technical defect with the agreement that makes the agreement invalid, that doesn’t mean the lawyer is out of luck. What it means is that the lawyer can still collect a “reasonable fee”.

HOWEVER, WHAT THE EVIDENCE AND THE LAW WILL SHOW IS THAT THE RATE CONTAINED IN THE AGREEMENT PLACES A CAP ON HOW MUCH THE LAWYER CAN RECOVER.

The evidence and law will show that the reason for this is so that the lawyer cannot create some contract defect, intentionally or otherwise, and then use that defect to collect more than the contract allows under the theory of a reasonable fee. This is also to prevent the lawyer from recovering an extraordinary fee based upon some theory of a contract that never existed.

What the evidence will show is that a lawyer who fails to put her agreement in writing cannot enforce the lawyer’s version of the unwritten agreement.
What the evidence will show is that Lawrence met with Ms. Schlosser in 1991, reached an agreement with her regarding fees, and that Lawrence put that agreement in writing - gave it to Ms. Schlosser at that time, and Ms. Schlosser never once claimed she had some other understanding of what her fees were until after Scientology paid the judgment in 2002.

What the evidence will show is that Ms. Schlosser acknowledged the written agreement that Lawrence handed her in 1991 several times over the years - and even acknowledged it after Scientology had paid the money in 2002.

What the evidence will show is that in the Spring of 2002, before Scientology paid, Ms. Schlosser stated to her colleague Daniel Leipold that she had a fee agreement with Lawrence. And a week later she showed this very document to Mr. Leipold, and stated that it was her agreement. The evidence will show that Mr. Leipold encouraged Ms. Schlosser to get a more formal agreement, and that Ms. Schlosser stated that she did not need to.

What the evidence will show is that Ms. Schlosser has made claims for payment for her services that do not follow the Agreement she made with Lawrence, exorbitant and outrageous claims that when you hear them will shock your conscience. The evidence will show that this is why we are here now.

I want to change gears here and look at other evidence to be presented, by talking about the history of the case.
The evidence will show that there were 5 separate lawsuits that made up the original Wollersheim saga. I suppose you might say that this is the sixth.
Let me briefly review the cases with you.

Wollersheim 1 - Wollersheim v. CSC -filed in 1980, tried in 1986, jury verdict in 1986 - the money recovered May, 2002.

Wollersheim 2 - Scientology v. Wollersheim and his attorneys and experts - filed in 198? - Scientology claimed that Lawrence and his lawyers had stolen Scientology’s “sacred” religious scripture. This was resolved in 1992 when the Federal Court of Appeals dismissed the case.

Wollersheim 3 - Scientology sued Lawrence, and the entire Los Angeles Superior Court - claiming that every judge in the county was biased against it and sought to disqualify every judge in the county - Filed in late 1985 - dismissed in the fall of 1986 after the trial in Wollersheim 1.

Wollersheim 4 - filed in 1993 - Scientology sued Lawrence and claimed that the judge who had actually tried the case in 1986 was secretly biased against it - Scientology tried to have the 1986 judgment set aside. You should note that the judge who had tried the case died before Scientology filed this case. Wollersheim IV was decided in Lawrence’s favor in 1994, and the Court of Appeal affirmed that decision in 1996. In this case the court decided under a special law that Lawrence’s lawyers could recover their legal fees from Scientology - and they did, in 1997, more than $480,000. The evidence will show that Ms. Schlosser was paid more than $80,000 for her work in this case in 1997 as her share of the court awarded attorney’s fees.

Wollersheim 5 - filed in 1995 in Denver, Colorado by Scientology against Lawrence, and a non-profit Internet based anti-cult organization called FactNet. Scientology claimed that Lawrence and FactNet were posting Scientology’s copyrighted religious material on the Internet. Scientology obtained a court order, without notice to Lawrence, broke into his house and his office - took possession of all of his computers and everything related to the FactNet website, and essentially shut the site down. The case ended in 1997 by settlement, Lawrence got his and FactNet’s computers back, and the website was back up and running - as it is today. The evidence will show that Ms. Schlosser was paid more than $5,000 for her work in this case in 1997. This was paid to her by the law firm that hired her.

What the evidence will show is that Ms. Schlosser is trying to recover fees for work she claims to have performed in Wollersheim 1, Wollersheim 4, and Wollersheim 5.
The evidence will show that Lawrence was locked in a 22 year long legal battle with his former Church.

It took more than 5 years for the case to be tried after it was first filed. Finally, after a 5 ½ month long trial, in late July, 1986, in a courtroom in this court house, two floors above us, the jury awarded Lawrence $30 million dollars, to compensate him for the abuse that he suffered as a result of Scientology’s tyranny.

In 1989, the Court of Appeal agreed that Lawrence was entitled to compensation, yet the award was reduced to $2.5 million. The the battle was not over.

The evidence will show that Lawrence won the trial in 1986 and that It took Lawrence another 16 years after the trial to collect that money - and he still hasn’t savored his victory because the litigation goes on and on and on.

The evidence will show that Lawrence finally won that battle with Scientology in May of 2002. At that time Scientology deposited nearly $8.7 million dollars with this court, and paid off the 1986 judgment of this court against it in Lawrence’s favor. The difference between the $2.5 million that the court of appeal awarded, and the $8.7 million, is because of interest that accumulated for 16 years.

The evidence will show that there were 5 separate lawsuits that made up the original Wollersheim saga. I suppose you might say that this is the sixth.

What the evidence will show is that Ms. Schlosser is trying to recover fees for work she claims to have performed in Wollersheim 1, Wollersheim 4, and Wollersheim 5.

What the evidence will show is that Lawrence did not hire Ms. Schlosser to work on Wollersheim 4 and Wollersheim 5. What the evidence will show is that Mr. Wollersheim introduced her to other lawyers in those cases and those other lawyers made their own fee arrangements.

What the evidence will show is that Ms. Schlosser has already been paid for her work in Wollersheim 4 and Wollersheim 5.

For example in Wollersheim 4, the lawyers were twice awarded their attorney’s fees for the work they performed, and that Scientology was to pay for it - not Lawrence.

However, after Scientology paid the two court approved fee awards in the Spring of 1997, approximately $480,000, the three lawyers who worked on the case, Daniel Leipold, Mark Goldowitz, and Ms. Schlosser filed a 3rd request for fees - claiming that they should be paid for the work they performed in forcing Scientology to pay.

That application was referred to a retired Judge, Judge Weil, to be a “special master”. So you know there is a treatise that almost every California lawyer relies on, its called, “Civil Procedure Before Trial”. Judge Weil was one of its authors.

Judge Weil reviewed the motion and denied the lawyer’s requests for fees. Mr. Leipold and Mr. Goldowitz threw in the towel and moved on to other things. Not Ms. Schlosser, she took it upon herself to ask the trial judge to review what Judge Weil had denid. The trial Judge, Judge Buckner, refused the request for fees as well.

Now she wants Mr. Wollersheim to pay her for the time she spent making those motions that were denied by two Judges. Let me read something that Ms. Schlosser filed with the court when she filed the 4th fee request READ!!!!!

What the evidence will show is that Ms. Schlosser wants Lawrence to pay her more than she has already been paid for Wollersheim 4 and Wollersheim 5, based upon the agreements she reached with other lawyers in those cases. You will hear from at least one of the lawyers who made the arrangements in those two cases.

The evidence will show that Ms. Schlosser wants more money from Mr. Wollersheim in those cases in addition to her work on Wollersheim 1.

I may have given you too much information already - I don’t want you to get lost in too many details right now.

I have struggled a bit about how to best give you the shortest summary of the evidence.

Here’s my best shot: This case is really a case about BETRAYAL.

To put a little more meet on that bone, what the evidence will show is that Lawrence has twice been a victim. First he was victimized by his Church, by his religion. You are supposed to be able to trust your Church, it turned out that Lawrence couldn’t do that.

The evidence will also show that the second betrayal came from another unexpected source. Lawrence was betrayed by a lawyer, Ms. Schlosser, who is now suing him. You are supposed to be able to trust your lawyer, it turned out that Lawrence couldn’t do that either.

So, what happened in 2002. In short, on the eve of a trial that could ultimately have challenged the validity of Scientology’s prized tax exempt status, rather than fight any more, Scientology deposited enough money in this court to pay off Lawrence’s judgment against it.

The evidence will show that every lawyer in this case, and there are several, were due their legal fees once Lawrence collected his money. The evidence will show, that when asked, within a week or two, all the lawyers, except one, sent Lawrence a statement of their account, sent a copy of their fee agreement, so that Lawrence could review their claims and if appropriate approve them so that they could be paid.

The lawyers moved quickly, they wanted their money, and everybody was a little concerned that Scientology had yet another trick up its sleeve, and if the money was paid, then that worry would be lessened.

The evidence will show that all the lawyers did this, with the exception of one lawyer, Ms. Schlosser. The evidence probably won’t explain this, but the evidence will show that Ms. Schlosser hesitated about sending a bill.

The evidence will show that Lawrence did not want to pay the lawyer’s claims until bills were in, so that he would know where he stood as to what he owed, and what he could keep, after Uncle Sam took his cut.

The evidence will show that when a month went by, and Ms. Schlosser still had not sent a bill, she was asked for an estimate of her bill.

Lawrence did not hire Ms. Schlosser to ever be his lead lawyer. Rather what he hired Ms. Schlosser to do was to consult with the lead lawyers he hired. Ms. Schlosser’s limited role was to provide the lawyers with the historical context of the underlying case and to assist the lead lawyers in locating documents from the underlying case.
The evidence will show that Ms. Schlosser betrayed Lawrence by ignoring the only agreement about legal fees that she ever made with him.

One of the consequences is that Ms. Schlosser has tried to recover a fee so high that it will shock your conscience.

The evidence will show that Mr. Schlosser, at one point, said that her claim for legal fees could be as much as $4 to $5 million dollars. At another point she said it could be as much as $2.5 plus million dollars. At yet another point she said that it could be as low as $600,000 to as high as $1.2 million dollars. She has made even other different claims at different times.

In fact, what the evidence will show is that trying to pin Ms. Schlosser down as to what her fee claim really is, is like trying to nail Jello to a board.

As a result, another 3 ½ years has gone by, since May, 2002, and Lawrence is still trapped in what is essentially an endless loop of lawsuits.

The evidence in this case will show that it is also about a little bit more. In a broader sense, its about justice. There are other victim’s of Scientology, Lawrence’s victory over Scientology, and his ability to recover his money from Scientology has and will open a pathway to justice for those other victim’s who have been too afraid to seek it. Lawrence was a victim of Scientology - yet the recovery of his judgment somewhat vindicated him.

However, if Lawrence is allowed to be victimized by his lawyer, then maybe, Scientology will have won. It didn’t, and Lawrence shouldn’t be victimized by his lawyer either.

Now what should Ms. Schlosser receive by way of compensation.

One thing that the evidence will show, and you will be asked to determine is whether in your view, Ms. Schlosser’s many, many violations of rules professional conduct and other laws governing a lawyer’s behavior, including her failure to put her fee agreement in writing, rise to the level where you may determine that she should recover nothing at all, or that her conduct will impact your decision as to what she should receive, if anything.

However, at best, the evidence will demonstrate that Ms. Schlosser is entitled to be paid for the work that she was AUTHORIZED to perform at the agreed upon rate, according to the AGREEMENT she made with Lawrence.

The evidence will show that Lawrence has always stood by the Agreement he made with Ms. Schlosser. The evidence will show that based upon their AGREEMENT, Ms. Schlosser is entitled to approximately $120,000 for the AUTHORIZED work at the agreed upon rate.

At the end of the day, Mr. Wollersheim will ask you to consider all of the evidence presented to you. At the end of the day Mr. Wollersheim will ask you to be fair, be reasonable, and not to reward Ms. Schlosser by paying her some amount of money based upon some agreement that never existed.