Willis Carto archive

Including information about his associates

Legion v Carto, Trial transcript, Volume 8


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 page 909
 
 
 
 1           COURT OF APPEAL OF THE STATE OF CALIFORNIA
 
 2                    FOURTH APPELLATE DISTRICT
 
 3                          DIVISION ONE
 
 4  ______________________________
                                  )
 5  LEGION FOR THE SURVIVAL OF    )
    FREEDOM, INC.,                )    DCA. NO. DO27959
 6                                )
                   PLAINTIFF AND  )    FROM SAN DIEGO COUNTY
 7                 RESPONDENT,    )
                                  )    HON. RUNSTON G. MAINO
 8       VS.                      )
                                  )
 9  WILLIS CARTO, HENRY FISCHER,  )
    VIBET, INC., LIBERTY LOBBY,   )
10  INC., ET. AL.,                )
                                  )
11                 DEFENDANTS AND )
                   APPELLANTS.    )
12  ______________________________)
 
13
                     REPORTER’s APPEAL TRANSCRIPT
14
                          NOVEMBER 12, 1996
15
                              VOLUME 8
16
                           PAGES 909-1014
17
 
18
    APPEARANCES:
19
         FOR THE PLAINTIFF AND    JACQUES BEUGELMANS AND
20       RESPONDENT:              THOMAS MUSSELMAN
                                  1901 AVENUE OF THE STARS
21                                CENTURY CITY, CA 90067
 
22       FOR THE DEFENDANTS AND   PETER J. PFUND
         APPELLANTS:              2382 S.E. BRISTOL
23                                SUITE A
                                  NEWPORT BEACH, CA 92660
24
 
25
 
26
                                  BARBARA J. SCHULTZ, CSR, RPR
27                                CSR NO. 8021
                                  OFFICIAL REPORTER
28                                VISTA, CALIFORNIA
			
			

page 910
 
 
 
 1        IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
 
 2                IN AND FOR THE COUNTY OF SAN DIEGO
 
 3  DEPARTMENT 11                    HON. RUNSTON G. MAINO
 
 4
    _____________________________
 5                               )
    LEGION FOR THE SURVIVAL OF   )
 6  FREEDOM, INC.,               )
                                 )
 7                  PLAINTIFF,   )           NO. N64584
                                 )
 8           VS.                 )
                                 )
 9  WILLIS CARTO, HENRY FISCHER, )
    VIBET, INC., LIBERTY LOBBY   )
10  INC., ET. AL.,               )
                                 )
11              DEFENDANTS.      )
    _____________________________)
12
 
13                       REPORTER’s TRANSCRIPT
 
14                        NOVEMBER 12, 1996
 
15
    APPEARANCES:
16
        FOR THE PLAINTIFF:       JACQUES BEUGELMANS AND
17                               THOMAS MUSSELMAN
                                 1901 AVENUE OF THE STARS
18                               CENTURY CITY, CA 90067
 
19
 
20      FOR THE DEFENDANTS:      WAIER AND URTNOWSKI
                                 BY:  RANDALL S. WAIER
21                               1301 DOVE STREET
                                 NEWPORT BEACH, CA 92660
22
 
23
 
24
 
25
 
26
                                 BARBARA J. SCHULTZ, CSR, RPR
27                               CSR NO. 8021
                                 OFFICIAL REPORTER
28                               VISTA, CALIFORNIA
			
			

page 911
 
 
 
 1  VISTA, CALIFORNIA, NOVEMBER 12, 1996, DEPARTMENT 11:
 
 2
 
 3       THE COURT:  ON THE RECORD.  GO AHEAD.
 
 4       MR. WAIER:  MAY I PROCEED?
 
 5       THE COURT:  YES, SIR.
 
 6       MR. WAIER:  THANK YOU, YOUR HONOR.  AS YOU KNOW, I
 
 7  REPRESENT ALL THE DEFENDANTS, INCLUDING ELISABETH AND WILLIS
 
 8  CARTO.
 
 9            I ALSO WOULD LIKE TO POINT OUT TO THE COURT I HAVE
 
10  GOOD LUCK I KNOW.  SHE’s MY LIFE — MY WIFE AND MY LIFE,
 
11  MICHELLE, AND MY PARTNER, BRIAN URTNOWSKI, IS IN THE BACK AS
 
12  WELL.
 
13       THE COURT:  PLEASED TO HAVE YOU HERE.
 
14       MR. WAIER:  YOU KNOW, IT’s KIND OF FUNNY.  THIS WEEKEND
 
15  I DON'T KNOW IF YOU GOT A CHANCE TO SEE THE EVANDER
 
16  HOLYFIELD MIKE TYSON FIGHT.  IT WAS QUITE AN EVENT.  IT
 
17  REMINDED ME A LITTLE BIT ABOUT THIS CASE.  AND IN FACT, I
 
18  TOLD MY WIFE A LITTLE ABOUT THIS BECAUSE I WAS KICKING
 
19  MYSELF IN THE REAR END BECAUSE I DIDN'T BET ON THE FIGHT
 
20  WHEN HOLYFIELD WAS 25 TO 1.  I THOUGHT, WHY DIDN'T I BET ON
 
21  THIS FIGHT BECAUSE LOW AND BEHOLD, HOLYFIELD KNOCKS OUT
 
22  TYSON.
 
23            THEN I THOUGHT, YOU KNOW WHAT?  THAT’s OKAY,
 
24  BECAUSE LOU DUVAL, THE MANAGER FOR TYSON, HAPPENED TO BET ON
 
25  THE FIGHT.  MADE $260,000.  AND I THOUGHT JUST LIKE THE
 
26  LEGION MAYBE I'M ENTITLED TO THAT MONEY.
 
27            THAT’s WHAT THAT CASE IS REALLY ABOUT.  IT WAS
 
28  ABOUT A RISK TAKEN, AND THERE’s NO DIFFERENCE BETWEEN WHAT
			
			

page 912
 
 
 
 1  LOU DUVAL DID AND WHAT WILLIS CARTO DID.  HE TOOK A CHANCE,
 
 2  AND IT PAID OFF.
 
 3            AND ONE OF THE THINGS I ASKED YOU TO DO, YOUR
 
 4  HONOR, AT THE VERY BEGINNING OF THIS CASE, AND YOU
 
 5  PROMISED — I KNOW YOU PROMISED YOU WOULD DO THAT IS WAIT
 
 6  UNTIL THE ENTIRE CASE WAS OVER WITH, NOT AS MY ESTEEMED
 
 7  COLLEAGUE WROTE IN A BOOK TITLED — A BOOK ON THE NEW YORK
 
 8  TIMES BEST SELLER LIST, “ARREST OF JUDGMENT.”  IT SOUNDS
 
 9  LIKE JOHNNY COCHRAN A BIT, BECAUSE I BELIEVE WHEN YOU PUT
 
10  TOGETHER WHAT THE LAW IS AND THE FACTS IN THIS CASE, NOTHING
 
11  WAS DONE WRONG.  EVERYTHING WAS APPROVED.
 
12            SURE, YOU SEE IN HINDSIGHT, JUST LIKE A LOT OF
 
13  MONDAY MORNING QUARTERBACKING, YOU SEE A SCORE, AND YOU LOOK
 
14  BACK, AND YOU SAY, YOU KNOW WHAT?  DOGGONE IT.  I SHOULD
 
15  HAVE SENT THE OUTLET PASS INSTEAD OF RUNNING IT UP THE
 
16  MIDDLE.  I WOULD HAVE MADE A TOUCHDOWN.  HE WAS WIDE OPEN.
 
17  IT’s EASY SITTING BACK AND SEEING A RETURN OF 3.2 MILLION.
 
18            I WANT TO CLARIFY THAT, YOUR HONOR.  THE EVIDENCE
 
19  IS CLEAR TAXES WERE TAKEN OUT OF THE 7.5 MILLION.  ESTATE
 
20  FEES WERE TAKEN OUT OF IT.  STAMP FEES WERE TAKEN OUT OF IT,
 
21  REFERENCING TO THE BONDS.  WHAT YOU WERE LEFT WITH WAS A NET
 
22  3.2 SOME MILLION DOLLARS.  THAT’s WHAT YOU HAVE BEFORE YOU.
 
23  THAT’s THE EVIDENCE BEFORE YOU.
 
24            THE 7.5 MILLION IS UP IN CLOUDS BECAUSE WHETHER
 
25  WILLIS CARTO WAS ABLE TO UTILIZE THE FUNDS,
 
26  DISCRETIONARY-WISE, OR THE LEGION, THEY WOULD HAVE HAD TO
 
27  PAY TAXES.  THAT’s UNREFUTED.  IT’s NOT 7.5 MILLION.  IF
 
28  THAT WOULD BE THE CASE, ANOTHER THREE AND A HALF MILLION
			
			

page 913
 
 
 
 1  DOLLARS WINDFALL TO THE LEGION.
 
 2            BUT LET ME START OFF BEFORE I GET INTO CERTAIN
 
 3  ISSUES.  I THINK IT’s IMPORTANT THAT THE COURT REALIZE WHAT
 
 4  THE LAW IS, AND THE COURT OUGHT TO LOOK AT THIS — I KNOW
 
 5  YOU WILL, YOUR HONOR, FROM A COMMON SENSE STANDPOINT.  WE
 
 6  CAN'T LOSE COMMON SENSE IN LOOKING AT THE FACTS AND WHAT
 
 7  TOOK PLACE.  COMMON SENSE FROM THE WAY MEETINGS WERE HELD.
 
 8  COMMON SENSE THE WAY THE CORPORATION HAD BEEN RUN.  COMMON
 
 9  SENSE AS TO THE FACTS THAT HAVE BEEN BROUGHT FORTH IN THIS
 
10  TRIAL.
 
11            LET’s TAKE A LOOK, FIRST OF ALL, BEFORE I GET INTO
 
12  THE SPECIFICS AS TO WHAT THE LEGION IS SUED FOR, AND AGAIN
 
13  I'LL NOT TRY TO REGURGITATE EVERYTHING WE PUT IN THE TRIAL
 
14  BRIEF BECAUSE I BELIEVE WE HAVE PROVEN ALL THOSE FACTS, BUT
 
15  I WILL HIGHLIGHT SOME OF THOSE.
 
16            FIRST OF ALL, WITH RESPECT TO THE CIVIL CODE
 
17  SECTION NOW HAS BEEN AMENDED TO THE CORPORATIONS CODE
 
18  SECTION, THAT DOESN'T EVEN CLAIM A RIGHT OF ACTION.  THE
 
19  SIXTH CAUSE OF ACTION SHOULD BE OUT.  MORE IMPORTANTLY, THIS
 
20  ENTIRE COMPLAINT SHOULD BE OUT UNDER THE LAW, AND I'LL TELL
 
21  YOU WHY.
 
22            MR. BEUGELMANS MADE A BIG ISSUE OF THIS.  THEY
 
23  SEEK INJUNCTIVE RELIEF IN THE COMPLAINT.  REMEMBER, THIS IS
 
24  A NONPROFIT TEXAS CORPORATION, THE LEGION.  AND I WILL
 
25  CONCEDE THIS ASPECT OF IT.  BY WAY OF BACKGROUND NONPROFIT
 
26  CORPORATIONS ARE GIVEN SPECIAL PROTECTIONS WITHIN THE STATE
 
27  OF CALIFORNIA UNDER THE CORPORATIONS CODE.  THE LEGISLATURE
 
28  ENACTED ITS OWN SEPARATE CODE SECTION WITHIN THE
			
			

page 914
 
 
 
 1  CORPORATIONS CODE, AND THESE PROTECTIONS ALSO GO TO
 
 2  DIRECTORS RECOGNIZING THAT DIRECTORS NORMALLY DO IT ON A
 
 3  VOLUNTEER BASIS, LIKE LEWIS AND LAVONNE FURR, AND
 
 4  RECOGNIZING THERE ARE PROTECTIONS TO THE PUBLIC THAT OUGHT
 
 5  TO BE PUT IN PLACE.  AND THAT IS WHY YOU HAVE A NUMBER OF
 
 6  SECTIONS REQUIRING THE ATTORNEY GENERAL IN SOME RESPECTS BE
 
 7  NOTIFIED, OR IN THIS CASE TO BE JOINED AS AN INDISPENSABLE
 
 8  PARTY.
 
 9            AND, YOUR HONOR, THE ATTORNEY GENERAL IS NOT A
 
10  PARTY TO THIS ACTION.  HE HAS TO BE JOINED AS AN
 
11  INDISPENSABLE PARTY WHEN YOU ARE DEALING WITH INJUNCTIVE
 
12  RELIEF.  AND THAT, YOUR HONOR, THEY HAVE FAILED TO DO.
 
13            AND IN FACT, I HAVE PLACED, AND I BELIEVE I KIND
 
14  OF BLOWN UP SOME STATUTES FOR YOU OUT OF TO MAKE IT A LITTLE
 
15  EASIER.  THAT’s WHAT I GET FOR TURNING AROUND.
 
16            UNDER CORPORATIONS CODE SECTION 5233, TALKING
 
17  ABOUT SELF-DEALING TRANSACTIONS; INTERESTED DIRECTOR;
 
18  EXCEPTIONS; ACTIONS; BURDEN OF PROOF; LIMITATIONS AND
 
19  REMEDIES, I INVITE THE COURT TO REVIEW THESE.
 
20            IF YOU REVIEW THE COMPLAINT, THE ONLY WAY LEWIS
 
21  AND LAVONNE FURR AND ELISABETH CARTO CAN BE HELD ACCOUNTABLE
 
22  IF THEY SELF-DEALT, IF THEY SOMEHOW SELF-DEALT IN THIS CASE
 
23  IN CONSPIRACY WITH WILLIS CARTO AND LIBERTY LOBBY.  IF YOU
 
24  BUY THAT SORT, THEY WOULD HAVE TO BE INVOLVED WITH A
 
25  SELF-DEALING TRANSACTION.
 
26            AND WHAT IT SAYS UNDER 5233(C):
 
27            “THE ATTORNEY GENERAL OR, IF THE ATTORNEY GENERAL
 
28  IS JOINED AS AN INDISPENSABLE PARTY, ANY OF THE FOLLOWING
			
			

page 915
 
 
 
 1  MAY BRING AN ACTION IN THE SUPERIOR COURT OF THE PROPER
 
 2  COUNTY."
 
 3            “THE ATTORNEY GENERAL OR, IF HE IS JOINED AS AN
 
 4  INDISPENSABLE PARTY."
 
 5            WE KNOW FROM LAW SCHOOL WHAT INDISPENSABLE PARTY
 
 6  IS ALL ABOUT.
 
 7            THIS, I PRESUME, IS A SECTION THAT THEY BROUGHT
 
 8  THIS ACTION UNDER.  WELL, WE KNOW THAT THE ATTORNEY GENERAL
 
 9  CERTAINLY IS NOT A PARTY, AND HE’s NOT BEEN NAMED AS AN
 
10  INDISPENSABLE PARTY, AND THEY DIDN'T DO THAT.
 
11            AND “THE ATTORNEY GENERAL, OR THE COURT IN AN
 
12  ACTION IN WHICH THE ATTORNEY GENERAL IS AN INDISPENSABLE
 
13  PARTY, HAS APPROVED A TRANSACTION BEFORE OR AFTER IT WAS
 
14  CONSUMMATED; OR
 
15            THE FOLLOWING FACTS ARE ESTABLISHED:
 
16            THE CORPORATION ENTERED INTO THE TRANSACTION FOR
 
17  ITS OWN BENEFIT;
 
18            THE TRANSACTION WAS FAIR AND REASONABLE AS TO THE
 
19  CORPORATION AT THE TIME THE CORPORATION ENTERED INTO THE
 
20  TRANSACTION."
 
21            AND THESE ARE ALL FACTS I WANT THE COURT TO LOOK
 
22  AT, BECAUSE I THINK BOTH OF THESE APPLY HERE REGARDLESS OF
 
23  WHETHER THE ATTORNEY GENERAL WAS INVOLVED.
 
24            “PRIOR TO CONSUMMATING THE TRANSACTION OR ANY
 
25  PART THEREOF THE BOARD OF DIRECTORS THEN IN OFFICE WITHOUT
 
26  COUNTING THE VOTE OF THE INTERESTED DIRECTOR OR DIRECTORS,
 
27  AND WITH KNOWLEDGE OF MATERIAL FACTS CONCERNING THE
 
28  TRANSACTION AND THE DIRECTOR’s INTEREST IN THE TRANSACTION."
			
			

page 916
 
 
 
 1            DEFINITELY (A) AND (B), (C).  WE HAVE SOME
 
 2  QUESTIONS ABOUT VARIOUS MEETINGS THAT TOOK PLACE.  I'LL GET
 
 3  INTO THAT IN A MINUTE.
 
 4            IF YOU RECALL MY OPENING STATEMENT WHEN I TOLD
 
 5  THIS COURT, AND I BELIEVE WE PROVEN, WHENEVER A MINUTE OF A
 
 6  MEETING OR A CORPORATE RESOLUTION BENEFITS THE LEGION TODAY,
 
 7  WHEN LOOKING IN HINDSIGHT, MONDAY MORNING QUARTERBACKING,
 
 8  IT’s OKAY.  WILLIS HAD AUTHORITY TO DO THAT.  THE FURRS HAD
 
 9  AUTHORITY TO DO THAT.  I'LL GET INTO THAT.  BUT WHEN IT
 
10  DOESN'T BENEFIT THEM, THE MINUTES ARE NO GOOD.  THE MEETINGS
 
11  DIDN'T TAKE PLACE.
 
12            THEY DON'T EVER CHALLENGE THE MINUTES IN THE
 
13  MEETINGS WHEN THINGS PURPORTEDLY ARE THEIR WAY.  THEY DON'T
 
14  CHALLENGE.  IN FACT, BY THEIR COMPLAINT THEY DON'T CHALLENGE
 
15  THE VALIDITY OF THE DISTRIBUTION AGREEMENT, THE MANDATE
 
16  AGREEMENT, THE SETTLEMENT AGREEMENT, BUT YET THOSE WERE ALL
 
17  TO BE APPROVED BY THE BOARD OF DIRECTORS UNDER THE NONPROFIT
 
18  CORPORATION LAW.  THOSE HAD TO BE APPROVED BY THE BOARD OF
 
19  DIRECTORS.
 
20            WHERE ARE THE MINUTES FOR THOSE?  BUT YET THAT AS
 
21  I WILL SHOW YOU LATER IS THE BASIS OF THEIR ENTIRE CLAIM.
 
22  WITHOUT THOSE AGREEMENTS THE LEGION HAS NOTHING, EVEN
 
23  REGARDLESS OF WHAT WILLIS CARTO DID AND HENRY FISCHER DID
 
24  AND THE FURRS DID IN TRYING TO RECOVER, ACQUIRE OR RECOVER
 
25  THE ASSETS.
 
26            THEY ADMIT IN THE COMPLAINT — I INVITE THE COURT
 
27  TO READ THE COMPLAINT THAT THE BASIS, THE SOLE BASIS OF
 
28  THEIR RIGHTS ARE IN THE DISTRIBUTION AGREEMENT, THE
			
			

page 917
 
 
 
 1  SETTLEMENT AGREEMENT, THE MANDATE AGREEMENT, AND THEN THERE
 
 2  WAS A SUPPLEMENT TO THE DISTRIBUTION AGREEMENT.  THAT’s THE
 
 3  SOLE RIGHT.
 
 4            AGAIN, THEY'RE KNOCKED OUT OF THE BOX IN THE VERY
 
 5  BEGINNING WITH RESPECT TO THAT.  THEY DIDN'T INCLUDE THE
 
 6  ATTORNEY GENERAL AS AN INDISPENSABLE PARTY.  THEY CAN'T EVEN
 
 7  GET DAMAGES, YOUR HONOR.
 
 8            AND IF YOU RECALL MY ESTEEMED COLLEAGUE, MARK
 
 9  LANE, TALKED ABOUT LAVONNE AND LEWIS FURR.  I'M GOING OVER
 
10  SOME OF THE CONCEPTS.  IT’s IMPORTANT THAT YOU KNOW WHAT THE
 
11  LAW IS.  I KNOW YOU READ THE CODE.  I WANT TO POINT THE
 
12  SECTIONS OUT.
 
13            THE FURRS WERE NONPAID DIRECTORS.  IN THE
 
14  CORPORATIONS CODE 5231.5, THE ONLY THING THAT THEY CAN BE
 
15  ACCOUNTABLE FOR, AND YOU RAISED THIS QUESTION TO MR. LANE,
 
16  WAS THEIR ALLEGED FAILURE TO DISCHARGE DUTIES.  IN OTHER
 
17  WORDS, IF THEIR DIRECTORS CONCEDED BY EVERYONE IN 1985 --
 
18  REMEMBER YOU WERE CONCERNED, YOUR HONOR, THAT MAYBE WILLIS
 
19  CARTO DIDN'T GIVE THEM ALL THE INFORMATION NECESSARY FOR
 
20  THEM TO MAKE AN INFORMED DECISION AS TO WHETHER TO WORK OUT
 
21  A DEAL WITH WILLIS CARTO SO THEY COULD HAVE ABSOLUTE
 
22  DISCRETION TO UTILIZE THE FUNDS IN ANY DIRECTION AS SAW FIT,
 
23  AS LONG AS IT FULFILLED THE PURPOSES AND GOALS OF THE LEGION
 
24  AND FULFILLED THE PURPOSES AND GOALS OF JEAN FARREL-EDISON,
 
25  WHICH WERE NOT UNALIKE.  THEY WERE THE SAME.  AND THE ONLY
 
26  QUESTION IS WHETHER THEY HAD SUFFICIENT INFORMATION.
 
27            WHAT IS THE EVIDENCE ALONG THE LINES?  THE
 
28  EVIDENCE IS THAT WILLIS DIDN'T KNOW THE VALUE OF THE NECA
			
			

page 918
 
 
 
 1  CERTIFICATES.  WILLIS DID NOT KNOW THE TOTAL VALUE OF THE
 
 2  ESTATE AT THAT TIME.  HE DID, AS WE KNOW, WENT TO THE BOARD
 
 3  OF DIRECTORS, MORE SPECIFICALLY LEWIS AND LAVONNE FURR, WHO
 
 4  BY ALL ACCOUNTS FROM MARCELLUS, WEBER, AND EVERYONE THAT YOU
 
 5  HEARD IN THIS COURTROOM, RECOGNIZED THEM AS HAVING THE
 
 6  AUTHORITY TO MAKE DECISIONS FOR THE CORPORATION.
 
 7            THEY RAN THIS AS A SMALL CORPORATION.  IT WASN'T
 
 8  SOMETHING THAT YOU SAT DOWN, AND THEY HAD TO FORMALIZE THE
 
 9  MEETINGS.  MAYBE THEY SHOULD HAVE.  BUT UNLIKE A LOT OF
 
10  CORPORATIONS IN THE COUNTRY, ESPECIALLY SMALL CORPORATIONS,
 
11  THEY DON'T DO THAT.  IN FACT, MOST TIMES — THIS COURT IS
 
12  AWARE MOST OF THESE CORPORATIONS MERELY GET RESOLUTIONS AT
 
13  THE END OF THE YEAR TO FULFILL TAX PURPOSES.  AND THAT'S
 
14  WHAT HAPPENED HERE, I SUBMIT.  BUT THEY HAVE GIVEN NONPAID
 
15  DIRECTOR ALLEGED FAILURE TO DISCHARGE DUTIES.  I'M NOT
 
16  TALKING ABOUT LEWIS AND LAVONNE FURR.  NO.  THEY CANNOT.
 
17            “NO CAUSE OF ACTION FOR DAMAGES SHALL ARISE
 
18  AGAINST ANY NONPAID DIRECTOR, INCLUDING ANY NONPAID DIRECTOR
 
19  WHO IS ALSO A NONPAID OFFICER, OF A NONPROFIT PUBLIC BENEFIT
 
20  CORPORATION BASED ON ANY ALLEGED FAILURE TO DISCHARGE THAT
 
21  PERSON’s DUTIES AS DIRECTOR OR OFFICER IF THE DUTIES ARE
 
22  PERFORMED IN THE MANNER THAT MEETS ALL THE FOLLOWING
 
23  CRITERIA."
 
24            FIRST OF ALL, THE EVIDENCE IS CLEAR THE ONLY
 
25  WRONG, IF ANY WRONG, BE ATTRIBUTED TO LEWIS AND LAVONNE FURR
 
26  WAS THEIR FAILURE TO MAYBE ASK ADDITIONAL QUESTIONS IN
 
27  1985.  THAT’s IT.
 
28            COMING IN — COMING TO DECISIONS.  THAT’s IT.  NO
			
			

page 919
 
 
 
 1  CAUSE OF ACTION.  THERE’s BEEN NO EVIDENCE OF ANY
 
 2  INTENTIONAL DEFALCATION ON THEIR PART.  THERE’s NO EVIDENCE
 
 3  OF ANY PUBLIC BENEFIT — I MEAN, ANY BENEFIT TO THEM INTO
 
 4  THEIR OWN POCKETS.  THERE’s NO EVIDENCE THAT THEY BECAME
 
 5  RICH OVER THIS ESTATE.  IN FACT, THERE’s NO EVIDENCE THAT
 
 6  MR. CARTO BECAME RICH.  HE DIDN'T.  THE EVIDENCE IS HE
 
 7  DIDN'T GET A PENNY OF IT.  NO DAMAGES SHALL ARISE.
 
 8            THE DUTIES ARE PERFORMED IN GOOD FAITH.  HAS THERE
 
 9  BEEN EVIDENCE BEFORE YOU THAT THE FURRS DID NOT PERFORM
 
10  THEIR DUTIES IN GOOD FAITH?  NO.  TO THE CONTRARY, THE
 
11  DUTIES ARE PERFORMED IN A MANNER SUCH DIRECTOR — SUCH
 
12  DIRECTOR BELIEVES TO BE IN THE BEST INTERESTS OF THE
 
13  CORPORATION.
 
14            DO YOU HAVE ANY EVIDENCE BEFORE YOU THAT THE FURRS
 
15  DIDN'T DO THAT?  NO.  THE EVIDENCE YOU HAVE BEFORE YOU IS
 
16  THAT THE CORPORATION WAS NOT IN A FINANCIAL WHEREWITHAL TO
 
17  DO IT, AND AS I'LL POINT OUT TO THE COURT, THEY WERE LEGALLY
 
18  INFIRMED TO DO THAT.  THEY COULDN'T UNDER THE LAW INVEST IN
 
19  THAT NOR COULD THE FURRS COMMIT THIS NONPROFIT CORPORATION
 
20  TO COMMIT TO SUCH A QUOTE, SPECULATIVE VENTURE AT BEST.  AND
 
21  I'M GOING TO GET INTO A TIME LINE IN A MINUTE SO I CAN SHOW
 
22  YOU WHERE THE RIGHTS ARISE.
 
23            THEN “THE DUTIES ARE PERFORMED WITH SUCH CARE,
 
24  INCLUDING REASONABLE INQUIRY, AS AN ORDINARILY PRUDENT
 
25  PERSON IN A LIKE POSITION WOULD USE UNDER SIMILAR
 
26  CIRCUMSTANCES."
 
27            WHAT HAD BEEN THE CIRCUMSTANCES?  AS THE EVIDENCE
 
28  HAD SHOWN, LEWIS AND LAVONNE FURR WERE VOLUNTEER DIRECTORS,
			
			

page 920
 
 
 
 1  TOOK THE ADVICE FROM MR. CARTO, FROM AMONG OTHERS, AND THEY
 
 2  ACTED UPON IT.  IN FACT, IF YOU READ LEWIS AND LAVONNE'S
 
 3  DEPOSITIONS YOU WILL SEE THEY WERE INVOLVED IN THE LEGION ON
 
 4  THE VOLUNTEER BASIS, BUT THEY DIDN'T SPEND A FULL-TIME
 
 5  EFFORT TO IT.  THEY WERE THERE.  THEY READ THINGS OVER.
 
 6  THEY HEARD FROM THEIR ADVISERS, AND THEY COMMIT THEMSELVES
 
 7  AND COMMITTED TO THE CORPORATIONS BASED ON WHAT THEY HEARD
 
 8  AND READ.  THERE’s NO EVIDENCE THAT THEY DIDN'T USE
 
 9  REASONABLE CARE.  THE FURRS ARE GONE UNDER 5231.5.
 
10            NOW IF YOU LOOK AT 5231, THEY HAD AN OPPORTUNITY
 
11  TO RELY ON INFORMATION PRESENTED BY OTHERS, WHICH REMINDS
 
12  ME, YOUR HONOR, THERE’s A VERY IMPORTANT CONCEPT IN
 
13  CORPORATE LAW.  THAT IMPORTANT CONCEPT, YOUR HONOR, IS THAT
 
14  THIS COURT, AND I POINTED THIS OUT IN THE BRIEF, MAY NOT
 
15  SUBSTITUTE ITS JUDGMENT.  YOUR HONOR, THAT’s AN IMPORTANT
 
16  CONCEPT.  THIS COURT MAY NOT SUBSTITUTE ITS JUDGMENT FOR
 
17  THAT OF THE DIRECTORS — THAT’s A LONG-STANDING CORPORATE
 
18  POLICY — WHEN DIRECTORS HAVE ACTED.  UNLESS THEY SHOW THEY
 
19  CUT THEIR HAND IN THE TILL, THIS COURT MAY NOT SUBSTITUTE
 
20  ITS JUDGMENT FOR THAT OF THE CORPORATION.  WE CITED THAT IN
 
21  THE BRIEF TO YOU.  IT’s STRONG LAW.  IT’s LONG-STANDING
 
22  LAW.
 
23            IF ANYTHING, THEY CAN BE ACCUSED OF — I'M SAYING
 
24  THEY AREN'T.  WE'LL GET TO THOSE ISSUES IN JUST A MOMENT.
 
25  THEY COULD ONLY BE ACCUSED OF MISFEASANCE WITH RESPECT TO A
 
26  FAILURE TO ASK ADDITIONAL QUESTIONS.  BUT WHAT QUESTIONS
 
27  COULD HAVE BEEN ASKED IN 1985?  WILLIS TOLD IT.  THERE'S
 
28  NECA CERTIFICATES OUT THERE.  THESE NECA BEARER BONDS HE
			
			

page 921
 
 
 
 1  CLAIMED WERE GIFTED BY JEAN FARREL-EDISON, WHO HAD RECENTLY
 
 2  DIED, TO THE LEGION.
 
 3            AND THE REASON WHY I WANT TO DISCUSS THAT AT THIS
 
 4  JUNCTURE, YOUR HONOR, I THINK IT’s VERY IMPORTANT.  I WOULD
 
 5  LIKE TO PUT UP A TIME LINE FOR YOU.  THIS TIME LINE, I
 
 6  THINK, REALLY BRINGS INTO PERSPECTIVE THE IMPORTANCE OF
 
 7  WHERE RIGHTS ARE ESTABLISHED.
 
 8            WHAT I HAVE DONE FOR YOU, YOUR HONOR, BECAUSE
 
 9  AGAIN, IT’s VERY EASY TO BE THE MONDAY MORNING QUARTERBACK
 
10  AND LOOK IN HINDSIGHT AND SAY, HEY, I SHOULD HAVE MADE THAT
 
11  BET ON HOLYFIELD AT 25 TO 1.  BOY I WOULD BE A RICH MAN.
 
12  HOLYFIELD HAD A CHANCE.  HE WAS TRAINING.  HE HAD — HIS
 
13  TRAINERS THOUGHT HE WOULD WIN, THOUGHT HE WOULD WIN.  HE
 
14  WOULD BEAT TYSON.  HE WOULD BE THE NEW HEAVYWEIGHT CHAMPION
 
15  OF THE WORLD, NO DOUBT.  HE WAS HEIR TO THE THRONE.  DOES
 
16  THAT MEAN I SHOULD BET ON IT AT 25 TO 1?
 
17            THE ISSUE IS IN HINDSIGHT.  I'M ASKING THE COURT
 
18  TO LOOK AT IT ON A STEP-BY-STEP BASIS.  TAKE A LOOK IN 1985
 
19  PRIOR TO JEAN FARREL-EDISON DYING WE HAVE MR. CARTO AND
 
20  MRS. CARTO IN THIS AREA, WHICH I MARKED WITH A RED “X” OR
 
21  RED STAR.
 
22            WHAT RIGHTS DO THE LEGION HAVE AT THAT TIME TO
 
23  ANYTHING OF JEAN FARREL-EDISON?  NOTHING.  WE DO KNOW JEAN
 
24  FARREL-EDISON CREATED A CORPORATION THROUGH HER OWN
 
25  ATTORNEYS, AND THAT’s IN THE EXHIBITS.  I WILL GO OVER THE
 
26  EXHIBITS BRIEFLY WITH YOU.  CALLED NECA CORPORATION.
 
27            WHO WAS THE PRESIDENT OF THAT CORPORATION?  JEAN
 
28  FARREL-EDISON, WHO WAS THE OWNER OF THE BEARER BONDS, THE
			
			

page 922
 
 
 
 1  STOCK OF THAT CORPORATION.  IT WAS A LIBERIAN CORPORATION
 
 2  EVEN ADMITTED BY PLAINTIFFS.
 
 3            JEAN FARREL-EDISON — UP UNTIL THE TIME SHE DIED
 
 4  JEAN FARREL-EDISON EXERCISED DOMINION AND CONTROL OVER THE
 
 5  BEARER BONDS.  SHE EXERCISED A RIGHT TO THAT CORPORATION.
 
 6  SHE EXERCISED VOTING RIGHTS TO THAT CORPORATION UNTIL THE
 
 7  DAY SHE DIED.
 
 8            YOU WILL NOT FIND ONE — NOT ONE DOCUMENT NOR HAS
 
 9  PLAINTIFF, WHOSE BURDEN OF PROOF IT IS, SHOWN ONE DOCUMENT
 
10  SHOWING THE RIGHTS IN THE LEGION.
 
11            AND BY THE WAY, WHEN DID WILLIS GET HIS POWER OF
 
12  ATTORNEY?  IT’s NOT DURING 1984.  HE GOT IT IN 1985 AFTER
 
13  SHE DIED IN SEPTEMBER 1985; AND THAT HAPPENS TO BE, IF YOU
 
14  TAKE A LOOK AT THAT, IN SEPTEMBER 1985.  THOSE ARE EXHIBITS
 
15  10 AND 11.  HE WASN'T THE AGENT FOR ANY OF THAT RECOVERY
 
16  PRIOR TO HER DEATH, AND THERE’s NO DOCUMENT STATING THAT
 
17  THESE STOCKS WERE GIFTED TO THE LEGION PRIOR TO THIS TIME.
 
18            WHAT RIGHTS DID THE LEGION HAVE PRIOR TO HER
 
19  DEATH?  NONE.  THE ONLY THING THAT THE LEGION HAD AT THAT
 
20  POINT IN TIME WHEN SHE DIED WAS THE WORD OF MR. CARTO.
 
21  THAT’s IT.
 
22            AND WHAT DID HE DO?  DID HE OMIT TO TELL THEM
 
23  ANYTHING?  NO.  HE CAME TO THE LEGION, AND WE KNOW THAT
 
24  THROUGH THE MINUTES.  WE KNOW THAT THROUGH LAVONNE FURR'S
 
25  DEPOSITION.  AND I POINT THE COURT FROM PAGES 50 THROUGH
 
26  95.  I REQUEST THE COURT TO READ THAT BECAUSE SHE STATES
 
27  SPECIFICALLY HE CAME TO ME, LAVONNE FURR — SAID HE CAME TO
 
28  ME AND SAID:  JEAN DIED.  WE JUST FOUND OUT.  I BELIEVE THAT
			
			

page 923
 
 
 
 1  THOSE NECA SHARES, WHO JOAN ALTHAUS IS CONTESTING — BY THE
 
 2  WAY, THEY WERE CONTESTED.  IN FACT, YOU KNOW WHO TOOK
 
 3  POSSESSION AND CONTROL AS THE EVIDENCE HAS SHOWN FROM THE
 
 4  DISTRIBUTION AGREEMENT, WAS JOAN ALTHAUS.  SHE TOOK CONTROL
 
 5  OF THOSE NECA CERTIFICATES.  THEY COULD NOT GET, THE
 
 6  EVIDENCE SHOWS, THOSE NECA CERTIFICATES OUT OF THOSE BANKS.
 
 7  WHY?  BECAUSE WHAT DID WE HAVE SITTING IN FRONT OF US, A
 
 8  WILL LEAVING EVERYTHING, EVERYTHING — REMEMBER THESE
 
 9  CERTIFICATES DON'T SAY LEGION ON THEM.  THE SAFETY DEPOSIT
 
10  BOXES ARE IN NECA CORPORATION, NOT LEGION.
 
11            ALL YOU HAVE IN 1985 WHEN THAT WILL GOES IS THE
 
12  WORD OF THIS MAN.  AND HE GOES TO THE LEGION AND SAYS:
 
13  LOOK, I THINK IN TRUTH AND IN FACT I BELIEVE THAT THOSE
 
14  CERTIFICATES BELONGED TO THE LEGION, LAVONNE.  AND LAVONNE
 
15  SAYS — AND IT’s IN THE DEPOSITION BECAUSE SHE’s THE ONE
 
16  THAT CAME OUT WITH THIS, SAYS:  “WHAT DO WE HAVE TO DO?"
 
17            “I SCOUTED OUT THE TERRITORY.  IT’s GOING TO COST
 
18  US A LOT OF MONEY TO DO IT."
 
19            AND BY THE WAY, YOUR HONOR, THESE CONTINGENCIES --
 
20  AGAIN, HINDSIGHT.  MR. BEUGELMANS WILL STICK UP HIS HAND.
 
21  I'LL STICK UP MY HAND IF I KNOW SOMEBODY IS GOING TO GET
 
22  SEVEN AND A HALF MILLIONS DOLLARS.  I'LL TAKE THAT CASE, AND
 
23  I WILL GET MY LITTLE TIME CAPSULE AND GO BACK IN TIME, AND
 
24  THEN I WILL BE RICH 7 YEARS LATER.  IT’s EASY FOR
 
25  MR. BEUGELMANS TO LOOK IN HINDSIGHT.
 
26            LOOK AT THE STATE OF THE CORPORATION, AND LET'S
 
27  LOOK WHAT WAS AVAILABLE; WHAT RIGHTS THEY HAD.
 
28            THE WILL COMES OUT, AND WE KNOW THE WILL SAYS, AND
			
			

page 924
 
 
 
 1  THAT HAPPENS TO BE EXHIBIT, I BELIEVE, 10 — NO, NOT 10.
 
 2  I'M SORRY.  IT’s EXHIBIT 8.  AND THAT WILL SAYS FROM JEAN
 
 3  AND NOBODY CONTESTS THIS WILL.
 
 4            “I REVOKE ALL PREVIOUS TESTAMENTARY DISPOSITIONS
 
 5  AND INTEND TO SUBMIT THE EXECUTION OF MY TESTAMENT TO THE
 
 6  COLUMBIAN LAW.
 
 7            I MAKE UNIVERSAL HEIRESS OF MADAME WALTER” — AND
 
 8  I CAN'T READ THAT, “JOAN ALTHAUS.”  SHE GETS EVERYTHING AND
 
 9  ONLY IF SHE DIES DOES THE LEGION GET SOMETHING.  SHE HADN'T
 
10  DIED.  SHE GOT IT ALL.
 
11            AND OF INTEREST, YOUR HONOR, I WOULD LIKE YOU TO
 
12  TAKE A LOOK AT THE DISTRIBUTION AGREEMENT, EXHIBIT 20.
 
13  29 — I BELIEVE 28 AND 29 OR 29 SETTLEMENT AGREEMENT; 30,
 
14  MANDATE AGREEMENT.  RIDER TO THE DISTRIBUTION AGREEMENT.
 
15  THESE ARE ALL SIGNED BY THE LEGION, MR. ROLAND ROCHAT, JOAN
 
16  ALTHAUS, AND THEY ADMIT — THEY ADMIT — YOU TALK ABOUT
 
17  ADMISSIONS.  COUNSEL WANTS TO TALK ABOUT ADMISSIONS.  THE
 
18  LEGION ADMITS THEY HAD NO RIGHT TO THE NECA CERTIFICATES.
 
19  READ THE LANGUAGE.
 
20            ALSO INTERESTING READ THE LANGUAGE, ONE OF OUR
 
21  DEFENSES: “HAS BEEN RELEASED.”  ALL PARTIES RELEASED ONE
 
22  ANOTHER IN THE AGREEMENTS.
 
23            GUESS WHO SIGNED IT?  THE LEGION RELEASED IT.
 
24  WILLIS CARTO WAS A PARTY.  JOAN ALTHAUS WAS A PARTY.  ROLAND
 
25  ROCHAT WAS A PARTY.  THERE’s A RELEASE IN THE VERY
 
26  AGREEMENT.
 
27            LET’s GO FORWARD.  SO WHAT RIGHTS DID THE LEGION
 
28  HAVE IN 1985 BUT A PRAYER?  NO MONEY CAPITALIZATION — AND
			
			

page 925
 
 
 
 1  BY THE WAY, THE LEGION COULD NOT HAVE INVESTED IN ANY
 
 2  LITIGATION OVERSEAS, NOTWITHSTANDING THE SPECULATIVE NATURE
 
 3  OF IT, NOR TAKEN A BET ON THE HOLYFIELD FIGHT.  AND THE
 
 4  REASON FOR THAT, YOUR HONOR — AND THAT IS WHY THE PRUDENT
 
 5  JUDGMENT — THAT’s WHY THE PRUDENT JUDGMENT OF THE BOARD HAS
 
 6  TO COME INTO PLAY HERE.  I THOUGHT I HAD THAT.
 
 7            UNDER SECTION — I DON'T HAVE BUT IN THE TRIAL
 
 8  BRIEF — I THOUGHT I BLOWN THAT UP.  I GUESS — I THOUGHT I
 
 9  HAD THAT.
 
10            IN THE TRIAL BRIEF I POINTED THAT OUT, AND I
 
11  POINTED THAT OUT IN THE MOTION FOR JUDGMENT AS WELL.  THAT
 
12  UNDER THE CORPORATIONS CODE RELATING TO DIRECTOR’s ACTIONS
 
13  AND WHAT THEY CAN AND CANNOT INVEST IN, THERE’s TWO AREAS
 
14  THAT YOU MUST LOOK AT.  FIRST OF ALL, UNDER THE NONPROFIT
 
15  CORPORATION CODE, A CORPORATION MAY NOT INVEST — MAY NOT
 
16  INVEST ITS ASSETS OTHER THAN FOR ITS STATED PURPOSES.  AND
 
17  IN OTHER WORDS, THEY'RE RESTRICTED UNDER THE CORPORATIONS
 
18  CODE BY THE BYLAWS.  THAT’s THE FIRST INSTANCE.
 
19            WHAT DO WE HAVE AS THE BYLAWS?  WE HAVE TWO
 
20  BYLAWS.  WE HAVE AN ORIGINAL BYLAWS AND ONE PURPORTEDLY
 
21  ADMITTED.
 
22            TAKE A LOOK AT THE ORIGINAL BYLAWS TALKING ABOUT
 
23  WHAT THE LEGION COULD DO, EXHIBIT 2.  THESE ARE THE ORIGINAL
 
24  BYLAWS AS WILLIS CARTO TESTIFIED TO, AND NOBODY DISPUTES
 
25  THAT SOMEBODY AMENDED THESE.  THEY MAY DISPUTE WHEN THE
 
26  AMENDMENT WAS EFFECTED.
 
27            EXHIBIT 3 YOU WILL SEE THERE’s NO DIFFERENCE, AND
 
28  THERE’s NO CHANGE.  AND IN FACT, THEY WERE AMENDED.  THE
			
			

page 926
 
 
 
 1  BYLAWS WERE AMENDED BY THAT.  EVEN IF YOU GIVE IT DUE
 
 2  WEIGHT, IT DOESN'T CHANGE THIS.
 
 3            IT SAYS: “FINANCES, THE CORPORATION MAY ACCEPT
 
 4  CONTRIBUTIONS OF MONEY, NEWSPAPER AND MAGAZINE SPACE, RADIO
 
 5  AND TELEVISION TIME OR ANY OTHER THING OF VALUE TO BE
 
 6  EXCLUSIVELY FOR THE PURPOSES FOR WHICH THIS CORPORATION WAS
 
 7  ORGANIZED."
 
 8            DO YOU RECALL ONE OF THE ARGUMENTS OF COUNSEL,
 
 9  LET’s GO OUT.  LET’s RAISE MONEY.  WE DON'T HAVE ANY MONEY.
 
10  WE CAN GO OUT AND RAISE MONEY, GET DONATIONS.  THAT IS NOT
 
11  ONE OF THE STATED PURPOSES OF THE ORGANIZATION.  I ASK THE
 
12  COURT TO READ THE CHARTER.  THEY COULDN'T DO IT BY LAW
 
13  BECAUSE THE CORPORATIONS CODE STATES NONPROFIT CORPORATIONS
 
14  MAY NOT DO ANYTHING OUTSIDE OF THEIR BYLAWS OR CHARTER.
 
15  RAISING MONEY FOR LITIGATION OVERSEAS IS OUTSIDE THE STATED
 
16  PURPOSE, ESPECIALLY ON THE SPECULATIVE VENTURE, WHICH YOU
 
17  WILL SEE THEY COULDN'T DO ANYWAY ACCORDING TO THE LAW.
 
18            AND LET’s READ WHAT THE PURPOSES ARE.  TAKE A LOOK
 
19  AT EXHIBIT 1, THE CHARTER.
 
20            “THE PURPOSE FOR WHICH THE LEGION WAS FORMED IS TO
 
21  DO A GENERAL ADVERTISING BUSINESS AS AUTHORIZED BY
 
22  SUBDIVISION 41 OF ARTICLE 1302 OF THE TEXAS REVISED CIVIL
 
23  STATUTES OF 1925, TO WIT: AIDING AND ASSISTING THE PROMOTION
 
24  AND PRESERVATION OF AMERICAN CONSTITUTIONAL GOVERNMENT, AS
 
25  GUARANTEED BY THE CONSTITUTION OF THE UNITED STATES, THROUGH
 
26  PUBLICITY CAMPAIGNS CONDUCTED THROUGH THE MEDIUM OF
 
27  MAGAZINES, RADIO, TELEVISION, NEWSPAPERS, PAMPHLETS AND
 
28  PERIODICALS; AND TO PREPARE PATRIOTIC ADVERTISING COPY FOR
			
			

page 927
 
 
 
 1  USE OF MAGAZINES RADIO, TELEVISION, NEWSPAPER, PERIODICALS;
 
 2  AND TO CONDUCT PUBLICITY CAMPAIGNS DESIGNED TO EDUCATE THE
 
 3  AMERICAN PUBLIC IN THE FUNDAMENTALS OF AMERICANISM.  THE
 
 4  ACTIVITIES OF THE CORPORATION, AS AUTHORIZED HEREIN, WILL BE
 
 5  CONDUCTED WITHOUT PROFIT, AND THE ADVERTISING COPY WILL BE
 
 6  PROVIDED FOR ACTUAL COST OF PRODUCTION AND WITHOUT PROFIT TO
 
 7  THE CORPORATION."
 
 8            WELL, YOUR HONOR, YOU WILL SEE, AS YOU HAVE SEEN,
 
 9  THOSE PURPOSES WERE FULFILLED BY THE USE OF THAT MONEY IN
 
10  ANY EVENT.  IT WENT TO A RADIO SPOT.  AND I MUST TELL YOU IN
 
11  READING LEWIS AND LAVONNE’s DEPOSITION I WANT TO POINT THE
 
12  COURT OUT SPECIFICALLY TO PAGE 83 AND WHERE LAVONNE FURR IS
 
13  TALKING ABOUT THE RESOLUTION — MARCH 5, 1991 RESOLUTION,
 
14  WHICH IS A RED HERRING.  THERE ARE TWO MINUTES FOR THAT
 
15  MEETING, NOT INCONSISTENT.  LAVONNE FURR HAS MINUTES OF THE
 
16  MEETING, WROTE THE MINUTES DOWN.  SHE WAS THE SECRETARY.
 
17  THOSE ARE PROPER MINUTES.  LEWIS FURR WROTE DOWN MINUTES
 
18  TOO.  HE WAS THE CHAIRMAN.  THERE’s NO INCONSISTENCY WITH
 
19  THEM.  IN FACT, ALL LEWIS DID WAS MEMORIALIZE THE DIRECTORS
 
20  THAT WERE ELECTED AND NOMINATED.  LAVONNE ECHOED THAT AND
 
21  THEN INCLUDED THE RESOLUTIONS THAT WERE ADOPTED.  SO THAT'S
 
22  A RED HERRING AGAIN.
 
23            LET ME TELL YOU WHAT SHE SAID.  I WOULD LIKE TO
 
24  READ THIS.  IT’s VERY IMPORTANT.  IN THE DEPOSITION ON MARCH
 
25  22, 1996, SHE STATES, TALKING ABOUT THAT RESOLUTION,
 
26  REMEMBER, NOT PUTTING THE MONEY INTO THE CORPORATION, HAVING
 
27  PAT FOETISCH SET UP VIBET, THE OFFSHORE COMPANY DOING THESE
 
28  THINGS.
			
			

page 928
 
 
 
 1            “QUESTION:  WHAT WAS YOUR UNDERSTANDING WHAT WAS
 
 2  MEANT BY THIS RESOLUTION?
 
 3            “ANSWER FROM LAVONNE:  TO CONTINUE WHAT HE STARTED
 
 4  OUT TO DO.  WE GAVE HIM” — REFERRING TO WILLIS CARTO — “A
 
 5  POWER OF ATTORNEY.  HE WAS FINANCING IT AND HE HAD OUR
 
 6  BLESSINGS."
 
 7            “QUESTION:  AND HE HAD YOUR BLESSINGS TO
 
 8  DISTRIBUTE THAT TO WHATEVER SOURCES HE DEEMED FIT?
 
 9            “ANSWER:  THAT’s CORRECT.
 
10            “QUESTION:  AND DO YOU RECALL IN YOUR
 
11  CONVERSATIONS WITH THESE VARIOUS PEOPLE THAT ALL THE
 
12  DIRECTORS CONCURRED?
 
13            “ANSWER:  THEY DID CONCUR.
 
14            “QUESTION:  WAS IT YOUR UNDERSTANDING AS A
 
15  DIRECTOR THAT WILLIS WOULD HAVE THE AUTHORITY TO DISTRIBUTE
 
16  WHATEVER ASSETS WERE RECOVERED FROM JEAN FARREL-EDISON'S
 
17  ESTATE AT THIS TIME?"
 
18            “YES."
 
19            “QUESTION:  AND I BELIEVE YOU TESTIFIED TO THAT
 
20  AFTER THIS POINT IN TIME HE DID KEEP YOU ABREAST AS TO HOW
 
21  HE WAS DISTRIBUTING MONIES?
 
22            “ANSWER:  HE ALWAYS KEPT US INFORMED TO WHAT WAS
 
23  GOING ON.
 
24            “QUESTION:  AT SOME POINT IN TIME AFTER THIS” --
 
25  THIS IS AFTER THE JANUARY MEETING, 1991 MEETING — “DID YOU
 
26  HAVE AN OCCASION TO MEET WITH MR. CARTO PERSONALLY?"
 
27            “ANSWER:  OVER THE TELEPHONE.
 
28            “QUESTION:  WHY DON'T YOU TAKE A LOOK AT PARAGRAPH
			
			

page 929
 
 
 
 1  PAGE 9 IN THE DECLARATION.” — REFERRING TO THE DECLARATION
 
 2  THAT SHE SUPPLIED IN THIS ACTION EARLIER — “I BELIEVE YOU
 
 3  HAVE THAT IN FRONT OF YOU, YOUR DECLARATION."
 
 4            “ANSWER:  ALL RIGHT.
 
 5            “QUESTION:  IT SAYS PARAGRAPH 16.
 
 6            “ANSWER:  CORRECT.
 
 7            “QUESTION:  DOES THAT REFRESH YOUR RECOLLECTION
 
 8  THAT YOU MET WITH WILLIS APPROXIMATELY 2 MONTHS AFTER THE
 
 9  BOARD MEETING ON JANUARY 9, 1991?
 
10            “ANSWER:  THIS IS BY TELEPHONE.
 
11            “QUESTION:  OKAY.  SO WHEN YOU SAID 'MY HUSBAND
 
12  AND I MET WITH WILLIS,' YOU MEANT BY OVER THE TELEPHONE?
 
13            “ANSWER:  OVER THE TELEPHONE.
 
14            “QUESTION:  DID — TELL ME SPECIFICALLY IN THE
 
15  TELEPHONE CONVERSATION YOU HAD WITH WILLIS A COUPLE OF
 
16  MONTHS AFTER THE JANUARY 9, 1991 MEETING WHAT WAS SAID BY
 
17  YOU TO HIM.
 
18            “ANSWER:  WE DISCUSSED HOW THE MONEY WOULD BE
 
19  DISTRIBUTED, IN WHICH WAY.  WE DISCUSSED ABOUT THE RADIO AND
 
20  THE TELEVISION, AND I WAS THE ONE THAT BROUGHT UP THE AUDIO
 
21  AND VIDEO CASSETTES.  MY DADDY WAS HARD OF HEARING, AND I
 
22  SAID, YOU KNOW, DADDY CAN'T READ THIS SPOTLIGHT ANYMORE.  I
 
23  SAID, LET’s GO INTO THE AUDIO.  HE WOULD BECAUSE HE LISTENS
 
24  TO TAPES ALL THE TIME.
 
25            I SAID, AND HE CAN'T SEE THE TV VERY WELL.  I
 
26  SAID, WHY DON'T WE GO INTO THE AUDIO PART?
 
27            “QUESTION:  DID YOU HAVE AN UNDERSTANDING AT THIS
 
28  TIME DURING YOUR CONVERSATIONS THAT BOTH YOU AND YOUR
			
			

page 930
 
 
 
 1  HUSBAND HAD WITH WILLIS THAT SOME OF THE MONIES WOULD BE
 
 2  DISTRIBUTED IN CONNECTION WITH A RADIO STATION?
 
 3            “ANSWER:  I DID."
 
 4            YOU REMEMBER THIS IS 1991, AND A CORPORATION MAY
 
 5  ONLY ACT THROUGH THE DIRECTORS AND OFFICERS.  THIS GOES TO
 
 6  THE STATUTE OF LIMITATIONS ARGUMENT AS WELL, YOUR HONOR.
 
 7            “QUESTION:  AND WHERE WERE YOU — AND WERE YOU
 
 8  AWARE OF WHAT RADIO STATION THAT WAS?
 
 9            “ANSWER:  I CAN'T GIVE THE CALL LETTER.  IT WAS, I
 
10  BELIEVE, IN FLORIDA.  I CAN'T REMEMBER THE CALL LETTERS
 
11  RIGHT NOW.  WE KNOW IT WAS SUN RADIO IN FLORIDA.
 
12            “QUESTION:  AND HE TOLD YOU THAT MONIES WOULD BE
 
13  DISTRIBUTED TO THAT STATION?
 
14            “ANSWER:  RIGHT.
 
15            “QUESTION:  AND YOU AGREED WITH THAT?
 
16            “ANSWER:  HE ASKED FOR THE APPROVAL OR ASKED FOR
 
17  HIS APPROVAL.  WOULD I AND LEWIS AGREE TO IT, AND WE DID.
 
18            “QUESTION:  DO YOU RECALL IF THE OTHER DIRECTORS
 
19  AGREED TO IT TOO?
 
20            “ANSWER:  THEY DID, YES.
 
21            “QUESTION:  AND DID YOU HAVE AN UNDERSTANDING OF
 
22  WHAT WAS BEING PROMOTED BY THE RADIO STATION?
 
23            “ANSWER:  YES.  THERE WAS NEWS AND HEALTH.  IT WAS
 
24  A TALK SHOW.
 
25            “QUESTION:  DO YOU EVER RECALL WHO THE TALK SHOW
 
26  HOST WAS?
 
27            “ANSWER:  TOM VALENTINE.  HE HAD OTHER — HE HAD
 
28  GUESTS, I MEAN, HE WASN'T, YOU KNOW, HE WAS THE — WHAT DO
			
			

page 931
 
 
 
 1  YOU CALL IT, M.C.?
 
 2            “QUESTION:  RIGHT.  SO YOU AGREED THAT ASSETS FROM
 
 3  THE JEAN FARREL-EDISON’s ESTATE COULD BE UTILIZED FOR
 
 4  PURPOSES OF PROMOTING THAT STATION?
 
 5            “ANSWER:  I DO.  I KNEW TOM VALENTINE.
 
 6            “AND DID YOU AGREE WITH WHAT MR. VALENTINE
 
 7  ESPOUSED?
 
 8            “ANSWER:  WHEN I COULD HEAR HIM, YES."
 
 9            THAT’s ONLY ONE ASPECT.  THIS CUTS THROUGH THEIR
 
10  ARGUMENT THAT THE FURRS WEREN'T INFORMED.  AND THE FURRS AS
 
11  YOU SEEN IN THE EVIDENCE HAVE DONE NOTHING WRONG.
 
12            GO BACK TO THE TIME LINE.  WHAT RIGHTS DID THEY
 
13  HAVE IN 1985?  A CHANCE TO ENTER INTO THE LITIGATION WITH NO
 
14  MONEY, AND WILLIS COMES UP WITH A PROPOSAL, AND THE PROPOSAL
 
15  IS SIMPLE, AND IT’s MEMORIALIZED BY A LETTER, WHICH
 
16  SUBSEQUENTLY WAS MEMORIALIZED BY CORPORATE ACTION.  THAT IS,
 
17  LOOK, I WILL FINANCE — AS LAVONNE FURR SAID:  I'LL FINANCE
 
18  IT.  WHETHER HE TOOK IT BY LOANS OR DID IT THROUGH HIS OWN
 
19  POCKET, I'LL FINANCE IT IF I HAVE THE ABILITY TO DISTRIBUTE
 
20  IT AND DISTRIBUTE IT CONSISTENT WITH THE LEGION PURPOSES AND
 
21  JEAN FARREL-EDISON’s PURPOSES.
 
22            AND REMEMBER, AGAIN THERE WAS NO DOCUMENT.  IN
 
23  FACT, THERE WAS LITIGATION.  IN FACT, THERE WAS STOPPAGE OF
 
24  ASSETS BECAUSE THE LEGION DIDN'T HAVE A DOCUMENT SHOWING ANY
 
25  ENTITLEMENT TO ANYTHING OF JEAN FARREL-EDISON OTHER THAN
 
26  MR. Carto’s WORD, WHICH BY THE WAY, IT’s VERY INTERESTING.
 
27  THEY DON'T WANT — THEY DON'T WANT TO PUT ANY CREDIBILITY TO
 
28  HIS WORD.  AGAIN, THEY WILL PUT CREDIBILITY TO HIS WORD WHEN
			
			

page 932
 
 
 
 1  IT SUITS THEM, BUT THEY WON'T PUT CREDIBILITY TO HIS WORD
 
 2  WHEN IT DOESN'T SUIT THEM.  IT’s OKAY, WILLIS.  YOU ARE
 
 3  RIGHT.  YOU ARE TELLING THE TRUTH NOW.  IT’s PER THE
 
 4  LEGION.
 
 5            SO WHAT DOES HE DO?  AT THAT POINT WE KNOW FOR A
 
 6  FACT HE AND HIS WIFE AND HENRY FISCHER, WHO HAD A POWER OF
 
 7  ATTORNEY FROM THE CORPORATION, WHO WAS DISCLOSED TO THE
 
 8  CORPORATION, EMBARKED UPON TRYING TO RECOVER THESE NECA
 
 9  BEARER CERTIFICATES, AGAIN, NOT IN ANYBODY’s NAME, BUT JEAN
 
10  FARREL-EDISON — IN THE POSSESSION AND CONTROL OF JEAN — I
 
11  MEAN, JOAN ALTHAUS.
 
12            AND THEY SPENT FIVE ARDUOUS YEARS AND LONG YEARS
 
13  PAYING ALMOST $400,000 IN ATTORNEY’s FEES.  NOW, YOUR HONOR,
 
14  CIRCUMSTANTIALLY WHY WOULD LIBERTY LOBBY PAY $400,000 FOR
 
15  ATTORNEYS OVERSEAS?  THEY HAVEN'T ANSWERED THAT QUESTION.
 
16  YOU KNOW WHY?  BECAUSE THE ANSWER IS SELF-EVIDENT.  IT WAS
 
17  LOANED TO WILLIS CARTO.
 
18            WHY WOULD WILLIS TAKE A LOAN ON HIS OWN TICKET
 
19  BECAUSE, BY THE WAY, THAT’s THE ONLY VEHICLE THAT COULD HAVE
 
20  TAKEN A LOAN ON THAT BECAUSE THE LEGION WAS PRECLUDED BY THE
 
21  BYLAWS AND PRECLUDED UNDER NONPROFIT CORPORATION LAW TO TAKE
 
22  ON A LOAN ON A SPECULATIVE VENTURE.
 
23            WHY WOULD WILLIS DO THAT?  THE ANSWER IS
 
24  SELF-EVIDENT.  BECAUSE HE HAD AN AGREEMENT.  WITHOUT THAT
 
25  AGREEMENT THERE’s NO REASON FOR WILLIS TO DO THAT.  HE
 
26  WASN'T BENEFITTING.
 
27            THERE’s NO REASON FOR LIBERTY LOBBY TO DO THAT.
 
28  THEY WEREN'T BENEFITTING.  WHY?  CAN THEY ANSWER THAT
			
			

page 933
 
 
 
 1  QUESTION?  THEY HAVEN'T BY THE EVIDENCE.
 
 2            THE REASON IS SIMPLE.  THERE WAS AN AGREEMENT,
 
 3  WHICH VESTED RIGHTS IN WILLIS.  AND WHAT WERE THE RIGHTS?
 
 4  NOT TO PUT THE MONEY IN THE POCKET.  YOU KNOW WHAT?  THIS IS
 
 5  WHAT WAS LEFT OF IT IN THE POCKET.  NOTHING.  HE HAD THE
 
 6  RIGHT TO DISTRIBUTE THAT FOR THE CAUSES OF JEAN
 
 7  FARREL-EDISON.  WE HEARD THROUGH THE EVIDENCE THEY WERE THE
 
 8  SAME AS THE LEGION'S:  THE PROMOTION OF THE FIRST-AMENDED
 
 9  RIGHTS, CONSTITUTIONAL RIGHTS THROUGH THE USE OF MEDIA,
 
10  RADIO, SO FORTH.
 
11            AND WILLIS, WHY WOULD HE DO THAT IF HE DIDN'T
 
12  BELIEVE HE HAD THE RIGHT?  THERE’s AN ESTOPPEL ARGUMENT
 
13  HERE.  NOW THE CORPORATION IS SAYING YOU DON'T HAVE THE
 
14  RIGHT, WILLIS, BECAUSE WE'RE NEW.  WE'RE HERE IN 1993.
 
15  WE'RE NEW.  YOU DON'T HAVE THE RIGHTS NOW BECAUSE YOU GOT
 
16  THE MONEY FOR US.  THAT’s REALLY NICE.
 
17            IF YOU RECALL THE CASE THAT I — THE LUNDGREN CASE
 
18  I POINTED OUT IN MY BRIEF EARLIER, WHICH SAYS THAT THAT TYPE
 
19  OF CONDUCT IS DISDAINED, NOT ONLY GOES TO A LACHES BUT AN
 
20  ESTOPPEL ARGUMENT.  YOU KNOW, GO AFTER IT.  IF YOU MAKE
 
21  GOOD, IT’s OURS; BUT IF YOU LOSE, IT’s YOURS.
 
22            WHERE DO YOU THINK WE WOULD BE TODAY IF IN FACT
 
23  ZERO WOULD HAVE HAPPENED IN THE LITIGATION OVERSEAS?  DO YOU
 
24  THINK THEY WOULD SAY, WILLIS — IN 1993, HERE WILLIS, LET ME
 
25  TAKE OUT MY WALLET AND GIVE ME THE MONEY.  I CAN'T GET MY
 
26  WALLET OUT, FRANKLY.
 
27       THE COURT:  MAYBE IT’s FULL OF ALL THAT MONEY.
 
28       MR. WAIER:  NO, BUT HERE, WILLIS.  THERE’s THE MONEY
			
			

page 934
 
 
 
 1  BACK.
 
 2            YOU KNOW WHAT?  THAT ISN'T THE WAY IT WAS GOING TO
 
 3  HAPPEN.  IF NOTHING WOULD HAVE CAME FROM THE ESTATE AND
 
 4  GREED WOULDN'T HAVE TAKEN OVER IN 1993, YOU WOULDN'T BE
 
 5  HERE, EVEN BY WEBER’s TESTIMONY — I'LL GET INTO BRIEFLY.
 
 6  HE EVEN ADMITTED AS LONG AS THE MONEY WENT TO THE GOALS, NOT
 
 7  ONLY THE CONFERENCE OF THE LEGION, THE GOALS OF THE LEGION,
 
 8  WE KNOW THAT.
 
 9            BY THE WAY, THAT’s — DID COUNSEL SAY CIVIL CODE
 
10  SECTION 623?  I THINK HE DID.
 
11            DO YOU RECALL WHAT WEBER SAID ON PAGE 155?  HE
 
12  SAID HE WASN'T CONCERNED.  HE WASN'T CONCERNED IN ANYTHING
 
13  WILLIS DID, AS LONG AS IT SPECIFICALLY WENT AND PRIMARILY
 
14  AIMED AT THE GOALS OF BOTH LEGION, WAS MEANT TO FURTHER THE
 
15  GOALS OF THE LEGION’s GOALS.  AND I WANT TO EMPHASIZE THE
 
16  TERM “GOALS,” NOT TO EMPHASIZE ANYTHING ELSE BUT THE GOALS.
 
17  IT’s OKAY.  AND AS LONG AS IT DIDN'T GO INTO THE POCKET.
 
18            THEY MADE AN ADMISSION.  THEY'RE NOT CONCERNED
 
19  ABOUT ANYTHING CONCERNING THIS PRIOR TO SEPTEMBER OF 1993.
 
20  AGAIN, COUNSEL QUOTES LAW WHEN IT SUITS HIM, BUT THEN HE
 
21  DOESN'T BELIEVE IT APPLIES WHEN IT GOES AGAINST HIM WITH
 
22  NO — REMEMBER, WEBER IS A DIRECTOR, PRESENT DIRECTOR OF THE
 
23  FIRM.  IN ESSENCE, HE AND GREG RAVEN ARE RUNNING THE FIRM OR
 
24  THE CORPORATION TO THIS DATE.
 
25            IF YOU ARE LOOKING FOR 620, I BELIEVE, CIVIL CODE
 
26  SECTION 623.
 
27            SO WHAT DO WE HAVE IN 1990, AND WHAT HAPPENS IN
 
28  1990?  LOW AND BEHOLD ALL OF THE EFFORTS OF WILLIS CARTO AND
			
			

page 935
 
 
 
 1  ELISABETH CARTO SPENDING OVER 3,000 HOURS OF HER TIME,
 
 2  MONEY, EXPENSE, THEY ENTER INTO A SETTLEMENT AGREEMENT.
 
 3  IT’s PAYING OFF.  HOLYFIELD IS WINNING.  I'M GETTING THE
 
 4  MONEY.  I CAN'T BELIEVE IT.  I SUGGEST IT’s LONGER THAN 25
 
 5  TO 1 LONG SHOT.
 
 6            BUT IN ANY EVENT, A SETTLEMENT AGREEMENT IS
 
 7  ENTERED INTO.  WOULD YOU — NOW IT’s VERY INTERESTING THIS
 
 8  AGREEMENT IN 1985.  THE LEGION TODAY — TODAY I WANT TO
 
 9  EMPHASIZE — TODAY SAYS NO CORPORATE AUTHORITY FOR THAT.
 
10  NONE WHATSOEVER.  LEWIS AND LAVONNE FURR CAN'T ENTER INTO
 
11  THAT.  NONE OF THAT.  WE'RE GOING TO FOLLOW THE LAW.
 
12            1990 THIS TURNED AROUND.  WILLIS HAD AUTHORITY TO
 
13  ENTER INTO IT.  THE FURRS HAD AUTHORITY TO GRANT THEM THAT
 
14  AUTHORITY.  HERE IS THE MINUTES.  THEY DON'T CONTEST THOSE
 
15  MINUTES.  THEY DON'T NITPICK THOSE MINUTES.  YOU KNOW WHY?
 
16  BECAUSE EVEN BY THE COMPLAINT ALL OF THEIR RIGHTS STEM FROM
 
17  THAT AGREEMENT.  THE LEGION’s RIGHTS, WHATEVER THEY ARE,
 
18  STEM FROM THESE AGREEMENTS.  I DON'T CARE HOW YOU WANT TO
 
19  READ THE WORDING.  THIS IS WHERE THEY CLAIM — AND YOU KNOW
 
20  SOMETHING, YOUR HONOR?  THEY'RE OUT OF THE BOX AGAIN.
 
21  THAT’s WHAT THEY'RE SUING UNDER.  THAT IS THEIR CLAIM TO
 
22  FAME.
 
23            AND I WOULD LIKE TO INVITE THE COURT TO READ 5142
 
24  AS POINTED OUT BY COUNSEL.  WHY DID THEY NOT MAINTAIN THE
 
25  ACTION?  MR. BEUGELMANS SAYS THAT I LOOK AT THINGS HIGHLY
 
26  TECHNICAL.  WELL, I'M NOT THE LEGISLATURE, AND I DON'T
 
27  CREATE THE LAWS.  I VOTE FOR MY CONGRESSMAN.  I DON'T CREATE
 
28  THE LAWS.  WHAT DOES IT SAY, YOUR HONOR?  THEY SEEK
			
			

page 936
 
 
 
 1  INJUNCTIVE RELIEF, DON'T THEY, IN THE COMPLAINT?
 
 2            AND 5142 SAYS:  “IN AN ACTION UNDER THIS SECTION,
 
 3  THE COURT MAY NOT RESCIND OR ENJOIN THE PERFORMANCE OF A
 
 4  CONTRACT.”  THEY SEEK INJUNCTION UNDER THAT CONTRACT.
 
 5  THAT’s THE BASIS OF THEIR ACTION.  “UNLESS” — AND THERE'S
 
 6  NO MAYBES ABOUT THIS — “ALL OF THE PARTIES TO THE CONTRACT
 
 7  ARE PARTIES TO THE ACTION."
 
 8            OKAY.  WHERE IS JOAN ALTHAUS?  FIND HER IN THE
 
 9  CAPTION.  WHERE IS ROLAND ROCHAT?  FIND HIM IN THE CAPTION.
 
10  WHERE IS PAT FOETISCH?  FIND HIM IN THE CAPTION.
 
11            THEY CAN'T EVEN MAINTAIN INJUNCTIVE RELIEF.  THEY
 
12  CAN'T EVEN MAINTAIN THE ACTION TODAY.
 
13            THIS IS THE ONE POINTED OUT.  DIDN'T THEY AMEND
 
14  THE COMPLAINT TO THE 5142?  I BELIEVE THAT’s WHAT THEY
 
15  AMENDED THE COMPLAINT FOR, AND THE COURT ALLOWED IT.
 
16            SO WHAT DO WE HAVE IF IN FACT THAT CONTRACT, THE
 
17  DISTRIBUTION SETTLEMENT AGREEMENT, WAS NOT AUTHORIZED
 
18  BECAUSE THE SAME ACTIONS WERE TAKEN ALL THE WAY; AND
 
19  CONSISTENT THROUGHOUT IF YOU DON'T AUTHORIZE THIS AGREEMENT
 
20  WITH WILLIS BECAUSE OF SOME CORPORATE INFIRMITY, YOU
 
21  CERTAINLY CANNOT AUTHORIZE THE DISTRIBUTION AGREEMENT IN
 
22  1990.  THE SAME ACTIONS WERE TAKEN.  THE SAME PEOPLE WERE
 
23  CONSULTED.  EVERYTHING IS THE SAME.  THEY CAN'T HAVE THEIR
 
24  CAKE AND EAT IT TOO.
 
25            NOW ASSUME THE COURT BUYS THE ARGUMENT — I DON'T
 
26  KNOW HOW THE COURT CAN — THAT THIS AGREEMENT IN 1985 IS NO
 
27  GOOD, BUT THESE AGREEMENTS IN 1990 ARE GOOD, EVEN THOUGH
 
28  WILLIS DIDN'T SIGN IT, ALTHOUGH WE WILL ADMIT HE AUTHORIZED
			
			

page 937
 
 
 
 1  MR. FOETISCH TO SIGN HIS NAME AND THE LEGION’s NAME.  HE
 
 2  ADMITS THAT.  THAT’s WHAT HE TESTIFIED TO.
 
 3            WHAT HAPPENS IN 1991?  EARLY IN JANUARY THROUGH
 
 4  MARCH THERE IS A DISTRIBUTION OF ASSETS OUTSIDE OF THE
 
 5  ESTATE.  AND I INVITE THE COURT TO READ THE DOCUMENTS,
 
 6  EXHIBIT 29, 30, 31, 32, 33.  IT TALKS ABOUT WHAT WAS
 
 7  DISTRIBUTED.  IT TALKS ABOUT THE AMOUNT.  IT TALKS ABOUT
 
 8  SETTING UP THIS CORPORATION NAMED VIBET.
 
 9            AND BY THE WAY, I DO WANT TO INDICATE ONE THING
 
10  WHICH COUNSEL AGAIN HAS MISLED THIS COURT, AND THERE IS MANY
 
11  THINGS HE MISLED THE COURT IN, AS TO WHETHER LAVONNE FURR
 
12  TESTIFIED.  IF YOU RECALL MR. BEUGELMANS EMPHATICALLY STATED
 
13  MR. CARTO BACK IN 1991 DIDN'T TELL LAVONNE FURR HOW MUCH WAS
 
14  IN THE ESTATE.  OF COURSE, IF YOU TAKE A LOOK THE DOCUMENTS
 
15  DEFY WHAT MR. BEUGELMANS SAID.  MR. CARTO COULDN'T HAVE
 
16  KNOWN BACK IN 1990 THROUGH UP TO JANUARY 1991 BECAUSE NOT
 
17  EVEN THE ATTORNEYS KNEW.  THEY HADN'T SETTLED ON THE EXACT
 
18  AMOUNT OF THE ESTATE.  THERE WERE OTHER ISSUES THEY HAD TO
 
19  LIQUIDATE, GEMS.  THERE WAS NO WAY TO KNOW WHAT LAVONNE FURR
 
20  STATED IN THE DEPOSITION.
 
21       THE COURT:  IF THERE’s NO WAY TO KNOW WAY BACK IN 80'S
 
22  WHEN HE FILED A — HE FILED A COMPLAINT IN THIS COUNTRY
 
23  SAYING THE ESTATE WAS WORTH 16 MILLION --
 
24       MR. WAIER:  NO.  WHAT HE DID, HE VERIFIED A COMPLAINT
 
25  THAT HE BELIEVED THE NECA CERTIFICATES — READ THE
 
26  CLOSING — WERE VALID AT 16 MILLION.  HE BELIEVED BASED ON
 
27  THE GOOD FAITH BELIEF HE VERIFIED THAT NOBODY HAD ANY RIGHTS
 
28  TO NECA AT THAT TIME.
			
			

page 938
 
 
 
 1            YOUR HONOR, THEY'RE IN LITIGATION, AND JOAN
 
 2  ALTHAUS IS SAYING, THEY'RE ALL MINE.  BUT HE VALUED IN 19 --
 
 3  NOBODY HAS THEM AT THIS TIME.  IT’s A RED HERRING.
 
 4            BUT GUESS WHAT?  CAN I TELL YOU SOMETHING, YOUR
 
 5  HONOR?  YOU POINTED OUT SOMETHING REAL INTERESTING.  THE
 
 6  FURRS HAD THAT INFORMATION TOO IN 1987.  YOU KNOW WHY?
 
 7  THEIR ATTORNEYS KNEW.  THE LEGION’s ATTORNEYS KNEW IN 1987
 
 8  BASED ON THE COMPLAINT.  WHEN THE ATTORNEY KNOWS, THE
 
 9  CORPORATION KNOWS.  THERE’s NO ALLEGATION THAT THE ATTORNEYS
 
10  WERE HIDING ANYTHING FROM THE CORPORATION.  IT’s PUBLIC
 
11  RECORD.  THOSE DOCUMENTS ARE PUBLIC RECORD.
 
12            IF THE FURRS CAN BE ACCUSED OF ANYTHING — MAYBE
 
13  THEY SHOULD HAVE GONE TO NORTH CAROLINA.  THEY KNEW ABOUT
 
14  THE LITIGATION.  IT’s DISCUSSED IN THE MINUTES.
 
15            SO THE 16 MILLION, THE FURRS KNEW IT.  I'M GLAD
 
16  YOU BROUGHT THAT POINT UP, OR THEY HAD THE MEANS TO KNOW IN
 
17  1987 BECAUSE IT’s A PUBLIC DOCUMENT.  THERE’s NO HIDING THE
 
18  BALL.  IF THEY WERE HIDING THE BALL, WILLIS WOULDN'T HAVE
 
19  PUT IT IN A PUBLIC DOCUMENT.  YOU CAN'T OMIT TO TELL
 
20  SOMEBODY SOMETHING WHEN YOU PUT IT IN A PUBLIC DOCUMENT FOR
 
21  THE WORLD TO SEE.
 
22            YES, 1987.  YOU ARE RIGHT.  AND THAT WAS NOT ONLY
 
23  DISCLOSURE TO THE LEGION’s ATTORNEYS, BUT TO THE LEGION
 
24  ITSELF.  THE LAW IS CLEAR.  KNOWLEDGE TO THE ATTORNEYS IS
 
25  IMPUTED TO THE CORPORATION.  THAT’s THE LAW.  AND THERE'S
 
26  BEEN NO CLAIM THAT THE ATTORNEYS DIDN'T REPRESENT THE
 
27  LEGION.  IN FACT, MR. BEUGELMANS, HE SAID THAT HE HAS A
 
28  PROBLEM BECAUSE IF THE ATTORNEYS WEREN'T REPRESENTING THE
			
			

page 939
 
 
 
 1  LEGION, WERE THEY REPRESENTING WILLIS?  NO.  THE ATTORNEYS
 
 2  REPRESENT — THEY GOT US; WHAT WE WANTED.  WHEN IT SUITS
 
 3  THEM, IT SUITS THEM.  BUT THAT WAS KNOWLEDGE TO THE
 
 4  CORPORATION IN 1987.  NOTHING WAS HIDDEN.
 
 5            REMEMBER WHAT THEY'RE CLAIMING.  WILLIS WAS HIDING
 
 6  THE BALL.  THERE’s NO OMISSION TO DISCLOSE.  HE DID INFORM
 
 7  THE CORPORATION.  HE INFORMED THE WORLD WHAT HE BELIEVED
 
 8  THAT IS WORTH 16 MILLION.
 
 9            BY THE WAY, AT THAT JUNCTURE DID THE LEGION COME
 
10  IN AND SAY, OUR DEAL IS OFF, WILLIS.  SORRY.  HEY, YOU THINK
 
11  IT’s 16 MILLION.  WE'RE GOING TO GO FORWARD.  FORGET YOU.
 
12  FORGET THE MONEY YOU SPENT UP TO 1987.  YOU WON'T FIND ONE
 
13  MINUTE RESCINDING THAT.  YOU WON'T FIND ANY ACTION FROM
 
14  LEWIS AND LAVONNE FURR RESCINDING THAT ACTION.  I'M TELLING
 
15  YOU, UNDER THE LAW THEY WERE NOT ONLY FINANCIALLY INFIRMED;
 
16  THEY WERE LEGALLY INFIRMED TO DO THAT.  I'LL POINT THAT LAW
 
17  OUT AT THE END OF MY DISCUSSION.
 
18            SO THERE’s NO MISINFORMATION HERE, HE INFORMED
 
19  THEM NOTHING.  IT HELPS US OUT.
 
20            ANYWAY, THERE’s MUCH TO DO ABOUT THIS PERIOD OF
 
21  TIME.  IF THE RIGHTS COME FROM THE LEGION, WHAT DID HAPPEN
 
22  WITH WILLIS IN 1991?  HE INFORMED THE DIRECTORS.  WHAT IS
 
23  GOING ON IN FACT, AS LAVONNE TESTIFIED, AND IF YOU TAKE A
 
24  LOOK AT THE DEPOSITION, AND I THINK THEY'RE IN PAGES 89
 
25  THROUGH 90, GUESS WHAT SHE TESTIFIES TO?  REMEMBER, THERE'S
 
26  MUCH TO DO ABOUT THE INTERNATIONAL LEGION FOR THE SURVIVAL
 
27  OF FREEDOM, INC.  DO YOU KNOW WHAT SHE TESTIFIES WHEN WILLIS
 
28  TOLD HER THERE WOULD BE A DISTRIBUTION OF MONEY IN JANUARY,
			
			

page 940
 
 
 
 1  FEBRUARY AND MARCH OF 1991?  SHE SUGGESTED — IN FACT,
 
 2  SUGGESTED TO WILLIS THE NAME TO CALL THE CORPORATION.  THE
 
 3  DIRECTORS OF THE LEGION, INTERNATIONAL LEGION FOR THE
 
 4  SURVIVAL OF FREEDOM.  IT WASN'T SOMETHING WILLIS DID. SHE
 
 5  PICKED THE NAME, LAVONNE FURR, AND SHE AGREED TO IT.
 
 6            I SUBMIT, YOUR HONOR, IT PROBABLY WAS DONE FOR A
 
 7  NUMBER OF REASONS.  ONE, YOU HEARD THE MERMELSTEIN CASE.
 
 8  YOU HEARD EVEN MR. MARCELLUS AND SITTING BACK THERE HE WAS
 
 9  CONCERNED ABOUT THE ASSETS.  HE WASN'T AN OFFICER AT THIS
 
10  TIME.  HE WAS NOTHING OTHER THAN AN EMPLOYEE.  THAT’s WHAT
 
11  HE WAS, AN EMPLOYEE.  HE ADMITS IT HIMSELF.
 
12       THE COURT:  I DON'T THINK MOST EMPLOYEES THINK THEY'RE
 
13  NOTHING.
 
14       MR. WAIER:  I DON'T MEAN NOTHING, BUT IN THE HIERARCHY
 
15  AS DECISIONMAKING.  I DON'T MEAN TO DEMEAN MR. MARCELLUS
 
16  WHEN I SAY THAT, BUT HE EVEN ADMITS THEY WERE TRYING TO
 
17  LIQUIDATE THE ASSETS, THE ASSETS OF THE LEGION, AND PUT HIM
 
18  IN OTHER SOURCES SUCH AS F.D.F.A.
 
19            THERE’s A THING CALLED THE UNCLEAN HANDS DOCTRINE
 
20  TOO THAT THE COURT OUGHT TO BE AWARE OF.  IF THEY'RE GOING
 
21  TO SIT HERE AND THEN TURN AROUND AND SAY HE PUT MONEY IN
 
22  ORGANIZATIONS, WHEN IT’s DONE, AND TURN AROUND AND SAY, HEY,
 
23  TOO BAD.  WE'RE COMING AFTER YOU NOW WHEN IT SUITS US.
 
24  WE'LL COME AFTER YOU WHEN IT SUITS ME.  FORGET IT.
 
25            SO HERE WE ARE IN 1991.  HE — LAVONNE FURR IN THE
 
26  OWN TESTIMONY, UNREFUTED, TESTIFIED SHE SET IT UP TO A
 
27  SEPARATE ORGANIZATION, AND THEY DID IT.  HE FOLLOWED HER
 
28  INSTRUCTIONS.  THEY SET UP A SEPARATE DEAL, SEPARATE BANK
			
			

page 941
 
 
 
 1  ACCOUNT OVERSEAS.  AND I'M NOT GOING TO GO INTO ALL THE
 
 2  LABORS, MR. CARTO AND FISCHER.  EVERYBODY ELSE DID NOTHING.
 
 3  MR. FISCHER DO ANYTHING WRONG?  NO CULPABILITY TO
 
 4  MR. FISCHER.  BUT WHAT HAPPENED, THEY SET UP EXACTLY WHAT
 
 5  THE FURRS WANTED THEM TO DO AND WHAT THE CORPORATION WANTED
 
 6  THEM TO DO.  SO FAR NOTHING IS WRONG.  AND WHEN THEY
 
 7  TRANSFERRED THAT MONEY FROM THE ACCOUNT IN LONDON AND
 
 8  SWITZERLAND TO THE NEW ACCOUNT UNDER VIBET, WHICH ALL
 
 9  TRANSPIRED BY THE EVIDENCE IN MARCH OF 1991, THE ALLEGED
 
10  CONVERSION HAS TAKEN PLACE.  UNLESS THEY'RE GOING TO ARGUE
 
11  THAT VIBET IS SOMEHOW A SUBSIDIARY OF THE LEGION, IF THAT'S
 
12  THE CASE, WE GOT THE WRONG PARTY HERE, AS I MENTIONED IN THE
 
13  MOTION FOR JUDGMENT.  VIBET IS A REAL PARTY IN INTEREST.
 
14            VIBET HASN'T SUED.  THEY SUED VIBET.  THEY DIDN'T
 
15  TRY TO GET VIBET TO SUE, ASSUMING THEY OWN STOCK IN IT.
 
16  THERE’s NO EVIDENCE THAT THE LEGION OWNED STOCK IN VIBET.
 
17  THE WRONG PARTY IS SUED.  THEY SHOULD BE KNOCKED OUT OF
 
18  COURT ON THAT BASIS.
 
19            GO TO 1991.  THE ASSETS GO IN AND TAXES ARE PAID.
 
20  ESTATE FEES ARE PAID.  AND LOW AND BEHOLD, WE'RE IN A 3.2 TO
 
21  3.5 MILLION DOLLARS.  AND WHAT IS — WHAT DOES WILLIS DO?
 
22  HE DOES EXACTLY WHAT LAVONNE FURR AUTHORIZED HIM TO DO.  HE
 
23  USES THE VEHICLE OF LIBERTY LOBBY BUT PUTS IT INTO SUN
 
24  RADIO.  REMEMBER, THIS IS CONSISTENT WITH THE BYLAWS OF THE
 
25  LEGION.  IT’s CONSISTENT WITH THE CHARTER OF THE LEGION, AND
 
26  IT WENT FOR A PURPOSE.  IT DID NOT GO IN THIS MAN’s POCKET.
 
27  THERE IS NO EVIDENCE IT WENT INTO THIS MAN’s POCKET.  IT
 
28  WENT, AS MR. WEBER SAID, TO FURTHER THE GOALS — THE
			
			

page 942
 
 
 
 1  GOALS — THE GOALS OF THE LEGION.  HE DID IT.  HE DID
 
 2  EVERYTHING THAT EVERYBODY WANTED HIM TO DO, AND HE UTILIZED
 
 3  IT TO PROMOTE THOSE ISSUES HELD DEAR BY JEAN FARREL-EDISON
 
 4  AND BY THE LEGION, AS WELL AS BY LIBERTY LOBBY, AS WELL AS
 
 5  BY THE FOUNDATION TO DEFEND THE FIRST AMENDMENT.  HE DID
 
 6  IT.
 
 7            IT’s IMPORTANT, YOUR HONOR, BECAUSE THIS
 
 8  INFORMATION WAS KNOWN.  AND REMEMBER, THE STATUTE OF
 
 9  LIMITATIONS PURPOSE WAS KNOWN AS EARLY AS MARCH OF 1991.
 
10  THAT THE MONIES ARE GONE.  THE MONIES HAD GONE INTO ANOTHER
 
11  ACCOUNT AUTHORIZED BY THE FURRS.  IT WAS DONE.  THEY ADMIT
 
12  IN THE DEPOSITION THEY KNEW ALL.
 
13            IN FACT, IT’s INTERESTING.  MR. FURR IN HIS
 
14  DEPOSITION, AND I INVITE THE COURT TO READ THAT, HE’s THE
 
15  ONE WHO CONTACTED IN EARLY 1991 THE ATTORNEYS OVERSEAS.
 
16  REMEMBER, KNOWLEDGE OF THE ATTORNEYS IS IMPUTED TO THE
 
17  CORPORATION.
 
18            AND, YOUR HONOR, LOOK AT THE LETTERS.  THE LETTERS
 
19  TALK ABOUT A DISTRIBUTION ALL THE WAY DOWN THE LINE OF WHAT
 
20  TOOK PLACE.  THERE ARE LETTERS CONCERNING THIS.  AND I
 
21  BELIEVE — IN FACT, I HAVE IT WRITTEN DOWN.  IF YOU TAKE A
 
22  LOOK AT EXHIBITS, I BELIEVE THEY ARE FROM 38, 39, 40, 41, 40
 
23  ALL THE WAY UP TO THE MARCH 5, 1991 MINUTES, AND THEN
 
24  THEREAFTER EXHIBIT 44, YOU WILL SEE THAT ALL OF THIS
 
25  INFORMATION IS PROVIDED.  THEY'RE IN THE HANDS OF THE
 
26  LEGION’s ATTORNEYS.  ALL OF THE INFORMATION — IN FACT,
 
27  MARCH 8, 1991 IT TALKS ABOUT THE DISTRIBUTION IN DETAIL.  IT
 
28  TALKS ABOUT THE MONEYS.  THERE’s ANOTHER LETTER, JUNE 5,
			
			

page 943
 
 
 
 1  1991.  IT AGAIN DISCUSSES FROM THE ATTORNEY BIDDLE AND
 
 2  COMPANY.  YOU CAN GO ON AND ON AND ON.
 
 3            THERE WAS NO CONCEALMENT.  THERE WAS NO ADMISSION
 
 4  TO STATE — THE EVIDENCE IS TO THE CONTRARY BEFORE YOU.  THE
 
 5  ATTORNEYS HAD ALL THE INFORMATION.  THE CORPORATION HAD
 
 6  CONSTRUCTIVE NOTICE OF EVERYTHING, AND IT DID RECEIVE IT.
 
 7            REMEMBER, IT’s THE MEANS OF KNOWLEDGE.  AND YOU
 
 8  CERTAINLY CAN'T SAY YOU DON'T HAVE THE MEANS OF KNOWLEDGE
 
 9  WHEN YOUR OWN ATTORNEYS WHO LEWIS FURR KNEW WHO THEY WERE --
 
10  HE WROTE TO THEM.  IT’s IN THE DEPOSITION, IN FACT, A LETTER
 
11  IN THE DEPOSITION MARKED AS AN EXHIBIT WHEN HE WROTE TO THEM
 
12  IN 1991.  STATUTE OF LIMITATIONS HAS LONG RUN ON CONVERSION,
 
13  WHICH IS 3 YEARS; FRAUD, WHICH IS 3 YEARS.
 
14            SO WHAT RIGHTS DO THEY HAVE?  THE ONLY RIGHTS COME
 
15  FROM THE AGREEMENTS THEMSELVES.  I INVITE THE COURT TO READ
 
16  THE AGREEMENTS.  ALL THE PARTIES WERE RELEASED.  YOU READ
 
17  THE AGREEMENTS THAT THE ATTORNEY TO DISTRIBUTE THE ESTATE ON
 
18  BEHALF OF THE LEGION WENT TO ROLAND ROCHAT.  WHERE IS HE?
 
19  WHY DIDN'T MR. BEUGELMANS INCLUDE HIM IN THE COMPLAINT?
 
20  WHY?  THEY HAD TO UNDER 5142.  WHY DIDN'T THEY INCLUDE HIM?
 
21            TAKE A LOOK AT WHAT THE LEGION DIRECTED.  THAT IS
 
22  A DIRECTION FROM THE LEGION.  BOTH IN THE MANDATE AGREEMENT,
 
23  THE DISTRIBUTION AGREEMENT, AND SETTLEMENT AGREEMENT ROLAND
 
24  ROCHAT WAS SOLELY RESPONSIBLE TO WORK ON BEHALF OF THE
 
25  LEGION TO DISTRIBUTE THE ASSETS.  HE KNOWS HE DISTRIBUTED
 
26  THEM TO VIBET CORPORATION.  WAS THAT WRONG?  THEY DON'T
 
27  CONTEND THAT’s WRONG.  HAVE YOU HEARD ANY EVIDENCE THAT
 
28  ROLAND ROCHAT DIDN'T DO AS THE LEGION TOLD HIM TO DO?  NO.
			
			

page 944
 
 
 
 1  HE HAD ABSOLUTE AUTHORITY TO NOT ONLY TO DISTRIBUTE THEM,
 
 2  BUT TO DISPOSE OF THOSE ASSETS.
 
 3            I INVITE THE COURT TO READ THE AGREEMENTS
 
 4  CAREFULLY.  THAT’s WHAT THEY LIVE AND DIE ON.  THAT’s WHAT
 
 5  THEY'RE GOING TO DIE ON.
 
 6            NOW SO WHAT DO WE HAVE?  1991 EVERYTHING IS DONE.
 
 7  LOW AND BEHOLD EVERYBODY IS HAPPY.  THE LEGION IS HAPPY.
 
 8  THEY'RE GETTING RADIO TIME.  THEY GOT A RADIO STATION OUT
 
 9  THERE PROMOTING THE GUARANTEES OF FREEDOM AND EXPRESSIONS
 
10  AND CONSTITUTIONAL RIGHTS AND ALL THE THINGS THAT JEAN
 
11  FARREL-EDISON WANTED.
 
12            SUN RADIO.  THEY GOT SUN RADIO, WHO IS
 
13  INTERVIEWING MR. WEBER.  MR. WEBER.  INTERVIEW HIM, GETTING
 
14  THE STORY OF THE LEGION OUT.  DOING EVERYTHING.  GETTING
 
15  GREAT TIME.  LAVONNE FURR’s DAD CAN LISTEN, CAN HEAR IT.  HE
 
16  CAN'T SEE OR READ, BUT HE CAN LISTEN NOW.  PROMOTING THE
 
17  IDEALS AND GOALS OF THE LEGION.
 
18            HAS WILLIS CARTO DONE ANYTHING YET?  HAS HE NOT
 
19  GONE AND DONE WHAT HE AGREED TO DO?  HAS HE NOT CARRIED HIS
 
20  END OF THE 1985 BARGAIN?  HAS HE NOT PUT UP ALL THE MONEY?
 
21  HAD HE NOT GONE OVERSEAS?  HAD HE NOT HIRED THE ATTORNEYS?
 
22  HAD HE NOT FULFILLED HIS END OF THE BARGAIN?  HE DID.
 
23            AND DID THE LEGION FULFILL THEIR END OF THE
 
24  BARGAIN FROM THE 1985 AGREEMENT?  THEY DID UP UNTIL THERE
 
25  WAS A NEW BOARD OF DIRECTORS.  HAD UP UNTIL BECAUSE OF
 
26  EDITORIAL PROBLEMS BETWEEN MR. CARTO AND MR. WEBER.  AND
 
27  UNTIL THEY DECIDED THAT THEY DIDN'T LIKE MR. Carto’s
 
28  THOUGHTS OF HOW THE INSTITUTE OF HISTORICAL REVIEW SHOULD BE
			
			

page 945
 
 
 
 1  RUN, UP UNTIL THAT TIME, THEY DON'T DISPUTE ANYTHING.  THEY
 
 2  LIVED UP TO THEIR END OF THE BARGAIN.  AFTER ALL, THIS
 
 3  CONSIDERATION IS PAID FOR — THAT BARGAIN BY MR. CARTO,
 
 4  LIBERTY LOBBY AND EVERYBODY ELSE, HIS LOAN TO THEM.
 
 5            THEY LIVE UP TO THE END OF THE BARGAIN UNTIL 1993,
 
 6  AND THEN LOW AND BEHOLD, IF YOU TAKE A LOOK — I WOULD LIKE,
 
 7  YOUR HONOR, TO TAKE A LOOK.  DO YOU KNOW WHEN THE FARREL
 
 8  ESTATE COME UP?  EVEN THEY KNEW SOMETIME IN 1993 MARCH OR
 
 9  APRIL OF 1993, AS THE TESTIMONY GOES.  THEY RAN THE
 
10  INVESTIGATION OF MR. CARTO, THE STAFF DID, THE EMPLOYEES.
 
11  THEY STATED THAT AT THAT POINT IN TIME THEY SAW A WIRE
 
12  TRANSFER OF 100,000.  MR. MARCELLUS SAID HE SAW IT WAY BACK
 
13  IN 1991, A HUNDRED THOUSAND GOING TO SOME OTHER BANK OTHER
 
14  THAN THE LEGION ACCOUNT.
 
15            MR. MARCELLUS DURING 1991, 1992 WAS RECEIVING
 
16  MONIES INTO HIS OWN POCKET FROM BANQUE CONTRADE, NOT A
 
17  LEGION ACCOUNT.  HE KNEW JANUARY 1991 HE WAS GETTING MONEY
 
18  IN THE POCKET.  THEY WENT TO ONE OF HIS FAVORITE CAUSES,
 
19  SCIENTOLOGY.  BACK IN 1991, 1992, IT WAS OKAY THEN FOR
 
20  MR. MARCELLUS, BUT THEN THEY TAKE OVER BECAUSE THEY SAY,
 
21  HEY, WAIT A SECOND.  YOU KNOW WHAT.  REMEMBER THAT FARREL
 
22  ESTATE?  MR. HULSY TALKS ABOUT IT AND MR. HULSY’s IDEA — BY
 
23  THE WAY, THE ATTORNEY FOR THE LEGION TELLING THEM GET
 
24  EVERYTHING OUT OF THE CORPORATION DURING THE MERMELSTEIN
 
25  CASE, THE LETTER TO MR. MARCELLUS.  GET EVERYTHING OUT OF
 
26  THE CORPORATION.  YOU DON'T WANT IT IN THE CORPORATION.  WE
 
27  COULD GET HIT WITH A JUDGMENT.  THIS IS ONE WAY THEY
 
28  FOLLOWED THAT ADVICE.  NOW THEY'RE GOING TO FOLLOW HIS
			
			

page 946
 
 
 
 1  ADVICE NOW.  HEY, WE CAN GET A WINDFALL HERE.  REMEMBER THE
 
 2  CORPORATE FORMALITIES WE HAVEN'T BEEN DOING IN THE PAST?
 
 3  USE THAT AGAINST WILLIS CARTO.  WE'RE GOING TO GET HIM.
 
 4  WE'RE NOT ONLY GOING TO KICK HIM OUT OF THE FIRM, WE'LL PUT
 
 5  THE SQUEEZE TO HIM, GET HIS CORPORATION.  WE'LL GET
 
 6  EVERYTHING WE CAN.  WE'RE GOING TO DO THIS VENDETTA, RIGHT?
 
 7  WHY?  BECAUSE WILLIS CARTO SPENT ALL THAT MONEY.  NOT ONLY
 
 8  DID HE FURTHER THE GOALS OF THE LEGION, HE PUT $750,000,
 
 9  UNREFUTED, INTO THE COFFERS, INTO THE LEGION COFFERS.  BY
 
10  THE WAY, A GENTLEMAN THAT MR. WEBER CALLED AS LATE AS
 
11  1993 — EARLY, A LOYAL AND TRUE MEMBER AND FOUNDER OF THE
 
12  LEGION, JANUARY AND FEBRUARY 1993 AT THE INTERNATIONAL
 
13  CONFERENCE.
 
14            GOING TO THE RESOLUTION — BY THE WAY, YOUR HONOR,
 
15  SO THE RESOLUTIONS ARE CLEAR AS OPPOSED TO WHO MAY HAVE
 
16  ATTENDED THE MEETING, YOU WERE GUIDED BY, WHICH THIS LAW IS
 
17  VERY CLEAR TOO WITH RESPECT TO NOT PUTTING THE MONEY INTO
 
18  THE CORPORATION.  PAT FOETISCH — BY THE WAY, LAVONNE FURR,
 
19  IN THE DEPOSITION, AND PLEASE READ IT OVER, STATES
 
20  CATEGORICALLY SHE KNEW PAT FOETISCH WAS SETTING UP.  SHE
 
21  DIRECTED PAT FOETISCH TO DO THIS.  AND SHE WENT ON.
 
22            BY THE WAY, MR. BEUGELMANS — I DIDN'T FINISH MY
 
23  THOUGHT ON THAT.  HE SAID THAT LAVONNE FURR SAID ONLY A
 
24  MILLION DOLLARS.  IN FURTHER QUESTIONING — I INVITE THE
 
25  COURT TO READ IT:  “NO, THE MILLION DOLLARS WAS A CASH
 
26  SITUATION.”  SHE DID NOT KNOW WHAT IT WAS WHEN WILLIS SAID
 
27  “A LITTLE BIT LESS THAN A MILLION DOLLARS.”  SHE DID NOT
 
28  PLACE THAT VALUE ON THE GEMS.  SHE DID NOT PLACE THE VALUE
			
			

page 947
 
 
 
 1  OF THE NECA CERTIFICATES, WHICH HAD NOT BEEN SOLD AT THAT
 
 2  TIME.  READ IT.  IT WAS EXPLAINED AND EXPLAINED IN GREAT
 
 3  DETAIL, NOT AT THE BEHEST OF COUNSEL, BUT HER OWN BEHEST.
 
 4            THAT’s WHAT I'M TALKING ABOUT, THE MISLEADING OF
 
 5  THE COURT.  READ THE ENTIRE DEPOSITION.  YOU'LL SEE SHE WAS
 
 6  KEPT ABREAST OF EVERYTHING.  THIS IS MORE IMPORTANT.
 
 7            WE ALL IN THE LEGAL PROFESSION KNOW WHAT THE TERM
 
 8  PRIMA FACIE IS ALL ABOUT.  PRIMA FACIE SAYS WHAT IT IS.
 
 9  IT’s NOT REBUTTABLE, NOT A REBUTTAL PRESUMPTION.  IT’s PRIMA
 
10  FACIE EVIDENCE, ADOPTION OF BYLAWS AND/OR RESOLUTIONS.  THE
 
11  MARCH 5, 1991 RESOLUTIONS LAVONNE FURR TESTIFIED TO THEM.
 
12  SHE SIGNED THEM.  SHE AGREED.  SHE DISCUSSED THEM WITH
 
13  EVERYBODY.  THEY WERE AGREED.  THOSE ARE THE ONES YOU HAVE
 
14  BEFORE YOU, A COPY OF THOSE MINUTES.
 
15            IT SAYS: “THE ORIGINAL OR A COPY OF THE BYLAWS OR
 
16  OF THE MINUTES OF ANY INCORPORATORS, MEMBERS, DIRECTORS,
 
17  COMMITTEE OR OTHER MEANS."
 
18            IT DOESN'T HAVE TO BE JUST A DIRECTOR’s MEETING.
 
19  IT CAN BE A MEETING WITH SOME DIRECTOR CHARGED WITH THE
 
20  RESPONSIBILITY AND AUTHORITY OR RECOGNIZED.
 
21            AND THE LAW IS CLEAR TOO.  THAT EVEN UNDER
 
22  NONPROFIT — IF A CONTRACT IS STILL VALID, IT DOESN'T HAVE
 
23  TO BE BY A DIRECTOR’s MEETING AS LONG AS THE PERSON WHO IS
 
24  AUTHORIZED IN THAT CONTRACT HAS OSTENSIBLE OR APPARENT
 
25  AUTHORITY.  AND EVERYBODY AGREES LAVONNE FURR HAS OSTENSIBLE
 
26  AND APPARENT AUTHORITY.  THAT’s IN THE NONPROFIT CORPORATION
 
27  CODE.
 
28            THAT CONTRACT WAS VALID.  THE RESOLUTIONS ARE
			
			

page 948
 
 
 
 1  VALID OF ANY RESOLUTION OR MEMBERS CERTIFIED TO BE A TRUE
 
 2  COPY.  HE HAD THAT BEFORE YOU, THE MARCH 5, 1991 MINUTES.
 
 3  YOU ARE LEFT WITH THAT IN YOUR LAP, YOUR HONOR.
 
 4            AND WHAT DOES THAT SAY?  DON'T PUT THE MONEY IN
 
 5  THE CORPORATION.  PUT IT TO A SUITABLE PURPOSE, INCLUDING
 
 6  RADIO.  IT’s VERY IMPORTANT BECAUSE IT TRACKS EXACTLY WHAT
 
 7  MR. WEBER SAID SHOULD BE DONE — SHOULD HAVE BEEN DONE WITH
 
 8  THE MONEY.
 
 9            IT SAYS:  “RESOLVED” — THIS IS EXHIBIT 41 --
 
10  “THAT THE FUNDS FROM THE ESTATE OF MISS JEAN FARREL NOT BE
 
11  ACCEPTED INTO THE CORPORATION BUT INSTEAD DIRECTED TO A
 
12  SUITABLE INDEPENDENT ORGANIZATION FOR THE PURPOSE OF
 
13  OPERATING A GENERAL NONPROFIT ADVERTISING, PUBLISHING AND
 
14  PUBLIC RELATIONS BUSINESS THROUGH THE MEDIA OF BOOKS,
 
15  PAMPHLETS, MAGAZINES, RADIO."
 
16            DOESN'T THIS HAUNTINGLY SOUND LIKE THE CHARTER OF
 
17  THE LEGION?  IT SURE DOES.  ISN'T THAT WHAT WAS DONE WITH
 
18  THE MONEY?  IT SURE HAPPENED.
 
19            “TELEVISION, NEWSLETTERS, NEWSPAPERS, AUDIO AND
 
20  VIDEO CASSETTES AND ANY OTHER MEDIUM TO AID AND ASSIST IN
 
21  THE PROMOTION AND PRESERVATION OF INDIVIDUAL LIBERTY AND
 
22  FREEDOM OF SPEECH IN THE AREAS OF GOVERNMENT, RELIGION,
 
23  SCIENCE, HISTORY, THE ARTS, MEDICINE, PHILOSOPHY, THE PRESS
 
24  AND WRITTEN AND SPOKEN WORD TO EDUCATE THE PEOPLE OF ALL
 
25  COUNTRIES, INCLUDING THE UNITED STATES, IN THE CREATIVE
 
26  PRINCIPLE OF LIBERTY UNDER THE LAW."
 
27            WHAT BETTER WAY, YOUR HONOR, I SUBMIT, TO GET THAT
 
28  ACROSS TO THE PUBLIC AT THE MOST EFFICIENT WAY THAN BY
			
			

page 949
 
 
 
 1  RADIO.  RADIO IS A MEDIUM OF CHOICE, AND THAT’s WHAT
 
 2  HAPPENED HERE.  THERE’s NO EVIDENCE TO THE CONTRARY.  AND
 
 3  THAT YOUR HONOR, IS PRIMA FACIE EVIDENCE.
 
 4            AND LAVONNE FURR TESTIFIED TO IT; THAT THAT WAS
 
 5  WHAT THE CORPORATION WANTED ON MARCH 5, 1991.  THAT IS WHAT
 
 6  WILLIS DID.  DIDN'T HIDE ANYTHING.  THE CORPORATION KNEW.
 
 7  THAT’s THE WHOLE BASIS.  DID WILLIS HIDE SOMETHING?  NO.
 
 8  WAS WILLIS, LIKE MR. LANE SAID, WAS HE RESPONSIBLE TO TELL
 
 9  THE LEGION STAFF ANYTHING ABOUT IT?  NO.  THEY'RE NOT MAKING
 
10  THE DECISIONS FOR THE CORPORATION.  HIS RESPONSIBILITY AND
 
11  RESPONSIBILITY ONLY IS TO THE CORPORATION, ITS MEMBERS AND
 
12  DIRECTORS.  THAT’s HIS RESPONSIBILITY.  THAT’s WHERE THE
 
13  FIDUCIARY DUTY LIES.  HIS FIDUCIARY DUTY DOES NOT LIE TO
 
14  MR. MARCELLUS OR WEBER WHO WERE EMPLOYEES.  HE HAS NO
 
15  FIDUCIARY DUTY TO THEM, AND THAT’s WHERE THEY ARE TRYING TO
 
16  CONFUSE.  HE FULFILLED HIS FIDUCIARY DUTIES BY UNREFUTED
 
17  EVIDENCE BY COMMUNICATING WITH THE DIRECTORS FOLLOWING THE
 
18  DIRECTIVES OF THE DIRECTORS.
 
19            NOW THE DIRECTORS TODAY IN HINDSIGHT
 
20  QUARTERBACKING SAY I WOULD HAVE DONE IT DIFFERENTLY.  YOU
 
21  CAN'T LOOK AT THAT, YOUR HONOR.  YOU CAN'T LOOK AT IT.
 
22            THAT’s WHERE WE'RE AT, PRIMA FACIE EVIDENCE.  AND
 
23  REMEMBER I TOLD YOU ABOUT THE CORPORATION CODE 5214:
 
24  “INSTRUMENTS; LACK OF AUTHORITY IN SIGNING OFFICERS;
 
25  EFFECT.  SUBJECT TO THE PROVISIONS OF SUBDIVISION (A), OF
 
26  SECTION 5141 AND 5142, ANY NOTE, MORTGAGE, EVIDENCE OF
 
27  INDEBTEDNESS, CONTRACT, CONVEYANCE OR OTHER INSTRUMENT IN
 
28  WRITING, AND ANY ASSIGNMENT OR ENDORSEMENT THEREOF, ANY
			
			

page 950
 
 
 
 1  ASSIGNMENT EXECUTED OR ENTERED INTO BETWEEN ANY CORPORATION
 
 2  AND ANY OTHER PERSON” — I THINK WILLIS WOULD QUALIFY FOR
 
 3  THAT — “WHEN SIGNED BY THE CHAIRMAN OF THE BOARD, THE
 
 4  PRESIDENT, OR ANY VICE-PRESIDENT, AND THE SECRETARY, ANY
 
 5  ASSISTANT SECRETARY, THE CHIEF FINANCIAL OFFICER, IS NOT
 
 6  INVALIDATED AS TO THE CORPORATION BY ANY LACK OF AUTHORITY
 
 7  OF THE SIGNING OFFICERS IN THE ABSENCE OF ACTUAL KNOWLEDGE
 
 8  ON THE PART OF THE OTHER PERSON THAT THE SIGNING OFFICERS
 
 9  HAD NO AUTHORITY TO EXECUTE THE SAME."
 
10            WE DON'T HAVE THAT HERE.  EVERYBODY BELIEVED THE
 
11  FURRS, AND YOU HEARD NO TESTIMONY TO THIS EFFECT.  THE FURRS
 
12  HAD ABSOLUTE AUTHORITY TO MAKE THE DECISIONS THAT THEY MADE,
 
13  AND THEY MADE CORRECT DECISIONS TOO.  THEY WERE ALL CORRECT,
 
14  AND THEY BENEFITTED.
 
15            THE LEGION DID GET SOMETHING OUT OF IT.  THEY GOT
 
16  THE ENTIRE BOOTY.  THEY GOT IT THROUGH MONEY IN THE COFFERS
 
17  AND THROUGH PROMOTION OF THE GOALS THAT WEBER ESPOUSED
 
18  SHOULD HAVE BEEN DONE.  THAT’s WHAT THEY GOT.  IT’s IN
 
19  HINDSIGHT NOW, 1993, WHEN THEY SAY WE WOULD LIKE TO HAVE THE
 
20  MONEY NOW.  WELL, MR. WEBER AND MR. MARCELLUS WEREN'T AROUND
 
21  TO OPEN UP THEIR POCKETBOOKS TO GO AFTER IT.  IT’s EASY TO
 
22  SAY I CAN DO IT NOW, AND I CAN TELL YOU I COULD GET A LOAN
 
23  TODAY IF I KNEW — IF I KNEW WITH CERTAINTY THAT I COULD GET
 
24  7.5 MILLION; BUT YOUR HONOR, GO TO A BANK.  GO TO A BANK AND
 
25  SAY, HEY, BANK.  I KNOW I GOT THIS MONEY I KNOW SITTING
 
26  OVERSEAS.  NOT MONEY, THEY'RE STOCK CERTIFICATES.  STOCK
 
27  CERTIFICATES NOT IN MY NAME.  THE CORPORATION IS IN A DEAD
 
28  PERSON’s NAME.  THERE’s A WILL GRANTING ALL OF THAT TO
			
			

page 951
 
 
 
 1  SOMEBODY ELSE.  AND ALL I GOT IS THE WORD OF SOMEBODY.  I
 
 2  DON'T TRUST WILLIS CARTO.  I GOT TO RELY UPON THIS GUY.  I
 
 3  DON'T TRUST HIM.  I HAVE TO RELY.  HE'LL TESTIFY THAT THIS
 
 4  IS MINE, AND THAT’s ALL I GOT.  AND YOU KNOW FOR THAT I WANT
 
 5  YOU TO PAY ME A MILLION DOLLARS, AND I WILL PAY YOU BACK.  I
 
 6  CAN'T TELL YOU WHEN, 5 YEARS, 7 YEARS, 10 YEARS, I'LL PAY
 
 7  YOU BACK.
 
 8            YOUR HONOR, ARE YOU GOING TO LOAN SOMEBODY MONEY
 
 9  ON THAT?  I DON'T THINK SO.  I'M CERTAINLY NOT.
 
10            I DIDN'T MAKE A BET ON THE HOLYFIELD FIGHT.  I
 
11  WISH I WOULD HAVE.
 
12       THE COURT:  YOU KNOW YOU DON'T HAVE ANYTHING IN THE
 
13  POCKETS.
 
14       MR. WAIER:  YOU GOT IT.  I DON'T HAVE ANYTHING IN THE
 
15  POCKETS.  IF I DID, MY WIFE WOULD HAVE IT BEFORE I DID.
 
16            IN ANY EVENT, THAT’s IMPORTANT.  AND YOU KNOW,
 
17  YOUR HONOR, THERE’s ONE VERY IMPORTANT PIECE OF CORPORATE
 
18  LAW THAT GOES TO THIS TO WHY THE LEGION WAS NOT ONLY — YOU
 
19  HEARD UNREFUTED EVIDENCE THEY FINANCIALLY COULD NOT DO IT.
 
20  THEY HAD AN ARSON THE YEAR BEFORE.  THEY WERE HAVING A
 
21  BUILDING FUND.  THEY WERE — THEY LOST ALL OF THEIR
 
22  INVENTORY OR THE BULK OF THE INVENTORY, AS MR. MARCELLUS
 
23  TESTIFIED.  ALL OF THEIR ASSETS WERE ENCUMBERED.  HE CAN SAY
 
24  IT’s FALSE NOW.  HE SIGNED THE DOCUMENTS.  HE AGREED TO IT.
 
25            BUT LET’s TAKE WHAT THE LAW IS.  I THINK IT'S
 
26  REALLY IMPORTANT THAT THE COURT REALLY HONE IN ON THE OTHER
 
27  PORTION OF THE NONPROFIT CORPORATION LAW.  TO ME IT'S
 
28  EXTREMELY IMPORTANT.
			
			

page 952
 
 
 
 1            IT’s 5240, BY THE WAY, CORPORATIONS CODE 5240.  IT
 
 2  STATES — AND IT WARNS DIRECTORS OF NONPROFIT CORPORATIONS.
 
 3  IT’s REALLY IMPORTANT.  THE VERY FIRST THING SAYS THEY ARE
 
 4  TO AVOID — AND THEY USE THE TERM “SPECULATION,” LOOKING
 
 5  INSTEAD TO THE PERMANENT DISPOSITION OF FUNDS, CONSIDERING
 
 6  THE PROBABLE OUTCOME, AS WELL AS THE PROBABLE SAFETY OF THE
 
 7  CONDITIONS OF THE LEGION — OF THE CORPORATION’s CAPITAL.
 
 8            FIRST OF ALL, WHAT CAPITAL DID THEY HAVE IN 1985?
 
 9  THEY DIDN'T HAVE IT.  WHAT DID THEY HAVE IN 1987?  THEY
 
10  DIDN'T.  WHAT WAS THE PROBABLE OUTCOME?  TENUOUS AT BEST.
 
11  TYSON A KNOCKOUT IN THE SECOND ROUND.
 
12            WHAT ABOUT THE PERMANENT DISPOSITION OF THE
 
13  FUNDS?  GOOD CHANCE THEY'RE THROWING THAT DOWN THE TOILET,
 
14  WHATEVER FUNDS THEY COULD RAISE, AND THEY HAD OTHER THINGS.
 
15  REMEMBER WHAT WAS TESTIFIED TO.  THERE WAS A VERY SERIOUS
 
16  PIECE OF LITIGATION GOING ON AT THIS TIME, THE MERMELSTEIN
 
17  CASE.  THE LEGION COULDN'T EVEN PAY ITS OWN ATTORNEYS IN THE
 
18  CASE DURING 1980'S.  THEY HAD NO CAPITAL.  THEY'RE BEING
 
19  SUED.  THEY CAN'T EVEN PAY THE ATTORNEYS.  HOW THEY GOING TO
 
20  GO OVERSEAS WHERE IT’s ILLEGAL TO HAVE A CONTINGENCY
 
21  ARRANGEMENT WHERE THEY GO OVERSEAS TO PAY ATTORNEYS, AND IT
 
22  WOULD HAVE BEEN AGAINST THE LAW FOR THE FURRS OR ANY
 
23  DIRECTOR TO AGREE TO SUCH A SPECULATIVE VENTURE.
 
24            AVOID SPECULATION.  JUST LIKE THEY COULDN'T INVEST
 
25  IN THE LOTTERY, THEY COULDN'T INVEST IN THIS LOTTERY
 
26  OVERSEAS.  THIS LOTTERY HAPPENED TO HIT.  I'M WAITING FOR MY
 
27  LOTTERY TO HIT, BUT THEY COULDN'T DO THAT, YOUR HONOR.  AND
 
28  THAT’s WHAT THAT IS, THE MANDATE OF SECTION 5241(1).  THEY
			
			

page 953
 
 
 
 1  COULDN'T DO THIS.
 
 2            AND THERE’s NO EVIDENCE BEFORE YOU THAT THIS
 
 3  WASN'T HIGHLY CONTROVERSIAL.  WHAT DID YOU HAVE GOING FOR
 
 4  YOU IN 1985?  THE WORD OF A MISTRUSTED LEGION PERSON.
 
 5  THERE’s NO EVIDENCE HE WAS EVEN AN AGENT IN 19 — BEFORE SHE
 
 6  DIED SHE BECAME THE POWER OF ATTORNEY FOR THE ESTATE AFTER
 
 7  SHE DIED.
 
 8            WE DON'T HAVE ANY ISSUES OF SELF-DEALING WITH THE
 
 9  FURRS.  THEY DIDN'T SELF-DEAL.  ALL THEY WOULD LIKE TO THINK
 
10  SO.  AND WHAT MR. LANE SAID, IF THIS ACTION FALLS AND PREYS
 
11  UPON THE ACTION OF THE FURRS, THAT IS TRUE.  THE FURRS USED
 
12  REASON AND PRUDENT JUDGMENT IN MAKING A DEAL, AND THEY SAID
 
13  WILLIS, LOOK, IF YOU ARE SO FORTUNATE TO GO OFF ON THE LARK
 
14  OF YOURS — AND I GOT TO ADMIT MY CLIENT IS SOMEONE
 
15  EXTRAVAGANT.  HE COMES UP WITH IDEAS.  I DON'T NECESSARILY
 
16  AGREE WITH THE POLITICAL VIEWS OR ANY OF THE THINGS, BUT I
 
17  HAVE TO TELL YOU HE DOES COME UP WITH THESE.  SO DOES THE
 
18  OTHER SIDE.  BUT IT HAPPENED TO HIT THIS TIME, AND WHEN IT
 
19  HITS, NO PROBLEM UNTIL WE GET A NEW BOARD WHO BECOMES GREEDY
 
20  AND SAYS, HEY, WE DON'T WANT WILLIS ANYMORE.  WE DON'T LIKE
 
21  ELISABETH.  WE DON'T LIKE THIS.  WE'LL CONTINUE THIS FIGHT.
 
22  NOT ONLY DO THEY OUST HIM — AND THE COURT SEEN COURT
 
23  RECORDS TO WHAT THE ANIMOSITY BETWEEN THE TWO.  LET’s HIT
 
24  HIM HARD.  LET’s GO BACK ON THE DEAL.  LET’s GO BACK ON THIS
 
25  DEAL.  LET’s GO GET THEM BECAUSE WITHOUT THIS DEAL THEY HAVE
 
26  NOTHING.
 
27            AND READ THE AGREEMENTS.  EVEN THE DISTRIBUTION
 
28  AGREEMENT SAYS ALL OF THE NECA CERTIFICATES BY RECITAL WERE
			
			

page 954
 
 
 
 1  JOAN ALTHAUS'S.  THAT’s WHAT IT SAYS.  READ THEM.  DOESN'T
 
 2  SAY THEY WERE THE LEGION'S.  THEY JUST SETTLED THE ESTATE,
 
 3  THE RECITALS OF THE LEGION.  SAID ALL OF THE CERTIFICATES
 
 4  WERE JOAN ALTHAUS'S.
 
 5            YOU WANT TO TALK ABOUT ADMISSION?  THERE’s ANOTHER
 
 6  ADMISSION.  ALL OF THE ASSETS WERE JOAN ALTHAUS'S.  HOWEVER,
 
 7  THEY'RE TO REACH THE DISPUTE AND TO QUOTE IT, WE'RE GOING
 
 8  TO — TO END THIS DISPUTE.  WE'LL SETTLE THIS THING.  AND IF
 
 9  YOU WANT TO HOLD BY THE DIRECT LANGUAGE, YOUR HONOR, I KNOW
 
10  YOU RAISED AN EYEBROW WHEN I FIRST RAISED THIS IN OPENING
 
11  STATEMENT — AND BY THE WAY, I MUST TELL YOU LAVONNE FURR
 
12  DIDN'T KNOW ANYTHING ABOUT IT.  THE NORTH CAROLINA
 
13  LITIGATION, THE DOCUMENTS BESPEAK FOR THAT.
 
14            HERE IS AN AFFIDAVIT OF LAVONNE FURR, WHICH IS IN
 
15  EVIDENCE.  THIS WAS SUBMITTED IN THE NORTH CAROLINA
 
16  LITIGATION WHERE COUNSEL GOT IT.  THIS IS IN THE BOOK.  THIS
 
17  IS 1987.  AND IF YOU TAKE A LOOK — IT’s ACTUALLY 24 JULY
 
18  1986 SHE KNEW ABOUT THIS.  THIS IS ALL PART OF THE
 
19  LITIGATION.  JULY 1986, A YEAR AFTER HER DEATH.  PART OF THE
 
20  LITIGATION, NORTH CAROLINA.  LAVONNE FURR KNEW ABOUT IT.
 
21  THE DIRECTORS KNEW ABOUT IT.  THIS BESPEAKS THE LACK OF
 
22  KNOWLEDGE TO THE CONSUMER.  SHE KNEW THE DOCUMENTS.  SHE
 
23  READ THE DOCUMENTS.  SHE HAD THE DOCUMENT.
 
24       THE COURT:  HOW MUCH LONGER DO YOU THINK YOU WILL BE?
 
25       MR. WAIER:  IF I COULD TAKE A FIVE MINUTE BREAK TO
 
26  CHECK MY NOTES, I WOULD BE DONE IN 15 MINUTES.
 
27       THE COURT:  WHEN YOU COME BACK, I WOULD BE INTERESTED
 
28  IN KNOWING A FEW THINGS.  NUMBER ONE, YOU TALKED ABOUT THIS
			
			

page 955
 
 
 
 1  IDEA OF TAX.  SOMEHOW THERE’s 3.2 MILLION NET.  WHERE IS
 
 2  THERE ANY EVIDENCE OF ANYONE — JUST A SECOND — ANYONE PAID
 
 3  ANY TAX?  I HAVEN'T HEARD IT.
 
 4            AND ANOTHER THING I WOULD BE INTERESTED IS THE
 
 5  COMMENTS OF MR. CARTO.  IF MR. CARTO THINKS THE MONEY IS
 
 6  HIS, THEN WHY DID HE SEEK AN AGENCY DESIGNATION FROM THE
 
 7  LEGION TO GO OUT AND GET IT?  WHY DID HE FILE A SUIT ON
 
 8  BEHALF OF THE LEGION?  WHY DID HE THEN GO TO THE LEGION AND
 
 9  GET THEM TO GIVE UP THIS MONEY?  THESE THINGS DON'T MAKE
 
10  SENSE.
 
11       MR. WAIER:  GIVE UP THE MONEY?  WHAT MONEY?  THEY
 
12  DIDN'T HAVE ANY MONEY.
 
13       THE COURT:  MARCH 5, 1991.
 
14       MR. WAIER:  HE DIDN'T GET THEM TO DO THAT.
 
15       THE COURT:  JUST A SECOND.  I'M ASKING THE QUESTIONS.
 
16  I WANT YOU TO PUT IT IN YOUR THINKING CAP.
 
17            LOOK AT THIS DOCUMENT 208.  IF YOU WANT, I'LL MAKE
 
18  A COPY, OR YOU CAN HAVE THIS.  THIS IS WHAT MR. CARTO CAME
 
19  BACK WITH ON THE LAST DAY OF TESTIMONY.  HE SAYS, WE HAVE
 
20  7.5 MILLION, AND THEN HE HAS VARIOUS DEDUCTIONS, AND YOU ADD
 
21  ALL THE DEDUCTIONS UP.  IT ALMOST BALANCES OUT, NOT QUITE,
 
22  BUT ALMOST BALANCES OUT. I DON'T SEE ANY, FOR EXAMPLE, TAX
 
23  IN THERE, AND I DON'T SEE HOW VIBET COULD GET 3.5 MILLION,
 
24  IF THE FIGURES ARE CORRECT.  THOSE ARE THINGS TO CONSIDER.
 
25            AND WHY DON'T I SEE YOU IN 10 MINUTES.
 
26
 
27                   (PROCEEDINGS RECESSED.)
 
28
			
			

page 956
 
 
 
 1       THE COURT:  BACK ON THE RECORD.
 
 2       MR. WAIER:  YOUR HONOR, BEFORE I ADDRESS THE TWO
 
 3  QUESTIONS, I WILL ADDRESS THOSE THREE QUESTIONS I BELIEVE
 
 4  THEY WERE.
 
 5            I WOULD INVITE THE COURT TO REVIEW CODE OF CIVIL
 
 6  PROCEDURE SECTION 425.15, WHICH AGAIN WOULD CAUSE THIS
 
 7  COMPLAINT TO BE DISMISSED BECAUSE IT SAYS:
 
 8            “NO CAUSE OF ACTION AGAINST A PERSON SERVING
 
 9  WITHOUT COMPENSATION AS A DIRECTOR OR OFFICER OF A NONPROFIT
 
10  CORPORATION DESCRIBED IN THIS SECTION, ON ACCOUNT OF ANY
 
11  NEGLIGENT ACT OR OMISSION BY THAT PERSON” — WE'RE TALKING
 
12  ABOUT THE FURRS AND ELISABETH CARTO, WHO IS A DIRECTOR BY
 
13  HER OWN TESTIMONY IN 1986 WHEN ALL OF THE ACTS — '85,'86 --
 
14  WHEN THE ACTS TOOK PLACE BY THAT PERSON “WITHIN THE SCOPE OF
 
15  THAT PERSON’s DUTIES AS A DIRECTOR ACTING IN THE CAPACITY OF
 
16  A BOARD MEMBER, OR AS AN OFFICER ACTING IN THE CAPACITY OF,
 
17  AND WITHIN THE SCOPE OF THE DUTIES OF, AN OFFICER, SHALL BE
 
18  INCLUDED IN A COMPLAINT OR OTHER PLEADING UNLESS THE COURT
 
19  ENTERS AN ORDER ALLOWING THE PLEADING THAT INCLUDES THAT
 
20  CLAIM TO BE FILED AFTER THE COURT DETERMINES THAT THE
 
21  PARTIES SEEKING TO FILE THE PLEADING HAS ESTABLISHED
 
22  EVIDENCE THAT SUBSTANTIATES THE CLAIM."
 
23            I CAN GO ON.  THAT NEVER OCCURRED HERE.  THEY
 
24  NEVER DID THE PRELIMINARY STEP, WHICH IS TO PETITION THE
 
25  COURT, BEFORE THEY CAN FILE SUCH A COMPLAINT ON A NONPROFIT
 
26  CORPORATION.  THIS IS CODE OF CIVIL PROCEDURE SECTION
 
27  425.15.
 
28            THEY'RE OUT OF THE BOX UNTIL THEY DO THAT.
			
			

page 957
 
 
 
 1  THEY'RE NOT EVEN ENTITLED TO FILE THE COMPLAINT.  THEY DID
 
 2  AND THE ACTION SHOULD BE DISMISSED ON THAT GROUND ALSO.
 
 3            GETTING BACK TO THE QUESTION, YOUR HONOR, YOU
 
 4  TALKED ABOUT EXHIBIT 208.  LET ME TALK ABOUT THAT FIRST.
 
 5  THE DOCUMENTS THEMSELVES, AND I REFERRED THE COURT TO THE
 
 6  VARIOUS EXHIBITS FROM THE ATTORNEYS, APPARENTLY FROM WHAT I
 
 7  HAVE BEEN ABLE TO DISCERN IN TRYING TO RECONCILE 208 WITH
 
 8  WHAT BIDDLE AND COMPANY AND QUILTER GOODSON DID IN
 
 9  EXHIBITS — I'LL TELL YOU WHAT THE EVIDENCE SAID TOO.
 
10            BY THE WAY, IF YOU RECALL, THIS IS THE INFORMATION
 
11  THAT WAS PROVIDED TO WILLIS CARTO FROM THE ATTORNEYS FOR THE
 
12  CORPORATION.  SPECIFICALLY ONE ON EXHIBIT 46 TALKS ABOUT A
 
13  BREAKDOWN, BUT THERE’s ACTUALLY IN ONE OF THE LETTERS — AND
 
14  I DID HAVE IT.  I MARKED IT RIGHT HERE — WHERE IT TALKED
 
15  ABOUT 7.5 MILLION, AND I BELIEVE THAT IS --
 
16       THE COURT:  THAT’s THE LETTER FROM MR. HOOPER.
 
17       MR. WAIER:  I BELIEVE THAT’s CORRECT.
 
18       THE COURT:  SECOND PAGE OF THAT LETTER.
 
19       MR. WAIER:  THAT’s CORRECT, WHERE HE IS ASKING FOR 25
 
20  THOUSAND POUNDS FROM, I BELIEVE, THE — FROM THE LEGION.  HE
 
21  IS SAYING, LOOK, I GOT YOU 7.5 MILLION, BUT IF YOU ARE
 
22  REFERRING TO THAT LETTER, IT TALKS ABOUT TAXES WHERE I HAVE
 
23  BEEN LEFT HAZY.
 
24            YOU HEARD EVIDENCE FROM WILLIS CARTO, AMONG
 
25  OTHERS, TAXES WERE PAID.  THE LETTERS TALK ABOUT TAXES PAID
 
26  ON THE ESTATE, AND ROLAND ROCHAT WAS RESPONSIBLE FOR THE
 
27  PAYMENT OF THOSE ESTATE TAXES.  I'M NOT SURE IF THAT WAS
 
28  OVER AND ABOVE THE 7.5 MILLION OR PART AND PARCEL OF THE 7.5
			
			

page 958
 
 
 
 1  MILLION, AND MAYBE — AND MR. AND MRS. Carto’s
 
 2  RECONCILIATION OF THAT ACCOUNT ON 208 OR, WRONG OR RIGHT, IF
 
 3  YOU RECALL THEY INDICATED IN THE TESTIMONY THAT THAT WAS
 
 4  DONE BY MEMORY FOR THE MOST PART.  THAT THEY DID THAT FROM
 
 5  WHAT THEY COULD RECALL.  THAT WAS THE TESTIMONY, YOUR
 
 6  HONOR.  IT DIDN'T COME FROM ANY ACCOUNTING — FROM AN
 
 7  ACCOUNTANT.  IT DIDN'T COME FROM ANY OF THAT.
 
 8            MY RECONCILIATION IS DIFFICULT FOR ME TO
 
 9  RECONCILE.  THEY DID THAT MORNING FROM THE MEMORY.  THAT WAS
 
10  THE TESTIMONY FROM WILLIS AND ELISABETH CARTO FROM WHAT I
 
11  CAN RECALL CAME IN BASED ON WHAT THEY WERE TOLD THROUGH
 
12  SOURCES, INCLUDING BLAYNE HUTZEL AND FROM THE ATTORNEYS
 
13  TRYING TO RECONCILE THIS.  I'M NOT SURE WHETHER THOSE
 
14  MONIES — IF YOU TAKE A LOOK ON 208, THERE’s 400,000 AND
 
15  300,000 TO JOAN ALTHAUS AND ESTATE.  THAT MAY BE PART OF THE
 
16  TAXES THAT WERE PAID.  I'M NOT SURE.
 
17       THE COURT:  YOU ARE TELLING ME, THOUGH, THAT 3 MILLION
 
18  IN TAXES HAVE BEEN PAID.  I DON'T HAVE ANY EVIDENCE OF IT.
 
19       MR. WAIER:  WELL, WHAT I'M — WHAT I'M INDICATING, YOU
 
20  KNOW, INHERITANCE HAD TO BE PAID.  THEY TESTIFIED TAXES WERE
 
21  PAID.  I DON'T KNOW IF IT WAS PAID IN THAT.
 
22       THE COURT:  I DON'T KNOW IN THIS CASE IF ANYONE EVER
 
23  PAID ANY TAX.
 
24       MR. WAIER:  WELL, IF YOU TAKE A LOOK AT THE
 
25  CORRESPONDENCE FROM THE ATTORNEYS — BY THE WAY, YOU KNOW
 
26  WHO HAD THAT INFORMATION?  ROLAND ROCHAT, NOT A NAMED A
 
27  PARTY IN THE ACTION.  IN ANY EVENT, ASSUMING THAT IS THE
 
28  CASE, I'M NOT SURE WHERE IT IS.  AGAIN, I DON'T THINK 208
			
			

page 959
 
 
 
 1  HELPS YOU THAT MUCH EXCEPT FOR GIVING A GOOD FAITH EFFORT ON
 
 2  THE PART OF THE CARTOS TO TRY TO PUT DOWN WHAT THEY CAN
 
 3  RECALL OR WHERE THEY BELIEVE THE MONEY WENT.  IF YOU TAKE A
 
 4  LOOK AT THAT 3.2 MILLION OR 2.6 MILLION, SOMEWHERE ALONG THE
 
 5  FIGURES WENT AS NOTES TO LIBERTY LOBBY WHO THEN DIRECTED
 
 6  THAT AS A VEHICLE DIRECTLY THROUGH THE SUN RADIO, CONSISTENT
 
 7  WITH WHAT LAVONNE FURR TESTIFIED TO.
 
 8            THE OTHER ISSUE — I DON'T KNOW IF THAT HELPED YOU
 
 9  OUT.  THAT’s WHAT THE EVIDENCE IS.  THAT’s THE STATE OF THE
 
10  EVIDENCE.
 
11            NOW WITH RESPECT TO WILLIS CARTO, AT NO TIME DID
 
12  YOU HEAR HIM EXCEPT ONE OCCASION SAY HE COULD HAVE KEPT THE
 
13  MONEY.  IN FACT, FACTS ARE FACTS.  HE PROBABLY COULD HAVE.
 
14  BUT HE NEVER CLAIMED THAT.  WHAT HE CLAIMED IS THAT — THIS
 
15  IS THE TESTIMONY.  YOU IN YOUR ASKING ME THIS QUESTION, YOU
 
16  STOPPED WITH WILLIS COULD KEEP THE MONEY.  NO, IT GOES ON.
 
17  THERE’s A QUALIFIER TO THAT, AND HE TESTIFIED TO THE
 
18  QUALIFIER.  IT’s TESTIFIED TO BY LAVONNE FURR, THE
 
19  DIRECTOR.
 
20            ASSUME FOR THE MOMENT — BY THE WAY, BEFORE I SAY
 
21  THIS — THAT LAVONNE FURR SAID, YOU CAN KEEP THE MONEY.  WHO
 
22  IS AT ALL LAVONNE FURR?  YOU RECALL HE FINANCED THE ENTIRE
 
23  OPERATION.  HE GETS TO KEEP THE LOTTERY PROCEEDS.  HE BOUGHT
 
24  THE TICKET.  OKAY.
 
25            WHETHER I TOLD HIM THE NUMBERS OR NOT HE BOUGHT
 
26  THE TICKET.  HE GETS TO KEEP IT, ALTHOUGH IT’s AN
 
27  INTERESTING CONCEPT.  MAYBE I GET TO KEEP THE MONIES IF I
 
28  GIVE THE NUMBERS, AND HE BUYS THE TICKET, BUT MORE
			
			

page 960
 
 
 
 1  IMPORTANTLY, WHAT IS THE QUALIFIER, YOUR HONOR?  THE
 
 2  QUALIFIER SAYS SPECIFICALLY HE DIDN'T OWN THE MONEY.  HE
 
 3  CONTROLLED THE MONEY.  FOR WHAT PURPOSE?  TO ADVANCE THE
 
 4  GOALS OF JEAN FARREL-EDISON, WHICH IS NOT CONTRARY TO THE
 
 5  GOALS OF THE LEGION.  AND THAT IS WHAT THEY DID.
 
 6            YOU HAVE NO TESTIMONY HE PUT ANY MONEY IN THE
 
 7  POCKET.  208 SHOWS TO THE CONTRARY.  IF 208 SHOWS ANYTHING,
 
 8  I MUST TELL YOU, YOUR HONOR, THE ONLY — THE ONLY EVIDENCE
 
 9  YOU HAVE FROM THE PROMISSORY NOTE — YOU HAVE NO PROMISSORY
 
10  NOTE IN EVIDENCE.  NONE.
 
11            I MUST TELL YOU THAT COUNSEL DID NOT SEEK TO GET
 
12  EXHIBIT 184 IN OR FERRET IT OUT LIKE YOU REQUESTED HIM TO
 
13  DO.  YOU DID NOT ADMIT EXHIBIT 184.  AND IN FACT, IT’s TOO
 
14  LATE NOW.  THERE ARE NO PROMISSORY NOTES BEFORE YOU, NO
 
15  AMOUNTS.  THAT ACCOUNTING IS GONE.  YOU CANNOT CONSIDER THAT
 
16  ACCOUNTING BECAUSE IT’s NOT IN EVIDENCE.  BUT WE'RE NOT
 
17  DISPUTING THE FACT THAT CERTAIN PROMISSORY NOTE — I WILL
 
18  TELL YOU THAT IT WAS TESTIFIED TO, BUT I WANTED TO INDICATE
 
19  TO YOU EXHIBIT 84 CANNOT BE RELIED ON BY THE COURT, ALTHOUGH
 
20  YOU CAN'T UNRING A BELL THAT’s BEEN RUNG.
 
21            HE DOESN'T DISPUTE THAT.  AND, YOUR HONOR, I THINK
 
22  THAT’s WHERE EVERYBODY IS MISSING THE BOAT.  THEY'RE LOOKING
 
23  AT THE MINUTIA.  THEY'RE FAILING TO SEE THE FOREST FROM THE
 
24  TREES.
 
25            THE REAL ISSUE IS SIMPLE.  DID HE HAVE A RIGHT TO
 
26  CONTROL THE FUNDS AND DISTRIBUTE THE FUNDS CONSISTENT WITH
 
27  WHAT THE LEGION WANTED?  AND YOU KNOW WHAT THE LEGION
 
28  WANTED?  LAVONNE FURR TOLD YOU.  AND CONSISTENT WITH THE
			
			

page 961
 
 
 
 1  IDEALS ESPOUSED BY JEAN FARREL-EDISON.  YOU KNOW THAT TOO.
 
 2  AND DID HE DO THAT?  UNREFUTEDLY HE DID DO IT, YOUR HONOR,
 
 3  AND THAT’s REALLY THE QUESTION BEFORE YOU.  AND REALLY THAT
 
 4  GOES INTO THE CAUSES OF ACTION.
 
 5            I THINK IT’s EXTREMELY IMPORTANT BECAUSE LET'S
 
 6  TAKE A LOOK AT CONVERSION.  THAT SEEMS TO BE THE BIG FLAG
 
 7  THAT THEY'RE WAVING.  AND, YOUR HONOR, I THINK IT'S
 
 8  EXTREMELY IMPORTANT THAT YOU REVIEW THIS.
 
 9            WHAT ARE THE ELEMENTS OF CONVERSION?  BEFORE ANY
 
10  PLAINTIFF CAN RECOVER FOR A CONVERSION, HE MUST PROVE BY A
 
11  PREPONDERANCE OF THE EVIDENCE THE FOLLOWING:  THAT THE
 
12  PLAINTIFF OWNED, POSSESSED OR HAD A RIGHT TO POSSESS THE
 
13  PROPERTY AT THE TIME OF THIS INTERFERENCE.
 
14            WHAT THE TIME LINE — WHEN IS THE RIGHTS?  THE
 
15  ONLY RIGHTS THEY WOULD HAVE HAD WOULD HAVE CAME FROM THE
 
16  AGREEMENT.  RIGHT.  I MEAN, THAT’s THE EVIDENCE.  IT
 
17  CERTAINLY DIDN'T HAPPEN.  THERE WERE NO RIGHTS HERE IN '85.
 
18  THE ONLY RIGHTS THAT WERE THERE WAS THE AGREEMENT WITH
 
19  MR. CARTO.
 
20            THE DEFENDANT INTERFERED WITH THE PROPERTY.  DID
 
21  HE INTERFERE WITH THE PROPERTY?  NO, HE DIDN'T CONSISTENT
 
22  WITH WHAT LAVONNE AND THE LEGION SAID.
 
23            MORE IMPORTANT, THAT THE INTERFERENCE WAS
 
24  SUBSTANTIAL.  NO, IT WASN'T SUBSTANTIAL.  IT WENT TO THE
 
25  GOALS OF THE LEGION, EVEN BY THE ADMISSION OF THE LEGION'S
 
26  NEW BOARD OF DIRECTORS.
 
27            BUT HERE IS THE MOST IMPORTANT THING.  THAT THE
 
28  INTERFERENCE WAS INTENTIONAL.  WELL, YOUR HONOR, SOMEBODY
			
			

page 962
 
 
 
 1  WAS LED ASTRAY HERE.
 
 2            MR. CARTO, HE PUT UP MONEY FROM '85 TO '91 OUT OF
 
 3  HIS OWN POCKET THROUGH LOANS HE TOOK.  AND WHY WOULD HE DO
 
 4  IT AGAIN?  I'M ASKING THE QUESTION.  ASK YOURSELF THAT
 
 5  QUESTION.  WITH ONLY THE WORD OF JOAN ALTHAUS, WHY WOULD HE
 
 6  DO THAT?  AND JOAN ALTHAUS IS DEAD SO IT WILL RELY ON
 
 7  MR. CARTO.  IF MR. CARTO DOESN'T TESTIFY TO IT, IF MR. CARTO
 
 8  DOESN'T PUT UP THE MONEY TO IT, THEY DON'T GET ANYTHING.  IF
 
 9  HE DOESN'T COOPERATE WITH THE LEGION, THE LEGION GETS
 
10  NOTHING.  IF ELISABETH CARTO DOESN'T COOPERATE WITH THE
 
11  LEGION, THE LEGION GETS NOTHING.  UP TO 1990 THEY GET
 
12  NOTHING.  WITHOUT WILLIS AND ELISABETH CARTO, WHO THE
 
13  EVIDENCE IS CLEAR HAD THE RELATIONSHIP WITH JOAN ALTHAUS,
 
14  THEY GET NOTHING.
 
15            NOW WAS IT INTENTIONAL?  NOW MERE NEGLIGENCE, YOUR
 
16  HONOR, AND I MIGHT INDICATE THAT DOESN'T FIT THE BILL.  IT
 
17  JUST DOESN'T FIT THE BILL.  CONVERSION CAN NOT BE NEGLIGENT
 
18  INTERFERENCE.  IT HAS TO BE INTENTIONAL.  AND THAT'S
 
19  SCHROEDER VERSUS AUTO DRIVEWAY — THE DRIVEAWAY COMPANY
 
20  (1974) CALIFORNIA SUPREME COURT CASE, 11 CAL. 3RD 908 AT
 
21  918.
 
22            YOUR HONOR, WILLIS CARTO DID AS HE SAID HE WAS
 
23  GOING TO DO.  HE DID AS HE WAS INSTRUCTED TO DO.  WHAT ELSE
 
24  COULD THE MAN HAVE DONE?  IF HE WOULD HAVE DONE SOMETHING
 
25  ELSE WITH IT, IF HE WOULD HAVE DONE CONTRARY TO WHAT THE
 
26  BOARD OF THE LEGION — AND BY THE WAY, YOU NOTICE WILLIS
 
27  Carto’s NAME DOESN'T SHOW UP ON ANY OF THE BOARD MINUTES?
 
28  BUT IF HE WOULD HAVE DONE OTHER THAN WHAT THE CORPORATION
			
			

page 963
 
 
 
 1  TOLD HIM TO DO AND INSTRUCTED HIM, HE WOULD HAVE BEEN IN
 
 2  BREACH OF THE POWER OF ATTORNEY.  HE WOULD BE IN BREACH OF
 
 3  FIDUCIARY DUTY.  SO WHAT PLAINTIFF IS DOING, WILLIS WAS
 
 4  DAMNED IF HE DID AND DAMNED IF HE DIDN'T.  AND WILLIS WAS,
 
 5  ACCORDING TO THE PLAINTIFF, DAMNED FROM DAY ONE WHEN HE MADE
 
 6  THE AGREEMENT TO PUT UP THE MONEY WHILE THEY SAT BACK WHILE
 
 7  HE LABORED AND HAD PEOPLE ACROSS THE NATION LABORING AND
 
 8  ACROSS THE SEAS LABORING, AND THEY SAT BACK ON THEIR MERRY
 
 9  WAY AND SAT BACK UNTIL 1993 THEN DECIDE HEY, CORPORATE
 
10  OPPORTUNITY.
 
11            I'M NOT GOING TO GO INTO CORPORATE OPPORTUNITY
 
12  DOCTRINE AGAIN.  I HAVE DONE THAT.  I THINK IT’s CLEAR TO BE
 
13  AN OPPORTUNITY.  THIS HAS TO BE AN OPPORTUNITY.  THERE IS
 
14  NONE, IF YOU CAN'T AVAIL IT.  THE LAW IS CLEAR IF THE
 
15  CORPORATION CANNOT AVAIL ITSELF OF IT, WHETHER IT'S
 
16  FINANCIALLY IMPACTED OR WHETHER IT’s LEGALLY INFIRMED, AND
 
17  IT’s LEGALLY INFIRMED, IT COULD NOT GET THE OPPORTUNITY.
 
18  THEY COULD NOT INDULGE IN SPECULATION UNDER THE LAW.
 
19       THE COURT:  COUNSEL, YOU KEEP MAKING THAT ARGUMENT.
 
20  WHAT ABOUT IF MR. LANE WERE HERE AND THE EVIDENCE IS THAT
 
21  LIBERTY LOBBY GAVE THEM $400,000?  CAN LIBERTY LOBBY NOT DO
 
22  IT EITHER THEN?
 
23       MR. WAIER:  I SUGGEST IN MY OPINION — I AGREE.  I
 
24  DON'T THINK THEY COULD HAVE.  HOWEVER, THEY'RE NOT A
 
25  CALIFORNIA CORPORATION.  THEIR OFFICES AREN'T IN
 
26  CALIFORNIA.  THIS IS UNDER CALIFORNIA LAW, WHICH APPLIES TO
 
27  A FOREIGN CORPORATION WHOSE PRINCIPAL PLACE OF BUSINESS IS
 
28  HERE.
			
			

page 964
 
 
 
 1            I AGREE WITH COUNSEL.  I BELIEVE CALIFORNIA LAW
 
 2  DOES APPLY IN THE CIRCUMSTANCE.  OLINCY V. MERLE NORMAN
 
 3  COSMETICS, WHICH IS A CASE — MERLE NORMAN COSMETICS WAS A
 
 4  CLIENT OF MINE DEALT WITH THE ISSUES.
 
 5            AMERICAN CENTER FOR EDUCATION V. CAVNAR, WHICH IS
 
 6  A 1978 CASE, DEALT WITH THIS SITUATION.  IN ESSENCE WHAT IT
 
 7  SAYS IS THAT THE COURT IS TO TAKE INTO ACCOUNT FACTORS WHEN
 
 8  A FOREIGN NONPROFIT CORPORATION IS INVOLVED AS TO WHETHER
 
 9  CALIFORNIA LAW WILL APPLY.  GIVEN THE PURPOSES OF THE
 
10  CALIFORNIA NONPROFIT LAW, IF THAT FOREIGN CORPORATION HAS
 
11  THE PRINCIPAL PLACE OF BUSINESS HERE, ITS PRIMARY DIRECTORS
 
12  ARE HERE, IT TRANSACTS BUSINESS HERE, PRIMARILY THEN
 
13  CALIFORNIA LAW WILL APPLY.  AND I TEND TO BELIEVE CALIFORNIA
 
14  LAW DOES APPLY.
 
15            WITH LIBERTY LOBBY THAT’s NOT AN ISSUE.  IT’s NOT
 
16  AN ISSUE IN CALIFORNIA, AND IT IS NOT A RED HERRING.  IF WE
 
17  BRING IT UP TO THAT STANDARD, CALIFORNIA LAW WOULDN'T APPLY
 
18  TO LIBERTY LOBBY UNDER THE VARIOUS CASES THAT I JUST TOLD
 
19  YOU.  IF IT DID, YOUR HONOR, WELL POCKS ON THEIR HOUSE.
 
20  SHAME FOR THEM TO MAKE THE LOANS.  SHAME FOR WILLIS CARTO
 
21  INDIVIDUALLY TO PUT UP MONEY.  BY THE WAY, SHAME ON YOU,
 
22  WILLIS, FOR DOING THAT BECAUSE WHAT ENDS UP HAPPENING DOWN
 
23  THE LINE SOMEBODY ELSE, YOU ARE WRONG.  WHO IS WRONG?
 
24            YOUR HONOR, IF YOU TAKE A LOOK AT, AGAIN, TAKING
 
25  OVER THE THING WITH CONVERSION, AND I THINK THAT’s IMPORTANT
 
26  AND IT IS IMPORTANT.  IT WASN'T INTENTIONAL.  THEY HAVEN'T
 
27  SHOWN THAT CRITICAL ELEMENT OF CONVERSION.
 
28            NOT ONLY THAT, YOUR HONOR, THEY NEVER HAD
			
			

page 965
 
 
 
 1  POSSESSION OF THE PROPERTY, THE LEGION, UNTIL WHEN?  THEY
 
 2  DIDN'T HAVE POSSESSION OF THE NECA CERTIFICATES UNTIL 1990.
 
 3  HE COULDN'T HAVE CONVERTED ANYTHING HERE.  THEY HAD NO
 
 4  RIGHTS.  THEY HAD NO RIGHTS BECAUSE OF THE WILL.  THE ONLY
 
 5  TIME THAT THEY CAN COLORABLY CLAIM THEY HAD A RIGHT IS BY
 
 6  THE AGREEMENTS, WHICH MR. CARTO RATIFIED BUT DIDN'T SIGN.
 
 7  IF THEY WERE CLAIMING THAT ALL THE AGREEMENTS — REMEMBER,
 
 8  FOR THEM TO PREVAIL IN ANY RESPECT, THE FIRST QUESTION IS
 
 9  1990 AGREEMENTS.  IF THEY CONTEST THE 1985 AGREEMENT AND SAY
 
10  IT’s WRONG, THEN THE 1990 AGREEMENT IS WRONG, AND THERE’s NO
 
11  RIGHTS IN THE LEGION.  YOU HAVE TO FOCUS ON THAT BECAUSE
 
12  THESE ARE STRONG LEGAL ARGUMENTS, AND THEY CAN'T GET BY
 
13  THOSE.
 
14            THE OTHER ISSUE IS THE ASPECT OF ESTOPPEL.  THE
 
15  EVIDENCE IS CLEAR WILLIS BELIEVED, AS WELL AS ALL THE OTHER
 
16  AGENTS FROM ATTORNEYS ALL THE WAY DOWN, BELIEVE THAT LAVONNE
 
17  FURR AND LEWIS FURR HAD THE AUTHORITY TO GRANT BOTH THE
 
18  AGREEMENTS HERE AND THE DISTRIBUTION OF THE FUNDS HERE, EVEN
 
19  ACCORDING TO THE PRIMA FACIE EVIDENCE YOU HAVE BEFORE YOU.
 
20  THAT’s ESTOPPEL.  WE CLAIMED THAT AS PART OF THE DEFENSES IN
 
21  THE MATTER.  THEY'RE ESTOPPED TO SAY THERE WAS NO AUTHORITY
 
22  THERE.  THEY ARE ESTOPPED TO SAY THE CORPORATION DIDN'T
 
23  AUTHORIZE IT, AND THAT IS A STRONG, LEGAL ARGUMENT BECAUSE
 
24  THEY CAN'T COME BACK IN 1994 — BY THE WAY, WHEN THEY FILED
 
25  THE COMPLAINT JULY 22, 1994, OVER 3 YEARS AFTER THE FACT AND
 
26  OVER 4 YEARS AFTER THE AGREEMENT AND SAY THERE WAS NO
 
27  AUTHORITY, ESPECIALLY WHEN WILLIS COMPLIED WITH AND IF YOU
 
28  READ LAVONNE FURR’s DECLARATION, EXACTLY WHAT SHE TOLD THEM
			
			

page 966
 
 
 
 1  TO DO AND EXACTLY WHAT THOSE MINUTES SAY WERE TO OCCUR,
 
 2  INCLUDING SETTING UP BY PAT FOETISCH THE SEPARATE
 
 3  ORGANIZATION, SO WE GET INTO ESTOPPEL ARGUMENT.
 
 4            I DON'T WANT TO MINIMIZE THE STATUTE OF
 
 5  LIMITATIONS ARGUMENT.  IT’s CLEAR NOW THROUGH THE UNREFUTED
 
 6  EVIDENCE THAT LEWIS AND LAVONNE FURR ONLY HAD ACTUAL
 
 7  KNOWLEDGE IN 1991.  THE DISPOSITION OF THE ASSETS, MORE THAN
 
 8  3 YEARS BEFORE THE COMPLAINT WAS FILED AND CONVERSION IS A 3
 
 9  YEAR STATUTE UNDER CODE OF CIVIL PROCEDURE SECTION 338.
 
10            THEY HAD THE MEANS.  AND THAT WAS THE OTHER CASE
 
11  THAT I CITED TO YOU IN OUR MOTION FOR JUDGMENT UNDER 631.8,
 
12  WHICH IS A SALVESON CASE, AND THAT CASE IT STATES IT’s THE
 
13  MEANS OF KNOWLEDGE.  AND THEY CERTAINLY HAD THE MEANS.  THEY
 
14  HAD THE ATTORNEYS.  THE ATTORNEYS ARE THE MEANS OF
 
15  KNOWLEDGE.  MR. ROCHAT, THE AGENT FOR THE LEGION WHO DID ALL
 
16  THE DISTRIBUTION, WAS THE MEANS OF KNOWLEDGE.
 
17            THEY KNEW ALL OF THAT.  IN FACT, LEWIS FURR
 
18  COMMUNICATED WITH COUNSEL.  I WANT TO EMPHASIZE THAT POINT
 
19  BECAUSE SHE DID.  LAVONNE FURR GOT DIRECT INFORMATION FROM
 
20  WILLIS AND ITS — THERE MUST BE AT LEAST 45 PAGES DISCUSSING
 
21  THAT OF HER DEPOSITION.  AND THEY WERE THE RECIPIENTS OF ALL
 
22  OF THIS WRITTEN DOCUMENTATION FROM THE ATTORNEYS.
 
23            THE STATUTE OF LIMITATIONS IS A SERIOUS ISSUE, AND
 
24  BECAUSE YOU HAVE A SUCCESSOR BOARD OF DIRECTORS DOESN'T TOLL
 
25  IT.  I'M UNAWARE OF ANY LAW THAT SAYS THAT THE STATUTE OF
 
26  LIMITATIONS IS TOLLED EVERY TIME YOU HAVE A NEW BOARD OF
 
27  DIRECTORS.  IF THAT’s THE CASE, YOU NEVER WOULD HAVE A
 
28  STATUTE OF LIMITATIONS.  IT JUST WON'T BE EXISTENT.
			
			

page 967
 
 
 
 1            IN ANY EVENT, THEIR WHOLE CLAIM IS THE FACT THAT
 
 2  MR. CARTO OMITTED TO TELL THE CORPORATION ANYTHING.  THAT'S
 
 3  NOT TRUE.  YOU KNOW THE EVIDENCE DOESN'T SAY THAT MR. CARTO
 
 4  COMMUNICATED FROM '87 THROUGH PUBLIC DOCUMENTS AND COURT
 
 5  FILINGS TO DIRECT COMMUNICATION WITH LAVONNE FURR TO THE
 
 6  BOARD OF DIRECTORS.  THE ONLY PEOPLE HE DIDN'T COMMUNICATE
 
 7  WITH — AND YET HE DOES SAY HE DID, BUT HE DIDN'T
 
 8  COMMUNICATE WITH WAS MR. MARCELLUS AND WEBER WHO AREN'T
 
 9  ENTITLED TO THAT INFORMATION.  THEY WERE STAFF EMPLOYEES,
 
10  NOT IN THE DECISION-MAKING PROCESS OF THE CORPORATION.
 
11  AGAIN, CONSISTENT THROUGHOUT FROM MR. MARCELLUS’s DIRECTION
 
12  TO DONATORS, PUT IT IN SOME OTHER ORGANIZATION.  LEWIS AND
 
13  LAVONNE FURR PUT IT IN SOME OTHER ORGANIZATION, AND THEY
 
14  DID.  HE DID AS HE WAS TOLD.  NO BREACH OF FIDUCIARY DUTY.
 
15  THERE WOULD HAVE BEEN A BREACH IF HE DIDN'T DO IT.
 
16            YOU GOT TO SEPARATE WHAT ACTUALLY HAPPENED.  THE
 
17  COMMON SENSE CAN'T LEAVE THIS CASE.  THERE MAY BE SYMPATHY.
 
18  THERE MAY BE THIS; THERE MAY BE THAT.
 
19            AND I MADE MANY ARGUMENTS TO JURIES, WHICH I TELL
 
20  YOU PROMISED TO TAKE YOUR UNBIASED, COMMON SENSE APPROACH.
 
21  YOU ARE NOT TO LEAVE YOUR COMMON SENSE AT HOME WHEN YOU COME
 
22  AND SIT ON THIS JURY.  THE LAW IS CLEAR.  HE DID WHAT HE HAD
 
23  TO DO UNDER THE LAW.
 
24            NOW WITH RESPECT TO CONVERSION, STATUTE OF
 
25  LIMITATIONS IS EXTREMELY IMPORTANT.  IT ISN'T JUST ACTUAL
 
26  KNOWLEDGE, WHICH YOU KNOW BY THE EVIDENCE AND LAVONNE FURR'S
 
27  AND LEWIS FURR’s TESTIMONY WAS MORE THAN 3 YEARS.  IT WENT
 
28  TO A SEPARATE ORGANIZATION, INTERNATIONAL LEGION FOR THE
			
			

page 968
 
 
 
 1  SURVIVAL OF FREEDOM, INC., NAMED BY THE WAY BY LAVONNE
 
 2  FURR’s OWN WORDS BY HER SUGGESTION TO WILLIS AND TO ROLAND
 
 3  ROCHAT OR PAT FOETISCH AS THE NAME TO PUT TO THE NEW
 
 4  CORPORATION OFFSHORE.  SHE KNEW ABOUT IT MORE THAN 3 YEARS
 
 5  BEFORE THE COMPLAINT WAS FILED.  THAT IS THE UNREFUTED
 
 6  EVIDENCE.
 
 7            THE ONLY EVIDENCE THEY HAVE SHOWN — I WANT THE
 
 8  COURT TO HONE IN ON THIS — IS THE FACT THAT MR. MARCELLUS
 
 9  DIDN'T KNOW AND MR. WEBER DIDN'T KNOW.  SO WHAT?  THEY
 
10  WEREN'T DIRECTORS.  THEY WEREN'T OFFICERS.  THEY WEREN'T
 
11  ANYTHING WITH RESPECT TO THE DECISION-MAKING ASPECT OF THIS
 
12  CORPORATION; AND IN FACT, IF ANYTHING, IT WAS MR. MARCELLUS
 
13  BY HIS OWN TESTIMONY THROUGH A CONTRACT — BY THE WAY, I
 
14  MUST ADD THAT HE SAYS THE FURRS HAD AUTHORITY FOR THEM TO
 
15  ENTER INTO ANOTHER BENEFIT TO THEM.  HE DISAVOWS ALL THE
 
16  REST, BUT HE SAYS THAT CONTRACT IS GOOD.  REPORTS TO WILLIS,
 
17  BUT THAT’s OKAY.  IT DOESN'T MATTER IF MR. WEBER KNEW OR
 
18  MR. MARCELLUS KNEW.  MR. HULSY KNEW.  YOU HEARD THAT FROM
 
19  THE TESTIMONY WITH RESPECT DURING THE MERMELSTEIN CASE AS
 
20  EARLY 1990, 1991.  STATUTE OF LIMITATIONS IS IMPORTANT.
 
21            THE ONLY OTHER CLAIM, YOUR HONOR, THAT COLORABLY
 
22  CAN COME INTO THE PICTURE HERE, AND THAT THEY HAVE SOMEHOW
 
23  INARTICULATELY PLED IN THE COMPLAINT IS THAT SOMEHOW WILLIS
 
24  CARTO, WHO YOU KNOW DIDN'T BENEFIT ONE IOTA, OBTAINED
 
25  PROPERTY THROUGH FRAUD.  AND THE BASIS OF THAT FRAUD CLAIM,
 
26  YOUR HONOR, IS A FAILURE TO DISCLOSE.
 
27            NOW THEY HAD THE OPPORTUNITY TO CALL THE FURRS,
 
28  THE PLAINTIFF.  YOU REMEMBER STRONGER AND MORE AVAILABLE
			
			

page 969
 
 
 
 1  EVIDENCE.  REMEMBER, LET’s NOT LOSE SIGHT OF SOMETHING.
 
 2  THEY HAVE THE BURDEN, NOT MR. CARTO, NOT MRS. CARTO, NOT
 
 3  LIBERTY LOBBY, NOT VIBET, NOT ANYBODY ELSE, NOT HENRY
 
 4  FISCHER.  THE BURDEN IS ON THE PLAINTIFF.
 
 5            MR. CARTO DOESN'T HAVE TO EXPLAIN HIS ANSWERS.
 
 6  THE BURDEN IS ON THEM TO SHOW THAT HIS ACTIONS WERE
 
 7  INAPPROPRIATE AND UNWARRANTED AND UNAUTHORIZED.  THEY MUST
 
 8  SHOW IT WAS DONE BY FRAUD.
 
 9            WHAT’s THE BASIS OF A FRAUD CLAIM?  THEY'RE
 
10  CLAIMING IT’s AN OMISSION TO DISCLOSE.  THEY LOSE.  1987,
 
11  YOUR HONOR, DISCLOSED IN PUBLIC DOCUMENTS AS TO THE VALUING
 
12  OF THE NECA CERTIFICATES.  1990 DISCLOSED TRANSACTIONS
 
13  ATTORNEYS IMPUTED TO THE CORPORATION.  NOT ONLY DO YOU HAVE
 
14  THAT, BUT YOU GOT DISCLOSURES BY MR. CARTO IRREFUTABLY TO
 
15  LAVONNE AND TO LEWIS FURR TELLING THEM EXACTLY WHAT WAS
 
16  HAPPENING; AND IN FACT, EVEN HER SUGGESTING THE NAME OF THE
 
17  OFFSHORE CORPORATION WHO PUT THIS MONEY IN.
 
18            YOU HAVE, AND AS SHE TESTIFIED WITHOUT HESITATION,
 
19  SHE WAS TOLD ALL THE WAY DOWN THE LINE.  NOT ONLY DO YOU
 
20  HAVE THAT, WHERE IS THE OMISSION TO DISCLOSE?  WHERE IS THE
 
21  FRAUD?  YOU CAN'T HAVE FRAUD UNLESS YOU SHOW NONDISCLOSURE,
 
22  AN INTENTIONAL NONDISCLOSURE.  AND I SUGGEST, YOUR HONOR, I
 
23  WANT COUNSEL TO TELL ME WHERE THE EVIDENCE OF NONDISCLOSURE
 
24  IS EXCEPT FOR ONE PIECE OF EVIDENCE.  DO YOU KNOW WHAT THAT
 
25  WAS, YOUR HONOR?  MR. MARCELLUS AND/OR MR. WEBER, WHO ARE
 
26  EMPLOYEES, ASKED MR. CARTO SOMETIME I BELIEVE IN 1993 — YOU
 
27  REMEMBER, THEY'RE EMPLOYEES — ASKED HIM --
 
28       THE COURT:  YOU MADE THAT POINT.
			
			

page 970
 
 
 
 1       MR. WAIER:  I KNOW.  I THINK IT’s IMPORTANT TO
 
 2  EMPHASIZE THAT THAT’s WHERE THE NONDISCLOSURE COMES FROM.
 
 3       THE COURT:  YOU KNOW, I DON'T WANT TO PREVENT YOU FROM
 
 4  MAKING THE ARGUMENT.  I DON'T HAVE TO HAVE A POINT
 
 5  EMPHASIZED TO ME 15 TIMES — WAIT A SECOND.  WHEN I'M
 
 6  TALKING, YOU STOP TALKING.  I'M NICE ABOUT THIS.  DON'T KEEP
 
 7  TELLING ME THEY'RE EMPLOYEES.  I KNOW THEY'RE EMPLOYEES.
 
 8            ALL RIGHT.  GO ON.
 
 9       MR. WAIER:  WITH RESPECT TO FRAUD — I APOLOGIZE TO THE
 
10  COURT.  I SOMETIMES GET UP IN THE HEAT.
 
11       THE COURT:  YES, YOU DO.
 
12       MR. WAIER:  IN ANY EVENT, YOUR HONOR, FOR THEM TO SHOW
 
13  FRAUD THEY HAVE TO SHOW A NONDISCLOSURE THAT LED TO THE
 
14  LEGION’s DISADVANTAGE.
 
15            WHERE IS THE NONDISCLOSURE?  THERE HAS BEEN NONE
 
16  SHOWN.  NONE WHATSOEVER.  AND THAT IS THE CRUX OF THE MATTER
 
17  WITH FRAUD.  NOT ONLY WAS THERE DISCLOSURE, THERE WERE MEANS
 
18  OF DISCLOSURE; AND IN FACT, THE FURRS WERE DISCLOSED.
 
19  THAT’s THE EVIDENCE.  YOU GOT TO STICK WITH THE EVIDENCE IN
 
20  THE CASE.
 
21            HE’s DONE EVERYTHING CONSISTENT.  IF YOU DON'T
 
22  HAVE FRAUD, AND THEY HAVEN'T PROVED EVEN BY A PREPONDERANCE
 
23  OF THE EVIDENCE — AND YOU KNOW FRAUD CLAIMS ARE DISFAVORED
 
24  EVEN BY A PREPONDERANCE OF THE EVIDENCE, ANY FRAUD.  THEY
 
25  HAVEN'T SHOWN CONVERSION.  THEY HAVEN'T SHOWN ANYTHING.
 
26  AND, YOUR HONOR, WITHOUT THOSE TWO PREDICATES, THEY DON'T
 
27  HAVE IT.
 
28            MY LAST STATEMENT, LEWIS AND LAVONNE FURR
			
			

page 971
 
 
 
 1  NOTHING.  THERE IS NO EVIDENCE SAYING THAT THEY DID ANYTHING
 
 2  WRONG.  THAT THEY BENEFITTED.  THAT THEY DID OTHER THAN WHAT
 
 3  THEY BELIEVED WAS THE RIGHT THING TO DO WITH THE
 
 4  CORPORATION, INCLUDING FOLLOWING THE LAW AS IT THEN EXISTED
 
 5  AND NOW EXISTS.
 
 6            WILLIS CARTO, THERE HAS BEEN NO FRAUD SHOWN ON HIS
 
 7  PART NOR HAS THERE BEEN SHOWN CONVERSION ON HIS PART
 
 8  INDIVIDUALLY OR IN CONJUNCTION WITH ANY OTHER PERSON.
 
 9            ELISABETH CARTO, THERE’s THE OLD COMMERCIAL, WHERE
 
10  IS THE BEEF?  WHERE IS THE BEEF?  WHERE IS THE EVIDENCE THAT
 
11  ELISABETH CARTO DID ANYTHING OTHER THAN PUTTING IN 3,000
 
12  HOURS OF HER TIME TO SECURE THE ESTATE AND HER OWN EFFORTS.
 
13  THERE’s NO EVIDENCE SHE BENEFITTED.  THERE’s NO EVIDENCE
 
14  THAT SHE HAD ANYTHING TO DO; AND IN FACT, THERE’s NO
 
15  EVIDENCE THAT SHE PARTICIPATED OTHER THAN LOOKING FOR AN
 
16  ATTORNEY AND SPENDING A TREMENDOUS AMOUNT OF TIME ATTENDING
 
17  COURT HEARINGS.  NONE.  BUT YOU DO HAVE HER TESTIFYING AS TO
 
18  THE WEAK FINANCIAL STATUS.  SHE WAS THE TREASURER.  THAT'S
 
19  THE ONLY EVIDENCE YOU HAVE, THE WEAK FINANCIAL STATUS.  HE
 
20  COULDN'T DO IT.  THE ASSETS WERE ENCUMBERED.  COULDN'T PAY
 
21  ITS OWN ATTORNEYS AND MERMELSTEIN.
 
22            HENRY FISCHER, THEY COULD HAVE NOTICED HENRY
 
23  FISCHER FOR THIS CASE.  THEY DIDN'T DO IT.  AND, YOUR HONOR,
 
24  WHERE IS THE EVIDENCE OF ANYTHING THAT HENRY FISCHER DID
 
25  WRONG OR NOT COMMISSIONED TO DO?  NONE.  THERE’s NO EVIDENCE
 
26  OTHER THAN THE FACT HE WAS PAID FOR HIS SERVICES, WHICH BY
 
27  THE WAY, NOT ONLY DOES MR. WEBER IN THE DEPOSITION AGREE
 
28  SHOULD HAVE BEEN DONE, THE EXPENSES SHOULD BE PAID FOR ANY
			
			

page 972
 
 
 
 1  AGENTS OF THE LEGION TO RECOVER THE ASSETS.  THAT WAS PART
 
 2  OF THE CHARGE TO MR. CARTO FROM LAVONNE FURR AND TO THE
 
 3  DIRECTORS, AND I MEAN, AND AS OF THE DIRECTORS OF THE
 
 4  LEGION.  THERE’s NO EVIDENCE HE DID ANYTHING BUT RECEIVE A
 
 5  FEE FOR THE COUNTLESS HOURS HE PUT IN AS EMPHASIZED BY
 
 6  WILLIS CARTO.  WITHOUT HENRY FISCHER THERE WOULD HAVE BEEN
 
 7  ZERO.
 
 8            AND WHAT EVIDENCE IS THERE OF LIBERTY LOBBY OTHER
 
 9  THAN THE FACT, RIGHT OR WRONG, LEGAL OR ILLEGAL, WHICH IS
 
10  NOT AT ISSUE IN THE COURT, THEY PUT UP ALL OF THIS MONEY IN
 
11  THE WAY OF A LOAN TO WILLIS CARTO, AS WELL AS YOU DID HEAR
 
12  WILLIS CARTO PUT OUT FOR THEIR OWN EXPENSES.  THEY PUT UP
 
13  ALL THE MONEY.  AND YOU MUST ASK YOURSELF THAT QUESTION.
 
14  WHY IF IT WASN'T FOR THE AGREEMENT THAT WILLIS HAD — IF
 
15  WILLIS WASN'T WILLING TO GO ON THE LINE AND COMMIT HIMSELF
 
16  TO REPAY THE LOANS.
 
17            WHAT HAVE THEY DONE OTHER THAN THEY DIDN'T
 
18  PERSONALLY BENEFIT.  THEY WERE MERELY LIBERTY LOBBY.
 
19  THEY — IT WAS MERELY A VEHICLE UPON WHICH THE DIRECTION OF
 
20  THE BOARD OF DIRECTORS OF THE LEGION UTILIZED FOR PURPOSES
 
21  OF GETTING THE MONEY TO THE RADIO STATION, SUN RADIO.
 
22  WHETHER IT WAS DONE RIGHT OR WRONG IS NOT AN ISSUE.  WHETHER
 
23  IT WAS NEGLIGENT ON LAVONNE’s PART TO AGREE TO THAT OR
 
24  WHETHER IT WAS NEGLIGENT ON SOMEBODY ELSE’s PART, THAT’s NOT
 
25  WHAT IS BEING SUED HERE.  EVEN IF IT WAS, THEY'RE UNPAID
 
26  DIRECTORS AND OFFICERS, AND THERE’s NO CAUSE OF ACTION
 
27  AGAINST THEM UNDER THE LAW.  THERE IS NOTHING OUT THERE.
 
28  THIS IS NOT SOMETHING WHERE SOMEBODY GOES OUT AND GOES TO A
			
			

page 973
 
 
 
 1  BANK AND GOES TO SOMEBODY’s ACCOUNT AND SAYS, I AM THAT
 
 2  ACCOUNT, NOT IN 1985 AND NOT IN 1990, AND THEN STEALS THE
 
 3  MONEY AND PUTS IT IN HIS OWN POCKET AND WALKS AWAY.  THEN
 
 4  ALMOST 4 YEARS AFTER THE FACT SOMEBODY SAYS, HEY, YOU
 
 5  CLEANED OUT MY ACCOUNT.  NOTHING WAS CLEANED OUT.
 
 6            YOUR HONOR, WHEN YOU REVIEW ALL THE EVIDENCE AND
 
 7  APPLY THE LAW, AND I MAY NOT AGREE WITH SOME OF THE LAW, BUT
 
 8  IT’s THERE.  I MAY NOT AGREE WITH THE PRIMA FACIE EVIDENCE.
 
 9  I MAY NOT AGREE ABOUT THE LACK OF AUTHORITY.  I MAY NOT
 
10  AGREE THAT I HAVE TO INCLUDE THE ATTORNEY GENERAL.  I MAY
 
11  NOT AGREE THAT ANY TIME I SEEK AN INJUNCTION LIKE THE LEGION
 
12  DOES HERE UNDER A CONTRACT I HAVE TO NAME ALL THE PARTIES TO
 
13  THE AGREEMENTS, WHICH THEY HAVEN'T DONE.  THEY HAVEN'T NAMED
 
14  ROLAND ROCHAT, AND THEY ARE PARTIES.  AND INVITE THE COURT
 
15  TO LOOK AT IT.  I MAY NOT AGREE WITH THAT, BUT I HAVE TO DO
 
16  IT.  I MAY NOT AGREE I HAVE TO PETITION THE COURT BEFOREHAND
 
17  TO FILE THE LAWSUIT, BUT I DID.
 
18       THE COURT:  WHAT WAS THAT SECTION AGAIN?
 
19       MR. WAIER:  425.  CALIFORNIA CODE OF CIVIL PROCEDURE
 
20  425.15 SECTION TALKS ABOUT NONPROFIT CORPORATION PETITIONING
 
21  THE COURT BEFORE YOU MAY FILE A LAWSUIT AND GET ANY APPROVAL
 
22  OF THE BOARD.
 
23            I MAY NOT AGREE WITH THE LAWS, YOUR HONOR, BUT I'M
 
24  BOUND BY THEM.  THE FURRS WERE BOUND BY THEM.  THE FURRS
 
25  WERE BOUND BY NOT SPECULATING.  WILLIS IS BOUND TO FOLLOW
 
26  THE DIRECTORS AND FOLLOW WHAT THE LEGION WANTED, AND THAT'S
 
27  WHAT HAPPENED.  PURE AND SIMPLE.
 
28            AND WE MUST DIVORCE OURSELVES FROM THE MONDAY
			
			

page 974
 
 
 
 1  QUARTERBACKING.  WE MUST DIVORCE OURSELVES HOW THAT POINT
 
 2  COULD BE UTILIZED TODAY AS IT WAS UTILIZED BACK THEN AS IT
 
 3  UTILIZED.  AND THE PROPER, PRUDENT BUSINESS JUDGMENT OF THE
 
 4  LEGION CANNOT BE QUESTIONED.  IT WAS UTILIZED FOR THE
 
 5  PURPOSES FOR WHICH IT WAS CREATED.  IT WAS UTILIZED FOR THE
 
 6  PURPOSES FOR WHICH JEAN FARREL-EDISON WANTED.  IT WAS
 
 7  UTILIZED FOR THE PURPOSES OF ADVANCING THE VERY GOALS, AS
 
 8  MR. WEBER TESTIFIED, OF THE LEGION.
 
 9            FOR THAT, YOUR HONOR, WE DO NOT BELIEVE THAT UNDER
 
10  ANY THEORY WITHIN THE COMPLAINT THAT THEY HAVE PROVEN BY A
 
11  PREPONDERANCE OF THE EVIDENCE ANY OF THE THEORIES AS AGAINST
 
12  ANY SINGLE DEFENDANT OR ANY CONJUNCTION OF THE DEFENDANTS,
 
13  AND WE DO BELIEVE THAT WE HAVE PROVED BY A PREPONDERANCE OF
 
14  THE EVIDENCE ESTOPPEL.  WE PROVED BY A PREPONDERANCE OF THE
 
15  EVIDENCE LATCHES.  WE PROVED BY A PREPONDERANCE OF THE
 
16  EVIDENCE STATUTE OF LIMITATIONS, BOTH FOR FRAUD, THE THREE
 
17  YEAR FRAUD CAUSE OF ACTION, AS WELL AS THE THREE YEAR
 
18  CONVERSION CAUSE OF ACTION.  WE PROVED BEYOND A
 
19  PREPONDERANCE OF THE EVIDENCE THAT NOTHING WAS DONE WRONG.
 
20  FOR THAT WE REQUEST A JUDGMENT BE RENDERED IN FAVOR OF THE
 
21  DEFENDANTS.  THANK YOU.
 
22       THE COURT:  THANK YOU.  ONE FINAL QUESTION I HAVE.
 
23  YOUR ARGUMENT SEEMED TO SAY A NONPROFIT ORGANIZATION CAN'T
 
24  GO OUT AND HIRE ATTORNEYS EITHER ON A CONTINGENCY OR A JUST
 
25  WITH MONEY OR SOLICIT CONTRIBUTIONS BECAUSE THAT’s NOT WHAT
 
26  THE ORGANIZATION IS SET UP FOR.
 
27            IS THAT WHAT YOU ARE SAYING?
 
28       MR. WAIER:  I'M SAYING THAT — I'M SAYING THAT ON THIS
			
			

page 975
 
 
 
 1  TYPE — I'M NOT SAYING THAT.  WHAT I'M SAYING IS IN
 
 2  CONJUNCTION WITH THEIR CHARTER AND PURPOSES THEY LEGALLY
 
 3  CAN'T DO IT.  THEIR BYLAWS DO NOT PERMIT.  THERE’s A
 
 4  CORPORATIONS CODE, NONPROFIT CORPORATIONS CODE SECTION,
 
 5  WHICH STATES, IF YOU ARE GOING TO GO BEYOND THE PURPOSES OF
 
 6  THE CORPORATION — AND I DON'T HAVE IT OFFHAND.  I CAN GET
 
 7  THAT FOR THE COURT IF THE COURT WILL ALLOW ME A LITTLE BIT.
 
 8  IT SAYS THAT WHEN YOU GOT OUTSIDE PURPOSES YOU MUST CONTACT
 
 9  THE ATTORNEY GENERAL AND THEN GET HIS APPROVAL BEFORE YOU DO
 
10  THAT.  BEFORE YOU EMBARK ON SUCH A VENTURE IN 1985, THEY
 
11  WOULD HAVE HAD TO CONTACT THE ATTORNEY GENERAL FOR PURPOSES
 
12  OF SOLICITING CONTRIBUTIONS FOR THE PURPOSE AND NOTIFYING
 
13  THE ATTORNEY GENERAL ABOUT THAT.  THAT’s WHAT THE LAW SAYS,
 
14  AND THAT’s NOT WHAT HAPPENED HERE.  THERE IS A MECHANISM TO
 
15  GO BEYOND YOUR CHARTER AND BEYOND YOUR PURPOSES, BUT YOU
 
16  MUST PETITION THE ATTORNEY GENERAL BEFOREHAND, AND THAT
 
17  DIDN'T HAPPEN HERE.  THANK YOU.
 
18       THE COURT:  THANK YOU.  WOULD THE PLAINTIFF LIKE TO SAY
 
19  ANYTHING?
 
20       MR. BEUGELMANS:  YES.  YOUR HONOR, COUNSEL, ON FRIDAY
 
21  AFTERNOON BEFORE YOUR HONOR INVITED COUNSEL TO MAKE A
 
22  CLOSING ARGUMENT, YOU STATED THAT IF COUNSEL PREFER TO SOAR
 
23  UPON THE WINGS OF THEIR IMAGINATION.  I BELIEVE MR. WAIER
 
24  SOARED SO HIGH HIS WINGS HAVE COME LOOSE FROM HIS BODY, AND
 
25  HE HAS FALLEN TO THE GROUND WITH ALL OF HIS ARGUMENTS.
 
26            I DON'T INTEND TO ATTEMPT TO DAZZLE THE COURT WITH
 
27  ANY RHETORIC.  WHAT I WOULD LIKE TO DO IS BRIEFLY AND BEFORE
 
28  LUNCH GO OVER SOME OF THE EVIDENCE AND POINT OUT WHY THE
			
			

page 976
 
 
 
 1  EVIDENCE AS APPLIED TO THE LAW ENTITLES THE PLAINTIFF TO A
 
 2  VERDICT IN THE CASE.
 
 3            THE FIRST THING IS I WOULD LIKE TO VERY BRIEFLY
 
 4  POINT OUT THE CODE SECTIONS IN THE CORPORATIONS CODE,
 
 5  NONCORPORATION LAW, UPON WHICH THE DEFENDANTS IN THIS ACTION
 
 6  ARE ALL LIABLE.
 
 7            SECTION 6215 STATES: “ANY DIRECTORS, OFFICERS,
 
 8  EMPLOYEES OR AGENTS OF THE CORPORATION WHO DO ANY OF THE
 
 9  FOLLOWING ARE LIABLE JOINTLY AND SEVERALLY FOR ALL DAMAGES
 
10  RESULTING THEREFROM TO THE CORPORATION."
 
11            PART B, “MAKE OR CAUSE TO BE MADE IN THE BOOKS,
 
12  MINUTES, OR RECORDS OR ACCOUNTS OF A CORPORATION ANY ENTRY
 
13  WHICH IS FALSE IN ANY MATERIAL PARTICULAR — IN ANY MATERIAL
 
14  PARTICULAR KNOWING SUCH ENTRY IS FALSE."
 
15            WE KNOW, YOUR HONOR, THAT EXHIBIT 60 IS A FALSE
 
16  MINUTE.  WE KNOW, YOUR HONOR, THAT THE MINUTES OF THE
 
17  MEETING OF THE BOARD OF DIRECTORS OF MARCH 5, 1991 UPON
 
18  WHICH THE DEFENDANTS RELY ON THE CONTENTION THAT THE LEGION
 
19  DECLINED TO ACCEPT THE FARREL BEQUEST IS FALSE.
 
20       MR. WAIER:  I DON'T NORMALLY OBJECT ON A BENCH TRIAL.
 
21  THAT’s IMPROPER LAW.
 
22       THE COURT:  WELL, COUNSEL, I'M GOING TO OVERRULE THE
 
23  OBJECTION.  HE’s GIVING ME HIS OPINION IT’s FALSE.
 
24       MR. WAIER:  NO.  IT’s IMPROPER LAW TO APPLY THAT
 
25  SECTION.  THERE’s AN ATTORNEY GENERAL CAUSE OF ACTION, NOT A
 
26  PUBLIC CAUSE OF ACTION OR PRIVATE RIGHT.
 
27       THE COURT:  OVERRULED.
 
28       MR. BEUGELMANS:  CORPORATIONS CODE SECTION 7231 STATES
			
			

page 977
 
 
 
 1  THE OBLIGATIONS AND DUTIES OF A DIRECTOR AND AN OFFICER
 
 2  WHILE ACTING IN GOOD FAITH.
 
 3            AND LAST, YOUR HONOR, SECTION 5047.5 STATES VERY
 
 4  CLEARLY THAT “INTENTIONAL, WANTON, OR RECKLESS ACTS, GROSS
 
 5  NEGLIGENCE, OR AN ACTION BASED ON FRAUD, OPPRESSION OR
 
 6  MALICE” COMES WITHIN THE CAUSES OF ACTION WHICH A
 
 7  CORPORATION CAN ALLEGE AGAINST THE DIRECTORS AND OFFICERS.
 
 8            COUNSEL STATED ONLY A FEW MINUTES AGO, AND THE
 
 9  WORDS ARE STILL IN MY EARS, I WANT COUNSEL TO TELL ME WHAT
 
10  EVIDENCE THERE IS OF NONDISCLOSURE.  I WOULD LIKE TO READ TO
 
11  THE COURT FROM THE DEPOSITION OF LAVONNE FURR.
 
12            “QUESTION BY MR. BEUGELMANS:  PLEASE TELL ME THE
 
13  NAMES OF THE ORGANIZATIONS INTO WHICH THE 45 PERCENT SHARE
 
14  OF THE FARREL SETTLEMENT THAT DID NOT GO TO THE ALTHAUS
 
15  PARTIES WENT.
 
16            “ANSWER:  TO THE INTERNATIONAL LEGION AND VIBET.
 
17            “QUESTION:  HOW MUCH OF THE TOTAL THAT WENT TO THE
 
18  TWO ORGANIZATIONS, THE INTERNATIONAL LEGION AND VIBET?
 
19            “ANSWER:  I DON'T RECALL THE EXACT TOTAL.
 
20            “QUESTION:  WAS IT MORE THAN A MILLION DOLLARS?
 
21            “ANSWER:  I DON'T BELIEVE IT WAS.
 
22            “QUESTION:  WHO TOLD YOU THE AMOUNT TOTAL THAT
 
23  WENT TO BOTH OF THOSE ORGANIZATIONS?
 
24            “ANSWER:  MR. CARTO."
 
25            MR. WAIER SAID SHE DIDN'T TESTIFY ABOUT THE VALUE
 
26  OF THE GEMS.  IN FACT, IF YOU READ FURTHER, PAGE 106, I
 
27  ASKED:
 
28            “QUESTION:  DO YOU HAVE ANY KNOWLEDGE THAT THE
			
			

page 978
 
 
 
 1  PROCEEDS FROM THE SALE OF ANY GEMS OF THE FARREL ESTATE WERE
 
 2  DEPOSITED INTO EITHER THE INTERNATIONAL LEGION OR VIBET
 
 3  ACCOUNTS?
 
 4            “ANSWER:  IT WAS."
 
 5       MR. WAIER:  WHAT PAGE?
 
 6       THE COURT:  106.  COUNSEL, PLEASE, HE WAS GOOD ABOUT
 
 7  YOUR ARGUMENT.  YOU DID THIS DURING THE TRIAL.  YOU SEEM
 
 8  NEVER TO HEAR THE PAGE NUMBER AND EVERYTHING.  IF YOU MISS
 
 9  IT AT THIS STAGE OF THE PROCEEDING, THEN YOU JUST MISS IT.
 
10  LET’s NOT INTERRUPT AGAIN, UNLESS YOU HAVE A LEGAL REASON TO
 
11  DO.  THEN I'LL RULE ON IT.
 
12       MR. BEUGELMANS:  MR. WAIER STATED MR. CARTO DOESN'T
 
13  HAVE TO EXPLAIN HIS ACTIONS.  WELL, IN FACT MR. CARTO WAS AN
 
14  AGENT, AND AN AGENT HAS A FIDUCIARY DUTY.  HE MUST EXPLAIN
 
15  THE ACTS.  THAT’s A CAUSE OF ACTION GIVEN.
 
16            LIKEWISE WITH MR. FISCHER.  HE WAS AN AGENT
 
17  SPECIFICALLY, AND WE'LL GET INTO SOME OF THE DOCUMENTS THAT
 
18  SHOW CLEARLY THEY WERE AGENTS AT ALL TIMES ACTING ON BEHALF
 
19  OF THE LEGION.
 
20            MR. WAIER STATES, SHOW ME THE INTENTION.  SHOW ME
 
21  THE UNLAWFUL INTENTION.  WELL, YOUR HONOR, EVIDENCE CODE
 
22  SECTION 665 SAYS THAT PEOPLE INTEND THE ORDINARY
 
23  CONSEQUENCES OF THEIR VOLUNTARY ACTS.  HE HIMSELF ACTED AS
 
24  AN AGENT.
 
25            AND EVIDENCE CODE SECTION 668 STATES AN UNLAWFUL
 
26  INTENT IS PRESUMED FROM AN UNLAWFUL ACT.
 
27            MR. WAIER STATED THAT MR. CARTO WAS NOT AN AGENT
 
28  PRIOR TO 1985.  IT APPEARS THAT COUNSEL HAS ABANDONED THE
			
			

page 979
 
 
 
 1  ARGUMENT MADE EARLIER IN THE TRIAL AT ALL TIMES MR. CARTO
 
 2  WAS AN INCORPORATOR MEMBER, AND THEREFORE HAD SOME SUPREME
 
 3  AUTHORITY OVER THE LEGION, AND YET THE SAME ARGUMENT IS MADE
 
 4  SUBROSA.
 
 5            MR. WAIER KEEPS SAYING LAVONNE HAD NOTICE.
 
 6  LAVONNE HAD NOTICE AND ETC., ETC. BUT, YOUR HONOR, THE FACT
 
 7  THAT LAVONNE DID OR DID NOT HAVE NOTICE IS OF NO CONSEQUENCE
 
 8  AS A MATTER OF LAW.  A CORPORATION ACTS BY AND THROUGH ITS
 
 9  BOARD OF DIRECTORS.  IT’s NOT SIMPLY LEWIS AND LAVONNE, BUT
 
10  ALL OF THE DIRECTORS IN A DULY-CONSTITUTED MEETING WHO HAD
 
11  TO DECIDE THE AFFAIRS OF THE CORPORATION.
 
12            YOU RECALL THE FIRST DAY OUT OF THE BOX I ASKED
 
13  MR. CARTO ABOUT THE DUTIES AND OBLIGATIONS; WHAT HE
 
14  UNDERSTOOD THE DUTIES AND OBLIGATIONS OF THE DIRECTORS
 
15  WERE.  MR. CARTO SAID THEY WERE MERELY A FRONTISPIECE, A
 
16  FRONTISPIECE.
 
17            HE TESTIFIED IN FACT HE, WILLIS CARTO AND LAVONNE,
 
18  MADE ALL DECISIONS AHEAD OF THE MEETINGS OF THE BOARD OF
 
19  DIRECTORS.  THEY WERE INCORPORATORS, AND IN THAT CAPACITY
 
20  THEY WERE ENTITLED TO DECIDE ALL.
 
21            IT’s CLEAR, IN FACT, AB INITIO FROM THE BEGINNING
 
22  IN 1966 WHEN MR. CARTO CAME ABOARD THE CORPORATION WHEN HE
 
23  THOUGHT HE PURCHASED AND BOUGHT IT HE RAN THE CORPORATION
 
24  LIKE HIS OWN PRIVATE BUSINESS WITH LEWIS AND LAVONNE FURR AS
 
25  MERE FRONTISPIECES, AS PUPPETS.  THE OTHER DIRECTORS, BE IT
 
26  MR. TAYLOR, WHO TESTIFIED CANDIDLY, OR MR. KERR, WHO ALSO
 
27  CANDIDLY STATED:  WE WERE NEVER GIVEN NOTICE OF ANY
 
28  MEETING.  WE NEVER DISCUSSED ANYTHING IN THE MEETING.  WE
			
			

page 980
 
 
 
 1  NEVER EVER KNEW ABOUT THE FARREL ESTATE OR THE 7.5 MILLION
 
 2  BEQUEST BEFORE 1993.
 
 3            THE CORPORATIONS CODE IS EXPLICIT, YOUR HONOR.
 
 4  SECTION 5211 STATES MEETINGS OF THE BOARD OF DIRECTORS MUST
 
 5  BE CALLED AND NOTICED PROPERLY, AND ALL DIRECTORS MUST
 
 6  ATTEND EITHER IN PERSON OR TELEPHONICALLY WITH ALL OF THE
 
 7  DIRECTORS BEING ABLE TO SPEAK TO ONE ANOTHER.  CLEARLY THIS
 
 8  NEVER OCCURRED.
 
 9            MR. WAIER MAKES A BIG POINT ABOUT THE FURRS
 
10  RATIFYING ALL OF THE ACTIONS AND HAVING ACTUAL KNOWLEDGE
 
11  ABOUT ALL THE ACTIONS TAKEN BY MR. CARTO.  WHAT IS CLEAR
 
12  FROM THE DEPOSITION OF LAVONNE FURR AND LEWIS FURR IS IN
 
13  FACT THEY RELIED UPON MR. CARTO.  LAVONNE SAYS OVER AND OVER
 
14  AGAIN, WE TRUSTED WILLIS CARTO.  WE RELIED UPON HIM.  IF HE
 
15  TOLD US HE HAD A DISCUSSION WITH HIS DIRECTOR, WE BELIEVED
 
16  HIM.  WELL, WE KNOW THAT MR. CARTO DIDN'T HAVE DISCUSSIONS
 
17  WITH CERTAIN DIRECTORS.  AND THESE WERE DISCUSSIONS OF A
 
18  CRITICAL NATURE.  THEY'RE DISCUSSIONS GOING TO THE BEQUEST
 
19  THAT WAS LEFT TO THE LEGION.
 
20            NOW MR. WAIER ATTEMPTED TO ARGUE THE FACTS OF THE
 
21  UNDERLYING LITIGATION, THE NECA LITIGATION.  HE KNOWS
 
22  NOTHING ABOUT IT NOR DO I.  THERE’s NOTHING IN THE RECORD.
 
23  WHAT I PRESUME HAPPENED IS THAT NECA WAS SET UP TO CONVEY
 
24  ASSETS IN A TRUST, BUT FOR SOME REASON BEFORE JEAN CAN IN
 
25  FACT TRANSFER THE ASSETS TO NECA, SHE DIED, AND SO THERE WAS
 
26  SOME KIND OF A DRY TRUST LITIGATION THEN ENSUED TO WHETHER
 
27  OR NOT NECA WAS A GIFT THAT WAS MADE BEFORE DEATH OR WHETHER
 
28  NECA ASSETS CAME TO THE CORPORATION.  IN THE EVENT — WHAT
			
			

page 981
 
 
 
 1  IS VERY, VERY CLEAR, YOUR HONOR, IS THAT NECA WAS FORMED FOR
 
 2  THE PURPOSE OF THE LEGION AND NO OTHER PURPOSE.
 
 3            IF YOUR HONOR HAS THE EVIDENCE IN FRONT OF HIM, I
 
 4  WOULD LIKE BRIEFLY TO TAKE YOUR HONOR THROUGH SOME OF THE
 
 5  CRITICAL EXHIBITS.  I KNOW THERE’s BEEN A MASS OF THEM.  I
 
 6  SIMPLY LIKE TO POINT OUT A FEW FOR THE COURT’s USE PERHAPS
 
 7  IN EVALUATING THIS EVIDENCE.
 
 8            EXHIBIT 6, YOUR HONOR, IS INTERESTING BECAUSE IT
 
 9  WAS MADE BEFORE JEAN FARREL’s DEATH.  AND IN EXHIBIT 6,
 
10  WHICH IS IN EVIDENCE, LAVONNE FURR STATES: “THE ARSON OF THE
 
11  CORPORATE HEADQUARTERS HAS BROUGHT FORTH ADDITIONAL SUPPORT
 
12  FROM PERSONS WHO DO NOT WISH TO SEE THE WORK OF THE
 
13  CORPORATION BROUGHT TO AN END.  AMONG THOSE SUPPORTERS IS
 
14  MISS JEAN FARREL, A CITIZEN OF COLUMBIA RESIDING IN
 
15  SWITZERLAND.  MISS FARREL VISITED THE OFFICES OF THE
 
16  CORPORATION LATE MARCH OF LAST YEAR.  SHE IS THE FOUNDER OF
 
17  NECA CORPORATION, WHICH SHE HAS CREATED FOR THE CORPORATION
 
18  AND WILL COME UNDER CONTROL OF THE CORPORATION UPON HER
 
19  DEATH."
 
20            NOW YOUR HONOR WILL RECALL IN HER DEPOSITION I
 
21  ASKED LAVONNE FURR:
 
22            “DID YOU EVER SPEAK — DID YOU OR YOUR HUSBAND
 
23  SPEAK WITH JEAN FARREL?"
 
24            “AND SHE STATED:  NO."
 
25            WELL, THE ONLY PLACE THAT LAVONNE FURR COULD HAVE
 
26  GOTTEN THE INFORMATION WAS FROM WILLIS CARTO.  WILLIS CARTO
 
27  TOLD LAVONNE FURR FROM THE GET-GO NECA BELONGED TO THE
 
28  LEGION UPON THE DEATH OF JEAN FARREL.
			
			

page 982
 
 
 
 1            EXHIBIT 9, YOUR HONOR, IS A POWER OF ATTORNEY THAT
 
 2  WAS GIVEN TO WILLIS CARTO BEFORE THE FAMOUS LETTER OF
 
 3  SEPTEMBER 14, 1995.  THIS IS THE POWER OF ATTORNEY DATED
 
 4  SEPTEMBER 7, 1985 BEFORE THE ALLEGED AGREEMENT WAS ENTERED
 
 5  INTO BETWEEN LAVONNE AND LEWIS; CARTE BLANCHE GIVEN TO GO
 
 6  AFTER THE ESTATE.  IT’s INTERESTING BECAUSE EXHIBIT 8, 9
 
 7  SAYS:
 
 8            “THE BEARER OF THIS INSTRUMENT, MR. WILLIS A.
 
 9  CARTO, HAS BEEN DESIGNATED THE BUSINESS AGENT FOR THIS
 
10  INSTITUTE AND HAS THE POWER OF ATTORNEY TO CONDUCT ALL
 
11  BUSINESS AFFAIRS IN THE NAME OF AND FOR THE BENEFIT OF THIS
 
12  INSTITUTE, IN PARTICULAR AS IT CONCERNS THE ESTATE OF MISS
 
13  JEAN FARREL."
 
14            HE WAS AN AGENT BEFORE ENTERING INTO THIS
 
15  PURPORTED DEAL.
 
16            EXHIBIT 10, YOUR HONOR, THIS IS FOUR DAYS AFTER
 
17  THE CONTRACT, IF YOU WILL, WAS ENTERED INTO BETWEEN WILLIS
 
18  CARTO AND LAVONNE FURR GIVING MR. CARTO THE RIGHT TO GAMBLE
 
19  THIS INHERITANCE.
 
20            AND IT STATES:  “A REPORT WAS MADE BY THE BUSINESS
 
21  AGENT FOR THE CORPORATION, MR. W. A. CARTO, WHO TRAVELLED TO
 
22  LUTRY, WHERE MISS FARREL LIVED, SEPTEMBER 8 AND RETURNED ON
 
23  THE 12TH."
 
24            THE SIGNIFICANCE OF MISS FARREL’s DEATH IS THAT
 
25  DIRECT CONTROL OF NECA CORPORATION HAS NOW PASSED TO THE
 
26  LEGION.
 
27            EXHIBIT 11, ANOTHER POWER OF ATTORNEY NOTARIZED:
 
28  “THE BEARER OF THIS DOCUMENT, MR. WILLIS A. CARTO, HAS BEEN
			
			

page 983
 
 
 
 1  DESIGNATED BUSINESS AGENT FOR THIS CORPORATION AND HAS FULL
 
 2  POWER OF ATTORNEY TO CONDUCT ALL BUSINESS AFFAIRS IN THE
 
 3  NAME OF AND FOR THE BENEFIT OF THIS CORPORATION AND FOR ITS
 
 4  TRADE NAMES AND WHOLLY-OWNED SUBSIDIARIES, INCLUDING THE
 
 5  INSTITUTE FOR HISTORICAL REVIEW AND NECA CORPORATION."
 
 6  WHOLLY-OWNED SUBSIDIARY.
 
 7            EXHIBIT 20, YOUR HONOR, I WASN'T GOING TO TALK
 
 8  ABOUT IT MUCH.  IT’s INTERESTING.  EXHIBIT 20, IF YOU LOOK
 
 9  AT IT STATES:  “THAT THE DIAMONDS WILL BE SHARED 45/55."
 
10  AND I WILL MAKE A COMMENT ON THAT LATER ON.  IT’s KIND OF
 
11  INTERESTING, AND IT GOES TO THE ACCOUNTING ISSUE.
 
12            EXHIBIT 21, FASCINATING.  MARCH 3, 1987, WILLIS --
 
13  LAVONNE FURR, I'M SORRY, STATES:
 
14            “A DISCUSSION ENSUED REGARDING THE ESTATE OF MISS
 
15  JEAN FARREL, WHICH IS INVOLVED IN LITIGATION IN SWITZERLAND
 
16  AND OTHER PLACES.  IT’s HOPED THAT A SETTLEMENT WILL BE
 
17  REACHED SOON.  THIS IS DEPENDENT ON THE CORPORATION
 
18  RELINQUISHING CLAIM TO A SIZABLE PORTION OF THE ESTATE,
 
19  PERHAPS AS MUCH AS 50 PERCENT."
 
20            YOU RECALL THAT MR. CARTO TESTIFIED THAT AS OF
 
21  JANUARY 1, 1987, THE LEGION HAD ALREADY RELINQUISHED ITS
 
22  INTEREST IN THE FARREL BEQUEST TO HIM.  IT’s STRANGE.
 
23            EXHIBIT 27, YOUR HONOR, SHOWS WHO THE DIRECTORS
 
24  WERE AT THE TIME.  IT WASN'T JUST LEWIS AND LAVONNE.  IT WAS
 
25  MR. KERR WHO AT THAT TIME WAS THE VICE-CHAIRMAN AND
 
26  DIRECTOR; MR. KERR, WHO STATED UNDER OATH CANDIDLY THAT HE
 
27  WAS NEVER GIVEN ANY NOTICE OF THE MEETING OF MARCH 5, 1991
 
28  AND DIDN'T ATTEND ANY AND NEVER KNEW ABOUT THE FARREL ESTATE
			
			

page 984
 
 
 
 1  PRIOR TO 1993, SEPTEMBER 1993.
 
 2            EXHIBIT 35, YOUR HONOR, MINUTES DATED JANUARY 9,
 
 3  1991 — INTERESTING, YOUR HONOR, BECAUSE MR. WAIER TESTIFIED
 
 4  THAT NONE OF THE MINUTES MENTIONED MR. CARTO, AND WE RAN
 
 5  ACROSS THREE.  GOING THROUGH THE ONE I'M TOUCHING ON EXHIBIT
 
 6  35 STATES: “MR. CARTO SAID THAT THE ENGLISH COURT” --
 
 7  “MR. CARTO SAID THAT THE ENGLISH COURT HAD SCHEDULED A
 
 8  HEARING FOR JANUARY 31 AT WHICH TIME THE FUNDS DUE THE
 
 9  CORPORATION SHOULD BE LIBERATED AND SENT TO SWITZERLAND.  AT
 
10  THAT TIME THE CORPORATION SHOULD BE ABLE TO PAY ITS MANY
 
11  DEBTS INCURRED OVER THE LAST FIVE YEARS FOR ATTORNEYS."
 
12            WHY WOULD WILLIS CARTO SAY THAT IF THE LEGION
 
13  RELINQUISHED AND HE PAID THE FEES?  IT DOESN'T MAKE SENSE,
 
14  YOUR HONOR.
 
15            FURTHER ON IT SAYS:  “RESOLVED, THAT THE
 
16  RESOLUTION OF THIS BOARD OF SEPTEMBER 19, 1985, BE CONFIRMED
 
17  THIS DATE AND THAT MR. WILLIS A. CARTO IS HEREBY AUTHORIZED
 
18  AND INSTRUCTED TO TAKE WHATEVER MEASURES AS IN HIS JUDGMENT
 
19  ARE REQUIRED TO SECURE THE PROPERTY OF THE CORPORATION AS
 
20  DERIVED FROM THE ESTATE AND ASSETS OF MISS JEAN FARREL."
 
21            WHY DOES HE NEED THAT?  WHAT IS GOING ON HERE?
 
22            EXHIBIT 41, YOUR HONOR, IS THE FAMOUS EXHIBIT
 
23  WHICH THE LEGION RELINQUISHED THE INTEREST IN THE FARREL
 
24  ESTATE.  AND OF COURSE WE KNOW FROM THE FURR’s DEPOSITION AT
 
25  THE TIME THEY RELINQUISHED THEY HAD NO KNOWLEDGE TO THE
 
26  VALUE OF THE SETTLEMENT.  THEY HAD NO KNOWLEDGE WHATSOEVER.
 
27  THEY BELIEVED IT WAS LESS THAN A MILLION.
 
28            BUT WHAT IS INTERESTING ABOUT MARCH 5, 1995,
			
			

page 985
 
 
 
 1  EXHIBIT 41, IS MRS. FURR STATES: “MR. TAYLOR REPORTED THAT
 
 2  THE TENTH INTERNATIONAL REVISIONIST CONFERENCE HELD IN
 
 3  WASHINGTON D.C WAS A GRAND SUCCESS."
 
 4            MR. TAYLOR WASN'T PRESENT AT ANY SUCH MEETING.
 
 5  THIS IS A PALPABLE FRAUD, YOUR HONOR.
 
 6            AND OF COURSE, EXHIBIT 42 IS A MEETING OCCURRING
 
 7  SIMULTANEOUSLY.  AND MR. WAIER THIS MORNING SAID THERE'S
 
 8  NOTHING UNUSUAL ABOUT THAT THEY HAD TWO MEETINGS.  WHAT IS
 
 9  INTERESTING, IF YOU READ MR. FURR’s MINUTES, EXHIBIT 42, HE
 
10  SAYS THAT — LET ME SEE HERE, MR. KERR WAS PRESENT.
 
11  HOWEVER, MR. TAYLOR IS NOT.  THEY CAN'T SEEM TO GET WHO IS
 
12  PRESENT; WHO ISN'T; WHO THE DIRECTORS ARE; WHO AREN'T.  VERY
 
13  ODD.
 
14            NOW EXHIBIT 46, YOUR HONOR, IS THE ONE WHERE THE
 
15  $7,500,000 SOME COME INTO PLAY.  WHAT IS INTERESTING ABOUT
 
16  EXHIBIT 46, WHEN YOU TAKE THIS TO LOOK AT IT, IS THE
 
17  $7,585,179, WHICH HAS BEEN TRANSFERRED TO THE LEGION AS OF
 
18  JUNE 5, 1991, DOESN'T INCLUDE THE GEMS.
 
19            IT SAYS THE TOP OF PAGE 3:  “ON YOUR INSTRUCTIONS,
 
20  MY FIRM HAS NO PART TO PLAY IN THE REALIZATION OF THE GEMS,
 
21  AND I REFER YOU TO PARAGRAPH NUMBER 5 OF BRIAN PALMER’s FAX
 
22  TO YOU OF APRIL 5, 1991."
 
23            NOW I DON'T WANT TO BE NITPICKING.  I DON'T WANT
 
24  TO BELABOR TINY THINGS LIKE MISSING GEMS.  YOU KNOW, THEY'RE
 
25  NOT PART OF THIS $7,585,179.60.  I KNOW MR. CARTO DID HIS
 
26  BEST TO PROVIDE A COMPLETE ACCOUNTING.  I WISH HE WOULD HAVE
 
27  MENTIONED THE VALUE OF THE GEMS AND WHAT HAPPENED TO THEM.
 
28  I'M SURE IT’s AN OVERSIGHT.  THERE’s NO EVIDENCE BEFORE THE
			
			

page 986
 
 
 
 1  COURT WHAT THE VALUE WAS.
 
 2            HAS THE COURT SEEN MARATHON MAN?  IT MIGHT BE
 
 3  INTERESTING TO RENT THE FILM AND LOOK AT IT.  IT STRIKINGLY
 
 4  PARALLELS EXHIBIT 49.  FASCINATING.
 
 5            EXHIBIT 49, YOUR HONOR, IS A POWER OF ATTORNEY
 
 6  DATED DECEMBER 9, 1992.  NOW THIS IS ALMOST 10 MONTHS AFTER
 
 7  THE LEGION HAS RELINQUISHED ITS INTEREST TO WILLIS CARTO.
 
 8  AND IT STATES AS FOLLOWS:
 
 9            “THE PURPOSE OF THE MEETING WAS TO DISCUSS THE
 
10  STATUS OF THE ESTATE OF MISS JEAN FARREL.  THE SECRETARY
 
11  HAVE REPORTED THAT THE OFFICIALS IN SWITZERLAND REQUIRE A
 
12  NEW POWER OF ATTORNEY FROM MR. HENRY J. FISCHER IN ORDER FOR
 
13  HIM TO ACT FOR THE CORPORATION IN THIS MATTER."
 
14            VERY STRANGE.  IF ANYTHING HAS BEEN, WHY IS THE
 
15  POWER OF ATTORNEY TO HENRY FISCHER?  WHAT IS GOING ON HERE?
 
16            WE KNOW, OF COURSE, THAT AS OF MARCH 2, 1993,
 
17  EXHIBIT 51, MR. KERR IS STILL VICE-CHAIRMAN AND DIRECTOR.
 
18  MR. TAYLOR IS A DIRECTOR.
 
19            THERE’s NO QUESTION THAT EXHIBIT 59 IS A
 
20  RESIGNATION OF THE FURRS.  THEY RESIGNED SEPTEMBER 16, 1996
 
21  FOLLOWED BY WILLIS Carto’s LETTER OF SEPTEMBER 21, 1993 IN
 
22  WHICH HE INCLUDES A BLANK MINUTE OF BOARD OF DIRECTORS
 
23  RESCINDING THE RESIGNATION.  AND THEN LOW AND BEHOLD
 
24  EXHIBIT 60 IS BACK-DATED MINUTES, DATED SEPTEMBER 16, 1993,
 
25  SIGNED BY LEWIS AND LAVONNE FURR AND STATING THAT
 
26  MR. KERR — MR. KERR IS PRESENT BY TELEPHONE.
 
27            IF THIS CASE IS ABOUT ANYTHING, YOUR HONOR, IT'S
 
28  ABOUT A COMPLETE DISREGARD FOR THE LAW.  MR. CARTO WITH OR
			
			

page 987
 
 
 
 1  WITHOUT THE INTENTIONAL COMPLICITY OF MRS. AND MRS. FURR,
 
 2  THE ELDERLY COUPLE, HAS USED THEM AND ABUSED THEM FOR HIS
 
 3  OWN PURPOSES.  TO MR. CARTO A CORPORATION IS NOTHING BUT A
 
 4  SHIRT HE USED WHEN IT SUITS HIS PURPOSES AND TAKES OFF WHEN
 
 5  IT DOESN'T.
 
 6            THIS GETS US TO ANOTHER INTERESTING ISSUE, THE
 
 7  ISSUE OF THE INTENT OF JEAN FARREL.  MR. WAIER SAID AT LEAST
 
 8  A DOZEN TIMES JEAN FARREL’s INTENT HAS BEEN FULFILLED.  I
 
 9  SUBMIT THAT JEAN FARREL’s INTENT WAS NOT FULFILLED BY THE
 
10  MONEY BEING COMMINGLED WITH LIBERTY LOBBY FUNDS AND THAT
 
11  BEING USED TO PREPARE THE STOCK OPTION FOR THE SALE OF
 
12  STOCK.
 
13            MR. CARTO TESTIFIED THEY COULDN'T HAVE HIS NAME
 
14  ASSOCIATED WITH THE LEGION.  IT WAS TOO EMBARRASSING FOR HIS
 
15  LEGITIMATE ACTIVITY WITH LIBERTY LOBBY.  LIBERTY LOBBY,
 
16  AFTER ALL, IS RESPECTABLE, CANNOT BE INVOLVED IN ANYTHING AS
 
17  SENSITIVE SHALL WE SAY AS REVISIONISM.  NO.  HE HAD TO
 
18  HIDE — HIDE ALL THAT BEHIND THE CORPORATE SHELL, BEHIND THE
 
19  FACADE.  BUT, YOUR HONOR, JEAN FARREL HAD NO SUCH SCRUPLES.
 
20  SHE SIMPLY DIDN'T.  JEAN FARREL KNEW WHAT SHE WANTED.  SHE
 
21  WAS A VERY STUBBORN LADY, ECCENTRIC.  THE WILL IS A KICK.  I
 
22  DON'T KNOW IF YOUR HONOR HAS READ THE WILL.
 
23       THE COURT:  YES, ABOUT SOMEBODY WATCHING THE BODY FOR
 
24  FIVE DAYS.
 
25       MR. BEUGELMANS:  FOR FIVE DAYS.  SHE KNEW WHAT SHE
 
26  WANTED WAS FOR THE MONEY TO GO TO THE LEGION AND THE I.H.R.
 
27  FOR THE PURPOSE OF REVISIONISM.  EVERY LETTER THAT'S
 
28  INTRODUCED BY THE DEFENSE CONCERNING HER INTENT IS EITHER
			
			

page 988
 
 
 
 1  SILENT OR TALKS ABOUT REVISIONISM.  IT WAS HER BUGABOO.  SHE
 
 2  WAS CRAZY ABOUT REVISIONISM.  YOU AND I MAY NOT LIKE IT, BUT
 
 3  THAT’s WHAT SHE INTENDED.  SHE INTENDED THE MONEY TO GO FOR
 
 4  REVISIONISM, NOT FOR SOME RADIO SHOW ABOUT GARDENING AND
 
 5  MECHANICS OR ANYTHING ELSE.  REVISIONISM WAS HER THING.
 
 6            YOUR HONOR, PLEASE READ THE LETTERS.  READ JEAN
 
 7  FARREL’s LETTER.  THEY'RE INSTRUCTIVE.
 
 8            I DON'T BELIEVE AS A MATTER OF LAW JEAN FARREL'S
 
 9  INTENT MATTERS ONE WIT; BUT NONETHELESS, IF COUNSEL WANTS TO
 
10  INJECT THE ISSUE OF INTENT IN THIS CASE, THEN I BELIEVE THAT
 
11  THAT CUTS AGAINST THE ARGUMENT, THE ENTIRE EDIFICE, WHICH
 
12  THEY CONSTRUCTED THAT THE MONEY WENT TO THE SAME PURPOSE.
 
13  IT’s NOT THE SAME PURPOSE.
 
14            LIBERTY LOBBY WITH ITS TABLOID POLITICAL USE PAPER
 
15  SPOTLIGHT ADDRESSES ONE AUDIENCE WHERE THE I.H.R. WITH THE
 
16  PUBLICATIONS HAS A COMPLETELY DIFFERENT PURPOSE, ONE WHICH
 
17  WE MAY OR MAY NOT LIKE, BUT IT IS WHAT IT IS.  IT’s WHAT
 
18  JEAN FARREL WANTED.
 
19            ON THE ISSUE OF STATUTE OF LIMITATIONS, YOUR
 
20  HONOR, COUNSEL HAS MADE A NUMBER OF REPRESENTATIONS ABOUT
 
21  THE KNOWLEDGE TO THE FURRS.  THAT THEY HAVE IMPUTED
 
22  KNOWLEDGE.  THAT ISN'T JUST THE KNOWLEDGE TO THE FURRS, IT'S
 
23  KNOWLEDGE TO THE ENTIRE BOARD OF DIRECTORS THAT MATTERS.
 
24  BUT WHAT IS REALLY IMPORTANT WHEN WE TALK ABOUT THE STATUTE
 
25  OF LIMITATION WITH A NONPROFIT CORPORATION IS THE ISSUE OF
 
26  CORPORATE DOMINATION BY AN ILLEGAL BOARD.  IT’s CLEAR, YOUR
 
27  HONOR, THAT SO LONG AS A BOARD OF DIRECTORS IS DOMINATED BY
 
28  DIRECTORS WHO ARE NOT FURTHERING ITS PURPOSE AND NOT OBEYING
			
			

page 989
 
 
 
 1  CORPORATE MANDATES, NOT FOLLOWING THE LAW BUT SIMPLY MAKING
 
 2  DECISIONS WITH COMPLETE — WITHOUT ANY REGARD AT ALL TO
 
 3  DULY-CONSTITUTED MEETINGS, WITH CONSULTING THEIR DIRECTORS,
 
 4  THE STATUTE OF LIMITATION IS TOLLED.  REID V. ROBINSON
 
 5  (1923) 64 CAL. APP. 46; SAN LEANDRO CANNING COMPANY V.
 
 6  PERILLO (1931), 211 CAL. 4TH 482.
 
 7            MR. WAIER STATED THERE’s KNOWLEDGE TO THE
 
 8  ATTORNEYS.  IT — REALLY IT’s IRRELEVANT THAT THERE WAS
 
 9  KNOWLEDGE TO THE ATTORNEYS.  THE QUESTION IS WAS THE
 
10  CORPORATION DOMINATED ILLEGALLY BY A BOARD THAT WAS
 
11  FOLLOWING THE LAW OR NOT.  EVEN KNOWLEDGE TO THE ATTORNEYS,
 
12  YOUR HONOR, IS NOT RELEVANT.
 
13            CITE THE CASE OF FOORMAN, F-O-O-R-M-A-N, V. MYERS,
 
14  M-Y-E-R-S, 1934 — THIS IS 37 P.2D 469 — WHERE THE COURT
 
15  STATED:  “AN ATTORNEY, WHO IS EMPLOYED ONLY FOR THE SPECIAL
 
16  PURPOSES OF BRINGING A SUIT IS NOT BOUND TO DISCLOSE HIS
 
17  PRINCIPAL, KNOWLEDGE OF FACTS WHICH ARE BEYOND THE SCOPE OF
 
18  HIS EMPLOYMENT AND ARE KNOWN TO THE PARTIES CONCERNED TO BE
 
19  WITHIN THE AUTHORITY OF INDEPENDENT AGENTS OF THE
 
20  PRINCIPAL."
 
21            AND WHAT MR. CARTO WAS AT ALL TIMES AND HELD OUT
 
22  WAS AN INDEPENDENT AGENT.  HE DEALT WITH THE ATTORNEYS.
 
23            YOUR HONOR, STATEMENTS WERE MADE ABOUT NECA, HOW
 
24  NECA DIDN'T EXIST, HOW NECA WAS SIMPLY SOME STRONG WIND.  IF
 
25  YOU LOOK AT EXHIBIT 183, THERE’s SOME INTERESTING RESPONSES
 
26  TO INTERROGATORIES.  I WILL READ A FEW TO YOU, YOUR HONOR.
 
27  THESE ARE VERIFIED BY WILLIS A. CARTO AND VERIFIED IN THE
 
28  PRESENCE OF A NOTARY PUBLIC.
			
			

page 990
 
 
 
 1            I'LL QUOTE SOME.  “TOM MARCELLUS HAS KNOWLEDGE OF
 
 2  THE GIFT OF NECA CORPORATION STOCK TO THE LEGION AS
 
 3  EVIDENCED BY HIS PERSONAL CONTACT WITH HER AT THE TIME SHE
 
 4  VISITED MR. CARTO, AS WELL AS THROUGH CORRESPONDENCE.
 
 5  MR. EDWARD J. COUGHLIN WAS HIRED BY JEAN FARREL, E., TO SET
 
 6  UP NECA CORPORATION AS A MEANS TO TRANSMIT OR TRANSFER HER
 
 7  PROPERTY FROM THE PERSONAL OWNERSHIP TO OWNERSHIP OF THE
 
 8  LEGION.  THE LEGION HAS LEGAL OWNERSHIP OF ALL NECA
 
 9  CORPORATION SHARES."
 
10            “11(A):  LITIGATION AT PRESENT IN SINGAPORE WITH
 
11  O.C.B.C. BANK AND SITUATION SIMILAR IN ALL RESPECTS TO
 
12  HENDERSONVILLE LITIGATION.  LONDON” --
 
13         (THE REPORTER ASKED MR. BEUGELMANS TO REPEAT.)
 
14       MR. BEUGELMANS:  “LONDON WHERE SHARES REMAIN IN BOX."
 
15       THE COURT:  I'M SORRY.
 
16       MR. BEUGELMANS:  IN THE BOX IN HERFORD, GERMANY.
 
17       THE COURT:  I DIDN'T UNDERSTAND WHAT YOU SAID.  MAYBE
 
18  GO REAL SLOW AND SPELL IT OUT.  I DIDN'T GET IT.
 
19       MR. BEUGELMANS:  RATHER THAN — IT’s 11(A) OF THE
 
20  VERIFIED RESPONSE TO INTERROGATORIES STATE:
 
21            “THAT ALL LITIGATION WAS THE SAME AS THE NORTH
 
22  CAROLINA LITIGATION."
 
23            AND LASTLY, MR. CARTO STATED THE LEGION CLAIMS
 
24  OWNERSHIP OF NECA BY EVERY VIRTUE OF MISS FARREL’s CLEAR AND
 
25  STATED INTENT.  HER CLEAR AND STATED INTENT HAD SHE INTENDED
 
26  TO LEAVE MONEY TO WILLIS CARTO FOR HIS PERSONAL USE OR
 
27  DISCRETION, SHE HE WOULD HAVE CLEARLY HAVE STATED THE SAME.
 
28  SHE TRUSTED WILLIS CARTO TO DO WHAT SHE WANTED WITH THE
			
			

page 991
 
 
 
 1  ASSETS.  TRANSMIT THEM TO THE LEGION.
 
 2            ALSO, ONE OF THOSE STATE THAT THE KEYS WERE LEFT
 
 3  IN MR. Carto’s POSSESSION FOR THE LEGION.  IT’s IN HIS STACK
 
 4  OF PAPERS.
 
 5            ON THE ISSUE OF CORPORATE OPPORTUNITY, YOUR HONOR,
 
 6  IF THE LEGION HAD NO ASSETS IN 1985, IT’s BECAUSE THEY WERE
 
 7  DRAINED AWAY AT WILLIS Carto’s INSTRUCTIONS TO ACCOUNT AT
 
 8  F.D.F.A.
 
 9            MR. MARCELLUS TESTIFIED, AND IT WAS UNREBUTTED,
 
10  THAT IN 3 MONTHS 1985 THE LEGION RAISED $125,000, AND THAT
 
11  THE MONEY WAS DEPOSITED INTO F.D.F.A. ACCOUNTS AT MR. WILLIS
 
12  Carto’s SPECIFIC INSTRUCTION.
 
13            AS A MATTER OF FACT, THE ONLY MENTION OF F.D.F.A.
 
14  IN ANY OF JEAN FARREL’s CORRESPONDENCE IS THE LETTER, WHICH
 
15  SHE CONFIRMS GIFTS FOR THE LEGION SHOULD BE MADE PAYABLE TO
 
16  F.D.F.A. ACCOUNT.
 
17            MR. LANE IN HIS CLOSING STATEMENT DIDN'T SAY A LOT
 
18  THAT WAS INTERESTING EXCEPT HE MADE A BIG DEAL ABOUT THE
 
19  FACT THAT THE FURRS WERE QUOTE THREATENED, AND THAT’s WHY
 
20  THEY RESIGNED.  WELL, YOUR HONOR, JUDGE POLIS SPECIFICALLY
 
21  FOUND THEY WERE NOT.  THAT THE RESIGNATION WAS VOLUNTARY.
 
22            I WOULD LIKE MR. CARTO TO THINK ABOUT SOMETHING --
 
23  ALL OF US TO THINK ABOUT SOMETHING.  IN FACT, THE LETTERS
 
24  THAT WERE SENT BY STAFF, BY MR. MARCELLUS, MR. WEBER AND
 
25  RAVEN TO MR. AND MRS. FURR IN JULY, AUGUST AND SEPTEMBER OF
 
26  1993 WERE NOT THREATS IN LIGHT OF WHAT HAS HAPPENED TO THE
 
27  PEOPLE SINCE THEN.  THEY WERE PROPHECIES, YOUR HONOR.
 
28            I'M GOING TO GO THROUGH MY NOTES.  I DON'T KNOW IF
			
			

page 992
 
 
 
 1  THERE’s ANYTHING TO RESPOND.  THE LAW CITED BY MR. WAIER ON
 
 2  SELF-DEALING IS INAPPLICABLE.  THE PLAINTIFFS HAVEN'T SUED
 
 3  FOR SELF-DEALING BUT FOR GROSS NEGLIGENCE AND FOR
 
 4  CONVERSION.
 
 5            ON THE ISSUE OF CONVERSION, I THINK I WOULD LIKE
 
 6  TO BRIEFLY POINT OUT, YOUR HONOR, TO WITKIN, NINTH EDITION,
 
 7  TORTS SECTION 613.
 
 8       THE COURT:  GO OFF THE RECORD.  DID YOU WANT TO GET
 
 9  DONE BY NOON OR NOT?
 
10       MR. BEUGELMANS:  I COULD, YOUR HONOR.  I PROBABLY
 
11  COULD.
 
12       THE COURT:  WELL, WE WANT TO STOP IN 3 MINUTES.
 
13                  (OFF-THE-RECORD DISCUSSION.)
 
14       THE COURT:  ON THE RECORD.  I HAD A FEW QUESTIONS FOR
 
15  YOU.  NUMBER ONE, DOES THE CAUSE OF ACTION NUMBER SIX APPLY
 
16  HERE?  IS THAT A CAUSE OF ACTION OR DOES THAT SIMPLY GIVE
 
17  YOU THE RIGHT TO SEEK AN INJUNCTION?  WHAT IS IT YOU ARE
 
18  SEEKING AN INJUNCTION FOR, ASSUMING YOU HAVE THE RIGHT?
 
19            WHAT DID FISCHER DO WRONG?
 
20            YOU ARE ASKING FOR AN ACCOUNTING.  ARE YOU ASKING
 
21  FOR AN ACCOUNTING FOR THE GEMS OR NOT?  SOME EVIDENCE THAT
 
22  THERE ARE UNCUT DIAMONDS AROUND HERE.  AND WHAT ARE YOU
 
23  ASKING AN ACCOUNTING FOR?
 
24            AND ALSO, DO YOU SEE ANY PROBLEM WITH THE IDEA
 
25  THAT IF THERE IS A CONVERSION HERE THAT LIBERTY LOBBY
 
26  CONVERTED ONE AMOUNT AND MR. CARTO CONVERTED ANOTHER AMOUNT,
 
27  NAMELY, IF I GO TO 208, WHICH WAS PREPARED BY MR. CARTO, HE
 
28  SAYS LIBERTY LOBBY HAS 2.6 MILLION.  YOUR ARGUMENT, OF
			
			

page 993
 
 
 
 1  COURSE, IS THAT MR. CARTO HAS CONVERTED A LOT MORE THAN
 
 2  THAT.  EXACTLY WHAT AMOUNT I DON'T KNOW THAT YOU ARE
 
 3  SEEKING.  I KNOW IT FROM THE COMPLAINT WHAT YOU ARE
 
 4  SEEKING.  AFTER ALL THE EVIDENCE, I WONDER WHAT AMOUNT, AND
 
 5  IF YOU THINK THERE ARE DEDUCTIONS, FOR EXAMPLE, FOR
 
 6  OBTAINING THE FARREL MONEY.
 
 7            THOSE ARE SOME QUESTIONS I HAD.  I DON'T KNOW IF
 
 8  YOU CAN ANSWER THEM OR IF YOU WANT TO.  I DON'T KNOW IF YOU
 
 9  WANT TO DO IT WITHIN THE NEXT 10 MINUTES.
 
10       MR. BEUGELMANS:  YOUR HONOR, IF I COULD HAVE THE LUNCH
 
11  RECESS, I'LL RESEARCH THE POINTS AND TRY TO CONCLUDE BRIEFLY
 
12  AFTER LUNCH, NOT GO OVER MATERIAL --
 
13       THE COURT:  YOU MIGHT LOOK AT C.C.P. 425.15 AND WAS IT
 
14  COMPLIED WITH?  IF SO, HOW.  IF NOT, DOES IT MAKE A
 
15  DIFFERENCE?  ALL RIGHT.  I THINK WE'LL TAKE A BREAK THEN.
 
16  SEE YOU AT 1:30.
 
17
 
18                   (PROCEEDINGS RECESSED.)
 
19
 
20       THE COURT:  GO AHEAD.
 
21       MR. BEUGELMANS:  THANK YOU.  YOUR HONOR, BEFORE LUNCH
 
22  THE COURT ADDRESSED SEVERAL QUESTIONS TO COUNSEL.  I WOULD
 
23  LIKE TO ANSWER ALL WITH THE EXCEPTION OF THE QUESTION OF THE
 
24  INJUNCTION I'LL TOUCH ON ON THE VERY LAST.
 
25            THE FIRST QUESTION THE COURT ASKED WAS CONCERNING
 
26  THE SIXTH CAUSE OF ACTION, WHICH CITES TO CORPORATIONS CODE
 
27  SECTION 6215.  THERE WAS A TYPO IN THE COMPLAINT.  SAID
 
28  CIVIL CODE 6215.  WHAT 6215 SAYS IS THAT OFFICERS AND
			
			

page 994
 
 
 
 1  DIRECTORS WHO CAUSE FALSE MINUTES OR RECORDS TO BE
 
 2  PREPARED --
 
 3       MR. WAIER:  OBJECT.  YOU AMENDED THAT.  IT DOES NOT
 
 4  STATE THAT.  YOU AMENDED IT TO SAY CORPORATIONS CODE 5214
 
 5  PURSUANT TO THE AMENDMENT OF COUNSEL.  NOW HE’s GOING BACK
 
 6  AND SAYING SOMETHING ELSE TO THE SIXTH CAUSE OF ACTION.
 
 7       THE COURT:  I THOUGHT IT WAS IN THE 5 SECTIONS.
 
 8       MR. WAIER:  EXACTLY.
 
 9       MR. BEUGELMANS:  WHAT THE CAUSE OF ACTION IS FALSIFIED
 
10  RECORDS OF THE CORPORATION.  AND BASICALLY UNDER 6215 ANY
 
11  OFFICER OR DIRECTOR WHO IS RESPONSIBLE OR PARTICIPATES IN
 
12  FALSIFYING COURT RECORDS — CORPORATION RECORDS, IS JOINTLY
 
13  AND SEVERALLY LIABLE.  CALIFORNIA AND A NOTICED PLEADINGS
 
14  CASE — WE DON'T HAVE TO QUOTE THE CORRECT CODE SECTION.
 
15            THE SIXTH CAUSE OF ACTION IS PRETTY STRAIGHT
 
16  FORWARD.  THEY WERE FALSIFIED DOCUMENTS OF THE CORPORATION.
 
17  IN FACT, WE HAVE SHOWN THAT TO BE TRUE.  THE MINUTES OF
 
18  MARCH 5, 1991 FALSIFIED AS OF THE SUBSEQUENT PAYMENT.
 
19  EXHIBIT 60 --
 
20       THE COURT:  WHAT SECTION ARE WE USING FOR CAUSE OF
 
21  ACTION NUMBER SIX?
 
22       MR. BEUGELMANS:  6215.  CORPORATIONS CODE SECTION
 
23  6215.  THE SECOND POINT WAS --
 
24       MR. WAIER:  OBJECT AT THIS POINT.  THAT’s NOT THE CAUSE
 
25  OF ACTION.  THAT’s BEEN AMENDED.
 
26       THE COURT:  WHAT CAUSE OF ACTION — WHAT WAS THE NUMBER
 
27  THAT WAS AMENDED?
 
28       MR. WAIER:  SIXTH.
			
			

page 995
 
 
 
 1       MR. WAIER:  5142, YOUR HONOR.
 
 2       THE COURT:  THAT’s WHAT I THOUGHT.  GO AHEAD.  I
 
 3  AMENDED IT TO 5142, AS I REMEMBER.  THE MINUTES SHOW THAT
 
 4  IT’s 5142 OF THE CORPORATIONS CODE.  THAT’s WHAT I REMEMBER
 
 5  TOO.
 
 6       MR. BEUGELMANS:  YOUR HONOR, I QUICKLY CHECKED THE
 
 7  JUDGES BENCHBOOK, WHICH I'M SURE YOUR HONOR HAS IN THE
 
 8  CHAMBERS, AND THE COURT HAS AUTHORITY TO AT ANY TIME BEFORE
 
 9  THE CONCLUSION OF AN ACTION BEFORE IT GOES TO JUDGMENT TO
 
10  CONFORM ACCORDING TO PROOF OF FACTS SHOWN AT TRIAL.
 
11            BUT ANY EVENT, WHAT IS ALLEGED IN THE SIXTH CAUSE
 
12  OF ACTION IS FALSIFIED RECORDS.  THAT’s A VIOLATION OF THE
 
13  CORPORATIONS CODE.  IT DOES MAKE THOSE WHO FALSIFY CORPORATE
 
14  RECORDS JOINTLY AND SEVERALLY LIABLE FOR ANY HARM TO THE
 
15  CORPORATION.
 
16            THE SECOND QUESTION, YOUR HONOR --
 
17       MR. WAIER:  YOUR HONOR, AGAIN, THAT’s BEYOND THE SCOPE
 
18  OF MY ARGUMENT.  HE’s NOW GOING BEYOND THAT, AND THAT IS NOT
 
19  THE POINT OF REBUTTAL.
 
20       THE COURT:  WELL, MAY OR MAY NOT BE THE POINT OF
 
21  REBUTTAL.  IF I ASK HIM A QUESTION, I THINK I CAN GET AN
 
22  ANSWER.
 
23            VERY WELL, LET’s GO ON TO SOME OF THE OTHER
 
24  THINGS.
 
25       MR. BEUGELMANS:  THANK YOU.  YOUR HONOR INQUIRED AS TO
 
26  MR. FISCHER’s LIABILITY, IF ANY.  YOUR HONOR, AGAIN WE HAVE
 
27  TO REMEMBER THAT MR. FISCHER WAS AN AGENT FOR THE
 
28  CORPORATION BEGINNING 1985 AND CONTINUES TO BE AN AGENT AS
			
			

page 996
 
 
 
 1  FAR AS THE RECORD IS CONCERNED.  THE LAST POWER OF ATTORNEY
 
 2  WAS GRANTED IN 1992.  THAT’s EXHIBIT 49.
 
 3            MR. FISCHER HAD RESPONSIBILITY SINCE THE INCEPTION
 
 4  AS A SPECIAL AGENT TO RECOVER THE FUNDS OF NECA FOR THE
 
 5  BENEFIT OF THE PLAINTIFF.  HE WAS A SPECIAL AGENT FOR THAT
 
 6  PURPOSE AND AS SUCH HE HAS A DUTY TO ACCOUNT AND A FIDUCIARY
 
 7  DUTY TO SHOW THAT THE PROCEEDS HAVE BEEN SPENT AS INTENDED
 
 8  BY THE CORPORATION.
 
 9            ALSO, MR. FISCHER IS A SIGNATORY ON VIBET,
 
10  ACCORDING TO MR. CARTO, AND VIBET IS THE VEHICLE PURSUANT TO
 
11  WHICH THE ENTIRE SCAM HAS BEEN CARRIED OUT.
 
12            LASTLY, MR. FISCHER HAS PROVIDED NO ACCOUNTING,
 
13  BUT WE KNOW, ACCORDING TO EXHIBIT NUMBER 208, MR. FISCHER
 
14  RECEIVED $300,000 FROM THE SETTLEMENT.
 
15            THE THIRD QUESTION, YOUR HONOR, WAS WHETHER OR NOT
 
16  THE LIABILITY OF LIBERTY LOBBY IS CONGRUENT AND PARALLEL TO
 
17  THE LIABILITY OF WILLIS CARTO AS AN INDIVIDUAL.
 
18            YOUR HONOR, I DON'T WANT TO GO OVER ALL OF THE LAW
 
19  THAT I CITED TO THE COURT THE OTHER DAY IN MY CLOSING, BUT I
 
20  WOULD REMIND YOU, YOUR HONOR, OF THE LAW THAT I DID CITE
 
21  FROM WITKIN CONCERNING THE JOINT AND SEVERAL LIABILITY OF
 
22  THOSE WHO PARTICIPATE IN AN UNLAWFUL ACT.  THIS WAS AN
 
23  UNLAWFUL CONDUCT.
 
24            THE NEXT QUESTION WAS HOW MUCH TO DEDUCT FROM THE
 
25  $7,500,000.  LEAVING ASIDE THE QUESTION OF THE JEWELS, YOUR
 
26  HONOR, MR. CARTO TESTIFIED AT TRIAL ABOUT $400,000 WAS SPENT
 
27  IN ATTORNEY’s FEES RECOVERING THE ESTATE ASSETS.  ALTHOUGH
 
28  THERE WAS NO SPECIFIC ACCOUNTING OF THAT AMOUNT, WE'LL ADOPT
			
			

page 997
 
 
 
 1  IT FOR THE PURPOSES OF ARGUMENT.
 
 2            ALSO, YOUR HONOR, IT WAS TESTIFIED BY
 
 3  MR. MARCELLUS THAT THERE WAS A LOAN ON THE BOOKS OF THE
 
 4  LEGION FOR $250,000, AND IT WAS CARRIED ON THE LEGION'S
 
 5  BOOKS AS A LOAN FROM VIBET TO THE LEGION.  WE DON'T KNOW,
 
 6  YOUR HONOR, WHETHER OR NOT THE MONEY WAS TRANSFERRED TO THE
 
 7  LEGION; BUT FOR THE PURPOSES OF ARGUMENT WE'LL SAY THAT
 
 8  $250,000 CAN BE CREDITED, SINCE I ASSUME THAT THE COURT WILL
 
 9  BE GIVING A JUDGMENT AGAINST VIBET IN ANY EVENT SINCE THEY
 
10  WERE THE DEFAULTING PARTY.
 
11            OVER AND ABOVE THAT, YOUR HONOR, IT APPEARS THAT
 
12  MR. MARCELLUS’s SALARY WAS PAID FOR A PERIOD OF
 
13  APPROXIMATELY A YEAR OR MAYBE A YEAR AND A HALF, AND ALSO
 
14  THAT THERE WAS SOME ADVANCES TO MR. MARCELLUS.  $70,000,
 
15  YOUR HONOR, MIGHT BE FAIR.  I THINK THAT’s MORE THAN
 
16  GENEROUS.
 
17            SO IN TOTAL, I WOULD SAY IF THE COURT WERE TO
 
18  DEDUCT $720,000 FROM THE GROSS RECOVERY, EXCLUDING THE
 
19  DIAMONDS, THAT MIGHT BE A PRETTY FAIR APPROXIMATION.
 
20            AGAIN, YOUR HONOR, AS YOU WILL RECALL A PARTY'S
 
21  OWN CONDUCT PREVENTED THE ASCERTAINMENT OF DAMAGES.  THE
 
22  PARTY IS ESTOPPED, AND I WILL GIVE THAT CITE AGAIN.  IT’s AN
 
23  IMPORTANT CASE, YOUR HONOR.
 
24            IT’s “ONE WHOSE WRONGFUL CONDUCT RENDERED
 
25  DIFFICULT THE ASCERTAINMENT OF DAMAGES CANNOT ESCAPE
 
26  LIABILITY BECAUSE THE DAMAGE CANNOT BE MEASURED WITH
 
27  EXACTNESS.”  THAT’s AMERICAN LOAN CORPORATION V. CALIFORNIA
 
28  COMMERCIAL CORPORATION (1963), 211 CAL. APP. 2ND, 515.
			
			

page 998
 
 
 
 1            YOUR HONOR, ALSO, AS TO THE EFFECT, IF ANY, OF
 
 2  C.C.P SECTION 425.15 IN THE ACTION, IT’s OUR POSITION, YOUR
 
 3  HONOR, THAT C.C.P. SECTION 425.15 IS INAPPLICABLE.  IF YOU
 
 4  LOOK AT THE LANGUAGE, IT STATES:
 
 5            “NO CAUSE OF ACTION AGAINST A PERSON SERVING
 
 6  WITHOUT COMPENSATION AS A DIRECTOR OR OFFICER OF THE
 
 7  NONPROFIT CORPORATION DESCRIBED IN THIS SECTION, ON ACCOUNT
 
 8  OF ANY NEGLIGENT ACT OR OMISSION BY THAT PERSON WITHIN THE
 
 9  SCOPE OF THAT PERSON’s DUTIES AS A DIRECTOR ACTING IN THE
 
10  CAPACITY OF A BOARD MEMBER."
 
11            WHAT HAPPENED HERE IS ANY ACT OR OMISSION OF LEWIS
 
12  OR LAVONNE FURR WERE TAKEN ULTRA VIRES.  THEY ARE NOT TAKING
 
13  AS ACTION A DULY-CONSTITUTED BOARD AT MEETINGS OF THE BOARD
 
14  OF DIRECTORS HELD AS A NONPROFIT CORPORATION LAW.  THEY WERE
 
15  RUBBER STAMPS FOR THE WISHES OF MR. WILLIS CARTO.
 
16            A FEW POINTS BEFORE I CLOSE.  THERE’s BEEN A
 
17  SUGGESTION THAT THE FURRS ARE BASICALLY AN OLD INVALID
 
18  COUPLE WHO WERE USED AS PAWNS BY WILLIS CARTO.  THAT MAY OR
 
19  MAY NOT BE TRUE.  I REMIND THE COURT THAT MR. LEWIS FURR WAS
 
20  A COURT CLERK IN LOUISIANA FOR A PERIOD OF 12 YEARS FROM
 
21  1948 TO 1960.  HE SHOULD HAVE KNOWN BETTER THAN DO WHAT THEY
 
22  DID.  HE SHOULDN'T HAVE FALSIFIED RECORDS, SHOULD NOT HAVE
 
23  PARTICIPATED IN THE SHAMEFUL CONDUCT.
 
24            THERE IS NO CUSTOM AND HABIT EXCEPTION TO THE
 
25  NONPROFIT CORPORATION LAW.  THE MERE FACT THAT LAVONNE FURR
 
26  AND MR. CARTO RAN THIS CORPORATION THE WAY THEY DID FOR MANY
 
27  YEARS DOES NOT RATIFY THE ILLEGALITY OF THE CONDUCT.
 
28            LAVONNE FURR TESTIFIED IN THE DEPOSITION SHE
			
			

page 999
 
 
 
 1  RELIED EXCLUSIVELY ON WILLIS CARTO.  SHE NEVER CONSULTED AN
 
 2  ATTORNEY BUT GOT HER INSTRUCTIONS TO THE CORPORATE
 
 3  FORMALITIES FROM MR. CARTO.
 
 4            DEFENDANT HAS ARGUED SOMEHOW THE PLAINTIFF IS
 
 5  ESTOPPED BECAUSE OF THE LETTER WHICH MR. WEBER WROTE TO
 
 6  MR. GRAY, EXHIBIT 44.  I SAY QUITE THE CONTRARY, OR
 
 7  MR. MARCELLUS WOULD SAY, AU CONTRAIRE.
 
 8            YOUR HONOR, WHAT THAT LETTER SHOWS IS THE GOOD
 
 9  FAITH MEMBERS OF THE STAFF, THEY ARE NOT CHALLENGING
 
10  MR. Carto’s LEGALITY OR ILLEGALLY.  THEY WERE TRYING TO
 
11  ASCERTAIN THE TRUTH.  THEY WERE ACTING IN GOOD FAITH.  IN
 
12  ANY EVENT, AS MR. WAIER STATED REPEATEDLY AND VOCIFEROUSLY,
 
13  IT DOES MATTER THAT MR. WEBER OR MARCELLUS KNEW THEY WERE
 
14  EMPLOYEES.
 
15            AGAIN, YOUR HONOR, CORPORATIONS CODE SECTION 5233
 
16  IS NOT THE BASIS OF PLAINTIFF’s CAUSE OF ACTION.  WE'RE NOT
 
17  ALLEGING THAT THE FURRS HAD GOTTEN THE MONEY ON THEIR OWN
 
18  BEHALF AS INDIVIDUALS.
 
19            IN THAT CONNECTION, YOUR HONOR, BEFORE WE BROKE AT
 
20  NOON I WANT TO BRIEFLY TALK ABOUT CONVERSION.  IF THE COURT
 
21  WILL TAKE A LOOK WHEN THE CASE IS OVER AT WITKIN, NINTH
 
22  EDITION, TORTS SECTION 614 IT SAYS — WITKIN LAYS IT OUT
 
23  CLEARLY WHERE AN AGENT FAILED TO TURN OVER A SUM DEFINITE
 
24  RECEIVED BY HIM FOR PRINCIPAL’s ACCOUNT, CAUSE OF ACTION FOR
 
25  CONVERSION IS PLEADED.  THAT’s SECTION 614.
 
26            THERE’s NO ELEMENT OF THE CAUSE OF ACTION FOR
 
27  CONVERSION THAT THE DEFENDANT ACTUALLY PUT THE MONEY IN HIS
 
28  POCKET.  PROPERTY NEED NOT BE TAKEN, YOUR HONOR.  IT'S
			
			

page 1000
 
 
 
 1  SIMPLY ASSERTING POSSESSION OR CONTROL OVER PROPERTY
 
 2  SUFFICIENT FOR CONVERSION.
 
 3            LIKEWISE, THE REFUSAL TO RETURN PROPERTY ON DEMAND
 
 4  CONSTITUTES CONVERSION.  THE UNAUTHORIZED TRANSFER OF
 
 5  PROPERTY CONSTITUTES CONVERSION.
 
 6            DEFENDANT ARGUED QUITE STRENUOUSLY THAT PLAINTIFF
 
 7  NEVER HAD RIGHT OR TITLE TO THE NECA ASSETS.  OF COURSE,
 
 8  THAT’s CONTRADICTED BY THE COMPLAINT FILED IN NORTH CAROLINA
 
 9  AND SIGNED UNDER PENALTY OF PERJURY IN THE PRESENCE OF A
 
10  NOTARY PUBLIC BY MR. WILLIS CARTO.  BUT I THINK THE
 
11  CONVERSION HAS BEEN AMPLY PROVED BY THE FACTS AS YOUR HONOR
 
12  HEARD THEM IN TESTIMONY IN THIS MATTER.  CONVERSION IS AN
 
13  INTENTIONAL TORT AND ANY PROHIBITION ON CAUSES OF ACTION FOR
 
14  MERE NEGLIGENCE TAKEN BY A DIRECTOR IN GOOD FAITH ARE
 
15  OUTSIDE OF THE CAUSE OF ACTION FOR CONVERSION OF FRAUD.
 
16            CONTRARY TO WHAT MR. WAIER ASSERTED, BIZARRELY THE
 
17  PLAINTIFFS ARE NOT SUING TO RESCIND THE FARREL SETTLEMENT.
 
18  ON THE CONTRARY, THE PLAINTIFFS ARE SUING TO ENFORCE THE
 
19  FARREL SETTLEMENT.  THE FARREL SETTLEMENT WAS A SETTLEMENT
 
20  BETWEEN ALTHAUS AND LEGION PURSUANT TO WHICH LEGION WAS TO
 
21  RECEIVE 45 PERCENT OF THE NET ASSETS, WHICH IT DID.
 
22            THERE’s NO QUESTION THAT THE MONEY WENT TO MAITRE
 
23  ROCHAT AND WAS DISTRIBUTED THEREAFTER TO MAITRE FOETISCH WHO
 
24  PUT THE MONEY IN AN ACCOUNT AT VIBET UNDER THE UMBRELLA OF
 
25  THE BAHAMAS CORPORATION, THE INTERNATIONAL LEGION FOR THE
 
26  SURVIVAL OF FREEDOM.
 
27            MR. WAIER STATED ONLY IF DIRECTORS ARE CAUGHT WITH
 
28  THE HAND IN THE TILL ARE THEY LIABLE.  THAT’s NOT TRUE, YOUR
			
			

page 1001
 
 
 
 1  HONOR.  VERY BRIEFLY THE CORPORATIONS CODE SECTION 4047.5,
 
 2  6215 AND 7231 PUT THAT TO REST.
 
 3            AN ARGUMENT WAS MADE BY MR. WAIER THAT THE
 
 4  SETTLEMENT AND MANDATE SOMEHOW CONSTITUTE A RELEASE OF ALL
 
 5  CLAIMS BETWEEN THE LEGION AND MR. CARTO.  AGAIN, THAT’s A
 
 6  NOVEL ARGUMENT SINCE CARTO MADE HIMSELF A PARTY TO THE
 
 7  SETTLEMENT AND SIGNED ON BEHALF OF HIMSELF OR HAD THE
 
 8  CONTRACT SIGNED OR THE SETTLEMENT SIGNED BY SOMEONE ELSE ON
 
 9  HIS OWN BEHALF.  IT’s A BIZARRE ARGUMENT.  THAT BY DOING SO,
 
10  HE CAUSED THE LEGION TO RELEASE HIM.  IT WAS HIS AGENT.  THE
 
11  LEGION DID NOT PARTICIPATE DIRECTLY.  HE WAS THE AGENT.  HE
 
12  PUT HIS OWN NAME IN THE DOCUMENT, AND THE DOCUMENT WAS
 
13  SIGNED ON HIS BEHALF AND ON BEHALF OF THE LEGION AT THE
 
14  INSTRUCTIONS OF LEWIS CARTO.  HOW THAT CAN CONSTITUTE A
 
15  RELEASE IS JUST ODD.
 
16            ONCE AGAIN THE SEPTEMBER 1985 CONTRACT THAT
 
17  MR. WAIER TALKED ABOUT, THERE IS NO CONTRACT, YOUR HONOR.
 
18  IT’s A UNILATERAL LETTER SENT BY WILLIS CARTO TO LAVONNE
 
19  FURR.  THERE IS NO RESOLUTION OF A PROPERLY CONVENED AND
 
20  CONDUCTED MEETING OF THE BOARD OF DIRECTORS WHICH ENTERS
 
21  INTO SUCH A CONTRACT, EVEN IF SUCH A CONTRACT COULD BE
 
22  ENTERED INTO, WHICH THE PLAINTIFFS DISPUTE.  IN ANY EVENT,
 
23  IF THE LETTER OF MR. CARTO WERE TO CONSTITUTE THE CONTRACT,
 
24  IT’s SO VAGUE AND SUBJECT TO SO MANY DIFFERENT
 
25  INTERPRETATIONS TO BE UNENFORCEABLE AB INITIO.
 
26            MR. WAIER STATED THERE’s NO EVIDENCE THAT IT WENT
 
27  INTO THIS MAN’s POCKET, MEANING WILLIS CARTO MONEY DOESN'T
 
28  HAVE TO GO INTO YOUR POCKET FOR YOU — FOR A PERSON TO BE
			
			

page 1002
 
 
 
 1  FOUND GUILTY OF CONVERSION.
 
 2            MR. WAIER ARGUED AT LENGTH THAT THE CORPORATION
 
 3  HAD CONSTRUCTIVE NOTICE AND THEREFORE IS ESTOPPED FROM
 
 4  BRINGING THE LAWSUIT; BUT, YOUR HONOR, SO LONG AS THE
 
 5  AFFAIRS OF THE CORPORATION ARE DOMINATED BY WILLIS CARTO
 
 6  WITH THE KNOWING OR INDIFFERENT COMPLICITY OF THE FURRS AND
 
 7  DELEGATION OF THE CALIFORNIA CORPORATION, THE STATUTE OF
 
 8  LIMITATION WAS TOLLED.  IT’s NOT UNTIL THE NEW BOARD OF
 
 9  DIRECTORS HAD POWER TO RECTIFY THE MISCONDUCT THAT THE
 
10  STATUTE OF LIMITATIONS BEGAN TO RUN.  THAT WAS IN SEPTEMBER
 
11  1993.  THIS ACTION WAS FILED IN JULY OF 1994.
 
12            MR. WAIER STATES, QUOTE, EVERYBODY AGREES THAT
 
13  LAVONNE HAD OSTENSIBLE AUTHORITY.  NOT SO.  HER ONLY
 
14  AUTHORITY WAS TO ACT AS A MEMBER OF THE BOARD OF DIRECTORS
 
15  AS ONE OF A DULY-CONSTITUTED AND FUNCTIONING BOARD OF
 
16  DIRECTORS.  SHE HAD NO AUTHORITY TO ACT IN CONCERT WITH
 
17  WILLIS CARTO IN COMPLETE DISREGARD OF CORPORATION LAW.  ANY
 
18  SUCH ACTION IS ULTRA VIRES.
 
19            A FEW MORE POINTS AND I'LL REST.  AND MR. WAIER
 
20  IMPLORED THE COURT NOT TO LOOK AT THE MINUTIAE BUT, YOUR
 
21  HONOR, THIS IS A COURT OF LAW.  THIS IS NOT SOME KIND OF A
 
22  SHOW ON TELEVISION.  THE COURT WELL KNOWS THAT THE DEVIL IS
 
23  ALWAYS IN THE DETAILS, YOUR HONOR, AND AS WE SIT HERE TODAY
 
24  AFTER ALL THIS LITIGATION AND THE 8 VOLUMES OF MOTIONS AND
 
25  REFERENCED TO JAMS AND THE APPEALS AND ALL THE OTHER
 
26  NONSENSE THAT’s HAPPENING IN THE CASE, WE STILL DON'T HAVE A
 
27  CLEAR IDEA OF HOW MUCH MONEY WAS RECOVERED AND HOW IT WAS
 
28  SPENT.
			
			

page 1003
 
 
 
 1            IT’s ODD WHEN YOU LOOK AT THE ACCOUNTING, EXHIBIT
 
 2  208, AND THEN YOU LOOK AT MR. HUTZEL’s MEMORANDUM SENT TO
 
 3  MR. CARTO IN 1994.  IT APPEARS FROM MR. Carto’s TESTIMONY
 
 4  FROM THE ACCOUNTING THAT THE MONEY WAS LOANED BY VIBET TO
 
 5  LIBERTY LOBBY AND TO F.D.F.A., AND THAT ALL THIS WAS
 
 6  CONCLUDED BY THE END OF 1993.  AND YET IN MR. HUTZEL'S
 
 7  MEMORANDUM OF 1994 THERE’s A SUGGESTION THAT MILLIONS MORE
 
 8  CAN BE BORROWED.
 
 9            BUT ALSO, YOUR HONOR, TAKE A LOOK AT THAT, AND
 
10  MR. MUSSELMAN, WHAT IS THAT, EXHIBIT 209?  TAKE A LOOK AT
 
11  209 BECAUSE WHAT IT SHOWS HERE IS A SHELL GAME.  THERE ARE
 
12  AT LEAST HALF A DOZEN NONPROFIT AND DIFFERENT ORGANIZATIONS,
 
13  AND MONEY IS TRANSFERRED FROM ONE TO ANOTHER.
 
14            NOW MR. LANE TALKED THIS MORNING ABOUT WASHINGTON,
 
15  D.C. LAW.
 
16       MR. WAIER:  MR. LANE?
 
17       MR. BEUGELMANS:  I'M SORRY, MR. WAIER, AND SO DID
 
18  MR. LANE.  ACTUALLY, I DON'T KNOW HOW THEY CONDUCT THE
 
19  BUSINESS IN WASHINGTON, D.C.  I KNOW WHO WHO THEY ELECTED
 
20  FOR MAYOR, BUT IN CALIFORNIA, IN CALIFORNIA WE HAVE CLEAR
 
21  LAWS, AND WE HAVE A TRADITION OF RESPECTING AND HONORING THE
 
22  LAW, AND THAT WAS NOT DONE IN THIS CASE.
 
23            THE LAST POINT, YOUR HONOR, HAS TO DO WITH A
 
24  STATEMENT MADE BY MR. WAIER, WHICH I FOUND TO BE SHOCKING,
 
25  AND THAT WAS THE FOLLOWING STATEMENT:  ALL THEY HAD WAS THIS
 
26  MAN’s WORD.  IF WILLIS CARTO DIDN'T COOPERATE, THE LEGION
 
27  GOT NOTHING.  AND MR. WAIER SAID THAT MR. CARTO WAS NOT AN
 
28  AGENT BEFOREHAND.
			
			

page 1004
 
 
 
 1            WELL, YOUR HONOR, I BEG TO DIFFER.  AGAIN, YOUR
 
 2  HONOR, PLEASE LOOK AT THE COMPLAINT, THIS EXHIBIT 183.
 
 3  THAT’s NORTH CAROLINA COMPLAINT.  PAGE 11 — I'M SORRY,
 
 4  PAGE 3, PARAGRAPH 11 STATES AS FOLLOWS:
 
 5            “ON THE FIFTH DAY OF APRIL, 1984, JEAN FARREL,
 
 6  E., SURRENDERED THE KEY TO THE SAFETY DEPOSIT BOX AT FIRST
 
 7  UNION NATIONAL BANK TO WILLIS A. CARTO, IN HIS CAPACITY AS
 
 8  AGENT FOR THE LEGION FOR THE SURVIVAL OF THE FREEDOM, INC.,
 
 9  AND INFORMED HIM OF THE METHOD OF ACCESS AS A DEPUTY OF THE
 
10  CORPORATION, AND BY SURRENDERING OF THIS KEY EFFECTED
 
11  DELIVERY OF THE CONTENTS OF THE BOX TO THE PLAINTIFF."
 
12            YOUR HONOR, IF THERE’s ANYONE TO BE ESTOPPED IN
 
13  THE ACTION IT’s WILLIS CARTO AND HIS COHORTS.  THERE’s A
 
14  STRANGE PARALLEL IN THE CASE, YOUR HONOR.  MR. CARTO WAS THE
 
15  FOUNDER OF THE I.H.R., AND THE I.H.R. WAS FOUNDED FOR THE
 
16  PURPOSE OF PROMOTING REVISIONISM.  WE ALL KNOW ABOUT THE
 
17  HOLOCAUST AND THE CLAIMS THAT HAVE BEEN MADE BY REVISIONISTS
 
18  AND THE BANDYING ABOUT OF NUMBERS AS IF IT REALLY MAKES A
 
19  DIFFERENCE WHETHER 3 MILLION OR 6 MILLION OR 2 MILLION OR 1
 
20  MILLION PEOPLE DIED; BUT WHAT WE HAVE IN THIS CASE IS A
 
21  STRANGE PARALLEL WHERE THE NUMBERS DON'T SEEM TO MATTER
 
22  MUCH.  IT’s JUST THE NUMBER OF THE DAY AND THE FACTS OF THE
 
23  DAY.  IT’s REWRITING OF HISTORY.  WHAT MR. CARTO SIGNED AND
 
24  UNDER PENALTY OF PERJURY WHAT HE REPRESENTED TO THE ENTIRE
 
25  WORLD AND THE LEGION, THE MINUTES ALL THE WAY THROUGH
 
26  JANUARY 1991, INCLUDING THE MARCH 5, 1991 MINUTES STATE THAT
 
27  IT WAS THE LEGION THAT WAS TO RECOVER THE ASSETS THAT
 
28  MR. CARTO WAS SECURING.  BUT NOW THERE’s BEEN A STRANGE
			
			

page 1005
 
 
 
 1  ATTEMPT TO REWRITE HISTORY, REDEFINE WHAT REALLY HAPPENED,
 
 2  AND THE COURT SHOULD NOT ALLOW THIS, YOUR HONOR.
 
 3            LASTLY, YOUR HONOR, THE TEMPORARY RESTRAINING
 
 4  ORDER.  THE PLAINTIFF WOULD RESPECTFULLY REQUEST THAT ALL
 
 5  DEFENDANTS AND THEIR AGENTS BE PREVENTED FROM HOLDING
 
 6  THEMSELVES OUT TO BE LEGION FOR THE SURVIVAL OF FREEDOM,
 
 7  INC. OR ENPOWER TO ACT FOR THE LEGION.  IN OTHER WORDS, THAT
 
 8  THEY BE PROHIBITED FROM CLAIMING TO BE DIRECTORS, OFFICERS,
 
 9  INCORPORATORS, SUBSTITUTE INCORPORATORS, MEMBERS, EMPLOYEES
 
10  AGENTS, ATTORNEYS, ETC.
 
11            SECONDLY, THE PLAINTIFFS PRAY FOR A TEMPORARY
 
12  RESTRAINING ORDER AND A PERMANENT INJUNCTION PROHIBITING THE
 
13  REMOVAL OR TRANSFER OR ENCUMBRANCE OF ANY AND ALL ASSETS,
 
14  INCLUDING ANY EQUITABLE INTEREST IN AND POSSESSION OR
 
15  CONTROL OF ANY ASSET OR PROPERTY OF THE LEGION, INCLUDING
 
16  BUT NOT LIMITED TO RECORDS, ACCOUNTS, THE BEARER SHARES OF
 
17  NECA CORPORATION, NECA ASSETS, SHARES OF VIBET, VIBET'S
 
18  ASSETS, SHARES OF THE INTERNATIONAL LEGION FOR THE SURVIVAL
 
19  OF FREEDOM, INC., ITS ASSETS, AND ANY AND ALL OTHER ASSETS
 
20  DERIVED FROM JEAN FARREL-EDISON ESTATE, INCLUDING BUT NOT
 
21  LIMITED TO THE SETTLEMENT OF THE LITIGATION AROUND THE WORLD
 
22  INVOLVING JEAN ALTHAUS AND THE LEGION.
 
23            ALSO, YOUR HONOR, THAT ANY ASSETS RECEIVED FROM
 
24  ROLAND ROCHAT OR HIS — AT BIDDLE AND COMPANY, QUILTER
 
25  GOODISON, THE SWITZERLAND AND NORTH CAROLINA COURTS, AND
 
26  PROCEEDS OF ANY OF THE ABOVE, REGARDLESS OF WHETHER THEY
 
27  CAME THROUGH FOETISCH, VIBET, THE INTERNATIONAL LEGION,
 
28  F.D.F.A., THE DEFENDANTS AND/OR THE BANQUE CONTRADE BE
			
			

page 1006
 
 
 
 1  RESTRAINED, YOUR HONOR AND --
 
 2       MR. WAIER:  I'M GOING TO OBJECT.  YOU CANNOT RESTRAIN
 
 3  ANY PARTY WHO IS NOT MADE A PARTY OF THIS ACTION.
 
 4       THE COURT:  COUNSEL, YOU WILL GET AN — I'LL GIVE YOU
 
 5  AN OPPORTUNITY FINALLY TO RESPOND.  IT’s NICE IF YOU FOLLOW
 
 6  THE INSTRUCTIONS AND LET HIM GIVE THE ARGUMENT.  HE LET YOU
 
 7  GIVE YOUR ARGUMENT.
 
 8       MR. BEUGELMANS:  IT’s NOT F.D.F.A. BE RESTRAINED, BUT
 
 9  ALL THE DEFENDANTS BE RESTRAINED FROM ENCUMBERING, SELLING,
 
10  DIVESTING THEMSELVES OR OTHERWISE SELLING ANY OF THE ASSETS
 
11  THAT CAME FROM THE JEAN FARREL-EDISON ESTATE.
 
12       THE COURT:  WHAT ARE YOU ASKING FOR IN THE FIFTH CAUSE
 
13  OF ACTION, MONEY HAD AND RECEIVED?
 
14       MR. BEUGELMANS:  I BELIEVE THAT WILL BE THE ENTIRE 7.5
 
15  MILLION LESS THE $720,000 THAT THE PLAINTIFF IS CONCEDING
 
16  POSSIBLY WAS SPENT IN GOOD FAITH.
 
17            AND, OF COURSE, WE'RE ASKING FOR AN ACCOUNTING
 
18  WITH RESPECT TO THE DIAMOND.  AT THIS POINT WE HAVE NO
 
19  REASON TO BELIEVE THAT THE DEFENDANTS CAN EVER PROVIDE A
 
20  CREDITABLE ACCOUNTING WITH RESPECT TO THE OTHER ASSETS.
 
21            AND WE WANT A JUDGMENT TO THE ASSETS.  WE WOULD
 
22  WANT AN ACCOUNTING TO THE DIAMONDS.
 
23       THE COURT:  WHAT ABOUT CAUSE OF ACTION NUMBER ONE?  I
 
24  THINK YOU MENTIONED ON FRIDAY THAT IT APPEARS THAT THAT
 
25  ISN'T PROBABLY A CAUSE OF ACTION.  THAT IS A CIVIL
 
26  CONSPIRACY.
 
27       MR. BEUGELMANS:  THERE IS NO CAUSE OF ACTION FOR CIVIL
 
28  CONSPIRACY.  THEY'RE JOINT TORT-FEASORS RESPONSIBLE FOR
			
			

page 1007
 
 
 
 1  WHATEVER DAMAGES ARE CAUSED.
 
 2       THE COURT:  VERY GOOD.  WHAT ABOUT CAUSE OF ACTION
 
 3  NUMBER EIGHT?  WHAT ARE YOU ASKING FOR THERE?  DECLARATORY
 
 4  RELIEF?  ARE YOU ASKING — ASKING ME TO DECLARE RELIEF AS TO
 
 5  WHAT?
 
 6       MR. BEUGELMANS:  I BELIEVE, YOUR HONOR, IT’s THE SAME
 
 7  AS THE INJUNCTION, BASICALLY, THAT THE PROCEEDS FROM THE
 
 8  SETTLEMENT OF THE LITIGATION INVOLVING THE ESTATE OF JEAN
 
 9  FARREL-EDISON ARE RIGHTFULLY THE PROPERTY OF LEGION FOR THE
 
10  SURVIVAL OF FREEDOM, INC., AND THAT WE HAVE NO CONTROL AT
 
11  THIS TIME.
 
12            AS YOU KNOW, YOUR HONOR, THERE WAS TESTIMONY BOTH
 
13  FROM MR. CARTO AND FROM THE FURRS IN THE DEPOSITIONS THAT
 
14  WHATEVER IS STILL IN VIBET OR THE INTERNATIONAL LEGION IS
 
15  THE PROPERTY OF THE LEGION FOR THE SURVIVAL OF THE FREEDOM,
 
16  INC., THE PLAINTIFF IN THIS ACTION.
 
17       THE COURT:  MR. WAIER, I DON'T WANT A COMPLETE
 
18  RENDITION OF THE ARGUMENT AGAIN.
 
19       MR. WAIER:  NO.
 
20       THE COURT:  YOU CAN CERTAINLY ADDRESS YOURSELF TO CAUSE
 
21  OF ACTION NUMBER SIX, BECAUSE THAT DIDN'T COME UP.  AND IF
 
22  YOU LIKE TO YOU CAN ADDRESS YOURSELF TO ANYTHING NEW ON THE
 
23  OTHER CAUSES OF ACTION.
 
24       MR. WAIER:  FIRST OF ALL, AND I APPRECIATE THIS, IF YOU
 
25  TAKE A LOOK AT — I WANT TO TALK ABOUT HENRY FISCHER.  TAKE
 
26  A LOOK AT EXHIBIT 37, WHICH IS THE POWER OF ATTORNEY, WHICH
 
27  COUNSEL RELIES UPON.
 
28            THAT POWER OF ATTORNEY STATES STRICTLY, HENRY
			
			

page 1008
 
 
 
 1  FISCHER IS EMPOWERED TO EXPEDITE THE LAWFUL PORTION OF THE
 
 2  ESTATE OF JEAN FARREL IN NECA CORPORATION TO THE CUSTODY OF
 
 3  MR. ROLAND ROCHAT.  THAT’s WHAT THE EVIDENCE SAID.  THAT'S
 
 4  WHAT THAT DOCUMENT SAYS.  IT DIDN'T SAY TO THE CORPORATION.
 
 5  IT SAYS TURN IT OVER THE ROLAND ROCHAT.  THAT’s WHAT
 
 6  MR. FISCHER DID.  SO THEREFORE, YOUR HONOR, THERE’s NO
 
 7  EVIDENCE THAT MR. FISCHER DID ANYTHING OTHER THAN WHAT HE
 
 8  WAS INSTRUCTED TO DO BY HIS POWER OF ATTORNEY.
 
 9            COUNSEL DID NOT READ THE POWER OF ATTORNEY
 
10  CORRECTLY TO THIS COURT, AND I WOULD HOPE THAT THE COURT
 
11  REVIEWS THE DOCUMENTS IN ORDER FOR BOTH COUNSEL’s SAKE.
 
12  WE'RE MERELY GIVING YOU ARGUMENT.
 
13            WITH RESPECT TO THE SIXTH CAUSE OF ACTION — NOW
 
14  I'M GETTING CONFUSED.  IS HE SEEKING AN AMENDMENT OF THAT
 
15  FOR THAT PURPOSE?  IF THAT’s THE CASE, NOW WE HAVE BEEN
 
16  PREJUDICED AGAIN, BECAUSE I WILL TELL YOU UNDER THAT
 
17  SECTION, CORPORATIONS CODE 6215, THERE IS NO PRIVATE RIGHT
 
18  OF ACTION.  THAT MERELY ALLOWS THE ATTORNEY GENERAL — IN
 
19  FACT, THERE ARE REMEDIES IN THE NONPROFIT CORPORATIONS CODE
 
20  STRICTLY IN THE FORM OF TO THE ATTORNEY GENERAL IN WHICH
 
21  THEY — HE CAN CITE PEOPLE FOR FALSIFYING RECORDS, SO FORTH,
 
22  IF THERE’s BEEN EVIDENCE OF FALSIFICATION.  THERE’s BEEN NO
 
23  EVIDENCE OF FALSIFICATION.  THERE’s NOBODY HERE TESTIFIED TO
 
24  FALSIFICATION EXCEPT FOR HARVEY TAYLOR, WHO DOESN'T REMEMBER
 
25  WHO THE DIRECTORS WERE TWO MONTHS AGO, LET ALONE.  AND THEN
 
26  HIS TESTIMONY WAS REFUTED BY ELISABETH CARTO AND WILLIS
 
27  CARTO WHO HAD THE CONVERSATIONS WITH HIM.
 
28            SO, YOUR HONOR, I — AND HE’s ALSO A BIASED
			
			

page 1009
 
 
 
 1  WITNESS.  BUT MORE IMPORTANTLY, YOUR HONOR, COUNSEL HAS
 
 2  MISSED THE BOAT.  I DON'T WANT TO REGURGITATE IT.
 
 3       THE COURT:  THEN PLEASE DON'T.  IF I HEARD IT ONCE, I
 
 4  DON'T NEED TO HEAR IT AGAIN.
 
 5       MR. WAIER:  I WANT TO MAKE THE DISTINCTION THE PRIMA
 
 6  FACIE EVIDENCE GOES TO THE RESOLUTIONS, NOT TO THE MINUTES.
 
 7  IT STATES SPECIFICALLY UNDER THE CODE SECTION IT TALKS ABOUT
 
 8  PRIMA FACIE EVIDENCE TO ANY RESOLUTION, NOT WHETHER THERE
 
 9  WAS A DIRECT OR PRESENT OR NOT PRESENT.  IT MERELY GOES TO
 
10  RESOLUTIONS.  THAT’s THE ONLY ISSUE INVOLVED IN THE MINUTES
 
11  AS BEING PRIMA FACIE EVIDENCE.  IT HAS NOTHING TO DO WHO
 
12  ATTENDED; WHO WAS THERE; WHO WASN'T THERE.
 
13            ALSO AMERICAN CENTER FOR EDUCATION V. CAVNAR IS A
 
14  NONPROFIT CORPORATION CASE IN WHICH IT STATES AN AMERICAN
 
15  CENTER FOR THE EDUCATION, EVEN THOUGH THE NONPROFIT
 
16  CORPORATIONS CODE IN CALIFORNIA STATES VARIOUS FORMALITIES
 
17  THAT MUST BE MET IF IT’s A SMALL CORPORATION THAT DEALS THE
 
18  SAME WAY IT CAN HAVE INFORMAL MINUTES.  IT DOESN'T, IN OTHER
 
19  WORDS, IT DOESN'T INVALIDATE ACTIONS OF THE BOARD BECAUSE
 
20  THERE’s INFORMALITY, AND THAT’s CONSISTENT WITH GENERAL
 
21  CORPORATION LAW.  AND THAT WE CITED IN THE PAPERWORK.
 
22  THAT’s ANOTHER RED HERRING.
 
23       THE COURT:  THE IDEA WAS NOT TO RESPOND TO HIS ENTIRE
 
24  ARGUMENT.
 
25       MR. WAIER:  I'M SORRY.
 
26       THE COURT:  BECAUSE HE DOES HAVE THE BURDEN.  IT HAS TO
 
27  END SOMEWHERE.
 
28            IT SEEMED TO ME MY QUESTIONS BROUGHT UP SOME AREAS
			
			

page 1010
 
 
 
 1  YOU HAD NOT COVERED, NAMELY, CAUSE OF ACTION NUMBER SIX.
 
 2       MR. WAIER:  YES.  NO PRIVATE RIGHT OF ACTION — IN
 
 3  ESSENCE, IT’s 5214.  THAT’s THE PRESENT CAUSE OF ACTION.
 
 4  THERE’s BEEN NO MENTION OF A MOTION TO AMEND AGAIN, AND SO
 
 5  CONSEQUENTLY, WE HAVE BEEN PREJUDICED.  THERE’s THAT ASPECT
 
 6  HE’s NOT BROUGHT A MOTION TO AMEND.
 
 7            SECOND OF ALL, YOUR HONOR, WITH RESPECT TO THE
 
 8  ONLY THING YOU WANT ME TO ADDRESS, I WANT TO SAY 425.15, I
 
 9  READ THAT SECTION AGAIN.  IT SAYS NO CAUSE OF ACTION MAY BE
 
10  BROUGHT AGAINST A DIRECTOR OR AN OFFICER — AND THAT IS
 
11  IMPORTANT TO NOTE — UNLESS YOU PETITION BY A VERIFIED
 
12  PETITION.  THAT’s WHY THE NONPROFIT CORPORATION LAW AND THAT
 
13  CALIFORNIA CODE OF CIVIL PROCEDURE SECTION WAS ENACTED.
 
14  THEY UNDERSTAND THAT VOLUNTEER DIRECTORS HOLD A VERY
 
15  ESTEEMED POSITION WITHIN THE LAW WITH RESPECT TO THE
 
16  NONPROFIT CORPORATION.  THEREFORE YOU MUST PETITION THE
 
17  COURT BEFORE YOU DO THAT, AND YOU CANNOT BRING A LAWSUIT
 
18  UNLESS YOU BRING A VERIFIED COMPLAINT AGAINST — A VERIFIED
 
19  PETITION AGAINST THE DIRECTORS TO THE COURT ASKING THE COURT
 
20  IF YOU CAN FILE IT.  IT TOLLS THE STATUTE OF LIMITATION FROM
 
21  THAT POINT IN TIME WHEN YOU BRING THE PETITION BECAUSE THEY
 
22  RECOGNIZE THAT THE COURT HAS TO CONSIDER THAT.  BUT UNTIL
 
23  YOU DO THAT, YOU ARE NOT ENTITLED TO FILE A COMPLAINT, WHICH
 
24  THEY DID ANYWAY, AND IT SHOULD BE DISMISSED BECAUSE IT DID
 
25  NOT FOLLOW, INTERESTINGLY ENOUGH, THE LAW.  THAT IS THE
 
26  LAW.
 
27            IS THERE ANY OTHER POINT YOU WANT ME TO ADDRESS,
 
28  YOUR HONOR?
			
			

page 1011
 
 
 
 1       THE COURT:  HE’s ASKING FOR AN ACCOUNTING FOR THE
 
 2  DIAMONDS.
 
 3       MR. WAIER:  YOUR HONOR, THE BURDEN OF PROOF IS ON
 
 4  THEM.  THE ACCOUNTING IS ALL THERE.  IN FACT, THAT’s THE
 
 5  REASON WHY WE STAND HERE TODAY BECAUSE THEY DIDN'T NAME THE
 
 6  RIGHT PARTIES IN THIS ACTION.
 
 7            ROLAND ROCHAT, IF YOU TAKE A LOOK AT THAT, HE
 
 8  WAS — IF YOU TAKE A LOOK AT THE DISTRIBUTION AGREEMENT, THE
 
 9  SETTLEMENT AGREEMENT, HE WAS HANDLING THAT DISTRIBUTION.
 
10  AND I SUGGEST, YOUR HONOR, THE DIAMONDS DIDN'T COME IN ANY
 
11  DIRECTION.  IT DIDN'T GO TO LIBERTY LOBBY AND DIDN'T GO TO
 
12  WILLIS CARTO.  THERE’s NO EVIDENCE BEFORE YOU THAT IT WENT
 
13  TO ANY OF THE DEFENDANTS BEFORE YOU.  IF MR. ROCHAT TOOK OFF
 
14  TO SAUDI ARABIA WITH IT, THAT’s ANOTHER STORY.  YOU HAVE NO
 
15  EVIDENCE THAT THE DIAMONDS OR GEMS WENT TO ANYBODY HERE
 
16  BEFORE YOU TODAY.  SO THEREFORE, THERE’s A LACK OF PROOF.
 
17            MR. CARTO TESTIFIED HE NEVER GOT THE GEMS.  SO
 
18  WITH RESPECT TO THAT, THERE’s A LACK OF PROOF.  MAYBE THE
 
19  PROPER PARTY SHOULD HAVE BEEN BROUGHT, ROLAND ROCHAT AND
 
20  DOCTOR PATRICK FOETISCH.
 
21            THE OTHER THING I WANT TO EMPHASIZE, IF YOU TAKE A
 
22  LOOK AT BAJI 1330, 13.30, IT STATES THAT A CORPORATION NOT
 
23  ONLY ACTS THROUGH ITS DIRECTORS, BUT THERE’s A — BAJI --
 
24  ACTS THROUGH IT’s OFFICERS.
 
25            THERE IS NO QUESTION THAT LAVONNE FURR WAS
 
26  SECRETARY/TREASURER DURING ALL OF THIS POINT IN TIME, AND
 
27  THAT IS WHAT BAJI — WHAT YOU INSTRUCT A JURY ON.  ANY
 
28  ACTIONS TAKEN BY HER ARE THE ACTIONS AS AN OFFICER ARE THE
			
			

page 1012
 
 
 
 1  ACTIONS OF THE CORPORATION.  THAT’s 13.30.  SO — AND WE
 
 2  HAVE SHOWN HERE, AND THE LAW — I'M NOT GOING TO
 
 3  REGURGITATE.
 
 4            ANY OTHER QUESTIONS?
 
 5       THE COURT:  I DON'T THINK SO.  THOSE ARE THE ONLY
 
 6  AREAS.
 
 7       MR. WAIER:  I DO QUARREL WITH HIS OFFSETS.  I THINK IF
 
 8  YOU LOOK AT 208, YOUR HONOR, 208 HAD A NUMBER OF OTHER --
 
 9  EVEN MR. WEBER TESTIFIED AS LONG AS IT WAS PAID TO AGENTS IN
 
10  CONNECTION WITH THIS, AND IT’s EVEN IN THE DEPOSITION, THOSE
 
11  WERE PROPER EXPENDITURES.  FOR EXAMPLE, HAVING TO PAY OFF,
 
12  EVEN ACCORDING TO THE AGREEMENT, JOAN ALTHAUS; HAVING TO PAY
 
13  OFF ALL OF THE OTHER ATTORNEYS USING THESE FUNDS.
 
14            IF YOU WILL TAKE A LOOK AT 208, IT TALKS ABOUT
 
15  LOSS OF CAL FUTURES WERE ONE OF THE DOCUMENTS THAT JEAN
 
16  FARREL HAD, AND IT JUST I DON'T THINK THAT WAS A
 
17  DISTRIBUTION.  THAT SAYS THAT THEY LOST IN VALUE $500,000.
 
18  I DON'T — AND THERE’s NO EVIDENCE THAT 7.5 MILLION DOLLARS
 
19  TOOK INTO ACCOUNT A VALUE, WHICH IS SUBSEQUENTLY DECREASED
 
20  BY THE 500,000.  THAT’s WHY 208 IS DIFFICULT TO UNDERSTAND,
 
21  AND I TRIED TO DO THAT.  IT’s DIFFICULT.  CERTAINLY A LOSS
 
22  CAN'T BE ATTRIBUTED TO MR. CARTO, ESPECIALLY WHEN ROLAND
 
23  ROCHAT WAS THE ONE INVOLVED WITH ALL OF THOSE TRANSACTIONS.
 
24  THAT’s THE EVIDENCE YOU HAVE BEFORE YOU, INCLUDING THE LAWS
 
25  OF EURODISNEY AND ALL OF THESE OTHER THINGS.
 
26            THE ONLY THING ON HERE I SEE IS 2.6.5 OR
 
27  $2,650,000 TO LIBERTY LOBBY.  F.D.F.A. YOU HAVE NO EVIDENCE
 
28  OTHER THAN THIS AS TO A HUNDRED THOUSAND, BUT YOU ALSO HAVE
			
			

page 1013
 
 
 
 1  TESTIMONY THAT YOU HAD 400 TO $500,000 THAT LIBERTY LOBBY
 
 2  PUT IN.  YOU HAVE TESTIMONY OF ELISABETH CARTO; WHAT SHE PUT
 
 3  IN.  YOU ALSO HAVE TESTIMONY AS TO WILLIS’s TIME AND
 
 4  EFFORT.
 
 5            WHAT I'M SAYING, YOUR HONOR, EVEN IF YOU WERE TO
 
 6  CONSIDER DAMAGES, WHICH I DON'T THINK YOU SHOULD GET TO THAT
 
 7  POINT, BUT IF YOU DO, THERE’s MORE OFFSETS.  THIS SHOWS THE
 
 8  GREED THAT’s TRYING TO TAKE PLACE HERE.  THEY'RE SAYING WE
 
 9  GET EVERYTHING.  YOU DID ALL THE WORK, BUT YOU GET NO
 
10  OFFSETS FOR IT.  IN OTHER WORDS, YOU PAID ATTORNEYS
 
11  OVERSEAS.  YOU TOOK MONEY OUT, AND YOU PAID TAXES, OR YOU
 
12  PAID JOAN ALTHAUS’s ESTATE.  YOU PAID AN EXPEDITER
 
13  $800,000.  THAT’s OURS.  YOU HAD NO RIGHT TO DO IT, EVEN
 
14  THOUGH YOU ACQUIRED THE ESTATE.  I DON'T THINK THAT’s THE
 
15  LAW, EVEN IF YOU GET TO THAT POINT ON DAMAGES.
 
16       THE COURT:  THAT OUGHT TO DO IT THEN.
 
17       MR. BEUGELMANS:  MAY I ADDRESS A FEW POINTS, BRIEFLY?
 
18       THE COURT:  I THINK WE HAVE TO PUT AN END TO IT HERE.
 
19            WHAT YOU ARE ENTITLED TO GET FROM ME, OF COURSE,
 
20  IS A STATEMENT OF DECISION, WHICH DOES NOT, AND I EMPHASIZE
 
21  THE WORD “NOT” GO INTO THE EVIDENTIARY ISSUES.  IT SIMPLY
 
22  GOES TO THE ULTIMATE ISSUES.  IT’s LIKE A JURY VERDICT,
 
23  REALLY, IF A JURY FINDS CONVERSION.  I'LL TELL YOU ALL THE
 
24  REASONS WHY.
 
25            WHAT I WILL DO IS I WILL WRITE A LETTER TO YOU,
 
26  WHICH WON'T BE A STATEMENT OF DECISION, WHICH WILL EXPLAIN
 
27  TO YOU HOW I SAW THE EVIDENCE AND WHICH WITNESSES I BELIEVED
 
28  AND WHICH WITNESSES I DIDN'T AND SO ON, SO FORTH.  I DO THAT
			
			

page 1014
 
 
 
 1  WITH SOME TREPIDATION, BECAUSE IT’s USUALLY BETTER NOT TO DO
 
 2  IT.  JUST LEAVE YOU ALL IN THE DARK; BUT YOU BOTH SPENT A
 
 3  LOT OF TIME AND MONEY ON THE CASE.  BOTH ARE INTERESTED.  I
 
 4  THINK YOU ARE ENTITLED TO KNOW HOW I'M LOOKING AT IT, AND
 
 5  WHY I'M GOING TO REACH CERTAIN DECISIONS.  I'LL GET TO THAT
 
 6  AS SOON AS I POSSIBLY CAN.  I CAN'T PROMISE YOU WHEN IT WILL
 
 7  BE BUT AS SOON AS I CAN GET TO IT.  IT WILL DEPEND SOMEWHAT
 
 8  ON THE NEXT TWO CASES.  THEY'RE CRIMINAL CASES WITH NO TIME
 
 9  WAIVERS.
 
10            I WANT TO THANK YOU FOR PUTTING ON THE CASE AND
 
11  FOR GIVING IT THE ATTENTION THAT YOU HAVE GIVEN IT.
 
12            MAKE SURE WE HAVE YOUR ADDRESS AND MAKE SURE WE
 
13  HAVE THE CORRECT ADDRESS OF MR. LANE.  SEND HIM A COPY TOO.
 
14  THANK YOU VERY MUCH.
 
15       MR. WAIER:  THANK YOU FOR YOUR INDULGENCE AND PATIENCE,
 
16  YOUR HONOR.
 
17       MR. BEUGELMANS:  THANK YOU.
 
18
 
19                    (PROCEEDINGS CONCLUDED.)
 
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