Re: 7/11/03 - [Asser vs. Rea et al] Memorandum of Points and Authorities in Opposition to Cybertrader, Inc. and the Charles Schwab Corp's Motion to Strike
OLIVIER L.F. ASSER
Plaintiff in propria persona
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF SAN FRANCISCO
OLIVIER L. F. ASSER,
Plaintiff,
v.
CHRISTOPHER REA, PHILIP BERBER, TRADING PLACES, INC., CYBERTRADER, INC., THE CHARLES SCHWAB CORP., MANHATTAN BEACH TRADING, INC., TERRA NOVA TRADING, LLC AND DOES 1-10,
Defendants.
Case No. 413497
MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO CYBERTRADER, INC. AND THE CHARLES SCHWAB CORP.’S MOTION TO STRIKE
Date: August 1, 2003
Time: 9:30 a.m.
Hon. David A. Garcia
Dept. 301
Trial Date: None Set
I. Introduction
The motion filed by the Brokerage Defendants, CyberTrader, Inc. and the Charles Schwab Corporation (the “Defendants”), to strike the amended complaint is frivolous in the extreme: as the Defendants in their own brief concede, no amended complaint has been filed in this action and there is therefore nothing to strike.
Apparently coordinated with the equally frivolous motion to strike and for sanctions filed by co-defendant Terra Nova Trading, LLC, it is designed to harass and intimidate Plaintiff, now that he is pursuing his claims in propria persona. Revealing among the statements made in the Defendants’ motion is the following:
“...the Amended Complaint is a nullity, and CyberTrader and Schwab were tempted simply to ignore it. But the short history of this matter led them to be concerned that, if they did so, Asser, who is now representing himself, would file a request with the Court to enter their default.”
CyberTrader and Schwab’s Memorandum, p.3, 3.
If the amended complaint is “a nullity,” as the Defendants here themselves concede, not a part of the record of the Court, then there is no cause for a motion to strike. Yet, through loaded and inflammatory hypothesis, the Defendants now profess their fear that Plaintiff in propria persona might possibly seek their default: “The short history of this matter.”
Contrary to the misleading statements made in the motion, the Court may assert jurisdiction over the other defendants – and the Complaint specifically provides for amendments, so that Plaintiff might name additional defendants, i.e. “DOES 1-10.”
Now that, though no amendments have been yet authorized by the Court, certain of the defendants have raised this issue, Plaintiff requests the Court rule on whether he may now indeed be granted leave to amend the Complaint, in order to identify and serve the DOE Defendants in this action, thereby saving him the considerable time and expense of filing a separate action against those defendants in this same Court. If the Court subsequently orders that the stay should extend to those defendants, then Plaintiff respectfully requests that, in the event the stay is reversed by the Court of Appeal, then the stay of proceedings against the additional defendants be lifted as well.
II. Statement of Facts
The Complaint filed on October 11, 2002 provides:
1. The true names and capacities of other defendants sued herein as DOES 1-10, inclusive, are currently unknown to plaintiff, who therefore sues such defendants by such fictitious names under Code of Civil Procedure § 474. Plaintiff believes each DOE to be an additional Brokerage Defendant. Each of the defendants designated herein as a DOE is legally responsible in some manner for the unlawful acts referred to herein. Plaintiff will seek leave of Court to amend this Complaint to reflect the true names and capacities of the defendants designated herein as DOES when such identities become known.
Verified Complaint for Damages and Equitable Relief (October 11, 2002) 23.
Therefore, per the provisions of the Complaint, Plaintiff had sought to name additional defendants, in this case Steven Demarest, Ross Ditlove and Gerald Putnam, all of whom, Plaintiff has learned, were intimately involved in every aspect of the kickback scheme alleged in the Complaint, and were personally unjustly enriched thereby. The amended complaint was on June 2, 2003 rejected by the Court on the basis that an answer to the Complaint had already been filed on December 30, 2002, and California Code of Civil Procedure §472 prevented the filing of an amended complaint absent the order of the Court. There was no reference by the Court to the stay as cause why the amended complaint should be rejected; only the December 30 answer. Plaintiff was so informed by the Deputy Clerk, via letter sent June 3, which returned to Plaintiff the amended complaint in its entirety. Therefore, the amended complaint is not a part of the record.
The March 20 order of the Court to compel arbitration of Plaintiff’s claims against the Defendants and to stay further proceedings is currently pending review by the Court of Appeal, Case No. A102735, Division Three. Plaintiff filed a Petition for Writ of Mandate seeking to have this order reversed. The Court of Appeal, though not required to do so under California Rules of Court - except in the event a writ petition may have merit - requested the Defendants file a brief in opposition. In a letter dated June 2, 2003, the Clerk of the Court of Appeal sent Defendants a letter, copied to Plaintiff, stating:
“The opposition should address all issues raised by the petition.
“You are hereby notified that if circumstances warrant, the court may issue a peremptory writ in the first instance.”
Though the Defendants – and Terra Nova – appear remarkably inclined to argue the merits of the writ petitions here, rather than before the proper venue, the Court of Appeal, and to call into question Plaintiff’s adherence to proper procedure, it does appear that the Court of Appeal is taking Plaintiff’s writ petitions seriously – even though these are the first writs Plaintiff, admittedly not an attorney, has ever drafted, let alone filed, in his life.
The Defendants filed their opposition on June 17. Therein they conceded the possibility of the Court issuing a peremptory writ. Plaintiff understands a decision in this matter to be pending.
Additionally, the other order compelling arbitration and the two orders to quash are also pending review by the Court of Appeal, Cases A102731, A102601 and A102812.
The Defendants have at no time commenced NASD arbitration of Plaintiff’s claims. Plaintiff has no indication thus far that this is the Defendants’ intent – save their motion to compel arbitration, which to date successfully removed Plaintiff’s claims against the Defendants from this Court. Notably, initiating the arbitration process should not present any difficulties for the Defendants, as per Martindale-Hubbell Mr. Sullwold, counsel to brokerage firms, is himself an NASD arbitrator.
III. Argument
A. No amended complaint was filed; there is therefore nothing to strike
Using virtually identical language to that of Terra Nova, the Defendants concede that “None of these changes affects the substance of the claims made against CyberTrader and Schwab.” Memo p.3, at fn.5. They were not intended to change the substance of the allegations against them; rather, as the Complaint specifically provides, they were intended to identify the DOE Defendants by name. Contrary to the Defendants’ assertion, the amended complaint did not require a response from the Defendants – only from the DOE Defendants, whom Plaintiff did not serve, as the amended complaint had been rejected.
The Defendants move to strike based on the court’s “authority to strike pleadings ‘not filed in conformity with its prior ruling.’” Memo, p.4. Yet the Defendants do not dispute that the document in question was never filed. It is not part of the record. It is not a part of any proceedings before the Court. There is therefore nothing to strike. There is no cause to move to strike. The move to strike is nonsensical.
The Defendants claim Plaintiff seeks to harass them in his attempt to identify the DOE Defendants. Considering that they are represented by an accomplished attorney very highly rated by his peers, facing an unrepresented party holding no formal legal qualification whatsoever, this is not only a preposterous argument, it is moreover disingenuous at best: as if Plaintiff would know enough about legal tactics to even think to craft such a stratagem. It is all he can do to simply follow the Rules of Court to the best of his ability, and to attempt to draft persuasive briefs, now at the appellate level, that might have any hope of countering some of the most talented legal minds in the State of California. He certainly does not under any circumstances expect the Court to exempt him from its rules, procedures and the law; he however also does not expect defense counsel to baselessly accuse him of tactics of harassment, delay and confusion for which he does not even begin to have the slightest idea how to put into action, and with which, if he somehow possibly did, he would not dare test this Court’s patience.
B. Plaintiff did not violate the stay order
The Defendants contend that, “in direct violation of the stay order plaintiff...served a purported amended complaint…” Memo, p.1, 1. There is no basis for such a statement. No amended complaint has been filed in this Court. It was rejected and returned. It is neither a part of the record nor of any proceedings before this Court.
C. The stay order concerns claims remaining in this action, all of which the Court ruled arbitrable; claims against the DOE Defendants Plaintiff seeks to identify are inarbitrable and therefore at the discretion of the Court may be severed
At the consolidated hearings of March 13, the Court dismissed claims against the Individual Defendants. Those claims, which are not arbitrable, are now pending appeal. Indeed, those defendants have at no time argued that claims against them could possibly be subjected to arbitration. Likewise, claims against the DOE Defendants are not subject to arbitration. California Code of Civil Procedure §1281.4 provides:
“If the issue which is the controversy subject to arbitration is severable, the stay may be with respect to that issue only.”
When the Court issued the order to stay, it did so after having ruled that the non-arbitrable claims were dismissed. Plaintiff understands that the Court stayed all proceedings because at that time all remaining proceedings were subject to the jurisdiction of NASD arbitration. However, if Plaintiff’s claims against the Individual Defendants Christopher Rea/Trading Places and Philip Berber, now dismissed but pending appellate review, are remanded to this Court, then it would be within the Court’s discretion to limit the stay so that it would not apply to those claims, which are non-arbitrable and thus severed from the claims ordered to arbitration, which are also now pending appellate review. Claims against the DOE Defendants, previously named but not identified, are likewise not subject to arbitration, severable and therefore within the Court’s discretion to sever from the stay.
Contrary to Defendants’ bald assertion that Plaintiff is “in direct violation” of the stay order as a result of the attempted filing of an amended complaint identifying previously sued but unidentified defendants, he has done no such thing. The amended complaint, which was never filed, was not directed at the Defendants; it was directed at the DOE Defendants. Furthermore, it would not be equitable for the Court to disallow Plaintiff identifying the DOE Defendants at this time. Should he be barred from doing so pending arbitration, he would risk losing claims against them due to the applicable statute of limitation.
D. The motion to strike is frivolous; the Defendants and their counsel should be sanctioned
Plaintiff respectfully requests that the Court take into account previous activity seeking to intimidate Plaintiff – activity directly related to this action. Plaintiff therefore attaches to the Opposition several documents. Plaintiff respectfully submits that the Defendants, when they seek to collaborate with Terra Nova in order to harass and intimidate Plaintiff, should then in that case then be measured in relation to the history of their collaborators, as it relates to the effect of present efforts to repeat such a performance.
Terra Nova counsel Mr. Feld sent a letter directly to Plaintiff, dated December 1, 2000. Exhibit C. Therein, Mr. Feld implied that Plaintiff had “meritless[ly] defame[d]” Terra Nova in public – yet strangely enough he requested evidence of the purportedly meritless allegations, which in fact he subsequently received from Plaintiff. Terra Nova never took action against Plaintiff. Apparently, this correspondence was intended to coerce Plaintiff into withdrawing his allegations, nothing more. Perhaps Terra Nova did not follow through and file defamation claims against Plaintiff because, had it done so, then it could have then through the doctrine of waiver been prevented from seeking to arbitrate Plaintiff’s claims – and this of course it now has recently demonstrated would not have been its preferred course. Thus has Terra Nova established a record of bluster and attempted intimidation. There is however further evidence that, in an attempt to intimidate Plaintiff and to avoid legal action, Terra Nova may very well have been involved in the commission of federal and state crimes.
Plaintiff first made public his allegations on June 27, 2000, via a public statement he disseminated to a group of his colleagues, many of whom are fellow victims of the kickback scheme. Within a matter of weeks, the clearing firm of Terra Nova, Southwest Securities, Inc., sent the Internal Revenue Service 1099 forms purporting to document Plaintiff’s income for the years 1998-1999. A copy of this record is attached hereto as Exhibit D. The belated filing of these documents is directly responsible for a tax liability Plaintiff now has outstanding with the Federal government of some $49,441,636.00 on a purported “day trading” income of some $124,971,003.00. Nearly $125 million in so-called income and $50 million in so-called taxes on this phantom income. It should be noted that these particular 1099 forms were sent in only after Plaintiff had made public his allegations. Indeed, the 1998 forms were due January 1, 1999; the 1999 forms, January 1, 2000. Yet they were more than 1 ½ years and 6 months late, respectively. An IRS agent informed Plaintiff of the date of their filing, July 27, 2000. He also stated that the deliberate abuse of the 1099 filing process is a federal crime, an opinion subsequently confirmed by a number of attorneys with whom Plaintiff has consulted. The IRS has deemed the 1099’s unreliable, and is taking no further action against Plaintiff. However, it appears that Terra Nova did not arrest its efforts with the IRS.
In the spring of 2002, Plaintiff contacted Terra Nova for a copy of his transaction history. Though as alleged in the Complaint he had previously paid this firm nearly $300,000 in commissions, it requested a check for $25 to pay for this record. This check Plaintiff sent Terra Nova on or about early July. It was subsequently cashed; nevertheless, Terra Nova never sent any records. Shortly thereafter, the State of Virginia attached a lien to the same bank account on which the check was drawn, for some $1,295,976.03. A copy of this document is attached hereto as Exhibit E. As a result, Plaintiff’s credit record has been destroyed. Furthermore, due to Terra Nova’s demonstrated refusal to provide his complete transaction history, Plaintiff has little remedy, save perhaps an unlikely appeal to the jurisdiction of the Department of Justice and the Virginia State Attorney General.
Given this past record of Terra Nova, and now the Defendants joining forces with that firm in an attempt to intimidate Plaintiff through baseless motions to strike and for sanctions, Plaintiff requests the Court recognize the Defendants’ motion as nothing more than an adventure seeking to dissuade Plaintiff from addressing the Courts of this State free from fear.
IV. Conclusion
CyberTrader and Schwab’s motion to strike that which is not a part of the record is totally and completely without merit. It should be denied. Furthermore, both the Defendants and Mr. Sullwold, their counsel of record, should be sanctioned.
DATED: July 11, 2003 _____________________________
Olivier L. F. Asser
Plaintiff in propria persona
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