Tel: (415) 491-1269
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE BRANCH
No. C-95 20678 RMW
Date: February 21, 1997
Ishi Press International, James W. Connelley,
Elwyn Berlekamp, Nathaniel Berkowitz,
and Hartland Snyder,
Ishi Press International, a California Corporation,
Elwyn Berlekamp, Nathaniel Berkowitz,
and Hartland Snyder,
Richard Bozulich, individually, and The Ishi Press,
Inc., a Japanese Corporation, Samuel Sloan aka
Ismail Sloan an individual,
Counter - Defendants.
Declaration of Samuel Sloan in Support of Motion for Summary Judgment __________________________________________________________________
I, Samuel Sloan, declare:
1. I make this declaration in support of a motion for summary judgment on the counter-claim filed by three of the defendants to this action.
2. I am the President of Ishi Press International, a California Corporation. I was first elected president on October 26, 1994, the same date that James W. Connelley was removed as president and director. I was reelected President and Secretary on November 7, 1994 at a meeting of directors which took place immediately after a special meeting of stockholders which took place on November 7, 1994.
3. In addition, I am the designated agent for service of process for Ishi Press International. I have filed the last two annual reports with the California Secretary of Corporations. I have paid the state tax for the past two years.
4. On or about November 3, 1996, I was served with a summons and a counter claim filed by three of the defendants to this action. Since then, counsel for the defendants have told me that I have been dropped as a counter defendant. However, I have been to the courthouse. The computer files of this court, under "parties", lists me as an active defendant. Moreover, it is clear that I am a necessary party to this suit. Since I am the President of Ishi Press International and am doing my best to run the company, this suit will not be effective unless I am a party. Also, even if they have dropped me as a party, it is only to wait until discovery is over, at which point they could name me again. I am therefore entitled to file this motion for summary judgment.
5. The counter claim filed by three of the defendants is wholly without merit. Summary judgment and a final dismissal of the complaint are required for the following reasons, plus several others:
THE DEFENDANTS AND COUNTER CLAIMANTS ARE NOT OFFICERS, DIRECTORS OR STOCKHOLDERS OF ISHI PRESS INTERNATIONAL AND THEREFORE LACK STANDING TO MAINTAIN THIS COUNTER CLAIM
6. Here is a point which I believe that this court kept overlooking, going back to the original motion for a temporary restraining order and motion to disqualify Howard Neal as counsel. None of the counter-claimants are stockholders of the company. It is well established that only a stockholder can maintain a counter-claim such as those brought here. Until mid-1995, Hartland Snyder was never a stockholder of Ishi Press International (although his brother Art Snyder, owned 1000 shares). As of mid-1994, Nathaniel Berkowitz owned 10,000 shares and Elwyn Berlekamp owned a bit more than 26,000 shares. In September or October of 1994, Berkowitz had 158,397 shares of stock issued to himself, illegally in my opinion. On June 30, 1995, not coincidentally the same date as the date of the trial of Sloan v. Ishi Press International before Judge Flaherty of the Santa Clara County Superior Court, Elwyn Berlekamp had 560,000 shares issued to himself, also illegally in my opinion. However, on July 5, 1995, two days before the letter by Hartland Snyder to Judge Flaherty, Berlekamp and Berkowitz sold all their shares to Hartland Snyder and also resigned as directors as of July 7, 1995. Previously, Connelley had resigned as a director in March, 1995. This left Richard Bozulich as the sole remaining director of Ishi Press International. He has the absolute legal right to run the corporation. However, he is being prevented by the defendants from doing so.
7. Therefore, it can be seen that neither Berlekamp nor Berkowitz are stockholders. Consequently, their counterclaim must be dismissed.
8. Hartland Snyder is a judgment creditor to Nancy Wolok and June Teetor in a case in the Berkeley Albany Municipal court. Case No. 62077. The judgment has been outstanding since October, 1988 and is for $32,000. When Counsel for Wolok and Teetor found out that Hartland Snyder had acquired these shares, they obtained an order from the Berkeley Albany Municipal Court requiring that these shares be handed over to the Sheriff of Alameda County. In order to evade this judgment, Hartland Snyder has stated that he had sold his shares to a mysterious and unknown person named "Cavalier". Consequently, Hartland Snyder is no longer a stockholder of Ishi Press International.
9. Interestingly, the only named defendant who has not joined in this counterclaim is James W. Connelley. Mr. Connelley testified in a deposition that he has not sold his shares and still owns them. I believe that Mr. Connelley realizes that the allegations in the counter claim are factually untrue. Also, Mr. Connelley may share the dream we do that this corporation will survive this litigation.
10. It is clear that the very persons who want to scuttle this corporation and who own no shares of stock in this corporation are those who have filed this counter claim. This provides a good reason for dismissing this counter claim.
THE COUNTER CLAIM IS BARRED BY STATUTE OF FRAUDS
11. Throughout this litigation, the defendants and counter claimants Hartland Snyder, Berlekamp and Berkowitz have claimed that "Richard Bozulich agreed to this" and "Richard Bozulich agreed to that." I was a witness to some of the conversations where Richard Bozulich supposedly agreed to these things and the fact is that no such agreement was made. It is patently obvious that Richard Bozulich would never agree to some of the things which it is being suggested that he agreed to. For example, the defendants often state that "Richard Bozulich agreed to resign as a director." I was present at a conversation in which Hartland Snyder suggested the idea that Richard Bozulich resign as a director and put his shares into some sort of non-voting trust which Snyder would manage so as to take care of Bozulich in his "old age", as Snyder put it. It was obvious that Bozulich considered the suggestion to be preposterous and ridiculous, as did I. The idea put forth was so ridiculous that I doubt that Bozulich ever responded yes or no. Yet, now Snyder apparently claims that Bozulich agreed to some version of this.
12. Almost without exception, all of the agreements which Bozulich is alleged to have made were oral agreements. The only signed written agreement which the defendants have produced which they are alleging that Bozulich signed is the agreement dated May 1, 1994 in which he agreed to allow Ishi Press International to have a license to use the name Go World so that this magazine could be distributed in North America by Ishi Press International. Mr. Bozulich states that he does not remember signing this agreement. Here it must be noted that there is another agreement of a similar date signed by Mr. Berlekamp which Mr. Berlekamp states that he does not remember signing. That was an agreement which created a new classes of preferred stock. Mr. Berlekamp testified in a deposition that he could not imagine what the purpose would be for such an agreement. I am able to surmise what the purpose was. James W. Connelley and Hartland Snyder wanted to go public with an offering of Ishi Press International stock. These class preferred shares were to be offered to the public. It is obviously ridiculous even to think about a company in the messed up condition of Ishi Press International as possibly going public. Nevertheless, Mr. Connelley and Mr. Snyder continued to talk about raising money in this way or by infusions of venture capital. Snyder repeatedly brought up this idea during a meeting I had with him and Mr. Berkowitz in the office of Berkowitz in October, 1994. Although I disagree with Mr. Berkowitz on almost everything else, one thing that we agreed upon is that until this mess is straightened out, this company should never go public. Hartland Snyder was too dim and too anxious to lure unwary investors into Ishi Press International to grasp this point. In a memo to Bozulich which is undated but was obviously written in January or early February, 1995, Hartland stated: "Essentially, unless we can get further equity capital, we have a continuing very difficult situation. I can't get further equity capital with you on the board and threatening the company with suits." It is apparent from this memo that Hartland was still thinking of making a public offering of Ishi Press International stock.
13. Ishi Press International does have an SEC file number. The defendants deny this, but you can look it up. I believe that this number was obtained when Hartland Snyder filed a SCORE offering (small securities offering) with the SEC. One investor who was trapped into this situation was Martin Lowenstein who answered an ad placed in the Wall Street Journal by Hartland Snyder. It is believed that Lowenstein lost approximately $115,000 as a result.
14. The declarations filed by the defendants and counter claimants state for example that Bozulich "agreed for The Connelley Group to file bankruptcy." Where is this agreement? In fact, there is no such agreement. More than that, even if there were such an agreement, it would be meaningless. The Connelley Group was a Subchapter S Corporation owned solely and entirely by James W. Connelley. There was no other stockholder. Mr. Connelley alone had the authority to file bankruptcy or not. He chose to do so. Mohamed Poonja was appointed as the trustee. Case No. 93-56846 JRG. I have spoken with Mr. Poonja many times about this case and have visited his office. Mr. Poonja informs me that the debts of The Connelley Group have not been discharged in bankruptcy and will never be discharged in bankruptcy. Mr. Poonja is still investigating this case. The bankruptcy is still pending. The main thing hampering Mr. Poonja in his investigation is the unavailability of the books and records of Ishi Press International. During the relevant period, The Connelley Group was the sister corporation to Ishi Press International. The Connelley Group imported products from The Ishi Press in Japan and sold them to Ishi Press International in San Jose. The understanding was that The Connelley Group was just an empty shell. No expenses or salaries were supposed to be taken out of the Connelley Group. Janis Miller testified that Ishi Press International paid The Connelley Group for all of the shipments received from Ishi Press (Japan). Yet, The Connelley Group never paid Ishi Press (Japan) for $111,000 worth of shipments. James W. Connelley has always maintained that this $111,000 was lost through exchange rate fluctuations. However, I personally believe that James W. Connelley simply stole the money. I cannot prove this because of the unavailability of the books and records of Ishi Press International.
15. The main point is: What does it mean to say that "Richard Bozulich agreed for The Connelley Group to file for bankruptcy." The defendants claim that this means that Richard Bozulich intended to forgive the debt of The Connelley Group. This is obviously absurd. If Richard Bozulich had wanted to forgive the debt, he could have done so directly. Assuming that it is true that he wanted The Connelley Group to file bankruptcy, this tends to show that he intended to try to collect the money which was owed to him. A bankruptcy filing would be to give the opportunity for The Connelley Group to work out its debts.
16. There is a draft of an agreement attached to the counter claim and marked Exhibit 1. This is an agreement dated March __, 1994 under which Ishi Press International would pay a 17% royalty for the publication of any books which were originally published by The Ishi Press (Japan). However, it can be plainly seen that this agreement was not signed. James W. Connelley testified that Richard Bozulich agreed to this agreement but "for some reason he never sent back a signed copy of it". (Deposition of Connelley, page 153, lines 10-11). Mr. Bozulich states that although Mr. Connelley did propose this, it was ridiculous and he never agreed to any such thing. Here we have a classic case of statute of frauds. Does the statute of frauds require that such an agreement be signed, or is an oral agreement enough? According to the allegations of the defendants, this was an agreement in perpetuity. An oral agreement in perpetuity is barred by the Statute of Frauds.
17. I feel that it is clear that the statute of frauds require that this agreement be signed to be effective. This agreement under the interpretation offered by the defendants, passed all rights and titles to all books published by Ishi Press (Japan) to Ishi Press International, for no consideration whatever. Ishi Press (Japan) has been publishing books in Japan since 1969. It has around 100 books in print. Is it reasonable to believe that the rights to all of these books could be passed by oral agreement? I think not. Remember that this agreement would affect the rights of the authors to those books. Many books published by Ishi Press (Japan) were written by famous people, including some of the best go players in the world. These famous go players had and still have a personal relationship with Richard Bozulich and with John Power, who is an official of the Nihon Ki-in (Japan Go Association) in Tokyo. It is because of this personal relationship that these people agreed to have their books published by The Ishi Press (Japan). A major consideration is that Richard Bozulich is the world's leading promoter of the game of go. These famous go players also want to promote the game of go. James W. Connelley, Elwyn Berlekamp, Nathaniel Berkowitz and Hartland Snyder are unknown to these people. The members of the Berlekamp-Berkowitz-Snyder group are not go players. They are incapable of writing books about the game of go or of editing a go magazine. They have no interest in promoting the game of go. They are simply out to turn a quick buck.
18. The purported agreement marked Exhibit 1 would give to Ishi Press International the rights to publish the work of dozens of authors in perpetuity. I do not believe that any of those authors would agree to this, especially since it is now known that Ishi Press International does not pay royalties to its authors. I am one of those authors. I have a judgment in the amount of $5020 against Ishi Press International for the non-payment of royalties. I have never been able to collect this money because they keep shifting bank accounts and avoiding the payment of their debts. Another author is owed $19,000 by them. There are about a dozen different authors, none of whom have been paid.
19. The defendants to this action have the audacity to claim that they are not obliged to pay any royalties to the authors at all. They say that Richard Bozulich must pay the authors. They have not provided royalty statements, which is one of the issues in this suit. Yet, they claim that they now have the exclusive right world wide to publish every book ever published by Richard Bozulich in Japan. They even claim the rights to all future books which Richard Bozulich has not even written yet. For this reason, Richard Bozulich found another publisher. In essence, they now claim that they own all of the assets of Ishi Press (Japan). Please read their counter claim carefully. They are asserting the exclusive right to the Ishi Press name worldwide, in perpetuity. Yet, all of the agreements make it clear that Ishi Press International only had the exclusive right to distribute Ishi Press books in North America alone.
20. The defendants claim that they have the right to publish Go World magazine. Yet, Ishi Press International has never published Go World magazine. According to the testimony of James W. Connelley at deposition, Ishi Press International did print at least two issues of Go World magazine. In fact, it printed three. However, this was only because at that time it was cheaper to print in America than in Japan. Those three issues and all other issues were composed by Richard Bozulich and John Power in Japan. John Power originally established Go World magazine. In 1977, John Power signed a contract with Richard Bozulich which gave The Ishi Press (Japan) the publication rights to Go World magazine provided, of course, that Power was paid for his work. In most cases, John Power was the editor. If Go World was ever printed in America, the camera ready copy was mailed to Connelley for printing. In the one instance of which I am directly aware, Connelley received the camera ready copy in mid-1994 but held it for five months before sending it to the printer. This was one of a number of issues which triggered this litigation. Here is what Connelley said in his deposition (page 150, lines 10-15):
"A. We were never -- Ishi Press International was never the publisher of the magazine. All editorial work was always done in Japan. However, Ishi Press International did print the magazine in at least two cases. Again, the rising value of the yen made it noneconomical to produce products in Japan for sale in the United States."
21. The only written agreement which they have produced which is helpful to them and which was signed by Richard Bozulich was an agreement to allow Ishi Press International to use the logo and the name "Go World" and other names in North America. Connelley testified that the purpose of this contract was simply to allow Ishi Press International to continue to sell Go World and the other publications in North America, without having to meet the $70,000 annual quota. Connelley testified that this agreement did not give Ishi Press International the publication rights, but only the distribution rights and only for North America. Nevertheless, the other defendants, Berlekamp, Berkowitz and Snyder, who were in no way parties or participants to this agreement, all claim that this agreement gave them the publication rights in perpetuity. Here is what Connelley testified:
"A. The new distribution agreement granted Ishi Press International an exclusive license to use the Ishi Press trademark -- and I believe it was explicitly said Go World trade mark as well -- on products. I don't remember the other specific provisions of the agreement, but it -- but it was, I believe, and unlimited term as well."
22. In short, this agreement, even if it had been signed did not in any way pass the copyright on books from Ishi Press (Japan) to Ishi Press International. Yet the defendants claim that such a right did pass.
23. What this does to me and to all other authors is that our rights and titles to our own books have been slandered. Ishi Press International does not pay us any royalties at all and indeed claims that it is under no obligation to pay us royalties. Yet, it sells our books. We cannot go to any other publisher because Ishi Press International now claims that it holds the rights to all of our books. Hartland Snyder has written letters to numerous publishers and prospective publishers threatening litigation if our works are published, sold or distributed. We cannot even sue Hartland Snyder for this, because he is judgment proof and is virtually impossible to serve with process.
24. Consider the outrageous and highly insulting letter which Hartland Snyder wrote to John Power dated July 24, 1995 which is annexed hereto as an exhibit. It starts: "I was pleased to hear from you but surprised to learn that you thought you had any rights to Go World."
25. In fact, Go World was John Power's magazine. Hartland Snyder had absolutely nothing to do with Go World. Hartland goes on and on to state that he, Hartland, owns Go World and that John Power has no right whatever to that magazine. Hartland's claim was absolutely without basis. Hartland has written similar letters to all kinds of people including Jim Davies, Takashiro Yoshikawa, Bill Franke, Ing Chang Ki and Sidney Yuan. Because Hartland keeps claiming that he has the rights to publications to which he has no right, it has become almost impossible for any of us to get our works published. Note that Hartland in his letter to Power refuses to pay John Power for the work he has done on Go World. This is typical Hartland Snyder. He claims to own everything, but refuses to acknowledge any obligations in connection with that ownership.
26. Now, let us look at the allegations to the counter-claim: In paragraph 19 it is alleged that Ishi Press (Japan) sent to Ishi Press International products which had not been ordered and which were unmarketable. However, Connelley testified there was only one occasion that he could recall in which it had been shipped a product which had not been ordered. That involved a Tank puzzle in which Connelley had ordered 24 and Bozulich by mistake had sent 24 dozen. However, Connelley testified that the discrepancy only involved a few hundred dollars and had no significant impact on the business.
27. Here is the relevant testimony (Deposition of November 8, 1996, pages 133-134):
7 Q. Did Richard Bozulich ever ship you goods that you didn't want?
9 A. Sometimes.
10 Q. Did you ever receive anything from Richard
11 Bozulich that you never ordered?
12 A. Yes.
13 Q. Can you tell me what that was and when you
14 got it?
15 A. Oh, I don't remember a lot of specifics.
16 One of the instances was we had ordered some Tank
17 puzzles and we had ordered, I believe, two dozen, 24
18 of them, and he shipped 24 dozen.
19 Q. That sounds like a mistake.
20 MR. MIYAKE: Well, you can characterize it
21 any way you want.
22 Q. (By Mr. Sloan) Do you believe it was
23 deliberate or a mistake?
24 A. I don't know whether it was deliberate or a
25 mistake. He did not agree to take it back.
1 Q. What did you do with the puzzles?
2 A. As of December 1994, they were sitting in
3 the Ishi Press International warehouse.
4 Q. What was the total amount of money involved
5 in this Tank puzzle debacle?
6 A. I don't remember.
7 Q. Ballpark?
8 A. That particular instance is a few hundred
10 Q. Any other times?
11 A. There were other instances where he shipped
12 things we hadn't ordered.
13 Q. Can you tell me what they were?
14 A. I don't remember them. They were not large
15 amounts of merchandise that he shipped us that we
16 didn't order.
17 Q. So this was not a significant problem,
18 getting stuff you didn't order?
19 MR. MIYAKE: Vague and ambiguous in terms
20 of the words -- by use of the word "significant."
21 MR. SLOAN: Well, significant is, for
22 example, when you say a company is -- General Motors
23 gets sued for a billion dollars and they said, "Well,
24 we can afford a billion dollars. There is no impact
25 on our business." Significant is a term --
3 MR. MIYAKE: I'm not going to instruct him
4 not to answer. I'm just saying vague and ambiguous as
5 to the term "significant."
6 Q. (By Mr. Sloan) The question was did this
7 or did this not have a significant impact on the
8 company, receiving stuff like the 24 dozen Tank
9 puzzles and what other ones he can recommended? Did
10 this cause a significant impact or have a significant
12 A. No.
28. On the other hand, there is a letter from Connelley to Bozulich dated September 22, 1994, which states: "send us at least 500,000 yen worth of goods that you have on hand." Connelley does not seem to be very particular about what is sent to him.
29. I, Sam Sloan, personally sat in the Ishi Press office in Japan and watched as day after day Connelley sent by fax long lists of goods that he wanted Bozulich to ship to him. Bozulich would go out and purchase the goods if necessary and ship them to Connelley, on credit of course. Connelley had an insatiable appetite for goods to sell, just as he had an insatiable appetite for investment capital, constantly soliciting new capital from Berlekamp, Berkowitz, Lowenstein and others. All of this money has disappeared down the rat hole of Connelley's "maze of accounting". Any money which Connelley ever got, nobody ever got back. All of the money which anybody ever invested in any company controlled by Connelley eventually became a total loss.
30. Berkowitz and Berlekamp have both submitted declarations stating or implying that Bozulich defrauded them by concealing the substantial debts which Ishi Press International owed to Ishi Press (Japan). However, the fact is that all of the financial statements of Ishi Press International were prepared by Connelley. Bozulich was the creative person. He did not have either the time or the inclination to work up financial figures. He did not have access to the books and records of Ishi Press International. These records were being maintained by Connelley in San Jose. Bozulich was in Japan and came to America only once or twice a year and then only for a brief visit. I feel quite confident in stating that Bozulich never made any financial representations to Berkowitz, Berlekamp, Lowenstein or anybody else for that matter. All of these representations were made by Connelley.
31. As to the claim that Bozulich concealed the amounts owing to him in order to lure Berlekamp and Berkowitz into making their investments, exactly the opposite was the case. Bozulich has constantly and consistently demanded payments of the debts owed to him. Bozulich has also been audited by the Japan National Tax Office and his tax statements filed in Japan show these amounts being owed. Here is a quote from a letter dated January 2, 1993 addressed "To Jim Connelley and Elwyn Berlekamp". (There is an apparent error in the date. I believe that the correct date was January 2, 1994, rather than January 2, 1993):
"I hope you realize that by draining my operation here in Japan for the benefit of the US operation I have essentially lost all credibility and my reputation."
32. This letter then goes on to state that 15 million yen has "evaporated in the Connelley group" and that another 12 million yen is owed by the London operation. There is also a follow up letter dated January 5, 1994 in which many of the same basic points are repeated. Please note the following important point: Nathaniel Berkowitz made all of the "investments" he claims that he made in 1994 after the date of these two January, 1994 letters. Also, Berkowitz was brought in as an investor by Berlekamp and Connelley. Bozulich had nothing to do with bringing in Berkowitz. Berkowitz and Berlekamp have been friends for more than 20 years. If any fraud was perpetuated on Berkowitz, it was clearly Berlekamp and Connelley who perpetrated the fraud, as Bozulich was clearly on record, not only in these letters but elsewhere, as saying that money he had given to the companies controlled by Connelley had simply "evaporated".
33. The counter claim filed by the defendants makes numerous frivolous allegations. The first amended complaint, paragraphs 81-87, alleges that Sloan has intentionally disparaged Berlekamp, Berkowitz and Hartland Snyder's "professional integrity, honesty, dedication, reputation, diligence, competence and good will" and that Sloan published these representations without justification or privilege and with reckless disregard for whether they were true and that they expose Berlekamp, Berkowitz and Hartland Snyder to "hatred, contempt, ridicule, and obloquy in the Go-related and puzzle industry" and further that Berlekamp, Berkowitz and Hartland Snyder "have suffered injury to their reputation, shame, mortification, and hurt feelings" because of Sloan's publications.
34. The fact is that there are no such publications. I have been attacked repeatedly on the Internet and on the newsgroup rec.games.go by Anton Dovydaitis, who was at the time of these attacks, an employee of Ishi Press International and of Connelley, Berkowitz, Berlekamp and Hartland Snyder. I defended myself from these attacks. I have also received threats from Hartland Snyder and Nathaniel Berkowitz. I responded appropriately. However, I have been careful with my words. Indeed, the defendants have not cited the words which I have used to defame them, because there are none. It is well established that a suit for liable and defamation of character cannot stand without a statement of the words used. The counter claimants have not cited any such words ever said, spoken, printed or published by me or by Richard Bozulich (who has been exceptionally circumspect with regard to his public statements throughout this entire matter). This count of the counter claim must be dismissed.
35. The First Amended complaint filed by Berlekamp, Berkowitz and Snyder alleges in paragraphs 44-50 and in paragraphs 70-74 that I maintain monopoly power over the go-related market in the United States and that the my acts have been performed "in furtherance of a combination or conspiracy to restrain the trade of" Berlekamp, Berkowitz and Snyder and "to eliminate the competition in the publication, marketing, distribution and sale of Go-related products" and that these my acts have "constituted an unlawful trust and a conspiracy against trade."
36. Please note that Berlekamp and Berkowitz contradict themselves in several ways. They say that they have resigned as officers and directors of Ishi Press International and that they have sold their stock to Hartland Snyder. However, here they claim that they are being kept out of the go related business by the monopolistic acts of myself and Bozulich. They claim or at least imply that they still control Ishi Press International (which is in fact the case). They have to be clear about this: Are Berkowitz and Berlekamp in this business or trying to get into this business, or are they out of it? To the extent that Richard Bozulich ever had a go related monopoly, it was only because The Ishi Press (Japan) was almost the only publisher of go books in the English language in the entire world. Richard Bozulich either wrote or edited most of these books. Bozulich clearly had the legal right to have a monopoly over the "the publication, marketing, distribution and sale" of the go books which he personally wrote or published. The international copyright laws give him those rights. Since then, about five new companies have started publishing go books, freely entering the market which Richard Bozulich created, where none previously existed. As far as go equipment is concerned, such as go boards, go stones and go bowls, there are hundreds of companies in Japan, Korea, China, Hong Kong, Taiwan, Singapore, Holland and Germany and elsewhere around the world which manufacture and/or supply these goods. In no way has Richard Bozulich or myself ever had a monopoly or near monopoly over these items. These counts of the counter claim are frivolous and must be dismissed.
37. Many of the allegations of the counter claim are simply ridiculous. It seems that Mr. Miyake, counsel for the counter-claimants, must have obtained a complaint from some other lawsuit and simply done a global search and replace on his word processing machine. For example, in paragraphs 10 (c) and (d) it is alleged that The Ishi Press, Inc. did not maintain proper corporate records and minutes and did not conduct properly noticed director's and stockholder's meetings. However, The Ishi Press Inc. is a Japan corporation. Any corporate records and minutes would be in Japanese. I am sure that the defendant's counsel have never read or even tried to read or review these records. Also, the counter claimants are not stockholders in The Ishi Press (Japan). What is the relevance of this allegation and why are they bringing a suit for this in California, when the proper forum for this sort of complaint would be Japan. Clearly, this allegation is for harassment purposes only.
38. In paragraph 18, the counter claim alleges that "Counter-defendant Bozulich, individually and as the owner of IPJ, suffered and continued to suffer grave financial difficulties in Japan, which were unrelated to the financial condition of IPI."
39. The truth is that all of the problems of Ishi Press (Japan) were caused by Ishi Press International in San Jose. Annexed hereto is a tax statement filed by The Ishi Press (Japan) with the Japan National Tax Office. This document was obtained by the counter defendants pursuant to discovery. Under accounts receivable, it lists the following items (in yen):
Ishi London 11,774,717
Ishi International 7,603,360
Connelley Group 11,160,387
Elsewhere in the statement are listed the three other outstanding amounts due from Ishi (San Jose), which are 3,639,800 yen, 2,150,000 yen and 2,000,000 yen. This all comes to a total of 39,000,000 yen or approximately $390,000 US at current exchange rates. (The amount of 7,603,360 above is for the note for $42,868 at the prevailing exchange rate at the time of the note, which was 177 yen = $1 US.). It is easy to see that the financial problems of Richard Bozulich in Japan are entirely caused by the fact that the Connelley controlled companies owe the Bozulich companies more than $390,000, not counting interest. This amount also does not count the royalties personally owed to Richard Bozulich for the books he personally wrote.
40. Paragraph 19 alleges that "Counter-defendants [Bozulich] demanded that IPI absorb the exchange valuation losses and interest charges accruing on each shipment of goods."
41. This again is a frivolous contention. The goods were shipped in yen. When Ishi Press International received the goods, either Jim Connelley or Janis Miller signed the bill of exchange for the receipt of the goods. If they did not want the goods, why did they sign for them? Why did they go out and sell the goods to customers? Why did they not return the goods? These contracts and deliveries of goods were covered by the UCC. Naturally, if Ishi Press international did not pay on time, it was obliged to pay the interest. In fact, Ishi Press International hardly ever paid on time and did not pay for the last $111,000 in shipments at all.
42. Paragraph 23 (a) of the counter claim refers to the agreement which Bozulich never signed. He failed to sign it with good reason.
43. Regarding paragraph 24 (b) of the counter-claim, Richard Bozulich states that he never agreed to absorb the exchange valuation losses and the interest charges. Note that the allegation in paragraph 24 (b) of the counter claim is exactly the opposite from paragraph 19 of the counter claim. One wonders: Did Mr. Miyake actually read his complaint?
44. Regarding paragraph 24 (c), Richard Bozulich never agreed in writing to exchange the promissory note for $42,868 for another note for only $14,000 plus 20,000 shares of stock. Moreover, even if he agreed to this, the deal was never consummated. I know this for a fact because I have the original note for $42,868, signed by Mr. Connelley in blue ink, in my personal possession. The reason I have it is because the clerk of the court returned it to me after Neal successfully moved to vacate the default judgment obtained by Bozulich upon this note in the Santa Clara County Superior Court. Again, because of the absence of any writing to support this allegation in the First Amended Complaint herein, it must be dismissed under Statute of Frauds.
45. With respect to paragraph 24 (d), again there was no such agreement. This too is barred by the Statute of Frauds.
46. With respect to paragraph 24 (e), this $77,000 was in settlement of the London debt which was for 11,774,717 yen. All of the letters and correspondence exchanged on this matter concerned the London debt alone. Furthermore, the bulk of this amount was paid by Berkowitz. Berkowitz at that point in time was the sole owner of Ishi (London) but had not yet become an investor in Ishi Press International. Why would Berkowitz pay the debts of a company with which he was not involved? The only reasonable interpretation was that Berkowitz settled the debts of the company which Berkowitz owned, and not of some other company with which Berkowitz had no involvement. Please note that in the Declaration of Elwyn Berlekamp dated January 23, 1997 filed in support of a motion for bond, paragraph 3, lines 7-8, it is stated that the $77,000 was paid "in payment of all trade debts owed to him by IPI's subsidiary" which was Ishi London (although at that point in time Ishi London was no longer a subsidiary). Even Berlekamp does not claim that the $77,000 settled the much larger debts of Ishi Press International itself. Furthermore, paragraph 25 (b) (2) of the counter claim alleges that the $77,000 was "in full satisfaction of all debts owed .... in the United Kingdom." Finally, there is once again no writing, so this claim is barred by the statute of frauds.
47. Regarding paragraphs 24 (f) and 24 (g), again barred. No writing.
48. Regarding paragraphs 25 and 26, these paragraphs contain so many inconsistencies and contradictions that it becomes tiresome to address them all. It is a good thing that we have the statute of frauds to bar such claims. As to the allegation that Richard Bozulich attempted to assign the Ishi Press name to Kiseido, this is factually untrue. Kiseido has no connection and does not want to have any connection with Ishi Press. Go World simply found another publisher after Ishi Press International failed to pay for the previous issues of Go World which had been shipped to it and had failed to pay John Power for his work. In view of the defaults in payments, Go World had every legal right to seek out another publisher.
49. With regard to paragraph 27, the annual sales of Ishi Press International certainly increased by more than 50% from its inception in 1986 until 1994. With respect to the claim that Counter-defendant Bozulich made "extortionist demands for further capital to pay for his personal obligations in Japan" all the documents, letters and correspondence show that Bozulich was simply asking to be paid for the goods he had shipped plus the loans he had made to Ishi Press International.
50. With regard to paragraph 29, the meeting was perfectly lawful and properly conducted. The defendants had not held a meeting since September 1993 and were refusing to call the annual meeting. If fact, from that day to this, three years later, the defendants still have not held a stockholder's meeting. Note also that Ishi Press International has about 25 stockholders. Were it not for the illegal issuance to themselves of 158,397 and 560,000 shares, Berkowitz and Berlekamp would be minor stockholders. There would be several other stockholders with more shares than either Berlekamp or Berkowitz.
51. With regard to paragraph 29, the counter defendants do not want to terminate the existence of Ishi Press International. To the contrary, the counter defendants want to put Ishi Press International back together on a sound financial footing and to go back into the business of publishing go books. It is the defendants, Berlekamp, Berkowitz and Hartland Snyder, who are intent on milking down the corporation into nothing and then scuttling the corporation.
52. The allegations in paragraphs 30-33 have already been dealt with. With respect to paragraph 34, there are no corporate debts owed to the counter claimants. They have already taken out their money. Berlekamp in his declaration dated January 23, 1997 in support of his motion for a bond, paragraph 4, line 14, states that his "investments" were structured as R & D limited partnerships. Such partnerships are created for the purpose of generating tax losses. These partnerships were not investments in the corporation. These were investments in the partnerships. We are not privy to information as to whether Berlekamp gained or lost through these limited partnerships. Mr. Berlekamp certainly has no claim against the corporation for these partnerships. These partnerships were not taken up by the Board of Directors of Ishi Press International and are nowhere mentioned in the corporate minutes. All of the transactions now complained of by Professor Berlekamp are transactions which generated tax losses for him. Professor Berlekamp is an extremely wealthy individual with a net worth in the mid-eight figures. Since Professor Berlekamp seems so anxious to undo these transactions which benefited him so greatly, perhaps he should perform his civic duty by paying his taxes to the government. Bozulich, on the other hand, does not get the benefit of any tax loses, because they don't have that over in Japan. Any money which Bozulich lost is an actual loss, out of his pocket.
53. The second claim for relief, paragraphs 38-42, is just boiler plate, just Miyake's word processing machine churning out words which mean nothing. Bozulich is in fact an expert in the go related industry, where he has made his living for the last nearly 30 years.
54. The third claim for relief setting forth violations of the Sherman Anti-Trust Act arising from the go monopoly which I am alleged to hold is frivolous.
55. With regard to the fourth claim for relief, with regard to international suppliers, until relatively recently the only supplier of Ishi Press International was Ishi Press (Japan). Also, every issue of Go World magazine said that it was published in Japan. The magazine dealt almost exclusively with go in Japan. Ishi Press International (USA) never had any relationship with Go World subscribers. Ishi Press International was simply the distribution agent for Ishi Press (Japan). Ishi Press (Japan) had every legal right to demand the list of the subscribers to Go World magazine.
56. The fifth, sixth, seventh and eighth claims for relief are just more repetitive boilerplate, Miyake's word processing machine churning out more words.
57. The ninth claim for relief is the claim that I libeled and slandered them. This must be dismissed under the well known rule that the actual libelous words must be set forth in the complaint with particularity. No actual words are alleged here. The same is true of the tenth claim for relief.
58. The eleventh claim for relief is again frivolous. The name "Ishi Press" was first registered as a certificate of doing business in Berkeley, California in 1968. The Ishi Press, Inc. was formed in Japan in 1969. I incorporated The Ishi Press International, Inc. in Delaware in 1985. By the time that Ishi Press International, a California corporation, was formed in August, 1986, there were already three other Ishi Presses in existence. With respect to Go World, once again, Ishi Press International has never been the publisher of Go World and has never owned the name Go World. Go World has been published continuously in Japan since 1977.
59. The twelfth claim for relief is just boilerplate and more nonsense. The prayer for relief is especially ridiculous. The counter claimants want us to pay them triple the profits which we have gained from using "their" trademarks. However, there are no profits.
60. In summary, all of the allegations in the counter claim are frivolous and without legal basis. Moreover, the filing of this lawsuit is just part of a pattern of oppressive and malicious acts by defendants Berlekamp, Berkowitz and Hartland Snyder. Berlekamp came into this deal as a venture capitalist. He actually sought out Ishi Press International, not the other way around. The story is that Professor Berlekamp walked into Cody's Bookstore in Berkeley looking for a book on go and found an entire shelf of books, all of which were published by The Ishi Press. Berlekamp felt that any company which was able to command an entire shelf of a major bookstore would make a worthy investment and therefore asked his "broker", Hartland Snyder, to seek out and contact this company. That is how this all got started. Unfortunately, like almost all venture capitalists, Berlekamp thinks that his great wealth entitles him to the domination and control of this company, even though all of the creative output for the past nearly 30 years has come from Richard Bozulich. This situation has led to this litigation.
61. I need to address a number of points which persistently come up in this litigation. Berlekamp often states that Bozulich has conveyed the 197,000 which Bozulich owns to Berlekamp, or that Berlekamp has foreclosed on those shares or that the shares are no longer really valid. However, once again, there is no writing. Bozulich informs me that he never signed the shares over to Berlekamp. I have spent 18 years in Wall Street in the securities field. I know, as does anybody in that business, that unless the back of the stock certificate has been signed by the stockholder or a signed stock power or a signed hypothecation agreement has been obtained from the stock holder, then nobody can touch those shares. For example, if a customer owes money to the stock broker and the broker has a share certificate belonging to the customer, these shares still belong to the customer and cannot be transferred out of his name unless the customer has signed a stock power or a hypothecation agreement.
62. Here, Bozulich has signed nothing. I do not know where the actual share certificates in the name of Bozulich are. However, I do know that the corporate records of Ishi Press International show that Bozulich owns 197,000 shares. Therefore, those shares belong to Bozulich and he has the right to vote those shares at any stockholder's election. The claim being made that Bozulich had no right to vote those shares at the meeting of November 7, 1994 is simply without basis. If Professor Berlekamp wanted to "foreclose" on the shares, as he claims that he has done, it was necessary for him to file a court case, with notice to Bozulich, and to obtain a court order. Berlekamp never did that and it is too late for him to do so because he says that he has sold all his rights in this matter to Hartland Snyder who has claimed that he re-sold them to a person named "Cavalier."
63. Regarding the corporate minutes, I was allowed to look at the corporate minute book, with Hartland Snyder looking over my shoulder, in the San Jose offices in October, 1994. The most recent corporate minute in the minute book on that date was dated September, 1993, more than one year earlier. Since then, "minutes" for a directors meeting dated March 7, 1994 have materialized. These are the minutes which are being used to claim that the directors authorized the issuance to Berlekamp of stock options for 910,000 shares. However, Connelley, who testified that customarily either he prepared the minutes or else the corporate secretary, Timothy Tomlinson, prepared the minutes, had no knowledge of who prepared these so-called "minutes" dated March 7, 1994. Here is the testimony of Connelley on November 8, 1996, pages 83-84:
Q. (By Mr. Mar) Document 35 is the minutes of a meeting of the board of directors of Ishi Press International.
MR. SLOAN: Dated what?
MR. MIYAKE: March 7th, '94. So you got a question?
MR. MAR: I just want to wait for him to finish reading it.
Q. (By Mr. Mar) Have you read the document?
A. Yes, I have.
Q. Do you recall writing this document?
Q. Do you know who wrote this document?
A. I could only speculate. I do not know.
MR. SLOAN: May I look at it?
MR. MIYAKE: What's the next question?
MR. MAR: Just a minute. I need the document. You done?
MR. SLOAN: Give it back to me after you finish.
Q. (By Mr. Mar) Was the meeting of the board of directors held at the offices of Berkowitz and Company at 1095 Market Street on March 7th, 1994?
A. I don't remember the exact date, but one was held in March there, and March 7th is possible.
64. Thus, Mr. Connelley, the President of the corporation and the keeper of the minute book, did not know who wrote these minutes. This mystery was later solved when Professor Berlekamp testified that he wrote the minutes or at least contributed language thereto. It is clear that these minutes strongly favored Berlekamp because they appear to create a situation where a large block of stock can be issued to himself making the 120,000 shares owned by Connelley and the 197,000 shares owned by Bozulich essentially meaningless in the face of 910,000 or even 560,000 newly issued shares owned by Berlekamp. Professor Berlekamp also testified that these minutes were never signed and they never made it into the minute book. Thus, these minutes are worthless as a corporate record. Their only value is to reflect what Berlekamp claims happened at the March 7, 1994 meeting. Bozulich strongly disputes that version of what happened. Berlekamp was never more than a simple director. He was never the president, the secretary or any other corporate officer of Ishi Press International and clearly he had no legal authority to write up his own minutes.
65. Similarly, there are minutes for meetings allegedly held on November 10, 1994, and in January, 1995, April, 1995 and presumably on June 31 [sic] 1995. These meetings were all held after the shareholders meeting on November 7, 1994 in which these directors were voted out of office. Again, the minutes for these subsequent meetings are unsigned and there is no indication of who wrote them. I suspect that these minutes were written by Hartland Snyder. A situation is intolerable where no corporate minute book is kept or maintained and just anybody can write anything and claim that these are the official corporate minutes.
66. Regarding the 158,397 shares issued to Berkowitz, on or about October 1, 1994, Richard Bozulich sent a written demand by fax to Connelley and Berkowitz demanding a copy of the stockholder list. Although the by-laws require that such a list be produced upon request within five days, no timely answer was received to this request. The fact that the defendants refused to respond to this request was an additional factor which caused Bozulich to decide to call a stockholder's meeting. Bozulich called his meeting on October 26, 1994. Berkowitz apparently received the notice on October 28, 1994. On October 29, 1994, Berkowitz faxed his stockholder's list to Bozulich which showed Berkowitz holding 168,397 shares, representing the 158,397 newly issued shares plus 10,000 shares which Berkowitz had legitimately purchased earlier. It can be seen on the stockholders list used by Berkowitz in Berkowitz's own handwriting, "FAX ON OCTOBER 29, 1994." This was the first time we had any inkling that Berkowitz owned or claimed to own an additional 158,397 shares. Berkowitz had told me less than two weeks earlier that he owned only 10,000 shares. Please look at the letter dated July 24, 1995 from Hartland Snyder to John Power, page 3. It states:
"In the Fall of 1994 Bozulich attempted a take over of Ishi-US. He was now the largest shareholder because Berlekamp has converted most of his stock into options. Lowenstein (88,000 shares) and Connelley (120,000 shares) had about as much stock as Bozulich (200,000 shares). However, Bozulich miscalculated, he had forgotten about the convertible Ishi-UK note Berkowitz (158,000) had acquired with his purchase of Ishi-UK. Consequently, Bozulich lost his effort to take over the company."
67. There are several things which need to be said about this paragraph. With regard to Lowenstein's shares, Lowenstein told me in early November, 1994, just before the special stockholder's meeting, that he had never yet received any shares. At deposition, Lowenstein testified that he could not remember when he received the shares but he remembered that he did not receive them until some time long after the official issuance date. Also, Bozulich did not "forget" about the convertible Ishi-UK note. He never knew about it. The corporate minutes throughout the years 1991-1993 make no mention whatever of this note. I filed in this court as an exhibit the complete corporate minutes from August, 1986 up until September, 1993. Please look at those minutes. You will find no mention of the Torode notes. Bozulich has testified that a proposed loan from Torode was discussed at a 1991 meeting, but that he never agreed to accept a loan from John Torode at an interest rate of 30%, which he considered to be both usurious and bigger than the profit margins on the goods which Ishi Press sold. According to Bozulich, the matter was dropped and the loan was never approved by the board. Bozulich was never even told about any possible guarantee or convertibility of these notes. It appears that Torode was not told either, because he never demanded that Ishi Press International (USA) pay the notes, although he did make numerous demands that Ishi (London), the maker of the notes, pay. Also, Bozulich states that there was no valid reason for Ishi (London) to be borrowing money at all, since the reason given for the borrowing was to buy inventory for the Christmas rush. Bozulich was supplying goods on credit to Ishi (London) to sell. The purpose for setting up Ishi (London) was supposed to be to provide a distribution outlet for Ishi Press products, and for no other purpose, and certainly not to go into competition against Ishi Press. Why then borrow $40,000 to purchase inventory? Bozulich never agreed to this, and with good reason.
68. Bozulich shipped about $120,000 in goods to Ishi (London) on credit. Apparently Bozulich received only one minor payment for these goods. Ishi (London) was a total loss. The Torode note for $40,000 was never paid as well. What happened to all this money? A total of $160,000 is an awful lot to simply disappear. I do not know what happened to the money, but I have an idea. Connelley was the manager in charge of Ishi (London). The same thing happened to that money which happened to all the other money Connelley ever got his hands on.
69. In their motions for bond, Berlekamp and Berkowitz keep referring to the shares in Ishi (London) as worthless and the corporation as defunct as of December 23, 1993, when Berkowitz purchased Ishi (London) from Berlekamp and Berlekamp took a tax loss. However, on March 7, 1994, they did not think that. The corporate "minutes" prepared by Berlekamp as of that date describe the financial prospects for Ishi (London) in glowing terms. It reflects that they have hired this wonderful new sales manager, Tim Meyrick. The "minutes" by Berlekamp dated March 7, 1994 state: "Berlekamp was positive, largely because he thought it important to support our strong new partners in new Ishi-UK. He pointed out that Tim Meyrick had considerable experience in more closely related products, and so the chances that he would sell this product successfully seemed very good."
70. However, at our meeting in October, 1994, Berkowitz told me that Tim Meyrick had turned out to be simply a crook who had run away with all of the money. Berkowitz indicated that he had asked Scotland Yard to investigate this. Please remember that Berkowitz is a graduate of the London School of Economics. He was in charge of Ishi (London). If indeed there was a loss arising from the theft of an employee, this was a loss which Berkowitz, the owner, and certainly not Bozulich, should have to bear.
71. With respect to the meeting between myself, Berkowitz and Hartland Snyder in the office of Berkowitz in October, 1994, Berkowitz testified at his deposition that I simply broke into and invaded his office without any invitation whatever. However, this meeting had been scheduled in advance by Hartland Snyder. I had an appointment. I arrived at the office at the same time as Hartland. If Berkowitz feels that I invaded his office, either he is lying or else Hartland never told Berkowitz that he was bringing me along to the meeting.
72. Regarding financial statements, the defendants contend that, as Bozulich was chairman of the company from its inception in 1986 until early 1994, he was responsible for the financial statements. However, I know for a fact that Bozulich knows nothing about financial statements and never looks at them. Connelley, who prepared the financial statements, has a master's degree in business administration. Also, Connelley prepared different statements for different people to serve different purposes. Annexed hereto is a financial statement dated September 30, 1992. It shows "Accounts Payable Ishi Press Japan $141,503.19" and "unrealized currency gain/loss ($13,328.34)". This proves several things. It proves that the $111,000 which Connelley later claimed were suffered by Ishi Press International in exchange rate losses was bogus because, as of September 1992, there was a total loss (or was it a gain) of $13,328.34. During the subsequent year from then until December, 1993, when the Connelley Group filed for bankruptcy, the yen hovered at around 110 to the dollar, never going up or down significantly, and so there could have been no significant exchange rate loss for that year.
73. More importantly, this balance sheet shows the amount owing to Ishi Press Japan as $141,503.19. Yet this money was never paid. What happened to this amount? Did it "evaporate" in Connelley's maze of accounting?
74. Regarding this "maze of accounting", it will be seen in several places that statements are made that all the debts owed to Richard Bozulich and to Ishi Press (Japan) have been paid off "in the normal course" and that Janis Miller produced the accounting. However, Janis Miller in her own deposition denied that she had produced any accounting at all. Here are some excerpts from her deposition, starting from page 34 and continuing to page 57:
Q. (By Mr. Mar) Do you remember who did the accounting for the Connelley Group?
A. I think Jim did.
Q. Richard Bozulich, in one of the complaints, alleges that he's owed a note worth $42,000. And do you remember anything about that?
Q. Did you do the accounting for notes payable?
A. What do you mean?
Q. Did you do -- was it your job to do the accounting for the records for notes payable?
A. What records?
Q. Did the company keep financial records of notes payable?
MR. MIYAKE: Notes owed by the company?
MR. MAR: Yeah, notes owed by the company.
THE DEPONENT: Ishi Press?
MR. MAR: Ishi Press International.
MR. MIYAKE: You know what notes are?
THE DEPONENT: Generally, yes, I know what notes are. Well, I know there was an account in accounts payable for notes; yes, records were kept about notes.
Q. (By Mr. Mar) Were financial records kept on loans payable?
A. I don't remember an account in the accounting called "loans payable."
Q. Does the phrase, "exchange rate loss" -- have you ever heard that before?
A. Sure, yes.
Q. Isn't it true that when goods are shipped from Japan to the U.S. there could be an exchange rate loss?
A. I don't know.
Q. Now, when goods were shipped from Bozulich's Company to Ishi Press Incorporated to the U.S., do you recall what bore the exchange rate loss between the Ishi Press Incorporated and Ishi Press International?
A. I don't know.
Q. Do you recall if Ishi Press International was sending money to Richard Bozulich's daughter?
[Skip to page 40]
Q. Did you prepare an accounting from Mr. Connelley's instructions of money and royalties owed to Richard Bozulich and his company in Japan?
A. What do you mean "prepare an accounting"?
Q. Account for any money that might have been owed to Mr. Bozulich or his company in Japan.
MR. MIYAKE: By Ishi Press International, right?
MR. MAR: (Nods head up and down).
MR. MIYAKE: Mr. Mar shakes his head affirmatively.
THE DEPONENT: Ongoingly the accounting system maintains records of monies owed to and from Mr. Bozulich. Do you mean something else?
Q. (By Mr. Mar) Did you prepare that accounting or did Mr. Connelley?
A. I don't know how to answer that question.
Q. Do you remember who did the accounting of the money allegedly owed to Richard Bozulich for his company in Japan?
Q. Between '93 to '95.
A. Well, I did entry work into the accounting system for bills coming in to Ishi Press and checks or cash being disbursed by Ishi Press. Is that what you mean?
Q. Do you remember preparing an accounting of any of the money allegedly owed to Richard Bozulich?
A. Do you mean something other than entering invoices and checks into the accounting system?
A. Okay. Yes, I entered invoices and checks into the accounting system.
Q. With regard to Mr. Bozulich?
A. With regard to the business of Ishi Press International.
Q. But do you remember doing the accounting for Mr. Bozulich or the money supposedly owed to him?
A. I certainly know in the scope of my job doing entry work I entered invoices issued by Ishi Press Japan and entered payments that had been made to him.
Q. Do you remember what were the results of the accounting for Mr. Bozulich?
A. It would change from day-to-day, week-to-week, month-to month, year-to-year.
[Skip to page 51]
Q. (By Mr. Mar) Okay. Do you remember receiving any -- do you remember Ishi Press International receiving any loans from Richard Bozulich?
MR. MIYAKE: Wait. That question is asked and answered.
MR. MAR: You answered that already?
THE DEPONENT: I think I answered that already.
MR. MIYAKE: What was her answer to that question again?
MR. MIYAKE: She says no, she doesn't remember.
Q. (By Mr. Mar) Did you prepare an accounting at Mr. Connelley's instructions of the money and royalties owed to Richard Bozulich and Ishi Press of Japan?
A. As a normal appointment of my job during the period of time I was doing the accounting entry, I entered information about royalties owed to the Ishi Press Japan.
Q. Do you recall any specific loans made by Bozulich to Ishi Press International?
MR. MIYAKE: Wait. This is the same question that you asked a number of times and she's already answered a number of times.
MR. MAR: What was her answer to that question again?
MR. MIYAKE: Which question?
MR. MAR: Do you remember any specific loans --
MR. MIYAKE: No, she already answered that the --
MR. MAR: Wait. Let me get the answer. Did she acknowledge that -- yeah, I think she answered it, but what was the answer again? (Reporter reads record)
Q. (By Mr. Mar) When you prepared an accounting of the money and royalties owed to Richard Bozulich, what were the results of the accounting?
MR. MIYAKE: Well, objection; assumes facts not in evidence; mischaracterizes prior testimony; lacks foundation; vague and ambiguous. I think she responded that in her ordinary course of her duties she entered information to the software pertaining to invoices, bills paid by Ishi Press International and -- bills to Ishi Press International and checks disbursed to Ishi Press International, something to that effect. It's not verbatim, but whether that constitutes an accounting, I don't think she's ever testified that she'd done an accounting as an accounting is understood either in the profession or legally. So that it's also argumentative because it's pregnant with all kinds of meanings that if she says yes to or gives a response to she's going to adopt by implication.
Q. (By Mr. Mar) Was Bozulich still owed money after this accounting was made?
MR. MIYAKE: Well, the same objection because you used the same word. Let me take a short break.
[Skip to Page 56]
Q. Did you ever prepare a handwritten statement of accounts owed to Richard Bozulich or the Ishi Press?
A. I remember writing some sort of a summary, I guess; I'm not sure what to call it; having pulled information from accounting software, Richard's invoices, something like -- things like that, the checkbook.
Q. Do you remember what year that was?
A. No, I don't specifically remember what year that was.
Q. Do you remember any specific figures from the invoices?
MR. MIYAKE: Wait. At any time since she started?
Q. (By Mr. Mar) Of Richard Bozulich's invoices, of this summary that you pulled.
A. Do I recall any specific amounts from invoices?
Q. From these invoices of Richard Bozulich that you pulled, or this summary?
A. I do not recall any specific invoice amounts from Richard Bozulich.
Q. Uh-huh. Do you recall whether Ishi Press International paid off these invoices or not?
MR. MIYAKE: The invoices that were her summary?
MR. MAR: Yes.
THE DEPONENT: I don't recall the specifics on the summary or any payments of invoices on that summary.
75. Thus, the testimony of Janis Miller is "vague and ambiguous", as Mr. Miyake so aptly puts it. She is clearly not prepared to take the fall for James W. Connelley. The statements frequently made by Jim Connelley and Hartland Snyder that "Janis did the accounting" and "the accounting done by Janis Miller shows that Bozulich was not owed any money and in fact was overpaid" are clearly not true, because Janis by her own testimony never did any such accounting.
76. Attached as an exhibit is the accounting which the defendants have produced pursuant to discovery which they state is the accounting which Janis Miller did. It is nine pages long. Be prepared for a shock. What you will see is totally unintelligible. More than that, none of the items in dispute are listed there. The $42,868 note is not there nor is the loan for the 3,639,800 yen or the 2 million yen loan or the 2,150,000 yen loan listed in this "accounting". Nobody can tell what is involved here, except possibly that these are royalty payments owed. Ishi Press International reprinted eight different books which were originally published by the Ishi Press (Japan). One of these books was reprinted three times. All of these books have been sold. Ishi Press International is now out of books. These print runs were generally of 3,000 to 4,000 books each, so more than 30,000 books have been printed and sold. None of the authors of these books have been paid any royalties at all. There are primarily journal entries reflecting movement back and forth between various accounts, without mention of actual payments direct to Richard Bozulich or to Ishi Press (Japan) or to any of the authors.
77. These statements are the last statements ever to come out of Ishi Press (San Jose). The last and most recent balance sheet for Ishi Press (San Jose) is dated June 30, 1994, nearly three years ago. Since then, under the regime of Hartland Snyder, no financial records have been maintained, no income tax statements have been filed, no FICS or unemployment insurance or social security payments have been made. Nothing has been filed with any governmental or taxing authority (other than what I personally have filed). In short, the corporation is being operated as the private business of Hartland Snyder. Remember that this corporation has about 25 stockholders, including investors in Japan and Australia as well as several states of the United States. Those other shareholders have no idea what is going on.
WHEREFORE, for all of the reasons set forth above, this motion for summary judgment should be granted.
Samuel H. Sloan
I, Samuel Sloan, have read the foregoing declaration and know the contents thereof. The same is true of my own knowledge, except as to those matters which are stated upon information and belief, and, as to those matters, I believe them to be true. I declare under penalty of perjury under the laws of California that the foregoing is true and correct.
January 29, 1997
Samuel H. Sloan