BOF 19 (8183)
THE BIBLE SPEAKS,
'United States Bankruptcy Court
For the Western District of Massachusetts
Case No. 86-40392-JFQ
PROOF OF CLAIM
I. (If claimant is an individual claiming for himself) The undersigned, who is the claimant herein, resides at ** [if claimant is a partnership claiming through a member] The undersigned, who resides at ** is a member of . a partnership. composed of the undersigned and of ** and doing business at** and is authorized to make this proof of claim on behalf of the partnership.
[If claimant is a corporation claiming through an authorized officer) The undersigned, who resides at"
is the of
a corporation organized under the laws of
and doing business at **
and is authorized to make this proof of claim on behalf of the corporation.
[If claim is made by agent) The undersigned. who resides at McDermott, "I11 & Emery, One Post
Office Square, Boston, Massachusetts 02109 is the agent of Elizabeth Dovydenas
of ** 207 Under Mountain Road, Lenox, Massachusetts 01240 and is
authorized to make this proof of claim on behalf of the claimant.
The debtor was, at the time of the filing of the petition initiating this case, and still is indebted (or liable) to this claimant, in the sum of
3. The ground of liability) is as follows: Rescission of certain transfers of assets,
described in the Complaint and Amendment to Complaint filed in. the Superior Court of the*.
(If the claim is founded on a writing) The writing on which this claim is founded (or a duplicate thereof) is attached hereto [or cannot be attached for the reason set forth in the statement attached hereto).
(If appropriate) This claim is founded on an open account, which became (or will become) due on
. as shown by the itemized statement attached hereto
Unless it is attached hereto or its absence is explained in an attached statement, no note or other negotiable instrument has been received for the account or any pan of it.
6. No judgment has been rendered on the claim.) xxxx
7. The amount of all payments of this claim has been credited and deducted for the purpose of making this proof of claim. 8. This claim is not subject to any setoff or counter-claim, xxxx
9. No security interest is held for this claim xxxxxx
[If security interest in the property of the debtor is claimed) The undersigned claims the security interest under the writing referred to in paragraph 4 hereof for under a separate writing (or a duplicate of which) is attached hereto. or under a separate writing which cannot be attached hereto for the reason set forth in the statement attached hereto]. Evidence of perfection of such security interest is also attached hereto.
10. This claim is a general unsecured claim, except to the extent that the security interest, if any. described in paragraph 9 is sufficient to satisfy the claim. (If priority is claimed, state the amount and basis thereof. J
*(3) cont. Commonwealth of Massachusetts, C..A. 86-0260, based on the facts and cases set forth therein.
(For Office Use Only)
Total Amount Claimed
(Print or Type Full Name of Creditor)
Name of Creditor:
T. Walker, her attorney-in
Penalty for Presenting Fraudulent Claim. Fine of not more than 55.000 or imprisonment for not more than 5 years or both-Title 18. U.S.C. 152.
'Include all names wed by debtor within last 6 years. "State mailing address.
COMMONWEALTH OF MASSACHUSETTS
BERKSHIRE, SS. SUPERIOR COURT DEPARTMENT OF THE TRIAL COURT
v. ) Civil Action No.
THE BIBLE, SPEAKS, ) CARL H. STEVENS and ) KATHLEEN HILL, )
COMPLAINT FOR RESCISSION
1. The plaintiff Elizabeth Dovydenas is an individual residing in Lenox, Massachusetts.
2. The defendant The Bible Speaks (hereinafter sometimes referred to as "TBS") is a Maine corporation with a principal place of business in Lenox, Massachusetts. It holds itself out as a religious and charitable organization.
3. The defendant Carl H. Stevens is an individual residing in Lenox, Massachusetts. He is the founder and is president of The Bible Speaks.
4. The defendant Kathleen Hill is an individual residing in Lenox, Massachusetts. She is an employee of The Bible Speaks and at all relevant times acted as agent for The Bible Speaks and for Stevens.
II. Causes of Action
5. In 1981, plaintiff and her husband, Jonas Dovydenas ("Jonas") moved to Lenox, Massachusetts. At some time thereafter they began to attend services at the campus of The Bible Speaks donations to The Bible Speaks in cash or by check. During this time defendants became aware that plaintiff was a person of substantial means.
6. After becoming aware of plaintiff's financial situation, defendants acted to encourage plaintiff's further involvement in the activities of The Bible Speaks and to establish personal and confidential relationships between plaintiff and its members. Representatives of TBS, including the defendant Stevens, visited plaintiff after an early gift (made by check) to encourage her further participation in the group. Members of the "Visitation Committee" of The Bible Speaks, including the defendant Hill, further solicited plaintiff's active involvement in the activities of the group. Members of The Bible Speaks assumed positions within plaintiff's household.
7. Plaintiff was encouraged by defendants to make further donations to The Bible Speaks and to demonstrate her involvement with the group by participating in various programs and activities sponsored by the group. She was further encouraged by defendants to introduce various wealthy persons in the community to the defendant Stevens and to identify for TBS other persons of wealth.
in Lenox. Between 1982 and mid-1984 plaintiff made various
8. By 1983, Jonas informed plaintiff that he had questions with respect to the activities of TBS. Defendants acted, however, to ensure the continued involvement of plaintiff in the members of the group acted to alienate plaintiff from her husband and from other family members. Plaintiff was told by them that Jonas was evil and could not be trusted. Stevens told plaintiff that women occupy a subservient position to men but that he would substitute himself for Jonas and would provide plaintiff with direction and control.
9. Pursuant to the urgings of defendants, plaintiff increased her involvement with The Bible Speaks. By 1984, she attended services and/or training sessions at the TBS campus for several hours each day, six days per week. The defendant Stevens generally presided over such services and training sessions. In addition to listening to Stevens for several hours each day, plaintiff was instructed to listen to audio tapes of Stevens during other times of the day. This continued throughout 1985. In addition, plaintiff attended numerous personal "counseling" sessions with Stevens at which she discussed with him all aspects of her personal, family and financial affairs.
10. By the end of 1984, plaintiff had developed an intense emotional dependence upon Stevens and Stevens occupied a confidential relationship with plaintiff. This continued throughout 1985.
group. In that connection defendants Stevens, Hill and other
11. During the early period of plaintiff's involvement with The Bible Speaks, the defendant Hill began to insinuate herself into plaintiff's personal affairs. At all relevant times, Hill was an employee of The Bible Speaks, and a confidante of the defendant Stevens. She was an employee in the business office
of The Bible Speaks and a member of the "Visitation Committee" which served public relations and solicitation functions for The Bible Speaks.
12. Acting on behalf of The Bible Speaks and Stevens, Hill established and maintained an intimate and confidential relationship with plaintiff. Hill told plaintiff that because of her experience in financial matters she could provide assistance in the management of plaintiff's financial affairs. During 1984 and 1985, she acted systematically to create and sustain an intense emotional dependence by plaintiff upon her as well as upon Stevens. At the same time, she acted to monitor virtually all of plaintiff's personal and financial affairs, the substance of which, upon information and belief, she reported back to Stevens.
13. During this period Hill counseled plaintiff, on a continuing basis:
(a) That she should separate herself from her husband and that she should maintain secrecy from her husband with respect to her financial affairs;
(b) That she should separate herself from her family and that she should maintain secrecy from her family with respect to her financial affairs;
(c) That she should permit Hill to assume direction of her financial affairs;
(d) That she should remove her assets from the management and custody of the Okabena Company which had theretofore managed her financial affairs as well as those of other members of her family and which had acted as financial custodian and record-keeper; (e) That she should make substantial gifts to The Bible Speaks;
(f) That she should seek financial advice only from persons approved by The Bible Speaks;
approved by The Bible Speaks;
(h) That she should make out a new will leaving substantial assets to The Bible Speaks and nothing to her children;
(i) That she should offer a substantial payment to Jonas in return for his agreement not to interfere with plaintiff's further transfers of funds to The Bible Speaks or with her continued association with the group.
14. During 1984 and 1985, Hill attended plaintiff's private
(g) That she should seek legal advice only by persons "counseling" sessions with Stevens. On such occasions, Stevens and Hill discussed the necessity for plaintiff to alienate and separate herself from her husband and family as well as from sources of personal or financial advice who were not controlled or approved by The Bible Speaks. Throughout this period, Stevens and Hill urged plaintiff to transfer substantial portions of her assets to The Bible Speaks and counseled plaintiff as to how such transfers could be effected without the knowledge of her family members or without the knowledge of others who could be expected to render independent financial advice.
15. Throughout the period of plaintiff's involvement with The Bible Speaks defendants acted to instill in plaintiff a suspicion and distrust of all persons not associated with The Bible Speaks or approved by Stevens and a fear of disastrous consequences should plaintiff leave the group or fail to do Stevens' bidding. In late 1985 Stevens told plaintiff that Jonas would soon die a violent death because of his opposition to The Bible Speaks. On numerous occasions he warned plaintiff and others that the consequence of one's leaving The Bible Speaks or failing to follow Stevens' directions would be personal misfortune, family tragedy, serious illness or death. Such fearinducing and intimidating warnings were constantly reinforced by Hill.
16. In October or November, 1985, Hill counseled plaintiff to make a vow of personal loyalty to Stevens and to The Bible Speaks. Subsequently, after a discussion of her personal finances with Stevens in his office, plaintiff made and Stevens accepted such a vow.
A. COUNT ONE - RESCISSION FOR LACK OF DONATIVE INTENT
17. Prior to her involvement with The Bible Speaks plaintiff did not generally become involved in the management of her financial affairs. Plaintiff had no training in business or financial matters and generally relied upon the advice of family members, financial advisors and independent experts in connection with investment matters, financial management, tax considerations and accounting and legal matters.
18. As alleged above, once plaintiff became involved with The Bible Speaks, defendants acted systematically to alienate from family, financial advisors and other possible sources of independent financial advice and thereby to deprive her of any such independent counsel or advice.
19. At the time of plaintiff's involvement with The Bible Speaks she was susceptible to the influence of designing persons. By late 1984, plaintiff's mental capacity had been diminished such that she was incapable of understanding the significance or the effect of financial transactions involving her assets.
20. In or about December, 1984, plaintiff transferred 31,000 shares of common stock of Dayton Hudson Corporation to The Bible Speaks. Such shares had a market value on the date of transfer of $1,001,031.25. At the time of such transfer, plaintiff was incapable of understanding the significance and effect of such transaction and did not possess the requisite donative intent necessary to make a gift of such assets to The Bible Speaks.
21. Between June 1984 and April 1985, plaintiff also made other transfers of Dayton Hudson stock to The Bible Speaks and
time of such transfers plaintiff did not possess the requisite donative intent necessary to make gifts to The Bible Speaks or to Stevens.
22. In or about May 1985, plaintiff transferred 125,400 shares of common stock of Dayton Hudson Corporation to The Bible Speaks. At the time of transfer such shares had a market value of $5,325,000. At the time of such transfer, plaintiff was incapable of understanding the significance and effect of such transaction and did not possess the requisite donative intent necessary to make a gift of such assets to The Bible Speaks.
23. Between May 1985 and December 1985, plaintiff transferred additional funds to The Bible Speaks. Such transfers included checks for $14,000 in July 1985; for $50,000 in September 1985; for $10,000 in October 1985; for $4,000 in November 1985; and for $2,000 in November 1985. Other amounts were transferred in cash and during this time plaintiff transferred $10,000 in cash to Stevens. At the time of such transfers plaintiff was incapable of understanding their significance and effect and did not possess the requisite donative intent necessary to make gifts to The Bible Speaks or to Stevens.
24. In or about December 1985, plaintiff transferred an additional $500,000 to TBS. At the time of such transfer, she was incapable of understanding its significance and effect and transferred cash to The Bible Speaks and to Stevens.
At the ****** did not possess the requisite donative intent necessary to make a gift of such assets to The Bible Speaks.
25. At all relevant times, defendants knew or should have known that plaintiff was incapable of understanding the significance and effect of such transfers of funds and that she did not possess the requisite donative intent necessary to make gifts to TBS or to Stevens.
B. COUNT TWO - RESCISSION FOR UNDUE INFLUENCE
26. Plaintiff repeats and realleges the allegations of paragraphs 1 through 25.
27. By late 1984, plaintiff had become intensely emotionally dependent upon Stevens and Hill and relied upon them to direct her personal life and to dictate the conduct of her financial affairs. At all relevant times, defendants were well aware of this intense emotional dependence which, indeed, had been fostered by them. Having created such relationship, defendants acted thereafter to exploit it to the financial advantage of TBS and of Stevens.
28. Pursuant to the constant adjuration and importuning of defendants, plaintiff acted, beginning in early 1985, to structure her financial affairs in such a way that she could transfer her assets to The Bible Speaks or to Stevens without the knowledge of family members, financial advisors or others not approved by TBS. At the direction of Stevens and Hill, the "decision" to transfer stock valued in excess of $5,000,000 in May 1985 was kept secret from Jonas and other family members. Plaintiff was counseled by Stevens and Hill to demand of the Okabena Company, her former financial advisor, that such transfer not be revealed to family members. The fact of such transfer was concealed from such persons by plaintiff and pursuant to the father throughout 1985 that she had made no further transfers of funds to TBS after December 1984.
29. In late 1984, Jonas had informed Stevens of his concern with respect to plaintiff's ability to make decisions relating to transfers of funds to The Bible Speaks. Stevens promised Jonas that TBS would not accept any further "gifts" from plaintiff without notifying him.
30. In spite of such undertaking, Stevens thereafter counseled plaintiff with respect to her transfer of securities having a market value in excess of $5,000,000 to TBS in such a way that her husband and family members would not be informed of such transfer. Because the securities were being held by the Okabena Company, which also acted as financial manager for other members of plaintiff's family, both Stevens and Hill counseled plaintiff to demand of Okabena that the securities be transferred without any notification to other members of plaintiff's family. During late April and early May 1985, Hill counseled plaintiff with respect to the substance of what plaintiff should say to Okabena and actually "rehearsed" such communications with her. Stevens direction of Stevens, plaintiff informed both Jonas and her and Hill suggested to plaintiff that her calls to Okabena be made from the TBS administration building in which Stevens' office was located. Hill was always present with plaintiff during her telephone calls to Okabena, the substance of which, upon information and belief, she reported back to Stevens.
31. Upon information and belief, the telephone system in the TBS administration building permitted the monitoring of plaintiff's conversations with Okabena by others not_ in the room.
32. In early May 1985, 125,400 shares of common stock of the Dayton-Hudson Corporation, having a market value of approximately $5,325,000, were transferred by Okabena to TBS upon plaintiff's instructions. At no time prior to such transfer or throughout the remainder of 1985 did plaintiff acknowledge such transfer to her husband, other family members or discuss it with any attorney, accountant or financial advisor not approved by The Bible Speaks. Subsequent to such transfer, Stevens denied to Jonas that plaintiff had made any gift or donation to TBS after December 1984 and swore "on the Bible" that TBS had accepted no gifts from plaintiff in 1985.
33. Throughout 1985, Stevens and Hill regularly told plaintiff that she should not discuss her financial affairs with outsiders or persons not approved by TBS. Because of perceived difficulties in effecting the transfer of Dayton-Hudson shares being managed by Okabena Company to TBS, Stevens and Hill counseled plaintiff that she should remove her assets from management by Okabena and have such assets transferred to a financial
manager approved by Stevens. Stevens and Hill also counseled plaintiff that her legal affairs should be handled by the attorney who represented TBS and that her accounting and tax matters should be handled by the accountant for TBS. The stated purpose for such changes, as discussed among plaintiff, Stevens and Hill, was to facilitate a transfer of plaintiff's assets to TBS. Pursuant to such discussions, plaintiff did in fact retain as her personal attorney the attorney who represented TBS and retained as her accountant and tax advisor the accountant for TBS. She also caused substantially all of her remaining assets to be transferred to the financial manager recommended by Stevens who, upon information and belief, is also the investment advisor to TBS. Stevens and/or Hill were present during all of plaintiff's meetings and telephone discussions with such persons. Hill caused plaintiff to record certain such discussions, upon information and belief, in order that such recordings could be monitored by Stevens.
34. At the instance of Stevens and Hill, plaintiff obtained a private Post Office box in Lee, Massachusetts in order that documents and correspondence relating to her transfers of assets could be received by her without the knowledge of family members.
35. At the instance of Stevens and Hill, plaintiff kept tapes of discussions referred to above as well as all of her financial records in a filing cabinet located within Hill's apartment on the campus of The Bible Speaks.
36. All assets transferred by plaintiff to The Bible Speaks and to Stevens during 1985, as alleged above, were transferred
upon her by defendants, and in transferring such assets, plaintiff submitted to the over-mastering effect of the improper conduct and undue influence of defendants.
C. COUNT THREE - RESCISSION FOR FRAUD
37. Plaintiff repeats and realleges the allegations in paragraphs 1 through 36. During the period of the relationship between plaintiff and defendants, defendants made numerous and substantial misrepresentations to plaintiff with respect to the activities of The Bible Speaks, the activities of Stevens and the uses to which donations to The Bible Speaks would be put. Defendants knew such misrepresentations were false or recklessly disregarded their truth or falsity. Certain such misrepresentations were express; others were implied. Such misrepresentations were material to plaintiff's decisions to transfer assets to The Bible Speaks during 1984 and 1985, and plaintiff -relied upon such misrepresentations in transferring assets to The Bible Speaks.
38. More specifically, such misrepresentations included the following:
a. Defendants misrepresented Stevens' training and qualifications and held Stevens out as having been awarded by plaintiff as a result of improper and undue influence exerted
the degree of Doctor of Divinity after the completion of the prescribed course of study for such degree. Upon information and belief, however, Stevens has never engaged in such studies but rather he purchased from a "diploma mill" located in the State of Tennessee a certificate falsely certifying that he had been awarded such degree. Upon information and belief, other principals of The Bible Speaks similarly purchased such fraudulent degrees.
b. Defendants misrepresented the uses to which funds transferred by plaintiff to TBS would be put. While stating that such funds would be used for charitable and religious purposes, defendants did not disclose to plaintiff that in fact such funds would be used, inter alia:
for the purchase of a south Florida condominium for Stevens' private use
for making payments to former members of TBS who threatened litigation to recover contributions made under circumstances of fraud or undue influence
for personal expenditures by the defendant Stevens.
c. Defendants explicitly and implicitly held out The Bible Speaks as a legitimate charitable and religious organization to whom tax-deductible donations could be
made. Upon information and belief, however, The Bible Speaks was involved in and sponsored numerous and substantial activities which were unrelated to the purposes of a religious and charitable organization and which could jeopardize its tax-exempt status including political and various profit-making activities. Further, upon information and belief, certain income of TBS accrued and inured to the personal benefit of Stevens and other TBS principals.
d. Defendants misrepresented to plaintiff the financial condition of TBS and the need for contributions made to it. Plaintiff was informed by Stevens and other TBS personnel that TBS faced financial ruin without substantial contributions by plaintiff. Upon information and belief, the financial condition of TBS was at all relevant times substantially better than had been represented to plaintiff.
e. Upon information and belief, TBS was participating in schemes to defraud the Immigration and Naturalization Service ("INS") and the Internal Revenue Service by hiring out members of the group, including foreign nationals present in the United States on student visas, as domestic servants, housekeepers, babysitters and in other capacities. TBS instructed such persons to accept payment for services in the form of checks made payable to TBS (or to its affiliated "Stevens School of the Bible") in order that such payments be kept secret from the INS and in order that they be exempt from taxation.
D. PRAYERS FOR RELIEF
WHEREFORE, plaintiff prays:
1. That after hearing defendants The Bible Speaks and Stevens be ordered to account to plaintiff and to this Court for the expenditure of all funds received by them from plaintiff and/or of funds realized by them upon the sale of assets received by them from plaintiff.
2. That this Court set a discovery schedule not to exceed three months and that this action be advanced for trial immediately thereafter.
3. That after hearing this Court enter an order declaring all transfers of assets by Elizabeth Dovydenas to The Bible Speaks and/or to Carl H. Stevens between and including December 1984 to December 1985 to be void and to be rescinded and ordering defendants The Bible Speaks and Stevens to repay such amounts to plaintiff forthwith, with interest.
4. That plaintiff be awarded the costs of this action together with her reasonable attorneys' fees.
Cordon T. Walker .
Eric R. Dannenmaier McDermott, Will & Emery One Post Office Square Boston, Massachusetts 02109 (617) 357-0200
Ronald E. Oliveira, Esq. Cain, Hibbard, Myers & Cook 184 North Street
Pittsfield, Massachusetts 01201 (413) 443-4771
Dated: June 18, 1986
PLAINTIFF CLAIMS TRIAL BY JURY
COMMONWEALTH OF MASSACHUSETTS
BERKSHIRE, SS. SUPERIOR COURT DEPT. OF THE TRIAL COURT
ELIZABETH DOVYDENAS, )
v. ) Civil Action No. 86-0260
THE BIBLE SPEAKS, ) CARL H. STEVENS and ) KATHLEEN HILL, )
Defendants. ) AMENDMENT TO COMPLAINT
Plaintiff Elizabeth Dovydenas hereby amends the complaint in this action, pursuant to Rule 15(a), Mass.R.Civ.P., as follows:
1. The words "FOR RESCISSION" are deleted from the title of the complaint.
2. Paragraph 22 is amended to read as follows:
22. In or about May 1985, plaintiff transferred 125,400 shares of common stock of Dayton Hudson Corporation to The Bible Speaks. At the time of transfer such shares had a market value of $5,000,325. At the time of such transfer, plaintiff was incapable of understanding the significance and. effect of such transaction and did not possess the requisite donative intent necessary to make a gift of such assets to The Bible Speaks.
3. Paragraph 4 is added to the PRAYERS FOR RELIEF:
4. That damages caused by the acts of the defendants Stevens and Hill be assessed and that plaintiff be awarded such damages.
4.- Paragraph "4" of the PRAYERS FOR RELIEF is renumbered
to paragraph "5". Of counsel:
Ronald E. Oliveira, Esq. Cain, Hibbard, Myers & Cook 184 North Street
Pittsfield, Massachusetts 01201 (413) 443-4771
By her attorneys,
/s/ Gordon T. Walker Gordon T. Walker Eric R. Dannenmaier McDermott, Will & Emery One Post Office Square Boston, Massachusetts 02109 (617) 357-0200
Dated: July 15, 1986
CERTIFICATE OF SERVICE
I, Diane E. Merrill, hereby certify that on this 31st day of October, 1986, I served the foregoing document described as:
Proof of Claim
by delivering a true and accurate copy thereof, in hand, to the interested parties addressed as follows:
Charles W. Morse, Jr., Esq. Sullivan & Worcester One Post Office Square Boston, Massachusetts 02109
Mr. Gerrard Kelley U.S. Trustees Office 1101 Boston Federal
10 Causeway Street Boston, MA 02222-1074
and by mailing copies, postage prepaid, to:
Terry P. Segal, Esq. Segal, Moran & Feinberg 210 Commercial Street Boston, MA 02109
Norman Roy Grutman, Esq. Grutman Miller Greenspoon
Hendler & Levin 505 Park Avenue New York, NY 10022
Diane E. Merrill Secretary for
Eric R. Dannenmaier