"She yelled, 'Get off my sidewalk' to me," Palumbo testified. "I didn't even know I was standing in front of someone's house."
Margera then began yelling at Ray, with whom, he testified, he has had numerous problems.
"It was kind of a shouting match," he said. "I was so busy yelling, I didn't hear what she was saying."
Margera denied from the stand that he used a racial slur during the argument, as Ray told the Daily News this week.
Ray, whose house shares a wall with Margera's bar, often complained about the noise. To compensate for the problem, Margera said his bar manager paid one-month's rent for Ray when the bar opened last year. But Ray and Margera continued to have problems, he said.
After Ray shut her curtains, Margera thought that the fight was over. Then he and Palumbo started walking toward the corner where their "designated driver" was waiting. Margera said he was suddenly struck in the back of his head and fell into the street.
"He wasn't responding to me," Palumbo said. "And when I lifted his head up, I had all this blood on my hands."
Margera was taken to Crozer-Chester Medical Center by ambulance and received two staples atop his head. He also suffered a concussion.
Though Margera has taken plenty of beatings on "Jackass," this wound was no stunt. Margera said that the beginning of the movie "Jackass 3-D" - which he flew out last Monday to Los Angeles to shoot - had to be rewritten because he wasn't allowed to take a slap to the skull.
His mother, April, who has appeared in "Jackass," said her son was in pain but couldn't afford to stay home and rest.
"I knew they were in a frenzy to rewrite and move things around because what they had planned for him they couldn't do," she said. "Even the ending, he was very upset that they had to reconfigure that. I feel bad for everybody."
"You can't just do that and get away with it," Bam Margera said. "The worst part is that it came at the worst time for me. It's a total bummer."