Bobby N. Harmon, CPCU, ARM
Louisville, Kentucky 40229-1655
May 31, 2004
VIA fax only @ (559) 490-1919
Mr. James B. Farris
Senior Case Manager
American Arbitration Association
6795 North Palm Avenue, 2nd Ave.
Fresno, California 93704
RE: Mary Lou Woo, Trustee v. Bobby N. Harmon - Case No. 74 166 00491 03 JAFA
Dear Mr. Farris:
This is to comment on Steven Guttman’s letter dated May 27, 2004, addressed to you, in which he stated:
“In accordance with your request, this letter responds to Mr. Harmon’s communication of May 13, 2004.
“My letter of May 3, 2004, addressed jointly to the Arbitrator and Mr. Harmon, was a follow up on a particular issue discussed during the parties’ pretrial telephone conference of April 30, 2004; specifically, whether Mr. Harmon’s ongoing inquires to certain insurance carriers and the fact that he sends copies of those letters to a plethora of individuals who have no relationship whatsoever to the insurance coverage issue, the Settlement Agreement, or the underlying lawsuits, constitutes an ongoing breach of the Agreement as set forth in Disputed Issue No. 5. Mr. Harmon’s April 7, 2004 letter was included as an enclosure because it provided the Arbitrator with a perfect illustration of the distinction between corresponding with insurance carriers which, in and of itself is not a violation of the Agreement, and communicating with individuals who have nothing to do with any of the issues, which is a violation. The April 7 letter also substantiated the fact that subsequent to the exhibit exchange deadline, Mr. Harmon has continued his letter writing campaign in violation of the covenant of good faith and fair dealing. My May 3 letter to the Arbitrator advised of my intention to submit a compilation of these letters and request permission to supplement Claimant’s arbitration exhibits.
“By letter dated May 5, 2004, the American Arbitration Association (“AAA”) advised that all communication to the Arbitrator must be routed through the AAA. Claiming not to have received that May 5 letter, Mr. Harmon, on May 10, wrote directly to the Arbitrator in brazen violation of the AAA’s directive....”
Subsequent to writing my May 10 letter, and after receiving Mr. Guttman’s letter dated May 27, 2004, I have since located Justin Schuck’s May 5 letter that had been misplaced among the thousands of other pages of documents generated in this case. Since his letter mainly concerned the Notice of Management Conference, I had filed it in a different binder from my correspondence.
As I read Mr. Schuck’s letter of May 5, however, I note that his comment, “We remind the parties that all correspondence directed to the Arbitrator be transmitted through this Association,” apparently was referring to Mr. Guttman’s letter of May 3, 2004, and not my “Motion to Dismiss The Complaint or in the Alternative for Summary Judgment dated May 4, 2004,” which was the paragraph which immediately proceeded the reminder. In my haste to respond to Mr. Guttman’s letter of May 3, which was addressed directly to Judith Neustadter, I apparently overlooked this reminder that all correspondence directed to the Arbitrator should be sent through the Association. I apologize for this oversight and my lack of experience in these matters.
Nonetheless, I still maintain that Mr. Guttman made an extremely grievous error by directing his May 3 letter to Ms. Neustadter in violation of the AAA’s rules. Mr. Guttman is the legal representative of the Claimant demanding this arbitration case. As an attorney, he should be aware of the rules and should not have to be reminded. The fact that I mistakenly followed his lead in sending my comments regarding his letter directly to Ms. Neustadter does not diminish his fault or redeem the consequences of his mistake. Instead of a mild “reminder to all parties,” I believe that the AAA should have taken immediate action to censure Mr. Guttman in the strongest possible terms and promptly dismissed this case. Then I would not have mistakenly written “directly to the Arbitrator in brazen violation of the AAA’s directive.”
Mr. Guttman continues in his letter of May 27, 2004, by stating:
“The third paragraph of Mr. Harmon’s May 13 letter insinuates the Arbitrator was not aware of the fact that Claimant has been advancing his arbitration fees. Mr. Harmon knows full and well that the Arbitrator was cognizant of the Claimant’s financial contributions to this proceeding as the subject had come up during the course of the parties’ telephone conference. Mr. Justin Schuck, the previous case manager, can confirmed [sic] this fact.
“Please note that subsequent to May 13, Mr. Harmon agreed that Claimant’s proposed supplemental exhibits may be allowed into evidence. These supplemental exhibits consist of 21 letter written by Mr. Harmon to various individuals and entities, including numerous insurance carriers. One can deduced [sic] from his letters to the insurance companies that to date, Mr. Harmon has not contributed to any of the arbitration expenses. As the Arbitrator has been receiving her fees and cost reimbursements, it is obvious that the Claimant has been advancing Mr. Harmon’s share of the expenses. Therefore, Mr. Harmon’s complaints of May 13 regarding disclosure of the financial arrangements are, at this point, moot....”
If I follow Mr. Guttman’s argument, he is saying that because I subsequently agreed that Claimant’s supplemental exhibits could be allowed into evidence, no harm had arisen from his original violation of AAA rules. I strongly disagree, and continue to believe that Mr. Guttman, by sending his letter of May 3 directly to the Arbitrator, seriously compromised Judith Neustadter’s ability to fairly arbitrate this case. My subsequent letter of May 13 could not undo or mitigate the damages that Mr. Guttman had already done - not only with regard to the information regarding the fee advancement arrangements, but also with regard to all the other personal and confidential information contained in those letters that I did not intend to have revealed to Ms. Neustadter. Therefore, I still consider my complaints regarding Mr. Guttman’s letter of May 3, 2004, valid and important. I have no objections to your taking Mr. Guttman’s suggestion of contacting Mr. Schuck for his recollections of our past phone conversations, but I believe that whatever he recalls would not change the simple fact that Mr. Guttman has committed a serious and inexcusable violation of the AAA’s rules.
Mr. Guttman concludes his letter by stating:
“Mr. Harmon’s May 13 letter is simply another attempt, using a different and more circuitous route, to seek disqualification of Ms. Neustadter as the arbitrator. The Claimant hereby reasserts her position that the appointment of Ms. Neustadter was proper and that Ms. Neustadter should be reaffirmed as the arbitrator in this case.”
Mr. Guttman is correct that this is another attempt to seek disqualification of Ms. Neustadter. Again, however, this does not diminish Mr. Guttman’s serious fault for breaching the American Arbitration Association’s rules, or undo the damages that have been caused by this clear and undisputed violation.
The Claimant is also correct in that this is a different route to seeking Ms. Neustadter’s disqualification. Previous requests for her disqualification were based upon conflicts of interests that I believe Ms. Neustadter has with various parties related to this case. This latest request is concerned with the Claimant’s improper actions, over which Ms. Neustadter had no control and shares no responsibility. It is not that the appointment of Ms. Neustadter was improper in this case - but it’s that the acts of Claimant were.
Whether or not my letter of May 13, 2004, traveled down a more circuitous route is immaterial. The straight and simple fact is that the neutrality of Ms. Neustadter has been irreversibly compromised by Mr. Guttman’s letter of May 3, 2004, and for this reason I respectfully reiterate my request for her disqualification.
Please feel free to contact me if you have any questions concerning this matter.
Sincerely yours,
Bobby N. Harmon
cc: Mary Lou Woo, Trustee,
c/o Steven Guttman, Esq., Kessner Duca Umebayashi Bain & Matsunaga
(via fax only @ 808-529-7177)
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