Bobby N. Harmon, CPCU, ARM



August 26, 2003

VIA fax only @ (559) 490-1919


Ms. Julie A. Shermerhorn, Supervisor

Mr. Justin W. Schuck, Case Manager

American Arbitration Association

6795 North Pallm Avenue, 2nd Floor

Fresno, California 93704


RE:   Mary Lou Woo, Trustee v. Bobby N. Harmon

         Case No. 74 166 00491 03 JUSC


Dear Ms. Shermerhorn and Mr. Schuck:


This responds to Steven Guttman’s letter dated August 25, 2003, in which he states:

 

“As to Mr. Harmon’s commentary concerning my letter dated August 18, I note that Mr. Harmon conceded ’that the Insurance Division does not have authority, nor are they being asked, to make a coverage decision.’ (emphasis in the original). Although Mr. Harmon states that he wants to delay the AAA proceedings while he is ‘still in the process of contesting the validity of the insurance company’s denial of coverages,’ his own letter acknowledges that the Insurance Division will not address the issue of whether his own intentional actions fall within the parameters of the insurance ‘coverages’. As I previously stated, there is no legitimate basis to postpone the arbitration.”


Once again, Mr. Guttman totally misconstrues my point about the Insurance Division not being asked to make a coverage decision. As I stated in my August 19th letter: “My complaint to the Insurance Commissioner concerns a legal issue – not a coverage issue. Insurance companies in Hawaii licensed to do business in Hawaii are subject to regulation by the State of Hawaii Insurance Division. One such regulation is that insurance claims must be administered by a State-licensed Insurance Adjuster. To my knowledge, neither Clyde Mark nor Matt Tsukazaki are licensed Adjusters for P&C Insurance Company, Inc., or for the insurance companies they refused to name. If my understanding is correct, then P&C has engaged in unfair claims practices and is in violation of Hawaii’s Insurance Statutes.”


Stated another way, the point I am making here is that I was not requesting that the arbitration be delayed until the Insurance Commissioner had made a coverage decision, I was simply requesting a postponement until such time as the Commissioner - the proper authority in this case - had provided factual information regarding the licensing of these two individuals. If the answer is a simple “YES, they are licensed,” then this disputed issue would be resolved.


If the answer to this factual question is “NO,” however, then it would appear that P&C is in violation of Hawaii Statutes, and Mr. Marks and Mr. Tsukazaki may have committed fraud, and the declination letters they issued in this case are invalid. Then the true, legitimate adjusters for P&C would need to reassess their coverage position and respond to my tender of defense. Contrary to Mr. Guttman’s contention, I believe this should be considered a legitimate basis to postpone the arbitration, at least until the Insurance Commissioner has had the opportunity to respond to my “yes” or “no” question regarding the licensing of these individuals.


Mr. Guttman also completely disregards my contention: “Even after all these months, neither Mr. Guttman nor the attorneys involved, have produced any evidence that these attorneys, including Matt Tsukazaki, were the legal Attorneys of Record in these lawsuits which Mr. Guttman ‘settled’ on behalf of the Trustee. I still maintain that, in the interests of fairness, expediency and cost-effectiveness, Mr. Guttman should produce this evidence prior to the start of the arbitration hearings.”


Mr. Guttman continues in his letter of August 25th:

 

“I reiterate my prior comments as to Mr. Harmon’s correspondence regarding Ms. Neustadter and the AAA proceeding with the arbitration. There is nothing in any of his letters which establishes that Ms. Neustadter has any conflict regarding this case.

 

“The objective reality is that the Hale O Kaula case, referenced in letters from Mr. Harmon, has absolutely nothing to do with the parties to this arbitration or the claims being presented. Further, there is no correlation between the concern of Special Master Robert Richards quoted in Mr. Harmon’s August 23 letter and Ms. Neustadter serving as the arbitrator in this matter.

 

“Similarly, there is no correlation between the ‘high-profile donor’ discussed in the article Mr. Harmon references in his August 25, 2003 letter or any of the other parties named in the subject Honolulu Advertiser article of July 12, 2003. The issues presented in the recent Hawaii criminal investigation of campaign donations are not relevant to this arbitration....

 

“We continue to see nothing in the volume of correspondence being generated by Mr. Harmon that in any way raises a legitimate issue regarding Ms. Neustadter being a neutral party who is qualified to be the arbitrator in this case. We look forward to having the case move forward with Ms. Neustadter as the arbitrator.”


My questions, and my concerns, with these statements are that I expected Ms. Neustadter to speak for herself in making these disclosures and defenses – not Mr. Guttman. By taking this position and speaking on behalf of Ms. Neustadter regarding these potential conflicts, does not this give the appearance of Mr. Guttman acting as her attorney in fact?


In the “high-profile donor” article, for example, former Maui Mayor James “Kimo” Apana is named as having received $12,500 in “funneled” contributions. Does Ms. Neustadter contend, as Mr. Guttman has stated, that she, her relatives and employers, and the clients and associates of all of these, have had no prior relationships with the former mayor?


I also question Mr. Guttman’s claim, again speaking for Ms. Neustadter, that “there is no correlation between the concern of Special Master Robert Richards quoted in Mr. Harmon’s August 23 letter and Ms. Neustadter serving as the arbitrator in this matter.” My purpose in quoting the Richard’s Report in connection with the Hale O Kaula case was not so much to state the concerns of the Special Master, but to show the actual connections, and the actual or potential conflicts-of-interest, between Judith Neustadter, Judge Samuel King, Randy Roth, Kamehameha Schools, and myself, in this case.


For example, what if one of the witnesses I wish to call were Judge Samuel King. Would Ms. Neustadter maintain her “fairness and impartiality” and allow Judge King to be called? If so, would she still maintain there is no “conflict of interest” between this case and the Hale O Kaula case? If not, would this call into question whether or not she was, in fact, being “fair and impartial” and truly adjudicating the case based solely on its merits?


Again, I would ask that Ms. Neustadter, and not Mr. Guttman, make full disclosure as respects actual and potential conflicts-of-interest with the individuals, companies and organizations that I named in previous letters, as well as any other entities that I did not single out, but with whom Ms. Neustadter may be conflicted.


Also, in the interests of fairness and expediency, I would ask that these disclosures be made, in writing, by Ms. Neustadter prior to the commencement of these proceedings.


Thank you for your consideration of these issues.


Sincerely,




Bobby N. Harmon

 

cc’s:   Mary Lou Woo, Trustee, c/o Steven Guttman, Esq. (via fax @ 808-529-7177)

 

           J.P. Schmidt, Hawaii Insurance Commissioner (via fax @ 808-586-2806)

 

           Terry Mullen, CEO/President, John Mullen & Co. (via fax @ 808-531-0053)

 

           Casimer Fidele, Island Insurance Co. (via fax @ 808-539-9738)

 

           Attorney General Mark Bennet (via fax @ 808-586-1239)

 

           Dr. Randy Roth, Office of the Governor (via fax @ 808-586-0006)

 

           Janet S. Hughes, Mgr., IRS (via fax @ 303-844-3596)

 

           Ralph F. Boyd, Jr., et al., U.S. Dept. of Justice (via fax @ 202-514-1116)