Bobby N. Harmon, CPCU, ARM
808 Ahua Street, #22, Honolulu, HI 96819 Tel. No. (808) 342-9013
SETTLEMENT CHRONOLOGY - CH. 7 CASE NO. 99-04339
02/02/99 Harmon wrote to Rodney Park, president, P&C: “As I have not received a response to my settlement proposals dated January 17, 1999, those proposals expired on January 31, 1999. Consequently, I am offering the following new proposals . . . As previously advised, I am not represented by counsel in this matter. Therefore, you, P&C’s contracted third-party claims administrator, or authorized counsel may respond to me directly. If I am to correspond or negotiate with any third party, please provide me with a copy of your specific written authorization agreement for the handling of these claims with such third party or parties. . . These offers will expire at 12:00 noon, February 15, 1999.” cc: Tony Rangel, Federal Ins Co.
02/03/99 Park wrote Harmon: “In response to your February 2, 1999 letter and all previous related correspondence, all matters raised in your letters including any issues you believe to exist between you and P&C Insurance, should be addressed to Robert S. Katz or Matt A. Tsukazaki at the law firm of Torkildson, Katz, Fonseca, Jaffe, Moore & Hetherington . . . I will not respond separately to your February 2, 1999 letter.”
02/06/99 Harmon responded to Park:
“This is in response to your February 3, 1999 letter addressed to me, with copies to Matt A. Tsukazaki, Esq. and Roy F. Hughes, Esq. With due respect, I must point out several statements in your letter which do not adequately respond to my letter of February 2, 1999.”
“First, your reference is to P&C Insurance Company, Inc. et al. v. Bobby N. Harmon, Civil No. 97-0512-02, while my letter referenced the above matter. This is a completely separate and different claim not covered in Civil No. 97-0512-02.”
“Second, I requested in my letter, ‘If I am to correspond or negotiate with any third party, please provide me with a copy of your specific written authorization agreement for the handling of these claims with such third party or parties.’ If I am to address Robert S. Katz or Matt A. Tsukazaki directly on these ‘bad faith’ claims against P&C, then I will require a copy of P&C’s engagement letter to the law firm of Torkildson, Katz, Fonseca, Jaffe, Moore & Hetherington evidencing that they have been retained to handle these specific claims.”
“Third, I am of the opinion that there would be a conflict of interest on the part of this law firm if they were to handle both my ‘whistle-blower’ wrongful termination claim, and the referenced bad faith claim. In fact, Torkildson, Katz would be a named defendant in any law suit that may be filed in the referenced matter. This fact, in itself, would probably be sufficient cause for them to have a conflict of interest.”
“Fourth, now that all five trustees have been removed by the court from handling any matters related to the I.R.S. audit, and Trustee Henry Peters has been indicted on grand theft, will Mr. Peters, through Nathan Aipa and Louanne Kam, be allowed to continue to direct the operations of P&C, including the handling of claims and the awarding of non-bid contracts, such as to Marsh & McLennan and Torkildson, Katz?”
“Until the above issues have been resolved, I do not believe it would be appropriate for me to correspond directly with Mr. Katz or Mr. Tsukazaki. Therefore, I anticipate that you will either personally respond to my February 2, 1999 letter, or that P&C’s authorized third-party claims administrator or designated attorney for this matter will respond to my proposal and adequately address the four issues stated above.”
“As previously advised, I am not represented by counsel in this matter. Therefore, it may be inappropriate for you to send copies of any correspondence to Roy Hughes, Esq., at this time as he is involved only in Civil No. 97-0512-02.”
Copies of this letter were sent to:
Peter Lowe, M&M Ins. Mgt. Services - VIA Fax: (808) 521-5892
William S. Richardson - P&C Ins Co - VIA Fax: (808) 521-5892
Gilbert Tam - P&C Ins Co - VIA Fax: (808) 521-5892
Nathan Aipa - P&C Ins Co - VIA Fax: (808) 521-5892
Trustee Richard S. H. Wong - VIA Fax: (808) 536-6895
Trustee Henry H. Peters - VIA Fax: (808) 536-6895
Trustee Lokelani Lindsey - VIA Fax: (808) 536-6895
Trustee Gerard Jervis - VIA Fax: (808) 536-6895
Trustee Oswald Stender - VIA Fax: (808) 536-6895
Tony Rangel, Federal Insurance Company - VIA Fax: (213) 833-5200
American Reinsurance Co. - VIA Fax: (415) 398-2074
Elizabeth Kellner, Marsh & McLennan - VIA Fax: (212) 345-2045
David Loo, John Mullen & Co. - VIA Fax: (808) 531-0053
Cary Okawa, Coopers & Lybrand - VIA Fax (808) 531-3433
Insurance Commissioner, State of Hawaii - VIA Fax: (808) 586-2806
Attorney General, State of Hawaii - VIA Fax: (808) 586-1375
Colbert Matsumoto, Esq., Master, KSBE - VIA Fax: (808) 523-7885
Internal Revenue Service - VIA Fax: (808) 541-1109
Federal Bureau of Investigation - VIA Fax: (808) 566-4470
Robert Katz, Esq. - VIA Fax: (808) 523-6001
Roy Hughes, Esq. - VIA Fax: (808) 521-7489
Harmon received NO RESPONSE to this letter from any parties.
03/??/99 Hearing on KSBE’s Motion to Dismiss Harmon’s Wrongful Termination Countersuit before Judge B. Weil. Goemans had moved to Washington, D.C.; did not receive Notice of Hearing. Harmon appeared on his own behalf; made oral motion to Continue hearing to enable him to find substitute counsel. Weil denied motion and dismissed Harmon’s countersuit with prejudice.
03/11/99 Trustee Jervis is rushed to a hospital after taking an overdose of sleeping pills a week after a trust employee died in an apparent suicide. The day before her death, Jervis and the female worker were allegedly having sex in a men’s restroom at the Hawaii Prince Hotel (Note: The Prince Hotels in Hawaii are clients of Rocco Sansone, Marsh & McLennan.)
03/29/99 Unemployment Insurance Appeal - Oral Argument, Judge B. Eden Weil (now Judge Eden Elizabeth Hifo) presiding. Harmon appeared by telephone on his own behalf, with Robert Katz (Torkildson, Katz...) appearing on behalf of Bishop Estate. Judge Weil ruled in Harmon’s favor, granting his unemployment benefits. Bishop Estate, however, appealed this ruling to the State Supreme Court.
04/12/99 Trustee Wong is indicted on charges of first-degree theft, perjury and conspiracy.
04/27/99 Harmon filed pro se RICO Civil No. CV99-00304 DAE against Federal Insurance Co.; P&C Insurance Co.; Marsh & McLennan, Inc.; Pricewaterhouse, Coopers & Lybrand; Torkildson, Katz, Fonseca, Jaffe, Moore & Hetherington; Henry H. Peters, Richard S.H. Wong, Lokelani Lindsey, Gerard Jervis and Oswald Stender, Trustees of the Estate of Bernice Pauahi Bishop; John Mullen & Co., Inc.; Nathan Aipa; Louanne Kam; Rodney Park; William S. Richardson; Gilbert Tam; Peter Lowe; John & Jane Does 1-1,000.
A copy of the complete RICO CASE STATEMENT can be found on the internet at: www.the-catbird-seat.net/RICO-BH.htm (NOTE: This this website was shut down by the U.S. Department of Justice, by Order of Judge David Ezra, this RICO Case Statement can now be found at http://www.kycbs.net/RICO-BH.htm)
04/27/99 IRS files a report saying it may revoke the tax-exempt status of the estate if the five trustees do not step down.
04/29/99 Senate votes to reject Atty General Bronster and Budget Director Earl Anzai for a second term.
05/06/99 Judge Bambi Weil permanently removes Lindsey as trustee.
See Broken Trust: Greed, Mismanagement and Political Manipulation, by Samuel King and Randall Roth for updated information.
05/07/99 Probate Court Judge Kevin Chang temporarily removes four trustees and accepts Stenter’s resignation on an interim basis.
05/08/99 Judge Chang appoints five interim trustees.
05/27/99 Judge Bambi Weil issues Order Reversing Employment Security Appeals Office’s Decision 9701016 filed in 1st Circuit Court:
“. . . The first issued raised is the appeals officer’s failure to allow Appellant’s request to subpoena records and witnesses. The Court notes that the answering brief filed by Employer . . . states . . . that Appellant, who was a participant in conversations with many of the proposed witnesses, should have produced or could have testified to the documents that he authored and could have testified about his conversations. . .”
“. . . The Court finds it appropriate to take judicial notice of Civ. No. 97-0512-02, an action entitled P&C Insurance Co, Inc. and Richard S.H. Wong, Oswald K. Stender, Lokelani Lindsey, Gerard A. Jervis and Henry H. Peters as Trustees of the Estate of Bernice Pauahi Bishop [vs. Bobby N. Harmon]: Therefore, an action brought by Employer as well as by P&C Insurance Co.”
“In Civ. No. 97-0512-02, on Feb. 21, 1997, Judge Radius sitting in the Circuit Court, granted KSBE’s motion for preliminary injunction against Appellant. By the court taking judicial notice of the minute order for that date, the Court notes that Mr. Katz was present when that occurred with his partner or associate Mr. Tsukazaki of the same law office, the same law office which is representing KSBE today, and did throughout the unemployment insurance hearing.”
“That on May 27, 1997, in the agency appeal, Appellant requested subpoenas and records including his personnel records which the Appeals Office denied.”
“On Aug 21, 1997, Mr. Katz’s law firm with Mr. Katz again on the pleading, filed an emergency motion for enforcement of Judge Radius’ order in Civ. No. 97-0512-02. On Aug. 26, Sept. 26, and Oct. 31, 1997, this particular judge heard that motion. Mr. Katz did not argue, but the attorney from his law firm, Mr. Tsukazaki argued the motion.”
“On Feb. 16, 1998, the Appeals Office rejected another of Appellant’s requests for subpoenas.”
“On Mar. 5, 1998, the Appeals Office decision was entered.”
“On Mar. 12, 1998, Appellant brought a motion for reconsideration and again requested subpoenas for the documents, and based on the testimony of Louanne Kam at the hearing, added the need for Mr. Aipa to be called as a witness, and a specific document to which Ms. Kam had referred that being a second opinion on the arms length relationship between KSBE and P&C.”
“In requesting the additional subpoenas along with the previously requested subpoenas, Appellant included a justification, among others that the court order he was under would not allow him to provide it himself.”
“On April 29, 1998, the Appeals Office denied the request to reopen the case and again denied Appellant’s request for subpoenas on the basis that Appellant failed to show the necessity of the individuals and documents for a fair hearing.”
“Based on the above, the argument that Appellant should have brought forth the documents he was precluded from having because of actions taken by Mr. Katz’s law office in the companion case will not prevail.”
“The law regarding subpoenas is found at Hawaii Administrative Rules § 12-5-93(e)(20(1997) and reads, ‘upon a showing of necessity by any party for the issuance of a subpoena to compel the attendance of a witness or the production of account records and documents at any hearing, a subpoena shall be issued by the referee.’ It is not a matter of discretion.”
“. . . the Court finds there was a showing of necessity. Appellant was under court order so he did not have the documents and had no way to compel the testimony of Employer. The Court also finds that the information sought to be subpoenaed was relevant to the underlying unemployment case, inter alia, because it could go to reasons for Appellant’s actions, the importance of non-compliance, the importance of being in non-compliance to Employer KSBE, and whether Appellant was acting with wilful and wanton disregard of Employer’s best interest. The Court also finds that it is beyond cavil that it is against the best interest of a charitable trust, namely KSBE, to lose its tax exempt status.”
“The documents sought by Appellant would be relevant to whether Appellant’s ‘insubordination’ was an exercise of good faith discretion as KSBE’s risk manager.”
“The relevant issue is whether Appellant exercised good faith discretion as KSBE’s risk manager, because KSBE was Employer.”
“The Court additionally finds that there was probative, substantial and reliable evidence in the record to support the finding that Appellant ‘ignored his superior’s directives because he concluded that he would be violating the IRS code or the insurance commissioner’s regulation if he complied with the directive.’ It is not disputed that Appellant was acting on information that indicated such action could or would jeopardize Employer’s tax-exempt status. Ms. Kam testified and the Appeals Office found at the Certified Record on Appeal page 248 that Appellant had a genuine concern for the organization and that concern was understandable.”
“The Court finds because of those uncontested findings for which there is support in the record, Appellant cannot be denied unemployment benefits because he was not fired for misconduct as Hawaii Revised Statutes § 383-30(2) defines that term.”
“The record shows there was no wilful or wanton disregard of Employer’s interests, Employer being KSBE, the charitable estate as opposed to any individual who worked for KSBE, and that his actions were an exercise of his discretion. The Court cannot say whether it was error in Appellant’s judgment to disobey orders, but even if it was an error in judgment, it was truly a good faith error.”
“IT IS THEREFORE HEREBY ORDERED that the Employment Security Appeals Office Decision 9701016 dated March 5, 1998, finding Appellant disqualified for benefits is reversed and unemployment insurance benefits be paid. . .”
05/27/99 Harmon filed his RICO Case Statement.
07/23/99 Milton Holt incarcerated after admitting he used crystal meth, thus violating his bail agreement.
07/30/99 Harmon filed a Motion to Allow Amendment to RICO Complaint.
??/??/99 First RICO case hearing before Federal Judge David A. Ezra, District of Hawaii.
08/09/99 Judge David A. Ezra’s Order Granting Plaintiff’s Motion to Voluntarily Dismiss Action Against Defendants Federal Ins Co, Inc,; Marsh & McLennan Companies, Inc.; PricewaterhouseCoopers, LLP; John Mullen & Co., Inc.; Torkildson, Katz, Fonseca, Jaffe, Moore & Hetherington; Dismissing Defendants Federal Insurance Company, Inc.; Marsh & McLennan Companies, Inc.; Pricewaterhousecoopers, LLP; John Mullen & Co., Inc.; Torkildson, Katz, Fonseca, Jaffe, Moore & Hetherington; striking Defendants Federal Insurance Co., Inc.; PricewatershouseCoopers, LLP’s; and Torkildson, Katz, Fonseca, Jaffe, Moore & Hetherington’s Motions to Dismiss and All Related Joinders as Moot; Striking Plaintiff’s Motion Requesting Continuance of Hearing Date on Defendants’ Motion to Dismiss as Moot; Granting Plaintiff’s Motion for Extension of Time to Serve Original Complaint.
08/14/99 Initial meeting with Arnold Phillips.
08/17/99 RICO Rule 16 Pretrial Scheduling Conference, Judge Barry Kurren. Conference continued until after Hearing on Harmon’s Motion to Allow Amendment to Complaint.
08/24/99 Milton Holt pleads guilty to one count of felony mail fraud related to illegally spending about $15,000 of his campaign money for personal use. Holt is currently in prison on drug charges. He faces up to 5 years in prison when he is sentenced by U.S. Dist. Judge Alan Kay on 12/06/99.
09/03/99 First Hearing on Harmon’s Motion to Allow Amendment to Complaint before U.S. Magistrate Judge Barry M. Kurren. Judge Kurren granted a Continuation to 09/24/99 in order to allow Harmon to prepare and deliver a draft of his amended Complaint to Plaintiff’s KSBE and P&C. If KSBE and P&C agree with the draft, Kurren may waive another hearing and accept the amended complaint.
09/07/99 Harmon hand-delivers a copy of his amended RICO complaint to Kenneth Hipp, who states that he is representing the interim trustees, and Jeffrey Sia, who is representing P&C Insurance Co., Inc. Sia objects to the amended Complaint as individual Directors & Officers of P&C are still named, so hearing before Judge Kurren is still on for 09/24/99.
09/11/99 Arnold T. Phillips engaged as Harmon’s attorney in his wrongful termination counterclaim.
09/13/99 KSBE files Appeal in the Hawaii Supreme Court from the Order Reversing Employment Security Appeals Office’s Decision 9701016, filed on 05/27/99. (Answer due in 40 days.)
09/18/99 Phillips agrees to represent BH and wife in the bad faith claims against Federal, P&C & Marsh & McLennan.
09/22/99 Defendant P&C files Supplemental Memorandum in Opposition to Motion to Allow Plaintiff Harmon’s Motion to Allow Amendment to Complaint Filed July 30, 1999.
09/24/99 Hearing on Harmon’s Motion to Amend RICO Complaint before Judge Kurren. Phillips appears on behalf of Harmon; requested extension of time to prepare a revised amended Complaint.
09/29/99 Order Denying Plaintiff’s Motion for Amended Complaint issued by Judge Kurren. However, because Plaintiff has engaged counsel, the Court will grant an extension to allow Plaintiff to amend his pleading in accordance with Fed. R. Civ. P. 8(a)(2). Accordingly, Plaintiff’s counsel is to deliver to Defendants a copy of a proposed amended complaint no later than 11/01/99. Defendants’ opposition, if any, to the amendment is due to this court by 11/12/99. Plaintiff’s reply to any opposition will be due no later than 11/23/99. A Pre-Trial Conference in this case, pursuant to Fed. R. Civ. P. 16, is continued to 12/07/99, at 9:00 a.m. If the amended complaint is opposed, the court will take up the matter at the 12/07/99 hearing.
10/13/99 Harmon voluntarily initiated Ch. 7 Case. His attorneys are Greg Dunn and Bradley Tamm. The Court appoints Mary Lou Woo as Trustee.
11/01/99 Plaintiff’s counsel is to deliver to Defendants a copy of a proposed amended RICO Complaint.
11/12/99 Court due date for Defendants’ opposition, if any, to the RICO amendment.
11/17/99 Arnold Thielens Phillips II’s letter to Steven Guttman.
11/23/99 Plaintiff’s reply to any opposition will be due.
12/03/99 Robert K.U. Kihune’s Deposition. According to Robert Kihune’s Deposition in EQ2048 (page 23): “I had three jobs as a vice admiral before I retired. The first job I had was called the Assistant Chief of Naval Operations for Surface Warfare. I was responsible for all of the procurement of all the ships in the Navy. I also procured all the weapon systems for all the ships in the Navy. I had a budget of $22 billion dollars.”
12/07/99 Steven Guttman’s letter to Roy Hughes, Esq. (Harmon’s defense atty appointed by Island Insurance), stating, “As we discussed, my firm represents the Ch. 7 Trustee for ... Harmon, Mary Lou Woo. In her capacity as Trustee, Ms. Woo is the holder of all claims of Mr. Harmon that had accrued, regardless of whether they are contingent and unliquidated, as of his bankruptcy filing date of October 13, 1999. ... Ms. Woo is interested in exploring whether a global settlement can be reached to resolve Mr. Harmon’s claims. To facilitate settlement discussions, I requested that Magistrate Kurren hold a settlement conference. He agreed to do so and the settlement conference is set for Dec. 22 ... A confidential settlement letter is to be delivered or faxed to Magistrate Kurren on Dec. 20. For there to be a reasonable possibility of reaching a global settlement, your presence is required. Bishop Estate has agreed to the settlement conference. Susan Tius and Jeffrey Sia will be present for Bishop Estate. Arnold Phillips will attend as Mr. Harmon’s personal attorney. Please note that Ms. Woo, subject to Bankruptcy approval, has authority to settle regardless of Mr. Harmon’s perspective on the issue.... (Before the website was shut down by Order of Judge David Ezra dated Originally at www.the-catbird-seat.net/Doc-Guttman-Hughes-12-7-99.pdf ) ... (now located at http://www.kycbs.net/Doc-Guttman-Hughes-12-7-99.pdf )
BH: Note that Guttman states that Tius and Sia will be present for BISHOP ESTATE - NOT P&C INSURANCE CO. This is another “arms-length” issue. Although this Settlement Conference is supposed to be held for the purpose of a global settlement, note that no one representing the insurance companies for Bishop Estate and P&C Insurance Co. (Federal and XL) are scheduled by Guttman to attend this settlement conference. Again, Jeff Sia has not presented any evidence that he has been legally appointed by P&C Insurance Co., or Kamehameha Schools, to represent them at this Settlement Conference, or that his purported appointment has been approved by Federal Insurance and XL.
12/07/99 The scheduled Pre-Trial Conference with Judge Kurren, pursuant to Fed. R. Civ. P. 16, is continued to 12/22/99, at 9:00 a.m.
12/08/99 Jeffrey Sia’s ltr to Steven Guttman outlining P&C’s legal position: “With the Settlement Conference in the above-referenced case approaching, and because of your recent involvement in the case, I wanted to convey to you, for your consideration, P&C Insurance Co.’s position concerning Plaintiff’s claims asserted and attempted to be asserted against it. ... I assumed that you had or had access to the Complaint filed by Harmon in federal court, which I have not reproduced for you because of its length, especially with the Exhibits. ... There are other viable defenses available to P&C, which could be asserted by KSBE and the individual Defendants ... BH note: This is again another “arms-length” issue which Guttman does not challenge. Sia has presented NO ATTORNEY OF RECORD LETTER or other evidence to Guttman to verify his appointment by P&C, or by the individual defendants (which include Henry Peters as both Trustee and P&C board chairman, or any evidence of the required approval of his representation by P&C’s professional liability insurance carriers, Federal Insurance Co., and XL. (www.kycbs.net/Claim-Sia-Guttman-12-8-99.pdf)
12/22/99 Settlement Conference w/ Judge Kurren.
01/01/00 Harmon originates his first website named, “The Catbird Seat.”
01/10/00 Continuation of settlement conference in Judge Kurren’s chambers.
01/27/00 Final settlement conference in Judge Kurren’s chambers. I sign the ‘SETTLEMENT, RELEASE, AND INDEMNIFICATION AGREEMENT’ (the AGREEMENT) which is a global settlement applicable to several pending lawsuits and countersuits, including Civil No. 99-003904 DAE (the RICO lawsuit) which named as defendants:
Federal Insurance Co., Inc.; P&C Insurance Company, Inc.; Marsh & McLennan Companies, Inc.; Pricewaterhouse, Coopers & Lybrand, LLP; Torkildson, Katz, Fonseca, Jaffe, Moore & Hetherington, A Law Corporation; Henry H. Peters, Richard S. H. Wong, Lokelani Lindsey, Gerard Jervis and Oswald Stender, Trustees of the Estate of Bernice Pauahi Bishop; John Mullen & Co., Inc.; Nathan Aipa; Louanne Kam; Rodney Park; William S. Richardson; Gilbert Tam; Peter Lowe; John & Jane Does 1 - 1000, et al. . .
01/27/00 Harmon signs the AGREEMENT.
02/01/00 MARY LOU WOO, Trustee, signs the AGREEMENT.
02/01/00 Trustee files Motion to Approve Settlement Agreement with the Court.
02/11/00 PETER LOWE signs the AGREEMENT.
02/18/00 STEVEN GUTTMAN files “NOTICE OF TRUSTEE’S MOTION TO APPROVE SETTLEMENT”. (NOTE: Trustee’s Motion to Approve Settlement was filed BEFORE the majority of the Defendants and Island Insurance Company had signed the Agreement.)
03/01/00 ISLAND INSURANCE COMPANY (Wilfred K. Kawano, its Asst. Vice President) signs AGREEMENT.
03/21/00 NATHAN AIPA, LOUANNE K. KAM, and RODNEY PARK, as individuals, sign AGREEMENT.
03/22/00 Judge Lloyd King hears TRUSTEE’S MOTION TO APPROVE SETTLEMENT.
03/24/00 Judge Lloyd King approves SETTLEMENT. (IMPORTANT NOTE: Settlement was approved BEFORE the majority of the Defendants had signed the Agreement.)
03/29/00 Former Chief Justice WILLIAM S. RICHARDSON signs the AGREEMENT.
04/13/00 RODNEY PARK, president, signs the AGREEMENT for P&C INSURANCE COMPANY, INC.
04/14/00 GILBERT TAM signs the AGREEMENT.
04/19/00 DAVID A. LOO, V.P., signs the AGREEMENT for JOHN MULLEN & CO., INC.
04/24/00 The date (handwritten) shown on the ‘SETTLEMENT, RELEASE, AND INDEMNIFICATION AGREEMENT as the date the AGREEMENT “is entered into and effective”. (At the time my wife and I signed the AGREEMENT the effective date had been left blank.) (NOTE: Even though the Settlement Agreement was approved by the Court a month earlier, and the effective date is shown to be 04/24/00, the Agreement still has not been signed by all the Defendants.)
04/26/00 ARTHUR C. TOBIN, Managing Partner, signs the AGREEMENT for PRICEWATERHOUSECOOPERS, LLP.
05/03/00 Judge Lloyd King grants a ‘DISCHARGE OF JOINT DEBTORS’, even though the AGREEMENT has not yet been signed by all parties.
05/30/00 We receive a check from the Bankruptcy Interim Trustee, Mary Lou Woo, as our portion due from the bankruptcy settlement, even though the AGREEMENT has not yet been signed by all parties, and all payments have not yet been collected by the Trustee. (The final payment by FEDERAL INSURANCE COMPANY, was not received until 07/01/00.)
06/12/00 Star-Bulletin article by Rick Daysog headed: “Insurance disputes hit Bishop trust - Companies threaten to reject coverage if the estate takes a role in a suit against former trustees.” Article names and relates to named defendants in my RICO lawsuit and to related witnesses and insurance companies, including Federal Insurance Company, Henry Peters, Richard “Dickie” Wong, Lokelani Lindsey, Oswald Stender, Gerard Jervis, XL Insurance Co., P&C Insurance Co., Kamehameha Schools’ interim board of trustees (see Exhibit A), Internal Revenue Service, Judge Patrick Yim, Mid Ocean Ltd. (reinsurance company), Michael Tanoue (court-appointed special master for the trust’s insurance matters AND attorney for Island Insurance Co. which was DEFENDING ME under the terms of my Homeowner’s Insurance Policy, with Roy Hughes as my assigned attorney), Judge Kevin Chang, and Deputy Attorney General Hugh Jones.
06/29/00 (Signature illegible), Assistant V.P., signs The AGREEMENT for FEDERAL INSURANCE COMPANY.
08/11/00 Star-Bulletin article by Rick Daysog reports:
In a sworn affidavit filed in the Hawaii Supreme Court yesterday, Wong's lawyer Eric Seitz said he has been informed that the attorney general`s office reached a "global settlement" on Aug. 4 with ex-board members Wong, Henry Peters, Gerard Jervis, Oswald Stender and Lokelani Lindsey that resolves the pending probate, tax and civil litigation against the former trustees. The plan, which requires approval from the state Probate Court, represents a major milestone in the three-year controversy that has dogged the $6 billion charitable trust. If approved, the deal would avert a costly, one-year trial that is scheduled to begin Sept. 18. Details of the proposed deal remain under seal but Seitz, who represents Wong in the criminal actions brought by the state, said some of the attorney general`s civil claims against the former trustees will be covered by the estate`s $25 million insurance policy with Federal Insurance Co....
According to Seitz, the global settlement was reached by all of the parties, including Federal Insurance, during an Aug. 4 closed-door conference with Probate Judge Kevin Chang. Seitz said the plan was placed on the record, making it enforceable....
09/01/00 Star-Bulletin article about the Guido Giacometti vs. Sukamto Sia lawsuits, which proves undisclosed conflicts-of-interests with Judge Barry Kurren, Judge David Ezra, Judge Lloyd King, Judge Robert Faris, Jon Miho, John Edmunds, Bank of Honolulu, Diane Plotts, Kamehameha Schools, John Waihee, Ben Cayetano, etc.:
09/11/00 (Signature illegible), Managing Director, signs the AGREEMENT for MARSH & McLENNAN COMPANIES, Inc..
09/13/00 ‘SCOPE OF RELEASE AGREEMENT’ signed for MARSH & McLENNAN COMPANIES, INC., by Robert Miller, Its Attorney.
09/15/00 ‘STIPULATION FOR DISMISSAL OF COMPLAINT AS TO ALL CLAIMS AND ALL PARTIES WITH PREJUDICE’ filed for Civil No. 99-00304 DAE (my RICO case). This document is signed by Arnold T. Phillips, Atty for Plaintiff Bobby N. Harmon; by Lissa H. Andrews, for Tam, O’Connor, Henderson, Taira & Yamauchi, Attorneys for FEDERAL INSURANCE COMPANY; by Robert F. Miller, Atty for Defendant MARSH & McLENNAN COMPANIES, INC.; James V. Myhre, of Miyagi, Nohr & Myhre, Atty for JOHN MULLEN & CO.; Warren Price, III, Atty for Defendant PRICEWATERHOUSECOOPERS, LLP; Jeffrey H. K. Sia, of Ayabe, Chong, Nishimoto, Sia & Nakamura, Atty for P&C INSURANCE CO.; Kenneth Hipp, of Marr, Hipp, Jones & Pepper, Atty for HENRY H. PETERS, RICHARD S.H. WONG, LOKELANI LINDSEY, GERARD JERVIS AND OSWALD STENDER, TRUSTEES OF THE ESTATE OF BERNICE PAUAHI BISHOP; and Robert S. Katz, Atty for Defendant TORKILDSON, KATZ, FONSECA, JAFFE, MOORE & HETHERINGTON.
This STIPULATION FOR DISMISSAL is approved by Judge David Alan Ezra.
09/20/00 ‘STIPULATION FOR PARTIAL DISMISSAL OF THE COMPLAINT AND COMPLETE DISMISSAL OF THE COUNTERCLAIM AS TO ALL CLAIMS AND ALL PARTIES WITH PREJUDICE’ and ‘STIPULATION FOR PERMANENT INJUNCTION AND ORDER GRANTING PERMANENT INJUNCTION’ filed by ROBERT S. KATZ and MATT A. TSUKAZAKI, Attys for Plaintiffs, P&C INSURANCE COMPANY, INC., and ADM. ROBERT KIHUNE (Ret.), HONOLULU POLICE CHIEF FRANCIS KEALA (Ret.), RONALD LIBKUMAN, CONSTANCE LAU and DAVID PAUL COON, as Successor Interim Trustees of the Estate of Bernice Pauahi Bishop. Roy Hughes signs ‘Approved as to form’ as Atty for Defendant, Bobby N. Harmon.
10/16/00 Roy Hughes sends me signed copies of the ‘SETTLEMENT, RELEASE, AND INDEMNIFICATION AGREEMENT’ and the ‘STIPULATION FOR DISMISSAL OF COMPLAINT...” which contain several apparent discrepancies, primarily the fact that the five ex-trustees and TORKILDSON KATZ, all Defendants in my RICO lawsuit, have not signed the AGREEMENT. Also, this is the first time I have been informed that Marr, Hipp, Jones & Pepper was representing the ex-trustees. I had previously been advised by Mr. Hipp that they were representing the INTERIM TRUSTEES and NOT the ex-trustees. I was also advised by Mr. Hipp in this same meeting that he was reporting to NATHAN AIPA, who was also a Defendant in my RICO lawsuit.
11/03/00 I write to my defense attorney who was appointed by Island Insurance Company, Roy Hughes, and to my litigation attorney, Arnold T. Phillips, pointing out these discrepancies.
11/04/00 I transmit copies of these letters to my bankruptcy attorney, Bradley R. Tamm, in which I state, “Also, will you be notifying Mr. Guttman of my concerns regarding possible misrepresentations in this case.”
12/14/00 Guttman responds to Tamm, in part:
“As to Mr. Harmon’s inquiry as to ‘possible misrepresentations’, neither the Trustee or I believe there were any misrepresentations in connection with the settlement. . . . No misrepresentations were made by counsel to her as to their roles in the litigation and settlement. The Trustee will oppose any action that attempts to question the settlement.’”
12/17/00 Tamm sends me a copy of Guttman’s December 14th letter. In his transmittal letter Tamm states, in part:
“I am in agreement with Mr. Guttman’s analysis of the attorney representation issue, and for that reason, I see no rationale for challenging the settlement.
“I feel that any challenge to the settlement at this stage would be ill advised and inappropriate. However, this particular area of the law is not my strong suit and for that reason I would advise you to seek out someone better qualified to assist you. Greg (Dunn) and I are bankruptcy attorneys and your present desires for a course of conduct go well far afield of our expertise....
“Should you demand that this office pursue your claims, I would consider it a course of conduct contrary to my advice, and we will therefore be compelled to file a motion to withdraw.”
12/22/00 Star-Bulletin article by Rick Daysog: “IRS OKs ex-trustees’settlement ... A $20.1 million deal ends legal battles over Kamehameha Schools”:
“The Internal Revenue Service has approved a $20.1 million settlement agreement between the Attorney General's Office and the five former trustees of the Kamehameha Schools, putting to rest three years of legal battles over the $6 billion charitable trust.
“In court documents to be filed today, the state Attorney General's Office says the IRS reached closing agreements yesterday with ex-trustees Richard "Dickie" Wong, Henry Peters, Oswald Stender, Gerard Jervis and Lokelani Lindsey.
Terms of the closing agreements were not disclosed. But the Attorney General's Office said it is dismissing its lawsuit against the former trustees with prejudice, meaning that all of the conditions of the Sept. 29 settlement had been met.
"This comes as very good news for the Kamehameha Schools," said trust spokesman Kekoa Paulsen. "With all parties now signing off, including the Internal Revenue Service, the surcharge settlement can be finalized, and Kamehameha Schools can move past this matter and focus on educating children."
In the deal, the Kamehameha Schools will receive about $15 million from the trust's insurer, Federal Insurance Co., to cover investment losses incurred by the ex-board members. The Attorney General's Office will receive $1.3 million to cover its expenses, while the former trustees will get about $4 million to pay for their legal bills.
The Attorney General's Office had been seeking tens of millions of dollars in surcharges against the former trustees, saying the ex-board members took excessive compensation, mismanaged Kamehameha Schools' educational programs and incurred more than $200 million in investment losses.
But the suit was settled two weeks after it was scheduled to go to trial to avoid a costly and lengthy legal battle.
The IRS's approval concludes its lengthy civil investigation into the conduct of the former trustees. Last year, the IRS reached a closing agreement with the nonprofit Kamehameha Schools in which the trust agreed to pay the service $9 million.
Kamehameha Schools archive
12/26/00 I reply to Tamm’s letter, in part:
“Mr. Guttman states that ‘neither the Trustee or I believe there were any misrepresentations in connection with the settlement.’ As this is a legal case, shouldn’t we all be held to a higher standard than ‘we believe’? As I said in my previous letter, there should be existing written documents that clearly state the names of the clients that each attorney is representing. ...
“From the documents that I have been provided, there is a strong indication that certain attorneys in this case may NOT have had permission of the clients and may NOT have disclosed who they were representing in the specific litigation. In fact, I ‘believe’ they may have deliberately MISREPRESENTED on whose behalf they were negotiating the settlement.
“I base this belief on the signatures in the court documents of which I do have copies. To me, these documents definitely appear to be inconsistent and conflicting. Again, it should be rather simple for Mr. Guttman to provide written ‘proof’ in the form of the original engagement letters. Then, as I said in my previous letter, ‘it would indicate that my suspicions were incorrect and further action probably would not be necessary.’ ...
“On the other hand, if such documents do not exist, then I believe this would be a clear indication that fraud was involved and that some action should be taken. If legal action is needed, then the question becomes who should be the party to initiate such action. Being a layman I am not sure, but I would think that it would be the Bankruptcy Trustee’s responsibility as she, presumably, is charged with making certain that ALL parties are acting in good faith and that no fraud is committed.
“If fraud has indeed been committed, then the creditors in this bankruptcy are also being defrauded and suffering monetary losses. If the Bankruptcy Trustee does not take action in a fraud situation, then it would appear that the creditors (especially Bank of America in this case) would also have cause for action. ...
“Turning now to your letter, I am not anxious to challenge anything in court on my sole initiative at this stage. As you may know, I tried for three years without success to find an attorney that would represent me in my original lawsuit on a pro bono or contingency fee basis (as I could not afford otherwise.) ...
“So, as I have indicated in previous correspondence, if there have been no misrepresentations or fraud, then I don’t foresee the need for further challenges on my part. However, if fraud or misrepresentations have entered into this case, then I would think that it would be the responsibility of the Trustee to pursue whatever action is required (including appointing an attorney) and that payment for legal costs would be made from my estate. Again, these are legal questions that I need to ask. ...”
01/03/01 Bradley Tamm responds to my letter of December 26th. He states, in part:
“... I have discussed this matter with Gregg Dunn, and we are of the opinion that neither of us desires to represent you in the prosecution of any fraud action relating to the settlement. ...
“What you seem to be requesting is that we undertake to prosecute an ‘adversary proceeding’ against several attorneys/law firms here in Hawai`i based upon your speculation that they have somehow violated the law in their representation of their clients, or misrepresentation of what you believe are not their clients. I don’t see where any law has been broken, nor where any cause of action may lie – but that is not to say that you don’t have a claim. ... Additionally, this firm does not have the resources to prosecute any law suit against what would likely entail an action against the most powerful law firms in the State of Hawai`i. Bobby, you hired us to do a chapter 7 bankruptcy ... not wage World War III. Thus, Greg and I again decline to represent you...
“Our advice to you in the past, remains the same as it is today, and that is to get on with your life and leave this settlement alone ... Should you decide to pursue this matter without substitute counsel, we will be forced to file a Motion to Withdraw as your attorneys. ...”
01/10/01 I respond to Tamm’s letter of January 3rd:
“... I certainly am aware that we are talking about some of the most powerful laws firms in the state which have unlimited funds to fight any legal action against them. At this stage, however, I am not talking about ‘waging World War III’. ...
“In my previous letters, I simply requested some information regarding the settlement negotiations (which took place behind closed doors), in an attempt to determine if any fraudulent misrepresentations were made to the court, to the bankruptcy trustee or her attorney, to our creditors, and to us or our attorneys. As I have stated before, it certainly appears that fraud is involved here, but I need more evidence before I can make a determination of what action I need to take, if any. If it eventually turns out that I do need to seek the help of another attorney, I will need some material evidence to present my case to him. ...
“At this stage, my only request is that I be provided the following information:
1. The payment amount that each involved party contributed, or agreed to contribute, to the settlement of my RICO lawsuit.
2. A breakdown of these payment amounts between the principals and their insurance companies, if any. ...
3. Copies of engagement letters or similar documents from certain principals appointing their respective attorneys to defend against my RICO lawsuit. In particular, I need to see who legally represented the former Bishop Estate trustees; the interim trustees; P&C Insurance Company, their officers and directors ... ; and Torkildson Katz.
4. Answers to my questions about whether or not it would be the Bankruptcy Trustee’s legal responsibility to pursue any fraudulent or illegal acts that are committed during the course of bankruptcy actions; or, are the debtors and creditors required to take independent action? . . .”
01/11/01 Tamm replies, in part:
“In response to your four questions, I respond as follows:
1. The only information I have regarding the payors is the Trustee’s interim report, a copy of which is enclosed herewith.
2. I believe this to be information that is most probably privileged attorney work product, or attorney-client.
3. This information is most likely attorney-client privileged, and therefore not obtainable.
4. If the bankruptcy trustee believed that actionable fraud was committed, I am sure she would follow up. However, I believe the trustee has expressed her opinion that no actionable fraud has been committed.
“Given your insistence in pursuing this matter, we are left with no alternative but to file a motion to withdraw as your attorneys. You can expect to be served with such a motion in the near future. ...”
01/17/01 Greg Dunn and Bradley R. Tamm file their Motion to Withdraw as Attorneys for Debtor. Although I filed an objection to this request, their Motion was granted by U.S. Bankruptcy Judge Lloyd King on February 28, 2001.
02/24/01 I write to the Personnel Director, Kamehameha Schools to request my Form W-2 and Form 1099-R for the year 2000. I state:
“The 2000 Form W-2 is for the Wage Income I received last year in Settlement of various lawsuits with Kamehameha Schools Bishop Estate. The Form 1099-R is for the Retirement Income payments I received from my Pension Plan.
“Both of these forms are needed as soon as possible to enable me to file my Year 2000 income taxes. The Form W-2 is also needed as I am in the process of filing for my Social Security retirement benefits and Medicare.”
(I issued no courtesy copies of this letter to any party.)
02/28/01 Matt A. Tsukazaki of the law firm TORKILDSON, KATZ, FONSECA, JAFFE, MOORE & HETHERINGTON writes to my attorneys Arnold T. Phillips, Roy F. Hughes and Bradley R. Tamm, stating:
“Enclosed please find a copy of a February 24, 2001 letter from Bobby N. Harmon to the Personnel Director of Kamehameha Schools. . . .
“. . . In the future to the extent that Mr. Harmon has any question about the settlement, please advise him that all inquires should be made by his attorneys. If your legal representation of Mr. Harmon has ceased, as confirmed by your respective offices to my firm, then Mr. Harmon should send all inquires he may have with Kamehameha Schools to my attention.
“In addressing Mr. Harmon’s letter, we note that the settlement payment was not classified as wages and was not compensation in return for services. Mr. Harmon will not be receiving a W-2 for that amount. Nor will he be receiving a Form 1099-R as the settlement would not have adjusted his total earned income at Kamehameha Schools and would not have affected the amount of his retirement benefits. Obviously, if the settlement payment was designated as payment for services, Mr. Harmon would be required to pay federal and state income taxes on the settlement payment and FICA and possibly other assessments would have to be withheld from the funds. It is our understanding that Mr. Harmon sought to avoid such treatment.
“... Please forward this letter to Mr. Harmon. To the extent that Mr. Harmon’s sole basis for his inquiry was based upon his misperception about the classification of his settlement proceeds there will be no other response to his letter.”
Tsukazaki sends a courtesy copy of this letter to Steven Guttman.
02/28/01 Gregory Dunn and Bradley Tamm Motion to Withdraw as Attorneys for Debtor is granted by U.S. Bankruptcy Judge Lloyd King.
03/04/01 I respond to Tsukazaki:
“... As Mr. Tamm has advised, he no longer represents me in this matter, so I am addressing this response directly to you.
“My first comment is that your letter does not contain a statement indicating who you are representing in this matter....
“Next, I firmly disagree with your statement that ‘we note that the settlement payment was not classified as wages and was not compensation in return for services.’ During the final settlement conference in Judge Kurren’s chambers, Mr. Tamm definitely stated that the entire settlement could be ‘characterized’ as wages, and all the attorneys present agreed to accept this condition....
“If your firm was responsible for handling the settlement transactions, as you have indicated, then it appears that someone may have erred by not advising Kamehameha Schools of the agreement that the entire amount of the settlement was to be treated as wage income, which required the proper withholding of taxes, reporting, etc.
“I look forward to your early response regarding these comments.”
(Copies of my letter sent to the Personnel Director, Kamehameha Schools; Mary Lou Woo, Interim Trustee; Steven Guttman; Gayle Lau and Curtis Ching, Office of the U.S. Trustee.)
As of the current date, Tsukazaki has not responded to this letter.
04/02/01 I write to Mr. Guttman:
“As you know, prior to Mr. Bradley R. Tamm withdrawing as my attorney, I had posed a number of questions regarding possible misrepresentation and/or fraud having occurred during the settlement proceedings. Some of these questions were not completely answered before Mr. Tamm’s withdrawal. As I am now acting pro se in this matter, I would like to continue this questioning with your office.
“As you will recall, my basic contention is that certain attorneys which participated in the settlement discussions may have misrepresented on whose behalf they were authorized to negotiate. In particular, these attorneys included Robert Katz, Matt Tsukazaki, Kenneth Hipp, Christopher S. Yeh, and Jeffrey Sia, as detailed in my letters dated October 26. 2000, and November 4, 2000 addressed to my attorneys, Roy Hughes and Arnold T. Phillips.
“In his letter dated January 11, 2001, Mr. Tamm provided me a copy of the TRUSTEE’S 180-DAY INTERIM REPORT FOR THE PERIOD ENDING SEPTEMBER 30, 2000, which described the payments made by various entities to the settlement. This record shows that TORKILDSON KATZ apparently made no contribution to the settlement. I find this very unusual as they were a named party to my RICO lawsuit. Also unusual is the fact that they acted as their own attorneys and were not parties to the Final Settlement ...
“Another indication of possible fraud is the fact that the former Bishop Estate trustees who were named in my lawsuit as INDIVIDUALS: Richard Wong, Henry Peters, Lokelani Lindsey, Gerard Jervis and Oswald Stender, also did not contribute to the settlement.
“The fact that I did NOT name KAMEHAMEHA SCHOOLS/BISHOP ESTATE as a defendant in the RICO lawsuit was intentional. It was not the TRUST that was responsible for the alleged racketeering and corruption. The beneficiaries of the Trust were already the victims. It would be a double injustice for the Trust to pay additional monies to “bail out” the real perpetrators. . . .
“In my letter dated January 10, 2001, addressed to Bradley R. Tamm, I had asked four questions. I am not pursuing the first two questions at this time; however, I still need the following:
1. Copies of engagement letters or other legal documents from certain principals showing the appointment of their respective attorneys to defend against my RICO lawsuit. In particular, I need to see who legally represented the former Bishop Estate trustees, the interim trustees, the current trustees, P&C Insurance Company, Inc., its officers and directors, and Torkildson Katz.
2. Answers to my questions about whether or not it would be the Bankruptcy Trustee’s legal responsibility to pursue any fraudulent or illegal acts that are committed during the course of the bankruptcy case; or, are the debtors and/or creditors required to take independent action?
“If the answer to the second question is that the debtors and/or creditors are required to initiate legal action, then another question I need to ask is, ‘Can the attorney fees and legal costs needed to bring this action be paid from our bankruptcy estate?’ . . .”
04/04/01 Guttman replies to my letter of 04/02/01.
04/05/01 I respond to Guttman’s letter of 04/04/01, in part:
“. . .You advise that the Trustee will continue to honor the settlement agreement and will not take any action that in any way conflicts with the settlement. I do not believe that I have requested that she not honor the agreement or take any action that would conflict with the settlement. . . .
“You state that the concern I express regarding the attorney-client relationship is not an issue for my creditors, the Trustee or myself. I respectfully disagree. If an attorney makes any fraudulent statements of material importance in legal proceedings, I believe this is an issue of concern to all parties in the case.
“You state, ‘While I assume Mr. Katz, Mr. Tsukazaki, Mr. Hipp, Mr. Yeh and Mr. Sia fully advised their clients of their actions, quite frankly, only their clients have standing (the legal right to pursue) the issue. Neither you or my client have legal cause to raise any of the matters you present in your letter.’ Again, I must disagree. I have not said that these attorneys have not advised their clients of their actions. What I have stated is that I believe they may have been untruthful to me, you, the Trustee and the court. If this is correct, then wouldn’t we all have ‘standing’ to pursue the matter?
“You then state, ‘You request copies of the engagement letters between the above-named attorneys and their clients. As you probably know, certain communications between an attorney and his or her attorney are privileged, which means that third parties, such as you and me, have no right to the communication. I have to assume the written communications between the various parties to the settlement and their attorneys will be treated as subject to the privilege, including engagement letters.’
“I have to take issue with your statement that you ‘assume’ the engagement letter will be treated as privileged. This indicates to me that both you and my attorneys originally neglected to request copies of representation letters even though this was a key issue in my RICO lawsuit as well as in the settlement negotiations. Secondly, it would appear that because you ‘assume’ the other parties will treat the engagement letters as privileged, you have not made any effort to obtain copies.
“You state that in this specific case, the Trustee will not ask any of the individuals involved in the settlement to waive the privilege or take any action that will cause them to incur any further fees and costs relating to the matters set forth in my April 2 letter. As I indicated above, I believe that it is improper to ‘assume’ that the engagement letters would be treated as privileged. As for the additional costs to produce copies of these letters, I would be willing to pay the copying costs . . .
“You further state, ‘You also imply that you are concerned as to who paid the settlement money. The Trustee’s bargain was for a gross amount, which was fully paid. We did not bargain for any particular party to the settlement to pay any specific amount.” This statement itself raises very serious concerns. My belief at the time of the negotiations was that you and the Trustee were obligated to take into consideration all the allegations involving the numerous entities and complex issues in my RICO lawsuit, and to negotiate a fair settlement. Under these circumstances, I find it incomprehensible that you and the Trustee would not bargain for any particular party to pay any specific amount. Why was this not disclosed to us at the time of the settlement negotiations? Is this one of the reasons I was prohibited from sitting in on the meetings — so that this fact could be kept secret? . . .
“You state, ‘. . . I think it is clear that all issues relating to your involvement with your former employer are settled and you have no further right to litigate any issue that may have existed at the time of the settlement. The matters you are raising do not change the fact that you do not have a basis to reopen the litigation.’ As I have indicated in previous letters, I am not presently considering litigation against my former employer. If, however, any of the attorneys involved in the settlement discussions committed fraud and/or deliberately concealed material information, then I do believe that I may have a cause of action against those individual attorneys.
“Your letter concludes with the statement, ‘We would appreciate receiving your written acknowledgment that you understand the terms of the settlement and you won’t be further communicating in any form or forum regarding the issues relating to the settlement. For the Trustee to proceed with what is needed to fully close the estate, she needs to know that you are not going to take action that is inconsistent with the terms of the court approved settlement or in any way will involve her and/or the estate.’ Although I do not intend to take action that is inconsistent with the terms of the settlement, obviously there are still questions involving this case that remain unanswered.
“I trust that you will make reasonable efforts to provide these answers as soon as possible.”
04/18/01 I write to Guttman regarding a Form 1099-MISC received from his office:
“This acknowledges receipt of Form 1099-MISC for the year 2000...
“As I previously explained in a letter dated March 4, 2001 to Mr. Matt Tsukazaki, with a copy to your office, in our settlement negotiations it was agreed that the entire settlement amount was to be treated as wage income. As such, this payment should have been reported on IRS Form W-2, with proper withholdings for federal and state income tax, Social Security and medical and health benefits. It is incorrect to report wage income on Form 1099-MISC.
“As I explained in previous correspondence with Mr. Tsukazaki, this improper reporting of wage income prevents me from receiving my full entitlements to Social Security benefits as well as income under my Kamehameha Schools’ Pension Plan.
“The failure to report wage income to the Internal Revenue Service also deprives the government of tax revenues and is illegal. I have no wish to be accused by the IRS at some later date that I illegally avoided paying all appropriate taxes on this settlement.
“I have not received a response from Mr. Tsukazaki to my letter of March 4th, so I am addressing this letter to your attention for resolution of this matter.”
04/27/01 Guttman replies to my letter of April 18th.
05/01/01 I respond to Guttman’s letter of 04/27/01:
“You state in your letter, ‘I will reiterate the fact that the Trustee had no obligation to send to you a 1099. The only reason it was sent was because you requested it. The amount set forth on the 1099 was the amount you received as your exemption claim. Because the Trustee was only the conduit for your receipt of your exempt funds, there is no legal requirement for the issuance of the 1099 to you. Your receipt of the 1099 was done as a courtesy to you based upon your specific request.’
“In response to this I must, first of all, question the ‘reiterate the fact’ portion of your statement. This is the first time that I have been advised that the Trustee was not required to issue any report of income to the IRS. As I am not an attorney or a tax accountant, I am not in a position to dispute the accuracy of your statement that Trustees are not required to report income to the IRS, but I do wish to state for the record that I was not advised of this until one year after I signed the Settlement Agreement. Also, I should point out that I was requesting an IRS Form W-2 from Kamehameha Schools and NOT a Form 1099 from the Trustee. (Emphasis added.)
“You continue, ‘The statement in the second paragraph of your April 18 letter is not true. No one agreed in entering into the settlement that any amount ‘was to be treated as wage income’.’ I completely disagree with your statement and maintain that my April 18th letter is truthful. . . .
“As this now appears to be a ‘you said, he said, she said’ situation, I would like to ask if you have obtained letters or affidavits from all parties (including my then-attorneys, Bradley R. Tamm, Arnold T. Phillips II, and Roy F. Hughes) stating that the agreement reached at the settlement conferences was that the entire amount was NOT to be characterized as wage income. If so, may I please be furnished copies of these documents. . . .
“You continue, ‘As I have noted in prior correspondence to you, your letter writing is having a detrimental effect as to your creditors and the closing of the estate. ... I renew the request that you allow the case to be closed and you not continue with presenting what I think are spurious arguments.’ . . .
“Although I am not an attorney, I must take exception with what you think are ‘spurious arguments.’ . . .
“To date, I have not been provided satisfactory answers to the vast majority of questions that I have posed to you and to my previous attorneys over the past year. Although I would certainly like to see this case closed, I still believe I have the legal right to question if misrepresentations and/or fraudulent statements were made in the course of the bankruptcy proceedings.
“If I do not have this legal right, then I would appreciate your advising me of any legal statutes or precedents which may apply to this case.”
05/07/01 Guttman sends me a strongly worded letter regarding the confidentiality issues of this case.
05/10/01 I responded to Guttman, in part, as follows:
“First, I wish to thank you for your explanation of the confidentiality clause . . . Although I have asked several times for clarification of this clause, I believe this is the first time I have ever been given a specific answer. . . .
“Unfortunately, this appears to be the only question that you have clearly answered. . . .
“I believe you have also missed another key point in my previous correspondence. At the settlement conference, I was not the one who stated that the entire settlement could be categorized as ‘wage income’ – it was my then-attorney, Bradley R. Tamm, who made this determination. All of the attorneys present at the conference expressed their agreement to this categorization. . . .
“You state that I have raised certain questions independent of the wage income allegation in my most recent correspondence, and request that I reread what had been set forth in prior letters because you are of the opinion that those matters were fully addressed. I have reread these letters (several times) and I regret to say that I fail to see where I have been provided with answers to the majority of my questions. To try to keep this letter focused and reasonably brief, however, I am addressing only the ‘wage loss’ issue herein. I intend to address the remaining issues soon in separate letters. ...”
05/29/01 I write another letter to Guttman addressing the “Conflicts / Misrepresentations” issues in this case:
“As you know, in my RICO lawsuit (CV 99 00304) in US District Court, I named the following defendants:
Federal Insurance Co., Inc.; P&C Insurance Company, Inc.; Marsh & McLennan Companies, Inc.; Pricewaterhouse, Coopers & Lybrand, LLP; Torkildson, Katz, Fonseca, Jaffe, Moore & Hetherington, A Law Corporation; Henry H. Peters, Richard S. H. Wong, Lokelani Lindsey, Gerard Jervis and Oswald Stender, Trustees of the Estate of Bernice Pauahi Bishop; John Mullen & Co., Inc.; Nathan Aipa; Louanne Kam; Rodney Park; William S. Richardson; Gilbert Tam; Peter Lowe; John & Jane Does 1 - 1000, et al. . . .
“... my RICO lawsuit named the ex-trustees as individuals – it did not name Kamehameha Schools. I had questioned, many times, who was representing the ex-trustees ... in the various lawsuits, and had even asked Katz and Tsukazaki for a copy of their appointment letter to verify who they were representing (which they would not provide.) In the state lawsuits, Katz and Tsukazaki indicated that they were representing the trustees and P&C Insurance Company. Later on, in the federal RICO lawsuit, Mr. Hipp and Mr. Yeh stated that they represented KSBE and the interim trustees, but not the ex-trustees. (Emphasis added.)
“... The apparent misrepresentation appears in the document, Civil No. 99-00304 (the RICO lawsuit), ‘Stipulation for Dismissal ....’ In this document, Kenneth Hipp has signed as the ‘Attorney for Defendant, HENRY H. PETERS, RICHARD S. H. WONG, LOKELANI LINDSEY, GERARD JERVIS AND OSWALD STENDER, TRUSTEES OF THE ESTATE OF BERNICE PAUAHI BISHOP.’ Robert Katz has signed this document as “Attorneys for Defendant TORKILDSON, KATZ, ...’
“If indeed these attorneys misrepresented on whose behalf they were negotiating a settlement, it would appear that these misrepresentations would be a material factor in the ultimate settlement of this case . . .”
“On November 4, 2000 I sent another letter to Mr. Hughes and Mr. Phillips commenting on the “SCOPE OF RELEASE AGREEMENT” in which I stated, in part:
“The individual signing this document as the attorney for KAMEHAMEHA SCHOOLS and P&C INSURANCE COMPANY, is Jeffrey Sia. The date of signing is shown as June 7, 2000.
“My records indicate that Jeffrey Sia represented only P&C Insurance Company in this matter. If this is correct, then Mr. Sia has apparently misrepresented to the Court that he was also acting as the attorney for Kamehameha Schools. Furthermore, if Mr. Sia was not the attorney for Kamehameha Schools, then no legal representative for the estate has signed this document. . . .”
“Unfortunately, it appears that the majority of my questions still remain unanswered. Although you may characterize these questions as ‘spurious’ and not deserving of an answer, to me they are very ‘serious’.
“Perhaps it would be helpful if I rephrased some of the basic factual questions which I believe are pertinent and appropriate:
1. On what date was Marr Hipp Jones & Pepper engaged to represent Henry H. Peters, Richard S.H. Wong, Lokelani Lindsey, Gerard Jervis and Oswald Stender (the ex-trustees)? Would you please provide documentation.
2. On what date was Jeffrey Sia engaged to represent Kamehameha Schools? Would you please provide documentation.
3. In a bankruptcy case, is it the Bankruptcy Trustee’s responsibility to pursue any fraudulent acts that might have occurred during the settlement negotiations, or, are the debtors and creditors required to take independent action?
4. If I am required to take independent legal action, would the Trustee pay legal fees and costs from the estate?
“While on the subject of conflicts of interest, I must add one new question. This is with regard to SUSAN TIUS, ESQ., who has signed as Attorney for the Kamehameha Schools Bishop Estate in Bankruptcy Case No. 99-04339 (the Harmon Bankruptcy). I have learned that Ms. Tius is the wife of Guido Giacometti, who was previously an executive with Kamehameha Schools Bishop Estate.
“Mr. Giacometti is mentioned in my RICO lawsuit as one of the executives who co-invested with the Trust in the notorious ‘McKenzie Methane deal’. Consequently, this appears to be another substantial conflict of interest situation not previously disclosed.
“I have also been informed that Ms. Tius has, or had, a business relationship with Trustee MARY LOU WOO. This may or may not be true, but because of Mr. Giacometti’s involvement with Bishop Estate, and his more recent involvement with the bankruptcy of Sukamto Sia, I must bring up this issue. My new question, then, is:
5. Have you or Ms. Woo ever had any business or personal relationships with Ms. Susan Tius, Mr. Guido Giacometti, Mr. Sukamto Sia, Mr. Ben Cayetano, Mr. Earl Anzai, any of the entities named in my RICO lawsuit, the interim or current trustees of Bishop Estate, or any current or former employees of Kamehameha Schools and, if so, would you please describe, in detail, the connection? . . .”
06/02/01 I send another letter to Guttman regarding unanswered questions pertaining to the settlement contributions of various entities.
06/04/01 Guttman replies to my letter dated 05/29/01.
06/07/01 I respond to Guttman’s letter of 05/29/01, in part as follows:
“. . . The first question in my May 29th letter was: ’On what date was Marr Hipp Jones & Pepper engaged to represent Henry H. Peters, Richard S.H. Wong, Lokelani Lindsey, Gerard Jervis and Oswald Stender (the ex-trustees)? Would you please provide documentation.’
“Apparently, you have chosen not to answer this question; nor have you indicated that you have referred this question over to Marr Hipp Jones & Pepper, as you did with similar questions related to Mr. Jeffrey Sia.
“My second question was: ‘On what date was Jeffrey Sia engaged to represent Kamehameha Schools? Would you please provide documentation.’
“Your response was that you are forwarding a copy of the letter to Mr. Sia, and that, ‘I leave it to Mr. Sia to decide whether he chooses to answer your two questions.’
“My third question was: ‘In a bankruptcy case, is it the Bankruptcy Trustee’s responsibility to pursue any fraudulent acts that might have occurred during the settlement negotiations, or, are the debtors and creditors required to take independent action?’
“My fourth question was: ‘If I am required to take independent legal action, would the Trustee pay legal fees and costs from the estate?’
“Your answer to these two questions was, ‘You have previously asked the third question set forth on page 10 of the letter and I repeat my prior remarks as to there not being any fraudulent act in connection with the settlement negotiations. Your letter acknowledges having been told that you do not have any cause of action based upon the subject of your ruminations on who was representing whom during the course of your various lawsuits. Based upon the spin you have given to some of my prior comments, I will also state that I am not implying that there are any other subjects relating to you, your case, the settlement process, etc., that give rise to anyone initiating any legal action. Further, as to both your third and fourth questions, the Trustee has a duty to not pursue a frivolous course of action or support what we believe to be a frivolous act.’
“Although I have attempted to make my questions as brief and clear as possible, I believe you may have read more into them than I had intended. Both my third and fourth questions could pretty much have been answered with a simple ‘Yes’ or ‘No’. Now that I have clarified this a little further, could I please have a simple answer?
“My fifth question was: ‘Have you or Ms. Woo ever had any business or personal relationships with Ms. Susan Tius, Mr. Guido Giacometti, Mr. Sukamto Sia, Mr. Ben Cayetano, Mr. Earl Anzai, any of the entities named in my RICO lawsuit, the interim or current trustees of Bishop Estate, or any current or former employees of Kamehameha Schools and, if so, would you please describe, in detail, the connection?’
“Since this was the first time I have ever broached this issue, I do not believe it falls under the comment in your first paragraph which stated, ‘Most of the letter repeats what has already been said regarding the various law firms that were involved in the federal RICO litigation and the subsequent settlement approved by the Bankruptcy Court.’ Therefore, why you have chosen not to comment on this question?
“In your first paragraph you state, ‘I also have recommended that you retain your own attorney to review the matters you have addressed in your numerous letters.’ As I have informed you in previous letters, I am now acting pro se in this matter. Is this not legal in bankruptcy actions? Furthermore, I have been awaiting meaningful answers to my third and fourth questions before deciding if I should even attempt to seek a new attorney.
“You also state in your letter, ‘Although I am not your attorney, I will advise you that if you initiate any legal action which is in any way connected to the settlement, including the negotiations that lead up to the settlement, you will face a countersuit by the settling parties for having filed a lawsuit on what I have previously characterized as spurious legal theories. All the attorneys involved in your litigation, including your Bankruptcy Court attorney, were aware of the relationship each individual attorney had with other parties to the litigation. You appear to believe the relationships created a conspiracy but the reality is that the parties identified themselves and who they represented when appearing in court. The settlement document is not the first time they identify who they are representing. ...’
“If, as you state, you and all the attorneys were aware of the relationship each individual attorney had with other parties to the litigation, why has this information been denied to my wife and I – even after repeated questioning? You state that the settlement document is not the first time they identify who they are representing. Is there a legal basis for denying us copies of these documents that I have previously requested?
“You continue in the same paragraph, ‘There is no fraud or any other basis for you to take ‘independent legal action’.’ Again, it is not my intent to take any independent legal action until I am able to determine, within reason, for myself if any fraud or other illegal activity has entered into this case. That is the primary purpose of the questions in my May 29th letter.
“You state in the final paragraph of your June 4th letter, ‘I am going to recommend to the Trustee that I not respond to you as to any future correspondence you send repeating your views on the subjects previously presented. Based upon this most recent letter, I can only conclude that no matter what is said to you regarding the court approved settlement, you will generate a further letter. The bankruptcy estate needs closure and responding to your correspondence is delaying the process.’ (Emphasis added.)
“I will respond to this by saying that, in my opinion, it is not my correspondence that is delaying the closure process. I believe the process is being delayed because of a failure to provide answers to the questions that I have repeatedly raised. . . .”
06/08/01 I write the following to Guttman regarding an IRS Notice of Levy:
“I am enclosing a Notice of Levy which was served on First Hawaiian Bank by the Internal Revenue Service. According to the Notice the total amount due is $3,071.11.
“I was given the impression by my former bankruptcy attorneys that these taxes would be paid by the Bankruptcy Trustee, and that my personal bank account would not be subject to attachment.
“As I may need these funds in order to relocate, pay emergency medical care costs for my mother, and to pay other bills, it is extremely important that you take action to have this Levy removed immediately.”
06/08/01 Guttman replies regarding the IRS Notice of Levy.
06/11/01 I respond to Guttman as follows:
“This acknowledges receipt of your letter dated June 8, 2001, in which you state, ‘I have repeatedly informed you in my correspondence that your actions were keeping the estate opened. One of the consequences of the case remaining open is that the Trustee is not able to proceed with her final report and seek authorization to disburse payments to pre-petition creditors. The Trustee can only issue a payment after the Bankruptcy Court has authorized the disbursement.’ . . .
06/11/01 Guttman replies to my June 11th letter
06/14/01 I respond as follows:
“In my letter of June 11th, I inquired: ‘... it appears that you are saying that the IRS has the legal right to place a levy on our assets because part of the debt is unsecured and the Bankruptcy Court has not yet authorized the disbursement.’
“Is this a correct interpretation of your letter?. . .”
“Your answer to these questions was: ‘Answering the questions in the June 11 letter would be inconsistent with my statements in the prior paragraph and are examples of the type of questions that a bankruptcy attorney could answer without knowing the specifics of your case. Although I will probably regret giving you any response to this most recent letter, I will inform you that the granting of your discharge removed the stay on any action by the Internal Revenue Service. My comment as to part of the debt being unsecured had to do with the disbursement scheme and not the legality of the IRS action. I think any further comment would be giving you legal advice and, as noted many times before, I am not your attorney.’
“The prior paragraph that you refer to states: ‘You are allowed to proceed pro se. I have made my comments as to your retaining counsel because some of your questions could easily be answered by an attorney with familiarity of the bankruptcy system. Further, as I have tried to explain to you, my role is representing the Trustee and not to give you advise (sic) or speculate with you as to what a trustee may or may not do in a specific case or fact situation. The Bankruptcy Rules provide the procedure to raise legitimate questions a party to a case may have. Because you are pro se, my initial responses differed from what would have been written to an attorney. The appropriateness of any further correspondence will be determined by the same standard that would apply to an attorney representing a party to the case.’ . . .”
06/15/01 I write to Guttman:
“This responds to the portions of your letter dated June 11, 2001 regarding attorney conflicts of interest.
“In my letter dated May 29, 2001, I stated the following:
“While on the subject of conflicts of interest, I must add one new question. This is with regard to SUSAN TIUS, ESQ., who has signed as Attorney for the Kamehameha Schools Bishop Estate in Bankruptcy Case No. 99-04339 (the Harmon Bankruptcy), I have learned that Ms. Tius is the wife of Guido Giacometti, who was previously an executive with Kamehameha Schools Bishop Estate....
“Your response was: ‘You keep using in your letters the phrase ‘fraudulent acts.’ I have been meaning to mention to you that the only item in your bankruptcy case that I think gives rise to a charge of a fraudulent act was your election not to list all the pending litigation in your original Schedule B or Statement of Affairs. I am reminded of this failure to list what proved to be an asset of the estate by your inquiry as to Ms. Tius. You were told by the Trustee at the time she first met you and discussed the litigation which had not been listed that the attorney who usually represents her is Ms. Tius, but in this case, because of the Bishop Estate related lawsuits, she would retain someone other than Ms. Tius. Based upon the specific statement made to you with your then attorney being present, I do not understand your recent inquiries as to Ms. Tius. Please note that my previous sentence is not an invitation for you to send me another letter.’
“To answer your comment that ‘the only item in your bankruptcy case that I think gives rise to a charge of a fraudulent act was your election not to list all the pending litigation in your original Schedule B or Statement of Affairs,’ as you are aware from our initial meeting with Trustee Mary Loo Woo, with our then-bankruptcy attorney, Greg Dunn in attendance, this omission was explained as being due to the fact that my wife and I simply did not initially understand that these lawsuits and countersuits were ASSETS. In any event, we thought that Ms. Woo and all others present at the time were satisfied with this explanation, and I do not understand why this situation should ‘give rise to a fraudulent act’ at this late date.
“I also wish to respond to your comment: ‘You were told by the Trustee at the time she first met you and discussed the litigation which had not been listed that the attorney who usually represents her is Ms. Tius, but in this case, because of the Bishop Estate related lawsuits, she would retain someone other than Ms. Tius.’ To be honest, this was so long ago that I have slim recollection of the details of the discussion, and I almost certainly did not connect the name of Susan Tius with Guido Giacometti at the time. However, it is not the fact that Ms. Woo chose to use a different attorney that I believe is important in this case, it is the fact that KAMEHAMEHA SCHOOLS BISHOP ESTATE retained Ms. Tius knowing that there was a conflict of interest.
“Keeping in mind that at our first meeting with Ms. Woo it was not known (by me, at least) that Ms. Tius would be representing KSBE, I believe that it would have been prudent legal practice for the Trustee’s attorney, or one of my attorneys, to immediately challenge such representation as soon as it became known. At a minimum, I would think that this fact should have been disclosed to all parties for discussion and resolution before continuing with the case.
“I have attempted not to ask any new questions in this letter; however, I wish to point out that you have not answered question No. 1, or completely answered question No. 5, contained in my May 29th letter. Consequently, I find it necessary to ask this one question: Do you intend to fully respond to these questions in future letters?”
Guttman has not responded to the above described letter of June 15th.
06/18/01 - I write to Guttman regarding legal representation issues:
“This is to respond to the legal representation issues addressed in your letter dated June 11, 2001.
“You state, ‘You are allowed to proceed pro se. I have made my comments as to your retaining counsel because some of your questions could be easily answered by an attorney with familiarity of the bankruptcy system. . . . Because you are pro se, my initial responses differed from what would have been written to an attorney. The appropriateness of any further correspondence will be determined by the same standard that would apply to an attorney representing a party to the case.’
“Let me say first that I understand your comment; however, at the risk of repeating myself, let me quote from my letter dated December 26, 2000 addressed to my then-attorney, Bradley R. Tamm:
‘... I am not anxious to challenge anything in court on my sole initiative at this stage. As you may know, I tried for three years without success to find an attorney that would represent me in my original lawsuit on a pro bono or contingency fee basis (as I could not afford otherwise). No attorney wanted, or could afford, to take on these giants, so that I (who was never in court in my life) was forced to take them on myself – with the inevitable result.
‘So, as I have indicated in previous correspondence, if there have been no misrepresentations or fraud, then I don’t foresee the need for further challenges on my part. . . .’
“My position has not changed to any great degree from the date of my letter. I still want to avoid taking any legal action on my own initiative at this stage. I still have not received enough information regarding ‘who was representing whom, and when,’ to enable me to make a reasonable decision as to whether or not I may even have a case, and, if so, what kind of case. Until I can make this decision, I do not wish to seek an attorney with any particular speciality or degree of expertise.
“You state in your letter: ‘The Bankruptcy Rules provide the procedure to raise legitimate questions a party to a case may have.’ I have tried to limit my questions to you to the facts in this case, such as the dates of engagement for various attorneys, to which I believe I may be entitled. I have not intentionally sought any legal advice from you; however, I may have unintentionally worded some questions inappropriately. I respect your comment that any further correspondence will be determined by the same standard that would apply to an attorney representing a party to the case. That is all I ask and expect.
“I, too, am anxious to see this case closed as soon as possible in order to see our creditors paid and to avoid having our personal bank accounts levied by the IRS and others. I still wish, however, to avoid taking any unnecessary or futile legal action at this time given my incomplete knowledge of the facts in this case.”
Guttman has not responded to the above described letter dated June 16th.
07/30/01 I write to the Office of Disciplinary Counsel regarding “Steven Guttman, Esq., attorney for Trustee Mary Lou Woo, as a complaint regarding failure to respond to requests for information, which concludes:
“As I am not an attorney, perhaps I have a mistaken belief that the bankruptcy Trustee, and her attorney, have the ethical responsibility, if not the legal duty, to perform a reasonable investigation into any allegations of fraud or misrepresentation. Perhaps I am also mistaken that they should provide timely response to reasonable requests for factual information pertaining to the case.
“If I am indeed mistaken in these beliefs, then you may simply advise me of this fact and close your file on this complaint letter.”
cc: Mr. Steve Guttman, Esq.
Attorney at Law
1132 Bishop St., Ste 1404
Honolulu, HI 96813
Gayle Lau, Esq.
Curtis Ching, Esq.
Office of the U.S. Trustee
1132 Bishop St., Ste 602
Honolulu, HI 96813
08/01/01 Letter from Carole R. Richelieu, Chief Disciplinary Counsel:
“This will acknowledge receipt on July 31, 2001, of your ethics grievance regarding attorney Steven Guttman.
“In your letter, you complain that Mr. Guttman will not respond to your requests for information. Please be advised that the ethics rules provide that Mr. Guttman only has a duty to communicate with his client and that information relating to his representation is generally confidential. As our office does not handle legal matters, we are not able to address any legal duties involved in the situation described by you. It does appear, however, that many legal issues and disputes are involved, which can only be resolved by the court.”
09/11/01 (Coincidence or Conspiracy?) The 9-11 attacks on the World Trade Center and the Pentagon.
This is a leaf from
Claims By Harmon
To go to the top of the tree
The Catbird Seat