Steven Guttman Claim

Bobby N. Harmon, CPCU, ARM

10951 Southgate Manor Drive, Apt. #4 Tel & Fax No. (502) 964-0694

Louisville, Kentucky 40229-1655

August 4, 2004

VIA facsimile only @ (808) 529-7177

Mr. Steven Guttman, Esq.

Kessner Duca Umebayashi Bain & Matsunaga

220 South King Street, 19^th Floor

Honolulu, HI 96813

RE: Notice of Claim - Steven Guttman, Esq., Kessner Duca Umebayashi Bain & Matsunaga

Ref. Mary Lou Woo, Trustee v. Bobby N. Harmon

Dear Mr. Guttman:

This is a follow-up to my Notice of Claim reported on December 12, 2003, and my follow-up dated June 19, 2004, against you and the law firm of Kessner Duca Umebayashi Bain & Matsunaga, for racketeering, tax fraud, mail fraud, wire fraud, conspiracy to commit fraud, breach of attorney-client privilege, conflicts of interests, obstruction of justice, and other wrongful acts. As I stated in those letters:

“As evidence attesting to the truthfulness of these allegations, I am providing you a copy of Bradley R. Tamm’s facsimile dated April 6, 2002, addressed to you, Matt Tsukazaki and Susan Tius. In this communication, Bradley Tamm attached a copy of my letter to Gregory T. Dunn dated March 30, 2002, and stated:

‘TRANSMITTED HEREWITH IS A COPY OF A LETTER RECENTLY RECEIVED FROM MR. HARMON. APPARENTLY, HE IS SENDING NEARLY IDENTICAL LETTERS TO ALL OF US.

‘I WOULD REQUEST THAT MR. TSUKAZAKI RELEASE TO ME A COPY OF ANY SIMILAR LETTERS SENT TO HIM, MS. TIUS, OR BISHOP ESTATES. I BELIEVE WE SHOULD ALL COOPERATE IN EXCHANGING SUCH INFORMATION FOR OUR MUTUAL BENEFIT AND THE PRESERVATION OF OUR CARRIER’S INTERESTS.’

“I request that you promptly report this claim to your insurance carrier, and ask that their authorized Claims Adjuster contact me as soon as possible for further information.”

Since I still have not been contacted by your insurance carrier, it appears that I have no choice at this time but to present more details of my claim directly to you. In an attempt to keep this letter as succinct as possible, however, I will concentrate on just two individuals involved in this case: Lyn Flannigan Anzai and Louanne Kam.

The following is quoted from my letter dated July 26, 2000, addressed to Kamehameha Schools former CEO, Dr. Hamilton McCubbin:

July 26, 2000

[Hand Delivered]

Dr. Hamilton McCubbin, CEO
Kamehameha Schools
567 South King Street, Suite 200
Honolulu, Hawaii 96813

RE: Kamehameha Schools and P&C Insurance Company, Inc. - Equity 2048

Dear Dr. McCubbin:

Thank you for the opportunity to meet with representatives of Morgan, Lewis & Bockius, LLP on this date. As I understand the major focus of your investigation to be the improper use of outside legal counsel, accounting firms and other third-parties, the following is a list of individuals and companies that, in my opinion, colluded to improperly transfer trust assets from the Kamehameha Schools and related companies:

Attorneys and Law Firms

Cades Schutte Fleming & Wright (Michael Hare)

Chee & Markham (Kevin Chee)

Devens Lo Nakano & Youth

Watanabe Ing & Kawashima (Douglas Ing and James Kawashima)

Goodsill Anderson Quinn & Stifel

Law Offices of Stanford Manuia (Stanford Manuia)

Torkildson Katz Jossem Fonseca Jaffe Moore & Heatherington

Carlsmith Ball Wichman Murray Case & Ichiki

Nathan Aipa, Louanne Kam, Lyn Anzai and Colleen Wong often directly engaged these firms to handle insurance claims without the required authorization of the insurance companies, including P&C.

Once the firms were engaged, these KSBE employees "controlled" and "managed" the claim directly with outside counsel, deliberately disregarding insurance company guidelines regarding the use and payment of these firms. Nathan Aipa, as principal executive of the Legal Group, had ultimate approval of all legal bills including P&C's.

Aipa would frequently pay these legal fees and costs from his General Counsel Account, without approval from the insurance companies. Often the amounts billed by the law firms exceeded allowable fees and costs provided in the insurance company guidelines. When, if ever, KSBE submitted the legal bills to the insurance company, many of the charges were disallowed. This practice led to the loss of millions of dollars that were never recovered from the insurance companies.

In the case of claims under P&C Insurance Company policies, Nathan Aipa, Louanne Kam or other KSBE attorneys directed that P&C pay the bills even though the outside firms flagrantly disregarded P&C's written guidelines.

These outside legal firms reported directly to in-house counsel, rather than to the insurance companies. In-house attorneys, including Aipa, often would not disclose critical information to the insurance carriers in these "sensitive" claims, resulting in further millions lost to the estate due to "non-cooperation".

This situation became particularly suspect and troublesome when these same KSBE employees handled claims in which they also had participated in the original financial transactions. They may have been potential witnesses-- even defendants-- in resultant lawsuits. These were extremely serious "conflict of interest" situations.

With P&C this became even more critical due to the obvious violation of "arms-length" principles, which potentially exposed the estate to unlimited losses beyond the actual insurance policy coverages and limits of liability.

During my years at KSBE, the following are just some cases in which KSBE and P&C funds were misused in the handling of insurance claims:

McKenzie Methane

Kona Enterprises

Ted Fields

Robert Trent Jones Golf Club

McConnell vs. KSBE

William Rosehill

From all public accounts and from my personal experience, these imprudent practices have continued – unhindered and unabated – from the time of my departure until the present, under both the ex-trustees and the interim trustees.

< END OF QUOTATION >

After Lyn Anzai left Kamehameha Schools, she was employed as the General Counsel for Hawaiian Airlines. The following is taken from www.the-catbird-seat.net/Paradise.htm:

April 4, 2002

Advocates Of Casinos Spent Big On Lobbying

CasinoMagazine.com

Mainland investors who want to open two casinos on O'ahu spent more money touting their agenda before lawmakers at the start of this legislative session than any other group, state Ethics Commission records show.

Marketing Resource Group, of Lansing, Mich., reported spending $108,679 on lobbying through January and February, the period covered by lobbyist expenditure reports due at the commission yesterday....

Hawaiian Airlines reported spending $8,300 on lobbying during January and February. Hawaiian, which sought to merge with rival Aloha Airlines, had reported spending more than $140,000 on lobbying during the previous period.

But Hawaiian later said it had mistakenly inflated that figure by including payments for work other than lobbying. In an amended report, Hawaiian said it really spent only $8,250 on lobbying during the May-December period.

The company had initially reported paying more than $83,000 to lobbyist Lyn Anzai, wife of state Attorney General Earl Anzai, whose office was investigating whether the merger would be legal.

The amended report reflects no lobbyist payments between May and December to Lyn Anzai, who is also Hawaiian's general counsel. The report for January and February said Anzai was paid $2,043 for lobbying during that period.

< END OF QUOTATION >

What you DID NOT DISCLOSE to me, or to the American Arbitration Association, is the fact that your firm, Kessner Duca Umebayashi Bain & Matsunaga, serves as an outside attorney for Hawaiian Airlines.

To cite just a couple of examples for verification:

No. 25200 - In the Intermediate Court of Appeals of the State of Hawaii

ALVIN J. CORREA, Claimant-Appellee v. HAWAIIAN AIRLINES, INC., and KEMPER INSURANCE COMPANY, Employer/Insurance Carrier - Appellant

Clyde Umebayashi, James N. Duca, Muriel M. Taira (Kessner Duca Umebayashi Bain & Matsunaga) for employer/insurance carrier-appellant.

No. 25499 - In the Intermediate Court of Appeals of the State of Hawaii

URSULA M.O. FREITAS, Claimant-Appellant v. HAWAIIAN AIRLINES, INC. and KEMPER INSURANCE COMPANIES, Employer/Insurance Carrier-Appellee

Clyde Umebayashi and James N. Duca (Kessner Duca Umebayashi Bain & Matsunaga), for employer/insurance carrier-appellee....

Besides the fact that Lyn Anzai was Hawaiian Airlines General Counsel, I also believe that Kamehameha Schools owned substantial stock in Hawaiian Airlines and/or Aloha Airlines.

Louanne Kam, as you know, was the ONLY WITNESS called by you at the Arbitration Hearing – with Matt Tsukazaki of Torkildson Katz acting as her attorney.

In the best interests of all parties concerned with the final settlement of the subject case, including Trustee Mary Lou Woo, I would urge you again to report this claim to your professional liability insurance carrier for handling.

Or, if you and your firm, and other concerned parties such as Kamehameha Schools; P&C Insurance Company; Torkildson Katz Fonseca Jaffe Moore & Heatherington; Marr Hipp Jones & Pepper; Susan Tius; Jeffrey Sia; Bradley Tamm; Mary Lou Woo, etc., would rather attempt to negotiate a global, out-of-court settlement of all these separate claims (which can be found on the internet at www.the-catbird-seat.net/Claims-By-Harmon.htm), then I would be willing to consider this approach.

In the end, I believe this would be the fastest, least disruptive, and most cost-effective method of bringing this case to absolute, FINAL closure.

Very truly yours,

Bobby N. Harmon

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

James B. Farris, Senior Case Manager, American Arbitration Association

VIA fax only @ 559-490-1919

Robert Kihune, Douglas Ing, Constance Lau, Diane Plotts, Nainoa Thompson,