Bobby N. Harmon, CPCU, ARM
September 23, 2004
VIA fax only @ (808) 539-9738
Mr. Casimer Fidele
Tradewind Insurance Company, Ltd.
P.O. Box 1520
Re: Notice of Claim Against Island Insurance Company, Inc.; Roy F. Hughes, et al.
Ref: Mary Lou Woo, Demand for Arbitration - 74 166 00491 03 JAFA
Pol. No.: THB 2951831
Dear Mr Fidele:
Based upon NEW information recently disclosed during the subject arbitration proceedings, I am hereby giving this Notice of Claim against Island Insurance Company, Inc., and your appointed attorney, Roy F. Hughes Esq., for bad faith, fraud, conspiracy to commit fraud, obstruction of justice, racketeering, and other wrongful acts. For references, I refer you to my letters to Roy Hughes dated November 3, 2000; May 2, 2003; and May 28, 2003; and my letters to you dated June 3, 2003 and August 27, 2003.
In my 52-page fax transmittal to Roy Hughes on May 2, 2003, I stated:
“This is to notify you of Trustee Mary Lou Woo’s Demand for Arbitration in our case, which will require the reopening of the Island Insurance Company claim.
“The arbitration is being administered by the American Arbitration Association. I am transmitting a letter dated May 2, 2003, for the Case Manager, Justin W. Schuck, which states that a brief administrative conference call has been scheduled on May 5, 2003 at 12:00 PM, Pacific Time (which I believe would be 9:00 AM, Hawaii time.)
“I am also transmitting a copy of the Demand for Arbitration filed on March 31, 2003 by Steven Guttman, including Attachment Number 1 and all exhibits. Your prompt response will be appreciated.”
In your letter of June 2, 2003, you denied any obligation to accept the tender of defense. In my reply to you dated June 3, 2003, I stated:
“In response to your letter of June 2, 2003, with regard to the above referenced matter, I must respectfully disagree with your denial of any obligation to provide me with defense coverages under the terms of the subject policy.
“This Demand for Arbitration arises out of a dispute over the interpretation of the Settlement Agreement reached under the original claim. This is not a new claim, but is merely the continuation of the original claim to which Tradewind Insurance Company was a party. Therefore, all arguments presented in your letter as reasons for disclaiming any obligation to cover, defend or indemnify me against the allegations in this latest Demand would appear to be invalid.
“You state that at least some of the matters addressed in the Demand for Arbitration may have occurred after the policy had terminated. I do not consider this to be a valid reason for denial of reopening the claim. My “letter writing campaign” which the Trustee alleges is a breach of the Agreement, but which I strongly dispute, began prior to the termination date and has continued to the present. Several of these letters were, in fact, addressed to Roy Hughes, the attorney provided to me by Tradewind Insurance in this case. Another of the main disputed issues, for example, concerns the failure of Kamehameha Schools Bishop Estate to withhold Social Security taxes on the settlement amount, and to file the required IRS forms W-2 and 1099-R. This dates back to the settlement tax-year, and I originally brought this to the attention of Mr. Hughes in the fall of 2000. Again, this is a disputed issue arising out of the settlement which directly involved Tradewind Insurance Company.
“With this additional information, I respectfully request reconsideration of your denial for the reopening of this claim. If you have any questions, please contact me as soon as possible.”
Despite these valid arguments, Island Insurance Co. again refused to accept my tender of defense for these arbitration proceedings.
The recent information that I refer to above is contained in the Declaration of Steven Guttman in Support of Claimant’s Request for Attorneys’ Fees and Costs, dated September 2, 2004. In this lengthy document there are many entries pertaining to the previous litigations and the Settlement Agreement which involved Island Insurance Company. There are two entries in Steven Guttman’s time sheets, however, that are particularly disturbing as pertains to this case:
SG REVIEW BNH FAX LTR TO ROY HUGHES
SG TELEPHONE CALL TO ATTY. HUGHES RE ARBITRATION; LTR TO BNH RE HIS LETTER DATED 3/3/03.
Although the brief entries of Steven Guttman do not disclose what was discussed in this telephone conference with my former attorney Roy Hughes, I maintain that the clear fact that there was a non-disclosed contact with my former attorney is a serious breach of ethics regarding attorney-client privilege. This revelation caused me enough concern that I went back and reviewed earlier correspondence related to Mr. Hughes’ representation in this case.
One letter that particularly caught my attention was a letter dated September 30, 1997, from Hughes’ associate James Shin, to David A. Nakashima, Esq., copies of which were sent to me and Dexter Ego, your claims adjuster. In this letter, Mr. Shin wrote:
RE: P&C Insurance Co., Inc., et al, v. Harmon
Civil No 97-0512-02
“In response to your inquiries, enclosed for your review and files are supplemental documents filed in the above matter in relation to the two separate motions which went on for hearing on September 26, 1997 before the Honorable B. Eden Weil. Enclosed you should find the following pleadings:
(1) Plaintiffs’ Memorandum in Opposition to Defendant’s Motion to Dissolve and/or Modify the Order Granting Plaintiffs’ Motion for Preliminary Injunction;
(2) Supplemental Memorandum by Plaintiffs in Support of the Emergency Motion by Plaintiffs for Enforcement of the February 21, 1997 Motion for Preliminary Injunction Against Defendant; and
(3) Defendant Bobby N. Harmon’s Reply to Plaintiffs’ Memorandum in Opposition to Defendant’s Motion to Dissolve and/or Modify the Order Granting Plaintiffs’ Motion for Preliminary Injunction.
“On another note, you had inquired as to whether the black binder and the privilege log which was turned over to Roy during the hearing on September 26, 1997 fell under the terms of the preliminary injunction. After some inquiry, it is our office’s understanding that these documents aforementioned do fall under the terms of the preliminary injunction, and such information cannot be released to third parties.
“Roy Hughes is on the mainland this week, so any future inquiries may be directed towards Ross Taosaka or the undersigned.”
<s> JAMES SHIN
As I was reviewing this letter, several questions came to mind: Who is David Nakashima, Esq.; who was he representing; what was his role in this case; why was he requesting copies of these documents? An attorney already had been assigned to me by Island Insurance - Roy Hughes. The Island adjuster was Dexter Ego. So, where did David Nakashima fit in the picture? To attempt to find out more about Mr. Nakashima, I did a search on the Internet and learned that he is an attorney with the law firm of Alston, Hunt, Floyd & Ing. With this discovery, a great number of pieces to this complex puzzle began falling into place.
As you know, the Arbitrator that was assigned to this case by the AAA – over my repeated objections – is Judith Neustadter Fuqua. On September 29, 2003, in one of my many letters to the AAA requesting that Ms. Neustadter be disqualified from this case, I wrote:
Ms. Julie A. Schermerhorn, Supervisor, and
Mr. Justin W. Schuck, Case Manager
American Arbitration Association
6795 North Palm Avenue, 2nd Floor
Fresno, California 93704
RE: Mary Lou Woo, Trustee v. Bobby N. Harmon
Case No. 74 166 00491 03 JUSC
Dear Ms. Schermerhorn and Mr. Schuck:
This will acknowledge receipt of your letter of September 24, 2003, in which you give the Claimant until October 6, 2003 to respond to my letters dated September 20, 23 & 24. I also acknowledge your reference to Rule 11C(ii) of the National Rules for the Resolution of Employment Disputes.
This will also continue my review of Judith Neustadter’s resume as it relates to conflicts-of-interest in this case. According to her biography, Ms. Neustadter was an Associate, Paul Johnson Park & Niles (formerly Paul Johnson Alston & Hunt), 1989-92. The following items, excerpted from various sources, illustrate direct conflicting relationships of this firm and our case:
According to the website of Alston Hunt Floyd & Ing, some of their “valued clients” include the following entities that are either owned by or have direct connections to Kamehameha Schools/Bishop Estate: Kaiser Development Company, Kaiser Aluminum Properties, Inc., The Prudential Locations, Inc., Koko Marina Shopping Center, and Hawaii Kai Towne Center.
The following are some of the partners and associates in this law firm who have had professional relationships with parties named in my Racketeer Influenced and Corrupt Organizations (RICO) lawsuit and/or are connected with the current dispute:
Carol Y. Asai-Sato
According to Pacific Business News, Ms. Asai-Sato joined the law firm of Alston Hunt Floyd & Ing as a partner on February 1, 1997. Before this she spent about nine years with Rush Moore Craven Sutton Morry & Beh (the same law firm as Susan Tius, the attorney for Kamehameha Schools who is alleged, by me, to have a conflict-of-interest with Trustee Mary Lou Woo). Ms. Asai-Sato also worked for the law firm of Ashford & Wriston for four years, another prominent law firm employed by Kamehameha Schools.
According to an article in the January 9, 2003 edition of the Honolulu Advertiser:
Gensiro Kawamoto, the Hawai'i home-buying billionaire from Japan, yesterday announced he has fired his local attorney and property management firm, and will personally oversee the roughly 100 homes he still owns here.
The enigmatic real estate investor said in a letter faxed through an intermediary that he made the abrupt changes after seeing his Hawai'i rental properties last year for the first time in 10 years.
"I was shocked and upset to see the disastrous conditions of these rental houses," he wrote. "I will never allow these kinds of incidents to occur again."
Kawamoto did not elaborate on home conditions, though one person familiar with the properties said some are vacant and uninhabitable, while others have extensive damage and have been the subject of citations and complaints.
Carol Asai-Sato, Kawamoto's long-time Honolulu attorney, who selected property managers, was terminated Nov. 15, Kawamoto said.
Asai-Sato, an attorney with Alston Hunt Floyd & Ing, said Kawamoto's statements were "absolutely not true.”...
The 70-year-old billionaire, who made his fortune in real estate in Japan, embarked on a plan to buy as many as 1,000 homes here almost 15 years ago following a trip during which he noticed many houses for sale and a shortage of rentals.
Bending to public criticism, Kawamoto in 1988 cut short his plan, but still spent at least $85 million in "pocket money" buying almost 200 Hawai'i properties, including the leasehold Kaiser estate for $42.5 million, which he later gave up to landowner Kamehameha Schools....
Kawamoto said in yesterday's statement that the incidents in California and Kahalu'u were "performed by playing with laws, in unreasonable and inhuman ways, using my name.
"... I have decided to select such people with gentle and warm hearts for my management company, lawyer and all other people concerned. My investments here will be pleasant and enjoyable ones."
An article in the December 12, 2000 issue of the Honolulu Star-Bulletin reported that the last piece of Kaiser estate had been sold for $5.1 million. The guesthouse was the last of three pieces to be sold since Japanese billionaire Gensiro Kawamoto turned it over to landowner Kamehameha Schools in 1994 in a protest against its attempt to charge him a lease rental of $1 million a year for the land.
The latest sale, according to the Advertiser, brought the total since Kamehameha Schools put it on the market to $19.7 million. Kawamoto had paid about $42 million for the whole property in 1988. The luxurious oceanfront estate was originally developed by industrialist Henry J. Kaiser, who created the nearby Hawaii Kai development on land leased from Bishop Estate.
Gensiro Kawamoto also has large real estate development projects in Maui, which required approvals from Hawaii’s Land Use Commission (ref. State Land Use Commission Notice dated December 23, 2001, Docket No. A01-735; Petitioner, Gensiro Kawamoto; Location: Kihei, Maui; Request: Agricultural to Urban; Date filed: November 29, 2001). More information on this controversy can be found at: www.the-catbird-seat.net/GensiroKawamoto.htm.
One of the founding partners in the firm, Paul Alston was the attorney for Y.Y. Valley Corporation (in re Civ. No. 88-1919-06 and 88-2719-08), the developer of the controversial Royal Hawaiian Country Club which received notoriety in the decade of the 1990's for their eviction of a number of small farmers from Maunawili Valley for development of a country club. More information on this issue can be found at: www.the-catbird-seat.net/MaunawiliValley.htm.
William M. Tam
Of Counsel to Alston Hunt Floyd & Ing, William Tam lists his past positions as Hawaii State Attorney General’s Office, counsel to the State Board of Land and Natural Resources (16 years) and counsel to the State Commission on Water Resources Management (1987 until 1997, including the Waiahole Contested Case Hearing.) The Waiahole water controversy involved Kamehameha Schools/Bishop Estate lands, among others. Nathan Aipa and other attorneys for Bishop Estate have fought and lobbied long and hard on this case.
Considering Judith Neustadter’s past connections with partners and associates of Alston Hunt Floyd & Ing, I again respectfully request that the AAA deem her to have conflicts-of-interest in this case and disqualify her as Arbitrator. To prevent further unnecessary delays in these proceedings, I also request that Mr. Daniel Bent be promptly appointed as Ms. Neustadter’s neutral replacement....
< END OF QUOTATION >
In addition to the above described relationships to certain entities in this case, a quick search on the Internet also reveals more connections with Kamehameha Schools. According to Alston Hunt Floyd & Ing’s website (www.ahfi.com), their clients also include:
Hawaiian Electric Industries
The St. Paul Insurance Company
Kaiser Foundation Hospital. (For more information on Kaiser and arbitration abuse, see www.the-catbird-seat.net/ArbitrateThis.htm)
Louise K.Y. Ing’s biography shows she is a Founding Shareholder, Vice President, and Director of Alston Hunt Floyd & Ing. Her affiliations include American Savings Bank, Board of Directors, 1994-present; Island Holdings (parent of Island Insurance Co.) Board of Directors, 2002 - present; The University of Hawaii Foundation, Board of Trustees, 1995-2001 (For more on this non-profit Foundation, see www.the-catbird-seat.net/FiringDobelle.htm).
Another search on the Internet shows that Louise K.Y. Ing is also a director of HMSA, along with Michael J. Chun, Ph.D, President, Kamehameha Schools; Allan R. Landon, Chairman & CEO, Bank of Hawaii (see www.the-catbird-seat.net/Paradise.htm); Lorraine H. Akiba, Esq., Partner, McCorriston Miller Mukai MacKinnon LLP (See www.the-catbird-seat.net/Bishop.htm) ; Andrew I.T. Chang, VP, Government Relations, Hawaiian Electric Industries, Inc (HEI); Meredith J. Ching, VP, Government & Community Relations, Alexander & Baldwin (see www.the-catbird-seat.net/Developers.htm). Another Kamehameha Schools’ trustee, Constance H. Lau, is currently treasurer of HEI and President and CEO of American Savings Bank.
In one of your declination letters, you stated that one of the reasons Island was declining to defend this case was that there were no damages being requested in the Demand for Arbitration. This has now changed, as the Arbitrator has awarded damages to Trustee Mary Lou Woo in the form of legal fees and expenses in excess of $57,000, and arbitration fees in excess of $16,000. Also being awarded are yet-undetermined amounts of fines for alleged violations of the Settlement Agreement.
For more information regarding this claim, I request that you forward this letter to your professional liability insurance carrier for their response. I will provide more information and documentation regarding these claims as soon as I am contacted by their authorized claims representative.
If Island Insurance Company, and/or your professional liability insurance carrier, would prefer to join with other entities against which I have similar outstanding claims, I would be willing to discuss the possibilities of negotiating a global settlement with all parties. I have already written to other involved entities suggesting this course of action. Further information regarding open claims with these various entities can be found on the Internet at:
Please feel free to contact me if you have any questions or comments. Thank you very much for your cooperation in this matter.
Very truly yours,
Bobby N. Harmon, CPCU, ARM
cc: Mary Lou Woo, c/o Steven Guttman, Kessner Duca Umebayashi, et al.
(via fax only @ 808-529-7177)
James B. Farris, Senior Case Manager, American Arbitration Association
(via fax only @ 559-490-1919)
Dee Jay Mailer, CEO, Kamehameha Schools
(via fax only @ 808-523-6313)
President, P&C Insurance Co., Inc.
(via fax only @ 808-523-6313)
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