Bobby N. Harmon, CPCU, ARM
10951 Southgate Manor Dr. #4 Tel No. (502) 964-0694
Louisville, Kentucky 40229-1651
July 13, 2002
VIA fax @ (808) 543-8131
Mr. John Jaeger
First Insurance Company of Hawaii
P.O. Box 2866
Honolulu, Hawaii 96803
RE: Marr, Hipp, Jones & Pepper - Professional Liability Claim
Dear Mr. Jaeger:
Thank you for your phone call on Friday, July 12, 2002, acknowledging my Notice of Claim dated June 24, 2002. This claim arises out of misrepresentation of facts and other wrongful acts committed with regards to my RICO lawsuit, Civil No. CV99-00304 DAE, filed in The United States District Court for The District of Hawaii on April 27, 1999, and Bankruptcy Case No. 99-04339.
To briefly describe my claim against your Insured:
On June 14, 1999, I phoned Kenneth Hipp and left a voice message regarding the negotiation of a Settlement on behalf of Kamehameha Schools in my RICO lawsuit. On June 22nd, Mr. Hipp returned my call and we scheduled a meeting for 9:00 a.m., Wednesday, June 23rd in his office.
At this meeting with Kenneth Hipp and Christopher Yeh on June 23rd, Mr. Hipp stated that he was representing KAMEHAMEHA SCHOOLS BISHOP ESTATE and the INTERIM TRUSTEES in this matter. Mr. Hipp also made a suggestion that he could be designated by me to be the lead attorney in negotiating a Global Settlement with ALL PARTIES in the lawsuit, and suggested that this could be accomplished with a letter from me beginning with, “Dear All Defendants in Civil No. CV99-00304. . . .”
On January 27, 2000, I signed the SETTLEMENT, RELEASE AND INDEMNIFICATION AGREEMENT, which was later dated and shown as “entered into and effective this 24 day of April, 2000. I was not furnished a signed copy of this Agreement until October, 2000. On October 26, 2000, I sent a letter to my attorneys, Roy Hughes and Arnold T. Phillips, describing what appeared to me to be material representations in this case on the part of Robert Katz, Matt Tsukazaki, Kenneth Hipp and Christopher S. Yeh. On November 3, 2000, I sent a follow-up letter to the same parties. Copies of both letters are enclosed for your information.
A second major dispute in this case arose with the failure of Kamehameha Schools to issue the required IRS Forms W-2 and 1099-R resulting from the Settlement. This issue is described in greater detail in DEBTOR BOBBY N. HARMON’S OBJECTION TO FINAL REPORT AND COMPENSATION APPLICATION and EXHIBITS A-L, filed on June 18, 2002, a copy of which is enclosed for your information.
As I view this case, there are two basic approaches we can take to reach a negotiated Settlement and avoid further costly litigation. The first approach would be for all parties to voluntarily consent to reopen the Bankruptcy Case and then attempt to negotiate a revised Global Settlement. A second approach would be for us to negotiate a separate settlement of claims against only your client.
If the first approach is taken, which is the approach that I would recommend, then it would appear that direct settlement negotiations between us would be minimal, if any. The major issues in renegotiating a Global Settlement would be the amount and “characterization” of damages, and the terms of the Settlement Agreement itself. The terms for reopening the Bankruptcy Case should include Conditions that the reopening would, under no circumstances, result in less damages than under the original Settlement, and that I would retain all rights to proceed with separate lawsuits in the event all parties failed to reach a revised Global Settlement Agreement.
If your Insured elects to take the alternative approach and wishes to negotiate a separate settlement involving only his firm, then you may proceed with your investigation and request further information. In either case, I would ask that you please notify me of your Insured’s decision as soon as possible since there is a Court Hearing scheduled on the Bankruptcy Trustee’s Final Report and Compensation Application before Judge Robert J. Faris on July 24, 2002, at 9:30 a.m.
Thank you very much for your courtesy. I will be most happy to answer any questions you may have regarding this matter.
Very truly yours,
Bobby N. Harmon
encls. (by fax only)
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