Bobby N. Harmon, CPCU, ARM
10951 Southgate Manor Dr. #4 Tel & Fax No. (502) 964-0694
Louisville, Kentucky 40229-1651
September 1, 2002
VIA fax @ (406) 728-7416 & U.S. Postal Service
Robert S. Tameler
Attorney Liability Protection Society
P.O. Box 9169
Missoula, MT 59807-9169
RE: ALPS Claim No. B023134 - Harmon adv. Tamm
Dear Mr. Tameler:
Thank you for your letter dated August 27, 2002.
As a brief background to this complex case, the major asset in my estate was the proceeds from the settlement of a RICO lawsuit brought by me against the following parties:
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.
When my wife and I filed for bankruptcy, the Bankruptcy Trustee, Mary Lou Woo, assumed responsibility for settlement of this lawsuit. During the course of the settlement procedure, I believe the following improper acts occurred:
1. The following Defendants did not contribute monies to the RICO settlement or sign the SETTLEMENT AGREEMENT: HENRY H. PETERS, RICHARD S.H. WONG, LOKELANI LINDSEY, GERARD JERVIS AND OSWALD STENDER, Trustees for the Estate of Bernice Pauahi Bishop; or any representative of the law firm of TORKILDSON, KATZ, FONSECA, JAFFE, MOORE & HETHERINGTON.
2. It is my belief that KENNETH HIPP, ESQ., and CHRISTOPHER S. YEH, ESQ. misrepresented to the court in this case that they were acting as attorneys for Defendants PETERS, WONG, LINDSEY, JERVIS and STENDER when, in actuality, they did not represent these individuals, but were improperly following instructions from Bishop Estate counsel, NATHAN AIPA, who was also a Defendant in the RICO lawsuit.
3. The firm of TORKILDSON, KATZ, FONSECA, JAFFE, MOORE & HETHERINGTON, also a Defendant in my RICO lawsuit, acted as its own attorney. At the same time the firm represented Kamehameha Schools Bishop Estate and P&C Insurance Company, Inc. in concurrent lawsuits against me. This firm reportedly drafted the SETTLEMENT AGREEMENT. Therefore, it would appear that the firm had material conflicts-of-interest in this case.
4. It is my belief that the Bankruptcy Trustee, MARY LOU WOO, and her attorney, STEVEN GUTTMAN, did not reasonably or properly pursue my RICO case, and did not negotiate an adequate settlement with all parties involved. It is further believed that the Trustee did not take reasonable action to investigate my allegations of fraud, misrepresentation and conflicts of interest arising during the settlement negotiations. One of these conflicts of interest involved the fact that an attorney who often worked for Mary Lou Woo, SUSAN TIUS, Esq., served as the attorney for Kamehameha Schools in this bankruptcy case. Ms. Tius is the wife of Guido Giacometti, a former executive with Kamehameha Schools and a co-investor with the Estate in a questionable financial deal prominently detailed in my RICO lawsuit.
5. During the settlement negotiations, it was stated by Bradley Tamm that the entire settlement amount would be characterized as “wage income”. Several months after receiving our portion of the settlement, I questioned when I would be receiving my IRS Forms W-2 and 1099-R from Kamehameha Schools in order for my wife and I to file our income taxes. At that time, the Trustee’s attorney, STEVEN GUTTMAN disputed the fact that there was any agreement to characterize the settlement as wage income, and the Bankruptcy Trustee issued a Form 1099-Misc for the amount of payment we received from our bankruptcy estate.
The fraud and conflicts of interest were not discovered until October, 2000, when I finally received signed copies of the Settlement Agreement. This was nearly eight months after my wife and I had signed the Agreement. Upon detecting these apparent discrepancies in the signed Agreement, I wrote to my defense and litigation attorneys, Roy Hughes and Arnold T. Phillips, and to my bankruptcy attorney, Bradley R. Tamm, who in turn forwarded my letter to Steven Guttman.
In a letter dated December 14, 2000, Guttman responded 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.”
On December 17, 2000, Mr. Tamm sent me a copy of Guttman’s December 14th letter. In his transmittal letter Tamm stated, 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.”
On December 26, 2001, I replied 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. ...”
On January 3, 2001, Bradley Tamm responded to my letter of December 26th, stating 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... (emphasis added)
“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 (emphasis added) ... Should you decide to pursue this matter without substitute counsel, we will be forced to file a Motion to Withdraw as your attorneys. ...”
On January 3, 2001, I responded 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. . . .”
On January 11, 2001, Tamm replied, in part:
“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. ...”
On January 17, 2001, Greg Dunn and Bradley R. Tamm filed their Motion to Withdraw as Attorneys for Debtor. On January 28, 2001, I wrote Tamm asking for instructions on how to file an opposition to their Motion to Withdraw. In his response of January 29, 2001, Tamm provided the requested instructions, including a sample cover page. In his sample, Mr. Tamm erroneously gave the hearing date as February 22, 2001, which I unfortunately copied in my filing and marked on my calendar. When I went to the court on February 22nd, I was unable to locate my hearing on the court’s posted schedule. Upon seeing Mr. Tamm in the court lobby, I asked him about the schedule and he advised that the hearing had been held on the previous day, February 21st, and that Judge Lloyd King had granted his Motion to Withdraw. A copy of Mr. Tamm’s letter of January 29, 2001, and his sample page showing the incorrect hearing date is enclosed.
Given this brief history, it is my belief that Mr. Tamm was negligent in his actions and failed to properly represent the best interests of my wife and I in these bankruptcy proceedings. To cite some of Mr. Tamm’s specific actions and inactions:
1. A major factor in our decision to file for bankruptcy was to prevent foreclosure upon our home of 25 years, and we were initially led to believe by Greg Dunn and Bradley Tamm that this was achievable in our case. After we were well into the final settlement negotiations, Mr. Tamm advised me that he had made a mistake and that there was not enough money in the proposed settlement to save our home under a Chapter 7 bankruptcy. He then stated that it would be possible to save it if we switched to a Chapter 13 filing. In a draft letter dated January 2, 2000, addressed to Steve Guttman, he stated, in part: “As I feared, my ‘overnight’ financial analysis was subject to error. This is why I normally refuse to do any ‘plan’ in just one day. For the last several days, I have gone over the numbers with a fine tooth comb, and I discovered, much to my dismay, that I had neglected to set one of the program ‘switches’ in my liquidation analysis calculator, and many of the claims were not included in the analysis. This left me with a projection of more disposable funds than was actually available. . . .” Tamm proceeded to give a detailed Liquidation Analysis, then made this factual statement under the heading Debtors’ Desires as to Settlement: “Debtors’ have asked that I work out a proposal that will 1) pay off the mortgage on their home, and 2) provide sufficient funds to satisfy the taxes that will arise from the characterization of the settlement proceeds. Debtors’ are claiming an exemption under § 522(d)(11)(E) of $75,000.00, and have $9,190.00 remaining of their § 522(d)(5) exemption. This gives them a total of $84,190.00 in exempt property. Given the equities of the case, I don’t think these expressed desires are unreasonable....” After more analysis of his figures under a Chapter 7 filing, Mr. Tamm went on to state, “As shown above, even if no more creditors file a proof of claim, Debtors will be $10,444.81 short of reaching their desire to pay off the mortgage on their home. And, this number could be as high as $67,611.67 if all the creditors were to file claims. Additionally, there are no funds held back to satisfy tax claims on income. Thus, no matter how we cut it, the Debtors would not be able to retain their home in a chapter 7 liquidation. ... Conversion to Chapter 13 - an Option. The only option that I see from the foregoing analysis, is for the Debtors to convert their case to a chapter 13. A chapter 13 would enable them to keep their home, pay off the trustees, attorneys, priority and secured creditors out of the settlement fund, and pay off the general unsecured creditors through monthly payments into the plan. I have calculated that their payments could be as low as $300 per month (if no further proofs of claims are filed). ... At this point in time, unless you can come up with an alternative solution that meets more closely the Debtors desires, I am recommending to them that they convert to a chapter 13 proceeding.” Although my wife and I agreed to this recommendation as a solution that would save our home, Mr. Tamm failed to follow through and convert the bankruptcy to a Chapter 13.
2. Regarding the disputed characterization of the settlement as “wages”, I believe it was Mr. Tamm’s duty to have notified Mr. Guttman that all parties had indeed agreed that the entire settlement was to be characterized as wages. Instead, to the extreme detriment to his clients, he improperly remained silent on the issue.
3. When I originally raised the issue of possible misrepresentations, fraud and conflicts-of-interest having occurred during the settlement negotiations, Mr. Tamm did not take adequate or proper action to investigate and to act upon my allegations. Instead, he simply dismissed my inquiry by stating, “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 believe that Mr. Tamm, as my attorney, personally had the duty to detect these improprieties before the Settlement Agreement was ever entered into. Since Mr. Tamm did not perform his duties in this regard, however, I did not discover these improprieties until months after the Settlement. Even then, with all the information that I provided him, Mr. Tamm refused to investigate these issues or to take any action on our behalf.
4. Mr. Tamm and Mr. Dunn improperly breached their contract with us. In his letter dated January 3, 2001 (copy enclosed), Mr. Tamm stated: “Our engagement agreement with you (“Bankruptcy Contract”), specifically states that you have hired us ‘to provide legal services in connection with a chapter 7 bankruptcy.’ The contract further provides that our obligation to ‘render legal services terminates once the client receives their discharge.’ I note that in your case, you received your discharge on May 3, 2000, therefore we are no longer under any contractual obligation to continue reprensetation [sic]. None the less, since that time, we have continued to assist you in this matter, and have assisted you and your wife with the Department of Labor and taxing authorities. All of this was done under the original flat fee that you paid in the amount of $720 and no additional compensation has been sought. Additionally, we are willing to remain your attorneys through the administrative closing of your case (emphasis added), but we will not engage in any activities which are not directly related to the administration of your chapter 7 case.” Mr. Tamm and Mr. Dunn broke this written agreement by filing their Motion to Withdraw as Attorneys for Debtors on January 17, 2001. The fact that they had not sought additional compensation is irrelevant as they could have filed a request for additional fees, but chose not to do so.
5. Mr. Tamm erred when he provided me with a Sample form with an incorrect Court Date which resulted in the missed opportunity to argue my filed opposition to their Motion to Withdraw as Attorneys.
Regarding your request for documents which support my position factually or that support my claim for damages, in addition to the documents which I have provided herein, a large number of the relevant documents would be available through Mr. Tamm, including my Opposition to Withdrawal. There is also correspondence between myself and my other attorneys which I am declining to release at this time due to confidentiality and attorney-client privilege issues. If we do enter into any good-faith, out-of-court settlement negotiations, and this privileged information becomes an issue, I will consider releasing selected letters after consulting with these attorneys.
If you need additional information regarding my Racketeer-Influenced Corrupt Organizations lawsuit, my RICO Case Statement and other information can be found at this website:
www.the-catbird-seat.net/RICO-BH.htm
Please feel free to contact me if you have any questions or would like any specific additional documentation. As time is of the essence, your prompt evaluation and response will be greatly appreciated.
Sincerely,
Bobby N. Harmon, CPCU, ARM
encls.
cc: Roy Hughes, Esq.
Hughes & Taosaka
1001 Bishop Street, Suite 900
Honolulu, HI 96813
Arnold T. Phillips, Esq.
1188 Bishop Street, Suite 3003
Honolulu, HI 96813
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