2 13 13 05104 declaration of debtor keller in support of msj doc 80 declaration of keller in support...

7/29/2019 2 13 13 05104 Declaration of Debtor Keller in Support of MSJ Doc 80 Declaration of Keller in Support Msj 05104

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Case 10-05104-gwz Doc 80 Entered 02/13/13 10:49:46 Page 1 of 93

1 P TRICI HADFIELDNevada Bar No. 108902 BANKRUPTCY L W GROUP200 So. Virginia Street, 8th Floor3 Reno, NY 89501Tel: 775-827-96004 Fax: 888-843-7260e-mail: [email protected] Attorney for Debtor6 ROBERT KELLER

789

UNITED STATES BANKRUPTCY COURTDISTRICT OF NEV ADA

1011 In Re:1213

ROBERT KELLER,14 Debtor.1516

THE CADLE COMPANY,Plaintiff,

17 v18 ROBERT KELLER,19 Defendant.

- - - - - - - - - - - - - - - - - - - - - - ~ I

Case No: 10-52639Chapter 7AP No. 10-05104

DECL R TION OF DEBTOR ROBERTKELLER IN SUPPORT OF HISMOTION FOR SUMMARY JUDGMENTDate: ~ r t h ~ J a O r ~Time: 2: p. rn .Place: \?C;;Pt : o ~ z ; \ ~ \ - t y \ e n + - 2

300 00o-rn 8 t Y ~ r fL~ J I I V20212223

I, ROBERT KELLER, hereby declare as follows:1 I am the Debtor in the above entitled Chapter 7 bankruptcy action and the

24 defendant in this adversary proceeding. I have personal knowledge of the facts stated below25 and, if called as a witness, I would so testify.26 2. In 1987, I was one of 11 investors who founded and funded a Texas27 insurance entity known as American Guardian Insurance Underwriters Lloyds (AGIUL) to28 issue workers compensation insurance policies. AGIUL then formed American Guardian

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1 Lloyds, Inc., (AGLI) to act as the attorney in fact to manage the day-to-day operations of2 AGIUL, including collecting premiums and paying claims. I was the first President of AGLI.3 Approximately one year later, in 1988, I resigned as president, turned over all operations to the4 remaining officers and directors of AGLI and surrendered my investment in AGIUL. (For5 purposes of this Motion for Summary Judgment, AGIUL and AGLI will be referred to6 collectively as American Guardian. )7 3. I had no contact with the Texas Department ofInsurance from the time8 I left American Guardian in late1988 until July, 1994, when I was served with the Receiver's9 First Amended Petition in Action No. 92-14679 of the 53rd Judicial District Court, Travis

10 County, Texas (the court which later issued the Final Judgment forming the basis of this11 adversary proceeding.)12 4. 1990 Arizona Bankruptcy Case: In 1990, I was living in Arizona when13 I learned that United Healthcare had obtained a default judgment against me in Minnesota in a14 lawsuit that arose out of United's purchase of an Arizona PPO. I had been one ofa number of15 individuals who owned an insurance brokerage that underwrote the professional liability and16 officers and directors insurance for that PPO prior to its purchase by United. I had insufficient17 income and assets to hire an attorney to defend me in United's lawsuit or to satisfy that18 judgment. Therefore, pursuant to the advice of counsel, on April 20, 1990, I filed a Voluntary19 Petition for Chapter 7 bankruptcy in the Bankruptcy Court for the District of Arizona,20 Action No. 90-04058. (Docket No 1 of Exhibit K filed herewith,) On May 4, 1990, United21 Healthcare filed an adverse proceeding and on June 8 1990, I filed an Answer. (Docket Nos. 122 and 5 of Exhibit L herewith.) That Arizona bankruptcy was dismissed on November 25, 1992,23 at the request of United Healthcare because I did not appear for my court-ordered deposition.24 5 Plaintiff The Cadle Company's Third Claim in the present adversary25 proceeding alleges that a reason the Final Judgment obtained against me by the Texas26 Department ofInsurance on May 23, 1995, and later assigned to The Cadle Company, is27 nondischargeable is because I did not list the Texas Department ofInsurance as a creditor in28 my 1990 Arizona bankruptcy, per 11 U.S.C. 523(a)(10). I did not list it because I did not

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1 know then that it might someday become a creditor of mine. In fact, the Texas2 Department of Insurance did not even begin receivership proceedings against American3 Guardian until October 18, 1990, six months after I filed my Arizona Bankruptcy, and it4 did not serve me until June, 1994, some 18 months after y Arizona bankruptcy was5 dismissed (See Page 34, Paragraph 68, of the First Amended Petition filed by the Receiver6 for American Guardian in October, 1992, a copy of which is attached hereto as Exhibit C,7 which states: On October 18, 1990, the State of Texas commenced delinquency proceedings8 against AGULIC under TEX. INS. CODE ANN. art. 21.28 in the 53rd Judicial District Court of9 Travis County, Texas, Case No. 492,413 ( AGULIC Receivership Court ).

10 6. Texas Department ofInsurance Proceedings: As documented above,l on October 18, 1990, the State of Texas, Department ofInsurance commenced delinquency12 proceedings regarding American Guardian in the 53rd District Court of Travis County, Texas,13 Case No. 492,113 and a receiver was appointed. Two years later on October 18 1992, the14 Department filed its Original Petition in Action No. 92:-14679 naming me as one of many15 individual and corporate defendants. However, three and a half years were to pass before I was16 served with a Citation [Summons] and the First Amended Petition filed December 31, 1992,17 bringing me into Action No. 92-14679 in Travis County. (Copies of the Citation and First18 Amended Petition are attached hereto as Exhibits A and B, respectively.)19 7 When I was served with the Travis County action, my lawyer ofchoice,20 Chet Brown, was admitted to practice only in California. Therefore, it was agreed that21 Mr. Brown would act as my personal lawyer and advisor, and I would appear npropria22 persona in the Receiver's action in Travis County, Texas.232425262728

8 In or about June, 1994, I filed a general Answer to the Receiver's FirstAmended Petition denying all of the charges made against me n the Receiver's action.

9. Thereafter, Mr. Daniel C. Bitting a partner n Scott, Douglass, LutonMcConnico, L.L.P. of Austin, Texas, who represented the Receiver in the Travis Countyaction, and I dealt directly with each other and he also communicated directly with Mr. Brownduring the next few months to reach a conclusion of the matter on my behalf.

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1 10. The Receiver's case against me was never litigated. I was never deposed2 nor was I required to produce any documents or other evidence in that action. No facts3 supporting the allegations contained in the Receiver's Petition or First Amended Petition were4 ever tried or proven against me.5 11. The Receiver's case was set for trial on March 27, 1995. On March 21,6 1995, Attorney Bitting sent a letter to my counsel, Chet Brown, confirming the agreement7 worked out among us that I would sign a Judgment for $500,000 to end my involvement in the8 Receiver's case. (A copy of that letter is attached hereto as Exhibit C.)9 12. Two days later, I signed and returned to Mr. Bitting via Federal Express

1 the Final Judgment he had prepared. (Copies of my cover letter to Mr. Bitting and the Federal11 Express shipping receipt are attached hereto as Exhibit D.) My cover letter also confirmed12 the agreement with Mr. Bitting that Mr. Brown would prepare a document stating that:13 This judgment is not indicative of admission of guilt of any of the allegations, including14 but not limited to the fraud and RICO charges, but rather as a method of concluding the15 matter without additional expense on the part of all concerned. [Emphasis added.] (See16 Exhibit H attached hereto, Page 2, last sentence.)17 13. On March 28, 1995, Mr. Bitting sent a letter to Mr. Brown confirming that18 pursuant to our settlement agreement, the Receiver would apply to the Travis County District19 Court for approval to enter into the Final Judgment with me. Mr. Bitting further stated that if20 that could not be accomplished before the new April 24, 1995, trial date, he would either pass21 the setting or sever the claims against me so that I would not have to go to trial. (A copy of22 Mr. Bitting's letter is attached hereto as Exhibit E.)23 14. On April 11, 1995, I sent a letter to Mr. Bitting enclosing a Settlement24 Agreement prepared with the assistance of Mr. Brown and signed by me (the additional25 document referred to in Paragraph 10 above). That agreement expressly states:26 In complete and total settlement of all claims27 and liability to PLAINTIFF it is hereby understood and28 agreed that DEFENDANT would, on or before March 24,


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1 1995, execute a FINAL JUDGMENT in favor of PLAINTIFF2 in the amount of $500,000., AND;

4 That on March 22, 1995, it was FURTHER5 AGREED that the parties hereto would execute a6 SETTLEMENT AGREEMENT reflecting the fact that7 DEFENDANT denies any wrongdoing, fraudulent8 conduct, and any other illegal activity, and has executed9 the FINAL JUDGMENT only because it is in his best

10 interest to do so at this time [Emphasis added.]11 (Copies of that letter and Settlement Agreement are attached hereto as Exhibit F.)12 15. Mr. Bitting subsequently had that agreement retyped to add the13 Receiver's position on the agreement at the end of the penultimate paragraph as follows:14 and that, notwithstanding Defendant' s denials,15 Plaintiff maintains the allegations in its pleadings and has16 decided to accept the final judgment because it is in17 Plaintiff's best interests at this time18 Mr. Bitting then signed and returned the Settlement Agreement to Mr. Brown and I signed it19 on May 9 1995. (A copy of that Settlement Agreement is attached hereto as Exhibit G.)20 16. The Receiver's case was continued to May 23, 1995, for trial. On that21 date when the case was called, counsel for the Receiver appeared and announced that the22 Receiver and I had agreed to the entry of the Final Judgment. The Court then signed the23 Final Judgment prepared by Mr. Bitting. That Final Judgment was filed by the Court on24 May 23, 1995, at 1 57 p.m. (A copy is attached hereto as Exhibit D.)25 17. One minute later, at 1 58 p.m., the Court entered a document entitled26 Notice of Non-Suit of Certain Defendants, in which counsel for the Receiver represented to27 the Court that the Receiver had entered into agreed judgments with eight defendants,28 including myself, and that: the Receiver hereby non-suits its claims against all Defendants

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2 13 13 05104 declaration of debtor keller in support of msj doc 80 declaration of keller in support...

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