2 13 13 05104 Declaration of Debtor Keller in Support of MSJ Doc 80 Declaration of Keller in Support MSJ 05104

Case 10-05104-gwz Doc 80 Entered 02/13/13 10:49:46 Page 1 of 93
1 PATRICIA HADFIELD
Nevada Bar No. 10890
2 BANKRUPTCY LAW GROUP
200 So. Virginia Street, 8
th
Floor
3 Reno, NY 89501
Tel: 775-827-9600
4 Fax: 888-843-7260
e-mail: PatriciaH@BankruptcyLG.com
5
Attorney for Debtor
6 ROBERT KELLER
7
8
9
UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEV ADA
10
11 In Re:
12
13
ROBERT KELLER,
14 Debtor.
15
16
______________________
THE CADLE COMPANY,
Plaintiff,
17 v.
18 ROBERT KELLER,
19 Defendant.

Case No: 10-52639
Chapter 7
AP No. 10-05104
DECLARATION OF DEBTOR ROBERT
KELLER IN SUPPORT OF HIS
MOTION FOR SUMMARY JUDGMENT
Date:
Time: '2: 00 p. rn .
Place: \?C;;Pt": 2.
'300 00o-rn fL

20
21
22
23
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 below
25 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 Texas
27 insurance entity known as American Guardian Insurance Underwriters Lloyds (AGIUL) to
28 issue workers' compensation insurance policies. AGIUL then formed American Guardian
1
I
!
1 Lloyds, Inc., (AGLI) to act as the attorney in fact to manage the day-to-day operations of
2 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 the
4 remaining officers and directors of AGLI and surrendered my investment in AGIUL. (For
5 purposes of this Motion for Summary Judgment, AGIUL and AGLI will be referred to
6 collectively as "American Guardian.")
7 3. I had no contact with the Texas Department ofInsurance from the time
8 I left American Guardian in late1988 until July, 1994, when I was served with the Receiver's
9 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 this
11 adversary proceeding.)
12 4. 1990 Arizona Bankruptcy Case: In 1990, I was living in Arizona when
13 I learned that United Healthcare had obtained a default judgment against me in Minnesota in a
14 lawsuit that arose out of United's purchase of an Arizona PPO. I had been one ofa number of
15 individuals who owned an insurance brokerage that underwrote the professional liability and
16 officers and directors insurance for that PPO prior to its purchase by United. I had insufficient
17 income and assets to hire an attorney to defend me in United's lawsuit or to satisfy that
18 judgment. Therefore, pursuant to the advice of counsel, on April 20, 1990, I filed a Voluntary
19 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, United
21 Healthcare filed an adverse proceeding and on June 8, 1990, I filed an Answer. (Docket Nos. 1
22 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 adversary
25 proceeding alleges that a reason the Final Judgment obtained against me by the Texas
26 Department ofInsurance on May 23, 1995, and later assigned to The Cadle Company, is
27 nondischargeable is because I did not list the Texas Department ofInsurance as a creditor in
28 my 1990 Arizona bankruptcy, per 11 U.S.C. 523(a)(10). I did not list it because I did not
2
1 know then that it might someday become a creditor of mine. In fact, the Texas
2 Department of Insurance did not even begin receivership proceedings against American
3 Guardian until October 18, 1990, six months after I filed my Arizona Bankruptcy, and it
4 did not serve me until June, 1994, some 18 months after my Arizona bankruptcy was
5 dismissed. (See Page 34, Paragraph 68, of the First Amended Petition filed by the Receiver
6 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 proceedings
8 against AGULIC under TEX. INS. CODE ANN. art. 21.28 in the 53rd Judicial District Court of
9 Travis County, Texas, Case No. 492,413 ("AGULIC Receivership Court")."
10 6. Texas Department ofInsurance Proceedings: As documented above,
lIon October 18, 1990, the State of Texas, Department ofInsurance commenced delinquency
12 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, the
14 Department filed its Original Petition in Action No. 92:-14679 naming me as one of many
15 individual and corporate defendants. However, three and a half years were to pass before I was
16 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 First
18 Amended Petition are attached hereto as Exhibits A and B, respectively.)
19 7. When I was served with the Travis County action, my lawyer of choice,
20 Chet Brown, was admitted to practice only in California. Therefore, it was agreed that
21 Mr. Brown would act as my personal lawyer and advisor, and I would appear in propria
22 persona in the Receiver's action in Travis County, Texas.
23
24
25
26
27
28
8. In or about June, 1994, I filed a general Answer to the Receiver's First
Amended Petition denying all of the charges made against me in the Receiver's action.
9. Thereafter, Mr. Daniel C. Bitting a partner in Scott, Douglass, Luton &
McConnico, L.L.P. of Austin, Texas, who represented the Receiver in the Travis County
action, and I dealt directly with each other and he also communicated directly with Mr. Brown
during the next few months to reach a conclusion of the matter on my behalf.
3
1 10. The Receiver's case against me was never "litigated." I was never deposed
2 nor was I required to produce any documents or other evidence in that action. No facts
3 supporting the allegations contained in the Receiver's Petition or First Amended Petition were
4 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 agreement
7 worked out among us that I would sign a Judgment for $500,000 to end my involvement in the
8 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
10 the Final Judgment he had prepared. (Copies of my cover letter to Mr. Bitting and the Federal
11 Express shipping receipt are attached hereto as Exhibit D.) My cover letter also confirmed
12 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, including
14 but not limited to the fraud and RICO charges, but rather as a method of concluding the
15 matter without additional expense on the part of all concerned." [Emphasis added.] (See
16 Exhibit H attached hereto, Page 2, last sentence.)
17 13. On March 28, 1995, Mr. Bitting sent a letter to Mr. Brown confirming that
18 pursuant to our settlement agreement, the Receiver would apply to the Travis County District
19 Court for approval to enter into the Final Judgment with me. Mr. Bitting further stated that if
20 that could not be accomplished before the new April 24, 1995, trial date, he would either pass
21 the setting or sever the claims against me so that I would not have to go to trial. (A copy of
22 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 Settlement
24 Agreement prepared with the assistance of Mr. Brown and signed by me (the additional
25 document referred to in Paragraph 10 above). That agreement expressly states:
26 "In complete and total settlement of all claims
27 and liability to PLAINTIFF it is hereby understood and
28 agreed that DEFENDANT would, on or before March 24,
4
1 1995, execute a FINAL JUDGMENT in favor of PLAINTIFF
2 in the amount of $500,000., AND;
3
4 "That on March 22, 1995, it was FURTHER
5 AGREED that the parties hereto would execute a
6 SETTLEMENT AGREEMENT reflecting the fact that
7 DEFENDANT denies any wrongdoing, fraudulent
8 conduct, and any other illegal activity, and has executed
9 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 the
13 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 has
16 decided to accept the final judgment because it is in
17 Plaintiff's best interests at this time .... "
18 Mr. Bitting then signed and returned the Settlement Agreement to Mr. Brown and I signed it
19 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 that
21 date when the case was called, counsel for the Receiver appeared and announced that the
22 Receiver and I had agreed to the entry of the Final Judgment. The Court then signed the
23 Final Judgment prepared by Mr. Bitting. That Final Judgment was filed by the Court on
24 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 entitled
26 "Notice of Non-Suit of Certain Defendants," in which counsel for the Receiver represented to
27 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
5

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