1994 Permanent House Journal Printed Pages 1840-1849 - South Carolina Legislature Online

Journal of the House of Representatives
of the Second Session of the 110th General Assembly
of the State of South Carolina
being the Regular Session Beginning Tuesday, January 11, 1994

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Printed Page 1830, Feb. 10 | Printed Page 1850, Feb. 10

Printed Page 1840 . . . . . Thursday, February 10, 1994

A. Wasn't it Monday, Senator, that you had the meeting in Georgetown? It was Monday of last week.
Q. The 3rd?
A. Yes. I was asked to be in Columbia Tuesday morning at 11:00 o'clock.
Q. The 4th?
A. That's correct.
Q. And the interview took place at the Bar's office?
A. At the Bar. 30 minutes.
Q. How many interviewers participated?
A. One.
Q. One?
A. Yes, sir.
Q. From what section of the state did that --
A. Charleston.
Q. Did you have previous acquaintance --
A. Yes, I did.
Q. -- with that interviewer?
A. I did.
Q. Did you furnish a list of references?
A. I did.
Q. How many?
A. Five.
Q. Are you aware if any were contacted?
A. I honestly do not know.
Q. And you were notified of the results by fax as you just mentioned?
A. No, actually I got my results on Monday by Federal Express and then on Tuesday I asked for the results of everyone and I was notified by fax on Tuesday.
Q. And you practiced since January of '86 then?
A. That's correct. Yes, sir.
Q. Thank you.
THE CHAIRMAN: Any further questions? Senator Russell.
EXAMINATION BY SENATOR RUSSELL:
Q. The door bell rings 42 Hasell Street, Joanna is home from school, she accepts a UPS package. You leave Broad Street and drive home and you find the package on the front doorstep or in the front hallway, open it and discover it's a gift from an attorney that appears before you in your capacity as Administrative Law Judge, what do you do with that package?
A. Well, I'd return it immediately. I mean it's no -- no question and --

Printed Page 1841 . . . . . Thursday, February 10, 1994

Q. Any qualifications on that?
A. I can't imagine an attorney practicing before me sending me a gift. If it's -- what's the rule? $25 or less, you can accept it and report it, but I just -- I'd like feel like -- I'd feel uncomfortable getting it. I would just send it back.
Q. No further questions.
THE CHAIRMAN: Any other questions?
RE-EXAMINATION BY MS. MCNAMEE:
Q. Just one. Mr. Steinert, would you describe for the committee how you have gone about introducing yourself to the legislators? Have you traveled around to meet them or have you done it all here in Columbia?
A. I have mailed letters to everyone. I have been to Columbia and visited with as many members of the Richland County delegation personally as I could. I've been to a delegation meeting in Spartanburg. I've been to a delegation meeting in Greenville. I have been to a delegation meeting in Charleston and to a meeting in Georgetown that Senator McConnell chaired for the First Congressional District and I believe that that's it.

I introduced myself in all those instances and have never, never done other than ask -- than introduce myself, tell them who I am, give out my resume and I have made calls. I have made phone calls.
Q. Has anybody made any phone calls on your behalf?
A. Not that I'm aware of.
THE CHAIRMAN: Mr. Steinert, I have a question. I think we -- from what we have heard from all who have testified, everyone agrees that the chief ALJ slot is the most significant of this panel that we're electing because this person will shape the direction of the court and will make some rather serious decisions about the direction that the court will take over the next few years.

How would you convince reluctant legislators who felt as though a lawyer with seven years experience had inadequate experience to lead a court of this nature? What would you tell them to convince them that your length of legal experience was sufficient to assume a role like this?
A. I would ask that you look at my age, responsibilities that I've had in other circumstances and the quality of the legal work that I have done. I think my record quite honestly in terms of management, structure, start-up of the new things, speaks volumes. And again I believe that the variety of things that I have done in and the variety experiences that I have had would serve this court very well and I really do believe that as you do that the chief judge will shape this court. And, you know, I'm

Printed Page 1842 . . . . . Thursday, February 10, 1994

disappointed that no one asked me the question what you would do in those two weeks because --
THE CHAIRMAN: Well, why don't you answer it right now. I was getting ready to ask you that.
A. Unlike every other candidate, I don't believe we can get this court running in two weeks and I mean there is simply, physically no way that you can find space, hire staff, adopt rules and do every--- inventory what's out there, make those decisions in two weeks. It can't be done.

And I think the first thing the chief judge has got to do is to come to the Legislature and say either phase agencies in slowly or defer the start-up date, but don't let this court fall on under its own weight in two weeks and I believe that that's what will happen.

I don't believe anybody no matter how skillful can get this court up and running in two weeks.
THE CHAIRMAN: Thank you. Further questions? If not, Mr. Steinert, you can be seated again. We are going to ask you to come forward again --
A. Yes, sir.
THE CHAIRMAN: -- to respond to the witness who will testify. Our next witness is Mr. R. J. -- Ron McDaniel. Ronald McDaniel, is that correct?
MR. MCDANIEL: Yes, sir.
THE CHAIRMAN: And if you'd come forward, please. Would you raise your right hand.
RONALD MCDANIEL, having been duly sworn, testified as follows:
THE CHAIRMAN: Thank you very much. Let me -- before we start, Mr. McDaniel, I understand that you're here to testify about Mr. Steinert's candidacy for this seat as chief judge of the Administrative Law Division.

Ms. McNamee, our staff counsel, who I think you have spoken with on several occasions over the past few weeks will be questioning you in regard to your comments that you want to make.

I apologize if I interrupt at times, but I'm going to try to compartmentalize this and put it in a form that I think is significant for us as we consider his qualifications, so if I interrupt you from time to time, I may do so to try to channel the comments in the direction that I think we need to consider.
MR. MCDANIEL: That's good because I'm very uneasy.
THE CHAIRMAN: Okay. We understand that. We want you to feel at ease and we want you to be able to have your say about Mr. Steinert. Ms. McNamee.

Printed Page 1843 . . . . . Thursday, February 10, 1994

MR. MCDANIEL - EXAMINATION BY MS. MCNAMEE:
Q. Mr. McDaniel, I understand and will try to relay to the best of my ability your complaints concerning Mr. Steinert's representation of you when you were his client back in 1989.

If you just let me go forward, maybe Mr. Hodges will help me with this a little bit. As I understand it, in 1989 you were in the insurance business. In 1989, you hired Mr. Steinert of the Finkel law firm to represent you in a lawsuit. This lawsuit was against the United States Fidelity & Guaranty Corporation, which is a big insurance company. We'll call it USF&G and persons including two people named Bernice on Algie Solomons who are from Ridgeland, South Carolina?
A. Estill.
Q. Okay. This lawsuit concerned your purchase from the Solomons of their agency business in Ridgeland and Estill if I'm not mistaken. Through that agency, they sold or they did business with USF&G?
THE CHAIRMAN: Let me -- can I interrupt you at this point, was Mr. Steinert involved in the original purchase of the agency or was it -- were you represented at that time?
A. No, sir.
THE CHAIRMAN: Please proceed.
A. The only attorney was Solomons.
Q. As I understand it, your lawsuit, the Solomons' attorney was Mr. Epting of the Wise & Cole law firm in Charleston?
A. His cousin.
Q. Your main causes of action as I understand it against USF&G and the Solomons in this lawsuit dealt with misrepresentations made to you about the business, about the relationship of the business and USF&G and how they dealt with financial losses that you felt you were suffering.

You allege that it was represented to you that USF&G would continue its relationship with the agency in Ridgeland after you purchased them. And I believe your lawsuit was based on those claims of misrepresentation of USF&G and the Solomons to you; is that correct?
A. My main concern was wrongful termination. USF&G had terminated my contract with them.
Q. Okay.
A. Yes, along with the other allegations.
Q. Okay. Yes, you said that USF&G had assured you that you could write business with them after you bought the business, but then afterwards they gave you notice that you couldn't write that business. You filed this lawsuit in March of 1989; is that correct?
A. (Witness nods in the affirmative).

Printed Page 1844 . . . . . Thursday, February 10, 1994

Q. Did you have a written attorney-client relationship with Mr. Steinert?
A. Yes, ma'am.
Q. When you called the office for an attorney, whom did you ask for?
A. When I called their office?
Q. Yes, the Finkel firm.
A. Well, there was three attorneys working with him. Steve Steinert was the lead attorney.
Q. All right.
THE CHAIRMAN: Did you specifically hire Mr. Steinert or did you hire the law firm?
A. I asked for him. I didn't know anything about the Finkel Firm.
THE CHAIRMAN: Okay.
A. I went to Mr. Steinert first and he called Jerry Finkel down to review the case.
THE CHAIRMAN: All right.
Q. As I understand it, the purchase of these insurance agencies was accomplished financially by the Solomons financing it for you, is that they took a --
A. After I paid a substantial down payment.
Q. You paid a down payment and then you put up collateral, some of your personal -- or rather your real property and a note?
A. Yes, ma'am.
Q. After you filed the lawsuit against the Solomons and USF&G, an action was filed against you as I understand it, by the Wise & Cole law firm and this was an action to foreclose on the property and for payment of that note?
A. Yes, ma'am. I quit making payments to Mr. Solomons on the -- on the recommendation from Mr. Steinert.
Q. Is it fair to say all of this happened in the first half of 1989 until June of -- or so of 1989?
A. It went into '90.
Q. Excuse me?
A. It went into '90.
Q. But the -- what we've talked about so far went up that --
THE CHAIRMAN: The second lawsuit was filed in 1989 by the Solomons against you; is that correct?
A. I don't know the date of that lawsuit.
THE CHAIRMAN: But they did bring suit against you for foreclosure action on the note the money that they alleged you owed them?
A. Yes, sir.

Printed Page 1845 . . . . . Thursday, February 10, 1994

THE CHAIRMAN: Is that correct?
A. Yes.
Q. As I understand it, the next steps in the progress of this lawsuit was discovery or depositions taken of the different parties involved. As I understand it, depositions were taken of the Solomons by Mr. Steinert to find out what they knew about this case and to get their testimony down, at least that's one --
A. Mr. Steinert asked -- we went to all depositions, all of us did except for the Solomons and Mr. Steinert asked me not to come to that one.
Q. All right.
A. And also asked Gail if she would not come up because he was handling it right there in Charleston, so he done that deposition all by himself.
THE CHAIRMAN: If you'd be -- for the record Gail is?
A. His assistant.
THE CHAIRMAN: Her name is --
A. Gail Lovett.
THE CHAIRMAN: All right.
Q. As I understand it, these depositions happened up until the beginning of August of 1989?
A. I'm not -- you probably have that. I don't remember those dates in that.
Q. As I understand it after those depositions, Mr. Steinert and you discussed what should -- what you should do next. He suggested to you that you settle the lawsuit with the Solomons and sign a covenant not to sue, so that you would not sue the Solomons any longer and in return the -- they would be a witness against the bigger defendant, USF&G?
A. That's the gist of it, yes.
Q. He asked you if would please sign that covenant not to sue. I understand that you had some reluctance to do that and you hesitated to do that and that from September through the end of November of 1989 --
A. August.
Q. Okay, August to the end of November, 1989, there were discussions between you and your attorney about whether or not you would sign that covenant not to sue and I understand that you were reluctant to do that because you felt that they had still owed you money and you wanted to make sure that you got the money that you say the Solomons owed you?
A. And I wanted Algie's deposition taken first because he had already lied to me on three or four other occasions.
THE CHAIRMAN: Now, whose deposition?

Printed Page 1846 . . . . . Thursday, February 10, 1994

A. Mr. Solomons.
THE CHAIRMAN: All right, and you mentioned his first name?
A. Algie. Algernon Solomons.
THE CHAIRMAN: Okay.
A. The attorney that I bought the agency from.
Q. When did you agree to sign the covenant not to sue?
A. To this day, I haven't really agreed to sign it.
Q. Well, when did you sign it? Let me put it that way, sir.
A. I signed it on or about December the 2nd.
Q. Of 1989?
A. I believe it was '89. Stuck it in the mail to him and it got to Columbia on the 6th.
Q. Okay.
A. And on the 7th, Mr. Steinert gave his resignation.
Q. Did -- how often in that -- during that time period did you hear and talk to Mr. Steinert? And I'm talking about from August to December.
A. Numerous times. Numerous times.
Q. Numerous times?
A. He even made a visit. I guess it was under the cloak of coming to a deposition, but the deposition was of another attorney in town that the defendants were taking, USF&G.
Q. Is this that appointment that he --
A. At that --
Q. -- urged you to please --
A. That's when he told me that if I didn't sign it, I'd have to find an attorney. And I had responded to him then at that point in time, I had never ever really promised him I would sign it. I merely told him I would consider releasing them if I could get my money back from him, my $72,000 at that time it was, and take his deposition, so I would have a record of his testimony.
Q. Let me ask you right now, did you ever get your $72,000 back from him?
A. No, ma'am. He responded to me then that the covenant if I signed it would make provision for that.
Q. You did sign it? I mean you did sign the covenant in the end?
A. And he looked over at the other witness and told him if he was a friend of mine to please put enough pressure or enough sense in his head to sign it and his statement was, Algie don't have any money. USF&G has got the deep pockets and I can guarantee you six and a half million out of this, sign the agreement, so he can testify in your behalf.

Printed Page 1847 . . . . . Thursday, February 10, 1994

Q. When did you find out that Mr. Steinert was leaving the Finkel law firm and going to work for Wise & Cole?
A. Gail Lovett called me the day she got the so called covenant not to sue.
Q. So that would have been early December?
A. It was on the 6th or the 7th of December.
THE CHAIRMAN: Can I interrupt at this point? Let me ask you a question about when the -- you know that some depositions were taken in August of 1989 and my notes show that you signed the covenant on December 2nd, 1989, so there are several months in there that transpired between the deposition and your signing the covenant. Were there any discussions that took place between you and Mr. Steinert during that period of time?
A. Yes. She asked that question. Yes, sir.
THE CHAIRMAN: Okay. I'm sorry.
A. Quite a few.
THE CHAIRMAN: I missed that. Well, did you -- did -- can I you tell me when they -- did they mail the covenant to you? You mentioned you mailed it back or was it physically handed to you?
A. They mailed it to me --
THE CHAIRMAN: Okay.
A. -- out of the Columbia office and then after I had signed it and sent it back, I got another amendment to it or addendum saying that the Wise & Cole firm made an error in it in that they hadn't named all the people to release in it and they added to it, they were some shareholders. And I refused to sign that.
THE CHAIRMAN: All right.
Q. Mr. McDaniel, did you ever recover from USF&G?
A. No, ma'am. Nothing. It's still up in the -- it's still active.
Q. In what ways do you believe you were hurt or prejudiced by signing that covenant not to sue?
A. Mr. Steinert sold me out. Like I wanted to say earlier, you know, I really was impressed with his little talk here. Just like Drew Epting was very impressed.
Q. Could you just please answer my question, how do you feel you were prejudiced by signing that covenant not to sue?
A. It released one of the defendants that done me wrong and he was aware of that because he recommended to sue him to start with.
Q. Did you ever receive personal knowledge -- did you ever get notice from Mr. Steinert that he was looking for other employment with the Wise

Printed Page 1848 . . . . . Thursday, February 10, 1994

& Cole law firm -- with anybody with the Wise & Cole law firm? Did he ever tell you he was looking for other employment?
A. Tell me he was looking for -- no, ma'am, he told me he was accepting other employment on December 14th. I got a letter from him.
Q. But before that point, he did not ask you or tell you that he was looking for anything else, any other employment?
A. No, ma'am. The only indication I had was back when he asked me not to go to the deposition of Algie Solomons.
Q. And how -- what was your indication at that point?
A. He said then that he knew Drew Epting, and they were close -- their office were close, and to prevent any expenses on my part or anybody else's part, he could take the deposition himself. I wasn't needed there.
Q. How was that an indication --
A. Because I was asked to go to every other deposition that we took of any of the USF&G employees and all because they would ask me questions to ask them.
THE CHAIRMAN: The Solomons' deposition was when?
A. Sometime in August.
THE CHAIRMAN: That was the August deposition you referred to that you were not asked to attend?
A. Yes, sir.
THE CHAIRMAN: Okay.
A. I was asked not to attend.
THE COURT: Questions from the members?
SENATOR MOORE: Mr. Chairman?
THE CHAIRMAN: Yes, sir. Senator Moore.
EXAMINATION BY SENATOR MOORE:
Q. How many other depositions were taken that you were in attendance?
A. 10, 11. Now, let me correct that, that's since the word go. There has been depositions after Steinert, so with Steinert, four.
Q. Four others in that time period. And prior to -- I believe you mentioned Gail is Mr. Steinert's assistant. Prior to her notifying you or telling you that Mr. Steinert was considering a move or change, you had had no discussion with Mr. Steinert about his possible change in jobs or whatever?
A. No, sir. It was a shock to Jerry Finkel according to what --
Q. So you mailed the covenant on the 5th you said? December --
A. I signed it December -- about December the 2nd and stuck it in the mail. They got it on like the 6th.
Q. And you were notified -- your conversation with Gail --

Printed Page 1849 . . . . . Thursday, February 10, 1994

A. The very next morning, the 7th.
Q. Did you contact them or did they contact you?
A. She called me and said she had something to tell me. She acted very sincere like somebody died or something and she said no, I just needed to tell you that Steinert has informed -- Steve has informed the board this morning that he will be leaving the Finkel firm effective January 1.
Q. And you were notified by Mr. Steinert by mail on December the 14th?
A. 14th, yes, sir. And I got a letter from the Finkel firm on the 16th saying we want to continue representing you. It's an excellent case, we want to continue representing you and they was turning it over to Steve Husman, the lead attorney. And the letter went on to say that the Wise & Cole firm could not be representing Mr. Solomons. There was a conflict there. Steve had also told me that in his letter. There was a conflict, but Jerry Finkel wanted to continue to represent me.
REPRESENTATIVE BEATTY: A question --
THE CHAIRMAN: Representative Beatty.
EXAMINATION BY REPRESENTATIVE BEATTY:
Q. Did you say there was some familial relationship between Mr. Solomons and the law firm that represented him in the firm that subsequently Mr. Steinert went to work for?
A. Did I say there was a relationship?
Q. Yes, family, cousins or something?
A. I understand that Drew Epting, one of the attorneys in the Wise & Cole firm, is the cousin to Algie Solomons.
Q. Okay, now is Algie Solomons also an attorney?
A. Yes, sir.
Q. Did Mr. Epting -- Epstein or Epting or whatever -- however you pronounce his name, was he involved in the litigation at all with the Wise & Cole firm?
A. He -- yes, sir, he is the one who drew up the covenant not to sue and put the other people in it. And I -- evidently, he was Mr. Solomons' lead attorney because that's who Steve corresponded with, my attorney, most of the time. All the letters I have are addressed to Drew Epting.
Q. And at what point, do you recall this covenant not to sue becoming an issue? When did it first -- when was it first mentioned to you as a recommendation?
A. As a recommendation for me to release Mr. Solomons?
Q. Yes.

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