Charles O. "Chuck" Grigson, Gerald Hooks, and Leslie Hooks v. State ( 2015 )

ACCEPTED
03-15-00436-CV
6130524
THIRD COURT OF APPEALS
AUSTIN, TEXAS
7/20/2015 10:23:30 AM
JEFFREY D. KYLE
CLERK
No. 03-15-00436-CV
In the Third Court of Appeals FILED IN
Austin, Texas 3rd COURT OF APPEALS
AUSTIN, TEXAS
7/20/2015 10:23:30 AM
CHARLES O. “CHUCK” GRIGSON, JEFFREY D. KYLE
Appellant, Clerk
v.
THE STATE OF TEXAS; THE TEXAS DEPARTMENT OF
INSURANCE; THE TEXAS COMMISSIONER OF INSURANCE;
and FARMERS GROUP, INC. ET AL.,
Appellees.
On Appeal from the 261st Judicial District Court, Travis County, Texas
Cause No. D-1-GV-02-002501
APPELLEES’ JOINT MOTION TO DISMISS APPEAL FOR LACK OF
APPELLATE JURISDICTION AND REQUEST FOR EXPEDITED
CONSIDERATION OF MOTION
Marcy Hogan Greer Joshua R. Godbey
State Bar No. 08417650 State Bar No. 24049996
mgreer@adjtlaw.com joshua.godbey@texasattorneygeneral.gov
ALEXANDER DUBOSE JEFFERSON & Ryan S. Mindell
TOWNSEND LLP State Bar No. 24089707
515 Congress Ave., Suite 2350 ryan.mindell@texasattorneygeneral.gov
Austin, Texas 78701 Jennifer S. Jackson
Telephone: 512-482-9300 State Bar No. 24060004
Telecopier: 512-482-9303 jennifer.jackson@texasattorneygeneral.gov
OFFICE OF THE ATTORNEY GENERAL
M. Scott Incerto P.O. Box 12548
State Bar No. 10388950 Austin, Texas 78711-2548
scott.incerto@nortonrosefulbright.com Telephone: (512) 475-4209
NORTON ROSE FULBRIGHT US LLP Fax: (512) 477-2348)
98 San Jacinto Blvd., Suite 1100
Austin, Texas 78701 COUNSEL FOR PLAINTIFFS-APPELLEES, THE
Telephone: 512-474-5201 STATE OF TEXAS, THE TEXAS DEPARTMENT
Telecopier: 512-536-4598 OF INSURANCE, AND THE TEXAS
COMMISSIONER OF INSURANCE
COUNSEL FOR DEFENDANTS-APPELLEES
THE FARMERS PARTIES
TO THE HONORABLE COURT OF APPEALS:
Appellees, the State of Texas, the Texas Department of Insurance and the
Texas Commissioner of Insurance (jointly, “the State”) and the Farmers Parties 1
(together with the State, the “Settling Parties”) file this Joint Motion to Dismiss
Appeal for Lack of Appellate Jurisdiction and Request for Expedited
Consideration of Motion to show the Court as follows:
PRELIMINARY STATEMENT
On July 15, 2015, Appellant Charles O. “Chuck” Grigson (“Grigson”) filed
a Notice of Interlocutory Appeal in an attempt to perfect an interlocutory appeal
from an order that is not appealable. It is clear from the face of the Order of
Preliminary Approval that it only preliminarily approves a class-action settlement
agreement and authorizes notice to be sent to the approximately 1.8 million class
members by September 4, 2015. It does not certify or refuse to certify a class or
take any other action that would permit an interlocutory appeal. To the contrary,
the Order expressly states that the settlement classes at issue had been previously
certified, in a 2003 order that was appealed and affirmed by the Texas Supreme
Court and this Court. The district court rejected Grigson’s effort to add
1
Farmers Group, Inc., Fire Underwriters Association, Farmers Underwriters Association,
Farmers Insurance Exchange, Fire Insurance Exchange, Texas Farmers Insurance Company,
Mid-Century Insurance Company of Texas, Mid-Century Insurance Company, Farmers Texas
County Mutual Insurance Company, Truck Insurance Exchange, and Truck Underwriters
Association
certification language to the Order, and Grigson’s counsel acknowledged on the
record that the Order, which the district court proceeded to enter, would “not have
a separate certification or refusal to certify.” 2 There is, in short, no basis for an
interlocutory appeal in this case.
Grigson’s baseless “appeal” is merely a pretext for additional delay of the
resolution of a case that was first settled more than a decade ago, but as to which
the absent class members have still not been provided notice or an opportunity to
be heard. Indeed, he has now filed an Emergency Motion to Stay the sending of
class notice, asking this Court to prevent the Settling Parties from providing notice
to those class members for an additional, indefinite period of time. This is the
same delay tactic that Appellant’s counsel used twelve years ago, which has had
the effect of keeping the class members from having court-ordered notice of the
settlement since 2003. Rather than permitting all class members to have equal
access to information about the settlement and an opportunity to be heard,
Appellant has thus far manipulated court processes to insulate his sole and absolute
2
This admission of the obvious is particularly striking in light of the Emergency Motion to Stay
the Sending of Class Notice that Grigson filed with this Court on July 16, 2015, in which he now
tries to take the exact opposite position. In that motion, Grigson’s first substantive sentence is
that “[t]his is an interlocutory appeal of an order entered on July 6, 2015 certifying a settlement
class action.” See Motion to Stay at 2 ¶ 1. This statement—when considered in light of (1) the
actual language of the Preliminary Approval Order, (2) the decisions affirming class certification
in this case by both the Texas Supreme Court and this Court, and (3) Grigson’s counsel’s own
words to the district court—can most charitably be described as flatly untrue.
2
control of the litigation challenging the propriety of this settlement. The frivolous
appeal filed in this Court is merely the latest effort in a decade-long endeavor to
preclude absent class members from receiving notice of the preliminarily approved
settlement.
The Settling Parties respectfully request that the Court grant expedited
consideration of this request and dismiss the appeal so that the settlement of this
case can go forward in compliance with the district court’s order.
BACKGROUND FACTS 3
Twelve years ago, the district court certified settlement classes and
preliminarily approved an unprecedented settlement between Plaintiffs-Appellees,
the State, and the Defendants-Appellees, the Farmers Parties. The monetary
consideration—valued at $117 million—overwhelmingly benefitted millions of
Farmers policyholders represented by the Attorney General. Five intervenors
objected to the 2003 Settlement Agreement and filed interlocutory appeals as to the
class certification decision. They also obtained a stay of the class notice, and as a
result, the 1.8 million class members have never received notice of the settlement.
Both the Texas Supreme Court and this Court upheld the certification
decision,4 and on remand, the parties adjusted their settlement to account for the
3
These facts are in the personal knowledge of the undersigned, and so, no affidavit in support is
needed. TEX. R. APP. P. 10.2.
3
passage of time and address some concerns raised by the district court and again
sought preliminary approval—this time of the Second Amended Settlement
Agreement and Stipulation, as supplemented (“Settlement Agreement”).
Significantly, the Settlement Agreement did not revise or alter in any way the
defined class of beneficiaries of the settlement, and the classes certified in 2003
thus remain unchanged. Compare Ex. 1 at 2-3 ¶ 2, Order of Preliminary Approval
(July 6, 2015), with Ex. 2 at 2-3 ¶ 2, Order of Preliminary Approval (June 27,
2003).
Grigson, represented by counsel for an earlier intervenor, Jan Lubin,
intervened in this case and objected to the current Settlement Agreement. 5 After a
two-day evidentiary hearing, the district court preliminarily approved the
Settlement Agreement. In its July 6, 2015, Order of Preliminary Approval
(“Preliminary Approval Order”), the district court expressly stated that it had
“previously certified” the settlement classes at issue and that its earlier certification
decision had “been affirmed in its entirety by the appellate courts of Texas.” Ex. 1
at 2-3 ¶ 2, Preliminary Approval Order (July 6, 2015).
4
See Farmers Grp., Inc. v. Lubin, 222 S.W.3d 417, 420, 427-28 (Tex. 2007); Lubin v. Farmers
Grp., Inc., No. 03-03-00374-CV, 2009 WL 3682602, at *26-32 (Tex. App.—Austin Nov. 6,
2009, no pet.).
5
Several other individuals also intervened (Michael J. Woods and Gerald and Lesly Hooks) but
they have not filed a notice of appeal to date.
4
At the conclusion of the preliminary approval hearing, Grigson objected to
the Preliminary Approval Order precisely because it did not contain any language
about re-certification of the classes; the district court refused to include any such
language. Ex. 3, 7/2/2015 Hearing Tr. 122:5-123:12, 133:20-134:18. Grigson’s
counsel subsequently acknowledged on the record that the Preliminary Approval
Order “will not have a separate certification or refusal to certify.” Id. at 134:14-16.
Grigson has nonetheless appealed, claiming that § 51.014(a)(3) provides
interlocutory appellate jurisdiction over the district court’s Preliminary Approval
Order.
ARGUMENT
As a general rule, an appeal may be taken only from a final judgment. There
are exceptions to this rule, but they must be specifically authorized by statute.
Because interlocutory orders are immediately appealable only in limited situations,
statutes authorizing interlocutory appeals are strictly construed. Rig Tools, Inc.,
No. 06-13-0001-CV, 2013 WL 177419, at *1 (Tex. App.—Texarkana Jan. 17,
2013, no pet.) (mem. op.); King-A Corp. v. Wehling, No. 13-13-00100-CV, 2013
WL 1092209, at *2 (Tex. App.—Corpus Christi Mar. 14, 2013, no pet.) (mem.
op.).
Section 51.014(a)(3) permits an interlocutory appeal from an order that
“certifies or refuses to certify a class in a suit brought under Rule 42 of the Texas
5
Rules of Civil Procedure,” TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(3), but
it is a very limited scope of appeal, in light of the “Legislature’s intent that section
51.014 be strictly construed as ‘a narrow exception to the general rule that only
final judgments and orders are appealable.’” Bally Total Fitness Corp. v. Jackson,
53 S.W.3d 352, 355 (Tex. 2001) (quoting Montgomery County v. Fuqua, 22
S.W.3d 662, 665 (Tex. App.—Beaumont 2000, pet. denied)). Indeed, the Texas
Supreme Court has expressly recognized that this appellate jurisdictional grant
does not even encompass orders refusing to decertify a class. See Bally, 53 S.W.3d
at 355, 358 (“[T]he trial court’s orders overruling Bally’s motions to decertify do
not fit within the [] test for interlocutory-appeal jurisdiction.”).
Although the Appellant has invoked Section 51.014(a)(3) of the Texas Civil
Practice and Remedies Code, that provision does not apply because the district
court did not sign an order certifying or refusing to certify a class. To the contrary,
the district court certified settlement classes in 2003. Ex. 2, Order of Preliminary
Approval (June 27, 2003). That certification decision has been affirmed in its
entirety by the Texas Supreme Court and this Court. See Farmers Grp., Inc. v.
Lubin, 222 S.W.3d 417, 420, 427-28 (Tex. 2007) (holding that “the standard class
action requirements must be applied generally to the claims asserted by Attorney
General, not the Attorney General himself,” and directing court of appeals to
address intervenors’ remaining points of error on remand); Lubin v. Farmers Grp.,
6
Inc., No. 03-03-00374-CV, 2009 WL 3682602, at *26-32 (Tex. App.—Austin
Nov. 6, 2009, no pet.) (overruling intervenors’ remaining objections to
certification). 6 And the certified classes have not been changed or modified in any
respect since affirmed on appeal.
Nothing in the district court’s Preliminary Approval Order certifies or
refuses to certify a class. The district court does not even address the settlement
classes except to the extent of acknowledging its prior certification and the
appellate history. Ex. 1 at 2-3 ¶ 2, Preliminary Approval Order (July 6, 2015).
Thus, the Preliminary Approval Order is not an order “certifying or refusing to
certify a class” from which an interlocutory appeal may be taken.7 Bally, 53
S.W.3d at 354.
6
In fact, the certification issues are now law of the case, and Grigson has offered no basis for
disturbing those findings. See Paradigm Oil, Inc. v. Retamco Operating, Inc., 372 S.W.3d 177,
182 (Tex. 2012) (Under the law-of-the-case doctrine, a decision from a prior appeal is binding in
later proceedings involving the same case.).
7
The statute additionally requires that the certification order challenged be based on Texas Rule
of Civil Procedure 42. See Tex. Civ. Prac. & Rem. Code § 51.014(a)(3) (expressly referencing
class certification decisions “under Rule 42 of the Texas Rules of Civil Procedure”). In the
proceedings on interlocutory appeal with respect to the class certification decision in 2003 in this
case, intervenor Lubin (represented by the same counsel as Grigson is here) argued that this
statute applied only to certification decisions made under Rule 42, and not to certification
decisions made under the class action provisions of the Texas Insurance Code. See Lubin, 222
S.W.3d at 420-21. The Texas Supreme Court assumed without deciding that “the Legislature
intended to allow interlocutory review of Rule 42 classes but not Insurance Code classes” but
held that even if that were the case, there was jurisdiction to review the 2003 order because the
district court relied on both Rule 42 and the Insurance Code. See id. at 421. The Supreme Court
and this Court on remand then proceeded to hold that the settlement classes were properly
certified under the Insurance Code. This chain of events exposes another flaw in Appellant’s
basis for invoking this jurisdiction. Appellant’s theory appears to be that—notwithstanding the
7
Nor can the putative interlocutory appeal be grounded in any other grant of
appellate jurisdiction. There is not a single Texas case where an appellate court
has even reviewed—much less reversed—a trial court’s ruling granting
preliminary approval of a class action settlement. As the Texas Supreme Court has
explained, a class action settlement:
does not gain legal effect until the trial court gives its final approval.
the trial court has a duty at the fairness hearing to examine the
proposed settlement thoroughly, with input from objectors, and may
approve the settlement only if the court determines that it is fair. Until
then, the proposed settlement’s terms do not affect the parties or the
proceedings, and appellate review is premature.
McAllen Med. Ctr., Inc. v. Cortez, 66 S.W.3d 227, 234 (Tex. 2001).
Furthermore, the Settling Parties respectfully submit that it is imperative that
this appeal be dismissed as soon as possible. The existence of this frivolous appeal
is the basis upon which Grigson seeks to stay the sending of class notice. And any
such delay in distributing the notice is highly prejudicial to the Settling Parties, not
to mention the absent class members who Grigson and his counsel have managed
to keep in the dark about the details of the proposed settlement for more than a
lack of any certification language in the Preliminary Approval Order—it should be deemed to
somehow have implicitly re-certified the settlement classes. But even if that were correct (and it
plainly is not), any such certification order would have been based on the Insurance Code
provisions, consistent with the holdings of the Texas Supreme Court and this Court earlier in this
case. In other words, the invented “certification” that Appellants ask the Court to infer in this
case would, if it existed, have been based on the Insurance Code class action provision, not Rule
42. And under Appellant’s counsel’s own argument before the Texas Supreme Court, such a
(hypothetical) order could not be the basis for an appeal under section 51.014(a)(3).
8
decade. The Settling Parties are actively engaged in preparing the class notice for
dissemination to meet the district court’s 60-day notice deadline. That process is
complicated, considering that the class notice must be printed and mailed to over
1.8 million class members by September 4. Any further delay in sending the
notice is unwarranted because there is no conceivable basis for an interlocutory
appeal to this Court. And the other 1.8 million class members are entitled to be
informed of the settlement so they can make their own decisions about its benefits.
Moreover, delay in sending class notice could result in further delay in conducting
the final fairness hearing, thus putting off the Settling Parties’ 12-plus-year effort
to distribute the benefits of the settlement to class members.
In sum, this appeal should be dismissed because the limited grant of
appellate jurisdiction under § 51.014(a)(3) of the Texas Civil Practice and
Remedies Code invoked by Appellant Grigson does not include an order of
preliminary approval of a class action settlement. And it should be dismissed on
an expedited basis, because further delay is prejudicial to the parties and the absent
class members.
CONCLUSION AND PRAYER
For these reasons, the Settling Parties request that the Court: (i) expedite
consideration of this request; (ii) grant the Appellees’ Joint Motion to Dismiss for
9
Lack of Appellate Jurisdiction; (iii) dismiss this appeal; and (iv) grant such other
and further relief to which the Appellees are entitled.
10
Date: July 20, 2015 Respectfully submitted,
/s/ M. Scott Incerto
Marcy Hogan Greer
State Bar No. 08417650
mgreer@adjtlaw.com
ALEXANDER DUBOSE JEFFERSON & TOWNSEND LLP
515 Congress Avenue, Suite 2350
Austin, Texas 78701-3562
Telephone: (512) 482-9300
Facsimile: (512) 482-9303
M. Scott Incerto
State Bar No. 10388950
scott.incerto@nortonrosefulbright.com
NORTON ROSE FULBRIGHT US LLP
98 San Jacinto Blvd., Suite 1100
Austin, Texas 78701
Telephone: 512-474-5201
Telecopier: 512-536-4598
Darryl W. Anderson
State Bar No. 24008694
darryl.anderason@nortonrosefulbright.com
Geraldine W. Young
State Bar No. 24084134
geraldine.young@nortonrosefulbright.com
NORTON ROSE FULBRIGHT US LLP
1301 McKinney, Suite 5100
Houston, Texas 77010 3095
Telephone: 713 651 5151
Telecopier: 713 651 5246
ATTORNEYS FOR DEFENDANTS-APPELLEES FIRE
UNDERWRITERS ASSOCIATION, FARMERS GROUP,
INC., FARMERS UNDERWRITERS ASSOCIATION,
FARMERS INSURANCE EXCHANGE, FIRE INSURANCE
EXCHANGE, TEXAS FARMERS INSURANCE COMPANY,
MID-CENTURY INSURANCE COMPANY OF TEXAS,
MID-CENTURY INSURANCE COMPANY, FARMERS
TEXAS COUNTY MUTUAL INSURANCE COMPANY,
TRUCK INSURANCE EXCHANGE, AND TRUCK
UNDERWRITERS ASSOCIATION
11
Respectfully submitted,
KEN PAXTON
Attorney General of Texas
CHARLES E. ROY
First Assistant Attorney General
JAMES E. DAVIS
Deputy Attorney General for Civil Litigation
ROBERT O’KEEFE
Division Chief
Financial Litigation, Tax, and Charitable Trusts Division
/s/ Joshua R. Godbey
JOSHUA R. GODBEY
Assistant Attorney General
LEAD ATTORNEY
State Bar No. 24049996
Telephone: (512) 475-4209
joshua.godbey@texasattorneygeneral.gov
RYAN S. MINDELL
Assistant Attorney General
State Bar No. 24089707
Telephone: (512) 936-1721
ryan.mindell@texasattorneygeneral.gov
JENNIFER S. JACKSON
Assistant Attorney General
State Bar No. 24060004
Telephone: (512) 463-9917
jennifer.jackson@texasattorneygeneral.gov
Financial Litigation, Tax, and Charitable Trusts Division
P.O. Box 12548
Austin, Texas 78711-2548
Fax: (512) 477-2348)
ATTORNEYS FOR PLAINTIFFS-APPELLEES, THE STATE
OF TEXAS, THE TEXAS DEPARTMENT OF INSURANCE,
AND THE TEXAS COMMISSIONER OF INSURANCE
12
CERTIFICATE OF SERVICE
On July 20, 2015, I electronically filed the Appellees’ Joint Motion to
Dismiss for Lack of Appellate Jurisdiction and Request for Expedited
Consideration of Motion with the Clerk of the Court using the eFile.TXCourts.gov
electronic filing system which will send notification of such filing to the following
(unless otherwise noted below).
Joe K. Longley Michael J. Woods
Philip K. Maxwell 8620 N. New Braunfels, Ste. 522
1609 Shoal Creek Blvd. # 100 San Antonio, TX 78217
Austin, TX 78701 MichaelJWoods@sbcglobal.net
Joe@JoeLongley.com
phil@philmaxwell.com Pro Se Intervenor/Objector
Counsel for Appellant Charles O.
“Chuck” Grigson
Joseph C. Blanks
P.O. Box 999
Doucette, TX 75942
blanxlex@gmail.com
Counsel for Intervenor Gerald and
Lesly Hooks
/s/ M. Scott Incerto
M. Scott Incerto
13
CERTIFICATE OF CONFERENCE
I certify that, on July 16, 2015, I conferred with Joe K. Longley, counsel for
Charles O. “Chuck” Grigson, about the merits of the foregoing motion, pursuant to
Texas Rule of Appellate Procedure 10.1(a)(5), and he stated that Grigson is
opposed to the motion.
/s/ M. Scott Incerto
M. Scott Incerto
CERTIFICATE OF COMPLIANCE WITH TEX. R. APP. P. 9.4(i)
I certify that the foregoing document contains 2,412 words and complies
with the word limit set forth in Texas Rule of Appellate Procedure 9.4(i).
/s/ M. Scott Incerto
M. Scott Incerto
14
No. 03-15-00436-CV
In the Third Court of Appeals
Austin, Texas
CHARLES O. “CHUCK” GRIGSON,
Appellant,
v.
THE STATE OF TEXAS; THE TEXAS DEPARTMENT OF
INSURANCE; THE TEXAS COMMISSIONER OF INSURANCE;
and FARMERS GROUP, INC. ET AL.,
Appellees.
On Appeal from the 261st Judicial District Court
Travis County, Texas
Cause No. GV-202501
APPENDIX TO APPELLEES’ JOINT MOTION TO DISMISS APPEAL
FOR LACK OF APPELLATE JURISDICTION AND REQUEST FOR
EXPEDITED CONSIDERATION OF MOTION
Exhibit 1 July 6, 2015, Order of Preliminary Approval (certified)
Exhibit 2 June 27, 2003, Order of Preliminary Approval (certified)
Exhibit 3 7/2/2015 Preliminary Approval Hearing Transcript (certified)
15
Exhibit 1
TO APPELLEES’ JOINT MOTION TO DISMISS
APPEAL FOR LACK OF APPELLATE JURISDICTION AND REQUEST FOR
EXPEDITED CONSIDERATION OF MOTION
DC BK15188 PG62
• Filed in The District Court
of Travis County, Texas
JUL -6 2015 ~
At q·.54 t\. M.
CAUSE NO. GV20250 1 Velva L. Price, District Clerk
THE STATE OF TEXAS, THE TEXAS § IN THE DISTRICT COURT
DEPARTMENT OF INSURANCE, and §
THE TEXAS COMMISSIONER OF §
INSURANCE, §
§
Plaintiffs, §
§
v. §
§
FARMERS GROUP, INC., FARMERS §
UN DERWRITERS ASSOCIATION, FIRE § OF TRAVIS COUNTY, TEXAS
UNDERWRITERS ASSOCIATION, §
FARMERS INSURANCE EXCHANGE, §
FIRE INSURANCE EXCHANGE, TEXAS §
FARMERS INSURANCE COMPANY, §
MID-CENTURY INSURANCE COMPANY §
OF TEXAS, MID-CENTURY INSURANCE §
COMPANY, FARMERS TEXAS COUNTY §
MUTUAL INSURANCE COMPANY, §
TRUCK INSURANCE EXCHANGE, and §
TRUCK UNDERWRITERS § 261ST JUDICIAL DISTRICT
ASSOCIATION,
Defendants.
ORDER OF PRELIMINARY APPROVAL
This matter came on for hearing on July I and 2, 2015, for preliminary approval o f the
Second Amended Settlement Agreement and Stipulation of December 18, 2002, as amended on
June 13, 2003, and as further amended on August 29, 20 13, and the Supplement to the Second
Amended Settlement Agreement and Stipulation of March 4, 2015 (collectively referred to as
" Second Amended Settlement Agreement" or "Settlement Agreement") between the State of
Texas, the Texas Department of Insurance, and the Texas Commissioner of lnsurance, on behalf
of Texas policyholders of the Defendants in the classes defined below (collectively, the "State")
and Fire Underwriters Association, Fanners Group, lnc. d/b/a Fanners Underwriters Association,
llllll llll lllll lllllllllllllllll lllllllllllllll\1111
004103926
DC BK15188 PG63
Farmers Insurance Exchange, Fire Insurance Exchange, Texas Farmers Insurance Company,
Mid-Century Insurance Company of Texas, Mid-Century Insurance Company, Farmers Texas
County Mutual Insurance Company, Truck Insurance Exchange, and Truck Underwriters
Association (collectively, the "Farmers Parties"). The State and the Farmers Parties have moved
jointly, pursuant to Texas Rule of Civil Procedure Rule 42(e) and Texas Insurance Code
§ 541.266, for an Order of Preliminary Approval ("Order") (I) preliminarily approving the
settlement of all claims asserted in the above-captioned cause ("Action"), the terms of which are
set forth in the Second Amended Settlement Agreement, which has been filed with the Clerk of
the Court, and (2) approving the proposed notice to the Classes.
The Court having read and considered the Second Amended Settlement Agreement and
attached exhibits, including the proposed Notice of Proposed Class Settlement, the proposed
Claim Form, the proposed form of Final Judgment, exhibits, pleadings and record in this case,
the evidence and other materials presented at the hearing, and argument of counsel and
applicable authorities, finds that there exists substantial and suf1icient grounds for entering this
Order.
IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED THAT:
I. The Court, for purposes of this Order, adopts all defined terms as set forth in the
Settlement Agreement.
2. The Court has previously certified, only for purposes of effectuating the
Settlement Agreement, the following Settlement Classes ("Settlement Classes"):
(i) All of the Exchanges' Texas homeowners insurance policyholders
(a) whose homeowners insurance policy incepted (including renewals)
from December 28, 200 1, through and including December 27, 2002, or
(b) who received a notice at any time after November 14, 2001, that their
HO-B policy would not be renewed ("Rate Class");
2
DC BK15188 PG64
(ii) All of the Exchanges' Texas homeowners insurance policyholders who
according to Farmers' records were eligible to receive discounts for
FPRA, age of home, or territory from November 16, 2000, through and
including December 10, 2002 ("Discount Class"); and
(iii) All Texas homeowners or automobile insurance policyholders of the
Exchanges or the Automobile Insurance Providers who according to
Farmers' records were provided or should have been provided a Credit
Usage Notice from October 1, 1999, through February 28, 2003 ("Credit
Usage Notice Class")
That certification decision has been affirmed in its entirety by the appellate courts of Texas.
Farmers Grp.. Inc. v. Lubin, 222 S.W.3d 417, 420, 427-28 (Tex. 2007) (holding that "the
standard class action requirements must be applied generally to the claims asserted by Attorney
General, not the Attorney General himself," and directing court of appeals to address
intervenors' remaining points of error on remand); Lubin v. Farmers Grp.. Inc., No. 03-03-
00374-CV, 2009 WL 3682602, at *26-32 (Tex. App.-Austin Nov. 6, 2009, no pet.) (overruling
intervenors' other objections to certification).
5. The Court further finds that at no time during the course of this litigation has there
been any collusion whatsoever between the State and the Farmers Parties with respect to
negotiating the Settlement Agreement and that the State has represented, and will continue to
represent, the interests of the Farmers' policyholders fairly and adequately and without a conflict
of interests. Accordingly, the Court preliminarily approves: (a) the Second Amended Settlement
Agreement, including the terms and the releases contained in it, as being fair, just, reasonable,
and adequate as to the Settlement Classes; and (b) the Settlement Funds described in the
Settlement Agreement, including the Prospective Rate Reduction, Retrospective Rate Reduction,
Individualized Discount Adjustment, Credit Usage Notice Fund, and the proposed additional
consideration, subject to the right of any member of the Settlement Classes to exclude himself or
herself from the Settlement Classes in accordance with the terms set forth in the Settlement
3
DC BK15188 PG65
Agreement, and to show cause, if any exists, why a Final Judgment should not be entered in
accordance with the terms of the Settlement Agreement.
6. A hearing ("Settlement Hearing") shall be held before this Court on February I,
2016, at 9:00 a.m. in the 53rd Judicial District Court Room: (a) to determine whether the
proposed Second Amended Settlement Agreement is fair, reasonable, and adequate and should
be approved, and whether the Final Judgment should be entered as to claims asserted in this
litigation, or which could have been asserted, against the Released Parties on the merits; (b) to
determine whether the Settlement Classes members' ri ght to adequate representation has been
satisfied; and (c) to reserve jurisdiction to effect and enforce the Settlement Agreement.
7. The Farmers Parties shall disseminate notice of the proposed Second Amended
Settlement Agreement and Settlement Hearing to putative members of the Settlement Classes
within sixty (60) days of the date of this Order. The Court approves Rust Consulting, an
independent third-party settlement administrator, as Farmers' agent to carry out the notice
campaign and settlement administration as approved by the Court. A copy of the Notice of
Proposed Class Settlement ("Notice"), together with a copy of the Claim Form, substantially in
the forms attached as Exhibits l and 2, shall be mailed by first-class U.S . mail, postage prepaid,
to all members of the Settlement Classes at the address of each such person as set forth in the
records of the Released Parties or as otherwise may be identified through reasonable effort, as
more thoroughly explained in the March 28, 2014, Affidavit of Kimberly K. Ness and the May
29, 2015, Declaration o f Joel K. Botzet of Rust Consulting. In addition, commencing within
seven (7) days of the date of this Order and continuing until the date of the Settlement Hearing,
the Office of the Attorney General, the Texas Department of Insurance, and the Farmers Parties
shall post on their respective Internet web-sites (www.texasattornevgeneral.gov,
4
DC BK1 5188 PG66
www.tdi.texas.gov and www.fann ers.com), as well as at www.TexasFannersSettlement.com, a
Summary Notice of Settlement. substantially in the form attached as Exhibit 3 ("Summary
Notice" ) (in both English and Spanish). The Court will permit the Parties to the Settlement
Agreement to additionally post the following items on the TexasFarmersSettlement.com website:
(a) a copy of the executed Second Amended Settlement Agreement (and exhibits) and
(b) Commonly Asked Questions and Answers that are either approved by the Parties or ordered
by the Court.
8. The Court approves the form of the class Notice, the Summary Notice, and the
Claim Form, and finds that the procedures established for mailing and distributing such notices
substantially in the manner and form set forth in paragraph 7 of this Order meet the requirements
of Rule 42 of the Texas Rules of Civil Procedure and §§ 541.261 and 541.267(b) of the Texas
Insurance Code, and due process, and constitute the best notice practicable under the
circumstances.
9. To effectuate the provision of notice provided in paragraph 7 above, the Farmers
Parties shall be responsible for the receipt of all responses from the members of the Settlement
Classes and, until further order of this Court, shall preserve all entries of appearance, Claim
Forms, requests for exclusion, and any and all other written communications from members of
the Settlement Classes or any other person in response to the Notice. The costs of notification of
the Settlement Classes as provided in this Order, including printing, mailing, and posting on the
Internet of the required notices shall be borne by the Party charged with the responsibility for
such actions in paragraph 7 this Order.
I0. Three (3) days before the date fixed by this Court for the Settlement Hearing, the
State and the Farmers Parties shall cause to be filed with the Clerk of the Court affidavits or
5
DC BK15188 PG67
declarations of the person or persons under whose general direction the mailing of the Notice and
the distribution of the Summary Notice by posting on the web-sites identified in paragraph 7
shall have been made, showing that such mailing and distribution have been made in accordance
with this Order.
11. Each member of the Settlement Classes will be bound by the proposed settlement
provided for in the Settlement Agreement, and by the Final Judgment or any other determination
by this Court affecting the Settlement Classes, unless such member shall mail, by first-class U.S.
mail, a written request for exclusion from the Settlement Classes, post-marked no later than
November 13, 20 15, addressed to State of Texas v. Farmers Settlement Administrator, Rust
Consulting, Inc.; P.O. Box 9348; Minneapolis, MN, 55440-9348. Such request for exclusion
must state: (a) the name, address and telephone number of the person seeking exclusion;
(b) whether such person has a homeowners or automobile insurance policy from the Farmers
Parties, or both; (c) the date of inception of such policy(ies) and the most recent date of renewal
for such policy(ies), if available; (d) the policy number(s), if available; and (e) that the person
making the request wishes to be excluded from the Settlement Classes. Because the Settlement
Agreement is intended to be a resolution of all Released C laims, any person requesting exclusion
must either exclude himself or herself from the Settlement Agreement in its entirety, or submit to
the Settlement Agreement in its entirety. A request for exclusion shall not be effective unless it
is made in the manner and within the time set forth in this paragraph and in the Notice. If a
member of the Settlement Classes requests to be excluded, that person will not receive any
benefit from the Retrospective Rate Reduction, the Individualized Discount Adjustment, or the
Credit Usage Notice Fund provided for in the Settlement Agreement, in the event the Settlement
Agreement is approved by the Court. Nor will such person be permitted to participate further in
6
DC BK15188 PG68
the Action. Any Class Member who does not request exclusion in the manner provided for in
this Order may, but need not, enter an appearance in this Action at his or her own cost through
counsel of his or her own choice. If a member of the Settlement Classes does not enter an
appearance, that person's interests will be represented by the State in the Action.
12. Any member of the Settlement Classes who has not requested exclusion from the
Settlement Classes may appear at the Settlement Hearing, in person or through counsel, to object
and be heard in opposition to any of the matters to be heard at the Settlement Hearing, including
(a) the requested approval of the Settlement Agreement as fair, adequate, and reasonable, and/or
(b) the requested entry of the Final Judgment. A member of the Settlement Classes cannot
request exclusiqn from the Settlement Classes AND object to the Settlement Agreement. For
any objection to be considered by the Court, the objector must mail a valid written objection, and
it must be postmarked by no later than November 13, 2015. In order to be valid, the written
objection must set forth: (a) a reference, at the top, to "State of Texas v. Farmers, Cause No.
GY202501;" (b) a statement as to whether the objector intends to appear at the Settlement
Hearing, either in person or through counsel; (c) a detailed statement of the specific basis for the
objection; (d) the name that is set forth on the Notice that was sent to the objector; (e) the
objector's current name, if different from the name set forth on the Notice; (f) the objector's
current address; (g) the objector's current telephone number and, if available, telecopier number;
(h) the objector's type of policy and policy number; and (i) the objector's signature or that of his
or her authorized representative. Three copies of the written objection must be sent, the first
addressed to the District Clerk of Travis County, Texas, I 000 Guadalupe Street, Austin, Texas
78701, the second addressed to Joshua R. Godbey, Assistant Attorney General, Financial
Litigation, Tax, and Charitable Trusts Division, Office of the Attorney General, P.O. Box 12548,
7
DC BK15188 PG69
Austin, Texas 78711-2548, and the third addressed to M. Scott lncerto, Norton Rose Fulbright
US LLP, 98 San Jacinto Boulevard, Suite 1100, Austin, Texas 78701. If an objection does not
include all of the required information or if it is not timely mailed to the three correct addresses,
then it shall be invalid, and it will not be considered by the Court. Any member of the
Settlement Classes who does not object in the manner provided shall be deemed to have waived
such objection and shall forever be foreclosed from making any objection to the fairness,
adequacy, or reasonableness of the Settlement Agreement and the proposed Final Judgment.
Any replies to such objections s hall be filed by December 15, 2015.
13. If the Court gives final approval to the Settlement Agreement and enters a final
judgment, in order to be entitled to participate in the Credit Usage Notice Fund portion of the
Settlement Agreement, a member of the Credit Usage Notice Class who has not requested
exclusion from the Settlement Classes must submit a Claim Form, substantially in the form
attached as Exhibit 2, to the Claims Administrator at the address set forth in the Notice. Such
Claim Form must be completed and postmarked on or before April I, 2016. Any member of the
Credit Usage Notice Class who does not submjt a completed Claim Form and follow the process
for certifying review of his or her individual credit report as provided for in section IV(4) of the
Settlement Agreement shall not be entitled to share in the Credit Usage Notice Fund, but
nonetheless shall be bound by the terms of the Second Amended Settlement Agreement and by
the Final Judgment and any other Order of this Court approving the Second Amended Settlement
Agreement, including all releases, and shall be barred and enjoined in this or any other action
from asserting any Released Claims.
14. Members of the Rate and Discount Classes shall automatically receive their share
of Settlement Funds within 30 days after the Effective Date of the Second Amended Settlement
8
DC BK15188 PG70
Agreement, unless they fil e a written request for exclusion from the Settlement Classes as
provided in paragraph II above.
15. The Court expressly retains the power to adjourn the Settlement Hearing, without
any further notice other than an announcement at the Settlement Hearing of adjournment, and to
approve, modify, or disapprove the Second Amended Settlement Agreement without further
notice to members of the Settlement Classes. The Court retains jurisdiction over this Action to
consider all further applications arising out of or connected with the proposed settlement.
16. The administration of the Second Amended Settlement Agreement, and the
decision of all disputed questions of law and fact with respect to the validity of any claim or right
of any person to participate in the distribution of the Settlement Fund, shall be under the
authority of the Court. The Parties to this Second Amended Settlement Agreement, their counsel
in any capacity in which they may act in implementation and fulfillment of the Settlement
Agreement. and any employees or agents of such law firms or the Parties to the Second
Amended Settlement Agreement (including, without limitation, those employees who may
furni sh services in connection with the proposed Settlement) shall not be liable for anything done
or omitted in connection with the Second Amended Settlement Agreement and its administration
except for their own willful misconduct.
17. The Parties to the Settlement Agreement are directed to carry out their obligations
under the Second Amended Settlement Agreement.
18. In the event that the Second Amended Settlement Agreement is not approved by
the Court, or the Court enters the Final Judgment and it is vacated or modified on appeal, or
otherwise altered in a material way, or the Effective Date for any other reason does not occur,
and if any Party to the Second Amended Settlement Agreement accordingly exerc ises its ri ght to
9
DC BK15188 PG71
terminate the Settlement Agreement pursuant to its terms, then the Second Amended Settlement
Agreement and any actions to be taken in connection with it shall be vacated and terminated and
shall become null and void for all purposes, and all negotiations, transactions and proceedings
connected with it (a) shall be without prejudice to the rights of any Party; (b) shall not be deemed
or construed as evidence or an admission by any Party of any fact, matter or thing; and (c) shall
not be admissible in evidence or used for any purpose in any subsequent proceeding in the
Action, or any other action or proceeding in this or any other forum, judicial, administrative, or
otherwise, except proceedings to enforce the Settlement.
SIGNED ::r;.l,b; :2t1il_ , 2015.
10
DC BK15188 PG72
Exhibit 1
DC BK15188 PG73
261 ST DISTRICT COURT OF T RAVIS COUNTY. T EXAS
If You Had Certain Home or Auto Insurance in Texas,
You May Be Eligible for Benefits from a Class Action Settlement.
A Texas court awhorized this notice. This is not a solicitation f rom a lawyer.
• You have been identified from Farmers' records as someone who had a homeowners
or a uto mobile insurance po licy in Texas between Octo ber 1999 and February 2003.
• A Settlement has been reached with certain Insurance Exchanges and Providers (" the
De fendants," see Question I for a complete list) in a class action lawsuit about the
pricing and marketing of certain homeowners and automo bile insurance policies.
Generally, the Settlement includes Texas homeowners o r automo bile insura nce
pol icy holders who had certain types o f insura nce po lic ies with the Defendants betwee n
Octobe r I, 1999 and February 28, 2003 (see Questions 5 & 6).
• T he Settleme nt provides payments to elig ible policyho lders fo r rate reductions or
discounts on past insurance premiums and free credit reports and pay ments o f $35 for
not receiving adequate notice from the De fendants a bout their use o f credit information
(see Question 9).
Your legal rights a re affected even if yo u do nothing. Please read this notice
carefully.
YOUR LEGAL RIGHTS AND 0PT10NS IN THIS SEITLEMENT
SUBMIT A CLAIM T he only way to get a pay ment under the Credit Usage Fund (see Quest ion
13).
ASK TO BE Get no benefits from the Settlement. This is the only option that a llows
EXCLUDED you to sue the Defendants over the claims reso lved by this Settlement.
OBJECT Write to the Court if you do n' t like the Settleme nt.
Go TO A HEARING Ask to speak in Court about the fai rness o f the Settlement.
Do NOTHING Receive pay ment (if eligible) as a member of the Rate C lass or Disco unt
C lass. Do not receive payment under the cred it usage fund. G ive up
rights to pursue your own lawsuit a bout the c la ims this Settlement
resolves.
• T hese rights and options-and the deadlines to exercise them-are explained in this
notice.
• T he Court in charge of this case sti ll has to decide whether to approve the Settlement.
Payments will only be made if the Court approves the Settlement a nd after any appeals
are resolved. Please be patient.
QUESTIONS? C ALL 1-888-222-0691 OR VISITWWW.T EXASF ARMERSS ETILEMENT.COM
P ARA UNA NOTIFICACION IN ESPANOL, LLAMAR 0 VISITAR NU ESTRO WEBSITE.
DC BK15188 PG74
What This Notice Contains
BASIC INFORMATION ...................................................................................................... 3
I. Why is there a notice?
2. What is this lawsuit about?
3. Why is this a class action?
4. Why is there a Settlement?
WHO IS PART OF THE SETTLEMENT? ................................... ........................................ 4
5. Who is included in the Settle ment?
6. What type of insurance policies are involved in the Settlement?
7. What is a Credit Usage Notice?
8. What if I am not sure whether I am incl uded in the Settlement?
THE SETTLEMENT BENEFITS ............................ ............................................................. 5
9. What does the Settlement provide?
I0. What can I get from the Settlement?
11. When wi ll! recei ve my payment?
12. What am I giving up to stay in the Settlement Class?
HOW TO GET BENEFITS .. ................................................................................................ 6
13. How do I get benefits?
EXCLUDING YOURSELF FROM THE SETTLEMENT...................................................... 7
14. How do I get out of the Settle ment?
15. If I do not exclude myse lf, can I sue the Defe ndants for the same thing later?
16. If l exclude myse lf, can I still get benefits from this Settlement?
17. What about other cases involving the issues in this case?
WHO REPRESENTS ME IN THIS CASE? ........................................................................ 8
18. Who re presents my interests in this case?
OBJECTING TO THE SETTLEMENT ................................................................................ 8
19. How do I tell the Court if I do not like the Settlement?
20. What is the difference between objecting and asking to be excluded?
THE SETTLEMENT HEARING .......................................................................................... 9
2 1. When and where w ill the Court decide w he ther to approve the Settlement?
22. Do I have to attend the hearing?
23. May I speak at the hearing?
GETTING MORE INFORMATION ............................................... ....................................... 9
24. How do I get more information?
QUESTIONS? CALL 1-888-222-0691 OR VISIT WWW.TEXASFARMERSS ETTLEMENT.COM
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DC BK15188 PG75
BASIC INFORMATION
lt. Why is there a notice?
A Court authorized this notice because you have a right to know about a proposed Settlement of this class
action lawsu it and about all of your options before the Court decides whether to give final approval to the
Settlement. This notice explains the lawsui t, the Settlement, and your legal rights.
Judge Scott H. Jenkins of the 261" Judicial District Court ofTravis County, Texas is overseeing this case.
This litigation is known as State of Texas v. Farmers Group, Inc., No. GV20250 1. The people who sued
are called the '·Plaintiffs." The Defendants are: Farmers Group, Inc., Farmers Underwriters Association,
Fire Underwriters Association. Farmers Insurance Exchange. Fi re Insurance Exchange. Texas Farmers
Insurance Company. Mid-Century Insurance Company of Texas, Mid-Century Insurance Company.
Farmers Texas County Mutual Insurance Company. Truck Insurance Exchange, and Truc k Underwriters
Association.
I 2. What is this lawsuit about?
The lawsuit claims that, during 1999 to 2003, the Defendants:
• Charged rates that resulted in excessive premiums for its homeowners policies written on a
form approved by the Texas Department oflnsurance ("TDI") called the HO-A and used un fair
or deceptive practices involving the determination of certain fees, d iscounts, and policy
offerings, and improper use of credit scoring and certai n risk assessments.
• Failed to provide adequate notices that information on certain policyholders' credit reports may
have impacted their premiums or policy placement and used anticompetitive practices in the
sale and marketing of homeowners and automotive insurance policies.
• Improperly stopped offeri ng a type of homeowners policy called the HO-B.
The Defendants deny these claims and maintain they did nothing wrong.
I 3. Why is this a class action?
In a class action. one or more people or entities sue on behalf of themselves and other people with simi lar
claims. All of these people together are the "class" or "class members." In this case. the representative
entities are the State of Texas, the TDI, and the Texas Commissioner of Insurance. One court resolves the
issues for all Class Members, except for those who excl ude themselves fro m the C lass.
I 4. Why is there a Settlement?
T he Court has not decided in favor of the Plainti ffs or the Defendants. Instead, both sides have agreed to a
Settlement. By agreeing to the Settlement, the Parties avoid the costs and uncertainty of a trial, and Class
Members receive the benefits described in this notice. The proposed Settlement does not mean that any
law was broken or that the Defendants did anything wrong. The Defendants deny all legal claims in this
case. The TDI. the Texas Com missio ner of Insurance. a nd the Attorney General of Texas think the
proposed Settlement is best for everyone who is affected.
QUESTIONS? CALL 1-888-222-0691 OR VISIT WWW. TEXASFARMERSSETTLEMENT.COM
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DC BK15188 PG76
WHO Is PART OF THE SETTLEMENT?
If you received this notice addressed to you in the mail (without requesting it), then you may be a member
of one or more Settlement Classes. But even if you did not receive a notice, you may be a Class Member,
as described below.
I 5. Who is included in the Settlement?
The Settlement includes three C lasses. You may be member of more than one Class. You are included if
you are or were covered under an included Texas policy issued by one of the Defendants and you meet the
following criteria:
CLASS TYPE OF POLICY CLASS DEFINITION
Policy began (or was re newed) from December 28,
Rate Class Homeowners policy 200 I through November I 0, 2002, or you received a
notice at any time after November 14, 200 I. that your
HO-B policy would not be renewed (see Question 6).
Policy where, accordi ng to Defendants' records, you are
Discount C lass Homeowners policy eligible under the Settlement to receive recalculated
discounts on your premiums from November 16, 2000
through December I0, 2002.
Policy where, according to Defendants' records, you
Credit Usage Homeowners or were provided or should have been provided a Credit
Notice C lass automobile insurance Usage Noti ce from October I, I 999 through Febmary
policy 28,2003.
I 6. What types of insurance policies are involved in the Settlement?
The Settlement includes Fanners homeowners policies written on TOt-endorsed forms described as HO-A
(including TOP- I), HO-B (including HO- Protector Plus. H0380 endorsement, TDP-2, TDP-3, OF-Builders
Risk, and HO-A with H0- 170 e ndorsement), HO-B-CON, and HO-B-T, and all endorsements approved by
TDI for use with such fo rms during the ti me periods described above. It also includes Fanners private
passenger automobile insurance policies during the same time.
I 7. What is a Credit Usage Notice?
A Cred it Usage Notice is a notice of •·adverse action" unde r the Fair Credit Report ing Act ("FCRA"). a
U.S. federal law. Adverse action could mean being denied credit, receiving substandard terms from a
lender, or, as in this case, receiving higher insurance rates or being placed with a different insurer because
of your credit information.
As part of the claim process (see Question I 3), C redit Usage Notice C lass Members will have the
opportunity to access and rev iew a copy of their credit reports.
QUESTIONS? CALL 1-888-222-0691 OR VISIT WWW.TEXASFARMERSSETTLEMENT.COM
- 4-
DC BK15188 PG77
I 8. What if I am not sure whether I am included in the Settlement?
If you are not sure whether you are included in the Settlement, you may call 1-888-222-0691 with questions
or vis it www.TexasFarmersSettlement.com. You may also write with questions to Texas Farmers
Settlement, P.O. Box 9348, Minneapolis, MN 55440-9348.
THE SETTLEMENT BENEFITS
I 9. What does the Settlement provide?
If the Settlement is approved and becomes final, it wi ll provide certain cash benefits to eligible Class
Members. There are approximately 1.8 million members of the Settlement Classes, but not all Class
Members are eligible to receive cash payments for rate reductions or discounts. The Defendants will pay a
total of$84.38 million to those members of the Rate Class and Discount Class who are eligible to receive
a payment from the Settlement. The Defendants will also provide payments of$35 to eligible Credit Usage
Notice Class Members who timely file proofs of claim and follow the process outlined in the Claim Form
and in section IV(4) of the Settlement Agreement (see Question 13).
Policyholders who renewed or received a new HO-A insurance policy from the Defendants after November
II , 2002 and before September I, 2003, have already received an additional reduction in premiums.
More details are in a document called the Settlement Agreement, which is available at
www. TexasFarmersSettlement.com.
Ito. What can I get from the Settlement?
Not every Class Member will receive a payment. The amount of your payment will depend on which Class
you are in and whether you are eligible to receive a payment under the terms of the Settlement Agreement.
Depending upon your eligibility. you may receive payments under one or more of the Settlement Classes.
Class Members may receive the following:
CLASS BENEFITS NEED TO FILE A CLAIM?
Rate Class Payments fo r rate reductions on No, payments for rate reductions
HO-A premiums (amounts will wi ll be automatic fo r all eligible
vary). Rate Class Members.
Discount Class Compensation for eligible Class No, payments to eligible
Members based on negotiated Discount Class Members w ill be
discounts (amounts wi ll vary). automatic.
C redit Usage Notice Class Free access to policyholder Yes (see Question 13).
credit report from Equifax and
$35 payment if you complete the
Claim Form process.
The Defendants also agreed to replace their Credit Usage Notice forms for Texas homeowners and
automobi le insurance policies with forms approved by the Texas Department oflnsurance (TDl) and agreed
to change certain marketing practices.
QUESTIONS? CALL 1-888-222-0691 OR VISIT WWW.TEXASFARMERSSETILEMENT.COM
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DC BK15188 PG78
I 11. Wbeo will I receive my payment?
Class Members who are entitled to payments will receive them after the Court grants final approval to the
Settl eme nt and after any appeals are reso lved (see " The Settlement Hearing" below). If there are appeals,
resolving them can take time. Please be patient.
I 12. What am I giving up to stay in the Settlement Class?
If the Settlement becomes final , you wi ll give up your right to sue the Defendants for the claims being
resolved by this Settlement unless you exclude yourself from the case. The specific claims you are g iv ing
up against the Defendants are described in Section I of the Settlement Agreement. You will be " re leasing"
the Defendants and all related people as described in Section I of the Settlement Agreement. The Settlement
Agreement is avai lable at www.TexasFarmersSettlement.com.
The Settlement Agreement describes the ·•Released Claims" with specific descriptions, so read it carefully.
If you have any questions about what this means. you can write to the Office of the Attorney General.
Consumer Protection Division, P.O. Box 12548, Austin, TX 78711-2548. You can also talk to your own
lawyer, if you have one.
Note: The release does not include individual claims or complaints about claims, payments, handling or
processing made by individual policy holde rs or the TD I. The release also does not include certain claims
made in two other class action lawsuits:
• Geter ''· Farmers Group, Inc .. No. E-0 167872-a class action re lating to homeowners' insurance
requesting a non-monetary judicial statement that Farmers acted improperly in not renewing HO-
B policies for the class members, as was certified for a class action in the 172nd District Co urt of
Jefferson County, Texas.
• State ofTexas v. Texas Farmers insurance Company. No. GV000271-a class action relating to
automobile insurance in the 2001h Judicial District Court of Travis County, Texas.
HOW To GET BENEFITS
I 13. How do I get benefits?
If you are a member of the Rate C lass or Discount C lass eligible to receive benefits under the Settlement
Agreement, you wi ll receive your payment automatically once the Settlement is finally approved. To file
a claim as a member of the Credit Usage Notice Class, you must complete and submit a Claim Form. If
you did not receive a Claim Form in the mail. you can request a Claim Form at
www.TexasFarmersSettlement. com or by calli ng 1-888-222-0691. Please read the instructions carefu lly,
fill out the Claim Form and mail it postmarked no later than Month 00, 2015 to:
Texas Farmers Settlement
P.O. Box 9348
Minneapolis, MN 55440-9348
QUESTIONS? CALL 1-888-222-0691 OR VISIT WWW.TEXASFARMERSSETTLEMENT.COM
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DC BK15188 PG79
EXCLUDING YOURSELF FROM THE SETTLEMENT
If you don ' t want benefits from this Settlement. and you want to keep the right to sue the Defendants about
the issues in th is case. then you must take steps to get out of the Settlement. This is called excludi ng
yourself-or it is sometimes referred to as ·'opting out" of the Classes.
l t4. How do I get out of the Settlement?
To exclude yourself from the Settlement Classes, you must mail a letter that says you want to be excl uded
from the Settl ement in State of Texas v. Farmers Group. Inc., No. GY20250 I. Your request must include:
• Your name. address, and tele phone number;
• Whether you have or had a homeowners or automobile insurance policy from the Defendants.
or both;
• The date the policy(ies) began a nd the most recent date of re newal (if known);
• The policy number(s); and
• Your signature.
You must mai l your exclusion request. postmarked no later than Month 00,2015, to:
Texas Farmers Settlement Exclusions
P.O. Box 9348
Minneapolis. MN 55440-9348
You cannot ask to be excluded on the phone, by emai l, or at the website.
I ts. If I do not exclude myself, can I sue the Defendants for the same thing later?
No. Unless you exclude yourself, you g ive up the right to sue the Defendants fo r the claims that this
Settlement resolves.
116. If I exclude myself, can I stiU get benefits from this Settlement?
No. You will not get the be nefits provided if you exclude yourse lf fro m the Settlement. However, if you
renewed an HO-A homeowners policy wi th the Defendants. the prospective Rate Reduction was reflected
in your premiums between November I 0, 2002 and September I, 2003 .
l17. What about other cases involving the issues in this case?
You may have received or seen other notices about other class actions about insurance policy options.
premium rates, and/or c redit usage, inc luding:
• Fogel v. Farmers Group. Inc., No. BC 300142. a nationwide class in the Superior Court for the
State of California for the County of Los Angeles (the "Fogel Action'');
• Geter v. Fanners Group, Inc. , No. E-0 167872 in the l72"d Distri ct Court in Jefferson County, Texas
(the "Gete r Action"); and
• In re: Farmers Insurance Co .. Inc. FCRA Litigation, No. C1V-03- 158-F, a nationw ide class that
includes all cases consolidated and coordinated in MDL No. 1564 in the U.S. District Court for the
Western District of Ok laho ma (otlen referred to as the "Mobbs Act ion").
QUESTIONS? CALL 1-888-222-0691 OR VISIT WWW. TEXAS FARMERSSETILEMENT.COM
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DC BK15188 PG80
If you were a Class Member in the Fogel Action, you are eligible to participate in this Settlement as well.
If you do not exclude yourself from this Settlement, you can receive benefits here and also participate in
the Geter Action by seeking a judicial statement that Farmers acted improperly in not renewing HO-B
homeowners policies to the class members. However, except as provided in the Settlement Agreement,
you will give up all other claims, including any claims for monetary damages, related to the Geter Action.
If you filed a claim in the Mobbs Action (which was also FCRA-related), you are eligible to participate in
the Rate Class and Discount Class benefits, but you are not eligible to receive a payment under the Credit
Usage Fund.
WHO REPRESENTS ME IN THIS CASE?
Ita. Who represents my interests in this case?
Your interests will be represented by the State of Texas through the Office of the Attorney General. You
will not be charged for their services. By law, the Office of the Attorney General cannot represent you
individually. If you want to be represented individually by your own lawyer, you are free to hire one at
your own expense. You may write with any questions you may have about the information in this Notice
to:
Office of the Attorney General
Consumer Protection Division
P.O. Box 12548
Austin. TX 78711-2548
OBJECTING To THE SETTLEMENT
lt9. Bow do I teD the Court if I do not Uke the Settlemeat1
If you are a member of the Settlement Classes (and do not exclude yourself), you can object to any part of
the Settlement or the Settlement as a whole. To object, you must mail a letter that includes the following:
• A reference at the top to: State ofTexas v. Farmers Group, Inc., No. GV20250l;
• Whether you intend to appear at the Settlement Hearing in person or through a lawyer (see
Question 22);
• A detailed statement of the reasons you object to the Settlement;
• Your name (and your previous name if the name on the notice you were mailed was different),
address, telephone number, and fax number (if you have one);
• Your type ofpolicy(ies) and the policy number(s): and
• Your signature (or the signature of your authorized representative).
The requirements to object to the Settlement are described in detail in the Settlement Agreement in section
VII. You must mail your objection to each of the following three addresses, and your objection must be
postmarked by Month 00, 2015:
QUESnONS? CALL 1-888·222-0691 OR VISITWWW.TEXASfARMERSSETTLEMENT.COM
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DC BK15188 PG81
COURT ATTORNEY GENERAL DEFENSE COUNSEL
District Court Clerk of Travis Joshua R. Godbey M. Scott Incerto
County, Texas Assistant Attorney General Norton Rose Fulbright US LLP
I 000 Guadalupe Street Office of the Attorney General 98 San Jacinto Blvd.. Suite
Austin, TX 7870 I P.O. Box 12548 11 00
Austin. TX 78711-2548 Austin. TX 7870 1
I 20. What is the difference between objecting and asking to be excluded?
Objecting is simply telling the Court that you don 't like something about the Settlement. You can object
only if you don ' t exclude yourself from the Classes. Excluding yo urself is telling the Court that you don ' t
want to be part of the Classes. If you exclude yourself, you have no basis to object because the case no
longer affects you.
THE SETTLEMENT HEARING
The Court will hold a hearing to decide whether to approve the Settleme nt. You may attend and you may
ask to speak (see Questions 22 & 23). but you do not have to.
I 21. When and where will the Court decide whether to approve the Settlement?
The Court will hold a Settlement Hearing at XX:OO x.m. on Month 00, 2015. at the District Court ofTravis
County. Texas, I 000 Guadalupe Street, Austin, TX 7870 I. The hearing may be moved to a different date
or time without additional noti ce, so it is a good idea to check www.TexasFarmersSettlement.com or call
1-888-222-0691. At this hearing, the Court wi ll consider whethe r the Settlement is fair, reasonable, and
adequate. If there are objections, the Court will considerthem and wi ll listen to people who have asked to
speak at the hearing. After the hearing. the Court wi ll decide whether to approve the Settlement. We do
not know how long these decisions will take.
I 22. Do I have to attend the bearing?
No. The Office of the Attorney General will answer any questions the Court may have. But you or your
own lawyer are we lcome to attend at your expense. If you send an objection, you do not have to come to
Court to talk about it. As long as you mailed your written objection on ti me, the Court w ill consider it.
You may also have your own lawyer attend. but it is not necessary.
I 23. May I speak at the bearing?
You may ask the Court for permission to speak at the Settlement Hearing.
GETTING MORE INFORMATION
124. How do I get more information?
This notice summarizes the proposed Settlement. More details are in the Settle ment Agreement. You can
get a copy o f the Settle ment Agreement at www.TexasFarm ersSenlementcom. You also may write with
questions to Texas Farmers Settlement. P.O. Box 9348, Minneapolis. MN 55440-9348 or call the to ll-free
QUESTIONS? CALL 1-888-222-0691 OR VISITWWW.TEXASFARMERSSETTLEMENT.COM
-9-
DC BK15188 PG82
number. 1-888-222-0691. You can also request a Claim Form at the website, or by calling the toll free
number.
You may also wri te w ith any questions you may have about the information in this Notice to: Office of the
Attorney General, Consumer Protection Division, P.O. Box 12548. Austin, TX 78711-2548. You can also
get a copy of the Settlement Agreement at that address or at www.tdi.state.tx.us. Please do not contact the
Court with any questions about the Settlement Agreement.
QUESTIONS? CALL 1-888-222-0691 OR VISIT WWW.TEXASFARMERSSETTLEMENT.COM
- I 0-
DC BK15188 PG83
Exhibit 2
DC BK15188 PG84
Must Be Texas Fanners Seltlement Administrator
Postmarked P.O. Box 9348
No Later Than Minneapolis, MN 55440-9348
Month 00, 2015
NAME I ADDRESS CORRECTIONS
CLAIM FORM
TEXAS FARMERS SETrLEMENT
TO:
If you are a member of the Rate Class or Discount Class, you will receive your payment automatically once the
Settlement is finally approved. To file a claim as a member of the Credit Usage Notice Class, you must complete and
submit this Claim Form providing the information requested below.
More information is available at the official Settlement websi te, www.TexasFannersSettement.com or call 1-888 -222-
0691. Please print clearly in blue or black ink. This Claim Form must be mailed and postmarked by Month 00,2015.
l. CLASS MEMBER [NFORMATION.
Name of Class Member:
---------------------------
Address:
Telephone Number: '-------------------- --------------------------
2. INSURANCE POLICY IN FORMATI01'\.
Homeowners' Policy Information (if applicable):
Name(s) of lnsured(s), if different from above: ---------------------------
Policy Number(s): - - - - - -- - - - - Starting Date of Policy(ies): ------------------- - -
Address of Insured Premises: ------------------------------------------------ - -
Name of Agent:
Automobile Policy Information (if a pplica ble):
Name(s) of lnsured(s), if different from above: - - - - - - - - - - - -- ---------
Policy Number(s): - - - - - - - - - - - Effective Date of Policy(ies): --- - - - - -- -- - - - - -
QUESTIONS? CALL TOLL-FREE 1-888-222-0691 OR VISIT WWW.TEXASFARMERSSETTLEMENT.COM
DC BK15188 PG85
Address(es) of Insured(s), if different from above: - - - - - - -- - - - - - - - - - --
Name of Agent: - -- - - - - - - - - - - -
Vehicle Identification Number (VIN) of Insured Vehicle: - - - - - -- - - -- - --
3. SIG:'-1 AND DATE YOliR CLAIJ\1 FORM.
I declare under penalty ofpeljury that:
0 I have not opted out of the Settlement Classes in this case and will not request exclusion from the Settlement
Classes;
0 I did not submit a claim form in the settlement in In re Farmers Insurance Co, Inc. FCRA Litigation. (also called
the "Mobbs Action"), No. CIV -03-1 58-F, including all cases consolidated and coordinated in MDL No. 1564, in
the U.S. District Court for the Western District of Oklahoma, which was finally approved on September 29, 201 1;
0 I have read and understand the contents of this Claim Form; and
0 I am voluntarily submitting to the jurisdiction of the 26 151 Judicial District Court of Travis County, Texas for the
purposes of this claim.
Signatllre
I
Print Name Month/Day/Year
4. MAIL Y01m CLAIM FOR.\1.
This Claim Form must be postmarked by Month 00, 2015 and mailed to: Texas Fanners Settlement Administrator, P.O.
Box 9348, Minneapolis, MN 55440-9348.
QUESTIONS? CALL TOLL-FREE 1-888-222-0691 OR VISITWWW.TEXAS FARMERSSETILEMENT.COM
2
DC BK15188 PG86
Exhibit 3
DC BK1 5188 PG87
Legal Notice
If You Had Home or Auto Insurance in Texas,
You Could Benefit From A Class Action Settlement
A Settlement has been reached with certain Insurance additional sum to be paid to Rate Class and Discount
Exchanges and Providers ("the Defendants") in a Class Members with eligible c laims proportionally.
class action lawsuit about the pricing and marketing The Defendants will also provide payments of $35
of homeowners and automobi le insurance policies. to eligible Credit Usage Notice Class Members for
A complete list of Defendants is available at not receiving adequate notice about the Defendants '
www.TexasFarmersSettlement.com. The Settlement use of their credit in formation. Policy holders who
provides payments to eli gible policyholders. renewed or received a new HO-A insurance policy
from the Defendants after November I I, 2002 and
What Is This About? before Septe mber I, 2003. have already received an
The State of Tex as claims that. during 1999 to additional reduction in premiums.
2003. the Defend ants charged rates that resulted in
excessive premiums for its HO-A homeowners policy How to Get Benefits.
and used unfair or deceptive practices invol ving the Payments to the Rate and Discount Classes will be
determination o f certain fees. discounts, and policy made automatically. You must s ubmit a Claim Form
o fferings, and improper use o f credit scoring and by Month 00, 2015 to get benefits as a Credit Usage
certain risk assessments. Notice Class Member. If you did not receive one
in the mail. you may request a Claim Form at the
The lawsuit also claims that. during the same time website or by calling 1-888-222-0691.
fram e, the Defendants: I) failed to provide adequate
notices that in formation on certain policyholders' Your other Rights.
credit reports may have impacted their premiums or If you don' t want a payment from this Settlement and
policy placement. 2) used anticompetitive practices in you don't want to be legally bound by it. you need
the sale and marketing of homeowners and automotive to exclude yourself in writing by Month 00, 2015 or
insurance polic ies, and 3) improperly s topped offering you won' t be able to sue the De fendants about the
HO-B homeowners policies. The Defe ndants deny claims in this case. If you ask to be excluded, you
these claims and maintain they did nothing wrong. can't get a payment from the Settlement. If you stay
in the Settlement. you may object to it by Month 00,
Who's Included? 2015, but will be bound by the terms of the Settlement
Generally. the Settlement includes Texas homeowners if it is approved by the Court.
or automobile insurance policyholders who had
certain types of insurance policies with the Defendants You may have recei ved or seen other notices about
between October I . 1999 and February 28. 2003. The other class actions about insurance policy options.
Settlement includes three Classes: Rate, Discount, and premium rates. and/or credit report usage. The
C redit Usage Notice. You may be member of more website has more information about how these cases
than one Class. More information about incl uded affec t your eligibility to partic ipate in this Settlement.
policies is available at the website.
The Court will hold a hearing on Month 00, 2015
What Can You Get? to consider whether to approve the Settlement. You
The Defendants will pay rate reductions or discounts can appear at the hearing, but you don't have to. You
to the Rate C lass and Discount Cla~s Members can hire your own attorney, at your own expense, to
(calcu lated on a case-by-case bas is) and provide an appear or speak for you at the hearing.
For complete information: Visit: www.TexasfarmersSettlement.com
Call: 1-888-222-0691 ~
~----------------------------------------------``o/
``
It(``)
\t'-'~nro . .')~
..
Exhibit 2
TO APPELLEES’ JOINT MOTION TO DISMISS
APPEAL FOR LACK OF APPELLATE JURISDICTION AND REQUEST FOR
EXPEDITED CONSIDERATION OF MOTION
- - -· -- - -
...----~opv
~ ·i.
CAUSE NO. GV202501
THE STATE OF TEXAS, TifE TEXAS § IN THE DISTRICT COURT
DEPARTMENT OF INSURANCE, and §
THE TEXAS COMMISSIONER OF §
INSURANCE, §
§
Plaintiffs, §
§
v. §
§
FARMERS GROUP, INC., FARMERS §
UNDERWRITERS ASSOCIATION, FIRE § OF TRAVIS COUNTY, TEXAS
UNDERWRITERS ASSOCIATION, §
FARMERS INSURANCE EXCHANGE, §
FIRE INSURANCE EXCHANGE, TEXAS §
FARMERS INSURANCE COMPANY, §
MID-CENTURY INSURANCE COMPANY §
OF TEXAS, MID-CENTURY INSURANCE §
COMPANY, FARMERS TEXAS COUNTY §
MUTUALINSURANCECOMPANY, §
TRUCK INSURANCE EXCHANGE, and §
TRUCK UNDERWRITERS § 261ST JUDICIAL DISTRICT
ASSOCIATION,
Defendants.
ORDER OF PRELIMlNARY APPROVAL
This matter came on for hearing May 19-22, 2003, for preliminary approval of the
Settlement Agreement and Stipulation of December 18, 2002, as amended on June 13, 2003,
("Settlement Agreement") between the State of Texas, the Texas Department of Insurance, and
the Texas Commissioner of Insurance, on behalf of Texas policyholders of the Defendants in the
classes defmed below (collectively, the "State") and Fire Underwriters Association, Farmers
Group, Inc. d/b/a Fanners Underwriters Association, Fanners Insurance Exchange, Fire
Insurance Exchange, Texas Farmers Insurance CompafTYJ ~i.~hlf,V ~surance Company of
Texas, Mid-Century Insurance Company, Fanners ``ty``~ Insurance Company,
4
3049\649.1
Truck Insurance Exchange, and Truck Underwriters Association (collectively, the "Farmers
Parties"). The State and the Farmers Parties have moved jointly, pursuant to Texas Rule of Civil
Procedure Rule 42(e) and Texas Insurance Code article 21.21 § l8(g), for an Order of
Preliminary Approval {the "Order") (1) preliminarily approving the settlement of all claims
asserted in the above-captioned cause (the "Action"), the terms of which are set forth in the
Settlement Agreement which has been filed with the Clerk of the Court, and (2) approving the
proposed notice to the Classes.
The Court having read and considered the Settlement Agreement and attached exhibits,
including the proposed Notice of Proposed Class Settlement, the proposed Claim Form, the
proposed form of Final Judgment, exhibits, pleadings and record in this case, the evidence and
other materials presented at the hearing, and argument of counsel and applicable authorities,
finds that there exists substantial and sufficient grounds for entering this Order.
IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED TIIAT:
1. The Court, for purposes of this Order, adopts all defined terms as set forth in the
Settlement Agreement.
2. Pursuant to Rule 42 and Texas Insurance Code article 21.21 §§ 17 & 18, this
Court hereby certifies, only for purposes of effectuating the Settlement Agreem·ent, the following
Settlement Classes (the "Settlement Classes"):
(i) All of the Exchanges' Texas homeowners insurance policyholders (a)
whose homeowners insurance policy incepted (including renewals) from
December 28, 2001 , through and including December 27, 2002, or (b)
who received a notice at any time after November 14, 2001, that their HO-
B policy would not be renewed (the "Rate Class");
(ii) All of the Exchanges' Texas homeowners insurance policyholders who
according to Fanners' records were eligible to receive discounts for
FPRA, age of home, or territory from November 16, 2000, through and
including December 10, 2002 (the "Discount Class"); and
30491649.1 -2-
----------- - · ~·~ -----· ··-
(iii) All Texas homeowners or automobile insurance policyholders of the
Exchanges or the Automobile Insurance Providers who according to
Fanners' records were provided or should have been provided a Credit
Usage Notice from October I, 1999, through February 28, 2003 (the
"Credit Usage Notice Class").
3. The Court hereby acknowledges and confirms the State, through the Office of the
Attorney General, to fulfill the role of the Settlement Classes' Counsel. The Court finds that the
Attorney General's office is authorized to bring this class action by the parens patriae authority
granted in section 17 of article 21.21 of the Insurance Code and Rule 42 of the Texas Rules of
Civil Procedure.
4. Alternatively, if the requirements of Rule 42(a) & (b) and article 21.21 § 18(a) &
(b) must be satisfied, then, with respect to the Settlement Classes, this Court finds and concludes
that each of those requirements has been met, specifically: (a) each of the Settlement Classes is
so numerous that joinder of all members is impracticable; (b) there are questions of law or fact
common to the Settlement Classes which predominate over any individual questions; (c) the
claims or defenses brought by the State on behalf of Farmers' policyholders are typical of the
claims or defenses of the Settlement Classes and the State is authorized to bring claims on behalf
of the Settlement Classes; (d) in negotiating and entering into the Settlement Agreement, the
State has fairly and adequately represented and protected the interests of the Settlement Classes;
(e) the questions of law or fact common to the Settlement Classes predominate over any
questions affecting only individual members; and (f) certifying this Action as a class action is
superior to other available methods for the fair and efficient adjudication of the controversy.
5. The Court further finds that there has been no collusion between the State and the
Fanners Parties with respect to negotiating the Settlement Agreement and that the State has
represented, and will continue to represent, the interests of the Fanners' policyholders fairly and
adequately and without a conflict of interests. Accordingly, the Court preliminarily approves:
30491649.1 -3-
(a) the Settlement Agreement, including the terms and the releases set forth therein, as being fair,
just, reasonable, and adequate as to each of the parties thereto, and (b) the Settlement Funds
described therein, including the Prospective Rate Reduction, Retrospective Rate Reduction,
Individualized Discount Adjustment, and Credit Usage Notice Adjustment Fund, and the
proposed additional consideration, subject to the right of any member of the Settlement Classes
to exclude himself or herself from the Settlement Classes in accordance with the terms set forth
in the Settlement Agreement, and to show cause, if any exists, why a Final Judgment should not
be entered in accordance with the terms of the Settlement Agreement.
6. A hearing (the "Settlement Hearing") shall be held before this Court on
September 29, 2003, at 9:00 a.m. in the 53rd Judicial District Court Room: (a) to determine
whether the proposed Settlement Agreement is fair, reasonable, and adequate and should be
approved, and whether the Final Judgment should be entered as to claims asserted therein, or
which could have been asserted, against the Released Parties on the merits; (b) to determine
whether the Settlement Classes members' right to adequate representation has been saHsfied; and
(c) to reserve jmjsdiction to effect and enforce the Settlement Agreement.
7. The Fanners Parties shall disseminate notice of the proposed Settlement
Agreement and Settlement Hearing to putative members of the Settlement Classes within thirty
(30) days of the date of this Order. A copy of the Notice of Proposed Class Settlement (the
"Notice"), together with a copy of the Claim Form, substantially in the form attached hereto as
Exhibit A, shall be mailed by first-class U.S. mail, postage prepaid, to all members of the
Settlement Classes at the address of each such person as set forth in the records of the Released
Parties or as otherwise may be identified through reasonable effort. In addition, commencing
within seven (7) days of the date of this Order and continuing until the date of the Settlement
30491649.1
-4-
Hearing, the Office of the Attorney General, the Texas Department of Insurance, and the
Fanners Parties shall post on their respective Internet web-sites (www.oag.state.tx.us.
www.tdi.state.tx.us and www.fanners.com) the Notice and a Summary Notice of Settlement,
substantially in the form attached hereto as Exhibit B ("Summary Notice").
8. The Court approves the fonn of Notice, the Summary Notice, and the Claim
Fonn, and finds that the procedures established for mailing and distributing such notices
substantially in the manner and form set forth in paragraph 7 of this Order meet the requirements
of Rule 42 of the Texas Rules of Civil Procedure, article 21.21 § 18 of the Texas Insurance
Code, and due process, and constitute the best notice practicable under the circumstances.
9. To effectuate the provision of notice provided in paragraph 7 hereof, the Farmers
Parties shall be responsible for the receipt of all responses from the members of the Settlement
Classes and, until further order of this Court, shall preserve all entries of appearance, Claim
Forms, requests for exclusion, and any and all other written communications from members of
the Settlement Classes or any other person in response to the Notice. The costs of notification of
the Settlement Classes as provided herein, including printing, mailing, and posting on the
Internet of all required notices, shall be borne by the party charged with the responsibility for
such actions in paragraph 7 of this Order.
10. Three (3) days before the date fixed by this Court for the Settlement Hearing, the
State and the Farmers Parties shall cause to be filed with the Clerk of the Court affidavits or
declarations of the person or persons under whose general direction the mailing of the Notice and
the distribution of the Summary Notice by posting .on the web-sites identified in paragraph 7
shall have been made, showing that such mamng and publication have been made in accordance
with this Order.
J0491 649. 1
-5-
11. Each member of the Settlement Classes will be bound by the proposed settlement
provided for in the Settlement Agreement, and by the Final Judgment or any other detennination
by this Court affecting the Settlement Classes, unless such member shall mail, by first-class U.S.
mail, a written request for exclusion from the Settlement Classes, post-marked no later than
August 29. 2003, addressed to "Exclusion Requests", c/o Rust Consulting, Inc.; P.O. Box 9348;
Minneapolis, MN 55440-9348 . Such request for exclusion must state (a) the name, address and
telephone number of the person seeking exclusion; (b) whether such person has a homeowners or
automobile insurance policy from the Farmers Parties, or both; (c) the date of inception of such
policy(ies) and the most recent date of renewal for such policy(ies), if available; (d) the policy
number(s), if available; and (e) that the person malcing the request wishes to be excluded from
the Settlement Classes. Because the Settlement Agreement is intended to be a resolution of all
Released Claims, any person requesting exclusion must either exclude himself or herself from
the Settlement Agreement in its entirety, or submit to the Settlement Agreement in its entirety. A
request for exclusion shall not be effective unless it is made in the manner and within the time set
forth in this paragraph and in the Notice. If a member of the Settlement Classes requests to be
excluded, that person will not receive any benefit from the Retrospective Rate Reductio~ the
Individualized Discount Adjustment, or the Credit Usage Notice Adjustment Fund provided for
in the Settlement Agreement, in the event the Settlement Agreement is approved by the Court,
nor will such person be permitted to participate further in the Action. Any Class Member who
does not request exclusion in the manner provided for herein may, but need not, enter an
appearance in this Action at his or her own cost through counsel of his or her own choice. If a
member of the Settlement Classes does not enter an appearance, that person's interests will be
represented by the State in the Action.
30491649.1 -6-
12. Any member of the Settlement Classes who has not requested exclusion from the
Settlement Classes may appear at the Settlement Hearing, in person or through counsel, to object
and be heard in opposition to any of the matters to be heard at the Settlement Hearing, including
(a) the requested approval of the Settlement Agreement as fair, adequate, and reasonable, and/or
(b) the requested entry of the Final Judgment. A member of the Settlement Classes cannot
request exclusion from the Settlement Classes AND object to the Settlement Agreement. For
any objection to be considered by the Court, the objector must mail a valid written objection, and
it must be postmarked by no later than August 29, 2003. In order to be valid, the written
objection must set forth (a) a reference, at the top, to "State of Texas v. Farmers, Cause No.
GV202501," (b) a statement as to whether the objector intends to appear at the Settlement
Hearing, either in person or through counsel, (c) a detailed statement of the specific basis for the
objection, (d) the name that is set forth on the Notice that was sent to the objector, (e) the
objector's current name, if different from the name set forth on the Notice, (f) the objector's
current address, (g) the objector's current telephone number and, if available, telecopier number,
(h) the objector's type of policy and policy number, and (i) the objector's signature or that of his
or her authorized representative. Three copies of the written objection must be sent, the first
addressed to the District Clerk of Travis County, Texas, 1000 Guadalupe Street, Austin, Texas
78701, the second addressed to David C. Mattax, Chief, Financial Litigation Division, P.O. Box
12548, Austin, Texas 78711-2548, and the third addressed to Richard N. Carrell, Fulbright &
Jaworski L.L.P., 1301 McKinney, Suite 5100, Houston, Texas 77010-3095. If an objection does
not include all of the required information or if it is not timely mailed to the three correct
addresses, then it shall be invalid and it will not be considered by the Court. Any member of the
Settlement Classes who does not object in the manner provided shall be deemed to have waived
30491649. 1
-7-
. .
such objection and shall forever be foreclosed from making any objection to the fairness,
adequacy, or reasonableness of the Settlement Agreement and the proposed Final Judgment.
13. If the Court gives final approval to the Settlement Agreement and enters a final
judgment, in order to be entitled to participate in the Credit Usage Notice Adjustment Fund
portion of the Settlement Agreement, a member of the Credit Usage Notice Class who has not
requested exclusion from the Settlement Classes must submit a Claim Form, substantially in the
form attached as Exhibit C hereto, to the Farmers Parties at the address set forth in the Notice.
Such Claim Form must be completed and postmarked on or before May 15,2004. Any member
of the Credit Usage Notice Class who does not submit a completed Claim Form shall not be
entitled to share in the Credit Usage Notice Adjustment Fund but nonetheless shall be bound by
the terms of the Settlement Agreement and by the Final Judgment and any other Order of this
Court approving the Settlement Agreement, including all releases therein, and shall be barred
and enjoined in this or any other action from asserting any Released Claims.
14. Members of the Rate and Discount Classes shall automatically receive their share
of Settlement Funds upon final approval of the Settlement Agreement and entry of final
judgment, unless they file a written request for exclusion from the Settlement Classes as
provided in paragraph 11 herein.
15. The Court expressly retains the power to adjourn the Settlement Hearing, without
any further notice other than an announcement at the Settlement Hearing of adjournment thereof,
and to approve, modify, or disapprove the Settlement Agreement without further notice to
members of the Settlement Classes. The Court retains jurisdiction over this Action to consider
all further applications arising out of or connected with the proposed settlement herein.
30491649.1 -8-
16. The administration of the Settlement Agreement, and the decision of all disputed
questions of law and fact with respect to the validity of any claim or right of any person to
participate in the distribution of the Settlement Fund, shall be under the authority of the Court.
The parties to this Settlement Agreement, counsel herein in any capacity in which they may act
hereunder, and any employees or agents of such law firms or the parties to the Settlement
Agreement (including, without limitation, those employees who may furnish services in
connection with the proposed Settlement) shall not be liable for anything done or omitted in
connection with the Settlement Agreement and the administration thereof except for their own
willful misconduct.
17. The parties to the Settlement Agreement are directed to carry out their obligations
under the Settlement Agreement.
18. In the event that the Settlement Agreement is not approved by the Court, or the
Court enters the Final Judgment and it is vacated or modified on appeal, or otherwise altered in a
material way, or the Effective Date for any other reason does not occur, and if any party to the
Settlement Agreement thereafter exercises its right to terminate the Settlement Agreement as
provided therein, then the Settlement Agreement and any actions to be taken in connection
therewith shall be vacated and terminated and shall become null and void for all pwposes, and
all negotiations, transactions and proceedings connected with it (a) shall be without prejudice to
the rights of any party hereto; (b) shall not be deemed or construed as evidence or an admission
by any party of any fact, matter or thing; and (c) shall not be admissible in evidence or used for
any purpose in any subsequent proceeding in the Action, or any other action or proceeding in this
or any other forum, judicial, administrative, or otherwise, except proceedings to enforce the
Settlement.
30491649.1 -9-
SIGNED JUJu. '2..7 '2003.
I, VELVA L. PRICE, District Clerk,
Travis County, Texas, do hereby certi~ that this Is
a true and correct copy as same appears of
record in my office. Witness my ha a d.seal of
office on I (,0145
VELVA L. PRICE
DISTRICT CLERK
By Deputy:
30491649. \ -10-
Exhibit 3
TO APPELLEES’ JOINT MOTION TO DISMISS
APPEAL FOR LACK OF APPELLATE JURISDICTION AND REQUEST FOR
EXPEDITED CONSIDERATION OF MOTION
1
1 REPORTER'S RECORD
VOLUME 2 OF 2 VOLUMES
2 TRIAL COURT CAUSE NO. D-1-GV-02-002501
3 STATE OF TEXAS, THE TEXAS ) IN THE DISTRICT COURT
DEPARTMENT OF INSURANCE, )
4 AND THE TEXAS )
COMMISSIONER OF )
5 INSURANCE, )
Plaintiffs, )
6 )
VS. )
7 )
)
8 FARMERS GROUP, INC., )
FARMERS UNDERWRITERS ) TRAVIS COUNTY, TEXAS
9 ASSOCIATION, FIRE )
UNDERWRITERS ASSOCIATION, )
10 FARMERS INSURANCE )
EXCHANGE, FIRE INSURANCE )
11 EXCHANGE, TEXAS FARMERS )
INSURANCE COMPANY, )
12 MID-CENTURY INSURANCE )
COMPANY OF TEXAS, AND )
13 FARMERS TEXAS COUNTY )
MUTUAL INSURANCE COMPANY, )
14 Defendants. ) 261ST JUDICIAL DISTRICT
15 -------------------------------------------------
16
HEARING ON JOINT MOTION FOR
17 PRELIMINARY APPROVAL OF SECOND AMENDED
SETTLEMENT AGREEMENT
18
19 --------------------------------------------------
20 On the 2nd day of July, 2015, the following
21 proceedings came on to be heard in the above-entitled
22 and numbered cause before the Honorable Scott H.
23 Jenkins, Judge presiding, held in Austin, Travis County,
24 Texas;
25 Proceedings reported by machine shorthand.
2
1 A P P E A R A N C E S
2
FOR THE PLAINTIFFS, THE STATE OF TEXAS, THE TEXAS
3 DEPARTMENT OF INSURANCE, AND THE TEXAS COMMISSIONER OF
INSURANCE:
4
JOSHUA GODBEY
5 SBOT NO. 24049996
RYAN MINDELL
6 SBOT NO. 24089707
JENNIFER JACKSON
7 SBOT NO. 24060004
Assistant Attorney General
8 OFFICE OF THE ATTORNEY GENERAL
P.O. Box 12548
9 Austin, Texas 78711-2548
(512) 475-4209
10
11
FOR DEFENDANTS FIRE UNDERWRITERS ASSOCIATION, FARMERS
12 GROUP, INC., FARMERS INSURANCE EXCHANGE, FIRE INSURANCE
EXCHANGE, TEXAS FARMERS INSURANCE COMPANY, MID-CENTURY
13 INSURANCE COMPANY OF TEXAS, MID-CENTURY INSURANCE
COMPANY, FARMERS TEXAS COUNTY MUTUAL INSURANCE COMPANY,
14 TRUCK INSURANCE EXCHANGE, AND TRUCK UNDERWRITERS
ASSOCIATION:
15
M. SCOTT INCERTO
16 SBOT NO. 10388950
NORTON ROSE FULBRIGHT
17 98 San Jacinto Boulevard, Suite 1100
Austin, Texas 78701
18 (512) 474-5201
19 DARRYL ANDERSON
SBOT NO. 24008694
20 NORTON ROSE FULBRIGHT
1301 McKinney, Suite 5100
21 Houston, Texas 77010-3095
(713) 651-5151
22
MARCY HOGAN GREER
23 SBOT NO. 08417650
ALEXANDER, DUBOSE, JEFFERSON & TOWNSEND
24 515 Congress Avenue, Suite 2350
Austin, Texas 78701
25 (512) 482-9300
3
1 A P P E A R A N C E S
(CONTINUED)
2
3
FOR INTERVENORS GERALD HOOKS AND LESLY HOOKS:
4
JOSEPH BLANKS
5 SBOT NO. 02456770
LAW OFFICE OF JOSEPH C. BLANKS
6 P.O. Box 999
Doucette, Texas 75942
7 (409) 837-9707
8
9 FOR INTERVENOR MICHAEL J. WOODS:
10 MICHAEL J. WOODS, PRO SE
8620 N. New Braunfels #522
11 San Antonio, Texas 78217
(210) 822-1560
12
13
FOR INTERVENOR CHARLES O. "CHUCK" GRIGSON:
14
JOE K. LONGLEY
15 SBOT NO. 12542000
LAW OFFICE OF JOE K. LONGLEY
16 1609 Shoal Creek Boulevard, Suite 100
Austin, Texas 78701
17 (512) 477-4444
18 PHILIP K. MAXWELL
SBOT NO. 13254000
19 LAW OFFICE OF PHILIP K. MAXWELL
1609 Shoal Creek Boulevard, Suite 100
20 Austin, Texas 78701
(512) 947-5434
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1 I N D E X
2 VOLUME 2
3
HEARING ON JOINT MOTION FOR
4 PRELIMINARY APPROVAL OF SECOND AMENDED
SETTLEMENT AGREEMENT
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JULY 2, 2015
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7 DEFENDANT FARMERS' WITNESSES
8 Direct Cross Vol.
9 RONALD MYHAN
By Mr. Incerto 5 2
10 By Mr. Mindell 51 2
By Mr. Maxwell 56 2
11 By Mr. Incerto 105 2
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Page Vol.
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14 Defendants Farmers rest................... 107 2
15 All parties close......................... 107 2
16 Statements by Mr. Blanks (in lieu of
opening statements earlier)............ 108 2
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Statements by Mr. Woods................... 109 2
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Statements by Ms. Greer................... 110 2
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Court's Ruling............................ 116 2
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Adjournment............................... 135 2
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Court Reporter's Certificate.............. 136 2
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1 MR. INCERTO: I think the end --
2 THE COURT: Do we need to discuss all
3 these time periods on the record or may I give the
4 court reporter a break now?
5 MR. LONGLEY: I want to make an objection
6 on the record before we go off the record, Your Honor,
7 regarding the form of the order that you're about to
8 sign. We object to the form.
9 THE COURT: Then tell me what the defect
10 is in the form of the order.
11 MR. LONGLEY: The defect is that, number
12 one, we were just handed this order. It was not
13 attached as part of the moving papers. The one that was
14 attached to the moving papers in Paragraph 2 says this
15 Court hereby certifies classes, and this is the first
16 time we've seen an order that does not certify classes.
17 THE COURT: That's because their position,
18 as you know, all along in this joint motion has been
19 that the class was previously certified -- or the Court
20 gave preliminary approval before, it's come back to the
21 Court and that the class has never been decertified.
22 That's -- has that been your argument?
23 MS. GREER: Yes, Your Honor.
24 MR. GODBEY: Yes, Your Honor.
25 THE COURT: And so what you like about
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1 that other order is that it suggests that I have to go
2 back and recertify the class, and that's what you'd like
3 me to put in the order, right?
4 MR. LONGLEY: Either that or that you
5 refuse to certify a class in this particular order for
6 the reason that you're adopting their view that it's
7 already been certified and you're applying that
8 certification in 2003 to this new 2015 settlement.
9 THE COURT: No, I understand what they're
10 doing in this order, and I thought about that very thing
11 as I read it, just as you did, and I am going to sign
12 the order as they've presented it.
13 MR. LONGLEY: And --
14 THE COURT: But I understand why you don't
15 like that.
16 MR. LONGLEY: Well, the point -- the
17 reason we don't like it is it's an attempt through
18 collusion to deny these -- let me finish, please.
19 THE COURT: Well, I'm not going to morph
20 into argument. I'm only going to talk about the form of
21 the order. And I understand why you don't want me to
22 sign the order, but I don't want to morph into argument
23 now, which it sounds like you want to do, and I
24 understand that, but we're not going to do that.
25 Is there any other defect in the form of
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1 have, I want to know by what time this afternoon you're
2 going to put that in an e-mail to the Court so I can
3 give one last thought to that. I'm not going to rethink
4 my decision, but I am thinking about the form of the
5 order.
6 MR. LONGLEY: I think I can meet that
7 timetable so long as I get what they're going to send
8 over to me reasonably soon.
9 THE COURT: Well, that's just nit
10 corrections with dates. I need to know anything in
11 addition to the thing that you said earlier such as,
12 well, this changes what you're saying about the class
13 certification. Yes, yes it does, in some respects, and
14 I'm signing it. If there's anything else like that, I
15 need to know by 3:00, 4:00 at the latest. I would hope
16 by 3:00. I would hope you could go back right now and
17 compare it and tell me anything else that you
18 couldn't -- because I know you've read this thoroughly
19 before.
20 MR. LONGLEY: I guess what I need to know
21 is the Court is not going to entertain any alternative
22 order to refuse with regard to what we might want to
23 submit?
24 THE COURT: I'm not going to entertain any
25 substantive differences, that's correct.
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1 MR. LONGLEY: Such as the certification.
2 THE COURT: That's correct. That's
3 exactly right.
4 MR. LONGLEY: We're addressing that right
5 now.
6 THE COURT: Exactly, we are addressing
7 that right now. And I understood that from the briefing
8 you gave me in advance of this hearing that you were
9 each trying to spin my prior comments on the record to
10 be a "oh, we need to recertify this class" from your
11 perspective and "no we don't" from their perspective. I
12 understood that completely.
13 MR. LONGLEY: And I think I do, too,
14 Your Honor, that this particular settlement that you're
15 approving will not have a separate certification or
16 refusal to certify.
17 THE COURT: It's going to be the order
18 they've proposed.
19 MR. LONGLEY: I gotcha. And I can get
20 back to you by 5:00 o'clock today or to e-mail
21 Ms. Daniel.
22 THE COURT: No.
23 MR. MAXWELL: 4:00 o'clock, Joe.
24 THE COURT: No, by 4:00 o'clock.
25 MR. LONGLEY: 4:00 o'clock. Okay. Sorry.
135
1 THE COURT: Okay. Good. All right. Any
2 other questions or statements on the record before I let
3 the court reporter get a well-deserved break?
4 MR. INCERTO: Nothing further.
5 MR. GODBEY: Nothing further, Your Honor.
6 MR. LONGLEY: Nothing further.
7 MR. BLANKS: Nothing from the Hooks,
8 Your Honor.
9 MR. WOODS: Nothing.
10 THE COURT: All right. Thank you all.
11 (Court adjourned)
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1 REPORTER'S CERTIFICATE
2
3 THE STATE OF TEXAS )
4 COUNTY OF TRAVIS )
5 I, Chavela V. Crain, Official Court
6 Reporter in and for the 53rd District Court of Travis
7 County, State of Texas, do hereby certify that the above
8 and foregoing contains a true and correct transcription
9 of all portions of evidence and other proceedings
10 requested in writing by counsel for the parties to be
11 included in this volume of the Reporter's Record, in the
12 above-styled and numbered cause, all of which occurred
13 in open court or in chambers and were reported by me.
14 I further certify that this Reporter's Record of
15 the proceedings truly and correctly reflects the
16 exhibits, if any, offered in evidence by the respective
17 parties.
18 WITNESS MY OFFICIAL HAND this the 12th day of July,
19 2015.
20
/s/ Chavela V. Crain
21 Chavela V. Crain
Texas CSR 3064, RMR, CRR
22 Expiration Date: 12/31/2015
Official Court Reporter
23 53rd District Court
Travis County, Texas
24 P.O. Box 1748
Austin, Texas 78767
25 (512) 854-9322