Charles O. "Chuck" Grigson, Gerald Hooks, & Leslie Hooks v. State, No. 03-15-00436-CV (July 20, 2015). · Go Syfert
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Charles O. "Chuck" Grigson, Gerald Hooks, & Leslie Hooks v. State, No. 03-15-00436-CV (July 20, 2015). Book View Copy Cite
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Charles O. "Chuck" Grigson, Gerald Hooks, and Leslie Hooks
v.
State
03-15-00436-CV.
Texas Court of Appeals, 3rd District (Austin).
Jul 20, 2015.
Published opinion
Published

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 [email protected] [email protected] ALEXANDER DUBOSE JEFFERSON & Ryan S. Mindell TOWNSEND LLP State Bar No. 24089707 515 Congress Ave., Suite 2350 [email protected] Austin, Texas 78701 Jennifer S. Jackson Telephone: 512-482-9300 State Bar No. 24060004 Telecopier: 512-482-9303 [email protected] OFFICE OF THE ATTORNEY GENERAL M. Scott Incerto P.O. Box 12548 State Bar No. 10388950 Austin, Texas 78711-2548 [email protected] 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 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.

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).

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 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., 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 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).

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 Lack of Appellate Jurisdiction; (iii) dismiss this appeal; and (iv) grant such other and further relief to which the Appellees are entitled.

Date: July 20, 2015 Respectfully submitted, /s/ M. Scott Incerto Marcy Hogan Greer State Bar No. 08417650 [email protected] 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 [email protected] 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 [email protected] Geraldine W. Young State Bar No. 24084134 [email protected] 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 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 [email protected] RYAN S. MINDELL Assistant Attorney General State Bar No. 24089707 Telephone: (512) 936-1721 [email protected] JENNIFER S. JACKSON Assistant Attorney General State Bar No. 24060004 Telephone: (512) 463-9917 [email protected] 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 [email protected] [email protected] [email protected] Pro Se Intervenor/Objector Counsel for Appellant Charles O. “Chuck” Grigson Joseph C. Blanks P.O. Box 999 Doucette, TX 75942 [email protected] Counsel for Intervenor Gerald and Lesly Hooks

/s/ M. Scott Incerto M. Scott Incerto

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 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) 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");

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).

DC BK15188 PG65 DC BK1 5188 PG66 DC BK15188 PG67 DC BK15188 PG68 DC BK15188 PG69 DC BK15188 PG70 DC BK15188 PG71 DC BK15188 PG72 DC BK15188 PG75 DC BK15188 PG76 DC BK15188 PG77 DC BK15188 PG78 DC BK15188 PG79 DC BK15188 PG80 DC BK15188 PG81 DC BK15188 PG82 DC BK15188 PG86 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-

----------- - · ~·~ -----· ··- 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 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.

. .

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.

REPORTER'S RECORD

VOLUME 2 OF 2 VOLUMES

TRIAL COURT CAUSE NO. D-1-GV-02-002501

STATE OF TEXAS, THE TEXAS ) IN THE DISTRICT COURT DEPARTMENT OF INSURANCE, ) AND THE TEXAS ) COMMISSIONER OF ) INSURANCE, ) Plaintiffs, ) ) VS. ) ) ) FARMERS GROUP, INC., ) FARMERS UNDERWRITERS ) TRAVIS COUNTY, TEXAS ASSOCIATION, FIRE ) UNDERWRITERS ASSOCIATION, ) FARMERS INSURANCE ) EXCHANGE, FIRE INSURANCE ) EXCHANGE, TEXAS FARMERS ) INSURANCE COMPANY, ) MID-CENTURY INSURANCE ) COMPANY OF TEXAS, AND ) FARMERS TEXAS COUNTY ) MUTUAL INSURANCE COMPANY, ) Defendants. ) 261ST JUDICIAL DISTRICT -------------------------------------------------

HEARING ON JOINT MOTION FOR PRELIMINARY APPROVAL OF SECOND AMENDED

SETTLEMENT AGREEMENT

-------------------------------------------------- On the 2nd day of July, 2015, the following proceedings came on to be heard in the above-entitled and numbered cause before the Honorable Scott H. Jenkins, Judge presiding, held in Austin, Travis County, Texas;

Proceedings reported by machine shorthand.

A P P E A R A N C E S

FOR THE PLAINTIFFS, THE STATE OF TEXAS, THE TEXAS DEPARTMENT OF INSURANCE, AND THE TEXAS COMMISSIONER OF INSURANCE:

JOSHUA GODBEY

SBOT NO. 24049996

RYAN MINDELL

SBOT NO. 24089707

JENNIFER JACKSON

SBOT NO. 24060004

Assistant Attorney General OFFICE OF THE ATTORNEY GENERAL P.O. Box 12548 Austin, Texas 78711-2548 (512) 475-4209

A P P E A R A N C E S

(CONTINUED)

I N D E X

VOLUME 2

HEARING ON JOINT MOTION FOR PRELIMINARY APPROVAL OF SECOND AMENDED

SETTLEMENT AGREEMENT

JULY 2, 2015

DEFENDANT FARMERS' WITNESSES

Direct Cross Vol. RONALD MYHAN By Mr. Incerto 5 2 By Mr. Mindell 51 2 By Mr. Maxwell 56 2 By Mr. Incerto 105 2

Page Vol.

Defendants Farmers rest................... 107 2 All parties close......................... 107 2 Statements by Mr. Blanks (in lieu of opening statements earlier)............ 108 2 Statements by Mr. Woods................... 109 2 Statements by Ms. Greer................... 110 2 Court's Ruling............................ 116 2 Adjournment............................... 135 2 Court Reporter's Certificate.............. 136 2 MR. INCERTO: I think the end -- THE COURT: Do we need to discuss all these time periods on the record or may I give the court reporter a break now?

MR. LONGLEY: I want to make an objection on the record before we go off the record, Your Honor, regarding the form of the order that you're about to sign. We object to the form.

THE COURT: Then tell me what the defect is in the form of the order.

MR. LONGLEY: The defect is that, number one, we were just handed this order. It was not attached as part of the moving papers. The one that was attached to the moving papers in Paragraph 2 says this Court hereby certifies classes, and this is the first time we've seen an order that does not certify classes.

THE COURT: That's because their position, as you know, all along in this joint motion has been that the class was previously certified -- or the Court gave preliminary approval before, it's come back to the Court and that the class has never been decertified. That's -- has that been your argument?

MS. GREER: Yes, Your Honor.

MR. GODBEY: Yes, Your Honor.

THE COURT: And so what you like about that other order is that it suggests that I have to go back and recertify the class, and that's what you'd like me to put in the order, right?

MR. LONGLEY: Either that or that you refuse to certify a class in this particular order for the reason that you're adopting their view that it's already been certified and you're applying that certification in 2003 to this new 2015 settlement.

THE COURT: No, I understand what they're doing in this order, and I thought about that very thing as I read it, just as you did, and I am going to sign the order as they've presented it.

MR. LONGLEY: And -- THE COURT: But I understand why you don't like that.

MR. LONGLEY: Well, the point -- the reason we don't like it is it's an attempt through collusion to deny these -- let me finish, please.

THE COURT: Well, I'm not going to morph into argument. I'm only going to talk about the form of the order. And I understand why you don't want me to sign the order, but I don't want to morph into argument now, which it sounds like you want to do, and I understand that, but we're not going to do that.

Is there any other defect in the form of have, I want to know by what time this afternoon you're going to put that in an e-mail to the Court so I can give one last thought to that. I'm not going to rethink my decision, but I am thinking about the form of the order.

MR. LONGLEY: I think I can meet that timetable so long as I get what they're going to send over to me reasonably soon.

THE COURT: Well, that's just nit corrections with dates. I need to know anything in addition to the thing that you said earlier such as, well, this changes what you're saying about the class certification. Yes, yes it does, in some respects, and I'm signing it. If there's anything else like that, I need to know by 3:00, 4:00 at the latest. I would hope by 3:00. I would hope you could go back right now and compare it and tell me anything else that you couldn't -- because I know you've read this thoroughly before.

MR. LONGLEY: I guess what I need to know is the Court is not going to entertain any alternative order to refuse with regard to what we might want to submit?

THE COURT: I'm not going to entertain any substantive differences, that's correct.

MR. LONGLEY: Such as the certification.

THE COURT: That's correct. That's exactly right.

MR. LONGLEY: We're addressing that right now.

THE COURT: Exactly, we are addressing that right now. And I understood that from the briefing you gave me in advance of this hearing that you were each trying to spin my prior comments on the record to be a "oh, we need to recertify this class" from your perspective and "no we don't" from their perspective. I understood that completely.

MR. LONGLEY: And I think I do, too, Your Honor, that this particular settlement that you're approving will not have a separate certification or refusal to certify.

THE COURT: It's going to be the order they've proposed.

MR. LONGLEY: I gotcha. And I can get back to you by 5:00 o'clock today or to e-mail Ms. Daniel.

THE COURT: No.

MR. MAXWELL: 4:00 o'clock, Joe.

THE COURT: No, by 4:00 o'clock.

MR. LONGLEY: 4:00 o'clock. Okay. Sorry.

THE COURT: Okay. Good. All right. Any other questions or statements on the record before I let the court reporter get a well-deserved break?

MR. INCERTO: Nothing further.

MR. GODBEY: Nothing further, Your Honor.

MR. LONGLEY: Nothing further.

MR. BLANKS: Nothing from the Hooks, Your Honor.

MR. WOODS: Nothing.

THE COURT: All right. Thank you all.

(Court adjourned) REPORTER'S CERTIFICATE

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.
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.
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 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, 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 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 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, 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 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 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 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 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 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 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 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 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 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 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: <PREPRINT NAME> 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 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, (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 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 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 FOR DEFENDANTS FIRE UNDERWRITERS ASSOCIATION, FARMERS GROUP, INC., 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: M. SCOTT INCERTO SBOT NO. 10388950 NORTON ROSE FULBRIGHT 17 98 San Jacinto Boulevard, Suite 1100 Austin, Texas 78701 (512) 474-5201 DARRYL ANDERSON SBOT NO. 24008694 NORTON ROSE FULBRIGHT 1301 McKinney, Suite 5100 Houston, Texas 77010-3095 (713) 651-5151 MARCY HOGAN GREER SBOT NO. 08417650 ALEXANDER, DUBOSE, JEFFERSON & TOWNSEND 515 Congress Avenue, Suite 2350 Austin, Texas 78701 (512) 482-9300 FOR INTERVENORS GERALD HOOKS AND LESLY HOOKS: JOSEPH BLANKS SBOT NO. 02456770 LAW OFFICE OF JOSEPH C. BLANKS P.O. Box 999 Doucette, Texas 75942 (409) 837-9707 FOR INTERVENOR MICHAEL J. WOODS: MICHAEL J. WOODS, PRO SE 8620 N. New Braunfels #522 San Antonio, Texas 78217 (210) 822-1560 FOR INTERVENOR CHARLES O. "CHUCK" GRIGSON: JOE K. LONGLEY SBOT NO. 12542000 LAW OFFICE OF JOE K. LONGLEY 1609 Shoal Creek Boulevard, Suite 100 Austin, Texas 78701 (512) 477-4444 PHILIP K. MAXWELL SBOT NO. 13254000 LAW OFFICE OF PHILIP K. MAXWELL 1609 Shoal Creek Boulevard, Suite 100 Austin, Texas 78701 (512) 947-5434 THE STATE OF TEXAS ) COUNTY OF TRAVIS ) I, Chavela V. Crain, Official Court Reporter in and for the 53rd District Court of Travis County, State of Texas, do hereby certify that the above and foregoing contains a true and correct transcription of all portions of evidence and other proceedings requested in writing by counsel for the parties to be included in this volume of the Reporter's Record, in the above-styled and numbered cause, all of which occurred in open court or in chambers and were reported by me. I further certify that this Reporter's Record of the proceedings truly and correctly reflects the exhibits, if any, offered in evidence by the respective parties. WITNESS MY OFFICIAL HAND this the 12th day of July, 2015. /s/ Chavela V. Crain Chavela V. Crain Texas CSR 3064, RMR, CRR Expiration Date: 12/31/2015 Official Court Reporter 53rd District Court Travis County, Texas P.O. Box 1748 Austin, Texas 78767 (512) 854-9322