Posted On: April 22, 2007, 10:08 am CDT

Posted By: Read - Jackson- Harrison and

2. I am a former employee of State Farm Fire and Casualty Co.
and State Farm Mutual Automobile Insurance Co. (collectively,
"State Farm" or "the Company"). I was employed there from 1988
through mid-1996, and in fact separated during the pendency of
the Taylor litigation. Since August of 1994, I worked first in
the Automobile Company's so-called "SAC" unit ("Suits Against the
Company" unit) and then in the Fire Company's SAC unit. Later
these units were renamed, "Litigation Units." My most recent job
title before separation from the Company was Claims Specialist.
My responsibilities included evaluating bad faith suits brought
against the Company by insureds, responding to discovery and
monitoring litigation. I did so in connection with the Taylor
litigation.

3. In this capacity, I am aware that there were many other State
Farm claims arising out of the Northridge earthquake like the
Taylors' involving unauthorized signatures by State Farm agents
or agency employees on applications omitting earthquake coverage.
At the time of the Taylor claim, the Company was well aware that
this was a problem. As a matter of practice, the Company would
pay these claims, if it believed that the forgery issue would be
brought to light and proven by the insured. Because of the
forgery issue in the Taylor case, if the case was not dismissed
on summary judgement, it was my impression that the claim was
going to be reconsidered. However, we were waiting to see if we
could save money on the Taylor claim by having summary judgement
granted, and as part of that plan I was instructed not to provide
certain relevant information at my depositions.

4. Specifically, my supervisor in the SAC unit, Vanessa Gudelj,
and her supervisor, John Poptanich, put pressure on me to
withhold the existence of documents memorializing certain State
Farm claims handling guidelines from plaintiffs' counsel Bernie
Bernheim at my deposition, which they believed, if revealed,
would defeat summary judgement and ultimately lead to payment of
the Taylors' claim. They pressured me into not revealing the
existence of claims handling documents which established
guidelines under which claims like the Taylors were to be
handled. These included a three ring binder called "CATHR
Management Information and Memos Manual" used and maintained by
Claim Superintendent Tinga Nicholson who was the Claim
Superintendent that denied the Taylors' claim. It was responsive
to the Taylors' discovery request and we simply chose not to
produce it. Similarly, Ms. Nicholson had prepared a breakdown
of earthquake claims in her unit (the SHU unit - see below) by
category of claim, and one of the categories was "unauthorized
signatures." This document showed the percentage of total
earthquake claims which involved unauthorized signatures. This
document, too, was never produced.

5. The Taylors' claim was denied by personnel working in the
so-called "Special Handling Unit." In addition to the claims
handling documents mentioned above, we never produced to Mr.
Bernheim a document memorializing a SHU meeting at which the
subject of unauthorized signatures on applications omitting
earthquake insurance was discussed. This document has a heading
as follows:

"Problem areas
- Telephone apps [applications] - EQ [earthquake] has to be in
person.
Und. [Underwriting] was supposed to catch 'not signed'
- in some cases the agent or staff signed it."

6. In the SAC unit, we knew that Rod Taylor's signature on the
application was clearly not his signature.

I declare under penalty of perjury under the laws of the State of
California that the foregoing is true and correct. Executed this
19th day of September, 1996 at Ojai, California.



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