Not only did they win by dumping State Farm and geting with Mercury Insurance. To put State Farm in their place for trying to act like god is a great accomplishment. Not like a good neighbor. Shame Shame State Farm!
It looks like these guys showed everyone what idiots the management of State Farm is. According to this, State Farm sued them and then paid their defense to the tune of about $2,000,000 and lost not one but two jury verdicts. And that included a verdict of about $12,000,000. I would guess State Farm is disapointed but probably because they have idiots running the company!
Who should take the heat for this spending of policyholder money? It would appear State Farm management didn’t care how much they spent as long as they could make life miserable for these two guys. But now it seems the agents have won and everyone now knows the company management was paying both ends of a litigation they brought on themselves. Unbelieveable! And they want to increase auto and home rates!
Does anyone remember the class action lawsuit brought against them for discriminating against women? In 1979 only 1.9% of their sales force were women. So they really had to shake their tails to get women on their sales force. They hired me but paid my two male office partners $200 more a month because my manager said “their wives didn’t make as much as my husband.” No kidding. I left them after a year and a few years later became a happy and $$$uccessful Mercury agent.
With this latest round of exemplary management selections it is further proof that the management company is out of control and continues to rape policy holders. The quashing of their own “independent” agency force is the goal and they are doing so by cutting PIF and thus contract values. And don’t you think Zurich is behind all this?
Below is an brief summary of what took place in the Sonoma County case of State Farm Vs Pyorre-Wier
State Farm had two witnesses in their case in chief:
Definition: Buss Reservation is from the Jerry Buss case and refers to the filing of a reservation to reserve the right to be reimbursed for defense costs paid out that were not covered.
State Farm’s opening argument:
Attorney stated when we knew State Farm was paying our defense we went out and hired three attorneys because State Farm was gracious enough to let us choose our own attorneys. State Farm made a big deal about the fact that they agreed to pay our attorneys $200 per hour and said they usually only allow $125 per hour payment. Our attorneys got witnesses to admit that the firm representing State Farm was paid $400 or more per hour.
Told the jury we didn’t make a peep about State Farm filing a reservation of rights. Our attorneys pointed out that we had made much more than a peep, we had filed a bad faith action because of the reservation of rights filing.
Told the jury we had taken State Farm’s trade secrets. Our attorneys pointed out that although State Farm keeps telling everyone we took their trade secrets they have yet, in the 10 and a half years of litigation, to prove they were trade secrets.
Claims person:
Testified she did not know the date of the start of our trial and the timing of the Buss reservation as to 5 days before the start of trial was just a coincidence.
Was later shown e-mails, to her, telling her to file the Buss reservation as soon as possible as trial was starting June 24. She suddenly remembered seeing this e-mail and had been told the date of the trial.
Was also show a memo from the State Farm claim file in 2000 that had “No Buss” written on it. This was when the original reservation of rights was filed but with no Buss reservation.
We then showed the jury the additional memo from the State Farm claim file from 2002 that told claims to hurry and file the Buss reservation because the trial was starting June 24. We also showed a document where State Farm’s attorney said he thought they had plead around coverage.
State Farm Attorney hired to send our bills to State Farm for payment :
Testified we were very honest in our billings and answered all questions to his satisfaction when he had a question. State Farm rested its case after this witness.
Our defense then started:
I testified we had two of the attorneys representing us prior to State Farm suing us (we had been represented by them in the Appling litigation). I also explained how State Farm had hired one of the world’s largest law firms Orrick, Herrington and Sutcliff to represent them. Orrick has about 28 offices world wide and about 1,500 attorneys. I told the jury I was aware there were about 10 attorneys involved in our case for State Farm’s side.
I testified that we had filed a bad faith claim shortly after State Farm had filed their reservation of rights letter and certainly State Farm should understand that was about as big of a response as could have been made.
State Farm on cross tried to claim that sending the Buss reservation 5 days before trial had not hurt us as we would not have been able to raise the money for a defense even if they had filed the Buss with the original reservation of rights. I pointed out that in our Appling case we had raised well over one and a half million dollars and would most likely have been able to do the same for the Pyorre-Wier Case had we been given the chance. I also pointed out we could have most likely got a large contingency firm to represent us seeing as the jury awarded us $12,600,000. I also testified that our case has been written up in the magazines of the associations of Allstate, American Family, Farmers and State Farm and they all supported us.
John Wier testified he was terminated for wanting to reserve his rights under his current contract. He stated he just wanted to put a reservation of rights on the new computer agreement State Farm was bringing out and requiring all agents to sign. He did that and State Farm terminated him. So it is rather ironic that this Sonoma case was about the filing of a reservation of rights. Apparently State Farm feels they can file a reservation of rights but they terminate any agent who would think they should be able to do the same.
We brought in 3 agents (current and former as examples) who testified they would most likely have supported the Pyorre-Wier Case and in fact were currently supporting the litigation now as it was important to all captive agents. I would like to thank them for stepping forward.
We then had our expert witness testify ( he has his law degree and has been an expert in about 34,000 cases). He testified he will testify for either companies or individuals but if he feels there is any question he will insist on a second opinion. He also testified about State Farm’s claim manual and read from it and stated they had committed bad faith by filing the Buss reservation so late and only 5 days from the trial. State Farm, as they usually do, claimed this claim manual was trade secret and no one else but one attorney and our expert could read from it. They also did not produce it until the lunch break after which time the claims manual was to be discussed. These are some of the secret words that were read aloud in court from this holy grail: “Be fair and be open and carry out good faith” ; “Reservation of rights” ; “The right must indeed be reserved” ; “There must be a timely and expressed reservation of rights” and “there must be proper claims handling procedures”. Our expert stated State Farm failed to timely reserve their rights and thus had committed bad faith.
State Farm then cross examined our expert and asked him if he had ever worked for State Farm. He said he had but he no longer does because State Farm had approached him and said if he was going to work for them he would no longer be able to represent policyholders. He said he told State Farm then he would no longer work for them. Then State Farm’s attorney asked him if he had ever been sued by State Farm and he said he didn’t recall. State Farm then brought out some litigation document and stated he had been sued by State Farm in 1994 for theft of trade secrets. He said he had no recollection of that and State Farm apparently thought that was some sort of gotcha because they were all smiles for a minute. Then that was it no more mention of a litigation with our expert. Then the expert went on to explain why State Farm had violated their own claims procedures and thus committed bad faith. During our closing arguments our attorneys pointed out that it seems whenever anyone challenges State Farm they accuse them of trade secret violations and just as in our case nothing had been proven about our witness other than State Farm didn’t like him testifying against them.
Attorney Bill Tedards then testified that our case was being watched by most captive agents organizations and was supported by them. He testified his specialty of law is abuse of power cases and the Mendocino case was certainly one where State Farm was abusing their power. He explained how State Farm uses the bogus trade secret issue to keep former agents from keeping in contact with their former policyholders and thus depriving policyholders of finding out about better buys in insurance.
State Farm then brought in two rebuttal witnesses, an expert and the attorney who had given them the legal opinion they could file the Buss reservation later in the case.
State Farm’s expert said he had his bachelors degree and was a Vice President of claims for California Casualty. He said he had been an expert witness in 12 cases, 2 of them involving State Farm. He also said his company told him if he was going to be an expert witness he could only testify on behalf of insurance companies. He also stated that State Farm, or any insurance company for that matter, could do anything they wanted too.
On cross examination the expert also admitted his company, while he was the Vice President of claims, had been sued numerous times for bad faith. He admitted the courts had severely reprimanded his company for a bad faith action and stated “we all learn from these types of things”.
The attorney who gave State Farm the opinion they could file the Buss reservation just before the start of trial was the final rebuttal witness for State Farm. He testified he had about 38 years of legal practice and insurance law was his specialty. He testified he gave State Farm his opinion and then requested another opinion from another firm about 4 months after the Buss reservation was filed. In that request for the second opinion it was pointed out that he had asked the other attorney to speak with him before he put anything in writing.
The attorney also stated that we had never written him a letter or contacted him in any way to try and work out the concerns we had. Our attorney asked him if he would have made any changes to what he had recommended if we had and he said no. Our attorney also asked him if he was aware we had filed a bad faith complaint in objection to State Farm’s filing of the first reservation of rights as well as the Buss reservation and he said he was not. Our attorney then told him is was not our fault that State Farm had not kept him apprised of this.
The case was then closed and final arguments were given to the jury.
State Farm’s attorney tried to sell the idea State Farm was being nice to us by paying our defense costs and not asking for the entire $2,000,000 back. He also made the statement “we weren’t trying to screw these guys”. The State Farm attorney had also insinuated throughout the trial that we were always filing lawsuits but in his closing he made the costly remark of saying “every time State Farm filed a lawsuit against them they filed one back”.
Our attorneys pointed out that the Mendocino case was over “alleged trade secrets” that have yet to be proven after ten and a half years. They also pointed out that originally in the case in Mendocino State Farm was suing us for approximately $50,000 but through the first trial ending in 2002 State Farm had expended Millions of dollars and they continue to do so. It was also pointed out that the damages in the Mendocino Case have now been withdrawn in an effort to get away from a jury. So now State Farm is continuing to spend millions of dollars pursuing this litigation and they claim to have no money damages! It was also made known that State Farm had tried to get the FBI to prosecute us under the Economic Espionage Act of 1996. This is a criminal statute and involves huge fines and time in prison.
The case then went to the jury and after approximately 8 days of trial they returned a verdict in about an hour and forty minutes. Their verdict was we owed nothing to State Farm. Because of the way this litigation was set up the jury was only instructed to decide if we owed anything to State Farm and no damages to us were considered.
This is no surprise to me. in 1994, after the CA.Earthquake, Farmers through 250 Career Agents under the Train; demanding agents pay back advanced commissions while at the same time agents not had no P&C product to sell to meet the program requirements due to what became a 3 year moritorium on P&C products. The agent/company contract had no provision for such an event. So, of course Farmers took the greedy path and ruined 250 agents’ lives. Farmers is thee biggest ***** in the business. I recommend no one become a Farmers Agent today. If you don’t have 10 years with them now, you have a 1 in 100 chance of succeeding with them. Don’t kid yourself that YOU are “That One”. You will sell just enough to starve, then, when your’e broke, they will kiss you good bye and assign your accounts to their 20-30 Year Agents. This is their actual Game Plan. You succeeding is NOT THEIR PLAN.
I don’t believe State Farm allows Right of First Refusal. I think Farmers allows their agents to write business with other carriers but I don’t think State Farm or Allstate allow that. And I don’t believe anything that came out of these lawsuits changed that.
What many captive agents don’t seem to realize is that ALL CARRIERS WANT PROFITABLE BUSINESS. I know the grass looks greener to these poor Captive guys and gals but the Independent Agency System is not a dumping ground for unprofitable and hard to place business. We may have access to more non standard and MGA markets but we still must produce a profitable book of business for our carriers if we want to stay in business. We still have to underwrite! We’re still accountable for our loss ratios.
So when I read frustrated Captive agents bemoaning their inability to place business elsewhere, I’m baffled. The job is still the job and I think it’s a darn good one.
This is why I’ve always questioned why anyone in their right mind would sign a contact with one of the captives. Seriously, any captives please chime in. It’s as one sided as a credit card agreement!
So from what I read, it is AOK for a “captive” State Farm agent to open an INDEPENDENT AGENCY “on the side”. The INDEPENDENT AGENCY “on the side” doesn’t even have to be owned by YOUR WIFE, YOUR SON INLAW, A “PARTNER”, etc. Then…EVERY STATE FARM AGENT should open or have an INDEPENDENT “on the side” just waiting to ROLL THAT AUTO AND HOMEOWNERS BUSINESS over to, you know, like after retirement or when the “underwriting” gets a bit tough, like in the coastal states. Use the STATE FARM SIGN to get the customer in, and then write the business with the Independent. Heck, I bet even LIFE INSURANCE is much easier to write through an independent agency rather than State Farm.
Here’s the proof…
Attorney Bill Tedards then testified that our case was being watched by most captive agents organizations and was supported by them. He testified his specialty of law is abuse of power cases and the Mendocino case was certainly one where State Farm was abusing their power. He explained how State Farm uses the bogus trade secret issue to keep former agents from keeping in contact with their former policyholders and thus depriving policyholders of finding out about better buys in insurance….
So now State Farm is continuing to spend millions of dollars pursuing this litigation and they claim to have no money damages! It was also made known that State Farm had tried to get the FBI to prosecute us under the Economic Espionage Act of 1996. This is a criminal statute and involves huge fines and time in prison.
The case then went to the jury and after approximately 8 days of trial they returned a verdict in about an hour and forty minutes. Their verdict was we owed nothing to State Farm. Because of the way this litigation was set up the jury was only instructed to decide if we owed anything to State Farm and no damages to us were considered.
The Mendocino Case is still continuing….
So, I wonder if corporate State Farm will start charging a FEE for the LOGO AND SIGN so that EVERY INDEPENDENT AGENT can rent it then HANG IT from the wall of their independent agency to lure the customer in with the notion of State Farm Insurance, and then write it with a “better buy” company, or for that matter… HIGHER COMMISSION with less “strings attached”. SIGN ME UP!
Mr. Solvent,
You are You are INCORRECT! Running a CAPTIVE State Farm Agency is only one half of the opportunity. The other half is opening the INDEPENDENT on the side to WRITE & ROLL as much STATE FARM SIGN and LOGO and ADVERTISING generated business as possible, over to. I bet twice the business is written with the INDEPENDENT AGENCIES that the State Farm agents own versus what they give to The Farm and 100% of the customer interest is generated from the STATE FARM SIGN and ADVERTISING. It is the best of BOTH worlds STATE FARM advertising and customer name recognition PLUS ability to write the business more competitively and flexibly via the INDEPENDENT AGENCY on the side. I bet many State Farm agents already have their entire books of business copied and will or are rolling that business over to their independent agencies. I know if I were a State Farm Agent, in light of how CRUEL corporate is to their poor agents, I would have no compunction whatsoever in running an INDEPENDENT AGENCY ON THE SIDE for my own protection. Corporations like STATE FARM can be so cruel so… STICK IT TO THE FARM BEFORE THEY STICK IT TO YOU!
thanks for the complete “rest of the story”. I hope this works out well for you…I for one am still amazed that State Farm AND Farmers are not concerned about the bad PR they get by doing these things….some good neighbor!
Don’t ever expect to get a balance in either the article or the postings here. Or even facts here. I won’t defend SF since I have no interest in the whole mess, but just don’t take any of this as fact. Even the so called factual cut and paste stuff can be faked. Decide for yourself, don’t listen to the haters of various companies. Now the usual suspects can attack me as defending SF, which I certainly am not. Some posters believe you should always be entitled to their opinion.
Dear Nobody,
So you DONT think it is OK for a CAPTIVE STATE FARM AGENT to open an INDEPENDENT AGENCY ON THE SIDE? I wish we could get this straight for all State Farm agents to understand once and for all. IS IT OK FOR A CAPTIVE STATE FARM AGENT to have direct ties, close interest or direct interest in an INDEPENDENT AGENCY ON THE SIDE. Perhaps someone form CORPORATE STATE FARM is monitoring or perhaps an AFO could respond with their possition, CAN I HAVE MY CAKE AND EAT IT TOO? CAN I OWN AN INDEPENDENT AGENCY ON THE SIDE? Well, it will actually be my wife, but does it need to be my wife, lets just be honest and above board. ALL STATE FARM AGENTS NEED DIRECTION ON THIS not just the restricted COASTAL SF agents. THERE IS MORE THAN GOOD REASON FOR EVERY STATE FARM AGENT TO OWN AN INDEPENDENT ON THE SIDE. Question is, IS IT A BREACH OF CAPTIVE CONTRACT and will you 4521/transfer accounts to the remaining LOYAL SF agents and leave me with NOTHING but my XDATES to fight for.
INFORMATION IS POWER! Did Rich Pyorre really win the CONTRACTUAL BATTLE?
If anyone has any doubt about what I have posted they can obtain the transcripts of the court proceedings. It is Case #CGC234700, Superior Court State of California, County of Sonoma.
This case was about State Farm wanting to recover defense costs they had to pay for a litigation they created. State Farm paid about $2,000,000 for our defense and was trying to collect much of that back. State Farm also paid about $4,000,000 for their portion of the case. Their original claim for damages was about $50,000. So they paid $6,000,000 to try to recover $50,000. If anyone can’t see how dumb that is then they probably won’t understand much of anything.
Since that time State Farm has hired more than 5 law firms so you can imagine the additional amount of money they have thrown into this.
Now in an effort to get away from a jury in the trade secret litigation State Farm has told the court they have no monatary damages! So they are no longer even asking for $50,000.
In 10 and a half years they have not proven their case, although we did get a jury verdict in our favor of $12,600,000. However approximately 5 months after the trial the judge ruled “the jury might have been confused” and ordered a new trial.
While this was going on State Farm filed the Sonoma litigation and quit paying our defense costs in an attempt to wreck us financially.
Once again in this Sonoma Case a jury saw what was really happening and came to the right conclusion.
Rich,
I’m not saying that I am a State Farm agent, but if I were, would your winning case effectively allow me, the State Farm Agent, to open and own an INDEPENDENT AGENCY on the side and use all of those TRADE SECRET EXPIRATION DATES supossedly OWNED BY STATE FARM,to ROLL and INSURE the State Farm Client Base through my INDEPENDENT AGENCY. The way I read your winning case is that there are NO TRADE SECRETS when it comes to STATE FARM CLIENTS if I can provide a BETTER INSURANCE OFFERING through my INDEPENDENT AGENCY and that’s all I want to do. I like the STATE FARM name recognition, but if underwriting says no, or the price is less with my indepdent, I wan’t to steer the client to my independent agency. State Farm shouldn’t prohibit me from doing that and your winning case may be the precedent setting case to NULLIFY ANY POTENTIAL BREACH OF CONTRACT.
Thanks for your input.
The Infidel
Thanks for reminding me that this entire “comment” thing is ALL BS. As are, in our opinion I’m sure, most of the reprinted articles… Kind of makes me want to just watch TABLOID TV or READ A RAG MAG instead.
I was just trying to determine, amidst the fine, honest and helpful readership… if anyone associated with STATE FARM AGENCY might confirm if operating and INDEPENDENT AGENCY on the side, to potentially ROLL allof an existing book of State Farm AUTO, HOME, LIFE business is a BREACH OF CONTRACT or… perhaps now it is OK for State Farm Agents to operate INDEPENDENT AGECIES as well.
Hopefully, the person that answers will answer honestly to the best of their ability and not continue this, what you allude to as… A CHARADE OF BS.
Thanks for the reality check NOBODY. I didn’t realize I had my rose colored glasses on.
Mr. Naivety
Lets not fight and as for the suggestions. Leave it be. Survival of the fitest. If poor SF Agent wants to sit on his thumb and hope for the best let them be. Now being proactive and worring about nurmero uno… This is called evolution. Us Cheetahs will take over the market and the FARMERS, ALLSTATE & STATE FARM will be Financial advisors tring to loan you $$. NONE FDIC and be scared to keep you money with them. They will be attempting to run their one man enterprises out of the garage or industrial complex. SO…point being lets leave them with their brown thumb and allow them to continue to hibrenate annually. Good Day Mates!
The issue in the case SF just lost is simple, they must pay for the defense of their policyholders being sued, even if it is SF doing the suing, and that they can’t try to sneak in a technicality to try to starve the defendants case.
As I read it, the trade secret issue is still pending. Further, guaranteed that SF would take serious issue with any agent facilitating the transfer of business to another agency or company.
What should be of grave concern to anyone is that SF appears to have (once again) lied on the stand. Also, it appears that they (once again) were guilty of grievous bad faith. Not to mention their deplorable actions which gave rise to this whole situation to begin with. But those are topics for another day.
What also should NOT go without notice is the courage and fortitude that Mr. Pyorre and Mr. Weir have shown to go this far against the biggest beast on the block.
It is my understanding that, early on, they could have settled this whole matter for quite a healthy sum and spared themselves a decade of headaches and heartbreaks but that they chose to go forward on principle to do what is right. I have long felt that the true measure of a man is not when he stands on principle when it benefits him, but rather when it imperils him. So bravo to the noble gentlemen from NoCal!
Dear X SF Agent,
Too bad you had to give up your State Farm Sign/Agency. Today there is a better and BRIGHTER way, when you don’t agree with State Farm. Open an INDEPENDENT AGENCY on the side. Many State Farm Agents opened independents: just down the hall, next door, up stairs… It’s great. Let the State Farm Sign bring in the cusomers and write them through your independent agency down the hall. Also, save your State Farm XDates and roll all that auto, home and life business over to the indepenent if things really get bad. Do it before corporate starts to transfer the accounts to the “house” or other SF Agents. It’s the greatest “insurance gig” in the country and corporate State Farm condones it. In fact, I view it as heavy bargaining power and leverage with my AFO. It’s great to have my cake and eat it too. Required meetings, production quotas… HA! Not for me, I’ll roll even more State Farm business to my independent. If you’re a State Farm agent, ANYWHERE IN THE COUNTRY not just coastal agents, and you haven’t opened up your own INDEPENDENT ON THE SIDE, you are truly behind the times and missing the boat. You absolutely need the protection and bargaining strength of your own independent agency on the side.
It truly is the BRIGHT WAY to be a State Farm Agent.
Mr. Icing.
State Farm treats its policyholders as bad as it does its agents.
Given its history, State Farm cultivates justices on the appeals courts (not the lower courts where a jury actually issues a verdict) and usually prevails.
I am delighted to learn State Farm had its head handed to ’em on this case and hope other plaintiffs are able to taste the justice the two agents in this case tasted.
I only wish insurance commissioners from across the country would throw out the anti-concurrent clause State Farm lobbied so hard to add to policies. It is a glaring reminder of how cheaply regulators are bought and the depth of State Farm’s influence.
I wouldn’t take a State Farm policy if it was given to me.
Ahhh, the stories I could tell about being a State Farm Agent… I’m glad to see that they have to have some accountability for their actions. Not the most ethical company, backdoor deals, different set of rules for different people, different standards, discrimination, games, games, games! All I can say is I’m glad I’m outta there! Much happier that I left!
Lots of information available about State Farm’s bad behavior if you search for “bad faith” and “worst insurance companies” and “justice for sale”.
Fantastic. Happy to see somebody beat State Farm.
Not only did they win by dumping State Farm and geting with Mercury Insurance. To put State Farm in their place for trying to act like god is a great accomplishment. Not like a good neighbor. Shame Shame State Farm!
Farmers your next!
Hey Mac Daddy. Well said!! Great to hear that someone took State Farm down a notch.
It looks like these guys showed everyone what idiots the management of State Farm is. According to this, State Farm sued them and then paid their defense to the tune of about $2,000,000 and lost not one but two jury verdicts. And that included a verdict of about $12,000,000. I would guess State Farm is disapointed but probably because they have idiots running the company!
Who should take the heat for this spending of policyholder money? It would appear State Farm management didn’t care how much they spent as long as they could make life miserable for these two guys. But now it seems the agents have won and everyone now knows the company management was paying both ends of a litigation they brought on themselves. Unbelieveable! And they want to increase auto and home rates!
Does anyone remember the class action lawsuit brought against them for discriminating against women? In 1979 only 1.9% of their sales force were women. So they really had to shake their tails to get women on their sales force. They hired me but paid my two male office partners $200 more a month because my manager said “their wives didn’t make as much as my husband.” No kidding. I left them after a year and a few years later became a happy and $$$uccessful Mercury agent.
With this latest round of exemplary management selections it is further proof that the management company is out of control and continues to rape policy holders. The quashing of their own “independent” agency force is the goal and they are doing so by cutting PIF and thus contract values. And don’t you think Zurich is behind all this?
Below is an brief summary of what took place in the Sonoma County case of State Farm Vs Pyorre-Wier
State Farm had two witnesses in their case in chief:
Definition: Buss Reservation is from the Jerry Buss case and refers to the filing of a reservation to reserve the right to be reimbursed for defense costs paid out that were not covered.
State Farm’s opening argument:
Attorney stated when we knew State Farm was paying our defense we went out and hired three attorneys because State Farm was gracious enough to let us choose our own attorneys. State Farm made a big deal about the fact that they agreed to pay our attorneys $200 per hour and said they usually only allow $125 per hour payment. Our attorneys got witnesses to admit that the firm representing State Farm was paid $400 or more per hour.
Told the jury we didn’t make a peep about State Farm filing a reservation of rights. Our attorneys pointed out that we had made much more than a peep, we had filed a bad faith action because of the reservation of rights filing.
Told the jury we had taken State Farm’s trade secrets. Our attorneys pointed out that although State Farm keeps telling everyone we took their trade secrets they have yet, in the 10 and a half years of litigation, to prove they were trade secrets.
Claims person:
Testified she did not know the date of the start of our trial and the timing of the Buss reservation as to 5 days before the start of trial was just a coincidence.
Was later shown e-mails, to her, telling her to file the Buss reservation as soon as possible as trial was starting June 24. She suddenly remembered seeing this e-mail and had been told the date of the trial.
Was also show a memo from the State Farm claim file in 2000 that had “No Buss” written on it. This was when the original reservation of rights was filed but with no Buss reservation.
We then showed the jury the additional memo from the State Farm claim file from 2002 that told claims to hurry and file the Buss reservation because the trial was starting June 24. We also showed a document where State Farm’s attorney said he thought they had plead around coverage.
State Farm Attorney hired to send our bills to State Farm for payment :
Testified we were very honest in our billings and answered all questions to his satisfaction when he had a question. State Farm rested its case after this witness.
Our defense then started:
I testified we had two of the attorneys representing us prior to State Farm suing us (we had been represented by them in the Appling litigation). I also explained how State Farm had hired one of the world’s largest law firms Orrick, Herrington and Sutcliff to represent them. Orrick has about 28 offices world wide and about 1,500 attorneys. I told the jury I was aware there were about 10 attorneys involved in our case for State Farm’s side.
I testified that we had filed a bad faith claim shortly after State Farm had filed their reservation of rights letter and certainly State Farm should understand that was about as big of a response as could have been made.
State Farm on cross tried to claim that sending the Buss reservation 5 days before trial had not hurt us as we would not have been able to raise the money for a defense even if they had filed the Buss with the original reservation of rights. I pointed out that in our Appling case we had raised well over one and a half million dollars and would most likely have been able to do the same for the Pyorre-Wier Case had we been given the chance. I also pointed out we could have most likely got a large contingency firm to represent us seeing as the jury awarded us $12,600,000. I also testified that our case has been written up in the magazines of the associations of Allstate, American Family, Farmers and State Farm and they all supported us.
John Wier testified he was terminated for wanting to reserve his rights under his current contract. He stated he just wanted to put a reservation of rights on the new computer agreement State Farm was bringing out and requiring all agents to sign. He did that and State Farm terminated him. So it is rather ironic that this Sonoma case was about the filing of a reservation of rights. Apparently State Farm feels they can file a reservation of rights but they terminate any agent who would think they should be able to do the same.
We brought in 3 agents (current and former as examples) who testified they would most likely have supported the Pyorre-Wier Case and in fact were currently supporting the litigation now as it was important to all captive agents. I would like to thank them for stepping forward.
We then had our expert witness testify ( he has his law degree and has been an expert in about 34,000 cases). He testified he will testify for either companies or individuals but if he feels there is any question he will insist on a second opinion. He also testified about State Farm’s claim manual and read from it and stated they had committed bad faith by filing the Buss reservation so late and only 5 days from the trial. State Farm, as they usually do, claimed this claim manual was trade secret and no one else but one attorney and our expert could read from it. They also did not produce it until the lunch break after which time the claims manual was to be discussed. These are some of the secret words that were read aloud in court from this holy grail: “Be fair and be open and carry out good faith” ; “Reservation of rights” ; “The right must indeed be reserved” ; “There must be a timely and expressed reservation of rights” and “there must be proper claims handling procedures”. Our expert stated State Farm failed to timely reserve their rights and thus had committed bad faith.
State Farm then cross examined our expert and asked him if he had ever worked for State Farm. He said he had but he no longer does because State Farm had approached him and said if he was going to work for them he would no longer be able to represent policyholders. He said he told State Farm then he would no longer work for them. Then State Farm’s attorney asked him if he had ever been sued by State Farm and he said he didn’t recall. State Farm then brought out some litigation document and stated he had been sued by State Farm in 1994 for theft of trade secrets. He said he had no recollection of that and State Farm apparently thought that was some sort of gotcha because they were all smiles for a minute. Then that was it no more mention of a litigation with our expert. Then the expert went on to explain why State Farm had violated their own claims procedures and thus committed bad faith. During our closing arguments our attorneys pointed out that it seems whenever anyone challenges State Farm they accuse them of trade secret violations and just as in our case nothing had been proven about our witness other than State Farm didn’t like him testifying against them.
Attorney Bill Tedards then testified that our case was being watched by most captive agents organizations and was supported by them. He testified his specialty of law is abuse of power cases and the Mendocino case was certainly one where State Farm was abusing their power. He explained how State Farm uses the bogus trade secret issue to keep former agents from keeping in contact with their former policyholders and thus depriving policyholders of finding out about better buys in insurance.
State Farm then brought in two rebuttal witnesses, an expert and the attorney who had given them the legal opinion they could file the Buss reservation later in the case.
State Farm’s expert said he had his bachelors degree and was a Vice President of claims for California Casualty. He said he had been an expert witness in 12 cases, 2 of them involving State Farm. He also said his company told him if he was going to be an expert witness he could only testify on behalf of insurance companies. He also stated that State Farm, or any insurance company for that matter, could do anything they wanted too.
On cross examination the expert also admitted his company, while he was the Vice President of claims, had been sued numerous times for bad faith. He admitted the courts had severely reprimanded his company for a bad faith action and stated “we all learn from these types of things”.
The attorney who gave State Farm the opinion they could file the Buss reservation just before the start of trial was the final rebuttal witness for State Farm. He testified he had about 38 years of legal practice and insurance law was his specialty. He testified he gave State Farm his opinion and then requested another opinion from another firm about 4 months after the Buss reservation was filed. In that request for the second opinion it was pointed out that he had asked the other attorney to speak with him before he put anything in writing.
The attorney also stated that we had never written him a letter or contacted him in any way to try and work out the concerns we had. Our attorney asked him if he would have made any changes to what he had recommended if we had and he said no. Our attorney also asked him if he was aware we had filed a bad faith complaint in objection to State Farm’s filing of the first reservation of rights as well as the Buss reservation and he said he was not. Our attorney then told him is was not our fault that State Farm had not kept him apprised of this.
The case was then closed and final arguments were given to the jury.
State Farm’s attorney tried to sell the idea State Farm was being nice to us by paying our defense costs and not asking for the entire $2,000,000 back. He also made the statement “we weren’t trying to screw these guys”. The State Farm attorney had also insinuated throughout the trial that we were always filing lawsuits but in his closing he made the costly remark of saying “every time State Farm filed a lawsuit against them they filed one back”.
Our attorneys pointed out that the Mendocino case was over “alleged trade secrets” that have yet to be proven after ten and a half years. They also pointed out that originally in the case in Mendocino State Farm was suing us for approximately $50,000 but through the first trial ending in 2002 State Farm had expended Millions of dollars and they continue to do so. It was also pointed out that the damages in the Mendocino Case have now been withdrawn in an effort to get away from a jury. So now State Farm is continuing to spend millions of dollars pursuing this litigation and they claim to have no money damages! It was also made known that State Farm had tried to get the FBI to prosecute us under the Economic Espionage Act of 1996. This is a criminal statute and involves huge fines and time in prison.
The case then went to the jury and after approximately 8 days of trial they returned a verdict in about an hour and forty minutes. Their verdict was we owed nothing to State Farm. Because of the way this litigation was set up the jury was only instructed to decide if we owed anything to State Farm and no damages to us were considered.
The Mendocino Case is still continuing.
This is no surprise to me. in 1994, after the CA.Earthquake, Farmers through 250 Career Agents under the Train; demanding agents pay back advanced commissions while at the same time agents not had no P&C product to sell to meet the program requirements due to what became a 3 year moritorium on P&C products. The agent/company contract had no provision for such an event. So, of course Farmers took the greedy path and ruined 250 agents’ lives. Farmers is thee biggest ***** in the business. I recommend no one become a Farmers Agent today. If you don’t have 10 years with them now, you have a 1 in 100 chance of succeeding with them. Don’t kid yourself that YOU are “That One”. You will sell just enough to starve, then, when your’e broke, they will kiss you good bye and assign your accounts to their 20-30 Year Agents. This is their actual Game Plan. You succeeding is NOT THEIR PLAN.
I don’t believe State Farm allows Right of First Refusal. I think Farmers allows their agents to write business with other carriers but I don’t think State Farm or Allstate allow that. And I don’t believe anything that came out of these lawsuits changed that.
What many captive agents don’t seem to realize is that ALL CARRIERS WANT PROFITABLE BUSINESS. I know the grass looks greener to these poor Captive guys and gals but the Independent Agency System is not a dumping ground for unprofitable and hard to place business. We may have access to more non standard and MGA markets but we still must produce a profitable book of business for our carriers if we want to stay in business. We still have to underwrite! We’re still accountable for our loss ratios.
So when I read frustrated Captive agents bemoaning their inability to place business elsewhere, I’m baffled. The job is still the job and I think it’s a darn good one.
This is why I’ve always questioned why anyone in their right mind would sign a contact with one of the captives. Seriously, any captives please chime in. It’s as one sided as a credit card agreement!
So from what I read, it is AOK for a “captive” State Farm agent to open an INDEPENDENT AGENCY “on the side”. The INDEPENDENT AGENCY “on the side” doesn’t even have to be owned by YOUR WIFE, YOUR SON INLAW, A “PARTNER”, etc. Then…EVERY STATE FARM AGENT should open or have an INDEPENDENT “on the side” just waiting to ROLL THAT AUTO AND HOMEOWNERS BUSINESS over to, you know, like after retirement or when the “underwriting” gets a bit tough, like in the coastal states. Use the STATE FARM SIGN to get the customer in, and then write the business with the Independent. Heck, I bet even LIFE INSURANCE is much easier to write through an independent agency rather than State Farm.
Here’s the proof…
Attorney Bill Tedards then testified that our case was being watched by most captive agents organizations and was supported by them. He testified his specialty of law is abuse of power cases and the Mendocino case was certainly one where State Farm was abusing their power. He explained how State Farm uses the bogus trade secret issue to keep former agents from keeping in contact with their former policyholders and thus depriving policyholders of finding out about better buys in insurance….
So now State Farm is continuing to spend millions of dollars pursuing this litigation and they claim to have no money damages! It was also made known that State Farm had tried to get the FBI to prosecute us under the Economic Espionage Act of 1996. This is a criminal statute and involves huge fines and time in prison.
The case then went to the jury and after approximately 8 days of trial they returned a verdict in about an hour and forty minutes. Their verdict was we owed nothing to State Farm. Because of the way this litigation was set up the jury was only instructed to decide if we owed anything to State Farm and no damages to us were considered.
The Mendocino Case is still continuing….
So, I wonder if corporate State Farm will start charging a FEE for the LOGO AND SIGN so that EVERY INDEPENDENT AGENT can rent it then HANG IT from the wall of their independent agency to lure the customer in with the notion of State Farm Insurance, and then write it with a “better buy” company, or for that matter… HIGHER COMMISSION with less “strings attached”. SIGN ME UP!
Mr. Solvent,
You are You are INCORRECT! Running a CAPTIVE State Farm Agency is only one half of the opportunity. The other half is opening the INDEPENDENT on the side to WRITE & ROLL as much STATE FARM SIGN and LOGO and ADVERTISING generated business as possible, over to. I bet twice the business is written with the INDEPENDENT AGENCIES that the State Farm agents own versus what they give to The Farm and 100% of the customer interest is generated from the STATE FARM SIGN and ADVERTISING. It is the best of BOTH worlds STATE FARM advertising and customer name recognition PLUS ability to write the business more competitively and flexibly via the INDEPENDENT AGENCY on the side. I bet many State Farm agents already have their entire books of business copied and will or are rolling that business over to their independent agencies. I know if I were a State Farm Agent, in light of how CRUEL corporate is to their poor agents, I would have no compunction whatsoever in running an INDEPENDENT AGENCY ON THE SIDE for my own protection. Corporations like STATE FARM can be so cruel so… STICK IT TO THE FARM BEFORE THEY STICK IT TO YOU!
thanks for the complete “rest of the story”. I hope this works out well for you…I for one am still amazed that State Farm AND Farmers are not concerned about the bad PR they get by doing these things….some good neighbor!
you don’t fool me with that “rebuttal” sure you’re not on their payroll?
Don’t ever expect to get a balance in either the article or the postings here. Or even facts here. I won’t defend SF since I have no interest in the whole mess, but just don’t take any of this as fact. Even the so called factual cut and paste stuff can be faked. Decide for yourself, don’t listen to the haters of various companies. Now the usual suspects can attack me as defending SF, which I certainly am not. Some posters believe you should always be entitled to their opinion.
Dear Nobody,
So you DONT think it is OK for a CAPTIVE STATE FARM AGENT to open an INDEPENDENT AGENCY ON THE SIDE? I wish we could get this straight for all State Farm agents to understand once and for all. IS IT OK FOR A CAPTIVE STATE FARM AGENT to have direct ties, close interest or direct interest in an INDEPENDENT AGENCY ON THE SIDE. Perhaps someone form CORPORATE STATE FARM is monitoring or perhaps an AFO could respond with their possition, CAN I HAVE MY CAKE AND EAT IT TOO? CAN I OWN AN INDEPENDENT AGENCY ON THE SIDE? Well, it will actually be my wife, but does it need to be my wife, lets just be honest and above board. ALL STATE FARM AGENTS NEED DIRECTION ON THIS not just the restricted COASTAL SF agents. THERE IS MORE THAN GOOD REASON FOR EVERY STATE FARM AGENT TO OWN AN INDEPENDENT ON THE SIDE. Question is, IS IT A BREACH OF CAPTIVE CONTRACT and will you 4521/transfer accounts to the remaining LOYAL SF agents and leave me with NOTHING but my XDATES to fight for.
INFORMATION IS POWER! Did Rich Pyorre really win the CONTRACTUAL BATTLE?
If anyone has any doubt about what I have posted they can obtain the transcripts of the court proceedings. It is Case #CGC234700, Superior Court State of California, County of Sonoma.
This case was about State Farm wanting to recover defense costs they had to pay for a litigation they created. State Farm paid about $2,000,000 for our defense and was trying to collect much of that back. State Farm also paid about $4,000,000 for their portion of the case. Their original claim for damages was about $50,000. So they paid $6,000,000 to try to recover $50,000. If anyone can’t see how dumb that is then they probably won’t understand much of anything.
Since that time State Farm has hired more than 5 law firms so you can imagine the additional amount of money they have thrown into this.
Now in an effort to get away from a jury in the trade secret litigation State Farm has told the court they have no monatary damages! So they are no longer even asking for $50,000.
In 10 and a half years they have not proven their case, although we did get a jury verdict in our favor of $12,600,000. However approximately 5 months after the trial the judge ruled “the jury might have been confused” and ordered a new trial.
While this was going on State Farm filed the Sonoma litigation and quit paying our defense costs in an attempt to wreck us financially.
Once again in this Sonoma Case a jury saw what was really happening and came to the right conclusion.
Rich,
I’m not saying that I am a State Farm agent, but if I were, would your winning case effectively allow me, the State Farm Agent, to open and own an INDEPENDENT AGENCY on the side and use all of those TRADE SECRET EXPIRATION DATES supossedly OWNED BY STATE FARM,to ROLL and INSURE the State Farm Client Base through my INDEPENDENT AGENCY. The way I read your winning case is that there are NO TRADE SECRETS when it comes to STATE FARM CLIENTS if I can provide a BETTER INSURANCE OFFERING through my INDEPENDENT AGENCY and that’s all I want to do. I like the STATE FARM name recognition, but if underwriting says no, or the price is less with my indepdent, I wan’t to steer the client to my independent agency. State Farm shouldn’t prohibit me from doing that and your winning case may be the precedent setting case to NULLIFY ANY POTENTIAL BREACH OF CONTRACT.
Thanks for your input.
The Infidel
Wow, you actually didn’t read a single word I said. Impressive.
Hey NOBODY…
Thanks for reminding me that this entire “comment” thing is ALL BS. As are, in our opinion I’m sure, most of the reprinted articles… Kind of makes me want to just watch TABLOID TV or READ A RAG MAG instead.
I was just trying to determine, amidst the fine, honest and helpful readership… if anyone associated with STATE FARM AGENCY might confirm if operating and INDEPENDENT AGENCY on the side, to potentially ROLL allof an existing book of State Farm AUTO, HOME, LIFE business is a BREACH OF CONTRACT or… perhaps now it is OK for State Farm Agents to operate INDEPENDENT AGECIES as well.
Hopefully, the person that answers will answer honestly to the best of their ability and not continue this, what you allude to as… A CHARADE OF BS.
Thanks for the reality check NOBODY. I didn’t realize I had my rose colored glasses on.
Mr. Naivety
Lets not fight and as for the suggestions. Leave it be. Survival of the fitest. If poor SF Agent wants to sit on his thumb and hope for the best let them be. Now being proactive and worring about nurmero uno… This is called evolution. Us Cheetahs will take over the market and the FARMERS, ALLSTATE & STATE FARM will be Financial advisors tring to loan you $$. NONE FDIC and be scared to keep you money with them. They will be attempting to run their one man enterprises out of the garage or industrial complex. SO…point being lets leave them with their brown thumb and allow them to continue to hibrenate annually. Good Day Mates!
The issue in the case SF just lost is simple, they must pay for the defense of their policyholders being sued, even if it is SF doing the suing, and that they can’t try to sneak in a technicality to try to starve the defendants case.
As I read it, the trade secret issue is still pending. Further, guaranteed that SF would take serious issue with any agent facilitating the transfer of business to another agency or company.
What should be of grave concern to anyone is that SF appears to have (once again) lied on the stand. Also, it appears that they (once again) were guilty of grievous bad faith. Not to mention their deplorable actions which gave rise to this whole situation to begin with. But those are topics for another day.
What also should NOT go without notice is the courage and fortitude that Mr. Pyorre and Mr. Weir have shown to go this far against the biggest beast on the block.
It is my understanding that, early on, they could have settled this whole matter for quite a healthy sum and spared themselves a decade of headaches and heartbreaks but that they chose to go forward on principle to do what is right. I have long felt that the true measure of a man is not when he stands on principle when it benefits him, but rather when it imperils him. So bravo to the noble gentlemen from NoCal!
Dear X SF Agent,
Too bad you had to give up your State Farm Sign/Agency. Today there is a better and BRIGHTER way, when you don’t agree with State Farm. Open an INDEPENDENT AGENCY on the side. Many State Farm Agents opened independents: just down the hall, next door, up stairs… It’s great. Let the State Farm Sign bring in the cusomers and write them through your independent agency down the hall. Also, save your State Farm XDates and roll all that auto, home and life business over to the indepenent if things really get bad. Do it before corporate starts to transfer the accounts to the “house” or other SF Agents. It’s the greatest “insurance gig” in the country and corporate State Farm condones it. In fact, I view it as heavy bargaining power and leverage with my AFO. It’s great to have my cake and eat it too. Required meetings, production quotas… HA! Not for me, I’ll roll even more State Farm business to my independent. If you’re a State Farm agent, ANYWHERE IN THE COUNTRY not just coastal agents, and you haven’t opened up your own INDEPENDENT ON THE SIDE, you are truly behind the times and missing the boat. You absolutely need the protection and bargaining strength of your own independent agency on the side.
It truly is the BRIGHT WAY to be a State Farm Agent.
Mr. Icing.
State Farm treats its policyholders as bad as it does its agents.
Given its history, State Farm cultivates justices on the appeals courts (not the lower courts where a jury actually issues a verdict) and usually prevails.
I am delighted to learn State Farm had its head handed to ’em on this case and hope other plaintiffs are able to taste the justice the two agents in this case tasted.
I only wish insurance commissioners from across the country would throw out the anti-concurrent clause State Farm lobbied so hard to add to policies. It is a glaring reminder of how cheaply regulators are bought and the depth of State Farm’s influence.
I wouldn’t take a State Farm policy if it was given to me.
Ahhh, the stories I could tell about being a State Farm Agent… I’m glad to see that they have to have some accountability for their actions. Not the most ethical company, backdoor deals, different set of rules for different people, different standards, discrimination, games, games, games! All I can say is I’m glad I’m outta there! Much happier that I left!
State Farm is sad and filled with woe
Edward Rust is no longer CEO
He had knowledge, but wasn’t in the know
The Board said it was time for him to go
All American Girl starred Margaret Cho
The Miami Heat coach is nicknamed Spo
I hate to paddle & don’t like to row
Edward Rust is no longer CEO
The Board said it was time for him to go
The word souffler is French for blow
I love the rain but dislike the snow
Ten tosses for a nickel or a penny a throw
State Farm is sad and filled with woe
Edward Rust is no longer CEO
Bambi’s mom was a fawn who became a doe
You can’t line up if you don’t get in a row
My car isn’t running, “Give me a tow”
He had knowledge but wasn’t in the know
The Board said it was time for him to go
Plant a seed and water it to make it grow
Phases of the tide are ebb and flow
If you head isn’t hairy you don’t have a fro
You can buff your bald head to make it glow
State Farm is sad and filled with woe
Edward Rust is no longer CEO
I like Mike Tyson more than Riddick Bowe
A mug of coffee is a cup of joe
You can call me brother, but don’t call me bro
When I sing scat I sound like Al Jarreau
State Farm is sad and filled with woe
The Board said it was time for him to go
A former Tigers pitcher was Lerrin LaGrow
Ursula Andress was a Bond girl in Dr. No
Brian Benben is married to Madeline Stowe
Betsy Ross couldn’t knit but she sure could sew
He had knowledge but wasn’t in the know
Edward Rust is no longer CEO
Grand Funk toured with David Allan Coe
I said to Shoeless Joe, “Say it ain’t so”
Brandon Lee died during the filming of The Crow
In 1992 I didn’t vote for Ross Perot
State Farm is sad and filled with woe
The Board said it was time for him to go
A hare is fast and a tortoise is slow
The overhead compartment is for luggage to stow
Beware from above but look out below
I’m gaining momentum, I’ve got big mo
He had knowledge but wasn’t in the know
Edward Rust is no longer CEO
I’ve travelled far but have miles to go
My insurance company thinks I’m their ho
I’m not their friend but I am their foe
Robin Hood had arrows, a quiver and a bow
State Farm has a lame duck CEO
He had knowledge, but wasn’t in the know
The Board said it was time for him to go
State Farm is sad and filled with woe
Most captive companies grossly break the laws and contracts. I was a 20 year victim.