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. 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

State Bar No. 08417650 

mgreer@adjtlaw.com

ALEXANDER DUBOSE JEFFERSON &

TOWNSEND LLP

515 Congress Ave., Suite 2350 

Austin, Texas 78701 

Telephone: 512-482-9300 

Telecopier: 512-482-9303 

M. Scott Incerto 

State Bar No. 10388950 

scott.incerto@nortonrosefulbright.com 

NORTON ROSE FULBRIGHT US LLP

98 San Jacinto Blvd., Suite 1100 

Austin, Texas 78701 

Telephone: 512-474-5201 

Telecopier: 512-536-4598 

COUNSEL FOR DEFENDANTS-APPELLEES 

THE FARMERS PARTIES

Joshua R. Godbey 

State Bar No. 24049996 

joshua.godbey@texasattorneygeneral.gov 

Ryan S. Mindell 

State Bar No. 24089707 

ryan.mindell@texasattorneygeneral.gov 

Jennifer S. Jackson 

State Bar No. 24060004 

jennifer.jackson@texasattorneygeneral.gov 

OFFICE OF THE ATTORNEY GENERAL

P.O. Box 12548 

Austin, Texas 78711-2548 

Telephone: (512) 475-4209 

Fax: (512) 477-2348)

COUNSEL FOR PLAINTIFFS-APPELLEES, THE 

STATE OF TEXAS, THE TEXAS DEPARTMENT 

OF INSURANCE, AND THE TEXAS 

COMMISSIONER OF INSURANCE

ACCEPTED

03-15-00436-CV

6130524

THIRD COURT OF APPEALS

AUSTIN, TEXAS

7/20/2015 10:23:30 AM

JEFFREY D. KYLE

CLERK

 FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 7/20/2015 10:23:30 AM JEFFREY D. KYLE Clerk
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 Parties1

(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
2 

certification language to the Order, and Grigson’s counsel acknowledged on the 

record that the Order, which the district court proceeded to enter, would “not have 

a separate certification or refusal to certify.”2

 There is, in short, no basis for an 

interlocutory appeal in this case.

Grigson’s baseless “appeal” is merely a pretext for additional delay of the 

resolution of a case that was first settled more than a decade ago, but as to which 

the absent class members have still not been provided notice or an opportunity to 

be heard. Indeed, he has now filed an Emergency Motion to Stay the sending of 

class notice, asking this Court to prevent the Settling Parties from providing notice 

to those class members for an additional, indefinite period of time. This is the 

same delay tactic that Appellant’s counsel used twelve years ago, which has had 

the effect of keeping the class members from having court-ordered notice of the 

settlement since 2003. Rather than permitting all class members to have equal 

access to information about the settlement and an opportunity to be heard, 

Appellant has thus far manipulated court processes to insulate his sole and absolute 

 

2 This admission of the obvious is particularly striking in light of the Emergency Motion to Stay 

the Sending of Class Notice that Grigson filed with this Court on July 16, 2015, in which he now 

tries to take the exact opposite position. In that motion, Grigson’s first substantive sentence is 

that “[t]his is an interlocutory appeal of an order entered on July 6, 2015 certifying a settlement 

class action.” See Motion to Stay at 2 ¶ 1. This statement—when considered in light of (1) the 

actual language of the Preliminary Approval Order, (2) the decisions affirming class certification 

in this case by both the Texas Supreme Court and this Court, and (3) Grigson’s counsel’s own 

words to the district court—can most charitably be described as flatly untrue. 
3 

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 FACTS3

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. 
4 

passage of time and address some concerns raised by the district court and again 

sought preliminary approval—this time of the Second Amended Settlement 

Agreement and Stipulation, as supplemented (“Settlement Agreement”). 

Significantly, the Settlement Agreement did not revise or alter in any way the 

defined class of beneficiaries of the settlement, and the classes certified in 2003 

thus remain unchanged. Compare Ex. 1 at 2-3 ¶ 2, Order of Preliminary Approval 

(July 6, 2015), with Ex. 2 at 2-3 ¶ 2, Order of Preliminary Approval (June 27, 

2003).

Grigson, represented by counsel for an earlier intervenor, Jan Lubin, 

intervened in this case and objected to the current Settlement Agreement.

5

 After a 

two-day evidentiary hearing, the district court preliminarily approved the 

Settlement Agreement. In its July 6, 2015, Order of Preliminary Approval

(“Preliminary Approval Order”), the district court expressly stated that it had 

“previously certified” the settlement classes at issue and that its earlier certification 

decision had “been affirmed in its entirety by the appellate courts of Texas.” Ex. 1 

at 2-3 ¶ 2, Preliminary Approval Order (July 6, 2015). 

 

4 See Farmers Grp., Inc. v. Lubin, 222 S.W.3d 417, 420, 427-28 (Tex. 2007); Lubin v. Farmers 

Grp., Inc., No. 03-03-00374-CV, 2009 WL 3682602, at *26-32 (Tex. App.—Austin Nov. 6, 

2009, no pet.). 

5 Several other individuals also intervened (Michael J. Woods and Gerald and Lesly Hooks) but 

they have not filed a notice of appeal to date.
5 

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 
6 

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., 
7 

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 
8 

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). 
9 

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 
10

Lack of Appellate Jurisdiction; (iii) dismiss this appeal; and (iv) grant such other 

and further relief to which the Appellees are entitled.
11

Date: July 20, 2015 Respectfully submitted,

/s/ M. Scott Incerto

Marcy Hogan Greer 

State Bar No. 08417650 

mgreer@adjtlaw.com 

ALEXANDER DUBOSE JEFFERSON & TOWNSEND LLP 

515 Congress Avenue, Suite 2350 

Austin, Texas 78701-3562 

Telephone: (512) 482-9300 

Facsimile: (512) 482-9303 

M. Scott Incerto 

State Bar No. 10388950 

scott.incerto@nortonrosefulbright.com 

NORTON ROSE FULBRIGHT US LLP 

98 San Jacinto Blvd., Suite 1100 

Austin, Texas 78701 

Telephone: 512-474-5201 

Telecopier: 512-536-4598 

Darryl W. Anderson

State Bar No. 24008694 

darryl.anderason@nortonrosefulbright.com 

Geraldine W. Young 

State Bar No. 24084134 

geraldine.young@nortonrosefulbright.com 

NORTON ROSE FULBRIGHT US LLP 

1301 McKinney, Suite 5100

Houston, Texas 77010 3095 

Telephone: 713 651 5151 

Telecopier: 713 651 5246 

ATTORNEYS FOR DEFENDANTS-APPELLEES FIRE 

UNDERWRITERS ASSOCIATION, FARMERS GROUP,

INC., FARMERS UNDERWRITERS ASSOCIATION,

FARMERS INSURANCE EXCHANGE, FIRE INSURANCE 

EXCHANGE, TEXAS FARMERS INSURANCE COMPANY,

MID-CENTURY INSURANCE COMPANY OF TEXAS,

MID-CENTURY INSURANCE COMPANY, FARMERS 

TEXAS COUNTY MUTUAL INSURANCE COMPANY,

TRUCK INSURANCE EXCHANGE, AND TRUCK 

UNDERWRITERS ASSOCIATION
12

Respectfully submitted,

KEN PAXTON 

Attorney General of Texas 

CHARLES E. ROY 

First Assistant Attorney General 

JAMES E. DAVIS 

Deputy Attorney General for Civil Litigation 

ROBERT O’KEEFE

Division Chief

Financial Litigation, Tax, and Charitable Trusts Division 

 /s/ Joshua R. Godbey 

JOSHUA R. GODBEY 

Assistant Attorney General 

LEAD ATTORNEY 

State Bar No. 24049996 

Telephone: (512) 475-4209 

joshua.godbey@texasattorneygeneral.gov 

RYAN S. MINDELL 

Assistant Attorney General

State Bar No. 24089707 

Telephone: (512) 936-1721 

ryan.mindell@texasattorneygeneral.gov 

JENNIFER S. JACKSON 

Assistant Attorney General

State Bar No. 24060004 

Telephone: (512) 463-9917 

jennifer.jackson@texasattorneygeneral.gov 

Financial Litigation, Tax, and Charitable Trusts Division 

P.O. Box 12548 

Austin, Texas 78711-2548 

Fax: (512) 477-2348) 

ATTORNEYS FOR PLAINTIFFS-APPELLEES, THE STATE 

OF TEXAS, THE TEXAS DEPARTMENT OF INSURANCE,

AND THE TEXAS COMMISSIONER OF INSURANCE

 
13

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

Philip K. Maxwell

1609 Shoal Creek Blvd. # 100

Austin, TX 78701

Joe@JoeLongley.com

phil@philmaxwell.com

Counsel for Appellant Charles O. 

“Chuck” Grigson

Michael J. Woods

8620 N. New Braunfels, Ste. 522

San Antonio, TX 78217

MichaelJWoods@sbcglobal.net

Pro Se Intervenor/Objector 

Joseph C. Blanks

P.O. Box 999

Doucette, TX 75942

blanxlex@gmail.com

Counsel for Intervenor Gerald and 

Lesly Hooks

/s/ M. Scott Incerto

M. Scott Incerto
14

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
15

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

Exhibit 2

Exhibit 3

July 6, 2015, Order of Preliminary Approval (certified)

June 27, 2003, Order of Preliminary Approval (certified)

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. GV202501 Velva L. Price, District Clerk 

THE STATE OF TEXAS, THE TEXAS 

DEPARTMENT OF INSURANCE, and 

THE TEXAS COMMISSIONER OF 

INSURANCE, 

Plaintiffs, 

v. 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

FARMERS GROUP, INC., FARMERS § 

UNDERWRITERS ASSOCIATION, FIRE § 

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, 

Defendants. 

IN THE DISTRICT COURT 

OF TRAVIS COUNTY, TEXAS 

261ST JUDICIAL DISTRICT 

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, 

lllllll lllll lllll lllllllllllllllllllllllllllllllll\1111 

004103926 
DC BK15188 PG63 

Farmers Insurance Exchange, Fire Insurance Exchange, Texas Farmers Insurance Company, 

Mid-Century Insurance Company of Texas, Mid-Century Insurance Company, Farmers Texas 

County Mutual Insurance Company, Truck Insurance Exchange, and Truck Underwriters 

Association (collectively, the "Farmers Parties"). The State and the Farmers Parties have moved 

jointly, pursuant to Texas Rule of Civil Procedure Rule 42(e) and Texas Insurance Code 

§ 541.266, for an Order of Preliminary Approval ("Order") (I) preliminarily approving the 

settlement of all claims asserted in the above-captioned cause ("Action"), the terms of which are 

set forth in the Second Amended Settlement Agreement, which has been filed with the Clerk of 

the Court, and (2) approving the proposed notice to the Classes. 

The Court having read and considered the Second Amended Settlement Agreement and 

attached exhibits, including the proposed Notice of Proposed Class Settlement, the proposed 

Claim Form, the proposed form of Final Judgment, exhibits, pleadings and record in this case, 

the evidence and other materials presented at the hearing, and argument of counsel and 

applicable authorities, finds that there exists substantial and suf1icient grounds for entering this 

Order. 

IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED THAT: 

I. The Court, for purposes of this Order, adopts all defined terms as set forth in the 

Settlement Agreement. 

2. The Court has previously certified, only for purposes of effectuating the 

Settlement Agreement, the following Settlement Classes ("Settlement Classes"): 

(i) All of the Exchanges' Texas homeowners insurance policyholders 

(a) whose homeowners insurance policy incepted (including renewals) 

from December 28, 200 1, through and including December 27, 2002, or 

(b) who received a notice at any time after November 14, 2001, that their 

HO-B policy would not be renewed ("Rate Class"); 

2 
DC BK15188 PG64 

(ii) All of the Exchanges' Texas homeowners insurance policyholders who 

according to Farmers' records were eligible to receive discounts for 

FPRA, age of home, or territory from November 16, 2000, through and 

including December 10, 2002 ("Discount Class"); and 

(iii) All Texas homeowners or automobile insurance policyholders of the 

Exchanges or the Automobile Insurance Providers who according to 

Farmers' records were provided or should have been provided a Credit 

Usage Notice from October 1, 1999, through February 28, 2003 ("Credit 

Usage Notice Class") 

That certification decision has been affirmed in its entirety by the appellate courts of Texas. 

Farmers Grp .. Inc. v. Lubin, 222 S.W.3d 417, 420, 427-28 (Tex. 2007) (holding that "the 

standard class action requirements must be applied generally to the claims asserted by Attorney 

General, not the Attorney General himself," and directing court of appeals to address 

intervenors' remaining points of error on remand); Lubin v. Farmers Grp .. Inc., No. 03-03-

00374-CV, 2009 WL 3682602, at *26-32 (Tex. App.-Austin Nov. 6, 2009, no pet.) (overruling 

intervenors' other objections to certification). 

5. The Court further finds that at no time during the course of this litigation has there 

been any collusion whatsoever between the State and the Farmers Parties with respect to 

negotiating the Settlement Agreement and that the State has represented, and will continue to 

represent, the interests of the Farmers' policyholders fairly and adequately and without a conflict 

of interests. Accordingly, the Court preliminarily approves: (a) the Second Amended Settlement 

Agreement, including the terms and the releases contained in it, as being fair, just, reasonable, 

and adequate as to the Settlement Classes; and (b) the Settlement Funds described in the 

Settlement Agreement, including the Prospective Rate Reduction, Retrospective Rate Reduction, 

Individualized Discount Adjustment, Credit Usage Notice Fund, and the proposed additional 

consideration, subject to the right of any member of the Settlement Classes to exclude himself or 

herself from the Settlement Classes in accordance with the terms set forth in the Settlement 

3 
DC BK15188 PG65 

Agreement, and to show cause, if any exists, why a Final Judgment should not be entered in 

accordance with the terms of the Settlement Agreement. 

6. A hearing ("Settlement Hearing") shall be held before this Court on February I, 

2016, at 9:00 a.m. in the 53rd Judicial District Court Room: (a) to determine whether the 

proposed Second Amended Settlement Agreement is fair, reasonable, and adequate and should 

be approved, and whether the Final Judgment should be entered as to claims asserted in this 

litigation, or which could have been asserted, against the Released Parties on the merits; (b) to 

determine whether the Settlement Classes members' ri ght to adequate representation has been 

satisfied; and (c) to reserve jurisdiction to effect and enforce the Settlement Agreement. 

7. The Farmers Parties shall disseminate notice of the proposed Second Amended 

Settlement Agreement and Settlement Hearing to putative members of the Settlement Classes 

within sixty (60) days of the date of this Order. The Court approves Rust Consulting, an 

independent third-party settlement administrator, as Farmers' agent to carry out the notice 

campaign and settlement administration as approved by the Court. A copy of the Notice of 

Proposed Class Settlement ("Notice"), together with a copy of the Claim Form, substantially in 

the forms attached as Exhibits l and 2, shall be mailed by first-class U.S. mail, postage prepaid, 

to all members of the Settlement Classes at the address of each such person as set forth in the 

records of the Released Parties or as otherwise may be identified through reasonable effort, as 

more thoroughly explained in the March 28, 2014, Affidavit of Kimberly K. Ness and the May 

29, 2015, Declaration of Joel K. Botzet of Rust Consulting. In addition, commencing within 

seven (7) days of the date of this Order and continuing until the date of the Settlement Hearing, 

the Office of the Attorney General, the Texas Department of Insurance, and the Farmers Parties 

shall post on their respective Internet web-sites (www.texasattornevgeneral.gov, 

4 
DC BK15188 PG66 

www.tdi.texas.gov and www.fanners.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. 

I 0. Three (3) days before the date fixed by this Court for the Settlement Hearing, the 

State and the Farmers Parties shall cause to be filed with the Clerk of the Court affidavits or 

5 
DC BK15188 PG67 

declarations of the person or persons under whose general direction the mailing of the Notice and 

the distribution of the Summary Notice by posting on the web-sites identified in paragraph 7 

shall have been made, showing that such mailing and distribution have been made in accordance 

with this Order. 

11. Each member of the Settlement Classes will be bound by the proposed settlement 

provided for in the Settlement Agreement, and by the Final Judgment or any other determination 

by this Court affecting the Settlement Classes, unless such member shall mail, by first-class U.S. 

mail, a written request for exclusion from the Settlement Classes, post-marked no later than 

November 13, 20 15, addressed to State of Texas v. Farmers Settlement Administrator, Rust 

Consulting, Inc.; P.O. Box 9348; Minneapolis, MN, 55440-9348. Such request for exclusion 

must state: (a) the name, address and telephone number of the person seeking exclusion; 

(b) whether such person has a homeowners or automobile insurance policy from the Farmers 

Parties, or both; (c) the date of inception of such policy(ies) and the most recent date of renewal 

for such policy(ies), if available; (d) the policy number(s), if available; and (e) that the person 

making the request wishes to be excluded from the Settlement Classes. Because the Settlement 

Agreement is intended to be a resolution of all Released 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 Reduction, the Individualized Discount Adjustment, or the 

Credit Usage Notice Fund provided for in the Settlement Agreement, in the event the Settlement 

Agreement is approved by the Court. Nor will such person be permitted to participate further in 

6 
DC BK15188 PG68 

the Action. Any Class Member who does not request exclusion in the manner provided for in 

this Order may, but need not, enter an appearance in this Action at his or her own cost through 

counsel of his or her own choice. If a member of the Settlement Classes does not enter an 

appearance, that person's interests will be represented by the State in the Action. 

12. Any member of the Settlement Classes who has not requested exclusion from the 

Settlement Classes may appear at the Settlement Hearing, in person or through counsel, to object 

and be heard in opposition to any of the matters to be heard at the Settlement Hearing, including 

(a) the requested approval of the Settlement Agreement as fair, adequate, and reasonable, and/or 

(b) the requested entry of the Final Judgment. A member of the Settlement Classes cannot 

request exclusiqn from the Settlement Classes AND object to the Settlement Agreement. For 

any objection to be considered by the Court, the objector must mail a valid written objection, and 

it must be postmarked by no later than November 13, 2015. In order to be valid, the written 

objection must set forth: (a) a reference, at the top, to "State of Texas v. Farmers, Cause No. 

GY202501;" (b) a statement as to whether the objector intends to appear at the Settlement 

Hearing, either in person or through counsel; (c) a detailed statement of the specific basis for the 

objection; (d) the name that is set forth on the Notice that was sent to the objector; (e) the 

objector's current name, if different from the name set forth on the Notice; (f) the objector's 

current address; (g) the objector's current telephone number and, if available, telecopier number; 

(h) the objector's type of policy and policy number; and (i) the objector's signature or that of his 

or her authorized representative. Three copies of the written objection must be sent, the first 

addressed to the District Clerk of Travis County, Texas, I 000 Guadalupe Street, Austin, Texas 

78701, the second addressed to Joshua R. Godbey, Assistant Attorney General, Financial 

Litigation, Tax, and Charitable Trusts Division, Office of the Attorney General, P.O. Box 12548, 

7 
DC BK15188 PG69 

Austin, Texas 78711-2548, and the third addressed to M. Scott lncerto, Norton Rose Fulbright 

US LLP, 98 San Jacinto Boulevard, Suite 1100, Austin, Texas 78701. If an objection does not 

include all of the required information or if it is not timely mailed to the three correct addresses, 

then it shall be invalid, and it will not be considered by the Court. Any member of the 

Settlement Classes who does not object in the manner provided shall be deemed to have waived 

such objection and shall forever be foreclosed from making any objection to the fairness, 

adequacy, or reasonableness of the Settlement Agreement and the proposed Final Judgment. 

Any replies to such objections shall be filed by December 15, 2015. 

13. If the Court gives final approval to the Settlement Agreement and enters a final 

judgment, in order to be entitled to participate in the Credit Usage Notice Fund portion of the 

Settlement Agreement, a member of the Credit Usage Notice Class who has not requested 

exclusion from the Settlement Classes must submit a Claim Form, substantially in the form 

attached as Exhibit 2, to the Claims Administrator at the address set forth in the Notice. Such 

Claim Form must be completed and postmarked on or before April I, 2016. Any member of the 

Credit Usage Notice Class who does not submjt a completed Claim Form and follow the process 

for certifying review of his or her individual credit report as provided for in section IV(4) of the 

Settlement Agreement shall not be entitled to share in the Credit Usage Notice Fund, but 

nonetheless shall be bound by the terms of the Second Amended Settlement Agreement and by 

the Final Judgment and any other Order of this Court approving the Second Amended Settlement 

Agreement, including all releases, and shall be barred and enjoined in this or any other action 

from asserting any Released Claims. 

14. Members of the Rate and Discount Classes shall automatically receive their share 

of Settlement Funds within 30 days after the Effective Date of the Second Amended Settlement 

8 
DC BK15188 PG70 

Agreement, unless they fil e a written request for exclusion from the Settlement Classes as 

provided in paragraph II above. 

15. The Court expressly retains the power to adjourn the Settlement Hearing, without 

any further notice other than an announcement at the Settlement Hearing of adjournment, and to 

approve, modify, or disapprove the Second Amended Settlement Agreement without further 

notice to members of the Settlement Classes. The Court retains jurisdiction over this Action to 

consider all further applications arising out of or connected with the proposed settlement. 

16. The administration of the Second Amended Settlement Agreement, and the 

decision of all disputed questions of law and fact with respect to the validity of any claim or right 

of any person to participate in the distribution of the Settlement Fund, shall be under the 

authority of the Court. The Parties to this Second Amended Settlement Agreement, their counsel 

in any capacity in which they may act in implementation and fulfillment of the Settlement 

Agreement. and any employees or agents of such law firms or the Parties to the Second 

Amended Settlement Agreement (including, without limitation, those employees who may 

furnish services in connection with the proposed Settlement) shall not be liable for anything done 

or omitted in connection with the Second Amended Settlement Agreement and its administration 

except for their own willful misconduct. 

17. The Parties to the Settlement Agreement are directed to carry out their obligations 

under the Second Amended Settlement Agreement. 

18. In the event that the Second Amended Settlement Agreement is not approved by 

the Court, or the Court enters the Final Judgment and it is vacated or modified on appeal, or 

otherwise altered in a material way, or the Effective Date for any other reason does not occur, 

and if any Party to the Second Amended Settlement Agreement accordingly exerc ises its ri ght to 

9 
DC BK15188 PG71 

terminate the Settlement Agreement pursuant to its terms, then the Second Amended Settlement 

Agreement and any actions to be taken in connection with it shall be vacated and terminated and 

shall become null and void for all purposes, and all negotiations, transactions and proceedings 

connected with it (a) shall be without prejudice to the rights of any Party; (b) shall not be deemed 

or construed as evidence or an admission by any Party of any fact, matter or thing; and (c) shall 

not be admissible in evidence or used for any purpose in any subsequent proceeding in the 

Action, or any other action or proceeding in this or any other forum, judicial, administrative, or 

otherwise, except proceedings to enforce the Settlement. 

SIGNED ::r;.l,b; :2t1il_ , 2015. 

10 
DC BK15188 PG72 

Exhibit 1 
DC BK15188 PG73 

261 ST DISTRICT COURT OF T RAVIS COUNTY. T EXAS 

If You Had Certain Home or Auto Insurance in Texas, 

You May Be Eligible for Benefits from a Class Action Settlement. 

A Texas court awhorized this notice. This is not a solicitation from a lawyer. 

• You have been identified from Farmers' records as someone who had a homeowners 

or automobile insurance policy in Texas between October 1999 and February 2003. 

• A Settlement has been reached with certain Insurance Exchanges and Providers (" the 

De fendants," see Question I for a complete list) in a class action lawsuit about the 

pricing and marketing of certain homeowners and automobile insurance policies. 

Generally, the Settlement includes Texas homeowners or automobile insurance 

pol icy holders who had certain types o f insurance polic ies with the Defendants between 

October I, 1999 and February 28, 2003 (see Questions 5 & 6). 

• The Settlement provides payments to eligible policyho lders for rate reductions or 

discounts on past insurance premiums and free credit reports and payments of $35 for 

not receiving adequate notice from the De fendants about their use of credit information 

(see Question 9). 

Your legal rights a re affected even if you do nothing. Please read this notice 

carefully. 

YOUR LEGAL RIGHTS AND 0PT10NS IN THIS SEITLEMENT 

SUBMIT A CLAIM The only way to get a payment under the Credit Usage Fund (see Question 

13). 

ASK TO BE Get no benefits from the Settlement. This is the only option that a llows 

EXCLUDED you to sue the Defendants over the claims resolved by this Settlement. 

OBJECT Write to the Court if you don' t like the Settlement. 

Go TO A HEARING Ask to speak in Court about the fairness of the Settlement. 

Do NOTHING Receive payment (if eligible) as a member of the Rate Class or Discount 

Class. Do not receive payment under the credit usage fund. Give up 

rights to pursue your own lawsuit about the c la ims this Settlement 

resolves. 

• These rights and options-and the deadlines to exercise them-are explained in this 

notice. 

• The Court in charge of this case still has to decide whether to approve the Settlement. 

Payments will only be made if the Court approves the Settlement a nd after any appeals 

are resolved. Please be patient. 

QUESTIONS? C ALL 1-888-222-0691 OR VISITWWW.T EXASFARMERSS ETILEMENT.COM 

PARA UNA NOTIFICACION IN ESPANOL, LLAMAR 0 VISITAR NUESTRO WEBSITE. 
DC BK15188 PG74 

What This Notice Contains 

BASIC INFORMATION ...................................................................................................... 3 

I. Why is there a notice? 

2. What is this lawsuit about? 

3. Why is this a class action? 

4. Why is there a Settlement? 

WHO IS PART OF THE SETTLEMENT? ........................................................................... 4 

5. Who is included in the Settlement? 

6. What type of insurance policies are involved in the Settlement? 

7. What is a Credit Usage Notice? 

8. What if I am not sure whether I am included in the Settlement? 

THE SETTLEMENT BENEFITS ......................................................................................... 5 

9. What does the Settlement provide? 

I 0. What can I get from the Settlement? 

11. When wi ll! receive my payment? 

12. What am I giving up to stay in the Settlement Class? 

HOW TO GET BENEFITS .................................................................................................. 6 

13. How do I get benefits? 

EXCLUDING YOURSELF FROM THE SETTLEMENT ...................................................... 7 

14. How do I get out of the Settlement? 

15. If I do not exclude myself, can I sue the Defendants for the same thing later? 

16. If l exclude myself, can I still get benefits from this Settlement? 

17. What about other cases involving the issues in this case? 

WHO REPRESENTS ME IN THIS CASE? ........................................................................ 8 

18. Who represents 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 will the Court decide whether 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.TEXASFARMERSSETTLEMENT.COM 

- 2 -
DC BK15188 PG75 

BASIC INFORMATION 

lt. Why is there a notice? 

A Court authorized this notice because you have a right to know about a proposed Settlement of this class 

action lawsuit and about all of your options before the Court decides whether to give final approval to the 

Settlement. This notice explains the lawsuit, 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. 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. 

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, discounts, 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 offering 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 similar 

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 exclude themselves from the Class. 

I 4. Why is there a Settlement? 

The Court has not decided in favor of the Plaintiffs 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 Commissioner of Insurance. and 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 

- 3 -
DC BK15188 PG76 

WHO Is PART OF THE SETTLEMENT? 

If you received this notice addressed to you in the mail (without requesting it), then you may be a member 

of one or more Settlement Classes. But even if you did not receive a notice, you may be a Class Member, 

as described below. 

I 5. Who is included in the Settlement? 

The Settlement includes three Classes. 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 renewed) 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, according to Defendants' records, you are 

Discount Class Homeowners policy eligible under the Settlement to receive recalculated 

discounts on your premiums from November 16, 2000 

through December I 0, 2002. 

Policy where, according to Defendants' records, you 

Credit Usage Homeowners or were provided or should have been provided a Credit 

Notice Class automobile insurance Usage Notice 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 endorsement), HO-B-CON, and HO-B-T, and all endorsements approved by 

TDI for use with such forms during the time 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" under the Fair Credit Reporting 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), Credit Usage Notice Class Members will have the 

opportunity to access and review a copy of their credit reports. 

QUESTIONS? CALL 1-888-222-0691 OR VISIT WWW.TEXASFARMERSSETTLEMENT.COM 

- 4-
DC BK15188 PG77 

I 8. What if I am not sure whether I am included in the Settlement? 

If you are not sure whether you are included in the Settlement, you may call 1-888-222-0691 with questions 

or visit 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 will 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 for rate reductions on No, payments for rate reductions 

HO-A premiums (amounts will will be automatic for all eligible 

vary). Rate Class Members. 

Discount Class Compensation for eligible Class No, payments to eligible 

Members based on negotiated Discount Class Members will be 

discounts (amounts wi ll vary). automatic. 

Credit 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 

automobile 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 

- 5 -
DC BK15188 PG78 

I 11. Wbeo will I receive my payment? 

Class Members who are entitled to payments will receive them after the Court grants final approval to the 

Settlement and after any appeals are resolved (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 will 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 giving 

up against the Defendants are described in Section I of the Settlement Agreement. You will be " releasing" 

the Defendants and all related people as described in Section I of the Settlement Agreement. The Settlement 

Agreement is available 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 policyholders or the TDI. 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 relating to homeowners' insurance 

requesting a non-monetary judicial statement that Farmers acted improperly in not renewing HOB policies for the class members, as was certified for a class action in the 172nd District Court of 

Jefferson County, Texas. 

• State ofTexas v. Texas Farmers insurance Company. No. GV000271-a class action relating to 

automobile insurance in the 2001

h 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 Class or Discount Class 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 calling 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 

- 6 -
DC BK15188 PG79 

EXCLUDING YOURSELF FROM THE SETTLEMENT 

If you don' t want benefits from this Settlement. and you want to keep the right to sue the Defendants about 

the issues in this case. then you must take steps to get out of the Settlement. This is called excluding 

yourself-or it is sometimes referred to as ·'opting out" of the Classes. 

lt4. 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 excluded 

from the Settlement in State of Texas v. Farmers Group. Inc., No. GY20250 I. Your request must include: 

• Your name. address, and telephone number; 

• Whether you have or had a homeowners or automobile insurance policy from the Defendants. 

or both; 

• The date the policy(ies) began and the most recent date of renewal (if known); 

• The policy number(s); and 

• Your signature. 

You must mail 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 email, 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 give up the right to sue the Defendants for 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 benefits provided if you exclude yourself from the Settlement. However, if you 

renewed an HO-A homeowners policy with 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 credit usage, including: 

• 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 District Court in Jefferson County, Texas 

(the "Geter Action"); and 

• In re: Farmers Insurance Co .. Inc. FCRA Litigation, No. C1V-03- 158-F, a nationwide class that 

includes all cases consolidated and coordinated in MDL No. 1564 in the U.S. District Court for the 

Western District of Ok lahoma (otlen referred to as the "Mobbs Action"). 

QUESTIONS? CALL 1-888-222-0691 OR VISIT WWW. TEXASFARMERSSETILEMENT.COM 

- 7 -
DC BK15188 PG80 

If you were a Class Member in the Fogel Action, you are eligible to participate in this Settlement as well. 

If you do not exclude yourself from this Settlement, you can receive benefits here and also participate in 

the Geter Action by seeking a judicial statement that Farmers acted improperly in not renewing HO-B 

homeowners policies to the class members. However, except as provided in the Settlement Agreement, 

you will give up all other claims, including any claims for monetary damages, related to the Geter Action. 

If you filed a claim in the Mobbs Action (which was also FCRA-related), you are eligible to participate in 

the Rate Class and Discount Class benefits, but you are not eligible to receive a payment under the Credit 

Usage Fund. 

WHO REPRESENTS ME IN THIS CASE? 

Ita. Who represents my interests in this case? 

Your interests will be represented by the State of Texas through the Office of the Attorney General. You 

will not be charged for their services. By law, the Office of the Attorney General cannot represent you 

individually. If you want to be represented individually by your own lawyer, you are free to hire one at 

your own expense. You may write with any questions you may have about the information in this Notice 

to: 

Office of the Attorney General 

Consumer Protection Division 

P.O. Box 12548 

Austin. TX 78711-2548 

OBJECTING To THE SETTLEMENT 

lt9. Bow do I teD the Court if I do not Uke the Settlemeat1 

If you are a member of the Settlement Classes (and do not exclude yourself), you can object to any part of 

the Settlement or the Settlement as a whole. To object, you must mail a letter that includes the following: 

• A reference at the top to: State ofTexas v. Farmers Group, Inc., No. GV20250l; 

• Whether you intend to appear at the Settlement Hearing in person or through a lawyer (see 

Question 22); 

• A detailed statement of the reasons you object to the Settlement; 

• Your name (and your previous name if the name on the notice you were mailed was different), 

address, telephone number, and fax number (if you have one); 

• Your type ofpolicy(ies) and the policy number(s): and 

• Your signature (or the signature of your authorized representative). 

The requirements to object to the Settlement are described in detail in the Settlement Agreement in section 

VII. You must mail your objection to each of the following three addresses, and your objection must be 

postmarked by Month 00, 2015: 

QUESnONS? CALL 1-888·222-0691 OR VISITWWW.TEXASfARMERSSETTLEMENT.COM 

-8-
DC BK15188 PG81 

COURT ATTORNEY GENERAL DEFENSE COUNSEL 

District Court Clerk of Travis Joshua R. Godbey M. Scott I ncerto 

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 yourself 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 Settlement. 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 notice, 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 whether the Settlement is fair, reasonable, and 

adequate. If there are objections, the Court will considerthem and will listen to people who have asked to 

speak at the hearing. After the hearing. the Court will 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 welcome 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 time, the Court will 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 Settlement Agreement. You can 

get a copy of the Settlement Agreement at www.TexasFarmersSenlementcom. You also may write with 

questions to Texas Farmers Settlement. P.O. Box 9348, Minneapolis. MN 55440-9348 or call the toll-free 

QUESTIONS? CALL 1-888-222-0691 OR VISITWWW.TEXASFARMERSSETTLEMENT.COM 

- 9 -
DC BK15188 PG82 

number. 1-888-222-0691. You can also request a Claim Form at the website, or by calling the toll free 

number. 

You may also 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. 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 

Postmarked 

No Later Than 

Month 00, 2015 

Texas Fanners Seltlement Administrator 

P.O. Box 9348 

Minneapolis, MN 55440-9348 

CLAIM FORM 

NAME I ADDRESS CORRECTIONS 

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 website, 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 FORMA TI01'\. 

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 261

51 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.TEXASFARMERSSETILEMENT.COM 

2 
DC BK15188 PG86 

Exhibit 3 
DC BK1 5188 PG87 

Legal Notice 

If You Had Home or Auto Insurance in Texas, 

You Could Benefit From A Class Action Settlement 

A Settlement has been reached with certain Insurance 

Exchanges and Providers ("the Defendants") in a 

class action lawsuit about the pricing and marketing 

of homeowners and automobile insurance policies. 

A complete list of Defendants is available at 

www.TexasFarmersSettlement.com. The Settlement 

provides payments to eligible policyholders. 

What Is This About? 

The State of Texas claims that. during 1999 to 

2003. the Defendants charged rates that resulted in 

excessive premiums for its HO-A homeowners policy 

and used unfair or deceptive practices involving the 

determination of certain fees. discounts, and policy 

offerings, and improper use of credit scoring and 

certain risk assessments. 

The lawsuit also claims that. during the same time 

frame, the Defendants: I) failed to provide adequate 

notices that information on certain policyholders' 

credit reports may have impacted their premiums or 

policy placement. 2) used anticompetitive practices in 

the sale and marketing of homeowners and automotive 

insurance policies, and 3) improperly stopped offering 

HO-B homeowners policies. The Defendants deny 

these claims and maintain they did nothing wrong. 

Who's Included? 

Generally. the Settlement includes Texas homeowners 

or automobile insurance policyholders who had 

certain types of insurance policies with the Defendants 

between October I. 1999 and February 28. 2003. The 

Settlement includes three Classes: Rate, Discount, and 

Credit Usage Notice. You may be member of more 

than one Class. More information about included 

policies is available at the website. 

What Can You Get? 

The Defendants will pay rate reductions or discounts 

to the Rate Class and Discount a~s Members 

(calculated on a case-by-case basis) and provide an 

additional sum to be paid to Rate Class and Discount 

Class Members with eligible c laims proportionally. 

The Defendants will also provide payments of $35 

to eligible Credit Usage Notice Class Members for 

not receiving adequate notice about the Defendants' 

use of their credit information. Policyholders who 

renewed or received a new HO-A insurance policy 

from the Defendants after November I I, 2002 and 

before September I, 2003. have already received an 

additional reduction in premiums. 

How to Get Benefits. 

Payments to the Rate and Discount Classes will be 

made automatically. You must submit a Claim Form 

by Month 00, 2015 to get benefits as a Credit Usage 

Notice Class Member. If you did not receive one 

in the mail. you may request a Claim Form at the 

website or by calling 1-888-222-0691. 

Your other Rights. 

If you don't want a payment from this Settlement and 

you don't want to be legally bound by it. you need 

to exclude yourself in writing by Month 00, 2015 or 

you won't be able to sue the De fendants about the 

claims in this case. If you ask to be excluded, you 

can't get a payment from the Settlement. If you stay 

in the Settlement. you may object to it by Month 00, 

2015, but will be bound by the terms of the Settlement 

if it is approved by the Court. 

You may have received or seen other notices about 

other class actions about insurance policy options. 

premium rates. and/or credit report usage. The 

website has more information about how these cases 

affect your eligibility to partic ipate in this Settlement. 

The Court will hold a hearing on Month 00, 2015 

to consider whether to approve the Settlement. You 

can appear at the hearing, but you don't have to. You 

can hire your own attorney, at your own expense, to 

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 

DEPARTMENT OF INSURANCE, and 

THE TEXAS COMMISSIONER OF 

INSURANCE, 

Plaintiffs, 

v. 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

FARMERS GROUP, INC., FARMERS § 

UNDERWRITERS ASSOCIATION, FIRE § 

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 UNDER WRITERS § 

ASSOCIATION, 

Defendants. 

IN THE DISTRICT COURT 

OF TRAVIS COUNTY, TEXAS 

261ST JUDICIAL DISTRICT 

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, 

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) 

(ii) 

30491649.1 

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 HOB policy would not be renewed (the "Rate Class"); 

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 

-2-
----- ---- ~·~ -----· ··-

(iii) All Texas homeowners or automobile insurance policyholders of the 

Exchanges or the Automobile Insurance Providers who according to 

Fanners' records were provided or should have been provided a Credit 

Usage Notice from October I, 1999, through February 28, 2003 (the 

"Credit Usage Notice Class"). 

3. The Court hereby acknowledges and confirms the State, through the Office of the 

Attorney General, to fulfill the role of the Settlement Classes' Counsel. The Court finds that the 

Attorney General's office is authorized to bring this class action by the parens patriae authority 

granted in section 17 of article 21.21 of the Insurance Code and Rule 42 of the Texas Rules of 

Civil Procedure. 

4. Alternatively, if the requirements of Rule 42(a) & (b) and article 21.21 § 18(a) & 

(b) must be satisfied, then, with respect to the Settlement Classes, this Court finds and concludes 

that each of those requirements has been met, specifically: (a) each of the Settlement Classes is 

so numerous that joinder of all members is impracticable; (b) there are questions of law or fact 

common to the Settlement Classes which predominate over any individual questions; (c) the 

claims or defenses brought by the State on behalf of Farmers' policyholders are typical of the 

claims or defenses of the Settlement Classes and the State is authorized to bring claims on behalf 

of the Settlement Classes; (d) in negotiating and entering into the Settlement Agreement, the 

State has fairly and adequately represented and protected the interests of the Settlement Classes; 

(e) the questions of law or fact common to the Settlement Classes predominate over any 

questions affecting only individual members; and (f) certifying this Action as a class action is 

superior to other available methods for the fair and efficient adjudication of the controversy. 

5. The Court further finds that there has been no collusion between the State and the 

Fanners Parties with respect to negotiating the Settlement Agreement and that the State has 

represented, and will continue to represent, the interests of the Fanners' policyholders fairly and 

adequately and without a conflict of interests. Accordingly, the Court preliminarily approves: 

30491649.1 -3-
(a) the Settlement Agreement, including the terms and the releases set forth therein, as being fair, 

just, reasonable, and adequate as to each of the parties thereto, and (b) the Settlement Funds 

described therein, including the Prospective Rate Reduction, Retrospective Rate Reduction, 

Individualized Discount Adjustment, and Credit Usage Notice Adjustment Fund, and the 

proposed additional consideration, subject to the right of any member of the Settlement Classes 

to exclude himself or herself from the Settlement Classes in accordance with the terms set forth 

in the Settlement Agreement, and to show cause, if any exists, why a Final Judgment should not 

be entered in accordance with the terms of the Settlement Agreement. 

6. A hearing (the "Settlement Hearing") shall be held before this Court on 

September 29, 2003, at 9:00 a.m. in the 53rd Judicial District Court Room: (a) to determine 

whether the proposed Settlement Agreement is fair, reasonable, and adequate and should be 

approved, and whether the Final Judgment should be entered as to claims asserted therein, or 

which could have been asserted, against the Released Parties on the merits; (b) to determine 

whether the Settlement Classes members' right to adequate representation has been saHsfied; and 

(c) to reserve jmjsdiction to effect and enforce the Settlement Agreement. 

7. The Fanners Parties shall disseminate notice of the proposed Settlement 

Agreement and Settlement Hearing to putative members of the Settlement Classes within thirty 

(30) days of the date of this Order. A copy of the Notice of Proposed Class Settlement (the 

"Notice"), together with a copy of the Claim Form, substantially in the form attached hereto as 

Exhibit A, shall be mailed by first-class U.S. mail, postage prepaid, to all members of the 

Settlement Classes at the address of each such person as set forth in the records of the Released 

Parties or as otherwise may be identified through reasonable effort. In addition, commencing 

within seven (7) days of the date of this Order and continuing until the date of the Settlement 

30491649.1 -4-
Hearing, the Office of the Attorney General, the Texas Department of Insurance, and the 

Fanners Parties shall post on their respective Internet web-sites (www.oag.state.tx.us. 

www.tdi.state.tx.us and www.fanners.com) the Notice and a Summary Notice of Settlement, 

substantially in the form attached hereto as Exhibit B ("Summary Notice"). 

8. The Court approves the fonn of Notice, the Summary Notice, and the Claim 

Fonn, and finds that the procedures established for mailing and distributing such notices 

substantially in the manner and form set forth in paragraph 7 of this Order meet the requirements 

of Rule 42 of the Texas Rules of Civil Procedure, article 21.21 § 18 of the Texas Insurance 

Code, and due process, and constitute the best notice practicable under the circumstances. 

9. To effectuate the provision of notice provided in paragraph 7 hereof, the Farmers 

Parties shall be responsible for the receipt of all responses from the members of the Settlement 

Classes and, until further order of this Court, shall preserve all entries of appearance, Claim 

Forms, requests for exclusion, and any and all other written communications from members of 

the Settlement Classes or any other person in response to the Notice. The costs of notification of 

the Settlement Classes as provided herein, including printing, mailing, and posting on the 

Internet of all required notices, shall be borne by the party charged with the responsibility for 

such actions in paragraph 7 of this Order. 

10. Three (3) days before the date fixed by this Court for the Settlement Hearing, the 

State and the Farmers Parties shall cause to be filed with the Clerk of the Court affidavits or 

declarations of the person or persons under whose general direction the mailing of the Notice and 

the distribution of the Summary Notice by posting .on the web-sites identified in paragraph 7 

shall have been made, showing that such mamng and publication have been made in accordance 

with this Order. 

J0491 649. 1 -5-
11. Each member of the Settlement Classes will be bound by the proposed settlement 

provided for in the Settlement Agreement, and by the Final Judgment or any other detennination 

by this Court affecting the Settlement Classes, unless such member shall mail, by first-class U.S. 

mail, a written request for exclusion from the Settlement Classes, post-marked no later than 

August 29. 2003, addressed to "Exclusion Requests", c/o Rust Consulting, Inc.; P.O. Box 9348; 

Minneapolis, MN 55440-9348. Such request for exclusion must state (a) the name, address and 

telephone number of the person seeking exclusion; (b) whether such person has a homeowners or 

automobile insurance policy from the Farmers Parties, or both; (c) the date of inception of such 

policy(ies) and the most recent date of renewal for such policy(ies), if available; (d) the policy 

number(s), if available; and (e) that the person malcing the request wishes to be excluded from 

the Settlement Classes. Because the Settlement Agreement is intended to be a resolution of all 

Released Claims, any person requesting exclusion must either exclude himself or herself from 

the Settlement Agreement in its entirety, or submit to the Settlement Agreement in its entirety. A 

request for exclusion shall not be effective unless it is made in the manner and within the time set 

forth in this paragraph and in the Notice. If a member of the Settlement Classes requests to be 

excluded, that person will not receive any benefit from the Retrospective Rate Reductio~ the 

Individualized Discount Adjustment, or the Credit Usage Notice Adjustment Fund provided for 

in the Settlement Agreement, in the event the Settlement Agreement is approved by the Court, 

nor will such person be permitted to participate further in the Action. Any Class Member who 

does not request exclusion in the manner provided for herein may, but need not, enter an 

appearance in this Action at his or her own cost through counsel of his or her own choice. If a 

member of the Settlement Classes does not enter an appearance, that person's interests will be 

represented by the State in the Action. 

30491649.1 -6-
12. Any member of the Settlement Classes who has not requested exclusion from the 

Settlement Classes may appear at the Settlement Hearing, in person or through counsel, to object 

and be heard in opposition to any of the matters to be heard at the Settlement Hearing, including 

(a) the requested approval of the Settlement Agreement as fair, adequate, and reasonable, and/or 

(b) the requested entry of the Final Judgment. A member of the Settlement Classes cannot 

request exclusion from the Settlement Classes AND object to the Settlement Agreement. For 

any objection to be considered by the Court, the objector must mail a valid written objection, and 

it must be postmarked by no later than August 29, 2003. In order to be valid, the written 

objection must set forth (a) a reference, at the top, to "State of Texas v. Farmers, Cause No. 

GV202501," (b) a statement as to whether the objector intends to appear at the Settlement 

Hearing, either in person or through counsel, (c) a detailed statement of the specific basis for the 

objection, (d) the name that is set forth on the Notice that was sent to the objector, (e) the 

objector's current name, if different from the name set forth on the Notice, (f) the objector's 

current address, (g) the objector's current telephone number and, if available, telecopier number, 

(h) the objector's type of policy and policy number, and (i) the objector's signature or that of his 

or her authorized representative. Three copies of the written objection must be sent, the first 

addressed to the District Clerk of Travis County, Texas, 1000 Guadalupe Street, Austin, Texas 

78701, the second addressed to David C. Mattax, Chief, Financial Litigation Division, P.O. Box 

12548, Austin, Texas 78711-2548, and the third addressed to Richard N. Carrell, Fulbright & 

Jaworski L.L.P., 1301 McKinney, Suite 5100, Houston, Texas 77010-3095. If an objection does 

not include all of the required information or if it is not timely mailed to the three correct 

addresses, then it shall be invalid and it will not be considered by the Court. Any member of the 

Settlement Classes who does not object in the manner provided shall be deemed to have waived 

30491649. 1 -7-
. . 

such objection and shall forever be foreclosed from making any objection to the fairness, 

adequacy, or reasonableness of the Settlement Agreement and the proposed Final Judgment. 

13. If the Court gives final approval to the Settlement Agreement and enters a final 

judgment, in order to be entitled to participate in the Credit Usage Notice Adjustment Fund 

portion of the Settlement Agreement, a member of the Credit Usage Notice Class who has not 

requested exclusion from the Settlement Classes must submit a Claim Form, substantially in the 

form attached as Exhibit C hereto, to the Farmers Parties at the address set forth in the Notice. 

Such Claim Form must be completed and postmarked on or before May 15,2004. Any member 

of the Credit Usage Notice Class who does not submit a completed Claim Form shall not be 

entitled to share in the Credit Usage Notice Adjustment Fund but nonetheless shall be bound by 

the terms of the Settlement Agreement and by the Final Judgment and any other Order of this 

Court approving the Settlement Agreement, including all releases therein, and shall be barred 

and enjoined in this or any other action from asserting any Released Claims. 

14. Members of the Rate and Discount Classes shall automatically receive their share 

of Settlement Funds upon final approval of the Settlement Agreement and entry of final 

judgment, unless they file a written request for exclusion from the Settlement Classes as 

provided in paragraph 11 herein. 

15. The Court expressly retains the power to adjourn the Settlement Hearing, without 

any further notice other than an announcement at the Settlement Hearing of adjournment thereof, 

and to approve, modify, or disapprove the Settlement Agreement without further notice to 

members of the Settlement Classes. The Court retains jurisdiction over this Action to consider 

all further applications arising out of or connected with the proposed settlement herein. 

30491649.1 -8-
16. The administration of the Settlement Agreement, and the decision of all disputed 

questions of law and fact with respect to the validity of any claim or right of any person to 

participate in the distribution of the Settlement Fund, shall be under the authority of the Court. 

The parties to this Settlement Agreement, counsel herein in any capacity in which they may act 

hereunder, and any employees or agents of such law firms or the parties to the Settlement 

Agreement (including, without limitation, those employees who may furnish services in 

connection with the proposed Settlement) shall not be liable for anything done or omitted in 

connection with the Settlement Agreement and the administration thereof except for their own 

willful misconduct. 

17. The parties to the Settlement Agreement are directed to carry out their obligations 

under the Settlement Agreement. 

18. In the event that the Settlement Agreement is not approved by the Court, or the 

Court enters the Final Judgment and it is vacated or modified on appeal, or otherwise altered in a 

material way, or the Effective Date for any other reason does not occur, and if any party to the 

Settlement Agreement thereafter exercises its right to terminate the Settlement Agreement as 

provided therein, then the Settlement Agreement and any actions to be taken in connection 

therewith shall be vacated and terminated and shall become null and void for all pwposes, and 

all negotiations, transactions and proceedings connected with it (a) shall be without prejudice to 

the rights of any party hereto; (b) shall not be deemed or construed as evidence or an admission 

by any party of any fact, matter or thing; and (c) shall not be admissible in evidence or used for 

any purpose in any subsequent proceeding in the Action, or any other action or proceeding in this 

or any other forum, judicial, administrative, or otherwise, except proceedings to enforce the 

Settlement. 

30491649.1 -9-
SIGNED JUJu. '2..7 

30491649.\ 

'2003. 

I, VELVA L. PRICE, District Clerk, 

Travis County, Texas, do hereby cert ~ 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: 

-10-
Exhibit 3 

TO APPELLEES’ JOINT MOTION TO DISMISS 

APPEAL FOR LACK OF APPELLATE JURISDICTION AND REQUEST FOR 

EXPEDITED CONSIDERATION OF MOTION
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REPORTER'S RECORD

VOLUME 2 OF 2 VOLUMES

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

STATE OF TEXAS, THE TEXAS

DEPARTMENT OF INSURANCE,

AND THE TEXAS

COMMISSIONER OF

INSURANCE,

Plaintiffs,

VS.

FARMERS GROUP, INC.,

FARMERS UNDERWRITERS

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.

)

)

)

)

)

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IN THE DISTRICT COURT

TRAVIS COUNTY, TEXAS

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.
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A PPE A R A N CES

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

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

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
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A PPE A R A N CES

(CONTINUED)

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
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I N DEX

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
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122

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
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123

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
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133

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.
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134

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.
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135

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)
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136

REPORTER'S CERTIFICATE

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