The feeling is Mutual – so is the fact

…these competing interests–the right to full and free access to the courts and the right to be free of groundless and vexatious litigation–are important considerations in the evenhanded process our judicial system provides for the resolution of legitimate disputes …it is my sincere hope that the type of normal, professional, and focused advocacy necessary to resolve the individual merits of the cases still outstanding will presently come to the fore.

Judge L.T. Senter, Abney v State Farm June 4, 2008

A few weeks later (June 20, 2008), Judge Senter restated his position and SLABBED reported Judge Senter loses patience with the Farm and threatens sanctions:

It is time and past time for the internecine and acrimonious warfare among the attorneys to stop and for the focus to shift to the task of resolving the many remaining cases on their merits. Anything short of this will not be tolerated.

Judge Senter’s commitment to focus on the individual merits of the cases is as reassuring, and I believe as heartfelt, as his wonderfully warm smile.  Consequently, it grieves me greatly to say his north Mississippi roots are showing when he segregates the role of State Farm Mutual from the “merits of the case”.

State Farm Mutual is to State Farm Fire what SKG was to the attorneys working for the member law firms – two parts of the same whole, according to his Order  in McIntosh v State Farm disqualifying all attorneys of the member firms; but, contrary to his opinions and orders when plaintiffs attempt to hold State Farm Mutual accountable for the conduct of one of the claims handling process.

Consider, for example, this text from an Order issued the 17th of March, 2008 in Marion v State Farm denying plaintiffs applications for review of certain orders of the Magistrate Judge:

This Court on numerous occasions has indicated that it is difficult to envision a breach of an insurance policy lawsuit without considering the procedure  used in handling the claim and the reasons it was denied.  Plaintiffs are not going to be allowed to reinvent the wheel as to the promulgation of policy language or follow a chain of custody with respect to documents or contract interpretation, unless they relate specifically to Plaintiffs’ claim.

Text from a State Farm training manual suggests what Judge Senter would allow plaintiffs is an improbable, if not impossible, route to the evenhanded process our judicial system provides for the resolution of legitimate disputes.

State Farm Mutual is the parent company which owns and/or controls the other companies. State Farm Mutual elects directors and officers, makes policy and business decisions, and exercises complete control over each of these subsidiary companies.

With two exceptions, all are capital stock companies wholly owned by State Farm Mutual. This means the capital stock of these companies are assets of the parent company. One exception is State Farm County Mutual Insurance Company of Texas. The other exception is State Farm Lloyds….

State Farm Mutual is a “preferred risk” company, which means that, in general, State Farm Mutual policyholders have met rather stringent underwriting standards. Of course, like an insurance companies, State Farm Mutual must insure its share of “other than preferred risks” as part of various state residual market programs. Such mandated residual market programs make insurance available for risk. which cannot be insured through regular channels.

Historically, State Farm Mutual writes and has written General Liability (Farm and Residence Liability) policies to lill the need for such coverage of its farm and small town automobile policyholders. Today, however, most such coverages are provided by the State Farm Fire and Casuslty Company.

Although the copyright date on the training manual is 1987, the organizational structure is consistent with the 2005 but-I-didn’t inhale Master Services Agreement between State Farm Mutual and what it calls the Client Companies.

This agreement is entered into and made effective this 15th day of January, 2005, by and between State Farm Mutual Automobile Insurance Company (“the Servicing Company”) and the following (collectively referred to herein as the “Client Companies”): State Farm Fire and Casualty Company; State Farm Life Insurance Company; State Farm Life and Accident Assurance Company; Insurance Placement Services, Inc.;  State Farm International Services, Inc.; and State Farm Investor Services (Canada) Holding Company.

Whereas, in Decembcr 2001, parties to this agreement entered into a written Master Service Facilities Agreement and the parties mutually agreed to modify certain terms of that agreement;

Whereas, the Client Companies are wholly-owned subsidiaries of the Servicing Company;

Whereas, the Client Companies need various services and the use of office space and facilities in their operations in Bloomington, Illinois and at and other locations;

Whereas federal, state and provincial laws affect affect information sharing among affiliates of a financial organization requiring clarification of the duties and responsibilities of affiliates in the sharing of facilities and services among affiliates; and

Whereas, thc parties to this Agreement contemplate that the Agreement will achieve certain operating economies and the parties desire to assure that all charges for services and use of facilities pursuant to the terms of this Agreement are reasonable and in accordance with the requirements of the appropriate regulator.

Now, therefore, the Servicing Company and Client Companies agree as follows:

The terms of the Agreement follow and #1 on the chart is one that begs the question what function – or rather what’s left after all those listed on Schedule I to the Agreement.

The Client Companies shall retain ultimate control and responsibility over the functions delegated to the Servicing Company and shall own and have custody of all their general corporate accounts and records. This Agreement does not create a joint venture or partnership between or among the Client Companies and the Servicing Company.

Indeed it is not a joint venture or partnership – all of the “client companies” are actually just part of the only one, State Farm Mutual.  It’s easier to see in a picture but there is no official one that either Steve or I’ve found; so, using the Agreement and Schedule I as a guide, I created one.

Now, if Judge Senter would just get the picture of the merits of a claim in context of the company that calls the shots, he would be about as close to perfect as a judge could possibly be.

State Farm companies 2 service companies

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