This past June at the annual UFAA Convention in Las Vegas, a senior statesman of the Association expressed skepticism that UFAA’s lawsuit against FGI and the Exchanges would find its way into the courtroom anytime soon. “Here’s a thousand dollars that says this won’t get to court before we’re back here in June 2017.” His doubts were understandable, but he now faces a $1,000 IOU.

On September 15, 2016, UFAA versus FGI commenced in the Los Angeles County court room of Judge Gregory W. Alarcon. The trial is scheduled to last up to two months. UFAA President Tom Schrader took the stand as UFAA’s first witness, explaining the relationship between UFAA and its members to rebut Farmers’ tired attack on UFAA’s standing to speak on the membership’s behalf. UFAA also offered testimony from former board members Allen Yerxa and Bill Phillips and it has started calling various California agents as witnesses. Those agents are expected to testify about Farmers’ use of agent data on behalf of 21st Century, the introduction of production quotas, and ramped up Smart Office demands that run counter to the Agent Appointment Agreement.

According to UFAA’s attorney, Paul Mahoney, the battle has been “vicious” so far, with Farmers’ attorneys raising every conceivable objection. “We’re in a real dog fight,” says Mahoney. “But we’re in the right, and we intend to win.” So far, Farmers has objected to testimony from proposed expert witnesses and agent witnesses alike. UFAA Vice-President Mike Ward, who is serving as UFAA’s Corporate Representative at the trial, expressed surprise at the intensity and frequency of Farmers’ objections. “At some point, it seems the judge gets a little bit tired of it. But he listens to everything and denies a lot more of the objections than he sustains.” Ward also commented on the tenacity of Mahoney’s team and their witnesses. “No one has been intimidated by Farmers’ big name lawyers.”

In the lawsuit, UFAA challenges four things: (1) imposing production minimums and performance standards; (2) disciplining agents based on the location, nature, hours, and types of offices they maintain; (3) relying upon the 90-day termination provision of the 2009 and pre-2009 AAA as a legal justification for terminations; and (4) use of data acquired from agents by 21st Century to solicit current and prospective policyholders. UFAA is asking the trial court to issue a finding in its favor under the contract between UFAA’s agent members and the Exchanges. UFAA also seeks a ruling that the Management Company, FGI, is equally responsible with the Exchanges for Farmers’ contractual violations.

When asked why he took the risk of offering testimony against Farmers’ position, Schrader said, “Because telling the truth is always the right thing to do. I was elected to lead UFAA as its president, and I try to do that both in what I say and what I do. No one is a bigger believer in Farmers and its products than me. I am confident that a win for UFAA will help both agents and the Companies move forward in a positive direction.”

Ward, an active agent from Tulsa, Oklahoma, is putting in extra hours to keep his agency running smoothly while spending multiple hours each day in a courtroom in downtown Los Angeles. Asked how he can spare the time, he said, “I can’t, really. But someone had to be here, so here I am. Hopefully it won’t take the full two months.” Ward added that he has excellent support staff and that modern technology makes it easier to be “two places at once.” It just makes for longer days. “I’m on the phone with current and prospective customers hours each day, just as if I were sitting in my office in Tulsa.”

“We’re willing to do our part,” said Schrader. “We just need agents to do theirs by stepping up to support the Legal Fund in a big way. They wanted to see the inside of a courtroom. Well, we’re here. And the rent’s not cheap.”

To donate to UFAA’s legal fund, call 314.631.7898 or email As for you, Frank, $1,000 cash or check is just fine! or click here: