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JURY FINDS FARMERS INSURANCE GUILTY OF FRAUD

Feb 11, 2013

MOBILE, Ala. (WPMI) A Mobile County jury Friday returned a $2.4 million verdict in favor of a local insurance agent in a fraud case brought against 11 companies, all affiliated with Farmers Insurance Group.

The plaintiff in this case, Robert "Kyle" Morris, was a licensed insurance agent at the Morris Insurance Agency, owned and operated by his father.

In late 2006, Kyle learned that Farmers was recruiting agents to sell their products. He contacted Farmers about the potential opportunity and made it clear from the beginning that he was not interested in becoming a Farmers agent if it meant having to leave his father's agency. Farmers assured Kyle that it was not a problem for him to remain with the Morris Insurance Agency, and that his association did not violate any of Farmers' policies or procedures.

However, that representation was false. Farmers had an internal policy since at least 2003 that prohibited any Farmers agent from associating with an independent insurance agency.

Kyle worked diligently for Farmers over the course of two years, building a book of business, establishing relationships with clients, and quadrupling the premiums he earned for Farmers. In December 2009, Farmers fired Kyle without warning. Farmers' internal documents proved that Farmers fired Kyle because of his relationship with the Morris Insurance Agency – the very thing they assured him would be no problem when he started.

Based on his employment agreements, Farmers took all of Kyle's clients and prohibited him from contacting them for a year. Kyle lost all of his investment in his Farmers agency, as well as the renewal premiums from the more than 300 policies he sold as a Farmers agent.

"The evidence that Farmers lied to Kyle was overwhelming. Fortunately, our legal system allows a small business man to hold large corporations accountable when they don't tell the truth," said Brian Duncan of Cunningham Bounds who tried the case with his partner, Lucy Tufts.

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