HomeMy WebLinkAbout96-02497
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LAW OFFICES OP
JACOBSEN", MILKES.
'2I!AST IflOIlSTREBT
CARLISLe. PA 17013.308'
(717) 249.6427
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Kepner "mnde mnterinl misrepresentntiDns of fnct in his npplicntion, ns well ns on his
October 1993 nnd Murch 1995 npplicntions, regllrding his Dccupntion, his pnBt nnnun!
income, his pllSt physicnlllnd mentnl henlth nnd history, Ilnd his then existing physicnl
nnd mentnl condition." These npplicntions relllte to Mr. Kepner's Ilpplicntion for
disnbillty inCDmo insurnnce coveruge through tho SMA Lifo InsurllllCO Compllny.
60. Tho CDmplnint further nvers nt \1 17, thnt "Kepner mnde these
representntions in his Ilppliclltions nnd his October 1993 nnd Murch 1995 Ilpplicntions
which were, in whole Dr in pnrt flllse."
61. It is further Ilverred in this Complnint, nt \1 18, thnt "specificn!ly, Ilt the
time thnt Kepner mnde his npplicntions, he intentionn!ly, deliberntely, fnlsely nnd/or
negligently D1isrepresented misstnted nnd otherwise fniled to disclose his true nnnun!
Income."
62. It is further nverred In this CDmplnint, nt \1 19, thnt "Kepner, Ilt the time
he mnde his npplicntions, IntentiDnn!ly, deliberntely, fnlsely nnd/or negligently
D1isrepresented misstnted nnd otherwise fniled to disclose his pnst phYBlcnl nnd mentn!
hen!th history nnd his then existing physicnl nnd mentn! condition by failing to reven!
true fncts including but not limited to the following Ispecifics deleted in thlB
quotntiDn]."
63. Resulting from the nbove conduct, the civil nction mnkes clnims for
frnudulent misrepresentlltion in the nppliclltiDn processes nnd for blld fnith brench of
contrnct.
64. Most revenling IlS, IlS the federnllitigntion rellltes to the instllnt CIlBe, is
the clnim found within this suit thllt Mr. Kepner involved himself in the following
.."
.... "
conduct: at ~ 10 of the Complaint, it is nlleged that Mr. Kepner, in his
communications with his family physician, :1odney Hough, had removed from hiB file
medicnl records, which previDuBly had been sent to the insurance company, indicating
that Mr. Kepner had various forms of medicnl treatment. It is claimed that Mr.
Kepner involved himself in leading the company to believe that these documentB in
fuct were mistakenly placed in his medicnl file and were unrelated to his cuse, when
in fact they were properly a part of his own medicnl file. Further, it is claimed that
Mr. Kepner saw to it thut u misleading und fnlse record wus sent to the insurance
company, causing the insurance company to reverse its prior decision and to grant
insurance coverage.
65. The fnlsified or deceptive information described above relates both to Mr.
Kepner's applications for life and for disability insurance coverage.
66. Mr. Magill believeB, and therefore asserts that the Complaint and Petition
filed by Mr. Kepner, seeking to stay the termination of the agreement is filed solely for
the purpose of stnlling and delaying the cDntractunl remedies clearly provided for
under the agreement. Were it not for this litigution, the terminutiDn would now
clearly be terminated due to the uutomatic nature of the terminutiDn provision, upon
diBability or proper notice.
67. Mr. Kepner continues to retain three of the Mugill files and hus not
returned them to the Magill offices, despite demund to do so. These files are for the
Dickinson School of Luw, Sheppardstown Family Pructice, und Phillip Progar.
WHEREFORE, for the ubove reU60ns, the Defendunt respectfully submits that
the Court should deny Mr, Kepner uccess to the infDrmution he seeks in his Complaint
NOTICE OF JUDICIAL ASSIGNMENT
This case has been assigned to the JUdicial Officer indicated below.
counsel and all parties are advised that there is an office of. the Clerk in
the Federal Courthouses in Scranton, Harrisburg and Williamsport,
Pennsylvania. 1'1eaoe file all pleadingo directly with the Clerk'o Office in
which the aosigned JUdicial Officer is otationed. Do not file any courtesy
copies with tho Court.
In accordance with the Local Rules, counsel shall file the original
and one copy of all pleadings, motions, memoranda, and other documents
except discovery material, with the Clerk's Office. Counsel shall file any
additional copies with the Clerk'a Office as may be required by the Local
Rules, by an Order of court or additional copies requested by the assigned
Judicial Officer as noted belpw.
JUDICIAL ASSIGNMENT
Judge Edwin M. Kosik
Judye Thomas I Vanaskie
Judge William J. Nealon
CLERK'S OFFICE ADDRESS
u.s. District Courthouse
235 N. Washington Ave,
P.O Box 1148
Scranton, PA 18501
717-)4 7-0205
Judge Richard P. conaboy
==c~~:=;;~~i:=~~c;::~~:===============c==~~;~=~i:~;i~~=~~;~~~~::==~===
228 Walnut st.
P.O. Box 983
Harrisburg, I?A 17108
717-782-4445
Judge William W. Caldwell.
, .'
.Judge Rambo and Judge Caldwell require the original plus ~ copies
of all pleadings,
==ac====================~========================~====================aa===
Judge James F. McClure.
Judge Malcolm Muir.
U.s. District Courthouse
240 W, Thirri St.
P.O. Box 608
williamsport, I?A 17701
717-323-6380
the original plus two copies
.Judge McClure and Judge Muir require
of all pleadings.
===========================================================================
NOTE: '1'his case has been referred to the u.s. Magistrate Judge nO,ted
below. Piease file all documents at the location indicated.
Magistrate Judge Durkin
Scranton address.
Magistrate Judge Blewitt
5(:rnllloll adtJrnG5.
Haqistrlltl1 .JUU\jI! :;l1lysnr
lIo1rri!jlJtu"(J o1ddr(!U:l.
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JS "C
II1.v 12/841
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CIVil COVER SHEET
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Th, JS~i cI,lI COy" '''Hllnd Ihl In'orm.lion conl'ln~ """" nl.lh., '11l1'CI nor luppl,mentlh, 'lllno Ind ""'ICI 01 plud1nQI 0' 01"" CIOfl' .. tl(lUlItd by
Ilw, 111:'01 II C)tO'fld~ by local ""I.. of court n'llllorm 100'0"'0 by'''' JuOlCt11 Conlll'"C' 011'" Unll'd 511111 In S'Pl,mtMf HI" 'I 'IQU"'d 101 Ih, un 01 I'"~
Cl"" 01 Court to, lhl putpo" oLlnUl.llng 'h. Cl'tll dOC"" Ihu' ISlE INSTRUCTIONS ON THE REVERSE OF THE FOA".)
I (I' PLAINTIFFS
Allmerica Financial Life Insurance and
Annuity CCITl(Xlny (Formerly SM/\ Life
Insurance Canpany)
440 Lincoln Street
Worcester, ~~ 01653
(b) COUNTY OF RESIDENCE OF FIRST lISTEO P'--"NTIFF
,EXCEPT IN us PLAINTIFF CASESl
(c) ""ORNEYS CFIAM NAME. ADDRESS. AND 'ElEPHQNE NUMBERI
Andrew F. Susko, Esquire
Mlite and Williams (215) 864-6228
1800 One Liberty Place
~liladelphia, PA 19103-7395
DEFENDANTS
Ronald L. Kepner
1472 ZimT1E!l.11\'ln Road
Carlisle, PA 17013
cou~~rv OF RESIDENCE OF FlnST LISTED DEFENOANT
lIN U S PLAINTIFF CASES ONLYl
~WTE IN LAND CONDEMNAnON CASES_ USE THE LOCATION OF THE
TRACT OF LAND INVOLVED
AnORr~E'f'S tlF KNOWN,
II, BASIS OF JURISDICTION
"~ct'Itt,, 1fot0ltt'tolOlttl" III. CITIZENSHIP OF PRINCIPAL PARTIES ."...ctl.." '''C'''.IC.
IFo, Ot""llly CUlt OnlYI '0A"....''''1l', ',",00"" 10' '011I ::11""'0"'."
- , u.s. Oonmmenl - I ,..,,1 QU4IlIlon
PlllnUIt IU S Oo","nmenl Nol .I PIII~1 PIF DEF 'IF DEF
Clllun 01 ",II 51111 : , :l<, Incorpott'M fl! Prlnclpoll Pllet : . : .
- 2 u.s. Ooftfllmtnl ~ . 01''''111, 01 BUlin... in TN, 51.1.
O.I,ndln' !lfl(lICoJle C,IIUn'h'p 01 CIU"n or Anolhel 51.11 : I : I Incolpcnltd I!J1 P,lnclp.J Pl.ceX: 5 - I
P.rtl" ,n l1,m IHI olllu.lnt" In Anolhll 51.1.
Cllllln or Subl<<1 01 . : I : I Forll;n H.Uon :1 : I
fOfII;" Country
IV. CAUSE OF ACTION ,ell I ,... u, Ct"'Il ''''\fIllJO'lC'Ol _<" 'OU '11' '''-''-G ,"'c ~'"ll . I"" ,,,.tul"" 0' c..VtI 00 "'ot ("IIVIII'IC<'IO'Ul I'''VIU v"'llU :"'11"",,
Diversity action under 28 U.S.C. Section 1331 for rescission of
disability policy.
V. NATURE OF SUIT 'PLACE AN . IN ONE BOX ONL'I
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VI. ORIGIN
R' O"Oln.1
PrOCHdino
VII. REQUESTED IN
COMPLAINT:
VIII.
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CHECK IF THIS IS . CLASS ACTION
C UNDER F R C P 23
RELATED CASEIS} is.. ,""rucho""
IF ANY N/A
DATE
6-19-%
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JURY DEMAND: II: yes : NO
DOCKET NUMBER
Issuing the disability income policy,
56, If Kepncr had accurately rcvealcd his past mental and physical heallh hislory
and his then existing physical and mcnwl cundition, SMA would not have issucd the
disability income policy to Kepner,
57. Kepncr claims (otal disability beginning In May ur 1995, witbintwo years of
thc issuance of the disability income policy inlJucstlon.
58, Therefore, SMA is cntitled to rcscission of the disability Income policy,
WHEREFORE, SMA rcspcctfully dcmands thc following rcllcf:
a, A Declaratory Judglllcnt adjudicating (hat the disability Incomc policy was
procured through Kq'ner's misrepresentation of material facts and failure to
accurately disclose material facts to SMA and that SMA has no obligation to
pay any past and/or future disability incomc benefits;
b. Rescission of the disability incomc policy; and
c. Other relief as deemed appropriate by the Court including, but not limited to,
Interest, costs and reasonable counsel fees.
COUNT VI
FRAUDULENT 1\IISREI'RESENT A 1'ION - D1SADlLll'Y CLAIM
59. Plaintiff SMA incorporates by reference paragraphs 1 through 58 as though the
same were fully set 101111 at Icngth hcreln.
-14.
Included representalions that Kcpner was disahlcd duc lu CXlrcme faligue and olher nu like
symptoms.
61. Kcpner rcprcscl1led on his disability bcncfits claim noticc that his sickness
began on May 1. 1995, lhat he had nol had a samc or similar i1lncss hcforc May I, 1995,
and lhal his date of firsttreatmcnt was June 26, 1995, A cupy of thc Disability Denefits
Claim Notice is attached hcrcto as Exhlhit "C",
62. As of July 19, 1993, Kcpncr was asscssed for fatigue and nu likc symptoms.
63, As of July 19, 1993, Kepner was receiving I'axil as trcatmcnt fur his
depressed mental slate.
64. Kepner's claim COl1lained materially false infonnation and was otherwise
fraudulent.
65. Kepner's claim as submitted was in violation of 18 l'a.C.S,A. ~4117(a) and
(b).
66, Kepner repealed his pallern of activity in providing false infDrn131iDn in his
three Applications, as well as his disability claim cnlitllng plaimiff SMA to trcble damages.
67, Therefore, SMA Is entitled 10 investigalion expenscs, costs of suit, attorney's
fees and/or treble damages pursuanllD 18 l'a,C.S,A. ~4117(g),
WHEREFORE, SMA respectfully dcmands the following rcllef:
a. A Declaratory Judgment adjudicating lhatthe disability income claim was
fraudulently submillcl! by Kepner anl! that SMA nns no obligation to pay any
past and/or future disability income benefits on the claim made;
-15-
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Recovery under Section 18 Pa. C,S.A. 4117(g); and
c. Other relief as deemed appropriate by the Court including, but not limited to,
interest, costs and reasonable coun.;el fees.
COUNT VII - DAD FAITH
DREACIl OF CONTRACT
68. Plaintiff SMA incorporates by reference paragraphs I through 67 as though the
same were fully set forth at length herein.
69, In applying for coverage, Kepner stated that the statements and answers in his
Appllcatluns concerning his occupation, his incol1le, his past and present physical and mental
health history and condition and his claim form, were true and correcl. However, many of
the statements contained Infonnation that was false, misleading and otherwise untrue,
70. Kepner engaged in bad faith conduct during the course of his Applications by
requesting his doctor to change the medical record applicable to Kepner,
71. Kepner acted in bad faith in submining his disability claim contending that his
medical problems first arose after his polley was issued when, in fact, they arose before his
policy was issued.
72. Kepner's failure to act in good faith constitutes a breach of contract relieving
SMA of any obligations under the contract.
73. Therefore, SMA Is entitled to a Declaratory Judgment that no coverage is
owed and is also entitled to a rescission of the disability income policy,
WHEREFORE, SMA respectfully demands the following relief:
-16-
",ra ....-. PART I }^-"M" LIte "..urnnce l..omplny
. !!'i.!f!.!1~.HCI!. 0 lIIe91 Ollnblllly Check appllclbll bnl(el)
~'A"'An.WII'I Mull 01 Hlndwrlllen ' . Worceeler. M8..nch~lol" 0..!605
,'~~\:' . . . . , COMPLETE FOR All APPLICATIONS
" 1. a) PAOPOSEO INSUREO Flrsl . Middle Inlllal. lasl 7. n)lIave yuu smoked one or more
i p..., .lL c..... I V ".1 clgarelles in Ihe lasl 12 monlhs?
, 1l}1!::!:11\J1!!:! 1!.1 I ~ 1~~I'-I~I~112..J I I I I
b) 00 you ClJrrenlly use any olher form 0110bacc01
b) Sex c BIATIl d) Owner's Soc, Sec. or 1.0. 0 Cigars 0 Pipe 0 Chew ,0 Olher
pijM OF Mo, Day Yr, Slale 8. a) Dccupallon and Dulles blXrs. _1.$_..._, _ ..,
, . .' r /7 -C/o. -S'~(p J ::J:}fJIlt!"l",a S"li.4.S f nvf o,J"'(.t.,....-I\I7'
a) R~SIDENCE. ,',.. I ". ' . ." " " . . .. " , .. ' ",
,..:'No. ""' .:..Str.et... . :,).. ...,...' .' ,..:~ APJ.. '. .... VIS. . " '.. .. . " ~
",:, i:t/?~' .:z/~ ~.e~~I'}N: tih:,' 'IS ',e)'';n/c~~nge'~nieh1PIII~7' .,.. >'. .. ',<:- ::'::'::l;y.' ~:'
CII " d) During Ihe pasl6 monlhs has an illnesS or,ln/ury , ,
y . Slale Zip ,prevenled you trom engaging in Ihe usual du les
Q"l-~.L./SC~ !&:L,'?IOIJ t3 0Iyouroccup~lIbnlormorelhan7days? . 0' Pi
lijliUSiNESS ADORESS - 9. Wllllhe Insurance applied lor replace or change U M'"
No, Slreel Apt I Yrs, any ellsllng Insurance or annullles In any company1 ~
r 10.lIave you applied lor any life or dlsabillly insurance
wllh anolher company In Ihe last six mon(hs? lJ /(,
CHy Slale ZIP
, 11.00 you Inlend 10 Iravel outside Ihe United Slain
and Canida?
12.ln Ihe last 3 years have you
I) lIad your molor vehicle license suspended
or revoked or have you been convlcled
01 driving under the Influence 01 drugs
or alcohol or been convicted 01 more
Ihan one moving vlolallon?
b) Parllclpaled In or do you In lend 10
parllclpa(e In
U Molor Racing 0 SClJba Olvlng
[J lIang Gliding or 0 Parachullng
similar flying activities
cl Flown or Inlend 10 fly as Ilralnee,
pilot or crewmember?
1112b or C "YII" . Complete Approprllle Quastlonnllra
explain .yes" Inswerl 8.12 . , .... ";
~Apl
LL-l....L I I
CII Slale ZI
. IS e n I prem um en pa an I e Yes No
Company'e Condlllonal Receipt beln given? rn 0
life S Dleablllly S p , .,l.O
, .... , ., PlETE FOR liFE IN8U CE"" .
13. LIFE INSURANCE APPLIED FOR 17. OPTIONAL BENEFITS
Amount Plan nl 0 Walyer 01 Premium cl 0 ADO $
S b 0 Waiver 01 Char as d 0 APl
18.DIVIOEND OPTION (Slat I Mulual OnlY)
.1 0 Paid In Cash d) U Paid up Adds
b) 0 Reduced Prem, '1 0 Accumulale allnleresl
c) 0 Other
19..) PRIMARY BENEFICIARY Relallonshlp
3. POEMIUM PAYAOlE
~ Annual IJ Seml,Annual
rJ Ouarlerly
o MAP. 0 Olher __.__~__ _ ___ __... _.
EKlsllng MAP. or lIsl Bill No,
4. Periodic Premium IE.cepllonalllle Onlyl
S
S. iThemlum Nollces To
P9 Insured 0 Owner al
o OIher (Name)
o Residence U Ousiness
bl No, _ SIr.
14. Flex Term Plans 0 Decreasing Term
8 Level Term Int. Rale
Level Prem, Red, Term, No, 01 Yrs
15. Oealh Benelll Option (ExC1lpllonalllfe only)
fJ Opllon I 0 Opllon 2
16. RIDERS 0 EKchange Op on ,de
DGIA $ n. . _..___ 0 Flel Term n er S
:] OIA (Complete ParI lal [J level Term
iJ CIA (Complele Parllal [] level Prelll Red Term
, ~ AlA lJ Decreasing Term
: J Paid up Addlllonslilder~. Inl nale
(.l Annual Premium $ No. ot Yrs
o Single Premium $" .. [J LOR
Form lA,90 NH, WV Pnqe 1
r! day Common OIs35ler Clause
-lbjCORlTNGENf]ENE
'/,
20. OWNER (II olher than Insured)
Yes
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..~. __ __, COMPLI!' I: ~UH UllIAlllLl1 , II'lt>UHAI'l""
1I1L1 INSURANce APPLIED Fon 22. OVERHEAD EXPENSE DA r A
co E:~~PLAceM~~'. . . II Vou, shalll ollho aVI!I"11.1! II)ontl!ly ovnrhead ex"
S ,.,,'~ ~<U) 11111 qo Den L /I:~ '-'t. pllnscs lor Itllllast SIX r on Ins
, ~n: $ _~" _'. Per, ..~. .." Per ~ Rent $ ~aundrv S
/lIDERS ElectriCity $ anilDrial Svs,S
M Regular OCcupollDn 0 Residual Disability Telephone $ < epreclallon $
G lLI'"els'm, ek,AAccldenl r: Parllal Disability Hoot & Walor $ loll,,, l"n,I". A "",";;nl ani" ~,
1'1 e C cc rl HDSP, ConI, $..------ Taxos $_,.. .
o AIB: MD. Ben, $ ~lIm ~en. Salaries $
n 515: MD. Ben. $__dOO ~~r~~_ ~:~_C_'J<"I!. -- Mlgo, Prln/lnl$ ____. __~. TOTAL
Ll AID PLUS bl Aro you solo owner 01 Iho business?
~ COLA 0 Ves 0 No
IJ Key Person $u _.. ~ __ c) II nDI. your share
o Olher .____ How many Dlhor owners
'bID DISABiliTY BUV-DUT Amt $ Ell P 23. ANNUAL EARNED INCOME-
, m. er u.____ a) L05t Tax Year L~_'lO~.
o AddlllDnallne, Option $ PrlDrTaxVear $__S~~llD-_
clD OVERHEAD EXPENSE Two VearaAgD $_~,OOJ
Ellm, Den, b) Unearned Income (Indicate sourcel L
Aml.S Per. Per. cl Net Worth Porsonal $ 'C\(J,O~
o RMldual Rider Business $ /.)S""AJ4
o AddltlDnallnaurance Benollt % .Earned Incoms Is the lolal of your annual salarin. wagn.
o AddlllDnallnauranco Option Rldor $ bonuses. commissions and lees less ordlnasy business expenses,
. Record all disability Income and overhead expense coverage In force (Include frlnga. Individual. group, salary
cDntlnuallDn, oSSoclRIIDn, union bonollls or slole dlsoblllly bonellls), II none, wrllo "NONE",
Company or Source Voor Disability Overhood Monthly Ellm,
Issuod Income Expenso Indemnity Porlod
$
%
Bonolll
Period
Ollsot By
Social Security
"'ONE
$ $
$ $
$ $
COMPLETE FOR All APPLICATIONS
Home Olllce Amendmenls and CorrecllonslAdmlnistrahve Purpose
(NOT APPLICABLE)
It s agreed thaI: (1) The oppllcRllon consists 01 Parts I. II and IA. i IA applies, (2) Tho roprosenlallons ora truo and cDmplolo
10 Ihebest of my knDwledgo and belial, (3) NO,lIabllllY OXIS(S e~d the in.urance appllod 10' will not lake ellect unlllthe policy is
dellvored and Ihe premium Is paid dUring Iho Iilollme olthe proJlosou msurodls) and then only If tho proposed Insured(s) has
(have) not consulted Dr boen Ireated by any physician or praclillorlOr of any hea Ing art nor had any losts IIsled In Ihe appllcallDn
,Ince its.cDmpletlon; Ilul, If lho premium Is paid p,IDr 10 delivery Dllho policy and a cDndltlDnel receipt is delivered by tnl18gent.
Insurance shall be ll"eCtlve subJect 10 10rmB Dflhe conditional recolpl. lA) No agenl Dr br9ker.ls authorized 10 amend, liller, or,
tnodl/y Iho.lorms,Dt,lhls agroomenl. ,', '. ' ,'~,: '.,. .'. (, ,..'".'"...'...,. ,',' . . .. '. . :, : ',' ,.'
Slgnel! 0,( \y ,and" l~te . ," ". .: DolO, .". ,ro,posed ln~iJred' , :" .. " .
I: ".~.t;, /1<1'" /L,k~" " , ", ,~'..'"
~ThIS eppllcatlDn Is made at the roquesl 0' Ihe undorslg who heroby ralllles ooch slolomonl. representation and
greemenl horeln and ogroos Ihal ony conlracl 01 Insurance Issued In connection wllh Ihls application shall bo Issued
n Ihe condition thai each stalemonl, ropresonlallon and agroomont shall be binding upon Ihe abovo named owner(s)
to Ihe sarno exlenl and degreo as II modo by tho ownerls),
,Igned at (Clly and Slate I Dato Full slgnaturols) 01 Dwnor(s) (Dthor Ihan Insurod)
I
I
i
Do to
II Bus noss, norno 01 ostabllshmont and 1I11elcapaclly
7/157
..''il....
')
, '
OR/HOIV/DUAL
,LIFE AND/OR DISABILITY
INSURANCE. PART II
I AI/ Anlwe,. MUll Be Handwrllton
i . Proposod Insured
i First M,I, Lost
I 01J"'b t , ~AJ.<'A..
I 2. Porsonal Physiclon
al ,ldName and Addross bll] None
, HOb tV..... '(, ./10 cJlf, It- .I"-U
, " ,1".", ..L3t'Z(Xj1t..wd~ , /J v~
,
Blrlh Dale
Mo, Day Yr,
o Stete Mutual Lila Auuranca Company 01 Amerlca
o SMA lIle Auuranco Company
o lIfo 0 Ollebl/lly Check eppllcable bOI(eal
Worcealer, Mallachulelll 01605
3.ln lho posllO years heve you boon told you had or boon treated
lor Immune syslom disorder Including acqulrod Immune
dollclency syndrome (AIDS) or AIDS related complex
(ARC)? 0 Yes ~ No
Cls;' 1'7 .s'
.....
4.During the pas I 5 years havII you used marljuane.
cocolne. barbiturales. narcol/cs.~xcllants, or
hallucinogens. except os prescribed medical/on?
, " . 0 Ves No
5.0o:vou ungeil& In a echedulod,e~lircl,se jljpgrar'n?" . ',"
" .. ~1I'''~,~,\,g!vs ~~till,ta.,~~~, d~ra'~,lon, ,~~O~lr:fj, ,~:~ .",'
6.Are you now pregnant? ' ' '0 Yes )& No
II yes, expecled dale of delivery ,
explOln "yos" answers fa #3.5,
, ReilsOn.LallCo,;sultillh ,'" ':.', " ' " ,~,.,' '.,.,'
, ; ~)'IXi' R~Ul/~~.EX'or'n" . . Were ~II fln,dlngs nomitll?}f ~y
dl r.1 As indlcaled)n #27 on pogo 2 " '
0) 1'1 Other. Glvo Detells '
Dalo Roason ' Rosult
c.., , oJ: ~
During the Pall 10 yel,. have you had, bean lold you hid, or bean treated for
7.a) n Chest pain er Angina c)O Hearl Murmur e) Il Haart Allack
bllJ Rheumel/c lover dID High Blood Pressuro II U Blood Vossel
Dlsordor
0) I J Coughing of Blood
hI iJ Emphysoma
I) U Rcspiralory Disorder
gl [J Palpltal/ons I) i}4' None 01 These
h) U Hoart Disorder
8.alll Pneumonle
b)K Bronchllls
c) i.1 Tuberculosis
d) [J Porslstenl Cough
e I [] PersJs\onl Hoorsenoss
f) [J Allorgles
Ill] Asthma
kl [J Pleurisy
I) D Chronic Shortness
of Brealh
g) [J Seizures
hIll Momory Loss
m) IJ None 01 These
9. al LJ Recurrent Headache c) [] Dizziness o. Falnl/ng el U Brain Disorder
bll] Paralysis dl [J Slroke f) n Spooch loss
10. I) 0 Nervous Disorder b) 0 Manlal Disorder
c) 0 Deproaelon
d) 0 Suicide Allempl
I) ~ None 01 These
0) ai1 None 01 These
/1. II 0 Uleor bID Recurring Indlgesllon 0) 0 Vomiting Blood d) 0 DIlIIcuIly Swallowing 0) ~ None 01 These
2. I) 0 Colon Polyp b) 0 lIellle or Colltle clO Perslslenl Dlarrllea dID Bloody Stoole 0) ~ None 01 These
3. I) 0 Hepatitis c) 0 Clrrhosle elO Jaundice . glO Gall Bladder Disorder I) 1'1 None 01 These
b)O Slomach Disorder d)O liver Disorder flO Inlesllnal Disorder h)O Pancreas Dlsordsr
'4.1)0 Cancar clO SklnCencor elO Tumor glO Cyat hllVNoneolThese
bID Flbrolda d) 0 Skin Dleorder I) 0 Lymph Gland Disorder T
5.110 Dlabeles
p.l) 0 Sugar In Urine
! b) 0 AlbumIn In Urine
! c) [J Blood In Urine
bID Thyroid Disorder
d)D Pus In Urine
ellJ Prostale Disorder
f) rJ Bladder Disorder
cl 0 Dlaoose 01 Breast
ollJ Kidney Oleorder
h) IJ Reproducllve
System Oleorder
d)D Glandular Disorder ol~ None 01 These
I) D Urinary Disorder kl pf None 01 These
II 0 Sexually TransmUled
Disease
7.al ' Anemia
b) Leukomla
~l '" ,
c) I Blood Disorder dl Rccurrenllnfecllens el Jcf None 01 These
c) Varicose Volns d) Roclol Disorder e) X None of These
~) AmpUla~I?11 ~1 ~~I~rlt!~,.') X None of These
3.a) . : Hernia
bl Hemorrhoids
.0) Deformity
..., n........._...........
c) )( Back Palll
'\
SCHEDULE OF BENEFITS AND PREMIUMS
ANNUAL PREMIUM
FORM NO. DESCRIPTION AMOUNT YEARS PAYABLE
-
803-87 DISABILITY I NCOME POLICY $849.20, 21> YEARS
.. "
.~ " MdNTHLl BENEFfT/ " '
. OTAl D SABILITY, $2,200
MAXIMUWBENEFIT PERIOD - ,TO AGE b5 OR TWO YEARS', IF LONGER ' '.
ELIMINATION PEIIOD - 90 DAYS
847-85 REGULAR OCCUPATION $140.80 2b YEARS
849-85 lIFETIME SICKNESS BENEFIT $132.00 21> YEARS
850-85 LIFETIME ACCIDENT BENEFIT $103.40 2b YEARS
651-87 SOCIAL INSURANCE SUBSTITUTE $11>8.00 25 YEARS
MONTHLY BENEFIT - $800
ELIMINATION PERIOD - 90 DAYS
853-85 COST OF LIVING ADJUSTMENT FOR SIS $51>.80 25 YEARS
MAXIMUM RATE - 8~
870-81> COST OF LIVING ADJU~TMENT $539.00 25 YEARS
MAXIMUM RATE - 8~ ,
MINIMUM RATE - 4~
TOTAL INITIAL ANNUAL PREMIUM - NON-CIGARE1V~ ;MOKER BASIS $1,989.20
POll CY NUMBER S 1>43,148
INSURED RONALD l KEPNER
AGE AT ISSUE 40
DATE OF ISSUE APRIL 30, 1994
MONTHLY BENEFITI
TOTAL DISABlll TY $2,200
ADDITIONAL INSURANCE
OPTION AMOUNT $2,000
IQllW[?[l~@[\ urn
. dUM...."........ ,..,. . ,...-- -
IIPLACEM~'lr, a) Your stlorO ot Ihu ovcrllYo monlhly overhoad ex.
~ :>~ 't q U," ponses lor Iho lasl SIx r onlhs,
ERS!n,s.~_, ,:, p~'i;' ',.,0 ,Per Renl $ .. ~alJndry $
Eleclrlclly $ onllorlal Svs,S
Il4 Regular Occupation C ReSIdual Disablllly Telephone $ opreclatlon $
11 lllellme Accldenl i: Portia I Dlsobillly H t & W t $
'I ~a a or lolller IUIMull & fQulpmenl onl"
X life SlckfAcc I Hosp, ConI, $, - -, Taxes $_,_ '
[) AIB: Mo. Bon, $ ~~~-- ~i~ ~~~a:,I~~lnJlnl: __, __ TOTAL
nl,'l SAIISO:pMLoU'sBen. $ ._,rg_O_ ~er. ~L- ~er,C:.lr4.
b) Aro you sole owner 01 the business?
>4 COLA 0 Yes 0 No
IJ Key Person S , c) II not, your ,halO __.. __ " 'lit
o Olher ____ , How many other owners
b) 0 DISABILITY BUY-QUT AmI. S Elim Per 23. ANNUAL EARNED INCOME-
a) lost Tax Year $_..u~t.t:!.
o Additional Ins. Option $ PrlorT8lCYoor $_S~CdlL-__
010 OVERHEAD EXPENSE Two Yoora Ago $ _~,J)OJ
~Ii ~ bl Unearned Income (Indicate source) $_
AmI,S erm., en,
er, cl Not Worlh Personal $ I CJd, O(KJ
o Residual Rider BuslnO$S $ I d-.S--"""
o Addltlonal)neurance Benelll % 'Earnsd Income Is Ihs letal 01 your annual salaries. wages,
o Addlllonallneuranca Opllon Rider $ bonuses. commissions and fees less ordinary business expenses.
. Rocord sll dlaoblllly Incoma end overhead expense coverege In force (Include Irlnge, Indlvlduel. group, aolary
conllnuallon. aaaoclnllon. union boneflls or state disability bonelllal. II none, wrlle "NONE",
Company or Source Year Disability Overhead Monthly Ellm.
Issued Income Expense Indemnlly Period
$
Benefll
Period
Ollsel By
Social Security
$ $
$ $
S $
CDMPlETE FOR ALL APPLICATIONS
Heme Olllce Amendmsnls and Cerrecllons/Adminislrallve Purposs
(NOT APPLICABLE)
II is agreed Ihal: (1) The appllcallon consists of Ports I. II and lA, iliA applies, (2) The representations are trUlund complele
10 the best of my knowledge and beller, (3) NO,lIabllity ex ISiS and the in.urance applied lor will noltake ellecl unllllhe policy is
delivered and the premium Is paid dUring Ihe IIfellrne of the prol?oseu ,nSUred\s) and then only lithe proposed Insured(s) has
(have) not consulled or boen lreated by any physIcian or prachlloner of any, hee Ing art nor hod any lests listed in the applicallon
, since lis ,complellon: ~ul. II the premium Is paid prior to delivery of the p,ol cy. and 0 condillonel rocelplls, deliVered by thp agent.
~~~\l~;i~:r:rl~~~J'/\~T~I~g~~:~o;~i.o t~r~&'oHh~ cO,n~I~~~al ~~~el~t., (AI i~'O e.ge,'1t ~~,b~~.k~;!~ ,a~t~9n~e~ 1?~:"e~d.~I~er., o~:
Signed a ( ty ,6nd"Slate) , .." "Dolo n s gne ,ure rolloeed Insured' .. " '.
" "'?-6', jf<I:, '/L,!t~ ,', " ' ,~':""
This appllcallon Is mode al the request 01 the underslg who hereby roll ties ooch slalement, reprosentallon and
agreement herein end agrees Ihat any conlracl of insurance Issued In connecllon wllh this oppllcallon shall ba Issued
on the condlllon Ihat eech stalemenl, represonlelion and agroornenl sholl bo binding upon Ihe above named ownar(s)
10 the some extenl and degree es if mode by Ihe owner(s),
Signed at (Clly and Stale) Date Full slgnature(s) of owner(s) (other than insured)
~~.
ale
I Business, name 01 estebllshment and title/capacity
,..... ., .......111 ,.......
..... ......
,. ,..i~' ," I " . ,'\
LlCATION FOR INDIVIDUAL
OUlT LIFE AND/OR DISABILITY
INSURANCE. PART"
All Anlwe,. MUll Be Handwrlllen
Lost
.. ... ..
OIr1h Dale
Me, Day Yr.
o Slate MUlualllle AuurancI Company 01 Amertca
o SMA llle Assurance Company
o life 0 Dlublllty Check applicable box(ul
Worcuter, M....chulelll 01605
3.ln tho post 10 years hove you boon told you hod or boon treated
lor Immune system dlsordor Including acquired Immune
deficiency syndromo (AIDS) or AIDS related complex
(ARC)? 0 Yes J<! No
01J"'b t , ~AJ.<''''- Cls;' /1 3'
2. Personal Physician
II kName and Address bID None
, iYClb tV..... '( ./10 Utf, It-
, , ,1,-" ..L3t'Z(Xj1t..wd~
~'
:" ReBsoo.la'l CO';SUIl8d',,':, ".', " ' . ' ,~,.,' ,.' .~.
. ;~)'I)i; R~Utl~~,Ex'em': . 'Were ~II'flndlngs r1oi-ni~I?Jtrj
, d) r I As indlcated,ln ~27 on pogo 2 ' , '
e) , , Olher. Give Deloris '
Dale Reason Resull
During the Palt 10 yel,. hovo you had. bean told you hid, or lIMn Irllted for
7. a) '"l Chest pain or Angina c) 0 Heart Murmur e) Il Heart AlIack gl [J Palpllallons
b) iJ Rheumatic fever dID High Blood Pressure II U Blood Vossel hI U Heart Disorder
Disorder
gl U Coughing of Blood II I]
hI :.J Emphysema kl [J
I) U Respiratory Olsord<< I) l'J
8. I) LJ Pneumonia
bl>' Bronchllls
cl ; 1 Tuberculosis
dl [J Persistent Cough
II [J PersJs\onl Hoorsenoss
f) [J Allorgles
4.During Ihe post 5 years havII you used marijuana.
cocaine. berbiturates. narcotlcs.~xcllanls. or
helluclnogens. excopt os prescribed medlCatlOn~
" '0 Yes No
5.00: you ongage In 8 acheduled.e~lircl,s.O jljpgra~? ". ' '.-
, . (Ir."y,oa",'g!vI cjetillls .,1YJlf1, duration, (r uencyl..., '.'" ,
'.' ... ", , '" ..,'" ',,',' , ... " os "O'.No ,",
6.Aro you now preg'nent? ' 0 Yes )& No
If yes, expected date of delivery ,
Explain" yes" onswors (0 ~3,5,
, -" Ac
I) i}4' None or These
m) lJ None 01 These
Asthma
Pleurisy
Chronic Shortness
01 Breath
g) [J Seizures
hllJ Ma.nory loss
9.01; J Recurrenllleadache cl [] Dizziness o. Fainting el U Breln Disorder
bli] Paralysis d) [) Slroke fl n Speech loss
10.1)0 Nervous Disorder bID MenlalDlsordar
11.110 Uleor
12.110 Colon Polyp
I) ~ None 01 These
0) ~ None 01 These
c) 0 Doprosalon
d) 0 Suicide Attempt
b) 0 Recurring Indigestion cl 0 Vomiting Blood d) 0 Dlfficul1y SWallowing 0) CilI None of These
b)O ileitis or Colitis
13.a)0 Hepatitis clO Clrrhoele
b) 0 Slomach Disorder dID liver Dleorder
14.110 Csncer
b)D Flbrolds
15.a) 0 Dlsbetes
16.110 Sugar In Urine
bID Albumin In Urine
cl [} Blood In Urine
Anemia
Hernon
Deformilv
cl D Skin Cencer
dl 0 S~ln Disorder
bID Thyroid Disorder
dlO Pus In Urine
II D Prostate Disorder
f) rl Bladder Disorder
bl I eukemin
bl Hemorrhoids
c\ )( nnr\ Pnln
clO Persistent Dlarmea dID Bloody Stoola I) ~ None of These
110 Jeundlce ' vlO Gall Bladder Disorder I) p.( None 01 These
f) 0 IntesUnal Disorder h) 0 Pancreas Disorder
01 D Tumor vllJ Cysl hllV"None of These
f) IJ LymJtl Gland Disorder T
clO 01_ of Broas1
olfJ Kidney Disorder
h):J Reproductive
System Disorder
dID Glandular Disorder ollO None of These
II 0 Urtnary Disorder kl pf None 01 These
II 0 Suually Transmllted
Disease
c) I Blood Disorder d) necurrenllnlecllons .I}f, None 01 These
c) Varicose Verns d) Roclol Disorder elXNone 01 These
.\ Amnlll:tllnn nl Arthnli.; 1\ V ~"nn n' Th,u:"
'Individual Health Cia"",
440 Unwin SIr..1
, Wo;crsler. "'1\ OlbSJ
UI~dUIIII Y Dt:Ilt:III~
Claim NOlice
''ldlvjclual
slale Mulual We Assurance Company of America
SMA life Assurance Company
Mail Ihe completed form 10 address shown above,
.51k.c.J
",,I:>
::Z-;V4U~<f"/<..#
A[!lIO(NC( AUUIUSS
/.y?"J 2,," "'"t'AE-...... ~ b
, 'J/- 1'-a"
OUSINIS~ 11l1l'HON[ NO RESIDENCE llUPItO,...( NO.
("".. Codr) ("'" (odl!)
7/? olYJ- ~"IS 7/? ':;SP..s-.J~I
LJAll or SU.';kN(SS OR DAll TOTAl OISAOllllY 8(GAN~
ACClIlINr '. ~ A(, INS
..... _ ',. OAl'PMllA'l DI"'.'lI'" .ICAN,
,n1tf.y I, /'1'S- loll"
If INIURY, HOIV AND WHIRl 010 ACCIOINf lfAPPINI
fUll N"M[ Of INSUR(O
RONAdi I. kLl'AK
BUSINESS NAME "NU AUORISS
Kt:"A//!.e. -Z''''U. ;'/.5.>OC.I~ 't'€ J
..:n> ..<3AClOO<~ rJ V~
I~
OCCUI'AtlON ISTAIl UAllY OUlIIS IN JUlll
0I5CRlBI 51CkNl55 OR INIUR'l!
t:..,.7'fU...." ~.,'7'/c;. uA I ,c,<.( .$y.......,.,.oov, N''''J~
IttUSc.,,,,,(.:tt::I,,vr ttC.HJ!' I Ivvtttf:j,v'*I.J ,,AI ,q1/l,.,."(I'J,,..,
"nENDING PU"(Slq,I,N INAMl ANt) ADURlSSI ItUSI'IlAlS VI511[0 \NAMI AND AUURESSI
1It!<JOAI G ,,-,,<'1-.(' "" b
d6~..:r .N. .,J"''' ..a~ .1&.1,,< O..nJ
H"~J'''JLJV'''a i1 ?"O
HAVE \OU HAD HiE YtME OR A SIMILAR SICKNESS OR INIURY BHOAU CIV[ DAns ANU UllAIl5.
DAII
AOMlnlO
DATI
015CftARG!O
ARE taU (lIGIBU fOR OR RECflVINC': NAME Of COMPANY
A, INOIVIOUAl OR GROUP DISABIliTY tV"
e, StAll OISASIII'" 1\10/ u. H "''''ow 0/
C. IVORkIR'5 COMPINSAlION u'^IK.vdW/oI
D, UNEMPlOYMENT NO
E. onnR IIndlulrl Ala
FRAUD STATEMENT REQUIRID BY SOME STATES:
Any person who knowingly and wllh Inl('nt to defraud any im.urance company or ulher penon Illes a statement of claim co"tainlns
any materially false Inlormatlon, or concrals for the purpose 01 misleading, inlormallon concerning any fact malerlal 'herelo, commits
it fraudulent insurance acl. which Is a crime.
THE STATEMENrS ON THIS fORM ARE TRUE TO THE BIST OF MY KNOWLEDCE AND BELIEF,
VERIFICATION Will BE fURNISHID UPON REQUEST
To all ph."IciJnsi medlcoll prolessionals; hmpitolll; din in: ollll~r health care providers. ,"IUrers; Medicallnformallon Bureau. Inc. (MIBI:
employers: conSU'11er reporlinB agencies: Internal Rl"\'enue Ser\'ice; D(,pJftmenlo De Hacienda lPuerlO Rlcal: Ind Social Security
Admlnll,raUon:
F'erminlon 10 Obtain Inlormation
I iutharlle ~u 10 BI~ the Slile MUluallife Anurance CompJny of America/SMA life Assurance Company or Itl Jgenl: (a) alllnformaUon
you have JS to IIInen. Inlury, medlcJI hiuory. dla811011s, Ifealmen' and proBnmll with respect to iny physical or mental condition
01 the p,Ulent including ps)'thi~lric. drug, or alcol1ul abula! treatment; ~nd (hI Jny non.medlcal informJUon which Ihe Slatl! Mulual
life Assurance Company 01 America/SMA life A"urance Company believes II m~t'dl to perform In business functions desCflb~ belaN.
I olulhorlll! Ihe Stale Mutual life Auurance COll1p~ny 01 Ameriu/SMA life Anurance CompJny 10 requelt i report from thl! Medical
lnlortnallon Bureau IMIDI. which is an Jnoclo1tion ollHe Insurance compo1nles that u(1pralesthe Health Clalml Inde. tHen on behill
of \ubscrlber Insulers.
I unde"tand thai an Helleport may Indicate the dJleS of daim, flied by me at Ihis time or In the Pall. o1nd also Idenllfles the Insurance
company to which such c1Jlml were luhrnilted. but dues nul lIJI1liUn medical or olher penonillnlormatlon,
I authorize Stale MUlualllfe Anurance CompJny 01 America/SMA life A"urance Company to report to MID Ihe fUIIhalI have flied
it claim and the datels) of any claims I file or have 1Iled.
Use olnd Disclosure
The Inlmmaliun obtained will he uu~d 10 delerrulI1l' ('URibilily 1m lmu,olnce or henefits under any conlfacl ollhe Slale Mutualllfe
AnurJnce Company 01 A,"eflCa/SMA Life Auuran,!! C(Jfnp~ny. II Will aho be uled for any other hUllness or lawful pur pOll! which
relalel to Ihe conllicl, I knOYl anti olKrep that the State Muluallife Anurinn~ CompilnY of AmeriCil/SMA life Assurance Company
may dildos! all (}f IU'I of the inlnrm~li()n to: lis alfili~ll'd wlllpanles: iny reinsurer: or ;my parly which performs business or legal
services for the Slale MUlualllle Auura"n' Company 01 Anll'f1caJSMA llle Auurolnce Company.
This form will he valid for the tlurallullul till' c1alfll, I ~n(M' Iholtl mol)' u."Cluesl a cOIJY of 11.1 agree Ihal ol photocOIJY Is a, valid as the orlglnll.
~/t!..
?- ~nf Imuretl
I'Olll.~ NUMO(R
AMOUNT
J~ / JjI':S-
D"e
'nlltl\ltll.ll""'."U
-'
."
.
>>
FORM es.er 1.legl
DISABILITY INCOME
INDIVIDUAL
Stato Mutual Companfos
SIIII MUIII.llII, .....uI.ne. ComtIt'" 01 ""'9IIC.
SUA lilt """".nn Como""
440 lincoln Slreet, Worcoster, Massachusetts 01605
.t Ir- ....
.
INSURED'S STATEMENT
IMPORTANr.
Pfe'&e return this form thirty days after elplflJttOn of the elimmation period. If any. It may be rllturned sooner
if you resume work.
FULL NAME OF INSUREO
RO"'....c:.ll J. k.('".o""........
RESIOENCE AOOnES~ R u
1'( 7.J. ,<, "''''~~''''-1'''''
~U.rc:.... r'A- t?,..3
BUSIN.E~S NAME AND AOO..'.!.ESS
f"I~"""'~1l.. ~. ;}.JStle:.,
.so ~Ai!."'''o'<<Vo611 19~ CAo4!.'/'/..5<'<
OCCUPATION ISTATE EXACT DUTIES IN FULLI
S'1<:JJ ",,co -Z'"""..s u"""..".....
/l11'lA.<1d~" d-"l -hv.r, C'<.,,-,,,,r-j
DATE OF elRTH
oS' p ,/.soy
POLICY NUMeERISI
...scO Y.3I-y,p-.ao
TELEPHONE NO,
I 7(1 .;;J.sS'-..s.3.:l I
TELEPHONE NO,
P-t t?.. I ~
11/7 ~ v.J. J,,,.s
OATE OF SICKNESS OR ACCIDENT
,...,. ..s-/ ,I,s
DATE TOTAL OISAelLlTY BEGAN
-.. .s-11!9.r
i!ll\,M,
DP,M,
DESCRIBE SICKNESS OR It/JURIES
NU,.",.(jN~.s..s ,..v
~"""' ~""<' F". .,./<:; ulf ~ ,c;' <. '( ...s y 1't1.,a 'hd~~1
/I~tf1'W'\/~"""""D.J J '~"d(cl ~ ?'d .Jc.II('JI('~
...,., '-<.Sc.e ~
'"""',..~~
IF INJURY, HOW AND WHERE DID ACCIDENT HAPPEN!
NAME OF PHYSICIANISI
N<!,L.S.,IV <5"....)>< I"'-Cl
AOORESS
01""'",- /0(. JoOll ..s", .sUI~.J
H~..ov...a. 1 r>". t?II'O
DATE OF FIRST TREATMENT
41 OJ ~/'T S'
NAME OF HOSPITALISI
AODnESS
DArE ADMITTED DATE
OISCHARGED
! DATE YOU FIRST RESUMED ANY WORK ACTIVITIES
OATE YOU EXPECT TO RESUME WORK
r..JAlfI<"""WN
!
I
i
I HAVE YOU HAO THE SAME on , SIMILAn SICKNESS OR INJUny BEFORE! GIVE DATES ANO DETAILS,
l
DESCRIBE ALL OF YOUR PRESENT ACTIVITlES /'/(<1' -1<;1'IUI'>7 ~'<>t<V.lJ.J. 0,0.) ,t:'''''''7'lc:v... C4'~1.5,
I"-y "n> <;;0<('1- "'''OM~'''').(' ~"""""'''''' /,...~ .Llo,,-7I:l~ ''''-'"7>1.V<t'7'lo"" 1'>'\,......0..........
1),1....;:,"1 '05 o$,<>"..r,. 'f~S7"'~
-'Va
OTHEn DISABILITY INSURANCE NAMES OF COMPANIES
1
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,VDN~
POLICY NUMeens
AMOUNTS
'..
,
IF TliE PREMIUM FOR TIllS POLICY IS PAID BY YO un EMPlOYEn,
PLEASE INDICATE THE PERCENTAGE OF TIlE PREMIUM PAID BY IfIM,
Q
%
rEMENT REQUIRED BY SOME STATES:
Any pll'1on who knowlnglv and .\HUh Jr1':"I' to defraud anv I"suroneo company or other person liIes 0 u.ilf~ent \t' claim containing
Ir1V mllerllllv lelselnfo,mlllon, or conce.ls 10'1~ ~t~~~"f.l"rri!I~g;ng, inlorrnenon concerning enV lecl melerlellhe,elo, com.
mill I rreudulenl Insurence eCI. which Is e crime.' .
Hoy 9 9 Z1 AM '95
THE STATEMENTS ON THIS FORM ARE TRUE TO THE BEST OF MY KNOWLEDGE AND BELIEF,
VERIFICATION WILL BE FURNISHED UPON REQUEST,
To III phy.lell"l; madlcal professionel.: hospitals; clinics: other hoelth cere providers: Inllurers; Medlcellnform811on Bure.u, Inc.
IMIDI; Employerl: end Consumer Rlportlng Agencle"
Pennllllon 10 Obllln Inlormellon
I IUlhorill you 10 give Ihe Slole MUluol lifo Aosu,once Company 01 America/SMA life Assuronce Componv or lis egent: leI ell
Information you hllve 81 to 11I"011I, inlurv. medical history. diagnosis. Irealment end prognosis with rospect to ony physlcel or mentol
condlllon of Ihe pallenllncludlng psvchlolrlc, drug, or a'cohol ebuselreelmenl: end Ibl onv non,medlcollnlormoUon which Ihe Slele
MUluol Ufe Assuronce Com pony 0' Ame,ica/SMA life Assurence Componv believes I' needs 10 perl arm its business funcllons described
below,
I"
I 8uthorlze tho SI81e MutuollUe Assurance Company/SMA Life Assurance Company to conlset any other Insurance company to
which I may have submllled a claim lor benelits under any policy, Including policies for dillOblljty. hospital indemnilv Dr mBiar mBdical
Inlurance. lor Information about any such claim.
f authorize the Slate Mutualll'e Assurance Company/SMA Life Assurance Company to request a report 'rom the Medlcallnlorma.
tlon Bureau IMIBI. which Is an Bssociatlon of life insurance companlu lilal operatos the Health Claims Index IHCIl on behalf 01
subscriber Insurers. I understand that an Hel report maV indicate the dotes of claims filed by me at this lime or In the past. and
,110 identifies the insurance company to which such claims were submitted. but does not contsin medical or other personal Information.
lauthorl.e Slale Mutual Lile Asouronce Compeny/SMA life As.uronce Company 10 reporllo MIB lho locI Ihal I hove flied a claim
Ind the dllelsl 01 anV cleims I file or hove flied,
Use and Disclosure
Thelnlormotlon obleined will be u.od 10 dotermlne eligibililV lor In.uronce or bon-;jlils under any contrOCI 01 lho Stale MUluel Lile
Assurance Company 0' America/SMA Life Asourence Compeny, I! willal.o be u.ed for any o'her bUllness or lawful purpose which
releles 10 the contracl, I know end agree thol the Slale MUlualllle Assurance Company or America/SMA Lile Assurance Componv
moy dl.close all or pert of Ihe inlormatlon 10: its afflllaled componie.: anv ,elnsurer: or any partv which perlorme buslne.. or legel
aervlcBl lor Ihe S'ole MUluel Llle Assurence Compenv 01 Amo,lco/SMA Lila Assurance Componv,
This form will be velld for tho duration 01 the claim. I know Ihotl may requesl e copy oIl!, I egree Ihal I photocopy Is so valid
II the o"glnol,
,j-,t/,s
, Date
;f"N-J~'"
(. h".-.J('~
Neme 01 Pallenl
~,;(~
Signed
...
~
T ON FOR INDIVIDUAL "
ADULT LIFE AND/OR HEALTH
INSURANCE. PART I
, I
AI/ Anlwen MUll De Handwrllton
bl SOl c BIRTIl d) Owner's Soc, See, or 1,0,
pOM OF Mo Day Yr Sjale r- -".,
, ' r n -C/6. -..:.~(P
,,11 R~SIOENCE. ' " " I' , ' , .. ' . " ,
,;No. " '.,61ree!., ':" "\," ,.., Ap)'.', "Y,s,
.,.. " .'. '.'.' . .
'.', /: l/?;;..:. 2,,,,, ~.e...V}N ~.. 'rS
Iy , Slale Zip
Q.,.I'1..usc~ ,P.
bjOilSl
No, Streel
Api,
I Yrs,
ZIp
,--
Cily
Slate
3. pnEMIUM PAYABLE
~ Annual 0 Seml.Annual
o Ouarterly
o MAP, 0 OIher _____
Exisling MAP, or L1sl Bill No
4. Periodic Premium IExceplional Life Only)
$
S.81 !'!,emlum Nollces To
P9 Insured 0 Owner al
o Olher (Name)
o Residence U Business
b)No,_Slr,
No. 0 0 315 :
P<
pO.
[J
[1
I)l-
IX-
Q Slale MUlualllla AI~ur~n~ 'Company 01 America
\X-SMA LIIe Al5urance Company
o 1I1e91 Oll8blllly Check Ippllcable bOI(el)
Worceller. Mal5ochulOlll 01605
COMPLETE FOR All APPLICATIONS
1. II PROPOSED INSURED Flrsl . Mlddls Inlllal . la51 7. II Have you smoked one or more
,A I () , ^,II~' C, h ,i.. . K, AI "', N..€ ,R... , I clgareltes In Ihe last 12 months?
bl Do you currently use any other lorm 01 lobi ceo?
o Cigars 0 PI e 0 Chew ,[] OIher
8. I) Occupalion and Dulin bl Xrs. -1$_ ,..., ,
, :J:/'(.J'!t!~.,a S"U{S f "'" <oJ"'~'~IV7'
, , ,
.. .... '. .
. ,: ' '. .:, . . ',.. . .. ., '. :", . .:. ',.. I'.
:: :~)'Ariy'c~inge'~niemPlal-.d.7",,' :-., . ",' :: : :' :r:Y' ~::,
, d) During Ihe,pul 6 months huan IllnesS or,ln/ury
,prevenled you Irom engaging in lhe usual du In
of your occup~tlbn for more Ihan 7 days? ' 0'
9. Willths Insurance applied lor replace or change
any exlsllng Insurance or annul lies In Iny company? U
10. Have you applied for any life or dlsobillly Insurance
wllh anOlher company in the lasl 511 monlhs? U ~
11.00 you Inlend 10 travel outside the Unlled Slales
and Canada?
12.ln Ihe last 3 years have you
al Had your molor vehlcls license suspended
or revoked or have you been con vie led
of driving under the Inlluence of drugs
or elcohol or been convicted of more
than one moving violation?
bl Participated In or do you Inlend to
parllclpale In
U Motor Racing 0 Scuba Diving
o Hang Gliding or 0 Parachuting
similar flying acllvllln
cl Flown or Intend to fly as M trllnee,
plio I or crewmember?
1I12b or c "Yel- . Com pie Ie Appropriate OUestlonnllre
Expllln "Yes. answel1 8.12 ' ~
u
O~
~API
l....Ll-L I I
CII Slate ZI
. IS I e n II prem um en pa an I e Yes No
Company'e Conditional Receipt been given? ~ 0
Life S Olsablllly S P ,.Ia
'. ,.. PlETE FOR l FE INBURANCE" ,
13. LIFE INSURANCE APPliED FOR 17. OPTIONAL BENEF/TS
Amount Plan II 0 Waiver 01 Premium cl 0 AOB S
S b 0 Waiver 01 Char n d 0 APL
18. DIVIDEND OPTION (Slate Mutual On.!)')
II 0 Paid In Cash d) 0 Paid up Adds
bl 0 Reduced Prem, 110 Accumulate allnleresl
cl 0 OIher
19. 01 PRIMARY BENEFICIARY Relationship
14. Flel Term Plans 0 Decreasing Term
B level Term In!. Rale .
Level Prem, Red, Term. No, ot Yrs
15. Oealh Benefll Option (Excepllonal Life only)
r:J Option I 0 Opllon 2
16, RIDERS [J Exchange Op on ,de
!JGlR S.. ,,__,_ 0 Flel Term n er S
: 'j OIA (Complele Part la) C level Term
: J CIR (Complete PallIal 0 level Prem ned Term
, , AlA ,',' " 'j Dee, easing Term
, Paid up Addlllons Rider Inl nale
,.- "'.......1 ".._l _ . ..
"
L'] day Common Olsasler Clause
liT CON T1NGENTllEIiE
Ii,
wHllen
" .
a ghlln shoes ,~_o,I.:':_ Walghlln c10lhlng J.,JO_
Have you had any chango in wolght in Iho pas I year?
o Yes &No 0 Gain 0 Loss Amount.._, ,
Reason
.~----...
:.13. Have vou ever requesled or ,eeewed a penSion
bench I or paymenls because of an ,"jury,
sickness or cJlsabllily?
Yes No
r: 'lrr
24. Havo you ovor changed oeeupaloon or resodeneo
because of health? IJ ~
22. Other than os Indicated In 7-20, During Iho
post 5 years hove you
II Been or sre you now under observation,
treatmant. tho ropy. counseling. or m9dl-
eotlonl or hevll you hid any chock up. Illness Yes
or surgery? 0
b) Hed electrocardiogram, x-ray or blood sludlos? lR'
cl Baallldvlled to have II tell or surgory
which wu not donll?
d) Boon trllllted or rocalved couneellng tor
, 1I1cohol or drug U18? ' ' ,
, I) Been a pallenlln a hOlplllll, clinic,
OlInllarlum or olhar medlclll laclllty? 0
, I) eonauned any olhor phyalcllln or chlropredo,7 I5l 0
o
!lit
25. Has any momber of your family ever had high
blood pressure, dlobeles, cancer, menial Illness
, or heradltary dlsaesa?
No
26. Family Age" Present State or Health
o Record lIvln or Cause 01 Death
Father
Mother I
Brolhers .3&
& Slelere
;y
d1
~ (]
Ags et
Desth
o
(J'; C)o
GOQD
6colJ
6CCr::>
COM I!l1!'FOR EACH APPROPRIA
5'1...............1''''I"..'''(f'iM
' uecae.iIOiilr,..6Mj,
'.-.4oIIfC....... ;." . .'.'. . ':.It' -
ITI!M'CHI!CKEO IN Nl5'.... .......J.,~ ~ "
D";'Q'~8tui.Under~ ~,Phyllcl:"lMldlcal,FIClllty ,HIlI1..J
'.,..,. ,Trealmenl? (IncludL .Iddreu If not In 2 Ibvvaf'1
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I undarltand snd agree thai the
recordad 10.. the basI 01 my kno
Dele ~'/;(I' Wltnoss
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FORM OUTINS
DISABI LITV-JOB DUTIES STATEMENT
INDIVIDUAL
State Mutual Ute Assurance Company of Amerk
SMA Ufe Assurance Company
440 Uncal" Su..,. Worelller. M....chu..'" Ole
FULL NAME OF INSUREO
R~NM..o J, k,oN..-'"
RESIDENCE ADORESS t'i:' >-
1l{?.J. ..?'..........~A...."...," U
1'101
BUSINE~S NAME AfjO AOORESS
K~t"Y~"" ~,-1-J3d~,
..Si Add"" ~l"
JOB TITLE
.511<-":J """.....
TO BE COMPLETED BY INSURED
DA TE OF em ni
POLICY NUMeERISI
.5<0 <I.:J/. S' -do
TELEPIlONE NO,
17'11 ..JSP-SJ~ I
TELEPIlONE NO,
<:'l<i!L/.1
17';>1.>1 .3-J
JOB OUTlES'
IGIVE CLEAR INOlCATION OF TilE AMOUNT OF PllYSICAL EXERTION REOUIREO,I.i!..
BENOING, CLIMBINO, LIFTING, ETC,I
TIME SPENT DAILY ON
EACIl OUTY
1. ~ tt<-"'..s ~'" .:z-,,,.su~"'AJ.C'
2, ()\A-^'~t'1...."",f..J7' d I"- 7'/11.3, ({.tlt~'
J,
4,
lJtf IZ. I ~.. t
V"t?:I<" J
S,
'IF ON CURRENT JOB LESS TIlAN lWO YEARS. ALSO LIST AND EXPLAIN JOBSIlELO OVER TilE
LAST FIVE YEARS ON THE REVERSE SlOE OF TillS FORM,
PREVIOUS EDUCATION, TRAINING AND EXPERIENCE
EDUCATION
13,s,
~hVeA-"'G'"
TRAINING c. c)tG""""fOJ41U .:IN >-"'.$:.UA"V~"
EXPERIENCE
IS ,yl"/JU
..sR~c..I...JA
:Z:-M's
I Cl,D.....""'" .,. ,.,J4 /'9(;;oC!'^'~ Y
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AOOlTIONAL COMMENTS TO CLARIFY OR AMPLIFY TilE ABOVE'
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THE ABOVE IS A TRUE. CORRECT AND COMPLETE STATEMENT OF MY JOB OUTlES. EOUCATlON, TRAINING AND EXPERIENCE TO THE
BEST OF MY KNOWLEOGE ANO BELIEF,
~~
. ~
10 hh,
f .
DATE
SIGNATURE OF INSUREO
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LAW.OPFICES OF
JACOBSEN & MILKES
52 BAST H10H STREBT
CARUSLll, PA 170U-30B5
(717) 249,6427
..\ '''.
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MAY 221996 ~I~'-:'
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12. Defendants ure unable to respond to Plaintiffs' intentions in filing their
own motion for post trial relief,
13, Admitted,
14, Admitted.
15, Admitted that the Superior Court nIlirmed the trial court's decision,
denied that any actions of the Defendants were un attempt to confuse the issues in this
case, To the contrary, Defendants reluctantly found it necessary to submit the entire
reproduced record since the question of attorney fees involved the need to be able to
muke reference to the complete record, and the various activities of counsel and their
clients throughout the proceedings,
16, Admitted that Defendants have exercised their constitutionn! und
statutory right to petition the Supreme Court for n!lowUllce of appen!, Plaintiffs'
criticisms and churacterizations of the exercise of these rights ure scandn!ous Ulld
nothing more than an attempt to euggest that u litigant should not have the right to
appen!,
17. Admitted, although the two activities ure completely unrelated.
18. Denied, Defendants assert that there ure numerous just cause grounds
which form a basis for the Defcndants' termination of this contract, including, but not
limited to his rcfusn! to communicate with the owner of the business and his attempts
to avoid proper insurance procedures, in an attempt to gain specin! treatment for
himself or his own construction company (see '127 (e) for further detail on these items).
These grounds W'C not limitcd to mattcrs which would alrcady havc becn hcurd by the
Honorable gdgar B. Bayley. Because the termination notice was dated April 1, 1996,
.
.
.;
.
whereas Judge Bayley had not been involved in the dispute for fourteen (14) months,
leading up to the notice of termination, the Defendunts are not reliant uJlon citing us
cause, those actions of Mr, Kepner about which the Court hud previously heard.
19. Admitted that the issue of just cause would relate solely to the question
of Plaintiff Kepner's entitlement to profit sharing compensation for the first hnlf of
1996, The issue of just cause bears no relathnship under the Ab'reements to the
question 01' whether the Ab'l'eements muy be terminuted and the question of what
business may be bought or sold between the parties. Accordingly, the just cause
determination is irrelevant to the tel"lllination proceedings, since profit share for 1996
would not be accounted for unless and until any might be paid by insurance companies
in 1997.
20, Admitted.
21. Admitted that Defendant Magill, Inc., has over one thousand insureds in
its Harrisburg Office. The vust mqjority of these insureds have no business locations
within Cumberlwld County,
22. Denied that the monthly commission statements had been redacted from
the moment of execution of the Agreements. Monthly commission statements were
provided in an unredacled form until Defendants became aware that there was cause
for concern about Plaintiffs' intentions to perform in good faith under the Agreements,
While Kepner, as an independent contractor of the Agency, has not been accorded
unfettered uccess to the Carlisle Office file room, he has been infol'med in writing und
verbnlly that he muy guin access to files which he needs to review, by simply
requesting this of the secreturinlstuIT, For reasons stuted within this Answer and Now
.
-
.
Mutter, und bused upon Plnintifrs prior conduct, Defendunts huve found i. ;:~cessnry
to restrict unlimited uccess by Mr, Kepner to the Iile room,
23. Denied in pnrt. MI', Kepner hus full knowledge of the vnrious insureds
of the Agency, due to the development of the "A, B, und COO lists which were compiled
by the pnrties in connection with the compunion litigution which wus previously
referenced, The listing of these insureds wus obtained by the pnrtiesjointly entering
the filing room und surveying every file in order to determine its stutus. Plnintiff is
not usserting thut he is unuwure of the uctivities of his own uccounts. To duto,
Plnintiff hus not informed Defendunts us to whether it is his intention to purchuse uny
of the business of the Agency, uccounts which he clnims to huve written, or uccounts
of the Mngill Agency. Accordingly, the informution described here is irrelevnnt in uny
event, until such time us Kepner expresses his intentions,
By wuy of further reply, Defendnnts refer to their letter to Plnintiffs' counsel,
duted April 24, 1996, in which Defendunts specificully stuted the following: "Shortly,
Mr. Mugill will be providing udequute informution which will nllow Mr. Kepner to
ussoss the extent of his interest in the buyout options provided for undor the Associute
Agent Agreement,"
24. Adntitted thut this informution wus sought. Denied thut the informution
wus sought for the purpose of the buy-sell tmnsuction, Defendunts ussert thut the
Plnintiffs huve requested items of inforUlution which nre not necessnry to u
determinution of vulue 01' the upplicubility of the buy.sell provision. H is Defendunts'
contention thut this informution is souHht so thut Plnintiffs would be uble to gnin
uccess to informution which would ussist them by uccess to this trude secret und
.
.
.
conlidentiul informution, in competing' with Delimdunts und murketing' Defendunts'
business interests, Aside from the inuppropriutenessofproviding' this infol'lllution, tho
request by PluintilTs is un overwhelming' one, considering that PlaintilTs huve not even
yet indicated that they ure prepured to purchuse the business. The informution sought
by Plaintiffs amounts to upproximutely 2000 policies, which Defendunts would huvo
to sort through, in order to comply with the request. Were Defendunts to list the
information in the way they have ulreudy olTered, this would include u list of
upproximately 250 to 300 policies,
Defendants ussert thut the informution sought is inappropriute because the
vuluing of u book of insurance business results from a review of commissions and types
of business (peraonuI or commerciuI lines), not from a policy by policy review of the
book of business,
25. Denied, us stuted ubove.
26. Admitted that Defendunts refuse to provide the informution requested
which is not necessury for PlaintilTs to possess, 'l'his uvel'ment is denied to the extent
thut Defendunts huve olTered to provide Plaintiffs with information which they would
legitimutely need in order to determine vulue.
27, Denied, Defendunts ure especiuIly shocked by Plaintiffs' uttempts to
chul'uctel'ize exercising u right of up peal as evidencing bud faith, especiuIly since the
exercise of this right of uppeul required Defendunts to post a bond in the amount of
120% of the judgment which hud been entered by the Court,
u, Denied,
b, Denied, for the reusons stuted ubove,
. .
c. Denied, us expluined ubove,
d, Denied, Defendants huve uSBerted the pOBting of colluterul in
connection with Kepner's purchuse iB uppropriute, The ruiBing of this iSBue in the
context of the presentliligution is un unconscionuble effort of PluintilfB to inject the
negotiution proceRR between the purties, und positions tuken during the course of
nogotiutions, into this Iitigution, 'l'hiB colluterulizution is requested due to Mr,
Kepnor's proven inubility to muintuin his policies, us evidenced by his drumutic loss
of businesB in recent yeurs,
e. Pluintiffs huve uccess to the office of Defendunts. While this uccess
hus been limited, so Uf) to ussure thut Mr. Mugill would be present, this hus not
imposed any Iimitutions on Mr. Kepner since his uctivities ut the offices of Kepnel'
Insurunce ABsociutes for the pustthree yeurs, nnd especiully over the pust yeur, huve
been so limited, umounting to only on uveruge fOUl' times pel' month, two of which
huve been to pick up his compensution. Accordingly, uccess to the office docs not
present un issue In this cuse. MI'. Kepner hus never requested uccess wtd been denied.
In 1995, two incidents occurred which cuused b'Teut concern on tho
Defendunts' purt. On one occusion, Mr. Kepner Insisted thutthe ugency I,roduce u
certificution thut his construction businesB wus insured, even though the policy wus
not current. Without Mr. MUbrill'S presence, Mr, Kepner succeeded In bullying wt
employee into issuing u certificute of insurunce, even though the issuunce of the
certificute wus contrury to ucceptuble insurunce pructice, See MI'. Mugill's leller of
Novemher 10, 1995, On IInother occusion, Mr, Kepner insisted thut he be issued un
uutomobile insurunce identificution curd thut hud no expirution dute. Both of these
. .
requests were inuppropriute in the insurnnce industry und, ulong with other reusons,
cuused Mr, MabTjll to need to be present when Mr, Kepner is in the office,
28, Denied, Pluintiffs' nllegations of ubsence of good fuith ure fulse. Any
contention to the contrary is considered libelous, especinlly considering the countless
hours Mr, MUbTjll hus devoted to building up u respected portfolio of clientele,
29, Denied, Defendants are doing nothing more thun implementing the
terminution provisions of the contract, which involll! the buy-sell provisions, as
reflected in the contructunl ab'l'ee/llent of the pUlties, which governs their relationship,
30. Denied.
31. Denied,especinlly considering that the buy-sell agreelllent provides for u
four yenr spread of buy-out rights, with the first paYlllent due July 1997.
COUNTERCLAIM
32, Under the terms of the June 30, 1994 Order of the Honorable Edgnr
Bayley, in the case involving the same pnrties but docketed at No. 94-0394, this Court
determined that Mr. Kepner was un independent contractor of the Magill agency. not
un owner or agent (p, 10, n.3). The Court nlso observed, "Kepner is not an owner of
the MabTjIl Agency, Magill pays ull the freight." (p. 18).
33. In the Court'tl prior Ordel' 0;' June 30, 1994, Judge Bayley nlso declined
MabTjll's request thut the Court declw'e the Ub'l'eelllents between the pnrtietl terminuted,
In so deciding, the Court found thut the contructs remain in elTect, und that "the
contructs provide u remedy fiJl' the current situution in thut either purty IllUY
terlllinute upon ninety daytl' written notice to the other," '!'he Court cited
Pennsylvaniu Suprellle Court uuthority for its determinutionnot to impose u judicinl
80lution to the di8pute8 between the purtie8, when u contructuul rllmedy llxist8; Le"
tllrminution,
34. The Pluintiffs, without huving uttempted to implement the buyout
provi8ions ofthll Associute Agent AbTJ'eenwnt, or uppointing uppruisers, uro uttempting
to huve the Court imposo solution8, where the contruct itself ulrlludy provides for the
renllldy between the puttie8.
:15, 'rllll Pluintilfs' uction8, in seeking injunctive relief, by filing u Compluint
und Petition, more thun live weeks into tho tWlllvo week notice period uro in bud fuith,
und for tho purposo of frustruting the contrucluul remedie8, Plnintiffs' loUer of April
16, 1996 (uttuched) demonstl'Utes the intention of Pluintiffs nil niong not to ubide by
the contructuuJ provision8 regurding terminution,
36, The contructuul terms of the A8sociute Agent Agreement provido two
meuns ofterminuting the Agreement between the purtie8. The8e include the following:
u. Ninety dUY8 udvunce written notice by either purty (~1.01).
b, The deuth, retirement, or di8ubility of either purty (~6.01).
37. On April 1, 1996, the Defendunt formully provided to Pluintiff the ninety
duy notice of terminution.
38, The terminution of the Associute Agent Agreement creates in Mr. Kepner
an option to buyout either the bU8iness written by him, or, in uddition, the insurunce
writton by unyone else within the Mugill ugency, so long us the business hU8 locutions
within Cumberlund County ('16,01).
39, In the event the purtie8 ure unublll to ugt'ell upon the murket vulue of the
bU8ine8s to bll pUl'chused, ~(i.02 mukes very cleur provision for procedul'ell to url'ive ut
.
un uppruiBul, by uppointment of one UpPl'uiBer by euch of the pw'lieB, with u third
uppruiBer to be Helecled by theBe two (or, upon inubility to do so, by the Court). None
of theBe procedureB huve been invoked by the PluintilTBi nor huve the PluintiffB even
informed Defendunts sufficiently UB to their intentionB, to ullow Defendunts even to
begin negotiutionH over the contructuulremedies.
40. The term "diBubled" IH defined within the Agreement ut ~2.01, und indicutell
thut a pw-ty is "deemed permunl!nUy disubled if he is determined to be phYBicully or
mentully unuble to perform any 01' ull of his ordinw)' duties with respect to Mugill, Inc.
for u period of Bix (6) BucceBBive months due to ilIneBB 01' uccident,"
41. Pluintiffhus himselfcluimed to be disubled in 1995 und 1996, UB this term
is defined within the ugreement, und under other definitionll of diBubility, as utilized
by insurers and other interested pw-ties,
42, For a period of more thw\ six succellsive months, from May 1995 through
February 1996, Pluintiff applied for and was determined by an insurance company to
be disabled, WId received disubility benefits in the form of payment of Pluintiffs'
insurance premiums,
43. Delays in moving the termination forward w-e attributable to Pluintiff, for
the following reusons:
a. Following Defendant's April 1, 1996, terminution notice, Pluintiff
wuited eight duys before responding at ull, by corresponding through counsel on April
9, 1996. At thill time, Mr, Shude ucknowledged thut "Clearly, Mr. Mugill hus the right
to terminute thl! Associute Agent Agreement." The letter mukell no comment, however,
ubout Mr, Kepner'lI intentionH regurding any buyout options,
.
b. In response to Mr, Shude's letter of April 0, MI'. Milkes fweed u reply
on thut sume dute, confirming thut if Mr, Kepner needed uccess to the omce on un
urgent mutter, for which he could not reuch Mr, Mugill, Mr, Shude wus free to contuct
Mr. Milkes in order to IIddress the problem,
c, Not until his letter of April 16, 1006, fifteen duys ufter the
terminution notice, did Mr. Shade offer u first response to the terminution notice itself,
In this I'esponse, MI'. Shude now stuted, contrury to his priol' ufTirmution thut Mr.
Magill had the right to terminate the Agreement, that, "Upon further reflection, it is
our position thut the Defendunts huve no right to exercise the terminlltion provisions
or any other provisions of the Associllte Agent Agreement," However, the letter goes
on to state that, nevertheless, MI'. Kepner would be exel'cising his buyout option,
u1though there is no indication as to what buyout option Mr, Kepner was invoking,
In bad faith, and as an action obstructive to the buyout procedures, Mr. Shade then
requested numerous trade secret items from MI'. Magill which were not necessary to
implementation of the buyout provision, and which would be used to compete with or
otherwise interfere with Mr. Mugill's business interests,
d. On Apr'il 24, 1006, Mr, Milkes replied, expressing concern about Mr.
Kepner's delay in responding to the termination notice. The letter expressed
continuing concern ubout Mr. Kepner's recent uttempt to write a new policy without
reviewing this with Mr, Mabrill, uccording to standard procedures, and ubout Mr,
Kepner keeping un ugency liIe with him, outside of the olTIce. This letter u1so
expressed the expectution thut uny offer of u buyout C.'01ll Mr, Kopner include
colluterulization of the plun, '1'0 dute, MI'. Kepnel' hus Illude no offer of u buyout.
e. On April 27, 1906, Mr, Shude replied, confirming thut Mr. Kepner
retained the one fill! Bincl! the renewul dute of F'l!bruury I, 1006, which DefenduntB hud
complained ubout, ulthough thl! reply contuined nothing new with rOBpect to
implementution of any buyout, nor doeB hiB letter of Muy 10, 1006,
44, On TueBduy afternoon, Muy 14,1006, PluintiITfuxed to Defendunt, u notice
(uttuchedl, indicuting thut he would be ut the Kcpnl!r InBuruncl! ABBociuteB office the
following WedneBduy and Friduy mOl'llingB, without any mention of uny purticulur
time.
45, PurBuunt to the April I, !!J06 letter from Defendant to PlaintiIT, PlaintiIT
WUB not to enter the officeB of Kepner Inaurance ABaociateB unleBa advance
url'llngementB were made directly with MI'. Mugill, Mr, Mugill hus never intended, nor
uttempted to make it difficult for Mr. Kepner to come to the ugency officeB,
46, Thia urrangement ia conaiatent with thut Bet for in DefenduntB' counael'a
letter to PlaintiITa' counael on Mw'ch 30, 1995, in which Mr, Kepner wua informed thut
he would no cd to make urrungementa to gain acceaa to the file room and that he wus
to retul'll vw'iouB fileB he hud removed from the office. Now, it haa become neceaaury
to have advance ur1'llngementa directly with Mr. MUbrill to enter the office, due to Mr,
Kepner'a action a, If Mr, Mogillla not available, w'I'angeml!nta could be made through
hia uttorney.
47, 'I'he May 14, !!J06 fux li'om PlaintiIT wua the firBt uttempt by PluintiIT to
attempt to entor the office Hince Mr, Mabrill'S April 1, 1996 lettel', indicating that priOlo
urrangcmenta nel!dl!d to hl! mudl!,
48, On May 15, 1!)06, tho Plaintifi' briony entl!rl!d tho officl!s, and took a fill!
~
with him.
40, On May 15, 1006, Defendants' counsel fnxed to Plaintiffs' counsel a letter
(attached), indicating that Mr. Kepner could come to the office on Friday at 11:00 a,m.
and that he would not be u1lowed entry at other times on this date.
50, 'I'he May 15, 1997 fnx was Illet with no reply, written or verbal.
51. On May 17, 1900, the Plaintiff arrived at the office at 10:50 a,m. and was
told to come back at 11:00 a,m, for his designated time,
52, On May 17, 1900, at 11:00 a.Ill" Defendant's counsel appoared at the office,
in order to facilitnte MI', Kepner's appointment. Mr. Kepner did not appear.
53, On May 17, lOgO, Defendant's counsel went to tho lI1edicnl offices next
door to the Kepner Insurance Associates office, in an attempt to locate Mr. Kepner.
Counsel was informed by the receptionist that MI'. Kepnel' haa not yet appeared for
his appointment, n1though PlnintilT's truck was parked in front of that office at the
time.
51\, On May 17, 1096, at 11:30 a.m" because Mr. Kepner had still not appeared
at tho insurance office, Defendant's counsel wrote a note to Mr. Kepner (attached),
which he intended to plnce on Mr, Kepner's window, informing Mr. Kepner that
counsel was present at the designated tillle, hud waited until 11:30 a.m" and had to
leavo. When counsel went to the truck, he found that Mr, Kepner hudjust entered the
truck with his son.
55, At 11:30 a.m" on May 17, 1900, counsel for Defendant usked Mr. Kepner
if he still intended to cOll1e over to the offico und Mr, Kepnel' stated thut ho did not.
/iO, At 11 :00 n,lll" on Muy 17, 1906, Mr, Kepner was with his son, I'm' un 11 :00
, r
(
JACOBSEN & MILKES
52 East High Strcet
Carlisle. PA 17013-3085
(
"
Samuel W. MJlkes
Andrea C, Jacobsen
Tel 717 249.6427
FlIll 717 249.8427
April 24, 1996
Wayne F, Shade, Esquire
53 West Pomfret Street
Curlisle, PA 17013
RE: )'11lh>il1 v, Kepner, et ill.
Deur Wayne:
Pleu~e find endo~ed the vurious items of documentution re;prding- calculution
of profit shw'll for 1005, !l would be ),Ir, )'lu~,'ill'5 intention. under protest, to uguin
pay profit shw'e bused upon the culculution~ shown ~!l :lis handwritten notes und the
compWlY stutemen:s which accompany this letter, I,V,? will await your l'I?ply before
forww'cing paynll!!lt, You wi!! see that th'l hanc1\l1'itten !lote~ indicate how profit
~hlll'e ha~ be.m cuku!uted by compuny, !'or :~ll)se W::ic:l :mid ;,Jr'lfit ,hw'!.!, :'I!r, ),[u~,'ill
will be unuble to puy prot'it shUl'l! 'Jll tIll! t:T:C.\ UCCOU!lt becu'..!.e :II!', Kepner took the
Dickinson Law School policy from the of'f1ce und :llr, :I!ugilln!.!eds the policy to review
in order to determine whether ),Ir, Kepner is in fuct entitled to puyment in connection
with this uccount, As soon us we receive this policy back. we will be prepared to
acknowledge the LT!C.-\ payment,
\Ve ar~ und.:ur \vhut it is 'yOU ar,! :.l~~.;ing frJl. wilh rQ~pect tu 19H4. Please
specify, Surely you w'e aW:'l'e t;lat :I[r, .\Ia::::! fllrw:lrded payment to :llr, Kepner ill
April 1995 for 1994 prollt shw'e,
In reviewing your letter of April 16, lL1!JG, we of course disab'1'ee in the strongest
terms with any a~,':rtion thut ),[1', :\[uuill i, in bl'e:tc:l. T'l the contrary, ),11', Kepner
hus nlllterial!y breached the .\;!TI:l!ment in nUlller<Jl!:i ways, el'en ;;ince the litigation
betw'!en the pani'!,;, ! wlln't ;.!') Intll cetai: n,)\I' bllt ! '.',"Juld dw as un example the fuct
thut he 1"!Cent!;: ut:clllptel! tl) II'I':t,! a !)I)I:C:,' ,,\';t!! !l':!ln :\utiunullnsurunce COlllpuny,
without :\11', .\1 a [,ri 11 , :i uprrlll'al, despi:e '\11', ~.[;l;r.!l':i I'"ry opeci!1c directive thut us owner
of the business, he wus requirin~ :\[1', Kepner, us his independent contructor, to review
new writin~s with him, We have been over this palm mUllY times in the past Wld
there is ubsolutely no doubt thut :'v[r, Kepner knows tlle procedures but chooses to
flaunt his disregw'd of them,
Shortly, :l'lr, :'Iluhoill will be pro"idin;.! adequute inforlllution which will allow Mr,
Kepner to u~se~s the ext'!l1t of his interest in the buyout options provided for undel'
the Associut!.! Agent Agl'lwlllent, This will include kInd of account, premium WId
(
(
Wayne F. Shade, Esquire
April 24, 1996
Puge Two
C0lllIIl1SSI0n for accounts with business in Cumberland County, Your requcst for
names, addrcsscs, and policy numbers of insurcds we see as an example of soliciting
information which can only be intcnded by Mr. Kepncr us a means of attempting to
divert insureds or to otherwise use the information for some other purpose contrary
to the interests of Mr, MUj,rill, There is no reason that an individual necds to know
this specific information in order to dctermine valuc, Wc see this example as simply
supporting our position that ;vIr, Kllpncr's ulterior motivcs are not just to look out fOl'
his own financial intcrests but to othllrwisll sell, divert, or compromisll the intllrests
of Mr, Magill in his oWllllrship of this businllSS,
You indicutc that ;vIr, Kepncr would bll interestcd in paying for the businll5s
ovcr time, We will of coursc expect that any suggestion of a buyout by Mr, Kllpner
inc1l1dll colluterali::ation, In any event, WI! await :VII', Kepner's offcr as to what he is
prepared to pay, and what categor;.' of policies his is offering to purchase,
We understand that the ninety day period is tight, Fiftllen days of that time
have all'l)ady passed befol'e WI) recllived WI expression of buyout interest from ~Ir,
Kepner, ~lr, ~[a:f.!l will do xl lie can, as will 1, to keep thllse discussions mo\'ing
fllrward. be:;'innin:; with hiti supplying ,)1' inforUJat:on about bU:iine5S in the county,
We are not in agreement with any suggestion about escrowing funds, As you are well
aware, the Agrcemllnt provides for a mechunism for valuation, which does not include
petitioning the court for equitable relief, There is u remedy provided 1'01' under the
contract und that is the l'l)medy which should be exercised if the pUl'~ies cannot come
to an ab'Teement,
We also remind :VII', Kllpner that hll currently owes the agency 81).12,20 to\\'w'd
a previous balUllce of $992,20 on past hllalth insurUllce premiums. ~\'Ir, Kepnel' haB
been aware of this for months lllld has failed to reimburse the agency costs actually
incurred on his behulf, The :Vll1l,rill agency will deduct the bulance from future
disbursements if ful! payment is not made promptly,
Finally, ! n~!llind you t~lut !n '':Ullll':tttO!l Wi~!l nur Uppl~u!l ~.lr. ~.!a~!l! pj~tl:d a
bond. Your thr~atti I)t' e.':ut:t1~:C!1 :.In'~ ';n.r:1~<Hnent COllstitule unneL:'..:~~w'y UH'ij~t.-:.
which serve ollly tll illHume the oittlatillll,
Very truly yours,
,JAC~EN.& WLI~S.-
///'4/<<'"
I~--::/~b'
,BY: 'Sunluel W, ~lilkes
SW11\jlc
Elldosura
,....
"
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\J \\"-,, "2 ,:l ~~ . \ S
i'<\a ~ I\~~'~~
'l\"i'. ~ ~. \ ,~\~. ~~
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, '
'.
(
1995 Profit Sharing Statement
Personal Lines
MAGILL INS SERVICES. INC
MAR RISBURG,PENNS YL VANIA
2e.3772
~~
~ U S F+G-
111I111t I
l';UI"ry,"'l p""""" Th,..nOla: U25, DUO
,eas QUII,IyI"'l Wnnon Prem,um: t131,~~9
Prafll Paymenl C~lculllion
Tarolll Rat'o
Leu: Len R.1I0 IS~B,81~ .IVI.e. by $12B,9031
C~mmil"on Raila ($22,\21 divided by $130,:64'
ComLJin.d lOll .and Commiuion RatiO
11.ax
4S.9:'
17.0~
62.U
Prolit Raila (71.0~~. mlnUI 8:2.90/.)
B .1:<
Profit FICICI \fram P.nonal Unu Profit Bonul Tlol.1
Profil Payment (0,62% of S129,S031
O.6;:~
$lIOS
Growlh InclnU.. Payment
Calculallan
CIJrutnt C.alendU Year Polley CQunt
PrIer C.;lend;r Ye~r Policy Count
Nat IncrIHI~u'tCecrllu.) in Polie', C"unt
284
271
---
1J
RECfJ'i!Jj
Grcwt" Po,cent..e \ 13 elvldoo by 27 '}
4,80;:
VEil :: 'J ':":;,
MI\G.\lL \N~Ui\J;;:C'::
G,'Qwl" C'Jt:cr 'Frcm P"'~cn:al I..:ne~ Crew In ":".1CICI
o .00:,
~rcwth '~ct!"ll~.. ;:avm"nr ,0 CO", cl 5305\
10
Total Per$onaf Lines Profit Sharing Payment
$805
Agency Preductlon and lass Reconciliation Inferm.tlc"
:i..::C1:J1
'131,;:10
'1,31:
0
1,315
1.9.903
'4' ...
_.:.,......,.
. , : J::
,
.
1,135
1:10,264
65.06a
a
297
0
5,159
5,446
59.61~
Z2.Z82
155
22,127
Elrnla p,.mtum
\"jrcn !.;tlnlMcar 'tear f.rnca r~eml\,;m
Len: Ineliqlble SUIln...
uncoileCI.d Premium C~.rGe<l.C"
S",Cttt:l1
EliCJlblfl C.llerC:lr Ye3r :.1rrf!d P'I!,...IC""
wrItten PremIum
~,c,~ "':.1ler::::r fOfJr ..r:t:UM "'~~'..:-
un :r-C!ICfltIC :wtln~S:i
'..J~ccllcctac Pr~!'T'III..::-, '::.,,"~':r..;::'
.. ~,~,.
Incurred L....I
EliGible C~lonoar Vear finne" Premium
erals C.llenOir Year lncurf.a Lone.
Lon: Ineligible P.,d Loues
Inellqlbl. R.11!rve Ch:angu
Lall UmltatiC"I
Unallcc:lled Lou '\dj~11",,"nl EJct!n!cs
InculT1Id Commilllonl
EIiU,bl. C~lend.r Yoar IncurrlM1 LCnQl
Grall eil.nUr Y.~r tr.curr.a C.::mnuUIUI1
\..en: lnoilg'ble BU&ln...
!Ilglble C~lenoar .....r Incur~ Cem",;",e.
a2l14/"
C~OC' Ilumber' 50070766
.... - .- --,...-.. ........- ...- "'" .'." .. '. .-..-
,
Ulthem
(
1995 AGENCY PROFIT SHARING AGREEMENT
IUALTT 1MuuIIa: CIOUP
+
For: Anthem Casualty Insurance Company
37' 19211
AGENCY KEPNER INSURANCE ASSOCIATES
50 BROOKWOOD AVE TUDOR PLACE S
TMM
10
CARLISLE
PA
170139173
Combined Codes:
37 1423 37 1936 37 3941 37 4900
A. Qualifying WrItten Premium lor 1995
207,625,37
B. Qualifying Wrillen Premium for 1994
191,684.78
C. Earned Premium for 1995
196,662.91
0, Limited Incurred Losses fcr 1995
81,660,27
E. Limited Loss Ratio (D ! C)
41. ::
F, Prollt Sharing Perc~ntage
.75
I I '."Ir:t~~n ?~vrrlums
I L.m,led S50,000- I S100,OCC': s::co.r;co. ~:t;C,C<:C' . !::c.cc:.: ~750,cco'l S1,QCQ,Qco,i SUGO,cco-; S2.000.COO 1
Le.. I
Rollo 99,999 199,999 I 299,999 ! ~99,999 , 7~9,999 I 999,CCO SI,J99.999 I S1.999.999I and UP
0-25 I 3,00% 3,00%1 3.25~/C \ 3,75%1 5.00%1 '" "'00/0 I 6,00%1 6,50%1 7,00%1
.....w I
26.30 I 2.00 2,00 \ 2,25 2,75 <1,00 I <1,50 I 5,00 I 6,50 I 6.00 I
I 11.1'" I 1 ,CD 1,CO I . '::5 1.:0 ;2,CiJ 2,25 2.:0 ~ -- I 3,CO
w ww I , './~
::6-40 i ,75 -'" 1 ':C .. "':= .. 7:: 2.\.:0 2 -- I 2,::0 2,75
,I w ._L.... j.1 _ ,~::
41.45 I ,50 ,SU 75 .. ,'"" , :u 1 -;:, 2.::0 2.25
I.....'.: I 1,/... I
46-50 ,25 ,25 ,50 ,75 1.Z: i.5\J 1,75 2.GO
51-55 0 0 ~<; ,EO 1,CO 1,25 1,:0 1.75
,(.w
G. Performance Compensallon (A x F)
1.557,19
175 Man.field Avenuo . Shelby, Chlo ~40i5 . ~1"~~7'IBBO
..
{
.
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(
MtI'l'UAL BENEFIT INSURANCE COMPANY
409 Penn StUlit
Huntingdon, PA 16652
(814) 643-3003
1995 CONTINGENT CDMMISSION STATEMENT
5485 -
4782 -
MAGI~L INSURANCE SERVICES, INC
MAGI~L INS. SERVICES. INC. T/A
Written Premium Less Dividonds
s
Writ. Premo (Less Dividends) Growth Percent
Private Passenger Aute Mix
Incurred Loss/!arned Premium Ratio
Earned Premiums Less Commissions , Di~idends $
Incurred Loss , t'dJu5t~nq E:lpenses 5
E~cess of 5l00,000 LC5S 5
Unde:~:it~~; E~pensc
0: Prem:.'.:;nsl
( , C'
_.i
State ?:erniu~ Ta:~
(2\ c: ;:rp.miulT'ls)
Ycur Agency's 1995 ?rofit or Loss Balance
Less Ea~ance, i~ any, Ca::iec :r:m :994
Net Agency ?rcfit cr ~cas 5ala~ce :cr 1995 S
ccnt~ngent C:mrnission Cue ~our Agency (10.00\) S
Volume Incenti~e Bonus
(+l.25\1
:C':'.'\:' ,\;1Ct::j':' :t:z
..-..-
.1.......
.;~z::c:.! ;;C1\ .:.g95
5
339,431.07
19.5 ,
9.9 \
38.4 .
.
300.292.04
:36.213.03-
.00
50,914.00-
5,788.62-
106.3;5.73
.00
:'J6,37:.7:!
:0,63;.5;
4,242.88
5
5
5
$
s
:4..aO.4:
,....'" c.c. ;00 U~.C.'''11 1'''''.:U,u.. .&.11::) ;lY;:) "L' J.'~l-':1C.:I.:J
MUTUAL SENEFI~ INSURANCE COMPANY
409 Penn Street
Huntingdon, ~A 166~2
(8141 643-3003
1995 CONTINGENT COMMISSION STATEMENT
145485
MAGILL INSURANCE SERVICES, INC
3675 VARTAN WIW
HARRISBURG
PA
17110-
Written Premium Less Dividends
~rit. Premo (Les3 Dividends) Growth Percent
?rivate passenger Auto Mi~
!ncu:~erl tC5s/~arned ?r~mium ?at:c
Earned Premiums Less Commissions & Dividends
:nc~r:~d Less & Ac:~sting Expenses
E3cess cf 5:00,000 Less
Under'~:i:ing E:tpense (15~ of Premiums)
St~te Premium ~ax (2' cf Premiums)
?cu: Agency's 1995 ?:::it C~ :C95 3a1ance
:.=sz ELi:.Jnc:~, i: ar.:!, Ca:,:ied Fr:r:\ 199.1
~let A~er.cJ ?rcf~t c: :css 3a13~ce fer 1995
Contingent Commission Due .our Agency (08.00;)
Volume Incentive Bonus
(+0.50\'
~OTAL AMClnlT DUE ~OUR AGENC1 .OR 1995
"'.1..L
s
1iO,GOO.07
?O .,
.
8.5 .,
~
5i.0 ~
5 :55,799.45
5 106,736.~8-
5 .00
S :5,530,01-
5 3/412.00-
5 20,061.16
5 :a,37~.6C-
S ;,c:a,!~
S 775.06
5 853.00
$
1/628.06
,~
,
(
MUTUAL BENEFIT INSURANCE COMPANY
409 Penn Street
Huntingdon, PA 16652
18141 643-3003
1995 CONTINGENT COMMISSION STATEMENT
144782
MAGILL INS. SERVICES, INC. T/A
KEPNER INSURANCE ASSOCIATES
TUDOR PLACE SUITE 1 2
50 BROOKWCOD AVENUE
CARLISLE ?A 1;013-9221
Written Pre~ium Less Dividends
Writ. Pren. (Less Dividends) Grcwt~ Percent
p:ivate Passe~ge~ Au:o X~:(
!~c~:=gd :CS3.!!~:~e~ ?~~~i~~ Ra~~c
Ear~ed Premiums Less Cc~missicns & Dividends
:~cu:~!d :css S Adjust!n; ~::;e~s2s
E~ce5s c~ 5100,000 tess
Uncer'..l:!.tinc; :::cpense (:':i c~ ?:c:r.:'U::ls)
State Premium Tax
(2'\ of Premiums)
~=~: ~;2r.=:'S :J9: ?:==~: c: :ctS Eu:a~c~
:'C;.3 =.l:J.::ce, i: an':" Cil::~e~ ::CW :99~
:Je~ Agenc~ Prcfit c: :~~~ aala~c2 ~=r 1995
Contingent Commission Cue tcur Agency (OB.OO~1
Volume Incentive Bonus
(.1.25~)
':'CTAL AMOUNT DUE 'LOUR AGE:IC'1 FOR 1995
s
l6a,SH.oo
~. . ~
..........
11.4 '1\
.. . ~
-. .-
S :44,492.59
5 29,4;6.75-
S .00
5 25,324.65-
S 3,376.62-
s e6,!:4.57
S .OC
s E6,::.:..~.5-;
S 6,905.16
S 2,110.3S
s
9,015,54
(
;
.. U -r ~c:; "'"
,4 ,'1';l..'
..
"
,
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\"S' --1- 'f., \~,1-:"\ -. 2..'2~~.\~
I CUST~MER PERFORMANCE {P~N I
as of 12/31/1995
for
MAGILL INSURANCE SER INC.
I Performlncl PI In 'Wrltten Plln Bonul
Premium X Factor .. Amount
privete PBssenger Automobile $0 ,000 ~ $0
Personal Lines (exel. PP Auto) $0 ,000 ~ $0
Workers Compensation $187,533 3 .492 ~ $6,549
CommerCial Lines
(exel, Worker.. Camp.) $2 t 1 ,757 <\ 255 " $9,010
,.
Bonds $142 ,511 " $1
..
Gross Perlormence P!en Bonus $15 560
'Wllllen
Premium
x
Plan Bonus
F~clor .. Amount
CGG " SO
..
,450 .- 5953
,.
,coo " so
'.
~:,,~
..-.......
I
I Puformance Plan Plus
Fmlonal Lines (exel. FP At.;IO)
so
Cemmerclal L:r.es
(exel. Workers Camp,)
Bonos
$21 1 ,757
$142
Gress Performance Plen Plus Bonus
INELIGIBL2 FeR FERF
I Retention Bonus I
Gress Retention Bonus
FLAN FLUS -
BELGW Ml:-lI ',\L'.'
'Written
Premium
F~E\'! LM ;:e.: II1 RE~t~ENi
PI~n Bonus
X Factor .. Amount
$399,290
,G040
S',597
[~E'_!GIELE FOR REiENnON eCNUS - BELew \1:'I:'.~LM FtiE\I:U,' FE:U:RE\,~E~IT
iClal Gross Bonus Earneo
~.=
'i
.1
'I
I
Less Less limitation Charge
Net Bonus Earned (Less Charges)
Length 01 T1me Factor
TotBI Net Bonus Earned
$399.432
(',...,..
....u.:.
Sc~':
s ~ d 721 I
loa
514,72 !
"Direct Qualifying Written Premium
7,A.J"6 Ed, 4-9"
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('
MILLERS
MUTUAL
~~,.oanJl"
HARRlSBURD. PEN"SnVAN1A 11101.1248
O~ NORTH F'RONT STREET' BOX 12.& . '172.32.321'
MAGILL INS, SERVICES,
3675 VARTAN WAY
SUITE 202
HARRISBURG FA 17110
INC
January
I"ll;':.", ..
Il"U,r\,.,:..,
- '.oJ '.J '...!..'
11. 1996
l~ :-:.::" .' f.
I...." 11.,
" ."11
1r1'1~1 r II! ..,
"hil',. ,
).,1'"
" " " ,~;
Gentlemen:
The followinq is your Contingent Commissior. Statement !or the year
ending 1995:
1137 1243
Minimum P=emium:
$50,000
Writ~en ?~emiuml
1995
$78,251,00
.::C'
-.. ...,
56:,S:=.cc
NET
CHi\;-iOZ
"
no
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.. -:: : .,.,
.... ... ,..
.....*.***.**..*w.w....**..~*~~..~._~..~w~.w***w~~~~~~...~....~,...;.
Earned pramium:
':72,98::.::
Incurred LOBses & ?a:d Adj:
LOIlIl Ratio.
S:::4,5i:.:':
lE'\. 4 ~
Total Additional Commi~sion:
~ ,.
, '. "
. "
- - -
-""... ..
, '4';_ "
Contingent Earned:
Productivity Adjuetment:
NO PAYMENT DUE BECAUSE OF E:(CESS I'll:: LOSS R.\:':C.
r;;)
,,5~
:/
IT SHARINC STATDU:NT
CAl.DlUA1l YEAR 199'
(.
MAGILL INS SERVICES IHC
HARRI.BURG BRANCH OFFICE
i'YPE AGENCt CODE
I 427742
SEE .. BELOW
557,844
628,829
0.867
604,870
391,447
16.014
4,537
6.356
!86,3:6
63.3
0.000
:.000
11,000
0
AGENCT
(1) CURRENT YEAR WRITTEN PREMIUM
(2) PRIOR TEAR WRITTEN FR~~IUM
(3) GROI/TH BONUS RATIO
(I) /(2)
(4) CURRENT TEAR EARNED PREMIUM
(5) CURRENT YEAR INCll~RED LOSS
,
i (6) STOP LOSS ADJUSTMENT
I
;
I (7) U/'JOLUNTARY A5SZSSH.E~li
I
I
I
I (8) OI'IIOENDS
(9) ADJUSTED INCURRED LaSSES
j (S) - (6) . (7) - (3)
!
I (10) ADJUSTED LOSS RATIO
i
I ((9) / (4)) ~ 100
I (II) PROPIT SHARING RATIO
I
I (FROM TABLE)
I
j (12) OaC\lTIl POIlUS F.\C70R
(FRCM .AllLE)
! (13) ADJU5'l'EO PROFIT SHARINC "'.\i:~
i
I o I) x (2)
,
(14) PROfIT SIlAnING AMOUNT
((13) X (4)) / 100
" TillS IS A COMBINED STAlE~E:IT, SEE NE:\'i PAGE FOR L:S'l' or CODES INCLUDED.
l20 RIV, 7,8&
:1r-
.......
. Contit(... nt Comm1ssion Calculatiol(
. -,
,.orthwcstern National Casualty Company
NN Insurance Company
Northwestern Nadonal Uoyd's Insurance Company
Pacific Nadonal Insurance Company lA Callrornla DomicHed Company)
Pacific Automobile Insurance Company (A Calirornla Domiciled Company)
StatcsDl2n Il\SIU'ance Company
...,.:nl
MAGILL INS SVCS INC
3875 VARTAN WAY
HARR I SBURG PA
17110-909
....Pllf't flI.l"'DI' "~'Iaul aUlc.
73.7331' EAST CENTRAL REGION
".'eem,nt fOliC SIOIl 10" .amount flu curr.n' yel"
2700 500,000
C:~I'IIU1fG Ill'
, 2/ 3 , I 9 5
. I SO ,000
\, '" cuii'.nt~'ft"r I, "Prior ,,...' ., ~; /II":n1I1I", :1'I"nn_
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. II I lO . . < 392 I; .
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INC~tJD:S 3lJ5lNES5 'HR.i~7:'~ 1~~:::1 :'uE':C'{ 'lu\1aE:;(Sj7]'7'J7~
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^"UtnC'~ 111.111I
.n Wtlt '...."flrt SOrc'
e'&llilk, ''rMI)lunl.
17Ull
.
.
.
10.
By not filing a Motion for Post-Trial Relicf within ten days
from entry of the Decree Nisi, Plaintiffs indicated their
acceptance of the decision in this case in spite of the denial of
the requested adjudication that the controlling agreements were
null and void as to Plaintiffs by reason of Defendants' several
material violations thereof.
11.
Against the obvious weight of the credible evidence,
Defendants manifested their determination to continue this
litigation by filing a Motion for Post-Trial Relief.
12.
As a result of Defendants' filing for post-trial relief,
Plaintiffs filed a subsequent Motion for Post-Trial Relief in the
second ten days after entry of the Decree Nisi to protect the
record against waiver in the unlikely event of modification of
the Decree Nisi by your Honorable Court.
13.
In their Motion for Post-Trial Relief, Plaintiffs expressly
stated that they would withdraw their Motion if Defendants were
to withdraw their Motion.
14.
Upon denial of their Motion for Post-Trial Relief,
Defendants appealed to the Superior Court.
15.
The Superior Court reviewed the more than 1,700 pages of
record that Defendants generated and reproduced in an attempt to
-3-
WAYNI! I'. SUAIlI!
^lIotnry 111.A\II
,5JWut 1".l\hrISU1'C'1
{',ditlt, 1'mn1)'lvania
1111I]
.
.
.
confuse the issues in this case and rejected the appeal in one
sentence of a memorandum opinion which stated: "We agree with
the trial court's analysis and will not expand upon the reasoning
set forth therein."
16.
Notwithstanding the conspicuous lack of merit of their
claims of error, Defendants have continued to prolong the
litigation in this case by filing a Petition for Allowance of
Appeal with the Supreme Court of Pennsylvania on or about April
12, 1996.
17.
Prior to filing their Petition for Allowance of Appeal to
the Supreme Court and with obvious knowledge of their intention
to do so, Defendants served notice upon Plaintiff KEPNER on April
2, 1996, of termination of the Associate Agent Agreement. A copy
of the notice is attached hereto as Exhibit "C".
lB.
In said notice of termination, Defendants asserted that the
termination was for just cause and cited, as grounds for just
cause, contentions that were expressly rejected by your Honorable
Court in the pending litigation.
19.
Plaintiffs believe and therefore aver that Defendants are
asserting just cause in an attempt to invoke the provisions of
Paragraph 3.03 of the Associate Agent Agreement which would
forfeit the right of Plaintiff KEPNER to profit sharing
compensation for the first half of 1996,
-4-
WAVN!! F. SIlA\l!!
Atlonwy .t I....
51 Wrat I\x'uhri Mlret
('"liaw. l'mnl)lvlna.
l1UIl
.
.
20.
Article VI of the Associate Agent Agreement gives Plaintiff
KEPNER the right, upon termination of the Agreement, to purchase
all insurance business written by anyone with Defendant MAGILL,
INC. for insureds which have locations in cumberland County even
if they also have locations outside Cumberland county.
21.
At the time of execution of the Agreements on January 31,
1991, Defendant MAGILL, INC. had hundreds of insureds in its
Harrisburg office.
22.
Defendants have redacted the monthly commission statements
of the agency from the moment of execution of the controlling
agreements and have excluded Plaintiff KEPNER from the file room
of the Carlisle office of the agency for more than two years.
23.
In contrast with the insureds af the former Kepner agency,
Plaintiffs have no knowledge of the identities of the insureds of
the Magill agency and as to which insureds may have locations in
Cumberland county.
24.
After being served with the termination notice, Plaintiffs
requested of Defendants the following information with respect to
each insured to enable Plaintiffs to value the policies written
by representatives of the agency other than Plaintiff KEPNER for
the purpose of the buy-sell transaction:
(a) Thc namcs and addresscs of the policyholders;
-5-
WAVNH F, SIIAIlI:
AnumC')'.I"'w
5) Wnt lunr'M Slun
('..lide',I'rnnI)hania
11UII
(bl The company with which the insurance is written;
(c) The policy number which would reveal the type of policy
and risks insured;
(d) The annual premium for each policy; and
(el How long the insured has been with the Magill agency.
25.
Plaintiffs need the foregoing information because all of the
requested items are important valuation factors as bearing upon
the desirability of the business and the likelihood that it can
be retained after purchase.
26.
By letter of April 24, 1996, Defendants indicated that they
would refuse to provide the requested policy information and that
it was not necessary to valuation of the pOlicies.
27.
Plaintiffs aver that the following conduct of Defendants
indicates an absence of good faith on the part of Defendants with
respect to the termination procedure in general and the buy-out
provisions in particular:
(a) filing an appeal to the supreme Court which is devoid
of merit;
(b) asserting just cause termination upon grounds which
have been expressly rejected by your Ilonorable Court;
(c) refusing to provide policy information which is
fundamentally essential to valuation for the buy-sell;
(dl attempting to impose upon Plaintiff KEPNER a
requirement to pledge collateral for the deferred payment
-6-
WA\'NI! F, SIIAIlI!
AUumry Itl..lw
~) Wrl1 1\.nhr1 Sltrtl
(',lIi,k, 1'rnn1)'lunia
171113
provisions of the buy-sell where there is no such requirement in
Paragraph 6.02 or any other provisions of the Associate Agent
Agreement; and
(el restricting the access of Plaintiff KEPNER to the
office that Defendants are contractually required, under
Paragraph 2(b) of the Agency Transfer Agreement, to maintain for
Plaintiff KEPNER to only when Defendant MAGILL is present.
28.
Even if Defendants were to agree to provide the requested
policy information, Plaintiffs aver that the absence of good
faith on the part of Defendants makes it impossible for
Plaintiffs to accept the word of Defendants as to which of the
hundreds of policyholders of Defendants have Cumberland county
locations so that identification of the policyholders and an
independent investigation by Plaintiffs are necessary.
29.
Plaintiffs believe and therefore aver that it is the
intention of Defendants to cut Plaintiff KEPNER off as of July 1,
1996, from the hundreds of insureds that he brought to the agency
by terminating all office support and all commission payments to
Plaintiff KEPNER.
30.
Plaintiffs further believe and therefore aver that it is the
intention of Defendants to attempt to gain an unfair advantage
over Plaintiffs by attempting to terminate the livelihood of
Plaintiff KEPNER while also refusing to pay to Plaintiff KEPNER
tens of thousands of dollars that your Honorable Court found more
-7-
WAVNU F. SIIAIJI!
Atloft\t)' at I~w
" Wut l\mrrrt Slltrl
C.rli.&t, 11m,")'lnnla
171111
than a year ago that Defendants should have paid as much as four
years ago.
31.
If Defendants are permitted to terminate the Associate Agent
Agreement prior to payment of the judgment in favor of Plaintiffs
and prior to completion of the buy-sell procedure, the ability of
Plaintiff KEPNER to exercise his rights under the buy-sell
provisions and the business reputation and relationships of
Plaintiff KEPNER will be harmed in ways that would be irreparable
and incapable of being compensated by money damages.
WHEREFORE, Plaintiffs respectfully request that your
Honorable Court issue the following equitable relief to prevent
Defendants' gaining an improper advantage from their wrongful
conduct and to preserve the status quo until the merits of this
case can be heard and determined:
(al Defendants be enjoined from terminating the agreements
among the parties until payment of the judgment in favor of
Plaintiffs and against Defendants and until completion of the
applicable buy-sell procedures;
(b) Defendants be required to provide Plaintiffs with the
policy information requested herein to be verified by an
inspection of the insurance files of Defendants by an independent
third party designated by the parties or by Order of Court; and
-8-
! /',.
. .\'..
. .
.
. '.
'rillS /lGlmEI.mUl',
..
by and among HON/lLD
/lGEI~eY '1'IU\H5FEn "GHEm.lEH'1'
tJ " t
madc thi::;')~-:'_ day of ~~'~I:::J
, 1991,
L. KEPUEH and KEPUEH IUSUH/lueE, IUe., a
corpo~ation organized and exi::;ting undcl: the laHs of the
'commonHealth of Pennsylvania, of the first part (hel:einaftel:
referenced respectively as "Kepner" and "Kepner"Inc."1
A U 0
'.
MAGILL INSUR1\NCE SERVICES", INC., a corporation organized and
existing under the laws of the commonwealth of pennsylvania, of
the second part (hereinafter referenced as "Magill, Inc."I.
.
WITNESSETH:
WHEREAS, Kepner, Inc. is an insurance agency with a "book of
business" which, for the purposes of this Agreement, is defined
as all insurance policies or binders in effect prior to November
1, 1990,.,but not inoluding the corporate name of Kepner
Insurance, Ino. or any of the furnishings, fixtures or other
tangible physical assets of Kepner Insuranoe, Ino.,
WHEREAS, Kepner, Ino. desires to transfer the book of
business of Kepner, Inc. to Magill, Inc. exolusive of all
,
accounts receivable of Kepner, Inc. with respect to the book of
business attributable to all policies issued, completed or
renewed by Kepner, Inc. prior to November 1, 1990, and free and
clear of all c~aims that may be asserted as a result of policies
of insurance sold by Kepner, Inc. prior to November 1, 1990, and
WHEREAS" Magill, Inc. desires to assume ownel'ship of the
aforesaid book of business of Kepner, Inc.
EXHIBIT "A"
_..I,
...',
" 0.'
, \'
. '
,/ ..} ..~ " .
','
" ,
'.
NOH, TIlEREFOHE, in cxchangc rot' thc mutual promiscs and
"
commitmcnts sct forth hcrci.n, thc partics hcrcto agrcc, as
~
follows:
1. KcpncL', Inc., hcrcby transfcrs to Hagill, Inc. all
'propdetary interests in the book of busincss of Kepner, Inc.
accruing on and' after Novcmber 1, 1990. Thc transfer shall
include but not be limited to all insurance records, dally
reports and expiration notices of policies and renewals of
policies in force and shall include all supporting documentation
and all records of Kepner, Inc. pertaining to the policies
whatsoever as well as the good will of Kepner, Inc., if any.
,
2. The consideration for the transfer is, as follows:
(a) The terms and provisiona of an Associate Agent
Agreement among Charles L. Magill, Magill, Inc. and Ronald L.
Kepner executed concurrently herewith and incorporated herein
by reference as though fully set forth,
(b) Magill, Inc. shall maintain the office referenced in
Article V of the said Associate Agent Agreement which shall
be operated under the fictitious name of Kepner Insurance
Associates I and
(cl Magill, Inc. shall maintain errors and omissions
insurance coverage upon Kepner, Inc. and Kepner with coverage
limits of at least $500,000 and with coverage including "full
prior acts" pertaining to the book of business of Kepner,
Inc. Copies of all applicable policies and renewals shall be
providcd to Kepner, Inc. and Kepner.
-2-
. "",
.. ~tl~'"
.. ~ ~4:~
." .,p!tl' "
"\",,
/':~~~l"
3. All accountn receivablc of Kepner, Inc. attributablc to
policies issued, completed, dcliver~d or rencwed by Kepner, Inc.
prior to NovcmlJcr 1, 1990, and all profit nhar1ng or contingency
amounts payable to Kepner, Inc. for calendar yeaL' 1990 by
,insurance carriers due to favorable claims experience res.llting
from all policies issued, completed, delivered or renewed by
Kepner, Inc. prior to November 1, 1990" shall be delivered
"
immediately by Magill, Inc. to Kepner. Kepner shall maintain
such funds in a sepa~ate account to be applied toward any
accounts payable of Kepner, Inc. attributable to the book of
businesS of Kepner, Inc. Upon satisfaction of all such accounts
payable, any balance of the fund may be distributed by Kepner,
,
Inc. free and clear of any claims of Magill, Inc. Kepner, Inc.
shall be responsible for paying all accounts payable of Kepner,
Inc. as of the close of business on october 31, 1990; and Kepner,
Inc. hereby expressly agrees to indemnify and hold harmless
Magill, Inc. against any and all claims made with respect to such
accounts payable. Kepner hereby guarantees th~s obligation of
Kepner, Inc.
4. Immediately upon execution of this Agreement, Magill,
Inc. shall register the fictitious name of Kepner Insurance
Associates with the Commonwealth of Pennsylvania, Department of
state. Kepner, Inc. will then cease all further insurance
business for the duration of the aforesaid Associate Agent
Agreement. In the event of termination of the aforesaid
Associate Agent Agreement, Magill, Inc. shall no longer be
-3-
.
entitled to utilize tho Kepncl: I1<1O\e in any (oJ:ln without the pl:ioL"
wl:itten consent of Kepnel:.
5. ~lagill'~ rnc. shall not engage i tseH in the insul:ance
"
business with any othel: corpol:ation 01: partnel:ship 01: entel: into
'any' equity pl:oduction agreement in Cumbel:land County,
Pennsylvania, without first obtaining the written consent of
Kepner.
"
6.
Magill, Inc. shall not tel:minate or cause to be
terminated any agency agreement with any insurance company with
which Kepner was licensed pdor to November 1, ],990, at any time
without the prior written consent of Kepner.
7. Magill, Inc. shall not transfer or rewrite any insurance
,
policies that have been written by Kepner, Inc. to another
insurance company without the prior consent of Kepner.
8. Kepner, Inc. will cooperate with Magill, Inc. in the
smooth and efficient transfer of the book of business of Kepner,
Inc. to Magill, Inc. inclUding the issuance of a letter to each
of the insureds of the book of business of Kepner, Inc. at the
expense of Magill, Inc. informing the insured of the relationship
of Kepner and Magill, Inc. and of all other pertinent matters
concerning the transfer of the book of business of Kepner, Inc.
to Magill, Inc.
9. Kepner, Inc. hereby warrants to Magill, Inc. that there
are no known creditors or claims pending against Kepner, Inc. on
account of any policies of insurance that were issued, completed,
delivered or renewed by Kepner, Inc. prior to November 1, 1990,
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"
, :l
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, and that, at the date Lf execution o~ this Agrpement, Kepner,
Inc. is unaware 9f any claims, actions, complaints, suits,
demands or other legal proceeding::; either threatened or pending
against Kepner, Inc. Kepner, Inc. shall indemnify and hold
'harmless ~Iagill, Inc. with respect to any such claims, actions,
complaints, suits or other legal proceedings relative to policies
issued, completed, delivered or renewed by Kepner, Inc. "prior to
November 1, 1990. Kepner hereby guarantees ,this obligation of
Kepner, Inc.
10. Any and all notices, designations, consents, offers,
acceptances, or any other communications provided herein. shall be
given in writing by certified mail, return receipt requested,
addressee onl~, and shall be deemed to be given on the date of
mailing. They shall be addressed, in the case of Magill, Inc.,
to the principal office of Magill, Inc., and in the case of
Kepner, to 1472 zimmerman Road, carlisle, pennsylvania 17013, or
to any other address which may be designated therefor by Kepner
to Magill, Inc. in writing.
11. If any action at law or in equity is necess~ry to
e~force or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorney fees, costs and
expenses of litigation in addition to any other relief to which
the prevailing ~arty may be entitled.
12, The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as
,
-5-
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though Guch invalid or unenforceable provision:.; ~Iere oll1l.tted.
13. No change or modifi.cation or' this l\greell\ent :.;ho111 bc
,
cnforccable against any party unless thc same shall be i.n writing
and s~gncd by thc party against whom enforcement is sought.
14. This l\grccment rcprcscnts thc cntirc agrccmcnt bctwecn
or among thc partics with L'CSpcct to thc subject mattcr hercof
and supersedcs all prior agrecmcnts and "undcrstandings with
respcct thereto.
15. This l\greement shall be governed as to validity,
interpretation and effect by the laws of the Commonwealth of
pennsylvania in effect at the date hereof.
,
16. This l\greement shall not be strictly construed against
any party hereto. Whenever the context shall so require, all
words herein in the male gender shall be deemed to include the
female o~ neuter gender, all singular words shall include the
plural and all plural words shall include the singular.
17. This l\greement shall be binding upon and enforceable by
the parties hereto, their heirs, executors, administrators,
successors and assigns.
IN WITNESS WHEREOF, the undersigned have hereunto set their
hands and seals the day and year first above written, intending
to be legally bound.
l\TTEST:
(?~cj/*x'-"
KEPNER INSURl\NCE, INC.
By /"/~~(P~ (SEl\LI
( (~ presitc;;!
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.
JlSSaCI JI'l'E JlGE!;'!, JlGHEEI'IEN1'
TillS AGREEI'lENT, made this~.5i.. "day of J .l,"-I <J~R"'I
, 1991,
"
by and among CHARLES L. ['lAGIT.L ':ll1d 1'1AGILL INSURANCE SERVICES,
INC., a corporation organized and existing under the laws of the
'Convnonwealth of Pennsylvania, of the first part (hereinafter
referenced respectively as "Magill" and "~Iagill; Inc."1
AND
"
"
RONALD ,L. KEPNER, of the ,second part (hereinafter referenced as
"Kepner").
..
WITNESSETH:
WHEREAS, Kepner pesires to form a business association with
Magill, Inc., whereby the primary involvement of Kepner will be
in sales of various lines of insurance; and
WHEREAS, Magill, Inc. mutually a~d reciprocally desires to
form suc~ business association with Kepner.
NOW, THEREFORE, in exchange for the mutual promises and
commitments set forth herein, the parties hereto agree, as
follows:
ARTICLE I
TERM OF AGREEMENT
1.01 Term of Aqreement. This Agreement shall continue in
full force and effect until terminatea by either party hereto
upon ninety (90) days' written notice thereof to the other. It
is specifically under~tood and agreed among the parties hereto
that the relationship between ~lagil1, Inc. and Kepner is that of
independent contractors.
EXIIIIlI'l' "Il"
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ARTlcr,E II
"
DUTIES OF KEPNER
'10
2.01 Duties of Kepner. Kepner is hereby engaged as an
associate of Magill, Inc. and shall \~ork at the offices of
in carlisle, Pennsylvania, with the option of soliciting
insurance business anywhere within the commonwealth of
Magill'~c,
e-e~
"
Pennsylvania. Kepner shall devote his time toward sales
production of new personal and commercial ,lines insurance
business. In addition, Kepner shall provide "outside" service to
his commercial accounts, particularly at time of renewal.
Magill, Inc. shall provide service for all personal lines
,
insurance business written by Kepner and primarily "inside"
service for all commercial lines insurance business written by
Kepner. Kepner shall be entitled to make decisions concerning
the operation of the Carlisle office of Magill, Inc. subject to
the approval of the President of Magill, Inc. Such operational
decisions shall include personnel matters including establiahment
.
of employee duties for office personnel and engaging, retaining
and terminating office personnel; budgetary matters i~cluding
advertising and operating expenses; and agency procedures and
. development.
2.02 Disability. For the purposes of this Agreement, Magill
or Kepner shall, be deemed to be permanently disabled if he is
determined to be physically or mentally unable to perform any or
all of his ordinary duties with respect to Magill, Inc. for a
period of six (61 successive months due to illness or accident.
2
. . 14:
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. , In determining periods of disability, periods of disability shall
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"
be regarded as continuing and succc5'sivc if the party has not
"
been able to return to full duty for at least one (11 continuous
month between such periods of disability.
2.03 Restriction Aqainst other Employment. During the t:erm
of this Agreement, Kepner may independently set his work
schedule. Kepner may also engage in m\y other business. or
professional activity oth~r than insurance sales provided that it
is not conducted in the offices of Magill, Inc. and further
provided that it does not compete with the business of Magill,
Inc. in any manner whatso~ver.
,
lIRTICLE III
COMPENSlITION
3.01 Basic Compensation. lis compensation for services
rendered,under this lIgreement, Kepner shall be entitled to
receive from Magill, Inc. the following commissions which shall
be payable on the second business day following the 25th of the
month as to commissions received between the 11th and the 25th of
the month and on the second business day following the 10th of
the month as to commissions received between the 26th day of the
previous month and the 10th day of the month:
(al Fifty (50%1 percent of commissions less any return
premiums for all new personal and commercial property and
casualty insurance business written by Kepner on or after
November 1, 1990,
(bl Eighty (80%) percent of commissions less any return
3
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premiums for all new life and ,'lnnuity insurance business
written by Kepner on or after Nbvember 1, 1990/ and forty
'.
(40%) percent of commissions less any return premiums fOL" all
renewals of life and annuity insurance business written by
Kepner after November 1, 1990;
(cl Fifty (50%) percent of commissions. less any return
premiums for all renewals of commercial property and casualty
"
insurance business written by Kepner whether before, after or
on November 1, 1990; and
(dl Forty (40%1 percent of commissions less any return
premiums for all renewals of personal property and casualty
insurance business written by Kepner whether before, after or
on November 1, 1990.
3.02 Bonus compensation. In the event that Kepner shall
meet th~ sales production goals for new property and casualty
insurance business as set by Magill, Inc. prior to January 1 of
each year of this Agreement, Kepner shall be entitled to receive
as additional compensation for services rendered under this
Agreement, an additional ten (10%) percent of cornrnissions for all
new property and casualty business written by Kepner during the
'applicable calendar year less any return premiums. said bonus
compensation shall be payable within forty-five (45) days after
completion of each calendar year. For the calendar year
commencing January 1,1991, the sales production goal for Kepner
shall be $300,000 of premiums. In the event that this Agreement
should be terminated by Magill, Inc. for just cause OL" by Kepner
4
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',~:' without just cause, KepneL" shall not be entitled to bonus
compensation fo~ the yea~ in which t~is Ag~eement is terminated.
In the event that this Ag~eement should be te~minated by Magill,
.
.
Inc. without just cause OL' by Kepne~ with just cause, then Kepner
'shall be entitled to pro-rated bonus compensation for the year of
termination of this Agreement. calculation of such pro-rata
bonus compensation shall be upon the basis of adjustment: of the
sales production goal by a fraction, the numerator of which would
be the number of days' from January 1 until termination and the
denominator of which would be 365.
3.03 profit Sharing. As turther additional compensation for
services rendered under this Agreement if Kepner's insurance
business shows a net profit, Kepner shall be entitled to receive
the proportionate amount of any profit sharing or contingency
payments,received from the respective carriers attributable to
the insurance business written by Kepner with each carrier.
Kepner's share of such funds shall be determined by a fraction,
the numerator of which would be all insurance business written by
Kepner with the carrier whether before, on or after November 1,
1990, and in effect for the year of the calculation. The
denominator of the fraction would be all insurance business
written by Magill, Inc. with the carrier and in effect for the
year of the calculation. l~agill, Inc. shall provide to Kepner,
immediately upon receipt, copies of the annual loss ratio and
production level records for all insurance business written by
Magill, Inc. with each carrier. All profit sharing compensation
5
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"
due Kepner shall be paid \4ithin ten (1.0) days of receipt of the
funds by 11agill, Inc. In the event that this lIgreement should be
terminated by t1a~ill, Inc. for just cause or by Kepner without
just cause, Kepner shall not be entitled to profit sharing
,
'compensation for the year in which this lIgreement is terminated.
In the event that this lIgreement should be terminated by Magill,
Inc. without just cause or by Kepner with just cause, then Kepner
'.
shall be entitled to profit sharing compensation calculated as
set forth above.
ARTICLE IV
BENEFITS
4.01 Health Insurance. Magill, Inc. shall include Kepner in
the current medical and hospitalization plan of Magill, Inc. or
its equivalent without cost to Kepner. Magill, Inc. shall make
such coverages, including dental and vision coverages available
to the family of Kepner at the expense of Kepner.
ARTICLE V
EXPENSES
5.01 Office Expenses. Magill, Inc. shall provide sufficient
office space, equipment and agency and secretarial staff to
enable Kepner to discharge his insurance service obligations
under the terms of this Agreement.
ARTICLE VI
BUY-SELL
6.01 option Events. Termination of this Agreement by
written notice as hereinabove provided, the death, retirement or
6
I
disability of Magill or Kepner or the bankruptcy of Magill, Inc.,
shall constitute option events. "Reeirement" shall include the
..
transfer, sale or dissolution of Magill, Inc. In the event of
occurrence of an option event other than the event of Kepner's
'giving written notice of termination of this Agreement, Kepner,
his heirs, executors or administrators, may purchase all
insurance business written by Kepner whether before, on"or after
November 1, 1990, and all insurance business written by anyone
else with Magill, Inc. for insureds which have locations in
cumberland County, Pennsylvania, even if they have locations
outside Cumberland county, Pennsy~vania. In the event of the
occurrence of the option event of Kepner's giving written notice
of termination of this Agreement as hereinabove provided, Kepner,
his heirs, executors or administrators may purchase all insurance
business written by Kepner whether before, on or after November
I, 1990. In the event of occurrence of an option event after
four years from the date of this Agreement, the purchase price
for said insurance business' shall be one-half its fair market
value. In the event of occurrence of an option event within the
first year from the date of this Agreement, the purchase price
for said insurance business' shall be one-eighth its fair market
value. In the event of occurrence of 'an option event within the
second year from the date of this Agreement, the purchase price
for said insurance business' shall be one-fourth its fair market
value. In the event of occurrence of an option event within the
third year from the date of this Agreement, the purchase price
7
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for said insurance bu:;iness'shall be three-eighths its fair
market value. In the event of occur~.cnce at an option event
within the fourtTi year El"om the date of this Agreement, the
purchase price for said insurance'business shall be one-half its
, fair market value. cair market value shall be determined as any
value agreed by Magill and Kepner or their authot:ized
representatives. In the absence of such agreement, fair market
'.
value will be determined by appraisal. Magill and Kepner would
each designate an appraiser. Each of the appraisers would be
compensated by the party selecting the appraiser. In the event
of the inability of the appraisers tp agree upon a value, the two
apprai~ers shall select a third appraiser. In the event of the
inability of the two appraisers to agree upon a third appraiser,
a third appraiser shall be appointed by Order of the court of
Common Pleas of Cumberland county, Pennsylvania. A valuation by
two of the three appraisers shall be final and conclusive.
6.02 Terms of Payment. Kepner may elect to make payment in
a lumP sum or in four equal annual installments payable on the
anniversary date of the option event. In the event of election
of installloent payments, the parties shall apply a mutually
agreed interest rate. In the event of the inability of the
parties to agree upon an interest rate, an interest rate shall be
set by the appraisers 'referenced hereinabove.
ARTICLE VII
COVENANT
7.01 Covenant not to Compete. Unless otherwise agreed in
,
. Add wordingl "1'Iritten by l(epneP" ~ (C ef:-
. I
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'f \~riting, it is expressly agreed that, in the event that iI party
hereto voluntarily terminates this Agreement without cause or is
'. .......f...,~..~
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..
involuntarily terminated from this Agreement for cause, the party
shall not solicit or cause others to solicit insureds of
'insurance busineGs written by the other parties to this Agreement
within five (5) years of the date of this Agreement.
Furthermore, all current and future agency personnel sha~l be
required to sign a similar covenant not to compete. This
Agreement shall be binding upon all business of Magill, Inc. and
Kepner Insurance Associates. copies of these executed agreements
shall be provided to Kepner.
ARTICLE VIII
GENERAL PROVISIONS
8.01 Notices. Any and all notices, designations, consents,
offers, a~ceptances, or any other communications provided herein
shall be given in writing by certified mail, return receipt
requested, addressee only, and shall be deemed to be given on the
date of mailing. They shall be addressed, in the case of Magill
or Magill, Inc., to the principal office of Magill, Inc., and in
the case of Kepner, to 1472 zimmerman Road, Carlisle,
Pennsylvania 17013, or to any other address which may be
designated therefor by Kepner to Magill or Magill, Inc. in
wri dng.
8.02 Attorney Fees and Costs. If any action at law or in
equity is necessary to enforce or interpret the terms of this
Agreement, the prevailing party shall be entitled to reasonable
9
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attorney fees, costs and expenses of litigation in addition to
any other relief to which the prevaii'ing party may be entitled.
8.03 Severability. The invalidity or unenforceability of
any particular provision of this Agreement shall not affect the
'other provisions hereof, and this Agreement shall be construed in
-
all respects as,though such invalid or unenforceable provisions
were omitted.
8.04 Modifications. .l.'lo change or modification of this
Agreement shall be enforceable against any party unless the same
shall be in writing and signed by the party against whom
enforcement is sought.
8.~5 Entire Agreement. This Agreement represents the entire
agreement between or among the parties with respect to the
subject matter hereof and supersedes all prior agreements and
understa~dings with respect thereto.
8.06 Governing Law. This Agreement shall be governed as to
validity, interpretation and effect by the laws of the
commonwealth of Pennsylvania in effect at the date hereof.
8.07 Headings. The headings used in this Agreement are for
convenience only and do not constitute substantive matter to be
considered in construing the terms of this Agreement.
8.08 construction. This Agreemenc shall not be strictly
construed against any party hereto. Whenever the context shall
so require, all words herein in the male gender shall be deemed
to include the female or neuter gender, all singular words shall
include the plural and all plural words shall include the
10
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M~SH1c~ccs. Inc.
3G7~ V.,rlon Woy, Sulle 202
llorri,hur!l.I'A 17110
('117) ~4I,!l300' Fox (71'11~4I,9633
':
April 1, 199G ."
"
Ronald Kepner
1472 Zimmerman noad
Carlisle, PA 17013
Certified Mail - nnR
Addressee Only
. ....
. ,.,
Re: Termin~tion of Associate Agent Agreement
Ron:
This is to formally notify you of the termination of the
Associate Agent Agreement of January 31';' 1991, in accordance
with Article I of t'1;l Agreement. This termination is for
"just cause" for the reasons that you have failed to perform
your qpligations under the agreements executed by the two of
USI you have failed to produce at any minimally acceptable
level, you have failed to maintain adequate office hoursl
you have conducted yourself with the office staff in a rude
and non-professional manner and you have failed to service
clientele in a minimally acceptable manner.
Article I of the Agreement requires a ninety (90) day
notification. Article VIII provides that the notice is
effective upon mailing. With the ninetieth day falling on
June 30, 1996, effective July 1, 1996, the terms of the
Associate Agent Agreement shall no longer. be in effect.
Because of your past outbursts and disruptions in the
office, you are not permitted to enter the office unless you
arrange with me personally in advance, a time that both of
us can be present.
Finally, I want to clearly inform you that while the
Associate Agent Agreement is being terminated by this
letter, the Agency Transfer Agreement contains no
provisions for termination and will continue in effect
unless and until you have made satisfactory arrangements for
the purchase of any portion of business written through you
or by me.
EXHIBIT Ole"~
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,
RONALD L. KEPNER and
KEPNER INSURANCE, INC.,
Plaintiffs
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - EQUITY
v.
CHARLES L. MAGILL and
MAGILL INSURANCE SERVICES,
INC. ,
EQUITY 1996
NO.
Defendants
ORDER OF COURT
AND NOW, this
day of
, 1996, after
hearing, the Court finds that the wrongs of Defendants are
manifest, that Plaintiffs' right to relief is clear, that the
injury to Plaintiffs in the absence of injunction will be
irreparable and incapable of compensation by the award of
monetary damages and that the injury to Plaintiffs in the refusal
of an injunction would be far greater than the hardship to
Defendants in imposition of an injunction.
Therefore, upon motion of Wayne F. Shade, Esquire, attorney
for Plaintiffs, the preliminary injunction issued herein is
hereby continued upon the security presently posted therefor and
Defendants are preliminarily enjoined, as follows:
1. From terminating the agreements among the parties until
payment of the judgment in favor of Plaintiffs and against
Defendants and until completion of the applicable buy-sell
procedures;
2. To provide Plaintiffs with the policy information
requested herein to be verified by an inspection of the insurance
WA\'NI! F, SIIAIlI! files of Defendants by an independent third party designated by
AUull1t')' .11.....
51 Wu' ",ur". '"". the parties or by Order of court; and
('IIII.It,IIc1UII)h'lIll1
111111
WAYN!! F. SIIAllI!
Atlomr)'.II....
" Wut lunhrt SUre"
("..Iilk. l'rMI)hania
17Ut)
.
10.
By not filing a Motion for Post-Trial Relief within ten days
from entry of the Decree Nisi, Plaintiffs indicated their
acceptance of the decision in this case in spite of the denial of
the requested adjudication that the controlling agreements were
null and void as to Plaintiffs by reason of Defendants' several
material violations thereof.
11.
Against the obvious weight of the credible evidence,
Defendants manifested their determination to continue this
litigation by filing a Motion for Post-Trial Relief.
12.
As a result of Defendants' filing for post-trial relief,
Plaintiffs filed a subsequent Motion for Post-Trial Relief in the
second ten days after entry of the Decree Nisi to protect the
record against waiver in the unlikely event of modification of
the Decree Nisi by your Honorable Court.
13.
In their Motion for Post-Trial Relief, Plaintiffs expressly
stated that they would withdraw their Motion if Defendants were
to withdraw their Motion.
14.
Upon denial of their Motion for Post-Trial Relief,
Defendants appealed to the Superior Court.
15.
The superior Court reviewed the more than 1,700 pages of
record that Defendants generated and reproduced in an attempt to
-3-
WAYNli F, SHAIlI!
AI1t'fnt')' It 1.....
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('IIU.k.I'n"u)lv....11
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, .
confuse the issues in this case and rejected the appeal in one
sentence of a memorandum opinion which stated: "We agree with
the trial court's analysis and will no~ expand upon the reasoning
set forth therein."
16.
Notwithstanding the conspicuous lack of merit of their
claims of error, Defendants have continued to prolong ~he
litigation in this case by filing a Petition for Allowance of
Appeal with the Supreme Court of Pennsylvania on or about April
12, 1996.
17.
Prior to filing their Petition for Allowance of Appeal to
the Supreme Court and with obvious knowledge of their intention
to do so, Defendants served notice upon Plaintiff KEPNER on April
2, 1996, of termination of the Associate Agent Agreement. A copy
of the notice is attached hereto as Exhibit "C".
lB.
In said notice of termination, Defendants asserted that the
termination was for just cause and cited, as grounds for just
cause, contentions that were expressly rejected by your Honorable
Court in the pending litigation.
19.
Plaintiffs believe and therefore aver that Defendants are
asserting just cause in an attempt to invoke the provisions of
Paragraph 3.03 of the Associate Agent Agreement which would
forfeit the right of Plaintiff KEPNER to profit sharing
compensation for the first half of 1996.
-4-
WA\'NI! F, SIlAIlE
Atll.my.' I.lWI'
51 Wfll 11'.nh" bUm
('"lidt,I'l'MI)h'ania
l1ull
4
20.
Article VI of the Associate Agent Agreement gives Plaintiff
KEPNER the right, upon termination of the Agreement, to purchase
all insurance business written by anyone with Defendant MAGILL,
INC. for insureds which have locations in Cumberland County even
if they also have locations outside Cumberland county.
21.
At the time of execution of the Agreements on January 31,
1991, Defendant MAGILL, INC. had hundreds of insureds in its
Harrisburg office.
22.
Defendants have redacted the monthly commission statements
of the agency from the moment of execution of the controlling
agreements and have excluded Plaintiff KEPNER from the file room
of the Carlisle office of the agency for more than two years.
23.
In contrast with the insureds of the former Kepner agency,
Plaintiffs have no knowledge of the identities of the insureds of
the Magill agency and as to which insureds may have locations in
Cumberland county.
24.
After being served with the termination notice, Plaintiffs
requested of Defendants the following information with respect to
each insured to enable Plaintiffs to value the policies written
by representatives of the agency other than Plaintiff KEPNER for
the purpose of the buy-sell transaction:
(al The names and addresses of the policyholders;
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(b) The company with which the insurance is written;
(c) The policy number which would reveal the type of policy
and risks insured;
(d) The annual premium for each policy; and
(e) How long the insured has been with the Magill agency.
25.
Plaintiffs need the foregoing information because all of the
requested items are important valuation factors as bearing upon
the desirability of the business and the likelihood that it can
be retained after purchase.
26.
By letter of April 24, 1996, Defendants indicated that they
would refuse to provide the requested policy information and that
it was not necessary to valuation of the policies.
27.
Plaintiffs aver that the following conduct of Defendants
indicates an absence of good faith on the part of Defendants with
respect to the termination procedure in general and the buy-out
provisions in particular:
(a) filing an appeal to the supreme Court which is devoid
of merit;
(b) asserting just cause termination upon grounds which
have been expressly rejected by your Honorable Court;
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(c) refusing to provide policy information which is
fundamentally essential to valuation for the buy-sell;
(d) attempting to impose upon Plaintiff KEPNER a
requirement to pledge collateral for the deferred payment
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provisions of the buy-sell where there is no such requirement in
paragraph 6.02 or any other provisions of the Associate Agent
Agreement; and
(e) restricting the access of Plaintiff KEPNER to the
office that Defendants are contractually required, under
Paragraph 2(b) of the Agency Transfer Agreement, to maintain for
Plaintiff KEPNER to only when Defendant MAGILL is present.
28.
Even if Defendants were to agree to provide the requested
policy information, Plaintiffs aver that the absence of good
faith on the part of Defendants makes it impossible for
Plaintiffs to accept the word of Defendants as to which of the
hundreds of policyholders of Defendants have Cumberland county
locations so that identification of the policyholders and an
independent investigation by Plaintiffs are necessary.
29.
Plaintiffs believe and therefore aver that it is the
intention of Defendants to cut Plaintiff KEPNER off as of July 1,
1996, from the hundreds of insureds that he brought to the agency
by terminating all office support and all commission payments to
Plaintiff KEPNER.
30.
Plaintiffs further believe and therefore aver that it is the
intention of Defendants to attempt to gain an unfair advantage
over Plaintiffs by attempting to terminate the livelihood of
Plaintiff KEPNER while also refusing to pay to Plaintiff KEPNER
tens of thousands of dollars that your Honorable Court found more
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than a year ago that Defendants should have paid as much as four
years ago.
31.
If Defendants are permitted to terminate the Associate Agent
Agreement prior to payment of the judgment in favor of Plaintiffs
and prior to completion of the buy-sell procedure, the ability of
Plaintiff KEPNER to exercise his rights under the buy-sell
provisions and the business reputation and relationships of
Plaintiff KEPNER will be harmed in ways that would be irreparable
and incapable of being compensated by money damages.
WHEREFORE, Plaintiffs respectfully request that your
Honorable Court issue the following equitable relief to prevent
Defendants' gaining an improper advantage from their wrongful
conduct and to preserve the status quo until the merits of this
case can be heard and determined:
(a) Defendants be enjoined from terminating the agreements
among the parties until payment of the judgment in favor of
Plaintiffs and against Defendants and until completion of the
applicable buy-sell procedures;
(b) Defendants be required to provide Plaintiffs with the
policy information requested herein to be verified by an
inspection of the insurance files of Defendants by an independent
third party designated by the parties or by Order of Court; and
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AGENC\' 'J'H^IlSFFIl ^GHEEI'1EN'J'
----.
t) , t
THIS ^GHEEI1EN'l', made thi1l ")J...s:I_ day of .:>4~..!:i',::l
.
, 1991,
by and among HONM,D T,. IZEPNEH and IZEI'NEH INSUH^NCE, INC., a
corporation organized and existing under the laws of tile
conunonwealth of Pennsylvania, of the first part (hereinafter
referenced respectively as "Kepner" and "Kepner"Inc.")
AND
MAGILL INSURANCE SERVICES" INC., a corporation organized and
existing under the laws of the conunonwealth of Pennsylvania, of
the second part (hereinafter referenced as "Magill, Inc.").
\UTNESSETH:
\mEREAS, Kepner, Inc. is an insurance agency with a "book of
business" which, for the purposes of this Agreement, is defined
as all insurance policies or binders in effect prior to November
1, 1990",but not including the corporate name of Kepner
Insurance, Inc. or any of the furnishings, fixtures or other
tangible physical assets of Kepner Insurance, Inc./
WHEREAS, Kepner, Inc. desires to transfer the book of
business of Kepner, Inc. to Magill, Inc. exclusive of all
accounts receivable of Kepner, Inc. with respect to the book of
business attributable to all policies issued, completed or
renewed by Kepner, Inc. prior to November l, 1990, and free and
clear of all claims that may be asserted as a result of policies
of insurance sold by Kepner, Inc. prior to November l, 1990/ and
WHEREAS, Magill, Inc. desires to assume ownership of the
aforesaid book of businesS of Kepner, Inc.
EXHIBIT "A"
to}. '
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NO\~, 'l'IlEHEFOilE, in exchange for the mutual promises and
conunitments set fOl'th hel:cin, the partie!; hCl:eto agree, as
.
follo'~s :
1. Kepner, Inc., hereby transfers to (oI"9i11, Inc. all
proprietary interests in the book of business of Kepner, Inc.
accruing on and after November l, 1990. The tloansfer shall
include but not be limited to all insurance records, dally
reports and expiration notices of policies and renewals of
policies in force and shall include all supporting documentation
and all records of Kepner, Inc. pertaining to the policies
whatsoever as well as the good will of Kepner, Inc., if any.
2. The consideration for the transfer is, as follows:
(a) The terms and provisions of an Associate Agent
Agreement among Charles L. Magill, Magill, Inc. and Ronald L.
Kepner executed concurrently herewith and incorporated herein
by reference as though fully set forth/
(b) Magill, Inc. shall maintain the office referenced in
Article V of the said Associate Agent Agreement which shall
be operated under the fictitious name of Kepner Insurance
Associates/ and
(c) Magill, Inc. shall maintain errors and omissions
insurance coverage upon Kepner, Inc. and Kepner with coverage
limits of at least $500,000 and with coverage including "full
prior acts" pertaining to the book of business of Kepner,
Inc. Copies of all applicable policies and renewals shall be
provided to Kepner, Inc. and Kepner.
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3. All ,1ccounU, l.'<~ceiv,1ble 01. lZepner, Inc. attributable to
policies ismlCd, completed, lkli.ver~!d or' l'enewcd by Kepner', Inc.
prior to Novemlfer 1, 1990, ,1nd all profi t shar ing or contingency
amounts payable to Kepnel:, Inc. 1.01: calendar year 1990 by
insurance carriers due to favol:able claims experience resulting
from all policies issued, completed, delivered or renewed by
Kepner, Inc. prior to November 1, 1990, shall be delivered
immediately by Magill, Inc. to Kepner. Kepner shall maintain
such funds in a sepa~ate account to be applied toward any
accounts payable of Kepner, Inc. attributable to the book of
business of Kepner, Inc. upon satisfaction of all such accounts
payable, any balance of the fund may be distributed by Kepner,
Inc. free and clear of any claims of Magill, Inc. Kepner, Inc.
shall be responsible for paying all accounts payable of Kepner,
Inc. as of the close of business on October 31, 1990/ and Kepner,
Inc. hereby expressly agrees to indemnify and hold harmless
Magill, Inc. against any and all claims made with respect to such
accounts payable. Kepner hereby guarantees th~s obligation of
Kepner, Inc.
4. Immediately upon execution of this Agreement, Magill,
Inc. shall register the fictitious name of Kepner Insurance
Associates with the conunonwealth of Pennsylvania, Department of
state. Kepner, Inc. will then cease all further insurance
business for the duration of the aforesaid Associate Agent
Agreement. In the event of termination of the aforesaid
Associate Agent Agreement, Magill, Inc. shall no longer be
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entitled to utili::e the Kepner" name in any fOl'lll Hithout the prioL"
Hritten consent of Kepner.
5. Hagill', Inc. shall not engage itself in the insurance
business with any other" corporation or partnership or enter into
any equity production agreement in cumberland County,
Pennsylvania, without first obtaining the Hritten consent of
Kepner.
G. Hagill, Inc. shall not terminate or cause to be
terminated any agency agreement with any insurance company with
which Kepner was licensed prior to November I, 1990, at any time
without the prior written consent of Kepner.
~. Magill, Inc. shall not transfer or rewrite any insurance
policies that have been written by Kepner, Inc. to another
insurance company without the prior consent of Kepner.
8. Kepner, Inc. will cooperate with Magill, Inc. in the
smooth and efficient transfer of the book of business of Kepner,
Inc. to Magill, Inc. including the issuance of a letter to each
of the insureds of the book of business of Kepner, Inc. at the
expense of Magill, Inc. informing the insured of the relationship
of Kepner and Magill, Inc. and of all other pertinent matters
concerning the transfer of the book of business of Kepner, Inc.
to Magill, Inc.
9. Kepner, Inc. hereby warrants to Magill, Inc. that there
are no known creditors or claims pending against Kepner, Inc. on
account of any policics of insurance that wcre iSnued, completed,
dclivered or rcnewed by Kepner, Inc. prior to November 1, 1990,
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and that, at the date ot execution of, this Agreement, Kepner,
Inc. is unaware ,)f ilny claims, actions, complaints, suits,
demands or other legal proceedings either thl:eatened or pending
against Kepner, Inc. Kepner, Inc. shall indemnify and hold
harmless Magill, Inc. \~i th respect to any such claims, actions,
complaints, suits or other legal proceedings relative to policies
issued, completed, delivered or renewed by Kepner, Inc. 'prior to
November 1, 1990. Kepner hereby guarantees ,this obligation of
Kepner, Inc.
lO. Any and all notices, designations, consents, offers,
acceptances, or any other communications provided herein. shall be
given in writing by certified mail, return receipt requested,
addressee only, and shall be deemed to be given on the date of
mailing. They shall be addressed, in the case of Magill, Inc.,
to the principal office of Magill, Inc., and in the case of
Kepner, to 1472 zimmerman Road, Carlisle, Pennsylvania l70l3, or
to any other address which may be designated therefor by Kepner
to Magill, Inc. in writing.
11. If any action at law or in equity is necess~ry to
enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorney fees, costs and
expenses of litigation in addition to any other relief to which
the prevailing party may be entitled,
12, The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as
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though Guch invalid 01: unen(ol:ceable pl:oviDions wcl:e omitted.
13. No change or modification of thi'i ',greement Ghall be
enforceable againGt any party unleGG the !;ame shall be in writing
and signed by the pal:ty against whom enforcement is sought.
14. This Agreement represents the entire agreement between
or among the parties with respect to the subject matter hereof
and supersedes all prior agreements and understandings with
respect thereto.
15. This Agreement shall be governed as to validity,
interpretation and effect by the laws of the commonwealth of
pennsylvania in effect at the date hereof.
16. This Agreement shall not be strictly construed against
any party hereto. Whenever the context shall so require, all
words herein in the male gender shall be deemed to include the
female o~ neuter gender, all singular words shall include the
plural and all plural words shall include the singular.
17. This Agreement shall be binding upon and enforceable by
the parties hereto, their heirs, executors, adIDinistrators,
successors and assigns.
IN WITNESS WHEREOF, the undersigned have hereunto set their
hands and seals the day and year first above written, intending
to be legally bound.
ATTEST:
r41eJ;el1~
KEPNER INSURANCE, INC.
By ~ ~--I. P (SEAL)
( ~<C presttlcr
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lIR'J'Icr,E II
DU'l'IES OF KEPNEH
,
2.0l Duties of Kepner. Kepnel: is hereby engaged CiS an
associate of Magill, Inc. and shall work at the offices of
in carlisle, Pcnnsylvania, with the option of soliciting
insurance business anY'~here within the conunonwea1th of
!'Iagill '~c.
ef..K
Pennsylvania. Kepner shall devote his time toward salas
production of new personal and commercial lincs insurance
business. In addition, Kepner shall provide "outside" service to
his conunercial accounts, particularlY at time of renewal.
Magill, Inc. shall provide service for all personal lines
insurance business written by Kepner and primarily "inside"
service for all commercial lines insurance business written by
Kepner. Kepner shall be entitled to make decisions concerning
the operation of the Carlisle office of Magill, Inc. subject to
the approval of the President of Magill, Inc. Such operational
decisions shall include personnel matters including establishment
,
of employee duties for office personnel and engaging, retaining
and terminating office personnel/ bUdgetary matters i,ncluding
advertising and operating expenses/ and agency procedures and
. development.
2.02 Disability. For the purposes of this Agreement, Magill
or Kepner shall be deemcd to be permanently disabled if he is
determined to be physically or mentally unable to perform any or
all of his ordinary duties with respect to Magill, Inc. for a
period of six (6) successive months dUe to illness or accident.
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In detennining periods of di:;abi li. ty, pel: iods of disabili ty shall
be I:egarded a:, continuing and :;ucc'l:;:;ive if the party ha:; not
,
been able to return to full duty 1'01' at least one (1.) continuous
month between such periods of di!;ability.
2.03 Restriction lIqainst Other Employment. During the term
of this lIgreement, Kepner may independently set his IWL'k
schedule. Kepner may also engage in any other business or
professional activity other than insurance salcs provided that it
is not conducted in the offices of Magill, Inc. and further
provided that it does not compete with the business of Magill,
Inc. in any manner whatso~ver.
lIRTICLE III
COMPENSATION
3.01 Basic compensation. As compensation for services
rendered under this Agreement, Kepner shall be cntitled to
receive from Magill, Inc. the following commissions which shall
be payable on thc second business day following the 25th of the
month as to commissions received between the 11th and the 25th of
the month and on thc second business day following the 10th of
the month as to commissions received between the 26th day of the
previous month and the lOth day of the month:
(a) Fifty (50%) percent of commissions less any return
premiums for all new personal and commercial property and
casualty insurancc business written by Kepncr on or after
November l, 1990/
(b) Eighty (80%) percent of conunissions less any return
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pl:el11iUJnfi for ,Ill neH li.fr~ "nd annuity in!;ur'an<.:e bu,~inefis
\~I:itten by Kepnel: on or ,,[tel: llbvelllbel' 1, 1990, ,.nd forty
(40%) percent of cOl1ulli:;:;jolHi less any I:etul:n pl:el1\iul1\s for all
,
l'enC\~als of life and annuity insUl:ance business \~rittcn by
Kepner after November 1, 1990;
(c) Fifty (50%) percent of conunissions, less any return
premiums for all renewals of conunercial property and casualty
insurance business written by Kepner whether before, after or
on November 1, 1990/ and
(d) Forty (40%) perccnt of commissions less any return
premiums for all renewals of personal property and casualty
insurance business written by Kepner whether before, after or
on November 1, 1990.
3.02 Bonus compensation. In the event that Kepner shall
meet the sales production goals for neW property and casualty
insurance business as set by Magill, Inc. prior to January 1 of
each year of this Agreement, Kepner shall be entitled to receive
as additional compensation for services rendered under this
Agreement, an additional ten (lO%) percent of commissions for all
new property and casualty business written by Kepner during the
applicable calendar year less any rcturn premiums. said bonus
compensation shall be payable within forty-five (45) days after
completion of each calendar year. For the calendar year
conunencing January 1, 1991, the sales production goal for Kepner
shall be $300,000 of premiums. In thc event that this Agreement
should be terminatcd by Magill, Inc, for just cause or by Kepner
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\~!,thout just cause, I\epncr shall not be entitled to bonu~
compensation (01.' the yeal: in Hhich this A'jl.'eement is tenuinated.
.
In the event that thi:i ^greement should be terminated by l'lagill,
Inc. without ju~t cause or by Kepnel: with just cause, then Kepner
'shall be entitled to pro-rated bonus compensation for the year of
termination of this ^greement. Calculation of such pro-rata
bonus compensation shall be upon the basis of adjustment of the
sales production goal by a fraction, the nwuerator of which would
be the nwuber of days' from January 1 until termination and the
denominator of which would be 365.
3.03 Profit Sharinq. As turther additional compensation for
services rendered under this Agreement if Kepner's insurance
business shows a net profit, Kepner shall be entitled to receive
the proportionate amount of any profit sharing or contingency
payments,received from the respective carriers attributable to
the insurance business written by Kepner with each carrier.
Kepner's share of such funds shall be determined by a fraction,
the numerator of which would be all insurance business written by
Kepner with the carrier whether before, on or after November 1,
1990, and in effect for the year of the calculation. The
denominator of the fraction would be all insurance business
written by Magill, Inc. with the carribr and in effect for the
year of the calculation. Magill, Inc. shall provide to Kepner,
immediately upon receipt, copies of the annual loss ratio and
production level records for all insurance business written by
Magill, Inc. with each carrier. All profit sharing compensation
5
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due Kepner shall be paid Hithin ten (10 I days of r'eceipt of the
funds by l'lagill, Inc. In the event that this Agreement should be
,
terminated by 11agill, Inc. for just cau!;e or by Kepnel: Hithout
just cause, Kepner shall not be entitled to profit sharing
'compensation for the year in Hhich this Agreement is terminated.
In the event that this Agreement should be terminated by Magill,
Inc. without just cause or by Kepner with just cause, tl1en Kepner
shall be entitled to profit sharing compensation calculated as
set forth above.
ARTICLE IV
BENEFITS
4.01 Health Insurance. Magill, Inc. shall include Kepner in
the current medical and hospitalization plan of Magill, Inc. or
its equivalent without cost to Kepner. Magill, Inc. shall make
such coverages, including dental and vision coverages available
, ,
to the family of Kepner at the expense of Kepner.
ARTICLE V
EXPENSES
5.01 Office Expenses. Magill, Inc. shall provide sufficient
office space, equipment and agency and secretarial staff to
enable Kepner to discharge his insurance service obligations
under the terms of this Agreement.
ARTICLE VI
BUY-SELL
6.01 Option EVents. Termination of this Agreement by
written notice as hereinabove provided, the death, retirement or
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, .
shall constitute option events. "Hetil:ement" shall include the
transfer, salc dr disllolution of 1'1,1<Jill, Inc. In the event of
occurrence of an option event other than the event of Kepner's
'giving \~ritten notice of termination of this Agreement, Kepner,
his heirs, executors or administrators, may purchase all
insurance business written by Kepner whcther bcfore, on,or after
November 1, 1990, and all insurance business writtcn by anyone
else with Magill, Inc, for insureds which have locations in
cumberland county, Pennsylvania, even if they have locations
outside cumberland County, Pennsy~vania. In the eVent of the
occurrence of the option event of Kepner's giving written notice
of termination of this Agrcement as hereinabove provided, Kepner,
his heirs, executors or administrators may purchase all insurance
business written by Kepner whether before, on or after November
1, 1990. In the eVent of occurrence of an option event after
four years from the date of this Agreement, the purchase price
for said insurance business'shall be one-half its fair market
value. In the event of occurrence of an option event within the
first year from the date of this Agreement, the purchase price
for said insurance business"shall be onc-eighth its fair market
value. In the eVent of occurrence of 'an optlon event within the
second year from the date of this Agreement, the purchase price
for said insurance business"shall be one-fourth its fair market
valuc. In the event of occurrcnce of an option event within the
third year from the date of this Agreement, the purchase price
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[or liaid in!;ul:ance bu:;ineli!;' lihall be thr'ee-ei<]hths i t::i fair
market value. In the event of OCCUI:1!ence of an option event
\~itllin the fOUl:t'l year from the date 01: this Agl:eement, the
purchase price for said insurance' business shall be on<~-haH its
fair market value. Fair market value shall be determined as any
value agreed by Nagill and Kepner or theiL" authoL:ized
representatives. In the absence of such agreement, fair market
value will be determined by appraisal. Nagill and Kepner would
each designate an appraiser. Each of the appraisers would be
compensated by the party selecting the appraiser. In the event
of the inability of the appraisers tp agree upon a value, the two
appraisers shall select a third appraiser. In the event of the
inability of the two appraisers to agree upon a third appraiser,
a third appraiser shall be appointed by Order of the Court of
Common Pleas of cumberland county, Pennsylvania. A valuation by
two of the three appraisers shall be final and conclusive.
6.02 Terms of Payment. Kepner may elect to make payment in
a lump sum or in four equal annual installments payable on the
anniversary date of the option eVent. In the eVent of election
of installment payments, the parties shall apply a mutually
agreed intel:est rate, In the event of the inability of the
parties to agree upon an interest rate, an interest rate shall be
set by the appraisers referenced hereinabove.
ARTICLE VII
COVENANT
7.0l Covenant not to Compete. Unless otherwise agreed in
,
. Add wordingl "\~r1tten by Kepne~" ~ tC t,fC
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't \n:iti,ng, it is expl:e:.;!;l.y oicJl:eed that, in the event that a party
hel:eto voll1nt"lril~' tel'luinate:; this Agreement \d,thout cause or' i1l
.
involuntarily tenuinated (rom thi1l l\gl:eement fOI: cause, the party
shall not solicit or cause othel:& to solicit insureds of
insurance business Hr"itten by the other parties to this Agreement
within five (5) years of the date of this Agreement.
Furthermore, all current and future agency personnel sha,ll be
required to sign a similar covenant not to compete. This
Agreement shall be binding upon all business of Magill, Inc. and
Kepner Insurance Associates. copies of these executed agreements
shall be provided to Kepner.
ARTICLE VIII
GENERAL PROVISIONS
8.01 Notices. Any and all notices, designations, consents,
offers, a~ceptances, or any other communications provided herein
shall be given in writing by certified mail, return receipt
requested, addressee only, and shall be deemed to be given on the
date of mailing. They shall be addressed, in the case of Magill
or Magill, Inc., to the principal office of Magill, Inc., and in
the case of Kepner, to 1472 Zimmerman Road, Carlisle,
pennsylvania 17013, or to any othcr addrcss which may be
designated therefor by Kepner to Magill or Magill, Inc. in
writing.
8.02 Attorney Fees and Costs. If any action at law or in
equity is neccssary to enforce or interpret the terms of this
Agreement, the prevailing party shall be entitled to reasonable
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attol:ney (ee:.;, CO!;t5 and eXpell!ie:.; o( litigation in .lddition to
any othel' relief to \4hich the pl:ev.liiing pal:ty molY be entitled.
0.03 sevel'ability. 'l'he invalidity or unen(orceability o(
any particular provision of this AI]l:eement shall not affect the
other provisions hel:eof, and this Agreement !;hall be construed in
all respects as though such invalid or unenforceable provisions
werc omitted.
0.04 Modifications. ~o changc or modification of this
Agreement shall be enforceable against any party unless the samc
shall be in writing and signed by the party against whom
enforcement is sought.
8.05 Entire l\qreement. This Agrecment rcpresents the entire
agreement betwcen or among the parties with respect to the
subject matter hereof and supersedes all prior agreements and
understa~dings with respect thcreto.
8.06 Governinq Law. This Agreement shall be governed as to
validity, interpretation and effect by the laws of the
commonwealth of Pennsylvania in effect at the date hereof,
8.07 Headinqs. The headings used in this Agreement are for
convenience only and do not constitute substantive matter to be
considered in construing the tel:ms of this Agreement.
8.08 construction. This lIgreement shall not be strictly
construed against any party hereto. \~henever the context shall
so require, all words herein in the male gender shall be deemed
to include the female or neuter gcnder, all singUlar words shall
include the plural and all plural words shall include the
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]Vl{}9!1ckccs, Inc.
3(j75 V",lan Wal', Suilc 202
liarrl,burg,l'^ 17110
(717) 541,9306' Fax (71'1) 50\1,9633
April 1, 199G
Ronald Kepner
1472 Zimmerman Road
Carlisle, I'A 17013
Certified Mail - RRR
Addressee Only
, "
Re: Termination of Associate Agent Agreement
Ron:
This is to formally notify you of the termination of the
Associate Agent Agreement of January 31, 1991, in accordance
with Article I of the Agreement. This termination is for
"just cause" for the reasc>ns that you have failed to perform
your obligations under the agreements executed by the two of
us/ you have failed to produce at any minimally acceptable
level/ you have failed to maintain adequate office hours/
you have conducted yourself with the office staff in a rude
and non-professional manner and you have failed to service
clientele in a minimally acceptable manner,
Article I of the Agreement requires a ninety (90) day
notification. Article VIII provides that the notice is
effective upon mailing. With the ninetieth day falling on
June 30, 1996, effective July 1, 1996, the terms of the
Associate Agent Agreement shall no longer be in effect.
Because of your past outbursts and disruptions in the
office, you are not permitted to enter the office unless you
arrange with me personally in advance, a time that both of
us can be present,
Finally, r want to clearly inform you that while the
Associate Agent Agreement is being terminated by this
letter, the Agency Transfer Agreement contains no
provisions for termination and will continue in effect
unless and until you have made satisfactory arrangements for
the purchase of any portion of business written through you
or by me.
EXIIllll T tiC"
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RONALD
KEPNER
L. KEPNER and
INSURANCE, INC.,
Plaintiffs
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - EQUITY
v.
CHARLES L. MAGILL and
MAGILL INSURANCE SERVICES,
INC. ,
NO. 96-2497 EQUITY
Defendants
ORDER OF COURT
AND NOW, this
day of
, 1996, after
hearing, the Court finds that the wrongs of Defendants are
manifest, that Plaintiffs' right to relief is clear, that the
injury to Plaintiffs in the absence of injunction will be
irreparable and incapable of compensation by the award of
monetary damages and that the injury to Plaintiffs in the refusal
of an injunction would be far greater than the hardship to
Defendants in imposition of an injunction.
Therefore, upon motion of Wayne F. Shade, Esquire, attorney
for Plaintiffs, the preliminary injunction issued herein is
hereby continued upon the security presently posted therefor and
Defendants are preliminarily enjoined, as follows:
1. From terminating the agreements among the parties until
payment of the judgment in favor of Plaintiffs and against
Defendants and until completion of the applicable buy-sell
procedures;
2. To provide Plaintiffs with the policy information
requested in Paragraph 24 of the Amended Complaint to be verified
WAVNI! 1', SIIAIlH by an inspection of the insurance files of Defendants by an
Auumq.ll..w
H Wul I"-mfrrl Sbnt
('"lillt', l'mn.)'h'ania
111111
~
..
RONALD L. KEPNER and
KEPNER INSURANCE, INC.,
Plaintiffs
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - EQUITY
v.
CHARLES L. MAGILL and
MAGILL INSURANCE SERVICES,
INC. ,
NO. 96-2497 EQUITY
Defendants
PLAINTIFFS' PETITION FOR INJUNCTIVE RELIEF
TO THE HONORABLE, THE JUDGES OF SAID COURT:
AND NOW, come Plaintiffs by their attorney, Wayne F. Shade,
Esquire, and respectfully file this Petition for preliminary and
permanent Injunctive Relief against Defendants in the forms of
the preceding proposed Orders for the reasons set forth in the
attached Amended complaint.
WHEREFORE, Plaintiffs respectfully request that your
Honorable Court issue the following equitable relief to prevent
Defendants' gaining an improper advantage from their wrongful
conduct and to preserve the status quo until the merits of this
case can be heard and determined:
(a) Defendants be enjoined from terminating the agreements
among the parties until payment of the judgment in favor of
Plaintiffs and against Defendants and until completion of the
applicable buy-sell procedures;
(b) Defendants be required to provide Plaintiffs with the
policy information requested in Paragraph 24 of the Amended
Complaint to be verified by an inspection of the insurance files
WAVNII r, SHAUll of Defendants by an independent third party designated by the
^U.llftf"~ at I....
11\\'"'1'....,,,..,,,,, parties or by Order of Court; and
1'lIlult,I'rMI)hIRII
111111
.
..
The statements in the foregoing Petition are based upon
information which has been assembled by my attorney in this
litigation. The language of the statements is not my own. I
have read the statements; and to the extent that they are based
upon information which I have given to my counsel, they are true
and correct to the best of my knowledge, information and belief.
I understand that false statements herein are made subject to the
penalties of 18 Pa.C.S. 54904 relating to unsworn falsification
to authorities.
Date: May 9, 1996
~o~a
onald L. ep e~
WAVNI! F. SIIAIJI!
^llomtJ I' l.ew
5) Wnl rumfrrt SUrd
l"lIlidt.I'rnnI)lvan,-
I7UII
.
RONALD L. KEPNER and
KEPNER INSURANCE, INC.,
Plai'lltiffs
:' IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - EQUITY
v.
CHARLES L. MAGILL and
MAGILL INSURANCE SERVICES,
INC. ,
NO. 96-2497 EQUITY
Defendants
AMENDED COMPLAINT
FOR PRELIMINARY INJUNCTIVE RELIEF
1.
Plaintiff RONALD L. KEPNER (hereinafter referenced as
"Kepner") is an adult individual who resides at 1472 Zimmerman
Road, Carlisle, cumberland County, Pennsylvania 17013.
2.
Plaintiff KEPNER INSURANCE, INC. (hereinafter referenced as
"Kepner, Inc.") is an inactive corporation organized and existing
under the laws of the Commonwealth of Pennsylvania, with offices
at 1472 Zimmerman Road, Carlisle, Cumberland county, Pennsylvania
17013.
3.
Defendant CHARLES L. MAGILL (hereinafter referenced as
"Magill") is an adult individual with business offices at Tudor
Place, Suite 2, 50 Brookwood Avenue, Carlisle, Cumberland county,
Pennsylvania 17013.
4.
Defendant MAGILL INSURANCE SERVICES, INC. (hereinafter
referenced as "Magill, Inc.") is a corporation organized and
WAYNU F. SIIAOU
A.....,...l~w existing under the laws of the Commonwealth of Pennsylvania, with
!S W<<t romIm 6lrctl
Carliak, ......yl'''"'
17013
c_.Ilo
.
ol'ficon nt 'I'udor Plnce, suite 2, 50 Brookwood Avenue, Carlisle,
cumborlnnd county, Pennsylvania 17013.
.
5.
In .Jnnunry of 1991, the parties hereto entered into two
I'olntod nlJl"ooments which established various legal relationships
nmollg tho pnt'tioo aD more particularly set forth therein.
6.
'/'ho fit'ot of the agreements was the Agency Transfer
Agroomont whoroby Plaintiffs sold their insurance interests to
Do fondant MAGILL, INC., a copy of wpich is attached hereto as
Exhibit "A" and incorporated herein by reference as though fully
Bot forth.
7.
Tho socond agreement was an Associate Agent Agreement
whoroby Dofondants engaged Plaintiff KEPNER as an agent of
Dofondants, a copy of which is attached hereto as Exhibit "B" and
incorporated herein by reference as though fully set forth.
B.
Various disputes among the parties resulted in litigation
among the parties docketed in this Court to No. 94-394 Equity
'I'orm,
9.
WAVt/IlI', SIIAUII
A.....)' It I.....
nwu'l".....'ti&tmt
.'.,b.".I"rM.)lnnil
11UII
On January 23, 1995, your Honorable Court in the person of
tho Honorable Edgar B. Bayley, J., promptly entered a Decree Nisi
herein aftor more than a year of litigation among the parties
herein.
-2-
10.
By not filing a Motion for Post-Trial Relief within ten days
.
from entry of the Decree Nisi, Plaintiffs indicated their
acceptance of the decision in this case in spite of the denial of
the requested adjudication that the controlling agreements were
null and void as to Plaintiffs by reason of Defendants' several
material violations thereof.
11.
Against the obvious weight of the credible evidence,
Defendants manifested their determination to continue this
litigation by filing a Motion for Post-Trial Relief.
12.
As a result of Defendants' filing for post-trial relief,
Plaintiffs filed a subsequent Motion for Post-Trial Relief in the
second ten days after entry of the Decree Nisi to protect the
record against waiver in the unlikely event of modification of
the Decree Nisi by your Honorable Court.
13.
In their Motion for Post-Trial Relief, Plaintiffs expressly
stated that they would withdraw their Motion if Defendants were
to withdraw their Motion.
14.
Upon denial of their Motion for Post-Trial Relief,
Defendants appealed to the superior Court.
15.
WAYNIl F. SIIAnC
AUomty at Law
II Wu' I'omIIlI SInd
CatUde, recw)'lvWa
1701l
The superior Court reviewed the more than 1,700 pages of
record that Defendants generated and reproduced in an attempt to
-3-
WAYNU 1', SIIADI!
AtlofDcy It Law
55 w... r.mrm SInd
c.ru.Ie, """""....11
17011
confuse the issues in this case and rejected the appeal in one
sontenco of n memorandum opinion which stated: "We agree with
.
thc trial court's analysis and will not expand upon the reasoning
sct forth therein."
16.
Notwithstanding the conspicuous lack of merit of their
claims of error, Defendants have continued to prolong the
litigation in this case by filing a Petition for Allowance of
Appeal with the supreme Court of Pennsylvania on or about April
12, 1996.
17.
Prior to filing their Petition for Allowance of Appeal to
the supreme Court and with obvious knowledge of their intention
to do so, Defendants served notice upon Plaintiff KEPNER on April
2, 1996, of termination of the Associate Agent Agreement. A copy
of the notice is attached hereto as Exhibit "C".
lB.
In said notice of termination, Defendants asserted that the
termination was for just cause and cited, as grounds for just
cause, contentions that were expressly rejected by your Honorable
Court in the pending litigation.
19.
Plaintiffs believe and therefore aver that Defendants are
asserting just cause in an attempt to invoke the provisions of
Paragraph 3,03 of the Associate Agent Agreement which would
forfeit the right of Plaintiff KEPNER to profit sharing
compcnsation for the first half of 1996.
-4-
20.
Article VI of the Associate Agent Agreement gives Plaintiff
.
KEPNER the right, upon t~rmination of the Agreement, to purchase
all insurance business written by anyone with Defendant MAGILL,
INC, for insureds which have locations in Cumberland County even
if they also have locations outside Cumberland County.
21.
At the time of execution of the Agreements on January 31,
1991, Defendant MAGILL, INC. had hundreds of insureds in its
Harrisburg office.
22.
Defendants have redacted the monthly commission statements
of the agency from the moment of execution of the controlling
agreements and have excluded Plaintiff KEPNER from the file room
of the Carlisle office of the agency for more than two years.
23.
In contrast with the insureds of the former Kepner agency,
Plaintiffs have no knowledge of the identities of the insureds of
the Magill agency and as to which insureds may have locations in
Cumberland County.
24.
WAYIlll F. SIIADU
A.....,. ..taw
.s, Wr" l'umfm 6lnd
CalIWc. I'am.,tvanla
17013
After being served with the termination notice, Plaintiffs
requested of Defendants the following information with respect to
each insured to enable plaintiffs to value the policies written
by representatives of the agency other than Plaintiff KEPNER for
the purpose of the buy-sell transaction:
(a) The names and addresses of the policyholders;
-5-
WAYNU F. SIIADJ!
AUomty .t I....
SJ Wfft l'omfrct Stmt
""litle, l'awyl,....
.701l
(b) The company with which the insurance is written;
(c) The policy number which would reveal the type of policy
.
and risks insured;
(d) The annual premium for each policy; and
(e) How long the insured has been with the Magill agency.
25.
Plaintiffs need the foregoing information because all of the
requested items are important valuation factors as bearing upon
the desirability of the business and the likelihood that it can
be retained after purchase.
26.
By letter of April 24, 1996, Defendants indicated that they
would refuse to provide the requested policy information and that
it was not necessary to valuation of the policies.
27.
Plaintiffs aver that the following conduct of Defendants
indicates an absence of good faith on the part of Defendants with
respect to the termination procedure in general and the buy-out
provisions in particular:
(a) filing an appeal to the supreme Court which is devoid
of merit;
(b) asserting just cause termination upon grounds which
have been expressly rejected by your Honorable Court;
(c) refusing to provide policy information which is
fundamentally esscntial to valuation for the buy-sell;
(d) attempting to imposc upon Plaintiff KEPNER a
requirement to pledge collatoral for thc dcferred payment
-6-
WAYNn F. SIIAI1I!
Alent)' d law
SlW"II'oall"'_
Calli"., ......rl".1a
17011
...
provisions of the buy-sell where there is no such requirement in
Paragraph 6.02 or any other provisions of the Associate Agent
.
Agreement; and
(e) restricting the access of Plaintiff KEPNER to the
office that DefendantB are contractually required, under
Paragraph 2(b) of the Agency Transfer Agreement, to maintain for
plaintiff KEPNER to only when Defendant MAGILL is present.
28.
Even if Defendants were to agree to provide the requested
policy information, Plaintiffs aver that the absence of good
faith on the part of Defendants makes it impossible for
Plaintiffs to accept the word of Defendants as to which of the
hundreds of policyholders of Defendants have Cumberland County
locations so that identification of the policyholders and an
independent investigation by Plaintiffs are necessary.
29,
Plaintiffs believe and therefore aver that it is the
intention of Defendants to cut Plaintiff KEPNER off as of July 1,
1996, from the hundreds of insureds that he brought to the agency
by terminating all office support and all commission payments to
Plaintiff KEPNER.
30.
Plaintiffs further believe and therefore aver that it is the
intention of Defendants to attempt to gain an unfair advantage
over Plaintiffs by attempting to terminate the livelihood of
Plaintiff KEPNER while also refusing to pay to Plaintiff KEPNER
tens of thou Bands of dollars that your 1I0norable Court found more
-7-
WAYND F. SIIAIlII
A.....,... Low
llW","""nt_
C"llJk, ......,,,""'
1701l
than a ycar ago that Defcndants should have paid as much as four
years ago.
,
31.
If Defendants are permitted to terminate the Associate Agent
Agreement prior to payment of the judgment in favor of Plaintiffs
and prior to completion of the buy-sell procedure, the ability of
Plaintiff KEPNER to exercise his rights under the buy-sell
provisions and the business reputation and relationships of
Plaintiff KEPNER will be harmed in ways that would be irreparable
and incapable of being compensated by money damages.
WHEREFORE, Plaintiffs respectfully request that your
Honorable Court issue the following equitable relief to prevent
Defendants' gaining an improper advantage from their wrongful
conduct and to preserve the status quo until the merits of this
case can be hoard and determined:
(a) Defendants be enjoined from terminating the agreements
among the parties until payment of the judgment in favor of
Plaintiffs and against Defendants and until completion of the
applicable buy-sell procedures;
(b) Defendants be required to provide Plaintiffs with the
policy information requested herein to be verified by an
inspection of the insurance files of Defendants by an independent
third party designated by the parties or by Order of Court; and
-B-
"
;Y'
.,.. .
. .
.
. '.
.
AGENCY TRANSFER AGREEI'1EN'l'
THIS AGREEI1ENT, made this q ~ '\" d'ay of ~ \" \1 ,,~. ~
..
, 1991,
"
by and among RONALD L, KEPNER and KEPNER INSURANCE, INC" a
corpo~ation organized and existing under the laws of thc
'conunonwcalth of Pennsylvania, of the first part (hereinafter
referenced respectivclY as "Kepncr" and "Kepner"Inc.")
AND
"
MAGILL INSURANCE SERVICES,.. INC., a corporation organizcd and
existing under the laws of the Commonwealth of pennsylvania, of
.
the second part (hereinafter referenced as "Magill, Inc.").
WITNESSETH:
WHEREAS, Kepner, Inc. is an imlUrance agency with a "book of
business" which, for the purposes of this Agreement, is defined
as all insurance policies or binders in effect prior to November
1, 1990, ,.but not including the corporate name of Kepner
Insurance, Inc. or any of the furnishings, fixtures or other
tangible physical assets of Kepner Insurance, Inc./
WHEREAS, Kepner, Inc. desires to transfer the book of
business of Kepner, Inc, to Magill, Inc. exclusive of all
,
accounts receivable of Kepner, Inc. with respect to the book of
business attributable to all policies issued, completed or
renewed by Kepner, Inc. prior to November 1, 1990, and free and
clear of all c~aims that may be asserted as a result of policies
of insurance sold by Kepner, Inc. prior to November 1, 1990/ and
WHEREI\S"foIagill, Inc. desires to assume ownership of the
aforesaid book of business of Kepner, Inc.
EXIIIBIT lOA"
1 : " .:
, .'
l .., ~.._..
. ."
/ ,
" e,
i
-::.~. ,.;.
\ '
NOH, TIlEREFOHE, in exchange fOl" the mutual promises und
"
conunitments set forth herein, the purties hcrcto agree, as
~
follows:
1. Kepner, Inc.. hereby tl'ansfers to ~Iagill, Inc. all
'proprietary interests in the book of busincss of Kepner, Inc.
accruing on and' after Novcmber 1, 1990. Thc transfer shall
includc but not bc limitcd to all insurancc rccords, dally
reports and cxpiration notlces of policies and rcnewals of
policics in forcc and shall includc all supporting documentation
and all rccords of Kepncr, Inc. pertaining to the policies
whatsoever as well as the good will of Kepner, Inc., if any.
2." The consideration for the transfer is, as follows:
(al The terms and provisions of an Associate Agent
Agreement among Charles L. Magill, Magill, Inc. and Ronald L,
Kepner executed concurrcntly herewith and incorporated herein
by reference as though fully set forth/
(b) Magill, Inc. shall maintain the office referenced in
Article V of the said Associate Agent Agreement which shall
be operated under the fictitious name of Kepner Insurance
Associates/ and
(c) Magill, Inc. shall maintain errors and omissions
insurance coveragc upon Kepner, Inc. and Kepner with coverage
limits of at lcast $500,000 and with coverage including "full
prior acts" pertaining to thc book of business of Kepner,
Inc. Copics of all applicable policies and renewals shall be
provided to Kepncr, Inc. and Kepner.
-2-
\,
3, All accounts receivable of Kepner, Inc. attributable to
policies issued, completed, deli.ver~d Ol' renewed by Kepner, Inc.
prior to NovemJjer 1, 1990, and all profit sharing or contingency
amounts payable to Kepner, Inc, for calendar year 1990 by
,insurance carriers due to favorable claims experience resulting
from all policies issued, completed, delivered or renewed by
'Kepner, Inc. prior to November 1, 1990" shall be delivered
immediately by Magill, Inc. to Kepner. Kepner shall maintain
such funds in a sepa~ate account to be applied toward any
accounts payable of Kepner, Inc. attributable to the book of
business of Kepner, Inc. Upon satisfaction of all such accounts
payab~e, any balance of the fund may be distributed by Kepner,
Inc. free and clear of any claims of Magill, Inc. Kepner, Inc.
shall be responsible for paying all accounts payable of Kepner,
Inc, as of the close of business on october 31, 1990/ and Kepner,
Inc. hereby expressly agrees to indemnify and hold harmless
Magill, Inc. against any and all claims made with respect to such
accounts payable, Kepner hereby guarantees th~s obligation of
Kepner, Inc.
4. Immediately upon execution of this Agreement, Magill,
Inc. shall register the fictitious name of Kepner Insurance
Associates with the conunonwealth of Pennsylvania, Department of
State. Kepner, Inc. will then cease all further insurance
business for the duration of the aforesaid Associate Agent
Agreement. In the event of termination of the aforesaid
Associate Agent Agreement, Magill, Inc. shall no longer be
-3-
entitled to utili::e the Kepner name in any form without the prior
written consent of Kepner.
"
5. r'lagill'~ Inc, shall not engage itself in the insurance
business with any other corpol'ation or partnership 01: enter into
'any equity pl'oduction agreement in cumberland County,
Pennsylvania, without first obtaining the written consent of
Kepner.
"
6.
Magill, Inc. shall not terminate or cause to be
terminated any agency agreement with any insurance company with
which Kepner was licensed prior to November 1, 1990, at any time
without the prior written consent of Kepner.
7. Magill, Inc. shall not transfer or rewrite any insurance
,
policies that have been written by Kepner, Inc. to another
insurance company without the prior consent of Kepner,
B. Kepner, Inc. will cooperate with Magill, Inc, in the
smooth and efficient transfer of the book of business of Kepner,
Inc. to Magill, Inc. including the issuance of a letter to each
of the insureds of the book of business of Kepner, Ino. at the
expensc of Magill, Inc. informing the insurcd of the relationship
of Kepner and Magill, Inc. and of all other pertinent matters
conccrning the transfer of the book of business of Kcpner, Inc.
to Magill, Inc.
9. Kepner, Inc, hercby warrants to Magill, Inc. that there
are no known creditors or claims pending against Kepner, Inc. on
account of any policies of insurance that were issued, completed,
delivered or renewed by Kepner, Inc. prior to Novembcr 1, 1990,
-4-
" .
,
"
~
~;:: .
ancl that, at the date of execution of" this Agreement, Kepner,
Inc, is unaware 'ilf any claims, actions, complaints, suits,
demands or other legal proceedings either threatened or pending
against Kepner, Inc. Kepner, Inc. shall indemnify and hold
'harmless Magill, Inc. with respect to any such claims, actions,
complaints, suits or other legal proceedings relative to policies
issued, completed, delivered or renewcd by Kcpner, Inc. "prior to
November 1, 1990. Kepner hercby guarantecs.this obligation of
Kepner, Inc.
10. Any and all notices, designations, consents, offers,
acceptances, or any other communications provided herein. shall be
"-
given in writing by certified mail, return receipt requested,
addressce only, and shall bc deemed to be given on the date of
mailing. Thcy shall be addressed, in the case of Magill, Inc.,
to the pr1ncipal office of Magill, Inc., and in the case of
Kepner, to 1472 Zimmerman Road, Carlisle, Pennsylvania 17013, or
to any other address which may be designated therefor by Kepner
to Magill, Inc. in writing,
11. If any action at law or in equity is necess~ry to
enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorney fees, costs and
expenses of litigation in addition to any other relief to which
the prevailing party may be entitled.
12, The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as
-5-
.
though such invalid or unenfol:ceable provisions were omitted,
13. No change or modification of this Agreement shall be
,
enforceable against any party unles:.l the same shall be in writing
and Stgned by the party against whom enforcemcnt is sought.
14. This Agreement represents the entire agreement bctwcen
or among the partics with rcspect to the subject matter hercof
and supersedes all prior agreements and "understandings with
rcspect thereto.
15. This Agrecment shall be governed as to validity,
interpretation and effect by the laws of, the commonwealth of
pcnnsylvania in cffect at the date hereof.
,
16. This Agrccment shall not be strictlY construcd against
~ny party hereto. Whenever the context shall so require, all
words herein in the male gender shall be deemed to include the
female o~ neuter gender, all singular words shall include the
plural and all plural words shall include the singular.
17, This Agreement shall be binding upon and enforceable by
the parties hereto, their heirs, executors, adIDinistrators,
successors and assigns.
IN WITNESS WHEREOF, the undersigned have hereunto set their
hands and seals the day and ycar first above written, intending
to be legally bound.
ATTEST:
~.;i~
KEPNER INSURANCE, INC.
BY~ --IP (SEAL)
prcstcfcr
-6-
~ ./~'.
.'(.. -: .
'.
ASSOCI A'l'E JlGEN'l' AGHEENEN'l'
THIS JlGREEt'lENT, made this?J..s:.-. "day of j <\"-1 <J~R"I
, 1991,
'.
by and among CIlJlHLES L. ~lJlGILL and MJlGILL lNSUHJ\NCE SERVICES,
INC., a corporation organi::ed and existing under the lal4s of the
'conunonwealth of Pennsylvania, of the first part (hereinafter
referenced respectively as "Magill" and lI~lagill; Inc. ")
11 N D
"
RONALD ,L. KEPNER, of the ,second part (hereinafter referenced as
"Kepner" ) .
..
WITNESSETH:
WHEREAS, Kepner pesires to form a business association with
Magill, Inc., whereby the primary involvement of Kepner will be
in sales of various lines of insurance/ and
WHEREAS, Magill, Inc, mutually a~d reciprocally desires to
form such business association with Kepner.
..
NOW, THEREFORE, in exchange for the mutual promises and
commitments set forth herein, the parties hereto agree, as
follows:
ARTICLE I
TERM OF AGREEMENT
1.01 Term of Aqreement. This Agreement shall continue in
full force and effect until terminatea by either party hereto
upon ninety (90) days' written notice thereof to the other. It
is specifically under~tood and agreed among the parties hereto
that the relaj:ionship between Magill, Inc. and Kepner is that of
independent contractors.
EXHIBIT "B"
;1 .
t. ,t
. ,
,
.,
'.-l
l\R'l'l Cf,E II
"
DUTIES OF KEPNER
..
2.01 Dutics of Kepner. Kepner is hel:eby engaged as an
associate of Magill, Inc, and shall work at the offices of
in carlisle, pcnnsylvania, Nith the option of soliciting
insurance busincss anywhere within the conunonwealth of
Pennsylvania. Kepner shall devote his time toward sales
production of new personal and commercial lines insurancc
businesS. In addition, Kepner shall provide "outsidc" service to
Magill'~C'
(2-R-K
his commercial accounts, particularly at time of renewal.
Magill, Inc. shall provide servicc for all personal lines
,
insurance busincss written by Kepner and primarily "insidc"
service for all commercial lincs insurance business written by
Kepner. Kepner shall be cntitled to make decisions concerning
the operation of the Carlisle office of Magill, Inc. subject to
the approval of the President of Magill, Inc. Such operational
decisions shall includc pcrsonnel matters including establishment
.
of employce duties for office personnel. and engaging, retaining
and terminating office personnel/ budgetary matters i~cluding
advertising and operating expenses/ and agency procedures and
, development.
2.02 Disabilitv. For thc purposes of this Agreement, Magill
or Kepner shall, be deemed to be permanently disabled if he is
detcrmined to be physicallY or mentally unable to perform any or
all of his ordinary dutics with respect to Magill, Inc. for a
period of six (6) succcssivc months due to illness or accident.
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In determining periods of disability, period::; of disability shall
be regarded as continuing and succes'sive if the party has not
,
been able to return to full duty for at least one (1) continuous
month between such periods of disability.
2.03 Restriction Against other Employment. During the term
of this Agreement, Kepner may independently set his work
schedule. Kepner may also engage in any other bUsines~ or
professional activity other than insurance sales provided that it
is not conducted in t:.he offices of Magill, Inc. and further
provided that it does not compete with the business of Magill,
Inc. in any manner whatsoqver.
ARTICLE III
COMPENSATION
3.01 Basic compensation. As compensation for services
rendered under this Agreement, Kepner shall be entitled to
receive from Magill, Inc. the following commissions which shall
be payable on the second business day following the 25th of the
month as to commissions received between the 11th and the 25th of
the month and on the second business day following the lOth of
the month as to commissions received between the 26th day of the
previous month and the lOth day of the month:
(a) Fifty (50%) percent of commissions less any return
premiums for all neW personal and commercial property and
casualty insurance business written by Kepner on or after
November 1, 1990/
(b) Eighty (80%) percent of conunissions less any return
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premiums for" all neW 1 He and annuity j,nmll'ancc business
written by Kepnel: on or aftel: Hovembel: 1., 1990, and fOl:ty
'.
(40%) percent of cOl1unissions less any retul:II premiums (or all
renewals of life and annuity insurance business written by
Kepner after Novcmber l, 1990/
(c) Fifty (50%) perccnt of conunissions,less any return
premiums for all rcnewals of commcrcial propcrty and casualty
"
insurance busincss written by Kcpner whether before, aftcr or
on November 1, 1990/ and
(d) Forty (40%) percent of commissions less any return
prcmiums for all renewals of personal propcrty and casualty
insurance business written by Kepner whether beforc, after or
on November 1, 1990.
3,02 Bonus compensation. In the cvent that Kepner shall
meet the sales production goals for new property and casualty
insurance business as set by Magill, Inc. prior to January 1 of
each year of this Agreement, Kepner shall be entitled to receive
as additional compensation for serviccs rendered under this
Agreement, an additional ten (10\) percent of commis~ions for all
neW property and casualty business written by Kepner during the
'applicable calcndar year less any return premiums, Said bonus
compensation shall be payable within forty-five (45) days after
completion of cach calendar year. For the calendar year
commencing January I, 1991, the sales production goal for Kepner
shall be $300,000 of premiums. In the event that this Agreemcnt
should be terminated by Magill, Inc. for just causC or by Kepner
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without just cause, lZepnel' "hall not be entitled to bonu:.;
compensation for the yeal: in \~hich tlii:.; Agreement i:i terminated.
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In the event that this Agreement should be terminated by 11agill,
Inc. without just cause or by Kepner with just cause, then Kepner
'shall be entitled to pro-rated bonus compensation for the year of
termination of this Agreement. Calculation of such pro-rata
bonus compensation shall be upon the ba~is of adjustment of the
sales production goal by a fraction, the numerator of which would
be the number of days from January 1 until tcrmination and thc
denominator of which would be 365.
3.03 Profit Sharinq. As turther additional compensation for
scrvices rendercd under this Agreement if Kepner's insurance
business shows a net profit, Kepner shall be entitled to receive
the proportionate amount of any profit sharing or contingency
payments,received from the respective carriers attributable to
the insurance business written by Kepner with each carrier.
Kepner's sharc of such funds shall be determined by a fraction,
the numerator of which would be all insurance business written by
Kepner with the carrier whether before, on or after November 1,
1990, and in effect for the year of the calCUlation. The
denominator of the fraction would be all insurance business
written by Magill, Inc. with the carrier and in nffect for the
ycar of the calculation. Magill, Inc. shall provide to Kepner,
immediately upon receipt, copies of the annual loss ratio and
production level records for all insurancc business written by
Magill, Inc. wit~ each carrier. All profit sharing compensation
5
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due Kepner shall be paid within ten (lO) days of l'eceipt of the
funds by 11ngill, Inc. In the event t:hat this Agreement should be
'.
terminated by 11.1gill, Inc. for just cause or by Kepner without
just cause, Kepner shall not be entitled to profit sharing
'compensation for the year in which this Agreement is terminated.
In the event that this Agreement should be terminated by Magill,
Inc. without just cause or by Kepner with just cause, then Kepner
"
shall be entitled to profit sharing compensation calculated as
set forth above.
ARTICLE IV
BENEFITS
4.01 Health Insurance. Magill, Inc. shall include Kepner in
the current medical and hospitalization plan of Magill, Inc. or
its equivalent without cost to Kepner, Magill, Inc. shall make
such coverages, including dental and vision coverages available
to the family of Kepner at the expense of Kepner.
ARTICLE V
EKPENSES
5.01 Office Expenses. Magill, Inc. shall provi~e sufficient
office space, equipment and agency and secretarial staff to
enable Kepner to discharge his insurance service obligations
under the terms of this Agreement.
ARTICLE VI
BUY-SELL
6.01 option EventS. Termination of this Agreement by
written notice as hereinabove provided, the death, retirement or
6
disability of [olagill or Kepner 01: the bankruptcy of ~lagill, Inc.,
shall constitute option events. "HeHrement" shall includc the
transfer, sale 01: dissolution of ~lagill, Inc. In the event of
occurrcnce of an option event other than the event of Kepner's
'giving written notice of termination of this Agreement, Kcpner,
his hcirs, executors or administrators, may purchase all
insurance busincss written by Kepner whcther before, on.,or after
Novembcr 1, 1990, and all insurance business written by anyone
else with Magill, Inc, for insureds which have locations in
cumberland county, Pennsylvania, eVen if they have locations
outside Cumberland County, Pennsy~vania. In the event of the
occurrence of the option event of Kepner's giving written notice
of termination of this Agreement as hereinabove provided, Kepner,
his heirs, executors or administrators may purchase all insurance
business written by Kepner whether before, on or after November
1, 1990. In the eVent of occurrence of an option event after
four years from the date of this Agreement, the purchase price
for said insurance business' shall be one-half its fair market
value, In the event of occurrence of an option event within the
first year from the date of this Agreement, the purchase price
for said insurance business' shall be one-eighth its fair market
value. In the eVent of occurrence of 'an option event wlthin the
second year from the date of this Agreement, the purchase price
for said insurance business' shall be one-fourth its fair market
value. In the event of occurrcncc of an option event within the
third year from the date of this Agrccment, the purchase price
7
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for said insurance business' shall be three-eighths its fair
lIlarket value. In the event of occurl!cnce 01' an option event
Hithin the fourt'l'l year fL'olll the date of this Agreement, the
purchase price for said insurance' business shall be one-half its
'fair market value. Pair mar};et value shall be determined as any
valUe agreed by Magill and Kepner OlO their autho~ized
representatives. In the absence of Guch agreement, fair market
"
value will be determined by appraisal. Magill and Kepner would
each designate an appraiser. Each of the appraisers would be
compensated by the party selecting the appraiser. In the event
of the inability of the appraisers tp agree upon a value, the two
apprai:;ers shall select a third appraiser, In the event of the
inability of the two appraisers to agree upon a third appraiser,
a third appraiser shall be appointed by Order of the court of
Common Pleas of cumberland County, Pennsylvania. A valuation by
two of the three appraisers shall be final and conclusive.
6,02 Terms of Payment. Kepner may elect to make payment in
a lump sum or in four equal annual installments payable on the
anniversary date of the option event. In the event of election
of installment payments, the parties shall apply a mutually
agreed interest rate. In the event of the inability of the
parties to agree upon an interest rate, an interest rate shall be
set by the appraisers 'referenced hereinabove.
ARTICLE VII
COVENANT
7.01 Covenant not to Compete. Unless otherwise agreed in
,
. Add wordingl "Hritten by KepnePlI D.. IC e(c
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writing, it is expre"sly agreed that, in the event that a party
hcreto voluntarily terminates thi,s ',gfeement without cause or is
~
involuntarily tel:minated from this Agreement for cause, the party
shall not solicit or cause othcrs to solicit insureds of
'insurancc business written by the othcr parties to this Agreement
within five (5) years of the datc of this Agrccment.
Furthermorc, all current and futurc agency personnel shall be
..
required to sign a similar covcnant not to compete. This
Agreement shall be binding upon all business of Magill, Inc. and
Kepner Insurance Associates. copies of these executed agreements
shall be provided to Kepner.
ARTICLE VIII
GENERAL PROVISIONS
8.01 Notices. Any and all notices, designations, consents,
offers, ac:ceptances, or any other conununications provided herein
shall be given in writing by certified mail, return receipt
requested, addressee only, and shall be decmed to be given on the
date of mailing. They shall be addressed, in the case of Magill
or Magill, Inc., to the principal office of Magill, ~nc., and in
the case of Kepner, to 1472 zimmerman Road, Carlisle,
Pennsylvania 17013, or to any other address which may be
designated therefor by Kepner to Magill or Magill, Inc. in
wri ting.
8.02 Attorney FeeS and Costs. If any action at law or in
equity is necessary to enforce or interprct the terms of this
Agrcement, the prevailing party shall be entitled to rcasonable
9
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attorney fees, costs ond expenses of litigation in addition to
any other relief to which the prevaii'ing party may be entitled,
0.03 severability. 'l'he invalidity or unenforceability of
any particular provision of this Agreement shall not affect the
'other provisions hereof, and this Agreement shall be construed in
.
all respects as, though such invalid or unenforceable provisions
were omitted.
.
0.04 Modifications. !:to change or modification of this
Agreement shall be enforceable against any party unless the same
shall be in writing and signed by the party against whom
enforcement is sought.
B.~5 Entire Agreement. This Agreement represents the entire
agreement between or among the parties with respect to the
subject matter hereof and supersedes all prior agreements and
understandings with respect thereto,
B.06 Governing LaW. This Agreement shall be governed as to
validity, interpretation and effect by the laws of the
commonwealth of Pennsylvania in effect at the date hereof.
B.07 Headings. The headings used in this Agreement are for
convenience only and do not constitute substantive matter to be
considered in construing the terms of this Agreement.
B.OB Construction. This Agreement shall not be strictly
construed against any party hereto. WheneVer the context shall
so require, all words herein in the male gender shall be deemed
to include the female or neuter gender, all singular words shall
include the plural and all plural words shall include the
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0.09 Enforceability. This Agreement shall be binding upon
'.
and enfoL'ceable by the parties hereto, their heirs, executors,
administrators, successors and assigns.
IN HITNESS ImEREOF, the undcrsigned have hercunto set thcir
hands and scals ,the day and year first above writ'ten, intending
to be legally bound.
"
ATTEST:
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e retary
MAGILL INSURANCE SERVICES, INC.
(SEAL)
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~il L&40.dA(SEALl
Ronald L. Kepner - ...
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3675 Varlnn Wny, Suite 202
Horrl.uurg, PA 17110
(717) 541.9300' Fnx (71'11541,9633
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April' 1, 199G ,.'
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Ronald Kepner
1472 Zimmerman Road
Carlisle, FA 17013
Certified Mail - RRR
Addressee Only
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Re: Termination of Associate Agent Agreement
Ron:
This is to formally notify you of the termination of the
Associate Agent Agreement of January 3~; 1991, in accordance
with lIrticle I of the Agreement. This termination is for
"just cause" for the reasons that you have failed to perform
your qbligations under the agreements executed by the two of
USI you have failed to produce at any minimally acceptable
level I you have failed to maintain adequate office hoursl
you have conducted yourself with the office staff in a rude
and non-professional manner and you have failed to service
clientele in a minimally acceptable manner.
lIrticle I of the Agreement requires a ninety (90) day
notification. Article VIII provides that the notice is
effective upon mailing. With the ninetieth day falling on
June 30, 1996, effective July 1, 1996, the terms of the
Associate Agent Agreement shall no longer be in effect,
Because of your past outbursts and disruptions in the
office, you are not permitted to enter the office unless you
arrange with me personally in advance, a time that both of
us can be present.
Finally, I want to clearly inform you that while the
Associate Agent Agreement is being terminated by this
letter, the Agency Transfer Agreement contains no
provisions for termination and will continue in effect
unless and until you have made satisfactory arrangements for
the purchase of any portion of business written through you
or by me.
EXHIBIT "e"
.
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LAW Ol'Flcns OF
JACOBSEN Be MILKES
52 EAST 111011 STlUlllT
CARLISLE, PA pOI3.3085
(717) 249,6427
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LAW OFFICES OF
JACOBSEN & MILKES
'2 BAST 11I0" STRSBT
CARLlSLIl, PA 17013.308'
(717) 249,6427
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VERIFICATION
I verify that the statements mllde in this Answer are true and correct, I
understand that fwse statements herein are made subject to the penwties provided at
18 Pa, C,S,A, ~4904, relnting to unsworn fwsification to authorities,
Datcd:S{ ~\ (9{,
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: IN THE COURT OF COMMON PLEAS
: CUMBERLAND COUNTY, PENNSYLVANIA
: NO, 96-2497 EQUITY
NAI~D L, KEPNER und
KEPNER INSURANCE, INC.,
PluintilTlI
V,
CHARLES L, MAGILL und : CIVIL ACTION. EQUITY
MAGILL INSURANCE SERVICES,
Defenduntll
CERTIFICATE OF SERVICE
I, Jennifer L, Coyle, hereby certify that u tme and correct copy of the Order of
Court und Defenduntll' Motion for Heuring in the above.cupUonod muttor, was duly
served upon Wuyne Shade, counsel for PluintifTs, by Iirst,c1ulIs United Stutes muil, on
July 16, 1996, to the following uddrells:
Wayne Shude, Ellq,
53 W, Pomfrot St,
Carlisle, PA l70l3
I hereby verify that the stutements mude in the foregoing ure true und correct,
I understand that fuIse statements herein ure made subject to the ponuItiell of 18
Pa,C,S. Section 4904, reIuting to unsworn fuIsificution to uuthorities,
Duted: July 16, 1996
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LAWOFFlCBSOP
JACOBSEN III MILKES
'21!AST HIOH STRBBT
CARLISLE, PA 17013.30U
(717) 249.6427
JUN 2 7 1996
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RONALD L. KEPNER and
KEPNER INSURANCE, INC.,
Plaintiffs
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - EQUITY
v.
CHARLES L. MAGILL and
MAGILL INSURANCE SERVICES,
INC.,
: NO. 96-2497 EQUITY
Defendants
STIPULATION OF COUNSEL
AND NOW, this 22nd day of May, 1996, come Plaintiffs and
Defendants by and through their respective attorneys, Wayne F.
Shade, Esquire, and Samuel W. Milkes, Esquire, of Jacobsen &
Milkes, and stipulate and agree, as follows:
1. The hearing scheduled for Friday, May 24, 1996, is
continued by agreement of the parties in order to pursue
negotiations toward comprehensive resolution of the issues among
the parties.
2. Pending further agreement of the parties or further
Order of Court, the status quo will be maintained as though the
notice of termination had not been given except that, in the
event of failure to achieve comprehensive resolution of the
issues, the effective date of the notice shall remain April 1,
1996. In the event either party requests a reschedUling of the
hearing in this matter, the effective date of the termination
shall be the date of that scheduled hearing (or June 30, 1996,
whichever is later), unless otherwise agreed upon by the parties,
or directed by Order of Court.
3. Such maintenance of the status quo shall mean that
Plaintiff Kepner shall continue to be paid his monthly
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