M PROPERTIES, LLC and MICHAEL MARTIN v. STATE FARM FIRE AND CASUALTY COMPANY and SCOTT LEMING INSURANCE AGENCY, INC.

IN THE DISTRICT COURT OF OKLAHOMA COUNTY STATE OF OKLAHOMA FILED IN DISTRICT COURT OKLAHOMA COUNTY (1) M PROPERTIES, LLC and (2) MICHAEL MARTIN, Plaintiffs, v. (1) STATE FARM FIRE AND CASUALTY COMPANY, and (2) SCOTT LEMING INSURANCE AGENCY, INC., Defendants. FEB 17 2026 RICK WARREN COURT CLERK CASE NO. CJ-2026-1191 PETITION I. INTRODUCTION 1. This Petition alleges a systematic and pervasive Scheme on the part of Defendants (a) State Farm Fire and Casualty Company ("State Farm") and (b) State Farm's captive agent, Scott Leming Insurance Agency, Inc. ("Agent" or "Leming").1 By and through their Scheme, Defendants have wrongfully denied a series of valid insurance claims Plaintiffs submitted for storm damage to Plaintiffs' Insured Properties. Defendants' Scheme has caused substantial harm to Plaintiffs. II. PARTIES AND JURISDICTION 2. Plaintiff Michael Martin is a natural person residing in Stillwater, Oklahoma. Michael Martin is the sole member of Plaintiff M Properties, LLC. 3. Plaintiff M Properties, LLC is an Oklahoma limited liability corporation. Its sole member is Plaintiff Michael Martin. Through M Properties, LLC, Plaintiff Michael Martin owns the Insured Properties at issue in this lawsuit. These Insured Properties are listed in Table 1, below. Each Insured Property is insured through a separate State Farm Policy. a. Insured Properties 502 South Duck and 409 South Duck are insured under State Farm Business Owners' Policies. b. The remaining Insured Properties are insured under State Farm Rental Dwelling Policies. ______________________________ 1 This Petition refers to State Farm and Leming collectively as "Defendants." <table> <tr> <th>No.</th> <th>Insured Property Address</th> <th>Policy No.</th> <th>Claim No.</th> <th>Estimated Storm Damages</th> </tr> <tr> <td>1</td> <td>1621 W. Admiral Avenue, Stillwater, OK 74074</td> <td>96-E6-5196-7</td> <td>36-84S8-64M</td> <td>$38,100</td> </tr> <tr> <td>2</td> <td>1705 W. Admiral Avenue, Stillwater, OK 74074</td> <td>96-E6-5194-2</td> <td>36-84S8-74X</td> <td>$29,450</td> </tr> <tr> <td>3</td> <td>1709 W. Admiral Avenue, Stillwater, OK 74074</td> <td>96-E6-5174-0</td> <td>36-84S8-81P</td> <td>$22,400</td> </tr> <tr> <td>4</td> <td>1713 W. Admiral Avenue, Stillwater, OK 74074</td> <td>96-E6-5197-9</td> <td>36-84S8-86P</td> <td>$29,050</td> </tr> <tr> <td>5</td> <td>2011 W. Admiral Avenue, Stillwater, OK 74074</td> <td>96-E6-5183-9</td> <td>36-84S8-95N</td> <td>$23,650</td> </tr> <tr> <td>6</td> <td>2013 W. Admiral Avenue, Stillwater, OK 74074</td> <td>96-E6-5184-1</td> <td>36-84S9-01C</td> <td>$25,550</td> </tr> <tr> <td>7</td> <td>2015 W. Admiral Avenue, Stillwater, OK 74074</td> <td>96-E6-5202-1</td> <td>36-84S9-06H</td> <td>$24,850</td> </tr> <tr> <td>8</td> <td>2105 W. Sherwood Avenue, Stillwater, OK 74074</td> <td>96-E6-5175-3</td> <td>36-84S9-10G</td> <td>$27,445</td> </tr> <tr> <td>9</td> <td>1809 W. Arrowhead Place, Stillwater, OK 74074</td> <td>96-E6-5179-1</td> <td>26-84S9-18D</td> <td>$36,500</td> </tr> <tr> <td>10</td> <td>515 S. Orchard Street, Stillwater, OK 74074</td> <td>96-E6-5193-0</td> <td>36-84S9-38W</td> <td>$27,150</td> </tr> <tr> <td>11</td> <td>1024 S. Duck Street, Stillwater, OK 74074</td> <td>96-E6-5198-1</td> <td>36-84S9-42Q</td> <td>$22,700</td> </tr> <tr> <td>12</td> <td>412 S. Duck Street, Stillwater, OK 74074</td> <td>96-E6-5203-3</td> <td>36-84S9-47W</td> <td>$32,900</td> </tr> <tr> <td>13</td> <td>416 S. Duck Street, Stillwater, OK 74074</td> <td>96-E6-5182-7</td> <td>36-84S9-53L</td> <td>$36,650</td> </tr> <tr> <td>14</td> <td>127 W. Elm Avenue, Stillwater, OK 74074</td> <td>96-E6-5200-7</td> <td>36-84S9-58G</td> <td>$23,350</td> </tr> <tr> <td>15</td> <td>2824 S. Sangre Road, Stillwater, OK 74074</td> <td>96-E6-5208-4</td> <td>36-84T0-44D</td> <td>$37,825</td> </tr> <tr> <td>16</td> <td>409 S. Duck Street, Stillwater, OK 74074</td> <td>96-AJ-J843-1</td> <td>36-84S9-76P</td> <td>$39,100</td> </tr> <tr> <td>17</td> <td>314 1/2 N. Husband Street, Stillwater, OK 74074</td> <td>96-E6-5192-8</td> <td>36-84T0-37G</td> <td>$18,444</td> </tr> <tr> <td>18</td> <td>314 N. Husband Street, Stillwater, OK 74074</td> <td>96-E6-5190-4</td> <td>36-85K8-18F</td> <td>$31,250</td> </tr> <tr> <td>19</td> <td>502 S. Duck Street, Stillwater, OK 74074</td> <td>96-AJ-L441-0</td> <td>36-84S9-64F</td> <td>$37,665</td> </tr> <tr> <td>20</td> <td>141 S. Monticello Drive, Stillwater, OK 74074</td> <td>96-E6-5171-4</td> <td>36-84S9-34B</td> <td>$30,000</td> </tr> <tr> <td>21</td> <td>2005 W. Admiral Road, Stillwater, OK 74074</td> <td>96-E6-5201-9</td> <td>36-84S8-90M</td> <td>$22,050</td> </tr> <tr> <td colspan="4">Total:</td> <td><b>$616,079.00</b></td> </tr> </table> 4. Defendant State Farm Fire and Casualty Company ("State Farm") is a foreign insurer licensed to do business in the State of Oklahoma. State Farm may be found and served via its statutory service agent the Oklahoma Insurance Department in Oklahoma County, Oklahoma. 5. Defendant Scott Leming Insurance Agency, Inc. ("Leming") is an Oklahoma corporation with its principal place of business in Stillwater, Oklahoma. Through Defendant Scott Leming Insurance Agency, Inc., State Farm subjected Plaintiffs to its Scheme. Defendant may be served with process through its registered agent, Scott Leming, at 1102 W. 6th Avenue, Stillwater, Oklahoma 74074-4371. 6. Leming is a properly joined defendant to this action, as held in close to forty remanded cases against State Farm alleging substantially the same claims and/or Scheme—most recently, Adamo v. State Farm Fire & Cas. Co., 2025 WL 2992560 (W.D. Okla. Oct. 24, 2025); see also Gabel v. State Farm, 25-CIV-430-D, ECF No. 23 Order (W.D. Okla., Oct. 16, 2025) (DeGiusti, C.D.J.); Willard v. State Farm, 2025 WL 2419274 (W.D. Okla. Aug. 21, 2025) (Palk, D.J.) (order consolidating eleven cases, granting each motion to remand, and directing that each case be remanded to the appropriate State of Oklahoma district court); Maher v. State Farm, 2025 WL 1909507 (W.D. Okla. July 10, 2025) (Wyrick, D.J.); Adair v. State Farm, 2025 WL 1263128, at *1 (W.D. Okla. May 1, 2025) (Dishman, D.J.); Pruitt v. State Farm, 2025 WL 1030353 (W.D. Okla. April 7, 2025) (DeGiusti, C.D.J.). As Leming is a citizen of the forum-state, removal of this action by any Defendant would be improper. 7. Defendants have subjected Plaintiffs to the same Scheme impacting numerous other State Farm insureds; accordingly, the Petition’s Scheme allegations here mirror those in other Petitions against State Farm. Indeed, State Farm has subjected policyholders uniformly (both in Oklahoma and in other storm-prone states) to its Scheme by and through the material assistance of its captive agents like Leming. There are unique factual differences across each such Petition—e.g., the date of loss, the agent and adjusters furthering the Scheme, the specific tactics State Farm used in each instance to deny the claim or force its payment under the policy deductible amount, and the resultant damages. 8. Additionally, Plaintiffs allege Leming’s express representations about both the quality of State Farm’s replacement cost coverage and State Farm’s claims handling in the face of storm damage to roofs. Plaintiffs relied on these representations in switching to and purchasing State Farm coverage for the Insured Properties. These representations were ostensibly false, yet they allowed State Farm to subject Plaintiffs to its Scheme. 9. Nevertheless, because the core misconduct at issue remains materially identical in each instance, State Farm routinely assails these similarities as indicia of fraud. But as the Honorable Judge Scott Palk, Western District of Oklahoma, recently held: the fact that Plaintiffs’ claims are premised on the existence of a widespread scheme by State Farm dispels that the use of a formulaic petition, in and of itself, demonstrates actual fraud. Willard v. State Farm, 2025 WL 2419274, at *5 (W.D. Okla. Aug. 21, 2025)(Palk, D.J.). This specific Petition “include[s] unique factual allegations demonstrating the specific alleged harm suffered by each plaintiff.” Id. Thus, State Farm’s attacks on the “cookie- cutter” or “form” nature of the numerous petitions based on the Scheme filed against it (arguments State Farm routinely recycles while ignoring the particular fact allegations of each petition) are meritless. See Pruitt v. State Farm Fire & Cas. Co., 2025 WL 1030353, at *4 (W.D. Okla. April 7, 2025) (DeGiusti, C.D.J.) (“As State Farm is likely aware, several judges in this district have found that allegations of cookie-cutter complaints are, alone, insufficient to establish fraudulent joinder.”) (citing Norman v. State Farm Fire & Cas. Co., 2025 WL 342871, at *4 (W.D. Okla. Jan. 30, 2025) (Russell, D.J.)). 10. Venue is proper pursuant to 12 O.S. § 137. III. FACTUAL ALLEGATIONS 11. “Like a good neighbor, State Farm is there”—a ubiquitous jingle designed to lure insureds into reliance upon State Farm’s duty of good faith and promises of comprehensive indemnity. But despite its hollow “good neighbor” promises, State Farm employs a systematic and pervasive Scheme throughout Oklahoma, whereby it wrongfully denies its insureds’ claims for damage to their covered property caused by tornado, wind and/or hail. State Farm’s pre-determined denials of wind and hailstorm claims pursuant to the Scheme are unreasonable and lack true justification. State Farm and its agents (including Leming) employ the Scheme intentionally, knowingly, and purposefully for profit. They do so in bad faith. 12. At all relevant times, State Farm’s Scheme is carried out in substantial and material part by its captive agents (like Leming), who are aware of the Scheme, understand its impact on State Farm insureds (like Plaintiffs), and even benefit from the payment reduction the Scheme is designed to achieve. A. Scheme Origins and Implementation 13. State Farm’s Scheme is no accident. Rather, it is the product of careful corporate analysis and planning. It is designed to meet specific goals. This subsection explains the origins, development, and implementation of State Farm’s Scheme. 14. State Farm’s Property & Casualty Claims Department ("P&CCD") identified roof claim payments as the State Farm’s largest operating cost. In response, the P&CCD issued a memorandum identifying that State Farm was overpaying “roof spend” (i.e., indemnity payments under dwelling insurance policies for damage to roofs). P&C Claims is focusing on what we can do to lower our indemnity payments related to Roofs. Last year we had an indemnity over $3.5 Billion dollars and a total of $16.6 Billion over the last 7 years for the Enterprise on roofing. State Farm’s P&CCD followed with an investigation into initiatives to reduce its payments on roof claims and thereby lower State Farm’s “roof spend” and pad its bottom line. 15. To lead that investigation, State Farm’s formed its Wind/Hail Fire Model Enhancement Team ("WHMET"). The WHMET is a star chamber consisting of approximately ten internal State Farm property claims experts. In Barnett v. State Farm, Case No. CJ-20-141 (Grady County, Oklahoma), State Farm Claims Consultant Tom Moss testified to the existence of the WHMET, of which Moss was a member.2 16. Under the direction and leadership of Nichole Manduca, and with the advice and direction of senior State Farm leadership (including Wensley Herbert, Tyrone Smith, Scott Welsh, Wendy Massa, Kathy Rees, and Moss), the WHMET issued a series of 2 See Plaintiffs’ Motion to Compel, Hosier v. State Farm, Case No. CJ-2021-1741 (Feb. 23, 2024, Grady Cty, Okla.), at pp. 6-8, available on OSCN. recommendations, which State Farm implemented under its Wind/Hail Focus Initiative: its plan to reduce payouts on roof replacements.3 These included (but were not limited to): • enterprise-wide restrictions for all State Farm claims handling personnel on their ability to issue payment for total roof replacements without prior managerial approval; • enterprise-wide use of HAAG training for all claims handlers working on wind and/or hail claims; and • mandatory retraining for those adjusters who issue too may roof payments. On information and belief, these tactics were memorialized and implemented through a series of “Quality Plans.” 17. The result is nothing short of a Scheme to undercut State Farm’s insureds to pad its bottom line. State Farm launched the Scheme with test runs in Dallas, Texas and then implemented in all hail-prone states in approximately early 2021. State Farm tracked, documented, and analyzed its reductions in total roof replacements, total to partial roof replacement ratios, and total roof replacement indemnity. State Farm conducted state by state statistical analyses of such ratios and indemnity savings from approximately 2020. State Farm worked with Accenture4 and the WHMET Team to develop and implement the 3 WHMET Member Tom Moss testified to several WHMET recommendations and implementations affecting State Farm’s handling of wind/hail and roof claims. See id. 4 State Farm employed Accenture (formerly Andersen Consulting), a Fortune Global 500 international consulting firm with a market capitalization of over $150 billion, to develop ways to achieve this indemnity reduction. Accenture provided State Farm with alleged “industry standards” on full roof replacements on Wind/Hail insurance claims nationwide, purporting to show that State Farm was paying for full or total roof replacements at a much higher percentage than the nationwide average. Such an arbitrary endeavor is either a complete fabrication, or some Scheme over several years. The result: a staggering reduction in State Farm’s overall indemnity payments to its insureds at the hand of an array of bad faith claims handling tactics. B. The Scheme Results in the Denial of Valid Roof Claims 18. Defendants’ wind and hailstorm Scheme (the “Scheme”) operates as follows. 1. State Farm Captive Agents Anchor the Scheme. 19. In each instance, State Farm’s Scheme begins with its captive agents (including Leming), who market, sell, procure, and bind (whether at inception and/or renewal) State Farm homeowners’ insurance to the insured. Leming’s involvement exemplifies this foundational part of the Scheme; Plaintiffs discuss it in detail in Subsection C, below, after explaining the mechanics of State Farm’s unlawful claims handling and concocted denials. 2. The Scheme Results in Claim Denial, One Way or Another 20. In each instance, a State Farm insured (here, Plaintiffs) files a valid claim for indemnity under a State Farm insurance policy for damage to the insured property caused by a storm—i.e., wind, hail, and/or tornado. As State Farm has pre-ordained denial of the unsubstantiated and possibly illegal analysis to reach an improper and generalized notion that wind/hail claims and corresponding replacement of a particular roof in question can be evaluated on a uniform basis. Regardless, State Farm and the WHMET acted upon Accenture’s consulting and worked with Accenture to develop its Wind/Hail Scheme to reduce its internal performance measures on percentages of full roof replacements to the alleged much lower industry standards. State Farm found its golden opportunity and determined (before claims occurred) it could substantially reduce its indemnity payouts by lowering its percentage of approval for full roof replacements on Wind/Hail claims. Thus, unnecessary roof replacements and meeting some arbitrary and capricious industry standard became the main target of the WHMET in order to achieve its desired goal of lowering indemnity related to roofs. insured’s roof claim, it leverages the Scheme to achieve that outcome in one fashion or another. 21. It certain cases, State Farm fraudulently denies the claim vis-a vis the roof outright. In other cases, State Farm fraudulently depresses the amount it agrees to pay below the policy deductible, thereby avoiding payment. In practically each case, State Farm manipulates its damage estimate to ignore patent wind, hail, and/or tornado damage to the insured property to avoid payments. 3. The Scheme Turns on Hidden, Bad-Faith Claims Handling Tactics 22. To justify its unlawful denials of valid claims and conceal the Scheme, State Farm’s Scheme employs a series of bad-faith claims-handling tactics. These tactics derived from the WHMET’s work, especially the HAAG5 training it recommended. They include, but are not limited to, the following: 5 State Farm’s use of HAAG to train its claims handling personnel to deny claims is particularly insidious. In Watkins v. State Farm Fire & Casualty Co., an Oklahoma jury unanimously found that State Farm Fire and Casualty Company (State Farm) hired Haag Engineering, a Texas structural engineering firm, to survey damage in Oklahoma and produce biased reports in favor of State Farm following the May 3, 1999, tornados. The jury found that Haag Engineering surveyed the damage in Oklahoma with a pretextual basis for denying claims and wrote “cookie cutter” reports concluding that the tornados produced no structural damage. Instead, the reports concluded that poor construction caused the cracked foundations and moving bricks. Because the jury found State Farm’s conduct willful and malicious, the jury awarded the plaintiffs actual and punitive damages. See Watkins, No. CJ-2000-303; see also State Farm Fire & Cas. Co. v. Simmons, 963 S.W.2d 42, 45 (Tex. 1998); State Farm Lloyds v. Nicolau, 951 S.W.2d 444, 448 (Tex. 1997). Even after the Texas Supreme Court’s ruling that State Farm’s use of Haag Engineering was fraudulent and bad faith conduct, State Farm nevertheless subsequently used Haag Engineering in Oklahoma. Then, State Farm again contracted with Haag Engineering to survey damage on the Gulf Coast following Hurricane Katrina in 2005. This resulted in substantial claims settlements under both the False Claims Act and state law from both State Farm and HAAG. To paper its own punishment, State Farm issued an internal moratorium on its own use of HAAG engineering services, which remains in place today. To skirt that moratorium, State Farm hired HAAG’s educational division to train its claims handlers to perpetuate their joint venture in fraud. 23. State Farm employs a hidden, narrow definition (as well as restrictive claims handling protocols) for hail damage. This allows State Farm adjusters to deny claims even when their loss inspection clearly shows hail damage to the insured roof. State Farm’s narrow and limited definition is absent from the four corners of the policy and hidden from the insured until State Farm uses it to deny a valid claim. State Farm’s captive agents (including Leming here) are fully aware of the narrow and limited definition, this critical disclosure is concealed, and State Farm’s insureds are wholly unaware of coverage limitations until they suffer a loss, file a claim, and receive a denial. It is only when the insured becomes the latest victim of State Farm’s Scheme that the insured learns of State Farm’s internal limitations to its coverage regarding hail damage. This is precisely what happened to Plaintiffs. 24. State Farm’s adjusters misattribute damage to non-covered causes of loss. Most often (including the Insured Properties at issue here), State Farm blames the wind, hail, and/or storm damage on some non-covered cause of loss. State Farm’s adjusters find damage to the insured property but attribute that damage to a non-covered cause of loss—most commonly, “wear and tear,” “pre-existing damage,” or “manufacturer defect.” This finding flies in the face of Defendants’ representations and/or material omissions, which are inherent to the act of procuring, binding, and renewing coverage.6 Critically, 6 As here, this is often stated plainly on State Farm’s denial letter. In other instances, the adjuster simply fails to acknowledge the damage at all. Yet there is, indeed, patent wind- and/or hailstorm damage, such that the insured was compelled to file the claim. The adjuster simply fails to record it as a covered cause of loss—thereby implying that the damage was caused by some other, non-covered cause. Defendants expressly and/or impliedly represent that the Insured Property qualifies for the replacement cost coverage bound by virtue of the act of binding the coverage. Thus, if the roof suffered from a manufacturer defect, pre-existing damage, or substantial wear and tear, the roof may not qualify for coverage (whether at inception or annual renewal). This should be detected by Defendants’ inspection and inform some change in coverage. These defects cannot accrue or appear by fiat in the mere months between the most recent policy renewal and the date of loss. It is, at best, duplicitous for Defendants to, on one hand, tell the insured that the property fully qualifies under State Farm’s underwriting rules for the replacement cost coverage bound and then, with the other, tell the insured that it in fact did not. This is exemplary ambush claims-handling and prima facie bad faith. 25. Each of the form denial letters at issue in this matter expressly points to “wear, tear, and or deterioration” to avoid implicating a covered cause of loss. For example, State Farm’s denial letter for Claim No. 36-84T0-37G expressly points to “wear, tear, and or deterioration” to avoid implicating a covered cause of loss. RE: Claim Number: 36-84T0-37G Policy Number: 96-E6-5192-8 Location of Insured Property: 314 ½ N Husband St, Stillwater, OK 74074 Type of Policy: FP- 8103.3 Special Form 3, Rental Dwell 3 FE-5722 Fungus (Including Mold) Exclusion Endorsement FE-576 Suit Against Us (Oklahoma) Date of Loss: April 19, 2025 Dear Mr. Michael: Thank you for speaking with me on May 23, 2025, when we discussed the damage to your property. Based upon the results of our discussions, site inspection, and investigation, determined there was no accidental direct physical loss by hail and or wind to your dwelling shingled roof, roof appurtenances and exterior wood siding resulting from the weather event on or about April 19, 2025. Our inspection observed damage as the result of wear, tear and or deterioration. Each denial letter uses this exact language to deny the claim—an arbitrary and unsupported attribution of patent storm damage to a non-covered cause of loss, all in accordance with the Scheme. 26. State Farm Weaponizes Engineering Services Against Its Insureds. In addition, State Farm often employs its hand-chosen engineering firms (who are dependent on State Farm for business) to drum up sham reports that rubber-stamp its adjusters’ misrepresentations. In this case, State Farm employed the services of its hired gun, Seek Now, to produce a report on the 412 S. Duck Insured Property. Despite State Farm’s duty of good faith and fair dealing, which it owes Plaintiffs, State Farm has refused to produce the Seek Now report to Plaintiffs; rather, State Farm insists that the Seek Now report it commissioned on Plaintiffs’ Insured Property constitutes “proprietary information” to which Plaintiffs are not entitled. Indeed, Plaintiffs are forced to file this lawsuit in part to obtain the report through discovery. It is axiomatic that an insurance company, acting in accord with its duty of good faith and fair dealing, cannot hide from its insureds information relevant to its denial of a claim. Yet this is how State Farm acted here, and it exemplifies the way State Farm weaponizes its Scheme against its insureds. 27. Each of these aforementioned bad-faith claims handling tactics perpetuates the Scheme and allows State Farm to deny valid property insurance claims. State Farm trains its claims handling personnel to implement these tactics. State Farm trains its captive agents (like Leming) to market, sell, and bind coverage in a way that allows the Scheme to carry forward undetected. 28. The manner in which State Farm mishandled Plaintiffs’ Claim illustrates State Farm’s Scheme and clearly demonstrates State Farm’s bad faith: a. Plaintiffs own twenty-one Insured Properties in the Stillwater, Oklahoma area at issue in this suit. See Section II, above. b. Each Insured Property is insured under its own respective State Farm insurance policy. See Section II, above. c. Each Insured Property was damaged on approximately April 19, 2025. That weekend, a massive storm system caused flash floods and tornadoes across Oklahoma, Texas, and Missouri, which led to at least five deaths. Severe storms packed heavy rain, lightning, hail, and tornadoes across parts of the Oklahoma City metro area and into north and central Texas. The National Weather Service recorded seventeen tornado reports across both states. The National Weather Service confirmed eight tornadoes in Norman, Oklahoma, six of which were EF1s.7 d. Storm damage to the Insured Properties was severe. For example, at 1024 S. Duck, the roof was so heavily damaged that the wood decking was exposed at eaves. Confirmed hail for the date and area in question exceeded one inch in size and reached an inch and a half. The quantity of hail impact points observed exceeded 7 The slow-moving upper system approached the area on April 19, 2025. This, along with strong/moist low-level ascent atop a quasi-stationary boundary, helped initiate widespread thunderstorms across the region mentioned above. Strong wind shear and instability, especially along and ahead of the surface boundary, promoted organized thunderstorms, producing hail, wind and tornadoes. 100 per 100 square foot sample area. The following image shows these hail strikes at the 1024 S. Duck Insured Property:  e. At the 409 S. Duck Insured Property, the laminate fiberglass shingle roof sustained significant hail impact damage at the rate of approximately forty-four hail strikes per 100 square feet such that the current roof cannot be successfully repaired. Light metals displayed clear hail dents at the rate of thirty strikes per square foot with holes showing completely through at least one layer of fiberglass reinforcement.9 f. Similarly, at the 412 S. Duck Insured Property, the roof shows approximately sixty-seven hail impact points per 100 square feet. The hail strikes punctured the fiberglass reinforcement of the laminated shingles, as well as the low, flat SBS modified bitumen roof system. The roof is damaged beyond repair and 8 State Farm blamed this on wind but depreciated the amount well below the policy deductible. It then disclaimed any hail damage by blaming the strikes on “wear, tear, and or deterioration.” 9 State Farm disclaimed any hail damage by blaming the strikes on “wear, tear, and or deterioration.” requires full replacement. The following images show damage to the 412 S. Duck Insured Property:  g. Plaintiffs filed claims for damage to each Insured Property with State Farm. h. Over the following month, State Farm dispatched adjusters to inspect the Insured Properties. State Farm field adjuster Bryce Treat handled most of the inspections of the Insured Properties. i. Treat visited the Insured Properties with Plaintiffs’ roofing contractor. His initial impression of the damage was clear and in line with Plaintiffs’; for example, Treat noted to Plaintiffs’ roofing contractor at the 409 S. Duck Insured Property that the roof was “smoked”—meaning totaled and requiring full replacement. He stated “we can move on to the next one” and quickly moved the team to the next Insured Property without needing further inspection of that totaled roof. 10 State Farm denied all coverage for 412 S. Duck using its form letter that attributed the patent damage to “wear, tear, and/or deterioration.” j. Treat’s impression of the total nature of the damage to all Insured Properties was clear. He told Plaintiff Michael Martin, “I’ll come to your office; I can print checks remotely, so I’ll just print your claims payment checks there for you.” It was clear Treat knew the roofs needed to be replaced and intended to pay Plaintiffs for them accordingly. k. As the month progressed, certain State Farm team managers and Leming began joining Treat on his inspections. Once that occurred, Treat’s communication with Plaintiffs became scant. l. After about a month of inspections, Treat arrived at Plaintiffs office. However, instead of “printing checks” as he’d promised, Treat delivered a stack of State Farm form denial letters. State Farm denied each Claim for damage to each Insured Property. It was clear State Farm team managers had interceded and overridden his decision to total and pay Plaintiffs’ claims. m. When asked about his prior commitment to pay the claims, Treat—dressed in his ubiquitous red “Good Neighbor” polo shirt—crassly laughed it all off. Treat attempted to justify his change in position by stating “usually, what I do is look at the soft metals first. I didn’t find any soft metal damage…” This directly contradicts his statements while on the Insured Property roofs (e.g., “…this one is ‘smoked’…”), as well as the actual condition of the roof metals. For example, the following images show heavily dented roof caps at the 1024 S. Duck (left), 409 S. Duck (middle), and 412 S. Duck (right) Insured Properties: Yet State Farm denied each of these Insured Properties along with the rest of the Insured Properties with a form letter reciting the tired and patently false justification of “wear, tear, and or deterioration”: Based upon the results of our discussions, site inspection, and investigation, determined there was no accidental direct physical loss by hail and or wind to your dwelling shingled roof, roof appurtenances and exterior cement fiber siding resulting from the weather event on or about April 19, 2025. Our inspection observed damage as the result of wear, tear and or deterioration. n. On information and belief, and in accordance with the Scheme, Treat took his field notes to his Team Manager, who denied payment for the necessary roof replacements. He was then forced to walk his field comments back and issue denials for damage he clearly deemed to be (a) covered and (b) sufficient to warrant a full roof replacement. o. Plaintiffs estimate the total amounts State Farm has refused to pay at $616,079 before applicable deductibles. C. State Farm’s Captive Agents Anchor the Scheme. 29. In each instance, State Farm’s Scheme begins with its captive agents (including Leming), who market, sell, procure, and bind (whether at inception and/or renewal11) State Farm homeowners’ insurance to the insured. 30. In doing so, State Farm’s captive agents (like Leming) expressly and/or impliedly represent (i) the property to be insured meets State Farm’s underwriting rules, guidelines, and requirements for the coverage purportedly bound, and (ii) any value (and thus coverage limits) State Farm’s agent calculated for the insured is an accurate reflection of (at least) 100% of the property’s insured value—that is, all components of the insured property are fully covered. Here, in summary and as explained in detail below, Leming expressly told Plaintiff Michael Martin that the coverage he procured for Plaintiffs functioned just like replacement cost coverage and that State Farm would err on the side of totally replacing a damaged roof, even if the claim was questionable. 1. State Farm Captive Agents (like Leming) Owe Underwriting and Procurement Duties 31. Leming’s role creates key legal duties, which Leming (just like any State Farm captive agent) owes to the insured: Leming must always a. use reasonable care, skill, and diligence to procure coverage as the insured requested (and as Leming promised) that meets the insured’s stated needs; b. speak accurately and truthfully when he chooses to speak; and 11 Under Oklahoma law, each annual issuance of the policy at issue involves each of these acts, whether it be the inception of coverage in the first instance or the subsequent renewal thereof. Therefore, even an agent who renews coverage engages in these acts. c. fully disclose all material information to Plaintiffs State Farm’s bad faith claims handling tactics, State Farm’s reliance on undisclosed definitions and standards outside of the Policy, internal and external complaints about State Farm’s handling of wind and hailstorm claims, and other material information any insured would deem reasonable in making a purchasing decision.12 32. Moreover, State Farm considers Leming to be the first line of its underwriting division and, thereby, a steward and arbitrator of its underwriting guidelines, criteria, and rules vis-à-vis whether a property qualifies for coverage bound. In fact, State Farm’s underwriting guidelines state: To assure continued financial stability and competitive rates, the agent and underwriter must carefully select the business we write. The business must be properly insured to value, must have an acceptable loss history, be well maintained, have a roof in good repair, and must meet all the requirements outlined in this guide.13 33. Leming therefore plays a crucial role in the Scheme by and through the marketing, procurement, sale, and binding of State Farm’s insurance products to the 12 Additionally, under Oklahoma law, a duty to speak may arise from a partial disclosure. Thrifty Rent-A-Car Sys., Inc. v. Brown Flight Rental One Corp., 24 F.3d 1190, 1195 (10th Cir. 1994) (the law imposes a duty to speak from a partial disclosure because “the speaker is under a duty to say nothing or to tell the whole truth” (citation and internal quotation marks omitted)); Uptegraft v. Dome Petroleum Corp., 764 P.2d 1350,1353-54 (Okla. 1988) (“Although a party may keep absolute silence and violate no rule of equity, yet, if he volunteers to speak and to convey information which may influence the conduct of the other party, he is bound to disclose the whole truth.”); see also Ervin v. Herb Weaver Ins. Agency, Inc., 2022 WL 22839581 (W.D. Okla. Dec. 28, 2022) (Palk, D.J.). 13 Excerpt from Underwriting Guidance – Homeowners – Underwriting Basics at 1 (located in the public record as Exhibit 10 to the plaintiffs’ Motion to Remand in Vance v. State Farm, 24-CIV-449-SLP, ECF No. 7-10 (W.D. Okla. May 29, 2024). insured \emph{with the warranty that the property in question fully meets State Farm’s underwriting requirements}. 34. State Farm’s captive agents (like Leming) \emph{should} meet these duties (in part) maintaining up-to-date information about the condition of the property to be insured and comparing that to State Farm’s underwriting guidelines, criteria, and rules upon each renewal of coverage.\footnote{The most logical way to do so would be an in-person inspection of the Insured Property prior to the inception of coverage and routinely thereafter to verify the condition and attributes of the Insured Property for the purposes of (a) the agent’s accurate calculation of any insurance values and (b) the agent’s accurate representation that the Insured Property qualifies for coverage under State Farm’s guidelines. Since each renewal is a new sale and contract, State Farm captive agents should maintain a baseline of the property’s condition throughout the insurance relationship.} Indeed, not all buildings automatically qualify for State Farm’s homeowners policies (according to State Farm underwriting rules)—only those which meet those internal underwriting rules constitute a “good risk” for State Farm to insure. This was confirmed by State Farm’s corporate designee for underwriting, Richard Hsiung, in 2022: \begin{table}[h] \centering \begin{tabular}{|p{14cm}|} \hline It that correct? Is that still State Farm’s position, that risks with damage or deteriorated roofs are unacceptable? \\ Mr. Hsiung: & Yes. \\ \hline \end{tabular} \end{table} 15 35. It is Leming—who confirms whether these rules are met with regard to Plaintiffs’ Insured Property. Leming can only make these representations in good faith if he verified the property’s condition. 36. Leming’s role in procuring, selling, and binding Plaintiff’s Policy was crucial to the Scheme: 15 Plaintiffs’ Motion to Remand, \emph{Neph v. State Farm}, 5:25-cv-00774-SLP (W.D. Okla.) ECF No. 13-2: Depo. of State Farm Corporate Designee Hsiung (Aug. 9, 2022), \emph{Stelling v. State Farm}, CJ-2020-329, at 185:20-24. a. Plaintiffs moved coverage for certain Insured Property to State Farm based on Leming’s promises and commitments. Plaintiffs had coverage through another insurer on certain Insured Properties, and Leming asked for the opportunity to earn that business. In doing so, Leming told Plaintiff Michael Martin that “State Farm pays so well and so much that its coverage functions just like full replacement cost value coverage.” Leming assured Plaintiffs that they were purchasing equivalent of full replacement cost value policies based on State Farm’s claims handling, and therefore the distinction did not matter. He warranted the State Farm coverage to be a superior and more robust product. b. Accordingly, and in reliance on Leming’s promises, Plaintiffs switched coverage for the existing Insured Properties to State Farm through its captive agent, Lemming. They then added coverage for each additional Insured Property through independent State Farm policies once added to the portfolio. c. Leming’s role in the underwriting process is clear: for example, on certain proposed properties, Leming reported that he could not bind coverage. He reported that approximately three proposed properties had a flat non-TPO roof, and he could not bind coverage for that kind of roofing product with State Farm. d. Leming further made key, express representations about State Farm’s claims handling. He told Plaintiff Michael Martin that, if he had a roof damage claim on one of the Insured Properties, State Farm would err on the side of finding coverage and would even “total” the roof and pay for it. e. Plaintiffs relied on these representations in moving coverage to State Farm and then asking Leming to procure coverage on newly acquired Insured Properties. 37. Thus, at all relevant times, Leming and State Farm either knew or should have known of any material defect, pre-existing damage, or other condition(s) that would exclude the Insured Property from coverage in violation of State Farm’s underwriting guidelines, rules, and criteria. And, accordingly, if such defect actually existed and was the legitimate basis for the claim denial, Leming and State Farm should have disclosed to Plaintiffs such defect when the Policy issued and/or renewed. 38. Leming’s role in claims handling is also clear. Leming was present for certain inspections of the Insured Properties. Moreover, the following voicemail transcription from State Farm claims handling to Plaintiff Michael Martin instructs Plaintiffs that they must go through Leming in order to view any photographs from adjusters inspections of the Insured Properties: Hey Michael, this is Dion from State Farm claims. I was calling in response to an email you sent to Bryce yesterday afternoon asking about photos or acclaimed documents being accessible through the portal. They are accessible to your agent’s office and your agent, and if you would like to review them, you would have to contact your agent and they can either send them to you or you can review them with the agent in the office. That would be something that the agent would talk to you about, but they’re not accessible just to you directly from the claims office. Obviously, the agent has to be involved to look at those and send any photos to you. If you have any questions, please feel free to give our office a call back or send another email. Otherwise, please contact your agent’s office for any documents and photos that you would like to review. All right. Thank you. 2. Leming’s Breach of Duty Enabled the Scheme. 39. State Farm’s captive agents—like Leming—practically never exercise the requisite level of care, skill, and diligence in verifying the condition of the property against State Farm’s underwriting guidelines. Yet, Leming markets, sells, procures, and binds State Farm coverage to Plaintiffs nonetheless. While this act inherently represents to the insured in each instance that the property in question qualifies for the insurance to be bound and meets the underwriting guidelines governing such coverage, in almost every instance of the Scheme, the agent lacks all practical bases to make such an inherent representation in good faith. Nor does the agent maintain up-to-date information about the insured property and use that information to inform coverage upon renewal. 40. The policy is a contract—one that obligates State Farm to indemnify its insured upon the occurrence of a covered loss. State Farm’s issuance of policy rests on the agent’s certification of the property’s qualifications under State Farm underwriting guidelines, criteria, and rules—a critical representation to both State Farm and the insured: namely, that the property identified in the policy declarations meets the criteria for the coverage prescribed at the time of inception or renewal for which the agent is responsible.16 Consequently, Leming was responsible for these representations in this case. State Farm’s captive agent further represents, at the very least impliedly through the act of selling, procuring, and binding coverage (and, in certain instances, expressly) and/or inherently represents that no condition, pre-existing damage, deterioration, wear-and-tear, or other defect will operate to negate the property’s eligibility for coverage under the policy in the event of a loss. Leming acted accordingly here. 16 This must be true, for the issuance of coverage upon a property that does not qualify at the time would constitute an illusory coverage violation, as well as a violation of State Farm’s own underwriting rules. 41. Most captive State Farm agents (including Leming) have binding authority. That means they instruct State Farm to issue coverage to the insured without State Farm’s prior approval. By virtue of the act of doing so, the agent certifies and represents to both State Farm and the insured that the property meets State Farm’s underwriting rules and criteria and is therefore eligible for coverage. This representation is repeated each time the policy renews, such that the agent represents the property’s eligibility (and, thereby, the absence of any condition that would negate that eligibility), each policy year upon renewal. Leming repeated this representation accordingly in this instance to Plaintiffs (and, thereby, State Farm). 42. If Leming were to find the property fails to quality for coverage (as defined by State Farm’s underwriting rules) at any point in the insurance relationship (e.g., the roof is too old, too worn, in poor condition, or otherwise affected by pre-existing damage), Leming owes an independent duty to report the same to both the insured and to State Farm. This should result in reduction, denial, or cancellation of the insured’s coverage and impact the nature of “100% insurance to value” vis-à-vis the insured property. In fact, Leming did this with certain proposed properties at inception and thereby demonstrated his role in this important representation. 43. Yet, critically, Treat and other adjusters denied Plaintiffs’ Claims on the basis of wear, tear, and/or deterioration. If this is actually true, then Leming took no reasonable care, skill, or diligence to verify the accuracy of his representation that the property fully qualified for State Farm coverage at 100% insurance to value. Moreover, a. Neither Leming nor State Farm ever disclosed to Plaintiffs that any Insured Property was ineligible under State Farm’s underwriting guidelines for the requested coverage for any reason. b. Regardless of whether an inspection occurred, neither Leming nor State Farm took reasonable care, skill, and diligence in maintaining a current understanding of the Insured Property’s condition throughout the course of renewal. c. Neither Leming nor State Farm ever advised Plaintiffs of any defect, pre-existing damage, or other conditions that would exclude the Insured Property under State Farm’s underwriting rules from coverage.17 d. Leming expressly and/or inherently represented to Plaintiffs that the property met State Farm’s underwriting guidelines and qualified for the coverage Agent bound. e. Neither Leming nor State Farm disclosed to Plaintiffs that State Farm had already pre-ordained the denial of any claim for roof damage. 44. Leming marketed, sold, procured, and bound a policy purporting to provide coverage to Plaintiffs, nonetheless. Leming’s blind misrepresentation was a necessary furtherance of the Scheme; State Farm’s agents cannot bind a policy without first representing the property qualifies for coverage. State Farm provides training to its captive agents in accordance with the Scheme, and each State Farm captive agent relies on this uniform training to make the same or similar representations that each Insured Property is 17 As explained above, had Agent identified any such condition, Agent would have been required to report the same to both Plaintiffs and State Farm and adjust coverage accordingly. eligible for the coverage sought under the same State Farm underwriting rules. This uniformity allows State Farm to effectuate its Scheme with consistency and makes Plaintiffs’ case an exemplary instance of the Scheme. 45. Given Agent’s purported expertise and specialized knowledge of insurance policies, Plaintiffs reasonably relied on Leming for the same. D. Leming’s Knowledge of the Scheme 46. State Farm’s captive agents (like Leming) are aware of the Scheme. They are aware of the practical improbability that State Farm will pay a roof claim by the insured. They are aware that, pursuant to the Scheme, State Farm will drum up a justification for outright denial of the claim or for limiting the damage to an amount under the deductible resulting in no payment, or sometimes just above the deductible resulting in a low-ball payment. 47. State Farm’s captive agents (like Leming) are aware State Farm achieves this through an array of bad faith tactics. Further, State Farm agents (like Leming) are aware of (and fail to disclose) other bad faith claims handling tactics inherent to State Farm’s Scheme. These tactics are material to an insured when purchasing an insurance policy; they include State Farm’s pre-ordained attribution of covered damage to roofs to some non-covered cause (e.g., wear and tear, granular loss, deterioration, or defect). 48. Further, State Farm agents (like Leming) are aware of (and fail to disclose) the ways State Farm adjusters further the Scheme. This includes drafting sham estimates blaming patent wind- and hail-storm damage to non-covered causes to avoid paying for roof replacements. In other instances, State Farm adjusters further the Scheme by manipulating the insured’s date of loss to reflect dates on which no hail was detected in the area. State Farm’s agents (like Leming) are fully aware of these bad faith tactics (e.g., from repeated customer complaints and cross-agent back chatter), yet they fail to disclose this (and other) material information about State Farm’s Scheme in violation of duties owed to the insured. 49. Leming knew State Farm purposefully uses hidden definitions, such as “functional damage” as defined by State Farm’s partner-in-fraud HAAG Engineering, of wind- and/or hailstorm damage to deny claims, along with other bad faith tactics described herein, but failed to disclose these to insureds in the Policy or at any point prior to claims adjustment. The “functional damage” definition State Farm uses for hail damage is contained nowhere in State Farm’s homeowners insurance policies. 50. Neither Leming nor State Farm ever advised Plaintiffs of State Farm’s Scheme, including but not limited to State Farm’s internal and clandestine definitions of “hail damage,” “wear and tear,” “granular loss,” “functional damage,” etc. 51. Neither Leming nor State Farm disclosed to Plaintiffs the existence of the Scheme, the Wind/Hail Focus Initiative, or any aspects thereof. 52. State Farm’s agents (like Leming) are motivated to further the Scheme by carrot and stick. On information and belief, the carrot lies in State Farm’s agents’ compensation, which is based in some part on the ratio of losses deriving from policies the specific agent marketed, procured, sold, bound, and renewed. Thus, any corporate initiative designed to improve that loss ratio—e.g., State Farm’s Wind/Hail Focus Initiative and the resultant Scheme to reduce roof spend—only serves to increase the captive agents’ compensation. To this end, State Farm provides its captive agents (like Leming) comprehensive training in skillsets that help them advance the Scheme. 53. Non-confidential documents in the public record, such as Exhibit 6 attached to the August 14, 2023 response pleading in CJ-2021-1741, 18 evidence the Scheme in action. A former State Farm adjuster testified under oath to how the agent’s determination of the condition of the roof at inception or renewal and subsequent denial for “wear and tear” or pre-existing damage are essential in State Farm’s denial of full roof replacements. The State Farm adjuster admitted under oath as follows: everyone on our team did not have any authority anymore to total roofs because we were paying for too many roof claims … when I was told that it is not hail or it’s not new hail, to call it wear and tear to deny a claim, I felt – I felt bad ... I legitimately felt like there was some damage from hail, from new hail that I felt that the roof should be totaled, that I was told to deny the whole thing, and that – that was difficult. Discovery from State Farm filed in the public record reveals that State Farm captive agents are well aware of how hail claims are being adjusted. In Exhibit 6 to the June 14, 2023 pleading, a State Farm captive agent, David Hoffhines, sent the following email: I understand that you are not able to find hail on the date my insured has cell phone pics on? Can we discuss this please?? How do I tell my client that the hail damage marks that were uploaded to the file from contractor are invisible to claims reps and supervisors?? I know the growing trend is for SF to deny hail claims, I’m just curious how do I word this?? 54. State Fam’s Scheme has come under national scrutiny. Recently, the Senate Homeland Security Committee held a hearing on the Insurance Industry’s Natural Disaster 18 Available at https://www.oscn.net/dockets/GetCaseInformation.aspx?db=oklahoma&number=CJ-2021-1741&cmid=3968060 (last visited Nov. 21, 2025). Practices.19 For example, Nick Schroeder, a former licensed adjuster for State Farm and Allstate, testified to bad faith claims handling practices nearly identical to Plaintiffs’ allegations here: More commonly, these changes were simply excluding hail-damaged shingles due to age or wear. In one case involving policyholders Susan and Dennis Carter, I was instructed to deny shingle damage as wear and tear despite visible hail impact marks consistent with adjacent dented metal. Although I provided a hail report confirming activity near the property on the reported date of loss, the claim was reassigned after I refused to amend the estimate to exclude hail damage.20 The wealth of evidence here, as well as what Plaintiffs know will be revealed through discovery, establishes a sinister Scheme by State Farm to defraud insureds such as Plaintiffs. 55. State Farm has continually asserted a blanket disclaimer of its captive agents’ underwriting duties and often states agents are not required to inform insureds about the condition of their home and adjust their coverage accordingly. However, State Farm’s own underwriting reviews and similar underwriting documents have revealed that State farm captive agents are in fact tied to underwriting. State Farm captive agents regularly inform insureds about corrective measures required following roof damage to remain eligible for coverage—or else coverage will be reduced or even cancelled. For example, State Farm issued the following underwriting notice to one of its insureds and advised them of underwriting requirements that needed to be fulfilled to reduce the risk of additional damage to the roof. The notice instructs the insured to contact their State Farm agent regarding such requirements: Important Notice On behalf of State Farm, a representative from a survey company visited your home to obtain additional underwriting information. We believe there are positive measures that should be taken to reduce the risk for loss. The following underwriting requirement(s) must be completed: Replace all boarded, broken or cracked glass in doors and/or windows to reduce the risk of injury or property damage. To reduce the risk of property and liability losses, regularly maintain the exterior of the property. Particular attention needs to be given to the removal of: - miscellaneous personal property. To reduce the risk of additional damage to the roof and/or interior water damage, the roof on the dwelling must be replaced as evidenced by the deteriorated shingles with granule loss. Have a roofing contractor complete the work. Eligible roofing material must be used when roof covering is being replaced. Consult with your agent for additional information on eligible roof types. The outlined requirement(s) present(s) an increase in hazard. Your cooperation with the above underwriting requirement(s) is appreciated. Please provide your agent documentation confirming the underwriting requirement(s) outlined above has been met. This policy will be set to non-renew effective October 21, 2025, unless verification is received. NOTE: The requirement(s) is made solely to help reduce the potential for future losses insured under your policy. However, it is not a guarantee against future losses. Any costs associated with the requirements outlined in this letter will be at your expense. If you have any questions regarding the requirement(s) or the timeline for completion, contact State Farm Agent Carla Holzrichter at (918) 367-5547. Thus, State Farm’s downplaying of agent underwriting responsibilities is a smokescreen. IV. FRAUDULENT CONCEALMENT 56. All allegations in the preceding paragraphs of this Petition are fully incorporated as if each were fully set forth herein. 57. At all relevant times, Defendants concealed material facts about State Farm’s Scheme from Plaintiffs. This concealment protected and perpetuated the Scheme, such that Plaintiffs had no way of ascertaining the Scheme or the accrual of any cause of action against Defendants. 58. The Scheme is an artifice, which State Farm designed to be hidden from its insureds’ discovery. To wit, the inherent nature of State Farm’s “good neighbor” promises—the duty of good faith and fair dealing State Farm owes its insureds—makes the artifice appear reliable. Insureds of ordinary prudence have no means of discovering the Scheme or their right to pursue recovery under the law. 59. Defendants’ fraudulent concealment tolls the running of any applicable statute of limitations. V. COUNTS COUNT I: BREACH OF CONTRACT Against Defendant State Farm 60. All allegations in the preceding paragraphs of this Petition are fully incorporated as if each were fully set forth herein. 61. Plaintiffs entered into a contract of insurance (“Policy”) with State Farm to provide insurance for each Insured Property. Each respective Policy was in full force and effect at all material times hereto. 62. Plaintiffs provided proper and timely notice to State Farm of each Claim for damage arising from wind and/or hail, which caused significant damage to each Insured Property. 63. Each Policy's coverage includes all fortuitous losses—which necessarily includes damage sustained by wind and/or hail. Each Policy's language does not define, distinguish, or limit wind and/or hail damage in any fashion. 64. Plaintiffs complied in all material ways with the terms and conditions of each Policy. 65. State Farm breached its contractual obligations under the terms and conditions of each Policy by failing to pay Plaintiffs all benefits owed under the terms and conditions of the Policy and for wrongfully underpaying and denying portions of the Claim. 66. Consistent with State Farm's pervasive, state-wide fraudulent Scheme described in detail throughout this Petition, State Farm actively, intentionally, and fraudulently concealed its Scheme to deny and/or underpay valid hail damage claims from Plaintiffs. This concealment is an inherent and important aspect of State Farm's Scheme; as State Farm knew its Scheme would work only if it was kept secret. 67. As a result of State Farm's breach of contract and other wrongful conduct, Plaintiffs incurred damages. COUNT II: BREACH OF THE DUTY OF GOOD FAITH AND FAIR DEALING ("Bad Faith") Against Defendant State Farm 68. All allegations in the preceding paragraphs of this Petition are fully incorporated as if each were fully set forth herein. 69. At all relevant times hereto, State Farm owed Plaintiffs a duty of good faith and fair dealing. 70. State Farm knowingly, intentionally, purposefully, wrongfully, and repeatedly breached its duty to deal fairly and in good faith by engaging in at least the following acts and omissions: a. knowingly engaging in a pattern and practice of i. denial-oriented investigations and claims-handling practices; ii. arbitrary and capricious claims handling; iii. denying and or underpaying indemnity payments owed to its first-party insureds on valid hail claims, including Plaintiffs; iv. withholding pertinent benefits, coverages, and other provisions due to Plaintiffs under the terms and conditions of the Policy in violation of the Unfair Claims Settlement Practices Act, 36 O.S. §§1250.1-1250.16; v. limiting and/or denying rights inherent to Plaintiffs; vi. recklessly disregarding said rights; vii. forcing Plaintiffs to retain counsel to recover insurance benefits owed under the terms and conditions of the Policy; viii. manipulating claims to ensure damages fall below the policy deductible; ix. ignoring covered hail and windstorm damage; x. engaging in the pattern and practice of denying full roof replacement claims by asserting pre-existing damages and faulty installation without a pre-inception property inspection and/or without reasonably updated knowledge of the pre-loss condition of the subject property; xi. implementing the Wind/Hail Focus Initiative with the goal of reducing indemnity payments and deny full roof replacements to policyholders like the Plaintiffs on valid wind and hail claims; xii. utilizing biased third-party adjusters and/or engineers who further implement the Scheme outlined herein by consistently writing reports and estimates to deny full roof replacements on valid wind and hail claims; b. knowingly and purposely failing to i. maintain current information as to the condition of the Insured Property prior to the loss; ii. notify Plaintiffs, both prior to and at the inception and renewal of the Policy, of any pre-existing damage and other conditions that, if a claim were made, would limit coverage; iii. communicate all coverages and benefits applicable to the Claim; iv. perform a proper, timely, fair, and objective investigation of the Claim; v. pay the full and fair amount for the hail damage sustained to the Insured Property in accordance with the Policy's terms and conditions; vi. base its denial of the Claim on a valid, accurate, and reasonable grounds; vii. disclose the Scheme to Plaintiffs; and viii. disclose State Farm's lack of compliance with its own underwriting guidelines, policies, and procedures in denying coverage to Plaintiffs. 71. State Farm's conduct, as described above, constitutes bad faith and is a material breach of the terms and conditions of the Policy and its underlying insurance contract between the parties. State Farm has no reasonable basis in its refusal to recognize and pay Plaintiffs as per the Policy for damages caused by the wind and hail damage to the Insured Properties. 72. As a consequence of State Farm's breach of the duty of good faith and fair dealing, Plaintiffs sustained damages, including deprivation of monies rightfully belonging to Plaintiffs, and ordinary or garden variety harm of anger, stress, worry, physical and emotional suffering that naturally results from an insurance failure. 73. State Farm's conduct was intentional, willful, malicious, and/or in reckless disregard of the rights of others. State Farm's actions during the handling of the Claims demonstrate it acted intentionally and with malice and breached its duty to deal fairly and in good faith. State Farm’s actions were consistent with an overall collective corporate goal of decreasing indemnity losses and thereby increasing profits through the systematic underpayment and denial of claims. The Scheme is sufficiently egregious in nature so as to warrant the imposition of punitive damages. State Farm’s Scheme demonstrates an enterprise-wide “pattern” theory of bad-faith conduct, liability for which is cognizable under Oklahoma law. See 12 Okla. Stat. § 2406; Vining v. Enter. Fin. Group, 148 F.3d 1206, 1218 (10th Cir. 1998) (where Plaintiffs sought to prove insured’s pattern and practice of bad faith conduct, evidence regarding other insureds was relevant to show defendant “acted in this case under Federal Rule of Evidence 406 (habit)”; see also Metzger v. Am. Fid. Assur. Co., 2007 WL 4342082, at *1 (W.D. Okla. Dec. 7, 2007); Markham v. National States Ins. Co., 122 Fed. Appx. 392 (10th Cir. 2004) (evidence of nation-wide rescission practice supported bad faith); Barnes v. Okla. Farm Bur. Mut. Ins. Co., 2000 OK 55, 11 P.3d 162, 170 (“insurer’s unreasonable treatment of Barnes was not an isolated incident, but the same or similar tactic was used by insurer repeatedly with other insureds”; awarding actual and punitive damages); Copeland v. Tela Corp., 2003 OK CIV APP 98, ¶ 3, 79 P.3d 1128 (confirming no abuse of discretion in allowing evidence of habit evidence under 12 O.S. § 2406 to show pattern and practice conduct.); Jones v. Farmers Ins. Co., Inc., 2012 WL 12863976 (W.D. Okla) (court holds that similar claims are relevant to Plaintiffs’ contract claim and the claim of bad faith in that they may show a pattern and practice). 74. State Farm enjoyed increased financial benefits and ill-gotten gains as a direct result of the wrongful conduct described above herein, which resulted in the injury to Plaintiffs. COUNT III: NEGLIGENT PROCUREMENT OF INSURANCE Against Agent 75. All allegations in the preceding paragraphs of this Petition are fully incorporated as if each were fully set forth herein. 76. At all material times hereto, Agent acted as State Farm's agent and/or employee. State Farm is thereby vicariously liable for the Agent's conduct. 77. In procuring the Policy, Agent had a duty to a. use reasonable care, skill, and diligence to procure coverage as the insured requested that meets the insured's stated needs; b. use reasonable care, skill, and diligence in undertaking the calculation of any insurance values; c. speak accurately and truthfully by informing Plaintiffs of all coverages, advising Plaintiffs of the benefits, risks, limitations and exclusions thereof, and perform a reasonable inspection of the Insured Property prior to procuring the coverage and thereafter upon renewal to ensure no changes to the Policy were necessary or required; and d. Disclose all material facts with respect to the Scheme as outlined within this Petition. 78. Agent breached Agent's duty owed to Plaintiffs by: a. Knowingly and purposefully procuring and renewing i. Policies that failed to provided coverage as promised; ii. coverage deviating substantially and materially from that which Plaintiffs requested; iii. Policies that did not accurately reflect the replacement cost of the Insured Property (i.e., an amount that was 100% insurance to value as represented), despite Leming's representations to the contrary; iv. Policies that, as written, did not provide coverage to fully restore the Insured Property back to its pre-loss condition, despite Leming's representations to the contrary; b. Failing to i. follow and abide by State Farm's underwriting policies/guidelines; ii. perform all necessary inspections of the Insured Property; iii. confirm the accuracy of the pre-filled information provided by State Farm's estimating tool; iv. disclose pre-existing damage to the Insured Property; v. verify whether its representation to State Farm and Plaintiffs that the Insured Property (including the roof) was in good condition was accurate; vi. procure and renew a policy that provided the requested coverage for all fortuitous losses; and vii. disclose all material facts of the Scheme as outlined within this Petition. 79. Plaintiffs relied on Agent’s representations to substantial detriment. 80. As a result of Defendants’ conduct, Plaintiffs sustained damages, including deprivation of monies rightfully belonging to Plaintiffs, and ordinary or garden variety harm of anger, stress, worry, physical and emotional suffering. 81. Defendants’ conduct was intentional, willful, malicious and in reckless disregard of the rights of others and is sufficiently egregious in nature so as to warrant the imposition of punitive damages. Defendants acted intentionally, and with malice and, breached duties owed to Plaintiffs. Defendants’ actions were consistent with their overall collective corporate goal of increasing profits through the systematic underpayment and denial of claims. COUNT IV: CONSTRUCTIVE FRAUD AND NEGLIGENCE MISREPRESENTATION Against All Defendants 82. All allegations in the preceding paragraphs of this Petition are fully incorporated as if each were fully set forth herein. 83. Defendants owed Plaintiffs a legal and/or equitable duty to disclose all material facts that may arise out of their relationship as insurer and insured. 84. The concealment of a material fact which substantially affects another person constitutes fraud. Fraudulent representations may consist of half-truths calculated to deceive, and a representation literally true is actionable if used to create an impression substantially false. Where the peculiar circumstances give rise to a duty on the part of one of the parties to a contract *to disclose material facts and the party remains silent to his or her benefit and to the other party's detriment*, the failure to speak constitutes fraud. 85. "[A] variety of facts and circumstances [] will give rise to a duty to disclose material facts." The *Sutton* Court reiterated that it has "consistently found the existence of the requisite circumstances, *i.e.*, that which is necessary to create a duty to disclose, when the offending party created a false impression concerning material facts that was relied upon by the other party to his detriment and to the benefit of the offending party." *Id* at 15. 86. A negligent or innocent misrepresentation or concealment for constructive fraud occurs when one who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information. Negligent misrepresentation can also be based on a material omission. 87. Defendants owed specific duties to Plaintiffs. These duties are encompassed in State Farm’s duty of good faith and fair dealing owed to its insureds, as well as specific duties Agent owed Plaintiffs—a duty to exercise reasonable diligence and skill in obtaining and accurately notifying of the nature and character of the insurance procured, the duty to use reasonable care, skill, and diligence, the duty to speak accurately and truthfully, and the duty to disclose all material facts relating to the Scheme as outlined within this Petition. 88. Defendants breached this duty by misrepresenting, concealing, or omitting pertinent material facts from Plaintiffs, including (but not limited to) the following: a. Defendants misrepresented the Insured Property met all underwriting requirements, that all property inspections had occurred, and that any values Agent calculated were accurate and commensurate with reconstruction costs such that the coverage would fully restore, replace and/or repair the Insured Property (including its roof) in the event of a loss by a covered event. b. Defendants misrepresented that the Insured Property (and, specifically, its roof) was eligible for the coverage purportedly written and represented by Leming. c. Defendants failed to disclose that pre-existing issues with the Insured Property would either prevent issuance of the coverage or limit coverage for any damage during the Policy period. d. Agent misrepresented the procurement of the coverage Plaintiffs requested. e. Defendants misrepresented that the Policy covered all fortuitous losses and that weather-related damage (even cosmetic)—big or small—was fully covered under the Policy. f. Defendants failed to disclose all material information to an insured about State Farm’s bad faith claims handling tactics, its reliance on undisclosed definitions and standards outside of the Policy, internal and external complaints about State Farm’s handling of wind and hailstorm claims, and other material information any insured would deem reasonable in making a purchasing decision. g. Defendants failed to disclose to Plaintiffs any of the above misrepresentations and/or omissions, any facts underlying these misrepresentations, or any material facts regarding the Scheme, including the Wind/Hail Focus Initiative, implemented with the goal of reducing indemnity payments to policyholders like the Plaintiffs on valid wind and hail claims or State Farm’s use of biased third-party adjusters and/or engineers who further implement the Scheme outlined herein by consistently writing reports and estimates to deny full roof replacements on valid wind and hail claims. h. Agent failed to act as promised in filing claims on Plaintiffs’ behalf. 89. Nevertheless, Defendants sold and renewed coverage to Plaintiffs knowing Plaintiffs would rely on such material misrepresentations. 90. As a result of both State Farm and Agent’s breach of duty, each gained an advantage by misleading Plaintiffs to substantial detriment and prejudice. These breaches of duty induced Plaintiffs to accept, purchase, and renew the State Farm Policies. 91. State Farm and Agent’s misrepresentations constitute constructive fraud. 92. At all relevant times, Agent was State Farm’s employee and/or agent. 93. As a result of the Defendants’ constructive fraud, Plaintiffs sustained damages, including deprivation of monies rightfully belonging to Plaintiffs, and ordinary or garden variety harm of anger, stress, worry, physical and emotional suffering. 94. Defendants’ conduct was intentional, willful, malicious, and in reckless disregard of the rights of others, and/or was grossly negligent, and is sufficiently egregious in nature so as to warrant the imposition of punitive damages. VI. PRAYER FOR RELIEF WHEREFORE, this Court should enter judgment on behalf of Plaintiffs against all Defendants for: (a) Monetary relief aggregating in excess of $250,000.00, excluding interest, statutory or punitive damages and penalties, and attorney fees and costs; (b) Punitive damages under Oklahoma law; (c) Disgorgement of the increased financial benefits derived by any and/or all of the Defendants as a direct result of the Defendants’ wrongful conduct; and (d) Prejudgment interests, costs and attorneys’ fees. Respectfully submitted, Reggie N. Whitten, OBA No. 9576 Michael Burrage, OBA No. 1350 Blake Sonne, OBA No. 20341 Hannah Whitten, OBA No. 35261 John S. Sanders, OBA No. 34990 Jake Denne, OBA No. 35097 WHITTEN BURRAGE 512 North Broadway Avenue, Suite 300 Oklahoma City, OK 73102 Office: 405.516.7800 Facsimile: 405.516.7859 [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] Attorneys for Plaintiffs ATTORNEYS’ LIEN CLAIMED JURY TRIAL DEMANDED